[Congressional Record Volume 142, Number 110 (Wednesday, July 24, 1996)]
[Senate]
[Pages S8672-S8736]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             WELFARE REFORM

 Mr. PELL. Mr. President, like so many of my colleagues, I 
would like to reform the Nation's welfare system. I believe that able-
bodied people should work and that our Nation's safety net should be 
just that: a safety net. But I cannot let my desire to vote for welfare 
reform cloud my judgment about the bill that the Senate passed 
yesterday. I have several major concerns about this bill:
  First, this bill eliminates welfare as an entitlement and replaces it 
with a block grant. To some, the term entitlement has come to mean an 
expectation that some people have of support from the Government with 
no effort on their part to achieve self-sufficiency. Defined in those 
terms, I agree that any sense of entitlement must end. But what the 
word entitlement actually means here is that this Nation will respond 
to anyone in great need--that we will not cut off people in need simply 
because there are too many people in line before them. A block grant is 
almost guaranteed to cut off people in need, with children suffering 
the greatest harm. And while I reluctantly voted last year for the then 
pending welfare bill, which included a block grant, I did so primarily 
to strengthen the Senate's position in conference against a far more 
damaging House-passed bill.
  Second, I believe that instead of giving people a hand up and out of 
the welfare system, we have limited their options and their 
opportunities further. For the most part, we have simply shifted this 
serious national problem to the States, and we have done so without 
providing them with adequate support to address the problem.
  Third, I am concerned about the bill's harsh treatment of legal 
immigrants. More often than not, these individuals are hard working, 
taxpaying individuals who deeply appreciate and value the freedom and 
opportunity of the United States. I cannot agree to deny them so many 
of the benefits that they might legitimately need as they build a life 
here.
  Finally, my deepest concern is for the children. No matter what the 
faults of the parent, we as a society must do all we can to protect and 
nurture the next generation. Otherwise, no matter how tough our welfare 
policy or how good our toughness makes us feel, we will raise a 
generation of children who are incapable of functioning in society, 
much less leading it. I simply cannot believe that eliminating an 
entitlement which ensures that all poor children get the food, 
clothing, and shelter that they need can move us individually or as a 
society down the path we all want to go.
  Mr. President, it is with real regret, then, that I cast a ``no'' 
vote on this welfare reform legislation. I know that the will of the 
people demands action, and I very much want to be part of an effort to 
pass a quality welfare reform bill. And I have joined with many of my 
Senate colleagues in voting for amendments that, had they been 
approved, might have made the bill acceptable. But looking at the final 
product, I cannot say that what we have adopted is better than what we 
now have. The risk to our children's future is too great. I will not 
punish a child to teach its parent, and I believe that this is what 
this legislation, in the end, will do.
  I regret that the Senate did not approve the work first proposal 
introduced by Senate Daschle. And I continue to support its emphasis on 
transitioning welfare recipients to work, its understanding that 
providing childcare is a linchpin of successful reform, and its premise 
that--despite very real abuses of the current system by some welfare 
recipients--most people want to get off welfare and work at a job that 
provides a living wage. In any effort to pass this kind of welfare 
reform legislation, I will cast a sure and solid ``yea'' vote.

[[Page S8673]]



 PERSONAL RESPONSIBILITY, WORK OPPORTUNITY, AND MEDICAID RESTRUCTURING 
                              ACT OF 1996

  The text of the bill (H.R. 3734) to provide for reconciliation 
pursuant to section 201(a)(1) of the concurrent resolution on the 
budget for fiscal year 1997, as passed by the Senate on July 23, 1996, 
is as follows:
       Resolved, That the bill from the House of Representatives 
     (H.R. 3734) entitled ``An Act to provide for reconciliation 
     pursuant to section 201(a)(1) of the concurrent resolution on 
     the budget for fiscal year 1997'', do pass with the following 
     amendment:
Strike out all after the enacting clause and insert:

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Personal Responsibility, 
     Work Opportunity, and Medicaid Restructuring Act of 1996''.
              TITLE I--AGRICULTURE AND RELATED PROVISIONS

     SEC. 1001. SHORT TITLE; TABLE OF CONTENTS.

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

              TITLE I--AGRICULTURE AND RELATED PROVISIONS

Sec. 1001. Short title; table of contents.

           Subtitle A--Food Stamps and Commodity Distribution

                     Chapter 1--Food Stamp Program

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

               Chapter 2--Commodity Distribution Programs

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

                  Subtitle B--Child Nutrition Programs

         Chapter 1--Amendments to the National School Lunch Act

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

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

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

                     CHAPTER 1--FOOD STAMP PROGRAM

     SEC. 1111. DEFINITION OF CERTIFICATION PERIOD.

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

     SEC. 1112. DEFINITION OF COUPON.

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

     SEC. 1113. TREATMENT OF CHILDREN LIVING AT HOME.

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

     SEC. 1114. ADJUSTMENT OF THRIFTY FOOD PLAN.

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

     SEC. 1115. DEFINITION OF HOMELESS INDIVIDUAL.

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

     SEC. 1116. STATE OPTION FOR ELIGIBILITY STANDARDS.

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

     SEC. 1117. EARNINGS OF STUDENTS.

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

     SEC. 1118. ENERGY ASSISTANCE.

       (a) In General.--Section 5(d) of the Food Stamp Act of 1977 
     (7 U.S.C. 2014(d)) is amended by striking paragraph (11) and 
     inserting the following: ``(11)(A) any payments or allowances 
     made for the purpose of providing energy assistance under any 
     Federal law, or (B) a 1-time payment or allowance made under 
     a Federal or State law for the costs of weatherization or 
     emergency repair or replacement of an unsafe or inoperative 
     furnace or other heating or cooling device,''.
       (b) Conforming Amendments.--Section 5(k) of the Food Stamp 
     Act of 1977 (7 U.S.C. 2014(k)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``plan for aid to 
     families with dependent children approved'' and inserting 
     ``program funded''; and
       (B) in subparagraph (B), by striking ``, not including 
     energy or utility-cost assistance,'';
       (2) in paragraph (2), by striking subparagraph (C) and 
     inserting the following:
       ``(C) a payment or allowance described in subsection 
     (d)(11);''; and

[[Page S8674]]

       (3) by adding at the end the following:
       ``(4) Third party energy assistance payments.--
       ``(A) Energy assistance payments.--For purposes of 
     subsection (d)(1), a payment made under a State law to 
     provide energy assistance to a household shall be considered 
     money payable directly to the household.
       ``(B) Energy assistance expenses.--For purposes of 
     subsection (e)(7), an expense paid on behalf of a household 
     under a State law to provide energy assistance shall be 
     considered an out-of-pocket expense incurred and paid by the 
     household.''.

     SEC. 1119. DEDUCTIONS FROM INCOME.

       (a) In General.--Section 5 of the Food Stamp Act of 1977 (7 
     U.S.C. 2014) is amended by striking subsection (e) and 
     inserting the following:
       ``(e) Deductions From Income.--
       ``(1) Standard deduction.--
       ``(A) In general.--The Secretary shall allow a standard 
     deduction for each household in the 48 contiguous States and 
     the District of Columbia, Alaska, Hawaii, Guam, and the 
     Virgin Islands of the United States of--
       ``(i) for the period beginning October 1, 1995, and ending 
     November 30, 1996, $134, $229, $189, $269, and $118, 
     respectively;
       ``(ii) for the period beginning December 1, 1996, and 
     ending September 30, 2001, $120, $206, $170, $242, and $106, 
     respectively;
       ``(iii) for the period beginning October 1, 2001, and 
     ending August 31, 2002, $113, $193, $159, $227, and $100, 
     respectively; and
       ``(iv) for the period beginning September 1, 2002, and 
     ending September 30, 2002, $120, $206, $170, $242, and $106, 
     respectively.
       ``(B) Adjustment for inflation.--On October 1, 2002, and 
     each October 1 thereafter, the Secretary shall adjust the 
     standard deduction to the nearest lower dollar increment to 
     reflect changes in the Consumer Price Index for all urban 
     consumers published by the Bureau of Labor Statistics, for 
     items other than food, for the 12-month period ending the 
     preceding June 30.
       ``(2) Earned income deduction.--
       ``(A) Definition of earned income.--In this paragraph, the 
     term `earned income' does not include--
       ``(i) income excluded by subsection (d); or
       ``(ii) any portion of income earned under a work 
     supplementation or support program, as defined under section 
     16(b), that is attributable to public assistance.
       ``(B) Deduction.--Except as provided in subparagraph (C), a 
     household with earned income shall be allowed a deduction of 
     20 percent of all earned income to compensate for taxes, 
     other mandatory deductions from salary, and work expenses.
       ``(C) Exception.--The deduction described in subparagraph 
     (B) shall not be allowed with respect to determining an 
     overissuance due to the failure of a household to report 
     earned income in a timely manner.
       ``(3) Dependent care deduction.--
       ``(A) In general.--A household shall be entitled, with 
     respect to expenses (other than excluded expenses described 
     in subparagraph (B)) for dependent care, to a dependent care 
     deduction, the maximum allowable level of which shall be $200 
     per month for each dependent child under 2 years of age and 
     $175 per month for each other dependent, for the actual cost 
     of payments necessary for the care of a dependent if the care 
     enables a household member to accept or continue employment, 
     or training or education that is preparatory for employment.
       ``(B) Excluded expenses.--The excluded expenses referred to 
     in subparagraph (A) are--
       ``(i) expenses paid on behalf of the household by a third 
     party;
       ``(ii) amounts made available and excluded, for the 
     expenses referred to in subparagraph (A), under subsection 
     (d)(3); and
       ``(iii) expenses that are paid under section 6(d)(4).
       ``(4) Deduction for child support payments.--
       ``(A) In general.--A household shall be entitled to a 
     deduction for child support payments made by a household 
     member to or for an individual who is not a member of the 
     household if the household member is legally obligated to 
     make the payments.
       ``(B) Methods for determining amount.--The Secretary may 
     prescribe by regulation the methods, including calculation on 
     a retrospective basis, that a State agency shall use to 
     determine the amount of the deduction for child support 
     payments.
       ``(5) Homeless shelter allowance.--Under rules prescribed 
     by the Secretary, a State agency may develop a standard 
     homeless shelter allowance, which shall not exceed $143 per 
     month, for such expenses as may reasonably be expected to be 
     incurred by households in which all members are homeless 
     individuals but are not receiving free shelter throughout the 
     month. A State agency that develops the allowance may use the 
     allowance in determining eligibility and allotments for the 
     households. The State agency may make a household with 
     extremely low shelter costs ineligible for the allowance.
       ``(6) Excess medical expense deduction.--
       ``(A) In general.--A household containing an elderly or 
     disabled member shall be entitled, with respect to expenses 
     other than expenses paid on behalf of the household by a 
     third party, to an excess medical expense deduction for the 
     portion of the actual costs of allowable medical expenses, 
     incurred by the elderly or disabled member, exclusive of 
     special diets, that exceeds $35 per month.
       ``(B) Method of claiming deduction.--
       ``(i) In general.--A State agency shall offer an eligible 
     household under subparagraph (A) a method of claiming a 
     deduction for recurring medical expenses that are initially 
     verified under the excess medical expense deduction in lieu 
     of submitting information on, or verification of, actual 
     expenses on a monthly basis.
       ``(ii) Method.--The method described in clause (i) shall--

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

       ``(7) Excess shelter expense deduction.--
       ``(A) In general.--A household shall be entitled, with 
     respect to expenses other than expenses paid on behalf of the 
     household by a third party, to an excess shelter expense 
     deduction to the extent that the monthly amount expended by a 
     household for shelter exceeds an amount equal to 50 percent 
     of monthly household income after all other applicable 
     deductions have been allowed.
       ``(B) Maximum amount of deduction.--
       ``(i) Through december 31, 1996.--In the case of a 
     household that does not contain an elderly or disabled 
     individual, during the 15-month period ending December 31, 
     1996, the excess shelter expense deduction shall not exceed--

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

       ``(i) After december 31, 1996.--In the case of a household 
     that does not contain an elderly or disabled individual, 
     after December 31, 1996, the excess shelter expense deduction 
     shall not exceed--

       ``(I) in the 48 contiguous States and the District of 
     Columbia, $342 per month; and
       ``(II) in Alaska, Hawaii, Guam, and the Virgin Islands of 
     the United States, $594, $489, $415, and $252 per month, 
     respectively.

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

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

       ``(iii) Mandatory allowance.--

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

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

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

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

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

       (b) Conforming Amendment.--Section 11(e)(3) of the Food 
     Stamp Act of 1977 (7 U.S.C.

[[Page S8675]]

     2020(e)(3)) is amended by striking ``. Under rules 
     prescribed'' and all that follows through ``verifies higher 
     expenses''.

     SEC. 1120. VEHICLE ALLOWANCE.

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

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

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

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

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

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

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

     SEC. 1124. DISQUALIFICATION OF CONVICTED INDIVIDUALS.

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

     SEC. 1125. DISQUALIFICATION.

       (a) In General.--Section 6(d) of the Food Stamp Act of 1977 
     (7 U.S.C. 2015(d)) is amended by striking ``(d)(1) Unless 
     otherwise exempted by the provisions'' and all that follows 
     through the end of paragraph (1) and inserting the following:
       ``(d) Conditions of Participation.--
       ``(1) Work requirements.--
       ``(A) In general.--No physically and mentally fit 
     individual over the age of 15 and under the age of 60 shall 
     be eligible to participate in the food stamp program if the 
     individual--
       ``(i) refuses, at the time of application and every 12 
     months thereafter, to register for employment in a manner 
     prescribed by the Secretary;
       ``(ii) refuses without good cause to participate in an 
     employment and training program established under paragraph 
     (4), to the extent required by the State agency;
       ``(iii) refuses without good cause to accept an offer of 
     employment, at a site or plant not subject to a strike or 
     lockout at the time of the refusal, at a wage not less than 
     the higher of--

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

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

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

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

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

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

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

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

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

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

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

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

       ``(II) Not less restrictive.--A State agency may not use a 
     meaning, procedure, or determination under subclause (I) that 
     is less restrictive on individuals receiving benefits under 
     this Act than a comparable meaning, procedure, or 
     determination under a State program funded under part A of 
     title IV of the Social Security Act (42 U.S.C. 601 et seq.).

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

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

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

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

       (b) Conforming Amendment.--
       (1) The second sentence of section 17(b)(2) of the Food 
     Stamp Act of 1977 (7 U.S.C. 2026(b)(2)) is amended by 
     striking ``6(d)(1)(i)'' and inserting ``6(d)(1)(A)(i)''.
       (2) Section 20 of the Food Stamp Act of 1977 (7 U.S.C. 
     2029) is amended by striking subsection (f) and inserting the 
     following:
       ``(f) Disqualification.--An individual or a household may 
     become ineligible under section 6(d)(1) to participate in the 
     food stamp program for failing to comply with this 
     section.''.

[[Page S8676]]

     SEC. 1126. EMPLOYMENT AND TRAINING.

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

     SEC. 1127. FOOD STAMP ELIGIBILITY.

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

     SEC. 1128. COMPARABLE TREATMENT FOR DISQUALIFICATION.

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

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

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

     SEC. 1130. DISQUALIFICATION OF FLEEING FELONS.

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

     SEC. 1131. COOPERATION WITH CHILD SUPPORT AGENCIES.

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

[[Page S8677]]

       ``(m) Noncustodial Parent's Cooperation With Child Support 
     Agencies.--
       ``(1) In general.--At the option of a State agency, subject 
     to paragraphs (2) and (3), a putative or identified 
     noncustodial parent of a child under the age of 18 (referred 
     to in this subsection as `the individual') shall not be 
     eligible to participate in the food stamp program if the 
     individual refuses to cooperate with the State agency 
     administering the program established under part D of title 
     IV of the Social Security Act (42 U.S.C. 651 et seq.)--
       ``(A) in establishing the paternity of the child (if the 
     child is born out of wedlock); and
       ``(B) in providing support for the child.
       ``(2) Refusal to cooperate.--
       ``(A) Guidelines.--The Secretary, in consultation with the 
     Secretary of Health and Human Services, shall develop 
     guidelines on what constitutes a refusal to cooperate under 
     paragraph (1).
       ``(B) Procedures.--The State agency shall develop 
     procedures, using guidelines developed under subparagraph 
     (A), for determining whether an individual is refusing to 
     cooperate under paragraph (1).
       ``(3) Fees.--Paragraph (1) shall not require the payment of 
     a fee or other cost for services provided under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.).
       ``(4) Privacy.--The State agency shall provide safeguards 
     to restrict the use of information collected by a State 
     agency administering the program established under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.) 
     to purposes for which the information is collected.''.

     SEC. 1132. DISQUALIFICATION RELATING TO CHILD SUPPORT 
                   ARREARS.

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

     SEC. 1133. WORK REQUIREMENT.

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

     SEC. 1134. ENCOURAGEMENT OF ELECTRONIC BENEFIT TRANSFER 
                   SYSTEMS.

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

[[Page S8678]]

       ``(B) Other authorized users.--If a State agency requires a 
     photograph on an electronic benefit card under subparagraph 
     (A), the State agency shall establish procedures to ensure 
     that any other appropriate member of the household or any 
     authorized representative of the household may utilize the 
     card.
       ``(10) Applicable law.--Disclosures, protections, 
     responsibilities, and remedies established by the Federal 
     Reserve Board under section 904 of the Electronic Fund 
     Transfer Act (15 U.S.C. 1693b) shall not apply to benefits 
     under this Act delivered through any electronic benefit 
     transfer system.''.
       (b) Sense of Congress.--It is the sense of Congress that a 
     State that operates an electronic benefit transfer system 
     under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) 
     should operate the system in a manner that is compatible with 
     electronic benefit transfer systems operated by other States.

     SEC. 1135. VALUE OF MINIMUM ALLOTMENT.

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

     SEC. 1136. BENEFITS ON RECERTIFICATION.

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

     SEC. 1137. OPTIONAL COMBINED ALLOTMENT FOR EXPEDITED 
                   HOUSEHOLDS.

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

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

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

     SEC. 1139. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN CENTERS.

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

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

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

     SEC. 1141. AUTHORITY TO ESTABLISH AUTHORIZATION PERIODS.

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

     SEC. 1142. INFORMATION FOR VERIFYING ELIGIBILITY FOR 
                   AUTHORIZATION.

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

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

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

     SEC. 1144. OPERATION OF FOOD STAMP OFFICES.

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

     SEC. 1145. STATE EMPLOYEE AND TRAINING STANDARDS.

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

[[Page S8679]]

       (4) by striking subparagraphs (C) through (E).

     SEC. 1146. EXCHANGE OF LAW ENFORCEMENT INFORMATION.

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

       ``(I) is fleeing to avoid prosecution, or custody or 
     confinement after conviction, for a crime (or attempt to 
     commit a crime) that, under the law of the place the member 
     is fleeing, is a felony (or, in the case of New Jersey, a 
     high misdemeanor), or is violating a condition of probation 
     or parole imposed under Federal or State law; or
       ``(II) has information that is necessary for the officer to 
     conduct an official duty related to subclause (I);

       ``(ii) locating or apprehending the member is an official 
     duty; and
       ``(iii) the request is being made in the proper exercise of 
     an official duty; and
       ``(E) the safeguards shall not prevent compliance with 
     paragraph (16);''.

     SEC. 1147. WITHDRAWING FAIR HEARING REQUESTS.

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

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

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

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

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

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

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

     SEC. 1151. COLLECTION OF OVERISSUANCES.

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

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

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

     SEC. 1153. EXPANDED CRIMINAL FORFEITURE FOR VIOLATIONS.

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

[[Page S8680]]

     SEC. 1154. LIMITATION ON FEDERAL MATCH.

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

     SEC. 1155. STANDARDS FOR ADMINISTRATION.

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

     SEC. 1156. WORK SUPPLEMENTATION OR SUPPORT PROGRAM.

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

     SEC. 1157. RESPONSE TO WAIVERS.

       Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
     2026(b)(1)), as amended by section 1159, is amended by adding 
     at the end the following:
       ``(D) Response to waivers.--
       ``(i) Response.--Not later than 60 days after the date of 
     receiving a request for a waiver under subparagraph (A), the 
     Secretary shall provide a response that--

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

       ``(ii) Failure to respond.--If the Secretary does not 
     provide a response in accordance with clause (i), the waiver 
     shall be considered approved, unless the approval is 
     specifically prohibited by this Act.
       ``(iii) Notice of denial.--On denial of a waiver request 
     under clause (i)(III), the Secretary shall provide a copy of 
     the waiver request and a description of the reasons for the 
     denial to the Committee on Agriculture of the House of 
     Representatives and the Committee on Agriculture, Nutrition, 
     and Forestry of the Senate.''.

     SEC. 1158. EMPLOYMENT INITIATIVES PROGRAM.

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

     SEC. 1159. REAUTHORIZATION.

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

     SEC. 1160. SIMPLIFIED FOOD STAMP PROGRAM.

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

     ``SEC. 26. SIMPLIFIED FOOD STAMP PROGRAM.

       ``(a) Definition of Federal Costs.--In this section, the 
     term `Federal costs' does not include any Federal costs 
     incurred under section 17.
       ``(b) Election.--Subject to subsection (d), a State may 
     elect to carry out a Simplified Food Stamp Program (referred 
     to in this section as a `Program'), statewide or in a 
     political subdivision of the State, in accordance with this 
     section.
       ``(c) Operation of Program.--If a State elects to carry out 
     a Program, within the State or a political subdivision of the 
     State--
       ``(1) only households in which all members receive 
     assistance under a State program funded under part A of title 
     IV of the Social Security Act (42 U.S.C. 601 et seq.) shall 
     receive benefits under the Program;
       ``(2) a household in which all members receive assistance 
     under a State program funded under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) shall 
     automatically be eligible to participate in the Program; and
       ``(3) subject to subsection (f), benefits under the Program 
     shall be determined under rules and procedures established by 
     the State under--
       ``(A) a State program funded under part A of title IV of 
     the Social Security Act (42 U.S.C. 601 et seq.);
       ``(B) the food stamp program (other than section 27); or
       ``(C) a combination of a State program funded under part A 
     of title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.) and the food stamp program (other than section 27).
       ``(d) Approval of Program.--
       ``(1) State plan.--A State agency may not operate a Program 
     unless the Secretary approves a State plan for the operation 
     of the Program under paragraph (2).

[[Page S8681]]

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

               CHAPTER 2--COMMODITY DISTRIBUTION PROGRAMS

     SEC. 1171. EMERGENCY FOOD ASSISTANCE PROGRAM.

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

     ``SEC. 201A. DEFINITIONS.

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

     ``SEC. 202A. STATE PLAN.

       ``(a) In General.--To receive commodities under this Act, a 
     State shall submit a plan of operation and administration 
     every 4 years to the Secretary for approval. The plan may be 
     amended at any time, with the approval of the Secretary.
       ``(b) Requirements.--Each plan shall--
       ``(1) designate the State agency responsible for 
     distributing the commodities received under this Act;
       ``(2) set forth a plan of operation and administration to 
     expeditiously distribute commodities under this Act;
       ``(3) set forth the standards of eligibility for recipient 
     agencies; and
       ``(4) set forth the standards of eligibility for individual 
     or household recipients of commodities, which shall require--
       ``(A) individuals or households to be comprised of needy 
     persons; and
       ``(B) individual or household members to be residing in the 
     geographic location served by the distributing agency at the 
     time of applying for assistance.
       ``(c) State Advisory Board.--The Secretary shall encourage 
     each State receiving commodities under this Act to establish 
     a State advisory board consisting of representatives of all 
     entities in the State, both public and private, interested in 
     the distribution of commodities received under this Act.''.
       (c) Authorization of Appropriations for Administrative 
     Funds.--Section 204(a)(1) of

[[Page S8682]]

     the Emergency Food Assistance Act of 1983 (Public Law 98-8; 7 
     U.S.C. 612c note) is amended--
       (1) in the first sentence, by striking ``for State and 
     local'' and all that follows through ``under this title'' and 
     inserting ``to pay for the direct and indirect administrative 
     costs of the States related to the processing, transporting, 
     and distributing to eligible recipient agencies of 
     commodities provided by the Secretary under this Act and 
     commodities secured from other sources''; and
       (2) by striking the fourth sentence.
       (d) Delivery of Commodities.--Section 214 of the Emergency 
     Food Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c 
     note) is amended--
       (1) by striking subsections (a) through (e) and (j);
       (2) by redesignating subsections (f) through (i) as 
     subsections (a) through (d), respectively;
       (3) in subsection (b), as redesignated by paragraph (2)--
       (A) in the first sentence, by striking ``subsection (f) or 
     subsection (j) if applicable,'' and inserting ``subsection 
     (a),''; and
       (B) in the second sentence, by striking ``subsection (f)'' 
     and inserting ``subsection (a)'';
       (4) by striking subsection (c), as redesignated by 
     paragraph (2), and inserting the following:
       ``(c) Administration.--
       ``(1) In general.--Commodities made available for each 
     fiscal year under this section shall be delivered at 
     reasonable intervals to States based on the grants calculated 
     under subsection (a), or reallocated under subsection (b), 
     before December 31 of the following fiscal year.
       ``(2) Entitlement.--Each State shall be entitled to receive 
     the value of additional commodities determined under 
     subsection (a).''; and
       (5) in subsection (d), as redesignated by paragraph (2), by 
     striking ``or reduce'' and all that follows through ``each 
     fiscal year''.
       (e) Technical Amendments.--The Emergency Food Assistance 
     Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is 
     amended--
       (1) in the first sentence of section 203B(a), by striking 
     ``203 and 203A of this Act'' and inserting ``203A'';
       (2) in section 204(a), by striking ``title'' each place it 
     appears and inserting ``Act'';
       (3) in the first sentence of section 210(e), by striking 
     ``(except as otherwise provided for in section 214(j))''; and
       (4) by striking section 212.
       (f) Report on EFAP.--Section 1571 of the Food Security Act 
     of 1985 (Public Law 99-198; 7 U.S.C. 612c note) is repealed.
       (g) Availability of Commodities Under the Food Stamp 
     Program.--The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), 
     as amended by section 1164(a), is amended by adding at the 
     end the following:

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

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

     SEC. 1172. FOOD BANK DEMONSTRATION PROJECT.

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

     SEC. 1173. HUNGER PREVENTION PROGRAMS.

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

     SEC. 1174. REPORT ON ENTITLEMENT COMMODITY PROCESSING.

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

         CHAPTER 1--AMENDMENTS TO THE NATIONAL SCHOOL LUNCH ACT

     SEC. 1201. STATE DISBURSEMENT TO SCHOOLS.

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

     SEC. 1202. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

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

     SEC. 1203. FREE AND REDUCED PRICE POLICY STATEMENT.

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

[[Page S8683]]

     cause for requiring the school food authority to submit a 
     policy statement.''.

     SEC. 1204. SPECIAL ASSISTANCE.

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

     SEC. 1205. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

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

     SEC. 1206. COMMODITY DISTRIBUTION.

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

     SEC. 1207. CHILD AND ADULT CARE FOOD PROGRAM.

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

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

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

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

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

       ``(I) In general.--

       ``(aa) Factors.--Except as provided in subclause (II), with 
     respect to meals or supplements served under this clause by a 
     family or group day care home that does not meet the criteria 
     set forth in clause (ii)(I), the reimbursement factors shall 
     be $1 for lunches and suppers, 30 cents for breakfasts, and 
     15 cents for supplements.
       ``(bb) Adjustments.--The factors shall be adjusted on July 
     1, 1997, and each July 1 thereafter, to reflect changes in 
     the Consumer Price Index for food at home for the most recent 
     12-month period for which the data are available. The 
     reimbursement factors under this item shall be rounded down 
     to the nearest lower cent increment

[[Page S8684]]

     and based on the unrounded adjustment for the preceding 12-
     month period.
       ``(cc) Reimbursement.--A family or group day care home 
     shall be provided reimbursement factors under this subclause 
     without a requirement for documentation of the costs 
     described in clause (i), except that reimbursement shall not 
     be provided under this subclause for meals or supplements 
     served to the children of a person acting as a family or 
     group day care home provider unless the children meet the 
     income eligibility guidelines for free or reduced price meals 
     under section 9.

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

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

       ``(III) Information and determinations.--

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

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

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

       ``(V) Minimum verification requirements.--The Secretary may 
     establish any minimum verification requirements that are 
     necessary to carry out this clause.''.

       (2) Grants to states to provide assistance to family or 
     group day care homes.--Section 17(f)(3) of the National 
     School Lunch Act (42 U.S.C. 1766(f)(3)) is amended by adding 
     at the end the following:
       ``(D) Grants to states to provide assistance to family or 
     group day care homes.--
       ``(i) In general.--

       ``(I) Reservation.--From amounts made available to carry 
     out this section, the Secretary shall reserve $5,000,000 of 
     the amount made available for fiscal year 1997.
       ``(II) Purpose.--The Secretary shall use the funds made 
     available under subclause (I) to provide grants to States for 
     the purpose of providing--

       ``(aa) assistance, including grants, to family and day care 
     home sponsoring organizations and other appropriate 
     organizations, in securing and providing training, materials, 
     automated data processing assistance, and other assistance 
     for the staff of the sponsoring organizations; and
       ``(bb) training and other assistance to family and group 
     day care homes in the implementation of the amendment to 
     subparagraph (A) made by section 1208(e)(1) of the 
     Agricultural Reconciliation Act of 1996.
       ``(ii) Allocation.--The Secretary shall allocate from the 
     funds reserved under clause (i)(I)--

       ``(I) $30,000 in base funding to each State; and
       ``(II) any remaining amount among the States, based on the 
     number of family day care homes participating in the program 
     in a State during fiscal year 1995 as a percentage of the 
     number of all family day care homes participating in the 
     program during fiscal year 1995.

       ``(iii) Retention of funds.--Of the amount of funds made 
     available to a State for fiscal year 1997 under clause (i), 
     the State may retain not to exceed 30 percent of the amount 
     to carry out this subparagraph.
       ``(iv) Additional payments.--Any payments received under 
     this subparagraph shall be in addition to payments that a 
     State receives under subparagraph (A).''.
       (3) Provision of data.--Section 17(f)(3) of the National 
     School Lunch Act (42 U.S.C. 1766(f)(3)), as amended by 
     paragraph (2), is amended by adding at the end the following:
       ``(E) Provision of data to family or group day care home 
     sponsoring organizations.--
       ``(i) Census data.--The Secretary shall provide to each 
     State agency administering a child and adult care food 
     program under this section data from the most recent 
     decennial census survey or other appropriate census survey 
     for which the data are available showing which areas in the 
     State meet the requirements of subparagraph (A)(ii)(I)(aa). 
     The State agency shall provide the data to family or group 
     day care home sponsoring organizations located in the State.
       ``(ii) School data.--

       ``(I) In general.--A State agency administering the school 
     lunch program under this Act or the school breakfast program 
     under the Child Nutrition Act of 1966 (42 U.S.C. 1771 et 
     seq.) shall provide to approved family or group day care home 
     sponsoring organizations a list of schools serving elementary 
     school children in the State in which not less than \1/2\ of 
     the children enrolled are certified to receive free or 
     reduced price meals. The State agency shall collect the data 
     necessary to create the list annually and provide the list on 
     a timely basis to any approved family or group day care home 
     sponsoring organization that requests the list.
       ``(II) Use of data from preceding school year.--In 
     determining for a fiscal year or other annual period whether 
     a home qualifies as a tier I family or group day care home 
     under subparagraph (A)(ii)(I), the State agency administering 
     the program under this section, and a family or group day 
     care home sponsoring organization, shall use the most current 
     available data at the time of the determination.

       ``(iii) Duration of determination.--For purposes of this 
     section, a determination that a family or group day care home 
     is located in an area that qualifies the home as a tier I 
     family or group day care home (as the term is defined in 
     subparagraph (A)(ii)(I)), shall be in effect for 3 years 
     (unless the determination is made on the basis of census 
     data, in which case the determination shall remain in effect 
     until more recent census data are available) unless the State 
     agency determines that the area in which the home is located 
     no longer qualifies the home as a tier I family or group day 
     care home.''.
       (4) Conforming amendments.--Section 17(c) of the National 
     School Lunch Act (42 U.S.C. 1766(c)) is amended by inserting 
     ``except as provided in subsection (f)(3),'' after ``For 
     purposes of this section,'' each place it appears in 
     paragraphs (1), (2), and (3).
       (f) Reimbursement.--Section 17(f) of the National School 
     Lunch Act (42 U.S.C. 1766(f)) is amended--
       (1) in paragraph (3)--
       (A) in subparagraph (B), by striking the third and fourth 
     sentences; and
       (B) in subparagraph (C)(ii), by striking ``conduct 
     outreach'' and all that follows through ``may become'' and 
     inserting ``assist unlicensed family or group day care homes 
     in becoming''; and
       (2) in the first sentence of paragraph (4), by striking 
     ``shall'' and inserting ``may''.
       (g) Nutritional Requirements.--Section 17(g)(1) of the 
     National School Lunch Act (42 U.S.C. 1766(g)(1)) is amended--
       (1) in subparagraph (A), by striking the second sentence; 
     and
       (2) in subparagraph (B), by striking the second sentence.
       (h) Elimination of State Paperwork and Outreach Burden.--
     Section 17 of the National School Lunch Act (42 U.S.C. 1766) 
     is amended by striking subsection (k) and inserting the 
     following:
       ``(k) Training and Technical Assistance.--A State 
     participating in the program established under this section 
     shall provide sufficient training, technical assistance, and 
     monitoring to facilitate effective operation of the program. 
     The Secretary shall assist the State in developing plans to 
     fulfill the requirements of this subsection.''.
       (i) Records.--The second sentence of section 17(m) of the 
     National School Lunch Act (42 U.S.C. 1766(m)) is amended by 
     striking ``at all times'' and inserting ``at any reasonable 
     time''.
       (j) Information for Parents.--Section 17 of the National 
     School Lunch Act (42 U.S.C.

