[Congressional Record Volume 142, Number 114 (Tuesday, July 30, 1996)]
[House]
[Pages H8829-H8958]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   CONFERENCE REPORT ON H.R. 3734, PERSONAL RESPONSIBILITY AND WORK 
                 OPPORTUNITY RECONCILIATION ACT OF 1996

  Mr. KASICH submitted the following conference report and statement on 
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:

                  Conference Report (H. Rept. 104-725)

       The committee of conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to 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, having met, after full and free conference, 
     have agreed to recommend and do recommend to their respective 
     Houses as follows:
       That the House recede from its disagreement to the 
     amendment of the Senate and agree to the same with an 
     amendment as follows:
       In lieu of the matter proposed to be inserted by the Senate 
     amendment, insert the following:

     SECTION 1. SHORT TITLE.

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

     SEC. 2. TABLE OF CONTENTS.

       The table of contents for this Act is as follows:

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

Sec. 101. Findings.
Sec. 102. Reference to Social Security Act.
Sec. 103. Block grants to States.
Sec. 104. Services provided by charitable, religious, or private 
              organizations.
Sec. 105. Census data on grandparents as primary caregivers for their 
              grandchildren.
Sec. 106. Report on data processing.
Sec. 107. Study on alternative outcomes measures.
Sec. 108. Conforming amendments to the Social Security Act.
Sec. 109. Conforming amendments to the Food Stamp Act of 1977 and 
              related provisions.
Sec. 110. Conforming amendments to other laws.
Sec. 111. Development of prototype of counterfeit-resistant social 
              security card required.
Sec. 112. Modifications to the job opportunities for certain low-income 
              individuals program.
Sec. 113. Secretarial submission of legislative proposal for technical 
              and conforming amendments.
Sec. 114. Assuring medicaid coverage for low-income families.
Sec. 115. Denial of assistance and benefits for certain drug-related 
              convictions.
Sec. 116. Effective date; transition rule.

                 TITLE II--SUPPLEMENTAL SECURITY INCOME

Sec. 200. Reference to Social Security Act.

                  Subtitle A--Eligibility Restrictions

Sec. 201. 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. 202. Denial of SSI benefits for fugitive felons and probation and 
              parole violators.
Sec. 203. Treatment of prisoners.
Sec. 204. Effective date of application for benefits.

               Subtitle B--Benefits for Disabled Children

Sec. 211. Definition and eligibility rules.
Sec. 212. Eligibility redeterminations and continuing disability 
              reviews.
Sec. 213. Additional accountability requirements.
Sec. 214. Reduction in cash benefits payable to institutionalized 
              individuals whose medical costs are covered by private 
              insurance.
Sec. 215. Regulations.

              Subtitle C--Additional Enforcement Provision

Sec. 221. Installment payment of large past-due supplemental security 
              income benefits.
Sec. 222. Regulations.

   Subtitle D--Studies Regarding Supplemental Security Income Program

Sec. 231. Annual report on the supplemental security income program.
Sec. 232. Study by General Accounting Office.

                        TITLE III--CHILD SUPPORT

Sec. 300. Reference to Social Security Act.

     Subtitle A--Eligibility for Services; Distribution of Payments

Sec. 301. State obligation to provide child support enforcement 
              services.
Sec. 302. Distribution of child support collections.
Sec. 303. Privacy safeguards.
Sec. 304. Rights to notification of hearings.

                  Subtitle B--Locate and Case Tracking

Sec. 311. State case registry.
Sec. 312. Collection and disbursement of support payments.
Sec. 313. State directory of new hires.
Sec. 314. Amendments concerning income withholding.
Sec. 315. Locator information from interstate networks.
Sec. 316. Expansion of the Federal parent locator service.
Sec. 317. Collection and use of social security numbers for use in 
              child support enforcement.

         Subtitle C--Streamlining and Uniformity of Procedures

Sec. 321. Adoption of uniform State laws.
Sec. 322. Improvements to full faith and credit for child support 
              orders.
Sec. 323. Administrative enforcement in interstate cases.
Sec. 324. Use of forms in interstate enforcement.
Sec. 325. State laws providing expedited procedures.

                  Subtitle D--Paternity Establishment

Sec. 331. State laws concerning paternity establishment.
Sec. 332. Outreach for voluntary paternity establishment.
Sec. 333. Cooperation by applicants for and recipients of part A 
              assistance.

             Subtitle E--Program Administration and Funding

Sec. 341. Performance-based incentives and penalties.
Sec. 342. Federal and State reviews and audits.
Sec. 343. Required reporting procedures.
Sec. 344. Automated data processing requirements.
Sec. 345. Technical assistance.
Sec. 346. Reports and data collection by the Secretary.

      Subtitle F--Establishment and Modification of Support Orders

Sec. 351. Simplified process for review and adjustment of child support 
              orders.
Sec. 352. Furnishing consumer reports for certain purposes relating to 
              child support.
Sec. 353. Nonliability for financial institutions providing financial 
              records to State child support enforcement agencies in 
              child support cases.

               Subtitle G--Enforcement of Support Orders

Sec. 361. Internal Revenue Service collection of arrearages.
Sec. 362. Authority to collect support from Federal employees.
Sec. 363. Enforcement of child support obligations of members of the 
              Armed Forces.
Sec. 364. Voiding of fraudulent transfers.
Sec. 365. Work requirement for persons owing past-due child support.
Sec. 366. Definition of support order.
Sec. 367. Reporting arrearages to credit bureaus.
Sec. 368. Liens.
Sec. 369. State law authorizing suspension of licenses.
Sec. 370. Denial of passports for nonpayment of child support.
Sec. 371. International support enforcement.
Sec. 372. Financial institution data matches.
Sec. 373. Enforcement of orders against paternal or maternal 
              grandparents in cases of minor parents.
Sec. 374. Nondischargeability in bankruptcy of certain debts for the 
              support of a child.
Sec. 375. Child support enforcement for Indian tribes.

                      Subtitle H--Medical Support

Sec. 381. Correction to ERISA definition of medical child support 
              order.
Sec. 382. Enforcement of orders for health care coverage.

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

Sec. 391. Grants to States for access and visitation programs.

         Subtitle J--Effective Dates and Conforming Amendments

Sec. 395. Effective dates and conforming amendments.

      TITLE IV--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

Sec. 400. Statements of national policy concerning welfare and 
              immigration.

              Subtitle A--Eligibility for Federal Benefits

Sec. 401. Aliens who are not qualified aliens ineligible for Federal 
              public benefits.

[[Page H8830]]

Sec. 402. Limited eligibility of qualified aliens for certain Federal 
              programs.
Sec. 403. Five-year limited eligibility of qualified aliens for Federal 
              means-tested public benefit.
Sec. 404. Notification and information reporting.

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

Sec. 411. Aliens who are not qualified aliens or nonimmigrants 
              ineligible for State and local public benefits.
Sec. 412. State authority to limit eligibility of qualified aliens for 
              State public benefits.

      Subtitle C--Attribution of Income and Affidavits of Support

Sec. 421. Federal attribution of sponsor's income and resources to 
              alien.
Sec. 422. Authority for States to provide for attribution of sponsors 
              income and resources to the alien with respect to State 
              programs.
Sec. 423. Requirements for sponsor's affidavit of support.

                     Subtitle D--General Provisions

       Sec. 431. Definitions.
       Sec. 432. Verification of eligibility for Federal public 
           benefits.
       Sec. 433. Statutory construction.
       Sec. 434. Communication between State and local government 
           agencies and the Immigration and Naturalization 
           Service.
       Sec. 435. Qualifying quarters.

     Subtitle E--Conforming Amendments Relating to Assisted Housing

       Sec. 441. Conforming amendments relating to assisted 
           housing.

   Subtitle F--Earning Income Credit Denied to Unauthorized Employees

       Sec. 451. Earned income credit denied to individuals not 
           authorized to be employed in the United States.

                       TITLE V--CHILD PROTECTION

       Sec. 501. Authority of States to make foster care 
           maintenance payments on behalf of children in any 
           private child care institution.
       Sec. 502. Extension of enhanced match for implementation of 
           statewide automated child welfare information systems.
       Sec. 503. National random sample study of child welfare.
       Sec. 504. Redesignation of section 1123.
       Sec. 505. Kinship care.

                          TITLE VI--CHILD CARE

Sec. 601. Short title and references.
Sec. 602. Goals.
Sec. 603. Authorization of appropriations and entitlement authority.
Sec. 604. Lead agency.
Sec. 605. Application and plan.
Sec. 606. Limitation on State allotments.
Sec. 607. Activities to improve the quality of child care.
Sec. 608. Repeal of early childhood development and before- and after-
              school care requirement.
Sec. 609. Administration and enforcement.
Sec. 610. Payments.
Sec. 611. Annual report and audits.
Sec. 612. Report by the Secretary.
Sec. 613. Allotments.
Sec. 614. Definitions.
Sec. 615. Effective date.

                  TITLE VII--CHILD NUTRITION PROGRAMS

                 Subtitle A--National School Lunch Act

Sec. 701. State disbursement to schools.
Sec. 702. Nutritional and other program requirements.
Sec. 703. Free and reduced price policy statement.
Sec. 704. Special assistance.
Sec. 705. Miscellaneous provisions and definitions.
Sec. 706. Summer food service program for children.
Sec. 707. Commodity distribution.
Sec. 708. Child and adult care food program.
Sec. 709. Pilot projects.
Sec. 710. Reduction of paperwork.
Sec. 711. Information on income eligibility.
Sec. 712. Nutrition guidance for child nutrition programs.

                Subtitle B--Child Nutrition Act of 1966

Sec. 721. Special milk program.
Sec. 722. Free and reduced price policy statement.
Sec. 723. School breakfast program authorization.
Sec. 724. State administrative expenses.
Sec. 725. Regulations.
Sec. 726. Prohibitions.
Sec. 727. Miscellaneous provisions and definitions.
Sec. 728. Accounts and records.
Sec. 729. Special supplemental nutrition program for women, infants, 
              and children.
Sec. 730. Cash grants for nutrition education.
Sec. 731. Nutrition education and training.

                  Subtitle C--Miscellaneous Provisions

Sec. 741. Coordination of school lunch, school breakfast, and summer 
              food service programs.
Sec. 742. Requirements relating to provision of benefits based on 
              citizenship, alienage, or immigration status under the 
              National School Lunch Act, the Child Nutrition Act of 
              1966, and certain other acts.

           TITLE VIII--FOOD STAMPS AND COMMODITY DISTRIBUTION

                     Subtitle A--Food Stamp Program

Sec. 801. Definition of certification period.
Sec. 802. Definition of coupon.
Sec. 803. Treatment of children living at home.
Sec. 804. Adjustment of thrifty food plan.
Sec. 805. Definition of homeless individual.
Sec. 806. State option for eligibility standards.
Sec. 807. Earnings of students.
Sec. 808. Energy assistance.
Sec. 809. Deductions from income.
Sec. 810. Vehicle allowance.
Sec. 811. Vendor payments for transitional housing counted as income.
Sec. 812. Simplified calculation of income for the self-employed.
Sec. 813. Doubled penalties for violating food stamp program 
              requirements.
Sec. 814. Disqualification of convicted individuals.
Sec. 815. Disqualification.
Sec. 816. Caretaker exemption.
Sec. 817. Employment and training.
Sec. 818. Food stamp eligibility.
Sec. 819. Comparable treatment for disqualification.
Sec. 820. Disqualification for receipt of multiple food stamp benefits.
Sec. 821. Disqualification of fleeing felons.
Sec. 822. Cooperation with child support agencies.
Sec. 823. Disqualification relating to child support arrears.
Sec. 824. Work requirement.
Sec. 825. Encouragement of electronic benefit transfer systems.
Sec. 826. Value of minimum allotment.
Sec. 827. Benefits on recertification.
Sec. 828. Optional combined allotment for expedited households.
Sec. 829. Failure to comply with other means-tested public assistance 
              programs.
Sec. 830. Allotments for households residing in centers.
Sec. 831. Condition precedent for approval of retail food stores and 
              wholesale food concerns.
Sec. 832. Authority to establish authorization periods.
Sec. 833. Information for verifying eligibility for authorization.
Sec. 834. Waiting period for stores that fail to meet authorization 
              criteria.
Sec. 835. Operation of food stamp offices.
Sec. 836. State employee and training standards.
Sec. 837. Exchange of law enforcement information.
Sec. 838. Expedited coupon service.
Sec. 839. Withdrawing fair hearing requests.
Sec. 840. Income, eligibility, and immigration status verification 
              systems.
Sec. 841. Investigations.
Sec. 842. Disqualification of retailers who intentionally submit 
              falsified applications.
Sec. 843. Disqualification of retailers who are disqualified under the 
              WIC program.
Sec. 844. Collection of overissuances.
Sec. 845. Authority to suspend stores violating program requirements 
              pending administrative and judicial review.
Sec. 846. Expanded criminal forfeiture for violations.
Sec. 847. Limitation on Federal match.
Sec. 848. Standards for administration.
Sec. 849. Work supplementation or support program.
Sec. 850. Waiver authority.
Sec. 851. Response to waivers.
Sec. 852. Employment initiatives program.
Sec. 853. Reauthorization.
Sec. 854. Simplified food stamp program.
Sec. 855. Study of the use of food stamps to purchase vitamins and 
              minerals.
Sec. 856. Deficit reduction.

              Subtitle B--Commodity Distribution Programs

Sec. 871. Emergency food assistance program.
Sec. 872. Food bank demonstration project.
Sec. 873. Hunger prevention programs.
Sec. 874. Report on entitlement commodity processing.

            Subtitle C--Electronic Benefit Transfer Systems

Sec. 891. Provisions to encourage electronic benefit transfer systems.

                        TITLE IX--MISCELLANEOUS

Sec. 901. Appropriation by State legislatures.
Sec. 902. Sanctioning for testing positive for controlled substances.
Sec. 903. Elimination of housing assistance with respect to fugitive 
              felons and probation and parole violators.
Sec. 904. Sense of the Senate regarding the inability of the 
              noncustodial parent to pay child support.
Sec. 905. Establishing national goals to prevent teenage pregnancies.
Sec. 906. Sense of the Senate regarding enforcement of statutory rape 
              laws.
Sec. 907. Provisions to encourage electronic benefit transfer systems.
Sec. 908. Reduction of block grants to States for social services; use 
              of vouchers.
Sec. 909. Rules relating to denial of earned income credit on basis of 
              disqualified income.

[[Page H8831]]

Sec. 910. Modification of adjusted gross income definition for earned 
              income credit.
Sec. 911. Fraud under means-tested welfare and public assistance 
              programs.
Sec. 912. Abstinence education.
Sec. 913. Change in reference.
   TITLE I--BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

     SEC. 101. 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 are very important Government interests and 
     the policy contained in part A of title IV of the Social 
     Security Act (as amended by section 103(a) of this Act) is 
     intended to address the crisis.

     SEC. 102. REFERENCE TO SOCIAL SECURITY ACT.

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

     SEC. 103. 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 603(b)(2) of this Act) and inserting the following:

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

     ``SEC. 401. PURPOSE.

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

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

       ``(a) In General.--As used in this part, the term `eligible 
     State' means, with respect to a fiscal year, a State that, 
     during the 2-year period immediately preceding the fiscal 
     year, has submitted to the Secretary a plan that the 
     Secretary has found includes the following:
       ``(1) Outline of family assistance program.--
       ``(A) General provisions.--A written document that outlines 
     how the State intends to do the following:
       ``(i) Conduct a program, designed to serve all political 
     subdivisions in the State (not necessarily in a uniform 
     manner), that provides assistance to needy families with (or 
     expecting) children and provides parents with job 
     preparation, work, and support services to enable them to 
     leave the program and become self-sufficient.
       ``(ii) Require a parent or caretaker receiving assistance 
     under the program to engage

[[Page H8832]]

     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.
       ``(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) The document shall set forth objective criteria for 
     the delivery of benefits and the determination of eligibility 
     and for fair and equitable treatment, including an 
     explanation of how the State will provide opportunities for 
     recipients who have been adversely affected to be heard in a 
     State administrative or appeal process.
       ``(iv) Not later than 1 year after the date of enactment of 
     this Act, unless the chief executive officer of 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 2 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.
       ``(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 member of an Indian tribe, 
     who is domiciled in the State and is not eligible for 
     assistance under 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) Optional certification of standards and procedures to 
     ensure that the state will screen for and identify domestic 
     violence.--
       ``(A) In general.--At the option of the State, 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)(7)(C)(iii).
       ``(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, 2001, and 2002, 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 with respect to the provision of emergency 
     assistance; or
       ``(iii) \4/3\ of the total amount required to be paid to 
     the State under former section 403 (as in effect on September 
     30, 1995) for the 1st 3 quarters of fiscal year 1995 (other 
     than with respect to amounts expended by the State under the 
     State plan approved under part F (as so in effect) or for 
     child care under subsection (g) or (i) of former section 402 
     (as so in effect)), plus the total amount required to be paid 
     to the State for fiscal year 1995 under former section 403(l) 
     (as so in effect).
       ``(C) Total amount required to be paid to the state under 
     former section 403 defined.--As used in this part, the term 
     `total amount required to be paid to the State under former 
     section 403' means, with respect to a fiscal year--
       ``(i) in the case of a State to which section 1108 does not 
     apply, the sum of--

       ``(I) the Federal share of maintenance assistance 
     expenditures for the fiscal year, before reduction pursuant 
     to subparagraph (B) or (C) of section 403(b)(2) (as in effect 
     on September 30, 1995), as reported by the State on ACF Form 
     231;
       ``(II) the Federal share of administrative expenditures 
     (including administrative expenditures for the development of 
     management information systems) for the fiscal year, as 
     reported by the State on ACF Form 231;
       ``(III) the Federal share of emergency assistance 
     expenditures for the fiscal year, as reported by the State on 
     ACF Form 231;
       ``(IV) the Federal share of expenditures for the fiscal 
     year with respect to child care pursuant to subsections (g) 
     and (i) of former section 402 (as in effect on September 30, 
     1995), as reported by the State on ACF Form 231; and
       ``(V) the Federal obligations made to the State under 
     section 403 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

[[Page H8833]]

     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, 
     2001, and 2002 such sums as are necessary for grants under 
     this paragraph.
       ``(2) Bonus to reward decrease in illegitimacy.--
       ``(A) In general.--Each eligible State shall be entitled to 
     receive from the Secretary a grant for each bonus year for 
     which the State demonstrates a net decrease in out-of-wedlock 
     births.
       ``(B) Amount of grant.--
       ``(i) If 5 eligible states.--If there are 5 eligible States 
     for a bonus year, the amount of the grant shall be 
     $20,000,000.
       ``(ii) If fewer than 5 eligible states.--If there are fewer 
     than 5 eligible States for a bonus year, the amount of the 
     grant shall be $25,000,000.
       ``(C) Definitions.--As used in this paragraph:
       ``(i) Eligible state.--

       ``(I) In general.--The term `eligible State' means a State 
     that the Secretary determines meets the following 
     requirements:

       ``(aa) 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 the magnitude 
     of the decrease for the State for the period is not exceeded 
     by the magnitude of the corresponding decrease for 5 or more 
     other States for the period.
       ``(bb) 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.

       ``(II) Disregard of changes in data due to changed 
     reporting methods.--In making the determination required by 
     subclause (I), the Secretary shall disregard--

       ``(aa) any difference between the number of out-of-wedlock 
     births that occurred in a State for a fiscal year and the 
     number of out-of-wedlock births that occurred in a State for 
     fiscal year 1995 which is attributable to a change in State 
     methods of reporting data used to calculate the number of 
     out-of-wedlock births; and
       ``(bb) 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.
       ``(ii) Bonus year.--The term `bonus year' means fiscal 
     years 1999, 2000, 2001, and 2002.
       ``(D) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for fiscal years 1999 through 2002, 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 1997.--
     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 1994 is less than 35 percent of the 
     national average level of State welfare spending per poor 
     person for fiscal year 1994; or
       ``(II) the population of the State increased by more than 
     10 percent from April 1, 1990 to July 1, 1994, according to 
     the population estimates in publication CB94-204 of the 
     Bureau of the Census.

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

       ``(I) the sum of--

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

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

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

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

       ``(iii) State.--The term `State' means each of the 50 
     States of the United States and the District of Columbia.
       ``(E) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for fiscal years 1998, 1999, 2000, and 2001 such 
     sums as are necessary for grants under this paragraph, in a 
     total amount not to exceed $800,000,000.
       ``(F) Grants reduced pro rata if insufficient 
     appropriations.--If the amount appropriated pursuant to this 
     paragraph for a fiscal year is less than the total amount of 
     payments otherwise required to be made under this paragraph 
     for the fiscal year, then the amount otherwise payable to any 
     State for the fiscal year under this paragraph shall be 
     reduced by a percentage equal to the amount so appropriated 
     divided by such total amount.
       ``(G) Budget scoring.--Notwithstanding section 257(b)(2) of 
     the Balanced Budget and Emergency Deficit Control Act of 
     1985, the baseline shall assume that no grant shall be made 
     under this paragraph after fiscal year 2001.
       ``(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 Reconciliation 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).
       ``(D) Scoring of state performance; setting of performance 
     thresholds.--For each bonus year, the Secretary shall--

[[Page H8834]]

       ``(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 $200,000,000; 
     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) 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.
       ``(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 1997, 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 1997 
     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--
       ``(i) if the Secretary makes a payment to the State under 
     section 418(a)(2) in the fiscal year--

       ``(I) the expenditures under the State program funded under 
     this part for the fiscal year, excluding any amounts made 
     available by the Federal Government (except amounts paid to 
     the State under paragraph (3) during the fiscal year that 
     have been expended by the State) and any amounts expended by 
     the State during the fiscal year for child care; exceeds
       ``(II) historic State expenditures (as defined in section 
     409(a)(7)(B)(iii)), excluding the expenditures by the State 
     for child care under subsection (g) or (i) of section 402 (as 
     in effect during fiscal year 1994) for fiscal year 1994 minus 
     any Federal payment with respect to such child care 
     expenditures; or

       ``(ii) if the Secretary does not make a payment to the 
     State under section 418(a)(2) in the fiscal year--

       ``(I) the expenditures under the State program funded under 
     this part for the fiscal year (excluding any amounts made 
     available by the Federal Government, except amounts paid to 
     the State under paragraph (3) during the fiscal year that 
     have been expended by the State); exceeds
       ``(II) 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 
     titles IV and VIII of the Personal Responsibility and Work 
     Opportunity 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 
     titles IV and VIII of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996 had been in effect 
     throughout fiscal year 1995.
       ``(7) Other terms defined.--As used in this subsection:
       ``(A) State.--The term `State' means each of the 50 States 
     of the United States and the District of Columbia.
       ``(B) Secretary.--The term `Secretary' means the Secretary 
     of the Treasury.
       ``(8) Annual reports.--The Secretary shall annually report 
     to the Congress on the status of the Fund.

     ``SEC. 404. USE OF GRANTS.

       ``(a) General Rules.--Subject to this part, a State to 
     which a grant is made under section 403 may use the grant--
       ``(1) in any manner that is reasonably calculated to 
     accomplish the purpose of this part, including to provide low 
     income households with assistance in meeting home heating and 
     cooling costs; or
       ``(2) in any manner that the State was authorized to use 
     amounts received under part A or F, as such parts were in 
     effect on September 30, 1995.
       ``(b) Limitation on Use of Grant for Administrative 
     Purposes.--
       ``(1) Limitation.--A State to which a grant is made under 
     section 403 shall not expend more than 15 percent of the 
     grant for administrative purposes.
       ``(2) Exception.--Paragraph (1) shall not apply to the use 
     of a grant for information technology and computerization 
     needed for tracking or monitoring required by or under this 
     part.
       ``(c) Authority to Treat Interstate Immigrants Under Rules 
     of Former State.--A State operating a program funded under 
     this part may apply to a family the rules (including benefit 
     amounts) of the program funded under this part of another 
     State if the family has moved to the State from the other 
     State and has resided in the State for less than 12 months.
       ``(d) Authority to Use Portion of Grant for Other 
     Purposes.--
       ``(1) In general.--A State may use not more than 30 percent 
     of the amount of any grant made to the State under section 
     403(a) for a fiscal year to carry out a State program 
     pursuant to any or all of the following provisions of law:
       ``(A) Title XX of this Act.
       ``(B) The Child Care and Development Block Grant Act of 
     1990.
       ``(2) Limitation on amount transferable to title xx 
     programs.--Notwithstanding paragraph (1), not more than \1/3\ 
     of the total amount paid to a State under this part for a 
     fiscal year that is used to carry out State programs pursuant 
     to provisions of law specified in paragraph (1) may be used 
     to carry out State programs pursuant to title XX.
       ``(3) Applicable rules.--
       ``(A) In general.--Except as provided in subparagraph (B) 
     of this paragraph, any amount paid to a State under this part 
     that is used to carry out a State program pursuant to a 
     provision of law specified 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, and the expenditure of any amount so used shall not 
     be considered to be an expenditure under this part.
       ``(B) Exception relating to title xx programs.--All amounts 
     paid to a State under this part that are used to carry out 
     State programs pursuant to title XX shall be used only for 
     programs and services to children or their families whose 
     income is less than 200 percent of the income official 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Omnibus Budget Reconciliation Act of 1981) 
     applicable to a family of the size involved.
       ``(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

[[Page H8835]]

     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 to which a grant is made under 
     section 403 may use the grant 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 funded 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 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.--As used in this subsection, the 
     term `qualified entity' means--
       ``(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.--As used in 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).
       (i) Sanction welfare recipients for failing to ensure that 
     minor dependent children attend school.--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.
       (j) Requirement for high school diploma or equivalent.--A 
     State to which a grant is made under section 403 shall not be 
     prohibited from sanctioning a family that includes an adult 
     who is older than age 20 and younger than age 51 and 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 does not have, 
     or is not working toward attaining, a secondary school 
     diploma or its recognized equivalent unless such adult has 
     been determined in the judgment of medical, psychiatric, or 
     other appropriate professionals to lack the requisite 
     capacity to complete successfully a course of study that 
     would lead to a secondary school diploma or its recognized 
     equivalent.

     ``SEC. 405. ADMINISTRATIVE PROVISIONS.

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

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

       ``(a) Loan Authority.--

[[Page H8836]]

       ``(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 2002 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:
      1997........................................................25   
      1998........................................................30   
      1999........................................................35   
      2000........................................................40   
      2001........................................................45   
      2002 or 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:
      1997........................................................75   
      1998........................................................75   
      1999 or 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 or 
     a minor child head of household 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 or a minor child head 
     of household 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 immediately preceding 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 
     required by 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 in the State that are receiving 
     assistance under a tribal family assistance plan approved 
     under section 412.
       ``(5) State option for participation requirement 
     exemptions.--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) for 
     not more than 12 months.
       ``(c) Engaged in Work.--
       ``(1) General rules.--
       ``(A) 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), (8), or (12) of subsection (d), subject to this 
     subsection:

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

       ``(B) 2-parent families.--For purposes of subsection 
     (b)(2)(B), an individual is engaged in work for a month in a 
     fiscal year if--
       ``(i) the individual 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), (8), or (12) of subsection (d), subject to this 
     subsection; and
       ``(ii) if the family of the individual receives federally-
     funded child care assistance and an adult in the family is 
     not disabled or caring for a severely disabled child, the 
     individual's spouse is making progress in work activities 
     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), or (7) of subsection (d).
       ``(2) Limitations and special rules.--
       ``(A) Number of weeks for which job search counts as 
     work.--
       ``(i) Limitation.--Notwithstanding paragraph (1) of this 
     subsection, an individual shall not be considered to be 
     engaged in work by virtue of participation in an activity 
     described in subsection (d)(6) of a State program funded 
     under this part, after the individual has participated in 
     such an activity for 6 weeks (or, if the unemployment rate of 
     the State is at least 50 percent greater than the 
     unemployment rate of the United States, 12 weeks), or if the 
     participation is for a week that immediately follows 4 
     consecutive weeks of such participation.
       ``(ii) Limited authority to count less than full week of 
     participation.--For purposes of clause (i) of this 
     subparagraph, on not more than 1 occasion per individual, the 
     State shall consider participation of the individual in an 
     activity described in subsection (d)(6) for 3 or 4 days 
     during a week as a week of participation in the activity by 
     the individual.
       ``(B) 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.
       ``(C) 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, subject to subparagraph 
     (D) of this paragraph, to be engaged in work for a month in a 
     fiscal year if the recipient--
       ``(i) maintains satisfactory attendance at secondary school 
     or the equivalent during the month; or
       ``(ii) participates in education directly related to 
     employment for at least the minimum average number of hours 
     per week

[[Page H8837]]

     specified in the table set forth in paragraph (1)(A) of this 
     subsection.
       ``(D) Number of persons that may be treated as engaged in 
     work by virtue of participation in vocational education 
     activities or being a teen head of household who maintains 
     satisfactory school attendance.--For purposes of determining 
     monthly participation rates under paragraphs (1)(B)(i) and 
     (2)(B) of subsection (b), not more than 20 percent of 
     individuals in all families and in 2-parent families may be 
     determined to be engaged in work in the State for a month by 
     reason of participation in vocational educational training or 
     deemed to be engaged in work by reason of subparagraph (C) of 
     this paragraph.
       ``(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) vocational educational training (not to exceed 12 
     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 received a high school 
     diploma or a certificate of high school equivalency;
       ``(11) satisfactory attendance at secondary school or in a 
     course of study leading to a certificate of general 
     equivalence, in the case of a recipient who has not completed 
     secondary school or received such a certificate; and
       ``(12) the provision of child care services to an 
     individual who is participating in a community service 
     program.
       ``(e) Penalties Against Individuals.--
       ``(1) In general.--Except as provided in paragraph (2), if 
     an individual 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 
     individual so refuses; or
       ``(B) terminate such assistance,
     subject to such good cause and other exceptions as the State 
     may establish.
       ``(2) Exception.--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 
     individual to work if the individual is a single custodial 
     parent caring for a child who has not attained 6 years of 
     age, and the individual proves that the individual has a 
     demonstrated inability (as determined by the State) to obtain 
     needed child care, for 1 or more of the following reasons:
       ``(A) Unavailability of appropriate child care within a 
     reasonable distance from the individual's home or work site.
       ``(B) Unavailability or unsuitability of informal child 
     care by a relative or under other arrangements.
       ``(C) Unavailability of appropriate and affordable formal 
     child care arrangements.
       ``(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 adult in a work 
     activity described in subsection (d) which is funded, in 
     whole or in part, by funds provided by the Federal Government 
     shall be employed or assigned--
       ``(A) when any other individual is on layoff from the same 
     or any substantially equivalent job; or
       ``(B) if the employer has terminated the employment of any 
     regular employee or otherwise caused an involuntary reduction 
     of its 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 
     paragraph (2).
       ``(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) Review of Implementation of State Work Programs.--
     During fiscal year 1999, the Committee on Ways and Means of 
     the House of Representatives and the Committee on Finance of 
     the Senate shall hold hearings and engage in other 
     appropriate activities to review the implementation of this 
     section by the States, and shall invite the Governors of the 
     States to testify before them regarding such implementation. 
     Based on such hearings, such Committees may introduce such 
     legislation as may be appropriate to remedy any problems with 
     the State programs operated pursuant to this section.

     ``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 the 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), (C), or (D) of 
     paragraph (7) 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 from the assistance that would otherwise 
     be provided to the family of the individual under the State 
     program funded under this part an amount equal to not less 
     than 25 percent of the amount of such assistance; 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

[[Page H8838]]

       ``(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, unless the State agency determines that the 
     individual's current living arrangement is appropriate, and 
     thereafter shall require that the individual and the minor 
     child referred to in subparagraph (A)(ii)(II) reside in such 
     living arrangement as a condition of the continued receipt of 
     assistance under the State program funded under this part 
     attributable to funds provided by the Federal Government (or 
     in an alternative appropriate arrangement, should 
     circumstances change and the current arrangement cease to be 
     appropriate).
       ``(ii) Individual described.--For purposes of clause (i), 
     an individual is described in this clause if the individual 
     is described in subparagraph (A)(ii), and--

       ``(I) the individual has no parent, legal guardian or other 
     appropriate adult relative described in subclause (II) of his 
     or her own who is living or whose whereabouts are known;
       ``(II) no living parent, legal guardian, or other 
     appropriate adult relative, who would otherwise meet 
     applicable State criteria to act as the individual's legal 
     guardian, of such individual allows the individual to live in 
     the home of such parent, guardian, or relative;
       ``(III) the State agency determines that--

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

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

       ``(iii) Second-chance home.--For purposes of this 
     subparagraph, the term `second-chance home' means an entity 
     that provides individuals described in clause (ii) with a 
     supportive and supervised living arrangement in which such 
     individuals are required to learn parenting skills, including 
     child development, family budgeting, health and nutrition, 
     and other skills to promote their long-term economic 
     independence and the well-being of their children.
       ``(6) No medical services.--
       ``(A) In general.--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 prepregnancy family planning 
     services.--As used in subparagraph (A), the term `medical 
     services' does not include prepregnancy family planning 
     services.
       ``(7) No assistance for more than 5 years.--
       ``(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 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, for 60 months (whether or not consecutive) after 
     the date the State program funded under this part commences, 
     subject to this paragraph.
       ``(B) Minor child exception.--In determining the number of 
     months for which an individual who is a parent or pregnant 
     has received assistance under the State program funded under 
     this part, the State shall disregard any month for which such 
     assistance was provided with respect to the individual and 
     during which the individual was--
       ``(i) a minor child; and
       ``(ii) not the head of a household or married to the head 
     of a household.
       ``(C) Hardship exception.--
       ``(i) In general.--The State may exempt a family from the 
     application of subparagraph (A) by reason of hardship or if 
     the family includes an individual who has been battered or 
     subjected to extreme cruelty.
       ``(ii) Limitation.--The number of families with respect to 
     which an exemption made by a State under clause (i) is in 
     effect for a fiscal year shall not exceed 20 percent of the 
     average monthly number of families to which assistance is 
     provided under the State program funded under this part.
       ``(iii) Battered or subject to extreme cruelty defined.--
     For purposes of clause (i), an individual has been battered 
     or subjected to extreme cruelty if the individual has been 
     subjected to--

       ``(I) physical acts that resulted in, or threatened to 
     result in, physical injury to the individual;
       ``(II) sexual abuse;
       ``(III) sexual activity involving a dependent child;
       ``(IV) being forced as the caretaker relative of a 
     dependent child to engage in nonconsensual sexual acts or 
     activities;
       ``(V) threats of, or attempts at, physical or sexual abuse;
       ``(VI) mental abuse; or
       ``(VII) neglect or deprivation of medical care.

       ``(D) Disregard of months of assistance received by adult 
     while living on an indian reservation or in an alaskan native 
     village with 50 percent unemployment.--In determining the 
     number of months for which an adult has received assistance 
     under the State program funded under this part, the State 
     shall disregard any month during which the adult lived on an 
     Indian reservation or in an Alaskan Native village if, during 
     the month--
       ``(i) at least 1,000 individuals were living on the 
     reservation or in the village; and
       ``(ii) at least 50 percent of the adults living on the 
     reservation or in the village were unemployed.
       ``(E) Rule of interpretation.--Subparagraph (A) shall not 
     be interpreted to require any State to provide assistance to 
     any individual for any period of time under the State program 
     funded under this part.
       ``(F) Rule of interpretation.--This part shall not be 
     interpreted to prohibit any State from expending State funds 
     not originating with the Federal Government on benefits for 
     children or families that have become ineligible for 
     assistance under the State program funded under this part by 
     reason of subparagraph (A).
       ``(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 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

[[Page H8839]]

     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) Medical assistance required to be provided for 
     certain families having earnings from employment or child 
     support.--
       ``(A) Earnings from employment.--A State to which a grant 
     is made under section 403 and which has a State plan approved 
     under title XIX shall provide that in the case of a family 
     that is treated (under section 1931(b)(1)(A) for purposes of 
     title XIX) as receiving aid under a State plan approved under 
     this part (as in effect on July 16, 1996), that would become 
     ineligible for such aid because of hours of or income from 
     employment of the caretaker relative (as defined under this 
     part as in effect on such date) or because of section 
     402(a)(8)(B)(ii)(II) (as so in effect), and that was so 
     treated as receiving such aid in at least 3 of the 6 months 
     immediately preceding the month in which such ineligibility 
     begins, the family shall remain eligible for medical 
     assistance under the State's plan approved under title XIX 
     for an extended period or periods as provided in section 1925 
     or 1902(e)(1) (as applicable), and that the family will be 
     appropriately notified of such extension as required by 
     section 1925(a)(2).
       ``(B) Child support.--A State to which a grant is made 
     under section 403 and which has a State plan approved under 
     title XIX shall provide that in the case of a family that is 
     treated (under section 1931(b)(1)(A) for purposes of title 
     XIX) as receiving aid under a State plan approved under this 
     part (as in effect on July 16, 1996), that would become 
     ineligible for such aid as a result (wholly or partly) of the 
     collection of child or spousal support under part D and that 
     was so treated as receiving such aid in at least 3 of the 6 
     months immediately preceding the month in which such 
     ineligibility begins, the family shall remain eligible for 
     medical assistance under the State's plan approved under 
     title XIX for an extended period or periods as provided in 
     section 1931(c)(1).
       ``(b) Individual Responsibility Plans.--
       ``(1) Assessment.--The State agency responsible for 
     administering the State program funded under this part shall 
     make an initial assessment of the skills, prior work 
     experience, and employability of each recipient of assistance 
     under the program who--
       ``(A) has attained 18 years of age; or
       ``(B) has not completed high school or obtained a 
     certificate of high school equivalency, and is not attending 
     secondary school.
       ``(2) Contents of plans.--
       ``(A) In general.--On the basis of the assessment made 
     under subsection (a) with respect to an individual, the State 
     agency, in consultation with the individual, may develop an 
     individual responsibility plan for the individual, which--
       ``(i) sets forth an employment goal for the individual and 
     a plan for moving the individual immediately into private 
     sector employment;
       ``(ii) sets forth the obligations of the individual, which 
     may include a requirement that the individual attend school, 
     maintain certain grades and attendance, keep school age 
     children of the individual in school, immunize children, 
     attend parenting and money management classes, or do other 
     things that will help the individual become and remain 
     employed in the private sector;
       ``(iii) to the greatest extent possible is designed to move 
     the individual into whatever private sector employment the 
     individual is capable of handling as quickly as possible, and 
     to increase the responsibility and amount of work the 
     individual is to handle over time;
       ``(iv) describes the services the State will provide the 
     individual so that the individual will be able to obtain and 
     keep employment in the private sector, and describe the job 
     counseling and other services that will be provided by the 
     State; and
       ``(v) may require the individual to undergo appropriate 
     substance abuse treatment.
       ``(B) Timing.--The State agency may comply with paragraph 
     (1) with respect to an individual--
       ``(i) within 90 days (or, at the option of the State, 180 
     days) after the effective date of this part, in the case of 
     an individual who, as of such effective date, is a recipient 
     of aid under the State plan approved under part A (as in 
     effect immediately before such effective date); or
       ``(ii) within 30 days (or, at the option of the State, 90 
     days) after the individual is determined to be eligible for 
     such assistance, in the case of any other individual.
       ``(3) Penalty for noncompliance by individual.--In addition 
     to any other penalties required under the State program 
     funded under this part, the State may reduce, by such amount 
     as the State considers appropriate, the amount of assistance 
     otherwise payable under the State program to a family that 
     includes an individual who fails without good cause to comply 
     with an individual responsibility plan signed by the 
     individual.
       ``(4) State discretion.--The exercise of the authority of 
     this subsection shall be within the sole discretion of the 
     State.
       ``(c) Nondiscrimination Provisions.--The following 
     provisions of law shall apply to any program or activity 
     which receives funds provided under this part:
       ``(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) Aliens.--For special rules relating to the treatment 
     of aliens, see section 402 of the Personal Responsibility and 
     Work Opportunity Reconciliation Act of 1996.

     ``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 the applicable 
     percentage of the State family assistance grant.
       ``(B) Applicable percentage defined.--As used in 
     subparagraph (A), the term `applicable percentage' means, 
     with respect to a State--
       ``(i) if a penalty was not imposed on the State under 
     subparagraph (A) for the immediately preceding fiscal year, 5 
     percent; or
       ``(ii) if a penalty was imposed on the State under 
     subparagraph (A) for the immediately preceding fiscal year, 
     the lesser of--

       ``(I) the percentage by which the grant payable to the 
     State under section 403(a)(1) was reduced for such preceding 
     fiscal year, increased by 2 percentage points; or
       ``(II) 21 percent.

       ``(C) Penalty based on severity of failure.--The Secretary 
     shall impose reductions under subparagraph (A) with respect 
     to a fiscal year based on the degree of noncompliance, and 
     may reduce the penalty if the noncompliance is due to 
     circumstances that caused the State to become a needy State 
     (as defined in section 403(b)(6)) during the fiscal year.
       ``(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

[[Page H8840]]

     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, 2002, or 2003 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) the 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 this part; 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 the 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)(7) of this Act or 
     section 402 of the Personal Responsibility and Work 
     Opportunity Reconciliation Act of 1996.

       ``(ii) Applicable percentage.--The term `applicable 
     percentage' means for fiscal years 1997 through 2002, 80 
     percent (or, if the State meets the requirements of section 
     407(a) for the fiscal year, 75 percent) reduced (if 
     appropriate) in accordance with subparagraph (C)(ii).
       ``(iii) Historic state expenditures.--The term `historic 
     State expenditures' means, with respect to a State, the 
     lesser of--

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

       ``(aa) the State family assistance grant, plus the total 
     amount required to be paid to the State under former section 
     403 for fiscal year 1994 with respect to amounts expended by 
     the State for child care under subsection (g) or (i) of 
     section 402 (as in effect during fiscal year 1994); bears to
       ``(bb) the total amount required to be paid to the State 
     under former section 403 (as in effect during fiscal year 
     1994) for fiscal year 1994.

     Such term does not include any expenditures under the State 
     plan approved under part A (as so in effect) on behalf of 
     individuals covered by a tribal family assistance plan 
     approved under section 412, as determined by the Secretary.
       ``(iv) Expenditures by the state.--The term `expenditures 
     by the State' does not include--

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

     Notwithstanding subclause (IV) of the preceding sentence, 
     such term includes expenditures by a State for child care in 
     a fiscal year to the extent that the total amount of such 
     expenditures does not exceed an amount equal to the amount of 
     State expenditures in fiscal year 1994 or 1995 (whichever is 
     greater) that equal the non-Federal share for the programs 
     described in section 418(a)(1)(A).
       ``(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 to comply with 5-year limit on assistance.--
     If the Secretary determines that a State has not complied 
     with section 408(a)(1)(B) during a 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 5 percent of the State family assistance 
     grant.
       ``(10) 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 
     (excluding any amounts made available by the Federal 
     Government) 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.
       ``(11) Failure to maintain assistance to adult single 
     custodial parent who cannot obtain child care for child under 
     age 6.--
       ``(A) In general.--If the Secretary determines that a State 
     to which a grant is made under section 403 for a fiscal year 
     has violated section 407(e)(2) during the fiscal year, the 
     Secretary shall reduce the grant payable to the State under 
     section 403(a)(1) for the immediately succeeding fiscal year 
     by 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) with respect 
     to a fiscal year based on the degree of noncompliance.
       ``(12) Failure to expend additional state funds to replace 
     grant reductions.--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 (7) or (8) 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

[[Page H8841]]

     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 Penalties.--
       ``(1) In general.--In imposing the penalties described in 
     subsection (a), the Secretary shall not reduce any quarterly 
     payment to a State by more than 25 percent.
       ``(2) Carryforward of unrecovered penalties.--To the extent 
     that paragraph (1) of this subsection prevents the Secretary 
     from recovering during a fiscal year the full amount of 
     penalties imposed on a State under subsection (a) of this 
     section for a prior fiscal year, the Secretary shall apply 
     any remaining amount of such penalties to the grant payable 
     to the State under section 403(a)(1) for the immediately 
     succeeding fiscal year.

     ``SEC. 410. APPEAL OF ADVERSE DECISION.

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

     ``SEC. 411. DATA COLLECTION AND REPORTING.

       ``(a) Quarterly Reports by States.--
       ``(1) General reporting requirement.--
       ``(A) Contents of report.--Each eligible State shall 
     collect on a monthly basis, and report to the Secretary on a 
     quarterly basis, the following disaggregated case record 
     information on the families receiving assistance under the 
     State program funded under this part:
       ``(i) The county of residence of the family.
       ``(ii) Whether a child receiving such assistance or an 
     adult in the family is disabled.
       ``(iii) The ages of the members of such families.
       ``(iv) The number of individuals in the family, and the 
     relation of each family member to the youngest child in the 
     family.
       ``(v) The employment status and earnings of the employed 
     adult in the family.
       ``(vi) The marital status of the adults in the family, 
     including whether such adults have never married, are 
     widowed, or are divorced.
       ``(vii) The race and educational status of each adult in 
     the family.
       ``(viii) The race and educational status of each child in 
     the family.
       ``(ix) Whether the family received subsidized housing, 
     medical assistance under the State plan 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)(7);
       ``(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, 2001, and 2002, 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

[[Page H8842]]

     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 1997, 1998, 1999, 2000, 
     2001, and 2002 a grant in an amount equal to the amount 
     received by the Indian tribe in fiscal year 1994 under 
     section 482(i) (as in effect during fiscal year 1994).
       ``(B) Eligible indian tribe.--For purposes of subparagraph 
     (A), the term `eligible Indian tribe' means an Indian tribe 
     or Alaska Native organization that conducted a job 
     opportunities and basic skills training program in fiscal 
     year 1995 under section 482(i) (as in effect during fiscal 
     year 1995).
       ``(C) Use of grant.--Each Indian tribe to which a grant is 
     made under this paragraph shall use the grant for the purpose 
     of operating a program to make work activities available to 
     members of the Indian tribe.
       ``(D) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated $7,638,474 for each fiscal year specified in 
     subparagraph (A) for grants under subparagraph (A).
       ``(b) 3-Year Tribal Family Assistance Plan.--
       ``(1) In general.--Any Indian tribe that desires to receive 
     a tribal family assistance grant shall submit to the 
     Secretary a 3-year tribal family assistance plan that--
       ``(A) outlines the Indian tribe's approach to providing 
     welfare-related services for the 3-year period, consistent 
     with this section;
       ``(B) specifies whether the welfare-related services 
     provided under the plan will be provided by the Indian tribe 
     or through agreements, contracts, or compacts with 
     intertribal consortia, States, or other entities;
       ``(C) identifies the population and service area or areas 
     to be served by such plan;
       ``(D) provides that a family receiving assistance under the 
     plan may not receive duplicative assistance from other State 
     or tribal programs funded under this part;
       ``(E) identifies the employment opportunities in or near 
     the service area or areas of the Indian tribe and the manner 
     in which the Indian tribe will cooperate and participate in 
     enhancing such opportunities for recipients of assistance 
     under the plan consistent with any applicable State 
     standards; and
       ``(F) applies the fiscal accountability provisions of 
     section 5(f)(1) of the Indian Self-Determination and 
     Education Assistance Act (25 U.S.C. 450c(f)(1)), relating to 
     the submission of a single-agency audit report required by 
     chapter 75 of title 31, United States Code.
       ``(2) Approval.--The Secretary shall approve each tribal 
     family assistance plan submitted in accordance with paragraph 
     (1).
       ``(3) Consortium of tribes.--Nothing in this section shall 
     preclude the development and submission of a single tribal 
     family assistance plan by the participating Indian tribes of 
     an intertribal consortium.
       ``(c) Minimum Work Participation Requirements and Time 
     Limits.--The Secretary, with the participation of Indian 
     tribes, shall establish for each Indian tribe receiving a 
     grant under this section minimum work participation 
     requirements, appropriate time limits for receipt of welfare-
     related services under the grant, and penalties against 
     individuals--
       ``(1) consistent with the purposes of this section;
       ``(2) consistent with the economic conditions and resources 
     available to each tribe; and
       ``(3) similar to comparable provisions in section 407(e).
       ``(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) Report on Circumstances of Certain Children and 
     Families.--

[[Page H8843]]

       ``(1) In general.--Beginning 3 years after the date of the 
     enactment of this Act, the Secretary of Health and Human 
     Services shall prepare and submit to the Committees on Ways 
     and Means and on Economic and Educational Opportunities of 
     the House of Representatives and to the Committees on Finance 
     and on Labor and Resources of the Senate annual reports that 
     examine in detail the matters described in paragraph (2) with 
     respect to each of the following groups for the period after 
     such enactment:
       ``(A) Individuals who were children in families that have 
     become ineligible for assistance under a State program funded 
     under this part by reason of having reached a time limit on 
     the provision of such assistance.
       ``(B) Children born after such date of enactment to parents 
     who, at the time of such birth, had not attained 20 years of 
     age.
       ``(C) Individuals who, after such date of enactment, became 
     parents before attaining 20 years of age.
       ``(2) Matters described.--The matters described in this 
     paragraph are the following:
       ``(A) The percentage of each group that has dropped out of 
     secondary school (or the equivalent), and the percentage of 
     each group at each level of educational attainment.
       ``(B) The percentage of each group that is employed.
       ``(C) The percentage of each group that has been convicted 
     of a crime or has been adjudicated as a delinquent.
       ``(D) The rate at which the members of each group are born, 
     or have children, out-of-wedlock, and the percentage of each 
     group that is married.
       ``(E) The percentage of each group that continues to 
     participate in State programs funded under this part.
       ``(F) The percentage of each group that has health 
     insurance provided by a private entity (broken down by 
     whether the insurance is provided through an employer or 
     otherwise), the percentage that has health insurance provided 
     by an agency of government, and the percentage that does not 
     have health insurance.
       ``(G) The average income of the families of the members of 
     each group.
       ``(H) Such other matters as the Secretary deems 
     appropriate.
       ``(h) 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 1997 
     through 2002 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.
       ``(i) 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 each 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 the most recent 
     prior statement under this paragraph.
       ``(2) Submission of corrective action plan.--Not later than 
     90 days after the date a State submits a statement under 
     paragraph (1) which indicates that, as a result of the 
     amendments made by section 103 of the Personal Responsibility 
     and Work Opportunity Reconciliation Act of 1996, the child 
     poverty rate of the State has increased by 5 percent or more 
     since the most recent prior statement under paragraph (1), 
     the State shall prepare and submit to the Secretary a 
     corrective action plan in accordance with paragraph (3).
       ``(3) Contents of plan.--A corrective action plan submitted 
     under paragraph (2) shall outline that manner in which the 
     State will reduce the child poverty rate in the State. The 
     plan shall include a description of the actions to be taken 
     by the State under such plan.
       ``(4) Compliance with plan.--A State that submits a 
     corrective action plan that the Secretary has found contains 
     the information required by this subsection shall implement 
     the corrective action plan until the State determines that 
     the child poverty rate in the State is less than the lowest 
     child poverty rate on the basis of which the State was 
     required to submit the corrective action plan.
       ``(5) Methodology.--The Secretary shall prescribe 
     regulations establishing the methodology by which a State 
     shall determine the child poverty rate in the State. The 
     methodology shall 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 continue 
     to collect data on the 1992 and 1993 panels of the Survey of 
     Income and Program Participation as necessary to obtain such 
     information as will enable interested persons to evaluate the 
     impact of the amendments made by title I of the Personal 
     Responsibility and Work Opportunity Reconciliation 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, and 
     shall obtain information about the status of children 
     participating in such panels.
       ``(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 1996, 1997, 
     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.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     if any waiver granted to a State under section 1115 of this 
     Act 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 Reconciliation 
     Act of 1996, the amendments made by the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996 (other than by section 103(c) of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996) 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.
       ``(B) Financing limitation.--Notwithstanding any other 
     provision of law, beginning with fiscal year 1996, a State 
     operating under a waiver described in subparagraph (A) shall 
     be entitled to payment under section 403 for the fiscal year, 
     in lieu of any other payment provided for in the waiver.
       ``(2) Waivers granted subsequently.--
       ``(A) In general.--Except as provided in subparagraph (B), 
     if any waiver granted to a State under section 1115 of this 
     Act 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 Reconciliation 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 
     Reconciliation 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 Reconciliation 
     Act of 1996 (other than by section 103(c) of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996) 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 Reconciliation Act of 
     1996 are inconsistent with the waiver.
       ``(B) No effect on new work requirements.--Notwithstanding 
     subparagraph (A), a waiver granted under section 1115 or 
     otherwise which relates to the provision of assistance under 
     a State program funded under this part (as in effect on 
     September 30, 1996) shall not affect the applicability of 
     section 407 to the State.
       ``(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) of this paragraph, 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

[[Page H8844]]

     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 
     Reconciliation 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.--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) Grants to Outlying Areas.--Section 1108 (42 U.S.C. 
     1308) is amended--
       (1) by striking subsections (d) and (e);
       (2) by redesignating subsection (c) as subsection (f); and
       (3) 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 amount of the family assistance grant payable to 
     the territory without regard to section 409; and
       ``(ii) 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) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated for fiscal years 1997 through 2002, such sums as 
     are necessary for grants under this paragraph.
       ``(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), and reduced by 
     the amount of any penalty imposed on the territory under any 
     provision of law specified in subsection (a) during the 
     fiscal year.
       ``(3) Family assistance grant.--The term `family assistance 
     grant' has the meaning given such term by section 
     403(a)(1)(B).
       ``(4) Mandatory ceiling amount.--The term `mandatory 
     ceiling amount' means--
       ``(A) $107,255,000 with respect to for Puerto Rico;
       ``(B) $4,686,000 with respect to Guam;
       ``(C) $3,554,000 with respect to the Virgin Islands; and
       ``(D) $1,000,000 with respect to American Samoa.
       ``(5) 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 To Certain Programs.--A 
     territory to which an amount is paid under subsection (b) of 
     this section may use the amount in accordance with section 
     404(d).
       ``(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).''.
       (c) 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. 104. 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 103(a) of this 
     Act).
       (B) Any other program established or modified under title I 
     or II of this Act, that--
       (i) permits contracts with organizations; or

[[Page H8845]]

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

     SEC. 105. 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. 106. 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. 107. 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. 108. CONFORMING AMENDMENTS TO THE SOCIAL SECURITY ACT.

       (a) Amendments to Title II.--
       (1) Section 205(c)(2)(C)(vi) (42 U.S.C. 405(c)(2)(C)(vi)), 
     as so redesignated by section 321(a)(9)(B) of the Social 
     Security Independence and Program Improvements Act of 1994, 
     is amended--
       (A) by inserting ``an agency administering a program funded 
     under part A of title IV or'' before ``an agency operating''; 
     and
       (B) by striking ``A or D of title IV of this Act'' and 
     inserting ``D of such title''.
       (2) Section 228(d)(1) (42 U.S.C. 428(d)(1)) is amended by 
     inserting ``under a State program funded under'' before 
     ``part A of title IV''.
       (b) Amendments to Part B of Title IV.--Section 422(b)(2) 
     (42 U.S.C. 622(b)(2)) is amended--
       (1) by striking ``plan approved under part A of this 
     title'' and inserting ``program funded under part A''; and
       (2) by striking ``part E of this title'' and inserting 
     ``under the State plan approved under part E''.
       (c) Amendments to Part D of Title IV.--
       (1) Section 451 (42 U.S.C. 651) is amended by striking 
     ``aid'' and inserting ``assistance under a State program 
     funded''.
       (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is 
     amended--
       (A) by striking ``aid to families with dependent children'' 
     and inserting ``assistance under a State program funded under 
     part A'';
       (B) by striking ``such aid'' and inserting ``such 
     assistance''; and
       (C) by striking ``under section 402(a)(26) or'' and 
     inserting ``pursuant to section 408(a)(3) 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

[[Page H8846]]

     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)(3)''.
       (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)(3)''; 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''.
       (d) Amendments to Part E of Title IV.--
       (1) Section 470 (42 U.S.C. 670) is amended--
       (A) by striking ``would be'' and inserting ``would have 
     been''; and
       (B) by inserting ``(as such plan was in effect on June 1, 
     1995)'' after ``part A''.
       (2) Section 471(a)(17) (42 U.S.C. 671(a)(17)) is amended by 
     striking ``plans approved under parts A and D'' and inserting 
     ``program funded under part A and plan approved under part 
     D''.
       (3) Section 472(a) (42 U.S.C. 672(a)) is amended--
       (A) in the matter preceding paragraph (1)--
       (i) by striking ``would meet'' and inserting ``would have 
     met'';
       (ii) by inserting ``(as such sections were in effect on 
     June 1, 1995)'' after ``407''; and
       (iii) by inserting ``(as so in effect)'' after ``406(a)''; 
     and
       (B) in paragraph (4)--
       (i) in subparagraph (A)--

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

       (ii) in subparagraph (B)(ii), by inserting ``(as in effect 
     on June 1, 1995)'' after ``406(a)''.
       (4) Section 472(h) (42 U.S.C. 672(h)) is amended to read as 
     follows:
       ``(h)(1) For purposes of title XIX, any child with respect 
     to whom foster care maintenance payments are made under this 
     section is deemed to be a dependent child as defined in 
     section 406 (as in effect as of June 1, 1995) and deemed to 
     be a recipient of aid to families with dependent children 
     under part A of this title (as so in effect). For purposes of 
     title XX, any child with respect to whom foster care 
     maintenance payments are made under this section is deemed to 
     be a minor child in a needy family under a State program 
     funded under part A of this title and is deemed to be a 
     recipient of assistance under such part.
       ``(2) For purposes of paragraph (1), a child whose costs in 
     a foster family home or child care institution are covered by 
     the foster care maintenance payments being made with respect 
     to the child's minor parent, as provided in section 
     475(4)(B), shall be considered a child with respect to whom 
     foster care maintenance payments are made under this 
     section.''.
       (5) Section 473(a)(2) (42 U.S.C. 673(a)(2)) is amended--
       (A) in subparagraph (A)(i)--
       (i) by inserting ``(as such sections were in effect on June 
     1, 1995)'' after ``407'';
       (ii) by inserting ``(as so in effect)'' after ``specified 
     in section 406(a)''; and
       (iii) by inserting ``(as such section was in effect on June 
     1, 1995)'' after ``403'';
       (B) in subparagraph (B)(i)--
       (i) by inserting ``would have'' after ``(B)(i)''; and
       (ii) by inserting ``(as in effect on June 1, 1995)'' after 
     ``section 402''; and
       (C) in subparagraph (B)(ii)(II), by inserting ``(as in 
     effect on June 1, 1995)'' after ``406(a)''.
       (6) Section 473(b) (42 U.S.C. 673(b)) is amended to read as 
     follows:
       ``(b)(1) For purposes of title XIX, any child who is 
     described in paragraph (3) is deemed to be a dependent child 
     as defined in section 406 (as in effect as of June 1, 1995) 
     and deemed to be a recipient of aid to families with 
     dependent children under part A of this title (as so in 
     effect) in the State where such child resides.
       ``(2) For purposes of title XX, any child who is described 
     in paragraph (3) is deemed to be a minor child in a needy 
     family under a State program funded under part A of this 
     title and deemed to be a recipient of assistance under such 
     part.
       ``(3) A child described in this paragraph is any child--
       ``(A)(i) who is a child described in subsection (a)(2), and
       ``(ii) with respect to whom an adoption assistance 
     agreement is in effect under this section (whether or nor 
     adoption assistance payments are provided under the agreement 
     or are being made under this section), including any such 
     child who has been placed for adoption in accordance with 
     applicable State and local law (whether or not an 
     interlocutory or other judicial decree of adoption has been 
     issued), or
       ``(B) with respect to whom foster care maintenance payments 
     are being made under section 472.
       ``(4) For purposes of paragraphs (1) and (2), a child whose 
     costs in a foster family home or child-care institution are 
     covered by the foster care maintenance payments being made 
     with respect to the child's minor parent, as provided in 
     section 475(4)(B), shall be considered a child with respect 
     to whom foster care maintenance payments are being made under 
     section 472.''.
       (e) Repeal of Part F of Title IV.--Part F of title IV (42 
     U.S.C. 681-687) is repealed.
       (f) 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''.
       (g) 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.'';
       (B) in subsection (c)(3), by striking ``the program of aid 
     to families with dependent children'' and inserting ``part A 
     of such title''; and
       (C) by striking subsection (b) and redesignating 
     subsections (c) and (d) as subsections (b) and (c), 
     respectively.
       (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.

[[Page H8847]]

       (h) 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''.
       (i) 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''.
       (j) 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,''.
       (k) Amendment to Title XIX.--Section 1902(j) (42 U.S.C. 
     1396a(j)) is amended by striking ``1108(c)'' and inserting 
     ``1108(f)''.

     SEC. 109. 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).
       (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 of such Act (7 U.S.C. 2026) is amended--
       (1) in the first sentence of subsection (b)(1)(A), by 
     striking ``to aid to families with dependent children under 
     part A of title IV of the Social Security Act'' and inserting 
     ``or are receiving assistance under a State program funded 
     under part A of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.)''; and
       (2) in subsection (b)(3), by adding at the end the 
     following new subparagraph:
       ``(I) The Secretary may not grant a waiver under this 
     paragraph on or after the date of enactment of this 
     subparagraph. 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 the day before 
     such date.'';
       (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)(C)(ii)(II)--
       (i) by striking ``program for aid to families with 
     dependent children'' and inserting ``State program funded''; 
     and
       (ii) by inserting before the period at the end the 
     following: ``that the Secretary determines complies with 
     standards established by the Secretary that ensure that the 
     standards under the State program are comparable to or more 
     restrictive than those in effect on June 1, 1995''; and
       (B) in paragraph (6)--
       (i) in subparagraph (A)(ii)--

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

       (ii) in subparagraph (B), by striking ``aid to families 
     with dependent children'' and inserting ``assistance under 
     the State program funded under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) that the 
     Secretary determines complies with standards established by 
     the Secretary that ensure that the standards under the State 
     program are comparable to or more restrictive than those in 
     effect on June 1, 1995''; and
       (2) in subsection (d)(2)(C)--
       (A) by striking ``program for aid to families with 
     dependent children'' and inserting ``State program funded''; 
     and
       (B) by inserting before the period at the end the 
     following: ``that the Secretary determines complies with 
     standards established by the Secretary that ensure that the 
     standards under the State program are comparable to or more 
     restrictive than those in effect on June 1, 1995''.
       (h) Section 17(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: ``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. 110. 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''.

[[Page H8848]]

       (k) The 4th proviso of chapter VII of title I of Public Law 
     99-88 (25 U.S.C. 13d-1) is amended to read as follows: 
     ``Provided further, That general assistance payments made by 
     the Bureau of Indian Affairs shall be made--
       ``(1) after April 29, 1985, and before October 1, 1995, on 
     the basis of Aid to Families with Dependent Children (AFDC) 
     standards of need; and
       ``(2) on and after October 1, 1995, on the basis of 
     standards of need established under the State program funded 
     under part A of title IV of the Social Security Act,
     except that where a State ratably reduces its AFDC or State 
     program payments, the Bureau shall reduce general assistance 
     payments in such State by the same percentage as the State 
     has reduced the AFDC or State program payment.''.
       (l) The Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) 
     is amended--
       (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by striking 
     all that follows ``agency as'' and inserting ``being eligible 
     for financial assistance under part A of title IV of the 
     Social Security Act and as having continually received such 
     financial assistance during the 90-day period which 
     immediately precedes the date on which such individual is 
     hired by the employer.'';
       (2) in section 3304(a)(16) (26 U.S.C. 3304(a)(16)), by 
     striking ``eligibility for aid or services,'' and all that 
     follows through ``children approved'' and inserting 
     ``eligibility for assistance, or the amount of such 
     assistance, under a State program funded'';
       (3) in section 6103(l)(7)(D)(i) (26 U.S.C. 
     6103(l)(7)(D)(i)), by striking ``aid to families with 
     dependent children provided under a State plan approved'' and 
     inserting ``a State program funded'';
       (4) in section 6103(l)(10) (26 U.S.C. 6103(l)(10))--
       (A) by striking ``(c) or (d)'' each place it appears and 
     inserting ``(c), (d), or (e)''; and
       (B) by adding at the end of subparagraph (B) the following 
     new sentence: ``Any return information disclosed with respect 
     to section 6402(e) shall only be disclosed to officers and 
     employees of the State agency requesting such information.'';
       (5) in section 6103(p)(4) (26 U.S.C. 6103(p)(4)), in the 
     matter preceding subparagraph (A)--
       (A) by striking ``(5), (10)'' and inserting ``(5)''; and
       (B) by striking ``(9), or (12)'' and inserting ``(9), (10), 
     or (12)'';
       (6) in section 6334(a)(11)(A) (26 U.S.C. 6334(a)(11)(A)), 
     by striking ``(relating to aid to families with dependent 
     children)'';
       (7) in section 6402 (26 U.S.C. 6402)--
       (A) in subsection (a), by striking ``(c) and (d)'' and 
     inserting ``(c), (d), and (e)'';
       (B) by redesignating subsections (e) through (i) as 
     subsections (f) through (j), respectively; and
       (C) by inserting after subsection (d) the following:
       ``(e) Collection of Overpayments Under Title IV-A of the 
     Social Security Act.--The amount of any overpayment to be 
     refunded to the person making the overpayment shall be 
     reduced (after reductions pursuant to subsections (c) and 
     (d), but before a credit against future liability for an 
     internal revenue tax) in accordance with section 405(e) of 
     the Social Security Act (concerning recovery of overpayments 
     to individuals under State plans approved under part A of 
     title IV of such Act).''; and
       (8) in section 7523(b)(3)(C) (26 U.S.C. 7523(b)(3)(C)), by 
     striking ``aid to families with dependent children'' and 
     inserting ``assistance under a State program funded under 
     part A of title IV of the Social Security Act''.
       (m) Section 3(b) of the Wagner-Peyser Act (29 U.S.C. 
     49b(b)) is amended by striking ``State plan approved under 
     part A of title IV'' and inserting ``State program funded 
     under part A of title IV''.
       (n) The Job Training Partnership Act (29 U.S.C. 1501 et 
     seq.) is amended--
       (1) in section 4(29)(A)(i) (29 U.S.C. 1503(29)(A)(i)), by 
     striking ``(42 U.S.C. 601 et seq.)'';
       (2) in section 106(b)(6)(C) (29 U.S.C. 1516(b)(6)(C)), by 
     striking ``State aid to families with dependent children 
     records,'' and inserting ``records collected under the State 
     program funded under part A of title IV of the Social 
     Security Act,'';
       (3) in section 121(b)(2) (29 U.S.C. 1531(b)(2))--
       (A) by striking ``the JOBS program'' and inserting ``the 
     work activities required under title IV of the Social 
     Security Act''; and
       (B) by striking the second sentence;
       (4) in section 123(c) (29 U.S.C. 1533(c))--
       (A) in paragraph (1)(E), by repealing clause (vi); and
       (B) in paragraph (2)(D), by repealing clause (v);
       (5) in section 203(b)(3) (29 U.S.C. 1603(b)(3)), by 
     striking ``, including recipients under the JOBS program'';
       (6) in subparagraphs (A) and (B) of section 204(a)(1) (29 
     U.S.C. 1604(a)(1) (A) and (B)), by striking ``(such as the 
     JOBS program)'' each place it appears;
       (7) in section 205(a) (29 U.S.C. 1605(a)), by striking 
     paragraph (4) and inserting the following:
       ``(4) the portions of title IV of the Social Security Act 
     relating to work activities;'';
       (8) in section 253 (29 U.S.C. 1632)--
       (A) in subsection (b)(2), by repealing subparagraph (C); 
     and
       (B) in paragraphs (1)(B) and (2)(B) of subsection (c), by 
     striking ``the JOBS program or'' each place it appears;
       (9) in section 264 (29 U.S.C. 1644)--
       (A) in subparagraphs (A) and (B) of subsection (b)(1), by 
     striking ``(such as the JOBS program)'' each place it 
     appears; and
       (B) in subparagraphs (A) and (B) of subsection (d)(3), by 
     striking ``and the JOBS program'' each place it appears;
       (10) in section 265(b) (29 U.S.C. 1645(b)), by striking 
     paragraph (6) and inserting the following:
       ``(6) the portion of title IV of the Social Security Act 
     relating to work activities;'';
       (11) in the second sentence of section 429(e) (29 U.S.C. 
     1699(e)), by striking ``and shall be in an amount that does 
     not exceed the maximum amount that may be provided by the 
     State pursuant to section 402(g)(1)(C) of the Social Security 
     Act (42 U.S.C. 602(g)(1)(C))'';
       (12) in section 454(c) (29 U.S.C. 1734(c)), by striking 
     ``JOBS and'';
       (13) in section 455(b) (29 U.S.C. 1735(b)), by striking 
     ``the JOBS program,'';
       (14) in section 501(1) (29 U.S.C. 1791(1)), by striking 
     ``aid to families with dependent children under part A of 
     title IV of the Social Security Act (42 U.S.C. 601 et seq.)'' 
     and inserting ``assistance under the State program funded 
     under part A of title IV of the Social Security Act'';
       (15) in section 506(1)(A) (29 U.S.C. 1791e(1)(A)), by 
     striking ``aid to families with dependent children'' and 
     inserting ``assistance under the State program funded'';
       (16) in section 508(a)(2)(A) (29 U.S.C. 1791g(a)(2)(A)), by 
     striking ``aid to families with dependent children'' and 
     inserting ``assistance under the State program funded''; and
       (17) in section 701(b)(2)(A) (29 U.S.C. 1792(b)(2)(A))--
       (A) in clause (v), by striking the semicolon and inserting 
     ``; and''; and
       (B) by striking clause (vi).
       (o) Section 3803(c)(2)(C)(iv) of title 31, United States 
     Code, is amended to read as follows:
       ``(iv) assistance under a State program funded under part A 
     of title IV of the Social Security Act;''.
       (p) Section 2605(b)(2)(A)(i) of the Low-Income Home Energy 
     Assistance Act of 1981 (42 U.S.C. 8624(b)(2)(A)(i)) is 
     amended to read as follows:
       ``(i) assistance under the State program funded under part 
     A of title IV of the Social Security Act;''.
       (q) Section 303(f)(2) of the Family Support Act of 1988 (42 
     U.S.C. 602 note) is amended--
       (1) by striking ``(A)''; and
       (2) by striking subparagraphs (B) and (C).
       (r) The Balanced Budget and Emergency Deficit Control Act 
     of 1985 (2 U.S.C. 900 et seq.) is amended--
       (1) in the first section 255(h) (2 U.S.C. 905(h)), by 
     striking ``Aid to families with dependent children (75-0412-
     0-1-609);'' and inserting ``Block grants to States for 
     temporary assistance for needy families;''; and
       (2) in section 256 (2 U.S.C. 906)--
       (A) by striking subsection (k); and
       (B) by redesignating subsection (l) as subsection (k).
       (s) The Immigration and Nationality Act (8 U.S.C. 1101 et 
     seq.) is amended--
       (1) in section 210(f) (8 U.S.C. 1160(f)), by striking ``aid 
     under a State plan approved under'' each place it appears and 
     inserting ``assistance under a State program funded under'';
       (2) in section 245A(h) (8 U.S.C. 1255a(h))--
       (A) in paragraph (1)(A)(i), by striking ``program of aid to 
     families with dependent children'' and inserting ``State 
     program of assistance''; and
       (B) in paragraph (2)(B), by striking ``aid to families with 
     dependent children'' and inserting ``assistance under a State 
     program funded under part A of title IV of the Social 
     Security Act''; and
       (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)), by striking 
     ``State plan approved'' and inserting ``State program 
     funded''.
       (t) Section 640(a)(4)(B)(i) of the Head Start Act (42 
     U.S.C. 9835(a)(4)(B)(i)) is amended by striking ``program of 
     aid to families with dependent children under a State plan 
     approved'' and inserting ``State program of assistance 
     funded''.
       (u) Section 9 of the Act of April 19, 1950 (64 Stat. 47, 
     chapter 92; 25 U.S.C. 639) is repealed.
       (v) Subparagraph (E) of section 213(d)(6) of the School-To-
     Work Opportunities Act of 1994 (20 U.S.C. 6143(d)(6)) is 
     amended to read as follows:
       ``(E) part A of title IV of the Social Security Act (42 
     U.S.C. 601 et seq.) relating to work activities;''.
       (w) Section 552a(a)(8)(B)(iv)(III) of title 5, United 
     States Code, is amended by striking ``section 464 or 1137 of 
     the Social Security Act'' and inserting ``section 404(e), 
     464, or 1137 of the Social Security Act''.

     SEC. 111. 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

[[Page H8849]]

     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 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. 112. 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'';
       (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. 113. 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 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 title.

     SEC. 114. ASSURING MEDICAID COVERAGE FOR LOW-INCOME FAMILIES.

       (a) In General.--Title XIX is amended--
       (1) by redesignating section 1931 as section 1932; and
       (2) by inserting after section 1930 the following new 
     section:


          ``assuring coverage for certain low-income families

       ``Sec. 1931. (a) References to Title IV-A are References to 
     Pre-Welfare-Reform Provisions.--Subject to the succeeding 
     provisions of this section, with respect to a State any 
     reference in this title (or any other provision of law in 
     relation to the operation of this title) to a provision of 
     part A of title IV, or a State plan under such part (or a 
     provision of such a plan), including income and resource 
     standards and income and resource methodologies under such 
     part or plan, shall be considered a reference to such a 
     provision or plan as in effect as of July 16, 1996, with 
     respect to the State.
       ``(b) Application of Pre-Welfare-Reform Eligibility 
     Criteria.--
       ``(1) In general.--For purposes of this title, subject to 
     paragraphs (2) and (3), in determining eligibility for 
     medical assistance--
       ``(A) an individual shall be treated as receiving aid or 
     assistance under a State plan approved under part A of title 
     IV 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 section 406 and section 
     407(a),
     as in effect as of July 16, 1996; and
       ``(B) 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.
       ``(2) State option.--For purposes of applying this section, 
     a State--
       ``(A) may lower its income standards applicable with 
     respect to part A of title IV, but not below the income 
     standards applicable under its State plan under such part on 
     May 1, 1988;
       ``(B) may increase income or resource standards under the 
     State plan referred to in paragraph (1) over a period 
     (beginning after July 16, 1996) by a percentage that does not 
     exceed the percentage increase in the consumer price index 
     for all urban consumers (all items; U.S. city average) over 
     such period; and
       ``(C) may use income and resource methodologies that are 
     less restrictive than the methodologies used under the State 
     plan under such part as of July 16, 1996.
       ``(3) Option to terminate medical assistance for failure to 
     meet work requirement.--
       ``(A) Individuals receiving cash assistance under tanf.--In 
     the case of an individual who--
       ``(i) is receiving cash assistance under a State program 
     funded under part A of title IV,
       ``(ii) is eligible for medical assistance under this title 
     on a basis not related to section 1902(l), and
       ``(iii) has the cash assistance under such program 
     terminated pursuant to section 407(e)(1)(B) (as in effect on 
     or after the welfare reform effective date) because of 
     refusing to work,
     the State may terminate such individual's eligibility for 
     medical assistance under this title until such time as there 
     no longer is a basis for the termination of such cash 
     assistance because of such refusal.
       ``(B) Exception for children.--Subparagraph (A) shall not 
     be construed as permitting a State to terminate medical 
     assistance for a minor child who is not the head of a 
     household receiving assistance under a State program funded 
     under part A of title IV.
       ``(c) Treatment for Purposes of Transitional Coverage 
     Provisions.--
       ``(1) Transition in the case of child support 
     collections.--The provisions of section 406(h) (as in effect 
     on July 16, 1996) shall apply, in relation to this title, 
     with respect to individuals (and families composed of 
     individuals) who are described in subsection (b)(1)(A), in 
     the same manner as they applied before such date with respect 
     to individuals who became ineligible for aid to families with 
     dependent children as a result (wholly or partly) of the 
     collection of child or spousal support under part D of title 
     IV.
       ``(2) Transition in the case of earnings from employment.--
     For continued medical assistance in the case of individuals 
     (and families composed of individuals) described in 
     subsection (b)(1)(A) who would otherwise become ineligible 
     because of hours or income from employment, see sections 1925 
     and 1902(e)(1).
       ``(d) Waivers.--In the case of a waiver of a provision of 
     part A of title IV in effect with respect to a State as of 
     July 16, 1996, or which is submitted to the Secretary before 
     the date of the enactment of the Personal Responsibility and 
     Work Opportunity Reconciliation Act of 1996 and approved by 
     the Secretary on or before July 1, 1997, if the waiver 
     affects eligibility of individuals for medical assistance 
     under this title, such waiver may (but need not) continue to 
     be applied, at the option of the State, in relation to this 
     title after the date the waiver would otherwise expire.
       ``(e) State Option to Use 1 Application Form.--Nothing in 
     this section, or part A of title IV, shall be construed as 
     preventing a State from providing for the same application 
     form for assistance under a State program funded under part A 
     of title IV (on or after the welfare reform effective date) 
     and for medical assistance under this title.
       ``(f) Additional Rules of Construction.--
       ``(1) With respect to the reference in section 1902(a)(5) 
     to a State plan approved under part A of title IV, a State 
     may treat such reference as a reference either to a State 
     program funded under such part (as in effect on and after the 
     welfare reform effective date) or to the State plan under 
     this title.
       ``(2) Any reference in section 1902(a)(55) to a State plan 
     approved under part A of title IV shall be deemed a reference 
     to a State program funded under such part.
       ``(3) In applying section 1903(f), the applicable income 
     limitation otherwise determined shall be subject to increase 
     in the same manner as income or resource standards of a State 
     may be increased under subsection (b)(2)(B).
       ``(g) Relation to Other Provisions.--The provisions of this 
     section shall apply notwithstanding any other provision of 
     this Act.
       ``(h) Transitional Increased Federal Matching Rate for 
     Increased Administrative Costs.--
       ``(1) In general.--Subject to the succeeding provisions of 
     this subsection, the Secretary shall provide that with 
     respect to administrative expenditures described in paragraph 
     (2) the per centum specified in section 1903(a)(7) shall be 
     increased to such percentage as the Secretary specifies.
       ``(2) Administrative expenditures described.--The 
     administrative expenditures described in this paragraph are 
     expenditures described in section 1903(a)(7) that a State 
     demonstrates to the satisfaction of the Secretary are 
     attributable to administrative costs of eligibility 
     determinations that (but

[[Page H8850]]

     for the enactment of this section) would not be incurred.
       ``(3) Limitation.--The total amount of additional Federal 
     funds that are expended as a result of the application of 
     this subsection for the period beginning with fiscal year 
     1997 and ending with fiscal year 2000 shall not exceed 
     $500,000,000. In applying this paragraph, the Secretary shall 
     ensure the equitable distribution of additional funds among 
     the States.
       ``(4) Time limitation.--This subsection shall only apply 
     with respect to a State for expenditures incurred during the 
     first 12 calendar quarters in which the State program funded 
     under part A of title IV (as in effect on and after the 
     welfare reform effective date) is in effect.
       ``(i) Welfare Reform Effective Date.--In this section, the 
     term `welfare reform effective date' means the effective 
     date, with respect to a State, of title I of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996 (as specified in section 116 of such Act).''.
       (b) Plan Amendment.--Section 1902(a) (42 U.S.C. 1396a(a)) 
     is amended--
       (1) by striking ``and'' at the end of paragraph (61),
       (2) by striking the period at the end of paragraph (62) and 
     inserting ``; and'', and
       (3) by inserting after paragraph (62) the following new 
     paragraph:
       ``(63) provide for administration and determinations of 
     eligibility with respect to individuals who are (or seek to 
     be) eligible for medical assistance based on the application 
     of section 1931.''.
       (c) Extension of Work Transition Provisions.--Sections 
     1902(e)(1)(B) and 1925(f) (42 U.S.C. 1396a(e)(1)(B), 1396r-
     6(f)) are each amended by striking ``1998'' and inserting 
     ``2001''.
       (d) Elimination of Requirement of Minimum AFDC Payment 
     Levels.--(1) Section 1902(c) (42 U.S.C. 1396a(c)) is amended 
     by striking ``if--'' and all that follows and inserting the 
     following: ``if the State requires individuals described in 
     subsection (l)(1) to apply for assistance under the State 
     program funded under part A of title IV as a condition of 
     applying for or receiving medical assistance under this 
     title.''.
       (2) Section 1903(i) (42 U.S.C. 1396b(i)) is amended by 
     striking paragraph (9).

     SEC. 115. DENIAL OF ASSISTANCE AND BENEFITS FOR CERTAIN DRUG-
                   RELATED CONVICTIONS.

       (a) In General.--An individual convicted (under Federal or 
     State law) of any offense which is classified as a felony by 
     the law of the jurisdiction involved and which has as an 
     element the possession, use, or distribution of a controlled 
     substance (as defined in section 102(6) of the Controlled 
     Substances Act (21 U.S.C. 802(6))) shall not be eligible 
     for--
       (1) assistance under any State program funded under part A 
     of title IV of the Social Security Act, or
       (2) benefits under the food stamp program (as defined in 
     section 3(h) of the Food Stamp Act of 1977) or any State 
     program carried out under the Food Stamp Act of 1977.
       (b) Effects on Assistance and Benefits for Others.--
       (1) Program of temporary assistance for needy families.--
     The amount of assistance otherwise required to be provided 
     under a State program funded under part A of title IV of the 
     Social Security Act to the family members of an individual to 
     whom subsection (a) applies shall be reduced by the amount 
     which would have otherwise been made available to the 
     individual under such part.
       (2) Benefits under the food stamp act of 1977.--The amount 
     of benefits otherwise required to be provided to a household 
     under the food stamp program (as defined in section 3(h) of 
     the Food Stamp Act of 1977), or any State program carried out 
     under the Food Stamp Act of 1977, shall be determined by 
     considering the individual to whom subsection (a) applies not 
     to be a member of such household, except that the income and 
     resources of the individual shall be considered to be income 
     and resources of the household.
       (c) Enforcement.--A State that has not exercised its 
     authority under subsection (d)(1)(A) shall require each 
     individual applying for assistance or benefits referred to in 
     subsection (a), during the application process, to state, in 
     writing, whether the individual, or any member of the 
     household of the individual, has been convicted of a crime 
     described in subsection (a).
       (d) Limitations.--
       (1) State elections.--
       (A) Opt out.--A State may, by specific reference in a law 
     enacted after the date of the enactment of this Act, exempt 
     any or all individuals domiciled in the State from the 
     application of subsection (a).
       (B) Limit period of prohibition.--A State may, by law 
     enacted after the date of the enactment of this Act, limit 
     the period for which subsection (a) shall apply to any or all 
     individuals domiciled in the State.
       (2) Inapplicability to convictions occurring on or before 
     enactment.--Subsection (a) shall not apply to convictions 
     occurring on or before the date of the enactment of this Act.
       (e) Definitions of State.--For purposes of this section, 
     the term ``State'' has the meaning given it--
       (1) in section 419(5) of the Social Security Act, when 
     referring to assistance provided under a State program funded 
     under part A of title IV of the Social Security Act, and
       (2) in section 3(m) of the Food Stamp Act of 1977, when 
     referring to the food stamp program (as defined in section 
     3(h) of the Food Stamp Act of 1977) or any State program 
     carried out under the Food Stamp Act of 1977.
       (f) Rule of Interpretation.--Nothing in this section shall 
     be construed to deny the following Federal benefits:
       (1) Emergency medical services under title XIX of the 
     Social Security Act.
       (2) Short-term, noncash, 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.
       (4) Prenatal care.
       (5) Job training programs.
       (6) Drug treatment programs.

     SEC. 116. EFFECTIVE DATE; TRANSITION RULE.

       (a) Effective Dates.--
       (1) In general.--Except as otherwise provided in this 
     title, this title and the amendments made by this title shall 
     take effect on July 1, 1997.
       (2) Delayed effective date for certain provisions.--
     Notwithstanding any other provision of this section, 
     paragraphs (2), (3), (4), (5), (8), and (10) of section 
     409(a) and section 411(a) of the Social Security Act (as 
     added by the amendments made by section 103(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) Grants to outlying areas.--The amendments made by 
     section 103(b) shall take effect on October 1, 1996.
       (4) Elimination of child care programs.--The amendments 
     made by section 103(c) shall take effect on October 1, 1996.
       (5) 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 
     103(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 103(a)(1) of this Act), then--
       (i) on and after the date of such receipt--

       (I) except as provided in clause (ii), this title and the 
     amendments made by this title (other than by section 103(c) 
     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 
     103(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 103(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 
     103(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 103(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 103(a)(1) of this Act),

[[Page H8851]]

     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 
     103(a)(1) of this Act).
       (2) Claims, actions, and proceedings.--The amendments made 
     by this title shall not apply with respect to--
       (A) powers, duties, functions, rights, claims, penalties, 
     or obligations applicable to aid, assistance, or services 
     provided before the effective date of this title under the 
     provisions amended; and
       (B) administrative actions and proceedings commenced before 
     such date, or authorized before such date to be commenced, 
     under such provisions.
       (3) Closing out account for those programs terminated or 
     substantially modified by this title.--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 title.
       (4) Continuance in office of assistant secretary for family 
     support.--The individual who, on the day before the effective 
     date of this title, 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 
     103(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).
                 TITLE II--SUPPLEMENTAL SECURITY INCOME

     SEC. 200. REFERENCE TO SOCIAL SECURITY ACT.

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

     SEC. 201. 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)(A) 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 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. 202. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS AND 
                   PROBATION AND PAROLE VIOLATORS.

       (a) In General.--Section 1611(e) (42 U.S.C. 1382(e)), as 
     amended by section 201(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 201(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); and
       ``(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. 203. TREATMENT OF PRISONERS.

