[House Report 104-77]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     104-77
_______________________________________________________________________


 
            FOOD STAMP REFORM AND COMMODITY DISTRIBUTION ACT

                                _______


 March 14, 1995.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

_______________________________________________________________________


Mr. Roberts, from the Committee on Agriculture, submitted the following

                              R E P O R T

                             together with

                     MINORITY AND ADDITIONAL VIEWS

                        [To accompany H.R. 1135]

      [Including cost estimate of the Congressional Budget Office]
    The Committee on Agriculture, to whom was referred the bill 
(H.R. 1135), to improve the Commodity Distribution Programs of 
the Department of Agriculture, to Reform and Simplify the Food 
Stamp Program, and for other purposes, having considered the 
same, report favorably thereon with an amendment and recommend 
that the bill as amended do pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:
SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Food Stamp Reform and Commodity 
Distribution Act''.

               TITLE I--COMMODITY DISTRIBUTION PROVISIONS

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Commodity Distribution Act of 
1995''.

SEC. 102. AVAILABILITY OF COMMODITIES.

    (a) Notwithstanding any other provision of law, the Secretary of 
Agriculture (hereinafter in this title referred to as the 
``Secretary'') is authorized during fiscal years 1996 through 2000 to 
purchase a variety of nutritious and useful commodities and distribute 
such commodities to the States for distribution in accordance with this 
title.
    (b) In addition to the commodities described in subsection (a), the 
Secretary may expend funds made available to carry out the section 32 
of the Act of August 24, 1935 (7 U.S.C. 612c), which are not expended 
or needed to carry out such sections, to purchase, process, and 
distribute commodities of the types customarily purchased under such 
section to the States for distribution in accordance with this title.
    (c) In addition to the commodities described in subsections (a) and 
(b), agricultural commodities and the products thereof made available 
under clause (2) of the second sentence of section 32 of the Act of 
August 24, 1935 (7 U.S.C. 612c), may be made available by the Secretary 
to the States for distribution in accordance with this title.
    (d) In addition to the commodities described in subsections (a), 
(b), and (c), commodities acquired by the Commodity Credit Corporation 
that the Secretary determines, in the discretion of the Secretary, are 
in excess of quantities need to--
          (1) carry out other domestic donation programs;
          (2) meet other domestic obligations;
          (3) meet international market development and food aid 
        commitments; and
          (4) carry out the farm price and income stabilization 
        purposes of the Agricultural Adjustment Act of 1938, the 
        Agricultural Act of 1949, and the Commodity Credit Corporation 
        Charter Act;
shall be made available by the Secretary, without charge or credit for 
such commodities, to the States for distribution in accordance with 
this title.
    (e) During each fiscal year, the types, varieties, and amounts of 
commodities to be purchased under this title shall be determined by the 
Secretary. In purchasing such commodities, except those commodities 
purchased pursuant to section 110, the Secretary shall, to the extent 
practicable and appropriate, make purchases based on--
          (1) agricultural market conditions;
          (2) the preferences and needs of States and distributing 
        agencies; and
          (3) the preferences of the recipients.

SEC. 103. STATE, LOCAL AND PRIVATE SUPPLEMENTATION OF COMMODITIES.
    (a) The Secretary shall establish procedures under which State and 
local agencies, recipient agencies, or any other entity or person may 
supplement the commodities distributed under this title for use by 
recipient agencies with nutritious and wholesome commodities that such 
entities or persons donate for distribution, in all or part of the 
State, in addition to the commodities otherwise made available under 
this title.
    (b) States and eligible recipient agencies may use--
          (1) the funds appropriated for administrative cost under 
        section 109(b);
          (2) equipment, structures, vehicles, and all other facilities 
        involved in the storage, handling, or distribution of 
        commodities made available under this title; and
          (3) the personnel, both paid or volunteer, involved in such 
        storage, handling, or distribution;
to store, handle or distribute commodities donated for use under 
subsection (a).
    (c) States and recipient agencies shall continue, to the maximum 
extent practical, to use volunteer workers, and commodities and other 
foodstuffs donated by charitable and other organizations, in the 
distribution of commodities under this title.

SEC. 104. STATE PLAN.

    (a) A State seeking to receive commodities under this title shall 
submit a plan of operation and administration every four years to the 
Secretary for approval. The plan may be amended at any time, with the 
approval of the Secretary.
    (b) The State plan, at a minimum, shall--
          (1) designate the State agency responsible for distributing 
        the commodities received under this title;
          (2) set forth a plan of operation and administration to 
        expeditiously distribute commodities under this title in 
        quantities requested to eligible recipient agencies in 
        accordance with section 106 and 110;
          (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 at minimum shall 
        require--
                  (i) individuals or households to be comprised of 
                needy persons; and
                  (ii) individual or household members to be residing 
                in the geographic location served by the distributing 
                agency at the time of application for assistance.
    (c) The Secretary shall encourage each State receiving commodities 
under this title to establish a State advisory board consisting of 
representatives of all interested entities, both public and private, in 
the distribution of commodities received under this title in the State.
    (d) A State agency receiving commodities under this title may--
          (1)(A) enter into cooperative agreements with State agencies 
        of other States to jointly provide commodities received under 
        this title to eligible recipient agencies that serve needy 
        persons in a single geographical area which includes such 
        States; or
          (B) transfer commodities received under this title to any 
        such eligible recipient agency in the other State under such 
        agreement; and
          (2) advise the Secretary of an agreement entered into under 
        this subsection and the transfer of commodities made pursuant 
        to such agreement.

SEC. 105. ALLOCATION OF COMMODITIES TO STATES.

    (a) In each fiscal year, except for those commodities purchased 
under section 110, the Secretary shall allocate the commodities 
distributed under this title as follows:
          (1) 60 percent of the such total value of commodities shall 
        be allocated in a manner such that the value of commodities 
        allocated to each State bears the same ratio to 60 percent of 
        such total value as the number of persons in households within 
        the State having incomes below the poverty line bears to the 
        total number of persons in households within all States having 
        incomes below such poverty line. Each State shall receive the 
        value of commodities allocated under this paragraph.
          (2) 40 percent of such total value of commodities shall be 
        allocated in a manner such that the value of commodities 
        allocated to each State bears the same ratio to 40 percent of 
        such total value as the average monthly number of unemployed 
        persons within the State bears to the average monthly number of 
        unemployed persons within all States during the same fiscal 
        year. Each State shall receive the value of commodities 
        allocated to the State under this paragraph.
    (b)(1) The Secretary shall notify each State of the amount of 
commodities that such State is allotted to receive under subsection(a) 
or this subsection, if applicable. Each State shall promptly notify the 
Secretary if such State determines that it will not accept any or all 
of the commodities made available under such allocation. On such a 
notification by a State, the Secretary shall reallocate and distribute 
such commodities as the Secretary deems appropriate and equitable. The 
Secretary shall further establish procedures to permit States to 
decline to receive portions of such allocation during each fiscal year 
as the State determines is appropriate and the Secretary shall 
reallocate and distribute such allocation as the Secretary deems 
appropriate and equitable.
    (2) In the event of any drought, flood, hurricane, or other natural 
disaster affecting substantial numbers of persons in a State, county, 
or parish, the Secretary may request that States unaffected by such a 
disaster consider assisting affected States by allowing the Secretary 
to reallocate commodities from such unaffected State to States 
containing areas adversely affected by the disaster.
    (c) Purchases of commodities under this title shall be made by the 
Secretary at such times and under such conditions as the Secretary 
determines appropriate within each fiscal year. All commodities so 
purchased for each such fiscal year shall be delivered at reasonable 
intervals to States based on the allocations and reallocations made 
under subsections (a) and (b), and or carry out section 110, not later 
than December 31 of the following year.

SEC. 106. PRIORITY SYSTEM FOR STATE DISTRIBUTION OF COMMODITIES.

    (a) In distributing the commodities allocated under subsections (a) 
and (b) of section 105, the State agency, under procedures determined 
by the State agency, shall offer, or otherwise make available, its full 
allocation of commodities for distribution to emergency feeding 
organizations.
    (b) If the State agency determines that the State will not exhaust 
the commodities allocated under subsections (a) and (b) of section 105 
through distribution to organizations referred to in subsection (a), 
its remaining allocation of commodities shall be distributed to 
charitable institutions described in section 113(3) not receiving 
commodities under subsection (a).
    (c) If the State agency determines that the State will not exhaust 
the commodities allocated under subsections (a) and (b) of section 105 
through distribution to organizations referred to in subsections (a) 
and (b), its remaining allocation of commodities shall be distributed 
to any eligible recipient agency not receiving commodities under 
subsections (a) and (b).

SEC. 107. INITIAL PROCESSING COSTS.

    The Secretary may use funds of the Commodity Credit Corporation to 
pay the costs of initial processing and packaging of commodities to be 
distributed under this title into forms and in quantities suitable, as 
determined by the Secretary, for use by the individual households or 
eligible recipient agencies, as applicable. The Secretary may pay such 
costs in the form of Corporation-owned commodities equal in value to 
such costs. The Secretary shall ensure that any such payments in kind 
will not displace commercial sales of such commodities.

SEC. 108. ASSURANCES; ANTICIPATED USE.

    (a) The Secretary shall take such precautions as the Secretary 
deems necessary to ensure that commodities made available under this 
title will not displace commercial sales of such commodities or the 
products thereof. The Secretary shall submit to the Committee on 
Agriculture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate by December 31, 
1997, and not less than every two years thereafter, a report as to 
whether and to what extent such displacements or substitutions are 
occurring.
    (b) The Secretary shall determine that commodities provided under 
this title shall be purchased and distributed only in quantities that 
can be consumed without waste. No eligible recipient agency may receive 
commodities under this title in excess of anticipated use, based on 
inventory records and controls, or in excess of its ability to accept 
and store such commodities.

SEC. 109. AUTHORIZATION OF APPROPRIATIONS.

    (a) Purchase of Commodities.--To carry out this title, there are 
authorized to be appropriated $260,000,000 for each of the fiscal years 
1996 through 2000 to purchase, process, and distribute commodities to 
the States in accordance with this title.
    (b) Administrative Funds.--(1) There are authorized to be 
appropriated $40,000,000 for each of the fiscal years 1996 through 2000 
for the Secretary to make available to the States for State and local 
payments for costs associated with the distribution of commodities by 
eligible recipient agencies under this title, excluding costs 
associated with the distribution of those commodities distributed under 
section 110. Funds appropriated under this paragraph for any fiscal 
year shall be allocated to the States on an advance basis dividing such 
funds among the States in the same proportions as the commodities 
distributed under this title for such fiscal year are allocated among 
the States. If a State agency is unable to use all of the funds so 
allocated to it, the Secretary shall reallocate such unused funds among 
the other States in a manner the Secretary deems appropriate and 
equitable.
    (2)(A) A State shall make available in each fiscal year to eligible 
recipient agencies in the State not less than 40 percent of the funds 
received by the State under paragraph (1) for such fiscal year, as 
necessary to pay for, or provide advance payments to cover, the 
allowable expenses of eligible recipient agencies for distributing 
commodities to needy persons, but only to the extent such expenses are 
actually so incurred by such recipient agencies.
    (B) As used in this paragraph, the term ``allowable expenses'' 
includes--
          (i) costs of transporting, storing, handling, repackaging, 
        processing, and distributing commodities incurred after such 
        commodities are received by eligible recipient agencies;
          (ii) costs associated with determinations of eligibility, 
        verification, and documentation;
          (iii) costs of providing information to persons receiving 
        commodities under this title concerning the appropriate storage 
        and preparation of such commodities; and
          (iv) costs of recordkeeping, auditing, and other 
        administrative procedures required for participation in the 
        program under this title.
    (C) If a State makes a payment, using State funds, to cover 
allowable expenses of eligible recipient agencies, the amount of such 
payment shall be counted toward the amount a State must make available 
for allowable expenses of recipient agencies under this paragraph.
    (3) States to which funds are allocated for a fiscal year under 
this subsection shall submit financial reports to the Secretary, on a 
regular basis, as to the use of such funds. No such funds may be used 
by States or eligible recipient agencies for costs other than those 
involved in covering the expenses related to the distribution of 
commodities by eligible recipient agencies.
    (4)(A) Except as provided in subparagraph (B), to be eligible to 
receive funds under this subsection, a State shall provide in cash or 
in kind (according to procedures approved by the Secretary for 
certifying these in-kind contributions) from non-Federal sources a 
contribution equal to the difference between--
          (i) the amount of such funds so received; and
          (ii) any part of the amount allocated to the State and paid 
        by the State--
                  (I) to eligible recipient agencies; or
                  (II) for the allowable expenses of such recipient 
                agencies;
        for use in carrying out this title.
    (B) Funds allocated to a State under this section may, upon State 
request, be allocated before States satisfy the matching requirement 
specified in subparagraph (A), based on the estimated contribution 
required. The Secretary shall periodically reconcile estimated and 
actual contributions and adjust allocations to the State to correct for 
overpayments and underpayments.
    (C) Any funds distributed for administrative costs under section 
110(b) shall not be covered by this paragraph.
    (5) States may not charge for commodities made available to 
eligible recipient agencies, and may not pass on to such recipient 
agencies the cost of any matching requirements, under this title.
    (c) The value of the commodities made available under subsections 
(c) and (d) of section 102, and the funds of the Commodity Credit 
Corporation used to pay the costs of initial processing, packaging 
(including forms suitable for home use), and delivering commodities to 
the States shall not be charged against appropriations authorized by 
this section.

SEC. 110. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

    (a) From the funds appropriated under section 109(a), $94,500,000 
shall be used for each fiscal year to purchase and distribute 
commodities to supplemental feeding programs serving woman, infants, 
and children or elderly individuals (hereinafter in this section 
referred to as the ``commodity supplemental food program''), or serving 
both groups wherever located.
    (b) Not more than 20 percent of the funds made available under 
subsection (a) shall be made available to the States for State and 
local payments of administrative costs associated with the distribution 
of commodities by eligible agencies under this section. Administrative 
costs for the purposes of the commodity supplemental food program shall 
include, but not be limited to, expenses for information and referral, 
operation, monitoring, nutrition education, start-up costs, and general 
administration, including staff, warehouse and transportation 
personnel, insurance, and administration of the State or local office.
    (c)(1) During each fiscal year commodity supplemental food program 
is in operation, the types, varieties, and amounts of commodities to be 
purchased under this section shall be determined by the Secretary, but, 
if the Secretary proposes to make any significant changes in the types, 
varieties, or amounts from those that were available or were planned at 
the beginning of the fiscal year the Secretary shall report such 
changes before implementation to the Committee on Agriculture of the 
House of Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate.
    (2) Notwithstanding any other provision of law, the Commodity 
Credit Corporation shall, to the extent that the Commodity Credit 
Corporation inventory levels permit, provide not less than 9,000,000 
pounds of cheese and not less than 4,000,000 pounds of nonfat dry milk 
in each of the fiscal years 1996 through 2000 to the Secretary. The 
Secretary shall use such amounts of cheese and nonfat dry milk to carry 
out the commodity supplemental food program before the end of each 
fiscal year.
    (d) The Secretary shall, in each fiscal year, approve applications 
of additional sites for the program, including sites that serve only 
elderly persons, in areas in which the program currently does not 
operate, to the full extent that applications can be approved within 
the appropriations available for the program for the fiscal year and 
without reducing actual participation levels (including participation 
of elderly persons under subsection (e)) in areas in which the program 
is in effect.
    (e) If a local agency that administers the commodity supplemental 
food program determines that the amount of funds made available to 
carry out this section exceeds the amount of funds necessary to provide 
assistance under such program to women, infants, and children, the 
agency, with the approval of the Secretary, may permit low-income 
elderly persons (as defined by the Secretary) to participate in and be 
served by such program.
    (f)(1) If it is necessary for the Secretary to pay a significantly 
higher than expected price for one or more types of commodities 
purchased under this section, the Secretary shall promptly determine 
whether the price is likely to cause the number of persons that can be 
served in the program in a fiscal year to decline.
    (2) If the Secretary determines that such a decline would occur, 
the Secretary shall promptly notify the State agencies charged with 
operating the program of the decline and shall ensure that a State 
agency notify all local agencies operating the program in the State of 
the decline.
    (g) Commodities distributed to States pursuant to this section 
shall not be considered in determining the commodity allocation to each 
State under section 105 or priority of distribution under section 106.

SEC. 111. COMMODITIES NOT INCOME.

    Notwithstandng any other provisions of law, commodities distributed 
under this title shall not be considered income or resources for 
purposes of determining recipient eligibility under any Federal, State, 
or local means-tested program.

SEC. 112. PROHIBITION AGAINST CERTAIN STATE CHARGES.

    Whenever a commodity is made available without charge or credit 
under this title by the Secretary for distribution within the States to 
eligible recipient agencies, the State may not charge recipient 
agencies any amount that is in excess of the State's direct costs of 
storing, and transporting to recipient agencies the commodities minus 
any amount the Secretary provides the State for the costs of storing 
and transporting such commodities.

SEC. 113. DEFINITIONS.

    As used in this title:
          (1) The term ``average monthly number of unemployed persons'' 
        means the average monthly number of unemployed persons within a 
        State in the most recent fiscal year for which such information 
        is available as determined by the Bureau of Labor Statistics of 
        the Department of Labor.
          (2) The term ``elderly persons'' means individuals 60 years 
        of age or older.
          (3) The term ``eligible recipient agency'' means a public or 
        nonprofit organization that administers--
                  (A) an institution providing commodities to 
                supplemental feeding programs serving women, infants, 
                and children or serving elderly persons, or serving 
                both groups;
                  (B) an emergency feeding organization;
                  (C) a charitable institution (including a hospital 
                and a retirement home, but excluding a penal 
                institution) to the extent that such institution serves 
                needy persons;
                  (D) a summer camp for children, or a child nutrition 
                program providing food service;
                  (E) a nutrition project operating under the Older 
                Americans Act of 1965, including such project that 
                operates a congregate nutrition site and a project that 
                provides home-delivered meals; or
                  (F) a disaster relief program; and that has been 
                designated by the appropriate State agency, or by the 
                Secretary, and approved by the Secretary for 
                participation in the program established under this 
                title.
          (4) 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) The term ``food bank'' means a public and charitable 
        institution that maintains an established operation involving 
        the provision of food or edible commodities, or the products 
        thereof, 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) 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) The term '`needy persons'' means--
                  (A) individuals who have low incomes or who are 
                unemployed, as determined by the State (in no event 
                shall the income of such individual or household exceed 
                185% of the poverty line);
                  (B) households certified as eligible to participate 
                in the food stamp program under the Food Stamp Act of 
                1977 (7 U.S.C. 2011 et seq.); or
                  (C) individuals or households participating in any 
                other Federal, or Federally assisted, means-tested 
                program.
          (8) The term ``poverty line'' has the same meaning given such 
        term in section 673(2) of the Community Services Block Grant 
        Act (42 U.S.C. 9902(2)).
          (9) The term ``soup kitchen'' means a public and charitable 
        institution that, as integral part of its normal activities, 
        maintains an established feeding operation to provide food to 
        needy homeless persons on a regular basis.

SEC. 114. REGULATIONS.

    (a) The Secretary shall issue regulations within 120 days to 
implement this title.
    (b) In administering this title, the Secretary shall minimize, to 
the maximum extent practicable, the regulatory, recordkeeping, and 
paperwork requirements imposed on eligible recipient agencies.
    (c) The Secretary shall as early as feasible but not later than the 
beginning of each fiscal year, publish in the Federal Register a 
nonbinding estimate of the types and quantities of commodities that the 
Secretary anticipates are likely to be made available under the 
commodity distribution program under this title during the fiscal year.
    (d) The regulations issued by the Secretary under this section 
shall include provisions that set standards with respect to liability 
for commodity losses for the commodities distributed under this title 
in situations in which there is no evidence of negligence or fraud, and 
conditions for payment to cover such losses. Such provisions shall take 
into consideration the special needs and circumstances of eligible 
recipient agencies.
SEC. 115. FINALITY OF DETERMINATIONS.

    Determinations made by the Secretary under this title and the facts 
constituting the basis for any donation of commodities under this 
title, or the amount thereof, when officially determined in conformity 
with the applicable regulations prescribed by the Secretary, shall be 
final and conclusive and shall not be reviewable by any other officer 
or agency of the Government.

SEC. 116. SALE OF COMMODITIES PROHIBITED.

    Except as otherwise provided in section 107, none of the 
commodities distributed under this title shall be sold or otherwise 
disposed of in commercial channels in any form.

SEC. 117. SETTLEMENT AND ADJUSTMENT OF CLAIMS.

    (a) The Secretary, or a designee of the Secretary, shall have the 
authority to--
          (1) determine the amount of, settle, and adjust any claim 
        arising under this title; and
          (2) waive such a claim if the Secretary determines that to do 
        so will serve the purposes of this title.
    (b) Nothing contained in this section shall be construed to 
diminish the authority of the Attorney General of the United States 
under section 516 of title 28, United States Code, to conduct 
litigation on behalf of the United States.

SEC. 118. REPEALERS; AMENDMENTS.

    (a) The Emergency Food Assistance Act of 1983 (7 U.S.C. 612c note) 
is repealed.
    (b) Amendments.--
          (1) The Hunger Prevention Act of 1988 (7 U.S.C. 612c note) is 
        amended--
                  (A) by striking section 110;
                  (B) by striking section 502.
                  (C) by striking subtitle C of title II; and
          (2) The Commodity Distribution Reform Act and WIC Amendments 
        of 1987 (7 U.S.C. 612c note) is amended by striking section 4.
          (3) The Charitable Assistance and Food Bank Act of 1987 (7 
        U.S.C. 612c note) is amended by striking section 3.
          (4) The Food Security Act of 1985 (7 U.S.C. 612c note) is 
        amended--
                  (A) by striking section 1571; and
                  (B) in section 1562(d), by striking ``section 4 of 
                the Agricultural and Consumer Protection Act of 1973'' 
                and inserting ``section 110 of the Commodity 
                Distribution Act of 1995''.
          (5) The Agricultural and Consumer Protection Act of 1973 (7 
        U.S.C. 612c note) is amended--
                  (A) in section 4(a), by striking ``institutions 
                (including hospitals and facilities caring for needy 
                infants and children), supplemental feeding programs 
                serving women, infants and children or elderly persons, 
                or both, wherever located, disaster areas, summer camps 
                for children'' and inserting ``disaster areas'';
                  (B) in subsection 4(c), by striking ``the Emergency 
                Food Assistance Act of 1983'' and inserting ``the 
                Commodity Distribution Act of 1995''; and
                  (C) by striking section 5.
          (6) The Food, Agriculture, Conservation, and Trade Act of 
        1990 (7 U.S.C. 612c note) is amended by striking section 
        1773(f).

       TITLE II--SIMPLIFICATION AND REFORM OF FOOD STAMP PROGRAM

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Food Stamp Simplification and 
Reform Act of 1995''.

  Subtitle A. Simplified Food Stamp Program and State Assistance for 
                             Needy Families

SEC. 202. ESTABLISHMENT OF SIMPLIFIED FOOD STAMP PROGRAM.

    Section 4(a) of the Food Stamp Act of 1977 (7 U.S.C. 2013(a)) is 
amended--
          (1) by inserting ``(1)'' after ``(a)''; and
          (2) by adding at the end the following new paragraph:
          ``(2) At the request of the State agency, a State may operate 
        a program, as provided in section 24, within the State or any 
        political subdivisions within the State in which households 
        with one or more members receiving regular cash benefits under 
        the program established by the State under the Temporary 
        Assistance for Needy Families Block Grant be issued food stamp 
        benefits in accordance with the rules and procedures 
        established--
                  ``(A) by the State under the Temporary Assistance for 
                Needy Families Block Grant or this Act; or
                  ``(B) under the food stamp program.''.

SEC. 203. SIMPLIFIED FOOD STAMP PROGRAM.

    (a) The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) is amended 
by adding the following new section:
``SEC. 24. SIMPLIFIED FOOD STAMP PROGRAM.

    ``(a) If a State elects to operate a program under section 4(a)(2) 
within the State or any political subdivision within the State--
          ``(1) households in which all members receive regular cash 
        benefits under the program established by the State under the 
        Temporary Assistance for Needy Families Block Grant shall be 
        automatically eligible to participate in the food stamp 
        program;
          ``(2) benefits under such program shall be determined under 
        the rules and procedures established by the State or political 
        subdivision under the Temporary Assistance for Needy Families 
        Block Grant or under the food stamp program, subject to 
        subsection (g).
    ``(b) In approving a State plan to carry out a program under 
section 4(a)(2), the Secretary shall certify that the average level of 
food stamp benefits per household participating in the program under 
such section for the State or political subdivision in which such 
program is in operation is not expected to exceed the average level of 
food stamp benefits per household that received benefits under the 
program established by a State under the part A of title IV of the 
Social Security Act (42 U.S.C. 601 et seq.) in such area in the 
preceding fiscal year, adjusted for any changes in the thrifty food 
plan under section 3(o). The Secretary shall compute the permissible 
average level of food stamp benefits per household each year for each 
State or political subdivision in which such program is in operation 
and may require a State to report any information necessary to make 
such computation.
    ``(c) When the Secretary determines that the average level of food 
stamp benefits per household provided by the State or political 
subdivision under such program has exceeded the permissible average 
level of food stamp benefits per household for the State or political 
subdivision in which the program was in operation, the State or 
political subdivision shall pay to the Treasury of the United States 
the value of the food stamp benefits in excess of the permissible 
average level of food stamp benefits per household in the State or 
political subdivision within 90 days after the notification of such 
excess payments.
    ``(d)(1) A household against which a penalty is imposed (including 
a reduction in benefits or disqualification) for noncompliance with the 
program established by the State under the Temporary Assistance for 
Needy Families Block Grant may have the same penalty imposed against it 
(including a reduction in benefits or disqualification) in the program 
administered under this section.
    ``(2) If the penalty for noncompliance with the program established 
by the State under the Temporary Assistance for Needy Families block 
grant is a reduction in benefits in such program, the household shall 
not receive an increased allotment under the program administered under 
this section as a result of a decrease in the household's income (as 
determined by the State under this section) caused by such penalty.
    ``(3) Any household disqualified from the program administered 
under this subsection may, after such disqualification period has 
expired, apply for food stamp benefits under this Act and shall be 
treated as a new applicant.
    ``(e) If a State or political subdivision, at its option, operates 
a program under section 4(a)(2) for households that include any member 
who does not receive regular cash benefits under the program 
established by the State under the Temporary Assistance for Needy 
Families Block Grant, the Secretary shall ensure that the State plan 
provides that household eligibility shall be determined under this Act, 
benefits may be determined under the rules and procedures established 
by the State under the Temporary Assistance for Needy Families Block 
Grant or this Act, and benefits provided under this section shall be 
equitably distributed among all household members.
    ``(f)(1) Under the program operated under section 4(a)(2), the 
State may elect to provide cash assistance in lieu of allotments to all 
households that include a member who is employed and whose employment 
produces for the benefit of the member's household income that 
satisfies the requirements of paragraph (2).
    ``(2) The State, in electing to provide cash assistance under 
paragraph (1), at a minimum shall require that such earned income is--
          ``(A) not less than $350 per month;
          ``(B) earned from employment provided by a nongovernmental 
        employer, as determined by the State; and
          ``(C) received from the same employer for a period of 
        employment of not less than 3 consecutive months.
    ``(3) If a State that makes the election described in paragraph (1) 
identifies each household that receives cash assistance under this 
subsection--
          ``(A) the Secretary shall pay to the State an amount equal to 
        the value of the allotment that such household would be 
        eligible to receive under this section but for the operation of 
        this subsection;
          ``(B) the State shall provide such amount to the household as 
        cash assistance in lieu of such allotment; and
          ``(C) for purposes of the food stamp program (other than this 
        section and section 4(a)(2))--
                  ``(i) such cash assistance shall be considered to be 
                an allotment; and
                  ``(ii) such household shall not receive any other 
                food stamp benefit for the period for which such cash 
                assistance is provided.
    ``(4) A State that makes the election in paragraph (1) shall--
          ``(A) increase the cash benefits provided to households under 
        this subsection to compensate for any State or local sales tax 
        that may be collected on purchases of food by any household 
        receiving cash benefits under this subsection, 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 and local 
        sales tax; and
    ``(B) pay the cost of any increase in cash benefits required by 
paragraph (1).
    ``(5) After a State operates a program under this subsection for 2 
years, the State shall provide to the Secretary a written evaluation of 
the impact of cash assistance.
    ``(g) In operating a program under section 4(a)(2), the State or 
political subdivision may follow the rules and procedures established 
by the State or political subdivision under the Temporary Assistance 
for Needy Families Block Grant or under the food stamp program, except 
that the State or political subdivision shall comply with the 
requirements of--
          ``(1) subsections (a) through (g) of section 7 (relating to 
        the issuance and use of coupons);
          ``(2) section 8(a) (relating to the value of allotments, 
        except that a household's income may be determined under the 
        program established by the State under the Temporary Assistance 
        for Needy Families Block Grant);
          ``(3) section 8(b) (allotment not considered income or 
        resources);
          ``(4) subsections (a), (c), (d), and (n) of section 11 
        (relating to administration);
          ``(5) paragraphs (8), (12), (17), (19), (21), (26), and (27) 
        of section 11(e) (relating to the State plan);
          ``(6) section 11(e)(10) (relating to a fair hearing) or a 
        comparable requirement established by the State under the 
        Temporary Assistance for Needy Families Block Grant; and
          ``(7) section 16 (relating to administrative cost-sharing and 
        quality control).''.
    (b) 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 ``; and''; and
          (3) by adding at the end the following new paragraph:
          ``(26) the plans of the State agency for operating, at the 
        election of the State, a program under section 4(a)(2), 
        including--
                  ``(A) the rules and procedures to be followed by the 
                State to determine food stamp benefits;
                  ``(B) a statement specifying whether the program 
                operated by the State under section 4(a)(2) will 
                include households that include members who do not 
                receive regular cash benefits under the program 
                established by the State under the Temporary Assistance 
                for Needy Families Block Grant; and
                  ``(C) a description of the method by which the State 
                or political subdivision will carry out a quality 
                control system under section 16(c).''.

SEC. 204. CONFORMING AMENDMENTS.

    (a) Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is 
amended by striking subsection (e).
    (b) Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is 
amended--
          (1) by striking subsection (i); and
          (2) by redesignating subsections (j), (k), and (l) as 
        subsections (i), (j), and (k), respectively.

                     Subtitle B. Food Stamp Program

SEC. 205. THRIFTY FOOD PLAN.

    Section (3)(o) of the Food Stamp Act of 1977 (7 U.S.C. 2012(o)) is 
amended by striking ``(4) through January 1, 1980, adjust the cost of 
such diet every January 1 and July 1'' and all that follows through the 
end of the subsection, and inserting the following:
          ``(4) on October 1, 1995, adjust the cost of the thrifty food 
        plan to reflect 103 percent of the cost of the thrifty food 
        plan in June 1994 and increase such amount by 2 percent, 
        rounding the result to the nearest dollar increment for each 
        household size; and (5) on October 1, 1996, and each October 1 
        thereafter, increase the amount established for the preceding 
        October 1, before such amount was rounded, by 2 percent, 
        rounding the result to the nearest lower dollar increment for 
        each household size.''.

SEC. 206. INCOME DEDUCTIONS AND ENERGY ASSISTANCE.

    (a) Section 5(d)(11) of the Food Stamp Act of 1977 (7 U.S.C. 
2014(d)(11)) is amended--
          (1) by striking ``(A)''; and
          (2) by striking ``or (B) under any State or local laws,'' and 
        all that follows through ``or impracticable to do so,''.
    (b) Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) 
is amended to read as follows:
    ``(e)(1) Standard and Earned Income Deductions.--(A) In computing 
household income, the Secretary shall allow a standard deduction of 
$134 a month for each household, except that households in Alaska, 
Hawaii, Guam, and the Virgin Islands of the United States shall be 
allowed a standard deduction of $229, $189, $269, and $118, 
respectively.
    ``(B) All households with earned income shall also be allowed an 
additional deduction of 20 percent of all earned income (other than 
that excluded by subsection (d) of this section and that earned under 
section 16(j)), to compensate for taxes, other mandatory deductions 
from salary, and work expenses, except that such additional deduction 
shall not be allowed with respect to earned income that a household 
willfully or fraudulently fails (as proven in a proceeding provided for 
in section 6(b)) to report in a timely manner.
    ``(2) Dependent Care Deduction.--The Secretary shall allow 
households, a deduction with respect to expenses other than expenses 
paid on behalf of the household by a third party or amounts made 
available and excluded for the expenses under subsection (d)(3), the 
maximum allowable level of which shall be $200 a month for each 
dependent child under 2 years of age and $175 a month for each other 
dependent, for the actual cost of payments necessary for the care of a 
dependent when such care enables a household member to accept or 
continue employment, or training or education which is preparatory for 
employment.
    ``(3) Excess Shelter Expense Deduction.--(A) The Secretary shall 
allow households, other than those households containing an elderly or 
disabled member, with respect to expenses other than expenses paid on 
behalf of the household by a third party, 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) Such excess shelter expense deduction shall not exceed 
        $231 a month in the 48 contiguous States and the District of 
        Columbia, and shall not exceed, in Alaska, Hawaii, Guam, and 
        the Virgin Islands of the United States, $402, $330, $280, and 
        $171 a month, respectively.
          ``(C)(i) Notwithstanding section 2605(f)) of the Low-Income 
        Home Energy Assistance Act of 1981 (42 U.S.C. 8624(f)), a 
        household may not claim as a shelter expense any payment 
        received, or costs paid on its behalf, under the Low-Income 
        Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.).
          ``(ii) Notwithstanding section 2605(f)) of the Low-Income 
        Home Energy Assistance Act of 1981 (42 U.S.C. 8624(f)), a State 
        agency may use a standard utility allowance as provided under 
        subparagraph (D) for heating and cooling expenses only if the 
        household incurs out-of-pocket heating or cooling expenses in 
        excess of any payment received, or costs paid on its behalf, 
        under the Low-Income Home Energy Assistance Act of 1981 (42 
        U.S.C. 8621 et seq.).
          ``(iii) For purposes of the food stamp program, assistance 
        provided under the Low-Income Home Energy Assistance Act of 
        1981 shall be considered to be prorated over the entire heating 
        or cooling season for which it was provided.
          ``(iv) At the end of any certification period and up to one 
        additional time during each twelve-month period, a State agency 
        shall allow a household to switch between any standard utility 
        allowance and a deduction based on its actual utility costs.
          ``(D)(i) 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 which does not fluctuate 
        within a year to reflect seasonal variations.
          ``(ii) An allowance for a heating or cooling expense may not 
        be used for a household that does not incur a heating or 
        cooling expense, as the case may be, or does incur a heating or 
        cooling expense but is located in a public housing unit which 
        has central utility meters and charges households, with regard 
        to such expense, only for excess utility costs.
          ``(iii) No such allowance may be used for a household that 
        shares such 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.
    ``(4) Homeless Shelter Deduction.--
          ``(A) A State shall develop a standard homeless shelter 
        deduction, which shall not exceed $139 a month, for the 
        expenses that may reasonably be expected to be incurred by 
        households in which all members are homeless but are not 
        receiving free shelter throughout the month. Subject to 
        subparagraph (B), the State shall use such deduction in 
        determining the eligibility and allotments for such households.
          ``(B) The Secretary may prohibit for the use of the standard 
        homeless shelter deduction for households with extremely low 
        shelter costs.
    ``(5) Elderly and Disabled Households.--The Secretary shall allow 
households containing an elderly or disabled member, with respect to 
expenses other than expenses paid on behalf of the household by a third 
party--
          ``(i) an excess medical expense deduction for that portion of 
        the actual cost of allowable medical expenses, incurred by 
        elderly or disabled members, exclusive of special diets, that 
        exceed $35 a month; and
          ``(ii) 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) State agencies shall offer eligible households a method of 
claiming a deduction for recurring medical expenses that are initially 
verified under the excess medical expense deduction provided for in 
subparagraph (A), in lieu of submitting information or verification on 
actual expenses on a monthly basis. The method described in the 
preceding sentence shall be designed to minimize the administrative 
burden for eligible elderly and disabled household members choosing to 
deduct their recurrent medical expenses pursuant to such method, shall 
rely on reasonable estimates of the member's expected medical expenses 
for the certification period (including changes that can be reasonably 
anticipated based on available information about the member's medical 
condition, public or private medical insurance coverage, and the 
current verified medical expenses incurred by the member), and shall 
not require further reporting or verification of a change in medical 
expenses if such a change has been anticipated for the certification 
period.
    ``(6) Child Support Deduction.--Before determining the excess 
shelter expense deduction, the Secretary shall allow all households 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 such 
household member was legally obligated to make such payments, except 
that the Secretary is authorized to prescribe by regulation the 
methods, including calculation on a retrospective basis, the State 
agencies shall use to determine the amount of the deduction for child 
support payments.''.
    (c) Section 11(e)(3) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(3)) is amended by striking ``Under the rules prescribed by the 
Secretary, a State agency shall develop standard estimates'' and all 
that follows through the end of the paragraph.

SEC. 207. VEHICLE ALLOWANCE.

    (Section 5(g)(2) of the Food Stamp Act of 1977 (7 U.S.C. 
2014(g)(2)) is amended by striking ``a level set by the Secretary, 
which shall be $4,500 through August 31, 1994,'' and all that follows 
through the end of the paragraph, and inserting ``$4,550.''.

SEC. 208. ELIGIBILITY OF ALIENS.

    (a) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is 
amended--
          (1) by striking subsection (i); and
          (2) by redesignating subsections (j) through (m) as 
        subsections (i) through (l), respectively.
    (b) Section 6(f)(2) of the Food Stamp Act of 1977 (7 U.S.C. 
2015(f)(2)) is amended--
          (1) in subparagraph (B), by inserting the following before 
        the semicolon: ``, and such alien has fulfilled the residence 
        requirements and has an application pending for naturalization 
        under the Immigration and Nationality Act, is a veteran (as 
        defined in section 101 of title 38, United States Code) with a 
        discharge characterized as an honorable discharge (or is the 
        spouse or dependent child of such alien), is on active duty 
        (other than active duty for training) in the Armed Forces of 
        the United States (or is the spouse or dependent child of such 
        alien), or is at least 75 years of age and has resided in the 
        United States for at least 5 years''; and
          (2) in subparagraph (D), by inserting ``, by such alien shall 
        be eligible only for five years after such entry'' before the 
        semicolon.

SEC. 209. WORK REQUIREMENTS.

    (a) Section 6(d) of the Food Stamp Act of 1977 (42 U.S.C. 2015(5)) 
is amended--
          (1) in paragraph (1)(A)(ii), by striking ``an employment and 
        training program under paragraph (4), to the extent required 
        under paragraph (4), including any reasonable employment 
        requirements as are prescribed by the State agency in 
        accordance with paragraph (4)'' and inserting ``a State job 
        search program'';
          (2) in paragraph (2)(A)--
                  (A) by striking ``title IV of the Social Security Act 
                (42 U.S.C. 602)'' and inserting ``the program 
                established by the State under the Temporary Assistance 
                for Needy Families Block Grant''; and
                  (B) by striking ``that is comparable to a requirement 
                of paragraph (1)''; and
          (3) by amending paragraph (4) to read as follows:
          ``(4)(A) Except as provided in subparagraphs (B), (C), and 
        (D), an individual shall not be denied initial eligibility but 
        shall be disqualified from the food stamp program if after 90 
        days from the certification of eligibility of such individual 
        the individual was not employed a minimum of 20 hours per week, 
        or does not participate in a program established under section 
        20 or a comparable program established by the State or local 
        government.
          ``(B) Subparagraph (A) shall not apply in the case of an 
        individual who--
                  ``(i) is under eighteen or over fifty years of age;
                  ``(ii) is certified by a physician as physically or 
                mentally unfit for employment;
                  ``(iii) is a parent or other member of a household 
                with responsibility for the care of a dependent;
                  ``(iv) is participating a minimum of 20 hours per 
                week and is in compliance with the requirements of--
                          ``(I) a program under the Job Training 
                        Partnership Act (29 U.S.C. 1501 et seq.);
                          ``(II) a program under section 236 of the 
                        Trade Act of 1974 (19 U.S.C. 2296); or
                          ``(III) a program of employment or training 
                        operated or supervised by an agency of State or 
                        local government which meets standards deemed 
                        appropriate by the Governor; or
                  ``(v) would otherwise be exempt under subsection 
                (d)(2).
          ``(C) Upon request of the State, the Secretary may waive the 
        requirements of subparagraph (A) in the case of some or all 
        individuals within all or part of the State if the Secretary 
        makes a determination that such area--
                  ``(i) has an unemployment rate of over 10 percent; or
                  ``(ii) does not have a sufficient number of jobs to 
                provide employment for individuals subject to this 
                paragraph. The Secretary shall report to the Committee 
                on Agriculture of the House of Representatives and the 
                Committee on Agriculture, Nutrition, and Forestry of 
                the Senate on the basis on which the Secretary made 
                such a decision.
          ``(D) An individual who has been disqualified from the food 
        stamp program under subparagraph (A) may reestablish 
        eligibility for assistance if such person becomes exempt under 
        subparagraph (B) or by--
                  ``(i) becoming employed for a minimum of 20 hours per 
                week during any consecutive thirty-day period; or
                  ``(ii) participating in a program established under 
                section 20 or a comparable program established by the 
                State or local government.''.
    (b) Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025) is 
amended--
          (1) by striking subsection (h); and
          (2) by redesignating subsections (i) and (j) as subsections 
        (h) and (i), respectively.
    (c) Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) as 
amended by section 204(b), is amended--
          (1) by striking subsection (d); and
          (2) by redesignating subsections (e) through (k) as 
        subsections (d) through (j), respectively.
    (d) Section 20 of the Food Stamp Act of 1977 (7 U.S.C. 2029) is 
amended to read as follows:
    ``Sec. 20. (a)(1) The Secretary shall permit a State that applies 
and submits a plan in compliance with guidelines promulgated by the 
Secretary to operate a program within the State or any political 
subdivision within the State, under which persons who are required to 
work under section 6(d)(4) may accept an offer from the State or 
political subdivision to perform work on its behalf, or on behalf of a 
private nonprofit entity designed by the State or political 
subdivision, in order to continue to qualify for benefits after they 
have initially been judged eligible.
    ``(2) The Secretary shall promulgate guidelines pursuant to 
paragraph (1) which, to the maximum extent practicable, enable a State 
or political subdivision to design and operate a program that is 
compatible and consistent with similar programs operated by the State 
or political subdivision.
    ``(b) To be approved by the Secretary, a program shall provide that 
participants work, in return for compensation consisting of the 
allotment to which the household is entitled under section 8(a), with 
each hour of such work entitling that household to a portion of its 
allotment equal in value to 100 percent of the higher of the applicable 
State minimum wage or the Federal minimum hourly rate under the Fair 
Labor Standard Standards Act of 1938.
    ``(c) No State or political subdivision that receives funds 
provided under this section shall replace any employed worker with an 
individual who is participating in a program under this section for the 
purposes of complying with section 6(d)(4). Such an individual may be 
placed in any position offered by the State or political subdivision 
that--
          ``(1) is a new position;
          ``(2) is a position that became available in the normal 
        course of conducting the business of the State or political 
        subdivision;
          ``(3) involves performing work that would otherwise be 
        performed on an overtime basis by a worker who is not an 
        individual participating in such program; or
          ``(4) that is a position which became available by shifting a 
        current employee to an alternate position.
    ``(d) The Secretary shall allocate among the States or political 
subdivisions in each fiscal year, from funds appropriated for the 
fiscal year under section 18(a)(1), the amount of $75,000,000 to assist 
in carrying out the program under this section during the fiscal year.
    ``(e)(1) In making the allocation required under subsection (d), 
the Secretary shall allocate to each State operating a program under 
this section that percentage of the total funds allocated under 
subsection (d) which equals the estimate of the Secretary of the 
percentage of participants who are required to work under section 
6(d)(4) that reside in such State.
    ``(2) The State shall promptly notify the Secretary if such State 
determines that it will not expend the funds allocated it under 
paragraph (1) and the Secretary shall reallocate such funds as the 
Secretary deems appropriate and equitable.
    ``(f) Notwithstanding subsection (d), the Secretary shall ensure 
that each State operating a program under this section is allocated at 
least $50,000 by reducing, to the extent necessary, the funds allocated 
to those States allocated more than $50,000.
    ``(g) If, in carrying out such program during such fiscal year, a 
State or political subdivision incurs costs that exceed the amount 
allocated to the State agency under subsection (d)--
          ``(1) the Secretary shall pay such State agency an amount 
        equal to 50 percent of such additional costs, subject to the 
        first limitation in paragraph (2); and
          ``(2) the Secretary shall also reimburse each State agency in 
        an amount equal to 50 percent of the total amount of payments 
        made or costs incurred by the State or political subdivision in 
        connection with transportation costs and other expenses 
        reasonably necessary and directly related to participation in a 
        program under this section, except that such total amount shall 
        not exceed an amount representing $25 per participant per month 
        for costs of transportation and other actual costs and such 
        reimbursement shall not be made out of funds allocated under 
        subsection (d).
    ``(h) The Secretary may suspend or cancel some or all of these 
payments, or may withdraw approval from a State or political 
subdivision to operate a program, upon a finding that the State or 
political subdivision has failed to comply with the requirements of 
this section.''.
    (e) Section 7(i)(6) of the Food Stamp Act of 1977 (7 U.S.C. 
2015(i)(6)) is amended by striking ``section 17(f)'' and inserting 
``17(e)''.

SEC. 210. COMPARABLE TREATMENT OF DISQUALIFIED INDIVIDUALS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) is amended 
by adding at the end the following new subsection:
    ``(i) An individual who is a member of a household who would 
otherwise be eligible to participate in the food stamp program under 
this section and who has been disqualified for noncompliance with 
program requirements from the program established by the State under 
part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) 
shall not be eligible to participate in the food stamp program during 
the period such disqualification is in effect.''.

SEC. 211. ENCOURAGE ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    (a) Section 7(i) of the Food Stamp Act of 1977 (7 U.S.C. 2016(i)) 
is amended--
          (1) by amending paragraph (1) to read as follows:
          ``(1)(A) State agencies are encouraged to implement an on-
        line electronic benefit transfer system in which household 
        benefits determined under section 8(a) or section 24 are issued 
        from and stored in a central data bank and electronically 
        accessed by household members at the point-of-sale.
          ``(B) Subject to paragraph (2), a State is authorized to 
        procure and implement an on-line electronic benefit transfer 
        system under the terms, conditions, and design that the State 
        deems appropriate.
          ``(C) Upon request of a State, the Secretary may waive any 
        provision of this Act prohibiting the effective implementation 
        of an electronic benefit transfer system under this 
        subsection.'';
          (2) in paragraph (2), by striking ``the approval of''; and
          (3) in paragraph (3), by striking ``the Secretary shall not 
        approve such a system unless--'' and inserting ``such system 
        shall provide that--''.
    (b) The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), as amended 
by section 203(a), is amended by adding at the end the following new 
section:

``SEC. 25. ENCOURAGEMENT OF ELECTRONIC BENEFIT TRANSFER SYSTEMS.
    ``(a) Upon fully implementing an a electronic benefit transfer 
system which operates in the entire State, a State may, subject to the 
provisions of this section, elect to receive a grant for any fiscal 
year to operate a low-income nutrition assistance program in such 
fiscal year in lieu of the food stamp program.
    ``(b)(1) A State that meets the requirements of this section and 
elects to operate such program, shall receive each fiscal year under 
this section the sum of--
          ``(A) (i) the total dollar value of all benefits issued under 
        the food stamp program by the State during fiscal year 1994; or
          ``(ii) the average per fiscal year of the total dollar value 
        of all benefits issued under the food stamp program by the 
        State during fiscal year 1992 through 1994; and
          ``(B) the total amount received by the State for 
        administrative costs under section 16(a) for fiscal year 1994 
        or the average per fiscal year of the total amount received by 
        the State for administrative costs under section 16(a) for 
        fiscal years 1992 through 1994.
    ``(2) Upon approval by the Secretary of the plan submitted by a 
State under subsection (c), the Secretary shall pay to the State at 
such times and in such manner as the Secretary may determine, the 
amount to which the State is eligible under subsection (b)(1).
    ``(c) To be eligible to operate a low-income nutrition assistance 
program under this section, a State shall submit for approval each 
fiscal year a plan of operation specifying the manner in which such a 
program will be conducted by the State. Such plan shall--
          ``(1) certify that the State has implemented a state-wide 
        electronic benefit transfer system in accordance with section 
        7(i);
          ``(2) designate a single State agency responsible for the 
        administration of the low-income nutrition assistance program 
        under this section;
          ``(3) assess the food and nutrition needs of needy persons 
        residing in the State;
          ``(4) limited the assistance to be provided under this 
        section to the purchase of food;
          ``(5) describe the person to whom such assistance will be 
        provided;
          ``(6) assure the Secretary that assistance will be provided 
        to the most needy persons in the State and that applicants for 
        assistance shall have adequate notice and fair hearings 
        comparable to those required under section 11;
          ``(7) provide that, in the operation of the low-income 
        nutrition assistance program, there shall be no discrimination 
        on the basis of race, sex, religion, national origin, or 
        political beliefs; and
          ``(8) include other information as may be required by the 
        Secretary.
    ``(d) Payments made under this section to the State may be expended 
only in the fiscal year for which such payments are distributed, except 
that the State may reserve up to 5 percent of the grant received for a 
fiscal year to provide assistance under this section in the subsequent 
fiscal year: Provided, That such reserved funds may not total more than 
20 percent of the total grant received under this section for a fiscal 
year.
    ``(e) The State agency shall keep records concerning the operation 
of the program carried out under this section and shall make such 
records available to the Secretary and the Comptroller General of the 
United States.
    ``(f) If the Secretary finds that there is substantial failure by a 
State to comply with the requirements of this section, regulations 
issued pursuant to this section, or the plan approved under subsection 
(c), then the Secretary shall take one or more of the following 
actions:
          ``(1) suspend all or part of such payment authorized by 
        subsection (b)(2) to be made available to such State, until the 
        Secretary determines the State to be in substantial compliance 
        with such requirements;
          ``(2) withhold all or part of such payments until the 
        Secretary determines that there is no longer failure to comply 
        with such requirements, at which time the withheld payment may 
        be paid; or
          ``(3) terminate the authority of the State to operate the 
        low-income nutrition assistance program.
    ``(g)(1) States which receive grants under this section shall 
provide for--
          ``(A) a biennial audit, conducted in accordance with the 
        standards of the Comptroller General, of expenditures for the 
        provision of nutrition assistance under this section; and
          ``(B) not later than 120 days of the end of each fiscal year 
        in which an audit is conducted, provide the Secretary with such 
        audit.
States shall make the report of such audit available for public 
inspection.
    ``(2) Not later than 120 days after the end of the fiscal year for 
which a State receives a grant under this section, such State shall 
prepare an activities report comparing actual expenditures for such 
fiscal year for nutrition assistance under this section with the 
expenditures for such fiscal year predicted in the plan submitted in 
accordance with subsection (c). Such State shall make the activities 
report available for public inspection.
    ``(h) Whoever knowingly and willfully embezzles, misapplies, 
steals, or obtains by fraud, false statement, or forgery, any funds, 
assets, or property provided or financed under this section shall be 
fined not more than $10,000 or imprisoned for not more than 5 years, or 
both.''.

SEC. 212. VALUE OF MINIMUM ALLOTMENT.

    Section 8(a) of the Food Stamp Act of 1977 (7 U.S.C. 2017(a)) is 
amended by striking ``, and shall be adjusted on each October 1'' and 
all that follows through the end of such subsection, and inserting a 
period.

SEC. 213. INITIAL MONTH BENEFIT DETERMINATION.

    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'' after 
``following any period''.

SEC. 214. IMPROVING FOOD STAMP PROGRAM MANAGEMENT.

    (a) Section 13(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
2022(a)(1)) is amended--
          (1) in the fifth sentence, by inserting ``(after a 
        determination on any request for a waiver for good cause 
        related to the claim has been made by the Secretary)'' after 
        ``bill for collection''; and
          (2) in the sixth sentence, by striking ``1 year'' and 
        inserting ``2 years''.
    (b) Section 16(c) of the Food Stamp Act of 1977 (7 U.S.C. 2025(c)) 
is amended--
          (1) in paragraph (1)(C)--
                  (A) by striking ``national performance measure'' and 
                inserting ``payment error tolerance level''; and
                  (B) by striking ``equal to--'' and all that follows 
                through the period at the end and inserting the 
                following:
                  ``equal to its payment error rate less such tolerance 
                level times the total value of allotments issued in 
                such a fiscal year by such State agency. The amount of 
                liability shall not be affected by corrective action 
                under subparagraph (B).'';
          (2) in paragraph (3)(A), by striking ``120 days'' and 
        inserting ``60 days (or 90 days at the discretion of the 
        Secretary)'';
          (3) in the last sentence of paragraph (6), by inserting 
        ``shall be used to establish a payment-error tolerance level. 
        Such tolerance level for any fiscal year will be one percentage 
        point added to the lowest national performance measure ever 
        announced up to and including such fiscal year under this 
        section. The payment-error tolerance level'' after ``The 
        announced national performance measure''; and
          (4) by striking paragraphs (8) and (9)

SEC. 215. WORK SUPPLEMENTATION OR SUPPORT PROGRAM.

    (a) Section 11(c) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)), 
as amended by section 203(b), is amended--
          (1) in paragraph (25), by striking ``and'';
          (2) in paragraph (26), by striking the period and inserting 
        ``; and'' at the end; and
          (3) by adding at the end the following new paragraph:
          ``(27) the plans of the State agency for including eligible 
        food stamp recipients in a work supplementation or support 
        program under section 16(j).''
    (b) Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025), as 
amended by section 209(b), is amended by adding at the end the 
following new subsection:
    ``(j) Work Supplementation or Support Program.--(1) A State may 
elect to use the sums equal to the food stamp benefits that would 
otherwise be allotted to participants under the food stamp program but 
for the operation of this subsection for the purposes of providing and 
subsidizing or supporting jobs under a work supplementation or support 
program established by the State.
    ``(2) If a State that makes the election described in paragraph (1) 
identifies each household that participates in the food stamp program 
which contains an individual who is participating in such work 
supplementation or support program--
          ``(A) the Secretary shall pay to the State 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 shall expend such amount in accordance with 
        its work supplementation or support program in lieu of 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 as 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 program.
    ``(3) No. person shall be excused by reason of the fact that such 
State has a work supplementation or support program from any work 
requirement under section 6(d), except during the periods in which such 
individual is employed under such work supplementation or support 
program.
    ``(4) For purposes of this subsection, the term ``work 
supplementation or support program'' shall mean a program in which, as 
determined by the Secretary, public assistance, including any benefits 
provided under a program established by the State and the food stamp 
program, is provided to an employer to be used for hiring a public 
assistance recipient.''