[[Page S8685]]

     1766) is amended by striking subsection (q) and inserting the 
     following:
       ``(q) Information for Parents.--The State agency shall 
     ensure that, at least once a year, child care institutions 
     provide written information to parents that includes--
       ``(1) basic information on the benefits of the special 
     supplemental nutrition program for women, infants, and 
     children authorized under section 17 of the Child Nutrition 
     Act of 1966 (42 U.S.C. 1786);
       ``(2) information on the maximum income limits, according 
     to family size, applicable to the program; and
       ``(3) information on where parents may apply to participate 
     in the program.''.
       (k) Effective Date.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall become effective on the 
     date of enactment of this Act.
       (2) Improved targeting of day care home reimbursements.--
     The amendments made by paragraphs (1) and (4) of subsection 
     (e) shall become effective on July 1, 1997.
       (3) Regulations.--
       (A) Interim regulations.--Not later than January 1, 1997, 
     the Secretary of Agriculture shall issue interim regulations 
     to implement--
       (i) the amendments made by paragraphs (1), (3), and (4) of 
     subsection (e); and
       (ii) section 17(f)(3)(C) of the National School Lunch Act 
     (42 U.S.C. 1766(f)(3)(C)).
       (B) Final regulations.--Not later than July 1, 1997, the 
     Secretary of Agriculture shall issue final regulations to 
     implement the provisions of law referred to in subparagraph 
     (A).
       (l) Study of Impact of Amendments on Program Participation 
     and Family Day Care Licensing.--
       (1) In general.--The Secretary of Agriculture, in 
     conjunction with the Secretary of Health and Human Services, 
     shall study the impact of the amendments made by this section 
     on--
       (A) the number of family day care homes participating in 
     the child and adult care food program established under 
     section 17 of the National School Lunch Act (42 U.S.C. 1766);
       (B) the number of day care home sponsoring organizations 
     participating in the program;
       (C) the number of day care homes that are licensed, 
     certified, registered, or approved by each State in 
     accordance with regulations issued by the Secretary;
       (D) the rate of growth of the numbers referred to in 
     subparagraphs (A) through (C);
       (E) the nutritional adequacy and quality of meals served in 
     family day care homes that--
       (i) received reimbursement under the program prior to the 
     amendments made by this section but do not receive 
     reimbursement after the amendments made by this section; or
       (ii) received full reimbursement under the program prior to 
     the amendments made by this section but do not receive full 
     reimbursement after the amendments made by this section; and
       (F) the proportion of low-income children participating in 
     the program prior to the amendments made by this section and 
     the proportion of low-income children participating in the 
     program after the amendments made by this section.
       (2) Required data.--Each State agency participating in the 
     child and adult care food program under section 17 of the 
     National School Lunch Act (42 U.S.C. 1766) shall submit to 
     the Secretary of Agriculture data on--
       (A) the number of family day care homes participating in 
     the program on June 30, 1997, and June 30, 1998;
       (B) the number of family day care homes licensed, 
     certified, registered, or approved for service on June 30, 
     1997, and June 30, 1998; and
       (C) such other data as the Secretary may require to carry 
     out this subsection.
       (3) Submission of report.--Not later than 2 years after the 
     date of enactment of this section, the Secretary of 
     Agriculture shall submit the study required under this 
     subsection to the Committee on Economic and Educational 
     Opportunities of the House of Representatives and the 
     Committee on Agriculture, Nutrition, and Forestry of the 
     Senate.

     SEC. 1208. PILOT PROJECTS.

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

     SEC. 1209. REDUCTION OF PAPERWORK.

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

     SEC. 1210. INFORMATION ON INCOME ELIGIBILITY.

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

     SEC. 1211. NUTRITION GUIDANCE FOR CHILD NUTRITION PROGRAMS.

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

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

     SEC. 1251. SPECIAL MILK PROGRAM.

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

     SEC. 1252. FREE AND REDUCED PRICE POLICY STATEMENT.

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

     SEC. 1253. SCHOOL BREAKFAST PROGRAM AUTHORIZATION.

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

     SEC. 1254. STATE ADMINISTRATIVE EXPENSES.

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

     SEC. 1255. REGULATIONS.

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

     SEC. 1256. PROHIBITIONS.

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

     SEC. 1257. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

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

     SEC. 1258. ACCOUNTS AND RECORDS.

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

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

       (a) Definitions.--Section 17(b) of the Child Nutrition Act 
     of 1966 (42 U.S.C. 1786(b)) is amended--
       (1) in paragraph (15)(B)(iii), by inserting ``of not more 
     than 365 days'' after ``accommodation''; and
       (2) in paragraph (16)--
       (A) in subparagraph (A), by adding ``and'' at the end; and
       (B) in subparagraph (B), by striking ``; and'' and 
     inserting a period; and
       (C) by striking subparagraph (C).
       (b) Secretary's Promotion of WIC.--Section 17(c) of the 
     Child Nutrition Act of 1966 (42 U.S.C. 1786(c)) is amended by 
     striking paragraph (5).
       (c) Eligible Participants.--Section 17(d) of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1786(d)) is amended by 
     striking paragraph (4).
       (d) State Plan.--Section 17(f) of the Child Nutrition Act 
     of 1966 (42 U.S.C. 1786(f)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) by striking ``annually to the Secretary, by a date 
     specified by the Secretary, a'' and

[[Page S8686]]

     inserting ``to the Secretary, by a date specified by the 
     Secretary, an initial''; and
       (ii) by adding at the end the following: ``After submitting 
     the initial plan, a State shall be required to submit to the 
     Secretary for approval only a substantive change in the 
     plan.'';
       (B) in subparagraph (C)--
       (i) by striking clause (iii) and inserting the following:
       ``(iii) a plan to coordinate operations under the program 
     with other services or programs that may benefit participants 
     in, and applicants for, the program;'';
       (ii) in clause (vi), by inserting after ``in the State'' 
     the following: ``(including a plan to improve access to the 
     program for participants and prospective applicants who are 
     employed, or who reside, in rural areas)'';
       (iii) in clause (vii), by striking ``to provide program 
     benefits'' and all that follows through ``emphasis on'' and 
     inserting ``for'';
       (iv) by striking clauses (ix), (x), and (xii);
       (v) in clause (xiii), by striking ``may require'' and 
     inserting ``may reasonably require'';
       (vi) by redesignating clauses (xi) and (xiii), as so 
     amended, as clauses (ix) and (x), respectively; and
       (vii) in clause (ix), as so redesignated, by adding ``and'' 
     at the end;
       (C) by striking subparagraph (D); and
       (D) by redesignating subparagraph (E) as subparagraph (D);
       (2) in the second sentence of paragraph (5), by striking 
     ``at all times be available'' and inserting ``be available at 
     any reasonable time'';
       (3) in paragraph (9)(B), by striking the second sentence;
       (4) in the first sentence of paragraph (11), by striking 
     ``, including standar5s that will ensure sufficient State 
     agency staff'';
       (5) in paragraph (12), by striking the third sentence;
       (6) in paragraph (17), by striking ``and to accommodate'' 
     and all that follows through ``facilities'';
       (7) in paragraph (19), by striking ``shall'' and inserting 
     ``may''; and
       (8) by redesignating paragraphs (3), (4), (5), (7), (9) 
     through (21), (23), and (24) as paragraphs (2), (3), (4), 
     (5), (6) through (18), (19), and (20), respectively.
       (e) Information.--Section 17(g) of the Child Nutrition Act 
     of 1966 (42 U.S.C. 1786(g)) is amended--
       (1) in paragraph (5), by striking ``the report required 
     under subsection (d)(4)'' and inserting ``reports on program 
     participant characteristics''; and
       (2) by striking paragraph (6).
       (f) Procurement of Infant Formula.--
       (1) In general.--Section 17(h) of the Child Nutrition Act 
     of 1966 (42 U.S.C. 1786(h)) is amended--
       (A) in paragraph (4)(E), by striking ``and, on'' and all 
     that follows through ``(d)(4)'';
       (B) in paragraph (8)--
       (i) by striking subparagraphs (A), (C), and (M);
       (ii) in subparagraph (G)--

       (I) in clause (i), by striking ``(i)''; and
       (II) by striking clauses (ii) through (ix);

       (iii) in subparagraph (I), by striking ``Secretary--'' and 
     all that follows through ``(v) may'' and inserting 
     ``Secretary may'';
       (iv) by redesignating subparagraphs (B) and (D) through (L) 
     as subparagraphs (A) and (B) through (J), respectively;
       (v) in subparagraph (A)(i), as so redesignated, by striking 
     ``subparagraphs (C), (D), and (E)(iii), in carrying out 
     subparagraph (A),'' and inserting ``subparagraphs (B) and 
     (C)(iii),'';
       (vi) in subparagraph (B)(i), as so redesignated, by 
     striking ``subparagraph (B)'' each place it appears and 
     inserting ``subparagraph (A)''; and
       (vii) in subparagraph (C)(iii), as so redesignated, by 
     striking ``subparagraph (B)'' and inserting ``subparagraph 
     (A)''; and
       (2) Application.--The amendments made by paragraph (1) 
     shall not apply to a contract for the procurement of infant 
     formula under section 17(h)(8) of the Child Nutrition Act of 
     1966 (42 U.S.C. 1786(h)(8)) that is in effect on the date of 
     enactment of this subsection.
       (g) National Advisory Council on Maternal, Infant, and 
     Fetal Nutrition.--Section 17(k)(3) of the Child Nutrition Act 
     of 1966 (42 U.S.C. 1786(k)(3)) is amended by striking 
     ``Secretary shall designate'' and inserting ``Council shall 
     elect''.
       (h) Completed Study; Community College Demonstration; 
     Grants for Information and Data System.--Section 17 of the 
     Child Nutrition Act of 1966 (42 U.S.C. 1786) is amended by 
     striking subsections (n), (o), and (p).
       (i) Disqualification of Vendors Who Are Disqualified Under 
     the Food Stamp Program.--Section 17 of the Child Nutrition 
     Act of 1966 (42 U.S.C. 1786), as amended by subsection (i), 
     is amended by adding at the end the following:
       ``(n) Disqualification of Vendors Who Are Disqualified 
     Under the Food Stamp Program.--
       ``(1) In general.--The Secretary shall issue regulations 
     providing criteria for the disqualification under this 
     section of an approved vendor that is disqualified from 
     accepting benefits under the food stamp program established 
     under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.).
       ``(2) Terms.--A disqualification under paragraph (1)--
       ``(A) shall be for the same period as the disqualification 
     from the program referred to in paragraph (1);
       ``(B) may begin at a later date than the disqualification 
     from the program referred to in paragraph (1); and
       ``(C) shall not be subject to judicial or administrative 
     review.''.

     SEC. 1260. CASH GRANTS FOR NUTRITION EDUCATION.

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

     SEC. 1261. NUTRITION EDUCATION AND TRAINING.

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

     SEC. 1262. ROUNDING RULES.

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

[[Page S8687]]

                     TITLE II--COMMITTEE ON FINANCE
                       Subtitle A--Welfare Reform

     SEC. 2001. SHORT TITLE OF SUBTITLE.

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

     SEC. 2002. TABLE OF CONTENTS OF SUBTITLE.

       The table of contents for this subtitle is as follows:

                     TITLE II--COMMITTEE ON FINANCE

                       Subtitle A--Welfare Reform

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

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

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

                Chapter 2--Supplemental Security Income

Sec. 2200. Reference to Social Security Act.


                  SUBCHAPTER A--ELIGIBILITY RESTRICTIONS

Sec. 2201. Denial of SSI benefits for 10 years to individuals found to 
              have fraudulently misrepresented residence in order to 
              obtain benefits simultaneously in 2 or more States.
Sec. 2202. Denial of SSI benefits for fugitive felons and probation and 
              parole violators.
Sec. 2203. Treatment of prisoners.
Sec. 2204. Effective date of application for benefits.


               SUBCHAPTER B--BENEFITS FOR DISABLED CHILDREN

Sec. 2211. Definition and eligibility rules.
Sec. 2212. Eligibility redeterminations and continuing disability 
              reviews.
Sec. 2213. Additional accountability requirements.
Sec. 2214. Reduction in cash benefits payable to institutionalized 
              individuals whose medical costs are covered by private 
              insurance.
Sec. 2215. Regulations.


              SUBCHAPTER C--ADDITIONAL ENFORCEMENT PROVISION

Sec. 2221. Installment payment of large past-due supplemental security 
              income benefits.
Sec. 2222. Regulations.


   SUBCHAPTER D--STUDIES REGARDING SUPPLEMENTAL SECURITY INCOME PROGRAM

Sec. 2231. Annual report on the supplemental security income program.
Sec. 2232. Study by General Accounting Office.

                        Chapter 3--Child Support

Sec. 2300. Reference to Social Security Act.


     SUBCHAPTER A--ELIGIBILITY FOR SERVICES; DISTRIBUTION OF PAYMENTS

Sec. 2301. State obligation to provide child support enforcement 
              services.
Sec. 2302. Distribution of child support collections.
Sec. 2303. Privacy safeguards.
Sec. 2304. Rights to notification of hearings.


                  SUBCHAPTER B--LOCATE AND CASE TRACKING

Sec. 2311. State case registry.
Sec. 2312. Collection and disbursement of support payments.
Sec. 2313. State directory of new hires.
Sec. 2314. Amendments concerning income withholding.
Sec. 2315. Locator information from interstate networks.
Sec. 2316. Expansion of the Federal Parent Locator Service.
Sec. 2317. Collection and use of social security numbers for use in 
              child support enforcement.


         SUBCHAPTER C--STREAMLINING AND UNIFORMITY OF PROCEDURES

Sec. 2321. Adoption of uniform State laws.
Sec. 2322. Improvements to full faith and credit for child support 
              orders.
Sec. 2323. Administrative enforcement in interstate cases.
Sec. 2324. Use of forms in interstate enforcement.
Sec. 2325. State laws providing expedited procedures.


                  SUBCHAPTER D--PATERNITY ESTABLISHMENT

Sec. 2331. State laws concerning paternity establishment.
Sec. 2332. Outreach for voluntary paternity establishment.
Sec. 2333. Cooperation by applicants for and recipients of part A 
              assistance.


             SUBCHAPTER E--PROGRAM ADMINISTRATION AND FUNDING

Sec. 2341. Performance-based incentives and penalties.
Sec. 2342. Federal and State reviews and audits.
Sec. 2343. Required reporting procedures.
Sec. 2344. Automated data processing requirements.
Sec. 2345. Technical assistance.
Sec. 2346. Reports and data collection by the Secretary.


      SUBCHAPTER F--ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS

Sec. 2351. Simplified process for review and adjustment of child 
              support orders.
Sec. 2352. Furnishing consumer reports for certain purposes relating to 
              child support.
Sec. 2353. Nonliability for financial institutions providing financial 
              records to State child support enforcement agencies in 
              child support cases.


               SUBCHAPTER G--ENFORCEMENT OF SUPPORT ORDERS

Sec. 2361. Internal Revenue Service collection of arrearages.
Sec. 2362. Authority to collect support from Federal employees.
Sec. 2363. Enforcement of child support obligations of members of the 
              Armed Forces.
Sec. 2364. Voiding of fraudulent transfers.
Sec. 2365. Work requirement for persons owing past-due child support.
Sec. 2366. Definition of support order.
Sec. 2367. Reporting arrearages to credit bureaus.
Sec. 2368. Liens.
Sec. 2369. State law authorizing suspension of licenses.
Sec. 2370. Denial of passports for nonpayment of child support.
Sec. 2371. International support enforcement.
Sec. 2372. Financial institution data matches.
Sec. 2373. Enforcement of orders against paternal or maternal 
              grandparents in cases of minor parents.
Sec. 2374. Nondischargeability in bankruptcy of certain debts for the 
              support of a child.
Sec. 2375. Child support enforcement for Indian tribes.


                      SUBCHAPTER H--MEDICAL SUPPORT

Sec. 2376. Correction to ERISA definition of medical child support 
              order.
Sec. 2377. Enforcement of orders for health care coverage.


     SUBCHAPTER I--ENHANCING RESPONSIBILITY AND OPPORTUNITY FOR NON-
                          RESIDENTIAL PARENTS

Sec. 2381. Grants to States for access and visitation programs.


         SUBCHAPTER J--EFFECTIVE DATES AND CONFORMING AMENDMENTS

Sec. 2391. Effective dates and conforming amendments.

     Chapter 4--Restricting Welfare and Public Benefits for Aliens

Sec. 2400. Statements of national policy concerning welfare and 
              immigration.


              SUBCHAPTER A--ELIGIBILITY FOR FEDERAL BENEFITS

Sec. 2401. Aliens who are not qualified aliens ineligible for Federal 
              public benefits.
Sec. 2402. Limited eligibility of qualified aliens for certain Federal 
              programs.
Sec. 2403. Five-year limited eligibility of qualified aliens for 
              Federal means-tested public benefit.
Sec. 2404. Notification and information reporting.


      SUBCHAPTER B--ELIGIBILITY FOR STATE AND LOCAL PUBLIC BENEFITS 
                                PROGRAMS

Sec. 2411. Aliens who are not qualified aliens or nonimmigrants 
              ineligible for State and local public benefits.
Sec. 2412. State authority to limit eligibility of qualified aliens for 
              State public benefits.


      SUBCHAPTER C--ATTRIBUTION OF INCOME AND AFFIDAVITS OF SUPPORT

Sec. 2421. Federal attribution of sponsor's income and resources to 
              alien.
Sec. 2422. Authority for States to provide for attribution of sponsors 
              income and resources to the alien with respect to State 
              programs.
Sec. 2423. Requirements for sponsor's affidavit of support.


                     SUBCHAPTER D--GENERAL PROVISIONS

Sec. 2431. Definitions.
Sec. 2432. Verification of eligibility for Federal public benefits.
Sec. 2433. Statutory construction.
Sec. 2434. Communication between State and local government agencies 
              and the Immigration and Naturalization Service.
Sec. 2435. Qualifying quarters.


     SUBCHAPTER E--CONFORMING AMENDMENTS RELATING TO ASSISTED HOUSING

Sec. 2441. Conforming amendments relating to assisted housing.


   SUBCHAPTER F--EARNED INCOME CREDIT DENIED TO UNAUTHORIZED EMPLOYEES

Sec. 2451. Earned income credit denied to individuals not authorized to 
              be employed in the United States.

                  Chapter 5--Reform of Public Housing

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

 Chapter 6--Technical Amendments Relating to Child Protection Programs

Sec. 2601. Extension of enhanced funding for implementation of 
              statewide automated child welfare information systems.

[[Page S8688]]

Sec. 2602. Redesignation of section 1123.
Sec. 2603. Kinship care.

                         Chapter 7--Child Care

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

                        Chapter 8--Miscellaneous

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

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

     SEC. 2101. FINDINGS.

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

     SEC. 2102. REFERENCE TO SOCIAL SECURITY ACT.

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

     SEC. 2103. BLOCK GRANTS TO STATES.

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

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

     ``SEC. 401. PURPOSE.

       ``(a) In General.--The purpose of this part is to increase 
     the flexibility of States in operating a program designed 
     to--
       ``(1) provide assistance to needy families so that children 
     may be cared for in their own homes or in the homes of 
     relatives;
       ``(2) end the dependence of needy parents on government 
     benefits by promoting job preparation, work, and marriage;

[[Page S8689]]

       ``(3) prevent and reduce the incidence of out-of-wedlock 
     pregnancies and establish annual numerical goals for 
     preventing and reducing the incidence of these pregnancies; 
     and
       ``(4) encourage the formation and maintenance of two-parent 
     families.
       ``(b) No Individual Entitlement.--This part shall not be 
     interpreted to entitle any individual or family to assistance 
     under any State program funded under this part.

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

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

     ``SEC. 403. GRANTS TO STATES.

       ``(a) Grants.--
       ``(1) Family assistance grant.--
       ``(A) In general.--Each eligible State shall be entitled to 
     receive from the Secretary, for each of fiscal years 1996, 
     1997, 1998, 1999, 2000, and 2001 a grant in an amount equal 
     to the State family assistance grant.
       ``(B) State family assistance grant defined.--As used in 
     this part, the term `State family assistance grant' means the 
     greatest of--
       ``(i) \1/3\ of the total amount required to be paid to the 
     State under former section 403 (as in effect on September 30, 
     1995) for fiscal years 1992, 1993, and 1994 (other than with 
     respect to amounts expended by the State for child care under 
     subsection (g) or (i) of former section 402 (as so in 
     effect));
       ``(ii)(I) the total amount required to be paid to the State 
     under former section 403 for fiscal year 1994 (other than 
     with respect to amounts expended by the State for child care 
     under subsection (g) or (i) of former section 402 (as so in 
     effect)); plus
       ``(II) an amount equal to 85 percent of the amount (if any) 
     by which the total amount required to be paid to the State 
     under former section 403(a)(5) for emergency assistance for 
     fiscal year 1995 exceeds the total amount required to be paid 
     to the State under former section 403(a)(5) for fiscal year 
     1994, if, during fiscal year 1994 or 1995, the Secretary 
     approved under former section 402 an amendment to the former 
     State plan to allow the provision of emergency assistance in 
     the context of family preservation; or
       ``(iii) \4/3\ of the total amount required to be paid to 
     the State under former section 403 (as in effect on September 
     30, 1995) for the 1st 3 quarters of fiscal year 1995 (other 
     than with respect to amounts expended by the State under the 
     State plan approved under part F (as so in effect) or for 
     child care under subsection (g) or (i) of former section 402 
     (as so in effect)), plus the total amount required to be paid 
     to the State for fiscal year 1995 under former section 403(l) 
     (as so in effect).
       ``(C) Total amount required to be paid to the state under 
     former section 403 defined.--As used in this part, the term 
     `total amount required to be paid to the State under former 
     section 403' means, with respect to a fiscal year--
       ``(i) in the case of a State to which section 1108 does not 
     apply, the sum of--

       ``(I) the Federal share of maintenance assistance 
     expenditures for the fiscal year, before reduction pursuant 
     to subparagraph (B) or (C) of section 403(b)(2) (as in effect 
     on September 30, 1995), as reported by the State on ACF Form 
     231;

[[Page S8690]]

       ``(II) the Federal share of administrative expenditures 
     (including administrative expenditures for the development of 
     management information systems) for the fiscal year, as 
     reported by the State on ACF Form 231;
       ``(III) the Federal share of emergency assistance 
     expenditures for the fiscal year, as reported by the State on 
     ACF Form 231;
       ``(IV) the Federal share of expenditures for the fiscal 
     year with respect to child care pursuant to subsections (g) 
     and (i) of former section 402 (as in effect on September 30, 
     1995), as reported by the State on ACF Form 231; and
       ``(V) the aggregate amount required to be paid to the State 
     for the fiscal year with respect to the State program 
     operated under part F (as in effect on September 30, 1995), 
     as determined by the Secretary, including additional 
     obligations or reductions in obligations made after the close 
     of the fiscal year; and

       ``(ii) in the case of a State to which section 1108 
     applies, the lesser of--

       ``(I) the sum described in clause (i); or
       ``(II) the total amount certified by the Secretary under 
     former section 403 (as in effect during the fiscal year) with 
     respect to the territory.

       ``(D) Information to be used in determining amounts.--
       ``(i) For fiscal years 1992 and 1993.--

       ``(I) In determining the amounts described in subclauses 
     (I) through (IV) of subparagraph (C)(i) for any State for 
     each of fiscal years 1992 and 1993, the Secretary shall use 
     information available as of April 28, 1995.
       ``(II) In determining the amount described in subparagraph 
     (C)(i)(V) for any State for each of fiscal years 1992 and 
     1993, the Secretary shall use information available as of 
     January 6, 1995.

       ``(ii) For fiscal year 1994.--In determining the amounts 
     described in subparagraph (C)(i) for any State for fiscal 
     year 1994, the Secretary shall use information available as 
     of April 28, 1995.
       ``(iii) For fiscal year 1995.--

       ``(I) In determining the amount described in subparagraph 
     (B)(ii)(II) for any State for fiscal year 1995, the Secretary 
     shall use the information which was reported by the States 
     and estimates made by the States with respect to emergency 
     assistance expenditures and was available as of August 11, 
     1995.
       ``(II) In determining the amounts described in subclauses 
     (I) through (III) of subparagraph (C)(i) for any State for 
     fiscal year 1995, the Secretary shall use information 
     available as of October 2, 1995.
       ``(III) In determining the amount described in subparagraph 
     (C)(i)(IV) for any State for fiscal year 1995, the Secretary 
     shall use information available as of February 28, 1996.
       ``(IV) In determining the amount described in subparagraph 
     (C)(i)(V) for any State for fiscal year 1995, the Secretary 
     shall use information available as of October 5, 1995.

       ``(E) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for fiscal years 1996, 1997, 1998, 1999, 2000, 
     and 2001 such sums as are necessary for grants under this 
     paragraph.
       ``(2) Grant to reward states that reduce out-of-wedlock 
     births.--
       ``(A) In general.--Each eligible State shall be entitled to 
     receive from the Secretary for fiscal year 1998 or any 
     succeeding fiscal year, an illegitimacy reduction bonus if--
       ``(i) the State demonstrates that the number of out-of-
     wedlock births that occurred in the State during the most 
     recent 2-year period for which such information is available 
     decreased as compared to the number of such births that 
     occurred during the previous 2-year period; and
       ``(ii) the rate of induced pregnancy terminations in the 
     State for the fiscal year is less than the rate of induced 
     pregnancy terminations in the State for fiscal year 1995.
       ``(B) Participation in illegitimacy bonus.--A State that 
     demonstrates a decrease under subparagraph (A)(i) shall be 
     eligible for a grant under paragraph (5).

       ``(II) the rate of induced pregnancy terminations in the 
     State for the fiscal year is less than the rate of induced 
     pregnancy terminations in the State for fiscal year 1995.

       ``(C) Illegitimacy ratio.--As used in this paragraph, the 
     term `illegitimacy ratio' means, with respect to a State and 
     a fiscal year--
       ``(i) the number of out-of-wedlock births that occurred in 
     the State during the most recent fiscal year for which such 
     information is available; divided by
       ``(ii) the number of births that occurred in the State 
     during the most recent fiscal year for which such information 
     is available.
       ``(D) Disregard of changes in data due to changed reporting 
     methods.--For purposes of subparagraph (A), the Secretary 
     shall disregard--
       ``(i) any difference between the illegitimacy ratio of a 
     State for a fiscal year and the illegitimacy ratio of the 
     State the preceding 2 fiscal years which is attributable to a 
     change in State methods of reporting data used to calculate 
     the illegitimacy ratio; and
       ``(ii) any difference between the rate of induced pregnancy 
     terminations in a State for a fiscal year and such rate for 
     fiscal year 1995 which is attributable to a change in State 
     methods of reporting data used to calculate such rate.
       ``(E) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for fiscal year 1998 and for each succeeding 
     fiscal year such sums as are necessary for grants under this 
     paragraph.
       ``(3) Supplemental grant for population increases in 
     certain states.--
       ``(A) In general.--Each qualifying State shall, subject to 
     subparagraph (F), be entitled to receive from the Secretary--
       ``(i) for fiscal year 1998 a grant in an amount equal to 
     2.5 percent of the total amount required to be paid to the 
     State under former section 403 (as in effect during fiscal 
     year 1994) for fiscal year 1994; and
       ``(ii) for each of fiscal years 1999, 2000, and 2001, a 
     grant in an amount equal to the sum of--

       ``(I) the amount (if any) required to be paid to the State 
     under this paragraph for the immediately preceding fiscal 
     year; and
       ``(II) 2.5 percent of the sum of--

       ``(aa) the total amount required to be paid to the State 
     under former section 403 (as in effect during fiscal year 
     1994) for fiscal year 1994; and
       ``(bb) the amount (if any) required to be paid to the State 
     under this paragraph for the fiscal year preceding the fiscal 
     year for which the grant is to be made.
       ``(B) Preservation of grant without increases for states 
     failing to remain qualifying states.--Each State that is not 
     a qualifying State for a fiscal year specified in 
     subparagraph (A)(ii) but was a qualifying State for a prior 
     fiscal year shall, subject to subparagraph (F), be entitled 
     to receive from the Secretary for the specified fiscal year, 
     a grant in an amount equal to the amount required to be paid 
     to the State under this paragraph for the most recent fiscal 
     year for which the State was a qualifying State.
       ``(C) Qualifying state.--
       ``(i) In general.--For purposes of this paragraph, a State 
     is a qualifying State for a fiscal year if--

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

       ``(ii) State must qualify in fiscal year 1998.--
     Notwithstanding clause (i), a State shall not be a qualifying 
     State for any fiscal year after 1998 by reason of clause (i) 
     if the State is not a qualifying State for fiscal year 1998 
     by reason of clause (i).
       ``(iii) Certain states deemed qualifying states.--For 
     purposes of this paragraph, a State is deemed to be a 
     qualifying State for fiscal years 1998, 1999, 2000, and 2001 
     if--

       ``(I) the level of welfare spending per poor person by the 
     State for fiscal year 1997 is less than 35 percent of the 
     national average level of State welfare spending per poor 
     person for fiscal year 1996; or
       ``(II) the population of the State increased by more than 
     10 percent from April 1, 1990 to July 1, 1994, according to 
     the population estimates in publication CB94-204 of the 
     Bureau of the Census.

       ``(D) Definitions.--As used in this paragraph:
       ``(i) Level of welfare spending per poor person.--The term 
     `level of State welfare spending per poor person' means, with 
     respect to a State and a fiscal year--

       ``(I) the sum of--

       ``(aa) the total amount required to be paid to the State 
     under former section 403 (as in effect during fiscal year 
     1994) for fiscal year 1994; and
       ``(bb) the amount (if any) paid to the State under this 
     paragraph for the immediately preceding fiscal year; divided 
     by

       ``(II) the number of individuals, according to the 1990 
     decennial census, who were residents of the State and whose 
     income was below the poverty line.

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

       ``(I) the total amount required to be paid to the States 
     under former section 403 (as in effect during fiscal year 
     1994) for fiscal year 1994; divided by
       ``(II) the number of individuals, according to the 1990 
     decennial census, who were residents of any State and whose 
     income was below the poverty line.

       ``(iii) State.--The term `State' means each of the 50 
     States of the United States and the District of Columbia.
       ``(E) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for fiscal years 1998, 1999, 2000, and 2001 such 
     sums as are necessary for grants under this paragraph, in a 
     total amount not to exceed $800,000,000.
       ``(F) Grants reduced pro rata if insufficient 
     appropriations.--If the amount appropriated pursuant to this 
     paragraph for a fiscal year is less than the total amount of 
     payments otherwise required to be made under this paragraph 
     for the fiscal year, then the amount otherwise payable to any 
     State for the fiscal year under this paragraph shall be 
     reduced by a percentage equal to the amount so appropriated 
     divided by such total amount.
       ``(G) Budget scoring.--Notwithstanding section 257(b)(2) of 
     the Balanced Budget and Emergency Deficit Control Act of 
     1985, the

[[Page S8691]]

     baseline shall assume that no grant shall be made under this 
     paragraph after fiscal year 2000.
       ``(4) Bonus to reward high performance states.--
       ``(A) In general.--The Secretary shall make a grant 
     pursuant to this paragraph to each State for each bonus year 
     for which the State is a high performing State.
       ``(B) Amount of grant.--
       ``(i) In general.--Subject to clause (ii) of this 
     subparagraph, the Secretary shall determine the amount of the 
     grant payable under this paragraph to a high performing State 
     for a bonus year, which shall be based on the score assigned 
     to the State under subparagraph (D)(i) for the fiscal year 
     that immediately precedes the bonus year.
       ``(ii) Limitation.--The amount payable to a State under 
     this paragraph for a bonus year shall not exceed 5 percent of 
     the State family assistance grant.
       ``(C) Formula for measuring state performance.--Not later 
     than 1 year after the date of the enactment of the Personal 
     Responsibility and Work Opportunity Act of 1996, the 
     Secretary, in consultation with the National Governors' 
     Association and the American Public Welfare Association, 
     shall develop a formula for measuring State performance in 
     operating the State program funded under this part so as to 
     achieve the goals set forth in section 401(a). Such formula 
     shall emphasize the extent to which the State increases the 
     number of families that become ineligible for assistance 
     under the State program funded under this part as a result of 
     unsubsidized employment.
       ``(D) Scoring of state performance; setting of performance 
     thresholds.--For each bonus year, the Secretary shall--
       ``(i) use the formula developed under subparagraph (C) to 
     assign a score to each eligible State for the fiscal year 
     that immediately precedes the bonus year; and
       ``(ii) prescribe a performance threshold in such a manner 
     so as to ensure that--

       ``(I) the average annual total amount of grants to be made 
     under this paragraph for each bonus year equals the amount 
     specified for such bonus year in subparagraph (E)(ii); and
       ``(II) the total amount of grants to be made under this 
     paragraph for all bonus years equals $1,000,000,000.

       ``(E) Definitions.--As used in this paragraph:
       ``(i) Bonus year.--The term `bonus year' means fiscal years 
     1999, 2000, 2001, 2002, and 2003.
       ``(ii) The amount specified for such bonus year.--The term 
     `the amount specified for such bonus year' means the 
     following:

       ``(I) For fiscal years 1999, 2000, 2001, and 2002, 
     $175,000,000.
       ``(II) For fiscal year 2003, $300,000,000.

       ``(iii) High performing state.--The term `high performing 
     State' means, with respect a bonus year, an eligible State 
     whose score assigned pursuant to subparagraph (D)(i) for the 
     fiscal year immediately preceding the bonus year equals or 
     exceeds the performance threshold prescribed under 
     subparagraph (D)(ii) for such preceding fiscal year.
       ``(F) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for fiscal years 1999 through 2003 
     $1,000,000,000 for grants under this paragraph.
       ``(5) Bonus to reward decrease in illegitimacy.--
       ``(A) In general.--The Secretary shall make a grant 
     pursuant to this paragraph to each State determined eligible 
     under paragraph (2)(B) for each bonus year for which the 
     State demonstrates a net decrease in out-of-wedlock births.
       ``(B) Amount of grant.--
       ``(i) In general.--Subject to this subparagraph, the 
     Secretary shall determine the amount of the grant payable 
     under this paragraph to a low illegitimacy State for a bonus 
     year.
       ``(ii) Top five states.--With respect to States determined 
     eligible under paragraph (2)(B) for a fiscal year, the 
     Secretary shall determine which five of such States 
     demonstrated the greatest decrease in out-of-wedlock births 
     under such paragraph for the period involved. Each of such 
     five States shall receive a grant of equal amount under this 
     paragraph for such fiscal year but such amount shall not 
     exceed $20,000,000 for any single State.
       ``(iii) Less than five states.--With respect to a fiscal 
     year, if the Secretary determines that there are less than 
     five States eligible under paragraph (2)(B) for a fiscal 
     year, the grants under this paragraph shall be awarded to 
     each such State in an equal amount but such amount shall not 
     exceed $25,000,000 for any single State.
       ``(C) Bonus year.--The term `bonus year' means fiscal years 
     1999, 2000, 2001, 2002, and 2003.
       ``(D) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for fiscal years 1999 through 2003, such sums as 
     are necessary for grants under this paragraph.
       ``(b) Contingency Fund.--
       ``(1) Establishment.--There is hereby established in the 
     Treasury of the United States a fund which shall be known as 
     the `Contingency Fund for State Welfare Programs' (in this 
     section referred to as the `Fund').
       ``(2) Deposits into fund.--Out of any money in the Treasury 
     of the United States not otherwise appropriated, there are 
     appropriated for fiscal years 1998, 1999, 2000, and 2001 such 
     sums as are necessary for payment to the Fund in a total 
     amount not to exceed $2,000,000,000.
       ``(3) Grants.--
       ``(A) Provisional payments.--If an eligible State submits 
     to the Secretary a request for funds under this paragraph 
     during an eligible month, the Secretary shall, subject to 
     this paragraph, pay to the State, from amounts appropriated 
     pursuant to paragraph (2), an amount equal to the amount of 
     funds so requested.
       ``(B) Payment priority.--The Secretary shall make payments 
     under subparagraph (A) in the order in which the Secretary 
     receives requests for such payments.
       ``(C) Limitations.--
       ``(i) Monthly payment to a state.--The total amount paid to 
     a single State under subparagraph (A) during a month shall 
     not exceed \1/12\ of 20 percent of the State family 
     assistance grant.
       ``(ii) Payments to all states.--The total amount paid to 
     all States under subparagraph (A) during fiscal years 1998 
     through 2001 shall not exceed the total amount appropriated 
     pursuant to paragraph (2).
       ``(4) Annual reconciliation.--Notwithstanding paragraph 
     (3), at the end of each fiscal year, each State shall remit 
     to the Secretary an amount equal to the amount (if any) by 
     which the total amount paid to the State under paragraph (3) 
     during the fiscal year exceeds--
       ``(A) the Federal medical assistance percentage for the 
     State for the fiscal year (as defined in section 1905(b), as 
     in effect on September 30, 1995) of the amount (if any) by 
     which the expenditures under the State program funded under 
     this part for the fiscal year exceed historic State 
     expenditures (as defined in section 409(a)(7)(B)(iii)); 
     multiplied by
       ``(B) \1/12\ times the number of months during the fiscal 
     year for which the Secretary makes a payment to the State 
     under this subsection.
       ``(5) Eligible month.--As used in paragraph (3)(A), the 
     term `eligible month' means, with respect to a State, a month 
     in the 2-month period that begins with any month for which 
     the State is a needy State.
       ``(6) Needy state.--For purposes of paragraph (5), a State 
     is a needy State for a month if--
       ``(A) the average rate of--
       ``(i) total unemployment in such State (seasonally 
     adjusted) for the period consisting of the most recent 3 
     months for which data for all States are published equals or 
     exceeds 6.5 percent; and
       ``(ii) total unemployment in such State (seasonally 
     adjusted) for the 3-month period equals or exceeds 110 
     percent of such average rate for either (or both) of the 
     corresponding 3-month periods ending in the 2 preceding 
     calendar years; or
       ``(B) as determined by the Secretary of Agriculture (in the 
     discretion of the Secretary of Agriculture), the monthly 
     average number of individuals (as of the last day of each 
     month) participating in the food stamp program in the State 
     in the then most recently concluded 3-month period for which 
     data are available exceeds by not less than 10 percent the 
     lesser of--
       ``(i) the monthly average number of individuals (as of the 
     last day of each month) in the State that would have 
     participated in the food stamp program in the corresponding 
     3-month period in fiscal year 1994 if the amendments made by 
     chapter 4 of the Personal Responsibility and Work Opportunity 
     Act of 1996 and the amendments made by chapter 1 of subtitle 
     A of title I of the Agricultural Reconciliation Act of 1996 
     had been in effect throughout fiscal year 1994; or
       ``(ii) the monthly average number of individuals (as of the 
     last day of each month) in the State that would have 
     participated in the food stamp program in the corresponding 
     3-month period in fiscal year 1995 if the amendments made by 
     chapter 4 of the Personal Responsibility and Work Opportunity 
     Act of 1996 and the amendments made by chapter 1 of subtitle 
     A of title I of the Agricultural Reconciliation Act of 1996 
     had been in effect throughout fiscal year 1995.
       ``(7) Other terms defined.--As used in this subsection:
       ``(A) State.--The term `State' means each of the 50 States 
     of the United States and the District of Columbia.
       ``(B) Secretary.--The term `Secretary' means the Secretary 
     of the Treasury.
       ``(8) Annual reports.--The Secretary shall annually report 
     to the Congress on the status of the Fund.

