I

104TH CONGRESS

1ST SESSION H. R. 1267

To reconnect families to the world of work, make work pay strengthen

families, require personal responsibility, and support State flexibility.

IN THE HOUSE OF REPRESENTATIVES

MARCH 21, 1995

Mr. DEAL of Georgia (for himself, Mr. CLEMENT, Mr. TANNER, Mr. STENHOLM, Mrs. LINCOLN, Mrs. THURMAN, and Mr. PAYNE of Virginia) introduced the following bill; which was referred to the Committee on Economic and Educational Opportunities, and in addition to the Committees

on the Judiciary, Commerce, National Security, Banking and Financial

Services, and Agriculture, for a period to be subsequently determined by

the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To reconnect families to the world of work, make work

pay strengthen families, require personal responsibility,

and support State flexibility.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Individual Responsibil5 ity Act of 1995’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents of this Act is as follows:
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Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Amendment of the Social Security Act.

TITLE I—TIME-LIMITED TRANSITIONAL ASSISTANCE

Sec. 101. Limitation on duration of AFDC benefits.

Sec. 102. Establishment of Federal data base.

TITLE II—MAKE WORK PAY

Subtitle A—Health Care

Sec. 201. Transitional medicaid benefits.

Subtitle B—Earned Income Tax Credit

Sec. 211. Notice of availability required to be provided to applicants and former

recipients of AFDC, food stamps, and medicaid.

Sec. 212. Notice of availability of earned income tax credit and dependent care

tax credit to be included on W–4 form.

Sec. 213. Advance payment of earned income tax credit through State demonstration programs.

Subtitle C—Child Care

Sec. 221. Dependent care credit to be refundable; high-income taxpayers ineligible for credit.

Sec. 222. Funding of child care services.

Subtitle D—AFDC Work Disregards

Sec. 231. Option to increase disregard of earned income.

Sec. 232. State option to establish voluntary diversion program.

Sec. 233. Elimination of quarters of coverage requirement for married teens

under AFDC–UP program.

Subtitle E—AFDC Asset Limitations

Sec. 241. Increase in resource thresholds; separate threshold for vehicles.

Sec. 242. Limited disregard of amounts saved for post-secondary education, the

purchase of a first home, or the establishment or operation of

a microenterprise.

TITLE III—THE WORK FIRST PROGRAM

Sec. 301. Work first program.

Sec. 302. Regulations.

Sec. 303. Applicability to States.

Sec. 304. Sense of the Congress relating to availability of work first program

in rural areas.

Sec. 305. Grants to community-based organizations.

TITLE IV—FAMILY RESPONSIBILITY AND IMPROVED CHILD

SUPPORT ENFORCEMENT

Subtitle A—Eligibility and Other Matters Concerning Title IV–D Program

Clients
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Sec. 401. State obligation to provide paternity establishment and child support

enforcement services.

Sec. 402. Distribution of payments.

Sec. 403. Due process rights.

Sec. 404. Privacy safeguards.

Subtitle B—Program Administration and Funding

Sec. 411. Federal matching payments.

Sec. 412. Performance-based incentives and penalties.

Sec. 413. Federal and State reviews and audits.

Sec. 414. Required reporting procedures.

Sec. 415. Automated data processing requirements.

Sec. 416. Director of CSE program; staffing study.

Sec. 417. Funding for secretarial assistance to State programs.

Sec. 418. Reports and data collection by the Secretary.

Subtitle C—Locate and Case Tracking

Sec. 421. Central State and case registry.

Sec. 422. Centralized collection and disbursement of support payments.

Sec. 423. Amendments concerning income withholding.

Sec. 424. Locator information from interstate networks.

Sec. 425. Expanded Federal Parent Locator Service.

Sec. 426. Use of social security numbers.

Subtitle D—Streamlining and Uniformity of Procedures

Sec. 431. Adoption of uniform State laws.

Sec. 432. Improvements to full faith and credit for child support orders.

Sec. 433. State laws providing expedited procedures.

Subtitle E—Paternity Establishment

Sec. 441. Sense of the Congress.

Sec. 442. Availability of parenting social services for new fathers.

Sec. 443. Cooperation requirement and good cause exception.

Sec. 444. Federal matching payments.

Sec. 445. Performance-based incentives and penalties.

Sec. 446. State laws concerning paternity establishment.

Sec. 447. Outreach for voluntary paternity establishment.

Subtitle F—Establishment and Modification of Support Orders

Sec. 451. National Child Support Guidelines Commission.

Sec. 452. Simplified process for review and adjustment of child support orders.

Subtitle G—Enforcement of Support Orders

Sec. 461. Federal income tax refund offset.

Sec. 462. Internal Revenue Service collection of arrears.

Sec. 463. Authority to collect support from Federal employees.

Sec. 464. Enforcement of child support obligations of members of the Armed

Forces.

Sec. 465. Motor vehicle liens.

Sec. 466. Voiding of fraudulent transfers.

Sec. 467. State law authorizing suspension of licenses.

Sec. 468. Reporting arrearages to credit bureaus.
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Sec. 469. Extended statute of limitation for collection of arrearages.

Sec. 470. Charges for arrearages.

Sec. 471. Denial of passports for nonpayment of child support.

Sec. 472. International child support enforcement.

Sec. 473. Seizure of lottery winnings, settlements, payouts, awards, and bequests, and sale of forfeited property, to pay child support arrearages.

Sec. 474. Liability of grandparents for financial support of children of their

minor children.

Sec. 475. Sense of the Congress regarding programs for noncustodial parents

unable to meet child support obligations.

Subtitle H—Medical Support

Sec. 481. Technical correction to ERISA definition of medical child support

order.

Sec. 482. Extension of medicaid eligibility for families losing AFDC due to increased child support collections.

Subtitle I—Effect of Enactment

Sec. 491. Effective dates.

Sec. 492. Severability.

TITLE V—TEEN PREGNANCY AND FAMILY STABILITY

Subtitle A—Federal Role

Sec. 501. State option to deny AFDC for additional children.

Sec. 502. Minors receiving AFDC required to live under responsible adult supervision.

Sec. 503. National clearinghouse on adolescent pregnancy.

Sec. 504. Incentive for teen parents to attend school.

Sec. 505. State option to disregard 100–hour rule under AFDC–UP program.

Sec. 506. State option to disregard 6–month limitation on AFDC–UP benefits.

Sec. 507. Elimination of quarters of coverage requirement under AFDC–UP

program for families in which both parents are teens.

Sec. 508. Denial of Federal housing benefits to minors who bear children outof-wedlock.

Sec. 509. State option to deny AFDC to minor parents.

Subtitle B—State Role

Sec. 511. Teenage pregnancy prevention and family stability.

Sec. 512. Availability of family planning services.

TITLE VI—PROGRAM SIMPLIFICATION

Subtitle A—Increased State Flexibility

Sec. 601. State option to provide AFDC through electronic benefit transfer systems.

Sec. 602. Deadline for action on application for waiver of requirement applicable to program of aid to families with dependent children.

Subtitle B—Coordination of AFDC and Food Stamp Programs

Sec. 611. Amendments to part A of title IV of the Social Security Act.
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Sec. 612. Amendments to the Food Stamp Act of 1977.

Subtitle C—Fraud Reduction

Sec. 631. Sense of the Congress in support of the efforts of the administration

to address the problems of fraud and abuse in the supplemental security income program.

Sec. 632. Study on feasibility of single tamper-proof identification card to serve

programs under both the Social Security Act and health reform

legislation.

Subtitle D—Additional Provisions

Sec. 641. State options regarding unemployed parent program.

Sec. 642. Definition of essential person.

Sec. 643. ‘‘Fill-the-gap’’ budgeting.

Sec. 644. Repeal of requirement to make certain supplemental payments in

States paying less than their needs standards.

Sec. 645. Collection of AFDC overpayments from Federal tax refunds.

Sec. 646. Territories.

Sec. 647. Disregard of student income.

Sec. 648. Lump-sum income.

TITLE VII—CHILD PROTECTION BLOCK GRANT PROGRAM

Sec. 701. Establishment of programs.

Sec. 702. Repeals and conforming amendments.

Sec. 703. Effective date.

TITLE VIII—SSI REFORM

Subtitle A—Eligibility of Children for Benefits

Sec. 801. Restrictions on eligibility.

Sec. 802. Continuing disability reviews for certain children.

Sec. 803. Disability review required for SSI recipients who are 18 years of age.

Sec. 804. Applicability.

Subtitle B—Denial of SSI Benefits by Reason of Disability to Drug Addicts

and Alcoholics

Sec. 811. Denial of SSI benefits by reason of disability to drug addicts and

alcoholics.

TITLE IX—FINANCING

Subtitle A—Treatment of Aliens

Sec. 901. Extension of deeming of income and resources under AFDC, SSI,

and food stamp programs.

Sec. 902. Requirements for sponsor’s affidavits of support.

Sec. 903. Extending requirement for affidavits of support to family-related and

diversity immigrants.

Subtitle B—Limitation on Emergency Assistance Expenditures

Sec. 911. Limitation on expenditures for emergency assistance.

Subtitle C—Tax Provisions
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Sec. 921. Certain Federal assistance includible in gross income.

Sec. 922. Earned income tax credit denied to individuals not authorized to be

employed in the United States.

Sec. 923. Phaseout of earned income credit for individuals having more than

$2,500 of taxable interest and dividends.

Sec. 924. AFDC and food stamp benefits not taken into account for purposes

of the earned income tax credit.

TITLE X—FOOD ASSISTANCE REFORM

Subtitle A—Food Stamp Program Integrity and Reform

Sec. 1001. Authority to establish authorization periods.

Sec. 1002. Specific period for prohibiting participation of stores based on lack

of business integrity.

Sec. 1003. Information for verifying eligibility for authorization.

Sec. 1004. Waiting period for stores that initially fail to meet authorization criteria.

Sec. 1005. Bases for suspensions and disqualifications.

Sec. 1006. Authority to suspend stores violating program requirements pending

administrative and judicial review.

Sec. 1007. Disqualification of retailers who are disqualified from the WIC program.

Sec. 1008. Permanent debarment of retailers who intentionally submit falsified

applications.

Sec. 1009. Expanded civil and criminal forfeiture for violations of the Food

Stamp Act.

Sec. 1010. Expanded authority for sharing information provided by retailers.

Sec. 1011. Expanded definition of ‘‘coupon’’.

Sec. 1012. Doubled penalties for violating food stamp program requirements.

Sec. 1013. Mandatory claims collection methods.

Sec. 1014. Reduction of basic benefit level.

Sec. 1015. Pro-rating benefits after interruptions in participation.

Sec. 1016. Work requirement for able-bodied recipients.

Sec. 1017. Extending current claims retention rates.

Sec. 1018. Coordination of employment and training programs.

Sec. 1019. Promoting expansion of electronic benefits transfer.

Sec. 1020. One-year freeze of standard deduction.

Sec. 1021. Nutrition assistance for Puerto Rico.

Sec. 1022. Other amendments to the Food Stamp Act of 1977.

Subtitle B—Commodity Distribution

Sec. 1051. Short title.

Sec. 1052. Availability of commodities.

Sec. 1053. State, local and private supplementation of commodities.

Sec. 1054. State plan.

Sec. 1055. Allocation of commodities to States.

Sec. 1056. Priority system for State distribution of commodities.

Sec. 1057. Initial processing costs.

Sec. 1058. Assurances; anticipated use.

Sec. 1059. Authorization of appropriations.

Sec. 1060. Commodity supplemental food program.

Sec. 1061. Commodities not income.

Sec. 1062. Prohibition against certain State charges.

Sec. 1063. Definitions.
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Sec. 1064. Regulations.

Sec. 1065. Finality of determinations.

Sec. 1066. Relationship to other programs.

Sec. 1067. Settlement and adjustment of claims.

Sec. 1068. Repealers; amendments.

TITLE XI—DEFICIT REDUCTION

Sec. 1101. Dedication of savings to deficit reduction.

TITLE XII—EFFECTIVE DATE

Sec. 1201. Effective date.

1 SEC. 3. AMENDMENT OF THE SOCIAL SECURITY ACT.

2 Except as otherwise expressly provided, wherever in

3 this Act an amendment or repeal is expressed in terms

4 of an amendment to, or repeal of, a section or other provi5 sion, the reference shall be considered to be made to a

6 section or other provision of the Social Security Act.

7 TITLE I—TIME-LIMITED

8 TRANSITIONAL ASSISTANCE

9 SEC. 101. LIMITATION ON DURATION OF AFDC BENEFITS.

10 Section 402(a) (42 U.S.C. 602(a)) is amended—

11 (1) by striking ‘‘and’’ at the end of paragraph

12 (44);

13 (2) by striking the period at the end of para14 graph (45) and inserting ‘‘; and’’; and

15 (3) by inserting after paragraph (45) the fol16 lowing:

17 ‘‘(46) in the case of a State that has exercised

18 the option provided for in paragraph (52), provide

19 that—
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1 ‘‘(A) a family shall not be eligible for aid

2 under the State plan if a member of the family

3 is—

4 ‘‘(i) prohibited from participating in

5 the State program established under sub6 part 1 of part G by reason of section

7 497(b); or

8 ‘‘(ii) prohibited from participating in

9 the State program established under sub10 part 2 of part G by reason of section

11 499(a)(4); and

12 ‘‘(B) each member of the family shall be

13 considered to be receiving such aid for purposes

14 of eligibility for medical assistance under the

15 State plan approved under title XIX for so long

16 as the family would be eligible for such aid but

17 for subparagraph (A).’’.

18 SEC. 102. ESTABLISHMENT OF FEDERAL DATA BASE.

19 Section 402 (42 U.S.C. 602) is amended by inserting

20 after subsection (c) the following:

21 ‘‘(d) The Secretary shall establish and maintain a

22 data base of participants in State programs established

23 under parts F and G which shall be made available to the

24 States for use in administering subsection (a)(46).’’.
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1 TITLE II—MAKE WORK PAY

2 Subtitle A—Health Care

3 SEC. 201. TRANSITIONAL MEDICAID BENEFITS.

4 (a) EXTENSION OF MEDICAID ENROLLMENT FOR

5 FORMER AFDC RECIPIENTS FOR 1 ADDITIONAL YEAR.—

6 (1) IN GENERAL.—Section 1925(b)(1) (42

7 U.S.C. 1396r–6(b)(1)) is amended by striking the

8 period at the end and inserting the following: ‘‘, and

9 that the State shall offer to each such family the op10 tion of extending coverage under this subsection for

11 any of the first 2 succeeding 6-month periods, in the

12 same manner and under the same conditions as the

13 option of extending coverage under this subsection

14 for the first succeeding 6-month period.’’.

15 (2) CONFORMING AMENDMENTS.—Section

16 1925(b) (42 U.S.C. 1396r–6(b)) is amended—

17 (A) in the heading, by striking ‘‘EXTEN18 SION’’ and inserting ‘‘EXTENSIONS’’;

19 (B) in the heading of paragraph (1), by

20 striking ‘‘REQUIREMENT’’ and inserting ‘‘IN

21 GENERAL’’;

22 (C) in paragraph (2)(B)(ii)—

23 (i) in the heading, by striking ‘‘PE24 RIOD’’ and inserting ‘‘PERIODS’’, and
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1 (ii) by striking ‘‘in the period’’ and in2 serting ‘‘in each of the 6-month periods’’;

3 (D) in paragraph (3)(A), by striking ‘‘the

4 6-month period’’ and inserting ‘‘any 6-month

5 period’’;

6 (E) in paragraph (4)(A), by striking ‘‘the

7 extension period’’ and inserting ‘‘any extension

8 period’’; and

9 (F) in paragraph (5)(D)(i), by striking ‘‘is

10 a 3-month period’’ and all that follows and in11 serting the following: ‘‘is, with respect to a par12 ticular 6-month additional extension period pro13 vided under this subsection, a 3-month period

14 beginning with the 1st or 4th month of such ex15 tension period.’’.

16 (b) EFFECTIVE DATE.—The amendments made by

17 subsection (a) shall apply to calendar quarters beginning

18 on or after October 1, 1997, without regard to whether

19 or not final regulations to carry out such amendments

20 have been promulgated by such date.
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1 Subtitle B—Earned Income Tax

2 Credit

3 SEC. 211. NOTICE OF AVAILABILITY REQUIRED TO BE PRO4 VIDED TO APPLICANTS AND FORMER RECIPI5 ENTS OF AFDC, FOOD STAMPS, AND MEDIC6 AID.

7 (a) AFDC.—Section 402(a) (42 U.S.C. 602(a)), as

8 amended by sections 101 and 102 of this Act, is

9 amended—

10 (1) by striking ‘‘and’’ at the end of paragraph

11 (46);

12 (2) by striking the period at the end of para13 graph (47) and inserting ‘‘; and’’; and

14 (3) by inserting after paragraph (47) the fol15 lowing:

16 ‘‘(48) provide that the State agency must pro17 vide written notice of the existence and availability

18 of the earned income credit under section 32 of the

19 Internal Revenue Code of 1986 to—

20 ‘‘(A) any individual who applies for aid

21 under the State plan, upon receipt of the appli22 cation; and

23 ‘‘(B) any individual whose aid under the

24 State plan is terminated, in the notice of termi25 nation of benefits.’’.
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1 (b) FOOD STAMPS.—Section 11(e) of the Food

2 Stamp Act of 1977 (7 U.S.C. 2020(e)) is amended—

3 (1) in paragraph (24) by striking ‘‘and’’ at the

4 end;

5 (2) in paragraph (25) by striking the period at

6 the end and inserting ‘‘; and’’; and

7 (3) by inserting after paragraph (25) the fol8 lowing:

9 ‘‘(26) that whenever a household applies for

10 food stamp benefits, and whenever such benefits are

11 terminated with respect to a household, the State

12 agency shall provide to each member of such house13 hold notice of—

14 ‘‘(A) the existence of the earned income

15 tax credit under section 32 of the Internal Rev16 enue Code of 1986; and

17 ‘‘(B) the fact that such credit may be ap18 plicable to such member.’’.

