SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Food Stamp Quality Control System 
Act of 1993''.

SEC. 2. FOOD STAMP QUALITY CONTROL SYSTEM.

    (a) Collection and Disposition of Claims.--The fifth sentence of 
section 13(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2022(a)(1)) is 
amended by striking ``(after a determination on any request for a 
waiver for good cause related to the claim has been made by the 
Secretary)''.
    (b) Administrative and Judicial Review.--Section 14(a) of such Act 
(7 U.S.C. 2023(a)) is amended--
            (1) in the sixth sentence, by inserting after ``pursuant to 
        section 16(c)'' the following: ``(including determinations as 
        to whether there is good cause for not imposing all or part of 
        the penalty)'';
            (2) by inserting after the sixth sentence the following new 
        sentence: ``In deciding whether to uphold all or part of a 
        penalty (including whether there is good cause for not imposing 
        all or part of the penalty), the judges shall conduct a 
        thorough review of the issues and take into account all 
        relevant evidence.'';
            (3) by inserting after the eighth sentence (after the 
        amendment made by paragraph (2)) the following new sentence: 
        ``The deliberative process privilege shall not be the basis for 
        the withholding of documents by the Secretary or the State 
        agency.''; and
            (4) by striking the last sentence.
    (c) Administrative Cost Sharing and Quality Control.--Subsection 
(c) of section 16 of such Act (7 U.S.C. 2025(c)) is amended to read as 
follows:
    ``(c)(1) As used in this subsection:
            ``(A) The term `good cause' shall include, but not be 
        limited to--
                    ``(i) uncontrollable, significant caseload 
                fluctuations that substantially disrupt food stamp 
                program administration;
                    ``(ii) natural disasters that substantially disrupt 
                food stamp program administration;
                    ``(iii) Federal or State program changes that 
                substantially disrupt food stamp program 
                administration;
                    ``(iv) strikes that substantially disrupt food 
                stamp program administration;
                    ``(v) uncontrollable client-caused errors;
                    ``(vi) demographic factors, such as literacy, 
                homelessness, unemployment, poverty, and the rural 
                composition of the population, that contribute 
                substantially to an excessive error rate and depart 
                substantially from national averages for the factors;
                    ``(vii) State program improvements reasonably 
                designed to reduce error rates in the longer term, but 
                that uncontrollably cause short-term increases in the 
                error rate; and
                    ``(viii) other circumstances beyond the control of 
                a State agency.
            ``(B) The term `national average overpayment error rate' 
        means, in the case a fiscal year, the ratio of--
                    ``(i) the total value of allotments issued by all 
                State agencies in the fiscal year that are--
                            ``(I) issued to households that fail to 
                        meet basic program eligibility requirements; or
                            ``(II) overissued to eligible households; 
                        to
                    ``(ii) the total value of all allotments issued by 
                all State agencies in the fiscal year.
            ``(C) The term `national average underpayment rate' means, 
        in the case of a fiscal year, the ratio of--
                    ``(i) the total value of all allotments underissued 
                by all State agencies to recipient households in the 
                fiscal year; to
                    ``(ii) the total value of all allotments issued by 
                all State agencies in the fiscal year.
            ``(D)(i) The term `overpayment error rate' means--
                    ``(I) the percentage of the value of all allotments 
                issued in a fiscal year by a State agency that are--
                            ``(aa) issued to households that fail to 
                        meet basic program eligibility requirements; or
                            ``(bb) overissued to eligible households,
                    ``(II) reduced by the amount by which the national 
                average underpayment error rate for the fiscal year 
                exceeds the underpayment error rate of the State agency 
                for the fiscal year.
            ``(ii) At the request of a State agency, the Secretary 
        shall apply the reduction required under clause (i)(II) in 
        determining the overpayment error rate of the State agency for 
        either of the 2 following fiscal years instead of in 
        determining the overpayment error rate of the State agency for 
        the fiscal year to which the reduction would otherwise apply.
            ``(E) The term `payment error rate' means the sum of the 
        overpayment error rate and the underpayment error rate.
            ``(F) The term `underpayment error rate' means the ratio of 
        the value of allotments underissued to recipient households to 
        the total value of allotments issued in a fiscal year by a 
        State agency.
    ``(2) The program authorized under this Act shall include a system 
that enhances payment accuracy by establishing fiscal incentives that 
require State agencies with high error rates to share in the cost of 
payment errors and provide enhanced administrative funding to State 
agencies with the lowest error rates.
    ``(3)(A) Under the system, subject to subparagraph (B), the 
Secretary shall adjust the federally funded share of a State agency of 
administrative costs pursuant to subsection (a), other than the costs 
already shared in excess of 50 percent under the proviso in the first 
sentence of subsection (a) or under subsection (g), by increasing the 
share of all the administrative costs by 1 percentage point to a 
maximum of 60 percent of all the administrative costs for each full \1/
10\ of a percentage point by which the payment error rate is less than 
6 percent.
