    [104th Congress Public Law 193]
    [From the U.S. Government Publishing Office]

    <DOC>
    [DOCID: f:publ193.104]

    [[Page 110 STAT. 2105]]

    Public Law 104-193
    104th Congress

                                     An Act

       To provide for reconciliation pursuant to section 201(a)(1) of the
     concurrent resolution on the budget for fiscal year 1997. <<NOTE: Aug.
                           22, 1996 -  [H.R. 3734]>>

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress <<NOTE: Personal Responsibility and
    Work Opportunity Reconciliation Act of 1996.>>  assembled,

    SECTION 1. <<NOTE: 42 USC 1305 note.>>  SHORT TITLE.

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

    SEC. 2. TABLE OF CONTENTS.

        The table of contents for this Act is as follows:

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

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

                     TITLE II--SUPPLEMENTAL SECURITY INCOME

    Sec. 200. Reference to Social Security Act.

                      Subtitle A--Eligibility Restrictions

    Sec. 201. Denial of SSI benefits for 10 years to individuals found to
               have fraudulently misrepresented residence in order to obtain
               benefits simultaneously in 2 or more States.
    Sec. 202. Denial of SSI benefits for fugitive felons and probation and
               parole violators.
    Sec. 203. Treatment of prisoners.
    Sec. 204. Effective date of application for benefits.

                   Subtitle B--Benefits for Disabled Children

    Sec. 211. Definition and eligibility rules.
    Sec. 212. Eligibility redeterminations and continuing disability
               reviews.

    [[Page 110 STAT. 2106]]

    Sec. 213. Additional accountability requirements.
    Sec. 214. Reduction in cash benefits payable to institutionalized
               individuals whose medical costs are covered by private
               insurance.
    Sec. 215. Regulations.

                  Subtitle C--Additional Enforcement Provision

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

       Subtitle D--Studies Regarding Supplemental Security Income Program

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

                            TITLE III--CHILD SUPPORT

    Sec. 300. Reference to Social Security Act.

         Subtitle A--Eligibility for Services; Distribution of Payments

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

                      Subtitle B--Locate and Case Tracking

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

              Subtitle C--Streamlining and Uniformity of Procedures

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

                       Subtitle D--Paternity Establishment

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

                 Subtitle E--Program Administration and Funding

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

          Subtitle F--Establishment and Modification of Support Orders

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

                    Subtitle G--Enforcement of Support Orders

    Sec. 361. Internal Revenue Service collection of arrearages.
    Sec. 362. Authority to collect support from Federal employees.
    Sec. 363. Enforcement of child support obligations of members of the
               Armed Forces.
    Sec. 364. Voiding of fraudulent transfers.
    Sec. 365. Work requirement for persons owing past-due child support.
    Sec. 366. Definition of support order.
    Sec. 367. Reporting arrearages to credit bureaus.
    Sec. 368. Liens.

    [[Page 110 STAT. 2107]]

    Sec. 369. State law authorizing suspension of licenses.
    Sec. 370. Denial of passports for nonpayment of child support.
    Sec. 371. International support enforcement.
    Sec. 372. Financial institution data matches.
    Sec. 373. Enforcement of orders against paternal or maternal
               grandparents in cases of minor parents.
    Sec. 374. Nondischargeability in bankruptcy of certain debts for the
               support of a child.
    Sec. 375. Child support enforcement for Indian tribes.

                           Subtitle H--Medical Support

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

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

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

              Subtitle J--Effective Dates and Conforming Amendments

    Sec. 395. Effective dates and conforming amendments.

          TITLE IV--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

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

                  Subtitle A--Eligibility for Federal Benefits

    Sec. 401. Aliens who are not qualified aliens ineligible for Federal
               public benefits.
    Sec. 402. Limited eligibility of qualified aliens for certain Federal
               programs.
    Sec. 403. Five-year limited eligibility of qualified aliens for Federal
               means-tested public benefit.
    Sec. 404. Notification and information reporting.

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

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

           Subtitle C--Attribution of Income and Affidavits of Support

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

                         Subtitle D--General Provisions

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

         Subtitle E--Conforming Amendments Relating to Assisted Housing

    Sec. 441. Conforming amendments relating to assisted housing.

       Subtitle F--Earning Income Credit Denied to Unauthorized Employees

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

                            TITLE V--CHILD PROTECTION

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

                              TITLE VI--CHILD CARE

    Sec. 601. Short title and references.
    Sec. 602. Goals.

    [[Page 110 STAT. 2108]]

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

                       TITLE VII--CHILD NUTRITION PROGRAMS

                      Subtitle A--National School Lunch Act

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

                     Subtitle B--Child Nutrition Act of 1966

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

                      Subtitle C--Miscellaneous Provisions

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

               TITLE VIII--FOOD STAMPS AND COMMODITY DISTRIBUTION

                         Subtitle A--Food Stamp Program

    Sec. 801. Definition of certification period.
    Sec. 802. Definition of coupon.
    Sec. 803. Treatment of children living at home.
    Sec. 804. Adjustment of thrifty food plan.
    Sec. 805. Definition of homeless individual.
    Sec. 806. State option for eligibility standards.
    Sec. 807. Earnings of students.
    Sec. 808. Energy assistance.
    Sec. 809. Deductions from income.
    Sec. 810. Vehicle allowance.
    Sec. 811. Vendor payments for transitional housing counted as income.
    Sec. 812. Simplified calculation of income for the self-employed.
    Sec. 813. Doubled penalties for violating food stamp program
               requirements.
    Sec. 814. Disqualification of convicted individuals.
    Sec. 815. Disqualification.
    Sec. 816. Caretaker exemption.
    Sec. 817. Employment and training.

    [[Page 110 STAT. 2109]]

    Sec. 818. Food stamp eligibility.
    Sec. 819. Comparable treatment for disqualification.
    Sec. 820. Disqualification for receipt of multiple food stamp benefits.
    Sec. 821. Disqualification of fleeing felons.
    Sec. 822. Cooperation with child support agencies.
    Sec. 823. Disqualification relating to child support arrears.
    Sec. 824. Work requirement.
    Sec. 825. Encouragement of electronic benefit transfer systems.
    Sec. 826. Value of minimum allotment.
    Sec. 827. Benefits on recertification.
    Sec. 828. Optional combined allotment for expedited households.
    Sec. 829. Failure to comply with other means-tested public assistance
               programs.
    Sec. 830. Allotments for households residing in centers.
    Sec. 831. Condition precedent for approval of retail food stores and
               wholesale food concerns.
    Sec. 832. Authority to establish authorization periods.
    Sec. 833. Information for verifying eligibility for authorization.
    Sec. 834. Waiting period for stores that fail to meet authorization
               criteria.
    Sec. 835. Operation of food stamp offices.
    Sec. 836. State employee and training standards.
    Sec. 837. Exchange of law enforcement information.
    Sec. 838. Expedited coupon service.
    Sec. 839. Withdrawing fair hearing requests.
    Sec. 840. Income, eligibility, and immigration status verification
               systems.
    Sec. 841. Investigations.
    Sec. 842. Disqualification of retailers who intentionally submit
               falsified applications.
    Sec. 843. Disqualification of retailers who are disqualified under the
               WIC program.
    Sec. 844. Collection of overissuances.
    Sec. 845. Authority to suspend stores violating program requirements
               pending administrative and judicial review.
    Sec. 846. Expanded criminal forfeiture for violations.
    Sec. 847. Limitation on Federal match.
    Sec. 848. Standards for administration.
    Sec. 849. Work supplementation or support program.
    Sec. 850. Waiver authority.
    Sec. 851. Response to waivers.
    Sec. 852. Employment initiatives program.
    Sec. 853. Reauthorization.
    Sec. 854. Simplified food stamp program.
    Sec. 855. Study of the use of food stamps to purchase vitamins and
               minerals.
    Sec. 856. Deficit reduction.

                   Subtitle B--Commodity Distribution Programs

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

                 Subtitle C--Electronic Benefit Transfer Systems

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

                             TITLE IX--MISCELLANEOUS

    Sec. 901. Appropriation by State legislatures.
    Sec. 902. Sanctioning for testing positive for controlled substances.
    Sec. 903. Elimination of housing assistance with respect to fugitive
               felons and probation and parole violators.
    Sec. 904. Sense of the Senate regarding the inability of the
               noncustodial parent to pay child support.
    Sec. 905. Establishing national goals to prevent teenage pregnancies.
    Sec. 906. Sense of the Senate regarding enforcement of statutory rape
               laws.
    Sec. 907. Provisions to encourage electronic benefit transfer systems.
    Sec. 908. Reduction of block grants to States for social services; use
               of vouchers.
    Sec. 909. Rules relating to denial of earned income credit on basis of
               disqualified income.
    Sec. 910. Modification of adjusted gross income definition for earned
               income credit.
    Sec. 911. Fraud under means-tested welfare and public assistance
               programs.
    Sec. 912. Abstinence education.
    Sec. 913. Change in reference.

    [[Page 110 STAT. 2110]]

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

    SEC. 101. <<NOTE: 42 USC 601 note.>>  FINDINGS.

        The Congress makes the following findings:
                (1) Marriage is the foundation of a successful society.
                (2) Marriage is an essential institution of a successful
            society which promotes the interests of children.
                (3) Promotion of responsible fatherhood and motherhood is
            integral to successful child rearing and the well-being of
            children.
                (4) In 1992, only 54 percent of single-parent families with
            children had a child support order established and, of that 54
            percent, only about one-half received the full amount due. Of
            the cases enforced through the public child support enforcement
            system, only 18 percent of the caseload has a collection.
                (5) The number of individuals receiving aid to families with
            dependent children (in this section referred to as ``AFDC'') has
            more than tripled since 1965. More than two-thirds of these
            recipients are children. Eighty-nine percent of children
            receiving AFDC benefits now live in homes in which no father is
            present.
                        (A)(i) The average monthly number of children
                    receiving AFDC benefits--
                              (I) was 3,300,000 in 1965;
                              (II) was 6,200,000 in 1970;
                              (III) was 7,400,000 in 1980; and
                              (IV) was 9,300,000 in 1992.
                        (ii) While the number of children receiving AFDC
                    benefits increased nearly threefold between 1965 and
                    1992, the total number of children in the United States
                    aged 0 to 18 has declined by 5.5 percent.
                        (B) The Department of Health and Human Services has
                    estimated that 12,000,000 children will receive AFDC
                    benefits within 10 years.
                        (C) The increase in the number of children receiving
                    public assistance is closely related to the increase in
                    births to unmarried women. Between 1970 and 1991, the
                    percentage of live births to unmarried women increased
                    nearly threefold, from 10.7 percent to 29.5 percent.
                (6) The increase of out-of-wedlock pregnancies and births is
            well documented as follows:
                        (A) It is estimated that the rate of nonmarital teen
                    pregnancy rose 23 percent from 54 pregnancies per 1,000
                    unmarried teenagers in 1976 to 66.7 pregnancies in 1991.
                    The overall rate of nonmarital pregnancy rose 14 percent
                    from 90.8 pregnancies per 1,000 unmarried women in 1980
                    to 103 in both 1991 and 1992. In contrast, the overall
                    pregnancy rate for married couples decreased 7.3 percent
                    between 1980 and 1991, from 126.9 pregnancies per 1,000
                    married women in 1980 to 117.6 pregnancies in 1991.
                        (B) The total of all out-of-wedlock births between
                    1970 and 1991 has risen from 10.7 percent to 29.5
                    percent and

    [[Page 110 STAT. 2111]]

                    if the current trend continues, 50 percent of all births
                    by the year 2015 will be out-of-wedlock.
                (7) An effective strategy to combat teenage pregnancy must
            address the issue of male responsibility, including statutory
            rape culpability and prevention. The increase of teenage
            pregnancies among the youngest girls is particularly severe and
            is linked to predatory sexual practices by men who are
            significantly older.
                        (A) It is estimated that in the late 1980's, the
                    rate for girls age 14 and under giving birth increased
                    26 percent.
                        (B) Data indicates that at least half of the
                    children born to teenage mothers are fathered by adult
                    men. Available data suggests that almost 70 percent of
                    births to teenage girls are fathered by men over age 20.
                        (C) Surveys of teen mothers have revealed that a
                    majority of such mothers have histories of sexual and
                    physical abuse, primarily with older adult men.
                (8) The negative consequences of an out-of-wedlock birth on
            the mother, the child, the family, and society are well
            documented as follows:
                        (A) Young women 17 and under who give birth outside
                    of marriage are more likely to go on public assistance
                    and to spend more years on welfare once enrolled. These
                    combined effects of ``younger and longer'' increase
                    total AFDC costs per household by 25 percent to 30
                    percent for 17-year-olds.
                        (B) Children born out-of-wedlock have a
                    substantially higher risk of being born at a very low or
                    moderately low birth weight.
                        (C) Children born out-of-wedlock are more likely to
                    experience low verbal cognitive attainment, as well as
                    more child abuse, and neglect.
                        (D) Children born out-of-wedlock were more likely to
                    have lower cognitive scores, lower educational
                    aspirations, and a greater likelihood of becoming
                    teenage parents themselves.
                        (E) Being born out-of-wedlock significantly reduces
                    the chances of the child growing up to have an intact
                    marriage.
                        (F) Children born out-of-wedlock are 3 times more
                    likely to be on welfare when they grow up.
                (9) Currently 35 percent of children in single-parent homes
            were born out-of-wedlock, nearly the same percentage as that of
            children in single-parent homes whose parents are divorced (37
            percent). While many parents find themselves, through divorce or
            tragic circumstances beyond their control, facing the difficult
            task of raising children alone, nevertheless, the negative
            consequences of raising children in single-parent homes are well
            documented as follows:
                        (A) Only 9 percent of married-couple families with
                    children under 18 years of age have income below the
                    national poverty level. In contrast, 46 percent of
                    female-headed households with children under 18 years of
                    age are below the national poverty level.
                        (B) Among single-parent families, nearly \1/2\ of
                    the mothers who never married received AFDC while only
                    \1/5\ of divorced mothers received AFDC.

    [[Page 110 STAT. 2112]]

                        (C) Children born into families receiving welfare
                    assistance are 3 times more likely to be on welfare when
                    they reach adulthood than children not born into
                    families receiving welfare.
                        (D) Mothers under 20 years of age are at the
                    greatest risk of bearing low birth weight babies.
                        (E) The younger the single-parent mother, the less
                    likely she is to finish high school.
                        (F) Young women who have children before finishing
                    high school are more likely to receive welfare
                    assistance for a longer period of time.
                        (G) Between 1985 and 1990, the public cost of births
                    to teenage mothers under the aid to families with
                    dependent children program, the food stamp program, and
                    the medicaid program has been estimated at
                    $120,000,000,000.
                        (H) The absence of a father in the life of a child
                    has a negative effect on school performance and peer
                    adjustment.
                        (I) Children of teenage single parents have lower
                    cognitive scores, lower educational aspirations, and a
                    greater likelihood of becoming teenage parents
                    themselves.
                        (J) Children of single-parent homes are 3 times more
                    likely to fail and repeat a year in grade school than
                    are children from intact 2-parent families.
                        (K) Children from single-parent homes are almost 4
                    times more likely to be expelled or suspended from
                    school.
                        (L) Neighborhoods with larger percentages of youth
                    aged 12 through 20 and areas with higher percentages of
                    single-parent households have higher rates of violent
                    crime.
                        (M) Of those youth held for criminal offenses within
                    the State juvenile justice system, only 29.8 percent
                    lived primarily in a home with both parents. In contrast
                    to these incarcerated youth, 73.9 percent of the
                    62,800,000 children in the Nation's resident population
                    were living with both parents.
                (10) Therefore, in light of this demonstration of the crisis
            in our Nation, it is the sense of the Congress that prevention
            of out-of-wedlock pregnancy and reduction in out-of-wedlock
            birth are very important Government interests and the policy
            contained in part A of title IV of the Social Security Act (as
            amended by section 103(a) of this Act) is intended to address
            the crisis.

    SEC. 102. REFERENCE TO SOCIAL SECURITY ACT.

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

    SEC. 103. BLOCK GRANTS TO STATES.

        (a) In General.--Part A of title IV (42 U.S.C. 601 et seq.) is
    amended--
                (1) by striking all that precedes <<NOTE: 42 USC prec. 601,
            601-610, 612, 613, 615-617.>>  section 418 (as added by section
            603(b)(2) of this Act) and inserting the following:

    [[Page 110 STAT. 2113]]

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

    ``SEC. 401. <<NOTE: 42 USC 601.>>  PURPOSE.

        ``(a) In General.--The purpose of this part is to increase the
    flexibility of States in operating a program designed to--
                ``(1) provide assistance to needy families so that children
            may be cared for in their own homes or in the homes of
            relatives;
                ``(2) end the dependence of needy parents on government
            benefits by promoting job preparation, work, and marriage;
                ``(3) prevent and reduce the incidence of out-of-wedlock
            pregnancies and establish annual numerical goals for preventing
            and reducing the incidence of these pregnancies; and
                ``(4) encourage the formation and maintenance of two-parent
            families.

        ``(b) No Individual Entitlement.--This part shall not be interpreted
    to entitle any individual or family to assistance under any State
    program funded under this part.

    ``SEC. 402. <<NOTE: 42 USC 602.>>  ELIGIBLE STATES; STATE PLAN.

        ``(a) In General.--As used in this part, the term `eligible State'
    means, with respect to a fiscal year, a State that, during the 2-year
    period immediately preceding the fiscal year, has submitted to the
    Secretary a plan that the Secretary has found includes the following:
                ``(1) Outline of family assistance program.--
                        ``(A) General provisions.--A written document that
                    outlines how the State intends to do the following:
                              ``(i) Conduct a program, designed to serve all
                          political subdivisions in the State (not
                          necessarily in a uniform manner), that provides
                          assistance to needy families with (or expecting)
                          children and provides parents with job
                          preparation, work, and support services to enable
                          them to leave the program and become self-
                          sufficient.
                              ``(ii) Require a parent or caretaker receiving
                          assistance under the program to engage in work (as
                          defined by the State) once the State determines
                          the parent or caretaker is ready to engage in
                          work, or once the parent or caretaker has received
                          assistance under the program for 24 months
                          (whether or not consecutive), whichever is
                          earlier.
                              ``(iii) Ensure that parents and caretakers
                          receiving assistance under the program engage in
                          work activities in accordance with section 407.
                              ``(iv) Take such reasonable steps as the State
                          deems necessary to restrict the use and disclosure
                          of information about individuals and families
                          receiving assistance under the program
                          attributable to funds provided by the Federal
                          Government.
                              ``(v) Establish goals and take action to
                          prevent and reduce the incidence of out-of-wedlock
                          pregnancies, with special emphasis on teenage
                          pregnancies, and establish numerical goals for
                          reducing the illegitimacy

    [[Page 110 STAT. 2114]]

                          ratio of the State (as defined in section
                          403(a)(2)(B)) for calendar years 1996 through
                          2005.
                              ``(vi) Conduct a program, designed to reach
                          State and local law enforcement officials, the
                          education system, and relevant counseling
                          services, that provides education and training on
                          the problem of statutory rape so that teenage
                          pregnancy prevention programs may be expanded in
                          scope to include men.
                        ``(B) Special provisions.--
                              ``(i) The document shall indicate whether the
                          State intends to treat families moving into the
                          State from another State differently than other
                          families under the program, and if so, how the
                          State intends to treat such families under the
                          program.
                              ``(ii) The document shall indicate whether the
                          State intends to provide assistance under the
                          program to individuals who are not citizens of the
                          United States, and if so, shall include an
                          overview of such assistance.
                              ``(iii) The document shall set forth objective
                          criteria for the delivery of benefits and the
                          determination of eligibility and for fair and
                          equitable treatment, including an explanation of
                          how the State will provide opportunities for
                          recipients who have been adversely affected to be
                          heard in a State administrative or appeal process.
                              ``(iv) Not later than 1 year after the date of
                          enactment of this Act, unless the chief executive
                          officer of the State opts out of this provision by
                          notifying the Secretary, a State shall, consistent
                          with the exception provided in section 407(e)(2),
                          require a parent or caretaker receiving assistance
                          under the program who, after receiving such
                          assistance for 2 months is not exempt from work
                          requirements and is not engaged in work, as
                          determined under section 407(c), to participate in
                          community service employment, with minimum hours
                          per week and tasks to be determined by the State.
                ``(2) Certification that the state will operate a child
            support enforcement program.--A certification by the chief
            executive officer of the State that, during the fiscal year, the
            State will operate a child support enforcement program under the
            State plan approved under part D.
                ``(3) Certification that the state will operate a foster
            care and adoption assistance program.--A certification by the
            chief executive officer of the State that, during the fiscal
            year, the State will operate a foster care and adoption
            assistance program under the State plan approved under part E,
            and that the State will take such actions as are necessary to
            ensure that children receiving assistance under such part are
            eligible for medical assistance under the State plan under title
            XIX.
                ``(4) Certification of the administration of the program.--A
            certification by the chief executive officer of the State
            specifying which State agency or agencies will administer and
            supervise the program referred to in paragraph (1) for the
            fiscal year, which shall include assurances that local
            governments and private sector organizations--

    [[Page 110 STAT. 2115]]

                        ``(A) have been consulted regarding the plan and
                    design of welfare services in the State so that services
                    are provided in a manner appropriate to local
                    populations; and
                        ``(B) have had at least 45 days to submit comments
                    on the plan and the design of such services.
                ``(5) Certification that the state will provide indians with
            equitable access to assistance.--A certification by the chief
            executive officer of the State that, during the fiscal year, the
            State will provide each member of an Indian tribe, who is
            domiciled in the State and is not eligible for assistance under
            a tribal family assistance plan approved under section 412, with
            equitable access to assistance under the State program funded
            under this part attributable to funds provided by the Federal
            Government.
                ``(6) Certification of standards and procedures to ensure
            against program fraud and abuse.--A certification by the chief
            executive officer of the State that the State has established
            and is enforcing standards and procedures to ensure against
            program fraud and abuse, including standards and procedures
            concerning nepotism, conflicts of interest among individuals
            responsible for the administration and supervision of the State
            program, kickbacks, and the use of political
            patronage.
                ``(7) Optional certification of standards and procedures to
            ensure that the state will screen for and identify domestic
            violence.--
                        ``(A) In general.--At the option of the State, a
                    certification by the chief executive officer of the
                    State that the State has established and is enforcing
                    standards and procedures to--
                              ``(i) screen and identify individuals
                          receiving assistance under this part with a
                          history of domestic violence while maintaining the
                          confidentiality of such
                          individuals;
                              ``(ii) refer such individuals to counseling
                          and supportive services; and
                              ``(iii) waive, pursuant to a determination of
                          good cause, other program requirements such as
                          time limits (for so long as necessary) for
                          individuals receiving assistance, residency
                          requirements, child support cooperation
                          requirements, and family cap provisions, in cases
                          where compliance with such requirements would make
                          it more difficult for individuals receiving
                          assistance under this part to escape domestic
                          violence or unfairly penalize such individuals who
                          are or have been victimized by such violence, or
                          individuals who are at risk of further domestic
                          violence.
                        ``(B) Domestic violence defined.--For purposes of
                    this paragraph, the term `domestic violence' has the
                    same meaning as the term `battered or subjected to
                    extreme cruelty', as defined in section
                    408(a)(7)(C)(iii).

        ``(b) Public Availability of State Plan Summary.--The State shall
    make available to the public a summary of any plan submitted by the
    State under this section.

    ``SEC. 403. <<NOTE: 42 USC 603.>>  GRANTS TO STATES.

        ``(a) Grants.--

    [[Page 110 STAT. 2116]]

                ``(1) Family assistance grant.--
                        ``(A) In general.--Each eligible State shall be
                    entitled to receive from the Secretary, for each of
                    fiscal years 1996, 1997, 1998, 1999, 2000, 2001, and
                    2002, a grant in an amount equal to the State family
                    assistance grant.
                        ``(B) State family assistance grant defined.--As
                    used in this part, the term `State family assistance
                    grant' means the greatest of--
                              ``(i) \1/3\ of the total amount required to be
                          paid to the State under former section 403 (as in
                          effect on September 30, 1995) for fiscal years
                          1992, 1993, and 1994 (other than with respect to
                          amounts expended by the State for child care under
                          subsection (g) or (i) of former section 402 (as so
                          in effect));
                              ``(ii)(I) the total amount required to be paid
                          to the State under former section 403 for fiscal
                          year 1994 (other than with respect to amounts
                          expended by the State for child care under
                          subsection (g) or (i) of former section 402 (as so
                          in effect)); plus
                              ``(II) an amount equal to 85 percent of the
                          amount (if any) by which the total amount required
                          to be paid to the State under former section
                          403(a)(5) for emergency assistance for fiscal year
                          1995 exceeds the total amount required to be paid
                          to the State under former section 403(a)(5) for
                          fiscal year 1994, if, during fiscal year 1994 or
                          1995, the Secretary approved under former section
                          402 an amendment to the former State plan with
                          respect to the provision of emergency assistance;
                          or
                              ``(iii) \4/3\ of the total amount required to
                          be paid to the State under former section 403 (as
                          in effect on September 30, 1995) for the 1st 3
                          quarters of fiscal year 1995 (other than with
                          respect to amounts expended by the State under the
                          State plan approved under part F (as so in effect)
                          or for child care under subsection (g) or (i) of
                          former section 402 (as so in effect)), plus the
                          total amount required to be paid to the State for
                          fiscal year 1995 under former section 403(l) (as
                          so in effect).
                        ``(C) Total amount required to be paid to the state
                    under former section 403 defined.--As used in this part,
                    the term `total amount required to be paid to the State
                    under former section 403' means, with respect to a
                    fiscal year--
                              ``(i) in the case of a State to which section
                          1108 does not apply, the sum of--
                                        ``(I) the Federal share of
                                    maintenance assistance expenditures for
                                    the fiscal year, before reduction
                                    pursuant to subparagraph (B) or (C) of
                                    section 403(b)(2) (as in effect on
                                    September 30, 1995), as reported by the
                                    State on ACF Form 231;
                                        ``(II) the Federal share of
                                    administrative expenditures (including
                                    administrative expenditures for the
                                    development of management information
                                    systems) for the fiscal year, as
                                    reported by the State on ACF Form 231;

    [[Page 110 STAT. 2117]]

                                        ``(III) the Federal share of
                                    emergency assistance expenditures for
                                    the fiscal year, as reported by the
                                    State on ACF Form 231;
                                        ``(IV) the Federal share of
                                    expenditures for the fiscal year with
                                    respect to child care pursuant to
                                    subsections (g) and (i) of former
                                    section 402 (as in effect on September
                                    30, 1995), as reported by the State on
                                    ACF Form 231; and
                                        ``(V) the Federal obligations made
                                    to the State under section 403 for the
                                    fiscal year with respect to the State
                                    program operated under part F (as in
                                    effect on September 30, 1995), as
                                    determined by the Secretary, including
                                    additional obligations or reductions in
                                    obligations made after the close of the
                                    fiscal year; and
                              ``(ii) in the case of a State to which section
                          1108 applies, the lesser of--
                                        ``(I) the sum described in clause
                                    (i); or
                                        ``(II) the total amount certified by
                                    the Secretary under former section 403
                                    (as in effect during the fiscal year)
                                    with respect to the territory.
                        ``(D) Information to be used in determining
                    amounts.--
                              ``(i) For fiscal years 1992 and 1993.--
                                        ``(I) In determining the amounts
                                    described in subclauses (I) through (IV)
                                    of subparagraph (C)(i) for any State for
                                    each of fiscal years 1992 and 1993, the
                                    Secretary shall use information
                                    available as of April 28, 1995.
                                        ``(II) In determining the amount
                                    described in subparagraph (C)(i)(V) for
                                    any State for each of fiscal years 1992
                                    and 1993, the Secretary shall use
                                    information available as of January 6,
                                    1995.
                              ``(ii) For fiscal year 1994.--In determining
                          the amounts described in subparagraph (C)(i) for
                          any State for fiscal year 1994, the Secretary
                          shall use information available as of April 28,
                          1995.
                              ``(iii) For fiscal year 1995.--
                                        ``(I) In determining the amount
                                    described in subparagraph (B)(ii)(II)
                                    for any State for fiscal year 1995, the
                                    Secretary shall use the information
                                    which was reported by the States and
                                    estimates made by the States with
                                    respect to emergency assistance
                                    expenditures and was available as of
                                    August 11, 1995.
                                        ``(II) In determining the amounts
                                    described in subclauses (I) through
                                    (III) of subparagraph (C)(i) for any
                                    State for fiscal year 1995, the
                                    Secretary shall use information
                                    available as of October 2, 1995.
                                        ``(III) In determining the amount
                                    described in subparagraph (C)(i)(IV) for
                                    any State for fiscal year 1995, the
                                    Secretary shall use information
                                    available as of February 28, 1996.
                                        ``(IV) In determining the amount
                                    described in subparagraph (C)(i)(V) for
                                    any State for fiscal year

    [[Page 110 STAT. 2118]]

                                    1995, the Secretary shall use
                                    information available as of October 5,
                                    1995.
                        ``(E) Appropriation.--Out of any money in the
                    Treasury of the United States not otherwise
                    appropriated, there are appropriated for fiscal years
                    1996, 1997, 1998, 1999, 2000, 2001, and 2002 such sums
                    as are necessary for grants under this paragraph.
                ``(2) Bonus to reward decrease in illegitimacy.--
                        ``(A) In general.--Each eligible State shall be
                    entitled to receive from the Secretary a grant for each
                    bonus year for which the State demonstrates a net
                    decrease in out-of-wedlock births.
                        ``(B) Amount of grant.--
                              ``(i) If 5 eligible states.--If there are 5
                          eligible States for a bonus year, the amount of
                          the grant shall be $20,000,000.
                              ``(ii) If fewer than 5 eligible states.--If
                          there are fewer than 5 eligible States for a bonus
                          year, the amount of the grant shall be
                          $25,000,000.
                        ``(C) Definitions.--As used in this paragraph:
                              ``(i) Eligible state.--
                                        ``(I) In general.--The term
                                    `eligible State' means a State that the
                                    Secretary determines meets the following
                                    requirements:
                                                ``(aa) The State
                                            demonstrates that the number of
                                            out-of-wedlock births that
                                            occurred in the State during the
                                            most recent 2-year period for
                                            which such information is
                                            available decreased as compared
                                            to the number of such births
                                            that occurred during the
                                            previous 2-year period, and the
                                            magnitude of the decrease for
                                            the State for the period is not
                                            exceeded by the magnitude of the
                                            corresponding decrease for 5 or
                                            more other States for the
                                            period.
                                                ``(bb) The rate of induced
                                            pregnancy terminations in the
                                            State for the fiscal year is
                                            less than the rate of induced
                                            pregnancy terminations in the
                                            State for fiscal year 1995.
                                        ``(II) Disregard of changes in data
                                    due to changed reporting methods.--In
                                    making the determination required by
                                    subclause (I), the Secretary shall
                                    disregard--
                                                ``(aa) any difference
                                            between the number of out-of-
                                            wedlock births that occurred in
                                            a State for a fiscal year and
                                            the number of out-of-wedlock
                                            births that occurred in a State
                                            for fiscal year 1995 which is
                                            attributable to a change in
                                            State methods of reporting data
                                            used to calculate the number of
                                            out-of-wedlock births; and
                                                ``(bb) any difference
                                            between the rate of induced
                                            pregnancy terminations in a
                                            State for a fiscal year and such
                                            rate for fiscal year 1995 which
                                            is attributable to a change in
                                            State methods of reporting data
                                            used to calculate such rate.

    [[Page 110 STAT. 2119]]

                              ``(ii) Bonus year.--The term `bonus year'
                          means fiscal years 1999, 2000, 2001, and 2002.
                        ``(D) Appropriation.--Out of any money in the
                    Treasury of the United States not otherwise
                    appropriated, there are appropriated for fiscal years
                    1999 through 2002, such sums as are necessary for grants
                    under this paragraph.
                ``(3) Supplemental grant for population increases in certain
            states.--
                        ``(A) In general.--Each qualifying State shall,
                    subject to subparagraph (F), be entitled to receive from
                    the Secretary--
                              ``(i) for fiscal year 1998 a grant in an
                          amount equal to 2.5 percent of the total amount
                          required to be paid to the State under former
                          section 403 (as in effect during fiscal year 1994)
                          for fiscal year 1994; and
                              ``(ii) for each of fiscal years 1999, 2000,
                          and 2001, a grant in an amount equal to the sum
                          of--
                                        ``(I) the amount (if any) required
                                    to be paid to the State under this
                                    paragraph for the immediately preceding
                                    fiscal year; and
                                        ``(II) 2.5 percent of the sum of--
                                                ``(aa) the total amount
                                            required to be paid to the State
                                            under former section 403 (as in
                                            effect during fiscal year 1994)
                                            for fiscal year 1994; and
                                                ``(bb) the amount (if any)
                                            required to be paid to the State
                                            under this paragraph for the
                                            fiscal year preceding the fiscal
                                            year for which the grant is to
                                            be made.
                        ``(B) Preservation of grant without increases for
                    states failing to remain qualifying states.--Each State
                    that is not a qualifying State for a fiscal year
                    specified in subparagraph (A)(ii) but was a qualifying
                    State for a prior fiscal year shall, subject to
                    subparagraph (F), be entitled to receive from the
                    Secretary for the specified fiscal year, a grant in an
                    amount equal to the amount required to be paid to the
                    State under this paragraph for the most recent fiscal
                    year for which the State was a qualifying State.
                        ``(C) Qualifying state.--
                              ``(i) In general.--For purposes of this
                          paragraph, a State is a qualifying State for a
                          fiscal year if--
                                        ``(I) the level of welfare spending
                                    per poor person by the State for the
                                    immediately preceding fiscal year is
                                    less than the national average level of
                                    State welfare spending per poor person
                                    for such preceding fiscal year; and
                                        ``(II) the population growth rate of
                                    the State (as determined by the Bureau
                                    of the Census) for the most recent
                                    fiscal year for which information is
                                    available exceeds the average population
                                    growth rate for all States (as so
                                    determined) for such most recent fiscal
                                    year.
                              ``(ii) State must qualify in fiscal year
                          1997.--Notwithstanding clause (i), a State shall
                          not be a qualifying State for any fiscal year
                          after 1998 by reason

    [[Page 110 STAT. 2120]]

                          of clause (i) if the State is not a qualifying
                          State for fiscal year 1998 by reason of clause
                          (i).
                              ``(iii) Certain states deemed qualifying
                          states.--For purposes of this paragraph, a State
                          is deemed to be a qualifying State for fiscal
                          years 1998, 1999, 2000, and 2001 if--
                                        ``(I) the level of welfare spending
                                    per poor person by the State for fiscal
                                    year 1994 is less than 35 percent of the
                                    national average level of State welfare
                                    spending per poor person for fiscal year
                                    1994; or
                                        ``(II) the population of the State
                                    increased by more than 10 percent from
                                    April 1, 1990 to July 1, 1994, according
                                    to the population estimates in
                                    publication CB94-204 of the Bureau of
                                    the Census.
                        ``(D) Definitions.--As used in this paragraph:
                              ``(i) Level of welfare spending per poor
                          person.--The term `level of State welfare spending
                          per poor person' means, with respect to a State
                          and a fiscal year--
                                        ``(I) the sum of--
                                                ``(aa) the total amount
                                            required to be paid to the State
                                            under former section 403 (as in
                                            effect during fiscal year 1994)
                                            for fiscal year 1994; and
                                                ``(bb) the amount (if any)
                                            paid to the State under this
                                            paragraph for the immediately
                                            preceding fiscal year; divided
                                            by
                                        ``(II) the number of individuals,
                                    according to the 1990 decennial census,
                                    who were residents of the State and
                                    whose income was below the poverty line.
                              ``(ii) National average level of state welfare
                          spending per poor person.--The term `national
                          average level of State welfare spending per poor
                          person' means, with respect to a fiscal year, an
                          amount
                          equal to--
                                        ``(I) the total amount required to
                                    be paid to the States under former
                                    section 403 (as in effect during fiscal
                                    year 1994) for fiscal year 1994; divided
                                    by
                                        ``(II) the number of individuals,
                                    according to the 1990 decennial census,
                                    who were residents of any State and
                                    whose income was below the poverty line.
                              ``(iii) State.--The term `State' means each of
                          the 50 States of the United States and the
                          District of Columbia.
                        ``(E) Appropriation.--Out of any money in the
                    Treasury of the United States not otherwise
                    appropriated, there are appropriated for fiscal years
                    1998, 1999, 2000, and 2001 such sums as are necessary
                    for grants under this paragraph, in a total amount not
                    to exceed $800,000,000.
                        ``(F) Grants reduced pro rata if insufficient
                    appropriations.--If the amount appropriated pursuant to
                    this paragraph for a fiscal year is less than the total
                    amount

    [[Page 110 STAT. 2121]]

                    of payments otherwise required to be made under this
                    paragraph for the fiscal year, then the amount otherwise
                    payable to any State for the fiscal year under this
                    paragraph shall be reduced by a percentage equal to the
                    amount so appropriated divided by such total amount.
                        ``(G) Budget scoring.--Notwithstanding section
                    257(b)(2) of the Balanced Budget and Emergency Deficit
                    Control Act of 1985, the baseline shall assume that no
                    grant shall be made under this paragraph after fiscal
                    year 2001.
                ``(4) Bonus to reward high performance states.--
                        ``(A) In general.--The Secretary shall make a grant
                    pursuant to this paragraph to each State for each bonus
                    year for which the State is a high performing State.
                        ``(B) Amount of grant.--
                              ``(i) In general.--Subject to clause (ii) of
                          this subparagraph, the Secretary shall determine
                          the amount of the grant payable under this
                          paragraph to a high performing State for a bonus
                          year, which shall be based on the score assigned
                          to the State under subparagraph (D)(i) for the
                          fiscal year that immediately precedes the bonus
                          year.
                              ``(ii) Limitation.--The amount payable to a
                          State under this paragraph for a bonus year shall
                          not exceed 5 percent of the State family
                          assistance grant.
                        ``(C) Formula for measuring state performance.--Not
                    later than 1 year after the date of the enactment of the
                    Personal Responsibility and Work Opportunity
                    Reconciliation Act of 1996, the Secretary, in
                    consultation with the National Governors' Association
                    and the American Public Welfare Association, shall
                    develop a formula for measuring State performance in
                    operating the State program funded under this part so as
                    to achieve the goals set forth in section 401(a).
                        ``(D) Scoring of state performance; setting of
                    performance thresholds.--For each bonus year, the
                    Secretary shall--
                              ``(i) use the formula developed under
                          subparagraph (C) to assign a score to each
                          eligible State for the fiscal year that
                          immediately precedes the bonus
                          year; and
                              ``(ii) prescribe a performance threshold in
                          such a manner so as to ensure that--
                                        ``(I) the average annual total
                                    amount of grants to be made under this
                                    paragraph for each bonus year equals
                                    $200,000,000; and
                                        ``(II) the total amount of grants to
                                    be made under this paragraph for all
                                    bonus years equals $1,000,000,000.
                        ``(E) Definitions.--As used in this paragraph:
                              ``(i) Bonus year.--The term `bonus year' means
                          fiscal years 1999, 2000, 2001, 2002, and 2003.
                              ``(ii) High performing state.--The term `high
                          performing State' means, with respect to a bonus
                          year, an eligible State whose score assigned
                          pursuant to subparagraph (D)(i) for the fiscal
                          year immediately preceding the bonus year equals
                          or exceeds the

    [[Page 110 STAT. 2122]]

                          performance threshold prescribed under
                          subparagraph (D)(ii) for such preceding fiscal
                          year.
                        ``(F) Appropriation.--Out of any money in the
                    Treasury of the United States not otherwise
                    appropriated, there are appropriated for fiscal years
                    1999 through 2003 $1,000,000,000 for grants under this
                    paragraph.

        ``(b) Contingency Fund.--
                ``(1) Establishment.--There is hereby established in the
            Treasury of the United States a fund which shall be known as the
            `Contingency Fund for State Welfare Programs' (in this section
            referred to as the `Fund').
                ``(2) Deposits into fund.--Out of any money in the Treasury
            of the United States not otherwise appropriated, there are
            appropriated for fiscal years 1997, 1998, 1999, 2000, and 2001
            such sums as are necessary for payment to the Fund in a total
            amount not to exceed $2,000,000,000.
                ``(3) Grants.--
                        ``(A) Provisional payments.--If an eligible State
                    submits to the Secretary a request for funds under this
                    paragraph during an eligible month, the Secretary shall,
                    subject to this paragraph, pay to the State, from
                    amounts appropriated pursuant to paragraph (2), an
                    amount equal to the amount of funds so requested.
                        ``(B) Payment priority.--The Secretary shall make
                    payments under subparagraph (A) in the order in which
                    the Secretary receives requests for such payments.
                        ``(C) Limitations.--
                              ``(i) Monthly payment to a state.--The total
                          amount paid to a single State under subparagraph
                          (A) during a month shall not exceed \1/12\ of 20
                          percent of the State family assistance grant.
                              ``(ii) Payments to all states.--The total
                          amount paid to all States under subparagraph (A)
                          during fiscal years 1997 through 2001 shall not
                          exceed the total amount appropriated pursuant to
                          paragraph (2).
                ``(4) Annual reconciliation.--Notwithstanding paragraph (3),
            at the end of each fiscal year, each State shall remit to the
            Secretary an amount equal to the amount (if any) by which the
            total amount paid to the State under paragraph (3) during the
            fiscal year exceeds--
                        ``(A) the Federal medical assistance percentage for
                    the State for the fiscal year (as defined in section
                    1905(b), as in effect on September 30, 1995) of the
                    amount (if any) by which--
                              ``(i) if the Secretary makes a payment to the
                          State under section 418(a)(2) in the fiscal year--
                                        ``(I) the expenditures under the
                                    State program funded under this part for
                                    the fiscal year, excluding any amounts
                                    made available by the Federal Government
                                    (except amounts paid to the State under
                                    paragraph (3) during the fiscal year
                                    that have been expended by the State)
                                    and any amounts expended by the State
                                    during the fiscal year for child care;
                                    exceeds
                                        ``(II) historic State expenditures
                                    (as defined in section
                                    409(a)(7)(B)(iii)), excluding the
                                    expenditures by the State for child care
                                    under subsection

    [[Page 110 STAT. 2123]]

                                    (g) or (i) of section 402 (as in effect
                                    during fiscal year 1994) for fiscal year
                                    1994 minus any Federal payment with
                                    respect to such child care expenditures;
                                    or
                              ``(ii) if the Secretary does not make a
                          payment to the State under section 418(a)(2) in
                          the fiscal year--
                                        ``(I) the expenditures under the
                                    State program funded under this part for
                                    the fiscal year (excluding any amounts
                                    made available by the Federal
                                    Government, except amounts paid to the
                                    State under paragraph (3) during the
                                    fiscal year that have been expended by
                                    the State); exceeds
                                        ``(II) historic State expenditures
                                    (as defined in section
                                    409(a)(7)(B)(iii)); multiplied by
                        ``(B) \1/12\ times the number of months during the
                    fiscal year for which the Secretary makes a payment to
                    the State under this subsection.
                ``(5) Eligible month.--As used in paragraph (3)(A), the term
            `eligible month' means, with respect to a State, a month in the
            2-month period that begins with any month for which the State is
            a needy State.
                ``(6) Needy state.--For purposes of paragraph (5), a State
            is a needy State for a month if--
                        ``(A) the average rate of--
                              ``(i) total unemployment in such State
                          (seasonally adjusted) for the period consisting of
                          the most recent 3 months for which data for all
                          States are published equals or exceeds 6.5
                          percent; and
                              ``(ii) total unemployment in such State
                          (seasonally adjusted) for the 3-month period
                          equals or exceeds 110 percent of such average rate
                          for either (or both) of the corresponding 3-month
                          periods ending in the 2 preceding calendar years;
                          or
                        ``(B) as determined by the Secretary of Agriculture
                    (in the discretion of the Secretary of Agriculture), the
                    monthly average number of individuals (as of the last
                    day of each month) participating in the food stamp
                    program in the State in the then most recently concluded
                    3-month period for which data are available exceeds by
                    not less than 10 percent the lesser of--
                              ``(i) the monthly average number of
                          individuals (as of the last day of each month) in
                          the State that would have participated in the food
                          stamp program in the corresponding 3-month period
                          in fiscal year 1994 if the amendments made by
                          titles IV and VIII of the Personal Responsibility
                          and Work Opportunity Reconciliation Act of 1996
                          had been in effect throughout fiscal year 1994; or
                              ``(ii) the monthly average number of
                          individuals (as of the last day of each month) in
                          the State that would have participated in the food
                          stamp program in the corresponding 3-month period
                          in fiscal year 1995 if the amendments made by
                          titles IV and VIII of the Personal Responsibility
                          and Work Opportunity Reconciliation Act of 1996
                          had been in effect throughout fiscal year 1995.
                ``(7) Other terms defined.--As used in this subsection:

    [[Page 110 STAT. 2124]]

                        ``(A) State.--The term `State' means each of the 50
                    States of the United States and the District of
                    Columbia.
                        ``(B) Secretary.--The term `Secretary' means the
                    Secretary of the Treasury.
                ``(8) Annual reports.--The Secretary shall annually report
            to the Congress on the status of the Fund.

    ``SEC. 404. <<NOTE: 42 USC 604.>>  USE OF GRANTS.

        ``(a) General Rules.--Subject to this part, a State to which a grant
    is made under section 403 may use the grant--
                ``(1) in any manner that is reasonably calculated to
            accomplish the purpose of this part, including to provide low
            income households with assistance in meeting home heating and
            cooling costs; or
                ``(2) in any manner that the State was authorized to use
            amounts received under part A or F, as such parts were in effect
            on September 30, 1995.

        ``(b) Limitation on Use of Grant for Administrative
    Purposes.--
                ``(1) Limitation.--A State to which a grant is made under
            section 403 shall not expend more than 15 percent of the grant
            for administrative purposes.
                ``(2) Exception.--Paragraph (1) shall not apply to the use
            of a grant for information technology and computerization needed
            for tracking or monitoring required by or under this part.

        ``(c) Authority To Treat Interstate Immigrants Under Rules of Former
    State.--A State operating a program funded under this part may apply to
    a family the rules (including benefit amounts) of the program funded
    under this part of another State if the family has moved to the State
    from the other State and has resided in the State for less than 12
    months.
        ``(d) Authority To Use Portion of Grant for Other Purposes.--
                ``(1) In general.--A State may use not more than 30 percent
            of the amount of any grant made to the State under section
            403(a) for a fiscal year to carry out a State program pursuant
            to any or all of the following provisions of law:
                        ``(A) Title XX of this Act.
                        ``(B) The Child Care and Development Block Grant Act
                    of 1990.
                ``(2) Limitation on amount transferable to title xx
            programs.--Notwithstanding paragraph (1), not more than \1/3\ of
            the total amount paid to a State under this part for a fiscal
            year that is used to carry out State programs pursuant to
            provisions of law specified in paragraph (1) may be used to
            carry out State programs pursuant to title XX.
                ``(3) Applicable rules.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B) of this paragraph, any amount paid to a
                    State under this part that is used to carry out a State
                    program pursuant to a provision of law specified in
                    paragraph (1) shall not be subject to the requirements
                    of this part, but shall be subject to the requirements
                    that apply to Federal funds provided directly under the
                    provision of law to carry out the program, and the
                    expenditure of any amount so used

    [[Page 110 STAT. 2125]]

                    shall not be considered to be an expenditure under this
                    part.
                        ``(B) Exception relating to title xx programs.--All
                    amounts paid to a State under this part that are used to
                    carry out State programs pursuant to title XX shall be
                    used only for programs and services to children or their
                    families whose income is less than 200 percent of the
                    income official poverty line (as defined by the Office
                    of Management and Budget, and revised annually in
                    accordance with section 673(2) of the Omnibus Budget
                    Reconciliation Act of 1981) applicable to a family of
                    the size involved.

        ``(e) Authority to Reserve Certain Amounts for Assistance.--A State
    may reserve amounts paid to the State under this part for any fiscal
    year for the purpose of providing, without fiscal year limitation,
    assistance under the State program funded under this part.
        ``(f) Authority to Operate Employment Placement
    Program.--A State to which a grant is made under section 403 may use the
    grant to make payments (or provide job placement vouchers) to State-
    approved public and private job placement agencies that provide
    employment placement services to individuals who receive assistance
    under the State program funded under this part.
        ``(g) Implementation of Electronic Benefit Transfer
    System.--A State to which a grant is made under section 403 is
    encouraged to implement an electronic benefit transfer system for
    providing assistance under the State program funded under this part, and
    may use the grant for such purpose.
        ``(h) Use of Funds for Individual Development Accounts.--
                ``(1) In general.--A State to which a grant is made under
            section 403 may use the grant to carry out a program to fund
            individual development accounts (as defined in paragraph (2))
            established by individuals eligible for assistance under the
            State program funded under this part.
                ``(2) Individual development accounts.--
                        ``(A) Establishment.--Under a State program carried
                    out under paragraph (1), an individual development
                    account may be established by or on behalf of an
                    individual eligible for assistance under the State
                    program operated under this part for the purpose of
                    enabling the individual to accumulate funds for a
                    qualified purpose described in subparagraph (B).
                        ``(B) Qualified purpose.--A qualified purpose
                    described in this subparagraph is 1 or more of the
                    following, as provided by the qualified entity providing
                    assistance to the individual under this subsection:
                              ``(i) Postsecondary educational expenses.--
                          Postsecondary educational expenses paid from an
                          individual development account directly to an
                          eligible educational institution.
                              ``(ii) First home purchase.--Qualified
                          acquisition costs with respect to a qualified
                          principal residence for a qualified first-time
                          homebuyer, if paid from an individual development
                          account directly to the persons to whom the
                          amounts are due.

    [[Page 110 STAT. 2126]]

                              ``(iii) Business capitalization.--Amounts paid
                          from an individual development account directly to
                          a business capitalization account which is
                          established in a federally insured financial
                          institution and is restricted to use solely for
                          qualified business capitalization expenses.
                        ``(C) Contributions to be from earned income.--An
                    individual may only contribute to an individual
                    development account such amounts as are derived from
                    earned income, as defined in section 911(d)(2) of the
                    Internal Revenue Code of 1986.
                        ``(D) Withdrawal of funds.--The
                    Secretary <<NOTE: Regulations.>>  shall establish such
                    regulations as may be necessary to ensure that funds
                    held in an individual development account are not
                    withdrawn except for 1 or more of the qualified purposes
                    described in subparagraph (B).
                ``(3) Requirements.--
                        ``(A) In general.--An individual development account
                    established under this subsection shall be a trust
                    created or organized in the United States and funded
                    through periodic contributions by the establishing
                    individual and matched by or through a qualified entity
                    for a qualified purpose (as described in paragraph
                    (2)(B)).
                        ``(B) Qualified entity.--As used in this subsection,
                    the term `qualified entity' means--
                              ``(i) a not-for-profit organization described
                          in section 501(c)(3) of the Internal Revenue Code
                          of 1986 and exempt from taxation under section
                          501(a) of such Code; or
                              ``(ii) a State or local government agency
                          acting in cooperation with an organization
                          described in
                          clause (i).
                ``(4) No reduction in benefits.--Notwithstanding any other
            provision of Federal law (other than the Internal Revenue Code
            of 1986) that requires consideration of 1 or more financial
            circumstances of an individual, for the purpose of determining
            eligibility to receive, or the amount of, any assistance or
            benefit authorized by such law to be provided to or for the
            benefit of such individual, funds (including interest accruing)
            in an individual development account under this subsection shall
            be disregarded for such purpose with respect to any period
            during which such individual maintains or makes contributions
            into such an account.
                ``(5) Definitions.--As used in this subsection--
                        ``(A) Eligible educational institution.--The term
                    `eligible educational institution' means the following:
                              ``(i) An institution described in section
                          481(a)(1) or 1201(a) of the Higher Education Act
                          of 1965 (20 U.S.C. 1088(a)(1) or 1141(a)), as such
                          sections are in effect on the date of the
                          enactment of this subsection.
                              ``(ii) An area vocational education school (as
                          defined in subparagraph (C) or (D) of section
                          521(4) of the Carl D. Perkins Vocational and
                          Applied Technology Education Act (20 U.S.C.
                          2471(4))) which is in any State (as defined in
                          section 521(33) of such Act), as such sections are
                          in effect on the date of the enactment of this
                          subsection.

    [[Page 110 STAT. 2127]]

                        ``(B) Post-secondary educational expenses.--The term
                    `post-secondary educational expenses' means--
                              ``(i) tuition and fees required for the
                          enrollment or attendance of a student at an
                          eligible educational institution, and
                              ``(ii) fees, books, supplies, and equipment
                          required for courses of instruction at an eligible
                          educational institution.
                        ``(C) Qualified acquisition costs.--The term
                    `qualified acquisition costs' means the costs of
                    acquiring, constructing, or reconstructing a residence.
                    The term includes any usual or reasonable settlement,
                    financing, or other closing costs.
                        ``(D) Qualified business.--The term `qualified
                    business' means any business that does not contravene
                    any law or public policy (as determined by the
                    Secretary).
                        ``(E) Qualified business capitalization expenses.--
                    The term `qualified business capitalization expenses'
                    means qualified expenditures for the capitalization of a
                    qualified business pursuant to a qualified plan.
                        ``(F) Qualified expenditures.--The term `qualified
                    expenditures' means expenditures included in a qualified
                    plan, including capital, plant, equipment, working
                    capital, and inventory expenses.
                        ``(G) Qualified first-time homebuyer.--
                              ``(i) In general.--The term `qualified first-
                          time homebuyer' means a taxpayer (and, if married,
                          the taxpayer's spouse) who has no present
                          ownership interest in a principal residence during
                          the 3-year period ending on the date of
                          acquisition of the principal residence to which
                          this subsection applies.
                              ``(ii) Date of acquisition.--The term `date of
                          acquisition' means the date on which a binding
                          contract to acquire, construct, or reconstruct the
                          principal residence to which this subparagraph
                          applies is entered into.
                        ``(H) Qualified plan.--The term `qualified plan'
                    means a business plan which--
                              ``(i) is approved by a financial institution,
                          or by a nonprofit loan fund having demonstrated
                          fiduciary integrity,
                              ``(ii) includes a description of services or
                          goods to be sold, a marketing plan, and projected
                          financial statements, and
                              ``(iii) may require the eligible individual to
                          obtain the assistance of an experienced
                          entrepreneurial advisor.
                        ``(I) Qualified principal residence.--The term
                    `qualified principal residence' means a principal
                    residence (within the meaning of section 1034 of the
                    Internal Revenue Code of 1986), the qualified
                    acquisition costs of which do not exceed 100 percent of
                    the average area purchase price applicable to such
                    residence (determined in accordance with paragraphs (2)
                    and (3) of section 143(e) of such Code).

        ``(i) Sanction Welfare Recipients for Failing To Ensure That Minor
    Dependent Children Attend School.--A State to which a grant is made
    under section 403 shall not be prohibited

    [[Page 110 STAT. 2128]]

    from sanctioning a family that includes an adult who has received
    assistance under any State program funded under this part attributable
    to funds provided by the Federal Government or under the food stamp
    program, as defined in section 3(h) of the Food Stamp Act of 1977, if
    such adult fails to ensure that the minor dependent children of such
    adult attend school as required by the law of the State in which the
    minor children reside.
        ``(j) Requirement for High School Diploma or Equivalent.--A State to
    which a grant is made under section 403 shall not be prohibited from
    sanctioning a family that includes an adult who is older than age 20 and
    younger than age 51 and who has received assistance under any State
    program funded under this part attributable to funds provided by the
    Federal Government or under the food stamp program, as defined in
    section 3(h) of the Food Stamp Act of 1977, if such adult does not have,
    or is not working toward attaining, a secondary school diploma or its
    recognized equivalent unless such adult has been determined in the
    judgment of medical, psychiatric, or other appropriate professionals to
    lack the requisite capacity to complete successfully a course of study
    that would lead to a secondary school diploma or its recognized
    equivalent.

    ``SEC. 405. <<NOTE: 42 USC 605.>>  ADMINISTRATIVE PROVISIONS.

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

        ``(d) Payment Method.--Upon receipt of a certification under
    subsection (c)(2) with respect to a State, the Secretary of the Treasury
    shall, through the Fiscal Service of the Department of the Treasury and
    before audit or settlement by the General Accounting Office, pay to the
    State, at the time or times fixed by the Secretary of Health and Human
    Services, the amount so certified.

    ``SEC. 406. <<NOTE: 42 USC 606.>>  FEDERAL LOANS FOR STATE WELFARE
                PROGRAMS.

        ``(a) Loan Authority.--

    [[Page 110 STAT. 2129]]

                ``(1) In general.--The Secretary shall make loans to any
            loan-eligible State, for a period to maturity of not more than 3
            years.
                ``(2) Loan-eligible state.--As used in paragraph (1), the
            term `loan-eligible State' means a State against which a penalty
            has not been imposed under section 409(a)(1).

        ``(b) Rate of Interest.--The Secretary shall charge and collect
    interest on any loan made under this section at a rate equal to the
    current average market yield on outstanding marketable obligations of
    the United States with remaining periods to maturity comparable to the
    period to maturity of the loan.
        ``(c) Use of Loan.--A State shall use a loan made to the State under
    this section only for any purpose for which grant amounts received by
    the State under section 403(a) may be used, including--
                ``(1) welfare anti-fraud activities; and
                ``(2) the provision of assistance under the State program to
            Indian families that have moved from the service area of an
            Indian tribe with a tribal family assistance plan approved under
            section 412.

        ``(d) Limitation on Total Amount of Loans to a State.--The
    cumulative dollar amount of all loans made to a State under this section
    during fiscal years 1997 through 2002 shall not exceed 10 percent of the
    State family assistance grant.
        ``(e) Limitation on Total Amount of Outstanding Loans.--The total
    dollar amount of loans outstanding under this section may not exceed
    $1,700,000,000.
        ``(f) Appropriation.--Out of any money in the Treasury of the United
    States not otherwise appropriated, there are appropriated such sums as
    may be necessary for the cost of loans under this section.

    ``SEC. 407. <<NOTE: 42 USC 607.>>  MANDATORY WORK REQUIREMENTS.

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

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

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

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

    [[Page 110 STAT. 2130]]

        ``(b) Calculation of Participation Rates.--
                ``(1) All families.--
                        ``(A) Average monthly rate.--For purposes of
                    subsection (a)(1), the participation rate for all
                    families of a State for a fiscal year is the average of
                    the participation rates for all families of the State
                    for each month in the fiscal year.
                        ``(B) Monthly participation rates.--The
                    participation rate of a State for all families of the
                    State for a month, expressed as a percentage, is--
                              ``(i) the number of families receiving
                          assistance under the State program funded under
                          this part that include an adult or a minor child
                          head of household who is engaged in work for the
                          month; divided by
                              ``(ii) the amount by which--
                                        ``(I) the number of families
                                    receiving such assistance during the
                                    month that include an adult or a minor
                                    child head of household receiving such
                                    assistance; exceeds
                                        ``(II) the number of families
                                    receiving such assistance that are
                                    subject in such month to a penalty
                                    described in subsection (e)(1) but have
                                    not been subject to such penalty for
                                    more than 3 months within the preceding
                                    12-month period (whether or not
                                    consecutive).
                ``(2) 2-parent families.--
                        ``(A) Average monthly rate.--For purposes of
                    subsection (a)(2), the participation rate for 2-parent
                    families of a State for a fiscal year is the average of
                    the participation rates for 2-parent families of the
                    State for each month in the fiscal year.
                        ``(B) Monthly participation rates.--The
                    participation rate of a State for 2-parent families of
                    the State for a month shall be calculated by use of the
                    formula set forth in paragraph (1)(B), except that in
                    the formula the term `number of 2-parent families' shall
                    be substituted for the term `number of families' each
                    place such latter term appears.
                ``(3) Pro rata reduction of participation rate due to
            caseload reductions not required by federal law.--
                        ``(A) In general.--The
                    Secretary <<NOTE: Regulations.>>  shall prescribe
                    regulations for reducing the minimum participation rate
                    otherwise required by this section for a fiscal year by
                    the number of percentage points equal to the number of
                    percentage points (if any) by which--
                              ``(i) the average monthly number of families
                          receiving assistance during the immediately
                          preceding fiscal year under the State program
                          funded under this part is less than
                              ``(ii) the average monthly number of families
                          that received aid under the State plan approved
                          under part A (as in effect on September 30, 1995)
                          during fiscal year 1995.
                    The minimum participation rate shall not be reduced to
                    the extent that the Secretary determines that the
                    reduction in the number of families receiving such
                    assistance is required by Federal law.

    [[Page 110 STAT. 2131]]

                        ``(B) Eligibility changes not counted.--The
                    regulations required by subparagraph (A) shall not take
                    into account families that are diverted from a State
                    program funded under this part as a result of
                    differences in eligibility criteria under a State
                    program funded under this part and eligibility criteria
                    under the State program operated under the State plan
                    approved under part A (as such plan and such part were
                    in effect on September 30, 1995). Such regulations shall
                    place the burden on the Secretary to prove that such
                    families were diverted as a direct result of differences
                    in such eligibility criteria.
                ``(4) State option to include individuals receiving
            assistance under a tribal family assistance plan.--For purposes
            of paragraphs (1)(B) and (2)(B), a State may, at its option,
            include families in the State that are receiving assistance
            under a tribal family assistance plan approved under section
            412.
                ``(5) State option for participation requirement
            exemptions.--For any fiscal year, a State may, at its option,
            not require an individual who is a single custodial parent
            caring for a child who has not attained 12 months of age to
            engage in work, and may disregard such an individual in
            determining the participation rates under subsection (a) for not
            more than 12 months.

        ``(c) Engaged in Work.--
                ``(1) General rules.--
                        ``(A) All families.--For purposes of subsection
                    (b)(1)(B)(i), a recipient is engaged in work for a month
                    in a fiscal year if the recipient is participating in
                    work activities for at least the minimum average number
                    of hours per week specified in the following table
                    during the month, not fewer than 20 hours per week of
                    which are attributable to an activity described in
                    paragraph (1), (2), (3), (4), (5), (6), (7), (8), or
                    (12) of subsection (d), subject to this subsection:

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

                        ``(B) 2-parent families.--For purposes of subsection
                    (b)(2)(B), an individual is engaged in work for a month
                    in a fiscal year if--
                              ``(i) the individual is making progress in
                          work activities for at least 35 hours per week
                          during the month, not fewer than 30 hours per week
                          of which are attributable to an activity described
                          in paragraph (1), (2), (3), (4), (5), (6), (7),
                          (8), or (12) of subsection (d), subject to this
                          subsection; and
                              ``(ii) if the family of the individual
                          receives federally-funded child care assistance
                          and an adult in the family is not disabled or
                          caring for a severely disabled child, the
                          individual's spouse is making progress in work
                          activities during the month, not fewer than 20
                          hours per week of which are attributable to an
                          activity

    [[Page 110 STAT. 2132]]

                          described in paragraph (1), (2), (3), (4), (5), or
                          (7) of subsection (d).
                ``(2) Limitations and special rules.--
                        ``(A) Number of weeks for which job search counts as
                    work.--
                              ``(i) Limitation.--Notwithstanding paragraph
                          (1) of this subsection, an individual shall not be
                          considered to be engaged in work by virtue of
                          participation in an activity described in
                          subsection (d)(6) of a State program funded under
                          this part, after the individual has participated
                          in such an activity for 6 weeks (or, if the
                          unemployment rate of the State is at least 50
                          percent greater than the unemployment rate of the
                          United States, 12 weeks), or if the participation
                          is for a week that immediately follows 4
                          consecutive weeks of such participation.
                              ``(ii) Limited authority to count less than
                          full week of participation.--For purposes of
                          clause (i) of this subparagraph, on not more than
                          1 occasion per individual, the State shall
                          consider participation of the individual in an
                          activity described in subsection (d)(6) for 3 or 4
                          days during a week as a week of participation in
                          the activity by the individual.
                        ``(B) Single parent with child under age 6 deemed to
                    be meeting work participation requirements if parent is
                    engaged in work for 20 hours per week.--For purposes of
                    determining monthly participation rates under subsection
                    (b)(1)(B)(i), a recipient in a 1-parent family who is
                    the parent of a child who has not attained 6 years of
                    age is deemed to be engaged in work for a month if the
                    recipient is engaged in work for an average of at least
                    20 hours per week during the month.
                        ``(C) Teen head of household who maintains
                    satisfactory school attendance deemed to be meeting work
                    participation requirements.--For purposes of determining
                    monthly participation rates under sub-
                    section (b)(1)(B)(i), a recipient who is a single head
                    of household and has not attained 20 years of age is
                    deemed, subject to subparagraph (D) of this paragraph,
                    to be engaged in work for a month in a fiscal year if
                    the recipient--
                              ``(i) maintains satisfactory attendance at
                          secondary school or the equivalent during the
                          month; or
                              ``(ii) participates in education directly
                          related to employment for at least the minimum
                          average number of hours per week specified in the
                          table set forth in paragraph (1)(A) of this
                          subsection.
                        ``(D) Number of persons that may be treated as
                    engaged in work by virtue of participation in vocational
                    education activities or being a teen head of household
                    who maintains satisfactory school attendance.--For
                    purposes of determining monthly participation rates
                    under paragraphs (1)(B)(i) and (2)(B) of subsection (b),
                    not more than 20 percent of individuals in all families
                    and in 2-parent families may be determined to be engaged
                    in work in the State for a month by reason of
                    participation

    [[Page 110 STAT. 2133]]

                    in vocational educational training or deemed to be
                    engaged in work by reason of subparagraph (C) of this
                    paragraph.

        ``(d) Work Activities Defined.--As used in this section, the term
    `work activities' means--
                ``(1) unsubsidized employment;
                ``(2) subsidized private sector employment;
                ``(3) subsidized public sector employment;
                ``(4) work experience (including work associated with the
            refurbishing of publicly assisted housing) if sufficient private
            sector employment is not available;
                ``(5) on-the-job training;
                ``(6) job search and job readiness assistance;
                ``(7) community service programs;
                ``(8) vocational educational training (not to exceed 12
            months with respect to any individual);
                ``(9) job skills training directly related to employment;
                ``(10) education directly related to employment, in the case
            of a recipient who has not received a high school diploma or a
            certificate of high school equivalency;
                ``(11) satisfactory attendance at secondary school or in a
            course of study leading to a certificate of general equivalence,
            in the case of a recipient who has not completed secondary
            school or received such a certificate; and
                ``(12) the provision of child care services to an individual
            who is participating in a community service program.

        ``(e) Penalties Against Individuals.--
                ``(1) In general.--Except as provided in paragraph (2), if
            an individual in a family receiving assistance under the State
            program funded under this part refuses to engage in work
            required in accordance with this section, the State shall--
                        ``(A) reduce the amount of assistance otherwise
                    payable to the family pro rata (or more, at the option
                    of the State) with respect to any period during a month
                    in which the individual so refuses; or
                        ``(B) terminate such assistance,
            subject to such good cause and other exceptions as the State may
            establish.
                ``(2) Exception.--Notwithstanding paragraph (1), a State may
            not reduce or terminate assistance under the State program
            funded under this part based on a refusal of an individual to
            work if the individual is a single custodial parent caring for a
            child who has not attained 6 years of age, and the individual
            proves that the individual has a demonstrated inability (as
            determined by the State) to obtain needed child care, for 1 or
            more of the following reasons:
                        ``(A) Unavailability of appropriate child care
                    within a reasonable distance from the individual's home
                    or work site.
                        ``(B) Unavailability or unsuitability of informal
                    child care by a relative or under other arrangements.
                        ``(C) Unavailability of appropriate and affordable
                    formal child care arrangements.

        ``(f) Nondisplacement in Work Activities.--
                ``(1) In general.--Subject to paragraph (2), an adult in a
            family receiving assistance under a State program funded under
            this part attributable to funds provided by the Federal

    [[Page 110 STAT. 2134]]

            Government may fill a vacant employment position in order to
            engage in a work activity described in subsection (d).
                ``(2) No filling of certain vacancies.--No adult in a work
            activity described in subsection (d) which is funded, in whole
            or in part, by funds provided by the Federal Government shall be
            employed or assigned--
                        ``(A) when any other individual is on layoff from
                    the same or any substantially equivalent job; or
                        ``(B) if the employer has terminated the employment
                    of any regular employee or otherwise caused an
                    involuntary reduction of its workforce in order to fill
                    the vacancy so created with an adult described in
                    paragraph (1).
                ``(3) Grievance procedure.--A State with a program funded
            under this part shall establish and maintain a grievance
            procedure for resolving complaints of alleged violations of
            paragraph (2).
                ``(4) No preemption.--Nothing in this subsection shall
            preempt or supersede any provision of State or local law that
            provides greater protection for employees from displacement.

        ``(g) Sense of the Congress.--It is the sense of the Congress that
    in complying with this section, each State that operates a program
    funded under this part is encouraged to assign the highest priority to
    requiring adults in 2-parent families and adults in single-parent
    families that include older preschool or school-age children to be
    engaged in work activities.
        ``(h) Sense of the Congress That States Should Impose Certain
    Requirements on Noncustodial, Nonsupporting Minor Parents.--It is the
    sense of the Congress that the States should require noncustodial,
    nonsupporting parents who have not attained 18 years of age to fulfill
    community work obligations and attend appropriate parenting or money
    management classes after school.
        ``(i) Review of Implementation of State Work Programs.--During
    fiscal year 1999, the Committee on Ways and Means of the House of
    Representatives and the Committee on Finance of the Senate shall hold
    hearings and engage in other appropriate activities to review the
    implementation of this section by the States, and shall invite the
    Governors of the States to testify before them regarding such
    implementation. Based on such hearings, such Committees may introduce
    such legislation as may be appropriate to remedy any problems with the
    State programs operated pursuant to this section.

    ``SEC. 408. <<NOTE: 42 USC 608.>>  PROHIBITIONS; REQUIREMENTS.