19 (c) MEDICAID.—Section 1902(a) (42 U.S.C.

20 1396a(a)) is amended—

21 (1) by striking ‘‘and’’ at the end of paragraph

22 (61);

23 (2) by striking the period at the end of para24 graph (62) and inserting ‘‘; and’’; and
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1 (3) by adding at the end the following new

2 paragraph:

3 ‘‘(63) provide that the State shall provide notice

4 of the existence and availability of the earned income

5 tax credit under section 32 of the Internal Revenue

6 Code of 1986 to each individual applying for medical

7 assistance under the State plan and to each individ8 ual whose eligibility for medical assistance under the

9 State plan is terminated.’’.

10 SEC. 212. NOTICE OF AVAILABILITY OF EARNED INCOME

11 TAX CREDIT AND DEPENDENT CARE TAX

12 CREDIT TO BE INCLUDED ON W–4 FORM.

13 Section 11114 of the Omnibus Budget Reconciliation

14 Act of 1990 (26 U.S.C. 21 note), relating to program to

15 increase public awareness, is amended by adding at the

16 end the following new sentence: ‘‘Such means shall include

17 printing a notice of the availability of such credits on the

18 forms used by employees to determine the proper number

19 of withholding exemptions under chapter 24 of the Inter20 nal Revenue Code of 1986.’’.

21 SEC. 213. ADVANCE PAYMENT OF EARNED INCOME TAX

22 CREDIT THROUGH STATE DEMONSTRATION

23 PROGRAMS.

24 (a) IN GENERAL.—Section 3507 of the Internal Rev25 enue Code of 1986 (relating to the advance payment of
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1 the earned income tax credit) is amended by adding at

2 the end the following:

3 ‘‘(g) STATE DEMONSTRATIONS.—

4 ‘‘(1) IN GENERAL.—In lieu of receiving earned

5 income advance amounts from an employer under

6 subsection (a), a participating resident shall receive

7 advance earned income payments from a responsible

8 State agency pursuant to a State Advance Payment

9 Program that is designated pursuant to paragraph

10 (2).

11 ‘‘(2) DESIGNATIONS.—

12 ‘‘(A) IN GENERAL.—From among the

13 States submitting proposals satisfying the re14 quirements of subsection (g)(3), the Secretary

15 (in consultation with the Secretary of Health

16 and Human Services) may designate not more

17 than 4 State Advance Payment Demonstra18 tions. States selected for the demonstrations

19 may have, in the aggregate, no more than 5

20 percent of the total number of household par21 ticipating in the program under the Food

22 Stamp program in the immediately preceding

23 fiscal year, Administrative costs of a State in

24 conducting a demonstration under this section

25 may be included for matching under section
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1 403(a) of the Social Security Act and section

2 16(a) of the Food Stamp Act of 1977.

3 ‘‘(B) WHEN DESIGNATION MAY BE

4 MADE.—Any designation under this paragraph

5 shall be made no later than December 31,

6 1995.

7 ‘‘(C) PERIOD FOR WHICH DESIGNATION IS

8 IN EFFECT.—

9 ‘‘(i) IN GENERAL.—Designations

10 made under this paragraph shall be effec11 tive for advance earned income payments

12 made after December 31, 1995, and before

13 January 1, 1999.

14 ‘‘(ii) SPECIAL RULES.—

15 ‘‘(I) REVOCATION OF DESIGNA16 TIONS.—The Secretary may revoke

17 the designation under this paragraph

18 if the Secretary determines that the

19 State is not complying substantially

20 with the proposal described in para21 graph (3) submitted by the State.

22 ‘‘(II) AUTOMATIC TERMINATION

23 OF DESIGNATIONS.—Any failure by a

24 State to comply with the reporting re25 quirements described in paragraphs
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1 (3)(F) and (3)(G) has the effect of

2 immediately terminating the designa3 tion under this paragraph (2) and

4 rendering paragraph (5)(A)(ii) inap5 plicable to subsequent payments.

6 ‘‘(3) PROPOSALS.—No State may be designated

7 under subsection (g)(2) unless the State’s proposal

8 for such designation—

9 ‘‘(A) identifies the responsible State agen10 cy,

11 ‘‘(B) describes how and when the advance

12 earned income payments will be made by that

13 agency, including a description of any other

14 State or Federal benefits with which such pay15 ments will be coordinated,

16 ‘‘(C) describes how the State will obtain

17 the information on which the amount of ad18 vance earned income payments made to each

19 participating resident will be determined in ac20 cordance with paragraph (4),

21 ‘‘(D) describes how State residents who

22 will be eligible to receive advance earned income

23 payments will be selected, notified of the oppor24 tunity to receive advance earned income pay25 ments from the responsible State agency, and
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1 given the opportunity to elect to participate in

2 the program,

3 ‘‘(E) describes how the State will verify, in

4 addition to receiving the certifications and

5 statement described in paragraph (7)(D)(iv),

6 the eligibility of participating residents for the

7 earned tax credit,

8 ‘‘(F) commits the State to furnishing to

9 each participating resident and to the Secretary

10 by January 31 of each year a written statement

11 showing—

12 ‘‘(i) the name and taxpayer identifica13 tion number of the participating resident,

14 and

15 ‘‘(ii) the total amount of advance

16 earned income payments made to the par17 ticipating resident during the prior cal18 endar year,

19 ‘‘(G) commits the State to furnishing to

20 the Secretary by December 1 of each year a

21 written statement showing the name and tax22 payer identification number of each participat23 ing resident,

24 ‘‘(H) commits the State to treat the ad25 vanced earned income payments as described in
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1 subsection (g)(5) and any repayments of exces2 sive advance earned income payments as de3 scribed in subsection (g)(6),

4 ‘‘(I) commits the State to assess the devel5 opment and implementation of its State Ad6 vance Payment Program, including an agree7 ment to share its findings and lessons with

8 other interested States in a manner to be de9 scribed by the Secretary, and

10 ‘‘(J) is submitted to the Secretary on or

11 before June 30, 1995.

12 ‘‘(4) AMOUNT AND TIMING OF ADVANCE

13 EARNED INCOME PAYMENTS.—

14 ‘‘(A) AMOUNT.—

15 ‘‘(i) IN GENERAL.—The method for

16 determining the amount of advance earned

17 income payments made to each participat18 ing resident is to conform to the full extent

19 possible with the provisions of subsection

20 (c).

21 ‘‘(ii) SPECIAL RULE.—A State may,

22 at its election, apply the rules of subsection

23 (c)(2)(B) by substituting ‘between 60 per24 cent and 75 percent of the credit percent25 age in effect under section 32(b)(1) for an
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1 individual with the corresponding number

2 of qualifying children’ for ‘60 percent of

3 the credit percentage in effect under sec4 tion 32(b)(1) for such an eligible individual

5 with 1 qualifying child’ in clause (i) and

6 ‘the same percentage (as applied in clause

7 (i))’ for ‘60 percent’ in clause (ii).

8 ‘‘(B) TIMING.—The frequency of advance

9 earned income payments may be made on the

10 basis of the payroll periods of participating resi11 dents, on a single statewide schedule, or on any

12 other reasonable basis prescribed by the State

13 in its proposal; however, in no event may ad14 vance earned income payments be made to any

15 participating resident less frequently than on a

16 calendar-quarter basis.

17 ‘‘(5) PAYMENTS TO BE TREATED AS PAYMENTS

18 OF WITHHOLDING AND FICA TAXES.—

19 ‘‘(A) IN GENERAL.—For purposes of this

20 title, advance earned income payments during

21 any calendar quarter—

22 ‘‘(i) shall neither be treated as a pay23 ment of compensation nor be included in

24 gross income, and

25 ‘‘(ii) shall be treated as made out of—
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1 ‘‘(I) amounts required to be de2 ducted by the State and withheld for

3 the calendar quarter by the State

4 under section 3401 (relating to wage

5 withholding), and

6 ‘‘(II) amounts required to be de7 ducted for the calendar quarter under

8 section 3102 (relating to FICA em9 ployee taxes), and

10 ‘‘(III) amounts of the taxes im11 posed on the State for the calendar

12 quarter under section 3111 (relating

13 to FICA employer taxes),

14 as if the State had paid to the Secretary,

15 on the day on which payments are made to

16 participating residents, an amount equal to

17 such payments.

18 ‘‘(B) ADVANCE PAYMENTS EXCEED TAXES

19 DUE.—If for any calendar quarter the aggre20 gate amount of advance earned income pay21 ments made by the responsible State agency

22 under a State Advance Payment Program ex23 ceeds the sum of the amounts referred to in

24 subparagraph (A)(ii) (without regard to para25 graph (6)(A)), each such advance earned in-
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1 come payment shall be reduced by an amount

2 which bears the same ratio to such excess as

3 such advance earned income payment bears to

4 the aggregate amount of all such advance

5 earned income payments.

6 ‘‘(6) STATE REPAYMENT OF EXCESSIVE AD7 VANCE EARNED INCOME PAYMENTS.—

8 ‘‘(A) IN GENERAL.—Notwithstanding any

9 other provision of law, in the case of an exces10 sive advance earned income payment a State

11 shall be treated as having deducted and with12 held under section 3401 (relating to wage with13 holding), and therefore is required to pay to the

14 United States, the repayment amount during

15 the repayment calendar quarter.

16 ‘‘(B) EXCESSIVE ADVANCE EARNED IN17 COME PAYMENT.—For purposes of this section,

18 an excessive advance income payment is that

19 portion of any advance earned income payment

20 that, when combined with other advance earned

21 income payments previously made to the same

22 participating resident during the same calendar

23 year, exceeds the amount of earned income tax

24 credit to which that participating resident is en25 titled under section 32 for that year.
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1 ‘‘(C) REPAYMENT AMOUNT.—The repay2 ment amount is equal to 50 percent of the ex3 cess of—

4 ‘‘(i) excessive advance earned income

5 payments made by a State during a par6 ticular calendar year, over

7 ‘‘(ii) the sum of—

8 ‘‘(I) 4 percent of all advance

9 earned income payments made by the

10 State during that calendar year, and

11 ‘‘(II) the excessive advance

12 earned income payments made by the

13 State during that calendar year that

14 have been collected from participating

15 residents by the Secretary.

16 ‘‘(D) REPAYMENT CALENDAR QUARTER.—

17 The repayment calendar quarter is the second

18 calendar quarter of the third calendar year

19 after the calendar year in which an excessive

20 earned income payment is made.

21 ‘‘(7) DEFINITIONS.—For purposes of this sec22 tion—

23 ‘‘(A) STATE ADVANCE PAYMENT PRO24 GRAM.—The term ‘State Advance Payment

25 Program’ means the program described in a
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1 proposal submitted for designation under para2 graph (1) and designated by the Secretary

3 under paragraph (2).

4 ‘‘(B) RESPONSIBLE STATE AGENCY.—The

5 term ‘responsible State agency’ means the sin6 gle State agency that will be making the ad7 vance earned income payments to residents of

8 the State who elect to participate in a State Ad9 vance Payment Program.

10 ‘‘(C) ADVANCE EARNED INCOME PAY11 MENTS.—The term ‘advance earned income

12 payments’ means an amount paid by a respon13 sible State agency to residents of the State pur14 suant to a State Advance Payment Program.

15 ‘‘(D) PARTICIPATING RESIDENT.—The

16 term ‘participating resident’ means an individ17 ual who—

18 ‘‘(i) is a resident of a State that has

19 in effect a designated State Advance Pay20 ment Program,

21 ‘‘(ii) makes the election described in

22 paragraph (3)(C) pursuant to guidelines

23 prescribed by the State,
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1 ‘‘(iii) certifies to the State the number

2 of qualifying children the individual has,

3 and

4 ‘‘(iv) provides to the State the certifi5 cations and statement set forth in sub6 sections (b)(1), (b)(2), (b)(3), and (b)(4)

7 (except that for purposes of this clause

8 (iv), the term ‘any employer’ shall be sub9 stituted for ‘another employer’ in sub10 section (b)(3)), along with any other infor11 mation required by the State.’’.

12 (b) TECHNICAL ASSISTANCE.—The Secretaries of

13 Treasury and Health and Human Services shall jointly en14 sure that technical assistance is provided to State Advance

15 Payment Programs and that these programs are rigor16 ously evaluated.

17 (c) ANNUAL REPORTS.—The Secretary shall issue

18 annual reports detailing the extent to which—

19 (1) residents participate in the State Advance

20 Payment Programs,

21 (2) participating residents file Federal and

22 State tax returns,

23 (3) participating residents report accurately the

24 amount of the advance earned income payments
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1 made to them by the responsible State agency dur2 ing the year, and

3 (4) recipients of excessive advance earned in4 come payments repaid those amounts.

5 The report shall also contain an estimate of the amount

6 of advance earned income payments made by each respon7 sible State agency but not reported on the tax returns of

8 a participating resident and the amount of excessive ad9 vance earned income payments.

10 (d) AUTHORIZATION OF APPROPRIATIONS.—For pur11 poses of providing technical assistance described in sub12 section (b), preparing the reports described in subsection

13 (c), and providing grants to States in support of des14 ignated State Advance Payment Programs, there are au15 thorized to be appropriated in advance to the Secretary

16 of the Treasury and the Secretary of Health and Human

17 Services a total of $1,400,000 for fiscal years 1996

18 through 1999.

19 Subtitle C—Child Care

20 SEC. 221. DEPENDENT CARE CREDIT TO BE REFUNDABLE;

21 HIGH-INCOME TAXPAYERS INELIGIBLE FOR

22 CREDIT.

23 (a) CREDIT TO BE REFUNDABLE.—

24 (1) IN GENERAL.—Section 21 of the Internal

25 Revenue Code of 1986 (relating to expenses for
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1 household and dependent care services necessary for

2 gainful employment) is hereby moved to subpart C

3 of part IV of subchapter A of chapter 1 of such

4 Code (relating to refundable credits) and inserted

5 after section 34.

6 (2) TECHNICAL AMENDMENTS.—

7 (A) Section 35 of such Code is redesig8 nated as section 36.

9 (B) Section 21 of such Code is redesig10 nated as section 35.

11 (C) Paragraph (1) of section 35(a) of such

12 Code (as redesignated by subparagraph (B)) is

13 amended by striking ‘‘this chapter’’ and insert14 ing ‘‘this subtitle’’.

15 (D) Subparagraph (C) of section 129(a)(2)

16 of such Code is amended by striking ‘‘section

17 21(e)’’ and inserting ‘‘section 35(e)’’.

18 (E) Paragraph (2) of section 129(b) of

19 such Code is amended by striking ‘‘section

20 21(d)(2)’’ and inserting ‘‘section 35(d)(2)’’.

21 (F) Paragraph (1) of section 129(e) of

22 such Code is amended by striking ‘‘section

23 21(b)(2)’’ and inserting ‘‘section 35(b)(2)’’.
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1 (G) Subsection (e) of section 213 of such

2 Code is amended by striking ‘‘section 21’’ and

3 inserting ‘‘section 35’’.

4 (H) Paragraph (2) of section 1324(b) of

5 title 31, United States Code, is amended by in6 serting before the period ‘‘, or from section 35

7 of such Code’’.

8 (I) The table of sections for subpart C of

9 part IV of subchapter A of chapter 1 of such

10 Code is amended by striking the item relating

11 to section 35 and inserting the following:

‘‘Sec. 35. Expenses for household and dependent care services

necessary for gainful employment.

‘‘Sec. 36. Overpayments of tax.’’.

12 (J) The table of sections for subpart A of

13 such part IV is amended by striking the item

14 relating to section 21.

15 (b) HIGHER-INCOME TAXPAYERS INELIGIBLE FOR

16 CREDIT.—Subsection (a) of section 35 of such Code, as

17 redesignated by subsection (a), is amended by adding at

18 the end the following new paragraph:

19 ‘‘(3) PHASEOUT OF CREDIT FOR HIGHER-IN20 COME TAXPAYERS.—The amount of the credit which

21 would (but for this paragraph) be allowed by this

22 section shall be reduced (but not below zero) by an

23 amount which bears the same ratio to such amount

24 of credit as the excess of the taxpayer’s adjusted
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1 gross income for the taxable year over $60,000 bears

2 to $20,000. Any reduction determined under the

3 preceding sentence which is not a multiple of $10

4 shall be rounded to the nearest multiple of $10.’’.

5 (c) EFFECTIVE DATE.—The amendments made by

6 this section shall apply to taxable years beginning after

7 December 31, 1996.

8 SEC. 222. FUNDING OF CHILD CARE SERVICES.

9 (a) ELIMINATION OF CHILD CARE PROGRAMS.—

10 (1) AFDC AND TRANSITIONAL CHILD CARE

11 PROGRAMS.—

12 (A) REPEALER.—Section 402(g) (42

13 U.S.C. 602(g)) is hereby repealed.

14 (B) CONFORMING AMENDMENTS.—

15 (i) Section 403(a)(3) (42 U.S.C.

16 603(a)(3)) is amended by striking ‘‘other

17 than services furnished pursuant to section

18 402(g)’’.

19 (ii) Section 403(e) (42 U.S.C. 603(e))

20 is amended—

21 (I) by striking ‘‘, 402(a)(43), and

22 402(g)(1),’’ and inserting ‘‘and

23 402(a)(43)’’; and

24 (II) by striking the 2nd sentence.
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1 (2) AT-RISK CHILD CARE PROGRAM.—Sections

2 402(i) and 403(n) (42 U.S.C. 602(i) and 603(n))

3 are hereby repealed.

4 (3) CHILD CARE PROGRAMS UNDER THE CHILD

5 CARE AND DEVELOPMENT BLOCK GRANT ACT OF

6 1990.—The Child Care and Development Block

7 Grant Act of 1990 (42 U.S.C. 9858 et seq.) is here8 by repealed.

9 (b) FUNDING OF CHILD CARE SERVICES THROUGH

10 SOCIAL SERVICES BLOCK GRANT PROGRAM.—Title XX

11 (42 U.S.C. 1397–1397f) is amended by adding at the end

12 the following:

13 ‘‘SEC. 2008. CHILD CARE.