       (a) Implementation of Prohibition Against Payment of 
     Benefits to Prisoners.--
       (1) In general.--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 an agreement, 
     with any interested State or local institution described in 
     clause (i) or (ii) of section 202(x)(1)(A) the primary 
     purpose of which is to confine individuals as described in 
     section 202(x)(1)(A), under which--
       ``(I) the institution shall provide to the Commissioner, on 
     a monthly basis and in a manner specified by the 
     Commissioner, the names, social security account numbers, 
     dates of birth, confinement commencement dates, and, to the 
     extent available to the institution, 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 as a 
     result of the application of this subparagraph, $400 if the 
     institution furnishes the information described in subclause 
     (I) to the Commissioner within 30 days after the date such 
     individual becomes an inmate of such institution, or $200 if 
     the institution furnishes such information after 30 days 
     after such date but within 90 days after such date.
       ``(ii)(I) 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.
       ``(II) The Commissioner is authorized to provide, on a 
     reimbursable basis, information obtained pursuant to 
     agreements entered into under clause (i) to any Federal or 
     federally-assisted cash, food, or medical assistance program 
     for eligibility purposes.
       ``(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.''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to individuals whose period of confinement in an 
     institution commences on or after the first day

[[Page H8852]]

     of the seventh month beginning after the month in which this 
     Act is enacted.
       (b) Study of Other Potential Improvements in the Collection 
     of Information Respecting Public Inmates.--
       (1) Study.--The Commissioner of Social Security shall 
     conduct a study of the desirability, feasibility, and cost 
     of--
       (A) establishing a system under which Federal, State, and 
     local courts would furnish to the Commissioner such 
     information respecting court orders by which individuals are 
     confined in jails, prisons, or other public penal, 
     correctional, or medical facilities as the Commissioner may 
     require for the purpose of carrying out section 1611(e)(1) of 
     the Social Security Act; and
       (B) requiring that State and local jails, prisons, and 
     other institutions that enter into agreements with the 
     Commissioner under section 1611(e)(1)(I) of the Social 
     Security Act furnish the information required by such 
     agreements 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.
       (c) Additional Report to Congress.--Not later than October 
     1, 1998, the Commissioner of Social Security shall provide to 
     the Committee on Finance of the Senate and the Committee on 
     Ways and Means of the House of Representatives a list of the 
     institutions that are and are not providing information to 
     the Commissioner under section 1611(e)(1)(I) of the Social 
     Security Act (as added by this section).

     SEC. 204. 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--
       (A) by striking ``or requests'' and inserting ``, on the 
     first day of the month following the date the application is 
     filed, or, in any case in which either spouse requests''; and
       (B) by striking ``application or''.
       (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.
               Subtitle B--Benefits for Disabled Children

     SEC. 211. DEFINITION AND ELIGIBILITY RULES.

       (a) Definition of Childhood Disability.--Section 1614(a)(3) 
     (42 U.S.C. 1382c(a)(3)), as amended by section 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)(i) 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.
       ``(ii) Notwithstanding clause (i), 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) Changes to Childhood SSI Regulations.--
       (1) Modification to medical criteria for evaluation of 
     mental and emotional disorders.--The Commissioner of Social 
     Security shall modify sections 112.00C.2. and 112.02B.2.c.(2) 
     of appendix 1 to subpart P of part 404 of title 20, Code of 
     Federal Regulations, to eliminate references to maladaptive 
     behavior in the domain of personal/behavorial function.
       (2) Discontinuance of individualized functional 
     assessment.--The Commissioner of Social Security shall 
     discontinue the individualized functional assessment for 
     children set forth in sections 416.924d and 416.924e of title 
     20, Code of Federal Regulations.
       (c) 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.
       (d) Effective Dates, Etc.--
       (1) Effective dates.--
       (A) Subsections (a) and (b).--
       (i) In general.--The provisions of, and amendments made by, 
     subsections (a) and (b) of this section 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 (c).--The amendments made by subsection (c) 
     of this section 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 eligible 
     for 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 (b) of this 
     section. With respect to any redetermination under this 
     subparagraph--
       (i) section 1614(a)(4) of the Social Security Act (42 
     U.S.C. 1382c(a)(4)) shall not apply;
       (ii) the Commissioner of Social Security shall apply the 
     eligibility criteria for new applicants for benefits under 
     title XVI of such Act;

[[Page H8853]]

       (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 (b) 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) Cap adjustment for ssi administrative work required by 
     welfare reform.--
       (A) Authorization.--For the additional costs of continuing 
     disability reviews and redeterminations under title XVI of 
     the Social Security Act, there is hereby authorized to be 
     appropriated to the Social Security Administration, in 
     addition to amounts authorized under section 201(g)(1)(A) of 
     the Social Security Act, $150,000,000 in fiscal year 1997 and 
     $100,000,000 in fiscal year 1998.
       (B) Cap adjustment.--Section 251(b)(2)(H) of the Balanced 
     Budget and Emergency Deficit Control Act of 1985, as amended 
     by section 103(b) of the Contract with America Advancement 
     Act of 1996, is amended--
       (i) in clause (i)--

       (I) in subclause (II) by--

       (aa) striking ``$25,000,000'' and inserting 
     ``$175,000,000''; and
       (bb) striking ``$160,000,000'' and inserting 
     ``$310,000,000''; and

       (II) in subclause (III) by--

       (aa) striking ``$145,000,000'' and inserting 
     ``$245,000,000''; and
       (bb) striking ``$370,000,000'' and inserting 
     ``$470,000,000''; and
       (ii) by amending clause (ii)(I) to read as follows:
       ``(I) the term `continuing disability reviews' means 
     reviews or redeterminations as defined under section 
     201(g)(1)(A) of the Social Security Act and reviews and 
     redeterminations authorized under section 211 of the Personal 
     Responsibility and Work Opportunity Reconciliation Act of 
     1996;''.
       (C) Adjustments.--Section 606(e)(1)(B) of the Congressional 
     Budget Act of 1974 is amended by adding at the end the 
     following new sentences: ``If the adjustments referred to in 
     the preceding sentence are made for an appropriations measure 
     that is not enacted into law, then the Chairman of the 
     Committee on the Budget of the House of Representatives 
     shall, as soon as practicable, reverse those adjustments. The 
     Chairman of the Committee on the Budget of the House of 
     Representatives shall submit any adjustments made under this 
     subparagraph to the House of Representatives and have such 
     adjustments published in the Congressional Record.''.
       (D) Conforming amendment.--Section 103(d)(1) of the 
     Contract with America Advancement Act of 1996 (42 U.S.C. 401 
     note) is amended by striking ``medicaid programs.'' and 
     inserting ``medicaid programs, except that the amounts 
     appropriated pursuant to the authorization and discretionary 
     spending allowance provisions in section 211(d)(2)(5) of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996 shall be used only 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. 212. ELIGIBILITY REDETERMINATIONS AND CONTINUING 
                   DISABILITY REVIEWS.

       (a) Continuing Disability Reviews Relating to Certain 
     Children.--Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), 
     as redesignated by section 211(a)(3) 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. 213. 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

[[Page H8854]]

       (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 shall 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 (bb), (cc), (dd), 
     (ff), or (gg), is related to the impairment (or combination 
     of impairments) of such individual.
       ``(III) The use of funds from an account established under 
     clause (i) in any manner not authorized by this clause--
       ``(aa) by a representative payee shall be considered a 
     misapplication of benefits for all purposes of this 
     paragraph, and any representative payee who knowingly 
     misapplies benefits from such an account shall be liable to 
     the Commissioner in an amount equal to the total amount of 
     such benefits; and
       ``(bb) by an eligible individual who is his or her own 
     payee shall be considered a misapplication of benefits for 
     all purposes of this paragraph and the total amount of such 
     benefits so used shall be considered to be the uncompensated 
     value of a disposed resource and shall be subject to the 
     provisions of section 1613(c).
       ``(IV) This clause shall continue to apply to funds in the 
     account after the child has reached age 18, regardless of 
     whether benefits are paid directly to the beneficiary or 
     through a representative payee.
       ``(iii) The representative payee may deposit into the 
     account established pursuant to clause (i)--
       ``(I) past-due benefits payable to the eligible individual 
     in an amount less than that specified in clause (i)(II), and
       ``(II) any other funds representing an underpayment under 
     this title to such individual, provided that the amount of 
     such underpayment is equal to or exceeds the maximum monthly 
     benefit payable under this title to an eligible individual.
       ``(iv) The Commissioner of Social Security shall establish 
     a system for accountability monitoring whereby such 
     representative payee shall report, at such time and in such 
     manner as the Commissioner shall require, on activity 
     respecting funds in the account established pursuant to 
     clause (i).''.
       (b) Exclusion From Resources.--Section 1613(a) (42 U.S.C. 
     1382b(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (10);
       (2) by striking the period at the end of paragraph (11) and 
     inserting ``; and''; and
       (3) 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).''.
       (c) Exclusion From Income.--Section 1612(b) (42 U.S.C. 
     1382a(b)) is amended--
       (1) by striking ``and'' at the end of paragraph (19);
       (2) by striking the period at the end of paragraph (20) and 
     inserting ``; and''; and
       (3) 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).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to payments made after the date of the enactment 
     of this Act.

     SEC. 214. 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 by inserting ``or, in the case of 
     an eligible individual who is a child 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. 215. 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 subtitle.
              Subtitle C--Additional Enforcement Provision

     SEC. 221. 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 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. 222. 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 subtitle.
   Subtitle D--Studies Regarding Supplemental Security Income Program

     SEC. 231. ANNUAL REPORT ON THE SUPPLEMENTAL SECURITY INCOME 
                   PROGRAM.

       Title XVI (42 U.S.C. 1381 et seq.), as amended by section 
     105(b)(3) of the Contract with America Advancement Act of 
     1996, 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

[[Page H8855]]

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

     SEC. 300. REFERENCE TO SOCIAL SECURITY ACT.

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

     SEC. 301. 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, or 
     (III) 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. 302. 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 302 of the Personal 
     Responsibility and Work Opportunity Act Reconciliation 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 302 of the Personal 
     Responsibility and Work Opportunity Reconciliation 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

[[Page H8856]]

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

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

       ``(3) Families that never received assistance.--In the case 
     of any other family, the State shall distribute the amount so 
     collected to the family.
       ``(4) Families under certain agreements.--In the case of a 
     family receiving assistance from an Indian tribe, distribute 
     the amount so collected pursuant to an agreement entered into 
     pursuant to a State plan under section 454(33).
       ``(5) Study and report.--Not later than October 1, 1998, 
     the Secretary shall report to the Congress the Secretary's 
     findings with respect to--
       ``(A) whether the distribution of post-assistance 
     arrearages to families has been effective in moving people 
     off of welfare and keeping them off of welfare;
       ``(B) whether early implementation of a pre-assistance 
     arrearage program by some States has been effective in moving 
     people off of welfare and keeping them off of welfare;
       ``(C) what the overall impact has been of the amendments 
     made by the Personal Responsibility and Work Opportunity Act 
     of 1996 with respect to child support enforcement in moving 
     people off of welfare and keeping them off of welfare; and
       ``(D) based on the information and data the Secretary has 
     obtained, what changes, if any, should be made in the 
     policies related to the distribution of child support 
     arrearages.
       ``(b) Continuation Of Assignments.--Any rights to support 
     obligations, which were assigned to a State as a condition of 
     receiving assistance from the State under part A and which 
     were in effect on the day before the date of the enactment of 
     the Personal Responsibility and Work Opportunity Act of 1996, 
     shall remain assigned after such date.
       ``(c) Definitions.--As used in subsection (a):
       ``(1) Assistance.--The term `assistance from the State' 
     means--
       ``(A) assistance under the State program funded under part 
     A or under the State plan approved under part A of this title 
     (as in effect on the day before the date of the enactment of 
     the Personal Responsibility and Work Opportunity Act of 
     1996); and
       ``(B) foster care maintenance payments under the State plan 
     approved under part E of this title.
       ``(2) Federal share.--The term `Federal share' means that 
     portion of the amount collected resulting from the 
     application of the Federal medical assistance percentage in 
     effect for the fiscal year in which the amount is collected.
       ``(3) Federal medical assistance percentage.--The term 
     `Federal medical assistance percentage' means--
       ``(A) the Federal medical assistance percentage (as defined 
     in section 1118), in the case of Puerto Rico, the Virgin 
     Islands, Guam, and American Samoa; or
       ``(B) the Federal medical assistance percentage (as defined 
     in section 1905(b), as in effect on September 30, 1996) in 
     the case of any other State.
       ``(4) State share.--The term `State share' means 100 
     percent minus the Federal share.
       ``(d) Hold Harmless Provision.--If the amounts collected 
     which could be retained by the State in the fiscal year (to 
     the extent necessary to reimburse the State for amounts paid 
     to families as assistance by the State) are less than the 
     State share of the amounts collected in fiscal year 1995 
     (determined in accordance with section 457 as in effect on 
     the day before the date of the enactment of the Personal 
     Responsibility and Work Opportunity Act of 1996), the State 
     share for the fiscal year shall be an amount equal to the 
     State share in fiscal year 1995.
       ``(e) Gap Payments not Subject to Distribution Under This 
     Section.--At State option, this section shall not apply to 
     any amount collected on behalf of a family as support by the 
     State (and paid to the family in addition to the amount of 
     assistance otherwise payable to the family) pursuant to a 
     plan approved under this part if such amount would have been 
     paid to the family by the State under section 402(a)(28), as 
     in effect and applied on the day before the date of the 
     enactment of section 302 of the Personal Responsibility and 
     Work Opportunity Reconciliation 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. 303. PRIVACY SAFEGUARDS.

       (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), 
     as amended by section 301(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. 304. RIGHTS TO NOTIFICATION OF HEARINGS.

       (a) In General.--Section 454 (42 U.S.C. 654), as amended by 
     section 302(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.
                  Subtitle B--Locate and Case Tracking

     SEC. 311. STATE CASE REGISTRY.

       Section 454A, as added by section 344(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.

[[Page H8857]]

       ``(4) Payment records.--Each case record in the State case 
     registry with respect to which services are being provided 
     under the State plan approved under this part and with 
     respect to which a support order has been established shall 
     include a record of--
       ``(A) the amount of monthly (or other periodic) support 
     owed under the order, and other amounts (including 
     arrearages, interest or late payment penalties, and fees) due 
     or overdue under the order;
       ``(B) any amount described in subparagraph (A) that has 
     been collected;
       ``(C) the distribution of such collected amounts;
       ``(D) the birth date of any child for whom the order 
     requires the provision of support; and
       ``(E) the amount of any lien imposed with respect to the 
     order pursuant to section 466(a)(4).
       ``(5) Updating and monitoring.--The State agency operating 
     the automated system required by this section shall promptly 
     establish and update, maintain, and regularly monitor, case 
     records in the State case registry with respect to which 
     services are being provided under the State plan approved 
     under this part, on the basis of--
       ``(A) information on administrative actions and 
     administrative and judicial proceedings and orders relating 
     to paternity and support;
       ``(B) information obtained from comparison with Federal, 
     State, or local sources of information;
       ``(C) information on support collections and distributions; 
     and
       ``(D) any other relevant information.
       ``(f) Information Comparisons and Other Disclosures of 
     Information.--The State shall use the automated system 
     required by this section to extract information from (at such 
     times, and in such standardized format or formats, as may be 
     required by the Secretary), to share and compare information 
     with, and to receive information from, other data bases and 
     information comparison services, in order to obtain (or 
     provide) information necessary to enable the State agency (or 
     the Secretary or other State or Federal agencies) to carry 
     out this part, subject to section 6103 of the Internal 
     Revenue Code of 1986. Such information comparison activities 
     shall include the following:
       ``(1) Federal case registry of child support orders.--
     Furnishing to the Federal Case Registry of Child Support 
     Orders established under section 453(h) (and update as 
     necessary, with information including notice of expiration of 
     orders) the minimum amount of information on child support 
     cases recorded in the State case registry that is necessary 
     to operate the registry (as specified by the Secretary in 
     regulations).
       ``(2) Federal parent locator service.--Exchanging 
     information with the Federal Parent Locator Service for the 
     purposes specified in section 453.
       ``(3) Temporary family assistance and medicaid agencies.--
     Exchanging information with State agencies (of the State and 
     of other States) administering programs funded under part A, 
     programs operated under a State plan 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. 312. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

       (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), 
     as amended by sections 301(b) and 303(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 344(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 
     income 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, 
     except that in cases described in subsection (a)(1)(B), the 
     State disbursement unit shall not be required to convert and 
     maintain in automated form records of payments kept pursuant 
     to section 466(a)(8)(B)(iii) before the effective date of 
     this section.
       ``(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 344(a)(2) and as amended by section 311 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 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. 313. STATE DIRECTORY OF NEW HIRES.

       (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), 
     as amended by sections 301(b), 303(a) and 312(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

[[Page H8858]]

       (3) by adding after paragraph (27) the following new 
     paragraph:
       ``(28) provide that, on and after October 1, 1997, the 
     State will operate a State Directory of New Hires in 
     accordance with section 453A.''.
       (b) State Directory of New Hires.--Part D of title IV (42 
     U.S.C. 651-669) is amended by inserting after section 453 the 
     following new section:

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

       ``(a) Establishment.--
       ``(1) In general.--
       ``(A) Requirement for States that have no directory.--
     Except as provided in subparagraph (B), not later than 
     October 1, 1997, each State shall establish an automated 
     directory (to be known as the `State Directory of New Hires') 
     which shall contain information supplied in accordance with 
     subsection (b) by employers on each newly hired employee.
       ``(B) States with new hire reporting in existence.--A State 
     which has a new hire reporting law in existence on the date 
     of the enactment of this section may continue to operate 
     under the State law, but the State must meet the requirements 
     of subsection (g)(2) not later than October 1, 1997, and the 
     requirements of this section (other than subsection (g)(2)) 
     not later than October 1, 1998.
       ``(2) Definitions.--As used in this section:
       ``(A) Employee.--The term `employee'--
       ``(i) means an individual who is an employee within the 
     meaning of chapter 24 of the Internal Revenue Code of 1986; 
     and
       ``(ii) does not include an employee of a Federal or State 
     agency performing intelligence or counterintelligence 
     functions, if the head of such agency has determined that 
     reporting pursuant to paragraph (1) with respect to the 
     employee could endanger the safety of the employee or 
     compromise an ongoing investigation or intelligence mission.
       ``(B) Employer.--
       ``(i) In general.--The term `employer' has the meaning 
     given such term in section 3401(d) of the Internal Revenue 
     Code of 1986 and includes any governmental entity and any 
     labor organization.
       ``(ii) Labor organization.--The term `labor organization' 
     shall have the meaning given such term in section 2(5) of the 
     National Labor Relations Act, and includes any entity (also 
     known as a `hiring hall') which is used by the organization 
     and an employer to carry out requirements described in 
     section 8(f)(3) of such Act of an agreement between the 
     organization and the employer.
       ``(b) Employer Information.--
       ``(1) Reporting requirement.--
       ``(A) In general.--Except as provided in subparagraphs (B) 
     and (C), each employer shall furnish to the Directory of New 
     Hires of the State in which a newly hired employee works, a 
     report that contains the name, address, and social security 
     number of the employee, and the name and address of, and 
     identifying number assigned under section 6109 of the 
     Internal Revenue Code of 1986 to, the employer.
       ``(B) Multistate employers.--An employer that has employees 
     who are employed in 2 or more States and that transmits 
     reports magnetically or electronically may comply with 
     subparagraph (A) by designating 1 State in which such 
     employer has employees to which the employer will transmit 
     the report described in subparagraph (A), and transmitting 
     such report to such State. Any employer that transmits 
     reports pursuant to this subparagraph shall notify the 
     Secretary in writing as to which State such employer 
     designates for the purpose of sending reports.
       ``(C) Federal government employers.--Any department, 
     agency, or instrumentality of the United States shall comply 
     with subparagraph (A) by transmitting the report described in 
     subparagraph (A) to the National Directory of New Hires 
     established pursuant to section 453.
       ``(2) Timing of report.--Each State may provide the time 
     within which the report required by paragraph (1) shall be 
     made with respect to an employee, but such report shall be 
     made--
       ``(A) not later than 20 days after the date the employer 
     hires the employee; or
       ``(B) in the case of an employer transmitting reports 
     magnetically or electronically, by 2 monthly transmissions 
     (if necessary) not less than 12 days nor more than 16 days 
     apart.
       ``(c) Reporting Format and Method.--Each report required by 
     subsection (b) shall be made on a W-4 form or, at the option 
     of the employer, an equivalent form, and may be transmitted 
     by 1st class mail, magnetically, or electronically.
       ``(d) Civil Money Penalties on Noncomplying Employers.--The 
     State shall have the option to set a State civil money 
     penalty which shall be less than--
       ``(1) $25; or
       ``(2) $500 if, under State law, the failure is the result 
     of a conspiracy between the employer and the employee to not 
     supply the required report or to supply a false or incomplete 
     report.
       ``(e) Entry of Employer Information.--Information shall be 
     entered into the data base maintained by the State Directory 
     of New Hires within 5 business days of receipt from an 
     employer pursuant to subsection (b).
       ``(f) Information Comparisons.--
       ``(1) In general.--Not later than May 1, 1998, an agency 
     designated by the State shall, directly or by contract, 
     conduct automated comparisons of the social security numbers 
     reported by employers pursuant to subsection (b) and the 
     social security numbers appearing in the records of the State 
     case registry for cases being enforced under the State plan.
       ``(2) Notice of match.--When an information comparison 
     conducted under paragraph (1) reveals a match with respect to 
     the social security number of an individual required to 
     provide support under a support order, the State Directory of 
     New Hires shall provide the agency administering the State 
     plan approved under this part of the appropriate State with 
     the name, address, and social security number of the employee 
     to whom the social security number is assigned, and the name 
     and address of, and identifying number assigned under section 
     6109 of the Internal Revenue Code of 1986 to, the employer.
       ``(g) Transmission of Information.--
       ``(1) Transmission of wage withholding notices to 
     employers.--Within 2 business days after the date information 
     regarding a newly hired employee is entered into the State 
     Directory of New Hires, the State agency enforcing the 
     employee's child support obligation shall transmit a notice 
     to the employer of the employee directing the employer to 
     withhold from the income 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 income is 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, and may disclose such information to any agent 
     of the agency that is under contract with the agency to carry 
     out such purposes.
       ``(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)''.
       (d) Disclosure to Certain Agents.--Section 303(e) (42 
     U.S.C. 503(e)) is amended by adding at the end the following:
       ``(5) A State or local child support enforcement agency may 
     disclose to any agent of the agency that is under contract 
     with the agency to carry out the purposes described in 
     paragraph (1)(B) wage information that is disclosed to an 
     officer or employee of the agency under paragraph (1)(A). Any 
     agent of a State or local child support agency that receives 
     wage information under this paragraph shall comply with the 
     safeguards established pursuant to paragraph (1)(B).''.

     SEC. 314. 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 income 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.''.

[[Page H8859]]

       (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 withhold funds as directed in 
     the notice, except that when an employer receives an income 
     withholding order issued by another State, the employer shall 
     apply the income withholding law of the state of the 
     obligor's principal place of employment in determining--
       ``(I) the employer's fee for processing an income 
     withholding order;
       ``(II) the maximum amount permitted to be withheld from the 
     obligor's income;
       ``(III) the time periods within which the employer must 
     implement the income withholding order and forward the child 
     support payment;
       ``(IV) the priorities for withholding and allocating income 
     withheld for multiple child support obligees; and
       ``(V) any withholding terms or conditions not specified in 
     the order.
     An employer who complies with an income withholding notice 
     that is regular on its face shall not be subject to civil 
     liability to any individual or agency for conduct in 
     compliance with the notice.'';
       (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 income withholding required by this subsection 
     because of the existence of such withholding and the 
     obligations or additional obligations which it imposes upon 
     the employer; or
       ``(ii) fails to withhold support from income 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) Definition of Income.--
       (1) In general.--Section 466(b)(8) (42 U.S.C. 666(b)(8)) is 
     amended to read as follows:
       ``(8) For purposes of subsection (a) and this subsection, 
     the term `income' means any periodic form of payment due to 
     an individual, regardless of source, including wages, 
     salaries, commissions, bonuses, worker's compensation, 
     disability, payments pursuant to a pension or retirement 
     program, and interest.''.
       (2) Conforming amendments.--
       (A) Subsections (a)(8)(A), (a)(8)(B)(i), (b)(3)(A), 
     (b)(3)(B), (b)(6)(A)(i), and (b)(6)(C), and (b)(7) of section 
     466 (42 U.S.C. 666(a)(8)(A), (a)(8)(B)(i), (b)(3)(A), 
     (b)(3)(B), (b)(6)(A)(i), and (b)(6)(C), and (b)(7)) are each 
     amended by striking ``wages'' each place such term appears 
     and inserting ``income''.
       (B) Section 466(b)(1) (42 U.S.C. 666(b)(1)) is amended by 
     striking ``wages (as defined by the State for purposes of 
     this section)'' and inserting ``income''.
       (c) Conforming Amendment.--Section 466(c) (42 U.S.C. 
     666(c)) is repealed.

     SEC. 315. 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. 316. 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

[[Page H8860]]

     approved under this part and programs funded under part A, 
     and for the other purposes specified in this section, the 
     Secretary shall, not later than October 1, 1997, establish 
     and maintain in the Federal Parent Locator Service an 
     automated directory to be known as the National Directory of 
     New Hires, which shall contain the information supplied 
     pursuant to section 453A(g)(2).
       ``(2) Entry of data.--Information shall be entered into the 
     data base maintained by the National Directory of New Hires 
     within 2 business days of receipt pursuant to section 
     453A(g)(2).
       ``(3) Administration of federal tax laws.--The Secretary of 
     the Treasury shall have access to the information in the 
     National Directory of New Hires for purposes of administering 
     section 32 of the Internal Revenue Code of 1986, or the 
     advance payment of the earned income tax credit under section 
     3507 of such Code, and verifying a claim with respect to 
     employment in a tax return.
       ``(4) List of multistate employers.--The Secretary shall 
     maintain within the National Directory of New Hires a list of 
     multistate employers that report information regarding newly 
     hired employees pursuant to section 453A(b)(1)(B), and the 
     State which each such employer has designated to receive such 
     information.
       ``(j) Information Comparisons and Other Disclosures.--
       ``(1) Verification by social security administration.--
       ``(A) In general.--The Secretary shall transmit information 
     on individuals and employers maintained under this section to 
     the Social Security Administration to the extent necessary 
     for verification in accordance with subparagraph (B).
       ``(B) Verification by ssa.--The Social Security 
     Administration shall verify the accuracy of, correct, or 
     supply to the extent possible, and report to the Secretary, 
     the following information supplied by the Secretary pursuant 
     to subparagraph (A):
       ``(i) The name, social security number, and birth date of 
     each such individual.
       ``(ii) The employer identification number of each such 
     employer.
       ``(2) Information comparisons.--For the purpose of locating 
     individuals in a paternity establishment case or a case 
     involving the establishment, modification, or enforcement of 
     a support order, the Secretary shall--
       ``(A) compare information in the National Directory of New 
     Hires against information in the support case abstracts in 
     the Federal Case Registry of Child Support Orders not less 
     often than every 2 business days; and
       ``(B) within 2 business days after such a comparison 
     reveals a match with respect to an individual, report the 
     information to the State agency responsible for the case.
       ``(3) Information comparisons and disclosures of 
     information in all registries for title iv program 
     purposes.--To the extent and with the frequency that the 
     Secretary determines to be effective in assisting States to 
     carry out their responsibilities under programs operated 
     under this part and programs funded under part A, the 
     Secretary shall--
       ``(A) compare the information in each component of the 
     Federal Parent Locator Service maintained under this section 
     against the information in each other such component (other 
     than the comparison required by paragraph (2)), and report 
     instances in which such a comparison reveals a match with 
     respect to an individual to State agencies operating such 
     programs; and
       ``(B) disclose information in such registries to such State 
     agencies.
       ``(4) Provision of new hire information to the social 
     security administration.--The National Directory of New Hires 
     shall provide the Commissioner of Social Security with all 
     information in the National Directory.
       ``(5) Research.--The Secretary may provide access to 
     information reported by employers pursuant to section 453A(b) 
     for research purposes found by the Secretary to be likely to 
     contribute to achieving the purposes of part A or this part, 
     but without personal identifiers.
       ``(k) Fees.--
       ``(1) For ssa verification.--The Secretary shall reimburse 
     the Commissioner of Social Security, at a rate negotiated 
     between the Secretary and the Commissioner, for the costs 
     incurred by the Commissioner in performing the verification 
     services described in subsection (j).
       ``(2) For information from state directories of new 
     hires.--The Secretary shall reimburse costs incurred by State 
     directories of new hires in furnishing information as 
     required by subsection (j)(3), at rates which the Secretary 
     determines to be reasonable (which rates shall not include 
     payment for the costs of obtaining, compiling, or maintaining 
     such information).
       ``(3) For information furnished to state and federal 
     agencies.--A State or Federal agency that receives 
     information from the Secretary pursuant to this section shall 
     reimburse the Secretary for costs incurred by the Secretary 
     in furnishing the information, at rates which the Secretary 
     determines to be reasonable (which rates shall include 
     payment for the costs of obtaining, verifying, maintaining, 
     and comparing the information).
       ``(l) Restriction on Disclosure and Use.--Information in 
     the Federal Parent Locator Service, and information resulting 
     from comparisons using such information, shall not be used or 
     disclosed except as expressly provided in this section, 
     subject to section 6103 of the Internal Revenue Code of 1986.
       ``(m) Information Integrity and Security.--The Secretary 
     shall establish and implement safeguards with respect to the 
     entities established under this section designed to--
       ``(1) ensure the accuracy and completeness of information 
     in the Federal Parent Locator Service; and
       ``(2) restrict access to confidential information in the 
     Federal Parent Locator Service to authorized persons, and 
     restrict use of such information to authorized purposes.
       ``(n) Federal Government Reporting.--Each department, 
     agency, and instrumentality of the United States shall on a 
     quarterly basis report to the Federal Parent Locator Service 
     the name and social security number of each employee and the 
     wages paid to the employee during the previous quarter, 
     except that such a report shall not be filed with respect to 
     an employee of a department, agency, or instrumentality 
     performing intelligence or counterintelligence functions, if 
     the head of such department, agency, or instrumentality has 
     determined that filing such a report could endanger the 
     safety of the employee or compromise an ongoing investigation 
     or intelligence mission.''.
       (g) Conforming Amendments.--
       (1) To part d of title iv of the social security act.--
       (A) Section 454(8)(B) (42 U.S.C. 654(8)(B)) is amended to 
     read as follows:
       ``(B) the Federal Parent Locator Service established under 
     section 453;''.
       (B) Section 454(13) (42 U.S.C.654(13)) is amended by 
     inserting ``and provide that information requests by parents 
     who are residents of other States be treated with the same 
     priority as requests by parents who are residents of the 
     State submitting the plan'' before the semicolon.
       (2) To federal unemployment tax act.--Section 3304(a)(16) 
     of the Internal Revenue Code of 1986 is amended--
       (A) by striking ``Secretary of Health, Education, and 
     Welfare'' each place such term appears and inserting 
     ``Secretary of Health and Human Services'';
       (B) in subparagraph (B), by striking ``such information'' 
     and all that follows and inserting ``information furnished 
     under subparagraph (A) or (B) is used only for the purposes 
     authorized under such subparagraph;'';
       (C) by striking ``and'' at the end of subparagraph (A);
       (D) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (E) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) wage and unemployment compensation information 
     contained in the records of such agency shall be furnished to 
     the Secretary of Health and Human Services (in accordance 
     with regulations promulgated by such Secretary) as necessary 
     for the purposes of the National Directory of New Hires 
     established under section 453(i) of the Social Security Act, 
     and''.
       (3) To state grant program under title iii of the social 
     security act.--Subsection (h) of section 303 (42 U.S.C. 503) 
     is amended to read as follows:
       ``(h)(1) The State agency charged with the administration 
     of the State law shall, on a reimbursable basis--
       ``(A) disclose quarterly, to the Secretary of Health and 
     Human Services, wage and claim information, as required 
     pursuant to section 453(i)(1), contained in the records of 
     such agency;
       ``(B) ensure that information provided pursuant to 
     subparagraph (A) meets such standards relating to correctness 
     and verification as the Secretary of Health and Human 
     Services, with the concurrence of the Secretary of Labor, may 
     find necessary; and
       ``(C) establish such safeguards as the Secretary of Labor 
     determines are necessary to insure that information disclosed 
     under subparagraph (A) is used only for purposes of section 
     453(i)(1) in carrying out the child support enforcement 
     program under title IV.
       ``(2) Whenever the Secretary of Labor, after reasonable 
     notice and opportunity for hearing to the State agency 
     charged with the administration of the State law, finds that 
     there is a failure to comply substantially with the 
     requirements of paragraph (1), the Secretary of Labor shall 
     notify such State agency that further payments will not be 
     made to the State until the Secretary of Labor is satisfied 
     that there is no longer any such failure. Until the Secretary 
     of Labor is so satisfied, the Secretary shall make no future 
     certification to the Secretary of the Treasury with respect 
     to the State.
       ``(3) For purposes of this subsection--
       ``(A) the term `wage information' means information 
     regarding wages paid to an individual, the social security 
     account number of such individual, and the name, address, 
     State, and the Federal employer identification number of the 
     employer paying such wages to such individual; and
       ``(B) the term `claim information' means information 
     regarding whether an individual is receiving, has received, 
     or has made application for, unemployment compensation, the 
     amount of any such compensation being received (or to be 
     received by such individual), and the individual's current 
     (or most recent) home address.''.
       (4) Disclosure of certain information to agents of child 
     support enforcement agencies.--
       (A) In general.--Paragraph (6) of section 6103(l) of the 
     Internal Revenue Code of 1986 (relating to disclosure of 
     return information to Federal, State, and local child support 
     enforcement agencies) is amended by redesignating 
     subparagraph (B) as subparagraph (C)

[[Page H8861]]

     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 subtitle. 
     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. 317. 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 
     315 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.''.
         Subtitle C--Streamlining and Uniformity of Procedures

     SEC. 321. 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.--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.''.

     SEC. 322. 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. 323. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.

       Section 466(a) (42 U.S.C. 666(a)), as amended by sections 
     315 and 317 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. 324. 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) (as 
     amended by section 346(a) of this Act) 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;

[[Page H8862]]

       ``(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. 325. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

       (a) State Law Requirements.--Section 466 (42 U.S.C. 666), 
     as amended by section 314 of this Act, is amended--
       (1) in subsection (a)(2), by striking the first sentence 
     and inserting the following: ``Expedited administrative and 
     judicial procedures (including the procedures specified in 
     subsection (c)) for establishing paternity and for 
     establishing, modifying, and enforcing support 
     obligations.''; and
       (2) by inserting after subsection (b) the following new 
     subsection:
       ``(c) Expedited Procedures.--The procedures specified in 
     this subsection are the following:
       ``(1) Administrative action by state agency.--Procedures 
     which give the State agency the authority to take the 
     following actions relating to establishment of paternity or 
     to establishment, modification, or enforcement of support 
     orders, without the necessity of obtaining an order from any 
     other judicial or administrative tribunal, and to recognize 
     and enforce the authority of State agencies of other States 
     to take the following actions:
       ``(A) Genetic testing.--To order genetic testing for the 
     purpose of paternity establishment as provided in section 
     466(a)(5).
       ``(B) Financial or other information.--To subpoena any 
     financial or other information needed to establish, modify, 
     or enforce a support order, and to impose penalties for 
     failure to respond to such a subpoena.
       ``(C) Response to state agency request.--To require all 
     entities in the State (including for-profit, nonprofit, and 
     governmental employers) to provide promptly, in response to a 
     request by the State agency of that or any other State 
     administering a program under this part, information on the 
     employment, compensation, and benefits of any individual 
     employed by such entity as an employee or contractor, and to 
     sanction failure to respond to any such request.
       ``(D) Access to information contained in certain records.--
     To obtain access, subject to safeguards on privacy and 
     information security, and subject to the nonliability of 
     entities that afford such access under this subparagraph, to 
     information contained in the following records (including 
     automated access, in the case of records maintained in 
     automated data bases):
       ``(i) Records of other State and local government agencies, 
     including--

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

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

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

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

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

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

     Such procedures shall be subject to due process safeguards, 
     including (as appropriate) requirements for notice, 
     opportunity to contest the action, and opportunity for an 
     appeal on the record to an independent administrative or 
     judicial tribunal.
       ``(2) Substantive and procedural rules.--The expedited 
     procedures required under subsection (a)(2) shall include the 
     following rules and authority, applicable with respect to all 
     proceedings to establish paternity or to establish, modify, 
     or enforce support orders:
       ``(A) Locator information; presumptions concerning 
     notice.--Procedures under which--
       ``(i) each party to any paternity or child support 
     proceeding is required (subject to privacy safeguards) to 
     file with the tribunal and the State case registry upon entry 
     of an order, and to update as appropriate, information on 
     location and identity of the party, including social security 
     number, residential and mailing addresses, telephone number, 
     driver's license number, and name, address, and telephone 
     number of employer; and
       ``(ii) in any subsequent child support enforcement action 
     between the parties, upon sufficient showing that diligent 
     effort has been made to ascertain the location of such a 
     party, the tribunal may deem State due process requirements 
     for notice and service of process to be met with respect to 
     the party, upon delivery of written notice to the most recent 
     residential or employer address filed with the tribunal 
     pursuant to clause (i).
       ``(B) Statewide jurisdiction.--Procedures under which--
       ``(i) the State agency and any administrative or judicial 
     tribunal with authority to hear child support and paternity 
     cases exerts statewide jurisdiction over the parties; and
       ``(ii) in a State in which orders are issued by courts or 
     administrative tribunals, a case may be transferred between 
     local jurisdictions in the State without need for any 
     additional filing by the petitioner, or service of process 
     upon the respondent, to retain jurisdiction over the parties.
       ``(3) Coordination with erisa.--Notwithstanding subsection 
     (d) of section 514 of the Employee Retirement Income Security 
     Act of 1974 (relating to effect on other laws), nothing in 
     this subsection shall be construed to alter, amend, modify, 
     invalidate, impair, or supersede subsections (a), (b), and 
     (c) of such section 514 as it applies with respect to any 
     procedure referred to in paragraph (1) and any expedited 
     procedure referred to in paragraph (2), except to the extent 
     that such procedure would be consistent with the requirements 
     of section 206(d)(3) of such Act (relating to qualified 
     domestic relations orders) or the requirements of section 
     609(a) of such Act (relating to qualified medical child 
     support orders) if the reference in such section 206(d)(3) to 
     a domestic relations order and the reference in such section 
     609(a) to a medical child support order were a reference to a 
     support order referred to in paragraphs (1) and (2) relating 
     to the same matters, respectively.''.
       (b) Automation of State Agency Functions.--Section 454A, as 
     added by section 344(a)(2) and as amended by sections 311 and 
     312(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).''.
                  Subtitle D--Paternity Establishment

     SEC. 331. 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

[[Page H8863]]

     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.
       ``(iii) Paternity establishment services.--

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

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

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

     Nothing in this clause shall preclude a State agency from 
     obtaining an admission of paternity from the father for 
     submission in a judicial or administrative proceeding, or 
     prohibit the issuance of an order in a judicial or 
     administrative proceeding which bases a legal finding of 
     paternity on an admission of paternity by the father and any 
     other additional showing required by State law.
       ``(ii) Legal finding of paternity.--Procedures under which 
     a signed voluntary acknowledgment of paternity is considered 
     a legal finding of paternity, subject to the right of any 
     signatory to rescind the acknowledgment within the earlier 
     of--

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

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

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

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

     SEC. 332. 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. 333. COOPERATION BY APPLICANTS FOR AND RECIPIENTS OF 
                   PART A ASSISTANCE.

       Section 454 (42 U.S.C. 654), as amended by sections 301(b), 
     303(a), 312(a), and 313(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 of this title 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, 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, or the State program under title 
     XIX; and
       ``(E) shall promptly notify the individual, the State 
     agency administering the State program funded under part A, 
     and the State agency administering the State program

[[Page H8864]]

     under title XIX, of each such determination, and if 
     noncooperation is determined, the basis therefor.''.
             Subtitle E--Program Administration and Funding

     SEC. 341. 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 March 1, 1997, 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)(3)'';
       (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; and
       (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, 1999, 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 2000.
       (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. 342. 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. 343. 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 301(b), 303(a), 312(a), 313(a), and 
     333 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. 344. 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.

[[Page H8865]]

       ``(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 303(a)(1) of this Act, is 
     amended to read as follows:
       ``(24) provide that the State will have in effect an 
     automated data processing and information retrieval system--
       ``(A) by October 1, 1997, which meets all requirements of 
     this part which were enacted on or before the date of 
     enactment of the Family Support Act of 1988, and
       ``(B) by October 1, 2000, which meets all requirements of 
     this part enacted on or before the date of the enactment of 
     the Personal Responsibility and Work Opportunity Act of 1996, 
     except that such deadline shall be extended by 1 day for each 
     day (if any) by which the Secretary fails to meet the 
     deadline imposed by section 344(a)(3) of the Personal 
     Responsibility and Work Opportunity Reconciliation 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.
       ``(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. 345. TECHNICAL ASSISTANCE.

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

     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 316 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. 346. 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:

[[Page H8866]]

       ``(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.
      Subtitle F--Establishment and Modification of Support Orders

     SEC. 351. 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.--
       ``(A) 3-year cycle.--
       ``(i) In general.--Procedures under which every 3 years (or 
     such shorter cycle as the State may determine), upon the 
     request of either parent, or, if there is an assignment under 
     part A, upon the request of the State agency under the State 
     plan or of either parent, the State shall with respect to a 
     support order being enforced under this part, taking into 
     account the best interests of the child involved--

       ``(I) review and, if appropriate, adjust 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;
       ``(II) apply a cost-of-living adjustment to the order in 
     accordance with a formula developed by the State; or
       ``(III) 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 any 
     threshold that may be established by the State.

       ``(ii) Opportunity to request review of adjustment.--If the 
     State elects to conduct the review under subclause (II) or 
     (III) of clause (i), procedures which 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 in 3-
     year cycle review.--Procedures which provide that any 
     adjustment under clause (i) shall be made without a 
     requirement for proof or showing of a change in 
     circumstances.
       ``(B) Proof of substantial change in circumstances 
     necessary in request for review outside 3-year cycle.--
     Procedures under which, in the case of a request for a 
     review, and if appropriate, an adjustment outside the 3-year 
     cycle (or such shorter cycle as the State may determine) 
     under clause (i), the State shall review and, if the 
     requesting party demonstrates a substantial change in 
     circumstances, adjust the order in accordance with the 
     guidelines established pursuant to section 467(a).
       ``(C) Notice of right to review.--Procedures which require 
     the State to provide notice not less than once every 3 years 
     to the parents subject to the order informing the parents 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. 352. 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. 353. 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).''.
               Subtitle G--Enforcement of Support Orders

     SEC. 361. 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. 362. 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:

[[Page H8867]]

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

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

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

       ``(iii) worker's compensation benefits paid under Federal 
     or State law but
       ``(B) do not include any payment--
       ``(i) by way of reimbursement or otherwise, to defray 
     expenses incurred by the individual in carrying out duties 
     associated with the employment of the individual; or
       ``(ii) as allowances for members of the uniformed services 
     payable pursuant to chapter 7 of title 37, United States 
     Code, as prescribed by the Secretaries concerned (defined by 
     section 101(5) of such title) as necessary for the efficient 
     performance of duty.
       ``(2) Certain amounts excluded.--In determining the amount 
     of any moneys due from, or payable by, the United States to 
     any individual, there shall be excluded amounts which--
       ``(A) are owed by the individual to the United States;
       ``(B) are required by law to be, and are, deducted from the 
     remuneration or other payment involved, including Federal 
     employment taxes, and fines and forfeitures ordered by court-
     martial;
       ``(C) are properly withheld for Federal, State, or local 
     income tax purposes, if the withholding of the amounts is 
     authorized or required by law and if amounts withheld are not 
     greater than would be the case if the individual claimed all 
     dependents to which he was entitled (the withholding of 
     additional amounts pursuant to section 3402(i) of the 
     Internal Revenue Code of 1986 may be permitted only when the 
     individual presents evidence of a tax obligation which 
     supports the additional withholding);
       ``(D) are deducted as health insurance premiums;
       ``(E) are deducted as normal retirement contributions (not 
     including amounts deducted for supplementary coverage); or
       ``(F) are deducted as normal life insurance premiums from 
     salary or other remuneration for employment (not including 
     amounts deducted for supplementary coverage).
       ``(i) Definitions.--For purposes of this section--
       ``(1) United states.--The term `United States' includes any 
     department, agency, or instrumentality of the legislative, 
     judicial, or executive branch of the Federal Government, the 
     United States Postal Service, the Postal Rate Commission, any 
     Federal corporation created by an Act of Congress that is 
     wholly owned by the Federal Government, and the governments 
     of the territories and possessions of the United States.
       ``(2) Child support.--The term `child support', when used 
     in reference to the legal obligations of an individual to 
     provide such support, means amounts required to be paid under 
     a judgment, decree, or order, whether temporary, final, or 
     subject to modification, issued by a court or an 
     administrative agency of competent jurisdiction, for the 
     support and maintenance of a child, including a child who has 
     attained the age of majority under the law of the issuing 
     State, or a child and the parent with whom the child is 
     living, which provides for monetary support, health care, 
     arrearages or reimbursement, and which may include other 
     related costs and fees, interest and penalties, income 
     withholding, attorney's fees, and other relief.
       ``(3) Alimony.--
       ``(A) In general.--The term `alimony', when used in 
     reference to the legal obligations of an individual to 
     provide the same, means periodic payments of funds for the

[[Page H8868]]

     support and maintenance of the spouse (or former spouse) of 
     the individual, and (subject to and in accordance with State 
     law) includes separate maintenance, alimony pendente lite, 
     maintenance, and spousal support, and includes attorney's 
     fees, interest, and court costs when and to the extent that 
     the same are expressly made recoverable as such pursuant to a 
     decree, order, or judgment issued in accordance with 
     applicable State law by a court of competent jurisdiction.
       ``(B) Exceptions.--Such term does not include--
       ``(i) any child support; or
       ``(ii) any payment or transfer of property or its value by 
     an individual to the spouse or a former spouse of the 
     individual in compliance with any community property 
     settlement, equitable distribution of property, or other 
     division of property between spouses or former spouses.
       ``(4) Private person.--The term `private person' means a 
     person who does not have sovereign or other special immunity 
     or privilege which causes the person not to be subject to 
     legal process.
       ``(5) Legal process.--The term `legal process' means any 
     writ, order, summons, or other similar process in the nature 
     of garnishment--
       ``(A) which is issued by--
       ``(i) a court or an administrative agency of competent 
     jurisdiction in any State, territory, or possession of the 
     United States;
       ``(ii) a court or an administrative agency of competent 
     jurisdiction in any foreign country with which the United 
     States has entered into an agreement which requires the 
     United States to honor the process; or
       ``(iii) an authorized official pursuant to an order of such 
     a court or an administrative agency of competent jurisdiction 
     or pursuant to State or local law; and
       ``(B) which is directed to, and the purpose of which is to 
     compel, a governmental entity which holds moneys which are 
     otherwise payable to an individual to make a payment from the 
     moneys to another party in order to satisfy a legal 
     obligation of the individual to provide child support or make 
     alimony payments.''.
       (b) Conforming Amendments.--
       (1) To part d of title iv.--Sections 461 and 462 (42 U.S.C. 
     661 and 662) are repealed.
       (2) To title 5, united states code.--Section 5520a of title 
     5, United States Code, is amended, in subsections (h)(2) and 
     (i), by striking ``sections 459, 461, and 462 of the Social 
     Security Act (42 U.S.C. 659, 661, and 662)'' and inserting 
     ``section 459 of the Social Security Act (42 U.S.C. 659)''.
       (c) Military Retired and Retainer Pay.--
       (1) Definition of court.--Section 1408(a)(1) of title 10, 
     United States Code, is amended--
       (A) by striking ``and'' at the end of subparagraph (B);
       (B) by striking the period at the end of subparagraph (C) 
     and inserting ``; and''; and
       (C) by adding after subparagraph (C) the following new 
     subparagraph:
       ``(D) any administrative or judicial tribunal of a State 
     competent to enter orders for support or maintenance 
     (including a State agency administering a program under a 
     State plan approved under part D of title IV of the Social 
     Security Act), and, for purposes of this subparagraph, the 
     term `State' includes the District of Columbia, the 
     Commonwealth of Puerto Rico, the Virgin Islands, Guam, and 
     American Samoa.''.
       (2) Definition of court order.--Section 1408(a)(2) of such 
     title is amended--
       (A) by inserting ``or a support order, as defined in 
     section 453(p) of the Social Security Act (42 U.S.C. 
     653(p)),'' before ``which--'';
       (B) in subparagraph (B)(i), by striking ``(as defined in 
     section 462(b) of the Social Security Act (42 U.S.C. 
     662(b)))'' and inserting ``(as defined in section 459(i)(2) 
     of the Social Security Act (42 U.S.C. 659(i)(2)))''; and
       (C) in subparagraph (B)(ii), by striking ``(as defined in 
     section 462(c) of the Social Security Act (42 U.S.C. 
     662(c)))'' and inserting ``(as defined in section 459(i)(3) 
     of the Social Security Act (42 U.S.C. 659(i)(3)))''.
       (3) Public payee.--Section 1408(d) of such title is 
     amended--
       (A) in the heading, by inserting ``(or for Benefit of)'' 
     before ``Spouse or''; and
       (B) in paragraph (1), in the 1st sentence, by inserting 
     ``(or for the benefit of such spouse or former spouse to a 
     State disbursement unit established pursuant to section 454B 
     of the Social Security Act or other public payee designated 
     by a State, in accordance with part D of title IV of the 
     Social Security Act, as directed by court order, or as 
     otherwise directed in accordance with such part D)'' before 
     ``in an amount sufficient''.
       (4) Relationship to part d of title iv.--Section 1408 of 
     such title is amended by adding at the end the following new 
     subsection:
       ``(j) Relationship to Other Laws.--In any case involving an 
     order providing for payment of child support (as defined in 
     section 459(i)(2) of the Social Security Act) by a member who 
     has never been married to the other parent of the child, the 
     provisions of this section shall not apply, and the case 
     shall be subject to the provisions of section 459 of such 
     Act.''.
       (d) Effective Date.--The amendments made by this section 
     shall become effective 6 months after the date of the 
     enactment of this Act.

     SEC. 363. 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 362(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)(3) 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.''.

[[Page H8869]]

       (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. 364. VOIDING OF FRAUDULENT TRANSFERS.

       Section 466 (42 U.S.C. 666), as amended by section 321 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. 365. 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 315, 317, and 323 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. 366. DEFINITION OF SUPPORT ORDER.

       Section 453 (42 U.S.C. 653) as amended by sections 316 and 
     345(b) of this Act, is amended by adding at the end the 
     following new subsection:
       ``(p) Support Order Defined.--As used in this part, the 
     term `support order' means a judgment, decree, or order, 
     whether temporary, final, or subject to modification, issued 
     by a court or an administrative agency of competent 
     jurisdiction, for the support and maintenance of a child, 
     including a child who has attained the age of majority under 
     the law of the issuing State, or a child and the parent with 
     whom the child is living, which provides for monetary 
     support, health care, arrearages, or reimbursement, and which 
     may include related costs and fees, interest and penalties, 
     income withholding, attorneys' fees, and other relief.''.

     SEC. 367. 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. 368. 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. 369. STATE LAW AUTHORIZING SUSPENSION OF LICENSES.

       Section 466(a) (42 U.S.C. 666(a)), as amended by sections 
     315, 317, 323, and 365 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. 370. 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 345 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 301(b), 303(a), 312(b), 313(a), 
     333, and 343(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. 371. INTERNATIONAL SUPPORT ENFORCEMENT.

       (a) Authority for International Agreements.--Part D of 
     title IV, as amended by section 362(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--

[[Page H8870]]

       ``(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 301(b), 303(a), 312(b), 313(a), 333, 
     343(b), and 370(a)(2) of this Act, is amended--
       (1) by striking ``and'' at the end of paragraph (30);
       (2) by striking the period at the end of paragraph (31) and 
     inserting ``; and''; and
       (3) by adding after paragraph (31) the following new 
     paragraph:
       ``(32)(A) provide that any request for services under this 
     part by a foreign reciprocating country or a foreign country 
     with which the State has an arrangement described in section 
     459A(d)(2) shall be treated as a request by a State;
       ``(B) provide, at State option, notwithstanding paragraph 
     (4) or any other provision of this part, for services under 
     the plan for enforcement of a spousal support order not 
     described in paragraph (4)(B) entered by such a country (or 
     subdivision); and
       ``(C) provide that no applications will be required from, 
     and no costs will be assessed for such services against, the 
     foreign reciprocating country or foreign obligee (but costs 
     may at State option be assessed against the obligor).''.

     SEC. 372. FINANCIAL INSTITUTION DATA MATCHES.

       Section 466(a) (42 U.S.C. 666(a)), as amended by sections 
     315, 317, 323, 365, and 369 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. 373. 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 
     315, 317, 323, 365, 369, and 372 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. 374. 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
       (4) in paragraph (5), by striking ``section 402(a)(26)'' 
     and inserting ``section 408(a)(3)''.
       (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. 375. CHILD SUPPORT ENFORCEMENT FOR INDIAN TRIBES.

       (a) Child Support Enforcement Agreements.--Section 454 (42 
     U.S.C. 654), as amended by sections 301(b), 303(a), 312(b), 
     313(a), 333, 343(b), 370(a)(2), and 371(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(34).''.
       (c) Cooperative Enforcement Agreements.--Paragraph (7) of 
     section 454 (42

[[Page H8871]]

     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.''.
                      Subtitle H--Medical Support

     SEC. 381. 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. 382. ENFORCEMENT OF ORDERS FOR HEALTH CARE COVERAGE.

       Section 466(a) (42 U.S.C. 666(a)), as amended by sections 
     315, 317, 323, 365, 369, 372, and 373 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.''.
     Subtitle I--Enhancing Responsibility and Opportunity for Non-
                          Residential Parents

     SEC. 391. GRANTS TO STATES FOR ACCESS AND VISITATION 
                   PROGRAMS.

       Part D of title IV (42 U.S.C. 651-669), as amended by 
     section 353 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 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 1997 or 1998; or
       ``(B) $100,000 for any succeeding fiscal year.
       ``(d) No Supplantation of State Expenditures for Similar 
     Activities.--A State to which a grant is made under this 
     section may not use the grant to supplant expenditures by the 
     State for activities specified in subsection (a), but shall 
     use the grant to supplement such expenditures at a level at 
     least equal to the level of such expenditures for fiscal year 
     1995.
       ``(e) State Administration.--Each State to which a grant is 
     made under this section--
       ``(1) may administer State programs funded with the grant, 
     directly or through grants to or contracts with courts, local 
     public agencies, or nonprofit private entities;
       ``(2) shall not be required to operate such programs on a 
     statewide basis; and
       ``(3) shall monitor, evaluate, and report on such programs 
     in accordance with regulations prescribed by the 
     Secretary.''.
         Subtitle J--Effective Dates and Conforming Amendments

     SEC. 395. 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 title requiring the enactment or 
     amendment of State laws under section 466 of the Social 
     Security Act, or revision of State plans under section 454 of 
     such Act, shall be effective with respect to periods 
     beginning on and after October 1, 1996; and
       (2) all other provisions of this title shall become 
     effective upon the date of the enactment of this Act.
       (b) Grace Period for State Law Changes.--The provisions of 
     this title shall become effective with respect to a State on 
     the later of--
       (1) the date specified in this title, or
       (2) the effective date of laws enacted by the legislature 
     of such State implementing such provisions,
     but in no event later than the 1st day of the 1st calendar 
     quarter beginning after the close of the 1st regular session 
     of the State legislature that begins after the date of the 
     enactment of this Act. For purposes of the previous sentence, 
     in the case of a State that has a 2-year legislative session, 
     each year of such session shall be deemed to be a separate 
     regular session of the State legislature.
       (c) Grace Period for State Constitutional Amendment.--A 
     State shall not be found out of compliance with any 
     requirement enacted by this title if the State is unable to 
     so comply without amending the State constitution until the 
     earlier of--
       (1) 1 year after the effective date of the necessary State 
     constitutional amendment; or
       (2) 5 years after the date of the enactment of this 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)(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)).
      TITLE IV--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

     SEC. 400. 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

[[Page H8872]]

     in this title, 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.
              Subtitle A--Eligibility for Federal Benefits

     SEC. 401. 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 431) 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) Medical assistance under title XIX of the Social 
     Security Act (or any successor program to such title) for 
     care and services that are necessary for the treatment of an 
     emergency medical condition (as defined in section 1903(v)(3) 
     of such Act) of the alien involved and are not related to an 
     organ transplant procedure, if the alien involved otherwise 
     meets the eligibility requirements for medical assistance 
     under the State plan approved under such title (other than 
     the requirement of the receipt of aid or assistance under 
     title IV of such Act, supplemental security income benefits 
     under title XVI of such Act, or a State supplementary 
     payment).
       (B) Short-term, non-cash, in-kind emergency disaster 
     relief.
       (C) Public health assistance (not including any assistance 
     under title XIX of the Social Security Act) for immunizations 
     with respect to immunizable diseases and for testing and 
     treatment of symptoms of communicable diseases whether or not 
     such symptoms are caused by a communicable disease.
       (D) Programs, services, or assistance (such as soup 
     kitchens, crisis counseling and intervention, and short-term 
     shelter) specified by the Attorney General, in the Attorney 
     General's sole and unreviewable discretion after consultation 
     with appropriate Federal agencies and departments, which (i) 
     deliver in-kind services at the community level, including 
     through public or private nonprofit agencies; (ii) do not 
     condition the provision of assistance, the amount of 
     assistance provided, or the cost of assistance provided on 
     the individual recipient's income or resources; and (iii) are 
     necessary for the protection of life or safety.
       (E) Programs for housing or community development 
     assistance or financial assistance administered by the 
     Secretary of Housing and Urban Development, any program under 
     title V of the Housing Act of 1949, or any assistance under 
     section 306C of the Consolidated Farm and Rural Development 
     Act, to the extent that the alien is receiving such a benefit 
     on the date of the enactment of this Act.
       (2) Subsection (a) shall not apply to any benefit payable 
     under title II of the Social Security Act to an alien who is 
     lawfully present in the United States as determined by the 
     Attorney General, to any benefit if nonpayment of such 
     benefit would contravene an international agreement described 
     in section 233 of the Social Security Act, to any benefit if 
     nonpayment would be contrary to section 202(t) of the Social 
     Security Act, or to any benefit payable under title II of the 
     Social Security Act to which entitlement is based on an 
     application filed in or before the month in which this Act 
     becomes law.
       (c) Federal Public Benefit Defined.--
       (1) Except as provided in paragraph (2), for purposes of 
     this title 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. 402. 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 431) 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) in the case of any such qualifying 
     quarter creditable for any period beginning after December 
     31, 1996, did not receive any Federal means-tested public 
     benefit (as provided under section 403) during any such 
     period.
       (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 March 31, 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 title, 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 403 and paragraph (2), a 
     State is authorized to determine the eligibility of an alien 
     who is a qualified alien (as defined in section 431) 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

[[Page H8873]]

     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 435, and (II) in the case of any such qualifying 
     quarter creditable for any period beginning after December 
     31, 1996, did not receive any Federal means-tested public 
     benefit (as provided under section 403) during any such 
     period.
       (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 title, 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.--A State plan approved under title XIX of the 
     Social Security Act, other than medical assistance described 
     in section 401(b)(1)(A).

     SEC. 403. 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 subsections (b), (c), and (d), an 
     alien who is a qualified alien (as defined in section 431) 
     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 for a period of five years beginning on 
     the date of the alien's entry into the United States with a 
     status within the meaning of the term ``qualified alien''.
       (b) Exceptions.--The limitation under subsection (a) shall 
     not apply to the following aliens:
       (1) Exception for refugees and asylees.--
       (A) An alien who is admitted to the United States as a 
     refugee under section 207 of the Immigration and Nationality 
     Act.
       (B) An alien who is granted asylum under section 208 of 
     such Act.
       (C) An alien whose deportation is being withheld under 
     section 243(h) of such Act.
       (2) Veteran and active duty exception.--An alien who is 
     lawfully residing in any State and is--
       (A) a veteran (as defined in section 101 of title 38, 
     United States Code) with a discharge characterized as an 
     honorable discharge and not on account of alienage,
       (B) on active duty (other than active duty for training) in 
     the Armed Forces of the United States, or
       (C) the spouse or unmarried dependent child of an 
     individual described in subparagraph (A) or (B).
       (c) Application of Term Federal Means-tested Public 
     Benefit.--
       (1) The limitation under subsection (a) shall not apply to 
     assistance or benefits under paragraph (2).
       (2) Assistance and benefits under this paragraph are as 
     follows:
       (A) Medical assistance described in section 401(b)(1)(A).
       (B) Short-term, non-cash, in-kind emergency disaster 
     relief.
       (C) Assistance or benefits under the National School Lunch 
     Act.
       (D) Assistance or benefits under the Child Nutrition Act of 
     1966.
       (E) Public health assistance (not including any assistance 
     under title XIX of the Social Security Act) for immunizations 
     with respect to immunizable diseases and for testing and 
     treatment of symptoms of communicable diseases whether or not 
     such symptoms are caused by a communicable disease.
       (F) Payments for foster care and adoption assistance under 
     parts B and E of title IV of the Social Security Act for a 
     parent or 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 is a qualified alien (as 
     defined in section 431).
       (G) 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.
       (H) 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.
       (I) Means-tested programs under the Elementary and 
     Secondary Education Act of 1965.
       (J) Benefits under the Head Start Act.
       (K) Benefits under the Job Training Partnership Act.
       (d) Special Rule for Refugee and Entrant Assistance for 
     Cuban and Haitian Entrants.--The limitation under subsection 
     (a) shall not apply to refugee and entrant assistance 
     activities, authorized by title IV of the Immigration and 
     Nationality Act and section 501 of the Refugee Education 
     Assistance Act of 1980, for Cuban and Haitian entrants as 
     defined in section 501(e)(2) of the Refugee Education 
     Assistance Act of 1980.

     SEC. 404. NOTIFICATION AND INFORMATION REPORTING.

       (a) Notification.--Each Federal agency that administers a 
     program to which section 401, 402, or 403 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 subtitle.
       (b) Information Reporting Under Title IV of the Social 
     Security Act.--Part A of title IV of the Social Security 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.''.
  Subtitle B--Eligibility for State and Local Public Benefits Programs

     SEC. 411. 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 431),
       (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:

[[Page H8874]]

       (1) Assistance for health care items and services that are 
     necessary for the treatment of an emergency medical condition 
     (as defined in section 1903(v)(3) of the Social Security Act) 
     of the alien involved and are not related to an organ 
     transplant procedure.
       (2) Short-term, non-cash, in-kind emergency disaster 
     relief.
       (3) Public health assistance for immunizations with respect 
     to immunizable diseases and for testing and treatment of 
     symptoms of communicable diseases whether or not such 
     symptoms are caused by a communicable 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 paragraphs (2) and 3, for 
     purposes of this subtitle 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.
       (3) Such term does not include any Federal public benefit 
     under section 4001(c).
       (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. 412. 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 of an alien who is a qualified alien (as defined in 
     section 431), a nonimmigrant under the Immigration and 
     Nationality Act, or an alien who is paroled into the United 
     States under section 212(d)(5) of such Act for less than one 
     year.
       (b) Exceptions.--Qualified aliens under this subsection 
     shall be eligible for any State public benefits.
       (1) Time-limited exception for refugees and asylees.--
       (A) An alien who is admitted to the United States as a 
     refugee under section 207 of the Immigration and Nationality 
     Act until 5 years after the date of an alien's entry into the 
     United States.
       (B) An alien who is granted asylum under section 208 of 
     such Act until 5 years after the date of such grant of 
     asylum.
       (C) An alien whose deportation is being withheld under 
     section 243(h) of such Act until 5 years after such 
     withholding.
       (2) Certain permanent resident aliens.--An alien who--
       (A) is lawfully admitted to the United States for permanent 
     residence under the Immigration and Nationality Act; and
       (B)(i) has worked 40 qualifying quarters of coverage as 
     defined under title II of the Social Security Act or can be 
     credited with such qualifying quarters as provided under 
     section 435, and (ii) in the case of any such qualifying 
     quarter creditable for any period beginning after December 
     31, 1996, did not receive any Federal means-tested public 
     benefit (as provided under section 403) during any such 
     period.
       (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.
      Subtitle C--Attribution of Income and Affidavits of Support

     SEC. 421. 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 provided under section 403), 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 423) on 
     behalf of such alien.
       (2) The income and resources of the spouse (if any) of the 
     person.
       (b) Duration of Attribution Period.--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 435, and (B) in the case of any such qualifying 
     quarter creditable for any period beginning after December 
     31, 1996, did not receive any Federal means-tested public 
     benefit (as provided under section 403) during any such 
     period.
       (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. 422. 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 412(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 423) 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) Assistance described in section 411(b)(1).
       (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) Public health assistance for immunizations with respect 
     to immunizable diseases and for testing and treatment of 
     symptoms of communicable diseases whether or not such 
     symptoms are caused by a communicable 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. 423. 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:

[[Page H8875]]

           ``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) Definitions.--For the purposes of this section--
       ``(1) Sponsor.--The term `sponsor' means an individual 
     who--
       ``(A) is a citizen or national of the United States or an 
     alien who is lawfully admitted to the United States for 
     permanent residence;
       ``(B) is 18 years of age or over;
       ``(C) is domiciled in any of the 50 States or the District 
     of Columbia; and
       ``(D) 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) Medical assistance described in section 401(b)(1)(A) or 
     assistance described in section 411(b)(1).
       (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) Public health assistance for immunizations (not 
     including any assistance under title XIX of the Social 
     Security Act) with respect to immunizable diseases and for 
     testing and treatment of symptoms of communicable diseases 
     whether or not such symptoms are caused by a communicable 
     disease.
       (6) Payments for foster care and adoption assistance under 
     parts B and E of title IV of the Social Security Act for a 
     parent or a child, but only if the foster or adoptive parent 
     (or parents) of such child is a qualified alien (as defined 
     in section 431).
       (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, and titles III, 
     VII, and VIII of the Public Health Service Act.
       (9) Benefits under the Head Start Act.
       (10) Means-tested programs under the Elementary and 
     Secondary Education Act of 1965.
       (11) Benefits under the Job Training Partnership Act.

                     Subtitle D--General Provisions

     SEC. 431. DEFINITIONS.

       (a) In General.--Except as otherwise provided in this 
     title, the terms used in this title have the same meaning 
     given such terms in section 101(a) of the Immigration and 
     Nationality Act.
       (b) Qualified Alien.--For purposes of this title, 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. 432. 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 401(c)), to which the 
     limitation under section 401 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. 433. STATUTORY CONSTRUCTION.

       (a) Limitation.--
       (1) Nothing in this title 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 title, eligibility relates 
     only to the general issue of eligibility or ineligibility on 
     the basis of alienage.

[[Page H8876]]

       (2) Nothing in this title 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 title 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 title or the 
     application of such provision to any person or circumstance 
     is held to be unconstitutional, the remainder of this title 
     and the application of the provisions of such to any person 
     or circumstance shall not be affected thereby.

     SEC. 434. 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. 435. QUALIFYING QUARTERS.

       For purposes of this title, 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, and
       (2) all of the qualifying quarters worked by a spouse of 
     such alien during their marriage and the alien remains 
     married to such spouse or such spouse is deceased.
     No such qualifying quarter of coverage that is creditable 
     under title II of the Social Security Act for any period 
     beginning after December 31, 1996, may be credited to an 
     alien under paragraph (1) or (2) if the parent or spouse (as 
     the case may be) of such alien received any Federal means-
     tested public benefit (as provided under section 403) during 
     the period for which such qualifying quarter of coverage is 
     so credited.
     Subtitle E--Conforming Amendments Relating to Assisted Housing

     SEC. 441. 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).

   Subtitle F--Earned Income Credit Denied to Unauthorized Employees

     SEC. 451. 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 credit) to be included on a return, and
       ``(G) an entry on a return claiming the credit under 
     section 32 with respect to net earnings from self-employment 
     described in section 32(c)(2)(A) to the extent the tax 
     imposed by section 1401 (relating to self-employment tax) on 
     such net earnings has not been paid.''.
       (d) Effective Date.--The amendments made by this section 
     shall apply with respect to returns the due date for which 
     (without regard to extensions) is more than 30 days after the 
     date of the enactment of this Act.
                       TITLE V--CHILD PROTECTION

     SEC. 501. AUTHORITY OF STATES TO MAKE FOSTER CARE MAINTENANCE 
                   PAYMENTS ON BEHALF OF CHILDREN IN ANY PRIVATE 
                   CHILD CARE INSTITUTION.

       Section 472(c)(2) of the Social Security Act (42 U.S.C. 
     672(c)(2)) is amended by striking ``nonprofit''.

     SEC. 502. EXTENSION OF ENHANCED MATCH FOR IMPLEMENTATION OF 
                   STATEWIDE AUTOMATED CHILD WELFARE INFORMATION 
                   SYSTEMS.

       Section 13713(b)(2) of the Omnibus Budget Reconciliation 
     Act of 1993 (42 U.S.C. 674 note; 107 Stat. 657) is amended by 
     striking ``1996'' and inserting ``1997''.

     SEC. 503. NATIONAL RANDOM SAMPLE STUDY OF CHILD WELFARE.

       Part B of title IV of the Social Security Act (42 U.S.C. 
     620-628a) is amended by adding at the end the following:

     ``SEC. 429A. NATIONAL RANDOM SAMPLE STUDY OF CHILD WELFARE.

       ``(a) In General.--The Secretary shall conduct a national 
     study based on random samples of children who are at risk of 
     child abuse or neglect, or are determined by States to have 
     been abused or neglected.
       ``(b) Requirements.--The study required by subsection (a) 
     shall--
       ``(1) have a longitudinal component; and
       ``(2) yield data reliable at the State level for as many 
     States as the Secretary determines is feasible.
       ``(c) Preferred Contents.--In conducting the study required 
     by subsection (a), the Secretary should--
       ``(1) carefully consider selecting the sample from cases of 
     confirmed abuse or neglect; and
       ``(2) follow each case for several years while obtaining 
     information on, among other things--
       ``(A) the type of abuse or neglect involved;
       ``(B) the frequency of contact with State or local 
     agencies;
       ``(C) whether the child involved has been separated from 
     the family, and, if so, under what circumstances;
       ``(D) the number, type, and characteristics of out-of-home 
     placements of the child; and
       ``(E) the average duration of each placement.
       ``(d) Reports.--
       ``(1) In general.--From time to time, the Secretary shall 
     prepare reports summarizing the results of the study required 
     by subsection (a).
       ``(2) Availability.--The Secretary shall make available to 
     the public any report prepared under paragraph (1), in 
     writing or in the form of an electronic data tape.
       ``(3) Authority to charge fee.--The Secretary may charge 
     and collect a fee for the furnishing of reports under 
     paragraph (2).
       ``(e) Appropriation.--Out of any money in the Treasury of 
     the United States not otherwise appropriated, there are 
     appropriated to the Secretary for each of fiscal years 1996 
     through 2002 $6,000,000 to carry out this section.''.

     SEC. 504. 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. 505. 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:
       ``(18) provides that the State shall consider giving 
     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.''.
                          TITLE VI--CHILD CARE

     SEC. 601. SHORT TITLE AND REFERENCES.

       (a) Short Title.--This title may be cited as the ``Child 
     Care and Development Block Grant Amendments of 1996''.
       (b) References.--Except as otherwise expressly provided, 
     whenever in this title 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

[[Page H8877]]

     Block Grant Act of 1990 (42 U.S.C. 9858 et seq.).

     SEC. 602. 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. 603. 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. 601-617) is amended by adding at the 
     end the following new section:

     ``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 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 
     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 403(n) (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.--For grants under this section, there 
     are appropriated--
       ``(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 less 
     than 1 percent, and not more 2 percent, of the aggregate 
     amount appropriated to carry out this section in each fiscal 
     year for payments to Indian tribes and tribal organizations.
       ``(b) Use of Funds.--
       ``(1) In general.--Amounts received by a State under this 
     section shall only be used to provide child care assistance. 
     Amounts received by a State under a grant under subsection 
     (a)(1) shall be available for use by the State without fiscal 
     year limitation.
       ``(2) Use for certain populations.--A State shall ensure 
     that not less than 70 percent of the total amount of funds 
     received by the State in a fiscal year under this section are 
     used to provide child care assistance to families who are 
     receiving assistance under a State program under this part, 
     families who are attempting through work activities to 
     transition off of such assistance program, and families who 
     are at risk of becoming dependent on such assistance program.
       ``(c) Application of Child Care and Development Block Grant 
     Act of 1990.--Notwithstanding any other provision of law, 
     amounts provided to a State under this section shall be 
     transferred to the lead agency under the Child Care and 
     Development Block Grant Act of 1990, integrated by the State 
     into the programs established by the State under such Act, 
     and be subject to requirements and limitations of such Act.
       ``(d) Definition.--As used in this section, the term 
     `State' means each of the 50 States or the District of 
     Columbia.''.

     SEC. 604. 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. 605. 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 organization receiving assistance under 
     this subchapter.'';
       (vi) in subparagraph (F) by striking ``Provide assurances'' 
     and inserting ``Certify'';
       (vii) in subparagraph (G) by striking ``Provide 
     assurances'' and inserting ``Certify''; and
       (viii) by striking subparagraphs (H), (I), and (J) and 
     inserting the following:
       ``(H) Meeting the needs of certain populations.--
     Demonstrate the manner in which the State will meet the 
     specific child care

[[Page H8878]]

     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 a 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)(H).''; 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. 606. LIMITATION ON STATE ALLOTMENTS.

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

     SEC. 607. 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. 608. REPEAL OF EARLY CHILDHOOD DEVELOPMENT AND BEFORE- 
                   AND AFTER-SCHOOL CARE REQUIREMENT.

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

     SEC. 609. 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. 610. PAYMENTS.

       Section 658J(c) (42 U.S.C. 9858h(c)) is amended--
       (1) by striking ``expended'' and inserting ``obligated''; 
     and
       (2) by striking ``3 fiscal years'' and inserting ``fiscal 
     year''.

     SEC. 611. ANNUAL REPORT AND AUDITS.

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

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

       ``(IV) assistance under the Food Stamp Act of 1977; and
       ``(V) other assistance programs;

       ``(vi) the number of months the family has received 
     benefits;
       ``(vii) the type of child care in which the child was 
     enrolled (such as family child care, home care, or center-
     based child care);
       ``(viii) whether the child care provider involved was a 
     relative;
       ``(ix) the cost of child care for such families; and
       ``(x) the average hours per week of such care;
     during the period for which such information is required to 
     be submitted.
       ``(C) Submission to secretary.--A State described in 
     subparagraph (A) shall, on a quarterly basis, submit the 
     information required to be collected under subparagraph (B) 
     to the Secretary.
       ``(D) Sampling.--The Secretary may disapprove the 
     information collected by a State under this paragraph if the 
     State uses sampling methods to collect such information.
       ``(2) Biannual reports.--Not later than December 31, 1997, 
     and every 6 months thereafter, a State described in paragraph 
     (1)(A) shall prepare and submit to the Secretary a report 
     that includes aggregate data concerning--
       ``(A) the number of child care providers that received 
     funding under this subchapter as separately identified based 
     on the types of providers listed in section 658P(5);
       ``(B) the monthly cost of child care services, and the 
     portion of such cost that is paid for with assistance 
     provided under this subchapter, listed by the type of child 
     care services provided;
       ``(C) the number of payments made by the State through 
     vouchers, contracts, cash, and disregards under public 
     benefit programs, listed by the type of child care services 
     provided;
       ``(D) the manner in which consumer education information 
     was provided to parents and the number of parents to whom 
     such information was provided; and
       ``(E) the total number (without duplication) of children 
     and families served under this subchapter;
     during the period for which such report is required to be 
     submitted.''; and
       (2) in subsection (b)--
       (A) in paragraph (1) by striking ``a application'' and 
     inserting ``an application'';
       (B) in paragraph (2) by striking ``any agency administering 
     activities that receive'' and inserting ``the State that 
     receives''; and
       (C) in paragraph (4) by striking ``entitles'' and inserting 
     ``entitled''.

     SEC. 612. 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. 613. ALLOTMENTS.

       Section 658O (42 U.S.C. 9858m) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)
       (i) by striking ``Possessions'' and inserting 
     ``possessions'';
       (ii) by inserting ``and'' after ``States,''; and
       (iii) by striking ``, and the Trust Territory of the 
     Pacific Islands''; and
       (B) in paragraph (2), by striking ``more than 3 percent'' 
     and inserting ``less than 1 percent, and not more than 2 
     percent,'';
       (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

[[Page H8879]]

     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. 614. 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. 615. EFFECTIVE DATE.

       (a) In General.--Except as provided in subsection (b), this 
     title and the amendments made by this title shall take effect 
     on October 1, 1996.
       (b) Exception.--The amendment made by section 603(a) shall 
     take effect on the date of enactment of this Act.
                  TITLE VII--CHILD NUTRITION PROGRAMS
                 Subtitle A--National School Lunch Act

     SEC. 701. 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. 702. 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) 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, schools that are 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;
       (B) in subparagraph (A), as redesignated by subparagraph 
     (A), by redesignating subclauses (I) and (II) as clauses (i) 
     and (ii), respectively; and
       (C) in subparagraph (A)(ii), as redesignated by 
     subparagraph (B), by striking ``subparagraph (C)'' and 
     inserting ``paragraph (3)''.
       (d) Use of Resources.--Section 9 of the National School 
     Lunch Act (42 U.S.C. 1758) is amended by striking subsection 
     (h).

     SEC. 703. FREE AND REDUCED PRICE POLICY STATEMENT.

       Section 9(b)(2) of the National School Lunch Act (42 U.S.C. 
     1758(b)(2)) is amended by adding at the end the following:
       ``(D) Free and reduced price policy statement.--After the 
     initial submission, a school 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. 704. 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) Rounding Rule for Lunch, Breakfast, and Supplement 
     Rates.--
       (1) In general.--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 adding before the period at the end the 
     following: ``, except that adjustments to payment rates for 
     meals and supplements served to individuals not determined to 
     be eligible for free or reduced price meals and supplements 
     shall be computed to the nearest lower cent increment and 
     based on the unrounded amount for the preceding 12-month 
     period''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall become effective on July 1, 1997.
       (c) 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 so 
     amended, as subsections (d) and (e), respectively.

     SEC. 705. 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 701(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'';

[[Page H8880]]

       (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);
       (2) by redesignating paragraphs (3) and (4) as paragraphs 
     (1) and (2), respectively; and
       (3) in paragraph (1), as redesignated by paragraph (2), by 
     striking ``Guidelines'' and inserting ``guidelines contained 
     in the most recent `Dietary Guidelines for Americans' that is 
     published under section 301 of the National Nutrition 
     Monitoring and Related Research Act of 1990 (7 U.S.C. 
     5341)''.
       (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.

     SEC. 706. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

       (a) Establishment of Program.--Section 13(a) of the 
     National School Lunch Act (42 U.S.C. 1761(a)) is amended--
       (1) in paragraph (1)--
       (A) in the first sentence, by striking ``initiate, 
     maintain, and expand'' and inserting ``initiate and 
     maintain''; and
       (B) in subparagraph (E) of the second sentence, by striking 
     ``the Trust Territory of the Pacific Islands,''; and
       (2) in paragraph (7)(A), by striking ``Except as provided 
     in subparagraph (C), private'' and inserting ``Private''.
       (b) Service Institutions.--Section 13(b) of the National 
     School Lunch Act (42 U.S.C. 1761(b)) is amended by striking 
     ``(b)(1)'' and all that follows through the end of paragraph 
     (1) and inserting the following:
       ``(b) Service Institutions.--
       ``(1) Payments.--
       ``(A) In general.--Except as otherwise provided in this 
     paragraph, payments to service institutions shall equal the 
     full cost of food service operations (which cost shall 
     include the costs of obtaining, preparing, and serving food, 
     but shall not include administrative costs).
       ``(B) Maximum amounts.--Subject to subparagraph (C), 
     payments to any institution under subparagraph (A) shall not 
     exceed--
       ``(i) $1.97 for each lunch and supper served;
       ``(ii) $1.13 for each breakfast served; and
       ``(iii) 46 cents for each meal supplement served.
       ``(C) Adjustments.--Amounts specified in subparagraph (B) 
     shall be adjusted on January 1, 1997, and each January 1 
     thereafter, to the nearest lower cent increment to reflect 
     changes for the 12-month period ending the preceding November 
     30 in the series for food away from home of the Consumer 
     Price Index for All Urban Consumers published by the Bureau 
     of Labor Statistics of the Department of Labor. Each 
     adjustment shall be based on the unrounded adjustment for the 
     prior 12-month period.''.
       (c) Administration of Service Institutions.--Section 
     13(b)(2) of the National School Lunch Act (42 U.S.C. 
     1761(b)(2)) is amended--
       (1) in the first sentence, by striking ``four meals'' and 
     inserting ``3 meals, or 2 meals and 1 supplement,''; and
       (2) by striking the second sentence.
       (d) Reimbursements.--Section 13(c)(2) of the National 
     School Lunch Act (42 U.S.C. 1761(c)(2)) is amended--
       (1) by striking subparagraphs (A), (C), (D), and (E);
       (2) by striking ``(B)'';
       (3) by striking ``, and such higher education 
     institutions,''; and
       (4) by striking ``without application'' and inserting ``on 
     showing residence in areas in which poor economic conditions 
     exist or on the basis of income eligibility statements for 
     children enrolled in the program''.
       (e) Advance Program Payments.--Section 13(e)(1) of the 
     National School Lunch Act (42 U.S.C. 1761(e)(1)) is amended--
       (1) by striking ``institution: Provided, That (A) the'' and 
     inserting ``institution. The'';
       (2) by inserting ``(excluding a school)'' after ``any 
     service institution''; and
       (3) by striking ``responsibilities, and (B) no'' and 
     inserting ``responsibilities. No''.
       (f) Food Requirements.--Section 13(f) of the National 
     School Lunch Act (42 U.S.C. 1761(f)) is amended--
       (1) by redesignating the first through seventh sentences as 
     paragraphs (1) through (7), respectively;
       (2) by striking paragraph (3), as redesignated by paragraph 
     (1);
       (3) in paragraph (4), as redesignated by paragraph (1), by 
     striking ``the first sentence'' and inserting ``paragraph 
     (1)'';
       (4) in subparagraph (B) of paragraph (6), as redesignated 
     by paragraph (1), by striking ``that bacteria levels'' and 
     all that follows through the period at the end and inserting 
     ``conformance with standards set by local health 
     authorities.''; and
       (5) by redesignating paragraphs (4) through (7), as 
     redesignated by paragraph (1), as paragraphs (3) through (6), 
     respectively.
       (g) Permitting Offer Versus Serve.--Section 13(f) of the 
     National School Lunch Act (42 U.S.C. 1761(f)), as amended by 
     subsection (f), is amended by adding at the end the 
     following:
       ``(7) Offer versus serve.--A school food authority 
     participating as a service institution may permit a child 
     attending a site on school premises operated directly by the 
     authority to refuse 1 or more items of a meal that the child 
     does not intend to consume, under rules that the school uses 
     for school meals programs. A refusal of an offered food item 
     shall not affect the amount of payments made under this 
     section to a school for the meal.''.
       (h) Records.--The second sentence of section 13(m) of the 
     National School Lunch Act (42 U.S.C. 1761(m)) is amended by 
     striking ``at all times be available'' and inserting ``be 
     available at any reasonable time''.
       (i) Removing Mandatory Notice to Institutions.--Section 
     13(n)(2) of the National School Lunch Act (42 U.S.C. 
     1761(n)(2)) is amended by striking ``, and its plans and 
     schedule for informing service institutions of the 
     availability of the program''.
       (j) Plan.--Section 13(n) of the National School Lunch Act 
     (42 U.S.C. 1761(n)), as amended by subsection (i), is 
     amended--
       (1) in paragraph (2), by striking ``, including the State's 
     methods of assessing need'';
       (2) by striking paragraph (3);
       (3) in paragraph (4), by striking ``and schedule''; and
       (4) by redesignating paragraphs (4) through (7) as 
     paragraphs (3) through (6), respectively.
       (k) Monitoring and Training.--Section 13(q) of the National 
     School Lunch Act (42 U.S.C. 1761(q)) is amended--
       (1) by striking paragraphs (2) and (4);
       (2) in paragraph (3), by striking ``paragraphs (1) and (2) 
     of this subsection'' and inserting ``paragraph (1)''; and
       (3) by redesignating paragraph (3) as paragraph (2).
       (l) Expired Program.--Section 13 of the National School 
     Lunch Act (42 U.S.C. 1761) is amended--
       (1) by striking subsection (p); and
       (2) by redesignating subsections (q) and (r) as subsections 
     (p) and (q), respectively.
       (m) Effective Date.--The amendments made by subsection (b) 
     shall become effective on January 1, 1997.