SEC. 216. OBLIGATIONS AND ALLOTMENTS.

    Section 18 of the Food Stamp Act of 1977 (7 U.S.C. 2027) is 
amended--
          (1) in subsection (a)--
                  (A) in paragraph (1)--
                          (i) by striking ``are authorized to be 
                        appropriated such sums as are necessary for 
                        each of the fiscal years 1991 through 1995'' 
                        and inserting the following:
                        ``is provided to be obligated, not in excess of 
                        the cost estimate made by the Congressional 
                        Budget Office for this Act, as amended by the 
                        Food Stamp Simplification and Reform Act of 
                        1995, for the fiscal year ending September 30, 
                        1996, with adjustments for any estimates of 
                        total obligations for additional fiscal years 
                        made by the Congressional Budget Office to 
                        reflect the provisions contained in the Food 
                        Stamp Simplification and Reform Act of 1995'';
                          (ii) by striking ``In each monthly report, 
                        the Secretary shall also state'' and inserting 
                        ``Also, the Secretary shall file a report every 
                        February 15, April 15, and July 15, stating''; 
                        and
                          (iii) by striking ``supplemental 
                        appropriations'' and inserting ``additional 
                        obligation authority''; and
                  (B) in paragraph (2), by striking ``authorized to be 
                appropriated'' and inserting ``obligated'';
          (2) in subsection (b)--
                  (A) in the first sentence, by striking 
                ``appropriation'' and inserting ``total obligations 
                limitation provided''; and
                  (B) in the second sentence, by striking 
                ``appropriation'' and inserting ``obligational amount 
                provided in subsection (a)(1)'';
          (3) in subsection (c)--
                  (A) by inserting ``Or under section 24'' after 
                ``under sections 5(d) and 5(e)'';
                  (B) by inserting ``or under section 24'' after 
                ``under section 5(c)'';
                  (C) by striking ``and'' after ``or otherwise 
                disabled''; and
                  (D) by inserting before the period at the end'', and 
                (3) adequate and appropriate recommendations on how to 
                equitably achieve such reductions''; and
          (4) in subsection (f), by striking ``No funds appropriated'' 
        and inserting ``None of the funds obligated''.

                     Subtitle C. Program Integrity

SEC. 301. AUTHORITY TO ESTABLISH AUTHORIZATION PERIODS.

    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 new sentence:
    ``The Secretary shall establish specific time periods during which 
authorization to accept and redeem coupons or redeem benefits through 
an electronic benefit transfer system under the food stamp program 
shall be valid.''.

SEC. 302. CONDITION PRECEDENT TO 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)), as amended by section 301, is amended by adding at the end 
the following new sentence:
    ``No retail food store or wholesale food concern shall be approved 
for participation in the food stamp program unless an authorized 
employee of the Department of Agriculture, or an official of the State 
or local government designated by the Department of Agriculture, 
wherever possible, has visited such retail food store or wholesale food 
concern for the purpose of determining whether such retail food store 
or wholesale concern should be so approved.''.

SEC. 303. WAITING PERIOD FOR RETAIL FOOD STORES AND WHOLESALE FOOD 
                    CONCERNS THAT ARE DENIED APPROVAL TO ACCEPT 
                    COUPONS.

    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 new sentence:
    ``Such retail food store or wholesale food concern shall not submit 
an application under subsection (a)(1) for six months from the date of 
receipt of the notice of denial.''.

SEC. 304. DISQUALIFICATION OF RETAIL FOOD STORES AND WHOLESALE FOOD 
                    CONCERNS.

    Section 12(a) of the Food Stamp Act of 1977 (7 U.S.C. 2021(a)) is 
amended--
          (1) by inserting ``(1)'' after ``(a); and
          (2) by inserting the following new paragraph:
          ``(2) A retail food store or wholesale food concern that is 
        disqualified from participating in the program under section 17 
        of the Child Nutrition Act of 1966 shall for such period of 
        disqualification also be also be disqualified from 
        participating in the food stamp program.''.

SEC. 305. 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 by adding at the end the following new sentence:
    ``Notwithstanding any other provision of law, the permanent 
disqualification of a retail food store or wholesale food concern under 
section 12(b)(3) shall be effective from the date of receipt of the 
notice of disqualification.''.

SEC. 306. CRIMINAL FORFEITURE.

    Section 15(g) of the Food Stamp Act of 1977 (7 U.S.C. 2024(g)) is 
amended to read as follows:
          ``(g) The court, in imposing sentence on a person convicted 
        of an offense in violation of subsection (b) or (c), shall 
        order, in addition to any other sentence imposed pursuant to 
        this subsection, that the person forfeit to the United States 
        all property described in paragraph (2).
          ``(2) 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), is subject to forfeiture to the United 
        States.
          ``(3) No property shall be forfeited under this subsection to 
        the extent of an interest of an owner, by reason of any act or 
        omission established by that owner to have been committed or 
        omitted without the knowledge or consent of that owner.
          ``(4) The proceeds from any sale of forfeited property and 
        any monies forfeited under this subsection shall be used--
                  ``(A) to reimburse the Department of Justice for the 
                costs incurred by the Department to initiate and 
                complete the forfeiture proceeding that caused the sale 
                that produced such proceeds;
                  ``(B) to reimburse the Department of Agriculture 
                Office of Inspector General for any costs it incurred 
                in the law enforcement effort resulting in the 
                forfeiture;
                  ``(C) to reimburse any Federal or State law 
                enforcement agencies for any costs incurred in the law 
                enforcement effort resulting in the forfeiture; and
                  ``(D) by the Secretary to carry out the approval, 
                reauthorization, and compliance investigations of 
                retail stores under section 9.''.

SEC. 307. EXPANDED DEFINITION OF ``COUPON''.

    Section 3(d) of the Food Stamp Act of 1977 (7 U.S.C. 2012(d)) is 
amended by striking ``or type of certificate'' and inserting ``type of 
certificate, authorization cards, cash or checks issued in lieu of 
coupons, or access devices, including, but not limited to, electronic 
benefit transfer cards or personal identification numbers''.

SEC. 308. 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. 309. 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 adding at the end the following new subclause:
          ``(IV) a conviction of an offense under subsection (a) or (b) 
        of section 15 involving items referred to in such subsection 
        having a value of $500 or more.''.

SEC. 310. CLAIMS COLLECTION.

    (a) Section 11(e)(8) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(8)) is amended by inserting before the semicolon at the end 
``or refunds of Federal taxes as authorized pursuant to section 3720A 
of title 31 of the United States Code''.
    (b) Section 13(d) of the Act (7 U.S.C. 2022(d)) is amended--
          (1) by striking ``may'' and inserting ``shall''; and
          (2) by inserting before the period at the end ``or refunds of 
        Federal taxes as authorized pursuant to section 3720A of title 
        31 of the United States Code''.

        Subtitle D. Effective Dates and Miscellaneous Provisions

SEC. 401. EFFECTIVE DATES.

    (a) Except as provided in subsection (b) and (c), this Act and 
amendments made by this Act shall take effect on October 1, 1995.
    (b) The amendments made by section 208 shall take effect on October 
1, 1996.
    (c) The amendments made by section 214 shall take effect on October 
1, 1994.

SEC. 402. SENSE OF THE CONGRESS.

    It is the sense of the Congress that States that operate electronic 
benefit systems to transfer benefits provided under the Food Stamp Act 
of 1977 should operate electronic benefit systems that are compatible 
with each other.

SEC. 403. 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.
                           Brief Explanation

    H.R. 1135, the Food Stamp Reform and Commodity Distribution 
Act of 1995, as amended by the House Committee on Agriculture, 
is designed to reform and simplify the Food Stamp Program and 
to improve the Commodity Distribution Programs of the 
Department of Agriculture, and for other purposes.
    Title I, the Commodity Distribution Act--
          (1) consolidates four USDA commodity distribution 
        programs into one consolidated program;
          (2) authorizes $300,000,000 to purchase, process, 
        store, and distribute commodities to be made a 
        available to states for fiscal years 1996 through 2000;
          (3) establishes guidelines for allocation of 
        commodities among states, supplementation of 
        commodities, and eligibility standards.
          (4) requires the Secretary of Agriculture to take 
        precautions to ensure that commodities made available 
        do not displace commercial sales.
    Title II, the Food Stamp Simplification and Reform Act--
          (1) allows states to harmonize food stamp program 
        rules with those of the state temporary assistance for 
        needy families (TANF) program for those receiving 
        benefits from both programs;
          (2) provides for an annual 2% increase in food stamp 
        benefits;
          (3) freezes certain income deductions;
          (4) freezes the threshold ($4550.00) above which the 
        fair market value of vehicles is counted as an asset in 
        determining food stamp eligibility;
          (5) places limits on the eligibility of aliens;
          (6) requires able-bodied individuals between the ages 
        of 18 and 50, with no dependents, to work 20 hours a 
        week in a private sector job or participate in a state 
        program within 90 days of certification of their food 
        stamp eligibility;
          (7) allows states to use food stamps in work 
        supplementation programs where participants have the 
        opportunity to achieve practical work experience;
          (8) provides that the same penalty for individuals 
        failing to comply with the rules of a state TANF 
        program would apply to food stamps;
          (9) encourages states to implement electronic benefit 
        transfer (EBT) systems by providing states with the 
        option, once EBT operates statewide, of a food stamp 
        block grant;
          (10) establishes more strict quality control measures 
        aimed at improving food stamp program management; and
          (11) provides that the amount obligated will not be 
        in excess of the cost estimate of the Congressional 
        Budget Office for the fiscal year ending September 30, 
        1996, with adjustments for additional fiscal years 
        taking into account the amendments made by this Bill.

                            Purpose and Need

                     Commodity Distribution Program

    The purpose of H.R. 1135 is to consolidate several 
commodity distribution programs to provide for greater program 
efficiency and increase the amount of money authorized for the 
new consolidated program so that food will continue to be 
provided to needy families. Commodity distribution programs 
provide help directly to families at the local level through 
churches, soup kitchens and food banks. Other community 
organizations that provide help through the donation of food 
include battered women's shelters, homeless shelters, food 
pantries and charitable institutions. The food provided through 
this program is often matched and exceeded by voluntary 
donations from private sector sources such as grocery stores, 
food processors, manufacturers, and farmers.
    UADA currently distributes commodities to domestic food 
programs under a variety of legislative authorities, four of 
which are consolidated into one program in this Bill thereby 
establishing one administrative structure. The essential nature 
of the commodity distribution programs is maintained. Persons 
and organizations operating food banks, soup kitchens, 
commodity supplemental food program sites, and other similar 
operations will continue to receive federal commodities and 
administrative funds.
    The purpose of the consolidated program is to provide 
wholesome food for needy people and to support agriculture 
through the donation of federally purchased and donated 
commodities. This program will continue to provide a safety net 
for individuals and families in temporary need due to 
emergencies or natural disasters or as a supplement to other 
programs by providing wholesome, nutritious food.
    The following programs are consolidated under this Bill:
    The Emergency Food Assistance Program (TEFAP)--State and 
local emergency feeding organizations receive federally donated 
commodities (some purchased and some surplus commodities) and 
administrative funding. The amount of commodities varies but 
all states operate TEFAP. TEFAP was begun in December 1981 
under the discretionary authority of the Secretary of 
Agriculture. Congress authorized the program in 1983 and it is 
currently authorized through 1995. Fiscal year 1995 
appropriations are $65 million, $25 million of which is for the 
purchase of commodities and $40 million for state and local 
costs of transporting, storing, and distributing them. 
Additional commodities are donated by CCC from excess 
inventories. In fiscal year 1994, $80 million was appropriated 
to purchase commodities for TEFAP, down from $120 million in 
fiscal year 1993.
    The Soup Kitchen and Food Bank Program--This program 
provides for the purchase and distribution of commodities to 
soup kitchens and food banks, with priority given to those 
organizations providing meals for homeless people. It was 
authorized under 1988 Hunger Prevention Act and reauthorized 
through 1995 under the 1990 farm bill at $32 million for 1991 
and $40 million for the subsequent years. Fiscal year 1995 
appropriation is $40 million.
    Assistance for summer camps and charitable institutions--
The Secretary of Agriculture has the discretion to provide 
commodities to charitable institutions and summer camps from 
the surplus holdings of USDA. Surplus commodities are provided 
when no other outlet is available. The types of organizations 
receiving commodities are churches, orphanages, correctional 
institutions, homes for elderly and hospitals. Only non-profit, 
tax-exempt organizations and correctional facilities that offer 
rehabilitation services are eligible to participate. Funds are 
not appropriated for this program. In 1995 approximately $100 
million of commodities are expected to be donated from 
government commodity holdings. These are either price-support 
commodities or surplus removal commodities.
    Commodity Supplemental Food Program (CSFP)--CSFP began in 
1968 as a program for providing commodities for women, infants, 
and children. In 1981 the program was expanded to serve elderly 
persons. Foods are purchased directly by USDA and are 
distributed through state and local agencies. Approximately 
400,000 low-income people are provided benefits, half of whom 
are elderly and half of whom are women, infants and children. 
This program operates in 20 states with a total of 60 CSFP 
sites.
    Commodity distribution programs serve several purposes. 
They provide food assistance directly to low-income children, 
the elderly, the homeless and women and children at nutrition 
risk. They also help farmers by enabling the federal government 
to dispose of commodity holdings that might otherwise be wasted 
or spoiled.
    The Committee believes that commodity distribution programs 
are essential and are the first line of defense so that 
communities can help families in immediate need without the 
bureaucratic red tape required by other food assistance 
programs. These programs have been operating for decades. In 
December 1981, the Administration announced the beginning of 
the surplus dairy distribution program. Distribution was made 
to achieve a two-fold goal: disposal of government-held surplus 
commodities to prevent waste and to provide food assistance to 
needy families and individuals. As this program evolved, 
additional types of commodities were requested by state and 
local agencies. In addition, there were requests for assistance 
to add to the resources provided by volunteers so that these 
additional commodities could be efficiently transported, 
stored, and distributed.
    The Temporary Emergency Food Assistance Program Act of 1983 
formalized the surplus commodity distribution program. As a 
result, additional commodities were made available to states 
and to encourage states to distribute these commodities $50 
million was provided to assist state and local agencies in the 
costs of transporting, storing, and distributing commodities. 
The temporary emergency food assistance program (TEFAP) and 
other commodity distribution programs were later reauthorized 
through 1995.
    The Committee has recognized the importance of commodity 
distribution programs through its continuing oversight and 
reauthorization of the programs. They are important programs 
that provide for the distribution of nutritious food to needy 
families. These programs are, for the most part, a cost 
effective and proven method to help our neediest people.
    The Committee has been concerned abut the reduction in the 
supplies of commodities for distribution. These commodities 
have provided help to more than 15 million people. Commodity 
distribution programs are an effective means to get food to 
needy people because they depend, for the most part, on a 
network of distribution that is both reliable and efficient. 
These programs have been the means by which government 
agencies, the private sector, and charitable institutions have 
joined together in a partnership to help feed needy families.
    The Committee believes these programs provide a safety net 
that must be consolidated to run efficiently and provide 
benefits to many people. Some needy families, especially 
families with elderly persons, are much more likely to prefer 
and receive commodities through this consolidated program.
    Under the consolidated commodity distribution program 
states seeking commodities must designate a state agency for 
the administration of the commodity programs and must submit a 
plan every four years to the Secretary of Agriculture. States 
are required to establish procedures that will encourage and 
facilitate voluntary food donations by non-government 
organizations. Program commodities are allocated to states 
according to a formula based on the number of persons below the 
poverty line and the number of unemployed persons within a 
state. The program establishes a priority system for commodity 
distribution. Commodity supplemental food program agencies will 
continue to receive the same amount of commodities they 
currently receive. Emergency feeding organizations, charitable 
organizations, and other eligible feeding organizations are the 
next order of priority. Provisions are made to insure that 
commercial sales are not displaced; that commodities are 
purchased and distributed without waste; and that the value of 
commodities is not considered as income in federal, state, or 
local programs.
    Authorization for the consolidated commodity distribution 
program is set at $300 million annually. The program will be 
subject to appropriations, as are the current four programs. 
The Committee believes it is essential that commodities in the 
amount authorized be provided to organizations dedicated to the 
provision of food to needy families and individuals.

 COMMODITY SUPPLEMENTAL FOOD PROGRAM--QUANTITY AND VALUE OF COMMODITIES 
                    [By commodity, fiscal year 1994]                    
------------------------------------------------------------------------
      Entitlement                                                       
      commodities                Pounds                  Dollars        
------------------------------------------------------------------------
Section 6/32 type:                                                      
    Apple juice,                                                        
     canned...........               17,009,909                4,203,411
    Applesauce, canned                2,008,776                  671,762
    Beans, dry........                2,211,312                  807,964
    Beans, green,                                                       
     canned...........                2,031,776                  607,987
    Beans, vegetarian.                        0                        0
    Beef, canned w/nj.                2,204,143                3,359,425
    Beef, meatball                                                      
     stew.............                  597,879                  471,312
    Carrots...........                1,179,912                  372,035
    Chicken, canned                                                     
     boned............                2,655,164                5,185,763
    Corn, canned,                                                       
     cream style......                  299,400                  110,021
    Corn, canned,                                                       
     whole kernel.....                  940,896                  353,887
    Egg mix...........                2,795,724                5,208,428
    Fruit cocktail,                                                     
     canned...........                1,280,520                  723,749
    Grape juice,                                                        
     canned...........               10,094,700                3,025,070
    Grapefruit juice,                                                   
     canned...........                2,925,294                  668,062
    Lentils...........                   49,272                   13,661
    Orange juice,                                                       
     canned...........                5,270,141                1,385,662
    Peaches, cling                                                      
     canned...........                2,810,568                1,664,263
    Pears, canned.....                1,243,824                  643,000
    Peas, green canned                1,465,944                  473,320
    Pineapple juice,                                                    
     canned...........                4,849,694                1,302,462
    Pineapple, canned.                  766,170                  382,416
    Plums, canned,                                                      
     purple...........                  621,504                  218,389
    Pork, canned, W-NJ                1,379,712                1,786,483
    Potatoes,                                                           
     dehydrated.......                1,264,260                  701,273
    Potatoes, whole...                  816,312                  254,861
    Poultry, canned                                                     
     boned............                        0                        0
    Pumpkin...........                   25,728                    8,912
    Spinach, canned...                  493,499                  172,098
    Sweet Potatoes,                                                     
     syrup............                  485,928                  187,345
    Tomato juice,                                                       
     canned...........                1,541,879                  365,767
    Tomatoes, canned..                1,324,440                  536,572
    Tuna, chunk.......                1,501,439                1,847,791
                       -------------------------------------------------
      Total section 6/                                                  
       32 type........               74,145,719               37,713,151
                       =================================================
Section 416-type:                                                       
    Cereal, dry corn..                1,332,891                1,189,763
    Cereal, dry rice..                1,231,783                1,151,294
    Cereal, infant                                                      
     rice.............                  293,670                  360,695
    Cereal, dry oats..                1,272,226                1,453,434
    Cereal, wheat.....                  738,156                1,033,830
    Farina............                2,459,373                  896,266
    Formula, infant...                6,153,405                4,383,037
    Macaroni..........                1,092,672                  344,410
    Milk, evaporated..               24,402,960               11,020,291
    Milk, NFD.........                8,646,024               10,719,845
    Oats, rolled......                1,244,952                  245,754
    Peanut butter.....                4,014,432                3,269,150
    Rice, milled......                2,432,112                  631,529
    Spaghetti.........                  959,232                  305,383
                       -------------------------------------------------
      Total section                                                     
       416-type.......               56,273,888               37,004,411
                       =================================================
    Anticipated                                                         
     adjustment.......  .......................               -5,771,787
    AMS/ASCS Admin.                                                     
     expenses.........  .......................                  635,111
      Total commodity                                                   
       entitlement....              130,419,607               68,310,664
   Bonus commodities                                                    
Section 6/32 type:                                                      
    Grape juice.......  .......................  .......................
    Orange juice......               14,689,850                3,909,717
                       -------------------------------------------------
      Total section 6/                                                  
       32-type........               14,689,850                3,909,717
Section 416-type:                                                       
    Butter............                3,692,016                3,181,513
    Cheese process....                  527,292                  674,903
    Cornmeal..........                3,992,650                  529,276
    Honey.............                3,605,508                1,090,584
    NFD Milk..........                3,995,856                5,003,242
                       =================================================
      Total section                                                     
       416 type.......               30,503,172               10,479,518
      Total bonus                                                       
       commodities....               30,503,172               14,389,235
                       -------------------------------------------------
        Grand total                                                     
       (Entitlement &                                                   
       Bonus).........              160,922,779               82,699,899
------------------------------------------------------------------------
Source.--Preliminar food orders for fiscal year 1994.                   


                    COMMODITY SUPPLEMENTAL FOOD PROGRAM PROJECTS, PARTICIPATION AND FOOD COST                   
                                               [FISCAL YEAR 1994]                                               
----------------------------------------------------------------------------------------------------------------
                                                    Average monthly participation (FNS-153)           Food value
       State or Territory         Projects ---------------------------------------------------------  in dollars
                                              Women     Infants    Children   Elderly      Total         \1\    
----------------------------------------------------------------------------------------------------------------
Arizona........................         11      2,949          0     12,304      9,543       24,796   $4,459,708
California.....................          2      1,348        934     11,690      3,763       17,735    3,381,331
Colorado.......................          7      2,841      2,679      9,909      6,771       22,200    4,430,302
District of Columbia...........          1        465        458      3,858      9,446       14,227    2,280,659
Illinois.......................          1      2,236      2,067     10,563      6,273       21,139    4,012,253
Iowa...........................          1        255        126      1,122      3,764        5,267      973,459
Kansas.........................          3        412          0      2,028      2,289        4,729      862,860
Kentucky.......................          1        207        132      1,291      4,519        6,149    1,131,893
Louisiana......................          1      3,949      2,993     18,262     35,807       61,011   10,911,750
Michigan.......................          8      7,114      5,311     35,812     43,539       91,776   16,089,239
Red Lake, Minn.................          1         24         19        220         12          275       47,638
Minnesota......................          3        948        303      4,945      2,769        8,965    1,667,357
Nebraska.......................          6        552        139      2,727     10,843       14,261    2,593,539
New Hampshire..................          2        786          0      1,529      2,401        4,716      822,745
New Mexico.....................          3      1,474        271     10,882      5,300       17,927    3,289,757
New York.......................          1      3,647      3,084     13,810        188       20,729    4,373,623
North Carolina.................          1         25         21        220      1,144        1,710      293,824
Oregon.........................          1         35         49      1,030          0        1,114      220,701
Ogala Sioux, S.D...............          1         38         36        472          0          546      125,077
Tennessee......................          4      1,214        709      7,758     13,880       23,561    4,325,597
AMS/ASCS/PCIMS Ad. Exp.........          0  .........  .........  .........          0            0      635,111
Anticipated Adjustment.........  .........  .........  .........  .........  .........            0    1,382,241
                                --------------------------------------------------------------------------------
      Total....................         59     30,519     19,331    150,432    162,551      362,833  $68,310,664
----------------------------------------------------------------------------------------------------------------
\1\ Total value of entitlement foods.                                                                           
                                                                                                                
Note: These data are based in part on preliminary date submitted by State and local agencies and are subject to 
  change as revised reports are received.                                                                       


 THE EMERGENCY FOOD ASSISTANCE PROGRAM--BONUS AND ENTITLEMENT COMMODITY 
                                DONATIONS                               
                           [Fiscal year 1994]                           
------------------------------------------------------------------------
  State or Territory         Pounds of Food          Value in Dollars   
------------------------------------------------------------------------
Alabama...............                5,774,504                2,808,576
Alaska................                  589,257                  304,973
Arizona...............                4,060,468                1,752,671
Arkansas..............                3,311,724                1,738,461
California............               40,096,402               18,602,530
Colorado..............                3,381,810                1,525,553
Connecticut...........                2,306,849                1,284,657
Delaware..............                  650,982                  328,707
District of Columbia..                  743,427                  397,587
Florida...............               15,144,162                7,089,685
Georgia...............                5,682,297                2,789,962
Hawaii................                  968,058                  372,488
Idaho.................                1,056,372                  510,349
Illinois..............               14,298,810                6,590,290
Indiana...............                4,933,150                2,197,770
Iowa..................                2,208,530                1,008,035
Kansas................                1,467,888                  730,185
Kentucky..............                4,972,981                1,999,825
Louisiana.............                6,721,212                3,197,123
Maine.................                1,481,171                  664,461
Maryland..............                3,744,750                2,011,971
Massachusetts.........                5,351,565                2,739,808
Michigan..............               10,776,561                5,497,010
Minnesota.............                3,691,902                1,966,613
Mississippi...........                4,291,917                2,089,253
Missouri..............                5,769,295                2,688,997
Montana...............                  957,948                  492,783
Nebraska..............                1,191,788                  592,781
Nevada................                1,273,386                  553,515
New Hampshire.........                1,166,593                  505,708
New Jersey............                7,126,095                3,911,213
New Mexico............                2,113,749                  981,003
New York..............               17,454,747                7,312,059
North Carolina........                6,445,139                2,739,631
North Dakota..........                  546,438                  320,271
Ohio..................               12,092,016                5,710,582
Oklahoma..............                3,054,550                1,295,180
Oregon................                3,258,372                1,516,195
Pennsylvania..........               11,678,445                5,920,479
Rhode Island..........                  636,905                  327,298
South Carolina........                3,518,832                1,300,465
South Dakota..........                  509,659                  231,902
Tennessee.............                6,145,506                2,935,008
Texas.................               24,063,036               11,868,864
Utah..................                1,645,902                  733,756
Vermont...............                  878,007                  429,513
Virginia..............                5,245,518                2,186,081
Washington............                5,275,719                2,653,739
West Virginia.........                2,966,355                1,529,032
Wisconsin.............                4,274,844                2,108,612
Wyoming...............                  478,258                  265,540
American Samoa........                        0                        0
Guam..................                  158,112                   57,322
North Marian Island...                        0                   14,316
Puerto Rico...........                8,930,851                3,393,570
Trust Territory                                                         
 (excluding NMI)......                        0                        0
Virgin Islands........                   93,925                   55,890
Indian Tribe Set Asi..                        0                        0
Indian Tribes.........                        0                        0
Freely Associated                                                       
 States...............                        0                        0
DOD Army/AF/USMC/Navy.                        0                        0
AMS/ASCS Admin                                                          
 Expenses.............                        0                  800,000
Anticipated Adjustment              -10,946,965               -7,046,320
                       -------------------------------------------------
    Total.............              275,709,774              128,583,528
------------------------------------------------------------------------
Source.--Preliminary final food orders for fiscal year 1994.            


THE EMERGENCY FOOD ASSISTANCE PROGRAM--QUANTITY AND VALUE OF COMMODITIES
                    [By commodity, fiscal year 1994]                    
------------------------------------------------------------------------
      Entitlement                                                       
      commodities                Pounds                  Dollars        
------------------------------------------------------------------------
Section 6/32 type:                                                      
    Apple juice,                                                        
     canned...........               47,873,700               12,484,984
    Applesauce........                7,182,000                2,489,857
    Beans, dry........               12,458,880                5,200,379
    Beans, green,                                                       
     canned...........               10,303,605                3,806,473
    Beans, refried....                3,745,440                1,318,585
    Beans, vegetarian.                2,093,040                  525,907
    Egg mix...........                  360,000                  666,256
    Fruit cocktail....                        0                        0
    Grape juice,                                                        
     canned...........                1,085,280                  377,849
    Orange juice,                                                       
     canned...........                7,354,200                2,093,429
    Peaches, cling,                                                     
     sliced...........                8,105,400                5,024,664
    Pears, canned.....                2,770,200                1,903,301
    Peas, green,                                                        
     canned...........                5,095,800                2,061,426
    Pork, canned w/nj.                2,197,098                2,729,139
    Potatoes, flakes                                                    
     dehy.............                        0                        0
    Raisins...........                7,630,848                4,362,301
    Spinach, canned...                   34,425                   13,131
    Tuna, canned......                   66,150                   98,802
                       -------------------------------------------------
      Total Section 6/                                                  
       32 Type........              118,356,066               45,156,483
                                                                        
      Entitlement                                                       
      commodities                                                       
Section 416-type                                                        
    Cereal, dry corn..                   64,512                   51,436
    Macaroni..........                  163,200                   51,668
    Peanut butter.....               31,953,600               26,298,126
    Rice milled.......               30,137,040                7,806,590
                       -------------------------------------------------
      Total Section                                                     
       416-type.......               62,318,352               34,207,820
                       =================================================
    AMS/ASCS/PCIMS                                                      
     Admin. Expenses..                        0                  800,000
    CNMI cashout......                        0                   14,316
    Anticipated                                                         
     adjustment.......                        0                   41,381
      Total commodity                                                   
       entitlement....              180,674,418               80,220,000
                       -------------------------------------------------
   Bonus commodities                                                    
Section 416-type:                                                       
    Butter............               49,718,556               42,190,829
    Cornmeal..........               45,316,800                6,172,699
                       -------------------------------------------------
      Anticipated                                                       
       adjustment.....                        0                        0
      Total section                                                     
       416-type.......               95,035,356               48,363,528
        Grand total                                                     
       (Entitlement &                                                   
       Bonus).........              275,709,774              128,583,528
------------------------------------------------------------------------
Source.--Preliminary food orders for fiscal year 1994.                  


  THE EMERGENCY FOOD ASSISTANCE PROGRAM--ADMINISTRATIVE EXPENSE FUNDING 
                        [Fiscal Years 1994-1995]                        
------------------------------------------------------------------------
  State or Territory          Actual 1994             Estimated 1995    
------------------------------------------------------------------------
Alabama...............                 $784,320                 $756,564
Alaska................                   70,560                   81,085
Arizona...............                  589,760                  645,582
Arkansas..............                  437,160                  449,778
California............                5,115,040                5,199,972
Colorado..............                  449,996                  457,791
Connecticut...........                  371,380                  346,413
Delaware..............                   71,236                   75,960
District of Columbia..                  109,520                  118,135
Florida...............                2,026,080                2,045,966
Georgia...............                  971,228                1,051,352
Hawaii................                  113,360                  129,749
Idaho.................                  150,534                  145,499
Illinois..............                1,796,535                1,619,942
Indiana...............                  687,529                  696,322
Iowa..................                  332,440                  313,661
Kansas................                  318,996                  324,123
Kentucky..............                  706,286                  664,508
Louisiana.............                  946,199                1,000,329
Maine.................                  178,851                  162,177
Maryland..............                  568,760                  557,970
Massachusetts.........                  733,054                  735,518
Michigan..............                1,457,885                1,367,402
Minnesota.............                  541,688                  480,590
Mississippi...........                  601,240                  632,025
Missouri..............                  776,934                  722,156
Montana...............                  130,880                  125,425
Nebraska..............                  167,120                  173,682
Nevada................                  172,640                  173,321
New Hampshire.........                  120,360                  104,433
New Jersey............                  919,040                  956,833
New Mexico............                  321,844                  307,588
New York..............                2,777,549                2,788,785
North Carolina........                  920,609                  898,426
North Dakota..........                   89,160                   87,433
Ohio..................                1,551,662                1,578,413
Oklahoma..............                  529,735                  543,350
Oregon................                  450,320                  422,608
Pennsylvania..........                1,672,720                1,647,437
Rhode Island..........                  137,859                  125,164
South Carolina........                  552,080                  595,524
South Dakota..........                   94,880                   97,686
Tennessee.............                  804,410                  772,290
Texas.................                3,236,240                3,398,857
Utah..................                  200,471                  206,612
Vermont...............                   77,399                   67,106
Virginia..............                  752,280                  793,007
Washington............                  721,040                  677,886
West Virginia.........                  400,680                  384,537
Wisconsin.............                  600,891                  607,818
Wyoming...............                   60,160                   63,208
American Samoa........                        0                        0
Guam..................                   14,480                   14,786
North Mariana Island..                    7,240                    7,374
Puerto Rico...........                1,603,360                1,590,006
Trust Territory                                                         
 (excluding NMI)......                        0                        0
Virgin Islands........                   16,320                   19,836
Indian Tribe Set Asi..                        0                        0
Indian Tribes.........                        0                        0
Freely Associated                                                       
 States...............                        0                        0
DOD Army/AF/USMC/Navy.                        0                        0
Undistributed.........                        0                        0
                       -------------------------------------------------
      Total...........              $40,010,000              $40,010,000
------------------------------------------------------------------------
Source.--USDA.                                                          


                   SUMMER CAMPS AND CHARITABLE INSTITUTIONS QUANTITY AND VALUE OF COMMODITIES                   
                                        [By Commodity, Fiscal Year 1994]                                        
----------------------------------------------------------------------------------------------------------------
                                                           Summer Camps               Charitable Institutions   
                                                 ---------------------------------------------------------------
                                                      Pounds          Dollars         Pounds          Dollars   
----------------------------------------------------------------------------------------------------------------
             Entitlement Commodities                                                                            
Section 6/32 Type:                                                                                              
    Meat, luncheon canned.......................               0              $0               0              $0
    Pork, canned W/NJ...........................               0               0               0               0
                                                 ---------------------------------------------------------------
      Total Section 6/32-Type...................               0               0               0               0
                                                 ===============================================================
Section 416-Type:                                                                                               
    Cornmeal....................................         132,150          17,288       4,412,150         563,314
    Flour.......................................               0               0               0               0
    Grits, corn.................................           2,800             461       2,422,350         373,620
    Macaroni....................................         595,840         171,862       9,080,600       2,516,164
    Oats, rolled................................         279,266          51,985       5,979,808       1,109,482
    Oil, salad dressing soc.....................               0               0               0               0
    Oil, soybean................................               0               0               0               0
    Oil, vegetable..............................         934,133         392,736      31,652,161      12,567,201
    Peanut butter...............................         666,691         519,403      13,840,274      10,927,765
    Peanut granules.............................               0               0          69,300          76,674
    Peanuts, roasted............................         249,408         245,023       3,685,632       3,597,271
    Rice, brown.................................               0               0         588,000         132,723
    Rice, milled................................         430,175         110,968      16,016,575       3,708,918
    Rotini......................................         217,880          69,536       5,330,660       1,661,188
    Shortening, liquid veg......................         123,031          55,460       5,126,722       2,242,399
    Salad dressing reduced......................               0               0          92,064          22,450
    Shortening, vegetable.......................         366,300         186,406      17,408,550       7,816,188
    Spaghetti, enriched.........................         643,340         186,861       8,654,660       2,457,302
    Wheat, rolled...............................               0               0       1,470,000         237,397
                                                 ---------------------------------------------------------------
      Total Section 416-Type....................       4,641,014       2,007,989     125,829,506      50,010,056
                                                 ===============================================================
      Total Commodity Entitlement...............       4,641,014       2,007,989     125,829,506      50,010,056
                                                 ===============================================================
                Bonus Commodities                                                                               
Section 32-Type:                                                                                                
    Apples, fresh...............................               0               0         284,907          60,827
    Beef patty 100% std.........................          15,192          24,671       3,984,408       6,459,678
    Blueberries, cult...........................          84,360          49,579       1,957,680       1,149,537
    Blueberries, wild...........................          80,850          54,374       2,170,620       1,460,482
    Cherries IQF................................           9,600           4,908         488,220         247,322
    Cherries, frz...............................          74,550          34,182       6,173,700       2,814,497
    Grapefruit fresh............................               0               0         563,416          81,697
    Grape juice.................................         169,366          47,888       1,408,508         397,255
    Orange juice frz conc.......................               0               0         346,770         175,765
    Peaches, cling slc..........................         369,000         167,585       3,389,886       1,571,054
    Pears diced.................................          90,100          38,116       1,326,257         566,744
    Pears halves................................          56,525          25,135       1,066,660         486,677
    Pears sliced................................               0               0          42,028          17,403
    Pears, d'Anjou fresh........................           2,250             447         519,345         105,630
    Pears, Bosc fresh...........................               0               0          91,935          18,677
    Raisins 30#.................................         370,620         191,598       5,021,850       2,522,328
    Salmon, pink canned.........................               0               0       2,404,292       3,601,424
    Strawberries, IQF frozen....................          55,350          42,136         140,610         106,103
    Sweet potatoes..............................          92,222          39,397       1,835,830         783,765
    Sweet potatoes, mashed......................               0               0               0               0
    Tomatoes, fresh.............................           5,000           2,011       1,381,900         555,276
                                                 ---------------------------------------------------------------
      Total Section 32-Type.....................       1,474,985         722,027      34,598,822      23,212,141
                                                 ===============================================================
Section 416-Type:                                                                                               
    Butter......................................         992,232         837,031      34,724,066      32,579,867
    Butter patties, soc.........................               0               0               0               0
                                                 ---------------------------------------------------------------
      Total Section 416-Type....................         992,232         837,031      34,724,066      32,579,867
                                                 ===============================================================
      Total Bonus Commodities...................       2,467,217       1,559,058      69,322,888      55,792,008
                                                 ---------------------------------------------------------------
      Grand Total (Entitlement and Bonus).......       7,108,231       3,567,047     195,152,394     105,802,064
----------------------------------------------------------------------------------------------------------------
Source: Preliminary food orders for fiscal year 1994.                                                           


  SUMMER CAMPS AND CHARITABLE INSTITUTIONS--VALUE OF SURPLUS COMMODITY  
                                DONATIONS                               
                           [Fiscal year 1994]                           
------------------------------------------------------------------------
    State or                            Charitable                      
   territory        Summer camps       institutions          Total      
------------------------------------------------------------------------
Alabama........             18,840          1,823,485          1,842,325
Alaska.........                  0            229,063            229,063
Arizona........             76,332          2,028,703          2,105,035
Arkansas.......             16,585            845,992            862,577
California.....            116,369         13,208,525         13,324,894
Colorado.......             60,040          1,099,076          1,159,116
Connecticut....             37,147            866,175            903,322
Delaware.......              2,644            360,969            363,613
District of                                                             
 Columbia......                  0            570,945            570,945
Florida........             72,185          5,167,652          5,239,837
Georgia........                  0          3,364,371          3,364,371
Hawaii.........              4,752            211,290            216,042
Idaho..........             58,121            460,892            519,013
Illniois.......             91,770          3,565,044          3,656,814
Indiana........             85,608          1,585,888          1,671,496
Iowa...........            108,560          1,021,726          1,130,286
Kansas.........                  0            939,691            939,691
Kentucky.......             15,257          1,463,050          1,478,307
Louisiana......              8,655          2,718,389          2,727,044
Maine..........             75,366            568,900            644,266
Maryland.......             15,297          2,584,510          2,599,807
Massachusetts..                  0          3,024,069          3,024,069
Michigan.......            233,707          3,376,738          3,610,445
Minnesota......            100,912          1,922,627          2,023,539
Mississippi....              8,874          1,064,160          1,073,034
Missouri.......            114,257          2,476,536          2,590,793
Montana........             11,514            282,661            294,175
Nebraska.......             28,665            630,812            659,477
Nevada.........                693            728,140            728,833
New Hampshire..            125,091            445,615            570,706
New Jersey.....             55,593          1,776,164          1,831,757
New Mexico.....              8,567            181,802            190,369
New York.......            397,569          9,597,345          9,994,914
North Carolina.             64,540          2,123,763          2,188,303
North Dakota...             34,251            437,765            472,016
Ohio...........             19,726          2,267,252          2,286,978
Oklahoma.......            433,200          1,413,204          1,846,404
Oregon.........             68,489          1,555,204          1,623,693
Pennsylvania...            157,549          5,084,875          5,242,424
Rhode Island...             11,886            154,820            166,706
South Carolina.             22,484          1,466,854          1,489,338
South Dakota...             11,379            328,329            339,708
Tennessee......             17,297          1,932,677          1,949,974
Texas..........            183,612         10,064,449         10,248,061
Utah...........             40,729            414,678            455,407
Vermont........             26,642            365,863            392,505
Virginia.......            115,825          1,109,866          1,225,691
Washington.....            197,057          2,543,665          2,740,722
West Virginia..             19,560            281,238            300,798
Wisconsin......            186,037          3,025,187          3,211,224
Wyoming........              7,814            256,648            264,462
American Samoa.                  0  .................                  0
Freely                                                                  
 Associated                                                             
 States........                  0  .................                  0
Guam...........                  0              8,484              8,484
N. Mariana                                                              
 Islands.......                  0  .................                  0
Puerto Rico....                  0            767,674            767,674
Virgin Islands.                  0              8,564              8,564
Indian Tribes..                  0  .................                  0
DOD Army/AF/                                                            
 USMC/NAVY.....                  0  .................                  0
Undistributed..                  0  .................                  0
                --------------------------------------------------------
    Total......          3,567,047        105,802,064        109,369,111
------------------------------------------------------------------------
Source.--Preliminary food orders for fiscal year 1994.                  


     SOUP KITCHENS AND FOOD BANKS--QUANTITY AND VALUE OF COMMODITIES    
                    [By commodity, fiscal year 1994]                    
------------------------------------------------------------------------
      Entitlement                                                       
      commodities                Pounds                  Dollars        
------------------------------------------------------------------------
Section 6/32 Type:                                                      
    Applesauce, canned                        0                       $0
    Beans, dry........                        0                        0
    Beans, green                                                        
     canned...........                        0                        0
    Beans, vegetarian.                        0                        0
    Beef, ground......                  415,800                  526,602
    Beef, canned W/NJ.                5,546,772                8,426,323
    Chicken, canned                                                     
     boned............                        0                        0
    Chicken, FRZ cut-                                                   
     up...............                1,280,000                  814,596
    Corn, whole kernel                  923,400                  353,049
    Fruit cocktail....                        0                        0
    Orange juice,                                                       
     canned...........               15,850,800                4,771,633
    Peaches, cling                                                      
     sliced...........                4,398,600                2,415,756
    Peaches, freestone                                                  
     CND..............                        0                        0
    Pears, canned.....                2,086,200                1,447,725
    Peas, green canned                        0                        0
    Pineapple, canned.                6,174,000                3,455,676
    Pork, canned, W-NJ                9,508,759               11,574,573
    Potatoes,                                                           
     dehydrated.......                4,050,000                2,535,975
    Poultry, canned,                                                    
     boned............                        0                        0
    Tomatoes, canned..                6,462,720                2,870,338
    Turkey roasts.....                  240,000                  325,595
                       -------------------------------------------------
      Total section 6/                                                  
       32 type........               59,937,051               39,517,841
                       -------------------------------------------------
Section 416-Type:                                                       
    NFD milk..........                   52,800                   67,012
                       -------------------------------------------------
      Total Section                                                     
       416 Type.......                   52,800                   67,012
                       -------------------------------------------------
Section 416-Type--                                                      
 Bonus:                                                                 
    Butter............                  524,340                  428,530
                       -------------------------------------------------
      Total section                                                     
       416 type.......                  524,340                  428,530
    Anticipated                                                         
     adjustment.......  .......................                 -313,383
    AMS/ASCS Admin.                                                     
     expenses.........  .......................                  300,000
                       -------------------------------------------------
      Total commodity                                                   
       entitlement....               57,514,191               40,000,000
------------------------------------------------------------------------
Source.--Preliminary food orders for fiscal year 1994.                  

                     Simplified Food Stamp Program

    The Committee has determined that the food stamp program 
will remain at the federal level. Reform of the Aid to Families 
with Dependent Children (AFDC) program and other welfare 
programs will constitute significant changes in the provision 
of welfare. Until states have completed the transition to the 
new Temporary Assistance for Needy Families (TANF) program, 
food stamps should remain a federal program, reformed, but 
still available to persons in need of food.
    The Committee believes it is essential to provide states 
with the ability to harmonize their new welfare program with 
the food stamp program and has therefore provided states with 
considerable latitude to accomplish this task. Over the past 
several years many efforts have been made to allow states this 
option. Demonstration projects have been authorized, with some 
more successful than others. The 1981 Food Stamp and Commodity 
Distribution Amendments and the 1990 farm bill authorized 
demonstrations projects to test various forms of a simplified 
process to determine eligibility and benefits for AFDC and food 
stamps.
    The 1981 Simplified Application Demonstration Projects 
tested how different levels of standardization and 
simplification affect benefits, administrative costs, and 
errors in the food stamp program. The demonstration projects 
centered on food stamp participants who also receive AFDC, 
Supplemental Security Income (SSI), and/or Medicaid. These 
simplified programs operated in Illinois, California, and 
Oklahoma. In Illinois, program simplification entailed 
assigning food stamp benefits to AFDC households based on 
standard benefit tables under which all households within 
certain categories receive the same food stamp allotment. Three 
other demonstration sites adopted more limited forms of 
simplification. San Diego and Fresno Counties in California 
used AFDC income definitions for the food stamp program. 
Oklahoma standardized the gross income level used to calculate 
food stamp benefits for households at the maximum AFDC payment 
for the households plus the household's ``$30.00 plus \1/3\'' 
AFDC earned income disregard. The demonstration projects 
authorized by the 1990 farm bill were not implemented. Three 
other states have implemented projects with similar 
characteristics, Alabama, Minnesota, and Washington.
    The 1990 farm bill also established a Welfare Simplication 
and Coordination Advisory Committee. The members of that 
advisory committee were experts in the fields of public 
assistance programs, including food stamps, AFDC, medical 
assistance and housing programs and had demonstrated expertise 
in evaluating the operation of these programs and the 
interaction of these programs with one another. Representatives 
of state and local administrators and recipients were included 
as well. In June 1993, the Advisory Committee issued its report 
and recommended the replacement of the ``numerous programs that 
currently serve the needy with one, family-focused, client-
oriented, comprehensive program''.
    The Committee believes it is time to provide states with 
the option of harmonizing their new AFDC program with the food 
stamp program for those participants receiving assistance from 
both programs. The food stamp program is reformed to make it 
possible for states to harmonize the eligibility and benefit 
determination standards for the new TANF program and food 
stamps. States will have the option to establish one set of 
benefit rules for families applying for the new TANF program 
and for food stamps. Penalties applied by the new TANF rules 
for work and program compliance will not result in an increase 
in food stamp benefits. States will be able to choose to apply 
the same penalties to food stamp benefits as are applied to 
TANF for failure to comply with TANF work and compliance 
requirements. Governor John Engler of Michigan, in his 
testimony before the Subcommittee on Department Operations, 
Nutrition, and Foreign Agriculture, cited this as one of the 
necessary changes needed to coordinate these programs.
    States will be able to define and count income and expenses 
for food stamp benefit purposes in the same way they do in 
their new TANF program. TANF recipients would be automatically 
eligible for food stamp benefits in most cases. They will be 
able to simplify rules, provide standard benefits varied by 
household size, area of residence, or other factors. The same 
procedural rules can be used for the new TANF program and for 
food stamps (reporting of income, changes in household 
circumstances, verification standards) as long as a state 
provides notice of changes in benefits and a fair hearing 
process.
    The Committee intends that USDA can refuse to approve a 
state food stamp and TANF simplification plan only if it is 
judged to increase federal food stamp costs or fails to include 
adequate notice and fair hearing rights and certain other 
provisions if current food stamp law. States will be permitted 
to issue food stamp benefits in cash for those persons 
receiving TANF and food stamps who are employed in a private 
sector job; have been working for at least three months; and 
earn at least $350.00 per month. This provision has been 
described as one through which food stamp participants will be 
encouraged to find and keep a job in the private sector. The 
Committee directs the states, after two years, to provide the 
Secretary a written evaluation of this provision to determine 
whether issuing food stamp benefits in cash does promote 
private sector work.
    The federal government operates a multitude of assistance 
programs which are under the jurisdiction of different federal 
agencies and in some cases different state and local agencies. 
For major income and food assistance programs, this lack of 
coordination and resolution of the differences among programs 
is troublesome. The Committee considers the simplified food 
stamp program a first step in the process of coordination. 
Further steps will be considered as the states continue the 
process of implementing reform of the overall welfare system.
                     federal means-tested programs

80 Cash and in-kind benefits for persons with limited income at a cost 
        of $300 billion in 1992 (Federal; State; local funds)

            Medical benefits--9 programs at a cost of $134 billion (59% 
                    Federal funds; 41% State/local funds)
    Medicaid.
    Medical care for veterans without a service-connected 
disability.
    General assistance.
    Indian Health Service.
    Maternal and Child Health Service Block Grant.
    Community Health Centers.
    Title X Family Planning Services.
    Migrant Health Centers.
    Medical Assistance to refugees.
            Cash aid--11 programs at a cost of $70 billion (70% Federal 
                    funds; 30% State funds)
    Aid to Families with Dependent Children (AFDC).
    Supplemental Security Income (SSI).
    Earned Income Tax Credit (EITC).
    Foster Care.
    Pensions for Needy Veterans, Dependents, and Survivors.
    General Assistance.
    Adoption Assistance.
    Emergency Assistance for Needy Families.
    Cash Assistance to Refugees.
    Dependency and Indemnity Compensation (DIC) and Death 
Compensation for Parents of Veterans.
    General Assistance to Indians.
            Food aid--11 programs at a cost of $38 billion (96% Federal 
                    funds; 4% State/local funds)
    Food Stamp Program.
    School Lunch Program.
    WIC.
    School Breakfast Program.
    Nutrition Program for the Elderly.
    Child and Adult Care Food Program.
    TEFAP.
    Summer Food Service Program.
    Commodity Supplemental Food Program.
    Food distribution program on Indian reservations.
    Special Milk Program.
            Housing aid--15 programs at a cost of $21 billion (100% 
                    Federal funds)
    Section 8 low-income housing assistance.
    Low-rent public housing.
    Rural housing loans.
    Section 236 interest reduction payments.
    Rural rental housing loans.
    Rural rental assistance payments.
    Section 101 rent supplements.
    Section 235 home ownership assistance for low-income 
families.
    Farm labor housing loans and grants.
    Rural housing repair loans and grants.
    Rural housing preservation grants.
    Indian housing improvement grants.
    Rural housing self-help technical assistance grants and 
rural housing site loans.
    Home Investment Partnership Program (HOME).
    Home ownership and opportunity for people everywhere 
(HOPE).
            Education aid--17 programs at a cost of $16 billion (96% 
                    Federal funds; 4% State/local funds)
    Subsidized Federal Stafford loans.
    Pell Grants.
    Head Start.
    College work-study.
    Supplemental educational opportunity grants.
    Federal trio programs.
    Chapter 1 Migrant Education Program.
    Perkins loans.
    State Student Incentive Grant (SSIG).
    Fellowships for graduate and professional study.
    Health professions student loans and scholarships.
    Follow through.
    Migrant High School Equivalency Program (HEP).
    Ellender fellowships.
    College Assistance Migrant Program (CAMP).
    Child Development Associate Scholarship Program.
    Vocational education opportunities, Disadvantaged 
activities.
            Other services--8 programs at a cost of $8.6 billion (63% 
                    Federal funds; 37% State/local funds)
    Social Services block grant (Title XX).
    Child Care and development block grant.
    Child care for recipients and ex-recipients of AFDC.
    ``At risk'' child care.
    Community service block grant.
    Legal services.
    Emergency Food and Shelter Program.
    Social services for refugees.
            Jobs and training--7 programs at a cost of $5.5 billion 
                    (91% Federal funds; 9% State/local funds)
    Training for disadvantaged adults and youth.
    Summer Youth Employment and Training Program.
    Job opportunities and basic skills (JOBS).
    Job Corps.
    Senior Community Service Employment Program.
    Foster Grandparents.
    Senior Companions.
            Energy aid--2 programs at a cost of $1.8 billion (95% 
                    Federal funds; 5% State/local funds)
    Low-income Home Energy Assistance Program (LIHEAP).
    Weatherization Program.
             reform of the reform of the food stamp program

Limiting Automatic Increases in Benefits and Deductions

    The food stamp program began as pilot projects in 1961, by 
Presidential Executive Order under the authority to spend funds 
in order to support agriculture. In 1964, the Administration 
proposed and Congress passed the Food Stamp Act. Eligibility 
standards were set by states, cities, and counties and they 
could choose to operate a food stamp program or a food 
distribution program. As is the case now, the benefits were 
paid by the federal government. In 1971, uniform, national 
eligibility standards were set by Congress and the food stamp 
benefit was adjusted to reflect increases due to inflation. By 
1975, amendments to the Food Stamp Act were adopted requiring 
that if the food stamp program was in operation in any place in 
a state, it must be offered statewide. By this time the food 
distribution program was all but phased out.
    In 1979, the Food Stamp Act of 1977 took effect, replacing 
the 1964 Act. The purchase requirement, through which 
participants had to pay a portion of their income, representing 
the expected contribution to their food costs, in order to 
receive a larger amount of food stamps, was eliminated. Because 
this action was determined to increase participation in the 
food stamp program, Congress coupled this with restrictions on 
eligibility and benefits. The amount that could be spent on the 
food stamp program was specifically limited through 
authorization ceilings. Nevertheless, the costs of the food 
stamp program grew considerably. Congress acted to limit the 
growth through annual, rather than semi-annual inflation 
adjustments and established fiscal penalties for states with 
high rates of error. In 1981, the food stamp program again was 
changed. Inflation adjustments were limited and the income 
eligibility standard was set of 130% of the poverty level. The 
growth of the program was slowed.
    In 1984 and 1985, previous limitations were restored and 
benefits were increased. Further, in 1988, a 3% addition to the 
maximum food stamp benefit was enacted and benefits were 
further increased. Since that time the costs of the food stamp 
program have continued to grow, due both to changes in the law, 
specifically the Omnibus Budget Reconciliation Act OF 1993, and 
as a result of the automatic adjustments in several of the food 
stamp deductions and in the thrifty food plan.
    The Committee believes it is time to limit the automatic 
increases built into the food stamp program. Therefore, the 
Committee has stopped the automatic indexing of the standard 
deduction, the excess shelter deduction, and the homeless 
shelter deduction. The Committee has provided for an increase 
in the thrifty plan, the basis of food stamp benefits, but 
limited that increase to 2% above the 103% of the thrifty food 
plan now in place.
    Basic food stamp benefits are currently indexed each year 
to reflect the changes in the cost of the thrifty food plan. 
The annual increase in the thrifty food plan will no longer be 
automatically indexed, but will be set at 2%.
    The food stamp standard deduction ($134.00 per month) will 
continue at the FY 1995 level. The food stamp excess shelter 
deduction ($231.00 per month) will continue at the FY 1995 
level. The food stamp homeless shelter deduction, now set by 
regulation at $139.00 per month, will continued at the FY 1995 
level.
    The standard deduction was introduced in the 1977 Food 
Stamp Act and it was to be adjusted based on increases in the 
Consumer Price Index for non-food items. It was established to 
take the place of itemized deductions. The excess shelter 
deduction was also introduced in the 1977 Food Stamp Act. The 
deduction provides flexibility for families subject to varying 
weather conditions and for increased rents. Shelter expenses, 
including utilities, to the extent they exceed 50% of a 
family's net income, after all other deductions, can be 
deducted as a shelter cost, up to an inflation indexed maximum 
of $231.00 per month. The 1993 Budget Reconciliation Act 
increased this deduction and eliminated the ceiling after 1996.
    Other deductions that are available to food stamp families 
include a deduction of 20% of earnings in recognition of taxes 
and work related expenses; dependent care expenses related to 
work or training up to $200.00 for children under the age of 2 
years and $175.00 per month for all other children; medical 
expense deduction for elderly or disabled food stamp 
participants, to the extent medical expenses exceed $35.00 per 
month, per person; and for the elderly and disabled an 
unlimited excess shelter expenses deduction is allowed. These 
deductions are not changed in the Committee bill.