14 ‘‘(a) CONDITIONAL ENTITLEMENT.—In addition to

15 any payment under section 2002 or 2007, each State with

16 a plan approved under this section for a fiscal year shall

17 be entitled to payment of an amount equal to the special

18 allotment of the State for the fiscal year.

19 ‘‘(b) STATE PLANS.—

20 ‘‘(1) CONTENT.—A plan meets the require21 ments of this paragraph if the plan—

22 ‘‘(A) identifies an appropriate State agency

23 to be the lead agency responsible for admin24 istering at the State level, and coordinating
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1 with local governments, the activities of the

2 State pursuant to this section;

3 ‘‘(B) describes the activities the State will

4 carry out with funds provided under this sec5 tion;

6 ‘‘(C) provides assurances that the funds

7 provided under this section will be used to sup8 plement, not supplant, State and local funds as

9 well as Federal funds provided under any Act

10 and applied to child care activities in the State

11 during fiscal year 1989;

12 ‘‘(D) provides assurances that the State

13 will not expend more than 7 percent of the

14 funds provided to the States under this section

15 for the fiscal year for administrative expenses;

16 ‘‘(E) provides assurances that, in providing

17 child care assistance, the State will give priority

18 to families with low income and families living

19 in a low-income geographical area;

20 ‘‘(F) ensures that child care providers re21 imbursed under this section meet applicable

22 standards of State and local law;

23 ‘‘(G) provides assurances that the lead

24 agency will coordinate the use of funds provided

25 under this section with the use of other Federal
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1 resources for child care provided under this Act,

2 and with other Federal, State, or local child

3 care and preschool programs operated in the

4 State;

5 ‘‘(H) provides for the establishment of

6 such fiscal and accounting procedures as may

7 be necessary to—

8 ‘‘(i) ensure a proper accounting of

9 Federal funds received by the State under

10 this section; and

11 ‘‘(ii) ensure the proper verification of

12 the reports submitted by the State under

13 subsection (f)(2);

14 ‘‘(I) provides assurances that the State will

15 not impose more stringent standards and licens16 ing or regulatory requirements on child care

17 providers receiving funds provided under this

18 section than those imposed on other child care

19 providers in the State;

20 ‘‘(J) provides assurances that the State

21 will not implement any policy or practice which

22 has the effect of significantly restricting paren23 tal choice by—
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1 ‘‘(i) expressly or effectively excluding

2 any category of care or type of provider

3 within a category of care;

4 ‘‘(ii) limiting parental access to or

5 choices from among various categories of

6 care or types of providers; or

7 ‘‘(iii) excluding a significant number

8 of providers in any category of care; and

9 ‘‘(K) provides assurances that parents will

10 be informed regarding their options under this

11 section, including the option of receiving a child

12 care certificate or voucher.

13 ‘‘(2) FORM.—A State may submit a plan that

14 meets the requirements of paragraph (1) in the form

15 of amendments to the State plan submitted pursu16 ant to section 658E of the Child Care and Develop17 ment Block Grant Act of 1990, as in effect before

18 the effective date of section 222 of the Individual

19 Responsibility Act of 1995.

20 ‘‘(3) APPROVAL.—Not later than 90 days after

21 the date the State submits a plan to the Secretary

22 under this subsection, the Secretary shall either ap23 prove or disapprove the plan. If the Secretary dis24 approves the plan, the Secretary shall provide the
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1 State with an explanation and recommendations for

2 changes in the plan to gain approval.

3 ‘‘(c) SPECIAL ALLOTMENTS.—

4 ‘‘(1) IN GENERAL.—The special allotment of a

5 State for a fiscal year equals the amount that bears

6 the same ratio to the amount specified in paragraph

7 (2) for the fiscal year, as the number of children

8 who have not attained 13 years of age and are resid9 ing with families in the State bears to the total

10 number of such children in all States with plans ap11 proved under this section for the fiscal year, deter12 mined on the basis of the most recent data available

13 from the Department of Commerce at the time the

14 special allotment is determined.

15 ‘‘(2) AMOUNT SPECIFIED.—The amount speci16 fied in this paragraph is—

17 ‘‘(A) $1,400,000,000 for fiscal year 1997;

18 and

19 ‘‘(B) $1,450,000,000 for each of fiscal

20 years 1998, 1999, and 2000.

21 ‘‘(d) PAYMENTS TO STATES.—

22 ‘‘(1) PAYMENTS.—The Secretary shall provide

23 funds to each State with a plan approved under this

24 section for a fiscal year from the special allotment
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1 of the State for the fiscal year, in accordance with

2 section 6503 of title 31, United States Code.

3 ‘‘(2) EXPENDITURE OF FUNDS BY STATES.—

4 Except as provided in paragraph (3)(A), each State

5 to which funds are paid under this section for a fis6 cal year shall expend such funds in the fiscal year

7 or in the immediately succeeding fiscal year.

8 ‘‘(3) REDISTRIBUTION OF UNEXPENDED SPE9 CIAL ALLOTMENTS.—

10 ‘‘(A) REMITTANCE TO THE SECRETARY.—

11 Each State to which funds are paid under this

12 section for a fiscal year shall remit to the Sec13 retary that part of such funds which the State

14 intends not to, or does not, expend in the fiscal

15 year or in the immediately succeeding fiscal

16 year.

17 ‘‘(B) REDISTRIBUTION.—The Secretary

18 shall increase the special allotment of each

19 State with a plan approved under this part for

20 a fiscal year that does not remit any amount to

21 the Secretary for the fiscal year by an amount

22 equal to—

23 ‘‘(i) the aggregate of the amounts re24 mitted pursuant to subparagraph (A) for

25 the fiscal year; multiplied by
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1 ‘‘(ii) the adjusted State share for the

2 fiscal year.

3 ‘‘(C) ADJUSTED STATE SHARE.—As used

4 in subparagraph (B)(ii), the term ‘adjusted

5 State share’ means, with respect to a fiscal

6 year—

7 ‘‘(i) the special allotment of the State

8 for the fiscal year (before any increase

9 under subparagraph (B)); divided by

10 ‘‘(ii)(I) the sum of the special allot11 ments of all States with plans approved

12 under this part for the fiscal year; minus

13 ‘‘(II) the aggregate of the amounts re14 mitted to the Secretary pursuant to sub15 paragraph (A) for the fiscal year.

16 ‘‘(e) USE OF FUNDS.—

17 ‘‘(1) IN GENERAL.—Funds provided under this

18 section shall be used to expand parent choices in se19 lecting child care, to address deficiencies in the sup20 ply of child care, and to expand and improve child

21 care services, with an emphasis on providing such

22 services to low-income families and geographical

23 areas. Subject to the approval of the Secretary,

24 States to which funds are paid under this section

25 shall use such funds to carry out child care pro-
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1 grams and activities through cash grants, certifi2 cates, or contracts with families, or public or private

3 entities as the State determines appropriate. States

4 shall take parental preference into account to the

5 maximum extent possible in carrying out child care

6 programs.

7 ‘‘(2) SPECIFIC USES.—Each State to which

8 funds are paid under this section may expend such

9 funds for—

10 ‘‘(A) child care services for infants, sick

11 children, children with special needs, and chil12 dren of adolescent parents;

13 ‘‘(B) after-school and before-school pro14 grams and programs during nontraditional

15 hours for the children of working parents;

16 ‘‘(C) programs for the recruitment and

17 training of day care workers, including older

18 Americans;

19 ‘‘(D) grant and loan programs to enable

20 child care workers and providers to meet State

21 and local standards and requirements;

22 ‘‘(E) child care programs developed by

23 public and private sector partnerships;
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1 ‘‘(F) State efforts to provide technical as2 sistance designed to help providers improve the

3 services offered to parents and children; and

4 ‘‘(G) other child care-related programs

5 consistent with the purpose of this section and

6 approved by the Secretary.

7 ‘‘(3) LIMITATIONS ON USE OF FUNDS.—A State

8 to which funds are paid under this section for a fis9 cal year shall use not less than 80 percent of such

10 funds to provide direct child care assistance to low11 income parents through child care certificates or

12 vouchers, contracts, or grants.

13 ‘‘(4) METHODS OF FUNDING.—Funds for child

14 care services under this title shall be for the benefit

15 of parents and shall be provided through child care

16 vouchers or certificates provided directly to parents

17 or through contracts or grants with public or private

18 providers.

19 ‘‘(5) PARENTAL RIGHTS OF CHOICE.—Any par20 ent who receives a child care certificate under this

21 title may use such certificate with any child care

22 provider, including those providers which have reli23 gious activities, if such provider is freely chosen by

24 the parent from among the available alternatives.

25 ‘‘(6) CHILD CARE CERTIFICATES.—
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1 ‘‘(A) IN GENERAL.—For purposes of this

2 title, a child care certificate is a certificate is3 sued by a State directly to a parent or legal

4 guardian for use only as payment for child care

5 services in any child care facility eligible to re6 ceive funds under this Act.

7 ‘‘(B) REDEMPTION.—If the demand for

8 child care services of families qualified to re9 ceive such services from a State under this Act

10 exceeds the available supply of such services,

11 the State shall ration assistance to obtain such

12 services using procedures that do not disadvan13 tage parents using child care certificates, rel14 ative to other methods of financing, in either

15 the waiting period or the pecuniary value of

16 such services.

17 ‘‘(C) COMMENCEMENT OF CERTIFICATE

18 PROGRAM.—Beginning not later than 1 year

19 after the date of the enactment of this section,

20 each State that receives funds under this title

21 shall offer a child care certificate program in

22 accordance with this section.

23 ‘‘(D) AUTHORITY TO USE CHILD CARE

24 FUNDS FOR CERTIFICATE PROGRAM.—Each

25 State to which funds are paid under this title
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1 may use the funds provided to the State under

2 this title which are required to be used for child

3 care activities to plan and establish the State’s

4 child care certificate program.

5 ‘‘(7) OPTION OF RECEIVING A CHILD CARE

6 CERTIFICATE.—Each parent or legal guardian who

7 receives assistance pursuant to this title shall be

8 provided with the option of enrolling their child with

9 an eligible child care provider that receives funds

10 through grants, contracts, or child care certificates

11 provided under this title. Such parent shall have the

12 right to use such certificates to purchase child care

13 services from an eligible provider of their choice. The

14 State shall ensure that parental preference is consid15 ered to the maximum extent possible in awarding

16 grants or contracts.

17 ‘‘(8) RIGHTS OF RELIGIOUS CHILD CARE PRO18 VIDERS.—Notwithstanding any other provision of

19 law, a religious child care provider who receives

20 funds under this Act may require adherence by em21 ployees to the religious tenets or teachings of the

22 provider.

23 ‘‘(9) ELIGIBLE CHILD CARE PROVIDERS.—Any

24 child care provider who meets applicable standards

25 of State and local law shall be eligible to receive
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1 funds under this section. As used in this paragraph,

2 the term ‘child care provider’ includes—

3 ‘‘(A) proprietary for-profit entities, rel4 atives, informal day care homes, religious child

5 care providers, day care centers, and any other

6 entities that the State determines appropriate

7 subject to approval of the Secretary;

8 ‘‘(B) nonprofit organizations under sub9 sections (c) and (d) of section 501 of the Inter10 nal Revenue Code of 1986;

11 ‘‘(C) professional or employee associations;

12 ‘‘(D) consortia of small businesses; and

13 ‘‘(E) units of State and local governments,

14 and elementary, secondary, and post-secondary

15 educational institutions.

16 ‘‘(10) PROHIBITED USES.—Any State to which

17 funds are paid under this section may not use such

18 funds—

19 ‘‘(A) to satisfy any State matching require20 ment imposed under any Federal grant;

21 ‘‘(B) for the purchase or improvement of

22 land, or the purchase, construction, or perma23 nent improvement (other than minor remodel24 ing) of any building or other facility; or
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1 ‘‘(C) to provide any service which the State

2 makes generally available to the residents of the

3 State without cost to such residents and with4 out regard to the income of such residents.

5 ‘‘(f) REPORTING REQUIREMENTS.—

6 ‘‘(1) NOTICE TO SECRETARY OF UNEXPENDED

7 FUNDS.—Each State which has not completely ex8 pended the funds paid to the State under this sec9 tion for a fiscal year in the fiscal year or the imme10 diately succeeding fiscal year shall notify the Sec11 retary of any amount not so expended.

12 ‘‘(2) STATE REPORTS ON USE OF FUNDS.—Not

13 later than 18 months after the date of the enact14 ment of this section, and each year thereafter, the

15 State shall prepare and submit to the Secretary, in

16 such form as the Secretary shall prescribe, a report

17 describing the State’s use of funds paid to the State

18 under this section, including—

19 ‘‘(A) the number, type, and distribution of

20 services and programs under this section;

21 ‘‘(B) the average cost of child care, by type

22 of provider;

23 ‘‘(C) the number of children serviced under

24 this section;
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1 ‘‘(D) the average income and distribution

2 of incomes of the families being served;

3 ‘‘(E) efforts undertaken by the State pur4 suant to this section to promote and ensure

5 health and safety and improve quality; and

6 ‘‘(F) such other information as the Sec7 retary considers appropriate.

8 ‘‘(3) GUIDELINES FOR STATE REPORTS; CO9 ORDINATION WITH REPORTS UNDER SECTION

10 2006.—Within 6 months after the date of the enact11 ment of this section, the Secretary shall establish

12 guidelines for State reports under paragraph (2). To

13 the extent feasible, the Secretary shall coordinate

14 such reporting requirement with the reports required

15 under section 2006 and, as the Secretary deems ap16 propriate, with other reporting requirements placed

17 on States as a condition of receipt of other Federal

18 funds which support child care.

19 ‘‘(4) REPORTS BY THE SECRETARY.—

20 ‘‘(A) REPORTS TO THE CONGRESS OF SUM21 MARY OF STATE REPORTS.—The Secretary shall

22 annually summarize the information reported to

23 the Secretary pursuant to paragraph (2) and

24 provide such summary to the Congress.
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1 ‘‘(B) REPORTS TO THE STATES ON EFFEC2 TIVE PRACTICES.—The Secretary shall annually

3 provide the States with a report on particularly

4 effective practices and programs supported by

5 funds paid to the State under this section,

6 which ensure the health and safety of children

7 in care, promote quality child care, and provide

8 training to all types of providers.

9 ‘‘(g) ADMINISTRATION AND ENFORCEMENT.—

10 ‘‘(1) ADMINISTRATION.—The Secretary shall—

11 ‘‘(A) coordinate all activities of the Depart12 ment of Health and Human Services relating to

13 child care, and, to the maximum extent prac14 ticable, coordinate such activities with similar

15 activities of other Federal entities;

16 ‘‘(B) collect, publish, and make available to

17 the public a listing of State child care standards

18 at least once every 3 years; and

19 ‘‘(C) provide technical assistance to assist

20 States to carry out this section, including as21 sistance on a reimbursable basis.

22 ‘‘(2) ENFORCEMENT.—

23 ‘‘(A) REVIEW OF COMPLIANCE WITH

24 STATE PLAN.—The Secretary shall review and

25 monitor State compliance with this section and
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1 the plans approved under this section for the

2 State, and shall have the power to terminate

3 payments to the State in accordance with sub4 paragraph (B).

5 ‘‘(B) NONCOMPLIANCE.—

6 ‘‘(i) IN GENERAL.—If the Secretary,

7 after reasonable notice to a State and op8 portunity for a hearing, finds that—

9 ‘‘(I) there has been a failure by

10 the State to comply substantially with

11 any provision or requirement set forth

12 in the plan approved under this sec13 tion for the State; or

14 ‘‘(II) in the operation of any pro15 gram for which assistance is provided

16 under this section there is a failure by

17 the State to comply substantially with

18 any provision of this section;

19 the Secretary shall notify the State of the

20 findings and that no further payments may

21 be made to such State under this section

22 (or, in the case of noncompliance in the op23 eration of a program or activity, that no

24 further payments to the State will be made

25 with respect to such program or activity)
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1 until the Secretary is satisfied that there is

2 no longer any such failure to comply or

3 that the noncompliance will be promptly

4 corrected.

5 ‘‘(ii) ADDITIONAL SANCTIONS.—In the

6 case of a finding of noncompliance made

7 pursuant to clause (i), the Secretary may,

8 in addition to imposing the sanctions de9 scribed in such subparagraph, impose the

10 other appropriate sanctions, including

11 recoupment of money improperly expended

12 for purposes prohibited or not authorized

13 by this section, and disqualification from

14 the receipt of financial assistance under

15 this section.

16 ‘‘(iii) NOTICE.—The notice required

17 under subparagraph (A) shall include a

18 specific identification of any additional

19 sanction being imposed under clause (ii).

20 ‘‘(C) ISSUANCE OF RULES.—The Secretary

21 shall establish by rule procedures for—

22 ‘‘(i) receiving, processing, and deter23 mining the validity of complaints concern24 ing any failure of a State to comply with
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1 the State plan or any requirement of this

2 section; and

3 ‘‘(ii) imposing sanctions under this

4 subsection.

5 ‘‘SEC. 2009. CHILD CARE DURING PARTICIPATION IN EM6 PLOYMENT, EDUCATION, AND TRAINING; EX7 TENDED ELIGIBILITY.

8 ‘‘(a) CHILD CARE GUARANTEE.—

9 ‘‘(1) IN GENERAL.—Each State agency referred

10 to in section 2008(b)(1)(A) shall guarantee child

11 care in accordance with section 2008—

12 ‘‘(A) for any individual who is participat13 ing in an education or training activity (includ14 ing participation in a program established

15 under part G of title IV) if the State agency

16 approves the activity and determines that the

17 individual is participating satisfactorily in the

18 activity;

19 ‘‘(B) for each family with a dependent

20 child requiring such care to the extent that

21 such care is determined by the State agency to

22 be necessary for an individual in the family to

23 accept employment or remain employed, includ24 ing in a community service job under part H of

25 title IV; and
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1 ‘‘(C) to the extent that the State agency

2 determines that such care is necessary for the

3 employment of an individual, if the family of

4 which the individual is a member has ceased to

5 receive aid under the State plan approved under

6 part A of title IV by reason of increased hours

7 of, or income from, such employment or by rea8 son of section 402(a)(8)(B)(ii)(II), subject to

9 paragraph (2) of this subsection.