        ``(a) In General.--
                ``(1) No assistance for families without a minor child.--A
            State to which a grant is made under section 403 shall not use
            any part of the grant to provide assistance to a family--
                        ``(A) unless the family includes--
                              ``(i) a minor child who resides with a
                          custodial parent or other adult caretaker relative
                          of the
                          child; or
                              ``(ii) a pregnant individual; and
                        ``(B) if the family includes an adult who has
                    received assistance under any State program funded under
                    this part attributable to funds provided by the Federal
                    Government, for 60 months (whether or not consecutive)
                    after

    [[Page 110 STAT. 2135]]

                    the date the State program funded under this part
                    commences (unless an exception described in subparagraph
                    (B), (C), or (D) of paragraph (7) applies).
                ``(2) Reduction or elimination of assistance for
            noncooperation in establishing paternity or obtaining child
            support.--If the agency responsible for administering the State
            plan approved under part D determines that an individual is not
            cooperating with the State in establishing paternity or in
            establishing, modifying, or enforcing a support order with
            respect to a child of the individual, and the individual does
            not qualify for any good cause or other exception established by
            the State pursuant to section 454(29), then the State--
                        ``(A) shall deduct from the assistance that would
                    otherwise be provided to the family of the individual
                    under the State program funded under this part an amount
                    equal to not less than 25 percent of the amount of such
                    assistance; and
                        ``(B) may deny the family any assistance under the
                    State program.
                ``(3) No assistance for families not assigning certain
            support rights to the state.--
                        ``(A) In general.--A State to which a grant is made
                    under section 403 shall require, as a condition of
                    providing assistance to a family under the State program
                    funded under this part, that a member of the family
                    assign to the State any rights the family member may
                    have (on behalf of the family member or of any other
                    person for whom the family member has applied for or is
                    receiving such assistance) to support from any other
                    person, not exceeding the total amount of assistance so
                    provided to the family, which accrue (or have accrued)
                    before the date the family leaves the program, which
                    assignment, on and after the date the family leaves the
                    program, shall not apply with respect to any support
                    (other than support collected pursuant to section 464)
                    which accrued before the family received such assistance
                    and which the State has not collected by--
                              ``(i) September 30, 2000, if the assignment is
                          executed on or after October 1, 1997, and before
                          October 1, 2000; or
                              ``(ii) the date the family leaves the program,
                          if the assignment is executed on or after October
                          1, 2000.
                        ``(B) Limitation.--A State to which a grant is made
                    under section 403 shall not require, as a condition of
                    providing assistance to any family under the State
                    program funded under this part, that a member of the
                    family assign to the State any rights to support
                    described in subparagraph (A) which accrue after the
                    date the family leaves the program.
                ``(4) No assistance for teenage parents who do not attend
            high school or other equivalent training program.--A State to
            which a grant is made under section 403 shall not use any part
            of the grant to provide assistance to an individual who has not
            attained 18 years of age, is not married, has a minor child at
            least 12 weeks of age in his or her care, and has not
            successfully completed a high-school

    [[Page 110 STAT. 2136]]

            education (or its equivalent), if the individual does not
            participate in--
                        ``(A) educational activities directed toward the
                    attainment of a high school diploma or its equivalent;
                    or
                        ``(B) an alternative educational or training program
                    that has been approved by the State.
                ``(5) No assistance for teenage parents not living in adult-
            supervised settings.--
                        ``(A) In general.--
                              ``(i) Requirement.--Except as provided in
                          subparagraph (B), a State to which a grant is made
                          under section 403 shall not use any part of the
                          grant to provide assistance to an individual
                          described in clause (ii) of this subparagraph if
                          the individual and the minor child referred to in
                          clause (ii)(II) do not reside in a place of
                          residence maintained by a parent, legal guardian,
                          or other adult relative of the individual as such
                          parent's, guardian's, or adult relative's own
                          home.
                              ``(ii) Individual described.-- For purposes of
                          clause (i), an individual described in this clause
                          is an individual who--
                                        ``(I) has not attained 18 years of
                                    age; and
                                        ``(II) is not married, and has a
                                    minor child in his or her care.
                        ``(B) Exception.--
                              ``(i) Provision of, or assistance in locating,
                          adult-supervised living arrangement.--In the case
                          of an individual who is described in clause (ii),
                          the State agency referred to in section 402(a)(4)
                          shall provide, or assist the individual in
                          locating, a second chance home, maternity home, or
                          other appropriate adult-supervised supportive
                          living arrangement, taking into consideration the
                          needs and concerns of the individual, unless the
                          State agency determines that the individual's
                          current living arrangement is appropriate, and
                          thereafter shall require that the individual and
                          the minor child referred to in subparagraph
                          (A)(ii)(II) reside in such living arrangement as a
                          condition of the continued receipt of assistance
                          under the State program funded under this part
                          attributable to funds provided by the Federal
                          Government (or in an alternative appropriate
                          arrangement, should circumstances change and the
                          current arrangement cease to be appropriate).
                              ``(ii) Individual described.--For purposes of
                          clause (i), an individual is described in this
                          clause if the individual is described in
                          subparagraph (A)(ii), and--
                                        ``(I) the individual has no parent,
                                    legal guardian, or other appropriate
                                    adult relative described in subclause
                                    (II) of his or her own who is living or
                                    whose whereabouts are known;
                                        ``(II) no living parent, legal
                                    guardian, or other appropriate adult
                                    relative, who would otherwise meet
                                    applicable State criteria to act as the
                                    individual's legal guardian, of such
                                    individual allows the

    [[Page 110 STAT. 2137]]

                                    individual to live in the home of such
                                    parent, guardian, or relative;
                                        ``(III) the State agency determines
                                    that--
                                                ``(aa) the individual or the
                                            minor child referred to in
                                            subparagraph (A)(ii)(II) is
                                            being or has been subjected to
                                            serious physical or emotional
                                            harm, sexual abuse, or
                                            exploitation in the residence of
                                            the individual's own parent or
                                            legal guardian; or
                                                ``(bb) substantial evidence
                                            exists of an act or failure to
                                            act that presents an imminent or
                                            serious harm if the individual
                                            and the minor child lived in the
                                            same residence with the
                                            individual's own parent or legal
                                            guardian; or
                                        ``(IV) the State agency otherwise
                                    determines that it is in the best
                                    interest of the minor child to waive the
                                    requirement of subparagraph (A) with
                                    respect to the individual or the minor
                                    child.
                              ``(iii) Second-chance home.--For purposes of
                          this subparagraph, the term `second-chance home'
                          means an entity that provides individuals
                          described in clause (ii) with a supportive and
                          supervised living arrangement in which such
                          individuals are required to learn parenting
                          skills, including child development, family
                          budgeting, health and nutrition, and other skills
                          to promote their long-term economic independence
                          and the well-being of their children.
                ``(6) No medical services.--
                        ``(A) In general.--A State to which a grant is made
                    under section 403 shall not use any part of the grant to
                    provide medical services.
                        ``(B) Exception for prepregnancy family planning
                    services.--As used in subparagraph (A), the term
                    `medical services' does not include prepregnancy family
                    planning services.
                ``(7) No assistance for more than 5 years.--
                        ``(A) In general.--A State to which a grant is made
                    under section 403 shall not use any part of the grant to
                    provide assistance to a family that includes an adult
                    who has received assistance under any State program
                    funded under this part attributable to funds provided by
                    the Federal Government, for 60 months (whether or not
                    consecutive) after the date the State program funded
                    under this part commences, subject to this paragraph.
                        ``(B) Minor child exception.--In determining the
                    number of months for which an individual who is a parent
                    or pregnant has received assistance under the State
                    program funded under this part, the State shall
                    disregard any month for which such assistance was
                    provided with respect to the individual and during which
                    the individual was--
                              ``(i) a minor child; and
                              ``(ii) not the head of a household or married
                          to the head of a household.
                        ``(C) Hardship exception.--
                              ``(i) In general.--The State may exempt a
                          family from the application of subparagraph (A) by
                          reason

    [[Page 110 STAT. 2138]]

                          of hardship or if the family includes an
                          individual who has been battered or subjected to
                          extreme cruelty.
                              ``(ii) Limitation.--The number of families
                          with respect to which an exemption made by a State
                          under clause (i) is in effect for a fiscal year
                          shall not exceed 20 percent of the average monthly
                          number of families to which assistance is provided
                          under the State program funded under this part.
                              ``(iii) Battered or subject to extreme cruelty
                          defined.--For purposes of clause (i), an
                          individual has been battered or subjected to
                          extreme cruelty if the individual has been
                          subjected to--
                                        ``(I) physical acts that resulted
                                    in, or threatened to result in, physical
                                    injury to the individual;
                                        ``(II) sexual abuse;
                                        ``(III) sexual activity involving a
                                    dependent child;
                                        ``(IV) being forced as the caretaker
                                    relative of a dependent child to engage
                                    in nonconsensual sexual acts or
                                    activities;
                                        ``(V) threats of, or attempts at,
                                    physical or sexual abuse;
                                        ``(VI) mental abuse; or
                                        ``(VII) neglect or deprivation of
                                    medical care.
                        ``(D) Disregard of months of assistance received by
                    adult while living on an indian reservation or in an
                    alaskan native village with 50 percent unemployment.--In
                    determining the number of months for which an adult has
                    received assistance under the State program funded under
                    this part, the State shall disregard any month during
                    which the adult lived on an Indian reservation or in an
                    Alaskan Native village if, during the month--
                              ``(i) at least 1,000 individuals were living
                          on the reservation or in the village ; and
                              ``(ii) at least 50 percent of the adults
                          living on the reservation or in the village were
                          unemployed.
                        ``(E) Rule of interpretation.--Subparagraph (A)
                    shall not be interpreted to require any State to provide
                    assistance to any individual for any period of time
                    under the State program funded under this part.
                        ``(F) Rule of interpretation.--This part shall not
                    be interpreted to prohibit any State from expending
                    State funds not originating with the Federal Government
                    on benefits for children or families that have become
                    ineligible for assistance under the State program funded
                    under this part by reason of subparagraph (A).
                ``(8) Denial of assistance for 10 years to a person found to
            have fraudulently misrepresented residence in order to obtain
            assistance in 2 or more states.--A State to which a grant is
            made under section 403 shall not use any part of the grant to
            provide cash assistance to an individual during the 10-year
            period that begins on the date the individual is convicted in
            Federal or State court of having made a fraudulent statement or
            representation with respect to the place of residence of the
            individual in order to receive assistance simultaneously from 2
            or more States under pro

    [[Page 110 STAT. 2139]]

            grams that are funded under this title, title XIX, or the Food
            Stamp Act of 1977, or benefits in 2 or more States under the
            supplemental security income program under title XVI. The
            preceding sentence shall not apply with respect to a conviction
            of an individual, for any month beginning after the President of
            the United States grants a pardon with respect to the conduct
            which was the subject of the conviction.
                ``(9) Denial of assistance for fugitive felons and probation
            and parole violators.--
                        ``(A) In general.--A State to which a grant is made
                    under section 403 shall not use any part of the grant to
                    provide assistance to any individual who is--
                              ``(i) fleeing to avoid prosecution, or custody
                          or confinement after conviction, under the laws of
                          the place from which the individual flees, for a
                          crime, or an attempt to commit a crime, which is a
                          felony under the laws of the place from which the
                          individual flees, or which, in the case of the
                          State of New Jersey, is a high misdemeanor under
                          the laws of such
                          State; or
                              ``(ii) violating a condition of probation or
                          parole imposed under Federal or State law.
                    The preceding sentence shall not apply with respect to
                    conduct of an individual, for any month beginning after
                    the President of the United States grants a pardon with
                    respect to the conduct.
                        ``(B) Exchange of information with law enforcement
                    agencies.--If a State to which a grant is made under
                    section 403 establishes safeguards against the use or
                    disclosure of information about applicants or recipients
                    of assistance under the State program funded under this
                    part, the safeguards shall not prevent the State agency
                    administering the program from furnishing a Federal,
                    State, or local law enforcement officer, upon the
                    request of the officer, with the current address of any
                    recipient if the officer furnishes the agency with the
                    name of the recipient and notifies the agency that--
                              ``(i) the recipient--
                                        ``(I) is described in subparagraph
                                    (A); or
                                        ``(II) has information that is
                                    necessary for the officer to conduct the
                                    official duties of the officer; and
                              ``(ii) the location or apprehension of the
                          recipient is within such official duties.
                ``(10) Denial of assistance for minor children who are
            absent from the home for a significant period.--
                        ``(A) In general.--A State to which a grant is made
                    under section 403 shall not use any part of the grant to
                    provide assistance for a minor child who has been, or is
                    expected by a parent (or other caretaker relative) of
                    the child to be, absent from the home for a period of 45
                    consecutive days or, at the option of the State, such
                    period of not less than 30 and not more than 180
                    consecutive days as the State may provide for in the
                    State plan submitted pursuant to section 402.
                        ``(B) State authority to establish good cause
                    exceptions.--The State may establish such good cause

    [[Page 110 STAT. 2140]]

                    exceptions to subparagraph (A) as the State considers
                    appropriate if such exceptions are provided for in the
                    State plan submitted pursuant to section 402.
                        ``(C) Denial of assistance for relative who fails to
                    notify state agency of absence of child.--A State to
                    which a grant is made under section 403 shall not use
                    any part of the grant to provide assistance for an
                    individual who is a parent (or other caretaker relative)
                    of a minor child and who fails to notify the agency
                    administering the State program funded under this part
                    of the absence of the minor child from the home for the
                    period specified in or provided for pursuant to
                    subparagraph (A), by the end of the 5-day period that
                    begins with the date that it becomes clear to the parent
                    (or relative) that the minor child will be absent for
                    such period so specified or provided for.
                ``(11) Medical assistance required to be provided for
            certain families having earnings from employment or child
            support.--
                        ``(A) Earnings from employment.--A State to which a
                    grant is made under section 403 and which has a State
                    plan approved under title XIX shall provide that in the
                    case of a family that is treated (under section
                    1931(b)(1)(A) for purposes of title XIX) as receiving
                    aid under a State plan approved under this part (as in
                    effect on July 16, 1996), that would become ineligible
                    for such aid because of hours of or income from
                    employment of the caretaker relative (as defined under
                    this part as in effect on such date) or because of
                    section 402(a)(8)(B)(ii)(II) (as so in effect), and that
                    was so treated as receiving such aid in at least 3 of
                    the 6 months immediately preceding the month in which
                    such ineligibility begins, the family shall remain
                    eligible for medical assistance under the State's plan
                    approved under title XIX for an extended period or
                    periods as provided in section 1925 or 1902(e)(1) (as
                    applicable), and that the family will be appropriately
                    notified of such extension as required by section
                    1925(a)(2).
                        ``(B) Child support.--A State to which a grant is
                    made under section 403 and which has a State plan
                    approved under title XIX shall provide that in the case
                    of a family that is treated (under section 1931(b)(1)(A)
                    for purposes of title XIX) as receiving aid under a
                    State plan approved under this part (as in effect on
                    July 16, 1996), that would become ineligible for such
                    aid as a result (wholly or partly) of the collection of
                    child or spousal support under part D and that was so
                    treated as receiving such aid in at least 3 of the 6
                    months immediately preceding the month in which such
                    ineligibility begins, the family shall remain eligible
                    for medical assistance under the State's plan approved
                    under title XIX for an extended period or periods as
                    provided in section 1931(c)(1).

        ``(b) Individual Responsibility Plans.--
                ``(1) Assessment.--The State agency responsible for
            administering the State program funded under this part shall
            make an initial assessment of the skills, prior work experience,
            and employability of each recipient of assistance under the
            program who--

    [[Page 110 STAT. 2141]]

                        ``(A) has attained 18 years of age; or
                        ``(B) has not completed high school or obtained a
                    certificate of high school equivalency, and is not
                    attending secondary school.
                ``(2) Contents of plans.--
                        ``(A) In general.--On the basis of the assessment
                    made under subsection (a) with respect to an individual,
                    the State agency, in consultation with the individual,
                    may develop an individual responsibility plan for the
                    individual, which--
                              ``(i) sets forth an employment goal for the
                          individual and a plan for moving the individual
                          immediately into private sector employment;
                              ``(ii) sets forth the obligations of the
                          individual, which may include a requirement that
                          the individual attend school, maintain certain
                          grades and attendance, keep school age children of
                          the individual in school, immunize children,
                          attend parenting and money management classes, or
                          do other things that will help the individual
                          become and remain employed in the private sector;
                              ``(iii) to the greatest extent possible is
                          designed to move the individual into whatever
                          private sector employment the individual is
                          capable of handling as quickly as possible, and to
                          increase the responsibility and amount of work the
                          individual is to handle over time;
                              ``(iv) describes the services the State will
                          provide the individual so that the individual will
                          be able to obtain and keep employment in the
                          private sector, and describe the job counseling
                          and other services that will be provided by the
                          State; and
                              ``(v) may require the individual to undergo
                          appropriate substance abuse treatment.
                        ``(B) Timing.--The State agency may comply with
                    paragraph (1) with respect to an individual--
                              ``(i) within 90 days (or, at the option of the
                          State, 180 days) after the effective date of this
                          part, in the case of an individual who, as of such
                          effective date, is a recipient of aid under the
                          State plan approved under part A (as in effect
                          immediately before such effective date); or
                              ``(ii) within 30 days (or, at the option of
                          the State, 90 days) after the individual is
                          determined to be eligible for such assistance, in
                          the case of any other individual.
                ``(3) Penalty for noncompliance by individual.--In addition
            to any other penalties required under the State program funded
            under this part, the State may reduce, by such amount as the
            State considers appropriate, the amount of assistance otherwise
            payable under the State program to a family that includes an
            individual who fails without good cause to comply with an
            individual responsibility plan signed by the individual.
                ``(4) State discretion.--The exercise of the authority of
            this subsection shall be within the sole discretion of the
            State.

    [[Page 110 STAT. 2142]]

        ``(c) Nondiscrimination Provisions.--The following provisions of law
    shall apply to any program or activity which receives funds provided
    under this part:
                ``(1) The Age Discrimination Act of 1975 (42 U.S.C. 6101 et
            seq.).
                ``(2) Section 504 of the Rehabilitation Act of 1973 (29
            U.S.C. 794).
                ``(3) The Americans with Disabilities Act of 1990 (42 U.S.C.
            12101 et seq.).
                ``(4) Title VI of the Civil Rights Act of 1964 (42 U.S.C.
            2000d et seq.).

        ``(d) Aliens.--For special rules relating to the treatment of
    aliens, see section 402 of the Personal Responsibility and Work
    Opportunity Reconciliation Act of 1996.

    ``SEC. 409. <<NOTE: 42 USC 609.>>  PENALTIES.

        ``(a) In General.--Subject to this section:
                ``(1) Use of grant in violation of this part.--
                        ``(A) General penalty.--If an audit conducted under
                    chapter 75 of title 31, United States Code, finds that
                    an amount paid to a State under section 403 for a fiscal
                    year has been used in violation of this part, the
                    Secretary shall reduce the grant payable to the State
                    under section 403(a)(1) for the immediately succeeding
                    fiscal year quarter by the amount so used.
                        ``(B) Enhanced penalty for intentional violations.--
                    If the State does not prove to the satisfaction of the
                    Secretary that the State did not intend to use the
                    amount in violation of this part, the Secretary shall
                    further reduce the grant payable to the State under
                    section 403(a)(1) for the immediately succeeding fiscal
                    year quarter by an amount equal to 5 percent of the
                    State family assistance grant.
                ``(2) Failure to submit required report.--
                        ``(A) In general.--If the Secretary determines that
                    a State has not, within 1 month after the end of a
                    fiscal quarter, submitted the report required by section
                    411(a) for the quarter, the Secretary shall reduce the
                    grant payable to the State under section 403(a)(1) for
                    the immediately succeeding fiscal year by an amount
                    equal to 4 percent of the State family assistance grant.
                        ``(B) Rescission of penalty.--The Secretary shall
                    rescind a penalty imposed on a State under subparagraph
                    (A) with respect to a report if the State submits the
                    report before the end of the fiscal quarter that
                    immediately succeeds the fiscal quarter for which the
                    report was required.
                ``(3) Failure to satisfy minimum participation rates.--
                        ``(A) In general.--If the Secretary determines that
                    a State to which a grant is made under section 403 for a
                    fiscal year has failed to comply with section 407(a) for
                    the fiscal year, the Secretary shall reduce the grant
                    payable to the State under section 403(a)(1) for the
                    immediately succeeding fiscal year by an amount equal to
                    not more than the applicable percentage of the State
                    family assistance grant.

    [[Page 110 STAT. 2143]]

                        ``(B) Applicable percentage defined.--As used in
                    subparagraph (A), the term `applicable percentage'
                    means, with respect to a State--
                              ``(i) if a penalty was not imposed on the
                          State under subparagraph (A) for the immediately
                          preceding fiscal year, 5 percent; or
                              ``(ii) if a penalty was imposed on the State
                          under subparagraph (A) for the immediately
                          preceding fiscal year, the lesser of--
                                        ``(I) the percentage by which the
                                    grant payable to the State under section
                                    403(a)(1) was reduced for such preceding
                                    fiscal year, increased by 2 percentage
                                    points; or
                                        ``(II) 21 percent.
                        ``(C) Penalty based on severity of failure.--The
                    Secretary shall impose reductions under subparagraph (A)
                    with respect to a fiscal year based on the degree of
                    noncompliance, and may reduce the penalty if the
                    noncompliance is due to circumstances that caused the
                    State to become a needy State (as defined in section
                    403(b)(6)) during the fiscal year.
                ``(4) Failure to participate in the income and eligibility
            verification system.--If the Secretary determines that a State
            program funded under this part is not participating during a
            fiscal year in the income and eligibility verification system
            required by section 1137, the Secretary shall reduce the grant
            payable to the State under section 403(a)(1) for the immediately
            succeeding fiscal year by an amount equal to not more than 2
            percent of the State family assistance grant.
                ``(5) Failure to comply with paternity establishment and
            child support enforcement requirements under
            part d.--Notwithstanding any other provision of this Act, if the
            Secretary determines that the State agency that administers a
            program funded under this part does not enforce the penalties
            requested by the agency administering part D against recipients
            of assistance under the State program who fail to cooperate in
            establishing paternity or in establishing, modifying, or
            enforcing a child support order in accordance with such part and
            who do not qualify for any good cause or other exception
            established by the State under section 454(29), the Secretary
            shall reduce the grant payable to the State under section
            403(a)(1) for the immediately succeeding fiscal year (without
            regard to this section) by not more than 5 percent.
                ``(6) Failure to timely repay a federal loan fund for state
            welfare programs.--If the Secretary determines that a State has
            failed to repay any amount borrowed from the Federal Loan Fund
            for State Welfare Programs established under section 406 within
            the period of maturity applicable to the loan, plus any interest
            owed on the loan, the Secretary shall reduce the grant payable
            to the State under section 403(a)(1) for the immediately
            succeeding fiscal year quarter (without regard to this section)
            by the outstanding loan amount, plus the interest owed on the
            outstanding amount. The Secretary shall not forgive any
            outstanding loan amount or interest owed on the outstanding
            amount.
                ``(7) Failure of any state to maintain certain level of
            historic effort.--

    [[Page 110 STAT. 2144]]

                        ``(A) In general.--The Secretary shall reduce the
                    grant payable to the State under section 403(a)(1) for
                    fiscal year 1998, 1999, 2000, 2001, 2002, or 2003 by the
                    amount (if any) by which qualified State expenditures
                    for the then immediately preceding fiscal year are less
                    than the applicable percentage of historic State
                    expenditures with respect to such preceding fiscal year.
                        ``(B) Definitions.--As used in this paragraph:
                              ``(i) Qualified state expenditures.--
                                        ``(I) In general.--The term
                                    `qualified State expenditures' means,
                                    with respect to a State and a fiscal
                                    year, the total expenditures by the
                                    State during the fiscal year, under all
                                    State programs, for any of the following
                                    with respect to eligible families:
                                                ``(aa) Cash assistance.
                                                ``(bb) Child care
                                            assistance.
                                                ``(cc) Educational
                                            activities designed to increase
                                            self-sufficiency, job training,
                                            and work, excluding any
                                            expenditure for public education
                                            in the State except expenditures
                                            which involve the provision of
                                            services or assistance to a
                                            member of an eligible family
                                            which is not generally available
                                            to persons who are not members
                                            of an eligible family.
                                                ``(dd) Administrative costs
                                            in connection with the matters
                                            described in items (aa), (bb),
                                            (cc), and (ee), but only to the
                                            extent that such costs do not
                                            exceed 15 percent of the total
                                            amount of qualified State
                                            expenditures for the fiscal
                                            year.
                                                ``(ee) Any other use of
                                            funds allowable under section
                                            404(a)(1).
                                        ``(II) Exclusion of transfers from
                                    other state and local programs.--Such
                                    term does not include expenditures under
                                    any State or local program during a
                                    fiscal year, except to the
                                    extent that--
                                                ``(aa) the expenditures
                                            exceed the amount expended under
                                            the State or local program in
                                            the fiscal year most recently
                                            ending before the date of the
                                            enactment of this part; or
                                                ``(bb) the State is entitled
                                            to a payment under former
                                            section 403 (as in effect
                                            immediately before such date of
                                            enactment) with respect to the
                                            expenditures.
                                        ``(III) Eligible families.--As used
                                    in subclause (I), the term `eligible
                                    families' means families eligible for
                                    assistance under the State program
                                    funded under this part, and families
                                    that would be eligible for such
                                    assistance but for the application of
                                    section 408(a)(7) of this Act or section
                                    402 of the Personal Responsibility and
                                    Work Opportunity Reconciliation Act of
                                    1996.
                              ``(ii) Applicable percentage.--The term
                          `applicable percentage' means for fiscal years
                          1997 through 2002, 80 percent (or, if the State
                          meets the

    [[Page 110 STAT. 2145]]

                          requirements of section 407(a) for the fiscal
                          year, 75 percent) reduced (if appropriate) in
                          accordance with subparagraph (C)(ii).
                              ``(iii) Historic state expenditures.--The term
                          `historic State expenditures' means, with respect
                          to a State, the lesser of--
                                        ``(I) the expenditures by the State
                                    under parts A and F (as in effect during
                                    fiscal year 1994) for fiscal year 1994;
                                    or
                                        ``(II) the amount which bears the
                                    same ratio to the amount described in
                                    subclause (I) as--
                                                ``(aa) the State family
                                            assistance grant, plus the total
                                            amount required to be paid to
                                            the State under former section
                                            403 for fiscal year 1994 with
                                            respect to amounts expended by
                                            the State for child care under
                                            subsection (g) or (i) of section
                                            402 (as in effect during fiscal
                                            year 1994); bears to
                                                ``(bb) the total amount
                                            required to be paid to the State
                                            under former section 403 (as in
                                            effect during fiscal year 1994)
                                            for fiscal
                                            year 1994.
                          Such term does not include any expenditures under
                          the State plan approved under part A (as so in
                          effect) on behalf of individuals covered by a
                          tribal family assistance plan approved under
                          section 412, as determined by the Secretary.
                              ``(iv) Expenditures by the state.--The term
                          `expenditures by the State' does not include--
                                        ``(I) any expenditures from amounts
                                    made available by the Federal
                                    Government;
                                        ``(II) any State funds expended for
                                    the medicaid program under title XIX;
                                        ``(III) any State funds which are
                                    used to match Federal funds; or
                                        ``(IV) any State funds which are
                                    expended as a condition of receiving
                                    Federal funds under Federal programs
                                    other than under this part.
                          Notwithstanding subclause (IV) of the preceding
                          sentence, such term includes expenditures by a
                          State for child care in a fiscal year to the
                          extent that the total amount of such expenditures
                          does not exceed an amount equal to the amount of
                          State expenditures in fiscal year 1994 or 1995
                          (whichever is greater) that equal the non-Federal
                          share for the programs described in section
                          418(a)(1)(A).
                ``(8) Substantial noncompliance of state child support
            enforcement program with requirements of part d.--
                        ``(A) In general.--If a State program operated under
                    part D is found as a result of a review conducted under
                    section 452(a)(4) not to have complied substantially
                    with the requirements of such part for any quarter, and
                    the Secretary determines that the program is not
                    complying substantially with such requirements at the
                    time the finding is made, the Secretary shall reduce the
                    grant payable to the State under section 403(a)(1) for
                    the quarter and each subsequent quarter that ends before
                    the 1st quarter

    [[Page 110 STAT. 2146]]

                    throughout which the program is found to be in
                    substantial compliance with such requirements by--
                              ``(i) not less than 1 nor more than 2 percent;
                              ``(ii) not less than 2 nor more than 3
                          percent, if the finding is the 2nd consecutive
                          such finding made as a result of such a review; or
                              ``(iii) not less than 3 nor more than 5
                          percent, if the finding is the 3rd or a subsequent
                          consecutive such finding made as a result of such
                          a review.
                        ``(B) Disregard of noncompliance which is of a
                    technical nature.--For purposes of subparagraph (A) and
                    section 452(a)(4), a State which is not in full
                    compliance with the requirements of this part shall be
                    determined to be in substantial compliance with such
                    requirements only if the Secretary determines that any
                    noncompliance with such requirements is of a technical
                    nature which does not adversely affect the performance
                    of the State's program operated under part D.
                ``(9) Failure to comply with 5-year limit on assistance.--If
            the Secretary determines that a State has not complied with
            section 408(a)(1)(B) during a fiscal year, the Secretary shall
            reduce the grant payable to the State under section 403(a)(1)
            for the immediately succeeding fiscal year by an amount equal to
            5 percent of the State family assistance grant.
                ``(10) Failure of state receiving amounts from contingency
            fund to maintain 100 percent of historic effort.--If, at the end
            of any fiscal year during which amounts from the Contingency
            Fund for State Welfare Programs have been paid to a State, the
            Secretary finds that the expenditures under the State program
            funded under this part for the fiscal year (excluding any
            amounts made available by the Federal Government) are less than
            100 percent of historic State expenditures (as defined in
            paragraph (7)(B)(iii) of this subsection), the Secretary shall
            reduce the grant payable to the State under section 403(a)(1)
            for the immediately succeeding fiscal year by the total of the
            amounts so paid to the State.
                ``(11) Failure to maintain assistance to adult single
            custodial parent who cannot obtain child care for child under
            age 6.--
                        ``(A) In general.--If the Secretary determines that
                    a State to which a grant is made under section 403 for a
                    fiscal year has violated section 407(e)(2) during the
                    fiscal year, the Secretary shall reduce the grant
                    payable to the State under section 403(a)(1) for the
                    immediately succeeding fiscal year by an amount equal to
                    not more than 5 percent of the State family assistance
                    grant.
                        ``(B) Penalty based on severity of failure.--The
                    Secretary shall impose reductions under subparagraph (A)
                    with respect to a fiscal year based on the degree of
                    noncompliance.
                ``(12) Failure to expend additional state funds to replace
            grant reductions.--If the grant payable to a State under section
            403(a)(1) for a fiscal year is reduced by reason of this
            subsection, the State shall, during the immediately succeeding
            fiscal year, expend under the State program funded under this
            part an amount equal to the total amount of such reductions.

    [[Page 110 STAT. 2147]]

        ``(b) Reasonable Cause Exception.--
                ``(1) In general.--The Secretary may not impose a penalty on
            a State under subsection (a) with respect to a requirement if
            the Secretary determines that the State has reasonable cause for
            failing to comply with the requirement.
                ``(2) Exception.--Paragraph (1) of this subsection shall not
            apply to any penalty under paragraph (7) or (8) of subsection
            (a).

        ``(c) Corrective Compliance Plan.--
                ``(1) In general.--
                        ``(A) Notification of violation.--Before imposing a
                    penalty against a State under subsection (a) with
                    respect to a violation of this part, the Secretary shall
                    notify the State of the violation and allow the State
                    the opportunity to enter into a corrective compliance
                    plan in accordance with this subsection which outlines
                    how the State will correct the violation and how the
                    State will insure continuing compliance with this part.
                        ``(B) 60-day period to propose a corrective
                    compliance plan.--During the 60-day period that begins
                    on the date the State receives a notice provided under
                    sub-
                    paragraph (A) with respect to a violation, the State may
                    submit to the Federal Government a corrective compliance
                    plan to correct the violation.
                        ``(C) Consultation about modifications.--During the
                    60-day period that begins with the date the Secretary
                    receives a corrective compliance plan submitted by a
                    State in accordance with subparagraph (B), the Secretary
                    may consult with the State on modifications to the plan.
                        ``(D) Acceptance of plan.-- A corrective compliance
                    plan submitted by a State in accordance with
                    subparagraph (B) is deemed to be accepted by the
                    Secretary if the Secretary does not accept or reject the
                    plan during 60-day period that begins on the date the
                    plan is submitted.
                ``(2) Effect of correcting violation.--The Secretary may not
            impose any penalty under subsection (a) with respect to any
            violation covered by a State corrective compliance plan accepted
            by the Secretary if the State corrects the violation pursuant to
            the plan.
                ``(3) Effect of failing to correct violation.--The Secretary
            shall assess some or all of a penalty imposed on a State under
            subsection (a) with respect to a violation if
            the State does not, in a timely manner, correct the violation
            pursuant to a State corrective compliance plan accepted by the
            Secretary.
                ``(4) Inapplicability to failure to timely repay a
            federal loan fund for a state welfare program.--This subsection
            shall not apply to the imposition of a penalty against a State
            under subsection (a)(6).

        ``(d) Limitation on Amount of Penalties.--
                ``(1) In general.--In imposing the penalties described in
            subsection (a), the Secretary shall not reduce any quarterly
            payment to a State by more than 25 percent.
                ``(2) Carryforward of unrecovered penalties.--To the extent
            that paragraph (1) of this subsection prevents the Secretary
            from recovering during a fiscal year the full amount of
            penalties imposed on a State under subsection (a) of this

    [[Page 110 STAT. 2148]]

            section for a prior fiscal year, the Secretary shall apply any
            remaining amount of such penalties to the grant payable to the
            State under section 403(a)(1) for the immediately succeeding
            fiscal year.

    ``SEC. 410. <<NOTE: 42 USC 610.>>  APPEAL OF ADVERSE DECISION.

        ``(a) In General.--Within 5 days after the date the Secretary takes
    any adverse action under this part with respect to a State, the
    Secretary shall notify the chief executive officer of the State of the
    adverse action, including any action with respect to the State plan
    submitted under section 402 or the imposition of a penalty under section
    409.
        ``(b) Administrative Review.--
                ``(1) In general.--Within 60 days after the date a State
            receives notice under subsection (a) of an adverse action, the
            State may appeal the action, in whole or in part, to the
            Departmental Appeals Board established in the Department of
            Health and Human Services (in this section referred to as the
            `Board') by filing an appeal with the Board.
                ``(2) Procedural rules.--The Board shall consider an appeal
            filed by a State under paragraph (1) on the basis of such
            documentation as the State may submit and as the Board may
            require to support the final decision of the Board. In deciding
            whether to uphold an adverse action or any portion of such an
            action, the Board shall conduct a thorough review of the issues
            and take into account all relevant evidence. The Board shall
            make a final determination with respect to an appeal filed under
            paragraph (1) not less than 60 days after the date the appeal is
            filed.

        ``(c) Judicial Review of Adverse Decision.--
                ``(1) In general.--Within 90 days after the date of a final
            decision by the Board under this section with respect to an
            adverse action taken against a State, the State may obtain
            judicial review of the final decision (and the findings
            incorporated into the final decision) by filing an action in--
                        ``(A) the district court of the United States for
                    the judicial district in which the principal or
                    headquarters office of the State agency is located; or
                        ``(B) the United States District Court for the
                    District of Columbia.
                ``(2) Procedural rules.--The district court in which an
            action is filed under paragraph (1) shall review the final
            decision of the Board on the record established in the
            administrative proceeding, in accordance with the standards of
            review prescribed by subparagraphs (A) through (E) of section
            706(2) of title 5, United States Code. The review shall be on
            the basis of the documents and supporting data submitted to the
            Board.

    ``SEC. 411. <<NOTE: 42 USC 611.>>  DATA COLLECTION AND REPORTING.

        ``(a) Quarterly Reports by States.--
                ``(1) General reporting requirement.--
                        ``(A) Contents of report.--Each eligible State shall
                    collect on a monthly basis, and report to the Secretary
                    on a quarterly basis, the following disaggregated case
                    record information on the families receiving assistance
                    under the State program funded under this part:
                              ``(i) The county of residence of the family.

    [[Page 110 STAT. 2149]]

                              ``(ii) Whether a child receiving such
                          assistance or an adult in the family is disabled.
                              ``(iii) The ages of the members of such
                          families.
                              ``(iv) The number of individuals in the
                          family, and the relation of each family member to
                          the youngest child in the family.
                              ``(v) The employment status and earnings of
                          the employed adult in the family.
                              ``(vi) The marital status of the adults in the
                          family, including whether such adults have never
                          married, are widowed, or are divorced.
                              ``(vii) The race and educational status of
                          each adult in the family.
                              ``(viii) The race and educational status of
                          each child in the family.
                              ``(ix) Whether the family received subsidized
                          housing, medical assistance under the State plan
                          approved under title XIX, food stamps, or
                          subsidized child care, and if the latter 2, the
                          amount received.
                              ``(x) The number of months that the family has
                          received each type of assistance under the
                          program.
                              ``(xi) If the adults participated in, and the
                          number of hours per week of participation in, the
                          following activities:
                                        ``(I) Education.
                                        ``(II) Subsidized private sector
                                    employment.
                                        ``(III) Unsubsidized employment.
                                        ``(IV) Public sector employment,
                                    work experience, or community service.
                                        ``(V) Job search.
                                        ``(VI) Job skills training or on-
                                    the-job training.
                                        ``(VII) Vocational education.
                              ``(xii) Information necessary to calculate
                          participation rates under section 407.
                              ``(xiii) The type and amount of assistance
                          received under the program, including the amount
                          of and reason for any reduction of assistance
                          (including sanctions).
                              ``(xiv) Any amount of unearned income received
                          by any member of the family.
                              ``(xv) The citizenship of the members of the
                          family.
                              ``(xvi) From a sample of closed cases, whether
                          the family left the program, and if so, whether
                          the family left due to--
                                        ``(I) employment;
                                        ``(II) marriage;
                                        ``(III) the prohibition set forth in
                                    section 408(a)(7);
                                        ``(IV) sanction; or
                                        ``(V) State policy.
                        ``(B) Use of estimates.--
                              ``(i) Authority.--A State may comply with
                          subparagraph (A) by submitting an estimate which
                          is obtained through the use of scientifically
                          acceptable sampling methods approved by the
                          Secretary.
                              ``(ii) Sampling and other methods.--The
                          Secretary shall provide the States with such case
                          sampling plans and data collection procedures as
                          the Secretary

    [[Page 110 STAT. 2150]]

                          deems necessary to produce statistically valid
                          estimates of the performance of State programs
                          funded under this part. The Secretary may develop
                          and implement procedures for verifying the quality
                          of data submitted by the States.
                ``(2) Report on use of federal funds to cover administrative
            costs and overhead.--The report required by paragraph (1) for a
            fiscal quarter shall include a statement of the percentage of
            the funds paid to the State under this part for the quarter that
            are used to cover administrative costs or overhead.
                ``(3) Report on state expenditures on programs for needy
            families.--The report required by paragraph (1) for a fiscal
            quarter shall include a statement of the total amount expended
            by the State during the quarter on programs for needy families.
                ``(4) Report on noncustodial parents participating in work
            activities.--The report required by paragraph (1) for a fiscal
            quarter shall include the number of noncustodial
            parents in the State who participated in work activities (as
            defined in section 407(d)) during the quarter.
                ``(5) Report on transitional services.--The report required
            by paragraph (1) for a fiscal quarter shall include the total
            amount expended by the State during the quarter to provide
            transitional services to a family that has ceased to receive
            assistance under this part because of employment, along with a
            description of such services.
                ``(6) Regulations.--The Secretary shall prescribe such
            regulations as may be necessary to define the data elements with
            respect to which reports are required by this subsection.

        ``(b) Annual Reports to the Congress by the Secretary.--Not later
    than 6 months after the end of fiscal year 1997, and each fiscal year
    thereafter, the Secretary shall transmit to the Congress a report
    describing--
                ``(1) whether the States are meeting--
                        ``(A) the participation rates described in section
                    407(a); and
                        ``(B) the objectives of--
                              ``(i) increasing employment and earnings of
                          needy families, and child support collections; and
                              ``(ii) decreasing out-of-wedlock pregnancies
                          and child poverty;
                ``(2) the demographic and financial characteristics of
            families applying for assistance, families receiving assistance,
            and families that become ineligible to receive assistance;
                ``(3) the characteristics of each State program funded under
            this part; and
                ``(4) the trends in employment and earnings of needy
            families with minor children living at home.

    ``SEC. 412. <<NOTE: 42 USC 612.>>  DIRECT FUNDING AND ADMINISTRATION BY
                INDIAN TRIBES.

        ``(a) Grants for Indian Tribes.--
                ``(1) Tribal family assistance grant.--
                        ``(A) In general.--For each of fiscal years 1997,
                    1998, 1999, 2000, 2001, and 2002, the Secretary shall
                    pay to each Indian tribe that has an approved tribal
                    family assistance plan a tribal family assistance grant
                    for the fiscal

    [[Page 110 STAT. 2151]]

                    year in an amount equal to the amount determined under
                    subparagraph (B), and shall reduce the grant payable
                    under section 403(a)(1) to any State in which lies the
                    service area or areas of the Indian tribe by that
                    portion of the amount so determined that is attributable
                    to expenditures by the State.
                        ``(B) Amount determined.--
                              ``(i) In general.--The amount determined under
                          this subparagraph is an amount equal to the total
                          amount of the Federal payments to a State or
                          States under section 403 (as in effect during such
                          fiscal year) for fiscal year 1994 attributable to
                          expenditures (other than child care expenditures)
                          by the State or States under parts A and F (as so
                          in effect) for fiscal year 1994 for Indian
                          families residing in the service area or areas
                          identified by the Indian tribe pursuant to
                          subsection (b)(1)(C) of this section.
                              ``(ii) Use of state submitted data.--
                                        ``(I) In general.--The Secretary
                                    shall use State submitted data to make
                                    each determination under clause (i).
                                        ``(II) Disagreement with
                                    determination.--If an Indian tribe or
                                    tribal organization disagrees with State
                                    submitted data described under subclause
                                    (I), the Indian tribe or tribal
                                    organization may submit to the Secretary
                                    such additional information as may be
                                    relevant to making the determination
                                    under clause (i) and the Secretary may
                                    consider such information before making
                                    such determination.
                ``(2) Grants for indian tribes that received
            jobs funds.--
                        ``(A) In general.--The Secretary shall pay to each
                    eligible Indian tribe for each of fiscal years 1997,
                    1998, 1999, 2000, 2001, and 2002 a grant in an amount
                    equal to the amount received by the Indian tribe in
                    fiscal year 1994 under section 482(i) (as in effect
                    during fiscal
                    year 1994).
                        ``(B) Eligible indian tribe.--For purposes of
                    subparagraph (A), the term `eligible Indian tribe' means
                    an Indian tribe or Alaska Native organization that
                    conducted a job opportunities and basic skills training
                    program in fiscal year 1995 under section 482(i) (as in
                    effect during fiscal year 1995).
                        ``(C) Use of grant.--Each Indian tribe to which a
                    grant is made under this paragraph shall use the grant
                    for the purpose of operating a program to make work
                    activities available to members of the Indian tribe.
                        ``(D) Appropriation.--Out of any money in the
                    Treasury of the United States not otherwise
                    appropriated, there are appropriated $7,638,474 for each
                    fiscal year specified in subparagraph (A) for grants
                    under subparagraph (A).

        ``(b) 3-Year Tribal Family Assistance Plan.--
                ``(1) In general.--Any Indian tribe that desires to receive
            a tribal family assistance grant shall submit to the Secretary a
            3-year tribal family assistance plan that--

    [[Page 110 STAT. 2152]]

                        ``(A) outlines the Indian tribe's approach to
                    providing welfare-related services for the 3-year
                    period, consistent with this section;
                        ``(B) specifies whether the welfare-related services
                    provided under the plan will be provided by the Indian
                    tribe or through agreements, contracts, or compacts with
                    intertribal consortia, States, or other entities;
                        ``(C) identifies the population and service area or
                    areas to be served by such plan;
                        ``(D) provides that a family receiving assistance
                    under the plan may not receive duplicative assistance
                    from other State or tribal programs funded under this
                    part;
                        ``(E) identifies the employment opportunities in or
                    near the service area or areas of the Indian tribe and
                    the manner in which the Indian tribe will cooperate and
                    participate in enhancing such opportunities for
                    recipients of assistance under the plan consistent with
                    any applicable State standards; and
                        ``(F) applies the fiscal accountability provisions
                    of section 5(f)(1) of the Indian Self-Determination and
                    Education Assistance Act (25 U.S.C. 450c(f)(1)),
                    relating to the submission of a single-agency audit
                    report required by chapter 75 of title 31, United States
                    Code.
                ``(2) Approval.--The Secretary shall approve each tribal
            family assistance plan submitted in accordance with paragraph
            (1).
                ``(3) Consortium of tribes.--Nothing in this section shall
            preclude the development and submission of a single tribal
            family assistance plan by the participating Indian tribes of an
            intertribal consortium.

        ``(c) Minimum Work Participation Requirements and Time Limits.--The
    Secretary, with the participation of Indian tribes, shall establish for
    each Indian tribe receiving a grant under this section minimum work
    participation requirements, appropriate time limits for receipt of
    welfare-related services under the grant, and penalties against
    individuals--
                ``(1) consistent with the purposes of this section;
                ``(2) consistent with the economic conditions and resources
            available to each tribe; and
                ``(3) similar to comparable provisions in section 407(e).

        ``(d) Emergency Assistance.--Nothing in this section shall preclude
    an Indian tribe from seeking emergency assistance from any Federal loan
    program or emergency fund.
        ``(e) Accountability.--Nothing in this section shall be construed to
    limit the ability of the Secretary to maintain program funding
    accountability consistent with--
                ``(1) generally accepted accounting principles; and
                ``(2) the requirements of the Indian Self-Determination and
            Education Assistance Act (25 U.S.C. 450 et seq.).

        ``(f) Penalties.--
                ``(1) Subsections (a)(1), (a)(6), and (b) of section 409,
            shall apply to an Indian tribe with an approved tribal
            assistance plan in the same manner as such subsections apply to
            a State.
                ``(2) Section 409(a)(3) shall apply to an Indian tribe with
            an approved tribal assistance plan by substituting `meet minimum
            work participation requirements established under section
            412(c)' for `comply with section 407(a)'.

    [[Page 110 STAT. 2153]]

        ``(g) Data Collection and Reporting.--Section 411 shall apply to an
    Indian tribe with an approved tribal family assistance plan.
        ``(h) Special Rule for Indian Tribes in Alaska.--
                ``(1) In general.--Notwithstanding any other provision of
            this section, and except as provided in paragraph (2), an Indian
            tribe in the State of Alaska that receives a tribal family
            assistance grant under this section shall use the grant to
            operate a program in accordance with requirements comparable to
            the requirements applicable to the program of the State of
            Alaska funded under this part. Comparability of programs shall
            be established on the basis of program criteria developed by the
            Secretary in consultation with the State of Alaska and such
            Indian tribes.
                ``(2) Waiver.--An Indian tribe described in paragraph (1)
            may apply to the appropriate State authority to receive a waiver
            of the requirement of paragraph (1).

    ``SEC. 413. <<NOTE: 42 USC 613.>>  RESEARCH, EVALUATIONS, AND NATIONAL
                STUDIES.

        ``(a) Research.--The Secretary shall conduct research on the
    benefits, effects, and costs of operating different State programs
    funded under this part, including time limits relating to eligibility
    for assistance. The research shall include studies on the effects of
    different programs and the operation of such programs on welfare
    dependency, illegitimacy, teen pregnancy, employment rates, child well-
    being, and any other area the Secretary deems appropriate. The Secretary
    shall also conduct research on the costs and benefits of State
    activities under section 409.
        ``(b) Development and Evaluation of Innovative Approaches To
    Reducing Welfare Dependency and Increasing Child Well-Being.--
                ``(1) In general.--The Secretary may assist States in
            developing, and shall evaluate, innovative approaches for
            reducing welfare dependency and increasing the well-being of
            minor children living at home with respect to recipients of
            assistance under programs funded under this part. The Secretary
            may provide funds for training and technical assistance to carry
            out the approaches developed pursuant to this paragraph.
                ``(2) Evaluations.--In performing the evaluations under
            paragraph (1), the Secretary shall, to the maximum extent
            feasible, use random assignment as an evaluation methodology.

        ``(c) Dissemination of Information.--The Secretary shall develop
    innovative methods of disseminating information on any research,
    evaluations, and studies conducted under this section, including the
    facilitation of the sharing of information and best practices among
    States and localities through the use of computers and other
    technologies.
        ``(d) Annual Ranking of States and Review of Most and Least
    Successful Work Programs.--
                ``(1) Annual ranking of states.--The Secretary shall rank
            annually the States to which grants are paid under section 403
            in the order of their success in placing recipients of
            assistance under the State program funded under this part into
            long-term private sector jobs, reducing the overall welfare
            caseload, and, when a practicable method for calculating this
            information becomes available, diverting individuals from
            formally applying to the State program and receiving assistance.

    [[Page 110 STAT. 2154]]

            In ranking States under this subsection, the Secretary shall
            take into account the average number of minor children living at
            home in families in the State that have incomes below the
            poverty line and the amount of funding provided each State for
            such families.
                ``(2) Annual review of most and least successful work
            programs.--The Secretary shall review the programs of the 3
            States most recently ranked highest under paragraph (1) and the
            3 States most recently ranked lowest under paragraph (1) that
            provide parents with work experience, assistance in finding
            employment, and other work preparation activities and support
            services to enable the families of such parents to leave the
            program and become self-sufficient.

        ``(e) Annual Ranking of States and Review of Issues Relating to Out-
    of-Wedlock Births.--
                ``(1) Annual ranking of states.--
                        ``(A) In general.--The Secretary shall annually rank
                    States to which grants are made under section 403 based
                    on the following ranking factors:
                              ``(i) Absolute out-of-wedlock ratios.--The
                          ratio represented by--
                                        ``(I) the total number of out-of-
                                    wedlock births in families receiving
                                    assistance under the State program under
                                    this part in the State for the most
                                    recent fiscal year for which information
                                    is available; over
                                        ``(II) the total number of births in
                                    families receiving assistance under the
                                    State program under this part in the
                                    State for such year.
                              ``(ii) Net changes in the out-of-wedlock
                          ratio.--The difference between the ratio described
                          in subparagraph (A)(i) with respect to a State for
                          the most recent fiscal year for which such
                          information is available and the ratio with
                          respect to the State for the immediately preceding
                          year.
                ``(2) Annual review.--The Secretary shall review the
            programs of the 5 States most recently ranked highest under
            paragraph (1) and the 5 States most recently ranked the lowest
            under paragraph (1).

        ``(f) State-Initiated Evaluations.--A State shall be eligible to
    receive funding to evaluate the State program funded under this part
    if--
                ``(1) the State submits a proposal to the Secretary for the
            evaluation;
                ``(2) the Secretary determines that the design and approach
            of the evaluation is rigorous and is likely to yield information
            that is credible and will be useful to other States; and
                ``(3) unless otherwise waived by the Secretary, the State
            contributes to the cost of the evaluation, from non-Federal
            sources, an amount equal to at least 10 percent of the cost of
            the evaluation.

        ``(g) Report on Circumstances of Certain Children and Families.--
                ``(1) In general.--Beginning 3 years after the date of the
            enactment of this Act, the Secretary of Health and Human
            Services shall prepare and submit to the Committees on Ways and
            Means and on Economic and Educational Opportunities

    [[Page 110 STAT. 2155]]

            of the House of Representatives and to the Committees on Finance
            and on Labor and Resources of the Senate annual reports that
            examine in detail the matters described in paragraph (2) with
            respect to each of the following groups for the period after
            such enactment:
                        ``(A) Individuals who were children in families that
                    have become ineligible for assistance under a State
                    program funded under this part by reason of having
                    reached a time limit on the provision of such
                    assistance.
                        ``(B) Children born after such date of enactment to
                    parents who, at the time of such birth, had not attained
                    20 years of age.
                        ``(C) Individuals who, after such date of enactment,
                    became parents before attaining 20 years of age.
                ``(2) Matters described.--The matters described in this
            paragraph are the following:
                        ``(A) The percentage of each group that has dropped
                    out of secondary school (or the equivalent), and the
                    percentage of each group at each level of educational
                    attainment.
                        ``(B) The percentage of each group that is employed.
                        ``(C) The percentage of each group that has been
                    convicted of a crime or has been adjudicated as a
                    delinquent.
                        ``(D) The rate at which the members of each group
                    are born, or have children, out-of-wedlock, and the
                    percentage of each group that is married.
                        ``(E) The percentage of each group that continues to
                    participate in State programs funded under this part.
                        ``(F) The percentage of each group that has health
                    insurance provided by a private entity (broken down by
                    whether the insurance is provided through an employer or
                    otherwise), the percentage that has health insurance
                    provided by an agency of government, and the percentage
                    that does not have health insurance.
                        ``(G) The average income of the families of the
                    members of each group.
                        ``(H) Such other matters as the Secretary deems
                    appropriate.

        ``(h) Funding of Studies and Demonstrations.--
                ``(1) In general.--Out of any money in the Treasury of the
            United States not otherwise appropriated, there are appropriated
            $15,000,000 for each of fiscal years 1997 through 2002 for the
            purpose of paying--
                        ``(A) the cost of conducting the research described
                    in subsection (a);
                        ``(B) the cost of developing and evaluating
                    innovative approaches for reducing welfare dependency
                    and increasing the well-being of minor children under
                    subsection (b);
                        ``(C) the Federal share of any State-initiated study
                    approved under subsection (f); and
                        ``(D) an amount determined by the Secretary to be
                    necessary to operate and evaluate demonstration
                    projects, relating to this part, that are in effect or
                    approved under section 1115 as of September 30, 1995,
                    and are continued after such date.
                ``(2) Allocation.--Of the amount appropriated under
            paragraph (1) for a fiscal year--

    [[Page 110 STAT. 2156]]

                        ``(A) 50 percent shall be allocated for the pur-
                    poses described in subparagraphs (A) and (B) of
                    paragraph (1), and
                        ``(B) 50 percent shall be allocated for the purposes
                    described in subparagraphs (C) and (D) of paragraph (1).
                ``(3) Demonstrations of innovative strategies.--The
            Secretary may implement and evaluate demonstrations of
            innovative and promising strategies which--
                        ``(A) provide one-time capital funds to establish,
                    expand, or replicate programs;
                        ``(B) test performance-based grant-to-loan financing
                    in which programs meeting performance targets receive
                    grants while programs not meeting such targets repay
                    funding on a prorated basis; and
                        ``(C) test strategies in multiple States and types
                    of communities.

        ``(i) Child Poverty Rates.--
                ``(1) In general.--Not later than 90 days after the date of
            the enactment of this part, and annually thereafter, the chief
            executive officer of each State shall submit to the Secretary a
            statement of the child poverty rate in the State as of such date
            of enactment or the date of the most recent prior statement
            under this paragraph.
                ``(2) Submission of corrective action plan.--Not later than
            90 days after the date a State submits a statement under
            paragraph (1) which indicates that, as a result of the
            amendments made by section 103 of the Personal Responsibility
            and Work Opportunity Reconciliation Act of 1996, the child
            poverty rate of the State has increased by 5 percent or more
            since the most recent prior statement under paragraph (1), the
            State shall prepare and submit to the Secretary a corrective
            action plan in accordance with paragraph (3).
                ``(3) Contents of plan.--A corrective action plan submitted
            under paragraph (2) shall outline the manner in which the State
            will reduce the child poverty rate in the State. The plan shall
            include a description of the actions to be taken by the State
            under such plan.
                ``(4) Compliance with plan.--A State that submits a
            corrective action plan that the Secretary has found contains the
            information required by this subsection shall implement the
            corrective action plan until the State determines that the child
            poverty rate in the State is less than the lowest child poverty
            rate on the basis of which the State was required to submit the
            corrective action plan.
                ``(5) Methodology.--The Secretary <<NOTE: Regulations.>>
            shall prescribe regulations establishing the methodology by
            which a State shall determine the child poverty rate in the
            State. The methodology shall take into account factors including
            the number of children who receive free or reduced-price
            lunches, the number of food stamp households, and the county-by-
            county estimates of children in poverty as determined by the
            Census Bureau.

    ``SEC. 414. <<NOTE: 42 USC 614.>>  STUDY BY THE CENSUS BUREAU.

        ``(a) In General.--The Bureau of the Census shall continue to
    collect data on the 1992 and 1993 panels of the Survey of Income and
    Program Participation as necessary to obtain such information as will
    enable interested persons to evaluate the impact

    [[Page 110 STAT. 2157]]

    of the amendments made by title I of the Personal Responsibility and
    Work Opportunity Reconciliation Act of 1996 on a random national sample
    of recipients of assistance under State programs funded under this part
    and (as appropriate) other low-income families, and in doing so, shall
    pay particular attention to the issues of out-of-wedlock birth, welfare
    dependency, the beginning and end of welfare spells, and the causes of
    repeat welfare spells, and shall obtain information about the status of
    children participating in such panels.
        ``(b) Appropriation.--Out of any money in the Treasury of the United
    States not otherwise appropriated, there are appropriated $10,000,000
    for each of fiscal years 1996, 1997, 1998, 1999, 2000, 2001, and 2002
    for payment to the Bureau of the Census to carry out subsection (a).

    ``SEC. 415. <<NOTE: 42 USC 615.>>  WAIVERS.

        ``(a) Continuation of Waivers.--
                ``(1) Waivers in effect on date of enactment of welfare
            reform.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), if any waiver granted to a State under
                    section 1115 of this Act or otherwise which relates to
                    the provision of assistance under a State plan under
                    this part (as in effect on September 30, 1996) is in
                    effect as of the date of the enactment of the Personal
                    Responsibility and Work Opportunity Reconciliation Act
                    of 1996, the amendments made by the Personal
                    Responsibility and Work Opportunity Reconciliation Act
                    of 1996 (other than by section 103(c) of the Personal
                    Responsibility and Work Opportunity Reconciliation Act
                    of 1996) shall not apply with respect to the State
                    before the expiration (determined without regard to any
                    extensions) of the waiver to the extent such amendments
                    are inconsistent with the waiver.
                        ``(B) Financing limitation.--Notwithstanding any
                    other provision of law, beginning with fiscal year 1996,
                    a State operating under a waiver described in
                    subparagraph (A) shall be entitled to payment under
                    section 403 for the fiscal year, in lieu of any other
                    payment provided for in the waiver.
                ``(2) Waivers granted subsequently.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), if any waiver granted to a State under
                    section 1115 of this Act or otherwise which relates to
                    the provision of assistance under a State plan under
                    this part (as in effect on September 30, 1996) is
                    submitted to the Secretary before the date of the
                    enactment of the Personal Responsibility and Work
                    Opportunity Reconciliation Act of 1996 and approved by
                    the Secretary on or before July 1, 1997, and the State
                    demonstrates to the satisfaction of the Secretary that
                    the waiver will not result in Federal expenditures under
                    title IV of this Act (as in effect without regard to the
                    amendments made by the Personal Responsibility and Work
                    Opportunity Reconciliation Act of 1996) that are greater
                    than would occur in the absence of the waiver, the
                    amendments made by the Personal Responsibility and Work
                    Opportunity Reconciliation Act of 1996 (other than by
                    section 103(c) of the Personal Responsibility and Work

    [[Page 110 STAT. 2158]]

                    Opportunity Reconciliation Act of 1996) shall not apply
                    with respect to the State before the expiration
                    (determined without regard to any extensions) of the
                    waiver to the extent the amendments made by the Personal
                    Responsibility and Work Opportunity Reconciliation Act
                    of 1996 are inconsistent with the waiver.
                        ``(B) No effect on new work requirements.--
                    Notwithstanding subparagraph (A), a waiver granted under
                    section 1115 or otherwise which relates to the provision
                    of assistance under a State program funded under this
                    part (as in effect on September 30, 1996) shall not
                    affect the applicability of section 407 to the State.

        ``(b) State Option To Terminate Waiver.--
                ``(1) In general.--A State may terminate a waiver described
            in subsection (a) before the expiration of the waiver.
                ``(2) Report.--A State which terminates a waiver under
            paragraph (1) shall submit a report to the Secretary summarizing
            the waiver and any available information concerning the result
            or effect of the waiver.
                ``(3) Hold harmless provision.--
                        ``(A) In general.--Notwithstanding any other
                    provision of law, a State that, not later than the date
                    described in subparagraph (B) of this paragraph, submits
                    a written request to terminate a waiver described in
                    subsection (a) shall be held harmless for accrued cost
                    neutrality liabilities incurred under the waiver.
                        ``(B) Date described.--The date described in this
                    subparagraph is 90 days following the adjournment of the
                    first regular session of the State legislature that
                    begins after the date of the enactment of the Personal
                    Responsibility and Work Opportunity Reconciliation Act
                    of 1996.

        ``(c) Secretarial Encouragement of Current Waivers.--The Secretary
    shall encourage any State operating a waiver described in subsection (a)
    to continue the waiver and to evaluate, using random sampling and other
    characteristics of accepted scientific evaluations, the result or effect
    of the waiver.
        ``(d) Continuation of Individual Waivers.--A State may elect to
    continue 1 or more individual waivers described in sub-
    section (a).

    ``SEC. 416. <<NOTE: 42 USC 616.>>  ADMINISTRATION.

        ``The programs under this part and part D shall be administered by
    an Assistant Secretary for Family Support within the Department of
    Health and Human Services, who shall be appointed by the President, by
    and with the advice and consent of the Senate, and who shall be in
    addition to any other Assistant Secretary of Health and Human Services
    provided for by law, and the Secretary shall reduce the Federal
    workforce within the Department of Health and Human Services by an
    amount equal to the sum of 75 percent of the full-time equivalent
    positions at such Department that relate to any direct spending program,
    or any program funded through discretionary spending, that has been
    converted into a block grant program under the Personal Responsibility
    and Work Opportunity Act of 1996 and the amendments made by such Act,
    and by an amount equal to 75 percent of that portion of the total full-
    time equivalent departmental management positions at such Department
    that bears the same relationship to the amount

    [[Page 110 STAT. 2159]]

    appropriated for any direct spending program, or any program funded
    through discretionary spending, that has been converted into a block
    grant program under the Personal Responsibility and Work Opportunity Act
    of 1996 and the amendments made by such Act, as such amount relates to
    the total amount appropriated for use by such Department, and,
    notwithstanding any other provision of law, the Secretary shall take
    such actions as may be necessary, including reductions in force actions,
    consistent with sections 3502 and 3595 of title 5, United States Code,
    to reduce the full-time equivalent positions within the Department of
    Health and Human Services by 245 full-time equivalent positions related
    to the program converted into a block grant under the amendment made by
    section 2103 of the Personal Responsibility and Work Opportunity Act of
    1996, and by 60 full-time equivalent managerial positions in the
    Department.

    ``SEC. 417. <<NOTE: 42 USC 617.>>  LIMITATION ON FEDERAL AUTHORITY.

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

    ``SEC. 419. <<NOTE: 42 USC 619.>>  DEFINITIONS.

        ``As used in this part:
                ``(1) Adult.--The term `adult' means an individual who is
            not a minor child.
                ``(2) Minor child.--The term `minor child' means an
            individual who--
                        ``(A) has not attained 18 years of age; or
                        ``(B) has not attained 19 years of age and is a
                    full-time student in a secondary school (or in the
                    equivalent level of vocational or technical training).
                ``(3) Fiscal year.--The term `fiscal year' means any 12-
            month period ending on September 30 of a calendar year.
                ``(4) Indian, indian tribe, and tribal organization.--
                        ``(A) In general.--Except as provided in
                    subparagraph (B), the terms `Indian', `Indian tribe',
                    and `tribal organization' have the meaning given such
                    terms by section 4 of the Indian Self-Determination and
                    Education Assistance Act (25 U.S.C. 450b).
                        ``(B) Special rule for indian tribes in alaska.--The
                    term `Indian tribe' means, with respect to the State of
                    Alaska, only the Metlakatla Indian Community of the
                    Annette Islands Reserve and the following Alaska Native
                    regional nonprofit corporations:
                              ``(i) Arctic Slope Native Association.
                              ``(ii) Kawerak, Inc.
                              ``(iii) Maniilaq Association.
                              ``(iv) Association of Village Council
                          Presidents.
                              ``(v) Tanana Chiefs Conference.
                              ``(vi) Cook Inlet Tribal Council.
                              ``(vii) Bristol Bay Native Association.
                              ``(viii) Aleutian and Pribilof Island
                          Association.
                              ``(ix) Chugachmuit.
                              ``(x) Tlingit Haida Central Council.
                              ``(xi) Kodiak Area Native Association.
                              ``(xii) Copper River Native Association.

    [[Page 110 STAT. 2160]]

                ``(5) State.--Except as otherwise specifically provided, the
            term `State' means the 50 States of the United States,
            the District of Columbia, the Commonwealth of Puerto Rico, the
            United States Virgin Islands, Guam, and American Samoa.''.

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

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

        ``(a) Limitation on Total Payments to Each Territory.--
    Notwithstanding any other provision of this Act, the total amount
    certified by the Secretary of Health and Human Services under titles I,
    X, XIV, and XVI, under parts A and E of title IV, and under subsection
    (b) of this section, for payment to any territory for a fiscal year
    shall not exceed the ceiling amount for the territory for the fiscal
    year.
        ``(b) Entitlement to Matching Grant.--
                ``(1) In general.--Each territory shall be entitled to
            receive from the Secretary for each fiscal year a grant in an
            amount equal to 75 percent of the amount (if any) by which--
                        ``(A) the total expenditures of the territory during
                    the fiscal year under the territory programs funded
                    under parts A and E of title IV; exceeds
                        ``(B) the sum of--
                              ``(i) the amount of the family assistance
                          grant payable to the territory without regard to
                          section
                          409; and
                              ``(ii) the total amount expended by the
                          territory during fiscal year 1995 pursuant to
                          parts A and F of title IV (as so in effect), other
                          than for child care.
                ``(2) Appropriation.--Out of any money in the Treasury of
            the United States not otherwise appropriated, there are
            appropriated for fiscal years 1997 through 2002, such sums as
            are necessary for grants under this paragraph.

        ``(c) Definitions.--As used in this section:
                ``(1) Territory.--The term `territory' means Puerto Rico,
            the Virgin Islands, Guam, and American Samoa.
                ``(2) Ceiling amount.--The term `ceiling amount' means, with
            respect to a territory and a fiscal year, the mandatory ceiling
            amount with respect to the territory, reduced for the fiscal
            year in accordance with subsection (e), and reduced by the
            amount of any penalty imposed on the territory under any
            provision of law specified in subsection (a) during the fiscal
            year.
                ``(3) Family assistance grant.--The term `family assistance
            grant' has the meaning given such term by section 403(a)(1)(B).
                ``(4) Mandatory ceiling amount.--The term `mandatory ceiling
            amount' means--
                        ``(A) $107,255,000 with respect to Puerto Rico;
                        ``(B) $4,686,000 with respect to Guam;

    [[Page 110 STAT. 2161]]

                        ``(C) $3,554,000 with respect to the Virgin
                    Islands; and
                        ``(D) $1,000,000 with respect to American Samoa.
                ``(5) Total amount expended by the territory.--The term
            `total amount expended by the territory'--
                        ``(A) does not include expenditures during the
                    fiscal year from amounts made available by the Federal
                    Government; and
                        ``(B) when used with respect to fiscal year 1995,
                    also does not include--
                              ``(i) expenditures during fiscal year 1995
                          under subsection (g) or (i) of section 402 (as in
                          effect on September 30, 1995); or
                              ``(ii) any expenditures during fiscal year
                          1995 for which the territory (but for section
                          1108, as in effect on September 30, 1995) would
                          have received reimbursement from the Federal
                          Government.

        ``(d) Authority To Transfer Funds to Certain Programs.--A territory
    to which an amount is paid under subsection (b) of this section may use
    the amount in accordance with section 404(d).
        ``(e) Maintenance of Effort.--The ceiling amount with respect to a
    territory shall be reduced for a fiscal year by an amount equal to the
    amount (if any) by which--
                ``(1) the total amount expended by the territory under all
            programs of the territory operated pursuant to the provisions of
            law specified in subsection (a) (as such provisions were in
            effect for fiscal year 1995) for fiscal year 1995; exceeds
                ``(2) the total amount expended by the territory under all
            programs of the territory that are funded under the provisions
            of law specified in subsection (a) for the fiscal year that
            immediately precedes the fiscal year referred to in the matter
            preceding paragraph (1).''.

        (c) Elimination of Child Care Programs Under the Social Security
    Act.--
                (1) AFDC and transitional child care programs.--Section 402
            (42 U.S.C. 602) is amended by striking sub-
            section (g).
                (2) At-risk child care program.--
                        (A) Authorization.--Section 402 (42 U.S.C. 602) is
                    amended by striking subsection (i).
                        (B) Funding provisions.--Section 403 (42 U.S.C. 603)
                    is amended by striking subsection (n).

    SEC. 104. <<NOTE: 42 USC 604a.>>  SERVICES PROVIDED BY CHARITABLE,
                RELIGIOUS, OR
                PRIVATE ORGANIZATIONS.

        (a) In General.--
                (1) State options.--A State may--
                        (A) administer and provide services under the
                    programs described in subparagraphs (A) and (B)(i) of
                    paragraph (2) through contracts with charitable,
                    religious, or private organizations; and
                        (B) provide beneficiaries of assistance under the
                    programs described in subparagraphs (A) and (B)(ii) of
                    paragraph (2) with certificates, vouchers, or other
                    forms of disbursement which are redeemable with such
                    organizations.

    [[Page 110 STAT. 2162]]

                (2) Programs described.--The programs described in this
            paragraph are the following programs:
                        (A) A State program funded under part A of title IV
                    of the Social Security Act (as amended by section 103(a)
                    of this Act).
                        (B) Any other program established or modified under
                    title I or II of this Act, that--
                              (i) permits contracts with organizations; or
                              (ii) permits certificates, vouchers, or other
                          forms of disbursement to be provided to
                          beneficiaries, as a means of providing assistance.

        (b) Religious Organizations <<NOTE: Contracts.>> .--The purpose of
    this section is to allow States to contract with religious
    organizations, or to allow religious organizations to accept
    certificates, vouchers, or other forms of disbursement under any program
    described in subsection (a)(2), on the same basis as any other
    nongovernmental provider without impairing the religious character of
    such organizations, and without diminishing the religious freedom of
    beneficiaries of assistance funded under such program.

        (c) Nondiscrimination Against Religious Organizations.--In the event
    a State exercises its authority under subsection (a), religious
    organizations are eligible, on the same basis as any other private
    organization, as contractors to provide assistance, or to accept
    certificates, vouchers, or other forms of disbursement, under any
    program described in subsection (a)(2) so long as the programs are
    implemented consistent with the Establishment Clause of the United
    States Constitution. Except as provided in subsection (k), neither the
    Federal Government nor a State receiving funds under such programs shall
    discriminate against an organization which is or applies to be a
    contractor to provide assistance, or which accepts certificates,
    vouchers, or other forms of disbursement, on the basis that the
    organization has a religious character.
        (d) Religious Character and Freedom.--
                (1) Religious organizations.--A religious organization with
            a contract described in subsection (a)(1)(A), or which accepts
            certificates, vouchers, or other forms of disbursement under
            subsection (a)(1)(B), shall retain its independence from
            Federal, State, and local governments, including such
            organization's control over the definition, development,
            practice, and expression of its religious beliefs.
                (2) Additional safeguards.--Neither the Federal Government
            nor a State shall require a religious organization to--
                        (A) alter its form of internal governance; or
                        (B) remove religious art, icons, scripture, or other

                    symbols;
            in order to be eligible to contract to provide assistance, or to
            accept certificates, vouchers, or other forms of disbursement,
            funded under a program described in subsection (a)(2).

        (e) Rights of Beneficiaries of Assistance.--
                (1) In general.--If an individual described in paragraph (2)
            has an objection to the religious character of the organization
            or institution from which the individual receives, or would
            receive, assistance funded under any program described in
            subsection (a)(2), the State in which the individual resides
            shall provide such individual (if otherwise eligible for such
            assistance) within a reasonable period of time after the date of
            such objection with assistance from an alternative provider

    [[Page 110 STAT. 2163]]

            that is accessible to the individual and the value of which is
            not less than the value of the assistance which the individual
            would have received from such organization.
                (2) Individual described.--An individual described in this
            paragraph is an individual who receives, applies for, or
            requests to apply for, assistance under a program described in
            subsection (a)(2).

        (f) Employment Practices.--A religious organization's exemption
    provided under section 702 of the Civil Rights Act of 1964 (42 U.S.C.
    2000e-1a) regarding employment practices shall not be affected by its
    participation in, or receipt of funds from, programs described in
    subsection (a)(2).
        (g) Nondiscrimination Against Beneficiaries.--Except as otherwise
    provided in law, a religious organization shall not discriminate against
    an individual in regard to rendering assistance funded under any program
    described in subsection (a)(2) on the basis of religion, a religious
    belief, or refusal to actively participate in a religious practice.
        (h) Fiscal Accountability.--
                (1) In general.--Except as provided in paragraph (2), any
            religious organization contracting to provide assistance funded
            under any program described in subsection (a)(2) shall be
            subject to the same regulations as other contractors to account
            in accord with generally accepted auditing principles for the
            use of such funds provided under such programs.
                (2) Limited audit.--If such organization segregates Federal
            funds provided under such programs into separate accounts, then
            only the financial assistance provided with such funds shall be
            subject to audit.

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

    SEC. 105. <<NOTE: 13 USC 141 note.>>  CENSUS DATA ON GRANDPARENTS AS
                PRIMARY CAREGIVERS FOR THEIR GRANDCHILDREN.

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

    [[Page 110 STAT. 2164]]

                (1) A household in which a grandparent temporarily provides
            a home for a grandchild for a period of weeks or months during
            periods of parental distress.
                (2) A household in which a grandparent provides a home for a
            grandchild and serves as the primary caregiver for the
            grandchild.

    SEC. 106. REPORT ON DATA PROCESSING.

        (a) In General.--Within 6 months after the date of the enactment of
    this Act, the Secretary of Health and Human Services shall prepare and
    submit to the Congress a report on--
                (1) the status of the automated data processing systems
            operated by the States to assist management in the admin-
            istration of State programs under part A of title IV of the
            Social Security Act (whether in effect before or after October
            1, 1995); and
                (2) what would be required to establish a system cap-
            able of--
                        (A) tracking participants in public programs over
                    time; and
                        (B) checking case records of the States to determine
                    whether individuals are participating in public programs
                    of 2 or more States.

