    [House Report 104-725]
    [From the U.S. Government Publishing Office]

    104th Congress                                                   Report
                            HOUSE OF REPRESENTATIVES

     2d Session                                                     104-725
    _______________________________________________________________________

    PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996

                                   ----------

                               CONFERENCE REPORT

                                  to accompany

                                   H.R. 3734

                     July 30, 1996.--Ordered to be printed

     PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996

    104th Congress                                                   Report
                            HOUSE OF REPRESENTATIVES

     2d Session                                                     104-725
    _______________________________________________________________________

    PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996

                                   ----------

                               CONFERENCE REPORT

                                  to accompany

                                   H.R. 3734

                     July 30, 1996.--Ordered to be printed

    104th Congress                                                   Report
                            HOUSE OF REPRESENTATIVES

     2d Session                                                     104-725
    _______________________________________________________________________

    PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996

                                    _______

                     July 30, 1996.--Ordered to be printed

    _______________________________________________________________________

     Mr. Kasich, from the committee of conference, submitted the following

                               CONFERENCE REPORT

                            [To accompany H.R. 3734]

          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.
    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.
    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 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) \3/4\ 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 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--
                                ``(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 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.--
                ``(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 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
                                        ``(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 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 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 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 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.--
                ``(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
                    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 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
                                (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 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.
        (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''.
        (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 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 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), 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 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;
                                (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
                (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
            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 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.
                ``(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
                (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.''.
                (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 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) 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;
                        ``(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 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 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)(4)'';
                (3) in subsections (b) and (c)--
                        (A) by striking ``AFDC collections'' each
                    place it appears and inserting ``title IV-A
                    collections'', and
                        (B) by striking ``non-AFDC collections''
                    each place it appears and inserting ``non-title
                    IV-A collections''; and
                (4) in subsection (c), by striking ``combined AFDC/
            non-AFDC administrative costs'' both places it appears
            and inserting ``combined title IV-A/non-title IV-A
            administrative costs''.
        (c) Calculation of Paternity Establishment Percentage.--
                (1) Section 452(g)(1)(A) (42 U.S.C. 652(g)(1)(A))
            is amended by striking ``75'' and inserting ``90''.
                (2) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is
            amended--
                        (A) by redesignating subparagraphs (B)
                    through (E) as subparagraphs (C) through (F),
                    respectively, and by inserting after
                    subparagraph (A) the following new
                    subparagraph:
                ``(B) for a State with a paternity establishment
            percentage of not less than 75 percent but less than 90
            percent for such fiscal year, the paternity
            establishment percentage of the State for the
            immediately preceding fiscal year plus 2 percentage
            points;''; and
                        (B) by adding at the end the following new
                    flush sentence:
    ``In determining compliance under this section, a State may use
    as its paternity establishment percentage either the State's
    IV-D paternity establishment percentage (as defined in
    paragraph (2)(A)) or the State's statewide paternity
    establishment percentage (as defined in paragraph (2)(B)).''.
                (3) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is
            amended--
                        (A) in subparagraph (A)--
                                (i) in the matter preceding clause
                            (i)--
                                        (I) by striking ``paternity
                                    establishment percentage'' and
                                    inserting ``IV-D paternity
                                    establishment percentage''; and
                                        (II) by striking ``(or all
                                    States, as the case may be)'';
                                    and
                                (ii) by striking ``and'' at the
                            end; 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.
        ``(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:
                                ``(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:

    ``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 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)(4) of the Social
            Security Act (42 U.S.C. 608(a)(4)), assigns to a State
            the rights of the spouse or former spouse to receive
            support, the Secretary concerned may make the child
            support payments referred to in the preceding sentence
            to that State in amounts consistent with that
            assignment of rights.''.
                (3) Arrearages owed by members of the uniformed
            services.--Section 1408(d) of such title is amended by
            adding at the end the following new paragraph:
        ``(6) In the case of a court order for which effective
    service is made on the Secretary concerned on or after the date
    of the enactment of this paragraph and which provides for
    payments from the disposable retired pay of a member to satisfy
    the amount of child support set forth in the order, the
    authority provided in paragraph (1) to make payments from the
    disposable retired pay of a member to satisfy the amount of
    child support set forth in a court order shall apply to payment
    of any amount of child support arrearages set forth in that
    order as well as to amounts of child support that currently
    become due.''.
                (4) Payroll deductions.--The Secretary of Defense
            shall begin payroll deductions within 30 days after
            receiving notice of withholding, or for the 1st pay
            period that begins after such 30-day period.

    SEC. 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--
                                ``(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)(4)''.
        (b) Amendment to the Social Security Act.--Section 456(b)
    (42 U.S.C. 656(b)) is amended to read as follows:
        ``(b) Nondischargeability.--A debt (as defined in section
    101 of title 11 of the United States Code) owed under State law
    to a State (as defined in such section) or municipality (as
    defined in such section) that is in the nature of support and
    that is enforceable under this part is not released by a
    discharge in bankruptcy under title 11 of the United States
    Code.''.
        (c) Application of Amendments.--The amendments made by this
    section shall apply only with respect to cases commenced under
    title 11 of the United States Code after the date of the
    enactment of this Act.

    SEC. 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 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 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 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:
                (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:

               ``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.
                (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
    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 than 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
                    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 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'';
                (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 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. 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).
                (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 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 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''.

    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
                                        ``(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 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.
                        ``(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 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.--
                ``(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 shall, within a
            specific period of time, be moved from supplemented or
            supported employment to employment that is not
            supplemented or supported.
                ``(6) Displacement.--A work supplementation or
            support program shall not displace the employment of
            individuals who are not supplemented or supported.''.

    SEC. 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; andn
                                        ``(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 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. 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.
                        ``(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
                        ``(B) 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 offenses; 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 offenses, 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 offenses.

    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:
        ``(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.
        ``(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 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 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 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 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 thereafter50..........................................

          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 thereafter90.........................................
    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
        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 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 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 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 4 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 5 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 2 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 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.)
    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 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.
    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).
    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.

        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).

      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 or 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.
    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.

    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 years 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.
    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 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.
          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 than 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
    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.
          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.
          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 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 1 percent nor more than 2 percent for the first
    failure to comply; by not less than 2 percent nor more than 3
    percent for the second consecutive failure to comply; and by
    not less than 3 percent nor more than 5 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.

                    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.

          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 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 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.

         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 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 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 Reapplication. 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.
          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.
    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.

                               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 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.
          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 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).
    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 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 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. 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 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 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)]
    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 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 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)]
    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 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 weatherization assistance are
    disregarded as energy assistance (although weatherization
    payments could otherwise be disregarded as lump-sum payments,
    vendor payments, or reimbursements). [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]

        [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 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'' (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 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 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;
                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.
    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]
    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.
    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.
    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 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
                (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, DC 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;
                (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.