10 ‘‘(2) LIMITATIONS ON ELIGIBILITY FOR TRANSI11 TIONAL CHILD CARE.—A family shall not be eligible

12 for child care under paragraph (1)(C)—

13 ‘‘(A) for more than 12 months after the

14 last month for which the family received aid de15 scribed in such paragraph;

16 ‘‘(B) if the family did not receive such aid

17 in at least 3 of the most recent 6 months in

18 which the family received such aid;

19 ‘‘(C) if the family does not include a child

20 who is (or, if needy, would be) a dependent

21 child (within the meaning of part A of title IV);

22 ‘‘(D) for any month beginning after the

23 caretaker relative (within the meaning of such

24 part) in the family has terminated his or her

25 employment without good cause; or
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1 ‘‘(E) with respect to a child, for any month

2 beginning after the caretaker relative in the

3 family has refused to cooperate with the State

4 in establishing or enforcing the obligation of

5 any parent of the child to provide support for

6 the child, without good cause as determined by

7 the State agency in accordance with standards

8 prescribed by the Secretary which shall take

9 into consideration the best interests of the

10 child.

11 ‘‘(b) STATE ENTITLEMENT TO PAYMENTS.—Each

12 State with a plan approved under section 2008 shall be

13 entitled to receive from the Secretary for any fiscal year

14 an amount equal to—

15 ‘‘(1) the total amount expended by the State to

16 carry out subsection (a) during the fiscal year; mul17 tiplied by

18 ‘‘(2) the greater of—

19 ‘‘(A) 70 percent; or

20 ‘‘(B) the Federal medical assistance per21 centage (as defined in the last sentence of sec22 tion 1118, increased by 10 percentage points.’’.

23 (c) EFFECTIVE DATE.—The amendments and re24 peals made by this section shall take effect on October

25 1, 1996.
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1 Subtitle D—AFDC Work Disregards

2 SEC. 231. OPTION TO INCREASE DISREGARD OF EARNED IN3 COME.

4 Section 402(a)(8)(A) (42 U.S.C. 602(a)(8)(A)) is

5 amended—

6 (1) by striking ‘‘and’’ at the end of clause (vii);

7 and

8 (2) by adding at the end the following:

9 ‘‘(ix) if electing to disregard clauses (ii)

10 and (iv), shall disregard from the earned in11 come of any child, relative, or other individual

12 specified in clause (ii) an amount equal to not

13 less than the first $120 and not more than the

14 first $225 of the total of such earned income

15 not disregarded under any other clause of this

16 subparagraph, plus not more than one third of

17 the remainder of such earned income; and’’.

18 SEC. 232. STATE OPTION TO ESTABLISH VOLUNTARY DI19 VERSION PROGRAM.

20 Section 402(a) (42 U.S.C. 602(a)), as amended by

21 sections 101, 102, and 211(a) of this Act, is amended—

22 (1) by striking ‘‘and’’ at the end of paragraph

23 (47);

24 (2) by striking the period at the end of para25 graph (48) and inserting ‘‘; and’’; and
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1 (3) by inserting after paragraph (48) the fol2 lowing:

3 ‘‘(49) at the option of the State, and in such

4 part or parts of the State as the State may select,

5 provide that—

6 ‘‘(A) upon the recommendation of the case7 worker who is handling the case of a family eli8 gible for aid under the State plan, the State

9 shall, in lieu of any other payment under the

10 State plan to a family during a time period of

11 not more than 3 months, make a lump-sum

12 payment to the family for the time period in an

13 amount not to exceed—

14 ‘‘(i) the amount of the monthly bene15 fit to which the family is entitled under the

16 State plan; multiplied by

17 ‘‘(ii) the number of months in the

18 time period;

19 ‘‘(B) a lump-sum payment pursuant to

20 subparagraph (A) shall not be made more than

21 once to any family; and

22 ‘‘(C) if, during a time period for which the

23 State has made a lump-sum payment to a fam24 ily pursuant to subparagraph (A), the family

25 applies for and (but for the lump-sum payment)
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1 would be eligible for aid under the State plan

2 for a greater monthly benefit than the monthly

3 benefit to which the family was entitled under

4 the State plan at the time of the calculation of

5 the lump sum payment, then, notwithstanding

6 subparagraph (A), the State shall, for that part

7 of the time period that remains after the family

8 becomes eligible for the greater monthly benefit,

9 provide monthly benefits to the family in an

10 amount not to exceed—

11 ‘‘(i) the amount by which the greater

12 monthly benefit exceeds the former month13 ly benefit, multiplied by the number of

14 months in the time period; divided by

15 ‘‘(ii) the whole number of months re16 maining in the time period.’’.

17 SEC. 233. ELIMINATION OF QUARTERS OF COVERAGE RE18 QUIREMENT FOR MARRIED TEENS UNDER

19 AFDC–UP PROGRAM.

20 (a) IN GENERAL.—Section 407(b)(1)(A)(iii)(I) (42

21 U.S.C. 607(b)(1)(A)(iii)(I)) is amended by inserting ‘‘ex22 cept in the case of a family in which the parents are mar23 ried and neither parent has attained 20 years of age,’’

24 after ‘‘(I)’’.
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1 (b) EXTENSION OF AFDC–UP PROGRAM.—Section

2 401(h) of the Family Support Act of 1988 (42 U.S.C. 602

3 and note, 607) is amended by striking ‘‘1998’’ and insert4 ing ‘‘2000’’.

5 Subtitle E—AFDC Asset

6 Limitations

7 SEC. 241. INCREASE IN RESOURCE THRESHOLDS; SEPA8 RATE THRESHOLD FOR VEHICLES.

9 Section 402(a)(7)(B) (42 U.S.C. 602(a)(7)(B)) is

10 amended—

11 (1) by striking ‘‘$1,000 or such lower amount

12 as the State may determine’’ and inserting

13 ‘‘$2,000’’; and

14 (2) in clause (i), by striking ‘‘such amount as

15 the Secretary may prescribe’’ and inserting ‘‘the dol16 lar amount prescribed by the Secretary of Agri17 culture under section 5(g) of the Food Stamp Act of

18 1977’’.

19 SEC. 242. LIMITED DISREGARD OF AMOUNTS SAVED FOR

20 POST-SECONDARY EDUCATION, THE PUR21 CHASE OF A FIRST HOME, OR THE ESTAB22 LISHMENT OR OPERATION OF A

23 MICROENTERPRISE.

24 (a) DISREGARD FROM RESOURCES.—Section

25 402(a)(7)(B) (42 U.S.C. 602(a)(7)(B)) is amended—
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1 (1) by striking ‘‘or’’ before ‘‘(iv)’’; and

2 (2) by inserting ‘‘, or (v) any amount not ex3 ceeding $8,000 in 1 qualified asset account (as de4 fined in section 406(i)) of 1 member of such family’’

5 before ‘‘; and’’.

6 (b) DISREGARD FROM INCOME.—

7 (1) IN GENERAL.—Section 402(a)(8)(A) (42

8 U.S.C. 602(a)(8)(A)), as amended by section 231 of

9 this Act, is amended—

10 (A) by striking ‘‘and’’ at the end of clause

11 (viii); and

12 (B) by inserting after clause (ix) the fol13 lowing new clause:

14 ‘‘(x) shall disregard any interest or in15 come earned on a qualified asset account

16 (as defined in section 406(i)) and paid into

17 the account, to the extent that the total

18 amount in the account, after such pay19 ment, does not exceed $8,000; and’’.

20 (2) NONRECURRING LUMP SUM EXEMPT FROM

21 LUMP SUM RULE.—Section 402(a)(17) (42 U.S.C.

22 602(a)(17)) is amended by adding at the end the

23 following: ‘‘; and that this paragraph shall not apply

24 to earned or unearned income received in a month

25 on a nonrecurring basis to the extent that such in-
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1 come is placed in a qualified asset account (as de2 fined in section 406(i)) the total amount in which,

3 after such placement, does not exceed $8,000;’’.

4 (3) TREATMENT AS INCOME.—Section

5 402(a)(7) (42 U.S.C. 602(a)(7)) is amended—

6 (A) by striking ‘‘and’’ at the end of sub7 paragraph (B);

8 (B) by striking the semicolon at the end of

9 subparagraph (C) and inserting ‘‘; and’’; and

10 (C) by adding at the end the following new

11 subparagraph:

12 ‘‘(D) shall treat as income any distribution

13 from a qualified asset account (as defined in

14 section 406(i)(1)) that is not a qualified dis15 tribution (as defined in section 406(i)(2));’’.

16 (c) DEFINITIONS.—Section 406 (42 U.S.C. 606) is

17 amended by adding at the end the following:

18 ‘‘(i)(1) The term ‘qualified asset account’ means a

19 mechanism approved by the State (such as individual re20 tirement accounts, escrow accounts, or savings bonds) that

21 allows savings of an individual receiving aid to families

22 with dependent children to be used for a purpose described

23 in paragraph (2).
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1 ‘‘(2) The term ‘qualified distribution’ means a dis2 tribution for expenses directly related to 1 or more of the

3 following purposes:

4 ‘‘(A) The attendance of a member of the family

5 at any postsecondary education program.

6 ‘‘(B) The purchase of residential real property

7 for the family that the family intends to occupy, if

8 no member of the family has an ownership interest

9 in such a property.

10 ‘‘(C) The establishment or operation of a

11 microenterprise owned by a member of the family.

12 ‘‘(j) The term ‘microenterprise’ means a commercial

13 enterprise which has 5 or fewer employees, 1 or more of

14 whom owns the enterprise.’’.

15 TITLE III—THE WORK FIRST

16 PROGRAM

17 SEC. 301. WORK FIRST PROGRAM.

18 (a) STATE PLAN REQUIREMENT.—Section 402(a)

19 (42 U.S.C. 602(a)), as amended by sections 101, 102,

20 211(a), and 232 of this Act, is amended—

21 (1) by striking ‘‘and’’ at the end of paragraph

22 (48);

23 (2) by striking the period at the end of para24 graph (49) and inserting ‘‘; and’’; and
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1 (3) by inserting after paragraph (49) the fol2 lowing:

3 ‘‘(50) provide that the State—

4 ‘‘(A) shall develop an individual respon5 sibility plan in accordance with part F for each

6 applicant for, or recipient of, aid under the

7 State plan who—

8 ‘‘(i) has attained 18 years of age; or

9 ‘‘(ii) has not completed high school or

10 obtained a certificate of high school equiva11 lency, and is not attending secondary

12 school;

13 ‘‘(B) has in effect and operation—

14 ‘‘(i) a work first program that meets

15 the requirements of subpart 1 of part G

16 (or, for any fiscal year for which the Sec17 retary has approved a State plan under

18 subpart 2 of part G, such subpart 2); and

19 ‘‘(ii) a community service program

20 that meets the requirements of part H, or

21 a job placement voucher program that

22 meets the requirements of part I, but not

23 both;

24 ‘‘(C) shall provide a position in the

25 workfare program established by the State
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1 under part H, or a job placement voucher under

2 the job placement voucher program established

3 by the State under part I to any individual who,

4 by reason of section 497(b), is prohibited from

5 participating in the work first program oper6 ated by the State, and shall not provide such a

7 position or such a voucher to any other individ8 ual; and

9 ‘‘(D) shall provide to participants in such

10 programs such case management services as are

11 necessary to ensure the integrated provision of

12 benefits and services under such programs.’’.

13 (b) ESTABLISHMENT AND OPERATION OF PRO14 GRAM.—Title IV (42 U.S.C. 601 et seq.) is amended by

15 striking part F and inserting the following:

16 ‘‘Part F—Individual Responsibility Plan

17 ‘‘SEC. 481. ASSESSMENT.

18 ‘‘The State agency referred to in section 402(a)(3)

19 shall make an initial assessment of the skills, prior work

20 experience, and employability of each individual for whom

21 section 402(a)(50)(A) requires the State to develop an in22 dividual responsibility plan.

23 ‘‘SEC. 482. INDIVIDUAL RESPONSIBILITY PLANS.

24 ‘‘(a) IN GENERAL.—On the basis of the assessment

25 made under section 481 with respect to an individual, the
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1 State agency, in consultation with the individual, shall de2 velop an individual responsibility plan for the individual,

3 which—

4 ‘‘(1) shall provide that participation by the indi5 vidual in job search activities shall be a condition of

6 eligibility for aid under the State plan approved

7 under part A, except during any period for which

8 the individual is employed full-time in an

9 unsubsidized job in the private sector;

10 ‘‘(2) sets forth an employment goal for the indi11 vidual and a plan for moving the individual imme12 diately into private sector employment;

13 ‘‘(3) sets forth the obligations of the individual,

14 which may include a requirement that the individual

15 attend school, maintain certain grades and attend16 ance, keep school age children of the individual in

17 school, immunize children, attend parenting and

18 money management classes, or do other things that

19 will help the individual become and remain employed

20 in the private sector; and

21 ‘‘(4) may require that the individual enter the

22 State program established under part G, if the case23 worker determines that the individual will need edu24 cation, training, job placement assistance, wage en-
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1 hancement, or other services to become employed in

2 the private sector.

3 ‘‘(b) TIMING.—The State agency shall comply with

4 subsection (a) with respect to an individual—

5 ‘‘(1) within 90 days (or, at the option of the

6 State, 180 days) after the effective date of this part,

7 in the case of an individual who, as of such effective

8 date, is a recipient of aid under the State plan ap9 proved under part A; or

10 ‘‘(2) within 30 days (or, at the option of the

11 State, 90 days) after the individual is determined to

12 be eligible for such aid, in the case of any other indi13 vidual.

14 ‘‘SEC. 483. PROVISION OF PROGRAM AND EMPLOYMENT IN15 FORMATION.

16 ‘‘The State shall inform all applicants for and recipi17 ents of aid under the State plan approved under part A

18 of all available services under the State plan for which

19 they are eligible.

20 ‘‘SEC. 484. REQUIREMENT THAT RECIPIENTS ENTER THE

21 WORK FIRST PROGRAM.

22 ‘‘(a) IN GENERAL.—Beginning with fiscal year 2004,

23 the State shall place recipients of aid under the State plan

24 approved under part A, who have not become employed

25 in the private sector within 1 year after signing an individ-
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1 ual responsibility plan, in the first available slot in the

2 State program established under part G, except as pro3 vided in subsection (b).

4 ‘‘(b) EXCEPTIONS.—A State may not be required to

5 place a recipient of such aid in the State program estab6 lished under part G if the recipient—

7 ‘‘(1) is ill, incapacitated, or of advanced age;

8 ‘‘(2) has not attained 18 years of age;

9 ‘‘(3) is caring for a child or parent who is ill

10 or incapacitated; or

11 ‘‘(4) is enrolled in school or in educational or

12 training programs that will lead to private sector

13 employment.

14 ‘‘SEC. 485. PENALTIES.

15 ‘‘(a) STATE NOT OPERATING A WORK FIRST PRO16 GRAM UNDER A STATE MODEL OR A WORKFARE PRO17 GRAM.—In the case of a State that is not operating a pro18 gram under subpart 2 of part G or under part H:

19 ‘‘(1) FAILURE TO COMPLY WITH INDIVIDUAL

20 RESPONSIBILITY PLAN OR AGREEMENT OF MUTUAL

21 RESPONSIBILITY.—

22 ‘‘(A) PROGRESSIVE REDUCTIONS IN AID

23 FOR 1ST AND 2ND FAILURES.—The amount of

24 aid otherwise payable under the State plan ap25 proved under part A to a family that includes
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1 an individual who fails without good cause to

2 comply with an individual responsibility plan

3 (or, if the State has established a program

4 under subpart 1 of part G and the individual is

5 required to participate in the program, an

6 agreement of mutual responsibility) signed by

7 the individual (other than by reason of conduct

8 described in paragraph (2)) shall be reduced

9 by—

10 ‘‘(i) 33 percent for the 1st such act of

11 noncompliance; or

12 ‘‘(ii) 66 percent for the 2nd such act

13 of noncompliance.

14 ‘‘(B) DENIAL OF AID FOR 3RD FAILURE.—

15 In the case of the 3rd such act of noncompli16 ance, the family of which the individual is a

17 member shall not thereafter be eligible for aid

18 under the State plan approved under part A.

19 ‘‘(C) ACTS OF NONCOMPLIANCE.—For pur20 poses of this paragraph, a 1st act of noncompli21 ance by an individual continues for more than

22 1 calendar month shall be considered a 2nd act

23 of noncompliance, and a 2nd act of noncompli24 ance that continues for more than 3 calendar
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1 months shall be considered a 3rd act of non2 compliance.

3 ‘‘(2) DENIAL OF AFDC TO ADULTS REFUSING

4 TO WORK, LOOK FOR WORK, OR ACCEPT A BONA

5 FIDE OFFER OF EMPLOYMENT.—

6 ‘‘(A) REFUSAL TO WORK OR LOOK FOR

7 WORK.—If an unemployed individual who has

8 attained 18 years of age refuses to work or look

9 for work—

10 ‘‘(i) in the case of the 1st such re11 fusal, aid under the State plan approved

12 under part A shall not be payable with re13 spect to the individual until the later of—

14 ‘‘(I) a period of not less than 6

15 months after the date of the first such

16 refusal; or

17 ‘‘(II) the first date the individual

18 agrees to work or look for work.

19 ‘‘(ii) in the case of the 2nd such re20 fusal, the family of which the individual is

21 a member shall not thereafter be eligible

22 for aid under the State plan approved

23 under part A.

24 ‘‘(B) REFUSAL TO ACCEPT A BONA FIDE

25 OFFER OF EMPLOYMENT.—If an unemployed
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1 individual who has attained 18 years of age re2 fuses to accept a bona fide offer of employment,

3 the family of which the individual is a member

4 shall not thereafter be eligible for aid under the

5 State plan approved under part A.

6 ‘‘(b) OTHER STATES.—In the case of any other

7 State, the State shall reduce, by such amount as the State

8 considers appropriate, the amount of aid otherwise pay9 able under the State plan approved under part A to a fam10 ily that includes an individual who fails without good cause

11 to comply with an individual responsibility plan signed by

12 the individual.