        (b) Preferred Contents.--The report required by subsection (a)
    should include--
                (1) a plan for building on the automated data processing
            systems of the States to establish a system with the
            capabilities described in subsection (a)(2); and
                (2) an estimate of the amount of time required to establish
            such a system and of the cost of establishing such a system.

    SEC. 107. <<NOTE: 42 USC 613 note.>>  STUDY ON ALTERNATIVE OUTCOMES
                MEASURES.

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

    SEC. 108. CONFORMING AMENDMENTS TO THE SOCIAL SECURITY ACT.

        (a) Amendments to Title II.--
                (1) Section 205(c)(2)(C)(vi) (42 U.S.C. 405(c)(2)(C)(vi)),
            as so redesignated by section 321(a)(9)(B) of the Social
            Security Independence and Program Improvements Act of 1994, is
            amended--
                        (A) by inserting ``an agency administering a program
                    funded under part A of title IV or'' before ``an agency
                    operating''; and
                        (B) by striking ``A or D of title IV of this Act''
                    and inserting ``D of such title''.

    [[Page 110 STAT. 2165]]

                (2) Section 228(d)(1) (42 U.S.C. 428(d)(1)) is amended by
            inserting ``under a State program funded under'' before ``part A
            of title IV''.

        (b) Amendments to Part B of Title IV.--Section 422(b)(2) (42 U.S.C.
    622(b)(2)) is amended--
                (1) by striking ``plan approved under part A of this title''
            and inserting ``program funded under part A''; and
                (2) by striking ``part E of this title'' and inserting
            ``under the State plan approved under part E''.

        (c) Amendments to Part D of Title IV.--
                (1) Section 451 (42 U.S.C. 651) is amended by striking
            ``aid'' and inserting ``assistance under a State program
            funded''.
                (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is
            amended--
                        (A) by striking ``aid to families with dependent
                    children'' and inserting ``assistance under a State
                    program funded under part A'';
                        (B) by striking ``such aid'' and inserting ``such
                    assistance''; and
                        (C) by striking ``under section 402(a)(26) or'' and
                    inserting ``pursuant to section 408(a)(3) or under
                    section''.
                (3) Section 452(a)(10)(F) (42 U.S.C. 652(a)(10)(F)) is
            amended--
                        (A) by striking ``aid under a State plan approved''
                    and inserting ``assistance under a State program
                    funded''; and
                        (B) by striking ``in accordance with the standards
                    referred to in section 402(a)(26)(B)(ii)'' and inserting
                    ``by the State''.
                (4) Section 452(b) (42 U.S.C. 652(b)) is amended in the
            first sentence by striking ``aid under the State plan approved
            under part A'' and inserting ``assistance under the State
            program funded under part A''.
                (5) Section 452(d)(3)(B)(i) (42 U.S.C. 652(d)(3)(B)(i)) is
            amended by striking ``1115(c)'' and inserting ``1115(b)''.
                (6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C.
            652(g)(2)(A)(ii)(I)) is amended by striking ``aid is being paid
            under the State's plan approved under part A or E'' and
            inserting ``assistance is being provided under the State program
            funded under
            part A''.
                (7) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is amended
            in the matter following clause (iii) by striking ``aid was being
            paid under the State's plan approved under part A or E'' and
            inserting ``assistance was being provided under the State
            program funded under part A''.
                (8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended in
            the matter following subparagraph (B)--
                        (A) by striking ``who is a dependent child'' and
                    inserting ``with respect to whom assistance is being
                    provided under the State program funded under part A'';
                        (B) by inserting ``by the State'' after ``found'';
                    and
                        (C) by striking ``to have good cause for refusing to
                    cooperate under section 402(a)(26)'' and inserting ``to
                    qualify for a good cause or other exception to
                    cooperation pursuant to section 454(29)''.
                (9) Section 452(h) (42 U.S.C. 652(h)) is amended by striking
            ``under section 402(a)(26)'' and inserting ``pursuant to section
            408(a)(3)''.

    [[Page 110 STAT. 2166]]

                (10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is amended by
            striking ``aid under part A of this title'' and inserting
            ``assistance under a State program funded under part A''.
                (11) Section 454(5)(A) (42 U.S.C. 654(5)(A)) is amended--
                        (A) by striking ``under section 402(a)(26)'' and
                    inserting ``pursuant to section 408(a)(3)''; and
                        (B) by striking ``; except that this paragraph shall
                    not apply to such payments for any month following the
                    first month in which the amount collected is sufficient
                    to make such family ineligible for assistance under the
                    State plan approved under part A;'' and inserting a
                    comma.
                (12) Section 454(6)(D) (42 U.S.C. 654(6)(D)) is amended by
            striking ``aid under a State plan approved'' and inserting
            ``assistance under a State program funded''.
                (13) Section 456(a)(1) (42 U.S.C. 656(a)(1)) is amended by
            striking ``under section 402(a)(26)''.
                (14) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is
            amended by striking ``402(a)(26)'' and inserting ``408(a)(3)''.
                (15) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is amended by
            striking ``aid'' and inserting ``assistance under a State
            program funded''.
                (16) Section 469(a) (42 U.S.C. 669(a)) is amended--
                        (A) by striking ``aid under plans approved'' and
                    inserting ``assistance under State programs funded'';
                    and
                        (B) by striking ``such aid'' and inserting ``such
                    assistance''.

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

                          ``406(a)''; and
                        (B) in paragraph (4)--
                              (i) in subparagraph (A)--
                                        (I) by inserting ``would have''
                                    after ``(A)''; and
                                        (II) by inserting ``(as in effect on
                                    June 1, 1995)'' after ``section 402'';
                                    and
                              (ii) in subparagraph (B)(ii), by inserting
                          ``(as in effect on June 1, 1995)'' after
                          ``406(a)''.
                (4) Section 472(h) (42 U.S.C. 672(h)) is amended to read as
            follows:

        ``(h)(1) For purposes of title XIX, any child with respect to whom
    foster care maintenance payments are made under this section is deemed
    to be a dependent child as defined in section 406 (as in effect as of
    June 1, 1995) and deemed to be a recipient

    [[Page 110 STAT. 2167]]

    of aid to families with dependent children under part A of this title
    (as so in effect). For purposes of title XX, any child with respect to
    whom foster care maintenance payments are made under this section is
    deemed to be a minor child in a needy family under a State program
    funded under part A of this title and is deemed to be a recipient of
    assistance under such part.
        ``(2) For purposes of paragraph (1), a child whose costs in a foster
    family home or child care institution are covered by the foster care
    maintenance payments being made with respect to the child's minor
    parent, as provided in section 475(4)(B), shall be considered a child
    with respect to whom foster care maintenance payments are made under
    this section.''.
                (5) Section 473(a)(2) (42 U.S.C. 673(a)(2)) is amended--
                        (A) in subparagraph (A)(i)--
                              (i) by inserting ``(as such sections were in
                          effect on June 1, 1995)'' after ``407'';
                              (ii) by inserting ``(as so in effect)'' after
                          ``specified in section 406(a)''; and
                              (iii) by inserting ``(as such section was in
                          effect on June 1, 1995)'' after ``403'';
                        (B) in subparagraph (B)(i)--
                              (i) by inserting ``would have'' after
                          ``(B)(i)''; and
                              (ii) by inserting ``(as in effect on June 1,
                          1995)'' after ``section 402''; and
                        (C) in subparagraph (B)(ii)(II), by inserting ``(as
                    in effect on June 1, 1995)'' after ``406(a)''.
                (6) Section 473(b) (42 U.S.C. 673(b)) is amended to read as
            follows:

        ``(b)(1) For purposes of title XIX, any child who is described in
    paragraph (3) is deemed to be a dependent child as defined in section
    406 (as in effect as of June 1, 1995) and deemed to be a recipient of
    aid to families with dependent children under part A of this title (as
    so in effect) in the State where such child resides.
        ``(2) For purposes of title XX, any child who is described in
    paragraph (3) is deemed to be a minor child in a needy family under a
    State program funded under part A of this title and deemed to be a
    recipient of assistance under such part.
        ``(3) A child described in this paragraph is any child--
                ``(A)(i) who is a child described in subsection (a)(2), and
                ``(ii) with respect to whom an adoption assistance agreement
            is in effect under this section (whether or not adoption
            assistance payments are provided under the agreement or are
            being made under this section), including any such child who has
            been placed for adoption in accordance with applicable State and
            local law (whether or not an interlocutory or other judicial
            decree of adoption has been issued), or
                ``(B) with respect to whom foster care maintenance payments
            are being made under section 472.

        ``(4) For purposes of paragraphs (1) and (2), a child whose costs in
    a foster family home or child-care institution are covered by the foster
    care maintenance payments being made with respect to the child's minor
    parent, as provided in section 475(4)(B), shall be considered a child
    with respect to whom foster care maintenance payments are being made
    under section 472.''.
        (e) Repeal of Part F of Title IV.--Part F of title IV (42 U.S.C.
    681-687) is repealed.

    [[Page 110 STAT. 2168]]

        (f) Amendment to Title X.--Section 1002(a)(7) (42 U.S.C. 1202(a)(7))
    is amended by striking ``aid to families with dependent children under
    the State plan approved under section 402 of this Act'' and inserting
    ``assistance under a State program funded under part A of title IV''.
        (g) Amendments to Title XI.--
                (1) Section 1109 (42 U.S.C. 1309) is amended by striking
            ``or part A of title IV,''.
                (2) Section 1115 (42 U.S.C. 1315) is amended--
                        (A) in subsection (a)(2)--
                              (i) by inserting ``(A)'' after ``(2)'';
                              (ii) by striking ``403,'';
                              (iii) by striking the period at the end and
                          inserting ``, and''; and
                              (iv) by adding at the end the following new
                          subparagraph:
                ``(B) costs of such project which would not otherwise be a
            permissible use of funds under part A of title IV and which are
            not included as part of the costs of projects under section
            1110, shall to the extent and for the period prescribed by the
            Secretary, be regarded as a permissible use of funds under such
            part.'';
                        (B) in subsection (c)(3), by striking ``the program
                    of aid to families with dependent children'' and
                    inserting ``part A of such title''; and
                        (C) by striking subsection (b) and redesignating
                    subsections (c) and (d) as subsections (b) and (c),
                    respectively.
                (3) Section 1116 (42 U.S.C. 1316) is amended--
                        (A) in each of subsections (a)(1), (b), and (d), by
                    striking ``or part A of title IV,''; and
                        (B) in subsection (a)(3), by striking ``404,''.
                (4) Section 1118 (42 U.S.C. 1318) is amended--
                        (A) by striking ``403(a),'';
                        (B) by striking ``and part A of title IV,''; and
                        (C) by striking ``, and shall, in the case of
                    American Samoa, mean 75 per centum with respect to part
                    A of title IV''.
                (5) Section 1119 (42 U.S.C. 1319) is amended--
                        (A) by striking ``or part A of title IV''; and
                        (B) by striking ``403(a),''.
                (6) Section 1133(a) (42 U.S.C. 1320b-3(a)) is amended by
            striking ``or part A of title IV,''.
                (7) Section 1136 (42 U.S.C. 1320b-6) is repealed.
                (8) Section 1137 (42 U.S.C. 1320b-7) is amended--
                        (A) in subsection (b), by striking paragraph (1) and
                    inserting the following:
                ``(1) any State program funded under part A of title IV of
            this Act;''; and
                        (B) in subsection (d)(1)(B)--
                              (i) by striking ``In this subsection--'' and
                          all that follows through ``(ii) in'' and inserting
                          ``In this subsection, in'';
                              (ii) by redesignating subclauses (I), (II),
                          and (III) as clauses (i), (ii), and (iii); and
                              (iii) by moving such redesignated material 2
                          ems to the left.

    [[Page 110 STAT. 2169]]

        (h) Amendment to Title XIV.--Section 1402(a)(7) (42 U.S.C.
    1352(a)(7)) is amended by striking ``aid to families with dependent
    children under the State plan approved under section 402 of this Act''
    and inserting ``assistance under a State program funded under part A of
    title IV''.
        (i) Amendment to Title XVI as in Effect With Respect to the
    Territories.--Section 1602(a)(11), as in effect without regard to the
    amendment made by section 301 of the Social Security Amendments of 1972
    (42 U.S.C. 1382 note), is amended by striking ``aid under the State plan
    approved'' and inserting ``assistance under a State program funded''.
        (j) Amendment to Title XVI as in Effect With Respect to the
    States.--Section 1611(c)(5)(A) (42 U.S.C. 1382(c)(5)(A)) is amended to
    read as follows: ``(A) a State program funded under part A of title
    IV,''.
        (k) Amendment to Title XIX.--Section 1902(j) (42 U.S.C. 1396a(j)) is
    amended by striking ``1108(c)'' and inserting ``1108(f)''.

    SEC. 109. CONFORMING AMENDMENTS TO THE FOOD STAMP ACT OF 1977 AND
                RELATED PROVISIONS.

        (a) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is
    amended--
                (1) in the second sentence of subsection (a), by striking
            ``plan approved'' and all that follows through ``title IV of the
            Social Security Act'' and inserting ``program funded under
            part A of title IV of the Social Security Act (42 U.S.C. 601 et
            seq.)'';
                (2) in subsection (d)--
                        (A) in paragraph (5), by striking ``assistance to
                    families with dependent children'' and inserting
                    ``assistance under a State program funded''; and
                        (B) by striking paragraph (13) and redesignating
                    paragraphs (14), (15), and (16) as paragraphs (13),
                    (14), and (15), respectively;
                (3) in subsection (j), by striking ``plan approved under
            part A of title IV of such Act (42 U.S.C. 601 et seq.)'' and
            inserting ``program funded under part A of title IV of the Act
            (42 U.S.C. 601 et seq.)''; and
                (4) by striking subsection (m).

        (b) Section 6 of such Act (7 U.S.C. 2015) is amended--
                (1) in subsection (c)(5), by striking ``the State plan
            approved'' and inserting ``the State program funded''; and
                (2) in subsection (e)(6), by striking ``aid to families with
            dependent children'' and inserting ``benefits under a State
            program funded''.

        (c) Section 16(g)(4) of such Act (7 U.S.C. 2025(g)(4)) is amended by
    striking ``State plans under the Aid to Families with Dependent Children
    Program under'' and inserting ``State programs funded under part A of''.
        (d) Section 17 of such Act (7 U.S.C. 2026) is amended--
                (1) in the first sentence of subsection (b)(1)(A), by
            striking ``to aid to families with dependent children under part
            A of title IV of the Social Security Act'' and inserting ``or
            are
            receiving assistance under a State program funded under part A
            of title IV of the Social Security Act (42 U.S.C. 601 et
            seq.)''; and

    [[Page 110 STAT. 2170]]

                (2) in subsection (b)(3), by adding at the end the following
            new subparagraph:

        ``(I) The Secretary may not grant a waiver under this paragraph on
    or after the date of enactment of this subparagraph. Any reference in
    this paragraph to a provision of title IV of the Social Security Act
    shall be deemed to be a reference to such provision as in effect on the
    day before such date.'';
        (e) Section 20 of such Act (7 U.S.C. 2029) is amended--
                (1) in subsection (a)(2)(B) by striking ``operating--'' and
            all that follows through ``(ii) any other'' and inserting
            ``operating any''; and
                (2) in subsection (b)--
                        (A) in paragraph (1)--
                              (i) by striking ``(b)(1) A household'' and
                          inserting ``(b) A household''; and
                              (ii) in subparagraph (B), by striking
                          ``training program'' and inserting ``activity'';
                        (B) by striking paragraph (2); and
                        (C) by redesignating subparagraphs (A) through (F)
                    as paragraphs (1) through (6), respectively.

        (f) Section 5(h)(1) of the Agriculture and Consumer Protection Act
    of 1973 (Public Law 93-186; 7 U.S.C. 612c note) is amended by striking
    ``the program for aid to families with dependent children'' and
    inserting ``the State program funded''.
        (g) Section 9 of the National School Lunch Act (42 U.S.C. 1758) is
    amended--
                (1) in subsection (b)--
                        (A) in paragraph (2)(C)(ii)(II)--
                              (i) by striking ``program for aid to families
                          with dependent children'' and inserting ``State
                          program funded''; and
                              (ii) by inserting before the period at the end
                          the following: ``that the Secretary determines
                          complies with standards established by the
                          Secretary that ensure that the standards under the
                          State program are comparable to or more
                          restrictive than those in effect on June 1,
                          1995''; and
                        (B) in paragraph (6)--
                              (i) in subparagraph (A)(ii)--
                                        (I) by striking ``an AFDC assistance
                                    unit (under the aid to families with
                                    dependent children program authorized''
                                    and inserting ``a family (under the
                                    State program funded''; and
                                        (II) by striking ``, in a State''
                                    and all that follows through
                                    ``9902(2)))'' and inserting ``that the
                                    Secretary determines complies with
                                    standards established by the Secretary
                                    that ensure that the standards under the
                                    State program are comparable to or more
                                    restrictive than those in effect on June
                                    1, 1995''; and
                              (ii) in subparagraph (B), by striking ``aid to
                          families with dependent children'' and inserting
                          ``assistance under the State program funded under
                          part A of title IV of the Social Security Act (42
                          U.S.C. 601 et seq.) that the Secretary determines
                          complies with standards established by the
                          Secretary that ensure that the standards under the
                          State program are comparable

    [[Page 110 STAT. 2171]]

                          to or more restrictive than those in effect on
                          June 1, 1995''; and
                (2) in subsection (d)(2)(C)--
                        (A) by striking ``program for aid to families with
                    dependent children'' and inserting ``State program
                    funded''; and
                        (B) by inserting before the period at the end the
                    following: ``that the Secretary determines complies with
                    standards established by the Secretary that ensure that
                    the standards under the State program are comparable to
                    or more restrictive than those in effect on June 1,
                    1995''.

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

    SEC. 110. CONFORMING AMENDMENTS TO OTHER LAWS.

        (a) Subsection (b) of section 508 of the Unemployment Compensation
    Amendments of 1976 (42 U.S.C. 603a; Public Law 94-566; 90 Stat. 2689) is
    amended to read as follows:
        ``(b) Provision for Reimbursement of Expenses.--For purposes of
    section 455 of the Social Security Act, expenses incurred to reimburse
    State employment offices for furnishing information requested of such
    offices--
                ``(1) pursuant to the third sentence of section 3(a) of the
            Act entitled `An Act to provide for the establishment of a
            national employment system and for cooperation with the States
            in the promotion of such system, and for other purposes',
            approved June 6, 1933 (29 U.S.C. 49b(a)), or
                ``(2) by a State or local agency charged with the duty of
            carrying a State plan for child support approved under part D of
            title IV of the Social Security Act,

    shall be considered to constitute expenses incurred in the
    administration of such State plan.''.
        (b) Section 9121 of the Omnibus Budget Reconciliation Act of 1987
    (42 U.S.C. 602 note) is repealed.
        (c) Section 9122 of the Omnibus Budget Reconciliation
    Act of 1987 (42 U.S.C. 602 note) is repealed.
        (d) Section 221 of the Housing and Urban-Rural Recovery Act of 1983
    (42 U.S.C. 602 note), relating to treatment under AFDC of certain rental
    payments for federally assisted housing, is repealed.
        (e) Section 159 of the Tax Equity and Fiscal Responsibility Act of
    1982 (42 U.S.C. 602 note) is repealed.
        (f) Section 202(d) of the Social Security Amendments of 1967 (81
    Stat. 882; 42 U.S.C. 602 note) is repealed.
        (g) Section 903 of the Stewart B. McKinney Homeless Assistance
    Amendments Act of 1988 (42 U.S.C. 11381 note), relating to demonstration
    projects to reduce number of AFDC families in welfare hotels, is
    amended--

    [[Page 110 STAT. 2172]]

                (1) in subsection (a), by striking ``aid to families with
            dependent children under a State plan approved'' and inserting
            ``assistance under a State program funded''; and
                (2) in subsection (c), by striking ``aid to families with
            dependent children in the State under a State plan approved''
            and inserting ``assistance in the State under a State program
            funded''.

        (h) The Higher Education Act of 1965 (20 U.S.C. 1001 et seq.) is
    amended--
                (1) in section 404C(c)(3) (20 U.S.C. 1070a-23(c)(3)), by
            striking ``(Aid to Families with Dependent Children)''; and
                (2) in section 480(b)(2) (20 U.S.C. 1087vv(b)(2)), by
            striking ``aid to families with dependent children under a State
            plan approved'' and inserting ``assistance under a State program
            funded''.

        (i) The Carl D. Perkins Vocational and Applied Technology Education
    Act (20 U.S.C. 2301 et seq.) is amended--
                (1) in section 231(d)(3)(A)(ii) (20 U.S.C.
            2341(d)(3)(A)(ii)), by striking ``The program for aid to
            dependent children'' and inserting ``The State program funded'';
                (2) in section 232(b)(2)(B) (20 U.S.C. 2341a(b)(2)(B)), by
            striking ``the program for aid to families with dependent
            children'' and inserting ``the State program funded''; and
                (3) in section 521(14)(B)(iii) (20 U.S.C. 2471(14)(B)(iii)),
            by striking ``the program for aid to families with dependent
            children'' and inserting ``the State program funded''.

        (j) The Elementary and Secondary Education Act of 1965 (20 U.S.C.
    2701 et seq.) is amended--
                (1) in section 1113(a)(5) (20 U.S.C. 6313(a)(5)), by
            striking ``Aid to Families with Dependent Children program'' and
            inserting ``State program funded under part A of title IV of the
            Social Security Act'';
                (2) in section 1124(c)(5) (20 U.S.C. 6333(c)(5)), by
            striking ``the program of aid to families with dependent
            children under a State plan approved under'' and inserting ``a
            State program funded under part A of''; and
                (3) in section 5203(b)(2) (20 U.S.C. 7233(b)(2))--
                        (A) in subparagraph (A)(xi), by striking ``Aid to
                    Families with Dependent Children benefits'' and
                    inserting ``assistance under a State program funded
                    under part A of title IV of the Social Security Act'';
                    and
                        (B) in subparagraph (B)(viii), by striking ``Aid to
                    Families with Dependent Children'' and inserting
                    ``assistance under the State program funded under part A
                    of title IV of the Social Security Act''.

        (k) The 4th proviso of chapter VII of title I of Public Law 99-88
    (25 U.S.C. 13d-1) is amended to read as follows: ``Provided further,
    That general assistance payments made by the Bureau of Indian Affairs
    shall be made--
                ``(1) after April 29, 1985, and before October 1, 1995, on
            the basis of Aid to Families with Dependent Children (AFDC)
            standards of need; and
                ``(2) on and after October 1, 1995, on the basis of
            standards of need established under the State program funded
            under part A of title IV of the Social Security Act,

    except that where a State ratably reduces its AFDC or State program
    payments, the Bureau shall reduce general assistance pay

    [[Page 110 STAT. 2173]]

    ments in such State by the same percentage as the State has reduced the
    AFDC or State program payment.''.
        (l) The Internal Revenue Code of 1986 (26 U.S.C. 1 et seq.) is
    amended--
                (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by striking
            all that follows ``agency as'' and inserting ``being eligible
            for financial assistance under part A of title IV of the Social
            Security Act and as having continually received such financial
            assistance during the 90-day period which immediately precedes
            the date on which such individual is hired by the employer.'';
                (2) in section 3304(a)(16) (26 U.S.C. 3304(a)(16)), by
            striking ``eligibility for aid or services,'' and all that
            follows through ``children approved'' and inserting
            ``eligibility for assistance, or the amount of such assistance,
            under a State program funded'';
                (3) in section 6103(l)(7)(D)(i) (26 U.S.C.
            6103(l)(7)(D)(i)), by striking ``aid to families with dependent
            children provided under a State plan approved'' and inserting
            ``a State program funded'';
                (4) in section 6103(l)(10) (26 U.S.C. 6103(l)(10))--
                        (A) by striking ``(c) or (d)'' each place it appears
                    and inserting ``(c), (d), or (e)''; and
                        (B) by adding at the end of subparagraph (B) the
                    following new sentence: ``Any return information
                    disclosed with respect to section 6402(e) shall only be
                    disclosed to officers and employees of the State agency
                    requesting such information.'';
                (5) in section 6103(p)(4) (26 U.S.C. 6103(p)(4)), in the
            matter preceding subparagraph (A)--
                        (A) by striking ``(5), (10)'' and inserting ``(5)'';
                    and
                        (B) by striking ``(9), or (12)'' and inserting
                    ``(9), (10), or (12)'';
                (6) in section 6334(a)(11)(A) (26 U.S.C. 6334(a)(11)(A)), by
            striking ``(relating to aid to families with dependent
            children)'';
                (7) in section 6402 (26 U.S.C. 6402)--
                        (A) in subsection (a), by striking ``(c) and (d)''
                    and inserting ``(c), (d), and (e)'';
                        (B) by redesignating subsections (e) through (i) as
                    subsections (f) through (j), respectively; and
                        (C) by inserting after subsection (d) the following:

        ``(e) Collection of Overpayments Under Title IV-A of the Social
    Security Act.--The amount of any overpayment to be refunded to the
    person making the overpayment shall be reduced (after reductions
    pursuant to subsections (c) and (d), but before a credit against future
    liability for an internal revenue tax) in accordance with section 405(e)
    of the Social Security Act (concerning recovery of overpayments to
    individuals under State plans approved under part A of title IV of such
    Act).''; and
                (8) in section 7523(b)(3)(C) (26 U.S.C. 7523(b)(3)(C)), by
            striking ``aid to families with dependent children'' and
            inserting ``assistance under a State program funded under part A
            of title IV of the Social Security Act''.

        (m) Section 3(b) of the Wagner-Peyser Act (29 U.S.C. 49b(b)) is
    amended by striking ``State plan approved under part A of title IV'' and
    inserting ``State program funded under part A of
    title IV''.

    [[Page 110 STAT. 2174]]

        (n) The Job Training Partnership Act (29 U.S.C. 1501 et seq.) is
    amended--
                (1) in section 4(29)(A)(i) (29 U.S.C. 1503(29)(A)(i)), by
            striking ``(42 U.S.C. 601 et seq.)'';
                (2) in section 106(b)(6)(C) (29 U.S.C. 1516(b)(6)(C)), by
            striking ``State aid to families with dependent children
            records,'' and inserting ``records collected under the State
            program funded under part A of title IV of the Social Security
            Act,'';
                (3) in section 121(b)(2) (29 U.S.C. 1531(b)(2))--
                        (A) by striking ``the JOBS program'' and inserting
                    ``the work activities required under title IV of the
                    Social Security Act''; and
                        (B) by striking the second sentence;
                (4) in section 123(c) (29 U.S.C. 1533(c))--
                        (A) in paragraph (1)(E), by repealing clause (vi);
                    and
                        (B) in paragraph (2)(D), by repealing clause (v);
                (5) in section 203(b)(3) (29 U.S.C. 1603(b)(3)), by striking
            ``, including recipients under the JOBS program'';
                (6) in subparagraphs (A) and (B) of section 204(a)(1) (29
            U.S.C. 1604(a)(1) (A) and (B)), by striking ``(such as the JOBS
            program)'' each place it appears;
                (7) in section 205(a) (29 U.S.C. 1605(a)), by striking
            paragraph (4) and inserting the following:
                ``(4) the portions of title IV of the Social Security Act
            relating to work activities;'';
                (8) in section 253 (29 U.S.C. 1632)--
                        (A) in subsection (b)(2), by repealing subparagraph
                    (C); and
                        (B) in paragraphs (1)(B) and (2)(B) of subsection
                    (c), by striking ``the JOBS program or'' each place it
                    appears;
                (9) in section 264 (29 U.S.C. 1644)--
                        (A) in subparagraphs (A) and (B) of subsection
                    (b)(1), by striking ``(such as the JOBS program)'' each
                    place it appears; and
                        (B) in subparagraphs (A) and (B) of subsection
                    (d)(3), by striking ``and the JOBS program'' each place
                    it appears;
                (10) in section 265(b) (29 U.S.C. 1645(b)), by striking
            paragraph (6) and inserting the following:
                ``(6) the portion of title IV of the Social Security Act
            relating to work activities;'';
                (11) in the second sentence of section 429(e) (29 U.S.C.
            1699(e)), by striking ``and shall be in an amount that does not
            exceed the maximum amount that may be provided by the State
            pursuant to section 402(g)(1)(C) of the Social Security Act (42
            U.S.C. 602(g)(1)(C))'';
                (12) in section 454(c) (29 U.S.C. 1734(c)), by striking
            ``JOBS and'';
                (13) in section 455(b) (29 U.S.C. 1735(b)), by striking
            ``the JOBS program,'';
                (14) in section 501(1) (29 U.S.C. 1791(1)), by striking
            ``aid to families with dependent children under part A of title
            IV of the Social Security Act (42 U.S.C. 601 et seq.)'' and
            inserting ``assistance under the State program funded under part
            A of title IV of the Social Security Act'';
                (15) in section 506(1)(A) (29 U.S.C. 1791e(1)(A)), by
            striking ``aid to families with dependent children'' and
            inserting ``assistance under the State program funded'';

    [[Page 110 STAT. 2175]]

                (16) in section 508(a)(2)(A) (29 U.S.C. 1791g(a)(2)(A)), by
            striking ``aid to families with dependent children'' and
            inserting ``assistance under the State program funded''; and
                (17) in section 701(b)(2)(A) (29 U.S.C. 1792(b)(2)(A))--
                        (A) in clause (v), by striking the semicolon and
                    inserting ``; and''; and
                        (B) by striking clause (vi).

        (o) Section 3803(c)(2)(C)(iv) of title 31, United States Code, is
    amended to read as follows:
                ``(iv) assistance under a State program funded under part A
            of title IV of the Social Security Act;''.

        (p) Section 2605(b)(2)(A)(i) of the Low-Income Home Energy
    Assistance Act of 1981 (42 U.S.C. 8624(b)(2)(A)(i)) is amended to read
    as follows:
                              ``(i) assistance under the State program
                          funded under part A of title IV of the Social
                          Security Act;''.

        (q) Section 303(f)(2) of the Family Support Act of 1988 (42 U.S.C.
    602 note) is amended--
                (1) by striking ``(A)''; and
                (2) by striking subparagraphs (B) and (C).

        (r) The Balanced Budget and Emergency Deficit Control Act of 1985 (2
    U.S.C. 900 et seq.) is amended--
                (1) in the first section 255(h) (2 U.S.C. 905(h)), by
            striking ``Aid to families with dependent children (75-0412-0-1-
            609);'' and inserting ``Block grants to States for temporary
            assistance for needy families;''; and
                (2) in section 256 (2 U.S.C. 906)--
                        (A) by striking subsection (k); and
                        (B) by redesignating subsection (l) as subsection
                    (k).

        (s) The Immigration and Nationality Act (8 U.S.C. 1101 et seq.) is
    amended--
                (1) in section 210(f) (8 U.S.C. 1160(f)), by striking ``aid
            under a State plan approved under'' each place it appears and
            inserting ``assistance under a State program funded under'';
                (2) in section 245A(h) (8 U.S.C. 1255a(h))--
                        (A) in paragraph (1)(A)(i), by striking ``program of
                    aid to families with dependent children'' and inserting
                    ``State program of assistance''; and
                        (B) in paragraph (2)(B), by striking ``aid to
                    families with dependent children'' and inserting
                    ``assistance under a State program funded under part A
                    of title IV of the Social Security Act''; and
                (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)), by striking
            ``State plan approved'' and inserting ``State program funded''.

        (t) Section 640(a)(4)(B)(i) of the Head Start Act (42 U.S.C.
    9835(a)(4)(B)(i)) is amended by striking ``program of aid to families
    with dependent children under a State plan approved'' and inserting
    ``State program of assistance funded''.
        (u) Section 9 of the Act of April 19, 1950 (64 Stat. 47, chapter 92;
    25 U.S.C. 639) is repealed.
        (v) Subparagraph (E) of section 213(d)(6) of the School-To-Work
    Opportunities Act of 1994 (20 U.S.C. 6143(d)(6)) is amended to read as
    follows:
                        ``(E) part A of title IV of the Social Security Act
                    (42 U.S.C. 601 et seq.) relating to work activities;''.

        (w) Section 552a(a)(8)(B)(iv)(III) of title 5, United States Code,
    is amended by striking ``section 464 or 1137 of the Social Security

    [[Page 110 STAT. 2176]]

    Act'' and inserting ``section 404(e), 464, or 1137 of the Social
    Security Act''.

    SEC. 111. <<NOTE: 42 USC 405 note.>>  DEVELOPMENT OF PROTOTYPE OF
                COUNTERFEIT-RESISTANT SOCIAL SECURITY CARD REQUIRED.

        (a) Development.--
                (1) In general.--The Commissioner of Social Security (in
            this section referred to as the ``Commissioner'') shall, in
            accordance with this section, develop a prototype of a
            counterfeit-resistant social security card. Such prototype card
            shall--
                        (A) be made of a durable, tamper-resistant material
                    such as plastic or polyester,
                        (B) employ technologies that provide security
                    features, such as magnetic stripes, holograms, and
                    integrated
                    circuits, and
                        (C) be developed so as to provide individuals with
                    reliable proof of citizenship or legal resident alien
                    status.
                (2) Assistance by attorney general.--The Attorney General of
            the United States shall provide such information and assistance
            as the Commissioner deems necessary to enable the Commissioner
            to comply with this section.

        (b) Study and Report.--
                (1) In general.--The Commissioner shall conduct a
            study and issue a report to Congress which examines different
            methods of improving the social security card application
            process.
                (2) Elements of study.--The study shall include an
            evaluation of the cost and work load implications of issuing a
            counterfeit-resistant social security card for all individuals
            over a 3-, 5-, and 10-year period. The study shall also evaluate
            the feasibility and cost implications of imposing a user fee for
            replacement cards and cards issued to individuals who apply for
            such a card prior to the scheduled 3-, 5-, and 10-year phase-in
            options.
                (3) Distribution of report.--The Commissioner shall
            submit copies of the report described in this subsection along
            with a facsimile of the prototype card as described in
            subsection (a) to the Committees on Ways and Means and Judiciary
            of the House of Representatives and the Committees on Finance
            and Judiciary of the Senate within 1 year after the date of the
            enactment of this Act.

    SEC. 112. MODIFICATIONS TO THE JOB OPPORTUNITIES FOR CERTAIN LOW-INCOME
                INDIVIDUALS PROGRAM.

        Section 505 of the Family Support Act of 1988 (42 U.S.C. 1315 note)
    is amended--
                (1) in the heading, by striking ``demonstration'';
                (2) by striking ``demonstration'' each place such term
            appears;
                (3) in subsection (a), by striking ``in each of fiscal
            years'' and all that follows through ``10'' and inserting
            ``shall enter into agreements with'';
                (4) in subsection (b)(3), by striking ``aid to families with
            dependent children under part A of title IV of the Social
            Security Act'' and inserting ``assistance under the program
            funded part A of title IV of the Social Security Act of the
            State in which the individual resides'';
                (5) in subsection (c)--

    [[Page 110 STAT. 2177]]

                        (A) in paragraph (1)(C), by striking ``aid to
                    families with dependent children under title IV of the
                    Social Security Act'' and inserting ``assistance under a
                    State program funded part A of title IV of the Social
                    Security Act'';
                        (B) in paragraph (2), by striking ``aid to families
                    with dependent children under title IV of such Act'' and
                    inserting ``assistance under a State program funded part
                    A of title IV of the Social Security Act'';
                (6) in subsection (d), by striking ``job opportunities and
            basic skills training program (as provided for under title IV of
            the Social Security Act)'' and inserting ``the State program
            funded under part A of title IV of the Social Security
            Act''; and
                (7) by striking subsections (e) through (g) and inserting
            the following:

        ``(e) Authorization of Appropriations.--For the purpose of
    conducting projects under this section, there is authorized to be
    appropriated an amount not to exceed $25,000,000 for any fiscal year.''.

    SEC. 113. SECRETARIAL SUBMISSION OF LEGISLATIVE PROPOSAL FOR TECHNICAL
                AND CONFORMING AMENDMENTS.

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

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

        (a) In General.--Title XIX is amended--
                (1) by redesignating section 1931 <<NOTE: 42 USC 1396v.>>
            as section 1932; and
                (2) by inserting after section 1930 the following new
            section:

               ``assuring coverage for certain low-income families

        ``Sec. 1931. <<NOTE: 42 USC 1396u-1.>>  (a) References to Title IV-A
    Are References to Pre-Welfare-Reform Provisions.--Subject to the
    succeeding provisions of this section, with respect to a State any
    reference in this title (or any other provision of law in relation to
    the operation of this title) to a provision of part A of title IV, or a
    State plan under such part (or a provision of such a plan), including
    income and resource standards and income and resource methodologies
    under such part or plan, shall be considered a reference to such a
    provision or plan as in effect as of July 16, 1996, with respect to the
    State.

        ``(b) Application of Pre-Welfare-Reform Eligibility
    Criteria.--
                ``(1) In general.--For purposes of this title, subject to
            paragraphs (2) and (3), in determining eligibility for medical
            assistance--
                        ``(A) an individual shall be treated as receiving
                    aid or assistance under a State plan approved under part
                    A of title IV only if the individual meets--

    [[Page 110 STAT. 2178]]

                              ``(i) the income and resource standards for
                          determining eligibility under such plan, and
                              ``(ii) the eligibility requirements of such
                          plan under subsections (a) through (c) of section
                          406 and section 407(a),
                    as in effect as of July 16, 1996; and
                        ``(B) the income and resource methodologies under
                    such plan as of such date shall be used in the
                    determination of whether any individual meets income and
                    resource standards under such plan.
                ``(2) State option.--For purposes of applying this section,
            a State--
                        ``(A) may lower its income standards applicable with
                    respect to part A of title IV, but not below the income
                    standards applicable under its State plan under such
                    part on May 1, 1988;
                        ``(B) may increase income or resource standards
                    under the State plan referred to in paragraph (1) over a
                    period (beginning after July 16, 1996) by a percentage
                    that does not exceed the percentage increase in the
                    Consumer Price Index for all urban consumers (all items;
                    United States city average) over such period; and
                        ``(C) may use income and resource methodologies that
                    are less restrictive than the methodologies used under
                    the State plan under such part as of July 16, 1996.
                ``(3) Option to terminate medical assistance for
            failure to meet work requirement.--
                        ``(A) Individuals receiving cash assistance under
                    tanf.--In the case of an individual who--
                              ``(i) is receiving cash assistance under a
                          State program funded under part A of title IV,
                              ``(ii) is eligible for medical assistance
                          under this title on a basis not related to section
                          1902(l), and
                              ``(iii) has the cash assistance under such
                          program terminated pursuant to section
                          407(e)(1)(B) (as in effect on or after the welfare
                          reform effective date) because of refusing to
                          work,
                    the State may terminate such individual's eligibility
                    for medical assistance under this title until such time
                    as there no longer is a basis for the termination of
                    such cash assistance because of such refusal.
                        ``(B) Exception for children.--Subparagraph (A)
                    shall not be construed as permitting a State to
                    terminate medical assistance for a minor child who is
                    not the head of a household receiving assistance under a
                    State program funded under part A of title IV.

        ``(c) Treatment for Purposes of Transitional Coverage Provisions.--
                ``(1) Transition in the case of child support collections.--
            The provisions of section 406(h) (as in effect on July 16, 1996)
            shall apply, in relation to this title, with respect to
            individuals (and families composed of individuals) who are
            described in subsection (b)(1)(A), in the same manner as they
            applied before such date with respect to individuals who became
            ineligible for aid to families with dependent children as a
            result (wholly or partly) of the collection of child or spousal
            support under part D of title IV.

    [[Page 110 STAT. 2179]]

                ``(2) Transition in the case of earnings from employment.--
            For continued medical assistance in the case of individuals (and
            families composed of individuals) described in subsection
            (b)(1)(A) who would otherwise become ineligible because of hours
            or income from employment, see sections 1925 and 1902(e)(1).

        ``(d) Waivers.--In the case of a waiver of a provision of part A of
    title IV in effect with respect to a State as of July 16, 1996, or which
    is submitted to the Secretary before the date of the enactment of the
    Personal Responsibility and Work Opportunity Reconciliation Act of 1996
    and approved by the Secretary on or before July 1, 1997, if the waiver
    affects eligibility of individuals for medical assistance under this
    title, such waiver may (but need not) continue to be applied, at the
    option of the State, in relation to this title after the date the waiver
    would otherwise expire.
        ``(e) State Option To Use 1 Application Form.--Nothing in this
    section, or part A of title IV, shall be construed as preventing a State
    from providing for the same application form for assistance under a
    State program funded under part A of title IV (on or after the welfare
    reform effective date) and for medical assistance under this title.
        ``(f) Additional Rules of Construction.--
                ``(1) With respect to the reference in section 1902(a)(5) to
            a State plan approved under part A of title IV, a State may
            treat such reference as a reference either to a State program
            funded under such part (as in effect on and after the welfare
            reform effective date) or to the State plan under this title.
                ``(2) Any reference in section 1902(a)(55) to a State plan
            approved under part A of title IV shall be deemed a reference to
            a State program funded under such part.
                ``(3) In applying section 1903(f), the applicable income
            limitation otherwise determined shall be subject to increase in
            the same manner as income or resource standards of a State may
            be increased under subsection (b)(2)(B).

        ``(g) Relation to Other Provisions.--The provisions of this section
    shall apply notwithstanding any other provision of this Act.
        ``(h) Transitional Increased Federal Matching Rate for Increased
    Administrative Costs.--
                ``(1) In general.--Subject to the succeeding provisions of
            this subsection, the Secretary shall provide that with respect
            to administrative expenditures described in paragraph (2) the
            per centum specified in section 1903(a)(7) shall be increased to
            such percentage as the Secretary specifies.
                ``(2) Administrative expenditures described.--The
            administrative expenditures described in this paragraph are
            expenditures described in section 1903(a)(7) that a State
            demonstrates to the satisfaction of the Secretary are
            attributable to administrative costs of eligibility
            determinations that (but for the enactment of this section)
            would not be incurred.
                ``(3) Limitation.--The total amount of additional Federal
            funds that are expended as a result of the application of this
            subsection for the period beginning with fiscal year 1997 and
            ending with fiscal year 2000 shall not exceed $500,000,000. In
            applying this paragraph, the Secretary shall ensure the
            equitable distribution of additional funds among the States.

    [[Page 110 STAT. 2180]]

                ``(4) Time limitation.--This subsection shall only apply
            with respect to a State for expenditures incurred during the
            first 12 calendar quarters in which the State program funded
            under part A of title IV (as in effect on and after the welfare
            reform effective date) is in effect.

        ``(i) Welfare Reform Effective Date.--In this section, the term
    `welfare reform effective date' means the effective date, with respect
    to a State, of title I of the Personal Responsibility and Work
    Opportunity Reconciliation Act of 1996 (as specified in section 116 of
    such Act).''.
        (b) Plan Amendment.--Section 1902(a) (42 U.S.C. 1396a(a)) is
    amended--
                (1) by striking ``and'' at the end of paragraph (61),
                (2) by striking the period at the end of paragraph (62) and
            inserting ``; and'', and
                (3) by inserting after paragraph (62) the following new
            paragraph:
                ``(63) provide for administration and determinations of
            eligibility with respect to individuals who are (or seek to be)
            eligible for medical assistance based on the application of
            section 1931.''.

        (c) Extension of Work Transition Provisions.--Sections 1902(e)(1)(B)
    and 1925(f) (42 U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are each amended by
    striking ``1998'' and inserting ``2001''.
        (d) Elimination of Requirement of Minimum AFDC Payment Levels.--(1)
    Section 1902(c) (42 U.S.C. 1396a(c)) is amended by striking ``if--'' and
    all that follows and inserting the following: ``if the State requires
    individuals described in subsection (l)(1) to apply for assistance under
    the State program funded under part A of title IV as a condition of
    applying for or receiving medical assistance under this title.''.
        (2) Section 1903(i) (42 U.S.C. 1396b(i)) is amended by striking
    paragraph (9).

    SEC. 115. <<NOTE: 42 USC 862a.>>  DENIAL OF ASSISTANCE AND BENEFITS FOR
                CERTAIN DRUG-RELATED CONVICTIONS.

        (a) In General.--An individual convicted (under Federal or State
    law) of any offense which is classified as a felony by the law of the
    jurisdiction involved and which has as an element the possession, use,
    or distribution of a controlled substance (as defined in section 102(6)
    of the Controlled Substances Act (21 U.S.C. 802(6))) shall not be
    eligible for--
                (1) assistance under any State program funded under part A
            of title IV of the Social Security Act, or
                (2) benefits under the food stamp program (as defined in
            section 3(h) of the Food Stamp Act of 1977) or any State program
            carried out under the Food Stamp Act of 1977.

        (b) Effects on Assistance and Benefits for Others.--
                (1) Program of temporary assistance for needy
            families.--The amount of assistance otherwise required to be
            provided under a State program funded under part A of title IV
            of the Social Security Act to the family members of an
            individual to whom subsection (a) applies shall be reduced by
            the amount which would have otherwise been made available to the
            individual under such part.
                (2) Benefits under the food stamp act of 1977.--The amount
            of benefits otherwise required to be provided to a household
            under the food stamp program (as defined in section

    [[Page 110 STAT. 2181]]

            3(h) of the Food Stamp Act of 1977), or any State program
            carried out under the Food Stamp Act of 1977, shall be
            determined by considering the individual to whom subsection (a)
            applies not to be a member of such household, except that the
            income and resources of the individual shall be considered to be
            income and resources of the household.

        (c) Enforcement.--A State that has not exercised its authority under
    subsection (d)(1)(A) shall require each individual applying for
    assistance or benefits referred to in subsection (a), during the
    application process, to state, in writing, whether the individual, or
    any member of the household of the individual, has been convicted of a
    crime described in subsection (a).
        (d) Limitations.--
                (1) State elections.--
                        (A) Opt out.--A State may, by specific reference in
                    a law enacted after the date of the enactment of this
                    Act, exempt any or all individuals domiciled in the
                    State from the application of subsection (a).
                        (B) Limit period of prohibition.--A State may, by
                    law enacted after the date of the enactment of this Act,
                    limit the period for which subsection (a) shall apply to
                    any or all individuals domiciled in the State.
                (2) Inapplicability to convictions occurring on or before
            enactment.--Subsection (a) shall not apply to convictions
            occurring on or before the date of the enactment of this Act.

        (e) Definitions of State.--For purposes of this section, the term
    ``State'' has the meaning given it--
                (1) in section 419(5) of the Social Security Act, when
            referring to assistance provided under a State program funded
            under part A of title IV of the Social Security Act, and
                (2) in section 3(m) of the Food Stamp Act of 1977, when
            referring to the food stamp program (as defined in section 3(h)
            of the Food Stamp Act of 1977) or any State program carried out
            under the Food Stamp Act of 1977.

        (f) Rule of Interpretation.--Nothing in this section shall be
    construed to deny the following Federal benefits:
                (1) Emergency medical services under title XIX of the Social
            Security Act.
                (2) Short-term, noncash, in-kind emergency disaster relief.
                (3)(A) Public health assistance for immunizations.
                (B) Public health assistance for testing and treatment of
            communicable diseases if the Secretary of Health and Human
            Services determines that it is necessary to prevent the spread
            of such disease.
                (4) Prenatal care.
                (5) Job training programs.
                (6) Drug treatment programs.

    SEC. 116. <<NOTE: 42 USC 601 note.>>  EFFECTIVE DATE; TRANSITION RULE.

        (a) Effective Dates.--
                (1) In general.--Except as otherwise provided in this title,
            this title and the amendments made by this title shall take
            effect on July 1, 1997.
                (2) Delayed effective date for certain provisions.--
            Notwithstanding any other provision of this section, paragraphs
            (2), (3), (4), (5), (8), and (10) of section 409(a) and section

    [[Page 110 STAT. 2182]]

            411(a) of the Social Security Act (as added by the amendments
            made by section 103(a) of this Act) shall not take effect with
            respect to a State until, and shall apply only with respect to
            conduct that occurs on or after, the later of--
                        (A) July 1, 1997; or
                        (B) the date that is 6 months after the date the
                    Secretary of Health and Human Services receives from the
                    State a plan described in section 402(a) of the Social
                    Security Act (as added by such amendment).
                (3) Grants to outlying areas.--The amendments made by
            section 103(b) shall take effect on October 1, 1996.
                (4) Elimination of child care programs.--The amendments made
            by section 103(c) shall take effect on October 1, 1996.
                (5) Definitions applicable to new child care entitlement.--
            Sections 403(a)(1)(C), 403(a)(1)(D), and 419(4) of the Social
            Security Act, as added by the amendments made by section 103(a)
            of this Act, shall take effect on October 1, 1996.

        (b) Transition Rules.--Effective on the date of the enactment of
    this Act:
                (1) State option to accelerate effective date.--
                        (A) In general.--If the Secretary of Health and
                    Human Services receives from a State a plan described in
                    section 402(a) of the Social Security Act (as added
                    by the amendment made by section 103(a)(1) of this Act),
                    then--
                              (i) on and after the date of such receipt--
                                        (I) except as provided in clause
                                    (ii), this title and the amendments made
                                    by this title (other than by section
                                    103(c) of this Act) shall apply with
                                    respect to the State; and
                                        (II) the State shall be considered
                                    an eligible State for purposes of part A
                                    of title IV of the Social Security Act
                                    (as in effect pursuant to the amendments
                                    made by such section 103(a)); and
                              (ii) during the period that begins on the date
                          of such receipt and ends on June 30, 1997, there
                          shall remain in effect with respect to the State--
                                        (I) section 403(h) of the Social
                                    Security Act (as in effect on September
                                    30, 1995); and
                                        (II) all State reporting
                                    requirements under parts A and F of
                                    title IV of the Social Security Act (as
                                    in effect on September 30, 1995),
                                    modified by the Secretary as
                                    appropriate, taking into account the
                                    State program under part A of title IV
                                    of the Social Security Act (as in effect
                                    pursuant to the amendments made by such
                                    section 103(a)).
                        (B) Limitations on federal obligations.--
                              (i) Under afdc program.--The total obligations
                          of the Federal Government to a State under part A
                          of title IV of the Social Security Act (as in
                          effect on September 30, 1995) with respect to
                          expenditures in fiscal year 1997 shall not exceed
                          an amount equal to the State family assistance
                          grant.
                              (ii) Under temporary family assistance
                          program.--Notwithstanding section 403(a)(1) of the
                          Social Security Act (as in effect pursuant to the
                          amendments

    [[Page 110 STAT. 2183]]

                          made by section 103(a) of this Act), the total
                          obligations of the Federal Government to a State
                          under such section 403(a)(1)--
                                        (I) for fiscal year 1996, shall be
                                    an amount equal to--
                                                (aa) the State family
                                            assistance grant; multiplied by
                                                (bb) \1/366\ of the number
                                            of days during the period that
                                            begins on the date the
                                            Secretary of Health and Human
                                            Services first receives from the
                                            State a plan described in
                                            section 402(a) of the Social
                                            Security Act (as added by the
                                            amendment made by section
                                            103(a)(1) of this Act) and ends
                                            on September 30, 1996; and
                                        (II) for fiscal year 1997, shall be
                                    an amount equal to the lesser of--
                                                (aa) the amount (if any) by
                                            which the State family
                                            assistance grant exceeds the
                                            total obligations of the Federal
                                            Government to the State under
                                            part A of title IV of the Social
                                            Security Act (as in effect on
                                            September 30, 1995) with respect
                                            to expenditures in fiscal year
                                            1997; or
                                                (bb) the State family
                                            assistance grant, multiplied by
                                            \1/365\ of the number of days
                                            during the period that begins on
                                            October 1, 1996, or the date the
                                            Secretary of Health and Human
                                            Services first receives from the
                                            State a plan described in
                                            section 402(a) of the Social
                                            Security Act (as added by the
                                            amendment made by section
                                            103(a)(1) of this Act),
                                            whichever is later, and ends on
                                            September 30, 1997.
                              (iii) Child care obligations excluded in
                          determining federal afdc obligations.--As used in
                          this subparagraph, the term ``obligations of the
                          Federal Government to the State under part A of
                          title IV of the Social Security Act'' does not
                          include any obligation of the Federal Government
                          with respect to child care expenditures by the
                          State.
                        (C) Submission of state plan for fiscal year 1996 or
                    1997 deemed acceptance of grant limitations and formula
                    and termination of afdc entitlement.--The submission of
                    a plan by a State pursuant to subparagraph (A) is deemed
                    to constitute--
                              (i) the State's acceptance of the grant
                          reductions under subparagraph (B) (including the
                          formula for computing the amount of the
                          reduction); and
                              (ii) the termination of any entitlement of any
                          individual or family to benefits or services under
                          the State AFDC program.
                        (D) Definitions.--As used in this paragraph:
                              (i) State afdc program.--The term ``State AFDC
                          program'' means the State program under parts A
                          and F of title IV of the Social Security Act (as
                          in effect on September 30, 1995).

    [[Page 110 STAT. 2184]]

                              (ii) State.--The term ``State'' means the 50
                          States and the District of Columbia.
                              (iii) State family assistance grant.--The term
                          ``State family assistance grant'' means the State
                          family assistance grant (as defined in section
                          403(a)(1)(B) of the Social Security Act, as added
                          by the amendment made by section 103(a)(1) of this
                          Act).
                (2) Claims, actions, and proceedings.--The amendments made
            by this title shall not apply with respect to--
                        (A) powers, duties, functions, rights, claims,
                    penalties, or obligations applicable to aid, assistance,
                    or services
                    provided before the effective date of this title under
                    the provisions amended; and
                        (B) administrative actions and proceedings commenced
                    before such date, or authorized before such date to be
                    commenced, under such provisions.
                (3) Closing out account for those programs terminated or
            substantially modified by this title.--In closing out accounts,
            Federal and State officials may use scientifically acceptable
            statistical sampling techniques. Claims made with respect to
            State expenditures under a State plan approved under part A of
            title IV of the Social Security Act (as in effect on September
            30, 1995) with respect to assistance or services provided on or
            before September 30, 1995, shall be treated as claims with
            respect to expenditures during fiscal year 1995 for purposes of
            reimbursement even if payment was made by a State on or after
            October 1, 1995. Each State shall complete the filing of all
            claims under the State plan (as so in effect) within 2 years
            after the date of the enactment of this Act. The head of each
            Federal department shall--
                        (A) use the single audit procedure to review and
                    resolve any claims in connection with the close out of
                    programs under such State plans; and
                        (B) reimburse States for any payments made for
                    assistance or services provided during a prior fiscal
                    year from funds for fiscal year 1995, rather than from
                    funds authorized by this title.
                (4) Continuance in office of assistant secretary for family
            support.--The individual who, on the day before the effective
            date of this title, is serving as Assistant Secretary for Family
            Support within the Department of Health and Human Services
            shall, until a successor is appointed to such position--
                        (A) continue to serve in such position; and
                        (B) except as otherwise provided by law--
                              (i) continue to perform the functions of the
                          Assistant Secretary for Family Support under
                          section 417 of the Social Security Act (as in
                          effect before such effective date); and
                              (ii) have the powers and duties of the
                          Assistant Secretary for Family Support under
                          section 416 of the Social Security Act (as in
                          effect pursuant to the amendment made by section
                          103(a)(1) of this Act).

        (c) Termination of Entitlement Under AFDC Program.--Effective
    October 1, 1996, no individual or family shall be entitled to any
    benefits or services under any State plan approved under

    [[Page 110 STAT. 2185]]

    part A or F of title IV of the Social Security Act (as in effect on
    September 30, 1995).

                     TITLE II--SUPPLEMENTAL SECURITY INCOME

    SEC. 200. REFERENCE TO SOCIAL SECURITY ACT.

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

                      Subtitle A--Eligibility Restrictions

    SEC. 201. DENIAL OF SSI BENEFITS FOR 10 YEARS TO INDIVIDUALS FOUND TO
                HAVE FRAUDULENTLY MISREPRESENTED RESIDENCE IN ORDER TO
                OBTAIN BENEFITS SIMULTANEOUSLY IN 2 OR MORE STATES.

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

    SEC. 202. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS AND PROBATION AND
                PAROLE VIOLATORS.

        (a) In General.--Section 1611(e) (42 U.S.C. 1382(e)), as
    amended by section 201(a) of this Act, is amended by adding at the end
    the following new paragraph:
        ``(5) No person shall be considered an eligible individual or
    eligible spouse for purposes of this title with respect to any month if
    during such month the person is--
                ``(A) fleeing to avoid prosecution, or custody or
            confinement after conviction, under the laws of the place from
            which the person flees, for a crime, or an attempt to commit a
            crime, which is a felony under the laws of the place from which
            the person flees, or which, in the case of the State of
            New Jersey, is a high misdemeanor under the laws of such State;
            or

    [[Page 110 STAT. 2186]]

                ``(B) violating a condition of probation or parole imposed
            under Federal or State law.''.

        (b) Exchange of Information.--Section 1611(e) (42 U.S.C. 1382(e)),
    as amended by section 201(a) of this Act and subsection (a) of this
    section, is amended by adding at the end the following new paragraph:
        ``(6) Notwithstanding any other provision of law (other than section
    6103 of the Internal Revenue Code of 1986), the Commissioner shall
    furnish any Federal, State, or local law enforcement officer, upon the
    written request of the officer, with the current address, Social
    Security number, and photograph (if applicable) of any recipient of
    benefits under this title, if the officer furnishes the Commissioner
    with the name of the recipient, and other identifying information as
    reasonably required by the Commissioner to establish the unique identity
    of the recipient, and notifies the Commissioner that--
                ``(A) the recipient--
                        ``(i) is described in subparagraph (A) or (B) of
                    paragraph (5); and
                        ``(ii) has information that is necessary for the
                    officer to conduct the officer's official duties; and
                ``(B) the location or apprehension of the recipient is
            within the officer's official duties.''.

        (c) Effective Date <<NOTE: 42 USC 1382 note.>> .--The amendments
    made by this section shall take effect on the date of the enactment of
    this Act.

    SEC. 203. TREATMENT OF PRISONERS.

        (a) Implementation of Prohibition Against Payment of Benefits to
    Prisoners.--
                (1) In general.--Section 1611(e)(1) (42 U.S.C. 1382(e)(1))
            is amended by adding at the end the following new subparagraph:

        ``(I)(i) The Commissioner <<NOTE: Contracts.>>  shall enter into an
    agreement, with any interested State or local institution described in
    clause (i) or (ii) of section 202(x)(1)(A) the primary purpose of which
    is to confine individuals as described in section 202(x)(1)(A), under
    which--
                ``(I) the institution shall provide to the Commissioner, on
            a monthly basis and in a manner specified by the Commissioner,
            the names, social security account numbers, dates
            of birth, confinement commencement dates, and, to the extent
            available to the institution, such other identifying information
            concerning the inmates of the institution as the Commissioner
            may require for the purpose of carrying out paragraph (1); and
                ``(II) the Commissioner shall pay to any such institution,
            with respect to each inmate of the institution who is eligible
            for a benefit under this title for the month preceding the first
            month throughout which such inmate is in such institution and
            becomes ineligible for such benefit as a result of the
            application of this subparagraph, $400 if the institution
            furnishes the information described in subclause (I) to the
            Commissioner within 30 days after the date such individual
            becomes an inmate of such institution, or $200 if the
            institution furnishes such information after 30 days after such
            date but within 90 days after such date.

    [[Page 110 STAT. 2187]]

        ``(ii)(I) The provisions of section 552a of title 5, United States
    Code, shall not apply to any agreement entered into under clause (i) or
    to information exchanged pursuant to such agreement.
        ``(II) The Commissioner is authorized to provide, on a reimbursable
    basis, information obtained pursuant to agreements entered into under
    clause (i) to any Federal or federally-assisted cash, food, or medical
    assistance program for eligibility purposes.
        ``(iii) Payments to institutions required by clause (i)(II) shall be
    made from funds otherwise available for the payment of benefits under
    this title and shall be treated as direct spending for purposes of the
    Balanced Budget and Emergency Deficit Control Act of 1985.''.
                (2) Effective date <<NOTE: 42 USC 1382 note.>> .--The
            amendment made by this subsection shall apply to individuals
            whose period of confinement in an institution commences on or
            after the first day of the seventh month beginning after the
            month in which this Act is enacted.

        (b) Study <<NOTE: 42 USC 1382 note.>>  of Other Potential
    Improvements in the Collection of Information Respecting Public
    Inmates.--
                (1) Study.--The Commissioner of Social Security shall
            conduct a study of the desirability, feasibility, and cost of--
                        (A) establishing a system under which Federal,
                    State, and local courts would furnish to the
                    Commissioner such information respecting court orders by
                    which individuals are confined in jails, prisons, or
                    other public penal, correctional, or medical facilities
                    as the Commissioner may require for the purpose of
                    carrying out section 1611(e)(1) of the Social Security
                    Act; and
                        (B) requiring that State and local jails, prisons,
                    and other institutions that enter into agreements with
                    the Commissioner under section 1611(e)(1)(I) of the
                    Social Security Act furnish the information required by
                    such agreements to the Commissioner by means of an
                    electronic or other sophisticated data exchange system.
                (2) Report.--Not later than 1 year after the date of the
            enactment of this Act, the Commissioner of Social Security shall
            submit a report on the results of the study conducted pursuant
            to this subsection to the Committee on Finance of the Senate and
            the Committee on Ways and Means of the House of Representatives.

        (c) Additional Report <<NOTE: 42 USC 1382 note.>>  to Congress.--Not
    later than October 1, 1998, the Commissioner of Social Security shall
    provide to the Committee on Finance of the Senate and the Committee on
    Ways and Means of the House of Representatives a list of the
    institutions that are and are not providing information to the
    Commissioner under section 1611(e)(1)(I) of the Social Security Act (as
    added by this section).

    SEC. 204. EFFECTIVE DATE OF APPLICATION FOR BENEFITS.

        (a) In General.--Subparagraphs (A) and (B) of section 1611(c)(7) (42
    U.S.C. 1382(c)(7)) are amended to read as follows:
                ``(A) the first day of the month following the date such
            application is filed, or
                ``(B) the first day of the month following the date such
            individual becomes eligible for such benefits with respect to
            such application.''.

    [[Page 110 STAT. 2188]]

        (b) Special Rule Relating to Emergency Advance Payments.--Section
    1631(a)(4)(A) (42 U.S.C. 1383(a)(4)(A)) is
    amended--
                (1) by inserting ``for the month following the date the
            application is filed'' after ``is presumptively eligible for
            such benefits''; and
                (2) by inserting ``, which shall be repaid through
            proportionate reductions in such benefits over a period of not
            more than 6 months'' before the semicolon.

        (c) Conforming Amendments.--
                (1) Section 1614(b) (42 U.S.C. 1382c(b)) is amended--
                        (A) by striking ``or requests'' and inserting ``, on
                    the first day of the month following the date the
                    application is filed, or, in any case in which either
                    spouse requests''; and
                        (B) by striking ``application or''.
                (2) Section 1631(g)(3) <<NOTE: 42 USC 1383.>>  (42 U.S.C.
            1382j(g)(3)) is amended by inserting ``following the month''
            after ``beginning with the month''.

        (d) Effective Date <<NOTE: 42 USC 1382 note.>> .--
                (1) In general.--The amendments made by this section shall
            apply to applications for benefits under title XVI of the Social
            Security Act filed on or after the date of the enactment of this
            Act, without regard to whether regulations have been issued to
            implement such amendments.
                (2) Benefits under title xvi.--For purposes of this
            subsection, the term ``benefits under title XVI of the Social
            Security Act'' includes supplementary payments pursuant to an
            agreement for Federal administration under section 1616(a) of
            the Social Security Act, and payments pursuant to an agreement
            entered into under section 212(b) of Public Law 93-66.

                   Subtitle B--Benefits for Disabled Children

    SEC. 211. DEFINITION AND ELIGIBILITY RULES.

        (a) Definition of Childhood Disability.--Section 1614(a)(3) (42
    U.S.C. 1382c(a)(3)), as amended by section 105(b)(1) of the Contract
    with America Advancement Act of 1996, is amended--
                (1) in subparagraph (A), by striking ``An individual'' and
            inserting ``Except as provided in subparagraph (C), an indi-
            vidual'';
                (2) in subparagraph (A), by striking ``(or, in the case of
            an individual under the age of 18, if he suffers from any
            medically determinable physical or mental impairment of
            comparable severity)'';
                (3) by redesignating subparagraphs (C) through (I) as
            subparagraphs (D) through (J), respectively;
                (4) by inserting after subparagraph (B) the following new
            subparagraph:

        ``(C)(i) An individual under the age of 18 shall be considered
    disabled for the purposes of this title if that individual has a
    medically determinable physical or mental impairment, which results in
    marked and severe functional limitations, and which can be expected to
    result in death or which has lasted or can be expected to last for a
    continuous period of not less than 12 months.

    [[Page 110 STAT. 2189]]

        ``(ii) Notwithstanding clause (i), no individual under the age of 18
    who engages in substantial gainful activity (determined in accordance
    with regulations prescribed pursuant to subparagraph (E)) may be
    considered to be disabled.''; and
                (5) in subparagraph (F), as redesignated by paragraph (3),
            by striking ``(D)'' and inserting ``(E)''.

        (b) Changes to Childhood SSI Regulations.--
                (1) Modification to medical criteria for evaluation of
            mental and emotional disorders.--The Commissioner of Social
            Security shall modify sections 112.00C.2. and 112.02B.2.c.(2) of
            appendix 1 to subpart P of part 404 of title 20, Code of Federal
            Regulations, to eliminate references to maladaptive behavior in
            the domain of personal/behavorial function.
                (2) Discontinuance of individualized functional
            assessment.--The Commissioner of Social Security shall
            discontinue the individualized functional assessment for
            children set forth in sections 416.924d and 416.924e of title
            20, Code of Federal Regulations.

        (c) Medical Improvement Review Standard as it Applies to Individuals
    Under the Age of 18.--Section 1614(a)(4) (42 U.S.C.
    1382(a)(4)) <<NOTE: 42 USC 1382c.>>  is amended--
                (1) by redesignating subclauses (I) and (II) of clauses (i)
            and (ii) of subparagraph (B) as items (aa) and (bb),
            respectively;
                (2) by redesignating clauses (i) and (ii) of subparagraphs
            (A) and (B) as subclauses (I) and (II), respectively;
                (3) by redesignating subparagraphs (A) through (C) as
            clauses (i) through (iii), respectively;
                (4) by inserting before clause (i) (as redesignated by
            paragraph (3)) the following new subparagraph:
                ``(A) in the case of an individual who is age 18 or
            older--'';
                (5) by inserting after and below subparagraph (A)(iii) (as
            so redesignated) the following new subparagraph:
                ``(B) in the case of an individual who is under the age of
            18--
                        ``(i) substantial evidence which demonstrates that
                    there has been medical improvement in the individual's
                    impairment or combination of impairments, and that such
                    impairment or combination of impairments no longer
                    results in marked and severe functional limitations; or
                        ``(ii) substantial evidence which demonstrates that,
                    as determined on the basis of new or improved diagnostic
                    techniques or evaluations, the individual's impairment
                    or combination of impairments, is not as disabling as it
                    was considered to be at the time of the most recent
                    prior decision that the individual was under a
                    disability or continued to be under a disability, and
                    such impairment or combination of impairments does not
                    result in marked and severe functional limitations;
                    or'';
                (6) by redesignating subparagraph (D) as subparagraph (C)
            and by inserting in such subparagraph ``in the case of any
            individual,'' before ``substantial evidence''; and
                (7) in the first sentence following subparagraph (C) (as
            redesignated by paragraph (6)), by--
                        (A) inserting ``(i)'' before ``to restore''; and

    [[Page 110 STAT. 2190]]

                        (B) inserting ``, or (ii) in the case of an
                    individual under the age of 18, to eliminate or improve
                    the individual's impairment or combination of
                    impairments so that it no longer results in marked and
                    severe functional limitations'' immediately before the
                    period.

        (d) Effective Dates, Etc <<NOTE: 42 USC 1382c note.>> .--
                (1) Effective dates.--
                        (A) Subsections (a) and (b).--
                              (i) In general.--The provisions of, and
                          amendments made by, subsections (a) and (b) of
                          this section shall apply to any individual who
                          applies for, or whose claim is finally adjudicated
                          with respect to, benefits under title XVI of the
                          Social Security Act on or after the date of the
                          enactment of this Act, without regard to whether
                          regulations have been issued to implement such
                          provisions and amendments.
                              (ii) Determination of final adjudication.--For
                          purposes of clause (i), no individual's claim with
                          respect to such benefits may be considered to be
                          finally adjudicated before such date of enactment
                          if, on or after such date, there is pending a
                          request for either administrative or judicial
                          review with respect to such claim that has been
                          denied in whole, or there is pending, with respect
                          to such claim, readjudication by the Commissioner
                          of Social Security pursuant to relief in a class
                          action or implementation by the Commissioner of a
                          court remand order.
                        (B) Subsection (c).--The amendments made by
                    subsection (c) of this section shall apply with respect
                    to benefits under title XVI of the Social Security Act
                    for months beginning on or after the date of the
                    enactment of this Act, without regard to whether
                    regulations have been issued to implement such
                    amendments.
                (2) Application to current recipients.--
                        (A) Eligibility redeterminations.--During the period
                    beginning on the date of the enactment of this Act and
                    ending on the date which is 1 year after such date of
                    enactment, the Commissioner of Social Security shall
                    redetermine the eligibility of any individual under age
                    18 who is eligible for supplemental security income
                    benefits by reason of disability under title XVI of the
                    Social Security Act as of the date of the enactment of
                    this Act and whose eligibility for such benefits may
                    terminate by reason of the provisions of, or amendments
                    made by, subsections (a) and (b) of this section. With
                    respect to any redetermination under this subparagraph--
                              (i) section 1614(a)(4) of the Social Security
                          Act (42 U.S.C. 1382c(a)(4)) shall not apply;
                              (ii) the Commissioner of Social Security shall
                          apply the eligibility criteria for new applicants
                          for benefits under title XVI of such Act;
                              (iii) the Commissioner shall give such
                          redetermination priority over all continuing
                          eligibility reviews and other reviews under such
                          title; and
                              (iv) such redetermination shall be counted as
                          a review or redetermination otherwise required to
                          be made under section 208 of the Social Security

    [[Page 110 STAT. 2191]]

                          Independence and Program Improvements Act of 1994
                          or any other provision of title XVI of the Social
                          Security Act.
                        (B) Grandfather provision.--The provisions of, and
                    amendments made by, subsections (a) and (b) of this
                    section, and the redetermination under subparagraph (A),
                    shall only apply with respect to the benefits of an
                    individual described in subparagraph (A) for months
                    beginning on or after the later of July 1, 1997, or the
                    date of the redetermination with respect to such
                    individual.
                        (C) Notice.--Not later than January 1, 1997, the
                    Commissioner of Social Security shall notify an
                    individual described in subparagraph (A) of the
                    provisions of this paragraph.
                (3) Report.--The Commissioner of Social Security shall
            report to the Congress regarding the progress made in
            implementing the provisions of, and amendments made by, this
            section on child disability evaluations not later than 180 days
            after the date of the enactment of this Act.
                (4) Regulations.--Notwithstanding any other provision of
            law, the Commissioner of Social Security shall submit for review
            to the committees of jurisdiction in the Congress any final
            regulation pertaining to the eligibility of individuals under
            age 18 for benefits under title XVI of the Social Security Act
            at least 45 days before the effective date of such regulation.
            The submission under this paragraph shall include supporting
            documentation providing a cost analysis, workload impact, and
            projections as to how the regulation will effect the future
            number of recipients under such title.
                (5) Cap adjustment for ssi administrative work required by
            welfare reform.--
                        (A) Authorization.--For the additional costs of
                    continuing disability reviews and redeterminations under
                    title XVI of the Social Security Act, there is hereby
                    authorized to be appropriated to the Social Security
                    Administration, in addition to amounts authorized under
                    section 201(g)(1)(A) of the Social Security Act,
                    $150,000,000 in fiscal year 1997 and $100,000,000 in
                    fiscal year 1998.
                        (B) Cap adjustment.--Section 251(b)(2)(H) of the
                    Balanced Budget and Emergency Deficit Control Act of
                    1985, as amended by section 103(b) of the Contract with
                    America Advancement Act of 1996, <<NOTE: 2 USC 901.>>
                    is amended--
                              (i) in clause (i)--
                                        (I) in subclause (II) by--
                                                (aa) striking
                                            ``$25,000,000'' and inserting
                                            ``$175,000,000''; and
                                                (bb) striking
                                            ``$160,000,000'' and inserting
                                            ``$310,000,000''; and
                                        (II) in subclause (III) by--
                                                (aa) striking
                                            ``$145,000,000'' and inserting
                                            ``$245,000,000''; and
                                                (bb) striking
                                            ``$370,000,000'' and inserting
                                            ``$470,000,000''; and
                              (ii) by amending clause (ii)(I) to read as
                          follows:
                              ``(I) the term `continuing disability reviews'
                          means reviews or redeterminations as defined under
                          section 201(g)(1)(A) of the Social Security Act
                          and reviews

    [[Page 110 STAT. 2192]]

                          and redeterminations authorized under section 211
                          of the Personal Responsibility and Work
                          Opportunity Reconciliation Act of 1996;''.
                        (C) Adjustments.--Section <<NOTE: 2 USC 665e.>>
                    606(e)(1)(B) of the Congressional Budget Act of 1974 is
                    amended by adding at the end the following new
                    sentences: ``If the adjustments referred to in the
                    preceding sentence are made for an appropriations
                    measure that is not enacted into law, then the Chairman
                    of the Committee on the Budget of the House of
                    Representatives shall, as soon as practicable, reverse
                    those adjustments. The Chairman of the Committee on the
                    Budget of the House of Representatives shall submit any
                    adjustments made under this subparagraph to the House of
                    Representatives and have such adjustments published in
                    the Congressional Record.''.
                        (D) Conforming amendment.--Section 103(d)(1) of the
                    Contract with America Advancement Act of 1996 (42 U.S.C.
                    401 note) <<NOTE: Ante, p. 850.>>  is amended by
                    striking ``medicaid programs.'' and inserting ``medicaid
                    programs, except that the amounts appropriated pursuant
                    to the authorization and discretionary spending
                    allowance provisions in section 211(d)(2)(5) of the
                    Personal Responsibility and Work Opportunity
                    Reconciliation Act of 1996 shall be used only for
                    continuing disability reviews and redeterminations under
                    title XVI of the Social Security Act.''.
                (6) Benefits under title xvi.--For purposes of this
            subsection, the term ``benefits under title XVI of the Social
            Security Act'' includes supplementary payments pursuant to an
            agreement for Federal administration under section 1616(a) of
            the Social Security Act, and payments pursuant to an agreement
            entered into under section 212(b) of Public Law 93-66.