Energy assistance

    In some states a portion of cash AFDC benefits paid to 
participants are not counted as income for food stamp purposes 
because states designate it as energy assistance. This ranges 
from 3% to 26% of AFDC benefits. This provision of law will be 
repealed. The Committee believes this will more accurately 
reflect the actual income received by food stamp participants 
who are also receiving benefits under a state's welfare 
program.
    Benefits under the Low Income Home Energy Assistance Act 
(LIHEAP) are not currently counted as income for food stamp 
purposes. That will not change. However, recipients of LIHEAP 
benefits are allowed to claim a shelter deduction (and thereby 
increase their food stamp benefits) that includes utility costs 
that are paid by LIHEAP. They claim a deduction for an expense 
that they did not pay or was paid for out of income that was 
not counted. Additionally, recipients can claim a standard 
utility allowance without having to show that they have 
actually paid for utilities, as long as they receive a LIHEAP 
benefit. This special treatment will be repealed.
    The effect of the current law is that some families get an 
excess shelter deduction based on utility expenses paid out of 
uncounted (LIHEAP) income, thereby benefitting twice. A family 
receiving LIHEAP may receive the same food stamp benefits as an 
identical family not receiving LIHEAP, although the first 
family has more income (because of LIHEAP) with which to pay 
energy costs. The Committee continues the rule that income from 
LIHEAP will not be counted as income for food stamp purposes 
but eliminates the duplicate benefits in current law.
Vehicle Allowance

    The fair market value of vehicles is counted as an asset in 
determining food stamp eligibility, to the extent the value 
exceeds $4550 (total assets cannot exceed $2000 or $3000 for 
elderly persons). The $4550 threshold is scheduled to rise to 
$4600 in October 1995, and then be indexed for inflation. Also, 
the value of vehicles used to transport a food stamp 
household's fuel or water, if that is the primary source of 
fuel or water, is not counted in determining the total assets 
of a household. The October 1995, increase, the indexing of the 
threshold, and the exemption of vehicles used to carry fuel or 
water are repealed.
    The Omnibus Budget Reconciliation Act of 1993 expanded and 
indexed the fair market value of vehicles that can be owned by 
food stamp participants. The Committee believes this is another 
example of indexing in the food stamp program that can result 
in uncontrolled cost escalation.
    Current food stamp law provides that certain vehicles are 
not counted at all in calculating eligibility for food stamp 
benefits. These vehicles include those used to produce income; 
are necessary for long distance travel for migrant and seasonal 
workers; are used for subsistence hunting or fishing; or are 
needed for a physically disabled person. The fair market value 
of other vehicles is calculated and to the extent that value 
exceeds $4450, the amount over $4550 is attributed toward the 
resource limit of $2000. Therefore a family could have a 
vehicle with a fair market value of $6550, if there are no 
other liquid assets, and still retain eligibility for food 
stamps. Additionally, if a family has more than one vehicle, 
each valued under $4550, eligibility for food stamps will not 
be affected.

Eligibility of Aliens

    The Committee bill restricts food stamp eligibility to 
citizens and legal aliens who have fulfilled naturalization 
residency requirements and have filed an application for 
citizenship. Additionally, refugees and asylees are not 
ineligible for benefits until five years after entry into the 
United States. Noncitizens 75 years and older, who have lived 
in the United States for at least five years may continue 
receiving benefits. Legal aliens currently serving in the 
United States military or veterans of United States military 
service will be eligible for food stamps. The Committee has 
established that on the date of enactment of this bill, a one-
year period will be allowed before applying this rule.






                Improving Food Stamp Program Management

    The Committee believes that losses to the food stamp 
program due to errors on the part of state agencies, 
inadvertent errors on the part of participants, and intentional 
misrepresentations on the part of participants must be 
significantly reduced. States overpaid food stamp participants 
$1.8 billion in 1993.
    The General Accounting Office (GAO) testified before the 
Committee on February 1, 1995, that states overpaid 
participants $7.4 billion during the 1988 through 1993 period. 
GAO determined that the state agencies accounted for most of 
the errors, $3.21 billion or 43% of the amount spent in error. 
Intention violations of food stamp program rules by 
participants accounted for the least amount of overpayments and 
totaled $1.78 billion or 24% of the errors during this same 
period.
    While states are assessed sanctions for high rates of 
erroneous eligibility and benefit determinations, the 1993 
Reconciliation Act eased the collection of sanctions 
retroactive to 1992. The 1993 Act required the use of an annual 
national average error rate and a sliding scale to determine 
the penalty to be repaid to the federal government thereby 
greatly reducing penalties. Prior law required that the lowest 
ever achieved error rate, plus one percentage point, was the 
tolerance level above which fiscal sanctions would be assessed 
and assessed then fully on each dollar above the tolerance 
level. Additionally, that Act allowed states to appeal the 
Secretary's determination relating to ``good cause'' as a 
reason for exceeding error rate tolerance levels to an 
administrative law judge.
    The Committee proposal will reinstate the quality control 
provisions that were in place prior to the 1993 revisions, with 
one exception. States will continue to be able to appeal ``good 
cause'' reasons for exceeding error rate tolerance levels to an 
administrative law judge. The effect of this would be to retain 
the provision in existing law that permits determinations by 
the Secretary to be reviewed by an administrative law judge. In 
retaining this provision, the Committee notes that the 
unambiguous language of existing law makes the decision of an 
administrative law judge final in such cases and not subject to 
reversal by the Secretary.
    Under the food stamp quality control system a sample of 
each states' caseload is reviewed each year to determine the 
degree to which erroneous payments are made and the dollar 
value of those payments. These surveys produce a dollar error 
rate for overpayments, payments to ineligible persons, and 
underpayments. For fiscal year 1993, overpayments and payments 
to ineligible persons averaged 8.3% of food stamp benefits 
($1.8 billion) and underpayments were 2.5%. Prior to 1993 
amendments, if a states' combined error rate was above a 
certain tolerance level set at the lowest national average 
combined error rate ever achieved (9.3%) plus one percentage 
point, a state was assessed a financial penalty. The 1993 
amendments changed the tolerance level to the national average 
combined error rate for that year (not the lowest ever 
achieved) with no percentage point adjustment and then 
substantially reduced penalties by changing how they are 
calculated. Each state's penalty is now determined by a sliding 
scale so that its penalty assessment reflects the degree to 
which the state's error rate exceeds the new level. The current 
system requires that states be sanctioned on only a portion of 
every dollar spent in error above the tolerance level. For 
example, a state that was four points above a 10% tolerance 
level would be assessed 40% of the misspent food stamps above 
the tolerance level, as opposed to 100% under the pre-1993 law.
    According to USDA the rates of error for the food stamp 
program (overpayments and payments to ineligible persons) were:
          1988--7.41 percent, ($826 million);
          1989--7.27 percent, ($849 million);
          1990--7.34 percent, ($1.03 billion);
          1991--6.96 percent, ($1.2 billion);
          1992--8.19 percent, ($1.7 billion); and
          1993--8.28 percent, ($1.8 billion)(released in June 
        1994).
    Congress passed legislation in 1988 to reform the quality 
control system and reduced sanctions for 1986 and ongoing 
years. In 1990, Congress waived sanctions for the 1983 through 
1985 period. In January 1993, USDA settled outstanding claims 
with 26 states. States agreed to invest $45 million over five 
years to improve their food stamp program. The settlement 
provided that $.85 for every $1.00 overpaid for the period 1986 
to 1991 was waived.
    The Committee bill returns the quality control provisions 
to those adopted in 1988, under former Domestic Marketing, 
Consumer Relations, and Nutrition Subcommittee Chairman Leon 
Panetta. That system was described as a more appropriate 
balance between rewards and penalties for state performance. 
Since that time the 1993 Budget Reconciliation Act was passed 
and further eased sanctions on states. Food stamp error rates 
have risen since then.
    The Committee believes returning to most of the carefully 
crafted 1988 quality control provisions will mean increased 
attention to reducing the rates of error in the food stamp 
program. As was stated in 1988, these changes will improve the 
efficiency of the food stamp program by establishing an error 
rate of 6 percent as an objective for administrative 
improvement and targeting sanctions for errors on states with 
the highest rates of error. The goal of a 6 percent error rate 
remains in the Act, although error rates have risen since 1988 
to 8.28 percent resulting in $1.8 billion spend in error in 
1993.

    Work Requirements and Program Options in the Food Stamp Program

    The Committee believes that the current food stamp 
employment and training program should be ended and that able-
bodied participants with no dependents, between the ages of 18 
and 50 years, be required to find work. These persons will be 
ineligible for food stamps after three months unless they are 
employed at least 20 hours per week in a private sector job. 
The Committee intends that the 90 day period is not to be 
applied retroactively from the effective date of this bill.
    The Committee intends that, for 20 hours per week, the 
persons described below should be working; be in a program 
under the Job Training Partnership Act; be in a program under 
the Trade Adjustment Act; or be in a program of employment or 
training that meets the standards set by the Governor. Able-
bodied persons, with no dependents, who are between the ages of 
18 years and 50 years can continue to receive food stamps 
beyond the 90 days if they are participating in an employment 
or training program, for at least 20 hours per week, meeting 
the standards set by the state's Governor. This would include, 
but not be limited to, job search programs.
    A new state program is authorized by the Committee in which 
states may choose to operate a program within the state or any 
part of the state under which persons who are required to work 
may perform work on behalf of the state or on behalf of a 
private non-profit agency designated by the state. The hours 
worked will be determined by dividing the food stamp allotment 
by the applicable minimum wage. Should a state choose to 
operate such a program, the Committee intends that 
participation in this state program will fulfill the 
requirements for continued participation beyond 90 days for 
able-bodied persons, between 18 and 50 years, with no 
dependents.
    The Committee understands that there may be instances in 
which high unemployment rates in all or part of a state or 
other specified circumstances may limit the jobs available for 
food stamp participants between 18 and 50 years with no 
dependents. Therefore the Secretary, upon request from a state, 
is provided with the authority to waive job requirements in 
these circumstances or if unemployment rates are above 10 
percent. The Committee intends that the Secretary, in 
exercising this authority, will provide the Agriculture 
Committees of the House of Representatives and the Senate with 
the rationale for such a decision.
    The Committee intends that participants receiving TANF 
benefits and food stamps will follow TANF work rules. Other 
able-bodied food stamp participants, who do not receive the new 
TANF benefits or are not between the ages of 18 and 50 years 
with no dependents, will be required to register for work and 
seek a job.
    The Committee has provided states with new money (food 
stamp benefits) to give employers who would, in turn, pay it to 
participants in work supplementation or support programs. Such 
programs include those in which public assistance recipients. 
They are used to pay part of the wages. These programs must 
meet standards set by the Secretary. Several states, including 
Oregon and Mississippi, have indicated interest in these types 
of work programs. The Committee expects that the Secretary will 
keep the Committee informed at regular intervals as to the 
progress of these work supplementation or support programs.
               electronic benefit transfer (ebt) systems

    The Committee believes that EBT systems, in which food 
stamp benefits are provided through a debit card system instead 
of coupons, is the preferred choice of delivering food 
benefits. The Inspector General of the Department of 
Agriculture, in his testimony of February 1, 1995 before the 
Committee, made it clear that EBT systems, while not 
eliminating trafficking in food stamps, were superior to 
coupons and a tool that can be used in tracking down persons 
abusing the food stamp program.
    Therefore, states are encouraged and authorized to 
implement EBT systems under the terms and conditions the state 
deems appropriate. The Committee adopted a provision stating 
that it is the Sense of the Congress that EBT systems be 
compatible with one another. The Committee intends that these 
systems should interface with one another and are able to 
communicate with one another, not that the systems be 
identical. While it is the intent of the Committee to encourage 
compatibility between state operated EBT systems, nothing in 
this Bill should limit a state's flexibility in procuring an 
EBT system consistent with the changes in this Bill.
    The Committee is concerned that because of the standards 
adopted by the Federal Reserve Board in 1994 governing its 
Regulation E, and which become effective in March 1997, 
concerning liability issues and EBT, states are receiving 
conflicting messages on implementation of EBT systems for the 
food stamp program. The Committee stresses its encouragement of 
advancement of EBT systems and is concerned that the increased 
liability under the Federal Reserve Board's 1994 decision may 
retard progress. The Committee intends to pursue this matter 
with hearings later this year.
    To further encourage adoption of EBT systems and control 
fraud, the Committee provides that once a state has implemented 
EBT on a statewide basis, that state will have the option of 
operating a food stamp program under a block grant. The 
Committee intends that EBT benefits will be redeemable only for 
food.

                       Obligations and Allotments

    The Committee is concerned with the escalating costs of the 
food stamp program and what constitutes a near explosion of 
fraud in the program, as well as the numerous violations of the 
food stamp program rules. The situation is not unlike it was in 
1976 when an attempt was made to close loopholes in the program 
and limit certain liberalizing eligibility and benefit rules.
    The Committee is of the firm opinion that the food stamp 
program is very much in need of a spending ceiling.
    Historically, the food stamp program reflects earlier 
efforts to rein in the rapid growth of the Program by imposing 
a spending ceiling.
    The purpose of the amendment of section 18 in section 216 
of H.R. 1135 is to return the Act to language inserted in the 
Food Stamp Act of 1977 that placed a spending ceiling on the 
costs of the program except that this time it is intended that 
the spending ceiling will be implemented and effective.
    The Honorable Dawson Mathis, a former Member of the 
Committee on Agriculture, in his Dissenting Views filed with 
the Committee Report (H.Rept. 95-464) to the Food Stamp Act of 
1977, reflects some of the frustration encountered in current 
attempts to reform the program, stated in pertinent part as 
follows:
             DISSENTING VIEWS OF CONGRESSMAN DAWSON MATHIS

    The Food Stamp Act of 1977, among its other defects, 
represents the final abrogation by Congress of any fiscal 
responsibility with regard to the food stamp program. As 
reported by the House Agriculture Committee, H.R. 7940 repeals 
the provision in existing law requiring that the issuance of 
stamps, which are legal obligations of the U.S. Treasury, be 
limited to the amount of funds appropriated in any fiscal year. 
Beginning with fiscal year 1972, Committee had already agreed 
not to place a ceiling on the authorization, and now, under the 
Committee bill, not even the amount appropriated is any 
obstacle to the issuance of stamps by the administrators in the 
Executive Branch.
    During Committee consideration of this issue. I offered an 
amendment setting a ceiling on the authorization substantially 
higher than program costs as estimated by the bill's proponents 
and restoring the provision in existing law restricting the 
value of stamps issued to the Congressional appropriation. The 
Committee rejected the amendment on the ground that an economic 
downturn or national emergency might swell food stamp rolls and 
that eligible households might be denied benefits because of a 
spending cap. In the event of such an economic calamity as 
envisioned by opponents of a spending ceiling, I am of the 
opinion that Congress should have the option of deciding 
whether additional billions should flow into the food stamp 
program or whether the additional money, assuming it is 
available, should go to some other worthy national purpose. The 
Food Stamp Act of 1977 leaves Congress with no option.
          * * * * * * *
    In conclusion, if the Food Stamp Act of 1977 is enacted 
without a spending ceiling, then Congress will have abdicated 
its responsibility for meaningful food stamp reform and will 
have insured that the program, entrusted to the professional 
administrators and regulation writers, will continue to 
increase in cost by astronomical amounts.

    However, while Congressman Mathis lost his amendment in 
Committee, he prevailed when H.R. 7940 was taken up on the 
Floor, and the spending ceiling amendment was adopted by the 
House on a vote of 242 to 173.
    The House-Senate Conference on the Food Stamp Act of 1977 
adopted the House language in the Conference Report (H. Rept. 
95-599) as noted below (see also pages 203 and 204 of the 
Statement of Managers that provided that the Senate recede to 
the House provisions):

    Sec. 18. (a) To carry out the provisions of this Act, there 
are hereby authorized to be appropriated not in excess of 
$5,847,600,000 for the fiscal year ending September 30, 1978; 
not in excess of $6,158,900,000 for the fiscal year ending 
September 30, 1979; not in excess of $6,188,600,000 for the 
fiscal year ending September 30, 1980; and not in excess of 
$6,235,900,000 for the fiscal year ending September 30, 1981. 
Not to exceed one-fourth of 1 per centum of the previous year's 
appropriation is authorized in each such fiscal year to carry 
out the provisions of section 17 of this Act. Sums appropriated 
under the provisions of this Act shall, notwithstanding the 
provisions of any other law, continue to remain available until 
expended.
    (b) In any fiscal year, the Secretary shall limit the value 
of those allotments issued to an amount not in excess of the 
appropriation for such fiscal year. If in any fiscal year the 
Secretary finds that the requirements of participating States 
will exceed the limitation set herein, the Secretary shall 
direct State agencies to reduce the value of such allotments to 
be issued to households certified as eligible to participate in 
the food stamp program to the extent necessary to comply with 
the provisions of this subsection.

    The spending ceiling imposed in the Food Stamp Act of 1977 
was breached in fiscal year 1980 by rising to $9.2 billion 
despite the spending ceiling provided in section 18 of the Food 
Stamp Act of 1977 that provided roughly $6.2 billion. 
Supplemental appropriations were enacted so that the limit on 
the value of allotments and the spending ceiling imposed as 
provided in 1977 was not permitted to take effect.
    As noted elsewhere in this report in a table entitled 
``Food Stamp Program Expenditures'', despite their earlier 
attempts at cost containment of the food stamp program the 
costs have expanded from $6.9 billion in fiscal year 1979, by 
which time the Food Stamp Act of 1977 was substantially 
implemented, to $25.6 billion in fiscal year 1994. Growth in 
the program has expanded since 1979 despite periods of low 
unemployment and substantial growth in the gross domestic 
product of the United States.
    The amendment to section 18 of the Food Stamp Act in this 
bill will revert the program policy to what was in effect for 
many years except that the Committee intends that the spending 
ceiling imposed by this bill shall take effect as stated. Thus, 
the Committee has placed a ceiling on obligation authority and 
if spending looks like it will exceed the spending ceiling, the 
Secretary is directed to reduce food stamp benefits across the 
board. There is no need for action by Congress to initiate that 
process. However, if Congress determines that supplemental 
funding (appropriation) is needed, that action could be taken. 
The new AFDC block grant, the WIC block grant, and the school 
meals block grant are all subject to pressures from many 
sources, including Governors, to increase spending. The Food 
Stamp Program is no different. Ultimately, Congress will always 
have to make decisions on whether to increase spending or 
further modify the programs when requests to increase spending 
are made.
    Meanwhile, the Committee has retained the entitlement 
aspects of the food stamp program as urged by many who favored 
its retention. The obligation authority provided in this 
section together with other provisions, such as those that 
tighten work requirements and penalize fraud and abuse of the 
program, should provide a program administered by the Secretary 
that is a ``safety net'' for those who rely on a Federal food 
program as scoped out in this measure. It is contemplated that 
other amendments to the Food Stamp Act of 1977 may to be 
considered in the Committee during the writing of the 1995 Farm 
Bill and this section may be revisited at that time if deemed 
necessary.
                           program Integrity

    The Committee believes that the incidence of fraud and the 
losses to the food stamp program as a result of such fraud is 
steadily increasing as the number of food stamp program 
participants and the total value of benefits received increase. 
In fiscal year 1994, almost $23 billion in food stamp benefits 
were issued to over 27 million recipients. During fiscal year 
1993, State and county welfare fraud investigators conducted 
over 550,000 recipient fraud investigations. Of these 
investigations, 216,000 cases of positive fraud were found, 
77,000 individuals were disqualified from the program, and over 
18,000 individuals were prosecuted for welfare fraud. During 
fiscal year 1994, agents of the Office of the Inspector General 
(OIG) conducted 236 investigations of food stamp traffickers 
who were not retail food stores or wholesale food concerns. 
Also during fiscal year 1994, OIG completed 426 investigations 
of retail food stores and wholesale food concerns, resulting in 
the criminal conviction of 308 individuals and firms.
    The Committee was advised that fraud occurs in the food 
stamp program in three different ways. The first method of 
fraud is in the certification and issuance of benefits. USDA 
estimates that about $1.8 billion in food stamp benefits were 
overissued to recipients in fiscal year 1993. Of this total, 
about $414 million was issued to recipients as a result of 
fraud. The rest was the result of unintentional recipient error 
and caseworker error. Recipient fraud varies from the 
intentional underreporting of income or inflation of household 
expenses to elaborate schemes involving the creation of false 
documents and fictitious identities. The Committee heard 
testimony describing a recent incident in the State of 
Washington in which two State welfare caseworkers and a refugee 
counselor were engaged in a scheme to fraudulently obtain 
social security and food stamp benefits for at least 300 
refugees. The false food stamp applications were prompted by 
the refugee counselor and the caseworkers, who took kickbacks 
from the refugees in return for their being certified to 
receive benefits.
    The second method of fraud is street trafficking in food 
stamp coupons. Street trafficking involves a person who sells, 
purchases, or barters food stamps for cash or other nonfood 
items. In many communities, food stamps have become a second 
currency. The Committee heard reports and witnessed undercover 
video footage of food stamps being traded for cash, drugs, 
guns, and a stolen car. The Committee also heard reports that 
it was not uncommon for food stamp traffickers to be a part of 
other criminal enterprises, such as theft and fencing rings or 
drug trafficking operations. In Smithfield, North Carolina, OIG 
agents and other law enforcement officers successfully 
penetrated an organized drug trafficking ring that was 
transporting large quantities of ``crack'' cocaine from Florida 
to Smithfield. During the investigation, OIG documented members 
of the gang exchanging cocaine on numerous occasions for over 
$23,000 in food stamps. Recently in Los Angeles, an undercover 
OIG agent contacted a street trafficker who agreed to buy 
$30,000 in food stamps from the agent. A subsequent search of 
the trafficker's residence and automobile uncovered an 
additional $82,000 in food stamps that had been improperly 
acquired from recipients.
    The third method of fraud is retail food store and 
wholesale food concern trafficking. USDA is responsible for 
authorizing retail food stores and wholesale food concerns to 
redeem food stamps. Currently, over 207,000 retail food stores 
and wholesale food concerns are authorized to redeem food 
stamps. Each year, about 30,000 new entities apply for 
authorization. Also, each year about 30,000 entities are 
disqualified or become ineligible to redeem food stamps. 
Approximately 77 percent of all food stamps are redeemed by 
supermarkets which comprise only about 15 percent of all 
authorized entities. USDA has found that most retail 
trafficking occurs in smaller food stores and in other retail 
entities whose business is not primarily food sales. During 
fiscal year 1994, USDA compliance investigators reviewed 4,300 
entities authorized to redeem food stamps. Of these entities, 
1,300 were found to have committed violations serious enough to 
warrant sanctions, including 902 entities which were 
trafficking in food stamps.
    Retail food stores and wholesale food concerns may traffic 
in food stamps by improperly redeeming food stamps from 
recipients or they may launder food stamps improperly acquired 
by street traffickers. While neither USDA, OIG, nor GAO can 
provide an estimate with any certainty as to the amount of food 
stamp trafficking that occurs each year, trafficking in food 
stamps is believed by OIG to exceed $1 billion each year. 
Clearly, the number of trafficking investigations involving 
multi-million dollar food stamp trafficking operations and the 
organization with which such operations are operating is on the 
rise. The Committee heard testimony of a case in Brooklyn, New 
York, in which investigators found an individual who had 
obtained authorization to redeem food stamps from USDA for a 
fictitious retail store. In a 22-month period, this fictitious 
store illegally accepted more than $40 million in food stamps 
from over 600 restaurants, retail stores, and other businesses. 
In one month alone, this fictitious store illegally redeemed 
over $4.7 million in food stamps, nearly five percent of all 
food stamps redeemed that month in New York City.
    The Committee heard testimony that EBT systems have the 
potential to reduce but not eliminate trafficking and fraud in 
the food stamp program. EBT has the potential to severely 
curtail street trafficking because such systems can only be 
used in conjunction with an authorized point-of-sale terminal 
at an authorized retail food store or wholesale food concern. 
EBT, however, is still susceptible to trafficking and fraud by 
retail food stores and wholesale food concerns. The Committee 
heard testimony from OIG detailing a trafficking operation 
using EBT in Baltimore, Maryland, in which two small retailers 
at an indoor market trafficked over $1.2 million in food stamp 
benefits. EBT data, however, assists investigators in detecting 
traffickers and provides evidence assisting in their 
prosecution. Additionally, EBT provides investigators with 
detailed records identifying recipients who traffic in food 
stamps and assists in prosecuting or disqualifying these 
individuals.
    To combat recipient fraud, the Committee believes that the 
disqualification periods for recipients for intentional program 
violations should be increased from six months to one year for 
the first offense and increased from one year to two years for 
the second offense. To combat recipient trafficking, the 
Committee believes that recipients who are convicted of 
trafficking food stamps with a value of over $500 should be 
permanently disqualified from the program. Additionally, the 
Committee believes that States should be required to 
participate in the Federal Tax Refund Offset Program to collect 
outstanding food stamp claims.
    To combat trafficking by retail food stores and wholesale 
food concerns, the Committee believes that USDA should visit 
each retail food store or wholesale food concern, or may elicit 
the assistance of State or local agency personnel on a 
voluntary basis, before granting authorization to redeem food 
stamps. The Committee believes that initial authorization 
should be for a limited period and that retail food stores and 
wholesale food concerns should be prohibited from submitting a 
new application for six months after a denial of an application 
for authorization to redeem food stamps. The Committee believes 
that where an authorized retail food store or wholesale food 
concern is permanently disqualified, such disqualification 
should be effective from the date of receipt of the notice of 
disqualification pending any administrative or judicial review. 
The Committee also believes that a retail food store or 
wholesale food concern disqualified from the Special 
Supplemental Food Program for Women, Infants, and Children also 
should be disqualified from the food stamp program during such 
disqualifications. Finally, the Committee believes that all 
property used to traffic in food stamps and proceeds traceable 
to any property used to traffic in food stamps should be 
subject to criminal forfeiture.

                         sense of the committee

    Section 403 of the bill contains a Sense of the Committee 
on Agriculture resolution relating to reductions in outlays 
that reads as follows:

          It is the sense of the House Committee on Agriculture 
        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.

    This amendment followed an earlier amendment by the same 
sponsor that was objected to on a point of order claiming that 
it was not germane to the bill and was within the jurisdiction 
of another Committee. The Chairman sustained the point of 
order.
    The sense of the Committee resolution while it is not 
binding and has no substantive effect, was accepted by the 
Chairman and was adopted by a voice vote.
    A subsequent amendment by the same sponsor, that was 
somewhat similar to the amendment ruled nongermane but not 
objected to a point of order, was voted on and rejected on a 
23-21 vote.

                      Section-by-Section Analysis

Section 1. Short title

    This section provides that the Act may be cited as the Food 
Stamp Reform and Commodity Distribution Act.

               TITLE I--COMMODITY DISTRIBUTION PROVISIONS

Section 101. Short title

    This section provides that the title be cited as the 
Commodity Distribution Act of 1995.

Section 102. Availability of commodities

    Provides general authority for the Secretary of Agriculture 
to purchase a variety of nutritious and useful commodities 
during fiscal years 1996 through 2000 for distribution to 
States for programs described in this title.
    Permits the Secretary to spend Section 32 funds not needed 
for other section 32 activities, to purchase, process, and 
distribute commodities of the types customarily purchased and 
distributed to States for programs eligible for commodities 
under this title.
    Permits the Secretary to donate Section 32 commodities 
purchased to encourage domestic consumption by diverting them 
from normal channels of trade, to States for programs under 
this title.
    Requires the Secretary to make available to programs under 
this title, at no charge or credit, excess stocks of the CCC, 
which are not otherwise needed (for other domestic food 
programs and obligations, for international market development 
and food aid commitments, or to carry out farm price and income 
stabilization purposes).
    Allows the Secretary to determine the types, varieties, and 
amounts of commodities purchased each fiscal year as long as 
the Secretary makes these purchases (to the extent practicable 
and appropriate) based on agricultural market conditions, 
States and distributing agency preferences and needs; and 
recipient preferences.

Section 103. State, local, and private supplementation of commodities

    Requires the Secretary to establish a system and procedures 
for donations of nutritious and wholesome commodities by non-
Federal agencies or individuals, and allows the use of 
administrative funds, equipment, structures and vehicles, and 
personnel funded under this title to be used to assist in 
storing, handling and distributing these commodities. Requires 
that in distributing commodities under this title, States and 
recipient agencies continue, to the maximum extend practical, 
to use volunteers and commodities and other foodstuffs donated 
by charitable and other organizations.

Section 104. State plan and eligibility requirements

    Requires States seeking commodities under this title to 
submit plans of operation and administration every four years 
to the Secretary for approval, and allows amendment of the 
plans at any time with Secretarial approval.
    Requires State plans to contain, at a minimum, the 
designated States agency responsible for distributing 
commodities; a plan of operation and administration for the 
expeditious distribution of commodities to recipient agencies 
in quantities requested; and standards of eligibility for 
recipient agencies and for individual or household recipients 
of commodities. At a minimum, individuals or households must be 
needy to be eligible, and must live in the geographic area 
served by the distributing agency at the time of application.
    Requires the Secretary to encourage States receiving 
commodities under this title to establish a State advisory 
board consisting of representatives of all entities, public and 
private interested in the distribution of commodities under 
this title.
    Permits State agencies receiving commodities under this 
title to make agreements with other States to:
          Jointly provide commodities to eligible recipient 
        agencies that serve needy persons in a single 
        geographical area that includes such States:
          Transfer commodities to eligible agencies in the 
        other State; and
          Advise the Secretary of the agreement and transfers 
        taking place.

Section 105. Allocation of commodities to States

    Requires that, except for commodities required to be 
provided to the commodity supplemental food program (see 
section 110), commodities distributed under this title be 
allocated as follows: 60% on the basis of each State's 
proportion of the nation's total persons with incomes below the 
poverty line; and 40% on the basis of each State's proportion 
of average monthly unemployed persons compared to the national 
total.
    Requires the Secretary to notify each State of the amount 
of commodities available to it under the allotment, and 
requires the States to promptly notify the Secretary if they 
will not accept any or all of the commodities available to 
them. Requires the Secretary to reallocate and distribute 
commodities rejected by the States in a method deemed 
appropriate and equitable. Also requires the Secretary to 
establish procedures permitting States to decline portions of 
allocated commodities and to reallocate and distribute them 
appropriately and equitably.
    Authorizes the Secretary to request that States assist 
other States affected by drought, flood, hurricane, or other 
natural disaster by allowing the Secretary to reallocate 
commodities from unaffected to affected areas.
    Requires that purchases of commodities be made by the 
Secretary and at such times and under conditions determined 
appropriate by the Secretary; requires that deliveries be made 
at reasonable intervals to the States based on allocations or 
reallocations made not later than December 31 of the following 
fiscal year.

Section 106. Priority system for State distribution of commodities

    Requires States to make their full allocation of 
commodities available first to emergency feeding organizations; 
then to charitable institutions; and then to any other eligible 
recipient agency not receiving commodities under the title. 
Exempts the commodity supplemental food program from the 
priority order. (See section 110)

Section 107. Initial processing costs

    Permits the Secretary to use CCC funds to pay the costs of 
initial processing and packaging of commodities to be 
distributed under this title into forms and quantities suitable 
for use by individual households or eligible recipient 
agencies, as appropriate. Permits the Secretary to pay such 
costs in the form of CCC stocks equal in value to such costs, 
and to ensure that such payments-in-kind do not displace 
commercial sales of the commodities.

Section 108. Assurances and anticipated use

    Requires the Secretary to take precautions to ensure that 
commodities donated under this title do not displace commercial 
sales of the commodities, or the products thereof, and to issue 
at least every two years to the Congress a report on the extent 
of commercial displacements or substitutions.
    Requires the Secretary to determine that commodities 
provided under this title are distributed and purchased only in 
quantities that can be consumed without waste, and prohibits 
eligible recipient agencies from receiving commodities in 
excess of anticipated use of ability to accept and store, based 
on inventory records and controls.

Section 109. Authorization of appropriations

    Authorizes appropriations of $260 million for each of 
fiscal years 1996 through 2000 to purchase, process, and 
distribute commodities to the States under this title.
    Authorizes $40 million for each of fiscal years 1996 
through 2000 for the Secretary to make available to States for 
State and local costs associated with the distribution of 
commodities under this title, except for commodity supplemental 
food program commodities.
    Requires that administrative funding be provided to States, 
on an advance basis, in the same proportion as the commodities 
distributed under this title. Requires the Secretary to 
reallocate unused administrative funds among other States.
    Requires that not less than 40% of the administrative 
funding provided to States be used to pay for, or advance 
payments to eligible recipient agencies for the allowable costs 
of storage, handling and distribution of commodities by 
eligible recipient agencies.
    Defines ``allowable expenses'' to include: (1) costs 
incurred by eligible recipient agencies upon receipt of 
commodities for transporting, storing, handling, repackaging, 
processing, and distributing the commodities; (2) costs of 
eligibility determinations, verification, and documentation; 
(3) costs of providing information to persons receiving 
commodities concerning storage and preparation of the 
commodities; (4) and costs of record-keeping, audits, and other 
administrative procedures required for program participation.
    Stipulates that payments made by States to cover the 
allowable expenses of eligible recipient agencies be counted 
toward the 40% of administrative funding that States must make 
available for the expenses of eligible recipient agencies.
    Requires States to submit financial reports to the 
Secretary on a regular basis showing how administrative funds 
are used. Prohibits the use of any administrative funds for 
costs other than those involved in the distribution of 
commodities by eligible recipient agencies.
    Requires States to come up with non-Federal cash or in-kind 
matching for each dollar in administrative funding it receives 
that is not passed along to eligible recipient agencies or used 
to pay the allowable expenses of these agencies. Permits the 
Secretary to allocate administrative funding to States before 
the matching formula is satisfied, based on estimated matching. 
However, the Secretary must periodically reconcile estimated 
and actual contributions and adjust allocations or 
reallocations to correct for over or underpayment. Excludes the 
CSFP from the matching requirements specified for other 
agencies receiving commodities and administrative funding under 
this title.
    Prohibits States from charging for commodities made 
available to eligible recipient agencies, and from passing 
along to eligible recipient agencies any of the costs of the 
matching requirements.
    Specifies that bonus commodities purchased under section 
32, or available from excess inventories of the CCC, and the 
CCC costs of initial processing, packaging and delivery of 
commodities distributed under this title, not be charged 
against the authorized appropriations for commodity purchases 
and administrative funding.

Section 110. Commodity Supplemental Food Program

    Requires that $94.5 million of the amount appropriated for 
the programs under this title be used in each fiscal year to 
purchase and distribute commodities for supplemental feeding 
programs serving women, infants, and children, and/or elderly 
persons (the ``commodity supplemental food program'').
    Requires that not more than 20% of administrative funding 
made available for programs under the title be made available 
to States for State and local payments of administrative costs 
associated with the distribution of commodities through the 
commodity supplemental food program.
    Defines administrative costs to include expenses for 
information and referral, operating, monitoring nutrition 
education, start-up costs, and general administration, 
including staff, warehouse and transportation personnel, 
insurance and the administration of the State or local office.
    Stipulates that the Secretary will be responsible for the 
types, varieties, and amounts of commodities purchased for the 
program each year. However, the Secretary is required to notify 
the House Committee on Agriculture and the Senate Committee on 
Agriculture, Nutrition and Forestry, of any significant changes 
in the types, varieties, or amounts of foods from those 
available or planned at the beginning of the fiscal year.
    Requires that each year, the Commodity Credit Corporation 
donate not less than 9 million pounds of cheese and 4 million 
pounds of nonfat dry milk, if it is available from CCC 
holdings, to the Secretary for the use of the commodity 
supplemental food program.
    Requires the Secretary to approve applications for 
additional sites including sites serving only elderly persons, 
in areas where the program currently does not operate to the 
full extent that applications can be approved and within 
available appropriations for the program, without reducing 
actual participation levels in areas where the program 
operates.
    Permits a local agency that has funding in excess of its 
needs for serving women, infants, and children, to permit low-
income elderly persons to participate in the program, subject 
to the approval of the Secretary.
    Requires the Secretary to notify State agencies (and State 
agencies to notify local agencies) if the price of commodities 
is higher than expected for one or more types of commodities 
purchased for the program and such price increase may reduce 
the number of persons that can be served by the program.

Section 111. Commodities not income

    Specifies that commodities distributed under this title not 
be considered income or resources for the purpose of 
establishing eligibility for any Federal, State, or local 
means-tested program.
Section 112. Prohibition against certain State charges

    Prohibits States from charging eligible recipient agencies 
for storage and transportation costs of commodities that exceed 
the actual cost, and that do not take into account the amount 
the Secretary provides to the State for such costs.

Section 113. Definitions

    ``Average monthly number of unemployed persons'' means 
those within a State in the most recent fiscal year for which 
such information is available as determined by the Bureau of 
Labor Statistics, of the Department of Labor;
    ``Elderly persons'' means persons over 60 years of age;
    ``Eligible recipient agency'' means a public or private 
nonprofit organization administering an institution providing 
commodities to supplemental feeding programs serving women, 
infants, and children or serving the elderly, or both; an 
emergency feeding organization; charitable institutions 
(hospitals and retirement homes) serving needy persons; summer 
camps or child nutrition programs providing food service; a 
nutrition project operating under the Older Americans Act 
including projects that operate a congregate nutrition site and 
project that provides home-delivered meals; or a disaster 
relief program.
    ``Emergency feeding organization'' means a public or a 
private nonprofit organization that administers activities and 
projects providing nutrition assistance to relieve situations 
of emergency and distress through the provision of food to 
needy persons, including low-income and unemployed persons.
    ``Food bank'' mean a public and charitable institution that 
maintains an established operation involving the provision of 
food or edible commodities or products to food pantries, soup 
kitchens, hunger relief centers, or other food or feeding 
centers that provide meals to feed needy persons.
    ``Food panty'' means a nonprofit organization that 
distributes food to low-income and unemployed households, 
including food from sources other than the USDA to relieve 
situations of emergency and distress.
    ``Needy persons'' means persons with low-incomes or 
unemployed persons, as the State determines, except that income 
can be no higher than 185% of the poverty guideline; food stamp 
households; or persons participating in other Federal means-
tested programs.
    ``Poverty line'' is given the same meaning as given in 
section 673(2) of the Community Services Block Grant Act.
    ``Soup kitchen'' means a public and charitable institution 
that maintains an established feeding operation to provide food 
to needy homeless persons on a regular basis.

Section 114. Regulations

    Requires the Secretary to issue regulations within 120 days 
to implement the title, and to minimize to the maximum extent 
possible the regulatory, record keeping, and paperwork 
requirements imposed on eligible recipient agencies.
    Requires the Secretary to publish in the Federal Register, 
as early as feasible but not later than the beginning of each 
fiscal year, an estimate of the types and quantities of 
commodities that are likely to be available to States for the 
commodity programs under this title.
    Regulations issued by the Secretary are to include 
provisions setting liability standards for commodity losses 
where there is evidence of negligence and fraud, and provisions 
governing conditions for payment to cover these losses. Such 
regulations are to consider the special needs and circumstances 
of eligible recipient agencies.

Section 115. Finality of determinations

    Stipulates that determinations made by the Secretary 
concerning the basis for donation of commodities and funds 
under this title, when in conformance with applicable 
regulations, are final and conclusive, and are not reviewable 
by any other officer or agency of government.

Section 116. Relationship to other program

    The commodities distributed under this title shall not be 
sold or disposed of in commercial channels.

Section 117. Settlement and adjustment of claims

    Grants the Secretary authority to determine the amount of, 
settle and adjust claims arising out of this title and waive 
such claims as he determines serve the purposes of the title. 
Moreover, nothing contained in this section is construed to 
diminish the authority of the Attorney General to conduct 
litigation on behalf of the United States.

Section 118. Repealers; amendments

    Repeals the Emergency Food Assistance Act of 1983 in its 
entirety. Amends to strike provisions in: the Hunger Prevention 
Act of 1988, the Commodity Distribution Reform and WIC 
Amendments of 1987, the Charitable Assistance and Food Act of 
1987, the Food Security Act of 1985, the Agriculture and 
Consumer Protection Act of 1973, and the Food Agriculture, 
Conservation and Trade Act of 1990, that are replaced by 
provisions in this title.

     TITLE II--SIMPLIFICATION AND REFORM OF THE FOOD STAMP PROGRAM

Section 201. Short Title

    This section provides that Title II be cited as the Food 
Stamp Simplification and Reform Act of 1995.

  subtitle A--Simplified Food Stamp Program and State Assistance for 
                         Needy Families Program
Section 202. Establishment of Simplified Food Stamp Program

    This section permits States to operate a program, either 
statewide or in any political subdivision, under which 
households receiving regular cash benefits under the new 
Temporary Assistance for Needy Families (TANF) block grant, 
replacing the current Aid to Families with Dependent Children 
(AFDC) program, would be provided food stamp benefits that are 
determined by using the rules and procedures established by the 
State for its TANF block grant program.

Section 203. Simplified Food Stamp Program

    Subsection (a) of this section adds a new section 24 to the 
Food Stamp Act of 1977 establishing the conditions under which 
a State may exercise the option to use its TANF block grant 
rules and procedures for food stamp benefits.
    The new section 24(a) requires that (1) households in which 
all members receive regular cash benefits under a TANF block 
grant program be automatically eligible for food stamp benefits 
(as is now the case for AFDC recipients) and (2) food stamp 
benefits be determined under the State's rules and procedures 
for its TANF grant program with certain exceptions (noted 
below).
    The new section 24(b) requires that, when approving a 
State's plan to exercise its option for a simplified food stamp 
program, the Secretary certify that average per-household food 
stamp benefits received by those provided benefits under the 
simplified program option is not expected to exceed the average 
benefit level for AFDC or TANF recipients in the preceding 
fiscal year, adjusted for any changes in the cost of the 
Thrifty Food Plan (the basis for maximum food stamp benefit 
levels). It also would require the Secretary to compute the 
permissible (average) per-household benefit for each State or 
political subdivision exercising the simplified program option.
    The new section 24(c) requires that, if average benefits 
provided under the simplified program option exceed the 
permissible level (the prior year amount adjusted by changes in 
Thrifty Food Plan costs), the State must repay the Treasury the 
extra benefit costs incurred within 90 days of notification of 
excess payments.
    The new section 24(d) provides that (1) households 
receiving food stamp benefits under the simplified program 
option who are sanctioned (disqualified or have their benefits 
reduced) under a State's TANF grant program may have the same 
penalty applied for food stamp purposes and (2) food stamp 
benefits to households participating under the simplified 
program option may not be increased as the result of a 
reduction in their TANF benefits caused by a sanction. Any 
household disqualified from food stamps as a result of a 
sanction under a TANF program would be eligible to apply for 
food stamps (as a new applicant) after the disqualification 
period has expired.
    The new section 24(e) allows States the further option of 
applying their TANF rules and procedures to food stamp 
households in which some, but not all, members receive TANF 
benefits. These households would not be automatically eligible 
for food stamps (i.e., they would have to meet normal food 
stamp eligibility rules), but their benefits could be 
determined under the State's TANF rules and procedures, so long 
as the Secretary ensures that the State's plan provides for an 
``equitable'' distribution of food stamp benefits among all 
household members.
    The new section 24(f) allows States exercising the 
simplified program option to pay food stamp benefits in cash to 
some households participating under the simplified program. 
Cash benefits could only be paid to households with 3 
consecutive months' earned income of at least $350 a month from 
a private sector employer. States would be responsible for 
paying for increased food stamp cash benefits to offset the 
effect of any sales taxes (sales taxes on food purchases made 
with food stamp coupons or electronic benefit transfer cards 
are barred by current law), and the value of food stamp 
benefits provided in cash would be treated as food stamp 
coupons for taxation and other purposes (i.e. disregarded). 
States would be required to provide an evaluation of the effect 
of cash assistance after the program has operated for 2 years.
    The new section 24(g) requires that States exercising the 
simplified program option follow certain rules mandated by the 
Food Stamp Act: (1) requirements governing issuance procedures 
for food stamp benefits, (2) the requirement that benefits be 
calculated by subtracting 30 percent of a household's income 
(as determined by State-established rules under the simplified 
program option) from 103 percent of the cost of the Thrifty 
Food Plan, (3) the bar against counting food stamp benefits as 
income or resources in other programs, (4) the recordkeeping 
requirement, (5) the bar against discrimination by reason of 
race, sex, religious creed, national origin, or political 
beliefs, (6) limits on the use and disclosure of information 
about applicant households, (7) the requirements for notice and 
fair hearings to aggrieved households or a comparable provision 
under the TANF program, (8) the requirement to report illegal 
aliens to the Immigration and Naturalization Service, and (9) 
the requirement that States take measures to ensure that 
households do not receive duplicate benefits. States also would 
be subject to (1) normal administrative cost sharing rules and 
(2) quality control rules (including sanctions in cases of high 
rates of erroneous benefit and eligibility determinations).
    Subsection (b) of this section requires that State plans 
for those electing to exercise the simplified program option 
include the rules and procedures to be followed in determining 
benefits, whether the program will include households in which 
not all members receive TANF grant benefits, and the method by 
which the State or political subdivision participating in the 
simplified program will carry out its quality control 
obligations.

Section 204. Conforming amendments

    This section repeals provisions authorizing demonstration 
projects similar to the simplified food stamp program option 
established in sections 202 and 203.

                     subtitle b--food stamp program

Section 205. Thrifty food plan

    This section provides for an increase in the thrifty food 
plan effective October 1, 1995, and each October 1 thereafter 
to reflect 103% of the cost of the thrifty food plan in June 
1994, plus 2% each year. Current law adjusts the cost of the 
thrifty food plan each October according to the plan's cost in 
the immediately preceding June.

Section 206. Income deductions and energy assistance

    Subsection (a) of this section deletes the Food Stamp Act 
provision allowing States to designate a portion of public 
assistance payments as energy assistance and, thereby, have 
that amount disregarded as income for food stamp purposes.
    Subsection (b) of this section reorganizes section 5(e) of 
the Food Stamp Act and makes the following changes:
          Standard income deductions would be frozen at their 
        current levels: $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. Current law provides for annual inflation 
        indexing.
          The limit on excess shelter expense deductions for 
        households without elderly or disabled members would be 
        frozen at their current levels: $231 a month for the 48 
        contiguous States and the District of Columbia, $402 
        for Alaska, $330 for Hawaii, $280 for Guam, and $171 
        for the Virgin Islands. Current law provides that these 
        levels increase by 7 percent in October 1995 and 
        eliminates the ceilings beginning in January 1997.
          The limit on the amount of shelter expenses homeless 
        households who are not receiving free shelter 
        throughout the month can claim in determining an excess 
        shelter expense deduction would be frozen at the 
        current level of $139 a month. The Secretary may 
        prohibit the use of the standard homeless shelter 
        deduction for households with extremely low shelter 
        costs. Current law provides for annual inflation 
        indexing.
          In determining excess shelter expense deductions, 
        recipients of assistance under the Low-Income Home 
        Energy Assistance Program (LIHEAP) would not be allowed 
        to claim as a shelter expense the amount of their home 
        energy costs paid, either directly or indirectly, by 
        the LIHEAP. LIHEAP payments would continue to be 
        disregarded as income for food stamp purposes.
          In determining excess shelter expenses deductions, 
        LIHEAP recipients would be allowed to claim a 
        ``standard utility allowance'' only if they have out-
        of-pocket utility expenses beyond the amount of their 
        LIHEAP assistance.
    Subsection (c) of this section makes a conforming amendment 
relating to the limit on shelter expense claims by homeless 
households.

Section 207. Vehicle allowance

    This section freezes the threshold above which the fair 
market value of vehicles is counted as an asset in determining 
food stamp eligibility at $4,550. Current law provides that the 
excess over the $4,550 threshold be counted toward the $2,000 
asset limit ($3,000 for elderly households). Under the 1993 
amendments to the Food Stamp Act, the threshold is scheduled to 
rise to $4,600 in October 1995 and be annually indexed for 
inflation beginning in fiscal year 1997.
    This section also deletes a provision that exempts, from 
the asset eligibility test, vehicles used to transport 
households' heating fuel or water when the fuel or water is the 
household's primary source.

Section 208. Eligibility of aliens

    Subsection (a) of this section deletes provisions requiring 
that legally admitted aliens who apply for food stamps will, if 
the alien's entry was based on a sponsor's affidavit of 
support, be deemed to have a portion of the income and 
resources of the sponsor available in food stamp eligibility 
and benefit determinations for 3 years after entry. [Note: The 
new provisions of law added in subsection (b) place new direct 
limits on aliens covered by these deeming provisions.]
    Subsection (b) of this section places 2 new limits on the 
food stamp eligibility of legally resident aliens:
          Aliens lawfully admitted for permanent residence as 
        immigrants would only be eligible if they have 
        fulfilled residence requirements and have an 
        application pending for naturalization, are honorably 
        discharged veterans (or the veteran's spouse or 
        dependent child), are on active military duty, other 
        than active duty for training (or are the spouse or 
        dependent child of an individual on active duty), or 
        are at least 75 years of age and have resided in the 
        United States for 5 years.
          Refugees and asylees would be eligible only for 5 
        years after entry.

Section 209. Work requirements

    Under current law, non-exempt recipients between 16 and 60 
are ineligible if they refuse to register for employment or 
participate, when required to by the State, in an employment 
and training program. Exempt individuals are (1) the disabled, 
(2) those subject to and complying with a work requirement 
under the AFDC program or the unemployment compensation system 
(although failure to comply with an AFDC or unemployment 
program work requirement is treated as a failure to comply with 
a food stamp program requirement if the requirements are 
comparable), (3) parents and other household members with the 
responsibility for care of a dependent child under age 6 or an 
incapacitated person, (4) post-secondary students enrolled at 
least half time (separate rules bar eligibility for post-
secondary students who are not working or do not have 
dependents), (5) regular participants in drug addiction or 
alcoholic treatment programs, (6) persons employed at least 30 
hours a week or receiving the minimum wage equivalent, and (7) 
persons between 16 and 18 who are not head of household and are 
in school at least half time.
    Subsection (a) adds a requirement making ineligible non-
exempt recipients who refuse to participate in any State job 
search program; if the person refusing to participate in job 
search is head of household, the household would become 
ineligible. It also revises the exemption for participants in 
other work programs: those subject to and complying with a work 
requirement under a TANF block grant program or the 
unemployment compensation system would be exempt, but failure 
to comply with a TANF or unemployment program work requirement 
would be treated as a failure to comply with a food stamp 
program requirement (whether or not the requirements are 
``comparable'').
    Subsection (a) further repeals the provisions of law 
establishing the current program under which States must 
operate employment and training programs for non-exempt food 
stamp recipients and enroll a minimum percentage (10 percent) 
in some type of work-related activity. In their place, 
subsection (a) adds a new work requirement. Under the new 
requirement, non-exempt recipients would be disqualified if 
they are not employed a minimum of 20 hours a week or are not 
participating in a state program within 90 days of 
certification of their food stamp eligibility. Exempt 
individuals would be (1) those under 18 or over 50, (2) those 
certified by a physician as physically or mentally unfit for 
employment, (3) parents or other household members responsible 
for the care of a dependent, (4) those participating at least 
20 hours a week in (and complying with the requirements of) a 
Job Training Partnership Act (JTPA) program, a Trade Adjustment 
Assistance Act training program, or a State or local government 
employment or training program meeting Governor-approved 
standards, and (5) those who are exempt from work registration 
and job search rules, as noted above (e.g., those employed 30 
hours a week). The new work requirement could be waived by the 
Secretary, for some or all individuals within a State or part 
of a State, if, on a State's request, the Secretary finds that 
the area has an unemployment rate of over 10 percent, or the 
area does not have a sufficient number of jobs to provide 
employment to those subject to the new requirement (but, the 
Secretary must report to Congress on the basis on which the 
waiver decision was made). Persons disqualified under the new 
work requirement could re-establish eligibility by becoming 
employed for a minimum of 20 hours a week during any 
consecutive 30-day period or participating in a state program.
    Subsection (b) deletes provisions for funding the current 
employment and training program for food stamp recipients.
    Subsection (c) deletes pilot project provisions for a 
demonstration program similar to the new work requirement added 
by section 209(a).
    Subsection (d) rewrites section 20 of the Food Stamp Act 
and establishes the requirements for state programs conducted 
for food stamp recipients.
    The new section 20(a) requires the Secretary to permit any 
State that applies and submits a plan in compliance with the 
Secretary's guidelines to operate a state program for food 
stamp recipients either Statewide or in any political 
subdivision. A state program would require those accepting the 
offer of a state position in order to maintain food stamp 
eligibility to perform work on the State or local 
jurisdiction's behalf, or on behalf of a private nonprofit 
entity. Guidelines issued by the Secretary would be required to 
allow States and local jurisdictions to design and operate a 
state program that is compatible and consistent with similar 
programs they operate.
    The new section 20(b) requires that, in order to be 
approved, a state program must provide that participants work 
no more than the number of hours equivalent to their 
household's monthly benefit divided by the minimum wage in 
publicly assigned jobs or private, non-profit jobs.
    The new section 20(c) limits the degree to which a State or 
local jurisdiction can assign participants to replace other 
workers. No State or local jurisdiction could replace an 
employed worker with a state program participant, but 
participants could be placed in (1) new positions, (2) a 
position that became available during the normal course of 
business, (3) a position involves performing work that would 
otherwise be performed on a overtime basis, or (4) a position 
that became available by shifting a current employee to an 
alternate position.
    The new section 20(d) requires the Secretary to allocate 
$75 million a year among States and political subdivisions 
operating state programs.
    The new section 20(e) requires that each State's allocation 
be equal to its estimated percentage of food stamp participants 
subject to the new work rule. However, States would be required 
to notify the Secretary as to their intention to operate a 
state program, and the Secretary would be required to 
reallocate unclaimed portions of the $75 million grant to other 
States, as the Secretary deems appropriate and equitable.
    The new section 20(f) requires that minimum State 
allocations from the $75 million grant be $50,000.
    The new section 20(g) requires that, in addition to its 
portion of the $75 million grant, the Secretary must pay each 
State (1) 50 percent of any costs above the state grant amount 
and (2) 50% of any costs up to half of an amount representing 
$25 per participant per month.
    The new section 20(h) allows the Secretary to suspend or 
cancel some or all payments made to States for this program, or 
withdraw approval on a finding of noncompliance.
    Subsection (e) of this section makes a conforming change in 
the Act.