     ``SEC. 404. USE OF GRANTS.

       ``(a) General Rules.--Subject to this part, a State to 
     which a grant is made under section 403 may use the grant--
       ``(1) in any manner that is reasonably calculated to 
     accomplish the purpose of this part, including to provide low 
     income households with assistance in meeting home heating and 
     cooling costs; or
       ``(2) in any manner that the State was authorized to use 
     amounts received under part A or F, as such parts were in 
     effect on September 30, 1995.
       ``(b) Limitation on Use of Grant for Administrative 
     Purposes.--
       ``(1) Limitation.--A State to which a grant is made under 
     section 403 shall not expend more than 15 percent of the 
     grant for administrative purposes.
       ``(2) Exception.--Paragraph (1) shall not apply to the use 
     of a grant for information technology and computerization 
     needed for

[[Page S8692]]

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

     ``SEC. 405. ADMINISTRATIVE PROVISIONS.

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

[[Page S8693]]

     fixed by the Secretary of Health and Human Services, the 
     amount so certified.

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

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

     ``SEC. 407. MANDATORY WORK REQUIREMENTS.

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

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

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

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

       ``(b) Calculation of Participation Rates.--
       ``(1) All families.--
       ``(A) Average monthly rate.--For purposes of subsection 
     (a)(1), the participation rate for all families of a State 
     for a fiscal year is the average of the participation rates 
     for all families of the State for each month in the fiscal 
     year.
       ``(B) Monthly participation rates.--The participation rate 
     of a State for all families of the State for a month, 
     expressed as a percentage, is--
       ``(i) the number of families receiving assistance under the 
     State program funded under this part that include an adult 
     who is engaged in work for the month; divided by
       ``(ii) the amount by which--

       ``(I) the number of families receiving such assistance 
     during the month that include an adult receiving such 
     assistance; exceeds
       ``(II) the number of families receiving such assistance 
     that are subject in such month to a penalty described in 
     subsection (e)(1) but have not been subject to such penalty 
     for more than 3 months within the preceding 12-month period 
     (whether or not consecutive).

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

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

       ``(2) 2-parent families.--For purposes of subsection 
     (b)(2)(B)(i)--
       ``(A) an adult is engaged in work for a month in a fiscal 
     year if the adult is making progress in work activities for 
     at least 35 hours per week during the month, not fewer than 
     30 hours per week of which are attributable to an activity 
     described in paragraph (1), (2), (3), (4), (5), (6), (7), or 
     (8) of subsection (d); and
       ``(B) if the family of such adult receives federally-funded 
     child care assistance, if the adult's spouse is making 
     progress in work activities for at least 20 hours per week 
     during the month which are attributable to an activity 
     described in paragraph (1), (2), (3), (4), (5), or (7) of 
     subsection (d).
       ``(3) Limitation on number of weeks for which job search 
     counts as work.--Notwithstanding paragraphs (1) and (2), an 
     individual shall not be considered to be engaged in work by 
     virtue of participation in an activity described in 
     subsection (d)(6), after the individual has participated in 
     such an activity for 4 weeks (except if the unemployment rate 
     in the State is above the national average, in which case, 12 
     weeks) in a fiscal year. An individual shall be considered to 
     be participating in such an activity for a week if the 
     individual participates in such an activity at any time 
     during the week.
       ``(4) Limitation on education activities counted as work.--
     For purposes of determining monthly participation rates under 
     paragraphs (1)(B)(i) and (2)(B)(i) of subsection (b), not 
     more than 30 percent of adults in all families and in 2-
     parent families determined to be engaged in work in the State 
     for a month may meet the work activity requirement through 
     participation in vocational educational training.
       ``(5) Single parent with child under age 6 deemed to be 
     meeting work participation requirements if parent is engaged 
     in work for 20 hours per week.--For purposes of determining 
     monthly participation rates under subsection (b)(1)(B)(i), a 
     recipient in a 1-parent family who is the parent of a child 
     who has not attained 6 years of age is deemed to be engaged 
     in work for a month if the recipient is engaged in work for 
     an average of at least 20 hours per week during the month.
       ``(6) Teen head of household who maintains satisfactory 
     school attendance deemed to be meeting work participation 
     requirements.--For purposes of determining monthly 
     participation rates under subsection (b)(1)(B)(i), a 
     recipient who is a single head of household and has not 
     attained 20 years of age is deemed to be engaged in work for 
     a month in a fiscal year if the recipient--
       ``(A) maintains satisfactory attendance at secondary school 
     or the equivalent during the month; or
       ``(B) participates in education directly related to 
     employment for at least the minimum average

[[Page S8694]]

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

     ``SEC. 408. PROHIBITIONS; REQUIREMENTS.

       ``(a) In General.--
       ``(1) No assistance for families without a minor child.--A 
     State to which a grant is made under section 403 shall not 
     use any part of the grant to provide assistance to a family--
       ``(A) unless the family includes--
       ``(i) a minor child who resides with a custodial parent or 
     other adult caretaker relative of the child; or
       ``(ii) a pregnant individual; and
       ``(B) if such family includes an adult who has received 
     assistance under any State program funded under this part 
     attributable to funds provided by the Federal Government, for 
     60 months (whether or not consecutive) after the date the 
     State program funded under this part commences (unless an 
     exception described in subparagraph (B) or (C) of paragraph 
     (8) applies).
       ``(2) Reduction or elimination of assistance for 
     noncooperation in establishing paternity or obtaining child 
     support.--If the agency responsible for administering the 
     State plan approved under part D determines that an 
     individual is not cooperating with the State in establishing 
     paternity or in establishing, modifying, or enforcing a 
     support order with respect to a child of the individual, and 
     the individual does not qualify for any good cause or other 
     exception established by the State pursuant to section 
     454(29), then the State--
       ``(A) shall deduct not less than 25 percent of the 
     assistance that would otherwise be provided to the family of 
     the individual under the State program funded under this 
     part; and
       ``(B) may deny the family any assistance under the State 
     program.
       ``(3) No assistance for families not assigning certain 
     support rights to the state.--
       ``(A) In general.--A State to which a grant is made under 
     section 403 shall require, as a condition of providing 
     assistance to a family under the State program funded under 
     this part, that a member of the family assign to the State 
     any rights the family member may have (on behalf of the 
     family member or of any other person for whom the family 
     member has applied for or is receiving such assistance) to 
     support from any other person, not exceeding the total amount 
     of assistance so provided to the family, which accrue (or 
     have accrued) before the date the family leaves the program, 
     which assignment, on and after the date the family leaves the 
     program, shall not apply with respect to any support (other 
     than support collected pursuant to section 464) which accrued 
     before the family received such assistance and which the 
     State has not collected by--
       ``(i) September 30, 2000, if the assignment is executed on 
     or after October 1, 1997, and before October 1, 2000; or
       ``(ii) the date the family leaves the program, if the 
     assignment is executed on or after October 1, 2000.
       ``(B) Limitation.--A State to which a grant is made under 
     section 403 shall not require, as a condition of providing 
     assistance to any family under the State program funded under 
     this part, that a member of the family assign to the State 
     any rights to support described in subparagraph (A) which 
     accrue after the date the family leaves the program.
       ``(4) No assistance for teenage parents who do not attend 
     high school or other equivalent training program.--A State to 
     which a grant is made under section 403 shall not use any 
     part of the grant to provide assistance to an individual who 
     has not attained 18 years of age, is not married, has a minor 
     child at least 12 weeks of age in his or her care, and has 
     not successfully completed a high-school education (or its 
     equivalent), if the individual does not participate in--
       ``(A) educational activities directed toward the attainment 
     of a high school diploma or its equivalent; or
       ``(B) an alternative educational or training program that 
     has been approved by the State.
       ``(5) No assistance for teenage parents not living in 
     adult-supervised settings.--
       ``(A) In general.--
       ``(i) Requirement.--Except as provided in subparagraph (B), 
     a State to which a grant is made under section 403 shall not 
     use any part of the grant to provide assistance to an 
     individual described in clause (ii) of this subparagraph if 
     the individual and the minor child referred to in clause 
     (ii)(II) do not reside in a place of residence maintained by 
     a parent, legal guardian, or other adult relative of the 
     individual as such parent's, guardian's, or adult relative's 
     own home.
       ``(ii) Individual described.--For purposes of clause (i), 
     an individual described in this clause is an individual who--

       ``(I) has not attained 18 years of age; and
       ``(II) is not married, and has a minor child in his or her 
     care.

       ``(B) Exception.--
       ``(i) Provision of, or assistance in locating, adult-
     supervised living arrangement.--In the case of an individual 
     who is described in clause (ii), the State agency referred to 
     in section 402(a)(4) shall provide, or assist the individual 
     in locating, a second chance home, maternity home, or other 
     appropriate adult-supervised supportive living arrangement, 
     taking into consideration the needs and concerns of the 
     individual, and thereafter shall require that the individual 
     and the minor child referred to in subparagraph (A)(ii)(II) 
     reside in such living arrangement as a condition of the 
     continued receipt of assistance under the State program 
     funded under this part attributable to funds provided by the 
     Federal Government (or in an alternative appropriate 
     arrangement, should circumstances change and the current 
     arrangement cease to be appropriate).
       ``(ii) Individual described.--For purposes of clause (i), 
     an individual is described in this clause if the individual 
     is described in subparagraph (A)(ii), and--

       ``(I) the individual has no parent, legal guardian or other 
     appropriate adult relative described in subclause (II) of his 
     or her own who is living or whose whereabouts are known;

[[Page S8695]]

       ``(II) no living parent, legal guardian, or other 
     appropriate adult relative, who would otherwise meet 
     applicable State criteria to act as the individual's legal 
     guardian, of such individual allows the individual to live in 
     the home of such parent, guardian, or relative;
       ``(III) the State agency determines that--

       ``(aa) the individual or the minor child referred to in 
     subparagraph (A)(ii)(II) is being or has been subjected to 
     serious physical or emotional harm, sexual abuse, or 
     exploitation in the residence of the individual's own parent 
     or legal guardian; or
       ``(bb) substantial evidence exists of an act or failure to 
     act that presents an imminent or serious harm if the 
     individual and the minor child lived in the same residence 
     with the individual's own parent or legal guardian; or

       ``(IV) the State agency otherwise determines that it is in 
     the best interest of the minor child to waive the requirement 
     of subparagraph (A) with respect to the individual or the 
     minor child.

       ``(iii) Second-chance home.--For purposes of this 
     subparagraph, the term `second-chance home' means an entity 
     that provides individuals described in clause (ii) with a 
     supportive and supervised living arrangement in which such 
     individuals are required to learn parenting skills, including 
     child development, family budgeting, health and nutrition, 
     and other skills to promote their long-term economic 
     independence and the well-being of their children.
       ``(6) No medical services.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     a State to which a grant is made under section 403 shall not 
     use any part of the grant to provide medical services.
       ``(B) Exception for family planning services.--As used in 
     subparagraph (A), the term `medical services' does not 
     include family planning services.
       ``(7) Sanction welfare recipients for failing to ensure 
     that minor dependent children attend school.--
       ``(A) In general.--A State to which a grant is made under 
     section 403 shall not be prohibited from sanctioning a family 
     that includes an adult who has received assistance under any 
     State program funded under this part attributable to funds 
     provided by the Federal Government or under the food stamp 
     program, as defined in section 3(h) of the Food Stamp Act of 
     1977, if such adult fails to ensure that the minor dependent 
     children of such adult attend school as required by the law 
     of the State in which the minor children reside.
       ``(8) Denial of assistance for 10 years to a person found 
     to have fraudulently misrepresented residence in order to 
     obtain assistance in 2 or more states.--A State to which a 
     grant is made under section 403 shall not use any part of the 
     grant to provide cash assistance to an individual during the 
     10-year period that begins on the date the individual is 
     convicted in Federal or State court of having made a 
     fraudulent statement or representation with respect to the 
     place of residence of the individual in order to receive 
     assistance simultaneously from 2 or more States under 
     programs that are funded under this title, title XV or XIX, 
     or the Food Stamp Act of 1977, or benefits in 2 or more 
     States under the supplemental security income program under 
     title XVI. The preceding sentence shall not apply with 
     respect to a conviction of an individual, for any month 
     beginning after the President of the United States grants a 
     pardon with respect to the conduct which was the subject of 
     the conviction.
       ``(9) Denial of assistance for fugitive felons and 
     probation and parole violators.--
       ``(A) In general.--A State to which a grant is made under 
     section 403 shall not use any part of the grant to provide 
     assistance to any individual who is--
       ``(i) fleeing to avoid prosecution, or custody or 
     confinement after conviction, under the laws of the place 
     from which the individual flees, for a crime, or an attempt 
     to commit a crime, which is a felony under the laws of the 
     place from which the individual flees, or which, in the case 
     of the State of New Jersey, is a high misdemeanor under the 
     laws of such State; or
       ``(ii) violating a condition of probation or parole imposed 
     under Federal or State law.
     The preceding sentence shall not apply with respect to 
     conduct of an individual, for any month beginning after the 
     President of the United States grants a pardon with respect 
     to the conduct.
       ``(B) Exchange of information with law enforcement 
     agencies.--If a State to which a grant is made under section 
     403 establishes safeguards against the use or disclosure of 
     information about applicants or recipients of assistance 
     under the State program funded under this part, the 
     safeguards shall not prevent the State agency administering 
     the program from furnishing a Federal, State, or local law 
     enforcement officer, upon the request of the officer, with 
     the current address of any recipient if the officer furnishes 
     the agency with the name of the recipient and notifies the 
     agency that--
       ``(i) the recipient--

       ``(I) is described in subparagraph (A); or
       ``(II) has information that is necessary for the officer to 
     conduct the official duties of the officer; and

       ``(ii) the location or apprehension of the recipient is 
     within such official duties.
       ``(10) Denial of assistance for minor children who are 
     absent from the home for a significant period.--
       ``(A) In general.--A State to which a grant is made under 
     section 403 shall not use any part of the grant to provide 
     assistance for a minor child who has been, or is expected by 
     a parent (or other caretaker relative) of the child to be, 
     absent from the home for a period of 45 consecutive days or, 
     at the option of the State, such period of not less than 30 
     and not more than 180 consecutive days as the State may 
     provide for in the State plan submitted pursuant to section 
     402.
       ``(B) State authority to establish good cause exceptions.--
     The State may establish such good cause exceptions to 
     subparagraph (A) as the State considers appropriate if such 
     exceptions are provided for in the State plan submitted 
     pursuant to section 402.
       ``(C) Denial of assistance for relative who fails to notify 
     state agency of absence of child.--A State to which a grant 
     is made under section 403 shall not use any part of the grant 
     to provide assistance for an individual who is a parent (or 
     other caretaker relative) of a minor child and who fails to 
     notify the agency administering the State program funded 
     under this part of the absence of the minor child from the 
     home for the period specified in or provided for pursuant to 
     subparagraph (A), by the end of the 5-day period that begins 
     with the date that it becomes clear to the parent (or 
     relative) that the minor child will be absent for such period 
     so specified or provided for.
       ``(11) Assuring medicaid coverage for low-income 
     families.--
       ``(A) In general.--Notwithstanding any other provision of 
     this Act, subject to the succeeding provisions of this 
     paragraph, with respect to a State any reference in title XIX 
     (or other provision of law in relation to the operation of 
     such title) to a provision of this part, or a State plan 
     under this part (or a provision of such a plan), including 
     standards and methodologies for determining income and 
     resources under this part or such plan, shall be considered a 
     reference to such a provision or plan as in effect as of July 
     1, 1996, with respect to the State.
       ``(B) Constructions.--
       ``(i) In applying section 1925(a)(1), the reference to 
     `section 402(a)(8)(B)(ii)(II)' is deemed a reference to a 
     corresponding earning disregard rule (if any) established 
     under a State program funded under this part (as in effect on 
     or after October 1, 1996).
       ``(ii) The provisions of former section 406(h) (as in 
     effect on July 1, 1996) shall apply, in relation to title 
     XIX, with respect to individuals who receive assistance under 
     a State program funded under this part (as in effect on or 
     after October 1, 1996) and are eligible for medical 
     assistance under title XIX or who are described in 
     subparagraph (C)(i) in the same manner as they apply as of 
     July 1, 1996, with respect to individuals who become 
     ineligible for aid to families with dependent children as a 
     result (wholly or partly) of the collection or increased 
     collection of child or spousal support under part D of this 
     title.
       ``(iii) With respect to the reference in section 1902(a)(5) 
     to a State plan approved under this part, a State may treat 
     such reference as a reference either to a State program 
     funded under this part (as in effect on or after October 1, 
     1996) or to the State plan under title XIX.
       ``(C) Eligibility criteria.--
       ``(i) In general.--For purposes of title XIX, subject to 
     clause (ii), in determining eligibility for medical 
     assistance under such title, an individual shall be treated 
     as receiving aid or assistance under a State plan approved 
     under this part (and shall be treated as meeting the income 
     and resource standards under this part) only if the 
     individual meets--

       ``(I) the income and resource standards for determining 
     eligibility under such plan; and
       ``(II) the eligibility requirements of such plan under 
     subsections (a) through (c) of former section 406 and former 
     section 407(a),

     as in effect as of July 1, 1996. Subject to clause (ii)(II), 
     the income and resource methodologies under such plan as of 
     such date shall be used in the determination of whether any 
     individual meets income and resource standards under such 
     plan.
       ``(ii) State option.--For purposes of applying this 
     paragraph, a State may--

       ``(I) lower its income standards applicable with respect to 
     this part, but not below the income standards applicable 
     under its State plan under this part on May 1, 1988; and
       ``(II) use income and resource standards or methodologies 
     that are less restrictive than the standards or methodologies 
     used under the State plan under this part as of July 1, 1996.

       ``(iii) Transitional coverage.--For purposes of section 
     1925, an individual who is receiving assistance under the 
     State program funded under this part (as in effect on or 
     after October 1, 1996) and is eligible for medical assistance 
     under title XIX shall be treated as an individual receiving 
     aid or assistance pursuant to a State plan approved under 
     this part (as in effect as of July 1, 1996) (and thereby 
     eligible for continuation of medical assistance under such 
     section 1925).
       ``(D) Waivers.--In the case of a waiver of a provision of 
     this part in effect with respect to a State as of July 1, 
     1996, if the waiver affects eligibility of individuals for 
     medical assistance under title XIX, such waiver may (but need 
     not) continue to be applied, at the option of the State, in 
     relation to such title after the date the waiver would 
     otherwise expire. If a State elects not to continue to apply 
     such a waiver, then, after the date of the expiration of the 
     waiver, subparagraphs (A), (B), and (C) shall be applied as 
     if any provisions so waived had not been waived.
       ``(E) State option to use 1 application form.--Nothing in 
     this paragraph, this part, or title XIX, shall be construed 
     as preventing a State from providing for the same application 
     form for assistance under a State program funded under this 
     part (on or after October 1, 1996) and for medical assistance 
     under title XIX.
       ``(F) Requirement for receipt of funds.--A State to which a 
     grant is made under section 403 shall take such action as may 
     be necessary to ensure that the provisions of this paragraph 
     are carried out: Provided, That the State is otherwise 
     participating in title XIX of this Act.

[[Page S8696]]

       ``(b) Aliens.--For special rules relating to the treatment 
     of aliens, see section 2402 of the Personal Responsibility 
     and Work Opportunity Act of 1996.
       ``(c) Nondiscrimination Provisions.--Any program or 
     activity that receives funds under this part shall be subject 
     to enforcement authorized under the following provisions of 
     law:
       ``(1) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et 
     seq.).
       ``(2) Section 504 of the Rehabilitation Act of 1973 (29 
     U.S.C. 794).
       ``(3) The Americans with Disabilities Act of 1990 (42 
     U.S.C. 12101 et seq.).
       ``(4) Title VI of the Civil Rights Act of 1964 (42 U.S.C. 
     2000d et seq.).
       ``(d) State Required To Enter Into a Personal 
     Responsibility Agreement With Each Family Receiving 
     Assistance.--
       ``(1) In general.--Each State to which a grant is made 
     under section 403 shall require each family receiving 
     assistance under the State program funded under this part to 
     enter into a personal responsibility agreement (as developed 
     by the State) with the State.
       ``(2) Personal responsibility agreement.--For purposes of 
     this subsection, the term `personal responsibility agreement' 
     means a binding contract between the State and each family 
     receiving assistance under the State program funded under 
     this part that--
       ``(A) contains a statement that public assistance is not 
     intended to be a way of life, but is intended as temporary 
     assistance to help the family achieve self-sufficiency and 
     personal independence;
       ``(B) outlines the steps each family and the State will 
     take to get the family off of welfare and to become self-
     sufficient, including an employment goal for the individual 
     and a plan for promptly moving the individual into paid 
     employment;
       ``(C) specifies a negotiated time-limited period of 
     eligibility for receipt of assistance that is consistent with 
     unique family circumstances and is based on a reasonable plan 
     to facilitate the transition of the family to self-
     sufficiency;
       ``(D) provides for the imposition of sanctions if the 
     individual refuses to sign the agreement or does not comply 
     with the terms of the agreement, which may include loss or 
     reduction of cash benefits;
       ``(E) provides that the contract shall be invalid if the 
     State agency fails to comply with the contract; and
       ``(F) provides that the individual agrees not to abuse 
     illegal drugs or other substances that would interfere with 
     the ability of the individual to become self-sufficient, or 
     provide for a referral for substance abuse treatment if 
     necessary to increase the employability of the individual.
       ``(3) Assessment.--The State agency shall provide, through 
     a case manager, an initial and thorough assessment of the 
     skills, prior work experience, and employability of each 
     parent for use in developing and negotiating a personal 
     responsibility contract.
       ``(4) Dispute resolution.--The State agency shall establish 
     a dispute resolution procedure for disputes related to 
     participation in the personal responsibility contract that 
     provides the opportunity for a hearing.

     ``SEC. 409. PENALTIES.

       ``(a) In General.--Subject to this section:
       ``(1) Use of grant in violation of this part.--
       ``(A) General penalty.--If an audit conducted under chapter 
     75 of title 31, United States Code, finds that an amount paid 
     to a State under section 403 for a fiscal year has been used 
     in violation of this part, the Secretary shall reduce the 
     grant payable to the State under section 403(a)(1) for the 
     immediately succeeding fiscal year quarter by the amount so 
     used.
       ``(B) Enhanced penalty for intentional violations.--If the 
     State does not prove to the satisfaction of the Secretary 
     that the State did not intend to use the amount in violation 
     of this part, the Secretary shall further reduce the grant 
     payable to the State under section 403(a)(1) for the 
     immediately succeeding fiscal year quarter by an amount equal 
     to 5 percent of the State family assistance grant.
       ``(2) Failure to submit required report.--
       ``(A) In general.--If the Secretary determines that a State 
     has not, within 1 month after the end of a fiscal quarter, 
     submitted the report required by section 411(a) for the 
     quarter, the Secretary shall reduce the grant payable to the 
     State under section 403(a)(1) for the immediately succeeding 
     fiscal year by an amount equal to 4 percent of the State 
     family assistance grant.
       ``(B) Rescission of penalty.--The Secretary shall rescind a 
     penalty imposed on a State under subparagraph (A) with 
     respect to a report if the State submits the report before 
     the end of the fiscal quarter that immediately succeeds the 
     fiscal quarter for which the report was required.
       ``(3) Failure to satisfy minimum participation rates.--
       ``(A) In general.--If the Secretary determines that a State 
     to which a grant is made under section 403 for a fiscal year 
     has failed to comply with section 407(a) for the fiscal year, 
     the Secretary shall reduce the grant payable to the State 
     under section 403(a)(1) for the immediately succeeding fiscal 
     year by an amount equal to not more than 5 percent of the 
     State family assistance grant.
       ``(B) Penalty based on severity of failure.--The Secretary 
     shall impose reductions under subparagraph (A) based on the 
     degree of noncompliance.
       ``(C) Additional penalty for consecutive noncompliance.--
     Notwithstanding the limitation described in subparagraph (A), 
     the Secretary shall reduce the grant payable to the State 
     under section 403(a)(1) for a fiscal year, in addition to the 
     reduction imposed under subparagraph (A), by an amount equal 
     to 5 percent of the State family assistance grant, if the 
     Secretary determines that the State failed to comply with 
     section 407(a) for 2 or more consecutive preceding fiscal 
     years.
       ``(4) Failure to participate in the income and eligibility 
     verification system.--If the Secretary determines that a 
     State program funded under this part is not participating 
     during a fiscal year in the income and eligibility 
     verification system required by section 1137, the Secretary 
     shall reduce the grant payable to the State under section 
     403(a)(1) for the immediately succeeding fiscal year by an 
     amount equal to not more than 2 percent of the State family 
     assistance grant.
       ``(5) Failure to comply with paternity establishment and 
     child support enforcement requirements under part d.--
     Notwithstanding any other provision of this Act, if the 
     Secretary determines that the State agency that administers a 
     program funded under this part does not enforce the penalties 
     requested by the agency administering part D against 
     recipients of assistance under the State program who fail to 
     cooperate in establishing paternity or in establishing, 
     modifying, or enforcing a child support order in accordance 
     with such part and who do not qualify for any good cause or 
     other exception established by the State under section 
     454(29), the Secretary shall reduce the grant payable to the 
     State under section 403(a)(1) for the immediately succeeding 
     fiscal year (without regard to this section) by not more than 
     5 percent.
       ``(6) Failure to timely repay a federal loan fund for state 
     welfare programs.--If the Secretary determines that a State 
     has failed to repay any amount borrowed from the Federal Loan 
     Fund for State Welfare Programs established under section 406 
     within the period of maturity applicable to the loan, plus 
     any interest owed on the loan, the Secretary shall reduce the 
     grant payable to the State under section 403(a)(1) for the 
     immediately succeeding fiscal year quarter (without regard to 
     this section) by the outstanding loan amount, plus the 
     interest owed on the outstanding amount. The Secretary shall 
     not forgive any outstanding loan amount or interest owed on 
     the outstanding amount.
       ``(7) Failure of any state to maintain certain level of 
     historic effort.--
       ``(A) In general.--The Secretary shall reduce the grant 
     payable to the State under section 403(a)(1) for fiscal year 
     1998, 1999, 2000, 2001, or 2002 by the amount (if any) by 
     which qualified State expenditures for the then immediately 
     preceding fiscal year are less than the applicable percentage 
     of historic State expenditures with respect to such preceding 
     fiscal year.
       ``(B) Definitions.--As used in this paragraph:
       ``(i) Qualified state expenditures.--

       ``(I) In general.--The term `qualified State expenditures' 
     means, with respect to a State and a fiscal year, the total 
     expenditures by the State during the fiscal year, under all 
     State programs, for any of the following with respect to 
     eligible families:

       ``(aa) Cash assistance.
       ``(bb) Child care assistance.
       ``(cc) Educational activities designed to increase self-
     sufficiency, job training, and work, excluding any 
     expenditure for public education in the State except 
     expenditures which involve the provision of services or 
     assistance to a member of an eligible family which is not 
     generally available to persons who are not members of an 
     eligible family.
       ``(dd) Administrative costs in connection with the matters 
     described in items (aa), (bb), (cc), and (ee), but only to 
     the extent that such costs do not exceed 15 percent of the 
     total amount of qualified State expenditures for the fiscal 
     year.
       ``(ee) Any other use of funds allowable under section 
     404(a)(1).

       ``(II) Exclusion of transfers from other state and local 
     programs.--Such term does not include expenditures under any 
     State or local program during a fiscal year, except to the 
     extent that--

       ``(aa) such expenditures exceed the amount expended under 
     the State or local program in the fiscal year most recently 
     ending before the date of the enactment of the Personal 
     Responsibility and Work Opportunity Act of 1996; or
       ``(bb) the State is entitled to a payment under former 
     section 403 (as in effect immediately before such date of 
     enactment) with respect to such expenditures.

       ``(III) Eligible families.--As used in subclause (I), the 
     term `eligible families' means families eligible for 
     assistance under the State program funded under this part, 
     and families that would be eligible for such assistance but 
     for the application of section 408(a)(8) of this Act or 
     section 2402 of the Personal Responsibility and Work 
     Opportunity Act of 1996.

       ``(ii) Applicable percentage.--The term `applicable 
     percentage' means for fiscal years 1997 through 2001, 80 
     percent reduced (if appropriate) in accordance with 
     subparagraph (C)(ii).
       ``(iii) Historic state expenditures.--The term `historic 
     State expenditures' means, with respect to a State, the 
     lesser of--

       ``(I) the expenditures by the State under parts A and F (as 
     in effect during fiscal year 1994) for fiscal year 1994; or
       ``(II) the amount which bears the same ratio to the amount 
     described in subclause (I) as--

       ``(aa) the State family assistance grant, plus the total 
     amount required to be paid to the State under former section 
     403 for fiscal year 1994 with respect to amounts expended by 
     the State for child care under subsection (g) or (i) of 
     section 402 (as in effect during fiscal year 1994); bears to
       ``(bb) the total amount required to be paid to the State 
     under former section 403 (as in effect during fiscal year 
     1994) for fiscal year 1994.
     Such term does not include any expenditures under the State 
     plan approved under part A (as so in effect) on behalf of 
     individuals covered by

[[Page S8697]]

     a tribal family assistance plan approved under section 412, 
     as determined by the Secretary.
       ``(iv) Expenditures by the state.--The term `expenditures 
     by the State' does not include--

       ``(I) any expenditures from amounts made available by the 
     Federal Government;
       ``(II) State funds expended for the medicaid program under 
     title XV or XIX; or
       ``(III) any State funds which are used to match Federal 
     funds or are expended as a condition of receiving Federal 
     funds under Federal programs other than under this part.