     SEC. 707. 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) State Advisory Council.--Section 14(e) of the National 
     School Lunch Act (42 U.S.C. 1762a(e)) is amended to read as 
     follows:
       ``(e) Each State agency that receives food assistance 
     payments under this section for any school year shall consult 
     with representatives of schools in the State that participate 
     in the school lunch program with respect to the needs of such 
     schools relating to the manner of selection and distribution 
     of commodity assistance for such program.''.
       (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. 708. 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

[[Page H8881]]

     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 95 cents for lunches and suppers, 27 cents for breakfasts, 
     and 13 cents for supplements.
       ``(bb) Adjustments.--The factors shall be adjusted on July 
     1, 1997, and each July 1 thereafter, to reflect changes in 
     the Consumer Price Index for food at home for the most recent 
     12-month period for which the data are available. The 
     reimbursement factors under this item shall be rounded down 
     to the nearest lower cent increment and based on the 
     unrounded adjustment for the preceding 12-month period.
       ``(cc) Reimbursement.--A family or group day care home 
     shall be provided reimbursement factors under this subclause 
     without a requirement for documentation of the costs 
     described in clause (i), except that reimbursement shall not 
     be provided under this subclause for meals or supplements 
     served to the children of a person acting as a family or 
     group day care home provider unless the children meet the 
     income eligibility guidelines for free or reduced price meals 
     under section 9.

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

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

       ``(III) Information and determinations.--

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

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

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

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

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

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

       ``(aa) assistance, including grants, to family and day care 
     home sponsoring organizations and other appropriate 
     organizations, in securing and providing training, materials, 
     automated data processing assistance, and other assistance 
     for the staff of the sponsoring organizations; and
       ``(bb) training and other assistance to family and group 
     day care homes in the implementation of the amendment to 
     subparagraph (A) made by section 708(e)(1) of the Personal 
     Responsibility and Work Opportunity 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.

[[Page H8882]]

     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) Unneeded Provision.--Section 17 of the National School 
     Lunch Act is amended by striking subsection (q).
       (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. 709. 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.''.

     SEC. 710. REDUCTION OF PAPERWORK.

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

     SEC. 711. INFORMATION ON INCOME ELIGIBILITY.

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

     SEC. 712. NUTRITION GUIDANCE FOR CHILD NUTRITION PROGRAMS.

       Section 24 of the National School Lunch Act (42 U.S.C. 
     1769e) is repealed.
                Subtitle B--Child Nutrition Act of 1966

     SEC. 721. 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. 722. 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. 723. 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).

[[Page H8883]]

       (2) Effective date.--The amendments made by paragraph (1) 
     shall become effective on October 1, 1996.

     SEC. 724. 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. 725. 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. 726. 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. 727. 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. 728. 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. 729. 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) Nutrition Education.--Section 17(e) of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1786(e)) is amended--
       (1) in paragraph (2), by striking the third sentence;
       (2) in paragraph (4)--
       (A) in the matter preceding subparagraph (A), by striking 
     ``shall'';
       (B) by striking subparagraph (A);
       (C) by redesignating subparagraphs (B) and (C) as 
     subparagraphs (A) and (B), respectively;
       (D) in subparagraph (A), as so redesignated--
       (i) by inserting ``shall'' before ``provide''; and
       (ii) by striking ``and'' at the end;
       (E) in subparagraph (B), as so redesignated--
       (i) by inserting ``shall'' before ``provide''; and
       (ii) by striking the period at the end and inserting ``; 
     and''; and
       (F) by adding at the end the following:
       ``(C) may provide a local agency with materials describing 
     other programs for which a participant in the program may be 
     eligible.'';
       (3) in paragraph (5), by striking ``The State agency shall 
     ensure that each'' and inserting ``Each''; and
       (4) by striking paragraph (6).
       (e) State Plan.--Section 17(f) of the Child Nutrition Act 
     of 1966 (42 U.S.C. 1786(f)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A)--
       (i) by striking ``annually to the Secretary, by a date 
     specified by the Secretary, a'' and inserting ``to the 
     Secretary, by a date specified by the Secretary, an 
     initial''; and
       (ii) by adding at the end the following: ``After submitting 
     the initial plan, a State shall be required to submit to the 
     Secretary for approval only a substantive change in the 
     plan.'';
       (B) in subparagraph (C)--
       (i) by striking clause (iii) and inserting the following:
       ``(iii) a plan to coordinate operations under the program 
     with other services or programs that may benefit participants 
     in, and applicants for, the program;'';
       (ii) in clause (vi), by inserting after ``in the State'' 
     the following: ``(including a plan to improve access to the 
     program for participants and prospective applicants who are 
     employed, or who reside in rural areas)'';
       (iii) in clause (vii), by striking ``to provide program 
     benefits'' and all that follows through ``emphasis on'' and 
     inserting ``for'';
       (iv) by striking clauses (ix), (x), and (xii);
       (v) in clause (xiii), by striking ``may require'' and 
     inserting ``may reasonably require'';
       (vi) by redesignating clauses (xi) and (xiii), as so 
     amended, as clauses (ix) and (x), respectively; and
       (vii) in clause (ix), as so redesignated, by adding ``and'' 
     at the end;
       (C) by striking subparagraph (D); and
       (D) by redesignating subparagraph (E) as subparagraph (D);
       (2) by striking paragraphs (6) and (22);
       (3) in the second sentence of paragraph (5), by striking 
     ``at all times be available'' and inserting ``be available at 
     any reasonable time'';
       (4) in paragraph (9)(B), by striking the second sentence;
       (5) in the first sentence of paragraph (11), by striking 
     ``, including standards that will ensure sufficient State 
     agency staff'';
       (6) in paragraph (12), by striking the third sentence;
       (7) in paragraph (14), by striking ``shall'' and inserting 
     ``may'';
       (8) in paragraph (17), by striking ``and to accommodate'' 
     and all that follows through ``facilities'';
       (9) in paragraph (19), by striking ``shall'' and inserting 
     ``may''; and
       (10) by redesignating paragraphs (7) through (21) as 
     paragraphs (6) through (20), and paragraphs (23) and (24) as 
     paragraphs (21) and (22), respectively.
       (f) 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).
       (g) 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)''; and
       (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)''.
       (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.
       (h) 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''.
       (i) 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).
       (j) 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. 730. CASH GRANTS FOR NUTRITION EDUCATION.

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

     SEC. 731. 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

[[Page H8884]]

     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 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.
                  Subtitle C--Miscellaneous Provisions

     SEC. 741. COORDINATION OF SCHOOL LUNCH, SCHOOL BREAKFAST, AND 
                   SUMMER FOOD SERVICE PROGRAMS.

       (a) Coordination.--
       (1) In general.--The Secretary of Agriculture shall develop 
     proposed changes to the regulations under the school lunch 
     program under the National School Lunch Act (42 U.S.C. 1751 
     et seq.), the summer food service program under section 13 of 
     that Act (42 U.S.C. 1761), and the school breakfast program 
     under section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 
     1773), for the purpose of simplifying and coordinating those 
     programs into a comprehensive meal program.
       (2) Consultation.--In developing proposed changes to the 
     regulations under paragraph (1), the Secretary of Agriculture 
     shall consult with local, State, and regional administrators 
     of the programs described in such paragraph.
       (b) Report.--Not later than November 1, 1997, the Secretary 
     of Agriculture shall submit to the Committee on Agriculture, 
     Nutrition, and Forestry of the Senate and the Committee on 
     Economic and Educational Opportunities of the House of 
     Representatives a report containing the proposed changes 
     developed under subsection (a).

     SEC. 742. REQUIREMENTS RELATING TO PROVISION OF BENEFITS 
                   BASED ON CITIZENSHIP, ALIENAGE, OR IMMIGRATION 
                   STATUS UNDER THE NATIONAL SCHOOL LUNCH ACT, THE 
                   CHILD NUTRITION ACT OF 1966, AND CERTAIN OTHER 
                   ACTS.

       (a) School Lunch and Breakfast Programs.--Notwithstanding 
     any other provision of this Act, an individual who is 
     eligible to receive free public education benefits under 
     State or local law shall not be ineligible to receive 
     benefits provided under the school lunch program under the 
     National School Lunch Act (42 U.S.C. 1751 et seq.) or the 
     school breakfast program under section 4 of the Child 
     Nutrition Act of 1966 (42 U.S.C. 1773) on the basis of 
     citizenship, alienage, or immigration status.
       (b) Other Programs.--
       (1) In general.--Nothing in this Act shall prohibit or 
     require a State to provide to an individual who is not a 
     citizen or a qualified alien, as defined in section 431(b), 
     benefits under programs established under the provisions of 
     law described in paragraph (2).
       (2) Provisions of law described.--The provisions of law 
     described in this paragraph are the following:
       (A) Programs (other than the school lunch program and the 
     school breakfast program) under the National School Lunch Act 
     (42 U.S.C. 1751 et seq.) and the Child Nutrition Act of 1966 
     (42 U.S.C. 1771 et seq.).
       (B) Section 4 of the Agriculture and Consumer Protection 
     Act of 1973 (7 U.S.C. 612c note).
       (C) The Emergency Food Assistance Act of 1983 (7 U.S.C 612c 
     note).
       (D) The food distribution program on Indian reservations 
     established under section 4(b) of the Food Stamp Act of 1977 
     (7 U.S.C 2013(b)).
           TITLE VIII--FOOD STAMPS AND COMMODITY DISTRIBUTION
                     Subtitle A--Food Stamp Program

     SEC. 801. 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. 802. 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. 803. 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. 804. 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. 805. 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. 806. 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. 807. EARNINGS OF STUDENTS.

       Section 5(d)(7) of the Food Stamp Act of 1977 (7 U.S.C. 
     2014(d)(7)) is amended by striking ``21'' and inserting 
     ``17''.

     SEC. 808. 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 (other than part A of title IV of the Social 
     Security Act (42 U.S.C. 601 et seq.)), or (B) a 1-time 
     payment or allowance made under a Federal or State law for 
     the costs of weatherization or emergency repair or 
     replacement of an unsafe or inoperative furnace or other 
     heating or cooling device,''.
       (b) Conforming Amendments.--Section 5(k) of the Food Stamp 
     Act of 1977 (7 U.S.C. 2014(k)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``plan for aid to 
     families with dependent children approved'' and inserting 
     ``program funded''; and
       (B) in subparagraph (B), by striking ``, not including 
     energy or utility-cost assistance,'';
       (2) in paragraph (2), by striking subparagraph (C) and 
     inserting the following:
       ``(C) a payment or allowance described in subsection 
     (d)(11);''; and
       (3) by adding at the end the following:
       ``(4) Third party energy assistance payments.--
       ``(A) Energy assistance payments.--For purposes of 
     subsection (d)(1), a payment

[[Page H8885]]

     made under a State law (other than a law referred to in 
     paragraph (2)(H)) 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. 809. 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.--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 $134, $229, 
     $189, $269, and $118, respectively.
       ``(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.--In the case of a 
     household that does not contain an elderly or disabled 
     individual, in the 48 contiguous States and the District of 
     Columbia, Alaska, Hawaii, Guam, and the Virgin Islands of the 
     United States, the excess shelter expense deduction shall not 
     exceed--
       ``(i) for the period beginning on the date of enactment of 
     this subparagraph and ending on December 31, 1996, $247, 
     $429, $353, $300, and $182 per month, respectively;
       ``(ii) for the period beginning on January 1, 1997, and 
     ending on September 30, 1998, $250, $434, $357, $304, and 
     $184 per month, respectively;
       ``(iii) for fiscal years 1999 and 2000, $275, $478, $393, 
     $334, and $203 per month, respectively; and
       ``(iv) for fiscal year 2001 and each subsequent fiscal 
     year, $300, $521, $429, $364, and $221 per month, 
     respectively.
       ``(C) Standard utility allowance.--
       ``(i) In general.--In computing the excess shelter expense 
     deduction, a State agency may use a standard utility 
     allowance in accordance with regulations promulgated by the 
     Secretary, except that a State agency may use an allowance 
     that does not fluctuate within a year to reflect seasonal 
     variations.
       ``(ii) Restrictions on heating and cooling expenses.--An 
     allowance for a heating or cooling expense may not be used in 
     the case of a household that--

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

       ``(iii) Mandatory allowance.--

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

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

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

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

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

       (b) Conforming Amendment.--Section 11(e)(3) of the Food 
     Stamp Act of 1977 (7 U.S.C. 2020(e)(3)) is amended by 
     striking ``. Under rules prescribed'' and all that follows 
     through ``verifies higher expenses''.

[[Page H8886]]

     SEC. 810. 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. 811. 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. 812. SIMPLIFIED CALCULATION OF INCOME FOR THE SELF-
                   EMPLOYED.

       Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014), as 
     amended by title I, is amended by adding at the end the 
     following:
       ``(m) 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 by which a State may submit a method, designed to 
     not increase Federal costs, for the approval of the 
     Secretary, that the Secretary determines will produce 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 or limited types of 
     income.--The method submitted by a State under paragraph (1) 
     may allow a State to estimate income for all types of self-
     employment income or may be limited to 1 or more types of 
     self-employment income.
       ``(3) Differences for different types of income.--The 
     method submitted by a State under paragraph (1) may differ 
     for different types of self-employment income.''.

     SEC. 813. 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. 814. 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. 815. 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

[[Page H8887]]

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

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

     SEC. 816. CARETAKER EXEMPTION.

       Section 6(d)(2) of the Food Stamp Act of 1977 (7 U.S.C. 
     2015(d)(2)) is amended by adding at the end the following: 
     ``A State that requested a waiver to lower the age specified 
     in subparagraph (B) and had the waiver denied by the 
     Secretary as of August 1, 1996, may, for a period of not more 
     than 3 years, lower the age of a dependent child that 
     qualifies a parent or other member of a household for an 
     exemption under subparagraph (B) to between 1 and 6 years of 
     age.''.

     SEC. 817. 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;
       ``(ii) for fiscal year 1997, $79,000,000;
       ``(iii) for fiscal year 1998, $81,000,000;
       ``(iv) for fiscal year 1999, $84,000,000;
       ``(v) for fiscal year 2000, $86,000,000;
       ``(vi) for fiscal year 2001, $88,000,000; and
       ``(vii) for fiscal year 2002, $90,000,000.
       ``(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. 818. 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. 819. 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. 820. 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 819, 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. 821. DISQUALIFICATION OF FLEEING FELONS.

       Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as 
     amended by section 820, 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

[[Page H8888]]

     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. 822. COOPERATION WITH CHILD SUPPORT AGENCIES.

       Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as 
     amended by section 821, is amended by adding at the end the 
     following:
       ``(l) Custodial Parent's Cooperation With Child Support 
     Agencies.--
       ``(1) In general.--At the option of a State agency, subject 
     to paragraphs (2) and (3), no natural or adoptive parent or 
     other individual (collectively referred to in this subsection 
     as `the individual') who is living with and exercising 
     parental control over a child under the age of 18 who has an 
     absent parent shall be eligible to participate in the food 
     stamp program unless the individual cooperates with the State 
     agency administering the program established under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.)--
       ``(A) in establishing the paternity of the child (if the 
     child is born out of wedlock); and
       ``(B) in obtaining support for--
       ``(i) the child; or
       ``(ii) the individual and the child.
       ``(2) Good cause for noncooperation.--Paragraph (1) shall 
     not apply to the individual if good cause is found for 
     refusing to cooperate, as determined by the State agency in 
     accordance with standards prescribed by the Secretary in 
     consultation with the Secretary of Health and Human Services. 
     The standards shall take into consideration circumstances 
     under which cooperation may be against the best interests of 
     the child.
       ``(3) Fees.--Paragraph (1) shall not require the payment of 
     a fee or other cost for services provided under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.).
       ``(m) Noncustodial Parent's Cooperation With Child Support 
     Agencies.--
       ``(1) In general.--At the option of a State agency, subject 
     to paragraphs (2) and (3), a putative or identified 
     noncustodial parent of a child under the age of 18 (referred 
     to in this subsection as `the individual') shall not be 
     eligible to participate in the food stamp program if the 
     individual refuses to cooperate with the State agency 
     administering the program established under part D of title 
     IV of the Social Security Act (42 U.S.C. 651 et seq.)--
       ``(A) in establishing the paternity of the child (if the 
     child is born out of wedlock); and
       ``(B) in providing support for the child.
       ``(2) Refusal to cooperate.--
       ``(A) Guidelines.--The Secretary, in consultation with the 
     Secretary of Health and Human Services, shall develop 
     guidelines on what constitutes a refusal to cooperate under 
     paragraph (1).
       ``(B) Procedures.--The State agency shall develop 
     procedures, using guidelines developed under subparagraph 
     (A), for determining whether an individual is refusing to 
     cooperate under paragraph (1).
       ``(3) Fees.--Paragraph (1) shall not require the payment of 
     a fee or other cost for services provided under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.).
       ``(4) Privacy.--The State agency shall provide safeguards 
     to restrict the use of information collected by a State 
     agency administering the program established under part D of 
     title IV of the Social Security Act (42 U.S.C. 651 et seq.) 
     to purposes for which the information is collected.''.

     SEC. 823. DISQUALIFICATION RELATING TO CHILD SUPPORT ARREARS.

       Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as 
     amended by section 822, 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. 824. WORK REQUIREMENT.

       (a) In General.--Section 6 of the Food Stamp Act of 1977 (7 
     U.S.C. 2015), as amended by section 823, 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); and
       ``(C) a program of employment and 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 36-month period, the 
     individual received food stamp benefits for not less than 3 
     months (consecutive or otherwise) 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 benefits pursuant to paragraph (3), (4), or 
     (5).
       ``(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) 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) Regaining eligibility.--An individual denied 
     eligibility under paragraph (2) shall regain eligibility 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) Maintaining eligibility.--An individual who regains 
     eligibility under subparagraph (A) shall remain eligible as 
     long as the individual meets the requirements of subparagraph 
     (A), (B), or (C) of paragraph (2).
       ``(C) Loss of employment.--
       ``(i) In general.--An individual who regained eligibility 
     under subparagraph (A) and who no longer meets the 
     requirements of subparagraph (A), (B), or (C) of paragraph 
     (2) shall remain eligible for a consecutive 3-month period, 
     beginning on the date the individual first notifies the State 
     agency that the individual no longer meets the requirements 
     of subparagraph (A), (B), or (C) of paragraph (2).
       ``(ii) Limitation.--An individual shall not receive any 
     benefits pursuant to clause (i) for more than a single 3-
     month period in any 36-month period.
       ``(6) Other program rules.--Nothing in this subsection 
     shall make an individual eligible for benefits under this Act 
     if the individual is not otherwise eligible for benefits 
     under the other provisions of this Act.''.
       (b) Transition Provision.--The term ``preceding 36-month 
     period'' in section 6(o) of the Food Stamp Act of 1977, as 
     added by subsection (a), does not include, with respect to a 
     State, any period before the earlier of--
       (1) the date the State notifies recipients of food stamp 
     benefits of the application of section 6(o); or
       (2) the date that is 3 months after the date of enactment 
     of this Act.

     SEC. 825. 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 ``(i)(1)(A) Any State'' and all that 
     follows through the end of paragraph (1) and inserting the 
     following:
       ``(i) Electronic Benefit Transfers.--
       ``(1) In general.--
       ``(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.

[[Page H8889]]

       ``(D) Operation.--An electronic benefit transfer system 
     should take into account generally accepted standard 
     operating rules based on--
       ``(i) commercial electronic funds transfer technology;
       ``(ii) the need to permit interstate operation and law 
     enforcement monitoring; and
       ``(iii) the need to permit monitoring and investigations by 
     authorized law enforcement agencies.'';
       (2) in paragraph (2)--
       (A) by striking ``effective no later than April 1, 1992,'';
       (B) in subparagraph (A)--
       (i) by striking ``, in any 1 year,''; and
       (ii) by striking ``on-line'';
       (C) by striking subparagraph (D) and inserting the 
     following:
       ``(D)(i) measures to maximize the security of a system 
     using the most recent technology available that the State 
     agency considers appropriate and cost effective and which may 
     include personal identification numbers, photographic 
     identification on electronic benefit transfer cards, and 
     other measures to protect against fraud and abuse; and
       ``(ii) effective not later than 2 years after the date of 
     enactment of this clause, to the extent practicable, measures 
     that permit a system to differentiate items of food that may 
     be acquired with an allotment from items of food that may not 
     be acquired with an allotment;'';
       (D) in subparagraph (G), by striking ``and'' at the end;
       (E) in subparagraph (H), by striking the period at the end 
     and inserting ``; and''; and
       (F) by adding at the end the following:
       ``(I) procurement standards.''; and
       (3) by adding at the end the following:
       ``(7) Replacement of benefits.--Regulations issued by the 
     Secretary regarding the replacement of benefits and liability 
     for replacement of benefits under an electronic benefit 
     transfer system shall be similar to the regulations in effect 
     for a paper-based food stamp issuance system.
       ``(8) Replacement card fee.--A State agency may collect a 
     charge for replacement of an electronic benefit transfer card 
     by reducing the monthly allotment of the household receiving 
     the replacement card.
       ``(9) Optional photographic identification.--
       ``(A) In general.--A State agency may require that an 
     electronic benefit card contain a photograph of 1 or more 
     members of a household.
       ``(B) Other authorized users.--If a State agency requires a 
     photograph on an electronic benefit card under subparagraph 
     (A), the State agency shall establish procedures to ensure 
     that any other appropriate member of the household or any 
     authorized representative of the household may utilize the 
     card.
       ``(10) Applicable law.--Disclosures, protections, 
     responsibilities, and remedies established by the Federal 
     Reserve Board under section 904 of the Electronic Fund 
     Transfer Act (15 U.S.C. 1693b) shall not apply to benefits 
     under this Act delivered through any electronic benefit 
     transfer system.
       ``(11) Application of anti-tying restrictions to electronic 
     benefit transfer systems.--
       ``(A) Definitions.--In this paragraph:
       ``(i) Affiliate.--The term `affiliate' has the meaning 
     provided the term in section 2(k) of the Bank Holding Company 
     Act of 1956 (12 U.S.C. 1841(k)).
       ``(ii) Company.--The term `company' has the meaning 
     provided the term in section 106(a) of the Bank Holding 
     Company Act Amendments of 1970 (12 U.S.C. 1971), but shall 
     not include a bank, a bank holding company, or any subsidiary 
     of a bank holding company.
       ``(iii) Electronic benefit transfer service.--The term 
     `electronic benefit transfer service' means the processing of 
     electronic transfers of household benefits, determined under 
     section 8(a) or 26, if the benefits are--

       ``(I) issued from and stored in a central databank;
       ``(II) electronically accessed by household members at the 
     point of sale; and
       ``(III) provided by a Federal or State government.

       ``(iv) Point-of-sale service.--The term `point-of-sale 
     service' means any product or service related to the 
     electronic authorization and processing of payments for 
     merchandise at a retail food store, including credit or debit 
     card services, automated teller machines, point-of-sale 
     terminals, or access to on-line systems.
       ``(B) Restrictions.--A company may not sell or provide 
     electronic benefit transfer services, or fix or vary the 
     consideration for electronic benefit transfer services, on 
     the condition or requirement that the customer--
       ``(i) obtain some additional point-of-sale service from the 
     company or an affiliate of the company; or
       ``(ii) not obtain some additional point-of-sale service 
     from a competitor of the company or competitor of any 
     affiliate of the company.
       ``(C) Consultation with the federal reserve board.--Before 
     promulgating regulations or interpretations of regulations to 
     carry out this paragraph, the Secretary shall consult with 
     the Board of Governors of the Federal Reserve 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. 826. 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. 827. 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. 828. 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. 829. 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. 830. 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. 831. 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. 832. 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. 833. 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

[[Page H8890]]

     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. 834. 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. 835. OPERATION OF FOOD STAMP OFFICES.

       Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020), 
     as amended by sections 809(b) and 819(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. 836. STATE EMPLOYEE AND TRAINING STANDARDS.

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

     SEC. 837. 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. 838. EXPEDITED COUPON SERVICE.

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

     SEC. 839. 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. 840. 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 
     835(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. 841. INVESTIGATIONS.

       Section 12(a) of the Food Stamp Act of 1977 (7 U.S.C. 
     2021(a)) is amended by adding at the end the following: 
     ``Regulations issued pursuant to this Act shall provide 
     criteria for the finding of a violation and the suspension or 
     disqualification of a retail food store or wholesale food 
     concern on the basis of evidence that may include facts 
     established through on-site investigations, inconsistent 
     redemption data, or evidence obtained through a transaction 
     report under an electronic benefit transfer system.''.

     SEC. 842. 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. 843. 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.--

[[Page H8891]]

       ``(1) In general.--The Secretary shall issue regulations 
     providing criteria for the disqualification under this Act of 
     an approved retail food store or 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. 844. 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) which arise'' and inserting ``35 
     percent of the value of all funds or allotments recovered or 
     collected pursuant to sections 6(b) and 13(c) and 20 percent 
     of the value of any other funds or allotments recovered or 
     collected, except the value of funds or allotments recovered 
     or collected that arise''.

     SEC. 845. 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. 846. EXPANDED CRIMINAL FORFEITURE FOR VIOLATIONS.

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

     SEC. 847. 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. 848. 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. 849. WORK SUPPLEMENTATION OR SUPPORT PROGRAM.

       Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025), 
     as amended by section 848(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

[[Page H8892]]

     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 supplemen- tation or support 
     program shall not displace the employment of individuals who 
     are not supplemented or supported.''.

     SEC. 850. WAIVER AUTHORITY.

       Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
     2026(b)(1)) is amended--
       (1) by redesignating subparagraph (B) as subparagraph (C); 
     and
       (2) in subparagraph (A)--
       (A) in the first sentence, by striking ``benefits to 
     eligible households, including'' and inserting the following: 
     ``benefits to eligible households, and may waive any 
     requirement of this Act to the extent necessary for the 
     project to be conducted.
       ``(B) Project requirements.--
       ``(i) Program goal.--The Secretary may not conduct a 
     project under subparagraph (A) unless--

       ``(I) the project is consistent with the goal of the food 
     stamp program of providing food assistance to raise levels of 
     nutrition among low-income individuals; and

       ``(II) the project includes an evaluation to determine the 
     effects of the project.

       ``(ii) Permissible projects.--The Secretary may conduct a 
     project under subparagraph (A) to--

       ``(I) improve program administration;
       ``(II) increase the self-sufficiency of food stamp 
     recipients;
       ``(III) test innovative welfare reform strategies; or
       ``(IV) allow greater conformity with the rules of other 
     programs than would be allowed but for this paragraph.

       ``(iii) Restrictions on permissible projects.--If the 
     Secretary finds that a project under subparagraph (A) would 
     reduce benefits by more than 20 percent for more than 5 
     percent of households in the area subject to the project (not 
     including any household whose benefits are reduced due to a 
     failure to comply with work or other conduct requirements), 
     the project--

       ``(I) may not include more than 15 percent of the State's 
     food stamp households; and
       ``(II) shall continue for not more than 5 years after the 
     date of implementation, unless the Secretary approves an 
     extension requested by the State agency at any time.

       ``(iv) Impermissible projects.--The Secretary may not 
     conduct a project under subparagraph (A) that--

       ``(I) involves the payment of the value of an allotment in 
     the form of cash, unless the project was approved prior to 
     the date of enactment of this subparagraph;
       ``(II) has the effect of substantially transferring funds 
     made available under this Act to services or benefits 
     provided primarily through another public assistance program, 
     or using the funds for any purpose other than the purchase of 
     food, program administration, or an employment or training 
     program;
       ``(III) is inconsistent with--

       ``(aa) the last 2 sentences of section 3(i);
       ``(bb) the last sentence of section 5(a), insofar as a 
     waiver denies assistance to an otherwise eligible household 
     or individual if the household or individual has not failed 
     to comply with any work, behavioral, or other conduct 
     requirement under this or another program;
       ``(cc) section 5(c)(2);
       ``(dd) paragraph (2)(B), (4)(F)(i), or (4)(K) of section 
     6(d);
       ``(ee) section 8(b);
       ``(ff) section 11(e)(2)(B);
       ``(gg) the time standard under section 11(e)(3);
       ``(hh) subsection (a), (c), (g), (h)(2), or (h)(3) of 
     section 16;
       ``(ii) this paragraph; or
       ``(jj) subsection (a)(1) or (g)(1) of section 20;

       ``(IV) modifies the operation of section 5 so as to have 
     the effect of--

       ``(aa) increasing the shelter deduction to households with 
     no out-of-pocket housing costs or housing costs that consume 
     a low percentage of the household's income; or
       ``(bb) absolving a State from acting with reasonable 
     promptness on substantial reported changes in income or 
     household size (except that this subclause shall not apply 
     with regard to changes related to food stamp deductions);

       ``(V) is not limited to a specific time period; or
       ``(VI) waives a provision of section 26.

       ``(v) Additional included projects.--A pilot or 
     experimental project may include'';
       (B) by striking ``to aid to families with dependent 
     children under part A of title IV of the Social Security 
     Act'' and inserting ``are receiving assistance under a State 
     program funded under part A of title IV of the Social 
     Security Act (42 U.S.C. 601 et seq.)''; and
       (C) by striking ``coupons. The Secretary'' and all that 
     follows through ``Any pilot'' and inserting the following: 
     ``coupons.
       ``(vi) Cash payment pilot projects.--Any pilot''.

     SEC. 851. 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 850, 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. 852. 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. 853. 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. 854. 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

[[Page H8893]]

     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) a household in which no 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.) may not 
     participate in 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;
       ``(3) if approved by the Secretary, a household in which 1 
     or more members but not 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.) may be eligible to 
     participate in the Program; and
       ``(4) 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; 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.
       ``(d) Approval of Program.--
       ``(1) State plan.--A State agency may not operate a Program 
     unless the Secretary approves a State plan for the operation 
     of the Program under paragraph (2).
       ``(2) Approval of plan.--The Secretary shall approve any 
     State plan to carry out a Program if the Secretary determines 
     that the plan--
       ``(A) complies with this section; and
       ``(B) contains sufficient documentation that the plan will 
     not increase Federal costs for any fiscal year.
       ``(e) Increased Federal Costs.--
       ``(1) Determination.--
       ``(A) In general.--The Secretary shall determine whether a 
     Program being carried out by a State agency is increasing 
     Federal costs under this Act.
       ``(B) No excluded households.--In making a determination 
     under subparagraph (A), the Secretary shall not require the 
     State agency to collect or report any information on 
     households not included in the Program.
       ``(C) Alternative accounting periods.--The Secretary may 
     approve the request of a State agency to apply alternative 
     accounting periods to determine if Federal costs do not 
     exceed the Federal costs had the State agency not elected to 
     carry out the Program.
       ``(2) Notification.--If the Secretary determines that the 
     Program has increased Federal costs under this Act for any 
     fiscal year or any portion of any fiscal year, the Secretary 
     shall notify the State not later than 30 days after the 
     Secretary makes the determination under paragraph (1).
       ``(3) Enforcement.--
       ``(A) Corrective action.--Not later than 90 days after the 
     date of a notification under paragraph (2), the State shall 
     submit a plan for approval by the Secretary for prompt 
     corrective action that is designed to prevent the Program 
     from increasing Federal costs under this Act.
       ``(B) Termination.--If the State does not submit a plan 
     under subparagraph (A) or carry out a plan approved by the 
     Secretary, the Secretary shall terminate the approval of the 
     State agency operating the Program and the State agency shall 
     be ineligible to operate a future Program.
       ``(f) Rules and Procedures.--
       ``(1) In general.--In operating a Program, a State or 
     political subdivision of a State may follow the rules and 
     procedures established by the State or political subdivision 
     under a State program funded under part A of title IV of the 
     Social Security Act (42 U.S.C. 601 et seq.) or under the food 
     stamp program.
       ``(2) Standardized deductions.--In operating a Program, a 
     State or political subdivision of a State may standardize the 
     deductions provided under section 5(e). In developing the 
     standardized deduction, the State shall consider the work 
     expenses, dependent care costs, and shelter costs of 
     participating households.
       ``(3) Requirements.--In operating a Program, a State or 
     political subdivision shall comply with the requirements of--
       ``(A) subsections (a) through (g) of section 7;
       ``(B) section 8(a) (except that the income of a household 
     may be determined under a State program funded under part A 
     of title IV of the Social Security Act (42 U.S.C. 601 et 
     seq.));
       ``(C) subsection (b) and (d) of section 8;
       ``(D) subsections (a), (c), (d), and (n) of section 11;
       ``(E) paragraphs (8), (12), (16), (18), (20), (24), and 
     (25) of section 11(e);
       ``(F) 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
       ``(G) 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 819(b) 
     and 835, 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 830, 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.

     SEC. 855. STUDY OF THE USE OF FOOD STAMPS TO PURCHASE 
                   VITAMINS AND MINERALS.

       (a) In General.--The Secretary of Agriculture, in 
     consultation with the National Academy of Sciences and the 
     Center for Disease Control and Prevention, shall conduct a 
     study on the use of food stamps provided under the Food Stamp 
     Act of 1977 (7 U.S.C. 2011 et seq.) to purchase vitamins and 
     minerals.
       (b) Analysis.--The study shall include--
       (1) an analysis of scientific findings on the efficacy of 
     and need for vitamins and minerals, including--
       (A) the adequacy of vitamin and mineral intakes in low-
     income populations, as shown by research and surveys 
     conducted prior to the study; and
       (B) the potential value of nutritional supplements in 
     filling nutrient gaps that may exist in the United States 
     population as a whole or in vulnerable subgroups in the 
     population;
       (2) the impact of nutritional improvements (including 
     vitamin or mineral supplementation) on the health status and 
     health care costs of women of childbearing age, pregnant or 
     lactating women, and the elderly;
       (3) the cost of commercially available vitamin and mineral 
     supplements;
       (4) the purchasing habits of low-income populations with 
     regard to vitamins and minerals;
       (5) the impact of using food stamps to purchase vitamins 
     and minerals on the food purchases of low-income households; 
     and
       (6) the economic impact on the production of agricultural 
     commodities of using food stamps to purchase vitamins and 
     minerals.
       (c) Report.--Not later than December 15, 1998, the 
     Secretary shall report the results of the study to the 
     Committee on Agriculture of the House of Representatives and 
     the Committee on Agriculture, Nutrition, and Forestry of the 
     Senate.

     SEC. 856. DEFICIT REDUCTION.

       It is the sense of the Committee on Agriculture of the 
     House of Representatives that reductions in outlays resulting 
     from this title shall not be taken into account for purposes 
     of section 252 of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 (2 U.S.C. 902).
              Subtitle B--Commodity Distribution Programs

     SEC. 871. 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.

[[Page H8894]]

     3001 et seq.), including a project that operates a congregate 
     nutrition site and a project that provides home-delivered 
     meals; or
       ``(v) a disaster relief program;
       ``(B) has been designated by the appropriate State agency, 
     or by the Secretary; and
       ``(C) has been approved by the Secretary for participation 
     in the program established under this Act.
       ``(4) Emergency feeding organization.--The term `emergency 
     feeding organization' means a public or nonprofit 
     organization that administers activities and projects 
     (including the activities and projects of a charitable 
     institution, a food bank, a food pantry, a hunger relief 
     center, a soup kitchen, or a similar public or private 
     nonprofit eligible recipient agency) providing nutrition 
     assistance to relieve situations of emergency and distress 
     through the provision of food to needy persons, including 
     low-income and unemployed persons.
       ``(5) Food bank.--The term `food bank' means a public or 
     charitable institution that maintains an established 
     operation involving the provision of food or edible 
     commodities, or the products of food or edible commodities, 
     to food pantries, soup kitchens, hunger relief centers, or 
     other food or feeding centers that, as an integral part of 
     their normal activities, provide meals or food to feed needy 
     persons on a regular basis.
       ``(6) Food pantry.--The term `food pantry' means a public 
     or private nonprofit organization that distributes food to 
     low-income and unemployed households, including food from 
     sources other than the Department of Agriculture, to relieve 
     situations of emergency and distress.
       ``(7) Poverty line.--The term `poverty line' has the 
     meaning provided in section 673(2) of the Community Services 
     Block Grant Act (42 U.S.C. 9902(2)).
       ``(8) Soup kitchen.--The term `soup kitchen' means a public 
     or charitable institution that, as an integral part of the 
     normal activities of the institution, maintains an 
     established feeding operation to provide food to needy 
     homeless persons on a regular basis.
       ``(9) Total value of additional commodities.--The term 
     `total value of additional commodities' means the actual cost 
     of all additional commodities that are paid by the Secretary 
     (including the distribution and processing costs incurred by 
     the Secretary).
       ``(10) Value of additional commodities allocated to each 
     state.--The term `value of additional commodities allocated 
     to each State' means the actual cost of additional 
     commodities allocated to each State that are paid by the 
     Secretary (including the distribution and processing costs 
     incurred by the Secretary).''.
       (b) State Plan.--Section 202A of the Emergency Food 
     Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) 
     is amended to read as follows:

     ``SEC. 202A. STATE PLAN.

       ``(a) In General.--To receive commodities under this Act, a 
     State shall submit a plan of operation and administration 
     every 4 years to the Secretary for approval. The plan may be 
     amended at any time, with the approval of the Secretary.
       ``(b) Requirements.--Each plan shall--
       ``(1) designate the State agency responsible for 
     distributing the commodities received under this Act;
       ``(2) set forth a plan of operation and administration to 
     expeditiously distribute commodities under this Act;
       ``(3) set forth the standards of eligibility for recipient 
     agencies; and
       ``(4) set forth the standards of eligibility for individual 
     or household recipients of commodities, which shall require--
       ``(A) individuals or households to be comprised of needy 
     persons; and
       ``(B) individual or household members to be residing in the 
     geographic location served by the distributing agency at the 
     time of applying for assistance.
       ``(c) State Advisory Board.--The Secretary shall encourage 
     each State receiving commodities under this Act to establish 
     a State advisory board consisting of representatives of all 
     entities in the State, both public and private, interested in 
     the distribution of commodities received under this Act.''.
       (c) Authorization of Appropriations for Administrative 
     Funds.--Section 204(a)(1) of the Emergency Food Assistance 
     Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is 
     amended--
       (1) in the first sentence, by striking ``for State and 
     local'' and all that follows through ``under this title'' and 
     inserting ``to pay for the direct and indirect administrative 
     costs of the States related to the processing, transporting, 
     and distributing to eligible recipient agencies of 
     commodities provided by the Secretary under this Act and 
     commodities secured from other sources''; and
       (2) by striking the fourth sentence.
       (d) Delivery of Commodities.--Section 214 of the Emergency 
     Food Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c 
     note) is amended--
       (1) by striking subsections (a) through (e) and (j);
       (2) by redesignating subsections (f) through (i) as 
     subsections (a) through (d), respectively;
       (3) in subsection (b), as redesignated by paragraph (2)--
       (A) in the first sentence, by striking ``subsection (f) or 
     subsection (j) if applicable,'' and inserting ``subsection 
     (a),''; and
       (B) in the second sentence, by striking ``subsection (f)'' 
     and inserting ``subsection (a)'';
       (4) by striking subsection (c), as redesignated by 
     paragraph (2), and inserting the following:
       ``(c) Administration.--
       ``(1) In general.--Commodities made available for each 
     fiscal year under this section shall be delivered at 
     reasonable intervals to States based on the grants calculated 
     under subsection (a), or reallocated under subsection (b), 
     before December 31 of the following fiscal year.
       ``(2) Entitlement.--Each State shall be entitled to receive 
     the value of additional commodities determined under 
     subsection (a).''; and
       (5) in subsection (d), as redesignated by paragraph (2), by 
     striking ``or reduce'' and all that follows through ``each 
     fiscal year''.
       (e) Technical Amendments.--The Emergency Food Assistance 
     Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is 
     amended--
       (1) in the first sentence of section 203B(a), by striking 
     ``203 and 203A of this Act'' and inserting ``203A'';
       (2) in section 204(a), by striking ``title'' each place it 
     appears and inserting ``Act'';
       (3) in the first sentence of section 210(e), by striking 
     ``(except as otherwise provided for in section 214(j))''; and
       (4) by striking section 212.
       (f) Report on EFAP.--Section 1571 of the Food Security Act 
     of 1985 (Public Law 99-198; 7 U.S.C. 612c note) is repealed.
       (g) Availability of Commodities Under the Food Stamp 
     Program.--The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), 
     as amended by section 854(a), is amended by adding at the end 
     the following:

     ``SEC. 27. AVAILABILITY OF COMMODITIES FOR THE EMERGENCY FOOD 
                   ASSISTANCE PROGRAM.

       ``(a) Purchase of Commodities.--From amounts made available 
     to carry out 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. 872. 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. 873. 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. 874. 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 C--Electronic Benefit Transfer Systems

     SEC. 891. 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 that'' and inserting 
     ``(d) Applicability to Service Providers Other Than Certain 
     Financial Institutions.--
       ``(1) In general.--If''; and
       (2) by adding at the end the following:
       ``(2) State and local government electronic benefit 
     transfer systems.--
       ``(A) Definition of electronic benefit transfer system.--In 
     this paragraph, the term `electronic benefit transfer 
     system'--
       ``(i) means a system under which a government agency 
     distributes needs-tested benefits by establishing accounts 
     that may 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 a Federal, State, or local government 
     agency.
       ``(B) 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 system established under State or local law 
     or administered by a State or local government.
       ``(C) Exception for direct deposit into recipient's 
     account.--Subparagraph (B) shall not apply with respect to 
     any electronic funds transfer under an electronic benefit 
     transfer system for a deposit directly into a consumer 
     account held by the recipient of the benefit.

[[Page H8895]]

       ``(D) Rule of construction.--No provision of this 
     paragraph--
       ``(i) affects or alters the protections otherwise 
     applicable with respect to benefits established by any other 
     provision Federal, State, or local law; or
       ``(ii) otherwise supersedes the application of any State or 
     local law.''.
                        TITLE IX--MISCELLANEOUS

     SEC. 901. 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) The Child Care and Development Block Grant Act of 1990 
     (relating to block grants for child care).

     SEC. 902. 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. 903. 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.) is amended by adding at the end the following:

     ``SEC. 27. EXCHANGE OF INFORMATION WITH LAW ENFORCEMENT 
                   AGENCIES.

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

     SEC. 904. SENSE OF THE SENATE REGARDING THE INABILITY OF THE 
                   NONCUSTODIAL 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. 905. 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. 906. 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. 907. 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. 908. REDUCTION OF BLOCK GRANTS TO STATES FOR SOCIAL 
                   SERVICES; USE OF VOUCHERS.

       (a) Reduction of Grants.--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) $2,380,000,000 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) Authority to Use Vouchers.--Section 2002 of such Act 
     (42 U.S.C. 1937a) is amended by adding at the end the 
     following:

[[Page H8896]]

       ``(f) A State may use funds provided under this title to 
     provide vouchers, for services directed at the goals set 
     forth in section 2001, to families, including--
       ``(1) families who have become ineligible for assistance 
     under a State program funded under part A of title IV by 
     reason of a durational limit on the provision of such 
     assistance; and
       ``(2) families denied cash assistance under the State 
     program funded under part A of title IV for a child who is 
     born to a member of the family who is--
       ``(A) a recipient of assistance under the program; or
       ``(B) a person who received such assistance at any time 
     during the 10-month period ending with the birth of the 
     child.''.

     SEC. 909. 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) 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 amendment.--Paragraph (2) of section 32(b) 
     of such Code is amended to read as follows:
       ``(2) Amounts.--The earned income amount and the phaseout 
     amount shall be determined as follows:

       

                                                                                                                
    In the case of an eligible                                                                                  
         individual with:                The earned income amount is:             The phaseout amount is:       
                                                                                                                
1 qualifying child................                  $6,330                                $11,610               
2 or more qualifying children.....                  $8,890                                $11,610               
No qualifying children............                  $4,220                               $ 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. 910. MODIFICATION OF ADJUSTED GROSS INCOME DEFINITION 
                   FOR EARNED INCOME CREDIT.

       (a) In General.--Subsections (a)(2)(B), (c)(1)(C), and 
     (f)(2)(B) of section 32 of the Internal Revenue Code of 1986 
     are each amended by striking ``adjusted gross income'' each 
     place it appears and inserting ``modified adjusted gross 
     income''.
       (b) Modified Adjusted Gross Income Defined.--Section 32(c) 
     of such Code (relating to definitions and special rules) is 
     amended by adding at the end the following new paragraph:
       ``(5) Modified adjusted gross income.--
       ``(A) In general.--The term `modified adjusted gross 
     income' means adjusted gross income determined without regard 
     to the amounts described in subparagraph (B).
       ``(B) 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) 50 percent of 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. 911. 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 any State program funded under part A of 
     title IV of the Social Security Act (42 U.S.C. 601 et seq.).

     SEC. 912. ABSTINENCE EDUCATION.

       Title V of the Social Security Act (42 U.S.C. 701 et seq.) 
     is amended by adding at the end the following section:


              ``separate program for abstinence education

       ``Sec. 510. (a) For the purpose described in subsection 
     (b), the Secretary shall, for fiscal year 1998 and each 
     subsequent fiscal year, allot to each State which has 
     transmitted an application for the fiscal year under section 
     505(a) an amount equal to the product of--
       ``(1) the amount appropriated in subsection (d) for the 
     fiscal year; and
       ``(2) the percentage determined for the State under section 
     502(c)(1)(B)(ii).
       ``(b)(1) The purpose of an allotment under subsection (a) 
     to a State is to enable the State to provide abstinence 
     education, and at the option of the State, where appropriate, 
     mentoring, counseling, and adult supervision to promote 
     abstinence from sexual activity, with a focus on those groups 
     which are most likely to bear children out-of-wedlock.
       ``(2) For purposes of this section, the term `abstinence 
     education' means an educational or motivational program 
     which--
       ``(A) has as its exclusive purpose, teaching the social, 
     psychological, and health gains to be realized by abstaining 
     from sexual activity;
       ``(B) teaches abstinence from sexual activity outside 
     marriage as the expected standard for all school age 
     children;
       ``(C) teaches that abstinence from sexual activity is the 
     only certain way to avoid out-of-wedlock pregnancy, sexually 
     transmitted diseases, and other associated health problems;
       ``(D) teaches that a mutually faithful monogamous 
     relationship in context of marriage is the expected standard 
     of human sexual activity;
       ``(E) teaches that sexual activity outside of the context 
     of marriage is likely to have harmful psychological and 
     physical effects;
       ``(F) teaches that bearing children out-of-wedlock is 
     likely to have harmful consequences for the child, the 
     child's parents, and society;
       ``(G) teaches young people how to reject sexual advances 
     and how alcohol and drug use increases vulnerability to 
     sexual advances; and
       ``(H) teaches the importance of attaining self-sufficiency 
     before engaging in sexual activity.

[[Page H8897]]

       ``(c)(1) Sections 503, 507, and 508 apply to allotments 
     under subsection (a) to the same extent and in the same 
     manner as such sections apply to allotments under section 
     502(c).
       ``(2) Sections 505 and 506 apply to allotments under 
     subsection (a) to the extent determined by the Secretary to 
     be appropriate.
       ``(d) For the purpose of allotments under subsection (a), 
     there is appropriated, out of any money in the Treasury not 
     otherwise appropriated, an additional $50,000,000 for each of 
     the fiscal years 1998 through 2002. The appropriation under 
     the preceding sentence for a fiscal year is made on October 1 
     of the fiscal year.''.

     SEC. 913. CHANGE IN REFERENCE.

       Effective January 1, 1997, the third sentence of section 
     1902(a) and section 1908(e)(1) of the Social Security Act (42 
     U.S.C. 1396a(a), 1396g-1(e)(1)) are each amended by striking 
     ``The First Church of Christ, Scientist, Boston, 
     Massachusetts'' and inserting ``The Commission for 
     Accreditation of Christian Science Nursing Organizations/
     Facilities, Inc.'' each place it appears.
       And the Senate agree to the same.

     John R. Kasich,
     Bill Archer,
     William F. Goodling,
     Pat Roberts,
     Tom Bliley,
     E. Clay Shaw, Jr.,
     James Talent,
     Jim Nussle,
     Tim Hutchinson,
     Jim McCrery,
     Michael Bilirakis,
     Lamar Smith,
     Nancy L. Johnson,
     Dave Camp,
     Gary A. Franks,
     ``Duke'' Cunningham,
     Mike Castle,
     Bob Goodlatte,
                                Managers on the Part of the House.

     From the Committee on the Budget:
     Pete V. Domenici,
     D. Nickles,
     Phil Gramm,
     Jim Exon,
     From the Committee on Agriculture, Nutrition, and Forestry:
     Richard G. Lugar,
     Jesse Helms,
     Thad Cochran,
     Rick Santorum,
     From the Committee on Finance:
     William V. Roth, Jr.,
     John H. Chafee,
     Chuck Grassley,
     Orrin Hatch,
     Al Simpson,
     From the Committee on Labor and Human Resources:
     Nancy Landon Kassebaum,
                               Managers on the Part of the Senate.

       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

       The managers on the part of the House and the Senate at the 
     conference on the disagreeing votes of the two Houses on the 
     amendment of the Senate to 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, 
     submit the following joint statement to the House and the 
     Senate in explanation of the effect of the action agreed upon 
     by the managers and recommended in the accompanying 
     conference report:
       The Senate amendment struck all of the House bill after the 
     enacting clause and inserted a substitute text.
       The House recedes from its disagreement to the amendment of 
     the Senate with an amendment that is a substitute for the 
     House bill and the Senate amendment. The differences between 
     the House bill, the Senate amendment, and the substitute 
     agreed to in conference are noted below, except for clerical 
     corrections, conforming changes made necessary by agreements 
     reached by the conferees, and minor drafting and clerical 
     changes.

                EXPLANATION OF THE CONFERENCE AGREEMENT

            Principal Components of the Conference Agreement

       The Personal Responsibility and Work Opportunity 
     Reconciliation Act of 1996 puts in place the most fundamental 
     reform of welfare since the program's inception. It promotes 
     work over welfare and self-reliance over dependency, thereby 
     showing true compassion for those in America who need a 
     helping hand, not a handout. It takes the historic step of 
     eliminating a Federal entitlement program--Aid to Families 
     with Dependent Children--and replacing it with a block grant 
     that restores the States' fundamental role in assisting needy 
     families. It makes substantial reforms in the Food Stamp 
     Program, cracking down on fraud and abuse and applying tough 
     work standards. It reforms the Supplemental Security Income 
     [SSI] disability program to strengthen eligibility 
     requirements and eliminating incentives for coaching children 
     to misbehave so they can qualify for benefits. It makes 
     sweeping reforms relating to benefits for noncitizens, 
     strengthening the principle that immigrants come to America 
     to work, not to collect welfare benefits.
       The legislation does not abandon those Americans who truly 
     need a helping hand. It retains protections for those who 
     experience genuine and intractable hardship. Above all, it 
     recognizes the vulnerability of America's children. It 
     guarantees that they will continue to receive the support 
     they need. Indeed, by discouraging illegitimacy and promoting 
     stable families, this bill vastly improves the prospects of 
     children in welfare families. But for most, welfare should 
     mean temporary assistance for those striving to return to 
     self-sufficiency.
       The legislation is the first of three reconciliation bills 
     called for in the reconciliation directives contained in the 
     fiscal year 1997 budget resolution (H. Con. Res. 178). The 
     measure will slow the growth of Federal welfare spending, but 
     still maintain sufficient increases to protect vulnerable 
     populations. According to preliminary estimates, welfare 
     spending would grow from approximately $83 billion this year 
     to about $107 billion in 2002, excluding the effects of 
     Earned Income Credit [EIC] outlays. When EIC outlays are 
     included, the preliminary estimates show welfare spending 
     growing from about $99 billion this year to roughly $128 
     billion in 2002. The Federal Government still will spend 
     nearly $600 billion on welfare programs not counting the EIC, 
     and nearly $700 billion when the EIC is included. Either way, 
     when compared with Federal spending projections for the 
     current welfare program, this legislation will reduce the 
     Federal budget deficit by about $55 billion to $56 billion 
     over 6 years.
       The importance of these budgetary effects is matched by the 
     historic transformation of the welfare program embraced in 
     this legislation. This measure rests on five principles that 
     are the pillars of the welfare reform strategy in the 104th 
     Congress:
       Welfare Should Not Be a Way of Life. The legislation 
     assures that welfare will be a helping hand, not a lifetime 
     handout, by imposing a 5-year lifetime limit on benefits 
     (although as many as 20 percent of families may be allowed 
     exceptions for conditions of hardship).
       Work, Not Welfare. For the first time ever, able-bodied 
     welfare recipients will be required to work for their 
     benefits. At least one person in every family must be working 
     within 2 years after receiving welfare or lose benefits, and 
     States are required to have at least half of their single-
     parent welfare recipients working by 2002.
       No More Welfare for Noncitizens and Felons. Most welfare 
     (except emergency benefits) ends for most non-citizens during 
     their first 5 years in the United States. Exceptions are made 
     for refugees, persons who have worked and paid taxes in the 
     United States for 10 years, and those who have served in the 
     U.S. military. States will have the option of denying 
     Medicaid eligibility to non-citizens who enter the United 
     States after enactment. The legislation also terminates 
     benefits for fugitive felons fleeing from prosecution or 
     imprisonment or violating parole, and offers financial 
     incentives to local corrections authorities to report persons 
     incarcerated in their jails who are improperly receiving 
     welfare checks.
       Power and Flexibility to the States. The best welfare 
     solutions come from those closest to the problems--not from 
     bureaucrats in Washington. The legislation creates broad cash 
     welfare and child care block grants providing maximum 
     flexibility so that States can reform welfare in ways that 
     are appropriate for them, and can move families into jobs.
       Encouraging Personal Responsibility to Halt Rising 
     Illegitimacy Rates. As a result of the current welfare 
     system, which discourages two-parent families, today's 
     illegitimacy rate among welfare families is almost 50 percent 
     and is rising. This legislation seeks to reverse the trend by 
     boosting efforts to establish paternity and make fathers pay 
     child support. As an added incentive, States that reduce out-
     of-wedlock births will receive added cash grants.
       This legislation reforms welfare to make it more consistent 
     with fundamental American values--by rewarding work and self-
     reliance, encouraging personal responsibility, and restoring 
     a sense of hope in the future.

    Title I: Block Grant for Temporary Assistance for Needy Families


                              1. Findings

     Present law
       No provision.
     House bill
       Congress finds that marriage is the foundation of a 
     successful society and an essential institution that promotes 
     the interests of children. Promotion of responsible 
     fatherhood and motherhood is integral to successful child-
     rearing and the well-being of children. It is the sense of 
     Congress that prevention of out-of-wedlock pregnancy and 
     reduction on out-of-wedlock birth are very important 
     government interests and that the policy outlined in the 
     provisions of this title is intended to address the crisis.
     Senate amendment
       Adds that an effective strategy to combat teenage pregnancy 
     must deal with the issue of male responsibility, including 
     statutory rape culpability and prevention. Finds protection 
     of teenage girls from pregnancy as well as predatory sexual 
     behavior to be very important Government interests.
     Conference agreement
       The conference agreement follows the Senate amendment.


                2. Reference to the Social Security Act

     Present law
       No provision
     House bill
       Unless otherwise specified, any reference in this title to 
     an amendment to or repeal of

[[Page H8898]]

     a section or other provision is to the Social Security Act.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                   3. block grant to states; purpose

     Present law
       Title IV-A of the Social Security Act, which provides 
     grants to States for aid and services to needy families with 
     children (AFDC), is designed to encourage care of dependent 
     children in their own homes by enabling States to provide 
     cash aid and services, maintain and strengthen family life, 
     and help parents attain maximum self-support consistent with 
     maintaining parental care and protection.
     House bill
       Block grants for temporary assistance for needy families 
     (TANF), which replace Title IV-A of the Social Security Act, 
     are established to increase the flexibility of States in 
     operating a program designed to provide assistance to needy 
     families; end dependence on government benefits by promoting 
     job preparation, work and marriage; prevent and reduce the 
     incidence of out-of-wedlock pregnancies; and encourage the 
     formation and maintenance of two-parent families.
       This part shall not be interpreted to entitle any 
     individual or family to assistance under any State program 
     funded under this part.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


              4. eligible states--state plan requirements

     Present law
       A State must have an approved State plan for aid and 
     services to needy families containing 43 provisions, ranging 
     from single-agency administration to overpayment recovery 
     rules. State plans explain the aid and services that are 
     offered by the State. Aid is defined as money payments. For 
     most parents without a child under age 3, States must provide 
     education, work, or training under the JOBS program to help 
     needy families with children avoid long-term welfare 
     dependence. Note: work and education requirements of JOBS are 
     subject to two conditions--State resources must permit them 
     and the program must be available in the recipient's 
     political subdivision. To receive Federal funds, States must 
     share in program costs. The Federal share of costs (matching 
     rate) varies among States and is inversely related to the 
     square of State per capita income. For AFDC benefits and 
     child care, the Medicaid matching rate is used. This rate now 
     ranges from 50 percent to 78 percent among States and 
     averages about 55 percent. For JOBS activities, the rate 
     averages 60 percent; for administrative costs, 50 percent. 
     The general JOBS participation rate, which expired September 
     30, 1995, required 20 percent of employable (nonexempt) adult 
     recipients to participate in education, work, or training 
     under JOBS, in fiscal year 1995. In fiscal year 1996, at 
     least one parent in 60 percent of unemployed-parent families 
     must participate at least 16 hours weekly in an unpaid work 
     experience or other work program. States must restrict 
     disclosure of information to purposes directly connected to 
     administration of the program and to any connected 
     investigation, prosecution, legal proceeding or audit. Each 
     State must offer family planning services to all 
     ``appropriate'' cases, including minors considered sexually 
     active. State may not require acceptance of these services. 
     Regulations require that States determine need and amount of 
     eligibility on an objective and equitable basis.
     House bill
       An ``eligible State'' is a State that, during the 2-year 
     period immediately preceding the fiscal year, has submitted a 
     plan to the Secretary of HHS that the Secretary has found 
     includes a written document describing how the State will:
       1. conduct a program, designed to serve all political 
     subdivisions in the State, that provides cash assistance to 
     needy families with (or expecting) children, and that 
     provides parents with work and support services to enable 
     them to become self-sufficient;
       2. require a parent or a caretaker receiving assistance to 
     engage in work as defined by the State once the parent or 
     caretaker has received assistance for 24 months (whether or 
     not consecutive) or earlier;
       3. ensure that parents and caretakers engage in work 
     activities as described below;
       4. take such reasonable steps as the State deems necessary 
     to restrict the use and disclosure of information about 
     recipients of assistance attributable to funds provided by 
     the Federal government.
       5. no provision. (See purpose above.)
       Further, the document must:
       6. indicate whether the State intends to treat families 
     moving into the State differently; and, if so, how.
       7. indicate whether it intends to aid noncitizens.
       8. set forth objective criteria for delivery of benefits 
     and determinations of eligibility, and for fair and equitable 
     treatment, including an explanation of how it will provide 
     opportunities for adversely affected recipients to be heard 
     in a State administrative or appeal process;
       9. no provision;
       10. no provision;
       11. no provision.
     Senate amendment
       1. Same.
       2. Similar provision.
       3. Same.
       4. Same.
       5. Establish goals and take action to prevent and reduce 
     the incidence of pregnancies outside marriage, and establish 
     numerical goals for reducing the proportion of births out of 
     wedlock for calendar years 1996 through 2005.
       Further, the document must:
       6. Same.
       7. Same.
       8. outline how the State intends to determine, on an 
     objective and equitable basis, the needs of and amount of aid 
     to be provided to needy families; and, except as allowed for 
     incoming families and noncitizens (items 6 and 7) to treat 
     families of similar needs and circumstances similarly.
       9. outline how it will grant opportunity for a fair hearing 
     to anyone adversely affected or whose application is not 
     acted on promptly.
       10. require, not later than 1 year after enactment, a 
     parent or caretaker is not engaged in work or exempt from 
     work requirements and who has received assistance for more 
     than 2 months to participate in community service. States may 
     opt out of this requirement by notifying the Secretary.
       11. outline how the State will conduct a program, designed 
     to reach States 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 to include men.
     Conference agreement
       In general, the conference agreement follows the Senate 
     amendment, except that the Senate recedes on requirements 2, 
     8, and 9. Requirement 10 is modified to provide that a State 
     may opt out of this requirement by submitting a letter from 
     the Governor to the Secretary.


                   5. Eligible States--Certifications

     Present law
       States must have in effect an approved child support 
     program. States must also have an approved plan for foster 
     care and adoption assistance. States must have an income and 
     verification system covering AFDC, Medicaid, unemployment 
     compensation, food stamps, and--in outlying areas--adult cash 
     aid.
     House bill
       State plans must include the following certifications:
       1. that the State will operate a child support enforcement 
     program;
       2. that the State will operate a child protection program 
     under Title IV-B (child welfare services and family 
     preservation);
       3. specifying which State agency or agencies will 
     administer and supervise the State plan, and assurances that 
     local governments and private sector organizations have been 
     consulted and have had an opportunity to submit comments on 
     the plan; and
       4. that the State will provide Indians with equitable 
     access to assistance.
       5. no provision.
       6. no provision.
     Senate amendment
       1. Same.
       2. that the State will operate a foster care and adoption 
     assistance program under Title IV-E and ensure medical 
     assistance for the children;
       3. Same.
       4. Same.
       5. that the State has established standards to ensure 
     against fraud and abuse.
       6. that the State has established and is enforcing 
     standards and procedures to screen for and identify 
     recipients with a history of domestic violence, will refer 
     them to counseling and supportive services, and will waive 
     program requirements that would make it more difficult for 
     these persons to escape violence.
     Conference agreement
       The conference agreement generally follows the Senate 
     amendment, except that the certification that the State 
     establish and enforce standards and special procedures 
     regarding recipients with a history of domestic violence is 
     made a State option.


     6. Eligible States--Public Availability of State Plan Summary

     Present law
       Federal regulations require that State program manuals and 
     other policy issuances, which reflect the State plan, be 
     maintained in the State office and in each local and district 
     office for examination on regular workdays.
     House bill
       The State shall make available to the public a summary of 
     the State plan.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


              7. Grants to States--Family Assistance Grant

     Present law
       AFDC entitles States to Federal matching funds. Current law 
     provides permanent authority for appropriations without limit 
     for

[[Page H8899]]

     grants to States for AFDC benefits, administration, and AFDC-
     related child care. Over the years, because of court rulings, 
     AFDC has evolved into an entitlement for qualified 
     individuals to receive cash benefits. In general, States must 
     give AFDC to all persons whose income and resources are below 
     State-set limits if they are in a class or category eligible 
     under Federal rules.
     House bill
       Each eligible State and Territory is entitled to receive a 
     grant from the Secretary for each of 6 fiscal years (1996 
     through 2001) in an amount equal to the State family 
     assistance grant for the fiscal year.
       A State's family assistance grant is equal to the highest 
     of former Federal payments to the State for AFDC benefits, 
     AFDC Administration, Emergency Assistance, and JOBS during 
     (1) fiscal years 1992 through 1994, on average; (2) fiscal 
     year 1994 plus, under certain circumstances, 85 percent of 
     increased fiscal year 1995 spending for emergency assistance, 
     or (3) fiscal year 1995.
       If a State fails to make qualified State expenditures for 
     eligible families under all State programs equal to at least 
     75 percent of its fiscal year 1994 spending level (or at 
     least 80 percent, if the State fails to meet its mandatory 
     work requirements) for AFDC benefits, AFDC Administration, 
     Emergency Assistance, JOBS, AFDC-related child care, and at-
     risk child care, its family assistance grant is reduced by 
     the shortfall (see the discussion of penalties below).
     Senate amendment
       Same, except raises required State expenditures to 80 
     percent of fiscal year 1994 level.
     Conference agreement
       The conference agreement follows the House bill.


8. Grants to States--Grant to Reward States that Reduce Out-of-wedlock 
                                 Births

     Present law
       No provision.
     House bill
       For each fiscal year beginning with 1998, a State's grant 
     amount is increased by 5 or 10 percent if the State 
     ``illegitimacy ratio'' is 1 or 2 percentage points, 
     respectively, lower in that year than its 1995 illegitimacy 
     ratio. Only States in which the rate of abortion falls below 
     the 1995 level are eligible for these additional grants.
       The term ``illegitimacy ratio'' means, during a fiscal 
     year, the number of out-of-wedlock births that occurred in 
     the State divided by the number of births. In calculating 
     grants, the Secretary must disregard any difference in 
     illegitimacy ratios or abortion rates attributable to a 
     change in State methods of reporting data.
     Senate amendment
       Follows the House bill, except that for each of 5 fiscal 
     years (1999 through 2003) the Secretary shall make a grant of 
     up to $20 million for each of the 5 States that demonstrate 
     the greatest decrease in out-of-wedlock births during the 
     most recent 2-year period for which the information is 
     available. If fewer than 5 States are eligible, the amount of 
     such grants shall be $25 million.
     Conference agreement
       The conference agreement follows the Senate amendment, with 
     the modification that funds are available between 1999 and 
     2002.


 9. Grants to States--Supplemental Grant for Population Increases and 
         Low Federal Spending Per Poor Person in Certain States

     Present Law
       There is no adjustment for population growth. Instead, 
     current law provides unlimited matching funds. When AFDC 
     enrollment climbs, Federal funding automatically rises.
     House bill
       Subject to the eligibility criteria below, each qualifying 
     State (for purposes of this section, the term ``State'' is 
     limited to the 50 States and the District of Columbia) is 
     entitled to receive from the Secretary supplemental grants to 
     assist in making cash welfare payments for 4 years, fiscal 
     years 1997-2000. For fiscal year 1997 the supplemental grant 
     equals 2.5 percent of Federal payments to the qualifying 
     State during fiscal year 1994 for AFDC benefits, AFDC 
     Administration, Emergency Assistance, JOBS and AFDC-related 
     child care. For fiscal years 1998 through 2000, each 
     qualifying State is entitled to receive an amount equal to 
     the supplemental grant for the immediately preceding year 
     plus, if it continues to meet the eligibility criteria below, 
     an annual increase. States that no longer meet the 
     qualification criteria are entitled to receive the prior 
     year's grant without increase. A State is a qualifying State 
     for a fiscal year if average Federal welfare spending per 
     poor person is less than the national average and State 
     population growth exceeds the average for all States. States 
     must qualify during fiscal year 1997 in order to qualify 
     during later years. Certain States (i.e. those in which 
     Federal welfare spending per poor person for fiscal year 1994 
     was less than 35 percent of the fiscal year 1994 national 
     average or in which population has increased by more than 10 
     percent from April 1, 1990 to July 1, 1994) are deemed to 
     qualify for supplemental grants in each year between fiscal 
     year 1997 and 2000. A total of $800 million is appropriated 
     for this purpose. If this sum is insufficient for full 
     supplemental grants for all qualifying States, pro rata 
     reductions will be made. (p. 244)
     Senate amendment
       Same except for change in years of possible supplemental 
     grants: fiscal years 1998 through 2001 (instead of 1997 
     through 2000). States must qualify during fiscal year 1998 in 
     order to do so in later years.
     Conference agreement
       The conference agreement follows the Senate amendment.


     10. grants to states--bonus to reward high performance states

     Present law
       No provision.
     House bill
       Certain ``high performing'' States (i.e. those most 
     successful in achieving the purposes of the block grant 
     program) are entitled to receive additional payments of up to 
     five percent of their State family assistance grant. The 
     formula for measuring State performance shall be developed by 
     the Secretary in consultation with the National Governors' 
     Association and the American Public Welfare Association. A 
     total of $0.5 billion is appropriated for high performance 
     bonuses to States during 5 fiscal years, 1999 through 2003, 
     and average annual performance bonuses are to equal $100 
     million.
       Note.--In addition, required maintenance-of-effort spending 
     is to be reduced for States that achieve performance scores 
     above a threshold set by the Secretary.
     Senate amendment
       Appropriates twice as much money for high performance 
     bonuses--$1 billion--and provides that average annual bonuses 
     are to equal $175 million for fiscal years 1999 through 2002 
     and $300 million for fiscal year 2003.
     Conference agreement
       The conference agreement follows the Senate amendment 
     regarding funding (total of $1 billion) and follows the House 
     bill regarding the criteria for awarding bonuses to ``high 
     performance'' States. The provision allowing certain high 
     performance States to meet a lower maintenance of effort 
     requirement is dropped (see below).


   11. grants to states--contingency fund for state welfare programs

     Present law
       No provision. Current law provides unlimited matching 
     funds.
     House bill
       To assist States (for purposes of this section, the term 
     ``State'' is limited to the 50 States and the District of 
     Columbia) with increased welfare needs, the House proposal 
     establishes a contingency fund for matching grants and 
     appropriates up to $2 billion over a total of 5 fiscal years 
     (1997 through 2001) for the fund. Eligible States may receive 
     contingency fund payments totaling up to 20 percent of their 
     annual family assistance grant in any single year (in any 
     single month, States cannot receive more than 1/12 of 20 
     percent of the annual family assistance grant). States are to 
     submit requests for payment of contingency funds, and the 
     Secretary of the Treasury must make payments to eligible 
     States in the order in which requests are received.
       States are eligible to receive payments if State 
     unemployment is high (at or above 6.5 percent in the most 
     recent three-month period) and rising relative to previous 
     years (at least 10 percent above the comparable level in 
     either or both of two preceding years). States also are 
     eligible to receive payments if food stamp participation in 
     the State in the most recent three-month period has risen at 
     least 10 percent from the average monthly number of 
     recipients who would have participated in the comparable 
     quarter of fiscal year 1994 or fiscal year 1995, as 
     determined by the Secretary of Agriculture, if amendments 
     made by this proposal to the food stamp program (including 
     optional food stamp block grant provisions) and to 
     eligibility of noncitizens had been in effect throughout 
     fiscal year 1994 and 1995. States must maintain 100 percent 
     of historic State welfare spending (generally, the amount of 
     State funds spent in fiscal year 1994 for AFDC benefits and 
     administration, AFDC-related child care, at-risk child care, 
     Emergency Assistance, and JOBS) during years in which 
     contingency fund payments are made, or repay an amount 
     reflecting the shortfall. States must share in the cost of 
     contingency funds at their fiscal year 1995 Medicaid matching 
     rate. To smooth their transition to recovery, States that 
     have been receiving contingency fund payments will continue 
     to receive payments for one month after they no longer meet 
     the criteria described above.
     Senate amendment
       Contingency fund of $2 billion covers 4 fiscal years (1998 
     through 2001) rather than 5. (Because of the Byrd rule, the 
     provision specifying that the CBO baseline is to assume that 
     no grant will be made after 2001 is deleted.)
     Conference agreement
       The conference agreement follows the House bill, with the 
     modification that, notwithstanding section 257(b)(2) of the 
     Balanced Budget and Emergency Deficit Control Act of 1985, 
     the baseline shall assume that no grant shall be made under 
     this subsection after fiscal year 2001.


                12. grants to states--work program grant

     Present law
     House bill
       To assist States in meeting the work requirements, eligible 
     States may receive funds from a supplemental grant for the 
     operation of work programs. To be eligible, a

[[Page H8900]]

     State's total expenditures for the fiscal year to meet work 
     participation requirements must exceed its total jobs 
     spending for fiscal year 1994, its TANF work programs must be 
     coordinated with job training programs of Title II of the Job 
     Training Partnership Act (JTPA), or its successor, and the 
     State must need the extra funds to meet TANF work 
     requirements or certify that it intends to exceed 
     participation requirements. The Secretary is to issue 
     regulations for equitable distribution of the grants. For 
     these supplemental grants, $3 billion is authorized for 
     fiscal year 1999 (amounts appropriated are authorized to 
     remain available until spent).
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the Senate amendment.


                     13. use of grants--in general

     Present law
       AFDC and JOBS funds are to be used in conformity with State 
     plans. A State may replace a caretaker relative with a 
     protective payee or a guardian or legal representative.
     House bill
       Grants may be used in any manner reasonably calculated to 
     accomplish the purposes of this title, including activities 
     now authorized under Titles IV-A and IV-F of the Social 
     Security Act, or to provide low-income households with 
     assistance in meeting home heating and cooling costs.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


        14. use of grants--limitation on administrative spending

     Present law
       No provision.
     House bill
       States may not use more than 15 percent of the family 
     assistance grant for administrative purposes. However, this 
     cap does not apply to spending for information technology and 
     computerization needed to implement the tracking and 
     monitoring required by this title.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 15. use of grants--recipients moving into the state from another state

     Present law
       The Social Security Act forbids the Secretary to approve a 
     plan that denies AFDC eligibility to a child unless he has 
     resided in the State for 1 year. The U.S. Supreme Court has 
     invalidated some State laws that withheld aid from persons 
     who had not resided there for at least 1 year. It has not 
     ruled on the question of paying lower amounts of aid for 
     incoming residents.
     House bill
       States may impose program rules and benefit levels of the 
     State from which a family moved if the family has lived in 
     the State for fewer than 12 months.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                  16. use of grants--transfer of funds

     Present law
       No provision.
     House bill
       States may transfer up to 30 percent of funds paid under 
     this section to carry out a State program under Part B (child 
     welfare and family preservation) or Part E (foster care and 
     adoption assistance), the social services block grant, and 
     the child care and development block grant. Of the 30 percent 
     that may be transferred, not more than one-third (that is, 
     not more than 10 percent of the total block grant) may be 
     transferred into the Social Services Block Grant. Amounts 
     transferred to the Social Services Block Grant must be spent 
     on programs and services for children or their families.
     Senate amendment
       States may transfer up to 30 percent of funds only to the 
     child care and development block grant.
     Conference agreement
       The conference agreement follows the House bill, except 
     that the provision allowing transfers into the child 
     protection block grant, which was deleted, is dropped. The 
     conference agreement adds the modification that funds 
     transferred into the Title XX Social Services Block Grant 
     must be spent on families with incomes that do not exceed 200 
     percent of the poverty level (as determined annually by the 
     Federal Office of Management and Budget).


                17. Use of Grants--Reservation of Funds

     Present law
       No provision.
     House bill
       A State may reserve amounts paid to the State for any 
     fiscal year for the purpose of providing assistance under 
     this part. Reserve funds can be used in any fiscal year.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


18. Use of Grants--Authority to Operate an Employment Placement Program

     Present law
       Required JOBS services include job development and job 
     placement. The State agency may provide services directly or 
     through arrangements or under contracts with public agencies 
     or private organizations.
     House bill
       States may use a portion of the family assistance grant to 
     make payments (or provide job placement vouchers) to State-
     approved agencies that provide employment services to 
     recipients of cash aid.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


19. Use of Grants--Implementation of Electronic Benefit Transfer System

     Present law
       Regulations permit States to receive Federal reimbursement 
     funds (50 percent administrative cost- sharing rate) for 
     operation of electronic benefit systems. To do so, States 
     must receive advance approval from HHS and must comply with 
     automatic data processing rules.
     House bill
       States are encouraged to implement an electronic benefit 
     transfer (EBT) system for providing assistance under the 
     State program funded under this part, and may use the grant 
     for such purpose. (The food stamp title of the bill exempts 
     any EBT system distributing need-tested benefits established 
     or administered by a State from Federal Reserve Board rules 
     known collectively as ``Regulation E.'' The most important 
     Regulation E provision requires that lost/stolen benefits be 
     restored; individuals with accounts are responsible only for 
     the first $50 of any loss, when reported in a timely 
     fashion.)
     Senate amendment
       Same (in Miscellaneous chapter).
     Conference Agreement
       The conference agreement follows the House bill. Conferees 
     also agreed to put comprehensive language on EBT and 
     Regulation E in the food stamps section of this legislation.


           20. Use of Grants--Individual Development Accounts

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       Authorizes a State to use TANF funds to fund individual 
     development accounts established by recipients for specified 
     purposes: postsecondary educational expenses, first-home 
     purchase, business capitalization. Terms include: 
     contributions must be from earned income, withdrawals would 
     be allowed only for the above purposes, and Federal benefit 
     programs must disregard funds in the account in determining 
     eligibility and amount of aid.
     Conference agreement
       The conference agreement follows the Senate amendment.


                     21. Administrative Provisions

     Present law
       The Secretary pays AFDC funds to the State on a quarterly 
     basis.
     House bill
       The Secretary shall make each grant payable to a State in 
     quarterly installments. The Secretary is to estimate each 
     State's payment on the basis of a report about expected 
     expenditures from the State and to certify to the Secretary 
     of the Treasury the amount estimated, adjusted if needed for 
     overpayments or underpayments for any past quarter. The 
     Secretary must notify States not later than three months in 
     advance of any quarterly payment that will be reduced to 
     reflect payments made to Indian tribes in the State. Under 
     certain circumstances, overpayments to individuals no longer 
     receiving temporary family assistance will be collected from 
     Federal income tax refunds and repaid to affected States.
     Senate amendment
       Same, except the provision regarding ``Collection of State 
     Overpayments to Families from Federal Tax Refunds'' was 
     deleted because of the Byrd rule.
     Conference agreement
       The conference agreement follows the Senate amendment.


              22. Federal Loans for State Welfare Programs

     Present law
       No provision. Instead, current law provides unlimited 
     matching funds.
     House bill
       The proposal establishes a $1.7 billion revolving loan fund 
     from which eligible States may borrow funds to meet the 
     purposes of this title. States that have been penalized for 
     misspending block grant funds as determined by an audit are 
     ineligible for loans. Loans are to mature in 3 years, at the 
     latest, and the cumulative amount of all loans to a

[[Page H8901]]

     State during fiscal years 1997 through 2001 cannot exceed 10 
     percent of its basic block grant. The interest rate shall 
     equal the current average market yield on outstanding U.S. 
     securities with a comparable remaining maturity length. 
     States face penalties for failing to make timely payments on 
     their loan.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


    23. Mandatory Work Requirements--Participation Rate Requirements

     Present law
       The following minimum percentage of nonexempt AFDC families 
     must participate in JOBS:


                                                     Minimum percentage
Fiscal year:
  1995...............................................................20
  1996 and thereafter (no requirement)................................0
       The following minimum percentages of two-parent families 
     receiving cash assistance must participate in specified work 
     activities:


                                                     Minimum percentage
Fiscal year:
  1995...............................................................50
  1996...............................................................60
  1997...............................................................75
  1998 (last year)...................................................75
  1999 and thereafter (no requirement)................................0
     House bill
       The following minimum percentages of all families receiving 
     assistance funded by the family assistance grant (except 
     those with a child under 1, if exempted by the State) must 
     participate in work activities:


                                                     Minimum percentage
Fiscal year:
  1997...............................................................25
  1998...............................................................30
  1999...............................................................35
  2000...............................................................40
  2001...............................................................45
  2002 or thereafter 50................................................

       The following minimum percentages of two-parent families 
     receiving cash assistance must participate in specified work 
     activities:


                                                     Minimum percentage
Fiscal year:
  1996...............................................................50
  1997...............................................................75
  1998...............................................................75
  1999 and thereafter 90...............................................
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


  24. Mandatory Work Requirements--Calculation of Participation Rates

     Present law
       Participation rates for all families are calculated for 
     each month. A State's rate, expressed as a percentage, equals 
     the number of actual JOBS participants divided by the number 
     of AFDC recipients required to participate (nonexempt from 
     JOBS). In calculating a State's overall JOBS participation 
     rate, a standard of 20 hours per week is used. The welfare 
     agency is to count as participants the largest number of 
     persons whose combined and averaged hours in JOBS activities 
     during the month equal 20 per week.
       Participation rates for two-parent families for a month 
     equal the number of parents who participate divided by the 
     number of principal earners in AFDC-UP families (but 
     excluding families who received aid for two months or less, 
     if one parent engaged in intensive job search).
     House bill
       1. The participation rate (for all families and for two-
     parent families) for a State for the fiscal year is the 
     average of the participation rates for each month in the 
     fiscal year. The monthly participation rate for a State is a 
     percentage obtained by dividing the number of families 
     receiving assistance that include an adult who is engaged in 
     work by the number of families receiving assistance (not 
     counting those subject to a recent sanction for refusal to 
     work).
       2. The required participation rate for a year is to be 
     adjusted down one percentage point for each percentage point 
     that the average monthly caseload is below fiscal year 1995 
     levels, unless the Secretary finds that the decrease was 
     required by Federal law or results from changes in State 
     eligibility criteria (which must be proved by the Secretary). 
     The Secretary is to prescribe regulations for this 
     adjustment.
       3. States have the option of counting individuals receiving 
     assistance under a tribal family assistance plan towards the 
     State work participation requirement.
       4. States have the option of not requiring single parents 
     of children under age one to engage in work and may disregard 
     these parents in determining work participation rates.
     Senate amendment
       1. Same.
       2. Same.
       3. Same.
       4. Allows a parent to receive this exemption only for a 
     total of 12 months, whether or not consecutive.
     Conference agreement
       The conference agreement follows the Senate amendment, with 
     a modification. For item 1, the conference agreement includes 
     minor heads of households along with adults in the 
     calculation of State work participation rates (in both the 
     numerator and denominator of the calculation).


  25. Mandatory Work Requirements--Optional Individual Responsibility 
                                  Plan

     Present law
       States must make an initial assessment of the educational, 
     child care, and other supportive service needs, and of the 
     skills and employability of each JOBS participant. In 
     consultation with the participant, the agency shall develop 
     an employability plan for the participant, which shall not be 
     considered a contract. After these steps, the State agency 
     may require the participant to negotiate and enter into an 
     agreement that specifies matters such as the participant's 
     obligations, duration of participation, and services to be 
     provided.
     House bill
       States are required to make an initial assessment of the 
     skills, work experience, and employability of each recipient 
     of assisting under the block grant who is over age 17 or has 
     not completed high school or the equivalent, and is not 
     attending secondary school. States may develop individual 
     responsibility plans setting forth employment goals, 
     obligations of the individual, and services the State will 
     provide. In addition to other penalties that may apply, 
     States may reduce assistance to families that include an 
     individual who fails to comply with the terms of such plans.
     Senate amendment
       Requires States to require TANF recipient families to enter 
     into a personal responsibility agreement, as developed by the 
     State. The agreement means a binding contract. It is to 
     include a negotiated individual time limit for benefit 
     eligibility, outline steps the family and State will take to 
     move the family to self-sufficiency, provide for sanctions if 
     the individual fails to sign the agreement or comply with its 
     terms and shall be invalid if the State fails to comply with 
     its terms.
     Conference agreement
       The conference agreement follows the House bill.


            26. Mandatory Work Requirements--Engaged in Work

     Present law
       Not relevant. (As discussed below, required activities in 
     State JOBS programs are education, jobs skills training, job 
     readiness, job development and job placement and two of these 
     four: job search, on-the-job training, work supplementation, 
     and community work experience, or other approved work 
     experience. In general, to be counted as a JOBS participant, 
     a person must be engaged in a JOBS activity for an average of 
     20 hours weekly.)
     House bill
       To be counted as engaged in work for a month, a recipient 
     must be participating for at least the minimum average number 
     of hours per week shown in the table below in one or more of 
     these activities: unsubsidized employment, subsidized 
     (private or public) employment, work experience, on-the-job 
     training, job search and job readiness assistance, community 
     service programs, or vocational educational training (12 
     months maximum).


                                           Minimum average weekly hours
Fiscal year:
  1996...............................................................20
  1997...............................................................20
  1998...............................................................20
  1999...............................................................25
  2000...............................................................30

       Exceptions to the above table: (1) to be considered engaged 
     in work, an adult in a two-parent family must make progress 
     in work activities at least 35 hours per week, with not fewer 
     than 30 hours attributable to the work activities cited 
     above; (2) an individual in job search may be counted as 
     engaged in work for up to 8 weeks, no more than 4 of which 
     may be consecutive; (3) a State may count a single parent 
     with a child under age 11 as engaged in work for a month if 
     the parent works an average of 20 hours weekly in all years 
     (the hourly minimum does not rise for these parents); (4) not 
     more than 20 percent of adults in all families and in two-
     parent families determined to be engaged in work in the State 
     for a month may meet the work requirement through 
     participation in vocational educational training; (5) teen 
     parents (under age 20) who head their households are 
     considered to be engaged in work if they maintain 
     satisfactory attendance at secondary school or participate in 
     work-related education for at least the minimum average 
     number of hours in the table; and (6) no provision.
     Senate amendment
       Changes list of work activities by substituting 
     ``educational training (not to exceed 24 months with respect 
     to any individual)'' for ``vocational educational training 
     (not to exceed 12 months with respect to any individual).'' 
     (Also, as the table below shows, required weekly hours of 
     work rise to 35 in fiscal year 2002 and thereafter.)


                                           Minimum average weekly hours
Fiscal year:
  1996...............................................................20

[[Page H8902]]

  1997...............................................................20
  1998...............................................................20
  1999...............................................................25
  2000...............................................................30
  2001...............................................................30
  2002 and thereafter................................................35
       Exceptions to the above table: (1) an adult in a two-parent 
     family is considered engaged in work if he/she works at least 
     35 hours weekly, with at least 30 hours attributable to one 
     of the activities cited above, and, if the family receives 
     federally-funded child care, the second parent makes 
     satisfactory progress for at least 20 hours weekly in 
     employment, work experience, on-the-job training, or 
     community service; (2) an individual in job search may be 
     counted as engaged in work for only 4 weeks (12 weeks if the 
     State unemployment rate exceeds the national average); (3) 
     same as House provision; (4) not more than 30 percent of 
     adults in all families and in 2-parent families may meet the 
     work activity requirement through participation in vocational 
     educational training (note: bill language refers to 
     vocational educational training, although references 
     elsewhere are to educational training--see above); (5) teen 
     parents (under age 20) who head their households are 
     considered to be engaged in work if they maintain 
     satisfactory attendance at secondary school or the equivalent 
     during the month or participate in education directly related 
     to employment for at least the minimum average number of 
     hours per week in the table; and (6) a person participating 
     in a community service program may be treated as being 
     engaged in work if she provides child care services to 
     another participant in the community service program for the 
     period of time each week determined by the State.
     Conference agreement
       The conference agreement follows the house bill and the 
     Senate amendment as follows:
       First, the conference agreement follows the House bill 
     regarding vocational educational training as a work activity 
     which is creditable for up to 12 months.
       Second, the conference agreement follows the House bill 
     regarding the minimum average weekly hours of work required.
       Finally, regarding exceptions to the work hour 
     requirements, the conference agreement: (1) follows the 
     Senate amendment on hours of work for adults in a 2-parent 
     family, with the modification exempting the second parent, if 
     such parent is disabled or caring for a severely disabled 
     child; (2) follows the Senate amendment regarding job search, 
     with the modification that a total of 6 weeks is allowed, of 
     which not more than 4 may be consecutive (and, in the case of 
     States in which the unemployment rate is at least 50 percent 
     above the national average, a total of 12 weeks is allowed); 
     in addition an individual may count a partial week of job 
     search as a full week of work limited to one occasion; (3) 
     follows the House bill in permitting States to count certain 
     single parents as engaged in work if the parent works for 20 
     hours per week, with the modification that the parent's child 
     must be under age 6 (however, the conference agreement 
     follows the Senate amendment regarding the requirement that 
     States may not disregard such an adult in calculating their 
     work rates); (4) follows the House bill regarding the 
     limitation on the number of parents countable if in 
     vocational education; (5) follows the Senate amendment on 
     teen parents and education, with the modification that teen 
     parents meeting the work requirement in this way are counted 
     towards the 20 percent limitation on vocational education 
     (see above); and (6) follows the Senate amendment on persons 
     providing child care, with the clarification that such hours 
     spent providing child care count towards fulfillment of the 
     hours of work required.