Section 210. Comparable treatment of disqualified individuals

    This section provides that individuals who have been 
sanctioned with a disqualification under a TANF program (where 
the State has not exercised its option for a simplified 
program) would not be eligible to participate for food stamps 
during the disqualification period.

Section 211. Encouraging Electronic Benefit Transfer (EBT) Systems

    This Section provides that states are encouraged to 
implement EBT systems and are authorized to procure and 
implement systems that the state deems appropriate.
    Once a state fully implements an EBT system it may elect to 
receive the sum of the food stamp benefits issued under the 
food stamp program and the amount received for administrative 
costs for FY 1994 or the average of these amounts for FY 1992 
through FY 1994. Such a state may, upon approval from the 
Secretary, submit a plan through which food assistance is 
provided to needy persons. The plan must contain certification 
that the state has implemented a state-wide EBT system; that a 
single state agency is responsible for the administration of 
the program; that the food and nutrition needs of needy persons 
are assessed; that assistance is limited to the purchase of 
food; that assistance is limited to the most needy; that rules 
for adequate notice and fair hearings are included; that the 
program operate with no discrimination; and for other 
information as may be required by the Secretary.
    Up to five percent of the grant may be reserved each year 
to provide assistance under this section in a subsequent year, 
but such reserved funds may not be more than 20% of the total 
grant in any one year. If the Secretary finds that there is 
substantial failure by a state to comply with the requirements 
of this section the Secretary must suspend all or part of the 
payment; withhold all or part of the payment; or terminate the 
authority of a state to operate a program.
    States are required to provide for a biennial audit and an 
annual report on program expenditures. Fines up to $10,000 or 
imprisonment up to five years are included for fraudulent 
activities.

Section 212. Value of minimum allotment

    This section freezes the minimum monthly allotment for 1- 
and 2-person households at $10. Under current law (as 
established in the 1990 amendments to the Food Stamp Act), it 
is scheduled to increase to $15 a month [in fiscal year 1997 or 
1998, depending on food-price inflation]. The minimum $10 
allotment is granted to 1- and 2-person households even if 
their actual benefit is calculated to be less.

Section 213. Initial month benefit determination

    Prior to the 1993 amendments to the Food Stamp Act, those 
who did not complete all the requirements for eligibility 
recertification in the last month of their certification 
period, but were then determined eligible after their 
certification period had expired, received reduced benefits in 
the first month of their new certification period (i.e., their 
benefits were pro-rated to the date they met the requirements 
and were again judged eligible). This practice was ended by the 
1993 amendments, which, in effect, allowed recipients a 1-month 
``grace period'' to fulfill eligibility recertification 
requirements during which benefits would not be subject to a 
pro-rata reduction.
    This section would restore pre-1993 law.

Section 214. Improving Food Stamp Program management

    Under the food stamp program's quality control system, a 
sample of each State's caseload is reviewed annually to 
determine the degree to which erroneous eligibility or benefit 
determinations were made, and their dollar value. These sample 
surveys produce dollar ``error rates'' for overpayments, 
payments to ineligible households, and underpayments. The most 
recent reported error rates are for fiscal year 1993: 
overpayments and payments to ineligible households averaged a 
total of 8.3 percent ($1.8 billion), and underpayments were 2.5 
percent ($550 million), for a ``combined'' error rate of 10.8 
percent.
    Prior to the 1993 amendments to the Food Stamp Act, if a 
State's combined error rate was above a ``tolerance level'' set 
at the lowest national average combined error rate ever 
achieved (9.3 percent), plus 1 percentage point, it was 
assessed a dollar penalty for each benefit dollar spent above 
the tolerance level. For example, if the tolerance level were 
11 percent (a national average combined error rate of 10 
percent plus 1 percentage point) and the State's combined error 
rate were 12 percent, it would be assessed a sanction equal to 
the difference, or 1 percent of food stamp benefits issued in 
the State that year.
    The 1993 amendments changed the tolerance level to the 
national average combined error rate for that year (not the 
lowest ever), with no 1 percentage-point upward adjustment, and 
then substantially reduced fiscal penalties by changing how 
they are calculated. Each State's sanction is now determined by 
using a ``sliding scale'' so that its penalty assessment 
reflects the degree to which its combined error rate exceeds 
the new tolerance level; in effect, the current system requires 
that States be sanctioned for a portion of every benefit dollar 
that exceeds the (reduced) tolerance level. For example, if the 
tolerance level were 10 percent and the State's combined error 
rate were 11 percent, or 1 percentage point (10 percent) above 
the tolerance level, the State would be assessed a penalty 
equal to 0.1 percent of benefits issued in the State that year 
(10 percent of the excess above the threshold).
    The 1993 amendments also (1) lengthened the period during 
which States are held harmless for errors in implementing 
changes in Federal policy from 60 days (or 90 days at the 
Secretary's discretion) to 120 days, (2) required that an 
administrative law judge, rather than the Secretary, decide 
whether States have ``good cause'' to have all or part of their 
sanction waived, (3) extended the definition of good cause, (4) 
laid out specific time frames for quality control reviews, 
determining final error rates, and the appeals process, and (5) 
required that interest be assessed on outstanding liabilities 
if the administrative appeals process takes more than 1 year.
    This section would repeal the 1993 amendments, except for 
the provision giving administration law judges the power to 
decide on ``good cause'' claims.

Section 215. Work Supplementation or Support Program

    This section adds new sections 11(e)(27) and 16(j) to the 
Food Stamp Act that permit States having a work supplementation 
or support program, under which public assistance benefits are 
provided to employers who hire public assistance recipients and 
then are used to pay part of their wages, to include the cash 
value of a recipient's food stamp benefits in the amount paid 
the employer to subsidize the wage paid. Work supplementation/
support programs would be required to meet standards set by the 
Secretary in order to avail themselves of this provision, and 
the food stamp benefit value of the supplement would not be 
considered income for other purposes.

Section 216. Obligations and allotments

    This section provides that the amount obligated will not be 
in excess of the cost estimate of the Congressional Budget 
Office for the fiscal year ending September 30, 1996, with 
adjustments for additional fiscal years, in both cases 
reflecting amendments made by this Act. The Secretary is 
required to file quarterly reports stating whether there is a 
need for additional obligational authority. Also, the Secretary 
is authorized to provide adequate and appropriate 
recommendations on how to achieve reductions if allotments are 
limited in any fiscal year.

                     subtitle c--program integrity

Section 301. Authority to establish authorization periods for retail 
        food stores and wholesale food concerns

    This section requires the Secretary to establish specific 
time periods during which retail food stores' and wholesale 
food concerns' authorization to accept and redeem food stamps 
or redeem benefits through an electronic benefit transfer (EBT) 
system will be valid. Current law has no requirement that 
retailers and wholesalers be assigned authorization periods.

Section 302. Condition precedent to approval of retail food stores and 
        wholesale food concerns

    This section provides that no retail food stores or 
wholesale food concerns be approved for participation in the 
food stamp program unless an Agriculture Department employee 
(or, whenever possible, a state or local government official 
designated by the Department) has visited it. The Committee 
expects that participation by state or local officials will be 
voluntary.

Section 303. Waiting period for retail food stores and wholesale food 
        concerns denied approval to accept food coupons

    This section provides that retail food stores and wholesale 
food concerns that have failed to be approved for participation 
in the food stamp program may not submit a new application for 
approval for six months from the date they receive a notice of 
denial. Current law provisions granting denied retailers and 
wholesalers a hearing on the refusal are retained.

Section 304. Disqualified of retail food stores

    This section requires that a retail food store that is 
disqualified from participation in the Special Supplemental 
Nutrition Program for Women, Infants, and Children (WIC) also 
be disqualified from participating in the food stamp program 
for the period of time it is disqualified from the WIC program.

Section 305. Authority to suspend retail food stores and wholesale food 
        concerns violating program requirements pending administrative 
        and judicial review

    This section requires that, where a retail food store or 
wholesale food concern has been permanently disqualified for 
its third offense or for trafficking in food stamps benefits, 
the disqualification period will be effective from the date it 
receives notice of disqualification, pending administrative and 
judicial review.
Section 306. Criminal forfeiture

    This section replaces existing administrative forfeiture 
rules allowing the Secretary to subject property involved in a 
program violation with a criminal forfeiture requirement.
    It requires courts, in imposing sentence on those convicted 
of trafficking in food stamp benefits, that the person forfeit 
property to the United States (in addition to any other 
sentence imposed). 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; 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.
    This section also requires that the proceeds from any sale 
of forfeited properties, and any money forfeited, by used (1) 
to reimburse the Justice Department for costs incurred in 
initiating and completing forfeiture proceedings, (2) to 
reimburse the Agriculture Department's Office of Inspector 
General for costs incurred in the law enforcement effort that 
led to forfeiture, (3) to reimburse federal or state law 
enforcement agencies for costs incurred in the law enforcement 
effort that led to the forfeiture, and (4) by the Secretary to 
carry out store approval, reauthorization, and compliance 
activities.

Section 307. Expanded Definition of ``Coupon''

    This section revises the current definition of coupon to 
include authorization cards, cash or checks issued in lieu of 
coupons, and access devices (including electronic benefit 
transfer (EBT) cards and personal identification numbers) in 
order to expand the items to which trafficking penalties apply.

Section 308. Doubled penalties for violating Food Stamp Program 
        requirements

    This section increases the disqualification period for the 
first intentional violation of program requirements from six 
months to one year. It also increases the disqualification 
period for a second violation of program requirements and the 
first violation involving trading of a controlled substance 
from one year to two years.

Section 309. Disqualification of convicted individuals

    This section requires permanent disqualification of person 
convicted of trafficking in food stamp benefits where the value 
of benefits trafficked have a value of $500 or more.

Section 310. Claim collection

    This section requires collection of claims against 
recipients from federal income tax refunds and federal pay.

        subtitled--Effective dates and miscellaneous provisions

Section 401. Effective dates

    This section provides that all amendments take effect on 
October 1, 1995, except for (1) the amendments relating to the 
eligibility of aliens (effective October 1, 1996) and (2) the 
amendments relating to improving program management through 
changes in the quality control system (effective October 1, 
1994).

Section 402. Sense of the Congress

    This section provides that it is the Sense of Congress that 
states that operate electronic benefit transfer (EBT) systems 
should operate EBT systems that can interface with each other.

Section 403. Deficit reduction

    This section provides that it is the Sense of the House 
Committee on Agriculture 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 Control Act of 
1985.
                        Committee Consideration

                  committee and subcommittee hearings

    The Committee on Agriculture met on February 1, 1995. 
Agriculture Committee Chairman Pat Roberts stated that the 
purpose of the hearing was to review enforcement efforts in the 
food stamp program and that this must be accomplished prior to 
considering welfare reform.

February 1, 1995

    The first witness was Roger Viadero, the Inspector General 
of the U.S. Department of Agriculture (USDA). Inspector General 
Viadero testified on the efforts of his office to investigate 
food stamp and electronic benefit transfer (EBT) trafficking 
and laundering operations in non-authorized grocery stores, 
restaurants, and liquor stores. Video tapes of investigations 
in which officials of the Office of the Inspector General 
participated were shown to the Committee.
    The Inspector General also made recommendations for 
legislative and regulatory changes which he believed would 
enhance the integrity of the current Food Stamp Program. These 
recommendations included changing retailer eligibility 
criteria; submission of various tax or license forms to assure 
the retail food store is actually in operation; adding a one 
year waiting period for retailers prior to authorization; 
requiring a store visit by USDA's Food Consumer Service (FCS) 
staff prior to authorization; charging stores a licensing fee; 
authorizing the forfeiture of proceeds in felony food stamp 
fraud; and suspension and permanent program disqualification 
for retailers who traffic in food stamps.
    Congressman Ron Wyden, from Oregon, provided his 
recommendations for correcting existing abuses and systemic 
weaknesses in the food stamp program. Mr. Wyden advocated 
reform of the current system and cautioned against efforts to 
send this program to the states in the form of a block grant. 
He suggested that the Committee take a look at newly developed 
and emerging electronic technologies including biometric 
identification cards. He also expressed his support for program 
consolidation efforts.
    Mr. Robert Rasor, representing the U.S. Secret Service, 
summarized the investigations and research performed by the 
Financial Crimes Division of the Secret Service relating to 
fraud and abuse in the food stamp program. He reported that the 
Secret Service found very little evidence of counterfeiting in 
the program in the course of its investigations, but in its 
undercover investigations found the system to be quite 
vulnerable to other forms of abuse and fraud, such as 
embezzlement, recipient fraud, fraud by authorized retailers 
and trafficking in discounted food stamps by external parties. 
Mr. Rasor stressed the importance of incorporating new 
technologies in the form of EBT to minimize existing and future 
abuses to the food stamp program.
    The Subcommittee on Department Operations, Nutrition, and 
Foreign Agriculture met on February 7, 8, 9, and 14, 1995 to 
receive testimony on reforming the present welfare system. 
Subcommittee Chairman Bill Emerson expressed his desire to hear 
ideas on reforming the present welfare maintenance system from 
a wide variety of people.

February 7, 1995

    Ms. Jane L. Ross, Director, Income Securities Issues, 
Health, Education, and Human Services, General Accounting 
Office (GAO) testified regarding the status of Federal means 
tested welfare programs. She reported that nearly 80 means-
tested programs that compose the welfare system accounted for 
about 15 percent of Federal spending in fiscal year 1992. 
Federal welfare spending has risen from $39 billion in 1975 to 
nearly $208 billion in 1992. According to GAO's figures, growth 
in five major entitlement programs has driven this expansion. 
Aid to Families with Dependent Children (AFDC), food stamps, 
Medicaid, Supplemental Security Income (SSI) and two major 
housing programs resulting in a 106% increase in inflation 
adjusted dollars over this time period.
    The GAO's work has shown that these means-tested programs 
can be costly and difficult to administer. They sometimes 
overlap one another or are so narrowly focused that they create 
gaps in services. The task of applying for benefits is arduous 
and complex. Furthermore, they have found that technology to 
run the programs is not being effectively developed and used, 
and that many of these programs are inherently vulnerable to 
fraud, waste, and abuse. Finally, despite many years of 
experience with these programs, very little is known about how 
well they are working and whether the programs are meeting the 
purposes stated in the various acts.

February 8, 1995

    Congressman Michael N. Castle, from Delaware, urged the 
Subcommittee to consider the Delaware Model of ``one stop 
shopping'' as it reforms the nation's welfare delivery system. 
He describes Delaware's model as an innovative and 
comprehensive delivery system. The system consists of 
approximately 160 different welfare programs and serves, 
through its service centers, over 600,000 individuals annually. 
This agency has the mission of promoting access to health and 
human services, addressing and communicating the communities 
service needs, and providing access to support services. 
Congressman Castle cited the overlap in programs that result in 
a patchwork welfare system that restricts the effectiveness and 
efficiency with which the programs can be carried out.
    Mr. Thomas P. Eichler, Secretary of the Delaware Department 
of Services for Children, Youth, and Their Families, spoke on 
the Welfare Simplification and Coordination Advisory Committee 
authorized by Congress in the 1990 farm bill. Charged with 
examining policies and procedures of the food stamp, AFDC, 
medical assistance and housing assistance programs, the 
Advisory Committee made a series of recommendations for reform. 
The Advisory Committee recommended eliminating current programs 
and moving to one comprehensive program with the goal of moving 
participants toward self-sufficiency. Primary elements of the 
new program they recommended included (1) a single point of 
client entry, (2) common rules and definitions for 
participation, (3) a single means test for eligibility, and (4) 
a public and private partnership to provide coordinated 
services.
    The Honorable Ellen Haas, USDA Under Secretary for Food, 
Nutrition, and Consumer Services, spoke on the state of 16 food 
and nutrition programs for which she is responsible. She 
reiterated the Administration's position that nutrition 
programs for the needy are in the national interest and reform 
of these programs should ensure access to a healthy, nutritious 
diet and promote health. She insisted further that block 
granting these programs would eliminate the ``automatic 
adjuster'' currently in place and possibly force states to 
provide less assistance in times of economic downturn.
    Ms. Haas' recommendations for change included (1) nutrition 
security, (2) program integrity, (3) modernizing benefits 
delivery systems, (4) expanding state flexibility, (5) 
preserving economic responsiveness, and (6) promoting personal 
responsibility.
    The Honorable Mary Jo Bane, Health and Human Services (HHS) 
Assistant Secretary for Children and Families, testified in 
support of the Administration's 1994 welfare reform proposal. 
Her presentation covered three major issues; (1) the proper 
balance between national objectives and state flexibility; (2) 
the conversion of AFDC and the Food Stamp program to block 
grants or capped discretionary programs; and (3) national 
requirements or accountability standards governing a reformed 
welfare system. Ms. Bane recommended that in order to ensure 
greater state flexibility final reform should (1) achieve the 
objectives of work, responsibility and accountability; (2) 
ensure stability in funding over time; (3) cushion state and 
individuals against economic cycles; and (4) preserve the basic 
family protections for needy Americans, particularly children.
    Sister Augusta Hamel, the Executive Assistant to the 
President of Second Harvest National Network of Food Banks, the 
largest domestic hunger relief organization in the United 
States, reviewed the role of such organizations and the 
importance of the federal contribution to this network. Sister 
Hamel spoke of the need for private sector participation in 
dealing with the hunger problem in this country, but also 
stressed that federal participation has been critical to the 
success of these efforts and must continue. While reform is 
necessary, she stated that private resources are already pushed 
to the limit and some reform proposals may be asking more of 
the charitable sector than they can possibly deliver.
    On behalf of other organizations similar to Second Harvest, 
Sister Hamel suggested that rather than block granting the 
programs to the states, as currently proposed, commodity 
distribution programs should be consolidated and integrated. 
The programs include the emergency food assistance program 
(TEFAP), commodity supplemental food program (CSFP), soup 
kitchens and food banks program (SKFB), and the charitable 
institutions and summer camps program (CIP) into a single 
program: the American Commodity Hunger Relief Program (ACHR).
    Reverend Monseigneur Roger P. Morin, Executive Director, 
Department of Community Services, Archdiocese of New Orleans 
spoke in his capacity as Executive Director of the Department 
of Community Services in the Archdiocese of New Orleans. He 
advocated the retention of CSFP. He expressed the view that the 
tremendous purchasing power of the USDA combined with the cost 
effectiveness and efficiency of the volunteer distribution 
system give the taxpayer the highest return. Reverend William 
T. Cunningham, Director, of Focus Hope, another CSFP program 
operating in Detroit, Michigan, expressed support for 
preserving the CSFP because the program targets the nation's 
most vulnerable populations, the very young and the very old. 
CSFP in Detroit was described as a program that provides a 
monthly selection of foods specifically tailored to the 
nutritional needs of the populations served; purchases foods at 
one-half to one-sixth the cost of equivalent goods in retail 
stores; involves the entire community in the problems of hunger 
and poverty; and links job training, child care and other 
critical services for low-income families.
    Ms. Zoe Slagle, the Food Distribution Coordinator with the 
Michigan Department of Education testified on behalf of her 
Department and the American Commodity Distribution Association 
(ACDA). She advocated the preservation of the commodity 
distribution programs and reiterated the claims made by others, 
that while food and nutrition programs should be further 
streamlined for efficiency and effectiveness, federal programs 
still represent the highest return to the taxpayer because of 
the tremendous buying power of the federal government.

February 9, 1995

    The Honorable John Engler, Governor of Michigan, advocated 
placing food and nutrition programs into a single block grant 
to the states. He further maintained that because states know 
the needs of their people, they should be given the authority 
to plan and administer welfare programs that encourage and 
assist people into productive jobs and off of government 
assistance. In his experience, federal programs have had the 
opposite effect of encouraging recipients not to work. When the 
state of Michigan has sanctioned individuals who do not work by 
reducing their AFDC benefits, their food stamp allowances have 
gone up.
    Ms. Carol Anderson, Director of the Economic Support 
Services Section in the Georgia Division of Family and Children 
Services, discussed recent innovations and policy changes 
relating to the delivery of assistance benefits. Through the 
use of waivers from HHS and USDA, Ms. Anderson and others in 
her division have streamlined program access and have created 
``one-stop shopping'' for six state and federal programs. She 
addressed the new ``Work First'' strategy in which eligibility 
staff are trained to assess participants strengths and 
weaknesses in obtaining employment; contracts for self-
sufficiency that map our steps to economic independence; 
expedited child support services that are used to direct 
applicants from welfare to independence; and specialized job 
developers that are hired to work directly with employers.
    Ms. Anderson said that while a block grant is attractive, 
reduced funding levels in current proposals gave her cause for 
concern. However, if states knew what block granting would 
bring in terms of funding and if they knew that block granting 
would also bring increased flexibility, there could be more 
opportunities to create better programs.
    Mr. John Petraborg, Deputy Commissioner of the Minnesota 
Department of Human Services testified before the Subcommittee 
regarding welfare reform efforts underway in Minnesota. Its 
simplification and streamlining efforts feature the concepts of 
``Work Pays'' which allows families to keep part of their AFDC 
payments; an enforced social contract-requiring AFDC 
participants to develop a plan of employment and self-support; 
and a program that combines and simplifies the AFDC and food 
stamp programs.
    Ms. Sammie Lynn Puett, Vice President for Public Services 
at the Continuing Education, and University Relations of the 
University of Tennessee, testified of the work of the Welfare 
Simplification and Coordination Advisory Commission created by 
Congress in 1990. She reviewed the objectives of the Advisory 
Committee and the problems that remain for welfare reformers. 
The Advisory Committee concluded that the numerous and 
overlapping programs at both the state and federal level should 
be replaced by a single, one family-focused, client-oriented, 
comprehensive program.
    Ms. Joyce Walsh, of the Larue County Health Center in 
Hodgenville, Kentucky discussed her observations and 
experiences as a local Special Supplemental Program for Women, 
Infants, and Children (WIC) program coordinator. She stated 
that WIC has achieved its original objectives of reducing 
infant mortality and morbidity. She advocated the retention of 
WIC and also suggested combining the administration of WIC and 
the food stamp program. Ms. Walsh suggested that food 
prescriptions for the food stamp program, similar to those 
found in WIC, be developed. She stated that this would improve 
the nutritional status of needy families and could be done at a 
reduced cost.

February 14, 1995

    Congressman Tony Hall, from Ohio, testified in opposition 
to block grants to the states for AFDC, the food stamp program, 
WIC, and other nutrition programs. He said that under block 
grants food assistance would not be automatically increased in 
time of recession and that allocations to the states may be 
miscalculated. He stated state flexibility could be increased, 
fraud reduced, and the costs of the various programs reduced 
without block granting these programs.
    Congressman Ron Wyden, from Oregon discussed his 
recommendations for reducing fraud, waste and abuse in the food 
stamp program. He made three specific recommendations: (1) 
implementation of asset forfeiture laws similar to forfeiture 
provisions under anti-drug trafficking statutes, (2) submission 
of verifiable business license by authorized food stamp 
retailers, and (3) possible imposition of a certification fee 
on retailers to pay for the enforcement of anti-fraud efforts 
of this certification process.
    Mr. Robert Rector, Senior Policy Analyst for Welfare and 
Family Issues at The Heritage Foundation summarized the 
historical objectives, growth, and social and actual costs of 
the welfare system from 1930 to the present. He stated that 
welfare spending is now nine times greater than when President 
Lyndon Johnson launched the War on Poverty. In 1964, welfare 
spending absorbed 1.23% of Gross Domestic Product (GDP) and by 
1993, spending had risen to 5.1% of GDP. Mr. Rector described 
three objectives for welfare spending: (1) sustain living 
standards through cash and non-cash transfers, (2) promote 
self-sufficiency, and (3) aid economically distressed 
communities. He maintained that U.S. society can no longer 
tolerate or afford open-ended growth in welfare spending. His 
recommendations included phasing out welfare entitlements and 
sending the programs to the states in the form of a block 
grant.
    Ms. Anna Kondratas, Senior Fellow at the Hudson Institute, 
testified on the issue of welfare reform that would discourage 
illegitimacy, promote productivity, and preserve the family 
unit. She expressed the view that the current welfare system is 
seriously flawed and called for scrapping and replacing it with 
a system that gives more flexibility to the states to operate 
and even change AFDC. This reform should, in her view, be done 
gradually, preserving and combining programs that have proven 
successful. She also expressed support for devolution in the 
federalism debate, but cautioned that state and local 
bureaucracies are still bureaucracies, and many of them are not 
more efficient than federal ones.
    Mr. Mark Greenberg, of the Center for Law and Social Policy 
testified on the issue of welfare reform as it relates to food 
stamp program reform. He made four principal points: (1) the 
food stamp program has a different purpose, structure, and 
serves a much broader population than the AFDC program; (2) 
block-granting food stamps would seriously undercut the 
program's basic purpose; (3) block-granting the AFDC-related 
portion of food stamps raises additional difficulties; and (4) 
in light of imminent changes in AFDC, the food stamp program's 
role as a safety net becomes even more crucial.
    Mr. Robert Greenstein, the Executive Director of the Center 
on Budget and Policy Priorities expressed the view that while 
welfare reform must take place, block grants are ill conceived 
and will jeopardize existing programs and harm those they are 
intended to help. Mr. Greenstein made recommendations for 
increasing flexibility and controlling costs without resorting 
to block grants. States, he said, should be allowed (1) to 
align food stamp employment and training programs with work 
activities for AFDC recipients; (2) to modify rules determining 
income and resources; (3) additional flexibility to simplify or 
standardize procedures for determining food stamp benefit 
levels of AFDC families; (4) to convert food stamp benefits to 
wage subsidies for employees; (5) to have impediments to EBT 
systems removed; and (6) to remove dozens of unnecessary and 
prescriptive state requirements.
    Mr. Robert J. Fersh, President of the Food Research and 
Action Center, discussed the treatment of current participants 
in the food assistance programs and sought assurances that the 
new nutrition programs will meet the objectives of the current 
system. He also addressed the issue of national consensus on 
hunger and malnutrition prevention, minimum nutrition 
requirements for all 50 states, the food stamp program's 
responsiveness in times of economic change; and advantages of 
maintaining a national food stamp program.
    Mr. Timothy M. Hammonds, President and CEO of the Food 
Marketing Institute, recommended changes that would lead to 
reduction of fraud and abuse, enhancement of the dignity of the 
programs, and reduction of both public and private 
administrative costs. He recommended that current food 
assistance coupons not be issued in cash, but that EBT systems 
be implemented as quickly as possible, that national uniformity 
in the food assistance program should be a goal, and licensing 
requirements for participating retailers should not be 
restrictive. The Honorable John R. Block, National-American 
Wholesale Grocers' Association (NAWGA) and former Secretary of 
Agriculture, expressed support for efforts aimed at block 
granting welfare programs to the states. He opposed proposals 
which cash out the food stamp program to the states and instead 
expressed support for maintaining the food stamp coupon/EBT 
delivery system.
    Mr. William C. Ferriera, President of the Apricot Producers 
of California and representing the Commodity Distribution 
Coalition, encouraged reform of programs but not discontinuance 
of federal food assistance programs. He endorsed the 
consolidation plan as proposed by Second Harvest; recommended a 
complete review of program administration and technology 
utilization; encouraged making the commodity support component 
of federal food assistance programs available to other 
programs; advocated preserving nutrition standards for school 
meal programs; and recommended that U.S. agriculture 
commodities be purchased for domestic food assistance programs.
    Reverend Robert A. Sirico of the Acton Institute for the 
Study of Religion and Liberty discussed his belief that the 
federal government has almost entirely usurped the traditional 
role of religious institutions and charity. He advocated 
reforming the current welfare system by taking the function of 
charity from the government and returning it to the family and 
churches who understand the most basic needs of people. 
Reverend Frederick Kammer, the President of the Catholic 
Charities USA, cautioned against cashing out or block granting 
food stamps. He stated that the food stamp program is the place 
of last resort for the poorest and most desperate. Churches and 
charities, he said, are incapable of handling the present 
hunger problems.
    Ms. Virginia White, of the Kansas Food Bank Warehouse, 
Inc., advocated keeping the food stamp program and other food 
programs in their current form and suggested that Members seek 
the support of Governors for a plan that would provide a food 
insurance safety net. Ms. Jasmine Gunthorpe of Baltimore, 
Maryland described her personal difficulties living and 
functioning within the current AFDC system. She works in a 
nine-month, part-time-minimum wage, contractual position. If 
her work exceeds AFDC income levels, she loses AFDC benefits 
for that period, requiring her to reapply for AFDC benefits for 
the three months she is not working. She expressed frustration 
at having different social workers who estimate benefits, 
calculate wages, assess food stamp needs, and who help with 
child care. She recommended reforms that provide for basic 
needs for children; reduction in poverty not just a reduction 
of individuals from the welfare rolls; and efforts to bring 
people into the mainstream of life. Mr. D. Michael Hancock of 
the Farmworker Justice Fund stated that in the event that food 
and nutrition programs are block granted to the states, states 
should be directed to ensure inclusion of farm workers in these 
programs. He also called for educating farm workers on food and 
nutrition programs and for bilingual program counselors.

                            Committee Markup

    Pursuant to Committee Rule VI c., H.R. 1135, the Food Stamp 
Program and Commodity Distribution Act, was considered by the 
Committee in an open business meeting on March 7, 1995.
    The Chairman called the meeting to order at 9:30 a.m. and 
stated that a copy of the bill and section-by-section analysis 
of the bill was available to each Member at his place on the 
rostrum. The Chairman then recognized Congressman Gunderson who 
moved, consistent with clause 4 of House Rule XI, that the 
Chairman would be authorized to recess the Committee from time 
to time during the markup of the bill as necessary for Members 
to respond to votes on the Floor and for other purposes. The 
motion was adopted by voice vote.
    Thereafter, the Chairman, Ranking Minority Member, Mr. de 
la Garza, and Chairman of the Subcommittee on Department 
Operations, Nutrition and Foreign Agriculture, Mr. Emerson, 
either gave or were recognized for opening statements. The 
Chairman stated that because of time constraints other Members 
were requested to file their statements in the record of the 
markup and that Committee staff would assist in making their 
statements available to the press. The Chairman also advised 
the Members that the Congressional Budget Office (CBO) had 
advised the Committee that a cost estimate of the bill would 
not be available until later in the day or the next day despite 
delivery of the substance of the bill to such Office prior to 
March 3rd.
    Mr. Volkmer made a motion that the Committee postpone 
consideration of H.R. 1135 until 9:30 a.m., Wednesday, March 8, 
1995. By a recorded vote, the Volkmer motion was not agreed to. 
See Roll Call Vote No. 1.
    At this point, Mr. Emerson offered an Amendment in the 
Nature of a Substitute to H.R. 1135, and without objection, the 
Amendment in the Nature of a Substitute was opened for 
amendment at any point. A section-by-section analysis of such 
Amendment was provided to Members.
    Mr. de la Garza, on behalf of himself and Mr. Roberts, 
offered and explained an amendment addressing program integrity 
and the issue of fraud in the food stamp program. Discussion 
occurred and by voice vote, the Roberts-de la Garza amendment 
was adopted.
    Mr. Hostettler offered and explained an amendment to (1) 
repeal the Food Stamp Act of 1977 and block grant the funds to 
the States; (2) freeze funding at the FY 95 outlay level (CBO 
estimate is $26,245 billion); (3) provide $18.6 billion in 
savings over five years (based on CBO baseline); and (4) 
include a work provision calling for 32 hours of work per month 
for able-bodied persons under 60, excluding single parents with 
children at home. Discussion occurred and by a recorded vote of 
5 yeas to 37 nays, the Hostettler amendment was not adopted. 
See Roll Call Vote No. 2.
    Mr. LaHood asked unanimous consent that all amendments be 
considered thereafter with no more than 15 minutes to be spent 
on each amendment. Discussion occurred and an objection was 
heard.
    Mr. Stenholm offered and explained an amendment regarding 
the treatment of reductions in expenditures for budget 
purposes, which stated that the net reduction in outlays 
produced by the Act shall be used to reduce the deficit. A 
point of order was raised against the amendment as being 
nongermane. The Chairman ruled that the amendment was not in 
order and was outside the jurisdiction of the Committee and the 
objection was sustained.
    Mr. Stenholm then offered an amendment concerning the Sense 
of the Committee regarding deficit reduction. Mr. Stenholm 
indicated that the purpose of this amendment was to see that 
whatever savings result from Committee action on H.R. 1135 
would not be used for purpose of any tax reduction. By an 
unanimous voice vote, the Stenholm amendment was adopted.
    Mr. Smith on behalf of himself and Mr. Foley offered and 
explained an amendment concerning the definition of food which 
could be purchased with food stamp coupons. Discussion occurred 
and the amendment by a voice vote was not adopted. Mr. Smith 
requested a roll call vote, but an insufficient number of 
Members were in favor of a roll call vote.
    Mr. Brown offered and explained an amendment which would 
protect benefits to children under the simplified food stamp 
program and a low-income nutrition assistance program operated 
by a state. Discussion occurred. A question was raised about 
the amendments affect on harmonizing the AFDC and food stamp 
reforms. By a recorded vote of 16 yeas to 26 nays, the Brown 
amendment was not adopted. See Roll Call Vote #3.
    Mr. Allard offered and explained an amendment concerning 
commodities that should be considered as income for purposes of 
reflecting total household income during the collection and 
report of census data. Mr. Volkmer raised a point of order that 
the Allard amendment was not germane to the general purpose of 
the bill. Discussion occurred and without objection Mr. Allard 
withdrew his amendment.
    Mr. Farr was recognized and asked unanimous consent to 
present three amendments en bloc. Discussion occurred and by 
unanimous consent Mr. Farr asked that the three amendments be 
considered separately. Mr. Farr also asked unanimous consent 
that an amendment concerning work requirements for food stamp 
recipients be withdrawn from the three offered as a compromise 
was being worked out.
    Mr. Farr then offered and explained an amendment concerning 
the protection of the food stamp program during periods of high 
unemployment, and explained that the amendment would remove the 
cap for any fiscal year in which unemployment exceeded 6.5 
percent in any month from October through May. Lengthy 
discussion occurred and by a recorded vote, 14 yeas to 28 nays, 
the Farr amendment was not adopted. See Roll Call Vote No. 4.
    Without objection, Mr. Farr withdrew his amendment 
concerning protecting benefits to elderly or disabled members 
under the simplified food stamp program and a low-income 
nutrition assistance program operated in a State. No objection 
was heard.
    Mr. Farr was recognized to offer and explain a compromise 
amendment for himself, Mr. Gunderson, and Mrs. Thurman. The 
amendment concerned work requirements which would allow those 
who were participating in a program of employment and or 
participating in a training program to still be eligible for 
food stamps. Discussion occurred and by a voice vote, the Farr 
amendment was adopted.
    Mr. Gunderson offered and explained an amendment that would 
retain the right of state agencies under current law to have an 
administrative law judge review determinations by the Secretary 
concerning the existence of good cause for a failure to meet 
error rate tolerance levels. Discussion occurred and by a 
voice, vote, the Gunderson amendment was adopted.
    Mrs. Thurman was recognized to offer and explain an 
amendment which stated that in no event shall benefit levels 
fall below a floor of 100 percent of the Thrifty Food Plan. 
Discussion occurred and without objection, Mrs. Thurman 
withdrew her amendment.
    Mrs. Thurman then offered and explained an amendment that 
would adjust the Thrifty Food Plan by 100.6 percent in June, 
1995, and 100 percent on October 1, 1996, and each October 1, 
thereafter. Mrs. Thurman advised the Committee that this 
amendment would achieve the same savings over five years as the 
provisions of the Amendment in the Nature of a Substitute. 
Discussion occurred and by a recorded vote of 18 yeas to 24 
nays, the Thurman amendment was not adopted. See Roll Call Vote 
No. 5.
    Mr. Gunderson was then recognized and asked unanimous 
consent to replace the Farr-Gunderson-Thurman amendment 
previously adopted with a technically correct version of that 
amendment concerning work requirements. Mr. Gunderson and Mrs. 
Thurman advised the Committee that there would be report 
language which would define the condition under which job 
search qualifies as employment in this section as amended. 
Without objection, the Gunderson amendment was adopted.
    Mrs. Clayton was recognized to offer and explain two 
amendments en bloc which would (1) strike the AFDC 
simplification plan and (2) strike the electronic benefit 
transfer block grant. Mrs. Clayton advised the Committee that 
the intent of her amendment was not to strike availability of 
the electronic transfer system but it was not to use that as an 
incentive to block grant food stamps. Discussion occurred and 
by a voice vote, the Clayton amendment was not adopted.
    Without objection, Mr. Goodlatte was allowed to offer four 
amendments en bloc. The first amendment was a Sense of the 
Congress that states shall operate electronic benefit systems 
which are compatible with each other; the second amendment 
concerned disqualification of retail food stores and wholesale 
food concerns and stated that retail food stores and wholesale 
food concerns disqualified from the WIC program would also be 
disqualified from the food stamp program; the third amendment 
concerned a condition precedent for approval of retail food 
stores and wholesale food concerns; and the fourth amendment 
concerned disqualification of convicted individuals for 
entitlement. discussion occurred and by a voice vote, the en 
bloc amendments were adopted.
    Mr. Pastor was recognized and offered an amendment 
concerning the age of exemption of elderly persons from the new 
alien rule. Discussion occurred and by voice vote, the Pastor 
amendment was not adopted.
    Mr. Pastor then offered an amendment concerning children 
and pregnant women eligibility under the new alien rule. 
Discussion occurred and by voice vote, the Pastor amendment was 
not adopted.
    Mr. Pastor also offered and explained an amendment 
concerning children eligibility under new alien rule. 
Discussion occurred and by a recorded vote of 19 yeas, 24 nays, 
and 1 present, the Pastor amendment was not adopted. See Roll 
Call Vote No. 6.
    Mr. Smith was recognized to offer and explain an amendment 
concerning income standards of eligibility and a Food Stamp 
contingency reserve fund. The amendment would reduce the 
eligibility from 130 percent of poverty down to 120 percent of 
poverty, and the savings estimated by USDA were approximately 
$500 million a year for the amendment. Discussion occurred and 
without objection, Mr. Smith withdraw his amendment.
    Mrs. Clayton was recognized to offer and explain an 
amendment concerning work requirements by allowing the job 
search cutoff period to be extended from 90 days to 180 days. 
After discussion which indicated that this issue was addressed 
in the Farr-Gunderson-Thurman amendment, Mrs. Clayton requested 
by unanimous consent to withdraw her amendment. There was no 
objection to the request.
    Mrs. Thurman was recognized to offer and explain an 
amendment concerning Food Stamp Employment and Training Program 
that adds $75 million to the workfare program under the 
Amendment in the Nature of a Substitute. Mr. Gunderson advised 
the Committee that the Economic and Educational Opportunities 
Committee would soon be considering a comprehensive 
consolidation of the many jobs training programs. At that 
point, without objection, Mrs. Thurman withdrew her amendment.
    Mr. Pomeroy was recognized to offer and explain an 
amendment concerning income deductions and energy assistance. 
Discussion occurred and by a recorded vote of 14 yeas to 30 
nays, the Pomeroy amendment was not adopted. See Roll Call Vote 
No. 7.
    Mrs. Thurman was then recognized to offer and explain an 
amendment concerning the vehicle allowance under the food stamp 
program and indicated that she was likely to bring this issue 
up again on the Floor. Discussion occurred and by a voice vote, 
the Thurman amendment was not adopted.
    Mrs. Clayton was recognized to offer and explain an 
amendment concerning the calculation of hours that a food stamp 
recipient is required to work under a state program. Discussion 
occurred and by a voice vote, the Clayton amendment was 
adopted.
    Mr. Stenholm was recognized to offer and explain an 
amendment concerning treatment of reductions in cost of the 
food stamp program for budget purposes. Without objection, Mr. 
Stenholm asked that his amendment read: ``The net reduction in 
outlays produced by this Act shall revert to the Treasury.'' 
Discussion occurred and by a recorded vote of 21 yeas to 23 
nays, the Stenholm amendment was not adopted. See Roll Call 
Vote No. 8.
    Mr. Volkmer was recognized to offer an amendment concerning 
the official heading of the titles in the Amendment in the 
Nature of a A Substitute. Discussion occurred and by a recorded 
vote of 1 yea, 38 nays, and 5 present, the Volkmer amendment 
was not adopted. See Roll Call Vote No. 9.
    Mr. de la Garza was recognized and he offered a oral 
amendment which would use the term ``jobs'' instead of the term 
`'workfare'' in the Amendment in the Nature of a Substitute. 
Discussion occurred and by a voice vote the de la Garza 
amendment was adopted.
    By a voice vote, H.R. 1135, as amended was adopted. Mr. 
Emerson requested a recorded vote. By a roll call vote of 26 
yeas to 18 nays, and in the presence of a quorum, H.R. 1135 was 
ordered reported favorably to the House. See Roll Call Vote No. 
10.
    The Chairman thanked the Members for their perseverance and 
patience, and the meeting was adjourned at 12:42 a.m.
                            Roll Call Votes

    In compliance with clause 2(l)(2)(B) of rule XI of the 
House of Representatives, the Committee sets forth the record 
of the following roll call votes taken with respect to H.R. 
1135:

Roll Call No. 1

    Summary: Motion that the Committee postpone further 
consideration of H.R. 1135 until 9:30 a.m. on Wednesday, March 
8, 1995.
    Offered By: Mr. Volkmer.
    Results: Failed by roll call vote: 19 yeas/23 nays/7 not 
voting.

                                  YEAS

1. Cong. de la Garza                11. Cong. Pomeroy
2. Cong. Rose                       12. Cong. Holden
3. Cong. Stenholm                   13. Cong. Baesler
4. Cong. Volkmer                    14. Cong. Thurman
5. Cong. Johnson                    15. Cong. Bishop
6. Cong. Peterson                   16. Cong. Thompson
7. Cong. Dooley                     17. Cong. Farr
8. Cong. Clayton                    18. Cong. Pastor
9. Cong. Minge                      19. Cong. Baldacci
10. Cong. Hilliard

                                  NAYS

1. Cong. Emerson                    13. Cong. Lewis
2. Cong. Gunderson                  14. Cong. Crapo
3. Cong. Combest                    15. Cong. Calvert
4. Cong. Allard                     16. Cong. Chenoweth
5. Cong. Barrett                    17. Cong. Hostettler
6. Cong. Boehner                    18. Cong. Bryant
7. Cong. Ewing                      19. Cong. Latham
8. Cong. Doolittle                  20. Cong. Cooley
9. Cong. Goodlatte                  21. Cong. Foley
10. Cong. Pombo                     22. Cong. LaHood
11. Cong. Canady                    23. Cong. Roberts, Chairman
12. Cong. Lucas

                               NOT VOTING

1. Cong. Smith                      5. Cong. Brown
2. Cong. Everett                    6. Cong. Condit
3. Cong. Baker                      7. Cong. McKinney
4. Cong. Chambliss

Roll Call No. 2

    Summary: Amendment concerning a Food Stamp Block Grant 
Program.
    Offered By: Mr. Hostettler.
    Results: Failed by a roll call vote: 5 yeas/37 nays/7 not 
voting.

                                  YEAS

1. Cong. Doolittle                  4. Cong. Hostettler
2. Cong. Goodlatte                  5. Cong. Bryant
3. Cong. Chenoweth

                                  NAYS

1. Cong. Emerson                    20. Cong. LaHood
2. Cong. Gunderson                  21. Cong. Brown
3. Cong. Allard                     22. Cong. Stenholm
4. Cong. Barrett                    23. Cong. Volkmer
5. Cong. Boehner                    24. Cong. Johnson
6. Cong. Ewing                      25. Cong. Peterson
7. Cong. Pombo                      26. Cong. Dooley
8. Cong. Canady                     27. Cong. Clayton
9. Cong. Smith                      28. Cong. Hilliard
10. Cong. Everett                   29. Cong. Pomeroy
11. Cong. Lucas                     30. Cong. Holden
12. Cong. Lewis                     31. Cong. Baesler
13. Cong. Baker                     32. Cong. Thurman
14. Cong. Crapo                     33. Cong. Bishop
15. Cong. Calvert                   34. Cong. Thompson
16. Cong. Latham                    35. Cong. Farr
17. Cong. Cooley                    36. Cong. Pastor
18. Cong. Foley                     37. Cong. Roberts, Chairman
19. Cong. Chambliss

                               NOT VOTING

1. Cong. Combest                    5. Cong. Minge
2. Cong. de las Garza               6. Cong. McKinney
3. Cong. Rose                       7. Cong. Baldacci
4. Cong. Condit
Roll Call No. 3

    Summary: Amendment to protect benefits to children under 
the simplified food stamp program and a low-income nutrition 
assistance program operated by a state.
    Offered By: Mr. Brown.
    Results: Failed by a roll call vote: 16 yeas/26 nays/7 not 
voting.

                                  yeas

1. Cong. de la Garza                 9. Cong. Hilliard
2. Cong. Brown                      10. Cong. Pomeroy
3. Cong. Stenholm                   11. Cong. Holden
4. Cong. Volkmer                    12. Cong. Thurman
5. Cong. Johnson                    13. Cong. Bishop
6. Cong. Dooley                     14. Cong. Farr
7. Cong. Clayton                    15. Cong. Pastor
8. Cong. Minge                      16. Cong. Baldacci

                                  nays

 1. Cong. Emerson                   14. Cong. Baker
 2. Cong. Gunderson                 15. Cong. Crapo
 3. Cong. Allard                    16. Cong. Calvert
 4. Cong. Barrett                   17. Cong. Chenoweth
 5. Cong. Ewing                     18. Cong. Hostettler
 6. Cong. Doolittle                 19. Cong. Bryant
 7. Cong. Goodlatte                 20. Cong. Latham
 8. Cong. Pombo                     21. Cong. Foley
 9. Cong. Canady                    22. Cong. Chambliss
10. Cong. Smith                     23. Cong. LaHood
11. Cong. Everett                   24. Cong. Peterson
12. Cong. Lucas                     25. Cong. Baesler
13. Cong. Lewis                     26. Cong. Roberts, Chairman

                               not voting

1. Cong. Combest                    5. Cong. Condit
2. Cong. Boehner                    6. Cong. McKinney
3. Cong. Cooley                     7. Cong. Thompson
4. Cong. Rose

Roll Call No. 4

    Summary: Amendment concerning the protection of the food 
stamp program in periods of high unemployment which would 
remove the cap for any fiscal year in which unemployment 
exceeds 6.5 percent in any month from October through May.
    Offered By: Mr. Farr.
    Results: Failed by a roll call vote: 14 yeas/28 nays/7 not 
voting.

                                  yeas

1. Cong. de la Garza                 8. Cong. Pomeroy
2. Cong. Stenholm                    9. Cong. Holden
3. Cong. Volkmer                    10. Cong. Thurman
4. Cong. Johnson                    11. Cong. Bishop
5. Cong. Clayton                    12. Cong. Farr
6. Cong. Minge                      13. Cong. Pastor
7. Cong. Hilliard                   14. Cong. Baldacci

                                  nays

 1. Cong. Emerson                   15. Cong. Crapo
 2. Cong. Gunderson                 16. Cong. Calvert
 3. Cong. Allard                    17. Cong. Chenoweth
 4. Cong. Barrett                   18. Cong. Hostettler
 5. Cong. Ewing                     19. Cong. Bryant
 6. Cong. Doolittle                 20. Cong. Latham
 7. Cong. Goodlatte                 21. Cong. Cooley
 8. Cong. Pombo                     22. Cong. Foley
 9. Cong. Canady                    23. Cong. Chambliss
10. Cong. Smith                     24. Cong. LaHood
11. Cong. Everett                   25. Cong. Peterson
12. Cong. Lucas                     26. Cong. Dooley
13. Cong. Lewis                     27. Cong. Baesler
14. Cong. Baker                     28. Cong. Roberts, Chairman

                               not voting

1. Cong. Combest                    5. Cong. Condit
2. Cong. Boehner                    6. Cong. McKinney
3. Cong. Brown                      7. Cong. Thompson
4. Cong. Rose
Roll Call No. 5

    Summary: Amendment to adjust the Thrifty Food Plan by 100.6 
percent in June, 1995, and 100 percent in October 1, 1996, and 
each October thereafter.
    Offered By: Mrs. Thurman.
    Results: Failed by a roll call vote: 18 yeas/24 nays/7 not 
voting.

                                  yeas

1. Cong. de la Garza                10. Cong. Pomeroy
2. Cong. Stenholm                   11. Cong. Holden
3. Cong. Volkmer                    12. Cong. Baesler
4. Cong. Johnson                    13. Cong. Thurman
5. Cong. Peterson                   14. Cong. Bishop
6. Cong. Dooley                     15. Cong. Thompson
7. Cong. Clayton                    16. Cong. Farr
8. Cong. Minge                      17. Cong. Pastor
9. Cong. Hilliard                   18. Cong. Baldacci

                                  nays

 1. Cong. Emerson                   13. Cong. Lewis
 2. Cong. Gunderson                 14. Cong. Baker
 3. Cong. Allard                    15. Cong. Crapo
 4. Cong. Barrett                   16. Cong. Calvert
 5. Cong. Ewing                     17. Cong. Chenoweth
 6. Cong. Doolittle                 18. Cong. Hostettler
 7. Cong. Goodlatte                 19. Cong. Bryant
 8. Cong. Pombo                     20. Cong. Latham
 9. Cong. Canady                    21. Cong. Foley
10. Cong. Smith                     22. Cong. Chambliss
11. Cong. Everett                   23. Cong. LaHood
12. Cong. Lucas                     24. Cong. Roberts, Chairman

                               not voting

1. Cong. Combest                    5. Cong. Rose
2. Cong. Boehner                    6. Cong. Condit
3. Cong. Cooley                     7. Cong. McKinney
4. Cong. Brown

Roll Call No. 6

    Summary: Amendment concerning children eligibility under 
new alien rule.
    Offered By: Mr. Pastor
    Results: Failed by a roll call vote: 19 yeas/24 nays/1 
present/5 not voting.

                                  yeas

 1. Cong. de la Garza               11. Cong. Pomeroy
 2. Cong. Stenholm                  12. Cong. Holden
 3. Cong. Volkmer                   13. Cong. Baesler
 4. Cong. Johnson                   14. Cong. Thurman
 5. Cong. Condit                    15. Cong. Bishop
 6. Cong. Peterson                  16. Cong. Thompson
 7. Cong. Dooley                    17. Cong. Farr
 8. Cong. Clayton                   18. Cong. Pastor
 9. Cong. Minge                     19. Cong. Baldacci
10. Cong. Hilliard

                                  nays

 1. Cong. Emerson                   13. Cong. Lewis
 2. Cong. Gunderson                 14. Cong. Baker
 3. Cong. Allard                    15. Cong. Crapo
 4. Cong. Barrett                   16. Cong. Calvert
 5. Cong. Ewing                     17. Cong. Chenoweth
 6. Cong. Doolittle                 18. Cong. Hostettler
 7. Cong. Goodlatte                 19. Cong. Bryant
 8. Cong. Pombo                     20. Cong. Latham
 9. Cong. Canady                    21. Cong. Cooley
10. Cong. Smith                     22. Cong. Foley
11. Cong. Everett                   23. Cong. Chambliss
12. Cong. Lucas                     24. Cong. Roberts, Chairman

                                present

1. Cong. LaHood

                               not voting

1. Cong. Combest                    5. Cong. McKinney
2. Cong. Boeher
3. Cong. Brown
4. Cong. Rose
Roll Call No. 7

    Summary: Amendment concerning income deductions and energy 
assistance.
    Offered By: Mr. Pomeroy.
    Results: Failed by a roll call vote: 14 yeas/30 nays/5 not 
voting.

                                  yeas

1. Cong. de la Garza                 8. Cong. Holden
2. Cong. Volkmer                     9. Cong. Thurman
3. Cong. Johnson                    10. Cong. Bishop
4. Cong. Clayton                    11. Cong. Thompson
5. Cong. Minge                      12. Cong. Farr
6. Cong. Hilliard                   13. Cong. Pastor
7. Cong. Pomeroy                    14. Cong. Baldacci

                                  nays

 1. Cong. Emerson                   16. Cong. Calvert
 2. Cong. Gunderson                 17. Cong. Chenoweth
 3. Cong. Allard                    18. Cong. Hostettler
 4. Cong. Barrett                   19. Cong. Bryant
 5. Cong. Ewing                     20. Cong. Latham
 6. Cong. Doolittle                 21. Cong. Cooley
 7. Cong. Goodlatte                 22. Cong. Foley
 8. Cong. Pombo                     23. Cong. Chambliss
 9. Cong. Canady                    24. Cong. LaHood
10. Cong. Smith                     25. Cong. Stenholm
11. Cong. Everett                   26. Cong. Condit
12. Cong. Lucas                     27. Cong. Peterson
13. Cong. Lewis                     28. Cong. Dooley
14. Cong. Baker                     29. Cong. Baesler
15. Cong. Crapo                     30. Cong. Roberts, Chairman

                               not voting

1. Cong. Combest                    5. Cong. McKinney
2. Cong. Boehner
3. Cong. Brown
4. Cong. Rose

Roll Call No. 8

    Summary: Amendment concerning treatment of reductions for 
budget purposes.
    Offered By: Mr. Stenholm.
    Results: Failed by a roll call vote: 21 yeas/23 nays/5 not 
voting.

                                  yeas

 1. Cong. Gunderson                 12. Cong. Hilliard
 2. Cong. LaHood                    13. Cong. Pomeroy
 3. Cong. de la Garza               14. Cong. Holden
 4. Cong. Stenholm                  15. Cong. Baesler
 5. Cong. Volkmer                   16. Cong. Thurman
 6. Cong. Johnson                   17. Cong. Bishop
 7. Cong. Condit                    18. Cong. Thompson
 8. Cong. Peterson                  19. Cong. Farr
 9. Cong. Dooley                    20. Cong. Pastor
10. Cong. Clayton                   21. Cong. Baldacci
11. Cong. Minge

                                  nays

 1. Cong. Emerson                   13. Cong. Baker
 2. Cong. Allard                    14. Cong. Crapo
 3. Cong. Barrett                   15. Cong. Calvert
 4. Cong. Ewing                     16. Cong. Chenoweth
 5. Cong. Doolittle                 17. Cong. Hostettler
 6. Cong. Goodlatte                 18. Cong. Bryant
 7. Cong. Pombo                     19. Cong. Latham
 8. Cong. Canady                    20. Cong. Cooley
 9. Cong. Smith                     21. Cong. Foley
10. Cong. Everett                   22. Cong. Chambliss
11. Cong. Lucas                     23. Cong. Roberts, Chairman
12. Cong. Lewis

                               not voting

1. Cong. Combest                    5. Cong. McKinney
2. Cong. Boehner
3. Cong. Brown
4. Cong. Rose
Roll Call No. 9

    Summary: Amendment concerning the official naming of titles 
in the Emerson Substitute.
    Offered By: Mr. Volkmer.
    Results: Failed by a roll call vote: 1 yea/38 nays/5 
present/5 not voting.