       ``(C) Applicable percentage reduced for high performance 
     states.--
       ``(i) Determination of high performance states.--The 
     Secretary shall use the formula developed under section 
     403(a)(4)(C) to assign a score to each eligible State that 
     represents the performance of the State program funded under 
     this part for each fiscal year, and shall prescribe a 
     performance threshold which the Secretary shall use to 
     determine whether to reduce the applicable percentage with 
     respect to any eligible State for a fiscal year.
       ``(ii) Reduction proportional to performance.--The 
     Secretary shall reduce the applicable percentage for a fiscal 
     year with respect to each eligible State by an amount which 
     is directly proportional to the amount (if any) by which the 
     score assigned to the State under clause (i) for the 
     immediately preceding fiscal year exceeds the performance 
     threshold prescribed under clause (i) for such preceding 
     fiscal year, subject to clause (iii).
       ``(iii) Limitation on reduction.--The applicable percentage 
     for a fiscal year with respect to a State may not be reduced 
     by more than 8 percentage points under this subparagraph.
       ``(8) Substantial noncompliance of state child support 
     enforcement program with requirements of part d.--
       ``(A) In general.--If a State program operated under part D 
     is found as a result of a review conducted under section 
     452(a)(4) not to have complied substantially with the 
     requirements of such part for any quarter, and the Secretary 
     determines that the program is not complying substantially 
     with such requirements at the time the finding is made, the 
     Secretary shall reduce the grant payable to the State under 
     section 403(a)(1) for the quarter and each subsequent quarter 
     that ends before the 1st quarter throughout which the program 
     is found to be in substantial compliance with such 
     requirements by--
       ``(i) not less than 1 nor more than 2 percent;
       ``(ii) not less than 2 nor more than 3 percent, if the 
     finding is the 2nd consecutive such finding made as a result 
     of such a review; or
       ``(iii) not less than 3 nor more than 5 percent, if the 
     finding is the 3rd or a subsequent consecutive such finding 
     made as a result of such a review.
       ``(B) Disregard of noncompliance which is of a technical 
     nature.--For purposes of subparagraph (A) and section 
     452(a)(4), a State which is not in full compliance with the 
     requirements of this part shall be determined to be in 
     substantial compliance with such requirements only if the 
     Secretary determines that any noncompliance with such 
     requirements is of a technical nature which does not 
     adversely affect the performance of the State's program 
     operated under part D.
       ``(9) Failure of state receiving amounts from contingency 
     fund to maintain 100 percent of historic effort.--If, at the 
     end of any fiscal year during which amounts from the 
     Contingency Fund for State Welfare Programs have been paid to 
     a State, the Secretary finds that the expenditures under the 
     State program funded under this part for the fiscal year are 
     less than 100 percent of historic State expenditures (as 
     defined in paragraph (7)(B)(iii) of this subsection), the 
     Secretary shall reduce the grant payable to the State under 
     section 403(a)(1) for the immediately succeeding fiscal year 
     by the total of the amounts so paid to the State.
       ``(10) Failure to comply with provisions of this part or 
     the state plan.--If, after reasonable notice and opportunity 
     for hearing, the Secretary determines that during a fiscal 
     year a State has not substantially complied with any 
     provision of this part or of the State plan, the Secretary 
     shall, if a preceding paragraph of this subsection does not 
     apply to such noncompliance, reduce the grant payable to the 
     State under section 403(a)(1) for the immediately succeeding 
     fiscal year by an amount equal to not more than 5 percent of 
     the State family assistance grant, and shall continue to 
     impose such reduction during each succeeding fiscal year 
     until the Secretary determines that the State no longer is in 
     noncompliance with such provision.
       ``(11) Failure to comply with 5-year limit on assistance.--
     If the Secretary determines that during a fiscal year a State 
     has not complied with the provisions of section 408(a)(1)(B), 
     the Secretary shall reduce the grant payable to the State 
     under section 403(a)(1) for the immediately succeeding fiscal 
     year by an amount equal to 5 percent of the State family 
     assistance grant.
       ``(12) Required replacement of grant fund reductions caused 
     by penalties.--If the grant payable to a State under section 
     403(a)(1) for a fiscal year is reduced by reason of this 
     subsection, the State shall, during the immediately 
     succeeding fiscal year, expend under the State program funded 
     under this part an amount equal to the total amount of such 
     reductions.
       ``(b) Reasonable Cause Exception.--
       ``(1) In general.--The Secretary may not impose a penalty 
     on a State under subsection (a) with respect to a requirement 
     if the Secretary determines that the State has reasonable 
     cause for failing to comply with the requirement.
       ``(2) Exception.--Paragraph (1) of this subsection shall 
     not apply to any penalty under paragraph (6) or (7) of 
     subsection (a).
       ``(c) Corrective Compliance Plan.--
       ``(1) In general.--
       ``(A) Notification of violation.--Before imposing a penalty 
     against a State under subsection (a) with respect to a 
     violation of this part, the Secretary shall notify the State 
     of the violation and allow the State the opportunity to enter 
     into a corrective compliance plan in accordance with this 
     subsection which outlines how the State will correct the 
     violation and how the State will insure continuing compliance 
     with this part.
       ``(B) 60-day period to propose a corrective compliance 
     plan.--During the 60-day period that begins on the date the 
     State receives a notice provided under subparagraph (A) with 
     respect to a violation, the State may submit to the Federal 
     Government a corrective compliance plan to correct the 
     violation.
       ``(C) Consultation about modifications.--During the 60-day 
     period that begins with the date the Secretary receives a 
     corrective compliance plan submitted by a State in accordance 
     with subparagraph (B), the Secretary may consult with the 
     State on modifications to the plan.
       ``(D) Acceptance of plan.-- A corrective compliance plan 
     submitted by a State in accordance with subparagraph (B) is 
     deemed to be accepted by the Secretary if the Secretary does 
     not accept or reject the plan during 60-day period that 
     begins on the date the plan is submitted.
       ``(2) Effect of correcting violation.--The Secretary may 
     not impose any penalty under subsection (a) with respect to 
     any violation covered by a State corrective compliance plan 
     accepted by the Secretary if the State corrects the violation 
     pursuant to the plan.
       ``(3) Effect of failing to correct violation.--The 
     Secretary shall assess some or all of a penalty imposed on a 
     State under subsection (a) with respect to a violation if the 
     State does not, in a timely manner, correct the violation 
     pursuant to a State corrective compliance plan accepted by 
     the Secretary.
       ``(4) Inapplicability to failure to timely repay a federal 
     loan fund for a state welfare program.--This subsection shall 
     not apply to the imposition of a penalty against a State 
     under subsection (a)(6).
       ``(d) Limitation on Amount of Penalty.--
       ``(1) In general.--In imposing the penalties described in 
     subsection (a), the Secretary shall not reduce any quarterly 
     payment to a State by more than 25 percent.
       ``(2) Carryforward of unrecovered penalties.--To the extent 
     that paragraph (1) of this subsection prevents the Secretary 
     from recovering during a fiscal year the full amount of 
     penalties imposed on a State under subsection (a) of this 
     section for a prior fiscal year, the Secretary shall apply 
     any remaining amount of such penalties to the grant payable 
     to the State under section 403(a)(1) for the immediately 
     succeeding fiscal year.

     ``SEC. 410. APPEAL OF ADVERSE DECISION.

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

[[Page S8698]]

     706(2) of title 5, United States Code. The review shall be on 
     the basis of the documents and supporting data submitted to 
     the Board.

     ``SEC. 411. DATA COLLECTION AND REPORTING.

       ``(a) Quarterly Reports by States.--
       ``(1) General reporting requirement.--
       ``(A) Contents of report.--Each eligible State shall 
     collect on a monthly basis, and report to the Secretary on a 
     quarterly basis, the following disaggregated case record 
     information on the families receiving assistance under the 
     State program funded under this part:
       ``(i) The county of residence of the family.
       ``(ii) Whether a child receiving such assistance or an 
     adult in the family is disabled.
       ``(iii) The ages of the members of such families.
       ``(iv) The number of individuals in the family, and the 
     relation of each family member to the youngest child in the 
     family.
       ``(v) The employment status and earnings of the employed 
     adult in the family.
       ``(vi) The marital status of the adults in the family, 
     including whether such adults have never married, are 
     widowed, or are divorced.
       ``(vii) The race and educational status of each adult in 
     the family.
       ``(viii) The race and educational status of each child in 
     the family.
       ``(ix) Whether the family received subsidized housing, 
     medical assistance under the State plan under title XV or the 
     State plan approved under title XIX, food stamps, or 
     subsidized child care, and if the latter 2, the amount 
     received.
       ``(x) The number of months that the family has received 
     each type of assistance under the program.
       ``(xi) If the adults participated in, and the number of 
     hours per week of participation in, the following activities:

       ``(I) Education.
       ``(II) Subsidized private sector employment.
       ``(III) Unsubsidized employment.
       ``(IV) Public sector employment, work experience, or 
     community service.
       ``(V) Job search.
       ``(VI) Job skills training or on-the-job training.
       ``(VII) Vocational education.

       ``(xii) Information necessary to calculate participation 
     rates under section 407.
       ``(xiii) The type and amount of assistance received under 
     the program, including the amount of and reason for any 
     reduction of assistance (including sanctions).
       ``(xiv) Any amount of unearned income received by any 
     member of the family.
       ``(xv) The citizenship of the members of the family.
       ``(xvi) From a sample of closed cases, whether the family 
     left the program, and if so, whether the family left due to--

       ``(I) employment;
       ``(II) marriage;
       ``(III) the prohibition set forth in section 408(a)(8);
       ``(IV) sanction; or
       ``(V) State policy.

       ``(B) Use of estimates.--
       ``(i) Authority.--A State may comply with subparagraph (A) 
     by submitting an estimate which is obtained through the use 
     of scientifically acceptable sampling methods approved by the 
     Secretary.
       ``(ii) Sampling and other methods.--The Secretary shall 
     provide the States with such case sampling plans and data 
     collection procedures as the Secretary deems necessary to 
     produce statistically valid estimates of the performance of 
     State programs funded under this part. The Secretary may 
     develop and implement procedures for verifying the quality of 
     data submitted by the States.
       ``(2) Report on use of federal funds to cover 
     administrative costs and overhead.--The report required by 
     paragraph (1) for a fiscal quarter shall include a statement 
     of the percentage of the funds paid to the State under this 
     part for the quarter that are used to cover administrative 
     costs or overhead.
       ``(3) Report on state expenditures on programs for needy 
     families.--The report required by paragraph (1) for a fiscal 
     quarter shall include a statement of the total amount 
     expended by the State during the quarter on programs for 
     needy families.
       ``(4) Report on noncustodial parents participating in work 
     activities.--The report required by paragraph (1) for a 
     fiscal quarter shall include the number of noncustodial 
     parents in the State who participated in work activities (as 
     defined in section 407(d)) during the quarter.
       ``(5) Report on transitional services.--The report required 
     by paragraph (1) for a fiscal quarter shall include the total 
     amount expended by the State during the quarter to provide 
     transitional services to a family that has ceased to receive 
     assistance under this part because of employment, along with 
     a description of such services.
       ``(6) Regulations.--The Secretary shall prescribe such 
     regulations as may be necessary to define the data elements 
     with respect to which reports are required by this 
     subsection.
       ``(b) Annual Reports to the Congress by the Secretary.--Not 
     later than 6 months after the end of fiscal year 1997, and 
     each fiscal year thereafter, the Secretary shall transmit to 
     the Congress a report describing--
       ``(1) whether the States are meeting--
       ``(A) the participation rates described in section 407(a); 
     and
       ``(B) the objectives of--
       ``(i) increasing employment and earnings of needy families, 
     and child support collections; and
       ``(ii) decreasing out-of-wedlock pregnancies and child 
     poverty;
       ``(2) the demographic and financial characteristics of 
     families applying for assistance, families receiving 
     assistance, and families that become ineligible to receive 
     assistance;
       ``(3) the characteristics of each State program funded 
     under this part; and
       ``(4) the trends in employment and earnings of needy 
     families with minor children living at home.

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

       ``(a) Grants for Indian Tribes.--
       ``(1) Tribal family assistance grant.--
       ``(A) In general.--For each of fiscal years 1997, 1998, 
     1999, 2000, and 2001, the Secretary shall pay to each Indian 
     tribe that has an approved tribal family assistance plan a 
     tribal family assistance grant for the fiscal year in an 
     amount equal to the amount determined under subparagraph (B), 
     and shall reduce the grant payable under section 403(a)(1) to 
     any State in which lies the service area or areas of the 
     Indian tribe by that portion of the amount so determined that 
     is attributable to expenditures by the State.
       ``(B) Amount determined.--
       ``(i) In general.--The amount determined under this 
     subparagraph is an amount equal to the total amount of the 
     Federal payments to a State or States under section 403 (as 
     in effect during such fiscal year) for fiscal year 1994 
     attributable to expenditures (other than child care 
     expenditures) by the State or States under parts A and F (as 
     so in effect) for fiscal year 1994 for Indian families 
     residing in the service area or areas identified by the 
     Indian tribe pursuant to subsection (b)(1)(C) of this 
     section.
       ``(ii) Use of state submitted data.--

       ``(I) In general.--The Secretary shall use State submitted 
     data to make each determination under clause (i).
       ``(II) Disagreement with determination.--If an Indian tribe 
     or tribal organization disagrees with State submitted data 
     described under subclause (I), the Indian tribe or tribal 
     organization may submit to the Secretary such additional 
     information as may be relevant to making the determination 
     under clause (i) and the Secretary may consider such 
     information before making such determination.

       ``(2) Grants for indian tribes that received jobs funds.--
       ``(A) In general.--The Secretary shall pay to each eligible 
     Indian tribe for each of fiscal years 1996, 1997, 1998, 1999, 
     2000, and 2001 a grant in an amount equal to the amount 
     received by the Indian tribe in fiscal year 1994 under 
     section 482(i) (as in effect during fiscal year 1994).
       ``(B) Eligible indian tribe.--For purposes of subparagraph 
     (A), the term `eligible Indian tribe' means an Indian tribe 
     or Alaska Native organization that conducted a job 
     opportunities and basic skills training program in fiscal 
     year 1995 under section 482(i) (as in effect during fiscal 
     year 1995).
       ``(C) Use of grant.--Each Indian tribe to which a grant is 
     made under this paragraph shall use the grant for the purpose 
     of operating a program to make work activities available to 
     members of the Indian tribe.
       ``(D) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated $7,638,474 for each fiscal year specified in 
     subparagraph (A) for grants under subparagraph (A).
       ``(b) 3-Year Tribal Family Assistance Plan.--
       ``(1) In general.--Any Indian tribe that desires to receive 
     a tribal family assistance grant shall submit to the 
     Secretary a 3-year tribal family assistance plan that--
       ``(A) outlines the Indian tribe's approach to providing 
     welfare-related services for the 3-year period, consistent 
     with this section;
       ``(B) specifies whether the welfare-related services 
     provided under the plan will be provided by the Indian tribe 
     or through agreements, contracts, or compacts with 
     intertribal consortia, States, or other entities;
       ``(C) identifies the population and service area or areas 
     to be served by such plan;
       ``(D) provides that a family receiving assistance under the 
     plan may not receive duplicative assistance from other State 
     or tribal programs funded under this part;
       ``(E) identifies the employment opportunities in or near 
     the service area or areas of the Indian tribe and the manner 
     in which the Indian tribe will cooperate and participate in 
     enhancing such opportunities for recipients of assistance 
     under the plan consistent with any applicable State 
     standards; and
       ``(F) applies the fiscal accountability provisions of 
     section 5(f)(1) of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450c(f)(1)), relating to 
     the submission of a single-agency audit report required by 
     chapter 75 of title 31, United States Code.
       ``(2) Approval.--The Secretary shall approve each tribal 
     family assistance plan submitted in accordance with paragraph 
     (1).
       ``(3) Consortium of tribes.--Nothing in this section shall 
     preclude the development and submission of a single tribal 
     family assistance plan by the participating Indian tribes of 
     an intertribal consortium.
       ``(c) Minimum Work Participation Requirements and Time 
     Limits.--The Secretary, with the participation of Indian 
     tribes, shall establish for each Indian tribe receiving a 
     grant under this section minimum work participation 
     requirements, appropriate time limits for receipt of welfare-

[[Page S8699]]

     related services under the grant, and penalties against 
     individuals--
       ``(1) consistent with the purposes of this section;
       ``(2) consistent with the economic conditions and resources 
     available to each tribe; and
       ``(3) similar to comparable provisions in section 407(d).
       ``(d) Emergency Assistance.--Nothing in this section shall 
     preclude an Indian tribe from seeking emergency assistance 
     from any Federal loan program or emergency fund.
       ``(e) Accountability.--Nothing in this section shall be 
     construed to limit the ability of the Secretary to maintain 
     program funding accountability consistent with--
       ``(1) generally accepted accounting principles; and
       ``(2) the requirements of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450 et seq.).
       ``(f) Penalties.--
       ``(1) Subsections (a)(1), (a)(6), and (b) of section 409, 
     shall apply to an Indian tribe with an approved tribal 
     assistance plan in the same manner as such subsections apply 
     to a State.
       ``(2) Section 409(a)(3) shall apply to an Indian tribe with 
     an approved tribal assistance plan by substituting `meet 
     minimum work participation requirements established under 
     section 412(c)' for `comply with section 407(a)'.
       ``(g) Data Collection and Reporting.--Section 411 shall 
     apply to an Indian tribe with an approved tribal family 
     assistance plan.
       ``(h) Special Rule for Indian Tribes in Alaska.--
       ``(1) In general.--Notwithstanding any other provision of 
     this section, and except as provided in paragraph (2), an 
     Indian tribe in the State of Alaska that receives a tribal 
     family assistance grant under this section shall use the 
     grant to operate a program in accordance with requirements 
     comparable to the requirements applicable to the program of 
     the State of Alaska funded under this part. Comparability of 
     programs shall be established on the basis of program 
     criteria developed by the Secretary in consultation with the 
     State of Alaska and such Indian tribes.
       ``(2) Waiver.--An Indian tribe described in paragraph (1) 
     may apply to the appropriate State authority to receive a 
     waiver of the requirement of paragraph (1).

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

       ``(a) Research.--The Secretary shall conduct research on 
     the benefits, effects, and costs of operating different State 
     programs funded under this part, including time limits 
     relating to eligibility for assistance. The research shall 
     include studies on the effects of different programs and the 
     operation of such programs on welfare dependency, 
     illegitimacy, teen pregnancy, employment rates, child well-
     being, and any other area the Secretary deems appropriate. 
     The Secretary shall also conduct research on the costs and 
     benefits of State activities under section 409.
       ``(b) Development and Evaluation of Innovative Approaches 
     To Reducing Welfare Dependency and Increasing Child Well-
     Being.--
       ``(1) In general.--The Secretary may assist States in 
     developing, and shall evaluate, innovative approaches for 
     reducing welfare dependency and increasing the well-being of 
     minor children living at home with respect to recipients of 
     assistance under programs funded under this part. The 
     Secretary may provide funds for training and technical 
     assistance to carry out the approaches developed pursuant to 
     this paragraph.
       ``(2) Evaluations.--In performing the evaluations under 
     paragraph (1), the Secretary shall, to the maximum extent 
     feasible, use random assignment as an evaluation methodology.
       ``(c) Dissemination of Information.--The Secretary shall 
     develop innovative methods of disseminating information on 
     any research, evaluations, and studies conducted under this 
     section, including the facilitation of the sharing of 
     information and best practices among States and localities 
     through the use of computers and other technologies.
       ``(d) Annual Ranking of States and Review of Most and Least 
     Successful Work Programs.--
       ``(1) Annual ranking of states.--The Secretary shall rank 
     annually the States to which grants are paid under section 
     403 in the order of their success in placing recipients of 
     assistance under the State program funded under this part 
     into long-term private sector jobs, reducing the overall 
     welfare caseload, and, when a practicable method for 
     calculating this information becomes available, diverting 
     individuals from formally applying to the State program and 
     receiving assistance. In ranking States under this 
     subsection, the Secretary shall take into account the average 
     number of minor children living at home in families in the 
     State that have incomes below the poverty line and the amount 
     of funding provided each State for such families.
       ``(2) Annual review of most and least successful work 
     programs.--The Secretary shall review the programs of the 3 
     States most recently ranked highest under paragraph (1) and 
     the 3 States most recently ranked lowest under paragraph (1) 
     that provide parents with work experience, assistance in 
     finding employment, and other work preparation activities and 
     support services to enable the families of such parents to 
     leave the program and become self-sufficient.
       ``(e) Annual Ranking of States and Review of Issues 
     Relating to Out-of-Wedlock Births.--
       ``(1) Annual ranking of states.--
       ``(A) In general.--The Secretary shall annually rank States 
     to which grants are made under section 403 based on the 
     following ranking factors:
       ``(i) Absolute out-of-wedlock ratios.--The ratio 
     represented by--

       ``(I) the total number of out-of-wedlock births in families 
     receiving assistance under the State program under this part 
     in the State for the most recent fiscal year for which 
     information is available; over
       ``(II) the total number of births in families receiving 
     assistance under the State program under this part in the 
     State for such year.

       ``(ii) Net changes in the out-of-wedlock ratio.--The 
     difference between the ratio described in subparagraph (A)(i) 
     with respect to a State for the most recent fiscal year for 
     which such information is available and the ratio with 
     respect to the State for the immediately preceding year.
       ``(2) Annual review.--The Secretary shall review the 
     programs of the 5 States most recently ranked highest under 
     paragraph (1) and the 5 States most recently ranked the 
     lowest under paragraph (1).
       ``(f) State-Initiated Evaluations.--A State shall be 
     eligible to receive funding to evaluate the State program 
     funded under this part if--
       ``(1) the State submits a proposal to the Secretary for the 
     evaluation;
       ``(2) the Secretary determines that the design and approach 
     of the evaluation is rigorous and is likely to yield 
     information that is credible and will be useful to other 
     States; and
       ``(3) unless otherwise waived by the Secretary, the State 
     contributes to the cost of the evaluation, from non-Federal 
     sources, an amount equal to at least 10 percent of the cost 
     of the evaluation.
       ``(g) Funding of Studies and Demonstrations.--
       ``(1) In general.--Out of any money in the Treasury of the 
     United States not otherwise appropriated, there are 
     appropriated $15,000,000 for each of fiscal years 1998 
     through 2001, for the purpose of paying--
       ``(A) the cost of conducting the research described in 
     subsection (a);
       ``(B) the cost of developing and evaluating innovative 
     approaches for reducing welfare dependency and increasing the 
     well-being of minor children under subsection (b);
       ``(C) the Federal share of any State-initiated study 
     approved under subsection (f); and
       ``(D) an amount determined by the Secretary to be necessary 
     to operate and evaluate demonstration projects, relating to 
     this part, that are in effect or approved under section 1115 
     as of September 30, 1995, and are continued after such date.
       ``(2) Allocation.--Of the amount appropriated under 
     paragraph (1) for a fiscal year--
       ``(A) 50 percent shall be allocated for the purposes 
     described in subparagraphs (A) and (B) of paragraph (1), and
       ``(B) 50 percent shall be allocated for the purposes 
     described in subparagraphs (C) and (D) of paragraph (1).
       ``(3) Demonstrations of innovative strategies.--The 
     Secretary may implement and evaluate demonstrations of 
     innovative and promising strategies which--
       ``(A) provide one-time capital funds to establish, expand, 
     or replicate programs;
       ``(B) test performance-based grant-to-loan financing in 
     which programs meeting performance targets receive grants 
     while programs not meeting such targets repay funding on a 
     prorated basis; and
       ``(C) test strategies in multiple States and types of 
     communities.
       ``(h) Child Poverty Rates.--
       ``(1) In general.--Not later than 90 days after the date of 
     the enactment of this part, and annually thereafter, the 
     chief executive officer of a State shall submit to the 
     Secretary a statement of the child poverty rate in the State 
     as of such date of enactment or the date of such subsequent 
     statements. Such subsequent statements shall include the 
     change in such rate from the previous statement, if any.
       ``(2) Increase in rate.--With respect to a State that 
     submits a statement under paragraph (1) that indicates an 
     increase of 5 percent or more in the child poverty rate of 
     the State from the previous statement as a result of the 
     changes made by the Act, the State shall, not later than 90 
     days after the date of such statement, prepare and submit to 
     the Secretary a corrective action plan in accordance with 
     paragraph (3).
       ``(3) Corrective action plan.--
       ``(A) In general.--A corrective action plan submitted under 
     paragraph (2) shall outline that manner in which the State 
     will reduce the child poverty rate within the State. The plan 
     shall include a description of the actions to be taken by the 
     State under such plan.
       ``(B) Consultation about modifications.--During the 60-day 
     period that begins with the date the Secretary receives the 
     corrective action plan of a State under subparagraph (A), the 
     Secretary may consult with the State on modifications to the 
     plan.
       ``(C) Acceptance of plan.-- A corrective action plan 
     submitted by a State in accordance with subparagraph (A) is 
     deemed to be accepted by the Secretary if the Secretary does 
     not accept or reject the plan during 60-day period that 
     begins on the date the plan is submitted.

[[Page S8700]]

       ``(4) Compliance with plan.--
       ``(A) In general.--A State that submits a corrective action 
     plan under this subsection shall continue to implement such 
     plan until such time as the Secretary makes the determination 
     described in subparagraph (B).
       ``(B) Determination.--A determination described in this 
     subparagraph is a determination that the child poverty rate 
     for the State involved has fallen to, and not exceeded for a 
     period of 2-consecutive years, a rate that is not greater 
     than the rate contained in the most recent statement 
     submitted by the State under paragraph (1) which did not 
     trigger the application of paragraph (2).
       ``(C) Labor surplus area.--With respect to a State that 
     submits a corrective action plan under  paragraph  (2),  such 
      plan  shall  continue to be implemented until the area 
     involved is no longer designated as a Labor Surplus Area.
       ``(5) Methodology.--The Secretary shall promulgate 
     regulations establishing the methodology by which a States 
     shall determine the child poverty rate within such State. 
     Such methodology shall, with respect to a State, take into 
     account factors including the number of children who receive 
     free or reduced-price lunches, the number of food stamp 
     households, and the county by county estimates of children in 
     poverty as determined by the Census Bureau.

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

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

     ``SEC. 415. WAIVERS.

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

     ``SEC. 416. ADMINISTRATION.

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

     ``SEC. 417. LIMITATION ON FEDERAL AUTHORITY.

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

     ``SEC. 419. DEFINITIONS.

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

[[Page S8701]]

       (b) Grants to Outlying Areas.--Section 1108 (42 U.S.C. 
     1308) is amended--
       (1) by redesignating subsection (c) as subsection (g);
       (2) by striking all that precedes subsection (c) and 
     inserting the following:

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

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

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

       (a) In General.--
       (1) State options.--A State may--
       (A) administer and provide services under the programs 
     described in subparagraphs (A) and (B)(i) of paragraph (2) 
     through contracts with charitable, religious, or private 
     organizations; and
       (B) provide beneficiaries of assistance under the programs 
     described in subparagraphs (A) and (B)(ii) of paragraph (2) 
     with certificates, vouchers, or other forms of disbursement 
     which are redeemable with such organizations.
       (2) Programs described.--The programs described in this 
     paragraph are the following programs:
       (A) A State program funded under part A of title IV of the 
     Social Security Act (as amended by section 2103(a) of this 
     Act).
       (B) Any other program established or modified under chapter 
     1 or 2 of this subtitle, that--
       (i) permits contracts with organizations; or
       (ii) permits certificates, vouchers, or other forms of 
     disbursement to be provided to beneficiaries, as a means of 
     providing assistance.
       (b) Religious Organizations.--The purpose of this section 
     is to allow States to contract with religious organizations, 
     or to allow religious organizations to accept certificates, 
     vouchers, or other forms of disbursement under any program 
     described in subsection (a)(2), on the same basis as any 
     other nongovernmental provider without impairing the 
     religious character of such organizations, and without 
     diminishing the religious freedom of beneficiaries of 
     assistance funded under such program.
       (c) Nondiscrimination Against Religious Organizations.--In 
     the event a State exercises its authority under subsection 
     (a), religious organizations are eligible, on the same basis 
     as any other private organization, as contractors to provide 
     assistance, or to accept certificates, vouchers, or other 
     forms of disbursement, under any program described in 
     subsection (a)(2) so long as the programs are implemented 
     consistent with the Establishment Clause of the United States 
     Constitution. Except as provided in subsection (k), neither 
     the Federal Government nor a State receiving funds under such 
     programs shall discriminate against an organization which is 
     or applies to be a contractor to provide assistance, or which 
     accepts certificates, vouchers, or other forms of 
     disbursement, on the basis that the organization has a 
     religious character.
       (d) Religious Character and Freedom.--
       (1) Religious organizations.--A religious organization with 
     a contract described in subsection (a)(1)(A), or which 
     accepts certificates, vouchers, or other forms of 
     disbursement under subsection (a)(1)(B), shall retain its 
     independence from Federal, State, and local governments, 
     including such organization's control over the definition, 
     development, practice, and expression of its religious 
     beliefs.
       (2) Additional safeguards.--Neither the Federal Government 
     nor a State shall require a religious organization to--
       (A) alter its form of internal governance; or
       (B) remove religious art, icons, scripture, or other 
     symbols;
     in order to be eligible to contract to provide assistance, or 
     to accept certificates, vouchers, or other forms of 
     disbursement, funded under a program described in subsection 
     (a)(2).
       (e) Rights of Beneficiaries of Assistance.--
       (1) In general.--If an individual described in paragraph 
     (2) has an objection to the religious character of the 
     organization or institution from which the individual 
     receives, or would receive, assistance funded under any 
     program described in subsection (a)(2), the State in which 
     the individual resides shall provide such individual (if 
     otherwise eligible for such assistance) within a reasonable 
     period of time after the date of such objection with 
     assistance from an alternative provider that is accessible to 
     the individual and the value of which is not less than the 
     value of the assistance which the individual would have 
     received from such organization.
       (2) Individual described.--An individual described in this 
     paragraph is an individual who receives, applies for, or 
     requests to apply for, assistance under a program described 
     in subsection (a)(2).
       (f) Employment Practices.--A religious organization's 
     exemption provided under section 702 of the Civil Rights Act 
     of 1964 (42 U.S.C. 2000e-1a) regarding employment practices 
     shall not be affected by its participation in, or receipt of 
     funds from, programs described in subsection (a)(2).
       (g) Nondiscrimination Against Beneficiaries.--Except as 
     otherwise provided in law, a religious organization shall not 
     discriminate against an individual in regard to rendering 
     assistance funded under any program described in subsection 
     (a)(2) on the basis of religion, a religious belief, or 
     refusal to actively participate in a religious practice.
       (h) Fiscal Accountability.--
       (1) In general.--Except as provided in paragraph (2), any 
     religious organization contracting to provide assistance 
     funded under any program described in subsection (a)(2) shall 
     be subject to the same regulations as other contractors to 
     account in accord with generally accepted auditing principles 
     for the use of such funds provided under such programs.
       (2) Limited audit.--If such organization segregates Federal 
     funds provided under such

[[Page S8702]]

     programs into separate accounts, then only the financial 
     assistance provided with such funds shall be subject to 
     audit.
       (i) Compliance.--Any party which seeks to enforce its 
     rights under this section may assert a civil action for 
     injunctive relief exclusively in an appropriate State court 
     against the entity or agency that allegedly commits such 
     violation.
       (j) Limitations on Use of Funds for Certain Purposes.--No 
     funds provided directly to institutions or organizations to 
     provide services and administer programs under subsection 
     (a)(1)(A) shall be expended for sectarian worship, 
     instruction, or proselytization.
       (k) Preemption.--Nothing in this section shall be construed 
     to preempt any provision of a State constitution or State 
     statute that prohibits or restricts the expenditure of State 
     funds in or by religious organizations.

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

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

     SEC. 2106. REPORT ON DATA PROCESSING.

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

     SEC. 2107. STUDY ON ALTERNATIVE OUTCOMES MEASURES.

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

     SEC. 2108. WELFARE FORMULA FAIRNESS COMMISSION.

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

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

       (a) Amendments to Part D of Title IV.--
       (1) Section 451 (42 U.S.C. 651) is amended by striking 
     ``aid'' and inserting ``assistance under a State program 
     funded''.
       (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is 
     amended--
       (A) by striking ``aid to families with dependent children'' 
     and inserting ``assistance under a State program funded under 
     part A'';
       (B) by striking ``such aid'' and inserting ``such 
     assistance''; and

[[Page S8703]]

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

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

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

[[Page S8704]]

     that the Secretary determines complies with standards 
     established by the Secretary that ensure that the standards 
     under the State program are comparable to or more restrictive 
     than those in effect on June 1, 1995''; and
       (B) in paragraph (6)--
       (i) in subparagraph (A)(ii)--

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

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

     SEC. 2111. CONFORMING AMENDMENTS TO OTHER LAWS.