        27. Mandatory Work Requirements--Work Activities Defined

     Present law
       JOBS programs must include specified educational activities 
     (high school or equivalent education, basic and remedial 
     education, and education for those with limited English 
     proficiency); job skills training, job readiness activities, 
     and job development and placement. In addition, States must 
     offer at least two of these four items: group and individual 
     job search; on-the-job training; work supplementation or 
     community work experience program (or another work experience 
     program approved by the HHS Secretary). The State also may 
     offer postsecondary education in ``appropriate'' cases.
     House bill
       ``Work activities'' are defined as unsubsidized employment, 
     subsidized private sector employment, subsidized public 
     sector employment, work experience if sufficient private 
     sector employment is not available, on-the-job training, job 
     search and job readiness assistance, community service 
     programs, vocational educational training (1 year maximum), 
     jobs skills training directly related to employment, 
     education directly related to employment in the case of a 
     recipient who lacks a high school diploma or equivalency, and 
     satisfactory attendance at secondary school for a recipient 
     who has not completed high school.
     Senate amendment
       Same as House provision except for last two items in list 
     of ``work activities.'' These activities (work-related 
     education and secondary school attendance) are creditable as 
     ``work'' only for persons under age 20.
     Conference agreement
       The conference agreement follows the House bill, with the 
     modification to include the provision of child care services 
     to an individual who is participating in a community service 
     program.


     28. Mandatory Work Requirements--Penalties Against Individuals

     Present law
       For failure to meet JOBS requirements without good cause, 
     AFDC benefits are denied to the offending parent and payments 
     for the children are made to a third party. In a two-parent 
     family, failure of one parent to meet JOBS requirements 
     without good cause results in denial of benefits for both 
     parents (unless the other parent participates) and third-
     party payment on behalf of the children. Repeated failures to 
     comply bring potentially longer penalty periods.
     House bill
       If an adult recipient refuses to engage in required work, 
     the State shall reduce the amount of assistance to the family 
     pro rata (or more, at State option) with respect to the 
     period of work refusal, or shall discontinue aid, subject to 
     good cause and other exceptions that the State may establish. 
     In addition, if block grant recipients fail to meet any of 
     the work requirements, States may terminate their coverage 
     under the Medicaid program. A State may not penalize a single 
     parent caring for a child under age eleven for refusal to 
     work if the parent proves a demonstrated inability to obtain 
     needed child care for specified reasons.
     Senate amendment
       Same as House provision except that Senate does not provide 
     that States may end Medicaid for block grant recipients who 
     fail to meet any of the work requirements in the act.
     Conference agreement
       The conference agreement follows the House bill with the 
     modification that, if benefits are terminated under the work 
     requirements of section 407 of this part, States may end 
     Medicaid eligibility for adults made ineligible, but not 
     children in the family. In addition, modifies the House bill 
     and Senate amendment so that States may not penalize a single 
     parent caring for a child under age 6 for refusal to work if 
     the parent proves a demonstrated inability to obtain needed 
     child care for specified reasons.


  29. Mandatory Work Requirements--Nondisplacement in Work Activities

     Present law
       Under JOBS law, no work assignment may displace any 
     currently employed worker or position (including partial 
     displacement such as a reduction in hours of non-overtime 
     work, wages, or employment benefits). Nor may a JOBS 
     participant fill a position vacant because of layoff or 
     because the employer has reduced the workforce with the 
     effect of creating a position to be subsidized.
     House bill
       In general, an adult in a family receiving IV-A assistance 
     may fill a work vacancy. However, no adult in a Title IV-A 
     work activity shall be employed or assigned when another 
     person is on layoff from the same or a substantially 
     equivalent job, or when the employer has terminated the 
     employment of a regular worker or otherwise caused an 
     involuntary reduction of its workforce in order to fill the 
     vacancy thus created with a subsidized worker. This provision 
     does not preempt or supersede any State or local law 
     providing greater protection from displacement.
     Senate amendment
       In general, an adult in a family receiving IV-A assistance 
     may fill a work vacancy. However, no IV-A work assignment may 
     displace a currently employed worker (including any partial 
     displacement such as a reduction in hours of overtime work, 
     wages, or employment benefits), impair an existing contract 
     or collective bargaining agreement, or result in ending a 
     regular worker's employment. States must establish and 
     maintain a grievance procedure, including hearing 
     opportunity, for resolving complaints and providing remedies 
     for violations. This section does not preempt or supersede 
     any State or local law providing greater protection from 
     displacement.
     Conference agreement
       The conference agreement follows the House bill, with the 
     modification to include a requirement that States establish a 
     grievance procedure for workers adversely affected pursuant 
     to this section.


   30. Mandatory Work Requirements--Sense of the Congress that State 
       Should Place a Priority on Placing Certain Parents in Work

     Present law
       As a condition of receiving full matching funds, a State 
     must use 55 percent of its JOBS spending for these target 
     groups: persons who have received aid for any 36 of the 60 
     preceding months, parents under age 24 who failed to complete 
     high school, and parents whose youngest child is within 2 
     years of becoming ineligible for aid (i.e., whose youngest 
     child is, usually, at least 16).
     House bill
       It is the sense of Congress that States should give highest 
     priority to requiring adults in two-parent families and 
     adults in single-parent families with children that are

[[Page H8903]]

     older than preschool age to engage in work activities.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


  31. Mandatory Work Requirements--Sense of the Congress that States 
Should Impose Certain Requirements on Noncustodial, Nonsupporting Minor 
                                Parents

     Present law
       No provision.
     House bill
       It is the sense of the Congress that 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.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


32. Mandatory Work Requirements--Review of Implementation of State Work 
                                Programs

     Present law
       No provision.
     House bill
       During fiscal year 1999, the Committees on Ways and Means 
     and Finance must hold hearings to review the implementation 
     by States of the mandatory work requirements, and may 
     introduce legislation to remedy any problems found.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the House bill.


    33. Prohibitions; Requirements--Families with No Minor Children

     Present law
       Only families with dependent children (under age 18, or 19 
     at State option if the child is still in secondary school or 
     in the equivalent level of vocational or technical training) 
     can participate in the program.
     House bill
       Only families with a minor child (who resides with a 
     custodial parent or other adult caretaker relative of the 
     child) or a pregnant individual may receive assistance under 
     this part.
     Senate amendment
       Adds prohibition against assistance to a family in which an 
     adult already has received 60 months of assistance 
     attributable to Federal funds. See also item 41.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment. Conferees note that the 5-year time limit 
     on benefits applies only to benefits provided using Temporary 
     Assistance for Needy Families (TANF) Block Grant funds. Other 
     Federal funds, such as Title XX Social Services Block Grants 
     and support through the expanded Child Care and Development 
     Block Grant, are not restricted for families that have 
     already received 5 years of TANF support.


   34. Prohibitions; Requirements--No Additional Cash Assistance for 
             Children Born to Families Receiving Assistance

     Present law
       No provision.
     House bill
       1. Block grant funds may not be used to provide cash 
     benefits for a child born to a recipient of cash welfare 
     benefits or an individual who received cash benefits at any 
     time during the 10-month period ending with the birth of the 
     child. This prohibition does not apply to children born as a 
     result of rape or incest. Block grant funds can be used to 
     provide noncash (voucher) assistance for particular goods and 
     services suitable for the care of the child.
       2. States that pass a law specifically exempting their own 
     programs from this national rule may use Federal funds to 
     increase cash benefits for families that have additional 
     children while on welfare.
       3. If a State has a family cap policy under a section 1115 
     waiver on the date of enactment, it may continue terms of 
     those family caps.
     Senate amendment
       1. Same family cap provision except that Senate amendment 
     does not explicitly provide for use of block grant funds to 
     give voucher assistance for care of the excluded child. (This 
     provision was deleted because of the Byrd rule.)
       2. Same.
       3. Same provision, but adds permission for States to 
     continue terms of family caps resulting from State law passed 
     within 2 years of enactment.
     Conference agreement
       This provision was deleted due to the Byrd rule.


    35. Prohibitions; Requirements--Noncooperation in Child Support

     Present law
       As a condition of eligibility, applicants or recipients 
     must cooperate in establishing paternity of a child born out-
     of-wedlock, in obtaining support payments, and in identifying 
     any third party who may be liable to pay for medical care and 
     services for the child.
     House bill
       The State must stop paying the parent's share of the family 
     welfare benefit if the parent fails to cooperate in 
     establishing paternity, or in establishing, modifying or 
     enforcing a child support order, and the individual does not 
     qualify for a good cause or other exception; the State may 
     deny benefits to the entire family for the parent's failure 
     to cooperate.
     Senate amendment
       If a parent fails to cooperate in establishing paternity or 
     in establishing, modifying, or enforcing a child support 
     order, and the individual does not qualify for a good cause 
     or other exception, the State shall reduce the family's 
     benefit by at least 25 percent. It may reduce the benefit to 
     zero.
     Conference agreement
       The conference agreement follows the Senate amendment.


   36. Prohibitions; Requirements--Failure to Assign Certain Support 
                          Rights to the State

     Present law
       As a condition of AFDC eligibility, applicants must assign 
     child support and spousal support rights to the State.
     House bill
       Block grant funds may not be used to provide cash benefits 
     to a family with an adult who has not assigned to the State 
     rights to child support or spousal support.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 37. Prohibitions; Requirements--School Attendance Required for Adults 
                           without a Diploma

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       Prohibits any TANF-funded assistance to the family of an 
     adult older than 20 but younger than 51 who has received IV-A 
     aid or food stamps if the person does not have, or is not 
     working toward, a secondary school diploma or its equivalent. 
     An exception is made for a person determined to lack the 
     capacity to successfully complete the course of study.
     Conference agreement
       The conference agreement follows the Senate amendment.


 38. Prohibitions; Requirements--School Attendance Required for Minor 
                                Children

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       Prohibits any TANF-funded aid to a family that includes an 
     adult who has received IV-A benefits or food stamps unless 
     the adult ensures that the family's minor dependent children 
     attend school as required by the law of their State.
       Provides that a State shall not be prohibited from 
     sanctioning a family with an adult who fails to meet this 
     requirement.
     Conference agreement
       The conference agreement follows the Senate amendment.


 39. Prohibitions; Requirements--Unwed Minor Parent Not Attending High 
                   School or Not Living with an Adult

     Present law
       States may require unwed parents under age 18 to live with 
     an adult in order to receive AFDC. They must require a 
     custodial parent who is under 20 years old and who has not 
     completed high school to participate in an educational 
     activity under the JOBS program.
     House bill
       States have the option of using Federal funds to provide 
     cash welfare payments to unmarried minors only under 
     specified conditions. States may not use Federal family 
     assistance grant funds to provide assistance to unwed parents 
     under age 18 who have a child at least 12 weeks of age and 
     did not complete high school unless they attend high school 
     or an alternative educational or training program. States may 
     not use Federal funds to provide assistance to unmarried 
     parents under age 18 unless they live with a parent or in 
     another adult-supervised setting; States may, under certain 
     circumstances, use Federal funds to assist teen parents in 
     locating and providing payment for a second chance home or 
     other adult-supervised living arrangement.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


            40. Prohibitions; Requirements--Medical Services

     Present law
       States must assure that family planning services are 
     offered to all AFDC recipients who request them. (The 
     Secretary is to reduce AFDC payments by 1 percent for failure

[[Page H8904]]

     to offer and provide family planning services to those 
     requesting them.)
     House bill
       Federal family assistance grants may not be used to provide 
     medical services; Federal funds may, however, be used to 
     provide prepregnancy family planning services.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


         41. Prohibitions; Requirements--Time-Limited Benefits

     Present law
       No provision.
     House bill
       Federal family assistance grants may not be used to provide 
     assistance for the family of a person who has received block 
     grant aid for 60 months (or fewer, at State option), whether 
     or not consecutive. States may give hardship exemptions in a 
     fiscal year to up to 20 percent of their average monthly 
     caseload, including individuals who have been battered or 
     subjected to sexual abuse (but States are not required to 
     exempt these persons). When considering an individual's 
     length of stay on welfare, States are to count only time 
     during which the individual received assistance as the head 
     of household or as the spouse of the household head. Any 
     State funds spent to aid persons no longer eligible for TANF 
     after 5 years of benefits may be counted toward the 
     maintenance-of-effort requirement.
       This part shall not be interpreted to prohibit a State from 
     using State funds not originating with the Federal government 
     to aid families that lose eligibility for the block grant 
     program because of the 5-year time limit.
     Senate amendment
       Same, except adds an exemption from the time limit for 
     persons who live on a reservation of an Indian tribe with a 
     population of at least 1,000 persons and with at least 50 
     percent of the adult population not employed.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment on the time limit policy, and includes the 
     Senate provision on exceptions for certain Indian populations 
     and the House provision specifying States' authority to use 
     State and local funds to provide support, including cash 
     assistance, after 5 years. (For a description of other 
     Federal funds that may be provided such families, see the 
     conference agreement description of item 33 above.)


    42. Prohibitions; Requirements--Fraudulent Misrepresentation of 
                        Residence in Two States

     Present law
       No provision.
     House bill
       Any person convicted in Federal court or State court of 
     having fraudulently misrepresented residence in order to 
     obtain benefits or services in two or more States from the 
     family assistance grant, Medicaid, Food Stamps, or 
     Supplemental Security Income programs is ineligible for 
     family assistance grant aid for 10 years.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


   43. Prohibitions; Requirements--Fugitive Felons and Probation and 
                            Parole Violators

     Present law
       States may provide a recipient's address to a State or 
     local law enforcement officer who furnishes the recipient's 
     name and social security number and demonstrates that the 
     recipient is a fugitive felon and that the officer's official 
     duties include locating or apprehending the felon.
     House bill
       No assistance may be provided to an individual who is 
     fleeing to avoid prosecution, custody or confinement after 
     conviction for a crime (or an attempt to commit a crime) that 
     is a felony (or, in New Jersey, a high misdemeanor), or who 
     violates probation or parole imposed under Federal or State 
     law.
       Any safeguards established by the State against use or 
     disclosure of information about individual recipients shall 
     not prevent the agency, under certain conditions, from 
     providing the address of a recipient to a law enforcement 
     officer who is pursuing a fugitive felon or parole or 
     probation violator. This provision applies also to a 
     recipient sought by an officer not because he is a fugitive 
     but because he has information that the officer says is 
     necessary for his official duties. In both cases the officer 
     must notify the State that location or apprehension of the 
     recipient is within his official duties.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 44. Prohibitions; Requirements--Minor Children Absent From Home for a 
                           Significant Period

     Present law
       Regulations allow benefits to continue for children who are 
     ``temporarily absent'' from home.
     House bill
       No assistance may be provided for a minor child who has 
     been absent from the home for 45 consecutive days or, at 
     State option, between 30 and 180 consecutive days. States may 
     establish a good cause exemption as long as it is detailed in 
     the State report to the Secretary. No assistance can be given 
     to a parent or caretaker who fails to report a missing minor 
     child within five days of the time when it is clear (to the 
     parent) that the child will be absent for the specified time.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


   45. Prohibitions; Requirements--Medical Assistance Required to be 
    Provided for Families Becoming Ineligible for Assistance Due to 
           Increased Earnings or Collection of Child Support

     Present law
       States must continue Medicaid (or pay premiums for 
     employer-provided health insurance) for 6 months to a family 
     that loses AFDC eligibility because of hours of, or income 
     from, work of the caretaker relative, or because of loss of 
     the earned income disregard after 4 months of work. States 
     must offer an additional 6 months of medical assistance, for 
     which it may require a premium payment if the family's income 
     after child care expenses is above the poverty guideline. For 
     extended medical aid, families must submit specified reports. 
     States must continue Medicaid for 4 months to those who lose 
     AFDC because of increased child or spousal support.
     House bill
       States must provide medical assistance for 1 year to 
     families that become ineligible for block grant assistance 
     because of increased earnings, provided they received cash 
     block grant assistance in at least 3 of the 6 months before 
     the month in which they became ineligible and their income is 
     below the poverty line. For purposes of determining family 
     income to compare with the Federal poverty line, States have 
     the authority to set their own definition of income except 
     that income from the Earned Income Tax Credit must be 
     disregarded. States also must provide medical assistance for 
     4 months to families that leave welfare (after being enrolled 
     for at least 3 of the previous 6 months) because of increased 
     income from child support or spousal support.
     Senate amendment
       Same as current law.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment, with the modification that income 
     restrictions conform to current law. Transitional Medicaid 
     coverage is extended through the life of the block grant.


                46. Prohibitions; Requirements--Medicaid

     Present law
       States must provide Medicaid to all AFDC recipients and to 
     some AFDC-related groups who do not receive cash aid. 
     Examples include persons who do not receive a monthly payment 
     because the amount would be below $10 (Federal law prohibits 
     payments this small) and persons whose payments are reduced 
     to zero in order to recover previous overpayments.
       States must continue Medicaid for specified periods for 
     certain families who lose AFDC benefits. If the family loses 
     AFDC benefits because of increased earnings or hours of 
     employment, Medicaid coverage must be extended for 12 months. 
     (During the second 6 months a premium may be imposed, the 
     scope of benefits may be limited, or alternate delivery 
     systems may be used.) If the family loses AFDC because of 
     increased child or spousal support, coverage must be extended 
     for 4 months. States are also required to furnish Medicaid to 
     certain two-parent families whose principal earner is 
     unemployed and who are not receiving cash assistance because 
     the State has set a time limit on their AFDC coverage.
     House bill
       States must provide medical assistance to persons who would 
     be eligible for AFDC cash benefits (under terms of July 16, 
     1996) if that program still were in effect.
       A State may increase the AFDC income standard above that of 
     July 16, 1996 by the percentage increase in the consumer 
     price index for all urban consumers over the same period.
     Senate amendment
       States must provide medical assistance to persons who would 
     be eligible for AFDC (under terms of July 1, 1996) as if that 
     program were still in effect. Simplifies standards to make it 
     easier for States to administer. States would have the option 
     to: (1) lower their income standard, but not below those in 
     effect on May 1, 1988; and (2) use income and resource 
     standards and methodologies that are less restrictive than 
     those in effect on July 1, 1996.
       In order to provide States additional flexibility, States 
     may use 1 application form and may administer the program 
     through either its title IV agency or its title XIX agency.
       Families would receive transitional Medicaid benefits as 
     under current law.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment, with the modification that States must 
     retain the income and resource standards they had for

[[Page H8905]]

     AFDC eligibility on July 16, 1996. States may terminate 
     Medicaid eligibility for an adult who is terminated from TANF 
     because of failure to work. Conferees are concerned that the 
     conference agreement may require States to maintain a dual-
     eligibility determination system. Conferees, however, lacked 
     adequate information to determine the true nature and extent 
     of this problem. Thus, conferees recommend that the 
     Committees on Ways and Means, Commerce, and Finance conduct 
     hearings in the next Congress to carefully examine this 
     problem. If the committees determine that the dual-
     eligibility system does in fact impose additional 
     administrative costs on the States, Congress should consider 
     Federal-State cost-sharing schemes and other legislative 
     solutions. In the meantime, conferees are establishing a fund 
     of $.5 billion in entitlement spending that will be 
     distributed among States that experience additional 
     administrative expenses directly attributable to conducting a 
     dual-eligibility system.


  47. Prohibitions; Requirements--State Disregard of Income Security 
                                Payments

     Present law
       AFDC benefits may not be paid to a recipient of old-age 
     assistance (predecessor to Supplemental Security Income (SSI) 
     and now available only in Puerto Rico, Guam, and the U.S. 
     Virgin Islands), SSI, or AFDC foster care payments.
     House bill
       This provision allows States to disregard payments from old 
     age and survivors' insurance (social security), disability 
     insurance, old-age assistance, foster care, and Supplemental 
     Security Income in determining the amount of block grant cash 
     assistance to be provided to a family.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the Senate amendment.


           48. Prohibitions; Requirements--Nondiscrimination

     Present law
       No explicit provision in current AFDC/JOBS law.
     House bill
       No provision.
     Senate amendment
       States that have any program or activity that receives 
     block grant funds for Temporary Assistance for Needy Families 
     shall be subject to enforcement authorized under the Age 
     Discrimination Act of 1975, the Rehabilitation Act of 1973 
     (sec. 504), and the Civil Rights Act of 1964 (Title VI).
     Conference agreement
       The conference agreement follows the Senate amendment.


  49. Prohibitions; Requirements--Denial of Benefits for Certain Drug-
                          Related Convictions

     Present law
       No explicit provision.
     House bill
       No provision.
     Senate amendment
       An individual convicted under Federal or State law of any 
     crime related to illegal possession, use, or distribution of 
     a drug is ineligible for any Federal means-tested benefit 
     (for 5 years for a misdemeanor and for life for a felony). 
     Family members or dependents of the individual are exempted, 
     and individuals made ineligible would continue to be eligible 
     for emergency benefits, including emergency medical services.
     Conference agreement
       The conference agreement follows the Senate amendment, with 
     the modification that only TANF block grant benefits and food 
     stamps are denied and that the denial is only for a felony 
     offense.


         50. Penalties--Use of Grant in Violation of This Part

     Present law
       If the Secretary finds that a State has failed to comply 
     with the State plan, she is to withhold all payments from the 
     State (or limit payments to categories not affected by 
     noncompliance).
     House bill
       Note.--Before imposing any of the penalties below, the 
     Secretary shall notify the State of the violation and allow 
     the State to enter into a corrective action plan (item 60). 
     Also, except for items 51 and 52, the Secretary may not 
     impose a penalty if she finds that the State has reasonable 
     cause for its failure to comply.
       If an audit finds that a State has used Federal funds in 
     violation of the purposes of this title, the Secretary shall 
     reduce the following quarter's payment by the amount misused. 
     If the State cannot prove that the misuse was unintentional, 
     the State's following quarter payment will be reduced by an 
     additional five percent.
     Senate amendment
       Same. See also item 57, Failure to Comply with Provisions 
     of IV-A or State Plan.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


            51. Penalties--Failure to Submit Required Report

     Present law
       There is no specific penalty for failure to submit a 
     report, although the general noncompliance penalty could 
     apply.
     House bill
       If a State fails to submit a required quarterly report 
     within one month after the end of a fiscal quarter, the 
     Secretary shall reduce by four percent the block grant amount 
     otherwise payable to the State for the next fiscal year. 
     However, the penalty shall be rescinded if the State submits 
     the report before the end of the fiscal quarter succeeding 
     the one for which the report was due.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


     52. Penalties--Failure to Satisfy Minimum Participation Rates

     Present law
       If a State fails to achieve the JOBS participation rate 
     specified in law, the Secretary is to reduce to 50 percent 
     the Federal matching rate for JOBS activities and for full-
     time personnel costs, which now ranges from 60 percent to 78 
     percent among States. (However, see item 54, ``Corrective 
     Compliance,'' for penalty waiver authority.)
     House bill
       If a State fails to achieve its required work participation 
     rate for the fiscal year, the Secretary shall reduce the 
     following year's block grant by up to five percent, with the 
     percentage cut based on the ``degree of noncompliance.'' The 
     Secretary has the authority to reduce the penalty if the 
     State economy is in recession. In addition, failure to meet 
     required work participation requirements results in States' 
     being required to maintain 80 percent of historic spending 
     levels, instead of 75 percent.
     Senate amendment
       Imposes a graduated penalty on each consecutive failure by 
     a State to meet the work participation standard. The Senate 
     amendment also does not authorize the Secretary to reduce the 
     penalty for States with high unemployment.
     Conference agreement
       On penalty amounts, the conference agreement follows the 
     Senate amendment with the modification that there is a 
     graduated penalty of 5 percent the first year and 2 percent 
     in addition to the prior year's penalty in subsequent years 
     (so annual penalties in consecutive years would be 5 percent 
     in the first year, 7 percent in the second, 9 percent in the 
     third, and so on), with a maximum cumulative penalty of 21 
     percent. The conference agreement follows the House bill in 
     authorizing the Secretary to reduce the penalty for needy 
     States as defined under the contingency fund eligibility 
     criteria.


 53. Failure to Participate in the Income and Eligibility Verification 
                                 System

     Present law
       States must have in effect an Income and Eligibility 
     Verification System covering AFDC, Medicaid, unemployment 
     compensation, the Food Stamp program, and adult cash aid in 
     the outlying areas. There is no specific penalty for failure 
     to comply.
     House bill
       If the State fails to participate in the Income and 
     Eligibility Verification System (IEVS) designed to reduce 
     welfare fraud, the Secretary shall reduce by up to two 
     percent the annual family assistance grant of the State.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 54. Failure to Comply With Paternity Establishment and Child Support 
                        Enforcement Requirements

     Present law
       The penalty against a State for noncompliance with child 
     support enforcement rules--loss of AFDC matching funds--shall 
     be suspended if a State submits and implements a corrective 
     action plan.
     House bill
       If the Secretary determines that a State does not enforce 
     penalties requested by the Title IV-D child support 
     enforcement agency against recipients of cash aid who fail to 
     cooperate in establishing paternity or in establishing, 
     modifying, or enforcing a child support order under Title IV-
     D (and who do not qualify for any good cause or other 
     exception), the Secretary shall reduce the cash assistance 
     block grant by up to five percent.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


   55. Failure to Timely Repay a Federal Loan Fund for State Welfare 
                                Programs

     Present law
       No provision.
     House bill
       If a State fails to pay any amount borrowed from the 
     Federal Loan Fund for State Welfare Programs within the 
     maturity period, plus any interest owed, the Secretary shall 
     reduce the State's family assistance block grant for the 
     immediately succeeding fiscal year quarter by the outstanding 
     loan amount, plus the interest owed on it. The

[[Page H8906]]

     Secretary may not forgive these overdue debts.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 56. Failure of Any State to Maintain Certain Level of Historic Effort

     Present law
       No provision.
     House bill
       If in fiscal years 1997 through 2001 a State fails to spend 
     a sum equal to at least 75 percent of its ``historic level'' 
     (generally fiscal year 1994 expenditures for AFDC, JOBS, 
     Emergency Assistance, AFDC-related child care and ``at-risk'' 
     child care) of State spending on specified programs, the 
     Secretary shall reduce the following year's family assistance 
     grant (that is, in fiscal years 1998 through 2002) by the 
     difference between the 75 percent requirement and what the 
     State actually spent. However, States that fail to meet 
     required work participation rates must maintain 80 percent of 
     historic spending levels.
       Qualified State expenditures that count toward the 75 
     percent (or 80 percent) spending requirement are all State-
     funded expenditures under all State programs that provide any 
     of the following assistance to families eligible for family 
     assistance benefits (and those no longer eligible because of 
     the 5-year time limit or ineligible because of the Act's 
     treatment of noncitizens): cash and child care assistance; 
     educational activities designed to increase self-sufficiency, 
     job training and work (excluding any expenditure for public 
     education in the State other than expenditures for services 
     or assistance to a member of an eligible family that is not 
     generally available to other persons); administrative costs 
     not to exceed 15 percent of the total amount of qualified 
     State expenditures; and any other use of funds reasonably 
     calculated to accomplish purposes of the temporary family 
     assistance. Qualified expenditures exclude spending from 
     funds transferred from State or local programs except those 
     that exceed the amount expended in 1996 or those for which 
     the State is entitled to a Federal payment under former AFDC/
     JOBS law (as in effect just before enactment).
       The Secretary is to reduce the 75 percent (or 80 percent) 
     maintenance of effort spending requirement by up to eight 
     percentage points (i.e., to no lower than 67 percent or 72 
     percent) for States that achieve ``high performance'' scores, 
     based on a threshold to be set by the Secretary, for 
     achieving the goals of the program of Temporary Assistance 
     for Needy Families (TANF).
     Senate amendment
       Raises required State spending to 80 percent of the 
     ``historic'' level for all States. (Does not distinguish 
     between States that meet or fail work participation rates in 
     maintenance-of-effort rule.)
       The Secretary is to reduce the 80 percent spending 
     requirement by up to 8 percentage points (to as low as 72 
     percent) for States with high performance scores. (This 
     provision was deleted because of the Byrd rule.)
     Conference agreement
       The conference agreement follows the House bill, except 
     that the provision allowing reduction of required State 
     spending for high performance States is dropped. Conferees 
     note that State spending on programs that promote self-
     sufficiency and prevent welfare dependence including, but not 
     limited to, substance abuse treatment, teen parenting and 
     pregnancy prevention shall count towards a State's 
     maintenance of effort. The fact that such funds are spent 
     through or by State or local education agencies should not 
     prevent their being counted towards the State maintenance of 
     effort.


   57. Substantial Noncompliance of State Child Support Enforcement 
                          Program Requirements

     Present law
       If a State child support program is found not to be in 
     substantial compliance with Federal requirements, the 
     Secretary is to reduce AFDC matching funds: by 1-2 percent 
     for first finding of noncompliance, by 2-3 percent for second 
     consecutive finding, and by 3-5 percent for third or 
     subsequent finding. (See ``corrective compliance'' item 54.) 
     Note: State child support plans must undertake to establish 
     paternity of children born out-of-wedlock for whom AFDC is 
     sought, and AFDC law requires the parent to cooperate in 
     establishing paternity. Failure to cooperate makes the parent 
     ineligible for AFDC.
     House bill
       If a State child support enforcement program is found by 
     review not to have complied with Title IV-D requirements, and 
     the Secretary determines that the program is not in 
     compliance at the time the finding is made, then the 
     Secretary will reduce the State's quarterly block grant 
     payment for each quarter during which the State is not in 
     compliance. For the first finding of noncompliance, the 
     reduction will be between one and two percent; for the second 
     consecutive finding, between two and three percent; for the 
     third or subsequent findings, between three and five percent. 
     Non-compliance of a technical nature is to be disregarded.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


    58. Failure of State Receiving Amounts from Contingency Fund to 
                Maintain 100 Percent of Historic Effort

     Present law
       Not relevant.
     House bill
       If the Secretary determines that a State failed to maintain 
     100 percent of historic State spending, as required during a 
     year in which contingency funds are paid to the State, the 
     following year's block grant payment to the State is to be 
     reduced by the amount of contingency funds paid.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 59. Required Replacement of Grant Fund Reductions Caused by Penalties

     Present law
       Not applicable.
     House bill
       If a State's block grant is reduced as a result of one of 
     the above penalties, the State must, during the following 
     fiscal year, replace the penalized funds using State funds.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


   60. Penalties--Failure to Provide Medical Assistance to Families 
  Becoming Ineligible for Assistance under this Part Due to Increased 
        Earnings from Employment or Collection of Child Support

     Present law
       If the Secretary finds that a State fails to comply 
     substantially with any required provision of its Medicaid 
     plan (including transitional benefits for former AFDC 
     families), she shall withhold all payments to the State (or 
     limit payments to categories not affected by the 
     noncompliance).
     House bill
       If the Secretary determines that a State does not comply 
     with the requirement to provide extended medical assistance 
     for certain families that become ineligible for block grant 
     assistance due to increased earnings or the collection of 
     child support, the Secretary must reduce the State's block 
     grant by up to 5 percent (depending on the severity of the 
     violation).
     Senate amendment
       No specific provision about failure to comply with 
     requirement for extended medical assistance, but see item 
     below.
     Conference agreement
       The conference agreement follows the Senate amendment.


 61. Penalties--Failure to Comply with Provisions of IV-A or State Plan

     Present law
       If the Secretary finds that a State has failed to comply 
     with the State plan, she is to withhold all payments from the 
     State (or limit payments to categories not affected by 
     noncompliance). (Item 46 above.)
     House bill
       No general penalty for failure to comply with State plan.
     Senate amendment
       If the Secretary, after notice and hearing, finds that a 
     State has not substantially complied with any provision of 
     IV-A or the State plan during a fiscal year, she shall (if a 
     preceding penalty paragraph does not apply) reduce the grant 
     for the next year by up to 5 percent and shall continue an 
     annual reduction of up to 5 percent until she determines that 
     the State no longer is out of compliance.
     Conference agreement
       The conference agreement follows the House bill, with the 
     modification that a new penalty provision is added for States 
     that fail to meet the requirement to not sanction, for 
     failure to perform work, single parents who prove they cannot 
     find child care for a child under age 6.


    62. Penalties--Failure to Comply with 5-Year Limit on Assistance

     Present law
       Not relevant.
     House bill
       No specific provision.
     Senate amendment
       If the Secretary determines that a State during a fiscal 
     year has not complied with the 5-year time limit (for TANF-
     funded aid), she is to reduce the basic TANF grant for the 
     next year by 5 percent.
     Conference agreement
       The conference agreement follows the Senate amendment.


               63. Penalties--Reasonable Cause Exception

     Present law
       Not applicable. (States are eligible for unlimited funds, 
     but must match every dollar at a prescribed rate.)

[[Page H8907]]

     House bill
       The Secretary may (except for failure to timely repay the 
     loan fund, failure to meet the maintenance-of-effort 
     requirement and requirement to replace grant reductions 
     caused by penalties) withhold penalties against a State if 
     she determines that the State had reasonable cause for 
     failing to comply with the requirement.
     Senate amendment
       The Secretary may (except for failure to timely repay the 
     loan fund or failure to meet the maintenance-of-effort 
     requirement) withhold penalties against a State if she 
     determines that the State had reasonable cause for the 
     failure.
     Conference agreement
       The conference agreement follows the House bill.


               64. Penalties--Corrective Compliance Plan

     Present law
       The penalty against a State for substantial noncompliance 
     with child support rules is loss of AFDC matching funds. That 
     penalty shall be suspended if a State submits and implements 
     a corrective action plan. Also, if a State fails to achieve 
     the JOBS participation rate specified in law, the Secretary 
     may waive, in whole or part, the reduction in matching funds, 
     provided the State has submitted a proposal likely to achieve 
     the applicable participation rate for the current year.
     House bill
       Before assessing a penalty against a State under any 
     program established or modified by this Act, the Secretary 
     must notify the State of the violation and allow the State an 
     opportunity to enter into a corrective compliance plan within 
     60 days of the notification. The Federal government will have 
     60 days within which to accept or reject the plan; if it 
     accepts the plan, and if the State corrects the violation, no 
     penalty will be assessed. A plan submitted by a State is 
     deemed to be accepted if the Secretary does not accept or 
     reject the plan during the 60-day period after the plan is 
     submitted.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


             65. Penalties--Limitation on Amount of Penalty

     Present law
       If the Secretary finds that a State has failed to comply 
     with the State AFDC plan, he is to withhold all AFDC payments 
     from the State (or limit payments to categories not affected 
     by the noncompliance.)
     House bill
       In imposing the penalties described above, a State's 
     quarterly family assistance grant cannot be reduced by more 
     than a total of 25 percent; if necessary, penalties in excess 
     of 25 percent will be carried forward to the immediately 
     following fiscal year.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                     66. Appeal of Adverse Decision

     Present law
       Current law (sec. 1116 of the Social Security Act) entitles 
     a State to a reconsideration, which HHS must grant upon 
     request, of any disallowed reimbursement claim for an item or 
     class of items. The section also provides for administrative 
     and judicial review, upon petition of a State, of HHS 
     decisions about approval of State plans. At the option of a 
     State, any plan amendment may be treated as the submission of 
     a new plan.
     House bill
       The Secretary is required to notify the Governor of a State 
     within five days of any adverse decision or action under 
     Title IV-A, including any decision about the State's plan or 
     imposition of a penalty. This section provides for 
     administrative review by a Departmental Appeals Board within 
     HHS, requires a Board decision within 60 days after an appeal 
     is filed, and provides for judicial review (by a United 
     States district court) within 90 days after a final decision 
     by the Board. The proposal also repeals the reference to 
     Title IV-A in section 1116.
     Senate agreement
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


    67. Data Collection and Reporting--General Reporting Requirement

     Present law
       States are required to report the average monthly number of 
     families in each JOBS activity, their types, amounts spent 
     per family, length of JOBS participation and the number of 
     families aided with AFDC/JOBS child care services, the kinds 
     of child care services provided, and sliding fee schedules. 
     States that disallow AFDC for minor mothers in their own 
     living quarters are required to report the number living in 
     their parent's home or in another supervised arrangement. 
     States also must report data (including numbers aided, types 
     of families, how long aided, payments made) for families who 
     receive transitional Medicaid benefits.
     House bill
       The National Integrated Quality Control System draws 
     monthly samples of AFDC cases and reports extensive 
     background information about each case in the sample. JOBS 
     regulations require States to submit a sample of monthly 
     unaggregated case record data.
     Senate amendment
       Each eligible State must collect on a monthly basis, and 
     report to the Secretary on a quarterly basis, the following 
     information on individual families receiving assistance:
       1. the county of residence of the family;
       2. whether a child receiving assistance or an adult in the 
     family is disabled;
       3. the ages of family members;
       4. the number of individuals in the family, and the 
     relationship of each member to the youngest child;
       5. the employment status and earnings of the employed 
     adult;
       6. the marital status of adults, including whether they are 
     never married, widowed, or divorced;
       7. the race and educational status of each adult;
       8. the race and educational status of each child;
       9. whether the family received subsidized housing, 
     Medicaid, food stamps, or subsidized child care, and if the 
     latter two, the amount received;
       10. the number of months the family has received each type 
     of assistance under the program;
       11. if the adults participated in, and the number of hours 
     per week of participation in, the following activities: 
     education; subsidized private sector employment; unsubsidized 
     employment; public sector employment, work experience, or 
     community service; job search; job skills training or on-the-
     job training; and vocational education;
       12. information necessary to calculate the State work 
     participation rates;
       13. the type and amount of assistance received under the 
     program, including the amount of and reason for any reduction 
     of assistance (including sanctions);
       14. any amount of unearned income received by any family 
     member; and
       15. the citizenship of family members.
       In addition to data on individual cases, States must 
     report, on a sample of cases closed during the quarter, 
     whether families left welfare because of employment, 
     marriage, the five-year time limit on benefits, sanction, or 
     State policy.
       States may use scientifically acceptable sampling methods 
     approved by the Secretary to estimate the required data 
     elements. The Secretary shall provide States with case 
     sampling plans and data collection procedures deemed 
     necessary for statistically valid estimates.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                 68. Other State Reporting Requirements

     Present law
       Regulations require each State to submit quarterly 
     estimates of the total amount (and the Federal share) of 
     expenditures for AFDC benefits and administration. Required 
     quarterly reports include estimates of the Federal share of 
     child support collections made by the State.
     House bill
       The above quarterly report submitted by the State must also 
     include:
       1. a statement of the percentage of the funds paid to the 
     State that is used to cover administrative costs or overhead;
       2. a statement of the total amount expended by the State 
     during the quarter on programs for needy families;
       3. the number of noncustodial parents in the State who 
     participated in work activities as defined in the proposal 
     during the quarter; and
       4. the total amount spent by the State for providing 
     transitional services to a family that no longer receives 
     assistance because of employment, along with a description of 
     those services.
       The Secretary shall prescribe regulations necessary to 
     define the data elements.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 69. Data Collection and Reporting--Annual Reports to the Congress by 
                             the Secretary

     Present law
       The law requires the HHS Secretary to report promptly to 
     Congress the results of State reevaluations of AFDC need 
     standards and payment standards required at least every 3 
     years. The Secretary is to annually compile and submit to 
     Congress annual State reports on at-risk child care. The 
     Family Support Act requires the Secretary to submit 
     recommendations regarding JOBS performance standards by a 
     deadline that was extended.
     House bill
       Not later than 6 months after the end of fiscal year 1997, 
     and each fiscal year thereafter, the Secretary shall send 
     Congress a report describing:
       1. whether States are meeting minimum participation rates 
     and whether they are

[[Page H8908]]

     meeting objectives of increasing employment and earnings of 
     needy families, increasing child support collections, and 
     decreasing out-of-wedlock pregnancies and child poverty;
       2. demographic and financial characteristics of applicant 
     families, recipient families, and those no longer eligible 
     for temporary family assistance;
       3. characteristics of each State program funded under this 
     part; and
       4. trends in employment and earnings of needy families with 
     minor children.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


  70. Direct Funding and Administration by Indian Tribes--Grants for 
                             Indian Tribes

     Present law
       No provision for AFDC administration by Indian tribes. 
     Indian and Alaska families with children receive AFDC 
     benefits on the same terms as other families in their States, 
     from State or local AFDC agencies.
       More than 80 tribes and native organizations in 24 States 
     are JOBS grantees, having applied to conduct JOBS within 6 
     months of enactment of the law establishing it. Their JOBS 
     allocation of funds is deducted from that of their State.
     House bill
       For each fiscal year 1997 through 2000, the Secretary shall 
     pay tribal family assistance grants to eligible Indian tribes 
     (and shall reduce the family assistance grant for the 
     State(s) in which the tribe's service area lies accordingly). 
     The tribal family assistance grant is equal to the total 
     amount of Federal payments to the State for fiscal year 1994 
     in AFDC benefits, AFDC Administration, Emergency Assistance, 
     and JOBS funds for Indian families residing in the tribal 
     service area. The Secretary shall pay tribes that 
     participated in the JOBS program in fiscal year 1995 a grant 
     equal to their fiscal year 1994 JOBS funding ($7.6 million). 
     This sum is appropriated for each of six fiscal years, 1996 
     through 2001.
     Senate amendment
       Same as the House bill, except for adding a fifth year, 
     2001, for tribal family assistance grants.
     Conference agreement
       The conference agreement follows the Senate amendment.


  71. Direct Funding and Administration by Indian Tribes--Three-year 
                     Tribal Family Assistance Plan

     Present law
       Not applicable.
     House bill
       Indian tribes must submit a tribal family assistance plan 
     to be eligible to receive a tribal family assistance grant. 
     The plan must outline the tribe's approach to providing 
     welfare services during the 3-year period, specify how 
     services will be provided, identify populations and areas 
     served, provide that families will not receive duplicate 
     assistance from a State or other tribal assistance plan, 
     identify employment opportunities in the service area, and 
     apply fiscal accountability provisions of the Indian Self-
     Determination and Education Assistance Act relating to the 
     submission of a single-agency audit report required under 
     current law.
       The Secretary must approve tribal family assistance plans 
     that meet the above requirements. For each tribe receiving a 
     family assistance grant and with the participation of the 
     tribe, the Secretary shall establish minimum work 
     requirements, time limits, and penalties that are consistent 
     with provisions of this Act and the economic conditions and 
     resources of the tribe. Tribes will be subject to the same 
     penalties as States for misusing funds, failing to pay back 
     Federal loan funds, and failing to meet work participation 
     rates. Tribes will also be required to abide by the same data 
     collection and reporting requirements as States.
       Unless excepted through a waiver, tribes in Alaska that 
     receive tribal family assistance grants must operate a 
     program comparable to the temporary family assistance program 
     of the State of Alaska.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


       72. Research, Evaluations, and National Studies--Research

     Present law
       Section 1110 of the Social Security Act authorizes and 
     appropriates ``such sums as the Congress may determine'' for 
     making grants and contracts to (or jointly financed 
     arrangements with) States and public or private organizations 
     for cooperative research or demonstration projects, such as 
     those relating to the prevention and reduction of dependency.
     House bill
       The Secretary shall conduct research on the effects, 
     benefits, and costs of operating State programs of Temporary 
     Assistance for Needy Families, including time limits for 
     eligibility. The research shall include studies on the 
     effects of different programs and the impacts of the programs 
     on welfare dependency, illegitimacy, teen pregnancy, 
     employment rates, child well-being, and other appropriate 
     issues.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


   73. Research, Evaluations, and National Studies--Development and 
Evaluation of Innovative Approaches to Reducing Welfare Dependency and 
                      Increasing Child Well-Being

     Present law
       Section 1115 of the Social Security Act authorizes waiver 
     of specified provisions of AFDC law for State experimental, 
     pilot or demonstration projects to promote objectives of the 
     law, including self-support of parents and stronger family 
     life.
     House bill
       The Secretary may assist States in developing, and shall 
     evaluate, innovative approaches for reducing welfare 
     dependency and increasing the well-being of minor children, 
     using random assignments in these evaluations to the maximum 
     extent feasible.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


   74. Research, Evaluations, and National Studies--Dissemination of 
                              Information

     Present law
       No provision.
     House bill
       The Secretary shall develop innovative methods of 
     disseminating information on research, evaluations, and 
     studies, including ways to facilitate sharing of information 
     via computers and other technologies.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


  75. Research, Evaluations, and National Studies--Annual Rankings of 
      States and Review of Most and Least Successful Work Programs

     Present law
       No provision.
     House bill
       The Secretary shall rank annually States receiving family 
     assistance grants in the order of their success in moving 
     families off welfare and into work, reducing the caseload, 
     and, when a practicable method of calculation becomes 
     available, diverting persons from applying to the program. 
     The Secretary shall review annually the three most and three 
     least successful programs under these criteria.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


  76. Research, Evaluations, and National Studies--Annual Rankings of 
     States and Review of Issues Relating to Out-of-Wedlock Births

     Present law
       No provision.
     House bill
       The Secretary shall rank States annually on the percentage 
     of births to families on welfare that are out-of-wedlock and 
     on net changes in the percentage of out-of-wedlock births to 
     families on welfare. The Secretary must review the programs 
     of the five highest and five lowest ranking States under 
     these criteria.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


   77. Research, Evaluations, and National Studies--State-Initiated 
                              Evaluations

     Present law
       In a 1994 public notice, HHS stated that it is committed to 
     a broad range of evaluation strategies, including true 
     experimental, quasi-experimental, and qualitative designs, 
     for demonstrations operating under waivers. Section 1115(d) 
     of the Social Security Act required the Secretary to enter 
     into agreements with up to eight applicant States to conduct 
     demonstration projects testing more liberal treatment of 
     unemployed 2-parent families. The law stipulated that the 
     States must evaluate costs and work effort results by use of 
     experimental and control groups.
     House bill
       A State is eligible to receive funding to evaluate its 
     family assistance program if it submits an evaluation design 
     determined by the Secretary to be rigorous and likely to 
     yield credible and useful information. The State must pay 10 
     percent of the study's cost, unless the Secretary waives this 
     rule.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


      78. research, evaluations, and national studies--report on 
             circumstances of certain children and families

     Present law
       No provision.

[[Page H8909]]

     House bill
       Beginning 3 years after enactment, the Secretary shall 
     submit an annual report to 4 congressional committees (Ways 
     and Means, Economic and Educational Opportunities, Finance, 
     and Labor and Human Resources) about children whose families 
     reached the cash assistance time limit of TANF, families that 
     include a child ineligible because of the family cap, 
     children born to teenaged parents, and persons who became 
     parents as teenagers after enactment. For each of these four 
     groups, detailed information is required, including 
     percentages that dropped out of school, are employed, have 
     been convicted of a crime or judged delinquent, continue to 
     participate in TANF, have health insurance (and whether from 
     private entity or government), and average family incomes.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the House bill.


79. research, evaluations, and national studies--funding of studies and 
                             demonstrations

     Present law
       See ``Research'' above. For Section 1115(a) ``waiver'' 
     projects (``Innovative Approaches'' above) Federal cost 
     neutrality over the life of a demonstration project is 
     required.
       Note: The annual budgets of HHS request funds for policy 
     research. The fiscal year 1997 budget seeks $9 million and 
     lists these priority issues: issues related to welfare 
     reform, health care, family support and independence, 
     poverty, at-risk children and youth, aging and disability, 
     science policy, and improved access to health care and 
     support services.
     House bill
       For research, development and evaluation of innovative 
     approaches, State-initiated evaluation studies of the family 
     assistance program, and for costs of operating and evaluating 
     demonstration projects begun under the AFDC waiver process, 
     this section authorizes to be appropriated, and appropriates, 
     a total of $15 million annually for 6 fiscal years, 1996 
     through 2001. Half of this sum is allocated to the purposes 
     described above in ``Research'' and ``Innovative Approaches'' 
     and half to the other purposes.
       The Secretary may implement and evaluate demonstrations of 
     innovative and promising strategies that provide one-time 
     capital funds to establish, expand, or replicate programs, 
     test performance-based funding, and test strategies in 
     multiple States and types of communities.
     Senate amendment
       Same, except provides funding only in 4 fiscal years, 1998 
     through 2001.
     Conference agreement
       The conference agreement follows the House bill, with the 
     modification to appropriate for the years 1996 through 2002.


                        80. child poverty rates

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       Not later than 90 days after enactment, the governor of a 
     State shall submit to the Secretary a statement of the child 
     poverty rate in the State. Annually thereafter, the governor 
     shall report the child poverty rate to the Secretary. If the 
     rate increases by 5 percent or more as a result of changes 
     made by the Act, the State shall prepare a corrective action 
     plan to reduce the incidence of child poverty.
     Conference agreement
       The conference agreement follows the Senate amendment on 
     the submission of reports on child poverty rates and the 
     corrective action plans. The conference agreement follows the 
     House bill on provisions in the Senate amendment that provide 
     the Secretary of HHS with the authority to alter State plans.


                     81. study by the census bureau

     Present law
       No provision.
     House bill
       The Census Bureau must expand the Survey of Income and 
     Program Participation (SIPP) to evaluate the impact of 
     welfare reforms made by this title on a random national 
     sample of recipients and, as appropriate, other low-income 
     families. The study should focus on the impact of welfare 
     reform on children and families, and should 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. $10 million per year for 7 
     years (1996-2002) is appropriated for this study.
     Senate amendment
       Same provision, except that the $10 million annual 
     appropriation is for only 5 years (fiscal years 1998-2002).
     Conference agreement
       The conference agreement follows the House bill.


                              82. waivers

     Present law
       Section 1115 of the Social Security Act authorizes the HHS 
     Secretary to waive specified requirements of State AFDC plans 
     in order to enable a State to carry out any experimental, 
     pilot, or demonstration project that the Secretary judges 
     likely to assist in promoting the program's objectives. Some 
     38 States have received waivers from the Clinton 
     Administration for welfare reforms, as of late May 1996.
     House bill
       This section provides that terms of AFDC waivers in effect, 
     or approved, as of September 30, 1995, will continue until 
     their expiration, except that beginning with fiscal year 1996 
     a State operating under a waiver shall receive the block 
     grant described under Section 403 in lieu of any other 
     payment provided for in the waiver. The section also allows 
     for continuation, under certain conditions of waivers on or 
     approved before July 1, 1997, on the basis of applications 
     made before enactment of the new program.
       States have the option to terminate waivers before their 
     expiration, but projects that are ended prematurely must be 
     summarized in written reports. A State that submits a request 
     to end a waiver within 90 days after the adjournment of the 
     first regular session of the State legislature that begins 
     after the date of enactment will be held harmless for accrued 
     cost neutrality liabilities incurred under the waiver.
       The Secretary is directed to encourage any State now 
     operating a waiver to continue the project and to evaluate 
     its result or effect. A State may elect to continue one or 
     more individual waivers.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the Senate amendment, with 
     the modification that such waivers may only apply to the 
     geographical areas of the State and to the specific program 
     features for which the waiver was granted. All geographical 
     areas of the State and program features of the State program 
     not specifically covered by the waiver must conform to this 
     part. Conferees urge the Secretary to approve the Wisconsin 
     comprehensive welfare reform waiver request (published in the 
     Federal Register on June 10, 1996) by September 1, 1996.


        83. Administration (and Reduction in Federal Workforce)

     Present law
       An Assistant Secretary for Family Support, appointed by the 
     President by and with consent of the Senate, is to administer 
     AFDC, child support enforcement, and the Jobs Opportunities 
     and Basic Skills (JOBS) program.
     House bill
       The provision for an Assistant Secretary for Family Support 
     now found in section 417 of Part A of the Social Security Act 
     is retained but modified to remove the reference to the JOBS 
     program, which is repealed.
       No requirements to reduce workforce at HHS.
     Senate amendment
       The Temporary Assistance for Needy Families (TANF) block 
     grant program and the child support enforcement program shall 
     be administered by an Assistant Secretary for Family Support. 
     The HHS Secretary must reduce the number of positions within 
     the Department by 245 equivalent full-time equivalent (FTE) 
     positions related to the conversion of AFDC, Emergency 
     Assistance, and Jobs into TANF and by 60 FTE managerial 
     positions. In general, it requires the Secretary to reduce by 
     75 percent the number of FTE positions that relate to any 
     direct spending program, or any program funded through 
     discretionary spending that is converted into a block grant 
     program under the bill and to reduce FTE department 
     management positions similarly (on the basis of the portion 
     of the Department's total appropriation represented by 
     programs converted to block grants).
     Conference agreement
       The conference agreement follows the Senate amendment.


                  84. Limitation on Federal Authority

     Present law
       No provision.
     House bill
       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.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                         85. Definitions--Adult

     Present law
       No provision.
     House bill
       An individual who is not a minor child.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                      86. Definitions--Minor Child

     Present law
       No provision. A dependent child is defined as a needy child 
     who is under age 18 (19, at State option, if a full time 
     student in a secondary school or equivalent level of 
     vocational and technical training and expected to complete 
     school before age 19).

[[Page H8910]]

     House bill
       An individual who has not attained 18 years of age or 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).
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                      87. Definitions--Fiscal Year

     Present Law
       No provision.
     House Bill
       Any 12-month period ending on September 30 of a calendar 
     year.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


     88. Definitions--Indian, Indian Tribe, and Tribal Organization

     Present law
       For JOBS purposes, an Indian tribe is defined as any tribe, 
     band, Nation, or other organized group of Indians that is 
     recognized as eligible for special programs and services of 
     the U.S. because of their status as Indians. An Alaska native 
     organization is any organized group of Alaska natives 
     eligible to operate a Federal program under P.L. 93-638 or 
     that group's designee.
     House bill
       With the exception of specified Indian tribes in Alaska, 
     these terms have the meaning given in the Indian Self-
     Determination and Education Assistance Act.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                         89. Definitions--State

     Present law
       For purposes of AFDC, the term ``State'' means the 50 
     States, the District of Columbia, the Commonwealth of Puerto 
     Rico, the U.S. Virgin Islands, Guam, and American Samoa. The 
     last jurisdiction has not implemented AFDC.
     House bill
       Except as otherwise specifically provided (e.g., regarding 
     the provision of population growth funds and contingency 
     funds), 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.
     Senate amendment
       Same, except adds to this definition an option for a State 
     to contract to provide services: The term ``State'' includes 
     administration and provision of services under the family 
     assistance program and under the programs of child welfare, 
     foster care and adoption assistance, family preservation, and 
     independent living, through contracts with charitable, 
     religious or private organizations, and provision of aid by 
     means of certificates, vouchers, or other forms of 
     disbursement redeemable by these organizations. See item 92.
     Conference agreement
       The conference agreement follows the House bill.


  90. Additional Grants to Puerto Rico, the Virgin Islands, Guam, and 
              American Samoa; Limitation on Total Payments

     Present law
       Under current law, the territories are eligible for 75 
     percent matching grants for their expenditures on cash 
     welfare for adult assistance (i.e., assistance for needy 
     persons who are aged, blind, or disabled), Aid to Families 
     with Dependent Children (AFDC), Emergency Assistance (EA), 
     Foster Care and Adoption Assistance, the Job Opportunities 
     and Basic Skills (JOBS) program, and the Family Preservation 
     program (Title IV-B, subpart 2). These matching grants are 
     limited by caps on Federal payments. The territories also 
     receive grants under the child welfare services (Title IV-B, 
     subpart 1) program.
       [Note.--Although eligible, territories do not claim foster 
     care and adoption assistance funds.]
       The law places a ceiling on total payments for AFDC, aid to 
     needy aged, blind or disabled adults, and foster care and 
     adoption assistance to Puerto Rico--$82 million, the Virgin 
     Islands--$2.8 million, Guam--$3.8 million, and American Samoa 
     (AFDC, foster care, and adoption assistance)--$1 million.
     House bill
       The proposal retains but increases aggregate welfare 
     ceilings in each of the territories and combines the 
     individual programs into a single block grant. The new 
     ceilings would apply to aggregate spending for cash aid for 
     needy families (TANF), cash aid to needy aged, blind or 
     disabled adults, and child protection (child welfare and 
     family preservation services). The proposal authorizes 
     territories to transfer funds among these programs. Maximum 
     potential fiscal year payments (including both the capped 
     mandatory payments listed below and the authorization of 
     discretionary grants) are as follows: Puerto Rico--$113.5 
     million; Guam--$5.2 million; U.S. Virgin Islands--$4.0 
     million; and American Samoa--$1.3 million.
       To receive mandatory ceiling amounts (capped entitlements), 
     territories must spend from their own funds in a fiscal year 
     as much as they did in fiscal year 1995 for cash aid to needy 
     families, and cash aid to needy aged, blind, or disabled 
     adults. Federal matching funds, at a 75 percent rate, would 
     reimburse territories for expenditures above their fiscal 
     year 1995 base level, but below the Federal cap. Mandatory 
     ceiling amounts: Puerto Rico--$105.5 million; Guam, $4.9 
     million; Virgin Islands, $3.7 million; and American Samoa, 
     $1.1 million.
     Senate amendment
       The proposal retains but increases aggregate welfare 
     ceilings in each of the territories and, in effect, combines 
     all but IV-B services (child welfare services and family 
     preservation) into a single block grant. The new ceilings 
     would apply to aggregate spending for cash aid for needy 
     families (TANF), cash aid to needy aged, blind, or disabled 
     adults, and foster care and adoption assistance. The proposal 
     authorizes territories to transfer funds among these 
     programs.
       To receive the new ceiling amounts (capped entitlements), 
     territories must spend from their own funds in a fiscal year 
     for cash aid to needy families and cash aid to needy aged, 
     blind, or disabled adults. Federal matching funds, at a 75 
     percent rate, would reimburse them for expenditures above 
     their fiscal year 1995 base level, but below the Federal cap. 
     Mandatory ceiling amounts--Puerto Rico--$102 million; Guam, 
     $4.7 million; Virgin Islands, $3.6 million; and American 
     Samoa, $1 million. (Current law and funding arrangements are 
     retained for IV-B programs.)
     Conference agreement
       The conference agreement generally follows the Senate 
     amendment. The conference agreement adds a provision 
     specifying that States may use Title XX funds to provide 
     vouchers to families losing TANF block grant assistance due 
     to a State-imposed family cap.


  91. Repeal of Provisions Requiring Disapproval of Medicaid Plans or 
Denial of Same Medicaid Payments to States that Reduce Welfare Payment 
                                 Levels

     Present law
       If a State reduces AFDC ``payment levels'' below those of 
     May 1, 1988, the Secretary shall not approve the State's 
     Medicaid plan.
       If a State reduces AFDC payment levels below those of July 
     1, 1987, Medicaid matching funds shall be disallowed for 
     required services to pregnant women and children not enrolled 
     in AFDC but eligible for Medicaid on grounds of low income.
     House bill
       The House proposal repeals provisions that impose Medicaid 
     sanctions upon States that reduce AFDC payment levels.
     Senate amendment
       Same.
     Conference Agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


      92. Services Provided by Charitable, Religious, and Private 
                             Organizations

     Present law
       The Child Care and Development Block Grant (CCDBG) Act 
     prohibits use of any financial assistance provided through 
     any grant or contract for any sectarian purpose or activity. 
     In general, the CCDBG requires religious nondiscrimination, 
     but it does allow a sectarian organization to require 
     employees to adhere to its religious tenets and teachings.
     House bill
       The proposal authorizes States to administer and provide 
     family assistance services (and services under SSI, the child 
     protection block grant program, foster care, adoption 
     assistance, and independent living programs) through 
     contracts with charitable, religious, or private 
     organizations. Under this provision, religious organizations 
     would be eligible, on the same basis as any other private 
     organization, to provide assistance as contractors or to 
     accept certificates and vouchers so long as their programs 
     are implemented consistent with the Establishment Clause of 
     the Constitution. States may pay recipients by means of 
     certificates, vouchers, or other forms of disbursement that 
     are redeemable with such private organizations.
       The proposal provides that, except as otherwise allowed by 
     law, a religious organization administering the program may 
     not discriminate against beneficiaries on the basis of 
     religious belief or refusal to participate in a religious 
     practice. States must provide an alternative provider for a 
     beneficiary who objects to the religious character of the 
     designated organization.
       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.
     Senate amendment
       Same provision, except that administration by charitable, 
     religious, and private organizations is authorized only for 
     TANF and SSI.
     Conference agreement
       The conference agreement follows the House bill.

[[Page H8911]]

    93. Census Data on Grandparents as Primary Caregivers for Their 
                             Grandchildren

     Present law
       No provision.
     House bill
       The Secretary of Commerce shall expand the Census Bureau's 
     question (for the decennial census and the mid-decade census) 
     concerning households with both grandparents and their 
     grandchildren so as to distinguish between households in 
     which a grandparent temporarily provides a home and those 
     where the grandparent serves as primary caregiver.
     Senate amendment
       Same.
     Conference Agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                     94. Report on Data Processing

     Present Law
       No provision. (State child support plans may provide for 
     establishment of a statewide automated data processing and 
     information retrieval system.)
     House bill
       The Secretary must report to Congress within six months on 
     the status of automatic data processing systems in the States 
     and on what would be required to produce a system capable of 
     tracking participants in public programs over time and 
     checking case records across States to determine whether some 
     individuals are participating in public programs in more than 
     one State. The report should include a plan for building on 
     the current automatic data processing system to produce a 
     system capable of performing these functions as well as an 
     estimate of the time required to put the system in place and 
     the cost of the system.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


               95. Study on Alternative Outcomes Measures

     Present law
       The Family Support Act required the Secretary to submit to 
     Congress recommendations for JOBS performance standards 
     regarding ``specific measures of outcomes''. It said the 
     standards should not be measured solely by levels of activity 
     or participation. (The report, due Oct. 1, 1993, was 
     submitted 1 year late.)
     House bill
       The Secretary must, in cooperation with the States, study 
     and analyze measures of program outcomes (as an alternative 
     to minimum participation rates) for evaluating the success of 
     State block grant programs in helping recipients leave 
     welfare. The study must include a determination of whether 
     outcomes measures should be applied on a State or national 
     basis and a preliminary assessment of the job placement 
     performance bonus established in the Act. The Secretary must 
     report findings to the Committee on Finance and the Committee 
     on Ways and Means not later than September 30, 1998.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                96. Welfare Formula Fairness Commission

     Present law
       No provision. AFDC funds are not distributed by formula. 
     States are entitled to reimbursement, at matching rates 
     inversely related to their per capita income squared, for all 
     AFDC benefits and AFDC- related child care spending (but not 
     ``at-risk'' child care). Federal funds received by a State 
     are a function of its AFDC benefit levels, caseloads, and 
     matching rate.
     House bill
       No provision.
     Senate amendment
       Establishes a welfare formula fairness commission to make 
     recommendations on funding formulas, bonus payments, and work 
     requirements of the new TANF program. Commission is to have 
     15 members, 3 each appointed by the President, Senate 
     Majority Leader, Senate Minority Leader, House Speaker, and 
     House Minority Leader. It is to report to Congress by Sept. 
     1, 1998, either making recommendations for change or giving 
     notice that none is needed.
     Conference agreement
       The conference agreement follows the House bill.


          97. Conforming Amendments to the Social Security Act

     Present law
       No provision.
     House bill
       This section makes a series of technical amendments, 
     including the repeal of the JOBS program, that conform 
     provisions of the proposal with various titles of the Social 
     Security Act.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


  98. Conforming Amendments to the Food Stamp Act of 1977 and Related 
                               Provisions

     Present law
       No provision.
     House bill
       This section makes a series of technical amendments that 
     conform provisions of the proposal with various titles of the 
     Food Stamp Act and other related provisions.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                99. Conforming Amendments to Other Laws

     Present law
       No provision.
     House bill
       This section makes a series of amendments that conform 
     provisions of the proposal to the Unemployment Compensation 
     Amendments of 1976, the Omnibus Budget Reconciliation Act of 
     1987, the Housing and Urban-Rural Recovery Act of 1983, the 
     Tax Equity and Fiscal Responsibility Act of 1982, the Social 
     Security Amendments of 1967, the Stewart B. McKinney Homeless 
     Assistance Amendments Act of 1988, the Higher Education Act 
     of 1965, the Carl D. Perkins Vocational and Applied 
     Technology Education Act, the Elementary and Secondary 
     Education Act of 1965, Public Law 99-88, the Internal Revenue 
     Code of 1986, the Wagner-Peyser Act, the Job Training 
     Partnership Act, the Low-Income Home Energy Assistance Act of 
     1981, the Family Support Act of 1988, the Balanced Budget and 
     Emergency Deficit Control Act of 1985, the Immigration and 
     Nationality Act, the Head Start Act, and the School-to-Work 
     Opportunities Act of 1994.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


100. Development of Prototype of Counterfeit-Resistant Social Security 
                             Card Required

     Present law
       No provision.
     House bill
       The Commissioner of Social Security is required to develop 
     a prototype of a counterfeit-resistant Social Security card. 
     The Commissioner must report to Congress on the cost of 
     issuing a tamper-proof card for all persons over a three, 
     five, and 10-year period.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


       101. Community Steering Committees Demonstration Projects

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       Requires the Secretary to enter into agreements with up to 
     5 applicant States to conduct demonstration projects designed 
     to help TANF parents move into the nonsubsidized workforce. 
     Duties of the committee: identify and create unsubsidized 
     jobs for TANF recipients; propose and implement solutions to 
     work barriers; assess needs of the children and provide 
     services to ensure that the children enter school ready to 
     learn and stay in school. A primary responsibility of the 
     committee shall be to help assure that parents who have 
     obtained work retain their jobs. Activities may include 
     counseling, emergency day care, sick day care, 
     transportation, provision of clothing, housing assistance, or 
     any other needed help. Not later than Oct. 1, 2002, the 
     Secretary shall report to congress on the project results.
     Conference agreement
       The conference agreement follows the House bill.


              102. Disclosure of Receipt of Federal Funds

     Present law
       No provision.
     House bill
       Under certain circumstances specified public funds received 
     by nonprofit, tax-exempt 501(c) organizations, must be 
     publicly disclosed. When a 501(c) organization that accepts 
     Federal funds under the Personal Responsibility and Work 
     Opportunity Act (other than those provided under Titles IV, 
     XVI, and XX of the Social Security Act) makes any 
     communication intended to promote public support or 
     opposition to any governmental policy (Federal, State or 
     local) through any broadcasting station, newspaper, magazine, 
     outdoor advertising facility, direct mailing, or any other 
     type of general public advertising, the communication must 
     state: ``This was prepared and paid for by an organization 
     that accepts taxpayer dollars.''
     Senate amendment
       Applies the fund disclosure rule to all Federal funds under 
     the Personal Responsibility and Work Opportunity Act. (This 
     provision was deleted because of the Byrd rule.)
     Conference agreement
       The conference agreement follows the Senate amendment (no 
     provision as a result of the Byrd rule).

[[Page H8912]]

  103. Modifications to the Job Opportunities for Certain Low-Income 
                          Individuals Programs

     Present law
       The Family Support Act of 1988 (Sec. 505) directed the 
     Secretary to enter into agreement with between 5 and 10 
     nonprofit organizations to conduct demonstrations to create 
     job opportunities for AFDC recipients and other low-income 
     persons. For these projects, $6.5 million was authorized to 
     be appropriated for each fiscal year, 1990-1992.
     House bill
       The word ``demonstration'' is struck from the description 
     of these projects; the projects are converted to grant 
     status. The provision requires the Secretary to enter into 
     agreements with nonprofit organizations to conduct projects 
     that create job opportunities for recipients of family 
     assistance and other persons with income below the poverty 
     guideline. $25 million annually is authorized for these 
     projects.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                 104. Conforming Amendments to Medicaid

     Present law
     House bill
       Provides for continued application of AFDC standards and 
     methodologies for certain families, entitling them to 
     Medicaid. Allows cost-of-living adjustments in income 
     standards above level of July 16, 1996. See ``Prohibitions; 
     Requirements--Medicaid'' above.
     Senate amendment
       Same except that States may use less restrictive income 
     standards and methodologies than under current law.
     Conference agreement
       The conference agreement follows the House bill.


                  105. EFFECTIVE DATE; TRANSITION RULE

     Present law
       No provision.
     House bill
       Except as otherwise provided, this title and the amendments 
     made by it take effect on July 1, 1997. Penalties (with the 
     major exception of penalties for misuse of Federal family 
     assistance grant funds) will not take effect until July 1, 
     1997, or six months after the State plan is received by the 
     Secretary, whichever is later.
       Within 90 days of enactment, the Secretary of HHS, the 
     Commissioner of Social Security and other heads of 
     appropriate agencies shall submit to appropriate 
     congressional committees. Necessary technical and conforming 
     amendments.
       States may opt to begin their block grant program before 
     July 1, 1997, in which case the State is entitled to receive 
     no more than the State family assistance grant for the entire 
     fiscal year; block grant payments will be made pro rata based 
     on the number of days remaining in the fiscal year after the 
     Secretary first received the State plan. The submission of a 
     State plan is deemed to constitute the State's acceptance of 
     the family assistance grant (including pro rata reductions 
     for a partial fiscal year) and the termination of the 
     individual entitlement to benefits under the AFDC program. 
     Effective October 1, 1996, no individual or family shall be 
     entitled to any benefits or services under any State plan 
     under part A or F of Title IV of the Social Security Act (as 
     in effect on September 30, 1995).
       The amendments made do not apply with respect to powers, 
     duties, penalties and other considerations applicable to aid, 
     assistance or services provided before the effective date, or 
     with respect to administrative actions and proceedings that 
     commenced before the effective date. Federal and State 
     officials may use scientifically acceptable statistical 
     sampling techniques in closing out accounts. Each State shall 
     complete the filing of all claims within 2 years after the 
     date of enactment. The person serving as Assistant Secretary 
     for Family Support within HHS on the day before the effective 
     date of this title will continue to serve in that position 
     until a successor is named, performing functions provided 
     under current law and having powers and duties provided in 
     Section 103 of this bill.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

                 Title II: Supplemental Security Income


                1. REFERENCE TO THE SOCIAL SECURITY ACT

     Present law
       No provision.
     House bill
       Any reference in this title expressed in terms of an 
     amendment to or repeal of a section or other provision is 
     made to the Social Security Act.
     Senate amendment
       Identical to House bill.
     Conference agreement
       The conference agreement follows the House bill.

                  Subtitle A--Eligibility Restrictions


  2. denial of ssi benefits to individuals found to have fraudulently 
misrepresented residence in order to obtain benefits simultaneously in 
                            2 of more states

     Present law
       Current law states that any person who knowingly and 
     willfully makes or causes to be made any false statements or 
     misrepresentations in applying for or continuing to receive 
     Supplemental Security Income (SSI) payments may be subject to 
     a civil monetary penalty or be fined or imprisoned pursuant 
     to title 18, U.S. Code.
     House bill
       Any person convicted in Federal court or State court of 
     having fraudulently misrepresented residence in order to 
     obtain benefits or services from two or more States under 
     title IV, title XV, title XIX, or the Food Stamp Act of 1977, 
     or benefits in 2 or more States from the SSI program, is 
     ineligible for SSI benefits for 10 years. In addition, an 
     official of the court in which the individual was convicted 
     is required to notify the Commissioner of such conviction.
     Senate amendment
       Identical to House Bill.
     Conference agreement
       The conference agreement follows the House bill.


3. denial of ssi benefits for fugitive felons and probation and parole 
                               violators

     Present law
       Current law provides safeguards which restrict the use or 
     disclosure of information concerning SSI applicants or 
     recipients to purposes directly connected with the 
     administration of the SSI program or other federally-funded 
     programs.
     House bill
       No individual who is fleeing to avoid prosecution, custody 
     or confinement after conviction for a crime (or an attempt to 
     commit a crime) that is a felony (or, in New Jersey, a high 
     misdemeanor), or who violates probation or parole imposed 
     under Federal or State, law shall be eligible for SSI 
     benefits.
       The Social Security Administration (SSA) shall furnish the 
     current address, Social Security number, and photograph (if 
     applicable) of a recipient to any Federal, State, or local 
     law enforcement officer who is pursuing a fugitive felon or 
     parole or probation violator. This provision applies also to 
     a recipient sought by an officer because the recipient has 
     information necessary to the officer's official duties.
     Senate amendment
       Identical to House Bill.
     Conference agreement
       The conference agreement follows the House bill with 
     technical modification.


                       4. treatment of prisoners

 Implementation of Prohibition Against Payment of Benefits to Prisoners

     Present law
       Current law prohibits prisoners from receiving benefits 
     while incarcerated. Federal, State, or county or local 
     prisons are required to make available, upon written request, 
     the name and Social Security account number of any individual 
     who is confined in a penal institution or correctional 
     facility and convicted of any crime punishable by 
     imprisonment of more than 1 year.
     House bill
       The Commissioner shall enter into an agreement with any 
     interested State or local institution (defined as a jail, 
     prison, other correctional facility, or institution where the 
     individual is confined due to court order) under which the 
     institution shall provide monthly the names, Social Security 
     account numbers, dates of birth, confinement dates, and other 
     identifying information. The Commissioner shall pay to the 
     institution for each eligible individual who becomes 
     ineligible $400 if the information is provided within 30 days 
     of the individual becoming an inmate. The payment is $200 if 
     the information is furnished after 30 days but within 90 
     days.
       In addition, the Computer Matching and Privacy Protection 
     Act of 1988 shall not apply to the information exchanged 
     pursuant to this contract.
       The Commissioner is authorized to provide, on a 
     reimbursable basis, information obtained pursuant to 
     agreements to any Federal or federally assisted cash, food, 
     or medical assistance program for eligibility purposes.
       The dollar amounts paid to the institution shall be reduced 
     by 50 percent if the Commissioner is also required to make a 
     payment with respect to the same individual based on 
     eligibility for Social Security disability insurance 
     benefits.
       Payments to institutions shall be made from funds otherwise 
     available for the payment of benefits.
     Senate amendment
       The Senate amendment is similar to the House bill, however, 
     it deletes all references to OASDI programs (due to Senate 
     rule) and does not include the provision for the Commissioner 
     to provide information to other Federal or federally assisted 
     programs.
     Conference agreement
       The conference agreement follows the House bill, except 
     that all OASDI references are deleted.

     Denial of SSI Benefits for 10 Years to a Person Found to Have 
           Fraudulently Obtained SSI Benefits While in Prison

     Present law
       No provision.

[[Page H8913]]

     House bill
       No provision.
     Senate amendment
       Denies benefits for 10 years (beginning the date of release 
     from prison) to a person found to have fraudulently obtained 
     SSI benefits while in prison. This provision is effective on 
     the date of enactment.
     Conference agreement
       The conference agreement follows the House bill (i.e., no 
     provision).

  Elimination of OASDI Requirement that Confinement Stem From Crimes 
            Punishable by Imprisonment for More Than 1 Year

     Present law
       Bars Social Security benefits from prisoners convicted of 
     any crime punishable by imprisonment of more than a year, not 
     just felonies.
     House bill
       Replaces ``an offense punishable by imprisonment for more 
     than 1 year'' with ``a criminal offense'' and deletes other 
     language. Effective for benefits payable more than 180 days 
     after the date of enactment. It bars Social Security benefits 
     from persons confined, throughout a month, to (1) a penal 
     institution or (2) other institution if the person is found 
     guilty but insane.
     Senate amendment
       No provision, due to Senate rule.
     Conference agreement
       The conference agreement follows the Senate amendment 
     (i.e., no provision).

Study of Other Potential Improvements in the Collection of Information 
                       Respecting Public Inmates

     Present law
       No provision.
     House bill
       The Commissioner shall conduct a study of the desirability, 
     feasibility, and cost of establishing a system for courts to 
     furnish the Commissioner information regarding court orders 
     and requiring that State and local jails, prisons, and other 
     institutions enter into agreements with the Commissioner by 
     means of an electronic or similar data exchange system. The 
     report of this study shall be submitted to the responsible 
     Committees not later than 1 year after enactment.
       Not later than October 1, 1998, the Commissioner of Social 
     Security shall provide to the responsible Committees of 
     Congress a list of institutions that are and are not 
     providing information to the Commissioner in accordance with 
     these provisions.
     Senate amendment
       The Senate amendment is identical to the House bill except 
     uses the term ``contract'' instead of ``agreement.''
       There is no provision for the Commissioner to provide a 
     list of institutions who are or are not in compliance with 
     these provisions.
     Conference agreement
       The conference agreement follows the House bill.


             5. Effective Date of Application for Benefits

     Present law
       The application of an individual for SSI benefits is 
     effective on the later of the date the application is filed 
     or the date the individual first becomes eligible for such 
     benefits.
     House bill
       Changes the effective date of application to the later of 
     the first day of the month following the date the application 
     is filed or the date the individual first becomes eligible 
     for such benefits. The provision expands SSA's authority to 
     issue an immediate cash advance to individuals faced with 
     financial emergencies. Effective for applications filed on or 
     after the date of enactment.
     Senate amendment
       Identical to House bill.
     Conference agreement
       The conference agreement follows the House bill with 
     technical modifications.

               Subtitle B--Benefits for Disabled Children


                  6. Definition and Eligibility Rules

       Definition of Childhood Disability
     Present law
       There is no definition of childhood disability in the 
     statute. Instead, the statute prescribes that an individual 
     under age 18 shall be considered disabled for purposes of 
     eligibility for SSI if that individual has an impairment or 
     combination of impairments of ``comparable severity'' which 
     would result in a work disability in an adult. This 
     impairment or combination of impairments must be expected to 
     result in death or to last for a continuous period of not 
     less than 12 months.
     House bill
       This section adds a new statutory definition of childhood 
     disability: an individual under the age of 18 is considered 
     as disabled if the 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 at least a continuous period of not less than 12 
     months.
       The Commissioner shall ensure that the combined effects of 
     all physical or mental impairments of an individual are taken 
     into account in determining whether an individual is 
     disabled. In addition, the Commissioner shall ensure that the 
     regulations prescribed by these provisions provide for the 
     evaluation of children who cannot be tested because of their 
     young age.
     Senate amendment
       Identical to House bill regarding the new definition of 
     disability. The provision does not include language regarding 
     combined impairments or evaluation of children who cannot be 
     tested because of their young age.
     Conference agreement
       The conference agreement follows the Senate amendment. The 
     conferees intend that only needy children with severe 
     disabilities be eligible for SSI, and the Listing of 
     Impairments and other current disability determination 
     regulations as modified by these provisions properly reflect 
     the severity of disability contemplated by the new statutory 
     definition. In those areas of the Listing that involve 
     domains of functioning, the conferees expect no less than two 
     marked limitations as the standard for qualification. The 
     conferees are also aware that SSA uses the term ``severe'' to 
     often mean ``other than minor'' in an initial screening 
     procedure for disability determination and in other places. 
     The conferees, however, use the term ``severe'' in its common 
     sense meaning.
       In addition, the conferees expect that SSA will properly 
     observe the requirements of section 1614 (a)(3)(F) of the 
     Social Security Act and ensure that the combined effects of 
     all the physical or mental impairments of an individual under 
     age 18 are taken into account in making a determination 
     regarding eligibility under the definition of disability. The 
     conferees note that the 1990 Supreme Court decision in Zebley 
     established that SSA had been previously remiss in this 
     regard. The conferees also expect SSA to continue to use 
     criteria in its Listing of Impairments and in the application 
     of other determination procedures, such as functional 
     equivalence, to ensure that young children, especially 
     children too young to be tested, are properly considered for 
     eligibility of benefits.
       The conferees recognize that there are rare disorders or 
     emerging disorders not included in the Listing of Impairments 
     that may be of sufficient severity to qualify for benefits. 
     Where appropriate, the conferees remind SSA of the importance 
     of the use of functional equivalence disability determination 
     procedures.
       Nonetheless, the conferees do not intend to suggest by this 
     definition of childhood disability that every child need be 
     especially evaluated for functional limitations, or that this 
     definition creates a supposition for any such examination. 
     Under current procedures for writing individual listings, 
     level of functioning is an explicit consideration in deciding 
     which impairment, with certain medical or other findings, is 
     of sufficient severity to be included in the Listing. 
     Nonetheless, the conferees do not intend to limit the use of 
     functional information, if reflecting sufficient severity and 
     is otherwise appropriate.
       The conferees contemplate that Congress may revisit the 
     definition of childhood disability and the scope of benefits, 
     if deemed appropriate, and have provided elsewhere for 
     studies on these issues.

         Requests for Comments to Improve Disability Evaluation

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       Requires the Commissioner to request 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.
     Conference agreement
       The conference agreement follows the House bill (i.e., no 
     provision).

                  Changes to SSI Childhood Regulations

     Present law
       Under the disability determination process for children, 
     SSA first determines if a child meets or equals the ``Listing 
     of Impairments'' in Federal regulations. Under the Listings 
     that relate to mental disorders, maladaptive behavior may be 
     scored twice, in domains of social functioning and of 
     personal/behavior functioning.
       Under the disability determination process for children, 
     individuals who do not meet or equal the Listing of 
     Impairments are subject to an ``Individualized Functional 
     Assessment'' (IFA). This assessment is intended to determine 
     whether, or to what extent, a child can engage in age-
     appropriate activities. If the child cannot, the child may be 
     determined disabled.
     House bill
       The Commissioner of Social Security shall eliminate 
     references in the Listing of Impairments to maladaptive 
     behavior among medical criteria for evaluation of mental and 
     emotional disorders in the domain of personal/behavioral 
     function.
       The Commissioner of Social Security shall discontinue use 
     of the Individualized Functional Assessment for children set 
     forth in the Code of Federal Regulations.
     Senate amendment
       Identical to House bill.
     Conference agreement
       The conference agreement follows the House bill.

[[Page H8914]]

Medical Improvement Review Standard as it Applies to Individuals Under 
                             the Age of 18

     Present law
       No provision.
     House bill
       This section contains technical modifications to the 
     medical improvement review standard based on the new 
     definition of childhood disability.
     Senate amendment
       Identical to the House bill.
     Conference agreement
       The conference agreement follows the House bill.
     Effective dates
     Present law
       No provision.
     House bill
       Changes in eligibility rules apply to new applications and 
     pending requests for administrative or judicial review on or 
     after the date of enactment, without regard to whether 
     regulations have been issued.
       No later than 1 year after the date of enactment, the 
     Commissioner shall redetermine the eligibility of any child 
     receiving benefits on the date of enactment who would lose 
     eligibility under these provisions.
       Benefits of current recipients will continue until their 
     redetermination. Should a child be found ineligible, their 
     benefits will end following redetermination.
       No later than January 1, 1997, the Commissioner must notify 
     individuals whose eligibility for SSI benefits will 
     terminate.
       The Commissioner must report to Congress within 180 days 
     regarding progress made in implementing the SSI children's 
     provisions.
       The Commissioner shall submit final regulations to the 
     Committees of jurisdiction of Congress for their review at 
     least 45 days before they become effective.
     Senate amendment
       Identical to the House bill, except that benefits of 
     current recipients will continue until the later of July 1, 
     1997, or the date of redetermination. The Senate amendment 
     also includes language which authorizes and appropriates $300 
     million to remain available for fiscal year 1997-1999 for the 
     Commissioner to conduct continuing disability reviews (CDRs) 
     and redeterminations.
     Conference agreement
       The conference agreement follows the Senate amendment with 
     modification to authorize additional administrative funding 
     for SSA: $150 million for fiscal year 1997 and $100 million 
     for fiscal year 1998, to conduct SSI CDRs and 
     redeterminations. The funding of CDRs and redeterminations 
     will follow the usual appropriation process, except that the 
     amounts above a base funding level will not be subject to 
     discretionary caps.


   7. Eligibility Redeterminations and Continuing Disability Reviews

     Present law
       Current law specifies that the Commissioner must reevaluate 
     under adult disability criteria the eligibility of at least 
     one-third of SSI children who turn age 18 in each of the 
     fiscal years 1996, 1997, and 1998 (the CDR must be completed 
     before these children reach age 19) and report to Congress no 
     later than October 1, 1998.
     House bill
       At least once every 3 years the Commissioner must conduct 
     CDRs of children receiving SSI benefits. For children who are 
     eligible for benefits and whose medical condition is not 
     expected to improve, the requirement to perform such reviews 
     does not apply (unless the Commissioner decides otherwise). 
     At the time of review the parent or guardian must present 
     evidence demonstrating that the recipient is and has been 
     receiving appropriate treatment for her disability.
       The eligibility for all children qualifying for SSI 
     benefits must be redetermined using the adult criteria within 
     1 year after turning 18 years of age. The review will be 
     considered a substitute for any other review required under 
     the changes made in this section. The ``minimum number of 
     reviews'' and the ``sunset'' provisions of section 207 of the 
     Social Security Independence and Program Improvements Act of 
     1994 are eliminated.
       A review must be conducted 12 months after the birth of a 
     child whose low birth weight is a contributing factor to the 
     child's disability. At the time of review, the parent or 
     guardian must present evidence demonstrating that the 
     recipient is and has been receiving appropriate treatment for 
     his disability.
     Senate amendment
       Identical to House bill.
     Conference agreement
       The conference agreement follows the House bill.