                                  yeas

1. Cong. Volkmer

                                  nays

1. Cong. Emerson                    20. Cong. Latham
2. Cong. Gunderson                  21. Cong. Cooley
3. Cong. Allard                     22. Cong. Foley
4. Cong. Barrett                    23. Cong. Chambliss
5. Cong. Ewing                      24. Cong. LaHood
6. Cong. Doolittle                  25. Cong. de la Garza
7. Cong. Goodlatte                  26. Cong. Stenholm
8. Cong. Pombo                      27. Cong. Johnson
9. Cong. Canady                     28. Cong. Condit
10. Cong. Smith                     29. Cong. Peterson
11. Cong. Everett                   30. Cong. Dooley
12. Cong. Lucas                     31. Cong. Minge
13. Cong. Lewis                     32. Cong. Pomeroy
14. Cong. Baker                     33. Cong. Holden
15. Cong. Crapo                     34. Cong. Baesler.
16. Cong. Calvert                   35. Cong. Thurman
17. Cong. Chenoweth                 36. Cong. Pastor
18. Cong. Hostettler                37. Cong. Baldacci
19. Cong. Bryant                    38. Cong. Roberts, Chairman

                                present

1. Cong. Clayton                    4. Cong. Thompson
2. Cong. Hilliard                   5. Cong. Farr
3. Cong. Bishop

                               not voting

1. Cong. Combest                    5. Cong. McKinney
2. Cong. Boehner
3. Cong. Brown
4. Cong. Rose

Roll Call No. 10

    Summary: Final passage of the Amendment in the Nature of a 
Substitute, as amended.
    Offered By: Mr. Emerson.
    Results: Passed by a roll call vote: 26 yeas/18 nays/5 not 
voting.

                                  yeas

 1. Cong. Emerson                   14. Cong. Baker
 2. Cong. Gunderson                 15. Cong. Crapo
 3. Cong. Allard                    16. Cong. Calvert
 4. Cong. Barrett                   17. Cong. Chenoweth
 5. Cong. Ewing                     18. Cong. Hostettler
 6. Cong. Doolittle                 19. Cong. Bryant
 7. Cong. Goodlatte                 20. Cong. Latham
 8. Cong. Pombo                     21. Cong. Cooley
 9. Cong. Canady                    22. Cong. Foley
10. Cong. Smith                     23. Cong. Chambliss
11. Cong. Everett                   24. Cong. LaHood
12. Cong. Lucas                     25. Cong. Baesler
13. Cong. Lewis                     26. Cong. Roberts, Chairman

                                  nays

1. Cong. de la Garza                10. Cong. Hilliard
2. Cong. Stenholm                   11. Cong. Pomeroy
3. Cong. Volkmer                    12. Cong. Holden
4. Cong. Johnson                    13. Cong. Thurman
5. Cong. Condit                     14. Cong. Bishop
6. Cong. Peterson                   15. Cong. Thompson
7. Cong. Dooley                     16. Cong. Farr
8. Cong. Clayton                    17. Cong. Pastor
9. Cong. Minge                      18. Cong. Baldacci

                               not voting

1. Cong. Combest                    5. Cong. McKinney
2. Cong. Boehner
3. Cong. Brown
4. Cong. Rose
          Budget Act Compliance (Section 308 and Section 403)

    The provisions of clause 2(l)(3)(B) of rule XI of the Rules 
of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 (relating to estimates of new 
budget authority, new spending authority, or new credit 
authority, or increased or decreased revenues or tax 
expenditures) are not considered applicable. The estimate and 
comparison required to be prepared by the Director of the 
Congressional Budget Office under clause 2(l)(C)(3) of rule XI 
of the Rules of the House of Representatives and section 403 of 
the Congressional Budget Act of 1974 submitted to the Committee 
prior to the filing of this report are as follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 14, 1995.
Hon. Pat Roberts,
Chairman, Committee on Agriculture,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 1135, the Food Stamp Reform and Commodity 
Distribution Act, as ordered reported by the House Committee on 
Agriculture on March 8, 1995.
    Enactment of H.R. 1135 would affect direct spending and 
thus would be subject to pay-as-you-go procedures under section 
252 of the Balanced Budget and Emergency Deficit Control Act of 
1985.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Dorothy 
Rosenbaum, who can be reached at 226-2820, and Ian McCormick, 
who can be reached at 226-2860.
            Sincerely,
                                           June E. O'Neill,
                                                          Director.

               congressional budget office cost estimate

    1. Bill number: H.R. 1135.
    2. Bill title: Food Stamp Reform and Commodity Distribution 
Act.
    3. Bill status: As ordered reported by the House 
Agriculture Committee on March 8, 1995.
    4. Bill purpose: To improve the commodity distribution 
programs of the Department of Agriculture, to reform and 
simplify the Food Stamp Program, and for other purposes.
    5. Estimated cost to the Federal Government:

                            direct spending

    The following table shows projected outlays for the Food 
Stamp Program under current law, the changes that would result 
from the bill, and the projected outlays if the bill were 
enacted. Table 1 (attached) provides detail on the costs and 
savings associated with individual provisions.

----------------------------------------------------------------------------------------------------------------
                                                   1995       1996       1997       1998       1999       2000  
----------------------------------------------------------------------------------------------------------------
Projected spending under current law:                                                                           
    Food stamps...............................     25,120     25,930     27,400     28,900     30,390     32,030
Proposed changes:                                                                                               
    Food stamps...............................          0     -1,779     -3,721     -4,477     -5,252     -6,218
Projected spending under H.R. 1135:                                                                             
    Food stamps...............................     25,120     24,151     23,697     24,423     25,138     25,812
----------------------------------------------------------------------------------------------------------------

                    AUTHORIZATIONS OF APPROPRIATIONS

    The following table illustrates the spending levels for the 
consolidated commodity distribution programs authorized in H.R. 
1135 and the estimated outlays if appropriation are provided.

----------------------------------------------------------------------------------------------------------------
                                                   1995       1996       1997       1998       1999       2000  
----------------------------------------------------------------------------------------------------------------
Authorization level under current law:                                                                          
    Authorization level.......................        190          0          0          0          0          0
    Estimated outlays.........................        201         21          0          0          0          0
Proposed changes:                                                                                               
    Authorization level.......................          0        300        300        300        300        300
    Estimated outlays.........................          0        253        300        300        300        300
Authorization level under H.R. 1135:                                                                            
    Authorization level.......................          0        300        300        300        300        300
    Estimated outlays.........................        201        274        300        300        300        300
----------------------------------------------------------------------------------------------------------------
Note: The costs of this bill fall within budget function 600.                                                   

    6. Basis of estimate: H.R. 1135 would affect direct 
spending primarily by cutting benefits to food stamp households 
relative to current law and by restricting eligibility for 
legal aliens and able-bodied recipients who do not have 
children. Discretionary spending would result from the 
reauthorization and consolidation of commodity programs under 
Title I of the bill. The following description of the cost 
estimate details only the provisions of the bill with major 
budgetary effects.

Direct spending

    Simplified Food Stamp Program. The simplified food stamp 
program provisions have no effect relative to current law 
because they depend on the creation of the Temporary Assistance 
for Needy Families Block Grant approved by the House Committee 
on Ways and Means on March 8, 1995. If this block grant were 
enacted, CBO estimates the net effect of the provision would be 
negligible because states would likely pay no more in food 
stamp benefits under a simplified program than they would under 
the regular Food Stamp Program. This would be achieved by 
limiting the average benefit to all food stamp households that 
participate in the Temporary Assistance for Needy Families 
Block Grant to the previous year's average benefit adjusted for 
increases in the maximum benefit. Federal savings or costs are 
possible depending on how states implement the new block grant 
and the other optional food stamp provisions under this bill.
    Allow 2 percent annual increase in maximum benefits. 
Section 205 of the bill would allow for lower annual increases 
in the maximum benefit for all food stamp households than under 
current law. Under current law, maximum benefits are increased 
each October to reflect the increase in the previous year's 
Thrifty Food Plan. CBO's economic forecast estimates an annual 
increase in the Thrifty Food Plan of about 3 percent between 
fiscal years 1995 and 2000. H.R. 1135 would limit this annual 
increase to 2 percent. Under that scenario, the maximum benefit 
in 2000 would be about 5 percent lower than it would be under 
current law. Average monthly benefits per person would decrease 
by $1.50 in 1996 and $6 in 2000 relative to current law. CBO 
estimates that food stamp outlays would decrease by $480 
million in 1996 and $2 billion in 2000 as a result of this 
change.
    Income deductions and energy assistance. Section 206 of the 
bill would freeze the standard deduction and the excess shelter 
deduction at $134 and $231 respectively. Under current law, the 
standard deduction is adjusted annually to reflect changes in 
the Consumer Price Index (CPI); the cap on the excess shelter 
deduction is scheduled to increase from $231 in fiscal year 
1995 to $247 through December 1996 and to be eliminated in 
future years. CBO estimates the savings from the freeze of the 
standard deduction to be $190 million in 1996 rising to $1.1 
billion in 2000 and the savings from the freeze of the excess 
shelter deduction to be $80 million in 1995 rising to $915 
million in 2000.
    Other provisions in section 206 would change the treatment 
of state energy assistance payments and payments from the Low 
Income Home Energy Assistance Program (LIHEAP). CBO estimates 
that, combined, these two provisions would lower food stamp 
outlays by about $220 million a year.
    Vehicle allowance. Section 207 would freeze the vehicle 
allowance at $4,550. Under current food stamp policy, the fair 
market value of vehicles is counted as an asset in determining 
food stamp eligibility when the value is more than $4,550. This 
is scheduled to rise to $4,600 for fiscal year 1996 and $5,000 
for fiscal year 1997 and to increase in each succeeding year by 
the percentage change in the new car component of the CPI. CBO 
estimates that keeping the vehicle allowance at $4,550 over the 
next five years would reduce food stamp outlays by $10 million 
in 1996 and $200 million in 2000.
    Eligibility of aliens. Section 208 would deny food stamps 
to most legal aliens starting in fiscal year 1997, unless the 
alien has met the residency requirements and has an application 
pending for naturalization, is a veteran or member of the U.S. 
Armed Forces (or the spouse or dependent child of such a 
person), or is 75 years old or older and has resided in the 
United States for at least 5 years. Refugees would be denied 
food stamps if they have lived in the United States for more 
than five years. Based on quality control (QC) data for the 
food stamp program from 1993, CBO estimates that currently just 
under 5 percent of food stamp benefits go to aliens who would 
be no longer be eligible for food stamps under H.R. 1135 if it 
were in effect today. CBO assumes, however, that some of these 
individuals would apply to be naturalized if H.R. 1135 were 
enacted and would retain food stamp eligibility. CBO estimates 
that 700,000 individuals would lose an average of $88 monthly 
in fiscal year 1997 as a result of the provision. By 2000, CBO 
estimates that 400,000 individuals would lose an average of 
$100 monthly. Thus, enactment of section 208 would lower food 
stamp outlays by $730 million in 1997, but the savings would 
fall to $490 million by 2000.
    Work requirements. Section 209 would limit receipt of food 
stamp benefits to a period of 90 days for able-bodied 
individuals who do not have dependent children, and who are not 
working at least 20 hours a week or participating in an 
appropriate job activity or workfare program at least 20 hours 
a week. Based on the QC data and studies of caseload dynamics, 
CBO estimates that this provision would save $780 million in 
food stamp benefits in 1996 and $1.3 billion in 2000. These 
savings correspond to 800,000 individuals in an average month 
once the provision is phased in, losing an average monthly 
benefit of about $110.
    Encourage EBT systems. Section 211 would allow States that 
have a statewide electronic benefit (EBT) system operating to 
elect to receive as a block grant for a low-income nutrition 
assistance program either (1) the sum of the amount of the food 
stamp benefits paid to individuals in the State and the food 
stamp administrative funds paid to the state in 1994 or (2) the 
average amount of food stamp benefits and administrative funds 
paid over fiscal years 1992 to 1994. Receipt of this block 
grant would preclude the State's participating in the food 
stamp program. Maryland is the only State that now has EBT 
statewide. CBO estimates that by the middle of fiscal year 
1997, states with 10 percent of food stamp benefits will have 
statewide EBT systems, and that by 2000 States with half the 
food stamp caseload will have this technology.
    Not all the states with EBT systems, however, would be 
interested in receiving a block grant in lieu of participating 
in the federal food stamp program. CBO assumes that relative to 
a food stamp program where maximum benefits are increasing 2 
percent a year, states with 20 percent of the food stamp 
caseload would choose to receive a block grant at either the 
1994 level or the average of the 1992 to 1994 level of food 
stamp benefits paid in their state once they had statewide EBT.
    Criminal forfeiture. Section 306 allows courts to impose on 
people convicted of certain violations sentences that would 
include forfeiture of property involved in the violation. The 
proceeds from the sale of this forfeited property could be used 
to reimburse federal and State agencies for costs incurred in 
law enforcement relating to the forfeiture. If receipts from 
one fiscal year were not spent until the following year, a 
small change in the deficit could result in a given year. 
Because CBO cannot predict the number of violations or the 
proceeds from the sale of any forfeited property, CBO cannot 
estimate the effect of this provision.
    Interactions among provisions. The estimates of the 
individual provisions shown in Table 1 do not reflect the 
effects of other provisions of the bill. If H.R. 1135 were 
enacted, total savings would be less than the sum of the 
estimates of the individual provisions. For example, the 
savings attributed to lowering the maximum benefit based on 
food stamp participation under current law would not be 
achieved for aliens who do not receive any food stamps under 
H.R. 1135. CBO estimates that the interactions among provisions 
in H.R. 1135 would reduce savings relative to the sum of the 
independent estimates by $20 million in 1996 and $666 million 
in 2000.
    Obligations and allotments. Section 216 would cap Food 
Stamp Program obligations for fiscal years after 1995 at the 
amount CBO estimates would be program spending after enactment 
of H.R. 1135. Consequently, CBO does not estimate any effect of 
the cap because CBO estimates the program will have spending 
exactly at the cap. The caps could limit food stamp spending if 
the number of eligible individuals or the level of benefits is 
higher than CBO now estimates.

Authorizations of appropriations

    Title I. Under current law, the Secretary of Agriculture 
provides food to needy families and individuals through state 
and local emergency feeding programs. Commodities and financial 
assistance for program operations are distributed to state and 
local organizations through four principal programs: the 
Emergency Food Assistance Program (EFAP), the Soup Kitchen and 
Food Bank Program, Assistance for Summer Camps and Charitable 
Institutions, and the Commodity Supplemental Food Program 
(CSFP). Combined, these programs received appropriations 
totaling $190 million in fiscal year 1995, the last year the 
programs are authorized under current law.
    Title I of H.R. 1135 would consolidate the four programs 
and would reauthorize appropriations through fiscal year 2000. 
Specifically, section 109 would authorize $260 million for each 
of the fiscal years 1996 through 2000 to purchase, process, and 
distribute commodities to state and local organization. In 
addition, the bill would authorize $40 million each year to 
cover the cost of distribution.
    7. Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act of 1985 sets up pay-as-you-go 
procedures for legislation affecting direct spending or 
receipts through 1998. The pay-as-you-go effects of the bill 
are as follows.

------------------------------------------------------------------------
                                 1995       1996       1997       1998  
------------------------------------------------------------------------
Outlays.....................          0     -1,779     -3,721     -4,477
Receipts....................      (\1\)      (\1\)      (\1\)     (\1\) 
------------------------------------------------------------------------
\1\ CBO is unable to estimate these amounts.                            

    8. Estimated cost to state and local governments: Food 
Stamp benefits are federally funded. To the extent that states 
choose to provide benefits either through their General 
Assistance programs or in other ways to offset the loss of food 
stamp benefits to certain categories of recipients--primarily 
aliens and able-bodied recipients with no children who do not 
comply with work requirements--states could incur additional 
costs. Also, states may choose to invest more in workfare or 
other job-related programs for those recipients losing benefits 
because of the work requirements, thereby allowing them to 
retain federal food stamp benefits.
    Food Stamp quality control (QC) provisions would be 
strengthened under H.R. 1135. CBO has not estimated any savings 
to the federal government from these provisions. The Secretary 
has the authority to allow any penalties assessed to a state 
because of high error rates to be spent to improve the state's 
food stamp administration. Even so, if higher penalties are 
assessed to the states under the revised QC rules, the states 
could incur some additional costs.
    Finally, Section 306 allows courts to impose on people 
convicted of certain violations sentences that would include 
forfeiture of property involved in the violation. The proceeds 
from the sale of this forfeited property could be used to 
reimburse federal and state agencies for costs incurred in law 
enforcement relating to the forfeiture. To the extent that 
states are currently involved in these law enforcement 
activities and not being reimbursed for them, this provision 
would result in some savings to state and local governments.
    9. Estimate comparison: None.
    10. Previous CBO estimate: None.
    11. Estimate prepared by: Dorothy Rosenbaum (Titles II and 
III, 226-2820) and Ian McCormick (Title I, 226-2860).
    12. Estimate approved by: Paul N. Van de Water, Assistant 
Director for Budget Analysis.

   TABLE 1: ESTIMATE OF TITLES II AND III OF H.R. 1135, THE FOOD STAMP  
                  REFORM AND COMMODITY DISTRIBUTION ACT                 
            [Outlays by fiscal year, in millions of dollars]            
------------------------------------------------------------------------
                      1996       1997       1998       1999       2000  
------------------------------------------------------------------------
 Direct Spending                                                        
Sec. 203 Simplifi                                                       
 ed Food Stamp                                                          
 Program\1\......          0          0          0          0          0
Sec. 205 Allow 2                                                        
 percent annual                                                         
 increase to 103                                                        
 percent of Oct.                                                        
 1994 Thrifty                                                           
 Food Plan.......       -480       -800     -1,140     -1,560     -2,030
Sec. 206 Freeze                                                         
 standard                                                               
 deduction at                                                           
 $134............       -190       -400       -630       -870     -1,130
Sec. 206 Freeze                                                         
 excess shelter                                                         
 deduction.......        -80       -500       -710       -805       -915
Sec. 206 Freeze                                                         
 homeless shelter                                                       
 deduction.......      (\2\)         -1         -1         -2         -3
Sec. 206 Count                                                          
 state energy                                                           
 payments as                                                            
 income..........       -175       -175       -180       -180       -185
Sec. 206 Change                                                         
 in treatment of                                                        
 LIHEAP payments.        -35        -40        -40        -40        -40
Sec. 207 Freeze                                                         
 vehicle                                                                
 allowance at                                                           
 $4550...........        -10        -55       -130       -165       -200
Sec. 208 Eligibil                                                       
 ity of aliens...          0       -730       -580       -490       -490
Sec. 209 Work                                                           
 requirements....       -780     -1,110     -1,170     -1,230     -1,300
Sec. 210 Treatmen                                                       
 t of                                                                   
 disqualified                                                           
 individuals.....        -20        -20        -20        -20        -20
Sec. 211 Encourag                                                       
 e EBT systems...          0        -40       -160       -300       -540
Sec. 212 Value of                                                       
 minimum                                                                
 allotment.......          0          0        -30        -30        -30
Sec. 213 Initial                                                        
 month benefit                                                          
 determination...        -25        -25        -25        -25        -25
Sec. 214 Food                                                           
 Stamp Program                                                          
 management......          0          0          0          0          0
Sec. 215 Work                                                           
 supplementation                                                        
 or support                                                             
 program.........          1         10         15         20         30
Sec. 306 Criminal                                                       
 forfeiture......      (\3\)      (\3\)      (\3\)      (\3\)      (\3\)
Sec. 308 Double                                                         
 penalties for                                                          
 program                                                                
 violations......      (\2\)      (\2\)      (\2\)      (\2\)      (\2\)
Sec. 310 Claims                                                         
 collection......         -5         -5         -5         -5         -5
    Interactions                                                        
     among                                                              
     provisions..         20        170        330        440        666
Direct spending:                                                        
    Budget                                                              
     Authority...     -1,779     -3,721     -4,477     -5,252     -6,218
    Outlays......     -1,779     -3,721     -4,477     -5,252     -6,218
------------------------------------------------------------------------
\1\ The language for the simplified food stamp program seems to ensure  
  that states will pay no more food stamp benefits under a simplified   
  program than they would under the regular Food Stamp Program. Savings 
  or costs are possible depending on how states implement the Temporary 
  Assistance for Needy Families Block Grant and the food stamp          
  provisions under this bill. CBO estimates the net effect of this      
  provision to be zero.                                                 
\2\ Less than $500,000.                                                 
\3\ CBO is unable to estimate these amounts.                            

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that 
enactment of H.R. 1135, as amended, will have no inflationary 
impact on the national economy.

                          Oversight Statement

    No summary of oversight findings and recommendations made 
by the Committee on Government Reform and Oversight under 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives was available to the Committee with reference 
to the subject matter specifically addressed, H.R. 1135, as 
amended.
    No specific oversight activities other than the hearings 
detailed in this report were conducted by the Committee within 
the definition of clause 2(b)(1) of rule X of the Rules of the 
House of Representatives.

                        Changes in Existing Law

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill are shown as follows (existing law proposed to be 
omitted is enclosed in black brackets, new matter is printed in 
italic, and existing law in which no change is proposed is 
shown in roman):
                 [EMERGENCY FOOD ASSISTANCE ACT OF 1983

  [AN ACT Making appropriations to provide productive employment for 
   hundreds of thousands of jobless Americans, to hasten or initiate 
 Federal projects and construction of lasting value to the Nation and 
 its citizens, and to provide humanitarian assistance to the indigent 
              for fiscal year 1983, and for other purposes

               [EMERGENCY JOBS APPROPRIATION ACT, FY 1983

          * * * * * * *

            [TITLE II--EMERGENCY FOOD ASSISTANCE ACT OF 1983

    [Sec. 201. This title may be cited as the ``Emergency Food 
Assistance Act of 1983'', and is hereinafter in this title 
referred to as ``this Act''.

                    [eligibility recipient agencies

    [Sec. 201A. As used in this Act the term ``eligible 
recipient agencies'' means public or nonprofit organizations 
that administer--
          [(1) activities and projects providing nutrition 
        assistance to relieve situations of emergency and 
        distress through the provision of food to needy 
        persons, including low-income and unemployed persons 
        (including the activities and projects of charitable 
        institutions, food banks, hunger centers, soup 
        kitchens, and similar public or private nonprofit 
        eligible recipient agencies) hereinafter in this title 
        referred to as ``emergency feeding organizations'';
          [(2) school lunch programs, summer camps for 
        children, and other child nutrition programs providing 
        food service;
          [(3) nutrition projects operating under the Older 
        Americans Act of 1965, including congregate nutrition 
        sites and providers of home-delivered meals;
          [(4) activities and projects that are supported under 
        section 4 of the Agricultural and Consumer Protection 
        Act of 1973;
          [(5) activities of charitable institutions, including 
        hospitals and retirement homes, to the extent that 
        needy persons are served; or
          [(6) disaster relief programs;
and that have been designated by the appropriate State agency, 
or by the Secretary, and approved by the Secretary for 
participation in the program established under this Act.

                    [Availability of CCC Commodities

    [Sec. 202. (a) Notwithstanding any other provision of law, 
in order to complement the domestic nutrition programs, make 
maximum use of the Nation's agricultural abundance, and expand 
and improve the domestic distribution of price-supported 
commodities, commodities acquired by the Commodity Credit 
Corporation that the Secretary of Agriculture (hereinafter 
referred to as the ``Secretary'') determines, in his 
discretion, are in excess of quantities needed to--
          [(1) carry out other domestic donation programs,
          [(2) meet other domestic obligations (including 
        quantities needed to carry out a payment-in-kind 
        acreage diversion program),
          [(3) meet international market development and food 
        aid commitments, and
          [(4) carry out the farm price and income 
        stabilization purposes of the Agricultural Adjustment 
        Act of 1938, the Agricultural Act of 1949, and the 
        Commodity Credit Corporation Charter Act,
shall be made available by the Secretary, without charge or 
credit for such commodities, for use by eligible recipient 
agencies for food assistance.
    [(b) * * *
    [(c) In addition to any commodities described in subsection 
(a), in carrying out this Act, the Secretary may use 
agricultural commodities and the products thereof made 
available under clause (2) of the second sentence of 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).
    [(d) Commodities made available under this Act shall 
include a variety of commodities and products thereof that are 
most useful to eligible recipient agencies, including but not 
limited to, dairy products, wheat or the products thereof, 
rice, honey and cornmeal.
    [(e) Effective April 1, 1986, the Secretary shall submit 
semiannually to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate a report on the types and amounts of 
commodities made available for distribution under this Act.
    [(f) Notwithstanding any other provision of law, the 
programs authorized by sections 153 and 1163 of the Food 
Security Act of 1985 (15 U.S.C. 713a-14 and 7 U.S.C. 1731 note) 
shall not be operated in a manner that will, in any way, reduce 
the quantities of dairy products that traditionally are made 
available to carry out this Act or any other domestic feeding 
program.
    [(g)(1) Whenever commodities acquired by the Commodity 
Credit Corporation are made available for donation to domestic 
food programs in quantities that exceed Federal obligations, 
the Secretary shall give equal consideration to making 
donations of such commodities to emergency feeding 
organizations participating in the program authorized by this 
Act as is given to other commodity recipient agencies, taking 
into account the types and amounts of commodities available and 
appropriate for distribution to these organizations.
    [(2) In determining the commodities that will be made 
available to emergency feeding organizations under this Act, 
the Secretary may distribute commodities that become available 
on a seasonal or irregular basis.

            [availability of ccc flour, cornmeal, and cheese

    [Sec. 202A. Notwithstanding any other provision of law--
    [(a)(1) To the extent provided in advance in an 
appropriation Act, in fiscal year 1988, flour, cornmeal, and 
cheese acquired by the Commodity Credit Corporation that are in 
excess of quantities needed to--
          [(A) carry out other domestic donation programs,
          [(B) meet other domestic obligations (including 
        quantities needed to carry out a payment-in-kind 
        acreage diversion program),
          [(C) meet international market development and food 
        aid commitments, and
          [(D) carry out the farm price and income 
        stabilization purposes of the Agricultural Adjustment 
        Act of 1938, the Agricultural Act of 1949, and the 
        Commodity Credit Corporation Charter Act,
shall be made available as provided in paragraph (2).
    [(2) The Secretary shall make such excess flour, cornmeal, 
and cheese available in any State, in addition to the normal 
allotment of such commodities (adjusted by any reallocation) 
for fiscal year 1988 under this Act, at the request of the 
chief executive officer of such State who certifies to the 
Secretary that--
          [(A)(i) individuals in such State who are eligible to 
        receive flour, cornmeal, and cheese under this Act are 
        not receiving such commodities distributed under other 
        provisions of this Act, or
          [(ii) the number of unemployed individuals in such 
        State has increased during the most recent 90-day 
        period for which unemployment statistics are available 
        prior to the date of the certification is made, and
          [(B) the distribution of flour, cornmeal, and cheese 
        under this section in such State will not substantially 
        displace the commercial sale of such commodities in 
        such State.
    [(b) Flour, cornmeal, and cheese made available under this 
section by the Secretary shall be made available without charge 
or credit in fiscal year 1988, in a usable form, for use by 
eligible recipient agencies in a State.
    [(c) The amount of cheese made available under this section 
in fiscal year 1988 shall not exceed 14,000,000 pounds.
    [(d) Whenever the Secretary receives a request submitted 
under subsection (a)(2), the Secretary shall immediately notify 
the Committee on Agriculture of the House of Representatives 
and the Committee on Agriculture, Nutrition, and Forestry of 
the Senate that such request was received.

                         [processing agreements

                       [initial processing costs

    [Sec. 203A. The Secretary may use funds of the Commodity 
Credit Corporation to pay costs of initial processing and 
packaging of commodities to be distributed under the program 
established under this Act into forms, and in quantities, 
suitable, as determined by the Secretary, for use in individual 
households when such commodities are to be consumed by 
individual households or for institutional use, as applicable. 
The Secretary may pay such costs in the form of Corporation-
owned commodities equal in value to such costs. The Secretary 
shall ensure that any such payments in kind will not displace 
commercial sales of such commodities.

                  [federal and state responsibilities

    [Sec. 203B. (a) The Secretary shall, as expeditiously as 
possible, provide the commodities made available under this Act 
in such quantities as can be used without waste to State 
agencies designated by the Governor or other appropriate State 
official for distribution to eligible recipient agencies, 
except that the Secretary may provide such commodities directly 
to eligible recipient agencies and to private companies that 
process such commodities for eligible recipient agencies under 
section 203 and 203A of this Act. Notwithstanding any other 
provision of this Act, in the distribution of commodities under 
this Act, each State agency shall have the option to give 
priority to existing food bank networks and other organizations 
whose ongoing primary function is to facilitate the 
distribution of food to low-income households, including food 
from sources other than the Department of Agriculture.
    [(b) State agencies receiving commodities under this Act 
shall, as expeditiously as possible, distribute such 
commodities, in the quantities requested (to the extent 
practicable), to eligible recipient agencies within their 
respective State. However, if a State agency cannot meet all 
requests for a particular commodity under this Act, the State 
agency shall give priority in the distribution of such 
commodity to eligible recipient agencies providing nutrition 
assistance to relieve situations of emergency and distress 
through the provision of food to needy persons, including low-
income and unemployed persons. Each State agency shall 
encourage distribution of such commodities in rural areas.
    [(c) Each State agency receiving commodities for individual 
household use under this Act shall distribute such commodities 
to eligible recipient agencies in the State that serve needy 
persons, and shall, with the approval of the Secretary, 
determine those persons in the State that shall qualify as 
needy persons eligible for such commodities.
    [(d) Each State agency receiving commodities under this 
title may--
          [(1) enter into cooperative agreements with State 
        agencies of other States for joint provision of such 
        commodities to an emergency feeding organization that 
        serves needy persons in a single geographical area part 
        of which is situated in each of such States; or
          [(2) transfer such commodities to any such emergency 
        feeding organization in the other State under such 
        agreement.

                      [assurances; anticipated use

    [Sec. 203C. (a) The Secretary shall take precautions as the 
Secretary deems necessary to assure that any eligible recipient 
agency receiving commodities under this Act will provide such 
commodities to persons served by the eligible recipient agency 
and will not diminish its normal expenditures for food by 
reason of the receipt of such commodities. The Secretary shall 
also take such precautions as the Secretary deems necessary to 
assure that commodities made available under this Act will not 
displace commercial sales of such commodities or the products 
thereof. The Secretary shall not make commodities available for 
donation in any quantity or manner that the Secretary, in the 
Secretary's discretion, determines may, substitute for the same 
or any other agricultural produce that would otherwise be 
purchased in the market. The Secretary shall submit to Congress 
each year a report as to whether and to what extent such 
displacements or substitutions are occurring.
    [(b) Commodities provided under this Act shall be 
distributed only in quantities that can be consumed without 
waste. No eligible recipient agency may receive commodities 
under this Act in excess of anticipated use, based on inventory 
records and controls, or in excess of its ability to accept and 
store such commodities.

[SEC. 203D. STATE AND LOCAL SUPPLEMENTATION OF COMMODITIES.

    [(a) Authorization.--The Secretary shall establish 
procedures under which State and local agencies, charitable 
institutions, or any other person may supplement the 
commodities distributed under the program authorized by this 
Act for use by emergency feeding organizations with nutritious 
and wholesome commodities that such entities or persons donate 
to State agencies and emergency feeding organizations for 
distribution, in all or part of the State, in addition to the 
commodities otherwise made available under this Act.
    [(b) Use of Funds and Facilities.--States and emergency 
feeding organizations may use the funds appropriated under this 
Act and equipment, structures, vehicles, and all other 
facilities involved in the storage, handling, or distribution 
of commodities made available under this Act, and the 
personnel, both paid or volunteer, involved in such storage, 
handling, or distribution, to store, handle or distribute 
commodities donated for the use of emergency feeding 
organizations under subsection (a).
    [(c) Volunteer Workers.--State and emergency feeding 
organizations shall continue, to the maximum extent practical, 
to use volunteer workers and commodities and other foodstuffs 
donated by charitable and other organizations in the operation 
of the program authorized by this section.

                   [authorization and appropriations

    [Sec. 204. (a)(1) There are authorized to be appropriated 
$50,000,000 for each of the fiscal years 1991 through 1995, for 
the Secretary to make available to the States for State and 
local payments for costs associated with the distribution of 
commodities by emergency feeding organizations under this 
title. Funds appropriated under this paragraph for any fiscal 
year shall be allocated to the States on an advance basis, 
dividing such funds among the States in the same proportions as 
the commodities distributed under this title for such fiscal 
year are divided among the States. If a State agency is unable 
to use all of the funds so allocated to it, the Secretary shall 
reallocate such unused funds among the other States. States may 
also use funds provided under this paragraph to pay for the 
costs associated with the distribution of commodities under the 
program authorized under section 110 of the Hunger Prevention 
Act of 1988, and to pay for the costs associated with the 
distribution of additional commodities provided pursuant to 
section 214.
    [(2) Each State shall make available to emergency feeding 
organizations in the State not less than 40 per centum of the 
funds provided as authorized in paragraph (1) that it has been 
allocated for a fiscal year, as necessary to pay for, or 
provide advance payments to cover, the direct expenses of the 
emergency feeding organizations for distributing commodities to 
needy persons, but only to the extent such expenses are 
actually so incurred by such organizations. As used in this 
paragraph, the term ``direct expenses'' includes costs of 
transporting, storing, handling, repackaging, processing, and 
distributing commodities incurred after they are received by 
the organization; costs associated with determinations of 
eligibility, verification, and documentation; costs of 
providing information to persons receiving commodities under 
this Act concerning the appropriate storage and preparation of 
such commodities; and costs of recordkeeping, auditing, and 
other administrative procedures required for participation in 
the program under this title. If a State makes a payment, using 
State funds, to cover direct expenses of emergency feeding 
organizations, the amount of such payment shall be counted 
toward the amount a State must make available for direct 
expenses of emergency feeding organizations under this 
paragraph.
    [(3) States to which funds are allocated for a fiscal year 
under this subsection shall submit financial reports to the 
Secretary, on a regular basis, as to the use of such funds. No 
such funds may be used by States or emergency feeding 
organizations for costs other than those involved in covering 
the expenses related to the distribution of commodities by 
emergency feeding organizations.
    [(4)(A) Except as provided in subparagraph (B), effective 
January 1, 1987, to be eligible to receive funds under this 
subsection, a State shall provide in cash or in kind (according 
to procedures approved by the Secretary for certifying these 
in-kind contributions) from non-Federal sources a contribution 
equal to the difference between--
          [(i) the amount of such funds so received; and
          [(ii) any part of the amount allocated to the State 
        and paid by the State--
                  [(I) to emergency feeding organizations; or
                  [(II) for the direct expenses of such 
                organizations; for use in carrying out this 
                title.
    [(B)(i) Except as provided in clause (ii), subparagraph (A) 
shall apply to States beginning on January 1, 1987.
    [(ii) If the legislature of a State does not convene in 
regular session before January 1, 1987, paragraph (1) shall 
apply to such State beginning on October 1, 1987.
    [(C) Funds allocated to a State under this section may, 
upon State request, be allocated before States satisfy the 
matching requirement specified in subparagraph (A), based on 
the estimated contribution required. The Secretary shall 
periodically reconcile estimated and actual contributions and 
adjust allocations to the State to correct for overpayments and 
underpayments.
          [(5) States may not charge for commodities made 
        available to emergency feeding organizations, and may 
        not pass on to such organizations the cost of any 
        matching requirements, under this Act.
          [(b) The value of the commodities made available 
        under this Act and the funds of the Corporation used to 
        pay the costs of initial processing, packaging 
        (including forms suitable for home use), and delivering 
        commodities to the States shall not be charged against 
        appropriations made or authorized under this section.

                    [relationship to other programs

    [Sec. 205. (a) Section 4(b) of the Food Stamp Act of 1977 
shall not apply with respect to the distribution of commodities 
under this Act.
    [(b) Except as otherwise provided in section 203A of this 
Act, none of the commodities distributed under this Act shall 
be sold or otherwise disposed of in commercial channels in any 
form.

                        [commodities not income

    [Sec. 206. Notwithstanding any other provision of law, 
commodities distributed under this Act shall not be considered 
income or resources for any purposes under any Federal, State, 
or local law.

                               [penalties

    [Sec. 207. Section 4(c) of the Agriculture and Consumer 
Protection Act of 1973 is amended by--
          [(1) striking out ``or section 709'' and inserting in 
        lieu thereof ``section 709''; and
          [(2) inserting after ``(7 U.S.C. 1446a-1)'' the 
        phrase ``or the Emergency Food Assistance Act of 
        1983''.

               [prohibition against certain state charges

    [Sec. 208. Whenever a commodity is made available without 
charge or credit under any nutrition program administered by 
the Secretary for distribution within the States to eligible 
recipient agencies, the State may not charge recipient agencies 
any amount that is in excess of the State's direct costs of 
storing and transporting the commodities to recipient agencies 
minus any amount the Secretary provides the State for the costs 
of storing and transporting such commodities.
      [COMMODITY SUPPLEMENTAL FOOD PROGRAM ADMINISTRATIVE EXPENSES

    [Sec. 209.

                              [REGULATIONS

    [Sec. 210. (a) The Secretary shall issue regulations within 
30 days to implement this Act.
    [(b) In administering this Act, the Secretary shall 
minimize, to the maximum extent practicable, the regulatory, 
recordkeeping, and paperwork requirements imposed on eligible 
recipient agencies.
    [(c)(1) The Secretary shall as early as feasible but not 
later than the beginning of each fiscal year, publish in the 
Federal Register an estimate of the types and quantities of 
commodities that the Secretary anticipates are likely to be 
made available under the commodity distribution program under 
this Act during the fiscal year.
    [(2) The actual types and quantities of commodities made 
available by the Secretary under this Act may differ from the 
estimates made under paragraph (1).
    [(d) The regulations issued by the Secretary under this 
section shall include provisions that set standards with 
respect to liability for commodity losses under the program 
under this title in situations in which there is no evidence of 
negligence or fraud, and conditions for payment to cover such 
losses. Such provisions shall take into consideration the 
special needs and circumstances of emergency feeding 
organizations.
    [(e) The Secretary is authorized to issue final regulations 
without first issuing proposed regulations (except as otherwise 
provided for in section 214(j) for public comment in order to 
carry out the provisions of sections 213 and 214. If final 
regulations are issued without such prior public comment the 
Secretary shall permit public comment on such regulations, 
consider pertinent comments, and make modifications of such 
regulations as appropriate not later than 1 year after the date 
of enactment of this subsection. Such final and modified 
regulations shall be accompanied by a statement of the basis 
and purpose for such regulations.

                      [FINALITY OF DETERMINATIONS

    [Sec. 211. Determinations made by the Secretary of 
Agriculture under this Act and the facts constituting the basis 
for any donation of commodities under this Act, or the amount 
thereof, when officially determined in conformity with the 
applicable regulations prescribed by the Secretary, shall be 
final and conclusive and shall not be reviewable by any other 
officer or agency of the Government.

                          [PROGRAM TERMINATION

    [Sec. 212. Except for section 207, this Act shall terminate 
on September 30, 1995.

[SEC. 213. INCORPORATION OF ADDITIONAL COMMODITIES.

    [(a) In General.--The Secretary shall administer the 
program authorized under this Act in a manner that incorporates 
into the program additional commodities purchased by the 
Secretary under section 214 to be distributed to States for use 
in such States by emergency feeding organizations, as defined 
in section 201A(1). Such additional commodities, to the extent 
practicable and appropriate, shall include commodities 
purchased within a given State for distribution within such 
State.
    [(b) Supplement Commodities Available.--The Secretary shall 
supplement the commodities made available to emergency feeding 
organizations under sections 202 and 203D(a) with nutritious 
and useful commodities purchased by the Secretary under section 
214.

[SEC. 214. REQUIRED PURCHASES OF COMMODITIES.

    [(a) Purpose.--It is the purpose of this section to 
establish a formula so that the amount, measured by their 
value, of additional commodities that are to be allocated to 
each State can be precisely calculated for fiscal years 1991 
through 1995. The share of commodities, as measured by their 
value, to be allocated to each State shall be based 60 percent 
on the number of persons in households within the State having 
incomes below the poverty level and 40 percent on the number of 
unemployed persons within the State.
    [(b) Definitions.--As used in this section--
          [(1) Additional commodities.--The term ``additional 
        commodities'' means commodities purchased under this 
        section in addition to the commodities otherwise made 
        available under sections 202 and 203D(a).
          [(2) Average monthly number of unemployed persons.--
        The term ``average monthly number of unemployed 
        persons'' refers to the average monthly number of 
        unemployed persons within each State in the most recent 
        fiscal year for which such information is available as 
        determined by the Bureau of Labor Statistics of the 
        Department of Labor.
          [(3) Poverty line.--The term ``poverty line'' has the 
        same meaning given such term in section 673(2) of the 
        Community Services Block Grant Act (42 U.S.C. 9902(2)).
          [(4) Total value of additional commodities.--The term 
        ``total value of additional commodities'' means the 
        actual cost (including the distribution and processing 
        costs incurred by the Secretary), as paid by the 
        Secretary, for all additional commodities purchased 
        under subsection (e).
          [(5) Value of additional commodities allocated to 
        each state.--The term ``value of additional commodities 
        allocated to each State'' means the actual cost for 
        additional commodities (including the distribution and 
        processing costs incurred by the Secretary) as paid by 
        the Secretary under this section and allocated to such 
        State.
    [(c) Purchase of Commodities.--The Secretary shall purchase 
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 
note), to supplement the commodities otherwise provided under 
the program authorized by this Act.
    [(d) Types and Varieties.--The Secretary shall, to the 
extent practicable and appropriate, purchase type and varieties 
of commodities--
          [(1) with high nutrient density per calorie;
          [(2) that are easily and safely stored;
          [(3) that are convenient to use and consume;
          [(4) that are desired by recipient agencies; and
          [(5) that meet the requirement imposed by section 
        203C(a).
    [(e) Amounts.--To carry out this section there are 
authorized to be appropriated $175,000,000 for fiscal year 
1991, $190,000,000 for fiscal year 1992, and $220,000,000 for 
each of the fiscal years 1993 through 1995 to purchase, 
process, and distribute additional commodities under this 
section. Any amounts provided for fiscal years 1991 through 
1995 shall be available only to the extent and in such amounts 
as are provided in advance in appropriations Acts.
    [(f) Mandatory Allotments.--In each fiscal year, the 
Secretary shall allot--
          [(1) 60 percent of the total value of additional 
        commodities provided to States in a manner such that 
        the value of additional commodities allocated to each 
        State bears the same ratio to 60 percent of the total 
        value of additional commodities as the number of 
        persons in households within the State having incomes 
        below the poverty line bears to the total number of 
        persons in households within all States having incomes 
        below such poverty line, and each State shall be 
        entitled to receive such value of additional 
        commodities; and
          [(2) 40 percent of the total value of additional 
        commodities provided to States in a manner such that 
        the value of additional commodities allocated to each 
        State bears the same ratio to 40 percent of the total 
        value of additional commodities as the average monthly 
        number of unemployed persons within the State bears to 
        the average monthly number of unemployed persons within 
        all States during the same fiscal year, and each State 
        shall be entitled to receive such value of additional 
        commodities.
    [(g) Reallocation.--The Secretary shall notify each State 
of the amount of the additional commodities that such State is 
allotted to receive under subsection (f) or subsection (j) if 
applicable, and each State shall promptly notify the Secretary 
if such State determines that it will not accept any or all of 
the commodities made available under such allocation. On such a 
notification by a State, the Secretary shall reallocate and 
distribute the amount the State was allocated to receive under 
the formula prescribed in subsection (f) but declines to 
accept. The Secretary shall further establish procedures to 
permit States to decline to receive portions of such allocation 
during each fiscal year as the State determines is appropriate 
and the Secretary shall reallocate and distribute such 
allocation. In the event of any drought, flood, hurricane, or 
other natural disaster affecting substantial numbers of persons 
in a State, county, or parish, the Secretary may request that 
States unaffected by such a disaster consider assisting 
affected States by allowing the Secretary to reallocate 
commodities to which each such unaffected State is entitled to 
States containing areas adversely affected by the disaster.
    [(h) Administration.--Subject to subsections (e) and (f), 
or subsection (j) if applicable, purchases under this section 
shall be made by the Secretary at such times and under such 
conditions as the Secretary determines appropriate within each 
fiscal year. All such commodities purchased for each fiscal 
year shall be delivered at reasonable intervals to States based 
on the allotments calculated under subsection (f), or 
reallocated under subsection (g), or calculated under 
subsection (j), if applicable, before the end of such fiscal 
year. Each State shall be entitled to receive that value of 
additional commodities that results from the application of the 
formula set forth in this section to the total value of 
additional commodities.
    [(i) Maintenance of Effort.--If a State uses its own funds 
to provide commodities or services to organizations receiving 
funds or services under this section, such State shall not 
diminish the level of support it provides to such organizations 
or reduce the amount of funds available for other nutrition 
programs in the State in each fiscal year.
    [(j) New Formula.--Notwithstanding the provisions of this 
section that set forth the specific formula for allocating 
additional commodities to each State, the Secretary is 
authorized to promulgate a different precise formula, after 
prior notice and comment as required by section 553 of title 5, 
United States Code, only to the extent that--
          [(1) any such formula is effective at the outset of, 
        and throughout any given fiscal year;
          [(2) any such formula can be used to precisely 
        calculate the amount of commodities to be made 
        available to each State by the Secretary for each 
        fiscal year; and
          [(3) such formula provides that each State is 
        entitled to receive that value of additional 
        commodities which results from the application of such 
        formula to the total value of additional commodities.
[SEC. 215. SETTLEMENT AND ADJUSTMENT OF CLAIMS.

    [(a) In General.--The Secretary or a designee of the 
Secretary shall have the authority to--
        [(1) determine the amount of, settle, and adjust any 
        claim arising under this Act; and
        [(2) waive such a claim if the Secretary determines 
        that to do so will serve the purposes of this Act.
    [(b) Litigation.--Nothing contained in this section shall 
be construed to diminish the authority of the Attorney General 
of the United States under section 516 of title 28, United 
States Code, to conduct litigation on behalf of the United 
States.]
          * * * * * * *

                    THE HUNGER PREVENTON ACT OF 1988

                  TITLE I--EMERGENCY HUNGER PREVENTION

          * * * * * * *

         Subtitle B--Soup Kitchens and Other Emergency Food Aid

[SEC. 110. SOUP KITCHENS AND FOOD BANKS.

    [(a) Purpose.--It is the purpose of this section to 
establish a formula so that the amount, measured by their 
value, of additional commodities that are to be provided to 
each State for redistribution to soup kitchens and food banks 
can be precisely calculated for fiscal years 1989 through 1995. 
The share of commodities, as measured by their value, to be 
provided to each State shall be based 60 percent on the number 
of persons in households within the State having incomes below 
the poverty level and 40 percent on the number of unemployed 
persons within the State.
    [(b) Definitions.--As used in this section--
          [(1) Additional commodities.--The term ``additional 
        commodities'' means commodities purchased under this 
        section in addition to the commodities otherwise made 
        available to soup kitchens and food banks providing 
        nutrition assistance to relieve situations of emergency 
        and distress.
          [(2) Average monthly number of unemployed persons.--
        The term ``average monthly number of unemployed 
        persons'' refers to the average monthly number of 
        unemployed persons within each State in the most recent 
        fiscal year for which such information is available as 
        determined by the Bureau of Labor Statistics of the 
        Department of Labor.
          [(3) Food banks.--The term ``food bank'' refers to 
        public and charitable institutions that maintain an 
        established operation involving the provision of food 
        or edible commodities, or the products thereof, to food 
        pantries, soup kitchens, hunger relief centers, or 
        other food or feeding centers that provide meals or 
        food to needy persons on a regular basis as an integral 
        part of their normal activites.
          [(4) Food pantry.--The term ``food pantry'' means a 
        public or private nonprofit organizatin 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.
          [(5) Poverty line.--The term ``poverty line'' has the 
        same meaning given such term in section 673(2) of the 
        Community Services Block Grant Act (42 U.S.C. 9902(2))
          [(6) Secretary.--The term ``Secretary'' means the 
        Secretary of Agriculture.
          [(7) Soup kitchens.--The term ``soup kitchens'' 
        refers to public and charitable institutions that 
        maintain an established feeding operation to provide 
        food to needy homeless persons on a regular basis as an 
        integral part of their normal activities.
          [(8) Total value of additional commodities.--The term 
        ``total value of additional commodities'' means the 
        actual cost (including the processing and distribution 
        costs of the Secretary), as paid by the Secretary, for 
        all additional commodities purchased under subsection 
        (c).
          [(9) Value of additional commodities allocated to a 
        state.--The term ``value of additional commodities 
        allocated to a State'' means the actual cost for 
        additional commodities (including the processing and 
        distribution costs of the Secretary) as paid by the 
        Secretary for commodities purchased under this section 
        and allocated to such State.
    [(c) Amounts.--
          [(1) 1991 fiscal year.--During fiscal year 1991, the 
        Secretary shall spend $32,000,000, to purchase, 
        process, and distribute additional commodities to 
        States for distribution to soup kitchens and food banks 
        within a given State that provide nutrition assistance 
        to relieve situations of emergency and distress through 
        the provision of food and meals to needy persons and to 
        other institutions that can demonstrate, in accordance 
        with subsection (j)(3), that they serve predominantly 
        needy persons.
          [(2) 1992 through 1994 fiscal years.--There are 
        authorized to be approprited $40,000,000 for each of 
        the fiscal years 1992 through 1995 to purchase, 
        process, and distribute additional commodities to 
        States for distribution to soup kitchens and food banks 
        within a given State that provide nutrition assistance 
        to relieve situations of emergency and distress through 
        the provision of food and meals to needy persons and to 
        other institutions that can demonstrate, in accordance 
        with subsection (j)(3), that they serve predominantly 
        needy persons. Any amounts provided for fiscal years 
        1992 through 1995 shall be available only to the extent 
        and in such amounts as are provided in advance in 
        appropriations Acts.
          [(3) Food pantries.--In instances in which food banks 
        do not operate within a given State, the State may 
        distribute commodities to food pantries.
    [(d) Mandatory Allotments.--In each fiscal year, the 
Secretary shall allot--
          [(1) 60 percent of the total value of additional 
        commodities provided to States in a manner such that 
        the value of additional commodities allocated to each 
        State bears the same ratio to 60 percent of the total 
        value of additional commodities as the number of 
        persons in households within the State having incomes 
        below the poverty line bears to the total number of 
        persons in households within all States having incomes 
        below such poverty line, and each State shall be 
        entitled to receive such value of additional 
        commodities; and
          [(2) 40 percent of the total value of additional 
        commodities provided to States in a manner such that 
        the value of additional commodities allocated to each 
        State bears the same ratio to 40 percent of the total 
        value of additional commodities as the average monthly 
        number of unemployed persons within the State bears to 
        the average monthly number of unemployed persons within 
        all States during the same fiscal year, and each State 
        shall be entitled to receive such value of additional 
        commodities.
    [(e) Allocation and Reallocation.--
          [(1) Notification by secretary.--The Secretary shall 
        notify each State of the amount of the allocation that 
        the State is entitled to receive under subsection (d).
          [(2) Notification by state.--
                  [(A) Acceptance amount.--A State shall 
                promptly notify the Secretary of the amount of 
                commodities that will be accepted by soup 
                kitchens or food banks. In determining such 
                amount, the State shall give priority to 
                institutions that provide meals to homeless 
                individuals.
                  [(B) Less that full amount accepted.--A State 
                shall promptly notify the Secretary if the 
                State determines that it will not accept the 
                full amount of the allocation under subsection 
                (d) (or a portion thereof).
          [(3) Reallocation.--Whenever the Secretary receives a 
        notification under paragraph (2)(B), the Secretary 
        shall reallocate and distribute the amount of such 
        allocation (or any portion thereof) not accepted, in a 
        fair and equitable manner among the States that accept 
        the full amount of their respective allocations under 
        subsection (d) and that have requested receipt of 
        additional allocations.
    [(f) Administration.--Subject to subsection (c), purchases 
under this section shall be made by the Secretary at such times 
and under such conditions as the Secretary determines to be 
appropriate within each fiscal year. All commodities purchased 
under subsection (c) within each fiscal year shall be provided 
to States prior to the end of each such fiscal year.
    [(g) Maintenance of Effort.--If a State uses its own funds 
to provide commodities or services under this section, such 
State funds shall not be obtained from existing Federal or 
State programs.
    [(h) Increased Commodity Levels and Maintenance of 
Effort.--
          [(1) Increased commodity levels.--Commodities 
        provided under the amendments made by section 104 and 
        under this section shall be in addition to the 
        commodities otherwise provided (through commodity 
        donations traditionally provided by the Secretary or 
        the Commodity Credit Corporation) to emergency feeding 
        organizations. The value of the commodity donations 
        traditionally provided to such organizations shall not 
        be diminished as a result of the purchases required by 
        the amendments made by section 104 and this section.
          [(2) Federal maintenance.--The purchase of 
        commodities required under the amendments made by 
        section 104 and under this section, shall not be made 
        in such a manner as to cause any reduction in the value 
        of the bonus commodities that would otherwise be 
        distributed, in the absence of section 104 and this 
        section, to charitable institutions, or to any other 
        domestic food assistance program, such as the programs 
        authorized under the National School Lunch Act, the 
        Child Nutrition Act of 1966, the Food Stamp Act of 
        1977, or sections 4 and 5 of the Agriculture and 
        Consumer Protection Act of 1973.
          [(3) Other maintenance.--Local agencies receiving 
        commodities purchased under this section shall provide 
        an assurance to the State that donations of foodstuffs 
        from other sources shall not be diminished as a result 
        of the receipt for commodities under this section.
    [(i) New Formula.--Notwithstanding the provisions of this 
section that set forth the specific formula for allocating 
additional commodities to each State, the Secretary is 
authorized to establish a different precise formula, after 
prior notice and comment as required by section 553 of title 5, 
United States Code, only to the extent that--
          [(1) any such formula is effective at the outset of, 
        and throughout any given fiscal year;
          [(2) any such formula can be used to precisely 
        calculate the amount of commodities to be made 
        available to each State by the Secretary for each 
        fiscal year; and
          [(3) such formula provides that each State is 
        entitled to receive that value of additional 
        commodities which results from the application of such 
        formula to the total value of additional commodities.
    [(j) Priority System for State Distribution of 
Commodities.--
          [(1) Soup kitchens.--In distributing commodities 
        under this section, the distributing agency, under 
        procedures determined appropriate by the distributing 
        agency, shall offer, or otherwise make available, its 
        full allocation of commodities for distribution to soup 
        kitchens and other like organizations that serve meals 
        to homeless persons, and to food banks for distribution 
        to such organizations.
          [(2) Institutions that serve only low-income 
        recipients.--If distributing agencies determine that 
        they will not likely exhaust their allocation of 
        commodities under this section through distribution to 
        institutions referred to in paragraph (1), the 
        distributing agencies shall make the remaining 
        commodities available to food banks for distribution to 
        institutions that distribute commodities to the needy. 
        When such institutions distribute commodities to 
        individuals for home consumption, eligibility for such 
        commodities shall be determined through a means test as 
        determined appropriate by the State distributing 
        agency.
          [(3) Other institutions.--If the distributing 
        agency's commodity allocation is not likely to be 
        exhausted after distribution under paragraphs (1) and 
        (2) (as determined by the food bank), food banks may 
        distribute the remaining commodities to institutions 
        that serve meals to needy persons and do not employ a 
        means test to determine eligibility for such meals, 
        provided that the organizations have documented, to the 
        satisfaction of the food bank, that the organizations 
        do, in fact, serve predominantly needed persons.
    [(k) Settlement and Adjustment of Claims.--
          [(1) In general.--The Secretary or a designee of the 
        Secretary shall have the authority to--
                  [(A) determine the amount of, settle, and 
                adjust any claim arising under this section; 
                and
                  [(B) waive such a claim if the Secretary 
                determines that to do so will serve the 
                purposes of this section.
          [(2) Litigation.--Nothing contained in this 
        subsection shall be construed to diminish the authority 
        of the Attorney General of the United States under 
        section 516 of title 28, United States Code, to conduct 
        litigation on behalf of the United States.]
          * * * * * * *

                    TITLE II--NUTRITION IMPROVEMENTS

          * * * * * * *

             [Subtitle C--Food Processing and Distribution

[SEC. 220. ENCOURAGEMENT OF FOOD PROCESSING AND DISTRIBUTION BY 
                    ELIGIBLE RECIPIENT AGENCIES.