       (a) Subsection (b) of section 508 of the Unemployment 
     Compensation Amendments of 1976 (42 U.S.C. 603a; Public Law 
     94-566; 90 Stat. 2689) is amended to read as follows:
       ``(b) Provision for Reimbursement of Expenses.--For 
     purposes of section 455 of the Social Security Act, expenses 
     incurred to reimburse State employment offices for furnishing 
     information requested of such offices--
       ``(1) pursuant to the third sentence of section 3(a) of the 
     Act entitled `An Act to provide for the establishment of a 
     national employment system and for cooperation with the 
     States in the promotion of such system, and for other 
     purposes', approved June 6, 1933 (29 U.S.C. 49b(a)), or
       ``(2) by a State or local agency charged with the duty of 
     carrying a State plan for child support approved under part D 
     of title IV of the Social Security Act,
     shall be considered to constitute expenses incurred in the 
     administration of such State plan.''.
       (b) Section 9121 of the Omnibus Budget Reconciliation Act 
     of 1987 (42 U.S.C. 602 note) is repealed.
       (c) Section 9122 of the Omnibus Budget Reconciliation Act 
     of 1987 (42 U.S.C. 602 note) is repealed.
       (d) Section 221 of the Housing and Urban-Rural Recovery Act 
     of 1983 (42 U.S.C. 602 note), relating to treatment under 
     AFDC of certain rental payments for federally assisted 
     housing, is repealed.
       (e) Section 159 of the Tax Equity and Fiscal Responsibility 
     Act of 1982 (42 U.S.C. 602 note) is repealed.
       (f) Section 202(d) of the Social Security Amendments of 
     1967 (81 Stat. 882; 42 U.S.C. 602 note) is repealed.
       (g) Section 903 of the Stewart B. McKinney Homeless 
     Assistance Amendments Act of 1988 (42 U.S.C. 11381 note), 
     relating to demonstration projects to reduce number of AFDC 
     families in welfare hotels, is amended--
       (1) in subsection (a), by striking ``aid to families with 
     dependent children under a State plan approved'' and 
     inserting ``assistance under a State program funded''; and
       (2) in subsection (c), by striking ``aid to families with 
     dependent children in the State under a State plan approved'' 
     and inserting ``assistance in the State under a State program 
     funded''.
       (h) The Higher Education Act of 1965 (20 U.S.C. 1001 et 
     seq.) is amended--
       (1) in section 404C(c)(3) (20 U.S.C. 1070a-23(c)(3)), by 
     striking ``(Aid to Families with Dependent Children)''; and
       (2) in section 480(b)(2) (20 U.S.C. 1087vv(b)(2)), by 
     striking ``aid to families with dependent children under a 
     State plan approved'' and inserting ``assistance under a 
     State program funded''.
       (i) The Carl D. Perkins Vocational and Applied Technology 
     Education Act (20 U.S.C. 2301 et seq.) is amended--
       (1) in section 231(d)(3)(A)(ii) (20 U.S.C. 
     2341(d)(3)(A)(ii)), by striking ``The program for aid to 
     dependent children'' and inserting ``The State program 
     funded'';
       (2) in section 232(b)(2)(B) (20 U.S.C. 2341a(b)(2)(B)), by 
     striking ``the program for aid to families with dependent 
     children'' and inserting ``the State program funded''; and
       (3) in section 521(14)(B)(iii) (20 U.S.C. 
     2471(14)(B)(iii)), by striking ``the program for aid to 
     families with dependent children'' and inserting ``the State 
     program funded''.
       (j) The Elementary and Secondary Education Act of 1965 (20 
     U.S.C. 2701 et seq.) is amended--
       (1) in section 1113(a)(5) (20 U.S.C. 6313(a)(5)), by 
     striking ``Aid to Families with Dependent Children program'' 
     and inserting ``State program funded under part A of title IV 
     of the Social Security Act'';
       (2) in section 1124(c)(5) (20 U.S.C. 6333(c)(5)), by 
     striking ``the program of aid to families with dependent 
     children under a State plan approved under'' and inserting 
     ``a State program funded under part A of''; and
       (3) in section 5203(b)(2) (20 U.S.C. 7233(b)(2))--
       (A) in subparagraph (A)(xi), by striking ``Aid to Families 
     with Dependent Children benefits'' and inserting ``assistance 
     under a State program funded under part A of title IV of the 
     Social Security Act''; and
       (B) in subparagraph (B)(viii), by striking ``Aid to 
     Families with Dependent Children'' and inserting ``assistance 
     under the State program funded under part A of title IV of 
     the Social Security Act''.
       (k) The 4th proviso of chapter VII of title I of Public Law 
     99-88 (25 U.S.C. 13d-1) is amended to read as follows: 
     ``Provided further, That general assistance payments made by 
     the Bureau of Indian Affairs shall be made--
       ``(1) after April 29, 1985, and before October 1, 1995, on 
     the basis of Aid to Families with Dependent Children (AFDC) 
     standards of need; and
       ``(2) on and after October 1, 1995, on the basis of 
     standards of need established under the State program funded 
     under part A of title IV of the Social Security Act,
     except that where a State ratably reduces its AFDC or State 
     program payments, the Bureau shall reduce general assistance 
     payments in such State by the same percentage as the State 
     has reduced the AFDC or State program payment.''.
       (l) The Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) 
     is amended--
       (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by striking 
     all that follows ``agency as'' and inserting ``being eligible 
     for financial assistance under part A of title IV of the 
     Social Security Act and as having continually received such 
     financial assistance during the 90-day period which 
     immediately precedes the date on which such individual is 
     hired by the employer.'';
       (2) in section 3304(a)(16) (26 U.S.C. 3304(a)(16)), by 
     striking ``eligibility for aid or services,'' and all that 
     follows through ``children approved'' and inserting 
     ``eligibility for assistance, or the amount of such 
     assistance, under a State program funded'';
       (3) in section 6103(l)(7)(D)(i) (26 U.S.C. 
     6103(l)(7)(D)(i)), by striking ``aid to families with 
     dependent children provided under a State plan approved'' and 
     inserting ``a State program funded'';
       (4) in section 6103(l)(10) (26 U.S.C. 6103(l)(10))--
       (A) by striking ``(c) or (d)'' each place it appears and 
     inserting ``(c), (d), or (e)''; and
       (B) by adding at the end of subparagraph (B) the following 
     new sentence: ``Any return information disclosed with respect 
     to section 6402(e) shall only be disclosed to officers and 
     employees of the State agency requesting such information.'';
       (5) in section 6103(p)(4) (26 U.S.C. 6103(p)(4)), in the 
     matter preceding subparagraph (A)--
       (A) by striking ``(5), (10)'' and inserting ``(5)''; and
       (B) by striking ``(9), or (12)'' and inserting ``(9), (10), 
     or (12)'';
       (6) in section 6334(a)(11)(A) (26 U.S.C. 6334(a)(11)(A)), 
     by striking ``(relating to aid to families with dependent 
     children)'';
       (7) in section 6402 (26 U.S.C. 6402)--
       (A) in subsection (a), by striking ``(c) and (d)'' and 
     inserting ``(c), (d), and (e)'';
       (B) by redesignating subsections (e) through (i) as 
     subsections (f) through (j), respectively; and
       (C) by inserting after subsection (d) the following:
       ``(e) Collection of Overpayments Under Title IV-A of the 
     Social Security Act.--The amount of any overpayment to be 
     refunded to the person making the overpayment shall be 
     reduced (after reductions pursuant to subsections (c) and 
     (d), but before a credit against future liability for an 
     internal revenue tax) in accordance with section 405(e) of 
     the Social Security Act (concerning recovery of overpayments 
     to individuals under State plans approved under part A of 
     title IV of such Act).''; and
       (8) in section 7523(b)(3)(C) (26 U.S.C. 7523(b)(3)(C)), by 
     striking ``aid to families with dependent children'' and 
     inserting ``assistance under a State program funded under 
     part A of title IV of the Social Security Act''.
       (m) Section 3(b) of the Wagner-Peyser Act (29 U.S.C. 
     49b(b)) is amended by striking ``State plan approved under 
     part A of title IV'' and inserting ``State program funded 
     under part A of title IV''.
       (n) The Job Training Partnership Act (29 U.S.C. 1501 et 
     seq.) is amended--
       (1) in section 4(29)(A)(i) (29 U.S.C. 1503(29)(A)(i)), by 
     striking ``(42 U.S.C. 601 et seq.)'';
       (2) in section 106(b)(6)(C) (29 U.S.C. 1516(b)(6)(C)), by 
     striking ``State aid to families with dependent children 
     records,'' and inserting ``records collected under the State

[[Page S8705]]

     program funded under part A of title IV of the Social 
     Security Act,'';
       (3) in section 121(b)(2) (29 U.S.C. 1531(b)(2))--
       (A) by striking ``the JOBS program'' and inserting ``the 
     work activities required under title IV of the Social 
     Security Act''; and
       (B) by striking the second sentence;
       (4) in section 123(c) (29 U.S.C. 1533(c))--
       (A) in paragraph (1)(E), by repealing clause (vi); and
       (B) in paragraph (2)(D), by repealing clause (v);
       (5) in section 203(b)(3) (29 U.S.C. 1603(b)(3)), by 
     striking ``, including recipients under the JOBS program'';
       (6) in subparagraphs (A) and (B) of section 204(a)(1) (29 
     U.S.C. 1604(a)(1) (A) and (B)), by striking ``(such as the 
     JOBS program)'' each place it appears;
       (7) in section 205(a) (29 U.S.C. 1605(a)), by striking 
     paragraph (4) and inserting the following:
       ``(4) the portions of title IV of the Social Security Act 
     relating to work activities;'';
       (8) in section 253 (29 U.S.C. 1632)--
       (A) in subsection (b)(2), by repealing subparagraph (C); 
     and
       (B) in paragraphs (1)(B) and (2)(B) of subsection (c), by 
     striking ``the JOBS program or'' each place it appears;
       (9) in section 264 (29 U.S.C. 1644)--
       (A) in subparagraphs (A) and (B) of subsection (b)(1), by 
     striking ``(such as the JOBS program)'' each place it 
     appears; and
       (B) in subparagraphs (A) and (B) of subsection (d)(3), by 
     striking ``and the JOBS program'' each place it appears;
       (10) in section 265(b) (29 U.S.C. 1645(b)), by striking 
     paragraph (6) and inserting the following:
       ``(6) the portion of title IV of the Social Security Act 
     relating to work activities;'';
       (11) in the second sentence of section 429(e) (29 U.S.C. 
     1699(e)), by striking ``and shall be in an amount that does 
     not exceed the maximum amount that may be provided by the 
     State pursuant to section 402(g)(1)(C) of the Social Security 
     Act (42 U.S.C. 602(g)(1)(C))'';
       (12) in section 454(c) (29 U.S.C. 1734(c)), by striking 
     ``JOBS and'';
       (13) in section 455(b) (29 U.S.C. 1735(b)), by striking 
     ``the JOBS program,'';
       (14) in section 501(1) (29 U.S.C. 1791(1)), by striking 
     ``aid to families with dependent children under part A of 
     title IV of the Social Security Act (42 U.S.C. 601 et seq.)'' 
     and inserting ``assistance under the State program funded 
     under part A of title IV of the Social Security Act'';
       (15) in section 506(1)(A) (29 U.S.C. 1791e(1)(A)), by 
     striking ``aid to families with dependent children'' and 
     inserting ``assistance under the State program funded'';
       (16) in section 508(a)(2)(A) (29 U.S.C. 1791g(a)(2)(A)), by 
     striking ``aid to families with dependent children'' and 
     inserting ``assistance under the State program funded''; and
       (17) in section 701(b)(2)(A) (29 U.S.C. 1792(b)(2)(A))--
       (A) in clause (v), by striking the semicolon and inserting 
     ``; and''; and
       (B) by striking clause (vi).
       (o) Section 3803(c)(2)(C)(iv) of title 31, United States 
     Code, is amended to read as follows:
       ``(iv) assistance under a State program funded under part A 
     of title IV of the Social Security Act;''.
       (p) Section 2605(b)(2)(A)(i) of the Low-Income Home Energy 
     Assistance Act of 1981 (42 U.S.C. 8624(b)(2)(A)(i)) is 
     amended to read as follows:
       ``(i) assistance under the State program funded under part 
     A of title IV of the Social Security Act;''.
       (q) Section 303(f)(2) of the Family Support Act of 1988 (42 
     U.S.C. 602 note) is amended--
       (1) by striking ``(A)''; and
       (2) by striking subparagraphs (B) and (C).
       (r) The Balanced Budget and Emergency Deficit Control Act 
     of 1985 (2 U.S.C. 900 et seq.) is amended--
       (1) in the first section 255(h) (2 U.S.C. 905(h)), by 
     striking ``Aid to families with dependent children (75-0412-
     0-1-609);'' and inserting ``Block grants to States for 
     temporary assistance for needy families;''; and
       (2) in section 256 (2 U.S.C. 906)--
       (A) by striking subsection (k); and
       (B) by redesignating subsection (l) as subsection (k).
       (s) The Immigration and Nationality Act (8 U.S.C. 1101 et 
     seq.) is amended--
       (1) in section 210(f) (8 U.S.C. 1160(f)), by striking ``aid 
     under a State plan approved under'' each place it appears and 
     inserting ``assistance under a State program funded under'';
       (2) in section 245A(h) (8 U.S.C. 1255a(h))--
       (A) in paragraph (1)(A)(i), by striking ``program of aid to 
     families with dependent children'' and inserting ``State 
     program of assistance''; and
       (B) in paragraph (2)(B), by striking ``aid to families with 
     dependent children'' and inserting ``assistance under a State 
     program funded under part A of title IV of the Social 
     Security Act''; and
       (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)), by striking 
     ``State plan approved'' and inserting ``State program 
     funded''.
       (t) Section 640(a)(4)(B)(i) of the Head Start Act (42 
     U.S.C. 9835(a)(4)(B)(i)) is amended by striking ``program of 
     aid to families with dependent children under a State plan 
     approved'' and inserting ``State program of assistance 
     funded''.
       (u) Section 9 of the Act of April 19, 1950 (64 Stat. 47, 
     chapter 92; 25 U.S.C. 639) is repealed.
       (v) Subparagraph (E) of section 213(d)(6) of the School-To-
     Work Opportunities Act of 1994 (20 U.S.C. 6143(d)(6)) is 
     amended to read as follows:
       ``(E) part A of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.) relating to work activities;''.
       (w) Section 552a(a)(8)(B)(iv)(III) of title 5, United 
     States Code, is amended by striking ``section 464 or 1137 of 
     the Social Security Act'' and inserting ``section 404(e), 
     464, or 1137 of the Social Security Act''.

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

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

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

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

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

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

     SEC. 2115. EFFECTIVE DATE; TRANSITION RULE.

       (a) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     chapter, this chapter and the amendments made by this chapter 
     shall take effect on July 1, 1997.
       (2) Delayed effective date for certain provisions.--
     Notwithstanding any other provision of this section, 
     paragraphs (2), (3), (4),

[[Page S8706]]

     (5), (8), and (10) of section 409(a) and section 411(a) of 
     the Social Security Act (as added by the amendments made by 
     section 2103(a) of this Act) shall not take effect with 
     respect to a State until, and shall apply only with respect 
     to conduct that occurs on or after, the later of--
       (A) July 1, 1997; or
       (B) the date that is 6 months after the date the Secretary 
     of Health and Human Services receives from the State a plan 
     described in section 402(a) of the Social Security Act (as 
     added by such amendment).
       (3) Elimination of child care programs.--The amendments 
     made by section 2103(d) shall take effect on October 1, 1996.
       (4) Definitions applicable to new child care entitlement.--
     Sections 403(a)(1)(C), 403(a)(1)(D), and 419(4) of the Social 
     Security Act, as added by the amendments made by section 
     2103(a) of this Act, shall take effect on October 1, 1996.
       (b) Transition Rules.--Effective on the date of the 
     enactment of this Act:
       (1) State option to accelerate effective date.--
       (A) In general.--If the Secretary of Health and Human 
     Services receives from a State a plan described in section 
     402(a) of the Social Security Act (as added by the amendment 
     made by section 2103(a)(1) of this Act), then--
       (i) on and after the date of such receipt--

       (I) except as provided in clause (ii), this chapter and the 
     amendments made by this chapter (other than by section 
     2103(d) of this Act) shall apply with respect to the State; 
     and
       (II) the State shall be considered an eligible State for 
     purposes of part A of title IV of the Social Security Act (as 
     in effect pursuant to the amendments made by such section 
     2103(a)); and

       (ii) during the period that begins on the date of such 
     receipt and ends on June 30, 1997, there shall remain in 
     effect with respect to the State--

       (I) section 403(h) of the Social Security Act (as in effect 
     on September 30, 1995); and
       (II) all State reporting requirements under parts A and F 
     of title IV of the Social Security Act (as in effect on 
     September 30, 1995), modified by the Secretary as 
     appropriate, taking into account the State program under part 
     A of title IV of the Social Security Act (as in effect 
     pursuant to the amendments made by such section 2103(a)).

       (B) Limitations on federal obligations.--
       (i) Under afdc program.--The total obligations of the 
     Federal Government to a State under part A of title IV of the 
     Social Security Act (as in effect on September 30, 1995) with 
     respect to expenditures in fiscal year 1997 shall not exceed 
     an amount equal to the State family assistance grant.
       (ii) Under temporary family assistance program.--
     Notwithstanding section 403(a)(1) of the Social Security Act 
     (as in effect pursuant to the amendments made by section 
     2103(a) of this Act), the total obligations of the Federal 
     Government to a State under such section 403(a)(1)--

       (I) for fiscal year 1996, shall be an amount equal to--

       (aa) the State family assistance grant; multiplied by
       (bb) \1/366\ of the number of days during the period that 
     begins on the date the Secretary of Health and Human Services 
     first receives from the State a plan described in section 
     402(a) of the Social Security Act (as added by the amendment 
     made by section 2103(a)(1) of this Act) and ends on September 
     30, 1996; and

       (II) for fiscal year 1997, shall be an amount equal to the 
     lesser of--

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

     SEC. 2116. COMMUNITY STEERING COMMITTEES DEMONSTRATION 
                   PROJECTS.

       (a) In General.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     enter into agreements with not more than 5 States that submit 
     an application under this section, in such form and such 
     manner as the Secretary may specify, for the purpose of 
     conducting a demonstration project described in subsection 
     (b).
       (b) Description of Project.--
       (1) Establishment.--A demonstration project conducted under 
     this section shall establish within a State in each 
     participating county a Community Steering Committee that 
     shall be designed to help recipients of temporary assistance 
     to needy families under a State program under part A of title 
     IV of the Social Security Act who are parents move into the 
     non-subsidized workforce and to develop a holistic approach 
     to the development needs of such recipient's family.
       (2) Membership.--A Community Steering Committee shall 
     consist of local educators, business representatives, and 
     social service providers.
       (3) Goals and duties.--
       (A) Goals.--The goals of a Community Steering Committee 
     are--
       (i) to ensure that recipients of temporary assistance to 
     needy families who are parents obtain and retain unsubsidized 
     employment; and
       (ii) to reduce the incidence of intergenerational receipt 
     of welfare assistance by addressing the needs of children of 
     recipients of temporary assistance to needy families.
       (B) Duties.--A Community Steering Committee shall--
       (i) identify and create unsubsidized employment positions 
     for recipients of temporary assistance to needy families;
       (ii) propose and implement solutions to barriers to 
     unsubsidized employment of recipients of temporary assistance 
     to needy families;
       (iii) assess the needs of children of recipients of 
     temporary assistance to needy families; and
       (iv) provide services that are designed to ensure that 
     children of recipients of temporary assistance to needy 
     families enter school ready to learn and that, once enrolled, 
     such children stay in school.
       (C) Primary responsibility.--A primary responsibility of a 
     Community Steering Committee shall be to work on an ongoing

[[Page S8707]]

     basis with parents who are recipients of temporary assistance 
     to needy families and who have obtained nonsubsidized 
     employment in order to ensure that such recipients retain 
     their employment. Activities to carry out this responsibility 
     may include--
       (i) counseling;
       (ii) emergency day care;
       (iii) sick day care;
       (iv) transportation;
       (v) provision of clothing;
       (vi) housing assistance; or
       (vii) any other assistance that may be necessary on an 
     emergency and temporary basis to ensure that such parents can 
     manage the responsibility of being employed and the demands 
     of having a family.
       (D) Follow-up services for children.--A Community Steering 
     Committee may provide special follow-up services for children 
     of recipients of temporary assistance to needy families that 
     are designed to ensure that the children reach their fullest 
     potential and do not, as they mature, receive welfare 
     assistance as the head of their own household.
       (c) Report.--Not later than October 1, 2001, the Secretary 
     shall submit a report to the Congress on the results of the 
     demonstration projects conducted under this section.

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

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

                CHAPTER 2--SUPPLEMENTAL SECURITY INCOME

     SEC. 2200. REFERENCE TO SOCIAL SECURITY ACT.

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

                 Subchapter A--Eligibility Restrictions

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

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

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

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

     SEC. 2203. TREATMENT OF PRISONERS.

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

[[Page S8708]]

       (A) establishing a system under which Federal, State, and 
     local courts would furnish to the Commissioner such 
     information respecting court orders by which individuals are 
     confined in jails, prisons, or other public penal, 
     correctional, or medical facilities as the Commissioner may 
     require for the purpose of carrying out section 1611(e)(1) of 
     the Social Security Act; and
       (B) requiring that State and local jails, prisons, and 
     other institutions that enter into contracts with the 
     Commissioner under section 1611(e)(1)(I) of the Social 
     Security Act furnish the information required by such 
     contracts to the Commissioner by means of an electronic or 
     other sophisticated data exchange system.
       (2) Report.--Not later than 1 year after the date of the 
     enactment of this Act, the Commissioner of Social Security 
     shall submit a report on the results of the study conducted 
     pursuant to this subsection to the Committee on Finance of 
     the Senate and the Committee on Ways and Means of the House 
     of Representatives.

     SEC. 2204. EFFECTIVE DATE OF APPLICATION FOR BENEFITS.

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

              Subchapter B--Benefits for Disabled Children

     SEC. 2211. DEFINITION AND ELIGIBILITY RULES.

       (a) Definition of Childhood Disability.--Section 1614(a)(3) 
     (42 U.S.C. 1382c(a)(3)), as amended by section 105(b)(1) of 
     the Contract with America Advancement Act of 1996, is 
     amended--
       (1) in subparagraph (A), by striking ``An individual'' and 
     inserting ``Except as provided in subparagraph (C), an 
     individual'';
       (2) in subparagraph (A), by striking ``(or, in the case of 
     an individual under the age of 18, if he suffers from any 
     medically determinable physical or mental impairment of 
     comparable severity)'';
       (3) by redesignating subparagraphs (C) through (I) as 
     subparagraphs (D) through (J), respectively;
       (4) by inserting after subparagraph (B) the following new 
     subparagraph:
       ``(C) An individual under the age of 18 shall be considered 
     disabled for the purposes of this title if that individual 
     has a medically determinable physical or mental impairment, 
     which results in marked and severe functional limitations, 
     and which can be expected to result in death or which has 
     lasted or can be expected to last for a continuous period of 
     not less than 12 months. Notwithstanding the preceding 
     sentence, no individual under the age of 18 who engages in 
     substantial gainful activity (determined in accordance with 
     regulations prescribed pursuant to subparagraph (E)) may be 
     considered to be disabled.''; and
       (5) in subparagraph (F), as redesignated by paragraph (3), 
     by striking ``(D)'' and inserting ``(E)''.
       (b) Request for Comments to Improve Disability 
     Evaluation.--Not later than 60 days after the date of the 
     enactment of this Act, and annually thereafter, the 
     Commissioner of Social Security shall issue a request for 
     comments in the Federal Register regarding improvements to 
     the disability evaluation and determination procedures for 
     individuals under age 18 to ensure the comprehensive 
     assessment of such individuals, including--
       (1) additions to conditions which should be presumptively 
     disabling at birth or ages 0 through 3 years;
       (2) specific changes in individual listings in the Listing 
     of Impairments set forth in appendix 1 of subpart P of part 
     404 of title 20, Code of Federal Regulations;
       (3) improvements in regulations regarding determinations 
     based on regulations providing for medical and functional 
     equivalence to such Listing of Impairments, and consideration 
     of multiple impairments; and
       (4) any other changes to the disability determination 
     procedures.
       (c) Changes to Childhood SSI Regulations.--
       (1) Modification to medical criteria for evaluation of 
     mental and emotional disorders.--The Commissioner of Social 
     Security shall modify sections 112.00C.2. and 112.02B.2.c.(2) 
     of appendix 1 to subpart P of part 404 of title 20, Code of 
     Federal Regulations, to eliminate references to maladaptive 
     behavior in the domain of personal/behavorial function.
       (2) Discontinuance of individualized functional 
     assessment.--The Commissioner of Social Security shall 
     discontinue the individualized functional assessment for 
     children set forth in sections 416.924d and 416.924e of title 
     20, Code of Federal Regulations.
       (d) Medical Improvement Review Standard as it Applies to 
     Individuals Under the Age of 18.--Section 1614(a)(4) (42 
     U.S.C. 1382(a)(4)) is amended--
       (1) by redesignating subclauses (I) and (II) of clauses (i) 
     and (ii) of subparagraph (B) as items (aa) and (bb), 
     respectively;
       (2) by redesignating clauses (i) and (ii) of subparagraphs 
     (A) and (B) as subclauses (I) and (II), respectively;
       (3) by redesignating subparagraphs (A) through (C) as 
     clauses (i) through (iii), respectively;
       (4) by inserting before clause (i) (as redesignated by 
     paragraph (3)) the following new subparagraph:
       ``(A) in the case of an individual who is age 18 or older--
     '';
       (5) by inserting after and below subparagraph (A)(iii) (as 
     so redesignated) the following new subparagraph:
       ``(B) in the case of an individual who is under the age of 
     18--
       ``(i) substantial evidence which demonstrates that there 
     has been medical improvement in the individual's impairment 
     or combination of impairments, and that such impairment or 
     combination of impairments no longer results in marked and 
     severe functional limitations; or
       ``(ii) substantial evidence which demonstrates that, as 
     determined on the basis of new or improved diagnostic 
     techniques or evaluations, the individual's impairment or 
     combination of impairments, is not as disabling as it was 
     considered to be at the time of the most recent prior 
     decision that the individual was under a disability or 
     continued to be under a disability, and such impairment or 
     combination of impairments does not result in marked and 
     severe functional limitations; or'';
       (6) by redesignating subparagraph (D) as subparagraph (C) 
     and by inserting in such subparagraph ``in the case of any 
     individual,'' before ``substantial evidence''; and
       (7) in the first sentence following subparagraph (C) (as 
     redesignated by paragraph (6)), by--
       (A) inserting ``(i)'' before ``to restore''; and
       (B) inserting ``, or (ii) in the case of an individual 
     under the age of 18, to eliminate or improve the individual's 
     impairment or combination of impairments so that it no longer 
     results in marked and severe functional limitations'' 
     immediately before the period.
       (e) Effective Dates, Etc.--
       (1) Effective dates.--
       (A) Subsections (a) and (c).--
       (i) In general.--The provisions of, and amendments made by, 
     subsections (a) and (c) shall apply to any individual who 
     applies for, or whose claim is finally adjudicated with 
     respect to, benefits under title XVI of the Social Security 
     Act on or after the date of the enactment of this Act, 
     without regard to whether regulations have been issued to 
     implement such provisions and amendments.
       (ii) Determination of final adjudication.--For purposes of 
     clause (i), no individual's claim with respect to such 
     benefits may be considered to be finally adjudicated before 
     such date of enactment if, on or after such date, there is 
     pending a request for either administrative or judicial 
     review with respect to such claim that has been denied in 
     whole, or there is pending, with respect to such claim, 
     readjudication by the Commissioner of Social Security 
     pursuant to relief in a class action or implementation by the 
     Commissioner of a court remand order.
       (B) Subsection (d).--The amendments made by subsection (d) 
     shall apply with respect to benefits under title XVI of the 
     Social Security Act for months beginning on or after the date 
     of the enactment of this Act, without regard to whether 
     regulations have been issued to implement such amendments.
       (2) Application to current recipients.--
       (A) Eligibility redeterminations.--During the period 
     beginning on the date of the enactment of this Act and ending 
     on the date which is 1 year after such date of enactment, the 
     Commissioner of Social Security shall redetermine the 
     eligibility of any individual under age 18 who is receiving 
     supplemental security income benefits by reason of disability 
     under title XVI of the Social Security Act as of the date of 
     the enactment of this Act and whose eligibility for such 
     benefits may terminate by reason of the provisions of, or 
     amendments made by, subsections (a) and (c) of this section. 
     With respect to any redetermination under this subparagraph--
       (i) section 1614(a)(4) of the Social Security Act (42 
     U.S.C. 1382c(a)(4)) shall not apply;
       (ii) the Commissioner of Social Security shall apply the 
     eligibility criteria for new

[[Page S8709]]

     applicants for benefits under title XVI of such Act;
       (iii) the Commissioner shall give such redetermination 
     priority over all continuing eligibility reviews and other 
     reviews under such title; and
       (iv) such redetermination shall be counted as a review or 
     redetermination otherwise required to be made under section 
     208 of the Social Security Independence and Program 
     Improvements Act of 1994 or any other provision of title XVI 
     of the Social Security Act.
       (B) Grandfather provision.--The provisions of, and 
     amendments made by, subsections (a) and (c) of this section, 
     and the redetermination under subparagraph (A), shall only 
     apply with respect to the benefits of an individual described 
     in subparagraph (A) for months beginning on or after the 
     later of July 1, 1997, or the date of the redetermination 
     with respect to such individual.
       (C) Notice.--Not later than January 1, 1997, the 
     Commissioner of Social Security shall notify an individual 
     described in subparagraph (A) of the provisions of this 
     paragraph.
       (3) Report.--The Commissioner of Social Security shall 
     report to the Congress regarding the progress made in 
     implementing the provisions of, and amendments made by, this 
     section on child disability evaluations not later than 180 
     days after the date of the enactment of this Act.
       (4) Regulations.--Notwithstanding any other provision of 
     law, the Commissioner of Social Security shall submit for 
     review to the committees of jurisdiction in the Congress any 
     final regulation pertaining to the eligibility of individuals 
     under age 18 for benefits under title XVI of the Social 
     Security Act at least 45 days before the effective date of 
     such regulation. The submission under this paragraph shall 
     include supporting documentation providing a cost analysis, 
     workload impact, and projections as to how the regulation 
     will effect the future number of recipients under such title.
       (5) Appropriations.--
       (A) In general.--Out of any money in the Treasury not 
     otherwise appropriated, there are authorized to be 
     appropriated and are hereby appropriated, to remain available 
     without fiscal year limitation, $200,000,000 for fiscal year 
     1997, $75,000,000 for fiscal year 1998, and $25,000,000 for 
     fiscal year 1999, for the Commissioner of Social Security to 
     utilize only for continuing disability reviews and 
     redeterminations under title XVI of the Social Security Act, 
     with reviews and redeterminations for individuals affected by 
     the provisions of subsection (b) given highest priority.
       (B) Additional funds.--Amounts appropriated under 
     subparagraph (A) shall be in addition to any funds otherwise 
     appropriated for continuing disability reviews and 
     redeterminations under title XVI of the Social Security Act.
       (6) Benefits under title xvi.--For purposes of this 
     subsection, the term ``benefits under title XVI of the Social 
     Security Act'' includes supplementary payments pursuant to an 
     agreement for Federal administration under section 1616(a) of 
     the Social Security Act, and payments pursuant to an 
     agreement entered into under section 212(b) of Public Law 93-
     66.

     SEC. 2212. ELIGIBILITY REDETERMINATIONS AND CONTINUING 
                   DISABILITY REVIEWS.

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

     SEC. 2213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS.

       (a) Requirement To Establish Account.--Section 1631(a)(2) 
     (42 U.S.C. 1383(a)(2)) is amended--
       (1) by redesignating subparagraphs (F) and (G) as 
     subparagraphs (G) and (H), respectively; and
       (2) by inserting after subparagraph (E) the following new 
     subparagraph:
       ``(F)(i)(I) Each representative payee of an eligible 
     individual under the age of 18 who is eligible for the 
     payment of benefits described in subclause (II) shall 
     establish on behalf of such individual an account in a 
     financial institution into which such benefits shall be paid, 
     and shall thereafter maintain such account for use in 
     accordance with clause (ii).
       ``(II) Benefits described in this subclause are past-due 
     monthly benefits under this title (which, for purposes of 
     this subclause, include State supplementary payments made by 
     the Commissioner pursuant to an agreement under section 1616 
     or section 212(b) of Public Law 93-66) in an amount (after 
     any withholding by the Commissioner for reimbursement to a 
     State for interim assistance under subsection (g)) that 
     exceeds the product of--
       ``(aa) 6, and
       ``(bb) the maximum monthly benefit payable under this title 
     to an eligible individual.
       ``(ii)(I) A representative payee may use funds in the 
     account established under clause (i) to pay for allowable 
     expenses described in subclause (II).
       ``(II) An allowable expense described in this subclause is 
     an expense for--
       ``(aa) education or job skills training;
       ``(bb) personal needs assistance;
       ``(cc) special equipment;
       ``(dd) housing modification;
       ``(ee) medical treatment;
       ``(ff) therapy or rehabilitation; or
       ``(gg) any other item or service that the Commissioner 
     determines to be appropriate:
     Provided, That such expense benefits such individual and, in 
     the case of an expense described in item (cc), (dd), (ff), or 
     (gg), is related to the impairment (or combination of 
     impairments) of such individual.

[[Page S8710]]

       ``(III) The use of funds from an account established under 
     clause (i) in any manner not authorized by this clause--
       ``(aa) by a representative payee shall be considered a 
     misapplication of benefits for all purposes of this 
     paragraph, and any representative payee who knowingly 
     misapplies benefits from such an account shall be liable to 
     the Commissioner in an amount equal to the total amount of 
     such benefits; and
       ``(bb) by an eligible individual who is his or her own 
     payee shall be considered a misapplication of benefits for 
     all purposes of this paragraph and the total amount of such 
     benefits so used shall be considered to be the uncompensated 
     value of a disposed resource and shall be subject to the 
     provisions of section 1613(c).
       ``(IV) This clause shall continue to apply to funds in the 
     account after the child has reached age 18, regardless of 
     whether benefits are paid directly to the beneficiary or 
     through a representative payee.
       ``(iii) The representative payee may deposit into the 
     account established pursuant to clause (i)--
       ``(I) past-due benefits payable to the eligible individual 
     in an amount less than that specified in clause (i)(II), and
       ``(II) any other funds representing an underpayment under 
     this title to such individual, provided that the amount of 
     such underpayment is equal to or exceeds the maximum monthly 
     benefit payable under this title to an eligible individual.
       ``(iv) The Commissioner of Social Security shall establish 
     a system for accountability monitoring whereby such 
     representative payee shall report, at such time and in such 
     manner as the Commissioner shall require, on activity 
     respecting funds in the account established pursuant to 
     clause (i).''.
       (b) Conforming Amendments.--
       (1) Exclusion from resources.--Section 1613(a) (42 U.S.C. 
     1382b(a)) is amended--
       (A) by striking ``and'' at the end of paragraph (10);
       (B) by striking the period at the end of paragraph (11) and 
     inserting ``; and''; and
       (C) by inserting after paragraph (11) the following new 
     paragraph:
       ``(12) any account, including accrued interest or other 
     earnings thereon, established and maintained in accordance 
     with section 1631(a)(2)(F).''.
       (2) Exclusion from income.--Section 1612(b) (42 U.S.C. 
     1382a(b)) is amended--
       (A) by striking ``and'' at the end of paragraph (19);
       (B) by striking the period at the end of paragraph (20) and 
     inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(21) the interest or other earnings on any account 
     established and maintained in accordance with section 
     1631(a)(2)(F).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to payments made after the date of the enactment 
     of this Act.

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

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

     SEC. 2215. REGULATIONS.

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

             Subchapter C--Additional Enforcement Provision

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

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

     SEC. 2222. REGULATIONS.

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

  Subchapter D--Studies Regarding Supplemental Security Income Program

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

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


                       ``ANNUAL REPORT ON PROGRAM

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

     SEC. 2232. STUDY BY GENERAL ACCOUNTING OFFICE.

       Not later than January 1, 1999, the Comptroller General of 
     the United States shall study and report on--
       (1) the impact of the amendments made by, and the 
     provisions of, this chapter on the

[[Page S8711]]

     supplemental security income program under title XVI of the 
     Social Security Act; and
       (2) extra expenses incurred by families of children 
     receiving benefits under such title that are not covered by 
     other Federal, State, or local programs.

                        CHAPTER 3--CHILD SUPPORT

     SEC. 2300. REFERENCE TO SOCIAL SECURITY ACT.

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

    Subchapter A--Eligibility for Services; Distribution of Payments

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

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

     SEC. 2302. DISTRIBUTION OF CHILD SUPPORT COLLECTIONS.

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

     ``SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

       ``(a) In General.--Subject to subsection (e), an amount 
     collected on behalf of a family as support by a State 
     pursuant to a plan approved under this part shall be 
     distributed as follows:
       ``(1) Families receiving assistance.--In the case of a 
     family receiving assistance from the State, the State shall--
       ``(A) pay to the Federal Government the Federal share of 
     the amount so collected; and
       ``(B) retain, or distribute to the family, the State share 
     of the amount so collected.
       ``(2) Families that formerly received assistance.--In the 
     case of a family that formerly received assistance from the 
     State:
       ``(A) Current support payments.--To the extent that the 
     amount so collected does not exceed the amount required to be 
     paid to the family for the month in which collected, the 
     State shall distribute the amount so collected to the family.
       ``(B) Payments of arrearages.--To the extent that the 
     amount so collected exceeds the amount required to be paid to 
     the family for the month in which collected, the State shall 
     distribute the amount so collected as follows:
       ``(i) Distribution of arrearages that accrued after the 
     family ceased to receive assistance.--

       ``(I) Pre-october 1997.--Except as provided in subclause 
     (II), the provisions of this section (other than subsection 
     (b)(1)) as in effect and applied on the day before the date 
     of the enactment of section 2302 of the Personal 
     Responsibility and Work Opportunity Act of 1996 shall apply 
     with respect to the distribution of support arrearages that--

       ``(aa) accrued after the family ceased to receive 
     assistance, and
       ``(bb) are collected before October 1, 1997.

       ``(II) Post-september 1997.--With respect to the amount so 
     collected on or after October 1, 1997 (or before such date, 
     at the option of the State)--

       ``(aa) In general.--The State shall first distribute the 
     amount so collected (other than any amount described in 
     clause (iv)) to the family to the extent necessary to satisfy 
     any support arrearages with respect to the family that 
     accrued after the family ceased to receive assistance from 
     the State.
       ``(bb) Reimbursement of governments for assistance provided 
     to the family.--After the application of division (aa) and 
     clause (ii)(II)(aa) with respect to the amount so collected, 
     the State shall retain the State share of the amount so 
     collected, and pay to the Federal Government the Federal 
     share (as defined in subsection (c)(2)) of the amount so 
     collected, but only to the extent necessary to reimburse 
     amounts paid to the family as assistance by the State.
       ``(cc) Distribution of the remainder to the family.--To the 
     extent that neither division (aa) nor division (bb) applies 
     to the amount so collected, the State shall distribute the 
     amount to the family.
       ``(ii) Distribution of arrearages that accrued before the 
     family received assistance.--

       ``(I) Pre-october 2000.--Except as provided in subclause 
     (II), the provisions of this section (other than subsection 
     (b)(1)) as in effect and applied on the day before the date 
     of the enactment of section 2302 of the Personal 
     Responsibility and Work Opportunity Act of 1996 shall apply 
     with respect to the distribution of support arrearages that--

       ``(aa) accrued before the family received assistance, and
       ``(bb) are collected before October 1, 2000.