    SEC. 212. ELIGIBILITY REDETERMINATIONS AND CONTINUING DISABILITY
                REVIEWS.

        (a) Continuing Disability Reviews Relating to Certain Children.--
    Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as redesignated by
    section 211(a)(3) of this Act, is amended--
                (1) by inserting ``(i)'' after ``(H)''; and
                (2) by adding at the end the following new clause:

        ``(ii)(I) Not less frequently than once every 3 years, the
    Commissioner shall review in accordance with paragraph (4) the continued
    eligibility for benefits under this title of each individual who has not
    attained 18 years of age and is eligible for such benefits by reason of
    an impairment (or combination of impairments) which is likely to improve
    (or, at the option of the Commissioner,
    which is unlikely to improve).
        ``(II) A representative payee of a recipient whose case is reviewed
    under this clause shall present, at the time of review, evidence
    demonstrating that the recipient is, and has been, receiving treatment,
    to the extent considered medically necessary and available, of the
    condition which was the basis for providing benefits under this title.
        ``(III) If the representative payee refuses to comply without good
    cause with the requirements of subclause (II), the Commissioner of
    Social Security shall, if the Commissioner determines it is in the best
    interest of the individual, promptly suspend payment of benefits to the
    representative payee, and provide for pay

    [[Page 110 STAT. 2193]]

    ment of benefits to an alternative representative payee of the
    individual or, if the interest of the individual under this title would
    be served thereby, to the individual.
        ``(IV) Subclause (II) shall not apply to the representative payee of
    any individual with respect to whom the Commissioner determines such
    application would be inappropriate or unnecessary. In making such
    determination, the Commissioner shall take into consideration the nature
    of the individual's impairment (or combination of impairments). Section
    1631(c) shall not apply to a finding by the Commissioner that the
    requirements of subclause (II) should not apply to an individual's
    representative payee.''.
        (b) Disability Eligibility Redeterminations Required for SSI
    Recipients Who Attain 18 Years of Age.--
                (1) In general.--Section 1614(a)(3)(H) (42 U.S.C.
            1382c(a)(3)(H)), as amended by subsection (a) of this section,
            is amended by adding at the end the following new clause:

        ``(iii) If an individual is eligible for benefits under this title
    by reason of disability for the month preceding the month in which the
    individual attains the age of 18 years, the Commissioner shall
    redetermine such eligibility--
                ``(I) during the 1-year period beginning on the individual's
            18th birthday; and
                ``(II) by applying the criteria used in determining the
            initial eligibility for applicants who are age 18 or older.

    With respect to a redetermination under this clause, paragraph (4) shall
    not apply and such redetermination shall be considered a substitute for
    a review or redetermination otherwise required under any other provision
    of this subparagraph during that 1-year period.''.
                (2) Conforming repeal.--Section 207 of the Social Security
            Independence and Program Improvements Act of 1994 (42 U.S.C.
            1382 note; 108 Stat. 1516) is hereby repealed.

        (c) Continuing Disability Review Required for Low Birth Weight
    Babies.--Section 1614(a)(3)(H) (42 U.S.C. 1382c(a)(3)(H)), as amended by
    subsections (a) and (b) of this section, is amended by adding at the end
    the following new clause:
        ``(iv)(I) Not later than 12 months after the birth of an individual,
    the Commissioner shall review in accordance with paragraph (4) the
    continuing eligibility for benefits under this title by reason of
    disability of such individual whose low birth weight is a contributing
    factor material to the Commissioner's determination that the individual
    is disabled.
        ``(II) A review under subclause (I) shall be considered a substitute
    for a review otherwise required under any other provision of this
    subparagraph during that 12-month period.
        ``(III) A representative payee of a recipient whose case is reviewed
    under this clause shall present, at the time of review, evidence
    demonstrating that the recipient is, and has been, receiving treatment,
    to the extent considered medically necessary and available, of the
    condition which was the basis for providing benefits under this title.
        ``(IV) If the representative payee refuses to comply without good
    cause with the requirements of subclause (III), the Commissioner of
    Social Security shall, if the Commissioner determines it is in the best
    interest of the individual, promptly suspend payment of benefits to the
    representative payee, and provide for
    payment of benefits to an alternative representative payee of the

    [[Page 110 STAT. 2194]]

    individual or, if the interest of the individual under this title would
    be served thereby, to the individual.
        ``(V) Subclause (III) shall not apply to the representative payee of
    any individual with respect to whom the Commissioner determines such
    application would be inappropriate or unnecessary. In making such
    determination, the Commissioner shall take into consideration the nature
    of the individual's impairment (or combination of impairments). Section
    1631(c) shall not apply to a finding by the Commissioner that the
    requirements of subclause (III) should not apply to an individual's
    representative payee.''.
        (d) Effective Date <<NOTE: 42 USC 1382c note.>> .--The amendments
    made by this section shall apply to benefits for months beginning on or
    after the date of the enactment of this Act, without regard to whether
    regulations have been issued to implement such amendments.

    SEC. 213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS.

        (a) Requirement To Establish Account.--Section 1631(a)(2) (42 U.S.C.
    1383(a)(2)) is amended--
                (1) by redesignating subparagraphs (F) and (G) as
            subparagraphs (G) and (H), respectively; and
                (2) by inserting after subparagraph (E) the following new
            subparagraph:

        ``(F)(i)(I) Each representative payee of an eligible individual
    under the age of 18 who is eligible for the payment of benefits
    described in subclause (II) shall establish on behalf of such individual
    an account in a financial institution into which such benefits shall be
    paid, and shall thereafter maintain such account for use in accordance
    with clause (ii).
        ``(II) Benefits described in this subclause are past-due monthly
    benefits under this title (which, for purposes of this subclause,
    include State supplementary payments made by the Commissioner pursuant
    to an agreement under section 1616 or section 212(b) of Public Law 93-
    66) in an amount (after any withholding by the Commissioner for
    reimbursement to a State for interim assistance under subsection (g))
    that exceeds the product of--
                ``(aa) 6, and
                ``(bb) the maximum monthly benefit payable under this title
            to an eligible individual.

        ``(ii)(I) A representative payee shall use funds in the account
    established under clause (i) to pay for allowable expenses described in
    subclause (II).
        ``(II) An allowable expense described in this subclause is an
    expense for--
                ``(aa) education or job skills training;
                ``(bb) personal needs assistance;
                ``(cc) special equipment;
                ``(dd) housing modification;
                ``(ee) medical treatment;
                ``(ff) therapy or rehabilitation; or
                ``(gg) any other item or service that the Commissioner
            determines to be appropriate;

    provided that such expense benefits such individual and, in the case of
    an expense described in item (bb), (cc), (dd), (ff), or (gg), is related
    to the impairment (or combination of impairments) of such individual.
        ``(III) The use of funds from an account established under clause
    (i) in any manner not authorized by this clause--

    [[Page 110 STAT. 2195]]

                ``(aa) by a representative payee shall be considered a
            misapplication of benefits for all purposes of this paragraph,
            and any representative payee who knowingly misapplies benefits
            from such an account shall be liable to the Commissioner in an
            amount equal to the total amount of such benefits; and
                ``(bb) by an eligible individual who is his or her own payee
            shall be considered a misapplication of benefits for all
            purposes of this paragraph and the total amount of such benefits
            so used shall be considered to be the uncompensated value of a
            disposed resource and shall be subject to the provisions of
            section 1613(c).

        ``(IV) This clause shall continue to apply to funds in the account
    after the child has reached age 18, regardless of whether benefits are
    paid directly to the beneficiary or through a representative payee.
        ``(iii) The representative payee may deposit into the account
    established pursuant to clause (i)--
                ``(I) past-due benefits payable to the eligible individual
            in an amount less than that specified in clause (i)(II), and
                ``(II) any other funds representing an underpayment under
            this title to such individual, provided that the amount of such
            underpayment is equal to or exceeds the maximum monthly benefit
            payable under this title to an eligible individual.

        ``(iv) The Commissioner of Social Security shall establish a system
    for accountability monitoring whereby such representative payee shall
    report, at such time and in such manner as the Commissioner shall
    require, on activity respecting funds in the account established
    pursuant to clause (i).''.
        (b) Exclusion From Resources.--Section 1613(a) (42 U.S.C. 1382b(a))
    is amended--
                (1) by striking ``and'' at the end of paragraph (10);
                (2) by striking the period at the end of paragraph (11) and
            inserting ``; and''; and
                (3) by inserting after paragraph (11) the following new
            paragraph:
                ``(12) any account, including accrued interest or other
            earnings thereon, established and maintained in accordance with
            section 1631(a)(2)(F).''.

        (c) Exclusion From Income.--Section 1612(b) (42 U.S.C. 1382a(b)) is
    amended--
                (1) by striking ``and'' at the end of paragraph (19);
                (2) by striking the period at the end of paragraph (20) and
            inserting ``; and''; and
                (3) by adding at the end the following new paragraph:
                ``(21) the interest or other earnings on any account
            established and maintained in accordance with section
            1631(a)(2)(F).''.

        (d) Effective Date <<NOTE: 42 USC 1382a note.>> .--The amendments
    made by this section shall apply to payments made after the date of the
    enactment of this Act.

    SEC. 214. REDUCTION IN CASH BENEFITS PAYABLE TO INSTITUTIONALIZED
                INDIVIDUALS WHOSE MEDICAL COSTS ARE
                COVERED BY PRIVATE INSURANCE.

        (a) In General.--Section 1611(e)(1)(B) (42 U.S.C. 1382(e)(1)(B)) is
    amended by inserting ``or, in the case of an eligible individual who is
    a child under the age of 18, receiving payments (with

    [[Page 110 STAT. 2196]]

    respect to such individual) under any health insurance policy issued by
    a private provider of such insurance'' after ``section 1614(f)(2)(B),''.
        (b) Effective Date <<NOTE: 42 USC 1382 note.>> .--The amendment made
    by this section shall apply to benefits for months beginning 90 or more
    days after the date of the enactment of this Act, without regard to
    whether regulations have been issued to implement such amendments.

    SEC. 215. <<NOTE: 42 USC 1382 note.>>  REGULATIONS.

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

                  Subtitle C--Additional Enforcement Provision

    SEC. 221. INSTALLMENT PAYMENT OF LARGE PAST-DUE SUPPLEMENTAL SECURITY
                INCOME BENEFITS.

        (a) In General.--Section 1631(a) (42 U.S.C. 1383) is amended by
    adding at the end the following new paragraph:
        ``(10)(A) If an individual is eligible for past-due monthly benefits
    under this title in an amount that (after any withholding for
    reimbursement to a State for interim assistance under subsection (g))
    equals or exceeds the product of--
                ``(i) 12, and
                ``(ii) the maximum monthly benefit payable under this title
            to an eligible individual (or, if appropriate, to an eligible
            indi-
            vidual and eligible spouse),

    then the payment of such past-due benefits (after any such reimbursement
    to a State) shall be made in installments as provided in subparagraph
    (B).
        ``(B)(i) The payment of past-due benefits subject to this
    subparagraph shall be made in not to exceed 3 installments that are made
    at 6-month intervals.
        ``(ii) Except as provided in clause (iii), the amount of each of the
    first and second installments may not exceed an amount equal to the
    product of clauses (i) and (ii) of subparagraph (A).
        ``(iii) In the case of an individual who has--
                ``(I) outstanding debt attributable to--
                        ``(aa) food,
                        ``(bb) clothing,
                        ``(cc) shelter, or
                        ``(dd) medically necessary services, supplies or
                    equipment, or medicine; or
                ``(II) current expenses or expenses anticipated in the near
            term attributable to--
                        ``(aa) medically necessary services, supplies or
                    equipment, or medicine, or
                        ``(bb) the purchase of a home, and

    such debt or expenses are not subject to reimbursement by a public
    assistance program, the Secretary under title XVIII, a State plan
    approved under title XIX, or any private entity legally liable to
    provide payment pursuant to an insurance policy, pre-paid plan, or other
    arrangement, the limitation specified in clause (ii) may

    [[Page 110 STAT. 2197]]

    be exceeded by an amount equal to the total of such debt and expenses.
        ``(C) This paragraph shall not apply to any individual who, at the
    time of the Commissioner's determination that such individual is
    eligible for the payment of past-due monthly benefits under this title--
                ``(i) is afflicted with a medically determinable impairment
            that is expected to result in death within 12 months; or
                ``(ii) is ineligible for benefits under this title and the
            Commissioner determines that such individual is likely to remain
            ineligible for the next 12 months.

        ``(D) For purposes of this paragraph, the term `benefits under this
    title' includes supplementary payments pursuant to an agreement for
    Federal administration under section 1616(a), and payments pursuant to
    an agreement entered into under section 212(b) of Public Law 93-66.''.
        (b) Conforming Amendment.--Section 1631(a)(1) (42 U.S.C. 1383(a)(1))
    is amended by inserting ``(subject to paragraph (10))'' immediately
    before ``in such installments''.
        (c) Effective Date <<NOTE: 42 USC 1383 note.>> .--
                (1) In general.--The amendments made by this section are
            effective with respect to past-due benefits payable under title
            XVI of the Social Security Act after the third month following
            the month in which this Act is enacted.
                (2) Benefits payable under title xvi.--For purposes of this
            subsection, the term ``benefits payable under title XVI of the
            Social Security Act'' includes supplementary payments pursuant
            to an agreement for Federal administration under section 1616(a)
            of the Social Security Act, and payments pursuant to an
            agreement entered into under section 212(b) of Public Law 93-66.

    SEC. 222. <<NOTE: 42 USC 1383 note.>>  REGULATIONS.

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

       Subtitle D--Studies Regarding Supplemental Security Income Program

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

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

                           ``annual report on program

        ``Sec. 1637. <<NOTE: 42 USC 1383f.>>  (a) Not later than May 30 of
    each year, the Commissioner of Social Security shall prepare and deliver
    a report annually to the President and the Congress regarding the
    program under this title, including--
                ``(1) a comprehensive description of the program;
                ``(2) historical and current data on allowances and denials,
            including number of applications and allowance rates for initial

    [[Page 110 STAT. 2198]]

            determinations, reconsideration determinations, administrative
            law judge hearings, appeals council reviews, and Federal court
            decisions;
                ``(3) historical and current data on characteristics of
            recipients and program costs, by recipient group (aged, blind,
            disabled adults, and disabled children);
                ``(4) historical and current data on prior enrollment by
            recipients in public benefit programs, including State programs
            funded under part A of title IV of the Social Security Act and
            State general assistance programs;
                ``(5) projections of future number of recipients and program
            costs, through at least 25 years;
                ``(6) number of redeterminations and continuing dis-
            ability reviews, and the outcomes of such redeterminations and
            reviews;
                ``(7) data on the utilization of work incentives;
                ``(8) detailed information on administrative and other
            program operation costs;
                ``(9) summaries of relevant research undertaken by the
            Social Security Administration, or by other researchers;
                ``(10) State supplementation program operations;
                ``(11) a historical summary of statutory changes to this
            title; and
                ``(12) such other information as the Commissioner deems
            useful.

        ``(b) Each member of the Social Security Advisory Board shall be
    permitted to provide an individual report, or a joint report if agreed,
    of views of the program under this title, to be included in the annual
    report required under this section.''.

    SEC. 232. <<NOTE: 42 USC 1382 note.>>  STUDY BY GENERAL ACCOUNTING
                OFFICE.

        Not later than January 1, 1999, the Comptroller General of the
    United States shall study and report on--
                (1) the impact of the amendments made by, and the provisions
            of, this title on the supplemental security income program under
            title XVI of the Social Security Act; and
                (2) extra expenses incurred by families of children
            receiving benefits under such title that are not covered by
            other Federal, State, or local programs.

                            TITLE III--CHILD SUPPORT

    SEC. 300. REFERENCE TO SOCIAL SECURITY ACT.

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

    [[Page 110 STAT. 2199]]

         Subtitle A--Eligibility for Services; Distribution of Payments

    SEC. 301. STATE OBLIGATION TO PROVIDE CHILD SUPPORT ENFORCEMENT
                SERVICES.

        (a) State Plan Requirements.--Section 454 (42 U.S.C. 654) is
    amended--
                (1) by striking paragraph (4) and inserting the following
            new paragraph:
                ``(4) provide that the State will--
                        ``(A) provide services relating to the establishment
                    of paternity or the establishment, modification, or
                    enforcement of child support obligations, as
                    appropriate, under the plan with respect to--
                              ``(i) each child for whom (I) assistance is
                          provided under the State program funded under part
                          A of this title, (II) benefits or services for
                          foster care maintenance are provided under the
                          State program funded under part E of this title,
                          or (III) medical assistance is provided under the
                          State plan approved under title XIX, unless, in
                          accordance with paragraph (29), good cause or
                          other exceptions exist;
                              ``(ii) any other child, if an individual
                          applies for such services with respect to the
                          child; and
                        ``(B) enforce any support obligation established
                    with respect to--
                              ``(i) a child with respect to whom the State
                          provides services under the plan; or
                              ``(ii) the custodial parent of such a
                          child;''; and
                (2) in paragraph (6)--
                        (A) by striking ``provide that'' and inserting
                    ``provide that--'';
                        (B) by striking subparagraph (A) and inserting the
                    following new subparagraph:
                        ``(A) services under the plan shall be made
                    available to residents of other States on the same terms
                    as to residents of the State submitting the plan;'';
                        (C) in subparagraph (B), by inserting ``on
                    individuals not receiving assistance under any State
                    program funded under part A'' after ``such services
                    shall be imposed'';
                        (D) in each of subparagraphs (B), (C), (D), and
                    (E)--
                              (i) by indenting the subparagraph in the same
                          manner as, and aligning the left margin of the
                          subparagraph with the left margin of, the matter
                          inserted by subparagraph (B) of this paragraph;
                          and
                              (ii) by striking the final comma and inserting
                          a semicolon; and
                        (E) in subparagraph (E), by indenting each of
                    clauses (i) and (ii) 2 additional ems.

        (b) Continuation of Services for Families Ceasing To Receive
    Assistance Under the State Program Funded Under Part A.--Section 454 (42
    U.S.C. 654) is amended--
                (1) by striking ``and'' at the end of paragraph (23);
                (2) by striking the period at the end of paragraph (24) and
            inserting ``; and''; and

    [[Page 110 STAT. 2200]]

                (3) by adding after paragraph (24) the following new
            paragraph:
                ``(25) provide that if a family with respect to which
            services are provided under the plan ceases to receive
            assistance under the State program funded under part A, the
            State shall provide appropriate notice to the family and
            continue to provide such services, subject to the same
            conditions and on the same basis as in the case of other
            individuals to whom services are furnished under the plan,
            except that an application or other request to continue services
            shall not be required of such a family and paragraph (6)(B)
            shall not apply to the family.''.

        (c) Conforming Amendments.--
                (1) Section 452(b) (42 U.S.C. 652(b)) is amended by striking
            ``454(6)'' and inserting ``454(4)''.
                (2) Section 452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is amended
            by striking ``454(6)'' each place it appears and inserting
            ``454(4)(A)(ii)''.
                (3) Section 466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is amended
            by striking ``in the case of overdue support which a State has
            agreed to collect under section 454(6)'' and inserting ``in any
            other case''.
                (4) Section 466(e) (42 U.S.C. 666(e)) is amended by striking
            ``paragraph (4) or (6) of section 454'' and inserting ``section
            454(4)''.

    SEC. 302. DISTRIBUTION OF CHILD SUPPORT COLLECTIONS.

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

    ``SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

        ``(a) In General.--Subject to subsection (e), an amount collected on
    behalf of a family as support by a State pursuant to a plan approved
    under this part shall be distributed as follows:
                ``(1) Families receiving assistance.--In the case of a
            family receiving assistance from the State, the State shall--
                        ``(A) pay to the Federal Government the Federal
                    share of the amount so collected; and
                        ``(B) retain, or distribute to the family, the State
                    share of the amount so collected.
                ``(2) Families that formerly received assistance.--In the
            case of a family that formerly received assistance
            from the State:
                        ``(A) Current support payments.--To the extent that
                    the amount so collected does not exceed the amount
                    required to be paid to the family for the month in which
                    collected, the State shall distribute the amount so
                    collected to the family.
                        ``(B) Payments of arrearages.--To the extent that
                    the amount so collected exceeds the amount required to
                    be paid to the family for the month in which collected,
                    the State shall distribute the amount so collected as
                    follows:
                              ``(i) Distribution of arrearages that accrued
                          after the family ceased to receive assistance.--
                                        ``(I) Pre-october 1997.--Except as
                                    provided in subclause (II), the
                                    provisions of this section (other than
                                    subsection (b)(1)) as in effect and
                                    applied on the day before the date of
                                    the enactment of section 302 of the
                                    Personal Responsibility and

    [[Page 110 STAT. 2201]]

                                    Work Opportunity Act Reconciliation of
                                    1996 shall apply with respect to the
                                    distribution of support arrearages
                                    that--
                                                ``(aa) accrued after the
                                            family ceased to receive
                                            assistance, and
                                                ``(bb) are collected before
                                            October 1, 1997.
                                        ``(II) Post-september 1997.--With
                                    respect to the amount so collected on or
                                    after October 1, 1997 (or before such
                                    date, at the option of the State)--
                                                ``(aa) In general.--The
                                            State shall first distribute the
                                            amount so collected (other than
                                            any amount described in clause
                                            (iv)) to the family to the
                                            extent necessary to satisfy any
                                            support arrearages with respect
                                            to the family that accrued after
                                            the family ceased to receive
                                            assistance from the State.
                                                ``(bb) Reimbursement of
                                            governments for assistance
                                            provided to the family.--After
                                            the application of division (aa)
                                            and clause (ii)(II)(aa) with
                                            respect to the amount so
                                            collected, the State shall
                                            retain the State share of the
                                            amount so collected, and pay to
                                            the Federal Government the
                                            Federal share (as defined in
                                            subsection (c)(2)) of the amount
                                            so collected, but only to the
                                            extent necessary to reimburse
                                            amounts paid to the family as
                                            assistance by the State.
                                                ``(cc) Distribution of the
                                            remainder to the family.--To the
                                            extent that neither division
                                            (aa) nor division (bb) applies
                                            to the amount so collected, the
                                            State shall distribute the
                                            amount to the family.
                              ``(ii) Distribution of arrearages that accrued
                          before the family received assistance.--
                                        ``(I) Pre-october 2000.--Except as
                                    provided in subclause (II), the
                                    provisions of this section (other than
                                    subsection (b)(1)) as in effect and
                                    applied on the day before the date of
                                    the enactment of section 302 of the
                                    Personal Responsibility and Work
                                    Opportunity Reconciliation Act of 1996
                                    shall apply with respect to the
                                    distribution of support arrearages
                                    that--
                                                ``(aa) accrued before the
                                            family received assistance, and
                                                ``(bb) are collected before
                                            October 1, 2000.
                                        ``(II) Post-september 2000.--Unless,
                                    based on the report required by
                                    paragraph (4), the Congress determines
                                    otherwise, with respect to the amount so
                                    collected on or after October 1, 2000
                                    (or before such date, at the option of
                                    the State)--
                                                ``(aa) In general.--The
                                            State shall first distribute the
                                            amount so collected (other than
                                            any amount described in clause
                                            (iv)) to the family to the
                                            extent necessary to satisfy any
                                            support arrearages with respect
                                            to the family

    [[Page 110 STAT. 2202]]

                                            that accrued before the family
                                            received assistance from the
                                            State.
                                                ``(bb) Reimbursement of
                                            governments for assistance
                                            provided to the family.--After
                                            the application of clause
                                            (i)(II)(aa) and division (aa)
                                            with respect to the amount so
                                            collected, the State shall
                                            retain the State share of the
                                            amount so collected, and pay to
                                            the Federal Government the
                                            Federal share (as defined in
                                            subsection (c)(2)) of the amount
                                            so collected, but only to the
                                            extent necessary to reimburse
                                            amounts paid to the family as
                                            assistance by the State.
                                                ``(cc) Distribution of the
                                            remainder to the family.--To the
                                            extent that neither division
                                            (aa) nor division (bb) applies
                                            to the amount so collected, the
                                            State shall distribute the
                                            amount to the family.
                              ``(iii) Distribution of arrearages that
                          accrued while the family received assistance.--In
                          the case of a family described in this
                          subparagraph, the provisions of paragraph (1)
                          shall apply with respect to the distribution of
                          support arrearages that accrued while the family
                          received assistance.
                              ``(iv) Amounts collected pursuant to section
                          464.--Notwithstanding any other provision of this
                          section, any amount of support collected pursuant
                          to
                          section 464 shall be retained by the State to the
                          extent past-due support has been assigned to the
                          State as a condition of receiving assistance from
                          the State, up to the amount necessary to reimburse
                          the State for amounts paid to the family as
                          assistance by the State. The State shall pay to
                          the Federal Government the Federal share of the
                          amounts so retained. To the extent the amount
                          collected pursuant to section 464 exceeds the
                          amount so retained, the State shall distribute the
                          excess to the family.
                              ``(v) Ordering rules for distributions.--For
                          purposes of this subparagraph, unless an earlier
                          effective date is required by this section,
                          effective October 1, 2000, the State shall treat
                          any support arrearages collected, except for
                          amounts collected pursuant to section 464, as
                          accruing in the following order:
                                        ``(I) To the period after the family
                                    ceased to receive assistance.
                                        ``(II) To the period before the
                                    family received assistance.
                                        ``(III) To the period while the
                                    family was receiving assistance.
                ``(3) Families that never received assistance.--In the case
            of any other family, the State shall distribute the amount so
            collected to the family.
                ``(4) Families under certain agreements.--In the case of a
            family receiving assistance from an Indian tribe, distribute the
            amount so collected pursuant to an agreement entered into
            pursuant to a State plan under section 454(33).

    [[Page 110 STAT. 2203]]

                ``(5) Study and report.--Not later than October 1, 1998, the
            Secretary shall report to the Congress the Secretary's findings
            with respect to--
                        ``(A) whether the distribution of post-assistance
                    arrearages to families has been effective in moving
                    people off of welfare and keeping them off of welfare;
                        ``(B) whether early implementation of a pre-
                    assistance arrearage program by some States has been
                    effective in moving people off of welfare and keeping
                    them off of welfare;
                        ``(C) what the overall impact has been of the
                    amendments made by the Personal Responsibility and Work
                    Opportunity Act of 1996 with respect to child support
                    enforcement in moving people off of welfare and keeping
                    them off of welfare; and
                        ``(D) based on the information and data the
                    Secretary has obtained, what changes, if any, should be
                    made in the policies related to the distribution of
                    child support arrearages.

        ``(b) Continuation of Assignments.--Any rights to support
    obligations, which were assigned to a State as a condition of receiving
    assistance from the State under part A and which were in effect on the
    day before the date of the enactment of the Personal Responsibility and
    Work Opportunity Act of 1996, shall remain assigned after such date.
        ``(c) Definitions.--As used in subsection (a):
                ``(1) Assistance.--The term `assistance from the State'
            means--
                        ``(A) assistance under the State program funded
                    under part A or under the State plan approved under part
                    A of this title (as in effect on the day before the date
                    of the enactment of the Personal Responsibility and Work
                    Opportunity Act of 1996); and
                        ``(B) foster care maintenance payments under the
                    State plan approved under part E of this title.
                ``(2) Federal share.--The term `Federal share' means that
            portion of the amount collected resulting from the application
            of the Federal medical assistance percentage in effect for the
            fiscal year in which the amount is collected.
                ``(3) Federal medical assistance percentage.--The term
            `Federal medical assistance percentage' means--
                        ``(A) the Federal medical assistance percentage (as
                    defined in section 1118), in the case of Puerto Rico,
                    the Virgin Islands, Guam, and American Samoa; or
                        ``(B) the Federal medical assistance percentage (as
                    defined in section 1905(b), as in effect on September
                    30, 1996) in the case of any other State.
                ``(4) State share.--The term `State share' means 100 percent
            minus the Federal share.

        ``(d) Hold Harmless Provision.--If the amounts collected which could
    be retained by the State in the fiscal year (to the extent necessary to
    reimburse the State for amounts paid to families as assistance by the
    State) are less than the State share of the amounts collected in fiscal
    year 1995 (determined in accordance with section 457 as in effect on the
    day before the date of the enactment of the Personal Responsibility and
    Work Opportunity

    [[Page 110 STAT. 2204]]

    Act of 1996), the State share for the fiscal year shall be an amount
    equal to the State share in fiscal year 1995.
        ``(e) Gap Payments Not Subject to Distribution Under This Section.--
    At State option, this section shall not apply to any amount collected on
    behalf of a family as support by the State (and paid to the family in
    addition to the amount of assistance otherwise payable to the family)
    pursuant to a plan approved under this part if such amount would have
    been paid to the family by the State under section 402(a)(28), as in
    effect and applied on the day before the date of the enactment of
    section 302 of the Personal Responsibility and Work Opportunity
    Reconciliation Act of 1996. For purposes of subsection (d), the State
    share of such amount paid to the family shall be considered amounts
    which could be retained by the State if such payments were reported by
    the State as part of the State share of amounts collected in fiscal year
    1995.''.
        (b) Conforming Amendments.--
                (1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is amended by
            striking ``section 457(b)(4) or (d)(3)'' and inserting ``section
            457''.
                (2) Section 454 (42 U.S.C. 654) is amended--
                        (A) in paragraph (11)--
                              (i) by striking ``(11)'' and inserting
                          ``(11)(A)''; and
                              (ii) by inserting after the semicolon ``and'';
                          and
                        (B) by redesignating paragraph (12) as subparagraph
                    (B) of paragraph (11).

        (c) Effective Dates <<NOTE: 42 USC 657 note.>> .--
                (1) In General.--Except as provided in paragraph (2), the
            amendments made by this section shall be effective on October 1,
            1996, or earlier at the State's option.
                (2) Conforming amendments.--The amendments made by
            subsection (b)(2) shall become effective on the date of the
            enactment of this Act.

    SEC. 303. PRIVACY SAFEGUARDS.

        (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as amended
    by section 301(b) of this Act, is amended--
                (1) by striking ``and'' at the end of paragraph (24);
                (2) by striking the period at the end of paragraph (25) and
            inserting ``; and''; and
                (3) by adding after paragraph (25) the following new
            paragraph:
                ``(26) will have in effect safeguards, applicable to all
            confidential information handled by the State agency, that are
            designed to protect the privacy rights of the parties,
            including--
                        ``(A) safeguards against unauthorized use or
                    disclosure of information relating to proceedings or
                    actions to establish paternity, or to establish or
                    enforce support;
                        ``(B) prohibitions against the release of
                    information on the whereabouts of 1 party to another
                    party against whom a protective order with respect to
                    the former party has been entered; and
                        ``(C) prohibitions against the release of
                    information on the whereabouts of 1 party to another
                    party if the State has reason to believe that the
                    release of the information may result in physical or
                    emotional harm to the former party.''.

    [[Page 110 STAT. 2205]]

        (b) Effective Date <<NOTE: 42 USC 654 note.>> .--The amendment made
    by subsection (a) shall become effective on October 1, 1997.

    SEC. 304. RIGHTS TO NOTIFICATION OF HEARINGS.

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

        (b) Effective Date <<NOTE: 42 USC 654 note.>> .--The amendment made
    by subsection (a) shall become effective on October 1, 1997.

                      Subtitle B--Locate and Case Tracking

    SEC. 311. STATE CASE REGISTRY.

        Section 454A, as added by section 344(a)(2) of this Act, is amended
    by adding at the end the following new subsections:
        ``(e) State Case Registry.--
                ``(1) Contents.--The automated system required by this
            section shall include a registry (which shall be known as the
            `State case registry') that contains records with respect to--
                        ``(A) each case in which services are being provided
                    by the State agency under the State plan approved under
                    this part; and
                        ``(B) each support order established or modified in
                    the State on or after October 1, 1998.
                ``(2) Linking of local registries.--The State case registry
            may be established by linking local case registries of support
            orders through an automated information network, subject to this
            section.
                ``(3) Use of standardized data elements.--Such records shall
            use standardized data elements for both parents (such as names,
            social security numbers and other uniform identification
            numbers, dates of birth, and case identification numbers), and
            contain such other information (such as on case status) as the
            Secretary may require.
                ``(4) Payment records.--Each case record in the State case
            registry with respect to which services are being provided under
            the State plan approved under this part and with respect to
            which a support order has been established shall include a
            record of--
                        ``(A) the amount of monthly (or other periodic)
                    support owed under the order, and other amounts
                    (including arrearages, interest or late payment
                    penalties, and fees) due or overdue under the order;

    [[Page 110 STAT. 2206]]

                        ``(B) any amount described in subparagraph (A) that
                    has been collected;
                        ``(C) the distribution of such collected amounts;
                        ``(D) the birth date of any child for whom the order
                    requires the provision of support; and
                        ``(E) the amount of any lien imposed with respect to
                    the order pursuant to section 466(a)(4).
                ``(5) Updating and monitoring.--The State agency operating
            the automated system required by this section shall promptly
            establish and update, maintain, and regularly monitor, case
            records in the State case registry with respect to which
            services are being provided under the State plan approved under
            this part, on the basis of--
                        ``(A) information on administrative actions and
                    administrative and judicial proceedings and orders
                    relating to paternity and support;
                        ``(B) information obtained from comparison with
                    Federal, State, or local sources of information;
                        ``(C) information on support collections and
                    distributions; and
                        ``(D) any other relevant information.

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

    [[Page 110 STAT. 2207]]

    SEC. 312. COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

        (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as amended
    by sections 301(b) and 303(a) of this Act, is amended--
                (1) by striking ``and'' at the end of paragraph (25);
                (2) by striking the period at the end of paragraph (26) and
            inserting ``; and''; and
                (3) by adding after paragraph (26) the following new
            paragraph:
                ``(27) provide that, on and after October 1, 1998, the State
            agency will--
                        ``(A) operate a State disbursement unit in
                    accordance with section 454B; and
                        ``(B) have sufficient State staff (consisting of
                    State employees) and (at State option) contractors
                    reporting directly to the State agency to--
                              ``(i) monitor and enforce support collections
                          through the unit in cases being enforced by the
                          State pursuant to section 454(4) (including
                          carrying out the automated data processing
                          responsibilities described in section 454A(g));
                          and
                              ``(ii) take the actions described in section
                          466(c)(1) in appropriate cases.''.

        (b) Establishment of State Disbursement Unit.--Part D of title IV
    (42 U.S.C. 651-669), as amended by section 344(a)(2) of this Act, is
    amended by inserting after section 454A the following new section:

    ``SEC. 454B. <<NOTE: 42 USC 654b.>>  COLLECTION AND DISBURSEMENT OF
                SUPPORT PAYMENTS.

        ``(a) State Disbursement Unit.--
                ``(1) In general.--In order for a State to meet the
            requirements of this section, the State agency must establish
            and operate a unit (which shall be known as the `State
            disbursement unit') for the collection and disbursement of
            payments under support orders--
                        ``(A) in all cases being enforced by the State
                    pursuant to section 454(4); and
                        ``(B) in all cases not being enforced by the State
                    under this part in which the support order is initially
                    issued in the State on or after January 1, 1994, and in
                    which the income of the noncustodial parent is subject
                    to withholding pursuant to section 466(a)(8)(B).
                ``(2) Operation.--The State disbursement unit shall be
            operated--
                        ``(A) directly by the State agency (or 2 or more
                    State agencies under a regional cooperative agreement),
                    or (to the extent appropriate) by a contractor
                    responsible directly to the State agency; and
                        ``(B) except in cases described in paragraph (1)(B),
                    in coordination with the automated system established by
                    the State pursuant to section 454A.
                ``(3) Linking of local disbursement units.--The State
            disbursement unit may be established by linking local
            disbursement units through an automated information network,
            subject to this section, if the Secretary agrees that the system
            will not cost more nor take more time to establish or operate
            than

    [[Page 110 STAT. 2208]]

            a centralized system. In addition, employers shall be given 1
            location to which income withholding is sent.

        ``(b) Required Procedures.--The State disbursement unit shall use
    automated procedures, electronic processes, and computer-driven
    technology to the maximum extent feasible, efficient, and economical,
    for the collection and disbursement of support payments, including
    procedures--
                ``(1) for receipt of payments from parents, employers, and
            other States, and for disbursements to custodial parents and
            other obligees, the State agency, and the agencies of other
            States;
                ``(2) for accurate identification of payments;
                ``(3) to ensure prompt disbursement of the custodial
            parent's share of any payment; and
                ``(4) to furnish to any parent, upon request, timely
            information on the current status of support payments under an
            order requiring payments to be made by or to the parent, except
            that in cases described in subsection (a)(1)(B), the State
            disbursement unit shall not be required to convert and maintain
            in automated form records of payments kept pursuant to section
            466(a)(8)(B)(iii) before the effective date of this section.

        ``(c) Timing of Disbursements.--
                ``(1) In general.--Except as provided in paragraph (2), the
            State disbursement unit shall distribute all amounts payable
            under section 457(a) within 2 business days after receipt from
            the employer or other source of periodic income, if sufficient
            information identifying the payee is provided.
                ``(2) Permissive retention of arrearages.--The State
            disbursement unit may delay the distribution of collections
            toward arrearages until the resolution of any timely appeal with
            respect to such arrearages.

        ``(d) Business Day Defined.--As used in this section, the term
    `business day' means a day on which State offices are open for regular
    business.''.
        (c) Use of Automated System.--Section 454A, as added by section
    344(a)(2) and as amended by section 311 of this Act, is amended by
    adding at the end the following new subsection:
        ``(g) Collection and Distribution of Support Payments.--
                ``(1) In general.--The State shall use the automated system
            required by this section, to the maximum extent feasible, to
            assist and facilitate the collection and disbursement of support
            payments through the State disbursement unit operated under
            section 454B, through the performance of functions, including,
            at a minimum--
                        ``(A) transmission of orders and notices to
                    employers (and other debtors) for the withholding of
                    income--
                              ``(i) within 2 business days after receipt of
                          notice of, and the income source subject to, such
                          withholding from a court, another State, an
                          employer, the Federal Parent Locator Service, or
                          another source recognized by the State; and
                              ``(ii) using uniform formats prescribed by the
                          Secretary;
                        ``(B) ongoing monitoring to promptly identify
                    failures to make timely payment of support; and

    [[Page 110 STAT. 2209]]

                        ``(C) automatic use of enforcement procedures
                    (including procedures authorized pursuant to section
                    466(c)) if payments are not timely made.
                ``(2) Business day defined.--As used in paragraph (1), the
            term `business day' means a day on which State offices are open
            for regular business.''.

        (d) Effective Dates <<NOTE: 42 USC 654b note.>> .--
                (1) In general.--Except as provided in paragraph (2), the
            amendments made by this section shall become effective on
            October 1, 1998.
                (2) Limited exception to unit handling payments.--
            Notwithstanding section 454B(b)(1) of the Social Security Act,
            as added by this section, any State which, as of the date of the
            enactment of this Act, processes the receipt of child support
            payments through local courts may, at the option of the State,
            continue to process through September 30, 1999, such payments
            through such courts as processed such payments on or before such
            date of enactment.

    SEC. 313. STATE DIRECTORY OF NEW HIRES.

        (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as amended
    by sections 301(b), 303(a), and 312(a) of this Act, is amended--
                (1) by striking ``and'' at the end of paragraph (26);
                (2) by striking the period at the end of paragraph (27) and
            inserting ``; and''; and
                (3) by adding after paragraph (27) the following new
            paragraph:
                ``(28) provide that, on and after October 1, 1997, the State
            will operate a State Directory of New Hires in accordance with
            section 453A.''.

        (b) State Directory of New Hires.--Part D of title IV (42 U.S.C.
    651-669) is amended by inserting after section 453 the following new
    section:

    ``SEC. 453A. <<NOTE: 42 USC 653a.>>  STATE DIRECTORY OF NEW HIRES.

        ``(a) Establishment.--
                ``(1) In general.--
                        ``(A) Requirement for States that have no
                    directory.--Except as provided in subparagraph (B), not
                    later than October 1, 1997, each State shall establish
                    an automated directory (to be known as the `State
                    Directory of New Hires') which shall contain information
                    supplied in accordance with subsection (b) by employers
                    on each newly hired employee.
                        ``(B) States with new hire reporting law in
                    existence.--A State which has a new hire reporting law
                    in existence on the date of the enactment of this
                    section may continue to operate under the State law, but
                    the State must meet the requirements of subsection
                    (g)(2) not later than October 1, 1997, and the
                    requirements of this section (other than subsection
                    (g)(2)) not later than October 1, 1998.
                ``(2) Definitions.--As used in this section:
                        ``(A) Employee.--The term `employee'--
                              ``(i) means an individual who is an employee
                          within the meaning of chapter 24 of the Internal
                          Revenue Code of 1986; and

    [[Page 110 STAT. 2210]]

                              ``(ii) does not include an employee of a
                          Federal or State agency performing intelligence or
                          counterintelligence functions, if the head of such
                          agency has determined that reporting pursuant to
                          paragraph (1) with respect to the employee could
                          endanger the safety of the employee or compromise
                          an ongoing investigation or intelligence mission.
                        ``(B) Employer.--
                              ``(i) In general.--The term `employer' has the
                          meaning given such term in section 3401(d) of the
                          Internal Revenue Code of 1986 and includes any
                          governmental entity and any labor organization.
                              ``(ii) Labor organization.--The term `labor
                          organization' shall have the meaning given such
                          term in section 2(5) of the National Labor
                          Relations Act, and includes any entity (also known
                          as a `hiring hall') which is used by the
                          organization and an employer to carry out
                          requirements described in section 8(f)(3) of such
                          Act of an agreement between the organization and
                          the employer.

        ``(b) Employer Information.--
                ``(1) Reporting requirement.--
                        ``(A) In general.--Except as provided in
                    subparagraphs (B) and (C), each employer shall furnish
                    to the Directory of New Hires of the State in which a
                    newly hired employee works, a report that contains the
                    name, address, and social security number of the
                    employee, and the name and address of, and identifying
                    number assigned under section 6109 of the Internal
                    Revenue Code of 1986 to, the employer.
                        ``(B) Multistate employers.--An employer that has
                    employees who are employed in 2 or more States and that
                    transmits reports magnetically or electronically may
                    comply with subparagraph (A) by designating 1 State in
                    which such employer has employees to which the employer
                    will transmit the report described in subparagraph (A),
                    and transmitting such report to such State.
                    Any <<NOTE: Notification.>>  employer that transmits
                    reports pursuant to this subparagraph shall notify the
                    Secretary in writing as to which State such employer
                    designates for the purpose of sending reports.
                        ``(C) Federal government employers.--Any department,
                    agency, or instrumentality of the United States shall
                    comply with subparagraph (A) by transmitting the report
                    described in subparagraph (A) to the National Directory
                    of New Hires established pursuant to section 453.
                ``(2) Timing of report.--Each State may provide the time
            within which the report required by paragraph (1) shall be made
            with respect to an employee, but such report shall
            be made--
                        ``(A) not later than 20 days after the date the
                    employer hires the employee; or
                        ``(B) in the case of an employer transmitting
                    reports magnetically or electronically, by 2 monthly
                    transmissions (if necessary) not less than 12 days nor
                    more than 16 days apart.

        ``(c) Reporting Format and Method.--Each report required by
    subsection (b) shall be made on a W-4 form or, at the option

    [[Page 110 STAT. 2211]]

    of the employer, an equivalent form, and may be transmitted by 1st class
    mail, magnetically, or electronically.
        ``(d) Civil Money Penalties on Noncomplying Employers.--The State
    shall have the option to set a State civil money penalty which shall be
    less than--
                ``(1) $25; or
                ``(2) $500 if, under State law, the failure is the result of
            a conspiracy between the employer and the employee to not supply
            the required report or to supply a false or incomplete report.

        ``(e) Entry of Employer Information.--Information shall be entered
    into the data base maintained by the State Directory of New Hires within
    5 business days of receipt from an employer pursuant to subsection (b).
        ``(f) Information Comparisons.--
                ``(1) In general.--Not later than May 1, 1998, an agency
            designated by the State shall, directly or by contract, conduct
            automated comparisons of the social security numbers reported by
            employers pursuant to subsection (b) and the social security
            numbers appearing in the records of the State case registry for
            cases being enforced under the State plan.
                ``(2) Notice of match.--When an information comparison
            conducted under paragraph (1) reveals a match with respect to
            the social security number of an individual required to provide
            support under a support order, the State Directory of New Hires
            shall provide the agency administering the State plan approved
            under this part of the appropriate State with the name, address,
            and social security number of the employee to whom the social
            security number is assigned, and the name and address of, and
            identifying number assigned under section 6109 of the Internal
            Revenue Code of 1986 to, the employer.

        ``(g) Transmission of Information.--
                ``(1) Transmission of wage withholding notices to
            employers.--Within 2 business days after the date information
            regarding a newly hired employee is entered into the State
            Directory of New Hires, the State agency enforcing the
            employee's child support obligation shall transmit a notice to
            the employer of the employee directing the employer to withhold
            from the income of the employee an amount equal to the monthly
            (or other periodic) child support obligation (including any past
            due support obligation) of the employee, unless the employee's
            income is not subject to withholding pursuant to section
            466(b)(3).
                ``(2) Transmissions to the national directory of new
            hires.--
                        ``(A) New hire information.--Within 3 business days
                    after the date information regarding a newly hired
                    employee is entered into the State Directory of New
                    Hires, the State Directory of New Hires shall furnish
                    the information to the National Directory of New Hires.
                        ``(B) Wage <<NOTE: Regulations.>>  and unemployment
                    compensation information.--The State Directory of New
                    Hires shall, on a quarterly basis, furnish to the
                    National Directory of New Hires extracts of the reports
                    required under section 303(a)(6) to be made to the
                    Secretary of Labor concerning the wages and unemployment
                    compensation paid to individuals, by such dates, in such
                    format, and containing such

    [[Page 110 STAT. 2212]]

                    information as the Secretary of Health and Human
                    Services shall specify in regulations.
                ``(3) Business day defined.--As used in this subsection, the
            term `business day' means a day on which State offices are open
            for regular business.

        ``(h) Other Uses of New Hire Information.--
                ``(1) Location of child support obligors.--The agency
            administering the State plan approved under this part shall use
            information received pursuant to subsection (f)(2) to locate
            individuals for purposes of establishing paternity and
            establishing, modifying, and enforcing child support
            obligations, and may disclose such information to any agent of
            the agency that is under contract with the agency to carry out
            such purposes.
                ``(2) Verification of eligibility for certain programs.--A
            State agency responsible for administering a program specified
            in section 1137(b) shall have access to information reported by
            employers pursuant to subsection (b) of this section for
            purposes of verifying eligibility for the program.
                ``(3) Administration of employment security and
            workers' compensation.--State agencies operating employment
            security and workers' compensation programs shall have access to
            information reported by employers pursuant to subsection (b) for
            the purposes of administering such programs.''.

        (c) Quarterly Wage Reporting.--Section 1137(a)(3) (42 U.S.C. 1320b-
    7(a)(3)) is amended--
                (1) by inserting ``(including State and local governmental
            entities and labor organizations (as defined in section
            453A(a)(2)(B)(iii))'' after ``employers''; and
                (2) by inserting ``, and except that no report shall be
            filed with respect to an employee of a State or local agency
            performing intelligence or counterintelligence functions, if the
            head of such agency has determined that filing such a report
            could endanger the safety of the employee or compromise an
            ongoing investigation or intelligence mission'' after
            ``paragraph (2)''.

        (d) Disclosure to Certain Agents.--Section 303(e) (42 U.S.C. 503(e))
    is amended by adding at the end the following:
        ``(5) A State or local child support enforcement agency may disclose
    to any agent of the agency that is under contract with the agency to
    carry out the purposes described in paragraph (1)(B) wage information
    that is disclosed to an officer or employee of the agency under
    paragraph (1)(A). Any agent of a State or local child support agency
    that receives wage information under this paragraph shall comply with
    the safeguards established pursuant to paragraph (1)(B).''.

    SEC. 314. AMENDMENTS CONCERNING INCOME WITHHOLDING.

        (a) Mandatory Income Withholding.--
                (1) In general.--Section 466(a)(1) (42 U.S.C. 666(a)(1)) is
            amended to read as follows:
                ``(1)(A) Procedures described in subsection (b) for the
            withholding from income of amounts payable as support in cases
            subject to enforcement under the State plan.
                ``(B) Procedures under which the income of a person with a
            support obligation imposed by a support order issued (or
            modified) in the State before October 1, 1996, if not otherwise
            subject to withholding under subsection (b), shall become
            subject to withholding as provided in subsection (b) if
            arrearages

    [[Page 110 STAT. 2213]]

            occur, without the need for a judicial or administrative
            hearing.''.
                (2) Conforming amendments.--
                        (A) Section 466(b) (42 U.S.C. 666(b)) is amended in
                    the matter preceding paragraph (1), by striking
                    ``subsection (a)(1)'' and inserting ``subsection
                    (a)(1)(A)''.
                        (B) Section 466(b)(4) (42 U.S.C. 666(b)(4)) is
                    amended to read as follows:
                ``(4)(A) <<NOTE: Notice.>>  Such withholding must be carried
            out in full compliance with all procedural due process
            requirements of the State, and the State must send notice to
            each noncustodial parent to whom paragraph (1) applies--
                        ``(i) that the withholding has commenced; and
                        ``(ii) of the procedures to follow if the
                    noncustodial parent desires to contest such withholding
                    on the grounds that the withholding or the amount
                    withheld is improper due to a mistake of fact.
                ``(B) The notice under subparagraph (A) of this paragraph
            shall include the information provided to the employer under
            paragraph (6)(A).''.
                        (C) Section 466(b)(5) (42 U.S.C. 666(b)(5)) is
                    amended by striking all that follows ``administered by''
                    and inserting ``the State through the State disbursement
                    unit established pursuant to section 454B, in accordance
                    with the requirements of section 454B.''.
                        (D) Section 466(b)(6)(A) (42 U.S.C. 666(b)(6)(A)) is
                    amended--
                              (i) in clause (i), by striking ``to the
                          appropriate agency'' and all that follows and
                          inserting ``to the State disbursement unit within
                          7 business days after the date the amount would
                          (but for this subsection) have been paid or
                          credited to the employee, for distribution in
                          accordance with this part. The employer shall
                          withhold funds as directed in the notice, except
                          that when an employer receives an income
                          withholding order issued by another State, the
                          employer shall apply the income withholding law of
                          the state of the obligor's principal place of
                          employment in determining--
                        ``(I) the employer's fee for processing an income
                    withholding order;
                        ``(II) the maximum amount permitted to be withheld
                    from the obligor's income;
                        ``(III) the time periods within which the employer
                    must implement the income withholding order and forward
                    the child support payment;
                        ``(IV) the priorities for withholding and allocating
                    income withheld for multiple child support obligees; and
                        ``(V) any withholding terms or conditions not
                    specified in the order.
            An employer who complies with an income withholding notice that
            is regular on its face shall not be subject to civil liability
            to any individual or agency for conduct in compliance with the
            notice.'';
                              (ii) in clause (ii), by inserting ``be in a
                          standard format prescribed by the Secretary, and''
                          after
                          ``shall''; and
                              (iii) by adding at the end the following new
                          clause:

    [[Page 110 STAT. 2214]]

                ``(iii) As used in this subparagraph, the term `business
            day' means a day on which State offices are open for regular
            business.''.
                        (E) Section 466(b)(6)(D) (42 U.S.C. 666(b)(6)(D)) is
                    amended by striking ``any employer'' and all that
                    follows and inserting ``any employer who--
                        ``(i) discharges from employment, refuses to employ,
                    or takes disciplinary action against any noncustodial
                    parent subject to income withholding required by this
                    subsection because of the existence of such withholding
                    and the obligations or additional obligations which it
                    imposes upon the employer; or
                        ``(ii) fails to withhold support from income or to
                    pay such amounts to the State disbursement unit in
                    accordance with this subsection.''.
                        (F) Section 466(b) (42 U.S.C. 666(b)) is amended by
                    adding at the end the following new paragraph:
                ``(11) Procedures under which the agency administering the
            State plan approved under this part may execute a withholding
            order without advance notice to the obligor, including issuing
            the withholding order through electronic means.''.

        (b) Definition of Income.--
                (1) In general.--Section 466(b)(8) (42 U.S.C. 666(b)(8)) is
            amended to read as follows:
                ``(8) For purposes of subsection (a) and this subsection,
            the term `income' means any periodic form of payment due to an
            individual, regardless of source, including wages, salaries,
            commissions, bonuses, worker's compensation, disability,
            payments pursuant to a pension or retirement program, and
            interest.''.
                (2) Conforming amendments.--
                        (A) Subsections (a)(8)(A), (a)(8)(B)(i), (b)(3)(A),
                    (b)(3)(B), (b)(6)(A)(i), and (b)(6)(C), and (b)(7) of
                    section 466 (42 U.S.C. 666(a)(8)(A), (a)(8)(B)(i),
                    (b)(3)(A), (b)(3)(B), (b)(6)(A)(i), and (b)(6)(C), and
                    (b)(7)) are each amended by striking ``wages'' each
                    place such term appears and inserting ``income''.
                        (B) Section 466(b)(1) (42 U.S.C. 666(b)(1)) is
                    amended by striking ``wages (as defined by the State for
                    purposes of this section)'' and inserting ``income''.

        (c) Conforming Amendment.--Section 466(c) (42 U.S.C. 666(c)) is
    repealed.

    SEC. 315. LOCATOR INFORMATION FROM INTERSTATE NETWORKS.

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

    SEC. 316. EXPANSION OF THE FEDERAL PARENT LOCATOR SERVICE.

        (a) Expanded Authority To Locate Individuals and Assets.--Section
    453 (42 U.S.C. 653) is amended--
                (1) in subsection (a), by striking all that follows
            ``subsection (c))'' and inserting ``, for the purpose of
            establishing parentage, establishing, setting the amount of,
            modifying, or enforcing

    [[Page 110 STAT. 2215]]

            child support obligations, or enforcing child custody or
            visitation orders--
                ``(1) information on, or facilitating the discovery of, the
            location of any individual--
                        ``(A) who is under an obligation to pay child
                    support or provide child custody or visitation rights;
                        ``(B) against whom such an obligation is sought;
                        ``(C) to whom such an obligation is owed,
            including the individual's social security number (or numbers),
            most recent address, and the name, address, and employer
            identification number of the individual's employer;
                ``(2) information on the individual's wages (or other
            income) from, and benefits of, employment (including rights to
            or enrollment in group health care coverage); and
                ``(3) information on the type, status, location, and amount
            of any assets of, or debts owed by or to, any such indi-
            vidual.''; and
                (2) in subsection (b)--
                        (A) in the matter preceding paragraph (1), by
                    striking ``social security'' and all that follows
                    through ``absent parent'' and inserting ``information
                    described in subsection (a)''; and
                        (B) in the flush paragraph at the end, by adding the
                    following: ``No information shall be disclosed to any
                    person if the State has notified the Secretary that the
                    State has reasonable evidence of domestic violence or
                    child abuse and the disclosure of such information could
                    be harmful to the custodial parent or the child of such
                    parent. Information received or transmitted pursuant to
                    this section shall be subject to the safeguard
                    provisions contained in section 454(26).''.

        (b) Authorized Person for Information Regarding
    Visitation Rights.--Section 453(c) (42 U.S.C. 653(c)) is amended--
                (1) in paragraph (1), by striking ``support'' and inserting
            ``support or to seek to enforce orders providing child custody
            or visitation rights''; and
                (2) in paragraph (2), by striking ``, or any agent of such
            court; and'' and inserting ``or to issue an order against a
            resident parent for child custody or visitation rights, or any
            agent of such court;''.

        (c) Reimbursement for Information From Federal
    Agencies.--Section 453(e)(2) (42 U.S.C. 653(e)(2)) is amended in the 4th
    sentence by inserting ``in an amount which the Secretary determines to
    be reasonable payment for the information exchange (which amount shall
    not include payment for the costs of obtaining, compiling, or
    maintaining the information)'' before the period.
        (d) Reimbursement for Reports by State Agencies.--Section 453 (42
    U.S.C. 653) is amended by adding at the end the following new
    subsection:
        ``(g) Reimbursement for Reports by State Agencies.--The Secretary
    may reimburse Federal and State agencies for the costs incurred by such
    entities in furnishing information requested by the Secretary under this
    section in an amount which the Secretary determines to be reasonable
    payment for the information exchange (which amount shall not include
    payment for the costs of obtaining, compiling, or maintaining the
    information).''.
        (e) Conforming Amendments.--

    [[Page 110 STAT. 2216]]

                (1) Sections 452(a)(9), 453(a), 453(b), 463(a), 463(e), and
            463(f) (42 U.S.C. 652(a)(9), 653(a), 653(b), 663(a), 663(e), and
            663(f)) are each amended by inserting ``Federal'' before
            ``Parent'' each place such term appears.
                (2) Section 453 (42 U.S.C. 653) is amended in the heading by
            adding ``federal'' before ``parent''.

        (f) New Components.--Section 453 (42 U.S.C. 653), as
    amended by subsection (d) of this section, is amended by adding at the
    end the following new subsections:
        ``(h) <<NOTE: Establishment.>>  Federal Case Registry of Child
    Support Orders.--
                ``(1) In general.--Not later than October 1, 1998, in order
            to assist States in administering programs under State plans
            approved under this part and programs funded under part A, and
            for the other purposes specified in this section, the Secretary
            shall establish and maintain in the Federal Parent Locator
            Service an automated registry (which shall be known as the
            `Federal Case Registry of Child Support Orders'), which shall
            contain abstracts of support orders and other information
            described in paragraph (2) with respect to each case in each
            State case registry maintained pursuant to section 454A(e), as
            furnished (and regularly updated), pursuant to section 454A(f),
            by State agencies administering programs under this part.
                ``(2) Case information.--The information referred to in
            paragraph (1) with respect to a case shall be such information
            as the Secretary may specify in regulations (including the
            names, social security numbers or other uniform identification
            numbers, and State case identification numbers) to identify the
            individuals who owe or are owed support (or with respect to or
            on behalf of whom support obligations are sought to be
            established), and the State or States which have the case.

        ``(i) <<NOTE: Establishment.>>  National Directory of New Hires.--
                ``(1) In general.--In order to assist States in
            administering programs under State plans approved under this
            part and programs funded under part A, and for the other
            purposes specified in this section, the Secretary shall, not
            later than October 1, 1997, establish and maintain in the
            Federal Parent Locator Service an automated directory to be
            known as the National Directory of New Hires, which shall
            contain the information supplied pursuant to section 453A(g)(2).
                ``(2) Entry of data.--Information shall be entered into the
            data base maintained by the National Directory of New Hires
            within 2 business days of receipt pursuant to section
            453A(g)(2).
                ``(3) Administration of federal tax laws.--The Secretary of
            the Treasury shall have access to the information in the
            National Directory of New Hires for purposes of administering
            section 32 of the Internal Revenue Code of 1986, or the advance
            payment of the earned income tax credit under section 3507 of
            such Code, and verifying a claim with respect to employment in a
            tax return.
                ``(4) List of multistate employers.--The Secretary shall
            maintain within the National Directory of New Hires a list of
            multistate employers that report information regarding newly
            hired employees pursuant to section 453A(b)(1)(B), and the State
            which each such employer has designated to receive such
            information.

    [[Page 110 STAT. 2217]]

        ``(j) Information Comparisons and Other Disclosures.--
                ``(1) Verification by social security administration.--
                        ``(A) In general.--The Secretary shall transmit
                    information on individuals and employers maintained
                    under this section to the Social Security Administration
                    to the extent necessary for verification in accordance
                    with subparagraph (B).
                        ``(B) Verification by ssa.--The Social Security
                    Administration shall verify the accuracy of, correct, or
                    supply to the extent possible, and report to the
                    Secretary, the following information supplied by the
                    Secretary pursuant to subparagraph (A):
                              ``(i) The name, social security number, and
                          birth date of each such individual.
                              ``(ii) The employer identification number of
                          each such employer.
                ``(2) Information comparisons.--For the purpose of locating
            individuals in a paternity establishment case or a case
            involving the establishment, modification, or enforcement of a
            support order, the Secretary shall--
                        ``(A) compare information in the National Directory
                    of New Hires against information in the support case
                    abstracts in the Federal Case Registry of Child Support
                    Orders not less often than every 2 business days; and
                        ``(B) <<NOTE: Reports.>>  within 2 business days
                    after such a comparison reveals a match with respect to
                    an individual, report the information to the State
                    agency responsible for the case.
                ``(3) Information comparisons and disclosures of information
            in all registries for title iv program purposes.--To the extent
            and with the frequency that the Secretary determines to be
            effective in assisting States to carry out their
            responsibilities under programs operated under this part and
            programs funded under part A, the Secretary shall--
                        ``(A) <<NOTE: Reports.>>  compare the information in
                    each component of the Federal Parent Locator Service
                    maintained under this section against the information in
                    each other such component (other than the comparison
                    required by paragraph (2)), and report instances in
                    which such a comparison reveals a match with respect to
                    an individual to State agencies operating such programs;
                    and
                        ``(B) disclose information in such registries to
                    such State agencies.
                ``(4) Provision of new hire information to the social
            security administration.--The National Directory of New Hires
            shall provide the Commissioner of Social Security with all
            information in the National Directory.
                ``(5) Research.--The Secretary may provide access to
            information reported by employers pursuant to section 453A(b)
            for research purposes found by the Secretary to be likely to
            contribute to achieving the purposes of part A or this part, but
            without personal identifiers.

        ``(k) Fees.--
                ``(1) For ssa verification.--The Secretary shall reimburse
            the Commissioner of Social Security, at a rate negotiated
            between the Secretary and the Commissioner, for the costs
            incurred by the Commissioner in performing the verification
            services described in subsection (j).

    [[Page 110 STAT. 2218]]

                ``(2) For information from state directories of new hires.--
            The Secretary shall reimburse costs incurred by State
            directories of new hires in furnishing information as required
            by subsection (j)(3), at rates which the Secretary determines to
            be reasonable (which rates shall not include payment for the
            costs of obtaining, compiling, or maintaining such information).
                ``(3) For information furnished to state and federal
            agencies.--A State or Federal agency that receives information
            from the Secretary pursuant to this section shall reimburse the
            Secretary for costs incurred by the Secretary in furnishing the
            information, at rates which the Secretary determines to be
            reasonable (which rates shall include payment for the costs of
            obtaining, verifying, maintaining, and comparing the
            information).

        ``(l) Restriction on Disclosure and Use.--Information in the Federal
    Parent Locator Service, and information resulting from comparisons using
    such information, shall not be used or disclosed except as expressly
    provided in this section, subject to section 6103 of the Internal
    Revenue Code of 1986.
        ``(m) Information Integrity and Security.--The Secretary shall
    establish and implement safeguards with respect to the entities
    established under this section designed to--
                ``(1) ensure the accuracy and completeness of information in
            the Federal Parent Locator Service; and
                ``(2) restrict access to confidential information in the
            Federal Parent Locator Service to authorized persons, and
            restrict use of such information to authorized purposes.

        ``(n) Federal Government Reporting.--Each department, agency, and
    instrumentality of the United States shall on a quarterly basis report
    to the Federal Parent Locator Service the name and social security
    number of each employee and the wages paid to the employee during the
    previous quarter, except that such a report shall not be filed with
    respect to an employee of a department, agency, or instrumentality
    performing intelligence or counterintelligence functions, if the head of
    such department, agency, or instrumentality has determined that filing
    such a report could endanger the safety of the employee or compromise an
    ongoing investigation or intelligence mission.''.
        (g) Conforming Amendments.--
                (1) To part d of title iv of the social security act.--
                        (A) Section 454(8)(B) (42 U.S.C. 654(8)(B)) is
                    amended to read as follows:
                        ``(B) the Federal Parent Locator Service established
                    under section 453;''.
                        (B) Section 454(13) (42 U.S.C.654(13)) is amended by
                    inserting ``and provide that information requests by
                    parents who are residents of other States be treated
                    with the same priority as requests by parents who are
                    residents of the State submitting the plan'' before the
                    semicolon.
                (2) To federal unemployment tax act.--Section 3304(a)(16) of
            the Internal Revenue Code of 1986 is amended--
                        (A) by striking ``Secretary of Health, Education,
                    and Welfare'' each place such term appears and inserting
                    ``Secretary of Health and Human Services'';
                        (B) in subparagraph (B), by striking ``such
                    information'' and all that follows and inserting
                    ``information furnished

    [[Page 110 STAT. 2219]]

                    under subparagraph (A) or (B) is used only for the
                    purposes authorized under such subparagraph;'';
                        (C) by striking ``and'' at the end of subparagraph
                    (A);
                        (D) by redesignating subparagraph (B) as
                    subparagraph (C); and
                        (E) by inserting after subparagraph (A) the
                    following new subparagraph:
                ``(B) <<NOTE: Regulations.>>  wage and unemployment
            compensation information contained in the records of such agency
            shall be furnished to the Secretary of Health and Human Services
            (in accordance with regulations promulgated by such Secretary)
            as necessary for the purposes of the National Directory of New
            Hires established under section 453(i) of the Social Security
            Act, and''.
                (3) To state grant program under title iii of the social
            security act.--Subsection (h) of section 303 (42 U.S.C. 503) is
            amended to read as follows:

        ``(h)(1) The State agency charged with the administration of the
    State law shall, on a reimbursable basis--
                ``(A) disclose quarterly, to the Secretary of Health and
            Human Services, wage and claim information, as required pursuant
            to section 453(i)(1), contained in the records of such agency;
                ``(B) ensure that information provided pursuant to
            subparagraph (A) meets such standards relating to correctness
            and verification as the Secretary of Health and Human Services,
            with the concurrence of the Secretary of Labor, may find
            necessary; and
                ``(C) establish such safeguards as the Secretary of Labor
            determines are necessary to insure that information disclosed
            under subparagraph (A) is used only for purposes of section
            453(i)(1) in carrying out the child support enforcement program
            under title IV.

        ``(2) <<NOTE: Notification.>>  Whenever the Secretary of Labor,
    after reasonable notice and opportunity for hearing to the State agency
    charged with the administration of the State law, finds that there is a
    failure to comply substantially with the requirements of paragraph (1),
    the Secretary of Labor shall notify such State agency that further
    payments will not be made to the State until the Secretary of Labor is
    satisfied that there is no longer any such failure. Until the Secretary
    of Labor is so satisfied, the Secretary shall make no future
    certification to the Secretary of the Treasury with respect to the
    State.

        ``(3) For purposes of this subsection--
                ``(A) the term `wage information' means information
            regarding wages paid to an individual, the social security
            account number of such individual, and the name, address, State,
            and the Federal employer identification number of the employer
            paying such wages to such individual; and
                ``(B) the term `claim information' means information
            regarding whether an individual is receiving, has received, or
            has made application for, unemployment compensation, the amount
            of any such compensation being received (or to be received by
            such individual), and the individual's current (or most recent)
            home address.''.
                (4) Disclosure of certain information to agents of child
            support enforcement agencies.--

    [[Page 110 STAT. 2220]]

                        (A) In general.--Paragraph (6) of section 6103(l) of
                    the Internal Revenue Code of 1986 (relating to
                    disclosure of return information to Federal, State, and
                    local child support enforcement agencies) is amended by
                    redesignating subparagraph (B) as subparagraph (C) and
                    by inserting after subparagraph (A) the following new
                    subparagraph:
                        ``(B) Disclosure to certain agents.--The following
                    information disclosed to any child support enforcement
                    agency under subparagraph (A) with respect to any
                    individual with respect to whom child support
                    obligations are sought to be established or enforced may
                    be disclosed by such agency to any agent of such agency
                    which is under contract with such agency to carry out
                    the purposes described in subparagraph (C):
                              ``(i) The address and social security account
                          number (or numbers) of such individual.
                              ``(ii) The amount of any reduction under
                          section 6402(c) (relating to offset of past-due
                          support against overpayments) in any overpayment
                          otherwise payable to such individual.''.
                        (B) Conforming amendments.--
                              (i) Paragraph (3) of section 6103(a) of such
                          Code is amended by striking ``(l)(12)'' and
                          inserting ``paragraph (6) or (12) of subsection
                          (l)''.
                              (ii) Subparagraph (C) of section 6103(l)(6) of
                          such Code, as redesignated by subsection (a), is
                          amended to read as follows:
                        ``(C) Restriction on disclosure.--Information may be
                    disclosed under this paragraph only for purposes of, and
                    to the extent necessary in, establishing and collecting
                    child support obligations from, and locating,
                    individuals owing such obligations.''.
                              (iii) The material following subparagraph (F)
                          of section 6103(p)(4) of such Code is amended by
                          striking ``subsection (l)(12)(B)'' and inserting
                          ``paragraph (6)(A) or (12)(B) of subsection (l)''.

        (h) <<NOTE: 42 USC 653 note.>>  Requirement for Cooperation.--The
    Secretary of Labor and the Secretary of Health and Human Services shall
    work jointly to develop cost-effective and efficient methods of
    accessing the information in the various State directories of new hires
    and the National Directory of New Hires as established pursuant to the
    amendments made by this subtitle. In developing these methods the
    Secretaries shall take into account the impact, including costs, on the
    States, and shall also consider the need to insure the proper and
    authorized use of wage record information.

    SEC. 317. COLLECTION AND USE OF SOCIAL SECURITY NUMBERS FOR USE IN CHILD
                SUPPORT ENFORCEMENT.

        Section 466(a) (42 U.S.C. 666(a)), as amended by section 315 of this
    Act, is amended by inserting after paragraph (12) the following new
    paragraph:
                ``(13) Recording of social security numbers in certain
            family matters.--Procedures requiring that the social security
            number of--
                        ``(A) any applicant for a professional license,
                    commercial driver's license, occupational license, or
                    marriage license be recorded on the application;

    [[Page 110 STAT. 2221]]

                        ``(B) any individual who is subject to a divorce
                    decree, support order, or paternity determination or
                    acknowledgment be placed in the records relating to the
                    matter; and
                        ``(C) any individual who has died be placed in the
                    records relating to the death and be recorded on the
                    death certificate.
            For purposes of subparagraph (A), if a State allows the use of a
            number other than the social security number, the State shall so
            advise any applicants.''.

              Subtitle C--Streamlining and Uniformity of Procedures

    SEC. 321. ADOPTION OF UNIFORM STATE LAWS.