    ``(B) Only a State agency whose rate of invalid decisions in 
denying eligibility is less than a nationwide percentage that the 
Secretary determines to be reasonable shall be entitled to the 
adjustment prescribed in subparagraph (A).
    ``(4) The Secretary shall foster management improvements by State 
agencies pursuant to subsection (b) by requiring a State agency, other 
than a State agency that receives an adjustment under paragraph (3), to 
develop and implement corrective action plans to reduce payment errors.
    ``(5) Subject to paragraph (6), if the overpayment error rate of a 
State agency for a fiscal year exceeds the national average overpayment 
error rate for the fiscal year, other than for good cause shown, the 
State agency shall pay to the Secretary a penalty for the fiscal year 
in an amount obtained by multiplying--
            ``(A) the value of all allotments issued by the State 
        agency in the fiscal year; times
            ``(B) the lesser of--
                    ``(I) the ratio of--
                            ``(i) the amount by which the overpayment 
                        error rate of the State agency for the fiscal 
                        year exceeds the national average overpayment 
                        error rate for the fiscal year; to
                            ``(ii) the national average overpayment 
                        error rate for the fiscal year; or
                    ``(II) 1; times
            ``(C) the amount by which the overpayment error rate of the 
        State agency for the fiscal year exceeds the national average 
        overpayment error rate for the fiscal year.
    ``(6) The amount determined under paragraph (5) shall be reduced by 
the product obtained by multiplying--
            ``(A) the ratio of--
                    ``(i) the amount by which the overpayment error 
                rate of the State agency for the fiscal year exceeds 
                the national average overpayment error rate for the 
                fiscal year; to
                    ``(ii) the overpayment error rate of the State 
                agency for the fiscal year; times
            ``(B) the overpayments recovered by the State agency in the 
        fiscal year.
    ``(7) A State agency may pay a penalty established pursuant to 
paragraphs (5) and (6) in quarterly payments over a period not to 
exceed 30 months, in amounts sufficient to pay the penalty with 
interest by the end of the period. The amount of liability shall not be 
affected by corrective action taken under paragraph (4).
    ``(8) The following errors may be measured for management purposes 
but shall not be included in the overpayment or underpayment error 
rate:
            ``(A) Any error resulting from the application of new 
        regulations promulgated under this Act during the 120-day 
        period beginning on the date of the implementation of the 
        regulations.
            ``(B) Any error resulting from the use by a State agency of 
        correctly processed information concerning a household or 
        individual received from a Federal agency or from an action 
        based on policy information approved or disseminated, in 
        writing, by the Secretary.
            ``(C) Any case found by a quality control review to have 
        involved, but later found in a fair hearing not to have 
        involved, an overpayment, underpayment, or payment to an 
        ineligible recipient.
    ``(9)(A) Except as provided in subparagraph (B), in determining 
whether a payment is an erroneous payment, the Secretary and the State 
agency shall apply all relevant provisions of the State plan approved 
under section 11.
    ``(B)(i) Except as provided in clause (i), if a provision of a 
State plan approved under section 11 is inconsistent with a provision 
of Federal law or regulations, and the Secretary has notified the State 
agency of the inconsistency in writing, the provision of Federal law or 
regulations shall control.
    ``(ii) Clause (i) shall not apply with respect to a payment of the 
State agency if--
            ``(I) it is necessary for the State to enact a law in order 
        to remove an inconsistency described in clause (i), the 
        Secretary has advised the State agency that the State will be 
        allowed a reasonable period during which to enact the law, and 
        the payment was made during the period; or
            ``(II) the State agency made the payment in compliance with 
        a court order.
    ``(10) If the Secretary, directly or indirectly, receives from a 
State agency all or part of the amount of a penalty imposed under 
paragraph (5) and all or part of the penalty is finally determined not 
to have been due, the Secretary shall promptly refund to the State 
agency the amount determined not to have been due, with interest which 
shall accrue from the date of receipt at the rate described in section 
13(a)(1).
    ``(11)(A) For purposes of this subsection--
            ``(i) each State error rate shall be determined on the 
        basis of a review of a single statistical sample of food stamp 
        cases of each State agency for the fiscal year (without sub-
        sampling, re-reviews, or statistical regression analyses); and
            ``(ii) national average error rates shall be derived from 
        State error rates determined in accordance with clause (i).
    ``(B) The review shall be conducted--
            ``(i) by State agency personnel under the direction of the 
        Secretary pursuant to regulations adopted by the Secretary; or
            ``(ii) if a State agency elects for any particular review, 
        by the Secretary.
    ``(C) No penalty shall be collected under paragraph (5) if the 
width of the 95 percent confidence interval of any error rate on which 
the error rate is based exceeds 50 percent of the point estimate of the 
error rate, unless the State to which a particular error rate pertains 
agreed in writing to a sample size that precludes meeting the 
requirements of this subparagraph.
    ``(D) An error rate, incentive payment, and penalty claim for a 
fiscal year shall be determined by the Secretary and communicated to a 
State agency not later than 9 months after the end of the fiscal year.
    ``(12) If the Secretary asserts a financial claim against a State 
agency under paragraph (5), the State may seek administrative and 
judicial review of the action pursuant to section 14.''.

