[Congressional Record Volume 141, Number 130 (Saturday, August 5, 1995)]
[Senate]
[Pages S11640-S11708]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                THE PERSONAL RESPONSIBILITY ACT OF 1995

                                 ______


                  DOLE (AND OTHERS) AMENDMENT NO. 2280

  Mr. DOLE (for himself, Mr. Packwood, Mr. Lott, Mr. Nickles, Mr. 
Cochran, Mr. Mack, Mr. D'Amato, Mr. Thurmond, Mr. Abraham, Mr. Bennett, 
Mr. Bond, Mr. Brown, Mr. DeWine, Mr. Frist, Mr. Gorton, Mr. Grassley, 
Mr. Gregg, Mr. Hatch, Mr. Hatfield, Mr. Helms, Mrs. Hutchison, Mr. 
Inhofe, Mr. McCain, Mr. Murkowski, Mr. Pressler, Mr. Roth, Mr. 
Santorum, Mr. Shelby, Mr. Simpson, Mr. Stevens, Mr. Thomas, Mr. 
Thompson, and Mr. Warner) proposed an amendment to the bill (H.R. 4) to 
restore the American family, reduce illegitimacy, control welfare 
spending, and reduce welfare dependence; as follows:
       On page 1, line 3, of the bill, after ``SECTION 1.'', 
     strike all through the end and insert the following:

     SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Work 
     Opportunity Act of 1995''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

   TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

Sec. 100. References to Social Security Act.
Sec. 101. Block grants to States.
Sec. 102. Services provided by charitable, religious, or private 
              organizations.
Sec. 103. Limitations on use of financial assistance for certain 
              purposes.
Sec. 104. Continued application of current standards under medicaid 
              program.
Sec. 105. Reduction in personnel.
Sec. 106. Conforming amendments to the Social Security Act.
Sec. 107. Conforming amendments to the food stamp act of 1977 and 
              related provisions.
Sec. 108. Conforming amendments to other laws.
Sec. 109. Secretarial submission of legislative proposal for technical 
              and conforming amendments.
Sec. 110. Effective date; transition rule.

                 TITLE II--SUPPLEMENTAL SECURITY INCOME

Sec. 200. Reference to Social Security Act.

                  Subtitle A--Eligibility Restrictions

Sec. 201. Denial of supplemental security income benefits by reason of 
              disability to drug addicts and alcoholics.
Sec. 202. Denial of SSI benefits for 10 years to individuals found to 
              have fraudulently misrepresented residence in order to 
              obtain benefits simultaneously in 2 or more States.
Sec. 203. Denial of SSI benefits for fugitive felons and probation and 
              parole violators.
Sec. 204. Effective dates; application to current recipients.

               Subtitle B--Benefits for Disabled Children

Sec. 211. Restrictions on eligibility for benefits.
Sec. 212. Continuing disability reviews.
Sec. 213. Treatment requirements for disabled individuals under the age 
              of 18.

         Subtitle C--Study of Disability Determination Process

Sec. 221. Study of disability determination process.

      Subtitle D--National Commission on the Future of Disability

Sec. 231. Establishment.
Sec. 232. Duties of the Commission.
Sec. 233. Membership.
Sec. 234. Staff and support services.
Sec. 235. Powers of Commission.
Sec. 236. Reports.
Sec. 237. Termination.

               Subtitle E--State Supplementation Programs

Sec. 241. Repeal of maintenance of effort requirements applicable to 
              optional State programs for supplementation of SSI 
              benefits.

                     TITLE III--FOOD STAMP PROGRAM

                     Subtitle A--Food Stamp Reform

Sec. 301. Certification period.
Sec. 302. Treatment of children living at home.
Sec. 303. Optional additional criteria for separate household 
              determinations.
Sec. 304. Adjustment of thrifty food plan.
Sec. 305. Definition of homeless individual.
Sec. 306. State options in regulations.
Sec. 307. Earnings of students.
Sec. 308. Energy assistance.
Sec. 309. Deductions from income.
Sec. 310. Amount of vehicle asset limitation.
Sec. 311. Benefits for aliens.
Sec. 312. Disqualification.
Sec. 313. Caretaker exemption.
Sec. 314. Employment and training.
Sec. 315. Comparable treatment for disqualification.
Sec. 316. Cooperation with child support agencies.
Sec. 317. Disqualification for child support arrears.
Sec. 318. Permanent disqualification for participating in 2 or more 
              States.
Sec. 319. Work requirement.
Sec. 320. Electronic benefit transfers.
Sec. 321. Minimum benefit.
Sec. 322. Benefits on recertification.
Sec. 323. Optional combined allotment for expedited households.
Sec. 324. Failure to comply with other welfare and public assistance 
              programs.
Sec. 325. Allotments for households residing in institutions.
Sec. 326. Operation of food stamp offices.
Sec. 327. State employee and training standards.
Sec. 328. Exchange of law enforcement information.
Sec. 329. Expedited coupon service.
Sec. 330. Fair hearings.
Sec. 331. Income and eligibility verification system.
Sec. 332. Collection of overissuances.
Sec. 333. Termination of Federal match for optional information 
              activities.
Sec. 334. Standards for administration.
Sec. 335. Work supplementation or support program.
Sec. 336. Waiver authority.
Sec. 337. Authorization of pilot projects.
Sec. 338. Response to waivers.
Sec. 339. Private sector employment initiatives.
Sec. 340. Reauthorization of appropriations.
Sec. 341. Reauthorization of Puerto Rico nutrition assistance program.
Sec. 342. Simplified food stamp program.
Sec. 343. Optional State food assistance block grant.
Sec. 344. Effective date.

                 Subtitle B--Anti-Fraud and Trafficking

Sec. 351. Expanded definition of coupon.
Sec. 352. Doubled penalties for violating food stamp program 
              requirements.
Sec. 353. Authority to establish authorization periods.
Sec. 354. Specific period for prohibiting participation of stores based 
              on lack of business integrity.
Sec. 355. Information for verifying eligibility for authorization.

[[Page S11641]]

Sec. 356. Waiting period for stores that initially fail to meet 
              authorization criteria.
Sec. 357. Bases for suspensions and disqualifications.
Sec. 358. Disqualification of stores pending judicial and 
              administrative review.
Sec. 359. Disqualification of retailers who are disqualified under the 
              WIC program.
Sec. 360. Permanent debarment of retailers who intentionally submit 
              falsified applications.
Sec. 361. Expanded criminal forfeiture for violations.
Sec. 362. Effective date.

                   TITLE IV--CHILD NUTRITION PROGRAMS

                    Subtitle A--Reimbursement Rates

Sec. 401. Termination of additional payment for lunches served in high 
              free and reduced price participation schools.
Sec. 402. Value of food assistance.
Sec. 403. Lunches, breakfasts, and supplements.
Sec. 404. Summer food service program for children.
Sec. 405. Special milk program.
Sec. 406. Free and reduced price breakfasts.
Sec. 407. Conforming reimbursement for paid breakfasts and lunches.

                       Subtitle B--Grant Programs

Sec. 411. School breakfast startup grants.
Sec. 412. Nutrition education and training programs.
Sec. 413. Effective date.

                      Subtitle C--Other Amendments

Sec. 421. Free and reduced price policy statement.
Sec. 422. Summer food service program for children.
Sec. 423. Child and adult care food program.
Sec. 424. Reducing required reports to State agencies and schools.

                      Subtitle D--Reauthorization

Sec. 431. Commodity distribution program; commodity supplemental food 
              program.
Sec. 432. Emergency food assistance program.
Sec. 433. Soup kitchens program.
Sec. 434. National commodity processing.
Sec. 435. Commodity supplemental food program.

                          TITLE V--NONCITIZENS

Sec. 501. State option to prohibit assistance for certain aliens.
Sec. 502. Deemed income requirement for Federal and federally funded 
              programs.
Sec. 503. Limited eligibility of noncitizens for SSI benefits.

                          TITLE VI--CHILD CARE

Sec. 601. Short title.
Sec. 602. Amendments to the Child Care and Development Block Grant Act 
              of 1990.
Sec. 603. Repeals and technical and conforming amendments.
 TITLE VII--WORKFORCE DEVELOPMENT AND WORKFORCE PREPARATION ACTIVITIES
                     Subtitle A--General Provisions

Sec. 701. Short title.
Sec. 702. Findings and purposes.
Sec. 703. Definitions.

          Subtitle B--Statewide Workforce Development Systems

          Chapter 1--Provisions For States and Other Entities

Sec. 711. Statewide workforce development systems established.
Sec. 712. State allotments.
Sec. 713. State apportionment by activity.
Sec. 714. State plans.
Sec. 715. State workforce development boards.
Sec. 716. Use of funds.
Sec. 717. Indian workforce development activities.
Sec. 718. Grants to outlying areas.

                      Chapter 2--Local Provisions

Sec. 721. Local apportionment by activity.
Sec. 722. Distribution for secondary school vocational education.
Sec. 723. Distribution for postsecondary and adult vocational 
              education.
Sec. 724. Distribution for adult education.
Sec. 725. Special rule for minimal allocation.
Sec. 726. Redistribution.
Sec. 727. Local application for workforce education activities.
Sec. 728. Local partnerships, agreements, and workforce development 
              boards.

                       Chapter 3--Administration

Sec. 731. Accountability.
Sec. 732. Incentives and sanctions.
Sec. 733. Unemployment trust fund.
Sec. 734. Authorization of appropriations.
Sec. 735. Effective date.

 Subtitle C--Job Corps and Other Workforce Preparation Activities for 
                             At-Risk Youth

                Chapter 1--General Job Corps Provisions

Sec. 741. Purposes.
Sec. 742. Definitions.
Sec. 743. General authority.
Sec. 744. Individuals eligible for the Job Corps.
Sec. 745. Screening and selection of applicants.
Sec. 746. Enrollment and assignment.
Sec. 747. Job Corps centers.
Sec. 748. Program activities.
Sec. 749. Support.
Sec. 750. Operating plan.
Sec. 751. Standards of conduct.
Sec. 752. Community participation.
Sec. 753. Counseling and placement.
Sec. 754. Leases and sales of centers.
Sec. 755. Closure of Job Corps centers.
Sec. 756. Interim operating plans for Job Corps centers.
Sec. 757. Effective date.

  Chapter 2--Other Workforce Preparation Activities for At-Risk Youth

Sec. 759. Workforce preparation activities for at-risk youth.

                   Subtitle D--Transition Provisions

Sec. 761. Waivers.
Sec. 762. Interim State plans.
Sec. 763. Applications and plans under covered Acts.
Sec. 764. Interim administration of school-to-work programs.
Sec. 765. Interim authorizations of appropriations.

                    Subtitle E--National Activities

Sec. 771. Federal Partnership.
Sec. 772. National assessment of vocational education programs.
Sec. 773. Labor market information.
Sec. 774. National Center for Research in Education and Workforce 
              Development.
Sec. 775. Transfers to Federal Partnership.
Sec. 776. Transfers to other Federal agencies and offices.
Sec. 777. Elimination of certain offices.

Subtitle F--Repeals of Employment and Training and Vocational and Adult 
                           Education Programs

Sec. 781. Repeals.
Sec. 782. Conforming amendments.

          TITLE VIII--WORKFORCE DEVELOPMENT-RELATED ACTIVITIES

        Subtitle A--Amendments to the Rehabilitation Act of 1973

Sec. 801. References.
Sec. 802. Findings and purposes.
Sec. 803. Consolidated rehabilitation plan.
Sec. 804. Definitions.
Sec. 805. Administration.
Sec. 806. Reports.
Sec. 807. Evaluation.
Sec. 808. Declaration of policy.
Sec. 809. State plans.
Sec. 810. Individualized employment plans.
Sec. 811. Scope of vocational rehabilitation services.
Sec. 812. State Rehabilitation Advisory Council.
Sec. 813. Evaluation standards and performance indicators.
Sec. 814. Repeals.
Sec. 815. Effective date.

       Subtitle B--Amendments to Immigration and Nationality Act

Sec. 821. Prohibition on use of funds for certain employment 
              activities.

                        TITLE IX--CHILD SUPPORT

Sec. 900. Reference to Social Security Act.

     Subtitle A--Eligibility for Services; Distribution of Payments

Sec. 901. State obligation to provide child support enforcement 
              services.
Sec. 902. Distribution of child support collections.
Sec. 903. Rights to notification and hearings.
Sec. 904. Privacy safeguards.

                  Subtitle B--Locate and Case Tracking

Sec. 911. State Case Registry.
Sec. 912. Collection and disbursement of support payments.
Sec. 913. State Directory of New Hires.
Sec. 914. Amendments concerning income withholding.
Sec. 915. Locator information from interstate networks.
Sec. 916. Expansion of the Federal parent locator service.
Sec. 917. Collection and use of social security numbers for use in 
              child support enforcement.

         Subtitle C--Streamlining and Uniformity of Procedures

Sec. 921. Adoption of uniform State laws.
Sec. 922. Improvements to full faith and credit for child support 
              orders.
Sec. 923. Administrative enforcement in interstate cases.
Sec. 924. Use of forms in interstate enforcement.
Sec. 925. State laws providing expedited procedures.

                  Subtitle D--Paternity Establishment

Sec. 931. State laws concerning paternity establishment.
Sec. 932. Outreach for voluntary paternity establishment.
Sec. 933. Cooperation by applicants for and recipients of temporary 
              family assistance.

             Subtitle E--Program Administration and Funding

Sec. 941. Performance-based incentives and penalties.
Sec. 942. Federal and State reviews and audits.
Sec. 943. Required reporting procedures.
Sec. 944. Automated data processing requirements.
Sec. 945. Technical assistance.
Sec. 946. Reports and data collection by the Secretary.

      Subtitle F--Establishment and Modification of Support Orders

Sec. 951. National Child Support Guidelines Commission.
Sec. 952. Simplified process for review and adjustment of child support 
              orders.

[[Page S11642]]

Sec. 953. Furnishing consumer reports for certain purposes relating to 
              child support.
Sec. 954. Nonliability for depository institutions providing financial 
              records to State child support enforcement agencies in 
              child support cases.

               Subtitle G--Enforcement of Support Orders

Sec. 961. Internal Revenue Service collection of arrearages.
Sec. 962. Authority to collect support from Federal employees.
Sec. 963. Enforcement of child support obligations of members of the 
              Armed Forces.
Sec. 964. Voiding of fraudulent transfers.
Sec. 965. Work requirement for persons owing child support.
Sec. 966. Definition of support order.
Sec. 967. Reporting arrearages to credit bureaus.
Sec. 968. Liens.
Sec. 969. State law authorizing suspension of licenses.
Sec. 970. Denial of passports for nonpayment of child support.
Sec. 971. International child support enforcement.

                      Subtitle H--Medical Support

Sec. 975. Technical correction to ERISA definition of medical child 
              support order.
Sec. 976. Enforcement of orders for health care coverage.

Subtitle I--Enhancing Responsibility and Opportunity for Nonresidential 
                                Parents

Sec. 981. Grants to States for access and visitation programs.

                    Subtitle J--Effect of Enactment

Sec. 991. Effective dates.

                   TITLE X--REFORM OF PUBLIC HOUSING

Sec. 1001. Ceiling rents.
Sec. 1002. Definition of adjusted income for public housing.
Sec. 1003. Failure to comply with other welfare and public assistance 
              programs.
Sec. 1004. Applicability to Indian housing.
Sec. 1005. Implementation.
Sec. 1006. Effective date.
   TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

     SEC. 100. REFERENCES TO SOCIAL SECURITY ACT.

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

     SEC. 101. BLOCK GRANTS TO STATES.

       (a) Repeals.--
       (1) In general.--Parts A and F of title IV (42 U.S.C. 601 
     et seq. and 682 et seq.) are hereby repealed.
       (2) Rules and regulations.--The Secretary of Health and 
     Human Services shall ensure that any rules and regulations 
     relating to the provisions of law repealed in paragraph (1) 
     shall cease to have effect on and after the date of the 
     repeal of such provisions.
       (b) Block Grants to States for Temporary Assistance for 
     Needy Families With Minor Children.--Title IV (42 U.S.C. 601 
     et seq.) is amended by inserting before part B the following:

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

     ``SEC. 400. NO INDIVIDUAL ENTITLEMENT.

       ``Notwithstanding any other provision of law, no individual 
     is entitled to any assistance under this part.

     ``SEC. 401. PURPOSE.

       ``The purpose of this part is to increase the flexibility 
     of States in operating a program designed to--
       ``(1) provide assistance to needy families with minor 
     children;
       ``(2) provide job preparation and opportunities for such 
     families; and
       ``(3) prevent and reduce the incidence of out-of-wedlock 
     pregnancies.

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

       ``(a) In General.--As used in this part, the term `eligible 
     State' means, with respect to a fiscal year, a State that has 
     submitted to the Secretary a plan that includes the 
     following:
       ``(1) Outline of family assistance program.--A written 
     document that outlines how the State intends to do the 
     following:
       ``(A) Conduct a program designed to serve all political 
     subdivisions in the State to--
       ``(i) provide assistance to needy families with not less 
     than 1 minor child; and
       ``(ii) provide a parent or caretaker in such families with 
     work experience, assistance in finding employment, and other 
     work preparation activities and support services that the 
     State considers appropriate to enable such families to leave 
     the program and become self-sufficient.
       ``(B) Require a parent or caretaker receiving assistance 
     under the program to engage in work (as defined by the State) 
     when the State determines the parent or caretaker is ready to 
     engage in work, or after 24 months (whether or not 
     consecutive) of receiving assistance under the program, 
     whichever is earlier.
       ``(C) Satisfy the minimum participation rates specified in 
     section 404.
       ``(D) Treat--
       ``(i) families with minor children moving into the State 
     from another State; and
       ``(ii) noncitizens of the United States.
       ``(E) Safeguard and restrict the use and disclosure of 
     information about individuals and families receiving 
     assistance under the program.
       ``(F) Establish goals and take action to prevent and reduce 
     the incidence of out-of-wedlock pregnancies, with special 
     emphasis on teenage pregnancies.
       ``(2) Certification that the state will operate a child 
     support enforcement program.--A certification by the chief 
     executive officer of the State that, during the fiscal year, 
     the State will operate a child support enforcement program 
     under the State plan approved under part D.
       ``(3) Certification that the state will operate a child 
     protection program.--A certification by the chief executive 
     officer of the State that, during the fiscal year, the State 
     will operate a child protection program under the State plan 
     approved under part B.
       ``(4) Certification that the state will operate a foster 
     care and adoption assistance program.--A certification by the 
     chief executive officer of the State that, during the fiscal 
     year, the State will operate a foster care and adoption 
     assistance program under the State plan approved under part 
     E.
       ``(5) Certification that the state will participate in the 
     income and eligibility verification system.--A certification 
     by the chief executive officer of the State that, during the 
     fiscal year, the State will participate in the income and 
     eligibility verification system required by section 1137.
       ``(6) Certification of the administration of the program.--
     A certification by the chief executive officer of the State 
     specifying which State agency or agencies are responsible for 
     the administration and supervision of the State program for 
     the fiscal year.
       ``(7) Certification that required reports will be 
     submitted.--A certification by the chief executive officer of 
     the State that the State shall provide the Secretary with any 
     reports required under this part.
       ``(8) Estimate of fiscal year state and local 
     expenditures.--An estimate of the total amount of State and 
     local expenditures under the State program for the fiscal 
     year.
       ``(b) Certification That the State Will Provide Access to 
     Indians.--
       ``(1) In general.--In recognition of the Federal 
     Government's trust responsibility to, and government-to-
     government relationship with, Indian tribes, the Secretary 
     shall ensure that Indians receive at least their equitable 
     share of services under the State program, by requiring a 
     certification by the chief executive officer of each State 
     described in paragraph (2) that, during the fiscal year, the 
     State shall provide Indians in each Indian tribe that does 
     not have a tribal family assistance plan approved under 
     section 414 for a fiscal year with equitable access to 
     assistance under the State program funded under this part.
       ``(2) State described.--For purposes of paragraph (1), a 
     State described in this paragraph is a State in which there 
     is an Indian tribe that does not have a tribal family 
     assistance plan approved under section 414 for a fiscal year.
       ``(c) Definitions.--For purposes of this part, the 
     following definitions shall apply:
       ``(1) Adult.--The term `adult' means an individual who is 
     not a minor child.
       ``(2) Minor child.--The term `minor child' means an 
     individual--
       ``(A) who--
       ``(i) has not attained 18 years of age; or
       ``(ii) has not attained 19 years of age and is a full-time 
     student in a secondary school (or in the equivalent level of 
     vocational or technical training); and
       ``(B) who resides with such individual's custodial parent 
     or other caretaker relative.
       ``(3) Fiscal year.--The term `fiscal year' means any 12-
     month period ending on September 30 of a calendar year.
       ``(4) Indian, indian tribe, and tribal organization.--The 
     terms `Indian', `Indian tribe', and `tribal organization' 
     have the meaning given such terms by section 4 of the Indian 
     Self-Determination and Education Assistance Act (25 U.S.C. 
     450b).
       ``(5) State.--Except as otherwise specifically provided, 
     the term `State' includes the several States, the District of 
     Columbia, the Commonwealth of Puerto Rico, the United States 
     Virgin Islands, Guam, and American Samoa.

     ``SEC. 403. PAYMENTS TO STATES AND INDIAN TRIBES.

       ``(a) Grant Amount.--
       ``(1) In general.--Subject to the provisions of paragraph 
     (3), section 407 (relating to penalties), and section 414(g), 
     for each of fiscal years 1996, 1997, 1998, 1999, and 2000, 
     the Secretary shall pay--
       ``(A) each eligible State a grant in an amount equal to the 
     State family assistance grant for the fiscal year; and
       ``(B) each Indian tribe with an approved tribal family 
     assistance plan a tribal family assistance grant in 
     accordance with section 414.
       ``(2) State family assistance grant.--
       ``(A) In general.--For purposes of paragraph (1)(A), a 
     State family assistance grant for any State for a fiscal year 
     is an amount equal to the total amount of the Federal 
     payments to the State under section 403 for fiscal year 1994 
     (as such section was in effect during such fiscal year and as 
     such payments were reported by the State on February 14, 
     1995), reduced by the amount (if any) determined under 
     subparagraph (B).

[[Page S11643]]

       ``(B) Amount attributable to certain indian families served 
     by indian tribes.--
       ``(i) In general.--For purposes of subparagraph (A), the 
     amount determined under this subparagraph is an amount equal 
     to the Federal payments to the State under section 403 for 
     fiscal year 1994 (as in effect during such fiscal year) 
     attributable to expenditures by the State under parts A and F 
     of this title (as so in effect) for Indian families described 
     in clause (ii).
       ``(ii) Indian families described.--For purposes of clause 
     (i), Indian families described in this clause are Indian 
     families who reside in a service area or areas of an Indian 
     tribe receiving a tribal family assistance grant under 
     section 414.
       ``(C) Notification.--Not later than 3 months prior to the 
     payment of each quarterly installment of a State grant under 
     subsection (a)(1), the Secretary shall notify the State of 
     the amount of the reduction determined under subparagraph (B) 
     with respect to the State.
       ``(3) Supplemental grant amount for population increases in 
     certain states.--
       ``(A) In general.--The amount of the grant payable under 
     paragraph (1) to a qualifying State for each of fiscal years 
     1997, 1998, 1999, and 2000 shall be increased by an amount 
     equal to 2.5 percent of the amount that the State received 
     under this section in the preceding fiscal year.
       ``(B) Increase to remain in effect even if state fails to 
     qualify in later years.--Subject to section 407, in no event 
     shall the amount of a grant payable under paragraph (1) to a 
     State for any fiscal year be less than the amount the State 
     received under this section for the preceding fiscal year.
       ``(C) Qualifying state.--
       ``(i) In general.--For purposes of this paragraph, the term 
     `qualifying State', with respect to any fiscal year, means a 
     State that--

       ``(I) had an average level of State welfare spending per 
     poor person in the preceding fiscal year that was less than 
     the national average level of State welfare spending per poor 
     person in the preceding fiscal year; and
       ``(II) had an estimated rate of State population growth as 
     determined by the Bureau of the Census for the most recent 
     fiscal year for which information is available that was 
     greater than the average rate of population growth for all 
     States as determined by the Bureau of the Census for such 
     fiscal year.

       ``(ii) Certain states deemed qualifying states.--For 
     purposes of this paragraph, a State shall be deemed to be a 
     qualifying State for fiscal years 1997, 1998, 1999, and 2000 
     if the level of State welfare spending per poor person in 
     fiscal year 1996 was less than 35 percent of the national 
     average level of State welfare spending per poor person in 
     fiscal year 1996.
       ``(iii) State must qualify in fiscal year 1997.--A State 
     shall not be eligible to be a qualifying State under clause 
     (i) for fiscal years after 1997 if the State was not a 
     qualifying State under clause (i) in fiscal year 1997.
       ``(D) Definitions.--For purposes of this paragraph:
       ``(i) Level of state welfare spending per poor person.--The 
     term `level of State welfare spending per poor person' means, 
     with respect to a State for any fiscal year--

       ``(I) the amount of the grant received by the State under 
     this section (prior to the application of section 407); 
     divided by
       ``(II) the number of the individuals in the State who had 
     an income below the poverty line according to the 1990 
     decennial census.

       ``(ii) National average level of state welfare spending per 
     poor person.--The term `national average level of State 
     welfare spending per poor person' means an amount equal to--

       ``(I) the amount paid in grants under this section (prior 
     to the application of section 407); divided by
       ``(II) the number of individuals in all States with an 
     income below the poverty line according to the 1990 decennial 
     census.

       ``(iii) Poverty line.--The term `poverty line' has the same 
     meaning given such term in section 673(2) of the Community 
     Services Block Grant Act (42 U.S.C. 9902(2)).
       ``(iv) State.--The term `State' means each of the 50 States 
     of the United States.
       ``(4) Appropriation.--
       ``(A) States.--There are authorized to be appropriated and 
     there are appropriated $16,795,323,000 for each fiscal year 
     described in paragraph (1) for the purpose of paying--
       ``(i) grants to States under paragraph (1)(A); and
       ``(ii) tribal family assistance grants under paragraph 
     (1)(B).
       ``(B) Adjustment for qualifying states.--For the purpose of 
     increasing the amount of the grant payable to a State under 
     paragraph (1) in accordance with paragraph (3), there are 
     authorized to be appropriated and there are appropriated--
       ``(i) for fiscal year 1997, $85,860,000;
       ``(ii) for fiscal year 1998, $173,276,000;
       ``(iii) for fiscal year 1999, $263,468,000; and
       ``(iv) for fiscal year 2000, $355,310,000.
       ``(b) Use of Grant.--
       ``(1) In general.--Subject to this part, a State to which a 
     grant is made under this section may use the grant--
       ``(A) in any manner that is reasonably calculated to 
     accomplish the purpose of this part; or
       ``(B) in any manner that such State used amounts received 
     under part A or F of this title, as such parts were in effect 
     before October 1, 1995.
       ``(2) Authority to treat interstate immigrants under rules 
     of former state.--A State to which a grant is made under this 
     section may apply to a family the rules of the program 
     operated under this part of another State if the family has 
     moved to the State from the other State and has resided in 
     the State for less than 12 months.
       ``(3) Authority to reserve certain amounts for 
     assistance.--A State may reserve amounts paid to the State 
     under this part for any fiscal year for the purpose of 
     providing, without fiscal year limitation, assistance under 
     the State program operated under this part.
       ``(4) Authority to operate employment placement program.--A 
     State to which a grant is made under this section may use a 
     portion of the grant to make payments (or provide job 
     placement vouchers) to State-approved public and private job 
     placement agencies that provide employment placement services 
     to individuals who receive assistance under the State program 
     funded under this part.
       ``(5) Transferability of grant amounts.--A State may use up 
     to 30 percent of amounts received from a grant under this 
     part for a fiscal year to carry out State activities under 
     the Child Care and Development Block Grant Act of 1990 (42 
     U.S.C. 9858 et seq.) (relating to child care block grants).
       ``(c) Timing of Payments.--The Secretary shall pay each 
     grant payable to a State under this section in quarterly 
     installments.
       ``(d) Federal Loan Fund for State Welfare Programs.--
       ``(1) Establishment.--There is hereby established in the 
     Treasury of the United States a revolving loan fund which 
     shall be known as the `Federal Loan Fund for State Welfare 
     Programs' (hereafter for purposes of this section referred to 
     as the `fund').
       ``(2) Deposits into fund.--
       ``(A) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, $1,700,000,000 
     are hereby appropriated for fiscal year 1996 for payment to 
     the fund.
       ``(B) Loan repayments.--The Secretary shall deposit into 
     the fund any principal or interest payment received with 
     respect to a loan made under this subsection.
       ``(3) Availability.--Amounts in the fund are authorized to 
     remain available without fiscal year limitation for the 
     purpose of making loans and receiving payments of principal 
     and interest on such loans, in accordance with this 
     subsection.
       ``(4) Use of fund.--
       ``(A) Loans to states.--The Secretary shall make loans from 
     the fund to any loan-eligible State, as defined in 
     subparagraph (D), for a period to maturity of not more than 3 
     years.
       ``(B) Rate of interest.--The Secretary shall charge and 
     collect interest on any loan made under subparagraph (A) at a 
     rate equal to the Federal short-term rate, as defined in 
     section 1274(d) of the Internal Revenue Code of 1986.
       ``(C) Maximum loan.--The cumulative amount of any loans 
     made to a State under subparagraph (A) during fiscal years 
     1996 through 2000 shall not exceed 10 percent of the State 
     family assistance grant under subsection (a)(2) for a fiscal 
     year.
       ``(D) Loan-eligible state.--For purposes of subparagraph 
     (A), a loan-eligible State is a State which has not had a 
     penalty described in section 407(a)(1) imposed against it at 
     any time prior to the loan being made.
       ``(5) Limitation on use of loan.--A State shall use a loan 
     received under this subsection only for any purpose for which 
     grant amounts received by the State under subsection (a) may 
     be used including--
       ``(A) welfare anti-fraud activities; and
       ``(B) the provision of assistance under the State program 
     to Indian families that have moved from the service area of 
     an Indian tribe with a tribal family assistance plan approved 
     under section 414.
       ``(e) Special Rule for Indian Tribes That Received JOBS 
     Funds.--
       ``(1) In general.--The Secretary shall pay to each eligible 
     Indian tribe for each of fiscal years 1996, 1997, 1998, 1999, 
     and 2000 a grant in an amount equal to the amount received by 
     such Indian tribe in fiscal year 1995 under section 482(i) 
     (as in effect during such fiscal year) for the purpose of 
     operating a program to make work activities available to 
     members of the Indian tribe.
       ``(2) Eligible indian tribe.--For purposes of paragraph 
     (1), the term `eligible Indian tribe' means an Indian tribe 
     or Alaska Native organization that conducted a job 
     opportunities and basic skills training program in fiscal 
     year 1995 under section 482(i) (as in effect during such 
     fiscal year).
       ``(3) Appropriation.--There are authorized to be 
     appropriated and there are hereby appropriated $7,638,474 for 
     each fiscal year described in paragraph (1) for the purpose 
     of paying grants in accordance with such paragraph.
       ``(f) Secretary.--For purposes of this section, the term 
     `Secretary' means the Secretary of the Treasury.

     ``SEC. 404. MANDATORY WORK REQUIREMENTS.

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


[[Page S11644]]

                                                            The minimum
                                                          participation
                                                           rate for all
      ``If the fiscal year is:                             families is:
        1996.......................................................25  
        1997.......................................................30  
        1998.......................................................35  
        1999.......................................................40  
        2000 or thereafter......................................50; and

       ``(2) with respect to 2-parent families receiving such 
     assistance:

                                                            The minimum
                                                          participation
      ``If the fiscal year is:                                 rate is:
        1996.......................................................60  
        1997 or 1998...............................................75  
        1999 or thereafter........................................90.  

       ``(b) Calculation of Participation Rates.--
       ``(1) For all families.--
       ``(A) Average monthly rate.--For purposes of subsection 
     (a)(1), the participation rate for all families of a State 
     for a fiscal year is the average of the participation rates 
     for all families of the State for each month in the fiscal 
     year.
       ``(B) Monthly participation rates.--The participation rate 
     of a State for all families of the State for a month, 
     expressed as a percentage, is--
       ``(i) the sum of--

       ``(I) the number of all families receiving assistance under 
     the State program funded under this part that include an 
     adult who is engaged in work for the month;
       ``(II) the number of all families receiving assistance 
     under the State program funded under this part that are 
     subject in such month to a penalty described in paragraph 
     (1)(A) or (2)(A) of subsection (d) but have not been subject 
     to such penalty for more than 3 months within the preceding 
     12-month period (whether or not consecutive);
       ``(III) the number of all families receiving assistance 
     under the State program funded under this part that have 
     become ineligible for assistance under the State program 
     within the previous 6-month period because of employment and 
     that include an adult who is employed for the month; and
       ``(IV) beginning in the first month beginning after the 
     promulgation of the regulations described in paragraph (3) 
     and in accordance with such regulations, the average monthly 
     number of all families that are not receiving assistance 
     under the State program funded under this part as a result of 
     the State's diversion of such families from the State program 
     prior to such families receipt of assistance under the 
     program; divided by

       ``(ii) the total number of all families receiving 
     assistance under the State program funded under this part 
     during the month that include an adult.
       ``(2) 2-parent families.--
       ``(A) Average monthly rate.--For purposes of subsection 
     (a)(2), the participation rate for 2-parent families of a 
     State for a fiscal year is the average of the participation 
     rates for 2-parent families of the State for each month in 
     the fiscal year.
       ``(B) Monthly participation rates.--The participation rate 
     of a State for 2-parent families of the State for a month, 
     expressed as a percentage, is--
       ``(i) the total number of 2-parent families described in 
     paragraph (1)(B)(i); divided by
       ``(ii) the total number of 2-parent families receiving 
     assistance under the State program funded under this part 
     during the month that include an adult.
       ``(3) Regulations relating to calculation of families 
     diverted from assistance.--
       ``(A) In general.--Not later than 1 year after the date of 
     the enactment of the Work Opportunity Act of 1995, the 
     Secretary shall consult with the States and establish, by 
     regulation, a method to measure the number of families 
     diverted by a State from the State program funded under this 
     part prior to such families receipt of assistance under the 
     program.
       ``(B) Eligibility changes not counted.--The regulations 
     described in subparagraph (A) shall not take into account 
     families that are diverted from a State program funded under 
     this part as a result of differences in eligibility criteria 
     under a State program funded under this part and eligibility 
     criteria under such State's plan under the aid to families 
     with dependent children program, as such plan was in effect 
     on the day before the date of the enactment of the Work 
     Opportunity Act of 1995.
       ``(4) State option to include individuals receiving 
     assistance under a tribal family assistance plan.--For 
     purposes of paragraphs (1)(B) and (2)(B), a State may, at its 
     option, include families receiving assistance under a tribal 
     family assistance plan approved under section 414. For 
     purposes of the previous sentence, an individual who receives 
     assistance under a tribal family assistance plan approved 
     under section 414 shall be treated as being engaged in work 
     if the individual is participating in work under standards 
     that are comparable to State standards for being engaged in 
     work.
       ``(c) Engaged in Work.--
       ``(1) All families.--For purposes of subsection 
     (b)(1)(B)(i)(I), an adult is engaged in work for a month in a 
     fiscal year if the adult is participating in work for at 
     least the minimum average number of hours per week specified 
     in the following table during the month, not fewer than 20 
     hours per week of which are attributable to a work activity:

                                                            The minimum
         ``If the month is                            average number of
           in fiscal year:                           hours per week is:
           1996....................................................20  
           1997....................................................20  
           1998....................................................20  
           1999................................................25  

           2000....................................................30  
           2001....................................................30  
           2002....................................................35  
           2003 or thereafter.....................................35.  

       ``(2) 2-parent families.--For purposes of subsection 
     (b)(2)(A), an adult is engaged in work for a month in a 
     fiscal year if the adult is participating in work for at 
     least 35 hours per week during the month, not fewer than 30 
     hours per week of which are attributable to work activities 
     described in paragraph (3).
       ``(3) Definition of work activities.--For purposes of this 
     subsection, the term `work activities' means--
       ``(A) unsubsidized employment;
       ``(B) subsidized employment;
       ``(C) on-the-job training;
       ``(D) community service programs; and
       ``(E) job search (only for the first 4 weeks in which an 
     individual is required to participate in work activities 
     under this section).
       ``(d) Penalties Against Individuals.--If an adult in a 
     family receiving assistance under the State program funded 
     under this part refuses to engage in work required under 
     subsection (c)(1) or (c)(2), a State to which a grant is made 
     under section 403 shall--
       ``(1) reduce the amount of assistance that would otherwise 
     be payable to the family; or
       ``(2) terminate such assistance,

     subject to such good cause and other exceptions as the State 
     may establish.
       ``(e) Nondisplacement in Work Activities.--
       ``(1) In general.--Subject to paragraph (2), an adult in a 
     family receiving assistance under this part may fill a vacant 
     employment position in order to engage in a work activity 
     described in subsection (c)(3).
       ``(2) No filling of certain vacancies.--No adult described 
     in paragraph (1) shall be employed, or job opening filled, by 
     such an adult--
       ``(A) when any other individual is on layoff from the same 
     or any substantially equivalent job; or
       ``(B) when the employer has terminated the employment of 
     any regular employee or otherwise reduced its workforce with 
     the intention of filling the vacancy so created by hiring an 
     adult described in paragraph (1).
       ``(f) Sense of the Congress.--It is the sense of the 
     Congress that in complying with this section, each State that 
     operates a program funded under this part is encouraged to 
     assign the highest priority to requiring adults in 2-parent 
     families and adults in single-parent families that include 
     older preschool or school-age children to be engaged in work 
     activities.
       ``(g) Delivery Through Statewide System.--
       ``(1) In general.--Each work program carried out by the 
     State to provide work activities in order to comply with this 
     section shall be delivered through the statewide workforce 
     development system established in section 711 of the Work 
     Opportunity Act of 1995 unless a required work activity is 
     not available locally through the statewide workforce 
     development system.
       ``(2) Effective date.--The provisions of paragraph (1) 
     shall take effect--
       ``(A) in a State described in section 815(b)(1) of the Work 
     Opportunity Act of 1995; and
       ``(B) in any other State, on July 1, 1998.

     ``SEC. 405. REQUIREMENTS AND LIMITATIONS.

       ``(a) State Required to Enter Into a Personal 
     Responsibility Contract With Each Family Receiving 
     Assistance.--Each State to which a grant is made under 
     section 403 shall require each family receiving assistance 
     under the State program funded under this part to have 
     entered into a personal responsibility contract (as developed 
     by the State) with the State.
       ``(b) No Assistance for More Than 5 Years.--
       ``(1) In general.--Except as provided under paragraphs (2) 
     and (3), a State to which a grant is made under section 403 
     may not use any part of the grant to provide assistance to a 
     family that includes an adult who has received assistance 
     under the program operated under this part for the lesser 
     of--
       ``(A) the period of time established at the option of the 
     State; or
       ``(B) 60 months (whether or not consecutive) after 
     September 30, 1995.
       ``(2) Minor child exception.--If an individual received 
     assistance under the State program operated under this part 
     as a minor child in a needy family, any period during which 
     such individual's family received assistance shall not be 
     counted for purposes of applying the limitation described in 
     paragraph (1) to an application for assistance under such 
     program by such individual as the head of a household of a 
     needy family with minor children.
       ``(3) Hardship exception.--
       ``(A) In general.--The State may exempt a family from the 
     application of paragraph (1) by reason of hardship.
       ``(B) Limitation.--The number of families with respect to 
     which an exemption made by a State under subparagraph (A) is 
     in effect for a fiscal year shall not exceed 15 percent of 
     the average monthly number of families to which the State is 
     providing assistance under the program operated under this 
     part.
       ``(c) Denial of Assistance for 10 Years to a Person Found 
     To Have Fraudulently 

[[Page S11645]]
     Misrepresented Residence in Order To Obtain Assistance in 2 or More 
     States.--An individual shall not be considered an eligible 
     individual for the purposes of this part during the 10-year 
     period that begins on the date the individual is convicted in 
     Federal or State court of having made a fraudulent statement 
     or representation with respect to the place of residence of 
     the individual in order to receive assistance simultaneously 
     from 2 or more States under programs that are funded under 
     this title, title XIX, or the Food Stamp Act of 1977, or 
     benefits in 2 or more States under the supplemental security 
     income program under title XVI.
       ``(d) Denial of Assistance for Fugitive Felons and 
     Probation and Parole Violators.--
       ``(1) In general.--An individual shall not be considered an 
     eligible individual for the purposes of this part if such 
     individual is--
       ``(A) fleeing to avoid prosecution, or custody or 
     confinement after conviction, under the laws of the place 
     from which the individual flees, for a crime, or an attempt 
     to commit a crime, which is a felony under the laws of the 
     place from which the individual flees, or which, in the case 
     of the State of New Jersey, is a high misdemeanor under the 
     laws of such State; or
       ``(B) violating a condition of probation or parole imposed 
     under Federal or State law.
       ``(2) Exchange of information with law enforcement 
     agencies.--Notwithstanding any other provision of law, a 
     State shall furnish any Federal, State, or local law 
     enforcement officer, upon the request of the officer, with 
     the current address of any recipient of assistance under this 
     part, if the officer furnishes the agency with the name of 
     the recipient and notifies the agency that--
       ``(A) such recipient--
       ``(i) is described in subparagraph (A) or (B) of paragraph 
     (1); or
       ``(ii) has information that is necessary for the officer to 
     conduct the officer's official duties; and
       ``(B) the location or apprehension of the recipient is 
     within such officer's official duties.

     ``SEC. 406. PROMOTING RESPONSIBLE PARENTING.

       ``(a) Findings.--The Congress makes the following findings:
       ``(1) Marriage is the foundation of a successful society.
       ``(2) Marriage is an essential institution of a successful 
     society which promotes the interests of children.
       ``(3) Promotion of responsible fatherhood and motherhood is 
     integral to successful child rearing and the wellbeing of 
     children.
       ``(4) In 1992, only 54 percent of single-parent families 
     with children had a child support order established and, of 
     that 54 percent, only about one half received the full amount 
     due. Of the cases enforced through the public child support 
     enforcement system, only 18 percent of the caseload has a 
     collection.
       ``(5) The number of individuals receiving aid to families 
     with dependent children (hereafter in this subsection 
     referred to as `AFDC') has more than tripled since 1965. More 
     than two-thirds of these recipients are children. Eighty-nine 
     percent of children receiving AFDC benefits now live in homes 
     in which no father is present.
       ``(A)(i) The average monthly number of children receiving 
     AFDC benefits--
       ``(I) was 3,300,000 in 1965;
       ``(II) was 6,200,000 in 1970;
       ``(III) was 7,400,000 in 1980; and
       ``(IV) was 9,300,000 in 1992.
       ``(ii) While the number of children receiving AFDC benefits 
     increased nearly threefold between 1965 and 1992, the total 
     number of children in the United States aged 0 to 18 has 
     declined by 5.5 percent.
       ``(B) The Department of Health and Human Services has 
     estimated that 12,000,000 children will receive AFDC benefits 
     within 10 years.
       ``(C) The increase in the number of children receiving 
     public assistance is closely related to the increase in 
     births to unmarried women. Between 1970 and 1991, the 
     percentage of live births to unmarried women increased nearly 
     threefold, from 10.7 percent to 29.5 percent.
       ``(6) The increase of out-of-wedlock pregnancies and births 
     is well documented as follows:
       ``(A) It is estimated that the rate of nonmarital teen 
     pregnancy rose 23 percent from 54 pregnancies per 1,000 
     unmarried teenagers in 1976 to 66.7 pregnancies in 1991. The 
     overall rate of nonmarital pregnancy rose 14 percent from 
     90.8 pregnancies per 1,000 unmarried women in 1980 to 103 in 
     both 1991 and 1992. In contrast, the overall pregnancy rate 
     for married couples decreased 7.3 percent between 1980 and 
     1991, from 126.9 pregnancies per 1,000 married women in 1980 
     to 117.6 pregnancies in 1991.
       ``(B) The total of all out-of-wedlock births between 1970 
     and 1991 has risen from 10.7 percent to 29.5 percent and if 
     the current trend continues, 50 percent of all births by the 
     year 2015 will be out-of-wedlock.
       ``(7) The negative consequences of an out-of-wedlock birth 
     on the mother, the child, the family, and society are well 
     documented as follows:
       ``(A) Young women 17 and under who give birth outside of 
     marriage are more likely to go on public assistance and to 
     spend more years on welfare once enrolled. These combined 
     effects of `younger and longer' increase total AFDC costs per 
     household by 25 percent to 30 percent for 17-year olds.
       ``(B) Children born out-of-wedlock have a substantially 
     higher risk of being born at a very low or moderately low 
     birth weight.
       ``(C) Children born out-of-wedlock are more likely to 
     experience low verbal cognitive attainment, as well as more 
     child abuse, and neglect.
       ``(D) Children born out-of-wedlock were more likely to have 
     lower cognitive scores, lower educational aspirations, and a 
     greater likelihood of becoming teenage parents themselves.
       ``(E) Being born out-of-wedlock significantly reduces the 
     chances of the child growing up to have an intact marriage.
       ``(F) Children born out-of-wedlock are 3 more times likely 
     to be on welfare when they grow up.
       ``(8) Currently 35 percent of children in single-parent 
     homes were born out-of-wedlock, nearly the same percentage as 
     that of children in single-parent homes whose parents are 
     divorced (37 percent). While many parents find themselves, 
     through divorce or tragic circumstances beyond their control, 
     facing the difficult task of raising children alone, 
     nevertheless, the negative consequences of raising children 
     in single-parent homes are well documented as follows:
       ``(A) Only 9 percent of married-couple families with 
     children under 18 years of age have income below the national 
     poverty level. In contrast, 46 percent of female-headed 
     households with children under 18 years of age are below the 
     national poverty level.
       ``(B) Among single-parent families, nearly \1/2\ of the 
     mothers who never married received AFDC while only \1/5\ of 
     divorced mothers received AFDC.
       ``(C) Children born into families receiving welfare 
     assistance are 3 times more likely to be on welfare when they 
     reach adulthood than children not born into families 
     receiving welfare.
       ``(D) Mothers under 20 years of age are at the greatest 
     risk of bearing low birth-weight babies.
       ``(E) The younger the single parent mother, the less likely 
     she is to finish high school.
       ``(F) Young women who have children before finishing high 
     school are more likely to receive welfare assistance for a 
     longer period of time.
       ``(G) Between 1985 and 1990, the public cost of births to 
     teenage mothers under the aid to families with dependent 
     children program, the food stamp program, and the medicaid 
     program has been estimated at $120,000,000,000.
       ``(H) The absence of a father in the life of a child has a 
     negative effect on school performance and peer adjustment.
       ``(I) Children of teenage single parents have lower 
     cognitive scores, lower educational aspirations, and a 
     greater likelihood of becoming teenage parents themselves.
       ``(J) Children of single-parent homes are 3 times more 
     likely to fail and repeat a year in grade school than are 
     children from intact two-parent families.
       ``(K) Children from single-parent homes are almost 4 times 
     more likely to be expelled or suspended from school.
       ``(L) Neighborhoods with larger percentages of youth aged 
     12 through 20 and areas with higher percentages of single-
     parent households have higher rates of violent crime.
       ``(M) Of those youth held for criminal offenses within the 
     State juvenile justice system, only 29.8 percent lived 
     primarily in a home with both parents. In contrast to these 
     incarcerated youth, 73.9 percent of the 62,800,000 children 
     in the Nation's resident population were living with both 
     parents.
       ``(9) Therefore, in light of this demonstration of the 
     crisis in our Nation, it is the sense of the Congress that 
     prevention of out-of-wedlock pregnancy and reduction in out-
     of-wedlock birth are very important Government interests and 
     the policy contained in provisions of this title is intended 
     to address the crisis.
       ``(b) State Option To Deny Assistance For Out-of-Wedlock 
     Births to Minors.--At the option of the State, a State to 
     which a grant is made under section 403 may provide that the 
     grant shall not be used to provide assistance for a child 
     born out-of-wedlock to an individual who has not attained 18 
     years of age, or for the individual, until the individual 
     attains such age.
       ``(c) State Option To Deny Assistance for Children Born to 
     Families Receiving Assistance.--At the option of the State, a 
     State to which a grant is made under section 403 may provide 
     that the grant shall not be used to provide assistance for a 
     minor child who is born to--
       ``(1) a recipient of assistance under the program funded 
     under this part; or
       ``(2) an individual who received such benefits at any time 
     during the 10-month period ending with the birth of the 
     child.
       ``(d) Requirement That Teenage Parents Live In an Adult-
     Supervised Setting and Attend School.--
       ``(1) In general.--A State to which a grant is made under 
     section 403 shall not use any part of the grant to provide 
     assistance to an individual described in paragraph (2) if--
       ``(A) the individual and the minor child of the individual 
     do not reside in--
       ``(i) a place of residence maintained by a parent, legal 
     guardian, or other adult relative of such individual as such 
     parent's, guardian's, or adult relative's own home; or
       ``(ii) another adult-supervised setting; and
       ``(B) the individual does not participate in--

[[Page S11646]]

       ``(i) educational activities directed toward the attainment 
     of a high school diploma or its equivalent; or
       ``(ii) an alternative educational or training program that 
     has been approved by the State.
       ``(2) Individual described.--An individual described in 
     this paragraph is an individual who--
       ``(A) is under the age of 18 and is not married; and
       ``(B) has a minor child in his or her care.

     ``SEC. 407. STATE PENALTIES.

       ``(a) In General.--Subject to the provisions of subsection 
     (b), the Secretary shall deduct from the grant otherwise 
     payable under section 403 the following penalties:
       ``(1) For use of grant in violation of this part.--If an 
     audit conducted under section 408 finds that an amount paid 
     to a State under section 403 for a fiscal year has been used 
     in violation of this part, then the Secretary shall reduce 
     the amount of the grant otherwise payable to the State under 
     such section for the immediately succeeding fiscal year 
     quarter by the amount so used, plus 5 percent of such grant 
     (determined without regard to this section).
       ``(2) For failure to submit required report.--
       ``(A) In general.--If the Secretary determines that a State 
     has not, within 6 months after the end of a fiscal year, 
     submitted the report required by section 409 for the fiscal 
     year, the Secretary shall reduce by 5 percent the amount of 
     the grant that would (in the absence of this section) be 
     payable to the State under section 403 for the immediately 
     succeeding fiscal year.
       ``(B) Rescission of penalty.--The Secretary shall rescind a 
     penalty imposed on a State under subparagraph (A) with 
     respect to a report for a fiscal year if the State submits 
     the report before the end of the immediately succeeding 
     fiscal year.
       ``(3) For failure to satisfy minimum participation rates.--
       ``(A) In general.--If the Secretary determines that a State 
     has failed to satisfy the minimum participation rates 
     specified in section 404(a) for a fiscal year, the Secretary 
     shall reduce by not more than 5 percent the amount of the 
     grant that would (in the absence of this section) be payable 
     to the State under section 403 for the immediately succeeding 
     fiscal year.
       ``(B) Penalty based on severity of failure.--The Secretary 
     shall impose reductions under subparagraph (A) on the basis 
     of the degree of noncompliance.
       ``(4) For failure to participate in the income and 
     eligibility verification system.--If the Secretary determines 
     that a State program funded under this part is not 
     participating during a fiscal year in the income and 
     eligibility verification system required by section 1137, the 
     Secretary shall reduce by not more than 5 percent the amount 
     of the grant that would (in the absence of this section) be 
     payable to the State under section 403 for the immediately 
     succeeding fiscal year.
       ``(5) For failure to comply with paternity establishment 
     and child support enforcement requirements under part d.--
     Notwithstanding any other provision of this Act, if the 
     Secretary determines that the State agency that administers a 
     program funded under this part does not enforce the penalties 
     requested by the agency administering part D against 
     recipients of assistance under the State program who fail to 
     cooperate in establishing paternity in accordance with such 
     part, the Secretary shall reduce by not more than 5 percent 
     the amount of the grant that would (in the absence of this 
     section) be payable to the State under section 403 for the 
     immediately succeeding fiscal year.
       ``(6) For failure to timely repay a federal loan fund for 
     state welfare programs.--If the Secretary determines that a 
     State has failed to repay any amount borrowed from the 
     Federal Loan Fund for State Welfare Programs established 
     under section 403(d) within the period of maturity applicable 
     to such loan, plus any interest owed on such loan, then the 
     Secretary shall reduce the amount of the grant otherwise 
     payable to the State under section 403 for the immediately 
     succeeding fiscal year quarter by the outstanding loan 
     amount, plus the interest owed on such outstanding amount.
       ``(b) Requirements.--
       ``(1) Limitation on amount of penalty.--
       ``(A) In general.--In imposing the penalties described in 
     subsection (a), the Secretary shall not reduce any quarterly 
     payment to a State by more than 25 percent.
       ``(B) Carryforward of unrecovered penalties.--To the extent 
     that subparagraph (A) prevents the Secretary from recovering 
     during a fiscal year the full amount of all penalties imposed 
     on a State under subsection (a) for a prior fiscal year, the 
     Secretary shall apply any remaining amount of such penalties 
     to the grant otherwise payable to the State under section 403 
     for the immediately succeeding fiscal year.
       ``(2) State funds to replace reductions in grant.--A State 
     which has a penalty imposed against it under subsection (a) 
     shall expend additional State funds in an amount equal to the 
     amount of the penalty for the purpose of providing assistance 
     under the State program under this part.
       ``(3) Reasonable cause for noncompliance.--The Secretary 
     may not impose a penalty on a State under subsection (a) if 
     the Secretary determines that the State has reasonable cause 
     for failing to comply with a requirement for which a penalty 
     is imposed under such subsection.
       ``(c) Certification of Amount of Penalties.--If the 
     Secretary is required to reduce the amount of any grant under 
     this section, the Secretary shall certify the amount of such 
     reduction to the Secretary of the Treasury and the Secretary 
     of the Treasury shall reduce the amount paid to the State 
     under section 403 by such amount.
       ``(d) Effective Dates.--
       ``(1) In general.--The penalties described in paragraphs 
     (2) through (6) of subsection (a) shall apply with respect to 
     fiscal years beginning on or after October 1, 1996.
       ``(2) Misuse of funds.--The penalties described in 
     subsection (a)(1) shall apply with respect to fiscal years 
     beginning on or after October 1, 1995.

     ``SEC. 408. AUDITS.

       ``(a) In General.--Each State shall, not less than 
     annually, audit the State expenditures from amounts received 
     under this part. Such audit shall--
       ``(1) determine the extent to which such expenditures were 
     or were not expended in accordance with this part; and
       ``(2) be conducted by an approved entity (as defined in 
     subsection (b)) in accordance with generally accepted 
     auditing principles.
       ``(b) Approved Entity.--For purposes of subsection (a), the 
     term `approved entity' means an entity that--
       ``(1) is approved by the Secretary of the Treasury;
       ``(2) is approved by the chief executive officer of the 
     State; and
       ``(3) is independent of any agency administering activities 
     funded under this part.
       ``(c) Audit Report.--Not later than 30 days following the 
     completion of an audit under this subsection, a State shall 
     submit a copy of the audit to the State legislature, the 
     Secretary of the Treasury, and the Secretary of Health and 
     Human Services.
       ``(d) Additional Accounting Requirements.--The provisions 
     of chapter 75 of title 31, United States Code, shall apply to 
     the audit requirements of this section.

     ``SEC. 409. DATA COLLECTION AND REPORTING.

       ``(a) In General.--Each State to which a grant is made 
     under section 403 for a fiscal year shall, not later than 6 
     months after the end of fiscal year 1997, and each fiscal 
     year thereafter, transmit to the Secretary the following 
     aggregate information on families to which assistance was 
     provided during the fiscal year under the State program 
     operated under this part:
       ``(1) The number of adults receiving such assistance.
       ``(2) The number of children receiving such assistance and 
     the average age of the children.
       ``(3) The employment status of such adults, and the average 
     earnings of employed adults receiving such assistance.
       ``(4) The age, race, and educational attainment at the time 
     of application for assistance of the adults receiving such 
     assistance.
       ``(5) The average amount of cash and other assistance 
     provided to the families under the program.
       ``(6) The number of months, since the most recent 
     application for assistance under the program, for which such 
     assistance has been provided to the families.
       ``(7) The total number of months for which assistance has 
     been provided to the families under the program.
       ``(8) Any other data necessary to indicate whether the 
     State is in compliance with the plan most recently submitted 
     by the State pursuant to section 402.
       ``(9) The components of any program carried out by the 
     State to provide work activities in order to comply with 
     section 404, and the average monthly number of adults in each 
     such component.
       ``(10) The number of part-time job placements and the 
     number of full-time job placements made through the program 
     referred to in paragraph (9), the number of cases with 
     reduced assistance, and the number of cases closed due to 
     employment.
       ``(11) The number of cases closed due to section 405(b).
       ``(12) The increase or decrease in the number of children 
     born out of wedlock to recipients of assistance under the 
     State program funded under this part and the State's success 
     in meeting its goals established under section 402(a)(1)(F).
       ``(b) Authority of States To Use Estimates.--A State may 
     comply with the requirement to provide precise numerical 
     information described in subsection (a) by submitting an 
     estimate which is obtained through the use of scientifically 
     acceptable sampling methods.
       ``(c) Report on Use of Federal Funds To Cover 
     Administrative Costs and Overhead.--The report required by 
     subsection (a) for a fiscal year shall include a statement 
     of--
       ``(1) the total amount and percentage of the Federal funds 
     paid to the State under this part for the fiscal year that 
     are used to cover administrative costs or overhead; and
       ``(2) the total amount of State funds that are used to 
     cover such costs or overhead.
       ``(d) Report on State Expenditures on Programs for Needy 
     Families.--The report required by subsection (a) for a fiscal 
     year shall include a statement of the total amount expended 
     by the State during the fiscal year on the program under this 
     part and the purposes for which such amount was spent.

[[Page S11647]]

       ``(e) Report on Noncustodial Parents Participating in Work 
     Activities.--The report required by subsection (a) for a 
     fiscal year shall include the number of noncustodial parents 
     in the State who participated in work activities during the 
     fiscal year.
       ``(f) Report on Child Support Collected.--The report 
     required by subsection (a) for a fiscal year shall include 
     the total amount of child support collected by the State 
     agency administering the State program under part D on behalf 
     of a family receiving assistance under this part.
       ``(g) Report on Child Care.--The report required by 
     subsection (a) for a fiscal year shall include the total 
     amount expended by the State for child care under the program 
     under this part, along with a description of the types of 
     child care provided, including child care provided in the 
     case of a family that--
       ``(1) has ceased to receive assistance under this part 
     because of employment; or
       ``(2) is not receiving assistance under this part but would 
     be at risk of becoming eligible for such assistance if child 
     care was not provided.
       ``(h) Report on Transitional Services.--The report required 
     by subsection (a) for a fiscal year shall include the total 
     amount expended by the State for providing transitional 
     services to a family that has ceased to receive assistance 
     under this part because of employment, along with a 
     description of such services.
       ``(i) Secretary's Report on Data Processing.--
       ``(1) In general.--Not later than 6 months after the date 
     of the enactment of the Work Opportunity Act of 1995, the 
     Secretary shall prepare and submit to the Congress a report 
     on--
       ``(A) the status of the automated data processing systems 
     operated by the States to assist management in the 
     administration of State programs under this part (whether in 
     effect before or after October 1, 1995); and
       ``(B) what would be required to establish a system capable 
     of--
       ``(i) tracking participants in public programs over time; 
     and
       ``(ii) checking case records of the States to determine 
     whether individuals are participating in public programs in 2 
     or more States.
       ``(2) Preferred contents.--The report required by paragraph 
     (1) should include--
       ``(A) a plan for building on the automated data processing 
     systems of the States to establish a system with the 
     capabilities described in paragraph (1)(B); and
       ``(B) an estimate of the amount of time required to 
     establish such a system and of the cost of establishing such 
     a system.

     ``SEC. 410. RESEARCH, EVALUATIONS, AND NATIONAL STUDIES.

       ``(a) Research.--The Secretary may conduct research on the 
     effects and costs of State programs funded under this part.
       ``(b) Development and Evaluation of Innovative Approaches 
     To Employing Welfare Recipients.--The Secretary may assist 
     States in developing, and shall evaluate, innovative 
     approaches to employing recipients of assistance under 
     programs funded under this part. In performing such 
     evaluations, the Secretary shall, to the maximum extent 
     feasible, use random assignment to experimental and control 
     groups.
       ``(c) Studies of Welfare Caseloads.--The Secretary may 
     conduct studies of the caseloads of States operating programs 
     funded under this part.
       ``(d) Dissemination of Information.--The Secretary shall 
     develop innovative methods of disseminating information on 
     any research, evaluations, and studies conducted under this 
     section, including the facilitation of the sharing of 
     information and best practices among States and localities 
     through the use of computers and other technologies.
       ``(e) Annual Ranking of States and Review of Most and Least 
     Successful Work Programs.--
       ``(1) Annual ranking of states.--The Secretary shall rank 
     annually the States to which grants are paid under section 
     403 in the order of their success in moving recipients of 
     assistance under the State program funded under this part 
     into long-term private sector jobs.
       ``(2) Annual review of most and least successful work 
     programs.--The Secretary shall review the programs of the 3 
     States most recently ranked highest under paragraph (1) and 
     the 3 States most recently ranked lowest under paragraph (1) 
     that provide parents with work experience, assistance in 
     finding employment, and other work preparation activities and 
     support services to enable the families of such parents to 
     leave the program and become self-sufficient.
       ``(f) Study on Alternative Outcomes Measures.--
       ``(1) Study.--The Secretary shall, in cooperation with the 
     States, study and analyze outcomes measures for evaluating 
     the success of a State in moving individuals out of the 
     welfare system through employment as an alternative to the 
     minimum participation rates described in section 404. The 
     study shall include a determination as to whether such 
     alternative outcomes measures should be applied on a national 
     or a State-by-State basis.
       ``(2) Report.--Not later than September 30, 1998, the 
     Secretary shall submit to the Committee on Finance of the 
     Senate and the Committee on Ways and Means of the House of 
     Representatives a report containing the findings of the study 
     described in paragraph (1).

     ``SEC. 411. STUDY BY THE CENSUS BUREAU.

       ``(a) In General.--The Bureau of the Census shall expand 
     the Survey of Income and Program Participation as necessary 
     to obtain such information as will enable interested persons 
     to evaluate the impact of the amendments made by title I of 
     the Work Opportunity Act of 1995 on a random national sample 
     of recipients of assistance under State programs funded under 
     this part and (as appropriate) other low-income families, and 
     in doing so, shall pay particular attention to the issues of 
     out-of-wedlock births, welfare dependency, the beginning and 
     end of welfare spells, and the causes of repeat welfare 
     spells.
       ``(b) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, the Secretary 
     of the Treasury shall pay to the Bureau of the Census 
     $10,000,000 for each of fiscal years 1996, 1997, 1998, 1999, 
     and 2000 to carry out subsection (a).

     ``SEC. 412. WAIVERS.

       ``(a) Continuation of Waivers.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     any waiver granted to a State under section 1115 or otherwise 
     which relates to the provision of assistance under a State 
     plan under this part is in effect or approved by the 
     Secretary as of October 1, 1995, the amendments made by the 
     Work Opportunity Act of 1995 shall not apply with respect to 
     the State before the expiration (determined without regard to 
     any extensions) of the waiver to the extent such amendments 
     are inconsistent with the terms of the waiver.
       ``(2) Financing limitation.--Notwithstanding any other 
     provision of law, beginning with fiscal year 1996, a State 
     operating under a waiver described in paragraph (1) shall 
     receive the payment described for such State for such fiscal 
     year under section 403, in lieu of any other payment provided 
     for in the waiver.
       ``(b) State Option To Terminate Waiver.--
       ``(1) In general.--A State may terminate a waiver described 
     in subsection (a) before the expiration of the waiver.
       ``(2) Report.--A State which terminates a waiver under 
     paragraph (1) shall submit a report to the Secretary 
     summarizing the waiver and any available information 
     concerning the result or effect of such waiver.
       ``(3) Hold harmless provision.--
       ``(A) In general.--A State that, not later than the date 
     described in subparagraph (B), submits a written request to 
     terminate a waiver described in subsection (a) shall be held 
     harmless for accrued cost neutrality liabilities incurred 
     under the terms and conditions of such waiver.
       ``(B) Date described.--The date described in this 
     subparagraph is the later of--
       ``(i) January 1, 1996; or
       ``(ii) 90 days following the adjournment of the first 
     regular session of the State legislature that begins after 
     the date of the enactment of the Work Opportunity Act of 
     1995.
       ``(c) Secretarial Encouragement of Current Waivers.--The 
     Secretary shall encourage any State operating a waiver 
     described in subsection (a) to continue such waiver and to 
     evaluate, using random sampling and other characteristics of 
     accepted scientific evaluations, the result or effect of such 
     waiver.

     ``SEC. 413. STATE DEMONSTRATION PROGRAMS.

       ``Nothing in this part shall be construed as limiting a 
     State's ability to conduct demonstration projects for the 
     purpose of identifying innovative or effective program 
     designs in 1 or more political subdivisions of the State.

     ``SEC. 414. DIRECT FUNDING AND ADMINISTRATION BY INDIAN 
                   TRIBES.

       ``(a) Purpose.--The purpose of this section is--
       ``(1) to strengthen and enhance the control and flexibility 
     of local governments over local programs; and
       ``(2) in recognition of the principles contained in the 
     Indian Self-Determination and Education Assistance Act (25 
     U.S.C. 450 et seq.)--
       ``(A) to provide direct Federal funding to Indian tribes 
     for the tribal administration of the program funded under 
     this part; or
       ``(B) to enable Indian tribes to enter into agreements, 
     contracts, or compacts with intertribal consortia, States, or 
     other entities for the administration of such program on 
     behalf of the Indian tribe.
       ``(b) Grant Amounts for Indian Tribes.--
       ``(1) In general.--For each of fiscal years 1996, 1997, 
     1998, 1999, and 2000, the Secretary shall pay to each Indian 
     tribe that has an approved tribal family assistance plan a 
     tribal family assistance grant for the fiscal year in an 
     amount equal to the amount determined under paragraph (2).
       ``(2) Amount determined.--
       ``(A) In general.--The amount determined under this 
     paragraph is an amount equal to the total amount of the 
     Federal payments to a State or States under section 403 for 
     fiscal year 1994 (as in effect during such fiscal year) 
     attributable to expenditures by the State or States under 
     part A and part F of this title (as so in effect) in such 
     year for Indian families residing in the service area or 
     areas identified by the Indian tribe in subsection (c)(1)(C).
       ``(B) Use of State submitted data.--
       ``(i) In general.--The Secretary shall use State submitted 
     data to make each determination under subparagraph (A). 

[[Page S11648]]

       ``(ii) Disagreement with determination.--If an Indian tribe 
     or tribal organization disagrees with State submitted data 
     described under clause (i), the Indian tribe or tribal 
     organization may submit to the Secretary such additional 
     information as may be relevant to making the determination 
     under subparagraph (A) and the Secretary may consider such 
     information before making such determination.
       ``(c) 3-Year Tribal Family Assistance Plan.--
       ``(1) In general.--Any Indian tribe that desires to receive 
     a tribal family assistance grant shall submit to the 
     Secretary a 3-year tribal family assistance plan that--
       ``(A) outlines the Indian tribe's approach to providing 
     welfare-related services for the 3-year period, consistent 
     with the purposes of this section;
       ``(B) specifies whether the welfare-related services 
     provided under the plan will be provided by the Indian tribe 
     or through agreements, contracts, or compacts with 
     intertribal consortia, States, or other entities;
       ``(C) identifies the population and service area or areas 
     to be served by such plan;
       ``(D) provides that a family receiving assistance under the 
     plan may not receive duplicative assistance from other State 
     or tribal programs funded under this part;
       ``(E) identifies the employment opportunities in or near 
     the service area or areas of the Indian tribe and the manner 
     in which the Indian tribe will cooperate and participate in 
     enhancing such opportunities for recipients of assistance 
     under the plan consistent with any applicable State 
     standards; and
       ``(F) applies the fiscal accountability provisions of 
     section 5(f)(1) of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450c(f)(1)), relating to 
     the submission of a single-agency audit report required by 
     chapter 75 of title 31, United States Code.
       ``(2) Approval.--The Secretary shall approve each tribal 
     family assistance plan submitted in accordance with paragraph 
     (1).
       ``(3) Consortium of tribes.--Nothing in this section shall 
     preclude the development and submission of a single plan by 
     the participating Indian tribes of an intertribal consortium.
       ``(d) Minimum Work Participation Requirements and Time 
     Limits.--The Secretary, with the participation of Indian 
     tribes, shall establish for each Indian tribe receiving a 
     grant under this section minimum work participation 
     requirements, appropriate time limits for receipt of welfare-
     related services under such grant, and penalties against 
     individuals--
       ``(1) consistent with the purposes of this section;
       ``(2) consistent with the economic conditions and resources 
     available to each tribe; and
       ``(3) similar to comparable provisions in section 404(d).
       ``(e) Emergency Assistance.--Nothing in this section shall 
     preclude an Indian tribe from seeking emergency assistance 
     from any Federal loan program or emergency fund.
       ``(f) Accountability.--Nothing in this section shall be 
     construed to limit the ability of the Secretary to maintain 
     program funding accountability consistent with--
       ``(1) generally accepted accounting principles; and
       ``(2) the requirements of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450 et seq.).
       ``(g) Tribal Penalties.--For the purpose of ensuring the 
     proper use of tribal family assistance grants, the following 
     provisions shall apply to an Indian tribe with an approved 
     tribal assistance plan:
       ``(1) The provisions of subsections (a)(1), (a)(6), and (b) 
     of section 407, in the same manner as such subsections apply 
     to a State.
       ``(2) The provisions of section 407(a)(3), except that such 
     subsection shall be applied by substituting `the minimum 
     requirements established under subsection (d) of section 414' 
     for `the minimum participation rates specified in section 
     404'.
       ``(h) Data Collection and Reporting.--For the purpose of 
     ensuring uniformity in data collection, section 409 shall 
     apply to an Indian tribe with an approved tribal family 
     assistance plan.''.

     ``SEC. 415. ASSISTANT SECRETARY FOR FAMILY SUPPORT.

       ``The programs under this part and part D of this title 
     shall be administered by an Assistant Secretary for Family 
     Support within the Department of Health and Human Services, 
     who shall be appointed by the President, by and with the 
     advice and consent of the Senate, and who shall be in 
     addition to any other Assistant Secretary of Health and Human 
     Services provided for by law.

     ``SEC. 416. LIMITATION ON FEDERAL AUTHORITY.

       ``The Secretary of Health and Human Services and the 
     Secretary of the Treasury may not regulate the conduct of 
     States under this part or enforce any provision of this part, 
     except to the extent expressly provided in this part.''.

     SEC. 102. SERVICES PROVIDED BY CHARITABLE, RELIGIOUS, OR 
                   PRIVATE ORGANIZATIONS.

       (a) In General.--Notwithstanding any other provision of 
     law, a State is permitted to contract with charitable, 
     religious, or private organizations to provide services and 
     administer programs established or modified under this Act.
       (b) Religious Organizations.--The purpose of this section 
     is to allow the participation of religious organizations 
     which contract to provide services under this Act on the same 
     basis as any other provider without impairing the religious 
     character of such organizations, and without diminishing the 
     religious freedom of beneficiaries of assistance funded under 
     any program established or modified under this Act.
       (c) Nondiscrimination Against Religious Organizations.--
     Religious organizations are eligible as contractors to 
     provide assistance under any program established or modified 
     under this Act to needy families and children in accordance 
     with this section. Neither the Federal Government nor a State 
     receiving funds under such programs shall discriminate 
     against an organization which is or applies to be a 
     contractor to provide assistance on the basis that the 
     organization has a religious character.
       (d) Religious Character and Freedom.--
       (1) Religious organizations.--Notwithstanding any other 
     provision of law, any religious organization with a contract 
     described in subsection (a) shall retain its independence 
     from Federal, State, and local governments, including such 
     organization's control over the definition, development, 
     practice, and expression of its religious beliefs.
       (2) Additional safeguards.--Neither the Federal Government 
     nor a State shall require a religious organization 
     contracting to provide assistance to--
       (A) alter its form of internal governance, or form a 
     separate, nonprofit corporation to receive and administer the 
     assistance funded under this part; or
       (B) remove religious art, icons, scripture, or other 
     symbols;

     in order to be eligible to be a provider of assistance funded 
     under this part.
       (e) Nondiscrimination in Employment.--
       (1) In general.--Except as provided in paragraph (2), 
     nothing in this section shall be construed to modify or 
     affect the provisions of any other Federal law or regulation 
     that relates to discrimination in employment on the basis of 
     religion.
       (2) Exception.--A religious organization with a contract 
     described in subsection (a) may require that employees 
     rendering service pursuant to such contract adhere to the 
     religious tenets and teachings of such organization, and such 
     organization may require that employees adhere to rules 
     forbidding the use of drugs or alcohol.
       (f) Nondiscrimination Against Beneficiaries.--A religious 
     organization shall not discriminate against needy families 
     and children in regard to rendering assistance funded under 
     any program established or modified under this Act on the 
     basis of religion, a religious belief, or refusal to 
     participate in a religious practice.
       (g) Fiscal Accountability.--
       (1) In general.--Except as provided in paragraph (2), any 
     religious organization contracting to provide assistance 
     funded under any program established or modified under this 
     Act shall be subject to the same regulations as other 
     contractors to account in accord with generally accepted 
     auditing principles for the use of such funds provided under 
     such programs.
       (2) Limited audit.--If such organization segregates Federal 
     funds provided under such programs into separate accounts, 
     then only the financial assistance provided with such funds 
     shall be subject to audit.
       (h) Compliance.--A religious organization which has its 
     rights under this section violated may enforce its claim 
     exclusively by asserting a civil action for such relief as 
     may be appropriate, including injunctive relief or damages, 
     in an appropriate State court against the entity or agency 
     that allegedly commits such violation.
       (i) Rights of Beneficiaries of Assistance.--If a 
     beneficiary has an objection to the religious character of 
     the organization or institution from which the beneficiary is 
     receiving assistance funded under any program established or 
     modified under this Act, each State shall provide such 
     beneficiary assistance from an alternative provider the value 
     of which is not less than the value of the assistance which 
     the individual would have received from the organization.