       ``(II) Post-september 2000.--Unless, based on the report 
     required by paragraph (4), the Congress determines otherwise, 
     with respect to the amount so collected on or after October 
     1, 2000 (or before such date, at the option of the State)--

       ``(aa) In general.--The State shall first distribute the 
     amount so collected (other than any amount described in 
     clause (iv)) to the family to the extent necessary to satisfy 
     any support arrearages with respect to the family that 
     accrued before the family received assistance from the State.
       ``(bb) Reimbursement of governments for assistance provided 
     to the family.--After the application of clause (i)(II)(aa) 
     and division (aa) with respect to the amount so collected, 
     the State shall retain the State share of the amount so 
     collected, and pay to the Federal Government the Federal 
     share (as defined in subsection (c)(2)) of the amount so 
     collected, but only to the extent necessary to reimburse 
     amounts paid to the family as assistance by the State.
       ``(cc) Distribution of the remainder to the family.--To the 
     extent that neither division (aa) nor division (bb) applies 
     to the amount so collected, the State shall distribute the 
     amount to the family.
       ``(iii) Distribution of arrearages that accrued while the 
     family received assistance.--In the case of a family 
     described in this subparagraph, the provisions of paragraph 
     (1) shall apply with respect to the distribution of support 
     arrearages that accrued while the family received assistance.
       ``(iv) Amounts collected pursuant to section 464.--
     Notwithstanding any other provision of this section, any 
     amount of support collected pursuant to section 464 shall be 
     retained by the State to the extent past-due support has been 
     assigned to the State as a condition of receiving assistance 
     from the State, up to the amount necessary to reimburse the 
     State for amounts paid to the family as assistance by the 
     State. The State shall pay to the Federal Government the 
     Federal share of the amounts so retained. To the extent the 
     amount collected pursuant to section 464 exceeds the amount 
     so retained, the State shall distribute the excess to the 
     family.
       ``(v) Ordering rules for distributions.--For purposes of 
     this subparagraph, unless an earlier effective date is 
     required by this section, effective October 1, 2000, the 
     State shall treat any support arrearages collected, except 
     for amounts collected pursuant to section 464, as accruing in 
     the following order:

[[Page S8712]]

       ``(I) To the period after the family ceased to receive 
     assistance.
       ``(II) To the period before the family received assistance.
       ``(III) To the period while the family was receiving 
     assistance.

       ``(3) Families that never received assistance.--In the case 
     of any other family, the State shall distribute the amount so 
     collected to the family.
       ``(4) Families under certain agreements.--In the case of a 
     family receiving assistance from an Indian tribe, distribute 
     the amount so collected pursuant to an agreement entered into 
     pursuant to a State plan under section 454(33).
       ``(5) Study and report.--Not later than October 1, 1998, 
     the Secretary shall report to the Congress the Secretary's 
     findings with respect to--
       ``(A) whether the distribution of post-assistance 
     arrearages to families has been effective in moving people 
     off of welfare and keeping them off of welfare;
       ``(B) whether early implementation of a pre-assistance 
     arrearage program by some States has been effective in moving 
     people off of welfare and keeping them off of welfare;
       ``(C) what the overall impact has been of the amendments 
     made by the Personal Responsibility and Work Opportunity Act 
     of 1996 with respect to child support enforcement in moving 
     people off of welfare and keeping them off of welfare; and
       ``(D) based on the information and data the Secretary has 
     obtained, what changes, if any, should be made in the 
     policies related to the distribution of child support 
     arrearages.
       ``(b) Continuation Of Assignments.--Any rights to support 
     obligations, which were assigned to a State as a condition of 
     receiving assistance from the State under part A and which 
     were in effect on the day before the date of the enactment of 
     the Personal Responsibility and Work Opportunity Act of 1996, 
     shall remain assigned after such date.
       ``(c) Definitions.--As used in subsection (a):
       ``(1) Assistance.--The term `assistance from the State' 
     means--
       ``(A) assistance under the State program funded under part 
     A or under the State plan approved under part A of this title 
     (as in effect on the day before the date of the enactment of 
     the Personal Responsibility and Work Opportunity Act of 
     1996); and
       ``(B) foster care maintenance payments under the State plan 
     approved under part E of this title.
       ``(2) Federal share.--The term `Federal share' means that 
     portion of the amount collected resulting from the 
     application of the Federal medical assistance percentage in 
     effect for the fiscal year in which the amount is collected.
       ``(3) Federal medical assistance percentage.--The term 
     `Federal medical assistance percentage' means--
       ``(A) the Federal medical assistance percentage (as defined 
     in section 1118), in the case of Puerto Rico, the Virgin 
     Islands, Guam, and American Samoa; or
       ``(B) the Federal medical assistance percentage (as defined 
     in section 1905(b), as in effect on September 30, 1996) in 
     the case of any other State.
       ``(4) State share.--The term `State share' means 100 
     percent minus the Federal share.
       ``(d) Hold Harmless Provision.--If the amounts collected 
     which could be retained by the State in the fiscal year (to 
     the extent necessary to reimburse the State for amounts paid 
     to families as assistance by the State) are less than the 
     State share of the amounts collected in fiscal year 1995 
     (determined in accordance with section 457 as in effect on 
     the day before the date of the enactment of the Personal 
     Responsibility and Work Opportunity Act of 1996), the State 
     share for the fiscal year shall be an amount equal to the 
     State share in fiscal year 1995.
       ``(e) Gap Payments not Subject to Distribution Under This 
     Section.--At State option, this section shall not apply to 
     any amount collected on behalf of a family as support by the 
     State (and paid to the family in addition to the amount of 
     assistance otherwise payable to the family) pursuant to a 
     plan approved under this part if such amount would have been 
     paid to the family by the State under section 402(a)(28), as 
     in effect and applied on the day before the date of the 
     enactment of section 2302 of the Personal Responsibility and 
     Work Opportunity Act of 1996. For purposes of subsection (d), 
     the State share of such amount paid to the family shall be 
     considered amounts which could be retained by the State if 
     such payments were reported by the State as part of the State 
     share of amounts collected in fiscal year 1995.''.
       (b) Conforming Amendments.--
       (1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is amended by 
     striking ``section 457(b)(4) or (d)(3)'' and inserting 
     ``section 457''.
       (2) Section 454 (42 U.S.C. 654) is amended--
       (A) in paragraph (11)--
       (i) by striking ``(11)'' and inserting ``(11)(A)''; and
       (ii) by inserting after the semicolon ``and''; and
       (B) by redesignating paragraph (12) as subparagraph (B) of 
     paragraph (11).
       (c) Effective Dates.--
       (1) In General.--Except as provided in paragraph (2), the 
     amendments made by this section shall be effective on October 
     1, 1996, or earlier at the State's option.
       (2) Conforming amendments.--The amendments made by 
     subsection (b)(2) shall become effective on the date of the 
     enactment of this Act.

     SEC. 2303. PRIVACY SAFEGUARDS.

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

     SEC. 2304. RIGHTS TO NOTIFICATION OF HEARINGS.

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

                 Subchapter B--Locate and Case Tracking

     SEC. 2311. STATE CASE REGISTRY.

       Section 454A, as added by section 2344(a)(2) of this Act, 
     is amended by adding at the end the following new 
     subsections:
       ``(e) State Case Registry.--
       ``(1) Contents.--The automated system required by this 
     section shall include a registry (which shall be known as the 
     `State case registry') that contains records with respect 
     to--
       ``(A) each case in which services are being provided by the 
     State agency under the State plan approved under this part; 
     and
       ``(B) each support order established or modified in the 
     State on or after October 1, 1998.
       ``(2) Linking of local registries.--The State case registry 
     may be established by linking local case registries of 
     support orders through an automated information network, 
     subject to this section.
       ``(3) Use of standardized data elements.--Such records 
     shall use standardized data elements for both parents (such 
     as names, social security numbers and other uniform 
     identification numbers, dates of birth, and case 
     identification numbers), and contain such other information 
     (such as on case status) as the Secretary may require.
       ``(4) Payment records.--Each case record in the State case 
     registry with respect to which services are being provided 
     under the State plan approved under this part and with 
     respect to which a support order has been established shall 
     include a record of--
       ``(A) the amount of monthly (or other periodic) support 
     owed under the order, and other amounts (including 
     arrearages, interest or late payment penalties, and fees) due 
     or overdue under the order;
       ``(B) any amount described in subparagraph (A) that has 
     been collected;
       ``(C) the distribution of such collected amounts;
       ``(D) the birth date of any child for whom the order 
     requires the provision of support; and
       ``(E) the amount of any lien imposed with respect to the 
     order pursuant to section 466(a)(4).
       ``(5) Updating and monitoring.--The State agency operating 
     the automated system required by this section shall promptly 
     establish and update, maintain, and regularly monitor, case 
     records in the State case registry with respect to which 
     services are being provided under the State plan approved 
     under this part, on the basis of--
       ``(A) information on administrative actions and 
     administrative and judicial proceedings and orders relating 
     to paternity and support;
       ``(B) information obtained from comparison with Federal, 
     State, or local sources of information;
       ``(C) information on support collections and distributions; 
     and
       ``(D) any other relevant information.
       ``(f) Information Comparisons and Other Disclosures of 
     Information.--The State

[[Page S8713]]

     shall use the automated system required by this section to 
     extract information from (at such times, and in such 
     standardized format or formats, as may be required by the 
     Secretary), to share and compare information with, and to 
     receive information from, other data bases and information 
     comparison services, in order to obtain (or provide) 
     information necessary to enable the State agency (or the 
     Secretary or other State or Federal agencies) to carry out 
     this part, subject to section 6103 of the Internal Revenue 
     Code of 1986. Such information comparison activities shall 
     include the following:
       ``(1) Federal case registry of child support orders.--
     Furnishing to the Federal Case Registry of Child Support 
     Orders established under section 453(h) (and update as 
     necessary, with information including notice of expiration of 
     orders) the minimum amount of information on child support 
     cases recorded in the State case registry that is necessary 
     to operate the registry (as specified by the Secretary in 
     regulations).
       ``(2) Federal parent locator service.--Exchanging 
     information with the Federal Parent Locator Service for the 
     purposes specified in section 453.
       ``(3) Temporary family assistance and medicaid agencies.--
     Exchanging information with State agencies (of the State and 
     of other States) administering programs funded under part A, 
     programs operated under a State plan under title XV or a 
     State plan approved under title XIX, and other programs 
     designated by the Secretary, as necessary to perform State 
     agency responsibilities under this part and under such 
     programs.
       ``(4) Intrastate and interstate information comparisons.--
     Exchanging information with other agencies of the State, 
     agencies of other States, and interstate information 
     networks, as necessary and appropriate to carry out (or 
     assist other States to carry out) the purposes of this 
     part.''.

     SEC. 2312. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

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

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

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

     SEC. 2313. STATE DIRECTORY OF NEW HIRES.

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

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

       ``(a) Establishment.--
       ``(1) In general.--
       ``(A) Requirement for States that have no directory.--
     Except as provided in subparagraph (B), not later than 
     October 1, 1997, each State shall establish an automated 
     directory (to be known as the `State Directory of New Hires') 
     which shall contain information supplied in accordance with 
     subsection (b) by employers on each newly hired employee.
       ``(B) States with new hire reporting in existence.--A State 
     which has a new hire reporting law in existence on the date 
     of the enactment of this section may continue to operate 
     under the State law, but the State must meet the requirements 
     of subsection (g)(2) not later than October 1, 1997, and the 
     requirements of this section (other than subsection (g)(2)) 
     not later than October 1, 1998.
       ``(2) Definitions.--As used in this section:
       ``(A) Employee.--The term `employee'--
       ``(i) means an individual who is an employee within the 
     meaning of chapter 24 of the Internal Revenue Code of 1986; 
     and
       ``(ii) does not include an employee of a Federal or State 
     agency performing intelligence or counterintelligence 
     functions, if the head of such agency has determined that 
     reporting pursuant to paragraph (1) with respect to the 
     employee could endanger the safety of the employee or 
     compromise an ongoing investigation or intelligence mission.
       ``(B) Employer.--
       ``(i) In general.--The term `employer' has the meaning 
     given such term in section

[[Page S8714]]

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

     SEC. 2314. AMENDMENTS CONCERNING INCOME WITHHOLDING.

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

[[Page S8715]]

       ``(ii) fails to withhold support from wages or to pay such 
     amounts to the State disbursement unit in accordance with 
     this subsection.''.
       (F) Section 466(b) (42 U.S.C. 666(b)) is amended by adding 
     at the end the following new paragraph:
       ``(11) Procedures under which the agency administering the 
     State plan approved under this part may execute a withholding 
     order without advance notice to the obligor, including 
     issuing the withholding order through electronic means.''.
       (b) Conforming Amendment.--Section 466(c) (42 U.S.C. 
     666(c)) is repealed.

     SEC. 2315. LOCATOR INFORMATION FROM INTERSTATE NETWORKS.

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

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

       (a) Expanded Authority To Locate Individuals and Assets.--
     Section 453 (42 U.S.C. 653) is amended--
       (1) in subsection (a), by striking all that follows 
     ``subsection (c))'' and inserting ``, for the purpose of 
     establishing parentage, establishing, setting the amount of, 
     modifying, or enforcing child support obligations, or 
     enforcing child custody or visitation orders--
       ``(1) information on, or facilitating the discovery of, the 
     location of any individual--
       ``(A) who is under an obligation to pay child support or 
     provide child custody or visitation rights;
       ``(B) against whom such an obligation is sought;
       ``(C) to whom such an obligation is owed,
     including the individual's social security number (or 
     numbers), most recent address, and the name, address, and 
     employer identification number of the individual's employer;
       ``(2) information on the individual's wages (or other 
     income) from, and benefits of, employment (including rights 
     to or enrollment in group health care coverage); and
       ``(3) information on the type, status, location, and amount 
     of any assets of, or debts owed by or to, any such 
     individual.''; and
       (2) in subsection (b)--
       (A) in the matter preceding paragraph (1), by striking 
     ``social security'' and all that follows through ``absent 
     parent'' and inserting ``information described in subsection 
     (a)''; and
       (B) in the flush paragraph at the end, by adding the 
     following: ``No information shall be disclosed to any person 
     if the State has notified the Secretary that the State has 
     reasonable evidence of domestic violence or child abuse and 
     the disclosure of such information could be harmful to the 
     custodial parent or the child of such parent. Information 
     received or transmitted pursuant to this section shall be 
     subject to the safeguard provisions contained in section 
     454(26).''.
       (b) Authorized Person for Information Regarding Visitation 
     Rights.--Section 453(c) (42 U.S.C. 653(c)) is amended--
       (1) in paragraph (1), by striking ``support'' and inserting 
     ``support or to seek to enforce orders providing child 
     custody or visitation rights''; and
       (2) in paragraph (2), by striking ``, or any agent of such 
     court; and'' and inserting ``or to issue an order against a 
     resident parent for child custody or visitation rights, or 
     any agent of such court;''.
       (c) Reimbursement for Information From Federal Agencies.--
     Section 453(e)(2) (42 U.S.C. 653(e)(2)) is amended in the 4th 
     sentence by inserting ``in an amount which the Secretary 
     determines to be reasonable payment for the information 
     exchange (which amount shall not include payment for the 
     costs of obtaining, compiling, or maintaining the 
     information)'' before the period.
       (d) Reimbursement for Reports by State Agencies.--Section 
     453 (42 U.S.C. 653) is amended by adding at the end the 
     following new subsection:
       ``(g) Reimbursement for Reports by State Agencies.--The 
     Secretary may reimburse Federal and State agencies for the 
     costs incurred by such entities in furnishing information 
     requested by the Secretary under this section in an amount 
     which the Secretary determines to be reasonable payment for 
     the information exchange (which amount shall not include 
     payment for the costs of obtaining, compiling, or maintaining 
     the information).''.
       (e) Conforming Amendments.--
       (1) Sections 452(a)(9), 453(a), 453(b), 463(a), 463(e), and 
     463(f) (42 U.S.C. 652(a)(9), 653(a), 653(b), 663(a), 663(e), 
     and 663(f)) are each amended by inserting ``Federal'' before 
     ``Parent'' each place such term appears.
       (2) Section 453 (42 U.S.C. 653) is amended in the heading 
     by adding ``federal'' before ``parent''.
       (f) New Components.--Section 453 (42 U.S.C. 653), as 
     amended by subsection (d) of this section, is amended by 
     adding at the end the following new subsections:
       ``(h) Federal Case Registry of Child Support Orders.--
       ``(1) In general.--Not later than October 1, 1998, in order 
     to assist States in administering programs under State plans 
     approved under this part and programs funded under part A, 
     and for the other purposes specified in this section, the 
     Secretary shall establish and maintain in the Federal Parent 
     Locator Service an automated registry (which shall be known 
     as the `Federal Case Registry of Child Support Orders'), 
     which shall contain abstracts of support orders and other 
     information described in paragraph (2) with respect to each 
     case in each State case registry maintained pursuant to 
     section 454A(e), as furnished (and regularly updated), 
     pursuant to section 454A(f), by State agencies administering 
     programs under this part.
       ``(2) Case information.--The information referred to in 
     paragraph (1) with respect to a case shall be such 
     information as the Secretary may specify in regulations 
     (including the names, social security numbers or other 
     uniform identification numbers, and State case identification 
     numbers) to identify the individuals who owe or are owed 
     support (or with respect to or on behalf of whom support 
     obligations are sought to be established), and the State or 
     States which have the case.
       ``(i) National Directory of New Hires.--
       ``(1) In general.--In order to assist States in 
     administering programs under State plans approved under this 
     part and programs funded under part A, and for the other 
     purposes specified in this section, the Secretary shall, not 
     later than October 1, 1997, establish and maintain in the 
     Federal Parent Locator Service an automated directory to be 
     known as the National Directory of New Hires, which shall 
     contain the information supplied pursuant to section 
     453A(g)(2).
       ``(2) Entry of data.--Information shall be entered into the 
     data base maintained by the National Directory of New Hires 
     within 2 business days of receipt pursuant to section 
     453A(g)(2).
       ``(3) Administration of federal tax laws.--The Secretary of 
     the Treasury shall have access to the information in the 
     National Directory of New Hires for purposes of administering 
     section 32 of the Internal Revenue Code of 1986, or the 
     advance payment of the earned income tax credit under section 
     3507 of such Code, and verifying a claim with respect to 
     employment in a tax return.
       ``(4) List of multistate employers.--The Secretary shall 
     maintain within the National Directory of New Hires a list of 
     multistate employers that report information regarding newly 
     hired employees pursuant to section 453A(b)(1)(B), and the 
     State which each such employer has designated to receive such 
     information.
       ``(j) Information Comparisons and Other Disclosures.--
       ``(1) Verification by social security administration.--
       ``(A) In general.--The Secretary shall transmit information 
     on individuals and employers maintained under this section to 
     the Social Security Administration to the extent necessary 
     for verification in accordance with subparagraph (B).
       ``(B) Verification by ssa.--The Social Security 
     Administration shall verify the accuracy of, correct, or 
     supply to the extent possible, and report to the Secretary, 
     the following information supplied by the Secretary pursuant 
     to subparagraph (A):
       ``(i) The name, social security number, and birth date of 
     each such individual.
       ``(ii) The employer identification number of each such 
     employer.
       ``(2) Information comparisons.--For the purpose of locating 
     individuals in a paternity establishment case or a case 
     involving the establishment, modification, or enforcement of 
     a support order, the Secretary shall--
       ``(A) compare information in the National Directory of New 
     Hires against information in the support case abstracts in 
     the Federal Case Registry of Child Support Orders not less 
     often than every 2 business days; and
       ``(B) within 2 business days after such a comparison 
     reveals a match with respect to an individual, report the 
     information to the State agency responsible for the case.
       ``(3) Information comparisons and disclosures of 
     information in all registries for title iv program 
     purposes.--To the extent and with the frequency that the 
     Secretary determines to be effective in assisting States to 
     carry out their responsibilities under programs operated 
     under this part and programs funded under part A, the 
     Secretary shall--
       ``(A) compare the information in each component of the 
     Federal Parent Locator Service maintained under this section 
     against the information in each other such component (other 
     than the comparison required by paragraph (2)), and report 
     instances in which such a comparison reveals a match with 
     respect to an individual to State agencies operating such 
     programs; and
       ``(B) disclose information in such registries to such State 
     agencies.
       ``(4) Provision of new hire information to the social 
     security administration.--The National Directory of New Hires 
     shall provide the Commissioner of Social Security with all 
     information in the National Directory.
       ``(5) Research.--The Secretary may provide access to 
     information reported by employers pursuant to section 453A(b) 
     for research purposes found by the Secretary to be likely to 
     contribute to achieving the purposes of part A or this part, 
     but without personal identifiers.
       ``(k) Fees.--
       ``(1) For ssa verification.--The Secretary shall reimburse 
     the Commissioner of Social Security, at a rate negotiated 
     between the Secretary and the Commissioner, for the costs 
     incurred by the Commissioner in performing the verification 
     services described in subsection (j).

[[Page S8716]]

       ``(2) For information from state directories of new 
     hires.--The Secretary shall reimburse costs incurred by State 
     directories of new hires in furnishing information as 
     required by subsection (j)(3), at rates which the Secretary 
     determines to be reasonable (which rates shall not include 
     payment for the costs of obtaining, compiling, or maintaining 
     such information).
       ``(3) For information furnished to state and federal 
     agencies.--A State or Federal agency that receives 
     information from the Secretary pursuant to this section shall 
     reimburse the Secretary for costs incurred by the Secretary 
     in furnishing the information, at rates which the Secretary 
     determines to be reasonable (which rates shall include 
     payment for the costs of obtaining, verifying, maintaining, 
     and comparing the information).
       ``(l) Restriction on Disclosure and Use.--Information in 
     the Federal Parent Locator Service, and information resulting 
     from comparisons using such information, shall not be used or 
     disclosed except as expressly provided in this section, 
     subject to section 6103 of the Internal Revenue Code of 1986.
       ``(m) Information Integrity and Security.--The Secretary 
     shall establish and implement safeguards with respect to the 
     entities established under this section designed to--
       ``(1) ensure the accuracy and completeness of information 
     in the Federal Parent Locator Service; and
       ``(2) restrict access to confidential information in the 
     Federal Parent Locator Service to authorized persons, and 
     restrict use of such information to authorized purposes.
       ``(n) Federal Government Reporting.--Each department, 
     agency, and instrumentality of the United States shall on a 
     quarterly basis report to the Federal Parent Locator Service 
     the name and social security number of each employee and the 
     wages paid to the employee during the previous quarter, 
     except that such a report shall not be filed with respect to 
     an employee of a department, agency, or instrumentality 
     performing intelligence or counterintelligence functions, if 
     the head of such department, agency, or instrumentality has 
     determined that filing such a report could endanger the 
     safety of the employee or compromise an ongoing investigation 
     or intelligence mission.''.
       (g) Conforming Amendments.--
       (1) To part d of title iv of the social security act.--
       (A) Section 454(8)(B) (42 U.S.C. 654(8)(B)) is amended to 
     read as follows:
       ``(B) the Federal Parent Locator Service established under 
     section 453;''.
       (B) Section 454(13) (42 U.S.C.654(13)) is amended by 
     inserting ``and provide that information requests by parents 
     who are residents of other States be treated with the same 
     priority as requests by parents who are residents of the 
     State submitting the plan'' before the semicolon.
       (2) To federal unemployment tax act.--Section 3304(a)(16) 
     of the Internal Revenue Code of 1986 is amended--
       (A) by striking ``Secretary of Health, Education, and 
     Welfare'' each place such term appears and inserting 
     ``Secretary of Health and Human Services'';
       (B) in subparagraph (B), by striking ``such information'' 
     and all that follows and inserting ``information furnished 
     under subparagraph (A) or (B) is used only for the purposes 
     authorized under such subparagraph;'';
       (C) by striking ``and'' at the end of subparagraph (A);
       (D) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (E) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) wage and unemployment compensation information 
     contained in the records of such agency shall be furnished to 
     the Secretary of Health and Human Services (in accordance 
     with regulations promulgated by such Secretary) as necessary 
     for the purposes of the National Directory of New Hires 
     established under section 453(i) of the Social Security Act, 
     and''.
       (3) To state grant program under title iii of the social 
     security act.--Subsection (h) of section 303 (42 U.S.C. 503) 
     is amended to read as follows:
       ``(h)(1) The State agency charged with the administration 
     of the State law shall, on a reimbursable basis--
       ``(A) disclose quarterly, to the Secretary of Health and 
     Human Services, wage and claim information, as required 
     pursuant to section 453(i)(1), contained in the records of 
     such agency;
       ``(B) ensure that information provided pursuant to 
     subparagraph (A) meets such standards relating to correctness 
     and verification as the Secretary of Health and Human 
     Services, with the concurrence of the Secretary of Labor, may 
     find necessary; and
       ``(C) establish such safeguards as the Secretary of Labor 
     determines are necessary to insure that information disclosed 
     under subparagraph (A) is used only for purposes of section 
     453(i)(1) in carrying out the child support enforcement 
     program under title IV.
       ``(2) Whenever the Secretary of Labor, after reasonable 
     notice and opportunity for hearing to the State agency 
     charged with the administration of the State law, finds that 
     there is a failure to comply substantially with the 
     requirements of paragraph (1), the Secretary of Labor shall 
     notify such State agency that further payments will not be 
     made to the State until the Secretary of Labor is satisfied 
     that there is no longer any such failure. Until the Secretary 
     of Labor is so satisfied, the Secretary shall make no future 
     certification to the Secretary of the Treasury with respect 
     to the State.
       ``(3) For purposes of this subsection--
       ``(A) the term `wage information' means information 
     regarding wages paid to an individual, the social security 
     account number of such individual, and the name, address, 
     State, and the Federal employer identification number of the 
     employer paying such wages to such individual; and
       ``(B) the term `claim information' means information 
     regarding whether an individual is receiving, has received, 
     or has made application for, unemployment compensation, the 
     amount of any such compensation being received (or to be 
     received by such individual), and the individual's current 
     (or most recent) home address.''.
       (4) Disclosure of certain information to agents of child 
     support enforcement agencies.--
       (A) In general.--Paragraph (6) of section 6103(l) of the 
     Internal Revenue Code of 1986 (relating to disclosure of 
     return information to Federal, State, and local child support 
     enforcement agencies) is amended by redesignating 
     subparagraph (B) as subparagraph (C) and by inserting after 
     subparagraph (A) the following new subparagraph:
       ``(B) Disclosure to certain agents.--The following 
     information disclosed to any child support enforcement agency 
     under subparagraph (A) with respect to any individual with 
     respect to whom child support obligations are sought to be 
     established or enforced may be disclosed by such agency to 
     any agent of such agency which is under contract with such 
     agency to carry out the purposes described in subparagraph 
     (C):
       ``(i) The address and social security account number (or 
     numbers) of such individual.
       ``(ii) The amount of any reduction under section 6402(c) 
     (relating to offset of past-due support against overpayments) 
     in any overpayment otherwise payable to such individual.''.
       (B) Conforming amendments.--
       (i) Paragraph (3) of section 6103(a) of such Code is 
     amended by striking ``(l)(12)'' and inserting ``paragraph (6) 
     or (12) of subsection (l)''.
       (ii) Subparagraph (C) of section 6103(l)(6) of such Code, 
     as redesignated by subsection (a), is amended to read as 
     follows:
       ``(C) Restriction on disclosure.--Information may be 
     disclosed under this paragraph only for purposes of, and to 
     the extent necessary in, establishing and collecting child 
     support obligations from, and locating, individuals owing 
     such obligations.''.
       (iii) The material following subparagraph (F) of section 
     6103(p)(4) of such Code is amended by striking ``subsection 
     (l)(12)(B)'' and inserting ``paragraph (6)(A) or (12)(B) of 
     subsection (l)''.
       (h) Requirement for Cooperation.--The Secretary of Labor 
     and the Secretary of Health and Human Services shall work 
     jointly to develop cost-effective and efficient methods of 
     accessing the information in the various State directories of 
     new hires and the National Directory of New Hires as 
     established pursuant to the amendments made by this 
     subchapter. In developing these methods the Secretaries shall 
     take into account the impact, including costs, on the States, 
     and shall also consider the need to insure the proper and 
     authorized use of wage record information.

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

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

        Subchapter C--Streamlining and Uniformity of Procedures

     SEC. 2321. ADOPTION OF UNIFORM STATE LAWS.

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

[[Page S8717]]

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

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

     SEC. 2323. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.

       Section 466(a) (42 U.S.C. 666(a)), as amended by sections 
     2315 and 2317(a) of this Act, is amended by inserting after 
     paragraph (13) the following new paragraph:
       ``(14) Administrative enforcement in interstate cases.--
     Procedures under which--
       ``(A)(i) the State shall respond within 5 business days to 
     a request made by another State to enforce a support order; 
     and
       ``(ii) the term `business day' means a day on which State 
     offices are open for regular business;
       ``(B) the State may, by electronic or other means, transmit 
     to another State a request for assistance in a case involving 
     the enforcement of a support order, which request--
       ``(i) shall include such information as will enable the 
     State to which the request is transmitted to compare the 
     information about the case to the information in the data 
     bases of the State; and
       ``(ii) shall constitute a certification by the requesting 
     State--

       ``(I) of the amount of support under the order the payment 
     of which is in arrears; and
       ``(II) that the requesting State has complied with all 
     procedural due process requirements applicable to the case;

       ``(C) if the State provides assistance to another State 
     pursuant to this paragraph with respect to a case, neither 
     State shall consider the case to be transferred to the 
     caseload of such other State; and
       ``(D) the State shall maintain records of--
       ``(i) the number of such requests for assistance received 
     by the State;
       ``(ii) the number of cases for which the State collected 
     support in response to such a request; and
       ``(iii) the amount of such collected support.''.

     SEC. 2324. USE OF FORMS IN INTERSTATE ENFORCEMENT.

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

     SEC. 2325. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

       (a) State Law Requirements.--Section 466 (42 U.S.C. 666), 
     as amended by section 2314 of this Act, is amended--
       (1) in subsection (a)(2), by striking the first sentence 
     and inserting the following: ``Expedited administrative and 
     judicial procedures (including the procedures specified in 
     subsection (c)) for establishing paternity and for 
     establishing, modifying, and enforcing support 
     obligations.''; and
       (2) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Expedited Procedures.--The procedures specified in 
     this subsection are the following:
       ``(1) Administrative action by state agency.--Procedures 
     which give the State agency the authority to take the 
     following actions relating to establishment of paternity or 
     to establishment, modification, or enforcement of support 
     orders, without the necessity of obtaining an order from any 
     other judicial or administrative tribunal, and to recognize 
     and enforce the authority of State agencies of other States 
     to take the following actions:
       ``(A) Genetic testing.--To order genetic testing for the 
     purpose of paternity establishment as provided in section 
     466(a)(5).
       ``(B) Financial or other information.--To subpoena any 
     financial or other information needed to establish, modify, 
     or enforce a support order, and to impose penalties for 
     failure to respond to such a subpoena.
       ``(C) Response to state agency request.--To require all 
     entities in the State (including for-profit, nonprofit, and 
     governmental employers) to provide promptly, in response to a 
     request by the State agency of that or any other State 
     administering a program under this part, information on the 
     employment, compensation, and benefits of any individual 
     employed by such entity as an employee or contractor, and to 
     sanction failure to respond to any such request.
       ``(D) Access to information contained in certain records.--
     To obtain access, subject to safeguards on privacy and 
     information security, and subject to the nonliability of 
     entities that afford such access under this subparagraph, to 
     information contained in the following records (including 
     automated access, in the case of records maintained in 
     automated data bases):
       ``(i) Records of other State and local government agencies, 
     including--

       ``(I) vital statistics (including records of marriage, 
     birth, and divorce);
       ``(II) State and local tax and revenue records (including 
     information on residence address, employer, income and 
     assets);
       ``(III) records concerning real and titled personal 
     property;
       ``(IV) records of occupational and professional licenses, 
     and records concerning the ownership and control of 
     corporations, partnerships, and other business entities;
       ``(V) employment security records;
       ``(VI) records of agencies administering public assistance 
     programs;
       ``(VII) records of the motor vehicle department; and
       ``(VIII) corrections records.

       ``(ii) Certain records held by private entities with 
     respect to individuals who owe or are owed support (or 
     against or with respect to whom a support obligation is 
     sought), consisting of--

       ``(I) the names and addresses of such individuals and the 
     names and addresses of the employers of such individuals, as 
     appearing

[[Page S8718]]

     in customer records of public utilities and cable television 
     companies, pursuant to an administrative subpoena authorized 
     by subparagraph (B); and
       ``(II) information (including information on assets and 
     liabilities) on such individuals held by financial 
     institutions.

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

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

       ``(ii) attaching and seizing assets of the obligor held in 
     financial institutions;
       ``(iii) attaching public and private retirement funds; and
       ``(iv) imposing liens in accordance with subsection (a)(4) 
     and, in appropriate cases, to force sale of property and 
     distribution of proceeds.
       ``(H) Increase monthly payments.--For the purpose of 
     securing overdue support, to increase the amount of monthly 
     support payments to include amounts for arrearages, subject 
     to such conditions or limitations as the State may provide.
     Such procedures shall be subject to due process safeguards, 
     including (as appropriate) requirements for notice, 
     opportunity to contest the action, and opportunity for an 
     appeal on the record to an independent administrative or 
     judicial tribunal.
       ``(2) Substantive and procedural rules.--The expedited 
     procedures required under subsection (a)(2) shall include the 
     following rules and authority, applicable with respect to all 
     proceedings to establish paternity or to establish, modify, 
     or enforce support orders:
       ``(A) Locator information; presumptions concerning 
     notice.--Procedures under which--
       ``(i) each party to any paternity or child support 
     proceeding is required (subject to privacy safeguards) to 
     file with the tribunal and the State case registry upon entry 
     of an order, and to update as appropriate, information on 
     location and identity of the party, including social security 
     number, residential and mailing addresses, telephone number, 
     driver's license number, and name, address, and telephone 
     number of employer; and
       ``(ii) in any subsequent child support enforcement action 
     between the parties, upon sufficient showing that diligent 
     effort has been made to ascertain the location of such a 
     party, the tribunal may deem State due process requirements 
     for notice and service of process to be met with respect to 
     the party, upon delivery of written notice to the most recent 
     residential or employer address filed with the tribunal 
     pursuant to clause (i).
       ``(B) Statewide jurisdiction.--Procedures under which--
       ``(i) the State agency and any administrative or judicial 
     tribunal with authority to hear child support and paternity 
     cases exerts statewide jurisdiction over the parties; and
       ``(ii) in a State in which orders are issued by courts or 
     administrative tribunals, a case may be transferred between 
     local jurisdictions in the State without need for any 
     additional filing by the petitioner, or service of process 
     upon the respondent, to retain jurisdiction over the parties.
       ``(3) Coordination with erisa.--Notwithstanding subsection 
     (d) of section 514 of the Employee Retirement Income Security 
     Act of 1974 (relating to effect on other laws), nothing in 
     this subsection shall be construed to alter, amend, modify, 
     invalidate, impair, or supersede subsections (a), (b), and 
     (c) of such section 514 as it applies with respect to any 
     procedure referred to in paragraph (1) and any expedited 
     procedure referred to in paragraph (2), except to the extent 
     that such procedure would be consistent with the requirements 
     of section 206(d)(3) of such Act (relating to qualified 
     domestic relations orders) or the requirements of section 
     609(a) of such Act (relating to qualified medical child 
     support orders) if the reference in such section 206(d)(3) to 
     a domestic relations order and the reference in such section 
     609(a) to a medical child support order were a reference to a 
     support order referred to in paragraphs (1) and (2) relating 
     to the same matters, respectively.''.
       (b) Automation of State Agency Functions.--Section 454A, as 
     added by section 2344(a)(2) and as amended by sections 2311 
     and 2312(c) of this Act, is amended by adding at the end the 
     following new subsection:
       ``(h) Expedited Administrative Procedures.--The automated 
     system required by this section shall be used, to the maximum 
     extent feasible, to implement the expedited administrative 
     procedures required by section 466(c).''.