               8. Additional Accountability Requirements

         Disposal of Resources for Less Than Fair Market Value

     Present law
       No provision.
     House bill
       The bill delays eligibility for any child applicant whose 
     parents or guardians, in order to qualify a child for 
     benefits, dispose of assets for less than fair market value 
     within 36 months of the date of application. The provision 
     stipulates that any assets in a trust in which the child 
     (i.e., parent or representative payee) has control shall be 
     considered assets of the child and subject to the 36-month 
     ``look-back'' rule. The delay (in months) is equal to the 
     amount of assets divided by the SSI standard benefit. This 
     provision is effective 90 days after the date of enactment.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the Senate amendment 
     (i.e., no provision).

                   Treatment of Assets Held in Trust

     Present law
       No provision. Under current operating policy, a trust is 
     not considered a resource if the SSI recipient does not have 
     the legal authority to access trust assets for his or her own 
     food, clothing, or shelter.
     House bill
       Stipulates that in determining the resources of an 
     individual under the age of 18, a revocable trust (i.e., the 
     person has legal access to the assets of the trust) must be 
     considered a resource available to the individual. In the 
     case of an irrevocable trust, if there are any circumstances 
     under which payment from the trust could be made to or for 
     the benefit of the individual, then such payments are to be 
     considered as resource available to the individual. The 
     Commissioner of Social Security may waive these provisions if 
     the Commissioner determines, on the basis of criteria 
     prescribed in regulations, that such application would be an 
     undue hardship on the individual.
       Any earnings of, or additions to the principal of the trust 
     would be considered income if they are available to the 
     individual.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the Senate amendment 
     (i.e., no provision).

                    Requirement to Establish Account

     Present law
       No provision.
     House Bill
       Requires the representative payee (i.e., the parent) of an 
     individual under the age of 18 to establish an account in a 
     financial institution for the receipt of past-due SSI 
     payments if the lump-sum payment amounts to more than 6 times 
     the maximum monthly SSI payment (including any State 
     supplement). A representative payee shall use the funds in 
     the account for the following expenses: education or job 
     skills training; personal needs assistance; special equipment 
     or housing modifications related to the child's disability; 
     medical treatment; appropriate therapy or rehabilitation; or 
     any other item or service that the Commissioner determines is 
     appropriate.
       Once the account is established the representative payee 
     may deposit any past-due benefits owed to the recipient and 
     any other funds representing an SSI underpayment provided the 
     amount is more than the maximum monthly SSI benefit payment.
       The funds in these accounts would not be counted as a 
     resource and the interest and other earnings on the account 
     would not be considered income in determining SSI 
     eligibility.
     Senate amendment
       Identical to House provision, except allows rather than 
     mandates the representative payee to use the funds for 
     allowable expenses.
     Conference agreement
       The conference agreement follows the House bill.


9. Reduction in Cash Benefits Payable to Institutionalized Individuals 
          Whose Medical Costs Are Covered by Private Insurance

     Present law
       Federal law stipulates that when individuals enter a 
     hospital or other medical institution for which more than 
     half of the bill is paid by the Medicaid program, their 
     monthly SSI benefit is reduced to $30 per month. This 
     personal needs allowance is intended to pay for small 
     personal expenses, with the cost of maintenance and medical 
     care provided by the Medicaid program.
     House bill
       Children in medical institutions whose medical costs are 
     covered by private insurance would be treated the same as 
     children whose bills are currently paid by Medicaid (that is, 
     their monthly SSI cash benefit would be reduced to $30 per 
     month).
     Senate amendment
       Identical to House bill.
     Conference agreement
       The conference agreement follows the House bill.


                            10. Regulations

     Present law
       No provision.
     House bill
       The Commissioner of Social Security and the Secretary of 
     HHS will prescribe necessary regulations within three months 
     after enactment.
     Senate amendment
       Identical to House bill.
     Conference agreement
       The conference agreement follows the House bill.

             Subtitle C--Additional Enforcement Provisions


         11. Installment Payment of Large Past-Due SSI Benefits

     Present law
       No provision.

[[Page H8915]]

     House bill
       If an individual is eligible for past-due benefits (after 
     any withholding for reimbursement to a State for interim 
     assistance) in an amount which exceeds 12 times the maximum 
     monthly benefit payable to an eligible individual (currently 
     $470) or couple (currently $705) (plus any State 
     supplementary payments), benefits will be paid in 3 
     installments made at 6-month intervals. The first and second 
     installments may not exceed 12 times the maximum monthly 
     benefit payable. Installment caps may be extended by certain 
     debt (food, clothing, shelter, or medically necessary 
     services, supplies, or equipment, or medicine) or the 
     purchase of a home. Installment payments shall not apply to 
     individuals whose medical impairment is expected to result in 
     death in 12 months or for an individual who is ineligible and 
     is likely to remain ineligible for the next 12 months.
     Senate amendment
       Identical to House bill.
     Conference agreement
       The conference agreement follows the House bill.


     12. Recovery of SSI Overpayments from Social Security Benefits

     Present law
       Generally, when an overpayment of Social Security benefits 
     is made, recovery shall be made by adjusting future payments 
     or by recovering the overpayment from the individual.
     House bill
       If the Commissioner is unable to recover the overpayment 
     through future payment adjustments or direct recovery, the 
     Commissioner may decrease any OASI or SSDI payment to the 
     individual or their estate. As a result of this action, no 
     individual may become eligible for SSI or eligible for 
     increased SSI benefits.
     Senate amendment
       No provision (due to Senate rule).
     Conference agreement
       The conference agreement follows the Senate amendment 
     (i.e., no provision).


                            13. Regulations

     Present Law
       No provision.
     House bill
       The Commissioner of Social Security and the Secretary of 
     HHS will prescribe necessary regulations within 3 months 
     after enactment.
     Senate amendment
       Identical to House bill.
     Conference agreement
       The conference agreement follows the House bill.


14. Repeal of Maintenance of Effort Requirements Applicable to Optional 
               State Programs for Supplementation of SSI

     Present law
       Since the beginning of the SSI program, States have had the 
     option to supplement (with State funds) the Federal SSI 
     payment. Subsequently, Congress passed section 1618 of the 
     Social Security Act which in effect requires States to 
     maintain such optional payments or lose eligibility for 
     Medicaid funds. The purpose of section 1618 of the Social 
     Security Act was to encourage States to pass along to SSI 
     recipients the amount of any Federal SSI benefit increase. 
     Section 1618 allows States to comply with the ``pass along/ 
     maintenance of effort'' provision by either maintaining their 
     State supplementary payment levels at or above March 1983, 
     levels or by maintaining their supplementary payment spending 
     so that total annual Federal and State expenditures will be 
     at least equal to what they were in the prior 12-month 
     period, plus any Federal cost-of-living increase, provided 
     the State was in compliance for that period.
     House bill
       Repeals the maintenance of effort requirements in Section 
     1618 applicable to optional State programs for 
     supplementation of SSI benefits, effective on the date of 
     enactment.
     Senate amendment
       No provision, due to Senate rule.
     Conference agreement
       The conference agreement follows the Senate amendment 
     (i.e., no provision).

   Subtitle D--Studies Regarding Supplemental Security Income Program


     15. Annual Report on the Supplemental Security Income Program

     Present law
       The Social Security Administration collects and publishes 
     limited data on the SSI program.
     House bill
       The Commissioner of Social Security must prepare and 
     provide to the President and the Congress an annual report on 
     the SSI program, which includes specified information and 
     data. The report is due May 30 of each year.
     Senate amendment
       Identical to the House bill, except stipulates the 
     inclusion of historical and correct data on prior enrollment 
     by public assistance recipients.
     Conference agreement
       The conference agreement follows the House bill, modified 
     by the Senate amendment.


             16. Study of Disability Determination Process

     Present law
       No provision.
     House bill
       Within 90 days of enactment, the Commissioner must contract 
     with the National Academy of Sciences or another independent 
     entity to conduct a comprehensive study of the disability 
     determination process for SSI and SSDI. The study must 
     examine the validity, reliability and consistency with 
     current scientific standards of the Listings of Impairments 
     cited above. The study must also examine the appropriateness 
     of the definitions of disability (and possible alternatives) 
     used in connection with SSI and SSDI, and the operation of 
     the disability determination process, including the 
     appropriate method of performing comprehensive assessments of 
     individuals under age 18 with physical or mental impairments. 
     The Commissioner must issue interim and final reports of the 
     findings and recommendations of the study within 18 months 
     and 24 months, respectively, from the date of contract for 
     the study.
     Senate amendment
       No provision, due to Senate rule.
     Conference agreement
       The conference agreement follows the Senate amendment 
     (i.e., no provision).


                 17. Study by General Accounting Office

     Present law
       No provision.
     House bill
       No later than January 1, 1999, the Comptroller General of 
     the United States must study and report on the impact of the 
     amendments and provisions made by this bill, and extra 
     expenses incurred by families of children receiving benefits 
     not covered by other Federal, State, or local programs.
     Senate amendment
       Identical to House bill.
     Conference agreement
       The conference agreement follows the House bill.


          18. National Commission on the Future of Disability

     Present law
       No provision.
     House bill
       This section establishes a new Commission on the future of 
     disability.
       The Commission must study all matters related to the 
     nature, purpose and adequacy of all Federal programs for the 
     disabled (and especially SSI and SSDI), including: projected 
     growth in the number of individuals with disabilities; 
     possible performance standards for disability programs; the 
     adequacy of Federal rehabilitation research and training; and 
     the adequacy of policy research available to the Federal 
     government and possible improvements. The Commission must 
     submit to the President and the proper Congressional 
     committees recommendations and possible legislative proposals 
     effecting needed program changes.
       The Commission is to be composed of 15 members who are 
     appointed by the President and Congressional leadership and 
     who serve for the life of the Commission. Members are to be 
     chosen based on their education, training or experience, with 
     consideration for representing the diversity of individuals 
     with disabilities in the U.S. The Commission membership will 
     also reflect the general interests of the business and 
     taxpaying community.
       The Commission will have a director, appointed by the 
     Chair, and appropriate staff, resources, and facilities.
       The Commission may conduct public hearings and obtain 
     information from Federal agencies necessary to perform its 
     duties.
       The Commission must issue an interim report to Congress and 
     the President not later than 1 year prior to terminating. A 
     final public report must be submitted prior to termination.
       The Commission will terminate 2 years after first having 
     met and named a chair and vice chair.
       This section authorizes the appropriation of such funds as 
     are necessary to carry out the purposes of the Commission.
     Senate amendment
       No provision, due to Senate rule.
     Conference agreement
       The conference agreement follows the Senate amendment 
     (i.e., no provision).

                  Title III: Child Support Enforcement


                1. Reference to the Social Security Act

     Present law
       No provision.
     House bill
       Unless otherwise specified, any reference in this title to 
     an amendment to or repeal of a section or other provision is 
     to the Social Security Act.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

     Subtitle A--Eligibility for Services; Distribution of Payments


   2. State Obligation to Provide Child Support Enforcement Services

     Present law
       States are required to establish paternity for children 
     born out of wedlock if they are

[[Page H8916]]

     recipients of AFDC or Medicaid, and to obtain child and 
     spousal support payments from noncustodial parents of 
     children receiving AFDC, Medicaid benefits, or foster care 
     maintenance payments. States must provide child support 
     collection or paternity determination services to persons not 
     otherwise eligible if the person applies for services. 
     Federal law requires States to cooperate with other States in 
     establishing paternity (if necessary), locating absent 
     parents, collecting child support payments, and carrying out 
     other child support enforcement functions. In cases in which 
     a family ceases to receive AFDC, States are required to 
     provide appropriate notice to the family and continue to 
     provide child support enforcement services without requiring 
     the family to apply for services or charging an application 
     fee.
     House bill
       States must provide services, including paternity 
     establishment and establishment, modification, or enforcement 
     of support obligations, for children receiving benefits from 
     the Temporary Assistance for Needy Families block grant 
     (TANF), foster care maintenance payments, Medicaid, and any 
     child of an individual who applies for services. States must 
     enforce support obligations with respect to children in their 
     caseload and the custodial parents of such children. States 
     must also make child support enforcement services available 
     to individuals not residing within the State on the same 
     terms as to individuals residing within the State. States are 
     not required to provide services to families if the State 
     determines, taking into account the best interests of the 
     child, that good cause and other exceptions exist. The 
     provision also makes minor technical amendments to section 
     454 of the Social Security Act.
       When a family ceases to receive benefits from the TANF 
     block grant, States are required to provide appropriate 
     notice to the family and continue to provide child support 
     enforcement services without requiring the family to apply 
     for services or charging an application fee.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


              3. Distribution of Child Support Collections

     Present law
       Federal law requires that child support collections be 
     distributed as follows: First, up to the first $50 in current 
     support is paid to the AFDC family (a ``disregard'' that does 
     not affect the family's AFDC benefit or eligibility status). 
     Second, the Federal and State governments are reimbursed for 
     the AFDC benefit paid to the family in that month. Third, if 
     there is money left, the family receives it up to the amount 
     of the current month's child support obligation. Fourth, if 
     there is still money left, the State keeps it to reimburse 
     itself for any arrearages owed to it under the AFDC 
     assignment (with appropriate reimbursement of the Federal 
     share of the collection to the Federal government). If no 
     arrearages are owed the State, the money is used to pay 
     arrearages to the family; such moneys are considered income 
     under the AFDC program and would reduce the family's AFDC 
     benefit.
       To receive AFDC benefits, a custodial parent must assign to 
     the State any right to collect child support payments. This 
     assignment covers current support and any arrearages that 
     accumulated before the family began receiving public 
     assistance, and lasts as long as the family receives AFDC.
       Some States are required to provide monthly supplemental 
     payments to AFDC recipients who have less disposable income 
     now than they would have had in July 1975 because child 
     support is paid to the child support agency instead of 
     directly to the family. States required to make these 
     supplemental payments are often referred to as ``fill-the-
     gap'' States. These States pay less assistance than their 
     full need standard, and allow recipients to use child support 
     income to make up all or part of the difference between the 
     payment made by the State and the State's need standard.
     House bill
       Several changes in the distribution rules under current law 
     are made by this section. The $50 passthrough to families on 
     AFDC is ended. In addition, distribution law is changed so 
     that, beginning October 1, 1997, collections on arrearages 
     that accumulated during the period after the family leaves 
     welfare are paid to the State if the money was collected 
     through the tax intercept and to the family if collected by 
     any other method. Distribution law is also changed so that 
     beginning on October 1, 2000, arrearages that accumulated 
     during the period before the family went on welfare are paid 
     to the State if the money was collected through the tax 
     intercept and to the family if collected by any other method. 
     (Note: These new distribution rules require the assignment 
     rules for pre-welfare arrearages to be changed so that 
     families can be paid before States if the money was collected 
     by a method other than the tax intercept; this change in 
     assignment rules was made in Title I and will appear in 
     Section 408(a)(3)(B) of the revised Social Security Act.)
       By October 1, 1998, the Secretary must present a report to 
     the Congress concerning whether post-assistance arrearages 
     have helped mothers avoid welfare and about the effectiveness 
     of the new distribution rules.
       All assignments of support in effect when this proposal is 
     enacted must remain in effect.
       Several terms, including ``assistance from the State'', 
     ``Federal share'', and ``State share'' are defined.
       If States retain less money from collections than they 
     retained in fiscal year 1995, States are allowed to retain 
     the amount retained in fiscal year 1995.
       If a State follows a ``fill-the-gap'' policy as outlined 
     above, that State can continue to distribute funds to the 
     family up to the amount needed to fill the gap. The provision 
     also clarifies the relationship between gap payments and both 
     the $50 passthrough and the State hold harmless provision.
     Senate amendment
       Same, except Senate adds provision that stipulates that in 
     the case of a family receiving assistance from an Indian 
     tribe, the State distribute any support collected in 
     accordance with any cooperative agreement between the State 
     and the tribe.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment with the modification that the House accepts 
     the Senate provision on Indian tribes.


                         4. Privacy Safeguards

     Present law
       Federal law limits the use or disclosure of information 
     concerning recipients of Child Support Enforcement Services 
     to purposes connected with administering specified Federal 
     welfare programs.
     House bill
       States must implement safeguards against unauthorized use 
     or disclosure of information related to proceedings or 
     actions to establish paternity or to establish or enforce 
     child support. These safeguards must include prohibitions on 
     release of information where there is a protective order or 
     where the State has reason to believe a party is at risk of 
     physical or emotional harm from the other party. This 
     provision is effective October 1, 1997.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                  5. Right to Notification of Hearing

     Present law
       Most States have procedural due process requirements with 
     respect to wage withholding. Federal law requires States to 
     carry out withholding in full compliance with all procedural 
     due process requirements of the State.
     House bill
       Parties to child support cases under Title IV-D must 
     receive notice of proceedings in which child support might be 
     established or modified and must receive a copy of orders 
     establishing or modifying child support (or a notice that 
     modification was denied) within 14 days of issuance.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

                  Subtitle B--Locate and Case Tracking


                         6. State Case Registry

     Present law
       Federal law requires that wage withholding be administered 
     by a public agency capable of documenting payments of support 
     and tracking and monitoring such payments.
       Federal law requires that child support orders be reviewed 
     and adjusted, as appropriate, at least once every three 
     years.
     House bill
       States must establish an automated State Case Registry that 
     contains a record on each case in which services are being 
     provided by the State agency, as well as each support order 
     established or modified in the State on or after October 1, 
     1998.
       The Registry may be established by linking local case 
     registries of support orders through an automated information 
     network.
       The registry record will contain data elements on both 
     parents, such as names, Social Security numbers and other 
     uniform identification numbers, dates of birth, case 
     identification numbers, and any other data the Secretary may 
     require.
       Each case record will contain the amount of support owed 
     under the order and other amounts due or overdue (including 
     interest or late payment penalties and fees), any amounts 
     that have been collected and distributed, the birth date of 
     any child for whom the order requires the provision of 
     support, and the amount of any lien imposed by the State.
       The State agency operating the registry will promptly 
     establish, maintain, update and regularly monitor case 
     records in the registry with respect to which services are 
     being provided under the State plan. Establishing and 
     updating support orders will be based on administrative 
     actions and administrative and judicial proceedings and 
     orders relating to paternity and support, as well as on 
     information obtained from comparisons with Federal, State, 
     and local sources of information, information on support 
     collections and distributions, and any other relevant 
     information.

[[Page H8917]]

       The State automated system will be used to extract data for 
     purposes of sharing and matching with Federal and State data 
     bases and locator services, including the Federal Case 
     Registry of Child Support Orders, the Federal Parent Locator 
     Service, and Temporary Assistance for Needy Families and 
     Medicaid agencies, as well as for conducting intrastate and 
     interstate information comparisons.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


           7. Collection and Disbursement of Support Payments

     Present law
       No provision, but States may provide that, at the request 
     of either parent, child support payments be made through the 
     child support enforcement agency or the agency that 
     administers the State's income withholding system regardless 
     of whether there is an arrearage. States must charge the 
     parent who requests child support services a fee equal to the 
     cost incurred by the State for these services, up to a 
     maximum of $25 per year.
     House bill
       By October 1, 1998, State child support agencies are 
     required to operate a centralized, automated unit for 
     collection and disbursement of payments on child support 
     orders enforced by the child support agency and payments on 
     orders issued after December 31, 1993 which are not enforced 
     by the State agency but for which income is subject to 
     withholding. The specifics of how States will establish and 
     operate their State Disbursement Unit must be outlined in the 
     State plan.
       The State Disbursement Unit must be operated directly by 
     the State agency, by two or more State agencies under a 
     regional cooperative agreement, or by a contractor 
     responsible directly to the State agency. The State 
     Disbursement Unit may be established by linking local 
     disbursement units through an automated information network 
     if the Secretary agrees that the system will not cost more, 
     take more time to establish, nor take more time to operate 
     that a single State system. All States, including those that 
     operate a linked system, must give employers one and only one 
     location for submitting withheld income.
       The Disbursement Unit must be used to collect and disburse 
     support payments, to generate orders and notices of 
     withholding to employers, to keep an accurate identification 
     of payments, to promptly distribute money to custodial 
     parents or other States, and to furnish parents with a record 
     of the current status of support payments (but States are not 
     responsible for records that predate passage of this 
     legislation). The Unit shall use automated procedures, 
     electronic processes, and computer-driven technology to the 
     maximum extent feasible, efficient, and economical.
       The Disbursement Unit must distribute all amounts payable 
     within 2 business days after receiving money and identifying 
     information from the employer or other source of periodic 
     income, if sufficient information identifying the payee is 
     provided. The Unit may retain arrearages in the case of 
     appeals until they are resolved.
       States must use their automated system to facilitate 
     collection and disbursement including at least:
       (1) transmission of orders and notices to employers within 
     2 days after receipt of the withholding notice;
       (2) monitoring to identify missed payments of support; and
       (3) automatic use of enforcement procedures when payments 
     are missed.
       It is the sense of Congress that in establishing a 
     centralized unit for the collection of support payments, a 
     State should choose the method of compliance which best meets 
     the needs of parents, employers, and children.
       This section of the proposal will go into effect on October 
     1, 1998. States that process child support payments through 
     local courts can continue court payments until September 30, 
     1999.
     Senate amendment
       Same, except Senate uses the term ``wages'' rather than 
     ``income'' throughout this section. Senate amendment does not 
     include the provision that States are not responsible for 
     records that predate passage.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment with the modification that the term 
     ``income'' rather than ``wages'' is used throughout this 
     section. In addition, the House ``sense of the Congress'' 
     language was deleted.


                    8. State Directory of New Hires

     Present law
       In general, no provision. Section 1128 of the Social 
     Security Act is an antifraud provision which excludes 
     individuals and entities that have committed fraud from 
     participation in medicare and State health care programs. 
     Section 1128A pertains to civil monetary penalties and 
     describes the appropriate procedures and proceedings for such 
     penalties.
     House bill
       State plans must include the provision that by October 1, 
     1997 States will operate a Directory of New Hires.
       Establishment. States are required to establish a State 
     Directory of New Hires to which employers and labor 
     organizations in the State must furnish a report for each 
     newly hired employee, unless reporting could endanger the 
     safety of the employee or compromise an ongoing investigation 
     or intelligence mission as determined by the head of an 
     agency. States that already have new hire reporting laws may 
     continue to follow the provisions of their own law until 
     October 1, 1998, at which time States must conform to Federal 
     law.
       Employer Information. Employers must furnish to the State 
     Directory of New Hires the name, address, and Social Security 
     number of every new employee and the name, address, and 
     identification number of the employer. Multistate employers 
     that report electronically or magnetically may report to the 
     single State they designate; such employers must notify the 
     Secretary of the name of the designated State. Agencies of 
     the U.S. Government must report directly to the National 
     Directory of New Hires (see below).
       Timing of Report. Employers must report new hire 
     information within 20 days of the date of hire. Employers 
     that report new hires electronically or by magnetic tape must 
     file twice per month; reports must be separated by not less 
     than 12 days and not more than 16 days.
       Reporting Format and Method. The report required in this 
     section will be made on a W-4 form or the equivalent, and can 
     be transmitted magnetically, electronically, or by first 
     class mail. The decision of which reporting method to use is 
     up to employers.
       Civil Money Penalties on Noncomplying Employers. States 
     have the option of setting a civil money penalty which shall 
     be not less than $25 or $500 if, under State law, the failure 
     is the result of a conspiracy between the employer and 
     employee.
       Entry of Employer Information. New hire information must be 
     entered in the State data base within 5 business days of 
     receipt from employer.
       Information Comparisons. By May 1, 1998, each State 
     Directory of New Hires must conduct automated matches of the 
     Social Security numbers of reported employees against the 
     Social Security numbers of records in the State Case Registry 
     being enforced by the State agency and report the name, 
     address, Social Security number, and the employer name, 
     address, and identification number on matches to the State 
     child support agency.
       Transmission of Information. Within 2 business days of the 
     entry of data in the registry, the State must transmit a 
     withholding order directing the employer to withhold wages in 
     accord with the child support order. Within 3 days, the State 
     Directory of New Hires must furnish employee information to 
     the National Directory of New Hires for matching with the 
     records of other State case registries. The State Directory 
     of New Hires must also report quarterly to the National 
     Directory of New Hires information on wages and unemployment 
     compensation taken from the quarterly report to the Secretary 
     of Labor now required by Title III of the Social Security 
     Act.
       Other Uses of New Hire Information. The State child support 
     agency must use the new hire information to locate 
     individuals for purposes of establishing paternity as well as 
     establishing, modifying, and enforcing child support 
     obligations. New hire information must also be disclosed to 
     the State agency administering the Temporary Assistance for 
     Needy Families, Medicaid, Unemployment Compensation, Food 
     Stamp, SSI, and territorial cash assistance programs for 
     income eligibility verification, and to State agencies 
     administering unemployment and workers' compensation programs 
     to assist determinations of the allowability of claims. State 
     and local government agencies must participate in quarterly 
     wage reporting to the State employment security agency unless 
     the agency performs intelligence or counterintelligence 
     functions and it is determined that wage reporting could 
     endanger the safety of the employee or compromise an ongoing 
     investigation or intelligence mission. States may disclose 
     new hire information to agencies working under contract with 
     the child support agency.
       Disclosure to Certain Agents. States using private 
     contractors are allowed to share information obtained from 
     the Directory of New Hires with private entities working 
     under contract with the State agency. Private contractors 
     must comply with privacy safeguards.
     Senate amendment
       Same, except under ``Other Uses of New Hire Information'' 
     Senate Amendment has no provision allowing States to share 
     information with agencies working under contract with the 
     State.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment with the modification that the House 
     provision allowing private entities working under contract 
     with child support agencies access to child support 
     information is included.


              9. Amendments Concerning Income Withholding

     Present law
       Since November 1, 1990, all new or modified child support 
     orders that were being enforced by the State's child support 
     enforcement agency have been subject to immediate income 
     withholding. If the noncustodial parent's wages are not 
     subject to income withholding (pursuant to the November 1, 
     1990

[[Page H8918]]

     provision), such parent's wages would become subject to 
     withholding on the date when support payments are 30 days 
     past due. Since January 1, 1994, the law has required States 
     to use immediate income withholding for nearly all new or 
     modified support orders, regardless of whether a parent has 
     applied for child support enforcement services. There are two 
     circumstances in which income withholding does not apply: 1) 
     one of the parents argues, and the court or administrative 
     agency agrees, that there is good cause not to do so, or 2) a 
     written agreement is reached between both parents which 
     provides for an alternative arrangement. States must 
     implement procedures under which income withholding for child 
     support can occur without the need for any amendment to the 
     support order or for any further action by the court or 
     administrative entity that issued the order. States are also 
     required to implement income withholding in full compliance 
     with all procedural due process requirements of the State, 
     and States must send advance notice to each nonresident 
     parent to whom income withholding applies (with an exception 
     for some States that had income withholding before enactment 
     of this provision that met State due process requirements). 
     States must extend their income withholding systems to 
     include out-of-State support orders.
     House bill
       States must have laws providing that all child support 
     orders issued or modified before October 1, 1996, which are 
     not otherwise subject to income withholding, will become 
     subject to income withholding immediately if arrearages 
     occur, without the need for judicial or administrative 
     hearing. State law must also allow the child support agency 
     to execute a withholding order through electronic means and 
     without advance notice to the obligor. Employers must remit 
     to the State Disbursement Unit, in a format prescribed by the 
     Secretary, income withheld within five working days after the 
     date such amount would have been paid to the employee. 
     Employers cannot take disciplinary action against employees 
     subject to wage withholding. All child support orders subject 
     to income withholding, including those which are not part of 
     the State IV-D program, must be processed through the State 
     Disbursement Unit. In addition, States must notify 
     noncustodial parents that income withholding has commenced 
     and inform them of procedures for contesting income 
     withholding. Employers must follow the withholding terms and 
     conditions stated in the order; if the terms and conditions 
     are not specified employers should follow those of the State 
     in which the obligor lives. The section includes a definition 
     of income to be used in interstate withholding and several 
     conforming amendments to section 466 of the Social Security 
     Act.
     Senate amendment
       Same, except employers must remit income withheld to the 
     State disbursement unit within 7 rather than 5 days. There 
     are also minor wording differences in the rules relating to 
     income withholding. There is also a difference in the House 
     and Senate definitions of income.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment with the modifications that employers are 
     given 7 days rather than 5 days to remit withheld income and 
     that the House definition of income is followed. With respect 
     to this provision, ``timely-paid'' is demonstrated by 
     postmark, or in the case of electronic payment, the date the 
     electronic transmission is proven to have been initiated by 
     the employer.


            10. Locator Information from Interstate Networks

     Present law
       No provision.
     House bill
       All State and the Federal Child Support Enforcement 
     agencies must have access to the motor vehicle and law 
     enforcement locator systems of all States.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


          11. Expansion of the Federal Parent Locator Service

     Present law
       The law requires that the Federal Parent Locator Service 
     (FPLS) be used to obtain and transmit information about the 
     location of any absent parent when that information is to be 
     used for the purpose of enforcing child support. Federal law 
     also requires departments or agencies of the United States to 
     be reimbursed for costs incurred in providing requested 
     information to the FPLS.
       Information Comparisons and Other Disclosures. Upon 
     request, the Secretary must provide to an ``authorized 
     person'' (i.e., an employee or attorney of a child support 
     agency, a court with jurisdiction over the parties involved, 
     the custodial parent, the legal guardian, or the child's 
     attorney) the most recent address and place of employment of 
     any nonresident parent if the information is contained in the 
     records of the Department of Health and Human Services or can 
     be obtained from any other department or agency of the United 
     States or of any State. The FPLS also can be used in 
     connection with the enforcement or determination of child 
     custody, visitation, and parental kidnapping. Federal law 
     requires the Secretary of Labor and the Secretary of Health 
     and Human Services to enter into an agreement to give the 
     FPLS prompt access to wage and unemployment compensation 
     claims information useful in locating a noncustodial parent 
     or his employer.
       Fees. ``Authorized persons'' who request information from 
     FPLS must be charged a fee.
       Restriction on Disclosure and Use. Federal law stipulates 
     that no information shall be disclosed if the disclosure 
     would contravene the national policy or security interests of 
     the United States or the confidentiality of Census data.
       Quarterly Wage Reporting. The Secretary of Labor must 
     provide prompt access by the Secretary of HHS to wage and 
     unemployment compensation claims information and data 
     maintained by the Labor Department or State employment 
     security agencies.
     House bill
       The purposes of the Federal Parent Locator Service are 
     expanded. For the purposes of establishing parentage, 
     establishing support orders or modifying them, or enforcing 
     support orders, the Federal Parent Locator Service will 
     provide information to locate individuals who owe child 
     support or against whom an obligation is sought or to whom 
     such an obligation is owed. Information in the FPLS includes 
     Social Security number, address, name and address of 
     employer, wages and employee benefits (including information 
     about health care coverage), and information about assets and 
     debts. The provision also clarifies the statute so that 
     parents with orders providing child custody or visitation 
     rights are given access to information from the FPLS unless 
     the State has notified the Secretary that there is reasonable 
     evidence of domestic violence or child abuse or that the 
     information could be harmful to the custodial parent or 
     child.
       The Secretary is authorized to set reasonable rates for 
     reimbursing Federal and State agencies for the costs of 
     providing information to the FPLS and to set reimbursement 
     rates that State and Federal agencies that use information 
     from the FPLS must pay to the Secretary.
       Federal Case Registry of Child Support Orders. Establishes 
     within the FPLS an automated registry known as the Federal 
     Case Registry of Child Support Orders. The Federal Case 
     Registry contains abstracts of child support orders and other 
     information specified by the Secretary (such as names, Social 
     Security numbers or other uniform identification numbers, and 
     State case identification numbers) to identify individuals 
     who owe or are owed support, or for or against whom support 
     is sought to be established, and the State which has the 
     case. States must begin reporting this information in accord 
     with regulations issued by the Secretary by October 1, 1998.
       National Directory of New Hires. This provision establishes 
     within the FPLS a National Directory of New Hires containing 
     information supplied by State Directories of New Hires. When 
     fully implemented, the Federal Directory of New Hires will 
     contain identifying information on virtually every person who 
     is hired in the United States. In addition, the FPLS will 
     contain quarterly data supplied by the State Directory of New 
     Hires on wages and Unemployment Compensation paid. The 
     Secretary of the Treasury must have access to information in 
     the Federal Directory of New Hires for the purpose of 
     administering section 32 of the Internal Revenue Code and the 
     Earned Income Credit. The information for the National 
     Directory of New Hires must be entered within 2 days of 
     receipt, and requires the Secretary to maintain within the 
     National Directory of New Hires a list of multistate 
     employers that choose to send their report to one State and 
     the name of the State so elected. The Secretary must 
     establish a National Directory of New Hires by October 1, 
     1997.
       Information Comparisons and Other Disclosures. The 
     Secretary must verify the accuracy of the name, Social 
     Security number, birth date, and employer identification 
     number of individuals in the Federal Parent Locator Service 
     with the Social Security Administration. The Secretary is 
     required to match data in the National Directory of New Hires 
     against the child support order abstracts in the Federal Case 
     Registry at least every 2 working days and to report 
     information obtained from matches to the State child support 
     agency responsible for the case within 2 days. The 
     information is to be used for purposes of locating 
     individuals to establish paternity, and to establish, modify, 
     or enforce child support orders. The Secretary may also 
     compare information across all components of the FPLS to the 
     extent and with the frequency that the Secretary determines 
     will be effective. The Secretary will share information from 
     the FPLS with several potential users including State 
     agencies administering the Temporary Assistance for Needy 
     Families program, the Commissioner of Social Security (to 
     determine the accuracy of Social Security and Supplemental 
     Security Income), and researchers under some circumstances.
       Fees. The Secretary must reimburse the Commissioner of 
     Social Security for costs incurred in performing verification 
     of Social Security information and States for submitting 
     information on New Hires. States or Federal agencies that use 
     information from FPLS must pay fees established by the 
     Secretary.

[[Page H8919]]

       Restriction on Disclosure and Use. Information from the 
     FPLS cannot be used for purposes other than those provided in 
     this section, subject to section 6103 of the Internal Revenue 
     Code (confidentiality and disclosure of returns and return 
     information).
       Information Integrity and Security. The Secretary must 
     establish and use safeguards to ensure the accuracy and 
     completeness of information from the FPLS and restrict access 
     to confidential information in the FPLS to authorized persons 
     and purposes.
       Federal Government Reporting. Each department of the U.S. 
     must submit the name, Social Security number, and wages paid 
     the employee on a quarterly basis to the FPLS. Quarterly wage 
     reporting must not be filed for a Federal or State employee 
     performing intelligence or counter-intelligence functions if 
     it is determined that filing such a report could endanger the 
     employee or compromise an ongoing investigation.
       Conforming Amendments. This section makes several 
     conforming amendments to Titles III and IV of the Social 
     Security Act, to the Federal Unemployment Tax Act, and to the 
     Internal Revenue Code. Among the more important are that: 
     State employment security agencies are required to report 
     quarterly wage information to the Secretary of HHS or suffer 
     financial penalties and that private agencies working under 
     contract to State child support agencies can have access to 
     certain specified information from IRS records under some 
     circumstances.
       Requirement for Cooperation. The Secretaries of HHS and 
     Labor must work together to develop cost-effective and 
     efficient methods of accessing information in the various 
     directories required by this title; they must also consider 
     the need to ensure the proper and authorized use of wage 
     record information.
     Senate amendment
       Same, except under ``Information Comparisons and Other 
     Disclosures'' the Senate amendment drops the requirement that 
     the Social Security Administration must determine the 
     accuracy of payments under the Social Security and SSI 
     programs.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment with the modification that the agreement 
     follows the Senate provision dropping the requirement that 
     the Social Security Administration determine the accuracy of 
     Social Security and SSI payments.


  12. Collection and Use of Social Security Numbers for Use in Child 
                          Support Enforcement

     Present law
       Federal law requires that in the administration of any law 
     involving the issuance of a birth certificate, States must 
     require each parent to furnish their Social Security number 
     for the birth records. The State is required to make such 
     numbers available to child support agencies in accordance 
     with Federal or State law. States may not place Social 
     Security numbers directly on birth certificates.
     House bill
       States must have procedures for recording the Social 
     Security numbers of applicants on the application for 
     professional licenses, commercial driver's licenses, 
     occupational licenses, and marriage licenses. States must 
     also record Social Security numbers in the records of divorce 
     decrees, child support orders, and paternity determination or 
     acknowledgment orders. Individuals who die will have their 
     Social Security number placed in the records relating to the 
     death and recorded on the death certificate. There are 
     several conforming amendments to title II of the Social 
     Security Act.
     Senate amendment
       Same, except difference in conforming amendment to Social 
     Security Act.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

         Subtitle C--Streamlining and Uniformity of Procedures


                   13. Adoption of Uniform State Laws

     Present law
       States have several options available for pursuing 
     interstate child support cases including direct income 
     withholding, interstate income withholding, and long-arm 
     statutes which require the use of the court system in the 
     State of the custodial parent. In addition, States use the 
     Uniform Reciprocal Enforcement of Support Act (URESA) and the 
     Revised Uniform Reciprocal Enforcement of Support Act 
     (RURESA) to conduct interstate cases. Federal law imposes a 
     Federal criminal penalty for the willful failure to pay past-
     due child support to a child who resides in a State other 
     than the State of the obligor. In 1992, the National 
     Conference of Commissioners on State Uniform Laws approved a 
     new model State law for handling interstate child support 
     cases. The new Uniform Interstate Family Support Act (UIFSA) 
     is designed to deal with desertion and nonsupport by 
     instituting uniform laws in all 50 States that limit control 
     of a child support case to a single State. This approach 
     ensures that only one child support order from one court or 
     child support agency will be in effect at any given time. It 
     also helps to eliminate jurisdictional disputes between 
     States that are impediments to locating parents and enforcing 
     child support orders across State lines. As of February 1996, 
     26 States and the District of Columbia had enacted UIFSA.
     House bill
       By January 1, 1998, all States must have enacted the 
     Uniform Interstate Family Support Act (UIFSA) and any 
     amendments officially adopted by the National Conference of 
     Commissioners of Uniform State Laws before January 1, 1998, 
     and have the procedures required for its implementation in 
     effect. States are allowed flexibility in deciding which 
     specific interstate cases are pursued by using UIFSA and 
     which cases are pursued using other methods of interstate 
     enforcement. States must provide that an employer that 
     receives an income withholding order follow the procedural 
     rules that apply to the order under the laws of the State in 
     which the noncustodial parent works.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment with additional clarifying provisions that 
     conferees agreed to include at the request of the National 
     Conference of Commissioners of Uniform State Laws. The 
     Commissioners asked conferees to make two changes in House 
     and Senate provisions. More specifically, conferees agreed to 
     drop language in the section on income withholding in 
     interstate cases and to insert replacement language approved 
     by the Commissioners. This provides specific instructions to 
     employers for rules to follow in processing interstate cases. 
     Employers following these instructions are also provided with 
     legal immunity.


   14. Improvements to Full Faith and Credit for Child Support Orders

     Present law
       Federal law requires States to treat past-due support 
     obligations as final judgments that are entitled to full 
     faith and credit in every State. This means that a person who 
     has a support order in one State does not have to obtain a 
     second order in another State to obtain support due should 
     the debtor parent move from the issuing court's jurisdiction. 
     P.L. 103-383 restricts a State court's ability to modify a 
     support order issued by another State unless the child and 
     the custodial parent have moved to the State where the 
     modification is sought or have agreed to the modification.
     House bill
       The provision clarifies the definition of a child's home 
     State, makes several revisions to ensure that full faith and 
     credit laws can be applied consistently with UIFSA, and 
     clarifies the rules regarding which child support orders 
     States must honor when there is more than one order.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


           15. Administrative Enforcement in Interstate Cases

     Present law
       No provision.
     House bill
       States are required to have laws that permit them to send 
     orders to and receive orders from other States. The 
     transmission of the order itself serves as certification to 
     the responding State of the arrears amount and of the fact 
     that the initiating State met all procedural due process 
     requirements. In addition, each responding State must, 
     without requiring the case to be transferred to their State, 
     match the case against its data bases, take appropriate 
     action if a match occurs, and send the collections, if any, 
     to the initiating State. States must keep records of the 
     number of requests they receive, the number of cases that 
     result in a collection, and the amount collected. States must 
     respond to interstate requests within five days.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


               16. Use of Forms in Interstate Enforcement

     Present law
       No provision.
     House bill
       The Secretary of HHS, in consultation with State child 
     support directors and not later than October 1, 1996, must 
     issue forms that States must use for income withholding, for 
     imposing liens, and for issuing administrative subpoenas in 
     interstate cases. States must be using the forms by March 1, 
     1997.
     Senate amendment
       Same, except minor differences in wording.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


             17. State Laws Providing Expedited Procedures

     Present law
       States must have procedures under which expedited processes 
     are in effect under the State judicial system or under State 
     administrative processes for obtaining and enforcing support 
     orders and for establishing paternity.
       Federal regulations provide a number of safeguards in 
     expedited cases, such as requiring that the due process 
     rights of the parties involved be protected.

[[Page H8920]]

       The Employee Retirement Income Security Act (ERISA) of 1974 
     supersedes any and all State laws. Under ERISA a noncustodial 
     parent's pension benefits can only be garnished or withheld 
     if the custodial parent has a qualified domestic relations 
     order. Similarly, a pension plan administrator is obligated 
     to adhere to medical support requirements only if the 
     custodial parent has a qualified medical child support order.
     House bill
       States must adopt a series of procedures to expedite both 
     the establishment of paternity and the establishment, 
     enforcement, and modification of support. These procedures 
     must give the State agency the authority to take the 
     following actions, subject to due process safeguards, without 
     the necessity of obtaining an order from any other judicial 
     or administrative tribunal:
       (1) ordering genetic testing in appropriate cases;
       (2) issuing subpoenas to obtain information necessary to 
     establish, modify or enforce an order, with appropriate 
     sanctions for failure to respond to the subpoena;
       (3) requiring all entities in the State (including for-
     profit, nonprofit, and governmental employers) to provide 
     information on employment, compensation and benefits of any 
     employee or contractor in response to a request from the 
     State IV-D agency or the IV-D agency of any other State, and 
     to sanction failure to respond to such request;
       (4) obtaining access to a variety of public and private 
     records including: vital statistics, State and local tax 
     records, real and personal property, occupational and 
     professional licenses and records concerning ownership and 
     control of corporations, partnerships and other business 
     entities, employment security records, public assistance 
     records, motor vehicle records, corrections records, and, 
     subject to the nonliability of these private entities and the 
     issuance of an administrative subpoena, information in the 
     customer records of public utilities and cable TV companies, 
     and records of financial institutions;
       (5) directing the obligor or other payor to change the 
     payee to the appropriate government entity in cases in which 
     support is subject to an assignment or to a requirement to 
     pay through the State Disbursement Unit;
       (6) ordering income withholding in certain IV-D cases;
       (7) securing assets to satisfy arrearages: by intercepting 
     or seizing periodic or lump sum payments from States or local 
     agencies including Unemployment Compensation, workers' 
     compensation, judgements, settlements, lottery winnings, 
     assets held by financial institutions, and public and private 
     retirement funds; by attaching and seizing assets held in 
     financial institutions; by attaching public and private 
     retirement funds; and by imposing liens to force the sale of 
     property; and
       (8) increasing automatically the monthly support due to 
     include amounts to offset arrears.
       Expedited procedures must include the following rules and 
     authority applicable with respect to proceedings to establish 
     paternity or to establish, modify, or enforce support orders:
       (1) Locator Information and Notice. Parties in paternity 
     and child support actions must file and update information 
     about identity, address, and employer with the tribunal and 
     with the State Case Registry upon entry of the order. The 
     tribunal can deem due process requirements for notice and 
     service of process to be met in any subsequent action upon 
     delivery of written notice to the most recent residential or 
     employer address filed with the tribunal.
       (2) Statewide Jurisdiction. The child support agency and 
     any administrative or judicial tribunal have the authority to 
     hear child support and paternity cases, to exert Statewide 
     jurisdiction over the parties, and to grant orders that have 
     Statewide effect; cases can also be transferred between local 
     jurisdictions without additional filing or service of 
     process.
       Except to the extent that the provisions related to 
     expedited procedures are consistent with requirements of the 
     ERISA qualified domestic relations orders and the qualified 
     medical child support orders, the expedited procedures do not 
     alter, amend, modify, invalidate, impair or supersede ERISA 
     requirements.
       The automated systems being developed by States are to be 
     used, to the maximum extent possible, to implement expedited 
     procedures.
     Senate amendment
       Same, except for a modification that alters the 
     nonliability of entities that share information with child 
     support officials and eliminates the reference to 
     administrative subpoenas.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment except that the agreement included the House 
     provision strengthening the nonliability of entities that 
     share information with child support officials.

                  Subtitle D--Paternity Establishment


           18. State Laws Concerning Paternity Establishment

     Present law
       Establishment Process Available from Birth Until Age 18. 
     Federal law requires States to have laws that permit the 
     establishment of paternity until the child reaches age 18. As 
     of August 16, 1984, these procedures would apply to a child 
     for whom paternity has not been established or for whom a 
     paternity action was brought but dismissed because of statute 
     of limitations of less than 18 years was then in effect in 
     the State.
       Procedures Concerning Genetic Testing. Federal law requires 
     States to implement laws under which the child and all other 
     parties must undergo genetic testing upon the request of a 
     party in contested cases.
       Voluntary Paternity Acknowledgement. Federal law requires 
     States to implement procedures for a simple civil process for 
     voluntary paternity acknowledgment, including hospital-based 
     programs.
       Status of Signed Paternity Acknowledgement. Federal law 
     requires States to implement procedures under which the 
     voluntary acknowledgment of paternity creates a rebuttable 
     presumption, or at State option, a conclusive presumption of 
     paternity.
       Bar on Acknowledgement Ratification Proceedings. Federal 
     law requires States to implement procedures under which 
     voluntary acknowledgment is admissible as evidence of 
     paternity and the voluntary acknowledgment of paternity must 
     be recognized as a basis for seeking a support order without 
     requiring any further proceedings to establish paternity.
       Admissibility of Genetic Testing Results. Federal law 
     requires States to implement procedures which provide that 
     any objection to genetic testing results must be made in 
     writing within a specified number of days before any hearing 
     at which such results may be introduced into evidence. If no 
     objection is made, the test results must be admissible as 
     evidence of paternity without the need for foundation 
     testimony or other proof of authenticity or accuracy.
       Presumption of Paternity in Certain Cases. Federal law 
     requires States to implement procedures which create a 
     rebuttable or, at State option, conclusive presumption of 
     paternity based on genetic testing results indicating a 
     threshold probability that the alleged father is the father 
     of the child.
       Default Orders. Federal law requires States to implement 
     procedures that require 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.
     House Bill
       Establishment Process Available from Birth Until Age 18. 
     States are required to have laws that permit paternity 
     establishment until at least age 18 (or a higher limit at 
     State option) even in cases that were previously dismissed 
     because a statute of limitations of less than 18 years was 
     then in effect.
       Procedures Concerning Genetic Testing. The child and all 
     other parties, unless good cause provisions are met, must 
     undergo genetic testing upon the request of a party if the 
     request is supported by a sworn statement establishing a 
     reasonable possibility of parentage or nonparentage. When the 
     tests are ordered by the State agency, States must pay the 
     costs, subject to recoupment at State option from the father 
     if paternity is established. Upon the request and advance 
     payment by the contestant, States must seek additional 
     testing if the original test result is contested.
       Voluntary Paternity Acknowledgement.
       (1) Simple Civil Process. States must have procedures that 
     create a simple civil process for voluntary acknowledging 
     paternity under which benefits, rights, and responsibilities 
     of acknowledgement are explained to unwed parents before the 
     acknowledgement is signed.
       (2) Hospital Program. States must have procedures that 
     establish a paternity acknowledgement program through 
     hospitals.
       (3) Paternity Services. States must have procedures that 
     require the agency responsible for maintaining birth records 
     to offer voluntary paternity establishment services. The 
     Secretary must issue regulations governing voluntary 
     paternity establishment services, including regulations on 
     State agencies that may offer voluntary paternity 
     acknowledgement services and the conditions such agencies 
     must meet.
       (4) Affidavit. States must develop their own voluntary 
     acknowledgment form but the form must contain all the basic 
     elements of a form developed by the Secretary. States must 
     give full faith and credit to the forms of other States.
       Status of Signed Paternity Acknowledgement.
       (1) Inclusion in Birth Records. States must include the 
     name of the father in the record of births to unmarried 
     parents only if the father and mother have signed a voluntary 
     acknowledgement of paternity or a court or administrative 
     agency has issued an adjudication of paternity.
       (2) Legal Finding. States must have procedures under which 
     a signed acknowledgement of paternity is considered a legal 
     finding of paternity unless rescinded within 60 days or the 
     date of a judicial or administrative proceeding to establish 
     a support order.
       (3) Contest. States must have procedures under which a 
     paternity acknowledgment can be challenged in court only on 
     the basis of fraud, duress, or material mistake of fact, with 
     the burden of proof on the challenger.
       Bar on Acknowledgement Ratification Proceedings. No 
     judicial or administrative proceedings are required or 
     permitted to ratify a paternity acknowledgement which is not 
     challenged by the parents.
       Admissibility of Genetic Testing Results. States must have 
     procedures for admitting into evidence accredited genetic 
     tests, unless

[[Page H8921]]

     any objection is made in writing within a specified number of 
     days, and if no objection is made, clarifying that test 
     results are admissible without the need for foundation or 
     other testimony.
       Presumption of Paternity in Certain Cases. States must have 
     laws that create a rebuttable or, at State option, conclusive 
     presumption of paternity when results from genetic testing 
     indicate a threshold probability that the alleged father is 
     the father of the child.
       Default Orders. A default order must be entered in a 
     paternity case upon a showing of service of process on the 
     defendant and any additional showing required by the State 
     law.
       No Right to Jury Trial. State laws must state that parties 
     in a contested paternity action are not entitled to a jury 
     trial.
       In addition to all the above provisions that strengthen 
     similar provisions of current law, the Committee report 
     contains a number of new provisions that have no direct 
     parallel in current law. These include:
       Temporary Support Based on Probable Paternity. Upon motion 
     of a party, State law must require issuance of a temporary 
     support order pending an administrative or judicial 
     determination of parentage if paternity is indicated by 
     genetic testing or other clear and convincing evidence.
       Proof of Certain Support and Paternity Establishment Costs. 
     Bills for pregnancy, childbirth, and genetic testing must be 
     admissible in judicial proceedings without foundation 
     testimony and must constitute prima facie evidence of the 
     cost incurred for such services.
       Standing of Putative Fathers. Putative fathers must have a 
     reasonable opportunity to initiate a paternity action.
       Filing of Acknowledgement and Adjudications in State 
     Registry of Birth Records. Both voluntary acknowledgements 
     and adjudications of paternity must be filed with the State 
     registry of birth records for data matches with the central 
     Case Registry of Child Support Orders.
       National Paternity Acknowledgement Affidavit. The Secretary 
     is required to develop, in consultation with the States, the 
     minimum requirements of an affidavit which includes the 
     Social Security number of each parent to be used by States 
     for voluntary acknowledgement of paternity.
     Senate amendment
       Same, except under ``Voluntary Paternity Acknowledgement,'' 
     the Senate amendment includes good cause exceptions.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment with modification that the good cause 
     exceptions are dropped.


           19. Outreach for Voluntary Paternity Establishment

     Present law
       States are required to regularly and frequently publicize, 
     through public service announcements, the availability of 
     child support enforcement services.
     House bill
       States must publicize the availability and encourage the 
     use of procedures for voluntary establishment of paternity 
     and child support.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 20. Cooperation by Applicants for and Recipients of Temporary Family 
                               Assistance

     Present law
       AFDC applicants and recipients are required to cooperate 
     with the State in establishing the paternity of a child and 
     in obtaining child support payments unless the applicant or 
     recipient is found to have good cause for refusing to 
     cooperate. Under the ``good cause'' regulations, the child 
     support agency may determine that it is against the best 
     interests of the child to seek to establish paternity in 
     cases involving incest, rape, or pending procedures for 
     adoption. Moreover, the agency may determine that it is 
     against the best interest of the child to require the mother 
     to cooperate if it is anticipated that such cooperation will 
     result in the physical or emotional harm of the child, 
     parent, or caretaker relative.
     House bill
       Individuals or their children who apply for or receive 
     public assistance under the Temporary Assistance for Needy 
     Families (TANF) program or the Medicaid program must 
     cooperate, as determined by the State child support agency, 
     with State efforts to establish paternity and establish, 
     modify, or enforce a support order. State procedures must 
     require both that applicants and recipients provide specific 
     identifying information about the other parent and that 
     applicants appear at interviews, hearings, and legal 
     proceedings, unless the applicant or recipient is found to 
     have good cause for refusing to cooperate. States must have 
     ``good cause'' exceptions and they must take into account the 
     best interests of the child. The definition of good cause, 
     and the determination of good cause in specific cases, can be 
     accomplished by the State agency administering TANF, child 
     support enforcement, or Medicaid. States also must require 
     the custodial parent and child to submit to genetic testing. 
     States may not require the noncustodial parent to sign an 
     acknowledgement of paternity or relinquish the right to 
     genetic testing as a condition of cooperation. The State 
     child support agency must notify the agencies administering 
     the TANF Block Grant and Medicaid programs if noncooperation 
     is determined.
     Senate amendment
       Same, except imposes a penalty for noncooperation. If it is 
     determined that an individual is not cooperating, and the 
     individual does not qualify for any good cause or other 
     exception, then the State must deduct not less than 25 
     percent of the Title IV-A assistance that otherwise would be 
     provided to the family of the individual; and the State may 
     deny the family any Title IV-A assistance. The Senate 
     amendment also has references to Title XV not found in the 
     House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment except that the Senate penalty of 25 percent 
     is included. This provision is included in Title I (Block 
     Grants for Temporary Assistance for Needy Families) of the 
     bill.

             Subtitle E--Program Administration and Funding


             21. Performance-Based Incentives and Penalties

     Present law
       Incentive Adjustments to Federal Matching Rate. The Federal 
     government reimburses approved administrative expenditures of 
     States at a rate of 66 percent. In addition, the Federal 
     government pays States an incentive amount ranging from six 
     percent to 10 percent of both AFDC and non-AFDC collections.
       Conforming Amendments. No provision.
       Calculation of IV-D Paternity Establishment Percentage. 
     States are required to meet Federal standards for the 
     establishment of paternity. The major standard relates to the 
     percentage obtained by dividing the number of children in the 
     State who are born out of wedlock, are receiving AFDC or 
     child support enforcement services, and for whom paternity 
     has been established by the number of children who are born 
     out of wedlock and are receiving AFDC or child support 
     enforcement services. To meet Federal requirements, this 
     percentage in a State must be at least 75 percent or meet the 
     following standards of improvement from the preceding year: 
     (1) if the State paternity establishment ratio is between 50 
     and 75 percent, the State ratio must increase by 3 or more 
     percentage points from the ratio of the preceding year; (2) 
     if the State ratio is between 45 and 50, the ratio must 
     increase at least 4 percentage points; (3) if the State ratio 
     is between 40 and 45 percent, it must increase at least 5 
     percentage points; and (4) if the State ratio is below 40 
     percent, it must increase at least 6 percentage points. If an 
     audit finds that the State's child support enforcement 
     program has not substantially complied with the requirements 
     of its State plan, the State is subject to a penalty. In 
     accord with this penalty, the Secretary must reduce a State's 
     AFDC benefit payment by not less than one percent nor more 
     than 2 percent for the first failure to comply; by not less 
     than 2 percent nor more than three percent for the second 
     consecutive failure to comply; and by not less than three 
     percent nor more than five percent for third or subsequent 
     consecutive failure to comply.
     House bill
       Incentive Adjustments to Federal Matching Rate. The 
     Secretary, in consultation with State child support 
     directors, must develop a proposal for a new incentive system 
     that provides additional payments to States (i.e., above the 
     base matching rate of 66 percent) based on performance and 
     report details of the new system to the Committees on Ways 
     and Means and Finance by March 1, 1997. The Secretary's new 
     system must be revenue neutral. The current incentive system 
     remains effective for fiscal years beginning before 2000.
       Conforming Amendments. Conforming amendments are made in 
     Sections 458 of the Social Security Act.
       Calculation of IV-D Paternity Establishment Percentage. 
     States have the option of calculating the paternity 
     establishment rate by either counting only unwed births in 
     the State IV-D caseload or by counting all unwed births in 
     the State. The IV-D paternity establishment percentage for a 
     fiscal year is equal to: (1) the total number of children in 
     the State who were born out-of-wedlock, and who receive 
     services under Part A or, at State option, Part D, and for 
     whom paternity is acknowledged or established during the 
     fiscal year, divided by (2) the total number of children born 
     out-of-wedlock who receive services under Part A or E or, at 
     State option, Part D. The Statewide paternity establishment 
     percentage is similar except that all out-of-wedlock births 
     in the fiscal year in the State are in the denominator and 
     all paternities established are in the numerator. The 
     requirements for meeting the standard are the same as current 
     law except the 75 percent rule is increased to 90 percent. 
     States with a paternity establishment percentage of between 
     75 percent and 90 percent must improve their performance by 
     at least two percentage points per year. The noncompliance 
     provisions of the child support program are modified so that 
     the Secretary must take overall program performance into 
     account.
     Senate amendment
       Same, except minor wording difference in amendment of 
     Section 452(g)(2).
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

[[Page H8922]]

                22. Federal and State Review and Audits

     Present law
       States are required to maintain a full record of child 
     support collections and disbursements and to maintain an 
     adequate reporting system.
       The Secretary must collect and maintain, on a fiscal year 
     basis, up-to-date State-by-State statistics on each of the 
     services provided under the child support enforcement 
     program. The Secretary is also required to evaluate the 
     implementation of State child support enforcement programs 
     and conduct audits of these programs as necessary, but not 
     less often than once every 3 years (or annually if a State 
     has been found to be out of compliance with program rules).
     House bill
       States are required to annually review and report to the 
     Secretary, using data from their automatic data processing 
     system, both information adequate to determine the State's 
     compliance with Federal requirements for expedited procedures 
     and timely case processing as well as the information 
     necessary to calculate their levels of accomplishment and 
     rates of improvement on the performance indicators in the 
     proposal.
       The Secretary is required to determine the amount (if any) 
     of incentives or penalties. The Secretary must also review 
     State reports on compliance with Federal requirements and 
     provide States with recommendations for corrective action. 
     Audits must be conducted at least once every 3 years, or more 
     often in the case of States that fail to meet Federal 
     requirements. The purpose of the audits is to assess the 
     completeness, reliability, and security of data reported for 
     use in calculating the performance indicators and to assess 
     the adequacy of financial management of the State program.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                   23. Required Reporting Procedures

     Present law
       The Secretary is required to assist States in establishing 
     adequate reporting procedures and must maintain records of 
     child support enforcement operations and of amounts collected 
     and disbursed, including costs incurred in collecting support 
     payments.
     House bill
       The Secretary is required to establish procedures and 
     uniform definitions for State collection and reporting of 
     information necessary to measure State compliance with 
     expedited processes.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


               24. Automated Data Processing Requirements

     Present law
       Federal law (P.L. 104-35) requires that by October 1, 1997, 
     States have an operational automated data processing and 
     information retrieval system designed to control, account 
     for, and monitor all factors in the support enforcement and 
     paternity determination process, the collection and 
     distribution of support payments, and the costs of all 
     services rendered.
       The automated data processing system must be capable of 
     providing management information on all IV-D cases from 
     initial referral or application through collection and 
     enforcement. The automated data processing system must also 
     be capable of providing security against unauthorized access 
     to, or use of, the data in such system. To establish these 
     automated data systems, the Federal government provided 
     States with a 90 percent matching rate for the costs of 
     development. This enhanced matching money expired on October 
     1, 1995.
     House bill
       States are required to have a single Statewide automated 
     data processing and information retrieval system which has 
     the capacity to perform the necessary functions and with the 
     required frequency, as described in this section. The State 
     data system must be used to perform functions the Secretary 
     specifies, including controlling and accounting for the use 
     of Federal, State, and local funds and maintaining the data 
     necessary to meet Federal reporting requirements in carrying 
     out the program. The system must maintain the requisite data 
     for Federal reporting, calculate the State's performance for 
     purposes of the incentive and penalty provisions, and have in 
     place systems controls to ensure the completeness, 
     reliability, and accuracy of the data.
       To promote security of information, the State agency must 
     have safeguards to protect the integrity, accuracy, and 
     completeness of, and access to and use of, data in the 
     automated systems including restricting access to passwords, 
     monitoring of access to and use of the system, conducting 
     automated systems training, and imposing penalties for 
     unauthorized use or disclosure of confidential data. The 
     Secretary must prescribe final regulations for implementation 
     of this section no later than 2 years after the date of the 
     enactment of this Act.
       The statutory provisions for State implementation of 
     Federal automatic data processing requirements are revised to 
     provide that, first, all requirements enacted on or before 
     the date of enactment of the Family Support Act of 1988 are 
     to be met by October 1, 1997. The requirements enacted on or 
     before the date of enactment of this proposal must be met by 
     October 1, 1999. The October 1, 1999 deadline will be 
     extended by one day for each day by which the Secretary fails 
     to meet the 2-year deadline for regulations. The Federal 
     government will continue the 90 percent matching rate for 
     1996 and 1997 in the case of provisions outlined in advanced 
     planning documents submitted before September 30, 1995; the 
     enhanced match is also provided retroactively for funds 
     expended since expiration of the enhanced rate on October 1, 
     1995. For fiscal years 1996 through 2001, the matching rate 
     for the provisions of this section will be 80 percent.
       The Secretary must create procedures to cap payments to 
     States to meet the new requirements at $400,000,000 over 6 
     years (fiscal years 1996-2001) to be distributed among States 
     by a formula set in regulations which takes into account the 
     relative size of State caseloads and the level of automation 
     needed to meet applicable automatic data processing 
     requirements.
     Senate amendment
       Same, except that requirements enacted after the Family 
     Support Act must be met by October 1, 2000 (rather than 
     October 1, 1999). Also, a difference in wording about 
     payments in fiscal year 1998.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


    25. Technical Assistance (and Funding of Parent Locator Service)

     Present law
       Annual appropriations are made to cover the expenses of the 
     Administration for Children and Families, which includes the 
     Federal Office of Child Support Enforcement (OCSE). Among 
     OCSE's administrative expenses are the costs of providing 
     technical assistance to the States.
     House bill
       The Secretary can use 1 percent of the Federal share of 
     child support collections on behalf of families in the 
     Temporary Assistance for Needy Families program the preceding 
     year to provide technical assistance to the States. Technical 
     assistance can include training of State and Federal staff, 
     research and demonstration programs, special projects of 
     regional or national significance, and similar activities. 
     The Secretary will receive 2 percent of the Federal share of 
     collections on behalf of TANF recipients the preceding year 
     for operation of the Federal Parent Locator Service to the 
     extent that costs of the Parent Locator Service are not 
     recovered by user fees.
     Senate amendment
       Same, except the effective date is October 1, 1997.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment except that the House effective date is 
     followed.


            26. Reports and Data Collection by the Secretary

     Present law
       The Secretary is required to submit to Congress, not later 
     than 3 months after the end of the fiscal year, a complete 
     report on all child support enforcement activities.
     House bill
       In addition to current reporting requirements, the 
     Secretary is required to report the following data to 
     Congress in her annual report each fiscal year:
       (1) the total amount of child support payments collected;
       (2) the cost to the State and Federal governments of 
     furnishing child support services;
       (3) the number of cases involving families that became 
     ineligible for aid under part A with respect to whom a child 
     support payment was received;
       (4) the total amount of current support collected and 
     distributed;
       (5) the total amount of past due support collected and 
     distributed; and
       (6) the total amount of support due and unpaid for all 
     fiscal years.
       The Secretary also must report the compliance, by State, 
     with IV-D standards for responding to requests for child 
     support assistance from other States and standards for 
     distributing child support collections.
     Senate amendment
       Same, except minor difference in wording in amendment to 
     Section 452(a)(10).
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                 27. Child Support Delinquency Penalty

     Present law
       No provision.
     House bill
       States must impose an annual penalty of 10 percent on 
     overdue support owed by noncustodial parents. The penalty is 
     paid after the family has been repaid all arrearages and 
     after the State has been repaid for welfare payments, if any, 
     made to families.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the Senate amendment by 
     dropping this penalty provision.

[[Page H8923]]

      Subtitle F--Establishment and Modification of Support Orders


   28. Simplified Process for Review and Adjustment of Child Support 
                                 Orders

     Present law
       A child support order legally obligates noncustodial 
     parents to provide financial support for their child and 
     stipulates the amount of the obligation and how it is to be 
     paid. In 1984, P.L. 98-378 required States to establish 
     guidelines for establishing child support orders. In 1988, 
     P.L. 100-485 made the guidelines binding on judges and other 
     officials who had authority to establish support orders. P.L. 
     100-485 also required States to review and adjust individual 
     child support orders once every three years under some 
     circumstances. States are required to notify both resident 
     and nonresident parents of their right to a review.
     House bill
       States must review and, as appropriate, adjust child 
     support orders at the request of the parents. In the case of 
     orders being enforced against parents whose children are 
     receiving benefits under Title IV-A of the Social Security 
     Act, States may also review the order at their own option. No 
     proof of change of circumstances is needed to initiate the 
     review. States may adjust child support orders by either 
     applying the State guidelines and updating the award amount 
     or by applying a cost of living increase to the order. In the 
     latter case, both parties must be given 30 days after notice 
     of adjustment to contest the results. States may use 
     automated methods to identify orders eligible for review, 
     conduct the review, identify orders eligible for adjustment, 
     and apply the appropriate adjustment to the orders based on 
     the threshold established by the State. States are required 
     to give parties one notice of their right to request review 
     and adjustment, which may be included in the order 
     establishing the support amount.
     Senate amendment
       Major differences in the review and adjustment provisions; 
     the House makes reviews optional while the Senate retains 
     mandatory 3-year reviews of IV-A cases as under current law; 
     also other differences in wording.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment. The compromise provision preserves the 
     mandatory review every 3 years if parents request a review 
     but allows States some flexibility in reviewing child support 
     cases in their welfare caseload.


29. Furnishing Consumer Reports for Certain Purposes Relating to Child 
                                Support

     Present law
       The Fair Credit Act requires consumer reporting agencies to 
     include in any consumer report information on child support 
     delinquencies provided by or verified by a child support 
     enforcement agency, which antedates the report by 7 years.
     House bill
       This section amends the Fair Credit Reporting Act. In 
     response to a request by the head of a State or local child 
     support agency (or a State or local government official 
     authorized by the head of such an agency), consumer credit 
     agencies must release information if the person making the 
     request makes all of the following certifications: that the 
     consumer report is needed to establish an individual's 
     capacity to make child support payments or determine the 
     level of payments; that paternity has been established or 
     acknowledged; that the consumer has been given at least 10 
     days notice by certified or registered mail that the report 
     is being requested; and that the consumer report will be kept 
     confidential, will be used solely for child support purposes, 
     and will not be used in connection with any other civil, 
     administrative, or criminal proceeding or for any other 
     purpose. Consumer reporting agencies must also give reports 
     to a child support agency for use in setting an initial or 
     modified award.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


30. Nonliability for Financial Institutions Providing Financial Records

     Present law
       No provision.
     House bill
       Financial institutions are not liable to any person for 
     information provided to child support agencies. Child support 
     agencies can disclose information obtained from depository 
     institutions only for child support purposes. There is no 
     liability for disclosures that result from good faith but 
     erroneous interpretation of this statute. However, 
     individuals who knowingly disclose information from financial 
     records can have civil actions brought against them in 
     Federal district court; the maximum penalty is $1,000 for 
     each disclosure or actual damages plus, in the case of 
     willful disclosure resulting from gross negligence, punitive 
     damages, plus the costs of the action. Definitions of 
     ``financial institution'' and ``financial record'' are 
     included in this section.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

               Subtitle G--Enforcement of Support Orders


         31. Internal Revenue Service Collection of Arrearages

     Present law
       If the amount of overdue child support is at least $750, 
     the Internal Revenue Service (IRS) can enforce the child 
     support obligation through its regular collection process, 
     which may include seizure of property, freezing accounts, or 
     use of other procedures if child support agencies request 
     assistance according to prescribed rules (e.g., certifying 
     that the delinquency is at least $750, etc.)
     House bill
       The Internal Revenue Code is amended so that no additional 
     fees can be assessed for adjustment to previously certified 
     amounts for the same obligor.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


        32. Authority to Collect Support From Federal Employees

     Present law
       Federal law allows the wages of Federal employees to be 
     garnished to enforce legal obligations for child support or 
     alimony. Federal law provides that moneys payable by the 
     United States to any individual are subject to being 
     garnished in order to meet an individual's legal obligation 
     to provide child support or make alimony payments. An 
     executive order issued on February 27, 1995 establishes the 
     Federal government as a model employer in promoting and 
     facilitating the establishment and enforcement of child 
     support. Under the terms of the Executive Order, all Federal 
     agencies, including the Uniformed Services, are required to 
     cooperate fully in efforts to establish paternity and child 
     support and to enforce the collection of child and medical 
     support. All Federal agencies are to review their wage 
     withholding procedures to ensure that they are in full 
     compliance. Beginning no later than July 1, 1995, the 
     Director of the Office of Personnel Management must publish 
     annually in the Federal Register the list of agents (and 
     their addresses) designated to receive service of withholding 
     notices for Federal employees. Federal law states that 
     neither the United States nor any disbursing officer or 
     government entity shall be liable with respect to any payment 
     made from moneys due or payable from the United States 
     pursuant to the legal process. Federal law provides that 
     money that may be garnished includes compensation for 
     personal services, whether such compensation is denominated 
     as wages, salary, commission, bonus, pay, or otherwise, and 
     includes but is not limited to, severance pay, sick pay, 
     incentive payments, and periodic payments. Includes 
     definitions of ``United States'', ``child support'', 
     ``alimony'', ``private person'', and ``legal process''.
     House bill
       Consolidation and Streamlining of Authorities:
       (1) Federal employees are subject to wage withholding and 
     other actions taken against them by State child support 
     enforcement agencies.
       (2) Federal agencies are responsible for the same wage 
     withholding and other child support actions taken by the 
     State as if they were a private employer.
       (3) The head of each Federal agency must designate an agent 
     and place the agent's name, title, address, and telephone 
     number in the Federal Register annually. The agent must, upon 
     receipt of process, send written notice to the individual 
     involved as soon as possible, but no later than 15 days, and 
     to comply with any notice of wage withholding or respond to 
     other process within 30 days. The agent also must respond to 
     any order, process, or interrogatory about child support or 
     alimony within 30 days after effective service of such 
     requests.
       (4) Current law governing allocation of moneys owed by a 
     Federal employee is amended to give priority to child 
     support, to require allocation of available funds, up to the 
     amount owed, among child support claimants, and to allocate 
     remaining funds to other claimants on a first-come, first-
     served basis.
       (5) A government entity served with notice of process for 
     enforcement of child support is not required to change its 
     normal pay and disbursement cycle to comply with the legal 
     process.
       (6) Similar to current law, the U.S., the government of the 
     District of Columbia, and disbursing officers are not liable 
     for child support payments made in accord with this section; 
     nor is any Federal employee subject to disciplinary action or 
     civil or criminal liability for disclosing information while 
     carrying out the provisions of this section.
       (7) The President has the authority to promulgate 
     regulations to implement this section as it applies to 
     Federal employees of the Administrative branch of government; 
     the President Pro Tempore of the Senate and Speaker of the 
     House can issue regulations governing their employees; and 
     the Chief Justice can issue regulations applicable to the 
     Judicial branch.
       (8) This section broadens the definition of income to 
     include, in addition to wages, salary, commissions, bonus 
     pay, allowances, severance pay, sick pay, and incentive pay, 
     funds such as insurance benefits, retirement

[[Page H8924]]

     and pension pay (including disability pay if the veteran has 
     waived a portion of retirement pay to receive disability 
     pay), survivor's benefits, compensation for death and black 
     lung disease, veteran's benefits, and workers' compensation; 
     but to exclude from income funds paid to defray expenses 
     incurred in carrying out job duties; amounts owed to the U.S. 
     or used to pay Federal employment taxes, fines, or 
     forfeitures ordered by court martial; and amounts withheld 
     for tax purposes, for health insurance or life insurance 
     premiums, for retirement contributions, or for life insurance 
     premiums.
       (9) This section includes definitions of ``United States'', 
     ``child support'', ``alimony'', ``private person'', and 
     ``legal process''.
       Conforming Amendments. The House provision makes several 
     conforming amendments to Title IV-D of the Social Security 
     Act and Title 5 of the United States Code.
       Military Retired and Retainer Pay. The definition of 
     ``court'' in the Armed Forces title of the U.S. Code (title 
     10) is amended to include an administrative or judicial 
     tribunal of a State which is competent to enter child support 
     orders, and clarifies the definition of ``court order.'' The 
     Secretary of Defense is required to send withheld amounts for 
     child support to the appropriate State Disbursement Unit. The 
     provision also clarifies that military personnel who have 
     never been married to the parent of their child are under 
     jurisdiction of the State child support program and the terms 
     of section 459 of the Social Security Act.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 33. Enforcement of Child Support Obligations of Members of the Armed 
                                 Forces

     Present law
       Availability of Locator Information. The Executive Order 
     issued February 27, 1995 requires a study which would include 
     recommendations on how to improve service of process for 
     civilian employees and members of the Uniformed Services 
     stationed outside the United States.
       Facilitating Granting of Leave for Attendance at Hearings. 
     No provision.
       Payment of Military Retired Pay in Compliance with Child 
     Support Orders. Federal law requires allotments from the pay 
     and allowances of any member of the uniformed service when 
     the member fails to pay child (or child and spousal) support 
     payments.
     House bill
       Availability of Locator Information. The Secretary of 
     Defense must establish a central personnel locator service 
     that contains residential or, in specified instances, duty 
     addresses of every member of the Armed Services (including 
     members of the Coast Guard, if requested). The locator 
     service must be updated within 30 days of the time an 
     individual establishes a new address. Information from the 
     locator service must be made available upon request to the 
     Federal Parent Locator Service.
       Facilitating Granting of Leave for Attendance at Hearings. 
     The Secretary of each military department must issue 
     regulations to facilitate granting of leave for members of 
     the Armed Services to attend hearings to establish paternity 
     or to establish child support orders. The terms ``court'' and 
     ``child support'' are defined.
       Payment of Military Retired Pay in Compliance with Child 
     Support Orders. Child support orders received by the 
     Secretary do not have to have been recently issued. The 
     Secretary of each branch of the Armed Forces (including 
     retirees, the Coast Guard, the National Guard, and the 
     Reserves) is required to make child support payments from 
     military retirement pay directly to any State to which a 
     custodial parent has assigned support rights as a condition 
     of receiving public assistance. Payments to satisfy current 
     support or child support arrears must be made from disposable 
     retirement pay. Payroll deductions must begin within 30 days 
     or the first pay period after 30 days of receiving a wage 
     withholding order.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                  34. Voiding of Fraudulent Transfers

     Present law
       No provision.
     House bill
       States must have in effect the Uniform Fraudulent 
     Conveyance Act of 1981, the Uniform Fraudulent Transfer Act 
     of 1984, or an equivalent law providing for voiding transfers 
     of income or property that were made to avoid payment of 
     child support. States also must have in effect procedures 
     under which the State must seek to void a fraudulent transfer 
     or obtain a settlement in the best interest of the child 
     support creditor.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


     35. Work Requirement for Persons Owing Past-Due Child Support

     Present law
       Public Law 100-485 required the Secretary to grant waivers 
     to up to five States allowing them to provide JOBS services 
     on a voluntary or mandatory basis to noncustodial parents who 
     are unemployed and unable to meet their child support 
     obligations. (In their report the conferees noted that the 
     demonstrations would not grant any new powers to the States 
     to require participation by noncustodial parents. The 
     demonstrations were to be evaluated.)
     House bill
       States must have procedures under which the State has the 
     authority to issue an order or request that a court or 
     administrative process issue an order that requires 
     individuals owing past-due child support for a child 
     receiving assistance under the Temporary Family Assistance 
     program either to pay the support due, to have and be in 
     compliance with a plan to pay child support, or to 
     participate in work activities as deemed appropriate by the 
     court or the child support agency. ``Past-due support'' is 
     defined and a conforming amendment is made to sec. 466 of the 
     Social Security Act.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                    36. Definition of Support Order

     Present law
       No provision.
     House bill
       A support order is defined as a judgement, decree, or order 
     (whether temporary, final, or subject to modification) issued 
     by a court or an administrative agency for the support 
     (monetary support, health care, arrearages, or reimbursement) 
     of a child (including a child who has reached the age of 
     majority under State law) or of a child and the parent with 
     whom the child lives, and which may include costs and fees, 
     interest and penalties, income withholding, attorney's fees, 
     and other relief.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


               37. Reporting Arrearages to Credit Bureaus

     Present law
       Federal law requires States to implement procedures which 
     require them to periodically report to consumer reporting 
     agencies the name of debtor parents owing at least 2 months 
     of overdue child support and the amount of child support 
     overdue. However, if the amount overdue is less than $1,000, 
     information regarding it shall be made available only at the 
     option of the State. Moreover, information may only be made 
     available after the noncustodial parent has been notified of 
     the proposed action and has been given reasonable opportunity 
     to contest the accuracy of the claim against him. States are 
     permitted to charge consumer reporting agencies that request 
     child support arrearage information a fee that does not 
     exceed actual costs.
     House bill
       States are required to periodically report to consumer 
     credit reporting agencies the name of any noncustodial parent 
     who is delinquent in the payment of support and the amount of 
     overdue support owed by the parent. Before such a report can 
     be sent, the obligor must have been afforded all due process 
     rights, including notice and reasonable opportunity to 
     contest the claim of child support delinquency.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                               38. Liens

     Present law
       Federal law requires States to implement procedures under 
     which liens are imposed against real and personal property 
     for amounts of overdue support owed by a noncustodial parent 
     who resides or owns property in the State.
     House bill
       States must have procedures under which liens arise by 
     operation of law against property for the amount of overdue 
     support. States must grant full faith and credit to liens of 
     other States if the originating State agency or party has 
     complied with procedural rules relating to the recording or 
     serving of liens, except such rules cannot require judicial 
     notice or hearing prior to enforcement of the lien.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


            39. State Law Authorizing Suspension of Licenses

     Present law
       No provision.
     House bill
       States must have the authority to withhold, suspend, or 
     restrict the use of drivers' licenses, professional and 
     occupational licenses, and recreational licenses of 
     individuals owing past-due support or failing, after

[[Page H8925]]

     receiving appropriate notice, to comply with subpoenas or 
     warrants relating to paternity or child support proceedings.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


        40. Denial of Passports for Nonpayment of Child Support

     Present law
       No provision.
     House bill
       If an individual owes arrearages in excess of $5,000 of 
     child support, the Secretary of HHS must request that the 
     State Department deny, revoke, restrict, or limit the 
     individual's passport. State child support agencies must have 
     procedures for certifying to the Secretary arrearages in 
     excess of $5,000 and for notifying individuals who are in 
     arrears and providing them with an opportunity to contest. 
     These provisions become effective on October 1, 1997.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


              41. International Child Support Enforcement

     Present law
       No provision.
     House bill
       (1) The Secretary of State, with concurrence of the 
     Secretary of HHS, is authorized to declare reciprocity with 
     foreign countries having requisite procedures for 
     establishing and enforcing support orders. The Secretary may 
     revoke reciprocity if she determines that the enforcement 
     procedures do not continue to meet the requisite criteria.
       (2) The requirements for reciprocity include procedures in 
     the foreign country for U.S. residents--available at no 
     cost--to establish parentage, to establish and enforce 
     support orders for children and custodial parents, and to 
     distribute payments.
       (3) An agency of the foreign country must be designated a 
     central authority responsible for facilitating support 
     enforcement and ensuring compliance with standards by both 
     U.S. residents and residents of the foreign country.
       (4) The Secretary in consultation with the States, may 
     establish additional standards that she judges necessary to 
     promote effective international support enforcement.
       (5) The Secretary of HHS is required to facilitate 
     enforcement services in international cases involving 
     residents of the United States and of foreign reciprocating 
     countries, including developing uniform forms and procedures, 
     providing information from the FPLS on the State of residence 
     of the obligor, and providing such other oversight, 
     assistance, or coordination as she finds necessary and 
     appropriate.
       (6) Where there is no Federal reciprocity agreement, States 
     are permitted to enter into reciprocal agreements with 
     foreign countries.
       (7) The State plan must provide that request for services 
     in international cases be treated the same as interstate 
     cases, except that no application will be required and no 
     costs will be assessed against the foreign country or the 
     obligee (costs may be assessed at State option against the 
     obligor).
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                 42. Financial Institution Data Matches

     Present law
       No provision.
     House bill
       States are required to implement procedures under which the 
     State child support agency must enter into agreements with 
     financial institutions doing business within the State to 
     develop and operate a data match system, using automated data 
     exchanges to the maximum extent feasible, in which such 
     financial institutions are required to provide for each 
     calendar quarter the name, address, Social Security number, 
     and other identifying information for each noncustodial 
     parent identified by the State who has an account at the 
     institution and owes past-due child support. In response to a 
     notice of lien or levy, the financial institution must 
     encumber or surrender assets held by the institution on 
     behalf of the noncustodial parent who is subject to the child 
     support lien. The State agency may pay a fee to the financial 
     institution. The financial institution is not liable for 
     activities taken to implement the provisions of this section. 
     Definitions of the terms ``financial institution'' and 
     ``account'' are included.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


43. Enforcement of Orders Against Paternal or Maternal Grandparents in 
                         Cases of Minor Parents

     Present law
       No provision. However, Wisconsin and Hawaii have State laws 
     that make grandparents financially responsible for their 
     minor children's dependents.
     House bill
       With respect to a child of minor parents receiving support 
     from the Temporary Assistance for Needy Families Block Grant, 
     States have the option to enforce a child support order 
     against the parents of the minor noncustodial parent.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


44. Nondischargeability in Bankruptcy of Certain Debts for the Support 
                               of a Child

     Present law
       Although child support payments may not be discharged in a 
     filing of bankruptcy (i.e., the debtor parent cannot escape 
     her child support obligation by filing a bankruptcy 
     petition), a bankruptcy filing may cause long delays in 
     securing child support payments. Pursuant to P.L. 103-394, a 
     filing of bankruptcy will not stay a paternity, child 
     support, or alimony proceeding. In addition, child support 
     and alimony payments will be priority claims and custodial 
     parents will be able to appear in bankruptcy court to protect 
     their interests without paying a fee or meeting any local 
     rules for attorney appearances.
     House bill
       Title 11 of the U.S. Code and Title IV-D of the Social 
     Security Act are amended to ensure that a debt owed to the 
     State ``that is in the nature of support and that is 
     enforceable under this part'' cannot be discharged in 
     bankruptcy proceedings. This amendment applies only to cases 
     initiated under Title 11 after enactment of this Act.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


            45. Child Support Enforcement for Indian Tribes

     Present law
       There are about 340 federally recognized Indian tribes in 
     the 48 contiguous States. Among these tribes there are 
     approximately 130 tribal courts and 17 Courts of Indian 
     Offenses. Most tribal codes authorize their courts to hear 
     parentage and child support matters that involve at least one 
     member of the tribe or person living on the reservation. This 
     jurisdiction may be exclusive or concurrent with State court 
     jurisdiction, depending on specified circumstances.
     House bill
       No provision.
     Senate amendment
       Any State that has Indian country may enter into a 
     cooperation agreement with an Indian tribe if the tribe 
     demonstrates that it has an established tribal court system 
     with several specific characteristics. The Secretary may make 
     direct payments to Indian tribes that have approved child 
     support enforcement plans. Conforming amendments are 
     included.
     Conference agreement
       The conference agreement follows the Senate amendment.

                      Subtitle H--Medical Support


   46. Correction to ERISA Definition of Medical Child Support Order

     Present law
       Public Law 103-66 requires States to adopt laws that 
     require health insurers and employers to enforce orders for 
     medical and child support and that forbid health insurers 
     from denying coverage to children who are not living with the 
     covered individual or who were born outside of marriage. 
     Under Public Law 103-66, group health plans are required to 
     honor ``qualified medical child support orders.''
     House bill
       This provision expands the definition of medical child 
     support order in ERISA to clarify that any judgement, decree, 
     or order that is issued by a court of competent jurisdiction 
     or by an administrative process has the force and effect of 
     law.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


           47. Enforcement of Orders for Health Care Coverage

     Present law
       Federal law requires the Secretary to require IV-D agencies 
     to petition for the inclusion of medical support as part of 
     child support whenever health care coverage is available to 
     the noncustodial parent at reasonable cost.
     House bill
       All orders enforced under this part must include a 
     provision for health care coverage. If the noncustodial 
     parent changes jobs and the new employer provides health 
     coverage, the State must send notice of coverage, which shall 
     operate to enroll the child in the health plan, to the new 
     employer.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

[[Page H8926]]

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


        48. Grants to States for Access and Visitation Programs

     Present law
       In 1988, Congress authorized the Secretary to fund for 
     fiscal year 1990 and fiscal year 1991 demonstration projects 
     by States to help divorcing or never-married parents 
     cooperate with each other, especially in arranging for visits 
     between the child and the nonresident parent.
     House bill
       This proposal authorizes grants to States for access and 
     visitation programs including mediation, counseling, 
     education, development of parenting plans, and visitation 
     enforcement. Visitation enforcement can include monitoring, 
     supervision, neutral drop-off and pick-up, and development of 
     guidelines for visitation and alternative custody agreements. 
     An annual entitlement of $10 million is appropriated for 
     these grants.
       The amount of the grant to a State is equal to either 90 
     percent of the State expenditures during the year for access 
     and visitation programs or the allotment for the State for 
     the fiscal year. The allotment to the State bears the same 
     ratio to the amount appropriated for the fiscal year as the 
     number of children in the State living with one biological 
     parent divided by the national number of children living with 
     one biological parent. The Administration for Children and 
     Families must adjust allotments to ensure that no State is 
     allotted less than $50,000 for fiscal years 1997 or 1998 or 
     less than $100,000 for any year after 1998. Projects are 
     required to supplement rather than supplant State funds. 
     States may use the money to create their own programs or to 
     fund grant programs with courts, local public agencies, or 
     nonprofit organizations. The programs do not need to be 
     Statewide. States must monitor, evaluate, and report on their 
     programs in accord with regulations issued by the Secretary.
     Senate amendment
       Same, except delays the effective date for 1 year.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment except that the House effective date is 
     followed.