     SEC. 103. LIMITATIONS ON USE OF FINANCIAL ASSISTANCE FOR 
                   CERTAIN PURPOSES.

       No financial assistance provided under programs established 
     or modified by this Act shall be expended for any sectarian 
     purpose or activity, including sectarian worship or 
     instruction.

     SEC. 104. CONTINUED APPLICATION OF CURRENT STANDARDS UNDER 
                   MEDICAID PROGRAM.

       (a) In General.--Title XIX (42 U.S.C. 1396 et seq.) is 
     amended--
       (1) in section 1931, by inserting ``subject to section 
     1931(a),'' after ``under this title,'' and by redesignating 
     such section as section 1932; and
       (2) by inserting after section 1930 the following new 
     section:


               ``continued application of afdc standards

       ``Sec. 1931. (a) For purposes of applying this title on and 
     after October 1, 1995, with respect to a State--
       ``(1) except as provided in paragraph (2), any reference in 
     this title (or other provision of law in relation to the 
     operation of this title) to a provision of part A of title IV 
     of this Act, or a State plan under such part, shall be 
     considered a reference to such provision or plan as in effect 
     as of June 1, 1995, with respect to the State and eligibility 
     for medical assistance under this title shall be determined 
     as if such provision or plan (as in effect as of such date) 
     had remained in effect on and after October 1, 1995; and

[[Page S11649]]

       ``(2) any reference in section 1902(a)(5) or 1902(a)(55) to 
     a State plan approved under part A of title IV shall be 
     deemed a reference to a State program funded under such part 
     (as in effect on and after October 1, 1995).
       ``(b) In the case of a waiver of a provision of part A of 
     title IV in effect with respect to a State as of June 1, 
     1995, if the waiver affects eligibility of individuals for 
     medical assistance under this title, such waiver may, at the 
     option of the State, continue to be applied in relation to 
     this title after the date the waiver would otherwise 
     expire.''.
       (b) Plan Amendment.--Section 1902(a) (42 U.S.C. 1396a(a)) 
     is amended--
       (1) by striking ``and'' at the end of paragraph (61);
       (2) by striking the period at the end of paragraph (62) and 
     inserting ``; and''; and
       (3) by inserting after paragraph (62) the following new 
     paragraph:
       ``(63) provide for continuing to administer eligibility 
     standards with respect to individuals who are (or seek to be) 
     eligible for medical assistance based on the application of 
     section 1931.''.
       (c) Conforming Amendments.--(1) Section 1902(c) (42 U.S.C. 
     1396a(c)) is amended by striking ``if--'' and all that 
     follows and inserting the following: ``if the State requires 
     individuals described in subsection (l)(1) to apply for 
     assistance under the State program funded under part A of 
     title IV as a condition of applying for or receiving medical 
     assistance under this title.''.
       (2) Section 1903(i) (42 U.S.C. 1396b(i)) is amended by 
     striking paragraph (9).
       (d) Effective Date.--The amendments made by this section 
     shall apply to medical assistance furnished for calendar 
     quarters beginning on or after October 1, 1995.

     SEC. 105. REDUCTION IN PERSONNEL.

       (a) In General.--The Secretary of Health and Human Services 
     shall take such actions as may be necessary, including 
     reduction in force actions, consistent with sections 3502 and 
     3595 of title 5, United States Code, to ensure that at least 
     30 percent of the personnel in positions that relate to a 
     covered activity are separated from service.
       (b) Definition of Covered Activity.--For purposes of this 
     section, the term covered activity means an activity 
     authorized to be carried out under part A or F of the Social 
     Security Act (42 U.S.C. 601 et seq. and 682 et seq.) as such 
     parts were in effect prior to the date of the enactment of 
     this Act but does not include any position in an Office of 
     Inspector General that relates to the auditing or 
     investigation of a covered activity.

     SEC. 106. CONFORMING AMENDMENTS TO THE SOCIAL SECURITY ACT.

       (a) Amendments to Title II.--
       (1) Section 205(c)(2)(C)(vi) (42 U.S.C. 405(c)(2)(C)(vi)), 
     as so redesignated by section 321(a)(9)(B) of the Social 
     Security Independence and Program Improvements Act of 1994, 
     is amended--
       (A) by inserting ``an agency administering a program funded 
     under part A of title IV or'' before ``an agency operating''; 
     and
       (B) by striking ``A or D of title IV of this Act'' and 
     inserting ``D of such title''.
       (2) Section 228(d)(1) (42 U.S.C. 428(d)(1)) is amended by 
     inserting ``under a State program funded under'' before 
     ``part A of title IV''.
       (b) Amendment to Part B of Title IV.--Section 422(b)(2) (42 
     U.S.C. 622(b)(2)) is amended by striking ``under the State 
     plan approved'' and inserting ``under the State program 
     funded.''.
       (c) Amendments to Part D of Title IV.--
       (1) Section 451 (42 U.S.C. 651) is amended by striking 
     ``aid'' and inserting ``assistance under a State program 
     funded''.
       (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is 
     amended--
       (A) by striking ``aid to families with dependent children'' 
     and inserting ``assistance under a State program funded under 
     part A'';
       (B) by striking ``such aid'' and inserting ``such 
     assistance''; and
       (C) by striking ``402(a)(26) or''.
       (3) Section 452(a)(10)(F) (42 U.S.C. 652(a)(10)(F)) is 
     amended--
       (A) by striking ``aid under a State plan approved'' and 
     inserting ``assistance under a State program funded''; and
       (B) by striking ``in accordance with the standards referred 
     to in section 402(a)(26)(B)(ii)'' and inserting ``by the 
     State''.
       (4) Section 452(b) (42 U.S.C. 652(b)) is amended in the 
     first sentence by striking ``aid under the State plan 
     approved under part A'' and inserting ``assistance under a 
     State program funded under part A''.
       (5) Section 452(d)(3)(B)(i) (42 U.S.C. 652(d)(3)(B)(i)) is 
     amended by striking ``1115(c)'' and inserting ``1115(b)''.
       (6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C. 
     652(g)(2)(A)(ii)(I)) is amended by striking ``aid is being 
     paid under the State's plan approved under part A or E'' and 
     inserting ``assistance is being provided under the State 
     program funded under part A or aid is being paid under the 
     State's plan approved under part E''.
       (7) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is 
     amended in the matter following clause (iii) by striking 
     ``aid was being paid under the State's plan approved under 
     part A or E'' and inserting ``assistance was being provided 
     under the State program funded under part A or aid was being 
     paid under the State's plan approved under part E''.
       (8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended in 
     the matter following subparagraph (B)--
       (A) by striking ``who is a dependent child by reason of the 
     death of a parent'' and inserting ``with respect to whom 
     assistance is being provided under the State program funded 
     under part A'';
       (B) by inserting ``by the State agency administering the 
     State plan approved under this part'' after ``found''; and
       (C) by striking ``under section 402(a)(26)'' and inserting 
     ``with the State in establishing paternity''.
       (9) Section 452(h) (42 U.S.C. 652(h)) is amended by 
     striking ``under section 402(a)(26)''.
       (10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is amended by 
     striking ``aid'' and inserting ``assistance under a State 
     program funded''.
       (11) Section 454 (42 U.S.C. 654)) is amended--
       (A) in paragraph (5)(A)--
       (i) by striking ``under section 402(a)(26)''; and
       (ii) by striking ``except that this paragraph shall not 
     apply to such payments for any month following the first 
     month in which the amount collected is sufficient to make 
     such family ineligible for assistance under the State plan 
     approved under part A;''; and
       (B) in paragraph (6)(D), by striking ``aid under a State 
     plan approved'' and inserting ``assistance under a State 
     program funded''.
       (12) Section 456 (42 U.S.C. 656) is amended--
       (A) in subsection (a)(1), by striking ``under section 
     402(a)(26)''; and
       (B) by striking subsection (b) and inserting the following:
       ``(b) A debt which is a support obligation enforceable 
     under this title is not released by a discharge in bankruptcy 
     under title 11, United States Code.''.
       (13) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is 
     amended by striking ``402(a)(26) or''.
       (14) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is amended by 
     striking ``aid'' and inserting ``assistance under a State 
     program funded''.
       (15) Section 469(a) (42 U.S.C. 669(a)) is amended--
       (A) by striking ``aid under plans approved'' and inserting 
     ``assistance under State programs funded''; and
       (B) by striking ``such aid'' and inserting ``such 
     assistance''.
       (d) Amendments to Part E of Title IV.--
       (1) Section 470 (42 U.S.C. 670) is amended--
       (A) by striking ``would be'' and inserting ``would have 
     been''; and
       (B) by inserting ``(as such plan was in effect on June 1, 
     1995)'' after ``part A''.
       (2) Section 471(17) (42 U.S.C. 671(17)) is amended by 
     striking ``plans approved under parts A and D'' and inserting 
     ``program funded under part A and plan approved under part 
     D''.
       (3) Section 472(a) (42 U.S.C. 672(a)) is amended--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``would meet'' and inserting ``would have 
     met'';
       (ii) by inserting ``(as such sections were in effect on 
     June 1, 1995)'' after ``407''; and
       (iii) by inserting ``(as so in effect)'' after ``406(a)''; 
     and
       (B) in paragraph (4)--
       (i) in subparagraph (A)--

       (I) by inserting ``would have'' after ``(A)''; and
       (II) by inserting ``(as in effect on June 1, 1995)'' after 
     ``section 402''; and

       (ii) in subparagraph (B)(ii), by inserting ``(as in effect 
     on June 1, 1995)'' after ``406(a)''.
       (4) Section 472(h) (42 U.S.C. 672(h)) is amended to read as 
     follows:
       ``(h)(1) For purposes of title XIX, any child with respect 
     to whom foster care maintenance payments are made under this 
     section shall be deemed to be a dependent child as defined in 
     section 406 (as in effect as of June 1, 1995) and shall be 
     deemed to be a recipient of aid to families with dependent 
     children under part A of this title (as so in effect). For 
     purposes of title XX, any child with respect to whom foster 
     care maintenance payments are made under this section shall 
     be deemed to be a minor child in a needy family under a State 
     program funded under part A and shall be deemed to be a 
     recipient of assistance under such part.
       ``(2) For purposes of paragraph (1), a child whose costs in 
     a foster family home or child care institution are covered by 
     the foster care maintenance payments being made with respect 
     to the child's minor parent, as provided in section 
     475(4)(B), shall be considered a child with respect to whom 
     foster care maintenance payments are made under this 
     section.''.
       (5) Section 473(a)(2) (42 U.S.C. 673(a)(2)) is amended--
       (A) in subparagraph (A)(i)--
       (i) by inserting ``(as such sections were in effect on June 
     1, 1995)'' after ``407'';
       (ii) by inserting ``(as so in effect)'' after ``specified 
     in section 406(a)''; and
       (iii) by inserting ``(as such section was in effect on June 
     1, 1995)'' after ``403'';
       (B) in subparagraph (B)(i)--
       (i) by inserting ``would have'' after ``(B)(i)''; and
       (ii) by inserting ``(as in effect on June 1, 1995)'' after 
     ``section 402''; and
       (C) in subparagraph (B)(ii)(II), by inserting ``(as in 
     effect on June 1, 1995)'' after ``406(a)''.
       (6) Section 473(b) (42 U.S.C. 673(b)) is amended to read as 
     follows:
       ``(b)(1) For purposes of title XIX, any child who is 
     described in paragraph (3) shall be deemed to be a dependent 
     child as defined in section 406 (as in effect as of June 1, 
     1995) and shall be deemed to be a recipient of aid to 
     families with dependent children under part 

[[Page S11650]]
     A of this title (as so in effect) in the State where such child 
     resides.
       ``(2) For purposes of title XX, any child who is described 
     in paragraph (3) shall be deemed to be a minor child in a 
     needy family under a State program funded under part A and 
     shall be deemed to be a recipient of assistance under such 
     part.
       ``(3) A child described in this paragraph is any child--
       ``(A)(i) who is a child described in subsection (a)(2), and
       ``(ii) with respect to whom an adoption assistance 
     agreement is in effect under this section (whether or nor 
     adoption assistance payments are provided under the agreement 
     or are being made under this section), including any such 
     child who has been placed for adoption in accordance with 
     applicable State and local law (whether or not an 
     interlocutory or other judicial decree of adoption has been 
     issued), or
       ``(B) with respect to whom foster care maintenance payments 
     are being made under section 472.
       ``(4) For purposes of paragraphs (1) and (2), a child whose 
     costs in a foster family home or child-care institution are 
     covered by the foster care maintenance payments being made 
     with respect to the child's minor parent, as provided in 
     section 475(4)(B), shall be considered a child with respect 
     to whom foster care maintenance payments are being made under 
     section 472.''.
       (7) Section 474 (42 U.S.C. 674) is amended by adding at the 
     end the following new subsection:
       ``(d) Notwithstanding any other provision of this part, a 
     State may not receive payment under this section with respect 
     to an individual receiving assistance under this part as a 
     result of such individual's eligibility under the State plan 
     approved under part A (as in effect on June 1, 1995) unless 
     such individual would also be eligible to receive assistance 
     under the State program operated under part A as such plan is 
     in effect on and after October 1, 1995.''.
       (e) Amendment to Title X.--Section 1002(a)(7) (42 U.S.C. 
     1202(a)(7)) is amended by striking ``aid to families with 
     dependent children under the State plan approved under 
     section 402 of this Act'' and inserting ``assistance under a 
     State program funded under part A of title IV''.
       (f) Amendments to Title XI.--
       (1) Section 1109 (42 U.S.C. 1309) is amended by striking 
     ``or part A of title IV,''.
       (2) Section 1115 (42 U.S.C. 1315) is amended--
       (A) in subsection (a)(2)--
       (i) by inserting ``(A)'' after ``(2)'';
       (ii) by striking ``403,'';
       (iii) by striking the period at the end and inserting ``, 
     and''; and
       (iv) by adding at the end the following new subparagraph:
       ``(B) costs of such project which would not otherwise be a 
     permissible use of funds under part A of title IV and which 
     are not included as part of the costs of projects under 
     section 1110, shall to the extent and for the period 
     prescribed by the Secretary, be regarded as a permissible use 
     of funds under such part.''; and
       (B) in subsection (c)(3), by striking ``under the program 
     of aid to families with dependent children'' and inserting 
     ``part A of such title''.
       (3) Section 1116 (42 U.S.C. 1316) is amended--
       (A) in each of subsections (a)(1), (b), and (d), by 
     striking ``or part A of title IV,''; and
       (B) in subsection (a)(3), by striking ``404,''.
       (4) Section 1118 (42 U.S.C. 1318) is amended--
       (A) by striking ``403(a),'';
       (B) by striking ``and part A of title IV,''; and
       (C) by striking ``, and shall, in the case of American 
     Samoa, mean 75 per centum with respect to part A of title 
     IV''.
       (5) Section 1119 (42 U.S.C. 1319) is amended--
       (A) by striking ``or part A of title IV''; and
       (B) by striking ``403(a),''.
       (6) Section 1133(a) (42 U.S.C. 1320b-3(a)) is amended by 
     striking ``or part A of title IV,''.
       (7) Section 1136 (42 U.S.C. 1320b-6) is repealed.
       (8) Section 1137 (42 U.S.C. 1320b-7) is amended--
       (A) in subsection (b), by striking paragraph (1) and 
     inserting the following:
       ``(1) any State program funded under part A of title IV of 
     this Act;''; and
       (B) in subsection (d)(1)(B)--
       (i) by striking ``In this subsection--'' and all that 
     follows through ``(ii) in'' and inserting ``In this 
     subsection, in'';
       (ii) by redesignating subclauses (I), (II), and (III) as 
     clauses (i), (ii), and (iii); and
       (iii) by moving such redesignated material 2 ems to the 
     left.
       (9) Section 1108 (42 U.S.C. 1308) is amended--
       (A) in subsection (a)--
       (i) in the matter preceding paragraph (1)--

       (I) by inserting ``(or paid, in the case of part A of title 
     IV); and
       (II) by striking ``or, in the case of'' and all that 
     follows through ``section 403(k)'';

       (ii) in paragraph (1)--

       (I) in subparagraph (F), by striking ``or'';
       (II) in subparagraph (G), by striking ``the fiscal year 
     1989 and each fiscal year thereafter;'' and inserting ``each 
     of the fiscal years 1989 through 1995, or''; and
       (III) by inserting after subparagraph (G), the following 
     new subparagraph:

       ``(H) $92,250,000 with respect to fiscal year 1996 and each 
     fiscal year thereafter;'';
       (iii) in paragraph (2)--

       (I) in subparagraph (F), by striking ``or'';
       (II) in subparagraph (G), by striking ``the fiscal year 
     1989 and each fiscal year thereafter;'' and inserting ``each 
     of the fiscal years 1989 through 1995, or''; and
       (III) by inserting after subparagraph (G), the following 
     new subparagraph:

       ``(H) $3,150,000 with respect to fiscal year 1996 and each 
     fiscal year thereafter;''; and
       (iv) in paragraph (3)--

       (I) in subparagraph (F), by striking ``or'';
       (II) in subparagraph (G), by striking ``the fiscal year 
     1989 and each fiscal year thereafter.'' and inserting ``each 
     of the fiscal years 1989 through 1995, or''; and
       (III) by inserting after subparagraph (G), the following 
     new subparagraph:

       ``(H) $4,275,000 with respect to fiscal year 1996 and each 
     fiscal year thereafter.''; and
       (B) in subsection (d), by striking ``(exclusive of any 
     amounts'' and all that follows through ``section 403(k) 
     applies)''.
       (g) Amendment to Title XIV.--Section 1402(a)(7) (42 U.S.C. 
     1352(a)(7)) is amended by striking ``aid to families with 
     dependent children under the State plan approved under 
     section 402 of this Act'' and inserting ``assistance under a 
     State program funded under part A of title IV''.
       (h) Amendment to Title XVI as in Effect With Respect to the 
     Territories.--Section 1602(a)(11), as in effect without 
     regard to the amendment made by section 301 of the Social 
     Security Amendments of 1972 (42 U.S.C. 1382 note), is amended 
     by striking ``aid under the State plan approved'' and 
     inserting ``assistance under a State program funded''.
       (i) Amendment to Title XVI as in Effect With Respect to the 
     States.--Section 1611(c)(5)(A) (42 U.S.C. 1382(c)(5)(A)) is 
     amended to read as follows: ``(A) a State program funded 
     under part A of title IV,''.

     SEC. 107. CONFORMING AMENDMENTS TO THE FOOD STAMP ACT OF 1977 
                   AND RELATED PROVISIONS.

       (a) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) 
     is amended--
       (1) in the second sentence of subsection (a), by striking 
     ``plan approved'' and all that follows through ``title IV of 
     the Social Security Act'' and inserting ``program funded 
     under part A of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.) that the Secretary determines complies 
     with standards established by the Secretary that ensure that 
     the standards under the State program are comparable to or 
     more restrictive than those in effect on June 1, 1995'';
       (2) in subsection (d)(5)--
       (A) by striking ``assistance to families with dependent 
     children'' and inserting ``assistance under a State program 
     funded''; and
       (B) by striking paragraph (13) and redesignating paragraphs 
     (14), (15), and (16) as paragraphs (13), (14), and (15), 
     respectively;
       (3) in subsection (j), by striking ``plan approved under 
     part A of title IV of such Act (42 U.S.C. 601 et seq.)'' and 
     inserting ``program funded under part A of title IV of the 
     Act (42 U.S.C. 601 et seq.) that the Secretary determines 
     complies with standards established by the Secretary that 
     ensure that the standards under the State program are 
     comparable to or more restrictive than those in effect on 
     June 1, 1995''.
       (b) Section 6 of such Act (7 U.S.C. 2015) is amended--
       (1) in subsection (c)(5), by striking ``the State plan 
     approved'' and inserting ``the State program funded'';
       (2) in subsection (e)--
       (A) by striking ``aid to families with dependent children'' 
     and inserting ``benefits under a State program funded''; and
       (B) by inserting before the semicolon the following: ``that 
     the Secretary determines complies with standards established 
     by the Secretary that ensure that the standards under the 
     State program are comparable to or more restrictive than 
     those in effect on June 1, 1995''; and
       (3) by adding at the end the following new subsection:
       ``(i) Notwithstanding any other provision of this Act, a 
     household may not receive benefits under this Act as a result 
     of the household's eligibility under a State program funded 
     under part A of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.), unless the Secretary determines that any 
     household with income above 130 percent of the poverty 
     guidelines is not eligible for the program.''.
       (c) Section 16(g)(4) of such Act (7 U.S.C. 2025(g)(4)) is 
     amended by striking ``State plans under the Aid to Families 
     with Dependent Children Program under'' and inserting ``State 
     programs funded under part A of''.
       (d) Section 17 of such Act (7 U.S.C. 2026) is amended--
       (1) in the first sentence of subsection (b)(1)(A), by 
     striking ``to aid to families with dependent children under 
     part A of title IV of the Social Security Act'' and inserting 
     ``or are receiving assistance under a State program funded 
     under part A of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.)''; and
       (2) in subsection (b)(3), by adding at the end the 
     following new subparagraph:
        ``(I) The Secretary may not grant a waiver under this 
     paragraph on or after October 1, 1995. Any reference in this 
     paragraph to a provision of title IV of the Social Security 
     Act shall be deemed to be a reference to such provision as in 
     effect on September 30, 1995.'';
       (e) Section 20 of such Act (7 U.S.C. 2029) is amended--
       (1) in subsection (a)(2)(B) by striking ``operating--'' and 
     all that follows through ``(ii) 

[[Page S11651]]
     any other'' and inserting ``operating any''; and
       (2) in subsection (b)--
       (A) in paragraph (1)--
       (i) by striking ``(b)(1) A household'' and inserting ``(b) 
     A household''; and
       (ii) in subparagraph (B), by striking ``training program'' 
     and inserting ``activity'';
       (B) by striking paragraph (2); and
       (C) by redesignating subparagraphs (A) through (F) as 
     paragraphs (1) through (6), respectively.
       (f) Section 5(h)(1) of the Agriculture and Consumer 
     Protection Act of 1973 (Public Law 93-186; 7 U.S.C. 612c 
     note) is amended by striking ``the program for aid to 
     families with dependent children'' and inserting ``the State 
     program funded''.
       (g) Section 9 of the National School Lunch Act (42 U.S.C. 
     1758) is amended--
       (1) in subsection (b)--
       (A) in paragraph (2)(C)(ii)(II)--
       (i) by striking ``program for aid to families with 
     dependent children'' and inserting ``State program funded''; 
     and
       (ii) by inserting before the period at the end the 
     following: ``that the Secretary determines complies with 
     standards established by the Secretary that ensure that the 
     standards under the State program are comparable to or more 
     restrictive than those in effect on June 1, 1995''; and
       (B) in paragraph (6)--
       (i) in subparagraph (A)(ii)--

       (I) by striking ``an AFDC assistance unit (under the aid to 
     families with dependent children program authorized'' and 
     inserting ``a family (under the State program funded''; and
       (II) by striking ``, in a State'' and all that follows 
     through ``9902(2)))'' and inserting ``that the Secretary 
     determines complies with standards established by the 
     Secretary that ensure that the standards under the State 
     program are comparable to or more restrictive than those in 
     effect on June 1, 1995''; and

       (ii) in subparagraph (B), by striking ``aid to families 
     with dependent children'' and inserting ``assistance under 
     the State program funded under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) that the 
     Secretary determines complies with standards established by 
     the Secretary that ensure that the standards under the State 
     program are comparable to or more restrictive than those in 
     effect on June 1, 1995''; and
       (2) in subsection (d)(2)(C)--
       (A) by striking ``program for aid to families with 
     dependent children'' and inserting ``State program funded''; 
     and
       (B) by inserting before the period at the end the 
     following: ``that the Secretary determines complies with 
     standards established by the Secretary that ensure that the 
     standards under the State program are comparable to or more 
     restrictive than those in effect on June 1, 1995''.
       (h) Section 17 of the Child Nutrition Act of 1966 (42 
     U.S.C. 1786) is amended--
       (1) in subsection (d)(2)(A)(ii)(II)--
       (A) by striking ``program for aid to families with 
     dependent children established'' and inserting ``State 
     program funded''; and
       (B) by inserting before the semicolon the following: ``that 
     the Secretary determines complies with standards established 
     by the Secretary that ensure that the standards under the 
     State program are comparable to or more restrictive than 
     those in effect on June 1, 1995'';
       (2) in subsection (e)(4)(A), by striking ``program for aid 
     to families with dependent children'' and inserting ``State 
     program funded''; and
       (3) in subsection (f)(1)(C)(iii), by striking ``aid to 
     families with dependent children,'' and inserting ``State 
     program funded under part A of title IV of the Social 
     Security Act (42 U.S.C. 601 et seq.) and with the''.

     SEC. 108. CONFORMING AMENDMENTS TO OTHER LAWS.

       (a) Subsection (b) of section 508 of the Unemployment 
     Compensation Amendments of 1976 (Public Law 94-566; 90 Stat. 
     2689) is amended to read as follows:
       ``(b) Provision for Reimbursement of Expenses.--For 
     purposes of section 455 of the Social Security Act, expenses 
     incurred to reimburse State employment offices for furnishing 
     information requested of such offices--
       ``(1) pursuant to the third sentence of section 3(a) of the 
     Act entitled `An Act to provide for the establishment of a 
     national employment system and for cooperation with the 
     States in the promotion of such system, and for other 
     purposes', approved June 6, 1933 (29 U.S.C. 49b(a)), or
       ``(2) by a State or local agency charged with the duty of 
     carrying a State plan for child support approved under part D 
     of title IV of the Social Security Act,

     shall be considered to constitute expenses incurred in the 
     administration of such State plan.''.
       (b) Section 9121 of the Omnibus Budget Reconciliation Act 
     of 1987 (42 U.S.C. 602 note) is repealed.
       (c) Section 9122 of the Omnibus Budget Reconciliation Act 
     of 1987 (42 U.S.C. 602 note) is repealed.
       (d) Section 221 of the Housing and Urban-Rural Recovery Act 
     of 1983 (42 U.S.C. 602 note), relating to treatment under 
     AFDC of certain rental payments for federally assisted 
     housing, is repealed.
       (e) Section 159 of the Tax Equity and Fiscal Responsibility 
     Act of 1982 (42 U.S.C. 602 note) is repealed.
       (f) Section 202(d) of the Social Security Amendments of 
     1967 (81 Stat. 882; 42 U.S.C. 602 note) is repealed.
       (g) Section 233 of the Social Security Act Amendments of 
     1994 (42 U.S.C. 602 note) is repealed.
       (h) Section 903 of the Stewart B. McKinney Homeless 
     Assistance Amendments Act of 1988 (42 U.S.C. 11381 note), 
     relating to demonstration projects to reduce number of AFDC 
     families in welfare hotels, is amended--
       (1) in subsection (a), by striking ``aid to families with 
     dependent children under a State plan approved'' and 
     inserting ``assistance under a State program funded''; and
       (2) in subsection (c), by striking ``aid to families with 
     dependent children in the State under a State plan approved'' 
     and inserting ``assistance in the State under a State program 
     funded''.
       (i) The Higher Education Act of 1965 (20 U.S.C. 1001 et 
     seq.) is amended--
       (1) in section 404C(c)(3) (20 U.S.C. 1070a-23(c)(3)), by 
     striking ``(Aid to Families with Dependent Children)''; and
       (2) in section 480(b)(2) (20 U.S.C. 1087vv(b)(2)), by 
     striking ``aid to families with dependent children under a 
     State plan approved'' and inserting ``assistance under a 
     State program funded''.
       (j) The Carl D. Perkins Vocational and Applied Technology 
     Education Act (20 U.S.C. 2301 et seq.) is amended--
       (1) in section 231(d)(3)(A)(ii) (20 U.S.C. 
     2341(d)(3)(A)(ii)), by striking ``the program for aid to 
     dependent children'' and inserting ``the State program 
     funded'';
       (2) in section 232(b)(2)(B) (20 U.S.C. 2341a(b)(2)(B)), by 
     striking ``the program for aid to families with dependent 
     children'' and inserting ``the State program funded''; and
       (3) in section 521(14)(B)(iii) (20 U.S.C. 
     2471(14)(B)(iii)), by striking ``the program for aid to 
     families with dependent children'' and inserting ``the State 
     program funded''.
       (k) The Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 2701 et seq.) is amended--
       (1) in section 1113(a)(5) (20 U.S.C. 6313(a)(5)), by 
     striking ``Aid to Families with Dependent Children Program'' 
     and inserting ``State program funded under part A of title IV 
     of the Social Security Act'';
       (2) in section 1124(c)(5) (20 U.S.C. 6333(c)(5)), by 
     striking ``the program of aid to families with dependent 
     children under a State plan approved under'' and inserting 
     ``a State program funded under part A of''; and
       (3) in section 5203(b)(2) (20 U.S.C. 7233(b)(2))--
       (A) in subparagraph (A)(xi), by striking ``Aid to Families 
     with Dependent Children benefits'' and inserting ``assistance 
     under a State program funded under part A of title IV of the 
     Social Security Act''; and
       (B) in subparagraph (B)(viii), by striking ``Aid to 
     Families with Dependent Children'' and inserting ``assistance 
     under the State program funded under part A of title IV of 
     the Social Security Act''.
       (l) Chapter VII of title I of Public Law 99-88 (25 U.S.C. 
     13d-1) is amended to read as follows: ``Provided further, 
     That general assistance payments made by the Bureau of Indian 
     Affairs shall be made--
       ``(1) after April 29, 1985, and before October 1, 1995, on 
     the basis of Aid to Families with Dependent Children (AFDC) 
     standards of need; and
       ``(2) on and after October 1, 1995, on the basis of 
     standards of need established under the State program funded 
     under part A of title IV of the Social Security Act,
     except that where a State ratably reduces its AFDC or State 
     program payments, the Bureau shall reduce general assistance 
     payments in such State by the same percentage as the State 
     has reduced the AFDC or State program payment.''.
       (m) The Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) 
     is amended--
       (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by striking 
     all that follows ``agency as'' and inserting ``being eligible 
     for financial assistance under part A of title IV of the 
     Social Security Act and as having continually received such 
     financial assistance during the 90-day period which 
     immediately precedes the date on which such individual is 
     hired by the employer.'';
       (2) in section 3304(a)(16) (26 U.S.C. 3304(a)(16)), by 
     striking ``eligibility for aid or services,'' and all that 
     follows through ``children approved'' and inserting 
     ``eligibility for assistance, or the amount of such 
     assistance, under a State program funded'';
       (3) in section 6103(l)(7)(D)(i) (26 U.S.C. 
     6103(l)(7)(D)(i)), by striking ``aid to families with 
     dependent children provided under a State plan approved'' and 
     inserting ``a State program funded'';
       (4) in section 6334(a)(11)(A) (26 U.S.C. 6334(a)(11)(A)), 
     by striking ``(relating to aid to families with dependent 
     children)''; and
       (5) in section 7523(b)(3)(C) (26 U.S.C. 7523(b)(3)(C)), by 
     striking ``aid to families with dependent children'' and 
     inserting ``assistance under a State program funded under 
     part A of title IV of the Social Security Act''.
       (n) Section 3(b) of the Wagner-Peyser Act (29 U.S.C. 
     49b(b)) is amended by striking ``State plan approved under 
     part A of title IV'' and inserting ``State program funded 
     under part A of title IV''.
       (o) The Job Training Partnership Act (29 U.S.C. 1501 et 
     seq.) is amended--
       (1) in section 4(29)(A)(i) (29 U.S.C. 1503(29)(A)(i)), by 
     striking ``(42 U.S.C. 601 et seq.)'';
       (2) in section 106(b)(6)(C) (29 U.S.C. 1516(b)(6)(C)), by 
     striking ``State aid to families with dependent children 
     records,'' and 

[[Page S11652]]
     inserting ``records collected under the State program funded under part 
     A of title IV of the Social Security Act,'';
       (3) in section 121(b)(2) (29 U.S.C. 1531(b)(2))--
       (A) by striking ``the JOBS program'' and inserting ``the 
     work activities required under title IV of the Social 
     Security Act''; and
       (B) by striking the second sentence;
       (4) in section 123(c) (29 U.S.C. 1533(c))--
       (A) in paragraph (1)(E), by repealing clause (vi); and
       (B) in paragraph (2)(D), by repealing clause (v);
       (5) in section 203(b)(3) (29 U.S.C. 1603(b)(3)), by 
     striking ``, including recipients under the JOBS program'';
       (6) in subparagraphs (A) and (B) of section 204(a)(1) (29 
     U.S.C. 1604(a)(1) (A) and (B)), by striking ``(such as the 
     JOBS program)'' each place it appears;
       (7) in section 205(a) (29 U.S.C. 1605(a)), by striking 
     paragraph (4) and inserting the following:
       ``(4) the portions of title IV of the Social Security Act 
     relating to work activities;'';
       (8) in section 253 (29 U.S.C. 1632)--
       (A) in subsection (b)(2), by repealing subparagraph (C); 
     and
       (B) in paragraphs (1)(B) and (2)(B) of subsection (c), by 
     striking ``the JOBS program or'' each place it appears;
       (9) in section 264 (29 U.S.C. 1644)--
       (A) in subparagraphs (A) and (B) of subsection (b)(1), by 
     striking ``(such as the JOBS program)'' each place it 
     appears; and
       (B) in subparagraphs (A) and (B) of subsection (d)(3), by 
     striking ``and the JOBS program'' each place it appears;
       (10) in section 265(b) (29 U.S.C. 1645(b)), by striking 
     paragraph (6) and inserting the following:
       ``(6) the portion of title IV of the Social Security Act 
     relating to work activities;'';
       (11) in the second sentence of section 429(e) (29 U.S.C. 
     1699(e)), by striking ``and shall be in an amount that does 
     not exceed the maximum amount that may be provided by the 
     State pursuant to section 402(g)(1)(C) of the Social Security 
     Act (42 U.S.C. 602(g)(1)(C))'';
       (12) in section 454(c) (29 U.S.C. 1734(c)), by striking 
     ``JOBS and'';
       (13) in section 455(b) (29 U.S.C. 1735(b)), by striking 
     ``the JOBS program,'';
       (14) in section 501(1) (29 U.S.C. 1791(1)), by striking 
     ``aid to families with dependent children under part A of 
     title IV of the Social Security Act (42 U.S.C. 601 et seq.)'' 
     and inserting ``assistance under the State program funded 
     under part A of title IV of the Social Security Act'';
       (15) in section 506(1)(A) (29 U.S.C. 1791e(1)(A)), by 
     striking ``aid to families with dependent children'' and 
     inserting ``assistance under the State program funded'';
       (16) in section 508(a)(2)(A) (29 U.S.C. 1791g(a)(2)(A)), by 
     striking ``aid to families with dependent children'' and 
     inserting ``assistance under the State program funded''; and
       (17) in section 701(b)(2)(A) (29 U.S.C. 1792(b)(2)(A))--
       (A) in clause (v), by striking the semicolon and inserting 
     ``; and''; and
       (B) by striking clause (vi).
       (p) Section 3803(c)(2)(C)(iv) of title 31, United States 
     Code, is amended to read as follows:
       ``(iv) assistance under a State program funded under part A 
     of title IV of the Social Security Act''.
       (q) Section 2605(b)(2)(A)(i) of the Low-Income Home Energy 
     Assistance Act of 1981 (42 U.S.C. 8624(b)(2)(A)(i)) is 
     amended to read as follows:
       ``(i) assistance under the State program funded under part 
     A of title IV of the Social Security Act;''.
       (r) Section 303(f)(2) of the Family Support Act of 1988 (42 
     U.S.C. 602 note) is amended--
       (1) by striking ``(A)''; and
       (2) by striking subparagraphs (B) and (C).
       (s) The Balanced Budget and Emergency Deficit Control Act 
     of 1985 (2 U.S.C. 900 et seq.)) is amended--
       (1) in section 255(h) (2 U.S.C. 905(h), by striking ``Aid 
     to families with dependent children (75-0412-0-1-609);'' and 
     inserting ``Block grants to States for temporary assistance 
     for needy families;''; and
       (2) in section 256 (2 U.S.C. 906)--
       (A) by striking subsection (k); and
       (B) by redesignating subsection (l) as subsection (k).
       (t) The Immigration and Nationality Act (8 U.S.C. 1101 et 
     seq.) is amended--
       (1) in section 210(f) (8 U.S.C. 1160(f)), by striking ``aid 
     under a State plan approved under'' each place it appears and 
     inserting ``assistance under a State program funded under'';
       (2) in section 245A(h) (8 U.S.C. 1255a(h))--
       (A) in paragraph (1)(A)(i), by striking ``program of aid to 
     families with dependent children'' and inserting ``State 
     program of assistance''; and
       (B) in paragraph (2)(B), by striking ``aid to families with 
     dependent children'' and inserting ``assistance under a State 
     program funded under part A of title IV of the Social 
     Security Act''; and
       (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)), by striking 
     ``State plan approved'' and inserting ``State program 
     funded''.
       (u) Section 640(a)(4)(B)(i) of the Head Start Act (42 
     U.S.C. 9835(a)(4)(B)(i)) is amended by striking ``program of 
     aid to families with dependent children under a State plan 
     approved'' and inserting ``State program of assistance 
     funded''.
       (v) Section 9 of the Act of April 19, 1950 (64 Stat. 47, 
     chapter 92; 25 U.S.C. 639) is repealed.
       (w) Subparagraph (E) of section 213(d)(6) of the School-To-
     Work Opportunities Act of 1994 (20 U.S.C. 6143(d)(6)) is 
     amended to read as follows:
       ``(E) part A of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.) relating to work activities;''.

     SEC. 109. SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL FOR 
                   TECHNICAL AND CONFORMING AMENDMENTS.

       Not later than 90 days after the date of the enactment of 
     this Act, the Secretary of Health and Human Services, in 
     consultation, as appropriate, with the heads of other Federal 
     agencies, shall submit to the appropriate committees of 
     Congress a legislative proposal providing for such technical 
     and conforming amendments in the law as are required by the 
     provisions of this Act.

     SEC. 110. EFFECTIVE DATE; TRANSITION RULE.

       (a) In General.--Except as otherwise provided in this 
     title, this title and the amendments made by this title shall 
     take effect on October 1, 1995.
       (b) Transition Rule.--
       (1) State option to continue afdc program.--
       (A) 6-month extension.--A State may continue a State 
     program under parts A and F of title IV of the Social 
     Security Act, as in effect on September 30, 1995 (for 
     purposes of this paragraph, the ``State AFDC program'') until 
     March 31, 1996.
       (B) Reduction of fiscal year 1996 grant.--In the case of 
     any State opting to continue the State AFDC program pursuant 
     to subparagraph (A), the State family assistance grant paid 
     to such State under section 403(a) of the Social Security Act 
     (as added by section 101 and as in effect on and after 
     October 1, 1995) for fiscal year 1996 (after the termination 
     of the State AFDC program) shall be reduced by an amount 
     equal to the total Federal payment to such State under 
     section 403 of the Social Security Act (as in effect on 
     September 30, 1995) for such fiscal year.
       (2) Claims, actions, and proceedings.--The amendments made 
     by this title shall not apply with respect to--
       (A) powers, duties, functions, rights, claims, penalties, 
     or obligations applicable to aid, assistance, or services 
     provided before the effective date of this title under the 
     provisions amended; and
       (B) administrative actions and proceedings commenced before 
     such date, or authorized before such date to be commenced, 
     under such provisions.
       (c) Sunset.--The amendment made by section 101(b) shall be 
     effective only during the 5-year period beginning on October 
     1, 1995.
                 TITLE II--SUPPLEMENTAL SECURITY INCOME
                  Subtitle A--Eligibility Restrictions

     SEC. 201. DENIAL OF SUPPLEMENTAL SECURITY INCOME BENEFITS BY 
                   REASON OF DISABILITY TO DRUG ADDICTS AND 
                   ALCOHOLICS.

       (a) In General.--Section 1614(a)(3) (42 U.S.C. 1382c(a)(3)) 
     is amended by adding at the end the following:
       ``(I) Notwithstanding subparagraph (A), an individual shall 
     not be considered to be disabled for purposes of this title 
     if alcoholism or drug addiction would (but for this 
     subparagraph) be a contributing factor material to the 
     Commissioner's determination that the individual is 
     disabled.''.
       (b) Representative Payee Requirements.--
       (1) Section 1631(a)(2)(A)(ii)(II) (42 U.S.C. 
     1383(a)(2)(A)(ii)(II)) is amended to read as follows:
       ``(II) In the case of an individual eligible for benefits 
     under this title by reason of disability, if such individual 
     also has an alcoholism or drug addiction condition (as 
     determined by the Commissioner of Social Security), the 
     payment of such benefits to a representative payee shall be 
     deemed to serve the interest of the individual. In any case 
     in which such payment is so deemed under this subclause to 
     serve the interest of an individual, the Commissioner shall 
     include, in the individual's notification of such 
     eligibility, a notice that such alcoholism or drug addiction 
     condition accompanies the disability upon which such 
     eligibility is based and that the Commissioner is therefore 
     required to pay the individual's benefits to a representative 
     payee.''.
       (2) Section 1631(a)(2)(B)(vii) (42 U.S.C. 
     1383(a)(2)(B)(vii)) is amended by striking ``eligible for 
     benefits'' and all that follows through ``is disabled'' and 
     inserting ``described in subparagraph (A)(ii)(II)''.
       (3) Section 1631(a)(2)(B)(ix)(II) (42 U.S.C. 
     1383(a)(2)(B)(ix)(II)) is amended by striking all that 
     follows ``15 years, or'' and inserting ``described in 
     subparagraph (A)(ii)(II)''.
       (4) Section 1631(a)(2)(D)(i)(II) (42 U.S.C. 
     1383(a)(2)(D)(i)(II)) is amended by striking ``eligible for 
     benefits'' and all that follows through ``is disabled'' and 
     inserting ``described in subparagraph (A)(ii)(II)''.
       (c) Conforming Amendments.--
       (1) Section 1611(e) (42 U.S.C. 1382(e)) is amended by 
     striking paragraph (3).
       (2) Section 1634 (42 U.S.C. 1383c) is amended by striking 
     subsection (e).
       (3) Section 201(c)(1) of the Social Security Independence 
     and Program Improvements Act of 1994 (42 U.S.C. 425 note) is 
     amended--
       (A) by striking ``--'' and all that follows through ``(A)'' 
     the 1st place it appears;
       (B) by striking ``and'' the 3rd place it appears;
       (C) by striking subparagraph (B);
       (D) by striking ``either subparagraph (A) or subparagraph 
     (B)'' and inserting ``the preceding sentence''; and

[[Page S11653]]

       (E) by striking ``subparagraph (A) or (B)'' and inserting 
     ``the preceding sentence''.

     SEC. 202. LIMITED ELIGIBILITY OF NONCITIZENS FOR SSI 
                   BENEFITS.

       Paragraph (1) of section 1614(a) (42 U.S.C. 1382c(a)) is 
     amended--
       (1) in subparagraph (B)(i), by striking ``either'' and all 
     that follows through ``, or'' and inserting ``(I) a citizen; 
     (II) a noncitizen who is granted asylum under section 208 of 
     the Immigration and Nationality Act or whose deportation has 
     been withheld under section 243(h) of such Act for a period 
     of not more than 5 years after the date of arrival into the 
     United States; (III) a noncitizen who is admitted to the 
     United States as a refugee under section 207 of such Act for 
     not more than such 5-year period; (IV) a noncitizen, lawfully 
     present in any State (or any territory or possession of the 
     United States), who is a veteran (as defined in section 101 
     of title 38, United States Code) with a discharge 
     characterized as an honorable discharge and not on account of 
     alienage or who is the spouse or unmarried dependent child of 
     such veteran; or (V) a noncitizen who has worked sufficient 
     calendar quarters of coverage to be a fully insured 
     individual for benefits under title II, or''; and
       (2) by adding at the end the following new flush sentence:
     ``For purposes of subparagraph (B)(i)(IV), the determination 
     of whether a noncitizen is lawfully present in the United 
     States shall be made in accordance with regulations of the 
     Attorney General. A noncitizen shall not be considered to be 
     lawfully present in the United States for purposes of this 
     title merely because the noncitizen may be considered to be 
     permanently residing in the United States under color of law 
     for purposes of any particular program.''.
     SEC. 203. DENIAL OF SSI BENEFITS FOR 10 YEARS TO INDIVIDUALS 
                   FOUND TO HAVE FRAUDULENTLY MISREPRESENTED 
                   RESIDENCE IN ORDER TO OBTAIN BENEFITS 
                   SIMULTANEOUSLY IN 2 OR MORE STATES.

       Section 1614(a) (42 U.S.C. 1382c(a)) is amended by adding 
     at the end the following new paragraph:
       ``(5) An individual shall not be considered an eligible 
     individual for purposes of this title during the 10-year 
     period beginning on the date the individual is convicted in 
     Federal or State court of having made a fraudulent statement 
     or representation with respect to the place of residence of 
     the individual in order to receive assistance simultaneously 
     from 2 or more States under programs that are funded under 
     part A of title IV, title XIX, or the Food Stamp Act of 1977, 
     or benefits in 2 or more States under the supplemental 
     security income program under title XVI.''.

     SEC. 204. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS AND 
                   PROBATION AND PAROLE VIOLATORS.

       (a) In General.--Section 1611(e) (42 U.S.C. 1382(e)), as 
     amended by section 201(c)(1), is amended by inserting after 
     paragraph (2) the following new paragraph:
       ``(3) A person shall not be an eligible individual or 
     eligible spouse for purposes of this title with respect to 
     any month if during such month the person is--
       ``(A) fleeing to avoid prosecution, or custody or 
     confinement after conviction, under the laws of the place 
     from which the person flees, for a crime, or an attempt to 
     commit a crime, which is a felony under the laws of the place 
     from which the person flees, or which, in the case of the 
     State of New Jersey, is a high misdemeanor under the laws of 
     such State; or
       ``(B) violating a condition of probation or parole imposed 
     under Federal or State law.''.
       (b) Exchange of Information With Law Enforcement 
     Agencies.--Section 1631(e) (42 U.S.C. 1383(e)) is amended by 
     inserting after paragraph (3) the following new paragraph:
       ``(4) Notwithstanding any other provision of law, the 
     Commissioner shall furnish any Federal, State, or local law 
     enforcement officer, upon the request of the officer, with 
     the current address of any recipient of benefits under this 
     title, if the officer furnishes the agency with the name of 
     the recipient and notifies the agency that--
       ``(A) the recipient--
       ``(i) is fleeing to avoid prosecution, or custody or 
     confinement after conviction, under the laws of the place 
     from which the person flees, for a crime, or an attempt to 
     commit a crime, which is a felony under the laws of the place 
     from which the person flees, or which, in the case of the 
     State of New Jersey, is a high misdemeanor under the laws of 
     such State;
       ``(ii) is violating a condition of probation or parole 
     imposed under Federal or State law; or
       ``(iii) has information that is necessary for the officer 
     to conduct the officer's official duties; and
       ``(B) the location or apprehension of the recipient is 
     within the officer's official duties.''.

     SEC. 205. EFFECTIVE DATES; APPLICATION TO CURRENT RECIPIENTS.

       (a) Sections 201 and 202.--
       (1) In general.--Except as provided in paragraphs (2) and 
     (3), the amendments made by sections 201 and 202 shall apply 
     to applicants for benefits for months beginning on or after 
     the date of the enactment of this Act, without regard to 
     whether regulations have been issued to implement such 
     amendments.
       (2) Application to current recipients.--
       (A) Application and notice.--Notwithstanding any other 
     provision of law, in the case of an individual who is 
     receiving supplemental security income benefits under title 
     XVI of the Social Security Act as of the date of the 
     enactment of this Act and whose eligibility for such benefits 
     would terminate by reason of the amendments made by section 
     201 or 202, such amendments shall apply with respect to the 
     benefits of such individual for months beginning on or after 
     January 1, 1997, and the Commissioner of Social Security 
     shall so notify the individual not later than 90 days after 
     the date of the enactment of this Act.
       (B) Reapplication.--
       (i) In general.--Not later than 120 days after the date of 
     the enactment of this Act, each individual notified pursuant 
     to subparagraph (A) who desires to reapply for benefits under 
     title XVI of the Social Security Act, as amended by this 
     title, shall reapply to the Commissioner of Social Security.
       (ii) Determination of eligibility.--Not later than 1 year 
     after the date of the enactment of this Act, the Commissioner 
     of Social Security shall determine the eligibility of each 
     individual who reapplies for benefits under clause (i) 
     pursuant to the procedures of such title.
       (3) Additional application of payee representative 
     requirements.--The amendments made by section 201(b) shall 
     also apply--
       (A) in the case of any individual who is receiving 
     supplemental security income benefits under title XVI of the 
     Social Security Act as of the date of the enactment of this 
     Act, on and after the date of such individual's first 
     continuing disability review occurring after such date of 
     enactment, and
       (B) in the case of any individual who receives supplemental 
     security income benefits under title XVI of the Social 
     Security Act and has attained age 65, in such manner as 
     determined appropriate by the Commissioner of Social 
     Security.
       (b) Other Amendments.--The amendments made by sections 203 
     and 204 shall take effect on the date of the enactment of 
     this Act.
               Subtitle B--Benefits for Disabled Children

     SEC. 211. DEFINITION AND ELIGIBILITY RULES.

       (a) Definition of Childhood Disability.--Section 1614(a)(3) 
     (42 U.S.C. 1382c(a)(3)), as amended by section 201(a), is 
     amended--
       (1) in subparagraph (A), by striking ``An individual'' and 
     inserting ``Except as provided in subparagraph (C), an 
     individual'';
       (2) in subparagraph (A), by striking ``(or, in the case of 
     an individual under the age of 18, if he suffers from any 
     medically determinable physical or mental impairment of 
     comparable severity)'';
       (3) by redesignating subparagraphs (C) through (I) as 
     subparagraphs (D) through (J), respectively;
       (4) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) An individual under the age of 18 shall be considered 
     disabled for the purposes of this title if that individual 
     has a medically determinable physical or mental impairment, 
     which results in marked and severe functional limitations, 
     and which can be expected to result in death or which has 
     lasted or can be expected to last for a continuous period of 
     not less than 12 months.''; and
       (5) in subparagraph (F), as redesignated by paragraph (3), 
     by striking ``(D)'' and inserting ``(E)''.
       (b) Changes to Childhood SSI Regulations.--
       (1) Modification to medical criteria for evaluation of 
     mental and emotional disorders.--The Commissioner of Social 
     Security shall modify sections 112.00C.2. and 112.02B.2.c.(2) 
     of appendix 1 to subpart P of part 404 of title 20, Code of 
     Federal Regulations, to eliminate references to maladaptive 
     behavior in the domain of personal/behavorial function.
       (2) Discontinuance of individualized functional 
     assessment.--The Commissioner of Social Security shall 
     discontinue the individualized functional assessment for 
     children set forth in sections 416.924d and 416.924e of title 
     20, Code of Federal Regulations.
       (c) Effective Date; Regulations; Application to Current 
     Recipients.--
       (1) In general.--The amendments made by subsections (a) and 
     (b) shall apply to applicants for benefits for months 
     beginning on or after the date of the enactment of this Act, 
     without regard to whether regulations have been issued to 
     implement such amendments.
       (2) Regulations.--The Commissioner of Social Security shall 
     issue such regulations as the Commissioner determines to be 
     necessary to implement the amendments made by subsections (a) 
     and (b) not later than 60 days after the date of the 
     enactment of this Act.
       (3) Application to current recipients.--
       (A) Eligibility determinations.--Not later than 1 year 
     after the date of the enactment of this Act, the Commissioner 
     of Social Security shall redetermine the eligibility of any 
     individual under age 18 who is receiving supplemental 
     security income benefits based on a disability under title 
     XVI of the Social Security Act as of the date of the 
     enactment of this Act and whose eligibility for such benefits 
     may terminate by reason of the amendments made by subsection 
     (a) or (b). With respect to any redetermination under this 
     subparagraph--
       (i) section 1614(a)(4) of the Social Security Act (42 
     U.S.C. 1382c(a)(4)) shall not apply;
       (ii) the Commissioner of Social Security shall apply the 
     eligibility criteria for new applicants for benefits under 
     title XVI of such Act;

[[Page S11654]]

       (iii) the Commissioner shall give such redetermination 
     priority over all continuing eligibility reviews and other 
     reviews under such title; and
       (iv) such redetermination shall be counted as a review or 
     redetermination otherwise required to be made under section 
     208 of the Social Security Independence and Program 
     Improvements Act of 1994 or any other provision of title XVI 
     of the Social Security Act.
       (B) Grandfather provision.--The amendments made by 
     subsections (a) and (b), and the redetermination under 
     subparagraph (A), shall only apply with respect to the 
     benefits of an individual described in subparagraph (A) for 
     months beginning on or after January 1, 1997.
       (C) Notice.--Not later than 90 days after the date of the 
     enactment of this Act, the Commissioner of Social Security 
     shall notify an individual described in subparagraph (A) of 
     the provisions of this paragraph.

     SEC. 212. ELIGIBILITY REDETERMINATIONS AND CONTINUING 
                   DISABILITY REVIEWS.

       (a) Continuing Disability Reviews Relating to Certain 
     Children.--Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), 
     as redesignated by section 211(a)(3), is amended--
       (1) by inserting ``(i)'' after ``(H)''; and
       (2) by adding at the end the following new clause:
       ``(ii)(I) Not less frequently than once every 3 years, the 
     Commissioner shall review in accordance with paragraph (4) 
     the continued eligibility for benefits under this title of 
     each individual who has not attained 18 years of age and is 
     eligible for such benefits by reason of an impairment (or 
     combination of impairments) which may improve (or, which is 
     unlikely to improve, at the option of the Commissioner).
       ``(II) A parent or guardian of a recipient whose case is 
     reviewed under this clause shall present, at the time of 
     review, evidence demonstrating that the recipient is, and has 
     been, receiving treatment, to the extent considered medically 
     necessary and available, of the condition which was the basis 
     for providing benefits under this title.''.
       (b) Disability Eligibility Redeterminations Required for 
     SSI Recipients Who Attain 18 Years of Age.--
       (1) In general.--Section 1614(a)(3)(H) (42 U.S.C. 
     1382c(a)(3)(H)), as amended by subsection (a), is amended by 
     adding at the end the following new clause:
       ``(iii) If an individual is eligible for benefits under 
     this title by reason of disability for the month preceding 
     the month in which the individual attains the age of 18 
     years, the Commissioner shall redetermine such eligibility--
       ``(I) during the 1-year period beginning on the 
     individual's 18th birthday; and
       ``(II) by applying the criteria used in determining the 
     initial eligibility for applicants who have attained the age 
     of 18 years.
     With respect to a redetermination under this clause, 
     paragraph (4) shall not apply and such redetermination shall 
     be considered a substitute for a review or redetermination 
     otherwise required under any other provision of this 
     subparagraph during that 1-year period.''.
       (2) Conforming repeal.--Section 207 of the Social Security 
     Independence and Program Improvements Act of 1994 (42 U.S.C. 
     1382 note; 108 Stat. 1516) is hereby repealed.
       (c) Continuing Disability Review Required for Low Birth 
     Weight Babies.--Section 1614(a)(3)(H) (42 U.S.C. 
     1382c(a)(3)(H)), as amended by subsections (a) and (b), is 
     amended by adding at the end the following new clause:
       ``(iv)(I) Not later than 12 months after the birth of an 
     individual, the Commissioner shall review in accordance with 
     paragraph (4) the continuing eligibility for benefits under 
     this title by reason of disability of such individual whose 
     low birth weight is a contributing factor material to the 
     Commissioner's determination that the individual is disabled.
       ``(II) A review under subclause (I) shall be considered a 
     substitute for a review otherwise required under any other 
     provision of this subparagraph during that 12-month period.
       ``(III) A parent or guardian of a recipient whose case is 
     reviewed under this clause shall present, at the time of 
     review, evidence demonstrating that the recipient is, and has 
     been, receiving treatment, to the extent considered medically 
     necessary and available, of the condition which was the basis 
     for providing benefits under this title.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to benefits for months beginning on or after the 
     date of the enactment of this Act, without regard to whether 
     regulations have been issued to implement such amendments.

     SEC. 213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS.

       (a) Tightening of Representative Payee Requirements.--
       (1) Clarification of role.--Section 1631(a)(2)(B)(ii) (42 
     U.S.C. 1383(a)(2)(B)(ii)) is amended by striking ``and'' at 
     the end of subclause (II), by striking the period at the end 
     of subclause (IV) and inserting ``; and'', and by adding 
     after subclause (IV) the following new subclause:
       ``(V) advise such person through the notice of award of 
     benefits, and at such other times as the Commissioner of 
     Social Security deems appropriate, of specific examples of 
     appropriate expenditures of benefits under this title and the 
     proper role of a representative payee.''.
       (2) Documentation of expenditures required.--
       (A) In general.--Subparagraph (C)(i) of section 1631(a)(2) 
     (42 U.S.C. 1383(a)(2)) is amended to read as follows:
       ``(C)(i) In any case where payment is made to a 
     representative payee of an individual or spouse, the 
     Commissioner of Social Security shall--
       ``(I) require such representative payee to document 
     expenditures and keep contemporaneous records of transactions 
     made using such payment; and
       ``(II) implement statistically valid procedures for 
     reviewing a sample of such contemporaneous records in order 
     to identify instances in which such representative payee is 
     not properly using such payment.''.
       (B) Conforming amendment with respect to parent payees.--
     Clause (ii) of section 1631(a)(2)(C) (42 U.S.C. 
     1383(a)(2)(C)) is amended by striking ``Clause (i)'' and 
     inserting ``Subclauses (II) and (III) of clause (i)''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to benefits paid after the date of the enactment 
     of this Act.
       (b) Dedicated Savings Accounts.--
       (1) In general.--Section 1631(a)(2)(B) (42 U.S.C. 
     1383(a)(2)(B)) is amended by adding at the end the following 
     new clause:
       ``(xiv) Notwithstanding clause (x), the Commissioner of 
     Social Security may, at the request of the representative 
     payee, pay any lump sum payment for the benefit of a child 
     into a dedicated savings account that could only be used to 
     purchase for such child--
       ``(I) education and job skills training;
       ``(II) special equipment or housing modifications or both 
     specifically related to, and required by the nature of, the 
     child's disability; and
       ``(III) appropriate therapy and rehabilitation.''.
       (2) Disregard of trust funds.--Section 1613(a) (42 U.S.C. 
     1382b) is amended--
       (A) by striking ``and'' at the end of paragraph (9),
       (B) by striking the period at the end of paragraph (10) the 
     first place it appears and inserting a semicolon,
       (C) by redesignating paragraph (10) the second place it 
     appears as paragraph (11) and striking the period at the end 
     of such paragraph and inserting ``; and'', and
       (D) by inserting after paragraph (11), as so redesignated, 
     the following new paragraph:
       ``(12) all amounts deposited in, or interest credited to, a 
     dedicated savings account described in section 
     1631(a)(2)(B)(xiv).''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to payments made after the date of the enactment 
     of this Act.
   Subtitle C--Studies Regarding Supplemental Security Income Program

     SEC. 221. ANNUAL REPORT ON THE SUPPLEMENTAL SECURITY INCOME 
                   PROGRAM.

       Title XVI is amended by adding at the end the following new 
     section:

     ``SEC. 1636. ANNUAL REPORT ON PROGRAM.

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

     SEC. 222. IMPROVEMENTS TO DISABILITY EVALUATION.

       (a) Request for Comments.--
       (1) In general.--Not later than 60 days after the date of 
     the enactment of this Act, the Commissioner of Social 
     Security shall issue a request for comments in the Federal 
     Register regarding improvements to the disability evaluation 
     and determination procedures for individuals under age 18 to 
     ensure the comprehensive assessment of such individuals, 
     including--
       (A) additions to conditions which should be presumptively 
     disabling at birth or ages 0 through 3 years;
       (B) specific changes in individual listings in the Listing 
     of Impairments set forth in 

[[Page S11655]]
     appendix 1 of subpart P of part 404 of title 20, Code of Federal 
     Regulations;
       (C) improvements in regulations regarding determinations 
     based on regulations providing for medical and functional 
     equivalence to such Listing of Impairments, and consideration 
     of multiple impairments; and
       (D) any other changes to the disability determination 
     procedures.
       (2) Review and regulatory action.--The Commissioner of 
     Social Security shall promptly review such comments and issue 
     any regulations implementing any necessary changes not later 
     than 18 months after the date of the enactment of this Act.

     SEC. 223. STUDY OF DISABILITY DETERMINATION PROCESS.

       (a) In General.--Not later than 90 days after the date of 
     the enactment of this Act, and from funds otherwise 
     appropriated, the Commissioner of Social Security shall make 
     arrangements with the National Academy of Sciences, or other 
     independent entity, to conduct a study of the disability 
     determination process under titles II and XVI of the Social 
     Security Act. This study shall be undertaken in consultation 
     with professionals representing appropriate disciplines.
       (b) Study Components.--The study described in subsection 
     (a) shall include--
       (1) an initial phase examining the appropriateness of, and 
     making recommendations regarding--
       (A) the definitions of disability in effect on the date of 
     the enactment of this Act and the advantages and 
     disadvantages of alternative definitions; and
       (B) the operation of the disability determination process, 
     including the appropriate method of performing comprehensive 
     assessments of individuals under age 18 with physical and 
     mental impairments;
       (2) a second phase, which may be concurrent with the 
     initial phase, examining the validity, reliability, and 
     consistency with current scientific knowledge of the 
     standards and individual listings in the Listing of 
     Impairments set forth in appendix 1 of subpart P of part 404 
     of title 20, Code of Federal Regulations, and of related 
     evaluation procedures as promulgated by the Commissioner of 
     Social Security; and
       (3) such other issues as the applicable entity considers 
     appropriate.
       (c) Reports and Regulations.--
       (1) Reports.--The Commissioner of Social Security shall 
     request the applicable entity, to submit an interim report 
     and a final report of the findings and recommendations 
     resulting from the study described in this section to the 
     President and the Congress not later than 18 months and 24 
     months, respectively, from the date of the contract for such 
     study, and such additional reports as the Commissioner deems 
     appropriate after consultation with the applicable entity.
       (2) Regulations.--The Commissioner of Social Security shall 
     review both the interim and final reports, and shall issue 
     regulations implementing any necessary changes following each 
     report.

     SEC. 224. STUDY BY GENERAL ACCOUNTING OFFICE.

       Not later than January 1, 1998, the Comptroller General of 
     the United States shall study and report on the impact of the 
     amendments made by, and the provisions of, this title on the 
     supplemental security income program under title XVI of the 
     Social Security Act.
      Subtitle D--National Commission on the Future of Disability

     SEC. 231. ESTABLISHMENT.

       There is established a commission to be known as the 
     National Commission on the Future of Disability (referred to 
     in this subtitle as the ``Commission''), the expenses of 
     which shall be paid from funds otherwise appropriated for the 
     Social Security Administration.

     SEC. 232. DUTIES OF THE COMMISSION.

       (a) In General.--The Commission shall develop and carry out 
     a comprehensive study of all matters related to the nature, 
     purpose, and adequacy of all Federal programs serving 
     individuals with disabilities. In particular, the Commission 
     shall study the disability insurance program under title II 
     of the Social Security Act and the supplemental security 
     income program under title XVI of such Act.
       (b) Matters Studied.--The Commission shall prepare an 
     inventory of Federal programs serving individuals with 
     disabilities, and shall examine--
       (1) trends and projections regarding the size and 
     characteristics of the population of individuals with 
     disabilities, and the implications of such analyses for 
     program planning;
       (2) the feasibility and design of performance standards for 
     the Nation's disability programs;
       (3) the adequacy of Federal efforts in rehabilitation 
     research and training, and opportunities to improve the lives 
     of individuals with disabilities through all manners of 
     scientific and engineering research; and
       (4) the adequacy of policy research available to the 
     Federal Government, and what actions might be undertaken to 
     improve the quality and scope of such research.
       (c) Recommendations.--The Commission shall submit to the 
     appropriate committees of the Congress and to the President 
     recommendations and, as appropriate, proposals for 
     legislation, regarding--
       (1) which (if any) Federal disability programs should be 
     eliminated or augmented;
       (2) what new Federal disability programs (if any) should be 
     established;
       (3) the suitability of the organization and location of 
     disability programs within the Federal Government;
       (4) other actions the Federal Government should take to 
     prevent disabilities and disadvantages associated with 
     disabilities; and
       (5) such other matters as the Commission considers 
     appropriate.

     SEC. 233. MEMBERSHIP.

       (a) Number and Appointment.--
       (1) In general.--The Commission shall be composed of 15 
     members, of whom--
       (A) five shall be appointed by the President, of whom not 
     more than 3 shall be of the same major political party;
       (B) three shall be appointed by the Majority Leader of the 
     Senate;
       (C) two shall be appointed by the Minority Leader of the 
     Senate;
       (D) three shall be appointed by the Speaker of the House of 
     Representatives; and
       (E) two shall be appointed by the Minority Leader of the 
     House of Representatives.
       (2) Representation.--The Commission members shall be chosen 
     based on their education, training, or experience. In 
     appointing individuals as members of the Commission, the 
     President and the Majority and Minority Leaders of the Senate 
     and the Speaker and Minority Leader of the House of 
     Representatives shall seek to ensure that the membership of 
     the Commission reflects the diversity of individuals with 
     disabilities in the United States.
       (b) Comptroller General.--The Comptroller General shall 
     serve on the Commission as an ex officio member of the 
     Commission to advise and oversee the methodology and approach 
     of the study of the Commission.
       (c) Prohibition Against Officer or Employee.--No officer or 
     employee of any government shall be appointed under 
     subsection (a).
       (d) Deadline for Appointment; Term of Appointment.--Members 
     of the Commission shall be appointed not later than 60 days 
     after the date of the enactment of this Act. The members 
     shall serve on the Commission for the life of the Commission.
       (e) Meetings.--The Commission shall locate its headquarters 
     in the District of Columbia, and shall meet at the call of 
     the Chairperson, but not less than 4 times each year during 
     the life of the Commission.
       (f) Quorum.--Ten members of the Commission shall constitute 
     a quorum, but a lesser number may hold hearings.
       (g) Chairperson and Vice Chairperson.--Not later than 15 
     days after the members of the Commission are appointed, such 
     members shall designate a Chairperson and Vice Chairperson 
     from among the members of the Commission.
       (h) Continuation of Membership.--If a member of the 
     Commission becomes an officer or employee of any government 
     after appointment to the Commission, the individual may 
     continue as a member until a successor member is appointed.
       (i) Vacancies.--A vacancy on the Commission shall be filled 
     in the manner in which the original appointment was made not 
     later than 30 days after the Commission is given notice of 
     the vacancy.
       (j) Compensation.--Members of the Commission shall receive 
     no additional pay, allowances, or benefits by reason of their 
     service on the Commission.
       (k) Travel Expenses.--Each member of the Commission shall 
     receive travel expenses, including per diem in lieu of 
     subsistence, in accordance with sections 5702 and 5703 of 
     title 5, United States Code.

     SEC. 234. STAFF AND SUPPORT SERVICES.

       (a) Director.--
       (1) Appointment.--Upon consultation with the members of the 
     Commission, the Chairperson shall appoint a Director of the 
     Commission.
       (2) Compensation.--The Director shall be paid the rate of 
     basic pay for level V of the Executive Schedule.
       (b) Staff.--With the approval of the Commission, the 
     Director may appoint such personnel as the Director considers 
     appropriate.
       (c) Applicability of Civil Service Laws.--The staff of the 
     Commission shall be appointed without regard to the 
     provisions of title 5, United States Code, governing 
     appointments in the competitive service, and shall be paid 
     without regard to the provisions of chapter 51 and subchapter 
     III of chapter 53 of such title relating to classification 
     and General Schedule pay rates.
       (d) Experts and Consultants.--With the approval of the 
     Commission, the Director may procure temporary and 
     intermittent services under section 3109(b) of title 5, 
     United States Code.
       (e) Staff of Federal Agencies.--Upon the request of the 
     Commission, the head of any Federal agency may detail, on a 
     reimbursable basis, any of the personnel of such agency to 
     the Commission to assist in carrying out the duties of the 
     Commission under this subtitle.
       (f) Other Resources.--The Commission shall have reasonable 
     access to materials, resources, statistical data, and other 
     information from the Library of Congress and agencies and 
     elected representatives of the executive and legislative 
     branches of the Federal Government. The Chairperson of the 
     Commission shall make requests for such access in writing 
     when necessary.
       (g) Physical Facilities.--The Administrator of the General 
     Services Administration shall locate suitable office space 
     for the operation of the Commission. The facilities shall 
     serve as the headquarters of the Commission and shall include 
     all necessary 

[[Page S11656]]
     equipment and incidentals required for proper functioning of the 
     Commission.

     SEC. 235. POWERS OF COMMISSION.

       (a) Hearings.--The Commission may conduct public hearings 
     or forums at the discretion of the Commission, at any time 
     and place the Commission is able to secure facilities and 
     witnesses, for the purpose of carrying out the duties of the 
     Commission under this subtitle.
       (b) Delegation of Authority.--Any member or agent of the 
     Commission may, if authorized by the Commission, take any 
     action the Commission is authorized to take by this section.
       (c) Information.--The Commission may secure directly from 
     any Federal agency information necessary to enable the 
     Commission to carry out its duties under this subtitle. Upon 
     request of the Chairperson or Vice Chairperson of the 
     Commission, the head of a Federal agency shall furnish the 
     information to the Commission to the extent permitted by law.
       (d) Gifts, Bequests, and Devises.--The Commission may 
     accept, use, and dispose of gifts, bequests, or devises of 
     services or property, both real and personal, for the purpose 
     of aiding or facilitating the work of the Commission. Gifts, 
     bequests, or devises of money and proceeds from sales of 
     other property received as gifts, bequests, or devises shall 
     be deposited in the Treasury and shall be available for 
     disbursement upon order of the Commission.
       (e) Mails.--The Commission may use the United States mails 
     in the same manner and under the same conditions as other 
     Federal agencies.
     SEC. 236. REPORTS.

       (a) Interim Report.--Not later than 1 year prior to the 
     date on which the Commission terminates pursuant to section 
     237, the Commission shall submit an interim report to the 
     President and to the Congress. The interim report shall 
     contain a detailed statement of the findings and conclusions 
     of the Commission, together with the Commission's 
     recommendations for legislative and administrative action, 
     based on the activities of the Commission.
       (b) Final Report.--Not later than the date on which the 
     Commission terminates, the Commission shall submit to the 
     Congress and to the President a final report containing--
       (1) a detailed statement of final findings, conclusions, 
     and recommendations; and
       (2) an assessment of the extent to which recommendations of 
     the Commission included in the interim report under 
     subsection (a) have been implemented.
       (c) Printing and Public Distribution.--Upon receipt of each 
     report of the Commission under this section, the President 
     shall--
       (1) order the report to be printed; and
       (2) make the report available to the public upon request.

     SEC. 237. TERMINATION.

       The Commission shall terminate on the date that is 2 years 
     after the date on which the members of the Commission have 
     met and designated a Chairperson and Vice Chairperson.
               Subtitle E--State Supplementation Programs

     SEC. 241. REPEAL OF MAINTENANCE OF EFFORT REQUIREMENTS 
                   APPLICABLE TO OPTIONAL STATE PROGRAMS FOR 
                   SUPPLEMENTATION OF SSI BENEFITS.

       (a) In General.--Section 1618 (42 U.S.C. 1382g) is 
     repealed.
       (b) Effective Date.--The repeal made by subsection (a) 
     shall apply with respect to calendar quarters beginning after 
     September 30, 1995.
                     TITLE III--FOOD STAMP PROGRAM
                     Subtitle A--Food Stamp Reform

     SEC. 301. CERTIFICATION PERIOD.

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

     SEC. 302. TREATMENT OF CHILDREN LIVING AT HOME.

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

     SEC. 303. OPTIONAL ADDITIONAL CRITERIA FOR SEPARATE HOUSEHOLD 
                   DETERMINATIONS.

       (a) In General.--Section 3(i) of the Food Stamp Act of 1977 
     (7 U.S.C. 2012(i)) is amended by inserting after the third 
     sentence the following: ``Notwithstanding the preceding 
     sentences, a State may establish criteria that prescribe when 
     individuals who live together, and who would be allowed to 
     participate as separate households under the preceding 
     sentences, shall be considered a single household, without 
     regard to the common purchase of food and preparation of 
     meals.''.
       (b) Conforming Amendment.--The second sentence of section 
     5(a) of the Act (7 U.S.C. 2014(a)) is amended by striking 
     ``the third sentence of section 3(i)'' and inserting ``the 
     fourth sentence of section 3(i)''.

     SEC. 304. ADJUSTMENT OF THRIFTY FOOD PLAN.

