[104th Congress Public Law 193]
[From the U.S. Government Printing 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>