13 ‘‘Part G—Work First Program

14 ‘‘Subpart 1—Federal Model

15 ‘‘SEC. 491. ESTABLISHMENT AND OPERATION OF STATE

16 PROGRAMS.

17 ‘‘A work first program meets the requirements of this

18 subpart if the program meets the following requirements:

19 ‘‘(1) OBJECTIVE.—The objective of the pro20 gram is for each program participant to find and

21 hold a full-time unsubsidized paid job, and for this

22 goal to be achieved in a cost-effective fashion.

23 ‘‘(2) METHOD.—The method of the program is

24 to connect recipients of aid to families with depend25 ent children with the private sector labor market as
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1 soon as possible and offer them the support and

2 skills necessary to remain in the labor market. Each

3 component of the program should be permeated with

4 an emphasis on employment and with an under5 standing that minimum wage jobs are a stepping

6 stone to more highly paid employment.

7 ‘‘(3) JOB CREATION.—The creation of jobs,

8 with an emphasis on private sector jobs, shall be a

9 component of the program and shall be a priority for

10 each State office with responsibilities under the pro11 gram.

12 ‘‘(4) USE OF INCENTIVES.—The State shall use

13 incentives to change the culture of each State office

14 with responsibilities under the State plan approved

15 under part A, improve the performance of employ16 ees, and ensure that the objective of each employee

17 of each such State office is to find an unsubsidized

18 paid job for each program participant.

19 ‘‘(5) CASEWORKER TRAINING.—The State may

20 provide such training to caseworkers and related

21 personnel (including through the use of incentives)

22 as may be necessary to ensure successful job place23 ments that result in full-time public or private em24 ployment (outside the State agencies with respon25 sibilities under part A) for program participants.
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1 The State shall reward any caseworker who enters

2 an agreement of mutual responsibility with a pro3 gram participant that provides for education or

4 training activities as well as work.

5 ‘‘(6) REPORTS.—Each office with responsibility

6 for operating the program shall make monthly sta7 tistical reports to the governing body of the State,

8 county, and city in which located, of job placements

9 and the number of program participants who are no

10 longer receiving aid under the State plan approved

11 under part A as a result of participation in the pro12 gram.

13 ‘‘(7) CASE MANAGEMENT TEAMS.—

14 ‘‘(A) DUTIES.—The program requires the

15 State to assign to each individual required or

16 allowed to participate in the program a case

17 management team that shall meet with the pro18 gram participant and develop an agreement of

19 mutual responsibility for the individual.

20 ‘‘(B) DEADLINE.—

21 ‘‘(i) IN GENERAL.—The case manage22 ment team shall comply with subparagraph

23 (A) with respect to a program participant

24 within 30 days (or, at the option of the
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1 State, within a period not exceeding 90

2 days) after the later of—

3 ‘‘(I) the date the application of

4 the program participant for aid under

5 the State plan approved under part A

6 was approved; or

7 ‘‘(II) the date this subpart first

8 applies to the State.

9 ‘‘(ii) REPEAT PARTICIPANTS.—Within

10 30 days after the State makes a deter11 mination under section 497(b)(2) to allow

12 an individual to participate in the pro13 gram, the case management team shall

14 meet with the individual and develop an

15 agreement of mutual responsibility for the

16 individual.

17 ‘‘(8) AGREEMENTS OF MUTUAL RESPONSIBIL18 ITY.—The agreement of mutual responsibility for a

19 participant shall—

20 ‘‘(A) contain an individualized comprehen21 sive plan, developed by the team and the partic22 ipant, to move the participant into a full-time

23 unsubsidized job, through activities under sec24 tion 492, 493, 494, 495, or 496;
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1 ‘‘(B) to the greatest extent possible, be de2 signed to move the participant as quickly as

3 possible into whatever type and amount of work

4 as the participant is capable of handling, and

5 increases the responsibility and amount of work

6 over time until the participant is able to work

7 full-time;

8 ‘‘(C) where necessary, provide for edu9 cation or training of the participant;

10 ‘‘(D) provide that aid under the State plan

11 is to be paid to the participant based on the

12 number of hours that the participant spends in

13 activities provided for in the agreement;

14 ‘‘(E) provide that the participant shall

15 spend at least 30 hours per week (or, at State

16 option, at least 20 hours per week during fiscal

17 years 1997 and 1998, and at least 25 hours

18 per week during fiscal year 1999) in activities

19 provided for in the agreement;

20 ‘‘(F) provide that the participant shall ac21 cept any bona fide offer of unsubsidized full22 time employment, unless the participant has

23 good cause for not doing so;
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1 ‘‘(G) at the option of the State, require the

2 participant to undergo appropriate substance

3 abuse treatment; and

4 ‘‘(H) at the option of the State, require the

5 participant to have his or her children receive

6 appropriate immunizations against disease.

7 ‘‘(9) OPTIONS FOR PARTICIPANTS.—The case

8 manager for a program participant shall present the

9 participant with each option offered under the State

10 program through which the participant will, over

11 time, be moved into full-time unsubsidized employ12 ment.

13 ‘‘(10) ONE-STOP EMPLOYMENT SHOPS.—

14 ‘‘(A) IN GENERAL.—In carrying out the

15 program, the State shall utilize and make avail16 able to each program participant, through the

17 establishment and operation or utilization of

18 appropriate Federal or State one-stop employ19 ment shops, services under programs carried

20 out under the following provisions of law:

21 ‘‘(i) Part A of title II of the Job

22 Training Partnership Act (29 U.S.C. 1601

23 et seq.) (relating to the adult training pro24 gram).
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1 ‘‘(ii) Part B of title II of such Act (29

2 U.S.C. 1630 et seq.) (relating to the sum3 mer youth employment and training pro4 grams).

5 ‘‘(iii) Part C of title II of such Act

6 (29 U.S.C. 1641 et seq.) (relating to the

7 youth training program).

8 ‘‘(iv) Title III of such Act (29 U.S.C.

9 1651 et seq.) (relating to employment and

10 training assistance for dislocated workers).

11 ‘‘(v) Part B of title IV of such Act

12 (29 U.S.C. 1691 et seq.) (relating to the

13 Job Corps).

14 ‘‘(vi) The Carl D. Perkins Vocational

15 and Applied Technology Education Act (20

16 U.S.C. 2301 et seq.).

17 ‘‘(vii) The Adult Education Act (20

18 U.S.C. 1201 et seq.).

19 ‘‘(viii) Part B of chapter 1 of title I

20 of the Elementary and Secondary Edu21 cation Act of 1965 (20 U.S.C. 2741 et

22 seq.) (relating to Even Start family lit23 eracy programs).

24 ‘‘(ix) Subtitle A of title VII of the

25 Stewart B. McKinney Homeless Assistance
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1 Act (42 U.S.C. 11421) (relating to adult

2 education for the homeless).

3 ‘‘(x) Subtitle B of title VII of such

4 Act (42 U.S.C. 11431 et seq.) (relating to

5 education for homeless children and

6 youth).

7 ‘‘(xi) Subtitle C of title VII of such

8 Act (42 U.S.C. 11441) (relating to job

9 training for the homeless).

10 ‘‘(xii) The School-to-Work Opportuni11 ties Act of 1994.

12 ‘‘(xiii) The National and Community

13 Service Act of 1990 (42 U.S.C. 12501 et

14 seq.).

15 ‘‘(xiv) The National Skill Standards

16 Act of 1994.

17 ‘‘(B) COORDINATION.—In utilizing appro18 priate Federal or State one-stop employment

19 shops described in subparagraph (A), the State

20 shall ensure coordination between the case21 worker of each program participant and the ad22 ministrators of the programs carried out under

23 the provisions of law described in such subpara24 graph.
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1 ‘‘(11) NONDISPLACEMENT.—The program may

2 not be operated in a manner that results in—

3 ‘‘(A) the displacement of a currently em4 ployed worker or position by a program partici5 pant;

6 ‘‘(B) the replacement of an employee who

7 has been terminated with a program partici8 pant; or

9 ‘‘(C) the replacement of an individual who

10 is on layoff from the same position given to a

11 program participant or any equivalent position.

12 ‘‘SEC. 492. REVAMPED JOBS PROGRAM.

13 ‘‘A State that establishes a program under this sub14 part may operate a program similar to the program known

15 as the ‘GAIN Program’ that has been operated by River16 side County, California, under Federal law in effect imme17 diately before the date this subpart first applies to the

18 State of California.

19 ‘‘SEC. 493. USE OF PLACEMENT COMPANIES.

20 ‘‘(a) IN GENERAL.—A State that establishes a pro21 gram under this subpart may enter into contracts with

22 private companies (whether operated for profit or not for

23 profit) for the placement of participants in the program

24 in positions of full-time employment, preferably in the pri-
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1 vate sector, for wages sufficient to eliminate the need of

2 such participants for cash assistance.

3 ‘‘(b) REQUIRED CONTRACT TERMS.—Each contract

4 entered into under this section with a company shall meet

5 the following requirements:

6 ‘‘(1) PROVISION OF JOB READINESS AND SUP7 PORT SERVICES.—The contract shall require the

8 company to provide, to any program participant who

9 presents to the company a voucher issued under sub10 section (d) intensive personalized support and job

11 readiness services designed to prepare the individual

12 for employment and ensure the continued success of

13 the individual in employment.

14 ‘‘(2) PAYMENTS.—

15 ‘‘(A) IN GENERAL.—The contract shall

16 provide for payments to be made to the com17 pany with respect to each program participant

18 who presents to the company a voucher issued

19 under subsection (d).

20 ‘‘(B) STRUCTURE.—The contract shall

21 provide for the majority of the amounts to be

22 paid under the contract with respect to a pro23 gram participant, to be paid after the company

24 has placed the participant in a position of full25 time employment and the participant has been
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1 employed in the position for such period of not

2 less than 5 months as the State deems appro3 priate.

4 ‘‘(c) COMPETITIVE BIDDING REQUIRED.—Contracts

5 under this section shall be awarded only after competitive

6 bidding.

7 ‘‘(d) VOUCHERS.—The State shall issue a voucher to

8 each program participant whose agreement of mutual re9 sponsibility provides for the use of placement companies

10 under this section, indicating that the participant is eligi11 ble for the services of such a company.

12 ‘‘SEC. 494. TEMPORARY SUBSIDIZED JOB CREATION.

13 ‘‘A State that establishes a program under this sub14 part may establish a program similar to the program

15 known as ‘JOBS Plus’ that has been operated by the State

16 of Oregon under Federal law in effect immediately before

17 the date this subpart first applies to the State of Oregon.

18 ‘‘SEC. 495. MICROENTERPRISE.

19 ‘‘(a) GRANTS AND LOANS TO NONPROFIT ORGANIZA20 TIONS FOR THE PROVISION OF TECHNICAL ASSISTANCE,

21 TRAINING, AND CREDIT TO LOW INCOME ENTRE22 PRENEURS.—A State that establishes a program under

23 this subpart may make grants and loans to nonprofit orga24 nizations to provide technical assistance, training, and
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1 credit to low income entrepreneurs for the purpose of es2 tablishing microenterprises.

3 ‘‘(b) MICROENTERPRISE DEFINED.—For purposes of

4 this subsection, the term ‘microenterprise’ means a com5 mercial enterprise which has 5 or fewer employees, 1 or

6 more of whom owns the enterprise.

7 ‘‘SEC. 496. WORK SUPPLEMENTATION PROGRAM.

8 ‘‘(a) IN GENERAL.—A State that establishes a pro9 gram under this subpart may institute a work

10 supplementation program under which the State, to the

11 extent it considers appropriate, may reserve the sums that

12 would otherwise be payable to participants in the program

13 as aid to families with dependent children and use the

14 sums instead for the purpose of providing and subsidizing

15 jobs for the participants (as described in subsection

16 (c)(3)(A) and (B)), as an alternative to the aid to families

17 with dependent children that would otherwise be so pay18 able to the participants.

19 ‘‘(b) STATE FLEXIBILITY.—

20 ‘‘(1) Nothing in this subpart, or in any State

21 plan approved under part A, shall be construed to

22 prevent a State from operating (on such terms and

23 conditions and in such cases as the State may find

24 to be necessary or appropriate) a work supple25 mentation program in accordance with this section
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1 and section 494 (as in effect immediately before the

2 date this subpart first applies to the State).

3 ‘‘(2) Notwithstanding section 402(a)(23) or any

4 other provision of law, a State may adjust the levels

5 of the standards of need under the State plan as the

6 State determines to be necessary and appropriate for

7 carrying out a work supplementation program under

8 this section.

9 ‘‘(3) Notwithstanding section 402(a)(1) or any

10 other provision of law, a State operating a work

11 supplementation program under this section may

12 provide that the need standards in effect in those

13 areas of the State in which the program is in oper14 ation may be different from the need standards in

15 effect in the areas in which the program is not in

16 operation, and the State may provide that the need

17 standards for categories of recipients may vary

18 among such categories to the extent the State deter19 mines to be appropriate on the basis of ability to

20 participate in the work supplementation program.

21 ‘‘(4) Notwithstanding any other provision of

22 law, a State may make such further adjustments in

23 the amounts of the aid to families with dependent

24 children paid under the plan to different categories

25 of recipients (as determined under paragraph (3)) in
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1 order to offset increases in benefits from needs-relat2 ed programs (other than the State plan approved

3 under part A) as the State determines to be nec4 essary and appropriate to further the purposes of

5 the work supplementation program.

6 ‘‘(5) In determining the amounts to be reserved

7 and used for providing and subsidizing jobs under

8 this section as described in subsection (a), the State

9 may use a sampling methodology.

10 ‘‘(6) Notwithstanding section 402(a)(8) or any

11 other provision of law, a State operating a work

12 supplementation program under this section—

13 ‘‘(A) may reduce or eliminate the amount

14 of earned income to be disregarded under the

15 State plan as the State determines to be nec16 essary and appropriate to further the purposes

17 of the work supplementation program; and

18 ‘‘(B) during 1 or more of the first 9

19 months of an individual’s employment pursuant

20 to a program under this subpart, may apply to

21 the wages of the individual the provisions of

22 subparagraph (A)(iv) of section 402(a)(8) with23 out regard to the provisions of subparagraph

24 (B)(ii)(II) of such section.

25 ‘‘(c) RULES RELATING TO SUPPLEMENTED JOBS.—
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1 ‘‘(1) A work supplementation program operated

2 by a State under this section may provide that any

3 individual who is an eligible individual (as deter4 mined under paragraph (2)) shall take a supple5 mented job (as defined in paragraph (3)) to the ex6 tent that supplemented jobs are available under the

7 program. Payments by the State to individuals or to

8 employers under the work supplementation program

9 shall be treated as expenditures incurred by the

10 State for aid to families with dependent children ex11 cept as limited by subsection (d).

12 ‘‘(2) For purposes of this section, an eligible in13 dividual is an individual who is in a category which

14 the State determines should be eligible to participate

15 in the work supplementation program, and who

16 would, at the time of placement in the job involved,

17 be eligible for aid to families with dependent chil18 dren under an approved State plan if the State did

19 not have a work supplementation program in effect.

20 ‘‘(3) For purposes of this subsection, a supple21 mented job is—

22 ‘‘(A) a job provided to an eligible individ23 ual by the State or local agency administering

24 the State plan under part A; or
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1 ‘‘(B) a job provided to an eligible individ2 ual by any other employer for which all or part

3 of the wages are paid by the State or local

4 agency.

5 A State may provide or subsidize under the program

6 any job which the State determines to be appro7 priate.

8 ‘‘(4) At the option of the State, individuals who

9 hold supplemented jobs under a State’s work

10 supplementation program shall be exempt from the

11 retrospective budgeting requirements imposed pursu12 ant to section 402(a)(13)(A)(ii) (and the amount of

13 the aid which is payable to the family of any such

14 individual for any month, or which would be so pay15 able but for the individual’s participation in the

16 work supplementation program, shall be determined

17 on the basis of the income and other relevant cir18 cumstances in that month).

19 ‘‘(d) COST LIMITATION.—The amount of the Federal

20 payment to a State under section 403 for expenditures in21 curred in making payments to individuals and employers

22 under a work supplementation program under this sub23 section shall not exceed an amount equal to the amount

24 which would otherwise be payable under such section if

25 the family of each individual employed in the program es-
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1 tablished in the State under this section had received the

2 maximum amount of aid to families with dependent chil3 dren payable under the State plan to such a family with

4 no income (without regard to adjustments under sub5 section (b)) for the lesser of—

6 ‘‘(1) 9 months; or

7 ‘‘(2) the number of months in which the indi8 vidual was employed in the program.

9 ‘‘(e) RULES OF INTERPRETATION.—

10 ‘‘(1) This section shall not be construed as re11 quiring the State or local agency administering the

12 State plan to provide employee status to an eligible

13 individual to whom the State or local agency pro14 vides a job under the work supplementation program

15 (or with respect to whom the State or local agency

16 provides all or part of the wages paid to the individ17 ual by another entity under the program), or as re18 quiring any State or local agency to provide that an

19 eligible individual filling a job position provided by

20 another entity under the program be provided em21 ployee status by the entity during the first 13 weeks

22 the individual fills the position.

23 ‘‘(2) Wages paid under a work supplementation

24 program shall be considered to be earned income for

25 purposes of any provision of law.
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1 ‘‘(f) PRESERVATION OF MEDICAID ELIGIBILITY.—

2 Any State that chooses to operate a work supplementation

3 program under this section shall provide that any individ4 ual who participates in the program, and any child or rel5 ative of the individual (or other individual living in the

6 same household as the individual) who would be eligible

7 for aid to families with dependent children under the State

8 plan approved under part A if the State did not have a

9 work supplementation program, shall be considered indi10 viduals receiving aid to families with dependent children

11 under the State plan approved under part A for purposes

12 of eligibility for medical assistance under the State plan

13 approved under title XIX.

14 ‘‘SEC. 497. PARTICIPATION RULES.