         Subtitle J--Effective Dates and Conforming Amendments


             49. Effective Dates and Conforming Amendments

     Present law
       No provision.
     House bill
       Except as noted in the text of the House proposal for 
     specific provisions, the general effective date for 
     provisions in the proposal is October 1, 1996. However, given 
     that many of the changes required by this proposal must be 
     approved by State Legislatures, the proposal contains a grace 
     period tied to the meeting schedule of State Legislatures. In 
     any given State, the proposal becomes effective either on 
     October 1, 1996 or on the first day of the first calendar 
     quarter after the close of the first regular session of the 
     State Legislature that begins after the date of enactment of 
     the proposal. In the case of States that require a 
     constitutional amendment to comply with the requirements of 
     the proposal, the grace period is extended either for one 
     year after the effective date of the necessary State 
     constitutional amendment or five years after the date of 
     enactment of the proposal. This section contains several 
     conforming amendments to title IV-D of the Social Security 
     Act. This section also replaces the term ``absent parent'' 
     with ``noncustodial parent'' each place it occurs in title 
     IV-D.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

      Title IV: Restricting Welfare and Public Benefits for Aliens


  1. Statements of National Policy Concerning Welfare and Immigration

     Present law
       No provision.
     House bill
       The Congress makes several statements concerning national 
     policy with respect to welfare and immigration. These include 
     the affirmation that it continues to be the immigration 
     policy of the United States that noncitizens within the 
     Nation's borders not depend on public resources, that 
     noncitizens nonetheless have been applying for and receiving 
     public benefits at increasing rates, and that it is a 
     compelling government interest to enact new eligibility and 
     sponsorship rules to assure that noncitizens become self-
     reliant and to remove any incentive for illegal immigration.
     Senate amendment
       Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

              Subtitle A--Eligibility for Federal Benefits


 2. Aliens Who Are Not Qualified Aliens Ineligible for Federal Public 
                                Benefits

     Present law
       Current law limits alien eligibility for most major Federal 
     assistance programs, including restrictions on, among other 
     programs, Supplemental Security Income, Aid to Families with 
     Dependent Children, housing assistance, and Food Stamps 
     programs. Current law is silent on alienage under, among 
     other programs, school lunch and nutrition, the Special 
     Supplemental Food Program for Women, Infants, and Children 
     (WIC), Head Start, migrant health centers, and the earned 
     income credit. Under the programs with restrictions, benefits 
     are generally allowed for permanent resident aliens (also 
     referred to as immigrants and green card holders), refugees, 
     asylees, and parolees, but benefits (other than emergency 
     Medicaid) are denied to nonimmigrants (or aliens lawfully 
     admitted temporarily as, for example, tourists, students, or 
     temporary workers) and illegal aliens. Benefits are permitted 
     under AFDC, SSI, unemployment compensation, and nonemergency 
     Medicaid to other aliens permanently residing in the United 
     States under color of law (PRUCOL).
     House bill
       Noncitizens who are ``not qualified aliens'' (generally, 
     illegal immigrants and nonimmigrants such as students) are 
     ineligible for all Federal public benefits, with limited 
     exceptions for emergency medical services, emergency disaster 
     relief, immunizations and testing and treatment of symptoms 
     of communicable diseases, community programs necessary for 
     the protection of life or safety, certain housing benefits 
     (only for current recipients), licenses and benefits directly 
     related to work for which a nonimmigrant has been authorized 
     to enter the U.S, and certain Social Security retirement 
     benefits protected by treaty or statute.
       Federal public benefits include: any grant, contract, loan, 
     professional license or commercial license, and any 
     retirement, welfare, health, disability, food assistance, 
     unemployment or similar benefit provided by an agency or 
     appropriated funds of the United States.
     Senate amendment
       Similar to House, except that the exception for 
     communicable diseases is limited to treatment of the disease 
     itself and must be triggered by a finding by HHS that testing 
     and treatment of a particular disease is necessary to prevent 
     its spread.
     Conference agreement
       The conference agreement follows the House bill.
       The allowance for treatment of communicable diseases is 
     very narrow. The conferees intend that it only apply where 
     absolutely necessary to prevent the spread of such diseases. 
     This is only a stop-gap measure until the deportation of a 
     person or persons unlawfully here. It is not intended to 
     provide authority for continued treatment of such diseases 
     for a long term.
       The allowance for emergency medical services under Medicaid 
     is very narrow. The conferees intend that it only apply to 
     medical care that is strictly of an emergency nature, such as 
     medical treatment administered in an emergency room, critical 
     care unit, or intensive care unit. The conferees do not 
     intend that emergency medical services include pre-natal or 
     delivery care assistance that is not strictly of an emergency 
     nature as specified herein.
       The intent of the conferees is that title I, part A of the 
     Elementary and Secondary Education Act would not be affected 
     by section 401 because the benefit is not provided to an 
     individual, household, or family eligibility unit.


3. Limited Eligibility of Qualified Aliens for Certain Federal Programs

     Present law
       With the exception of certain buy-in rights under Medicare, 
     immigrants (or aliens) lawfully admitted for permanent 
     residence are eligible for major Federal benefits, but the 
     ability of some immigrants to meet the needs tests for SSI, 
     AFDC, and food stamps may be affected by the sponsor-to-alien 
     deeming provisions discussed below. Refugees, asylees, and 
     parolees also generally are eligible. Benefits are permitted 
     under AFDC, SSI, unemployment compensation, and nonemergency 
     Medicaid to other aliens permanently residing in the United 
     States under color of law (PRUCOL).
     House bill
       Legal noncitizens who are ``qualified aliens'' (i.e., 
     permanent resident aliens, refugees, asylees, aliens paroled 
     into the United States for a period of at least 1 year, and 
     aliens whose deportation has been withheld) are ineligible 
     for SSI, Medicaid, and food stamp benefits until they attain 
     citizenship, with exceptions noted below. States are given 
     the option of similarly restricting Federal cash welfare and 
     Title XX benefits for qualified aliens, with the exception of 
     those who are receiving benefits on the date of enactment as 
     described below.
       Refugees, asylees, and aliens whose deportation has been 
     withheld are excepted for 5 years after being granted their 
     respective statuses. Also excepted are legal permanent 
     residents who have worked (in combination with their spouse 
     and parents) for at least 10 years, and noncitizens who are 
     veterans or on active duty or their spouse or unmarried 
     child.
       To allow individuals time to adjust to the revised policy, 
     otherwise restricted aliens who are receiving SSI, food 
     stamps, cash welfare, Medicaid or Title XX benefits on the 
     date of enactment would remain eligible for at most 1 year 
     after enactment. However, if

[[Page H8927]]

     a review determines the noncitizen would be ineligible if 
     enrolling under the revised standards for SSI, Medicaid, and 
     food stamps (for example, because the noncitizen failed to 
     qualify under the refugee or work exemptions) such benefits 
     would cease immediately. States have the option of ending 
     cash welfare and social services benefits for current 
     recipients after January 1, 1997.
     Senate amendment
       Similar to House bill, except that Medicaid is included 
     among the programs subject to State option rather than a 
     blanket bar.
     Conference agreement
       The conference agreement follows the Senate amendment.


4. Five-Year Limited Eligibility of Qualified Aliens for Federal Means-
                         Tested Public Benefit

     Present law
       See above.
     House bill
       The proposal restricts most Federal means-tested benefits 
     (including SSI, food stamps, cash welfare, Medicaid, and 
     title XX social services benefits) for permanent resident 
     aliens who arrive after the date of enactment for their first 
     5 years in the United States. Programs that are not 
     restricted to legal noncitizens arriving in the future 
     include emergency medical services, non-cash emergency 
     disaster relief, school lunch and child nutrition benefits, 
     immunizations and testing and treatment for symptoms of 
     communicable diseases, foster care and adoption payments 
     under parts B and E of Title IV of the Social Security Act, 
     community programs for the protection of life or safety, 
     certain elementary and secondary education programs, Head 
     Start, the Job Training Partnership Act, and higher education 
     grants and loans.
       Exceptions are made for refugees, asylees, aliens whose 
     deportation is being withheld, and noncitizens who are 
     veterans, on active duty, or the spouse or unmarried child of 
     such an individual.
     Senate amendment
       Excepted programs are similar to the House with the 
     following differences:
       (1) benefits under Head Start Act and the Job Training 
     Partnership Act are not excepted;
       (2) the exception for foster care and adoption assistance 
     is limited to Part E of Title IV of the Social Security Act;
       (3) the exception for testing and treatment of communicable 
     diseases is more limited and must be triggered by a finding 
     by HHS that detection and treatment of a particular disease 
     is necessary to prevent its spread; and
       (4) includes an exception for education assistance under 
     titles III, VII, and VIII of the Public Health Service Act.
       Excepted classes are similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and Senate 
     amendment as follows. (1) The definition of Federal Means 
     Tested Public Benefit (defined as ``a public benefit 
     (including cash, medical, housing, and food assistance and 
     social services) of the Federal Government in which the 
     eligibility of an individual, household, or family 
     eligibility unit for benefits, or the amount of such 
     benefits, or both are determined on the basis of income, 
     resources, or financial need of the individual, household, or 
     unit'') was deleted due to the Byrd rule. It is the intent of 
     conferees that this definition be presumed to be in place for 
     purposes of this title. (2) Regarding excepted programs, the 
     conference agreement follows the House bill on testing and 
     treatment of communicable diseases and by adding Head Start 
     and the Job Training Partnership Act as excepted programs; 
     the conference agreement adds refugee and entrant assistance 
     as an excepted program; and the conference agreement follows 
     the Senate amendment by adding education assistance under 
     titles III, VII, and VIII of the Public Health Services Act 
     as an excepted program.


               5. Notification and Information Reporting

     Present law
       Notification. Under regulation, individual advance written 
     notice must be given of an intent to suspend, reduce, or 
     terminate SSI benefits.
       Information Reporting. AFDC and SSI restrict the use or 
     disclosure of information concerning applicants and 
     recipients to purposes connected to the administration of 
     needs-based Federal programs.
     House bill
       Each Federal agency that administers an affected program 
     shall post information and provide general notification to 
     the public and to program recipients of changes regarding 
     eligibility.
       Agencies that administer SSI, housing assistance programs 
     under the United States Housing Act of 1937, or block grants 
     for temporary assistance for needy families (the successor 
     program to AFDC) are required to furnish information about 
     aliens they know to be unlawfully in the United States to the 
     Immigration and Naturalization Service (INS) at least four 
     times annually and upon INS request.
     Senate amendment
       Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

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


6. Aliens Who Are Not Qualified Aliens or Nonimmigrants Ineligible for 
                    State and Local Public Benefits

     Present law
       Under Plyler vs. Doe (457 U.S. 202 (1982)), States may not 
     deny illegal alien children access to a public elementary 
     education without authorization from Congress. However, the 
     narrow 5-4 Supreme Court decision may imply that illegal 
     aliens may be denied at least some State benefits and that 
     Congress may influence the eligibility of illegal aliens for 
     State benefits. Many, but not all, State general assistance 
     laws currently deny illegal aliens means-tested general 
     assistance.
     House bill
       Illegal aliens are ineligible for all State and local 
     public benefits, with limited exceptions for emergency 
     medical services, emergency disaster relief, immunizations 
     and testing and treatment for symptoms of communicable 
     diseases, and programs necessary for the protection of life 
     or safety. States may, however, pass laws after the date of 
     enactment that specify that illegal aliens may be eligible 
     for certain State or local benefits that otherwise would be 
     denied under this section.
     Senate amendment
       Similar to House bill, except that the exception for 
     communicable diseases is more limited and must be triggered 
     by a finding by HHS that testing and treatment of a 
     particular disease is necessary to prevent its spread.
     Conference agreement
       The conference agreement follows the House bill.
       No current State law, State constitutional provision, State 
     executive order or decision of any State or Federal court 
     shall provide a sufficient basis for a State to be relieved 
     of the requirement to deny benefits to illegal aliens. Laws, 
     ordinances, or executive orders passed by county, city or 
     other local officials will not allow those entities to 
     provide benefits to illegal aliens. Only the affirmative 
     enactment of a law by a State legislature and signed by the 
     Governor after the date of enactment of this Act, that 
     references this provision, will meet the requirements of this 
     section.
       The phrase ``affirmatively provides for such eligibility'' 
     means that the State law enacted must specify that illegal 
     aliens are eligible for State or local benefits. Persons 
     residing under color of law shall be considered to be aliens 
     unlawfully present in the United States and are prohibited 
     from receiving State or local benefits, as defined, 
     regardless of the enactment of any State law.
       The conference agreement provides that no State or local 
     government entity shall prohibit, or in any way restrict, any 
     entity or official from sending to or receiving from the INS 
     information regarding the immigration status of an alien or 
     the presence, whereabouts, or activities of illegal aliens. 
     It does not require, in and of itself, any government agency 
     or law enforcement official to communicate with the INS.
       The conferees intend to give State and local officials the 
     authority to communicate with the INS regarding the presence, 
     whereabouts, or activities of illegal aliens. This provision 
     is designed to prevent any State or local law, ordinance, 
     executive order, policy, constitutional provision, or 
     decision of any Federal or State court that prohibits or in 
     any way restricts any communication between State and local 
     officials and the INS. The conferees believe that immigration 
     law enforcement is as high a priority as other aspects of 
     Federal law enforcement, and that illegal aliens do not have 
     the right to remain in the United States undetected and 
     unapprehended.


 7. State Authority to Limit Eligibility of Qualified Aliens for State 
                            Public Benefits

     Present law
       Under Graham v. Richardson (403 U.S. 365 (1971)), States 
     may not deny legal permanent residents State-funded 
     assistance that is provided to equally needy citizens without 
     authorization from Congress.
       Currently, there is no Federal law barring legal temporary 
     residents (i.e., nonimmigrants) from State and local needs-
     based programs. In general, States are restricted in denying 
     assistance to nonimmigrants where the denial is inconsistent 
     with the terms under which the nonimmigrants were admitted. 
     Where a denial of benefits is not inconsistent with Federal 
     immigration law, however, States have broader authority to 
     deny benefits and States often do deny certain benefits to 
     nonimmigrants. Also, aliens in most nonimmigrant categories 
     generally may have difficulty qualifying for many State and 
     local benefits because of requirements that they be State 
     ``residents.''
     House bill
       States are authorized to determine the eligibility of 
     ``qualified aliens,'' nonimmigrants, and aliens paroled into 
     the United States for less than 1 year for any State or local 
     means-tested public benefit program. Noncitizens receiving 
     State and local benefits on the date of enactment would 
     remain eligible for benefits until January 1, 1997.
       Exceptions to State authority to deny benefits are made for 
     refugees, asylees and aliens whose deportation has been 
     withheld (for 5 years), permanent resident aliens who

[[Page H8928]]

     have worked in the United States (in combination with their 
     spouse or parents) for at least 10 years, and noncitizens who 
     are veterans or on active duty or their spouse or unmarried 
     child.
     Senate amendment
       Similar to House bill, except that under Byrd rule the 
     definition of ``State public benefits'' (sec. 2412(c)) is 
     deleted.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment. The conference agreement does not include a 
     definition of State public benefits in this section because 
     the definition was dropped due to the Byrd rule. However, it 
     is the intent of House and Senate conferees that the 
     following definition be used by States in carrying out the 
     authority granted by this section: ``STATE PUBLIC BENEFITS 
     DEFINED.--The term `State public benefits' means any means-
     tested public benefits of a State or political subdivision of 
     a State under which the State or political subdivision 
     specifies the standards for eligibility, and does not include 
     any Federal public benefit.''

      Subtitle C--Attribution of Income and Affidavits of Support


   8. Federal Attribution of Sponsor's Income and Resources to Alien

     Present law
       Federal Benefits. In determining whether an alien meets the 
     means test for AFDC, SSI (except in cases of blindness or 
     disability occurring after entry), and food stamps, the 
     resources and income of an individual who filed an affidavit 
     of support (``sponsor'') for the alien (and the income and 
     resources of the individual's spouse) are taken into account 
     during a designated period after entry. Sponsor-to-alien 
     deeming provisions were added to these three programs in part 
     because several courts have found that affidavits of support, 
     under current practice, do not obligate sponsors to reimburse 
     government agencies for benefits provided to sponsored 
     aliens. See below.
       Amounts of Income and Resources Deemed. While the offset 
     formulas vary among the programs, the amount of income and 
     resources deemed under AFDC, SSI, and Food Stamps is reduced 
     by certain offsets to provide for some of the sponsor's own 
     needs.
       Length of Deeming Period. For AFDC and Food Stamps, 
     sponsor-to-alien deeming applies to a sponsored alien seeking 
     assistance within 3 years of entry. Through September 1996, 
     sponsor-to-alien deeming applies to a sponsored alien seeking 
     SSI within 5 years of entry, after which the deeming period 
     reverts to 3 years.
       Review Upon Reapplication. Regulations implementing the 
     food stamp program expressly require providing information on 
     a sponsor's resources as part of recertification.
       Application. No provision.
     House bill
       Federal Benefits. During the applicable deeming period (see 
     ``Length of Deeming Period'' below), the income and resources 
     of a sponsor and the sponsor's spouse are to be taken into 
     account under all Federally-funded means-tested programs 
     (with the exception of the programs below) in determining the 
     sponsored individual's neediness. Excepted programs are 
     emergency medical services, emergency disaster relief, school 
     lunch and child nutrition assistance, immunizations and 
     testing and treatment for symptoms of communicable diseases, 
     certain programs that protect life, safety, or public health, 
     certain foster care and adoption assistance, Head Start, Job 
     Training Partnership Act programs, certain elementary and 
     secondary education programs, and higher education grants and 
     loans.
       Amounts of Income and Resources Deemed. The full income and 
     resources of the sponsor and the sponsor's spouse are deemed 
     to be that of the sponsored alien.
       Length of Deeming Period. Deeming extends until 
     citizenship, unless the noncitizen has worked for at least 10 
     years in the United States (either individually or in 
     combination with the noncitizen's spouse and parents).
       Review Upon Reapplicaiton. Whenever a sponsored noncitizen 
     is required to reapply for benefits under any Federal means-
     tested public benefits program, the agency must review the 
     income and resources deemed to the sponsored noncitizen.
       Application. For programs that already deem income and 
     resources on the date of enactment, the changes in this 
     section apply immediately; other programs must implement 
     changes required within 180 days after the date of enactment.
     Senate amendment
       Federal Benefits. Under the Byrd rule, the definition of 
     ``Federal means-tested program'' (sec. 2403(c)(1)) is 
     deleted.
       Otherwise similar to House bill, with differences in 
     exceptions to Federal means-tested programs noted above for 
     the 5-year bar.
       Amounts of Income and Resources Deemed. Similar to House 
     bill.
       Length of Deeming Period. Similar to House bill.
       Review Upon Reapplication. Similar to House bill.
       Application. Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment, with the modification of certain additional 
     excepted programs as noted in item 4 above.
       The allowance for treatment of communicable diseases is 
     very narrow. The conferees intend that it only apply where 
     absolutely necessary to prevent the spread of such diseases. 
     This is only a stop-gap measure until the deportation of a 
     person or persons unlawfully here. It is not intended to 
     provide authority for continued treatment of such diseases 
     for a long term.
       The allowance for emergency medical services under Medicaid 
     is very narrow. The conferees intend that it only apply to 
     medical care that is strictly of an emergency nature, such as 
     medical treatment administered in an emergency room, critical 
     care unit, or intensive care unit. The conferees do not 
     intend that emergency medical services include pre-natal or 
     delivery care assistance that is not strictly of an emergency 
     nature as specified herein.


9. Authority for States to Provide for Attribution of Sponsor's Income 
       and Resources to the Alien with Respect to State Programs

     Present law
       The highest courts of at least two States have held that 
     the Supreme Court decision barring State discrimination 
     against legal aliens in providing State benefits without 
     Federal authorization (Graham v. Richardson, 403 U.S. 365 
     (1971)) prohibits State sponsor-to-alien deeming requirements 
     for State benefits.
     House bill
       State and local governments may, for the deeming period 
     that applies to Federal benefits, deem a sponsor's income and 
     resources (and those of the sponsor's spouse) to a sponsored 
     individual in determining eligibility for and the amount of 
     needs-based benefits. State and local governments may not 
     require deeming for the following State public benefits: 
     emergency medical services, emergency disaster relief, school 
     lunch and child nutrition assistance, immunizations and 
     testing and treatment for symptoms of communicable diseases, 
     foster care and adoption payments, and certain programs to 
     protect life and safety.
     Senate amendment
       Similar to House bill, except that the exception for 
     communicable diseases is limited to testing and treatment of 
     the disease itself and must be triggered by a finding by the 
     chief State health official that it is necessary to prevent 
     spread of the disease.
     Conference agreement
       The conference agreement follows the House bill.


          10. Requirements for Sponsor's Affidavit of Support

     Present law
       In General. Administrative authorities may request an 
     affidavit of support on behalf of an alien seeking permanent 
     residency pursuant to regulation. Requirements for affidavits 
     of support are not specified by statute.
       Under the Immigration and Nationality Act, an alien who is 
     likely to become a public charge may be excluded from entry 
     unless this restriction is waived, as is the case for 
     refugees. By regulation and administrative practice, the 
     State Department and the Immigration and Naturalization 
     Service permit a prospective permanent resident alien (also 
     immigrant or green card holder) who otherwise would be 
     excluded as a public charge (i.e., because of insufficient 
     means or prospective income) to overcome exclusion through an 
     affidavit of support or similar document executed by an 
     individual in the United States commonly called a 
     ``sponsor.'' It has been reported that roughly one-half of 
     the aliens who obtain legal permanent resident status have 
     had affidavits of support filed on their behalf.
       Various State court decisions and decisions by immigration 
     courts have held that the affidavits of support, as currently 
     constituted, do not impose a binding obligation on the 
     sponsor to reimburse State agencies providing aid to the 
     sponsored alien.
       Forms. No statutory provision. The Department of Justice 
     issues a form (Form I-134) that complies with current 
     sponsorship guidelines.
       Notification of Change of Address. There is no express 
     requirement under current administrative practice that 
     sponsors inform welfare agencies of a change in address. 
     However, a sponsored alien who applies for benefits for which 
     deeming is required must provide various information 
     regarding the alien's sponsor.
       Reimbursement of Government Expenses. Various State court 
     decisions and decisions by immigration courts have held that 
     these affidavits, as currently constituted, do not impose a 
     binding obligation on the sponsor to reimburse State agencies 
     providing aid to the sponsored alien.
       Definitions. There are no firm administrative restrictions 
     on eligibility to execute an affidavit of support. There is 
     no definition of ``Means-tested Public Benefits Program''.
       Effective Date. No provision.
       Benefits Not Subject to Reimbursement. No provision.
     House bill
       In General. The proposal provides that when affidavits of 
     support are required, they must comply with the following:
       Affidavits of support must be executed as contracts that 
     are legally enforceable against sponsors by Federal, State, 
     and local agencies with respect to any means-tested benefits 
     (with exceptions noted below) paid to sponsored aliens before 
     they become citizens.
       Affidavits of support must be enforceable against the 
     sponsor by the sponsored alien.

[[Page H8929]]

       Reimbursement shall be requested for all Federal, State or 
     local need-based programs with the exceptions noted below.
       To qualify to execute an affidavit of support, an 
     individual must meet the revised definition of sponsor below.
       Governmental entities that provide benefits may seek 
     reimbursement up to 10 years after a sponsored alien last 
     receives benefits.
       Sponsorship extends until the alien becomes a citizen.
       Forms. The Attorney General, in consultation with the 
     Secretary of State and the Secretary of HHS, shall formulate 
     an affidavit of support within 90 days after enactment, 
     consistent with this section.
       Notification of Change of Address. Until they no longer are 
     potentially liable for reimbursement of benefits paid to 
     sponsored individuals, sponsors must notify the Attorney 
     General and the State, district, territory or possession in 
     which the sponsored individual resides of any change of their 
     address within 30 days of moving. Failure to notify may 
     result in a civil penalty of up to $2,000 or, if the failure 
     occurs after knowledge that the sponsored individual has 
     received a reimbursable benefit, of up to $5,000.
       Reimbursement of Government Expenses. If a sponsored alien 
     receives any benefit under any means-tested public assistance 
     program, the appropriate Federal, State, or local official 
     shall request reimbursement by the sponsor in the amount of 
     such assistance. Thereafter the official may seek 
     reimbursement in court if the sponsor fails to respond within 
     45 days of the request that the sponsor is willing to begin 
     repayments. The official also may seek reimbursement through 
     the courts within 60 days after a sponsor fails to comply 
     with the terms of repayment. The Attorney General in 
     consultation with the Secretary of HHS, shall prescribe 
     regulations on requesting reimbursement. No action may be 
     brought later than 10 years after the alien last received 
     benefits.
       Definitions. A ``sponsor'' is a citizen or an alien 
     lawfully admitted to the United States for permanent 
     residence who petitioned for immigration preference for the 
     sponsored alien, is at least 18 years of age, and resides in 
     any State.
       A ``Means-Tested Public Benefits Program'' is a program of 
     public benefits of the Federal, State or local government in 
     which eligibility for or the amount of, benefits or both are 
     determined on the basis of income, resources, or financial 
     need.
       Effective Date. The changes regarding affidavits of support 
     shall apply to affidavits of support executed no earlier than 
     60 days or later than 90 days after the Attorney General 
     promulgates the form.
       Benefits Not Subject to Reimbursement. Governmental 
     entities cannot seek reimbursement with respect to:
       emergency medical services;
       emergency disaster relief;
       school lunch and child nutrition assistance;
       payments for foster care and adoption assistance;
       immunizations and testing for and treatment of communicable 
     diseases;
       certain programs that protect life, safety, or public 
     health;
       postsecondary education benefits;
       means-tested elementary and secondary education programs;
       Head Start; and
       Job Training Partnership Act programs.
     Senate amendment
       In General. Under the Byrd rule, the definition of ``means-
     tested public benefits program'' (sec. 2423(a)) is deleted. 
     Otherwise similar to House bill.
       Forms. Similar to House bill.
       Notification of Change of Address. Similar to House bill.
       Reimbursement of Government Expenses. Similar to House 
     bill.
       Definitions. Similar to House bill. Definition for ``Means-
     tested public benefits program'' deleted under the Byrd rule.
       Effective Date. Similar to House bill.
       Benefits Not Subject to Reimbursement. Similar to House 
     bill except:
       does not add Head Start and Job Training Partnership Act 
     programs to the list of excepted programs;
       the exception for foster care and adoption assistance is 
     limited to part E of Title IV of the Social Security Act;
       the exception for testing and treatment of a communicable 
     disease is more limited and must be triggered by a finding by 
     HHS that it is necessary to prevent the disease's spread; and
       adds exception for education assistance under titles III, 
     VII, and VIII of the Public Health Service Act.
     Conference agreement
       The conference agreement generally follows the House bill 
     and Senate amendment. The definition of Means-Tested Public 
     Benefits Program (defined as ``a public benefit (including 
     cash, medical, housing, and food assistance and social 
     services) of the Federal Government or of a State or 
     political subdivision of a State in which the eligibility of 
     an individual, household, or family eligibility unit for 
     benefits under the program, or the amount of such benefits, 
     or both are determined on the basis of income, resources, or 
     financial need of the individual, household, or unit'') for 
     purposes of this section was deleted due to the Byrd rule. It 
     is the intent of conferees that this definition be presumed 
     to be in place for purposes of this title. With regard to 
     excepted programs, the conference agreement follows the House 
     bill on testing and treatment of communicable diseases and by 
     adding Head Start and Job Training Partnership Act as 
     excepted programs; the conference agreement follows the 
     Senate amendment by adding education assistance under titles 
     III, VII, and VIII of the Public Health Services Act as an 
     excepted program.

                     Subtitle D--General Provisions


                            11. Definitions

     Present law
       In General. Federal assistance programs that have alien 
     eligibility restrictions generally reference specific classes 
     defined in the Immigration and Nationality Act.
       Qualified Alien. Some programs allow benefits for otherwise 
     eligible aliens who are ``permanently residing under color of 
     law (PRUCOL).'' This term is not defined under the 
     Immigration and Nationality Act, and there has been some 
     inconsistency in determining which classes of aliens fit 
     within the PRUCOL standard.
     House bill
       In General. Unless otherwise provided, the terms used in 
     this title have the same meaning as defined in Section 101(a) 
     of the Immigration and Nationality Act.
       Qualified Alien. An alien who is a lawful permanent 
     resident, refugee, asylee, or an alien who has been paroled 
     into the United States for at least 1 year.
     Senate amendment
       In General. Similar to House bill.
       Qualified Alien. Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


      12. Verification of Eligibility for Federal Public Benefits

     Present law
       State agencies that administer most major Federal programs 
     with alienage restrictions generally use the SAVE (Systematic 
     Alien Verification for Entitlements) system to verify the 
     immigration status of aliens applying for benefits.
     House bill
       The Attorney General must adopt regulations to verify the 
     lawful presence of applicants for Federal benefits no later 
     than 18 months after enactment. States must have a 
     verification system that complies with these regulations 
     within 24 months of their adoption, and must authorize 
     necessary appropriations.
     Senate amendment
       Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                       13. Statutory Construction

     Present law
       No provision.
     House bill
       This title addresses only program eligibility based on 
     alienage and does not address whether any individual meets 
     other eligibility criteria. This title does not address alien 
     eligibility for basic education or for any program of foreign 
     assistance.
     Senate amendment
       Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 14. Communication Between State and Local Government Agencies and the 
                 Immigration and Naturalization Service

     Present law
       The confidentiality provisions of various State statutes 
     may prohibit disclosure of immigration status obtained under 
     them. Some Federal laws, including the Family Education 
     Rights and Protection Act, may deny funds to certain State 
     and local agencies that disclose a protected individual's 
     immigration status. Various localities have enacted laws 
     preventing local officials from disclosing the immigration 
     status of individuals to INS.
     House bill
       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.
     Senate amendment
       Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                        15. Qualifying Quarters

     Present law
       No provision.
     House bill
       In determining whether an alien may qualify for benefits 
     under the exception for individuals who have worked at least 
     40 quarters while in the United States (see sections 402 and 
     421 above), work performed by parents and spouses may be 
     credited to aliens under certain circumstances. Each quarter 
     of work performed by the parent while an alien was under the 
     age of 18 is credited to the alien, provided the parent did 
     not receive any Federal public benefits during the quarter. 
     Similarly, each quarter of work performed by a spouse of an 
     alien during their marriage is credited to the alien, if the 
     spouse did not receive any Federal public benefits during the 
     quarter.

[[Page H8930]]

     Senate amendment
       Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

                   Subtitle E--Conforming Amendments


         16. Conforming Amendments Relating to Assisted Housing

     Present law
       No provision.
     House bill
       This section consists of a series of technical and 
     conforming amendments.
     Senate amendment
       Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

   Subtitle F--Earned Income Credit Denied to Unauthorized Employees


  17. Earned Income Credit Denied to Individuals Not Authorized to be 
                     Employed in the United States

       [Note.--For further description of this and additional 
     earned income credit provisions, see Title IX: Miscellaneous 
     below.]
     Present law
       Certain eligible low-income workers are entitled to claim a 
     refundable credit of up to $3,556 in 1996 on their income tax 
     return. The amount of the credit an eligible individual may 
     claim depends upon whether the individual has one, more than 
     one, or no qualifying children and is determined by 
     multiplying the credit rate by the taxpayer's earned income 
     up to an earned income amount. The maximum amount of the 
     credit is the product of the credit rate and the earned 
     income amount. For taxpayers with earned income (or adjusted 
     gross income (AGI), if greater) in excess of the beginning of 
     the phaseout range, the maximum credit amount is reduced by 
     the phaseout rate multiplied by the amount of earned income 
     (or AGI, if greater) in excess of the beginning of the 
     phaseout range. For taxpayers with earned income (or AGI, if 
     greater) in excess of the end of the phaseout range, no 
     credit is allowed.
       In order to claim the credit, an individual must either 
     have a qualifying child or meet other requirements. A 
     qualifying child must meet a relationship test, an age test, 
     an identification test, and a residence test. In order to 
     claim the credit without a qualifying child, an individual 
     must not be a dependent and must be over age 24 and under age 
     65.
       To satisfy the identification test, individuals must 
     include on their tax return the name and age of each 
     qualifying child. For returns filed with respect to tax year 
     1996, individuals must provide a taxpayer identification 
     number (TIN) for all qualifying children born on or before 
     November 30, 1996. For returns filed with respect to tax year 
     1997 and all subsequent years, individuals must provide TINs 
     for all qualifying children, regardless of their age. An 
     individual's TIN is generally that individual's social 
     security number.
       The Internal Revenue Service may summarily assess 
     additional tax due as a result of a mathematical or clerical 
     error without sending the taxpayer a notice of deficiency and 
     giving the taxpayer an opportunity to petition the Tax Court. 
     Where the IRS uses the summary assessment procedure for 
     mathematical or clerical errors, the taxpayer must be given 
     an explanation of the asserted error and a period of 60 days 
     to request that the IRS abate its assessment. The IRS may not 
     proceed to collect the amount of the assessment until the 
     taxpayer has agreed to it or has allowed the 60-day period 
     for objecting to expire. If the taxpayer files a request for 
     abatement of the assessment specified in the notice, the IRS 
     must abate the assessment. Any reassessment of the abated 
     amount is subject to the ordinary deficiency procedures. The 
     request for abatement of the assessment is the only procedure 
     a taxpayer may use prior to paying the assessed amount in 
     order to contest an assessment arising out of a mathematical 
     or clerical error. Once the assessment is satisfied, however, 
     the taxpayer may file a claim for refund if he or she 
     believes the assessment was made in error.
     House bill
       Individuals are not eligible for the credit if they do not 
     include their taxpayer identification number (and, if 
     married, their spouse's taxpayer identification number) on 
     their tax return. Solely for these purposes and for purposes 
     of the present-law identification test for a qualifying 
     child, a taxpayer identification number is defined as a 
     social security number issued to an individual by the Social 
     Security Administration other than a number issued under 
     section 205(c)(2)(B)(i)(II) (or that portion of sec. 
     205(c)(2)(B)(i)(III) relating to it) of the Social Security 
     Act (regarding the issuance of a number to an individual 
     applying for or receiving Federally funded benefits).
       If an individual fails to provide a correct taxpayer 
     identification number, such omission will be treated as a 
     mathematical or clerical error. If an individual who claims 
     the credit with respect to net earnings from self-employment 
     fails to pay the proper amount of self-employment tax on such 
     net earnings, the failure will be treated as a mathematical 
     or clerical error for purposes of the amount of credit 
     allowed.
     Senate amendment
       Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

    Title V: Child Protection Block Grant Programs and Foster Care, 
          Adoption Assistance, and Independent Living Programs

   Subtitle A--Child Protection Block Grant Program and Foster Care, 
          Adoption Assistance, and Independent Living Programs

     Present law
       Under current law, there are at least 36 programs designed 
     to help children who are victims of abuse or neglect. These 
     programs address the child protection issue by supporting 
     abuse reporting and investigation; abuse prevention; child 
     and family assessment, preservation, and support; foster 
     care; adoption; and training of social workers, foster 
     parents, judges, and others. These programs can be divided 
     into two general categories. The first are entitlement 
     programs under jurisdiction of the Committee on Ways and 
     Means and the Finance Committee, nearly all of which provide 
     unlimited funding for foster and adoption maintenance 
     payments, administrative costs, and training. The two 
     exceptions are the Family Preservation and Support Program 
     which provides capped entitlement funds to help States 
     provide services that keep families together and prevent 
     abuse, and the Independent Living program which provides 
     capped entitlement funds to help children in foster care make 
     the transition to living on their own. The second group of 
     programs are appropriated programs. These programs are 
     smaller and, except the Child Welfare Services Program, are 
     generally under the jurisdiction of the Economic and 
     Educational Opportunities Committee and the Labor and Human 
     Resources Committee.
     House bill
       The House provision retains all the open-ended entitlement 
     programs to ensure that States have adequate resources to 
     help abused children that must be removed from their homes. 
     The provision also combines the two capped entitlement 
     programs and many of the smaller programs into two block 
     grants that will simplify administration, promote 
     flexibility, and increase efficiency. Working in conjunction 
     with the Committee on Economic and Educational Opportunity, 
     the Ways and Means Committee has created a block grant that 
     is identical to a block grant created by the Opportunities 
     Committee. Across the two Committees, a total of 11 programs 
     are combined into the new block grant structure. Programs 
     under jurisdiction of the Opportunities Committee are 
     mentioned briefly below to clarify the structure of the 
     overall Federal program for helping abused children and their 
     families.
     Senate amendment
       The Senate amendment does not include the block grant; the 
     amendment makes no changes in current law.
     Conference agreement
       The conference agreement follows the Senate amendment.

    Chapter 1--Block Grants to States for the Protection of Children


                               1. purpose

     Present law
       Child Welfare Services, now provided for in Title IV-B of 
     the Social Security Act, are designed to help States provide 
     child welfare services, family preservation, and community-
     based family support services.
     House bill
       The proposed Child Protection Block Grant would replace 
     current law under Title IV-B. The purpose of the Child 
     Protection Block Grant is to:
       (1) identify and assist families at risk of abusing or 
     neglecting their children;
       (2) operate a system for receiving reports of abuse or 
     neglect of children;
       (3) improve the intake, assessment, screening, and 
     investigation of reports of abuse and neglect;
       (4) enhance the general child protective system by 
     improving risk and safety assessment tools and protocols;
       (5) improve legal preparation and representation, including 
     procedures for appealing and responding to appeals of 
     substantiated reports of abuse and neglect;
       (6) provide support, treatment, and family preservation 
     services to families which are, or are at risk of, abusing or 
     neglecting their children;
       (7) support children who must be removed from or who cannot 
     live with their families;
       (8) make timely decisions about permanent living 
     arrangements for children who must be removed from or who 
     cannot live with their families;
       (9) provide for continuing evaluation and improvement of 
     child protection laws, regulations, and services;
       (10) develop and facilitate training protocols for 
     individuals mandated to report child abuse or neglect; and
       (11) develop and enhance the capacity of community-based 
     programs to integrate shared leadership strategies between 
     parents and professionals to prevent and treat child abuse 
     and neglect at the neighborhood level.
     Senate amendment
       The amendment does not change current law.
     Conference agreement
       The conference agreement follows the Senate amendment.

[[Page H8931]]

                           2. eligible states

     Present law
       To be eligible for funding under Title IV-B and IV-E, 
     States must have State plans, developed jointly with the 
     Secretary under Title IV-B, and approved by the Secretary 
     under Title IV-E. In addition, to receive funds under the 
     Child Abuse Prevention and Treatment Act (CAPTA), States must 
     comply with certain requirements including submission of a 
     State plan.
       States must have a child welfare services plan developed 
     jointly by the Secretary and the relevant State agency which 
     provides for single agency administration and which describes 
     services to be provided and geographic areas where services 
     will be available. The State plan also must meet many other 
     requirements, such as setting forth a 5-year statement of 
     goals for family preservation and family support and assuring 
     the review of progress toward those goals. For foster care 
     and adoption assistance, States must submit for approval a 
     Title IV-E plan providing for a foster care and adoption 
     assistance program and satisfying numerous requirements. The 
     Child Abuse Prevention and Treatment Act (CAPTA) requires 
     States to have in effect a law for reporting known and 
     suspected child abuse and neglect as well as providing for 
     prompt investigation of child abuse and neglect reports, 
     among many other requirements.
       To receive funding under Title IV-B and IV-E of the Social 
     Security Act, States must comply with certain procedures for 
     removal of children from their families when necessary, must 
     develop case plans for each child that are reviewed at least 
     every 6 months and contain specified information, and must 
     establish specific goals for the maximum number of eligible 
     children who will remain in foster care for more than 24 
     months.
       Under Title IV-B, for fiscal years beginning on or after 
     April 1, 1996, State plans must provide assurances that:
       (1) the State has completed an inventory of all children 
     who, before the inventory, had been in foster care under the 
     responsibility of the State for six months or more, which 
     determined: (i) the appropriateness of, and necessity for, 
     the foster care placement; (ii) whether the child could or 
     should be returned to the parents of the child or should be 
     freed for adoption or other permanent placement; and (iii) 
     the services necessary to facilitate the return of the child 
     or the placement of the child for adoption or legal 
     guardianship;
       (2) the State is operating to the satisfaction of the 
     Secretary: (i) a statewide information system on children who 
     are or have been in foster care in the last year; (ii) a case 
     review system for each child receiving foster care under the 
     supervision of the State; (iii) a service program designed to 
     help children return to families from which they have been 
     removed; or be placed for adoption; (iv) a preplacement 
     preventive service program designed to help children at risk 
     remain with their families; and
       (3) the State has reviewed State policies and procedures in 
     effect for children abandoned at birth; and is implementing 
     (or, will implement by October 31, 1996) such policies or 
     procedures to enable permanent decisions with respect to the 
     placement of such children to be made expeditiously. (For 
     fiscal years beginning before April 1, 1996, these standards 
     were incentive funding requirements that States had to meet 
     to receive their full Title IV-B allotment, and were known as 
     section 427 protections.)
       Title IV-E State plans must provide that reasonable efforts 
     will be made prior to the placement of a child in foster care 
     to prevent or eliminate the need for removal of the child 
     from her home and to make it possible for the child to return 
     to her home.
       Title IV-E State plans must provide that, where 
     appropriate, all steps will be taken, including cooperative 
     efforts with State AFDC and child support enforcement 
     agencies, to secure an assignment of any rights to support of 
     a child receiving foster care maintenance payments under 
     Title IV-E.
     House bill
       An ``Eligible State'' is one that has submitted to the 
     Secretary, not later than October 1, 1996, and every 3 years 
     thereafter, a plan which has been signed by the Chief 
     Executive Officer of the State. The plan must outline the 
     State's Child Protection Program and provide several 
     certifications regarding the nature of its child protection 
     program.
       A State plan must thoroughly describe the State Child 
     Protection Program by describing State activities and 
     procedures to be used for:
       (1) receiving and assessing reports of child abuse or 
     neglect;
       (2) investigating such reports;
       (3) with respect to families in which abuse or neglect has 
     been confirmed, providing services or referral for services 
     for families and children where the State makes a 
     determination that the child may safely remain with the 
     family;
       (4) protecting children by removing them from dangerous 
     settings and ensuring their placement in a safe environment;
       (5) providing training for individuals mandated to report 
     suspected cases of child abuse or neglect;
       (6) protecting children in foster care;
       (7) promoting timely adoptions;
       (8) protecting the rights of families, using adult 
     relatives as the preferred placement for children separated 
     from their parents if such relatives meet all relevant 
     standards; and
       (9) providing services aimed at preventing child abuse and 
     neglect.
       The State plan must also certify that the State:
       (1) has in effect laws that require reporting of child 
     abuse and neglect;
       (2) has in effect procedures for the immediate screening, 
     safety assessment, and prompt investigation of child abuse or 
     neglect reports;
       (3) has in effect procedures for the removal and placement 
     of abused or neglected children;
       (4) has in effect laws requiring immunity from prosecution 
     under State and local laws for individuals making good faith 
     reports of suspected or known cases of child abuse or 
     neglect;
       (5) has in effect no later than 2 years after enactment, 
     laws and procedures affording individuals an opportunity to 
     appeal an official finding of abuse or neglect;
       (6) has in effect procedures for developing and reviewing 
     written plans for the permanent placement of each child 
     removed from the family that: specify the goal for achieving 
     a permanent placement for the child in a timely fashion; 
     ensure that the plan is reviewed every 6 months; and ensure 
     that information about the child is gathered regularly and 
     placed in the case record.
       (7) has in effect a program to provide independent living 
     services to 16-19 year old youths (and, at State option, 
     youths up to age 22) who are in the foster care system but 
     have no family to support them. (Under the proposal, States 
     also will continue to receive capped entitlement grants for 
     Independent Living services as under current law.)
       (8) has in effect procedures or programs (or both) to 
     respond to reports of medical neglect of disabled infants;
       (9) has quantitative goals of the State child protection 
     program;
       (10) will comply with respect to fiscal years beginning on 
     or after April 1, 1996, with the same child protection 
     standards as under current law. Standards related to 
     abandoned children must be met by October 1, 1997;
       (11) will make reasonable efforts to prevent the placement 
     of children in foster care and to make it possible for the 
     child to return home. Each State must also certify that it 
     provides services for children and families where 
     maltreatment has been confirmed but the child remained with 
     the family;
       (12) will take all appropriate steps, including cooperative 
     efforts, to secure an assignment to the State of any rights 
     to support on behalf of each child receiving foster care 
     maintenance payments; and
       (13) has in effect requirements for disclosure of records 
     only to specified individuals and entities, and provisions 
     that allow for public disclosure of findings or information 
     about cases of child abuse or neglect that have resulted in a 
     child fatality or near fatality (except that such disclosure 
     shall not include identifying information about the 
     individual initiating a report of suspected child abuse or 
     neglect).
       The Secretary of HHS must determine whether the State plan 
     includes the required materials and certifications (except 
     material related to the certification of State procedures to 
     respond to reporting of medical neglect of disabled infants). 
     The Secretary cannot add new elements beyond those listed 
     above.
     Senate amendment
       The amendment does not change current law, except to 
     require that the State plan for foster care and adoption 
     assistance provide for the protection of the rights of 
     families, using adult relatives as the preferred placement 
     for children separated from their parents where such 
     relatives meet the relevant State child protection standards 
     (see item 8).
     Conference agreement
       The conference agreement follows the Senate amendment with 
     a modification to delete the proposed amendment dealing with 
     adult relative preferences.


                3. Grants to States for Child Protection

     Present law
       Title IV-B of the Social Security Act contains both 
     discretionary and capped entitlement funding for helping 
     States provide assistance to troubled families and their 
     children. Of capped entitlement funding for family 
     preservation and support, 1 percent is reserved for Indians. 
     For child welfare services under Title IV-B, $325 million is 
     authorized annually. For family preservation and support 
     services, $225 million is authorized in fiscal year 1996; 
     $240 million in fiscal year 1997; and $255 million in fiscal 
     year 1998. State allotments for child welfare services are 
     based on the State's child population and per capita income. 
     State allotments for family preservation and support are 
     based on the number of children in the State receiving Food 
     Stamps. Funds must be used for: ``protecting and promoting 
     the welfare of children * * * preventing unnecessary 
     separation of children from their families * * * restoring 
     children to their families if they have been removed * * * 
     family preservation services * * * community-based family 
     support services to promote the well-being of children and 
     families and to increase parents' confidence and 
     competence.''
       For-profit foster care providers are not eligible for 
     Federal funding under Title IV-E.
       Section 1123 of the Social Security Act requires the 
     Secretary to establish by regulation a new Federal review 
     system for child

[[Page H8932]]

     welfare which would allow penalties for misuse of funds. 
     Regulations are expected to be published during the summer of 
     1996. (This provision would not be affected by the House 
     proposal.)
     House bill
       The block grant contains both entitlement and appropriated 
     funds. From the entitlement funds, each eligible State must 
     receive from the Secretary an amount equal to the State share 
     of the Child Protection Block Grant amount for the fiscal 
     year (see below). A set-aside is provided for Indians equal 
     to 1 percent of the entitlement money flowing into the block 
     grant.
       Each eligible State is also given funds equal to the State 
     share of the authorization component of the block grant that 
     is appropriated each year. Indians are given 0.36 percent of 
     the appropriated money flowing into the block grant. Funds 
     for the authorization component of the block grant under this 
     section are not to exceed $325 million each year. No funds 
     from the block grant can be used to pay for foster care or 
     adoption maintenance payments.
       The term ``child protection amount'' means: $240 million 
     for fiscal year 1997; $255 million for fiscal year 1998; $262 
     million for fiscal year 1999; $270 million for fiscal year 
     2000; $278 million for fiscal year 2001; $286 million for 
     fiscal year 2002.
       The term ``State share'' means the qualified child 
     protection expenses of a State divided by the sum of the 
     qualified child protection expenses of all of the States. The 
     term ``qualified State expenditure'' means Federal grants to 
     the State under the Child Welfare Services Grant and the 
     Family Preservation and Support Services Grant in fiscal year 
     1994 or the average of 1992-94, whichever is greater. In 
     determining amounts for fiscal years 1992 through 1994, the 
     Secretary shall use information listed as actual amounts in 
     the Justification for Estimates for Appropriation Committees 
     of the Administration for Children and Families for fiscal 
     years 1994 through 1996.
       A State to which funds are paid under this section may use 
     the money in any manner the State deems appropriate to 
     accomplish the purposes of this part, but the funds must be 
     expended not later than the end of the immediately succeeding 
     fiscal year.
       For-profit, foster care facilities are eligible to receive 
     funds from the block grant.
       Under the terms and conditions of the block grant, States 
     are subject to several penalties:
       (1) For misuse of funds. If an audit determines that any 
     amounts provided to a State have been spent in violation of 
     this part, the Secretary must reduce the grant otherwise 
     payable for the next fiscal year by the amount of the 
     misspent funds, plus 5 percent of the grant;
       (2) For failure to maintain effort. If States fail to 
     maintain State spending equal to State expenditures under 
     Part B of Title IV in fiscal year 1994, the Secretary must 
     reduce the grant payable under this section by an amount 
     equal to the previous year's shortfall in maintenance of 
     effort. A penalty of 5 percent of the State grant must also 
     be imposed. States must maintain 100 percent of prior effort 
     in fiscal years 1997 and 1998; and 75 percent in fiscal years 
     1999 through 2002;
       (3) For failure to submit report. If the Secretary 
     determines that the State has not submitted mandatory 
     adoption and foster care data reports within 6 months of the 
     end of the fiscal year, the Secretary must reduce by 3 
     percent the amount of the State's block grant. If the report 
     is submitted before the end of the immediately succeeding 
     fiscal year, the Secretary shall rescind the penalty.
       Except in the case of failure to maintain effort, the 
     Secretary may not impose a penalty if the determination is 
     made that the State has reasonable cause for failing to 
     comply with the requirement. Further, a State must be 
     informed before any penalty is imposed and be given an 
     opportunity to enter into a corrective compliance plan. The 
     provision includes a series of deadlines for submission of 
     such corrective compliance plans and review by the Federal 
     government. No quarterly payment can be reduced by more than 
     25 percent; penalty amounts above 25 percent must be carried 
     forward to subsequent quarters.
       Each territory is entitled to receive from the Secretary 
     for any fiscal year an amount equal to the total obligations 
     due to the territory under the Social Security Act for fiscal 
     year 1995.
       Except as expressly provided in this Act, the Secretary may 
     not regulate the conduct of States under this part or enforce 
     any provision of this Act.
     Senate amendment
       The amendment does not change current law, except that it 
     would amend the definition of ``child care institution'' to 
     include for-profit providers (see item 6).
     Conference agreement
       The conference agreement follows the Senate amendment.


                    4. Data Collection and Reporting

     Present law
       In 1986, Congress established the National Advisory 
     Committee on Adoption and Foster Care Information to assist 
     HHS in designing a new comprehensive nationwide data 
     collection system with full system implementation expected to 
     be completed by October 1991. However, final regulations were 
     not issued until December 1993 with the first transmission of 
     data due May 1995. All States are now participating in the 
     Adoption and Foster Care Analysis and Reporting System 
     (AFCARS). HHS is currently analyzing the first datasets 
     transmitted from the States. The final rules require semi-
     annual reporting on all children in foster care. The data 
     collection is child and case specific and is intended to 
     yield a semi-annual snapshot of child welfare trends. It is 
     also intended to yield information that will enable 
     policymakers to ``track'' children in care and find out the 
     reasons why children enter foster care, how long children 
     stay in foster care, and what happens to children while in 
     foster care as well as after they leave foster care.
       In 1993, Congress authorized enhanced funding of 75 percent 
     for both the AFCARS system and for several additional 
     functions not originally envisioned as part of AFCARS 
     capability. These new functions included electronic data 
     exchange within the State, automated data collection on all 
     children in foster care, collection and management of 
     information necessary to facilitate delivery of child welfare 
     services and to determine eligibility for such services, case 
     management, case plan development and monitoring, and 
     information security. Enhanced funding of 75 percent for this 
     second data system, which HHS calls the Statewide Automated 
     Child Welfare Information System (SACWIS), expires on October 
     1, 1996.
     House bill
       The House provision leaves unaltered the current State data 
     reporting system on child protection. The enhanced funding 
     rate of 75 percent for the Statewide Automated Child Welfare 
     Information System (SACWIS) is extended for 1 additional 
     year, through fiscal year 1997.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                5. Funding for Studies of Child Welfare

     Present law
       Sec. 426 authorizes discretionary funding for child welfare 
     research and demonstration projects. No funds were 
     appropriated in 1996.
     House bill
       The Secretary is entitled to receive, for each of fiscal 
     years 1996 through 2002, $6 million to conduct a national 
     study based on random samples of children who are at risk of 
     child abuse or neglect, and $10 million for other research.
     Senate amendment
       The amendment does not change current law.
     Conference agreement
       The conference agreement follows the House bill. The 
     conferees recommend that the Secretary, in conducting the 
     random sample study, require that the study have a 
     longitudinal component and yield data that is reliable at the 
     State level for as many States as she determines is feasible. 
     The conferees also recommend that the Secretary carefully 
     consider selecting the sample from cases of confirmed abuse 
     or neglect and follow each case for several years while 
     obtaining information on, among other things, the type of 
     abuse or neglect involved, the frequency of contact with 
     State or local agencies, whether the child involved has been 
     separated from the family, and, if so, under what 
     circumstances, the number, type, and characteristics of out-
     of-home placements of the child, and the average duration of 
     each placement.


                             6. Definitions

     Present law
       The term ``child care institution'' means a licensed 
     nonprofit private or public facility which accommodates no 
     more than 25 children. The term does not apply to detention 
     facilities, forestry camps, training schools, or centers for 
     delinquent children.
     House bill
       Same as present law, except the word ``nonprofit'' is 
     deleted.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                        7. Conforming Amendments

     Present law
     House bill
       This section makes a series of technical and conforming 
     amendments to the Social Security Act and the Omnibus Budget 
     Reconciliation Act of 1986.
     Senate amendment
       The amendment redesignates section 1123 (42 U.S.C. 1320a-
     1a) the second place it appears as section 1123A.
     Conference agreement
       The conference agreement follows the Senate amendment.

  Chapter 2--Foster Care, Adoption Assistance, and Independent Living 
                                Programs


          8. Changes in Title IV-E of the Social Security Act

     Present law
       Title IV-E Foster Care and Title IV-E Adoption Assistance 
     are intended to help States finance foster care and adoption 
     assistance maintenance payments, administration, child 
     placement services, and training related to foster care and 
     adoption assistance.

[[Page H8933]]

       The purpose of the Title IV-E Independent Living Program is 
     to help older foster children make the transition to 
     independent living.
     House bill
       The most notable feature of House action on Title IV-E is 
     that all the entitlement programs remain intact. In addition, 
     the House retains the provision of current law that 
     guarantees Medicaid coverage for children who receive 
     maintenance payments from either the foster care or adoption 
     programs. On the other hand, the House provision does change 
     current law in three ways.
       First, the current law guarantee of eligibility for foster 
     care and adoption maintenance payments for children eligible 
     for the Aid to Families with Dependent Children (AFDC) 
     program was disrupted because the AFDC statute was completely 
     rewritten to give States the authority to establish their own 
     welfare programs. To ensure that the eligibility of poor 
     children for maintenance payments continues, the House 
     provision guarantees eligibility for all children from 
     families that would have been eligible for the AFDC program 
     as it existed in each State on the day before enactment of 
     this legislation.
       Second, the House provision allows States to use private 
     for-profit foster care facilities. The House believes that 
     States should be allowed to use private child care 
     organizations because they are fully capable of providing 
     quality services. States are responsible for ensuring that 
     children are in safe and reliable care whether it is provided 
     by public or private entities. The House can see no reason to 
     automatically refuse participation by an entire sector of the 
     child caring community.
       Third, the House provided enhanced funding for the 
     Statewide Automated Child Welfare Information System (SACWIS) 
     because automation is a vital part of providing quality child 
     protection services. The House has investigated progress by 
     the States in creating SACWIS and has found that several 
     States are now ready to begin actual implementation and that 
     as many as half the States can be expected to have 
     operational systems by next year if funding remains 
     available. Thus, the House is extending the enhanced funding 
     rate of 75 percent to encourage States to invest money in 
     these important systems.
     Senate amendment
       The amendment amends Title IV-E to include for-profit 
     providers in the definition of ``child care institutions'' 
     (see item 6). The provision also amends Title IV-E to require 
     that the State plan for foster care and adoption assistance 
     provide for the protection of the rights of families, using 
     adult relatives as the preferred placement for children 
     separated from their parents where such relatives meet the 
     relevant State child protection standards.
     Conference agreement
       The conference agreement follows the Senate amendment with 
     a modification to delete the proposed amendment dealing with 
     adult relative preference.

                        Chapter 3--Miscellaneous


  9. secretarial submission of legislative proposal for technical and 
                         conforming amendments

     Present law
       No provision.
     House bill
       Not later than 90 days after the date of enactment, the 
     Secretary of Health and Human Services must submit to 
     Congress a legislative proposal providing for technical and 
     conforming amendments required by the changes made in this 
     subtitle of the proposal.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the Senate amendment.


    10. sense of the congress regarding timely adoption of children

     Present law
       No provision.
     House bill
       This section expresses the sense of Congress that too many 
     adoptable children are spending too much time in foster care, 
     that States must take steps to increase the number of 
     children who are adopted in a timely manner, and that States 
     could achieve savings if they offered incentives for the 
     adoption of special needs children, among other provisions.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the Senate amendment.


                  11. effective date; transition rules

     Present law
       No provision.
     House bill
       The changes made in this subtitle will be effective on or 
     after October 1, 1996. Provisions that authorize and 
     appropriate funds in fiscal year 1996 for research and court 
     improvements, and certain technical and conforming amendments 
     are effective upon enactment. The proposal establishes 
     transition rules for pending claims, actions and proceedings, 
     and closing out accounts for programs that are terminated or 
     substantially modified.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the Senate amendment.

           Subtitle B--Child and Family Services Block Grant

     Present law
       No provision.
     House bill
       The block grant and associated activities under Subtitle B 
     are under the jurisdiction of the Economic and Educational 
     Opportunities Committee in the House and the Labor and Human 
     Resources Committee in the Senate. The Child and Family 
     Services Block Grant created by Subtitle B consolidates the 
     following programs into a single block grant: The Child Abuse 
     Prevention and Treatment Act, the Abandoned Infants 
     Assistance Act, adoption opportunities under the Child Abuse 
     Prevention and Treatment and Adoption Reform Act, the family 
     support centers under the McKinney Homeless Assistance Act, 
     and the Temporary Child Care and Crisis Nurseries Act. The 
     Child and Family Services Block Grant has the same State plan 
     and certification requirements as the Child Protection Block 
     Grant created by Subtitle A. The two Block Grants also have 
     the same data collection and reporting requirements for child 
     abuse incidence data and for the implementation of foster 
     care and adoption tracking systems. The Child and Family 
     Services Block Grant is authorized at $230 million for fiscal 
     year 1996 and ``such sums as may be necessary'' are 
     authorized for fiscal year 1997 through fiscal year 2002. 
     Title II of the Child and Family Services Block Grant 
     provides that funds be available for research, 
     demonstrations, training and technical assistance to better 
     protect children from maltreatment. Funds under this block 
     grant also will establish a National Clearinghouse for 
     Information Relating to Child Abuse, provide demonstration 
     grants for the development of innovative programs, provide 
     technical assistance to States to assist with child abuse 
     investigation and the termination of parental rights 
     proceedings, and provide training for professionals in 
     related fields. For these Title II activities, 12 percent of 
     the $230 million provided for this Block Grant is authorized 
     of which 40 percent must be available for demonstration 
     projects. The Missing Children's Assistance Act and the 
     Victims of Child Abuse Act of 1990 are both reauthorized.
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement follows the Senate amendment.

                          Title VI: Child Care


                     1. short title and references

     Present law
       No provision.
     House bill
       Short Title: Child Care and Development Block Grant 
     Amendments of 1996. Unless otherwise specified, references 
     should be considered as made to the Child Care and 
     Development Block Grant Act of 1990.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                                2. goals

     Present law
       No provision.
     House bill
       This section establishes the following goals for the Child 
     Care and Development Block Grant:
       (1) to allow each State maximum flexibility in developing 
     child care programs and policies that best suit the needs of 
     children and parents within the State;
       (2) to promote parental choice in making decisions on the 
     child care that best suits their family's needs;
       (3) to encourage States to provide consumer information to 
     help parents make informed child care choices;
       (4) to assist States in providing child care to parents 
     trying to become independent of public assistance; and
       (5) to assist States in implementing the health, safety, 
     licensing and registration standards established in State 
     regulations.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


      3. authorization of appropriations and entitlement authority

     Present law
       The authorization of appropriations for the Child Care and 
     Development Block Grant expires at the end of fiscal year 
     1995. Appropriations in fiscal year 1996 are $935 million. 
     (Sec. 658B of the CCDBG Act)
       [Note: In addition to appropriated funds, entitlement funds 
     are available for the Child Care Block Grant under the AFDC 
     Child Care, Transitional Child Care, and At-Risk Child Care 
     programs authorized by Title IV-A of the Social Security 
     Act.]
     House bill
       Authorization of Appropriations. There are authorized to be 
     appropriated $1,000,000,000

[[Page H8934]]

     for each of fiscal years 1996 through 2002. (Additional 
     mandatory funding will be provided for child care under the 
     Social Security Act so that a total of $22 billion will be 
     provided for child care over the 7-year period fiscal years 
     1996-2002.)
       Child Care Entitlement. The proposal establishes a single 
     child care block grant and State administrative system by 
     adding mandatory funds to the existing Child Care and 
     Development Block Grant (CCDBG). Specifically, one 
     discretionary and two mandatory streams of funding will be 
     consolidated in a reconstituted CCDBG.
       a. State General Entitlement. From the stream of 
     entitlement funding, each State will receive the amount of 
     funds it received for child care under all of the entitlement 
     programs currently under Title IV-A of the Social Security 
     Act (AFDC Child Care, Transitional Child Care, and At-Risk 
     Child Care) in fiscal year 1994, in fiscal year 1995, or the 
     average amount in fiscal years 1992 through 1994, whichever 
     is greater. This source of funds will provide States with 
     approximately $1.2 billion for child care each year between 
     1997 and 2002.
       b. Remainder. The mandatory funds remaining after the 
     allocation to Indians (see below) and the State General 
     Entitlement (see above) will be distributed among the States 
     based on the formula currently used in the Title IV-A At-Risk 
     Child Care Grant. Specifically, funds will be distributed 
     based on the proportion of the number of children under age 
     13 residing in the State to the number of all of the Nation's 
     children under age 13. States must provide matching funds at 
     the fiscal year 1995 State Medicaid rate to receive these 
     funds and must maintain spending at their fiscal year 1994 or 
     1995 level, whichever is greater, under the Title IV-A child 
     care programs. The money available to States through this 
     source of funds for fiscal years 1997 through 2002, 
     respectively, will be: $0.76 billion, $0.86 billion, $0.96 
     billion, $1.16 billion, $1.36 billion, and $1.51 billion.
       If a State does not use its full portion of funds, the 
     remaining portion will be redistributed to other States 
     according to section 402(i) of the At-Risk Child Care Grant 
     (as such section was in effect before October 1, 1995). Thus, 
     each State applying for these remaining funds will receive 
     the percentage of funds that equals the percentage of 
     children under age 13 residing in that State of all children 
     under age 13 residing in all the States that apply for funds. 
     The Secretary must determine whether States will use their 
     entire portion of funds no later than the end of the first 
     quarter of the subsequent fiscal year.
       c. Appropriation. Total child care funds under this 
     proposal will equal $22 billion for child care over the 7-
     year period fiscal years 1996-2002, including both the $15 
     billion in mandatory funds discussed above and $7 billion in 
     discretionary funds. Under current law for the three existing 
     AFDC-related child care programs, $1.1 billion in mandatory 
     funds will be spent in fiscal year 1996. In addition, a total 
     of $13.85 billion in mandatory funds would be authorized for 
     child care in fiscal years 1997-2002, starting at $2.0 
     billion in fiscal year 1997 and rising to $2.7 billion in 
     fiscal year 2002. Finally, as stated earlier, $1 billion will 
     be authorized annually in discretionary funds for the Child 
     Care and Development Block Grant.
       d. Indian Tribes. One percent of all funds under the 
     section are provided to Indian tribes.
       Use of Funds. Funds shall only be used to provide child 
     care assistance. Amounts received by a State, based on the 
     amounts received in previous years, shall be available for 
     use by the State without fiscal year limitation. All funds 
     from both mandatory and discretionary sources must be 
     transferred to the lead agency under the Child Care and 
     Development Block Grant and integrated into the State child 
     care programs.
       Not less than 70 percent of the total amount of mandatory 
     funds received by the State in a fiscal year must be used to 
     provide child care assistance to families that are receiving 
     assistance under a State program, families that are 
     attempting to transition off public assistance, and families 
     at risk of becoming dependent on public assistance.
     Senate amendment
       Same.
       Conference agreement
       The conference agreement follows the House bill and Senate 
     amendment, with a modification. The Secretary shall reserve 
     not less than 1 percent and not more than 2 percent of the 
     total amount appropriated (both mandatory and discretionary) 
     in each fiscal year for payments to Indian tribes and tribal 
     organizations.


                             4. lead agency

     Present Law
       The Chief Executive Officer of a State is required to 
     designate an appropriate State agency to act as the lead 
     agency in administering financial assistance under the Act. 
     (Sec. 658D of the CCDBG Act)
     House bill
       The proposal requires States to identify a lead agency to 
     administer all the child care funds received under the Act, 
     including funds received through other ``governmental or 
     nongovernmental'' agencies (instead of other ``State'' 
     agencies). States must ensure that ``sufficient time and 
     statewide distribution of the notice'' be given of the public 
     hearing on the development of the State plan. This section 
     strikes language in current law specifying issues that may be 
     considered during consultation with local governments on 
     development of the State plan.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                        5. application and plan

     Present law
       States are required to prepare and submit to the Secretary 
     an application that includes a State plan. The initial plan 
     must cover a 3-year period, and subsequent plans must cover 
     2-year periods. Required contents of the plan include 
     designation of a lead agency; outline of policies and 
     procedures regarding parental choice of providers, summary of 
     policies that guarantee unlimited parental access, parental 
     complaints, and consumer education; and overview of policies 
     that ensure compliance with State and local regulatory 
     requirements, establishment of and compliance with health and 
     safety requirements, and review of State licensing and 
     regulatory requirements.
       In addition, the State plan must provide that all funds 
     will be used for child care services, and that 25 percent of 
     funds will be reserved for activities to improve the quality 
     of child care and to increase the availability of early 
     childhood development and before- and after-school child 
     care. (Sec. 658E of the CCDBG Act)
       State plans must also assure that payment rates will be 
     adequate to provide eligible children with equal access to 
     child care as compared with children whose families are not 
     eligible for subsidies, and must assure that the State will 
     establish and periodically revise a sliding fee scale that 
     provides for cost sharing by families that receive child care 
     subsidies.
     House bill
       The proposal requires the State plan to cover a 2-year 
     period. States must provide a detailed description of 
     procedures to be used to assure parental choice of providers. 
     Instead of ``providing assurances,'' States must ``certify'' 
     that procedures are in effect within the State to ensure 
     unlimited parental access to the families providing care to 
     children and to ensure parental choice of child care 
     provider; the proposal also requires that the State plan 
     provide a detailed description of such procedures. Instead of 
     ``providing assurances,'' a State must ``certify'' that it 
     maintains a record of parental complaints and requires the 
     State to provide a detailed description of how such a record 
     is maintained and made available. The proposal changes the 
     consumer education part of the State plan to require 
     assurances that the State will collect and disseminate 
     consumer education information. States must certify that they 
     have in effect child care licensing requirements and provide 
     a detailed description of the requirements and how they are 
     enforced. This provision does not require that licensing 
     requirements be applied to specific types of child care 
     providers.
       States must ``certify'' that procedures are in effect to 
     ensure that child care providers receiving funds under this 
     Act comply with applicable State or local health and safety 
     requirements. The Secretary is required to develop minimum 
     standards for Indian tribes and tribal organizations 
     receiving assistance.
       The proposal eliminates review of State licensing and 
     regulatory requirements, notification to the Department of 
     Health and Human Services (HHS) when standards are reduced, 
     and supplementation. The proposal also eliminates the 
     requirement that unlicensed providers be registered. The 
     House decided to retain a current law requirement that all 
     States establish health and safety standards. The House 
     provision does not specify the particular standards that must 
     be established, but all States must have requirements on 
     prevention and control of infectious diseases (including 
     immunizations), building and physical premises safety, and 
     minimum health and safety training.
       A summary of the facts relied upon by the State to 
     determine that payment rates are sufficient to ensure equal 
     access to child care must be included in the State plan. 
     Funds must be used for child care services, for activities to 
     improve the quality and availability of such services, and 
     for any other activity that the State deems appropriate to 
     realize the goals specified above. The proposal deletes the 
     current law requirement that States reserve 25 percent of 
     funds for activities to improve the quality of child care and 
     to increase availability of early childhood development and 
     before- and after-school care. States may spend no more than 
     5 percent on administrative costs.
       States must spend a substantial portion of the amounts 
     available to provide child care to low-income working 
     families who are not working their way off welfare or are at 
     risk of becoming welfare dependent. However, States first 
     must comply with requirement that at least 70 percent of 
     mandatory funds must be used for welfare or at-risk families. 
     States must demonstrate how they will meet the child care 
     needs of welfare and at-risk families.
     Senate amendment
       Same, except the Senate maintains current law (which 
     requires States to ``provide assurances'' that child care 
     providers receiving funds under this Act comply with 
     applicable State or local health and safety requirements).

[[Page H8935]]

     Conference agreement
       The conference agreement follows the House bill with a 
     modification. The provision requires States to ``certify'' 
     that health and safety requirements are in effect within a 
     State applicable to child care providers.
       Nothing in the legislation either prohibits or requires 
     States to differentiate between federally subsidized child 
     care and nonsubsidized child care regarding the application 
     of specific standards and regulations. The cap of 5 percent 
     on administrative costs is included in both the House and 
     Senate passed bills. To help States implement this provision, 
     the Department of Health and Human Services should issue 
     regulations, in a timely manner and prior to the deadline for 
     submission of State plans, that define and determine true 
     administrative costs, as distinct from expenditures for 
     services. Eligibility determination and redetermination, 
     preparation and participation in judicial hearings, child 
     care placement, the recruitment, licensing, inspection, 
     reviews and supervision of child care placements, rate 
     setting, resource and referral services, training, and the 
     establishment and maintenance of computerized child care 
     information are an integral part of service delivery and 
     should not be considered administrative costs.


           6. Activities to Improve the Quality of Child Care

     Present law
       As stated above, 25 percent of State allotments must be 
     reserved for activities to improve child care quality and to 
     increase the availability of early childhood development and 
     before- and after-school child care. Section 658G specifies 
     how these funds are to be used. Of reserved funds, States are 
     required to use no less than 20 percent for improving the 
     quality of care, including resource and referral programs, 
     making grants or loans to assist providers in meeting State 
     and local standards, monitoring of compliance with licensing 
     and regulatory requirements, training of child care 
     personnel, and improving compensation for child care 
     personnel. (Sec. 658G of the CCDBG Act).
     House bill
       A State that receives child care funds must use at least 4 
     percent of all funds received (both mandatory and 
     discretionary) for activities designed to provide 
     comprehensive consumer education to parents and the public, 
     for activities that increase parental choice, and for 
     activities designed to improve the quality and availability 
     of child care.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 7. Repeal of Early Childhood Development and Before- and After-School 
                            Care Requirement

     Present law
       States are required to use no less than 75 percent of funds 
     reserved for quality improvement for activities to expand and 
     conduct early childhood development programs and before- and 
     after-school child care. (Sec. 658H of the CCDBG Act)
     House bill
       The set-aside for early childhood development programs and 
     before- and after-school care is repealed.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                   8. Administration and Enforcement

     Present law
       The Secretary of Health and Human Services (HHS) is 
     required to coordinate HHS and other Federal child care 
     agencies, to collect and publish a list of State child care 
     standards every 3 years, and to provide technical assistance 
     to States. The Secretary must also review, monitor, and 
     enforce compliance with the Act and the State plan by 
     withholding payments and imposing additional sanctions in 
     certain cases. (Sec. 658I of the CCDBG Act)
     House bill
       This section strikes the current law requirement that the 
     Secretary withhold further payments to a State in case of a 
     finding of noncompliance until the noncompliance is 
     corrected. Instead, the Secretary is authorized, in such 
     cases, to require that the State reimburse the Secretary for 
     any improperly spent funds, or the Secretary may deduct from 
     the administrative portion of the State's subsequent 
     allotment an amount equal to or less than the misspent funds, 
     or a combination of such options.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                              9. Payments

     Present law
       Payments received by a State for a fiscal year may be 
     expended in that fiscal year or in the succeeding 3 fiscal 
     years. (Sec. 658J of the CCDBG Act)
     House bill
       The bill replaces the word ``expended'' with ``obligated''. 
     However, the bill contains a drafting error. A provision that 
     would have struck ``3 fiscal years'' and inserted ``fiscal 
     year'' was inadvertently dropped.
     Senate amendment
       The Senate amendment contains the same drafting error.
     Conference agreement
       The conference agreement corrects a previous drafting error 
     by striking ``3 fiscal years'' and inserting ``fiscal year''.


                      10. Annual Report and Audits

     Present law
       States must prepare and submit to the Secretary every year 
     a report specifying how funds are used; presenting data on 
     the manner in which the child care needs of families in the 
     State are being fulfilled, including information on the 
     number of children served, child care programs in the State, 
     compensation provided to child care staff, and activities to 
     encourage public-private partnerships in child care; 
     describing the extent to which affordability and availability 
     of child care has increased; summarizing findings from a 
     review of State licensing and regulatory requirements, if 
     applicable; explaining any action taken by the State to 
     reduce standards, if applicable; and describing standards and 
     health and safety requirements applied to child care 
     providers in the State, including a description of efforts to 
     improve the quality of child care. (Sec. 658K of the CCDBG 
     Act)
     House bill
       The title of the section is changed from ``Annual Report 
     and Audits'' to ``Reports and Audits.'' States must collect 
     on a monthly basis, and report to HHS on a quarterly basis, 
     the following information on each family receiving 
     assistance:
       (1) family income;
       (2) county of residence;
       (3) the gender, race, age of children receiving benefits;
       (4) whether the family includes only one parent;
       (5) the sources of family income, including:
       (a) the amount obtained from employment, including self-
     employment;
       (b) cash assistance or other assistance under Part A;
       (c) housing assistance;
       (d) food stamps; and
       (e) other public assistance;
       (6) the number of months the family has received benefits;
       (7) the type of care in which the child was enrolled 
     (family day care, center, own home);
       (8) whether the provider was a relative;
       (9) the cost of care; and
       (10) the average hours per week of care.
       Twice each year, the State must submit the following 
     aggregate data to HHS:
       (1) the number of providers separately identified in accord 
     with each type of provider that received funding under this 
     subchapter;
       (2) the monthly cost of child care services and the portion 
     of such cost paid with assistance from this Act by type of 
     care;
       (3) the number of payments by the State in vouchers, 
     contracts, cash, and disregards from public benefit programs 
     by type of care;
       (4) the manner in which consumer education information was 
     provided and the number of parents who received it; and
       (5) total number (unduplicated) of children and families 
     served.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                      11. Report by the Secretary

     Present law
       The Secretary is required to prepare and submit an annual 
     report, summarizing and analyzing information provided by 
     States, to the House Education and Labor Committee and the 
     Senate Labor and Human Resources Committee. This report must 
     contain an assessment and, where appropriate, recommendations 
     to Congress regarding efforts that should be taken to improve 
     access of the public to quality and affordable child care. 
     (Sec. 658L of the CCDBG Act)
     House bill
       The Secretary must prepare and submit biennial reports, 
     rather than annual reports, with the first report due no 
     later than July 31, 1997; the reference to the House 
     Education and Labor Committee is replaced with the House 
     Economic and Educational Opportunities Committee.
     Senate amendment
       Same.
     Conference agreement
        The conference agreement follows the House bill and the 
     Senate amendment.


                             12. Allotments

     Present law
       The Secretary must reserve one-half of 1 percent of 
     appropriations for payment to Guam, American Samoa, the 
     Virgin Islands, the Northern Marianas, and the Trust 
     Territory of the Pacific Islands. The Secretary also must 
     reserve no more than 3 percent for payment to Indian tribes 
     and tribal organizations with approved applications. 
     Remaining funds are allocated to the States based on the 
     States' proportion of children under age 5 and the number of 
     children receiving free or reduced-price school lunches, as 
     well as the States' per capita income. Any portion of a 
     State's reallotment that the Secretary determines is not 
     needed by the State to carry out its plan for the allotment 
     period

[[Page H8936]]

     must be reallotted by the Secretary to the other States in 
     the same proportion as the original allotments. (Sec. 658O of 
     the CCDBG Act)
     House bill
       Set-asides for the Territories, Indian tribes, and tribal 
     organizations are maintained, except that the Trust Territory 
     of the Pacific Islands is deleted from the set-aside for 
     Territories. Indian tribes are provided with a 1 percent set-
     aside of all funds, both entitlement and appropriated, 
     authorized by this section each year. Under some 
     circumstances, and with approval from the Secretary, Indian 
     tribes are authorized to use a portion of their funds for 
     renovation and construction of child care facilities. Within 
     the overall block grant for social programs provided to the 
     territories, each territory is authorized to spend whatever 
     portion they choose of their capped amount on child care (for 
     additional details see item 79 of Title I). Allotments to 
     States were described in item 3 above.
     Senate amendment
       Same as the House bill except the Indian tribes are 
     provided with a 3-percent set-aside for child care.
     Conference agreement
       The conference agreement follows the House bill with a 
     modification. The Secretary shall reserve not less that 1 
     percent and not more than 2 percent of the total amount 
     appropriated (both mandatory and discretionary) in each 
     fiscal year for payments to Indian tribes and tribal 
     organizations.


                            13. Definitions

     Present law
       The following terms are defined: caregiver, child care 
     certificate, elementary school, eligible child, eligible 
     child care provider, family child care provider, Indian 
     tribe, lead agency, parent, secondary school, Secretary, 
     sliding fee scale, State, and tribal organization. (Sec. 658P 
     of the CCDBG Act)
     House bill
       Child care deposits are added as an allowable use of a 
     child care certificate. The definition of ``eligible child'' 
     is revised to one whose family income does not exceed 85 
     percent of the State median, instead of 75 percent. The 
     definition of ``relative child care provider'' is revised by 
     adding great grandchild and sibling (if the provider lives in 
     a separate residence) to the list of eligible relative 
     providers and the requirement that relatives providing care 
     be registered is struck. Relative providers are required to 
     comply with any applicable requirements governing child care 
     provided by a relative, rather than State requirements. The 
     definition for elementary and secondary school is eliminated. 
     The Trust Territory of the Pacific Islands is dropped from 
     the definition of ``State.'' Native Hawaiian Organization is 
     added to the definition of ``tribal organization.''
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


                              14. Repeals

     Present law
       No provision.
     House bill
       The proposal repeals the following programs: (1) Child 
     Development Associate (CDA) Scholarship Assistance; (2) State 
     Dependent Care Development Grants; (3) Programs of National 
     Significance under Title X of the Elementary and Secondary 
     Education Assistance Act of 1965 (child care related to 
     Cultural Partnerships for At-Risk Children and Youth, and 
     Urban and Rural Education Assistance); and (4) Native-
     Hawaiian Family-Based Education Centers.
       [Note.--Title I of the proposal also repeals child care 
     assistance provided under current law by Title IV-A of the 
     Social Security Act. This assistance is provided under three 
     programs known as AFDC Child Care, Transitional Child Care, 
     and At-Risk Child Care. Thus, the total number of child care 
     programs merged into the Child Care and Development Block 
     Grant is seven.]
     Senate amendment
       The Senate amendment does not repeal the following 
     programs: (1) Child Development Associate (CDA) Scholarship 
     Assistance; (2) State Dependent Care Development Grants; (3) 
     Programs of National Significance under Title X of the 
     Elementary and Secondary education Assistance Act of 1965; 
     and (4) Native Hawaiian Family-Based Education Centers.
     Conference agreement
       The conference agreement follows the Senate amendment.


                           15. Effective Date

     Present law
       No provision.
     House bill
       This title and the amendments made by this title take 
     effect on October 1, 1996; the authorization of 
     appropriations and entitlement authority under section 
     8103(a) take effect on the date of enactment.
     Senate amendment
       Same.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.