    [(a) Solicitation of Applications.--
          [(1) In general.--Not later than 60 days after the 
        date of enactment of this Act, the Secretary of 
        Agriculture shall, to the extent that the Commodity 
        Credit Corporation's inventory levels permit, solicit 
        applications, in accordance with paragraph (2), for 
        surplus commodities available for distribution under 
        section 202 of the Emergency Food Assistance Act of 
        1983 (7 U.S.C. 612c note).
          [(2) Requirements.--The solicitation by the Secretary 
        of Agriculture under paragraph (1) shall be in the form 
        of a request that any eligible recipient agency (as 
        defined in section 201A of the Emergency Food 
        Assistance Act of 1983) submit an application to the 
        Secretary that shall include an assurance that such 
        agency will--
                  [(A) process any agricultural commodity 
                received in response to such application into 
                end-use products suitable for distribution 
                through the Emergency Food Assistance Program;
                  [(B) package such products for use by 
                individual households; and
                  [(C) distribute such products to State 
                agencies responsible for the administration of 
                the Emergency Food Assistance Program, at not 
                cost to the State agency, for distribution 
                through the Emergency Food Assistance Program.
          [(3) Prohibition on payment of processing costs.--
        Funds made available under section 204 of the Emergency 
        Food Assistance Act of 1983 (7 U.S.C. 612c note) or 
        funds of the Commodity Credit Corporation shall not be 
        used to pay any costs incurred for the processing, 
        storage, transportation or distribution of the 
        commodities or end-use products prior to their delivery 
        to the State agency.
    [(b) Review of Applications.--
          [(1) Time of review.--Not later than 60 days after 
        the Secretary of Agriculture receives an application 
        solicited under subsection (a), the Secretary shall 
        approve or disapprove such application.
          [(2) Notice of disapproval.--If the Secretary 
        disapproves the application submitted under subsection 
        (a), the Secretary shall inform the applicant of the 
        reasons for such disapproval.]
          * * * * * * *

                    TITLE V--DEMONSTRATION PROJECTS

          * * * * * * *

[SEC. 502. FOOD BANK DEMONSTRATION PROJECTS.

    [(a) In General.--The Secretary of Agriculture may carry 
out demonstration projects to provide and redistribute to needy 
individuals and families through community food banks and other 
charitable food banks--
          [(1) agricultural commodities or the products thereof 
        made available under section 416 of the Agricultural 
        Act of 1949 (7 U.S.C. 1431); and
          [(2) to the extent practicable, agricultural 
        commodities or the products thereof made available 
        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) 
        [this section].
    [(b) Food Types.--The Secretary shall determine the 
quantities, varieties, and types of agricultural commodities 
and products thereof to be made available to community food 
banks under this section.
    [(c) Report.--Not later than July 1, 1990, the Secretary 
shall submit to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate, a report describing any 
demonstration projects carried out under this section. The 
report shall include an analysis and evaluation of the 
distribution and redistribution of food under the demonstration 
projects and the feasibility of expanding the projects to other 
community food banks.
    [(d) Termination.--The authority provided under this 
section shall terminate on September 30, 1990.
    [(e) Authorization of Appropriations.--There are authorized 
to be appropriated to carry out this section, $400,000 for each 
of the fiscal years 1989 through 1990.]
          * * * * * * *

 SECTION 4 OF THE COMMODITY DISTRIBUTION REFORM ACT AND WIC AMENDMENTS 
                                OF 1987

          * * * * * * *

[SEC. 4. FOOD BANK PROJECT.

    [(a) Community Food Banks.--The Secretary shall carry out 
no less than one demonstration project to provide and 
redistribute agricultural commodities and food products thereof 
as authorized 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), to needy 
individuals and families through community food banks. The 
Secretary may use a State agency or any other food distribution 
system for such provision or redistribution of section 32 
agricultural commodities and food products through community 
food banks under a demonstration project.
    [(b) Recordkeeping and Monitoring.--Each food bank 
participating in the demonstration project under this section 
shall establish a recordkeeping system and internal procedures 
to monitor the use of agricultural commodities and food 
products provided under this section. The Secretary shall 
develop standards by which the feasibility and effectiveness of 
the projects shall be measured, and shall conduct an ongoing 
review of the effectiveness of the projects.
    [(c) Determination of Quantities, Varieties, and Types of 
Commodities.--The Secretary shall determine the quantities, 
varieties, and types of agricultural commodities and food 
products to be made available under this section.
    [(b) Effective Period.--This section shall be effective for 
the period beginning on the date of enactment of this Act.]
          * * * * * * *

    SECTION 3 OF THE CHARITABLE ASSISTANCE AND FOOD BANK ACT OF 1987

          * * * * * * *

[SEC. 3. FOOD BANK DEMONSTRATION PROJECT.

    [(a) The Secretary of Agriculture shall carry out no less 
than one demonstration project to provide and redistribute 
agricultural commodities and food products thereof as 
authorized under section 32 of the Act entitled `An Act to 
amend the Agricultural Adjustment Act, and for other purposes', 
approved August 24, 1935, as amended (7 U.S.C. 612c), to needy 
individuals and families through community food banks. The 
Secretary may use a State agency or any other food distribution 
system for such provision or redistribution of section 32 
agricultural commodities and food products through community 
food banks under a demonstration project.
    [(b) Each food bank participating in the demonstration 
projects under this section shall establish a recordkeeping 
system and internal procedures to monitor the use of 
agricultural commodities and food products provided under this 
section. The Secretary shall develop standards by which the 
feasibility and effectiveness of the project shall be measured, 
and shall conduct an ongoing review of the effectiveness of the 
projects.
    [(c) The Secretary shall determine the quantities, 
varieties, and types of agricultural commodities and food 
products to be made available under this section.
    [(d) This section shall be effective for the period 
beginning on the date of enactment of this Act and ending on 
December 31, 1990.
    [(e) The Secretary shall submit annual progress reports to 
Congress beginning on July 1, 1988, and a final report on July 
1, 1990, regarding each demonstration project carried out under 
this section. Such reports shall include analyses and 
evaluations of the provision and redistribution of agricultural 
commodities and food products under the demonstration projects. 
In addition, the Secretary shall include in the final report 
any recommendations regarding improvements in the provision and 
redistribution of agricultural commodities and food products to 
community food banks and the feasibility of expanding such 
method of provisions and redistribution of agricultural 
commodities and food products to other community food banks.]
          * * * * * * *
                     THE FOOD SECURITY ACT OF 1985

          * * * * * * *

              TITLE XV--FOOD STAMP AND RELATED PROVISIONS

          * * * * * * *
    Sec. 1562. (a) * * *
          * * * * * * *
    (d) Notwithstanding any other provision of law, in 
implementing to commodity supplemental food program under 
[section 4 of the Agriculture and Consumer Protection Act of 
1973] section 110 of the Commodity Distribution Act of 1995, 
the Secretary of Agriculture shall allow agencies distributing 
agricultural commodities to low-income elderly people under 
such program on the date of enactment of this Act to continue 
such distribution at levels no lower than existing caseloads.
          * * * * * * *

          THE AGRICULTURAL AND CONSUMER PROTECTION ACT OF 1973

          * * * * * * *
    Sec. 4. (a) Notwithstanding any other provision of law, the 
Secretary may, during fiscal year 1991 through 1995 purchase 
and distribute sufficient agricultural commodities with funds 
appropriated from the general fund of the Treasury to maintain 
the traditional level of assistance for food assistance 
programs as are authorized by law, including but not limited to 
distribution to [institutions (including hospitals and 
facilities caring for needy infants and children), supplemental 
feeding programs serving women, infants and children or elderly 
persons, or both, wherever located, disaster areas, summer 
camps for children] disaster areas the United States Trust 
Territory of the Pacific Islands, and Indians, whenever a 
tribal organization requests distribution of federally donated 
foods pursuant to section 4(b) of the Food Stamp Act of 1977.
    In providing for commodity distribution to Indians, the 
Secretary shall improve the variety and quantity of commodities 
supplied to Indians in order to provide them an opportunity to 
obtain a more nutritious diet.
          * * * * * * *
    (c) Whoever embezzles, willfully misapplies, steals or 
obtains by fraud any agricultural commodity or its products (or 
any funds, assets, or property deriving from donation of such 
commodities) provided under this section, or under section 416 
of the Agricultural Act of 1949 (7 U.S.C. 1431), section 32 of 
the Act of August 24, 1935 (7 U.S.C. 612c), section 709 of the 
Food and Agriculture Act of 1965 (7 U.S.C. 1446a-1), or the 
[Emergency Food Assistance Act of 1983] Commodity Distribution 
Act of 1995, whether received directly or indirectly from the 
United States Department of Agriculture, or whoever receives, 
conceals, or retains such commodities, products, funds, assets, 
or property for personal use or gain, knowing such commodities, 
products, funds, assets, or property have been embezzled, 
willfully misapplied, stolen, or obtained by fraud shall, if 
such commodities, products, funds assets or property are of a 
value of $100 or more, be fined not more than $10,000 or 
imprisoned not more than five years, or both, or if such 
commodities, products, funds, assets, or property are of value 
of less than $100, shall be fined not more than $1,000 or 
imprisoned for not more than one year, or both.''
    [Sec. 5. (a) In carrying out the supplemental feeding 
program (hereinafter referred to as the ``commodity 
supplemental food program'') under section 4 of this Act, the 
Secretary (1) may institute two pilot projects directed at low-
income elderly persons, including, where feasible, distribution 
of commodities to such persons in their homes; (2) shall 
provide to the State agencies administering the commodity 
supplemental food program, for each of the fiscal years 1991 
through 1995, funds appropriated from the general fund of the 
Treasury in amounts equal to the administrative costs of State 
and local agencies in operating the program, except that the 
funds provided to State agencies each fiscal year may not 
exceed 20 percent of the amount appropriated for the commodity 
supplemental food program.
    [(b) During the first three months of any commodity 
supplemental food program, or until such program reaches its 
projected caseload level, whichever comes first, the Secretary 
shall pay those administrative costs necessary to commence the 
program successfully: Provided, That in no event shall 
administrative costs paid by the Secretary for any fiscal year 
exceed the limitation established in subsection (a) of this 
section.
    [(c) Administrative costs for the purposes of the commodity 
supplemental food program shall include, but not be limited to, 
expenses for information and referral, operation, monitoring, 
nutrition education, start-up costs, and general 
administration, including staff, warehouse, and administration 
of the State or local office.
    [(d)(1) During each fiscal year the commodity supplemental 
food program is in operation, the types and varieties of 
commodities and their proportional amounts shall be determined 
by the Secretary, but, if the Secretary proposes to make any 
significant changes in the types, varieties, or proportional 
amounts from those that were available or were planned at the 
beginning of the fiscal year (or as were available during the 
fiscal year ending June 30, 1976, whichever is greater) the 
Secretary shall report such changes before implementation to 
the Committee on Agriculture of the House of Representatives 
and the Committee on Agriculture, Nutrition, and Forestry of 
the Senate.
    [(2) Notwithstanding any other provision of law, the 
Commodity Credit Corporation shall, to the extent that the 
Commodity Credit Corporation inventory levels permit, provide 
not less than 9,000,000 pounds of cheese and not less than 
4,000,000 pounds of nonfat dry milk in each of the fiscal years 
1991 through 1995 to the Secretary of Agriculture. The 
Secretary shall use such amounts of cheese and nonfat dry milk 
to carry out the commodity supplemental food program before the 
end of each fiscal year.
    [(e) The Secretary of Agriculture is authorized to issue 
such regulations as may be necessary to carry out the commodity 
supplemental food program.
    [(f) The Secretary shall, in any fiscal year, approve 
applications of additional sites for the program including 
sites that serve only elderly persons, in areas in which the 
program currently does not operate to the full extent that this 
can be done within the appropriations available for the program 
for the fiscal year and without reducing actual participation 
levels (including participation of elderly persons under 
subsection (g)) in areas in which the program is in effect.
    [(g) If a local agency that administers the commodity 
supplemental food program determines that the amount of funds 
made available to the agency to carry out this section exceeds 
the amount of funds necessary to provide assistance under such 
program to women, infants, and children, the agency, with the 
approval of the Secretary, may permit low-income elderly 
persons (as defined by the Secretary) to participate in and be 
served by such program.
    [(h) Each State agency administering a commodity 
supplemental food program serving women, infants, and children 
shall----
          [(1) ensure that written information concerning food 
        stamps, the program for 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 the child 
        support enforcement program under part D of title IV of 
        the Social Security Act (42 U.S.C. 651 et seq.) is 
        provided on at least one occasion to each adult who 
        applies for or participates in the commodity 
        supplemental food program;
          [(2) provide each local agency with materials showing 
        the maximum income limits, according to family size, 
        applicable to pregnant women, infants, and children up 
        to age 6 under the medical assistance program 
        established under title XIX of the Social Security Act 
        (42 U.S.C. 1396 et seq.) (hereinafter referred to in 
        this section as the `medicaid program') which materials 
        may be identical to those provided under section 
        17(e)(3) of the Child Nutrition Act of 1966 (42 U.S.C. 
        1786(e)(3)); and
          [(3) ensure that local agencies provide to pregnant, 
        breast feeding and post partum women, and adults 
        applying on behalf of infants or children, who apply to 
        the commodity supplemental food program, or who reapply 
        to such program, written information about the medicaid 
        program and referral to the program or to agencies 
        authorized to determine presumptive eligibility for the 
        medicaid program, if the individuals are not 
        participating in the medicaid program.
    [(i) Each State agency administering a commodity 
supplemental food program serving elderly persons shall ensure 
that written information is provided on at least one occasion 
to each elerly participant in or applicant for the commodity 
supplemental food program for the elderly concerning--
          [(1) food stamps provided under the Food Stamp Act of 
        1977 (7 U.S.C. 2011 et seq.);
          [(2) the supplemental security income benefits 
        provided under title XVI of the Social Security Act (42 
        U.S.C. 1381 et seq.); and
          [(3) medical assistance provided under title XIX of 
        such Act (42 U.S.C. 1396 et seq.) (including medical 
        assistance provided to a qualified medicare beneficiary 
        (as defined in section 1905(p) of such Act (42 U.S.C. 
        1396d(5))
    [(j)(1) If the Secretary must pay a significantly higher 
than expected price for one or more types of commodities 
purchased under the commodity supplemental food program, the 
Secretary shall promptly determine whether the price is likely 
to cause the number of persons that can be served in the 
program in a fiscal year to decline.
    [(2) If the Secretary determines that such a decline would 
occur, the Secretary shall promptly notify the State agencies 
charged with operating the program of the decline and shall 
ensure that a State agency notify all local agencies operating 
the program in the State of the decline.
    [(k)(1) The Secretary or a designee of the Secretary shall 
have the authority to--
          [(A) determine the amount of, settle, and adjust any 
        claim arising under the commodity supplemental food 
        program; and
          [(B) waive such a claim if the Secretary determines 
        that to do so will serve the purposes of the program.
    [(2) Nothing contained in this subsection shall be 
construed to diminish the authority of the Attorney General of 
the United States under section 516 of title 28, United States 
Code, to conduct litigation on behalf of the United States.]
          * * * * * * *

       THE FOOD, AGRICULTURE, CONSERVATION, AND TRADE ACT OF 1990

          * * * * * * *

             TITLE XVII--FOOD STAMP AND RELATED PROVISIONS

          * * * * * * *
    Sec. 1773. (a)
          * * * * * * *
    [(f) Report on Entitlement Commodity Processing.--
          [(1) In general.--Not later than January 1, 1992, the 
        Comptroller General of the United States shall submit a 
        report regarding processing of entitlement commodities 
        used in child nutrition programs to the Committee on 
        Agriculture of the House of Representatives and the 
        Committee on Agriculture, Nutrition, and Forestry of 
        the Senate.
          [(2) Consultation.--The Comptroller General shall 
        consult with representatives of State and Federal 
        commodity distribution authorities, local elected 
        school authorities, local school food service 
        authorities and food processors with experience 
        providing service to child nutrition programs regarding 
        the scope and design of the report.
          [(3) Evaluation.--The report shall evaluate the 
        extent to which--
                  [(A) processing of entitlement commodities 
                occurs in the States;
                  [(B) general requirements for participation 
                in the processing vary among States; and
                  [(C) entitlement commodity recipients are 
                satisfied with access to and services provided 
                through entitlement commodity processing.]
          * * * * * * *
                       THE FOOD STAMP ACT OF 1977

          * * * * * * *

             TITLE XVII--FOOD STAMP AND RELATED PROVISIONS

          * * * * * * *

                ESTABLISHMENT OF THE FOOD STAMP PROGRAM

    Sec. 4. (a)(1) Subject to the availability of funds 
appropriated under section 18 of this Act, the Secretary is 
authorized to formulate and administer a food stamp program 
under which, at the request of the State agency, eligible 
households within the State shall be provided an opportunity to 
obtain a more nutritious diet through the issuance to them of 
an allotment, except that a State may not participate in the 
food stamp program if the Secretary determines that State or 
local sales taxes are collected within that State on purchases 
of food made with coupons issued under this Act. The coupons so 
received by such households shall be used only to purchase food 
from retail food stores which have been approved for 
participation in the food stamp program. Coupons issued and 
used as provided in this Act shall be redeemable at face value 
by the Secretary through the facilities of the Treasury of the 
United States.
    (2) At the request of the State agency, a State may operate 
a program, as provided in section 24, within the State or any 
political subdivisions within the State in which households 
with one or more members receiving regular cash benefits under 
the program established by the State under the Temporary 
Assistance for Needy Families Block Grant be issued food stamp 
benefits in accordance with the rules and procedures 
established--
          (A) by the State under the Temporary Assistance for 
        Needy Families Block Grant or this Act; or
          (B) under the food stamp program.
          * * * * * * *
SEC. 24. SIMPLIFIED FOOD STAMP PROGRAM.

    (a) If a State elects to operate a program under section 
4(a)(2) within the State or any political subdivision within 
the State--
          (1) households in which all members receive regular 
        cash benefits under the program established by the 
        State under the Temporary Assistance for Needy Families 
        Block Grant shall be automatically eligible to 
        participate in the food stamp program;
          (2) benefits under such program shall be determined 
        under the rules and procedures established by the State 
        or political subdivision under the Temporary Assistance 
        for Needy Families Block Grant or under the food stamp 
        program, subject to subsection (g).
    (b) In approving a State plan to carry out a program under 
section 4(a)(2), the Secretary shall certify that the average 
level of food stamp benefits per household participating in the 
program under such section for the State or political 
subdivision in which such program is in operation is not 
expected to exceed the average level of food stamp benefits per 
household that received benefits under the program established 
by a State under part A of title IV of the Social Security Act 
in such area in the preceding fiscal year, adjusted for any 
changes in the thrifty food plan under section 3(o). The 
Secretary shall compute the permissible average level of food 
stamp benefits per household each year for each State or 
political subdivision in which such program is in operation and 
may require a State to report any information necessary to make 
such computation.
    (c) When the Secretary determines that the average level of 
food stamp benefits per household provided by the State or 
political subdivision under such program has exceeded the 
permissible average level of food stamp benefits per household 
for the State or political subdivision in which the program was 
in operation, the State or political subdivision shall pay to 
the Treasury of the United States the value of the food stamp 
benefits in excess of the permissible average level of food 
stamp benefits per household in the State of political 
subdivision within 90 days after the notification of such 
excess payments.
    (d)(1) A household against which a penalty is imposed 
(including a reduction in benefits or disqualification) for 
noncompliance with the program established by the State under 
the Temporary Assistance for Needy Families Block Grant may 
have the same penalty imposed against it (including a reduction 
in benefits or disqualification) in the program administered 
under this section.
    (2) If the penalty for noncompliance with the program 
established by the State under the Temporary Assistance for 
Needy Families block grant is a reduction in benefits in such 
program, the household shall not receive an increased allotment 
under the program administered under this section as a result 
of a decrease in the household's income (as determined by the 
State under this section) caused by such penalty.
    (3) Any household disqualified from the program 
administered under this subsection may, after such 
disqualification period has expired, apply for food stamp 
benefits under this Act and shall be treated as a new 
applicant.
    (e) If a State or political subdivision, at its option, 
operates a program under section 4(a)(2) for households that 
include any member who does not receive regular cash benefits 
under the program established by the State under the Temporary 
Assistance for Needy Families Block Grant, the Secretary shall 
ensure that the State plan provides that household eligibility 
shall be determined under this Act, benefits may be determined 
under the rules and procedures established by the State under 
the Temporary Assistance for Needy Families Block Grant or this 
Act, and benefits provided under this section shall be 
equitably distributed among all household members.
    (f)(1) Under the program operated under section 4(a)(2), 
the State may elect to provide cash assistance in lieu of 
allotments to all households that include a member who is 
employed and whose employment procedures for the benefit of the 
member's household income that satisfies the requirements of 
paragraph (2).
    (2) The State, in electing to provide cash assistance under 
paragraph (1), at a minimum shall require that such earned 
income is--
          (A) not less than $350 per month;
          (B) earned from employment provided by a 
        nongovernmental employer, as determined by the State; 
        and
          (C) received from the same employer for a period of 
        employment of not less than 3 consecutive months.
    (3) If a State that makes the election described in 
paragraph (1) identifies each household that receives cash 
assistance under this subsection--
          (A) the Secretary shall pay to the State an amount 
        equal to the value of the allotment that such household 
        would be eligible to receive under this section but for 
        the operation of this subsection;
          (B) the State shall provide such amount to the 
        household as cash assistance in lieu of such allotment; 
        and
          (C) for purposes of the food stamp program (other 
        than this section and section 4(a)(2))--
                  (i) such cash assistance shall be considered 
                to be an allotment; and
                  (ii) such household shall not receive any 
                other food stamp benefit for the period for 
                which such cash assistance is provided.
    (4) A State that makes the election in paragraph (1) 
shall--
          (A) increase the cash benefits provided to households 
        under this subsection to compensate for any State or 
        local sales tax that may be collected on purchases of 
        food by any household receiving cash benefits under 
        this subsection, 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
          (B) pay the cost of any increase in cash benefits 
        required by paragraph (1).
    (5) After a State operates a program under this subsection 
for 2 years, the State shall provide to the Secretary a written 
evaluation of the impact of cash assistance.
    (g) In operating a program under section 4(a)(2), the State 
or political subdivision may follow the rules and procedures 
established by the State or political subdivision under the 
Temporary Assistance for Needy Families Block Grant or under 
the food stamp program, except that the State or political 
subdivision shall comply with the requirements of--
          (1) subsections (a) through (g) of section 7 
        (relating to the issuance and use of coupons);
          (2) section 8(a) (relating to the value of 
        allotments, except that a household's income may be 
        determined under the program established by the State 
        under the Temporary Assistance for Needy Families Block 
        Grant);
          (3) section 8(b) (allotment not considered income or 
        resources);
          (4) subsections (a), (c), (d), and (n) of section 11 
        (relating to administration);
          (5) paragraphs (8), (12), (17), (19), (21), (26), and 
        (27) of section 11(e) (relating to the State plan);
          (6) section 11(e)(10) (relating to a fair hearing) or 
        a comparable requirement established by the State under 
        the Temporary Assistance for Needy Families Block 
        Grant; and
          (7) section 16 (relating to administrative cost-
        sharing and quality control).
          * * * * * * *

                             administration

    Sec. 11. (a) * * *
          * * * * * * *
    (e)(1) * * *
          * * * * * * *
    (24) at the option of the State, for procedures necessary 
to obtain payment of uncollected overissuance of coupons from 
unemployment compensation pursuant to section 13(c); [and]
    (25) a procedure for designating project areas or parts of 
project areas that are rural and in which low-income persons 
face substantial difficulties in obtaining transportation. The 
State agency shall designate the areas according to procedures 
approved by the Secretary. In each area so designated, the 
State agency shall provide for the issuance of coupons by mail 
to all eligible households in the area, except that any 
household with mail losses exceeding levels established by the 
Secretary shall not be entitled to such a mailing and the State 
agency shall not be required to issue coupons by mail in those 
localities within such area where the mail loss rates exceed 
standards set by the Secretary[.];
    (26) the plans of the State agency for operating, at the 
election of the State, a program under section 4(a)(2), 
including--
          (A) the rules and procedures to be followed by the 
        State to determine food stamp benefits;
          (B) a statement specifying whether the program 
        operated by the State under section 4(a)(2) will 
        include households that include members who do not 
        receive regular cash benefits under the program 
        established by the State under the Temporary Assistance 
        for Needy Families Block Grant; and
          (C) a description of the method by which the State or 
        political subdivision will carry out a quality control 
        system under section 16(c); and
    (27) the plans of the State agency for including eligible 
food stamp recipients in a work supplementation or support 
program under section 16(j).
          * * * * * * *
                           value of allotment

    Sec. 8. (a) * * *
          * * * * * * *
    [(e)(1) The Secretary may permit not more than five 
statewide projects (upon the request of a State) and not more 
than five projects in political subdivisions of States (upon 
the request of a State or political subdivision) to operate a 
program under which a household shall be considered to have 
satisfied the application requirements prescribed under section 
5(a) and the income and resource requirements prescribed under 
subsections (d) through (g) of section 5 if such household--
          [(A) includes one or more members who are recipients 
        of--
                  [(i) aid to families with dependent children 
                under part A of title IV of the Social Security 
                Act (42 U.S.C. 601 et seq.);
                  [(ii) supplemental security income under 
                title XVI of such Act (42 U.S.C. 1381 et seq.); 
                or
                  [(iii) medical assistance under title XIX of 
                such Act (42 U.S.C. 1396 et seq.); and
          [(B) has an income that does not exceed the 
        applicable income standard of eligibility described in 
        section 5(c).
    [(2) Except as provided in paragraph (3), a State or 
political subdivision that elects to operate a program under 
this subsection shall base the value of an allotment provided 
to a household under subsection (a) on--
          [(A)(i) the size of the household; and
          [(ii)(I) benefits paid to such household under a 
        State plan for aid to families with dependent children 
        approved under part A of title IV of the Social 
        Security Act; or
          [(II) the income standard of eligibility for medical 
        assistance under title XIX of such Act; or
          [(B) at the option of the State or political 
        subdivision, the standard of need for such size 
        household under the programs referred to in clause 
        (A)(ii).
    [(3) The Secretary shall adjust the value of allotments 
received by households under a program operated under this 
subsection to ensure that the average allotment by household 
size for households participating in such program and receiving 
such aid to families with dependent children, such supplemental 
security income, or such medical assistance, as the case may 
be, is not less than the average allotment that would have been 
provided under this Act but for the operation of this 
subsection, for each category of households, respectively, in a 
State or political subdivision, for any period during which 
such program is in operation.
    [(4) The Secretary shall evaluate the impact of programs 
operated under this subsection on recipient households, 
administrative costs, and error rates.
    [(5) The administrative costs of such programs shall be 
shared in accordance with section 16.
    [(6) In implementing this section, the Secretary shall 
consult with the Commissioner of Social Security and the 
Secretary of Health and Human Services to ensure that to the 
extent practicable, in the case of households participating in 
such programs, the processing of applications for, and 
determinations of eligibility to receive, food stamp benefits 
are simplified and are unified with the processing of 
applications for, and determinations of eligibility to receive, 
benefits under such titles of the Social Security Act (42 
U.S.C. 601 et seq.).]
          * * * * * * *
    Sec. 17. (a)(1) * * *
          * * * * * * *
    [(i)(1) The Secretary may conduct four demonstration 
projects, in both urban and rural areas, under which households 
in which each member receives benefits under a State plan 
approved under part A of title IV of the Social Security Act 
(42 U.S.C. 601 et seq.) (hereafter in this subsection referred 
to as an ``eligible household'') shall be issued monthly 
allotments following the rules and procedures of programs under 
part A of title IV of the Social Security Act, and without 
regard to the eligibility, benefit, and administrative rules 
established under this Act other than those terms and 
conditions specified under this subsection or established by 
the Secretary to ensure program integrity.
    [(2) In carrying out the demonstration projects, the 
Secretary shall ensure the following:
          [(A) The third sentence of section 3(i), subsections 
        (b) and (d)(2) of section 6, the first sentence of 
        section 6(c), paragraphs (1)(B), (3), (4), and (9) of 
        section 11(e), and all applicable provisions of this 
        Act dealing with the treatment of homeless individuals 
        and migrant and seasonal farm worker households shall 
        apply.
          [(B) Assistance under the food stamp program shall be 
        furnished to all eligible households who make 
        application for assistance by providing any information 
        that is needed by the State agency to determine the 
        correct monthly allotment and that has not been 
        provided as part of the household's application for 
        assistance under part A of title IV of the Social 
        Security Act.
          [(C) Eligible households' monthly allotments shall be 
        calculated under section 8(a), except that a 
        household's income shall be determined in accordance 
        with subparagraphs (D) and (E). The allotments shall be 
        provided retroactive to the date of application.
          [(D) For purposes of determining monthly allotments 
        under this subsection, household income shall be the 
        benefit provided under part A of title IV of the Social 
        Security Act and the amount used to determine the 
        household's benefit under such part (not including any 
        amount disregarded for dependent care expenses), except 
        that the amount shall be calculated without regard to 
        section 402(a)(7)(C) of such Act (42 U.S.C. 
        602(a)(7)(C)) and shall not include nonrecurring lump-
        sum income and income deemed or allocated to the 
        household under such part.
          [(E) In computing household income for purposes of 
        determining monthly allotments, all eligible households 
        shall be allowed the standard, earned income, excess 
        shelter, and medical expense deductions provided under 
        section 5(e) in lieu of any earned income disregards 
        provided under section 402(a)(8) of the Social Security 
        Act (42 U.S.C. 602(a)(8)). Alternatively, the Secretary 
        may approve demonstration projects under which 
        households without earned income are allowed such 
        standard, excess shelter, and medical expense 
        deductions, and household income for households with 
        earned income is computed using such deductions and the 
        earned income disregards provided under section 
        402(a)(8) of the Social Security Act to the extent that 
        the Secretary determines they are consistent with the 
        purposes of the demonstration projects required under 
        this subsection.
          [(F) Uninterrupted food stamp assistance shall be 
        provided to households who become ineligible to receive 
        the assistance under this subsection but are determined 
        otherwise eligible for food stamp assistance and to 
        households receiving food stamp assistance other than 
        under this subsection who are determined eligible under 
        this subsection.
          [(G) Any other requirements and administrative 
        procedures equivalent to those applicable under part A 
        of title IV of the Social Security Act (42 U.S.C. 601 
        et seq.) may be used in implementing the demonstration 
        projects required under this subsection, if the 
        Secretary determines that the requirements or 
        procedures further the purposes of this subsection and 
        do not undermine program integrity.
    [(3) In establishing the projects, the Secretary shall 
solicit proposals from, and consult with, interested State and 
local agencies and shall consult with the Secretary of Health 
and Human Services on waivers of Federal rules under part A of 
title IV of the Social Security Act that would assist in 
carrying out the projects required under this subsection.
    [(4) Not later than six months after termination of any 
project, the Secretary shall submit a report to the Committee 
on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate 
evaluating the results of the demonstration projects 
established under this subsection, including evaluations of the 
effects on recipients and administrators.]
    [(j)](i)(1)(A) Subject to the availability of funds 
specifically appropriated to carry out this subsection and 
subject to the other provisions of this subsection, during each 
of fiscal years 1992 through 1995, the Secretary shall make 
grants competitively awarded to public or private nonprofit 
organizations to fund food stamp outreach demonstration 
projects (hereinafter in this subsection referred to as the 
``projects'') and related evaluations in areas of the United 
States to increase participation by eligible low-income 
households in the food stamp program. The total amount of 
grants provided during a fiscal year may not exceed $5,000,000. 
Funds appropriated to carry out this subsection shall be used 
in the year during which the funds are appropriated. Not more 
than 20 percent of the funds appropriated to carry out this 
subsection shall be used for evaluations.
    (B) The Secretary shall make a grant under this paragraph 
only to an entity that demonstrates to the Secretary that the 
entity is able to conduct the outreach functions described in 
this subsection.
    (2) Outreach projects under this subsection shall be 
targeted toward members of rural, elderly, and homeless 
populations, low-in-come working families with children, and 
non-English-speaking minorities (hereinafter in this subsection 
collectively referred to as ``target populations'').
    (3)(A) The Secretary shall appoint an advisory panel 
(hereinafter in this subsection referred to as the ``panel'') 
composed of representatives of the target populations as well 
as individuals with expertise in the area of program 
evaluation. The panel shall not be subject to the Federal 
Advisory Committee Act (5 U.S.C. App. 2).
    (B) The Secretary shall select recipients for grants, 
taking into consideration any recommendations from the panel 
concerning criteria that should be used in selecting 
recipients, to carry out projects under this subsection based 
on the appropriateness of the methods proposed for the projects 
to reach target populations. Appropriate methods shall 
include--
          (i) the production of electronic media campaigns 
        (with the total amount allocated for the campaigns in 
        the aggregate not to exceed 15 percent of the total 
        amount of funds specified in paragraph (1)(A));
          (ii) utilization of local outreach workers and 
        volunteers;
          (iii) development of solutions to transportation and 
        access problems;
          (iv) in-service training for those capable of 
        referring households to the program;
          (v) community presentations and education;
          (vi) pre-screening assistance for program 
        eligibility;
          (vii) individualized client assistance;
          (viii) consultation and referral for benefit appeals; 
        and
          (ix) recruitment of authorized representatives for 
        applicants unable to appear for certification or at 
        authorized food stores.
    (C) In selecting grant recipients, the Secretary shall take 
into consideration the ability of the applicants to produce 
useful data for evaluation purposes.
    (D) In selecting grant recipients from among applicant 
public agencies, preference shall be given to those applicants 
that propose to involve nonprofit organizations in projects to 
be carried out with the grants.
    (E) The Secretary shall provide at least one grant equal to 
50 percent of the cost of the development of outreach materials 
aimed at the general food stamp eligible population as well as 
the specific target populations, including written materials 
and public service announcements, so that the materials may be 
used or adopted by other grant recipients, as appropriate. To 
be eligible to receive any such grant, a recipient shall 
provide matching funds equal to 50 percent of the cost of the 
development of materials described in the preceding sentence. 
In carrying out this subparagraph, the Secretary shall give 
preference to applicants that demonstrate the ability to 
disseminate the materials through other public and private 
nonprofit organizations. Not to exceed $500,000 of the funds 
provided under this subsection for any fiscal year shall be 
used for the grant.
    (4)(A) The Secretary shall evaluate a sufficient number of 
projects to be able to determine the effectiveness of the 
projects and the techniques employed by the projects with 
respect to--
          (i) success in reducing barriers to participation;
          (ii) increasing overall program participation 
        including participation among target populations;
          (iii) administrative effectiveness;
          (iv) program efficiency; and
          (v) adequacy of administrative resource levels to 
        conduct the activities effectively.
    (B) The Secretary shall provide an interim report on the 
results of the evaluation carried out under subparagraph (A) 
not later than 1 year after a sufficient number of projects 
have begun and a final report not later than 3 years after a 
sufficient number of projects have begun to the Committee on 
Agriculture of the House of Representatives and the Committee 
on Agriculture, Nutrition, and Forestry of the Senate.
    (C) The Secretary shall also examine and report on previous 
research regarding reasons for nonparticipation and effective 
methods to conduct outreach and to reduce barriers to 
participation.
    (5) The Secretary shall--
          (A) within 180 days after funds are appropriated, 
        publish such notice as may be necessary to implement 
        this subsection;
          (B) accept proposals from organizations for projects 
        under this subsection for 90 days following the date 
        the notice is published; and
          (C) begin to award grants under this subsection 
        beginning no later than 180 days following the date the 
        notice is published.
    [(k)](j) The Secretary shall conduct, under such terms and 
conditions as the Secretary shall prescribe, for a period not 
to exceed 4 years, projects to test allowing not more than 
11,000 eligible households, in the aggregate, to accumulate 
resources up to $10,000 each (which shall be excluded from 
consideration as a resource) for later expenditure for a 
purpose directly related to improving the education, training, 
or employability (including self-employment) of household 
members, for the purchase of a home for the household, for a 
change of the household's residence, or for making major 
repairs to the household's home.
    [(l)](k) The Secretary shall use up to $4,000,000 of the 
funds provided in advance in appropriations Acts for projects 
authorized by this section to conduct demonstration projects in 
which State or local food stamp agencies test innovative ideas 
for working with State or local law enforcement agencies to 
investigate and prosecute coupon trafficking.
                              definitions

    Sec. 3. (a) * * *
          * * * * * * *
    (o) ``Thrifty food plan'' means the diet required to feed a 
family of four persons consisting of a man and a woman twenty 
through fifty, a child six through eight, and a child nine 
through eleven years of age, determined in accordance with the 
Secretary's calculations. The cost of such diet shall be the 
basis for uniform allotments for all households regardless of 
their actual composition, except that the Secretary shall (1) 
make household-size adjustments (based on the unrounded cost of 
such diet) taking into account economies of scale, (2) make 
cost adjustments in the thrifty food plan for Hawaii and the 
urban and rural parts of Alaska to reflect the cost of food in 
Hawaii and urban and rural Alaska, (3) make cost adjustments in 
the separate thrifty food plans for Guam, and the Virgin 
Islands of the United States to reflect the cost of food in 
those States, but not to exceed the cost of food in the fifty 
States and the District of Columbia, [(4) through January 1, 
1980, adjust the cost of such diet every January 1 and July 1 
to the nearest dollar increment to reflect changes in the cost 
of the thrifty food plan for the six months ending the 
preceding September 30 and March 31, respectively, (5) on 
January 1, 1981, adjust the cost of such diet to the nearest 
dollar increment to reflect changes in the cost of the thrifty 
food plan for the twelve months ending the preceding September 
30, (6) on October 1, 1982, adjust the cost of such diet to 
reflect changes in the cost of the thrifty food plan for the 
twenty-one months ending June 30, 1982, reduce the cost of such 
diet by 1 percent, and round the result to the nearest lower 
dollar increment for each household size, (7) on October 1, 
1983, and October 1, 1984, adjust the cost of such diet to 
reflect changes in the cost of thrifty food plan for the twelve 
months ending the preceding June 30, reduce the cost of such 
diet by 1 per centum, and round the result to the nearest lower 
dollar increment for each household size, (8) on October 1, 
1985, and each October 1 thereafter through October 1, 1987, 
adjust the cost of such diet to reflect changes in the cost of 
the thrifty food plan for the twelve months ending the 
preceding June 30 and round the result to the nearest lower 
dollar increment for each household size, (9) on October 1, 
1988, adjust the cost of such diet to reflect 100.65 percent of 
the cost of the thrifty food plan in the preceding June, and 
round the result to the nearest lower dollar increment for each 
household size, (10) on October 1, 1989, adjust the cost of 
such diet to reflect 102.05 percent of the cost, in the 
preceding June (without regard to the adjustment made under 
clause (9)), of the then most recent thrifty food plan as 
determined by the Secretary or the cost of the thrifty food 
plan in effect on the date of enactment of the Hunger 
Prevention Act of 1988, whichever is greater, and round the 
result to the nearest lower dollar increment for each household 
size, and (11) on October 1, 1990, and each October 1 
thereafter, adjust the cost of such diet to reflect 103 percent 
of the cost, in the preceding June (without regard to any 
previous adjustment made under clause (9), (10), or this 
clause), of the then most recent thrifty food plan as 
determined by the Secretary or the cost of the thrifty food 
plan in effect on the date of enactment of the Hunger 
Prevention Act of 1988, whichever is greater, and round the 
result to the nearest lower dollar increment for each household 
size, except that on October 1, 1992, and (in the case of 
households residing in Alaska) on October 1, 1994, the 
Secretary may not reduce the cost of such diet.] (4) on October 
1, 1995, adjust the cost of the thrifty food plan to reflect 
103 percent of the cost of the thrifty food plan in June 1994 
and increase such amount by 2 percent, rounding the result to 
the nearest lower dollar increment for each household size; and 
(5) on October 1, 1996, and each October 1 thereafter, increase 
the amount established for the preceding October 1, before such 
amount was rounded, by 2 percent, rounding the result to the 
nearest lower dollar increment for each household size.
          * * * * * * *
                          eligible households

    Sec. 5. (a) * * *
          * * * * * * *
    (d) Household income for purposes of the food stamp program 
shall include all income from whatever source excluding only 
(1) any gain or benefit which is not in the form of money 
payable directly to a household (notwithstanding its conversion 
in whole or in part to direct payments to households pursuant 
to any demonstration project carried out or authorized under 
Federal law including demonstration projects created by the 
waiver of provisions of Federal law), except as provided in 
subsection (k), (2) any income in the certification period 
which is received too infrequently or irregularly to be 
reasonably anticipated, but not in excess of $30 in a quarter, 
subject to modification by the Secretary in light of subsection 
(f), (3) all educational loans on which payment is deferred, 
grants, scholarships, fellowships, veterans' educational 
benefits, and the like (A) awarded to a household member 
enrolled at a recognized institution of post-secondary 
education, at a school for the handicapped, in a vocational 
education program, or in a program that provides for completion 
of a secondary school diploma or obtaining the equivalent 
thereof, (B) to the extent that they do not exceed the amount 
used for or made available as an allowance determined by such 
school, institution, program, or other grantor, for tuition and 
mandatory fees (including the rental or purchase of any 
equipment, materials, and supplies related to the pursuit of 
the course of study involved), books, supplies, transportation, 
and other miscellaneous personal expenses (other than living 
expenses), of the student incidental to attending such school, 
institution, or program, and (C) to the extent loans include 
any origination fees and insurance premiums, (4) all loans 
other than educational loans on which repayment is deferred, 
(5) reimbursements which do not exceed expenses actually 
incurred and which do not represent a gain or benefit to the 
household and any allowance a State agency provides no more 
frequently than annually to families with children on the 
occasion of those children's entering or returning to school or 
child care for the purpose of obtaining school clothes (except 
that no such allowance shall be excluded if the State agency 
reduces monthly assistance to families with dependent children 
under part A of title IV of the Social Security Act (42 U.S.C. 
601 et seq.) in the month for which the allowance is provided): 
Provided, That no portion of benefits provided under title IV-A 
of the Social Security Act, to the extent it is attributable to 
an adjustment for work-related or child care expenses (except 
for payments or reimbursements for such expenses made under an 
employment, education, or training program initiated under such 
title after the date of enactment of the Hunger Prevention Act 
of 1988), and no portion of any educational loan on which 
payment is deferred, grant, scholarship, fellowship, veterans' 
benefits, and the like that are provided for living expenses, 
shall be considered such reimbursement, (6) moneys received and 
used for the care and maintenance of a third-party beneficiary 
who is not a household member, (7) income earned by a child who 
is a member of the household, who is an elementary or secondary 
school student, and who is 21 years of age or younger, (8) 
moneys received in the form of nonrecurring lump-sum payments, 
including, but not limited to, income tax refunds,5-5 
rebates, or credits, cash donations based on need that are 
received from one or more private nonprofit charitable 
organizations, but not in excess of $300 in the aggregate in a 
quarter, retroactive lump-sum social security or railroad 
retirement pension payments and retroactive lump-sum insurance 
settlements: Provided, That such payments shall be counted as 
resources, unless specifically excluded by other laws, (9) the 
cost of producing self-employed income, but household income 
that otherwise is included under this subsection shall be 
reduced by the extent that the cost of producing self-
employment income exceeds the income derived from self-
employment as a farmer, (10) any income that any other Federal 
law specifically excludes from consideration as income for 
purposes of determining eligibility for the food stamp program 
except as otherwise provided in subsection (k) of this section, 
(11) any payments or allowances made for the purpose of 
providing energy assistance [(A)] under any Federal law, [or 
(B) under any State or local laws, designated by the State or 
local legislative body authorizing such payments or allowances 
as energy assistance, and determined by the Secretary to be 
calculated as if provided by the State or local government 
involved on a seasonal basis for an aggregate period not to 
exceed six months in any year even if such payments or 
allowances (including tax credits) are not provided on a 
seasonal basis because it would be administratively infeasible 
or impracticable to do so,] (12) through September 30 of any 
fiscal year, any increase in income attributable to a cost-of-
living adjustment made on or after July 1 of such fiscal year 
under title II or XVI of the Social Security Act (42 U.S.C. 401 
et seq.), section 3(a)(1) of the Railroad Retirement Act of 
1974 (45 U.S.C. 231b(a)(1)), or section 3112 of title 38, 
United States Code, if the household was certified as eligible 
to participate in the food stamp program or received an 
allotment in the month immediately preceding the first month in 
which the adjustment was effective, (13) at the option of a 
State agency and subject to subsection (m), child support 
payments that are excluded under section 402(a)(8)(A)(vi) of 
the Social Security Act (42 U.S.C. 602(a)(8)(A)(vi), (14) any 
payment made to the household under section 3507 of the 
Internal Revenue Code of 1986 (relating to advance payment of 
earned income credit), (15) any payment made to the household 
under section 6(d)(4)(I) for work related expenses or for 
dependent care, and (16) any amounts necessary for the 
fulfillment of a plan for achieving self-support of a household 
member as provided under subparagraph (A)(iii) or (B)(iv) of 
section 1612(b)(4) of the Social Security Act (42 U.S.C. 
1382a(b)(4)).
    [(e) In computing household income for purposes of 
determining eligibility and benefit levels for households 
containing an elderly or disabled member and determining 
benefit levels only for all other households, the Secretary 
shall allow a standard deduction of $85 a month for each 
household except that households in Alaska, Hawaii, Guam, and 
the Virgin Islands of the United States shall be allowed a 
standard deduction of $145, $120, $170, and $75, respectively. 
Such standard deductions shall be adjusted (1) on October 1, 
1983, to the nearest lower dollar increment to reflect changes 
in the Consumer Price Index for all urban consumers published 
by the Bureau of Labor Statistics, for items other than food 
and the homeowners' costs and maintenance and repair component 
of shelter costs, as appropriately adjusted by the Bureau of 
Labor Statistics after consultation with the Secretary, for the 
fifteen months ending the preceding March 31, (2) on October 1, 
1984, to the nearest lower dollar increment to reflect such 
changes for the fifteen months ending the preceding June 30, 
(3) on October 1, 1985, and October 1, 1986, to the nearest 
lower dollar increment to reflect such changes for the twelve 
months ending the preceding June 30, and (4) on October 1, 
1987, and each October 1 thereafter, to the nearest lower 
dollar increment to reflect changes in the Consumer Price Index 
for all urban consumers published by the Bureau of Labor 
Statistics, for items other than food, for the twelve months 
ending the preceding June 30. All households with earned income 
shall be allowed an additional deduction of 20 per centum of 
all earned income (other than that excluded by subsection (d) 
of this section), to compensate for taxes, other mandatory 
deductions from salary, and work expenses, except that such 
additional deduction shall not be allowed with respect to 
earned income that a household willfully or fraudulently fails 
(as proved in a proceeding provided for in section 6(b)) to 
report in a timely manner. Households, other than those 
households containing an elderly or disabled member, shall also 
be entitled, with respect to expenses other than expenses paid 
on behalf of the household by a third party, amounts made 
available and excluded for the expenses under subsection 
(d)(3), and expenses that are paid under section 6(d)(4)(I) for 
dependent care, to (1) a dependent care deduction, the maximum 
allowable level of which shall be $200 a month for each 
dependent child under 2 years of age and $175 a month for each 
other dependent, for the actual cost of payments necessary for 
the care of a dependent when such care enables a household 
member to accept or continue employment, or training or 
education which is preparatory for employment and (2) an excess 
shelter expense deduction to the extent that the monthly amount 
expended by a household for shelter exceeds an amount equal to 
50 per centum of monthly household income after all other 
applicable deductions have been allowed. In the 15-month period 
ending September 30, 1995, such excess shelter expense 
deduction shall not exceed $231 a month in the 48 contiguous 
States and the District of Columbia, and shall not exceed, in 
Alaska, Hawaii, Guam, and the Virgin Islands of the United 
States, $402, $330, $280, and $171 a month, respectively. In 
the 15-month period ending December 31, 1996, such excess 
shelter expense deduction shall not exceed $247 a month in the 
48 contiguous States and the District of Columbia, and shall 
not exceed, in Alaska, Hawaii, Guam, and the Virgin Islands of 
the United States, $429, $353, $300, and $182 a month, 
respectively. 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 which does not 
fluctuate within a year to reflect seasonal variations. An 
allowance for a heating or cooling expense may not be used for 
a household that does not incur a heating or cooling expense, 
as the case may be, or does incur a heating or cooling expense 
but is located in a public housing unit which has central 
utility meters and charges households, with regard to such 
expense, only for excess utility costs. No such allowance may 
be used for a household that shares such 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. If a State agency elects to use a standard utility 
allowance that reflects heating or cooling costs, it shall be 
made available to households receiving a payment, or on behalf 
of which a payment is made, under the Low-Income House Energy 
Assistance Act of 1981 (42 U.S.C. 8621 et seq.) or other 
similar energy assistance program, provided that the household 
still incurs out-of-pocket heating or cooling expenses. A State 
agency may use a separate standard utility allowance for 
households on behalf of which such payment is made, but may not 
be required to do so. A State agency not electing to use a 
separate allowance, and making a single standard utility 
allowance available to households incurring heating or cooling 
expenses (other than households described in the sixth sentence 
of this subsection) may not be required to reduce such 
allowance due to the provision (direct or indirect) of 
assistance under the Low-Income Home Energy Assistance Act of 
1981. For purposes of the food stamp program, assistance 
provided under the Low-Income Home Energy Assistance Act of 
1981 shall be considered to be prorated over the entire heating 
or cooling season for which it was provided. A State agency 
shall allow a household to switch between any standard utility 
allowance and a deduction based on its actual utility costs at 
the end of any certification period and up to one additional 
time during each twelve-month period. Households containing an 
elderly or disabled member shall also be entitled, with respect 
to expenses other than expenses paid on behalf of the household 
by a third party, to--
          [(A) an excess medical expense deduction for that 
        portion of the actual cost of allowable medical 
        expenses, incurred by elderly or disabled members, 
        exclusive of special diets, that exceed $35 a month;
          [(B) a dependent care deduction, the maximum 
        allowable level of which shall be the same as that 
        contained in clause (1) of the fourth sentence of this 
        subsection, for that actual cost of payments necessary 
        for the care of a dependent, regardless of the 
        dependent's age, when such care enables a household 
        member to accept or continue employment, or training or 
        education that is preparatory for employment; and
          [(C) an excess shelter expense deduction to the 
        extent that the monthly amount expended by a household 
        for shelter exceeds an amount equal to 50 per centum of 
        monthly household income after all other applicable 
        deductions have been allowed.
State agencies shall offer eligible households a method of 
claiming a deduction for recurring medical expenses that are 
initially verified under the excess medical expense deduction 
provided for in subparagraph (A), in lieu of submitting 
information or verification on actual expenses on a monthly 
basis. The method described in the preceding sentence shall be 
designed to minimize the administrative burden for eligible 
elderly and disabled household members choosing to deduct their 
recurrent medical expenses pursuant to such method, shall rely 
on reasonable estimates of the member's expected medical 
expenses for the certification period (including changes that 
can be reasonably anticipated based on available information 
about the member's medical condition, public or private medical 
insurance coverage, and the current verified medical expenses 
incurred by the member), and shall not require further 
reporting or verification of a change in medical expenses if 
such a change has been anticipated for the certification 
period. Before determining the excess shelter expense 
deduction, all households 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 such 
household member was legally obligated to make such payments, 
except that the Secretary is authorized to prescribe by 
regulation the methods, including calculation on a 
retrospective basis, that State agencies shall use to determine 
the amount of the deduction for child support payments.]
    (e)(1) Standard and Earned Income Deductions.--(A) In 
computing household income, the Secretary shall allow a 
standard deduction of $134 a month for each household, except 
that households in Alaska, Hawaii, Guam, and the Virgin Islands 
of the United States shall be allowed a standard deduction of 
$229, $189, $269, and $118, respectively.
    (B) All households with earned income shall also be allowed 
an additional deduction of 20 percent of all earned income 
(other than that excluded by subsection (d) of this section and 
that earned under section 16(j)), to compensate for taxes, 
other mandatory deductions from salary, and work expenses, 
except that such additional deduction shall not be allowed with 
respect to earned income that a household willfully or 
fraudulently fails (as proven in a proceeding provided for in 
section 6(b)) to report in a timely manner.
    (2) Dependent Care Deduction.--The Secretary shall allow 
households, a deduction with respect to expenses other than 
expenses paid on behalf of the household by a third party or 
amounts made available and excluded for the expenses under 
subsection (d)(3), the maximum allowable level of which shall 
be $200 a month for each dependent child under 2 years of age 
and $175 a month for each other dependent, for the actual cost 
of payments necessary for the care of a dependent when such 
care enables a household member to accept or continue 
employment, or training or education which is preparatory for 
employment.
    (3) Excess Shelter Expense Deduction.--(A) The Secretary 
shall allow households, other than those households containing 
an elderly or disabled member, with respect to expenses other 
than expenses paid on behalf of the household by a third party, 
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) Such excess shelter expense deduction shall not exceed 
$231 a month in the 48 contiguous States and the District of 
Columbia, and shall not exceed, in Alaska, Hawaii, Guam, and 
the Virgin Islands of the United States, $402, $330, $280, and 
$171 a month, respectively.
    (C)(i) Notwithstanding section 2605(f) of the Low-Income 
Home Energy Assistance Act of 1981 (42 U.S.C. 8624(f)), a 
household may not claim as a shelter expense any payment 
received, or costs paid on its behalf, under the Low-Income 
Home Energy Assistance Act of 1981 (42 U.S.C. 8621 et seq.).
    (ii) Notwithstanding section 2605(f) of the Low-Income Home 
Energy Assistance Act of 1981 (42 U.S.C. 8624(f)), a State 
agency may use a standard utility allowance as provided under 
subparagraph (D) for heating and cooling expenses only if the 
household incurs out-of-pocket heating or cooling expenses in 
excess of any payment received, or costs paid on its behalf, 
under the Low-Income Home Energy Assistance Act of 1981 (42 
U.S.C. 8621 et seq.).
    (iii) For purposes of the food stamp program, assistance 
provided under the Low-Income Home Energy Assistance Act of 
1981 shall be considered to be prorated over the entire heating 
or cooling season for which it was provided.
    (iv) At the end of any certification period and up to one 
additional time during each twelve-month period, a State agency 
shall allow a household to switch between any standard utility 
allowance and a deduction based on its actual utility costs.
    (D) 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 which does not fluctuate 
within a year to reflect seasonal variations.
          (i) An allowance for a heating or cooling expense may 
        not be used for a household that does not incur a 
        heating or cooling expense, as the case may be, or does 
        incur a heating or cooling expense but is located in a 
        public housing unit which has central utility meters 
        and charges households, with regard to such expense, 
        only for excess utility costs.
          (ii) No such allowance may be used for a household 
        that shares such expense with, and lives with, another 
        individual not participating in the food stamp program, 
        another household participating in the food stamp 
        program, or both, under the allowance is prorated 
        between the household and the other individual, 
        household, or both.
    (4) Homeless Shelter Deduction.--
          (A) A State shall develop a standard homeless shelter 
        deduction, which shall not exceed $139 a month, for the 
        expenses that may reasonably be expected to be incurred 
        by households in which all members are homeless but are 
        not receiving free shelter throughout the month. 
        Subject to subparagraph (B), the State shall use such 
        deduction in determining the eligibility and allotments 
        for such households.
          (B) The Secretary may prohibit the use of the 
        standard homeless shelter deduction for households with 
        extremely low shelter costs.
    (5) Elderly and Disabled Households.--(A) The Secretary 
shall allow households containing an elderly or disabled 
member, with respect to expenses other than expenses paid on 
behalf of the household by a third party--
          (i) an excess medical expense deduction for that 
        portion of the actual cost of allowable medical 
        expenses, incurred by elderly or disabled members, 
        exclusive of special diets, that exceed $35 a month; 
        and
          (ii) 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) State agencies shall offer eligible households a method 
of claiming a deduction for recurring medical expenses that are 
initially verified under the excess medical expense deduction 
provided for in subparagraph (A), in lieu of submitting 
information or verification on actual expenses on a monthly 
basis. The method described in the preceding sentence shall be 
designed to minimize the administrative burden for eligible 
elderly and disabled household members choosing to deduct their 
recurrent medical expenses pursuant to such method, shall rely 
on reasonable estimates of the member's expected medical 
expenses for the certification period (including changes that 
can be reasonably anticipated based on available information 
about the member's medical condition, public or private medical 
insurance coverage, and the current verified medical expenses 
incurred by the member), and shall not require further 
reporting or verification of a change in medical expenses if 
such a change has been anticipated for the certification 
period.
    (6) Child Support Deduction.--Before determining the excess 
shelter expense deduction, the Secretary shall allow all 
households 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 such household member was legally obligated to 
make such payments, except that the Secretary is authorized to 
prescribe by regulation the methods, including calculation on a 
retrospective basis, that State agencies shall use to determine 
the amount of the deduction for child support payments.
          * * * * * * *