15 ‘‘(a) IN GENERAL.—Except as provided in subsection

16 (b), a State that establishes a program under this part

17 may require any individual receiving aid under the State

18 plan approved under part A to participate in the program.

19 ‘‘(b) 2-YEAR LIMITATION ON PARTICIPATION.—

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), an individual may not participate in a

22 State program established under this part if the in23 dividual has participated in the State program es24 tablished under this part for 24 months after the

25 date the individual first signed an agreement of mu-
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1 tual responsibility under this part, excluding any

2 month during which the individual worked for an av3 erage of at least 25 hours per week in a private sec4 tor job.

5 ‘‘(2) AUTHORITY TO ALLOW REPEAT PARTICI6 PATION.—

7 ‘‘(A) IN GENERAL.—Subject to subpara8 graph (B) of this paragraph, a State may allow

9 an individual who, by reason of paragraph (1),

10 would be prohibited from participating in the

11 State program established under this part to

12 participate in the program for such additional

13 period or periods as the State determines ap14 propriate.

15 ‘‘(B) LIMITATION ON PERCENTAGE OF RE16 PEAT PARTICIPANTS.—

17 ‘‘(i) IN GENERAL.—Except as pro18 vided in clause (ii) of this subparagraph,

19 the number of individuals allowed under

20 subparagraph (A) to participate during a

21 program year in a State program estab22 lished under this part shall not exceed—

23 ‘‘(I) 10 percent of the total num24 ber of individuals who participated in

25 the State program established under
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1 this part or the State program estab2 lished under part H during the imme3 diately preceding program year; or

4 ‘‘(II) in the case of fiscal year

5 2004 or any succeeding fiscal year, 15

6 percent of such total number of indi7 viduals.

8 ‘‘(ii) AUTHORITY TO INCREASE LIMI9 TATION.—

10 ‘‘(I) PETITION.—A State may re11 quest the Secretary to increase to not

12 more than 15 percent the percentage

13 limitation imposed by clause (i)(I) for

14 a fiscal year before fiscal year 2004.

15 ‘‘(II) AUTHORITY TO GRANT RE16 QUEST.—The Secretary may approve

17 a request made pursuant to subclause

18 (I) if the Secretary deems it appro19 priate. The Secretary shall develop

20 recommendations on the criteria that

21 should be applied in evaluating re22 quests under subclause (I).

23 ‘‘SEC. 498. CASELOAD PARTICIPATION RATES; PERFORM24 ANCE MEASURES.

25 ‘‘(a) PARTICIPATION RATES.—
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1 ‘‘(1) REQUIREMENT.—A State that operates a

2 program under this part shall achieve a participation

3 rate for the following fiscal years of not less than

4 the following percentage:

‘‘Fiscal year: Percentage:

1997 ......................................................................................... 16

1998 ......................................................................................... 20

1999 ......................................................................................... 24

2000 ......................................................................................... 28

2001 ......................................................................................... 32

2002 ......................................................................................... 40

2003 or later ............................................................................ 52.

5 ‘‘(2) PARTICIPATION RATE DEFINED.—

6 ‘‘(A) IN GENERAL.—As used in this sub7 section, the term ‘participation rate’ means,

8 with respect to a State and a fiscal year, an

9 amount equal to—

10 ‘‘(i) the average monthly number of

11 individuals who, during the fiscal year,

12 participate in the State program estab13 lished under this part or the State pro14 gram (if any) established under part H; di15 vided by

16 ‘‘(ii) the average monthly number of

17 individuals for whom an individual respon18 sibility plan is in effect under section 482

19 during the fiscal year.

20 ‘‘(B) SPECIAL RULE.—For each of the 1st

21 12 months after an individual ceases to receive
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1 aid under a State plan approved under part A

2 by reason of having become employed for more

3 than 25 hours per week in an unsubsidized job

4 in the private sector, the individual shall be

5 considered to be participating in the State pro6 gram established under this part, and to be an

7 adult recipient of such aid, for purposes of sub8 paragraph (A).

9 ‘‘(3) STATE COMPLIANCE REPORTS.—Each

10 State that operates a program under this part for a

11 fiscal year shall submit to the Secretary a report on

12 the participation rate of the State for the fiscal year.

13 ‘‘(4) EFFECT OF FAILURE TO MEET PARTICIPA14 TION RATES.—

15 ‘‘(A) IN GENERAL.—If a State reports that

16 the State has failed to achieve the participation

17 rate required by paragraph (1) for the fiscal

18 year, the Secretary may make recommendations

19 for changes in the State program established

20 under this part and (if the State has estab21 lished a program under part H) the State pro22 gram established under part H. The State may

23 elect to follow such recommendations, and shall

24 demonstrate to the Secretary how the State will

25 achieve the required participation rates.
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1 ‘‘(B) SECOND CONSECUTIVE FAILURE.—

2 Notwithstanding subparagraph (A), if a State

3 fails to achieve the participation rate required

4 by paragraph (1) for 2 consecutive fiscal years,

5 the Secretary may—

6 ‘‘(i) require the State to make

7 changes in the State program established

8 under this part and (if the State has estab9 lished a program under part H) the State

10 program established under part H; and

11 ‘‘(ii) reduce by 5 percent the amount

12 otherwise payable to the State under para13 graph (1) or (2) (whichever applies to the

14 State) of section 403(a).

15 ‘‘(b) PERFORMANCE STANDARDS.—The Secretary

16 shall develop standards to be used to measure the effec17 tiveness of the programs established under this part and

18 part H in moving recipients of aid under the State plan

19 approved under part A into full-time unsubsidized employ20 ment.

21 ‘‘(c) PERFORMANCE-BASED MEASURES.—

22 ‘‘(1) ESTABLISHMENT.—The Secretary shall, by

23 regulation, establish measures of the effectiveness of

24 the State programs established under this part and

25 under part H in moving recipients of aid under the
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1 State plan approved under part A into full-time

2 unsubsidized employment, based on the performance

3 of such programs.

4 ‘‘(2) ANNUAL COMPLIANCE REPORTS.—Each

5 State that operates a program under this part shall

6 submit to the Secretary annual reports that compare

7 the achievements of the program with the perform8 ance-based measures established under paragraph

9 (1).

10 ‘‘Subpart 2—Optional State Plans

11 ‘‘SEC. 499. STATE ROLE.

12 ‘‘(a) PROGRAM REQUIREMENTS.—Any State may es13 tablish and operate a work first program that meets the

14 following requirements, unless the State is operating a

15 work first program under subpart 1:

16 ‘‘(1) OBJECTIVE.—The objective of the pro17 gram is for each program participant to find and

18 hold a full-time unsubsidized paid job, and for this

19 goal to be achieved in a cost-effective fashion.

20 ‘‘(2) METHOD.—The method of the program is

21 to connect recipients of aid to families with depend22 ent children with the private sector labor market as

23 soon as possible and offer them the support and

24 skills necessary to remain in the labor market. Each

25 component of the program should be permeated with
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1 an emphasis on employment and with an under2 standing that minimum wage jobs are a stepping

3 stone to more highly paid employment. The program

4 shall provide recipients with education, training, job

5 search and placement, wage supplementation, tem6 porary subsidized jobs, or such other services that

7 the State deems necessary to help a recipient obtain

8 private sector employment.

9 ‘‘(3) JOB CREATION.—The creation of jobs,

10 with an emphasis on private sector jobs, shall be a

11 component of the program and shall be a priority for

12 each State office with responsibilities under the pro13 gram.

14 ‘‘(4) FORMS OF ASSISTANCE.—The State shall

15 provide assistance to participants in the program in

16 the form of education, training, job placement serv17 ices (including vouchers for job placement services),

18 work supplementation programs, temporary sub19 sidized job creation, job counseling, assistance in es20 tablishing microenterprises, or other services to pro21 vide individuals with the support and skills necessary

22 to obtain and keep employment in the private sector.

23 ‘‘(5) 2-YEAR LIMITATION ON PARTICIPATION.—

24 The program shall comply with section 497(b).
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1 ‘‘(6) AGREEMENTS OF MUTUAL RESPONSIBIL2 ITY.—

3 ‘‘(A) IN GENERAL.—The State agency

4 shall develop an agreement of mutual respon5 sibility for each program participant, which will

6 be an individualized comprehensive plan, devel7 oped by the team and the participant, to move

8 the participant into a full-time unsubsidized

9 job. The agreement should detail the education,

10 training, or skills that the individual will be re11 ceiving to obtain a full-time unsubsidized job,

12 and the obligations of the individual.

13 ‘‘(B) HOURS OF PARTICIPATION REQUIRE14 MENT.—The agreement shall provide that the

15 individual shall participate in activities in ac16 cordance with the agreement for—

17 ‘‘(i) not fewer than 20 hours per week

18 during fiscal years 1997 and 1998;

19 ‘‘(ii) not fewer than 25 hours per

20 week during fiscal year 1999; and

21 ‘‘(iii) not fewer than 30 hours per

22 week thereafter.

23 ‘‘(7) CASELOAD PARTICIPATION RATES.—The

24 program shall comply with section 498.
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1 ‘‘(8) NONDISPLACEMENT.—The program shall

2 comply with section 491(11).

3 ‘‘(b) ANNUAL REPORTS.—

4 ‘‘(1) COMPLIANCE WITH PERFORMANCE MEAS5 URES.—Each State that operates a program under

6 this subpart shall submit to the Secretary annual re7 ports that compare the achievements of the program

8 with the performance-based measures established

9 under section 490(b).

10 ‘‘(2) COMPLIANCE WITH PARTICIPATION

11 RATES.—Each State that operates a program under

12 this subpart for a fiscal year shall submit to the Sec13 retary a report on the participation rate of the State

14 for the fiscal year.

15 ‘‘SEC. 500. FEDERAL ROLE.

16 ‘‘(a) APPROVAL OF STATE PLANS.—

17 ‘‘(1) IN GENERAL.—Within 60 days after the

18 date a State submits to the Secretary a plan that

19 provides for the establishment and operation of a

20 work first program that meets the requirements of

21 section 499, the Secretary shall approve the plan.

22 ‘‘(2) AUTHORITY TO EXTEND APPROVAL DEAD23 LINE.—The 60-day deadline established in para24 graph (1) with respect to a State may be extended
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1 in accordance with an agreement between the Sec2 retary and the State.

3 ‘‘(b) PERFORMANCE-BASED MEASURES.—The Sec4 retary shall, by regulation, establish measures of the effec5 tiveness of the State program established under this sub6 part and (if the State has established a program under

7 part H) the State program established under part H in

8 moving recipients of aid under the State plan approved

9 under part A into full-time unsubsidized employment,

10 based on the performance of such programs.

11 ‘‘(c) EFFECT OF FAILURE TO MEET PARTICIPATION

12 RATES.—

13 ‘‘(1) IN GENERAL.—If a State reports that the

14 State has failed to achieve the participation rate re15 quired by section 499(a)(7) for the fiscal year, the

16 Secretary may make recommendations for changes

17 in the State program established under this subpart

18 and (if the State has established a program under

19 part H) the State program established under part

20 H. The State may elect to follow such recommenda21 tions, and shall demonstrate to the Secretary how

22 the State will achieve the required participation

23 rates.

24 ‘‘(2) SECOND CONSECUTIVE FAILURE.—Not25 withstanding paragraph (1), if the State has failed
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1 to achieve the participation rates required by section

2 499(a)(7) for 2 consecutive fiscal years, the Sec3 retary may require the State to make changes in the

4 State program established under this subpart and (if

5 the State has established a program under part H)

6 the State program established under part H.

7 ‘‘Part H—Workfare Program

8 ‘‘SEC. 500A. ESTABLISHMENT AND OPERATION OF PRO9 GRAM.

10 ‘‘(a) IN GENERAL.—A State that establishes a work

11 first program under a subpart of part G may establish

12 and carry out a workfare program that meets the require13 ments of this part, unless the State has established a job

14 placement voucher program under part I.

15 ‘‘(b) OBJECTIVE.—The objective of the workfare pro16 gram is for each program participant to find and hold a

17 full-time unsubsidized paid job, and for this goal to be

18 achieved in a cost-effective fashion.

19 ‘‘(c) CASE MANAGEMENT TEAMS.—The State shall

20 assign to each program participant a case management

21 team that shall meet with the participant and assist the

22 participant to choose the most suitable workfare job under

23 subsection (e), (f), or (g) and to eventually obtain a full24 time unsubsidized paid job.
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1 ‘‘(d) PROVISION OF JOBS.—The State shall provide

2 each participant in the program with a community service

3 job that meets the requirements of subsection (e) or a sub4 sidized job that meets the requirements of subsection (f)

5 or (g).

6 ‘‘(e) COMMUNITY SERVICE JOBS.—

7 ‘‘(1) IN GENERAL.—Except as provided in para8 graphs (2) and (3), each participant shall work for

9 not fewer than 30 hours per week (or, at the option

10 of the State, 20 hours per week during fiscal years

11 1997 and 1998, not fewer than 25 hours per week

12 during fiscal year 1999, not fewer than 30 hours per

13 week during fiscal years 2000 and 2001, and not

14 fewer than 35 hours per week thereafter) in a com15 munity service job, and be paid at a rate which is

16 not greater than 75 percent (or, at the option of the

17 State, 100 percent) of the maximum amount of aid

18 payable under the State plan approved under part A

19 to a family of the same size and composition with

20 no income.

21 ‘‘(2) EXCEPTION.—(A) If the participant has

22 obtained unsubsidized part-time employment in the

23 private sector, the State shall provide the participant

24 with a part-time community service job.
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1 ‘‘(B) If the State provides a participant a part2 time community service job under subparagraph (A),

3 the State shall ensure that the participant works for

4 not fewer than 30 hours per week.

5 ‘‘(3) WAGES NOT CONSIDERED EARNED IN6 COME.—Wages paid under a workfare program shall

7 not be considered to be earned income for purposes

8 of any provision of law.

9 ‘‘(4) COMMUNITY SERVICE JOB DEFINED.—For

10 purposes of this section, the term ‘community serv11 ice job’ means—

12 ‘‘(A) a job provided to a participant by the

13 State administering the State plan under part

14 A; or

15 ‘‘(B) a job provided to a participant by any

16 other employer for which all or part of the

17 wages are paid by the State.

18 A State may provide or subsidize under the program

19 any job which the State determines to be appro20 priate.

21 ‘‘(f) TEMPORARY SUBSIDIZED JOB CREATION.—A

22 State that establishes a workfare program under this part

23 may establish a program similar to the program operated

24 by the State of Oregon, which is known as ‘JOBS Plus’.

25 ‘‘(g) WORK SUPPLEMENTATION PROGRAM.—
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1 ‘‘(1) IN GENERAL.—A State that establishes a

2 workfare program under this part may institute a

3 work supplementation program under which the

4 State, to the extent it considers appropriate, may re5 serve the sums that would otherwise be payable to

6 participants in the program as a community service

7 minimum wage and use the sums instead for the

8 purpose of providing and subsidizing private sector

9 jobs for the participants.

10 ‘‘(2) EMPLOYER AGREEMENT.—An employer

11 who provides a private sector job to a participant

12 under paragraph (1) shall agree to provide to the

13 participant an amount in wages equal to the poverty

14 threshold for a family of three.

15 ‘‘(h) JOB SEARCH REQUIREMENT.—The State shall

16 require each participant to spend a minimum of 5 hours

17 per week on activities related to securing unsubsidized

18 full-time employment in the private sector.

19 ‘‘(i) DURATION OF PARTICIPATION.—

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), an individual may not participate for

22 more than 2 years in a workfare program under this

23 part.

24 ‘‘(2) AUTHORITY TO ALLOW REPEATED PAR25 TICIPATION.—
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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B), a State may allow an individual

3 who, by reason of paragraph (1), would be pro4 hibited from participating in the State program

5 established under this part to participate in the

6 program for such additional period or periods

7 as the State determines appropriate.

8 ‘‘(B) LIMITATION ON PERCENTAGE OF RE9 PEAT PARTICIPANTS.—

10 ‘‘(i) IN GENERAL.—Except as pro11 vided in clause (ii), the number of individ12 uals allowed under subparagraph (A) to

13 participate during a program year in a

14 State program established under this part

15 shall not exceed 10 percent of the total

16 number of individuals who participated in

17 the program during the immediately pre18 ceding program year.

19 ‘‘(ii) AUTHORITY TO INCREASE LIMI20 TATION.—

21 ‘‘(I) PETITION.—A State may re22 quest the Secretary to increase the

23 percentage limitation imposed by

24 clause (i) to not more than 15 per25 cent.
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1 ‘‘(II) AUTHORITY TO GRANT RE2 QUEST.—The Secretary may approve

3 a request made pursuant to subclause

4 (I) if the Secretary deems it appro5 priate. The Secretary shall develop

6 recommendations on the criteria that

7 should be applied in evaluating re8 quests under subclause (I).

9 ‘‘(j) USE OF PLACEMENT COMPANIES.—A State that

10 establishes a workfare program under this part may enter

11 into contracts with private companies (whether operated

12 for profit or not for profit) for the placement of partici13 pants in the program in positions of full-time employment,

14 preferably in the private sector, for wages sufficient to

15 eliminate the need of such participants for cash assistance

16 in accordance with section 493.

17 ‘‘(k) MAXIMUM OF 3 COMMUNITY SERVICE JOBS.—

18 A program participant may not receive more than 3 com19 munity service jobs under the program.

20 ‘‘Part I—Job Placement Voucher Program

21 ‘‘SEC. 500B. JOB PLACEMENT VOUCHER PROGRAM.

22 ‘‘A State that is not operating a workfare program

23 under part H may establish a job placement voucher pro24 gram that meets the following requirements:
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1 ‘‘(1) The program shall offer each program par2 ticipant a voucher which the participant may use to

3 obtain employment in the private sector.

4 ‘‘(2) An employer who receives a voucher issued

5 under the program from an individual may redeem

6 the voucher at any time after the individual has been

7 employed by the employer for 6 months, unless an8 other employee of the employer was displaced by the

9 employment of the individual.