       The second sentence of section 3(o) of the Food Stamp Act 
     of 1977 (7 U.S.C. 2012(o)) is amended--
       (1) by striking ``shall (1) make'' and inserting the 
     following: ``shall--
       ``(1) make'';
       (2) by striking ``scale, (2) make'' and inserting ``scale;
       ``(2) make'';
       (3) by striking ``Alaska, (3) make'' and inserting the 
     following: ``Alaska;
       ``(3) make''; and
       (4) by striking ``Columbia, (4) through'' and all that 
     follows through the end of the subsection and inserting the 
     following: ``Columbia; and
       ``(4) on October 1, 1995, and each October 1 thereafter, 
     adjust the cost of the diet to reflect the cost of the diet, 
     in the preceding June, and round the result to the nearest 
     lower dollar increment for each household size, except that 
     on October 1, 1995, the Secretary may not reduce the cost of 
     the diet in effect on September 30, 1995.''.

     SEC. 305. DEFINITION OF HOMELESS INDIVIDUAL.

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

     SEC. 306. STATE OPTIONS IN REGULATIONS.

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

     SEC. 307. EARNINGS OF STUDENTS.

       Section 5(d)(7) of the Food Stamp Act of 1977 (7 U.S.C. 
     2014(d)(7)) is amended by striking ``21'' and inserting 
     ``19''.

     SEC. 308. ENERGY ASSISTANCE.

       (a) In General.--Section 5(d) of the Food Stamp Act of 1977 
     (7 U.S.C. 2014(d)) is amended--
       (1) by striking paragraph (11); and
       (2) by redesignating paragraphs (12) through (15) as 
     paragraphs (11) through (14), respectively.
       (b) Conforming Amendments.--
       (1) Section 5(k) of the Act (7 U.S.C. 2014(k)) is amended--
       (A) in paragraph (1)--
       (i) in subparagraph (A), by striking ``plan for aid to 
     families with dependent children approved'' and inserting 
     ``program funded''; and
       (ii) in subparagraph (B), by striking ``, not including 
     energy or utility-cost assistance,''; and
       (B) in paragraph (2)--
       (i) by striking subparagraph (C); and
       (ii) by redesignating subparagraphs (D) through (H) as 
     subparagraphs (C) through (G), respectively;
       (C) by adding at the end the following:
       ``(4) Third party energy assistance payments.--
       ``(A) Energy assistance payments.--For purposes of 
     subsection (d)(1), a payment made under a Federal or State 
     law to provide energy assistance to a household shall be 
     considered money payable directly to the household.
       ``(B) Energy assistance expenses.--For purposes of 
     subsection (e)(7), an expense paid on behalf of a household 
     under a Federal or State law to provide energy assistance 
     shall be considered an out-of-pocket expense incurred and 
     paid by the household.''.
       (2) Section 2605(f) of the Low-Income Home Energy 
     Assistance Act of 1981 (42 U.S.C. 8624(f)) is amended--
       (A) by striking ``(f)(1) Notwithstanding'' and inserting 
     ``(f) Notwithstanding'';
       (B) in paragraph (1), by striking ``food stamps,''; and
       (C) by striking paragraph (2).

     SEC. 309. DEDUCTIONS FROM INCOME.

       (a) In General.--Section 5 of the Food Stamp Act of 1977 (7 
     U.S.C. 2014) is amended by striking subsection (e) and 
     inserting the following:
       ``(e) Deductions From Income.--
       ``(1) Standard deduction.--
       ``(A) In general.--The Secretary shall allow a standard 
     deduction for each household in the 48 contiguous States and 
     the District of Columbia, Alaska, Hawaii, Guam, and the 
     Virgin Islands of the United States of--
       ``(i) for fiscal year 1995, $134, $229, $189, $269, and 
     $118, respectively;
       ``(ii) for fiscal year 1996, $132, $225, $186, $265, and 
     $116, respectively;
       ``(iii) for fiscal year 1997, $130, $222, $183, $261, and 
     $114, respectively;
       ``(iv) for fiscal year 1998, $128, $218, $180, $257, and 
     $112, respectively;
       ``(v) for fiscal year 1999, $126, $215, $177, $252, and 
     $111, respectively; and
       ``(vi) for fiscal year 2000, $124, $211, $174, $248, and 
     $109, respectively.
       ``(B) Adjustment for inflation.--On October 1, 2000, and 
     each October 1 thereafter, the Secretary shall adjust the 
     standard deduction to the nearest lower dollar increment to 
     reflect changes in the Consumer Price Index for all urban 
     consumers published by the Bureau of Labor Statistics, for 
     items other than food, for the 12-month period ending the 
     preceding June 30.
       ``(2) Earned income deduction.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a household with earned income shall be allowed a deduction 
     of 20 percent of all earned income (other than income 
     excluded by subsection (d)), to compensate for taxes, other 
     mandatory deductions from salary, and work expenses.
       ``(B) Exception.--The deduction described in subparagraph 
     (A) shall not be allowed with respect to determining an 
     overissuance due to the failure of a household to report 
     earned income in a timely manner.
       ``(3) Dependent care deduction.--

[[Page S11657]]

       ``(A) In general.--A household shall be entitled, with 
     respect to expenses (other than excluded expenses described 
     in subparagraph (B)) for dependent care, to a dependent care 
     deduction, the maximum allowable level of which shall be $200 
     per month for each dependent child under 2 years of age and 
     $175 per month for each other dependent, for the actual cost 
     of payments necessary for the care of a dependent if the care 
     enables a household member to accept or continue employment, 
     or training or education that is preparatory for employment.
       ``(B) Excluded expenses.--The excluded expenses referred to 
     in subparagraph (A) are--
       ``(i) expenses paid on behalf of the household by a third 
     party;
       ``(ii) amounts made available and excluded for the expenses 
     referred to in subparagraph (A) under subsection (d)(3); and
       ``(iii) expenses that are paid under section 6(d)(4).
       ``(4) Deduction for child support payments.--
       ``(A) In general.--A household shall be entitled to a 
     deduction for child support payments made by a household 
     member to or for an individual who is not a member of the 
     household if the household member is legally obligated to 
     make the payments.
       ``(B) Methods for determining amount.--The Secretary may 
     prescribe by regulation the methods, including calculation on 
     a retrospective basis, that a State agency shall use to 
     determine the amount of the deduction for child support 
     payments.
       ``(5) Homeless shelter deduction.--A State agency may 
     develop a standard homeless shelter deduction, which shall 
     not exceed $139 per month, for such expenses as may 
     reasonably be expected to be incurred by households in which 
     all members are homeless individuals but are not receiving 
     free shelter throughout the month. A State agency that 
     develops the deduction may use the deduction in determining 
     eligibility and allotments for the households, except that 
     the State agency may prohibit the use of the deduction for 
     households with extremely low shelter costs.
       ``(6) Excess medical expense deduction.--
       ``(A) In general.--A household containing an elderly or 
     disabled member shall be entitled, with respect to expenses 
     other than expenses paid on behalf of the household by a 
     third party, to an excess medical expense deduction for the 
     portion of the actual costs of allowable medical expenses, 
     incurred by the elderly or disabled member, exclusive of 
     special diets, that exceeds $35 per month.
       ``(B) Method of claiming deduction.--
       ``(i) In general.--A State agency shall offer an eligible 
     household under subparagraph (A) a method of claiming a 
     deduction for recurring medical expenses that are initially 
     verified under the excess medical expense deduction in lieu 
     of submitting information or verification on actual expenses 
     on a monthly basis.
       ``(ii) Method.--The method described in clause (i) shall--

       ``(I) be designed to minimize the burden for the eligible 
     elderly or disabled household member choosing to deduct the 
     recurrent medical expenses of the member pursuant to the 
     method;
       ``(II) rely on reasonable estimates of the expected medical 
     expenses of the member for the certification period 
     (including changes that can be reasonably anticipated based 
     on available information about the medical condition of the 
     member, public or private medical insurance coverage, and the 
     current verified medical expenses incurred by the member); 
     and
       ``(III) not require further reporting or verification of a 
     change in medical expenses if such a change has been 
     anticipated for the certification period.

       ``(7) Excess shelter expense deduction.--
       ``(A) In general.--A household shall be entitled, with 
     respect to expenses other than expenses paid on behalf of the 
     household by a third party, to an excess shelter expense 
     deduction to the extent that the monthly amount expended by a 
     household for shelter exceeds an amount equal to 50 percent 
     of monthly household income after all other applicable 
     deductions have been allowed.
       ``(B) Maximum amount of deduction.--
       ``(i) Prior to september 30, 1995.--In the case of a 
     household that does not contain an elderly or disabled 
     individual, during the 15-month period ending September 30, 
     1995, the excess shelter expense deduction shall not exceed--

       ``(I) in the 48 contiguous States and the District of 
     Columbia, $231 per month; and
       ``(II) in Alaska, Hawaii, Guam, and the Virgin Islands of 
     the United States, $402, $330, $280, and $171 per month, 
     respectively.

       ``(ii) After september 30, 1995.--In the case of a 
     household that does not contain an elderly or disabled 
     individual, during the 15-month period ending December 31, 
     1996, the excess shelter expense deduction shall not exceed--

       ``(I) in the 48 contiguous States and the District of 
     Columbia, $247 per month; and
       ``(II) in Alaska, Hawaii, Guam, and the Virgin Islands of 
     the United States, $429, $353, $300, and $182 per month, 
     respectively.

       ``(C) Standard utility allowance.--
       ``(i) In general.--In computing the excess shelter expense 
     deduction, a State agency may use a standard utility 
     allowance in accordance with regulations promulgated by the 
     Secretary, except that a State agency may use an allowance 
     that does not fluctuate within a year to reflect seasonal 
     variations.
       ``(ii) Restrictions on heating and cooling expenses.--An 
     allowance for a heating or cooling expense may not be used in 
     the case of a household that--

       ``(I) does not incur a heating or cooling expense, as the 
     case may be;
       ``(II) does incur a heating or cooling expense but is 
     located in a public housing unit that has central utility 
     meters and charges households, with regard to the expense, 
     only for excess utility costs; or
       ``(III) shares the expense with, and lives with, another 
     individual not participating in the food stamp program, 
     another household participating in the food stamp program, or 
     both, unless the allowance is prorated between the household 
     and the other individual, household, or both.

       ``(iii) Mandatory allowance.--

       ``(I) In general.--A State agency may make the use of a 
     standard utility allowance mandatory for all households with 
     qualifying utility costs if--

       ``(aa) the State agency has developed 1 or more standards 
     that include the cost of heating and cooling and 1 or more 
     standards that do not include the cost of heating and 
     cooling; and
       ``(bb) the Secretary finds that the standards will not 
     result in an increased cost to the Secretary.

       ``(II) Household election.--A State agency that has not 
     made the use of a standard utility allowance mandatory under 
     subclause (I) shall allow a household to switch, at the end 
     of a certification period, between the standard utility 
     allowance and a deduction based on the actual utility costs 
     of the household.

       ``(iv) Availability of allowance to recipients of energy 
     assistance.--

       ``(I) In general.--Subject to subclause (II), if a State 
     agency elects to use a standard utility allowance that 
     reflects heating or cooling costs, the standard utility 
     allowance shall be made available to households receiving a 
     payment, or on behalf of which a payment is made, under the 
     Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8621 
     et seq.) or other similar energy assistance program, if the 
     household still incurs out-of-pocket heating or cooling 
     expenses in excess of any assistance paid on behalf of the 
     household to an energy provider.
       ``(II) Separate allowance.--A State agency may use a 
     separate standard utility allowance for households on behalf 
     of which a payment described in subclause (I) is made, but 
     may not be required to do so.
       ``(III) States not electing to use separate allowance.--A 
     State agency that does not elect to use a separate allowance 
     but makes a single standard utility allowance available to 
     households incurring heating or cooling expenses (other than 
     a household described in subclause (I) or (II) of 
     subparagraph (C)(ii)) may not be required to reduce the 
     allowance due to the provision (directly or indirectly) of 
     assistance under the Low-Income Home Energy Assistance Act of 
     1981 (42 U.S.C. 8621 et seq.).
       ``(IV) Proration of assistance.--For the purpose of the 
     food stamp program, assistance provided under the Low-Income 
     Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.) 
     shall be considered to be prorated over the entire heating or 
     cooling season for which the assistance was provided.''.

       (b) Conforming Amendment.--Section 11(e)(3) of the Act (7 
     U.S.C. 2020(e)(3)) is amended by striking ``. Under rules 
     prescribed'' and all that follows through ``verifies higher 
     expenses''.

     SEC. 310. AMOUNT OF VEHICLE ASSET LIMITATION.

       The first sentence of section 5(g)(2) of the Food Stamp Act 
     of 1977 (7 U.S.C. 2014(g)(2)) is amended by striking 
     ``through September 30, 1995'' and all that follows through 
     ``such date and on'' and inserting ``and shall be adjusted on 
     October 1, 1996, and''.

     SEC. 311. BENEFITS FOR ALIENS.

       Section 5(i) of the Food Stamp Act of 1977 (7 U.S.C. 
     2014(i)) is amended--
       (1) in the first sentence of paragraph (1)--
       (A) by inserting ``or who executed such an affidavit or 
     similar agreement to enable the individual to lawfully remain 
     in the United States,'' after ``respect to such 
     individual,''; and
       (B) by striking ``for a period'' and all that follows 
     through the period at the end and inserting ``until the end 
     of the period ending on the later of the date agreed to in 
     the affidavit or agreement or the date that is 5 years after 
     the date on which the individual was first lawfully admitted 
     into the United States following the execution of the 
     affidavit or agreement.''; and
       (2) in paragraph (2)--
       (A) in subparagraph (C)(i), by striking ``of three years 
     after entry into the United States'' and inserting 
     ``determined under paragraph (1)''; and
       (B) in subparagraph (D), by striking ``of three years after 
     such alien's entry into the United States'' and inserting 
     ``determined under paragraph (1)''.

     SEC. 312. DISQUALIFICATION.

       (a) In General.--Section 6(d) of the Food Stamp Act of 1977 
     (7 U.S.C. 2015(d)) is amended by striking ``(d)(1) Unless 
     otherwise exempted by the provisions'' and all that follows 
     through the end of paragraph (1) and inserting the following:
       ``(d) Conditions of Participation.--
       ``(1) Work requirements.--
       ``(A) In general.--No physically and mentally fit 
     individual over the age of 15 and under the age of 60 shall 
     be eligible to participate in the food stamp program if the 
     individual--

[[Page S11658]]

       ``(i) refuses, at the time of application and every 12 
     months thereafter, to register for employment in a manner 
     prescribed by the Secretary;
       ``(ii) refuses without good cause to participate in an 
     employment and training program under paragraph (4), to the 
     extent required by the State agency;
       ``(iii) refuses without good cause to accept an offer of 
     employment, at a site or plant not subject to a strike or 
     lockout at the time of the refusal, at a wage not less than 
     the higher of--

       ``(I) the applicable Federal or State minimum wage; or
       ``(II) 80 percent of the wage that would have governed had 
     the minimum hourly rate under section 6(a)(1) of the Fair 
     Labor Standards Act of 1938 (29 U.S.C. 206(a)(1)) been 
     applicable to the offer of employment;

       ``(iv) refuses without good cause to provide a State agency 
     with sufficient information to allow the State agency to 
     determine the employment status or the job availability of 
     the individual;
       ``(v) voluntarily and without good cause--

       ``(I) quits a job; or
       ``(II) reduces work effort and, after the reduction, the 
     individual is working less than 30 hours per week; or

       ``(vi) fails to comply with section 20.
       ``(B) Household ineligibility.--If an individual who is the 
     head of a household becomes ineligible to participate in the 
     food stamp program under subparagraph (A), the household 
     shall, at the option of the State agency, become ineligible 
     to participate in the food stamp program for a period, 
     determined by the State agency, that does not exceed the 
     lesser of--
       ``(i) the duration of the ineligibility of the individual 
     determined under subparagraph (C); or
       ``(ii) 180 days.
       ``(C) Duration of ineligibility.--
       ``(i) First violation.--The first time that an individual 
     becomes ineligible to participate in the food stamp program 
     under subparagraph (A), the individual shall remain 
     ineligible until the later of--

       ``(I) the date the individual becomes eligible under 
     subparagraph (A);
       ``(II) the date that is 1 month after the date the 
     individual became ineligible; or
       ``(III) a date determined by the State agency that is not 
     later than 3 months after the date the individual became 
     ineligible.

       ``(ii) Second violation.--The second time that an 
     individual becomes ineligible to participate in the food 
     stamp program under subparagraph (A), the individual shall 
     remain ineligible until the later of--

       ``(I) the date the individual becomes eligible under 
     subparagraph (A);
       ``(II) the date that is 3 months after the date the 
     individual became ineligible; or
       ``(III) a date determined by the State agency that is not 
     later than 6 months after the date the individual became 
     ineligible.

       ``(iii) Third or subsequent violation.--The third or 
     subsequent time that an individual becomes ineligible to 
     participate in the food stamp program under subparagraph (A), 
     the individual shall remain ineligible until the later of--

       ``(I) the date the individual becomes eligible under 
     subparagraph (A);
       ``(II) the date that is 6 months after the date the 
     individual became ineligible;
       ``(III) a date determined by the State agency; or
       ``(IV) at the option of the State agency, permanently.

       ``(D) Administration.--
       ``(i) Good cause.--The Secretary shall determine the 
     meaning of good cause for the purpose of this paragraph.
       ``(ii) Voluntary quit.--The Secretary shall determine the 
     meaning of voluntarily quitting and reducing work effort for 
     the purpose of this paragraph.
       ``(iii) Determination by state agency.--

       ``(I) In general.--Subject to subclause (II) and clauses 
     (i) and (ii), a State agency shall determine--

       ``(aa) the meaning of any term in subparagraph (A);
       ``(bb) the procedures for determining whether an individual 
     is in compliance with a requirement under subparagraph (A); 
     and
       ``(cc) whether an individual is in compliance with a 
     requirement under subparagraph (A).

       ``(II) Not less restrictive.--A State agency may not 
     determine a meaning, procedure, or determination under 
     subclause (I) to be less restrictive than a comparable 
     meaning, procedure, or determination under a State program 
     funded under part A of title IV of the Social Security Act 
     (42 U.S.C. 601 et seq.).

       ``(iv) Strike against the government.--For the purpose of 
     subparagraph (A)(v), an employee of the Federal Government, a 
     State, or a political subdivision of a State, who is 
     dismissed for participating in a strike against the Federal 
     Government, the State, or the political subdivision of the 
     State shall be considered to have voluntarily quit without 
     good cause.
       ``(v) Selecting a head of household.--

       ``(I) In general.--For the purpose of this paragraph, the 
     State agency shall allow the household to select any adult 
     parent of a child in the household as the head of the 
     household if all adult household members making application 
     under the food stamp program agree to the selection.
       ``(II) Time for making designation.--A household may 
     designate the head of the household under subclause (I) each 
     time the household is certified for participation in the food 
     stamp program, but may not change the designation during a 
     certification period unless there is a change in the 
     composition of the household.

       ``(vi) Change in head of household.--If the head of a 
     household leaves the household during a period in which the 
     household is ineligible to participate in the food stamp 
     program under subparagraph (B)--

       ``(I) the household shall, if otherwise eligible, become 
     eligible to participate in the food stamp program; and
       ``(II) if the head of the household becomes the head of 
     another household, the household that becomes headed by the 
     individual shall become ineligible to participate in the food 
     stamp program for the remaining period of ineligibility.''.

       (b) Conforming Amendment.--
       (1) The second sentence of section 17(b)(2) of the Act (7 
     U.S.C. 2026(b)(2)) is amended by striking ``6(d)(1)(i)'' and 
     inserting ``6(d)(1)(A)(i)''.
       (2) Section 20 of the Act (7 U.S.C. 2029) is amended by 
     striking subsection (f) and inserting the following:
       ``(f) Disqualification.--An individual or a household may 
     become ineligible under section 6(d)(1) to participate in the 
     food stamp program for failing to comply with this 
     section.''.

     SEC. 313. CARETAKER EXEMPTION.

       Section 6(d)(2) of the Food Stamp Act of 1977 (7 U.S.C. 
     2015(d)(2)) is amended by striking subparagraph (B) and 
     inserting the following: ``(B) a parent or other member of a 
     household with responsibility for the care of (i) a dependent 
     child under the age of 6 or any lower age designated by the 
     State agency that is not under the age of 1, or (ii) an 
     incapacitated person;''.

     SEC. 314. EMPLOYMENT AND TRAINING.

       (a) In General.--Section 6(d)(4) of the Food Stamp Act of 
     1977 (7 U.S.C. 2015(d)(4)) is amended--
       (1) in subparagraph (A)--
       (A) by striking ``Not later than April 1, 1987, each'' and 
     inserting ``Each'';
       (B) by inserting ``work,'' after ``skills, training,''; and
       (C) by adding at the end the following: ``Each component of 
     an employment and training program carried out under this 
     paragraph shall be delivered through the statewide workforce 
     development system established in section 711 of the Work 
     Opportunity Act of 1995, unless the component is not 
     available locally through the statewide workforce development 
     system.'';
       (2) in subparagraph (B)--
       (A) in the matter preceding clause (i), by striking the 
     colon at the end and inserting the following: ``, except that 
     the State agency shall retain the option to apply employment 
     requirements prescribed under this subparagraph to a program 
     applicant at the time of application:'';
       (B) in clause (i), by striking ``with terms and 
     conditions'' and all that follows through ``time of 
     application''; and
       (C) in clause (iv)--
       (i) by striking subclauses (I) and (II); and
       (ii) by redesignating subclauses (III) and (IV) as 
     subclauses (I) and (II), respectively;
       (3) in subparagraph (D)--
       (A) in clause (i), by striking ``to which the application'' 
     and all that follows through ``30 days or less'';
       (B) in clause (ii), by striking ``but with respect'' and 
     all that follows through ``child care''; and
       (C) in clause (iii), by striking ``, on the basis of'' and 
     all that follows through ``clause (ii)'' and inserting ``the 
     exemption continues to be valid'';
       (4) in subparagraph (E), by striking the third sentence;
       (5) in subparagraph (G)--
       (A) by striking ``(G)(i) The State'' and inserting ``(G) 
     The State''; and
       (B) by striking clause (ii);
       (6) in subparagraph (H), by striking ``(H)(i) The 
     Secretary'' and all that follows through ``(ii) Federal 
     funds'' and inserting ``(H) Federal funds'';
       (7) in subparagraph (I)(i)(II), by striking ``, or was in 
     operation,'' and all that follows through ``Social Security 
     Act'' and inserting the following: ``), except that no such 
     payment or reimbursement shall exceed the applicable local 
     market rate'';
       (8)(A) by striking subparagraphs (K) and (L) and inserting 
     the following:
       ``(K) Limitation on funding.--Notwithstanding any other 
     provision of this paragraph, the amount of funds a State 
     agency uses to carry out this paragraph (including under 
     subparagraph (I)) for participants who are receiving benefits 
     under a State program funded under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) shall not exceed 
     the amount of funds the State agency used in fiscal year 1995 
     to carry out this paragraph for participants who were 
     receiving benefits in fiscal year 1995 under a State program 
     funded under part A of title IV of the Act (42 U.S.C. 601 et 
     seq.).''; and
       (B) by redesignating subparagraphs (M) and (N) as 
     subparagraphs (L) and (M), respectively; and
       (9) in subparagraph (L) (as redesignated by paragraph 
     (8)(B))--
       (A) by striking ``(L)(i) The Secretary'' and inserting 
     ``(L) The Secretary''; and
       (B) by striking clause (ii).
       (b) Effective Date.--The amendment made by subsection 
     (a)(1)(C) shall take effect--

[[Page S11659]]

       (1) in a State described in section 815(b)(1), on July 1, 
     1997; and
       (2) in any other State, on July 1, 1998.
       (c) Funding.--Section 16(h) of the Act (7 U.S.C. 2025(h)) 
     is amended by striking ``(h)(1)(A) The Secretary'' and all 
     that follows through the end of paragraph (1) and inserting 
     the following:
       ``(h) Funding of Employment and Training Programs.--
       ``(1) In general.--
       ``(A) Amounts.--To carry out employment and training 
     programs, the Secretary shall reserve for allocation to State 
     agencies from funds made available for each fiscal year under 
     section 18(a)(1) the amount of--
       ``(i) for fiscal year 1996, $77,000,000;
       ``(ii) for fiscal year 1997, $80,000,000;
       ``(iii) for fiscal year 1998, $83,000,000;
       ``(iv) for fiscal year 1999, $86,000,000;
       ``(v) for fiscal year 2000, $89,000,000;
       ``(vi) for fiscal year 2001, $92,000,000; and
       ``(vii) for fiscal year 2002, $95,000,000.
       ``(B) Allocation.--The Secretary shall allocate the amounts 
     reserved under subparagraph (A) among the State agencies 
     using a reasonable formula (as determined by the Secretary) 
     that gives consideration to the population in each State 
     affected by section 6(n).
       ``(C) Reallocation.--
       ``(i) Notification.--A State agency shall promptly notify 
     the Secretary if the State agency determines that the State 
     agency will not expend all of the funds allocated to the 
     State agency under subparagraph (B).
       ``(ii) Reallocation.--On notification under clause (i), the 
     Secretary shall reallocate the funds that the State agency 
     will not expend as the Secretary considers appropriate and 
     equitable.
       ``(D) Minimum allocation.--Notwithstanding subparagraphs 
     (A) through (C), the Secretary shall ensure that each State 
     agency operating an employment and training program shall 
     receive not less than $50,000 in each fiscal year.''.
       (d) Reports.--Section 16(h) of the Act (7 U.S.C. 2025(h)) 
     is amended--
       (1) in paragraph (5)--
       (A) by striking ``(5)(A) The Secretary'' and inserting 
     ``(5) The Secretary''; and
       (B) by striking subparagraph (B); and
       (2) by striking paragraph (6).

     SEC. 315. COMPARABLE TREATMENT FOR DISQUALIFICATION.

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

     SEC. 316. COOPERATION WITH CHILD SUPPORT AGENCIES.

       Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) (as 
     amended by section 315) is further amended by inserting after 
     subsection (i) the following:
       ``(j) Custodial Parent's Cooperation With Child Support 
     Agencies.--
       ``(1) In general.--At the option of a State agency, subject 
     to paragraphs (2) and (3), no natural or adoptive parent or 
     other individual (collectively referred to in this subsection 
     as `the individual') who is living with and exercising 
     parental control over a child under the age of 18 who has an 
     absent parent shall be eligible to participate in the food 
     stamp program unless the individual cooperates with the State 
     agency administering the program established under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.)--
       ``(A) in establishing the paternity of the child (if the 
     child is born out of wedlock); and
       ``(B) in obtaining support for--
       ``(i) the child; or
       ``(ii) the individual and the child.
       ``(2) Good cause for noncooperation.--Paragraph (1) shall 
     not apply to the individual if good cause is found for 
     refusing to cooperate, as determined by the State agency in 
     accordance with standards prescribed by the Secretary in 
     consultation with the Secretary of Health and Human Services. 
     The standards shall take into consideration circumstances 
     under which cooperation may be against the best interests of 
     the child.
       ``(3) Fees.--Paragraph (1) shall not require the payment of 
     a fee or other cost for services provided under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.).
       ``(k) Non-Custodial Parent's Cooperation With Child Support 
     Agencies.--
       ``(1) In general.--At the option of a State agency, subject 
     to paragraphs (2) and (3), a putative or identified non-
     custodial parent of a child under the age of 18 (referred to 
     in this subsection as `the individual') shall not be eligible 
     to participate in the food stamp program if the individual 
     refuses to cooperate with the State agency administering the 
     program established under part D of title IV of the Social 
     Security Act (42 U.S.C. 651 et seq.)--
       ``(A) in establishing the paternity of the child (if the 
     child is born out of wedlock); and
       ``(B) in providing support for the child.
       ``(2) Refusal to cooperate.--
       ``(A) Guidelines.--The Secretary, in consultation with the 
     Secretary of Health and Human Services, shall develop 
     guidelines on what constitutes a refusal to cooperate under 
     paragraph (1).
       ``(B) Procedures.--The State agency shall develop 
     procedures, using guidelines developed under subparagraph 
     (A), for determining whether an individual is refusing to 
     cooperate under paragraph (1).
       ``(3) Fees.--Paragraph (1) shall not require the payment of 
     a fee or other cost for services provided under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.).
       ``(4) Privacy.--The State agency shall provide safeguards 
     to restrict the use of information collected by a State 
     agency administering the program established under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.) 
     to purposes for which the information is collected.''.

     SEC. 317. DISQUALIFICATION FOR CHILD SUPPORT ARREARS.

       Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) (as 
     amended by section 316) is further amended by inserting after 
     subsection (k) the following:
       ``(l) Disqualification for Child Support Arrears.--
       ``(1) In general.--At the option of a State agency, except 
     as provided in paragraph (2), no individual shall be eligible 
     to participate in the food stamp program as a member of any 
     household during any month that the individual is delinquent 
     in any payment due under a court order for the support of a 
     child of the individual.
       ``(2) Exceptions.--Paragraph (1) shall not apply if--
       ``(A) a court is allowing the individual to delay payment; 
     or
       ``(B) the individual is complying with a payment plan 
     approved by a court or the State agency designated under part 
     D of title IV of the Social Security Act (42 U.S.C. 651 et 
     seq.) to provide support for the child of the individual.''.

     SEC. 318. PERMANENT DISQUALIFICATION FOR PARTICIPATING IN 2 
                   OR MORE STATES.

       Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) (as 
     amended by section 317) is further amended by inserting after 
     subsection (l) the following:
       ``(m) Permanent Disqualification for Participating in 2 or 
     More States.--An individual shall be permanently ineligible 
     to participate in the food stamp program as a member of any 
     household if the individual is found by a State agency to 
     have made, or is convicted in Federal or State court of 
     having made, a fraudulent statement or representation with 
     respect to the place of residence of the individual in order 
     to receive benefits simultaneously from 2 or more States 
     under the food stamp program.''.

     SEC. 319. WORK REQUIREMENT.

       (a) In General.--Section 6 of the Food Stamp Act of 1977 (7 
     U.S.C. 2015) (as amended by section 318) is further amended 
     by inserting after subsection (m) the following:
       ``(n) Work Requirement.--
       ``(1) Definition of work program.--In this subsection, the 
     term `work program' means--
       ``(A) a program under the Job Training Partnership Act (29 
     U.S.C. 1501 et seq.);
       ``(B) a program under section 236 of the Trade Act of 1974 
     (19 U.S.C. 2296); or
       ``(C) a program of employment or training operated or 
     supervised by a State or political subdivision of a State 
     that meets standards approved by the Governor of the State, 
     including a program under section 6(d)(4) other than a job 
     search program or a job search training program under clause 
     (i) or (ii) of section 6(d)(4)(B).
       ``(2) Work requirement.--No individual shall be eligible to 
     participate in the food stamp program as a member of any 
     household if, during the preceding 12-month period, the 
     individual received food stamp benefits for not less than 6 
     months during which the individual did not--
       ``(A) work 20 hours or more per week, averaged monthly; or
       ``(B) participate in and comply with the requirements of a 
     work program for 20 hours or more per week, as determined by 
     the State agency.
       ``(3) Exception.--Paragraph (2) shall not apply to an 
     individual if the individual is--
       ``(A) under 18 or over 50 years of age;
       ``(B) medically certified as physically or mentally unfit 
     for employment;
       ``(C) a parent or other member of a household with 
     responsibility for a dependent child; or
       ``(D) otherwise exempt under section 6(d)(2).
       ``(4) Waiver.--
       ``(A) In general.--On the request of a State agency, the 
     Secretary may waive the 

[[Page S11660]]
     applicability of paragraph (2) to any group of individuals in the State 
     if the Secretary makes a determination that the area in which 
     the individuals reside--
       ``(i) has an unemployment rate of over 8 percent; or
       ``(ii) does not have a sufficient number of jobs to provide 
     employment for the individuals.
       ``(B) Report.--The Secretary shall report the basis for a 
     waiver under subparagraph (A) to the Committee on Agriculture 
     of the House of Representatives and the Committee on 
     Agriculture, Nutrition, and Forestry of the Senate.''.
       (b) Transition Provision.--Prior to October 1, 1996, the 
     term ``preceding 12-month period'' in section 6(n)(2) of the 
     Food Stamp Act of 1977 (as amended by subsection (a)) means 
     the preceding period that begins on October 1, 1995.
     SEC. 320. ELECTRONIC BENEFIT TRANSFERS.

       Section 7 of the Food Stamp Act of 1977 (7 U.S.C. 2016) is 
     amended by adding at the end the following:
       ``(j) Electronic Benefit Transfers.--
       ``(1) Applicable law.--
       ``(A) In general.--Disclosures, protections, 
     responsibilities, and remedies established by the Federal 
     Reserve Board under section 904 of the Electronic Fund 
     Transfer Act (15 U.S.C. 1693b) shall not apply to benefits 
     under this Act delivered through any electronic benefit 
     transfer system.
       ``(B) Definition of electronic benefit transfer system.--In 
     this paragraph, the term `electronic benefit transfer system' 
     means a system under which a governmental entity distributes 
     benefits under this Act or other benefits or payments by 
     establishing accounts to be accessed by recipients of the 
     benefits electronically, including through the use of an 
     automated teller machine, a point-of-sale terminal, or an 
     intelligent benefit card.
       ``(2) Charging for electronic benefit transfer card 
     replacement.--
       ``(A) In general.--A State agency may charge an individual 
     for the cost of replacing a lost or stolen electronic benefit 
     transfer card.
       ``(B) Reducing allotment.--A State agency may collect a 
     charge imposed under subparagraph (A) by reducing the monthly 
     allotment of the household of which the individual is a 
     member.
       ``(3) Optional photographic identification.--
       ``(A) In general.--A State agency may require that an 
     electronic benefit card contain a photograph of 1 or more 
     members of a household.
       ``(B) Other authorized users.--If a State agency requires a 
     photograph on an electronic benefit card under subparagraph 
     (A), the State agency shall establish procedures to ensure 
     that any other appropriate member of the household or any 
     authorized representative of the household may utilize the 
     card.''.

     SEC. 321. MINIMUM BENEFIT.

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

     SEC. 322. BENEFITS ON RECERTIFICATION.

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

     SEC. 323. OPTIONAL COMBINED ALLOTMENT FOR EXPEDITED 
                   HOUSEHOLDS.

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

     SEC. 324. FAILURE TO COMPLY WITH OTHER WELFARE AND PUBLIC 
                   ASSISTANCE PROGRAMS.

       Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is 
     amended by striking subsection (d) and inserting the 
     following:
       ``(d) Reduction of Public Assistance Benefits.--
       ``(1) In general.--If the benefits of a household are 
     reduced under a Federal, State, or local law relating to a 
     welfare or public assistance program for the failure to 
     perform an action required under the law or program, for the 
     duration of the reduction--
       ``(A) the household may not receive an increased allotment 
     as the result of a decrease in the income of the household to 
     the extent that the decrease is the result of the reduction; 
     and
       ``(B) the State agency may reduce the allotment of the 
     household by not more than 25 percent.
       ``(2) Optional method.--In carrying out paragraph (1), a 
     State agency may consider, for the duration of a reduction 
     referred to under paragraph (1), the benefits of the 
     household under a welfare or public assistance program before 
     the reduction as income of the household after the 
     reduction.''.
     SEC. 325. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN INSTITUTIONS.

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

     SEC. 326. OPERATION OF FOOD STAMP OFFICES.

       Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) is 
     amended--
       (1) in subsection (e)--
       (A) by striking paragraph (2) and inserting the following:
       ``(2)(A) that the State agency shall establish procedures 
     governing the operation of food stamp offices that the State 
     agency determines best serve households in the State, 
     including households with special needs, such as households 
     with elderly or disabled members, households in rural areas 
     with low-income members, homeless individuals, households 
     residing on reservations, and households in which a 
     substantial number of members speak a language other than 
     English.
       ``(B) In carrying out subparagraph (A), a State agency--
       ``(i) shall provide timely, accurate, and fair service to 
     applicants for, and participants in, the food stamp program;
       ``(ii) shall permit an applicant household to apply to 
     participate in the program on the same day that the household 
     first contacts a food stamp office in person during office 
     hours;
       ``(iii) shall consider an application filed on the date the 
     applicant submits an application that contains the name, 
     address, and signature of the applicant; and
       ``(iv) may establish operating procedures that vary for 
     local food stamp offices to reflect regional and local 
     differences within the State;'';
       (B) in paragraph (3) (as amended by section 309(b))--
       (i) by striking ``shall--'' and all that follows through 
     ``provide each'' and inserting ``shall provide each''; and
       (ii) by striking ``(B) assist'' and all that follows 
     through ``representative of the State agency;'';
       (C) by striking paragraph (14) and inserting the following:
       ``(14) the standards and procedures used by the State 
     agency under section 6(d)(1)(D) to determine whether an 
     individual is eligible to participate under section 
     6(d)(1)(A);''; and
       (D) by striking paragraph (25) and inserting the following:
       ``(25) a description of the work supplementation or support 
     program, if any, carried out by the State agency under 
     section 16(b);''; and
       (2) in subsection (i)--
       (A) by striking ``(i) Notwithstanding'' and all that 
     follows through ``(2)'' and inserting the following:
       ``(i) Application and Denial Procedures.--
       ``(1) Application procedures.--Notwithstanding any other 
     provision of law,''; and
       (B) by striking ``; (3) households'' and all that follows 
     through ``title IV of the Social Security Act. No'' and 
     inserting a period and the following:
       ``(2) Denial and termination.--Other than in a case of 
     disqualification as a penalty for failure to comply with a 
     public assistance program rule or regulation, no''.

     SEC. 327. STATE EMPLOYEE AND TRAINING STANDARDS.

       Section 11(e)(6) of the Food Stamp Act of 1977 (7 U.S.C. 
     2020(e)(6)) is amended--
       (1) by striking ``(A)''; and
       (2) by striking subparagraphs (B) through (E).

     SEC. 328. EXCHANGE OF LAW ENFORCEMENT INFORMATION.

       Section 11(e) of the Food Stamp Act of 1977 (7 U.S.C. 
     2020(e)) (as amended by section 315(b)) is further amended--
       (1) in paragraph (8)--
       (A) by striking ``that (A) such'' and inserting the 
     following: ``that--
       ``(A) the'';
       (B) by striking ``law, (B) notwithstanding'' and inserting 
     the following: ``law;
       ``(B) notwithstanding'';
       (C) by striking ``Act, and (C) such'' and inserting the 
     following: ``Act;
       ``(C) the''; and
       (D) by adding at the end the following:
       ``(D) notwithstanding any other provision of law, the 
     address, social security number, and, when available, 
     photograph of any member of a household shall be made 
     available, on request, to any Federal, State, or local law 
     enforcement officer if the officer furnishes the State agency 
     with the name of the member and notifies the agency that--
       ``(i) the member--

       ``(I) is fleeing to avoid prosecution, or custody or 
     confinement after conviction, for a crime (or attempt to 
     commit a crime) that, 

[[Page S11661]]
     under the law of the place the member is fleeing, is a felony (or, in 
     the case of New Jersey, a high misdemeanor), or is violating 
     a condition of probation or parole imposed under Federal or 
     State law; or
       ``(II) has information that is necessary for the officer to 
     conduct the official duties of the officer;

       ``(ii) the location or apprehension of the member is an 
     official duty of the officer; and
       ``(iii) the request is being made in the proper exercise of 
     the official duties of the officer; and
       ``(E) the safeguards shall not prevent compliance with 
     paragraph (27);''; and
       (3) by adding at the end the following:
       ``(27) that the State agency shall furnish the Immigration 
     and Naturalization Service with the name of, address of, and 
     identifying information on any individual the State agency 
     knows is unlawfully in the United States; and''.

     SEC. 329. EXPEDITED COUPON SERVICE.

       Section 11(e)(9) of the Food Stamp Act of 1977 (7 U.S.C. 
     2020(e)(9)) is amended--
       (1) in subparagraph (A)--
       (A) by striking ``five days'' and inserting ``7 business 
     days''; and
       (B) by inserting ``and'' at the end;
       (2) by striking subparagraphs (B) and (C);
       (3) by redesignating subparagraph (D) as subparagraph (B); 
     and
       (4) in subparagraph (B) (as redesignated by paragraph (3)), 
     by striking ``, (B), or (C)''.

     SEC. 330. FAIR HEARINGS.

       Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) is 
     amended by adding at the end the following:
       ``(p) Withdrawing Fair Hearing Requests.--A household may 
     withdraw, orally or in writing, a request by the household 
     for a fair hearing under subsection (e)(10). If the 
     withdrawal request is an oral request, the State agency shall 
     provide a written notice to the household confirming the 
     request and providing the household with an opportunity to 
     request a hearing.''.

     SEC. 331. INCOME AND ELIGIBILITY VERIFICATION SYSTEM.

       Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) 
     (as amended by section 330) is further amended by adding at 
     the end the following:
       ``(q) State Verification Option.--Notwithstanding any other 
     provision of law, a State agency shall not be required to use 
     an income and eligibility verification system established 
     under section 1137 of the Social Security Act (42 U.S.C. 
     1320b-7).''.

     SEC. 332. COLLECTION OF OVERISSUANCES.

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

     SEC. 333. TERMINATION OF FEDERAL MATCH FOR OPTIONAL 
                   INFORMATION ACTIVITIES.

       (a) In General.--Section 16(a) of the Food Stamp Act of 
     1977 (7 U.S.C. 2025(a)) is amended--
       (1) by striking paragraph (4); and
       (2) by redesignating paragraphs (5) through (8) as 
     paragraphs (4) through (7), respectively.
       (b) Conforming Amendment.--Section 16(g) of the Act (7 
     U.S.C. 2025(g)) is amended by striking ``an amount equal to'' 
     and all that follows through ``1991, of'' and inserting ``the 
     amount provided under subsection (a)(5) for''.

     SEC. 334. STANDARDS FOR ADMINISTRATION.

       (a) In General.--Section 16 of the Food Stamp Act of 1977 
     (7 U.S.C. 2025) is amended by striking subsection (b).
       (b) Conforming Amendments.--
       (1) The first sentence of section 11(g) of the Act (7 
     U.S.C. 2020(g)) is amended by striking ``the Secretary's 
     standards for the efficient and effective administration of 
     the program established under section 16(b)(1) or''.
       (2) Section 16(c)(1)(B) of the Act (7 U.S.C. 2025(c)(1)(B)) 
     is amended by striking ``pursuant to subsection (b)''.
     SEC. 335. WORK SUPPLEMENTATION OR SUPPORT PROGRAM.

       Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025) 
     (as amended by section 334(a)) is further amended by 
     inserting after subsection (a) the following:
       ``(b) Work Supplementation or Support Program.--
       ``(1) Definition.--In this subsection, the term `work 
     supplementation or support program' means a program in which, 
     as determined by the Secretary, public assistance (including 
     any benefits provided under a program established by the 
     State and the food stamp program) is provided to an employer 
     to be used for hiring and employing a new employee who is a 
     public assistance recipient.
       ``(2) Program.--A State agency may elect to use amounts 
     equal to the allotment that would otherwise be allotted to a 
     household under the food stamp program, but for the operation 
     of this subsection, for the purpose of subsidizing or 
     supporting jobs under a work supplementation or support 
     program established by the State.
       ``(3) Procedure.--If a State agency makes an election under 
     paragraph (2) and identifies each household that participates 
     in the food stamp program that contains an individual who is 
     participating in the work supplementation or support 
     program--
       ``(A) the Secretary shall pay to the State agency an amount 
     equal to the value of the allotment that the household would 
     be eligible to receive but for the operation of this 
     subsection;
       ``(B) the State agency shall expend the amount paid under 
     subparagraph (A) in accordance with the work supplementation 
     or support program in lieu of providing the allotment that 
     the household would receive but for the operation of this 
     subsection;
       ``(C) for purposes of--
       ``(i) sections 5 and 8(a), the amount received under this 
     subsection shall be excluded from household income and 
     resources; and
       ``(ii) section 8(b), the amount received under this 
     subsection shall be considered to be the value of an 
     allotment provided to the household; and
       ``(D) the household shall not receive an allotment from the 
     State agency for the period during which the member continues 
     to participate in the work supplementation or support 
     program.
       ``(4) Other work requirements.--No individual shall be 
     excused, by reason of the fact that a State has a work 
     supplementation or support program, from any work requirement 
     under section 6(d), except during the periods in which the 
     individual is employed under the work supplementation or 
     support program.
       ``(5) Maximum length of participation.--A work 
     supplementation or support program may not allow the 
     participation of any individual for longer than 6 months, 
     unless the Secretary approves a longer period.''.

     SEC. 336. WAIVER AUTHORITY.

       Section 17(b)(1)(A) of the Food Stamp Act of 1977 (7 U.S.C. 
     2026(b)(1)(A)) is amended--
       (1) by striking ``benefits to eligible households, 
     including'' and inserting the following: ``benefits to 
     eligible households. The Secretary may waive the requirements 
     of this Act to the extent necessary to conduct a pilot or 
     experimental project, including a project designed to test 
     innovative welfare reform, promote work, and allow conformity 
     with other Federal, State, and local government assistance 
     programs, except that a project involving the payment of 
     benefits in the form of cash shall maintain the average value 
     of allotments for affected households as a group. Pilot or 
     experimental projects may include''; and
       (2) by striking ``The Secretary may waive'' and all that 
     follows through ``sections 5 and 8 of this Act.''.

     SEC. 337. AUTHORIZATION OF PILOT PROJECTS.

       The last sentence of section 17(b)(1)(A) of the Food Stamp 
     Act of 1977 (7 U.S.C. 2026(b)(1)(A)) is amended by striking 
     ``1995'' and inserting ``2002''.

     SEC. 338. RESPONSE TO WAIVERS.

       Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
     2026(b)(1)) is amended by adding at the end the following:
       ``(C) Response to waivers.--
       ``(i) Response.--Not later than 60 days after the date of 
     receiving a request for a 

[[Page S11662]]
     waiver under subparagraph (A), the Secretary shall provide a response 
     that--

       ``(I) approves the waiver request;
       ``(II) denies the waiver request and explains any 
     modification needed for approval of the waiver request;
       ``(III) denies the waiver request and explains the grounds 
     for the denial; or
       ``(IV) requests clarification of the waiver request.

       ``(ii) Failure to respond.--If the Secretary does not 
     provide a response under clause (i) not later than 60 days 
     after receiving a request for a waiver, the waiver shall be 
     considered approved.
       ``(iii) Notice of denial.--On denial of a waiver request 
     under clause (i)(III), the Secretary shall provide a copy of 
     the waiver request and the grounds for the denial to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate.''.

     SEC. 339. PRIVATE SECTOR EMPLOYMENT INITIATIVES.

       Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is 
     amended by adding at the end the following:
       ``(m) Private Sector Employment Initiatives.--
       ``(1) Election to participate.--
       ``(A) In general.--Subject to the other provisions of this 
     subsection, a State may elect to carry out a private sector 
     employment initiative program under this subsection.
       ``(B) Requirement.--A State shall be eligible to carry out 
     a private sector employment initiative under this subsection 
     only if not less than 50 percent of the households that 
     received food stamp benefits during the summer of 1993 also 
     received benefits under a State program funded under part A 
     of title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.) during the summer of 1993.
       ``(2) Procedure.--A State that has elected to carry out a 
     private sector employment initiative under paragraph (1) may 
     use amounts equal to the food stamp allotments that would 
     otherwise be allotted to a household under the food stamp 
     program, but for the operation of this subsection, to provide 
     cash benefits in lieu of the food stamp allotments to the 
     household if the household is eligible under paragraph (3).
       ``(3) Eligibility.--A household shall be eligible to 
     receive cash benefits under paragraph (2) if an adult member 
     of the household--
       ``(A) has worked in unsubsidized employment in the private 
     sector for not less than the preceding 90 days;
       ``(B) has earned not less than $350 per month from the 
     employment referred to in subparagraph (A) for not less than 
     the preceding 90 days;
       ``(C)(i) is eligible to receive benefits under a State 
     program funded under part A of title IV of the Social 
     Security Act (42 U.S.C. 601 et seq.); or
       ``(ii) was eligible to receive benefits under a State 
     program funded under part A of title IV of the Social 
     Security Act (42 U.S.C. 601 et seq.) at the time the member 
     first received cash benefits under this subsection and is no 
     longer eligible for the State program because of earned 
     income;
       ``(D) is continuing to earn not less than $350 per month 
     from the employment referred to in subparagraph (A); and
       ``(E) elects to receive cash benefits in lieu of food stamp 
     benefits under this subsection.
       ``(4) Evaluation.--A State that operates a program under 
     this subsection for 2 years shall provide to the Secretary a 
     written evaluation of the impact of cash assistance under 
     this subsection. The State agency shall determine the content 
     of the evaluation.''.

     SEC. 340. REAUTHORIZATION OF APPROPRIATIONS.

       The first sentence of section 18(a)(1) of the Food Stamp 
     Act of 1977 (7 U.S.C. 2027(a)(1)) is amended by striking 
     ``1995'' and inserting ``2002''.

     SEC. 341. REAUTHORIZATION OF PUERTO RICO NUTRITION ASSISTANCE 
                   PROGRAM.

       The first sentence of section 19(a)(1)(A) of the Food Stamp 
     Act of 1977 (7 U.S.C. 2028(a)(1)(A)) is amended by striking 
     ``$974,000,000'' and all that follows through ``fiscal year 
     1995'' and inserting the following: ``$1,143,000,000 for each 
     of fiscal years 1995 and 1996, $1,182,000,000 for fiscal year 
     1997, $1,223,000,000 for fiscal year 1998, $1,266,000,000 for 
     fiscal year 1999, $1,310,000,000 for fiscal year 2000, 
     $1,343,000,000 for fiscal year 2001, and $1,376,000,000 for 
     fiscal year 2002''

     SEC. 342. SIMPLIFIED FOOD STAMP PROGRAM.

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

     ``SEC. 24. SIMPLIFIED FOOD STAMP PROGRAM.

       ``(a) Election.--Subject to subsection (c), a State agency 
     may elect to carry out a Simplified Food Stamp Program 
     (referred to in this section as a `Program') under this 
     section.
       ``(b) Operation of Program.--
       ``(1) In general.--If a State agency elects to carry out a 
     Program, within the State or a political subdivision of the 
     State--
       ``(A) a household in which all members receive assistance 
     under a State program funded under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) shall 
     automatically be eligible to participate in the Program; and
       ``(B) subject to subsection (e), benefits under the Program 
     shall be determined under rules and procedures established by 
     the State under--
       ``(i) a State program funded under part A of title IV of 
     the Social Security Act (42 U.S.C. 601 et seq.);
       ``(ii) the food stamp program (other than section 25); or
       ``(iii) a combination of a State program funded under part 
     A of title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.) and the food stamp program.
       ``(2) Shelter standard.--The State agency may elect to 
     apply 1 shelter standard to a household that receives a 
     housing subsidy and another shelter standard to a household 
     that does not receive the subsidy.
       ``(c) Approval of Program.--
       ``(1) State plan.--A State agency may not operate a Program 
     unless the Secretary approves a State plan for the operation 
     of the Program under paragraph (2).
       ``(2) Approval of plan.--
       ``(A) In general.--The Secretary shall approve any State 
     plan to carry out a Program if the Secretary determines that 
     the plan--
       ``(i) complies with this section; and
       ``(ii) would not increase Federal costs incurred under this 
     Act.
       ``(B) Definition of federal costs.--In this section, the 
     term `Federal costs' does not include any Federal costs 
     incurred under section 17.
       ``(d) Increased Federal Costs.--
       ``(1) Determination.--
       ``(A) In general.--The Secretary shall determine whether a 
     Program being carried out by a State agency is increasing 
     Federal costs under this Act.
       ``(B) No excluded households.--In making a determination 
     under subparagraph (A), the Secretary shall not require the 
     State agency to collect or report any information on 
     households not included in the Program.
       ``(C) Alternative accounting periods.--The Secretary may 
     approve the request of a State agency to apply alternative 
     accounting periods to determine if Federal costs do not 
     exceed the Federal costs had the State agency not elected to 
     carry out the Program.
       ``(2) Notification.--If the Secretary determines that the 
     Program has increased Federal costs under this Act for any 
     fiscal year, the Secretary shall notify the State agency not 
     later than January 1 of the immediately succeeding fiscal 
     year.
       ``(3) Return of funds.--
       ``(A) In general.--If the Secretary determines that the 
     Program has increased Federal costs under this Act for a 2-
     year period, including a fiscal year for which notice was 
     given under paragraph (2) and an immediately succeeding 
     fiscal year, the State agency shall pay to the Treasury of 
     the United States the amount of the increased costs.
       ``(B) Enforcement.--If the State agency does not pay an 
     amount due under subparagraph (A) on a date that is not later 
     than 90 days after the date of the determination, the 
     Secretary shall reduce amounts otherwise due to the State 
     agency for administrative costs under section 16(a).
       ``(e) Rules and Procedures.--
       ``(1) In general.--Except as provided by paragraph (2), a 
     State may apply--
       ``(A) the rules and procedures established by the State 
     under--
       ``(i) the State program funded under part A of title IV of 
     the Social Security Act (42 U.S.C. 601 et seq.); or
       ``(ii) the food stamp program; or
       ``(B) the rules and procedures of 1 of the programs to 
     certain matters and the rules and procedures of the other 
     program to all remaining matters.
       ``(2) Standardized deductions.--The State may standardize 
     the deductions provided under section 5(e). In developing the 
     standardized deduction, the State shall give consideration to 
     the work expenses, dependent care costs, and shelter costs of 
     participating households.
       ``(3) Requirements.--In operating a Program, the State 
     shall comply with--
       ``(A) subsections (a) through (g) of section 7;
       ``(B) section 8(a), except that the income of a household 
     may be determined under a State program funded under part A 
     of title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.);
       ``(C) subsections (b) and (d) of section 8;
       ``(D) subsections (a), (c), (d), and (n) of section 11;
       ``(E) paragraph (3) of section 11(e), to the extent that 
     the paragraph requires that an eligible household be 
     certified and receive an allotment for the period of 
     application not later than 30 days after filing an 
     application;
       ``(F) paragraphs (8), (9), (12), (17), (19), (21), and (27) 
     of section 11(e);
       ``(G) section 11(e)(10) or a comparable requirement 
     established by the State under a State program funded under 
     part A of title IV of the Social Security Act (42 U.S.C. 601 
     et seq.); and
       ``(H) section 16.''.
       (b) State Plan Provisions.--Section 11(e) of the Act (7 
     U.S.C. 2020(e)) (as amended by sections 315(b) and 328) is 
     further amended by adding at the end the following:
       ``(28) the plans of the State agency for operating, at the 
     election of the State, a program under section 24, 
     including--
       ``(A) the rules and procedures to be followed by the State 
     to determine food stamp benefits;
       ``(B) how the State will address the needs of households 
     that experience high shelter costs in relation to the incomes 
     of the households; and
       ``(C) a description of the method by which the State will 
     carry out a quality control system under section 16(c).''.

[[Page S11663]]

       (c) Conforming Amendments.--
       (1) Section 8 of the Act (7 U.S.C. 2017) (as amended by 
     section 325) is further amended--
       (A) by striking subsection (e); and
       (B) by redesignating subsection (f) as subsection (e).
       (2) Section 17 of the Act (7 U.S.C. 2026) (as amended by 
     section 339) is further amended--
       (A) by striking subsection (i); and
       (B) by redesignating subsections (j) through (m) as 
     subsections (i) through (l), respectively.

     SEC. 343. OPTIONAL STATE FOOD ASSISTANCE BLOCK GRANT.

       (a) In General.--The Food Stamp Act of 1977 (7 U.S.C. 2011 
     et seq.) (as amended by section 342) is further amended by 
     adding at the end the following:

     ``SEC. 25. OPTIONAL STATE FOOD ASSISTANCE BLOCK GRANT.

       ``(a) Establishment.--The Secretary shall establish a 
     program to make grants to States in accordance with this 
     section to provide--
       ``(1) food assistance to needy individuals and families 
     residing in the State;
       ``(2) at the option of a State, wage subsidies and payments 
     in return for work for needy individuals under the program;
       ``(3) funds to operate an employment and training program 
     under section (g)(2) for needy individuals under the program; 
     and
       ``(4) funds for administrative costs incurred in providing 
     the assistance.
       ``(b) Election.--
       ``(1) In general.--The chief executive officer of a State 
     may elect to participate in the program established under 
     subsection (a).
       ``(2) Election irrevocable.--A State that elects to 
     participate in the program established under subsection (a) 
     may not subsequently elect to participate in the food stamp 
     program in accordance with any other section of this Act.
       ``(3) Program exclusive.--A State that is participating in 
     the program established under subsection (a) shall not be 
     subject to any requirement, or receive any benefit, under 
     this Act except as provided in this section.
       ``(c) Lead Agency.--
       ``(1) Designation.--The chief executive officer of a State 
     desiring to receive a grant under this section shall 
     designate, in an application submitted to the Secretary under 
     subsection (d)(1), an appropriate State agency that complies 
     with paragraph (2) to act as the lead agency for the State.
       ``(2) Duties.--
       ``(A) In general.--The lead agency shall--
       ``(i) administer, either directly, through other State 
     agencies, or through local agencies, the assistance received 
     under this section by the State;
       ``(ii) develop the State plan to be submitted to the 
     Secretary under subsection (d)(1);
       ``(iii) in conjunction with the development of the State 
     plan, hold at least 1 hearing in the State to provide to the 
     public an opportunity to comment on the program under the 
     State plan; and
       ``(iv) coordinate the provision of food assistance under 
     this section with other Federal, State, and local programs.
       ``(B) Development of plan.--In the development of the State 
     plan described in subparagraph (A)(ii), the lead agency shall 
     consult with appropriate representatives of units of local 
     government on issues relating to the State plan.
       ``(d) Application and Plan.--
       ``(1) Application.--To be eligible to receive assistance 
     under this section, a State shall prepare and submit to the 
     Secretary an application at such time, in such manner, and 
     containing such information as the Secretary shall by 
     regulation require, including--
       ``(A) an assurance that the State will comply with the 
     requirements of this section;
       ``(B) a State plan that meets the requirements of paragraph 
     (3); and
       ``(C) an assurance that the State will comply with the 
     requirements of the State plan under paragraph (3).
       ``(2) Annual plan.--The State plan contained in the 
     application under paragraph (1) shall be submitted for 
     approval annually.
       ``(3) Requirements of plan.--
       ``(A) Lead agency.--The State plan shall identify the lead 
     agency.
       ``(B) Use of block grant funds.--The State plan shall 
     provide that the State shall use the amounts provided to the 
     State for each fiscal year under this section--
       ``(i) to provide food assistance to needy individuals and 
     families residing in the State;
       ``(ii) at the option of a State, to provide wage subsidies 
     and payments in return for work under the program, including 
     cash payments to needy individuals and families related to 
     work effort;
       ``(iii) to operate an employment and training program under 
     section (g)(2) for needy individuals under the program; and
       ``(iv) to pay administrative costs incurred in providing 
     the assistance.
       ``(C) Groups served.--The State plan shall describe how the 
     program will serve specific groups of individuals and 
     families and how the treatment will differ from treatment 
     under the food stamp program under the other sections of this 
     Act of the individuals and families, including--
       ``(i) elderly individuals and families;
       ``(ii) migrants or seasonal farmworkers;
       ``(iii) homeless individuals and families;
       ``(iv) individuals and families who live under the 
     supervision of institutions (other than incarcerated 
     individuals);
       ``(v) individuals and families with earnings; and
       ``(vi) members of Indian tribes or tribal organizations.
       ``(D) Assistance for entire state.--The State plan shall 
     provide that benefits under this section shall be available 
     throughout the entire State.
       ``(E) Notice and hearings.--The State plan shall provide 
     that an individual or family who applies for, or receives, 
     assistance under this section shall be provided with notice 
     of, and an opportunity for a hearing on, any action under 
     this section that adversely affects the individual or family.
       ``(F) Other assistance.--
       ``(i) Coordination.--The State plan may coordinate 
     assistance received under this section with assistance 
     provided under the State program funded under part A of title 
     IV of the Social Security Act (42 U.S.C. 601 et seq.).
       ``(ii) Penalties.--If an individual or family is penalized 
     for violating part A of title IV of the Act, the State plan 
     may reduce the amount of assistance provided under this 
     section or otherwise penalize the individual or family.
       ``(G) Assessment of Needs.--The State plan shall assess the 
     food and nutrition needs of needy persons residing in the 
     State.
       ``(H) Eligibility limitations.--The State plan shall 
     describe the income and resource eligibility limitations that 
     are established for the receipt of assistance under this 
     section.
       ``(I) Receiving benefits in more than 1 jurisdiction.--The 
     State plan shall establish a system to verify and otherwise 
     ensure that no individual or family shall receive benefits 
     under this section in more than 1 jurisdiction within the 
     State.
       ``(J) Privacy.--The State plan shall provide for 
     safeguarding and restricting the use and disclosure of 
     information about any individual or family receiving 
     assistance under this section.
       ``(K) Other information.--The State plan shall contain such 
     other information as may be required by the Secretary.
       ``(4) Approval of application and plan.--The Secretary 
     shall approve an application and State plan that satisfies 
     the requirements of this section.
       ``(e) Limitations on State Allotments.--
       ``(1) No individual or family entitlement to assistance.--
     Nothing in this section--
       ``(A) entitles any individual or family to assistance under 
     this section; or
       ``(B) limits the right of a State to impose additional 
     limitations or conditions on assistance under this section.
       ``(2) Construction of facilities.--No funds made available 
     under this section shall be expended for the purchase or 
     improvement of land, or for the purchase, construction, or 
     permanent improvement of any building or facility.
       ``(f) Benefits for Aliens.--
       ``(1) Eligibility.--No individual shall be eligible to 
     receive benefits under a State plan approved under subsection 
     (d)(4) if the individual is not eligible to participate in 
     the food stamp program under section 6(f).
       ``(2) Income.--The State plan shall provide that the income 
     of an alien shall be determined in accordance with section 
     5(i).
       ``(g) Employment and Training.--
       ``(1) Work requirements.--No individual or member of a 
     family shall be eligible to receive benefits under a State 
     plan funded under this section if the individual is not 
     eligible to participate in the food stamp program under 
     subsection (d) or (n) of section 6.
       ``(2) Work programs.--Each State shall implement an 
     employment and training program under section 6(d)(4) for 
     needy individuals under the program.
       ``(h) Enforcement.--
       ``(1) Review of compliance with state plan.--The Secretary 
     shall review and monitor State compliance with this section 
     and the State plan approved under subsection (d)(4).
       ``(2) Noncompliance.--
       ``(A) In general.--If the Secretary, after reasonable 
     notice to a State and opportunity for a hearing, finds that--
       ``(i) there has been a failure by the State to comply 
     substantially with any provision or requirement set forth in 
     the State plan approved under subsection (d)(4); or
       ``(ii) in the operation of any program or activity for 
     which assistance is provided under this section, there is a 
     failure by the State to comply substantially with any 
     provision of this section;

     the Secretary shall notify the State of the finding and that 
     no further payments will be made to the State under this 
     section (or, in the case of noncompliance in the operation of 
     a program or activity, that no further payments to the State 
     will be made with respect to the program or activity) until 
     the Secretary is satisfied that there is no longer any 
     failure to comply or that the noncompliance will be promptly 
     corrected.
       ``(B) Other sanctions.--In the case of a finding of 
     noncompliance made pursuant to subparagraph (A), the 
     Secretary may, in addition to, or in lieu of, imposing the 
     sanctions described in subparagraph (A), impose other 
     appropriate sanctions, including recoupment of money 
     improperly expended for purposes prohibited or not authorized 
     by this section and disqualification from the receipt of 
     financial assistance under this section.
       ``(C) Notice.--The notice required under subparagraph (A) 
     shall include a specific identification of any additional 
     sanction being imposed under subparagraph (B).

[[Page S11664]]

       ``(3) Issuance of regulations.--The Secretary shall 
     establish by regulation procedures for--
       ``(A) receiving, processing, and determining the validity 
     of complaints concerning any failure of a State to comply 
     with the State plan or any requirement of this section; and
       ``(B) imposing sanctions under this section.
       ``(4) Income and eligibility verification system.--The 
     Secretary may withhold not more than 5 percent of the amount 
     allotted to a State under subsection (l)(2) if the State does 
     not use an income and eligibility verification system 
     established under section 1137 of the Social Security Act (42 
     U.S.C. 1320b-7).
       ``(i) Payments.--
       ``(1) In general.--For each fiscal year, the Secretary 
     shall pay to a State that has an application approved by the 
     Secretary under subsection (d)(4) an amount that is equal to 
     the allotment of the State under subsection (l)(2) for the 
     fiscal year.
       ``(2) Method of payment.--The Secretary shall make payments 
     to a State for a fiscal year under this section by issuing 1 
     or more letters of credit for the fiscal year, with necessary 
     adjustments on account of overpayments or underpayments, as 
     determined by the Secretary.
       ``(3) Spending of funds by state.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     payments to a State from an allotment under subsection (l)(2) 
     for a fiscal year may be expended by the State only in the 
     fiscal year.
       ``(B) Carryover.--The State may reserve up to 10 percent of 
     an allotment under subsection (l)(2) for a fiscal year to 
     provide assistance under this section in subsequent fiscal 
     years, except that the reserved funds may not exceed 30 
     percent of the total allotment received under this section 
     for a fiscal year.
       ``(4) Food assistance and administrative expenditures.--In 
     each fiscal year, of the Federal funds expended by a State 
     under this section--
       ``(A) not less than 75 percent shall be for food 
     assistance; and
       ``(B) not more than 6 percent shall be for administrative 
     expenses.
       ``(5) Provision of food assistance.--A State may provide 
     food assistance under this section in any manner determined 
     appropriate by the State to provide food assistance to needy 
     individuals and families in the State, such as electronic 
     benefits transfer limited to food purchases, coupons limited 
     to food purchases, or direct provision of commodities.
       ``(6) Definition of food assistance.--In this section, the 
     term `food assistance' means assistance that may be used only 
     to obtain food, as defined in section 3(g).
       ``(j) Audits.--
       ``(1) Requirement.--After the close of each fiscal year, a 
     State shall arrange for an audit of the expenditures of the 
     State during the program period from amounts received under 
     this section.
       ``(2) Independent auditor.--An audit under this section 
     shall be conducted by an entity that is independent of any 
     agency administering activities that receive assistance under 
     this section and be in accordance with generally accepted 
     auditing principles.
       ``(3) Payment accuracy.--Each annual audit under this 
     section shall include an audit of payment accuracy under this 
     section that shall be based on a statistically valid sample 
     of the caseload in the State.
       ``(4) Submission.--Not later than 30 days after the 
     completion of an audit under this section, the State shall 
     submit a copy of the audit to the legislature of the State 
     and to the Secretary.
       ``(5) Repayment of amounts.--Each State shall repay to the 
     United States any amounts determined through an audit under 
     this section to have not been expended in accordance with 
     this section or to have not been expended in accordance with 
     the State plan, or the Secretary may offset the amounts 
     against any other amount paid to the State under this 
     section.
       ``(k) Nondiscrimination.--
       ``(1) In general.--The Secretary shall not provide 
     financial assistance for any program, project, or activity 
     under this section if any person with responsibilities for 
     the operation of the program, project, or activity 
     discriminates with respect to the program, project, or 
     activity because of race, religion, color, national origin, 
     sex, or disability.
       ``(2) Enforcement.--The powers, remedies, and procedures 
     set forth in title VI of the Civil Rights Act of 1964 (42 
     U.S.C. 2000d et seq.) may be used by the Secretary to enforce 
     paragraph (1).
       ``(l) Allotments.--
       ``(1) Definition of state.--In this section, the term 
     `State' means each of the 50 States, the District of 
     Columbia, Guam, and the Virgin Islands of the United States.
       ``(2) State allotment.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     from the amounts made available under section 18 of this Act 
     for each fiscal year, the Secretary shall allot to each State 
     participating in the program established under this section 
     an amount that is equal to the sum of--
       ``(i) the greater of, as determined by the Secretary--

       ``(I) the total dollar value of all benefits issued under 
     the food stamp program established under this Act by the 
     State during fiscal year 1994; or
       ``(II) the average per fiscal year of the total dollar 
     value of all benefits issued under the food stamp program by 
     the State during each of fiscal years 1992 through 1994; and

       ``(ii) the greater of, as determined by the Secretary--

       ``(I) the total amount received by the State for 
     administrative costs and the employment and training program 
     under subsections (a) and (h), respectively, of section 16 of 
     this Act for fiscal year 1994; or
       ``(II) the average per fiscal year of the total amount 
     received by the State for administrative costs and the 
     employment and training program under subsections (a) and 
     (h), respectively, of section 16 of this Act for each of 
     fiscal years 1992 through 1994.

       ``(B) Insufficient funds.--If the Secretary finds that the 
     total amount of allotments to which States would otherwise be 
     entitled for a fiscal year under subparagraph (A) will exceed 
     the amount of funds that will be made available to provide 
     the allotments for the fiscal year, the Secretary shall 
     reduce the allotments made to States under this subsection, 
     on a pro rata basis, to the extent necessary to allot under 
     this subsection a total amount that is equal to the funds 
     that will be made available.''.
       (b) Research On Optional State Food Assistance Block 
     Grant.--Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 
     2026) (as amended by section 339 and 342(c)(2)) is further 
     amended by adding at the end the following:
       ``(m) Research On Optional State Food Assistance Block 
     Grant.--The Secretary may conduct research on the effects and 
     costs of a State program carried out under section 25.''.
     SEC. 344. EFFECTIVE DATE.

       Except as otherwise provided in this subtitle, this 
     subtitle and the amendments made by this subtitle shall 
     become effective on October 1, 1995.
                 Subtitle B--Anti-Fraud and Trafficking

     SEC. 351. EXPANDED DEFINITION OF COUPON.

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

     SEC. 352. DOUBLED PENALTIES FOR VIOLATING FOOD STAMP PROGRAM 
                   REQUIREMENTS.

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

     SEC. 353. AUTHORITY TO ESTABLISH AUTHORIZATION PERIODS.

       Section 9(a) of the Food Stamp Act of 1977 (7 U.S.C. 
     2018(a)) is amended by adding at the end the following:
       ``(3) Authorization periods.--The Secretary is authorized 
     to issue regulations establishing specific time periods 
     during which authorization to accept and redeem coupons under 
     the food stamp program shall be valid.''.

     SEC. 354. SPECIFIC PERIOD FOR PROHIBITING PARTICIPATION OF 
                   STORES BASED ON LACK OF BUSINESS INTEGRITY.

       Section 9(a) of the Food Stamp Act of 1977 (7 U.S.C. 
     2018(a)) (as amended by section 353) is further amended by 
     adding at the end the following:
       ``(4) Periods for participation of stores and concerns.--
     The Secretary may issue regulations establishing specific 
     time periods during which a retail food store or wholesale 
     food concern that has an application for approval to accept 
     and redeem coupons denied, or that has an approval withdrawn, 
     on the basis of business integrity and reputation cannot 
     submit a new application for approval. The periods shall 
     reflect the severity of business integrity infractions that 
     are the basis of the denials or withdrawals.''.

     SEC. 355. INFORMATION FOR VERIFYING ELIGIBILITY FOR 
                   AUTHORIZATION.

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

     SEC. 356. WAITING PERIOD FOR STORES THAT INITIALLY FAIL TO 
                   MEET AUTHORIZATION CRITERIA.

       Section 9(d) of the Food Stamp Act of 1977 (7 U.S.C. 
     2018(d)) is amended by adding at the end the following: ``A 
     retail food store or wholesale food concern that has an 
     application for approval to accept and redeem coupons denied 
     because the store or concern does not meet criteria for 
     approval established by the Secretary by regulation may not 
     submit a new application for 6 months after the date of the 
     denial.''.
     SEC. 357. BASES FOR SUSPENSIONS AND DISQUALIFICATIONS.

       Section 12 of the Food Stamp Act of 1977 (7 U.S.C. 2021) is 
     amended--
       (1) by striking the section heading;
       (2) by striking ``Sec. 12 (a) Any'' and inserting the 
     following:
     
[[Page S11665]]


     ``SEC. 12. CIVIL MONEY PENALTIES AND DISQUALIFICATION OF 
                   RETAIL FOOD STORES AND WHOLESALE FOOD CONCERNS.

       ``(a) Disqualification.--
       ``(1) In general.--Any''; and
       (3) in subsection (a), by adding at the end the following:
       ``(2) Basis.--Regulations issued pursuant to this Act shall 
     provide criteria for the finding of a violation, and the 
     suspension or disqualification of a retail food store or 
     wholesale food concern, on the basis of evidence that may 
     include facts established through on-site investigations, 
     inconsistent redemption data, or evidence obtained through 
     transaction reports under electronic benefits transfer 
     systems.''.

     SEC. 358. DISQUALIFICATION OF STORES PENDING JUDICIAL AND 
                   ADMINISTRATIVE REVIEW.

       (a) Authority.--Section 12(a) of the Food Stamp Act of 1977 
     (7 U.S.C. 2021(a)) (as amended by section 357) is further 
     amended by adding at the end the following:
       ``(3) Disqualification pending review.--The regulations may 
     establish criteria under which the authorization of a retail 
     food store or wholesale food concern to accept and redeem 
     coupons may be suspended at the time the store or concern is 
     initially found to have committed a violation of a 
     requirement of the food stamp program that would result in a 
     permanent disqualification. The suspension may coincide with 
     the period of a review under section 14. The Secretary shall 
     not be liable for the value of any sales lost during a 
     suspension or disqualification period.''.
       (b) Review.--Section 14(a) of the Act (7 U.S.C. 2023(a)) is 
     amended--
       (1) in the first sentence, by striking ``disqualified or 
     subjected'' and inserting ``suspended, disqualified, or 
     subjected'';
       (2) in the fifth sentence, by inserting before the period 
     at the end the following: ``, except that, in the case of the 
     suspension of a retail food store or wholesale food concern 
     under section 12(a)(3), the suspension shall remain in effect 
     pending any judicial or administrative review of the proposed 
     disqualification action, and the period of suspension shall 
     be considered a part of any period of disqualification that 
     is imposed''; and
       (3) by striking the last sentence.

