To prohibit States from requiring parents or legal guardians to transfer legal custody of their children for the sole purpose of obtaining public services for such children.

SECTION 1. CHILD WELFARE SERVICES.

    Section 422(b) of the Social Security Act (42 U.S.C. 622(b)) is 
amended--
            (1) by striking ``and'' at the end of paragraph (9);
            (2) by striking the period at the end of paragraph (10) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(11) provide that--
                    ``(A) the State shall not require any parent or 
                legal guardian to transfer custody of a child in order 
                to have the child placed outside the home of the parent 
                or legal guardian, if the sole reason for the placement 
                is the need to obtain services provided under the plan 
                for the child's emotional, behavioral, or mental 
                disorder or developmental or physical disability;
                    ``(B) any such placement of a child shall be made 
                pursuant to a voluntary placement agreement (as defined 
                in section 472(f)(2));
                    ``(C) the State shall have responsibility for the 
                placement of any child subject to a voluntary placement 
                agreement (as so defined), and for the care of any 
                child so placed; and
                    ``(D) the State shall apply procedural safeguards 
                to assure each child so placed of dispositional 
                hearings of the type, and at the times, specified in 
                section 475(5)(C).''.

SEC. 2. FAMILY PRESERVATION AND SUPPORT SERVICES.

    (a) In General.--Section 432(a) of the Social Security Act (42 
U.S.C. 632(a)) is amended by redesignating paragraphs (6), (7), and (8) 
as paragraphs (7), (8), and (9), respectively, and by inserting after 
paragraph (5) the following:
            ``(6) provides that--
                    ``(A) the State shall not require any parent or 
                legal guardian to transfer custody of a child in order 
                to have the child placed outside the home of the parent 
                or legal guardian, if the sole reason for the placement 
                is the need to obtain services provided through the 
                State program under this subpart for the child's 
                emotional, behavioral, or mental disorder or 
                developmental or physical disability;
                    ``(B) any such placement of a child shall be made 
                pursuant to a voluntary placement agreement (as defined 
                in section 472(f)(2)); and
                    ``(C) the State shall have responsibility for the 
                placement of any child subject to a voluntary placement 
                agreement (as so defined), and for the care of any 
                child so placed; and
                    ``(D) the State shall apply procedural safeguards 
                to assure each child so placed of dispositional 
                hearings of the type, and at the times, specified in 
                section 475(5)(C);''.
    (b) Conforming Amendment.--Section 432(b)(2)(A) of such Act (42 
U.S.C. 632(b)(2)(A)) is amended by inserting ``(other than of 
subsection (a)(6))'' after ``this section''.

SEC. 3. FOSTER CARE MAINTENANCE PAYMENTS.

    (a) In General.--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--
                    ``(A) the State shall not require any parent or 
                legal guardian to transfer custody of a child in order 
                to have the child placed outside the home of the parent 
                or legal guardian, if the sole reason for the placement 
                is the need to obtain foster care maintenance payments 
                for the child;
                    ``(B) any such placement of a child shall be made 
                pursuant to a voluntary placement agreement; and
                    ``(C) the State shall have responsibility for the 
                placement of any child subject to a voluntary placement 
                agreement, and for the care of any child so placed.''.
    (b) Modification of Voluntary Placement Agreements.--Section 
472(f)(2) of such Act (42 U.S.C. 672(f)(2)) is amended--
            (1) by inserting ``legal'' before ``guardians'' each place 
        such term appears; and
            (2) by inserting ``, and which does not transfer legal 
        custody of the child to the State'' before the period.
    (c) Rule of Construction.--Section 474 of such Act (42 U.S.C. 674) 
is amended by adding at the end the following:
    ``(d) The provisions of this part, individually or in combination, 
shall not be construed to require a State to have legal custody of a 
child in order to receive payments under this part for services 
provided for the child outside the child's home.''.

SEC. 4. MATERNAL AND CHILD HEALTH SERVICES.