        Section 466 (42 U.S.C. 666) is amended by adding at the end the
    following new subsection:
        ``(f) Uniform Interstate Family Support Act.--In order to satisfy
    section 454(20)(A), on and after January 1, 1998, each State must have
    in effect the Uniform Interstate Family Support Act, as approved by the
    American Bar Association on February 9, 1993, together with any
    amendments officially adopted before January 1, 1998 by the National
    Conference of Commissioners on Uniform State Laws.''.

    SEC. 322. IMPROVEMENTS TO FULL FAITH AND CREDIT FOR CHILD SUPPORT
                ORDERS.

        Section 1738B of title 28, United States Code, is amended--
                (1) in subsection (a)(2), by striking ``subsection (e)'' and
            inserting ``subsections (e), (f), and (i)'';
                (2) in subsection (b), by inserting after the 2nd
            undesignated paragraph the following:

        `` `child's home State' means the State in which a child lived with
    a parent or a person acting as parent for at least 6 consecutive months
    immediately preceding the time of filing of a petition or comparable
    pleading for support and, if a child is less than 6 months old, the
    State in which the child lived from birth with any of them. A period of
    temporary absence of any of them is counted as part of the 6-month
    period.'';
                (3) in subsection (c), by inserting ``by a court of a
            State'' before ``is made'';
                (4) in subsection (c)(1), by inserting ``and subsections
            (e), (f), and (g)'' after ``located'';
                (5) in subsection (d)--
                        (A) by inserting ``individual'' before
                    ``contestant''; and
                        (B) by striking ``subsection (e)'' and inserting
                    ``subsections (e) and (f)'';
                (6) in subsection (e), by striking ``make a modification of
            a child support order with respect to a child that is made'' and
            inserting ``modify a child support order issued'';
                (7) in subsection (e)(1), by inserting ``pursuant to
            subsection (i)'' before the semicolon;
                (8) in subsection (e)(2)--
                        (A) by inserting ``individual'' before
                    ``contestant'' each place such term appears; and
                        (B) by striking ``to that court's making the
                    modification and assuming'' and inserting ``with the
                    State of continuing,

    [[Page 110 STAT. 2222]]

                    exclusive jurisdiction for a court of another State to
                    modify the order and assume'';
                (9) by redesignating subsections (f) and (g) as subsections
            (g) and (h), respectively;
                (10) by inserting after subsection (e) the following new
            subsection:

        ``(f) <<NOTE: Courts.>>  Recognition of Child Support Orders.--If 1
    or more child support orders have been issued with regard to an obligor
    and a child, a court shall apply the following rules in determining
    which order to recognize for purposes of continuing, exclusive
    jurisdiction and enforcement:
                ``(1) If only 1 court has issued a child support order, the
            order of that court must be recognized.
                ``(2) If 2 or more courts have issued child support orders
            for the same obligor and child, and only 1 of the courts would
            have continuing, exclusive jurisdiction under this section, the
            order of that court must be recognized.
                ``(3) If 2 or more courts have issued child support orders
            for the same obligor and child, and more than 1 of the courts
            would have continuing, exclusive jurisdiction under this
            section, an order issued by a court in the current home State of
            the child must be recognized, but if an order has not been
            issued in the current home State of the child, the order most
            recently issued must be recognized.
                ``(4) If 2 or more courts have issued child support orders
            for the same obligor and child, and none of the courts would
            have continuing, exclusive jurisdiction under this section, a
            court may issue a child support order, which must be recognized.
                ``(5) The court that has issued an order recognized under
            this subsection is the court having continuing, exclusive
            jurisdiction.'';
                (11) in subsection (g) (as so redesignated)--
                        (A) by striking ``Prior'' and inserting
                    ``Modified''; and
                        (B) by striking ``subsection (e)'' and inserting
                    ``subsections (e) and (f)'';
                (12) in subsection (h) (as so redesignated)--
                        (A) in paragraph (2), by inserting ``including the
                    duration of current payments and other obligations of
                    support'' before the comma; and
                        (B) in paragraph (3), by inserting ``arrears under''
                    after ``enforce''; and
                (13) by adding at the end the following new subsection:

        ``(i) Registration for Modification.--If there is no individual
    contestant or child residing in the issuing State, the party or support
    enforcement agency seeking to modify, or to modify and enforce, a child
    support order issued in another State shall register that order in a
    State with jurisdiction over the nonmovant for the purpose of
    modification.''.

    SEC. 323. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.

        Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315 and
    317 of this Act, is amended by inserting after paragraph (13) the
    following new paragraph:
                ``(14) Administrative enforcement in interstate cases.--
            Procedures under which--

    [[Page 110 STAT. 2223]]

                        ``(A)(i) the State shall respond within 5 business
                    days to a request made by another State to enforce a
                    support order; and
                        ``(ii) the term `business day' means a day on which
                    State offices are open for regular business;
                        ``(B) the State may, by electronic or other means,
                    transmit to another State a request for assistance in a
                    case involving the enforcement of a support order, which
                    request--
                              ``(i) shall include such information as will
                          enable the State to which the request is
                          transmitted to compare the information about the
                          case to the information in the data bases of the
                          State; and
                              ``(ii) shall constitute a certification by the
                          re-
                          questing State--
                                        ``(I) of the amount of support under
                                    the order the payment of which is in
                                    arrears; and
                                        ``(II) that the requesting State has
                                    complied with all procedural due process
                                    requirements applicable to the case;
                        ``(C) if the State provides assistance to another
                    State pursuant to this paragraph with respect to a case,
                    neither State shall consider the case to be transferred
                    to the caseload of such other State; and
                        ``(D) <<NOTE: Records.>>  the State shall maintain
                    records of--
                              ``(i) the number of such requests for
                          assistance received by the State;
                              ``(ii) the number of cases for which the State
                          collected support in response to such a request;
                          and
                              ``(iii) the amount of such collected
                          support.''.

    SEC. 324. USE OF FORMS IN INTERSTATE ENFORCEMENT.

        (a) Promulgation.--Section 452(a) (42 U.S.C. 652(a)) is
    amended--
                (1) by striking ``and'' at the end of paragraph (9);
                (2) by striking the period at the end of paragraph (10) (as
            amended by section 346(a) of this Act) and inserting ``; and'';
            and
                (3) by adding at the end the following new paragraph:
                ``(11) not later than October 1, 1996, after consulting with
            the State directors of programs under this part, promulgate
            forms to be used by States in interstate cases for--
                        ``(A) collection of child support through income
                    withholding;
                        ``(B) imposition of liens; and
                        ``(C) administrative subpoenas.''.

        (b) Use by States.--Section 454(9) (42 U.S.C. 654(9)) is
    amended--
                (1) by striking ``and'' at the end of subparagraph (C);
                (2) by inserting ``and'' at the end of subparagraph
            (D); and
                (3) by adding at the end the following new subparagraph:
                        ``(E) not later than March 1, 1997, in using the
                    forms promulgated pursuant to section 452(a)(11) for
                    income withholding, imposition of liens, and issuance of
                    administrative subpoenas in interstate child support
                    cases;''.

    [[Page 110 STAT. 2224]]

    SEC. 325. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

        (a) State Law Requirements.--Section 466 (42 U.S.C. 666), as amended
    by section 314 of this Act, is amended--
                (1) in subsection (a)(2), by striking the first sentence and
            inserting the following: ``Expedited administrative and judicial
            procedures (including the procedures specified in subsection
            (c)) for establishing paternity and for establishing, modifying,
            and enforcing support obligations.''; and
                (2) by inserting after subsection (b) the following new
            subsection:

        ``(c) Expedited Procedures.--The procedures specified in this
    subsection are the following:
                ``(1) Administrative action by state agency.--Procedures
            which give the State agency the authority to take the following
            actions relating to establishment of paternity or to
            establishment, modification, or enforcement of support orders,
            without the necessity of obtaining an order from any other
            judicial or administrative tribunal, and to recognize and
            enforce the authority of State agencies of other States to take
            the following actions:
                        ``(A) Genetic testing.--To order genetic testing for
                    the purpose of paternity establishment as provided in
                    section 466(a)(5).
                        ``(B) Financial or other information.--To subpoena
                    any financial or other information needed to establish,
                    modify, or enforce a support order, and to impose
                    penalties for failure to respond to such a subpoena.
                        ``(C) Response to state agency request.--To require
                    all entities in the State (including for-profit,
                    nonprofit, and governmental employers) to provide
                    promptly, in response to a request by the State agency
                    of that or any other State administering a program under
                    this part, information on the employment, compensation,
                    and benefits of any individual employed by such entity
                    as an employee or contractor, and to sanction failure to
                    respond to any such request.
                        ``(D) Access to information contained in certain
                    records.--To obtain access, subject to safeguards on
                    privacy and information security, and subject to the
                    nonliability of entities that afford such access under
                    this subparagraph, to information contained in the
                    following records (including automated access, in the
                    case of records maintained in automated data bases):
                              ``(i) Records of other State and local
                          government agencies, including--
                                        ``(I) vital statistics (including
                                    records of marriage, birth, and
                                    divorce);
                                        ``(II) State and local tax and
                                    revenue records (including information
                                    on residence address, employer, income
                                    and assets);
                                        ``(III) records concerning real and
                                    titled personal property;
                                        ``(IV) records of occupational and
                                    professional licenses, and records
                                    concerning the ownership and control of
                                    corporations, partnerships, and other
                                    business entities;
                                        ``(V) employment security records;

    [[Page 110 STAT. 2225]]

                                        ``(VI) records of agencies
                                    administering public assistance
                                    programs;
                                        ``(VII) records of the motor vehicle
                                    depart-
                                    ment; and
                                        ``(VIII) corrections records.
                              ``(ii) Certain records held by private
                          entities with respect to individuals who owe or
                          are owed support (or against or with respect to
                          whom a support obligation is sought), consisting
                          of--
                                        ``(I) the names and addresses of
                                    such indi-
                                    viduals and the names and addresses of
                                    the employers of such individuals, as
                                    appearing in customer records of public
                                    utilities and cable television
                                    companies, pursuant to an administrative
                                    subpoena authorized by subparagraph (B);
                                    and
                                        ``(II) information (including
                                    information on assets and liabilities)
                                    on such individuals held by financial
                                    institutions.
                        ``(E) Change in payee.--In cases in which support is
                    subject to an assignment in order to comply with a
                    requirement imposed pursuant to part A or section 1912,
                    or to a requirement to pay through the State
                    disbursement unit established pursuant to section 454B,
                    upon providing notice to obligor and obligee, to direct
                    the obligor or other payor to change the payee to the
                    appropriate government entity.
                        ``(F) Income withholding.--To order income
                    withholding in accordance with subsections (a)(1)(A) and
                    (b) of section 466.
                        ``(G) Securing assets.--In cases in which there is a
                    support arrearage, to secure assets to satisfy the
                    arrearage by--
                              ``(i) intercepting or seizing periodic or
                          lump-sum payments from--
                                        ``(I) a State or local agency,
                                    including unemployment compensation,
                                    workers' compensation, and other
                                    benefits; and
                                        ``(II) judgments, settlements, and
                                    lotteries;
                              ``(ii) attaching and seizing assets of the
                          obligor held in financial institutions;
                              ``(iii) attaching public and private
                          retirement
                          funds; and
                              ``(iv) imposing liens in accordance with
                          subsection (a)(4) and, in appropriate cases, to
                          force sale of property and distribution of
                          proceeds.
                        ``(H) Increase monthly payments.--For the purpose of
                    securing overdue support, to increase the amount of
                    monthly support payments to include amounts for
                    arrearages, subject to such conditions or limitations as
                    the State may provide.
            Such procedures shall be subject to due process safeguards,
            including (as appropriate) requirements for notice, opportunity
            to contest the action, and opportunity for an appeal on the
            record to an independent administrative or judicial tribunal.
                ``(2) Substantive and procedural rules.--The expedited
            procedures required under subsection (a)(2) shall include the
            following rules and authority, applicable with respect to all

    [[Page 110 STAT. 2226]]

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

        (b) Automation of State Agency Functions.--Section 454A, as added by
    section 344(a)(2) and as amended by sections 311 and 312(c) of this Act,
    is amended by adding at the end the following new subsection:
        ``(h) Expedited Administrative Procedures.--The automated system
    required by this section shall be used, to the maximum

    [[Page 110 STAT. 2227]]

    extent feasible, to implement the expedited administrative procedures
    required by section 466(c).''.

                       Subtitle D--Paternity Establishment

    SEC. 331. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT.

        (a) State Laws Required.--Section 466(a)(5) (42 U.S.C. 666(a)(5)) is
    amended to read as follows:
                ``(5) Procedures concerning paternity estab-
            lishment.--
                        ``(A) Establishment process available from birth
                    until age 18.--
                              ``(i) Procedures which permit the
                          establishment of the paternity of a child at any
                          time before the child attains 18 years of age.
                              ``(ii) As of August 16, 1984, clause (i) shall
                          also apply to a child for whom paternity has not
                          been established or for whom a paternity action
                          was brought but dismissed because a statute of
                          limitations of less than 18 years was then in
                          effect in the State.
                        ``(B) Procedures concerning genetic testing.--
                              ``(i) Genetic testing required in certain
                          contested cases.--Procedures under which the State
                          is required, in a contested paternity case (unless
                          otherwise barred by State law) to require the
                          child and all other parties (other than
                          individuals found under section 454(29) to have
                          good cause and other exceptions for refusing to
                          cooperate) to submit to genetic tests upon the
                          request of any such party, if the request is
                          supported by a sworn statement by the party--
                                        ``(I) alleging paternity, and
                                    setting forth facts establishing a
                                    reasonable possibility of the requisite
                                    sexual contact between the parties; or
                                        ``(II) denying paternity, and
                                    setting forth facts establishing a
                                    reasonable possibility of the
                                    nonexistence of sexual contact between
                                    the parties.
                              ``(ii) Other requirements.--Procedures which
                          require the State agency, in any case in which the
                          agency orders genetic testing--
                                        ``(I) to pay costs of such tests,
                                    subject to recoupment (if the State so
                                    elects) from the alleged father if
                                    paternity is established; and
                                        ``(II) to obtain additional testing
                                    in any case if an original test result
                                    is contested, upon request and advance
                                    payment by the contestant.
                        ``(C) Voluntary paternity acknowledgment.--
                              ``(i) Simple civil process.--Procedures for a
                          simple civil process for voluntarily acknowledging
                          paternity under which the State must provide that,
                          before a mother and a putative father can sign an
                          acknowledgment of paternity, the mother and the
                          putative father must be given notice, orally and
                          in writing, of the alternatives to, the legal
                          consequences of, and the rights (including, if 1
                          parent is a minor, any rights afforded due to
                          minority status) and responsibilities that arise
                          from, signing the acknowledgment.

    [[Page 110 STAT. 2228]]

                              ``(ii) Hospital-based program.--Such
                          procedures must include a hospital-based program
                          for the voluntary acknowledgment of paternity
                          focusing on the period immediately before or after
                          the birth of a child.
                              ``(iii) Paternity establishment services.--
                                        ``(I) State-offered services.--Such
                                    procedures must require the State agency
                                    responsible for maintaining birth
                                    records to offer voluntary paternity
                                    establishment services.
                                        ``(II) Regulations.--
                                                ``(aa) Services offered by
                                            hospitals and birth record
                                            agencies.--The Secretary shall
                                            prescribe regulations governing
                                            voluntary paternity
                                            establishment services offered
                                            by hospitals and birth record
                                            agencies.
                                                ``(bb) Services offered by
                                            other
                                            entities.--The Secretary shall
                                            prescribe regulations specifying
                                            the types of other entities that
                                            may offer voluntary paternity
                                            establishment services, and
                                            governing the provision of such
                                            services, which shall include a
                                            requirement that such an entity
                                            must use the same notice
                                            provisions used by, use the same
                                            materials used by, provide the
                                            personnel providing such
                                            services with the same training
                                            provided by, and evaluate the
                                            provision of such services in
                                            the same manner as the provision
                                            of such services is evaluated
                                            by, voluntary paternity
                                            establishment programs of
                                            hospitals and birth record
                                            agencies.
                              ``(iv) Use of paternity acknowledgment
                          affidavit.--Such procedures must require the State
                          to develop and use an affidavit for the voluntary
                          acknowledgment of paternity which includes the
                          minimum requirements of the affidavit specified by
                          the Secretary under section 452(a)(7) for the
                          voluntary acknowledgment of paternity, and to give
                          full faith and credit to such an affidavit signed
                          in any other State according to its procedures.
                        ``(D) Status of signed paternity acknow-
                    ledgment.--
                              ``(i) Inclusion in birth records.--Procedures
                          under which the name of the father shall be
                          included on the record of birth of the child of
                          unmarried parents only if--
                                        ``(I) the father and mother have
                                    signed a voluntary acknowledgment of
                                    paternity; or
                                        ``(II) a court or an administrative
                                    agency of competent jurisdiction has
                                    issued an adjudication of paternity.
                          Nothing in this clause shall preclude a State
                          agency from obtaining an admission of paternity
                          from the father for submission in a judicial or
                          administrative proceeding, or prohibit the
                          issuance of an order in a judicial or
                          administrative proceeding which bases a legal
                          finding of paternity on an admission of paternity

    [[Page 110 STAT. 2229]]

                          by the father and any other additional showing
                          required by State law.
                              ``(ii) Legal finding of paternity.--Procedures
                          under which a signed voluntary acknowledgment of
                          paternity is considered a legal finding of
                          paternity, subject to the right of any signatory
                          to rescind the acknowledgment within the earlier
                          of--
                                        ``(I) 60 days; or
                                        ``(II) the date of an administrative
                                    or judicial proceeding relating to the
                                    child (including a proceeding to
                                    establish a support order) in which the
                                    signatory is a party.
                              ``(iii) Contest.--Procedures under which,
                          after the 60-day period referred to in clause
                          (ii), a signed voluntary acknowledgment of
                          paternity may be challenged in court only on the
                          basis of fraud, duress, or material mistake of
                          fact, with the burden of proof upon the
                          challenger, and under which the legal
                          responsibilities (including child support
                          obligations) of any signatory arising from the
                          acknowledgment may not be suspended during the
                          challenge, except for good cause shown.
                        ``(E) Bar on acknowledgment ratification pro-
                    ceedings.--Procedures under which judicial or
                    administrative proceedings are not required or permitted
                    to ratify an unchallenged acknowledgment of paternity.
                        ``(F) Admissibility of genetic testing results.--
                    Procedures--
                              ``(i) requiring the admission into evidence,
                          for purposes of establishing paternity, of the
                          results of any genetic test that is--
                                        ``(I) of a type generally
                                    acknowledged as reliable by
                                    accreditation bodies designated by the
                                    Secretary; and
                                        ``(II) performed by a laboratory
                                    approved by such an accreditation body;
                              ``(ii) requiring an objection to genetic
                          testing results to be made in writing not later
                          than a specified number of days before any hearing
                          at which the results may be introduced into
                          evidence (or, at State option, not later than a
                          specified number of days after receipt of the
                          results); and
                              ``(iii) making the test results admissible as
                          evidence of paternity without the need for
                          foundation testimony or other proof of
                          authenticity or accuracy, unless objection is
                          made.
                        ``(G) Presumption of paternity in certain cases.--
                    Procedures which create a rebuttable or, at the option
                    of the State, conclusive presumption of paternity upon
                    genetic testing results indicating a threshold
                    probability that the alleged father is the father of the
                    child.
                        ``(H) Default orders.--Procedures requiring a
                    default order to be entered in a paternity case upon a
                    showing of service of process on the defendant and any
                    additional showing required by State law.

    [[Page 110 STAT. 2230]]

                        ``(I) No right to jury trial.--Procedures providing
                    that the parties to an action to establish paternity are
                    not entitled to a trial by jury.
                        ``(J) Temporary support order based on probable
                    paternity in contested cases.--Procedures which require
                    that a temporary order be issued, upon motion by a
                    party, requiring the provision of child support pending
                    an administrative or judicial determination of
                    parentage, if there is clear and convincing evidence of
                    paternity (on the basis of genetic tests or other
                    evidence).
                        ``(K) Proof of certain support and paternity
                    establishment costs.--Procedures under which bills for
                    pregnancy, childbirth, and genetic testing are
                    admissible as evidence without requiring third-party
                    foundation testimony, and shall constitute prima facie
                    evidence of amounts incurred for such services or for
                    testing on behalf of the child.
                        ``(L) Standing of putative fathers.--Procedures
                    ensuring that the putative father has a reasonable
                    opportunity to initiate a paternity action.
                        ``(M) Filing of acknowledgments and adjudications in
                    state registry of birth records.--Procedures under which
                    voluntary acknowledgments and adjudications of paternity
                    by judicial or administrative processes are filed with
                    the State registry of birth records for comparison with
                    information in the State case registry.''.

        (b) National Paternity Acknowledgment Affidavit.--Section 452(a)(7)
    (42 U.S.C. 652(a)(7)) is amended by inserting ``, and specify the
    minimum requirements of an affidavit to be used for the voluntary
    acknowledgment of paternity which shall include the Social Security
    number of each parent and, after consultation with the States, other
    common elements as determined by such designee'' before the semicolon.
        (c) Conforming Amendment.--Section 468 (42 U.S.C. 668) is amended by
    striking ``a simple civil process for voluntarily acknowledging
    paternity and''.

    SEC. 332. OUTREACH FOR VOLUNTARY PATERNITY ESTABLISHMENT.

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

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

        Section 454 (42 U.S.C. 654), as amended by sections 301(b), 303(a),
    312(a), and 313(a) of this Act, is amended--
                (1) by striking ``and'' at the end of paragraph (27);
                (2) by striking the period at the end of paragraph (28) and
            inserting ``; and''; and
                (3) by inserting after paragraph (28) the following new
            paragraph:
                ``(29) provide that the State agency responsible for
            administering the State plan--
                        ``(A) shall make the determination (and
                    redetermination at appropriate intervals) as to whether
                    an individual who has applied for or is receiving
                    assistance under the State program funded under part A
                    of this title or the

    [[Page 110 STAT. 2231]]

                    State program under title XIX is cooperating in good
                    faith with the State in establishing the paternity of,
                    or in establishing, modifying, or enforcing a support
                    order for, any child of the individual by providing the
                    State agency with the name of, and such other
                    information as the State agency may require with respect
                    to, the noncustodial parent of the child, subject to
                    good cause and other exceptions which--
                              ``(i) shall be defined, taking into account
                          the best interests of the child, and
                              ``(ii) shall be applied in each case,
                    by, at the option of the State, the State agency
                    administering the State program under part A, this part,
                    or title XIX;
                        ``(B) shall require the individual to supply
                    additional necessary information and appear at
                    interviews, hearings, and legal proceedings;
                        ``(C) shall require the individual and the child to
                    submit to genetic tests pursuant to judicial or
                    administrative order;
                        ``(D) may request that the individual sign a
                    voluntary acknowledgment of paternity, after notice of
                    the rights and consequences of such an acknowledgment,
                    but may not require the individual to sign an
                    acknowledgment or otherwise relinquish the right to
                    genetic tests as a condition of cooperation and
                    eligibility for assistance under the State program
                    funded under part A, or the State program under title
                    XIX; and
                        ``(E) <<NOTE: Notification.>>  shall promptly notify
                    the individual, the State agency administering the State
                    program funded under part A, and the State agency
                    administering the State program under title XIX, of each
                    such determination, and if noncooperation is determined,
                    the basis therefor.''.

                 Subtitle E--Program Administration and Funding

    SEC. 341. PERFORMANCE-BASED INCENTIVES AND PENALTIES.

        (a) <<NOTE: 42 USC 658 note.>>  Development of New System.--The
    Secretary of Health and Human Services, in consultation with State
    directors of programs under part D of title IV of the Social Security
    Act, shall develop a new incentive system to replace, in a revenue
    neutral manner, the system under section 458 of such Act. The new system
    shall provide additional payments to any State based on such State's
    performance under such a program. <<NOTE: Reports.>>  Not later than
    March 1, 1997, the Secretary shall report on the new system to the
    Committee on Ways and Means of the House of Representatives and the
    Committee on Finance of the Senate.

        (b) Conforming Amendments to Present System.--Section 458 (42 U.S.C.
    658) is amended--
                (1) in subsection (a), by striking ``aid to families with
            dependent children under a State plan approved under part A of
            this title'' and inserting ``assistance under a program funded
            under part A'';
                (2) in subsection (b)(1)(A), by striking ``section
            402(a)(26)'' and inserting ``section 408(a)(4)'';
                (3) in subsections (b) and (c)--

    [[Page 110 STAT. 2232]]

                        (A) by striking ``AFDC collections'' each place it
                    appears and inserting ``title IV-A collections'', and
                        (B) by striking ``non-AFDC collections'' each place
                    it appears and inserting ``non-title IV-A collections'';
                    and
                (4) in subsection (c), by striking ``combined AFDC/non-AFDC
            administrative costs'' both places it appears and inserting
            ``combined title IV-A/non-title IV-A administrative costs''.

        (c) Calculation of Paternity Establishment Percentage.--
                (1) Section 452(g)(1)(A) (42 U.S.C. 652(g)(1)(A)) is amended
            by striking ``75'' and inserting ``90''.
                (2) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is amended--
                        (A) by redesignating subparagraphs (B) through (E)
                    as subparagraphs (C) through (F), respectively, and by
                    inserting after subparagraph (A) the following new
                    subparagraph:
                ``(B) for a State with a paternity establishment percentage
            of not less than 75 percent but less than 90 percent for such
            fiscal year, the paternity establishment percentage of the State
            for the immediately preceding fiscal year plus 2 percentage
            points;''; and
                        (B) by adding at the end the following new flush
                    sentence:

    ``In determining compliance under this section, a State may use as its
    paternity establishment percentage either the State's IV-D paternity
    establishment percentage (as defined in paragraph (2)(A)) or the State's
    statewide paternity establishment percentage (as defined in paragraph
    (2)(B)).''.
                (3) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is amended--
                        (A) in subparagraph (A)--
                              (i) in the matter preceding clause (i)--
                                        (I) by striking ``paternity
                                    establishment percentage'' and inserting
                                    ``IV-D paternity establishment
                                    percentage''; and
                                        (II) by striking ``(or all States,
                                    as the case may be)''; and
                              (ii) by striking ``and'' at the end; and
                        (B) by redesignating subparagraph (B) as
                    subparagraph (C) and by inserting after subparagraph (A)
                    the following new subparagraph:
                ``(B) the term `statewide paternity establishment
            percentage' means, with respect to a State for a fiscal year,
            the ratio (expressed as a percentage) that the total number of
            minor children--
                        ``(i) who have been born out of wedlock, and
                        ``(ii) the paternity of whom has been established or
                    acknowledged during the fiscal year,
            bears to the total number of children born out of wedlock during
            the preceding fiscal year; and''.
                (4) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is amended--
                        (A) by striking subparagraph (A) and redesignating
                    subparagraphs (B) and (C) as subparagraphs (A) and (B),
                    respectively; and
                        (B) in subparagraph (A) (as so redesignated), by
                    striking ``the percentage of children born out-of-
                    wedlock in a State'' and inserting ``the percentage of
                    children in a State who are born out of wedlock or for
                    whom support has not been established''.

    [[Page 110 STAT. 2233]]

        (d) Effective Dates.--
                (1) <<NOTE: 42 USC 658 note.>>  Incentive adjustments.--
                        (A) In general.--The system developed under
                    subsection (a) and the amendments made by subsection (b)
                    shall become effective on October 1, 1999, except to the
                    extent provided in subparagraph (B).
                        (B) Application of section 458.--Section 458 of the
                    Social Security Act, as in effect on the day before the
                    date of the enactment of this section, shall be
                    effective for purposes of incentive payments to States
                    for fiscal years before fiscal year 2000.
                (2) <<NOTE: 42 USC 652 note.>>  Penalty reductions.--The
            amendments made by subsection (c) shall become effective with
            respect to calendar quarters beginning on or after the date of
            the enactment of
            this Act.

    SEC. 342. FEDERAL AND STATE REVIEWS AND AUDITS.

        (a) State Agency Activities.--Section 454 (42 U.S.C. 654) is
    amended--
                (1) in paragraph (14), by striking ``(14)'' and inserting
            ``(14)(A)'';
                (2) by redesignating paragraph (15) as subparagraph (B) of
            paragraph (14); and
                (3) by inserting after paragraph (14) the following new
            paragraph:
                ``(15) provide for--
                        ``(A) a process for annual reviews of and reports to
                    the Secretary on the State program operated under the
                    State plan approved under this part, including such
                    information as may be necessary to measure State
                    compliance with Federal requirements for expedited
                    procedures, using such standards and procedures as are
                    required by the Secretary, under which the State agency
                    will determine the extent to which the program is
                    operated in compliance with this part; and
                        ``(B) a process of extracting from the automated
                    data processing system required by paragraph (16) and
                    transmitting to the Secretary data and calculations
                    concerning the levels of accomplishment (and rates of
                    improvement) with respect to applicable performance
                    indicators (including paternity establishment
                    percentages) to the extent necessary for purposes of
                    sections 452(g) and 458;''.

        (b) Federal Activities.--Section 452(a)(4) (42 U.S.C. 652(a)(4)) is
    amended to read as follows:
                ``(4)(A) review data and calculations transmitted by State
            agencies pursuant to section 454(15)(B) on State program
            accomplishments with respect to performance indicators for
            purposes of subsection (g) of this section and section 458;
                ``(B) review annual reports submitted pursuant to section
            454(15)(A) and, as appropriate, provide to the State comments,
            recommendations for additional or alternative corrective
            actions, and technical assistance; and
                ``(C) conduct audits, in accordance with the Government
            auditing standards of the Comptroller General of the United
            States--

    [[Page 110 STAT. 2234]]

                        ``(i) at least once every 3 years (or more
                    frequently, in the case of a State which fails to meet
                    the requirements of this part concerning performance
                    standards and reliability of program data) to assess the
                    completeness, reliability, and security of the data and
                    the accuracy of the reporting systems used in
                    calculating performance indicators under subsection (g)
                    of this section and section 458;
                        ``(ii) of the adequacy of financial management of
                    the State program operated under the State plan approved
                    under this part, including assessments of--
                              ``(I) whether Federal and other funds made
                          available to carry out the State program are being
                          appropriately expended, and are properly and fully
                          accounted for; and
                              ``(II) whether collections and disbursements
                          of support payments are carried out correctly and
                          are fully accounted for; and
                        ``(iii) for such other purposes as the Secretary may
                    find necessary;''.

        (c) Effective Date <<NOTE: 42 USC 652 note.>> .--The amendments made
    by this section shall be effective with respect to calendar quarters
    beginning 12 months or more after the date of the enactment of this Act.

    SEC. 343. REQUIRED REPORTING PROCEDURES.

        (a) Establishment.--Section 452(a)(5) (42 U.S.C. 652(a)(5)) is
    amended by inserting ``, and establish procedures to be followed by
    States for collecting and reporting information required to be provided
    under this part, and establish uniform definitions (including those
    necessary to enable the measurement of State compliance with the
    requirements of this part relating to expedited processes) to be applied
    in following such procedures'' before the semicolon.
        (b) State Plan Requirement.--Section 454 (42 U.S.C. 654), as amended
    by sections 301(b), 303(a), 312(a), 313(a), and 333 of this Act, is
    amended--
                (1) by striking ``and'' at the end of paragraph (28);
                (2) by striking the period at the end of paragraph (29) and
            inserting ``; and''; and
                (3) by adding after paragraph (29) the following new
            paragraph:
                ``(30) provide that the State shall use the definitions
            established under section 452(a)(5) in collecting and reporting
            information as required under this part.''.

    SEC. 344. AUTOMATED DATA PROCESSING REQUIREMENTS.

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

    [[Page 110 STAT. 2235]]

                (2) Automated data processing.--Part D of title IV (42
            U.S.C. 651-669) is amended by inserting after section 454 the
            following new section:

    ``SEC. 454A. <<NOTE: 42 USC 654a.>>  AUTOMATED DATA PROCESSING.

        ``(a) In General.--In order for a State to meet the requirements of
    this section, the State agency administering the State program under
    this part shall have in operation a single statewide automated data
    processing and information retrieval system which has the capability to
    perform the tasks specified in this section with the frequency and in
    the manner required by or under this part.
        ``(b) Program Management.--The automated system required by this
    section shall perform such functions as the Secretary may specify
    relating to management of the State program under this part, including--
                ``(1) controlling and accounting for use of Federal, State,
            and local funds in carrying out the program; and
                ``(2) maintaining the data necessary to meet Federal
            reporting requirements under this part on a timely basis.

        ``(c) Calculation of Performance Indicators.--In order to enable the
    Secretary to determine the incentive payments and penalty adjustments
    required by sections 452(g) and 458, the State agency shall--
                ``(1) use the automated system--
                        ``(A) to maintain the requisite data on State
                    performance with respect to paternity establishment and
                    child support enforcement in the State; and
                        ``(B) to calculate the paternity establishment
                    percentage for the State for each fiscal year; and
                ``(2) have in place systems controls to ensure the com-
            pleteness and reliability of, and ready access to, the data
            described in paragraph (1)(A), and the accuracy of the
            calculations described in paragraph (1)(B).

        ``(d) Information Integrity and Security.--The State agency shall
    have in effect safeguards on the integrity, accuracy, and completeness
    of, access to, and use of data in the automated system required by this
    section, which shall include the following (in addition to such other
    safeguards as the Secretary may specify in regulations):
                ``(1) Policies restricting access.--Written policies
            concerning access to data by State agency personnel, and sharing
            of data with other persons, which--
                        ``(A) permit access to and use of data only to the
                    extent necessary to carry out the State program under
                    this part; and
                        ``(B) specify the data which may be used for
                    particular program purposes, and the personnel permitted
                    access to such data.
                ``(2) Systems controls.--Systems controls (such as passwords
            or blocking of fields) to ensure strict adherence to the
            policies described in paragraph (1).
                ``(3) Monitoring of access.--Routine monitoring of access to
            and use of the automated system, through methods such as audit
            trails and feedback mechanisms, to guard against and promptly
            identify unauthorized access or use.
                ``(4) Training and information.--Procedures to ensure that
            all personnel (including State and local agency staff and

    [[Page 110 STAT. 2236]]

            contractors) who may have access to or be required to use
            confidential program data are informed of applicable
            requirements and penalties (including those in section 6103 of
            the Internal Revenue Code of 1986), and are adequately trained
            in security procedures.
                ``(5) Penalties.--Administrative penalties (up to and
            including dismissal from employment) for unauthorized access to,
            or disclosure or use of, confidential data.''.
                (3) <<NOTE: 42 USC 654a note.>>  Regulations.--The Secretary
            of Health and Human Services shall prescribe final regulations
            for implementation of section 454A of the Social Security Act
            not later than 2 years after the date of the enactment of this
            Act.
                (4) Implementation timetable.--Section 454(24) (42 U.S.C.
            654(24)), as amended by section 303(a)(1) of this Act, is
            amended to read as follows:
                ``(24) provide that the State will have in effect an
            automated data processing and information retrieval system--
                        ``(A) by October 1, 1997, which meets all require-
                    ments of this part which were enacted on or before the
                    date of enactment of the Family Support Act of 1988, and
                        ``(B) by October 1, 2000, which meets all require-
                    ments of this part enacted on or before the date of the
                    enactment of the Personal Responsibility and Work
                    Opportunity Act of 1996, except that such deadline shall
                    be extended by 1 day for each day (if any) by which the
                    Secretary fails to meet the deadline imposed by section
                    344(a)(3) of the Personal Responsibility and Work
                    Opportunity Reconciliation Act of 1996;''.

        (b) Special Federal Matching Rate for Development Costs of Automated
    Systems.--
                (1) In general.--Section 455(a) (42 U.S.C. 655(a)) is
            amended--
                        (A) in paragraph (1)(B)--
                              (i) by striking ``90 percent'' and inserting
                          ``the percent specified in paragraph (3)'';
                              (ii) by striking ``so much of''; and
                              (iii) by striking ``which the Secretary'' and
                          all that follows and inserting ``, and''; and
                        (B) by adding at the end the following new
                    paragraph:

        ``(3)(A) The Secretary shall pay to each State, for each quarter in
    fiscal years 1996 and 1997, 90 percent of so much of the State
    expenditures described in paragraph (1)(B) as the Secretary finds are
    for a system meeting the requirements specified in section 454(16) (as
    in effect on September 30, 1995) but limited to the amount approved for
    States in the advance planning documents of such States submitted on or
    before September 30, 1995.
        ``(B)(i) The Secretary shall pay to each State, for each quarter in
    fiscal years 1996 through 2001, the percentage specified in clause (ii)
    of so much of the State expenditures described in paragraph (1)(B) as
    the Secretary finds are for a system meeting the requirements of
    sections 454(16) and 454A.
        ``(ii) The percentage specified in this clause is 80 percent.''.
                (2) <<NOTE: 42 USC 655 note.>>  Temporary limitation on
            payments under special federal matching rate.--
                        (A) In general.--The Secretary of Health and Human
                    Services may not pay more than $400,000,000 in the aggre

    [[Page 110 STAT. 2237]]

                    gate under section 455(a)(3)(B) of the Social Security
                    Act for fiscal years 1996 through 2001.
                        (B) Allocation of limitation among states.--The
                    total amount payable to a State under section
                    455(a)(3)(B) of such Act for fiscal years 1996 through
                    2001 shall not exceed the limitation determined for the
                    State by the Secretary of Health and Human Services in
                    regulations.
                        (C) Allocation formula.--The regulations referred to
                    in subparagraph (B) shall prescribe a formula for
                    allocating the amount specified in subparagraph (A)
                    among States with plans approved under part D of title
                    IV of the Social Security Act, which shall take into
                    account--
                              (i) the relative size of State caseloads under
                          such part; and
                              (ii) the level of automation needed to meet
                          the automated data processing requirements of such
                          part.

        (c) Conforming Amendment.--Section 123(c) of the Family Support Act
    of 1988 (102 Stat. 2352; Public Law 100-485) <<NOTE: 42 USC 655, 655
    note.>>  is repealed.

    SEC. 345. TECHNICAL ASSISTANCE.

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

    The amount appropriated under this subsection shall remain available
    until expended.''.
        (b) Operation of Federal Parent Locator Service.--Section 453 (42
    U.S.C. 653), as amended by section 316 of this Act, is amended by adding
    at the end the following new subsection:
        ``(o) Recovery of Costs.--Out of any money in the Treasury of the
    United States not otherwise appropriated, there is hereby appropriated
    to the Secretary for each fiscal year an amount equal to 2 percent of
    the total amount paid to the Federal Government pursuant to section
    457(a) during the immediately preceding fiscal year (as determined on
    the basis of the most recent reliable data available to the Secretary as
    of the end of the third calendar quarter following the end of such
    preceding fiscal year), to cover costs incurred by the Secretary for
    operation of the Federal Parent

    [[Page 110 STAT. 2238]]

    Locator Service under this section, to the extent such costs are not
    recovered through user fees.''.

    SEC. 346. REPORTS AND DATA COLLECTION BY THE SECRETARY.

        (a) Annual Report to Congress.--
                (1) Section 452(a)(10)(A) (42 U.S.C. 652(a)(10)(A)) is
            amended--
                        (A) by striking ``this part;'' and inserting ``this
                    part, including--''; and
                        (B) by adding at the end the following new clauses:
                              ``(i) the total amount of child support
                          payments collected as a result of services
                          furnished during the fiscal year to individuals
                          receiving services under this part;
                              ``(ii) the cost to the States and to the
                          Federal Government of so furnishing the services;
                          and
                              ``(iii) the number of cases involving
                          families--
                                        ``(I) who became ineligible for
                                    assistance under State programs funded
                                    under part A during a month in the
                                    fiscal year; and
                                        ``(II) with respect to whom a child
                                    support payment was received in the
                                    month;''.
                (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C)) is
            amended--
                        (A) in the matter preceding clause (i)--
                              (i) by striking ``with the data required under
                          each clause being separately stated for cases''
                          and inserting ``separately stated for cases'';
                              (ii) by striking ``cases where the child was
                          formerly receiving'' and inserting ``or formerly
                          received'';
                              (iii) by inserting ``or 1912'' after
                          ``471(a)(17)''; and
                              (iv) by inserting ``for'' before ``all
                          other'';
                        (B) in each of clauses (i) and (ii), by striking ``,
                    and the total amount of such obligations'';
                        (C) in clause (iii), by striking ``described in''
                    and all that follows and inserting ``in which support
                    was collected during the fiscal year;'';
                        (D) by striking clause (iv); and
                        (E) by redesignating clause (v) as clause (vii), and
                    inserting after clause (iii) the following new clauses:
                              ``(iv) the total amount of support collected
                          during such fiscal year and distributed as current
                          support;
                              ``(v) the total amount of support collected
                          during such fiscal year and distributed as
                          arrearages;
                              ``(vi) the total amount of support due and
                          unpaid for all fiscal years; and''.
                (3) Section 452(a)(10)(G) (42 U.S.C. 652(a)(10)(G)) is
            amended by striking ``on the use of Federal courts and''.
                (4) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended--
                        (A) in subparagraph (H), by striking ``and'';
                        (B) in subparagraph (I), by striking the period and
                    inserting ``; and''; and
                        (C) by inserting after subparagraph (I) the
                    following new subparagraph:
                        ``(J) compliance, by State, with the standards
                    established pursuant to subsections (h) and (i).''.

    [[Page 110 STAT. 2239]]

                (5) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is amended by
            striking all that follows subparagraph (J), as added by
            paragraph (4).

        (b) Effective Date.--The amendments made by subsection (a) shall be
    effective with respect to fiscal year 1997 and succeeding fiscal years.

          Subtitle F--Establishment and Modification of Support Orders

    SEC. 351. SIMPLIFIED PROCESS FOR REVIEW AND ADJUSTMENT OF CHILD SUPPORT
                ORDERS.

        Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amended to read as
    follows:
                ``(10) Review and adjustment of support orders upon
            request.--
                        ``(A) 3-year cycle.--
                              ``(i) In general.--Procedures under which
                          every 3 years (or such shorter cycle as the State
                          may determine), upon the request of either parent,
                          or, if there is an assignment under part A, upon
                          the request of the State agency under the State
                          plan or of either parent, the State shall with
                          respect to a support order being enforced under
                          this part, taking into account the best interests
                          of the child involved--
                                        ``(I) review and, if appropriate,
                                    adjust the order in accordance with the
                                    guidelines established pursuant to
                                    section 467(a) if the amount of the
                                    child support award under the order
                                    differs from the amount that would be
                                    awarded in accordance with the
                                    guidelines;
                                        ``(II) apply a cost-of-living
                                    adjustment to the order in accordance
                                    with a formula developed by the State;
                                    or
                                        ``(III) use automated methods
                                    (including automated comparisons with
                                    wage or State income tax data) to
                                    identify orders eligible for review,
                                    conduct the review, identify orders
                                    eligible for adjustment, and apply the
                                    appropriate adjustment to the orders
                                    eligible for adjustment under any
                                    threshold that may be established by the
                                    State.
                              ``(ii) Opportunity to request review of
                          adjustment.--If the State elects to conduct the
                          review under subclause (II) or (III) of clause
                          (i), procedures which permit either party to
                          contest the adjustment, within 30 days after the
                          date of the notice of the adjustment, by making a
                          request for review and, if appropriate, adjustment
                          of the order in accordance with the child support
                          guidelines established pursuant to section 467(a).
                              ``(iii) No proof of change in circumstances
                          necessary in 3-year cycle review.--Procedures
                          which provide that any adjustment under clause (i)
                          shall be made without a requirement for proof or
                          showing of a change in circumstances.

    [[Page 110 STAT. 2240]]

                        ``(B) Proof of substantial change in circumstances
                    necessary in request for review outside 3-year cycle.--
                    Procedures under which, in the case of a request for a
                    review, and if appropriate, an adjustment outside the 3-
                    year cycle (or such shorter cycle as the State may
                    determine) under clause (i), the State shall review and,
                    if the requesting party demonstrates a substantial
                    change in circumstances, adjust the order in accordance
                    with the guidelines established pursuant to section
                    467(a).
                        ``(C) Notice of right to review.--Procedures which
                    require the State to provide notice not less than once
                    every 3 years to the parents subject to the order
                    informing the parents of their right to request the
                    State to review and, if appropriate, adjust the order
                    pursuant to this paragraph. The notice may be included
                    in the order.''.

    SEC. 352. FURNISHING CONSUMER REPORTS FOR CERTAIN PURPOSES RELATING TO
                CHILD SUPPORT.

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

        ``(5) To an agency administering a State plan under section 454 of
    the Social Security Act (42 U.S.C. 654) for use to set an initial or
    modified child support award.''.

    SEC. 353. NONLIABILITY FOR FINANCIAL INSTITUTIONS PROVIDING FINANCIAL
                RECORDS TO STATE CHILD SUPPORT ENFORCEMENT AGENCIES IN CHILD
                SUPPORT CASES.

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

    ``SEC. 469A. <<NOTE: 44 USC 649s.>>  NONLIABILITY FOR FINANCIAL
                INSTITUTIONS PROVIDING FINANCIAL RECORDS TO STATE CHILD
                SUPPORT ENFORCEMENT AGENCIES IN CHILD SUPPORT CASES.

        ``(a) In General.--Notwithstanding any other provision of
    Federal or State law, a financial institution shall not be liable under
    any Federal or State law to any person for disclosing any financial
    record of an individual to a State child support enforce

    [[Page 110 STAT. 2241]]

    ment agency attempting to establish, modify, or enforce a child support
    obligation of such individual.
        ``(b) Prohibition of Disclosure of Financial Record Obtained by
    State Child Support Enforcement Agency.--A State child support
    enforcement agency which obtains a financial record of an individual
    from a financial institution pursuant to subsection (a) may disclose
    such financial record only for the purpose of, and to the extent
    necessary in, establishing, modifying, or enforcing a child support
    obligation of such individual.
        ``(c) Civil Damages for Unauthorized Disclosure.--
                ``(1) Disclosure by state officer or employee.--If any
            person knowingly, or by reason of negligence, discloses a
            financial record of an individual in violation of subsection
            (b), such individual may bring a civil action for damages
            against such person in a district court of the United States.
                ``(2) No liability for good faith but erroneous
            interpretation.--No liability shall arise under this subsection
            with respect to any disclosure which results from a good faith,
            but erroneous, interpretation of subsection (b).
                ``(3) Damages.--In any action brought under paragraph (1),
            upon a finding of liability on the part of the defendant, the
            defendant shall be liable to the plaintiff in an amount equal to
            the sum of--
                        ``(A) the greater of--
                              ``(i) $1,000 for each act of unauthorized
                          disclosure of a financial record with respect to
                          which such defendant is found liable; or
                              ``(ii) the sum of--
                                        ``(I) the actual damages sustained
                                    by the
                                    plaintiff as a result of such
                                    unauthorized disclosure; plus
                                        ``(II) in the case of a willful
                                    disclosure or a disclosure which is the
                                    result of gross negligence, punitive
                                    damages; plus
                        ``(B) the costs (including attorney's fees) of the
                    action.

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

    [[Page 110 STAT. 2242]]

                    Subtitle G--Enforcement of Support Orders

    SEC. 361. INTERNAL REVENUE SERVICE COLLECTION OF ARREARAGES.

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

        (b) Effective Date <<NOTE: 26 USC 6305 note.>> .--The amendments
    made by this section shall become effective October 1, 1997.

    SEC. 362. AUTHORITY TO COLLECT SUPPORT FROM FEDERAL
                EMPLOYEES.

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

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

        ``(a) Consent to Support Enforcement.--Notwithstanding any other
    provision of law (including section 207 of this Act and section 5301 of
    title 38, United States Code), effective January 1, 1975, moneys (the
    entitlement to which is based upon remuneration for employment) due
    from, or payable by, the United States or the District of Columbia
    (including any agency, subdivision, or instrumentality thereof) to any
    individual, including members of the Armed Forces of the United States,
    shall be subject, in like manner and to the same extent as if the United
    States or the District of Columbia were a private person, to withholding
    in accordance with State law enacted pursuant to subsections (a)(1) and
    (b) of section 466 and regulations of the Secretary under such
    subsections, and to any other legal process brought, by a State agency
    administering a program under a State plan approved under this part or
    by an individual obligee, to enforce the legal obligation of the
    individual to provide child support or alimony.
        ``(b) Consent to Requirements Applicable to Private Person.--With
    respect to notice to withhold income pursuant to subsection (a)(1) or
    (b) of section 466, or any other order or process to enforce support
    obligations against an individual (if the order or process contains or
    is accompanied by sufficient data to permit prompt identification of the
    individual and the moneys involved), each governmental entity specified
    in subsection (a) shall be subject to the same requirements as would
    apply if the entity were a private person, except as otherwise provided
    in this section.

    [[Page 110 STAT. 2243]]

        ``(c) Designation of Agent; Response to Notice or
    Process--
                ``(1) Designation of agent.--The head of each agency subject
            to this section shall--
                        ``(A) designate an agent or agents to receive orders
                    and accept service of process in matters relating to
                    child support or alimony; and
                        ``(B) <<NOTE: Federal Register, publication.>>
                    annually publish in the Federal Register the designation
                    of the agent or agents, identified by title or position,
                    mailing address, and telephone number.
                ``(2) Response to notice or process.--If an agent designated
            pursuant to paragraph (1) of this subsection receives notice
            pursuant to State procedures in effect pursuant to subsection
            (a)(1) or (b) of section 466, or is effectively served with any
            order, process, or interrogatory, with respect to an
            individual's child support or alimony payment obligations, the
            agent shall--
                        ``(A) as soon as possible (but not later than 15
                    days) thereafter, send written notice of the notice or
                    service (together with a copy of the notice or service)
                    to the individual at the duty station or last-known home
                    address of the individual;
                        ``(B) within 30 days (or such longer period as may
                    be prescribed by applicable State law) after receipt of
                    a notice pursuant to such State procedures, comply with
                    all applicable provisions of section 466; and
                        ``(C) within 30 days (or such longer period as may
                    be prescribed by applicable State law) after effective
                    service of any other such order, process, or
                    interrogatory, respond to the order, process, or
                    interrogatory.

        ``(d) Priority of Claims.--If a governmental entity specified in
    subsection (a) receives notice or is served with process, as provided in
    this section, concerning amounts owed by an individual to more than 1
    person--
                ``(1) support collection under section 466(b) must be given
            priority over any other process, as provided in section
            466(b)(7);
                ``(2) allocation of moneys due or payable to an individual
            among claimants under section 466(b) shall be governed by
            section 466(b) and the regulations prescribed under such
            section; and
                ``(3) such moneys as remain after compliance with paragraphs
            (1) and (2) shall be available to satisfy any other such
            processes on a first-come, first-served basis, with any such
            process being satisfied out of such moneys as remain after the
            satisfaction of all such processes which have been previously
            served.

        ``(e) No Requirement To Vary Pay Cycles.--A governmental entity that
    is affected by legal process served for the enforcement of an
    individual's child support or alimony payment obligations shall not be
    required to vary its normal pay and disbursement cycle in order to
    comply with the legal process.
        ``(f) Relief From Liability.--
                ``(1) Neither the United States, nor the government of the
            District of Columbia, nor any disbursing officer shall be liable
            with respect to any payment made from moneys due or payable from
            the United States to any individual pursuant to legal process
            regular on its face, if the payment is made in accordance

    [[Page 110 STAT. 2244]]

            with this section and the regulations issued to carry out this
            section.
                ``(2) No Federal employee whose duties include taking
            actions necessary to comply with the requirements of subsection
            (a) with regard to any individual shall be subject under any law
            to any disciplinary action or civil or criminal liability or
            penalty for, or on account of, any disclosure of information
            made by the employee in connection with the carrying out of such
            actions.

        ``(g) Regulations.--Authority to promulgate regulations for the
    implementation of this section shall, insofar as this section applies to
    moneys due from (or payable by)--
                ``(1) the United States (other than the legislative or
            judicial branches of the Federal Government) or the government
            of the District of Columbia, be vested in the President (or the
            designee of the President);
                ``(2) the legislative branch of the Federal Government, be
            vested jointly in the President pro tempore of the Senate and
            the Speaker of the House of Representatives (or their
            designees), and
                ``(3) the judicial branch of the Federal Government, be
            vested in the Chief Justice of the United States (or the
            designee of the Chief Justice).

        ``(h) Moneys Subject to Process.--
                ``(1) In general.--Subject to paragraph (2), moneys paid or
            payable to an individual which are considered to be based upon
            remuneration for employment, for purposes of this
            section--
                        ``(A) consist of--
                              ``(i) compensation paid or payable for
                          personal
                          services of the individual, whether the
                          compensation is denominated as wages, salary,
                          commission, bonus, pay, allowances, or otherwise
                          (including severance pay, sick pay, and incentive
                          pay);
                              ``(ii) periodic benefits (including a periodic
                          benefit as defined in section 228(h)(3)) or other
                          payments--
                                        ``(I) under the insurance system
                                    established by title II;
                                        ``(II) under any other system or
                                    fund established by the United States
                                    which provides for the payment of
                                    pensions, retirement or retired pay,
                                    annuities, dependents' or survivors'
                                    benefits, or similar amounts payable on
                                    account of personal services performed
                                    by the individual or any other
                                    individual;
                                        ``(III) as compensation for death
                                    under any Federal program;
                                        ``(IV) under any Federal program
                                    established to provide `black lung'
                                    benefits; or
                                        ``(V) by the Secretary of Veterans
                                    Affairs as compensation for a service-
                                    connected disability paid by the
                                    Secretary to a former member of the
                                    Armed Forces who is in receipt of
                                    retired or retainer pay if the former
                                    member has waived a portion of the
                                    retired or retainer pay in order to
                                    receive such compensation; and

    [[Page 110 STAT. 2245]]

                              ``(iii) worker's compensation benefits paid
                          under Federal or State law but
                        ``(B) do not include any payment--
                              ``(i) by way of reimbursement or otherwise, to
                          defray expenses incurred by the individual in
                          carrying out duties associated with the employment
                          of the individual; or
                              ``(ii) as allowances for members of the
                          uniformed services payable pursuant to chapter 7
                          of title 37, United States Code, as prescribed by
                          the Secretaries concerned (defined by section
                          101(5) of such title) as necessary for the
                          efficient performance of duty.
                ``(2) Certain amounts excluded.--In determining the amount
            of any moneys due from, or payable by, the United States to any
            individual, there shall be excluded amounts which--
                        ``(A) are owed by the individual to the United
                    States;
                        ``(B) are required by law to be, and are, deducted
                    from the remuneration or other payment involved,
                    including Federal employment taxes, and fines and
                    forfeitures ordered by court-martial;
                        ``(C) are properly withheld for Federal, State, or
                    local income tax purposes, if the withholding of the
                    amounts is authorized or required by law and if amounts
                    withheld are not greater than would be the case if the
                    individual claimed all dependents to which he was
                    entitled (the withholding of additional amounts pursuant
                    to section 3402(i) of the Internal Revenue Code of 1986
                    may be permitted only when the individual presents
                    evidence of a tax obligation which supports the
                    additional withholding);
                        ``(D) are deducted as health insurance premiums;
                        ``(E) are deducted as normal retirement
                    contributions (not including amounts deducted for
                    supplementary coverage); or
                        ``(F) are deducted as normal life insurance premiums
                    from salary or other remuneration for employment (not
                    including amounts deducted for supplementary coverage).

        ``(i) Definitions.--For purposes of this section--
                ``(1) United states.--The term `United States' includes any
            department, agency, or instrumentality of the legislative,
            judicial, or executive branch of the Federal Government, the
            United States Postal Service, the Postal Rate Commission, any
            Federal corporation created by an Act of Congress that is wholly
            owned by the Federal Government, and the governments of the
            territories and possessions of the United States.
                ``(2) Child support.--The term `child support', when used in
            reference to the legal obligations of an individual to provide
            such support, means amounts required to be paid under a
            judgment, decree, or order, whether temporary, final, or subject
            to modification, issued by a court or an administrative agency
            of competent jurisdiction, for the support and maintenance of a
            child, including a child who has attained the age of majority
            under the law of the issuing State, or a child and the parent
            with whom the child is living, which provides for monetary
            support, health care, arrearages or reimbursement, and which may
            include other related costs and fees, interest and penalties,
            income withholding, attorney's fees, and other relief.

    [[Page 110 STAT. 2246]]

                ``(3) Alimony.--
                        ``(A) In general.--The term `alimony', when used in
                    reference to the legal obligations of an individual to
                    provide the same, means periodic payments of funds for
                    the support and maintenance of the spouse (or former
                    spouse) of the individual, and (subject to and in
                    accordance with State law) includes separate
                    maintenance, alimony pendente lite, maintenance, and
                    spousal support, and includes attorney's fees, interest,
                    and court costs when and to the extent that the same are
                    expressly made recoverable as such pursuant to a decree,
                    order, or judgment issued in accordance with applicable
                    State law by a court of competent jurisdiction.
                        ``(B) Exceptions.--Such term does not include--
                              ``(i) any child support; or
                              ``(ii) any payment or transfer of property or
                          its value by an individual to the spouse or a
                          former spouse of the individual in compliance with
                          any community property settlement, equitable
                          distribution of property, or other division of
                          property between spouses or former spouses.
                ``(4) Private person.--The term `private person' means a
            person who does not have sovereign or other special immunity or
            privilege which causes the person not to be subject to legal
            process.
                ``(5) Legal process.--The term `legal process' means any
            writ, order, summons, or other similar process in the nature of
            garnishment--
                        ``(A) which is issued by--
                              ``(i) a court or an administrative agency of
                          competent jurisdiction in any State, territory, or
                          possession of the United States;
                              ``(ii) a court or an administrative agency of
                          competent jurisdiction in any foreign country with
                          which the United States has entered into an
                          agreement which requires the United States to
                          honor the process; or
                              ``(iii) an authorized official pursuant to an
                          order of such a court or an administrative agency
                          of competent jurisdiction or pursuant to State or
                          local law; and
                        ``(B) which is directed to, and the purpose of which
                    is to compel, a governmental entity which holds moneys
                    which are otherwise payable to an individual to make a
                    payment from the moneys to another party in order to
                    satisfy a legal obligation of the individual to provide
                    child support or make alimony payments.''.

        (b) Conforming Amendments.--
                (1) To part d of title iv.--Sections 461 and 462 (42 U.S.C.
            661 and 662) are repealed.
                (2) To title 5, united states code.--Section 5520a of title
            5, United States Code, is amended, in subsections (h)(2) and
            (i), by striking ``sections 459, 461, and 462 of the Social
            Security Act (42 U.S.C. 659, 661, and 662)'' and inserting
            ``section 459 of the Social Security Act (42 U.S.C. 659)''.

        (c) Military Retired and Retainer Pay.--
                (1) Definition of court.--Section 1408(a)(1) of title 10,
            United States Code, is amended--

    [[Page 110 STAT. 2247]]

                        (A) by striking ``and'' at the end of subparagraph
                    (B);
                        (B) by striking the period at the end of
                    subparagraph (C) and inserting ``; and''; and
                        (C) by adding after subparagraph (C) the following
                    new subparagraph:
                        ``(D) any administrative or judicial tribunal of a
                    State competent to enter orders for support or
                    maintenance (including a State agency administering a
                    program under a State plan approved under part D of
                    title IV of the Social Security Act), and, for purposes
                    of this subparagraph, the term `State' includes the
                    District of Columbia, the Commonwealth of Puerto Rico,
                    the Virgin Islands, Guam, and American Samoa.''.
                (2) Definition of court order.--Section 1408(a)(2) of such
            title is amended--
                        (A) by inserting ``or a support order, as defined in
                    section 453(p) of the Social Security Act (42 U.S.C.
                    653(p)),'' before ``which--'';
                        (B) in subparagraph (B)(i), by striking ``(as
                    defined in section 462(b) of the Social Security Act (42
                    U.S.C. 662(b)))'' and inserting ``(as defined in section
                    459(i)(2) of the Social Security Act (42 U.S.C.
                    659(i)(2)))''; and
                        (C) in subparagraph (B)(ii), by striking ``(as
                    defined in section 462(c) of the Social Security Act (42
                    U.S.C. 662(c)))'' and inserting ``(as defined in section
                    459(i)(3) of the Social Security Act (42 U.S.C.
                    659(i)(3)))''.
                (3) Public payee.--Section 1408(d) of such title is
            amended--
                        (A) in the heading, by inserting ``(or for Benefit
                    of)'' before ``Spouse or''; and
                        (B) in paragraph (1), in the first sentence, by
                    inserting ``(or for the benefit of such spouse or former
                    spouse to a State disbursement unit established pursuant
                    to section 454B of the Social Security Act or other
                    public payee designated by a State, in accordance with
                    part D of title IV of the Social Security Act, as
                    directed by court order, or as otherwise directed in
                    accordance with such part D)'' before ``in an amount
                    sufficient''.
                (4) Relationship to part d of title iv.--Section 1408 of
            such title is amended by adding at the end the following new
            subsection:

        ``(j) Relationship to Other Laws.--In any case involving an order
    providing for payment of child support (as defined in section 459(i)(2)
    of the Social Security Act) by a member who has never been married to
    the other parent of the child, the provisions of this section shall not
    apply, and the case shall be subject to the provisions of section 459 of
    such Act.''.
        (d) Effective Date <<NOTE: 42 USC 659 note.>> .--The amendments made
    by this section shall become effective 6 months after the date of the
    enactment of this Act.

    SEC. 363. ENFORCEMENT OF CHILD SUPPORT OBLIGATIONS OF
                MEMBERS OF THE ARMED FORCES.

        (a) <<NOTE: 10 USC 113 note.>>  Availability of Locator
    Information.--
                (1) Maintenance of address information.--The Secretary of
            Defense shall establish a centralized personnel locator service
            that includes the address of each member of the Armed

    [[Page 110 STAT. 2248]]

            Forces under the jurisdiction of the Secretary. Upon request of
            the Secretary of Transportation, addresses for members of the
            Coast Guard shall be included in the centralized personnel
            locator service.
                (2) Type of address.--
                        (A) Residential address.--Except as provided in
                    subparagraph (B), the address for a member of the Armed
                    Forces shown in the locator service shall be the
                    residential address of that member.
                        (B) Duty address.--The address for a member of the
                    Armed Forces shown in the locator service shall be the
                    duty address of that member in the case of a member--
                              (i) who is permanently assigned overseas, to a
                          vessel, or to a routinely deployable unit; or
                              (ii) with respect to whom the Secretary
                          concerned makes a determination that the member's
                          residential address should not be disclosed due to
                          national security or safety concerns.
                (3) Updating of locator information.--Within 30 days after a
            member listed in the locator service establishes a new
            residential address (or a new duty address, in the case of a
            member covered by paragraph (2)(B)), the Secretary concerned
            shall update the locator service to indicate the new address of
            the member.
                (4) Availability of information.--The Secretary of Defense
            shall make information regarding the address of a member of the
            Armed Forces listed in the locator service available, on
            request, to the Federal Parent Locator Service established under
            section 453 of the Social Security Act.

        (b) <<NOTE: 10 USC 704 note.>>  Facilitating Granting of Leave for
    Attendance at Hearings.--
                (1) Regulations.--The Secretary of each military department,
            and the Secretary of Transportation with respect to the Coast
            Guard when it is not operating as a service in the Navy, shall
            prescribe regulations to facilitate the granting of leave to a
            member of the Armed Forces under the jurisdiction of that
            Secretary in a case in which--
                        (A) the leave is needed for the member to attend a
                    hearing described in paragraph (2);
                        (B) the member is not serving in or with a unit
                    deployed in a contingency operation (as defined in
                    section 101 of title 10, United States Code); and
                        (C) the exigencies of military service (as
                    determined by the Secretary concerned) do not otherwise
                    require that such leave not be granted.
                (2) Covered hearings.--Paragraph (1) applies to a hearing
            that is conducted by a court or pursuant to an administrative
            process established under State law, in connection with a civil
            action--
                        (A) to determine whether a member of the Armed
                    Forces is a natural parent of a child; or
                        (B) to determine an obligation of a member of the
                    Armed Forces to provide child support.
                (3) Definitions.--For purposes of this subsection--
                        (A) The term ``court'' has the meaning given that
                    term in section 1408(a) of title 10, United States Code.

    [[Page 110 STAT. 2249]]

                        (B) The term ``child support'' has the meaning given
                    such term in section 459(i) of the Social Security Act
                    (42 U.S.C. 659(i)).

        (c) Payment of Military Retired Pay in Compliance With Child Support
    Orders.--
                (1) Date of certification of court order.--Section
            1408 of title 10, United States Code, as amended by section
            362(c)(4) of this Act, is amended--
                        (A) by redesignating subsections (i) and (j) as
                    subsections (j) and (k), respectively; and
                        (B) by inserting after subsection (h) the following
                    new subsection:

        ``(i) Certification Date.--It is not necessary that the
    date of a certification of the authenticity or completeness of a copy of
    a court order for child support received by the Secretary concerned for
    the purposes of this section be recent in relation to the date of
    receipt by the Secretary.''.
                (2) Payments consistent with assignments of rights to
            states.--Section 1408(d)(1) of such title is amended by
            inserting after the first sentence the following new sentence:
            ``In the case of a spouse or former spouse who, pursuant to
            section 408(a)(3) of the Social Security Act (42 U.S.C.
            608(a)(4)), assigns to a State the rights of the spouse or
            former spouse to receive support, the Secretary concerned may
            make the child support payments referred to in the preceding
            sentence to that State in amounts consistent with that
            assignment of rights.''.
                (3) Arrearages owed by members of the uniformed services.--
            Section 1408(d) of such title is amended by adding at the end
            the following new paragraph:

        ``(6) In the case of a court order for which effective service is
    made on the Secretary concerned on or after the date of the enactment of
    this paragraph and which provides for payments from the disposable
    retired pay of a member to satisfy the amount of child support set forth
    in the order, the authority provided in paragraph (1) to make payments
    from the disposable retired pay of a member to satisfy the amount of
    child support set forth in a court order shall apply to payment of any
    amount of child support arrearages set forth in that order as well as to
    amounts of child support that currently become due.''.
                (4) <<NOTE: 10 USC 1408 note.>>  Payroll deductions.--The
            Secretary of Defense shall begin payroll deductions within 30
            days after receiving notice of withholding, or for the first pay
            period that begins after such 30-day period.

    SEC. 364. VOIDING OF FRAUDULENT TRANSFERS.

        Section 466 (42 U.S.C. 666), as amended by section 321 of this Act,
    is amended by adding at the end the following new subsection:
        ``(g) Laws Voiding Fraudulent Transfers.--In order to
    satisfy section 454(20)(A), each State must have in effect--
                ``(1)(A) the Uniform Fraudulent Conveyance Act of 1981;
                ``(B) the Uniform Fraudulent Transfer Act of 1984; or
                ``(C) another law, specifying indicia of fraud which create
            a prima facie case that a debtor transferred income or property
            to avoid payment to a child support creditor, which the

    [[Page 110 STAT. 2250]]

            Secretary finds affords comparable rights to child support
            creditors; and
                ``(2) procedures under which, in any case in which the State
            knows of a transfer by a child support debtor with respect to
            which such a prima facie case is established, the State must--
                        ``(A) seek to void such transfer; or
                        ``(B) obtain a settlement in the best interests of
                    the child support creditor.''.

    SEC. 365. WORK REQUIREMENT FOR PERSONS OWING PAST-DUE CHILD SUPPORT.

        (a) In General.--Section 466(a) (42 U.S.C. 666(a)), as amended by
    sections 315, 317, and 323 of this Act, is amended by inserting after
    paragraph (14) the following new paragraph:
                ``(15) Procedures to ensure that persons owing past-due
            support work or have a plan for payment of such support.--
                        ``(A) In general.--Procedures under which the State
                    has the authority, in any case in which an individual
                    owes past-due support with respect to a child receiving
                    assistance under a State program funded under part A, to
                    issue an order or to request that a court or an
                    administrative process established pursuant to State law
                    issue an order that requires the individual to--
                              ``(i) pay such support in accordance with a
                          plan approved by the court, or, at the option of
                          the State, a plan approved by the State agency
                          administering the State program under this part;
                          or
                              ``(ii) if the individual is subject to such a
                          plan and is not incapacitated, participate in such
                          work activities (as defined in section 407(d)) as
                          the court, or, at the option of the State, the
                          State agency administering the State program under
                          this part, deems appropriate.
                        ``(B) Past-due support defined.--For purposes of
                    subparagraph (A), the term `past-due support' means the
                    amount of a delinquency, determined under a court order,
                    or an order of an administrative process established
                    under State law, for support and maintenance of a child,
                    or of a child and the parent with whom the child is
                    living.''.

        (b) Conforming Amendment.--The flush paragraph at the end of section
    466(a) (42 U.S.C. 666(a)) is amended by striking ``and (7)'' and
    inserting ``(7), and (15)''.

    SEC. 366. DEFINITION OF SUPPORT ORDER.

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

    [[Page 110 STAT. 2251]]

    and which may include related costs and fees, interest and penalties,
    income withholding, attorneys' fees, and other relief.''.

    SEC. 367. REPORTING ARREARAGES TO CREDIT BUREAUS.

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

    SEC. 368. LIENS.

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

    SEC. 369. STATE LAW AUTHORIZING SUSPENSION OF LICENSES.

        Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317,
    323, and 365 of this Act, is amended by inserting after paragraph (15)
    the following:
                ``(16) Authority to withhold or suspend licenses.--
            Procedures under which the State has (and uses in appropriate
            cases) authority to withhold or suspend, or to restrict the use
            of driver's licenses, professional and occupational licenses,
            and recreational licenses of individuals owing overdue support
            or failing, after receiving appropriate notice, to comply with
            subpoenas or warrants relating to paternity or child support
            proceedings.''.

    SEC. 370. DENIAL OF PASSPORTS FOR NONPAYMENT OF CHILD
                SUPPORT.

        (a) HHS Certification Procedure.--

    [[Page 110 STAT. 2252]]

                (1) Secretarial responsibility.--Section 452 (42 U.S.C.
            652), as amended by section 345 of this Act, is amended by
            adding at the end the following new subsection:

        ``(k)(1) If the Secretary receives a certification by a State agency
    in accordance with the requirements of section 454(31) that an
    individual owes arrearages of child support in an amount exceeding
    $5,000, the Secretary shall transmit such certification to the Secretary
    of State for action (with respect to denial, revocation, or limitation
    of passports) pursuant to paragraph (2).
        ``(2) The Secretary of State shall, upon certification by the
    Secretary transmitted under paragraph (1), refuse to issue a passport to
    such individual, and may revoke, restrict, or limit a passport issued
    previously to such individual.
        ``(3) The Secretary and the Secretary of State shall not be liable
    to an individual for any action with respect to a certification by a
    State agency under this section.''.
                (2) State agency responsibility.--Section 454 (42 U.S.C.
            654), as amended by sections 301(b), 303(a), 312(b), 313(a),
            333, and 343(b) of this Act, is amended--
                        (A) by striking ``and'' at the end of paragraph
                    (29);
                        (B) by striking the period at the end of paragraph
                    (30) and inserting ``; and''; and
                        (C) by adding after paragraph (30) the following new
                    paragraph:
                ``(31) provide that the State agency will have in effect a
            procedure for certifying to the Secretary, for purposes of the
            procedure under section 452(k), determinations that individuals
            owe arrearages of child support in an amount exceeding $5,000,
            under which procedure--
                        ``(A) each individual concerned is afforded notice
                    of such determination and the consequences thereof, and
                    an opportunity to contest the determination; and
                        ``(B) the certification by the State agency is
                    furnished to the Secretary in such format, and
                    accompanied by such supporting documentation, as the
                    Secretary may require.''.

        (b) Effective Date <<NOTE: 42 USC 652 note.>> .--This section and
    the amendments made by this section shall become effective October 1,
    1997.

    SEC. 371. INTERNATIONAL SUPPORT ENFORCEMENT.

        (a) Authority for International Agreements.--Part D of title IV, as
    amended by section 362(a) of this Act, is amended by adding after
    section 459 the following new section:

    ``SEC. 459A. <<NOTE: 42 USC 659a.>>  INTERNATIONAL SUPPORT ENFORCEMENT.