     SEC. 359. DISQUALIFICATION OF RETAILERS WHO ARE DISQUALIFIED 
                   UNDER THE WIC PROGRAM.

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

     SEC. 360. PERMANENT DEBARMENT OF RETAILERS WHO INTENTIONALLY 
                   SUBMIT FALSIFIED APPLICATIONS.

       Section 12 of the Food Stamp Act of 1977 (7 U.S.C. 2021) 
     (as amended by section 359) is further amended by adding at 
     the end the following:
       ``(h) Falsified Applications.--
       ``(1) In general.--The Secretary shall issue regulations 
     providing for the permanent disqualification of a retail food 
     store, or wholesale food concern, that knowingly submits an 
     application for approval to accept and redeem coupons that 
     contains false information about a substantive matter that 
     was, or could have been, a basis for approving the 
     application.
       ``(2) Review.--A disqualification under paragraph (1) shall 
     be subject to judicial and administrative review under 
     section 14, except that the disqualification shall remain in 
     effect pending the review.''.
     SEC. 361. EXPANDED CRIMINAL FORFEITURE FOR VIOLATIONS.

       (a) Forfeiture of Items Exchanged in Food Stamp 
     Trafficking.--The first sentence of section 15(g) of the Food 
     Stamp Act of 1977 (7 U.S.C. 2024(g)) is amended by striking 
     ``or intended to be furnished''.
       (b) Criminal Forfeiture.--Section 15 of the Act (7 U.S.C. 
     2024)) is amended by adding at the end the following:
       ``(h) Criminal Forfeiture.--
       ``(A) In general.--Any person convicted of violating 
     subsection (b) or (c) involving food stamp benefits having an 
     aggregate value of not less than $5,000, shall forfeit to the 
     United States--
       ``(i) any food stamp benefits and any property 
     constituting, or derived from, or traceable to any proceeds 
     the person obtained directly or indirectly as a result of the 
     violation; and
       ``(ii) any food stamp benefits and any property of the 
     person used, or intended to be used, in any manner or part, 
     to commit, or to facilitate the commission of the violation.
       ``(B) Sentence.--In imposing a sentence on a person under 
     subparagraph (A), a court shall order that the person forfeit 
     to the United States all property described in this 
     subsection.
       ``(C) Procedures.--Any food stamp benefits or property 
     subject to forfeiture under this subsection, any seizure or 
     disposition of the benefits or property, and any 
     administrative or judicial proceeding relating to the 
     benefits or property, shall be governed by subsections (b), 
     (c), (e), and (g) through (p) of section 413 of the 
     Comprehensive Drug Abuse Prevention and Control Act of 1970 
     (21 U.S.C. 853), if not inconsistent with this subsection.
       ``(3) Excluded property.--This subsection shall not apply 
     to property referred to in subsection (g).''.

     SEC. 362. EFFECTIVE DATE.

       This subtitle and the amendments made by this subtitle 
     shall become effective on October 1, 1995.
                   TITLE IV--CHILD NUTRITION PROGRAMS
                    Subtitle A--Reimbursement Rates

     SEC. 401. TERMINATION OF ADDITIONAL PAYMENT FOR LUNCHES 
                   SERVED IN HIGH FREE AND REDUCED PRICE 
                   PARTICIPATION SCHOOLS.

       (a) In General.--Section 4(b)(2) of the National School 
     Lunch Act (42 U.S.C. 1753(b)(2)) is amended by striking 
     ``except that'' and all that follows through ``2 cents 
     more''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall become effective on July 1, 1996.

     SEC. 402. VALUE OF FOOD ASSISTANCE.

       (a) In General.--Section 6(e)(1) of the National School 
     Lunch Act (42 U.S.C. 1755(e)(1)) is amended by striking 
     subparagraph (B) and inserting the following:
       ``(B) Adjustments.--
       ``(i) In general.--The value of food assistance for each 
     meal shall be adjusted each July 1 by the annual percentage 
     change in a 3-month average value of the Price Index for 
     Foods Used in Schools and Institutions for March, April, and 
     May each year.
       ``(ii) Adjustments.--Except as otherwise provided in this 
     subparagraph, in the case of each school year, the Secretary 
     shall--

       ``(I) base the adjustment made under clause (i) on the 
     amount of the unrounded adjustment for the preceding school 
     year;
       ``(II) adjust the resulting amount in accordance with 
     clause (i); and
       ``(III) round the result to the nearest lower cent 
     increment.

       ``(iii) Adjustment on january 1, 1996.--On January 1, 1996, 
     the Secretary shall adjust the value of food assistance for 
     the remainder of the school year by rounding the previously 
     established value of food assistance to the nearest lower 
     cent increment.
       ``(iv) Adjustment for 1996-97 school year.--In the case of 
     the school year beginning July 1, 1996, the value of food 
     assistance shall be the same as the value of food assistance 
     in effect on June 30, 1996.
       ``(v) Adjustment for 1997-98 school year.--In the case of 
     the school year beginning July 1, 1997, the Secretary shall--

       ``(I) base the adjustment made under clause (i) on the 
     amount of the unrounded adjustment for the value of food 
     assistance for the school year beginning July 1, 1995;
       ``(II) adjust the resulting amount to reflect the annual 
     percentage change in a 3-month average value of the Price 
     Index for Foods Used in Schools and Institutions for March, 
     April, and May for the most recent 12-month period for which 
     the data are available; and
       ``(III) round the result to the nearest lower cent 
     increment.''.

       (b) Effective Date.--The amendments made by subsection (a) 
     shall become effective on January 1, 1996.

     SEC. 403. LUNCHES, BREAKFASTS, AND SUPPLEMENTS.

       (a) In General.--Section 11(a)(3)(B) of the National School 
     Lunch Act (42 U.S.C. 1759a(a)(3)(B)) is amended--
       (1) by designating the second and third sentences as 
     subparagraphs (C) and (D), respectively; and
       (2) by striking subparagraph (D) (as so designated) and 
     inserting the following:
       ``(D) Rounding.--Except as otherwise provided in this 
     paragraph, in the case of each school year, the Secretary 
     shall--
       ``(i) base the adjustment made under this paragraph on the 
     amount of the unrounded adjustment for the preceding school 
     year;
       ``(ii) adjust the resulting amount in accordance with 
     subparagraphs (B) and (C); and
       ``(iii) round the result to the nearest lower cent 
     increment.
       ``(E) Adjustment on january 1, 1996.--On January 1, 1996, 
     the Secretary shall adjust the rates and factor for the 
     remainder of the school year by rounding the previously 
     established rates and factor to the nearest lower cent 
     increment.
       ``(F) Adjustment for 24-month period beginning july 1, 
     1996.--In the case of the 24-month period beginning July 1, 
     1996, the national average payment rates for paid lunches, 
     paid breakfasts, and paid supplements shall be the same as 
     the national average payment rate for paid lunches, paid 
     breakfasts, and paid supplements, respectively, for the 
     school year beginning July 1, 1995, rounded to the nearest 
     lower cent increment.
       ``(G) Adjustment for school year beginning july 1, 1998.--
     In the case of the school year beginning July 1, 1998, the 
     Secretary shall--
       ``(i) base the adjustments made under this paragraph for--

       ``(I) paid lunches and paid breakfasts on the amount of the 
     unrounded adjustment for paid lunches for the school year 
     beginning July 1, 1995; and

[[Page S11666]]

       ``(II) paid supplements on the amount of the unrounded 
     adjustment for paid supplements for the school year beginning 
     July 1, 1995;

       ``(ii) adjust each resulting amount in accordance with 
     subparagraph (C); and
       ``(iii) round each result to the nearest lower cent 
     increment.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall become effective on January 1, 1996.

     SEC. 404. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

       (a) In General.--Section 13(b) of the National School Lunch 
     Act (42 U.S.C. 1761(b)) is amended--
       (1) by striking ``(b)(1)'' and all that follows through the 
     end of paragraph (1) and inserting the following:
       ``(b) Service Institutions.--
       ``(1) Payments.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, payments to service institutions shall equal the 
     full cost of food service operations (which cost shall 
     include the costs of obtaining, preparing, and serving food, 
     but shall not include administrative costs).
       ``(B) Maximum amounts.--Subject to subparagraph (C), 
     payments to any institution under subparagraph (A) shall not 
     exceed--
       ``(i) $2 for each lunch and supper served;
       ``(ii) $1.20 for each breakfast served; and
       ``(iii) 50 cents for each meal supplement served.
       ``(C) Adjustments.--Amounts specified in subparagraph (B) 
     shall be adjusted each January 1 to the nearest lower cent 
     increment in accordance with the changes for the 12-month 
     period ending the preceding November 30 in the series for 
     food away from home of the Consumer Price Index for All Urban 
     Consumers published by the Bureau of Labor Statistics of the 
     Department of Labor. Each adjustment shall be based on the 
     unrounded adjustment for the prior 12-month period.'';
       (2) in the second sentence of paragraph (3), by striking 
     ``levels determined'' and all that follows through ``this 
     subsection'' and inserting ``level determined by the 
     Secretary''; and
       (3) by striking paragraph (4).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall become effective on January 1, 1996.
     SEC. 405. SPECIAL MILK PROGRAM.

       (a) In General.--Section 3(a) of the Child Nutrition Act of 
     1966 (42 U.S.C. 1772(a)) is amended by striking paragraph (8) 
     and inserting the following:
       ``(8) Adjustments.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, in the case of each school year, the Secretary 
     shall--
       ``(i) base the adjustment made under paragraph (7) on the 
     amount of the unrounded adjustment for the preceding school 
     year;
       ``(ii) adjust the resulting amount in accordance with 
     paragraph (7); and
       ``(iii) round the result to the nearest lower cent 
     increment.
       ``(B) Adjustment on january 1, 1996.--On January 1, 1996, 
     the Secretary shall adjust the minimum rate for the remainder 
     of the school year by rounding the previously established 
     minimum rate to the nearest lower cent increment.
       ``(C) Adjustment for 1996-97 school year.--In the case of 
     the school year beginning July 1, 1996, the minimum rate 
     shall be the same as the minimum rate in effect on June 30, 
     1996.
       ``(D) Adjustment for 1997-98 school year.--In the case of 
     the school year beginning July 1, 1997, the Secretary shall--
       ``(i) base the adjustment made under paragraph (7) on the 
     amount of the unrounded adjustment for the minimum rate for 
     the school year beginning July 1, 1995;
       ``(ii) adjust the resulting amount to reflect changes in 
     the Producer Price Index for Fresh Processed Milk published 
     by the Bureau of Labor Statistics of the Department of Labor 
     for the most recent 12-month period for which the data are 
     available; and
       ``(iii) round the result to the nearest lower cent 
     increment.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall become effective on January 1, 1996.

     SEC. 406. FREE AND REDUCED PRICE BREAKFASTS.

       (a) In General.--Section 4(b) of the Child Nutrition Act of 
     1966 (42 U.S.C. 1773(b)) is amended--
       (1) in the second sentence of paragraph (1)(B), by striking 
     ``, adjusted to the nearest one-fourth cent'' and inserting 
     ``(as adjusted pursuant to section 11(a) of the National 
     School Lunch Act (42 U.S.C. 1759a(a))''; and
       (2) in paragraph (2)(B)(ii)--
       (A) by striking ``nearest one-fourth cent'' and inserting 
     ``nearest lower cent increment for the applicable school 
     year''; and
       (B) by inserting before the period at the end the 
     following: ``, and the adjustment required by this clause 
     shall be based on the unrounded adjustment for the preceding 
     school year''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall become effective on July 1, 1996.

     SEC. 407. CONFORMING REIMBURSEMENT FOR PAID BREAKFASTS AND 
                   LUNCHES.

       (a) In General.--The last sentence of section 4(b)(1)(B) of 
     the Child Nutrition Act of 1966 (42 U.S.C. 1773(b)(1)(B)) is 
     amended by striking ``8.25 cents'' and all that follows 
     through ``Act)'' and inserting ``the same as the national 
     average lunch payment for paid meals established under 
     section 4(b) of the National School Lunch Act (42 U.S.C. 
     1753(b))''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall become effective on January 1, 1996.
                       Subtitle B--Grant Programs

     SEC. 411. SCHOOL BREAKFAST STARTUP GRANTS.

       Section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 
     1773) is amended by striking subsection (g).

     SEC. 412. NUTRITION EDUCATION AND TRAINING PROGRAMS.

       Section 19(i)(2)(A) of the Child Nutrition Act of 1966 (42 
     U.S.C. 1788(i)(2)(A)) is amended by striking ``$10,000,000'' 
     and inserting ``$7,000,000''.

     SEC. 413. EFFECTIVE DATE.

       The amendments made by this subtitle shall become effective 
     on October 1, 1996.
                      Subtitle C--Other Amendments

     SEC. 421. FREE AND REDUCED PRICE POLICY STATEMENT.

       (a) School Lunch Program.--Section 9(b)(2) of the National 
     School Lunch Act (42 U.S.C. 1758(b)(2)) is amended by adding 
     at the end the following:
       ``(D) Free and reduced price policy statement.--After the 
     initial submission, a school shall not be required to submit 
     a free and reduced price policy statement to a State 
     educational agency under this Act unless there is a 
     substantive change in the free and reduced price policy of 
     the school. A routine change in the policy of a school, such 
     as an annual adjustment of the income eligibility guidelines 
     for free and reduced price meals, shall not be sufficient 
     cause for requiring the school to submit a policy 
     statement.''.
       (b) School Breakfast Program.--Section 4(b)(1) of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1773(b)(1)) is amended by 
     adding at the end the following:
       ``(E) Free and reduced price policy statement.--After the 
     initial submission, a school shall not be required to submit 
     a free and reduced price policy statement to a State 
     educational agency under this Act unless there is a 
     substantive change in the free and reduced price policy of 
     the school. A routine change in the policy of a school, such 
     as an annual adjustment of the income eligibility guidelines 
     for free and reduced price meals, shall not be sufficient 
     cause for requiring the school to submit a policy 
     statement.''.
     SEC. 422. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

       (a) Permitting Offer Versus Serve.--Section 13(f) of the 
     National School Lunch Act (42 U.S.C. 1761(f)) is amended--
       (1) by striking ``(f) Service'' and inserting the 
     following:
       ``(f) Nutritional Standards.--
       ``(1) In general.--Service''; and
       (2) by adding at the end the following:
       ``(2) Offer versus serve.--A school food authority 
     participating as a service institution may permit a child 
     attending a site on school premises operated directly by the 
     authority to refuse not more than 1 item of a meal that the 
     child does not intend to consume. A refusal of an offered 
     food item shall not affect the amount of payments made under 
     this section to a school for the meal.''.
       (b) Removing Mandatory Notice to Institutions.--Section 
     13(n)(2) of the Act is amended by striking ``and its plans 
     and schedule'' and inserting ``except that the Secretary may 
     not require a State to submit a plan or schedule''.

     SEC. 423. CHILD AND ADULT CARE FOOD PROGRAM.

       (a) Payments to Sponsor Employees.--Paragraph (2) of the 
     last sentence of section 17(a) of the National School Lunch 
     Act (42 U.S.C. 1766(a)) is amended--
       (1) by striking ``and'' at the end of subparagraph (B);
       (2) by striking the period at the end of subparagraph (C) 
     and inserting ``; and''; and
       (3) by adding at the end the following:
       ``(D) in the case of a family or group day care home 
     sponsoring organization that employs more than 1 employee, 
     the organization does not base payments to an employee of the 
     organization on the number of family or group day care homes 
     recruited, managed, or monitored.''.
       (b) Improved Targeting of Day Care Home Reimbursements.--
       (1) Restructured day care home reimbursements.--Section 
     17(f)(3) of the Act is amended by striking ``(3)(A) 
     Institutions'' and all that follows through the end of 
     subparagraph (A) and inserting the following:
       ``(3) Reimbursement of family or group day care home 
     sponsoring organizations.--
       ``(A) Reimbursement factor.--
       ``(i) In general.--An institution that participates in the 
     program under this section as a family or group day care home 
     sponsoring organization shall be provided, for payment to a 
     home sponsored by the organization, reimbursement factors in 
     accordance with this subparagraph for the cost of obtaining 
     and preparing food and prescribed labor costs involved in 
     providing meals under this section.
       ``(ii) Tier i family or group day care homes.--

       ``(I) Definition.--In this paragraph, the term `tier I 
     family or group day care home' means--

       ``(aa) a family or group day care home that is located in a 
     geographic area, as defined by the Secretary based on census 
     data, in which at least 50 percent of the children residing 
     in the area are members of households whose 

[[Page S11667]]
     incomes meet the income eligibility guidelines for free or reduced 
     price meals under section 9;
       ``(bb) a family or group day care home that is located in 
     an area served by a school enrolling elementary students in 
     which at least 50 percent of the total number of children 
     enrolled are certified eligible to receive free or reduced 
     price school meals under this Act or the Child Nutrition Act 
     of 1966 (42 U.S.C. 1771 et seq.); or
       ``(cc) a family or group day care home that is operated by 
     a provider whose household meets the income eligibility 
     guidelines for free or reduced price meals under section 9 
     and whose income is verified by the sponsoring organization 
     of the home under regulations established by the Secretary.

       ``(II) Reimbursement.--Except as provided in subclause 
     (III), a tier I family or group day care home shall be 
     provided reimbursement factors under this clause without a 
     requirement for documentation of the costs described in 
     clause (i), except that reimbursement shall not be provided 
     under this subclause for meals or supplements served to the 
     children of a person acting as a family or group day care 
     home provider unless the children meet the income eligibility 
     guidelines for free or reduced price meals under section 9.
       ``(III) Factors.--Except as provided in subclause (IV), the 
     reimbursement factors applied to a home referred to in 
     subclause (II) shall be the factors in effect on the date of 
     enactment of this subclause.
       ``(IV) Adjustments.--The reimbursement factors under this 
     subparagraph shall be adjusted on August 1, 1996, July 1, 
     1997, and each July 1 thereafter, to reflect changes in the 
     Consumer Price Index for food at home for the most recent 12-
     month period for which the data are available. The 
     reimbursement factors under this subparagraph shall be 
     rounded to the nearest lower cent increment and based on the 
     unrounded adjustment in effect on June 30 of the preceding 
     school year.

       ``(iii) Tier ii family or group day care homes.--

       ``(I) In general.--

       ``(aa) Factors.--Except as provided in subclause (II), with 
     respect to meals or supplements served under this clause by a 
     family or group day care home that does not meet the criteria 
     set forth in clause (ii)(I), the reimbursement factors shall 
     be $1 for lunches and suppers, 30 cents for breakfasts, and 
     15 cents for supplements.
       ``(bb) Adjustments.--The factors shall be adjusted on July 
     1, 1997, and each July 1 thereafter, to reflect changes in 
     the Consumer Price Index for food at home for the most recent 
     12-month period for which the data are available. The 
     reimbursement factors under this item shall be rounded down 
     to the nearest lower cent increment and based on the 
     unrounded adjustment for the preceding 12-month period.
       ``(cc) Reimbursement.--A family or group day care home 
     shall be provided reimbursement factors under this subclause 
     without a requirement for documentation of the costs 
     described in clause (i), except that reimbursement shall not 
     be provided under this subclause for meals or supplements 
     served to the children of a person acting as a family or 
     group day care home provider unless the children meet the 
     income eligibility guidelines for free or reduced price meals 
     under section 9.

       ``(II) Other factors.--A family or group day care home that 
     does not meet the criteria set forth in clause (ii)(I) may 
     elect to be provided reimbursement factors determined in 
     accordance with the following requirements:

       ``(aa) Children eligible for free or reduced price meals.--
     In the case of meals or supplements served under this 
     subsection to children who are members of households whose 
     incomes meet the income eligibility guidelines for free or 
     reduced price meals under section 9, the family or group day 
     care home shall be provided reimbursement factors set by the 
     Secretary in accordance with clause (ii)(III).
       ``(bb) Ineligible children.--In the case of meals or 
     supplements served under this subsection to children who are 
     members of households whose incomes do not meet the income 
     eligibility guidelines, the family or group day care home 
     shall be provided reimbursement factors in accordance with 
     subclause (I).

       ``(III) Information and determinations.--

       ``(aa) In general.--If a family or group day care home 
     elects to claim the factors described in subclause (II), the 
     family or group day care home sponsoring organization serving 
     the home shall collect the necessary income information, as 
     determined by the Secretary, from any parent or other 
     caretaker to make the determinations specified in subclause 
     (II) and shall make the determinations in accordance with 
     rules prescribed by the Secretary.
       ``(bb) Categorical eligibility.--In making a determination 
     under item (aa), a family or group day care home sponsoring 
     organization may consider a child participating in or 
     subsidized under, or a child with a parent participating in 
     or subsidized under, a federally or State supported child 
     care or other benefit program with an income eligibility 
     limit that does not exceed the eligibility standard for free 
     or reduced price meals under section 9 to be a child who is a 
     member of a household whose income meets the income 
     eligibility guidelines under section 9.
       ``(cc) Factors for children only.--A family or group day 
     care home may elect to receive the reimbursement factors 
     prescribed under clause (ii)(III) solely for the children 
     participating in a program referred to in item (bb) if the 
     home elects not to have income statements collected from 
     parents or other caretakers.

       ``(IV) Simplified meal counting and reporting procedures.--
     The Secretary shall prescribe simplified meal counting and 
     reporting procedures for use by a family or group day care 
     home that elects to claim the factors under subclause (II) 
     and by a family or group day care home sponsoring 
     organization that sponsors the home. The procedures the 
     Secretary prescribes may include 1 or more of the following:

       ``(aa) Setting an annual percentage for each home of the 
     number of meals served that are to be reimbursed in 
     accordance with the reimbursement factors prescribed under 
     clause (ii)(III) and an annual percentage of the number of 
     meals served that are to be reimbursed in accordance with the 
     reimbursement factors prescribed under subclause (I), based 
     on the family income of children enrolled in the home in a 
     specified month or other period.
       ``(bb) Placing a home into 1 of 2 or more reimbursement 
     categories annually based on the percentage of children in 
     the home whose households have incomes that meet the income 
     eligibility guidelines under section 9, with each such 
     reimbursement category carrying a set of reimbursement 
     factors such as the factors prescribed under clause (ii)(III) 
     or subclause (I) or factors established within the range of 
     factors prescribed under clause (ii)(III) and subclause (I).
       ``(cc) Such other simplified procedures as the Secretary 
     may prescribe.

       ``(V) Minimum verification requirements.--The Secretary may 
     establish any necessary minimum verification requirements.''.

       (2) Grants to states to provide assistance to family or 
     group day care homes.--Section 17(f)(3) of the Act is amended 
     by adding at the end the following:
       ``(D) Grants to states to provide assistance to family or 
     group day care homes.--
       ``(i) In general.--

       ``(I) Reservation.--From amounts made available to carry 
     out this section, the Secretary shall reserve $5,000,000 of 
     the amount made available for fiscal year 1996.
       ``(II) Purpose.--The Secretary shall use the funds made 
     available under subclause (I) to provide grants to States for 
     the purpose of providing--

       ``(aa) assistance, including grants, to family and day care 
     home sponsoring organizations and other appropriate 
     organizations, in securing and providing training, materials, 
     automated data processing assistance, and other assistance 
     for the staff of the sponsoring organizations; and
       ``(bb) training and other assistance to family and group 
     day care homes in the implementation of the amendments to 
     subparagraph (A) made by section 423(b)(1) of the Work 
     Opportunity Act of 1995.
       ``(ii) Allocation.--The Secretary shall allocate from the 
     funds reserved under clause (i)(I)--

       ``(I) $30,000 in base funding to each State; and
       ``(II) any remaining amount among the States, based on the 
     number of family day care homes participating in the program 
     in a State during fiscal year 1994 as a percentage of the 
     number of all family day care homes participating in the 
     program during fiscal year 1994.

       ``(iii) Retention of funds.--Of the amount of funds made 
     available to a State for fiscal year 1996 under clause (i), 
     the State may retain not to exceed 30 percent of the amount 
     to carry out this subparagraph.
       ``(iv) Additional payments.--Any payments received under 
     this subparagraph shall be in addition to payments that a 
     State receives under subparagraph (A) (as amended by section 
     423(b)(1) of the Work Opportunity Act of 1995).''.
       (3) Provision of data.--Section 17(f)(3) of the Act (as 
     amended by paragraph (2)) is further amended by adding at the 
     end the following:
       ``(E) Provision of data to family or group day care home 
     sponsoring organizations.--
       ``(i) Census data.--The Secretary shall provide to each 
     State agency administering a child and adult care food 
     program under this section data from the most recent 
     decennial census survey or other appropriate census survey 
     for which the data are available showing which areas in the 
     State meet the requirements of subparagraph (A)(ii)(I)(aa). 
     The State agency shall provide the data to family or group 
     day care home sponsoring organizations located in the State.
       ``(ii) School data.--

       ``(I) In general.--A State agency administering the school 
     lunch program under this Act or the school breakfast program 
     under the Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
     seq.) shall provide data for each elementary school in the 
     State, or shall direct each school within the State to 
     provide data for the school, to approved family or group day 
     care home sponsoring organizations that request the data, on 
     the percentage of enrolled children who are eligible for free 
     or reduced price meals.
       ``(II) Use of data from preceding school year.--In 
     determining for a fiscal year or other annual period whether 
     a home qualifies as a tier I family or group day care home 

[[Page S11668]]
     under subparagraph (A)(ii)(I), the State agency administering the 
     program under this section, and a family or group day care 
     home sponsoring organization, shall use the most current 
     available data at the time of the determination.

       ``(iii) Duration of determination.--For purposes of this 
     section, a determination that a family or group day care home 
     is located in an area that qualifies the home as a tier I 
     family or group day care home (as the term is defined in 
     subparagraph (A)(ii)(I)), shall be in effect for 3 years 
     (unless the determination is made on the basis of census 
     data, in which case the determination shall remain in effect 
     until more recent census data are available) unless the State 
     agency determines that the area in which the home is located 
     no longer qualifies the home as a tier I family or group day 
     care home.''.
       (4) Conforming amendments.--Section 17(c) of the Act is 
     amended by inserting ``except as provided in subsection 
     (f)(3),'' after ``For purposes of this section,'' each place 
     it appears in paragraphs (1), (2), and (3).
       (c) Disallowing Meal Claims.--The fourth sentence of 
     section 17(f)(4) of the Act is amended by inserting 
     ``(including institutions that are not family or group day 
     care home sponsoring organizations)'' after ``institutions''.
       (d) Elimination of State Paperwork and Outreach Burden.--
     Section 17 of the Act is amended by striking subsection (k) 
     and inserting the following:
       ``(k) Training and Technical Assistance.--A State 
     participating in the program established under this section 
     shall provide sufficient training, technical assistance, and 
     monitoring to facilitate effective operation of the program. 
     The Secretary shall assist the State in developing plans to 
     fulfill the requirements of this subsection.''.
       (e) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall become effective on the 
     date of enactment of this Act.
       (2) Improved targeting of day care home reimbursements.--
     The amendments made by paragraphs (1), (3), and (4) of 
     subsection (b) shall become effective on August 1, 1996.
     SEC. 424. REDUCING REQUIRED REPORTS TO STATE AGENCIES AND 
                   SCHOOLS.

       Section 19 of the National School Lunch Act (42 U.S.C. 
     1769a) is amended by striking subsection (c) and inserting 
     the following:
       ``(c) Report.--Not later than 1 year after the date of 
     enactment of the Work Opportunity Act of 1995, the Secretary 
     shall--
       ``(1) review all reporting requirements under this Act and 
     the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) that 
     are in effect, as of the date of enactment of the Work 
     Opportunity Act of 1995, for agencies and schools referred to 
     in subsection (a); and
       ``(2) provide a report to the Committee on Economic and 
     Educational Opportunities of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate that--
       ``(A) describes the reporting requirements described in 
     paragraph (1) that are required by law;
       ``(B) makes recommendations concerning the elimination of 
     any requirement described in subparagraph (A) because the 
     contribution of the requirement to program effectiveness is 
     not sufficient to warrant the paperwork burden that is placed 
     on agencies and schools referred to in subsection (a); and
       ``(C) provides a justification for reporting requirements 
     described in paragraph (1) that are required solely by 
     regulation.''.
                      Subtitle D--Reauthorization

     SEC. 431. COMMODITY DISTRIBUTION PROGRAM; COMMODITY 
                   SUPPLEMENTAL FOOD PROGRAM.

       (a) Reauthorization.--The first sentence of section 4(a) of 
     the Agriculture and Consumer Protection Act of 1973 (Public 
     Law 93-86; 7 U.S.C. 612c note) is amended by striking 
     ``1995'' and inserting ``2002''.
       (b) Administrative Funding.--Section 5(a)(2) of the Act 
     (Public Law 93-86; 7 U.S.C. 612c note) is amended by striking 
     ``1995'' and inserting ``2002''.

     SEC. 432. EMERGENCY FOOD ASSISTANCE PROGRAM.

       (a) Reauthorization.--The first sentence of section 
     204(a)(1) of the Emergency Food Assistance Act of 1983 
     (Public Law 98-8; 7 U.S.C. 612c note) is amended by striking 
     ``1995'' and inserting ``2002''.
       (b) Program Termination.--Section 212 of the Act (Public 
     Law 98-8; 7 U.S.C. 612c note) is amended by striking ``1995'' 
     and inserting ``2002''.
       (c) Required Purchases of Commodities.--Section 214 of the 
     Act (Public Law 98-8; 7 U.S.C. 612c note) is amended--
       (1) in the first sentence of subsection (a), by striking 
     ``1995'' and inserting ``2002''; and
       (2) in subsection (e), by striking ``1995'' each place it 
     appears and inserting ``2002''.
       (d) Extension.--Section 13962 of the Omnibus Budget 
     Reconciliation Act of 1993 (Public Law 103-66; 107 Stat. 680) 
     is amended by striking ``1994, 1995, and 1996'' each place it 
     appears and inserting ``1994 through 2002''.

     SEC. 433. SOUP KITCHENS PROGRAM.

       Section 110 of the Hunger Prevention Act of 1988 (Public 
     Law 100-435; 7 U.S.C. 612c note) is amended--
       (1) in the first sentence of subsection (a), by striking 
     ``1995'' and inserting ``2002''; and
       (2) in subsection (c)(2)--
       (A) in the paragraph heading, by striking ``1995'' and 
     inserting ``2002''; and
       (B) by striking ``1995'' each place it appears and 
     inserting ``2002''.

     SEC. 434. NATIONAL COMMODITY PROCESSING.

       The first sentence of section 1114(a)(2)(A) of the 
     Agriculture and Food Act of 1981 (7 U.S.C. 1431e(2)(A)) is 
     amended by striking ``1995'' and inserting ``2002''.

     SEC. 435. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

       Section 5(d)(2) of the Agriculture and Consumer Protection 
     Act of 1973 (Public Law 93-86; 7 U.S.C. 612c note) is amended 
     by striking ``1995'' and inserting ``2002''.
                          TITLE V--NONCITIZENS

     SEC. 501. STATE OPTION TO PROHIBIT ASSISTANCE FOR CERTAIN 
                   ALIENS.

       A State may, at its option, prohibit the use of any grant 
     funds received under part A of title IV of the Social 
     Security Act or section 25 of the Food Stamp Act of 1977 for 
     the provision of assistance under the State programs funded 
     under such part or section for an individual who is not a 
     citizen or national of the United States.

     SEC. 502. DEEMED INCOME REQUIREMENT FOR FEDERAL AND FEDERALLY 
                   FUNDED PROGRAMS.

       (a) Deeming Requirement for Federal and Federally Funded 
     Programs.--For purposes of determining the eligibility of an 
     individual (whether a citizen or national of the United 
     States or an alien) for assistance, and the amount of 
     assistance, under any Federal program of assistance provided 
     or funded, in whole or in part, by the Federal Government for 
     which eligibility for benefits is based on need, the income 
     and resources described in subsection (b) shall, 
     notwithstanding any other provision of law, be deemed to be 
     the income and resources of such individual.
       (b) Deemed Income and Resources.--The income and resources 
     described in this subsection include the following:
       (1) The income and resources of any person who, as a 
     sponsor of such individual's entry into the United States (or 
     in order to enable such individual lawfully to remain in the 
     United States), executed an affidavit of support or similar 
     agreement with respect to such individual.
       (2) The income and resources of such sponsor's spouse.
       (c) Length of Deemed Income Period.--The requirement of 
     subsection (a) shall apply for the period for which the 
     sponsor has agreed, in such affidavit or agreement, to 
     provide support for such individual, or for a period of 5 
     years beginning on the date such individual was first 
     lawfully in the United States after the execution of such 
     affidavit or agreement, whichever period is longer.
       (d) Deemed Income Authority to State and Local Agencies.--
       (1) In general.--For purposes of determining the 
     eligibility of an individual (whether a citizen or national 
     of the United States or an alien) for assistance, and the 
     amount of assistance, under any State or local program of 
     assistance authorized under Federal law for which eligibility 
     is based on need, or any need-based program of assistance 
     authorized under Federal law and administered by a State or 
     local government other than a program described in subsection 
     (a), the State or local government may, notwithstanding any 
     other provision of law, require that the income and resources 
     described in subsection (b) be deemed to be the income and 
     resources of such individual.
       (2) Length of deeming period.--A State or local government 
     may impose a requirement described in paragraph (1) for the 
     period described in subsection (c).
       (e) Applicability of section.--
       (1) Individuals.--The provisions of this section shall not 
     apply to the eligibility of any individual who is described 
     in subclause (II), (III), (IV), or (V) of section 
     1614(a)(1)(B)(i) of the Social Security Act (42 U.S.C. 
     1382c(a)(1)(B)(i)).
       (2) Programs.--The provisions of this section shall not 
     apply to eligibility for--
       (A) emergency medical services under title XIX of the 
     Social Security Act (42 U.S.C. 1396 et seq.);
       (B) short-term emergency disaster relief;
       (C) assistance or benefits under the National School Lunch 
     Act;
       (D) assistance or benefits under the Child Nutrition Act of 
     1966; and
       (E) public health assistance for immunizations with respect 
     to immunizable diseases and for testing and treatment for 
     communicable diseases if the Secretary of Health and Human 
     Services determines that such testing and treatment is 
     necessary.
       (f) Conforming Amendments.--
       (1) Section 1621 of the Social Security Act (42 U.S.C. 
     1382j) is repealed.
       (2) Section 1614(f)(3) of such Act (42 U.S.C. 1382c(f)(3)) 
     is amended by striking ``section 1621'' and inserting 
     ``section 502 of the Work Opportunity Act of 1995''.
     SEC. 503. LIMITED ELIGIBILITY OF NONCITIZENS FOR SSI 
                   BENEFITS.

       (a) In General.--Paragraph (1) of section 1614(a) of the 
     Social Security Act (42 U.S.C. 1382c(a)) is amended--
       (1) in subparagraph (B)(i), by striking ``either'' and all 
     that follows through ``, or'' and inserting ``(I) a citizen; 
     (II) a noncitizen who is granted asylum under section 208 of 
     the Immigration and Nationality Act or whose deportation has 
     been withheld under section 243(h) of such Act for a period 
     of not more than 5 years after the date of arrival into the 
     United States; (III) a noncitizen who is admitted to the 
     United States as a refugee 

[[Page S11669]]
     under section 207 of such Act for not more than such 5-year period; 
     (IV) a noncitizen, lawfully present in any State (or any 
     territory or possession of the United States), who is a 
     veteran (as defined in section 101 of title 38, United States 
     Code) with a discharge characterized as an honorable 
     discharge and not on account of alienage or who is the spouse 
     or unmarried dependent child of such veteran; or (V) a 
     noncitizen who has worked sufficient calendar quarters of 
     coverage to be a fully insured individual for benefits under 
     title II, or''; and
       (2) by adding at the end the following new flush sentence:

     ``For purposes of subparagraph (B)(i)(IV), the determination 
     of whether a noncitizen is lawfully present in the United 
     States shall be made in accordance with regulations of the 
     Attorney General. A noncitizen shall not be considered to be 
     lawfully present in the United States for purposes of this 
     title merely because the noncitizen may be considered to be 
     permanently residing in the United States under color of law 
     for purposes of any particular program.''.
       (b) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by subsection (a) shall apply to applicants 
     for benefits for months beginning on or after the date of the 
     enactment of this Act, without regard to whether regulations 
     have been issued to implement such amendments.
       (2) Application to current recipients.--
       (A) Application and notice.--Notwithstanding any other 
     provision of law, in the case of an individual who is 
     receiving supplemental security income benefits under title 
     XVI of the Social Security Act as of the date of the 
     enactment of this Act and whose eligibility for such benefits 
     would terminate by reason of the amendments made by 
     subsection (a), such amendments shall apply with respect to 
     the benefits of such individual for months beginning on or 
     after January 1, 1997, and the Commissioner of Social 
     Security shall so notify the individual not later than 90 
     days after the date of the enactment of this Act.
       (B) Reapplication.--
       (i) In general.--Not later than 120 days after the date of 
     the enactment of this Act, each individual notified pursuant 
     to subparagraph (A) who desires to reapply for benefits under 
     title XVI of the Social Security Act shall reapply to the 
     Commissioner of Social Security.
       (ii) Determination of eligibility.--Not later than 1 year 
     after the date of the enactment of this Act, the Commissioner 
     of Social Security shall determine the eligibility of each 
     individual who reapplies for benefits under clause (i) 
     pursuant to the procedures of such title XVI.
                          TITLE VI--CHILD CARE

     SEC. 601. SHORT TITLE.

       This title may be cited as the ``Child Care and Development 
     Block Grant Amendments Act of 1995''.

     SEC. 602. AMENDMENTS TO THE CHILD CARE AND DEVELOPMENT BLOCK 
                   GRANT ACT OF 1990.

       (a) Authorization of Appropriations.--Section 658B of the 
     Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
     9858) is amended to read as follows:

     ``SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

       ``There are authorized to be appropriated to carry out this 
     subchapter $1,000,000,000 for fiscal year 1996, and such sums 
     as may be necessary for each of the fiscal years 1997 through 
     2000.''.
       (b) Lead Agency.--Section 658D(b) of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858b(b)) is 
     amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``State'' and 
     inserting ``governmental or nongovernmental''; and
       (B) in subparagraph (C), by inserting ``with sufficient 
     time and Statewide distribution of the notice of such 
     hearing,'' after ``hearing in the State''; and
       (2) in paragraph (2), by striking the second sentence.
       (c) Application and Plan.--Section 658E of the Child Care 
     and Development Block Grant Act of 1990 (42 U.S.C. 9858c) is 
     amended--
       (1) in subsection (b), by striking ``implemented--'' and 
     all that follows through ``plans.'' and inserting 
     ``implemented during a 2-year period.'';
       (2) in subsection (c)--
       (A) in paragraph (2)--
       (i) in subparagraph (A)--

       (I) in clause (iii) by striking the semicolon and inserting 
     a period; and
       (II) by striking ``except'' and all that follows through 
     ``1992.''; and

       (ii) in subparagraph (E)--

       (I) by striking clause (ii) and inserting the following new 
     clause:

       ``(ii) the State will implement mechanisms to ensure that 
     appropriate payment mechanisms exist so that proper payments 
     under this subchapter will be made to providers within the 
     State and to permit the State to furnish information to such 
     providers.''; and

       (II) by adding at the end thereof the following new 
     sentence: ``In lieu of any licensing and regulatory 
     requirements applicable under State and local law, the 
     Secretary, in consultation with Indian tribes and tribal 
     organizations, shall develop minimum child care standards 
     (that appropriately reflect tribal needs and available 
     resources) that shall be applicable to Indian tribes and 
     tribal organization receiving assistance under this 
     subchapter.''; and

       (iii) by striking subparagraphs (H) and (I); and
       (B) in paragraph (3)--
       (i) in subparagraph (C)--

       (I) in the subparagraph heading, by striking ``and to 
     increase'' and all that follows through ``care services'';
       (II) by striking ``25 percent'' and inserting ``15 
     percent''; and
       (III) by striking ``and to provide before-'' and all that 
     follows through ``658H)''; and

       (ii) by adding at the end thereof the following new 
     subparagraph:
       ``(D) Limitation on administrative costs.--Not more than 5 
     percent of the aggregate amount of payments received under 
     this subchapter by a State in each fiscal year may be 
     expended for administrative costs incurred by such State to 
     carry out all its functions and duties under this 
     subchapter.''.
       (d) Sliding Fee Scale.--
       (1) In general.--Section 658E(c)(5) of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)(5)) 
     is amended by inserting before the period the following: 
     ``and that ensures a representative distribution of funding 
     among the working poor and recipients of Federal welfare 
     assistance''.
       (2) Eligibility.--Section 658P(4)(B) of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858n(4)(B)) 
     is amended by striking ``75 percent'' and inserting ``100 
     percent''.
       (e) Quality.--Section 658G of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858e) is 
     amended--
       (1) in the matter preceding paragraph (1)--
       (A) by striking ``A State'' and inserting ``(a) In 
     General.--A State'';
       (B) by striking ``not less than 20 percent of''; and
       (C) by striking ``one or more of the following'' and 
     inserting ``carrying out the resource and referral activities 
     described in subsection (b), and for one or more of the 
     activities described in subsection (c).'';
       (2) in paragraph (1), by inserting before the period the 
     following: ``, including providing comprehensive consumer 
     education to parents and the public, referrals that honor 
     parental choice, and activities designed to improve the 
     quality and availability of child care'';
       (3) by striking ``(1) Resource and Referral Programs.--
     Operating'' and inserting the following:
       ``(b) Resource and Referral Programs.--The activities 
     described in this subsection are operating'';
       (4) by redesignating paragraphs (2) through (5) as 
     paragraphs (1) through (4), respectively;
       (5) by inserting before paragraph (1) (as so redesignated) 
     the following:
       ``(c) Other Activities.--The activities described in this 
     section are the following:''; and
       (6) by adding at the end thereof the following:
       ``(5) Before- and after-school activities.--Increasing the 
     availability of before- and after-school care.
       ``(6) Infant care.--Increasing the availability of child 
     care for infants under the age of 18 months.
       ``(7) Nontraditional work hours.--Increasing the 
     availability of child care between the hours of 5:00 p.m. and 
     8:00 a.m.
       ``(d) Nondiscrimination.--With respect to child care 
     providers that comply with applicable State law but which are 
     otherwise not required to be licensed by the State, the 
     State, in carrying out this section, may not discriminate 
     against such a provider if such provider desires to 
     participate in resource and referral activities carried out 
     under subsection (b).''.
       (f) Repeal.--Section 658H of the Child Care and Development 
     Block Grant Act of 1990 (42 U.S.C. 9858f) is repealed.
       (g) Enforcement.--Section 658I(b)(2) of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858g(b)(2)) 
     is amended--
       (1) in the matter following clause (ii) of subparagraph 
     (A), by striking ``finding and that'' and all that follows 
     through the period and inserting ``finding and may impose 
     additional program requirements on the State, including a 
     requirement that the State reimburse the Secretary for any 
     funds that were improperly expended for purposes prohibited 
     or not authorized by this subchapter, that the Secretary 
     deduct from the administrative portion of the State allotment 
     for the following fiscal year an amount that is less than or 
     equal to any improperly expended funds, or a combination of 
     such options.''; and
       (2) by striking subparagraphs (B) and (C).
       (h) Reports.--Section 658K of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858i) is 
     amended--
       (1) in the section heading, by striking ``ANNUAL REPORT'' 
     and inserting ``REPORTS''; and
       (2) in subsection (a)--
       (A) in the subsection heading, by striking ``Annual 
     Report'' and inserting ``Reports'';
       (B) by striking ``December 31, 1992, and annually 
     thereafter'' and inserting ``December 31, 1996, and every 2 
     years thereafter'';
       (C) in paragraph (2)--
       (i) in subparagraph (A), by inserting before the semicolon 
     ``and the types of child care programs under which such 
     assistance is provided'';
       (ii) by striking subparagraph (B); and
       (iii) by redesignating subparagraphs (C) and (D) as 
     subparagraphs (B) and (C), respectively;
       (D) by striking paragraph (4);

[[Page S11670]]

       (E) by redesignating paragraphs (5) and (6) as paragraphs 
     (4) and (5), respectively;
       (F) in paragraph (4), as so redesignated, by striking 
     ``and'' at the end thereof;
       (G) in paragraph (5), as so redesignated, by adding ``and'' 
     at the end thereof; and
       (H) by inserting after paragraph (5), as so redesignated, 
     the following new paragraph:
       ``(6) describing the extent and manner to which the 
     resource and referral activities are being carried out by the 
     State;''.
       (i) Report by Secretary.--Section 658L of the Child Care 
     and Development Block Grant Act of 1990 (42 U.S.C. 9858j) is 
     amended--
       (1) by striking ``1993'' and inserting ``1997'';
       (2) by striking ``annually'' and inserting ``bi-annually''; 
     and
       (3) by striking ``Education and Labor'' and inserting 
     ``Economic and Educational Opportunities''.
       (j) Allotments.--Section 658O of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858m) is 
     amended--
       (1) in subsection (c), by adding at the end thereof the 
     following new paragraph:
       ``(6) Construction or Renovation of Facilities.--
       ``(A) Request for use of funds.--An Indian tribe or tribal 
     organization may submit to the Secretary a request to use 
     amounts provided under this subsection for construction or 
     renovation purposes.
       ``(B) Determination.--With respect to a request submitted 
     under subparagraph (A), and except as provided in 
     subparagraph (C), upon a determination by the Secretary that 
     adequate facilities are not otherwise available to an Indian 
     tribe or tribal organization to enable such tribe or 
     organization to carry out child care programs in accordance 
     with this subchapter, and that the lack of such facilities 
     will inhibit the operation of such programs in the future, 
     the Secretary may permit the tribe or organization to use 
     assistance provided under this subsection to make payments 
     for the construction or renovation of facilities that will be 
     used to carry out such programs.
       ``(C) Limitation.--The Secretary may not permit an Indian 
     tribe or tribal organization to use amounts provided under 
     this subsection for construction or renovation if such use 
     will result in a decrease in the level of child care services 
     provided by the tribe or organization as compared to the 
     level of such services provided by the tribe or organization 
     in the fiscal year preceding the year for which the 
     determination under subparagraph (A) is being made.
       ``(D) Uniform procedures.--The Secretary shall develop and 
     implement uniform procedures for the solicitation and 
     consideration of requests under this paragraph.''; and
       (2) in subsection (e)--
       (A) in paragraph (1), by striking ``Any'' and inserting 
     ``Except as provided in paragraph (4), any''; and
       (B) by adding at the end thereof the following new 
     paragraph:
       ``(4) Indian tribes or tribal organizations.--Any portion 
     of a grant or contract made to an Indian tribe or tribal 
     organization under subsection (c) that the Secretary 
     determines is not being used in a manner consistent with the 
     provision of this subchapter in the period for with the grant 
     or contract is made available, shall be reallocated by the 
     Secretary to other tribes or organization that have submitted 
     applications under subsection (c) in proportion to the 
     original allocations to such tribes or organization.''.
       (k) Definitions.--Section 658P of the Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858n) is 
     amended--
       (1) in paragraph (2), in the first sentence by inserting 
     ``or as a deposit for child care services if such a deposit 
     is required of other children being cared for by the 
     provider'' after ``child care services''; and
       (2) in paragraph (5)(B)--
       (A) by inserting ``great grandchild, sibling (if the 
     provider lives in a separate residence),'' after 
     ``grandchild,'';
       (B) by striking ``is registered and''; and
       (C) by striking ``State'' and inserting ``applicable''.
       (l) Authority to Transfer Funds.--The Child Care and 
     Development Block Grant Act of 1990 (42 U.S.C. 9858 et seq.) 
     is amended by inserting after section 658S the following new 
     section:

     ``SEC. 658T. TRANSFER OF FUNDS.

       ``(a) Authority.--Of the aggregate amount of payments 
     received under this subchapter by a State in each fiscal 
     year, the State may transfer not more than 30 percent for use 
     by the State to carry out the State program funded under part 
     A of title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.).
       ``(b) Requirements Applicable to Funds Transferred.--Funds 
     transferred under subsection (a) to carry out the State 
     program specified in such subsection shall not be subject to 
     the requirements of this subchapter, but shall be subject to 
     the same requirements that apply to Federal funds provided 
     directly under such program.''.

     SEC. 603. REPEALS AND TECHNICAL AND CONFORMING AMENDMENTS.

       (a) State Dependent Care Development Grants Act.--The State 
     Dependent Care Development Grants Act (42 U.S.C. 9871 et 
     seq.) is repealed.
       (b) Child Development Associate Scholarship Assistance Act 
     of 1985.--The Child Development Associate Scholarship 
     Assistance Act of 1985 (42 U.S.C. 10901 et seq.) is repealed.
       (c) Additional Conforming Amendments.--
       (1) Recommended legislation.--After consultation with the 
     appropriate committees of the Congress and the Director of 
     the Office of Management and Budget, the Secretary of Health 
     and Human Services shall prepare and submit to the Congress a 
     legislative proposal in the form of an implementing bill 
     containing technical and conforming amendments to reflect the 
     amendments and repeals made by this title.
       (2) Submission to congress.--Not later than 6 months after 
     the date of enactment of this title, the Secretary of Health 
     and Human Services shall submit the implementing bill 
     referred to under paragraph (1).
 TITLE VII--WORKFORCE DEVELOPMENT AND WORKFORCE PREPARATION ACTIVITIES
                     Subtitle A--General Provisions

     SEC. 701. SHORT TITLE.

       This title may be cited as the ``Workforce Development Act 
     of 1995''.
     SEC. 702. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) increasing international competition, technological 
     advances, and structural changes in the United States economy 
     present new challenges to private businesses and public 
     policymakers in creating a skilled workforce with the ability 
     to adapt to change and technological progress;
       (2) despite more than 60 years of federally funded 
     employment training programs, the Federal Government has no 
     single, coherent policy guiding employment training efforts;
       (3) according to the General Accounting Office, there are 
     over 100 federally funded employment training programs, which 
     are administered by 15 different Federal agencies and cost 
     more than $20,000,000,000 annually;
       (4) many of the programs fail to collect enough performance 
     data to determine the relative effectiveness of each of the 
     programs or the effectiveness of the programs as a whole;
       (5) because of the fragmentation, duplication, and lack of 
     accountability that currently exist within and among Federal 
     employment training programs it is often difficult for 
     workers, jobseekers, and businesses to easily access the 
     services they need;
       (6) high quality, innovative vocational education programs 
     provide youth with skills and knowledge on which to build 
     successful careers and, in providing the skills and 
     knowledge, vocational education serves as the foundation of a 
     successful workforce development system;
       (7) in recent years, several States and communities have 
     begun to develop promising new initiatives such as--
       (A) school-to-work programs to better integrate youth 
     employment and education programs; and
       (B) one-stop systems to make workforce development 
     activities more accessible to workers, jobseekers, and 
     businesses; and
       (8) Federal, State, and local governments have failed to 
     adequately allow for private sector leadership in designing 
     workforce development activities that are responsive to local 
     labor market needs.
       (b) Purposes.--The purposes of this title are--
       (1) to make the United States more competitive in the world 
     economy by eliminating the fragmentation in Federal 
     employment training efforts and creating coherent, integrated 
     statewide workforce development systems designed to develop 
     more fully the academic, occupational, and literacy skills of 
     all segments of the workforce;
       (2) to ensure that all segments of the workforce will 
     obtain the skills necessary to earn wages sufficient to 
     maintain the highest quality of living in the world; and
       (3) to promote the economic development of each State by 
     developing a skilled workforce that is responsive to the 
     labor market needs of the businesses of each State.
     SEC. 703. DEFINITIONS.

       As used in this title and title VIII:
       (1) Adult education.--
       (A) In general.--The term ``adult education'' means 
     services or instruction below the college level for adults 
     who--
       (i) lack sufficient education or literacy skills to enable 
     the adults to function effectively in society; or
       (ii) do not have a certificate of graduation from a school 
     providing secondary education (as determined under State law) 
     and who have not achieved an equivalent level of education.
       (B) Adult.--As used in subparagraph (A), the term ``adult'' 
     means an individual who is age 16 or older, or beyond the age 
     of compulsory school attendance under State law, and who is 
     not enrolled in secondary school.
       (2) Area vocational education school.--The term ``area 
     vocational education school'' means--
       (A) a specialized secondary school used exclusively or 
     principally for the provision of vocational education to 
     individuals who are available for study in preparation for 
     entering the labor market;
       (B) the department of a secondary school exclusively or 
     principally used for providing vocational education in not 
     fewer than 5 different occupational fields to individuals who 
     are available for study in preparation for entering the labor 
     market;
       (C) a technical institute or vocational school used 
     exclusively or principally for the provision of vocational 
     education to individuals who have completed or left secondary 
     school and who are available for study in preparation for 
     entering the labor market, if the institute or school admits 
     as regular students both individuals who have completed 

[[Page S11671]]
     secondary school and individuals who have left secondary school; or
       (D) the department or division of a junior college, 
     community college, or university that provides vocational 
     education in not fewer than 5 different occupational fields 
     leading to immediate employment but not necessarily leading 
     to a baccalaureate degree, if the department or division 
     admits as regular students both individuals who have 
     completed secondary school and individuals who have left 
     secondary school.
       (3) At-risk youth.--The term ``at-risk youth'' means an 
     individual who--
       (A) is not less than age 15 and not more than age 24; and
       (B)(i) is determined under guidelines developed by the 
     Governing Board to be low-income, using the most recent 
     available data provided by the Bureau of the Census, prior to 
     the determination; or
       (ii) is a dependent of a family that is determined under 
     guidelines developed by the Governing Board to be low-income, 
     using such data.
       (4) Chief elected official.--The term ``chief elected 
     official'' means the chief elected officer of a unit of 
     general local government in a substate area.
       (5) Community-based organization.--The term ``community-
     based organization'' means a private nonprofit organization 
     of demonstrated effectiveness that is representative of a 
     community or a significant segment of a community and that 
     provides workforce development activities.
       (6) Covered activity.--The term ``covered activity'' means 
     an activity authorized to be carried out under a provision 
     described in section 781(b) (as such provision was in effect 
     on the day before the date of enactment of this Act).
       (7) Dislocated worker.--The term ``dislocated worker'' 
     means an individual who--
       (A) has been terminated from employment and is eligible for 
     unemployment compensation;
       (B) has received a notice of termination of employment as a 
     result of any permanent closure, or any layoff of 50 or more 
     people, at a plant, facility, or enterprise;
       (C) is long-term unemployed;
       (D) was self-employed (including a farmer and a rancher) 
     but is unemployed due to local economic conditions;
       (E) is a displaced homemaker; or
       (F) has become unemployed as a result of a Federal action 
     that limits the use of, or restricts access to, a marine 
     natural resource.
       (8) Displaced homemaker.--The term ``displaced homemaker'' 
     means an individual who was a full-time homemaker for a 
     substantial number of years, as determined under guidelines 
     developed by the Governing Board, and who no longer receives 
     financial support previously provided by a spouse or by 
     public assistance.
       (9) Economic development activities.--The term ``economic 
     development activities'' means the activities described in 
     section 716(e).
       (10) Educational service agency.--The term ``educational 
     service agency'' means a regional public multiservice agency 
     authorized by State statute to develop and manage a service 
     or program, and provide the service or program to a local 
     educational agency.
       (11) Elementary school; local educational agency; secondary 
     school.--The terms ``elementary school'', ``local educational 
     agency'' and ``secondary school'' have the meanings given the 
     terms in section 14101 of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 8801).
       (12) Federal partnership.--The term ``Federal Partnership'' 
     means the Workforce Development Partnership established in 
     section 771.
       (13) Flexible workforce activities.--The term ``flexible 
     workforce activities'' means the activities described in 
     section 716(d).
       (14) Governing board.--The term ``Governing Board'' means 
     the Governing Board of the Federal Partnership.
       (15) Individual with a disability.--
       (A) In general.--The term ``individual with a disability'' 
     means an individual with any disability (as defined in 
     section 3 of the Americans with Disabilities Act of 1990 (42 
     U.S.C. 12102)).
       (B) Individuals with disabilities.--The term ``individuals 
     with disabilities'' means more than 1 individual with a 
     disability.
       (16) Local entity.--The term ``local entity'' means a 
     public or private entity responsible for local workforce 
     development activities or workforce preparation activities 
     for at-risk youth.
       (17) Local partnership.--The term ``local partnership'' 
     means a partnership referred to in section 728(a).
       (18) Older worker.--The term ``older worker'' means an 
     individual who is age 55 or older and who is determined under 
     guidelines developed by the Governing Board to be low-income, 
     using the most recent available data provided by the Bureau 
     of the Census, prior to the determination.
       (19) Outlying area.--The term ``outlying area'' means the 
     United States Virgin Islands, Guam, American Samoa, the 
     Commonwealth of the Northern Mariana Islands, the Republic of 
     the Marshall Islands, the Federated States of Micronesia, and 
     the Republic of Palau.
       (20) Participant.--The term ``participant'' means an 
     individual participating in workforce development activities 
     or workforce preparation activities for at-risk youth, 
     provided through a statewide system.
       (21) Postsecondary educational institution.--The term 
     ``postsecondary educational institution'' means an 
     institution of higher education, as defined in section 481(a) 
     of the Higher Education Act of 1965 (20 U.S.C. 1088(a)), that 
     offers--
       (A) a 2-year program of instruction leading to an 
     associate's degree or a certificate of mastery; or
       (B) a 4-year program of instruction leading to a bachelor's 
     degree.
       (22) Rapid response assistance.--The term ``rapid response 
     assistance'' means workforce employment assistance provided 
     in the case of a permanent closure, or layoff of 50 or more 
     people, at a plant, facility, or enterprise, including the 
     establishment of on-site contact with employers and employee 
     representatives immediately after the State is notified of a 
     current or projected permanent closure, or layoff of 50 or 
     more people.
       (23) School-to-work activities.--The term ``school-to-work 
     activities'' means activities for youth that--
       (A) integrate school-based learning and work-based 
     learning;
       (B) integrate academic and occupational learning;
       (C) establish effective linkages between secondary 
     education and postsecondary education;
       (D) provide each youth participant with the opportunity to 
     complete a career major; and
       (E) provide assistance in the form of connecting activities 
     that link each youth participant with an employer in an 
     industry or occupation relating to the career major of the 
     youth participant.
       (24) State.--The term ``State'' means each of the several 
     States of the United States, the District of Columbia, and 
     the Commonwealth of Puerto Rico.
       (25) State benchmarks.--The term ``State benchmarks'', used 
     with respect to a State, means--
       (A) the quantifiable indicators established under section 
     731(c) and identified in the report submitted under section 
     731(a); and
       (B) such other quantifiable indicators of the statewide 
     progress of the State toward meeting the State goals as the 
     State may identify in the report submitted under section 
     731(a).
       (26) State educational agency.--The term ``State 
     educational agency'' means the State board of education or 
     other agency or officer primarily responsible for the State 
     supervision of public elementary or secondary schools, or, if 
     there is no such officer or agency, an officer or agency 
     designated by the chief Governor or by State law.
       (27) State goals.--The term ``State goals'', used with 
     respect to a State, means--
       (A) the goals specified in section 731(b); and
       (B) such other major goals of the statewide system of the 
     State as the State may identify in the report submitted under 
     section 731(a).
       (28) Statewide system.--The term ``statewide system'' means 
     a statewide workforce development system, referred to in 
     section 711, that is designed to integrate workforce 
     employment activities, workforce education activities, 
     flexible workforce activities, economic development 
     activities (in a State that is eligible to carry out such 
     activities), vocational rehabilitation program activities, 
     and workforce preparation activities for at-risk youth in the 
     State in order to enhance and develop more fully the 
     academic, occupational, and literacy skills of all segments 
     of the population of the State and assist participants in 
     obtaining meaningful unsubsidized employment.
       (29) Substate area.--The term ``substate area'' means a 
     geographic area designated by a Governor that reflects, to 
     the extent feasible, a local labor market in a State.
       (30) Tech-prep program.--The term ``tech-prep program'' 
     means a program of study that--
       (A) combines at least 2 years of secondary education (as 
     determined under State law) and 2 years of postsecondary 
     education in a nonduplicative sequence;
       (B) integrates academic and vocational instruction and 
     utilizes worksite learning where appropriate;
       (C) provides technical preparation in an area such as 
     engineering technology, applied science, a mechanical, 
     industrial, or practical art or trade, agriculture, a health 
     occupation, or business;
       (D) builds student competence in mathematics, science, 
     communications, and workplace skills, through applied 
     academics and integrated instruction in a coherent sequence 
     of courses;
       (E) leads to an associate degree or a certificate in a 
     specific career field; and
       (F) leads to placement in appropriate employment or further 
     education.
       (31) Vocational education.--The term ``vocational 
     education'' means organized educational programs that--
       (A) offer a sequence of courses that provide individuals 
     with the academic knowledge and skills the individuals need 
     to prepare for further education and careers in current or 
     emerging employment sectors; and
       (B) include competency-based applied learning that 
     contributes to the academic knowledge, higher-order reasoning 
     and problem-solving skills, work attitudes, general 
     employability skills, and occupational-specific skills, of an 
     individual.
       (32) Vocational rehabilitation program.--The term 
     ``vocational rehabilitation program'' means a program 
     assisted under 

[[Page S11672]]
     title I of the Rehabilitation Act of 1973 (29 U.S.C. 720 et seq.).
       (33) Welfare assistance.--The term ``welfare assistance'' 
     means--
       (A) assistance provided under part A of title IV of the 
     Social Security Act; and
       (B) assistance provided under the Food Stamp Act of 1977 (7 
     U.S.C. 2011 et seq.).
       (34) Welfare recipient.--The term ``welfare recipient'' 
     means--
       (A) an individual who receives assistance under part A of 
     title IV of the Social Security Act; and
       (B) an individual who--
       (i) is not an individual described in subparagraph (A); and
       (ii) receives assistance under the Food Stamp Act of 1977.
       (35) Workforce development activities.--The term 
     ``workforce development activities'' means workforce 
     education activities, workforce employment activities, 
     flexible workforce activities, and economic development 
     activities (within a State that is eligible to carry out such 
     activities).
       (36) Workforce education activities.--The term ``workforce 
     education activities'' means the activities described in 
     section 716(b).
       (37) Workforce employment activities.--The term ``workforce 
     employment activities'' means the activities described in 
     paragraphs (2) through (8) of section 716(a), including 
     activities described in section 716(a)(6) provided through a 
     voucher described in section 716(a)(9).
       (38) Workforce preparation activities for at-risk youth.--
     The term ``workforce preparation activities for at-risk 
     youth'' means the activities described in section 759(b), 
     carried out for at-risk youth.
          Subtitle B--Statewide Workforce Development Systems

          CHAPTER 1--PROVISIONS FOR STATES AND OTHER ENTITIES

     SEC. 711. STATEWIDE WORKFORCE DEVELOPMENT SYSTEMS 
                   ESTABLISHED.

       For program year 1998 and each subsequent program year, the 
     Governing Board shall make allotments under section 712 to 
     States to assist the States in paying for the cost of 
     establishing and carrying out activities through statewide 
     workforce development systems, in accordance with this 
     subtitle.

     SEC. 712. STATE ALLOTMENTS.

       (a) In General.--The Governing Board shall allot to each 
     State with a State plan approved under section 714 an amount 
     equal to the total of the amounts made available under 
     subparagraphs (A), (B), (C), and (D) of subsection (b)(2), 
     adjusted in accordance with subsection (c).
       (b) Allotments Based on Populations.--
       (1) Definitions.--As used in this subsection:
       (A) Adult recipient of assistance.--The term ``adult 
     recipient of assistance'' means a recipient of assistance 
     under a State program funded under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) who is not a 
     minor child (as defined in section 402(c)(1) of such Act).
       (B) Individual in poverty.--The term ``individual in 
     poverty'' means an individual who--
       (i) is not less than age 18;
       (ii) is not more than age 64; and
       (iii) is a member of a family (of 1 or more members) with 
     an income at or below the poverty line.
       (C) Poverty line.--The term ``poverty line'' means the 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2)) applicable to a family of the size involved, using 
     the most recent available data provided by the Bureau of the 
     Census, prior to the program year for which the allotment is 
     made, and applying the definition of poverty used by the 
     Bureau of the Census in compiling the 1990 decennial census.
       (2) Calculation.--Except as provided in subsection (c), 
     from the amount reserved under section 734(b)(1), the 
     Governing Board--
       (A) using funds equal to 60 percent of such reserved 
     amount, shall make available to each State an amount that 
     bears the same relationship to such funds as the total number 
     of individuals who are not less than 15 and not more than 65 
     (as determined by the Governing Board using the most recent 
     available data provided by the Bureau of the Census, prior to 
     the program year for which the allotment is made) in the 
     State bears to the total number of such individuals in all 
     States;
       (B) using funds equal to 10 percent of such reserved 
     amount, shall make available to each State an amount that 
     bears the same relationship to such funds as the total number 
     of individuals in poverty in the State bears to the total 
     number of individuals in poverty in all States;
       (C) using funds equal to 10 percent of such reserved 
     amount, shall make available to each State an amount that 
     bears the same relationship to such funds as the average 
     number of unemployed individuals (as determined by the 
     Secretary of Labor for the most recent 24-month period for 
     which data are available, prior to the program year for which 
     the allotment is made) in the State bears to the average 
     number of unemployed individuals (as so determined) in all 
     States; and
       (D) using funds equal to 20 percent of such reserved 
     amount, shall make available to each State an amount that 
     bears the same relationship to such funds as the average 
     monthly number of adult recipients of assistance (as 
     determined by the Secretary of Health and Human Services for 
     the most recent 12-month period for which data are available, 
     prior to the program year for which the allotment is made) in 
     the State bears to the average monthly number of adult 
     recipients of assistance (as so determined) in all States.
       (c) Adjustments.--
       (1) Definition.--As used in this subsection, the term 
     ``national average per capita payment'', used with respect to 
     a program year, means the amount obtained by dividing--
       (A) the total amount allotted to all States under this 
     section for the program year; by
       (B) the total number of individuals who are not less than 
     15 and not more than 65 (as determined by the Governing Board 
     using the most recent available data provided by the Bureau 
     of the Census, prior to the program year for which the 
     allotment is made) in all States.
       (2) Minimum allotment.--Except as provided in paragraph 
     (3), no State with a State plan approved under section 714 
     for a program year shall receive an allotment under this 
     section for the program year in an amount that is less than 
     0.5 percent of the amount reserved under section 734(b)(1) 
     for the program year.
       (3) Limitation.--No State that receives an increase in an 
     allotment under this section for a program year as a result 
     of the application of paragraph (2) shall receive an 
     allotment under this section for the program year in an 
     amount that is more than the product obtained by 
     multiplying--
       (A) the total number of individuals who are not less than 
     15 and not more than 65 (as determined by the Governing Board 
     using the most recent available data provided by the Bureau 
     of the Census, prior to the program year for which the 
     allotment is made) in the State; and
       (B) the product obtained by multiplying--
       (i) 1.3; and
       (ii) the national average per capita payment for the 
     program year.

     SEC. 713. STATE APPORTIONMENT BY ACTIVITY.

       (a) Activities.--From the sum of the funds made available 
     to a State through an allotment received under section 712 
     and the funds made available under section 901(c)(1)(A) of 
     the Social Security Act (42 U.S.C. 1101(c)(1)(A)) to carry 
     out this title for a program year--
       (1) a portion equal to 25 percent of such sum (which 
     portion shall include the amount allotted to the State from 
     funds made available under section 901(c)(1)(A) of the Social 
     Security Act) shall be made available for workforce 
     employment activities;
       (2) a portion equal to 25 percent of such sum shall be made 
     available for workforce education activities; and
       (3) a portion (referred to in this title as the ``flex 
     account'') equal to 50 percent of such sum shall be made 
     available for flexible workforce activities.
       (b) Recipients.--In making an allotment under section 712 
     to a State, the Governing Board shall make a payment--
       (1) to the Governor of the State for the portion described 
     in subsection (a)(1), and such part of the flex account as 
     the Governor may be eligible to receive, as determined under 
     the State plan of the State submitted under section 714; and
       (2) to the State educational agency of the State for the 
     portion described in subsection (a)(2), and such part of the 
     flex account as the State educational agency may be eligible 
     to receive, as determined under the State plan of the State 
     submitted under section 714.

     SEC. 714. STATE PLANS.