10 ‘‘(3) Upon presentation of a voucher by an em11 ployer to the State agency responsible for the admin12 istration of the program, the State agency shall pay

13 to the employer an amount equal to 50 percent of

14 the total amount of aid paid under the State plan

15 approved under part A to the family of which the in16 dividual is a member for the most recent 12 months

17 for which the family was eligible for such aid.’’.

18 (c) FUNDING.—Section 403 (42 U.S.C. 603) is

19 amended by inserting after subsection (b) the following:

20 ‘‘(c)(1) Each State that is operating a program in

21 accordance with subpart 1 of part G (or in accordance

22 with a plan approved under subpart 2 of part G), and a

23 program in accordance with part H or I shall be entitled

24 to payments under subsection (d) for any fiscal year in

25 an amount equal to the sum of the applicable percentages
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1 (specified in such subsection) of its expenditures to carry

2 out such programs (subject to limitations prescribed by

3 or pursuant to such parts or this section on expenditures

4 that may be included for purposes of determining payment

5 under subsection (d)), but such payments for any fiscal

6 year in the case of any State may not exceed the limitation

7 determined under paragraph (2) with respect to the State.

8 ‘‘(2) The limitation determined under this paragraph

9 with respect to a State for any fiscal year is the amount

10 that bears the same ratio to the amount specified in para11 graph (3) for such fiscal year as the average monthly num12 ber of adult recipients (as defined in paragraph (4)) in

13 the State in the preceding fiscal year bears to the average

14 monthly number of such recipients in all the States for

15 such preceding year.

16 ‘‘(3)(A) The amount specified in this paragraph is—

17 ‘‘(i) $1,500,000,000 for fiscal year 1997;

18 ‘‘(iii) $2,000,000,000 for fiscal year 1998;

19 ‘‘(iv) $2,600,000,000 for fiscal year 1999;

20 ‘‘(v) $3,100,000,000 for fiscal year 2000; and

21 ‘‘(vi) the amount determined under subpara22 graph (B) for fiscal year 2001 and each succeeding

23 fiscal year.

24 ‘‘(B) The amount determined under this subpara25 graph for a fiscal year is the product of the following:
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1 ‘‘(i) The amount specified in this paragraph for

2 the immediately preceding fiscal year.

3 ‘‘(ii) 1.00 plus the percentage (if any) by

4 which—

5 ‘‘(I) the average of the Consumer Price

6 Index (as defined in section 1(f)(5) of the Inter7 nal Revenue Code of 1986) for the most recent

8 12-month period for which such information is

9 available; exceeds

10 ‘‘(II) the average of the Consumer Price

11 Index (as so defined) for the 12-month period

12 ending on June 30 of the 2nd preceding fiscal

13 year.

14 ‘‘(iii) The amount that bears the same ratio to

15 the amount specified in this paragraph for the im16 mediately preceding fiscal year as the number of in17 dividuals whom the Secretary estimates will partici18 pate in programs operated under part G, H, or I

19 during the fiscal year bears to the total number of

20 individuals who participated in such programs dur21 ing such preceding fiscal year.

22 ‘‘(4) For purposes of this subsection, the term ‘adult

23 recipient’ in the case of any State means an individual

24 other than a dependent child (unless such child is the cus25 todial parent of another dependent child) whose needs are
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1 met (in whole or in part) with payments of aid to families

2 with dependent children.

3 ‘‘(d)(1) In lieu of any payment under subsection (a),

4 the Secretary shall pay to each State that is operating a

5 program in accordance with subpart 1 of part G (or in

6 accordance with a plan approved under subpart 2 of part

7 G), and a program in accordance with part H or I, and

8 to which section 1108 does not apply, with respect to ex9 penditures by the State to carry out such programs, an

10 amount equal to 70 percent, or the Federal medical assist11 ance percentage (as defined in section 1905(b)) increased

12 by 10 percentage points, whichever is the greater, of the

13 total amount expended during the quarter for the oper14 ation and administration of such programs.

15 ‘‘(2) In lieu of any payment under subsection (a), the

16 Secretary shall pay to each State that is operating a pro17 gram in accordance with subpart 1 of part G (or in accord18 ance with a plan approved under subpart 2 of part G),

19 and a program in accordance with part H or I, and to

20 which section 1108 applies, with respect to expenditures

21 by the State to carry out such programs (including ex22 penditures for child care under section 402(g)(1)(A)), an

23 amount equal to—

24 ‘‘(A) with respect to so much of such expendi25 tures in a fiscal year as do not exceed the State’s
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1 expenditures in the fiscal year 1987 with respect to

2 which payments were made to such State from its

3 allotment for such fiscal year pursuant to part C of

4 this title as then in effect, 90 percent; and

5 ‘‘(B) with respect to so much of such expendi6 tures in a fiscal year as exceed the amount described

7 in subparagraph (A)—

8 ‘‘(i) 50 percent, in the case of expenditures

9 for administrative costs made by a State in op10 erating such programs for such fiscal year

11 (other than the personnel costs for staff em12 ployed full-time in the operation of such pro13 gram) and the costs of transportation and other

14 work-related supportive services under section

15 402(g)(2); and

16 ‘‘(ii) 70 percent or the Federal medical as17 sistance percentage (as defined in the last sen18 tence of section 1118) increased by 10 percent19 age points, whichever is the greater, in the case

20 of expenditures made by a State in operating

21 such programs for such fiscal year (other than

22 for costs described in clause (i)).

23 ‘‘(3) With respect to the amount for which payment

24 is made to a State under paragraph (2)(A), the State’s
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1 expenditures for the costs of operating such programs may

2 be in cash or in kind, fairly evaluated.

3 ‘‘(4) Not more than 10 percent of the amount payable

4 to a State under this subsection for a quarter may be for

5 expenditures made during the quarter with respect to pro6 gram participants who are not eligible for aid under the

7 State plan approved under part A.’’.

8 (d) SECRETARY’S SPECIAL ADJUSTMENT FUND.—

9 Section 403 (42 U.S.C. 603) is amended by adding at the

10 end the following:

11 ‘‘(p)(1) There shall be available to the Secretary from

12 the amount appropriated for payments under subsection

13 (c) for States’ programs under parts G and H for fiscal

14 year 1996, $300,000,000 for special adjustments to

15 States’ limitations on Federal payments for such pro16 grams.

17 ‘‘(2) A State may, not later than March 1 and Sep18 tember 1 of each fiscal year, submit to the Secretary a

19 request to adjust the limitation on payments under this

20 section with respect to its program under part G (and,

21 in fiscal years after 1997) its program under part H for

22 the following fiscal year. The Secretary shall only consider

23 such a request from a State which has, or which dem24 onstrates convincingly on the basis of estimates that it

25 will, submit allowable claims for Federal payment in the
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1 full amount available to it under subsection (c) in the cur2 rent fiscal year and obligated 95 percent of its full amount

3 in the prior fiscal year. The Secretary shall by regulation

4 prescribe criteria for the equitable allocation among the

5 States of Federal payments pursuant to adjustments of

6 the limitations referred to in the preceding sentence in the

7 case where the requests of all States that the Secretary

8 finds reasonable exceed the amount available, and, within

9 30 days following the dates specified in this paragraph,

10 will notify each State whether one or more of its limita11 tions will be adjusted in accordance with the State’s re12 quest and the amount of the adjustment (which may be

13 some or all of the amount requested).

14 ‘‘(3) The Secretary may adjust the limitation on Fed15 eral payments to a State for a fiscal year under subsection

16 (c), and upon a determination by the Secretary that (and

17 the amount by which) a State’s limitation should be

18 raised, the amount specified in either such subsection, or

19 both, shall be considered to be so increased for the follow20 ing fiscal year.

21 ‘‘(4) The amount made available under paragraph (1)

22 for special adjustments shall remain available to the Sec23 retary until expended. That amount shall be reduced by

24 the sum of the adjustments approved by the Secretary in

25 any fiscal year, and the amount shall be increased in a
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1 fiscal year by the amount by which all States’ limitations

2 under subsection (c) of this section and section 2008 for

3 a fiscal year exceeded the sum of the Federal payments

4 under such provisions of law for such fiscal year, but for

5 fiscal years after 1997, such amount at the end of such

6 fiscal year shall not exceed $400,000,000.’’.

7 (e) CONFORMING AMENDMENTS.—

8 (1) Section 402(a) (42 U.S.C. 602(a)) is

9 amended by striking paragraph (19).

10 (2) Section 403 (42 U.S.C. 603) is amended by

11 striking subsections (k) and (l).

12 (3) Section 407(b)(1)(B) (42 U.S.C.

13 607(b)(1)(B)) is amended—

14 (A) by adding ‘‘and’’ at the end of clause

15 (iii);

16 (B) by striking ‘‘; and’’ at the end of

17 clause (iv) and inserting a period; and

18 (C) by striking clause (v).

19 (4) Section 407(b)(2)(B)(ii)(I) (42 U.S.C.

20 607(b)(2)(B)(ii)(I)) is amended by striking ‘‘under

21 section 402(a)(19) or’’.

22 (5) Section 407(b)(2)(C) (42 U.S.C.

23 607(b)(2)(C)) is amended by striking ‘‘section

24 402(a)(19) and’’.
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1 (6) Section 1115(b)(2)(A) (42 U.S.C.

2 1315(b)(2)(A)) is amended by striking ‘‘, and

3 402(a)(19) (relating to the work incentive pro4 gram)’’.

5 (7) Section 1108 (42 U.S.C. 1308) is amend6 ed—

7 (A) in subsection (a), by striking ‘‘or, in

8 the case of part A of title IV, section 403(k)’’;

9 and

10 (B) in subsection (d), by striking ‘‘(exclu11 sive of any amounts on account of services and

12 items to which, in the case of part A of such

13 title, section 403(k) applies)’’.

14 (8) Section 1902(a)(19)(A)(i)(I) (42 U.S.C.

15 1396a(a)(19)(A)(i)(I)) is amended by striking

16 ‘‘482(e)(6)’’ and inserting ‘‘486(f)’’.

17 (9) Section 1928(a)(1) (42 U.S.C. 1396s(a)(1))

18 is amended by striking ‘‘482(e)(6)’’ and inserting

19 ‘‘486(f)’’.

20 (f) INTENT OF THE CONGRESS.—The Congress in21 tends for State activities under section 494 of the Social

22 Security Act (as added by the amendment made by section

23 301(b) of this Act) to emphasize the use of the funds that

24 would otherwise be used to provide individuals with aid

25 to families with dependent children under part A of title
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1 IV of the Social Security Act and with food stamp benefits

2 under the Food Stamp Act of 1977, to subsidize the wages

3 of such individuals in temporary jobs.

4 (g) SENSE OF THE CONGRESS.—It is the sense of

5 the Congress that States should target individuals who

6 have not attained 25 years of age for participation in the

7 program established by the State under part G of title

8 IV of the Social Security Act (as added by the amendment

9 made by section 301(b) of this section) in order to break

10 the cycle of welfare dependency.

11 SEC. 302. REGULATIONS.

12 The Secretary of Health and Human Services shall

13 prescribe such regulations as may be necessary to imple14 ment the amendments made by this title.

15 SEC. 303. APPLICABILITY TO STATES.

16 (a) STATE OPTION TO ACCELERATE APPLICABIL17 ITY.—If a State formally notifies the Secretary of Health

18 and Human Services that the State desires to accelerate

19 the applicability to the State of the amendments made by

20 this title, the amendments shall apply to the State on and

21 after such earlier date as the State may select.

22 (b) STATE OPTION TO DELAY APPLICABILITY UNTIL

23 WAIVERS EXPIRE.—The amendments made by this title

24 shall not apply to a State with respect to which there is

25 in effect a waiver issued under section 1115 of the Social
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1 Security Act for the State program established under part

2 G of title IV of such Act, until the waiver expires, if the

3 State formally notifies the Secretary of Health and

4 Human Services that the State desires to so delay such

5 effective date.

6 (c) AUTHORITY OF THE SECRETARY OF HEALTH

7 AND HUMAN SERVICES TO DELAY APPLICABILITY TO A

8 STATE.—If a State formally notifies the Secretary of

9 Health and Human Services that the State desires to

10 delay the applicability to the State of the amendments

11 made by this title, the amendments shall apply to the

12 State on and after any later date agreed upon by the Sec13 retary and the State.

14 SEC. 304. SENSE OF THE CONGRESS RELATING TO AVAIL15 ABILITY OF WORK FIRST PROGRAM IN RURAL

16 AREAS.

17 It is the sense of the Congress that the Secretary of

18 Health and Human Services and the States should con19 sider the needs of rural areas in designing State plans

20 under part G of title IV of the Social Security Act.

21 SEC. 305. GRANTS TO COMMUNITY-BASED ORGANIZATIONS.

22 (a) IN GENERAL.—The Secretary of Health and

23 Human Services may make grants in accordance with this

24 section to community-based organizations that move re25 cipients of aid to families with dependent children under
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1 a State plan approved under part A of title IV of the So2 cial Security Act or under other public assistance pro3 grams into private sector work.

4 (b) AUTHORIZATION OF APPROPRIATIONS.—There

5 are authorized to be appropriated to carry out this section

6 $25,000,000 for fiscal year 1996 and $50,000,000 for fis7 cal years 1997, 1998, 1999, and 2000.

8 (c) ELIGIBLE ORGANIZATIONS.—The Secretary of

9 Health and Human Services shall award grants to commu10 nity-based organizations that—

11 (1) receive at least 5 percent of their funding

12 from local government sources; and

13 (2) move recipients referred to in subsection (a)

14 in the direction of unsubsidized private employment

15 by integrating and co-locating at least 5 of the fol16 lowing services—

17 (A) case management;

18 (B) job training;

19 (C) child care;

20 (D) housing;

21 (E) health care services;

22 (F) nutrition programs;

23 (G) life skills training; and

24 (H) parenting skills.

25 (d) AWARDING OF GRANTS.—
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1 (1) IN GENERAL.—The Secretary shall award

2 grants based on the quality of applications, subject

3 to paragraphs (2) and (3).

4 (2) PREFERENCE IN AWARDING GRANTS.—In

5 awarding grants under this section, the Secretary

6 shall give preference to organizations which receive

7 more than 50 percent of their funding from State

8 government, local government or private sources.

9 (3) DISTRIBUTION OF GRANT.—The Secretary

10 shall award at least 1 grant to each State from

11 which the Secretary received an application.

12 (4) LIMITATION ON SIZE OF GRANT.—The Sec13 retary shall not award any grants under this section

14 of more than $1,000,000.

15 (e) ISSUANCE OF REGULATIONS.—Not less than 6

16 months after the date of the enactment of this section,

17 the Secretary shall prescribe such regulations as may be

18 necessary to implement this section.
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1 TITLE IV—FAMILY RESPONSIBIL2 ITY AND IMPROVED CHILD

3 SUPPORT ENFORCEMENT

4 Subtitle A—Eligibility and Other

5 Matters Concerning Title IV–D

6 Program Clients

7 SEC. 401. STATE OBLIGATION TO PROVIDE PATERNITY ES8 TABLISHMENT AND CHILD SUPPORT EN9 FORCEMENT SERVICES.

10 (a) STATE LAW REQUIREMENTS.—Section 466(a)

11 (42 U.S.C. 666(a)) is amended by inserting after para12 graph (11) the following:

13 ‘‘(12) USE OF CENTRAL CASE REGISTRY AND

14 CENTRALIZED COLLECTIONS UNIT.—Procedures

15 under which—

16 ‘‘(A) every child support order established

17 or modified in the State on or after October 1,

18 1998, is recorded in the central case registry

19 established in accordance with section 454A(e);

20 and

21 ‘‘(B) child support payments are collected

22 through the centralized collections unit estab23 lished in accordance with section 454B—
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1 ‘‘(i) on and after October 1, 1998,

2 under each order subject to wage withhold3 ing under section 466(b); and

4 ‘‘(ii) on and after October 1, 1999,

5 under each other order required to be re6 corded in such central case registry under

7 this paragraph or section 454A(e), except

8 as provided in subparagraph (C); and

9 ‘‘(C)(i) parties subject to a child support

10 order described in subparagraph (B)(ii) may

11 opt out of the procedure for payment of support

12 through the centralized collections unit (but not

13 the procedure for inclusion in the central case

14 registry) by filing with the State agency a writ15 ten agreement, signed by both parties, to an

16 alternative payment procedure; and

17 ‘‘(ii) an agreement described in clause (i)

18 becomes void whenever either party advises the

19 State agency of an intent to vacate the agree20 ment.’’.

21 (b) STATE PLAN REQUIREMENTS.—Section 454 (42

22 U.S.C. 654) is amended—

23 (1) by striking paragraph (4) and inserting the

24 following:

25 ‘‘(4) provide that such State will undertake—
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1 ‘‘(A) to provide appropriate services under

2 this part to—

3 ‘‘(i) each child with respect to whom

4 an assignment is effective under section

5 402(a)(26), 471(a)(17), or 1912 (except in

6 cases where the State agency determines,

7 in accordance with paragraph (25), that it

8 is against the best interests of the child to

9 do so); and

10 ‘‘(ii) each child not described in clause

11 (i)—

12 ‘‘(I) with respect to whom an in13 dividual applies for such services; and

14 ‘‘(II) (on and after October 1,

15 1998) each child with respect to

16 whom a support order is recorded in

17 the central State case registry estab18 lished under section 454A, regardless

19 of whether application is made for

20 services under this part; and

21 ‘‘(B) to enforce the support obligation es22 tablished with respect to the custodial parent of

23 a child described in subparagraph (A) unless

24 the parties to the order which establishes the

25 support obligation have opted, in accordance
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1 with section 466(a)(12)(C), for an alternative

2 payment procedure.’’; and

3 (2) in paragraph (6)—

4 (A) by striking subparagraph (A) and in5 serting the following:

6 ‘‘(A) services under the State plan shall be

7 made available to nonresidents on the same

8 terms as to residents;’’;

9 (B) in subparagraph (B)—

10 (i) by inserting ‘‘on individuals not re11 ceiving assistance under part A’’ after

12 ‘‘such services shall be imposed’’; and

13 (ii) by inserting ‘‘but no fees or costs

14 shall be imposed on any absent or custo15 dial parent or other individual for inclusion

16 in the central State registry maintained

17 pursuant to section 454A(e)’’; and

18 (C) in each of subparagraphs (B), (C), and

19 (D)—

20 (i) by indenting such subparagraph

21 and aligning its left margin with the left

22 margin of subparagraph (A); and

23 (ii) by striking the final comma and

24 inserting a semicolon.