                  Title VII: Child Nutrition Programs

                 Subtitle A--National School Lunch Act


                    1. STATE DISBURSEMENT TO SCHOOLS

     Present law
       State Agency Authority. The provision of law requiring that 
     agreements between State education agencies and schools be 
     permanent may not be ``construed'' as limiting the ability of 
     State agencies to suspend or terminate agreements in 
     accordance with the Secretary's regulations. [Sec. 8 of the 
     NSLA]
       Technical Amendments. ``Child'' for purposes of the NSLA is 
     defined to include individuals, regardless of age, who are 
     (a) determined to have 1 or more disabilities and (b) 
     attending an institution for the purpose of participating in 
     a program for individuals with mental or physical 
     disabilities. [Sec. 8 of the NSLA]
     House bill
       State Agency Authority. Clarifies State education agencies' 
     authority to terminate or suspend agreements with schools 
     participating in school meal programs. [Sec. 3401]
       Technical Amendments. Makes a technical amendment placing 
     this definition of child in the section of the NSLA 
     containing other general definitions. [Sec. 3401]
       [Note.--Sec. 3401 also makes conforming amendments to 
     cross-references in sec. 8 of the NSLA.]
     Senate amendment
       State Agency Authority. Same provision. [Sec. 1201]
       Technical Amendments. Same provision with technical 
     differences. [Sec. 1201]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills regarding State Agency Authority and 
     adopts the Senate provision on Technical Amendments. [Sec. 
     701]


             2. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS

     Present law
       Lowfat Cheese Purchases. Each calendar year, the Secretary 
     is required to purchase specific amounts of lowfat cheese on 
     a bid basis. [Sec. 9(a)(2) of the NSLA]
       Food Waste Procedures. The Secretary is required to 
     establish administrative procedures designed to diminish food 
     waste in schools. [Sec. 9(a)(3) of the NSLA]
       Announcing Guidelines. Each school year, State education 
     agencies and schools are required to announce income 
     eligibility guidelines to be used for free and reduced price 
     lunches. [Sec. 9(b)(2) of the NSLA]
       Commodities. Schools in the school lunch program are 
     required to use, as far as practicable, commodities 
     designated by the Secretary as being in ``abundance.''
       The Secretary is authorized to prescribe terms and 
     conditions under which donated commodities will be used in 
     schools and other participating institutions. [Sec. 9(c) of 
     the NSLA]
       Nutrition Information/Requirements. By the first day of the 
     1996-1997 school year, the Secretary, State education 
     agencies, schools, and school food service authorities are 
     required, to the maximum extent practicable, to inform 
     students and parents of the nutrition content of school meals 
     and their consistency with the most recent Dietary Guidelines 
     for Americans. [Sec. 9(f)(1) of the NSLA]
       Unless a waiver is granted by a State education agency, 
     schools must serve meals that are consistent with the Dietary 
     Guidelines for Americans (using the weekly average nutrient 
     content of the meals) by the beginning of the 1996-1997 
     school year. [Sec. 9(f)(2) of the NSLA]
       Use of Resources. State education agencies may use 
     resources provided under the nutrition education and training 
     program for training aimed at improving the quality and 
     acceptance of school meals. [Sec. 9(h) of the NSLA]
     House bill
       Lowfat Cheese Purchases. Deletes the lowfat cheese purchase 
     requirement. [Sec. 3402(a)]
       Food Waste Procedures. Deletes the requirement for the 
     Secretary to establish procedures to diminish food waste. 
     [Sec. 3402(a)]
       Announcing Guidelines. Deletes the requirements to annually 
     announce income eligibility guidelines. [Sec. 3402(b)]
       Commodities. Deletes the requirement to use foods 
     designated as abundant.
       Deletes the authority for the Secretary to prescribe terms 
     and conditions for the use of commodities. [Sec. 3402(c)]
       Technical/Conforming Changes. Makes a technical/conforming 
     amendment consistent with the elimination of the requirement 
     to announce guidelines. Makes a technical/conforming 
     amendment to delete a provision dealing with discrimination 
     against and identification of children receiving free or 
     reduced price lunches found elsewhere in the law. [Sec. 
     3402(b) & (d)]
       Nutrition Information/Requirements. Deletes the requirement 
     to inform students and parents about the nutrition content of 
     meals and their consistency with the Dietary Guidelines. 
     [Sec. 3402(e)]
       Replaces the existing requirement to serve meals consistent 
     with the Dietary Guidelines. Unless a waiver is granted by a 
     State education agency, schools must serve meals that are 
     consistent with the Dietary Guidelines by the beginning of 
     the 1996-1997 school year. The meals must provide, on average 
     over each week, at least one-third of the National Academy of 
     Sciences' daily recommended dietary allowances (in the case 
     of

[[Page H8937]]

     lunches) or one-quarter of the allowances (in the case of 
     breakfasts). [Sec. 3402(e)]
       Use of Resources. Deletes the authority to use nutrition 
     education and training funding for improving school meals 
     (this authority is provided elsewhere in law). [Sec. 3402(f)]
     Senate amendment
       Lowfat Cheese Purchases. Same provision. [Sec. 1202(a) & 
     (c)]
       Food Waste Procedures. Same provision. [Sec. 1202(a)]
       Announcing Guidelines. No provision.
       Commodities. Same provisions. [Sec. 1202(b)]
       Technical/Conforming Changes. No provisions.
       Nutrition Information/Requirements. Same provision. [Sec. 
     1202(d)]
       Use of Resources. Same provision. [Sec. 1201(e)]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. With respect to Announcing Guidelines, 
     the conference agreement adopts the Senate provision. 
     [Sec.702]


               3. FREE AND REDUCED PRICE POLICY STATEMENT

     Present law
       No provision.
     House bill
       Provides that schools may not be required to submit free 
     and reduced price ``policy statements'' to State education 
     agencies unless there is a substantive change in the free and 
     reduced price policy of the school. Routine changes (e.g., 
     adjusting income eligibility standards) are not sufficient 
     cause for requiring a school to submit a policy statement. 
     [Sec. 3403]
     Senate amendment
       Same provisions with a technical difference clarifying that 
     school food authorities, rather than schools, are the 
     entities that may not be required to submit a policy 
     statement. [Sec. 1203]
     Conference agreement
       The conference agreement adopts the Senate provisions. 
     [Sec.703]


                         4. SPECIAL ASSISTANCE

     Present law
       ``Provision 2.'' Schools electing to serve all children 
     free meals for 3 successive years may be paid special 
     assistance payments for free and reduced price meals based on 
     the number of meals served free or at a reduced price in the 
     first year (``provision 2''). Schools electing this option as 
     of November 1994 may receive a 2-year extension from the 
     State if it determines that the income level of the school's 
     population has remained stable. Schools receiving a 2-year 
     extension may receive subsequent 5-year extensions (except 
     that the Secretary may require that applications be taken at 
     the beginning of any 5-year period). [Sec. 11(a)(1) of the 
     NSLA]
       Terms and Conditions. The terms and conditions governing 
     the operation of the school lunch program (set forth in other 
     sections of the NSLA, except for matching requirements) apply 
     to special assistance under the school lunch program, to the 
     extent they are not inconsistent with the express 
     requirements of the section governing special assistance. 
     [Sec. 11(d) of the NSLA]
       Monthly Reports. State education agencies must report each 
     month the average number of children receiving free and 
     reduced price lunches during the immediately preceding month. 
     [Sec. 11(e)(2) of the NSLA]
     House bill
       ``Provision 2.'' Allows all ``provision 2'' schools to 
     qualify for extensions. [Sec. 3404(a)]
       Terms and Conditions. Deletes ``terms and conditions'' 
     requirements. [Sec. 3404(b)]
       Monthly Reports. Removes the requirement for monthly 
     reports and replaces it with a provision to report this 
     information at the Secretary's request. [Sec. 3404(b)]
     Senate amendment
       ``Provision 2.'' Same provision. [Sec. 1204(a)]
       Terms and Conditions. Same provision. [Sec. 1204(b)]
       Monthly Reports. Same provision. [Sec. 1204(b)]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec.704]


              5. MISCELLANEOUS PROVISIONS AND DEFINITIONS

     Present law
       Accounts and Records. States, State education agencies, and 
     schools must make accounts and records available for 
     inspection and audit by the Secretary ``at all times.'' [Sec. 
     12(a) of the NSLA]
       Restrictions on Requirements. Neither the Secretary nor 
     States may impose any requirement with respect to teaching 
     personnel, curriculum, and instruction in any school when 
     carrying out the provisions of the NSLA. [Sec. 12(c) of the 
     NSLA]
       Definitions. ``State'' is defined to include the Trust 
     Territory of the Pacific Islands. [Sec. 12(d)(1) of the NSLA]
       ``Participation rate'' is defined as the number of lunches 
     served in the second prior fiscal year. [Sec. 12(d)(3) of the 
     NSLA]
       ``Assistance need rate'' is defined as a rate relative to 
     States' annual per capita income. [Sec. 12(d)(4) of the NSLA]
       The Secretary is permitted to adjust reimbursement rates 
     for Alaska, Hawaii, and outlying areas (including the Trust 
     Territory of the Pacific Islands). [Sec. 12(f) of the NSLA]
       Expedited Rulemaking. The Secretary is required to issue 
     proposed regulations on food-based menu systems prior to the 
     publication of final regulations for compliance with the 
     Dietary Guidelines for Americans and must hold public 
     meetings on the proposed regulations. Final regulations must 
     reflect public comments. [Sec. 12(k) of the NSLA]
       Waivers. The Secretary may waive any Federal requirements 
     if the requesting State or service provider demonstrates, to 
     the Secretary's satisfaction, that the waiver will not 
     increase the overall Federal cost of the program and, if it 
     does increase costs, they will be paid from non-Federal 
     funds.
       Waiver applications must describe ``management goals'' to 
     be achieved, a timetable for implementation, and the process 
     to be used for monitoring progress in implementing the waiver 
     (including cost implications).
       The Secretary must state in writing the expected outcome of 
     any approved waivers.
       The results of the Secretary's decision on any waiver must 
     be disseminated through ``normal means of communication.''
       Waivers may not exceed 3 years (unless extended by the 
     Secretary).
       Waivers may not be granted with respect to ``offer versus 
     serve'' rules.
       Service providers must annually submit reports describing 
     the use of their waivers and evaluating how the waiver 
     contributed to improved services. States must annually submit 
     a summary of providers' reports to the Secretary. The 
     Secretary must annually submit reports to Congress 
     summarizing the use of waivers and describing whether waivers 
     resulted in improved services, the impact of waivers on the 
     provision of nutritional meals, and how waivers reduced 
     paperwork. [Sec. 12(l) of the NSLA]
       Food and Nutrition Programs. The Secretary is required to 
     award grants to private nonprofit organizations or education 
     institutions for ``food and nutrition projects'' that are 
     fully integrated with elementary school curricula. Subject to 
     appropriations, the Secretary must make grants to each of 3 
     organizations or institutions in amounts between $100,000 and 
     $200,000 for each of fiscal years 1995 through 1998. [Sec. 
     12(m) of the NSLA]
       Simplified Administration of School Meal and Other 
     Nutrition Programs. No provisions in current law; therefore, 
     no citizenship or immigration status tests apply to programs 
     under the NSLA or CNA, or to commodity assistance programs.
     House bill
       Accounts and Records. Revises the requirement to make 
     accounts and records available at all times to a requirement 
     that they be available at ``any reasonable time.'' [Sec. 
     3405(a)]
       Restrictions on Requirements. Removes the prohibition on 
     States imposing personnel, curriculum, and instruction 
     requirements. [Sec. 3405(b)]
       Definitions. Replaces ``Trust Territory of the Pacific 
     Islands'' with ``Commonwealth of the Northern Mariana 
     Islands.''
       Deletes the out-of-date definition of participation rate.
       Deletes the out-of-date definition of assistance need rate.
       Replaces the reference to the Trust Territory of the 
     Pacific Islands with a reference to the ``Commonwealth of the 
     Northern Mariana Islands.'' [Sec. 3405(c) & (d)]
       Expedited Rulemaking. Deletes the noted out-of-date 
     requirements for regulations. [Sec. 3405(e)]
       Waivers. Adds a bar against the Secretary granting any 
     waiver that increases Federal costs.
       Deletes the noted waiver requirements in present law.
       Deletes the noted outcome requirement in present law.
       Deletes the noted dissemination requirement in present law.
       Deletes the noted time limit requirement in present law.
       Deletes the noted offer versus serve prohibition in present 
     law.
       Deletes requirements for waiver reports by service 
     providers and States, but not the Secretary's. [Sec. 3405(f)]
       Food and Nutrition Programs. Deletes authority for food and 
     nutrition project grants. [Sec. 3405(g)]
       Simplified Administration of School Meal and Other 
     Nutrition Programs. No provisions in the child nutrition 
     provisions of the bill. However, other provisions of the bill 
     would bar the eligibility of illegal aliens for programs 
     under the NSLA and the CNA.
     Senate amendment
       Accounts and Records. Same provision. [Sec. 1205(a)]
       Restrictions on Requirements. Same provision. [Sec. 
     1205(b)]
       Definitions. Same provisions. [Sec. 1205(c) & (d)]
       Expedited Rulemaking. Same provision. [Sec. 1205(e)]
       Waivers. Same provisions. [Sec. 1205(f)]
       Food and Nutrition Programs. No provision.
       Simplified Administration of School Meal and Other 
     Nutrition Programs. Notwithstanding any other provision of 
     law, no assistance or benefits provided under the NSLA or CNA 
     or commodity assistance programs may be contingent on 
     citizenship or immigration status. [Sec. 1205(g)]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec.

[[Page H8938]]

     705] The conference agreement also adopts the Senate 
     provision on Food and Nutrition Projects, and adopts the 
     House provision on Simplified Administration of School Meal 
     and Other Nutrition Programs with an amendment stating that 
     individuals who are ineligible for free public education 
     benefits under State or local law are also ineligible for 
     school meal benefits under the National School Lunch Act and 
     the Child Nutrition Act of 1966. The amendment also states 
     that ``nothing in this Act shall prohibit or require a State 
     to provide to an individual who is not a citizen qualified 
     alien, as defined elsewhere in the law, benefits ***'' under 
     programs other than school lunch and breakfast program under 
     the National School Lunch Act and the Child Nutrition Act of 
     1966, the Commodity Supplemental Food Program, TEFAP and the 
     food distribution program on Indian reservations.[Sec. 742 ]


              6. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN

     Present law
       Establishment of Program. The Secretary is authorized to 
     carry out a summer food service program to assist States to 
     initiate, maintain, and expand nonprofit food service 
     programs for children. [Sec. 13(a) of the NSLA]
       Service Institutions: Payments. Payments to summer food 
     service institutions may not exceed specific amounts set by 
     law and indexed for inflation. For the summer of 1996, these 
     rates are: $2.1675 for each lunch/supper, $1.2075 for each 
     breakfast, and 57 cents for each supplement (snack). Rates 
     are adjusted each January to reflect changes (for the 12 
     months ending the preceding November) in the food away from 
     home component of the CPI-U. Each adjustment is rounded to 
     the nearest quarter cent. [Sec. 13(b)(1) of the NSLA]
       Administration of Service Institutions. Payments to summer 
     camps and service institutions that primarily serve migrant 
     children may be made for up to 4 meals/supplements each day. 
     [Sec. 13(b)(2) of the NSLA]
       Reimbursements: National Youth Sports Program. Higher 
     education institutions operating under the National Youth 
     Sports Program (NYSP) may receive reimbursements for meals/
     supplements served in months other than May through 
     September, but for not more than 30 days for each child.
       NYSP children and institutions are eligible to participate 
     ``without application.''
       NYSP institutions receive reimbursements for breakfasts and 
     supplements equal to the ``severe need'' rate for school 
     breakfasts.
       Advance Program Payments. In general, 3 advance payments to 
     summer food service program service institutions are required 
     during any summer program. The second advance payment may not 
     be released to any service institution that has not certified 
     it has held training sessions for its own personnel and site 
     personnel. [Sec. 13(e)(1) of the NSLA]
       Food Requirements. The Secretary is required to provide 
     ``additional technical assistance'' to those service 
     institutions and private nonprofit organizations that are 
     having difficulty in maintaining compliance with nutritional 
     requirements.
       Service institutions' contracts with food service 
     management companies must require that bacteria levels 
     conform to the standards applied by the local health 
     authority. [Sec. 13(f) of the NSLA]
       Permitting ``Offer versus Serve''. The ``offer versus 
     serve'' option is not permitted in the summer food service 
     program.
       Food Service Management Companies. In accordance with the 
     Secretary's regulations, service institutions must make 
     positive efforts to use small and minority-owned businesses 
     as sources of supplies and services.
       States are required to establish a standard form of 
     contract for use by service institutions and food service 
     management companies. [Sec. 13(l) of the NSLA]
       Records. States and service institutions must make accounts 
     and records available for inspection and audit by the 
     Secretary ``at all times.'' [Sec. 13(m) of the NSLA]
       Removing Mandatory Notice to Institutions. States' plans 
     must include its plans and schedule for informing service 
     institutions of the availability of the summer food service 
     program. [Sec. 13(n) of the NSLA]
       Plan. State plans must include: (1) the State's method of 
     assessing need, (2) the State's best estimate of the number/
     character of service institutions/sites to be approved, and 
     children and meals to be served, as well as its estimating 
     methods, and (3) a schedule for providing technical 
     assistance and training to service institutions. [Sec. 13(n) 
     of the NSLA]
       Monitoring and Training. With the Secretary's assistance, 
     States must establish and implement an ongoing training and 
     technical assistance program for private nonprofit 
     organizations. [Sec. 13(q) of the NSLA]
       Expired Program. During fiscal years 1990 and 1991, the 
     Secretary and States must carry out a program to disseminate 
     information to private nonprofit organizations about the 
     amendments made by the Child Nutrition and WIC 
     Reauthorization Act of 1989. [Sec. 13(p) of the NSLA]
     House bill
       Establishment of Program. Removes the reference to the 
     Secretary's authority to carry out a program to assist States 
     to ``expand'' summer food services. [Sec. 3406(a)]
       [Note.--Sec. 3406(a) also makes technical amendments 
     deleting a reference to the Trust Territory of the Pacific 
     Islands and an unnecessary cross-reference in present law.]
       Service Institutions: Payments. Establishes new maximum 
     rates for summer food service institutions. They are: $1.82 
     for each lunch/supper, $1.13 for each breakfast, and 46 cents 
     for each supplement (snack). These new rates, adjusted for 
     inflation, first apply to the summer of 1997. They are 
     adjusted on January 1, 1997, and each January 1 thereafter, 
     to reflect changes (for the 12 months ending the preceding 
     November) in the food away from home component of the CPI-U. 
     Each adjustment is based on unrounded rates for the prior 12-
     month period, then rounded down to the nearest lower cent 
     increment. [Sec. 3406(b) & (n)]
       [Note.--Separate administrative cost reimbursement rates 
     are not changed.]
       Administration of Service Institutions. Limits payments to 
     summer camps and institutions serving migrant children to 3 
     meals, or 2 meals and a supplement, each day. [Sec. 3406(c)]
       Reimbursements: National Youth Sports Program. Deletes 
     authority for reimbursements to NYSP institutions for months 
     other than May through September.
       Requires that NYSP children be eligible on showing 
     residence in an area of poor economic conditions or on the 
     basis of an income eligibility statement.
       Requires that NYSP institutions receive reimbursements for 
     breakfasts and supplements equal to the regular free school 
     breakfast reimbursement rates.
       Advance Program Payments. Limits to nonschool providers the 
     prohibition on releasing the second advance payment without 
     having certified training has been held. [Sec. 3406(e)]
       Food Requirements. Deletes the requirement for additional 
     technical assistance in present law.
       Replaces the requirement that contracts require bacteria 
     levels to conform to standards applied by the local health 
     authority with a requirement that contracts be in conformance 
     with standards set by local health authorities. [Sec. 
     3406(f)]
       Permitting ``Offer versus Serve.'' Adds authority for 
     school food authorities participating as a summer food 
     service institution to permit children attending a site on 
     school premises operated directly by the school food 
     authority to refuse 1 item of a meal without affecting 
     reimbursement for the meal. [Sec. 3406(g)]
       Food Service Management Companies. Deletes requirement for 
     positive efforts to use small and minority-owned businesses 
     in present law.
       Deletes requirement for a standard form of contract in 
     present law. [Sec. 3406(h)]
       Records. Revises the requirement to make accounts and 
     records available at all times to a requirement that they be 
     available at ``any reasonable time.'' [Sec. 3406(i)]
       Removing Mandatory Notice to Institutions. Deletes the 
     requirement for a plan/schedule for informing service 
     institutions of the availability of the summer food service 
     program. [Sec. 3406(j)]
       Plan. Deletes State plan requirements for a method of 
     assessing need, estimates of service institutions/sites to be 
     approved and children and meals to be served, and a schedule 
     for providing technical assistance/training. [Sec. 3406(k)]
       Monitoring and Training. Deletes requirement for ongoing 
     training and technical assistance for private nonprofit 
     organizations. [Sec. 3406(l)]
       Expired Program. Deletes out-of-date requirement to 
     disseminate information. [Sec. 3406(m)]
     Senate amendment
       Establishment of Program. No provision.
       Service Institutions: Payments. No provisions.
       Administration of Service Institutions. No provision.
       Reimbursements: National Youth Sports Program. No 
     provision.
       Advance Program Payments. No provision.
       Food Requirements. No provision.
       Permitting ``Offer versus Serve.'' No provision
       Food Service Management Companies. No provision.
       Records. No provision.
       Removing Mandatory Notice to Institutions. No provision.
       Plan. No provision.
       Monitoring and Training. No provision.
       Expired Program. No provision.
     Conference agreement
       Establishment of Program. The conference agreement adopts 
     the House provision.
       Service Institutions: Payments. The conference agreement 
     adopts the House provisions with an amendment that sets the 
     reimbursement rate for lunches at $1.97.
       Administration of Service Institutions. The conference 
     agreement adopts the House provisions.
       Reimbursements: National Youth Sports Program. The 
     conference agreement adopts the House provisions with 
     amendments that: delete the provision of present law allowing 
     institutions to participate without application; require that 
     all reimbursements to NYSP institutions be at the regular 
     summer food service program rates; and delete special meal 
     standard and compatibility requirements for NYSP 
     institutions.
       Advance Program Payments. The conference agreement adopts 
     the House provisions.
       Food Requirements. The conference agreement adopts the 
     House provisions.
       Permitting ``Offer versus Serve.'' The conference agreement 
     adopts the House provisions with an amendment allowing school

[[Page H8939]]

     food authorities to permit the refusal of 1 or more items 
     under rules that the school uses for school meal programs.
       Food Service Management Companies. The conference agreement 
     adopts the Senate provisions.
       Records. The conference agreement adopts the House 
     provision.
       Removing Mandatory Notice to Institutions. The conference 
     agreement adopts the House provision.
       Plan. The conference agreement adopts the House provisions.
       Monitoring and Training. The conference agreement adopts 
     the House provision.
       Expired Program. The conference agreement adopts the House 
     provision. [Sec. 706]


                       7. Commodity Distribution

     Present law
       Cereal and Shortening in Commodity Donations. Cereal and 
     shortening and oil products must be included among products 
     donated to the school lunch program. [Sec. 14(b) of the NSLA]
       Impact Study and Purchasing Procedures. By May 1979, the 
     Secretary must report on the effect of changes in commodity 
     procurement established under 1977 amendments to the NSLA.
       The Secretary must establish procedures to ensure that 
     purchase contracts are not entered into unless the previous 
     history and current patterns of the contracting party (with 
     respect to compliance with meat inspection and other food 
     wholesomeness standards) are taken into account. [Sec. 14(d) 
     of the NSLA]
       Cash Compensation for Pilot Project Schools. The Secretary 
     must provide cash compensation to certain schools 
     participating in a ``cash/CLOC'' pilot project to make up for 
     losses sustained. Compensation is provided to schools 
     applying before the end of 1990. [Sec. 14(g) of the NSLA]
       State Advisory Council. State education agencies receiving 
     food assistance must establish an advisory council composed 
     of school representatives. The council advises the agency on 
     schools' needs relating to the manner of selecting and 
     distributing commodities. [Sec. 14(e) of the NSLA]
     House bill
       Cereal and Shortening in Commodity Donations. Deletes the 
     requirement to include cereal and shortening and oil products 
     in school lunch program donations. [Sec. 3407(a)]
       Impact Study and Purchasing Procedures. Deletes out-of-date 
     commodity procurement report requirement.
       Deletes requirement for purchase procedures that take into 
     account contractors' compliance with meat inspection/food 
     wholesomeness standards. [Sec. 3407(b)]
       Cash Compensation for Pilot Project Schools. Deletes an 
     out-of-date requirement for compensation to certain schools 
     in a pilot project. [Sec. 3407(c)]
       State Advisory Council. Deletes the requirement for State 
     commodity assistance advisory councils. [Sec. 3407(d)]
     Senate amendment
       Cereal and Shortening in Commodity Donations. Same 
     provision. [Sec. 1206(a)]
       Impact Study and Purchasing Procedures. No provisions.
       Cash Compensation for Pilot Project Schools. Same 
     provision. [Sec. 1206(c)]
       State Advisory Council. Provides that any State agency 
     receiving food assistance must establish an advisory council 
     (i.e., deletes the specific reference to State education 
     agencies in present law). [Sec. 1206(b)]
     Conference agreement
       Cereal and Shortening in Commodity Donations. The 
     conference agreement adopts the provision that is common to 
     both bills.
       Impact Study and Purchasing Procedures. The conference 
     agreement adopts the Senate provision.
       Cash Compensation for Pilot Project Schools. The conference 
     agreement adopts the provision that is common to both bills.
       State Advisory Council. The conference agreement adopts the 
     House provisions, with an amendment to replace the 
     requirement for a formal advisory council with a requirement 
     that State agencies to meet with local school food service 
     personnel when making decisions regarding commodities used in 
     meal programs. [Sec. 707]


                       8. child care food program

     Present law
       Establishment of Program. The Secretary is authorized to 
     carry out a program to assist States to initiate, maintain, 
     and expand nonprofit food service for children in child care 
     institutions. [Sec. 17(a) of the NSLA]
       Payments to Sponsor Employees. No provision.
       Technical Assistance. If necessary, States must provide 
     technical assistance to institutions submitting incomplete 
     applications to participate. [Sec. 17(d) of the NSLA]
       Reimbursement of Child Care Institutions. Day care centers 
     may be provided reimbursement for up to 2 meals and 2 
     supplements (or 3 meals and 1 supplement) each day for 
     children in a child care setting for 8 or more hours a day. 
     [Sec. 17(f)(2) of the NSLA]
       Improved Targeting of Day Care Home Reimbursements: 
     Restructured Day Care Home Reimbursements. Reimbursements for 
     family or group day care homes are specific amounts set by 
     law and indexed for inflation. All homes receive the same 
     reimbursements, and reimbursements are not differentiated by 
     family income of the child receiving a subsidized meal/
     supplement. For July 1996 through June 1997, these rates are: 
     $1.575 for each lunch/supper, 86.25 cents for each breakfast, 
     and 47 cents for each supplement.
       Rates are adjusted each July to reflect changes in the food 
     away from home component of the CPI-U for the most recent 12-
     month period for which data are available. Each adjustment is 
     rounded to the nearest quarter cent. [Sec. 17(f)(3)(A) of the 
     NSLA]
       Improved Targeting of Day Care Home Reimbursements: Grants 
     to States. No provision.
       Improved Targeting of Day Care Home Reimbursements: 
     Provision of Data. No provision.
       Reimbursement. The Secretary is required to reduce 
     administrative payments to day care home sponsors as of 
     August 1981 so as to achieve a 10 percent reduction in the 
     total level of payments. [Sec. 17(f)(3)(B) of the NSLA]
       Funds for administrative expenses may be used by day care 
     home sponsors to conduct outreach and recruitment to 
     unlicensed day care homes so that they may become licensed. 
     [Sec. 17(f)(3)(C) of the NSLA]
       States must provide monthly advance payments to approved 
     day care institutions in an amount that reflects the full 
     level of valid claims customarily received (or the State's 
     best estimate in the case of newly participating 
     institutions). [Sec. 17(f)(4)]
       Nutritional Requirements. Meals served under the child and 
     adult care food program must be ``served free to needy 
     children.''
       The Secretary is required to provide ``additional technical 
     assistance'' to institutions and day care home sponsors that 
     are having difficulty maintaining compliance with nutrition 
     requirements. [Sec. 17(g)(1) of the NSLA]
       Elimination of State Paperwork/Outreach Burden. States must 
     take affirmative action to expand availability of the child 
     and adult care food program benefits, including annual 
     notification of all nonparticipating day care home providers. 
     The Secretary must conduct demonstration projects to test 
     approaches to removing or reducing barriers to participation 
     by homes that operate in low-income areas or primarily serve 
     low-income children. The Secretary and States must provide 
     training and technical assistance to assist day care home 
     sponsors in reaching low-income children. The Secretary must 
     instruct States to provide information and training about 
     child health and development through day care home sponsors. 
     [Sec. 17(k) of the NSLA]
       Records. States and institutions must make accounts and 
     records available for inspection and audit by the Secretary 
     and others ``at all times.'' [Sec. 17(m) of the NSLA]
       Modification of Adult Care Food Program. Nonresidential 
     adult day care centers (including group living arrangements) 
     serving chronically impaired disabled adults or persons 60 
     years of age or older are eligible institutions under the 
     child and adult care food program. Reimbursements are 
     provided for meals served to chronically disabled adults and 
     those 60 or older in these centers. [Sec. 17(o) of the NSLA]
       Unneeded Provision. The Secretary is required to provide 
     State child and adult care food service agencies with basic 
     information about the WIC program. State agencies must 
     provide child care institutions with specific materials about 
     the WIC program, annually update the materials, and ensure 
     that at least once a year the institutions provide specific 
     written information to parents about the WIC program. [Sec. 
     17(q) of the NSLA]
       Effective Date. No provision.
       Study. No provision.
     House bill
       Establishment of Program. Removes the reference to the 
     Secretary's authority to carry out a program to assist States 
     to ``expand'' child care food services. [Sec. 3408(a)]
       Payments to Sponsor Employees. Prohibits payments to day 
     care home sponsors that base payments to employees on the 
     number of homes recruited. [Sec. 3408 (b)]
       Technical Assistance. Deletes the requirement to provide 
     technical assistance in cases of incomplete applications. 
     [Sec. 3408(c)]
       Reimbursement of Child Care Institutions. Removes authority 
     for reimbursement for more than 2 meals and 1 supplement for 
     children in care for 8 or more hours. [Sec. 3408(d)]
       Improved Targeting of Day Care Home Reimbursements: 
     Restructured Day Care Home Reimbursements. Establishes new 
     reimbursement rates for day care homes as follows:
       ``Tier I'' homes receive the meal/supplement rates in 
     effect on July 1, 1996 (see present law), adjusted annually 
     for inflation.
       ``Tier I'' homes are (1) those located in areas, defined by 
     the Secretary based on Census data, in which at least 50 
     percent of children are in households with income below 185 
     percent of the Federal poverty guidelines, (2) those located 
     in an area served by a school enrolling elementary students 
     in which at least 50 percent of the children are certified 
     eligible to receive free or reduced price school meals, or 
     (3) those operated by a provider whose household income is 
     verified by a sponsor (under the Secretary's regulations) to 
     be below 185 percent of the poverty guidelines.
       ``Tier II'' homes are homes that do not meet tier I 
     standards, but they may, at their option, receive the 
     substantially higher tier I reimbursement rates under certain 
     conditions (see below).
       In general, tier II home rates are 90 cents for each lunch/
     supper, 25 cents for each

[[Page H8940]]

     breakfast, and 10 cents for each supplement, adjusted 
     annually for inflation. Tier II homes can elect to receive 
     higher tier I rates for meals/supplements served to children 
     who are members of households with income below 185 percent 
     of the Federal poverty guidelines, if the sponsor collects 
     the necessary income information and makes the appropriate 
     eligibility determinations in accordance with the Secretary's 
     rules. Tier II homes also can elect to receive tier I rates 
     for meals/supplements served to children (or children whose 
     parents are) 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 185 percent 
     of the poverty guidelines, and may restrict their claim for 
     tier I reimbursements to these children if they choose not to 
     collect income statements from all parents/caretakers.
       The Secretary is required to prescribe simplified meal 
     counting and reporting procedures for use by tier II homes 
     (and their sponsors) that elect to claim tier I 
     reimbursements for children meeting the income or program 
     participation requirements. These procedures can include (1) 
     setting an annual percentage of meals/supplements to be 
     reimbursed at tier I rates based on the family income of 
     children enrolled in a specific month or other period, (2) 
     placing a home in a reimbursement category based on the 
     percentage of children with household income below 185 
     percent of the poverty guidelines, or (3) other procedures 
     determined by the Secretary.
       The Secretary is authorized to establish minimum 
     requirements for verifying income and program participation 
     for tier II homes electing to claim tier I reimbursement 
     rates.
       Inflation indexing of rates for day care homes also is 
     revised. The rates set for tier I homes (see present law) and 
     the new tier II rates are adjusted July 1, 1997, and each 
     July thereafter, based on the unrounded rates for the 
     previous 12-month period, then rounded down to nearest lower 
     cent increment. Inflation adjustments are based on changes in 
     the food at home component of the CPI-U for the most recent 
     12-month period for which data are available. [Sec. 
     3408(e)(1)]
       Improved Targeting of Day Care Home Reimbursements: Grants 
     to States. Provides grants to States to assist family or 
     group day care homes and their sponsors in implementing the 
     new reimbursement rate system. For fiscal year 1997, the 
     Secretary is required to reserve for this purpose $5 million 
     of the amounts made available for the child care food program 
     and allocate it to States based on the number of homes 
     participating in fiscal year 1995 (with a minimum of $30,000 
     for each State). [Sec. 3408(e)(2)]
       Improved Targeting of Day Care Home Reimbursements: 
     Provision of Data. Requires that the Secretary provide Census 
     data necessary for determining homes' tier I/II status and 
     that States provide school enrollment data necessary to 
     determine tier I/II status. In determining homes' tier I/II 
     status, the most current available data (Census, enrollment, 
     income) must be used. In general, a determination that a home 
     is located in a tier I area is effective for 3 years. [Sec. 
     3408(e)(3)]
       Reimbursement. Deletes the out-of-date requirement to 
     reduce administrative payments to sponsors.
       Deletes the authority to use administrative expense funding 
     for outreach and recruitment.
       Makes the provision of advance payments a State option. 
     [Sec. 3408(f)]
       Nutritional Requirements. Deletes a redundant provision 
     requiring that free meals be served to needy children (this 
     requirement is found elsewhere in law).
       Deletes the requirement to provide additional technical 
     assistance. [Sec. 3408(g)]
       Elimination of State Paperwork/Outreach Burden. Removes the 
     noted requirements in present law and replaces them with a 
     requirement that States provide sufficient training, 
     technical assistance, and monitoring to facilitate effective 
     operation of the child care food program. Requires the 
     Secretary to assist States in developing plans to do so. 
     [Sec. 3408(h)]
       Records. Revises the requirement to make accounts and 
     records available at all times to a requirement that they be 
     available at ``any reasonable time.'' [Sec. 3408(i)]
       Modification of Adult Care Food Program. Deletes authority 
     for reimbursements for meals to those in adult day care 
     centers who are not chronically impaired disabled persons. 
     Deletes authority for any reimbursements to adult day care 
     centers that do not serve chronically impaired disabled 
     persons. [Sec. 3408(j)]
       [Note.--Section 3408(a) & (l) make conforming amendments.]
       Unneeded Provision. Deletes requirements to provide WIC 
     information through the child care food program. [Sec. 
     3408(k)]
       Effective Date. Establishes effective dates for changes 
     affecting the child care food program. In general, they are 
     effective on enactment, but amendments restructuring day care 
     home reimbursement rates are effective July 1, 1997.
       Requires the Secretary to issue interim regulations related 
     to restructuring day care home reimbursement rates, provision 
     of data to implement the restructured rates, and changes to 
     sponsors' use of administrative funds by January 1, 1997. 
     Final regulations on these changes must be issued by July 1, 
     1997. [Sec. 3408(m)]
       Study. Requires the Secretaries of Agriculture and Health 
     and Human Services to undertake a study of the effects of 
     amendments restructuring day care home reimbursements, due 2 
     years after enactment. Requires State agencies to provide 
     certain data to support the study. [Sec. 3408(n)]
     Senate amendment
       Establishment of Program. Same provisions. [Sec. 1207(a)]
       Payments to Sponsor Employees. Same provision. [Sec. 
     1207(b)]
       Technical Assistance. Same provision. [Sec. 1207(c)]
       Reimbursement of Child Care Institutions. Same provision. 
     [Sec. 1207(d)]
       Improved Targeting of Day Care Home Reimbursements: 
     Restructured Day Care Home Reimbursements. Same provisions, 
     except that the new rates for tier II homes are $1 for 
     lunches/suppers, 30 cents for breakfasts, and 15 cents for 
     supplements. [Sec. 1207(e)(1)]
       The conferees understand that the Secretary has 
     historically provided different family and group day care 
     home payments in Alaska and Hawaii. The conferees expect that 
     the tier I and tier II reimbursements provided for in this 
     measure also will be varied for Alaska and Hawaii.
       Improved Targeting of Day Care Home Reimbursements: 
     Provision of Data. Same provisions. [Sec. 1207(e)(3)]
       Reimbursement. Same provisions, except replaces the 
     existing permission to use funds for outreach/recruitment 
     with permission to use funds to assist unlicensed homes in 
     becoming licensed. [Sec. 1207(f)]
       Nutritional Requirements. Same provisions. [Sec. 1207(g)]
       Elimination of State Paperwork/Outreach Burden. Same 
     provisions. [Sec. 1207(h)]
       Records. Same provision. [Sec. 1207(i)]
       Modification of Adult Care Food Program. No provision.
       Unneeded Provision. Replaces the existing requirement for 
     providing WIC information with a requirement that State 
     agencies ensure that, at least once a year, child care 
     institutions provide written information to parents that 
     includes basic WIC information. [Sec. 1207(j)]
       Effective Date. Same provisions. [Sec. 1207(k)]
       Study. Same provisions. [Sec. 1207(l)]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. With respect to the provisions in 
     disagreement:
       Improved Targeting of Day Care Home Reimbursements: 
     Restructured Day Care Home Reimbursements. The conference 
     agreement adopts the House provisions with an amendment 
     setting the reimbursement rate at 95 cents for lunches/
     suppers, 27 cents for breakfasts, and 13 cents for 
     supplements.
       Reimbursement. The conference agreement adopts the Senate 
     provisions.
       Modification of Adult Care Food Program. The conference 
     agreement adopts the Senate provision.
       Unneeded Provision. The conference agreement adopts the 
     House provision. [Sec. 708]


                           9. PILOT PROJECTS

     Present law
       ``Universal free lunch'' pilots, similar to ``provision 2'' 
     authority found elsewhere in law, are required. [Sec. 18(d) 
     of the NSLA]
       A demonstration project for grants to provide meals and 
     supplements to adolescents in programs outside school hours 
     is required; assistance is in accordance with that provided 
     under the child and adult care food program. For each of 
     fiscal years 1996 and 1997, the Secretary must expend 
     $475,000 ($525,000 in 1998), unless there is an insufficient 
     number of suitable applicants. [Sec. 18(e) of the NSLA]
       Pilot projects are authorized to evaluate the effects of 
     contracting with private organizations to act as a State 
     agency in cases where the Secretary is administering a child 
     nutrition program in place of a State. [Sec. 18(a) of the 
     NSLA]
       A pilot project is authorized to assist schools in offering 
     students additional choices of fruits, vegetables, legumes, 
     cereals, and grain-based products (including organically 
     produced commodities). [Sec. 18(g) of the NSLA]
       A pilot project is authorized to assist schools in offering 
     students additional choices of dairy products, lean meat, and 
     poultry products (including organically produced 
     commodities). [Sec. 18(h) of the NSLA]
       Pilots are authorized to reduce paperwork, application, and 
     meal counting requirements, and make program changes that 
     will increase school meal program participation--while 
     receiving Federal payments equal to the prior year adjusted 
     for inflation/enrollment. [Sec. 18(i) of the NSLA]
     House bill
       Deletes separate authority for the ``universal free lunch'' 
     projects, which are similar to ``provision 2'' authority 
     found elsewhere in the law. [Sec. 3409(a)]
       Makes the pilot demonstration project for grants to provide 
     meals and supplements to adolescents in programs outside 
     school hours optional and authorizes ``such sums as are 
     necessary'' for fiscal years 1997 and 1998. [Sec. 3409(b)]
       Deletes authority for the pilot projects to: evaluate 
     effects of contracting with private organizations; assist 
     schools in offering students additional choices of fruits, 
     vegetables, legumes, cereals and grain-based products, dairy 
     products, lean meat and poultry products (including 
     organically produced commodities); reduce paperwork, 
     application and meal counting requirements and make program 
     changes to increase school meal program participation. [Sec. 
     3409(c)]

[[Page H8941]]

     Senate amendment
       The Senate amendment contains the same provisions that 
     delete authority for the ``universal free lunch'' projects 
     and make the pilot demonstration project for grants to 
     provide meals and supplements to adolescents in programs 
     outside school hours optional (authorizing ``such sums as are 
     necessary'' for fiscal 1997 and 1998). [Sec. 1208(a), (b)] 
     The Senate amendment does not contain the House provisions 
     that delete authority for the pilot projects to: evaluate 
     effects of contracting with private organizations; assist 
     schools in offering students additional choices of fruits, 
     vegetables, legumes, cereals and grain-based products, dairy 
     products, lean meat and poultry products (including 
     organically produced commodities); reduce paperwork, 
     application and meal counting requirements and make program 
     changes to increase school meal program participation.
     Conference agreement
       The conference agreement adopts the provisions. [Sec. 709]


                       10. REDUCTION OF PAPERWORK

     Present law
       In carrying out the NSLA and the CNA, the Secretary is 
     required to reduce paperwork required of State and local 
     agencies and others (e.g., parents) to the maximum extent 
     practicable. In carrying out this requirement, the Secretary 
     is required to consult with State/local administrators and 
     convene a meeting of these administrators (not later than 
     September 1990), and obtain suggestions from members of the 
     public on reducing paperwork. By November 1990, the Secretary 
     is required to report to Congress concerning the extent to 
     which reduction in paperwork has occurred. [Sec. 19 of the 
     NSLA]
     House bill
       Deletes out-of-date paperwork reduction requirements. [Sec. 
     3410]
     Senate amendment
       Same provision. [Sec. 1209]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 710]


                 11. INFORMATION ON INCOME ELIGIBILITY

     Present law
       The Secretary is required to provide State agencies with 
     information needed to determine income eligibility for free 
     or reduced price meal. It must be provided by May 1990. Not 
     later than July 1990, the Secretary must review model 
     application forms under the NSLA and the CNA and simplify the 
     format/instructions for these forms. [Sec. 23 of the NSLA]
     House bill
       Deletes out-of-date income verification and application 
     form requirements. [Sec. 3411]
     Senate amendment
       Same provision. [Sec. 1210]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 711]


          12. NUTRITION GUIDANCE FOR CHILD NUTRITION PROGRAMS

     Present law
       By November 1991, the Secretary and the Secretary of Health 
     and Human Services are required to develop a ``nutrition 
     guidance'' publication. They must distribute it within 6 
     months. The Secretary must revise menu planning guides to 
     include recommendations for implementing the nutrition 
     guidance in the publication. In carrying out any school meal 
     program, summer program, or child care food program, school 
     food authorities must apply the published nutrition guidance, 
     and the Secretary must ensure that meals and supplements are 
     consistent with the nutrition guidance. The Secretary and the 
     Secretary of Health and Human Services may jointly update the 
     guidance publication. [Sec. 24 of the NSLA]
     House bill
       Deletes the noted provisions of present law dealing with 
     development and implementation of a nutrition guidance. [Sec. 
     3412]
     Senate amendment
       Same provision. [Sec. 1211]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 712]


                     13. INFORMATION CLEARINGHOUSE

     Present law
       The Secretary is required to enter into a contract with a 
     nongovernmental organization to establish and maintain a 
     clearinghouse for information for nongovernmental groups on 
     food assistance and self-help initiatives. The clearinghouse 
     is required to be funded at $200,000 in fiscal year 1996, 
     $150,000 in 1997, and $100,000 in 1998. [Sec. 26 of the NSLA]
     House bill
       Deletes the requirement for funding of a nutrition 
     information clearinghouse. [Sec. 3413]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provision.

                SUBTITLE B--CHILD NUTRITION ACT OF 1966


                        14. SPECIAL MILK PROGRAM

     Present law
       ``United States'' is defined to include the Trust Territory 
     of the Pacific Islands. [Sec. 3(a)(3) of the CNA]
     House bill
       Replaces Trust Territory of the Pacific Islands with 
     ``Commonwealth of the Northern Mariana Islands.'' [Sec. 3421]
     Senate amendment
       Same provision. [Sec. 1251]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec 721]


              15. FREE AND REDUCED PRICE POLICY STATEMENT

     Present law
       No provision.
     House bill
       Provides that schools may not be required to submit a free 
     and reduced price ``policy statement'' to State education 
     agencies unless there is a substantive change in the free and 
     reduced price policy of the school. Routine changes (e.g., 
     adjusting income eligibility standards) are not sufficient 
     cause for requiring a school to submit a policy statement. 
     [Sec. 3422]
     Senate amendment
       Similar provisions with a technical amendment clarifying 
     that school food authorities, rather than schools, are the 
     entities that may be required to submit a policy statement. 
     [Sec. 1252]
     Conference agreement
       The conference agreement adopts the Senate provision. [Sec. 
     722]


               16. SCHOOL BREAKFAST PROGRAM AUTHORIZATION

     Present law
       Training and Technical Assistance. Through State education 
     agencies, the Secretary must provide technical assistance and 
     training to school breakfast program schools to assist them 
     in complying with nutrition requirements and providing 
     appropriate meals to children with medically certified 
     special dietary needs. The Secretary also must provide 
     additional technical assistance to schools that are having 
     difficulty maintaining compliance with nutrition 
     requirements. [Sec. 4(e)(1) of the CNA]
       Startup and Expansion. The Secretary and State education 
     agencies are directed to carry out information, promotion, 
     and outreach programs to further the policy of expanding the 
     school breakfast program to all schools where it is needed, 
     including the use of ``language appropriate'' materials. The 
     Secretary is to report to Congress no later than October 1, 
     1993, concerning efforts to increase school participation. 
     [Sec. 4(f) of the CNA]
       The Secretary is required to use $5 million a year (through 
     fiscal year 1997), $6 million in 1998, and $7 million in each 
     subsequent year to fund a program of competitively bid grants 
     to State education agencies for the purpose of initiating or 
     expanding the school breakfast and summer food service 
     programs. [Sec. 4(g) of the CNA]
     House bill
       Training and Technical Assistance. Deletes technical 
     assistance and training requirements. [Sec. 3423(a)]
       Startup and Expansion. Effective October 1, 1996, deletes 
     the requirement for information, promotion, and outreach 
     grants to expand the school breakfast program. [Sec. 3423(b)]
     Senate amendment
       Training and Technical Assistance. Deletes the requirement 
     to provide additional technical assistance. [Sec. 1253(a)]
       Startup and Expansion. Same provision. [Sec. 1253(b)]
     Conference agreement
       The conference agreement adopts the startup and expansion 
     provisions that are common to both bills and adopts the 
     Senate provision regarding Training and Technical Assistance. 
     [Sec. 723]


                   17. state administrative expenses

     Present law
       Commodity Distribution Administration. States are permitted 
     to use a portion of the funds available for State 
     administrative expenses to assist in administering the 
     commodity distribution program. [Sec. 7(e) of the CNA]
       Studies. The Secretary may not provide State administrative 
     expense funding to a State unless the State agrees to 
     participate in any study or survey of NSLA or CNA programs 
     conducted by the Secretary. [Sec. 7(h) of the CNA]
       Approval of Changes. States must annually submit a plan for 
     the use of State administrative expense funds. [Sec. 7(f) of 
     the CNA]
     House bill
       Commodity Distribution Administration. Deletes specific 
     authority to use State administrative expense money for 
     commodity distribution administration (this authority is 
     found elsewhere in law). [Sec. 3424(a)]
       Studies. Deletes the provision barring State administrative 
     expense funding when a State fails to agree to participate in 
     a study or survey. [Sec. 3424(a)]
       Approval of Changes. Removes the requirement for annual 
     plans for State administrative expense funds and replaces it 
     with a requirement to submit any substantive plan

[[Page H8942]]

     changes for the Secretary's approval. [Sec. 3424(b)]
     Senate amendment
       Commodity Distribution Administration. Same provision. 
     [Sec. 1254(a)]
       Studies. Same provision. [Sec. 1254(a)]
       Approval of Changes. Same provisions. [Sec. 1254(b)]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 724]
       The conference agreement repeals Section 7(e) of the Child 
     Nutrition Act so as to simplify the language in, and 
     eliminate redundant provisions of, the Act. The managers note 
     that no provisions of the Child Nutrition Act prohibit States 
     from using State administrative expense (SAE) funds to 
     administer the Commodity Distribution Program, which is 
     authorized through the National School Lunch Act, and stress 
     that the repeal of Section 7(e) should not be construed as 
     barring or discouraging States from using SAE funds for this 
     purpose.


                            18. regulations

     Present law
       The Secretary is required to develop, and provide to State 
     agencies for distribution to schools, model language that 
     bans the sale of competitive foods of minimal nutritional 
     value, along with a copy of the regulations concerning 
     competitive foods. [Sec. 10(b) of the CNA]
     House bill
       Deletes the out-of-date requirement for model language on 
     competitive foods. [Sec. 3425]
     Senate amendment
       Same provision. [Sec. 1255]
     Conference agreement
       The conference agreement adopts provisions common to both 
     bills. [Sec. 725]


                            19. prohibitions

     Present law
       Neither the Secretary nor the States may impose any 
     requirement with respect to teaching personnel, curriculum, 
     or instruction in any school when carrying out the provisions 
     of the special milk and school breakfast programs. [Sec. 
     11(a) of the CNA]
     House bill
       Removes the prohibition on States imposing personnel, 
     curriculum, and instruction requirements. [Sec. 3426]
     Senate amendment
       Same provision. [Sec. 1256]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 726]


              20. miscellaneous provisions and definitions

     Present law
       ``State'' is defined to include the Trust Territory of the 
     Pacific Islands. [Sec. 15(1) of the CNA]
       ``School'' is defined to include nonprofit child care 
     centers in Puerto Rico. [Sec. 15(3) of the CNA]
     House bill
       Replaces the reference to the Trust Territory of the 
     Pacific Islands with a reference to the Commonwealth of the 
     Northern Mariana Islands. [Sec. 3427]
       Makes a conforming amendment deleting the inclusion of 
     nonprofit child care centers as schools in Puerto Rico. [Sec. 
     3427]
     Senate amendment
       Same provisions. [Sec. 1257]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 727]


                        21. accounts and records

     Present law
       States, State education agencies, schools, and nonprofit 
     institutions must make accounts and records available for 
     inspection by the Secretary ``at all times.'' [Sec. 16(a) of 
     the CNA]
     House bill
       Revises the requirement to make accounts and records 
     available at all times to a requirement that they be 
     available at ``any reasonable time.'' [Sec. 3428]
     Senate amendment
       Same provision. [Sec. 1258]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 728]


  22. special supplemental nutrition program for women, infants, and 
                                children

     Present law
       Definitions. ``Homeless individual'' is defined to include 
     an individual whose primary nighttime residence is a 
     temporary accommodation in the residence of another. [Sec. 
     17(b)(15) of the CNA]
       Secretary's Promotion of WIC. The Secretary must 
     ``promote'' the WIC program by producing and distributing 
     materials, including public service announcements in English 
     and other appropriate languages. [Sec. 17(c)(5) of the CNA]
       Eligible Participants. The Secretary must report biennially 
     to Congress and the National Advisory Council on Maternal, 
     Infant, and Fetal Nutrition on the income and nutritional 
     risk characteristics of WIC participants, participation by 
     migrants, and other appropriate matters. [Sec. 17(d)(4) of 
     the CNA]
       Nutrition and Drug Abuse Education. State agencies must 
     ensure that drug abuse education is provided to all pregnant, 
     postpartum, and breastfeeding WIC participants, and to 
     parents/caretakers of WIC children.
       Nutrition education and breastfeeding promotion and support 
     must be evaluated annually by State agencies.
       State agencies must ensure that written information about 
     food stamps, AFDC, and the child support enforcement program 
     is provided to WIC applicants and participants.
       Each local WIC agency may use a master file to document and 
     monitor the provision of nutrition education to individuals 
     that are required to be included in group nutrition education 
     classes.
       State agencies must ensure that local agencies maintain and 
     make available a list of local resources for substance abuse 
     counseling and treatment. [Sec. 17(e) of the CNA]
       State Plan. State agencies must annually submit a State 
     plan for WIC operations and administration.
       State agency WIC plans must include a plan to coordinate 
     operations with special counseling services such as the 
     expanded food and nutrition education program, immunization 
     programs, local breastfeeding promotion programs, prenatal 
     care, well-child care, family planning, drug abuse education, 
     substance abuse counseling and treatment, child abuse 
     counseling, AFDC, food stamps, maternal and child health 
     care, and Medicaid (including Medicaid programs that use 
     ``coordinated care providers'').
       State agency WIC plans must include a plan to provide 
     benefits to unserved and underserved areas in the State if 
     sufficient funds are available.
       State agency WIC plans must include a plan to provide 
     benefits to those most in need and to provide eligible 
     individuals not participating with program information, with 
     an emphasis on reaching and enrolling eligible women in the 
     early months of pregnancy and including provisions to reach 
     and enroll eligible migrants.
       State agency WIC plans must include a specific plan for 
     provision of WIC benefits to incarcerated persons if they opt 
     to provide benefits to these persons.
       State agency WIC plans must include a plan to improve 
     access to participants and applicants who are employed or 
     reside in rural areas by addressing their needs through 
     procedures/practices that minimize the time they must spend 
     away from work and the distances they must travel.
       State agency WIC plans must include an estimate of the 
     increased participation that will result from cost-saving 
     initiatives (including an explanation of how the estimate was 
     developed) if the State chooses to request ``funds conversion 
     authority'' (using food money for administration).
       State agency WIC plans must include other information ``as 
     the Secretary may require.''
       State agencies must establish procedures under which 
     members of the general public are provided an opportunity to 
     comment on the development of the State plan.
       State agencies must, on receiving a completed local agency 
     application, notify the applicant in writing within 30 days 
     of the approval or disapproval of the application 
     (accompanied by a statement of reasons for any disapproval). 
     Within 15 days of receiving an incomplete application, the 
     State agency must notify the applicant of added information 
     need to complete the application.
       State agencies must, in cooperation with local WIC 
     agencies, publicly announce and distribute information at 
     least annually on the availability of WIC benefits to offices 
     and organizations that deal with significant numbers of 
     potentially eligible individuals. The information must be 
     distributed in a manner designed to provide it to those most 
     in need of benefits, including pregnant women in the early 
     months of pregnancy. Local agencies with cooperative 
     arrangements with hospitals must advise potentially eligible 
     persons of the availability of benefits and provide them with 
     the opportunity to be certified as eligible in the hospital.
       State agency plans for fiscal year 1994 must advise the 
     Secretary of procedures for reducing the purchase of low-iron 
     infant formula.
       State and local WIC agencies must make accounts and records 
     available for inspection and audit by the Secretary ``at all 
     times.''
       Notices issued to WIC participants who are suspended or 
     terminated during their certification period because of a 
     shortage of funds must include the categories of participants 
     whose benefits are being suspended or terminated (in addition 
     to other information required by the Secretary).
       The Secretary must establish standards for proper, 
     efficient, and effective administration, including standards 
     that will ensure sufficient State agency staff.
       Products specifically designed for pregnant, postpartum, 
     and breastfeeding women, or infants, are to be made available 
     at the Secretary's discretion if they are commercially 
     available or are approved by the Secretary based on clinical 
     tests.
       State agencies must (a) provide nutrition education, 
     breastfeeding promotion, and drug abuse education in 
     languages other than English and (b) use appropriate foreign 
     language materials in areas where a substantial number of 
     low-income households speak a language other than English.
       State agencies may adopt methods of delivering benefits to 
     accommodate the special

[[Page H8943]]

     needs and problems of incarcerated individuals.
       Local agencies must provide information about other 
     potential sources of food assistance to WIC applicants who 
     apply but cannot be served. [Sec. 17(f) of the CNA]
       Information. On completion of the 1990 Census, the 
     Secretary must make available an estimate (by State and 
     county) of the number of women, infants, and children who are 
     members of families with incomes below 185 percent of the 
     Federal poverty guidelines. [Sec. 17(g)(6) of the CNA]
       Procurement of Infant Formula. The Secretary must require 
     State agencies to report breastfeeding data for the biennial 
     report by the Secretary on participant characteristics.
       No State may receive a WIC allocation unless it meets 
     certain conditions related to cost containment prior to 
     September 1989.
       States having cost-containment contracts in effect in 1989 
     need not meet new cost containment provisions until the term 
     of the contract runs out.
       The Secretary is required to establish pilot projects to 
     determine the feasibility of using ``universal product 
     codes'' to aid vendors in providing the correct infant 
     formula to WIC participants.
       The Secretary must follow certain specific rules in 
     soliciting cost containment bids for infant formula on behalf 
     of States.
       The Secretary must promote the joint purchase of infant 
     formula by States, encourage the purchase of supplemental 
     foods other than infant formula under cost containment 
     procedures, inform States of the benefits of cost 
     containment, and provide technical assistance related to cost 
     containment.
       The Secretary must use $10 million a year (from carryover 
     funds) for infrastructure development, special projects of 
     regional or national significance, and special breastfeeding 
     support and promotion projects. [Sec. 17(h) of the CNA]
       National Advisory Council. The Secretary designates the 
     Chairman and Vice-Chairman of the National Advisory Council 
     on Maternal, Infant, and Fetal Nutrition. [Sec. 17(k) of the 
     CNA]
       Completed Study; Community College Demonstration; Grants 
     for Information and Data Systems. The Secretary must, by May 
     1989, conduct a study on appropriate methods of drug abuse 
     education instruction. The Secretary must prepare and 
     distribute drug abuse education materials. Specific 
     appropriations for the study and materials are authorized for 
     fiscal year 1989, and, for later years, ``such sums as may be 
     necessary'' are authorized for distributing drug abuse 
     education materials and making referrals under drug abuse 
     education programs. [Sec. 17(n) of the CNA]
       The Secretary is authorized to conduct a pilot project for 
     WIC clinics in community colleges offering nursing education 
     programs. [Sec. 17(o) of the CNA]
       The Secretary is authorized to make grants to State 
     agencies to improve WIC information and data systems. 
     Appropriations for this are authorized through fiscal year 
     1994. [Sec. 17(p) of the CNA]
     House bill
       Definitions. Makes clear that, after 365 days in a 
     temporary accommodation, individuals will not be considered 
     homeless. [Sec. 3429(a)]
       [Note.--Sec. 3429(a) also makes a technical/conforming 
     amendment to the definition of ``drug abuse education.''
       Secretary's Promotion of WIC. Deletes the requirement that 
     the Secretary promote the WIC program. [Sec. 3429(b)]
       Eligible Participants. Deletes the requirement for the 
     Secretary's biennial report on participants. [Sec. 3429(c)]
       Nutrition and Drug Abuse Education. Makes provision of drug 
     abuse education optional.
       Deletes the requirement to annually evaluate nutrition 
     education and breastfeeding promotion/support.
       Removes the requirement for providing information about 
     food stamps, AFDC, and child support enforcement. Replaces it 
     with authority for State agencies to provide local agencies 
     with materials describing other programs for which WIC 
     participants may be eligible.
       Deletes the specific authority for using a nutrition 
     education master file.
       Requires that local agencies maintain and make available 
     lists of local substance abuse counseling and treatment 
     resources. [Sec. 3429(d)]
       State Plan. Revises the State plan submission requirement 
     to stipulate that State agencies only be required to submit 
     substantive changes in their plan for the Secretary's 
     approval.
       Removes the noted specific State plan requirements for 
     coordination. Replaces them with a requirement that State 
     plans include a plan to coordinate WIC operations with other 
     services or programs that may benefit WIC participants and 
     applicants.
       Adds a requirement that State WIC plans include a plan to 
     improve access for those who are employed, or who reside in 
     rural areas.
       Removes the noted specific State plan requirements for 
     reaching those most in need and not participating. Retains a 
     requirement that State plans include a plan for reaching and 
     enrolling women in the early months of pregnancy and 
     migrants.
       Deletes the noted specific State plan requirements as to 
     how incarcerated persons will be provided benefits.
       Deletes the noted specific State plan requirements as to 
     improving program access for the employed and rural 
     residents. [Note.--An earlier provision adds a general State 
     plan requirement for improved access for these persons.]
       Deletes the noted State plan requirement for an estimate of 
     increased participation when funds conversion authority is 
     chosen by the State.
       Revises authority for the Secretary to require other 
     information as the Secretary may require to a stipulation 
     that plans must include other information as the Secretary 
     may ``reasonably'' require.
       Makes a conforming amendment deleting a provision that 
     permits State agencies to submit only those parts of plans 
     that differ from previous years.
       Deletes the public comment procedures requirement.
       Deletes these processing requirements for local WIC agency 
     applications.
       Deletes the noted requirements for announcing and 
     distributing information and certification in hospitals.
       Deletes an out-of-date requirement that States advise the 
     Secretary on procedures to reduce purchases of low-iron 
     infant formula.
       Revises the requirement to make accounts and records 
     available at all times to a requirement that they be 
     available at ``any reasonable time.''
       Deletes noted requirements as to the content of suspension/
     termination notices.
       Deletes the requirement for staffing standards
       Deletes the noted provision stipulating that products 
     designed for women and infants may be made available in the 
     WIC program if commercially available or approved based on 
     tests.
       Makes optional the provision of services and use of 
     materials in languages other than English.
       Deletes specific authority for delivery methods to 
     accommodate incarcerated individuals.
       Makes optional the requirement to provide information about 
     other potential sources of food assistance. [Sec. 3429(e)]
       Information. Deletes out-of-date requirement for a report 
     on those income-eligible for the WIC program based on the 
     1990 Census. [Sec. 3429(f)]
       Procurement of Infant Formula. Deletes the requirement for 
     States to report data on breastfeeding for a biennial report 
     that is eliminated elsewhere in the bill.
       Deletes an out-of-date requirement to meet cost containment 
     conditions.
       Deletes an out-of-date provision relating to cost 
     containment contracts.
       Deletes the requirement for universal product code pilots.
       Deletes conditions on the Secretary when soliciting infant 
     formula bids on behalf of States.
       Deletes noted requirements of the Secretary related to 
     promoting cost containment.
       Removes breastfeeding promotion and support projects as a 
     use for the Secretary's special fund of $10 million a year.
       None of the amendments affecting procurement practices are 
     to apply to contracts for infant formula in effect on 
     enactment. [Sec. 3429(g)]
       National Advisory Council. Provides that the Advisory 
     Council elect its Chairman and Vice-Chairman. [Sec. 3429(h)]
       Completed Study; Community College Demonstration; Grants 
     for Information and Data Systems. Deletes requirements for a 
     1989 drug abuse education study and preparation of materials. 
     Deletes funding for distributing materials and referrals. 
     [Sec. 3429(I)]
       Deletes authority for a pilot for WIC clinics in community 
     colleges. [Sec. 3429(I)]
       Deletes out-of-date authority for information and data 
     system improvement grants. [Sec. 3429(I)]
       Disqualification of WIC Vendors. Adds provisions for 
     disqualifying WIC vendors that have been disqualified from 
     participation in the Food Stamp Program. Disqualification is 
     for the same period as the food stamp disqualification and is 
     not subject to separate administrative and judicial review. 
     [Sec. 3429(j)]
     Senate amendment
       Definitions. Same provisions. [Sec. 1259(a)]
       Secretary's Promotion of WIC. Same provision. [Sec. 
     1259(b)]
       Eligible Participants. Same provision. [Sec. 1259(c)]
       Nutrition and Drug Abuse Education. No provision.
       State Plan. Same provisions, except the Senate amendment 
     (1) requires plans for improving access to those who are 
     employed, or who reside, in rural areas; (2) includes no 
     provisions to delete the public comment procedures 
     requirement, delete requirements for announcing and 
     distributing information and certification in hospitals, or 
     to make optional the provision requiring services and use of 
     materials in languages other than English. [Sec. 1259(d)]
       Information. Same provision. [Sec. 1259(e)]
       Procurement of Infant Formula. Same provisions, except that 
     the Senate amendment has no provision to remove breastfeeding 
     promotion and support projects as a use for the Secretary's 
     special fund. [Sec. 1259(f)]
       National Advisory Council. Same provision. [Sec. 1259(g)]
       Completed Study; Community College Demonstration; Grants 
     for Information and Data Systems. Same provisions. [Sec. 
     1259(h)]
       Disqualification of WIC Vendors. Same provisions. [Sec. 
     1259(i)]

[[Page H8944]]

     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. With respect to provisions in 
     disagreement:
       Nutrition Education and Drug Abuse Education. The 
     conference agreement adopts the House provision with an 
     amendment retaining the requirement for drug abuse education.
       State Plan. The conference agreement: adopts the House 
     provision regarding plans to improve access to the employed 
     and those in rural areas; adopts the Senate provision on 
     requirements for public comment procedures and for announcing 
     and distributing information and certification in hospitals, 
     and; adopts the House provision making optional the provision 
     requiring services and use of materials in languages other 
     than English.
       Procurement of Infant Formula. The conference agreement 
     adopts the Senate provision retaining breastfeeding promotion 
     and support projects as a use for the Secretary's special 
     fund. [Sec. 729]


                23. CASH GRANTS FOR NUTRITION EDUCATION

     Present law
       The Secretary is authorized to make cash grants to State 
     education agencies for demonstration projects in nutrition 
     education. [Sec. 18 of the CNA]
     House bill
       Deletes authority for cash grants for nutrition education 
     demonstration projects. [Sec. 3430]
     Senate amendment
       Same provision. [Sec. 1260]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 730]


                  24. nutrition education and training

     Present law
       Findings. Congress finds that:
       the proper nutrition of children is a matter of highest 
     priority;
       the lack of understanding of good nutrition principles and 
     their relation to health can contribute to children's 
     rejection of nutritious foods and plate waste;
       many school food service personnel and teachers do not have 
     adequate training;
       the lack of parental knowledge of nutrition can be 
     detrimental on children's nutritional development; and
       there is a need to create opportunities for children to 
     learn about good nutrition. [Sec. 19(a) of the CNA]
       It is the purpose of the provisions for a nutrition 
     education and training program to (a) encourage dissemination 
     of information to children and (b) establish a system of 
     grants to State education agencies for nutrition education 
     and training programs. [Sec. 19(b) of the CNA]
       Use of Funds. State agencies may use nutrition education 
     and training funds for:
       funding a nutrition component in consumer homemaking and 
     health education programs;
       instructing teachers and school staff on how to promote 
     better nutritional health and motivate children from a 
     variety of linguistic and cultural backgrounds to practice 
     sound eating habits;
       develop means of providing nutrition education in 
     ``language appropriate'' materials through after-school 
     programs;
       training related to healthy and nutritious meals;
       creating instructional programming on the ``Food Guide 
     Pyramid'' (including language appropriate materials) for 
     teachers, food service staff, and parents;
       funding aspects of the Secretary's ``Strategic Plan for 
     Nutrition Education;''
       encouraging public service advertisements to promote 
     healthy eating habits for children, including language 
     appropriate materials and advertisements;
       coordinating and promoting nutrition education and training 
     activities in local school districts;
       contracting with public and private nonprofit education 
     institutions to conduct nutrition education and training;
       increasing public awareness of the importance of 
     breakfasts; and
       coordinating and promoting nutrition education and training 
     activities (including those under the summer and child care 
     food programs). [Sec. 19(f) of the CNA]
       States may receive planning and assessment grants for 
     nutrition education and training. [Sec. 19(f) of the CNA]
       Nothing in the provisions for a nutrition education and 
     training program prohibits agencies from making available or 
     distributing materials, resources, activities, or programs to 
     adults. [Sec. 19(f) of the CNA]
       Accounts, Records, and Reports. State education agencies 
     must make accounts and records available for inspection and 
     audit by the Secretary ``at all times.'' [Sec. 19(g) of the 
     CNA]
       State Coordinators for Nutrition; State Plan. A State 
     nutrition coordinator's assessment of the nutrition education 
     and training needs of the State must include identification 
     of all students in need of nutrition education and 
     identification of State and local resources for materials, 
     facilities, staff, and methods for nutrition education. [Sec. 
     19(h) of the CNA]
       State nutrition coordinators' comprehensive plans for 
     nutrition education (prepared after receiving a planning and 
     assessment grant) must meet certain specific standards. [Sec. 
     19(h) of the CNA]
       Authorization of Appropriations. Funding for the nutrition 
     education and training program is permanently appropriated at 
     $10 million a year. State grants are based on a rate of 50 
     cents for each child enrolled, except that no State may 
     receive less than $62,500. [Sec. 19(I) of the CNA]
       Assessment. By October 1, 1990, each State must assess its 
     nutrition education and training program. [Sec. 19(j) of the 
     CNA]
     House bill
       Findings. Deletes the noted findings in present law and 
     replaces them with a finding 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.'' [Sec. 
     3431(a)]
       Removes provisions referring to dissemination of 
     information from the statement of purpose (they are included 
     in the findings as noted above). [Sec. 3431(a)]
       Use of Funds. Deletes the noted provisions for use of 
     nutrition education and training funds. Adds a provision 
     allowing funds to be used for ``other appropriate activities, 
     as determined by the State.'' [Sec. 3431(b)]
       Deletes authority for nutrition education and training 
     planning and assessment grants. [Sec. 3431(b)]
       Deletes the noted provision relating to materials and 
     activities for adults. [Sec. 3431(b)]
       Accounts, Records, and Reports. Revises the requirement to 
     make accounts and records available at all times to a 
     requirement that they be available at ``any reasonable 
     time.'' [Sec. 3431(c)]
       State Coordinators for Nutrition; State Plan. Deletes the 
     noted specific requirements for nutrition education and 
     training State assessments. [Sec. 3431(d)]
       Deletes all specific requirements on comprehensive 
     nutrition education plans prepared after a planning and 
     assessment grant (these grants are eliminated elsewhere in 
     the bill). [Sec. 3431(d)]
       Authorization of Appropriations. Beginning with fiscal year 
     1997, appropriations are authorized at $10 million a year 
     (through 2002). State grants are based on a rate of 50 cents 
     for each child enrolled, except that no State will receive 
     less than $75,000. If funds are insufficient to provide 
     grants based on the 50 cent/$75,000 rule, the amount of each 
     State's grant is ratably reduced. [Sec. 3431(e) & (g)]
       Assessment. Deletes the out-of-date requirement for State 
     assessments of their nutrition education and training 
     programs. [Sec. 3431(f)]
     Senate amendment
       Findings. Same provisions. [Sec. 1261(a)]
       Use of Funds. Same provisions. [Sec. 1261(b)]
       Accounts, Records, and Reports. Same provision. [Sec. 
     1261(c)]
       State Coordinators for Nutrition; State Plan. Same 
     provisions. [Sec. 1261(d)]
       Authorization of Appropriations. Same provisions. [Sec. 
     1261(e) & (g)]
       Assessment. Same provision. [Sec. 1261(f)]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 731]

                  Subtitle C--Miscellaneous Provisions


  25. coordination of school lunch, school breakfast, and summer food 
                            service programs

     Present law
       No provisions.
     House bill
       Requires the Secretary to develop proposed changes to 
     regulations under the school lunch, school breakfast, and 
     summer food service programs for the purpose of simplifying 
     and coordinating them into a comprehensive meal program. 
     Requires that the Secretary consult with local, State, and 
     regional administrators in developing the proposed changes. 
     Not later than November 1, 1997, the Secretary must submit to 
     Congress a report on the proposed changes. [Sec. 3441]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the House provisions. [Sec. 
     741]


                           26. rounding rules

     Present law
       When indexed, reimbursement rates for the school lunch, 
     school breakfast, special milk, and commodity assistance 
     programs are rounded to the nearest quarter cent. [Sec. 3 and 
     4 of the CNA; Sec. 6 and 11 of the NSLA]
     House bill
       No provision. [Note: Provisions amending the law governing 
     the summer food service program and the child and adult care 
     food program require that, when indexed, their reimbursement 
     rates be rounded down to the nearest lower cent increment.]
     Senate amendment
       Requires that, when indexed, reimbursement rates for the 
     school breakfast, school lunch, special milk, and commodity 
     assistance programs be rounded down to the nearest lower cent 
     increment. [Sec. 1262]
       [Note.--As with the House bill, amendments affecting the 
     summer food service program and the child and adult care food 
     program include comparable rounding rules.]
     Conference agreement
       The conference agreement adopts the Senate provisions with 
     an amendment making

[[Page H8945]]

     the new rounding rules applicable only to full price meals in 
     the school breakfast and school lunch programs and full price 
     meals in child care centers. [Sec. 704]

          Title VIII--Food Stamps and Commodities Distribution

                     Subtitle A--Food Stamp Program


                 1. DEFINITION OF CERTIFICATION PERIOD

     Present law
       For households subject to periodic (monthly) reporting, 
     eligibility certification periods must be 6-12 months, but 
     the Secretary may waive this rule. For households receiving 
     federally aided public assistance or general assistance, 
     certification periods must coincide with the certification 
     periods for the other public assistance programs. For other 
     households, certification periods generally must not be less 
     than 3 months--but they can be (1) up to 12 months for those 
     consisting entirely of unemployable, elderly, or primarily 
     self-employed persons or (2) as short as circumstances 
     require for those with a substantial likelihood of frequent 
     changes in income or other circumstances and for any 
     household on initial determination. The Secretary may waive 
     the maximum 12-month period to improve program 
     administration. [Sec. 3(c)]
     House bill
       Replaces existing provisions as to certification periods 
     with a requirement that certification periods not exceed 12 
     months--but can be up to 24 months if all adult household 
     members are elderly or disabled. Requires that State agencies 
     have at least 1 contact with each certified household every 
     12 months. [Sec. 1011]
     Senate amendment
       Same provision. [Sec. 1111]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 801]


                        2. DEFINITION OF COUPON

     Present law
       ``Coupon'' is defined to mean any coupon, stamp, or type of 
     certificate issued under provisions of the Food Stamp Act. 
     [Sec. 3(d)]
     House bill
       Expands the definition of coupon to include: authorization 
     cards, cash or checks issued in lieu of a coupon, or access 
     devices (including an electronic benefit transfer card or 
     personal identification number). [Sec. 1012]
     Senate amendment
       Same provision. [Sec. 1112]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 802]


                3. TREATMENT OF CHILDREN LIVING AT HOME

     Present law
       Parents and their children 21 years of age or younger who 
     live together must apply for food stamps as a single 
     household (thereby reducing aggregate household benefits)--
     except for children who are themselves parents living with 
     their children and children who are married and living with 
     their spouses. [Sec. 3(i)]
     House bill
       Removes the exception, from the requirement that related 
     persons apply together as a single household, for children 
     who are themselves parents living with their children and 
     children who are married and living with their spouses. [Sec. 
     1013]
     Senate amendment
       Same provision. [Sec. 1113]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 803]


 4. OPTIONAL ADDITIONAL CRITERIA FOR SEPARATE HOUSEHOLD DETERMINATIONS

     Present law
       Certain persons who live together may apply for food stamps 
     as separate households (thereby increasing aggregate 
     household benefits) if they purchase food and prepare meals 
     separately and (1) are unrelated or (2) are related but are 
     not spouses or children living with their parents [see item 3 
     for the proposed change in the household definition]. In 
     addition, elderly persons who live with others and cannot 
     purchase food and prepare meals separately because of a 
     substantial disability may apply as separate ``households'' 
     as long as their co-residents' income is below prescribed 
     limits. [Sec. 3(i)]
     House bill
       Permits States to establish criteria that prescribe when 
     persons who live together (and might otherwise be allowed to 
     apply as separate households) must apply for food stamps as a 
     single household--without regard to common purchase of food 
     and preparation of meals. [Sec. 1014]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provision.


                 5. ADJUSTMENT OF THE THRIFTY FOOD PLAN

     Present law
       Maximum food stamp benefits are defined as 103 percent of 
     the cost of the Agriculture Department's ``Thrifty Food 
     Plan,'' adjusted for food-price inflation each October to 
     reflect the plan's cost in the immediately preceding June--
     and rounded down to the nearest dollar. [Sec. 3(o)]
     House bill
       Sets maximum monthly food stamp benefits at 100 percent of 
     the cost of the Thrifty Food Plan, effective October 1, 1996, 
     adjusted annually as under present law. Requires that the 
     October 1996 adjustment not reduce maximum benefit levels. 
     [Sec. 1015]
     Senate amendment
       Same provision. [Sec. 1114]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 804]


                  6. DEFINITION OF HOMELESS INDIVIDUAL

     Present law
       For food stamp eligibility and benefit determination 
     purposes, a ``homeless individual'' is a person lacking a 
     fixed/regular nighttime residence or one whose primary 
     nighttime residence is a shelter, a residence intended for 
     those to be institutionalized, a temporary accommodation in 
     the residence of another, or a public or private place not 
     designed to be a regular sleeping accommodation for humans. 
     [Sec. 3(s)]
     House bill
       Provides that persons whose primary nighttime residence is 
     a temporary accommodation in the home of another may only be 
     considered homeless if the accommodation is for no more than 
     90 days. [Sec. 1016]
     Senate amendment
       Same provision. [Sec. 1115]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 805]


               7. STATE OPTION FOR ELIGIBILITY STANDARDS

     Present law
       The Secretary is directed to establish uniform national 
     standards of eligibility for food stamps, with certain 
     variations allowed for Alaska, Hawaii, Guam, and the Virgin 
     Islands, and in other cases (e.g., imposition of monthly 
     reporting requirements). States may not impose any other 
     standards of eligibility as a condition of participation in 
     the program. [Sec. 5(b)]
     House bill
       Explicitly permits nonuniform standards of eligibility for 
     food stamps. [Sec. 1017]
     Senate amendment
       Same provision. [Sec. 1116]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 806]


                        8. EARNINGS OF STUDENTS

     Present law
       The earnings of an elementary/secondary student are 
     disregarded as income until the student's 22nd birthday. 
     [Sec. 5(d)(7)]
     House bill
       Provides an earnings disregard for elementary/secondary 
     students until the student's 20th birthday. [Sec. 1018]
     Senate amendment
       Same provision, except that during fiscal year 2002 
     earnings will be disregarded until the student's 18th 
     birthday. [Sec. 1117]
     Conference agreement
       The conference agreement adopts the House provision with an 
     amendment providing for the counting of earnings of 
     elementary/secondary students once they reach age 18. [Sec. 
     807]


                          9. ENERGY ASSISTANCE

     Present law
       Payments or allowances for energy assistance provided by 
     State or local law are, under rules set by the Secretary, 
     disregarded as income. [Sec. 5(d)(11) and 5(k)]
       Payments or allowances for energy assistance provided by 
     State or local law are, under rules set by the Secretary, 
     disregarded as income. [Sec. 5(d)(11) and 5(k)]
       Federal Low-Income Home Energy Assistance Program (LIHEAP) 
     benefits are disregarded as income. [Sec. 5(d)(11) and 5(k) 
     of the Food Stamp Act and sec. 2605(f) of the Low-Income Home 
     Energy Assistance Act]
       Certain utility allowances/reimbursements under Department 
     of Housing and Urban Development (HUD) programs are 
     disregarded as income. [Sec. 5(d)(11) and 5(k)]
       Shelter expense deductions may be claimed for utility costs 
     covered by LIHEAP benefits, but not in the case of other 
     disregarded energy assistance--unless the household has out-
     of-pocket expenses. [Sec. 5(e) of the Food Stamp Act and sec. 
     2605(f) of the Low-Income Home Energy Assistance Act]
     House bill
       Requires that State/local energy assistance be counted as 
     income. [Sec. 1019]
       Requires an income disregard for one-time payments/
     allowances under a Federal or State law for the costs of 
     weatherization or emergency repair/replacement of unsafe/
     inoperative furnaces or other heating/cooling devices. [Sec. 
     1019]
       Requires that LIHEAP benefits be counted as income. [Sec. 
     1019]
       Requires that HUD utility allowances/reimbursements be 
     counted as income. [Sec. 1019]
       Allows claiming shelter expense deductions for utility 
     costs covered directly or indirectly by the LIHEAP or other 
     counted energy assistance. [Sec. 1019]

[[Page H8946]]

       [Note: Sec. 2131 amends sec. 2605(f) of the Low-Income Home 
     Energy Assistance Act to delete that Act's requirement that 
     LIHEAP recipients must be allowed to claim the amount of 
     their LIHEAP benefits as a shelter expense.]
     Senate amendment
       State/local assistance. Same provision (technical 
     differences). [Sec. 1118]
       Weatherization assistance. Same provision (technical 
     differences). [Sec. 1118]
       LIHEAP. Present law (technical differences). [Sec. 1118]
       HUD assistance. Present law (technical differences). [Sec. 
     1118]
       Shelter expense deductions. Present law (technical 
     differences). [Sec. 1118]
     Conference agreement
       The conference agreement adopts the Senate provisions with 
     a technical amendment. [Sec. 808]


                       10. DEDUCTIONS FROM INCOME

     Present law
       Standard Deductions. All households are allowed standard 
     deductions from their otherwise countable income. Standard 
     deductions are indexed annually (each October) for inflation 
     based on the Consumer Price Index for urban wage earners 
     (CPI-U) for items other than food and rounded down to the 
     nearest dollar. For fiscal year 1995, standard deductions 
     were: $134 a month for the 48 contiguous States and the 
     District of Columbia, $229 for Alaska, $189 for Hawaii, $269 
     for Guam, and $118 for the Virgin Islands. For fiscal year 
     1996, they were ``scheduled'' to rise to: $138, $236, $195, 
     $277, and $122, respectively. This was barred by the fiscal 
     year 1996 appropriations measure, and fiscal year 1996 
     standard deduction levels are at the fiscal year 1995 
     amounts. [Sec. 5(e)]
       Earned Income Deduction. Households may claim a deduction 
     for 20 percent of any earnings. This deduction is not allowed 
     with respect to any income that a household willfully or 
     fraudulently fails to report in a timely manner, as proven in 
     a fraud hearing proceeding (i.e., it is not allowed when 
     determining the amount of a benefit overissuance). [Sec. 
     5(e)]
       Homeless Shelter Allowance. For homeless households not 
     receiving free shelter throughout the month, States may 
     develop a homeless shelter expense estimate (a standard 
     allowance) to be used in calculating an excess shelter 
     expense deduction. States must use this amount unless the 
     household verifies higher expenses. The Secretary may 
     prohibit the use of the allowance for households with 
     extremely low shelter costs. The maximum allowance amount is 
     inflation indexed annually and currently stands at $143 a 
     month (fiscal year 1996). [Sec. 11(e)(3)]
       Excess Shelter Expense Deduction. Households may claim 
     excess shelter expense deductions from their otherwise 
     countable income--in the amount of any shelter expenses 
     (including utility costs) above 50 percent of their countable 
     income after all other deductions have been applied. For 
     households with elderly or disabled members, these deductions 
     are unlimited. For other households, they are limited to: 
     $247 a month in the 48 contiguous States and the District of 
     Columbia, $429 in Alaska, $353 in Hawaii, $300 in Guam, and 
     $182 in the Virgin Islands. Effective January 1, 1997, these 
     limits on excess shelter expense deductions for households 
     without elderly or disabled members are lifted. [Sec. 5(e)]
       States may develop and use ``standard utility allowances'' 
     (as approved by the Secretary) in calculating households' 
     shelter expenses. However, households may (1) claim actual 
     expenses instead of the allowance and (2) switch between an 
     actual expense claim and the standard allowance at the end of 
     any certification period and 1 additional time during any 12-
     month period. [Sec. 5(e)]
     House bill
       Standard Deductions. Indefinitely freezes standard 
     deduction amounts at their present levels (e.g., $134 for the 
     48 contiguous States and the District of Columbia). [Sec. 
     1020]
       Earned Income Deduction. Disallows an earned income 
     deduction for any income not reported in a timely manner and 
     for the public assistance portion of income earned under a 
     work supplementation/support program. [Sec. 1020]
       Homeless Shelter Allowance. Indefinitely freezes the 
     maximum homeless shelter allowance at its present level 
     ($143). States may use it in calculating an excess shelter 
     expense deduction (without regard to actual costs) and may 
     prohibit its use for households with extremely low shelter 
     costs. [Sec. 1020]
       Excess Shelter Expense Deduction. Indefinitely retains 
     current limits on excess shelter expense deductions for 
     households without elderly or disabled members (e.g., $247 
     for the 48 contiguous States and the District of Columbia). 
     [Sec. 1020]
       Permits States to make use of standard utility allowances 
     mandatory for all households if (1) the State has developed 
     separate standards that do and do not include the cost of 
     heating and cooling and (2) the Secretary finds that the 
     standards will not result in increased Federal costs. [Sec. 
     1020]
     Senate amendment
       Standard Deductions. Extends the present standard deduction 
     levels (e.g., $134 for the 48 contiguous States) through 
     November 1996. For December 1996 through September 2001, sets 
     standard deduction at $120, $206, $170, $242, and $106. For 
     October 2001 through August 2002, sets standard deductions at 
     $113, $193, $159, $227, and $100. For September 2002, sets 
     standard deductions at $120, $206, $170, $242, and $106. 
     Beginning with fiscal year 2003, standard deductions are 
     indexed for inflation as under present law. [Sec. 1119]
       Earned Income Deduction. Same provision. [Sec. 1119]
       Homeless Shelter Allowance. Same provision. [Sec. 1119]
       Excess Shelter Expense Deduction. Effective January 1, 
     1997, increases the current limits on excess shelter expense 
     deductions to $342 in the 48 contiguous States and the 
     District of Columbia, $594 in Alaska, $489 in Hawaii, $415 in 
     Guam, and $252 in the Virgin Islands. No further increases 
     are provided. [Sec. 1119]
       Includes the same provision as in the House bill in regard 
     to mandatory standard utility allowances. [Sec. 1119]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. With regard to the provisions in 
     disagreement:
       the conference agreement adopts the House provision as to 
     standard deductions; and
       the conference agreement adopts the Senate provision as to 
     limits on the excess shelter expense deduction with an 
     amendment (1) requiring that they continue at their present-
     law levels (e.g. $247 for the 48 contiguous States and the 
     District of Columbia) through December 31, 1996, (2) for 
     January 1, 1997, through fiscal year 1998, increasing the 
     limits to $250 for the 48 States and the District of 
     Columbia, $434 for Alaska, $357 for Hawaii, $304 for Guam, 
     and $184 for the Virgin Islands, (3) for fiscal years 1999 
     and 2000, increasing the limits to $275, $478, $393, $334, 
     and $203, and (4) for fiscal years 2001, 2002, and each 
     subsequent fiscal year, increasing the limits to $300, $521, 
     $429, $364, and $221.
       [Sec. 809]


                         11. VEHICLE ALLOWANCE

     Present law
       In determining a household's liquid assets for food stamp 
     eligibility purposes, a vehicle's fair market value in excess 
     of $4,600 is counted. This threshold is scheduled to rise to 
     an estimated $5,150 on October 1, 1996, and be adjusted each 
     October thereafter to reflect changes in the new car 
     component of the CPI-U for the 12-month period ending the 
     immediately preceding June (rounded to the nearest $50). 
     Excluded from this rule are vehicles used to produce income, 
     necessary for transportation of a disabled household member, 
     or depended on to carry fuel or water. [Sec. 5(g)]
     House bill
       Retains the threshold above which the fair market value of 
     a vehicle is counted as a liquid asset at the current level--
     $4,600. [Sec. 1021]
     Senate amendment
       Effective October 1, 1996, sets the threshold above which 
     the fair market value of a vehicle is counted as a liquid 
     asset to $4,650. No further increases are provided. [Sec. 
     1120]
     Conference agreement
       The conference agreement adopts the Senate provision. [Sec. 
     810]


     12. VENDOR PAYMENTS FOR TRANSITIONAL HOUSING COUNTED AS INCOME

     Present law
       AFDC, or general assistance housing aid, provided to a 
     third party on behalf of a food stamp household is considered 
     paid directly to the household (and thus counted as household 
     income) unless, among other exceptions, it is housing 
     assistance paid on behalf of households residing in 
     ``transitional housing for the homeless.'' [Sec. 5(k)]
     House bill
       Removes the exception for vendor payments for transitional 
     housing for the homeless. [Sec. 1022]
     Senate amendment
       Same provision. [Sec. 1121]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 811]


       13. SIMPLIFIED CALCULATION OF INCOME FOR THE SELF-EMPLOYED

     Present law
       The cost of producing self-employment income is disregarded 
     (subtracted out) in calculating household income. [Sec. 5(d)]
     House bill
       No provision.
     Senate amendment
       Provides that the Secretary establish a procedure (designed 
     not to increase Federal costs) by which States may use a 
     reasonable estimate of the cost of producing self-employment 
     income in lieu of calculating actual costs, not later than 1 
     year after enactment. The procedure must allow States to 
     estimate costs for all types of self-employment income and 
     may differ for different types of self-employment income. 
     [Sec. 1122]
     Conference agreement
       The conference agreement adopts the Senate provision with 
     an amendment providing that the Secretary establish a 
     procedure by which States may submit a method for determining 
     reasonable estimates of the cost of producing self-employment 
     income designed not to increase Federal costs. [Sec. 812]


  14. DOUBLED PENALTIES FOR VIOLATING FOOD STAMP PROGRAM REQUIREMENTS

     Present law
       The disqualification period for the first intentional 
     violation of program requirements

[[Page H8947]]

     is 6 months. The penalty for a second intentional violation 
     (and the first violation involving trading of a controlled 
     substance) is 1 year. [Sec. 6(b)(1)]
     House bill
       Increases the disqualification penalty for a first 
     intentional violation to 1 year. Increases the penalty for a 
     second intentional violation (and the first involving a 
     controlled substance) to 2 years. [Sec. 1023]
     Senate amendment
       Same provision. [Sec. 1123]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 813]


             15. DISQUALIFICATION OF CONVICTED INDIVIDUALS

     Present law
       Permanent disqualification is required for the third 
     intentional violation of program requirements, the second 
     violation involving trading of a controlled substance, and 
     the first violation involving trading of firearms, 
     ammunition, or explosives. [Sec. 6(b)(1)]
     House bill
       Adds a requirement for permanent disqualification of 
     persons convicted of trafficking in food stamp benefits where 
     the benefits have a value of $500 or more. [Sec. 1024]
     Senate amendment
       Same provision. [Sec. 1124]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 814]


                          16. DISQUALIFICATION

     Present law
       Conditions of Participation. Non-exempt individuals between 
     16 and 60 are ineligible if they: (1) refuse to register for 
     employment, (2) refuse without good cause (including lack of 
     adequate child care) to participate in an employment or 
     training program when required to do so by the State, or (3) 
     refuse, without good cause, a job offer meeting minimum 
     standards. In addition, if the individual is head of 
     household and fails to comply with one of the above-noted 
     conditions or voluntarily quits a job without good cause, the 
     entire household is ineligible. [Sec. 6(d)(1)]
       Duration of Ineligibility/Household Ineligibility. 
     Disqualification periods for failure to meet work/training 
     conditions of participation are (1) 2 months or until 
     compliance (whichever is first) for most failures and (2) 90 
     days in the case of a voluntary quit. [Sec. 6(d)(1)]
     House bill
       Conditions of Participation. Adds conditions making 
     individuals ineligible if they (1) refuse without good cause 
     to provide sufficient information to allow the State agency 
     to determine their employment status or job availability or 
     (2) voluntarily and without good cause reduce work effort and 
     (after the reduction) are working less than 30 hours a week. 
     Makes ineligibility for failure to comply with workfare 
     requirements explicit and covered by new (see below) duration 
     of ineligibility rules. Adds a condition making all 
     individuals (in addition to heads of household) ineligible if 
     they voluntarily quit a job without good cause. Lack of 
     adequate child care, as an explicit good cause exemption for 
     refusal to participate in an employment or training program, 
     is removed. [Sec. 1025]
       Duration of Ineligibility/Household Ineligibility. 
     Establishes new mandatory minimum disqualification periods 
     for individuals failing to comply with any work/training 
     condition of participation. For the first violation, 
     individuals are ineligible until they fulfill work/training 
     conditions, for 1 month, or for a period (determined by the 
     State) not to exceed 3 months--whichever is later. For the 
     second violation, individuals are ineligible until they 
     fulfill work/training conditions, for 3 months, or for a 
     period (determined by the State) not to exceed 6 months--
     whichever is later. For a third or subsequent violation, 
     individuals are ineligible until they fulfill work/training 
     conditions, for 6 months, until a date set by the State 
     agency, or (at State option) permanently. [Sec. 1025]
       Establishes a new household ineligibility rule: if any 
     individual who is head of household is disqualified under a 
     work/training condition of participation, the entire 
     household is, at State option, ineligible for a period not to 
     exceed the lesser of the duration of the individual's 
     ineligibility or 180 days. [Sec. 1025]
       Administration. In establishing cases of good cause, 
     voluntary quit, and reduction of work effort, the Secretary 
     determines the meaning of the terms. States determine the 
     meaning of other terms related to work/training conditions of 
     participation and the procedures for making compliance 
     decisions, but cannot make determinations that are less 
     restrictive than a comparable one under the State's family 
     assistance block grant (TANF) program. [Sec. 1025]
     Senate amendment
       Conditions of Participation. Same provision. [Sec. 1125]
       Duration of Ineligibility/Household Ineligibility. Same 
     provision. [Sec. 1125]
       Administration. Same provision. [Sec. 1125]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 815]


                        17. CARETAKER EXEMPTION

     Present law
       Parents or other household members with responsibility for 
     the care of a dependent child under age 6 are exempt from 
     food stamp work/training conditions of participation. [Sec. 
     6(d)(2)]
     House bill
       Permits States to lower the age at which a child 
     ``exempts'' a parent or caretaker from age 6 to not under the 
     age of 1. [Sec. 1026]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the House provision with an 
     amendment to permit a State to lower the age at which a child 
     exempts a parent or caretaker from age 6 to not under age 1, 
     if the State requested a waiver to lower the age of a 
     dependent child that exempts the parent or caretaker and had 
     the waiver denied by the Secretary as of August 1, 1996. The 
     State may lower the age of the child for not more than 3 
     years. [Sec. 816 ]


                      18. EMPLOYMENT AND TRAINING

     Present law
       Programs. States must operate employment and training 
     programs for nonexempt food stamp recipients and place a 
     minimum proportion of those covered in a program component. 
     Program components can range from job search or education 
     activities to work experience/training and workfare 
     assignments.
       Work experience/training program components must limit 
     assignments to projects serving a useful public purpose, use 
     the prior training/experience of assignees, not provide work 
     that has the effect of replacing others, and provide the same 
     benefits and working conditions provided others.
       States and political subdivisions also may operate workfare 
     programs under which nonexempt recipients may be required to 
     perform work in return for the minimum wage equivalent of 
     their household's monthly food stamp allotment. Workfare 
     assignments may not replace or prevent the employment of 
     others and must provide the same benefits and working 
     conditions provided others.
       The total hours of work required of a household under an 
     employment/training program (including workfare) cannot 
     exceed the minimum wage equivalent of the household's monthly 
     allotment. Monthly participation in an employment/training 
     program required of any household member cannot exceed 120 
     hours (when added to other work). And workfare hours (when 
     added to other work) cannot exceed 30 hours a week for a 
     household member.
       Under employment and training programs for food stamp 
     recipients, States must provide or pay for transportation and 
     other costs directly related to participation (up to $25 a 
     month for each participant) and necessary dependent care 
     expenses (in general, up to local market rates). Under 
     workfare program, States must reimburse participants for 
     transportation and other costs directly related to 
     participation (up to $25 a month for each participant). [Sec. 
     6(d)(4) and sec. 20]
       Funding. To support employment and training programs for 
     food stamp recipients, States receive a formula share of 
     required spending of $75 million a year. Each State's share 
     is based on its share of nonexempt recipients and its share 
     of those placed in employment/training program components. 
     [Sec. 16(h)]
       In addition, States receive a 50 percent match for any 
     additional administrative or participant support costs. [Sec. 
     16(h)]
     House bill
       Programs. Revises the existing requirements for State-
     operated employment and training programs for food stamp 
     recipients:
       makes clear that work experience is a purpose of employment 
     and training programs;
       requires that each component of an employment/training 
     program be delivered through a ``statewide workforce 
     development system,'' unless the component is not available 
     locally through the system;
       expands the existing State option to apply work/training 
     requirements to applicants to include all work/training 
     requirements, not only job search;
       removes specific Federal rules governing job search 
     components (i.e., those tied to rules in the AFDC program);
       removes provisions for employment/training components 
     related to work experience requiring that they be in public 
     service work and use recipients' prior training/experience;
       removes specific Federal rules as to States' authority to 
     exempt categories and individuals from employment/training 
     requirements, giving States full latitude to determine 
     exemptions;
       removes a requirement to serve volunteers;
       removes the requirement for ``conciliation procedures'' for 
     resolving disputes involving participation in employment/
     training programs;
       limits employment and training funding provided by the food 
     stamp program for services to family assistance block grant 
     (TANF) recipients to the amount used by the State for AFDC 
     recipients in fiscal year 1995; and
       removes provisions for Federal performance standards on 
     States. [Sec. 1027]
       Funding. Provides for required Federal spending of 
     increasing amounts for employment and training programs: $79 
     million in fiscal year 1997, $81 million in 1998, $84 million 
     in 1999, $86 million in 2000, $88 million in 2001, and $90 
     million in 2002. State allocations are based on a 
     ``reasonable formula''

[[Page H8948]]

     (determined by the Secretary) that gives consideration to 
     each State's population of persons subject to the new work 
     requirement (see item 25). [Sec. 1027]
       Provides that the 50 percent match for additional 
     administrative costs can include costs for case management/
     casework to facilitate the transition from economic 
     dependency to self-sufficiency through work. [Sec. 1027]
       Deletes a requirement for a report from the Secretary on 
     modifying Federal employment and training program payments to 
     States to reflect their effectiveness in carrying out 
     employment and training programs. [Sec. 1027]
     Senate amendment
       Programs. Same provisions. [Sec. 1126]
       Funding. Same provisions, except that required Federal 
     spending is $85 million a year for fiscal years 1997-2002. 
     [Sec. 1126]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills and adopts House provision with regard 
     to Funding. [Sec. 817]


                       19. FOOD STAMP ELIGIBILITY

     Present law
       The income and resources of aliens ineligible under Food 
     Stamp Act provisions are counted as available to the 
     remainder of the household, less a pro rata share for the 
     ineligible alien. [Sec. 6(f)]
     House bill
       Permits States the option to count all of the income and 
     resources of an alien ineligible under Food Stamp Act 
     provisions as available to the remainder of the household. 
     [Sec. 1066]
     Senate amendment
       Same provision, with technical differences. [Sec. 1127]
     Conference agreement
       The conference agreement adopts the Senate provision. [Sec. 
     818]


             20. comparable treatment for disqualification

     Present law
       Households penalized for an intentional failure to comply 
     with a Federal, State, or local welfare program may not, for 
     the duration of the penalty, receive an increased food stamp 
     allotment because the welfare payment has been reduced. [Sec. 
     8(d)]
       Persons are exempt from food stamp work/training conditions 
     of participation if they are currently subject to and 
     complying with AFDC or unemployment insurance work 
     registration requirements. Failure to comply with an AFDC/
     unemployment insurance work registration requirement that 
     ``is comparable to'' a food stamp work requirement results in 
     disqualification as if the food stamp requirement had been 
     violated. [Sec. 6(d)(2)]
     House bill
       If an individual is disqualified for failure to perform an 
     action required under a Federal, State, or local law relating 
     to means-tested public assistance, the State agency is 
     permitted to impose the same disqualification for food 
     stamps.
       If a disqualification is imposed under the family 
     assistance block grant (TANF) rules, States are permitted to 
     use the TANF rules and procedures to impose the same 
     disqualification for food stamps.
       Permits individuals disqualified from food stamps because 
     of failure to perform a required action under another public 
     assistance program to apply for food stamps as new applicants 
     after the disqualification period has expired, except that a 
     prior disqualification under food stamp program work/training 
     rules must be considered in determining eligibility.
       Requires States to include in their State plans the 
     guidelines they use in carrying out food stamp 
     disqualification for failure to perform another program's 
     required action(s). [Sec. 1028]
       Removes the requirement that an AFDC/unemployment insurance 
     work requirement be ``comparable'' to a food stamp 
     requirement to bring on disqualification from food stamps. 
     [Sec. 1028]
     Senate amendment
       Same provisions. [Sec. 1128]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 819]


    21. disqualification for receipt of multiple food stamp benefits

     Present law
       No comparable provision.
     House bill
       Adds a provision making individuals ineligible for 10 years 
     if they are found by a State agency (or Federal or State 
     court) to have made a fraudulent statement with respect to 
     identity or residence in order to receive multiple food stamp 
     benefits simultaneously. [Sec. 1029]
     Senate amendment
       Same provision. [Sec. 1129]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 820]
       The conferees note that State agency hearing processes have 
     sufficient recipient protections to warrant a decision to 
     impose a 10-year disqualification in these cases.