       (a) In General.--For a State to be eligible to receive an 
     allotment under section 712, the Governor of the State shall 
     submit to the Governing Board, and obtain approval of, a 
     single comprehensive State workforce development plan 
     (referred to in this section as a ``State plan''), outlining 
     a 3-year strategy for the statewide system of the State.
       (b) Parts.--
       (1) In general.--The State plan shall contain 3 parts.
       (2) Strategic plan and flexible workforce activities.--The 
     first part of the State plan shall describe a strategic plan 
     for the statewide system, including the flexible workforce 
     activities, and, if appropriate, economic development 
     activities, that are designed to meet the State goals and 
     reach the State benchmarks and are to be carried out with the 
     allotment. The Governor shall develop the first part of the 
     State plan, using procedures that are consistent with the 
     procedures described in subsection (d).
       (3) Workforce employment activities.--The second part of 
     the State plan shall describe the workforce employment 
     activities that are designed to meet the State goals and 
     reach the State benchmarks and are to be carried out with the 
     allotment. The Governor shall develop the second part of the 
     State plan.
       (4) Workforce education activities.--The third part of the 
     State plan shall describe the workforce education activities 
     that are designed to meet the State goals and reach the State 
     benchmarks and are to be carried out with the allotment. The 
     State educational agency of the State shall develop the third 
     part of the State plan.
       (c) Contents of the Plan.--The State plan shall include--
       (1) with respect to the strategic plan for the statewide 
     system--

[[Page S11673]]

       (A) information describing how the State will identify the 
     current and future workforce development needs of the 
     industry sectors most important to the economic 
     competitiveness of the State;
       (B) information describing how the State will identify the 
     current and future workforce development needs of all 
     segments of the population of the State;
       (C) information identifying the State goals and State 
     benchmarks and how the goals and benchmarks will make the 
     statewide system relevant and responsive to labor market and 
     education needs at the local level;
       (D) information describing how the State will coordinate 
     workforce development activities to meet the State goals and 
     reach the State benchmarks;
       (E) information describing the allocation within the State 
     of the funds made available through the flex account for the 
     State, and how the flexible workforce activities, including 
     school-to-work activities, to be carried out with such funds 
     will be carried out to meet the State goals and reach the 
     State benchmarks;
       (F) information identifying how the State will obtain the 
     active and continuous participation of business, industry, 
     and labor in the development and continuous improvement of 
     the statewide system;
       (G) information identifying how any funds that a State 
     receives under this subtitle will be leveraged with other 
     public and private resources to maximize the effectiveness of 
     such resources for all workforce development activities, and 
     expand the participation of business, industry, labor, and 
     individuals in the statewide system;
       (H) information describing how the State will eliminate 
     duplication in the administration and delivery of services 
     under this title;
       (I) information describing the process the State will use 
     to independently evaluate and continuously improve the 
     performance of the statewide system, on a yearly basis, 
     including the development of specific performance indicators 
     to measure progress toward meeting the State goals;
       (J) an assurance that the funds made available under this 
     subtitle will supplement and not supplant other public funds 
     expended to provide workforce development activities;
       (K) information identifying the steps that the State will 
     take over the 3 years covered by the plan to establish common 
     data collection and reporting requirements for workforce 
     development activities and vocational rehabilitation program 
     activities;
       (L) with respect to economic development activities, 
     information--
       (i) describing the activities to be carried out with the 
     funds made available under this subtitle;
       (ii) describing how the activities will lead directly to 
     increased earnings of nonmanagerial employees in the State; 
     and
       (iii) describing whether the labor organization, if any, 
     representing the nonmanagerial employees supports the 
     activities;
       (M) the description referred to in subsection (d)(1); and
       (N)(i) information demonstrating the support of individuals 
     and entities described in subsection (d)(1) for the plan; or
       (ii) in a case in which the Governor is unable to obtain 
     the support of such individuals and entities as provided in 
     subsection (d)(2), the comments referred to in subsection 
     (d)(2)(B),
       (2) with respect to workforce employment activities, 
     information--
       (A)(i) identifying and designating substate areas, 
     including urban and rural areas, to which funds received 
     through the allotment will be distributed, which areas shall, 
     to the extent feasible, reflect local labor market areas; or
       (ii) stating that the State will be treated as a substate 
     area for purposes of the application of this subtitle, if the 
     State receives an increase in an allotment under section 712 
     for a program year as a result of the application of section 
     712(c)(2); and
       (B) describing the basic features of one-stop delivery of 
     core services described in section 716(a)(2) in the State, 
     including information regarding--
       (i) the strategy of the State for developing fully 
     operational one-stop delivery of core services described in 
     section 716(a)(2);
       (ii) the time frame for achieving the strategy;
       (iii) the estimated cost for achieving the strategy;
       (iv) the steps that the State will take over the 3 years 
     covered by the plan to provide individuals with access to 
     one-stop delivery of core services described in section 
     716(a)(2);
       (v) the steps that the State will take over the 3 years 
     covered by the plan to provide information through the one-
     stop delivery to individuals on the quality of workforce 
     employment activities, workforce education activities, and 
     vocational rehabilitation program activities, provided 
     through the statewide system;
       (vi) the steps that the State will take over the 3 years 
     covered by the plan to link services provided through the 
     one-stop delivery with services provided through State 
     welfare agencies; and
       (vii) in a case in which the State chooses to use vouchers 
     to deliver workforce employment activities, the steps that 
     the State will take over the 3 years covered by the plan to 
     comply with the requirements in section 716(a)(9) and the 
     information required in such section;
       (C) identifying performance indicators that relate to the 
     State goals, and to the State benchmarks, concerning 
     workforce employment activities;
       (D) describing the workforce employment activities to be 
     carried out with funds received through the allotment;
       (E) describing the steps that the State will take over the 
     3 years covered by the plan to establish a statewide 
     comprehensive labor market information system described in 
     section 773(c) that will be utilized by all the providers of 
     one-stop delivery of core services described in section 
     716(a)(2), providers of other workforce employment 
     activities, and providers of workforce education activities, 
     in the State;
       (F) describing the steps that the State will take over the 
     3 years covered by the plan to establish a job placement 
     accountability system described in section 731(d); and
       (G)(i) describing the steps that the State will take to 
     segregate the amount allotted to the State from funds made 
     available under section 901(c)(1)(A) of the Social Security 
     Act (42 U.S.C. 1101(c)(1)(A)) from the remainder of the 
     portion described in section 713(a)(1); and
       (ii) describing how the State will use the amount allotted 
     to the State from funds made available under such section 
     901(c)(1)(A) to carry out--
       (I) the required activities described in clauses (ii) 
     through (v) of section 716(a)(2)(B) and section 773; and
       (II) any permissive activities carried out by the State 
     that consist of--

       (aa) the evaluation of programs provided through the 
     statewide system of the State;
       (bb) the provision of services through the statewide system 
     for workers who have received notice of permanent or 
     impending layoff, or workers in occupations that are 
     experiencing limited demand due to technological change, the 
     impact of imports, or plant closures; or
       (cc) the administration of the work test for the State 
     unemployment compensation system and provision of job finding 
     and placement services for unemployment insurance claimants; 
     and
       (3) with respect to workforce education activities, 
     information--
       (A) describing how funds received through the allotment 
     will be allocated among--
       (i) secondary school vocational education, or postsecondary 
     and adult vocational education, or both; and
       (ii) adult education;
       (B) identifying performance indicators that relate to the 
     State goals, and to the State benchmarks, concerning 
     workforce education activities;
       (C) describing the workforce education activities that will 
     be carried out with funds received through the allotment;
       (D) describing how the State will address the adult 
     education needs of the State;
       (E) describing how the State will disaggregate data 
     relating to at-risk youth in order to adequately measure the 
     progress of at-risk youth toward accomplishing the results 
     measured by the State goals, and the State benchmarks;
       (F) describing how the State will adequately address the 
     needs of both at-risk youth who are in school, and out-of-
     school youth, in alternative education programs that teach to 
     the same challenging academic, occupational, and skill 
     proficiencies as are provided for in-school youth;
       (G) describing how the workforce education activities 
     described in the State plan and the State allocation of funds 
     received through the allotment for such activities are an 
     integral part of comprehensive efforts of the State to 
     improve education for all students and adults;
       (H) describing how the State will annually evaluate the 
     effectiveness of the State plan with respect to workforce 
     education activities;
       (I) describing how the State will address the professional 
     development needs of the State with respect to workforce 
     education activities;
       (J) describing how the State will provide local educational 
     agencies in the State with technical assistance; and
       (K) describing how the State will assess the progress of 
     the State in implementing student performance measures.
       (d) Procedure for Development of Part of Plan Relating to 
     Strategic Plan.--
       (1) Description of development.--The part of the State plan 
     relating to the strategic plan shall include a description of 
     the manner in which--
       (A) the Governor;
       (B) the State educational agency;
       (C) representatives of business and industry, including 
     representatives of key industry sectors, and of small- and 
     medium-size and large employers, in the State;
       (D) representatives of labor and workers;
       (E) local elected officials from throughout the State;
       (F) the State agency officials responsible for vocational 
     education;
       (G) the State agency officials responsible for 
     postsecondary education;
       (H) the State agency officials responsible for adult 
     education;
       (I) the State agency officials responsible for vocational 
     rehabilitation;
       (J) such other State agency officials, including officials 
     responsible for economic development and employment, as the 
     Governor may designate;
       (K) representatives of elected officials of tribal 
     governments;
       (L) the representative of the Veterans' Employment Training 
     Service assigned to the 

[[Page S11674]]
     State under section 4103 of title 38, United States Code; and
       (M) other appropriate officials, including members of the 
     State workforce development board described in section 715, 
     if the State has established such a board;

     collaborated in the development of such part of the plan.
       (2) Failure to obtain support.--If, after a reasonable 
     effort, the Governor is unable to obtain the support of the 
     individuals and entities described in paragraph (1) for the 
     strategic plan the Governor shall--
       (A) provide such individuals and entities with copies of 
     the strategic plan;
       (B) allow such individuals and entities to submit to the 
     Governor, not later than the end of the 30-day period 
     beginning on the date on which the Governor provides such 
     individuals and entities with copies of such plan under 
     subparagraph (A), comments on such plan; and
       (C) include any such comments in such plan.
       (e) Approval.--The Governing Board shall approve a State 
     plan if the Governing Board--
       (1) determines that the plan contains the information 
     described in subsection (c);
       (2) determines that the State has prepared the plan in 
     accordance with the requirements of this section, including 
     the requirements relating to development of any part of the 
     plan; and
       (3) has negotiated State benchmarks with the State in 
     accordance with section 731(c).
       (f) No Entitlement to a Service.--Nothing in this title 
     shall be construed to provide any individual with an 
     entitlement to a service provided under this title.

     SEC. 715. STATE WORKFORCE DEVELOPMENT BOARDS.

       (a) Establishment.--A Governor of a State that receives an 
     allotment under section 712 may establish a State workforce 
     development board--
       (1) on which a majority of the members are representatives 
     of business and industry;
       (2) on which not less than 25 percent of the members shall 
     be representatives of labor, workers, and community-based 
     organizations;
       (3) that shall include representatives of veterans;
       (4) that shall include a representative of the State 
     educational agency and a representative from the State agency 
     responsible for vocational rehabilitation;
       (5) that may include any other individual or entity that 
     participates in the collaboration described in section 
     714(d)(1); and
       (6) that may include any other individual or entity the 
     Governor may designate.
       (b) Chairperson.--The State workforce development board 
     shall select a chairperson from among the members of the 
     board who are representatives of business and industry.
       (c) Functions.--The functions of the State workforce 
     development board shall include--
       (1) advising the Governor on the development of the 
     statewide system, the State plan described in section 714, 
     and the State goals and State benchmarks;
       (2) assisting in the development of specific performance 
     indicators to measure progress toward meeting the State goals 
     and reaching the State benchmarks and providing guidance on 
     how such progress may be improved;
       (3) serving as a link between business, industry, labor, 
     and the statewide system;
       (4) assisting the Governor in preparing the annual report 
     to the Governing Board regarding progress in reaching the 
     State benchmarks, as described in section 731(a);
       (5) receiving and commenting on the State plan developed 
     under section 101 of the Rehabilitation Act of 1973 (29 
     U.S.C. 721);
       (6) assisting the Governor in developing the statewide 
     comprehensive labor market information system described in 
     section 773(c) to provide information that will be utilized 
     by all the providers of one-stop delivery of core services 
     described in section 716(a)(2), providers of other workforce 
     employment activities, and providers of workforce education 
     activities, in the State; and
       (7) assisting in the monitoring and continuous improvement 
     of the performance of the statewide system, including 
     evaluation of the effectiveness of workforce development 
     activities funded under this title.
     SEC. 716. USE OF FUNDS.

       (a) Workforce Employment Activities.--
       (1) In general.--Funds made available to a State under this 
     subtitle to carry out workforce employment activities through 
     a statewide system--
       (A) shall be used to carry out the activities described in 
     paragraphs (2), (3), and (4); and
       (B) may be used to carry out the activities described in 
     paragraphs (5), (6), (7), and (8), including providing 
     activities described in paragraph (6) through vouchers 
     described in paragraph (9).
       (2) One-stop delivery of core services.--
       (A) Access.--The State shall use a portion of the funds 
     described in paragraph (1) to establish a means of providing 
     access to the statewide system through core services 
     described in subparagraph (B) available--
       (i) through multiple, connected access points, linked 
     electronically or otherwise;
       (ii) through a network that assures participants that such 
     core services will be available regardless of where the 
     participants initially enter the statewide system;
       (iii) at not less than 1 physical location in each substate 
     area of the State; or
       (iv) through some combination of the options described in 
     clauses (i), (ii), and (iii).
       (B) Core services.--The core services referred to in 
     subparagraph (A) shall, at a minimum, include--
       (i) outreach, intake, and orientation to the information 
     and other services available through one-stop delivery of 
     core services described in this subparagraph;
       (ii) initial assessment of skill levels, aptitudes, 
     abilities, and supportive service needs;
       (iii) job search and placement assistance and, where 
     appropriate, career counseling;
       (iv) customized screening and referral of qualified 
     applicants to employment;
       (v) provision of accurate information relating to local 
     labor market conditions, including employment profiles of 
     growth industries and occupations within a substate area, the 
     educational and skills requirements of jobs in the industries 
     and occupations, and the earnings potential of the jobs;
       (vi) provision of accurate information relating to the 
     quality and availability of other workforce employment 
     activities, workforce education activities, and vocational 
     rehabilitation program activities;
       (vii) provision of information regarding how the substate 
     area is performing on the State benchmarks;
       (viii) provision of initial eligibility information on 
     forms of public financial assistance that may be available in 
     order to enable persons to participate in workforce 
     employment activities, workforce education activities, or 
     vocational rehabilitation program activities; and
       (ix) referral to other appropriate workforce employment 
     activities, workforce education activities, and vocational 
     rehabilitation employment activities.
       (3) Labor market information system.--The State shall use a 
     portion of the funds described in paragraph (1) to establish 
     a statewide comprehensive labor market information system 
     described in section 773(c).
       (4) Job placement accountability system.--The State shall 
     use a portion of the funds described in paragraph (1) to 
     establish a job placement accountability system described in 
     section 731(d).
       (5) Permissible one-stop delivery activities.--The State 
     may provide, through one-stop delivery--
       (A) co-location of services related to workforce 
     development activities, such as unemployment insurance, 
     vocational rehabilitation program activities, welfare 
     assistance, veterans' employment services, or other public 
     assistance;
       (B) intensive services for participants who are unable to 
     obtain employment through the core services described in 
     paragraph (2)(B), as determined by the State; and
       (C) dissemination to employers of information on activities 
     carried out through the statewide system.
       (6) Other permissible activities.--The State may use a 
     portion of the funds described in paragraph (1) to provide 
     services through the statewide system that may include--
       (A) on-the-job training;
       (B) occupational skills training;
       (C) entrepreneurial training;
       (D) training to develop work habits to help individuals 
     obtain and retain employment;
       (E) customized training conducted with a commitment by an 
     employer or group of employers to employ an individual after 
     successful completion of the training;
       (F) rapid response assistance for dislocated workers;
       (G) skill upgrading and retraining for persons not in the 
     workforce;
       (H) preemployment and work maturity skills training for 
     youth;
       (I) connecting activities that organize consortia of small- 
     and medium-size businesses to provide work-based learning 
     opportunities for youth participants in school-to-work 
     programs;
       (J) programs for adults that combine workplace training 
     with related instruction;
       (K) services to assist individuals in attaining 
     certificates of mastery with respect to industry-based skill 
     standards;
       (L) case management services;
       (M) supportive services, such as transportation and 
     financial assistance, that enable individuals to participate 
     in the statewide system;
       (N) followup services for participants who are placed in 
     unsubsidized employment; and
       (O) workfare.
       (7) Staff development and training.--The State may use a 
     portion of the funds described in paragraph (1) for the 
     development and training of staff of providers of one-stop 
     delivery of core services described in paragraph (2), 
     including development and training relating to principles of 
     quality management.
       (8) Incentive grant awards.--The State may use a portion of 
     the funds described in paragraph (1) to award incentive 
     grants to substate areas that reach or exceed the State 
     benchmarks established under section 731(c), with an emphasis 
     on benchmarks established under section 731(c)(3). A substate 
     area that receives such a grant may use the funds made 
     available through the grant to carry out any workforce 
     development activities authorized under this title.
       (9) Vouchers.--
       (A) In general.--A State may deliver some or all of the 
     workforce employment activities described in paragraph (6) 
     that are provided under this subtitle through a system of 
     vouchers administered through the one-stop delivery of core 
     services described in paragraph (2) in the State.
       (B) Eligibility requirements.--

[[Page S11675]]

       (i) In general.--A State that chooses to deliver the 
     activities described in subparagraph (A) through vouchers 
     shall indicate in the State plan described in section 714 the 
     criteria that will be used to determine--

       (I) which workforce employment activities described in 
     paragraph (6) will be delivered through the voucher system;
       (II) eligibility requirements for participants to receive 
     the vouchers and the amount of funds that participants will 
     be able to access through the voucher system; and
       (III) which employment, training, and education providers 
     are eligible to receive payment through the vouchers.

       (ii) Considerations.--In establishing State criteria for 
     service providers eligible to receive payment through the 
     vouchers under clause (i)(III), the State shall take into 
     account industry-recognized skills standards promoted by the 
     National Skills Standards Board.
       (C) Accountability requirements.--A State that chooses to 
     deliver the activities described in paragraph (6) through 
     vouchers shall indicate in the State plan--
       (i) information concerning how the State will utilize the 
     statewide comprehensive labor market information system 
     described in section 773(c) and the job placement 
     accountability system established under section 731(d) to 
     provide timely and accurate information to participants about 
     the performance of eligible employment, training, and 
     education providers;
       (ii) other information about the performance of eligible 
     providers of services that the State believes is necessary 
     for participants receiving the vouchers to make informed 
     career choices; and
       (iii) the timeframe in which the information developed 
     under clauses (i) and (ii) will be widely available through 
     the one-stop delivery of core services described in paragraph 
     (2) in the State.
       (b) Workforce Education Activities.--The State educational 
     agency shall use the funds made available to the State 
     educational agency under this subtitle for workforce 
     education activities to carry out, through the statewide 
     system, activities that include--
       (1) integrating academic and vocational education;
       (2) linking secondary education (as determined under State 
     law) and postsecondary education, including implementing 
     tech-prep programs;
       (3) providing career guidance and counseling for students 
     at the earliest possible age, including the provision of 
     career awareness, exploration, and guidance information to 
     students and their parents that is, to the extent possible, 
     in a language and form that the students and their parents 
     understand;
       (4) providing literacy and basic education services for 
     adults and out-of-school youth, including adults and out-of-
     school youth in correctional institutions;
       (5) providing programs for adults and out-of-school youth 
     to complete their secondary education;
       (6) expanding, improving, and modernizing quality 
     vocational education programs; and
       (7) improving access to quality vocational education 
     programs for at-risk youth.
       (c) Fiscal Requirements for Workforce Education 
     Activities.--
       (1) Supplement not supplant.--Funds made available under 
     this subtitle for workforce education activities shall 
     supplement, and may not supplant, other public funds expended 
     to carry out workforce education activities.
       (2) Maintenance of effort.--
       (A) Determination.--No payments shall be made under this 
     subtitle for any program year to a State for workforce 
     education activities unless the Governing Board determines 
     that the fiscal effort per student or the aggregate 
     expenditures of such State for workforce education for the 
     program year preceding the program year for which the 
     determination is made, equaled or exceeded such effort or 
     expenditures for workforce education for the second program 
     year preceding the fiscal year for which the determination is 
     made.
       (B) Waiver.--The Governing Board may waive the requirements 
     of this section (with respect to not more than 5 percent of 
     expenditures by any State educational agency) for 1 program 
     year only, on making a determination that such waiver would 
     be equitable due to exceptional or uncontrollable 
     circumstances affecting the ability of the applicant to meet 
     such requirements, such as a natural disaster or an 
     unforeseen and precipitous decline in financial resources. No 
     level of funding permitted under such a waiver may be used as 
     the basis for computing the fiscal effort or aggregate 
     expenditures required under this section for years subsequent 
     to the year covered by such waiver. The fiscal effort or 
     aggregate expenditures for the subsequent years shall be 
     computed on the basis of the level of funding that would, but 
     for such waiver, have been required.
       (d) Flexible Workforce Activities.--
       (1) Core flexible workforce activities.--The State shall 
     use a portion of the funds made available to the State under 
     this subtitle through the flex account to carry out school-
     to-work activities through the statewide system, except that 
     any State that received a grant under subtitle B of title II 
     of the School-to-Work Opportunities Act of 1994 (20 U.S.C. 
     6141 et seq.) shall use such portion to support the continued 
     development of the statewide School-to-Work Opportunities 
     system of the State through the continuation of activities 
     that are carried out in accordance with the terms of such 
     grant.
       (2) Permissible flexible workforce activities.--The State 
     may use a portion of the funds made available to the State 
     under this subtitle through the flex account--
       (A) to carry out workforce employment activities through 
     the statewide system; and
       (B) to carry out workforce education activities through the 
     statewide system.
       (e) Economic Development Activities.--In the case of a 
     State that meets the requirements of section 728(c), the 
     State may use a portion of the funds made available to the 
     State under this subtitle through the flex account to 
     supplement other funds provided by the State or private 
     sector--
       (1) to provide customized assessments of the skills of 
     workers and an analysis of the skill needs of employers;
       (2) to assist consortia of small- and medium-size employers 
     in upgrading the skills of their workforces;
       (3) to provide productivity and quality improvement 
     training programs for the workforces of small- and medium-
     size employers;
       (4) to provide recognition and use of voluntary industry-
     developed skills standards by employers, schools, and 
     training institutions;
       (5) to carry out training activities in companies that are 
     developing modernization plans in conjunction with State 
     industrial extension service offices; and
       (6) to provide on-site, industry-specific training programs 
     supportive of industrial and economic development;

     through the statewide system.
       (f) Limitations.--
       (1) Wages.--No funds provided under this subtitle shall be 
     used to pay the wages of incumbent workers during their 
     participation in economic development activities provided 
     through the statewide system.
       (2) Relocation.--No funds provided under this subtitle 
     shall be used or proposed for use to encourage or induce the 
     relocation, of a business or part of a business, that results 
     in a loss of employment for any employee of such business at 
     the original location.
       (3) Training and assessments following relocation.--No 
     funds provided under this subtitle shall be used for 
     customized or skill training, on-the-job training, or company 
     specific assessments of job applicants or workers, for any 
     business or part of a business, that has relocated, until 120 
     days after the date on which such business commences 
     operations at the new location, if the relocation of such 
     business or part of a business, results in a loss of 
     employment for any worker of such business at the original 
     location.
       (g) Limitations on Participants.--
       (1) Diploma or equivalent.--
       (A) In general.--No individual may participate in workforce 
     employment activities described in subparagraph (A), (B), 
     (C), (E), (G), (J), or (K) of section 716(a)(6) until the 
     individual has obtained a secondary school diploma or its 
     recognized equivalent, or is enrolled in a program or course 
     of study to obtain a secondary school diploma or its 
     recognized equivalent.
       (B) Exception.--Nothing in subparagraph (A) shall prevent 
     participation in workforce employment activities described 
     under subparagraph (A), (B), (C), (E), (G), (J), or (K) of 
     section 716(a)(6) by individuals who, after testing and in 
     the judgment of medical, psychiatric, academic, or other 
     appropriate professionals, lack the requisite capacity to 
     complete successfully a course of study that would lead to a 
     secondary school diploma or its recognized equivalent.
       (2) Services.--
       (A) Referral.--If an individual who has not obtained a 
     secondary school diploma or its recognized equivalent applies 
     to participate in workforce employment activities described 
     under subparagraph (A), (B), (C), (E), (G), (J), or (K) of 
     section 716(a)(6), such individual shall be referred to State 
     approved adult education services that provide instruction 
     designed to help such individual obtain a secondary school 
     diploma or its recognized equivalent.
       (B) State provision of services.--Notwithstanding any other 
     provision of this title, a State may use funds made available 
     under section 713(a)(1) to provide State approved adult 
     education services that provide instruction designed to help 
     individuals obtain a secondary school diploma or its 
     recognized equivalent, to individuals who--
       (i) are seeking to participate in workforce employment 
     activities described under subparagraph (A), (B), (C), (E), 
     (G), (J), or (K) of section 716(a)(6); and
       (ii) are otherwise unable to obtain such services.

     SEC. 717. INDIAN WORKFORCE DEVELOPMENT ACTIVITIES.

       (a) Purpose.--
       (1) In general.--The purpose of this section is to support 
     workforce development activities for Indian and Native 
     Hawaiian individuals in order--
       (A) to develop more fully the academic, occupational, and 
     literacy skills of such individuals;
       (B) to make such individuals more competitive in the 
     workforce; and
       (C) to promote the economic and social development of 
     Indian and Native Hawaiian 

[[Page S11676]]

     communities in accordance with the goals and values of such 
     communities.
       (2)  Indian policy.--All programs assisted under this 
     section shall be administered in a manner consistent with the 
     principles of the Indian Self-Determination and Education 
     Assistance Act (25 U.S.C. 450 et seq.) and the government-to-
     government relationship between the Federal Government and 
     Indian tribal governments.
       (b) Definitions.--As used in this section:
       (1) Alaska native.--The term ``Alaska Native'' means a 
     Native as such term is defined in section 3(b) of the Alaska 
     Native Claims Settlement Act (43 U.S.C. 1602(b)).
       (2) Indian, indian tribe, and tribal organization.--The 
     terms ``Indian'', ``Indian tribe'', and ``tribal 
     organization'' have the same meanings given such terms in 
     subsections (d), (e) and (l), respectively, of section 4 of 
     the Indian Self-Determination and Education Assistance Act 
     (25 U.S.C. 450b).
       (3) Institution of higher education.--The term 
     ``institution of higher education'' has the meaning given the 
     term in section 1201(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1141(a)).
       (4) Native hawaiian and native hawaiian organization.--The 
     terms ``Native Hawaiian'' and ``Native Hawaiian 
     organization'' have the same meanings given such terms in 
     paragraphs (1) and (3), respectively, of section 9212 of the 
     Native Hawaiian Education Act (20 U.S.C. 7912).
       (5) Tribally controlled community college.--The term 
     ``tribally controlled community college'' has the same 
     meaning given such term in section 2(a)(4) of the Tribally 
     Controlled Community College Assistance Act of 1978 (25 
     U.S.C. 1801(a)(4)).
       (6) Tribally controlled postsecondary vocational 
     institution.--The term ``tribally controlled postsecondary 
     vocational institution'' means an institution of higher 
     education that--
       (A) is formally controlled, or has been formally sanctioned 
     or chartered, by the governing body of an Indian tribe or 
     Indian tribes;
       (B) offers a technical degree or certificate granting 
     program;
       (C) is governed by a board of directors or trustees, a 
     majority of whom are Indians;
       (D) demonstrates adherence to stated goals, a philosophy, 
     or a plan of operation, that fosters individual Indian 
     economic and self-sufficiency opportunity, including programs 
     that are appropriate to stated tribal goals of developing 
     individual entrepreneurships and self-sustaining economic 
     infrastructures on reservations;
       (E) has been in operation for at least 3 years;
       (F) holds accreditation with or is a candidate for 
     accreditation by a nationally recognized accrediting 
     authority for postsecondary vocational education; and
       (G) enrolls the full-time equivalent of not fewer than 100 
     students, of whom a majority are Indians.
       (c) Program Authorized.--
       (1) Assistance authorized.--From amounts made available 
     under section 734(b)(2), the Governing Board shall make 
     grants to, or enter into contracts or cooperative agreements 
     with, Indian tribes and tribal organizations, Alaska Native 
     entities, tribally controlled community colleges, tribally 
     controlled postsecondary vocational institutions, Indian-
     controlled organizations serving Indians or Alaska Natives, 
     and Native Hawaiian organizations to carry out the authorized 
     activities described in subsection (d).
       (2) Formula.--The Governing Board shall make grants to, or 
     enter into contracts and cooperative agreements with, 
     entities as described in paragraph (1) to carry out the 
     activities described in paragraphs (2) and (3) of subsection 
     (d) on the basis of a formula developed by the Governing 
     Board in consultation with entities described in paragraph 
     (1).
       (d) Authorized Activities.--
       (1) In general.--Funds made available under this section 
     shall be used to carry out the activities described in 
     paragraphs (2) and (3) that--
       (A) are consistent with this section; and
       (B) are necessary to meet the needs of Indians and Native 
     Hawaiians preparing to enter, reenter, or retain unsubsidized 
     employment.
       (2) Workforce development activities and supplemental 
     services.--
       (A) In general.--Funds made available under this section 
     shall be used for--
       (i) comprehensive workforce development activities for 
     Indians and Native Hawaiians;
       (ii) supplemental services for Indian or Native Hawaiian 
     youth on or near Indian reservations in Oklahoma, Alaska, or 
     Hawaii; and
       (iii) supplemental services to recipients of public 
     assistance on or near Indian reservations or former 
     reservation areas in Oklahoma or in Alaska.
       (B) Special rule.--Notwithstanding any other provision of 
     this section, individuals who were eligible to participate in 
     programs under section 401 of the Job Training Partnership 
     Act (29 U.S.C. 1671) (as such section was in effect on the 
     day before the date of enactment of this Act) shall be 
     eligible to participate in an activity assisted under 
     subparagraph (A)(i).
       (3) Vocational education, adult education, and literacy 
     services.--Funds made available under this section shall be 
     used for--
       (A) workforce education activities conducted by entities 
     described in subsection (c)(1); and
       (B) the support of tribally controlled postsecondary 
     vocational institutions in order to ensure continuing and 
     expanded educational opportunities for Indian students.
       (e) Program Plan.--In order to receive a grant or enter 
     into a contract or cooperative agreement under this section 
     an entity described in subsection (c)(1) shall submit to the 
     Governing Board a plan that describes a 3-year strategy for 
     meeting the needs of Indian and Native Hawaiian individuals, 
     as appropriate, in the area served by such entity. Such plan 
     shall--
       (1) be consistent with the purposes of this section;
       (2) identify the population to be served;
       (3) identify the education and employment needs of the 
     population to be served and the manner in which the services 
     to be provided will strengthen the ability of the individuals 
     served to obtain or retain unsubsidized employment;
       (4) describe the services to be provided and the manner in 
     which such services are to be integrated with other 
     appropriate services; and
       (5) describe the goals and benchmarks to be used to assess 
     the performance of entities in carrying out the activities 
     assisted under this section.
       (f) Further Consolidation of Funds.--Each entity receiving 
     assistance under this section may consolidate such assistance 
     with assistance received from related programs in accordance 
     with the provisions of the Indian Employment, Training and 
     Related Services Demonstration Act of 1992 (25 U.S.C. 3401 et 
     seq.).
       (g) Nonduplicative and Nonexclusive Services.--Nothing in 
     this section shall be construed--
       (1) to limit the eligibility of any entity described in 
     subsection (c)(1) to participate in any program offered by a 
     State or local entity under this title; or
       (2) to preclude or discourage any agreement, between any 
     entity described in subsection (c)(1) and any State or local 
     entity, to facilitate the provision of services by such 
     entity or to the population served by such entity.
       (h) Partnership Provisions.--
       (1) Office established.--The Governing Board shall 
     establish an office within the Federal Partnership to 
     administer the activities assisted under this section.
       (2) Consultation required.--
       (A) In general.--The Governing Board, through the office 
     established under paragraph (1), shall develop regulations 
     and policies for activities assisted under this section in 
     consultation with tribal organizations and Native Hawaiian 
     organizations. Such regulations and policies shall take into 
     account the special circumstances under which such activities 
     operate.
       (B) Administrative support.--The Governing Board shall 
     provide such administrative support to the office established 
     under paragraph (1) as the Governing Board determines to be 
     necessary to carry out the consultation required by 
     subparagraph (A).
       (3) Technical assistance.--The Governing Board, through the 
     office established under paragraph (1), is authorized to 
     provide technical assistance to entities described in 
     subsection (c)(1) that receive assistance under this section 
     to enable such entities to improve the workforce development 
     activities provided by such entities.

     SEC. 718. GRANTS TO OUTLYING AREAS.

       (a) General Authority.--Using funds made available under 
     section 734(b)(3), the Governing Board shall make grants to 
     outlying areas to carry out workforce development activities.
       (b) Application.--The Governing Board shall issue 
     regulations specifying the provisions of this title that 
     shall apply to outlying areas that receive funds under this 
     subtitle.

                      CHAPTER 2--LOCAL PROVISIONS

     SEC. 721. LOCAL APPORTIONMENT BY ACTIVITY.

       (a) Workforce Employment Activities.--
       (1) In general.--The sum of the funds made available to a 
     State for any program year under paragraphs (1) and (3) of 
     section 713(a) for workforce employment activities shall be 
     made available to the Governor of such State for use in 
     accordance with paragraph (2).
       (2) Distribution.--Of the sum described in paragraph (1), 
     for a program year--
       (A) 25 percent shall be reserved by the Governor to carry 
     out workforce employment activities through the statewide 
     system; and
       (B) 75 percent shall be distributed by the Governor to 
     local entities to carry out workforce employment activities 
     through the statewide system, based on--
       (i) such factors as the relative distribution among 
     substate areas of individuals who are not less than 15 and 
     not more than 65, individuals in poverty, unemployed 
     individuals, and adult recipients of assistance, as 
     determined using the definitions specified and the 
     determinations described in section 712(b); and
       (ii) such additional factors as the Governor (in 
     consultation with local partnerships described in section 
     728(a) or, where established, local workforce development 
     boards described in section 728(b)), determines to be 
     necessary.
       (b) Workforce Education Activities.--
       (1) In general.--The sum of the funds made available to a 
     State for any program year under paragraphs (2) and (3) of 
     section 713(a) for workforce education activities shall be 
     made available to the State educational agency serving such 
     State for use in accordance with paragraph (2).

[[Page S11677]]

       (2) Distribution.--Of the sum described in paragraph (1), 
     for a program year--
       (A) 20 percent shall be reserved by the State educational 
     agency to carry out statewide workforce education activities 
     through the statewide system, of which not more than 5 
     percent of such 20 percent may be used for administrative 
     expenses; and
       (B) 80 percent shall be distributed by the State 
     educational agency to entities eligible for financial 
     assistance under section 722, 723, or 724, to carry out 
     workforce education activities through the statewide system.
       (3) State determinations.--From the amount available to a 
     State educational agency under paragraph (2)(B) for a program 
     year, such agency shall determine the percentage of such 
     amount that will be distributed in accordance with sections 
     722, 723, and 724 for such year for workforce education 
     activities in such State in each of the following areas:
       (A) Secondary school vocational education, or postsecondary 
     and adult vocational education, or both; and
       (B) Adult education.
       (c) Special Rule.--Nothing in this subtitle shall be 
     construed to prohibit any individual or agency in a State 
     (other than the State educational agency) that is 
     administering workforce education activities on the day 
     preceding the date of enactment of this Act from continuing 
     to administer such activities under this subtitle.

     SEC. 722. DISTRIBUTION FOR SECONDARY SCHOOL VOCATIONAL 
                   EDUCATION.

       (a) Allocation.--Except as otherwise provided in this 
     section and section 725, each State educational agency shall 
     distribute the portion of the funds made available for any 
     program year (from funds made available for the corresponding 
     fiscal year, as determined under section 734(c)) by such 
     agency for secondary school vocational education under 
     section 721(b)(3)(A) to local educational agencies within the 
     State as follows:
       (1) Seventy percent.--From 70 percent of such portion, each 
     local educational agency shall be allocated an amount that 
     bears the same relationship to such 70 percent as the amount 
     such local educational agency was allocated under section 
     1124 of the Elementary and Secondary Education Act of 1965 
     (20 U.S.C. 6333) for the preceding fiscal year bears to the 
     total amount received under such section by all local 
     educational agencies in the State for such year.
       (2) Twenty percent.--From 20 percent of such portion, each 
     local educational agency shall be allocated an amount that 
     bears the same relationship to such 20 percent as the number 
     of students with disabilities who have individualized 
     education programs under section 614(a)(5) of the Individuals 
     with Disabilities Education Act (20 U.S.C. 1414(a)(5)) served 
     by such local educational agency for the preceding fiscal 
     year bears to the total number of such students served by all 
     local educational agencies in the State for such year.
       (3) Ten percent.--From 10 percent of such portion, each 
     local educational agency shall be allocated an amount that 
     bears the same relationship to such 10 percent as the number 
     of students enrolled in schools and adults enrolled in 
     training programs under the jurisdiction of such local 
     educational agency for the preceding fiscal year bears to the 
     number of students enrolled in schools and adults enrolled in 
     training programs under the jurisdiction of all local 
     educational agencies in the State for such year.
       (b) Minimum Allocation.--
       (1) In general.--Except as provided in paragraph (2), no 
     local educational agency shall receive an allocation under 
     subsection (a) unless the amount allocated to such agency 
     under subsection (a) is not less than $15,000. A local 
     educational agency may enter into a consortium with other 
     local educational agencies for purposes of meeting the 
     minimum allocation requirement of this paragraph.
       (2) Waiver.--The State educational agency may waive the 
     application of paragraph (1) in any case in which the local 
     educational agency--
       (A) is located in a rural, sparsely-populated area; and
       (B) demonstrates that such agency is unable to enter into a 
     consortium for purposes of providing services under this 
     section.
       (3) Redistribution.--Any amounts that are not allocated by 
     reason of paragraph (1) or (2) shall be redistributed to 
     local educational agencies that meet the requirements of 
     paragraph (1) or (2) in accordance with the provisions of 
     this section.
       (c) Limited Jurisdiction Agencies.--
       (1) In general.--In applying the provisions of subsection 
     (a), no State educational agency receiving assistance under 
     this subtitle shall allocate funds to a local educational 
     agency that serves only elementary schools, but shall 
     distribute such funds to the local educational agency or 
     regional educational agency that provides secondary school 
     services to secondary school students in the same attendance 
     area.
       (2) Special rule.--The amount to be allocated under 
     paragraph (1) to a local educational agency that has 
     jurisdiction only over secondary schools shall be determined 
     based on the number of students that entered such secondary 
     schools in the previous year from the elementary schools 
     involved.
       (d) Allocations to Area Vocational Education Schools and 
     Educational Service Agencies.--
       (1) In general.--Each State educational agency shall 
     distribute the portion of funds made available for any 
     program year by such agency for secondary school vocational 
     education under section 721(b)(3)(A) to the appropriate area 
     vocational education school or educational service agency in 
     any case in which--
       (A) the area vocational education school or educational 
     service agency, and the local educational agency concerned--
       (i) have formed or will form a consortium for the purpose 
     of receiving funds under this section; or
       (ii) have entered into or will enter into a cooperative 
     arrangement for such purpose; and
       (B)(i) the area vocational education school or educational 
     service agency serves an approximately equal or greater 
     proportion of students who are individuals with disabilities 
     or are low-income than the proportion of such students 
     attending the secondary schools under the jurisdiction of all 
     of the local educational agencies sending students to the 
     area vocational education school or the educational service 
     agency; or
       (ii) the area vocational education school, educational 
     service agency, or local educational agency demonstrates that 
     the vocational education school or educational service agency 
     is unable to meet the criterion described in clause (i) due 
     to the lack of interest by students described in clause (i) 
     in attending vocational education programs in that area 
     vocational education school or educational service agency.
       (2) Allocation basis.--If an area vocational education 
     school or educational service agency meets the requirements 
     of paragraph (1), then--
       (A) the amount that will otherwise be distributed to the 
     local educational agency under this section shall be 
     allocated to the area vocational education school, the 
     educational service agency, and the local educational agency, 
     based on each school's or agency's relative share of students 
     described in paragraph (1)(B)(i) who are attending vocational 
     education programs (based, if practicable, on the average 
     enrollment for the prior 3 years); or
       (B) such amount may be allocated on the basis of an 
     agreement between the local educational agency and the area 
     vocational education school or educational service agency.
       (3) State determination.--
       (A) In general.--For the purposes of this subsection, the 
     State educational agency may determine the number of students 
     who are low-income on the basis of--
       (i) eligibility for--

       (I) free or reduced-price meals under the National School 
     Lunch Act (7 U.S.C. 1751 et seq.);
       (II) assistance under a State program funded under part A 
     of title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.);
       (III) benefits under the Food Stamp Act of 1977 (7 U.S.C. 
     2011 et seq.); or
       (IV) services under title I of the Elementary and Secondary 
     Education Act of 1965 (20 U.S.C. 6301 et seq.); and

       (ii) another index of economic status, including an 
     estimate of such index, if the State educational agency 
     demonstrates to the satisfaction of the Governing Board that 
     such index is a more representative means of determining such 
     number.
       (B) Data.--If a State educational agency elects to use more 
     than 1 factor described in subparagraph (A) for purposes of 
     making the determination described in such subparagraph, the 
     State educational agency shall ensure that the data used is 
     not duplicative.
       (4) Appeals procedure.--The State educational agency shall 
     establish an appeals procedure for resolution of any dispute 
     arising between a local educational agency and an area 
     vocational education school or an educational service agency 
     with respect to the allocation procedures described in this 
     section, including the decision of a local educational agency 
     to leave a consortium.
       (5) Special rule.--Notwithstanding the provisions of 
     paragraphs (1), (2), (3), and (4), any local educational 
     agency receiving an allocation that is not sufficient to 
     conduct a secondary school vocational education program of 
     sufficient size, scope, and quality to be effective may--
       (A) form a consortium or enter into a cooperative agreement 
     with an area vocational education school or educational 
     service agency offering secondary school vocational education 
     programs of sufficient size, scope, and quality to be 
     effective and that are accessible to students who are 
     individuals with disabilities or are low-income, and are 
     served by such local educational agency; and
       (B) transfer such allocation to the area vocational 
     education school or educational service agency.
       (e) Special Rule.--Each State educational agency 
     distributing funds under this section shall treat a secondary 
     school funded by the Bureau of Indian Affairs within the 
     State as if such school were a local educational agency 
     within the State for the purpose of receiving a distribution 
     under this section.

     SEC. 723. DISTRIBUTION FOR POSTSECONDARY AND ADULT VOCATIONAL 
                   EDUCATION.

       (a) Allocation.--
       (1) In general.--Except as provided in subsection (b) and 
     section 725, each State educational agency, using the portion 
     of the funds made available for any program year by such 
     agency for postsecondary and adult vocational education under 
     section 721(b)(3)(A)--
       (A) shall reserve funds to carry out subsection (d); and

[[Page S11678]]

       (B) shall distribute the remainder to eligible institutions 
     or consortia of the institutions within the State.
       (2) Formula.--Each such eligible institution or consortium 
     shall receive an amount for the program year (from funds made 
     available for the corresponding fiscal year, as determined 
     under section 734(c)) from such remainder bears the same 
     relationship to such remainder as the number of individuals 
     who are Pell Grant recipients or recipients of assistance 
     from the Bureau of Indian Affairs and are enrolled in 
     programs offered by such institution or consortium for the 
     preceding fiscal year bears to the number of all such 
     individuals who are enrolled in any such program within the 
     State for such preceding year.
       (3) Consortium requirements.--In order for a consortium of 
     eligible institutions described in paragraph (1) to receive 
     assistance pursuant to such paragraph such consortium shall 
     operate joint projects that--
       (A) provide services to all postsecondary institutions 
     participating in the consortium; and
       (B) are of sufficient size, scope, and quality to be 
     effective.
       (b) Waiver for More Equitable Distribution.--The Governing 
     Board may waive the application of subsection (a) in the case 
     of any State educational agency that submits to the Governing 
     Board an application for such a waiver that--
       (1) demonstrates that the formula described in subsection 
     (a) does not result in a distribution of funds to the 
     institutions or consortia within the State that have the 
     highest numbers of low-income individuals and that an 
     alternative formula will result in such a distribution; and
       (2) includes a proposal for an alternative formula that may 
     include criteria relating to the number of individuals 
     attending the institutions or consortia within the State 
     who--
       (A) receive need-based postsecondary financial aid provided 
     from public funds;
       (B) are members of families receiving assistance under a 
     State program funded under part A of title IV of the Social 
     Security Act (42 U.S.C. 601 et seq.);
       (C) are enrolled in postsecondary educational institutions 
     that--
       (i) are funded by the State;
       (ii) do not charge tuition; and
       (iii) serve only low-income students;
       (D) are enrolled in programs serving low-income adults; or
       (E) are Pell Grant recipients.
       (c) Minimum Amount.--
       (1) In general.--No distribution of funds provided to any 
     institution or consortium for a program year under this 
     section shall be for an amount that is less than $50,000.
       (2) Redistribution.--Any amounts that are not distributed 
     by reason of paragraph (1) shall be redistributed to eligible 
     institutions or consortia in accordance with the provisions 
     of this section.
       (d) Special Rule for Criminal Offenders.--Each State 
     educational agency shall distribute the funds reserved under 
     subsection (a)(1)(A) to 1 or more State corrections agencies 
     to enable the State corrections agencies to administer 
     vocational education programs for juvenile and adult criminal 
     offenders in correctional institutions in the State, 
     including correctional institutions operated by local 
     authorities.
       (e) Definition.--For the purposes of this section--
       (1) the term ``eligible institution'' means an institution 
     of higher education, a local educational agency serving 
     adults, or an area vocational education school serving adults 
     that offers or will offer a program that seeks to receive 
     financial assistance under this section;
       (2) the term ``institution of higher education'', 
     notwithstanding section 427(b)(2) of the Higher Education 
     Amendments of 1992 (20 U.S.C. 1085 note), has the meaning 
     given the term in section 435(b) of the Higher Education Act 
     of 1965 as such section was in effect on July 22, 1992;
       (3) the term ``low-income'', used with respect to a person, 
     means a person who is determined under guidelines developed 
     by the Governing Board to be low-income, using the most 
     recent available data provided by the Bureau of the Census, 
     prior to the determination; and
       (4) the term ``Pell Grant recipient'' means a recipient of 
     financial aid under subpart 1 of part A of title IV of the 
     Higher Education Act of 1965 (20 U.S.C. 1070a et seq.).

     SEC. 724. DISTRIBUTION FOR ADULT EDUCATION.

       (a) In General.--Except as provided in subsection (b)(3), 
     from the amount made available by a State educational agency 
     for adult education under section 721(b)(3)(B) for a program 
     year, such agency shall award grants, on a competitive basis, 
     to local educational agencies, correctional education 
     agencies, community-based organizations of demonstrated 
     effectiveness, volunteer literacy organizations, public or 
     private nonprofit agencies, postsecondary educational 
     institutions, public housing authorities, and other nonprofit 
     institutions that have the ability to provide literacy 
     services to adults and families, or consortia of agencies, 
     organizations, or institutions described in this subsection, 
     to enable such agencies, organizations, institutions, and 
     consortia to establish or expand adult education programs.
       (b) Grant Requirements.--
       (1) Access.--Each State educational agency making funds 
     available for any program year for adult education under 
     section 721(b)(3)(B) shall ensure that the entities described 
     in subsection (a) will be provided direct and equitable 
     access to all Federal funds provided under this section.
       (2) Considerations.--In awarding grants under this section, 
     the State educational agency shall consider--
       (A) the past effectiveness of applicants in providing 
     services (especially with respect to recruitment and 
     retention of educationally disadvantaged adults and the 
     learning gains demonstrated by such adults);
       (B) the degree to which an applicant will coordinate and 
     utilize other literacy and social services available in the 
     community; and
       (C) the commitment of the applicant to serve individuals in 
     the community who are most in need of literacy services.
       (3) Consortia.--A State educational agency may award a 
     grant under subsection (a) to a consortium that includes an 
     entity described in subsection (a) and a for-profit agency, 
     organization, or institution, if such agency, organization, 
     or institution--
       (A) can make a significant contribution to carrying out the 
     purposes of this title; and
       (B) enters into a contract with the entity described in 
     subsection (a) for the purpose of establishing or expanding 
     adult education programs.
       (c) Local Administrative Costs Limits.--
       (1) In general.--Except as provided in paragraph (2), of 
     the funds provided under this section by a State educational 
     agency to an agency, organization, institution, or consortium 
     described in subsection (a), at least 95 percent shall be 
     expended for provision of adult education instructional 
     activities. The remainder shall be used for planning, 
     administration, personnel development, and interagency 
     coordination.
       (2) Special rule.--In cases where the cost limits described 
     in paragraph (1) will be too restrictive to allow for 
     adequate planning, administration, personnel development, and 
     interagency coordination supported under this section, the 
     State educational agency shall negotiate with the agency, 
     organization, institution, or consortium described in 
     subsection (a) in order to determine an adequate level of 
     funds to be used for noninstructional purposes.
     SEC. 725. SPECIAL RULE FOR MINIMAL ALLOCATION.

       (a) General Authority.--For any program year for which a 
     minimal amount is made available by a State educational 
     agency for distribution under section 722 or 723 such agency 
     may, notwithstanding the provisions of section 722 or 723, 
     respectively, in order to make a more equitable distribution 
     of funds for programs serving the highest numbers of low-
     income individuals (as defined in section 723(e)), distribute 
     such minimal amount--
       (1) on a competitive basis; or
       (2) through any alternative method determined by the State 
     educational agency.
       (b) Minimal Amount.--For purposes of this section, the term 
     ``minimal amount'' means not more than 15 percent of the 
     total amount made available by the State educational agency 
     under section 721(b)(3)(A) for section 722 or 723, 
     respectively, for such program year.

     SEC. 726. REDISTRIBUTION.

       (a) In General.--In any program year that an entity 
     receiving financial assistance under section 722 or 723 does 
     not expend all of the amounts distributed to such entity for 
     such year under section 722 or 723, respectively, such entity 
     shall return any unexpended amounts to the State educational 
     agency for distribution under section 722 or 723, 
     respectively.
       (b) Redistribution of Amounts Returned Late in a Program 
     Year.--In any program year in which amounts are returned to 
     the State educational agency under subsection (a) for 
     programs described in section 722 or 723 and the State 
     educational agency is unable to redistribute such amounts 
     according to section 722 or 723, respectively, in time for 
     such amounts to be expended in such program year, the State 
     educational agency shall retain such amounts for distribution 
     in combination with amounts provided under such section for 
     the following program year.
     SEC. 727. LOCAL APPLICATION FOR WORKFORCE EDUCATION 
                   ACTIVITIES.

       (a) In General.--
       (1) In general.--Each eligible entity desiring financial 
     assistance under this subtitle for workforce education 
     activities shall submit an application to the State 
     educational agency at such time, in such manner and 
     accompanied by such information as such agency (in 
     consultation with such other educational entities as the 
     State educational agency determines to be appropriate) may 
     require. Such application shall cover the same period of time 
     as the period of time applicable to the State workforce 
     development plan.
       (2) Definition.--For the purpose of this section the term 
     ``eligible entity'' means an entity eligible for financial 
     assistance under section 722, 723, or 724 from a State 
     educational agency.
       (b) Contents.--Each application described in subsection (a) 
     shall, at a minimum--
       (1) describe how the workforce education activities 
     required under section 716(b), and other workforce education 
     activities, will be carried out with funds received under 
     this subtitle;
       (2) describe how the activities to be carried out relate to 
     meeting the State goals, and reaching the State benchmarks, 
     concerning workforce education activities;

[[Page S11679]]

       (3) describe how the activities to be carried out are an 
     integral part of the comprehensive efforts of the eligible 
     entity to improve education for all students and adults;
       (4) describe the process that will be used to independently 
     and continuously improve the performance of the eligible 
     entity; and
       (5) describe how the eligible entity will coordinate the 
     activities of the entity with the activities of the local 
     workforce development board, if any, in the substate area.

     SEC. 728. LOCAL PARTNERSHIPS, AGREEMENTS, AND WORKFORCE 
                   DEVELOPMENT BOARDS.

       (a) Local Agreements.--
       (1) In general.--After a Governor submits the State plan 
     described in section 714 to the Governing Board, the Governor 
     shall negotiate and enter into a local agreement regarding 
     the workforce employment activities, school-to-work 
     activities, and economic development activities (within a 
     State that is eligible to carry out such activities, as 
     described in subsection (c)) to be carried out in each 
     substate area in the State with local partnerships (or, where 
     established, local workforce development boards described in 
     subsection (b)).
       (2) Local partnerships.--
       (A) In general.--A local partnership referred to in 
     paragraph (1) shall be established by the local chief elected 
     official, in accordance with subparagraphs (B) and (C), and 
     shall consist of individuals representing business, industry, 
     and labor, local secondary schools, local postsecondary 
     education institutions, local adult education providers, 
     local elected officials, rehabilitation agencies and 
     organizations, and community-based organizations, within the 
     appropriate substate area.
       (B) Multiple jurisdictions.--In any case in which there are 
     2 or more units of general local government in the substate 
     area involved, the chief elected official of each such unit 
     shall appoint members of the local partnership in accordance 
     with an agreement entered into by such chief elected 
     officials. In the absence of such an agreement, such 
     appointments shall be made by the Governor of the State 
     involved from the individuals nominated or recommended by the 
     chief elected officials.
       (C) Selection of business and industry representatives.--
     Individuals representing business and industry in the local 
     partnership shall be appointed by the chief elected official 
     from nominations submitted by business organizations in the 
     substate area involved. Such individuals shall reasonably 
     represent the industrial and demographic composition of the 
     business community. Where possible, at least 50 percent of 
     such business and industry representatives shall be 
     representatives of small business.
       (3) Business and industry involvement.--The business and 
     industry representatives shall have a lead role in the 
     design, management, and evaluation of the activities to be 
     carried out in the substate area under the local agreement.
       (4) Contents.--
       (A) State goals and state benchmarks.--Such an agreement 
     shall include a description of the manner in which funds 
     allocated to a substate area under this subtitle will be 
     spent to meet the State goals and reach the State benchmarks 
     in a manner that reflects local labor market conditions.
       (B) Collaboration.--The agreement shall also include 
     information that demonstrates the manner in which--
       (i) the Governor; and
       (ii) the local partnership (or, where established, the 
     local workforce development board);
     collaborated in reaching the agreement.
       (5) Failure to reach agreement.--If, after a reasonable 
     effort, the Governor is unable to enter into an agreement 
     with the local partnership (or, where established, the local 
     workforce development board), the Governor shall notify the 
     partnership or board, as appropriate, and provide the 
     partnership or board, as appropriate, with the opportunity to 
     comment, not later than 30 days after the date of the 
     notification, on the manner in which funds allocated to such 
     substate area will be spent to meet the State goals and reach 
     the State benchmarks.
       (6) Exception.--A State that indicates in the State plan 
     described in section 714 that the State will be treated as a 
     substate area for purposes of the application of this 
     subtitle shall not be subject to this subsection.
       (b) Local Workforce Development Boards.--
       (1) In general.--Each State may facilitate the 
     establishment of local workforce development boards in each 
     substate area to set policy and provide oversight over the 
     workforce development activities in the substate area.
       (2) Membership.--
       (A) State criteria.--The Governor shall establish criteria 
     for use by local chief elected officials in each substate 
     area in the selection of members of the local workforce 
     development boards, in accordance with the requirements of 
     subparagraph (B).
       (B) Representation requirement.--Such criteria shall 
     require, at a minimum, that a local workforce development 
     board consist of--
       (i) representatives of business and industry in the 
     substate area, who shall constitute a majority of the board;
       (ii) representatives of labor, workers, and community-based 
     organizations, who shall constitute not less than 25 percent 
     of the members of the board;
       (iii) representatives of local secondary schools, 
     postsecondary education institutions, and adult education 
     providers;
       (iv) representatives of veterans; and
       (v) 1 or more individuals with disabilities, or their 
     representatives.
       (C) Chair.--Each local workforce development board shall 
     select a chairperson from among the members of the board who 
     are representatives of business and industry.
       (3) Conflict of interest.--No member of a local workforce 
     development board shall vote on a matter relating to the 
     provision of services by the member (or any organization that 
     the member directly represents) or vote on a matter that 
     would provide direct financial benefit to such member or the 
     immediate family of such member or engage in any other 
     activity determined by the Governor to constitute a conflict 
     of interest.
       (4) Functions.--The functions of the local workforce 
     development board shall include--
       (A) submitting to the Governor a single comprehensive 3-
     year strategic plan for workforce development activities in 
     the substate area that includes information--
       (i) identifying the workforce development needs of local 
     industries, students, jobseekers, and workers;
       (ii) identifying the workforce development activities to be 
     carried out in the substate area with funds received through 
     the allotment made to the State under section 712, to meet 
     the State goals and reach the State benchmarks; and
       (iii) identifying how the local workforce development board 
     will obtain the active and continuous participation of 
     business, industry, and labor in the development and 
     continuous improvement of the workforce development 
     activities carried out in the substate area;
       (B) entering into local agreements with the Governor as 
     described in subsection (a);
       (C) overseeing the operations of the one-stop delivery of 
     core services described in section 716(a)(2) in the substate 
     area, including the responsibility to--
       (i) designate local entities to operate the one-stop 
     delivery in the substate area, consistent with the criteria 
     referred to in section 716(a)(2); and
       (ii) develop and approve the budgets and annual operating 
     plans of the providers of the one-stop delivery; and
       (D) submitting annual reports to the Governor on the 
     progress being made in the substate area toward meeting the 
     State goals and reaching the State benchmarks.
       (5) Consultation.--A local workforce development board that 
     serves a substate area shall conduct the functions described 
     in paragraph (4) in consultation with the chief elected 
     officials in the substate area.
       (c) Economic Development Activities.--A State shall be 
     eligible to use the funds made available through the flex 
     account for flexible workforce activities to carry out 
     economic development activities if--
       (1) the boards described in section 715 and subsection (b) 
     are established in the State; or
       (2) in the case of a State that indicates in the State plan 
     described in section 714 that the State will be treated as a 
     substate area for purposes of the application of this 
     subtitle, the board described in section 715 is established 
     in the State.

                       CHAPTER 3--ADMINISTRATION

     SEC. 731. ACCOUNTABILITY.

       (a) Report.--
       (1) In general.--Each State that receives an allotment 
     under section 712 shall annually prepare and submit to the 
     Governing Board a report that states how the State is 
     performing on State benchmarks specified in this section, 
     which relate to workforce development activities carried out 
     through the statewide system of the State. In preparing the 
     report, the State may include information on such additional 
     benchmarks as the State may establish to meet the State 
     goals.
       (2) Consolidated report.--In lieu of submitting separate 
     reports under paragraph (1) and section 409(a) of the Social 
     Security Act, the State may prepare a consolidated report. 
     Any consolidated report prepared under this paragraph shall 
     contain the information described in paragraph (1) and 
     subsections (a) through (h) of section 409 of the Social 
     Security Act. The State shall submit any consolidated report 
     prepared under this paragraph to the Governing Board, the 
     Secretary of Agriculture, and the Secretary of Health and 
     Human Services, on the dates specified in section 409(a) of 
     the Social Security Act.
       (b) Goals.--
       (1) Meaningful employment.--Each statewide system supported 
     by an allotment under section 712 shall be designed to meet 
     the goal of assisting participants in obtaining meaningful 
     unsubsidized employment opportunities in the State.
       (2) Education.--Each statewide system supported by an 
     allotment under section 712 shall be designed to meet the 
     goal of enhancing and developing more fully the academic, 
     occupational, and literacy skills of all segments of the 
     population of the State.
       (c) Benchmarks.--
       (1) Meaningful employment.--To be eligible to receive an 
     allotment under section 712, a State shall develop, in 
     accordance with paragraph (5), and identify in the State plan 
     of the State, proposed quantifiable benchmarks to measure the 
     statewide progress of the State toward meeting the goal 
     described in subsection (b)(1), which shall include, at a 
     minimum, measures of--
       (A) placement in unsubsidized employment of participants;

[[Page S11680]]

       (B) retention of the participants in such employment (12 
     months after completion of the participation); and
       (C) increased earnings for the participants.
       (2) Education.--To be eligible to receive an allotment 
     under section 712, a State shall develop, in accordance with 
     paragraph (5), and identify in the State plan of the State, 
     proposed quantifiable benchmarks to measure the statewide 
     progress of the State toward meeting the goal described in 
     subsection (b)(2), which shall include, at a minimum, 
     measures of--
       (A) student mastery of academic knowledge and work 
     readiness skills;
       (B) student mastery of occupational and industry-recognized 
     skills according to skill proficiencies for students in 
     career preparation programs;
       (C) placement in, retention in, and completion of secondary 
     education (as determined under State law) and postsecondary 
     education, and placement and retention in employment and in 
     military service; and
       (D) mastery of the literacy, knowledge, and skills adults 
     need to be productive and responsible citizens and to become 
     more actively involved in the education of their children.
       (3) Populations.--To be eligible to receive an allotment 
     under section 712, a State shall develop, in accordance with 
     paragraph (5), and identify in the State plan of the State, 
     proposed quantifiable benchmarks to measure progress toward 
     meeting the goals described in subsection (b) for populations 
     including, at a minimum--
       (A) welfare recipients (including a benchmark for welfare 
     recipients described in section 3(34)(B));
       (B) individuals with disabilities;
       (C) older workers;
       (D) at-risk youth; and
       (E) dislocated workers.
       (4) Special rule.--If a State has developed performance 
     indicators, attainment levels, or assessments for skills 
     according to challenging academic, occupational, or industry-
     recognized skill proficiencies, the State shall use such 
     performance indicators, attainment levels, or assessments in 
     measuring the progress of all students in attaining the 
     skills.
       (5) Negotiations.--
       (A) Initial determination.--On receipt of a State plan 
     submitted under section 714, the Governing Board shall, not 
     later than 30 days after the date of the receipt, determine--
       (i) how the proposed State benchmarks identified by the 
     State in the State plan compare to the model benchmarks 
     established by the Governing Board under section 
     771(b)(4)(B)(ii);
       (ii) how the proposed State benchmarks compare with State 
     benchmarks proposed by other States in their State plans; and
       (iii) whether the proposed State benchmarks, taken as a 
     whole, are sufficient--

       (I) to enable the State to meet the State goals; and
       (II) to make the State eligible for an incentive grant 
     under section 732(a).

       (B) Notification.--The Governing Board shall immediately 
     notify the State of the determinations referred to in 
     subparagraph (A). If the Governing Board determines that the 
     proposed State benchmarks are not sufficient to make the 
     State eligible for an incentive grant under section 732(a), 
     the Governing Board shall provide the State with guidance on 
     the steps the State may take to allow the State to become 
     eligible for the grant.
       (C) Revision.--Not later than 30 days after the date of 
     receipt of the notification referred to in subparagraph (B), 
     the State may revise some or all of the State benchmarks 
     identified in the State plan in order to become eligible for 
     the incentive grant or provide reasons why the State 
     benchmarks should be sufficient to make the State eligible 
     for the incentive grant.
       (D) Final determination.--After reviewing any revised State 
     benchmarks or information submitted by the State in 
     accordance with subparagraph (C), the Governing Board shall 
     issue a final determination on the eligibility of the State 
     for the incentive grant.
       (6) Incentive grants.--Each State that sets high benchmarks 
     under paragraph (1), (2), or (3) and reaches or exceeds the 
     benchmarks, as determined by the Governing Board, shall be 
     eligible to receive an incentive grant under section 732(a).
       (7) Sanctions.--A State that has failed to demonstrate 
     sufficient progress toward reaching the State benchmarks 
     established under this subsection for the 3 years covered by 
     a State plan described in section 714, as determined by the 
     Governing Board, may be subject to sanctions under section 
     732(b).
       (d) Job Placement Accountability System.--
       (1) In general.--Each State that receives an allotment 
     under section 712 shall establish a job placement 
     accountability system, which will provide a uniform set of 
     data to track the progress of the State toward reaching the 
     State benchmarks.
       (2) Data.--
       (A) In general.--In order to maintain data relating to the 
     measures described in subsection (c)(1), each such State 
     shall establish a job placement accountability system using 
     quarterly wage records available through the unemployment 
     insurance system. The State agency or entity within the State 
     responsible for labor market information, as designated in 
     section 773(c)(1)(B), in conjunction with the Commissioner of 
     Labor Statistics, shall maintain the job placement 
     accountability system and match information on participants 
     served by the statewide systems of the State and other States 
     with quarterly employment and earnings records.
       (B) Reimbursement.--Each local entity that carries out 
     workforce employment activities or workforce education 
     activities and that receives funds under this subtitle shall 
     provide information regarding the social security numbers of 
     the participants served by the entity and such other 
     information as the State may require to the State agency or 
     entity within the State responsible for labor market 
     information, as designated in section 773(c)(1)(B).
       (C) Confidentiality.--The State agency or entity within the 
     State responsible for labor market information, as designated 
     in section 773(c)(1)(B), shall protect the confidentiality of 
     information obtained through the job placement accountability 
     system through the use of recognized security procedures.
       (e) Individual Accountability.--Each State that receives an 
     allotment under section 712 shall devise and implement 
     procedures to provide, in a timely manner, information on 
     participants in activities carried out through the statewide 
     system who are participating as a condition of receiving 
     welfare assistance. The procedures shall require that the 
     State provide the information to the State and local agencies 
     carrying out the programs through which the welfare 
     assistance is provided, in a manner that ensures that the 
     agencies can monitor compliance with the conditions regarding 
     the receipt of the welfare assistance.

     SEC. 732. INCENTIVES AND SANCTIONS.

       (a) Incentives.--
       (1) In general.--The Governing Board may award incentive 
     grants of not more than $15,000,000 per program year to a 
     State that--
       (A) reaches or exceeds State benchmarks established under 
     section 731(c), with an emphasis on the benchmarks 
     established under section 731(c)(3), in accordance with 
     section 731(c)(6); or
       (B) demonstrates to the Governing Board that the State has 
     made substantial reductions in the number of adult recipients 
     of assistance, as defined in section 712(b)(1)(A), resulting 
     from increased placement of such adult recipients of 
     assistance.
       (2) Use of funds.--A State that receives such a grant may 
     use the funds made available through the grant to carry out 
     any workforce development activities authorized under this 
     title.
       (b) Sanctions.--
       (1) Failure to demonstrate sufficient progress.--If the 
     Governing Board determines, after notice and an opportunity 
     for a hearing, that a State has failed to demonstrate 
     sufficient progress toward reaching the State benchmarks 
     established under section 731(c) for the 3 years covered by a 
     State plan described in section 714, the Governing Board may 
     reduce the allotment of the State under section 712 by not 
     more than 10 percent per program year for not more than 3 
     years. The Governing Board may determine that the failure of 
     the State to demonstrate such progress is attributable to the 
     workforce employment activities, workforce education 
     activities, or flexible workforce activities, of the State, 
     and reduce only the portion of the allotment for such 
     activities.
       (2) Expenditure contrary to title.--If the Governor of a 
     State determines that a local entity that carries out 
     workforce employment activities in a substate area of the 
     State has expended funds made available under this title in a 
     manner contrary to the purposes of this title, and such 
     expenditures do not constitute fraudulent activity, the 
     Governor may deduct an amount equal to the funds from a 
     subsequent program year allocation to the substate area.
       (c) Funds Resulting From Reduced Allotments.--The Governing 
     Board may use an amount retained as a result of a reduction 
     in an allotment made under subsection (b)(1) to award an 
     incentive grant under subsection (a).

     SEC. 733. UNEMPLOYMENT TRUST FUND.

       (a) In General.--Section 901(c) of the Social Security Act 
     (42 U.S.C. 1101(c)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking clause (ii) and 
     inserting the following:
       ``(ii) the establishment and maintenance of statewide 
     workforce development systems, to the extent the systems are 
     used to carry out activities described in section 773, or in 
     any of clauses (ii) through (v) of section 716(a)(2)(B), of 
     the Workforce Development Act of 1995, and''; and
       (B) in subparagraph (B)--
       (i) in the matter preceding clause (i), by striking 
     ``Department of Labor'' and inserting ``Department of Labor 
     or the Workforce Development Partnership, as appropriate,''; 
     and
       (ii) by striking clause (iii) and inserting the following:
       ``(iii) the Workforce Development Act of 1995,''; and
       (2) in the first sentence of paragraph (4), by striking 
     ``the total cost'' and all that follows through ``the 
     President determines'' and inserting ``the total cost of 
     administering the statewide workforce development systems, to 
     the extent the systems are used to carry out activities 
     described in section 773, or in any of clauses (ii) through 
     (v) of section 716(a)(2)(B), of the Workforce Development Act 
     of 1995, and of the necessary expenses of the Workforce 
     Development Partnership for the performance of the functions 
     of the partnership under such Act, as the President 
     determines''.

[[Page S11681]]

       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect July 1, 1998.

     SEC. 734. AUTHORIZATION OF APPROPRIATIONS.

       (a) In General.--There are authorized to be appropriated to 
     carry out this title (other than subtitle C) $6,127,000,000 
     for each of fiscal years 1998 through 2001.
       (b) Reservations.--Of the amount appropriated under 
     subsection (a)--
       (1) 92.7 percent shall be reserved for making allotments 
     under section 712;
       (2) 1.25 percent shall be reserved for carrying out section 
     717;
       (3) 0.2 percent shall be reserved for carrying out section 
     718;
       (4) 4.3 percent shall be reserved for making incentive 
     grants under section 732(a) and for the administration of 
     this title;
       (5) 0.15 percent shall be reserved for carrying out 
     sections 772 and 774; and
       (6) 1.4 percent shall be reserved for carrying out section 
     773.
       (c) Program Year.--
       (1) In general.--Appropriations for any fiscal year for 
     programs and activities under this title shall be available 
     for obligation only on the basis of a program year. The 
     program year shall begin on July 1 in the fiscal year for 
     which the appropriation is made.
       (2) Administration.--Funds obligated for any program year 
     may be expended by each recipient during the program year and 
     the 2 succeeding program years and no amount shall be 
     deobligated on account of a rate of expenditure that is 
     consistent with the provisions of the State plan specified in 
     section 714 that relate to workforce employment activities.

     SEC. 735. EFFECTIVE DATE.

       This subtitle shall take effect July 1, 1998.
 Subtitle C--Job Corps and Other Workforce Preparation Activities for 
                             At-Risk Youth

                CHAPTER 1--GENERAL JOB CORPS PROVISIONS

     SEC. 741. PURPOSES.

       The purposes of this subtitle are--
       (1) to maintain a Job Corps for at-risk youth as part of 
     statewide systems;
       (2) to set forth standards and procedures for selecting 
     individuals as enrollees in the Job Corps;
       (3) to authorize the establishment of residential and 
     nonresidential Job Corps centers in which enrollees will 
     participate in intensive programs of workforce development 
     activities;
       (4) to prescribe various other powers, duties, and 
     responsibilities incident to the operation and continuing 
     development of the Job Corps; and
       (5) to assist at-risk youth who need and can benefit from 
     an unusually intensive program, operated in a group setting, 
     to become more responsible, employable, and productive 
     citizens.

     SEC. 742. DEFINITIONS.

       As used in this subtitle:
       (1) Enrollee.--The term ``enrollee'' means an individual 
     enrolled in the Job Corps.
       (2) Governor.--The term ``Governor'' means the chief 
     executive officer of a State.
       (3) Job corps.--The term ``Job Corps'' means the corps 
     described in section 743.
       (4) Job corps center.--The term ``Job Corps center'' means 
     a center described in section 743.
     SEC. 743. GENERAL AUTHORITY.

       If a State receives an allotment under section 759, and a 
     center located in the State received assistance under part B 
     of title IV of the Job Training Partnership Act for fiscal 
     year 1996 and was not closed in accordance with section 755, 
     the State shall use a portion of the funds made available 
     through the allotment to maintain the center, and carry out 
     activities described in this subtitle for individuals 
     enrolled in a Job Corps and assigned to the center.

     SEC. 744. INDIVIDUALS ELIGIBLE FOR THE JOB CORPS.

       To be eligible to become an enrollee, an individual shall 
     be an at-risk youth.

     SEC. 745. SCREENING AND SELECTION OF APPLICANTS.

       (a) Standards and Procedures.--
       (1) In general.--The State shall prescribe specific 
     standards and procedures for the screening and selection of 
     applicants for the Job Corps.
       (2) Implementation.--To the extent practicable, the 
     standards and procedures shall be implemented through 
     arrangements with--
       (A) one-stop career centers;
       (B) agencies and organizations such as community action 
     agencies, professional groups, and labor organizations; and
       (C) agencies and individuals that have contact with youth 
     over substantial periods of time and are able to offer 
     reliable information about the needs and problems of the 
     youth.
       (3) Consultation.--The standards and procedures shall 
     provide for necessary consultation with individuals and 
     organizations, including court, probation, parole, law 
     enforcement, education, welfare, and medical authorities and 
     advisers.
       (b) Special Limitations.--No individual shall be selected 
     as an enrollee unless the individual or organization 
     implementing the standards and procedures determines that--
       (1) there is a reasonable expectation that the individual 
     can participate successfully in group situations and 
     activities, is not likely to engage in behavior that would 
     prevent other enrollees from receiving the benefit of the 
     program or be incompatible with the maintenance of sound 
     discipline and satisfactory relationships between the Job 
     Corps center to which the individual might be assigned and 
     surrounding communities; and
       (2) the individual manifests a basic understanding of both 
     the rules to which the individual will be subject and of the 
     consequences of failure to observe the rules.

     SEC. 746. ENROLLMENT AND ASSIGNMENT.

       (a) Relationship Between Enrollment and Military 
     Obligations.--Enrollment in the Job Corps shall not relieve 
     any individual of obligations under the Military Selective 
     Service Act (50 U.S.C. App. 451 et seq.).
       (b) Assignment.--
       (1) In general.--Except as provided in paragraph (2), the 
     State shall assign an enrollee to the Job Corps center within 
     the State that is closest to the residence of the enrollee.
       (2) Agreements with other states.--The State may enter into 
     agreements with 1 or more States to enroll individuals from 
     the States in the Job Corps and assign the enrollees to Job 
     Corps centers in the State.

     SEC. 747. JOB CORPS CENTERS.

       (a) Development.--The State shall enter into an agreement 
     with a Federal, State, or local agency, which may be a State 
     board or agency that operates or wishes to develop an area 
     vocational education school facility or residential 
     vocational school, or with a private organization, for the 
     establishment and operation of a Job Corps center.
       (b) Character and Activities.--Job Corps centers may be 
     residential or nonresidential in character, and shall be 
     designed and operated so as to provide enrollees, in a well-
     supervised setting, with access to activities described in 
     section 748.
       (c) Civilian Conservation Centers.--The Job Corps centers 
     may include Civilian Conservation Centers, located primarily 
     in rural areas, which shall provide, in addition to other 
     training and assistance, programs of work experience to 
     conserve, develop, or manage public natural resources or 
     public recreational areas or to develop community projects in 
     the public interest.
       (d) Job Corps Operators.--To be eligible to receive funds 
     under this chapter, an entity who entered into a contract 
     with the Secretary of Labor that is in effect on the 
     effective date of this section to carry out activities 
     through a center under part B of title IV of the Job Training 
     Partnership Act (as in effect on the day before the effective 
     date of this section), shall enter into a contract with the 
     State in which the center is located that contains provisions 
     substantially similar to the provisions of the contract with 
     the Secretary of Labor, as determined by the State.

     SEC. 748. PROGRAM ACTIVITIES.

       (a) Activities Provided Through Job Corps Centers.--Each 
     Job Corps center shall provide enrollees assigned to the 
     center with access to activities described in section 
     716(a)(2)(B), and such other workforce development activities 
     as may be appropriate to meet the needs of the enrollees, 
     including providing work-based learning throughout the 
     enrollment of the enrollees and assisting the enrollees in 
     obtaining meaningful unsubsidized employment on completion of 
     their enrollment.
       (b) Arrangements.--The State shall arrange for enrollees 
     assigned to Job Corps centers in the State to receive 
     workforce development activities through the statewide 
     system, including workforce development activities provided 
     through local public or private educational agencies, 
     vocational educational institutions, or technical institutes.
       (c) Job Placement Accountability.--Each Job Corps center 
     located in a State shall be connected to the job placement 
     accountability system of the State described in section 
     731(d).

     SEC. 749. SUPPORT.

       The State shall provide enrollees assigned to Job Corps 
     centers in the State with such personal allowances as the 
     State may determine to be necessary or appropriate to meet 
     the needs of the enrollees.

     SEC. 750. OPERATING PLAN.

       To be eligible to operate a Job Corps center and receive 
     assistance under section 759 for program year 1998 or any 
     subsequent program year, an entity shall prepare and submit, 
     to the Governor of the State in which the center is located, 
     and obtain the approval of the Governor for, an operating 
     plan that shall include, at a minimum, information 
     indicating--
       (1) in quantifiable terms, the extent to which the center 
     will contribute to the achievement of the proposed State 
     goals and State benchmarks identified in the State plan for 
     the State submitted under section 714;
       (2) the extent to which workforce employment activities and 
     workforce education activities delivered through the Job 
     Corps center are directly linked to the workforce development 
     needs of the industry sectors most important to the economic 
     competitiveness of the State; and
       (3) an implementation strategy to ensure that all enrollees 
     assigned to the Job Corps center will have access to services 
     through the one-stop delivery of core services described in 
     section 716(a)(2) by the State.

     SEC. 751. STANDARDS OF CONDUCT.

       (a) Provision and Enforcement.--The State shall provide, 
     and directors of Job Corps center shall stringently enforce, 
     standards of conduct within the centers. Such standards of 
     conduct shall include provisions forbidding violence, drug 
     abuse, and other criminal activity.