        ``(a) Authority for Declarations.--
                ``(1) Declaration.--The Secretary of State, with the
            concurrence of the Secretary of Health and Human Services, is
            authorized to declare any foreign country (or a political
            subdivision thereof) to be a foreign reciprocating country if
            the foreign country has established, or undertakes to establish,
            procedures for the establishment and enforcement of duties of
            support owed to obligees who are residents of the United States,
            and such procedures are substantially in conformity with the
            standards prescribed under subsection (b).
                ``(2) Revocation.--A declaration with respect to a foreign
            country made pursuant to paragraph (1) may be revoked if the
            Secretaries of State and Health and Human Services determine
            that--

    [[Page 110 STAT. 2253]]

                        ``(A) the procedures established by the foreign
                    country regarding the establishment and enforcement of
                    duties of support have been so changed, or the foreign
                    country's implementation of such procedures is so
                    unsatisfactory, that such procedures do not meet the
                    criteria for such a declaration; or
                        ``(B) continued operation of the declaration is not
                    consistent with the purposes of this part.
                ``(3) Form of declaration.--A declaration under paragraph
            (1) may be made in the form of an international agreement, in
            connection with an international agreement or corresponding
            foreign declaration, or on a unilateral basis.

        ``(b) Standards for Foreign Support Enforcement
    Procedures.--
                ``(1) Mandatory elements.--Support enforcement procedures of
            a foreign country which may be the subject of a declaration
            pursuant to subsection (a)(1) shall include the following
            elements:
                        ``(A) The foreign country (or political subdivision
                    thereof) has in effect procedures, available to
                    residents of the United States--
                              ``(i) for establishment of paternity, and for
                          establishment of orders of support for children
                          and custodial parents; and
                              ``(ii) for enforcement of orders to provide
                          support to children and custodial parents,
                          including procedures for collection and
                          appropriate distribution of support payments under
                          such orders.
                        ``(B) The procedures described in subparagraph (A),
                    including legal and administrative assistance, are
                    provided to residents of the United States at no cost.
                        ``(C) An agency of the foreign country is designated
                    as a Central Authority responsible for--
                              ``(i) facilitating support enforcement in
                          cases involving residents of the foreign country
                          and residents of the United States; and
                              ``(ii) ensuring compliance with the standards
                          established pursuant to this subsection.
                ``(2) Additional elements.--The Secretary of Health and
            Human Services and the Secretary of State, in consultation with
            the States, may establish such additional standards as may be
            considered necessary to further the purposes of this section.

        ``(c) Designation of United States Central Authority.--It shall be
    the responsibility of the Secretary of Health and Human Services to
    facilitate support enforcement in cases involving residents of the
    United States and residents of foreign countries that are the subject of
    a declaration under this section, by activities including--
                ``(1) development of uniform forms and procedures for use in
            such cases;
                ``(2) notification of foreign reciprocating countries of the
            State of residence of individuals sought for support enforcement
            purposes, on the basis of information provided by the Federal
            Parent Locator Service; and
                ``(3) such other oversight, assistance, and coordination
            activities as the Secretary may find necessary and appropriate.

    [[Page 110 STAT. 2254]]

        ``(d) Effect on Other Laws.--States may enter into reciprocal
    arrangements for the establishment and enforcement of support
    obligations with foreign countries that are not the subject of a
    declaration pursuant to subsection (a), to the extent consistent with
    Federal law.''.
        (b) State Plan Requirement.--Section 454 (42 U.S.C. 654), as amended
    by sections 301(b), 303(a), 312(b), 313(a), 333, 343(b), and 370(a)(2)
    of this Act, is amended--
                (1) by striking ``and'' at the end of paragraph (30);
                (2) by striking the period at the end of paragraph (31) and
            inserting ``; and''; and
                (3) by adding after paragraph (31) the following new
            paragraph:
                ``(32)(A) provide that any request for services under this
            part by a foreign reciprocating country or a foreign country
            with which the State has an arrangement described in section
            459A(d)(2) shall be treated as a request by a State;
                ``(B) provide, at State option, notwithstanding paragraph
            (4) or any other provision of this part, for services under the
            plan for enforcement of a spousal support order not described in
            paragraph (4)(B) entered by such a country (or subdivision); and
                ``(C) provide that no applications will be required from,
            and no costs will be assessed for such services against, the
            foreign reciprocating country or foreign obligee (but costs may
            at State option be assessed against the obligor).''.

    SEC. 372. FINANCIAL INSTITUTION DATA MATCHES.

        Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317,
    323, 365, and 369 of this Act, is amended by inserting after paragraph
    (16) the following new paragraph:
                ``(17) Financial institution data matches.--
                        ``(A) In general.--Procedures under which the State
                    agency shall enter into agreements with financial
                    institutions doing business in the State--
                              ``(i) to develop and operate, in coordination
                          with such financial institutions, a data match
                          system, using automated data exchanges to the
                          maximum extent feasible, in which each such
                          financial institution is required to provide for
                          each calendar quarter the name, record address,
                          social security number or other taxpayer
                          identification number, and other identifying
                          information for each noncustodial parent who
                          maintains an account at such institution and who
                          owes past-due support, as identified by the State
                          by name and social security number or other
                          taxpayer identification number; and
                              ``(ii) in response to a notice of lien or
                          levy, encumber or surrender, as the case may be,
                          assets held by such institution on behalf of any
                          noncustodial parent who is subject to a child
                          support lien pursuant to paragraph (4).
                        ``(B) Reasonable fees.--The State agency may pay a
                    reasonable fee to a financial institution for conducting
                    the data match provided for in subparagraph (A)(i), not
                    to exceed the actual costs incurred by such financial
                    institution.

    [[Page 110 STAT. 2255]]

                        ``(C) Liability.--A financial institution shall not
                    be liable under any Federal or State law to any person--
                              ``(i) for any disclosure of information to the
                          State agency under subparagraph (A)(i);
                              ``(ii) for encumbering or surrendering any
                          assets held by such financial institution in
                          response to a notice of lien or levy issued by the
                          State agency as provided for in subparagraph
                          (A)(ii); or
                              ``(iii) for any other action taken in good
                          faith to comply with the requirements of
                          subparagraph (A).
                        ``(D) Definitions.--For purposes of this paragraph--
                              ``(i) Financial institution.--The term
                          `financial institution' has the meaning given to
                          such term by section 469A(d)(1).
                              ``(ii) Account.--The term `account' means a
                          demand deposit account, checking or negotiable
                          withdrawal order account, savings account, time
                          deposit account, or money-market mutual fund
                          account.''.

    SEC. 373. ENFORCEMENT OF ORDERS AGAINST PATERNAL OR
                MATERNAL GRANDPARENTS IN CASES OF MINOR
                PARENTS.

        Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317,
    323, 365, 369, and 372 of this Act, is amended by inserting after
    paragraph (17) the following new paragraph:
                ``(18) Enforcement of orders against paternal or maternal
            grandparents.--Procedures under which, at the State's option,
            any child support order enforced under this part with respect to
            a child of minor parents, if the custodial parent of such child
            is receiving assistance under the State program under part A,
            shall be enforceable, jointly and severally, against the parents
            of the noncustodial parent of such child.''.

    SEC. 374. NONDISCHARGEABILITY IN BANKRUPTCY OF CERTAIN DEBTS FOR THE
                SUPPORT OF A CHILD.

        (a) Amendment to Title 11 of the United States Code.--Section 523(a)
    of title 11, United States Code, is amended--
                (1) by striking ``or'' at the end of paragraph (16);
                (2) by striking the period at the end of paragraph (17) and
            inserting ``; or'';
                (3) by adding at the end the following:
                ``(18) owed under State law to a State or municipality that
            is--
                        ``(A) in the nature of support, and
                        ``(B) enforceable under part D of title IV of the
                    Social Security Act (42 U.S.C. 601 et seq.).''; and
                (4) in paragraph (5), by striking ``section 402(a)(26)'' and
            inserting ``section 408(a)(3)''.

        (b) Amendment to the Social Security Act.--Section 456(b) (42 U.S.C.
    656(b)) is amended to read as follows:
        ``(b) Nondischargeability.--A debt (as defined in section 101 of
    title 11 of the United States Code) owed under State law to a State (as
    defined in such section) or municipality (as defined in such section)
    that is in the nature of support and that is enforceable under this part
    is not released by a discharge in bankruptcy under title 11 of the
    United States Code.''.

    [[Page 110 STAT. 2256]]

        (c) Application of Amendments <<NOTE: 11 USC 523 note.>> .--The
    amendments made by this section shall apply only with respect to cases
    commenced under title 11 of the United States Code after the date of the
    enactment of this Act.

    SEC. 375. CHILD SUPPORT ENFORCEMENT FOR INDIAN TRIBES.

        (a) Child Support Enforcement Agreements.--Section 454 (42 U.S.C.
    654), as amended by sections 301(b), 303(a), 312(b), 313(a), 333,
    343(b), 370(a)(2), and 371(b) of this Act, is amended--
                (1) by striking ``and'' at the end of paragraph (31);
                (2) by striking the period at the end of paragraph (32) and
            inserting ``; and'';
                (3) by adding after paragraph (32) the following new
            paragraph:
                ``(33) provide that a State that receives funding pursuant
            to section 428 and that has within its borders Indian country
            (as defined in section 1151 of title 18, United States Code) may
            enter into cooperative agreements with an Indian tribe or tribal
            organization (as defined in subsections (e) and (l) of section 4
            of the Indian Self-Determination and Education Assistance Act
            (25 U.S.C. 450b)), if the Indian tribe or tribal organization
            demonstrates that such tribe or organization has an established
            tribal court system or a Court of Indian Offenses with the
            authority to establish paternity, establish, modify, and enforce
            support orders, and to enter support orders in accordance with
            child support guidelines established by such tribe or
            organization, under which the State and tribe or organization
            shall provide for the cooperative delivery of child support
            enforcement services in Indian country and for the forwarding of
            all funding collected pursuant to the functions performed by the
            tribe or organization to the State agency, or conversely, by the
            State agency to the tribe or organization, which shall
            distribute such funding in accordance with such agreement.'';
            and
                (4) by adding at the end the following new sentence:
            ``Nothing in paragraph (33) shall void any provision of any
            cooperative agreement entered into before the date of the
            enactment of such paragraph, nor shall such paragraph deprive
            any State of jurisdiction over Indian country (as so defined)
            that is lawfully exercised under section 402 of the Act entitled
            `An Act to prescribe penalties for certain acts of violence or
            intimidation, and for other purposes', approved April 11, 1968
            (25 U.S.C. 1322).''.

        (b) Direct Federal Funding to Indian Tribes and Tribal
    Organizations.--Section 455 (42 U.S.C. 655) is amended by adding at the
    end the following new subsection:
        ``(b) The Secretary may, in appropriate cases, make direct payments
    under this part to an Indian tribe or tribal organization which has an
    approved child support enforcement plan under this title. In determining
    whether such payments are appropriate, the Secretary shall, at a
    minimum, consider whether services are being provided to eligible Indian
    recipients by the State agency through an agreement entered into
    pursuant to section 454(34).''.
        (c) Cooperative Enforcement Agreements.--Paragraph (7) of section
    454 (42 U.S.C. 654) is amended by inserting ``and Indian tribes or
    tribal organizations (as defined in subsections (e) and

    [[Page 110 STAT. 2257]]

    (l) of section 4 of the Indian Self-Determination and Education
    Assistance Act (25 U.S.C. 450b))'' after ``law enforcement
    officials''. <<NOTE: Native Americans.>>

        (d) Conforming Amendment.--Subsection (c) of section 428 (42 U.S.C.
    628) is amended to read as follows:
        ``(c) For purposes of this section, the terms `Indian tribe' and
    `tribal organization' shall have the meanings given such terms by
    subsections (e) and (l) of section 4 of the Indian Self-Determination
    and Education Assistance Act (25 U.S.C. 450b), respectively.''.

                           Subtitle H--Medical Support

    SEC. 381. CORRECTION TO ERISA DEFINITION OF MEDICAL CHILD
                SUPPORT ORDER.

        (a) In General.--Section 609(a)(2)(B) of the Employee Retirement
    Income Security Act of 1974 (29 U.S.C. 1169(a)(2)(B)) is amended--
                (1) by striking ``issued by a court of competent
            jurisdiction'';
                (2) by striking the period at the end of clause (ii) and
            inserting a comma; and
                (3) by adding, after and below clause (ii), the following:
                    ``if such judgment, decree, or order (I) is issued by a
                    court of competent jurisdiction or (II) is issued
                    through an administrative process established under
                    State law and has the force and effect of law under
                    applicable State law.''.

        (b) Effective Date <<NOTE: 29 USC 1169 note.>> .--
                (1) In general.--The amendments made by this section shall
            take effect on the date of the enactment of this Act.
                (2) Plan amendments not required until january 1, 1997.--Any
            amendment to a plan required to be made by an amendment made by
            this section shall not be required to be made before the 1st
            plan year beginning on or after January 1, 1997, if--
                        (A) during the period after the date before the date
                    of the enactment of this Act and before such 1st plan
                    year, the plan is operated in accordance with the
                    requirements of the amendments made by this section; and
                        (B) such plan amendment applies retroactively to the
                    period after the date before the date of the enactment
                    of this Act and before such 1st plan year.
            A plan shall not be treated as failing to be operated in
            accordance with the provisions of the plan merely because it
            operates in accordance with this paragraph.

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

        Section 466(a) (42 U.S.C. 666(a)), as amended by sections 315, 317,
    323, 365, 369, 372, and 373 of this Act, is amended by inserting after
    paragraph (18) the following new paragraph:
                ``(19) Health care coverage.--Procedures under which all
            child support orders enforced pursuant to this part shall
            include a provision for the health care coverage of the child,
            and in the case in which a noncustodial parent provides such
            coverage and changes employment, and the new employer provides
            health care coverage, the State agency shall transfer notice of
            the provision to the employer, which notice shall

    [[Page 110 STAT. 2258]]

            operate to enroll the child in the noncustodial parent's health
            plan, unless the noncustodial parent contests the notice.''.

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

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

        Part D of title IV (42 U.S.C. 651-669), as amended by section 353 of
    this Act, is amended by adding at the end the following new section:

    ``SEC. 469B. <<NOTE: 42 USC 669B.>>  GRANTS TO STATES FOR ACCESS AND
                VISITATION PROGRAMS.

        ``(a) In General.--The Administration for Children and Families
    shall make grants under this section to enable States to establish and
    administer programs to support and facilitate noncustodial parents'
    access to and visitation of their children, by means of activities
    including mediation (both voluntary and mandatory), counseling,
    education, development of parenting plans, visitation enforcement
    (including monitoring, supervision and neutral drop-off and pickup), and
    development of guidelines for visitation and alternative custody
    arrangements.
        ``(b) Amount of Grant.--The amount of the grant to be made to a
    State under this section for a fiscal year shall be an amount equal to
    the lesser of--
                ``(1) 90 percent of State expenditures during the fiscal
            year for activities described in subsection (a); or
                ``(2) the allotment of the State under subsection (c) for
            the fiscal year.

        ``(c) Allotments to States.--
                ``(1) In general.--The allotment of a State for a fiscal
            year is the amount that bears the same ratio to $10,000,000 for
            grants under this section for the fiscal year as the number of
            children in the State living with only 1 biological parent bears
            to the total number of such children in all States.
                ``(2) Minimum allotment.--The Administration for Children
            and Families shall adjust allotments to States under paragraph
            (1) as necessary to ensure that no State is allotted less than--
                        ``(A) $50,000 for fiscal year 1997 or 1998; or
                        ``(B) $100,000 for any succeeding fiscal year.

        ``(d) No Supplantation of State Expenditures for Similar
    Activities.--A State to which a grant is made under this section may not
    use the grant to supplant expenditures by the State for activities
    specified in subsection (a), but shall use the grant to supplement such
    expenditures at a level at least equal to the level of such expenditures
    for fiscal year 1995.
        ``(e) State Administration.--Each State to which a grant is made
    under this section--
                ``(1) may administer State programs funded with the grant,
            directly or through grants to or contracts with courts, local
            public agencies, or nonprofit private entities;
                ``(2) shall not be required to operate such programs on a
            statewide basis; and

    [[Page 110 STAT. 2259]]

                ``(3) shall monitor, evaluate, and report on such programs
            in accordance with regulations prescribed by the Secretary.''.

              Subtitle J--Effective Dates and Conforming Amendments

    SEC. 395. EFFECTIVE DATES AND CONFORMING AMENDMENTS.

        (a) In General <<NOTE: 42 USC 654 note.>> .--Except as otherwise
    specifically provided (but subject to subsections (b) and (c))--
                (1) the provisions of this title requiring the enactment or
            amendment of State laws under section 466 of the Social Security
            Act, or revision of State plans under section 454 of such Act,
            shall be effective with respect to periods beginning on and
            after October 1, 1996; and
                (2) <<NOTE: 42 USC 654 note.>>  all other provisions of this
            title shall become effective upon the date of the enactment of
            this Act.

        (b) Grace Period for State Law Changes.--The provisions of this
    title shall become effective with respect to a State on the later of--
                (1) the date specified in this title, or
                (2) the effective date of laws enacted by the legislature of
            such State implementing such provisions,

    but in no event later than the 1st day of the 1st calendar quarter
    beginning after the close of the 1st regular session of the State
    legislature that begins after the date of the enactment of this Act. For
    purposes of the previous sentence, in the case of a State that has a 2-
    year legislative session, each year of such session shall be deemed to
    be a separate regular session of the State legislature.
        (c) <<NOTE: 42 USC 654 note.>>  Grace Period for State
    Constitutional Amendment.--A State shall not be found out of compliance
    with any requirement enacted by this title if the State is unable to so
    comply without amending the State constitution until the earlier of--
                (1) 1 year after the effective date of the necessary State
            constitutional amendment; or
                (2) 5 years after the date of the enactment of this Act.

        (d) Conforming Amendments.--
                (1) The following provisions are amended by striking
            ``absent'' each place it appears and inserting ``noncustodial'':
                        (A) Section 451 (42 U.S.C. 651).
                        (B) Subsections (a)(1), (a)(8), (a)(10)(E),
                    (a)(10)(F), (f), and (h) of section 452 (42 U.S.C. 652).
                        (C) Section 453(f) (42 U.S.C. 653(f)).
                        (D) Paragraphs (8), (13), and (21)(A) of section 454
                    (42 U.S.C. 654).
                        (E) Section 455(e)(1) (42 U.S.C. 655(e)(1)).
                        (F) Section 458(a) (42 U.S.C. 658(a)).
                        (G) Subsections (a), (b), and (c) of section 463
                    (42 U.S.C. 663).
                        (H) Subsections (a)(3)(A), (a)(3)(C), (a)(6), and
                    (a)(8)(B)(ii), the last sentence of subsection (a), and
                    subsections (b)(1), (b)(3)(B), (b)(3)(B)(i),
                    (b)(6)(A)(i), (b)(9), and (e) of section 466 (42 U.S.C.
                    666).
                (2) The following provisions are amended by striking ``an
            absent'' each place it appears and inserting ``a noncustodial'':

    [[Page 110 STAT. 2260]]

                        (A) Paragraphs (2) and (3) of section 453(c)
                    (42 U.S.C. 653(c)).
                        (B) Subparagraphs (B) and (C) of section 454(9) (42
                    U.S.C. 654(9)).
                        (C) Section 456(a)(3) (42 U.S.C. 656(a)(3)).
                        (D) Subsections (a)(3)(A), (a)(6), (a)(8)(B)(i),
                    (b)(3)(A), and (b)(3)(B) of section 466 (42 U.S.C. 666).
                        (E) Paragraphs (2) and (4) of section 469(b) (42
                    U.S.C. 669(b)).

          TITLE IV--RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

    SEC. 400. <<NOTE: 8 USC 1601.>>  STATEMENTS OF NATIONAL POLICY
                CONCERNING WELFARE AND IMMIGRATION.

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

    [[Page 110 STAT. 2261]]

                  Subtitle A--Eligibility for Federal Benefits

    SEC. 401. <<NOTE: 8 USC 1611.>>  ALIENS WHO ARE NOT QUALIFIED ALIENS
                INELIGIBLE FOR FEDERAL PUBLIC BENEFITS.

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

    [[Page 110 STAT. 2262]]

            or to any benefit payable under title II of the Social Security
            Act to which entitlement is based on an application filed in or
            before the month in which this Act becomes law.

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

    SEC. 402. <<NOTE: 8 USC 1612.>>  LIMITED ELIGIBILITY OF QUALIFIED ALIENS
                FOR CERTAIN FEDERAL PROGRAMS.

        (a) Limited Eligibility for Specified Federal Programs.--
                (1) In general.--Notwithstanding any other provision of law
            and except as provided in paragraph (2), an alien who is a
            qualified alien (as defined in section 431) is not eligible for
            any specified Federal program (as defined in para-
            graph (3)).
                (2) Exceptions.--
                        (A) Time-limited exception for refugees and
                    asylees.--Paragraph (1) shall not apply to an alien
                    until 5 years after the date--
                              (i) an alien is admitted to the United States
                          as a refugee under section 207 of the Immigration
                          and Nationality Act;
                              (ii) an alien is granted asylum under section
                          208 of such Act; or
                              (iii) an alien's deportation is withheld under
                          section 243(h) of such Act.
                        (B) Certain permanent resident aliens.--Paragraph
                    (1) shall not apply to an alien who--
                              (i) is lawfully admitted to the United States
                          for permanent residence under the Immigration and
                          Nationality Act; and
                              (ii)(I) has worked 40 qualifying quarters of
                          coverage as defined under title II of the Social
                          Security Act or can be credited with such
                          qualifying quarters as provided under section 435,
                          and (II) in the case

    [[Page 110 STAT. 2263]]

                          of any such qualifying quarter creditable for any
                          period beginning after December 31, 1996, did not
                          receive any Federal means-tested public benefit
                          (as provided under section 403) during any such
                          period.
                        (C) Veteran and active duty exception.--Paragraph
                    (1) shall not apply to an alien who is lawfully residing
                    in any State and is--
                              (i) a veteran (as defined in section 101 of
                          title 38, United States Code) with a discharge
                          characterized as an honorable discharge and not on
                          account of alienage,
                              (ii) on active duty (other than active duty
                          for
                          training) in the Armed Forces of the United
                          States, or
                              (iii) the spouse or unmarried dependent child
                          of an individual described in clause (i) or (ii).
                        (D) Transition for aliens currently receiving
                    benefits.--
                              (i) SSI.--
                                        (I) In general.--With respect to the
                                    specified Federal program described in
                                    paragraph (3)(A), during the period
                                    beginning on the date of the enactment
                                    of this Act and ending on the date which
                                    is 1 year after such date of enactment,
                                    the Commissioner of Social Security
                                    shall redetermine the eligibility of any
                                    individual who is receiving benefits
                                    under such program as of the date of the
                                    enactment of this Act and whose
                                    eligibility for such benefits may
                                    terminate by reason of the provisions of
                                    this subsection.
                                        (II) Redetermination criteria.--
                                    With respect to any redetermination
                                    under subclause (I), the Commissioner of
                                    Social Security shall apply the
                                    eligibility criteria for new applicants
                                    for benefits under such program.
                                        (III) Grandfather provision.--The
                                    provisions of this subsection and the
                                    redetermination under subclause (I),
                                    shall only apply with respect to the
                                    benefits of an individual described in
                                    subclause (I) for months beginning on or
                                    after the date of the redetermination
                                    with respect to such individual.
                                        (IV) Notice.--Not later than March
                                    31, 1997, the Commissioner of Social
                                    Security shall notify an individual
                                    described in subclause (I) of the
                                    provisions of this clause.
                              (ii) Food stamps.--
                                        (I) In general.--With respect to the
                                    specified Federal program described in
                                    paragraph (3)(B), during the period
                                    beginning on the date of enactment of
                                    this Act and ending on the date which is
                                    1 year after the date of enactment, the
                                    State agency shall, at the time of the
                                    recertification, recertify the
                                    eligibility of any individual who is
                                    receiving benefits under such program as
                                    of the date of enactment of this Act and
                                    whose eligibility

    [[Page 110 STAT. 2264]]

                                    for such benefits may terminate by
                                    reason of the provisions of this
                                    subsection.
                                        (II) Recertification criteria.--With
                                    respect to any recertification under
                                    subclause (I), the State agency shall
                                    apply the eligibility criteria for
                                    applicants for benefits under such
                                    program.
                                        (III) Grandfather provision.--The
                                    provisions of this subsection and the
                                    recertification under subclause (I)
                                    shall only apply with respect to the
                                    eligibility of an alien for a program
                                    for months beginning on or after the
                                    date of recertification, if on the date
                                    of enactment of this Act the alien is
                                    lawfully residing in any State and is
                                    receiving benefits under such program on
                                    such date of enactment.
                (3) Specified federal program defined.--For purposes of this
            title, the term ``specified Federal program'' means
            any of the following:
                        (A) SSI.--The supplemental security income program
                    under title XVI of the Social Security Act, including
                    supplementary payments pursuant to an agreement for
                    Federal administration under section 1616(a) of the
                    Social Security Act and payments pursuant to an
                    agreement entered into under section 212(b) of Public
                    Law 93-66.
                        (B) Food stamps.--The food stamp program as defined
                    in section 3(h) of the Food Stamp Act of 1977.

        (b) Limited Eligibility for Designated Federal
    Programs.--
                (1) In general.--Notwithstanding any other provision of law
            and except as provided in section 403 and paragraph (2), a State
            is authorized to determine the eligibility of an alien who is a
            qualified alien (as defined in section 431) for any designated
            Federal program (as defined in paragraph (3)).
                (2) Exceptions.--Qualified aliens under this paragraph shall
            be eligible for any designated Federal program.
                        (A) Time-limited exception for refugees and
                    asylees.--
                              (i) An alien who is admitted to the United
                          States as a refugee under section 207 of the
                          Immigration and Nationality Act until 5 years
                          after the date of an alien's entry into the United
                          States.
                              (ii) An alien who is granted asylum under
                          section 208 of such Act until 5 years after the
                          date of such grant of asylum.
                              (iii) An alien whose deportation is being
                          withheld under section 243(h) of such Act until 5
                          years after such withholding.
                        (B) Certain permanent resident aliens.--An
                    alien who--
                              (i) is lawfully admitted to the United States
                          for permanent residence under the Immigration and
                          Nationality Act; and
                              (ii)(I) has worked 40 qualifying quarters of
                          coverage as defined under title II of the Social
                          Security Act or can be credited with such
                          qualifying quarters as provided under section 435,
                          and (II) in the case of any such qualifying
                          quarter creditable for any period

    [[Page 110 STAT. 2265]]

                          beginning after December 31, 1996, did not receive
                          any Federal means-tested public benefit (as
                          provided under section 403) during any such
                          period.
                        (C) Veteran and active duty exception.--An alien who
                    is lawfully residing in any State and is--
                              (i) a veteran (as defined in section 101 of
                          title 38, United States Code) with a discharge
                          characterized as an honorable discharge and not on
                          account of alienage,
                              (ii) on active duty (other than active duty
                          for
                          training) in the Armed Forces of the United
                          States, or
                              (iii) the spouse or unmarried dependent child
                          of an individual described in clause (i) or (ii).
                        (D) Transition for those currently receiving
                    benefits.--An alien who on the date of the enactment of
                    this Act is lawfully residing in any State and is
                    receiving benefits under such program on the date of the
                    enactment of this Act shall continue to be eligible to
                    receive such benefits until January 1, 1997.
                (3) Designated federal program defined.--For purposes of
            this title, the term ``designated Federal program'' means any of
            the following:
                        (A) Temporary assistance for needy families.--The
                    program of block grants to States for temporary
                    assistance for needy families under part A of title IV
                    of the Social Security Act.
                        (B) Social services block grant.--The program of
                    block grants to States for social services under title
                    XX of the Social Security Act.
                        (C) Medicaid.--A State plan approved under title XIX
                    of the Social Security Act, other than medical
                    assistance described in section 401(b)(1)(A).

    SEC. 403. <<NOTE: 8 USC 1613.>>  FIVE-YEAR LIMITED ELIGIBILITY OF
                QUALIFIED ALIENS FOR FEDERAL MEANS-TESTED PUBLIC BENEFIT.

        (a) In General.--Notwithstanding any other provision of law and
    except as provided in subsections (b), (c), and (d), an alien who is a
    qualified alien (as defined in section 431) and who enters the United
    States on or after the date of the enactment of this Act is not eligible
    for any Federal means-tested public benefit for a period of 5 years
    beginning on the date of the alien's entry into the United States with a
    status within the meaning of the term ``qualified alien''.
        (b) Exceptions.--The limitation under subsection (a) shall not apply
    to the following aliens:
                (1) Exception for refugees and asylees.--
                        (A) An alien who is admitted to the United States as
                    a refugee under section 207 of the Immigration and
                    Nationality Act.
                        (B) An alien who is granted asylum under section 208
                    of such Act.
                        (C) An alien whose deportation is being withheld
                    under section 243(h) of such Act.
                (2) Veteran and active duty exception.--An alien who is
            lawfully residing in any State and is--

    [[Page 110 STAT. 2266]]

                        (A) a veteran (as defined in section 101 of title
                    38, United States Code) with a discharge characterized
                    as an honorable discharge and not on account of
                    alienage,
                        (B) on active duty (other than active duty for
                    training) in the Armed Forces of the United States, or
                        (C) the spouse or unmarried dependent child of an
                    individual described in subparagraph (A) or (B).

        (c) Application of Term Federal Means-tested Public Benefit.--
                (1) The limitation under subsection (a) shall not apply to
            assistance or benefits under paragraph (2).
                (2) Assistance and benefits under this paragraph are as
            follows:
                        (A) Medical assistance described in section
                    401(b)(1)(A).
                        (B) Short-term, non-cash, in-kind emergency disaster
                    relief.
                        (C) Assistance or benefits under the National School
                    Lunch Act.
                        (D) Assistance or benefits under the Child Nutrition
                    Act of 1966.
                        (E) Public health assistance (not including any
                    assistance under title XIX of the Social Security Act)
                    for immunizations with respect to immunizable diseases
                    and for testing and treatment of symptoms of
                    communicable diseases whether or not such symptoms are
                    caused by a communicable disease.
                        (F) Payments for foster care and adoption assistance
                    under parts B and E of title IV of the Social Security
                    Act for a parent or a child who would, in the absence of
                    subsection (a), be eligible to have such payments made
                    on the child's behalf under such part, but only if the
                    foster or adoptive parent (or parents) of such child is
                    a qualified alien (as defined in section 431).
                        (G) Programs, services, or assistance (such as soup
                    kitchens, crisis counseling and intervention, and short-
                    term shelter) specified by the Attorney General, in the
                    Attorney General's sole and unreviewable discretion
                    after consultation with appropriate Federal agencies and
                    departments, which (i) deliver in-kind services at the
                    community level, including through public or private
                    nonprofit agencies; (ii) do not condition the provision
                    of assistance, the amount of assistance provided, or the
                    cost of assistance provided on the individual
                    recipient's income or resources; and (iii) are necessary
                    for the protection of life or safety.
                        (H) Programs of student assistance under titles IV,
                    V, IX, and X of the Higher Education Act of 1965, and
                    titles III, VII, and VIII of the Public Health Service
                    Act.
                        (I) Means-tested programs under the Elementary and
                    Secondary Education Act of 1965.
                        (J) Benefits under the Head Start Act.
                        (K) Benefits under the Job Training Partnership Act.

        (d) Special Rule for Refugee and Entrant Assistance for Cuban and
    Haitian Entrants.--The limitation under subsection (a) shall not apply
    to refugee and entrant assistance activities, authorized by title IV of
    the Immigration and Nationality Act and section 501 of the Refugee
    Education Assistance Act of 1980,

    [[Page 110 STAT. 2267]]

    for Cuban and Haitian entrants as defined in section 501(e)(2) of the
    Refugee Education Assistance Act of 1980.

    SEC. 404. <<NOTE: 8 USC 1614.>>  NOTIFICATION AND INFORMATION REPORTING.

        (a) Notification.--Each Federal agency that administers a program to
    which section 401, 402, or 403 applies shall, directly or through the
    States, post information and provide general notification to the public
    and to program recipients of the changes regarding eligibility for any
    such program pursuant to this subtitle.
        (b) Information Reporting Under Title IV of the Social Security
    Act.--Part A of title IV of the Social Security Act is amended by
    inserting the following new section after section 411:

    ``SEC. 411A. <<NOTE: 42 USC 611a.>>  STATE REQUIRED TO PROVIDE CERTAIN
                INFORMATION.

        ``Each State to which a grant is made under section 403 shall, at
    least 4 times annually and upon request of the Immigration and
    Naturalization Service, furnish the Immigration and Naturalization
    Service with the name and address of, and other identifying information
    on, any individual who the State knows is unlawfully in the United
    States.''.
        (c) SSI.--Section 1631(e) of such Act (42 U.S.C. 1383(e)) is
    amended--
                (1) by redesignating the paragraphs (6) and (7) inserted by
            sections 206(d)(2) and 206(f)(1) of the Social Security
            Independence and Programs Improvement Act of 1994 (Public Law
            103-296; 108 Stat. 1514, 1515) as paragraphs (7) and (8),
            respectively; and
                (2) by adding at the end the following new paragraph:

        ``(9) Notwithstanding any other provision of law, the Commissioner
    shall, at least 4 times annually and upon request of the Immigration and
    Naturalization Service (hereafter in this paragraph referred to as the
    `Service'), furnish the Service with the name and address of, and other
    identifying information on, any individual who the Commissioner knows is
    unlawfully in the United States, and shall ensure that each agreement
    entered into under section 1616(a) with a State provides that the State
    shall furnish such information at such times with respect to any
    individual who the State knows is unlawfully in the United States.''.
        (d) Information Reporting for Housing Programs.--Title I of the
    United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is amended by
    adding at the end the following new section:

    ``SEC. 27. <<NOTE: 42 USC 1437y.>>  PROVISION OF INFORMATION TO LAW
                ENFORCEMENT AND OTHER AGENCIES.

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

    [[Page 110 STAT. 2268]]

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

    SEC. 411. <<NOTE: 8 USC 1621.>>  ALIENS WHO ARE NOT QUALIFIED ALIENS OR
                NONIMMIGRANTS INELIGIBLE FOR STATE AND LOCAL PUBLIC
                BENEFITS.

        (a) In General.--Notwithstanding any other provision of law and
    except as provided in subsections (b) and (d), an alien who is not--
                (1) a qualified alien (as defined in section 431),
                (2) a nonimmigrant under the Immigration and Nationality
            Act, or
                (3) an alien who is paroled into the United States under
            section 212(d)(5) of such Act for less than one year,

    is not eligible for any State or local public benefit (as defined in
    subsection (c)).
        (b) Exceptions.--Subsection (a) shall not apply with respect to the
    following State or local public benefits:
                (1) Assistance for health care items and services that are
            necessary for the treatment of an emergency medical condition
            (as defined in section 1903(v)(3) of the Social Security Act) of
            the alien involved and are not related to an organ transplant
            procedure.
                (2) Short-term, non-cash, in-kind emergency disaster relief.
                (3) Public health assistance for immunizations with respect
            to immunizable diseases and for testing and treatment of
            symptoms of communicable diseases whether or not such symptoms
            are caused by a communicable disease.
                (4) Programs, services, or assistance (such as soup
            kitchens, crisis counseling and intervention, and short-term
            shelter) specified by the Attorney General, in the Attorney
            General's sole and unreviewable discretion after consultation
            with appropriate Federal agencies and departments, which (A)
            deliver in-kind services at the community level, including
            through public or private nonprofit agencies; (B) do not
            condition the provision of assistance, the amount of assistance
            provided, or the cost of assistance provided on the individual
            recipient's income or resources; and (C) are necessary for the
            protection of life or safety.

        (c) State or Local Public Benefit Defined.--
                (1) Except as provided in paragraphs (2) and (3), for
            purposes of this subtitle the term ``State or local public
            benefit'' means--
                        (A) any grant, contract, loan, professional license,
                    or commercial license provided by an agency of a
                    State or local government or by appropriated funds of a
                    State or local government; and
                        (B) any retirement, welfare, health, disability,
                    public or assisted housing, postsecondary education,
                    food assistance, unemployment benefit, or any other
                    similar benefit for which payments or assistance are
                    provided to an individual, household, or family
                    eligibility unit by an agency of a State or local
                    government or by appropriated funds of a State or local
                    government.
                (2) Such term shall not apply--

    [[Page 110 STAT. 2269]]

                        (A) to any contract, professional license, or
                    commercial license for a nonimmigrant whose visa for
                    entry is related to such employment in the United
                    States; or
                        (B) with respect to benefits for an alien who as a
                    work authorized nonimmigrant or as an alien lawfully
                    admitted for permanent residence under the Immigration
                    and Nationality Act qualified for such benefits and for
                    whom the United States under reciprocal treaty
                    agreements is required to pay benefits, as determined by
                    the Secretary of State, after consultation with the
                    Attorney General.
                (3) Such term does not include any Federal public benefit
            under section 4001(c).

        (d) State Authority to Provide for Eligibility of Illegal Aliens for
    State and Local Public Benefits.--A State may provide that an alien who
    is not lawfully present in the United States is eligible for any State
    or local public benefit for which such alien would otherwise be
    ineligible under subsection (a) only through the enactment of a State
    law after the date of the enactment of this Act which affirmatively
    provides for such eligibility.

    SEC. 412. <<NOTE: 8 USC 1622.>>  STATE AUTHORITY TO LIMIT ELIGIBILITY OF
                QUALIFIED ALIENS FOR STATE PUBLIC BENEFITS.

        (a) In General.--Notwithstanding any other provision of law and
    except as provided in subsection (b), a State is authorized to determine
    the eligibility for any State public benefits of an alien who is a
    qualified alien (as defined in section 431), a nonimmigrant under the
    Immigration and Nationality Act, or an alien who is paroled into the
    United States under section 212(d)(5) of such Act for less than one
    year.
        (b) Exceptions.--Qualified aliens under this subsection shall be
    eligible for any State public benefits.
                (1) Time-limited exception for refugees and asylees.--
                        (A) An alien who is admitted to the United States as
                    a refugee under section 207 of the Immigration and
                    Nationality Act until 5 years after the date of an
                    alien's entry into the United States.
                        (B) An alien who is granted asylum under section 208
                    of such Act until 5 years after the date of such grant
                    of asylum.
                        (C) An alien whose deportation is being withheld
                    under section 243(h) of such Act until 5 years after
                    such with-
                    holding.
                (2) Certain permanent resident aliens.--An alien who--
                        (A) is lawfully admitted to the United States for
                    permanent residence under the Immigration and
                    Nationality
                    Act; and
                        (B)(i) has worked 40 qualifying quarters of coverage
                    as defined under title II of the Social Security Act or
                    can be credited with such qualifying quarters as
                    provided under section 435, and (ii) in the case of any
                    such qualifying quarter creditable for any period
                    beginning after December 31, 1996, did not receive any
                    Federal means-tested public benefit (as provided under
                    section 403) during any such period.
                (3) Veteran and active duty exception.--An alien who is
            lawfully residing in any State and is--

    [[Page 110 STAT. 2270]]

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

           Subtitle C--Attribution of Income and Affidavits of Support

    SEC. 421. <<NOTE: 8 USC 1631.>>  FEDERAL ATTRIBUTION OF SPONSOR'S INCOME
                AND RESOURCES TO ALIEN.

        (a) In General.--Notwithstanding any other provision of law, in
    determining the eligibility and the amount of benefits of an alien for
    any Federal means-tested public benefits program (as provided under
    section 403), the income and resources of the alien shall be deemed to
    include the following:
                (1) The income and resources of any person who executed an
            affidavit of support pursuant to section 213A of the Immigration
            and Nationality Act (as added by section 423) on behalf of such
            alien.
                (2) The income and resources of the spouse (if any) of the
            person.

        (b) Duration of Attribution Period.--Subsection (a) shall apply with
    respect to an alien until such time as the alien--
                (1) achieves United States citizenship through
            naturalization pursuant to chapter 2 of title III of the
            Immigration and Nationality Act; or
                (2)(A) has worked 40 qualifying quarters of coverage as
            defined under title II of the Social Security Act or can be
            credited with such qualifying quarters as provided under section
            435, and (B) in the case of any such qualifying quarter
            creditable for any period beginning after December 31, 1996, did
            not receive any Federal means-tested public benefit (as provided
            under section 403) during any such period.

        (c) Review of Income and Resources of Alien Upon Reapplication.--
    Whenever an alien is required to reapply for benefits under any Federal
    means-tested public benefits program, the applicable agency shall review
    the income and resources attributed to the alien under subsection (a).
        (d) Application.--
                (1) If on the date of the enactment of this Act, a Federal
            means-tested public benefits program attributes a sponsor's
            income and resources to an alien in determining the alien's
            eligibility and the amount of benefits for an alien, this
            section shall apply to any such determination beginning on the
            day after the date of the enactment of this Act.
                (2) If on the date of the enactment of this Act, a Federal
            means-tested public benefits program does not attribute a
            sponsor's income and resources to an alien in determining the

    [[Page 110 STAT. 2271]]

            alien's eligibility and the amount of benefits for an alien,
            this section shall apply to any such determination beginning 180
            days after the date of the enactment of this Act.

    SEC. 422. <<NOTE: 8 USC 1632.>>  AUTHORITY FOR STATES TO PROVIDE FOR
                ATTRIBUTION OF SPONSORS INCOME AND RESOURCES TO THE ALIEN
                WITH RESPECT TO STATE PROGRAMS.

        (a) Optional Application to State Programs.--Except as provided in
    subsection (b), in determining the eligibility and the amount of
    benefits of an alien for any State public benefits (as defined in
    section 412(c)), the State or political subdivision that offers the
    benefits is authorized to provide that the income and resources of the
    alien shall be deemed to include--
                (1) the income and resources of any individual who executed
            an affidavit of support pursuant to section 213A of the
            Immigration and Nationality Act (as added by section 423) on
            behalf of such alien, and
                (2) the income and resources of the spouse (if any) of the
            individual.

        (b) Exceptions.--Subsection (a) shall not apply with respect to the
    following State public benefits:
                (1) Assistance described in section 411(b)(1).
                (2) Short-term, non-cash, in-kind emergency disaster relief.
                (3) Programs comparable to assistance or benefits under the
            National School Lunch Act.
                (4) Programs comparable to assistance or benefits under the
            Child Nutrition Act of 1966.
                (5) Public health assistance for immunizations with respect
            to immunizable diseases and for testing and treatment of
            symptoms of communicable diseases whether or not such symptoms
            are caused by a communicable disease.
                (6) Payments for foster care and adoption assistance.
                (7) Programs, services, or assistance (such as soup
            kitchens, crisis counseling and intervention, and short-term
            shelter) specified by the Attorney General of a State, after
            consultation with appropriate agencies and departments, which
            (A) deliver in-kind services at the community level, including
            through public or private nonprofit agencies; (B) do not
            condition the provision of assistance, the amount of assistance
            provided, or
            the cost of assistance provided on the individual recipient's
            income or resources; and (C) are necessary for the protection of
            life or safety.

    SEC. 423. REQUIREMENTS FOR SPONSOR'S AFFIDAVIT OF SUPPORT.

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

                ``requirements for sponsor's affidavit of support

        ``Sec. 213A. <<NOTE: 8 USC 1183a.>>  (a) Enforceability.--(1) No
    affidavit of support may be accepted by the Attorney General or by any
    consular officer to establish that an alien is not excludable as a
    public charge under section 212(a)(4) unless such affidavit is executed
    as a
    contract--
                ``(A) which is legally enforceable against the sponsor by
            the sponsored alien, the Federal Government, and by any State
            (or any political subdivision of such State) which provides any

    [[Page 110 STAT. 2272]]

            means-tested public benefits program, but not later than 10
            years after the alien last receives any such benefit;
                ``(B) in which the sponsor agrees to financially support the
            alien, so that the alien will not become a public
            charge; and
                ``(C) in which the sponsor agrees to submit to the
            jurisdiction of any Federal or State court for the purpose of
            actions brought under subsection (e)(2).

        ``(2) A contract under paragraph (1) shall be enforceable with
    respect to benefits provided to the alien until such time as the alien
    achieves United States citizenship through naturalization pursuant to
    chapter 2 of title III.
        ``(b) Forms.--Not later than 90 days after the date of enactment of
    this section, the Attorney General, in consultation with the Secretary
    of State and the Secretary of Health and Human Services, shall formulate
    an affidavit of support consistent with the provisions of this section.
        ``(c) Remedies.--Remedies available to enforce an affidavit of
    support under this section include any or all of the remedies described
    in section 3201, 3203, 3204, or 3205 of title 28, United States Code, as
    well as an order for specific performance and payment of legal fees and
    other costs of collection, and include corresponding remedies available
    under State law. A Federal agency may seek to collect amounts owed under
    this section in accordance with the provisions of subchapter II of
    chapter 37 of title 31, United States Code.
        ``(d) Notification of Change of Address.--
                ``(1) In general.--The sponsor shall notify the Attorney
            General and the State in which the sponsored alien is currently
            resident within 30 days of any change of address of the sponsor
            during the period specified in subsection (a)(2).
                ``(2) Penalty.--Any person subject to the requirement of
            paragraph (1) who fails to satisfy such requirement shall be
            subject to a civil penalty of--
                        ``(A) not less than $250 or more than $2,000, or
                        ``(B) if such failure occurs with knowledge that the
                    alien has received any means-tested public benefit, not
                    less than $2,000 or more than $5,000.

        ``(e) Reimbursement of Government Expenses.--(1)(A) Upon
    notification that a sponsored alien has received any benefit under any
    means-tested public benefits program, the appropriate Federal, State, or
    local official shall request reimbursement by the sponsor in the amount
    of such assistance.
        ``(B) The Attorney General, in consultation with the Secretary of
    Health and Human Services, shall prescribe such regulations as may be
    necessary to carry out subparagraph (A).
        ``(2) If within 45 days after requesting reimbursement, the
    appropriate Federal, State, or local agency has not received a response
    from the sponsor indicating a willingness to commence payments, an
    action may be brought against the sponsor pursuant to the affidavit of
    support.
        ``(3) If the sponsor fails to abide by the repayment terms
    established by such agency, the agency may, within 60 days of such
    failure, bring an action against the sponsor pursuant to the affidavit
    of support.

    [[Page 110 STAT. 2273]]

        ``(4) No cause of action may be brought under this subsection later
    than 10 years after the alien last received any benefit under any means-
    tested public benefits program.
        ``(5) If, pursuant to the terms of this subsection, a Federal,
    State, or local agency requests reimbursement from the sponsor in the
    amount of assistance provided, or brings an action against the sponsor
    pursuant to the affidavit of support, the appropriate agency may appoint
    or hire an individual or other person to act on behalf of such agency
    acting under the authority of law for purposes of collecting any moneys
    owed. Nothing in this subsection shall preclude any appropriate Federal,
    State, or local agency from directly requesting reimbursement from a
    sponsor for the amount of assistance provided, or from bringing an
    action against a sponsor pursuant to an affidavit of support.
        ``(f) Definitions.--For the purposes of this section--
                ``(1) Sponsor.--The term `sponsor' means an indi-
            vidual who--
                        ``(A) is a citizen or national of the United States
                    or an alien who is lawfully admitted to the United
                    States for permanent residence;
                        ``(B) is 18 years of age or over;
                        ``(C) is domiciled in any of the 50 States or the
                    District of Columbia; and
                        ``(D) is the person petitioning for the admission of
                    the alien under section 204.''.

        (b) Clerical Amendment.--The table of contents of such Act is
    amended by inserting after the item relating to section 213 the
    following:

    ``Sec. 213A. Requirements for sponsor's affidavit of support.''.

        (c) Effective Date <<NOTE: 8 USC 1138a note.>> .--Subsection (a) of
    section 213A of the Immigration and Nationality Act, as inserted by
    subsection (a) of this section, shall apply to affidavits of support
    executed on or after a date specified by the Attorney General, which
    date shall be not earlier than 60 days (and not later than 90 days)
    after the date the Attorney General formulates the form for such
    affidavits under subsection (b) of such section.

        (d) Benefits Not Subject to Reimbursement <<NOTE: 8 USC 1138a
    note.>> .--Requirements for reimbursement by a sponsor for benefits
    provided to a sponsored alien pursuant to an affidavit of support under
    section 213A of the Immigration and Nationality Act shall not apply with
    respect to the following:
                (1) Medical assistance described in section 401(b)(1)(A) or
            assistance described in section 411(b)(1).
                (2) Short-term, non-cash, in-kind emergency disaster relief.
                (3) Assistance or benefits under the National School
            Lunch Act.
                (4) Assistance or benefits under the Child Nutrition Act of
            1966.
                (5) Public health assistance for immunizations (not
            including any assistance under title XIX of the Social Security
            Act) with respect to immunizable diseases and for testing and
            treatment of symptoms of communicable diseases whether or not
            such symptoms are caused by a communicable disease.
                (6) Payments for foster care and adoption assistance under
            parts B and E of title IV of the Social Security Act for a
            parent or a child, but only if the foster or adoptive parent

    [[Page 110 STAT. 2274]]

            (or parents) of such child is a qualified alien (as defined in
            section 431).
                (7) Programs, services, or assistance (such as soup
            kitchens, crisis counseling and intervention, and short-term
            shelter) specified by the Attorney General, in the Attorney
            General's sole and unreviewable discretion after consultation
            with appropriate Federal agencies and departments, which (A)
            deliver in-kind services at the community level, including
            through public or private nonprofit agencies; (B) do not
            condition the provision of assistance, the amount of assistance
            provided, or
            the cost of assistance provided on the individual recipient's
            income or resources; and (C) are necessary for the protection of
            life or safety.
                (8) Programs of student assistance under titles IV, V, IX,
            and X of the Higher Education Act of 1965, and titles III, VII,
            and VIII of the Public Health Service Act.
                (9) Benefits under the Head Start Act.
                (10) Means-tested programs under the Elementary and
            Secondary Education Act of 1965.
                (11) Benefits under the Job Training Partnership Act.

                         Subtitle D--General Provisions

    SEC. 431. <<NOTE: 8 USC 1641.>>  DEFINITIONS.

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

    SEC. 432. <<NOTE: 8 USC 1642.>>  VERIFICATION OF ELIGIBILITY FOR FEDERAL
                PUBLIC
                BENEFITS.

        (a) In General.--Not later than 18 months after the date of the
    enactment of this Act, the Attorney General of the United States, after
    consultation with the Secretary of Health and Human Services, shall
    promulgate regulations requiring verification that a person applying for
    a Federal public benefit (as defined in section 401(c)), to which the
    limitation under section 401 applies, is a qualified alien and is
    eligible to receive such benefit. Such regulations shall, to the extent
    feasible, require that information requested and exchanged be similar in
    form and manner to information requested and exchanged under section
    1137 of the Social Security Act.

    [[Page 110 STAT. 2275]]

        (b) State Compliance.--Not later than 24 months after the date the
    regulations described in subsection (a) are adopted, a State that
    administers a program that provides a Federal public benefit shall have
    in effect a verification system that complies with the regulations.
        (c) Authorization of Appropriations.--There are authorized to be
    appropriated such sums as may be necessary to carry out the purpose of
    this section.

    SEC. 433. <<NOTE: 8 USC 1643.>>  STATUTORY CONSTRUCTION.

        (a) Limitation.--
                (1) Nothing in this title may be construed as an entitlement
            or a determination of an individual's eligibility or fulfillment
            of the requisite requirements for any Federal, State, or local
            governmental program, assistance, or benefits. For purposes of
            this title, eligibility relates only to the general issue of
            eligibility or ineligibility on the basis of alienage.
                (2) Nothing in this title may be construed as addressing
            alien eligibility for a basic public education as determined by
            the Supreme Court of the United States under Plyler v. Doe (457
            U.S. 202)(1982).

        (b) Not Applicable to Foreign Assistance.--This title does not apply
    to any Federal, State, or local governmental program, assistance, or
    benefits provided to an alien under any program of foreign assistance as
    determined by the Secretary of State in consultation with the Attorney
    General.
        (c) Severability.--If any provision of this title or the application
    of such provision to any person or circumstance is held to be
    unconstitutional, the remainder of this title and the application of the
    provisions of such to any person or circumstance shall not be affected
    thereby.

    SEC. 434. <<NOTE: 8 USC 1644.>>  COMMUNICATION BETWEEN STATE AND LOCAL
                GOVERNMENT AGENCIES AND THE IMMIGRATION AND
                NATURALIZATION SERVICE.

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

    SEC. 435. <<NOTE: 8 USC 1645.>>  QUALIFYING QUARTERS.

        For purposes of this title, in determining the number of qualifying
    quarters of coverage under title II of the Social Security Act an alien
    shall be credited with--
                (1) all of the qualifying quarters of coverage as defined
            under title II of the Social Security Act worked by a parent of
            such alien while the alien was under age 18, and
                (2) all of the qualifying quarters worked by a spouse of
            such alien during their marriage and the alien remains married
            to such spouse or such spouse is deceased.

    No such qualifying quarter of coverage that is creditable under title II
    of the Social Security Act for any period beginning after December 31,
    1996, may be credited to an alien under paragraph (1) or (2) if the
    parent or spouse (as the case may be) of such alien received any Federal
    means-tested public benefit (as provided

    [[Page 110 STAT. 2276]]

    under section 403) during the period for which such qualifying quarter
    of coverage is so credited.

         Subtitle E--Conforming Amendments Relating to Assisted Housing

    SEC. 441. CONFORMING AMENDMENTS RELATING TO ASSISTED
                HOUSING.

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

        ``(h) For purposes of this section, the term `applicable Secretary'
    means--
                ``(1) the Secretary of Housing and Urban Development, with
            respect to financial assistance administered by such Secretary
            and financial assistance under subtitle A of title III of the
            Cranston-Gonzalez National Affordable Housing Act; and
                ``(2) the Secretary of Agriculture, with respect to
            financial assistance administered by such Secretary.''.

        (b) Conforming Amendments.--Section 501(h) of the Housing Act of
    1949 (42 U.S.C. 1471(h)) is amended--
                (1) by striking ``(1)'';
                (2) by striking ``by the Secretary of Housing and Urban
            Development''; and
                (3) by striking paragraph (2).

        Subtitle F--Earned Income Credit Denied to Unauthorized Employees

    SEC. 451. EARNED INCOME CREDIT DENIED TO INDIVIDUALS NOT AUTHORIZED TO
                BE EMPLOYED IN THE UNITED STATES.

        (a) In General.--Section 32(c)(1) of the Internal Revenue Code of
    1986 (relating to individuals eligible to claim the earned income
    credit) is amended by adding at the end the following new subparagraph:
                        ``(F) Identification number requirement.--The term
                    `eligible individual' does not include any individual
                    who does not include on the return of tax for the
                    taxable year--
                              ``(i) such individual's taxpayer
                          identification
                          number, and

    [[Page 110 STAT. 2277]]

                              ``(ii) if the individual is married (within
                          the meaning of section 7703), the taxpayer
                          identification number of such individual's
                          spouse.''.

        (b) Special Identification Number.--Section 32 of such Code is
    amended by adding at the end the following new subsection:
        ``(l) Identification Numbers.--Solely for purposes of subsections
    (c)(1)(F) and (c)(3)(D), a taxpayer identification number means a social
    security number issued to an individual by the Social Security
    Administration (other than a social security number issued pursuant to
    clause (II) (or that portion of clause (III) that relates to clause
    (II)) of section 205(c)(2)(B)(i) of the Social Security Act).''.
        (c) Extension of Procedures Applicable to Mathematical or Clerical
    Errors.--Section 6213(g)(2) of such Code (relating to the definition of
    mathematical or clerical errors) is amended by striking ``and'' at the
    end of subparagraph (D), by striking the period at the end of
    subparagraph (E) and inserting a comma, and by inserting after
    subparagraph (E) the following new subparagraphs:
                        ``(F) an omission of a correct taxpayer
                    identification number required under section 32
                    (relating to the earned income credit) to be included on
                    a return, and
                        ``(G) an entry on a return claiming the credit under
                    section 32 with respect to net earnings from self-
                    employment described in section 32(c)(2)(A) to the
                    extent the tax imposed by section 1401 (relating to
                    self-employment tax) on such net earnings has not been
                    paid.''.

        (d) Effective Date <<NOTE: 26 USC 32 note.>> .--The amendments made
    by this section shall apply with respect to returns the due date for
    which (without regard to extensions) is more than 30 days after the date
    of the enactment of this Act.

                            TITLE V--CHILD PROTECTION

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

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

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

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

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

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

    ``SEC. 429A. <<NOTE: 42 USC 628b.>>  NATIONAL RANDOM SAMPLE STUDY OF
                CHILD WELFARE.

        ``(a) In General.--The Secretary shall conduct a national study
    based on random samples of children who are at risk of child abuse or
    neglect, or are determined by States to have been abused or neglected.

    [[Page 110 STAT. 2278]]

        ``(b) Requirements.--The study required by subsection (a) shall--
                ``(1) have a longitudinal component; and
                ``(2) yield data reliable at the State level for as many
            States as the Secretary determines is feasible.

        ``(c) Preferred Contents.--In conducting the study required by
    subsection (a), the Secretary should--
                ``(1) carefully consider selecting the sample from cases of
            confirmed abuse or neglect; and
                ``(2) follow each case for several years while obtaining
            information on, among other things--
                        ``(A) the type of abuse or neglect involved;
                        ``(B) the frequency of contact with State or local
                    agencies;
                        ``(C) whether the child involved has been separated
                    from the family, and, if so, under what circumstances;
                        ``(D) the number, type, and characteristics of out-
                    of-home placements of the child; and
                        ``(E) the average duration of each placement.

        ``(d) Reports.--
                ``(1) In general.--From time to time, the Secretary shall
            prepare reports summarizing the results of the study required by
            subsection (a).
                ``(2) Availability.--The Secretary shall make available to
            the public any report prepared under paragraph (1), in writing
            or in the form of an electronic data tape.
                ``(3) Authority to charge fee.--The Secretary may charge and
            collect a fee for the furnishing of reports under para-
            graph (2).

        ``(e) Appropriation.--Out of any money in the Treasury of the United
    States not otherwise appropriated, there are appropriated to the
    Secretary for each of fiscal years 1996 through 2002 $6,000,000 to carry
    out this section.''.

    SEC. 504. REDESIGNATION OF SECTION 1123.

        The Social Security Act is amended by redesignating sec-
    tion 1123, the second place it appears (42 U.S.C. 1320a-1a), <<NOTE: 42
    USC 1320a-2a.>>  as section 1123A.

    SEC. 505. KINSHIP CARE.

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

      TITLE VI--CHILD CARE <<NOTE: Child Care and Development Block Grant
    Amendments of 1996.>>

    SEC. 601. <<NOTE: 42 USC 9801 note.>>  SHORT TITLE AND REFERENCES.

        (a) Short Title.--This title may be cited as the ``Child Care and
    Development Block Grant Amendments of 1996''.

    [[Page 110 STAT. 2279]]

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

    SEC. 602. GOALS.

        Section 658A (42 U.S.C. 9801 note) is amended--
                (1) in the section heading by inserting ``and goals'' after
            ``title'';
                (2) <<NOTE: 42 USC 9801 note.>>  by inserting ``(a) Short
            Title.--'' before ``This''; and
                (3) <<NOTE: 42 USC 9858 note.>>  by adding at the end the
            following:

        ``(b) Goals.--The goals of this subchapter are--
                ``(1) to allow each State maximum flexibility in developing
            child care programs and policies that best suit the needs of
            children and parents within such State;
                ``(2) to promote parental choice to empower working parents
            to make their own decisions on the child care that best suits
            their family's needs;
                ``(3) to encourage States to provide consumer education
            information to help parents make informed choices about child
            care;
                ``(4) to assist States to provide child care to parents
            trying to achieve independence from public assistance; and
                ``(5) to assist States in implementing the health, safety,
            licensing, and registration standards established in State
            regulations.''.

    SEC. 603. AUTHORIZATION OF APPROPRIATIONS AND ENTITLEMENT AUTHORITY.

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

    ``SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

        ``There is authorized to be appropriated to carry out this
    subchapter $1,000,000,000 for each of the fiscal years 1996 through
    2002.''.
        (b) Social Security Act.--Part A of title IV of the Social Security
    Act (42 U.S.C. 601-617) is amended by adding at the end the following
    new section:

    ``SEC. 418. <<NOTE: 42 USC 618.>>  FUNDING FOR CHILD CARE.

        ``(a) General Child Care Entitlement.--
                ``(1) General entitlement.--Subject to the amount
            appropriated under paragraph (3), each State shall, for the
            purpose of providing child care assistance, be entitled to
            payments under a grant under this subsection for a fiscal year
            in an amount equal to--
                        ``(A) the sum of the total amount required to be
                    paid to the State under section 403 for fiscal year 1994
                    or 1995 (whichever is greater) with respect to amounts
                    expended for child care under section--
                              ``(i) 402(g) of this Act (as such section was
                          in effect before October 1, 1995); and
                              ``(ii) 402(i) of this Act (as so in effect);
                          or

    [[Page 110 STAT. 2280]]

                        ``(B) the average of the total amounts required to
                    be paid to the State for fiscal years 1992 through 1994
                    under the sections referred to in subparagraph (A);
            whichever is greater.
                ``(2) Remainder.--
                        ``(A) Grants.--The Secretary shall use any amounts
                    appropriated for a fiscal year under paragraph (3), and
                    remaining after the reservation described in paragraph
                    (4) and after grants are awarded under paragraph (1), to
                    make grants to States under this paragraph.
                        ``(B) Amount.--Subject to subparagraph (C), the
                    amount of a grant awarded to a State for a fiscal year
                    under this paragraph shall be based on the formula used
                    for determining the amount of Federal payments to the
                    State under section 403(n) (as such section was in
                    effect before October 1, 1995).
                        ``(C) Matching requirement.--The Secretary shall pay
                    to each eligible State in a fiscal year an amount, under
                    a grant under subparagraph (A), equal to the Federal
                    medical assistance percentage for such State for fiscal
                    year 1995 (as defined in section 1905(b)) of so much of
                    the expenditures by the State for child care in such
                    year as exceed the State set-aside for such State under
                    paragraph (1)(A) for such year and the amount of State
                    expenditures in fiscal year 1994 or 1995 (whichever is
                    greater) that equal the non-Federal share for the
                    programs described in subparagraph (A) of paragraph (1).
                        ``(D) Redistribution.--
                              ``(i) In general.--With respect to any fiscal
                          year, if the Secretary determines (in accordance
                          with clause (ii)) that amounts under any grant
                          awarded to a State under this paragraph for such
                          fiscal year will not be used by such State during
                          such fiscal year for carrying out the purpose for
                          which the grant is made, the Secretary shall make
                          such amounts available in the subsequent fiscal
                          year for carrying out such purpose to one or more
                          States which apply for such funds to the extent
                          the Secretary determines that such States will be
                          able to use such additional amounts for carrying
                          out such purpose. Such available amounts shall be
                          redistributed to a State pursuant to section
                          403(n) (as such section was in effect before
                          October 1, 1995) by substituting `the number of
                          children residing in all States applying for such
                          funds' for `the number of children residing in the
                          United States in the second preceding fiscal
                          year'.
                              ``(ii) Time of determination and
                          distribution.--The determination of the Secretary
                          under clause (i) for a fiscal year shall be made
                          not later than the end of the first quarter of the
                          subsequent fiscal year. The redistribution of
                          amounts under clause (i) shall be made as close as
                          practicable to the date on which such
                          determination is made. Any amount made available
                          to a State from an appropriation for a fiscal year
                          in accordance with this subparagraph shall, for
                          purposes of this part, be regarded as part of such
                          State's

    [[Page 110 STAT. 2281]]

                          payment (as determined under this subsection) for
                          the fiscal year in which the redistribution is
                          made.
                ``(3) Appropriation.--For grants under this section, there
            are appropriated--
                        ``(A) $1,967,000,000 for fiscal year 1997;
                        ``(B) $2,067,000,000 for fiscal year 1998;
                        ``(C) $2,167,000,000 for fiscal year 1999;
                        ``(D) $2,367,000,000 for fiscal year 2000;
                        ``(E) $2,567,000,000 for fiscal year 2001; and
                        ``(F) $2,717,000,000 for fiscal year 2002.
                ``(4) Indian tribes.--The Secretary shall reserve not less
            than 1 percent, and not more than 2 percent, of the aggregate
            amount appropriated to carry out this section in each fiscal
            year for payments to Indian tribes and tribal organizations.

        ``(b) Use of Funds.--
                ``(1) In general.--Amounts received by a State under this
            section shall only be used to provide child care assistance.
            Amounts received by a State under a grant under subsection
            (a)(1) shall be available for use by the State without fiscal
            year limitation.
                ``(2) Use for certain populations.--A State shall ensure
            that not less than 70 percent of the total amount of funds
            received by the State in a fiscal year under this section are
            used to provide child care assistance to families who are
            receiving assistance under a State program under this part,
            families who are attempting through work activities to
            transition off of such assistance program, and families who are
            at risk of becoming dependent on such assistance program.

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

    SEC. 604. LEAD AGENCY.

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

    SEC. 605. APPLICATION AND PLAN.

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

    [[Page 110 STAT. 2282]]

                                        (I) in clause (i) by striking ``,
                                    other than through assistance provided
                                    under paragraph (3)(C),''; and
                                        (II) by striking ``except'' and all
                                    that follows through ``1992'', and
                                    inserting ``and provide a detailed
                                    description of the procedures the State
                                    will implement to carry out the
                                    requirements of this subparagraph'';
                              (ii) in subparagraph (B)--
                                        (I) by striking ``Provide
                                    assurances'' and inserting ``Certify'';
                                    and
                                        (II) by inserting before the period
                                    at the end ``and provide a detailed
                                    description of such procedures'';
                              (iii) in subparagraph (C)--
                                        (I) by striking ``Provide
                                    assurances'' and inserting ``Certify'';
                                    and
                                        (II) by inserting before the period
                                    at the end ``and provide a detailed
                                    description of how such record is
                                    maintained and is made available'';
                              (iv) by amending subparagraph (D) to read as
                          follows:
                        ``(D) Consumer education information.--Certify that
                    the State will collect and disseminate to parents of
                    eligible children and the general public, consumer
                    education information that will promote informed child
                    care choices.'';
                              (v) in subparagraph (E), to read as follows:
                        ``(E) Compliance with state licensing
                    requirements.--
                              ``(i) In general.--Certify that the State has
                          in effect licensing requirements applicable to
                          child care services provided within the State, and
                          provide a detailed description of such
                          requirements and of how such requirements are
                          effectively enforced. Nothing in the preceding
                          sentence shall be construed to require that
                          licensing requirements be applied to specific
                          types of providers of child care services.
                              ``(ii) Indian tribes and tribal
                          organizations.--In lieu of any licensing and
                          regulatory requirements applicable under State and
                          local law, the Secretary, in consultation with
                          Indian tribes and tribal organizations, shall
                          develop minimum child care standards (that
                          appropriately reflect tribal needs and available
                          resources) that shall be applicable to Indian
                          tribes and tribal organization receiving
                          assistance under this subchapter.'';
                              (vi) in subparagraph (F) by striking ``Provide
                          assurances'' and inserting ``Certify'';
                              (vii) in subparagraph (G) by striking
                          ``Provide assurances'' and inserting ``Certify'';
                          and
                              (viii) by striking subparagraphs (H), (I), and
                          (J) and inserting the following:
                        ``(H) Meeting the needs of certain populations.--
                    Demonstrate the manner in which the State will meet the
                    specific child care needs of families who are receiving
                    assistance under a State program under part A of title
                    IV of the Social Security Act, families who are
                    attempting

    [[Page 110 STAT. 2283]]

                    through work activities to transition off of such
                    assistance program, and families that are at risk of
                    becoming dependent on such assistance program.'';
                        (B) in paragraph (3)--
                              (i) in subparagraph (A), by striking ``(B) and
                          (C)'' and inserting ``(B) through (D)'';
                              (ii) in subparagraph (B)--
                                        (I) by striking ``.--Subject to the
                                    reservation contained in subparagraph
                                    (C), the'' and inserting ``and related
                                    activities.--The'';
                                        (II) in clause (i) by striking ``;
                                    and'' at the end and inserting a period;
                                        (III) by striking ``for--'' and all
                                    that follows through ``section
                                    658E(c)(2)(A)'' and inserting ``for
                                    child care services on a sliding fee
                                    scale basis, activities that improve the
                                    quality or availability of such
                                    services, and any other activity that
                                    the State deems appropriate to realize
                                    any of the goals specified in paragraphs
                                    (2) through (5) of section 658A(b)'';
                                    and
                                        (IV) by striking clause (ii);
                              (iii) by amending subparagraph (C) to read as
                          follows:
                        ``(C) Limitation on administrative costs.--Not more
                    than 5 percent of the aggregate amount of funds
                    available to the State to carry out this subchapter by a
                    State in each fiscal year may be expended for
                    administrative costs incurred by such State to carry out
                    all of its functions and duties under this subchapter.
                    As used in the preceding sentence, the term
                    `administrative costs' shall not include the costs of
                    providing direct services.''; and
                              (iv) by adding at the end thereof the
                          following:
                        ``(D) Assistance for certain families.--A State
                    shall ensure that a substantial portion of the amounts
                    available (after the State has complied with the
                    requirement of section 418(b)(2) of the Social Security
                    Act with respect to each of the fiscal years 1997
                    through 2002) to the State to carry out activities under
                    this subchapter in each fiscal year is used to provide
                    assistance to low-income working families other than
                    families described in paragraph (2)(H).''; and
                        (C) in paragraph (4)(A)--
                              (i) by striking ``provide assurances'' and
                          inserting ``certify'';
                              (ii) in the first sentence by inserting ``and
                          shall provide a summary of the facts relied on by
                          the State to determine that such rates are
                          sufficient to ensure such access'' before the
                          period; and
                              (iii) by striking the last sentence.

    SEC. 606. LIMITATION ON STATE ALLOTMENTS.

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

    SEC. 607. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.

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

    [[Page 110 STAT. 2284]]

    ``SEC. 658G. <<NOTE: 42 USC 9858e.>>  ACTIVITIES TO IMPROVE THE QUALITY
                OF CHILD CARE.

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

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

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

    SEC. 609. ADMINISTRATION AND ENFORCEMENT.

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

    SEC. 610. PAYMENTS.

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

    SEC. 611. ANNUAL REPORT AND AUDITS.

        Section 658K (42 U.S.C. 9858i) is amended--
                (1) in the section heading by striking ``annual report'' and
            inserting ``reports'';
                (2) in subsection (a), to read as follows:

        ``(a) Reports.--
                ``(1) Collection of information by states.--
                        ``(A) In general.--A State that receives funds to
                    carry out this subchapter shall collect the information
                    described in subparagraph (B) on a monthly basis.
                        ``(B) Required information.--The information
                    required under this subparagraph shall include, with
                    respect to a family unit receiving assistance under this
                    subchapter information concerning--
                              ``(i) family income;
                              ``(ii) county of residence;
                              ``(iii) the gender, race, and age of children
                          receiving such assistance;
                              ``(iv) whether the family includes only one
                          parent;
                              ``(v) the sources of family income, including
                          the amount obtained from (and separately
                          identified)--
                                        ``(I) employment, including self-
                                    employment;
                                        ``(II) cash or other assistance
                                    under part A of title IV of the Social
                                    Security Act;
                                        ``(III) housing assistance;

    [[Page 110 STAT. 2285]]

                                        ``(IV) assistance under the Food
                                    Stamp Act of 1977; and
                                        ``(V) other assistance programs;
                              ``(vi) the number of months the family has
                          received benefits;
                              ``(vii) the type of child care in which the
                          child was enrolled (such as family child care,
                          home care, or center-based child care);
                              ``(viii) whether the child care provider
                          involved was a relative;
                              ``(ix) the cost of child care for such
                          families; and
                              ``(x) the average hours per week of such care;
                    during the period for which such information is required
                    to be submitted.
                        ``(C) Submission to secretary.--A State described in
                    subparagraph (A) shall, on a quarterly basis, submit the
                    information required to be collected under subparagraph
                    (B) to the Secretary.
                        ``(D) Sampling.--The Secretary may disapprove the
                    information collected by a State under this paragraph if
                    the State uses sampling methods to collect such
                    information.
                ``(2) Biannual reports.--Not later than December 31, 1997,
            and every 6 months thereafter, a State described in paragraph
            (1)(A) shall prepare and submit to the Secretary a report that
            includes aggregate data concerning--
                        ``(A) the number of child care providers that
                    received funding under this subchapter as separately
                    identified based on the types of providers listed in
                    section 658P(5);
                        ``(B) the monthly cost of child care services, and
                    the portion of such cost that is paid for with
                    assistance provided under this subchapter, listed by the
                    type of child care services provided;
                        ``(C) the number of payments made by the State
                    through vouchers, contracts, cash, and disregards under
                    public benefit programs, listed by the type of child
                    care services provided;
                        ``(D) the manner in which consumer education
                    information was provided to parents and the number of
                    parents to whom such information was provided; and
                        ``(E) the total number (without duplication) of
                    children and families served under this subchapter;
            during the period for which such report is required to be sub-
            mitted.''; and
                (2) in subsection (b)--
                        (A) in paragraph (1) by striking ``a application''
                    and inserting ``an application'';
                        (B) in paragraph (2) by striking ``any agency
                    administering activities that receive'' and inserting
                    ``the State that receives''; and
                        (C) in paragraph (4) by striking ``entitles'' and
                    inserting ``entitled''.