                 Subchapter D--Paternity Establishment

     SEC. 2331. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT.

       (a) State Laws Required.--Section 466(a)(5) (42 U.S.C. 
     666(a)(5)) is amended to read as follows:
       ``(5) Procedures concerning paternity establishment.--
       ``(A) Establishment process available from birth until age 
     18.--
       ``(i) Procedures which permit the establishment of the 
     paternity of a child at any time before the child attains 18 
     years of age.
       ``(ii) As of August 16, 1984, clause (i) shall also apply 
     to a child for whom paternity has not been established or for 
     whom a paternity action was brought but dismissed because a 
     statute of limitations of less than 18 years was then in 
     effect in the State.
       ``(B) Procedures concerning genetic testing.--
       ``(i) Genetic testing required in certain contested 
     cases.--Procedures under which the State is required, in a 
     contested paternity case (unless otherwise barred by State 
     law) to require the child and all other parties (other than 
     individuals found under section 454(29) to have good cause 
     and other exceptions for refusing to cooperate) to submit to 
     genetic tests upon the request of any such party, if the 
     request is supported by a sworn statement by the party--

       ``(I) alleging paternity, and setting forth facts 
     establishing a reasonable possibility of the requisite sexual 
     contact between the parties; or
       ``(II) denying paternity, and setting forth facts 
     establishing a reasonable possibility of the nonexistence of 
     sexual contact between the parties.

       ``(ii) Other requirements.--Procedures which require the 
     State agency, in any case in which the agency orders genetic 
     testing--

       ``(I) to pay costs of such tests, subject to recoupment (if 
     the State so elects) from the alleged father if paternity is 
     established; and
       ``(II) to obtain additional testing in any case if an 
     original test result is contested, upon request and advance 
     payment by the contestant.

       ``(C) Voluntary paternity acknowledgment.--
       ``(i) Simple civil process.--Procedures for a simple civil 
     process for voluntarily acknowledging paternity under which 
     the State must provide that, before a mother and a putative 
     father can sign an acknowledgment of paternity, the mother 
     and the putative father must be given notice, orally and in 
     writing, of the alternatives to, the legal consequences of, 
     and the rights (including, if 1 parent is a minor, any rights 
     afforded due to minority status) and responsibilities that 
     arise from, signing the acknowledgment.
       ``(ii) Hospital-based program.--Such procedures must 
     include a hospital-based program for the voluntary 
     acknowledgment of paternity focusing on the period 
     immediately before or after the birth of a child, unless good 
     cause and other exceptions exist which--

       ``(I) shall be defined, taking into account the best 
     interests of the child, and
       ``(II) shall be applied in each case,

     by, at the option of the State, the State agency 
     administering the State program under part A, this part, 
     title XV, or title XIX.
       ``(iii) Paternity establishment services.--

       ``(I) State-offered services.--Such procedures must require 
     the State agency responsible for maintaining birth records to 
     offer voluntary paternity establishment services.
       ``(II) Regulations.--

       ``(aa) Services offered by hospitals and birth record 
     agencies.--The Secretary shall prescribe regulations 
     governing voluntary paternity establishment services offered 
     by hospitals and birth record agencies.
       ``(bb) Services offered by other entities.--The Secretary 
     shall prescribe regulations specifying the types of other 
     entities that may offer voluntary paternity establishment 
     services, and governing the provision of such services, which 
     shall include a requirement that such an entity must use the 
     same notice provisions used by, use the same materials used 
     by, provide the personnel providing such services with the 
     same training provided by, and evaluate the provision of such 
     services in the same manner as the provision of such services 
     is evaluated by, voluntary paternity establishment programs 
     of hospitals and birth record agencies.
       ``(iv) Use of paternity acknowledgment affidavit.--Such 
     procedures must require the State to develop and use an 
     affidavit for the voluntary acknowledgment of paternity which 
     includes the minimum requirements of the affidavit specified 
     by the Secretary under section 452(a)(7) for the voluntary 
     acknowledgment of paternity, and to give full faith and 
     credit to such an affidavit signed in any other State 
     according to its procedures.
       ``(D) Status of signed paternity acknowledgment.--
       ``(i) Inclusion in birth records.--Procedures under which 
     the name of the father shall be included on the record of 
     birth of the child of unmarried parents only if--

       ``(I) the father and mother have signed a voluntary 
     acknowledgment of paternity; or
       ``(II) a court or an administrative agency of competent 
     jurisdiction has issued an adjudication of paternity.

     Nothing in this clause shall preclude a State agency from 
     obtaining an admission of paternity from the father for 
     submission in a judicial or administrative proceeding, or 
     prohibit the issuance of an order in a judicial or 
     administrative proceeding which bases a legal finding of 
     paternity on an admission of paternity by the father and any 
     other additional showing required by State law.

[[Page S8719]]

       ``(ii) Legal finding of paternity.--Procedures under which 
     a signed voluntary acknowledgment of paternity is considered 
     a legal finding of paternity, subject to the right of any 
     signatory to rescind the acknowledgment within the earlier 
     of--

       ``(I) 60 days; or
       ``(II) the date of an administrative or judicial proceeding 
     relating to the child (including a proceeding to establish a 
     support order) in which the signatory is a party.

       ``(iii) Contest.--Procedures under which, after the 60-day 
     period referred to in clause (ii), a signed voluntary 
     acknowledgment of paternity may be challenged in court only 
     on the basis of fraud, duress, or material mistake of fact, 
     with the burden of proof upon the challenger, and under which 
     the legal responsibilities (including child support 
     obligations) of any signatory arising from the acknowledgment 
     may not be suspended during the challenge, except for good 
     cause shown.
       ``(E) Bar on acknowledgment ratification proceedings.--
     Procedures under which judicial or administrative proceedings 
     are not required or permitted to ratify an unchallenged 
     acknowledgment of paternity.
       ``(F) Admissibility of genetic testing results.--
     Procedures--
       ``(i) requiring the admission into evidence, for purposes 
     of establishing paternity, of the results of any genetic test 
     that is--

       ``(I) of a type generally acknowledged as reliable by 
     accreditation bodies designated by the Secretary; and
       ``(II) performed by a laboratory approved by such an 
     accreditation body;

       ``(ii) requiring an objection to genetic testing results to 
     be made in writing not later than a specified number of days 
     before any hearing at which the results may be introduced 
     into evidence (or, at State option, not later than a 
     specified number of days after receipt of the results); and
       ``(iii) making the test results admissible as evidence of 
     paternity without the need for foundation testimony or other 
     proof of authenticity or accuracy, unless objection is made.
       ``(G) Presumption of paternity in certain cases.--
     Procedures which create a rebuttable or, at the option of the 
     State, conclusive presumption of paternity upon genetic 
     testing results indicating a threshold probability that the 
     alleged father is the father of the child.
       ``(H) Default orders.--Procedures requiring a default order 
     to be entered in a paternity case upon a showing of service 
     of process on the defendant and any additional showing 
     required by State law.
       ``(I) No right to jury trial.--Procedures providing that 
     the parties to an action to establish paternity are not 
     entitled to a trial by jury.
       ``(J) Temporary support order based on probable paternity 
     in contested cases.--Procedures which require that a 
     temporary order be issued, upon motion by a party, requiring 
     the provision of child support pending an administrative or 
     judicial determination of parentage, if there is clear and 
     convincing evidence of paternity (on the basis of genetic 
     tests or other evidence).
       ``(K) Proof of certain support and paternity establishment 
     costs.--Procedures under which bills for pregnancy, 
     childbirth, and genetic testing are admissible as evidence 
     without requiring third-party foundation testimony, and shall 
     constitute prima facie evidence of amounts incurred for such 
     services or for testing on behalf of the child.
       ``(L) Standing of putative fathers.--Procedures ensuring 
     that the putative father has a reasonable opportunity to 
     initiate a paternity action.
       ``(M) Filing of acknowledgments and adjudications in state 
     registry of birth records.--Procedures under which voluntary 
     acknowledgments and adjudications of paternity by judicial or 
     administrative processes are filed with the State registry of 
     birth records for comparison with information in the State 
     case registry.''.
       (b) National Paternity Acknowledgment Affidavit.--Section 
     452(a)(7) (42 U.S.C. 652(a)(7)) is amended by inserting ``, 
     and specify the minimum requirements of an affidavit to be 
     used for the voluntary acknowledgment of paternity which 
     shall include the social security number of each parent and, 
     after consultation with the States, other common elements as 
     determined by such designee'' before the semicolon.
       (c) Conforming Amendment.--Section 468 (42 U.S.C. 668) is 
     amended by striking ``a simple civil process for voluntarily 
     acknowledging paternity and''.

     SEC. 2332. OUTREACH FOR VOLUNTARY PATERNITY ESTABLISHMENT.

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

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

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

            Subchapter E--Program Administration and Funding

     SEC. 2341. PERFORMANCE-BASED INCENTIVES AND PENALTIES.

       (a) Development of New System.--The Secretary of Health and 
     Human Services, in consultation with State directors of 
     programs under part D of title IV of the Social Security Act, 
     shall develop a new incentive system to replace, in a revenue 
     neutral manner, the system under section 458 of such Act. The 
     new system shall provide additional payments to any State 
     based on such State's performance under such a program. Not 
     later than November 1, 1996, the Secretary shall report on 
     the new system to the Committee on Ways and Means of the 
     House of Representatives and the Committee on Finance of the 
     Senate.
       (b) Conforming Amendments to Present System.--Section 458 
     (42 U.S.C. 658) is amended--
       (1) in subsection (a), by striking ``aid to families with 
     dependent children under a State plan approved under part A 
     of this title'' and inserting ``assistance under a program 
     funded under part A'';
       (2) in subsection (b)(1)(A), by striking ``section 
     402(a)(26)'' and inserting ``section 408(a)(4)'';
       (3) in subsections (b) and (c)--
       (A) by striking ``AFDC collections'' each place it appears 
     and inserting ``title IV-A collections'', and
       (B) by striking ``non-AFDC collections'' each place it 
     appears and inserting ``non-title IV-A collections''; and
       (4) in subsection (c), by striking ``combined AFDC/non-AFDC 
     administrative costs'' both places it appears and inserting 
     ``combined title IV-A/non-title IV-A administrative costs''.
       (c) Calculation of Paternity Establishment Percentage.--
       (1) Section 452(g)(1)(A) (42 U.S.C. 652(g)(1)(A)) is 
     amended by striking ``75'' and inserting ``90''.
       (2) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is amended--
       (A) by redesignating subparagraphs (B) through (E) as 
     subparagraphs (C) through (F), respectively, and by inserting 
     after subparagraph (A) the following new subparagraph:
       ``(B) for a State with a paternity establishment percentage 
     of not less than 75 percent but less than 90 percent for such 
     fiscal year, the paternity establishment percentage of the 
     State for the immediately preceding fiscal year plus 2 
     percentage points;''; and
       (B) by adding at the end the following new flush sentence:
     ``In determining compliance under this section, a State may 
     use as its paternity establishment percentage either the 
     State's IV-D paternity establishment percentage (as defined 
     in paragraph (2)(A)) or the State's statewide paternity 
     establishment percentage (as defined in paragraph (2)(B)).''.
       (3) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended--
       (A) in subparagraph (A)--
       (i) in the matter preceding clause (i)--

       (I) by striking ``paternity establishment percentage'' and 
     inserting ``IV-D paternity establishment percentage''; and
       (II) by striking ``(or all States, as the case may be)''; 
     and

       (ii) by striking ``and'' at the end thereof;

[[Page S8720]]

       (B) by redesignating subparagraph (B) as subparagraph (C) 
     and by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) the term `statewide paternity establishment 
     percentage' means, with respect to a State for a fiscal year, 
     the ratio (expressed as a percentage) that the total number 
     of minor children--
       ``(i) who have been born out of wedlock, and
       ``(ii) the paternity of whom has been established or 
     acknowledged during the fiscal year,
     bears to the total number of children born out of wedlock 
     during the preceding fiscal year; and''.
       (4) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is amended--
       (A) by striking subparagraph (A) and redesignating 
     subparagraphs (B) and (C) as subparagraphs (A) and (B), 
     respectively; and
       (B) in subparagraph (A) (as so redesignated), by striking 
     ``the percentage of children born out-of-wedlock in a State'' 
     and inserting ``the percentage of children in a State who are 
     born out of wedlock or for whom support has not been 
     established''.
       (d) Effective Dates.--
       (1) Incentive adjustments.--
       (A) In general.--The system developed under subsection (a) 
     and the amendments made by subsection (b) shall become 
     effective on October 1, 1998, except to the extent provided 
     in subparagraph (B).
       (B) Application of section 458.--Section 458 of the Social 
     Security Act, as in effect on the day before the date of the 
     enactment of this section, shall be effective for purposes of 
     incentive payments to States for fiscal years before fiscal 
     year 1999.
       (2) Penalty reductions.--The amendments made by subsection 
     (c) shall become effective with respect to calendar quarters 
     beginning on or after the date of the enactment of this Act.

     SEC. 2342. FEDERAL AND STATE REVIEWS AND AUDITS.

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

     SEC. 2343. REQUIRED REPORTING PROCEDURES.

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

     SEC. 2344. AUTOMATED DATA PROCESSING REQUIREMENTS.

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

     ``SEC. 454A. AUTOMATED DATA PROCESSING.

       ``(a) In General.--In order for a State to meet the 
     requirements of this section, the State agency administering 
     the State program under this part shall have in operation a 
     single statewide automated data processing and information 
     retrieval system which has the capability to perform the 
     tasks specified in this section with the frequency and in the 
     manner required by or under this part.
       ``(b) Program Management.--The automated system required by 
     this section shall perform such functions as the Secretary 
     may specify relating to management of the State program under 
     this part, including--
       ``(1) controlling and accounting for use of Federal, State, 
     and local funds in carrying out the program; and
       ``(2) maintaining the data necessary to meet Federal 
     reporting requirements under this part on a timely basis.
       ``(c) Calculation of Performance Indicators.--In order to 
     enable the Secretary to determine the incentive payments and 
     penalty adjustments required by sections 452(g) and 458, the 
     State agency shall--
       ``(1) use the automated system--
       ``(A) to maintain the requisite data on State performance 
     with respect to paternity establishment and child support 
     enforcement in the State; and
       ``(B) to calculate the paternity establishment percentage 
     for the State for each fiscal year; and
       ``(2) have in place systems controls to ensure the 
     completeness and reliability of, and ready access to, the 
     data described in paragraph (1)(A), and the accuracy of the 
     calculations described in paragraph (1)(B).
       ``(d) Information Integrity and Security.--The State agency 
     shall have in effect safeguards on the integrity, accuracy, 
     and completeness of, access to, and use of data in the 
     automated system required by this section, which shall 
     include the following (in addition to such other safeguards 
     as the Secretary may specify in regulations):
       ``(1) Policies restricting access.--Written policies 
     concerning access to data by State agency personnel, and 
     sharing of data with other persons, which--
       ``(A) permit access to and use of data only to the extent 
     necessary to carry out the State program under this part; and
       ``(B) specify the data which may be used for particular 
     program purposes, and the personnel permitted access to such 
     data.
       ``(2) Systems controls.--Systems controls (such as 
     passwords or blocking of fields) to ensure strict adherence 
     to the policies described in paragraph (1).
       ``(3) Monitoring of access.--Routine monitoring of access 
     to and use of the automated system, through methods such as 
     audit trails and feedback mechanisms, to guard against and 
     promptly identify unauthorized access or use.
       ``(4) Training and information.--Procedures to ensure that 
     all personnel (including State and local agency staff and 
     contractors) who may have access to or be required to use 
     confidential program data are informed of applicable 
     requirements and penalties (including those in section 6103 
     of the Internal Revenue Code of 1986), and are adequately 
     trained in security procedures.
       ``(5) Penalties.--Administrative penalties (up to and 
     including dismissal from employment) for unauthorized access 
     to, or disclosure or use of, confidential data.''.
       (3) Regulations.--The Secretary of Health and Human 
     Services shall prescribe final regulations for implementation 
     of section 454A of the Social Security Act not later than 2 
     years after the date of the enactment of this Act.
       (4) Implementation timetable.--Section 454(24) (42 U.S.C. 
     654(24)), as amended by section 2303(a)(1) of this Act, is 
     amended to read as follows:

[[Page S8721]]

       ``(24) provide that the State will have in effect an 
     automated data processing and information retrieval system--
       ``(A) by October 1, 1997, which meets all requirements of 
     this part which were enacted on or before the date of 
     enactment of the Family Support Act of 1988, and
       ``(B) by October 1, 2000, which meets all requirements of 
     this part enacted on or before the date of the enactment of 
     the Personal Responsibility and Work Opportunity Act of 1996, 
     except that such deadline shall be extended by 1 day for each 
     day (if any) by which the Secretary fails to meet the 
     deadline imposed by section 2344(a)(3) of the Personal 
     Responsibility and Work Opportunity Act of 1996;''.
       (b) Special Federal Matching Rate for Development Costs of 
     Automated Systems.--
       (1) In general.--Section 455(a) (42 U.S.C. 655(a)) is 
     amended--
       (A) in paragraph (1)(B)--
       (i) by striking ``90 percent'' and inserting ``the percent 
     specified in paragraph (3)'';
       (ii) by striking ``so much of''; and
       (iii) by striking ``which the Secretary'' and all that 
     follows and inserting ``, and''; and
       (B) by adding at the end the following new paragraph:
       ``(3)(A) The Secretary shall pay to each State, for each 
     quarter in fiscal years 1996 and 1997, 90 percent of so much 
     of the State expenditures described in paragraph (1)(B) as 
     the Secretary finds are for a system meeting the requirements 
     specified in section 454(16) (as in effect on September 30, 
     1995) but limited to the amount approved for States in the 
     advance planning documents of such States submitted on or 
     before September 30, 1995. Notwithstanding the preceding 
     sentence, any payment to a State with respect to fiscal year 
     1997 shall be made in one payment in fiscal year 1998.
       ``(B)(i) The Secretary shall pay to each State, for each 
     quarter in fiscal years 1996 through 2001, the percentage 
     specified in clause (ii) of so much of the State expenditures 
     described in paragraph (1)(B) as the Secretary finds are for 
     a system meeting the requirements of sections 454(16) and 
     454A.
       ``(ii) The percentage specified in this clause is 80 
     percent.''.
       (2) Temporary limitation on payments under special federal 
     matching rate.--
       (A) In general.--The Secretary of Health and Human Services 
     may not pay more than $400,000,000 in the aggregate under 
     section 455(a)(3)(B) of the Social Security Act for fiscal 
     years 1996 through 2001.
       (B) Allocation of limitation among states.--The total 
     amount payable to a State under section 455(a)(3)(B) of such 
     Act for fiscal years 1996 through 2001 shall not exceed the 
     limitation determined for the State by the Secretary of 
     Health and Human Services in regulations.
       (C) Allocation formula.--The regulations referred to in 
     subparagraph (B) shall prescribe a formula for allocating the 
     amount specified in subparagraph (A) among States with plans 
     approved under part D of title IV of the Social Security Act, 
     which shall take into account--
       (i) the relative size of State caseloads under such part; 
     and
       (ii) the level of automation needed to meet the automated 
     data processing requirements of such part.
       (c) Conforming Amendment.--Section 123(c) of the Family 
     Support Act of 1988 (102 Stat. 2352; Public Law 100-485) is 
     repealed.

     SEC. 2345. TECHNICAL ASSISTANCE.

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

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

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

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

       (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is 
     amended--
       (A) in the matter preceding clause (i)--
       (i) by striking ``with the data required under each clause 
     being separately stated for cases'' and inserting 
     ``separately stated for cases'';
       (ii) by striking ``cases where the child was formerly 
     receiving'' and inserting ``or formerly received'';
       (iii) by inserting ``or 1912'' after ``471(a)(17)''; and
       (iv) by inserting ``for'' before ``all other'';
       (B) in each of clauses (i) and (ii), by striking ``, and 
     the total amount of such obligations'';
       (C) in clause (iii), by striking ``described in'' and all 
     that follows and inserting ``in which support was collected 
     during the fiscal year;'';
       (D) by striking clause (iv); and
       (E) by redesignating clause (v) as clause (vii), and 
     inserting after clause (iii) the following new clauses:
       ``(iv) the total amount of support collected during such 
     fiscal year and distributed as current support;
       ``(v) the total amount of support collected during such 
     fiscal year and distributed as arrearages;
       ``(vi) the total amount of support due and unpaid for all 
     fiscal years; and''.
       (3) Section 452(a)(10)(G) (42 U.S.C. 652(a)(10)(G)) is 
     amended by striking ``on the use of Federal courts and''.
       (4) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended--
       (A) in subparagraph (H), by striking ``and'';
       (B) in subparagraph (I), by striking the period and 
     inserting ``; and''; and
       (C) by inserting after subparagraph (I) the following new 
     subparagraph:
       ``(J) compliance, by State, with the standards established 
     pursuant to subsections (h) and (i).''.
       (5) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended by 
     striking all that follows subparagraph (J), as added by 
     paragraph (4).
       (b) Effective Date.--The amendments made by subsection (a) 
     shall be effective with respect to fiscal year 1997 and 
     succeeding fiscal years.

     Subchapter F--Establishment and Modification of Support Orders

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

       Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amended to 
     read as follows:
       ``(10) Review and adjustment of support orders upon 
     request.--Procedures under which the State shall review and 
     adjust each support order being enforced under this part if 
     there is an assignment under part A or upon the request of 
     either parent, and may review and adjust any other support 
     order being enforced under this part. Such procedures shall 
     provide the following:
       ``(A) In general.--
       ``(i) 3-year cycle.--Except as provided in subparagraphs 
     (B) and (C), the State shall review and, as appropriate, 
     adjust the support order every 3 years, taking into account 
     the best interests of the child involved.
       ``(ii) Methods of adjustment.--The State may elect to 
     review and, if appropriate, adjust an order pursuant to 
     clause (i) by--

       ``(I) reviewing and, if appropriate, adjusting the order in 
     accordance with the guidelines established pursuant to 
     section 467(a) if the amount of the child support award under 
     the order differs from the amount that would be awarded in 
     accordance with the guidelines; or
       ``(II) applying a cost-of-living adjustment to the order in 
     accordance with a formula developed by the State and permit 
     either party to contest the adjustment, within 30 days after 
     the date of the notice of the adjustment, by making a request 
     for review and, if appropriate, adjustment of the order in 
     accordance with the child support guidelines established 
     pursuant to section 467(a).

       ``(iii) No proof of change in circumstances necessary.--Any 
     adjustment under this subparagraph (A) shall be made without 
     a requirement for proof or showing of a change in 
     circumstances.

[[Page S8722]]

       ``(B) Automated method.--The State may use automated 
     methods (including automated comparisons with wage or State 
     income tax data) to identify orders eligible for review, 
     conduct the review, identify orders eligible for adjustment, 
     and apply the appropriate adjustment to the orders eligible 
     for adjustment under the threshold established by the State.
       ``(C) Request upon substantial change in circumstances.--
     The State shall, at the request of either parent subject to 
     such an order or of any State child support enforcement 
     agency, review and, if appropriate, adjust the order in 
     accordance with the guidelines established pursuant to 
     section 467(a) based upon a substantial change in the 
     circumstances of either parent.
       ``(D) Notice of right to review.--The State shall provide 
     notice not less than once every 3 years to the parents 
     subject to such an order informing them of their right to 
     request the State to review and, if appropriate, adjust the 
     order pursuant to this paragraph. The notice may be included 
     in the order.''.

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

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

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

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

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

       ``(a) In General.--Notwithstanding any other provision of 
     Federal or State law, a financial institution shall not be 
     liable under any Federal or State law to any person for 
     disclosing any financial record of an individual to a State 
     child support enforcement agency attempting to establish, 
     modify, or enforce a child support obligation of such 
     individual.
       ``(b) Prohibition of Disclosure of Financial Record 
     Obtained by State Child Support Enforcement Agency.--A State 
     child support enforcement agency which obtains a financial 
     record of an individual from a financial institution pursuant 
     to subsection (a) may disclose such financial record only for 
     the purpose of, and to the extent necessary in, establishing, 
     modifying, or enforcing a child support obligation of such 
     individual.
       ``(c) Civil Damages for Unauthorized Disclosure.--
       ``(1) Disclosure by state officer or employee.--If any 
     person knowingly, or by reason of negligence, discloses a 
     financial record of an individual in violation of subsection 
     (b), such individual may bring a civil action for damages 
     against such person in a district court of the United States.
       ``(2) No liability for good faith but erroneous 
     interpretation.--No liability shall arise under this 
     subsection with respect to any disclosure which results from 
     a good faith, but erroneous, interpretation of subsection 
     (b).
       ``(3) Damages.--In any action brought under paragraph (1), 
     upon a finding of liability on the part of the defendant, the 
     defendant shall be liable to the plaintiff in an amount equal 
     to the sum of--
       ``(A) the greater of--
       ``(i) $1,000 for each act of unauthorized disclosure of a 
     financial record with respect to which such defendant is 
     found liable; or
       ``(ii) the sum of--

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

       ``(B) the costs (including attorney's fees) of the action.
       ``(d) Definitions.--For purposes of this section--
       ``(1) Financial institution.--The term `financial 
     institution' means--
       ``(A) a depository institution, as defined in section 3(c) 
     of the Federal Deposit Insurance Act (12 U.S.C. 1813(c));
       ``(B) an institution-affiliated party, as defined in 
     section 3(u) of such Act (12 U.S.C. 1813(u));
       ``(C) any Federal credit union or State credit union, as 
     defined in section 101 of the Federal Credit Union Act (12 
     U.S.C. 1752), including an institution-affiliated party of 
     such a credit union, as defined in section 206(r) of such Act 
     (12 U.S.C. 1786(r)); and
       ``(D) any benefit association, insurance company, safe 
     deposit company, money-market mutual fund, or similar entity 
     authorized to do business in the State.
       ``(2) Financial record.--The term `financial record' has 
     the meaning given such term in section 1101 of the Right to 
     Financial Privacy Act of 1978 (12 U.S.C. 3401).''.

              Subchapter G--Enforcement of Support Orders

     SEC. 2361. INTERNAL REVENUE SERVICE COLLECTION OF ARREARAGES.

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

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

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

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

       ``(a) Consent to Support Enforcement.--Notwithstanding any 
     other provision of law (including section 207 of this Act and 
     section 5301 of title 38, United States Code), effective 
     January 1, 1975, moneys (the entitlement to which is based 
     upon remuneration for employment) due from, or payable by, 
     the United States or the District of Columbia (including any 
     agency, subdivision, or instrumentality thereof) to any 
     individual, including members of the Armed Forces of the 
     United States, shall be subject, in like manner and to the 
     same extent as if the United States or the District of 
     Columbia were a private person, to withholding in accordance 
     with State law enacted pursuant to subsections (a)(1) and (b) 
     of section 466 and regulations of the Secretary under such 
     subsections, and to any other legal process brought, by a 
     State agency administering a program under a State plan 
     approved under this part or by an individual obligee, to 
     enforce the legal obligation of the individual to provide 
     child support or alimony.
       ``(b) Consent to Requirements Applicable to Private 
     Person.--With respect to notice to withhold income pursuant 
     to subsection (a)(1) or (b) of section 466, or any other 
     order or process to enforce support obligations against an 
     individual (if the order or process contains or is 
     accompanied by sufficient data to permit prompt 
     identification of the individual and the moneys involved), 
     each governmental entity specified in subsection (a) shall be 
     subject to the same requirements as would apply if the entity 
     were a private person, except as otherwise provided in this 
     section.
       ``(c) Designation of Agent; Response to Notice or Process--
       ``(1) Designation of agent.--The head of each agency 
     subject to this section shall--
       ``(A) designate an agent or agents to receive orders and 
     accept service of process in matters relating to child 
     support or alimony; and
       ``(B) annually publish in the Federal Register the 
     designation of the agent or agents, identified by title or 
     position, mailing address, and telephone number.
       ``(2) Response to notice or process.--If an agent 
     designated pursuant to paragraph (1) of this subsection 
     receives notice pursuant to State procedures in effect 
     pursuant to subsection (a)(1) or (b) of section 466, or is 
     effectively served with any order, process, or interrogatory, 
     with respect to an individual's child support or alimony 
     payment obligations, the agent shall--
       ``(A) as soon as possible (but not later than 15 days) 
     thereafter, send written notice of the notice or service 
     (together with a copy of the notice or service) to the 
     individual at the duty station or last-known home address of 
     the individual;
       ``(B) within 30 days (or such longer period as may be 
     prescribed by applicable State law) after receipt of a notice 
     pursuant to such State procedures, comply with all applicable 
     provisions of section 466; and
       ``(C) within 30 days (or such longer period as may be 
     prescribed by applicable State law) after effective service 
     of any other such order, process, or interrogatory, respond 
     to the order, process, or interrogatory.

[[Page S8723]]

       ``(d) Priority of Claims.--If a governmental entity 
     specified in subsection (a) receives notice or is served with 
     process, as provided in this section, concerning amounts owed 
     by an individual to more than 1 person--
       ``(1) support collection under section 466(b) must be given 
     priority over any other process, as provided in section 
     466(b)(7);
       ``(2) allocation of moneys due or payable to an individual 
     among claimants under section 466(b) shall be governed by 
     section 466(b) and the regulations prescribed under such 
     section; and
       ``(3) such moneys as remain after compliance with 
     paragraphs (1) and (2) shall be available to satisfy any 
     other such processes on a first-come, first-served basis, 
     with any such process being satisfied out of such moneys as 
     remain after the satisfaction of all such processes which 
     have been previously served.
       ``(e) No Requirement to Vary Pay Cycles.--A governmental 
     entity that is affected by legal process served for the 
     enforcement of an individual's child support or alimony 
     payment obligations shall not be required to vary its normal 
     pay and disbursement cycle in order to comply with the legal 
     process.
       ``(f) Relief From Liability.--
       ``(1) Neither the United States, nor the government of the 
     District of Columbia, nor any disbursing officer shall be 
     liable with respect to any payment made from moneys due or 
     payable from the United States to any individual pursuant to 
     legal process regular on its face, if the payment is made in 
     accordance with this section and the regulations issued to 
     carry out this section.
       ``(2) No Federal employee whose duties include taking 
     actions necessary to comply with the requirements of 
     subsection (a) with regard to any individual shall be subject 
     under any law to any disciplinary action or civil or criminal 
     liability or penalty for, or on account of, any disclosure of 
     information made by the employee in connection with the 
     carrying out of such actions.
       ``(g) Regulations.--Authority to promulgate regulations for 
     the implementation of this section shall, insofar as this 
     section applies to moneys due from (or payable by)--
       ``(1) the United States (other than the legislative or 
     judicial branches of the Federal Government) or the 
     government of the District of Columbia, be vested in the 
     President (or the designee of the President);
       ``(2) the legislative branch of the Federal Government, be 
     vested jointly in the President pro tempore of the Senate and 
     the Speaker of the House of Representatives (or their 
     designees), and
       ``(3) the judicial branch of the Federal Government, be 
     vested in the Chief Justice of the United States (or the 
     designee of the Chief Justice).
       ``(h) Moneys Subject to Process.--
       ``(1) In general.--Subject to paragraph (2), moneys paid or 
     payable to an individual which are considered to be based 
     upon remuneration for employment, for purposes of this 
     section--
       ``(A) consist of--
       ``(i) compensation paid or payable for personal services of 
     the individual, whether the compensation is denominated as 
     wages, salary, commission, bonus, pay, allowances, or 
     otherwise (including severance pay, sick pay, and incentive 
     pay);
       ``(ii) periodic benefits (including a periodic benefit as 
     defined in section 228(h)(3)) or other payments--

       ``(I) under the insurance system established by title II;
       ``(II) under any other system or fund established by the 
     United States which provides for the payment of pensions, 
     retirement or retired pay, annuities, dependents' or 
     survivors' benefits, or similar amounts payable on account of 
     personal services performed by the individual or any other 
     individual;
       ``(III) as compensation for death under any Federal 
     program;
       ``(IV) under any Federal program established to provide 
     `black lung' benefits; or
       ``(V) by the Secretary of Veterans Affairs as compensation 
     for a service-connected disability paid by the Secretary to a 
     former member of the Armed Forces who is in receipt of 
     retired or retainer pay if the former member has waived a 
     portion of the retired or retainer pay in order to receive 
     such compensation; and

       ``(iii) worker's compensation benefits paid under Federal 
     or State law but
       ``(B) do not include any payment--
       ``(i) by way of reimbursement or otherwise, to defray 
     expenses incurred by the individual in carrying out duties 
     associated with the employment of the individual; or
       ``(ii) as allowances for members of the uniformed services 
     payable pursuant to chapter 7 of title 37, United States 
     Code, as prescribed by the Secretaries concerned (defined by 
     section 101(5) of such title) as necessary for the efficient 
     performance of duty.
       ``(2) Certain amounts excluded.--In determining the amount 
     of any moneys due from, or payable by, the United States to 
     any individual, there shall be excluded amounts which--
       ``(A) are owed by the individual to the United States;
       ``(B) are required by law to be, and are, deducted from the 
     remuneration or other payment involved, including Federal 
     employment taxes, and fines and forfeitures ordered by court-
     martial;
       ``(C) are properly withheld for Federal, State, or local 
     income tax purposes, if the withholding of the amounts is 
     authorized or required by law and if amounts withheld are not 
     greater than would be the case if the individual claimed all 
     dependents to which he was entitled (the withholding of 
     additional amounts pursuant to section 3402(i) of the 
     Internal Revenue Code of 1986 may be permitted only when the 
     individual presents evidence of a tax obligation which 
     supports the additional withholding);
       ``(D) are deducted as health insurance premiums;
       ``(E) are deducted as normal retirement contributions (not 
     including amounts deducted for supplementary coverage); or
       ``(F) are deducted as normal life insurance premiums from 
     salary or other remuneration for employment (not including 
     amounts deducted for supplementary coverage).
       ``(i) Definitions.--For purposes of this section--
       ``(1) United states.--The term `United States' includes any 
     department, agency, or instrumentality of the legislative, 
     judicial, or executive branch of the Federal Government, the 
     United States Postal Service, the Postal Rate Commission, any 
     Federal corporation created by an Act of Congress that is 
     wholly owned by the Federal Government, and the governments 
     of the territories and possessions of the United States.
       ``(2) Child support.--The term `child support', when used 
     in reference to the legal obligations of an individual to 
     provide such support, means amounts required to be paid under 
     a judgment, decree, or order, whether temporary, final, or 
     subject to modification, issued by a court or an 
     administrative agency of competent jurisdiction, for the 
     support and maintenance of a child, including a child who has 
     attained the age of majority under the law of the issuing 
     State, or a child and the parent with whom the child is 
     living, which provides for monetary support, health care, 
     arrearages or reimbursement, and which may include other 
     related costs and fees, interest and penalties, income 
     withholding, attorney's fees, and other relief.
       ``(3) Alimony.--
       ``(A) In general.--The term `alimony', when used in 
     reference to the legal obligations of an individual to 
     provide the same, means periodic payments of funds for the 
     support and maintenance of the spouse (or former spouse) of 
     the individual, and (subject to and in accordance with State 
     law) includes separate maintenance, alimony pendente lite, 
     maintenance, and spousal support, and includes attorney's 
     fees, interest, and court costs when and to the extent that 
     the same are expressly made recoverable as such pursuant to a 
     decree, order, or judgment issued in accordance with 
     applicable State law by a court of competent jurisdiction.
       ``(B) Exceptions.--Such term does not include--
       ``(i) any child support; or
       ``(ii) any payment or transfer of property or its value by 
     an individual to the spouse or a former spouse of the 
     individual in compliance with any community property 
     settlement, equitable distribution of property, or other 
     division of property between spouses or former spouses.
       ``(4) Private person.--The term `private person' means a 
     person who does not have sovereign or other special immunity 
     or privilege which causes the person not to be subject to 
     legal process.
       ``(5) Legal process.--The term `legal process' means any 
     writ, order, summons, or other similar process in the nature 
     of garnishment--
       ``(A) which is issued by--
       ``(i) a court or an administrative agency of competent 
     jurisdiction in any State, territory, or possession of the 
     United States;
       ``(ii) a court or an administrative agency of competent 
     jurisdiction in any foreign country with which the United 
     States has entered into an agreement which requires the 
     United States to honor the process; or
       ``(iii) an authorized official pursuant to an order of such 
     a court or an administrative agency of competent jurisdiction 
     or pursuant to State or local law; and
       ``(B) which is directed to, and the purpose of which is to 
     compel, a governmental entity which holds moneys which are 
     otherwise payable to an individual to make a payment from the 
     moneys to another party in order to satisfy a legal 
     obligation of the individual to provide child support or make 
     alimony payments.''.
       (b) Conforming Amendments.--
       (1) To part d of title iv.--Sections 461 and 462 (42 U.S.C. 
     661 and 662) are repealed.
       (2) To title 5, united states code.--Section 5520a of title 
     5, United States Code, is amended, in subsections (h)(2) and 
     (i), by striking ``sections 459, 461, and 462 of the Social 
     Security Act (42 U.S.C. 659, 661, and 662)'' and inserting 
     ``section 459 of the Social Security Act (42 U.S.C. 659)''.
       (c) Military Retired and Retainer Pay.--
       (1) Definition of court.--Section 1408(a)(1) of title 10, 
     United States Code, is amended--
       (A) by striking ``and'' at the end of subparagraph (B);
       (B) by striking the period at the end of subparagraph (C) 
     and inserting ``; and''; and
       (C) by adding after subparagraph (C) the following new 
     subparagraph:
       ``(D) any administrative or judicial tribunal of a State 
     competent to enter orders for support or maintenance 
     (including a State agency administering a program under a 
     State plan approved under part D of title IV of the Social 
     Security Act), and, for purposes

[[Page S8724]]

     of this subparagraph, the term `State' includes the District 
     of Columbia, the Commonwealth of Puerto Rico, the Virgin 
     Islands, Guam, and American Samoa.''.
       (2) Definition of court order.--Section 1408(a)(2) of such 
     title is amended--
       (A) by inserting ``or a support order, as defined in 
     section 453(p) of the Social Security Act (42 U.S.C. 
     653(p)),'' before ``which--'';
       (B) in subparagraph (B)(i), by striking ``(as defined in 
     section 462(b) of the Social Security Act (42 U.S.C. 
     662(b)))'' and inserting ``(as defined in section 459(i)(2) 
     of the Social Security Act (42 U.S.C. 659(i)(2)))''; and
       (C) in subparagraph (B)(ii), by striking ``(as defined in 
     section 462(c) of the Social Security Act (42 U.S.C. 
     662(c)))'' and inserting ``(as defined in section 459(i)(3) 
     of the Social Security Act (42 U.S.C. 659(i)(3)))''.
       (3) Public payee.--Section 1408(d) of such title is 
     amended--
       (A) in the heading, by inserting ``(or for Benefit of)'' 
     before ``Spouse or''; and
       (B) in paragraph (1), in the 1st sentence, by inserting 
     ``(or for the benefit of such spouse or former spouse to a 
     State disbursement unit established pursuant to section 454B 
     of the Social Security Act or other public payee designated 
     by a State, in accordance with part D of title IV of the 
     Social Security Act, as directed by court order, or as 
     otherwise directed in accordance with such part D)'' before 
     ``in an amount sufficient''.
       (4) Relationship to part d of title iv.--Section 1408 of 
     such title is amended by adding at the end the following new 
     subsection:
       ``(j) Relationship to Other Laws.--In any case involving an 
     order providing for payment of child support (as defined in 
     section 459(i)(2) of the Social Security Act) by a member who 
     has never been married to the other parent of the child, the 
     provisions of this section shall not apply, and the case 
     shall be subject to the provisions of section 459 of such 
     Act.''.
       (d) Effective Date.--The amendments made by this section 
     shall become effective 6 months after the date of the 
     enactment of this Act.