[[Page S11682]]

       (b) Disciplinary Measures.--To promote the proper moral and 
     disciplinary conditions in the Job Corps, the directors of 
     Job Corps centers shall take appropriate disciplinary 
     measures against enrollees. If such a director determines 
     that an enrollee has committed a violation of the standards 
     of conduct, the director shall dismiss the enrollee from the 
     Corps if the director determines that the retention of the 
     enrollee in the Corps will jeopardize the enforcement of such 
     standards or diminish the opportunities of other enrollees. 
     If the director determines that an enrollee has engaged in an 
     incident involving violence, drug abuse, or other criminal 
     activity, the director shall immediately dismiss the enrollee 
     from the Corps.
       (c) Appeal.--A disciplinary measure taken by a director 
     under this section shall be subject to expeditious appeal in 
     accordance with procedures established by the State.

     SEC. 752. COMMUNITY PARTICIPATION.

       The State shall encourage and cooperate in activities to 
     establish a mutually beneficial relationship between Job 
     Corps centers in the State and nearby communities. The 
     activities may include the use of any local workforce 
     development boards established in the State under section 
     728(b) to provide a mechanism for joint discussion of common 
     problems and for planning programs of mutual interest.

     SEC. 753. COUNSELING AND PLACEMENT.

       The State shall ensure that enrollees assigned to Job Corps 
     centers in the State receive counseling and job placement 
     services, which shall be provided, to the maximum extent 
     practicable, through the delivery of core services described 
     in section 716(a)(2).

     SEC. 754. LEASES AND SALES OF CENTERS.

       (a) Leases.--
       (1) In general.--The Secretary of Labor shall offer to 
     enter into a lease with each State that has an approved State 
     plan submitted under section 714 and in which 1 or more Job 
     Corps centers are located.
       (2) Nominal consideration.--Under the terms of the lease, 
     the Secretary of Labor shall lease the Job Corps centers in 
     the State to the State in return for nominal consideration.
       (3) Indemnity agreement.--To be eligible to lease such a 
     center, a State shall enter into an agreement to hold 
     harmless and indemnify the United States from any liability 
     or claim for damages or injury to any person or property 
     arising out of the lease.
       (b) Sales.--Notwithstanding the Federal Property and 
     Administrative Services Act of 1949 (40 U.S.C. 471 et seq.), 
     the Secretary of Labor shall offer each State described in 
     subsection (a)(1) the opportunity to purchase the Job Corps 
     centers in the State in return for nominal consideration.
     SEC. 755. CLOSURE OF JOB CORPS CENTERS.

       (a) National Job Corps Audit.--Not later than March 31, 
     1997, the Governing Board shall conduct an audit of the 
     activities carried out under part B of title IV of the Job 
     Training Partnership Act (29 U.S.C. 1691 et seq.), and submit 
     to the appropriate committees of Congress a report containing 
     the results of the audit, including information indicating--
       (1) the amount of funds expended for fiscal year 1996 to 
     carry out activities under such part, for each State and for 
     the United States;
       (2) for each Job Corps center funded under such part 
     (referred to in this subtitle as a ``Job Corps center''), the 
     amount of funds expended for fiscal year 1996 under such part 
     to carry out activities related to the direct operation of 
     the center, including funds expended for student training, 
     outreach or intake activities, meals and lodging, student 
     allowances, medical care, placement or settlement activities, 
     and administration;
       (3) for each Job Corps center, the amount of funds expended 
     for fiscal year 1996 under such part through contracts to 
     carry out activities not related to the direct operation of 
     the center, including funds expended for student travel, 
     national outreach, screening, and placement services, 
     national vocational training, and national and regional 
     administrative costs;
       (4) for each Job Corps center, the amount of funds expended 
     for fiscal year 1996 under such part for facility 
     construction, rehabilitation, and acquisition expenses; and
       (5) the amount of funds required to be expended under such 
     part to complete each new or proposed Job Corps center, and 
     to rehabilitate and repair each existing Job Corps center, as 
     of the date of the submission of the report.
       (b) Recommendations of Governing Board.--
       (1) Recommendations.--The Governing Board shall, based on 
     the results of the audit described in subsection (a), make 
     recommendations to the Secretary of Labor, including 
     identifying 25 Job Corps centers to be closed by September 
     30, 1997.
       (2) Considerations.--
       (A) In general.--In determining whether to recommend that 
     the Secretary of Labor close a Job Corps center, the 
     Governing Board shall consider whether the center--
       (i) has consistently received low performance measurement 
     ratings under the Department of Labor or the Office of 
     Inspector General Job Corps rating system;
       (ii) is among the centers that have experienced the highest 
     number of serious incidents of violence or criminal activity 
     in the past 5 years;
       (iii) is among the centers that require the largest funding 
     for renovation or repair, as specified in the Department of 
     Labor Job Corps Construction/Rehabilitation Funding Needs 
     Survey, or for rehabilitation or repair, as reflected in the 
     portion of the audit described in subsection (a)(5);
       (iv) is among the centers for which the highest relative or 
     absolute fiscal year 1996 expenditures were made, for any of 
     the categories of expenditures described in paragraph (2), 
     (3), or (4) of subsection (a), as reflected in the audit 
     described in subsection (a);
       (v) is among the centers with the least State and local 
     support; or
       (vi) is among the centers with the lowest rating on such 
     additional criteria as the Governing Board may determine to 
     be appropriate.
       (B) Coverage of states and regions.--Notwithstanding 
     subparagraph (A), the Governing Board shall not recommend 
     that the Secretary of Labor close the only Job Corps center 
     in a State or a region of the United States.
       (C) Allowance for new job corps centers.--Notwithstanding 
     any other provision of this section, if the planning or 
     construction of a Job Corps center that received Federal 
     funding for fiscal year 1994 or 1995 has not been completed 
     by the date of enactment of this Act--
       (i) the appropriate entity may complete the planning or 
     construction and begin operation of the center; and
       (ii) the Governing Board shall not evaluate the center 
     under this title sooner than 3 years after the first date of 
     operation of the center.
       (3)  Report.--Not later than June 30, 1997, the Governing 
     Board shall submit a report to the Secretary of Labor, which 
     shall contain a detailed statement of the findings and 
     conclusions of the Governing Board resulting from the audit 
     described in subsection (a) together with the recommendations 
     described in paragraph (1).
       (c) Closure.--The Secretary of Labor shall, after reviewing 
     the report submitted under subsection (b)(3), close 25 Job 
     Corps centers by September 30, 1997.

     SEC. 756. INTERIM OPERATING PLANS FOR JOB CORPS CENTERS.

       Part B of title IV of the Job Training Partnership Act (29 
     U.S.C. 1691 et seq.) is amended by inserting after section 
     439 the following section:

     ``SEC. 439A. OPERATING PLAN.

       ``(a) Submission of Plan.--To be eligible to operate a Job 
     Corps center and receive assistance under this part for 
     fiscal year 1997, an entity shall prepare and submit to the 
     Secretary and the Governor of the State in which the center 
     is located, and obtain the approval of the Secretary for, an 
     operating plan that shall include, at a minimum, information 
     indicating--
       ``(1) in quantifiable terms, the extent to which the center 
     will contribute to the achievement of the proposed State 
     goals and State benchmarks identified in the interim plan for 
     the State submitted under section 762 of the Workforce 
     Development Act of 1995;
       ``(2) the extent to which workforce employment activities 
     and workforce education activities delivered through the Job 
     Corps center are directly linked to the workforce development 
     needs of the industry sectors most important to the economic 
     competitiveness of the State; and
       ``(3) an implementation strategy to ensure that all 
     enrollees assigned to the Job Corps center will have access 
     to services through the one-stop delivery of core services 
     described in section 716(a)(2) by the State as identified in 
     the interim plan.
       ``(b) Submission of Comments.--Not later than 30 days after 
     receiving an operating plan described in subsection (a), the 
     Governor of the State in which the center is located may 
     submit comments on the plan to the Secretary.
       ``(c) Approval.--The Secretary shall not approve an 
     operating plan described in subsection (a) for a center if 
     the Secretary determines that the activities proposed to be 
     carried out through the center are not sufficiently 
     integrated with the activities carried out through the 
     statewide system of the State in which the center is 
     located.''.

     SEC. 757. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), this 
     chapter shall take effect on July 1, 1998.
       (b) Interim Provisions.--Sections 754 and 755, and the 
     amendment made by section 756, shall take effect on the date 
     of enactment of this Act.

  CHAPTER 2--OTHER WORKFORCE PREPARATION ACTIVITIES FOR AT-RISK YOUTH

     SEC. 759. WORKFORCE PREPARATION ACTIVITIES FOR AT-RISK YOUTH.

       (a) In General.--For program year 1998 and each subsequent 
     program year, the Governing Board shall make allotments under 
     subsection (c) to States to assist the States in paying for 
     the cost of carrying out workforce preparation activities for 
     at-risk youth, as described in this section.
       (b) State Use of Funds.--
       (1) Core activities.--The State shall use a portion of the 
     funds made available to the State through an allotment 
     received under subsection (c) to establish and operate Job 
     Corps centers as described in chapter 1, if a center located 
     in the State received assistance under part B of title IV of 
     the Job Training Partnership Act for fiscal year 1996 and was 
     not closed in accordance with section 755.
       (2) Permissible activities.--The State may use a portion of 
     the funds described in paragraph (1) to--

[[Page S11683]]

       (A) make grants to eligible entities, as described in 
     subsection (e), to assist the entities in carrying out 
     innovative programs to assist out-of-school at-risk youth in 
     participating in school-to-work activities;
       (B) make grants to eligible entities, as described in 
     subsection (e), to assist the entities in providing work-
     based learning as a component of school-to-work activities, 
     including summer jobs linked to year-round school-to-work 
     programs; and
       (C) carry out other workforce development activities 
     specifically for at-risk youth.
       (c) Allotments.--
       (1) In general.--The Governing Board shall allot to each 
     State an amount equal to the total of--
       (A) the amount made available to the State under paragraph 
     (2); and
       (B) the amounts made available to the State under 
     subparagraphs (C), (D), and (E) of paragraph (3).
       (2) Allotments based on fiscal year 1996 appropriations.--
     Using a portion of the funds appropriated under subsection 
     (g) for a fiscal year, the Governing Board shall make 
     available to each State the amount that Job Corps centers in 
     the State expended for fiscal year 1996 under part B of title 
     IV of the Job Training Partnership Act to carry out 
     activities related to the direct operation of the centers, as 
     determined under section 755(a)(2).
       (3) Allotments based on populations.--
       (A) Definitions.--As used in this paragraph:
       (i) Individual in poverty.--The term ``individual in 
     poverty'' means an individual who--

       (I) is not less than age 18;
       (II) is not more than age 64; and
       (III) is a member of a family (of 1 or more members) with 
     an income at or below the poverty line.

       (ii) Poverty line.--The term ``poverty line'' means the 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Community Services Block Grant Act (42 U.S.C. 
     9902(2)) applicable to a family of the size involved, using 
     the most recent available data provided by the Bureau of the 
     Census, prior to the program year for which the allotment is 
     made, and applying the definition of poverty used by the 
     Bureau of the Census in compiling the 1990 decennial census.
       (B) Total allotments.--The Governing Board shall use the 
     remainder of the funds that are appropriated under subsection 
     (g) for a fiscal year, and that are not made available under 
     paragraph (2), to make amounts available under this 
     paragraph.
       (C) Unemployed individuals.--From funds equal to 33\1/3\ 
     percent of such remainder, the Governing Board shall make 
     available to each State an amount that bears the same 
     relationship to such funds as the average number of 
     unemployed individuals (as determined by the Secretary of 
     Labor for the most recent 24-month period for which data are 
     available, prior to the program year for which the allotment 
     is made) in the State bears to the average number of 
     unemployed individuals (as so determined) in the United 
     States.
       (D) Individuals in poverty.--From funds equal to 33\1/3\ 
     percent of such remainder, the Governing Board shall make 
     available to each State an amount that bears the same 
     relationship to such funds as the total number of individuals 
     in poverty in the State bears to the total number of 
     individuals in poverty in the United States.
       (E) At-risk youth.--From funds equal to 33\1/3\ percent of 
     such remainder, the Governing Board shall make available to 
     each State an amount that bears the same relationship to such 
     funds as the total number of at-risk youth in the State bears 
     to the total number of at-risk youth in the United States.
       (d) State Plan.--
       (1) Information.--To be eligible to receive an allotment 
     under subsection (c), a State shall include, in the State 
     plan to be submitted under section 714, information 
     describing the allocation within the State of the funds made 
     available through the allotment, and how the programs and 
     activities described in subsection (b)(2) will be carried out 
     to meet the State goals and reach the State benchmarks.
       (2) Limitation.--The Governing Board may not require a 
     State to include the information described in paragraph (1) 
     in the State plan to be submitted under section 714 to be 
     eligible to receive an allotment under section 712.
       (e) Application.--To be eligible to receive a grant under 
     subparagraph (A) or (B) of subsection (b)(2) from a State, an 
     entity shall prepare and submit to the Governor of the State 
     an application at such time, in such manner, and containing 
     such information as the Governor may require.
       (f) Within State Distribution.--Of the funds allotted to a 
     State under subsection (c)(3) for workforce preparation 
     activities for at-risk youth for a program year--
       (1) 15 percent shall be reserved by the Governor to carry 
     out such activities through the statewide system; and
       (2) 85 percent shall be distributed to local entities to 
     carry out such activities through the statewide system.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated to carry out this subtitle, $2,100,000,000 
     for each of fiscal years 1998 through 2001.
       (h) Effective Date.--This chapter shall take effect on July 
     1, 1998.
                   Subtitle D--Transition Provisions

     SEC. 761. WAIVERS.

       (a) Waiver Authority.--
       (1) In general.--Notwithstanding any other provision of 
     Federal law, and except as provided in subsection (d), the 
     Secretary may waive any requirement under any provision of 
     law relating to a covered activity, or of any regulation 
     issued under such a provision, for--
       (A) a State that requests such a waiver and submits an 
     application as described in subsection (b); or
       (B) a local entity that requests such a waiver and complies 
     with the requirements of subsection (c);

     in order to assist the State or local entity in planning or 
     developing a statewide system or workforce development 
     activities to be carried out through the statewide system.
       (2) Term.--
       (A) In general.--Except as provided in subparagraph (B), 
     each waiver approved pursuant to this section shall be for a 
     period beginning on the date of the approval and ending on 
     June 30, 1998.
       (B) Failure to submit interim plan.--If a State receives a 
     waiver under this section and fails to submit an interim plan 
     under section 762 by June 30, 1997, the waiver shall be 
     deemed to terminate on September 30, 1997. If a local entity 
     receives a waiver under this section, and the State in which 
     the local entity is located fails to submit an interim plan 
     under section 762 by June 30, 1997, the waiver shall be 
     deemed to terminate on September 30, 1997.
       (b) State Request for Waiver.--
       (1) In general.--A State may submit to the Secretary a 
     request for a waiver of 1 or more requirements referred to in 
     subsection (a). The request may include a request for 
     different waivers with respect to different areas within the 
     State.
       (2) Application.--To be eligible to receive a waiver 
     described in subsection (a), a State shall submit an 
     application to the Secretary at such time, in such manner, 
     and containing such information as the Secretary may require, 
     including information--
       (A) identifying the requirement to be waived and the goal 
     that the State (or the local agency applying to the State 
     under subsection (c)) intends to achieve through the waiver;
       (B) identifying, and describing the actions that the State 
     will take to remove, similar State requirements;
       (C) describing the activities to which the waiver will 
     apply, including information on how the activities may be 
     continued, or related to activities carried out, under the 
     statewide system of the State;
       (D) describing the number and type of persons to be 
     affected by such waiver; and
       (E) providing evidence of support for the waiver request by 
     the State agencies or officials with jurisdiction over the 
     requirement to be waived.
       (c) Local Entity Request for Waiver.--
       (1) In general.--A local entity that seeks a waiver of such 
     a requirement shall submit to the State a request for the 
     waiver and an application containing sufficient information 
     to enable the State to comply with the requirements of 
     subsection (b)(2). The State shall determine whether to 
     submit a request and an application for a waiver to the 
     Secretary, as provided in subsection (b).
       (2) Time limit.--
       (A) In general.--The State shall make a determination 
     concerning whether to submit the request and application for 
     a waiver as described in paragraph (1) not later than 30 days 
     after the date on which the State receives the application 
     from the local entity.
       (B) Direct submission.--
       (i) In general.--If the State does not make a determination 
     to submit or does not submit the request and application 
     within the 30-day time period specified in subparagraph (A), 
     the local entity may submit the request and application to 
     the Secretary.
       (ii) Requirements.--In submitting such a request, the local 
     entity shall obtain the agreement of the State involved to 
     comply with the requirements of this section that would 
     otherwise apply to a State submitting a request for a waiver. 
     In reviewing an application submitted by a local entity, the 
     Secretary shall comply with the requirements of this section 
     that would otherwise apply to the Secretary with respect to 
     review of such an application submitted by a State.
       (d) Waivers Not Authorized.--The Secretary may not waive 
     any requirement of any provision referred to in subsection 
     (a), or of any regulation issued under such provision, 
     relating to--
       (1) the allocation of funds to States, local entities, or 
     individuals;
       (2) public health or safety, civil rights, occupational 
     safety and health, environmental protection, displacement of 
     employees, or fraud and abuse;
       (3) the eligibility of an individual for participation in a 
     covered activity, except in a case in which the State or 
     local entity can demonstrate that the individuals who would 
     have been eligible to participate in such activity without 
     the waiver will participate in a similar covered activity; or
       (4) a required supplementation of funds by the State or a 
     prohibition against the State supplanting such funds.
       (e) Activities.--Subject to subsection (d), the Secretary 
     may approve a request for a waiver described in subsection 
     (a) that would enable a State or local entity to--
       (1) use the assistance that would otherwise have been used 
     to carry out 2 or more covered activities (if the State or 
     local entity 

[[Page S11684]]
     were not using the assistance as described in this section)--
       (A) to address the high priority needs of unemployed 
     persons and at-risk youth in the appropriate State or 
     community for workforce employment activities or workforce 
     education activities;
       (B) to improve efficiencies in the delivery of the covered 
     activities; or
       (C) in the case of overlapping or duplicative activities--
       (i) by combining the covered activities and funding the 
     combined activities; or
       (ii) by eliminating 1 of the covered activities and 
     increasing the funding to the remaining covered activity; and
       (2) use the assistance that would otherwise have been used 
     for administrative expenses relating to a covered activity 
     (if the State or local entity were not using the assistance 
     as described in this section) to pay for the cost of 
     developing an interim State plan described in section 762 or 
     a State plan described in section 714.
       (f) Approval or Disapproval.--The Secretary shall approve 
     or disapprove any request submitted pursuant to subsection 
     (b) or (c), not later than 45 days after the date of the 
     submission and shall issue a decision that shall include the 
     reasons for approving or disapproving the request.
       (g) Failure To Act.--If the Secretary fails to approve or 
     disapprove the request within the 45-day period described in 
     subsection (f), the request shall be deemed to be approved on 
     the day after such period ends. If the Secretary subsequently 
     determines that the waiver relates to a matter described in 
     subsection (d) and issues a decision that includes the 
     reasons for the determination, the waiver shall be deemed to 
     terminate on the date of issuance of the decision.
       (h) Definition.--As used in this section:
       (1) Local entity.--The term ``local entity'' means--
       (A) a local educational agency, with respect to any act by 
     a local agency or organization relating to a covered activity 
     that is a workforce education activity; and
       (B) the local public or private agency or organization 
     responsible for carrying out the covered activity at issue, 
     with respect to any act by a local agency or organization 
     relating to any other covered activity.
       (2) Secretary.--The term ``Secretary'' means--
       (A) the Secretary of Labor, with respect to any act 
     relating to a covered activity carried out by the Secretary 
     of Labor;
       (B) the Secretary of Education, with respect to any act 
     relating to a covered activity carried out by the Secretary 
     of Education; and
       (C) the Secretary of Health and Human Services, with 
     respect to any act relating to a covered activity carried out 
     by the Secretary of Health and Human Services.
       (3) State.--The term ``State'' means--
       (A) a State educational agency, with respect to any act by 
     a State entity relating to a covered activity that is a 
     workforce education activity; and
       (B) the Governor, with respect to any act by a State entity 
     relating to any other covered activity.
       (i) Conforming Amendments.--
       (1) Section 501 of the School-to-Work Opportunities Act of 
     1994 (20 U.S.C. 6211) is amended--
       (A) in subsection (a), by striking ``sections 502 and 503'' 
     and inserting ``section 502'';
       (B) in subsection (b)(2)(B)(ii)--
       (i) by striking ``section 502(a)(1)(C) or 503(a)(1)(C), as 
     appropriate,'' and inserting ``section 502(a)(1)(C)''; and
       (ii) by striking ``section 502 or 503, as appropriate,'' 
     and inserting ``section 502'';
       (C) in subsection (c), by striking ``section 502 or 503'' 
     and inserting ``section 502''; and
       (D) by striking ``Secretaries'' each place the term appears 
     and inserting ``Secretary of Education''.
       (2) Section 502(b) of such Act (20 U.S.C. 6212(b)) is 
     amended--
       (A) in paragraph (4), by striking the semicolon and 
     inserting ``; and'';
       (B) in paragraph (5), by striking ``; and'' and inserting a 
     period; and
       (C) by striking paragraph (6).
       (3) Section 503 of such Act (20 U.S.C. 6213) is repealed.
       (4) Section 504 of such Act (20 U.S.C. 6214) is amended--
       (A) in subsection (a)(2)(B), by striking clauses (i) and 
     (ii) and inserting the following clauses:
       ``(i) the provisions of law listed in paragraphs (2) 
     through (5) of section 502(b);
       ``(ii) the Job Training Partnership Act (29 U.S.C. 1501 et 
     seq.); and
       ``(iii) the Carl D. Perkins Vocational and Applied 
     Technology Education Act (20 U.S.C. 2301 et seq.).''; and
       (B) in subsection (b), by striking ``paragraphs (1) through 
     (3), and paragraphs (5) and (6), of section 503(b)'' and 
     inserting ``paragraphs (2) through (4) and paragraphs (6) and 
     (7) of section 505(b)''.
       (5) Section 505(b) of such Act (20 U.S.C. 6215(b)) is 
     amended to read as follows:
       ``(b) Use of Funds.--A State may use, under the 
     requirements of this Act, Federal funds that are made 
     available to the State and combined under subsection (a) to 
     carry out school-to-work activities, except that the 
     provisions relating to--
       ``(1) the matters specified in section 502(c);
       ``(2) basic purposes or goals;
       ``(3) maintenance of effort;
       ``(4) distribution of funds;
       ``(5) eligibility of an individual for participation;
       ``(6) public health or safety, labor standards, civil 
     rights, occupational safety and health, or environmental 
     protection; or
       ``(7) prohibitions or restrictions relating to the 
     construction of buildings or facilities;

     that relate to the program through which the funds described 
     in subsection (a)(2)(B) were made available, shall remain in 
     effect with respect to the use of such funds.''.

     SEC. 762. INTERIM STATE PLANS.

       (a) In General.--For a State or local entity in a State to 
     use a waiver received under section 761 through June 30, 
     1998, and for a State to be eligible to submit a State plan 
     described in section 714 for program year 1998, the Governor 
     of the State shall submit an interim State plan to the 
     Governing Board. The Governor shall submit the plan not later 
     than June 30, 1997.
       (b) Requirements.--The interim State plan shall comply with 
     the requirements applicable to State plans described in 
     section 714.
       (c) Program Year.--In submitting the interim State plan, 
     the Governor shall indicate whether the plan is submitted--
       (1) for review and approval for program year 1997; or
       (2) solely for review.
       (d) Review.--In reviewing an interim State plan, the 
     Governing Board may--
       (1) in the case of a plan submitted for review and approval 
     for program year 1997--
       (A) approve the plan and permit the State to use a waiver 
     as described in section 761 to carry out the plan; or
       (B) disapprove the plan, and provide to the State reasons 
     for the disapproval and technical assistance for developing 
     an approvable plan to be submitted under section 714 for 
     program year 1998; and
       (2) in the case of a plan submitted solely for review, 
     review the plan and provide to the State technical assistance 
     for developing an approvable plan to be submitted under 
     section 714 for program year 1998.
       (e) Effect of Disapproval.--Disapproval of an interim plan 
     shall not affect the ability of a State to use a waiver as 
     described in section 761 through June 30, 1998.

     SEC. 763. APPLICATIONS AND PLANS UNDER COVERED ACTS.

       Notwithstanding any other provision of law, no State or 
     local entity shall be required to comply with any provision 
     of a covered Act that would otherwise require the entity to 
     submit an application or a plan to a Federal agency during 
     fiscal year 1996 or 1997 for funding of a covered activity. 
     In determining whether to provide funding to the State or 
     local entity for the covered activity, the Secretary of 
     Education, the Secretary of Labor, or the Secretary of Health 
     and Human Services, as appropriate, shall consider the last 
     application or plan, as appropriate, submitted by the entity 
     for funding of the covered activity.

     SEC. 764. INTERIM ADMINISTRATION OF SCHOOL-TO-WORK PROGRAMS.

       (a) In General.--Any provision of the School-to-Work 
     Opportunities Act of 1994 (20 U.S.C. 6101 et seq.) that 
     grants authority to the Secretary of Labor or the Secretary 
     of Education shall be considered to grant the authority to 
     the Governing Board.
       (b) Effective Date.--Subsection (a) shall take effect on 
     October 1, 1996.

     SEC. 765. INTERIM AUTHORIZATIONS OF APPROPRIATIONS.

       (a) Older American Community Service Employment Act.--
     Section 508(a)(1) of the Older American Community Service 
     Employment Act (42 U.S.C. 3056f(a)(1)) is amended by striking 
     ``for fiscal years 1993, 1994, and 1995'' and inserting ``for 
     each of fiscal years 1993 through 1998''.
       (b) Carl D. Perkins Vocational and Applied Technology 
     Education Act.--
       (1) In general.--Section 3(a) of the Carl D. Perkins 
     Vocational and Applied Technology Education Act (20 U.S.C. 
     2302(a)) is amended by striking ``for each of the fiscal 
     years'' and all that follows through ``1995'' and inserting 
     ``for each of fiscal years 1992 through 1998''.
       (2) Research.--Section 404(d) of such Act (20 U.S.C. 
     2404(d)) is amended by striking ``for each of the fiscal 
     years'' and all that follows through ``1995'' and inserting 
     ``for each of fiscal years 1992 through 1998''.
       (c) Adult Education Act.--
       (1) In general.--Section 313(a) of the Adult Education Act 
     (20 U.S.C. 1201b(a)) is amended by striking ``for each of the 
     fiscal years'' and all that follows through ``1995'' and 
     inserting ``for each of fiscal years 1993 through 1998''.
       (2) State literacy resource centers.--Section 356(k) of 
     such Act (20 U.S.C. 1208aa(k)) is amended by striking ``for 
     each of the fiscal years 1994 and 1995'' and inserting ``for 
     each of fiscal years 1994 through 1998''.
       (3) Business, industry, labor, and education partnerships 
     for workplace literacy.--Section 371(e)(1) of such Act (20 
     U.S.C. 1211(e)(1)) is amended by striking ``for each of the 
     fiscal years'' and all that follows through ``1995'' and 
     inserting ``for each of fiscal years 1993 through 1998''.
       (4) National institute for literacy.--Section 384(n)(1) of 
     such Act (20 U.S.C. 1213c(n)(1)) is amended by striking ``for 
     each of the fiscal years'' and all that follows through 
     ``1996'' and inserting ``for each of fiscal years 1992 
     through 1998''.
                    Subtitle E--National Activities

     SEC. 771. FEDERAL PARTNERSHIP.

       (a) Establishment.--There is established a Workforce 
     Development Partnership that shall administer the activities 
     established under this title. The Federal Partnership 

[[Page S11685]]
     shall be a Government corporation, as defined in section 103 of title 
     5, United States Code. The principal office of the Federal 
     Partnership shall be located in the District of Columbia.
       (b) Governing Board.--
       (1) Composition.--There shall be in the Federal Partnership 
     a Governing Board that shall be composed of 13 individuals, 
     including--
       (A) 7 individuals who are representative of business and 
     industry in the United States, appointed by the President by 
     and with the advice and consent of the Senate;
       (B) 2 individuals who are representative of labor and 
     workers in the United States, appointed by the President by 
     and with the advice and consent of the Senate;
       (C) 2 individuals who are representative of education 
     providers, 1 of whom is a State or local adult education 
     provider and 1 of whom is a State or local vocational 
     education provider, appointed by the President by and with 
     the advice and consent of the Senate; and
       (D) 2 Governors, representing different political parties, 
     appointed by the President by and with the advice and consent 
     of the Senate.
       (2) Terms.--Each member of the Governing Board shall serve 
     for a term of 3 years, except that, as designated by the 
     President--
       (A) 5 of the members first appointed to the Governing Board 
     shall serve for a term of 2 years;
       (B) 4 of the members first appointed to the Governing Board 
     shall serve for a term of 3 years; and
       (C) 4 of the members first appointed to the Governing Board 
     shall serve for a term of 4 years.
       (3) Vacancies.--Any vacancy in the Governing Board shall 
     not affect the powers of the Governing Board, but shall be 
     filled in the same manner as the original appointment. Any 
     member appointed to fill such a vacancy shall serve for the 
     remainder of the term for which the predecessor of such 
     member was appointed.
       (4) Duties and powers.--
       (A) Powers.--The powers of the Federal Partnership shall be 
     vested in the Governing Board.
       (B) Duties.--The Governing Board shall--
       (i) oversee the development and implementation of the 
     nationwide integrated labor market information system 
     described in section 773, and the job placement 
     accountability system described in section 731(d);
       (ii) establish model benchmarks for each of the benchmarks 
     referred to in paragraph (1), (2), or (3) of section 731(c), 
     at achievable levels based on existing (as of the date of the 
     establishment of the benchmarks) workforce development 
     efforts in the States;
       (iii) negotiate State benchmarks with States in accordance 
     with section 731(c)(5);
       (iv) review and approve plans under section 714, and make 
     allotments under section 712;
       (v) receive and review reports described in section 731(a);
       (vi) prepare and submit to the appropriate committees of 
     Congress an annual report on the absolute and relative 
     performance of States toward reaching the State benchmarks;
       (vii) award annual incentive grants under section 732(a);
       (viii) initiate sanctions described in section 732(b);
       (ix) disseminate information to States on the best 
     practices used by States to establish and carry out 
     activities through statewide systems, including model 
     programs to provide structured work and learning experiences 
     for welfare recipients;
       (x) perform the duties specified for the Governing Board in 
     subtitles C and D;
       (xi) review all federally funded programs providing 
     workforce development activities, other than programs carried 
     out under this title, and submit recommendations to Congress 
     on how the federally funded programs could be integrated into 
     the statewide systems of the States, including 
     recommendations on the development of common terminology for 
     activities and services provided through the programs;
       (xii) review and approve the transition workplans developed 
     by the Secretary of Labor and the Secretary of Education in 
     accordance with sections 775 and 776; and
       (xiii) oversee all activities of the Federal Partnership.
       (C) Final determinations.--Notwithstanding any other 
     provision of this title, the Secretary of Labor and the 
     Secretary of Education shall jointly make the final 
     determinations with respect to the approval of State plans, 
     and the disbursement of funds, under this title.
       (5) Chairperson.--The position of Chairperson of the 
     Governing Board shall rotate annually among the appointed 
     members described in paragraph (1)(A).
       (6) Meetings.--The Governing Board shall meet at the call 
     of the Chairperson but not less often than 4 times during 
     each calendar year. Five members of the Governing Board shall 
     constitute a quorum. All decisions of the Governing Board 
     with respect to the exercise of the duties and powers of the 
     Governing Board shall be made by a majority vote of the 
     members of the Governing Board.
       (7) Compensation and travel expenses.--
       (A) Compensation.--Each member of the Governing Board who 
     is not an officer or employee of the Federal Government shall 
     be compensated at a rate to be fixed by the President but not 
     to exceed the daily equivalent of the maximum rate authorized 
     for a position above GS-15 of the General Schedule under 
     section 5108 of title 5, United States Code, for each day 
     (including travel time) during which such member is engaged 
     in the performance of the duties of the Governing Board. All 
     members of the Governing Board who are officers or employees 
     of the United States shall serve without compensation in 
     addition to compensation received for their services as 
     officers or employees of the United States.
       (B) Expenses.--While away from their homes or regular 
     places of business on the business of the Governing Board, 
     members of such Governing Board shall be allowed travel 
     expenses, including per diem in lieu of subsistence, at rates 
     authorized for employees of agencies under subchapter I of 
     chapter 57 of title 5, United States Code, for persons 
     employed intermittently in the Government service.
       (8) Date of appointment.--The Governing Board shall be 
     appointed not later than September 30, 1996.
       (c) Director.--
       (1) In general.--There shall be in the Federal Partnership 
     a Director, who shall be appointed by the President, by and 
     with the advice and consent of the Senate.
       (2) Compensation.--The Director shall be compensated at the 
     rate provided for level IV of the Executive Schedule under 
     section 5315 of title 5, United States Code.
       (3) Duties.--The Director shall--
       (A) make recommendations to the Governing Board regarding 
     the activities described in subsection (b)(4)(B); and
       (B) carry out the general administration and enforcement of 
     this title.
       (4) Date of appointment.--The Director shall be appointed 
     not later than September 30, 1996.
       (d) Detail of Government Employees.--Any Federal Government 
     employee may be detailed to the Federal Partnership without 
     reimbursement, and such detail shall be without interruption 
     or loss of civil service or privilege. The Secretary of 
     Education, the Secretary of Labor, and the Secretary of 
     Health and Human Services shall detail a sufficient number of 
     employees to the Federal Partnership for the period beginning 
     October 1, 1996 and ending June 30, 1998 to enable the 
     Federal Partnership to carry out the functions of the Federal 
     Partnership during such period.
       (e) Inspector General.--There shall be an Office of the 
     Inspector General in the Federal Partnership. The Office 
     shall be headed by an Inspector General appointed in 
     accordance with the Inspector General Act of 1978 (5 U.S.C. 
     App.). The Inspector General shall carry out the duties 
     prescribed in such Act.
       (f) Authorization of Appropriations.--There is authorized 
     to be appropriated for fiscal years 1996 and 1997 $500,000 to 
     the Governing Board for the administration of this title.
       (g) Conforming Amendment.--Section 11 of the Inspector 
     General Act of 1978 (5 U.S.C. App.) is amended--
       (1) in paragraph (1), by inserting ``the Governing Board of 
     the Workforce Development Partnership;'' after ``the Attorney 
     General;''; and
       (2) in paragraph (2), by inserting ``the Workforce 
     Development Partnership;'' after ``Treasury;''.
     SEC. 772. NATIONAL ASSESSMENT OF VOCATIONAL EDUCATION 
                   PROGRAMS.

       (a) In General.--The Assistant Secretary for Educational 
     Research and Improvement (referred to in this section as the 
     ``Assistant Secretary'') shall conduct a national assessment 
     of vocational education programs assisted under this title, 
     through studies and analyses conducted independently through 
     competitive awards.
       (b) Independent Advisory Panel.--The Assistant Secretary 
     shall appoint an independent advisory panel, consisting of 
     vocational education administrators, educators, researchers, 
     and representatives of business, industry, labor, and other 
     relevant groups, to advise the Assistant Secretary on the 
     implementation of such assessment, including the issues to be 
     addressed and the methodology of the studies involved, and 
     the findings and recommendations resulting from the 
     assessment. The panel, in the discretion of the panel, may 
     submit to Congress an independent analysis of the findings 
     and recommendations resulting from the assessment. The 
     Federal Advisory Committee Act (5 U.S.C. App.) shall not 
     apply to the panel established under this subsection.
       (c) Contents.--The assessment required under subsection (a) 
     shall include descriptions and evaluations of--
       (1) the effect of this title on State and tribal 
     administration of vocational education programs and on local 
     vocational education practices, including the capacity of 
     State, tribal, and local vocational education systems to 
     address the purposes of this title;
       (2) expenditures at the Federal, State, tribal, and local 
     levels to address program improvement in vocational 
     education, including the impact of Federal allocation 
     requirements (such as within-State distribution formulas) on 
     the delivery of services;
       (3) preparation and qualifications of teachers of 
     vocational and academic curricula in vocational education 
     programs, as well as shortages of such teachers;
       (4) participation in vocational education programs;
       (5) academic and employment outcomes of vocational 
     education, including analyses of--
       (A) the effect of educational reform on vocational 
     education;
       (B) the extent and success of integration of academic and 
     vocational curricula;

[[Page S11686]]

       (C) the success of the school-to-work transition; and
       (D) the degree to which vocational training is relevant to 
     subsequent employment;
       (6) employer involvement in, and satisfaction with, 
     vocational education programs;
       (7) the effect of benchmarks, performance measures, and 
     other measures of accountability on the delivery of 
     vocational education services; and
       (8) the degree to which minority students are involved in 
     vocational student organizations.
       (d) Consultation.--
       (1) In general.--The Secretary of Education shall consult 
     with the Committee on Economic and Educational Opportunities 
     of the House of Representatives and the Committee on Labor 
     and Human Resources of the Senate in the design and 
     implementation of the assessment required under subsection 
     (a).
       (2) Reports.--The Secretary of Education shall submit to 
     Congress--
       (A) an interim report regarding the assessment on or before 
     January 1, 2000; and
       (B) a final report, summarizing all studies and analyses 
     that relate to the assessment and that are completed after 
     the assessment, on or before July 1, 2000.
       (3) Prohibition.--Notwithstanding any other provision of 
     law or regulation, the reports required by this subsection 
     shall not be subject to any review outside of the Office of 
     Educational Research and Improvement before their transmittal 
     to Congress, but the President, the Secretary, and the 
     independent advisory panel established under subsection (b) 
     may make such additional recommendations to Congress with 
     respect to the assessment as the President, Secretary, or 
     panel determine to be appropriate.
       (e) Effective Date.--This section shall take effect on July 
     1, 1998.
     SEC. 773. LABOR MARKET INFORMATION.

       (a) Federal Responsibilities.--The Governing Board, in 
     accordance with the provisions of this section, shall oversee 
     the development, maintenance, and continuous improvement of a 
     nationwide integrated labor market information system that 
     shall include--
       (1) statistical data from cooperative statistical survey 
     and projection programs and data from administrative 
     reporting systems, that, taken together, shall enumerate, 
     estimate, and project the supply and demand for labor at the 
     substate, State, and national levels in a timely manner, 
     including data on--
       (A) the demography, socioeconomic characteristics, and 
     current employment status of the substate, State, and 
     national populations (as of the date of the collection of the 
     data), including self-employed, part-time, and seasonal 
     workers;
       (B) job vacancies, education and training requirements, 
     skills, wages, benefits, working conditions, and industrial 
     distribution, of occupations, as well as current and 
     projected employment opportunities and trends by industry and 
     occupation;
       (C) the educational attainment, training, skills, skill 
     levels, and occupations of the populations;
       (D) information maintained in a longitudinal manner on the 
     quarterly earnings, establishment and industry affiliation, 
     and geographic location of employment for all individuals for 
     whom the information is collected by the States; and
       (E) the incidence, industrial and geographical location, 
     and number of workers displaced by permanent layoffs and 
     plant closings;
       (2) State and substate area employment and consumer 
     information (which shall be current, comprehensive, 
     automated, accessible, easy to understand, and in a form 
     useful for facilitating immediate employment, entry into 
     education and training programs, and career exploration) on--
       (A) job openings, locations, hiring requirements, and 
     application procedures, including profiles of industries in 
     the local labor market that describe the nature of work 
     performed, employment requirements, and patterns in wages and 
     benefits;
       (B) jobseekers, including the education, training, and 
     employment experience of the jobseekers; and
       (C) the cost and effectiveness of providers of workforce 
     employment activities, workforce education activities, and 
     flexible workforce activities, including the percentage of 
     program completion, acquisition of skills to meet industry-
     recognized skill standards, continued education, job 
     placement, and earnings, by participants, and other 
     information that may be useful in facilitating informed 
     choices among providers by participants;
       (3) technical standards for labor market information that 
     will--
       (A) ensure compatibility of the information and the ability 
     to aggregate the information from substate areas to State and 
     national levels;
       (B) support standardization and aggregation of the data 
     from administrative reporting systems;
       (C) include--
       (i) classification and coding systems for industries, 
     occupations, skills, programs, and courses;
       (ii) nationally standardized definitions of labor market 
     terms, including terms related to State benchmarks 
     established pursuant to section 731(c);
       (iii) quality control mechanisms for the collection and 
     analysis of labor market information; and
       (iv) common schedules for collection and dissemination of 
     labor market information; and
       (D) eliminate gaps and duplication in statistical 
     undertakings, with a high priority given to the systemization 
     of wage surveys;
       (4) an analysis of data and information described in 
     paragraphs (1) and (2) for uses such as--
       (A) national, State, and substate area economic 
     policymaking;
       (B) planning and evaluation of workforce development 
     activities;
       (C) the implementation of Federal policies, including the 
     allocation of Federal funds to States and substate areas; and
       (D) research on labor market dynamics;
       (5) dissemination mechanisms for data and analysis, 
     including mechanisms that may be standardized among the 
     States; and
       (6) programs of technical assistance for States and 
     substate areas in the development, maintenance, utilization, 
     and continuous improvement of the data, information, 
     standards, analysis, and dissemination mechanisms, described 
     in paragraphs (1) through (5).
       (b) Joint Federal-State Responsibilities.--
       (1) In general.--The nationwide integrated labor market 
     information system shall be planned, administered, overseen, 
     and evaluated through a cooperative governance structure 
     involving the Federal Government and the States receiving 
     financial assistance under this title.
       (2) Annual plan.--The Governing Board shall, with the 
     assistance of the Bureau of Labor Statistics and other 
     Federal agencies, where appropriate, prepare an annual plan 
     that shall be the mechanism for achieving the cooperative 
     Federal-State governance structure for the nationwide 
     integrated labor market information system. The plan shall--
       (A) establish goals for the development and improvement of 
     a nationwide integrated labor market information system based 
     on information needs for achieving economic growth and 
     productivity, accountability, fund allocation equity, and an 
     understanding of labor market characteristics and dynamics;
       (B) describe the elements of the system, including--
       (i) standards, definitions, formats, collection 
     methodologies, and other necessary system elements, for use 
     in collecting the data and information described in 
     paragraphs (1) and (2) of subsection (a); and
       (ii) assurances that--

       (I) data will be sufficiently timely and detailed for uses 
     including the uses described in subsection (a)(4);
       (II) administrative records will be standardized to 
     facilitate the aggregation of data from substate areas to 
     State and national levels and to support the creation of new 
     statistical series from program records; and
       (III) paperwork and reporting requirements on employers and 
     individuals will be reduced;

       (C) recommend needed improvements in administrative 
     reporting systems to be used for the nationwide integrated 
     labor market information system;
       (D) describe the current spending on integrated labor 
     market information activities from all sources, assess the 
     adequacy of the funds spent, and identify the specific budget 
     needs of the Federal Government and States with respect to 
     implementing and improving the nationwide integrated labor 
     market information system;
       (E) develop a budget for the nationwide integrated labor 
     market information system that--
       (i) accounts for all funds described in subparagraph (D) 
     and any new funds made available pursuant to this title; and
       (ii) describes the relative allotments to be made for--
       (I) operating the cooperative statistical programs pursuant 
     to subsection (a)(1);
       (II) developing and providing employment and consumer 
     information pursuant to subsection (a)(2);
       (III) ensuring that technical standards are met pursuant to 
     subsection (a)(3); and
       (IV) providing the analysis, dissemination mechanisms, and 
     technical assistance under paragraphs (4), (5), and (6) of 
     subsection (a), and matching data;

       (F) describe the involvement of States in developing the 
     plan by holding formal consultations conducted in cooperation 
     with representatives of the Governors of each State or the 
     State workforce development board described in section 715, 
     where appropriate, pursuant to a process established by the 
     Governing Board; and
       (G) provide for technical assistance to the States for the 
     development of statewide comprehensive labor market 
     information systems described in subsection (c), including 
     assistance with the development of easy-to-use software and 
     hardware, or uniform information displays.

     For purposes of applying Office of Management and Budget 
     Circular A-11 to determine persons eligible to participate in 
     deliberations relating to budget issues for the development 
     of the plan, the representatives of the Governors of each 
     State and the State workforce development board described in 
     subparagraph (F) shall be considered to be employees of the 
     Department of Labor.
       (c) State Responsibilities.--
       (1) Designation of state agency.--In order to receive 
     Federal financial assistance 

[[Page S11687]]
     under this title, the Governor of a State shall--
       (A) establish an interagency process for the oversight of a 
     statewide comprehensive labor market information system and 
     for the participation of the State in the cooperative 
     Federal-State governance structure for the nationwide 
     integrated labor market information system; and
       (B) designate a single State agency or entity within the 
     State to be responsible for the management of the statewide 
     comprehensive labor market information system.
       (2) Duties.--In order to receive Federal financial 
     assistance under this title, the State agency or entity 
     within the State designated under paragraph (1)(B) shall--
       (A) consult with employers and local workforce development 
     boards described in section 728(b), where appropriate, about 
     the labor market relevance of the data to be collected and 
     displayed through the statewide comprehensive labor market 
     information system;
       (B) develop, maintain, and continuously improve the 
     statewide comprehensive labor market information system, 
     which shall--
       (i) include all of the elements described in paragraphs 
     (1), (2), (3), (4), (5), and (6) of subsection (a); and
       (ii) provide the consumer information described in clauses 
     (v) and (vi) of section 716(a)(2)(B) in a manner that shall 
     be responsive to the needs of business, industry, workers, 
     and jobseekers;
       (C) ensure the performance of contract and grant 
     responsibilities for data collection, analysis, and 
     dissemination, through the statewide comprehensive labor 
     market information system;
       (D) conduct such other data collection, analysis, and 
     dissemination activities to ensure that State and substate 
     area labor market information is comprehensive;
       (E) actively seek the participation of other State and 
     local agencies, with particular attention to State education, 
     economic development, human services, and welfare agencies, 
     in data collection, analysis, and dissemination activities in 
     order to ensure complementarity and compatibility among data;
       (F) participate in the development of the national annual 
     plan described in subsection (b)(2); and
       (G) ensure that the matches required for the job placement 
     accountability system by section 731(d)(2)(A) are made for 
     the State and for other States.
       (3) Rule of construction.--Nothing in this title shall be 
     construed as limiting the ability of a State agency to 
     conduct additional data collection, analysis, and 
     dissemination activities with State funds or with Federal 
     funds from sources other than this title.
       (d) Effective Date.--This section shall take effect on July 
     1, 1998.

     SEC. 774. NATIONAL CENTER FOR RESEARCH IN EDUCATION AND 
                   WORKFORCE DEVELOPMENT.

       (a) Grants Authorized.--From amounts made available under 
     section 734(b)(5), the Governing Board is authorized to award 
     a grant, on a competitive basis, to an institution of higher 
     education, public or private nonprofit organization or 
     agency, or a consortium of such institutions, organizations, 
     or agencies, to enable such institution, organization, 
     agency, or consortium to establish a national center to carry 
     out the activities described in subsection (b).
       (b) Authorized Activities.--Grant funds made available 
     under this section shall be used by the national center 
     assisted under subsection (a)--
       (1) to increase the effectiveness and improve the 
     implementation of workforce development programs, including 
     conducting research and development and providing technical 
     assistance with respect to--
       (A) combining academic and vocational education;
       (B) connecting classroom instruction with work-based 
     learning;
       (C) creating a continuum of educational programs that 
     provide multiple exit points for employment, which may 
     include changes or development of instructional materials or 
     curriculum;
       (D) establishing high quality support services for all 
     students to ensure access to workforce development programs, 
     educational success, and job placement assistance;
       (E) developing new models for remediation of basic academic 
     skills, which models shall incorporate appropriate 
     instructional methods, rather than using rote and didactic 
     methods;
       (F) identifying ways to establish links among educational 
     and job training programs at the State and local levels;
       (G) developing new models for career guidance, career 
     information, and counseling services;
       (H) identifying economic and labor market changes that will 
     affect workforce needs;
       (I) conducting preparation of teachers and professionals 
     who work with programs funded under this title; and
       (J) obtaining information on practices in other countries 
     that may be adapted for use in the United States;
       (2) to provide assistance to States and local recipients of 
     assistance under this title in developing and using systems 
     of performance measures and standards for improvement of 
     programs and services; and
       (3) to maintain a clearinghouse that will provide data and 
     information to Federal, State, and local organizations and 
     agencies about the condition of statewide systems and 
     programs funded under this title, which data and information 
     shall be disseminated in a form that is useful to 
     practitioners and policymakers.
       (c) Other Activities.--The Governing Board may request that 
     the national center assisted under subsection (a) conduct 
     activities not described in subsection (b), or study topics 
     not described in subsection (b), as the Governing Board 
     determines to be necessary to carry out this title.
       (d) Identification of Current Needs.--The national center 
     assisted under subsection (a) shall identify current needs 
     (as of the date of the identification) for research and 
     technical assistance through a variety of sources including a 
     panel of Federal, State, and local level practitioners.
       (e) Summary Report.--The national center assisted under 
     subsection (a) shall annually prepare and submit to the 
     Governing Board and Congress a report summarizing the 
     research findings obtained, and the results of development 
     and technical assistance activities carried out, under this 
     section.
       (f) Definition.--As used in this section, the term 
     ``institution of higher education'' has the meaning given the 
     term in section 1201(a) of the Higher Education Act of 1965 
     (20 U.S.C. 1141(a)).
       (g) Effective Date.--This section shall take effect on July 
     1, 1998.
     SEC. 775. TRANSFERS TO FEDERAL PARTNERSHIP.

       (a) Definitions.--For purposes of this section, unless 
     otherwise provided or indicated by the context--
       (1) the term ``Federal agency'' has the meaning given to 
     the term ``agency'' by section 551(1) of title 5, United 
     States Code;
       (2) the term ``function'' means any duty, obligation, 
     power, authority, responsibility, right, privilege, activity, 
     or program; and
       (3) the term ``office'' includes any office, 
     administration, agency, institute, unit, organizational 
     entity, or component thereof.
       (b) Transfer of Functions.--
       (1) In general.--There are transferred to the Federal 
     Partnership, in accordance with subsection (c), all functions 
     that the Secretary of Labor or the Secretary of Education 
     exercised before the effective date of this section 
     (including all related functions of any officer or employee 
     of the Department of Labor or the Department of Education) 
     that relate to a covered activity and that are minimally 
     necessary to carry out the functions of the Federal 
     Partnership. The authority of a transferred employee to carry 
     out a function that relates to a covered activity shall 
     terminate on July 1, 1998.
       (2) Office of inspector general.--There are transferred to 
     the Federal Partnership, in accordance with subsection (c), 
     all functions that the Secretary of Labor or the Secretary of 
     Education, acting through the Office of Inspector General of 
     the Department of Labor or of the Department of Education, 
     exercised before the effective date of this section 
     (including all related functions of any officer or employee 
     of the Department of Labor or the Department of Education) 
     that relate to the auditing or investigation of a covered 
     activity and that are minimally necessary to carry out the 
     functions of the Federal Partnership. The authority of a 
     transferred employee to carry out a function that relates to 
     the auditing or investigation of a covered activity shall 
     terminate on July 1, 1998.
       (c) Determinations of Functions by the Governing Board.--
       (1) Transition workplan.--
       (A) In general.--Not later than the date of appointment of 
     the Governing Board, the Secretary of Labor and the Secretary 
     of Education shall prepare and submit to the Governing Board 
     a proposed workplan that specifies the steps that the 
     Secretaries will take, during the period ending on July 1, 
     1998, to carry out the transfers described in subsection (b).
       (B) Contents.--The proposed workplan shall include, at a 
     minimum--
       (i) an analysis of the functions that officers and 
     employees of the Department of Labor and the Department of 
     Education carry out (as of the date of the submission of the 
     workplan) that relate to a covered activity or to the 
     auditing or investigation of a covered activity;
       (ii) information on the levels of personnel and funding 
     used to carry out the functions (as of such date);
       (iii) information on the proposed organizational structure 
     for the Federal Partnership;
       (iv) a determination of the functions described in clause 
     (i) that are minimally necessary to carry out the functions 
     of the Federal Partnership; and
       (v) information on the levels of personnel and funding that 
     are minimally necessary to carry out the functions of the 
     Federal Partnership.
       (2) Review.--Not later than 30 days after the date of 
     submission of the workplan, the Governing Board shall--
       (A) review the workplan;
       (B) approve the workplan or prepare a revised workplan that 
     contains the analysis and information described in paragraph 
     (1)(B), including a determination of the functions described 
     in paragraph (1)(B)(iv), which shall be transferred under 
     subsection (b); and
       (C) submit the approved or revised workplan to the 
     appropriate committees of Congress.
       (d) Personnel Provisions.--
       (1) Appointments.--The Director may appoint and fix the 
     compensation of such officers and employees, including 
     investigators, 

[[Page S11688]]
     attorneys, and administrative law judges, as may be necessary to carry 
     out the functions of the Federal Partnership. Except as 
     otherwise provided by law, such officers and employees shall 
     be appointed in accordance with the civil service laws and 
     their compensation fixed in accordance with title 5, United 
     States Code.
       (2) Experts and consultants.--The Director may obtain the 
     services of experts and consultants in accordance with 
     section 3109 of title 5, United States Code, and compensate 
     such experts and consultants for each day (including travel 
     time) at rates not in excess of the rate of pay for level IV 
     of the Executive Schedule under section 5315 of such title. 
     The Director may pay experts and consultants who are serving 
     away from their homes or regular place of business travel 
     expenses and per diem in lieu of subsistence at rates 
     authorized by sections 5702 and 5703 of such title for 
     persons in Government service employed intermittently.
       (e) Delegation and Assignment.--Except where otherwise 
     expressly prohibited by law or otherwise provided by this 
     section, the Governing Board may delegate any function 
     transferred or granted to such Federal Partnership after the 
     effective date of this section to such officers and employees 
     of the Federal Partnership as the Governing Board may 
     designate, and may authorize successive redelegations of such 
     functions as may be necessary or appropriate. No delegation 
     of functions by the Governing Board under this subsection or 
     under any other provision of this section shall relieve such 
     Governing Board of responsibility for the administration of 
     such functions.
       (f) Reorganization.--The Governing Board may allocate or 
     reallocate any function transferred or granted to such 
     Federal Partnership after the effective date of this section 
     among the officers of the Federal Partnership, and establish, 
     consolidate, alter, or discontinue such organizational 
     entities in the Federal Partnership as may be necessary or 
     appropriate.
       (g) Rules.--The Governing Board is authorized to prescribe, 
     in accordance with the provisions of chapters 5 and 6 of 
     title 5, United States Code, such rules and regulations as 
     the Governing Board determines to be necessary or appropriate 
     to administer and manage the functions of the Federal 
     Partnership.
       (h) Transfer and Allocations of Appropriations and 
     Personnel.--
       (1) In general.--Except as otherwise provided in this 
     section, the personnel employed in connection with, and the 
     assets, liabilities, contracts, property, records, and 
     unexpended balances of appropriations, authorizations, 
     allocations, and other funds employed, used, held, arising 
     from, available to, or to be made available in connection 
     with the functions transferred by this section, subject to 
     section 1531 of title 31, United States Code, shall be 
     transferred to the Federal Partnership. Unexpended funds 
     transferred pursuant to this subsection shall be used only to 
     carry out the functions of the Federal Partnership.
       (2) Existing facilities and other federal resources.--
     Pursuant to paragraph (1), the Secretary of Labor and the 
     Secretary of Education shall supply such office facilities, 
     office supplies, support services, and related expenses as 
     may be minimally necessary to carry out the functions of the 
     Governing Board. None of the funds made available under this 
     title may be used for the construction of office facilities 
     for the Federal Partnership.
       (i) Incidental Transfers.--The Director of the Office of 
     Management and Budget, at such time or times as the Director 
     shall provide, may make such determinations as may be 
     necessary with regard to the functions transferred by this 
     section, and to make such additional incidental dispositions 
     of personnel, assets, liabilities, grants, contracts, 
     property, records, and unexpended balances of appropriations, 
     authorizations, allocations, and other funds held, used, 
     arising from, available to, or to be made available in 
     connection with such functions, as may be necessary to carry 
     out the provisions of this section. The Director of the 
     Office of Management and Budget shall provide for the 
     termination of the affairs of all entities terminated by this 
     section and for such further measures and dispositions as may 
     be necessary to effectuate the objectives of this section.
       (j) Effect on Personnel.--
       (1) Termination of certain positions.--Positions whose 
     incumbents are appointed by the President, by and with the 
     advice and consent of the Senate, the functions of which are 
     transferred by this section, shall terminate on the effective 
     date of this section.
       (2) Actions.--
       (A) In general.--The Secretary of Labor and the Secretary 
     of Education shall take such actions as may be necessary, 
     including reduction in force actions, consistent with 
     sections 3502 and 3595 of title 5, United States Code, to 
     ensure that the positions of personnel that relate to a 
     covered activity and are not transferred under subsection 
     (b)(1) are separated from service.
       (B) Scope.--The Secretary of Labor and the Secretary of 
     Education shall take the actions described in subparagraph 
     (A) with respect to not less than \1/3\ of the positions of 
     personnel that relate to a covered activity.
       (C) Definition.--As used in this paragraph, the term 
     ``positions of personnel that relate to a covered activity'' 
     shall not include any position in an Office of Inspector 
     General that relates to the auditing or investigation of a 
     covered activity.
       (k) Savings Provisions.--
       (1) Suits not affected.--The provisions of this section 
     shall not affect suits commenced before the effective date of 
     this section, and in all such suits, proceedings shall be 
     had, appeals taken, and judgments rendered in the same manner 
     and with the same effect as if this section had not been 
     enacted.
       (2) Nonabatement of actions.--No suit, action, or other 
     proceeding commenced by or against the Department of Labor or 
     the Department of Education, or by or against any individual 
     in the official capacity of such individual as an officer of 
     the Department of Labor or the Department of Education, shall 
     abate by reason of the enactment of this section.
       (l) Transition.--The Governing Board may utilize--
       (1) the services of officers, employees, and other 
     personnel of the Department of Labor or the Department of 
     Education with respect to functions transferred to the 
     Federal Partnership by this section; and
       (2) funds appropriated to such functions;

     for such period of time as may reasonably be needed to 
     facilitate the orderly implementation of this section.
       (m) References.--A reference in any other Federal law, 
     Executive order, rule, regulation, or delegation of 
     authority, or any document of or relating to--
       (1) the Secretary of Labor or the Secretary of Education 
     with regard to functions transferred under subsection (b), 
     shall be deemed to refer to the Governing Board; and
       (2) the Department of Labor or the Department of Education 
     with regard to functions transferred under subsection (b), 
     shall be deemed to refer to the Federal Partnership.
       (n) Additional Conforming Amendments.--
       (1) Recommended legislation.--After consultation with the 
     appropriate committees of Congress and the Director of the 
     Office of Management and Budget, the Governing Board shall 
     prepare and submit to Congress recommended legislation 
     containing technical and conforming amendments to reflect the 
     changes made by this section.
       (2) Submission to congress.--Not later than March 31, 1997, 
     the Governing Board shall submit the recommended legislation 
     referred to in paragraph (1).
       (o) Effective Date.--
       (1) In general.--Except as provided in paragraphs (2) and 
     (3), this section shall take effect on June 30, 1998.
       (2) Regulations and conforming amendments.--Subsections (g) 
     and (n) shall take effect on September 30, 1996.
       (3) Workplan.--Subsection (c) shall take effect on the date 
     of enactment of this Act.

     SEC. 776. TRANSFERS TO OTHER FEDERAL AGENCIES AND OFFICES.

       (a) Transfer.--There are transferred to the appropriate 
     receiving agency, in accordance with subsection (b), all 
     functions that the Secretary of Labor, acting through the 
     Employment and Training Administration, or the Secretary of 
     Education, acting through the Office of Vocational and Adult 
     Education, exercised before the effective date of this 
     section (including all related functions of any officer or 
     employee of the Employment and Training Administration or the 
     Office of Vocational and Adult Education) that do not relate 
     to a covered activity.
       (b) Determinations of Functions and Appropriate Receiving 
     Agencies.--
       (1) Transition workplan.--
       (A) In general.--Not later than 90 days after the date of 
     appointment of the Governing Board, the Secretary of Labor 
     and the Secretary of Education shall prepare and submit to 
     the Governing Board a proposed workplan that specifies the 
     steps that the Secretaries will take, during the period 
     ending on July 1, 1998, to carry out the transfer described 
     in subsection (a).
       (B) Contents.--The proposed workplan shall include, at a 
     minimum--
       (i) a determination of the functions that officers and 
     employees of the Employment and Training Administration and 
     the Office of Vocational and Adult Education carry out (as of 
     the date of the submission of the workplan) that do not 
     relate to a covered activity; and
       (ii) a determination of the appropriate receiving agencies 
     for the functions, based on factors including increased 
     efficiency and elimination of duplication of functions.
       (2) Review.--Not later than 30 days after the date of 
     submission of the workplan, the Governing Board shall--
       (A) review the workplan;
       (B) approve the workplan or prepare a revised workplan that 
     contains--
       (i) a determination of the functions described in paragraph 
     (1)(B)(i), which shall be transferred under subsection (a); 
     and
       (ii) a determination of the appropriate receiving agencies 
     described in paragraph (1)(B)(ii), based on the factors 
     described in such paragraph, to which the functions shall be 
     transferred under subsection (a); and
       (C) submit the approved or revised workplan to the 
     appropriate committees of Congress.
       (3) Report.--Not later than July 1, 1998, the Secretary of 
     Education and the Secretary of Labor shall submit to the 
     appropriate committees of Congress information on the 
     transfers required by this section.
       (c) Application of Authorities.--
       (1) In general.--
       (A) Application.--Subsection (a), and subsections (d) 
     through (n), of section 775 (other 

[[Page S11689]]
     than subsections (g), (h)(2), (j)(2), and (n)) shall apply to transfers 
     under this section, in the same manner and to the same extent 
     as the subsections apply to transfers under section 775.
       (B) Regulations and conforming amendments.--Subsections (g) 
     and (n) of section 775 shall apply to transfers under this 
     section, in the same manner and to the same extent as the 
     subsections apply to transfers under section 775.
       (2) References.--For purposes of the application of the 
     subsections described in paragraph (1) (other than 
     subsections (h)(2) and (j)(2) of section 775) to transfers 
     under this section--
       (A) references to the Federal Partnership shall be deemed 
     to be references to the appropriate receiving agency, as 
     determined in the approved or revised workplan referred to in 
     subsection (b)(2);
       (B) references to the Director or Governing Board shall be 
     deemed to be references to the head of the appropriate 
     receiving agency; and
       (C) references to transfers in subsections (e) and (f) of 
     section 775 shall be deemed to include transfers under this 
     section.
       (3) Administration.--Unexpended funds transferred pursuant 
     to this section shall be used only for the purposes for which 
     the funds were originally authorized and appropriated.
       (4) Continuing effect of legal documents.--All orders, 
     determinations, rules, regulations, permits, agreements, 
     grants, contracts, certificates, licenses, registrations, 
     privileges, and other administrative actions--
       (A) that have been issued, made, granted, or allowed to 
     become effective by the President, any Federal agency or 
     official of a Federal agency, or by a court of competent 
     jurisdiction, in the performance of functions that are 
     transferred under this section; and
       (B) that are in effect on the effective date of this 
     section or were final before the effective date of this 
     section and are to become effective on or after the effective 
     date of this section;

     shall continue in effect according to their terms until 
     modified, terminated, superseded, set aside, or revoked in 
     accordance with law by the President, the appropriate 
     receiving agency or other authorized official, a court of 
     competent jurisdiction, or by operation of law.
       (5) Proceedings not affected.--
       (A) In general.--The provisions of this section shall not 
     affect any proceedings, including notices of proposed 
     rulemaking, or any application for any license, permit, 
     certificate, or financial assistance pending before the 
     Department of Labor or the Department of Education on the 
     date this section takes effect, with respect to functions 
     transferred by this section.
       (B) Continuation.--Such proceedings and applications shall 
     be continued. Orders shall be issued in such proceedings, 
     appeals shall be taken from the orders, and payments shall be 
     made pursuant to such orders, as if this section had not been 
     enacted, and orders issued in any such proceedings shall 
     continue in effect until modified, terminated, superseded, or 
     revoked by a duly authorized official, by a court of 
     competent jurisdiction, or by operation of law.
       (C) Construction.--Nothing in this paragraph shall be 
     deemed to prohibit the discontinuance or modification of any 
     such proceeding under the same terms and conditions and to 
     the same extent that such proceeding could have been 
     discontinued or modified if this section had not been 
     enacted.
       (6) Administrative actions relating to promulgation of 
     regulations.--Any administrative action relating to the 
     preparation or promulgation of a regulation by the Department 
     of Labor or the Department of Education relating to a 
     function transferred under this section may be continued by 
     the appropriate receiving agency with the same effect as if 
     this section had not been enacted.
       (d) Construction.--Nothing in this section shall be 
     construed to require the transfer of any function described 
     in subsection (b)(1)(B)(i) to the Federal Partnership.
       (e) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), this 
     section shall take effect on June 30, 1998.
       (2) Regulations and conforming amendments.--Subsection 
     (c)(1)(B) shall take effect on September 30, 1996.
       (3) Workplan.--Subsection (b) shall take effect on the date 
     of enactment of this Act.

     SEC. 777. ELIMINATION OF CERTAIN OFFICES.

       (a) Termination.--The Office of Vocational and Adult 
     Education and the Employment and Training Administration 
     shall terminate on July 1, 1998.
       (b) Office of Vocational and Adult Education.--
       (1) Title 5, united states code.--Section 5315 of title 5, 
     United States Code, is amended by striking ``Assistant 
     Secretaries of Education (10)'' and inserting ``Assistant 
     Secretaries of Education (9)''.
       (2) Department of education organization act.--
       (A) Section 202 of the Department of Education Organization 
     Act (20 U.S.C. 3412) is amended--
       (i) in subsection (b)(1)--

       (I) by striking subparagraph (C); and
       (II) by redesignating subparagraphs (D) through (F) as 
     subparagraphs (C) through (E), respectively;

       (ii) by striking subsection (h); and
       (iii) by redesignating subsection (i) as subsection (h).
       (B) Section 206 of such Act (20 U.S.C. 3416) is repealed.
       (C) Section 402(c)(1) of the Improving America's Schools 
     Act of 1994 (20 U.S.C. 9001(c)(1)) is amended by striking 
     ``established under'' and all that follows and inserting a 
     semicolon.
       (3) Goals 2000: educate america act.--Section 931(h)(3)(A) 
     of the Goals 2000: Educate America Act (20 U.S.C. 
     6031(h)(3)(A)) is amended--
       (A) by striking clause (iii); and
       (B) by redesignating clauses (iv) and (v) as clauses (iii) 
     and (iv), respectively.
       (c) Employment and Training Administration.--
       (1) Title 5, united states code.--Section 5315 of title 5, 
     United States Code, is amended by striking ``Assistant 
     Secretaries of Labor (10)'' and inserting ``Assistant 
     Secretaries of Labor (9)''.
       (2) Veterans' benefits and programs improvement act of 
     1988.--Section 402(d)(3) of the Veterans' Benefits and 
     Programs Improvement Act of 1988 (29 U.S.C. 1721 note) is 
     amended by striking ``and under any other program 
     administered by the Employment and Training Administration of 
     the Department of Labor''.
       (3) Title 38, united states code.--Section 4110(d) of title 
     38, United States Code, is amended--
       (A) by striking paragraph (7); and
       (B) by redesignating paragraphs (8) through (12) as 
     paragraphs (7) through (11), respectively.
       (4) National and community service act of 1990.--The last 
     sentence of section 162(b) of the National and Community 
     Service Act of 1990 (42 U.S.C. 12622(b)) is amended by 
     striking ``or the Office of Job Training''.
       (d) United States Employment Service.--
       (1) Title 5, united states code.--Section 3327 of title 5, 
     United States Code, is amended--
       (A) in subsection (a), by striking ``the employment offices 
     of the United States Employment Service'' and inserting 
     ``Governors''; and
       (B) in subsection (b), by striking ``of the United States 
     Employment Service''.
       (2) Title 10, united states code.--
       (A) Section 1143a(d) of title 10, United States Code, is 
     amended by striking paragraph (3).
       (B) Section 2410k(b) of title 10, United States Code, is 
     amended by striking ``, and where appropriate the Interstate 
     Job Bank (established by the United States Employment 
     Service),''.
       (3) Internal revenue code of 1986.--Section 51 of the 
     Internal Revenue Code of 1986 is amended by striking 
     subsection (g).
       (4) National defense authorization act for fiscal year 
     1993.--Section 4468 of the National Defense Authorization Act 
     for Fiscal Year 1993 (29 U.S.C. 1662d-1 note) is repealed.
       (5) Title 38, united states code.--Section 4110(d) of title 
     38, United States Code (as amended by subsection (c)(3)), is 
     further amended--
       (A) by striking paragraph (10); and
       (B) by redesignating paragraph (11) as paragraph (10).
       (6) Title 39, united states code.--
       (A) Section 3202(a)(1) of title 39, United States Code is 
     amended--
       (i) in subparagraph (D), by striking the semicolon and 
     inserting ``; and'';
       (ii) by striking subparagraph (E); and
       (iii) by redesignating subparagraph (F) as subparagraph 
     (E).
       (B) Section 3203(b) of title 39, United States Code, is 
     amended by striking ``(1)(E), (2), and (3)'' and inserting 
     ``(2) and (3)''.
       (C) Section 3206(b) of title 39, United States Code, is 
     amended by striking ``(1)(F)'' and inserting ``(1)(E)''.
       (7) National and community service act of 1990.--Section 
     162(b) of the National and Community Service Act of 1990 (42 
     U.S.C. 12622(b)) (as amended by subsection (c)(4)) is further 
     amended by striking the last sentence.
       (e) Reorganization Plans.--Except with respect to functions 
     transferred under section 776, the authority granted to the 
     Employment and Training Administration, the Office of 
     Vocational and Adult Education, or any unit of the Employment 
     and Training Administration or the Office of Vocational and 
     Adult Education by any reorganization plan shall terminate on 
     July 1, 1998.
Subtitle F--Repeals of Employment and Training and Vocational and Adult 
                           Education Programs

     SEC. 781. REPEALS.

       (a) Immediate Repeals.--The following provisions are 
     repealed:
       (1) Section 204 of the Immigration Reform and Control Act 
     of 1986 (8 U.S.C. 1255a note).
       (2) Title II of Public Law 95-250 (92 Stat. 172).
       (3) The Displaced Homemakers Self-Sufficiency Assistance 
     Act (29 U.S.C. 2301 et seq.).
       (4) Section 211 of the Appalachian Regional Development Act 
     of 1965 (40 U.S.C. App. 211).
       (5) Subtitle C of title VII of the Stewart B. McKinney 
     Homeless Assistance Act (42 U.S.C. 11441 et seq.).
       (6) Section 5322 of title 49, United States Code.
       (7) Subchapter I of chapter 421 of title 49, United States 
     Code.
       (b) Subsequent Repeals.--The following provisions are 
     repealed:
       (1) Sections 235 and 236 of the Trade Act of 1974 (19 
     U.S.C. 2295 and 2296), and paragraphs (1) and (2) of section 
     250(d) of such Act (19 U.S.C. 2331(d)).

[[Page S11690]]

       (2) The Adult Education Act (20 U.S.C. 1201 et seq.).
       (3) The Carl D. Perkins Vocational and Applied Technology 
     Education Act (20 U.S.C. 2301 et seq.).
       (4) The School-to-Work Opportunities Act of 1994 (20 U.S.C. 
     6101 et seq.).
       (5) The Wagner-Peyser Act (29 U.S.C. 49 et seq.).
       (6) The Job Training Partnership Act (29 U.S.C. 1501 et 
     seq.).
       (7) Title V of the Older Americans Act of 1965 (42 U.S.C. 
     3056 et seq.).
       (8) Title VII of the Stewart B. McKinney Homeless 
     Assistance Act (42 U.S.C. 11421 et seq.), other than subtitle 
     C of such title.
       (c) Effective Dates.--
       (1) Immediate repeals.--The repeals made by subsection (a) 
     shall take effect on the date of enactment of this Act.
       (2) Subsequent repeals.--The repeals made by subsection (b) 
     shall take effect on July 1, 1998.

     SEC. 782. CONFORMING AMENDMENTS.

       (a) Immediate Repeals.--
       (1) References to section 204 of the immigration reform and 
     control act of 1986.--The table of contents for the 
     Immigration Reform and Control Act of 1986 is amended by 
     striking the item relating to section 204 of such Act.
       (2) References to title ii of public law 95-250.--Section 
     103 of Public Law 95-250 (16 U.S.C. 79l) is amended--
       (A) by striking the second sentence of subsection (a); and
       (B) by striking the second sentence of subsection (b).
       (3) References to subtitle c of title vii of the stewart b. 
     mckinney homeless assistance act.--
       (A) Section 762(a) of the Stewart B. McKinney Homeless 
     Assistance Act (42 U.S.C. 11472(a)) is amended--
       (i) by striking ``each of the following programs'' and 
     inserting ``the emergency community services homeless grant 
     program established in section 751''; and
       (ii) by striking ``tribes:'' and all that follows and 
     inserting ``tribes.''.
       (B) The table of contents of such Act is amended by 
     striking the items relating to subtitle C of title VII of 
     such Act.
       (4) References to title 49, united states code.--
       (A) Sections 5313(b)(1) and 5314(a)(1) of title 49, United 
     States Code, are amended by striking ``5317, and 5322'' and 
     inserting ``and 5317''.
       (B) The table of contents for chapter 53 of title 49, 
     United States Code, is amended by striking the item relating 
     to section 5322.
       (b) Subsequent Repeals.--
       (1) Recommended legislation.--After consultation with the 
     appropriate committees of Congress and the Director of the 
     Office of Management and Budget, the Governing Board shall 
     prepare and submit to Congress recommended legislation 
     containing technical and conforming amendments to reflect the 
     changes made by section 781(b).
       (2) Submission to congress.--Not later than March 31, 1997, 
     the Governing Board shall submit the recommended legislation 
     referred to under paragraph (1).
 Subtitle C--Job Corps and Other Workforce Preparation Activities for 
                             At-Risk Youth

                CHAPTER 1--GENERAL JOB CORPS PROVISIONS

     SEC. 741. PURPOSES.