                             administration

    Sec. 11. (a) * * *
          * * * * * * *
    (e)(1) * * *
          * * * * * * *
    (3) that the State agency shall thereafter promptly 
determine the eligibility of each applicant household by way of 
verification of income other than that determined to be 
excluded by section 5(d) of this Act (in part through the use 
of the information, if any, obtained under section 16(e) of 
this Act), household size (in any case such size is 
questionable), and such other eligibility factors as the 
Secretary determines to be necessary to implement sections 5 
and 6 of this Act, although the State agency may verify prior 
to certification, whether questionable or not, the size of any 
applicant household and such other eligibility factors as the 
State agency determines are necessary, so as to complete 
certification of and provide an allotment retroactive to the 
period of application to any eligible household not later than 
thirty days following its filing of an application, and that 
the State agency shall--
          (A) provide each applicant household, at the time of 
        application, a clear written statement explaining what 
        acts the household must perform to cooperate in 
        obtaining verification and otherwise completing the 
        application process;
          (B) assist each applicant household in obtaining 
        appropriate verification and completing the application 
        process;
          (C) not require any household to submit additional 
        proof of a matter on which the State agency already has 
        current verification as determined under regulations 
        issued by the Secretary, unless the State agency has 
        reason to believe that the information possessed by the 
        agency is inaccurate, incomplete, or inconsistent;
          (D) subject to subparagraph (E), not deny any 
        application for participation under this program solely 
        because of the failure of a person outside the 
        household to cooperate (other than an individual 
        failing to cooperate who would otherwise be a household 
        member but for the operation of any of the individual 
        disqualification provisions of subsections (b), (d), 
        (e), (f), and (g) of section 6); and
          (E) process applications if a household complies with 
        the requirements of the first sentence of section 6(c), 
        by taking appropriate steps to verify information 
        otherwise required to be verified under this Act,
and that the State agency shall provide the household, at the 
time of each certification and recertification, with a 
statement describing the reporting responsibilities of the 
household under this Act, and provide a toll-free or local 
telephone number, or a telephone number at which collect calls 
will be accepted by the State agency, at which the household 
may reach an appropriate representative of the State agency. 
[Under rules prescribed by the Secretary, a State agency shall 
develop standard estimates of the shelter expenses that may 
reasonably be expected to be incurred by households in which 
all members are homeless but that are not receiving free 
shelter throughout the month. The Secretary may issue 
regulations to preclude the use of the estimates for households 
with extremely low shelter costs for whom the following 
sentence shall not apply. A State agency shall use the 
estimates in determining the allotments of the households, 
unless a household verifies higher expenses;]
          * * * * * * *
                          eligible households

    Sec. 5. (a) * * *
          * * * * * * *
    (g)(1) * * *
    (2) 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), and shall, in addition, 
include in financial resources any boats, snowmobiles, and 
airplanes used for recreational purposes, any vacation homes, 
any mobile homes used primarily for vacation purposes, any 
licensed vehicle (other than one used to produce earned income 
or that is necessary for transportation of a physically 
disabled household member and any other property, real or 
personal, to the extent that it is directly related to the 
maintenance or use of such vehicle) used for household 
transportation or used to obtain or continue employment to the 
extent that the fair market value of any such vehicle exceeds 
[a level set by the Secretary, which shall be $4,500 through 
August 31, 1994, $4,550 beginning September 1, 1994, through 
September 30, 1995, $4,600 beginning October 1, 1995, through 
September 30, 1996, and $5,000 beginning October 1, 1996, as 
adjusted on such date and on each October 1 thereafter to 
reflect changes in the new car component of the Consumer Price 
Index for All Urban Consumers published by the Bureau of Labor 
Statistics for the 12-month period ending on June 30 preceding 
the date of such adjustment and rounded to the nearest $50, 
and, regardless of whether there is a penalty for early 
withdrawal, any savings or retirement accounts (including 
individual accounts). The Secretary shall exclude from 
financial resources the value of a vehicle that a household 
depends upon to carry fuel for heating or water for home use 
when such transported fuel or water is the primary source of 
fuel or water for the household.] $4,550.
          * * * * * * *
    [(i)(1) For purposes of determining eligibility for and the 
amount of benefits under this Act for an individual who is an 
alien as described in section 6(f)(2)(B) of this Act, the 
income and resources of any person who as a sponsor of such 
individual's entry into the United States executed an affidavit 
of support or similar agreement with respect to such 
individual, and the income and resources of the sponsor's 
spouse if such spouse is living with the sponsor, shall be 
deemed to be the income and resources of such individual for a 
period of three years after the individual's entry into the 
United States. Any such income deemed to be income of such 
individual shall be treated as unearned income of such 
individual.
    [(2)(A) The amount of income of a sponsor, and the 
sponsor's spouse if living with the sponsor, which shall be 
deemed to be the unearned income of an alien for any year shall 
be determined as follows:
          [(i) the total yearly rate of earned and unearned 
        income of such sponsor, and such sponsor's spouse if 
        such spouse is living with the sponsor, shall be 
        determined for such year under rules prescribed by the 
        Secretary;
          [(ii) the amount determined under clause (i) of this 
        subparagraph shall be reduced by an amount equal to the 
        income eligibility standard as determined under section 
        5(c) of this Act for a household equal in size to the 
        sponsor, the sponsor's spouse if living with the 
        sponsor, and any persons dependent upon or receiving 
        support from the sponsor or the sponsor's spouse if the 
        spouse is living with the sponsor; and
          [(iii) the monthly income attributed to such alien 
        shall be one-twelfth of the amount calculated under 
        clause (ii) of this subparagraph.
    [(B) The amount of resources of a sponsor, and the 
sponsor's spouse if living with the sponsor, which shall be 
deemed to be the resources of an alien for any year shall be 
determined as follows:
          [(i) the total amount of the resources of such 
        sponsor and such sponsor's spouse if such spouse is 
        living with the sponsor shall be determined under rules 
        prescribed by the Secretary;
          [(ii) the amount determined under clause (i) of this 
        subparagraph shall be reduced by $1,500; and
          [(iii) the resources determined under clause (ii) of 
        this subparagraph shall be deemed to be resources of 
        such alien in addition to any resources of such alien.
    [(C)(i) Any individual who is an alien shall, during the 
period of three years after entry into the United States, in 
order to be an eligible individual or eligible spouse for 
purposes of this Act, be required to provide to the State 
agency such information and documentation with respect to the 
alien's sponsor and sponsor's spouse as may be necessary in 
order for the State agency to make any determination required 
under this section, and to obtain any cooperation from such 
sponsor necessary for any such determination. Such alien shall 
also be required to provide such information and documentation 
which such alien or the sponsor provided in support of such 
alien's immigration application as the State agency may 
request.
    [(ii) The Secretary shall enter into agreements with the 
Secretary of State and the Attorney General whereby any 
information available to such persons and required in order to 
make any determination under this section will be provided by 
such persons to the Secretary, and whereby such persons shall 
inform any sponsor of an alien, at the time such sponsor 
executes an affidavit of support or similar agreement, of the 
requirements imposed by the section.
    [(D) Any sponsor of an alien, and such alien, shall be 
jointly and severeably liable for an amount equal to any 
overpayment made to such alien during the period of three years 
after such alien's entry into the United States, on account of 
such sponsor's failure to provide correct information under the 
provisions of this section, except where such sponsor was 
without fault, or where good cause for such failure existed. 
Any such overpayment which is not repaid shall be recovered in 
accordance with the provisions of section 13(b)(2) of this Act.
    [(E) The provisions of this subsection shall not apply with 
respect to any alien who is a member of the sponsor's 
household, as defined in section 3(i) of this Act.]
    [(j)] (i) Notwithstanding subsections (a) through (i), a 
State agency shall consider a household member who receives 
supplemental security income benefits under title XVI of the 
Social Security Act (42 U.S.C. 1382 et seq.), aid to the aged, 
blind, or disabled under title I, II, X, XIV, or XVI of such 
Act (42 U.S.C. 301 et seq.), or who receives benefits under a 
State plan approved under part A of title IV of such Act (42 
U.S.C. 601 et seq.) to have satisfied the resource limitations 
prescribed under subsection (g).
    [(k)] (j)(1) For purposes of subsection (d)(1), except as 
provided in paragraph (2), assistance provided to a third party 
on behalf of a household by a State or local government shall 
be considered money payable directly to the household if the 
assistance is provided in lieu of--
          (A) a regular benefit payable to the household for 
        living expenses under a State plan for aid to families 
        with dependent children approved under part A of title 
        IV of the Social Security Act (42 U.S.C. 601 et seq.); 
        or
          (B) a benefit payable to the household for housing 
        expenses, not including energy or utility-cost 
        assistance, under--
                  (i) a State or local general assistance 
                program; or
                  (ii) another basic assistance program 
                comparable to general assistance (as determined 
                by the Secretary).
    (2) Paragraph (1) shall not apply to--
          (A) medical assistance;
          (B) child care assistance;
          (C) energy assistance;
          (D) assistance provided by a State or local housing 
        authority;
          (E) emergency assistance for migrant or seasonal 
        farm-worker households during the period such 
        households are in the job stream;
          (F) housing assistance payments made to a third party 
        on behalf of the household residing in transitional 
        housing for the homeless;
          (G) emergency and special assistance, to the extent 
        excluded in regulations prescribed by the Secretary; or
          (H) assistance provided to a third party on behalf of 
        a household under a State or local general assistance 
        program, or another local basic assistance program 
        comparable to general assistance (as determined by the 
        Secretary), if, under State law, no assistance under 
        the program may be provided directly to the household 
        in the form of a cash payment.
    (3) For purposes of subsection (d)(1), educational loans on 
which payment is deferred, grants scholarships, fellowships, 
veterans' educational benefits, and the like that are provided 
to a third party on behalf of a household for living expenses 
shall be treated as money payable directly to the household.
    [(l)] (k) Notwithstanding section 142(b) of the Job 
Training Partnership Act (29 U.S.C. 1552(b)), earnings to 
individuals participating in one-the-job training programs 
under section 204(b)(1)(C) or section 264(c)(1)(A) of the Job 
Training Partnership Act shall be considered earned income for 
purposes of the food stamp program, except for dependents less 
than 19 years of age.
    [(m)] (l) If a State agency excludes payments from income 
for purposes of the food stamp program under subsection 
(d)(13), such State agency shall pay to the Federal Government, 
in a manner prescribed by the Secretary, the cost of any 
additional benefits provided to households in such State that 
arise under such program as the result of such exclusion.

                     eligibility disqualifications

    Sec. 6(a) * * *
          * * * * * * *
    (f) No individual who is a member of a household otherwise 
eligible to participate in the food stamp program under this 
section shall be eligible to participate in the food stamp 
program as a member of that or any other household unless he or 
she is (1) a resident of the United States and (2) either (A) a 
citizen or (B) an alien lawfully admitted for permanent 
residence as an immigrant as defined by sections 101(a)(15) and 
101(a)(20) of the Immigration and Nationality Act (8 U.S.C. 
1101(a)(15) and 8 U.S.C. 1101(a)(20)), excluding, among others, 
alien visitors, tourists, diplomats, and students who enter the 
United States temporarily with no intention of abandoning their 
residence in a foreign country, and such alien has fulfilled 
the residence requirements and has an application pending for 
naturalization under the Immigration and Nationality Act, is a 
veteran (as defined in section 101 of title 38, United States 
Code) with a discharge characterized as an honorable discharge 
(or is the spouse or dependent child of such alien), is on 
active duty (other than active duty from training) in the Armed 
Forces of the United States (or is the spouse or dependent 
child of such alien), or is at least 75 years of age and has 
resided in the United States for at least 5 years; or (C) an 
alien who entered the United States prior to June 30, 1948, or 
such subsequent date as is enacted by law, has continuously 
maintained his or her residence in the United States since 
then, and is not ineligible for citizenship, but who is deemed 
to be lawfully admitted for permanent residence as a result of 
an exercise of discretion by the Attorney General pursuant to 
section 249 of the Immigration and Nationality Act (8 U.S.C. 
1259); or (D) an alien who has qualified for conditional entry 
pursuant to sections 207 and 208 of the Immigration and 
Nationality Act (8 U.S.C. 1157 and 1158), but such alien shall 
be eligible only for five years after such entry; or *(E) an 
alien who is lawfully present in the United States as a result 
of an exercise of discretion by the Attorney General for 
emergent reasons or reasons deemed strictly in the public 
interest pursuant to section 212(d)(5) of the Immigration and 
National Act (8 U.S.C. 1182(d)(5)); or (F) an alien within the 
United States as to whom the Attorney General has withheld 
deportation pursuant to section 243 of the Immigration and 
Nationality Act (8 U.S.C. 1253(h)). No aliens other than the 
ones specifically described in clauses (B) through (F) of this 
subsection shall be eligible to participate in the food stamp 
program as a member of any household. The income (less a pro 
rata share) and financial resources of the individual rendered 
ineligible to participate in the food stamp program under this 
subsection shall be considered in determining the eligibility 
and the value of the allotment of the household of which such 
individual is a member.

                     eligibility disqualifications

    Sec. 6(a) * * *
          * * * * * * *
    (d)(1) Unless otherwise exempted by the provisions of 
paragraph (d)(2) of this subsection, (A) no person shall be 
eligible to participate in the food stamp program who is a 
physically and mentally fit person between the ages of sixteen 
and sixty who (i) refused at the time of application and once 
every twelve months thereafter to register for employment in a 
manner determined by the Secretary; (ii) refuses without good 
cause to participate in [an employment and training program 
under paragraph (4), to the extent required under paragraph 
(4), including any reasonable employment requirements as are 
prescribed by the State agency in accordance with paragraph 
(4)], a State job search program and the period of 
ineligibility shall be two months; or (iii) refuses without 
good cause (including the lack of adequate child care for 
children above the age of five and under the age of twelve) to 
accept an offer of employment at a wage not less than the 
higher of either the applicable State or Federal minimum wage, 
or 80 per centum of the wage that would have governed had the 
minimum hourly rate under the Fair Labor Standards Act of 1938, 
as amended (29 U.S.C. 206(a)(1)), been applicable to the offer 
of employment, and at a site or plant not then subject to a 
strike or lockout; and (B) no household shall be eligible to 
participate in the food stamp program (i) if the head of the 
household is a physically and mentally fit person between the 
ages of sixteen and sixty and such individual refuses to do any 
of those acts described in clause (A) of this sentence, or (ii) 
if the head of the household voluntarily quits any job without 
good cause, but, in such case, the period of ineligibility 
shall be ninety days. The State agency shall allow the 
household to select an adult parent of children in the 
household as its head where all adult household members making 
application agree to the selection. The household may designate 
its head of household under this paragraph 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. An employee of the Federal 
Government, or of a State or political subdivision of a State, 
who engaged in a strike against the Federal Government, a State 
or political subdivision of a State and is dismissed from his 
job because of his participation in the strike shall be 
considered to have voluntarily quit such job without good 
cause. Any period of ineligibility for violations under this 
paragraph shall end when the household member who committed the 
violation complies with the requirement that has been violated. 
If the household member who committed the violation leaves the 
household during the period of ineligibility, such household 
shall no longer be subject to sanction for such violation and, 
if it is otherwise eligible, may resume participation in the 
food stamp program. but any other household of which such 
person thereafter becomes the head of the household shall be 
ineligible for the balance of the period of ineligibility.
    (2) A person who otherwise would be required to comply with 
the requirements of paragraph (1) of this subsection shall be 
exempt from such requirements if he or she is (A) currently 
subject to and complying with a work registration requirement 
under [title IV of the Social Security Act, as amended (42 
U.S.C. 602)] the program established by the State under the 
Temporary Assistance for Needy Families Block Grant, or the 
Federal-State unemployment compensation system, in which case, 
failure by such person to comply with any work requirement to 
which such person is subject [that is comparable to a 
requirement of paragraph (1)] shall be the same as failure to 
comply with that requirement of paragraph (1); (B) a parent or 
other member of a household with responsibility for the care of 
a dependent child under age six or of an incapacitated person; 
(C) a bona fide student enrolled at least half time in any 
recognized school, training program, or institution of higher 
education (except that any such person enrolled in an 
institution of higher education shall be ineligible to 
participate in the food stamp program unless he or she meets 
the requirements of subsection (e) of this section); (D) a 
regular participant in a drug addiction or alcoholic treatment 
and rehabilitation program; (E) employed a minimum of thirty 
hours per week or receiving weekly earnings which equal the 
minimum hourly rate under the Fair Labor Standards Act of 1938, 
as amended (29 U.S.C. 206(a)(1)), multiplied by thirty hours; 
or (F) a person between the ages of sixteen and eighteen who is 
not a head of a household or who is attending school, or 
enrolled in an employment training program, on at least a half-
time basis.
          * * * * * * *
    [(4) (A) Not later than April 1, 1987, each State agency 
shall implement an employment and training program designed by 
the State agency and approved by the Secretary for the purpose 
of assisting members of households participating in the food 
stamp program in gaining skills, training, or experience that 
will increase their ability to obtain regular employment.
    [(B) For purposes of this Act, an ``employment and training 
program'' means a program that contains one or more of the 
following components:
          [(i) Job search programs with terms and conditions 
        comparable to those prescribed in subparagraphs (A) and 
        (B) of section 402(a)(35) of part A of title IV of the 
        Social Security Act, except that the State agency shall 
        retain the option to apply employment requirements 
        prescribed under this clause to program applicants at 
        the time of application.
          [(ii) Job search training programs that include, to 
        the extent determined appropriate by the State agency, 
        reasonable job search training and support activities 
        that may consist of jobs skills assessments, job 
        finding clubs, training in techniques for 
        employability, job placement services, or other direct 
        training or support activities, including educational 
        programs, determined by the State agency to expand the 
        job search abilities or employability of those subject 
        to the program.
          [(iii) Workfare programs operated under section 20.
          [(iv) Programs designed to improve the employability 
        of household members through actual work experience or 
        training, or both, and to enable individuals employed 
        or trained under such programs to move promptly into 
        regular public or private employment. An employment or 
        training experience program established under this 
        clause shall--
                  [(I) limit employment experience assignments 
                to projects that serve a useful public purpose 
                in fields such as health, social services, 
                environmental protection, urban and rural 
                development and redevelopment, welfare, 
                recreation, public facilities, public safety, 
                and day care;
                  [(II) to the extent possible, use the prior 
                training, experience, and skills of the 
                participating member in making appropriate 
                employment or training experience assignments;
                  [(III) not provide any work that has the 
                effect of replacing the employment of an 
                individual not participating in the employment 
                or training experience program; and
                  [(IV) provide the same benefits and working 
                conditions that are provided at the job site to 
                employees performing comparable work for 
                comparable hours.
          [(v) Educational programs or activities to improve 
        basic skills and literacy, or otherwise improve 
        employability, including educational programs 
        determined by the State agency to expand the job search 
        abilities or employability of those subject to the 
        program under this paragraph.
          [(vi) Programs designed to increase the self-
        sufficiency of recipients through self-employment, 
        including programs that provide instruction for self-
        employment ventures.
          [(vii) As approved by the Secretary or the State 
        under regulations issued by the Secretary, other 
        employment, educational and training programs, 
        projects, and experiments, such as a supported work 
        program, aimed at accomplishing the purpose of the 
        employment and training program.
      [(C) The State agency may provide that participation in 
an employment and training program may supplement or supplant 
other employment-related requirements imposed on those subject 
to the program.
      [(D)(i) Each State agency may exempt from any requirement 
for participation in any program under this paragraph 
categories of household members to which the application of 
such participation requirement is impracticable as applied to 
such categories due to factors such as the availability of work 
opportunities and the cost-effectiveness of the employment 
requirements. In making such a determination, the State agency 
may designate a category consisting of all such household 
members residing in a specific area of the State. Each State 
may exempt, with the approval of the Secretary, members of 
households that have participated in the food stamp program 30 
days or less.
      [(ii) Each State agency may exempt from any requirement 
for participation individual household members not included in 
any category designated as exempt under clause (i) but with 
respect to whom such participation is impracticable because of 
personal circumstances such as lack of job readiness and 
employability, the remote location of work opportunities, and 
unavailability of child care.
      [(iii) Any exemption of a category or individual under 
this subparagraph shall be periodically evaluated to determine 
whether, on the basis of the factors used to make a 
determination under clause (i) or (ii), the exemption continues 
to be valid. Such evaluations shall occur no less often than at 
each certification or recertification in the case of exemptions 
under clause (ii).
    [(E) Each State agency shall establish requirements for 
participation by individuals not exempt under subparagraph (D) 
in one or more employment and training programs under this 
paragraph, including the extent to which any individual is 
required to participate. Such requirements may vary among 
participants. Through September 30, 1995, two States may, on 
application to and after approval by the Secretary, give 
priority in the provision of services to voluntary participants 
(including both exempt and non-exempt participants), except 
that this sentence shall not excuse a State from compliance 
with the performance standards issued under subparagraphs (K) 
and (L), and the Secretary may, at the Secretary's discretion, 
approve additional States' requests to give such priority if 
the Secretary reports to Congress on the number and 
characteristics of voluntary participants given priority under 
this sentence and such other information as the Secretary 
determines to be appropriate.
    [(F)(i) The total hours of work in an employment and 
training program carried out under this paragraph required of 
members of a household, together with the hours of work of such 
members in any program carried out under section 20, in any 
month collectively may not exceed a number of hours equal to 
the households's allotment for such month divided by the higher 
of the applicable State minimum wage or Federal minimum hourly 
rate under the Fair Labor Standards Act of 1938.
    [(ii) The total hours of participation in such program 
required of any member of a household, individually, in any 
month, together with any hours worked in another program 
carried out under section 20 and any hours worked for 
compensation (in cash or in kind) in any other capacity, shall 
not exceed one hundred and twenty hours per month.
    [(G)(i) The State agency may operate any program component 
under this paragraph in which individuals elect to participate.
    [(ii) The State agency shall permit, to the extent it 
determines practicable, individuals not subject to requirements 
imposed under subparagraph (E) or who have complied, or are in 
the process of complying, with such requirements to participate 
in any program under this paragraph.
    [(H)(i) The Secretary shall issue regulations under which 
each State agency shall establish a conciliation procedure for 
the resolution of disputes involving the participation of an 
individual in the program.
    [(ii) Federal funds made available to a State agency for 
purposes of the component authorized under subparagraph (B)(v) 
shall not be used to supplant non-Federal funds used for 
existing services and activities that promote the purposes of 
this component.
    [(I)(i) The State agency shall provide payments or 
reimbursements to participants in programs carried out under 
this paragraph, including individuals participating under 
subparagraph (G), for--
          [(I) the actual costs of transportation and other 
        actual costs (other than dependent care costs), are 
        reasonably necessary and directly related to 
        participation in the program, except that the State 
        agency may limit such reimbursement to each participant 
        to $25 per month; and
          [(II) the actual costs of such dependent care 
        expenses that are determined by the State agency to be 
        necessary for the participation of an individual in the 
        program (other than an individual who is the caretaker 
        relative of a dependent in a family receiving benefits 
        under part A of title IV of the Social Security Act (42 
        U.S.C. 601 et seq.) in a local area where an 
        employment, training, or education program under title 
        IV of such Act is in operation, or was in operation, on 
        the date of enactment of the Hunger Prevention Act of 
        1988) up to any limit set by the State agency (which 
        limit shall not be less than the limit for the 
        dependent care deduction under section 5(e)), but in no 
        event shall such payment or reimbursements exceed the 
        applicable local market rate as determined by 
        procedures consistent with any such determination under 
        the Social Security Act. Individuals subject to the 
        program under this paragraph may not be required to 
        participate if dependent costs exceed the limit 
        established by the State agency under this subclause or 
        other actual costs exceed any limit established under 
        subclause (I).
    [(ii) In lieu of providing reimbursements or payments for 
dependent care expenses under clause (i), a State Agency may, 
at its option, arrange for dependent care through providers by 
the use of purchase of service contracts or vouchers or by 
providing vouchers to the household.
    [(iii) The value of any dependent care services provided 
for or arranged under clause (ii), or any amount received as a 
payment or reimbursement under clause (i), shall--
          [(I) not be treated as income for the purposes of any 
        other Federal or federally assisted program that bases 
        eligibility for, or the amount of benefits on, need; 
        and
          [(II) not be claimed as an employment-related expense 
        for the purposes of the credit provided under section 
        21 of the Internal Revenue Code of 1986.
    [(J) The Secretary shall promulgate guidelines that (i) 
enable State agencies, to the maximum extent practicable, to 
design and operate an employment and training program that is 
compatible and consistent with similar programs operated within 
the State, and (ii) ensure, to the maximum extent practicable, 
that employment and training programs are provided for Indians 
on reservations.
    [(K)(i) For any fiscal year, the Secretary shall establish 
performance standards for each State that, in the case of 
persons who are subject to employment requirements under this 
section and who are not exempt under subparagraph (D), 
designate the minimum percentages (not to exceed 10 percent in 
fiscal years 1992 and 1993, and 15 percent in fiscal years 1994 
and 1995) of such persons that State agencies shall place in 
programs under this paragraph. Such standards need not be 
uniform for all the States, but may vary among the several 
States. The Secretary shall consider the cost to the States in 
setting performance standards and the degree of participation 
in programs under this paragraph by exempt persons. The 
Secretary shall not require the plan of a State agency to 
provide for the participation of a number of recipients greater 
than 10 percent in fiscal years 1992 and 1993, and 15 percent 
in fiscal years 1994 and 1995, of the persons who are subject 
to employment requirements under this section and who are not 
exempt under subparagraph (D).
    [(ii) In making any determinations as to whether a State 
agency has met a performance standard under clause (i), the 
Secretary shall--
          [(I) consider the extent to which persons have 
        elected to participate in programs under this 
        paragraph;
          [(II) consider such factors as placement in 
        unsubsidized employment, increases in earnings, and 
        reduction in the number of persons participating in the 
        food stamp program; and
          [(III) consider other factors determined by the 
        Secretary to be related to employment and training.
    [(iii) The Secretary shall vary the performance standards 
established under clause (i) according to differences in the 
characteristics of persons required to participate and the type 
of program to which the standard is applied.
    [(iv) The Secretary may delay establishing performance 
standards for up to 18 months after national implementation of 
the provisions of this paragraph, in order to base performance 
standards on State agency experience in implementing this 
paragraph.
    [(L)(i) The Secretary shall establish performance standards 
and measures applicable to employment and training programs 
carried out under this paragraph that are based on employment 
outcomes, including increases in earnings.
    [(ii) Final performance standards and measures referred to 
in clause (i) shall be published not later than 12 months after 
the date that the final outcome-based performance standards are 
published for job opportunities and basic skills training 
programs under part F of title IV of the Social Security Act 
(42 U.S.C. 681 et seq.).
    [(iii) The standards shall encourage States to serve those 
individuals who have greater barriers to employment and shall 
take into account the extent to which persons have elected to 
participate in employment and training programs under this 
paragraph. The standards shall require participants to make 
levels of efforts comparable to those required under the 
regulations set forth in section 273.7(f)(1) of title 7, Code 
of Federal Regulations in effect on January 1, 1991.
    [(iv) The performance standards in effect under 
subparagraph (K) shall remain in effect during the period 
beginning on October 1, 1988, and ending on the date the 
Secretary implements the outcome-based performance standards 
described in this subparagraph.
    [(v) A State agency shall be considered in compliance with 
applicable performance standards under subparagraph (K) if the 
State agency operates an employment and training program in a 
manner consistent with its approved plan and if the program 
requires participants to make levels of effort comparable to 
those required under the regulations set forth in section 
273.7(f)(1) of title 7, Code of Federal Regulations in effect 
on January 1, 1991.
    [(M)(i) The Secretary shall ensure that State agencies 
comply with the requirements of this paragraph and section 
11(e)(22).
    [(ii) If the Secretary determines that a State agency has 
failed, without goal cause, to comply with such a requirement, 
including any failure to meet a performance standard under 
subparagraph (J), the Secretary may withhold from such State, 
in accordance with section 16(a), (c), and (h), such funds as 
the Secretary determines to be appropriate, subject to 
administrative and judicial review under section 14.
    [(N) The facilities of the State public employment offices 
and agencies operating programs under the Job Training 
Partnership Act may be used to find employment and training 
opportunities for household members under the programs under 
this paragraph.]
    (4)(A) Except as provided in subparagraphs (B), (C), and 
(D), an individual shall not be denied initial eligibility but 
shall be disqualified from the food stamp program if after 90 
days from the certification of eligibility of such individual 
the individual was not employed a minimum of 20 hours per week, 
or does not participate in a program established under section 
20 or a comparable program established by the State or local 
government.
    (B) Subparagraph (A) shall not apply in the case of an 
individual who--
          (i) is under eighteen or over fifty years of age;
          (ii) is certified by a physician as physically or 
        mentally unfit for employment;
          (iii) is a parent or other member of a household with 
        responsibility for the care of a dependent;
          (iv) is participating a minimum of 20 hours per week 
        and is in compliance with the requirement of--
                  (I) a program under the Job Training 
                Partnership Act (29 U.S.C. 1501 et seq.);
                  (II) a program under section 236 of the Trade 
                Act of 1974 (19 U.S.C. 2296); or
                  (III) a program of employment or training 
                operated or supervised by an agency of State or 
                local government which meets standards deemed 
                appropriate by the Governor; or
          (v) would otherwise be exempt under subsection 
        (d)(2).
    (C) Upon request of the State, the Secretary may waive the 
requirements of subparagraph (A) in the case of some or all 
individuals within all or part of the State if the Secretary 
makes a determination that such area--
          (i) has an unemployment rate of over 10 percent; or
          (ii) does not have a sufficient number of jobs to 
        provide employment for individuals subject to this 
        paragraph. The Secretary shall report to the Committee 
        on Agriculture of the House of Representatives and the 
        Committee on Agriculture, Nutrition, and Forestry of 
        the Senate on the basis on which the Secretary made 
        such a decision.
    (D) An individual who has been disqualified from the food 
stamp program under subparagraph (A) may reestablish 
eligibility for assistance if such person becomes exempt under 
subparagraph (B) or by--
          (i) becoming employed for a minimum of 20 hours per 
        week during any consecutive thirty-day period; or
          (ii) participating in a program established under 
        section 20 or a comparable program established by the 
        State or local government.
          * * * * * * *


            administrative cost-sharing and quality control


    Sec. 16. (a) * * *
          * * * * * * *
    [(h)(1)(A) The Secretary shall allocate among the State 
agencies in each fiscal year, from funds appropriated for the 
fiscal year under section 18(a)(1), the amount of $75,000,000 
for each of the fiscal years 1991 through 1995 to carry out the 
employment and training program under section 6(d)(4), except 
as provided in paragraph (3), during the fiscal year.
    [(B) In making the allocation required by subparagraph (A) 
for each of the fiscal years 1992 through 1995, the Secretary 
shall allocate $15,000,000 among the States based on State 
agency performance under section 6(d)(4), as determined by the 
Secretary.
    [(C) In making the allocation required by subparagraph (A) 
for fiscal year 1992, the Secretary shall allocate 
nonperformance funding of $60,000,000 among the States in a 
manner such that each State is allocated funds equal to--
          [(i) a funding level determined under the 
        nonperformance funding allocation formula used for 
        fiscal year 1991;
          [(ii) increased by one half of the difference between 
        such funding level and an amount, if larger, based on 
        the State's proportion of the number of individuals 
        registered for work under section 6(d)(4); or
          [(iii) decreased by one half of the difference 
        between such funding level and such amount, if such 
        amount is smaller.
    [(D) In making the allocation required by subparagraph (A) 
for each of the fiscal years 1993 through 1995, the Secretary 
shall allocate nonperformance funding of $60,000,000 among the 
States based on each State's proportion of the number of 
individuals registered for work under section 6(d)(4).
    [(E) Notwithstanding subparagraphs (C) and (D), the 
Secretary shall--
          [(i) for fiscal year 1992, ensure that each State is 
        allocated at least $50,000 by reducing, to the extent 
        necessary, the funds allocated to States (other than 
        States allocated less than $50,000) whose funding level 
        has been increased under subparagraph (C); and
          [(ii) for each of the fiscal years 1993 through 1995, 
        ensure that each State is allocated at least $50,000 by 
        reducing, to the extent necessary, the funds allocated 
        to those States allocated more than $50,000.
    [(F) Each such State's share of such reduction under 
subparagraph (E) shall represent its proportion of individuals 
registered for work under section 6(d)(4) in all States subject 
to the reduction.
    [(2) If, in carrying out such program during such fiscal 
year, a State agency incurs costs that exceed the amount 
allocated to the State agency under paragraph (1), the 
Secretary shall pay such State agency an amount equal to 50 per 
centum of such additional costs, subject to the first 
limitation in paragraph (3).
    [(3) The Secretary shall also reimburse each State agency 
in an amount equal to 50 per centum of the total amount of 
payments made or costs incurred by the State agency in 
connection with transportation costs and other expenses 
reasonably necessary and directly related to participation in 
an employment and training program under section 6(d)(4), 
except that such total amount shall not exceed an amount 
representing $25 per participant per month for costs of 
transportation and other actual costs (other than dependent 
care costs) and an amount equal to the payment made under 
section 6(d)(4)(I)(i)(II) but not more than the applicable 
local market rate, and such reimbursement shall not be made out 
of funds allocated under paragraph (1).
    [(4) Funds provided to a State agency under this subsection 
may be used only for operating an employment and training 
program under section 6(d)(4), and may not be used for carrying 
out other provisions of this Act.
    [(5)(A) The Secretary shall monitor the employment and 
training programs carried out by State agencies under section 
6(d)(4) to measure their effectiveness in terms of the increase 
in the numbers of household members who obtain employment and 
the numbers of such members who retain such employment as a 
result of their participation in such employment and training 
programs.
    [(B) The Secretary shall, not later than January 1, 1989, 
report to the Committee on Agriculture of the House of 
Representatives and the Committee on Agriculture, Nutrition, 
and Forestry of the Senate on the effectiveness of such 
employment and training programs.
    [(6) The Secretary shall develop, and transmit to the 
Committee on Agriculture of the House of Representatives and 
the Committee on Agriculture, Nutrition, and Forestry of the 
Senate, a proposal for modifying the rate of Federal payments 
under this subsection so as to reflect the relative 
effectiveness of the various States in carrying out employment 
and training programs under section 6(d)(4).]
    [(i)](h)(1) The Department of Agriculture may use quality 
control information made available under this section to 
determine which project areas have payment error rates (as 
defined in subsection (d)(1)) that impair the integrity of the 
food stamp program.
    (2) The Secretary may require a State agency to carry out 
new or modified procedures for the certification of households 
in areas identified under paragraph (1) if the Secretary 
determines such procedures would improve the integrity of the 
food stamp program and be cost effective.
    (3) Not later than 12 months after the date of enactment of 
the Food Security Act of 1985, and each 12 months thereafter, 
the Secretary shall submit to the Committee on Agriculture of 
the House of Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate a report that lists 
project areas identified under paragraph (1) and describes any 
procedures required to be carried out under paragraph (2).
    [(j)] (i) Not later than 180 days after the date of the 
enactment of the Hunger Prevention Act of 1988 [enacted on 
September 19, 1988], and annually thereafter, the Secretary 
shall publish instructional materials specifically designed to 
be used by the State agency to provide intensive training to 
State agency personnel who undertake the certification of 
households that include a member who engages in farming.
    (j) Work Supplementation or Support Program.--(1) A State 
may elect to use the sums equal to the food stamp benefits that 
would otherwise be allowed to participants under the food stamp 
program but for the operation of this subsection for the 
purposes of providing and subsidizing or supporting jobs under 
a work supplementation or support program established by the 
State.
    (2) If a State that makes the election described in 
paragraph (1) identifies each household that participates in 
the food stamp program which contains an individual who is 
participating in such work supplementation or support program--
          (A) the Secretary shall pay to the State 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 shall expend such amount in accordance 
        with its work supplementation or support program in 
        lieu of 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 as 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 
        program.
    (3) No person shall be excused by reason of the fact that 
such State has a work supplementation or support program from 
any work requirement under section 6(d), except during the 
periods in which such individual is employed under such work 
supplementation or support program.
    (4) For purposes of this subsection, the term ``work 
supplementation or support program'' shall mean a program in 
which, as determined by the Secretary, public assistance, 
including any benefits provided under a program established by 
the State and the food stamp program, is provided to an 
employer to be used for hiring a public assistance recipient.

                RESEARCH, DEMONSTRATION, AND EVALUATIONS

    Sec. 17. (a) * * *
          * * * * * * *
    [(d)(1) As used in this subsection, the term 
``qualification period'' means a period of time immediately 
preceding--
          [(A) in the case of a new applicant for benefits 
        under this Act, the date on which application for such 
        benefits is made by the individual; or
          [(B) in the case of an otherwise continuing recipient 
        of coupons under this Act, the date on which such 
        coupons would otherwise be issued to the individual.
    [(2) Upon application of a State or political subdivision 
thereof, the Secretary may conduct one pilot project involving 
the employment requirements described in this subsection in 
each of four project areas selected by the Secretary.
    [(3) Under the pilot projects conducted pursuant to this 
subsection, except as provided in paragraphs (4), (5), and (6), 
an individual who resides in a project area shall not be 
eligible for assistance under this Act if the individual was 
not employed a minimum of twenty hours per week, or did not 
participate in a workfare program established under section 20, 
during a qualification period of--
          [(A) thirty or more consecutive days, in the case of 
        an individual whose benefits under a State or Federal 
        unemployment compensation law were terminated 
        immediately before such qualification period began; or
          [(B) sixty or more consecutive days, in the case of 
        an individual not described in clause (A).
    [(4) The provisions of paragraph (3) shall not apply in the 
case of an individual who--
          [(A) is under eighteen or over fifty-nine years of 
        age;
          [(B) is certified by a physician as physically or 
        mentally unfit for employment;
          [(C) is a parent or other member of a household with 
        responsibility for the care of a dependent child under 
        six years of age or of an incapacitated person;
          [(D) is a parent or other caretaker of a child under 
        six years of age in a household in which there is 
        another parent who, unless covered by clause (A) or 
        (B), or both such clauses, is employed a minimum of 
        twenty hours per week or participating in a workfare 
        program established under section 20;
          [(E) is in compliance with section 6(d) and 
        demonstrates, in a manner prescribed by the Secretary, 
        that the individual is able and willing to accept 
        employment but is unable to obtain such employment; or
          [(F) is a member of any other group described by the 
        Secretary.
    [(5) The Secretary may waive the requirements of paragraph 
(3) in the case of all individuals within all or part of a 
project area if the Secretary finds that such area--
          [(A) has an unemployment rate of over 10 per centum; 
        or
          [(B) does not have a sufficient number of jobs to 
        provide employment for individuals subject to this 
        subsection.
    [(6) An individual who has become ineligible for assistance 
under this Act by reason of paragraph (3) may reestablish 
eligibility for assistance after a period of ineligibility by--
          [(1) becoming employed for a minimum of twenty hours 
        per week during any consecutive thirty-day period; or
          [(2) participating in a workfare program established 
        under section 20 during any consecutive thirty-day 
        period.]
    [(e)] (d) The Secretary shall conduct a study of the 
effects of reductions made in benefits provided under this Act 
pursuant to part 1 of subtitle A of title I of the Omnibus 
Budget Reconciliation Act of 1981, the Food Stamp and Commodity 
Distribution Amendments of 1981, the Food Stamp Act Amendments 
of 1982, and any other laws enacted by the Ninety-seventh 
Congress which affect the food stamp program. The study shall 
include a study of the effect of retrospective accounting and 
periodic reporting procedures established under such Acts, 
including the impact on benefit and administrative costs and on 
error rates and the degree to which eligible households are 
denied food stamp benefits for failure to file complete 
periodic reports. The Secretary shall submit to the Committee 
on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate 
an interim report on the results of such study no later than 
February 1, 1984, and a final report on the results of such 
study no later than March 1, 1985.
    [(f)] (e) In order to encourage States to plan, design, 
develop, and implement a system for making food stamp benefits 
available through the use of intelligent benefit cards or other 
automated or electronic benefit delivery systems, the Secretary 
may conduct one or more pilot or experimental projects, subject 
to the restrictions imposed by subsection (b)(1) and section 
7(g)(2), designed to test whether the use of such cards or 
systems can enhance the efficiency and effectiveness of program 
operations while ensuring that individuals receive correct 
benefit amounts on a timely basis. Intelligent benefit cards 
developed under such a demonstration project shall contain 
information, encoded on a computer chip embedded in a credit 
card medium, including the eligibility of the individual and 
the amount of benefits to which such individual is entitled. 
Any other automated or electronic benefit delivery system 
developed under such a demonstration project shall be able to 
use a plastic card to access such information from a data file.
    [(g)] (f) In order to assess the effectiveness of the 
employment and training programs established under section 6(d) 
in placing individuals into the work force and withdrawing such 
individuals from the food stamp program, the Secretary is 
authorized to carry out studies comparing the pre- and post-
program labor force participation, wage rates, family income, 
level of receipt of food stamp and other transfer payments, and 
other relevant information, for samples of participants in such 
employment and training programs as compared to the appropriate 
control or comparison groups that did not participate in such 
programs. Such studies shall, to the maximum extent possible--
          (1) collect such data for up to 3 years after the 
        individual has completed the employment and training 
        program; and
          (2) yield results that can be generalized to the 
        national program as a whole.
The results of such studies and reports shall be considered in 
developing or updating the performance standards required under 
section 6.
    [(h)] (g) The Secretary shall conduct a sufficient number 
of demonstration projects to evaluate the effects, in both 
rural and urban areas, of including in financial resources 
under section 5(g) the fair market value of licensed vehicles 
to the extent the value of each vehicle exceeds $4,500, but 
excluding the value of--
          (1) any licensed vehicle that is used to produce 
        earned income, necessary for transportation of an 
        elderly or physically disabled household member, or 
        used as the household's home; and
          (2) one licensed vehicle used to obtain, continue, or 
        seek employment (including travel to and from work), 
        used to pursue employment-related education or 
        training, or used to secure food or the benefits of the 
        food stamp program.
    [(i)(1)] (h) The Secretary may conduct four demonstration 
projects, in both urban and rural areas, under which households 
in which each member receives benefits under a State plan 
approved under part A of title IV of the Social Security Act 
(42 U.S.C. 601 et seq.) (hereafter in this subsection referred 
to as an ``eligible household'') shall be issued monthly 
allotments following the rules and procedures of programs under 
part A of title IV of the Social Security Act, and without 
regard to the eligibility, benefit, and administrative rules 
established under this Act other than those terms and 
conditions specified under this subsection or established by 
the Secretary to ensure program integrity.
    (2) In carrying out the demonstration projects, the 
Secretary shall ensure the following:
          (A) The third sentence of section 3(i), subsections 
        (b) and (d)(2) of section 6, the first sentence of 
        section 6(c), paragraphs (1)(B), (3), (4), and (9) of 
        section 11(e), and all applicable provisions of this 
        Act dealing with the treatment of homeless individuals 
        and migrant and seasonal farm worker households shall 
        apply.
          (B) Assistance under the food stamp program shall be 
        furnished to all eligible households who make 
        application for assistance by providing any information 
        that is needed by the State agency to determine the 
        correct monthly allotment and that has not been 
        provided as part of the household's application for 
        assistance under part A of title IV of the Social 
        Security Act.
          (C) Eligible households' monthly allotments shall be 
        calculated under section 8(a), except that a 
        household's income shall be determined in accordance 
        with subparagraphs (D) and (E). The allotments shall be 
        provided retroactive to the date of application.
          (D) For purposes of determining monthly allotments 
        under this subsection, household income shall be the 
        benefit provided under part A of title IV of the Social 
        Security Act and the amount used to determine the 
        household's benefit under such part (not including any 
        amount disregarded for dependent care expenses), except 
        that the amount shall be calculated without regard to 
        section 402(a)(7)(C) of such Act (42 U.S.C. 
        602(a)(7)(C)) and shall not include nonrecurring lump-
        sum income and income deemed or allocated to the 
        household under such part.
          (E) In computing household income for purposes of 
        determining monthly allotments, all eligible households 
        shall be allowed to standard, earned income, excess 
        shelter, and medical expense deductions provided under 
        section 5(e) in lieu of any earned income disregards 
        provided under section 402(a)(8) of the Social Security 
        Act (42 U.S.C. 602(a)(8)). Alternatively, the Secretary 
        may approve demonstration projects under which 
        households without earned income are allowed such 
        standard, excess shelter, and medical expense 
        deductions, and household income for households with 
        earned income is computed using such deductions and the 
        earned income disregards provided under section 
        402(a)(8) of the Social Security Act to the extent that 
        the Secretary determines they are consistent with the 
        purposes of the demonstration projects required under 
        this subsection.
          (F) Uninterrupted food stamp assistance shall be 
        provided to households who become ineligible to receive 
        the assistance under this subsection but are determined 
        otherwise eligible for food stamp assistance and to 
        households receiving food stamp assistance other than 
        under this subsection who are determined eligible under 
        this subsection.
          (G) Any other requirements and administrative 
        procedures equivalent to those applicable under part A 
        of title IV of the Social Security Act (42 U.S.C. 601 
        et seq.) may be used in implementing the demonstration 
        projects required under this subsection, if the 
        Secretary determines that the requirements or 
        procedures further the purposes of this subsection and 
        do not undermine program integrity.
    (3) In establishing the projects, the Secretary shall 
solicit proposals from, and consult with, interested State and 
local agencies and shall consult with the Secretary of Health 
and Human Services on waivers of Federal rules under part A of 
title IV of the Social Security Act that would assist in 
carrying out the projects required under this subsection.
    (4) Not later than six months after termination of any 
project, the Secretary shall submit a report to the Committee 
on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate 
evaluating the results of the demonstration projects 
established under this subsection, including evaluations of the 
effects on recipients and administrators.
    [(j)](i)(1)(A) Subject to the availability of funds 
specifically appropriated to carry out this subsection and 
subject to the other provisions of this subsection, during each 
of fiscal years 1992 through 1995, the Secretary shall make 
grants competitively awarded to public or private nonprofit 
organizations to fund food stamp outreach demonstration 
projects (hereinafter in this subsection referred to as the 
``projects'') and related evaluations in areas of the United 
States to increase participation by eligible low-income 
households in the food stamp program. The total amount of 
grants provided during a fiscal year may not exceed $5,000,000. 
Funds appropriated to carry out this subsection shall be used 
in the year during which the funds are appropriated. Not more 
than 20 percent of the funds appropriated to carry out this 
subsection shall be used for evaluations.
    (B) The Secretary shall make a grant under this paragraph 
only to an entity that demonstrates to the Secretary that the 
entity is able to conduct the outreach functions described in 
this subsection.
    (2) Outreach projects under this subsection shall be 
targeted toward members of rural, elderly, and homeless 
populations, low-income working families with children, and 
non-English speaking minorities (hereinafter in this subsection 
collectively referred to as ``target populations'').
    (3)(A) The Secretary shall appoint an advisory panel 
(hereinafter in this subsection referred to as the ``panel'') 
composed of representatives of the target populations as well 
as individuals with expertise in the area of program 
evaluation. The panel shall not be subject to the Federal 
Advisory Committee Act (5 U.S.C. App. 2).
    (B) The Secretary shall select recipients for grants, 
taking into consideration any recommendations from the panel 
concerning criteria that should be used in selecting 
recipients, to carry out projects under this subsection based 
on the appropriateness of the methods proposed for the projects 
to reach target populations. Appropriate methods shall 
include--
          (i) the production of electronic media campaigns 
        (with the total amount allocated for the campaigns in 
        the aggregate not to exceed 15 percent of the total 
        amount of funds specified in paragraph (1)(A));
          (ii) utilization of local outreach workers and 
        volunteers;
          (iii) development of solutions to transportation and 
        access problems;
          (iv) in-service training for those capable of 
        referring households to the program;
          (v) community presentations and education;
          (vi) pre-screening assistance for program 
        eligibility;
          (vii) individualized client assistance;
          (viii) consultation and referral for benefit appeals; 
        and
          (ix) recruitment of authorized representatives for 
        applicants unable to appear for certification or at 
        authorized food stores.
    (C) In selecting grant recipients, the Secretary shall take 
into consideration the ability of the applicants to produce 
useful data for evaluation purposes.
    (D) In selecting grant recipients from among applicant 
public agencies, preference shall be given to those applicants 
that propose to involve nonprofit organizations in projects to 
be carried out with the grants.
    (E) The Secretary shall provide at least one grant equal to 
50 percent of the cost of the development of outreach materials 
aimed at the general food stamp eligible population as well as 
the specific target populations, including written materials 
and public service announcements, so that the materials may be 
used or adopted by other grant recipients, as appropriate. To 
be eligible to receive any such grant, a recipient shall 
provide matching funds equal to 50 percent of the cost of the 
development of materials described in the preceding sentence. 
In carrying out this subparagraph, the Secretary shall give 
preference to applicants that demonstrate the ability to 
disseminate the materials through other public and private 
nonprofit organizations. Not to exceed $500,000 of the funds 
provided under this subsection for any fiscal year shall be 
used for the grant.
    (4)(A) The Secretary shall evaluate a sufficient number of 
projects to be able to determine the effectiveness of the 
projects and the techniques employed by the projects with 
respect to--
          (i) success in reducing barriers to participation;
          (ii) increasing overall program participation 
        including participation among target populations;
          (iii) administrative effectiveness;
          (iv) program efficiency; and
          (v) adequacy of administrative resources levels to 
        conduct the activities effectively.
    (B) The Secretary shall provide an interim report on the 
results of the evaluation carried out under subparagraph (A) 
not later than 1 year after a sufficient number of projects 
have begun and a final report not later than 3 years after a 
sufficient number of projects have begun to the Committee on 
Agriculture of the House of Representatives and the Committee 
on Agriculture, Nutrition, and Forestry of the Senate.
    (C) The Secretary shall also examine and report on previous 
research regarding reasons for nonparticipation and effective 
methods to conduct outreach and to reduce barriers to 
participation.
    (5) The Secretary shall--
          (A) within 180 days after funds are appropriated, 
        publish such notice as may be necessary to implement 
        this subsection;
          (B) accept proposals from organizations for projects 
        under this subsection for 90 days following the date 
        the notice is published; and
          (C) begin to award grants under this subsection 
        beginning no later than 180 days following the date the 
        notice is published.
    [(k)] (j) The Secretary shall conduct, under such terms and 
conditions as the Secretary shall prescribe, for a period not 
to exceed 4 years, projects to test allowing not more than 
11,000 eligible households, in the aggregate, to accumulate 
resources up to $10,000 each (which shall be excluded from 
consideration as a resource) for later expenditure for a 
purpose directly related to improving the education, training, 
or employability (including self-employment) of household 
members, for the purchase of a home for the household, for a 
change of the household's residence, or for making major 
repairs to the household's home.
    (l) The Secretary shall use up to $4,000,000 of the funds 
provided in advance in appropriations Acts for projects 
authorized by this section to conduct demonstration projects in 
which State or local food stamp agencies test innovative ideas 
for working with State or local law enforcement agencies to 
investigate and prosecute coupon trafficking.
          * * * * * * *

