[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.


                                
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