       The purposes of this subtitle are--
       (1) to maintain a Job Corps for at-risk youth as part of 
     statewide systems;
       (2) to set forth standards and procedures for selecting 
     individuals as enrollees in the Job Corps;
       (3) to authorize the establishment of residential and 
     nonresidential Job Corps centers in which enrollees will 
     participate in intensive programs of workforce development 
     activities;
       (4) to prescribe various other powers, duties, and 
     responsibilities incident to the operation and continuing 
     development of the Job Corps; and
       (5) to assist at-risk youth who need and can benefit from 
     an unusually intensive program, operated in a group setting, 
     to become more responsible, employable, and productive 
     citizens.

     SEC. 742. DEFINITIONS.

       As used in this subtitle:
          TITLE VIII--WORKFORCE DEVELOPMENT-RELATED ACTIVITIES
        Subtitle A--Amendments to the Rehabilitation Act of 1973

     SEC. 801. REFERENCES.

       Except as otherwise expressly provided in this subtitle, 
     whenever in this subtitle an amendment or repeal is expressed 
     in terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of the Rehabilitation Act of 1973 
     (29 U.S.C. 701 et seq.).

     SEC. 802. FINDINGS AND PURPOSES.

       Section 2 (29 U.S.C. 701) is amended--
       (1) in subsection (a)(4), by striking ``the provision of 
     individualized training, independent living services, 
     educational and support services,'' and inserting 
     ``implementation of a statewide workforce development system 
     that provides meaningful and effective participation for 
     individuals with disabilities in workforce development 
     activities and activities carried out through the vocational 
     rehabilitation program established under title I, and through 
     the provision of independent living services, support 
     services,''; and
       (2) in subsection (b)(1)(A), by inserting ``statewide 
     workforce development systems that include, as integral 
     components,'' after ``(A)''.

     SEC. 803. CONSOLIDATED REHABILITATION PLAN.

       (a) In General.--Section 6 (29 U.S.C. 705) is repealed.
       (b) Conforming Amendment.--The table of contents for the 
     Act is amended by striking the item relating to section 6.

     SEC. 804. DEFINITIONS.

       Section 7 (29 U.S.C. 706) is amended by adding at the end 
     the following new paragraphs:
       ``(36) The term `statewide workforce development system' 
     means a statewide system, as defined in section 703 of the 
     Workforce Development Act of 1995.
       ``(37) The term `workforce development activities' has the 
     meaning given the term in section 703 of the Workforce 
     Development Act of 1995.
       ``(38) The term `workforce employment activities' means the 
     activities described in paragraphs (2) through (8) of section 
     716(a) of the Workforce Development Act of 1995, including 
     activities described in section 716(a)(6) of such Act 
     provided through a voucher described in section 716(a)(9) of 
     such Act.''.

     SEC. 805. ADMINISTRATION.

       Section 12(a)(1) (29 U.S.C. 711(a)(1)) is amended by 
     inserting ``, including providing assistance to achieve the 
     meaningful and effective participation by individuals with 
     disabilities in the activities carried out through a 
     statewide workforce development system'' before the 
     semicolon.

     SEC. 806. REPORTS.

       Section 13 (29 U.S.C. 712) is amended in the fourth 
     sentence by striking ``The data elements'' and all that 
     follows through ``age,'' and inserting the following: ``The 
     information shall include all information that is required to 
     be submitted in the report described in section 731(a) of the 
     Workforce Development Act of 1995 and that pertains to the 
     employment of individuals with disabilities, including 
     information on age,''.

     SEC. 807. EVALUATION.

       Section 14(a) (29 U.S.C. 713(a)) is amended in the third 
     sentence by striking ``to the extent feasible,'' and all that 
     follows through the end of the sentence and inserting the 
     following: ``to the maximum extent appropriate, be consistent 
     with the State benchmarks established under paragraphs (1) 
     and (2) of section 731(c) of the Workforce Development Act of 
     1995. For purposes of this section, the Secretary may modify 
     or supplement such benchmarks after consultation with the 
     Governing Board established under section 771(b) of the 
     Workforce Development Act of 1995, to the extent necessary to 
     address unique considerations applicable to the participation 
     of individuals with disabilities in the vocational 
     rehabilitation program established under title I and 
     activities carried out under other provisions of this Act.''.

     SEC. 808. DECLARATION OF POLICY.

       Section 100(a) (29 U.S.C. 720(a)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (E), by striking ``; and'' and 
     inserting a semicolon;
       (B) in subparagraph (F)--
       (i) by inserting ``workforce development activities and'' 
     before ``vocational rehabilitation services''; and
       (ii) by striking the period and inserting ``; and''; and
       (C) by adding at the end the following subparagraph:
       ``(G) linkages between the vocational rehabilitation 
     program established under this title and other components of 
     the statewide workforce development system are critical to 
     ensure effective and meaningful participation by individuals 
     with disabilities in workforce development activities.''; and
       (2) in paragraph (2)--
       (A) by striking ``a comprehensive'' and inserting 
     ``statewide comprehensive''; and
       (B) by striking ``program of vocational rehabilitation that 
     is designed'' and inserting ``programs of vocational 
     rehabilitation, each of which is--
       ``(A) an integral component of a statewide workforce 
     development system; and
       ``(B) designed''.

     SEC. 809. STATE PLANS.

       (a) In General.--Section 101(a) (29 U.S.C. 721(a)) is 
     amended--
       (1) in the first sentence, by striking ``, or shall 
     submit'' and all that follows through ``et seq.)'' and 
     inserting ``, and shall submit the State plan on the same 
     dates as the State submits the State plan described in 
     section 714 of the Workforce Development Act of 1995 to the 
     Governing Board established under section 771(b) of such 
     Act'';
       (2) by inserting after the first sentence the following: 
     ``The State shall also submit the State plan for vocational 
     rehabilitation services for review and comment to any State 
     workforce development board established for the State under 
     section 715 of the Workforce Development Act of 1995, which 
     shall submit the comments on the State plan to the designated 
     State unit.'';
       (3) by striking paragraphs (10), (12), (13), (15), (17), 
     (19), (23), (27), (28), (30), (34), and (35);
       (4) in paragraph (20), by striking ``(20)'' and inserting 
     ``(B)'';
       (5) by redesignating paragraphs (3), (4), (5), (6), (7), 
     (8), (9), (14), (16), (18), (21), (22), (24), (25), (26), 
     (29), (31), (32), (33), and (36) as paragraphs (4), (5), (6), 
     (7), (8), (9), (10), (12), (13), 

[[Page S11691]]
     (14), (15), (16), (17), (18), (19), (20), (21), (22), (23), and (24), 
     respectively;
       (6) in paragraph (1)(B)--
       (A) by redesignating clauses (i), (ii), and (iii) as 
     clauses (ii), (iii), and (iv), respectively; and
       (B) by inserting before clause (ii) (as redesignated in 
     subparagraph (A)) the following: ``(i) a State entity 
     primarily responsible for implementing workforce employment 
     activities through the statewide workforce development system 
     of the State,'';
       (7) in paragraph (2)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``(1)(B)(i)'' and inserting ``(1)(B)(ii)''; and
       (B) in subparagraph (B)(ii), by striking ``(1)(B)(ii)'' and 
     inserting ``(1)(B)(iii)'';
       (8) by inserting after paragraph (2) the following 
     paragraph:
       ``(3) provide a plan for expanding and improving vocational 
     rehabilitation services for individuals with disabilities on 
     a statewide basis, including--
       ``(A) a statement of values and goals;
       ``(B) evidence of ongoing efforts to use outcome measures 
     to make decisions about the effectiveness and future 
     direction of the vocational rehabilitation program 
     established under this title in the State; and
       ``(C) information on specific strategies for strengthening 
     the program as an integral component of the statewide 
     workforce development system established in the State, 
     including specific innovative, state-of-the-art approaches 
     for achieving sustained success in improving and expanding 
     vocational rehabilitation services provided through the 
     program, for all individuals with disabilities who seek 
     employment, through plans, policies, and procedures that link 
     the program with other components of the system, including 
     plans, policies, and procedures relating to--
       ``(i) entering into cooperative agreements, between the 
     designated State unit and appropriate entities responsible 
     for carrying out the other components of the statewide 
     workforce development system, which agreements may provide 
     for--
       ``(I) provision of intercomponent staff training and 
     technical assistance regarding the availability and benefits 
     of, and eligibility standards for, vocational rehabilitation 
     services, and regarding the provision of equal, effective, 
     and meaningful participation by individuals with disabilities 
     in workforce employment activities in the State through 
     program accessibility, use of nondiscriminatory policies and 
     procedures, and provision of reasonable accommodations, 
     auxiliary aids and services, and rehabilitation technology, 
     for individuals with disabilities;
       ``(II) use of information and financial management systems 
     that link all components of the statewide workforce 
     development system, that link the components to other 
     electronic networks, and that relate to such subjects as 
     labor market information, and information on job vacancies, 
     skill qualifications, career planning, and workforce 
     development activities;
       ``(III) use of customer service features such as common 
     intake and referral procedures, customer data bases, resource 
     information, and human service hotlines;
       ``(IV) establishment of cooperative efforts with employers 
     to facilitate job placement and to develop and sustain 
     working relationships with employers, trade associations, and 
     labor organizations;
       ``(V) identification of staff roles and responsibilities 
     and available resources for each entity that carries out a 
     component of the statewide workforce development system with 
     regard to paying for necessary services (consistent with 
     State law); and
       ``(VI) specification of procedures for resolving disputes 
     among such entities; and
       ``(ii) providing for the replication of such cooperative 
     agreements at the local level between individual offices of 
     the designated State unit and local entities carrying out 
     activities through the statewide workforce development 
     system;'';
       (9) in paragraph (6) (as redesignated in paragraph (5))--
       (A) by striking subparagraph (A) and inserting the 
     following:
       ``(A) contain the plans, policies, and methods to be 
     followed in carrying out the State plan and in the 
     administration and supervision of the plan, including--
       ``(i)(I) the results of a comprehensive, statewide 
     assessment of the rehabilitation needs of individuals with 
     disabilities (including individuals with severe disabilities, 
     individuals with disabilities who are minorities, and 
     individuals with disabilities who have been unserved, or 
     underserved, by the vocational rehabilitation system) who are 
     residing within the State; and
       ``(II) the response of the State to the assessment;
       ``(ii) a description of the method to be used to expand and 
     improve services to individuals with the most severe 
     disabilities, including individuals served under part C of 
     title VI;
       ``(iii) with regard to community rehabilitation programs--
       ``(I) a description of the method to be used (such as a 
     cooperative agreement) to utilize the programs to the maximum 
     extent feasible; and
       ``(II) a description of the needs of the programs, 
     including the community rehabilitation programs funded under 
     the Act entitled ``An Act to Create a Committee on Purchases 
     of Blind-made Products, and for other purposes'', approved 
     June 25, 1938 (commonly known as the Wagner-O'Day Act; 41 
     U.S.C. 46 et seq.) and such programs funded by State use 
     contracting programs; and
       ``(iv) an explanation of the methods by which the State 
     will provide vocational rehabilitation services to all 
     individuals with disabilities within the State who are 
     eligible for such services, and, in the event that vocational 
     rehabilitation services cannot be provided to all such 
     eligible individuals with disabilities who apply for such 
     services, information--
       ``(I) showing and providing the justification for the order 
     to be followed in selecting individuals to whom vocational 
     rehabilitation services will be provided (which order of 
     selection for the provision of vocational rehabilitation 
     services shall be determined on the basis of serving first 
     the individuals with the most severe disabilities in 
     accordance with criteria established by the State, and shall 
     be consistent with priorities in such order of selection so 
     determined, and outcome and service goals for serving 
     individuals with disabilities, established in regulations 
     prescribed by the Commissioner);
       ``(II) showing the outcomes and service goals, and the time 
     within which the outcomes and service goals may be achieved, 
     for the rehabilitation of individuals receiving such 
     services; and
       ``(III) describing how individuals with disabilities who 
     will not receive such services if such order is in effect 
     will be referred to other components of the statewide 
     workforce development system for access to services offered 
     by the components;''; and
       (B) by striking subparagraph (C) and inserting the 
     following subparagraphs:
       ``(C) with regard to the statewide assessment of 
     rehabilitation needs described in subparagraph (A)(i)--
       ``(i) provide that the State agency will make reports at 
     such time, in such manner, and containing such information, 
     as the Commissioner may require to carry out the functions of 
     the Commissioner under this title, and comply with such 
     provisions as are necessary to assure the correctness and 
     verification of such reports; and
       ``(ii) provide that reports made under clause (i) will 
     include information regarding individuals with disabilities 
     and, if an order of selection described in subparagraph 
     (A)(iv)(I) is in effect in the State, will separately include 
     information regarding individuals with the most severe 
     disabilities, on--
       ``(I) the number of such individuals who are evaluated and 
     the number rehabilitated;
       ``(II) the costs of administration, counseling, provision 
     of direct services, development of community rehabilitation 
     programs, and other functions carried out under this Act; and
       ``(III) the utilization by such individuals of other 
     programs pursuant to paragraph (11); and
       ``(D) describe--
       ``(i) how a broad range of rehabilitation technology 
     services will be provided at each stage of the rehabilitation 
     process;
       ``(ii) how a broad range of such rehabilitation technology 
     services will be provided on a statewide basis; and
       ``(iii) the training that will be provided to vocational 
     rehabilitation counselors, client assistance personnel, 
     personnel of the providers of one-stop delivery of core 
     services described in section 716(a)(2) of the Workforce 
     Development Act of 1995, and other related services 
     personnel;'';
       (10) in subparagraph (A) of paragraph (8) (as redesignated 
     in paragraph (5))--
       (A) in clause (i)(II), by striking ``, based on 
     projections'' and all that follows through ``relevant 
     factors''; and
       (B) by striking clauses (iii) and (iv) and inserting the 
     following clauses:
       ``(iii) a description of the ways in which the system for 
     evaluating the performance of rehabilitation counselors, 
     coordinators, and other personnel used in the State 
     facilitates the accomplishment of the purpose and policy of 
     this title, including the policy of serving, among others, 
     individuals with the most severe disabilities;
       ``(iv) provide satisfactory assurances that the system 
     described in clause (iii) in no way impedes such 
     accomplishment; and'';
       (11) in paragraph (9) (as redesignated in paragraph (5)) by 
     striking ``required--'' and all that follows through ``(B) 
     prior'' and inserting ``required prior'';
       (12) in paragraph (10) (as redesignated in paragraph (5))--
       (A) in subparagraph (B), by striking ``written 
     rehabilitation program'' and inserting ``employment plan''; 
     and
       (B) in subparagraph (C), by striking ``plan in accordance 
     with such program'' and inserting ``State plan in accordance 
     with the employment plan'';
       (13) in paragraph (11)--
       (A) in subparagraph (A), by striking ``State's public'' and 
     all that follows and inserting ``State programs that are not 
     part of the statewide workforce development system of the 
     State;''; and
       (B) in subparagraph (C)--
       (i) by striking ``if appropriate--'' and all that follows 
     through ``entering into'' and inserting ``if appropriate, 
     entering into'';
       (ii) by redesignating subclauses (I), (II), and (III) as 
     clauses (i), (ii), and (iii), respectively; and
       (iii) by indenting the clauses and aligning the margins of 
     the clauses with the margins of clause (ii) of subparagraph 
     (A) of paragraph (8) (as redesignated in paragraph (5));
       (14) in paragraph (14) (as redesignated in paragraph (5))--

[[Page S11692]]

       (A) by striking ``(14)'' and inserting ``(14)(A)''; and
       (B) by inserting before the semicolon the following ``, 
     and, in the case of the designated State unit, will take 
     actions to take such views into account that include 
     providing timely notice, holding public hearings, preparing a 
     summary of hearing comments, and documenting and 
     disseminating information relating to the manner in which the 
     comments will affect services; and'';
       (15) in paragraph (16) (as redesignated in paragraph (5)), 
     by striking ``referrals to other Federal and State programs'' 
     and inserting ``referrals within the statewide workforce 
     development system of the State to programs''; and
       (16) in paragraph (17) (as redesignated in paragraph (5))--
       (A) in subparagraph (B), by striking ``written 
     rehabilitation program'' and inserting ``employment plan''; 
     and
       (B) in subparagraph (C)--
       (i) in clause (ii), by striking ``; and'' and inserting a 
     semicolon;
       (ii) in clause (iii), by striking the semicolon and 
     inserting ``; and''; and
       (iii) by adding at the end the following clause:
       ``(iv) the manner in which students who are individuals 
     with disabilities and who are not in special education 
     programs can access and receive vocational rehabilitation 
     services, where appropriate;''.
       (b) Conforming Amendments.--
       (1) Section 7 (29 U.S.C. 706) is amended--
       (A) in paragraph (3)(B)(ii), by striking 
     ``101(a)(1)(B)(i)'' and inserting ``101(a)(1)(B)(ii)''; and
       (B) in paragraph (22)(A)(i)(II), by striking 
     ``101(a)(5)(A)'' each place it appears and inserting 
     ``101(a)(6)(A)(iv)''.
       (2) Section 12(d) (29 U.S.C. 711(d)) is amended by striking 
     ``101(a)(5)(A)'' and inserting ``101(a)(6)(A)(iv)''.
       (3) Section 101(a) (29 U.S.C. 721(a)) is amended--
       (A) in paragraph (1)(A), by striking ``paragraph (4) of 
     this subsection'' and inserting ``paragraph (5)'';
       (B) in paragraph (2)--
       (i) in the matter preceding subparagraph (A), by striking 
     ``paragraph (1)(B)(i)'' and inserting ``paragraph 
     (1)(B)(ii)''; and
       (ii) in subparagraph (B)(i), by striking ``paragraph 
     (1)(B)(ii)'' and inserting ``paragraph (1)(B)(iii)'';
       (C) in paragraph (17) (as redesignated in subsection 
     (a)(5)), by striking ``paragraph (11)(C)(ii)'' and inserting 
     ``paragraph (11)(C)'';
       (D) in paragraph (22) (as redesignated in subsection 
     (a)(5)), by striking ``paragraph (36)'' and inserting 
     ``paragraph (24)''; and
       (E) in subparagraph (C) of paragraph (24) (as redesignated 
     in subsection (a)(5)), by striking ``101(a)(1)(A)(i)'' and 
     inserting ``paragraph (1)(A)(i)''.
       (4) Section 102 (29 U.S.C. 722) is amended--
       (A) in subsection (a)(3), by striking ``101(a)(24)'' and 
     inserting ``101(a)(17)''; and
       (B) in subsection (d)(2)(C)(ii)--
       (i) in subclause (II), by striking ``101(a)(36)'' and 
     inserting ``101(a)(24)''; and
       (ii) in subclause (III), by striking ``101(a)(36)(C)(ii)'' 
     and inserting ``101(a)(24)(C)(ii)''.
       (5) Section 105(a)(1) (29 U.S.C. 725(a)(1)) is amended by 
     striking ``101(a)(36)'' and inserting ``101(a)(24)''.
       (6) Section 107(a) (29 U.S.C. 727(a)) is amended--
       (A) in paragraph (2)(F), by striking ``101(a)(32)'' and 
     inserting ``101(a)(22)'';
       (B) in paragraph (3)(A), by striking ``101(a)(5)(A)'' and 
     inserting ``101(a)(6)(A)(iv)''; and
       (C) in paragraph (4), by striking ``101(a)(35)'' and 
     inserting ``101(a)(8)(A)(iii)''.
       (7) Section 111(a) (29 U.S.C. 731(a)) is amended--
       (A) in paragraph (1), by striking ``and development and 
     implementation'' and all that follows through ``referred to 
     in section 101(a)(34)(B)''; and
       (B) in paragraph (2)(A), by striking ``and such payments 
     shall not be made in an amount which would result in a 
     violation of the provisions of the State plan required by 
     section 101(a)(17)''.
       (8) Section 124(a)(1)(A) (29 U.S.C. 744(a)(1)(A)) is 
     amended by striking ``(not including sums used in accordance 
     with section 101(a)(34)(B))''.
       (9) Section 315(b)(2) (29 U.S.C. 777e(b)(2)) is amended by 
     striking ``101(a)(22)'' and inserting ``101(a)(16)''.
       (10) Section 635(b)(2) (29 U.S.C. 795n(b)(2)) is amended by 
     striking ``101(a)(5)'' and inserting ``101(a)(6)(A)(i)(I)''.
       (11) Section 802(h)(2)(B)(ii) (29 U.S.C. 797a(h)(2)(B)(ii)) 
     is amended by striking ``101(a)(5)(A)'' and inserting 
     ``101(a)(6)(A)(iv)''.
       (12) Section 102(e)(23)(A) of the Technology-Related 
     Assistance for Individuals With Disabilities Act of 1988 (29 
     U.S.C. 2212(e)(23)(A)) is amended by striking ``section 
     101(a)(36) of the Rehabilitation Act of 1973 (29 U.S.C. 
     721(a)(36))'' and inserting ``section 101(a)(24) of the 
     Rehabilitation Act of 1973 (29 U.S.C. 721(a)(24))''.
     SEC. 810. INDIVIDUALIZED EMPLOYMENT PLANS.

       (a) In General.--Section 102 (29 U.S.C. 722) is amended--
       (1) by striking the section heading and inserting the 
     following:

     ``SEC. 102. INDIVIDUALIZED EMPLOYMENT PLANS.'';

       (2) in subsection (a)(6), by striking ``written 
     rehabilitation program'' and inserting ``employment plan'';
       (3) in subsection (b)--
       (A) in paragraph (1)(A)--
       (i) in clause (i), by striking ``written rehabilitation 
     program'' and inserting ``employment plan''; and
       (ii) in clause (ii), by striking ``program'' and inserting 
     ``plan'';
       (B) in paragraph (1)(B)--
       (i) in the matter preceding clause (i), by striking 
     ``written rehabilitation program'' and inserting ``employment 
     plan'';
       (ii) in clause (iv)--

       (I) by striking subclause (I) and inserting the following:

       ``(I) include a statement of the specific vocational 
     rehabilitation services to be provided (including, if 
     appropriate, rehabilitation technology services and training 
     in how to use such services) that includes specification of 
     the public or private entity that will provide each such 
     vocational rehabilitation service and the projected dates for 
     the initiation and the anticipated duration of each such 
     service; and'';

       (II) by striking subclause (II); and
       (III) by redesignating subclause (III) as subclause (II); 
     and

       (iii) in clause (xi)(I), by striking ``program'' and 
     inserting ``plan'';
       (C) in paragraph (1)(C), by striking ``written 
     rehabilitation program and amendments to the program'' and 
     inserting ``employment plan and amendments to the plan''; and
       (D) in paragraph (2)--
       (i) by striking ``program'' each place the term appears and 
     inserting ``plan''; and
       (ii) by striking ``written rehabilitation'' each place the 
     term appears and inserting ``employment'';
       (4) in subsection (c)--
       (A) in paragraph (1), by striking ``written rehabilitation 
     program'' and inserting ``employment plan''; and
       (B) by striking ``written program'' each place the term 
     appears and inserting ``plan''; and
       (5) in subsection (d)--
       (A) in paragraph (5), by striking ``written rehabilitation 
     program'' and inserting ``employment plan''; and
       (B) in paragraph (6)(A), by striking the second sentence.
       (b) Conforming Amendments.--
       (1) The table of contents for the Act is amended by 
     striking the item relating to section 102 and inserting the 
     following:
``Sec. 102. Individualized employment plans.''.

       (2) Paragraphs (22)(B) and (27)(B), and subparagraphs (B) 
     and (C) of paragraph (34) of section 7 (29 U.S.C. 706), 
     section 12(e)(1) (29 U.S.C. 711(e)(1)), section 501(e) (29 
     U.S.C. 791(e)), subparagraphs (C), (D), and (E) of section 
     635(b)(6) (29 U.S.C. 795n(b)(6) (C), (D), and (E)), section 
     802(g)(8)(B) (29 U.S.C. 797a(g)(8)(B)), and section 
     803(c)(2)(D) (29 U.S.C. 797b(c)(2)(D)) are amended by 
     striking ``written rehabilitation program'' each place the 
     term appears and inserting ``employment plan''.
       (3) Section 7(22)(B)(i) (29 U.S.C. 706(22)(B)(i)) is 
     amended by striking ``rehabilitation program'' and inserting 
     ``employment plan''.
       (4) Section 107(a)(3)(D) (29 U.S.C. 727(a)(3)(D)) is 
     amended by striking ``written rehabilitation programs'' and 
     inserting ``employment plans''.
       (5) Section 101(b)(7)(A)(ii)(II) of the Technology-Related 
     Assistance for Individuals With Disabilities Act of 1988 (29 
     U.S.C. 2211(b)(7)(A)(ii)(II)) is amended by striking 
     ``written rehabilitation program'' and inserting ``employment 
     plan''.

     SEC. 811. SCOPE OF VOCATIONAL REHABILITATION SERVICES.

       Section 103 (29 U.S.C. 723) is amended--
       (1) in subsection (a)(4)--
       (A) in subparagraph (B), by striking ``surgery or'';
       (B) in subparagraph (D), by striking the comma at the end 
     and inserting ``, and'';
       (C) by striking subparagraph (E); and
       (D) by redesignating subparagraph (F) as subparagraph (E); 
     and
       (2) in subsection (b)(1), by striking ``the most severe''.

     SEC. 812. STATE REHABILITATION ADVISORY COUNCIL.

       (a) In General.--Section 105 (29 U.S.C. 725) is amended--
       (1) in subsection (b)(1)(A)(vi), by inserting before the 
     semicolon the following: ``who, to the extent feasible, are 
     members of any State workforce development board established 
     for the State under section 715 of the Workforce Development 
     Act of 1995''; and
       (2) in subsection (c)--
       (A) by redesignating paragraphs (3) through (7) as 
     paragraphs (4) through (8), respectively;
       (B) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) advise the designated State agency and the designated 
     State unit regarding strategies for ensuring that the 
     vocational rehabilitation program established under this 
     title becomes an integral part of the statewide workforce 
     development system of the State;''; and
       (C) in paragraph (6) (as redesignated in subparagraph 
     (A))--
       (i) by striking ``6024), and'' and inserting ``6024),''; 
     and
       (ii) by striking the semicolon at the end and inserting the 
     following: ``, and any State workforce development board 
     established for the State under section 715 of the Workforce 
     Development Act of 1995;''.
       (b) Conforming Amendment.--Subparagraph (B)(iv), and 
     clauses (ii)(I) and (iii)(I) of 

[[Page S11693]]
     subparagraph (C), of paragraph (24) (as redesignated in section 
     409(a)(5)) of section 101(a) (29 U.S.C. 721(a)) are amended 
     by striking ``105(c)(3)'' and inserting ``105(c)(4)''.

     SEC. 813. EVALUATION STANDARDS AND PERFORMANCE INDICATORS.

       Section 106(a)(1) (29 U.S.C. 726(a)(1)) is amended--
       (1) by striking ``1994'' and inserting ``1996''; and
       (2) by striking the period and inserting the following: 
     ``that shall, to the maximum extent appropriate, be 
     consistent with the State benchmarks established under 
     paragraphs (1) and (2) of section 731(c) of the Workforce 
     Development Act of 1995. For purposes of this section, the 
     Commissioner may modify or supplement such benchmarks, after 
     consultation with the Governing Board established under 
     section 771(b) of the Workforce Development Act of 1995, to 
     the extent necessary to address unique considerations 
     applicable to the participation of individuals with 
     disabilities in the vocational rehabilitation program.''.

     SEC. 814. REPEALS.

       (a) In General.--Title I (29 U.S.C. 720 et seq.) is 
     amended--
       (1) by repealing part C; and
       (2) by redesignating parts D and E as parts C and D, 
     respectively.
       (b) Conforming Amendments.--The table of contents for the 
     Act is amended--
       (1) by striking the items relating to part C of title I; 
     and
       (2) by striking the items relating to parts D and E of 
     title I and inserting the following:
      ``Part C--American Indian Vocational Rehabilitation Services

``Sec. 130. Vocational rehabilitation services grants.

    ``Part D--Vocational Rehabilitation Services Client Information

``Sec. 140. Review of data collection and reporting system.
``Sec. 141. Exchange of data.''.
     SEC. 815. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), the 
     amendments made by this subtitle shall take effect on the 
     date of enactment of this Act.
       (b) Statewide System Requirements.--The changes made in the 
     Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.) by the 
     amendments made by this subtitle that relate to State 
     benchmarks, or other components of a statewide system, shall 
     take effect--
       (1) in a State that submits and obtains approval of an 
     interim plan under section 762 for program year 1997, on July 
     1, 1997; and
       (2) in any other State, on July 1, 1998.
       Subtitle B--Amendments to Immigration and Nationality Act

     SEC. 821. PROHIBITION ON USE OF FUNDS FOR CERTAIN EMPLOYMENT 
                   ACTIVITIES.

       Section 412(c)(1) of the Immigration and Nationality Act is 
     amended by adding at the end the following new subparagraph:
       ``(D) Funds available under this paragraph may not be 
     provided to States for workforce employment activities 
     authorized and funded under the Workforce Development Act of 
     1995.''.
                        TITLE IX--CHILD SUPPORT

     SEC. 900. REFERENCE TO SOCIAL SECURITY ACT.

       Except as otherwise specifically provided, whenever in this 
     title an amendment is expressed in terms of an amendment to 
     or repeal of a section or other provision, the reference 
     shall be considered to be made to that section or other 
     provision of the Social Security Act.
     Subtitle A--Eligibility for Services; Distribution of Payments

     SEC. 901. STATE OBLIGATION TO PROVIDE CHILD SUPPORT 
                   ENFORCEMENT SERVICES.

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

     SEC. 902. DISTRIBUTION OF CHILD SUPPORT COLLECTIONS.

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

     ``SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

       ``(a) In General.--An amount collected on behalf of a 
     family as support by a State pursuant to a plan approved 
     under this part shall be distributed as follows:
       ``(1) Families receiving assistance.--In the case of a 
     family receiving assistance from the State, the State shall--
       ``(A) retain, or distribute to the family, the State share 
     of the amount so collected; and
       ``(B) pay to the Federal Government the Federal share of 
     the amount so collected.
       ``(2) Families that formerly received assistance.--In the 
     case of a family that formerly received assistance from the 
     State:
       ``(A) Current support payments.--The State shall, with 
     regard to amounts collected which represent amounts owed for 
     the current month, distribute the amounts so collected to the 
     family.
       ``(B) Payment of arrearages.--The State shall, with regard 
     to amounts collected which exceed amounts owed for the 
     current month, distribute the amounts so collected as 
     follows:
       ``(i) Distribution to the family to satisfy arrearages that 
     accrued after the family received assistance.--The State 
     shall distribute the amount so collected to the family to the 
     extent necessary to satisfy any support arrearages with 
     respect to the family that accrued after the family stopped 
     receiving assistance from the State.
       ``(ii) Distribution to the family to satisfy arrearages 
     that accrued before or while the family received assistance 
     to the extent payments exceed assistance received.--In the 
     case of arrearages of support obligations with respect to the 
     family that were assigned to the State making the collection, 
     as a condition of receiving assistance from the State, and 
     which accrued before or while the family received such 
     assistance, the State may retain all or a part of the State 
     share and if the State does so retain, shall retain and pay 
     to the Federal Government the Federal share of amounts so 
     collected, to the extent the amount so retained does not 
     exceed the amount of assistance provided to the family by the 
     State.
       ``(iii) Distribution of the remainder to the family.--To 
     the extent that neither clause (i) nor clause (ii) applies to 
     the amount so collected, the State shall distribute the 
     amount to the family.
       ``(3) Families that never received assistance.--In the case 
     of any other family, the State shall distribute the amount so 
     collected to the family.
       ``(b) Transition Rule.--Any rights to support obligations 
     which were assigned to a State as a condition of receiving 
     assistance from the State under part A before the effective 
     date of the Work Opportunity Act of 1995 shall remain 
     assigned after such date.
       ``(c) Definitions.--As used in subsection (a):
       ``(1) Assistance.--The term `assistance from the State' 
     means--
       ``(A) assistance under the State program funded under part 
     A or under the State plan approved under part A of this title 
     (as in effect before October 1, 1995); or
       ``(B) benefits under the State plan approved under part B 
     or E of this title.

[[Page S11694]]

       ``(2) Federal share.--The term `Federal share' means, with 
     respect to an amount collected by the State to satisfy a 
     support obligation owed to a family for a time period--
       ``(A) the greatest Federal medical assistance percentage in 
     effect for the State for fiscal year 1995 or any succeeding 
     fiscal year; or
       ``(B) if support is not owed to the family for any month 
     for which the family received aid to families with dependent 
     children under the State plan approved under part A of this 
     title (as in effect before October 1, 1995), the Federal 
     reimbursement percentage for the fiscal year in which the 
     time period occurs.
       ``(3) Federal medical assistance percentage.--The term 
     `Federal medical assistance percentage' means--
       ``(A) the Federal medical assistance percentage (as defined 
     in section 1905(b)) in the case of any State for which 
     subparagraph (B) does not apply; or
       ``(B) the Federal medical assistance percentage (as defined 
     in section 1118), in the case of Puerto Rico, the Virgin 
     Islands, Guam, and American Samoa.
       ``(4) Federal reimbursement percentage.--The term `Federal 
     reimbursement percentage' means, with respect to a fiscal 
     year--
       ``(A) the total amount paid to the State under section 403 
     for the fiscal year; divided by
       ``(B) the total amount expended by the State to carry out 
     the State program under part A during the fiscal year.
       ``(5) State share.--The term `State share' means 100 
     percent minus the Federal share.''.
       (b) Clerical Amendments.--Section 454 (42 U.S.C. 654) is 
     amended--
       (1) in paragraph (11)--
       (A) by striking ``(11)'' and inserting ``(11)(A)''; and
       (B) by inserting after the semicolon ``and''; and
       (2) by redesignating paragraph (12) as subparagraph (B) of 
     paragraph (11).
       (c) Effective Date.--
       (1) General rule.--Except as provided in paragraphs (2) and 
     (3), the amendment made by subsection (a) shall become 
     effective on October 1, 1999.
       (2) Earlier effective date for rules relating to 
     distribution of support collected for families receiving 
     assistance.--Section 457(a)(1) of the Social Security Act, as 
     added by the amendment made by subsection (a), shall become 
     effective on October 1, 1995.
       (3) Special rule.--A State may elect to have the amendment 
     made by subsection (a) become effective on a date earlier 
     than October 1, 1999, which date shall coincide with the 
     operation of the single statewide automated data processing 
     and information retrieval system required by section 454A of 
     the Social Security Act (as added by section 944(a)(2)) and 
     the State disbursement unit required by section 454B of the 
     Social Security Act (as added by section 912(b)), and the 
     existence of State requirements for assignment of support as 
     a condition of eligibility for assistance under part A of the 
     Social Security Act (as added by title I).
       (4) Clerical amendments.--The amendments made by subsection 
     (b) shall become effective on October 1, 1995.

     SEC. 903. RIGHTS TO NOTIFICATION AND HEARINGS.

       (a) In General.--Section 454 (42 U.S.C. 654), as amended by 
     section 902(b), is amended by inserting after paragraph (11) 
     the following new paragraph:
       ``(12) establish procedures to provide that--
       ``(A) individuals who are applying for or receiving 
     services under this part, or are parties to cases in which 
     services are being provided under this part--
       ``(i) receive notice of all proceedings in which support 
     obligations might be established or modified; and
       ``(ii) receive a copy of any order establishing or 
     modifying a child support obligation, or (in the case of a 
     petition for modification) a notice of determination that 
     there should be no change in the amount of the child support 
     award, within 14 days after issuance of such order or 
     determination; and
       ``(B) individuals applying for or receiving services under 
     this part have access to a fair hearing or other formal 
     complaint procedure that meets standards established by the 
     Secretary and ensures prompt consideration and resolution of 
     complaints (but the resort to such procedure shall not stay 
     the enforcement of any support order);''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall become effective on October 1, 1997.

     SEC. 904. PRIVACY SAFEGUARDS.

       (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), 
     as amended by section 901(b), is amended--
       (1) by striking ``and'' at the end of paragraph (24);
       (2) by striking the period at the end of paragraph (25) and 
     inserting ``; and''; and
       (3) by adding after paragraph (25) the following new 
     paragraph:
       ``(26) will have in effect safeguards, applicable to all 
     confidential information handled by the State agency, that 
     are designed to protect the privacy rights of the parties, 
     including--
       ``(A) safeguards against unauthorized use or disclosure of 
     information relating to proceedings or actions to establish 
     paternity, or to establish or enforce support;
       ``(B) prohibitions against the release of information on 
     the whereabouts of 1 party to another party against whom a 
     protective order with respect to the former party has been 
     entered; and
       ``(C) prohibitions against the release of information on 
     the whereabouts of 1 party to another party if the State has 
     reason to believe that the release of the information may 
     result in physical or emotional harm to the former party.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall become effective on October 1, 1997.
                  Subtitle B--Locate and Case Tracking

     SEC. 911. STATE CASE REGISTRY.

       Section 454A, as added by section 944(a)(2), is amended by 
     adding at the end the following new subsections:
       ``(e) State Case Registry.--
       ``(1) Contents.--The automated system required by this 
     section shall include a registry (which shall be known as the 
     `State case registry') that contains records with respect 
     to--
       ``(A) each case in which services are being provided by the 
     State agency under the State plan approved under this part; 
     and
       ``(B) each support order established or modified in the 
     State on or after October 1, 1998.
       ``(2) Linking of local registries.--The State case registry 
     may be established by linking local case registries of 
     support orders through an automated information network, 
     subject to this section.
       ``(3) Use of standardized data elements.--Such records 
     shall use standardized data elements for both parents (such 
     as names, social security numbers and other uniform 
     identification numbers, dates of birth, and case 
     identification numbers), and contain such other information 
     (such as on-case status) as the Secretary may require.
       ``(4) Payment records.--Each case record in the State case 
     registry with respect to which services are being provided 
     under the State plan approved under this part and with 
     respect to which a support order has been established shall 
     include a record of--
       ``(A) the amount of monthly (or other periodic) support 
     owed under the order, and other amounts (including 
     arrearages, interest or late payment penalties, and fees) due 
     or overdue under the order;
       ``(B) any amount described in subparagraph (A) that has 
     been collected;
       ``(C) the distribution of such collected amounts;
       ``(D) the birth date of any child for whom the order 
     requires the provision of support; and
       ``(E) the amount of any lien imposed with respect to the 
     order pursuant to section 466(a)(4).
       ``(5) Updating and monitoring.--The State agency operating 
     the automated system required by this section shall promptly 
     establish and maintain, and regularly monitor, case records 
     in the State case registry with respect to which services are 
     being provided under the State plan approved under this part, 
     on the basis of--
       ``(A) information on administrative actions and 
     administrative and judicial proceedings and orders relating 
     to paternity and support;
       ``(B) information obtained from comparison with Federal, 
     State, or local sources of information;
       ``(C) information on support collections and distributions; 
     and
       ``(D) any other relevant information.
       ``(f) Information Comparisons and Other Disclosures of 
     Information.--The State shall use the automated system 
     required by this section to extract information from (at such 
     times, and in such standardized format or formats, as may be 
     required by the Secretary), to share and compare information 
     with, and to receive information from, other data bases and 
     information comparison services, in order to obtain (or 
     provide) information necessary to enable the State agency (or 
     the Secretary or other State or Federal agencies) to carry 
     out this part, subject to section 6103 of the Internal 
     Revenue Code of 1986. Such information comparison activities 
     shall include the following:
       ``(1) Federal case registry of child support orders.--
     Furnishing to the Federal Case Registry of Child Support 
     Orders established under section 453(h) (and update as 
     necessary, with information including notice of expiration of 
     orders) the minimum amount of information on child support 
     cases recorded in the State case registry that is necessary 
     to operate the registry (as specified by the Secretary in 
     regulations).
       ``(2) Federal parent locator service.--Exchanging 
     information with the Federal Parent Locator Service for the 
     purposes specified in section 453.
       ``(3) Temporary family assistance and medicaid agencies.--
     Exchanging information with State agencies (of the State and 
     of other States) administering programs funded under part A, 
     programs operated under State plans under title XIX, and 
     other programs designated by the Secretary, as necessary to 
     perform State agency responsibilities under this part and 
     under such programs.
       ``(4) Intrastate and interstate information comparisons.--
     Exchanging information with other agencies of the State, 
     agencies of other States, and interstate information 
     networks, as necessary and appropriate to carry out (or 
     assist other States to carry out) the purposes of this 
     part.''.

     SEC. 912. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

       (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), 
     as amended by sections 901(b) and 904(a), is amended--

[[Page S11695]]

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

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

       ``(a) State Disbursement Unit.--
       ``(1) In general.--In order for a State to meet the 
     requirements of this section, the State agency must establish 
     and operate a unit (which shall be known as the `State 
     disbursement unit') for the collection and disbursement of 
     payments under support orders in all cases being enforced by 
     the State pursuant to section 454(4).
       ``(2) Operation.--The State disbursement unit shall be 
     operated--
       ``(A) directly by the State agency (or 2 or more State 
     agencies under a regional cooperative agreement), or (to the 
     extent appropriate) by a contractor responsible directly to 
     the State agency; and
       ``(B) in coordination with the automated system established 
     by the State pursuant to section 454A.
       ``(3) Linking of local disbursement units.--The State 
     disbursement unit may be established by linking local 
     disbursement units through an automated information network, 
     subject to this section. The Secretary must agree that the 
     system will not cost more nor take more time to establish or 
     operate than a centralized system. In addition, employers 
     shall be given 1 location to which income withholding is 
     sent.
       ``(b) Required Procedures.--The State disbursement unit 
     shall use automated procedures, electronic processes, and 
     computer-driven technology to the maximum extent feasible, 
     efficient, and economical, for the collection and 
     disbursement of support payments, including procedures--
       ``(1) for receipt of payments from parents, employers, and 
     other States, and for disbursements to custodial parents and 
     other obligees, the State agency, and the agencies of other 
     States;
       ``(2) for accurate identification of payments;
       ``(3) to ensure prompt disbursement of the custodial 
     parent's share of any payment; and
       ``(4) to furnish to any parent, upon request, timely 
     information on the current status of support payments under 
     an order requiring payments to be made by or to the parent.
       ``(c) Timing of Disbursements.--
       ``(1) In general.--Except as provided in paragraph (2), the 
     State disbursement unit shall distribute all amounts payable 
     under section 457(a) within 2 business days after receipt 
     from the employer or other source of periodic income, if 
     sufficient information identifying the payee is provided.
       ``(2) Permissive retention of arrearages.--The State 
     disbursement unit may delay the distribution of collections 
     toward arrearages until the resolution of any timely appeal 
     with respect to such arrearages.
       ``(d) Business Day Defined.--As used in this section, the 
     term `business day' means a day on which State offices are 
     open for regular business.''.
       (c) Use of Automated System.--Section 454A, as added by 
     section 944(a)(2) and as amended by section 911, is amended 
     by adding at the end the following new subsection:
       ``(g) Collection and Distribution of Support Payments.--
       ``(1) In general.--The State shall use the automated system 
     required by this section, to the maximum extent feasible, to 
     assist and facilitate the collection and disbursement of 
     support payments through the State disbursement unit operated 
     under section 454B, through the performance of functions, 
     including, at a minimum--
       ``(A) transmission of orders and notices to employers (and 
     other debtors) for the withholding of wages and other 
     income--
       ``(i) within 2 business days after receipt from a court, 
     another State, an employer, the Federal Parent Locator 
     Service, or another source recognized by the State of notice 
     of, and the income source subject to, such withholding; and
       ``(ii) using uniform formats prescribed by the Secretary;
       ``(B) ongoing monitoring to promptly identify failures to 
     make timely payment of support; and
       ``(C) automatic use of enforcement procedures (including 
     procedures authorized pursuant to section 466(c)) where 
     payments are not timely made.
       ``(2) Business day defined.--As used in paragraph (1), the 
     term `business day' means a day on which State offices are 
     open for regular business.''.
       (d) Effective Date.--The amendments made by this section 
     shall become effective on October 1, 1998.

     SEC. 913. STATE DIRECTORY OF NEW HIRES.

       (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), 
     as amended by sections 901(b), 904(a) and 912(a), is 
     amended--
       (1) by striking ``and'' at the end of paragraph (26);
       (2) by striking the period at the end of paragraph (27) and 
     inserting ``; and''; and
       (3) by adding after paragraph (27) the following new 
     paragraph:
       ``(28) provide that, on and after October 1, 1997, the 
     State will operate a State Directory of New Hires in 
     accordance with section 453A.''.
       (b) State Directory of New Hires.--Part D of title IV (42 
     U.S.C. 651-669) is amended by inserting after section 453 the 
     following new section:

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

       ``(a) Establishment.--
       ``(1) In general.--Not later than October 1, 1997, each 
     State shall establish an automated directory (to be known as 
     the `State Directory of New Hires') which shall contain 
     information supplied in accordance with subsection (b) by 
     employers on each newly hired employee.
       ``(2) Definitions.--As used in this section:
       ``(A) Employee.--The term `employee'--
       ``(i) means an individual who is an employee within the 
     meaning of chapter 24 of the Internal Revenue Code of 1986; 
     and
       ``(ii) does not include an employee of a Federal or State 
     agency performing intelligence or counterintelligence 
     functions, if the head of such agency has determined that 
     reporting pursuant to paragraph (1) with respect to the 
     employee could endanger the safety of the employee or 
     compromise an ongoing investigation or intelligence mission.
       ``(B) Employer.--The term `employer' includes--
       ``(i) any governmental entity, and
       ``(ii) any labor organization.
       ``(C) Labor organization.--The term `labor organization' 
     shall have the meaning given such term in section 2(5) of the 
     National Labor Relations Act, and includes any entity (also 
     known as a `hiring hall') which is used by the organization 
     and an employer to carry out requirements described in 
     section 8(f)(3) of such Act of an agreement between the 
     organization and the employer.
       ``(b) Employer Information.--
       ``(1) Reporting requirement.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     and (C), each employer shall furnish to the Directory of New 
     Hires of the State in which a newly hired employee works, a 
     report that contains the name, address, and social security 
     number of the employee, and the name of, and identifying 
     number assigned under section 6109 of the Internal Revenue 
     Code of 1986 to, the employer.
       ``(B) Multistate employers.--An employer that has employees 
     who are employed in 2 or more States and that transmits 
     reports magnetically or electronically may comply with 
     subparagraph (A) by designating 1 State in which such 
     employer has employees to which it will transmit the report 
     described in subparagraph (A), and transmitting such report 
     to such State. Any employer that transmits reports pursuant 
     to this subparagraph shall notify the Secretary in writing as 
     to which State such employer designates for the purpose of 
     sending reports.
       ``(C) Federal government employers.--Any department, 
     agency, or instrumentality of the United States shall comply 
     with subparagraph (A) by transmitting the report described in 
     subparagraph (A) to the National Directory of New Hires 
     established pursuant to section 453.
       ``(2) Timing of report.--The report required by paragraph 
     (1) with respect to an employee shall be made not later than 
     the later of--
       ``(A) 30 days after the date the employer hires the 
     employee; or
       ``(B) in the case of an employer that reports by magnetic 
     or electronic means, the 1st business day of the week 
     following the date on which the employee 1st receives wages 
     or other compensation from the employer.
       ``(c) Reporting Format and Method.--Each report required by 
     subsection (b) shall be made on a W-4 form and may be 
     transmitted by 1st class mail, magnetically, or 
     electronically.
       ``(d) Civil Money Penalties on Noncomplying Employers.--An 
     employer that fails to comply with subsection (b) with 
     respect to an employee shall be subject to a State civil 
     money penalty which shall be less than--
       ``(1) $25; or
       ``(2) $500 if, under State law, the failure is the result 
     of a conspiracy between the employer and the employee to not 
     supply the required report or to supply a false or incomplete 
     report.
       ``(e) Entry of Employer Information.--Information shall be 
     entered into the data base maintained by the State Directory 
     of New Hires within 5 business days of receipt from an 
     employer pursuant to subsection (b).
       ``(f) Information Comparisons.--
       ``(1) In general.--Not later than October 1, 1998, an 
     agency designated by the State shall, directly or by 
     contract, conduct automated comparisons of the social 
     security numbers reported by employers pursuant to subsection 
     (b) and the social security numbers appearing in the records 
     of the State case registry for cases being enforced under the 
     State plan.
       ``(2) Notice of match.--When an information comparison 
     conducted under paragraph 

[[Page S11696]]
     (1) reveals a match with respect to the social security number of an 
     individual required to provide support under a support order, 
     the State Directory of New Hires shall provide the agency 
     administering the State plan approved under this part of the 
     appropriate State with the name, address, and social security 
     number of the employee to whom the social security number is 
     assigned, and the name of, and identifying number assigned 
     under section 6109 of the Internal Revenue Code of 1986 to, 
     the employer.
       ``(g) Transmission of Information.--
       ``(1) Transmission of wage withholding notices to 
     employers.--Within 2 business days after the date information 
     regarding a newly hired employee is entered into the State 
     Directory of New Hires, the State agency enforcing the 
     employee's child support obligation shall transmit a notice 
     to the employer of the employee directing the employer to 
     withhold from the wages of the employee an amount equal to 
     the monthly (or other periodic) child support obligation of 
     the employee, unless the employee's wages are not subject to 
     withholding pursuant to section 466(b)(3).
       ``(2) Transmissions to the national directory of new 
     hires.--
       ``(A) New hire information.--Within 2 business days after 
     the date information regarding a newly hired employee is 
     entered into the State Directory of New Hires, the State 
     Directory of New Hires shall furnish the information to the 
     National Directory of New Hires.
       ``(B) Wage and unemployment compensation information.--The 
     State Directory of New Hires shall, on a quarterly basis, 
     furnish to the National Directory of New Hires extracts of 
     the reports required under section 303(a)(6) to be made to 
     the Secretary of Labor concerning the wages and unemployment 
     compensation paid to individuals, by such dates, in such 
     format, and containing such information as the Secretary of 
     Health and Human Services shall specify in regulations.
       ``(3) Business day defined.--As used in this subsection, 
     the term `business day' means a day on which State offices 
     are open for regular business.
       ``(h) Other Uses of New Hire Information.--
       ``(1) Location of child support obligors.--The agency 
     administering the State plan approved under this part shall 
     use information received pursuant to subsection (f)(2) to 
     locate individuals for purposes of establishing paternity and 
     establishing, modifying, and enforcing child support 
     obligations.
       ``(2) Verification of eligibility for certain programs.--A 
     State agency responsible for administering a program 
     specified in section 1137(b) shall have access to information 
     reported by employers pursuant to subsection (b) of this 
     section for purposes of verifying eligibility for the 
     program.
       ``(3) Administration of employment security and workers' 
     compensation.--State agencies operating employment security 
     and workers' compensation programs shall have access to 
     information reported by employers pursuant to subsection (b) 
     for the purposes of administering such programs.''.
       (c) Quarterly Wage Reporting.--Section 1137(a)(3) (42 
     U.S.C. 1320b-7(a)(3)) is amended--
       (1) by inserting ``(including State and local governmental 
     entities)'' after ``employers''; and
       (2) by inserting ``, and except that no report shall be 
     filed with respect to an employee of a State agency 
     performing intelligence or counterintelligence functions, if 
     the head of such agency has determined that filing such a 
     report could endanger the safety of the employee or 
     compromise an ongoing investigation or intelligence mission'' 
     after ``paragraph (2)''.
     SEC. 914. AMENDMENTS CONCERNING INCOME WITHHOLDING.

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

     SEC. 915. LOCATOR INFORMATION FROM INTERSTATE NETWORKS.

       Section 466(a) (42 U.S.C. 666(a)) is amended by adding at 
     the end the following new paragraph:
       ``(12) Procedures to ensure that all Federal and State 
     agencies conducting activities under this part have access to 
     any system used by the State to locate an individual for 
     purposes relating to motor vehicles or law enforcement.''.
     SEC. 916. EXPANSION OF THE FEDERAL PARENT LOCATOR SERVICE.

       (a) Expanded Authority To Locate Individuals and Assets.--
     Section 453 (42 U.S.C. 653) is amended--
       (1) in subsection (a), by striking all that follows 
     ``subsection (c))'' and inserting ``, for the purpose of 
     establishing parentage, establishing, setting the amount of, 
     modifying, or enforcing child support obligations, or 
     enforcing child visitation orders--
       ``(1) information on, or facilitating the discovery of, the 
     location of any individual--
       ``(A) who is under an obligation to pay child support or 
     provide child visitation rights;
       ``(B) against whom such an obligation is sought;
       ``(C) to whom such an obligation is owed,
     including the individual's social security number (or 
     numbers), most recent address, and the name, address, and 
     employer identification number of the individual's employer;
       ``(2) information on the individual's wages (or other 
     income) from, and benefits of, employment (including rights 
     to or enrollment in group health care coverage); and
       ``(3) information on the type, status, location, and amount 
     of any assets of, or debts owed by or to, any such 
     individual.''; and
       (2) in subsection (b), in the matter preceding paragraph 
     (1), by striking ``social security'' and all that follows 
     through ``absent parent'' and inserting ``information 
     described in subsection (a)''.
       (b) Authorized Person for Information Regarding Visitation 
     Rights.--Section 453(c) (42 U.S.C. 653(c)) is amended--
       (1) in paragraph (1), by striking ``support'' and inserting 
     ``support or to seek to enforce orders providing child 
     visitation rights'';
       (2) in paragraph (2), by striking ``, or any agent of such 
     court; and'' and inserting ``or to issue an order against a 
     resident parent for visitation rights, or any agent of such 
     court;'';
       (3) by striking the period at the end of paragraph (3) and 
     inserting ``; and''; and
       (4) by adding at the end the following new paragraph:
       ``(4) the absent parent, only with regard to a court order 
     against a resident parent for child visitation rights.''.
       (c) Reimbursement for Information From Federal Agencies.--
     Section 453(e)(2) (42 U.S.C. 653(e)(2)) is amended in the 4th 
     sentence by inserting ``in an amount which the Secretary 
     determines to be reasonable payment for the information 
     exchange (which amount shall not include payment for the 
     costs of obtaining, compiling, or maintaining the 
     information)'' before the period.
       (d) Reimbursement for Reports by State Agencies.--Section 
     453 (42 U.S.C. 653) is amended by adding at the end the 
     following new subsection:
       ``(g) The Secretary may reimburse Federal and State 
     agencies for the costs incurred by such entities in 
     furnishing information requested by the Secretary under this 
     section in an amount which the Secretary determines to be 
     reasonable payment for the information exchange (which amount 
     shall not 

[[Page S11697]]
     include payment for the costs of obtaining, compiling, or maintaining 
     the information).''.
       (e) Technical Amendments.--
       (1) Sections 452(a)(9), 453(a), 453(b), 463(a), 463(e), and 
     463(f) (42 U.S.C. 652(a)(9), 653(a), 653(b), 663(a), 663(e), 
     and 663(f)) are each amended by inserting ``Federal'' before 
     ``Parent'' each place such term appears.
       (2) Section 453 (42 U.S.C. 653) is amended in the heading 
     by adding ``federal'' before ``parent''.
       (f) New Components.--Section 453 (42 U.S.C. 653), as 
     amended by subsection (d) of this section, is amended by 
     adding at the end the following new subsection:
       ``(h)(1) Not later than October 1, 1998, in order to assist 
     States in administering programs under State plans approved 
     under this part and programs funded under part A, and for the 
     other purposes specified in this section, the Secretary shall 
     establish and maintain in the Federal Parent Locator Service 
     an automated registry (which shall be known as the `Federal 
     Case Registry of Child Support Orders'), which shall contain 
     abstracts of support orders and other information described 
     in paragraph (2) with respect to each case in each State case 
     registry maintained pursuant to section 454A(e), as furnished 
     (and regularly updated), pursuant to section 454A(f), by 
     State agencies administering programs under this part.
       ``(2) The information referred to in paragraph (1) with 
     respect to a case shall be such information as the Secretary 
     may specify in regulations (including the names, social 
     security numbers or other uniform identification numbers, and 
     State case identification numbers) to identify the 
     individuals who owe or are owed support (or with respect to 
     or on behalf of whom support obligations are sought to be 
     established), and the State or States which have the case.
       ``(i)(1) In order to assist States in administering 
     programs under State plans approved under this part and 
     programs funded under part A, and for the other purposes 
     specified in this section, the Secretary shall, not later 
     than October 1, 1996, establish and maintain in the Federal 
     Parent Locator Service an automated directory to be known as 
     the National Directory of New Hires, which shall contain the 
     information supplied pursuant to section 453A(g)(2).
       ``(2) Information shall be entered into the data base 
     maintained by the National Directory of New Hires within 2 
     business days of receipt pursuant to section 453A(g)(2).
       ``(3) The Secretary of the Treasury shall have access to 
     the information in the National Directory of New Hires for 
     purposes of administering section 32 of the Internal Revenue 
     Code of 1986, or the advance payment of the earned income tax 
     credit under section 3507 of such Code, and verifying a claim 
     with respect to employment in a tax return.
       ``(4) The Secretary shall maintain within the National 
     Directory of New Hires a list of multistate employers that 
     report information regarding newly hired employees pursuant 
     to section 453A(b)(1)(B), and the State which each such 
     employer has designated to receive such information.
       ``(j)(1)(A) The Secretary shall transmit information on 
     individuals and employers maintained under this section to 
     the Social Security Administration to the extent necessary 
     for verification in accordance with subparagraph (B).
       ``(B) The Social Security Administration shall verify the 
     accuracy of, correct, or supply to the extent possible, and 
     report to the Secretary, the following information supplied 
     by the Secretary pursuant to subparagraph (A):
       ``(i) The name, social security number, and birth date of 
     each such individual.
       ``(ii) The employer identification number of each such 
     employer.
       ``(2) For the purpose of locating individuals in a 
     paternity establishment case or a case involving the 
     establishment, modification, or enforcement of a support 
     order, the Secretary shall--
       ``(A) compare information in the National Directory of New 
     Hires against information in the support case abstracts in 
     the Federal Case Registry of Child Support Orders not less 
     often than every 2 business days; and
       ``(B) within 2 such days after such a comparison reveals a 
     match with respect to an individual, report the information 
     to the State agency responsible for the case.
       ``(3) To the extent and with the frequency that the 
     Secretary determines to be effective in assisting States to 
     carry out their responsibilities under programs operated 
     under this part and programs funded under part A, the 
     Secretary shall--
       ``(A) compare the information in each component of the 
     Federal Parent Locator Service maintained under this section 
     against the information in each other such component (other 
     than the comparison required by paragraph (2)), and report 
     instances in which such a comparison reveals a match with 
     respect to an individual to State agencies operating such 
     programs; and
       ``(B) disclose information in such registries to such State 
     agencies.
       ``(4) The National Directory of New Hires shall provide the 
     Commissioner of Social Security with all information in the 
     National Directory, which shall be used to determine the 
     accuracy of payments under the supplemental security income 
     program under title XVI and in connection with benefits under 
     title II.
       ``(5) The Secretary may provide access to information 
     reported by employers pursuant to section 453A(b) for 
     research purposes found by the Secretary to be likely to 
     contribute to achieving the purposes of part A or this part, 
     but without personal identifiers.
       ``(k)(1) The Secretary shall reimburse the Commissioner of 
     Social Security, at a rate negotiated between the Secretary 
     and the Commissioner, for the costs incurred by the 
     Commissioner in performing the verification services 
     described in subsection (j).
       ``(2) The Secretary shall reimburse costs incurred by State 
     directories of new hires in furnishing information as 
     required by subsection (j)(3), at rates which the Secretary 
     determines to be reasonable (which rates shall not include 
     payment for the costs of obtaining, compiling, or maintaining 
     such information).
       ``(3) A State or Federal agency that receives information 
     from the Secretary pursuant to this section shall reimburse 
     the Secretary for costs incurred by the Secretary in 
     furnishing the information, at rates which the Secretary 
     determines to be reasonable (which rates shall include 
     payment for the costs of obtaining, verifying, maintaining, 
     and comparing the information).
       ``(l) Information in the Federal Parent Locator Service, 
     and information resulting from comparisons using such 
     information, shall not be used or disclosed except as 
     expressly provided in this section, subject to section 6103 
     of the Internal Revenue Code of 1986.
       ``(m) The Secretary shall establish and implement 
     safeguards with respect to the entities established under 
     this section designed to--
       ``(1) ensure the accuracy and completeness of information 
     in the Federal Parent Locator Service; and
       ``(2) restrict access to confidential information in the 
     Federal Parent Locator Service to authorized persons, and 
     restrict use of such information to authorized purposes.
       ``(n) Each department, agency, and instrumentality of the 
     United States shall on a quarterly basis report to the 
     Federal Parent Locator Service the name and social security 
     number of each employee and the wages paid to the employee 
     during the previous quarter, except that no report shall be 
     filed with respect to an employee of a department, agency, or 
     instrumentality performing intelligence or 
     counterintelligence functions, if the head of such 
     department, agency, or instrumentality has determined that 
     filing such a report could endanger the safety of the 
     employee or compromise an ongoing investigation or 
     intellgence mission.''.
       (f) Conforming Amendments.--
       (1) To part d of title iv of the social security act.--
     Section 454(8)(B) (42 U.S.C. 654(8)(B)) is amended to read as 
     follows:
       ``(B) the Federal Parent Locator Service established under 
     section 453;''.
       (2) To federal unemployment tax act.--Section 3304(a)(16) 
     of the Internal Revenue Code of 1986 is amended--
       (A) by striking ``Secretary of Health, Education, and 
     Welfare'' each place such term appears and inserting 
     ``Secretary of Health and Human Services'';
       (B) in subparagraph (B), by striking ``such information'' 
     and all that follows and inserting ``information furnished 
     under subparagraph (A) or (B) is used only for the purposes 
     authorized under such subparagraph;'';
       (C) by striking ``and'' at the end of subparagraph (A);
       (D) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (E) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) wage and unemployment compensation information 
     contained in the records of such agency shall be furnished to 
     the Secretary of Health and Human Services (in accordance 
     with regulations promulgated by such Secretary) as necessary 
     for the purposes of the National Directory of New Hires 
     established under section 453(i) of the Social Security Act, 
     and''.
       (3) To state grant program under title iii of the social 
     security act.--Subsection (h) of section 303 (42 U.S.C. 503) 
     is amended to read as follows:
       ``(h)(1) The State agency charged with the administration 
     of the State law shall, on a reimbursable basis--
       ``(A) disclose quarterly, to the Secretary of Health and 
     Human Services wage and claim information, as required 
     pursuant to section 453(i)(1), contained in the records of 
     such agency;
       ``(B) ensure that information provided pursuant to 
     subparagraph (A) meets such standards relating to correctness 
     and verification as the Secretary of Health and Human 
     Services, with the concurrence of the Secretary of Labor, may 
     find necessary; and
       ``(C) establish such safeguards as the Secretary of Labor 
     determines are necessary to insure that information disclosed 
     under subparagraph (A) is used only for purposes of section 
     453(i)(1) in carrying out the child support enforcement 
     program under title IV.
       ``(2) Whenever the Secretary of Labor, after reasonable 
     notice and opportunity for hearing to the State agency 
     charged with the administration of the State law, finds that 
     there is a failure to comply substantially with the 
     requirements of paragraph (1), the Secretary of Labor shall 
     notify such State agency that further payments will not be 
     made to the State until the Secretary of Labor is satisfied 
     that there is no longer any such failure. Until the Secretary 
     of Labor is so satisfied, the Secretary shall make no future 
     certification to the Secretary of the Treasury with respect 
     to the State.
       ``(3) For purposes of this subsection--

[[Page S11698]]

       ``(A) the term `wage information' means information 
     regarding wages paid to an individual, the social security 
     account number of such individual, and the name, address, 
     State, and the Federal employer identification number of the 
     employer paying such wages to such individual; and
       ``(B) the term `claim information' means information 
     regarding whether an individual is receiving, has received, 
     or has made application for, unemployment compensation, the 
     amount of any such compensation being received (or to be 
     received by such individual), and the individual's current 
     (or most recent) home address.''.

     SEC. 917. COLLECTION AND USE OF SOCIAL SECURITY NUMBERS FOR 
                   USE IN CHILD SUPPORT ENFORCEMENT.

       (a) State Law Requirement.--Section 466(a) (42 U.S.C. 
     666(a)), as amended by section 915, is amended by adding at 
     the end the following new paragraph:
       ``(13) Procedures requiring that the social security number 
     of--
       ``(A) any applicant for a professional license, commercial 
     driver's license, occupational license, or marriage license 
     be recorded on the application;
       ``(B) any individual who is subject to a divorce decree, 
     support order, or paternity determination or acknowledgment 
     be placed in the records relating to the matter; and
       ``(C) any individual who has died be placed in the records 
     relating to the death and be recorded on the death 
     certificate.''.
       (b) Conforming Amendments.--Section 205(c)(2)(C) (42 U.S.C. 
     405(c)(2)(C)), as amended by section 321(a)(9) of the Social 
     Security Independence and Program Improvements Act of 1994, 
     is amended--
       (1) in clause (i), by striking ``may require'' and 
     inserting ``shall require'';
       (2) in clause (ii), by inserting after the 1st sentence the 
     following: ``In the administration of any law involving the 
     issuance of a marriage certificate or license, each State 
     shall require each party named in the certificate or license 
     to furnish to the State (or political subdivision thereof), 
     or any State agency having administrative responsibility for 
     the law involved, the social security number of the party.'';
       (3) in clause (vi), by striking ``may'' and inserting 
     ``shall''; and
       (4) by adding at the end the following new clauses:
       ``(x) An agency of a State (or a political subdivision 
     thereof) charged with the administration of any law 
     concerning the issuance or renewal of a license, certificate, 
     permit, or other authorization to engage in a profession, an 
     occupation, or a commercial activity shall require all 
     applicants for issuance or renewal of the license, 
     certificate, permit, or other authorization to provide the 
     applicant's social security number to the agency for the 
     purpose of administering such laws, and for the purpose of 
     responding to requests for information from an agency 
     operating pursuant to part D of title IV.
       ``(xi) All divorce decrees, support orders, and paternity 
     determinations issued, and all paternity acknowledgments 
     made, in each State shall include the social security number 
     of each party to the decree, order, determination, or 
     acknowledgement in the records relating to the matter.''.
         Subtitle C--Streamlining and Uniformity of Procedures

     SEC. 921. ADOPTION OF UNIFORM STATE LAWS.

       Section 466 (42 U.S.C. 666) is amended by adding at the end 
     the following new subsection:
       ``(f)(1) In order to satisfy section 454(20)(A) on or after 
     January 1, 1997, each State must have in effect the Uniform 
     Interstate Family Support Act, as approved by the National 
     Conference of Commissioners on Uniform State Laws in August 
     1992 (with the modifications and additions specified in this 
     subsection), and the procedures required to implement such 
     Act.
       ``(2) The State law enacted pursuant to paragraph (1) may 
     be applied to any case involving an order which is 
     established or modified in a State and which is sought to be 
     modified or enforced in another State.
       ``(3) The State law enacted pursuant to paragraph (1) of 
     this subsection shall contain the following provision in lieu 
     of section 611(a)(1) of the Uniform Interstate Family Support 
     Act:
       ```(1) the following requirements are met:
       ```(i) the child, the individual obligee, and the obligor--
       ```(I) do not reside in the issuing State; and
       ```(II) either reside in this State or are subject to the 
     jurisdiction of this State pursuant to section 201; and
       ```(ii) in any case where another State is exercising or 
     seeks to exercise jurisdiction to modify the order, the 
     conditions of section 204 are met to the same extent as 
     required for proceedings to establish orders; or'.
       ``(4) The State law enacted pursuant to paragraph (1) shall 
     provide that, in any proceeding subject to the law, process 
     may be served (and proved) upon persons in the State by any 
     means acceptable in any State which is the initiating or 
     responding State in the proceeding.''.

     SEC. 922. IMPROVEMENTS TO FULL FAITH AND CREDIT FOR CHILD 
                   SUPPORT ORDERS.

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

     SEC. 923. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.

       Section 466(a) (42 U.S.C. 666(a)), as amended by sections 
     915 and 917(a), is amended by adding at the end the following 
     new paragraph:
       ``(14) Procedures under which--
       ``(A)(i) the State shall respond within 5 business days to 
     a request made by another State to enforce a support order; 
     and
       ``(ii) the term `business day' means a day on which State 
     offices are open for regular business;
       ``(B) the State may, by electronic or other means, transmit 
     to another State a request for assistance in a case involving 
     the enforcement of a support order, which request--
       ``(i) shall include such information as will enable the 
     State to which the request is transmitted to compare the 
     information about the case to the information in the data 
     bases of the State; and
       ``(ii) shall constitute a certification by the requesting 
     State--
       ``(I) of the amount of support under the order the payment 
     of which is in arrears; and
       ``(II) that the requesting State has complied with all 
     procedural due process requirements applicable to the case;

       ``(C) if the State provides assistance to another State 
     pursuant to this paragraph with respect to a case, neither 
     State shall consider the case to be transferred to the 
     caseload of such other State; and
       ``(D) the State shall maintain records of--

[[Page S11699]]

       ``(i) the number of such requests for assistance received 
     by the State;
       ``(ii) the number of cases for which the State collected 
     support in response to such a request; and
       ``(iii) the amount of such collected support.''.

     SEC. 924. USE OF FORMS IN INTERSTATE ENFORCEMENT.

       (a) Promulgation.--Section 452(a) (42 U.S.C. 652(a)) is 
     amended--
       (1) by striking ``and'' at the end of paragraph (9);
       (2) by striking the period at the end of paragraph (10) and 
     inserting ``; and''; and
       (3) by adding at the end the following new paragraph:
       ``(11) not later than 60 days after the date of the 
     enactment of the Work Opportunity Act of 1995, establish an 
     advisory committee, which shall include State directors of 
     programs under this part, and not later than June 30, 1996, 
     after consultation with the advisory committee, promulgate 
     forms to be used by States in interstate cases for--
       ``(A) collection of child support through income 
     withholding;
       ``(B) imposition of liens; and
       ``(C) administrative subpoenas.''.
       (b) Use by States.--Section 454(9) (42 U.S.C. 654(9)) is 
     amended--
       (1) by striking ``and'' at the end of subparagraph (C);
       (2) by inserting ``and'' at the end of subparagraph (D); 
     and
       (3) by adding at the end the following new subparagraph:
       ``(E) no later than October 1, 1996, in using the forms 
     promulgated pursuant to section 452(a)(11) for income 
     withholding, imposition of liens, and issuance of 
     administrative subpoenas in interstate child support 
     cases;''.

     SEC. 925. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

       (a) State Law Requirements.--Section 466 (42 U.S.C. 666), 
     as amended by section 914, is amended--
       (1) in subsection (a)(2), by striking the 1st sentence and 
     inserting the following: ``Expedited administrative and 
     judicial procedures (including the procedures specified in 
     subsection (c)) for establishing paternity and for 
     establishing, modifying, and enforcing support 
     obligations.''; and
       (2) by inserting after subsection (b) the following new 
     subsection:
       ``(c) The procedures specified in this subsection are the 
     following:
       ``(1) Procedures which give the State agency the authority 
     to take the following actions relating to establishment or 
     enforcement of support orders, without the necessity of 
     obtaining an order from any other judicial or administrative 
     tribunal, and to recognize and enforce the authority of State 
     agencies of other States) to take the following actions:
       ``(A) To order genetic testing for the purpose of paternity 
     establishment as provided in section 466(a)(5).
       ``(B) To subpoena any financial or other information needed 
     to establish, modify, or enforce a support order, and to 
     impose penalties for failure to respond to such a subpoena.
       ``(C) To require all entities in the State (including for-
     profit, nonprofit, and governmental employers) to provide 
     promptly, in response to a request by the State agency of 
     that or any other State administering a program under this 
     part, information on the employment, compensation, and 
     benefits of any individual employed by such entity as an 
     employee or contractor, and to sanction failure to respond to 
     any such request.
       ``(D) To obtain access, subject to safeguards on privacy 
     and information security, to the following records (including 
     automated access, in the case of records maintained in 
     automated data bases):
       ``(i) Records of other State and local government agencies, 
     including--
       ``(I) vital statistics (including records of marriage, 
     birth, and divorce);
       ``(II) State and local tax and revenue records (including 
     information on residence address, employer, income and 
     assets);
       ``(III) records concerning real and titled personal 
     property;
       ``(IV) records of occupational and professional licenses, 
     and records concerning the ownership and control of 
     corporations, partnerships, and other business entities;
       ``(V) employment security records;
       ``(VI) records of agencies administering public assistance 
     programs;
       ``(VII) records of the motor vehicle department; and
       ``(VIII) corrections records.

       ``(ii) Certain records held by private entities, 
     including--

       ``(I) customer records of public utilities and cable 
     television companies; and
       ``(II) information (including information on assets and 
     liabilities) on individuals who owe or are owed support (or 
     against or with respect to whom a support obligation is 
     sought) held by financial institutions (subject to 
     limitations on liability of such entities arising from 
     affording such access).