                                WORKFARE

    [Sec. 20. (a)(1) The Secretary shall permit any political 
subdivision, in any State, that applies and submits a plan to 
the Secretary in compliance with guidelines promulgated by the 
Secretary to operate a workfare program pursuant to which every 
member of a household participating in the food stamp program 
who is not exempt by virtue of the provisions of subsection (b) 
of this section shall accept an offer from such subdivision to 
perform work on its behalf, or may seek an offer to perform 
work, in return for compensation consisting of the allotment to 
which the household is entitled under section 8(a) of this Act, 
with each hour of such work entitling that household to a 
portion of its allotment equal in value to 100 per centum of 
the higher of the applicable State minimum wage or the Federal 
minimum hourly rate under the Fair Labor Standards Act of 1938.
    [(2)(A) The Secretary shall promulgate guidelines pursuant 
to paragraph (1) which, to the maximum extent practicable, 
enable a political subdivision to design and operate a workfare 
program under this section which is compatible and consistent 
with similar workfare programs operated by the subdivision.
    [(B) A political subdivision may comply with the 
requirements of this section by operating--
          [(i) a workfare program pursuant to title IV of the 
        Social Security Act (42 U.S.C. 601 et seq.); or
          [(ii) any other workfare program which the Secretary 
        determines meets the provisions and protections 
        provided under this section.
    [(b)(1) A household member shall be exempt from workfare 
requirements imposed under this section if such member is--
          [(A) exempt from section 6(d)(1) as the result of 
        clause (B), (C), (D), (E), or (F) of section 6(d)(2);
          [(B) at the option of the operating agency, subject 
        to and currently actively and satisfactorily 
        participating at least 20 hours a week in a work 
        training program required under title IV of the Social 
        Security Act (42 U.S.C. 601 et seq.);
          [(C) mentally or physically unfit;
          [(D) under sixteen years of age;
          [(E) sixty years of age or older; or
          [(F) a parent or other caretaker of a child in a 
        household in which another member is subject to the 
        requirements of this section or is employed fulltime.
    [(2)(A) Subject to subparagraphs (B) and (C), in the case 
of a household that is exempt from work requirements imposed 
under this Act as the result of participation in a community 
work experience program established under section 409 of the 
Social Security Act (42 U.S.C. 609), the maximum number of 
hours in a month for which all members of such household may be 
required to participate in such program shall equal the result 
obtained by dividing--
          [(i) the amount of assistance paid to such household 
        for such month under title IV of such Act, together 
        with the value of the food stamp allotment of such 
        household for such month; by
          [(ii) the higher of the Federal or State minimum wage 
        in effect for such month.
    [(B) In no event may any such member be required to 
participate in such program more than 120 hours per month.
    [(C) For the purpose of subparagraph (A)(i), the value of 
the food stamp allotment of a household for a month shall be 
determined in accordance with regulations governing the 
issuance of an allotment to a household that contains more 
members than the number of members in an assistance unit 
established under title IV of such Act.
    [(c) No operating agency shall require any participating 
member to work in any workfare position to the extent that such 
work exceeds in value the allotment to which the household is 
otherwise entitled or that such work, when added to any other 
hours worked during such week by such member for compensation 
(in cash or in kind) in any other capacity, exceeds thirty 
hours a week.
    [(d) The operating agency shall--
          [(1) not provide any work that has the effect of 
        replacing or preventing the employment of an individual 
        not participating in the workfare program;
          [(2) provide the same benefits and working conditions 
        that are provided at the job site to employees 
        performing comparable work for comparable hours; and
          [(3) reimburse participants for actual costs of 
        transportation and other actual costs all of which are 
        reasonably necessary and directly related to 
        participation in the program but not to exceed $25 in 
        the aggregate per month.
    [(e) The operating agency may allow a job search period, 
prior to making workfare assignments, of up to thirty days 
following a determination of eligibility.
    [(f) In the event that any person fails to comply with the 
requirements of this section, neither that person nor the 
household to which that person belongs shall be eligible to 
participate in the food stamp program for two months, unless 
that person or another person in the household satisfies all 
outstanding workfare obligations prior to the end of the two-
month disqualification period.
    [(g)(1) The Secretary shall pay to each operating agency 50 
per centum of all administrative expenses incurred by such 
agency in operating a workfare program, including 
reimbursements to participants for work-related expenses as 
described in subsection (d)(3) of this section.
    [(2)(A) From 50 per centum of the funds saved from 
employment related to a workfare program operated under this 
section, the Secretary shall pay to each operating agency an 
amount not to exceed the administrative expenses described in 
paragraph (1) for which no reimbursement is provided under such 
paragraph.
    [(B) For purposes of subparagraph (A), the term ``funds 
saved from employment related to a workfare program operated 
under this section'' means an amount equal to three times the 
dollar value of the decrease in allotments issued to 
households, to the extent that such decrease results from wages 
received by members of such households for the first month of 
employment beginning after the date such members commence such 
employment if such employment commences--
          [(i) while such members are participating for the 
        first time in a workfare program operated under this 
        section; or
          [(ii) in the thirty-day period beginning on the date 
        such first participation is terminated.
    [(3) The Secretary may suspend or cancel some or all of 
these payments, or may withdraw approval from a political 
subdivision to operate a workfare program, upon a finding that 
the subdivision has failed to comply with the workfare 
requirements.]
    Sec. 20. (a)(1) The Secretary shall permit a State that 
applies and submits a plan in compliance with guidelines 
promulgated by the Secretary to operate a program within the 
State or any political subdivision within the State, under 
which persons who are required to work under section 6(d)(4) 
may accept an offer from the State or political subdivision to 
perform work on its behalf, or on behalf of a private nonprofit 
entity designated by the State or political subdivision, in 
order to continue to qualify for benefits after they have 
initially been judged eligible.
    (2) The Secretary shall promulgate guidelines pursuant to 
paragraph (1) which, to the maximum extent practicable, enable 
a State or political subdivision to design and operate a 
program that is compatible and consistent with similar programs 
operated by the State or political subdivision.
    (b) To be approved by the Secretary, a program shall 
provide that participants work, in return for compensation 
consisting of the allotment to which the household is entitled 
under section 8(a), with each hour of such work entitling that 
household to a portion of its allotment equal in value to 100 
percent of the higher of the applicable State minimum wage or 
the Federal minimum hourly rate under the Fair Labor Standards 
Act of 1938.
    (c) No State or political subdivision that receives funds 
provided under this section shall replace any employed worker 
with an individual who is participating in a program under this 
section for the purposes of complying with section 6(d)(4). 
Such an individual may be placed in any position offered by the 
State or political subdivision that--
          (1) is a new position;
          (2) is a position that became available in the normal 
        course of conducting the business of the State or 
        political subdivision;
          (3) involves performing work that would otherwise be 
        performed on an overtime basis by a worker who is not 
        an individual participating in such program; or
          (4) that is a position which became available by 
        shifting a current employee to an alternate position.
    (d) The Secretary shall allocate among the States or 
political subdivisions in each fiscal year, from funds 
appropriated for the fiscal year under section 18(a)(1), the 
amount of $75,000,000 to assist in carrying out the program 
under this section, during the fiscal year.
    (e)(1) In making the allocation required under subsection 
(d), the Secretary shall allocate to each State operating a 
program under this section that percentage of the total funds 
allocated under subsection (d) which equals the estimate of the 
Secretary of the percentage of participants who are required to 
work under section 6(d)(4) that reside in such State.
    (2) The State shall promptly notify the Secretary if such 
State determines that it will not expend the funds allocated it 
under paragraph (1) and the Secretary shall reallocate such 
funds as the Secretary deems appropriate and equitable.
    (f) Notwithstanding subsection (d), the Secretary shall 
ensure that each State operating a program under this section 
is allocated at least $50,000 by reducing, to the extent 
necessary, the funds allocated to those States allocated more 
than $50,000.
    (g) If, in carrying out such program during such fiscal 
year, a State or political subdivision incurs costs that exceed 
the amount allocated to the State agency under subsection (d)--
    (d)(1) the Secretary shall pay such State agency an amount 
equal to 50 percent of such additional costs, subject to the 
first limitation in paragraph (2); and
    (2) the Secretary shall also reimburse each State agency in 
an amount equal to 50 percent of the total amount of payments 
made or costs incurred by the State or political subdivision in 
connection with transportation costs and other expenses 
reasonably necessary and directly related to participation in a 
program under this section, except that such total amount shall 
not exceed an amount representing $25 per participant per month 
for costs of transportation and other actual costs and such 
reimbursement shall not be made out of funds allocated under 
subsection (d).
    (h) The Secretary may suspend or cancel some or all of 
these payments, or may withdraw approval from a State or 
political subdivision to operate a program, upon a finding that 
the State or political subdivision has failed to comply with 
the requirements of this section.
          * * * * * * *

                      issuance and use of coupons

    Sec. 7. (a) * * *
          * * * * * * *
    (i)(1) * * *
          * * * * * * *
    (6) This subsection shall not diminish the authority of the 
Secretary to conduct projects to test automated or electronic 
benefit delivery systems under section [17(f)] 17(e).
          * * * * * * *
                     eligibility disqualifications

    Sec. 6. (a) * * *
          * * * * * * *
    (i) An individual who is a member of a household who would 
otherwise be eligible to participate in the food stamp program 
under this section and who has been disqualified for 
noncompliance with program requirements from the program 
established by the State under part A of title IV of the Social 
Security Act (42 U.S.C. 601 et seq.) shall not be eligible to 
participate in the food stamp program during the period such 
disqualification is in effect.

                      issuance and use of coupons

    Sec. 7. (a) * * *
          * * * * * * *
    (i)[(1)(A) Any State agency may, with the approval of the 
Secretary, implement an on-line electronic benefit transfer 
system in which household benefits determined under section 
8(a) are issued from and stored in a central data bank and 
electronically accessed by household members at the point-of-
sale.
    [(B) No State agency may implement or expand an electronic 
benefit transfer system without prior approval from the 
Secretary.]
    (1)(A) State agencies are encouraged to implement an on-
line electronic benefit transfer system in which household 
benefits determined under section 8(a) or section 24 are issued 
from and stored in a central data bank and electronically 
accessed by household members at the point-of-sale.
    (B) Subject to paragraph (2), a State is authorized to 
procure and implement an on-line electronic benefit transfer 
system under the terms, conditions, and design that the State 
deems appropriate.
    (C) Upon request of a State, the Secretary may waive any 
provision of this Act prohibiting the effective implementation 
of an electronic benefit transfer system under this subsection.
    (2) the Secretary shall issue final regulations effective 
no later than April 1, 1992, that establish standards for [the 
approval of] such a system. The standards shall include--
          (A) determining the cost-effectiveness of the system 
        to ensure that its operational cost, including the pro 
        rata cost of capital expenditures and other reasonable 
        startup costs, does not exceed, in any 1 year, the 
        operational cost of issuance systems in use prior to 
        the implementation of the on-line electronic benefit 
        transfer system;
          (B) defining the required level of recipient 
        protection regarding privacy, ease of use, and access 
        to and service in retail food stores;
          (C) the terms and conditions of participation by 
        retail food stores, financial institutions, and other 
        appropriate parties;
          (D) system security;
          (E) system transaction interchange, reliability, and 
        processing speeds;
          (F) financial accountability;
          (G) the required testing of system operations prior 
        to implementation; and
          (H) the analysis of the results of system 
        implementation in a limited project area prior to 
        expansion.
    (3) In the case of a system described in paragraph (1) in 
which participation is not optional for households, [the 
Secretary shall not approve such a system unless--] such system 
shall provide that--
          (A) a sufficient number of eligible retail food 
        stores, including those stores able to serve minority 
        language populations, have agreed to participate in the 
        system throughout the area in which it will operate to 
        ensure that eligible households will not suffer a 
        significant reduction in their choice of retail food 
        stores or a significant increase in the cost of food or 
        transportation to participating food stores; and
          (B) any special equipment necessary to allow 
        households to purchase food with the benefits issued 
        under this Act is operational--
                  (i) in the case of a participating retail 
                food store in which coupons are used to 
                purchase 15 percent or more of the total dollar 
                amount of food sold by the store (as determined 
                by the Secretary), at all registers in the 
                store; and
                  (ii) in the case of other participating 
                stores, at a sufficient number of registers to 
                provide service that is comparable to service 
                provided individuals who are not members of 
                food stamp households, as determined by the 
                Secretary.
          * * * * * * *
SEC. 25. ENCOURAGEMENT OF ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    (a) Upon fully implementing an electronic benefit transfer 
system which operates in the entire State, a State may, subject 
to the provisions of this section, elect to receive a grant for 
any fiscal year to operate a low-income nutrition assistance 
program in such fiscal year in lieu of the food stamp program.
    (b)(1) A State that meets the requirements of this section 
and elects to operate such program, shall receive each fiscal 
year under this section the sum of--
          (A)(i) the total dollar value of all benefits issued 
        under the food stamp program by the State during fiscal 
        year 1994; or
          (ii) the average per fiscal year of the total dollar 
        value of all benefits issued under the food stamp 
        program by the State during fiscal years 1992 through 
        1994; and
          (B) the total amount received by the State for 
        administrative costs under section 16(a) for fiscal 
        year 1994 or the average per fiscal year of the total 
        amount received by the State for administrative costs 
        under section 16(a) for fiscal years 1992 through 1994.
    (2) Upon approval by the Secretary of the plan submitted by 
a State under subsection (c), the Secretary shall pay to the 
State at such times and in such manner as the Secretary may 
determine, the amount to which the State is eligible under 
subsection (b)(1).
    (c) To be eligible to operate a low-income nutrition 
assistance program under this section, a State shall submit for 
approval each fiscal year a plan of operation specifying the 
manner in which such a program will be conducted by the State. 
Such plan shall--
          (1) certify that the State has implemented a 
        statewide electronic benefit transfer system in 
        accordance with section 7(i);
          (2) designate a single State agency responsible for 
        the administration of the low-income nutrition 
        assistance program under this section;
          (3) assess the food and nutrition needs of needy 
        persons residing in the State;
          (4) limit the assistance to be provided under this 
        section to the purchase of food;
          (5) describe the persons to whom such assistance will 
        be provided;
          (6) assure the Secretary that assistance will be 
        provided to the most needy persons in the State and 
        that applicants for assistance shall have adequate 
        notice and fair hearings comparable to those required 
        under section 11;
          (7) provide that, in the operation of the low-income 
        nutrition assistance program, there shall be no 
        discrimination on the basis of race, sex, religion, 
        national origin, or political beliefs; and
          (8) include under information as may be required by 
        the Secretary.
    (d) Payments made under this section to the State may be 
expended only in the fiscal year for which such payments are 
distributed, except that the State may reserve up to 5 percent 
of the grant received for a fiscal year to provide assistance 
under this section in the subsequent fiscal year: Provided, 
That such reserved funds may not total more than 20 percent of 
the total grant received under this section for a fiscal year.
    (e) The State agency shall keep records concerning the 
operation of the program carried out under this section and 
shall make such records available to the Secretary and the 
Comptroller General of the United States.
    (f) If the Secretary finds that there is substantial 
failure by a State to comply with the requirements of this 
section, regulations issued pursuant to this section, or the 
plan approved under subsection (c), then the Secretary shall 
take one or more of the following actions:
          (1) suspend all or part of such payment authorized by 
        subsection (b)(2) to be made available to such State, 
        until the Secretary determines the State to be in 
        substantial compliance with such requirements;
          (2) withhold all or part of such payments until the 
        Secretary determines that there is no longer failure to 
        comply with such requirements, at which time the 
        withheld payment may be paid; or
          (3) terminate the authority of the State to operate 
        the low-income nutrition assistance program.
    (g)(1) States which receive grants under this section shall 
provide for--
          (A) a biennial audit, conducted in accordance with 
        the standards of the Comptroller General, of 
        expenditures for the provision of nutrition assistance 
        under this section; and
          (B) not later than 120 days of the end of each fiscal 
        year in which an audit is conducted, provide the 
        Secretary with such audit.
States shall make the report of such audit available for public 
inspection.
    (2) Not later than 120 days after the end of the fiscal 
year for which a State receives a grant under this section, 
such State shall prepare an activities report comparing actual 
expenditures for such fiscal year for nutrition assistance 
under this section with the expenditures for such fiscal year 
predicted in the plan submitted in accordance with subsection 
(c). Such State shall make the activities report available for 
public inspection.
    (h) Whoever knowingly and willfully embezzles, misapplies, 
steals, or obtains by fraud, false statement, or forgery, any 
funds, assets, or property provided or financed under this 
section shall be fined not more than $10,000 or imprisoned for 
not more than 5 years, or both.
          * * * * * * *
                           value of allotment

    Sec. 8. (a) The value of the allotment which State agencies 
shall be authorized to issue to any households certified as 
eligible to participate in the food stamp program shall be 
equal to the cost to such households of the thrifty food plan 
reduced by an amount equal to 30 per centum of the household's 
income, as determined in accordance with section 5 (d) and (e) 
of this Act, rounded to the nearest lower whole dollar: 
Provided, That for households of one and two persons the 
minimum allotment shall be $10 per month[, and shall be 
adjusted on each October 1 to reflect the percentage change in 
the cost of the thrifty food plan without regard to the special 
adjustments under section 3(o) for the 12-month period ending 
the preceding June, with the result rounded to the nearest $5].
          * * * * * * *
    Sec. 8. (c)(1) * * *
    (2) As used in this subsection, the term ``initial month'' 
means (A) the first month for which an allotment is issued to a 
household, (B) the first month for which an allotment is issued 
to a household following any period [of more than one month] in 
which such household was not participating in the food stamp 
program under this Act after the expiration of a certification 
period or after the termination of the certification of a 
household, during a certification period, when the household 
ceased to be eligible after notice and an opportunity for a 
hearing under section 11(e)(10), and (C) in the case of a 
migrant or seasonal farmworker household, the first month for 
which allotment is issued to a household that applies following 
any period of more than 30 days in which such household was not 
participating in the food stamp program after previous 
participation in such program.
          * * * * * * *

                  collection and disposition of claims

    Sec. 13. (a)(1) The Secretary shall have the power to 
determine the amount of and settle and adjust any claim and to 
compromise or deny all or part of any such claim or claims 
arising under the provisions of this Act or the regulations 
issued pursuant to this Act, including, but not limited to, 
claims arising from fraudulent and nonfraudulent over issuances 
to recipients, including the power to waive claims if the 
Secretary determines that to do so would serve the purposes of 
this Act. Such powers with respect to claims against recipients 
may be delegated by the Secretary to State agencies. The 
Secretary shall have the power to reduce amounts otherwise due 
to a State agency under section 16 of this Act to collect 
unpaid claims assessed against the State agency if the State 
agency has declined or exhausted its appeal rights under 
section 14 of this Act. In determining whether to settle, 
adjust, compromise, or waive a claim arising against a State 
agency pursuant to section 16(c), the Secretary shall review a 
State agency's plans for new dollar investment in activities to 
improve program administration in order to reduce payment 
error, and shall take the State agency's pans for new dollar 
investment in such activities into consideration as the 
Secretary considers appropriate. To the extent that a State 
agency does not pay a claim established under section 
16(c)(1)(C), including an agreement to have all or part of the 
claim paid through a reduction in Federal administrative 
funding, within 30 days from the date on which the bill for 
collection (after a determination on any request for a waiver 
for good cause related to the claim has been made by the 
Secretary) is received by the State agency, the State agency 
shall be liable for interest on any unpaid portion of such 
claim accruing from the date on which the bill for collection 
was received by the State agency, unless the State agency 
appeals the claim under section 16(c)(7). If the State agency 
appeals such claim (in whole or in part), the interest on any 
unpaid portion of the claim shall accrue from the date of the 
decision on the administrative appeal, or from a date that is 
[1 year] 2 years after the date the bill is received, whichever 
is earlier, until the date the unpaid portion of the payment is 
received. If the State agency pays such claim (in whole or in 
part, including an agreement to have all or part of the claim 
paid through a reduction in Federal administrative funding) and 
the claim is subsequently overturned through administrative or 
judicial appeal, any amounts paid by the State agency shall be 
promptly returned with interest, accruing from the date the 
payment is received until the date the payment is returned. Any 
interest assessed under this paragraph shall be computed at a 
rate determined by the Secretary based on the average of the 
bond equivalent of the weekly 90-day Treasury bill auction 
rates during the period such interest accrues.
          * * * * * * *
            administrative cost-sharing and quality control

    Sec. 16. (a) * * *
    (c)(1) The program authorized under this Act shall include 
a system that enhances payment accuracy by establishing fiscal 
incentives that require State agencies with high error rates to 
share in the cost of payment error and provide enhanced 
administrative funding to States with the lowest error rates. 
Under such system--
          (A) the Secretary shall adjust a State agency's 
        federally funded share of administrative costs pursuant 
        to subsection (a), other than the costs already shared 
        in excess of 50 percent under the proviso in the first 
        sentence of subsection (a) or under subsection (g), by 
        increasing such share of all such administrative costs 
        by one percentage point to a maximum of 60 percent of 
        all such administrative costs for each full one-tenth 
        of a percentage point by which the payment error rate 
        is less than 6 percent, except that only States whose 
        rate of invalid decisions in denying eligibility is 
        less than a nationwide percentage that the Secretary 
        determines to be reasonable shall be entitled to the 
        adjustment prescribed in this subsection;
          (B) the Secretary shall foster management 
        improvements by the States pursuant to subsection (b) 
        by requiring State agencies other than those receiving 
        adjustments under subparagraph (A) to develop and 
        implement corrective action plans to reduce payment 
        errors; and
          (C) for any fiscal year in which a State agency's 
        payment error rate exceeds the [national performance 
        measure] payment error tolerance level for payment 
        error rates announced under paragraph (6), other than 
        for good cause shown, the State agency shall pay to the 
        Secretary an amount [equal to--
                  [(i) the product of--
                          [(I) the value of all allotments 
                        issued by the State agency in the 
                        fiscal year; times
                          (II) the lesser of--
                                  [(aa) the ratio of--
                                          [(aaa) the amount of 
                                        which the payment error 
                                        rate of the State 
                                        agency for the fiscal 
                                        year exceeds the 
                                        national performance 
                                        measure for the fiscal 
                                        year; to
                                          [(bbb) the national 
                                        performance measure for 
                                        the fiscal year, or
                                  [(bb) 1; times
                          [(III) the amount of which the 
                        payment error rate of the State agency 
                        for the fiscal year exceeds the 
                        national performance measure for the 
                        fiscal year. The amount of liability 
                        shall not be affected by corrective 
                        action under subparagraph (B).] equal 
                        to its payment error rate less such 
                        tolerance level times the total value 
                        of allotments issued in such a fiscal 
                        year by such State agency. The amount 
                        of liability shall not be affected by 
                        corrective action under subparagraph 
                        (B).
          * * * * * * *
          (3) The following errors may be measured for 
        management purposes but shall not be included in the 
        payment error rate:
                  (A) Any errors resulting in the application 
                of new regulations promulgated under this Act 
                during the first [120 days] 60 days (or 90 days 
                at the discretion of the Secretary) from the 
                required implementation date for such 
                regulations.
          * * * * * * *
          (6) At the time the Secretary makes the notification 
        to State agencies of their error rates and incentive 
        payments or claims pursuant to paragraphs (1)(A) and 
        (1)(C), the Secretary shall also announce a national 
        performance measure that shall be the sum of the 
        products of each State agency's error rate as developed 
        for the notifications under paragraph (5) times that 
        State agency's proportion of the total value of 
        national allotments issued for the fiscal year using 
        the most recent issuance data available at the time of 
        the notifications issued pursuant to paragraph (5). 
        Where a State fails to meet reporting requirements 
        pursuant to paragraph (4), the Secretary may use 
        another measure of a State's error developed pursuant 
        to paragraph (5), to develop the national performance 
        measure. The announced national performance measure 
        shall be used to establish a payment-error tolerance 
        level. Such tolerance level for any fiscal year will be 
        one percentage point added to the lowest national 
        performance measure ever announced up to and including 
        such fiscal year under this section. The payment-error 
        tolerance level shall be used in determining the State 
        share of the cost of payment error under paragraph 
        (1)(C) for the fiscal year whose error rates are being 
        announced under paragraph (5).
            (7) If the Secretary asserts a financial claim 
        against a State agency under paragraph (1)(C), the 
        State may seek administrative and judicial review of 
        the action pursuant to section 14.
          [(8)(A) This paragraph applies to the determination 
        of whether a payment is due by a State agency for a 
        fiscal year under paragraph (1)(C).
          [(B) Not later than 180 days after the end of the 
        fiscal year, the case review and all arbitrations of 
        State-Federal difference cases shall be completed.
          [(C) Not later than 30 days thereafter, the Secretary 
        shall--
                  [(i) determine final error rates, the 
                national average payment error rate, and the 
                amounts of payment claimed against State 
                agencies; and
                  [(ii) notify State agencies of the payment 
                claims.
          [(D) A state agency desiring to appeal a payment 
        claim determined under subparagraph (C) shall submit to 
        an administrative law judge--
                  [(i) a notice of appeal, not later than 10 
                days after receiving a notice of the claim; and
                  [(ii) evidence in support of the appeal of 
                the State agency, not later than 60 days after 
                receiving a notice of the claim.
          [(E) Not later than 60 days after a State agency 
        submit responsive evidence in support of the appeal, 
        the Secretary shall submit responsive evidence in 
        support of the appeal, the Secretary shall submit 
        responsive evidence to the administrative law judge to 
        the extent such evidence exists.
          [(F) Not later than 30 days after the Secretary 
        submits responsive evidence, the State agency shall 
        submit rebuttal evidence to the administrative law 
        judge to the extent such evidence exists.
          [(G) The administrative law judge, after an 
        evidentiary hearing, shall decide the appeal--
                  [(i) not later than 60 days after receipt of 
                rebuttal evidence submitted by the State 
                agency; or
          [(ii) if the State agency does not submit rebuttal 
        evidence, not later than 90 days after the State agency 
        submits the notice of appeal and evidence in support of 
        the appeal.
          [(H) In considering a claim under this paragraph, the 
        administrative law judge shall consider all grounds for 
        denying the claim, in whole or in part, including the 
        contention of a State agency that the claim should be 
        waived, in whole or in part, for good cause.
          [(I) The deadlines in subparagraphs (D), (E), (F), 
        and (G) shall be extended by the administrative law 
        judge for clause shown.]
          [(9) As used in this subsection, the term ``good 
        cause'' includes--
                  [(A) a natural disaster or civil disorder 
                that adversely affects food stamp program 
                operations;
                  [(B) a strike by employees of a State agency 
                who are necessary for the determination of 
                eligibility and processing of case changes 
                under the food stamp program;
                  [(C) a significant growth in food stamp 
                caseload in a State prior to or during a fiscal 
                year, such as a 15 percent growth in caseload;
                  [(D) a change in the food stamp program or 
                other Federal or State program that has a 
                substantial adverse impact on the management of 
                the food stamp program of a State; and
                  [(E) a significant circumstance beyond the 
                control of the State agency.]
          * * * * * * *
                    authorization for appropriations

    Sec. 18. (a)(1) To carry out this Act, there [are 
authorized to be appropriated such sums as are necessary for 
each of the fiscal years 1991 through 1995] is provided to be 
obligated, not in excess of the cost estimated made by the 
Congressional Budget Office for this Act, as amended by the 
Food Stamp Simplification and Reform Act of 1995, for the 
fiscal year ending September 30, 1996, with adjustments for any 
estimates of total obligations for additional fiscal years made 
by the Congressional Budget Office to reflect the provisions 
contained in the Food Stamp Simplification and Reform Act of 
1995 Not to exceed one-fourth of 1 per centum of the previous 
year's appropriation is authorized in each such fiscal year to 
carry out the provisions of section 17 of this Act, subject to 
paragraph (3). The Secretary shall, by the fifteenth day of 
each month, submit a report to the Committee on Agriculture of 
the House of Representatives and the Committee on Agriculture, 
Nutrition, and Forestry of the Senate setting forth the 
Secretary's best estimate of the second preceding month's 
expenditure, including administrative costs, as well as the 
cumulative totals for the fiscal year. [In each monthly report, 
the Secretary shall also state]. Also, the Secretary shall file 
a report every February 15, April 15, and July 15, stating 
whether there is reason to believe that [supplemental 
appropriations] additional obligational authority will be 
needed to support the operation of the program through the end 
of the fiscal year.
    (2) No funds [authorized to be appropriated] obligated 
under this Act or any other Act of Congress shall be used by 
any person, firm, corporation, group, or organization at any 
time, directly or indirectly, to interfere with or impede the 
implementation of any provision of this Act or any rule, 
regulation, or project thereunder, except that this limitation 
shall not apply to the provision of legal and related 
assistance in connection with any proceeding or action before 
any State or Federal agency or court. The President shall 
ensure that this paragraph is complied with by such order or 
other means as the President deems appropriate.
          * * * * * * *
    (b) In any fiscal year, the Secretary shall limit the value 
of those allotments issued to an amount not in excess of the 
[appropriation] total obligations limitation provided for such 
fiscal year. Notwithstanding any other provision of this Act, 
if in any fiscal year the Secretary finds that the requirements 
of participating States will exceed the [appropriation], 
obligational amount provided in subsection (a)(1) the Secretary 
shall direct State agencies to reduce the value of such 
allotments to be issued to households certified as eligible to 
participate in the food stamp program to the extent necessary 
to comply with the provisions of this subsection.
    (c) In prescribing the manner in which allotments will be 
reduced under subsection (b) of this section, the Secretary 
shall ensure that such reductions reflect, to the maximum 
extent practicable, the ratio of household income, determined 
under sections 5(d) and 5(e) or under section 24 of this Act, 
to the income standards of eligibility, for households of equal 
size, determined under section 5(c) or under section 24 of this 
Act. The Secretary may, in prescribing the manner in which 
allotments will be reduced, establish (1) special provisions 
applicable to persons sixty years of age or over and persons 
who are physically or mentally handicapped or otherwise 
disabled, [and] (2) minimum allotments after any reductions are 
otherwise determined under this section, and (3) adequate and 
appropriate recommendations on how to equitably achieve such 
reductions.
          * * * * * * *
    (f) [No funds appropriated] None of the funds obligated to 
carry out this Act may be transferred to the Office of the 
Inspector General, or the Office of the General Counsel, of the 
Department of Agriculture.
          * * * * * * *

       approval of retail food stores and wholesale food concerns
    Sec. 9. (a)(1) Regulations issued pursuant to this Act 
shall provide for the submission of applications for approval 
by retail food stores and wholesale food concerns which desire 
to be authorized to accept and redeem coupons under the food 
stamp program and for the approval of those applicants whose 
participation will effectuate the purposes of the food stamp 
program. In determining the qualifications of applicants, there 
shall be considered among such other factors as may be 
appropriate, the following: (A) the nature and extent of the 
food business conducted by the applicant; (B) the volume of 
coupon business which may reasonably be expected to be 
conducted by the applicant food store or wholesale food 
concern; and (C) the business integrity and reputation of the 
applicant. Approval of an applicant shall be evidenced by the 
issuance to such applicant of a nontransferable certificate of 
approval. The Secretary shall establish specific time periods 
during which authorization to accept and redeem coupons or 
redeem benefits through an electronic benefit transfer system 
under the food stamp program shall be valid. No retail food 
store or wholesale food concern shall be approved for 
participation in the food stamp program unless an authorized 
employee of the Department of Agriculture, wherever possible, 
or an official of the State or local government designated by 
the Department of Agriculture, has visited such retail food 
store or wholesale food concern for the purpose of determining 
whether such retail food store or wholesale food concern should 
be so approved.
          * * * * * * *
    (d) Any retail food store or wholesale food concern which 
has failed upon application to receive approval to participate 
in the food stamp program may obtain a hearing on such refusal 
as provided in section 14 of this Act. Such retail food store 
or wholesale food concern shall not submit an application under 
subsection (a)(1) for six months from the date of receipt of 
the notice of denial.
          * * * * * * *

 CIVIL MONEY PENALTIES AND DISQUALIFICATION OF RETAIL FOOD STORES AND 
                        WHOLESALE FOOD CONCERNS

    Sec. 12. (a)(1) Any approved retail food store or wholesale 
food concern may be disqualified for a specified period of time 
from further participation in the food stamp program, or 
subjected to a civil money penalty of up to $10,000 for each 
violation if the Secretary determines that its disqualification 
would cause hardship to food stamp households, on a finding, 
made as specified in regulations, that such store or concern 
has violated any of the provisions of this Act or the 
regulations issued pursuant to this Act.
    (2) A retail food store or wholesale food concern that is 
disqualified from participating in the program under section 17 
of the Child Nutrition Act of 1966 shall for such period of 
disqualification also be also be disqualified from 
participating in the food stamp program.
          * * * * * * *
                   administrative and judicial review

    Sec. 14. (a) Whenever an application of a retail food store 
or wholesale food concern to participate in the food stamp 
program is denied pursuant to section 9 of this Act, or a 
retail food store or wholesale food concern is disqualified or 
subjected to a civil money penalty under the provisions of 
section 12 of this Act, or a retail food store or wholesale 
food concern forfeits a bond under section 12(d) of this Act, 
or all or part of any claim of a retail food store or wholesale 
food concern is denied under the provisions of section 13 of 
this Act, or a claim against a State agency is stated pursuant 
to the provisions of section 13 of this Act, notice of such 
administrative action shall be issued to the retail food store, 
wholesale food concern, or State agency involved. Such notice 
shall be delivered by certified mail or personal service. If 
such store, concern, or State agency is aggrieved by such 
action, it may, in accordance with regulations promulgated 
under this Act, within ten days of date of delivery of such 
notice, file a written request for an opportunity to submit 
information in support of its position to such person or 
persons as the regulations may designate. If such a request is 
not made or if such store, concern, or State agency fails to 
submit information in support of its position after filing a 
request, the administrative determination shall be final. If 
such request is made by such store, concern, or State agency, 
such information as may be submitted by the store, concern, or 
State agency, as well as such other information as may be 
available, shall be reviewed by the person or persons 
designated by the Secretary, who shall, subject to the right of 
judicial review hereinafter provided, make a determination 
which shall be final and which shall take effect thirty days 
after the date of the delivery or service of such final notice 
of determination. Determinations regarding claims made pursuant 
to section 16(c) (including determinations as to whether there 
is good cause for not imposing all or a portion of the penalty) 
shall be made on the record after opportunity for an agency 
hearing in accordance with section 556 and 557 of title 5, 
United States Code, in which one or more administrative law 
judges appointed pursuant to section 3105 of such title shall 
preside over the taking of evidence. Such judges shall have 
authority to issue and enforce subpoenas in the manner 
prescribed in sections 13 (c) and (d) of the Perishable 
Agricultural Commodities Act of 1930 (7 U.S.C. 499m (c) and 
(d)) and to appoint expert witnesses under the provisions of 
Rule 706 of the Federal Rules of Evidence. The Secretary may 
not limit the authority of such judges presiding over 
determinations regarding claims made pursuant to section 16(c). 
The Secretary shall provide a summary procedure for 
determinations regarding claims made pursuant to section 16(c) 
in amounts less than $50,000. Such summary procedure need not 
include an oral hearing. On a petition by the State agency or 
sua sponte, the Secretary may permit the full administrative 
review procedure to be used in lieu of such summary review 
procedure for a claim of less than $50,000. Subject to the 
right of judicial review hereinafter provided, a determination 
made by an administrative law judge regarding a claim made 
pursuant to section 16(c) shall be final and shall take effect 
thirty days after the date of the delivery or service of final 
notice of such determination. If the store, concern, or State 
agency feels aggrieved by such final determination, it may 
obtain judicial review thereof by filing a complaint against 
the Untied States in the United States court for the district 
in which it resides or is engaged in business, or, in the case 
of a retail food store or wholesale food concern, in any court 
of record of the State having competent jurisdiction, within 
thirty days after the date of delivery or service of the final 
notice of determination upon it, requesting the court to set 
aside such determination. The copy of the summons and complaint 
required to be delivered to the official or agency whose order 
is being attacked shall be sent to the Secretary or such person 
or persons as the Secretary may designate to receive service of 
process. The suit in the United States district court or State 
court shall be a trial de novo by the court in which the court 
shall determine the validity of the questioned administrative 
action in issue, except that judicial review of determinations 
regarding claims made pursuant to section 16(c) shall be a 
review on the administrative record. If the court determines 
that such administrative action is invalid, it shall enter such 
judgment or order as it determines is in accordance with the 
law and the evidence. During the pendency of such judicial 
review, or any appeal therefrom, the administrative action 
under review shall be and remain in full force and effect, 
unless on application to the court on not less than ten days' 
notice, and after hearing thereon and a consideration by the 
court of the applicant's likelihood of prevailing on the merits 
and of irreparable injury, the court temporarily stays such 
administrative action pending disposition of such trial or 
appeal. Nothwithstanding any other provision of law, the 
permanent disqualification of a retail food store or wholesale 
food concern under section 12(b)(3) shall be effective from the 
date of receipt of the notice of disqualification.
          * * * * * * *

                       violations and enforcement

    Sec. 15. (a) * * *
          * * * * * * *
    [(g) The Secretary may subject to forfeiture and denial of 
property rights any nonfood items, moneys, negotiable 
instruments, securities, or other things of value that are 
furnished or intended to be furnished by any person in exchange 
for coupons, authorization cards or access devices, or anything 
of value obtained by use of an access device, in any manner 
contrary to this Act or the regulations issued under this Act. 
Any forfeiture and disposal of property forfeited under this 
subsection shall be conducted in accordance with procedures 
contained in regulations issued by the Secretary.]
    (g)(1) The court, in imposing sentence on a person 
convicted of an offense in violation of subsection (b) or (c), 
shall order, in addition to any other sentence imposed pursuant 
to this subsection, that the person forfeit to the United 
States all property described in paragraph (2).
    (2) 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), is subject to forfeiture to the United 
States.
    (3) No property shall be forfeited under this subsection to 
the extent of an interest of an owner, by reason of any act or 
omission established by that owner to have been committed to 
omitted without the knowledge or consent of that owner.
    (4) The proceeds from any sale of forfeited property and 
any monies forfeited under this subsection shall be used--
          (A) to reimburse the Department of Justice for the 
        costs incurred by the Department to initiate and 
        complete the forfeiture proceeding that caused the sale 
        that produced such proceeds;
          (B) to reimburse the Department of Agriculture Office 
        of Inspector General for any costs it incurred in the 
        law enforcement effort resulting in the forfeiture;
          (C) to reimburse any Federal or State law enforcement 
        agencies for any costs it incurred in the law 
        enforcement effort resulting in the forfeiture;
          (D) by the Secretary to carry out the approval, 
        reauthorization, and compliance investigations of 
        retail stores under section 9.
          * * * * * * *

                              DEFINITIONS

    Sec. 3. (a) * * *
          * * * * * * *
    (d) ``Coupon'' means any coupon, stamp, [or type of 
certificate] type of certificate, authorization cards, cash or 
checks issued in lieu of coupons, or access devices, including, 
but not limited to, electronic benefit transfer cards or 
personal identification numbers issued pursuant to the 
provisions of this Act.
          * * * * * * *

                     ELIGIBILITY DISQUALIFICATIONS

    Sec. 6. (a) * * *
          * * * * * * *
    (b)(1) Any person who has been found by any State or 
Federal court or administrative agency to have intentionally 
(A) made a false or misleading statement, or misrepresented, 
concealed or withheld facts, or (B) committed any act that 
constitutes a violation of this Act, the regulations issued 
thereunder, or any State statute, for the purpose of using, 
presenting, transferring, acquiring, receiving, or possessing 
coupons or authorization cards shall, immediately upon the 
rendering of such determination, become ineligible for further 
participation in the program--
          (i) for a period of [six months] 1 year upon the 
        first occasion of any such determination;
          (ii) for a period of [1 year] 2 years upon--
                  (I) the second occasion of any such 
                determination; or
                  (II) the first occasion of a finding by a 
                Federal, State, or local court of the trading 
                of a controlled substance (as defined in 
                section 102 of the Controlled Substances Act 
                (21 U.S.C. 802)) for coupons; and
          (iii) permanently upon--
                  (I) the third occasion of any such 
                determination;
                  (II) the second occasion of a finding by a 
                Federal State, or local court of the trading of 
                a controlled substance (as defined in section 
                102 of the Controlled Substances Act (21 U.S.C. 
                802)) for coupons; [or]
                  (III) the first occasion of a finding by a 
                Federal, State, or local court of the trading 
                of firearms, ammunition, or explosives for 
                coupons[.] or;
                  (IV) a conviction of an offense under 
                subsection (a) or (b) of section 15 involving 
                items referred to in such subsection having a 
                value of $500 or more.
During the period of such ineligibility, no household shall 
receive increased benefits under this Act as the result of a 
member of such household having been disqualified under this 
subsection.
          * * * * * * *
                             administration

    Sec. 11. (a) * * *
          * * * * * * *
    (e)(1) * * *
          * * * * * * *
    (8) safeguards which limit the use or disclosure of 
information obtained from applicant households to persons 
directly connected with the administration or enforcement of 
the provisions of this Act, regulations issued pursuant to this 
Act, Federal assistance programs or federally assisted State 
programs, except that (A) such safeguards shall not prevent the 
use or disclosure of such information to the Comptroller 
General of the United States for audit and examination 
authorized by any other provision of law, (B) notwithstanding 
any other provision of law, all information obtained under this 
Act from an applicant household shall be made available, upon 
request, to local, State or Federal law enforcement officials 
for the purpose of investigating an alleged violation of this 
Act or any regulation issued under this Act, and (C) such 
safeguards shall not prevent the use by, or disclosure of such 
information, to agencies of the Federal Government (including 
the United States Postal Service) for purposes of collecting 
the amount of an overissuance of coupons, as determined under 
section 13(b) of this Act and excluding claims arising from an 
error of the State agency, that has not been recovered pursuant 
to such section, from Federal pay (including salaries and 
pensions) as authorized pursuant to section 5514 of title 5 of 
the United States Code or refunds of Federal taxes as 
authorized pursuant to section 3720A of title 31 of the United 
States Code;
          * * * * * * *

                  collection and disposition of claims

    Sec. 13. (a) * * *
          * * * * * * *
    (d) The amount of an overissuance of coupons as determined 
under subsection (b) and except for claims arising from an 
error of the State agency, that has not been recovered pursuant 
to such subsection [may] shall be recovered from Federal pay 
(including salaries and pensions) as authorized by section 5514 
of title 5 of the United States Code or refunds of Federal 
taxes as authorized pursuant to section 3702A of title 31 of 
the United States Code.
                             MINORITY VIEWS

    For all who truly care about the poor and needy of this 
country, the Republican bill causes great concern. Although we 
are relieved that the Food Stamp Program, unlike the National 
School Lunch Program and other child nutrition programs, 
including the WIC program, will not be immediately turned into 
a block grant by this bill, the enormous reductions in funding 
will cause hungry people to no longer be able to attain a 
nutritionally adequate diet. As we strive to find ways to help 
poor parents achieve self-sufficiency, there is no excuse for 
limiting their ability to adequately feed their children.
    The Food Stamp Program is the country's largest provider of 
food aid and one of its most extensive welfare programs. In FY 
1994, it helped feed more than 1 in 10 people in this country. 
Half of the beneficiaries are children, and over 15 percent are 
elderly or disabled. More than 40 percent of the recipient 
households have monthly income BELOW 50 PERCENT of the poverty 
guideline, and only 20 percent have significant earnings.
    The program has always been very responsive to changes in 
the economy in two major ways. In the first instance, each 
year, the size of a household's allotment is adjusted to 
reflect any changes in the cost of food. Here is how that 
works: Maximum monthly food stamp allotments are tied to the 
cost of purchasing a nutritionally adequate low cost diet, as 
measured by the U.S. Department of Agriculture, plus 3 
percent.\1\ This diet is called the Thrifty Food Plan (TFP), 
and it is the cheapest of four food plans designed by USDA. 
USDA determines the cost of a market basket of low cost food 
items necessary to maintain a nutritious diet. The TFP is 
priced monthly, and food stamp allotments are adjusted, up or 
down, each October to reflect the cost of the TFP in the 
previous June. The October adjustment in 1995 is expected to be 
an increase of approximately 3.5%, reflecting the percent of 
increase in the cost of food. This mechanism assures that no 
family will get less than what it needs to maintain its ability 
to purchase a nutritionally adequate, albeit low cost, diet.
    \1\ Food stamp benefits are based on 103 percent of the Thrifty 
Food Plan to acknowledge the fact that food prices usually have 
increased between the time that the cost of the TFP is determined and 
the time that benefits are adjusted and distributed. (The cost of the 
TFP is determined in June, and benefits adjusted beginning the 
following October. Those adjusted benefits are not adjusted again until 
the next October, 15 months after the TFP adjustment.) This formula 
helps assure that families receive benefits reflective of the cost of 
food at the time they are purchasing the food.
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    This bill will limit any increases in the allotment to 2 
percent annually. While the majority can argue that nominal 
benefits will not be reduced under their bill, BENEFITS WILL NO 
LONGER KEEP PACE WITH THE COST OF FOOD. Given current estimates 
of what will happen to food prices in the future, it is 
expected that in 2 years food stamp families will no longer 
receive benefits adequate to purchase a nutritionally adequate 
diet. Allotments will have fallen below 100 percent of the 
Thrifty Food Plan. Each year thereafter, under the majority's 
bill, benefits will be further eroded. We cannot stress enough 
the importance of maintaining a nutritionally adequate diet. It 
is the linchpin upon which this program is based and upon which 
all changes to the program must be measured. This bill 
completely abandons the principle that poor and hungry families 
deserve, at minimum, a nutritionally adequate diet.
    In the second instance, the bill becomes even more 
unresponsive to economic fluctuations by making it extremely 
difficult for the program to respond to increases in need 
during recessions. It places a cap on annual food stamp 
expenditures at the exact dollar levels that the Congressional 
Budget Office estimates the program will cost given 
implementation of the provisions in the bill. The CBO projects 
low unemployment and assumes no recession in the next five 
years. We hope that this assumption is correct, but if it is 
wrong and the Nation faces a recession, benefits to poor and 
hungry families will be reduced. There is no provision for an 
upward adjustment of the cap if the number of beneficiaries 
rises during a recession. Any effort under those circumstances 
to raise the cap, under the 1990 Budget Enforcement Act, would 
be virtually impossible, since it would require an offsetting 
tax increase, a cut in another entitlement, or an emergency 
designation. At exactly the time when poor people need help 
most, they will receive less food assistance. The working poor, 
those most likely to lose jobs during a recession, will not 
have food benefits adequate to feed their families a healthy 
diet.
    Everyone can agree that we need additional budgetary 
controls on our federal budget. However, this is a most 
inhumane way to achieve such control. Hunger cannot be capped. 
We must allow the one program that provides a minimal safety 
net to keep hunger at bay to respond to recessionary times.
    We must conclude that the majority's bill is a cost savings 
bill, nothing more. There is little welfare reform in this 
bill. For example, there are no job training requirements in 
this bill. The current requirement that states provide 
employment and training to food stamp families is deleted, and 
funding for these activities is eliminated. Instead, the same 
level of funding is provided to states that choose to operate a 
program requiring that families work in public service jobs in 
return for their food stamp benefits. Currently, only 6 states 
operate such programs, and none of them are statewide. We do 
not accept the majority's assumptions that there are plenty of 
jobs available, and if hungry people are denied food benefits 
they will get a job. People do not prefer poverty over self-
sufficiency. If given adequate job training and employment 
counseling, and if jobs are available, people will work. This 
bill provides no such incentives.
    This process has not produced true welfare reform. Merely 
cutting the Food Stamp Program at some arbitrary level is not 
reform and no one should mistake it as such. This bill simply 
goes too far in undermining our federal food assistance safety 
net and leaves vulnerable our poor. In other areas, AFDC, WIC, 
school lunch, we are making radical reforms that when coupled 
with the changes in the Republican bill greatly compromise our 
federal food safety net. Reason argues for leaving one program 
as the backstop in case reforms in the other programs fail.
    For those who have worked on far-reaching and comprehensive 
legislation in the past, the process of reforming welfare in 
this Congress has been most disturbing. The frantic pace at 
which we are required to move has assured that very little 
thoughtful consideration and deliberation can take place. It is 
impossible to know the full implication of the bill's benefit 
reductions on the poor and hungry of this country without the 
CBO estimate. The majority many times during mark-up stated 
that the bill they presented for approval was believed to save 
$16.5 billion over 5 years. A vote on a motion offered by the 
minority to delay mark-up until a CBO estimate was available 
was defeated on a party line vote. We have now learned that CBO 
estimates that the reductions in benefits that will result from 
the majority bill will equal over $21 billion over 5 years. 
This situation is exactly what the minority had hoped to avoid. 
The concerns of the minority over $16.5 billion in benefit 
reductions are magnified several times when the reductions 
exceed $21 billion. A bill this important should not be 
finalized without knowing all of the budget implications and 
their impact on policy. This is no way to reform a program that 
is designed to keep our children from going hungry.
    Finally, the minority is pleased that the committee 
approved a sense of the committee provision that reduction in 
spending resulting from implementation of this bill must go 
toward deficit reduction. We expect the majority to argue 
forcefully that this policy be adopted for the full welfare 
reform package that will be presented to the House later this 
month. There can be only two reasons to seek reductions in the 
Food Stamp Program--(1) to reduce the deficit and (2) to 
reallocate these resources in such a manner that allows the 
participants to achieve self-sufficiency (such as employment 
and training). Any attempt to use the savings to finance the 
tax cuts proposed by the House leadership will be roundly 
denounced by the minority members of this committee. We will 
not stand by and allow an erosion of food benefits for the poor 
to provide tax breaks for those who are far better off.

                                   E (Kika) de la Garza.
                                   Collin Peterson.
                                   Calvin M. Dooley.
                                   Charlie Stenholm.
                                   Sam Farr.
                                   Tim Holden.
                                   Sanford D. Bishop, Jr.
                                   David Minge.
                                   Bennie G. Thompson.
                                   Earl Pomeroy.
                                   James Baldacci.
                                   Harold L. Volkmer.
                                   Ed Pastor.
                                   Karen L. Thurman.
                                   Gary A. Condit.
                                   Cynthia A. McKinney.
                                   George E. Brown, Jr.
                                   Eva M. Clayton.
                                   Charlie Rose.
                                   Tim Johnson.
                                   Earl F. Hillard.
    ADDITIONAL VIEWS ON H.R. 1135 OFFERED BY MR. BROWN OF CALIFORNIA

    I am deeply concerned about the effects that the changes to 
the Food Stamp Program that have been endorsed by the Majority 
Members of this Committee will have on the poor in this 
country. Although these changes are being made under the guise 
of welfare reform, this bill is more representative of an 
exercise in budget cutting than it is an attempt to deal 
responsibly with the deep structural problems in our society 
which the growth of welfare expenditures represents.
    What disturbs me most is the underlying assumption in the 
current welfare debate that the welfare system has attracted 
welfare recipients. In other words, the recipients of food 
stamps, AFDC, WIC, and all of the other programs we have 
established are living a comfortable life and are receiving 
these benefits because they are lazy and unwilling to work. If 
that is true, then we can eliminate poverty by eliminating the 
welfare system. But I do not believe this approach will result 
in anything other than leaving poor people without housing and 
food. I think we all know there are always some individuals who 
fall into the category of laziness, but I reject the notion 
that this is the majority. There are too many questions going 
unanswered in this debate. How many jobs are available? Do the 
jobs that are available pay a living wage? Are the people who 
are now receiving welfare benefits employable?
    Anyone who has taken the time to visit poor neighborhoods 
in either our rural or urban neighborhoods knows that the 
welfare system is the symptom, not the problem. I am not 
suggesting that we do not need welfare reform. We do. However, 
I think it would require us to spend money, not to cut it. The 
diseases are unemployment, under-employment, a lack of adequate 
education and training, and an economy that is not generating 
enough jobs that pay a living wage to accommodate the growth in 
our population. H.R. 1135 provides no cures of the diseases; it 
merely attempts to mask the symptom by passing the 
responsibility to the States.
    The Food Stamp Program was established so that we would not 
suffer the shame of having residents of the wealthiest, most 
agriculturally productive nation in the world go hungry. If 
this bill is enacted that is exactly what we will have.
    Mr. Roberts and Mr. Emerson made a valiant effort to 
protect the federal nature of this program. However, upon more 
careful reading of this bill it is obvious that they succeeded 
only in that the block grant concept is openly acknowledged in 
only one section of this bill: Section 25 the Encouragement of 
Electronic Benefit Transfer. There are numerous reasons to 
maintain the Food Stamp Program as a federal program, but the 
most fundamental of these is to ensure a uniform nutritional 
standard.
    H.R. 1135 will not provide that assurance. The erosion of 
benefits that will occur in the years to come will not keep 
pace with the food stamp program's underlying nutritional 
standard--the cost of the Thrifty Food Plan. Further, there are 
opportunities for the current federal nutritional standard to 
be lowered by the States.
    Under Section 24, the Simplified Food Stamp Program, States 
can break with the long-standing food stamp policy of 
guaranteeing a national benefit floor by providing food stamp 
benefits to cash welfare recipients that are below those 
provided by the regular food stamp program. While they could 
increase benefits to other cash welfare families, the bill 
limits costs in such a way that increased benefits for some can 
only come at the expense of reducing benefits to others. When I 
offered an amendment to guarantee that households with children 
under the age of 18 would receive nutritional benefits under 
the simplified program at least equivalent to those guaranteed 
in the Food Stamp Act, it was rejected, in the name of 
``flexibility,'' as an unacceptable limitation on States' 
abilities to design a simplified program.
    Section 24 also would permit States to ``cash-out'' food 
stamp benefits for households that have an individual who earns 
as little as $350 per month. The purpose of having food stamp 
coupons (and electronic benefit transfer systems), as opposed 
to a cash allotment is to ensure that people purchase food. I 
fail to see how instituting this type of program flexibility 
for States will ensure the maintenance of a nutritional 
standard. Someone earning the annual equivalent of $4,200 is 
not likely to be free of pressure to spend money on non-food 
necessities.
    If under H.R. 1135 States are to have the ability to deny 
food stamp benefits, cash out food stamps, and decrease 
benefits levels below those guaranteed by the federal Food 
Stamp Act, H.R. 1135 does NOT maintain a federal nutritional 
safety net. Shakespeare wrote, ``* * * a rose by any other name 
would still smell as sweet * * *'' In this case, a covert block 
grant by the name of ``simplified food stamp program'' will 
functionally eliminate the federal nutritional safety net 
guaranteed to our population under the federal Food Stamp Act 
just as an overt block grant would.
    I am not arguing for a simple continuation of this program 
as it currently exists. I believe we could make improvements on 
it. The fraud and errors that have been documented erode 
benefits of the program and they should be addressed. Our 
welfare system needs reform, and the goal of having all able-
bodied adults participating in constructive employment is one 
that I share. Unfortunately, the current proposal does very 
little to move us in that direction. I cannot support a welfare 
reform proposal that is primarily punitive in nature and which 
offers no constructive solutions to this compelling social 
problem.

                                               George E. Brown, Jr.