    SEC. 612. REPORT BY THE SECRETARY.

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

    [[Page 110 STAT. 2286]]

                (3) by striking ``Education and Labor'' and inserting
            ``Economic and Educational Opportunities''.

    SEC. 613. ALLOTMENTS.

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

    [[Page 110 STAT. 2287]]

            tribes or organizations that have submitted applications under
            subsection (c) in accordance with their respective needs.''.

    SEC. 614. DEFINITIONS.

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

    SEC. 615. <<NOTE: 42 USC 9858 note.>>  EFFECTIVE DATE.

        (a) In General.--Except as provided in subsection (b), this title
    and the amendments made by this title shall take effect on October 1,
    1996.
        (b) Exception.--The amendment made by section 603(a) shall take
    effect on the date of enactment of this Act.

                       TITLE VII--CHILD NUTRITION PROGRAMS

                      Subtitle A--National School Lunch Act

    SEC. 701. STATE DISBURSEMENT TO SCHOOLS.

        (a) In General.--Section 8 of the National School Lunch Act (42
    U.S.C. 1757) is amended--
                (1) in the third sentence, by striking ``Nothing'' and all
            that follows through ``educational agency to'' and inserting
            ``The State educational agency may'';
                (2) by striking the fourth and fifth sentences;

    [[Page 110 STAT. 2288]]

                (3) by redesignating the first through seventh sentences, as
            amended by paragraph (2), as subsections (a) through (g),
            respectively;
                (4) in subsection (b), as redesignated by paragraph (3), by
            striking ``the preceding sentence'' and inserting ``subsection
            (a)''; and
                (5) in subsection (d), as redesignated by paragraph (3), by
            striking ``Such food costs'' and inserting ``Use of funds paid
            to States''.

        (b) Definition of Child.--Section 12(d) of the National School Lunch
    Act (42 U.S.C. 1760(d)) is amended by adding at the end the following:
                ``(9) Child.--
                        ``(A) In general.--The term `child' includes an
                    indi-
                    vidual, regardless of age, who--
                              ``(i) is determined by a State educational
                          agency, in accordance with regulations prescribed
                          by the Secretary, to have one or more mental or
                          physical disabilities; and
                              ``(ii) is attending any institution, as
                          defined in section 17(a), or any nonresidential
                          public or nonprofit private school of high school
                          grade or under, for the purpose of participating
                          in a school program established for individuals
                          with mental or physical dis-
                          abilities.
                        ``(B) Relationship to child and adult care food
                    program.--No institution that is not otherwise eligible
                    to participate in the program under section 17 shall be
                    considered eligible because of this paragraph.''.

    SEC. 702. NUTRITIONAL AND OTHER PROGRAM REQUIREMENTS.

        (a) Nutritional Standards.--Section 9(a) of the National School
    Lunch Act (42 U.S.C. 1758(a)) is amended--
                (1) in paragraph (2)--
                        (A) by striking ``(2)(A) Lunches'' and inserting
                    ``(2) Lunches'';
                        (B) by striking subparagraph (B); and
                        (C) by redesignating clauses (i) and (ii) as
                    subparagraphs (A) and (B), respectively;
                (2) by striking paragraph (3); and
                (3) by redesignating paragraph (4) as paragraph (3).

        (b) Utilization of Agricultural Commodities.--Section 9(c) of the
    National School Lunch Act (42 U.S.C. 1758(c)) is amended--
                (1) in the fifth sentence, by striking ``of the provisions
            of law referred to in the preceding sentence'' and inserting
            ``provision of law''; and
                (2) by striking the second, fourth, and sixth sentences.

        (c) Nutritional Information.--Section 9(f) of the National School
    Lunch Act (42 U.S.C. 1758(f)) is amended--
                (1) by striking paragraph (1);
                (2) by striking ``(2)'';
                (3) by redesignating subparagraphs (A) through (D) as
            paragraphs (1) through (4), respectively;
                (4) by striking paragraph (1), as redesignated by paragraph
            (3), and inserting the following:
                ``(1) Nutritional requirements.--Except as provided in
            paragraph (2), not later than the first day of the 1996-1997

    [[Page 110 STAT. 2289]]

            school year, schools that are participating in the school lunch
            or school breakfast program shall serve lunches and breakfasts
            under the program that--
                        ``(A) are consistent with the goals of the most
                    recent Dietary Guidelines for Americans published under
                    section 301 of the National Nutrition Monitoring and
                    Related Research Act of 1990 (7 U.S.C. 5341); and
                        ``(B) provide, on the average over each week, at
                    least--
                              ``(i) with respect to school lunches, \1/3\ of
                          the daily recommended dietary allowance
                          established by the Food and Nutrition Board of the
                          National Research Council of the National Academy
                          of Sciences; and
                              ``(ii) with respect to school breakfasts, \1/
                          4\ of the daily recommended dietary allowance
                          established by the Food and Nutrition Board of the
                          National Research Council of the National Academy
                          of Sciences.'';
                (5) in paragraph (3), as redesignated by paragraph (3)--
                        (A) by redesignating clauses (i) and (ii) as
                    subparagraphs (A) and (B), respectively; and
                        (B) in subparagraph (A), as so redesignated, by
                    redesignating subclauses (I) and (II) as clauses (i) and
                    (ii), respectively; and
                (6) in paragraph (4), as redesignated by paragraph (3)--
                        (A) by redesignating clauses (i) and (ii) as
                    subparagraphs (A) and (B), respectively;
                        (B) in subparagraph (A), as redesignated by
                    subparagraph (A), by redesignating subclauses (I) and
                    (II) as clauses (i) and (ii), respectively; and
                        (C) in subparagraph (A)(ii), as redesignated by
                    subparagraph (B), by striking ``subparagraph (C)'' and
                    inserting ``paragraph (3)''.

        (d) Use of Resources.--Section 9 of the National School Lunch Act
    (42 U.S.C. 1758) is amended by striking subsection (h).

    SEC. 703. FREE AND REDUCED PRICE POLICY STATEMENT.

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

    SEC. 704. SPECIAL ASSISTANCE.

        (a) Extension of Payment Period.--Section 11(a)(1)(D)(i) of the
    National School Lunch Act (42 U.S.C. 1759a(a)(1)(D)(i)) is amended by
    striking ``, on the date of enactment of this subparagraph,''.
        (b) Rounding Rule for Lunch, Breakfast, and Supplement Rates.--
                (1) In general.--The third sentence of section 11(a)(3)(B)
            of the National School Lunch Act (42 U.S.C. 1759a(a)(3)(B)) is
            amended by adding before the period at the end the following:

    [[Page 110 STAT. 2290]]

            ``, except that adjustments to payment rates for meals and
            supplements served to individuals not determined to be eligible
            for free or reduced price meals and supplements shall be
            computed to the nearest lower cent increment and based on the
            unrounded amount for the preceding 12-month period''.
                (2) Effective date <<NOTE: 42 USC 1759a note.>> .--The
            amendment made by paragraph (1) shall become effective on July
            1, 1997.

        (c) Applicability of Other Provisions.--Section 11 of the National
    School Lunch Act (42 U.S.C. 1759a) is amended--
                (1) by striking subsection (d);
                (2) in subsection (e)(2)--
                        (A) by striking ``The'' and inserting ``On request
                    of the Secretary, the''; and
                        (B) by striking ``each month''; and
                (3) by redesignating subsections (e) and (f), as so amended,
            as subsections (d) and (e), respectively.

    SEC. 705. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

        (a) Accounts and Records.--The second sentence of section 12(a) of
    the National School Lunch Act (42 U.S.C. 1760(a)) is amended by striking
    ``at all times be available'' and inserting ``be available at any
    reasonable time''.
        (b) Restriction on Requirements.--Section 12(c) of the National
    School Lunch Act (42 U.S.C. 1760(c)) is amended by striking ``neither
    the Secretary nor the State shall'' and inserting ``the Secretary shall
    not''.
        (c) Definitions.--Section 12(d) of the National School Lunch Act (42
    U.S.C. 1760(d)), as amended by section 701(b), is amended--
                (1) in paragraph (1), by striking ``the Trust Territory of
            the Pacific Islands'' and inserting ``the Commonwealth of the
            Northern Mariana Islands'';
                (2) by striking paragraphs (3) and (4); and
                (3) by redesignating paragraphs (1), (2), and (5) through
            (9) as paragraphs (6), (7), (3), (4), (2), (5), and (1),
            respectively, and rearranging the paragraphs so as to appear in
            numerical order.

        (d) Adjustments to National Average Payment Rates.--Section 12(f) of
    the National School Lunch Act (42 U.S.C. 1760(f)) is amended by striking
    ``the Trust Territory of the Pacific Islands,''.
        (e) Expedited Rulemaking.--Section 12(k) of the National School
    Lunch Act (42 U.S.C. 1760(k)) is amended--
                (1) by striking paragraphs (1), (2), and (5);
                (2) by redesignating paragraphs (3) and (4) as paragraphs
            (1) and (2), respectively; and
                (3) in paragraph (1), as redesignated by paragraph (2), by
            striking ``Guidelines'' and inserting ``guidelines contained in
            the most recent `Dietary Guidelines for Americans' that is
            published under section 301 of the National Nutrition Monitoring
            and Related Research Act of 1990 (7 U.S.C. 5341)''.

        (f) Waiver.--Section 12(l) of the National School Lunch Act (42
    U.S.C. 1760(l)) is amended--
                (1) in paragraph (2)(A)--
                        (A) in clause (iii), by adding ``and'' at the end;
                        (B) in clause (iv), by striking the semicolon at the
                    end and inserting a period; and
                        (C) by striking clauses (v) through (vii);
                (2) in paragraph (3)--

    [[Page 110 STAT. 2291]]

                        (A) in subparagraph (A), by striking ``(A)''; and
                        (B) by striking subparagraphs (B) through (D);
                (3) in paragraph (4)--
                        (A) in the matter preceding subparagraph (A), by
                    striking ``of any requirement relating'' and inserting
                    ``that increases Federal costs or that relates'';
                        (B) by striking subparagraph (D);
                        (C) by redesignating subparagraphs (E) through (N)
                    as subparagraphs (D) through (M), respectively; and
                        (D) in subparagraph (L), as redesignated by
                    subparagraph (C), by striking ``and'' at the end and
                    inserting ``or''; and
                (4) in paragraph (6)--
                        (A) by striking ``(A)(i)'' and all that follows
                    through ``(B)''; and
                        (B) by redesignating clauses (i) through (iv) as
                    subparagraphs (A) through (D), respectively.

    SEC. 706. SUMMER FOOD SERVICE PROGRAM FOR CHILDREN.

        (a) Establishment of Program.--Section 13(a) of the National School
    Lunch Act (42 U.S.C. 1761(a)) is amended--
                (1) in paragraph (1)--
                        (A) in the first sentence, by striking ``initiate,
                    maintain, and expand'' and inserting ``initiate and
                    maintain''; and
                        (B) in subparagraph (E) of the second sentence, by
                    striking ``the Trust Territory of the Pacific
                    Islands,''; and
                (2) in paragraph (7)(A), by striking ``Except as provided in
            subparagraph (C), private'' and inserting ``Private''.

        (b) Service Institutions.--Section 13(b) of the National School
    Lunch Act (42 U.S.C. 1761(b)) is amended by striking ``(b)(1)'' and all
    that follows through the end of paragraph (1) and inserting the
    following:
        ``(b) Service Institutions.--
                ``(1) Payments.--
                        ``(A) In general.--Except as otherwise provided in
                    this paragraph, payments to service institutions shall
                    equal the full cost of food service operations (which
                    cost shall include the costs of obtaining, preparing,
                    and serving food, but shall not include administrative
                    costs).
                        ``(B) Maximum amounts.--Subject to subparagraph (C),
                    payments to any institution under subparagraph (A) shall
                    not exceed--
                              ``(i) $1.97 for each lunch and supper served;
                              ``(ii) $1.13 for each breakfast served; and
                              ``(iii) 46 cents for each meal supplement
                          served.
                        ``(C) Adjustments.--Amounts specified in
                    subparagraph (B) shall be adjusted on January 1, 1997,
                    and each January 1 thereafter, to the nearest lower cent
                    increment to reflect changes for the 12-month period
                    ending the preceding November 30 in the series for food
                    away from home of the Consumer Price Index for All Urban
                    Con-
                    sumers published by the Bureau of Labor Statistics of
                    the Department of Labor. Each adjustment shall be based
                    on the unrounded adjustment for the prior 12-month
                    period.''.

    [[Page 110 STAT. 2292]]

        (c) Administration of Service Institutions.--Section 13(b)(2) of the
    National School Lunch Act (42 U.S.C. 1761(b)(2)) is
    amended--
                (1) in the first sentence, by striking ``four meals'' and
            inserting ``3 meals, or 2 meals and 1 supplement,''; and
                (2) by striking the second sentence.

        (d) Reimbursements.--Section 13(c)(2) of the National School Lunch
    Act (42 U.S.C. 1761(c)(2)) is amended--
                (1) by striking subparagraphs (A), (C), (D), and (E);
                (2) by striking ``(B)'';
                (3) by striking ``, and such higher education institu-
            tions,''; and
                (4) by striking ``without application'' and inserting ``on
            showing residence in areas in which poor economic conditions
            exist or on the basis of income eligibility statements for
            children enrolled in the program''.

        (e) Advance Program Payments.--Section 13(e)(1) of the National
    School Lunch Act (42 U.S.C. 1761(e)(1)) is amended--
                (1) by striking ``institution: Provided, That (A) the'' and
            inserting ``institution. The'';
                (2) by inserting ``(excluding a school)'' after ``any
            service institution''; and
                (3) by striking ``responsibilities, and (B) no'' and
            inserting ``responsibilities. No''.

        (f) Food Requirements.--Section 13(f) of the National School Lunch
    Act (42 U.S.C. 1761(f)) is amended--
                (1) by redesignating the first through seventh sentences as
            paragraphs (1) through (7), respectively;
                (2) by striking paragraph (3), as redesignated by para-
            graph (1);
                (3) in paragraph (4), as redesignated by paragraph (1), by
            striking ``the first sentence'' and inserting ``paragraph (1)'';
                (4) in subparagraph (B) of paragraph (6), as re-
            designated by paragraph (1), by striking ``that bacteria
            levels'' and all that follows through the period at the end and
            inserting ``conformance with standards set by local health
            authorities.''; and
                (5) by redesignating paragraphs (4) through (7), as
            redesignated by paragraph (1), as paragraphs (3) through (6),
            respectively.

        (g) Permitting Offer Versus Serve.--Section 13(f) of the National
    School Lunch Act (42 U.S.C. 1761(f)), as amended by subsection (f), is
    amended by adding at the end the following:
                ``(7) Offer versus serve.--A school food authority
            participating as a service institution may permit a child
            attending a site on school premises operated directly by the
            authority to refuse one or more items of a meal that the child
            does not intend to consume, under rules that the school uses for
            school meals programs. A refusal of an offered food item shall
            not affect the amount of payments made under this section to a
            school for the meal.''.

        (h) Records.--The second sentence of section 13(m) of the National
    School Lunch Act (42 U.S.C. 1761(m)) is amended by striking ``at all
    times be available'' and inserting ``be available at any reasonable
    time''.
        (i) Removing Mandatory Notice to Institutions.--Section 13(n)(2) of
    the National School Lunch Act (42 U.S.C. 1761(n)(2))

    [[Page 110 STAT. 2293]]

    is amended by striking ``, and its plans and schedule for informing
    service institutions of the availability of the program''.
        (j) Plan.--Section 13(n) of the National School Lunch Act (42 U.S.C.
    1761(n)), as amended by subsection (i), is amended--
                (1) in paragraph (2), by striking ``, including the State's
            methods of assessing need'';
                (2) by striking paragraph (3);
                (3) in paragraph (4), by striking ``and schedule''; and
                (4) by redesignating paragraphs (4) through (7) as
            paragraphs (3) through (6), respectively.

        (k) Monitoring and Training.--Section 13(q) of the National School
    Lunch Act (42 U.S.C. 1761(q)) is amended--
                (1) by striking paragraphs (2) and (4);
                (2) in paragraph (3), by striking ``paragraphs (1) and (2)
            of this subsection'' and inserting ``paragraph (1)''; and
                (3) by redesignating paragraph (3) as paragraph (2).

        (l) Expired Program.--Section 13 of the National School Lunch Act
    (42 U.S.C. 1761) is amended--
                (1) by striking subsection (p); and
                (2) by redesignating subsections (q) and (r) as subsections
            (p) and (q), respectively.

        (m) Effective Date <<NOTE: 42 USC 1761 note.>> .--The amendments
    made by subsection (b) shall become effective on January 1, 1997.

    SEC. 707. COMMODITY DISTRIBUTION.

        (a) Cereal and Shortening in Commodity Donations.--Section 14(b) of
    the National School Lunch Act (42 U.S.C. 1762a(b)) is amended--
                (1) by striking paragraph (1); and
                (2) by redesignating paragraphs (2) and (3) as paragraphs
            (1) and (2), respectively.

        (b) State Advisory Council.--Section 14(e) of the National School
    Lunch Act (42 U.S.C. 1762a(e)) is amended to read as follows:
        ``(e) Each State agency that receives food assistance payments under
    this section for any school year shall consult with representatives of
    schools in the State that participate in the school lunch program with
    respect to the needs of such schools relating to the manner of selection
    and distribution of commodity assistance for such program.''.
        (c) Cash Compensation for Pilot Project Schools.--Section 14(g) of
    the National School Lunch Act (42 U.S.C. 1762a(g)) is amended by
    striking paragraph (3).

    SEC. 708. CHILD AND ADULT CARE FOOD PROGRAM.

        (a) Establishment of Program.--Section 17 of the National School
    Lunch Act (42 U.S.C. 1766) is amended in the first sentence of
    subsection (a), by striking ``initiate, maintain, and expand'' and
    inserting ``initiate and maintain''.
        (b) Payments to Sponsor Employees.--Paragraph (2) of the last
    sentence of section 17(a) of the National School Lunch Act (42 U.S.C.
    1766(a)) is amended--
                (1) in subparagraph (B), by striking ``and'' at the end;
                (2) in subparagraph (C), by striking the period at the end
            and inserting ``; and''; and
                (3) by adding at the end the following:
                        ``(D) in the case of a family or group day care home
                    sponsoring organization that employs more than one
                    employee, the organization does not base payments to an

    [[Page 110 STAT. 2294]]

                    employee of the organization on the number of family or
                    group day care homes recruited.''.

        (c) Technical Assistance.--The last sentence of section 17(d)(1) of
    the National School Lunch Act (42 U.S.C. 1766(d)(1)) is amended by
    striking ``, and shall provide technical assistance'' and all that
    follows through ``its application''.
        (d) Reimbursement of Child Care Institutions.--Section 17(f)(2)(B)
    of the National School Lunch Act (42 U.S.C. 1766(f)(2)(B)) is amended by
    striking ``two meals and two supplements or three meals and one
    supplement'' and inserting ``2 meals and 1 supplement''.
        (e) Improved Targeting of Day Care Home Reimbursements.--
                (1) Restructured day care home reimbursements.--Section
            17(f)(3) of the National School Lunch Act (42 U.S.C. 1766(f)(3))
            is amended by striking ``(3)(A) Institutions'' and all that
            follows through the end of subparagraph (A) and inserting the
            following:
                ``(3) Reimbursement of family or group day care home
            sponsoring organizations.--
                        ``(A) Reimbursement factor.--
                              ``(i) In general.--An institution that
                          participates in the program under this section as
                          a family or group day care home sponsoring
                          organization shall be provided, for payment to a
                          home sponsored by the organization, reimbursement
                          factors in accordance with this subparagraph for
                          the cost of obtaining and preparing food and
                          prescribed labor costs involved in providing meals
                          under this section.
                              ``(ii) Tier i family or group day care
                          homes.--
                                        ``(I) Definition of tier i family or
                                    group day care home.--In this paragraph,
                                    the term `tier I family or group day
                                    care home' means--
                                                ``(aa) a family or group day
                                            care home that is located in a
                                            geographic area, as defined by
                                            the Secretary based on census
                                            data, in which at least 50
                                            percent of the children residing
                                            in the area are members of
                                            households whose incomes meet
                                            the income eligibility
                                            guidelines for free or reduced
                                            price meals under section 9;
                                                ``(bb) a family or group day
                                            care home that is located in an
                                            area served by a school
                                            enrolling elementary students in
                                            which at least 50 percent of the
                                            total number of children
                                            enrolled are certified eligible
                                            to receive free or reduced price
                                            school meals under this Act or
                                            the Child Nutrition Act of 1966
                                            (42 U.S.C. 1771 et seq.); or
                                                ``(cc) a family or group day
                                            care home that is operated by a
                                            provider whose household meets
                                            the income eligibility
                                            guidelines for free or reduced
                                            price meals under section 9 and
                                            whose income is verified by the
                                            sponsoring organization of the
                                            home under regulations
                                            established by the Secretary.

    [[Page 110 STAT. 2295]]

                                        ``(II) Reimbursement.--Except as
                                    provided in subclause (III), a tier I
                                    family or group day care home shall be
                                    provided reimbursement factors under
                                    this clause without a requirement for
                                    documentation of the costs described in
                                    clause (i), except that reimbursement
                                    shall not be provided under this
                                    subclause for meals or supplements
                                    served to the children of a person
                                    acting as a family or group day care
                                    home provider unless the children meet
                                    the income eligibility guidelines for
                                    free or reduced price meals under
                                    section 9.
                                        ``(III) Factors.--Except as provided
                                    in subclause (IV), the reimbursement
                                    factors applied to a home referred to in
                                    subclause (II) shall be the factors in
                                    effect on July 1, 1996.
                                        ``(IV) Adjustments.--The
                                    reimbursement factors under this
                                    subparagraph shall be adjusted on July
                                    1, 1997, and each July 1 thereafter, to
                                    reflect changes in the Consumer Price
                                    Index for food at home for the most
                                    recent 12-month period for which the
                                    data are available. The reimbursement
                                    factors under this subparagraph shall be
                                    rounded to the nearest lower cent
                                    increment and based on the unrounded
                                    adjustment in effect on June 30 of the
                                    preceding school year.
                              ``(iii) Tier ii family or group day care
                          homes.--
                                        ``(I) In general.--
                                                ``(aa) Factors.--Except as
                                            provided in subclause (II), with
                                            respect to meals or supplements
                                            served under this clause by a
                                            family or group day care home
                                            that does not meet the criteria
                                            set forth in clause (ii)(I), the
                                            reimbursement factors shall be
                                            95 cents for lunches and
                                            suppers, 27 cents for
                                            breakfasts, and 13 cents for
                                            supplements.
                                                ``(bb) Adjustments.--The
                                            factors shall be adjusted on
                                            July 1, 1997, and each July 1
                                            thereafter, to reflect changes
                                            in the Consumer Price Index for
                                            food at home for the most recent
                                            12-month period for which the
                                            data are available. The
                                            reimbursement factors under this
                                            item shall be rounded down to
                                            the nearest lower cent increment
                                            and based on the unrounded
                                            adjustment for the preceding 12-
                                            month period.
                                                ``(cc) Reimbursement.--A
                                            family or group day care home
                                            shall be provided reimbursement
                                            factors under this subclause
                                            without a requirement for
                                            documentation of the costs
                                            described in clause (i), except
                                            that reimbursement shall not be
                                            provided under this subclause
                                            for meals or supplements served
                                            to the children of a person
                                            acting as a family or group day
                                            care home provider unless
                                            the children meet the income
                                            eligibility guidelines for free
                                            or reduced price meals under
                                            section 9.

    [[Page 110 STAT. 2296]]

                                        ``(II) Other factors.--A family or
                                    group day care home that does not meet
                                    the criteria set forth in clause (ii)(I)
                                    may elect to be provided reimbursement
                                    factors determined in accordance with
                                    the following requirements:
                                                ``(aa) Children eligible for
                                            free or reduced price meals.--In
                                            the case of meals or supplements
                                            served under this subsection to
                                            children who are members of
                                            households whose incomes meet
                                            the income eligibility
                                            guidelines for free or reduced
                                            price meals under section 9, the
                                            family or group day care home
                                            shall be provided reimbursement
                                            factors set by the Secretary in
                                            accordance with clause
                                            (ii)(III).
                                                ``(bb) Ineligible
                                            children.--In the case of meals
                                            or supplements served under this
                                            subsection to children who are
                                            members of households whose
                                            incomes do not meet the income
                                            eligibility guidelines, the
                                            family or group day care home
                                            shall be provided reimbursement
                                            factors in accordance with
                                            subclause (I).
                                        ``(III) Information and
                                    determinations.--
                                                ``(aa) In general.--If a
                                            family or group day care home
                                            elects to claim the factors
                                            described in subclause (II), the
                                            family or group day care home
                                            sponsoring organization serving
                                            the home shall collect the
                                            necessary income information, as
                                            determined by the Secretary,
                                            from any parent or other
                                            caretaker to make the
                                            determinations specified in
                                            subclause (II) and shall make
                                            the determinations in accordance
                                            with rules prescribed by the
                                            Secretary.
                                                ``(bb) Categorical
                                            eligibility.--In making a
                                            determination under item (aa), a
                                            family or group day care home
                                            sponsoring organization may
                                            consider a child participating
                                            in or subsidized under, or a
                                            child with a parent
                                            participating in or subsidized
                                            under, a federally or State
                                            supported child care or other
                                            benefit program with an income
                                            eligibility limit that does not
                                            exceed the eligibility standard
                                            for free or reduced price meals
                                            under section 9 to be a child
                                            who is a member of a household
                                            whose income meets the income
                                            eligibility guidelines under
                                            section 9.
                                                ``(cc) Factors for children
                                            only.--A family or group day
                                            care home may elect to receive
                                            the reimbursement factors
                                            prescribed under clause
                                            (ii)(III) solely for the
                                            children participating in a
                                            program referred to in item (bb)
                                            if the home elects not to have
                                            income statements collected from
                                            parents or other caretakers.
                                        ``(IV) Simplified meal counting and
                                    reporting procedures.--The Secretary
                                    shall prescribe

    [[Page 110 STAT. 2297]]

                                    simplified meal counting and reporting
                                    procedures for use by a family or group
                                    day care home that elects to claim the
                                    factors under subclause (II) and by a
                                    family or group day care home sponsoring
                                    organization that sponsors the home. The
                                    procedures the Secretary prescribes may
                                    include 1 or more of the following:
                                                ``(aa) Setting an annual
                                            percentage for each home of the
                                            number of meals served that are
                                            to be reimbursed in accordance
                                            with the reimbursement factors
                                            prescribed under clause
                                            (ii)(III) and an annual
                                            percentage of the number of
                                            meals served that are to be
                                            reimbursed in accordance with
                                            the reimbursement factors
                                            prescribed under subclause (I),
                                            based on the family income of
                                            children enrolled in the home in
                                            a specified month or other
                                            period.
                                                ``(bb) Placing a home into 1
                                            of 2 or more reimbursement
                                            categories annually based on the
                                            percentage of children in the
                                            home whose households have
                                            incomes that meet the income
                                            eligibility guidelines under
                                            section 9, with each such
                                            reimbursement category carrying
                                            a set of reimbursement factors
                                            such as the factors prescribed
                                            under clause (ii)(III) or
                                            subclause (I) or factors
                                            established within the range of
                                            factors prescribed under clause
                                            (ii)(III) and subclause (I).
                                                ``(cc) Such other simplified
                                            procedures as the Secretary may
                                            prescribe.
                                        ``(V) Minimum verification
                                    requirements.--The Secretary may
                                    establish any minimum verification
                                    requirements that are necessary to carry
                                    out this clause.''.
                (2) Grants to states to provide assistance to family or
            group day care homes.--Section 17(f)(3) of the National School
            Lunch Act (42 U.S.C. 1766(f)(3)) is amended by adding at the end
            the following:
                        ``(D) Grants to states to provide assistance to
                    family or group day care homes.--
                              ``(i) In general.--
                                        ``(I) Reservation.--From amounts
                                    made available to carry out this
                                    section, the Secretary shall reserve
                                    $5,000,000 of the amount made available
                                    for fiscal year 1997.
                                        ``(II) Purpose.--The Secretary shall
                                    use the funds made available under
                                    subclause (I) to provide grants to
                                    States for the purpose of providing--
                                                ``(aa) assistance, including
                                            grants, to family and day care
                                            home sponsoring organizations
                                            and other appropriate
                                            organizations, in securing and
                                            providing training, materials,
                                            automated data processing
                                            assistance, and other assistance
                                            for the staff of the sponsoring
                                            organizations; and
                                                ``(bb) training and other
                                            assistance to
                                            family and group day care homes
                                            in the

    [[Page 110 STAT. 2298]]

                                            implementation of the amendment
                                            to subparagraph (A) made by
                                            section 708(e)(1) of the
                                            Personal Responsibility and Work
                                            Opportunity Reconciliation Act
                                            of 1996.
                              ``(ii) Allocation.--The Secretary shall
                          allocate from the funds reserved under clause
                          (i)(I)--
                                        ``(I) $30,000 in base funding to
                                    each
                                    State; and
                                        ``(II) any remaining amount among
                                    the States, based on the number of
                                    family day care homes participating in
                                    the program in a State during fiscal
                                    year 1995 as a percentage of the number
                                    of all family day care homes
                                    participating in the program during
                                    fiscal year 1995.
                              ``(iii) Retention of funds.--Of the amount of
                          funds made available to a State for fiscal year
                          1997 under clause (i), the State may retain not to
                          exceed 30 percent of the amount to carry out this
                          subparagraph.
                              ``(iv) Additional payments.--Any payments
                          received under this subparagraph shall be in
                          addition to payments that a State receives under
                          subparagraph (A).''.
                (3) Provision of data.--Section 17(f)(3) of the National
            School Lunch Act (42 U.S.C. 1766(f)(3)), as amended by paragraph
            (2), is amended by adding at the end the following:
                        ``(E) Provision of data to family or group day care
                    home sponsoring organizations.--
                              ``(i) Census data.--The Secretary shall
                          provide to each State agency administering a child
                          and adult care food program under this section
                          data from the most recent decennial census survey
                          or other appropriate census survey for which the
                          data are available showing which areas in the
                          State meet the requirements of subparagraph
                          (A)(ii)(I)(aa). The State agency shall provide the
                          data to family or group day care home sponsoring
                          organizations located in the State.
                              ``(ii) School data.--
                                        ``(I) In general.--A State agency
                                    administering the school lunch program
                                    under this Act or the school breakfast
                                    program under the Child Nutrition Act of
                                    1966 (42 U.S.C. 1771 et seq.) shall
                                    provide to approved family or group day
                                    care home sponsoring organizations a
                                    list of schools serving elementary
                                    school children in the State in which
                                    not less than \1/2\ of the children
                                    enrolled are certified to receive free
                                    or reduced price meals. The State agency
                                    shall collect the data necessary to
                                    create the list annually and provide the
                                    list on a timely basis to any approved
                                    family or group day care home sponsoring
                                    organization that requests the list.
                                        ``(II) Use of data from preceding
                                    school year.--In determining for a
                                    fiscal year or other annual period
                                    whether a home qualifies as a tier I
                                    family or group day care home under
                                    subparagraph (A)(ii)(I), the State
                                    agency administering the

    [[Page 110 STAT. 2299]]

                                    program under this section, and a family
                                    or group day care home sponsoring
                                    organization, shall use the most current
                                    available data at the time of the
                                    determination.
                              ``(iii) Duration of determination.--For
                          purposes of this section, a determination that a
                          family or group day care home is located in an
                          area that qualifies the home as a tier I family or
                          group day care home (as the term is defined in
                          subparagraph (A)(ii)(I)), shall be in effect for 3
                          years (unless the determination is made on the
                          basis of census data, in which case the
                          determination shall remain in effect until more
                          recent census data are available) unless the State
                          agency determines that the area in which the home
                          is located no longer qualifies the home as a tier
                          I family or group day care home.''.
                (4) Conforming amendments.--Section 17(c) of the National
            School Lunch Act (42 U.S.C. 1766(c)) is amended by inserting
            ``except as provided in subsection (f)(3),'' after ``For
            purposes of this section,'' each place it appears in paragraphs
            (1), (2), and (3).

        (f) Reimbursement.--Section 17(f) of the National School Lunch Act
    (42 U.S.C. 1766(f)) is amended--
                (1) in paragraph (3)--
                        (A) in subparagraph (B), by striking the third and
                    fourth sentences; and
                        (B) in subparagraph (C)(ii), by striking ``conduct
                    outreach'' and all that follows through ``may become''
                    and inserting ``assist unlicensed family or group day
                    care homes in becoming''; and
                (2) in the first sentence of paragraph (4), by striking
            ``shall'' and inserting ``may''.

        (g) Nutritional Requirements.--Section 17(g)(1) of the National
    School Lunch Act (42 U.S.C. 1766(g)(1)) is amended--
                (1) in subparagraph (A), by striking the second
            sentence; and
                (2) in subparagraph (B), by striking the second sentence.

        (h) Elimination of State Paperwork and Outreach
    Burden.--Section 17 of the National School Lunch Act (42 U.S.C. 1766) is
    amended by striking subsection (k) and inserting the following:
        ``(k) Training and Technical Assistance.--A State participating in
    the program established under this section shall provide sufficient
    training, technical assistance, and monitoring to facilitate effective
    operation of the program. The Secretary shall assist the State in
    developing plans to fulfill the requirements of this subsection.''.
        (i) Records.--The second sentence of section 17(m) of the National
    School Lunch Act (42 U.S.C. 1766(m)) is amended by striking ``at all
    times'' and inserting ``at any reasonable time''.
        (j) Unneeded Provision.--Section 17 of the National School Lunch
    Act <<NOTE: 42 USC 1766.>>  is amended by striking subsection (q).

        (k) Effective Date <<NOTE: 42 USC 1766 note.>> .--
                (1) In general.--Except as provided in paragraph (2), the
            amendments made by this section shall become effective on the
            date of enactment of this Act.

    [[Page 110 STAT. 2300]]

                (2) Improved targeting of day care home reimbursements.--The
            amendments made by paragraphs (1) and (4) of subsection (e)
            shall become effective on July 1, 1997.
                (3) Regulations <<NOTE: 42 USC 1766 note.>> .--
                        (A) Interim regulations.--Not later than January 1,
                    1997, the Secretary of Agriculture shall issue interim
                    regulations to implement--
                              (i) the amendments made by paragraphs (1),
                          (3), and (4) of subsection (e); and
                              (ii) section 17(f)(3)(C) of the National
                          School Lunch Act (42 U.S.C. 1766(f)(3)(C)).
                        (B) Final regulations.--Not later than July 1, 1997,
                    the Secretary of Agriculture shall issue final
                    regulations to implement the provisions of law referred
                    to in subparagraph (A).

        (l) <<NOTE: 42 USC 1766 note.>>  Study of Impact of Amendments on
    Program Participation and Family Day Care Licensing.--
                (1) In general.--The Secretary of Agriculture, in
            conjunction with the Secretary of Health and Human Services,
            shall study the impact of the amendments made by this
            section on--
                        (A) the number of family day care homes
                    participating in the child and adult care food program
                    established under section 17 of the National School
                    Lunch Act (42 U.S.C. 1766);
                        (B) the number of day care home sponsoring
                    organizations participating in the program;
                        (C) the number of day care homes that are licensed,
                    certified, registered, or approved by each State in
                    accordance with regulations issued by the Secretary;
                        (D) the rate of growth of the numbers referred to in
                    subparagraphs (A) through (C);
                        (E) the nutritional adequacy and quality of meals
                    served in family day care homes that--
                              (i) received reimbursement under the program
                          prior to the amendments made by this section but
                          do not receive reimbursement after the amendments
                          made by this section; or
                              (ii) received full reimbursement under the
                          program prior to the amendments made by this
                          section but do not receive full reimbursement
                          after the amendments made by this section; and
                        (F) the proportion of low-income children
                    participating in the program prior to the amendments
                    made by this section and the proportion of low-income
                    children participating in the program after the
                    amendments made by this section.
                (2) Required data.--Each State agency participating in the
            child and adult care food program under section 17 of the
            National School Lunch Act (42 U.S.C. 1766) shall submit to the
            Secretary of Agriculture data on--
                        (A) the number of family day care homes
                    participating in the program on June 30, 1997, and June
                    30, 1998;
                        (B) the number of family day care homes licensed,
                    certified, registered, or approved for service on June
                    30, 1997, and June 30, 1998; and

    [[Page 110 STAT. 2301]]

                        (C) such other data as the Secretary may require to
                    carry out this subsection.
                (3) Submission of report.--Not later than 2 years after the
            date of enactment of this section, the Secretary of Agriculture
            shall submit the study required under this subsection to the
            Committee on Economic and Educational Opportunities of the House
            of Representatives and the Committee on Agriculture, Nutrition,
            and Forestry of the Senate.

    SEC. 709. PILOT PROJECTS.

        (a) Universal Free Pilot.--Section 18(d) of the National School
    Lunch Act (42 U.S.C. 1769(d)) is amended--
                (1) by striking paragraph (3); and
                (2) by redesignating paragraphs (4) and (5) as paragraphs
            (3) and (4), respectively.

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

    SEC. 710. REDUCTION OF PAPERWORK.

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

    SEC. 711. INFORMATION ON INCOME ELIGIBILITY.

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

    SEC. 712. NUTRITION GUIDANCE FOR CHILD NUTRITION PROGRAMS.

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

                     Subtitle B--Child Nutrition Act of 1966

    SEC. 721. SPECIAL MILK PROGRAM.

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

    SEC. 722. FREE AND REDUCED PRICE POLICY STATEMENT.

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

    [[Page 110 STAT. 2302]]

                    in the policy of a school food authority, such as an
                    annual adjustment of the income eligibility guidelines
                    for free and reduced price meals, shall not be
                    sufficient cause for requiring the school food authority
                    to submit a policy statement.''.

    SEC. 723. SCHOOL BREAKFAST PROGRAM AUTHORIZATION.

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

    SEC. 724. STATE ADMINISTRATIVE EXPENSES.

        (a) Use of Funds for Commodity Distribution Administration;
    Studies.--Section 7 of the Child Nutrition Act of 1966 (42 U.S.C. 1776)
    is amended--
                (1) by striking subsections (e) and (h); and
                (2) by redesignating subsections (f), (g), and (i) as
            subsections (e), (f), and (g), respectively.

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

    SEC. 725. REGULATIONS.

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

    SEC. 726. PROHIBITIONS.

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

    SEC. 727. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

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

    SEC. 728. ACCOUNTS AND RECORDS.

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

    [[Page 110 STAT. 2303]]

    SEC. 729. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND
                CHILDREN.

        (a) Definitions.--Section 17(b) of the Child Nutrition Act of 1966
    (42 U.S.C. 1786(b)) is amended--
                (1) in paragraph (15)(B)(iii), by inserting ``of not more
            than 365 days'' after ``accommodation''; and
                (2) in paragraph (16)--
                        (A) in subparagraph (A), by adding ``and'' at the
                    end; and
                        (B) in subparagraph (B), by striking ``; and'' and
                    inserting a period; and
                        (C) by striking subparagraph (C).

        (b) Secretary's Promotion of WIC.--Section 17(c) of the Child
    Nutrition Act of 1966 (42 U.S.C. 1786(c)) is amended by striking
    paragraph (5).
        (c) Eligible Participants.--Section 17(d) of the Child Nutrition Act
    of 1966 (42 U.S.C. 1786(d)) is amended by striking paragraph (4).
        (d) Nutrition Education.--Section 17(e) of the Child Nutrition Act
    of 1966 (42 U.S.C. 1786(e)) is amended--
                (1) in paragraph (2), by striking the third sentence;
                (2) in paragraph (4)--
                        (A) in the matter preceding subparagraph (A), by
                    striking ``shall'';
                        (B) by striking subparagraph (A);
                        (C) by redesignating subparagraphs (B) and (C) as
                    subparagraphs (A) and (B), respectively;
                        (D) in subparagraph (A), as so redesignated--
                              (i) by inserting ``shall'' before ``provide'';
                          and
                              (ii) by striking ``and'' at the end;
                        (E) in subparagraph (B), as so redesignated--
                              (i) by inserting ``shall'' before ``provide'';
                          and
                              (ii) by striking the period at the end and
                          inserting ``; and''; and
                        (F) by adding at the end the following:
                ``(C) may provide a local agency with materials describing
            other programs for which a participant in the program may be
            eligible.'';
                (3) in paragraph (5), by striking ``The State agency shall
            ensure that each'' and inserting ``Each''; and
                (4) by striking paragraph (6).

        (e) State Plan.--Section 17(f) of the Child Nutrition Act of 1966
    (42 U.S.C. 1786(f)) is amended--
                (1) in paragraph (1)--
                        (A) in subparagraph (A)--
                              (i) by striking ``annually to the Secretary,
                          by a date specified by the Secretary, a'' and
                          inserting ``to the Secretary, by a date specified
                          by the Secretary, an initial''; and
                              (ii) by adding at the end the following:
                          ``After submitting the initial plan, a State shall
                          be required to submit to the Secretary for
                          approval only a substantive change in the plan.'';
                        (B) in subparagraph (C)--
                              (i) by striking clause (iii) and inserting the

                          following:

    [[Page 110 STAT. 2304]]

                ``(iii) a plan to coordinate operations under the program
            with other services or programs that may benefit participants
            in, and applicants for, the program;'';
                              (ii) in clause (vi), by inserting after ``in
                          the State'' the following: ``(including a plan to
                          improve access to the program for participants and
                          prospective applicants who are employed, or who
                          reside in rural areas)'';
                              (iii) in clause (vii), by striking ``to
                          provide program benefits'' and all that follows
                          through ``emphasis on'' and inserting ``for'';
                              (iv) by striking clauses (ix), (x), and (xii);
                              (v) in clause (xiii), by striking ``may
                          require'' and inserting ``may reasonably
                          require'';
                              (vi) by redesignating clauses (xi) and (xiii),
                          as so amended, as clauses (ix) and (x),
                          respectively; and
                              (vii) in clause (ix), as so redesignated, by
                          adding ``and'' at the end;
                        (C) by striking subparagraph (D); and
                        (D) by redesignating subparagraph (E) as
                    subparagraph (D);
                (2) by striking paragraphs (6) and (22);
                (3) in the second sentence of paragraph (5), by striking
            ``at all times be available'' and inserting ``be available at
            any reasonable time'';
                (4) in paragraph (9)(B), by striking the second sentence;
                (5) in the first sentence of paragraph (11), by striking ``,
            including standards that will ensure sufficient State agency
            staff'';
                (6) in paragraph (12), by striking the third sentence;
                (7) in paragraph (14), by striking ``shall'' and inserting
            ``may'';
                (8) in paragraph (17), by striking ``and to accommodate''
            and all that follows through ``facilities'';
                (9) in paragraph (19), by striking ``shall'' and inserting
            ``may''; and
                (10) by redesignating paragraphs (7) through (21) as
            paragraphs (6) through (20), and paragraphs (23) and (24) as
            paragraphs (21) and (22), respectively.

        (f) Information.--Section 17(g) of the Child Nutrition Act of 1966
    (42 U.S.C. 1786(g)) is amended--
                (1) in paragraph (5), by striking ``the report required
            under subsection (d)(4)'' and inserting ``reports on program
            participant characteristics''; and
                (2) by striking paragraph (6).

        (g) Procurement of Infant Formula.--
                (1) In general.--Section 17(h) of the Child Nutrition Act of
            1966 (42 U.S.C. 1786(h)) is amended--
                        (A) in paragraph (4)(E), by striking ``and, on'' and
                    all that follows through ``(d)(4)''; and
                        (B) in paragraph (8)--
                              (i) by striking subparagraphs (A), (C), and
                          (M);
                              (ii) in subparagraph (G)--
                                        (I) in clause (i), by striking
                                    ``(i)''; and
                                        (II) by striking clauses (ii)
                                    through (ix);

    [[Page 110 STAT. 2305]]

                              (iii) in subparagraph (I), by striking ``Sec-
                          retary--'' and all that follows through ``(v)
                          may'' and inserting ``Secretary may'';
                              (iv) by redesignating subparagraphs (B) and
                          (D) through (L) as subparagraphs (A) and (B)
                          through (J), respectively;
                              (v) in subparagraph (A)(i), as so
                          redesignated, by striking ``subparagraphs (C),
                          (D), and (E)(iii), in carrying out subparagraph
                          (A),'' and inserting ``subparagraphs (B) and
                          (C)(iii),'';
                              (vi) in subparagraph (B)(i), as so
                          redesignated, by striking ``subparagraph (B)''
                          each place it appears and inserting ``subparagraph
                          (A)''; and
                              (vii) in subparagraph (C)(iii), as so
                          redesignated, by striking ``subparagraph (B)'' and
                          inserting ``subparagraph (A)''.
                (2) Application <<NOTE: 42 USC 1786 note.>> .--The
            amendments made by paragraph (1) shall not apply to a contract
            for the procurement of infant formula under section 17(h)(8) of
            the Child Nutrition Act of 1966 (42 U.S.C. 1786(h)(8)) that is
            in effect on the date of enactment of this subsection.

        (h) National Advisory Council on Maternal, Infant, and Fetal
    Nutrition.--Section 17(k)(3) of the Child Nutrition Act of 1966 (42
    U.S.C. 1786(k)(3)) is amended by striking ``Secretary shall designate''
    and inserting ``Council shall elect''.
        (i) Completed Study; Community College Demonstration; Grants for
    Information and Data System.--Section 17 of the Child Nutrition Act of
    1966 (42 U.S.C. 1786) is amended by striking subsections (n), (o), and
    (p).
        (j) Disqualification of Vendors Who Are Disqualified Under the Food
    Stamp Program.--Section 17 of the Child Nutrition Act of 1966 (42 U.S.C.
    1786), as amended by subsection (i), is amended by adding at the end the
    following:
        ``(n) Disqualification of Vendors Who Are Disqualified Under the
    Food Stamp Program.--
                ``(1) <<NOTE: Regulations.>>  In general.--The Secretary
            shall issue regulations providing criteria for the
            disqualification under this section of an approved vendor that
            is disqualified from accepting benefits under the food stamp
            program established under the Food Stamp Act of 1977 (7 U.S.C.
            2011 et seq.).
                ``(2) Terms.--A disqualification under paragraph (1)--
                        ``(A) shall be for the same period as the
                    disqualification from the program referred to in
                    paragraph (1);
                        ``(B) may begin at a later date than the
                    disqualification from the program referred to in
                    paragraph (1); and
                        ``(C) shall not be subject to judicial or
                    administrative review.''.

    SEC. 730. CASH GRANTS FOR NUTRITION EDUCATION.

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

    SEC. 731. NUTRITION EDUCATION AND TRAINING.

        (a) Findings.--Section 19 of the Child Nutrition Act of 1966 (42
    U.S.C. 1788) is amended--
                (1) in subsection (a), by striking ``that--'' and all that
            follows through the period at the end and inserting ``that
            effective dissemination of scientifically valid information to
            children

    [[Page 110 STAT. 2306]]

            participating or eligible to participate in the school lunch and
            related child nutrition programs should be encouraged.''; and
                (2) in subsection (b), by striking ``encourage'' and all
            that follows through ``establishing'' and inserting
            ``establish''.

        (b) Use of Funds.--Section 19(f) of the Child Nutrition Act of 1966
    (42 U.S.C. 1788(f)) is amended--
                (1) in paragraph (1)--
                        (A) by striking subparagraph (B); and
                        (B) in subparagraph (A)--
                              (i) by striking ``(A)'';
                              (ii) by striking clauses (ix) through (xix);
                              (iii) by redesignating clauses (i) through
                          (viii) and (xx) as subparagraphs (A) through (H)
                          and (I), respectively;
                              (iv) in subparagraph (I), as so redesignated,
                          by striking the period at the end and inserting
                          ``; and''; and
                              (v) by adding at the end the following:
                ``(J) other appropriate related activities, as determined by
            the State.'';
                (2) by striking paragraphs (2) and (4); and
                (3) by redesignating paragraph (3) as paragraph (2).

        (c) Accounts, Records, and Reports.--The second sentence of section
    19(g)(1) of the Child Nutrition Act of 1966 (42 U.S.C. 1788(g)(1)) is
    amended by striking ``at all times be available'' and inserting ``be
    available at any reasonable time''.
        (d) State Coordinators for Nutrition; State Plan.--Section 19(h) of
    the Child Nutrition Act of 1966 (42 U.S.C. 1788(h)) is amended--
                (1) in the second sentence of paragraph (1)--
                        (A) by striking ``as provided in paragraph (2) of
                    this subsection''; and
                        (B) by striking ``as provided in paragraph (3) of
                    this subsection'';
                (2) in paragraph (2), by striking the second and third
            sentences; and
                (3) by striking paragraph (3).

        (e) Authorization of Appropriations.--Section 19(i) of the Child
    Nutrition Act of 1966 (42 U.S.C. 1788(i)) is amended--
                (1) in the first sentence of paragraph (2)(A), by striking
            ``and each succeeding fiscal year'';
                (2) by redesignating paragraphs (3) and (4) as paragraphs
            (4) and (5), respectively; and
                (3) by inserting after paragraph (2) the following:
                ``(3) Fiscal years 1997 through 2002.--
                        ``(A) In general.--There are authorized to be
                    appropriated to carry out this section $10,000,000 for
                    each of fiscal years 1997 through 2002.
                        ``(B) Grants.--
                              ``(i) In general.--Grants to each State from
                          the amounts made available under subparagraph (A)
                          shall be based on a rate of 50 cents for each
                          child enrolled in schools or institutions within
                          the State, except that no State shall receive an
                          amount less than $75,000 per fiscal year.
                              ``(ii) Insufficient funds.--If the amount made
                          available for any fiscal year is insufficient to
                          pay the

    [[Page 110 STAT. 2307]]

                          amount to which each State is entitled under
                          clause (i), the amount of each grant shall be
                          ratably reduced.''.

        (f) Assessment.--Section 19 of the Child Nutrition Act of 1966 (42
    U.S.C. 1788) is amended by striking subsection (j).
        (g) Effective Date <<NOTE: 42 USC 1788 note.>> .--The amendments
    made by subsection (e) shall become effective on October 1, 1996.

                      Subtitle C--Miscellaneous Provisions

    SEC. 741. <<NOTE: 42 USC 1751 note.>>  COORDINATION OF SCHOOL LUNCH,
                SCHOOL BREAKFAST, AND SUMMER FOOD SERVICE PROGRAMS.

        (a) Coordination.--
                (1) In general.--The Secretary of Agriculture shall develop
            proposed changes to the regulations under the school lunch
            program under the National School Lunch Act (42 U.S.C. 1751 et
            seq.), the summer food service program under section 13 of that
            Act (42 U.S.C. 1761), and the school breakfast program under
            section 4 of the Child Nutrition Act of 1966 (42 U.S.C. 1773),
            for the purpose of simplifying and coordinating those programs
            into a comprehensive meal program.
                (2) Consultation.--In developing proposed changes to the
            regulations under paragraph (1), the Secretary of Agriculture
            shall consult with local, State, and regional administrators of
            the programs described in such paragraph.

        (b) Report.--Not later than November 1, 1997, the Secretary of
    Agriculture shall submit to the Committee on Agriculture, Nutrition, and
    Forestry of the Senate and the Committee on Economic and Educational
    Opportunities of the House of Representatives a report containing the
    proposed changes developed under subsection (a).

    SEC. 742. <<NOTE: 8 USC 1615.>>  REQUIREMENTS RELATING TO PROVISION OF
                BENEFITS BASED ON CITIZENSHIP, ALIENAGE, OR IMMIGRATION
                STATUS UNDER THE NATIONAL SCHOOL LUNCH ACT, THE CHILD
                NUTRITION ACT OF 1966, AND CERTAIN OTHER ACTS.

        (a) School Lunch and Breakfast Programs.--Notwithstanding any other
    provision of this Act, an individual who is eligible to receive free
    public education benefits under State or local law shall not be
    ineligible to receive benefits provided under the school lunch program
    under the National School Lunch Act (42 U.S.C. 1751 et seq.) or the
    school breakfast program under section 4 of the Child Nutrition Act of
    1966 (42 U.S.C. 1773) on the basis of citizenship, alienage, or
    immigration status.
        (b) Other Programs.--
                (1) In general.--Nothing in this Act shall prohibit or
            require a State to provide to an individual who is not a citizen
            or a qualified alien, as defined in section 431(b), benefits
            under programs established under the provisions of law described
            in paragraph (2).
                (2) Provisions of law described.--The provisions of law
            described in this paragraph are the following:
                        (A) Programs (other than the school lunch program
                    and the school breakfast program) under the National
                    School Lunch Act (42 U.S.C. 1751 et seq.) and the Child
                    Nutrition Act of 1966 (42 U.S.C. 1771 et seq.).

    [[Page 110 STAT. 2308]]

                        (B) Section 4 of the Agriculture and Consumer
                    Protection Act of 1973 (7 U.S.C. 612c note).
                        (C) The Emergency Food Assistance Act of 1983 (7
                    U.S.C 612c note).
                        (D) The food distribution program on Indian
                    reservations established under section 4(b) of the Food
                    Stamp Act of 1977 (7 U.S.C 2013(b)).

               TITLE VIII--FOOD STAMPS AND COMMODITY DISTRIBUTION

                         Subtitle A--Food Stamp Program

    SEC. 801. DEFINITION OF CERTIFICATION PERIOD.

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

    SEC. 802. DEFINITION OF COUPON.

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

    SEC. 803. TREATMENT OF CHILDREN LIVING AT HOME.

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

    SEC. 804. ADJUSTMENT OF THRIFTY FOOD PLAN.

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

    [[Page 110 STAT. 2309]]

    SEC. 805. DEFINITION OF HOMELESS INDIVIDUAL.

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

    SEC. 806. STATE OPTION FOR ELIGIBILITY STANDARDS.

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

    SEC. 807. EARNINGS OF STUDENTS.

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

    SEC. 808. ENERGY ASSISTANCE.

        (a) In General.--Section 5(d) of the Food Stamp Act of 1977 (7
    U.S.C. 2014(d)) is amended by striking paragraph (11) and inserting the
    following: ``(11)(A) any payments or allowances made for the purpose of
    providing energy assistance under any Federal law (other than part A of
    title IV of the Social Security Act (42 U.S.C. 601 et seq.)), or (B) a
    1-time payment or allowance made under a Federal or State law for the
    costs of weatherization or emergency repair or replacement of an unsafe
    or inoperative furnace or other heating or cooling device,''.
        (b) Conforming Amendments.--Section 5(k) of the Food Stamp Act of
    1977 (7 U.S.C. 2014(k)) is amended--
                (1) in paragraph (1)--
                        (A) in subparagraph (A), by striking ``plan for aid
                    to families with dependent children approved'' and
                    inserting ``program funded''; and
                        (B) in subparagraph (B), by striking ``, not
                    including energy or utility-cost assistance,'';
                (2) in paragraph (2), by striking subparagraph (C) and
            inserting the following:
                ``(C) a payment or allowance described in subsection
            (d)(11);''; and
                (3) by adding at the end the following:
                ``(4) Third party energy assistance payments.--
                        ``(A) Energy assistance payments.--For purposes of
                    subsection (d)(1), a payment made under a State law
                    (other than a law referred to in paragraph (2)(H)) to
                    provide energy assistance to a household shall be
                    considered money payable directly to the household.
                        ``(B) Energy assistance expenses.--For purposes of
                    subsection (e)(7), an expense paid on behalf of a
                    household under a State law to provide energy assistance
                    shall be considered an out-of-pocket expense incurred
                    and paid by the household.''.

    SEC. 809. DEDUCTIONS FROM INCOME.

        (a) In General.--Section 5 of the Food Stamp Act of 1977 (7 U.S.C.
    2014) is amended by striking subsection (e) and inserting the following:
        ``(e) Deductions From Income.--
                ``(1) Standard deduction.--The Secretary shall allow a
            standard deduction for each household in the 48 contiguous

    [[Page 110 STAT. 2310]]

            States and the District of Columbia, Alaska, Hawaii, Guam, and
            the Virgin Islands of the United States of $134, $229, $189,
            $269, and $118, respectively.
                ``(2) Earned income deduction.--
                        ``(A) Definition of earned income.--In this
                    paragraph, the term `earned income' does not include--
                              ``(i) income excluded by subsection (d); or
                              ``(ii) any portion of income earned under a
                          work supplementation or support program, as
                          defined under section 16(b), that is attributable
                          to public assistance.
                        ``(B) Deduction.--Except as provided in subparagraph
                    (C), a household with earned income shall be allowed a
                    deduction of 20 percent of all earned income to
                    compensate for taxes, other mandatory deductions from
                    salary, and work expenses.
                        ``(C) Exception.--The deduction described in
                    subparagraph (B) shall not be allowed with respect to
                    determining an overissuance due to the failure of a
                    household to report earned income in a timely manner.
                ``(3) Dependent care deduction.--
                        ``(A) In general.--A household shall be entitled,
                    with respect to expenses (other than excluded expenses
                    described in subparagraph (B)) for dependent care, to a
                    dependent care deduction, the maximum allowable level of
                    which shall be $200 per month for each dependent child
                    under 2 years of age and $175 per month for each other
                    dependent, for the actual cost of payments necessary for
                    the care of a dependent if the care enables a household
                    member to accept or continue employment, or training or
                    education that is preparatory for employment.
                        ``(B) Excluded expenses.--The excluded expenses
                    referred to in subparagraph (A) are--
                              ``(i) expenses paid on behalf of the household
                          by a third party;
                              ``(ii) amounts made available and excluded,
                          for the expenses referred to in subparagraph (A),
                          under subsection (d)(3); and
                              ``(iii) expenses that are paid under section
                          6(d)(4).
                ``(4) Deduction for child support payments.--
                        ``(A) In general.--A household shall be entitled to
                    a deduction for child support payments made by a
                    household member to or for an individual who is not a
                    member of the household if the household member is
                    legally obligated to make the payments.
                        ``(B) Methods for determining amount.--The Secretary
                    may prescribe by regulation the methods, including
                    calculation on a retrospective basis, that a State
                    agency shall use to determine the amount of the
                    deduction for child support payments.
                ``(5) Homeless shelter allowance.--Under rules prescribed by
            the Secretary, a State agency may develop a standard homeless
            shelter allowance, which shall not exceed $143 per month, for
            such expenses as may reasonably be expected to be incurred by
            households in which all members are homeless individuals but are
            not receiving free shelter throughout the month. A State agency
            that develops the allowance may use the allowance in determining
            eligibility and allotments for the

    [[Page 110 STAT. 2311]]

            households. The State agency may make a household with extremely
            low shelter costs ineligible for the allowance.
                ``(6) Excess medical expense deduction.--
                        ``(A) In general.--A household containing an elderly
                    or disabled member shall be entitled, with respect to
                    expenses other than expenses paid on behalf of the
                    household by a third party, to an excess medical expense
                    deduction for the portion of the actual costs of
                    allowable medical expenses, incurred by the elderly or
                    disabled member, exclusive of special diets, that
                    exceeds $35 per month.
                        ``(B) Method of claiming deduction.--
                              ``(i) In general.--A State agency shall offer
                          an eligible household under subparagraph (A) a
                          method of claiming a deduction for recurring
                          medical expenses that are initially verified under
                          the excess medical expense deduction in lieu of
                          submitting information on, or verification of,
                          actual expenses on a monthly basis.
                              ``(ii) Method.--The method described in clause
                          (i) shall--
                                        ``(I) be designed to minimize the
                                    burden for the eligible elderly or
                                    disabled household member choosing to
                                    deduct the recurrent medical expenses of
                                    the member pursuant to the method;
                                        ``(II) rely on reasonable estimates
                                    of the expected medical expenses of the
                                    member for the certification period
                                    (including changes that can be
                                    reasonably anticipated based on
                                    available information about the medical
                                    condition of the member, public or
                                    private medical insurance coverage, and
                                    the current verified medical expenses
                                    incurred by the member); and
                                        ``(III) not require further
                                    reporting or verification of a change in
                                    medical expenses if such a change has
                                    been anticipated for the certification
                                    period.
                ``(7) Excess shelter expense deduction.--
                        ``(A) In general.--A household shall be entitled,
                    with respect to expenses other than expenses paid on
                    behalf of the household by a third party, to an excess
                    shelter expense deduction to the extent that the monthly
                    amount expended by a household for shelter exceeds an
                    amount equal to 50 percent of monthly household income
                    after all other applicable deductions have been allowed.
                        ``(B) Maximum amount of deduction.--In the case of a
                    household that does not contain an elderly or disabled
                    individual, in the 48 contiguous States and the District
                    of Columbia, Alaska, Hawaii, Guam, and the Virgin
                    Islands of the United States, the excess shelter expense
                    deduction shall not exceed--
                              ``(i) for the period beginning on the date of
                          enactment of this subparagraph and ending on
                          December 31, 1996, $247, $429, $353, $300, and
                          $182 per month, respectively;
                              ``(ii) for the period beginning on January 1,
                          1997, and ending on September 30, 1998, $250,
                          $434, $357, $304, and $184 per month,
                          respectively;

    [[Page 110 STAT. 2312]]

                              ``(iii) for fiscal years 1999 and 2000, $275,
                          $478, $393, $334, and $203 per month,
                          respectively; and
                              ``(iv) for fiscal year 2001 and each
                          subsequent fiscal year, $300, $521, $429, $364,
                          and $221 per month, respectively.
                        ``(C) Standard utility allowance.--
                              ``(i) In general.--In computing the excess
                          shelter expense deduction, a State agency may use
                          a standard utility allowance in accordance with
                          regulations promulgated by the Secretary, except
                          that a State agency may use an allowance that does
                          not fluctuate within a year to reflect seasonal
                          variations.
                              ``(ii) Restrictions on heating and cooling
                          expenses.--An allowance for a heating or cooling
                          expense may not be used in the case of a household
                          that--
                                        ``(I) does not incur a heating or
                                    cooling expense, as the case may be;
                                        ``(II) does incur a heating or
                                    cooling expense but is located in a
                                    public housing unit that has central
                                    utility meters and charges households,
                                    with regard to the expense, only for
                                    excess utility costs; or
                                        ``(III) shares the expense with, and
                                    lives with, another individual not
                                    participating in the food stamp program,
                                    another household participating in the
                                    food stamp program, or both, unless the
                                    allowance is prorated between the
                                    household and the other individual,
                                    household, or both.
                              ``(iii) Mandatory allowance.--
                                        ``(I) In general.--A State agency
                                    may make the use of a standard utility
                                    allowance mandatory for all households
                                    with qualifying utility costs if--
                                                ``(aa) the State agency has
                                            developed 1 or more standards
                                            that include the cost of heating
                                            and cooling and 1 or more
                                            standards that do not include
                                            the cost of heating and cooling;
                                            and
                                                ``(bb) the Secretary finds
                                            that the standards will not
                                            result in an increased cost to
                                            the Secretary.
                                        ``(II) Household election.--A State
                                    agency that has not made the use of a
                                    standard utility allowance mandatory
                                    under subclause (I) shall allow a
                                    household to switch, at the end of a
                                    certification period, between the
                                    standard utility allowance and a
                                    deduction based on the actual utility
                                    costs of the household.
                              ``(iv) Availability of allowance to recipients
                          of energy assistance.--
                                        ``(I) In general.--Subject to
                                    subclause (II), if a State agency elects
                                    to use a standard utility allowance that
                                    reflects heating or cooling costs, the
                                    standard utility allowance shall be made
                                    available to households receiving a
                                    payment, or on behalf of which a payment
                                    is made, under the Low-Income Home
                                    Energy Assistance Act of 1981

    [[Page 110 STAT. 2313]]

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

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

    SEC. 810. VEHICLE ALLOWANCE.

        Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)) is
    amended by striking paragraph (2) and inserting the following:
                ``(2) Included assets.--
                        ``(A) In general.--Subject to the other provisions
                    of this paragraph, the Secretary shall, in prescribing
                    inclusions in, and exclusions from, financial resources,
                    follow the regulations in force as of June 1, 1982
                    (other than those relating to licensed vehicles and
                    inaccessible resources).
                        ``(B) Additional included assets.--The Secretary
                    shall include in financial resources--
                              ``(i) any boat, snowmobile, or airplane used
                          for recreational purposes;
                              ``(ii) any vacation home;
                              ``(iii) any mobile home used primarily for
                          vacation purposes;
                              ``(iv) subject to subparagraph (C), any
                          licensed vehicle that is used for household
                          transportation or to obtain or continue employment
                          to the extent that the fair market value of the
                          vehicle exceeds $4,600 through September 30, 1996,
                          and $4,650 beginning October 1, 1996; and

    [[Page 110 STAT. 2314]]

                              ``(v) any savings or retirement account
                          (including an individual account), regardless of
                          whether there is a penalty for early withdrawal.
                        ``(C) Excluded vehicles.--A vehicle (and any other
                    property, real or personal, to the extent the property
                    is directly related to the maintenance or use of the
                    vehicle) shall not be included in financial resources
                    under this paragraph if the vehicle is--
                              ``(i) used to produce earned income;
                              ``(ii) necessary for the transportation of a
                          physically disabled household member; or
                              ``(iii) depended on by a household to carry
                          fuel for heating or water for home use and
                          provides the primary source of fuel or water,
                          respectively, for the household.''.

    SEC. 811. VENDOR PAYMENTS FOR TRANSITIONAL HOUSING COUNTED AS INCOME.

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

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

        Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014), as amended
    by title I, is amended by adding at the end the
    following:
        ``(m) Simplified Calculation of Income for the Self-Employed.--
                ``(1) <<NOTE: Regulations.>>  In general.--Not later than 1
            year after the date of enactment of this subsection, the
            Secretary shall establish a procedure by which a State may
            submit a method, designed to not increase Federal costs, for the
            approval of the Secretary, that the Secretary determines will
            produce a reasonable estimate of income excluded under
            subsection (d)(9) in lieu of calculating the actual cost of
            producing self-employment income.
                ``(2) Inclusive of all types of income or limited types of
            income.--The method submitted by a State under paragraph (1) may
            allow a State to estimate income for all types of self-
            employment income or may be limited to 1 or more types of self-
            employment income.
                ``(3) Differences for different types of income.--The method
            submitted by a State under paragraph (1) may differ for
            different types of self-employment income.''.

    SEC. 813. DOUBLED PENALTIES FOR VIOLATING FOOD STAMP PROGRAM
                REQUIREMENTS.

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

    [[Page 110 STAT. 2315]]

    SEC. 814. DISQUALIFICATION OF CONVICTED INDIVIDUALS.

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

    SEC. 815. DISQUALIFICATION.

        (a) In General.--Section 6(d) of the Food Stamp Act of 1977 (7
    U.S.C. 2015(d)) is amended by striking ``(d)(1) Unless otherwise
    exempted by the provisions'' and all that follows through the end of
    paragraph (1) and inserting the following:
        ``(d) Conditions of Participation.--
                ``(1) Work requirements.--
                        ``(A) In general.--No physically and mentally fit
                    individual over the age of 15 and under the age of 60
                    shall be eligible to participate in the food stamp
                    program if the individual--
                              ``(i) refuses, at the time of application and
                          every 12 months thereafter, to register for
                          employment in a manner prescribed by the
                          Secretary;
                              ``(ii) refuses without good cause to
                          participate in an employment and training program
                          established under paragraph (4), to the extent
                          required by the State agency;
                              ``(iii) refuses without good cause to accept
                          an offer of employment, at a site or plant not
                          subject to a strike or lockout at the time of the
                          refusal, at a wage not less than the higher of--
                                        ``(I) the applicable Federal or
                                    State minimum wage; or
                                        ``(II) 80 percent of the wage that
                                    would have governed had the minimum
                                    hourly rate under section 6(a)(1) of the
                                    Fair Labor Standards Act of 1938 (29
                                    U.S.C. 206(a)(1)) been applicable to the
                                    offer of employment;
                              ``(iv) refuses without good cause to provide a
                          State agency with sufficient information to allow
                          the State agency to determine the employment
                          status or the job availability of the individual;
                              ``(v) voluntarily and without good cause--
                                        ``(I) quits a job; or
                                        ``(II) reduces work effort and,
                                    after the reduction, the individual is
                                    working less than 30 hours per week; or
                              ``(vi) fails to comply with section 20.
                        ``(B) Household ineligibility.--If an individual who
                    is the head of a household becomes ineligible to
                    participate in the food stamp program under subparagraph
                    (A), the household shall, at the option of the State
                    agency, become ineligible to participate in the food
                    stamp program for a period, determined by the State
                    agency, that does not exceed the lesser of--

    [[Page 110 STAT. 2316]]

                              ``(i) the duration of the ineligibility of the
                          individual determined under subparagraph (C); or
                              ``(ii) 180 days.
                        ``(C) Duration of ineligibility.--
                              ``(i) First violation.--The first time that an
                          individual becomes ineligible to participate in
                          the food stamp program under subparagraph (A), the
                          individual shall remain ineligible until the later
                          of--
                                        ``(I) the date the individual
                                    becomes eligible under subparagraph (A);
                                        ``(II) the date that is 1 month
                                    after the date the individual became
                                    ineligible; or
                                        ``(III) a date determined by the
                                    State agency that is not later than 3
                                    months after the date the individual
                                    became ineligible.
                              ``(ii) Second violation.--The second time that
                          an individual becomes ineligible to participate in
                          the food stamp program under subparagraph (A), the
                          individual shall remain ineligible until the later
                          of--
                                        ``(I) the date the individual
                                    becomes eligible under subparagraph (A);
                                        ``(II) the date that is 3 months
                                    after the date the individual became
                                    ineligible; or
                                        ``(III) a date determined by the
                                    State agency that is not later than 6
                                    months after the date the individual
                                    became ineligible.
                              ``(iii) Third or subsequent violation.--The
                          third or subsequent time that an individual
                          becomes ineligible to participate in the food
                          stamp program under subparagraph (A), the
                          individual shall remain ineligible until the later
                          of--
                                        ``(I) the date the individual
                                    becomes eligible under subparagraph (A);
                                        ``(II) the date that is 6 months
                                    after the date the individual became
                                    ineligible;
                                        ``(III) a date determined by the
                                    State
                                    agency; or
                                        ``(IV) at the option of the State
                                    agency,
                                    permanently.
                        ``(D) Administration.--
                              ``(i) Good cause.--The Secretary shall
                          determine the meaning of good cause for the
                          purpose of this paragraph.
                              ``(ii) Voluntary quit.--The Secretary shall
                          determine the meaning of voluntarily quitting and
                          reducing work effort for the purpose of this
                          paragraph.
                              ``(iii) Determination by state agency.--
                                        ``(I) In general.--Subject to
                                    subclause (II) and clauses (i) and (ii),
                                    a State agency shall determine--
                                                ``(aa) the meaning of any
                                            term used in subparagraph (A);
                                                ``(bb) the procedures for
                                            determining whether an
                                            individual is in compliance with
                                            a requirement under subparagraph
                                            (A); and

    [[Page 110 STAT. 2317]]

                                                ``(cc) whether an individual
                                            is in compliance with a
                                            requirement under subpara-
                                            graph (A).
                                        ``(II) Not less restrictive.--A
                                    State agency may not use a meaning,
                                    procedure, or determination under
                                    subclause (I) that is less restrictive
                                    on individuals receiving benefits under
                                    this Act than a comparable meaning,
                                    procedure, or determination under a
                                    State program funded under part A of
                                    title IV of the Social Security Act (42
                                    U.S.C. 601 et seq.).
                              ``(iv) Strike against the government.--For the
                          purpose of subparagraph (A)(v), an employee of the
                          Federal Government, a State, or a political
                          subdivision of a State, who is dismissed for
                          participating in a strike against the Federal
                          Government, the State, or the political
                          subdivision of the State shall be considered to
                          have voluntarily quit without good cause.
                              ``(v) Selecting a head of household.--
                                        ``(I) In general.--For purposes of
                                    this paragraph, the State agency shall
                                    allow the household to select any adult
                                    parent of a child in the household as
                                    the head of the household if all adult
                                    household members making application
                                    under the food stamp program agree to
                                    the selection.
                                        ``(II) Time for making
                                    designation.--A household may designate
                                    the head of the household under
                                    subclause (I) each time the household is
                                    certified for participation in the food
                                    stamp program, but may not change the
                                    designation during a certification
                                    period unless there is a change in the
                                    composition of the household.
                              ``(vi) Change in head of household.--If the
                          head of a household leaves the household during a
                          period in which the household is ineligible to
                          participate in the food stamp program under
                          subparagraph (B)--
                                        ``(I) the household shall, if
                                    otherwise eligible, become eligible to
                                    participate in the food stamp program;
                                    and
                                        ``(II) if the head of the household
                                    becomes the head of another household,
                                    the household that becomes headed by the
                                    individual shall become ineligible to
                                    participate in the food stamp program
                                    for the remaining period of
                                    ineligibility.''.