       ``(E) In cases where support is subject to an assignment in 
     order to comply with a requirement imposed pursuant to part A 
     or section 1912, or to a requirement to pay through the State 
     disbursement unit established pursuant to section 454B, upon 
     providing notice to obligor and obligee, to direct the 
     obligor or other payor to change the payee to the appropriate 
     government entity.
       ``(F) To order income withholding in accordance with 
     subsections (a)(1) and (b) of section 466.
       ``(G) In cases in which there is a support arrearage, to 
     secure assets to satisfy the arrearage by--
       ``(i) intercepting or seizing periodic or lump-sum payments 
     from--

       ``(I) a State or local agency, including unemployment 
     compensation, workers' compensation, and other benefits; and
       ``(II) judgments, settlements, and lotteries;

       ``(ii) attaching and seizing assets of the obligor held in 
     financial institutions;
       ``(iii) attaching public and private retirement funds; and
       ``(iv) imposing liens in accordance with subsection (a)(4) 
     and, in appropriate cases, to force sale of property and 
     distribution of proceeds.
       ``(H) For the purpose of securing overdue support, to 
     increase the amount of monthly support payments to include 
     amounts for arrearages, subject to such conditions or 
     limitations as the State may provide.

     Such procedures shall be subject to due process safeguards, 
     including (as appropriate) requirements for notice, 
     opportunity to contest the action, and opportunity for an 
     appeal on the record to an independent administrative or 
     judicial tribunal.
       ``(2) The expedited procedures required under subsection 
     (a)(2) shall include the following rules and authority, 
     applicable with respect to all proceedings to establish 
     paternity or to establish, modify, or enforce support orders:
       ``(A) Procedures under which--
       ``(i) each party to any paternity or child support 
     proceeding is required (subject to privacy safeguards) to 
     file with the tribunal and the State case registry upon entry 
     of an order, and to update as appropriate, information on 
     location and identity of the party, including social security 
     number, residential and mailing addresses, telephone number, 
     driver's license number, and name, address, and name and 
     telephone number of employer; and
       ``(ii) in any subsequent child support enforcement action 
     between the parties, upon sufficient showing that diligent 
     effort has been made to ascertain the location of such a 
     party, the tribunal may deem State due process requirements 
     for notice and service of process to be met with respect to 
     the party, upon delivery of written notice to the most recent 
     residential or employer address filed with the tribunal 
     pursuant to clause (i).
       ``(B) Procedures under which--
       ``(i) the State agency and any administrative or judicial 
     tribunal with authority to hear child support and paternity 
     cases exerts statewide jurisdiction over the parties; and
       ``(ii) in a State in which orders are issued by courts or 
     administrative tribunals, a case may be transferred between 
     local jurisdictions in the State without need for any 
     additional filing by the petitioner, or service of process 
     upon the respondent, to retain jurisdiction over the 
     parties.''.
       (b) Automation of State Agency Functions.--Section 454A, as 
     added by section 944(a)(2) and as amended by sections 911 and 
     912(c), is amended by adding at the end the following new 
     subsection:
       ``(h) Expedited Administrative Procedures.--The automated 
     system required by this section shall be used, to the maximum 
     extent feasible, to implement the expedited administrative 
     procedures required by section 466(c).''.
                  Subtitle D--Paternity Establishment

     SEC. 931. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT.

       (a) State Laws Required.--Section 466(a)(5) (42 U.S.C. 
     666(a)(5)) is amended to read as follows:
       ``(5)(A)(i) Procedures which permit the establishment of 
     the paternity of a child at any time before the child attains 
     21 years of age.
       ``(ii) As of August 16, 1984, clause (i) shall also apply 
     to a child for whom paternity has not been established or for 
     whom a paternity action was brought but dismissed because a 
     statute of limitations of less than 21 years was then in 
     effect in the State.
       ``(B)(i) Procedures under which the State is required, in a 
     contested paternity case, unless otherwise barred by State 
     law, to require the child and all other parties (other than 
     individuals found under section 454(29) to have good cause 
     for refusing to cooperate) to submit to genetic tests upon 
     the request of any such party if the request is supported by 
     a sworn statement by the party--
       ``(I) alleging paternity, and setting forth facts 
     establishing a reasonable possibility of the requisite sexual 
     contact between the parties; or
       ``(II) denying paternity, and setting forth facts 
     establishing a reasonable possibility of the nonexistence of 
     sexual contact between the parties.
       ``(ii) Procedures which require the State agency in any 
     case in which the agency orders genetic testing--
       ``(I) to pay costs of such tests, subject to recoupment 
     (where the State so elects) from the alleged father if 
     paternity is established; and
       ``(II) to obtain additional testing in any case where an 
     original test result is contested, upon request and advance 
     payment by the contestant.
       ``(C)(i) Procedures for a simple civil process for 
     voluntarily acknowledging paternity under which the State 
     must provide that, before a mother and a putative father can 
     sign an acknowledgment of paternity, the mother and the 
     putative father must be given notice, 

[[Page S11700]]
     orally and in writing, of the alternatives to, the legal consequences 
     of, and the rights (including, if 1 parent is a minor, any 
     rights afforded due to minority status) and responsibilities 
     that arise from, signing the acknowledgment.
       ``(ii) Such procedures must include a hospital-based 
     program for the voluntary acknowledgment of paternity 
     focusing on the period immediately before or after the birth 
     of a child.
       ``(iii)(I) Such procedures must require the State agency 
     responsible for maintaining birth records to offer voluntary 
     paternity establishment services.
       ``(II)(aa) The Secretary shall prescribe regulations 
     governing voluntary paternity establishment services offered 
     by hospitals and birth record agencies.
       ``(bb) The Secretary shall prescribe regulations specifying 
     the types of other entities that may offer voluntary 
     paternity establishment services, and governing the provision 
     of such services, which shall include a requirement that such 
     an entity must use the same notice provisions used by, use 
     the same materials used by, provide the personnel providing 
     such services with the same training provided by, and 
     evaluate the provision of such services in the same manner as 
     the provision of such services is evaluated by, voluntary 
     paternity establishment programs of hospitals and birth 
     record agencies.
       ``(iv) Such procedures must require the State to develop 
     and use an affidavit for the voluntary acknowledgment of 
     paternity which includes the minimum requirements of the 
     affidavit developed by the Secretary under section 452(a)(7) 
     for the voluntary acknowledgment of paternity, and to give 
     full faith and credit to such an affidavit signed in any 
     other State according to its procedures.
       ``(D)(i) Procedures under which the name of the father 
     shall be included on the record of birth of the child only if 
     the father and mother have signed an acknowledgment of 
     paternity and under which a signed acknowledgment of 
     paternity is considered a legal finding of paternity, subject 
     to the right of any signatory to rescind the acknowledgment 
     within 60 days.
       ``(ii) Procedures under which, after the 60-day period 
     referred to in clause (i), a signed acknowledgment of 
     paternity may be challenged in court only on the basis of 
     fraud, duress, or material mistake of fact, with the burden 
     of proof upon the challenger, and under which the legal 
     responsibilities (including child support obligations) of any 
     signatory arising from the acknowledgment may not be 
     suspended during the challenge, except for good cause shown.
       ``(E) Procedures under which judicial or administrative 
     proceedings are not required or permitted to ratify an 
     unchallenged acknowledgment of paternity.
       ``(F) Procedures--
       ``(i) requiring the admission into evidence, for purposes 
     of establishing paternity, of the results of any genetic test 
     that is--
       ``(I) of a type generally acknowledged as reliable by 
     accreditation bodies designated by the Secretary; and
       ``(II) performed by a laboratory approved by such an 
     accreditation body;
       ``(ii) requiring an objection to genetic testing results to 
     be made in writing not later than a specified number of days 
     before any hearing at which the results may be introduced 
     into evidence (or, at State option, not later than a 
     specified number of days after receipt of the results); and
       ``(iii) making the test results admissible as evidence of 
     paternity without the need for foundation testimony or other 
     proof of authenticity or accuracy, unless objection is made.
       ``(G) Procedures which create a rebuttable or, at the 
     option of the State, conclusive presumption of paternity upon 
     genetic testing results indicating a threshold probability 
     that the alleged father is the father of the child.
       ``(H) Procedures requiring a default order to be entered in 
     a paternity case upon a showing of service of process on the 
     defendant and any additional showing required by State law.
       ``(I) Procedures providing that the parties to an action to 
     establish paternity are not entitled to a trial by jury.
       ``(J) Procedures which require that a temporary order be 
     issued, upon motion by a party, requiring the provision of 
     child support pending an administrative or judicial 
     determination of parentage, where there is clear and 
     convincing evidence of paternity (on the basis of genetic 
     tests or other evidence).
       ``(K) Procedures under which bills for pregnancy, 
     childbirth, and genetic testing are admissible as evidence 
     without requiring third-party foundation testimony, and shall 
     constitute prima facie evidence of amounts incurred for such 
     services or for testing on behalf of the child.
       ``(L) Procedures ensuring that the putative father has a 
     reasonable opportunity to initiate a paternity action.
       ``(M) Procedures under which voluntary acknowledgments and 
     adjudications of paternity by judicial or administrative 
     processes are filed with the State registry of birth records 
     for comparison with information in the State case 
     registry.''.
       (b) National Paternity Acknowledgment Affidavit.--Section 
     452(a)(7) (42 U.S.C. 652(a)(7)) is amended by inserting ``, 
     and develop an affidavit to be used for the voluntary 
     acknowledgment of paternity which shall include the social 
     security number of each parent'' before the semicolon.
       (c) Technical Amendment.--Section 468 (42 U.S.C. 668) is 
     amended by striking ``a simple civil process for voluntarily 
     acknowledging paternity and''.

     SEC. 932. OUTREACH FOR VOLUNTARY PATERNITY ESTABLISHMENT.

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

     SEC. 933. COOPERATION BY APPLICANTS FOR AND RECIPIENTS OF 
                   TEMPORARY FAMILY ASSISTANCE.

       Section 454 (42 U.S.C. 654), as amended by sections 901(b), 
     904(a), 912(a), and 913(a), is amended--
       (1) by striking ``and'' at the end of paragraph (27);
       (2) by striking the period at the end of paragraph (28) and 
     inserting ``; and''; and
       (3) by inserting after paragraph (28) the following new 
     paragraph:
       ``(29) provide that the State agency responsible for 
     administering the State plan--
       ``(A) shall make the determination (and redetermination at 
     appropriate intervals) as to whether an individual who has 
     applied for or is receiving assistance under the State 
     program funded under part A or the State program under title 
     XIX is cooperating in good faith with the State in 
     establishing the paternity of, or in establishing, modifying, 
     or enforcing a support order for, any child of the individual 
     by providing the State agency with the name of, and such 
     other information as the State agency may require with 
     respect to, the noncustodial parent of the child, subject to 
     such good cause and other exceptions as the State shall 
     establish and taking into account the best interests of the 
     child;
       ``(B) shall require the individual to supply additional 
     necessary information and appear at interviews, hearings, and 
     legal proceedings;
       ``(C) shall require the individual and the child to submit 
     to genetic tests pursuant to judicial or administrative 
     order; and
       ``(D) shall promptly notify the individual and the State 
     agency administering the State program funded under part A 
     and the State agency administering the State program under 
     title XIX of each such determination, and if noncooperation 
     is determined, the basis therefore.''.
             Subtitle E--Program Administration and Funding

     SEC. 941. PERFORMANCE-BASED INCENTIVES AND PENALTIES.

       (a) Incentive Payments.--
       (1) In general.--Section 458 (42 U.S.C. 658) is amended--
       (A) in subsection (a), by striking ``aid to families'' and 
     all through the end period, and inserting ``assistance under 
     a program funded under part A, and regardless of the economic 
     circumstances of their parents, the Secretary shall, from the 
     support collected which would otherwise represent the 
     reimbursement to the Federal government under section 457, 
     pay to each State for each fiscal year, on a quarterly basis 
     (as described in subsection (e)) beginning with the quarter 
     commencing October 1, 1999, an incentive payment in an amount 
     determined under subsections (b) and (c).'';
       (B) by striking subsections (b) and (c) and inserting the 
     following:
       ``(b)(1) Not later than 60 days after the date of the 
     enactment of the Work Opportunity Act of 1995, the Secretary 
     shall establish a committee which shall include State 
     directors of programs under this part and which shall develop 
     for the Secretary's approval a formula for the distribution 
     of incentive payments to the States.
       ``(2) The formula developed and approved under paragraph 
     (1)--
       ``(A) shall result in a percentage of the collections 
     described in subsection (a) being distributed to each State 
     based on the State's comparative performance in the following 
     areas and any other areas approved by the Secretary under 
     this subsection:
       ``(i) The IV-D paternity establishment percentage, as 
     defined in section 452(g)(2).
       ``(ii) The percentage of cases with a support order with 
     respect to which services are being provided under the State 
     plan approved under this part.
       ``(iii) The percentage of cases with a support order in 
     which child support is paid with respect to which services 
     are being so provided.
       ``(iv) In cases receiving services under the State plan 
     approved under this part, the amount of child support 
     collected compared to the amount of outstanding child support 
     owed.
       ``(v) The cost-effectiveness of the State program;
       ``(B) shall take into consideration--
       ``(i) the impact that incentives can have on reducing the 
     need to provide public assistance and on permanently removing 
     families from public assistance;
       ``(ii) the need to balance accuracy and fairness with 
     simplicity of understanding and data gathering;
       ``(iii) the need to reward performance which improves 
     short- and long-term program outcomes, especially 
     establishing paternity and support orders and encouraging the 
     timely payment of support;
       ``(iv) the Statewide paternity establishment percentage;
       ``(v) baseline data on current performance and projected 
     costs of performance increases 

[[Page S11701]]
     to assure that top performing States can actually achieve the top 
     incentive levels with a reasonable resource investment;
       ``(vi) performance outcomes which would warrant an increase 
     in the total incentive payments made to the States; and
       ``(vii) the use or distribution of any portion of the total 
     incentive payments in excess of the total of the payments 
     which may be distributed under subsection (c);
       ``(C) shall be determined so as to distribute to the States 
     total incentive payments equal to the total incentive 
     payments for all States in fiscal year 1994, plus a portion 
     of any increase in the reimbursement to the Federal 
     Government under section 457 for fiscal year 1999 or any 
     other increase based on other performance outcomes approved 
     by the Secretary under this subsection;
       ``(D) shall use a definition of the term `State' which does 
     not include any area within the jurisdiction of an Indian 
     tribal government; and
       ``(E) shall use a definition of the term `Statewide 
     paternity establishment percentage' to mean with respect to a 
     State and a fiscal year--
       ``(i) the total number of children in the State who were 
     born out of wedlock, who have not attained 1 year of age and 
     for whom paternity is established or acknowledged during the 
     fiscal year; divided by
       ``(ii) the total number of children born out of wedlock in 
     the State during the fiscal year.
       ``(c) The total amount of the incentives payment made by 
     the Secretary to a State in a fiscal year shall not exceed 90 
     percent of the total amounts expended by such State during 
     such year for the operation of the plan approved under 
     section 454, less payments to the State pursuant to section 
     455 for such year.'';
       (2) in subsection (d), by striking ``, and any amounts'' 
     through ``shall be excluded''.
       (b) Payments to Political Subdivisions.--Section 454(22) 
     (42 U.S.C. 654(22)) is amended by inserting before the 
     semicolon the following: ``, but a political subdivision 
     shall not be entitled to receive, and the State may retain, 
     any amount in excess of the amount the political subdivision 
     expends on the State program under this part, less the amount 
     equal to the percentage of that expenditure paid by the 
     Secretary under section 455''.
       (c) Calculation of IV-D Paternity Establishment 
     Percentage.--
       (1) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is amended--
       (A) in the matter preceding subparagraph (A) by inserting 
     ``its overall performance in child support enforcement is 
     satisfactory (as defined in section 458(b) and regulations of 
     the Secretary), and'' after ``1994,''; and
       (B) in each of subparagraphs (A) and (B), by striking 
     ``75'' and inserting ``90''.
       (2) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is 
     amended in the matter preceding clause (i)--
       (A) by striking ``paternity establishment percentage'' and 
     inserting ``IV-D paternity establishment percentage''; and
       (B) by striking ``(or all States, as the case may be)''.
       (3) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is amended--
       (A) by striking subparagraph (A) and redesignating 
     subparagraphs (B) and (C) as subparagraphs (A) and (B), 
     respectively;
       (B) in subparagraph (A) (as so redesignated), by striking 
     ``the percentage of children born out-of-wedlock in a State'' 
     and inserting ``the percentage of children in a State who are 
     born out of wedlock or for whom support has not been 
     established''; and
       (C) in subparagraph (B) (as so redesignated)--
       (i) by inserting ``and overall performance in child support 
     enforcement'' after ``paternity establishment percentages''; 
     and
       (ii) by inserting ``and securing support'' before the 
     period.
       (d) Effective Dates.--
       (1) Incentive adjustments.--
       (A) In general.--The amendments made by subsections (a) and 
     (b) shall become effective on the date of the enactment of 
     this Act, except to the extent provided in subparagraph (B).
       (B) Exception.--Section 458 of the Social Security Act, as 
     in effect before the date of the enactment of this section, 
     shall be effective for purposes of incentive payments to 
     States for fiscal years before fiscal year 2000.
       (2) Penalty reductions.--The amendments made by subsection 
     (c) shall become effective with respect to calendar quarters 
     beginning on and after the date of the enactment of this Act.

     SEC. 942. FEDERAL AND STATE REVIEWS AND AUDITS.

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

     SEC. 943. REQUIRED REPORTING PROCEDURES.

       (a) Establishment.--Section 452(a)(5) (42 U.S.C. 652(a)(5)) 
     is amended by inserting ``, and establish procedures to be 
     followed by States for collecting and reporting information 
     required to be provided under this part, and establish 
     uniform definitions (including those necessary to enable the 
     measurement of State compliance with the requirements of this 
     part relating to expedited processes) to be applied in 
     following such procedures'' before the semicolon.
       (b) State Plan Requirement.--Section 454 (42 U.S.C. 654), 
     as amended by sections 901(b), 904(a), 912(a), 913(a), and 
     933, is amended--
       (1) by striking ``and'' at the end of paragraph (28);
       (2) by striking the period at the end of paragraph (29) and 
     inserting ``; and''; and
       (3) by adding after paragraph (29) the following new 
     paragraph:
       ``(30) provide that the State shall use the definitions 
     established under section 452(a)(5) in collecting and 
     reporting information as required under this part.''.

     SEC. 944. AUTOMATED DATA PROCESSING REQUIREMENTS.

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

       ``(a) In General.--In order for a State to meet the 
     requirements of this section, the State agency administering 
     the State program under this part shall have in operation a 
     single statewide automated data processing and information 
     retrieval system which has the capability to perform the 
     tasks specified in this section with the frequency and in the 
     manner required by or under this part.
       ``(b) Program Management.--The automated system required by 
     this section shall perform such functions as the Secretary 
     may specify relating to management of the State program under 
     this part, including--
       ``(1) controlling and accounting for use of Federal, State, 
     and local funds in carrying out the program; and
       ``(2) maintaining the data necessary to meet Federal 
     reporting requirements under this part on a timely basis.
       ``(c) Calculation of Performance Indicators.--In order to 
     enable the Secretary to determine the incentive and penalty 
     adjustments required by sections 452(g) and 458, the State 
     agency shall--
       ``(1) use the automated system--

[[Page S11702]]

       ``(A) to maintain the requisite data on State performance 
     with respect to paternity establishment and child support 
     enforcement in the State; and
       ``(B) to calculate the IV-D paternity establishment 
     percentage and overall performance in child support 
     enforcement for the State for each fiscal year; and
       ``(2) have in place systems controls to ensure the 
     completeness and reliability of, and ready access to, the 
     data described in paragraph (1)(A), and the accuracy of the 
     calculations described in paragraph (1)(B).
       ``(d) Information Integrity and Security.--The State agency 
     shall have in effect safeguards on the integrity, accuracy, 
     and completeness of, access to, and use of data in the 
     automated system required by this section, which shall 
     include the following (in addition to such other safeguards 
     as the Secretary may specify in regulations):
       ``(1) Policies restricting access.--Written policies 
     concerning access to data by State agency personnel, and 
     sharing of data with other persons, which--
       ``(A) permit access to and use of data only to the extent 
     necessary to carry out the State program under this part; and
       ``(B) specify the data which may be used for particular 
     program purposes, and the personnel permitted access to such 
     data.
       ``(2) Systems controls.--Systems controls (such as 
     passwords or blocking of fields) to ensure strict adherence 
     to the policies described in paragraph (1).
       ``(3) Monitoring of access.--Routine monitoring of access 
     to and use of the automated system, through methods such as 
     audit trails and feedback mechanisms, to guard against and 
     promptly identify unauthorized access or use.
       ``(4) Training and information.--Procedures to ensure that 
     all personnel (including State and local agency staff and 
     contractors) who may have access to or be required to use 
     confidential program data are informed of applicable 
     requirements and penalties (including those in section 6103 
     of the Internal Revenue Code of 1986), and are adequately 
     trained in security procedures.
       ``(5) Penalties.--Administrative penalties (up to and 
     including dismissal from employment) for unauthorized access 
     to, or disclosure or use of, confidential data.''.
       (3) Regulations.--The Secretary of Health and Human 
     Services shall prescribe final regulations for implementation 
     of section 454A of the Social Security Act not later than 2 
     years after the date of the enactment of this Act.
       (4) Implementation timetable.--Section 454(24) (42 U.S.C. 
     654(24)), as amended by sections 904(a)(2) and 912(a)(1), is 
     amended to read as follows:
       ``(24) provide that the State will have in effect an 
     automated data processing and information retrieval system--
       ``(A) by October 1, 1997, which meets all requirements of 
     this part which were enacted on or before the date of 
     enactment of the Family Support Act of 1988; and
       ``(B) by October 1, 1999, which meets all requirements of 
     this part enacted on or before the date of the enactment of 
     the Work Opportunity Act of 1995, except that such deadline 
     shall be extended by 1 day for each day (if any) by which the 
     Secretary fails to meet the deadline imposed by section 
     944(a)(3) of the Work Opportunity Act of 1995.''.
       (b) Special Federal Matching Rate for Development Costs of 
     Automated Systems.--
       (1) In general.--Section 455(a) (42 U.S.C. 655(a)) is 
     amended--
       (A) in paragraph (1)(B)--
       (i) by striking ``90 percent'' and inserting ``the percent 
     specified in paragraph (3)'';
       (ii) by striking ``so much of''; and
       (iii) by striking ``which the Secretary'' and all that 
     follows and inserting ``, and''; and
       (B) by adding at the end the following new paragraph:
       ``(3)(A) The Secretary shall pay to each State, for each 
     quarter in fiscal years 1996 and 1997, 90 percent of so much 
     of the State expenditures described in paragraph (1)(B) as 
     the Secretary finds are for a system meeting the requirements 
     specified in section 454(16) (as in effect on the day before 
     the date of the enactment of the Work Opportunity Act of 
     1995), but limited to the amount approved for States in the 
     advance planning documents of such States submitted before 
     May 1, 1995.
       ``(B)(i) The Secretary shall pay to each State, for each 
     quarter in fiscal years 1997 through 2001, the percentage 
     specified in clause (ii) of so much of the State expenditures 
     described in paragraph (1)(B) as the Secretary finds are for 
     a system meeting the requirements of sections 454(16) and 
     454A.
       ``(ii) The percentage specified in this clause is the 
     greater of--
       ``(I) 80 percent; or
       ``(II) the percentage otherwise applicable to Federal 
     payments to the State under subparagraph (A) (as adjusted 
     pursuant to section 458).''.
       (2) Temporary limitation on payments under special federal 
     matching rate.--
       (A) In general.--The Secretary of Health and Human Services 
     may not pay more than $260,000,000 in the aggregate under 
     section 455(a)(3) of the Social Security Act for fiscal years 
     1996, 1997, 1998, 1999, and 2000.
       (B) Allocation of limitation among states.--The total 
     amount payable to a State under section 455(a)(3) of such Act 
     for fiscal years 1996, 1997, 1998, 1999, and 2000 shall not 
     exceed the limitation determined for the State by the 
     Secretary of Health and Human Services in regulations.
       (C) Allocation formula.--The regulations referred to in 
     subparagraph (B) shall prescribe a formula for allocating the 
     amount specified in subparagraph (A) among States with plans 
     approved under part D of title IV of the Social Security Act, 
     which shall take into account--
       (i) the relative size of State caseloads under such part; 
     and
       (ii) the level of automation needed to meet the automated 
     data processing requirements of such part.
       (c) Conforming Amendment.--Section 123(c) of the Family 
     Support Act of 1988 (102 Stat. 2352; Public Law 100-485) is 
     repealed.

     SEC. 945. TECHNICAL ASSISTANCE.

       (a) For Training of Federal and State Staff, Research and 
     Demonstration Programs, and Special Projects of Regional or 
     National Significance.--Section 452 (42 U.S.C. 652) is 
     amended by adding at the end the following new subsection:
       ``(j) Out of any money in the Treasury of the United States 
     not otherwise appropriated, there is hereby appropriated to 
     the Secretary for each fiscal year an amount equal to 1 
     percent of the total amount paid to the Federal Government 
     pursuant to section 457(a) during the immediately preceding 
     fiscal year (as determined on the basis of the most recent 
     reliable data available to the Secretary as of the end of the 
     3rd calendar quarter following the end of such preceding 
     fiscal year), to cover costs incurred by the Secretary for--
       ``(1) information dissemination and technical assistance to 
     States, training of State and Federal staff, staffing 
     studies, and related activities needed to improve programs 
     under this part (including technical assistance concerning 
     State automated systems required by this part); and
       ``(2) research, demonstration, and special projects of 
     regional or national significance relating to the operation 
     of State programs under this part.''.
       (b) Operation of Federal Parent Locator Service.--Section 
     453 (42 U.S.C. 653), as amended by section 916(f), is amended 
     by adding at the end the following new subsection:
       ``(n) Out of any money in the Treasury of the United States 
     not otherwise appropriated, there is hereby appropriated to 
     the Secretary for each fiscal year an amount equal to 2 
     percent of the total amount paid to the Federal Government 
     pursuant to section 457(a) during the immediately preceding 
     fiscal year (as determined on the basis of the most recent 
     reliable data available to the Secretary as of the end of the 
     3rd calendar quarter following the end of such preceding 
     fiscal year), to cover costs incurred by the Secretary for 
     operation of the Federal Parent Locator Service under this 
     section, to the extent such costs are not recovered through 
     user fees.''.

     SEC. 946. REPORTS AND DATA COLLECTION BY THE SECRETARY.

       (a) Annual Report to Congress.--
       (1) Section 452(a)(10)(A) (42 U.S.C. 652(a)(10)(A)) is 
     amended--
       (A) by striking ``this part;'' and inserting ``this part, 
     including--''; and
       (B) by adding at the end the following new clauses:
       ``(i) the total amount of child support payments collected 
     as a result of services furnished during the fiscal year to 
     individuals receiving services under this part;
       ``(ii) the cost to the States and to the Federal Government 
     of so furnishing the services; and
       ``(iii) the number of cases involving families--

       ``(I) who became ineligible for assistance under State 
     programs funded under part A during a month in the fiscal 
     year; and
       ``(II) with respect to whom a child support payment was 
     received in the month;''.

       (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is 
     amended--
       (A) in the matter preceding clause (i)--
       (i) by striking ``with the data required under each clause 
     being separately stated for cases'' and inserting 
     ``separately stated for (1) cases'';
       (ii) by striking ``cases where the child was formerly 
     receiving'' and inserting ``or formerly received'';
       (iii) by inserting ``or 1912'' after ``471(a)(17)''; and
       (iv) by inserting ``(2)'' before ``all other'';
       (B) in each of clauses (i) and (ii), by striking ``, and 
     the total amount of such obligations'';
       (C) in clause (iii), by striking ``described in'' and all 
     that follows and inserting ``in which support was collected 
     during the fiscal year;'';
       (D) by striking clause (iv); and
       (E) by redesignating clause (v) as clause (vii), and 
     inserting after clause (iii) the following new clauses:
       ``(iv) the total amount of support collected during such 
     fiscal year and distributed as current support;
       ``(v) the total amount of support collected during such 
     fiscal year and distributed as arrearages;
       ``(vi) the total amount of support due and unpaid for all 
     fiscal years; and''.
       (3) Section 452(a)(10)(G) (42 U.S.C. 652(a)(10)(G)) is 
     amended by striking ``on the use of Federal courts and''.
       (4) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended--
       (A) in subparagraph (H), by striking ``and'';
       (B) in subparagraph (I), by striking the period and 
     inserting ``; and''; and
       (C) by inserting after subparagraph (I) the following new 
     subparagraph:

[[Page S11703]]

       ``(J) compliance, by State, with the standards established 
     pursuant to subsections (h) and (i).''.
       (5) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended by 
     striking all that follows subparagraph (J), as added by 
     paragraph (4).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall be effective with respect to fiscal year 1996 and 
     succeeding fiscal years.
      Subtitle F--Establishment and Modification of Support Orders

     SEC. 951. NATIONAL CHILD SUPPORT GUIDELINES COMMISSION.

       (a) Establishment.--There is hereby established a 
     commission to be known as the National Child Support 
     Guidelines Commission (in this section referred to as the 
     ``Commission'').
       (b) General Duties.--
       (1) In general.--The Commission shall determine--
       (A) whether it is appropriate to develop a national child 
     support guideline for consideration by the Congress or for 
     adoption by individual States; or
       (B) based on a study of various guideline models, the 
     benefits and deficiencies of such models, and any needed 
     improvements.
       (2) Development of models.--If the Commission determines 
     under paragraph (1)(A) that a national child support 
     guideline is needed or under paragraph (1)(B) that 
     improvements to guideline models are needed, the Commission 
     shall develop such national guideline or improvements.
       (c) Matters for Consideration by the Commission.--In making 
     the recommendations concerning guidelines required under 
     subsection (b), the Commission shall consider--
       (1) the adequacy of State child support guidelines 
     established pursuant to section 467;
       (2) matters generally applicable to all support orders, 
     including--
       (A) the feasibility of adopting uniform terms in all child 
     support orders;
       (B) how to define income and under what circumstances 
     income should be imputed; and
       (C) tax treatment of child support payments;
       (3) the appropriate treatment of cases in which either or 
     both parents have financial obligations to more than 1 
     family, including the effect (if any) to be given to--
       (A) the income of either parent's spouse; and
       (B) the financial responsibilities of either parent for 
     other children or stepchildren;
       (4) the appropriate treatment of expenses for child care 
     (including care of the children of either parent, and work-
     related or job-training-related child care);
       (5) the appropriate treatment of expenses for health care 
     (including uninsured health care) and other extraordinary 
     expenses for children with special needs;
       (6) the appropriate duration of support by 1 or both 
     parents, including--
       (A) support (including shared support) for postsecondary or 
     vocational education; and
       (B) support for disabled adult children;
       (7) procedures to automatically adjust child support orders 
     periodically to address changed economic circumstances, 
     including changes in the Consumer Price Index or either 
     parent's income and expenses in particular cases;
       (8) procedures to help noncustodial parents address 
     grievances regarding visitation and custody orders to prevent 
     such parents from withholding child support payments until 
     such grievances are resolved; and
       (9) whether, or to what extent, support levels should be 
     adjusted in cases in which custody is shared or in which the 
     noncustodial parent has extended visitation rights.
       (d) Membership.--
       (1) Number; appointment.--
       (A) In general.--The Commission shall be composed of 12 
     individuals appointed not later than January 15, 1997, of 
     which--
       (i) 2 shall be appointed by the Chairman of the Committee 
     on Finance of the Senate, and 1 shall be appointed by the 
     ranking minority member of the Committee;
       (ii) 2 shall be appointed by the Chairman of the Committee 
     on Ways and Means of the House of Representatives, and 1 
     shall be appointed by the ranking minority member of the 
     Committee; and
       (iii) 6 shall be appointed by the Secretary of Health and 
     Human Services.
       (B) Qualifications of members.--Members of the Commission 
     shall have expertise and experience in the evaluation and 
     development of child support guidelines. At least 1 member 
     shall represent advocacy groups for custodial parents, at 
     least 1 member shall represent advocacy groups for 
     noncustodial parents, and at least 1 member shall be the 
     director of a State program under part D of title IV of the 
     Social Security Act.
       (2) Terms of office.--Each member shall be appointed for a 
     term of 2 years. A vacancy in the Commission shall be filled 
     in the manner in which the original appointment was made.
       (e) Commission Powers, Compensation, Access to Information, 
     and Supervision.--The 1st sentence of subparagraph (C), the 
     1st and 3rd sentences of subparagraph (D), subparagraph (F) 
     (except with respect to the conduct of medical studies), 
     clauses (ii) and (iii) of subparagraph (G), and subparagraph 
     (H) of section 1886(e)(6) of the Social Security Act shall 
     apply to the Commission in the same manner in which such 
     provisions apply to the Prospective Payment Assessment 
     Commission.
       (f) Report.--Not later than 2 years after the appointment 
     of members, the Commission shall submit to the President, the 
     Committee on Ways and Means of the House of Representatives, 
     and the Committee on Finance of the Senate, a recommended 
     national child support guideline and a final assessment of 
     issues relating to such a proposed national child support 
     guideline.
       (g) Termination.--The Commission shall terminate 6 months 
     after the submission of the report described in subsection 
     (e).

     SEC. 952. SIMPLIFIED PROCESS FOR REVIEW AND ADJUSTMENT OF 
                   CHILD SUPPORT ORDERS.

       Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amended to 
     read as follows:
       ``(10) Procedures under which the State shall review and 
     adjust each support order being enforced under this part upon 
     the request of either parent or the State if there is an 
     assignment. Such procedures shall provide the following:
       ``(A) The State shall review and, as appropriate, adjust 
     the support order every 3 years, taking into account the best 
     interests of the child involved.
       ``(B)(i) The State may elect to review and, if appropriate, 
     adjust an order pursuant to subparagraph (A) by--
       ``(I) reviewing and, if appropriate, adjusting the order in 
     accordance with the guidelines established pursuant to 
     section 467(a) if the amount of the child support award under 
     the order differs from the amount that would be awarded in 
     accordance with the guidelines; or
       ``(II) applying a cost-of-living adjustment to the order in 
     accordance with a formula developed by the State and permit 
     either party to contest the adjustment, within 30 days after 
     the date of the notice of the adjustment, by making a request 
     for review and, if appropriate, adjustment of the order in 
     accordance with the child support guidelines established 
     pursuant to section 467(a).
       ``(ii) Any adjustment under clause (i) shall be made 
     without a requirement for proof or showing of a change in 
     circumstances.
       ``(C) The State may use automated methods (including 
     automated comparisons with wage or State income tax data) to 
     identify orders eligible for review, conduct the review, 
     identify orders eligible for adjustment, and apply the 
     appropriate adjustment to the orders eligible for adjustment 
     under the threshold established by the State.
       ``(D)(i) The State shall, at the request of either parent 
     subject to such an order or of any State child support 
     enforcement agency, review and, if appropriate, adjust the 
     order in accordance with the guidelines established pursuant 
     to section 467(a) based upon a substantial change in the 
     circumstances of either parent.
       ``(ii) The State shall provide notice to the parents 
     subject to such an order informing them of their right to 
     request the State to review and, if appropriate, adjust the 
     order pursuant to clause (i). The notice may be included in 
     the order.''.

     SEC. 953. FURNISHING CONSUMER REPORTS FOR CERTAIN PURPOSES 
                   RELATING TO CHILD SUPPORT.

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

     SEC. 954. NONLIABILITY FOR DEPOSITORY INSTITUTIONS PROVIDING 
                   FINANCIAL RECORDS TO STATE CHILD SUPPORT 
                   ENFORCEMENT AGENCIES IN CHILD SUPPORT CASES.

       (a) In General.--Notwithstanding any other provision of 
     Federal or State law, a depository institution shall not be 
     liable under any Federal or State law to any person for 
     disclosing any financial record of an individual to a State 
     child support enforcement agency attempting to establish, 
     modify, or enforce a child support obligation of such 
     individual.
       (b) Prohibition of Disclosure of Financial Record Obtained 
     by State Child Support Enforcement Agency.--A State child 
     support enforcement agency which obtains a financial record 
     of an individual from a financial institution pursuant to 
     subsection 

[[Page S11704]]
     (a) may disclose such financial record only for the purpose of, and to 
     the extent necessary in, establishing, modifying, or 
     enforcing a child support obligation of such individual.
       (c) Civil Damages for Unauthorized Disclosure.--
       (1) Disclosure by state officer or employee.--If any person 
     knowingly, or by reason of negligence, discloses a financial 
     record of an individual in violation of subsection (b), such 
     individual may bring a civil action for damages against such 
     person in a district court of the United States.
       (2) No liability for good faith but erroneous 
     interpretation.--No liability shall arise under this 
     subsection with respect to any disclosure which results from 
     a good faith, but erroneous, interpretation of subsection 
     (b).
       (3) Damages.--In any action brought under paragraph (1), 
     upon a finding of liability on the part of the defendant, the 
     defendant shall be liable to the plaintiff in an amount equal 
     to the sum of--
       (A) the greater of--
       (i) $1,000 for each act of unauthorized disclosure of a 
     financial record with respect to which such defendant is 
     found liable; or
       (ii) the sum of--

       (I) the actual damages sustained by the plaintiff as a 
     result of such unauthorized disclosure; plus
       (II) in the case of a willful disclosure or a disclosure 
     which is the result of gross negligence, punitive damages; 
     plus

       (B) the costs (including attorney's fees) of the action.
       (d) Definitions.--For purposes of this section:
       (1) The term ``depository institution'' means--
       (A) a depository institution, as defined in section 3(c) of 
     the Federal Deposit Insurance Act (12 U.S.C. 1813(c));
       (B) an institution-affiliated party, as defined in section 
     3(u) of such Act (12 U.S.C. 1813(v)); and
       (C) any Federal credit union or State credit union, as 
     defined in section 101 of the Federal Credit Union Act (12 
     U.S.C. 1752), including an institution-affiliated party of 
     such a credit union, as defined in section 206(r) of such Act 
     (12 U.S.C. 1786(r)).
       (2) The term ``financial record'' has the meaning given 
     such term in section 1101 of the Right to Financial Privacy 
     Act of 1978 (12 U.S.C. 3401).
       (3) The term ``State child support enforcement agency'' 
     means a State agency which administers a State program for 
     establishing and enforcing child support obligations.
               Subtitle G--Enforcement of Support Orders

     SEC. 961. INTERNAL REVENUE SERVICE COLLECTION OF ARREARAGES.

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

     SEC. 962. AUTHORITY TO COLLECT SUPPORT FROM FEDERAL 
                   EMPLOYEES.

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

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

       ``(a) Consent To Support Enforcement.--Notwithstanding any 
     other provision of law (including section 207 of this Act and 
     section 5301 of title 38, United States Code), effective 
     January 1, 1975, moneys (the entitlement to which is based 
     upon remuneration for employment) due from, or payable by, 
     the United States or the District of Columbia (including any 
     agency, subdivision, or instrumentality thereof) to any 
     individual, including members of the Armed Forces of the 
     United States, shall be subject, in like manner and to the 
     same extent as if the United States or the District of 
     Columbia were a private person, to withholding in accordance 
     with State law enacted pursuant to subsections (a)(1) and (b) 
     of section 466 and regulations of the Secretary under such 
     subsections, and to any other legal process brought, by a 
     State agency administering a program under a State plan 
     approved under this part or by an individual obligee, to 
     enforce the legal obligation of the individual to provide 
     child support or alimony.
       ``(b) Consent to Requirements Applicable to Private 
     Person.--With respect to notice to withhold income pursuant 
     to subsection (a)(1) or (b) of section 466, or any other 
     order or process to enforce support obligations against an 
     individual (if the order or process contains or is 
     accompanied by sufficient data to permit prompt 
     identification of the individual and the moneys involved), 
     each governmental entity specified in subsection (a) shall be 
     subject to the same requirements as would apply if the entity 
     were a private person, except as otherwise provided in this 
     section.
       ``(c) Designation of Agent; Response to Notice or Process--
       ``(1) Designation of agent.--The head of each agency 
     subject to this section shall--
       ``(A) designate an agent or agents to receive orders and 
     accept service of process in matters relating to child 
     support or alimony; and
       ``(B) annually publish in the Federal Register the 
     designation of the agent or agents, identified by title or 
     position, mailing address, and telephone number.
       ``(2) Response to notice or process.--If an agent 
     designated pursuant to paragraph (1) of this subsection 
     receives notice pursuant to State procedures in effect 
     pursuant to subsection (a)(1) or (b) of section 466, or is 
     effectively served with any order, process, or interrogatory, 
     with respect to an individual's child support or alimony 
     payment obligations, the agent shall--
       ``(A) as soon as possible (but not later than 15 days) 
     thereafter, send written notice of the notice or service 
     (together with a copy of the notice or service) to the 
     individual at the duty station or last-known home address of 
     the individual;
       ``(B) within 30 days (or such longer period as may be 
     prescribed by applicable State law) after receipt of a notice 
     pursuant to such State procedures, comply with all applicable 
     provisions of section 466; and
       ``(C) within 30 days (or such longer period as may be 
     prescribed by applicable State law) after effective service 
     of any other such order, process, or interrogatory, respond 
     to the order, process, or interrogatory.
       ``(d) Priority of Claims.--If a governmental entity 
     specified in subsection (a) receives notice or is served with 
     process, as provided in this section, concerning amounts owed 
     by an individual to more than 1 person--
       ``(1) support collection under section 466(b) must be given 
     priority over any other process, as provided in section 
     466(b)(7);
       ``(2) allocation of moneys due or payable to an individual 
     among claimants under section 466(b) shall be governed by 
     section 466(b) and the regulations prescribed under such 
     section; and
       ``(3) such moneys as remain after compliance with 
     paragraphs (1) and (2) shall be available to satisfy any 
     other such processes on a 1st-come, 1st-served basis, with 
     any such process being satisfied out of such moneys as remain 
     after the satisfaction of all such processes which have been 
     previously served.
       ``(e) No Requirement To Vary Pay Cycles.--A governmental 
     entity that is affected by legal process served for the 
     enforcement of an individual's child support or alimony 
     payment obligations shall not be required to vary its normal 
     pay and disbursement cycle in order to comply with the legal 
     process.
       ``(f) Relief From Liability.--
       ``(1) Neither the United States, nor the government of the 
     District of Columbia, nor any disbursing officer shall be 
     liable with respect to any payment made from moneys due or 
     payable from the United States to any individual pursuant to 
     legal process regular on its face, if the payment is made in 
     accordance with this section and the regulations issued to 
     carry out this section.
       ``(2) No Federal employee whose duties include taking 
     actions necessary to comply with the requirements of 
     subsection (a) with regard to any individual shall be subject 
     under any law to any disciplinary action or civil or criminal 
     liability or penalty for, or on account of, any disclosure of 
     information made by the employee in connection with the 
     carrying out of such actions.
       ``(g) Regulations.--Authority to promulgate regulations for 
     the implementation of this section shall, insofar as this 
     section applies to moneys due from (or payable by)--
       ``(1) the United States (other than the legislative or 
     judicial branches of the Federal Government) or the 
     government of the District of Columbia, be vested in the 
     President (or the designee of the President);
       ``(2) the legislative branch of the Federal Government, be 
     vested jointly in the President pro tempore of the Senate and 
     the Speaker of the House of Representatives (or their 
     designees), and
       ``(3) the judicial branch of the Federal Government, be 
     vested in the Chief Justice of the United States (or the 
     designee of the Chief Justice).
       ``(h) Moneys Subject To Process.--
       ``(1) In general.--Subject to paragraph (2), moneys paid or 
     payable to an individual which are considered to be based 
     upon remuneration for employment, for purposes of this 
     section--
       ``(A) consist of--
       ``(i) compensation paid or payable for personal services of 
     the individual, whether the compensation is denominated as 
     wages, salary, commission, bonus, pay, allowances, or 
     otherwise (including severance pay, sick pay, and incentive 
     pay);
       ``(ii) periodic benefits (including a periodic benefit as 
     defined in section 228(h)(3)) or other payments--

       ``(I) under the insurance system established by title II;
       ``(II) under any other system or fund established by the 
     United States which provides for the payment of pensions, 
     retirement or retired pay, annuities, dependents' or 
     survivors' benefits, or similar amounts payable on 

[[Page S11705]]
     account of personal services performed by the individual or any other 
     individual;
       ``(III) as compensation for death under any Federal 
     program;
       ``(IV) under any Federal program established to provide 
     `black lung' benefits; or
       ``(V) by the Secretary of Veterans Affairs as pension, or 
     as compensation for a service-connected disability or death 
     (except any compensation paid by the Secretary to a member of 
     the Armed Forces who is in receipt of retired or retainer pay 
     if the member has waived a portion of the retired pay of the 
     member in order to receive the compensation); and

       ``(iii) workers' compensation benefits paid under Federal 
     or State law; but
       ``(B) do not include any payment--
       ``(i) by way of reimbursement or otherwise, to defray 
     expenses incurred by the individual in carrying out duties 
     associated with the employment of the individual; or
       ``(ii) as allowances for members of the uniformed services 
     payable pursuant to chapter 7 of title 37, United States 
     Code, as prescribed by the Secretaries concerned (defined by 
     section 101(5) of such title) as necessary for the efficient 
     performance of duty.
       ``(2) Certain amounts excluded.--In determining the amount 
     of any moneys due from, or payable by, the United States to 
     any individual, there shall be excluded amounts which--
       ``(A) are owed by the individual to the United States;
       ``(B) are required by law to be, and are, deducted from the 
     remuneration or other payment involved, including Federal 
     employment taxes, and fines and forfeitures ordered by court-
     martial;
       ``(C) are properly withheld for Federal, State, or local 
     income tax purposes, if the withholding of the amounts is 
     authorized or required by law and if amounts withheld are not 
     greater than would be the case if the individual claimed all 
     dependents to which he was entitled (the withholding of 
     additional amounts pursuant to section 3402(i) of the 
     Internal Revenue Code of 1986 may be permitted only when the 
     individual presents evidence of a tax obligation which 
     supports the additional withholding);
       ``(D) are deducted as health insurance premiums;
       ``(E) are deducted as normal retirement contributions (not 
     including amounts deducted for supplementary coverage); or
       ``(F) are deducted as normal life insurance premiums from 
     salary or other remuneration for employment (not including 
     amounts deducted for supplementary coverage).
       ``(i) Definitions.--As used in this section:
       ``(1) United states.--The term `United States' includes any 
     department, agency, or instrumentality of the legislative, 
     judicial, or executive branch of the Federal Government, the 
     United States Postal Service, the Postal Rate Commission, any 
     Federal corporation created by an Act of Congress that is 
     wholly owned by the Federal Government, and the governments 
     of the territories and possessions of the United States.
       ``(2) Child support.--The term `child support', when used 
     in reference to the legal obligations of an individual to 
     provide such support, means periodic payments of funds for 
     the support and maintenance of a child or children with 
     respect to which the individual has such an obligation, and 
     (subject to and in accordance with State law) includes 
     payments to provide for health care, education, recreation, 
     clothing, or to meet other specific needs of such a child or 
     children, and includes attorney's fees, interest, and court 
     costs, when and to the extent that the same are expressly 
     made recoverable as such pursuant to a decree, order, or 
     judgment issued in accordance with applicable State law by a 
     court of competent jurisdiction.
       ``(3) Alimony.--The term `alimony', when used in reference 
     to the legal obligations of an individual to provide the 
     same, means periodic payments of funds for the support and 
     maintenance of the spouse (or former spouse) of the 
     individual, and (subject to and in accordance with State law) 
     includes separate maintenance, alimony pendente lite, 
     maintenance, and spousal support, and includes attorney's 
     fees, interest, and court costs when and to the extent that 
     the same are expressly made recoverable as such pursuant to a 
     decree, order, or judgment issued in accordance with 
     applicable State law by a court of competent jurisdiction. 
     Such term does not include any payment or transfer of 
     property or its value by an individual to the spouse or a 
     former spouse of the individual in compliance with any 
     community property settlement, equitable distribution of 
     property, or other division of property between spouses or 
     former spouses.
       ``(4) Private person.--The term `private person' means a 
     person who does not have sovereign or other special immunity 
     or privilege which causes the person not to be subject to 
     legal process.
       ``(5) Legal process.--The term `legal process' means any 
     writ, order, summons, or other similar process in the nature 
     of garnishment--
       ``(A) which is issued by--
       ``(i) a court of competent jurisdiction in any State, 
     territory, or possession of the United States;
       ``(ii) a court of competent jurisdiction in any foreign 
     country with which the United States has entered into an 
     agreement which requires the United States to honor the 
     process; or
       ``(iii) an authorized official pursuant to an order of such 
     a court of competent jurisdiction or pursuant to State or 
     local law; and
       ``(B) which is directed to, and the purpose of which is to 
     compel, a governmental entity which holds moneys which are 
     otherwise payable to an individual to make a payment from the 
     moneys to another party in order to satisfy a legal 
     obligation of the individual to provide child support or make 
     alimony payments.''.
       (b) Conforming Amendments.--
       (1) To part d of title iv.--Sections 461 and 462 (42 U.S.C. 
     661 and 662) are repealed.
       (2) To title 5, united states code.--Section 5520a of title 
     5, United States Code, is amended, in subsections (h)(2) and 
     (i), by striking ``sections 459, 461, and 462 of the Social 
     Security Act (42 U.S.C. 659, 661, and 662)'' and inserting 
     ``section 459 of the Social Security Act (42 U.S.C. 659)''.
       (c) Military Retired and Retainer Pay.--
       (1) Definition of court.--Section 1408(a)(1) of title 10, 
     United States Code, is amended--
       (A) by striking ``and'' at the end of subparagraph (B);
       (B) by striking the period at the end of subparagraph (C) 
     and inserting ``; and''; and
       (C) by adding after subparagraph (C) the following new 
     subparagraph:
       ``(D) any administrative or judicial tribunal of a State 
     competent to enter orders for support or maintenance 
     (including a State agency administering a program under a 
     State plan approved under part D of title IV of the Social 
     Security Act), and, for purposes of this subparagraph, the 
     term `State' includes the District of Columbia, the 
     Commonwealth of Puerto Rico, the Virgin Islands, Guam, and 
     American Samoa.''.
       (2) Definition of court order.--Section 1408(a)(2) of such 
     title is amended by inserting ``or a court order for the 
     payment of child support not included in or accompanied by 
     such a decree or settlement,'' before ``which--''.
       (3) Public payee.--Section 1408(d) of such title is 
     amended--
       (A) in the heading, by inserting ``(or for Benefit of)'' 
     before ``Spouse or''; and
       (B) in paragraph (1), in the 1st sentence, by inserting 
     ``(or for the benefit of such spouse or former spouse to a 
     State disbursement unit established pursuant to section 454B 
     of the Social Security Act or other public payee designated 
     by a State, in accordance with part D of title IV of the 
     Social Security Act, as directed by court order, or as 
     otherwise directed in accordance with such part D)'' before 
     ``in an amount sufficient''.
       (4) Relationship to part d of title iv.--Section 1408 of 
     such title is amended by adding at the end the following new 
     subsection:
       ``(j) Relationship to Other Laws.--In any case involving an 
     order providing for payment of child support (as defined in 
     section 459(i)(2) of the Social Security Act) by a member who 
     has never been married to the other parent of the child, the 
     provisions of this section shall not apply, and the case 
     shall be subject to the provisions of section 459 of such 
     Act.''.
       (d) Effective Date.--The amendments made by this section 
     shall become effective 6 months after the date of the 
     enactment of this Act.

     SEC. 963. ENFORCEMENT OF CHILD SUPPORT OBLIGATIONS OF MEMBERS 
                   OF THE ARMED FORCES.

       (a) Availability of Locator Information.--
       (1) Maintenance of address information.--The Secretary of 
     Defense shall establish a centralized personnel locator 
     service that includes the address of each member of the Armed 
     Forces under the jurisdiction of the Secretary. Upon request 
     of the Secretary of Transportation, addresses for members of 
     the Coast Guard shall be included in the centralized 
     personnel locator service.
       (2) Type of address.--
       (A) Residential address.--Except as provided in 
     subparagraph (B), the address for a member of the Armed 
     Forces shown in the locator service shall be the residential 
     address of that member.
       (B) Duty address.--The address for a member of the Armed 
     Forces shown in the locator service shall be the duty address 
     of that member in the case of a member--
       (i) who is permanently assigned overseas, to a vessel, or 
     to a routinely deployable unit; or
       (ii) with respect to whom the Secretary concerned makes a 
     determination that the member's residential address should 
     not be disclosed due to national security or safety concerns.
       (3) Updating of locator information.--Within 30 days after 
     a member listed in the locator service establishes a new 
     residential address (or a new duty address, in the case of a 
     member covered by paragraph (2)(B)), the Secretary concerned 
     shall update the locator service to indicate the new address 
     of the member.
       (4) Availability of information.--The Secretary of Defense 
     shall make information regarding the address of a member of 
     the Armed Forces listed in the locator service available, on 
     request, to the Federal Parent Locator Service established 
     under section 453 of the Social Security Act.
       (b) Facilitating Granting of Leave for Attendance at 
     Hearings.--
       (1) Regulations.--The Secretary of each military 
     department, and the Secretary of Transportation with respect 
     to the Coast Guard when it is not operating as a service in 
     the Navy, shall prescribe regulations to facilitate the 
     granting of leave to a member of the Armed Forces under the 
     jurisdiction of that Secretary in a case in which--

[[Page S11706]]

       (A) the leave is needed for the member to attend a hearing 
     described in paragraph (2);
       (B) the member is not serving in or with a unit deployed in 
     a contingency operation (as defined in section 101 of title 
     10, United States Code); and
       (C) the exigencies of military service (as determined by 
     the Secretary concerned) do not otherwise require that such 
     leave not be granted.
       (2) Covered hearings.--Paragraph (1) applies to a hearing 
     that is conducted by a court or pursuant to an administrative 
     process established under State law, in connection with a 
     civil action--
       (A) to determine whether a member of the Armed Forces is a 
     natural parent of a child; or
       (B) to determine an obligation of a member of the Armed 
     Forces to provide child support.
       (3) Definitions.--For purposes of this subsection:
       (A) The term ``court'' has the meaning given that term in 
     section 1408(a) of title 10, United States Code.
       (B) The term ``child support'' has the meaning given such 
     term in section 459(i) of the Social Security Act (42 U.S.C. 
     659(i)).
       (c) Payment of Military Retired Pay in Compliance With 
     Child Support Orders.--
       (1) Date of certification of court order.--Section 1408 of 
     title 10, United States Code, as amended by section 
     962(c)(4), is amended--
       (A) by redesignating subsections (i) and (j) as subsections 
     (j) and (k), respectively; and
       (B) by inserting after subsection (h) the following new 
     subsection:
       ``(i) Certification Date.--It is not necessary that the 
     date of a certification of the authenticity or completeness 
     of a copy of a court order for child support received by the 
     Secretary concerned for the purposes of this section be 
     recent in relation to the date of receipt by the 
     Secretary.''.
       (2) Payments consistent with assignments of rights to 
     states.--Section 1408(d)(1) of such title is amended by 
     inserting after the 1st sentence the following: ``In the case 
     of a spouse or former spouse who assigns to a State the 
     rights of the spouse or former spouse to receive support, the 
     Secretary concerned may make the child support payments 
     referred to in the preceding sentence to that State in 
     amounts consistent with that assignment of rights.''.
       (3) Arrearages owed by members of the uniformed services.--
     Section 1408(d) of such title is amended by adding at the end 
     the following new paragraph:
       ``(6) In the case of a court order for which effective 
     service is made on the Secretary concerned on or after the 
     date of the enactment of this paragraph and which provides 
     for payments from the disposable retired pay of a member to 
     satisfy the amount of child support set forth in the order, 
     the authority provided in paragraph (1) to make payments from 
     the disposable retired pay of a member to satisfy the amount 
     of child support set forth in a court order shall apply to 
     payment of any amount of child support arrearages set forth 
     in that order as well as to amounts of child support that 
     currently become due.''.
       (4) Payroll deductions.--The Secretary of Defense shall 
     begin payroll deductions within 30 days after receiving 
     notice of withholding, or for the 1st pay period that begins 
     after such 30-day period.

     SEC. 964. VOIDING OF FRAUDULENT TRANSFERS.

       Section 466 (42 U.S.C. 666), as amended by section 921, is 
     amended by adding at the end the following new subsection:
       ``(g) In order to satisfy section 454(20)(A), each State 
     must have in effect--
       ``(1)(A) the Uniform Fraudulent Conveyance Act of 1981;
       ``(B) the Uniform Fraudulent Transfer Act of 1984; or
       ``(C) another law, specifying indicia of fraud which create 
     a prima facie case that a debtor transferred income or 
     property to avoid payment to a child support creditor, which 
     the Secretary finds affords comparable rights to child 
     support creditors; and
       ``(2) procedures under which, in any case in which the 
     State knows of a transfer by a child support debtor with 
     respect to which such a prima facie case is established, the 
     State must--
       ``(A) seek to void such transfer; or
       ``(B) obtain a settlement in the best interests of the 
     child support creditor.''.

     SEC. 965. WORK REQUIREMENT FOR PERSONS OWING CHILD SUPPORT.

       Section 466(a) of the Social Security Act (42 U.S.C. 
     666(a)), as amended by sections 901(a), 915, 917(a), and 923, 
     is amended by adding at the end the following new paragraph:
       ``(16) Procedures requiring the State, in any case in which 
     an individual owes support with respect to a child receiving 
     services under this part, to seek a court order or 
     administrative order that requires the individual to--
       ``(A) pay such support in accordance with a plan approved 
     by the court; or
       ``(B) if the individual is not working and is not 
     incapacitated, participate in work activities (including, at 
     State option, work activities as defined in section 482) as 
     the court deems appropriate.''.

     SEC. 966. DEFINITION OF SUPPORT ORDER.

       Section 453 (42 U.S.C. 653) as amended by sections 916 and 
     945(b), is amended by adding at the end the following new 
     subsection:
       ``(o) As used in this part, the term `support order' means 
     a judgment, decree, or order, whether temporary, final, or 
     subject to modification, issued by a court or an 
     administrative agency of competent jurisdiction, for the 
     support and maintenance of a child, including a child who has 
     attained the age of majority under the law of the issuing 
     State, or a child and the parent with whom the child is 
     living, which provides for monetary support, health care, 
     arrearages, or reimbursement, and which may include related 
     costs and fees, interest and penalties, income withholding, 
     attorneys' fees, and other relief.''.

     SEC. 967. REPORTING ARREARAGES TO CREDIT BUREAUS.

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

     SEC. 968. LIENS.

       Section 466(a)(4) (42 U.S.C. 666(a)(4)) is amended to read 
     as follows:
       ``(4) Procedures under which--
       ``(A) liens arise by operation of law against real and 
     personal property for amounts of overdue support owed by an 
     absent parent who resides or owns property in the State; and
       ``(B) the State accords full faith and credit to liens 
     described in subparagraph (A) arising in another State, 
     without registration of the underlying order.''.
     SEC. 969. STATE LAW AUTHORIZING SUSPENSION OF LICENSES.

       Section 466(a) (42 U.S.C. 666(a)), as amended by sections 
     915, 917(a), and 923, is amended by adding at the end the 
     following new paragraph:
       ``(15) Procedures under which the State has (and uses in 
     appropriate cases) authority to withhold or suspend, or to 
     restrict the use of, driver's licenses, professional and 
     occupational licenses, and recreational licenses of 
     individuals owing overdue support or failing, after receiving 
     appropriate notice, to comply with subpoenas or warrants 
     relating to paternity or child support proceedings.''.

     SEC. 970. DENIAL OF PASSPORTS FOR NONPAYMENT OF CHILD 
                   SUPPORT.

       (a) HHS Certification Procedure.--
       (1) Secretarial responsibility.--Section 452 (42 U.S.C. 
     652), as amended by section 945, is amended by adding at the 
     end the following new subsection:
       ``(k)(1) If the Secretary receives a certification by a 
     State agency in accordance with the requirements of section 
     454(31) that an individual owes arrearages of child support 
     in an amount exceeding $5,000, the Secretary shall transmit 
     such certification to the Secretary of State for action (with 
     respect to denial, revocation, or limitation of passports) 
     pursuant to section 470(b) of the Work Opportunity Act of 
     1995.
       ``(2) The Secretary shall not be liable to an individual 
     for any action with respect to a certification by a State 
     agency under this section.''.
       (2) State cse agency responsibility.--Section 454 (42 
     U.S.C. 654), as amended by sections 901(b), 904(a), 912(b), 
     913(a), 933, and 943(a), is amended--
       (A) by striking ``and'' at the end of paragraph (29);
       (B) by striking the period at the end of paragraph (30) and 
     inserting ``; and''; and
       (C) by adding after paragraph (30) the following new 
     paragraph:
       ``(31) provide that the State agency will have in effect a 
     procedure (which may be combined with the procedure for tax 
     refund offset under section 464) for certifying to the 
     Secretary, for purposes of the procedure under section 452(k) 
     (concerning denial of passports), determinations that 
     individuals owe arrearages of child support in an amount 
     exceeding $5,000, under which procedure--
       ``(A) each individual concerned is afforded notice of such 
     determination and the consequences thereof, and an 
     opportunity to contest the determination; and
       ``(B) the certification by the State agency is furnished to 
     the Secretary in such format, and accompanied by such 
     supporting documentation, as the Secretary may require.''.
       (b) State Department Procedure for Denial of Passports.--
       (1) In general.--The Secretary of State shall, upon 
     certification by the Secretary of Health and Human Services 
     transmitted under section 452(k) of the Social Security Act, 
     refuse to issue a passport to such individual, and may 
     revoke, restrict, or limit a passport issued previously to 
     such individual.
       (2) Limit on liability.--The Secretary of State shall not 
     be liable to an individual for any action with respect to a 
     certification by a State agency under this section.
       (c) Effective Date.--This section and the amendments made 
     by this section shall become effective October 1, 1996.

[[Page S11707]]


     SEC. 971. INTERNATIONAL CHILD SUPPORT ENFORCEMENT.

       The Secretary of State is authorized to negotiate 
     reciprocal agreements with foreign nations on behalf of the 
     States, territories, and possessions of the United States 
     regarding the international enforcement of child support 
     obligations and designating the Department of Health and 
     Human Services as the central authority for such enforcement.
                      Subtitle H--Medical Support

     SEC. 975. TECHNICAL CORRECTION TO ERISA DEFINITION OF MEDICAL 
                   CHILD SUPPORT ORDER.

       (a) In General.--Section 609(a)(2)(B) of the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 
     1169(a)(2)(B)) is amended--
       (1) by striking ``issued by a court of competent 
     jurisdiction'';
       (2) by striking the period at the end of clause (ii) and 
     inserting a comma; and
       (3) by adding, after and below clause (ii), the following:

     ``if such judgment, decree, or order (I) is issued by a court 
     of competent jurisdiction or (II) is issued through an 
     administrative process established under State law and has 
     the force and effect of law under applicable State law.''.
       (b) Effective Date.--
       (1) In general.--The amendments made by this section shall 
     take effect on the date of the enactment of this Act.
       (2) Plan amendments not required until january 1, 1996.--
     Any amendment to a plan required to be made by an amendment 
     made by this section shall not be required to be made before 
     the 1st plan year beginning on or after January 1, 1996, if--
       (A) during the period after the date before the date of the 
     enactment of this Act and before such 1st plan year, the plan 
     is operated in accordance with the requirements of the 
     amendments made by this section; and
       (B) such plan amendment applies retroactively to the period 
     after the date before the date of the enactment of this Act 
     and before such 1st plan year.

     A plan shall not be treated as failing to be operated in 
     accordance with the provisions of the plan merely because it 
     operates in accordance with this paragraph.

     SEC. 976. ENFORCEMENT OF ORDERS FOR HEALTH CARE COVERAGE.

       Section 466(a) (42 U.S.C. 666(a)), as amended by sections 
     915, 917(a), 923, and 968, is amended by adding at the end 
     the following new paragraph:
       ``(16) Procedures under which all child support orders 
     enforced under this part shall include a provision for the 
     health care coverage of the child, and in the case in which 
     an absent parent provides such coverage and changes 
     employment, and the new employer provides health care 
     coverage, the State agency shall transfer notice of the 
     provision to the employer, which notice shall operate to 
     enroll the child in the absent parent's health plan, unless 
     the absent parent contests the notice.''.
Subtitle I--Enhancing Responsibility and Opportunity for Nonresidential 
                                Parents

     SEC. 981. GRANTS TO STATES FOR ACCESS AND VISITATION 
                   PROGRAMS.

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

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

       ``(a) In General.--The Administration for Children and 
     Families shall make grants under this section to enable 
     States to establish and administer programs to support and 
     facilitate absent parents' access to and visitation of their 
     children, by means of activities including mediation (both 
     voluntary and mandatory), counseling, education, development 
     of parenting plans, visitation enforcement (including 
     monitoring, supervision and neutral drop-off and pickup), and 
     development of guidelines for visitation and alternative 
     custody arrangements.
       ``(b) Amount of Grant.--The amount of the grant to be made 
     to a State under this section for a fiscal year shall be an 
     amount equal to the lesser of--
       ``(1) 90 percent of State expenditures during the fiscal 
     year for activities described in subsection (a); or
       ``(2) the allotment of the State under subsection (c) for 
     the fiscal year.
       ``(c) Allotments to States.--
       ``(1) In general.--The allotment of a State for a fiscal 
     year is the amount that bears the same ratio to the amount 
     appropriated for grants under this section for the fiscal 
     year as the number of children in the State living with only 
     1 biological parent bears to the total number of such 
     children in all States.
       ``(2) Minimum allotment.--The Administration for Children 
     and Families shall adjust allotments to States under 
     paragraph (1) as necessary to ensure that no State is 
     allotted less than--
       ``(A) $50,000 for fiscal year 1996 or 1997; or
       ``(B) $100,000 for any succeeding fiscal year.
       ``(d) No Supplantation of State Expenditures for Similar 
     Activities.--A State to which a grant is made under this 
     section may not use the grant to supplant expenditures by the 
     State for activities specified in subsection (a), but shall 
     use the grant to supplement such expenditures at a level at 
     least equal to the level of such expenditures for fiscal year 
     1995.
       ``(e) State Administration.--Each State to which a grant is 
     made under this section--
       ``(1) may administer State programs funded with the grant, 
     directly or through grants to or contracts with courts, local 
     public agencies, or nonprofit private entities;
       ``(2) shall not be required to operate such programs on a 
     statewide basis; and
       ``(3) shall monitor, evaluate, and report on such programs 
     in accordance with regulations prescribed by the 
     Secretary.''.
                    Subtitle J--Effect of Enactment

     SEC. 991. EFFECTIVE DATES.

       (a) In General.--Except as otherwise specifically provided 
     (but subject to subsections (b) and (c))--
       (1) the provisions of this title requiring the enactment or 
     amendment of State laws under section 466 of the Social 
     Security Act, or revision of State plans under section 454 of 
     such Act, shall be effective with respect to periods 
     beginning on and after October 1, 1996; and
       (2) all other provisions of this title shall become 
     effective upon the date of the enactment of this Act.
       (b) Grace Period for State Law Changes.--The provisions of 
     this title shall become effective with respect to a State on 
     the later of--
       (1) the date specified in this title, or
       (2) the effective date of laws enacted by the legislature 
     of such State implementing such provisions,

     but in no event later than the 1st day of the 1st calendar 
     quarter beginning after the close of the 1st regular session 
     of the State legislature that begins after the date of the 
     enactment of this Act. For purposes of the previous sentence, 
     in the case of a State that has a 2-year legislative session, 
     each year of such session shall be deemed to be a separate 
     regular session of the State legislature.
       (c) Grace Period for State Constitutional Amendment.--A 
     State shall not be found out of compliance with any 
     requirement enacted by this title if the State is unable to 
     so comply without amending the State constitution until the 
     earlier of--
       (1) 1 year after the effective date of the necessary State 
     constitutional amendment; or
       (2) 5 years after the date of the enactment of this title.
                   TITLE X--REFORM OF PUBLIC HOUSING

     SEC. 1001. CEILING RENTS.

       Section 3(a)(2) of the United States Housing Act of 1937 
     (42 U.S.C. 1437a(a)(2)) is amended to read as follows:
       ``(2) Establishment of ceiling rents.--
       ``(A) In general.--A public housing agency may provide that 
     each family residing in a public housing project shall pay 
     monthly rent in an amount established by such agency in 
     accordance with this paragraph.
       ``(B) Limitations on amount.--The rental amount established 
     under subparagraph (A)--
       ``(i) shall reflect the reasonable rental value of the 
     dwelling unit in which the family resides, as compared with 
     similar types and sizes of dwelling units in the market area 
     in which the public housing project is located;
       ``(ii) shall be greater than or equal to the monthly cost 
     to operate the housing (including any replacement reserves at 
     the discretion of the public housing agency); and
       ``(iii) shall not exceed the amount payable as rent by such 
     family under paragraph (1).''.

     SEC. 1002. DEFINITION OF ADJUSTED INCOME FOR PUBLIC HOUSING.

       (a) Definition of Adjusted Income.--Section 3(b)(5) of the 
     United States Housing Act of 1937 (42 U.S.C. 1437a(b)(5)) is 
     amended to read as follows:
       ``(5) The term `adjusted income' means the income that 
     remains after excluding--
       ``(A) $480 for each member of the family residing in the 
     household (other than the head of the household or spouse)--
       ``(i) who is under 18 years of age; or
       ``(ii) who is--

       ``(I) 18 years of age or older; and
       ``(II) a person with disabilities or a full-time student;

       ``(B) $400 for an elderly or disabled family;
       ``(C) the amount by which the aggregate of--
       ``(i) medical expenses for an elderly or disabled family; 
     and
       ``(ii) reasonable attendant care and auxiliary apparatus 
     expenses for each family member who is a person with 
     disabilities, to the extent necessary to enable any member of 
     the family (including a member who is a person with 
     disabilities) to be employed;

     exceeds 3 percent of the annual income of the family;
       ``(D) child care expenses, to the extent necessary to 
     enable another member of the family to be employed or to 
     further his or her education;
       ``(E) excessive travel expenses, not to exceed $25 per 
     family per week, for employment- or education-related travel, 
     except that this subparagraph shall apply only to a family 
     assisted by an Indian housing authority; and
       ``(F) subject to the requirements of subsection (e), for 
     public housing, adjustments to earned income established by 
     the public housing agency, not to exceed 20 percent of the 
     earned income of the family.''.
       (b) Adjustments to Definition of Earned Income.--Section 3 
     of the United States Housing Act of 1937 (42 U.S.C. 1437a) is 
     amended--
       (1) in the first undesignated paragraph immediately 
     following subsection (c)(3) (as added by section 515(b) of 
     the Cranston-Gonzalez National Affordable Housing Act), by 
     striking ``The earnings of'' and inserting the following:
       ``(d) Exclusion of Certain Earnings.--The earnings of''; 
     and

[[Page S11708]]

       (2) by adding at the end the following new subsection:
       ``(e) Adjustments to Earned Income.--If a public housing 
     agency establishes any adjustment to income pursuant to 
     subsection (b)(5)(F), the Secretary--
       ``(1) shall not take into account any reduction of the per 
     dwelling unit rental income of the public housing agency 
     resulting from that adjustment in calculating the 
     contributions under section 9 for the public housing agency 
     for the operation of the public housing; and
       ``(2) shall not reduce the level of operating subsidies 
     payable to the public housing agency due to an increase in 
     per dwelling unit rental income that results from a higher 
     level of income earned by any residents whose adjusted 
     incomes are calculated taking into account that adjustment to 
     income, until the public housing agency has recovered a sum 
     equal to the cumulative difference between--
       ``(A) the operating subsidies actually received by the 
     agency; and
       ``(B) the operating subsidies that the public housing 
     agency would have received if paragraph (1) was not 
     applied.''.
       (c) Report.--Not later than 3 years after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit a report to the Congress describing the 
     fiscal and societal impact of the amendment made by 
     subsection (b)(2).
       (d) Repeal of Certain Provisions.--
       (1) Maximum annual limitation on rent increases resulting 
     from employment.--Section 957 of the Cranston-Gonzalez 
     National Affordable Housing Act (42 U.S.C. 12714) is repealed 
     effective November 28, 1990.
       (2) Economic independence.--Section 923 of the Housing and 
     Community Development Act of 1992 (42 U.S.C. 12714 note) is 
     repealed effective October 28, 1992.

     SEC. 1003. FAILURE TO COMPLY WITH OTHER WELFARE AND PUBLIC 
                   ASSISTANCE PROGRAMS.

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

     ``SEC. 27. FAILURE TO COMPLY WITH OTHER WELFARE AND PUBLIC 
                   ASSISTANCE PROGRAMS.

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

     SEC. 1004. APPLICABILITY TO INDIAN HOUSING.

       (a) In General.--In accordance with section 201(b)(2) of 
     the United States Housing Act of 1937, the amendments made by 
     this title shall apply to public housing developed or 
     operated pursuant to a contract between the Secretary and an 
     Indian housing authority.
       (b) Definitions.--For purposes of this section--
       (1) the term ``Indian housing authority'' has the same 
     meaning as in section 3(b) of the United States Housing Act 
     of 1937;
       (2) the term ``public housing'' has the same meaning as in 
     section 3(b) of the United States Housing Act of 1937; and
       (3) the term ``Secretary'' means the Secretary of Housing 
     and Urban Development.

     SEC. 1005. IMPLEMENTATION.

       The Secretary shall issue such regulations as may be 
     necessary to carry out this title and the amendments made by 
     this title.

     SEC. 1006. EFFECTIVE DATE.

       This title and the amendments made by this title shall take 
     effect on the date of enactment of this Act.
     

                          ____________________