                 22. disqualification of fleeing felons

     Present law
       No provision.
     House bill
       Adds a provision making individuals ineligible while they 
     are fleeing to avoid prosecution, custody, or confinement for 
     a felony or attempted felony or violating a condition of 
     probation or parole. [Sec. 1030]
     Senate amendment
       Same provision. [Sec. 1130]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 821]


              23. cooperation with child support agencies

     Present law
       Custodial Parents. No provisions.
       Noncustodial Parents. No provisions.
     House bill
       Custodial Parents. Permits States to disqualify custodial 
     parents of children under the age of 18 who have an absent 
     parent, unless the parent cooperates with the State child 
     support agency in establishing the child's paternity and 
     obtaining support for the child and the parent. Cooperation 
     is not required if the State finds there is good cause (in 
     accordance with Federal standards taking into account the 
     child's best interest). Fees or other costs for services may 
     not be charged. [Sec. 1031]
       Noncustodial Parents. Permits States to disqualify putative 
     or identified noncustodial parents of children under 18 if 
     they refuse to cooperate with the State child support agency 
     in establishing the child's paternity and providing support 
     for the child. The Secretary and the Secretary of Health and 
     Human Services must develop guidelines as to what constitutes 
     a refusal to cooperate, and States must develop procedures 
     (using these guidelines) for determining whether there has 
     been a refusal to cooperate. Fees or other costs for services 
     may not be charged. States must provide privacy safeguards. 
     [Sec. 1031]
     Senate amendment
       Custodial Parents. Same provisions. [Sec. 1131]
       Noncustodial Parents. Same provisions. [Sec. 1131]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 822]


         24. disqualification relating to child support arrears

     Present law
       No provisions.
     House bill
       Allows States to disqualify individuals during any period 
     in which the individual is delinquent in any court-ordered 
     child support payment, unless the court is allowing a delay 
     or the individual is complying with a payment plan approved 
     by the court or a State child support agency. [Sec. 1032]
     Senate amendment
       Same provision. [Sec. 1132]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 823]


                          25. work requirement

     Present law
       No comparable provisions.
     House bill
       Requirement. After the date of enactment, no nonexempt 
     individual may be eligible for food stamps for more than 3 
     months during which the individual does not (1) work at least 
     20 hours a week (averaged monthly), (2) participate in and 
     comply with a ``work program'' for at least 20 hours a week 
     (as determined by the State agency), or (3) participate in a 
     workfare program. A work program is defined as a program 
     under the Job Training Partnership Act, a Trade Adjustment 
     Assistance Act program, or a program of employment and 
     training operated or supervised by a State or political 
     subdivision that meets standards approved by the Governor 
     (including a Food Stamp Act employment and training program), 
     other than job search or job search training. [Sec. 1033]
       General Exemptions. The new work requirement does not apply 
     to (1) those under 18 or over 50, (2) those who are medically 
     certified as physically or mentally unfit for employment, (3) 
     parents or other household members with the responsibility 
     for a dependent child, (3) those otherwise exempt from work 
     registration requirements (e.g., those caring for 
     incapacitated persons), and (4) pregnant women. [Sec. 1033]
       Other Provisions. On a State agency's request, the 
     Secretary may waive application of the new work requirement 
     to any group of individuals if the Secretary determines that 
     the area where they reside (1) has an unemployment rate over 
     10 percent or (2) does not have a sufficient number of jobs 
     to provide them employment. The Secretary must report the 
     basis for any waiver to Congress. [Sec. 1033]
     Senate amendment
       Requirement. No nonexempt individual may be eligible for 
     food stamps if, during the preceding 12-month period, the 
     individual received food stamp benefits for 4 months or more 
     while not (1) working at least 20 hours a week (averaged 
     monthly), (2) participating

[[Page H8949]]

     in and complying with a ``work program'' for at least 20 
     hours a week (as determined by the State agency), or (3) 
     participating in and complying with a workfare program. A 
     work program is defined as in the House bill, with a 
     technical difference. [Sec. 1133]
       General Exemptions. Same provisions. [Sec. 1133]
       Other Provisions. Provisions for unemployment-rate and job-
     availability waivers are the same as in the House bill, 
     except that the Secretary must respond to a State agency 
     request within 15 days. [Sec. 1133]
       The disqualification imposed under the new work requirement 
     ceases to apply if, during a 30-day period, an individual 
     works 80 hours or more, participates in and complies with a 
     work program (defined above) for at least 80 hours, or 
     participates in and complies with a workfare program. After 
     regaining eligibility, the individual again is subject to the 
     new work requirement, except that a new 12-month period 
     begins. [Sec. 1133]
       State agencies may exempt an individual from the new work 
     requirement: (1) by reason of ``hardship'' or (2) for up to 2 
     months (in any 12-month period), if the individual 
     participates in and complies with a job search or job search 
     training program under the Food Stamp Act's employment and 
     training program provisions that requires an average of at 
     least 20 hours a week of participation. The fiscal year 
     average monthly number of individuals participating because 
     of a hardship exemption may not exceed 20 percent of the 
     fiscal year average number of individuals receiving food 
     stamps who are not exempt from the new work requirement 
     because of the general exemptions or waivers (noted above). 
     [Sec. 1133]
       Provides for a transition to the new work requirement. 
     Prior to 1 year after enactment, administrators would not 
     ``look back'' a full 12 months; they would look back only to 
     the date of enactment. [Sec. 1133]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills: General Exemptions and provisions for 
     waivers in cases of high unemployment and lack of sufficient 
     jobs. With respect to the provisions in disagreement, the 
     conference agreement adopts the Senate provisions with an 
     amendment:
       No nonexempt individual may be eligible for food stamps if, 
     during the preceding 36-month period, the individual received 
     food stamp benefits for 3 months or more while not (1) 
     working at least 20 hours a week (averaged monthly), (2) 
     participating in and complying with a work program for at 
     least 20 hours a week (as determined by the State agency), or 
     (3) participating in and complying with a workfare program. A 
     work program is defined as in the House bill. Receipt of 
     benefits while exempt (including participation under the 
     additional 3-month eligibility provision described below) or 
     covered by a waiver would not count toward an individual's 
     basic 3-month eligibility period.
       Individuals denied eligibility under the new work rule 
     would regain eligibility if, during a 30-day period, the 
     individual (1) works 80 or more hours, (2) participates in 
     and complies with the requirements of a work program for 80 
     or more hours (as determined by the State agency), or (3) 
     participates in and complies with the requirements of a 
     workfare program. After having met this 30-day work/training 
     requirement, the individual could remain eligible for a 
     consecutive period of 3 months without working at least 20 
     hours a week or participating in an employment/training or 
     workfare program. For example, if an individual works 20 
     hours a week for at least 30 days and then loses a job, the 
     individual could retain food stamp eligibility for 3 
     consecutive months without working or being in a training/
     workfare program.
       But individuals could not take advantage of this provision 
     for an additional 3 months of eligibility, while not working 
     or in an employment/training or workfare program, for more 
     than a single 3-month period in a 36- month period. 
     Individuals regaining eligibility also would remain eligible 
     as long as they continued to meet requirements to work at 
     least 20 hours a week or participate in a training/workfare 
     program.
       Transition provisions are included that provide that the 
     36-month period established by the new work requirement will 
     not include any period before the earlier of the date the 
     State notifies recipients (through means such as individual 
     notices at certification, recertification, otherwise, mass 
     mailings, media announcements, or otherwise) about the new 
     work requirement or 3 months after enactment.
       [Sec. 824]


        26. ENCOURAGEMENT OF ELECTRONIC BENEFIT TRANSFER SYSTEMS

     Present law
       Rules for EBT Systems. State agencies, with the Secretary's 
     approval, may implement on-line electronic benefit transfer 
     (EBT) systems for delivering food stamp benefits. No State 
     may implement or expand an EBT system without prior approval 
     from the Secretary. States are responsible for 50 percent of 
     EBT system costs. The Secretary's regulations for approval 
     must include (1) standards that require that, in any 1 year, 
     the operational cost of an EBT system does not exceed costs 
     of prior issuance systems and (2) system security standards. 
     [Sec. 7(i)]
       Regulation E. The Federal Reserve Board has ruled that, as 
     of March 1997 (and with some minor modifications), its 
     ``Regulation E'' will apply to EBT systems. Regulation E 
     provides certain protections for consumers using cards to 
     access their accounts. It limits the liability of cardholders 
     for unauthorized withdrawals (to $50 if timely notification 
     is made) and requires periodic account statements and certain 
     error resolution procedures. [Federal Register of March 7, 
     1994]
       Anti-tying Restrictions. No provision.
     House bill
       Rules for EBT Systems. Provides that States must implement 
     EBT systems (on-line or off-line) before October 1, 2002, 
     unless the Secretary waives the requirement because a State 
     agency faces unusual barriers to implementation. States are 
     encouraged to implement an EBT system as soon as practicable. 
     [Sec. 1034]
       Subject to Federal standards, permits State agencies to 
     procure and implement an EBT system under the terms, 
     conditions, and design the agency considers appropriate. Adds 
     a new requirement for Federal procurement standards and 
     deletes the requirement for the Secretary's prior approval. 
     [Sec. 1034]
       Adds a requirement for EBT standards following generally 
     accepted operating rules based on commercial technology, the 
     need to permit interstate operation and law enforcement, and 
     the need to permit monitoring and investigations by law 
     enforcement officials. [Sec. 1034]
       Adds requirements that the Secretary's standards include 
     (1) measures to maximize security and (2) effective not later 
     than 2 years after enactment, measures to permit EBT systems 
     to differentiate among food items. [Sec. 1034]
       Deletes the requirement that EBT systems be cost neutral in 
     any one year. [Sec. 1034]
       Adds a requirement that regulations regarding the 
     replacement of benefits and liability for replacement under 
     an EBT system be similar to those in effect for a paper food 
     stamp issuance system. [Sec. 1034]
       Permits State agencies to collect a charge for replacing 
     EBT cards by reducing allotments. [Sec. 1034]
       Permits State agencies to require that EBT cards contain a 
     photograph of one or more household members and requires 
     that, if a State requires a photograph, it must establish 
     procedures to ensure that other appropriate members of the 
     household and authorized representatives may use the card. 
     [Sec. 1034]
       Declares it the sense of Congress that States operate EBT 
     systems that are compatible with other States' systems. [Sec. 
     1034]
       Regulation E. Provides that Regulation E will not apply to 
     any EBT system, established under, or administered by, State 
     or local governments, distributing needs-tested benefits. 
     [Sec. 1091]
       Anti-tying Restrictions. Provides that a company may not 
     sell or provide EBT services, or fix or vary the 
     consideration for such services, on the condition or 
     requirement that the customer obtain, or not obtain, some 
     additional point-of-sale service from the company or any 
     affiliate. Requires the Secretary to consult with the 
     Governors of the Federal Reserve before issuing regulations 
     to carry out this provision. [Sec. 1034]
     Senate amendment
       Rules for EBT Systems. Same provisions. [Sec. 1134]
       Regulation E. Same provision. [Sec. 2809]
       Also provides that Regulation E will not apply to food 
     stamp benefits delivered through an EBT system. [Sec. 1134]
       Anti-tying Restrictions. No provision.
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills, with a technical amendment, and adopts 
     the Senate provision providing that Regulation E will not 
     apply to food stamp benefits. The conferees intend that 
     regulations issued by the Secretary regarding the replacement 
     of benefits and liability for replacement of benefits under 
     an EBT system will not require greater replacement of 
     benefits or impose greater liability than those regulations 
     in effect for a paper-based food stamp issuance system. [Sec. 
     825 and sec. 891]
       The conference agreement also adopts the House provision 
     applying anti-tying restrictions of the Bank Holding Company 
     Act Amendments of 1970 to EBT services offered by nonbanks. 
     The conferees intend that, in applying the anti-tying 
     restrictions to nonbanks, the Secretary implement the anti-
     tying provision consistent with the anti-tying restrictions 
     that apply to banks. [Sec. 825]


                     27. VALUE OF MINIMUM ALLOTMENT

      Present law
       The minimum monthly allotment for 1- and 2-person 
     households is set at $10. It is indexed for inflation and 
     rounded to the nearest $5. [Sec. 8(a)]
     House bill
       Deletes the requirement for inflation indexing of the 
     minimum allotment. [Sec. 1035]
     Senate amendment
       Same provision. [Sec. 1135]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 826]


                    28. BENEFITS ON RECERTIFICATION

     Present law
       Recipient households not fulfilling eligibility 
     recertification requirements in the

[[Page H8950]]

     last month of their certification period are allowed a 1-
     month ``grace period'' in which to fulfill the requirements 
     before their benefits are pro-rated (reduced) to reflect the 
     delay. [Sec. 8(c)]
     House bill
       For those who do not complete all eligibility 
     recertification requirements in the last month of their 
     certification period, but are then determined to be eligible 
     after their certification period has expired, requires that 
     they receive reduced benefits in the first month of their new 
     certification period (i.e., their benefits would be pro-rated 
     to the date they met the requirements and were judged 
     eligible). [Sec. 1036]
     Senate amendment
       Same provision. [Sec. 1136]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 827]


        29. OPTIONAL COMBINED ALLOTMENT FOR EXPEDITED HOUSEHOLDS

     Present law
       For households applying after the 15th of the month, States 
     may provide an allotment that is the aggregate of the initial 
     (pro-rated) allotment and the first regular allotment. 
     However, combined allotments must be provided to households 
     applying after the 15th who are entitled to expedited 
     service. [Sec. 8(c)]
     House bill
       Makes provision of combined allotments a State option both 
     for regular and expedited service applicants. [Sec. 1037]
     Senate amendment
       Same provision. [Sec. 1137]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 828]


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

     Present law
       Households penalized for intentional failure to comply with 
     a Federal, State, or local welfare program may not, for the 
     duration of the penalty, receive an increased food stamp 
     allotment because their welfare income has been reduced. 
     [Sec. 8(d)]
     House bill
       Bars increased food stamp allotments when the benefits of a 
     household are reduced under a Federal, State, or local means-
     tested public assistance program for failure to perform a 
     required action. Permits States also to reduce a household's 
     food stamp allotment by up to 25 percent. If the allotment is 
     reduced for failure to perform an action under a family 
     assistance block grant (TANF) program, the State may use the 
     rules and procedures of that program to reduce the food stamp 
     allotment. [Sec. 1038]
     Senate amendment
       Same provision. [Sec. 1138]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 829]


           31. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN CENTERS

     Present law
       Residential substance abuse centers may be designated as 
     recipients' authorized representatives, and benefits 
     generally are provided to the center.
     House bill
       Permits State agencies to divide a month's food stamp 
     benefits between the center and an individual who leaves the 
     center and permits States to require center residents to 
     designate centers as authorized representatives. [Sec. 1039]
     Senate amendment
       Same provisions. [Sec. 1139]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 830]


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

     Present law
       No provisions.
     House bill
       Provides that no food concerns (of a type determined by the 
     Secretary based on factors including size, location, and 
     types of items sold) be approved for participation unless 
     visited by an Agriculture Department employee (or, whenever 
     possible, a State or local government official designated by 
     the Secretary). [Sec. 1040]
     Senate amendment
       Same provision. [Sec. 1140]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 831]


            33. authority to establish authorization periods

     Present law
       No provisions.
     House bill
       Requires the Secretary to establish specific time periods 
     during which retail food stores' and wholesale food concerns' 
     authorization to accept and redeem food stamp benefits will 
     be valid. [Sec. 1041]
     Senate amendment
       Same provision. [Sec. 1141]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 832]


      34. information for verifying eligibility for authorization

     Present law
       No provisions.
     House bill
       Permits the Secretary to require that retailers and 
     wholesalers seeking approval to accept and redeem food stamp 
     benefits submit relevant income and sales tax filing 
     documents. Permits regulations requiring retailers and 
     wholesalers to provide written authorization for the 
     Secretary to verify all relevant tax filings and to obtain 
     corroborating documentation from other sources in order to 
     verify the accuracy of information provided by the retailer/
     wholesaler. [Sec. 1042]
     Senate amendment
       Same provision. [Sec. 1142]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 833]


 35. waiting period for stores that fail to meet authorization criteria

     Present law
       No provisions.
     House bill
       Provides that retailers and wholesalers that have failed to 
     be approved for participation may not submit a new 
     application to participate for at least 6 months. The 
     Secretary may establish a longer period (including permanent 
     disqualification) that reflects the severity of the basis of 
     the denial. [Sec. 1043]
     Senate amendment
       Same provision. [Sec. 1143]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 834]


                  36. operation of food stamp offices

     Present law
       State Plans. States must:
       allow households contacting a food stamp office in person 
     during office hours to make an oral/written request for aid 
     and receive and file an application on the same day;
       use a simplified, uniform, federally designed application, 
     unless a waiver is approved;
       include certain, specific information in applications;
       waive in-person interviews under certain circumstances and 
     use telephone interviews or home visits instead;
       provide for telephone contact and mail application by 
     households with transportation or similar difficulties;
       require an adult representative of the household to certify 
     as to household members' citizenship/alien status;
       assist households in obtaining verification and completing 
     applications;
       not require additional verification of currently verified 
     information (unless there is reason to believe that the 
     information is inaccurate, incomplete, or inconsistent);
       not deny an application solely because a nonhousehold 
     member fails to cooperate;
       process applications if the household meets cooperation 
     requirements; provide households with a statement of 
     reporting responsibilities at certification and 
     recertification;
       provide a toll-free or local telephone number at which 
     households can reach State agency personnel;
       display and make available nutrition information; and
       use mail issuance in rural areas where low-income 
     households face substantial difficulties in obtaining 
     transportation. [Sec. 11(e) (2), (14), & (25)]
       Application and Denial Procedures. A single interview for 
     determining AFDC and food stamp benefits is required. Food 
     stamp applications generally are required to be contained in 
     public assistance applications, and applications and 
     information about how to apply for food stamps must be 
     provided local assistance applicants. Applicants (including 
     those who have recently lost or been denied public 
     assistance) must be certified eligible for food stamps based 
     on their public assistance casefile (to the extent it is 
     reasonably verified). No household may be terminated from or 
     denied food stamps solely on the basis of termination/denial 
     of other public assistance without a separate food stamp 
     determination. [Sec. 11(i)]
     House bill
       State Plans. Replaces noted existing State plan 
     requirements with requirements that the State:
       establish procedures governing the operation of food stamp 
     offices that it determines best serve households in the 
     State, including those with special needs (such as households 
     with elderly or disabled members, those in rural areas, the 
     homeless, households residing on reservations, and households 
     speaking a language other than English);
       provide timely, accurate, and fair service to applicants 
     and participants;
       permit applicants to apply and participate on the same day 
     they first contact a food stamp office during office hours;

[[Page H8951]]

       consider an application filed on the date the applicant 
     submits an application with the applicant's name, address, 
     and signature;
       require that an adult representative certify as to the 
     truth of the information on the application and citizenship/
     alien status; and
       have a method for certifying homeless households. [Sec. 
     1044]
       Permits States to establish operating procedures that vary 
     for local food stamp offices. [Sec. 1044]
       Stipulates that the signature of a single adult will be 
     sufficient to comply with any provision of Federal law 
     requiring applicant signatures. [Sec. 1044]
       Makes clear that nothing in the Food Stamp Act prohibits 
     electronic storage of application and other information. 
     [Sec. 1044]
       Application and Denial Procedures. Deletes noted existing 
     requirements for single interviews, applications, and food 
     stamp determinations based on public assistance information. 
     Permits disqualification for food stamps based on another 
     public assistance program's disqualification for failure to 
     comply with its rules or regulations. [Sec. 1044]
     Senate amendment
       State Plans. Same provisions. [Sec. 1144]
       Application and Denial Procedures. Same provisions. [Sec. 
     1144]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 835]


               37. STATE EMPLOYEE AND TRAINING STANDARDS

     Present law
       States must employ agency personnel responsible for food 
     stamp certifications in accordance with current Federal 
     ``merit system'' standards. States must provide continuing, 
     comprehensive training for all certification personnel. 
     States may undertake intensive training of personnel to 
     ensure they are qualified for certifying farm households. 
     States may provide or contract for the provision of training 
     and assistance to persons working with volunteer or nonprofit 
     organizations that provide outreach and eligibility 
     screening. [Sec. 11(e)(6)]
     House bill
       Deletes training provisions. [Sec. 1045]
     Senate amendment
       Same provision. [Sec. 1145]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 836]


              38. EXCHANGE OF LAW ENFORCEMENT INFORMATION

     Present law
       No provisions.
     House bill
       Requires State food stamp agencies to make available to law 
     enforcement officers the address, social security number, and 
     a photograph (when available) of a food stamp recipient if 
     the officer furnishes the recipient's name and notifies the 
     agency that the individual is fleeing to avoid prosecution, 
     custody, or confinement for a felony, is violating a 
     condition of parole or probation, or has information 
     necessary for the officer to conduct an official duty related 
     to a felony/parole violation. [Sec. 1046]
     Senate amendment
       Same provision. [Sec. 1146]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 837]


                      39. EXPEDITED COUPON SERVICE

     Present law
       States must provide expedited benefits to applicant 
     households that (1) have gross income under $150 a month (or 
     are ``destitute'' migrant or seasonal farmworker households) 
     and have liquid resources of no more than $100, (2) are 
     homeless, or (3) have combined gross income and liquid 
     resources less than the household's monthly shelter expenses. 
     Expedited service means providing an allotment no later than 
     5 days after application. [Sec. 11(e)(9)]
     House bill
       Deletes noted requirements to provide expedited service to 
     the homeless and those with shelter expenses in excess of 
     their income/resources. Lengthens the period in which 
     expedited benefits must be provided to 7 days. [Sec. 1047]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the House provisions with 
     an amendment to retain the requirement for expedited service 
     to those with income and liquid resources less than their 
     monthly shelter expenses. [Sec. 838]


                 40. WITHDRAWING FAIR HEARING REQUESTS

     Present law
       No provisions.
     House bill
       At State option, permits households to withdraw fair 
     hearing requests orally or in writing. If it is an oral 
     request, the State must provide written notice confirming the 
     request and providing the household with another chance to 
     request a fair hearing. [Sec. 1048]
     Senate amendment
       Same provision. [Sec. 1147]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 839]


  41. INCOME, ELIGIBILITY, AND IMMIGRATION STATUS VERIFICATION SYSTEMS

     Present law
       States must use the ``income and eligibility verification 
     systems'' established under section 1137 of the Social 
     Security Act to assist in verifying household circumstances; 
     this includes a system for verifying financial circumstances 
     (IEVS) and a system for verifying alien status (SAVE). [Sec. 
     11(e)(19)]
     House bill
       Makes use of IEVS and SAVE optional with the States. [Sec. 
     1049]
     Senate amendment
       Same provision. [Sec. 1148]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 840]


 42. DISQUALIFICATION OF RETAILERS WHO INTENTIONALLY SUBMIT FALSIFIED 
                              APPLICATIONS

     Present law
       No provisions.
     House bill
       Retailers/wholesalers who knowingly submit an application 
     to accept and redeem food stamp benefits that contains false 
     information about a substantive matter must be disqualified 
     for a reasonable period of time to be determined by the 
     Secretary (including permanent disqualification). [Sec. 1050]
     Senate amendment
       Same provision. [Sec. 1149]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 842]


 43. DISQUALIFICATION OF RETAILERS WHO ARE DISQUALIFIED UNDER THE WIC 
                                PROGRAM

     Present law
       No provisions.
     House bill
       Requires the Secretary to issue regulations providing 
     criteria for disqualifying from food stamp program 
     participation retailers/wholesalers disqualified from the WIC 
     program. Disqualification must be for the same length of 
     time, may begin at a later date, and is not subject to 
     separate food stamp administrative/judicial review 
     provisions. [Sec. 1051]
     Senate amendment
       Same provisions. [Sec. 1150]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 843]


                    44. COLLECTION OF OVERISSUANCES

     Present law
       In the case of overissuances due to an intentional program 
     violation, households must agree to repayment by either a 
     reduction in future benefits or cash repayment; States also 
     are required to collect overissuances to these households 
     through other means such as tax refund or unemployment 
     compensation collections if other repayment is not 
     forthcoming (unless they demonstrate that the other means are 
     not cost effective). In cases of overissuance because of 
     inadvertent household error, States must collect the 
     overissuance through a reduction in future benefits, except 
     that households must be given 10 days notice to elect another 
     means and collections are limited to 10 percent of the 
     monthly allotment or $10 a month (whichever would result in 
     faster collection). Otherwise uncollected overissued 
     benefits, except those arising from State agency error, may 
     be recovered from Federal pay or pensions. [Sec. 13(b) & (d) 
     and sec. 11(e)(8)]
       States may retain 25 percent of ``nonfraud'' collections 
     not arising from State agency error and 50 percent of 
     ``fraud'' collections (increased from 10 percent and 25 
     percent on October 1, 1995). [Sec. 16(a)]
     House bill
       Replaces existing overissuance collection rules with 
     provisions requiring States to collect any overissuance by 
     reducing future benefits, withholding unemployment 
     compensation, recovering from Federal pay or income tax 
     refunds, or any other means--unless the State demonstrates 
     that all of the means are not cost effective. Limits benefit 
     reductions (absent intentional program violation) to the 
     greater of 10 percent of the monthly allotment or $10 a 
     month. Provides that States must collect overissued benefits 
     in accordance with State-established requirements for notice, 
     electing a means of payment, and setting a schedule for 
     payment. [Sec. 1052]
       Permits States to retain 25 percent of all collections 
     other than those arising from State agency error. [Sec. 1052]
     Senate amendment
       Same provision, except permits States to retain 20 percent 
     of nonfraud collections other than those arising from State 
     agency error and 35 percent of fraud collections. [Sec. 1151]
     Conference agreement
       The conference agreement adopts the Senate provisions. 
     [Sec. 844]


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

     Present law
       No provisions.

[[Page H8952]]

     House bill
       Requires that any permanent disqualification of a retailer/
     wholesaler be effective from the date of receipt of the 
     notice of disqualification. If the disqualification is 
     reversed through administrative or judicial review, the 
     Secretary is not liable for lost sales. [Sec. 1053]
     Senate amendment
       Same provision. [Sec. 1152]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 845]


        46. EXPANDED CRIMINAL FORFEITURE FOR CRIMINAL VIOLATIONS

     Present law
       ``Administrative forfeiture'' rules allow the Secretary to 
     subject property involved in a program violation to 
     forfeiture to the United States. [Sec. 15(g)]
     House bill
       Establishes ``criminal forfeiture'' rules. Requires courts, 
     in imposing sentence on those convicted of trafficking in 
     food stamps, to order that the person forfeit property to the 
     United States. Property subject to forfeiture would include 
     all property (real and personal) used in a transaction (or 
     attempted transaction) to commit (or facilitate the 
     commission of) a trafficking violation (other than a 
     misdemeanor); proceeds traceable to the violation also would 
     be subject to forfeiture. An owner's property interest would 
     not be subject to forfeiture if the owner establishes that 
     the violation was committed without the owner's knowledge or 
     consent.
       Requires that the proceeds from any sale of forfeited 
     property, and any money forfeited, be used to reimburse 
     Federal and State agencies for costs and, by the Secretary, 
     to carry out store monitoring activities. [Sec. 1054]
     Senate amendment
       Same provisions. [Sec. 1153]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 846]


                    47. LIMITATION OF FEDERAL MATCH

     Present law
       If a State opts to conduct informational (``outreach'') 
     activities for the food stamp program, the Federal government 
     shares half the cost. [Sec. 11(e)(1) and sec. 16(a)]
     House bill
       Terminates the Federal share for any ``recruitment 
     activities.'' [Sec. 1055]
     Senate amendment
       Same provision. [Sec. 1154]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 847]


                    48. STANDARDS FOR ADMINISTRATION

     Present law
       The Secretary is required to (1) establish standards for 
     efficient and effective administration of the program, 
     including standards for review of food stamp office hours to 
     ensure that employed individuals are adequately served and 
     (2) instruct States to submit reports on administrative 
     actions taken to meet the standards. [Sec. 16(b)]
     House bill
       Deletes the noted requirements relating to Federal 
     standards for efficient and effective administration. [Sec. 
     1056]
     Senate amendment
       Same provision. [Sec. 1155]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 848]


              49. WORK SUPPLEMENTATION OR SUPPORT PROGRAM

     Present law
       No provisions.
     House bill
       Establishes a new option for States to operate work 
     supplementation or support programs under which the value of 
     public assistance benefits are provided to employers who hire 
     recipients and, in turn, use the benefits to supplement the 
     wages paid the recipient. Work supplementation/support 
     programs would have to adhere to standards set by the 
     Secretary, be available for new employees only, and not 
     displace employment of those who are not supplemented/
     supported. The food stamp benefit value of the supplement 
     could not be considered income for other purposes. Opting 
     States would be required to provide a description of how 
     recipients in their program will, within a specific period of 
     time, be moved to unsubsidized employment. [Sec. 1057]
     Senate amendment
       Same provision. [Sec. 1156]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 849]


                          50. WAIVER AUTHORITY

     Present law
       The Secretary may waive Food Stamp Act requirements to the 
     degree necessary to conduct pilot/demonstration projects, 
     but, in general, no project may be implemented that would 
     lower or further restrict food stamp income/resource 
     eligibility standards or benefit levels. [Sec. 17(b)(1)]
     House bill
       Permits the Secretary to conduct pilot and demonstration 
     projects and waive Food Stamp Act requirements as long as the 
     project is consistent with the food stamp program goal of 
     providing food to increase the level of nutrition among low-
     income individuals. The Secretary is permitted to conduct 
     projects that will improve the administration of the program, 
     increase self-sufficiency of food stamp participants, test 
     innovative welfare reform strategies, or allow greater 
     conformity among public assistance programs than is otherwise 
     allowed under the Food Stamp Act. The Secretary is not 
     permitted to conduct projects that involve issuing benefits 
     in cash (beyond those approved at enactment), substantially 
     transfer program benefits to other public assistance 
     programs, or are not limited to specific time periods. [Sec. 
     1058]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the House provision with an 
     amendment. The Secretary is permitted to conduct pilot and 
     demonstration projects and waive Food Stamp Act requirements 
     to the extent necessary, with certain limitations and 
     conditions. Projects must be consistent with the food stamp 
     program goal of providing food assistance to raise levels of 
     nutrition among low-income individuals and must include an 
     evaluation.
       Permissible projects are those that will improve the 
     administration of the program, increase self-sufficiency of 
     food stamp participants, test innovative welfare reform 
     strategies, or allow greater conformity with the rules of 
     other programs than is otherwise allowed under the Food Stamp 
     Act. However, if the Secretary finds that a project would 
     require the reduction of benefits by more than 20 percent, 
     for more than 5 percent of households subject to the project 
     (not including those whose benefits are reduced because of a 
     failure to comply with work or other conduct requirements), 
     the project (1) cannot include more than 15 percent of the 
     State's food stamp population and (2) is limited to 5 years 
     (unless an extension is approved).
       The Secretary may not conduct a project that (1) involves 
     the payment of food stamp allotments in cash (unless the 
     project was approved prior to enactment), (2) has the effect 
     of substantially transferring food stamp funds to services or 
     benefits provided through another public assistance program, 
     (3) has the effect of using food stamp funds for any purpose 
     other than the purchase of food, program administration, or 
     an employment or training program, (4) has the effect of 
     granting or increasing shelter expense deductions to 
     households with either no out-of-pocket shelter expenses or 
     shelter expenses that represent a low percentage of their 
     income, (5) has the effect of absolving the State from acting 
     with reasonable promptness on substantial reported changes in 
     income or household size (other than those related to 
     deductions), (6) is not limited to a specific time period, or 
     (7) waives a simplified food stamp program provision in 
     carrying out a simplified program.
       The Secretary also may not conduct a project that is 
     inconsistent with certain Food Stamp Act requirements: (1) 
     the bar against providing benefits to those in institutions 
     (with certain exceptions), (2) the requirement to provide 
     assistance to all those eligible, so long as they have not 
     failed to comply with any food stamp or other program's work, 
     behavioral, or other conduct requirements, (3) the gross 
     income eligibility limit (130 percent of the Federal poverty 
     guidelines) for households without elderly or disabled 
     members, (4) the rule that no parent or caretaker of a 
     dependent child under age 6 will be subject to work/training 
     requirements [see item 17], (5) the rule that total hours of 
     work required in an employment/training or workfare program 
     be limited to the household's allotment divided by the 
     minimum wage, (6) the limit on the amount of employment and 
     training funding under the Food Stamp Act that can be used 
     for TANF recipients, (7) the requirement that the value of 
     food stamp benefits not be considered income or resources for 
     any other purpose, (8) application and application processing 
     requirements (including the rule that benefits must be 
     provided within 30 days, but not including expedited service 
     requirements), (9) Federal-State cost-sharing rules 
     (including those for computerization, employment and training 
     programs, and workfare), (10) ``quality control'' 
     requirements, and (11) the waiver limits set in law.
       [Sec. 850]


                        51. RESPONSE TO WAIVERS

     Present law
       No provisions.
     House bill
       Requires that, not later than 60 days after receiving a 
     demonstration project waiver request, the Secretary must (1) 
     approve the request, (2) deny it and explain any 
     modifications needed for approval, (3) deny it and explain 
     the grounds for denial, or (4) ask for clarification of the 
     request. If a response is not forthcoming in 60 days, the 
     waiver is considered approved. If a waiver is denied, the 
     Secretary must provide a copy of the request and the grounds 
     for denial to Congress. [Sec. 1059]

[[Page H8953]]

     Senate amendment
       Same provision. [Sec. 1157]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 851]


                   52. employment initiatives program

     Present law
       No provisions.
     House bill
       Provides a new option for a limited number of States (those 
     with not less than half of their food stamp households 
     receiving AFDC benefits in 1993) to issue food stamps in cash 
     to households participating in both the State's family 
     assistance block grant (TANF) program and food stamps, if a 
     member of the household has been working for at least 3 
     months and earns at least $350 a month in unsubsidized 
     employment. Households receiving cash payments may continue 
     to receive them after leaving a TANF program because of 
     increased earnings, and a household eligible to receive its 
     allotment in cash may opt for food stamps instead. States 
     opting for these cash payments must increase food stamp 
     benefits (and pay for the increase) to compensate for State/
     local sales taxes on food purchases and must provide a 
     written evaluation. [Sec. 1060]
     Senate amendment
       Same provisions. [Sec. 1158]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 852]


                          53. reauthorization

     Present law
       Food Stamp Act appropriations are authorized through fiscal 
     year 1997. [Sec. 18(a)]
     House bill
       Extends the Food Stamp Act authorization of appropriations 
     through fiscal year 2002. [Sec. 1061]
     Senate amendment
       Same provision. [Sec. 1159]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 853]


                   54. simplified food stamp program

     Present law
       No provision.
     House bill
       Permits States to determine food stamp benefits for 
     households receiving family assistance block grant (TANF) aid 
     using TANF rules and procedures, food stamp rules/procedures, 
     or a combination of both. States may operate a simplified 
     program statewide or in regions of the State and may 
     standardize deductions. However, States must comply with the 
     following food stamp rules:
       requirements governing issuance procedures;
       the requirement that benefits be calculated by subtracting 
     30 percent of household income (as determined by State-
     established, not Federal, rules under the simplified program 
     option) from the maximum food stamp benefit;
       the bar against counting food stamp benefits as income or 
     resources in other programs;
       requirements that State agencies assume responsibility for 
     eligibility certification and issuance of benefits and keep 
     records for inspection and audit;
       the bar against discrimination by reason of race, sex, 
     religious creed, national origin, or politics;
       requirements related to submission and approval of plans of 
     operation and administration of the food stamp program on 
     Indian reservations;
       limits on the use and disclosure of information about food 
     stamp households;
       requirements for notice to and fair hearings for aggrieved 
     households (or comparable requirements established by the 
     State);
       requirements for submission of reports and other 
     information required by the Secretary;
       the requirement to report illegal aliens to the INS;
       provisions for the use of certain Federal and State data 
     sources in verifying eligibility;
       requirements to ensure that households are not receiving 
     duplicate benefits; and
       requirements for the provision of social security numbers 
     as a condition of eligibility and for their use by State 
     agencies.
       Households may not receive benefits under a simplified 
     program unless the Secretary determines that any household 
     with income above 130 percent of the Federal poverty 
     guidelines is ineligible for the program.
       The Secretary must determine whether a simplified program 
     is increasing Federal costs above costs incurred in 
     operations for the fiscal year prior to implementation, 
     adjusted for changes in participation, the income of 
     participants not attributable to public assistance, and the 
     cost of the thrifty food plan. The determination is made for 
     each fiscal year, not later than 90 days after the end of the 
     year.
       If the Secretary determines that there has been a cost 
     increase, the State must be notified within 30 days. If a 
     State does not then submit or carry out a ``corrective 
     action'' plan approved by the Secretary to prevent increased 
     Federal costs, approval of the State's simplified program is 
     terminated, and the State is ineligible for further operation 
     of a simplified program.
       States opting for a simplified program must include in 
     their State plans the rules and procedures to be followed, 
     how they will address the needs of households with high 
     shelter costs, and a description of the method by which they 
     will carry out their quality control obligations. [Sec. 1062]
     Senate amendment
       Same provisions, except that the Senate amendment (1) 
     stipulates that only households in which ``all members'' 
     receive TANF benefits may receive benefits under a simplified 
     program and (2) requires that States opting for a simplified 
     program follow food stamp rules regarding providing benefits 
     within 30 days of application. Also provides that (1) the 
     Secretary will determine whether a simplified program is 
     increasing Federal costs, (2) States will not be required to 
     collect information on households not in the simplified 
     program in cost increase determinations, and (3) the 
     Secretary may approve ``alternative accounting periods'' in 
     making cost determinations. [Sec. 1160]
     Conference agreement
       The conference agreement adopts the House provision with an 
     amendment providing that: (1) only households in which all 
     members receive TANF benefits may receive benefits under a 
     simplified program, (2) the Secretary will determine whether 
     a simplified program is increasing Federal costs, (3) States 
     will not be required to collect information on households not 
     in the simplified program in cost increase determinations, 
     and (4) the Secretary may approve alternative accounting 
     periods in making cost determinations. In addition, the 
     conference agreement adopts an amendment that provides that a 
     simplified program may include households in which 1 or more 
     members are not TANF recipients, if approved by the 
     Secretary. The conferees encourage the Secretary to work with 
     States to test methods for applying a single set of rules and 
     procedures to households in which some, but not all, members 
     receive cash welfare benefits under State rules. [Sec. 854]


                 55. state food assistance block grant

     Present law
       No provision.
     House bill
       Establishes an optional food assistance block grant. States 
     that meet one of three conditions may elect to receive the 
     block grant in lieu of participating in the regular food 
     stamp program. The conditions are: (1) a statewide EBT 
     system, (2) a payment error rate of 6 percent or less, or (3) 
     if there is a payment error rate of higher than 6 percent, 
     payment to the Federal government of the benefit cost of the 
     difference. States electing a block grant would receive the 
     greater of: (1) the amount received for benefits in fiscal 
     year 1994 (or the 1992-1994 average) plus (2) the amount 
     received for administration in fiscal year 1994 (or the 1992-
     1994 average). States electing a block grant and then 
     terminating their option may not again elect a block grant.
       Block grant funding may only be used for food assistance to 
     needy persons and administrative costs for providing the 
     assistance--so long as not more than 6 percent of total funds 
     expended (other than State funds not otherwise required to be 
     spent) are used for administrative costs and limits on 
     carryover funds are followed. While States have control over 
     most features of their block grant program, certain rules 
     specified in law must be followed: provisions for notice and 
     hearing for those aggrieved; bars against receipt of benefits 
     in more than 1 jurisdiction, benefits for fleeing felons, and 
     benefit for aliens otherwise barred under Federal law; 
     privacy and nondiscrimination safeguards; and quality control 
     requirements of the Food Stamp Act. In addition, States 
     opting for a block grant would continue to be covered under 
     the Food Stamp Act's employment and training program 
     provisions (and receive separate funding for this) and would 
     be required to bar benefits to those not meeting food stamp 
     work requirements (including the new requirement). [Sec. 
     1063]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provision.


56. a study of the use of food stamps to purchase vitamins and minerals

     Present law
       No provision.
     House bill
       Requires the Secretary, in consultation with the National 
     Academy of Sciences and the Centers for Disease Control and 
     Prevention, to conduct a study of the use of food stamps to 
     purchase vitamins and minerals and report to the House 
     Committee on Agriculture not later than December 15, 1996. 
     [Sec. 1064]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the House provision with an 
     amendment requiring a report to both the Senate Committee on 
     Agriculture, Nutrition, and Forestry and the House Committee 
     on Agriculture not later than December 15, 1998. [Sec. 855]


                           57. investigations

     Present law
       No provision.

[[Page H8954]]

     House bill
       Requires that regulations provide criteria for the finding 
     of violations (and suspension/disqualification) of retailers 
     and wholesalers on the basis of evidence which may include 
     facts established through on-site investigations, 
     inconsistent redemption data, or evidence obtained through 
     EBT transaction reports. [Sec. 1065]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the House provision. [Sec. 
     841]


                      58. REPORT BY THE SECRETARY

     Present law
       No provision.
     House bill
       Permits the Secretary to report to the House Committee on 
     Agriculture (not later than January 1, 2000) on the effect of 
     the food stamp reforms in this act and the ability of State 
     and local governments to deal with people in poverty. [Sec. 
     1067]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the Senate provision.


                         59. DEFICIT REDUCTION

     Present law
       No provision.
     House bill
       Declares it the sense of the House Committee on Agriculture 
     that outlay reductions resulting from the food stamp title 
     not be taken into account under section 552 of the Balanced 
     Budget and Emergency Deficit Control Act. [Sec. 1068]
     Senate amendment
       No provision.
     Conference agreement
       The conference agreement adopts the House provision with a 
     technical amendment. [Sec. 856]

              Subtitle B--Commodity Distribution Programs


                             1. SHORT TITLE

     Present law
       The Emergency Food Assistance Act (EFAA), The Hunger 
     Prevention Act of 1988, The Charitable Assistance and Food 
     Bank Act of 1987, the Food, Agriculture, Conservation, and 
     Trade (FACT) Act of 1990.
     House bill
       Amends the EFAA and Section 110 of the Hunger Prevention 
     Act of 1988 to combine the Emergency Food Assistance Program 
     (TEFAP) and the soup kitchen/food bank program and create a 
     new TEFAP; repeals the expired food bank demonstration 
     project under the Charitable Assistance and Food Bank Act of 
     1987; and repeals a requirement for a previously completed 
     report on entitlement commodity processing under the FACT Act 
     of 1990. [Sec. 1071, 1072, 1073, & 1074]
     Senate amendment
       Same provisions. [Sec. 1171, 1172, 1173, & 1174]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 871-874]


                     2. ELIGIBLE RECIPIENT AGENCIES

     Present law
       Defines ``eligible recipient agencies'' and ``emergency 
     feeding organizations''. [Sec. 201A]
       Defines ``Additional commodities'', ``average monthly 
     number of unemployed persons'', ``poverty line'', ``Total 
     value of additional commodities'', Value of additional 
     commodities.'' [Sec. 214 of EFAA]
     House bill
       Incorporates into one section current law and regulatory 
     definitions of terms used in TEFAP and section 110 of the 
     Hunger Prevention Act. Definitions include ``eligible 
     recipient agencies'', as well as ``emergency feeding 
     organization,'' ``additional commodities'', ``average monthly 
     number of unemployed persons'', ``food bank'', ``food 
     pantry'', ``poverty line'', ``soup kitchen'', ``total value 
     of additional commodities'', and ``value of additional 
     commodities allocated to each State.'' [Sec. 1071]
     Senate amendment
       Same provisions. [Sec. 1171]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 871]


                   3. AVAILABILITY OF CCC COMMODITIES

     Present law
       Outlines conditions under which the Secretary is to donate 
     CCC commodities or other agricultural commodities, the 
     varieties of commodities to be made available; requires semi-
     annual report on types of commodities made available; 
     prohibits declines in dairy product donations, and requires 
     that emergency feeding organizations have the same access to 
     excess CCC commodities as other domestic food programs.
     House bill
       Maintains current law provisions. [Sec. 1071]
      Senate Amendment
       Same provisions. [Sec. 1171]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 871]


           4. AVAILABILITY OF CCC FLOUR, CORNMEAL, AND CHEESE

     Present law
       Provides for additional distribution in FY1988 of flour, 
     cheese, and cornmeal when excess amounts are available from 
     CCC holdings.
     House bill
       Strikes obsolete provision and moves definitions to a new 
     section of the Act (see item 2 above). Replaces Sec.202A with 
     new provisions governing State plans (See item 5 below). 
     [Sec. 1071]
     Senate amendment
       Same provisions. [Sec. 1171]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 871]


                             5. STATE PLAN

     Present law
       Requires Secretary to expedite distribution of commodities 
     to agencies designated by the Governor, or directly 
     distribute commodities to eligible recipient agencies engaged 
     in national commodity processing; allows States to give 
     priority for donations to existing food bank networks serving 
     low-income households. Requires States to expeditiously 
     distribute commodities to eligible recipient agencies, and to 
     encourage distribution to rural areas. Also requires 
     Secretary to distribute commodities only to agencies that 
     serve needy persons and set their own need criteria, with the 
     approval of the Secretary. [Sec.203B (a) and (c) of EFAA]
     House bill
       Requires States seeking commodities under the new EFA 
     program to submit a plan of operation and administration 
     every 4 years for approval by the Secretary and allows 
     amendment of the plan at any time.
       Requires that at a minimum the State receiving commodities 
     include in its plan: designation of responsible State agency; 
     plan of operation and administration to expeditiously 
     distribute commodities; standards of eligibility for 
     recipient agencies; individual and household eligibility 
     standards that require that they be needy and residing in the 
     geographic area served by the recipient agency. [Sec. 1071]
     Senate amendment
       Same provisions. [Sec. 1171]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 871]


                           6. ADVISORY BOARD

     Present law
       No provision.
     House bill
       Requires Secretary to encourage States to establish 
     advisory boards consisting of representatives of all 
     interested entities, public and private, in the distribution 
     of commodities. [Sec. 1071]
     Senate amendment
       Same provision. [Sec. 1171]
     Conference agreement
       The conference agreement adopts the provision that is 
     common to both bills. [Sec. 871]


      7. Authorization of Appropriations For Administrative Funds

     Present law
       Authorizes $50 million annually for fiscal year 1991-2002 
     for Secretary to make available to States for State and local 
     costs associated with the distribution of commodities. 
     Requires that funds be distributed on an advance basis in the 
     same proportion as commodities are distributed. Allows for 
     reallocation of unused funds among other States. Specifically 
     allows States to use funds to help with distribution of 
     commodities provided to soup kitchens and food banks under 
     section 110 of the Hunger Prevention Act.
     House bill
       Revises language regarding availability of funds to States 
     for State and local costs to require that such funds be used 
     ``to pay for the direct and indirect administrative costs of 
     the State related to processing, transporting, and 
     distributing [commodities] to eligible recipient agencies.'' 
     Drops separate reference to soup kitchen and food banks 
     because this program is incorporated into the new TEFAP. 
     [Sec. 1071]
     Senate amendment
       Same provisions. [Sec. 1171]
     Conference agreement
       The conference agreement adopts the provisions that are 
     common to both bills. [Sec. 871 ]


                  8. REQUIRED PURCHASES OF COMMODITIES

     Present law
       Authorizes $175 million for fiscal year 1991, $190 million 
     for FY 1992, and $200 million for each of fiscal years 1993 
     through 2002 for the Secretary to purchase, process and 
     distribute additional commodities to the extent that 
     appropriations are provided. Establishes a formula for 
     distribution of commodities to States whereby 60 percent of 
     commodities are allocated based on a State's share of persons 
     in households with incomes below the poverty level and 40 
     percent upon a State's share of unemployed persons, and 
     defines related terms.

[[Page H8955]]

     House bill
       Strikes provisions authorizing funds for commodity 
     purchases. Instead, amends the Food Stamp Act to add a new 
     section 28 requiring the Secretary to spend $300 million 
     annually for each of fiscal years 1997 through 2002 from 
     funds appropriated under the Food Stamp Act to buy 
     commodities for the new TEFAP; requires the Secretary to take 
     into account agricultural market conditions, and State, 
     agency, and recipient preferences when buying commodities 
     with these funds. Specifies that these commodities be 
     distributed under the current-law allocation formula. [Sec. 
     1071]
     Senate amendment
       Similar to House bill, except that $100 million is required 
     to be used from food stamp funds annually to buy commodities 
     for the new TEFAP. [Sec. ]
     Conference agreement
       The conference agreement adopts the Senate provision with a 
     technical amendment. [Sec. 871]

             Subtitle C--Electronic Benefit Transfer System

       See Item 26 of Subtitle A--Food Stamp Program for a 
     description of the conference agreement on this subtitle.

                        Title IX: Miscellaneous


                 1. Appropriation by State Legislatures

     Present law
       According to the National Conference of State Legislatures, 
     there are six States in which under court rulings of 
     interpretations of State constitutions, certain Federal funds 
     are controlled by the Executive branch rather than the State 
     legislature. (An example would be action on funds when the 
     legislature is out of session.) These States are Arizona, 
     Colorado, Connecticut, Delaware, New Mexico, and Oklahoma.
     House bill
       The proposal stipulates that funds from certain Federal 
     block grants to the States are to be expended in accordance 
     with the laws and procedures applicable to the expenditure of 
     the State's own resources (i.e., appropriated through the 
     State legislature in all States). This provision applies to 
     the following block grants: temporary assistance to needy 
     families block grant, the optional State food assistance 
     block grant, and the child care block grant. Thus, in the 
     States in which the Governor previously had exclusive control 
     over Federal block grant funds, the State legislatures now 
     would share control through the appropriations process. 
     However, States would continue to spend Federal funds in 
     accord with Federal law.
     Senate amendment
       Identical provision.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


     2. Sanctioning for Testing Positive for Controlled Substances

     Present law
       Eligibility and benefit status for most Federal welfare 
     programs are not affected by a recipient's use of illegal 
     drugs.
     House bill
       States are not prohibited by the Federal Government from 
     testing welfare recipients for use of controlled substances 
     nor for sanctioning welfare recipients who test positive for 
     the use of controlled substances.
     Senate amendment
       Identical provision.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment.


 3. Elimination of Housing Assistance with Respect to Fugitive Felons 
                   and Probation and Parole Violators

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       Ends eligibility for public housing and Section 8 housing 
     assistance of a person who is fleeing to avoid prosecution 
     after conviction for a crime, or attempt to commit a crime, 
     that is a felony where committed (or, in the case of New 
     Jersey, is a high misdemeanor), or who is violating a 
     condition of probation or parole. The amendment states that 
     the person's flight shall be cause for immediate termination 
     of their housing aid.
       Requires specified public housing agencies to 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 SSI 
     recipient, if the officer furnishes the public housing agency 
     with the person's name and notifies the agency that the 
     recipient is a fugitive felon (or in the case of New Jersey a 
     person fleeing because of a high misdemeanor) or a probation 
     or parole violator or that the person has information that is 
     necessary for the officer to conduct his official duties, and 
     the location or apprehension of the recipient is within the 
     officer's official duties.
     Conference agreement
       The conference agreement follows the Senate amendment.


           4. Sense of the Senate Regarding Enterprise Zones

     Present law
       No specific provision. However, as stated, the provisions 
     outlined in the Sense of the Senate language already can be 
     done under present law.
     House bill
       No provision.
     Senate amendment
       Outlines some findings related to urban centers and 
     empowerment zones and includes sense of the Senate language 
     that urges the 104th Congress to pass an enterprise zone bill 
     that provides Federal tax incentives to increase the 
     formation and expansion of small businesses and to promote 
     commercial revitalization; allows localities to request 
     waivers to accomplish the objectives of the enterprise zones; 
     encourages resident management of public housing and home 
     ownership of public housing; and authorizes pilot projects in 
     designated enterprise zones to expand the educational 
     opportunities for elementary and secondary school children.
     Conference agreement
       The conference agreement follows the House bill.


  5. Sense of the Senate Regarding the Inability of the Non-Custodial 
                      Parent to Pay Child Support

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       It is the Sense of the Senate that States should pursue 
     child support payments under all circumstances even if the 
     noncustodial parent is unemployed or his or her whereabouts 
     are unknown; and that States are encouraged to pursue pilot 
     programs in which the parents of a minor non-custodial parent 
     who refuses or is unable to pay child support contribute to 
     the child support owed.
     Conference agreement
       The conference agreement follows the Senate amendment.


     6. Establishing National Goals to Prevent Teenage Pregnancies

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       Requires the Secretary to establish and implement by 
     January 1, 1997, a strategy to: (1) prevent a 2 percent 
     increase in out-of-wedlock teenage pregnancies, and (2) 
     assure that at least 25 percent of U.S. communities have 
     teenage pregnancy programs in place. HHS is required to 
     report to Congress by June 30, 1998, on progress made toward 
     meeting these 2 goals.

                          Conference agreement

       The conference agreement generally follows the Senate 
     amendment, except a specified level of reduction is not 
     established.


  7. Sense of the Senate Regarding Enforcement of Statutory Rape Laws

     Present law
       No provision.
     House bill
       No provision.
     Senate amendment
       Includes language that states that it is the sense of the 
     Senate that States and local jurisdictions should 
     aggressively enforce statutory rape laws.
       Not later than January 1, 1997, the Attorney General shall 
     establish and implement a program that studies the linkage 
     between statutory rape and teenage pregnancy and educates 
     States and local criminal law enforcement officials on the 
     prevention and prosecution of statutory rape. The Attorney 
     General shall ensure the DOJ Violence Against Women 
     initiative addresses the issue of statutory rape.
     Conference agreement
       The conference agreement follows the Senate amendment.


     8. Provisions to Encourage Electronic Benefit Transfer Systems

     Present law
       In 1978, Congress passed the Electronic Fund Transfer Act 
     to provide a basic framework establishing the rights, 
     liabilities, and responsibilities of participants in 
     electronic fund transfer systems and required the Federal 
     Reserve Board to develop implementing regulations, which 
     generally are referred to as Regulation E.
     House bill
       See food stamp title, which exempts from Regulation E any 
     food stamp electronic benefit transfers.
     Senate amendment
       Exempts from Regulation E requirements any electronic 
     benefit transfer program (distributing needs-tested benefits) 
     established under State or local law or administered by a 
     State or local government.
     Conference agreement
       The conference agreement follows the Senate amendment.


  9. Reduction of Block Grants to States for Social Services; Use of 
                                Vouchers

     Present law
       The Social Services Block Grant (Title XX) provides funds 
     to States in order to provide a wide variety of social 
     services, including child care, family planning, protective 
     services for children and adults, services for children and 
     adults on foster care, and employment services. States have 
     wide discretion over how they use Social Services Block

[[Page H8956]]

     Grant funds. States set their own eligibility requirements 
     and are allowed to transfer up to 10 percent of their 
     allotment to certain Federal health block grants, and for 
     low-income home energy assistance (LIHEAP). Funding for the 
     Social Services Block Grant is capped at $2.8 billion a year. 
     Funds are allocated among States according to the State's 
     share of its total population. No State matching funds are 
     required to receive Social Services Block Grant money.
     House bill
       For fiscal years 1997 through 2002, the Social Services 
     Block Grant is reduced by 10 percent.
     Senate amendment
       For fiscal years 1997 through 2002, the Social Services 
     Block Grant is reduced by 20 percent.
       Requires that States receiving Title XX funds to dedicate 1 
     percent to programs and services for minors to avoid out-of-
     wedlock pregnancies.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment regarding the reduction in funding for the 
     Social Services block grant, with the modification that the 
     reduction is 15 percent. The conference agreement follows the 
     House bill so that there is no special dedication of funds 
     for programs and services for minors. The agreement 
     specifically states that Title XX funds may be used to 
     provide assistance to families who have lost assistance 
     because of time limits on benefits.


                  10. Earned Income Credit Provisions

   A. Deny earned income credit to individuals not authorized to be 
                     employed in the United States

       (Note.--For additional discussion of this provision, refer 
     to Title IV: Restricting Welfare and Public Benefits for 
     Aliens, above.)
     Present law
       In general. Certain eligible low-income workers are 
     entitled to claim a refundable credit on their income tax 
     return. The amount of the credit an eligible individual may 
     claim depends upon whether the individual has one, more than 
     one, or no qualifying children and is determined by 
     multiplying the credit rate by the individual's 1 earned 
     income up to an earned income amount. The maximum amount of 
     the credit is the product of the credit rate and the earned 
     income amount. For individuals with earned income (or 
     adjusted gross income (AGI), if greater) in excess of the 
     beginning of the phaseout range, the maximum credit amount is 
     reduced by the phaseout rate multiplied by the amount of 
     earned income (or AGI, if greater) in excess of the beginning 
     of the phaseout range. For individuals with earned income (or 
     AGI, if greater) in excess of the end of the phaseout range, 
     no credit is allowed.
---------------------------------------------------------------------------
     \1\ In the case of a married individual who files a joint 
     return with his or her spouse, the income for purposes of 
     these tests is the combined income of the couple.
---------------------------------------------------------------------------
       The parameters for the credit depend upon the number of 
     qualifying children the individual claims. For 1996, the 
     parameters are given in the following table:

                                                                        
------------------------------------------------------------------------
                                         Two or       One         No    
                                          more    qualifying  qualifying
                                        children     child     children 
------------------------------------------------------------------------
Credit rate (percent)................      40.00       34.00        7.65
Earned income amount.................     $8,890      $6,330      $4,220
Maximum credit.......................     $3,556      $2,152        $323
Phaseout begins......................    $11,610     $11,610      $5,280
Phaseout rate (percent)..............      21.06       15.98        7.65
Phaseout ends........................    $28,495     $25,078      $9,500
------------------------------------------------------------------------

       For years after 1996, the credit rates and the phaseout 
     rates will be the same as in the preceding table. The earned 
     income amount and the beginning of the phaseout range are 
     indexed for inflation; because the end of the phaseout range 
     depends on those amounts as well as the phaseout rate and the 
     credit rate, the end of the phaseout range will also increase 
     if there is inflation.
       In order to claim the credit, an individual must either 
     have a qualifying child or meet other requirements. A 
     qualifying child must meet a relationship test, an age test, 
     an identification test, and a residence test. In order to 
     claim the credit without a qualifying child, an individual 
     must not be a dependent and must be over age 24 and under age 
     65.
       To satisfy the identification test, individuals must 
     include on their tax return the name and age of each 
     qualifying child. For returns filed with respect to tax year 
     1996, individuals must provide a taxpayer identification 
     number (TIN) for all qualifying children born on or before 
     November 30, 1996. For returns filed with respect to tax year 
     1997 and all subsequent years, individuals must provide TINs 
     for all qualifying children, regardless of their age. An 
     individual's TIN is generally that individual's social 
     security number.
       An individual with qualifying children may elect to receive 
     a portion of the credit on an advance basis by furnishing an 
     advance payment certificate to his or her employer. For such 
     an individual, the employer makes an advance payment of the 
     credit at the time wages are paid. The amount of advance 
     payment allowable in a taxable year is limited to 60 percent 
     of the maximum credit available to an individual with one 
     qualifying child.
       Mathematical or clerical errors. The Internal Revenue 
     Service may summarily assess additional tax due as a result 
     of a mathematical or clerical error without sending the 
     taxpayer a notice of deficiency and giving the taxpayer an 
     opportunity to petition the Tax Court. Where the IRS uses the 
     summary assessment procedure for mathematical or clerical 
     errors, the taxpayer must be given an explanation of the 
     asserted error and a period of 60 days to request that the 
     IRS abate its assessment. The IRS may not proceed to collect 
     the amount of the assessment until the taxpayer has agreed to 
     it or has allowed the 60-day period for objecting to expire. 
     If the taxpayer files a request for abatement of the 
     assessment specified in the notice, the IRS must abate the 
     assessment. Any reassessment of the abated amount is subject 
     to the ordinary deficiency procedures. The request for 
     abatement of the assessment is the only procedure a taxpayer 
     may use prior to paying the assessed amount in order to 
     contest an assessment arising out of a mathematical or 
     clerical error. Once the assessment is satisfied, however, 
     the taxpayer may file a claim for refund if he or she 
     believes the assessment was made in error.
     House bill
       Individuals are not eligible for the credit if they do not 
     include their taxpayer identification number (and, if 
     married, their spouse's taxpayer identification number) on 
     their tax return. Solely for these purposes and for purposes 
     of the present-law identification test for a qualifying 
     child, a taxpayer identification number is defined as a 
     social security number issued to an individual by the Social 
     Security Administration other than a number issued under 
     section 205(c)(2)(B)(i)(II) (or that portion of sec. 
     205(c)(2)(B)(i)(III) relating to it) of the Social Security 
     Act (regarding the issuance of a number to an individual 
     applying for or receiving Federally funded benefits).
       If an individual fails to provide a correct taxpayer 
     identification number, such omission will be treated as a 
     mathematical or clerical error. If an individual who claims 
     the credit with respect to net earnings from self-employment 
     fails to pay the proper amount of self-employment tax on such 
     net earnings, the failure will be treated as a mathematical 
     or clerical error for purposes of the amount of credit 
     allowed.
       Effective date. The provision is effective for taxable 
     years beginning after December 31, 1995.
     Senate amendment
       The provision in the Senate amendment is identical to that 
     in the House bill.
     Conference agreement
       The conference agreement follows the House bill and the 
     Senate amendment with a modification to the effective date. 
     The conference agreement is effective with respect to returns 
     the due date for which (without regard to extensions) is more 
     than 30 days after the date of enactment of this Act.

      B. Change disqualified income test for earned income credit

     Present law
       For taxable years beginning after December 31, 1995, an 
     individual is not eligible for the earned income credit if 
     the aggregate amount of ``disqualified income'' of the 
     taxpayer for the taxable year exceeds $2,350. This threshold 
     is not indexed. Disqualified income is the sum of:
       (1) interest (taxable and tax-exempt),
       (2) dividends, and
       (3) net rent and royalty income (if greater than zero).
     House bill
       No provision.
     Senate amendment
       For purposes of the disqualified income test for the earned 
     income credit, the following items are added to the 
     definition of disqualified income: capital gain net income 
     and net passive income (if greater than zero) that is not 
     self-employment income.
       The threshold above which an individual is not eligible for 
     the credit is reduced from $2,350 to $2,200, and the 
     threshold is indexed for inflation after 1996.
       Effective date. The provision generally is effective for 
     taxable years beginning after December 31, 1995. For 
     individuals who, as of June 26, 1996, had made an election to 
     receive the current-year credit on an advance basis, the 
     provision is effective for taxable years beginning after 
     December 31, 1996.
     Conference agreement
       The conference agreement follows the Senate amendment.

C. Modify definition of adjusted gross income used for phasing out the 
                          earned income credit

     Present law
       For taxpayers with earned income (or AGI, if greater) in 
     excess of the beginning of the phaseout range, the maximum 
     earned income credit amount is reduced by the phaseout rate 
     multiplied by the amount of earned income (or AGI, if 
     greater) in excess of the beginning of the phaseout range. 
     For taxpayers with earned income (or AGI, if greater) in 
     excess of the end of the phaseout range, no credit is 
     allowed.
     House bill
       No provision.
     Senate amendment
       The provision modifies the definition of AGI used for 
     phasing out the earned income credit by including certain 
     nontaxable income and by disregarding certain losses. The 
     nontaxable items included are:
       (1) tax-exempt interest, and

[[Page H8957]]

       (2) nontaxable distributions from pensions, annuities, and 
     individual retirement arrangements (but only if not rolled 
     over into similar vehicles during the applicable rollover 
     period).
       The losses disregarded are:
       (1) net capital losses (if greater than zero),
       (2) net losses from trusts and estates,
       (3) net losses from nonbusiness rents and royalties, and
       (4) net losses from businesses, computed separately with 
     respect to sole proprietorships (other than in farming), sole 
     proprietorships in farming, and other businesses.
       For purposes of item (4), above, amounts attributable to a 
     business that consists of the performance of services by the 
     taxpayer as an employee are not taken into account.
       Effective date. The provision generally is effective for 
     taxable years beginning after December 31, 1995. For 
     individuals who, as of June 26, 1996, had made an election to 
     receive the current-year credit on an advance basis, the 
     provision is effective for taxable years beginning after 
     December 31, 1996.
     Conference agreement
       The conference agreement modifies the definition of AGI 
     used for phasing out the earned income credit by disregarding 
     certain losses. The losses disregarded are:
       (1) net capital losses (if greater than zero),
       (2) net losses from trusts and estates,
       (3) net losses from nonbusiness rents and royalties, and
       (4) 50 percent of the net losses from businesses, computed 
     separately with respect to sole proprietorships (other than 
     in farming), sole proprietorships in farming, and other 
     businesses.
       For purposes of item (4), above, amounts attributable to a 
     business that consists of the performance of services by the 
     taxpayer as an employee are not taken into account.
       Effective date. Same as the Senate amendment provision.

     D. Suspend inflation adjustments for earned income credit for 
                individuals with no qualifying children

     Present law
       To claim the earned income credit, an individual must 
     either have a qualifying child or meet other requirements. In 
     order to claim a credit without a qualifying child, an 
     individual must not be a dependent and must be over age 24 
     and under age 65.
       The earned income amount and the beginning of the phaseout 
     range are indexed for inflation; because the end of the 
     phaseout range depends on these amounts as well as the 
     phaseout rate and the credit rate, the end of the phaseout 
     range will also increase if there is inflation.
     House bill
       No provision.
     Senate amendment
       In the case of individuals with no qualifying children 
     there will be no adjustment for inflation after 1996 to the 
     earned income amount or the beginning of the phaseout range.
       Effective date. The provision is effective for taxable 
     years beginning after December 31, 1996.
     Conference agreement
       The conference agreement follows the House bill (no 
     provision).


             11. Reductions in Federal Government Positions

                             A. Reductions

     Present law
       No provision
     House bill
       A covered activity is defined as one that the Department 
     must carry out under a provision of this Act or a provision 
     of Federal law that is amended or repealed by the Act. It 
     also requires the Secretaries of Agriculture, Education, 
     Labor, HHS, and Housing and Urban Development to report to 
     Congress by December 31, 1996 on the number of full-time 
     equivalent (FTE) positions required to carry out ``covered'' 
     activities before and after enactment of the amendment and to 
     reduce the number of employees by the difference in numbers. 
     The Comptroller General of the United States shall prepare 
     and submit to Congress by July 1, 1997, a report analyzing 
     the determinations made by each Secretary.
     Senate amendment
       Similar to House bill, except:
       requires the Secretaries to report the number of FTEs not 
     later than December 31, 1996 (rather than January 1, 1997);
       requires the Secretaries to prepare and submit a report of 
     changes not later than December 31, 1997 (rather than 
     December 31, 1996); and
       adjusts discretionary spending limits downward for fiscal 
     years 1997 and 1998 to account for savings achieved by this 
     provision. (This provision was deleted due to the Byrd Rule.)
     Conference agreement
       This provision was deleted due to the Byrd rule. For 
     additional discussion of related provisions, see Title I: 
     Block Grants for Temporary Assistance for Needy Families, 
     above.

                  B. Reductions in Federal Bureaucracy

     Present law
       No provision
     House bill
       The Department of Health and Human Services (HHS) reports 
     that 118 employees in the Office of Family Assistance (OFA) 
     work on AFDC and 209 (full-time equivalent positions) in 
     regional offices of the Administration on Children and 
     Families. The OFA employees include 30 who spend some time 
     interpreting AFDC/JOBS policy and participating with States 
     in State plan development.
     Senate amendment
       Similar to House bill. (This provision was deleted due to 
     the Byrd Rule.)
     Conference agreement
       This provision was deleted due to the Byrd rule. For 
     additional discussion of related provisions, see Title I: 
     Block Grants for Temporary Assistance for Needy Families, 
     above.

             C. Reducing Personnel in Washington, D.C. Area

     Present law
       No provision.
     House bill
       The Secretary is encouraged to reduce personnel in the 
     Washington, D.C. office (agency headquarters) before reducing 
     field personnel.
     Senate amendment
       Similar to House bill. (This provision was deleted due to 
     the Byrd Rule.)
     Conference agreement
       This provision was deleted due to the Byrd rule. For 
     additional discussion of related provisions, see Title I: 
     Block Grants for Temporary Assistance for Needy Families, 
     above.


                      12. Reform of Public Housing

   A. Fraud under Means-Tested Welfare and Public Assistance Programs

     Present law
       No provision.
     House bill
       If a person's means-tested benefits from a Federal, State, 
     or local welfare program are reduced because of an act of 
     fraud, their benefits from public or assisted housing may not 
     be increased in response to the income loss caused by the 
     penalty.
     Senate amendment
       Similar to House bill.
     Conference agreement
       The conference agreement follows the House bill.

 B. Failure to Comply with other Welfare and Public Assistance Programs

     Present law
       If a family's adjusted cash income declines--no matter what 
     the reason--its housing benefit is increased (that is, its 
     rental payment is decreased, by 30 cents per dollar). This 
     applies to cash income from any source, including means-
     tested benefit programs. However, the housing programs take 
     no account of noncash income. Thus, if food stamp benefits 
     decline, housing benefits are unaffected.
     House bill
       No provision.
     Senate amendment
       Provides that there be no reduction in public or assisted 
     housing rents in response to a tenant's reduced income 
     resulting from non-compliance with welfare or public 
     assistance program requirements; permits reduction where 
     State or local law limits the period during which benefits 
     may be provided.
     Conference agreement
       The conference agreement follows the House bill (no 
     provision).


                        13. Abstinence Education

     Present law
       The Maternal and Child Health (MCH) block grants (title V 
     of the SSA, 42 USC 701) provides grants to States and insular 
     areas to fund a broad range of preventive health and primary 
     care activities to improve the health status of mothers and 
     children, with a special emphasis on those with low income or 
     with limited availability of health services. Sec. 502 
     includes a set-aside program for projects of national or 
     regional significance. (The FY1995 appropriation for MCH was 
     $684 million.) See also: Title XX of the Public Health 
     Service Act establishes the Adolescent Family Life (AFL) 
     program to encourage adolescents to delay sexual activity and 
     to provide services to alleviate the problems surrounding 
     adolescent parenthood. One-third of all funding for AFL 
     program services go to projects that provide ``prevention 
     services.'' The purpose of the prevention component is to 
     find effective means within the context of the family of 
     reaching adolescents, both male and female, before they 
     become sexually active to maximize the guidance and support 
     of parents and other family members in promoting abstinence 
     from adolescent premarital sexual relations. (The FY1995 
     appropriation for AFL was $6.7 million.)
     House bill
       Increases the authorization level to $761 million for FY 96 
     and each subsequent fiscal year. Adds abstinence education to 
     the services to be provided. Defines abstinence education as 
     an educational or motivational program which:
       (A) teaches the gains to be realized by abstaining from 
     sexual activity;
       (B) teaches abstinence from sexual activity outside of 
     marriage as the expected standard for all school age 
     children;
       (C) teaches that abstinence is the only certain way to 
     avoid out-of-wedlock pregnancy, sexually transmitted 
     diseases, and other health problems;
       (D) teaches that a monogamous relationship in context of 
     marriage is expected standard of human sexual activity;

[[Page H8958]]

       (E) teaches that sexual activity outside of marriage is 
     likely to have harmful effects;
       (F) teaches that bearing children out-of-wedlock is likely 
     to have harmful consequences;
       (G) teaches young people how to avoid sexual advances and 
     how alcohol and drug use increases vulnerability to sexual 
     advances; and
       (H) teaches the importance of attaining self-sufficiency 
     before engaging in sexual activity.
     Senate amendment
       Amends the Maternal and Child Health (MCH) block grants 
     (title V of the SSA) to set aside $75 million to provide 
     abstinence education--defined as an educational or 
     motivational program that has abstaining from sexual activity 
     as its exclusive purpose--and to provide at the option of the 
     State mentoring, counseling and adult supervision to promote 
     abstinence with a focus on those groups most likely to bear 
     children out-of- wedlock. Also increases the authorization 
     level of MCH to $761 million. (This provision was deleted due 
     to the Byrd Rule.)
     Conference agreement
       The conference agreement follows the House bill with 
     modification that $50 million for each of fiscal years 1998-
     2002 is directly appropriated for this purpose.


                    14. Church of Christ, Scientist

     Present law
       Sections 1902(a) and 1908(e)(1) of the Social Security Act 
     (relating to Medicaid) reference the Church of Christ, 
     Scientist.
     House bill
       No provision.
     Senate amendment
       No provision.
     Conference agreement
       Changes Medicaid references in Social Security Act from 
     Church of Christ, Scientist, to the Commission for 
     Accreditation of Christian Science Nursing Organizations/
     Facilities, Inc.

     John R. Kasich,
     Bill Archer,
     William F. Goodling,
     Pat Roberts,
     Tom Bliley,
     E. Clay Shaw, Jr.,
     James Talent,
     Jim Nussle,
     Tim Hutchinson,
     Jim McCrery,
     Michael Bilirakis,
     Lamar Smith,
     Nancy L. Johnson,
     Dave Camp,
     Gary A. Franks,
     ``Duke'' Cunningham,
     Mike Castle,
     Bob Goodlatte,
                                Managers on the Part of the House.

     From the Committee on the Budget:
     Pete V. Domenici,
     D. Nickles,
     Phil Gramm,
     Jim Exon,
     From the Committee on Agriculture, Nutrition, and Forestry:
     Richard G. Lugar,
     Jesse Helms,
     Thad Cochran,
     Rick Santorum,
     From the Committee on Finance:
     William V. Roth, Jr.,
     John H. Chafee,
     Chuck Grassley,
     Orrin Hatch,
     Al Simpson,
     From the Committee on Labor and Human Resources:
     Nancy Landon Kassebaum,
     Managers on the Part of the Senate.

                          ____________________