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

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

     SEC. 2364. VOIDING OF FRAUDULENT TRANSFERS.

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

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

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

     SEC. 2366. DEFINITION OF SUPPORT ORDER.

       Section 453 (42 U.S.C. 653) as amended by sections 2316 and 
     2345(b) of this Act, is amended by adding at the end the 
     following new subsection:

[[Page S8725]]

       ``(p) Support Order Defined.--As used in this part, the 
     term `support order' means a judgment, decree, or order, 
     whether temporary, final, or subject to modification, issued 
     by a court or an administrative agency of competent 
     jurisdiction, for the support and maintenance of a child, 
     including a child who has attained the age of majority under 
     the law of the issuing State, or a child and the parent with 
     whom the child is living, which provides for monetary 
     support, health care, arrearages, or reimbursement, and which 
     may include related costs and fees, interest and penalties, 
     income withholding, attorneys' fees, and other relief.''.

     SEC. 2367. REPORTING ARREARAGES TO CREDIT BUREAUS.

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

     SEC. 2368. LIENS.

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

     SEC. 2369. STATE LAW AUTHORIZING SUSPENSION OF LICENSES.

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

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

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

     SEC. 2371. INTERNATIONAL SUPPORT ENFORCEMENT.

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

     ``SEC. 459A. INTERNATIONAL SUPPORT ENFORCEMENT.

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

[[Page S8726]]

     costs may at State option be assessed against the 
     obligor).''.

     SEC. 2372. FINANCIAL INSTITUTION DATA MATCHES.

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

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

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

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

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

     SEC. 2375. CHILD SUPPORT ENFORCEMENT FOR INDIAN TRIBES.

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

                     Subchapter H--Medical Support

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

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

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

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

[[Page S8727]]

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

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

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

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

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

        Subchapter J--Effective Dates and Conforming Amendments

     SEC. 2391. EFFECTIVE DATES AND CONFORMING AMENDMENTS.

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

     CHAPTER 4--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

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

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

             Subchapter A--Eligibility for Federal Benefits

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

       (a) In General.--Notwithstanding any other provision of law 
     and except as provided in subsection (b), an alien who is not 
     a qualified alien (as defined in section 2431) is not 
     eligible for any Federal public benefit (as defined in 
     subsection (c)).
       (b) Exceptions.--
       (1) Subsection (a) shall not apply with respect to the 
     following Federal public benefits:
       (A) Emergency medical services under title XV or XIX of the 
     Social Security Act.
       (B) Short-term, non-cash, in-kind emergency disaster 
     relief.
       (C)(i) Public health assistance for immunizations.
       (ii) Public health assistance for testing and treatment of 
     a communicable disease if the Secretary of Health and Human 
     Services determines that it is necessary to prevent the 
     spread of such disease.
       (D) Programs, services, or assistance (such as soup 
     kitchens, crisis counseling and intervention, and short-term 
     shelter) specified by the Attorney General, in the Attorney 
     General's sole and unreviewable discretion after consultation 
     with appropriate Federal agencies and departments, which (i) 
     deliver in-kind services at the community level, including 
     through public or private nonprofit agencies; (ii) do not 
     condition the provision of assistance, the amount of 
     assistance provided, or the cost of assistance provided on 
     the individual recipient's income or resources; and (iii) are 
     necessary for the protection of life or safety.
       (E) Programs for housing or community development 
     assistance or financial assistance administered by the 
     Secretary of Housing and Urban Development, any program under 
     title V of the Housing Act of 1949, or any assistance under 
     section 306C of the Consolidated Farm and Rural Development 
     Act, to the extent that the alien is receiving such a benefit 
     on the date of the enactment of this Act.
       (2) Subsection (a) shall not apply to any benefit payable 
     under title II of the Social Security Act to an alien who is 
     lawfully present in the United States as determined by the 
     Attorney General, to any benefit if nonpayment of such 
     benefit would contravene an international agreement described 
     in section 233 of the Social Security Act, to any benefit if 
     nonpayment would be contrary to section 202(t) of the Social 
     Security Act, or to any benefit payable under title II of the 
     Social Security Act to which entitlement is based on an 
     application filed

[[Page S8728]]

     in or before the month in which this Act becomes law.
       (c) Federal Public Benefit Defined.--
       (1) Except as provided in paragraph (2), for purposes of 
     this chapter the term ``Federal public benefit'' means--
       (A) any grant, contract, loan, professional license, or 
     commercial license provided by an agency of the United States 
     or by appropriated funds of the United States; and
       (B) any retirement, welfare, health, disability, public or 
     assisted housing, postsecondary education, food assistance, 
     unemployment benefit, or any other similar benefit for which 
     payments or assistance are provided to an individual, 
     household, or family eligibility unit by an agency of the 
     United States or by appropriated funds of the United States.
       (2) Such term shall not apply--
       (A) to any contract, professional license, or commercial 
     license for a nonimmigrant whose visa for entry is related to 
     such employment in the United States; or
       (B) with respect to benefits for an alien who as a work 
     authorized nonimmigrant or as an alien lawfully admitted for 
     permanent residence under the Immigration and Nationality Act 
     qualified for such benefits and for whom the United States 
     under reciprocal treaty agreements is required to pay 
     benefits, as determined by the Attorney General, after 
     consultation with the Secretary of State.

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

       (a) Limited Eligibility for Specified Federal Programs.--
       (1) In general.--Notwithstanding any other provision of law 
     and except as provided in paragraph (2), an alien who is a 
     qualified alien (as defined in section 2431) is not eligible 
     for any specified Federal program (as defined in paragraph 
     (3)).
       (2) Exceptions.--
       (A) Time-limited exception for refugees and asylees.--
     Paragraph (1) shall not apply to an alien until 5 years after 
     the date--
       (i) an alien is admitted to the United States as a refugee 
     under section 207 of the Immigration and Nationality Act;
       (ii) an alien is granted asylum under section 208 of such 
     Act; or
       (iii) an alien's deportation is withheld under section 
     243(h) of such Act.
       (B) Certain permanent resident aliens.--Paragraph (1) shall 
     not apply to an alien who--
       (i) is lawfully admitted to the United States for permanent 
     residence under the Immigration and Nationality Act; and
       (ii)(I) has worked 40 qualifying quarters of coverage as 
     defined under title II of the Social Security Act or can be 
     credited with such qualifying quarters as provided under 
     section 435, and (II) did not receive any Federal means-
     tested public benefit (as defined in section 2403(c)) during 
     any such quarter.
       (C) Veteran and active duty exception.--Paragraph (1) shall 
     not apply to an alien who is lawfully residing in any State 
     and is--
       (i) a veteran (as defined in section 101 of title 38, 
     United States Code) with a discharge characterized as an 
     honorable discharge and not on account of alienage,
       (ii) on active duty (other than active duty for training) 
     in the Armed Forces of the United States, or
       (iii) the spouse or unmarried dependent child of an 
     individual described in clause (i) or (ii).
       (D) Transition for aliens currently receiving benefits.--
       (i) SSI.--

       (I) In general.--With respect to the specified Federal 
     program described in paragraph (3)(A), during the period 
     beginning on the date of the enactment of this Act and ending 
     on the date which is 1 year after such date of enactment, the 
     Commissioner of Social Security shall redetermine the 
     eligibility of any individual who is receiving benefits under 
     such program as of the date of the enactment of this Act and 
     whose eligibility for such benefits may terminate by reason 
     of the provisions of this subsection.
       (II) Redetermination criteria.--With respect to any 
     redetermination under subclause (I), the Commissioner of 
     Social Security shall apply the eligibility criteria for new 
     applicants for benefits under such program.
       (III) Grandfather provision.--The provisions of this 
     subsection and the redetermination under subclause (I), shall 
     only apply with respect to the benefits of an individual 
     described in subclause (I) for months beginning on or after 
     the date of the redetermination with respect to such 
     individual.
       (IV) Notice.--Not later than January 1, 1997, the 
     Commissioner of Social Security shall notify an individual 
     described in subclause (I) of the provisions of this clause.

       (ii) Food stamps.--

       (I) In general.--With respect to the specified Federal 
     program described in paragraph (3)(B), during the period 
     beginning on the date of enactment of this Act and ending on 
     the date which is 1 year after the date of enactment, the 
     State agency shall, at the time of the recertification, 
     recertify the eligibility of any individual who is receiving 
     benefits under such program as of the date of enactment of 
     this Act and whose eligibility for such benefits may 
     terminate by reason of the provisions of this subsection.
       (II) Recertification criteria.--With respect to any 
     recertification under subclause (I), the State agency shall 
     apply the eligibility criteria for applicants for benefits 
     under such program.
       (III) Grandfather provision.--The provisions of this 
     subsection and the recertification under subclause (I) shall 
     only apply with respect to the eligibility of an alien for a 
     program for months beginning on or after the date of 
     recertification, if on the date of enactment of this Act the 
     alien is lawfully residing in any State and is receiving 
     benefits under such program on such date of enactment.

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

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

       (a) In General.--Notwithstanding any other provision of law 
     and except as provided in subsection (b), an alien who is a 
     qualified alien (as defined in section 2431) and who enters 
     the United States on or after the date of the enactment of 
     this Act is not eligible for any Federal means-tested public 
     benefit (as defined in subsection (c)) for a period of five 
     years beginning on the date of the alien's entry into the 
     United States with a status within the meaning of the term 
     ``qualified alien''.
       (b) Exceptions.--The limitation under subsection (a) shall 
     not apply to the following aliens:
       (1) Exception for refugees and asylees.--
       (A) An alien who is admitted to the United States as a 
     refugee under section 207 of the Immigration and Nationality 
     Act.
       (B) An alien who is granted asylum under section 208 of 
     such Act.
       (C) An alien whose deportation is being withheld under 
     section 243(h) of such Act.
       (2) Veteran and active duty exception.--An alien who is 
     lawfully residing in any State and is--
       (A) a veteran (as defined in section 101 of title 38, 
     United States Code) with a discharge characterized as an 
     honorable discharge and not on account of alienage,

[[Page S8729]]

       (B) on active duty (other than active duty for training) in 
     the Armed Forces of the United States, or
       (C) the spouse or unmarried dependent child of an 
     individual described in subparagraph (A) or (B).
       (c) Federal Means-tested Public Benefit Defined.--Such term 
     does not include the following:
       (1) Emergency medical services under title XV or XIX of the 
     Social Security Act.
       (2) Short-term, non-cash, in-kind emergency disaster 
     relief.
       (3) Assistance or benefits under the National School Lunch 
     Act.
       (4) Assistance or benefits under the Child Nutrition Act of 
     1966.
       (5)(A) Public health assistance for immunizations.
       (B) Public health assistance for testing and treatment of a 
     communicable disease if the Secretary of Health and Human 
     Services determines that it is necessary to prevent the 
     spread of such disease.
       (6) Payments for foster care and adoption assistance under 
     part E of title IV of the Social Security Act for a child who 
     would, in the absence of subsection (a), be eligible to have 
     such payments made on the child's behalf under such part, but 
     only if the foster or adoptive parent or parents of such 
     child are not described under subsection (a).
       (7) Programs, services, or assistance (such as soup 
     kitchens, crisis counseling and intervention, and short-term 
     shelter) specified by the Attorney General, in the Attorney 
     General's sole and unreviewable discretion after consultation 
     with appropriate Federal agencies and departments, which (i) 
     deliver in-kind services at the community level, including 
     through public or private nonprofit agencies; (ii) do not 
     condition the provision of assistance, the amount of 
     assistance provided, or the cost of assistance provided on 
     the individual recipient's income or resources; and (iii) are 
     necessary for the protection of life or safety.
       (8) Programs of student assistance under titles IV, V, IX, 
     and X of the Higher Education Act of 1965, and titles III, 
     VII, and VIII of the Public Health Service Act.
       (9) Means-tested programs under the Elementary and 
     Secondary Education Act of 1965.

     SEC. 2404. NOTIFICATION AND INFORMATION REPORTING.

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

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

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

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

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

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

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

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

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

       (a) In General.--Notwithstanding any other provision of law 
     and except as provided in subsection (b), a State is 
     authorized to determine the eligibility for any State public 
     benefits (as defined in subsection (c) of an alien who is a 
     qualified alien (as defined in section 2431), a nonimmigrant 
     under the Immigration and Nationality Act, or an alien who is 
     paroled into the United States under section 212(d)(5) of 
     such Act for less than one year.
       (b) Exceptions.--Qualified aliens under this subsection 
     shall be eligible for any State public benefits.
       (1) Time-limited exception for refugees and asylees.--
       (A) An alien who is admitted to the United States as a 
     refugee under section 207 of the Immigration and Nationality 
     Act until 5 years after the date of an alien's entry into the 
     United States.
       (B) An alien who is granted asylum under section 208 of 
     such Act until 5 years after the date of such grant of 
     asylum.
       (C) An alien whose deportation is being withheld under 
     section 243(h) of such Act until 5 years after such 
     withholding.
       (2) Certain permanent resident aliens.--An alien who--
       (A) is lawfully admitted to the United States for permanent 
     residence under the Immigration and Nationality Act; and
       (B)(i) has worked 40 qualifying quarters of coverage as 
     defined under title II of the Social Security Act or can be 
     credited with such qualifying quarters as provided under

[[Page S8730]]

     section 2435, and (ii) did not receive any Federal means-
     tested public benefit (as defined in section 2403(c)) during 
     any such quarter.
       (3) Veteran and active duty exception.--An alien who is 
     lawfully residing in any State and is--
       (A) a veteran (as defined in section 101 of title 38, 
     United States Code) with a discharge characterized as an 
     honorable discharge and not on account of alienage,
       (B) on active duty (other than active duty for training) in 
     the Armed Forces of the United States, or
       (C) the spouse or unmarried dependent child of an 
     individual described in subparagraph (A) or (B).
       (4) Transition for those currently receiving benefits.--An 
     alien who on the date of the enactment of this Act is 
     lawfully residing in any State and is receiving benefits on 
     the date of the enactment of this Act shall continue to be 
     eligible to receive such benefits until January 1, 1997.

     Subchapter C--Attribution of Income and Affidavits of Support

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

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

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

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

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

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


           ``requirements for sponsor's affidavit of support

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

[[Page S8731]]

       ``(4) is the person petitioning for the admission of the 
     alien under section 204.
       (b) Clerical Amendment.--The table of contents of such Act 
     is amended by inserting after the item relating to section 
     213 the following:

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

                    Subchapter D--General Provisions

     SEC. 2431. DEFINITIONS.

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

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

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

     SEC. 2433. STATUTORY CONSTRUCTION.

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

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

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

     SEC. 2435. QUALIFYING QUARTERS.

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

    Subchapter E--Conforming Amendments Relating to Assisted Housing

     SEC. 2441. CONFORMING AMENDMENTS RELATING TO ASSISTED 
                   HOUSING.

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

  Subchapter F--Earned Income Credit Denied to Unauthorized Employees

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

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

[[Page S8732]]

       ``(G) an entry on a return claiming the credit under 
     section 32 with respect to net earnings from self-employment 
     described in section 32(c)(2)(A) to the extent the tax 
     imposed by section 1401 (relating to self-employment tax) on 
     such net earnings has not been paid.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     1995.

                  CHAPTER 5--REFORM OF PUBLIC HOUSING

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

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

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

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

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

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

 CHAPTER 6--TECHNICAL AMENDMENTS RELATING TO CHILD PROTECTION PROGRAMS

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

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

     SEC. 2602. REDESIGNATION OF SECTION 1123.

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

     SEC. 2603. KINSHIP CARE.

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

                         CHAPTER 7--CHILD CARE

     SEC. 2701. SHORT TITLE AND REFERENCES.

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

     SEC. 2802. GOALS.

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

     SEC. 2703. AUTHORIZATION OF APPROPRIATIONS AND ENTITLEMENT 
                   AUTHORITY.

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

     ``SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

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

     ``SEC. 418. FUNDING FOR CHILD CARE.

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

[[Page S8733]]

     provided to a State under this section shall be transferred 
     to the lead agency under the Child Care and Development Block 
     Grant Act of 1990, integrated by the State into the programs 
     established by the State under such Act, and be subject to 
     requirements and limitations of such Act.
       ``(d) Definition.--As used in this section, the term 
     `State' means each of the 50 States or the District of 
     Columbia.''.

     SEC. 2704. LEAD AGENCY.

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

     SEC. 2705. APPLICATION AND PLAN.

       Section 658E (42 U.S.C. 9858c) is amended--
       (1) in subsection (b)--
       (A) by striking ``implemented--'' and all that follows 
     through ``(2)'' and inserting ``implemented''; and
       (B) by striking ``for subsequent State plans'';
       (2) in subsection (c)--
       (A) in paragraph (2)--
       (i) in subparagraph (A)--

       (I) in clause (i) by striking ``, other than through 
     assistance provided under paragraph (3)(C),''; and
       (II) by striking ``except'' and all that follows through 
     ``1992'', and inserting ``and provide a detailed description 
     of the procedures the State will implement to carry out the 
     requirements of this subparagraph'';

       (ii) in subparagraph (B)--

       (I) by striking ``Provide assurances'' and inserting 
     ``Certify''; and
       (II) by inserting before the period at the end ``and 
     provide a detailed description of such procedures'';

       (iii) in subparagraph (C)--

       (I) by striking ``Provide assurances'' and inserting 
     ``Certify''; and
       (II) by inserting before the period at the end ``and 
     provide a detailed description of how such record is 
     maintained and is made available'';

       (iv) by amending subparagraph (D) to read as follows:
       ``(D) Consumer education information.--Certify that the 
     State will collect and disseminate to parents of eligible 
     children and the general public, consumer education 
     information that will promote informed child care choices.'';
       (v) in subparagraph (E), to read as follows:
       ``(E) Compliance with state licensing requirements.--
       ``(i) In general.--Certify that the State has in effect 
     licensing requirements applicable to child care services 
     provided within the State, and provide a detailed description 
     of such requirements and of how such requirements are 
     effectively enforced. Nothing in the preceding sentence shall 
     be construed to require that licensing requirements be 
     applied to specific types of providers of child care 
     services.
       ``(ii) Indian tribes and tribal organizations.--In lieu of 
     any licensing and regulatory requirements applicable under 
     State and local law, the Secretary, in consultation with 
     Indian tribes and tribal organizations, shall develop minimum 
     child care standards (that appropriately reflect tribal needs 
     and available resources) that shall be applicable to Indian 
     tribes and tribal organizations receiving assistance under 
     this subchapter.''; and
       (vi) by striking subparagraphs (H), (I), and (J) and 
     inserting the following:
       ``(G) Meeting the needs of certain populations.--
     Demonstrate the manner in which the State will meet the 
     specific child care needs of families who are receiving 
     assistance under a State program under part A of title IV of 
     the Social Security Act, families who are attempting through 
     work activities to transition off of such assistance program, 
     and families that are at risk of becoming dependent on such 
     assistance program.'';
       (B) in paragraph (3)--
       (i) in subparagraph (A), by striking ``(B) and (C)'' and 
     inserting ``(B) through (D)'';
       (ii) in subparagraph (B)--

       (I) by striking ``.--Subject to the reservation contained 
     in subparagraph (C), the'' and inserting ``and related 
     activities.--The'';
       (II) in clause (i) by striking ``; and'' at the end and 
     inserting a period;
       (III) by striking ``for--'' and all that follows through 
     ``section 658E(c)(2)(A)'' and inserting ``for child care 
     services on sliding fee scale basis, activities that improve 
     the quality or availability of such services, and any other 
     activity that the State deems appropriate to realize any of 
     the goals specified in paragraphs (2) through (5) of section 
     658A(b)''; and
       (IV) by striking clause (ii);

       (iii) by amending subparagraph (C) to read as follows:
       ``(C) Limitation on administrative costs.--Not more than 5 
     percent of the aggregate amount of funds available to the 
     State to carry out this subchapter by a State in each fiscal 
     year may be expended for administrative costs incurred by 
     such State to carry out all of its functions and duties under 
     this subchapter. As used in the preceding sentence, the term 
     `administrative costs' shall not include the costs of 
     providing direct services.''; and
       (iv) by adding at the end thereof the following:
       ``(D) Assistance for certain families.--A State shall 
     ensure that a substantial portion of the amounts available 
     (after the State has complied with the requirement of section 
     418(b)(2) of the Social Security Act with respect to each of 
     the fiscal years 1997 through 2002) to the State to carry out 
     activities under this subchapter in each fiscal year is used 
     to provide assistance to low-income working families other 
     than families described in paragraph (2)(F).''; and
       (C) in paragraph (4)(A)--
       (i) by striking ``provide assurances'' and inserting 
     ``certify'';
       (ii) in the first sentence by inserting ``and shall provide 
     a summary of the facts relied on by the State to determine 
     that such rates are sufficient to ensure such access'' before 
     the period; and
       (iii) by striking the last sentence.

     SEC. 2706. LIMITATION ON STATE ALLOTMENTS.

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

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

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

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

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

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

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

     SEC. 2709. ADMINISTRATION AND ENFORCEMENT.

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

     SEC. 2710. PAYMENTS.

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

     SEC. 2711. ANNUAL REPORT AND AUDITS.

       Section 658K (42 U.S.C. 9858i) is amended--
       (1) in the section heading by striking ``annual report'' 
     and inserting ``reports'';
       (2) in subsection (a), to read as follows:
       ``(a) Reports.--
       ``(1) Collection of information by states.--
       ``(A) In general.--A State that receives funds to carry out 
     this subchapter shall collect the information described in 
     subparagraph (B) on a monthly basis.
       ``(B) Required information.--The information required under 
     this subparagraph shall include, with respect to a family 
     unit receiving assistance under this subchapter information 
     concerning--
       ``(i) family income;
       ``(ii) county of residence;
       ``(iii) the gender, race, and age of children receiving 
     such assistance;
       ``(iv) whether the family includes only 1 parent;
       ``(v) the sources of family income, including the amount 
     obtained from (and separately identified)--

       ``(I) employment, including self-employment;
       ``(II) cash or other assistance under part A of title IV of 
     the Social Security Act;
       ``(III) housing assistance;
       ``(IV) assistance under the Food Stamp Act of 1977; and
       ``(V) other assistance programs;

       ``(vi) the number of months the family has received 
     benefits;
       ``(vii) the type of child care in which the child was 
     enrolled (such as family child care, home care, or center-
     based child care);
       ``(viii) whether the child care provider involved was a 
     relative;
       ``(ix) the cost of child care for such families; and
       ``(x) the average hours per week of such care;
     during the period for which such information is required to 
     be submitted.
       ``(C) Submission to secretary.--A State described in 
     subparagraph (A) shall, on a quarterly basis, submit the 
     information required to be collected under subparagraph (B) 
     to the Secretary.
       ``(D) Sampling.--The Secretary may disapprove the 
     information collected by a State under this paragraph if the 
     State uses sampling methods to collect such information.
       ``(2) Biannual reports.--Not later than December 31, 1997, 
     and every 6 months thereafter, a State described in paragraph 
     (1)(A) shall prepare and submit to the Secretary a report 
     that includes aggregate data concerning--
       ``(A) the number of child care providers that received 
     funding under this subchapter as separately identified based 
     on the types of providers listed in section 658P(5);
       ``(B) the monthly cost of child care services, and the 
     portion of such cost that is paid for with assistance 
     provided under this subchapter, listed by the type of child 
     care services provided;
       ``(C) the number of payments made by the State through 
     vouchers, contracts, cash, and

[[Page S8734]]

     disregards under public benefit programs, listed by the type 
     of child care services provided;
       ``(D) the manner in which consumer education information 
     was provided to parents and the number of parents to whom 
     such information was provided; and
       ``(E) the total number (without duplication) of children 
     and families served under this subchapter;
     during the period for which such report is required to be 
     submitted.''; and
       (2) in subsection (b)--
       (A) in paragraph (1) by striking ``a application'' and 
     inserting ``an application'';
       (B) in paragraph (2) by striking ``any agency administering 
     activities that receive'' and inserting ``the State that 
     receives''; and
       (C) in paragraph (4) by striking ``entitles'' and inserting 
     ``entitled''.

     SEC. 2712. REPORT BY THE SECRETARY.

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

     SEC. 2713. ALLOTMENTS.

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

     SEC. 2714. DEFINITIONS.

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

     SEC. 2715. EFFECTIVE DATE.

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

                        CHAPTER 8--MISCELLANEOUS

     SEC. 2801. APPROPRIATION BY STATE LEGISLATURES.

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

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

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

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

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

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

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

       ``(I) is fleeing to avoid prosecution, or custody or 
     confinement after conviction, under the laws of the place 
     from which the individual flees, for a crime, or attempt to 
     commit a crime, which is a felony under the laws of the place 
     from which the individual flees, or which, in the case of the 
     State of New Jersey, is a high misdemeanor under the laws of 
     such State; or
       ``(II) is violating a condition of probation or parole 
     imposed under Federal or State law;''.

       (b) Provision of Information to Law Enforcement Agencies.--
     Title I of the United States Housing Act of 1937 (42 U.S.C. 
     1437 et seq.), as amended by sections 2404(d) and 2601 of 
     this Act, is amended by adding at the end the following:

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

       ``Notwithstanding any other provision of law, each public 
     housing agency that enters into a contract for assistance 
     under section 6 or 8 of this Act with the Secretary shall 
     furnish any Federal, State, or local law enforcement officer, 
     upon the request of the officer, with the current address, 
     Social Security number, and photograph (if applicable) of any 
     recipient of assistance under this Act, if the officer--
       ``(1) furnishes the public housing agency with the name of 
     the recipient; and
       ``(2) notifies the agency that--
       ``(A) such recipient--
       ``(i) is fleeing to avoid prosecution, or custody or 
     confinement after conviction, under the laws of the place 
     from which the individual flees, for a crime, or attempt to 
     commit a crime, which is

[[Page S8735]]

     a felony under the laws of the place from which the 
     individual flees, or which, in the case of the State of New 
     Jersey, is a high misdemeanor under the laws of such State; 
     or
       ``(ii) is violating a condition of probation or parole 
     imposed under Federal or State law; or
       ``(iii) has information that is necessary for the officer 
     to conduct the officer's official duties;
       ``(B) the location or apprehension of the recipient is 
     within such officer's official duties; and
       ``(C) the request is made in the proper exercise of the 
     officer's official duties.''.

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

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

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

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

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

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

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

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

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

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

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

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

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

       (a) In General.--Subsections (a)(2)(B), (c)(1)(C), and 
     (f)(2)(B) of section 32 of the Internal Revenue Code of 1986 
     are each amended by striking ``adjusted gross income'' each 
     place it appears and inserting ``modified adjusted gross 
     income''.
       (b) Modified Adjusted Gross Income Defined.--Section 32(c) 
     of such Code (relating to definitions and special rules) is 
     amended by adding at the end the following new paragraph:
       ``(5) Modified adjusted gross income.--

[[Page S8736]]

       ``(A) In general.--The term `modified adjusted gross 
     income' means adjusted gross income--
       ``(i) increased by the sum of the amounts described in 
     subparagraph (B), and
       ``(ii) determined without regard to the amounts described 
     in subparagraph (C).
       ``(B) Nontaxable income taken into account.--Amounts 
     described in this subparagraph are--
       ``(i) interest received or accrued during the taxable year 
     which is exempt from tax imposed by this chapter, and
       ``(ii) amounts received as a pension or annuity, and any 
     distributions or payments received from an individual 
     retirement plan, by the taxpayer during the taxable year to 
     the extent not included in gross income.
     Clause (ii) shall not include any amount which is not 
     includible in gross income by reason of section 402(c), 
     403(a)(4), 403(b)(8), 408(d) (3), (4), or (5), or 457(e)(10).
       ``(C) Certain amounts disregarded.--An amount is described 
     in this subparagraph if it is--
       ``(i) the amount of losses from sales or exchanges of 
     capital assets in excess of gains from such sales or 
     exchanges to the extent such amount does not exceed the 
     amount under section 1211(b)(1),
       ``(ii) the net loss from estates and trusts,
       ``(iii) the excess (if any) of amounts described in 
     subsection (i)(2)(C)(ii) over the amounts described in 
     subsection (i)(2)(C)(i) (relating to nonbusiness rents and 
     royalties), and
       ``(iv) the net loss from the carrying on of trades or 
     businesses, computed separately with respect to--

       ``(I) trades or businesses (other than farming) conducted 
     as sole proprietorships,
       ``(II) trades or businesses of farming conducted as sole 
     proprietorships, and
       ``(III) other trades or businesses.

     For purposes of clause (iv), there shall not be taken into 
     account items which are attributable to a trade or business 
     which consists of the performance of services by the taxpayer 
     as an employee.''.
       (c) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to taxable years 
     beginning after December 31, 1995.
       (2) Advance payment individuals.--In the case of any 
     individual who on or before June 26, 1996, has in effect an 
     earned income eligibility certificate for the individual's 
     taxable year beginning in 1996, the amendments made by this 
     section shall apply to taxable years beginning after December 
     31, 1996.

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

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

     SEC. 2813. REFUNDABLE CREDIT FOR ADOPTION EXPENSES.

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

     ``SEC. 35. ADOPTION EXPENSES.

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

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

     SEC. 2814. EXCLUSION OF ADOPTION ASSISTANCE.

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

     ``SEC. 137. ADOPTION ASSISTANCE.

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

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

     SEC. 2815. WITHDRAWAL FROM IRA FOR ADOPTION EXPENSES.

       (a) In General.--Subsection (d) of section 408 of the 
     Internal Revenue Code of 1986 (relating to tax treatment of 
     distributions) is amended by adding at the end the following 
     new paragraph:
       ``(8) Qualified adoption expenses.--
       ``(A) In general.--Any amount which is paid or distributed 
     out of an individual retirement plan of the taxpayer, and 
     which would (but for this paragraph) be includible in gross 
     income, shall be excluded from gross income to the extent 
     that--
       ``(i) such amount exceeds the sum of--

       ``(I) the amount excludable under section 137, and
       ``(II) any amount allowable as a credit under this title 
     with respect to qualified adoption expenses; and

       ``(ii) such amount does not exceed the qualified adoption 
     expenses paid or incurred by the taxpayer during the taxable 
     year.
       ``(B) Qualified adoption expenses.--For purposes of this 
     paragraph, the term `qualified adoption expenses' has the 
     meaning given such term by section 137.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to taxable years beginning after December 31, 
     1996.

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