SEC. 3. STUDY OF QUALITY CONTROL STATISTICAL SYSTEM.

    (a) Study.--
            (1) In general.--The Secretary of Agriculture and State 
        agencies that administer the food stamp program established 
        under the Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) shall 
        jointly undertake a study of measurement error, and of 
        geographical and temporal uniformity of measurements, in the 
        food stamp program quality control error-rate estimation 
        system.
            (2) Experiments.--As part of the study, the Secretary and 
        the State agencies shall jointly conduct controlled experiments 
        under which various reviewers review identical cases, with the 
        objective of determining the degree of uniformity in quality 
        control error-rate measurements and the extent to which 
        different levels of investment of resources in the review 
        process affect measurement error.
    (b) Report.--
            (1) In general.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary and State agencies shall 
        report the results and recommendations of the study to the 
        Committee on Agriculture of the House of Representatives and 
        the Committee on Agriculture, Nutrition, and Forestry of the 
        Senate.
            (2) Recommendations.--The report shall include 
        recommendations as to what measures would best reduce 
        measurement error and increase uniformity of quality control 
        error-rate measurements at a reasonable cost.

SEC. 4. BUDGET NEUTRALITY REQUIREMENT.

    (a) In General.--No provision of this Act or an amendment made by 
this Act shall become effective unless the cost of the provision or 
amendment is fully offset in each fiscal year through fiscal year 1995.
    (b) Price Support Programs.--No agricultural price support, 
production adjustment, or income support program administered by the 
Secretary of Agriculture or the Commodity Credit Corporation may be 
reduced to achieve the offset.

SEC. 5. EFFECTIVE DATES.

    (a) In General.--Except as provided in subsection (b), this Act 
shall become effective on the date of enactment of this Act.
    (b) Food Stamp Quality Control System.--The amendments made by 
section 2 shall be effective as of October 1, 1991.
Food Stamp Quality Control System Act of 1993 - Amends the Food Stamp Act of 1977 to revise the formula (and related provisions) for determining a State's liability for excessive food stamp payment errors. 
Directs the Secretary of Agriculture and the State food stamp agencies to conduct a joint study and report to the appropriate congressional committees on measurement error and uniformity in the food stamp program quality control error-rate estimation system.
Food Stamp Quality Control System Act of 1993