        (b) Conforming Amendment.--
                (1) The second sentence of section 17(b)(2) of the Food
            Stamp Act of 1977 (7 U.S.C. 2026(b)(2)) is amended by striking
            ``6(d)(1)(i)'' and inserting ``6(d)(1)(A)(i)''.
                (2) Section 20 of the Food Stamp Act of 1977 (7 U.S.C. 2029)
            is amended by striking subsection (f) and inserting the
            following:

        ``(f) Disqualification.--An individual or a household may become
    ineligible under section 6(d)(1) to participate in the food stamp
    program for failing to comply with this section.''.

    [[Page 110 STAT. 2318]]

    SEC. 816. CARETAKER EXEMPTION.

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

    SEC. 817. EMPLOYMENT AND TRAINING.

        (a) In General.--Section 6(d)(4) of the Food Stamp Act of 1977 (7
    U.S.C. 2015(d)(4)) is amended--
                (1) by striking ``(4)(A) Not later than April 1, 1987,
            each'' and inserting the following:
                ``(4) Employment and training.--
                        ``(A) In general.--
                              ``(i) Implementation.--Each'';
                (2) in subparagraph (A)--
                        (A) by inserting ``work,'' after ``skills,
                    training,''; and
                        (B) by adding at the end the following:
                              ``(ii) Statewide workforce development
                          system.--Each component of an employment and
                          training program carried out under this paragraph
                          shall be delivered through a statewide workforce
                          development system, unless the component is not
                          available locally through such a system.'';
                (3) in subparagraph (B)--
                        (A) in the matter preceding clause (i), by striking
                    the colon at the end and inserting the following: ``,
                    except that the State agency shall retain the option to
                    apply employment requirements prescribed under this
                    subparagraph to a program applicant at the time of
                    application:'';
                        (B) in clause (i), by striking ``with terms and
                    conditions'' and all that follows through ``time of
                    application''; and
                        (C) in clause (iv)--
                              (i) by striking subclauses (I) and (II); and
                              (ii) by redesignating subclauses (III) and
                          (IV) as subclauses (I) and (II), respectively;
                (4) in subparagraph (D)--
                        (A) in clause (i), by striking ``to which the
                    application'' and all that follows through ``30 days or
                    less'';
                        (B) in clause (ii), by striking ``but with respect''
                    and all that follows through ``child care''; and
                        (C) in clause (iii), by striking ``, on the basis
                    of'' and all that follows through ``clause (ii)'' and
                    inserting ``the exemption continues to be valid'';
                (5) in subparagraph (E), by striking the third sentence;
                (6) in subparagraph (G)--
                        (A) by striking ``(G)(i) The State'' and inserting
                    ``(G) The State''; and
                        (B) by striking clause (ii);
                (7) in subparagraph (H), by striking ``(H)(i) The
            Secretary'' and all that follows through ``(ii) Federal funds''
            and inserting ``(H) Federal funds'';
                (8) in subparagraph (I)(i)(II), by striking ``, or was in
            operation,'' and all that follows through ``Social Security
            Act'' and

    [[Page 110 STAT. 2319]]

            inserting the following: ``), except that no such payment or
            reimbursement shall exceed the applicable local market rate'';
                (9)(A) by striking subparagraphs (K) and (L) and inserting
            the following:
                        ``(K) Limitation on funding.--Notwithstanding any
                    other provision of this paragraph, the amount of funds a
                    State agency uses to carry out this paragraph (including
                    funds used to carry out subparagraph (I)) for
                    participants who are receiving benefits under a State
                    program funded under part A of title IV of the Social
                    Security Act (42 U.S.C. 601 et seq.) shall not exceed
                    the amount of funds the State agency used in fiscal year
                    1995 to carry
                    out this paragraph for participants who were receiving
                    benefits in fiscal year 1995 under a State program
                    funded under part A of title IV of the Act (42 U.S.C.
                    601 et seq.).''; and
                (B) by redesignating subparagraphs (M) and (N) as
            subparagraphs (L) and (M), respectively; and
                (10) in subparagraph (L), as so redesignated--
                        (A) by striking ``(L)(i) The Secretary'' and
                    inserting ``(L) The Secretary''; and
                        (B) by striking clause (ii).

        (b) Funding.--Section 16(h) of the Food Stamp Act of 1977 (7 U.S.C.
    2025(h)) is amended by striking ``(h)(1)(A) The Secretary'' and all that
    follows through the end of paragraph (1) and inserting the following:
        ``(h) Funding of Employment and Training Programs.--
                ``(1) In general.--
                        ``(A) Amounts.--To carry out employment and training
                    programs, the Secretary shall reserve for allocation to
                    State agencies from funds made available for each fiscal
                    year under section 18(a)(1) the amount of--
                              ``(i) for fiscal year 1996, $75,000,000;
                              ``(ii) for fiscal year 1997, $79,000,000;
                              ``(iii) for fiscal year 1998, $81,000,000;
                              ``(iv) for fiscal year 1999, $84,000,000;
                              ``(v) for fiscal year 2000, $86,000,000;
                              ``(vi) for fiscal year 2001, $88,000,000; and
                              ``(vii) for fiscal year 2002, $90,000,000.
                        ``(B) Allocation.--The Secretary shall allocate the
                    amounts reserved under subparagraph (A) among the State
                    agencies using a reasonable formula (as determined by
                    the Secretary) that gives consideration to the
                    population in each State affected by section 6(o).
                        ``(C) Reallocation.--
                              ``(i) Notification.--A State agency shall
                          promptly notify the Secretary if the State agency
                          determines that the State agency will not expend
                          all of the funds allocated to the State agency
                          under subparagraph (B).
                              ``(ii) Reallocation.--On notification under
                          clause (i), the Secretary shall reallocate the
                          funds that the State agency will not expend as the
                          Secretary considers appropriate and equitable.
                        ``(D) Minimum allocation.--Notwithstanding
                    subparagraphs (A) through (C), the Secretary shall
                    ensure that each State agency operating an employment
                    and train

    [[Page 110 STAT. 2320]]

                    ing program shall receive not less than $50,000 for each
                    fiscal year.''.

        (c) Additional Matching Funds.--Section 16(h)(2) of the Food Stamp
    Act of 1977 (7 U.S.C. 2025(h)(2)) is amended by inserting before the
    period at the end the following: ``, including the costs for case
    management and casework to facilitate the transition from economic
    dependency to self-sufficiency through work''.
        (d) Reports.--Section 16(h) of the Food Stamp Act of 1977 (7 U.S.C.
    2025(h)) is amended--
                (1) in paragraph (5)--
                        (A) by striking ``(5)(A) The Secretary'' and
                    inserting ``(5) The Secretary''; and
                        (B) by striking subparagraph (B); and
                (2) by striking paragraph (6).

    SEC. 818. FOOD STAMP ELIGIBILITY.

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

    SEC. 819. COMPARABLE TREATMENT FOR DISQUALIFICATION.

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

        (b) State Plan Provisions.--Section 11(e) of the Food Stamp Act of
    1977 (7 U.S.C. 2020(e)) is amended--
                (1) in paragraph (24), by striking ``and'' at the end;
                (2) in paragraph (25), by striking the period at the end and
            inserting a semicolon; and
                (3) by adding at the end the following:
                ``(26) the guidelines the State agency uses in carrying out
            section 6(i); and''.

        (c) Conforming Amendment.--Section 6(d)(2)(A) of the Food Stamp Act
    of 1977 (7 U.S.C. 2015(d)(2)(A)) is amended by striking ``that is
    comparable to a requirement of paragraph (1)''.

    [[Page 110 STAT. 2321]]

    SEC. 820. DISQUALIFICATION FOR RECEIPT OF MULTIPLE FOOD STAMP BENEFITS.

        Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended
    by section 819, is amended by adding at the end the following:
        ``(j) Disqualification for Receipt of Multiple Food Stamp
    Benefits.--An individual shall be ineligible to participate in the food
    stamp program as a member of any household for a 10-year period if the
    individual is found by a State agency to have made, or is convicted in a
    Federal or State court of having made, a fraudulent statement or
    representation with respect to the identity or place of residence of the
    individual in order to receive multiple benefits simultaneously under
    the food stamp program.''.

    SEC. 821. DISQUALIFICATION OF FLEEING FELONS.

        Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended
    by section 820, is amended by adding at the end the following:
        ``(k) Disqualification of Fleeing Felons.--No member of a household
    who is otherwise eligible to participate in the food stamp program shall
    be eligible to participate in the program as a member of that or any
    other household during any period during which the individual is--
                ``(1) fleeing to avoid prosecution, or custody or
            confinement after conviction, under the law of the place from
            which the individual is fleeing, for a crime, or attempt to
            commit a crime, that is a felony under the law of the place from
            which the individual is fleeing or that, in the case of New
            Jersey, is a high misdemeanor under the law of New Jersey; or
                ``(2) violating a condition of probation or parole imposed
            under a Federal or State law.''.

    SEC. 822. COOPERATION WITH CHILD SUPPORT AGENCIES.

        Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended
    by section 821, is amended by adding at the end the following:
        ``(l) Custodial Parent's Cooperation With Child Support Agencies.--
                ``(1) In general.--At the option of a State agency, subject
            to paragraphs (2) and (3), no natural or adoptive parent or
            other individual (collectively referred to in this subsection as
            `the individual') who is living with and exercising parental
            control over a child under the age of 18 who has an absent
            parent shall be eligible to participate in the food stamp
            program unless the individual cooperates with the State agency
            administering the program established under part D of title IV
            of the Social Security Act (42 U.S.C. 651 et seq.)--
                        ``(A) in establishing the paternity of the child (if
                    the child is born out of wedlock); and
                        ``(B) in obtaining support for--
                              ``(i) the child; or
                              ``(ii) the individual and the child.
                ``(2) <<NOTE: Regulations.>>  Good cause for
            noncooperation.--Paragraph (1) shall not apply to the individual
            if good cause is found for refusing to cooperate, as determined
            by the State agency in accordance with standards prescribed by
            the Secretary in consultation with the Secretary of Health and
            Human Services.

    [[Page 110 STAT. 2322]]

            The standards shall take into consideration circumstances under
            which cooperation may be against the best interests of the
            child.
                ``(3) Fees.--Paragraph (1) shall not require the payment of
            a fee or other cost for services provided under part D of title
            IV of the Social Security Act (42 U.S.C. 651 et seq.).

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

    SEC. 823. DISQUALIFICATION RELATING TO CHILD SUPPORT ARREARS.

        Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended
    by section 822, is amended by adding at the end the following:
        ``(n) Disqualification for Child Support Arrears.--
                ``(1) In general.--At the option of a State agency, no
            individual shall be eligible to participate in the food stamp
            program as a member of any household during any month that the
            individual is delinquent in any payment due under a court order
            for the support of a child of the individual.
                ``(2) Exceptions.--Paragraph (1) shall not apply if--
                        ``(A) a court is allowing the individual to delay
                    payment; or
                        ``(B) the individual is complying with a payment
                    plan approved by a court or the State agency designated
                    under part D of title IV of the Social Security Act (42
                    U.S.C. 651 et seq.) to provide support for the child of
                    the
                    individual.''.

    [[Page 110 STAT. 2323]]

    SEC. 824. WORK REQUIREMENT.

        (a) In General.--Section 6 of the Food Stamp Act of 1977 (7 U.S.C.
    2015), as amended by section 823, is amended by adding at the end the
    following:
        ``(o) Work Requirement.--
                ``(1) Definition of work program.--In this subsection, the
            term `work program' means--
                        ``(A) a program under the Job Training Partnership
                    Act (29 U.S.C. 1501 et seq.);
                        ``(B) a program under section 236 of the Trade Act
                    of 1974 (19 U.S.C. 2296); and
                        ``(C) a program of employment and training operated
                    or supervised by a State or political subdivision of a
                    State that meets standards approved by the Governor of
                    the State, including a program under subsection (d)(4),
                    other than a job search program or a job search training
                    program.
                ``(2) Work requirement.--Subject to the other provisions of
            this subsection, no individual shall be eligible to participate
            in the food stamp program as a member of any household if,
            during the preceding 36-month period, the individual received
            food stamp benefits for not less than 3 months (consecutive or
            otherwise) during which the individual did not--
                        ``(A) work 20 hours or more per week, averaged
                    monthly;
                        ``(B) participate in and comply with the
                    requirements of a work program for 20 hours or more per
                    week, as determined by the State agency;
                        ``(C) participate in and comply with the
                    requirements of a program under section 20 or a
                    comparable program established by a State or political
                    subdivision of a
                    State; or
                        ``(D) receive benefits pursuant to paragraph (3),
                    (4), or (5).
                ``(3) Exception.--Paragraph (2) shall not apply to an
            individual if the individual is--
                        ``(A) under 18 or over 50 years of age;
                        ``(B) medically certified as physically or mentally
                    unfit for employment;
                        ``(C) a parent or other member of a household with
                    responsibility for a dependent child;
                        ``(D) otherwise exempt under subsection (d)(2); or
                        ``(E) a pregnant woman.
                ``(4) Waiver.--
                        ``(A) In general.--On the request of a State agency,
                    the Secretary may waive the applicability of paragraph
                    (2) to any group of individuals in the State if the
                    Secretary makes a determination that the area in which
                    the indi-
                    viduals reside--
                              ``(i) has an unemployment rate of over 10 per-
                          cent; or
                              ``(ii) does not have a sufficient number of
                          jobs to provide employment for the individuals.
                        ``(B) Report.--The Secretary shall report the basis
                    for a waiver under subparagraph (A) to the Committee on
                    Agriculture of the House of Representatives and the
                    Committee on Agriculture, Nutrition, and Forestry of the
                    Senate.

    [[Page 110 STAT. 2324]]

                ``(5) Subsequent eligibility.--
                        ``(A) Regaining eligibility.--An individual denied
                    eligibility under paragraph (2) shall regain eligibility
                    to participate in the food stamp program if, during a
                    30-day period, the individual--
                              ``(i) works 80 or more hours;
                              ``(ii) participates in and complies with the
                          requirements of a work program for 80 or more
                          hours, as determined by a State agency; or
                              ``(iii) participates in and complies with the
                          requirements of a program under section 20 or a
                          comparable program established by a State or
                          political subdivision of a State.
                        ``(B) Maintaining eligibility.--An individual who
                    regains eligibility under subparagraph (A) shall remain
                    eligible as long as the individual meets the
                    requirements of subparagraph (A), (B), or (C) of
                    paragraph (2).
                        ``(C) Loss of employment.--
                              ``(i) In general.--An individual who regained
                          eligibility under subparagraph (A) and who no
                          longer meets the requirements of subparagraph (A),
                          (B), or (C) of paragraph (2) shall remain eligible
                          for a consecutive 3-month period, beginning on the
                          date the individual first notifies the State
                          agency that the individual no longer meets the
                          requirements of subparagraph (A), (B), or (C) of
                          paragraph (2).
                              ``(ii) Limitation.--An individual shall not
                          receive any benefits pursuant to clause (i) for
                          more than a single 3-month period in any 36-month
                          period.
                ``(6) Other program rules.--Nothing in this subsection shall
            make an individual eligible for benefits under this Act if the
            individual is not otherwise eligible for benefits under the
            other provisions of this Act.''.

        (b) <<NOTE: 7 USC 2015 note.>>  Transition Provision.--The term
    ``preceding 36-month period'' in section 6(o) of the Food Stamp Act of
    1977, as added by subsection (a), does not include, with respect to a
    State, any period before the earlier of--
                (1) the date the State notifies recipients of food stamp
            benefits of the application of section 6(o); or
                (2) the date that is 3 months after the date of enactment of
            this Act.

    SEC. 825. ENCOURAGEMENT OF ELECTRONIC BENEFIT TRANSFER
                SYSTEMS.

        (a) In General.--Section 7(i) of the Food Stamp Act of 1977 (7
    U.S.C. 2016(i)) is amended--
                (1) by striking ``(i)(1)(A) Any State'' and all that follows
            through the end of paragraph (1) and inserting the following:

        ``(i) Electronic Benefit Transfers.--
                ``(1) In general.--
                        ``(A) Implementation.--Not later than October 1,
                    2002, each State agency shall implement an electronic
                    benefit transfer system under which household benefits
                    determined under section 8(a) or 26 are issued from and
                    stored in a central databank, unless the Secretary
                    provides a waiver for a State agency that faces unusual
                    barriers to implementing an electronic benefit transfer
                    system.

    [[Page 110 STAT. 2325]]

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

    [[Page 110 STAT. 2326]]

                    the household or any authorized representative of the
                    household may utilize the card.
                ``(10) Applicable law.--Disclosures, protections,
            responsibilities, and remedies established by the Federal
            Reserve Board under section 904 of the Electronic Fund Transfer
            Act (15 U.S.C. 1693b) shall not apply to benefits under this Act
            delivered through any electronic benefit transfer system.
                ``(11) Application of anti-tying restrictions to electronic
            benefit transfer systems.--
                        ``(A) Definitions.--In this paragraph:
                              ``(i) Affiliate.--The term `affiliate' has the
                          meaning provided the term in section 2(k) of the
                          Bank Holding Company Act of 1956 (12 U.S.C.
                          1841(k)).
                              ``(ii) Company.--The term `company' has the
                          meaning provided the term in section 106(a) of the
                          Bank Holding Company Act Amendments of 1970 (12
                          U.S.C. 1971), but shall not include a bank, a bank
                          holding company, or any subsidiary of a bank
                          holding company.
                              ``(iii) Electronic benefit transfer service.--
                          The term `electronic benefit transfer service'
                          means the processing of electronic transfers of
                          household
                          benefits, determined under section 8(a) or 26, if
                          the benefits are--
                                        ``(I) issued from and stored in a
                                    central databank;
                                        ``(II) electronically accessed by
                                    household members at the point of sale;
                                    and
                                        ``(III) provided by a Federal or
                                    State government.
                              ``(iv) Point-of-sale service.--The term
                          `point-of-sale service' means any product or
                          service related to the electronic authorization
                          and processing of payments for merchandise at a
                          retail food store, including credit or debit card
                          services, automated teller machines, point-of-sale
                          terminals, or access to on-line systems.
                        ``(B) Restrictions.--A company may not sell or
                    provide electronic benefit transfer services, or fix or
                    vary the consideration for electronic benefit transfer
                    services, on the condition or requirement that the
                    customer--
                              ``(i) obtain some additional point-of-sale
                          service from the company or an affiliate of the
                          company; or
                              ``(ii) not obtain some additional point-of-
                          sale service from a competitor of the company or
                          competitor of any affiliate of the company.
                        ``(C) Consultation with the federal reserve board.--
                    Before promulgating regulations or interpretations of
                    regulations to carry out this paragraph, the Secretary
                    shall consult with the Board of Governors of the Federal
                    Reserve System.''.

        (b) Sense of Congress.--It is the sense of Congress that a State
    that operates an electronic benefit transfer system under the Food Stamp
    Act of 1977 (7 U.S.C. 2011 et seq.) should operate the system in a
    manner that is compatible with electronic benefit transfer systems
    operated by other States.

    [[Page 110 STAT. 2327]]

    SEC. 826. VALUE OF MINIMUM ALLOTMENT.

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

    SEC. 827. BENEFITS ON RECERTIFICATION.

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

    SEC. 828. OPTIONAL COMBINED ALLOTMENT FOR EXPEDITED HOUSEHOLDS.

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

    SEC. 829. FAILURE TO COMPLY WITH OTHER MEANS-TESTED PUBLIC ASSISTANCE
                PROGRAMS.

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

    SEC. 830. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN CENTERS.

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

    [[Page 110 STAT. 2328]]

                        ``(B) the individual, if the individual leaves the
                    center.
                ``(2) Direct payment.--A State agency may require an
            individual referred to in paragraph (1) to designate the center
            in which the individual resides as the authorized representative
            of the individual for the purpose of receiving an allotment.''.

    SEC. 831. CONDITION PRECEDENT FOR APPROVAL OF RETAIL FOOD STORES AND
                WHOLESALE FOOD CONCERNS.

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

    SEC. 832. AUTHORITY TO ESTABLISH AUTHORIZATION PERIODS.

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

    SEC. 833. INFORMATION FOR VERIFYING ELIGIBILITY FOR AUTHORIZATION.

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

    SEC. 834. WAITING PERIOD FOR STORES THAT FAIL TO MEET AUTHORIZATION
                CRITERIA.

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

    [[Page 110 STAT. 2329]]

    SEC. 835. OPERATION OF FOOD STAMP OFFICES.

        Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020), as amended
    by sections 809(b) and 819(b), is amended--
                (1) in subsection (e)--
                        (A) by striking paragraph (2) and inserting the
                    following:
                ``(2)(A) <<NOTE: Regulations.>>  that the State agency shall
            establish procedures governing the operation of food stamp
            offices that the State agency determines best serve households
            in the State, including households with special needs, such as
            households with elderly or disabled members, households in rural
            areas with low-income members, homeless individuals, households
            residing on reservations, and households in areas in which a
            substantial number of members of low-income households speak a
            language other than English.
                ``(B) In carrying out subparagraph (A), a State agency--
                        ``(i) shall provide timely, accurate, and fair
                    service to applicants for, and participants in, the food
                    stamp program;
                        ``(ii) shall develop an application containing the
                    information necessary to comply with this Act;
                        ``(iii) shall permit an applicant household to apply
                    to participate in the program on the same day that the
                    household first contacts a food stamp office in person
                    during office hours;
                        ``(iv) shall consider an application that contains
                    the name, address, and signature of the applicant to be
                    filed on the date the applicant submits the application;
                        ``(v) shall require that an adult representative of
                    each applicant household certify in writing, under
                    penalty of perjury, that--
                              ``(I) the information contained in the
                          application is true; and
                              ``(II) all members of the household are
                          citizens or are aliens eligible to receive food
                          stamps under section 6(f);
                        ``(vi) shall provide a method of certifying and
                    issuing coupons to eligible homeless individuals, to
                    ensure that participation in the food stamp program is
                    limited to eligible households; and
                        ``(vii) may establish operating procedures that vary
                    for local food stamp offices to reflect regional and
                    local differences within the State.
                ``(C) Nothing in this Act shall prohibit the use of
            signatures provided and maintained electronically, storage of
            records using automated retrieval systems only, or any other
            feature of a State agency's application system that does not
            rely exclusively on the collection and retention of paper
            applications or other records.
                ``(D) The signature of any adult under this paragraph shall
            be considered sufficient to comply with any provision of Federal
            law requiring a household member to sign an application or
            statement;'';
                        (B) in paragraph (3)--
                              (i) by striking ``shall--'' and all that
                          follows through ``provide each'' and inserting
                          ``shall provide each''; and
                              (ii) by striking ``(B) assist'' and all that
                          follows through ``representative of the State
                          agency;'';

    [[Page 110 STAT. 2330]]

                        (C) by striking paragraphs (14) and (25);
                        (D)(i) by redesignating paragraphs (15) through (24)
                    as paragraphs (14) through (23), respectively; and
                        (ii) by redesignating paragraph (26), as paragraph
                    (24); and
                (2) in subsection (i)--
                        (A) by striking ``(i) Notwithstanding'' and all that
                    follows through ``(2)'' and inserting the following:

        ``(i) Application and Denial Procedures.--
                ``(1) Application procedures.--Notwithstanding any other
            provision of law,''; and
                        (B) by striking ``; (3) households'' and all that
                    follows through ``title IV of the Social Security Act.
                    No'' and inserting a period and the following:
                ``(2) Denial and termination.--Except in a case of
            disqualification as a penalty for failure to comply with a
            public assistance program rule or regulation, no''.

    SEC. 836. STATE EMPLOYEE AND TRAINING STANDARDS.

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

    SEC. 837. EXCHANGE OF LAW ENFORCEMENT INFORMATION.

        Section 11(e)(8) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(8))
    is amended--
                (1) by striking ``that (A) such'' and inserting the follow-
            ing: ``that--
                        ``(A) the'';
                (2) by striking ``law, (B) notwithstanding'' and inserting
            the following: ``law;
                        ``(B) notwithstanding'';
                (3) by striking ``Act, and (C) such'' and inserting the
            following: ``Act;
                        ``(C) the''; and
                (4) by adding at the end the following:
                        ``(D) notwithstanding any other provision of law,
                    the address, social security number, and, if available,
                    photograph of any member of a household shall be made
                    available, on request, to any Federal, State, or local
                    law enforcement officer if the officer furnishes the
                    State agency with the name of the member and notifies
                    the agency that--
                              ``(i) the member--
                                        ``(I) is fleeing to avoid
                                    prosecution, or custody or confinement
                                    after conviction, for a crime (or
                                    attempt to commit a crime) that, under
                                    the law of the place the member is
                                    fleeing, is a felony (or, in the case of
                                    New Jersey, a high misdemeanor), or is
                                    violating a condition of probation or
                                    parole imposed under Federal or State
                                    law; or

    [[Page 110 STAT. 2331]]

                                        ``(II) has information that is
                                    necessary for the officer to conduct an
                                    official duty related to subclause (I);
                              ``(ii) locating or apprehending the member is
                          an official duty; and
                              ``(iii) the request is being made in the
                          proper exercise of an official duty; and
                        ``(E) the safeguards shall not prevent compliance
                    with paragraph (16);''.

    SEC. 838. EXPEDITED COUPON SERVICE.

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

    SEC. 839. WITHDRAWING FAIR HEARING REQUESTS.

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

    SEC. 840. INCOME, ELIGIBILITY, AND IMMIGRATION STATUS VERIFICATION
                SYSTEMS.

        Section 11 of the Food Stamp Act of 1977 (7 U.S.C. 2020) is
    amended--
                (1) in subsection (e)(18), as redesignated by section
            835(1)(D)--
                        (A) by striking ``that information is'' and
                    inserting ``at the option of the State agency, that
                    information may be''; and
                        (B) by striking ``shall be requested'' and inserting
                    ``may be requested''; and
                (2) by adding at the end the following:

        ``(p) State Verification Option.--Notwithstanding any other
    provision of law, in carrying out the food stamp program, a State agency
    shall not be required to use an income and eligibility or an immigration
    status verification system established under section 1137 of the Social
    Security Act (42 U.S.C. 1320b-7).''.

    SEC. 841. INVESTIGATIONS.

        Section 12(a) of the Food Stamp Act of 1977 (7 U.S.C. 2021(a)) is
    amended by adding at the end the
    following: <<NOTE: Regulations.>> ``Regulations issued pursuant to this
    Act shall provide criteria for the finding of a violation and the
    suspension or disqualification of a retail food store or wholesale food
    concern on the basis of evidence that may

    [[Page 110 STAT. 2332]]

    include facts established through on-site investigations, inconsistent
    redemption data, or evidence obtained through a transaction report under
    an electronic benefit transfer system.''.

    SEC. 842. DISQUALIFICATION OF RETAILERS WHO INTENTIONALLY SUBMIT
                FALSIFIED APPLICATIONS.

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

    SEC. 843. DISQUALIFICATION OF RETAILERS WHO ARE DISQUALIFIED UNDER THE
                WIC PROGRAM.

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

    SEC. 844. COLLECTION OF OVERISSUANCES.

        (a) Collection of Overissuances.--Section 13 of the Food Stamp Act
    of 1977 (7 U.S.C. 2022) is amended--
                (1) by striking subsection (b) and inserting the following:

        ``(b) Collection of Overissuances.--
                ``(1) In general.--Except as otherwise provided in this
            subsection, a State agency shall collect any overissuance of
            coupons issued to a household by--
                        ``(A) reducing the allotment of the household;
                        ``(B) withholding amounts from unemployment
                    compensation from a member of the household under
                    subsection (c);
                        ``(C) recovering from Federal pay or a Federal
                    income tax refund under subsection (d); or
                        ``(D) any other means.
                ``(2) Cost effectiveness.--Paragraph (1) shall not apply if
            the State agency demonstrates to the satisfaction of the

    [[Page 110 STAT. 2333]]

            Secretary that all of the means referred to in paragraph (1) are
            not cost effective.
                ``(3) Maximum reduction absent fraud.--If a household
            received an overissuance of coupons without any member of the
            household being found ineligible to participate in the program
            under section 6(b)(1) and a State agency elects to reduce the
            allotment of the household under paragraph (1)(A), the State
            agency shall not reduce the monthly allotment of the household
            under paragraph (1)(A) by an amount in excess of the greater
            of--
                        ``(A) 10 percent of the monthly allotment of the
                    household; or
                        ``(B) $10.
                ``(4) Procedures.--A State agency shall collect an
            overissuance of coupons issued to a household under paragraph
            (1) in accordance with the requirements established by the State
            agency for providing notice, electing a means of payment, and
            establishing a time schedule for payment.''; and
                (2) in subsection (d)--
                        (A) by striking ``as determined under subsection (b)
                    and except for claims arising from an error of the State
                    agency,'' and inserting ``, as determined under
                    subsection (b)(1),''; and
                        (B) by inserting before the period at the end the
                    following: ``or a Federal income tax refund as
                    authorized by section 3720A of title 31, United States
                    Code''.

        (b) Conforming Amendments.--Section 11(e)(8)(C) of the Food Stamp
    Act of 1977 (7 U.S.C. 2020(e)(8)(C)) is amended--
                (1) by striking ``and excluding claims'' and all that
            follows through ``such section''; and
                (2) by inserting before the semicolon at the end the
            following: ``or a Federal income tax refund as authorized by
            section 3720A of title 31, United States Code''.

        (c) Retention Rate.--The proviso of the first sentence of section
    16(a) of the Food Stamp Act of 1977 (7 U.S.C. 2025(a)) is amended by
    striking ``25 percent during the period beginning
    October 1, 1990'' and all that follows through ``section 13(b)(2) which
    arise'' and inserting ``35 percent of the value of all funds or
    allotments recovered or collected pursuant to sections 6(b)
    and 13(c) and 20 percent of the value of any other funds or allotments
    recovered or collected, except the value of funds or allotments
    recovered or collected that arise''.

    SEC. 845. AUTHORITY TO SUSPEND STORES VIOLATING PROGRAM REQUIREMENTS
                PENDING ADMINISTRATIVE AND JUDICIAL REVIEW.

        Section 14(a) of the Food Stamp Act of 1977 (7 U.S.C. 2023(a)) is
    amended--
                (1) by redesignating the first through seventeenth sentences
            as paragraphs (1) through (17), respectively; and
                (2) by adding at the end the following:
                ``(18) <<NOTE: Effective date.>>  Suspension of stores
            pending review.--Notwithstanding any other provision of this
            subsection, any permanent disqualification of a retail food
            store or wholesale food concern under paragraph (3) or (4) of
            section 12(b) shall be effective from the date of receipt of the
            notice of disqualification. If the disqualification is reversed
            through administrative or

    [[Page 110 STAT. 2334]]

            judicial review, the Secretary shall not be liable for the value
            of any sales lost during the disqualification period.''.

    SEC. 846. EXPANDED CRIMINAL FORFEITURE FOR VIOLATIONS.

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

    SEC. 847. LIMITATION ON FEDERAL MATCH.

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

    SEC. 848. STANDARDS FOR ADMINISTRATION.

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

    [[Page 110 STAT. 2335]]

                (2) Section 16(c)(1)(B) of the Food Stamp Act of 1977 (7
            U.S.C. 2025(c)(1)(B)) is amended by striking ``pursuant to
            subsection (b)''.

    SEC. 849. WORK SUPPLEMENTATION OR SUPPORT PROGRAM.

        Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025), as amended
    by section 848(a), is amended by inserting after subsection (a) the
    following:
        ``(b) Work Supplementation or Support Program.--
                ``(1) Definition of work supplementation or support
            program.--In this subsection, the term `work supplementation or
            support program' means a program under which, as determined by
            the Secretary, public assistance (including any benefits
            provided under a program established by the State and the food
            stamp program) is provided to an employer to be used for hiring
            and employing a public assistance recipient who was not employed
            by the employer at the time the public assistance recipient
            entered the program.
                ``(2) Program.--A State agency may elect to use an amount
            equal to the allotment that would otherwise be issued to a
            household under the food stamp program, but for the operation of
            this subsection, for the purpose of subsidizing or supporting a
            job under a work supplementation or support program established
            by the State.
                ``(3) Procedure.--If a State agency makes an election under
            paragraph (2) and identifies each household that participates in
            the food stamp program that contains an individual who is
            participating in the work supplementation or support program--
                        ``(A) the Secretary shall pay to the State agency an
                    amount equal to the value of the allotment that the
                    household would be eligible to receive but for the
                    operation of this subsection;
                        ``(B) the State agency shall expend the amount
                    received under subparagraph (A) in accordance with the
                    work supplementation or support program in lieu of
                    providing the allotment that the household would receive
                    but for the operation of this subsection;
                        ``(C) for purposes of--
                              ``(i) sections 5 and 8(a), the amount received
                          under this subsection shall be excluded from
                          household income and resources; and
                              ``(ii) section 8(b), the amount received under
                          this subsection shall be considered to be the
                          value of an allotment provided to the household;
                          and
                        ``(D) the household shall not receive an allotment
                    from the State agency for the period during which the
                    member continues to participate in the work
                    supplementation or support program.
                ``(4) Other work requirements.--No individual shall be
            excused, by reason of the fact that a State has a work
            supplementation or support program, from any work requirement
            under section 6(d), except during the periods in which the
            individual is employed under the work supplementation or support
            program.
                ``(5) Length of participation.--A State agency shall
            provide a description of how the public assistance recipients

    [[Page 110 STAT. 2336]]

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

    SEC. 850. WAIVER AUTHORITY.

        Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(1))
    is amended--
                (1) by redesignating subparagraph (B) as subparagraph (C);
            and
                (2) in subparagraph (A)--
                        (A) in the first sentence, by striking ``benefits to
                    eligible households, including'' and inserting the
                    following: ``benefits to eligible households, and may
                    waive any requirement of this Act to the extent
                    necessary for the project to be conducted.
                        ``(B) Project requirements.--
                              ``(i) Program goal.--The Secretary may not
                          conduct a project under subparagraph (A) unless--
                                        ``(I) the project is consistent with
                                    the goal of the food stamp program of
                                    providing food assistance to raise
                                    levels of nutrition among low-income
                                    individuals; and
                                        ``(II) the project includes an
                                    evaluation to determine the effects of
                                    the project.
                              ``(ii) Permissible projects.--The Secretary
                          may conduct a project under subparagraph (A) to--
                                        ``(I) improve program
                                    administration;
                                        ``(II) increase the self-sufficiency
                                    of food stamp recipients;
                                        ``(III) test innovative welfare
                                    reform strate-
                                    gies; or
                                        ``(IV) allow greater conformity with
                                    the rules of other programs than would
                                    be allowed but for this paragraph.
                              ``(iii) Restrictions on permissible
                          projects.--If the Secretary finds that a project
                          under subparagraph (A) would reduce benefits by
                          more than 20 percent for more than 5 percent of
                          households in the area subject to the project (not
                          including any household whose benefits are reduced
                          due to a failure to comply with work or other
                          conduct requirements), the project--
                                        ``(I) may not include more than 15
                                    percent of the State's food stamp
                                    households; and
                                        ``(II) shall continue for not more
                                    than 5 years after the date of
                                    implementation, unless the Secretary
                                    approves an extension requested by the
                                    State agency at any time.
                              ``(iv) Impermissible projects.--The Secretary
                          may not conduct a project under subparagraph (A)
                          that--
                                        ``(I) involves the payment of the
                                    value of an allotment in the form of
                                    cash, unless the project was approved
                                    prior to the date of enactment of this
                                    subparagraph;

    [[Page 110 STAT. 2337]]

                                        ``(II) has the effect of
                                    substantially transferring funds made
                                    available under this Act to services or
                                    benefits provided primarily through
                                    another public assistance program, or
                                    using the funds for any purpose other
                                    than the purchase of food, program
                                    administration, or an employment or
                                    training program;
                                        ``(III) is inconsistent with--
                                                ``(aa) the last 2 sentences
                                            of section 3(i);
                                                ``(bb) the last sentence of
                                            section 5(a), insofar as a
                                            waiver denies assistance to an
                                            otherwise eligible household or
                                            individual if the household or
                                            individual has not failed to
                                            comply with any work,
                                            behavioral, or other conduct
                                            requirement under this or
                                            another program;
                                                ``(cc) section 5(c)(2);
                                                ``(dd) paragraph (2)(B),
                                            (4)(F)(i), or (4)(K) of section
                                            6(d);
                                                ``(ee) section 8(b);
                                                ``(ff) section 11(e)(2)(B);
                                                ``(gg) the time standard
                                            under section 11(e)(3);
                                                ``(hh) subsection (a), (c),
                                            (g), (h)(2), or (h)(3) of
                                            section 16;
                                                ``(ii) this paragraph; or
                                                ``(jj) subsection (a)(1) or
                                            (g)(1) of sec-
                                            tion 20;
                                        ``(IV) modifies the operation of
                                    section 5 so as to have the effect of--
                                                ``(aa) increasing the
                                            shelter deduction to households
                                            with no out-of-pocket housing
                                            costs or housing costs that
                                            consume a low percentage of the
                                            household's income; or
                                                ``(bb) absolving a State
                                            from acting with reasonable
                                            promptness on substantial
                                            reported changes in income or
                                            household size (except that this
                                            subclause shall not apply with
                                            regard to changes related to
                                            food stamp deductions);
                                        ``(V) is not limited to a specific
                                    time
                                    period; or
                                        ``(VI) waives a provision of section
                                    26.
                              ``(v) Additional included projects.--A pilot
                          or experimental project may include'';
                        (B) by striking ``to aid to families with dependent
                    children under part A of title IV of the Social Security
                    Act'' and inserting ``are receiving assistance under a
                    State program funded under part A of title IV of the
                    Social Security Act (42 U.S.C. 601 et seq.)''; and
                        (C) by striking ``coupons. The Secretary'' and all
                    that follows through ``Any pilot'' and inserting the
                    following: ``coupons.
                              ``(vi) Cash payment pilot projects.--Any
                          pilot''.

    [[Page 110 STAT. 2338]]

    SEC. 851. RESPONSE TO WAIVERS.

        Section 17(b)(1) of the Food Stamp Act of 1977 (7 U.S.C.
    2026(b)(1)), as amended by section 850, is amended by adding at the end
    the following:
                        ``(D) Response to waivers.--
                              ``(i) Response.--Not later than 60 days after
                          the date of receiving a request for a waiver under
                          subparagraph (A), the Secretary shall provide a
                          response that--
                                        ``(I) approves the waiver request;
                                        ``(II) denies the waiver request and
                                    describes any modification needed for
                                    approval of the waiver request;
                                        ``(III) denies the waiver request
                                    and describes the grounds for the
                                    denial; or
                                        ``(IV) requests clarification of the
                                    waiver request.
                              ``(ii) Failure to respond.--If the Secretary
                          does not provide a response in accordance with
                          clause (i), the waiver shall be considered
                          approved, unless the approval is specifically
                          prohibited by this Act.
                              ``(iii) Notice of denial.--On denial of a
                          waiver request under clause (i)(III), the
                          Secretary shall provide a copy of the waiver
                          request and a description of the reasons for the
                          denial to the Committee on Agriculture of the
                          House of Representatives and the Committee on
                          Agriculture, Nutrition, and Forestry of the
                          Senate.''.

    SEC. 852. EMPLOYMENT INITIATIVES PROGRAM.

        Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is amended
    by striking subsection (d) and inserting the following:
        ``(d) Employment Initiatives Program.--
                ``(1) Election to participate.--
                        ``(A) In general.--Subject to the other provisions
                    of this subsection, a State may elect to carry out an
                    employment initiatives program under this subsection.
                        ``(B) Requirement.--A State shall be eligible to
                    carry out an employment initiatives program under this
                    subsection only if not less than 50 percent of the
                    households in the State that received food stamp
                    benefits during the summer of 1993 also received
                    benefits under a State program funded under part A of
                    title IV of the Social Security Act (42 U.S.C. 601 et
                    seq.) during the summer of 1993.
                ``(2) Procedure.--
                        ``(A) In general.--A State that has elected to carry
                    out an employment initiatives program under paragraph
                    (1) may use amounts equal to the food stamp allotments
                    that would otherwise be issued to a household under the
                    food stamp program, but for the operation of this
                    subsection, to provide cash benefits in lieu of the food
                    stamp allotments to the household if the household is
                    eligible under paragraph (3).
                        ``(B) Payment.--The Secretary shall pay to each
                    State that has elected to carry out an employment
                    initiatives program under paragraph (1) an amount equal
                    to the value of the allotment that each household
                    participating in the

    [[Page 110 STAT. 2339]]

                    program in the State would be eligible to receive under
                    this Act but for the operation of this subsection.
                        ``(C) Other provisions.--For purposes of the food
                    stamp program (other than this subsection)--
                              ``(i) cash assistance under this subsection
                          shall be considered to be an allotment; and
                              ``(ii) each household receiving cash benefits
                          under this subsection shall not receive any other
                          food stamp benefit during the period for which the
                          cash assistance is provided.
                        ``(D) Additional payments.--Each State that has
                    elected to carry out an employment initiatives program
                    under paragraph (1) shall--
                              ``(i) increase the cash benefits provided to
                          each household participating in the program in the
                          State under this subsection to compensate for any
                          State or local sales tax that may be collected on
                          purchases of food by the household, unless the
                          Secretary determines on the basis of information
                          provided by the State that the increase is
                          unnecessary on the basis of the limited nature of
                          the items subject to the State or local sales tax;
                          and
                              ``(ii) pay the cost of any increase in cash
                          benefits required by clause (i).
                ``(3) Eligibility.--A household shall be eligible to receive
            cash benefits under paragraph (2) if an adult member of the
            household--
                        ``(A) has worked in unsubsidized employment for not
                    less than the preceding 90 days;
                        ``(B) has earned not less than $350 per month from
                    the employment referred to in subparagraph (A) for not
                    less than the preceding 90 days;
                        ``(C)(i) is receiving benefits under a State program
                    funded under part A of title IV of the Social Security
                    Act (42 U.S.C. 601 et seq.); or
                        ``(ii) was receiving benefits under a State program
                    funded under part A of title IV of the Social Security
                    Act (42 U.S.C. 601 et seq.) at the time the member first
                    received cash benefits under this subsection and is no
                    longer eligible for the State program because of earned
                    income;
                        ``(D) is continuing to earn not less than $350 per
                    month from the employment referred to in subparagraph
                    (A); and
                        ``(E) elects to receive cash benefits in lieu of
                    food stamp benefits under this subsection.
                ``(4) Evaluation.--A State that operates a program under
            this subsection for 2 years shall provide to the Secretary a
            written evaluation of the impact of cash assistance under this
            subsection. The State agency, with the concurrence of the
            Secretary, shall determine the content of the evaluation.''.

    SEC. 853. REAUTHORIZATION.

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

    [[Page 110 STAT. 2340]]

    SEC. 854. SIMPLIFIED FOOD STAMP PROGRAM.

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

    ``SEC. 26. <<NOTE: 7 USC 2035.>>  SIMPLIFIED FOOD STAMP PROGRAM.

        ``(a) Definition of Federal Costs.--In this section, the term
    `Federal costs' does not include any Federal costs incurred under
    section 17.
        ``(b) Election.--Subject to subsection (d), a State may elect to
    carry out a Simplified Food Stamp Program (referred to in this section
    as a `Program'), statewide or in a political subdivision of the State,
    in accordance with this section.
        ``(c) Operation of Program.--If a State elects to carry out a
    Program, within the State or a political subdivision of the State--
                ``(1) a household in which no members receive assistance
            under a State program funded under part A of title IV of the
            Social Security Act (42 U.S.C. 601 et seq.) may not participate
            in the Program;
                ``(2) a household in which all members receive assistance
            under a State program funded under part A of title IV of the
            Social Security Act (42 U.S.C. 601 et seq.) shall automatically
            be eligible to participate in the Program;
                ``(3) if approved by the Secretary, a household in which 1
            or more members but not all members receive assistance under a
            State program funded under part A of title IV of the Social
            Security Act (42 U.S.C. 601 et seq.) may be eligible to
            participate in the Program; and
                ``(4) subject to subsection (f), benefits under the Program
            shall be determined under rules and procedures established by
            the State under--
                        ``(A) a State program funded under part A of title
                    IV of the Social Security Act (42 U.S.C. 601 et seq.);
                        ``(B) the food stamp program; or
                        ``(C) a combination of a State program funded under
                    part A of title IV of the Social Security Act (42 U.S.C.
                    601 et seq.) and the food stamp program.

        ``(d) Approval of Program.--
                ``(1) State plan.--A State agency may not operate a Program
            unless the Secretary approves a State plan for the operation of
            the Program under paragraph (2).
                ``(2) Approval of plan.--The Secretary shall approve any
            State plan to carry out a Program if the Secretary determines
            that the plan--
                        ``(A) complies with this section; and
                        ``(B) contains sufficient documentation that the
                    plan will not increase Federal costs for any fiscal
                    year.

        ``(e) Increased Federal Costs.--
                ``(1) Determination.--
                        ``(A) In general.--The Secretary shall determine
                    whether a Program being carried out by a State agency is
                    increasing Federal costs under this Act.
                        ``(B) No excluded households.--In making a
                    determination under subparagraph (A), the Secretary
                    shall not require the State agency to collect or report
                    any information on households not included in the
                    Program.
                        ``(C) Alternative accounting periods.--The Secretary
                    may approve the request of a State agency to apply

    [[Page 110 STAT. 2341]]

                    alternative accounting periods to determine if Federal
                    costs do not exceed the Federal costs had the State
                    agency not elected to carry out the Program.
                ``(2) Notification.--If the Secretary determines that the
            Program has increased Federal costs under this Act for any
            fiscal year or any portion of any fiscal year, the Secretary
            shall notify the State not later than 30 days after the
            Secretary makes the determination under paragraph (1).
                ``(3) Enforcement.--
                        ``(A) Corrective action.--Not later than 90 days
                    after the date of a notification under paragraph (2),
                    the State shall submit a plan for approval by the
                    Secretary for prompt corrective action that is designed
                    to prevent the Program from increasing Federal costs
                    under this Act.
                        ``(B) Termination.--If the State does not submit a
                    plan under subparagraph (A) or carry out a plan approved
                    by the Secretary, the Secretary shall terminate the
                    approval of the State agency operating the Program and
                    the State agency shall be ineligible to operate a future
                    Program.

        ``(f) Rules and Procedures.--
                ``(1) In general.--In operating a Program, a State or
            political subdivision of a State may follow the rules and
            procedures established by the State or political subdivision
            under a State program funded under part A of title IV of the
            Social Security Act (42 U.S.C. 601 et seq.) or under the food
            stamp program.
                ``(2) Standardized deductions.--In operating a Program, a
            State or political subdivision of a State may standardize the
            deductions provided under section 5(e). In developing the
            standardized deduction, the State shall consider the work
            expenses, dependent care costs, and shelter costs of
            participating households.
                ``(3) Requirements.--In operating a Program, a State or
            political subdivision shall comply with the requirements of--
                        ``(A) subsections (a) through (g) of section 7;
                        ``(B) section 8(a) (except that the income of a
                    household may be determined under a State program funded
                    under part A of title IV of the Social Security Act (42
                    U.S.C. 601 et seq.));
                        ``(C) subsection (b) and (d) of section 8;
                        ``(D) subsections (a), (c), (d), and (n) of section
                    11;
                        ``(E) paragraphs (8), (12), (16), (18), (20), (24),
                    and (25) of section 11(e);
                        ``(F) section 11(e)(10) (or a comparable requirement
                    established by the State under a State program funded
                    under part A of title IV of the Social Security Act (42
                    U.S.C. 601 et seq.)); and
                        ``(G) section 16.
                ``(4) Limitation on eligibility.--Notwithstanding any other
            provision of this section, a household may not receive benefits
            under this section as a result of the eligibility of the
            household under a State program funded under part A of title IV
            of the Social Security Act (42 U.S.C. 601 et seq.), unless the
            Secretary determines that any household with income above 130
            percent of the poverty guidelines is not eligible for the
            program.''.

    [[Page 110 STAT. 2342]]

        (b) State Plan Provisions.--Section 11(e) of the Food Stamp Act of
    1977 (7 U.S.C. 2020(e)), as amended by sections 819(b) and 835, is
    amended by adding at the end the following:
                ``(25) if a State elects to carry out a Simplified Food
            Stamp Program under section 26, the plans of the State agency
            for operating the program, including--
                        ``(A) the rules and procedures to be followed by the
                    State agency to determine food stamp benefits;
                        ``(B) how the State agency will address the needs of
                    households that experience high shelter costs in
                    relation to the incomes of the households; and
                        ``(C) a description of the method by which the State
                    agency will carry out a quality control system under
                    section 16(c).''.

        (c) Conforming Amendments.--
                (1) Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017),
            as amended by section 830, is amended--
                        (A) by striking subsection (e); and
                        (B) by redesignating subsection (f) as subsection
                    (e).
                (2) Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026)
            is amended--
                        (A) by striking subsection (i); and
                        (B) by redesignating subsections (j) through (l) as
                    subsections (i) through (k), respectively.

    SEC. 855. <<NOTE: 7 USC 2026 note.>>  STUDY OF THE USE OF FOOD STAMPS TO
                PURCHASE
                VITAMINS AND MINERALS.

        (a) In General.--The Secretary of Agriculture, in consultation with
    the National Academy of Sciences and the Center for Disease Control and
    Prevention, shall conduct a study on the use of food stamps provided
    under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) to purchase
    vitamins and minerals.
        (b) Analysis.--The study shall include--
                (1) an analysis of scientific findings on the efficacy of
            and need for vitamins and minerals, including--
                        (A) the adequacy of vitamin and mineral intakes in
                    low-income populations, as shown by research and surveys
                    conducted prior to the study; and
                        (B) the potential value of nutritional supplements
                    in filling nutrient gaps that may exist in the United
                    States population as a whole or in vulnerable subgroups
                    in the population;
                (2) the impact of nutritional improvements (including
            vitamin or mineral supplementation) on the health status and
            health care costs of women of childbearing age, pregnant or
            lactating women, and the elderly;
                (3) the cost of commercially available vitamin and mineral
            supplements;
                (4) the purchasing habits of low-income populations with
            regard to vitamins and minerals;
                (5) the impact of using food stamps to purchase vitamins and
            minerals on the food purchases of low-income house-
            holds; and
                (6) the economic impact on the production of agricultural
            commodities of using food stamps to purchase vitamins and
            minerals.

    [[Page 110 STAT. 2343]]

        (c) Report.--Not later than December 15, 1998, the Secretary shall
    report the results of the study to the Committee on Agriculture of the
    House of Representatives and the Committee on Agriculture, Nutrition,
    and Forestry of the Senate.

    SEC. 856. DEFICIT REDUCTION.

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

                   Subtitle B--Commodity Distribution Programs

    SEC. 871. EMERGENCY FOOD ASSISTANCE PROGRAM.

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

    ``SEC. 201A. DEFINITIONS.

        ``In this Act:
                ``(1) Additional commodities.--The term `additional
            commodities' means commodities made available under section 214
            in addition to the commodities made available under sections 202
            and 203D.
                ``(2) Average monthly number of unemployed
            persons.--The term `average monthly number of unemployed
            persons' means the average monthly number of unemployed persons
            in each State during the most recent fiscal year for which
            information concerning the number of unemployed persons is
            available, as determined by the Bureau of Labor Statistics of
            the Department of Labor.
                ``(3) Eligible recipient agency.--The term `eligible
            recipient agency' means a public or nonprofit organiza-
            tion that--
                        ``(A) administers--
                              ``(i) an emergency feeding organization;
                              ``(ii) a charitable institution (including a
                          hospital and a retirement home, but excluding a
                          penal institution) to the extent that the
                          institution serves needy persons;
                              ``(iii) a summer camp for children, or a child
                          nutrition program providing food service;
                              ``(iv) a nutrition project operating under the
                          Older Americans Act of 1965 (42 U.S.C. 3001 et
                          seq.), including a project that operates a
                          congregate nutrition site and a project that
                          provides home-delivered meals; or
                              ``(v) a disaster relief program;
                        ``(B) has been designated by the appropriate State
                    agency, or by the Secretary; and
                        ``(C) has been approved by the Secretary for
                    participation in the program established under this Act.
                ``(4) Emergency feeding organization.--The term `emergency
            feeding organization' means a public or nonprofit organization
            that administers activities and projects (including

    [[Page 110 STAT. 2344]]

            the activities and projects of a charitable institution, a food
            bank, a food pantry, a hunger relief center, a soup kitchen, or
            a similar public or private nonprofit eligible recipient agency)
            providing nutrition assistance to relieve situations of
            emergency and distress through the provision of food to needy
            persons, including low-income and unemployed persons.
                ``(5) Food bank.--The term `food bank' means a public or
            charitable institution that maintains an established operation
            involving the provision of food or edible commodities, or the
            products of food or edible commodities, to food pantries, soup
            kitchens, hunger relief centers, or other food or feeding
            centers that, as an integral part of their normal activities,
            provide meals or food to feed needy persons on a regular basis.
                ``(6) Food pantry.--The term `food pantry' means a public or
            private nonprofit organization that distributes food to low-
            income and unemployed households, including food from sources
            other than the Department of Agriculture, to relieve situations
            of emergency and distress.
                ``(7) Poverty line.--The term `poverty line' has the meaning
            provided in section 673(2) of the Community Services Block Grant
            Act (42 U.S.C. 9902(2)).
                ``(8) Soup kitchen.--The term `soup kitchen' means a public
            or charitable institution that, as an integral part of the
            normal activities of the institution, maintains an established
            feeding operation to provide food to needy homeless persons on a
            regular basis.
                ``(9) Total value of additional commodities.--The term
            `total value of additional commodities' means the actual cost of
            all additional commodities that are paid by the Secretary
            (including the distribution and processing costs incurred by the
            Secretary).
                ``(10) Value of additional commodities allocated to each
            state.--The term `value of additional commodities allocated to
            each State' means the actual cost of additional commodities
            allocated to each State that are paid by the Secretary
            (including the distribution and processing costs incurred by the
            Secretary).''.

        (b) State Plan.--Section 202A of the Emergency Food Assistance Act
    of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is amended to read as
    follows:

    ``SEC. 202A. STATE PLAN.

        ``(a) In General.--To receive commodities under this Act, a State
    shall submit a plan of operation and administration every 4 years to the
    Secretary for approval. The plan may be amended at any time, with the
    approval of the Secretary.
        ``(b) Requirements.--Each plan shall--
                ``(1) designate the State agency responsible for
            distributing the commodities received under this Act;
                ``(2) set forth a plan of operation and administration to
            expeditiously distribute commodities under this Act;
                ``(3) set forth the standards of eligibility for recipient
            agencies; and
                ``(4) set forth the standards of eligibility for individual
            or household recipients of commodities, which shall require--
                        ``(A) individuals or households to be comprised of
                    needy persons; and

    [[Page 110 STAT. 2345]]

                        ``(B) individual or household members to be residing
                    in the geographic location served by the distributing
                    agency at the time of applying for assistance.

        ``(c) State Advisory Board.--The Secretary shall encourage each
    State receiving commodities under this Act to establish a State advisory
    board consisting of representatives of all entities in the State, both
    public and private, interested in the distribution of commodities
    received under this Act.''.
        (c) Authorization of Appropriations for Administrative Funds.--
    Section 204(a)(1) of the Emergency Food Assistance Act of 1983 (Public
    Law 98-8; 7 U.S.C. 612c note) is amended--
                (1) in the first sentence, by striking ``for State and
            local'' and all that follows through ``under this title'' and
            inserting ``to pay for the direct and indirect administrative
            costs of the States related to the processing, transporting, and
            distributing to eligible recipient agencies of commodities
            provided by the Secretary under this Act and commodities secured
            from other sources''; and
                (2) by striking the fourth sentence.

        (d) Delivery of Commodities.--Section 214 of the Emergency Food
    Assistance Act of 1983 (Public Law 98-8; 7 U.S.C. 612c note) is
    amended--
                (1) by striking subsections (a) through (e) and (j);
                (2) by redesignating subsections (f) through (i) as
            subsections (a) through (d), respectively;
                (3) in subsection (b), as redesignated by paragraph (2)--
                        (A) in the first sentence, by striking ``subsection
                    (f) or subsection (j) if applicable,'' and inserting
                    ``subsection (a),''; and
                        (B) in the second sentence, by striking ``subsection
                    (f)'' and inserting ``subsection (a)'';
                (4) by striking subsection (c), as redesignated by paragraph
            (2), and inserting the following:

        ``(c) Administration.--
                ``(1) In general.--Commodities made available for each
            fiscal year under this section shall be delivered at reasonable
            intervals to States based on the grants calculated under
            subsection (a), or reallocated under subsection (b), before
            December 31 of the following fiscal year.
                ``(2) Entitlement.--Each State shall be entitled to receive
            the value of additional commodities determined under subsection
            (a).''; and
                (5) in subsection (d), as redesignated by paragraph (2), by
            striking ``or reduce'' and all that follows through ``each
            fiscal year''.

        (e) Technical Amendments.--The Emergency Food Assistance Act of 1983
    (Public Law 98-8; 7 U.S.C. 612c note) is amended--
                (1) in the first sentence of section 203B(a), by striking
            ``203 and 203A of this Act'' and inserting ``203A'';
                (2) in section 204(a), by striking ``title'' each place it
            appears and inserting ``Act'';
                (3) in the first sentence of section 210(e), by striking
            ``(except as otherwise provided for in section 214(j))''; and
                (4) by striking section 212.

        (f) Report on EFAP.--Section 1571 of the Food Security Act of 1985
    (Public Law 99-198; 7 U.S.C. 612c note) is repealed.

    [[Page 110 STAT. 2346]]

        (g) Availability of Commodities Under the Food Stamp Program.--The
    Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), as amended by section
    854(a), is amended by adding at the end the following:

    ``SEC. 27. <<NOTE: 7 USC 2036.>>  AVAILABILITY OF COMMODITIES FOR THE
                EMERGENCY FOOD ASSISTANCE PROGRAM.

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

        (h) Effective Date <<NOTE: 7 USC 612c note.>> .--The amendments made
    by subsection (d) shall become effective on October 1, 1996.

    SEC. 872. FOOD BANK DEMONSTRATION PROJECT.

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

    SEC. 873. HUNGER PREVENTION PROGRAMS.

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

    SEC. 874. REPORT ON ENTITLEMENT COMMODITY PROCESSING.

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

                 Subtitle C--Electronic Benefit Transfer Systems

    SEC. 891. PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT
                TRANSFER SYSTEMS.

        Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) is
    amended--
                (1) by striking ``(d) In the event that'' and inserting
            ``(d) Applicability to Service Providers Other Than Certain
            Financial Institutions.--
                ``(1) In general.--If''; and
                (2) by adding at the end the following:

    [[Page 110 STAT. 2347]]

                ``(2) State and local government electronic benefit
            transfer systems.--
                        ``(A) Definition of electronic benefit transfer
                    system.--In this paragraph, the term `electronic benefit
                    transfer system'--
                              ``(i) means a system under which a government
                          agency distributes needs-tested benefits by
                          establishing accounts that may be accessed by
                          recipients electronically, such as through
                          automated teller machines or point-of-sale
                          terminals; and
                              ``(ii) does not include employment-related
                          payments, including salaries and pension,
                          retirement, or unemployment benefits established
                          by a Federal, State, or local government agency.
                        ``(B) Exemption generally.--The disclosures,
                    protections, responsibilities, and remedies established
                    under this title, and any regulation prescribed or order
                    issued by the Board in accordance with this title, shall
                    not apply to any electronic benefit transfer system
                    established under State or local law or administered by
                    a State or local government.
                        ``(C) Exception for direct deposit into recipient's
                    account.--Subparagraph (B) shall not apply with respect
                    to any electronic funds transfer under an electronic
                    benefit transfer system for a deposit directly into a
                    consumer account held by the recipient of the benefit.
                        ``(D) Rule of construction.--No provision of this
                    paragraph--
                              ``(i) affects or alters the protections
                          otherwise applicable with respect to benefits
                          established by any other provision Federal, State,
                          or local law; or
                              ``(ii) otherwise supersedes the application of
                          any State or local law.''.

                             TITLE IX--MISCELLANEOUS

    SEC. 901. <<NOTE: 42 USC 601 note.>>  APPROPRIATION BY STATE
                LEGISLATURES.

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

    SEC. 902. <<NOTE: 21 USC 862b.>>  SANCTIONING FOR TESTING POSITIVE FOR
                CONTROLLED SUBSTANCES.

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

    [[Page 110 STAT. 2348]]

    SEC. 903. ELIMINATION OF HOUSING ASSISTANCE WITH RESPECT TO FUGITIVE
                FELONS AND PROBATION AND PAROLE
                VIOLATORS.

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

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

    ``SEC. 27. <<NOTE: 42 USC 1437z.>>  EXCHANGE OF INFORMATION WITH LAW
                ENFORCEMENT AGENCIES.

        ``Notwithstanding any other provision of law, each public housing
    agency that enters into a contract for assistance under section 6 or 8
    of this Act with the Secretary shall furnish any Federal, State, or
    local law enforcement officer, upon the request of the officer, with the
    current address, Social Security number, and photograph (if applicable)
    of any recipient of assistance under this Act, if the officer--
                ``(1) furnishes the public housing agency with the name of
            the recipient; and
                ``(2) notifies the agency that--
                        ``(A) such recipient--

    [[Page 110 STAT. 2349]]

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

    SEC. 904. SENSE OF THE SENATE REGARDING THE INABILITY OF THE
                NONCUSTODIAL PARENT TO PAY CHILD SUPPORT.

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

    SEC. 905. <<NOTE: 42 USC 710 note.>>  ESTABLISHING NATIONAL GOALS TO
                PREVENT TEENAGE PREGNANCIES.

        (a) In General.--Not later than January 1, 1997, the Secretary of
    Health and Human Services shall establish and implement a strategy for--
                (1) preventing out-of-wedlock teenage pregnancies, and
                (2) assuring that at least 25 percent of the communities in
            the United States have teenage pregnancy prevention programs in
            place.

        (b) Report.--Not later than June 30, 1998, and annually thereafter,
    the Secretary shall report to the Congress with respect to the progress
    that has been made in meeting the goals described in paragraphs (1) and
    (2) of subsection (a).

    SEC. 906. <<NOTE: 42 USC 14016.>>  SENSE OF THE SENATE REGARDING
                ENFORCEMENT OF STATUTORY RAPE LAWS.

        (a) Sense of the Senate.--It is the sense of the Senate that States
    and local jurisdictions should aggressively enforce statutory rape laws.
        (b) <<NOTE: Establishment.>>  Justice Department Program On
    Statutory Rape.--Not later than January 1, 1997, the Attorney General
    shall establish and implement a program that--
                (1) studies the linkage between statutory rape and teenage
            pregnancy, particularly by predatory older men committing repeat
            offenses; and

    [[Page 110 STAT. 2350]]

                (2) educates State and local criminal law enforcement
            officials on the prevention and prosecution of statutory rape,
            focusing in particular on the commission of statutory rape by
            predatory older men committing repeat offenses, and any links to
            teenage pregnancy.

        (c) Violence Against Women Initiative.--The Attorney
    General shall ensure that the Department of Justice's Violence Against
    Women initiative addresses the issue of statutory rape, particularly the
    commission of statutory rape by predatory older men committing repeat
    offenses.

    SEC. 907. PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT
                TRANSFER SYSTEMS.

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

    SEC. 908. REDUCTION OF BLOCK GRANTS TO STATES FOR SOCIAL SERVICES; USE
                OF VOUCHERS.

        (a) Reduction of Grants.--Section 2003(c) of the Social Security Act
    (42 U.S.C. 1397b(c)) is amended--

    [[Page 110 STAT. 2351]]

                (1) by striking ``and'' at the end of paragraph (4); and
                (2) by striking paragraph (5) and inserting the following:
                ``(5) $2,800,000,000 for each of the fiscal years 1990
            through 1995;
                ``(6) $2,381,000,000 for the fiscal year 1996;
                ``(7) $2,380,000,000 for each of the fiscal years 1997
            through 2002; and
                ``(8) $2,800,000,000 for the fiscal year 2003 and each
            succeeding fiscal year.''.

        (b) Authority to Use Vouchers.--Section 2002 of such Act (42 U.S.C.
    1937a) <<NOTE: 42 USC 1397a.>>  is amended by adding at the end the
    following:

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

    SEC. 909. RULES RELATING TO DENIAL OF EARNED INCOME CREDIT ON BASIS OF
                DISQUALIFIED INCOME.

        (a) Reduction in Disqualified Income Threshold.--
                (1) In general.--Paragraph (1) of section 32(i) of the
            Internal Revenue Code of 1986 (relating to denial of credit for
            individuals having excessive investment income) is amended by
            striking ``$2,350'' and inserting ``$2,200''.
                (2) Adjustment for inflation.--Subsection (j) of section 32
            of such Code is amended to read as follows:

        ``(j) Inflation Adjustments.--
                ``(1) In general.--In the case of any taxable year beginning
            after 1996, each of the dollar amounts in subsections (b)(2) and
            (i)(1) shall be increased by an amount equal to--
                        ``(A) such dollar amount, multiplied by
                        ``(B) the cost-of-living adjustment determined under
                    section 1(f)(3) for the calendar year in which the
                    taxable year begins, determined by substituting
                    `calendar year 1995' for `calendar year 1992' in
                    subparagraph (B) thereof.
                ``(2) Rounding.--
                        ``(A) In general.--If any dollar amount in
                    subsection (b)(2), after being increased under paragraph
                    (1), is not a multiple of $10, such dollar amount shall
                    be rounded to the nearest multiple of $10.
                        ``(B) Disqualified income threshold amount.--If the
                    dollar amount in subsection (i)(1), after being
                    increased under paragraph (1), is not a multiple of $50,
                    such amount shall be rounded to the next lowest multiple
                    of $50.''.
                (3) Conforming amendment.--Paragraph (2) of section 32(b) of
            such Code is amended to read as follows:

    [[Page 110 STAT. 2352]]

                ``(2) Amounts.--The earned income amount and the phaseout
            amount shall be determined as follows:

        In the case of an eligible
             individual with:                The earned income amount is:             The phaseout amount is:

    1 qualifying child................                  $6,330                                $11,610
    2 or more qualifying children.....                  $8,890                                $11,610
    No qualifying children............                  $4,220                               $ 5,280''.

        (b) Definition of Disqualified Income.--Paragraph (2) of section
    32(i) of such Code (defining disqualified income) is amended by striking
    ``and'' at the end of subparagraph (B), by striking the period at the
    end of subparagraph (C) and inserting a comma, and by adding at the end
    the following new subparagraphs:

                        ``(D) the capital gain net income (as defined in
                    section 1222) of the taxpayer for such taxable year, and

                        ``(E) the excess (if any) of--

                              ``(i) the aggregate income from all passive
                          activities for the taxable year (determined
                          without regard to any amount included in earned
                          income under subsection (c)(2) or described in a
                          preceding subparagraph), over

                              ``(ii) the aggregate losses from all passive
                          activities for the taxable year (as so
                          determined).

            For purposes of subparagraph (E), the term `passive activity'
            has the meaning given such term by section 469.''.

        (c) Effective Dates.--
                (1) In general.--Except as provided in paragraph (2), the
            amendments made by this section shall apply to taxable years
            beginning after <<NOTE: 26 USC 32 note.>>  December 31, 1995.

                (2) Advance payment individuals.--In the case of any
            individual who on or before June 26, 1996, has in effect an
            earned income eligibility certificate for the individual's
            taxable year beginning in 1996, the amendments made by this
            section shall apply to taxable years beginning after December
            31, 1996.

    SEC. 910. MODIFICATION OF ADJUSTED GROSS INCOME DEFINITION FOR EARNED
                INCOME CREDIT.

        (a) In General.--Subsections (a)(2)(B), (c)(1)(C), and (f)(2)(B) of
    section 32 of the Internal Revenue Code of 1986 are each amended by
    striking ``adjusted gross income'' each place it appears and inserting
    ``modified adjusted gross income''.

        (b) Modified Adjusted Gross Income Defined.--Section 32(c) of such
    Code (relating to definitions and special rules) is amended by adding at
    the end the following new paragraph:

                ``(5) Modified adjusted gross income.--

                        ``(A) In general.--The term `modified adjusted gross
                    income' means adjusted gross income determined without
                    regard to the amounts described in subparagraph (B).
                        ``(B) Certain amounts disregarded.--An amount is
                    described in this subparagraph if it is--
                              ``(i) the amount of losses from sales or
                          exchanges of capital assets in excess of gains
                          from such sales

    [[Page 110 STAT. 2353]]

                          or exchanges to the extent such amount does not
                          exceed the amount under section 1211(b)(1),
                              ``(ii) the net loss from estates and trusts,
                              ``(iii) the excess (if any) of amounts
                          described in subsection (i)(2)(C)(ii) over the
                          amounts described in subsection (i)(2)(C)(i)
                          (relating to nonbusiness rents and royalties), and
                              ``(iv) 50 percent of the net loss from the
                          carrying on of trades or businesses, computed
                          separately with respect to--
                                        ``(I) trades or businesses (other
                                    than farming) conducted as sole
                                    proprietorships,
                                        ``(II) trades or businesses of
                                    farming conducted as sole
                                    proprietorships, and
                                        ``(III) other trades or businesses.
                    For purposes of clause (iv), there shall not be taken
                    into account items which are attributable to a trade or
                    business which consists of the performance of services
                    by the taxpayer as an employee.''.

        (c) Effective Dates <<NOTE: 26 USC 32 note.>> .--
                (1) In general.--Except as provided in paragraph (2), the
            amendments made by this section shall apply to taxable years
            beginning after December 31, 1995.
                (2) Advance payment individuals.--In the case of any
            individual who on or before June 26, 1996, has in effect an
            earned income eligibility certificate for the individual's
            taxable year beginning in 1996, the amendments made by this
            section shall apply to taxable years beginning after December
            31, 1996.

    SEC. 911. <<NOTE: 42 USC 608a.>>  FRAUD UNDER MEANS-TESTED WELFARE AND
                PUBLIC ASSISTANCE PROGRAMS.

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

    SEC. 912. ABSTINENCE EDUCATION.

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

                   ``separate program for abstinence education

        ``Sec. 510. <<NOTE: 42 USC 710.>>  (a) For the purpose described in
    subsection (b), the Secretary shall, for fiscal year 1998 and each
    subsequent fiscal

    [[Page 110 STAT. 2354]]

    year, allot to each State which has transmitted an application for the
    fiscal year under section 505(a) an amount equal to the product of--
                ``(1) the amount appropriated in subsection (d) for the
            fiscal year; and
                ``(2) the percentage determined for the State under section
            502(c)(1)(B)(ii).

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

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

    SEC. 913. <<NOTE: Effective date.>>  CHANGE IN REFERENCE.

        Effective January 1, 1997, the third sentence of section 1902(a) and
    section 1908(e)(1) of the Social Security Act (42 U.S.C. 1396a(a),
    1396g-1(e)(1)) are each amended by striking ``The First Church of
    Christ, Scientist, Boston, Massachusetts'' and inserting ``The

    [[Page 110 STAT. 2355]]

    Commission for Accreditation of Christian Science Nursing Organizations/
    Facilities, Inc.'' each place it appears.

        Approved August 22, 1996.

    LEGISLATIVE HISTORY--H.R. 3734 (S. 1956):
    ---------------------------------------------------------------------------

    HOUSE REPORTS: Nos. 104-651 (Comm. on the Budget) and 104-725 (Comm. of
    Conference).
    CONGRESSIONAL RECORD, Vol. 142 (1996):
                July 17, 18, considered and passed House.
                July 18, 19, 22, 23, considered and passed Senate, amended,
                    in lieu of
                    S. 1956.
                July 31, House agreed to conference report.
                Aug. 1, Senate agreed to conference report.
    WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 32 (1996):
                Aug. 22, Presidential remarks and statement.

                                      <all>