    Section 505(a) of the Social Security Act (42 U.S.C. 705(a)) is 
amended--
            (1) in paragraph (4), by striking ``and'' after the 
        semicolon at the end;
            (2) in paragraph (5), by striking the period at the end and 
        inserting ``; and''; and
            (3) by inserting after paragraph (5) the following 
        paragraph:
            ``(6) provides that--
                    ``(A) the State shall not require any parent or 
                legal guardian to transfer custody of a child in order 
                to have the child placed outside the home of the parent 
                or legal guardian, if the sole reason for the placement 
                is the need to obtain services provided through the 
                State under this title for the child's emotional, 
                behavioral, or mental disorder or developmental or 
                physical disability;
                    ``(B) any such placement of a child shall be made 
                pursuant to a voluntary placement agreement (as defined 
                in section 472(f)(2));
                    ``(C) the State shall have responsibility for the 
                placement of any child subject to a voluntary placement 
                agreement (as so defined), and for the care of any 
                child so placed; and
                    ``(D) the State shall apply procedural safeguards 
                to assure each child so placed of dispositional 
                hearings of the type, and at the times, specified in 
                section 475(5)(C).''.

SEC. 5. MEDICAID.

    Section 1902(a) of the Social Security Act (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 that the State agency shall provide 
        assurances satisfactory to the Secretary that--
                    ``(A) the State does not require any parent or 
                legal guardian to transfer custody of a child in order 
                to have the child placed outside the home of the parent 
                or legal guardian, if the sole reason for the placement 
                is the need to obtain medical assistance for the child 
                under the State plan for the child's emotional, 
                behavioral, or mental disorder or developmental or 
                physical disability;
                    ``(B) any such placement of a child shall be made 
                pursuant to a voluntary placement agreement (as defined 
                in section 472(f)(2));
                    ``(C) the State shall have responsibility for the 
                placement of any child subject to a voluntary placement 
                agreement (as so defined), and for the care of any 
                child so placed; and
                    ``(D) the State shall apply procedural safeguards 
                to assure each child so placed of dispositional 
                hearings of the type, and at the times, specified in 
                section 475(5)(C).''.

SEC. 6. SOCIAL SERVICES.

    Title XX of the Social Security Act (42 U.S.C. 1397-1397f) is 
amended by adding at the end the following:

``SEC. 2008. PROHIBITION AGAINST REQUIRING PARENTS TO SURRENDER CUSTODY 
              OF THEIR CHILDREN IN ORDER TO OBTAIN SERVICES FOR SUCH 
              CHILDREN.

    ``The Secretary shall not make any payment to a State under this 
title if the State does not have in effect laws and procedures which--
            ``(1) prevent the State from requiring any parent or legal 
        guardian to transfer custody of a child in order to have the 
        child placed outside the home of the parent or legal guardian, 
        if the sole reason for the placement is the need to obtain any 
        service for the child for the child's emotional, behavioral, or 
        mental disorder or developmental or physical disability, which 
        is furnished in whole or in part through the use of funds 
        provided under this title;
            ``(2) any such placement of a child shall be made pursuant 
        to a voluntary placement agreement (as defined in section 
        472(f)(2));
            ``(3) the State shall have responsibility for the placement 
        of any child subject to a voluntary placement agreement (as so 
        defined), and for the care of any child so placed; and
            ``(4) the State shall apply procedural safeguards to assure 
        each child so placed of dispositional hearings of the type, and 
        at the times, specified in section 475(5)(C).''.

SEC. 7. EFFECTIVE DATE.

    The amendments made by this Act shall take effect on October 1, 
1995.

Summary: Amends the Social Security Act to prohibit States from requiring parents or legal guardians to transfer legal custody of their children for the sole purpose of obtaining public services for such children under certain provisions for: (1) child welfare services, (2) family preservation and support services, (3) foster care maintenance payments, (4) maternal and child health services, (5) Medicaid, and (6) block grants to States for social services.