25 (c) CONFORMING AMENDMENTS.—
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1 (1) Section 452(g)(2)(A) (42 U.S.C.

2 652(g)(2)(A)) is amended by striking ‘‘454(6)’’ each

3 place it appears and inserting ‘‘454(4)(A)(ii)’’.

4 (2) Section 454(23) (42 U.S.C. 654(23)) is

5 amended, effective October 1, 1998, by striking ‘‘in6 formation as to any application fees for such services

7 and’’.

8 (3) Section 466(a)(3)(B) (42 U.S.C.

9 666(a)(3)(B)) is amended by striking ‘‘in the case of

10 overdue support which a State has agreed to collect

11 under section 454(6)’’ and inserting ‘‘in any other

12 case’’.

13 (4) Section 466(e) (42 U.S.C. 666(e)) is

14 amended by striking ‘‘or (6)’’.

15 SEC. 402. DISTRIBUTION OF PAYMENTS.

16 (a) DISTRIBUTIONS THROUGH STATE CHILD SUP17 PORT ENFORCEMENT AGENCY TO FORMER ASSISTANCE

18 RECIPIENTS.—Section 454(5) (42 U.S.C. 654(5)) is

19 amended—

20 (1) in subparagraph (A)—

21 (A) by inserting ‘‘except as otherwise spe22 cifically provided in section 464 or 466(a)(3),’’

23 after ‘‘is effective,’’; and

24 (B) by striking ‘‘except that’’ and all that

25 follows through the semicolon; and
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1 (2) in subparagraph (B), by striking ‘‘, except’’

2 and all that follows through ‘‘medical assistance’’.

3 (b) DISTRIBUTION TO A FAMILY CURRENTLY RE4 CEIVING AFDC.—Section 457 (42 U.S.C. 657) is amend5 ed—

6 (1) by striking subsection (a) and redesignating

7 subsection (b) as subsection (a);

8 (2) in subsection (a), as redesignated—

9 (A) in the matter preceding paragraph (2),

10 to read as follows:

11 ‘‘(a) IN THE CASE OF A FAMILY RECEIVING

12 AFDC.—Amounts collected under this part during any

13 month as support of a child who is receiving assistance

14 under part A (or a parent or caretaker relative of such

15 a child) shall (except in the case of a State exercising the

16 option under subsection (b)) be distributed as follows:

17 ‘‘(1) an amount equal to the amount that will

18 be disregarded pursuant to section 402(a)(8)(A)(vi)

19 shall be taken from each of—

20 ‘‘(A) amounts received in a month which

21 represent payments for that month; and

22 ‘‘(B) amounts received in a month which

23 represent payments for a prior month which

24 were made by the absent parent in the month

25 when due;
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1 and shall be paid to the family without affecting its

2 eligibility for assistance or decreasing any amount

3 otherwise payable as assistance to such family dur4 ing such month;’’;

5 (B) in paragraph (4), by striking ‘‘or (B)’’

6 and all that follows and inserting ‘‘; then (B)

7 from any remainder, amounts equal to arrear8 ages of such support obligations assigned, pur9 suant to part A, to any other State or States

10 shall be paid to such other State or States and

11 used to pay any such arrearages (with appro12 priate reimbursement of the Federal Govern13 ment to the extent of its participation in the

14 financing); and then (C) any remainder shall be

15 paid to the family.’’.

16 (3) by inserting after subsection (a), as redesig17 nated, the following new subsection:

18 ‘‘(b) ALTERNATIVE DISTRIBUTION IN CASE OF FAM19 ILY RECEIVING AFDC.—In the case of a State electing

20 the option under this subsection, amounts collected as de21 scribed in subsection (a) shall be distributed as follows:

22 ‘‘(1) an amount equal to the amount that will

23 be disregarded pursuant to section 402(a)(8)(A)(vi)

24 shall be taken from each of—
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1 ‘‘(A) amounts received in a month which

2 represent payments for that month; and

3 ‘‘(B) amounts received in a month which

4 represent payments for a prior month which

5 were made by the absent parent in the month

6 when due;

7 and shall be paid to the family without affecting its

8 eligibility for assistance or decreasing any amount

9 otherwise payable as assistance to such family dur10 ing such month;

11 ‘‘(2) second, from any remainder, amounts

12 equal to the balance of support owed for the current

13 month shall be paid to the family;

14 ‘‘(3) third, from any remainder, amounts equal

15 to arrearages of such support obligations assigned,

16 pursuant to part A, to the State making the collec17 tion shall be retained and used by such State to pay

18 any such arrearages (with appropriate reimburse19 ment of the Federal Government to the extent of its

20 participation in the financing);

21 ‘‘(4) fourth, from any remainder, amounts

22 equal to arrearages of such support obligations as23 signed, pursuant to part A, to any other State or

24 States shall be paid to such other State or States

25 and used to pay any such arrearages (with appro-
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1 priate reimbursement of the Federal Government to

2 the extent of its participation in the financing); and

3 ‘‘(5) fifth, any remainder shall be paid to the

4 family.’’.

5 (c) DISTRIBUTION TO A FAMILY NOT RECEIVING

6 AFDC.—

7 (1) IN GENERAL.—Section 457(c) (42 U.S.C.

8 657(c)) is amended to read as follows:

9 ‘‘(c) IN CASE OF FAMILY NOT RECEIVING AFDC.—

10 Amounts collected by a State agency under this part dur11 ing any month as support of a child who is not receiving

12 assistance under part A (or of a parent or caretaker rel13 ative of such a child) shall (subject to the remaining provi14 sions of this section) be distributed as follows:

15 ‘‘(1) first, amounts equal to the total of such

16 support owed for such month shall be paid to the

17 family;

18 ‘‘(2) second, from any remainder, amounts

19 equal to arrearages of such support obligations for

20 months during which such child did not receive as21 sistance under part A shall be paid to the family;

22 ‘‘(3) third, from any remainder, amounts equal

23 to arrearages of such support obligations assigned to

24 the State making the collection pursuant to part A

25 shall be retained and used by such State to pay any
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1 such arrearages (with appropriate reimbursement of

2 the Federal Government to the extent of its partici3 pation in the financing);

4 ‘‘(4) fourth, from any remainder, amounts

5 equal to arrearages of such support obligations as6 signed to any other State pursuant to part A shall

7 be paid to such other State or States, and used to

8 pay such arrearages, in the order in which such ar9 rearages accrued (with appropriate reimbursement

10 of the Federal Government to the extent of its par11 ticipation in the financing).’’.

12 (2) EFFECTIVE DATE.—The amendment made

13 by paragraph (1) shall take effect on October 1,

14 1999.

15 (d) DISTRIBUTION TO A CHILD RECEIVING ASSIST16 ANCE UNDER PART E.—Section 457(d) (42 U.S.C.

17 657(d)) is amended, in the matter preceding paragraph

18 (1), by striking ‘‘Notwithstanding the preceding provisions

19 of this section, amounts’’ and inserting the following:

20 ‘‘(d) IN CASE OF A CHILD RECEIVING ASSISTANCE

21 UNDER PART E.—Amounts’’.

22 (e) SUSPENSION OR CANCELLATION OF DEBTS UPON

23 MARRIAGE OF PARENTS.—Section 457 (42 U.S.C. 657)

24 is amended by adding at the end the following:
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1 ‘‘(e) SUSPENSION OR CANCELLATION OF DEBTS TO

2 STATE UPON MARRIAGE OF PARENTS.—

3 ‘‘(1) CIRCUMSTANCES REQUIRING SUSPENSION

4 OR CANCELLATION.—In any case in which a State

5 has been assigned rights to support owed with re6 spect to a child who is receiving or has received as7 sistance under part A and—

8 ‘‘(A) the parent owing such support mar9 ries (or remarries) the parent with whom such

10 child is living and to whom such support is

11 owed and applies to the State for relief under

12 this subsection;

13 ‘‘(B) the State determines (in accordance

14 with procedures and criteria established by the

15 Secretary) that the marriage is not a sham

16 marriage entered into solely to satisfy this sub17 section; and

18 ‘‘(C) the combined income of such parents

19 is less than twice the Federal poverty line,

20 the State shall afford relief to the parent owing such

21 support in accordance with paragraph (2).

22 ‘‘(2) SUSPENSION OR CANCELLATION.—In the

23 case of a marriage or remarriage described in para24 graph (1), the State shall either—
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1 ‘‘(A) cancel all debts owed to the State

2 pursuant to such assignment; or

3 ‘‘(B) suspend collection of such debts for

4 the duration of such marriage, and cancel such

5 debts if such duration extends beyond the end

6 of the period with respect to which support is

7 owed.

8 ‘‘(3) NOTICE REQUIRED.—The State shall no9 tify custodial parents of children who are receiving

10 aid under part A of the relief available under this

11 subsection to individuals who marry (or remarry).’’.

12 (f) STATE OPTIONS TO PASS THROUGH AND TO DIS13 REGARD CHILD SUPPORT AMOUNTS.—

14 (1) STATE OPTION TO PASS THROUGH CHILD

15 SUPPORT.—Section 457(b)(1) (42 U.S.C. 657(b)(1))

16 is amended to read as follows:

17 ‘‘(1) at State option, an amount determined by

18 the State, equal to all or a portion of the monthly

19 support obligation, may be paid to the family from

20 each of—

21 ‘‘(A) amounts received in a month which

22 represent payments for that month; and

23 ‘‘(B) amounts received in a month which

24 represent payments for a prior month which
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1 were made by the absent parent in the month

2 when due;’’.

3 (2) STATE OPTION TO DISREGARD CHILD SUP4 PORT.—Section 402(a)(8)(A)(vi) (42 U.S.C

5 602(a)(8)(A)(vi)) is amended—

6 (A) by striking ‘‘shall disregard the first

7 $50’’ and inserting ‘‘may disregard all or any

8 portion’’;

9 (B) by striking ‘‘the first $50’’ and insert10 ing ‘‘and all or any portion’’; and

11 (C) by striking ‘‘section 457(b)’’ and in12 serting ‘‘section 457(a)’’.

13 (g) PASS THROUGH AND DISREGARD OF SUPPORT

14 COLLECTED ON BEHALF OF A FAMILY SUBJECT TO THE

15 FAMILY CAP.—

16 (1) PASS THROUGH.—Section 457 (42 U.S.C.

17 657), as amended by subsection (e) of this section,

18 is amended by adding at the end the following:

19 ‘‘(f) PASS THROUGH OF SUPPORT COLLECTED ON

20 BEHALF OF A FAMILY SUBJECT TO THE FAMILY CAP.—

21 Amounts collected by a State agency under this part dur22 ing any month as support of a child who is a member

23 of a 1-parent family subject to section 402(a)(51) shall

24 be distributed to the family.’’.
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1 (2) DISREGARD.—Section 402(a)(8)(A)(vi) (42

2 U.S.C. 602(a)(8)(A)(vi)) is amended by inserting

3 ‘‘, except that, in the case of a 1-parent family sub4 ject to paragraph (51), all support payments col5 lected and paid to the family under section 457(f)

6 shall be disregarded’’ before the semicolon.

7 (h) REGULATIONS.—The Secretary of Health and

8 Human Services shall promulgate regulations—

9 (1) under part D of title IV of the Social Secu10 rity Act, establishing a uniform nationwide standard

11 for allocation of child support collections from an ob12 ligor owing support to more than one family; and

13 (2) under part A of such title, establishing

14 standards applicable to States electing the alter15 native formula under section 457(b) of such Act for

16 distribution of collections on behalf of families re17 ceiving Aid to Families with Dependent Children,

18 designed to minimize irregular monthly payments to

19 such families.

20 (i) CLERICAL AMENDMENT.—Section 454 (42 U.S.C.

21 654) is amended—

22 (1) in paragraph (11), by striking ‘‘(11)’’ and

23 inserting ‘‘(11)(A)’’; and

24 (2) by redesignating paragraph (12) as sub25 paragraph (B) of paragraph (11).
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1 SEC. 403. DUE PROCESS RIGHTS.

2 (a) IN GENERAL.—Section 454 (42 U.S.C. 654), as

3 amended by section 402(f) of this Act, is amended by in4 serting after paragraph (11) the following new paragraph:

5 ‘‘(12) provide for procedures to ensure that—

6 ‘‘(A) individuals who are applying for or

7 receiving services under this part, or are parties

8 to cases in which services are being provided

9 under this part—

10 ‘‘(i) receive notice of all proceedings in

11 which support obligations might be estab12 lished or modified; and

13 ‘‘(ii) receive a copy of any order estab14 lishing or modifying a child support obliga15 tion, or (in the case of a petition for modi16 fication) a notice of determination that

17 there should be no change in the amount

18 of the child support award, within 14 days

19 after issuance of such order or determina20 tion;

21 ‘‘(B) individuals applying for or receiving

22 services under this part have access to a fair

23 hearing that meets standards established by the

24 Secretary and ensures prompt consideration

25 and resolution of complaints (but the resort to
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1 such procedure shall not stay the enforcement

2 of any support order); and

3 ‘‘(C) individuals adversely affected by the

4 establishment or modification of (or, in the case

5 of a petition for modification, the determination

6 that there should be no change in) a child sup7 port order shall be afforded not less than 30

8 days after the receipt of the order or determina9 tion to initiate proceedings to challenge such

10 order or determination;’’.

11 (b) EFFECTIVE DATE.—The amendment made by

12 subsection (a) shall become effective on October 1, 1997.

13 SEC. 404. PRIVACY SAFEGUARDS.

14 (a) STATE PLAN REQUIREMENT.—Section 454 (42

15 U.S.C. 454) is amended—

16 (1) by striking ‘‘and’’ at the end of paragraph

17 (23);

18 (2) by striking the period at the end of para19 graph (24) and inserting ‘‘; and’’; and

20 (3) by adding after paragraph (24) the follow21 ing:

22 ‘‘(25) will have in effect safeguards applicable

23 to all sensitive and confidential information handled

24 by the State agency designed to protect the privacy

25 rights of the parties, including—
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1 ‘‘(A) safeguards against unauthorized use

2 or disclosure of information relating to proceed3 ings or actions to establish paternity, or to es4 tablish or enforce support;

5 ‘‘(B) prohibitions on the release of infor6 mation on the whereabouts of one party to an7 other party against whom a protective order

8 with respect to the former party has been en9 tered; and

10 ‘‘(C) prohibitions on the release of infor11 mation on the whereabouts of one party to an12 other party if the State has reason to believe

13 that the release of the information may result

14 in physical or emotional harm to the former

15 party.’’.

16 (b) EFFECTIVE DATE.—The amendment made by

17 subsection (a) shall become effective on October 1, 1997.

18 Subtitle B—Program

19 Administration and Funding

20 SEC. 411. FEDERAL MATCHING PAYMENTS.

21 (a) INCREASED BASE MATCHING RATE.—Section

22 455(a)(2) (42 U.S.C. 655(a)(2)) is amended to read as

23 follows:

24 ‘‘(2) The applicable percent for a quarter for

25 purposes of paragraph (1)(A) is—
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1 ‘‘(A) for fiscal year 1997, 69 percent,

2 ‘‘(B) for fiscal year 1998, 72 percent, and

3 ‘‘(C) for fiscal year 1999 and succeeding

4 fiscal years, 75 percent.’’.

5 (b) MAINTENANCE OF EFFORT.—Section 455 (42

6 U.S.C. 655) is amended—

7 (1) in subsection (a)(1), in the matter preced8 ing subparagraph (A), by striking ‘‘From’’ and in9 serting ‘‘Subject to subsection (c), from’’; and

10 (2) by inserting after subsection (b) the follow11 ing new subsection:

12 ‘‘(c) MAINTENANCE OF EFFORT.—Notwithstanding

13 the provisions of subsection (a), total expenditures for the

14 State program under this part for fiscal year 1997 and

15 each succeeding fiscal year, reduced by the percentage

16 specified for such fiscal year under subsection (a)(2)(A),

17 (B), or (C)(i), shall not be less than such total expendi18 tures for fiscal year 1996, reduced by 66 percent.’’.

19 SEC. 412. PERFORMANCE-BASED INCENTIVES AND PEN20 ALTIES.

21 (a) INCENTIVE ADJUSTMENTS TO FEDERAL MATCH22 ING RATE.—Section 458 (42 U.S.C. 658) is amended to

23 read as follows:

24 ‘‘INCENTIVE ADJUSTMENTS TO MATCHING RATE

25 ‘‘SEC. 458. (a) INCENTIVE ADJUSTMENT.—(1) IN

26 GENERAL.—In order to encourage and reward State child
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1 support enforcement programs which perform in an effec2 tive manner, the Federal matching rate for payments to

3 a State under section 455(a)(1)(A), for each fiscal year

4 beginning on or after October 1, 1998, shall be increased

5 by a factor reflecting the sum of the applicable incentive

6 adjustments (if any) determined in accordance with regu7 lations under this section with respect to Statewide pater8 nity establishment and to overall performance in child sup9 port enforcement.

10 ‘‘(2) STANDARDS.—(A) IN GENERAL.—The Sec11 retary shall specify in regulations—

12 ‘‘(i) the levels of accomplishment, and rates of

13 improvement as alternatives to such levels, which

14 States must attain to qualify for incentive adjust15 ments under this section; and

16 ‘‘(ii) the amounts of incentive adjustment that

17 shall be awarded to States achieving specified ac18 complishment or improvement levels, which amounts

19 shall be graduated, ranging up to—

20 ‘‘(I) 5 percentage points, in connection

21 with Statewide paternity establishment; and

22 ‘‘(II) 10 percentage points, in connection

23 with overall performance in child support en24 forcement.
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1 ‘‘(B) LIMITATION.—In setting performance stand2 ards pursuant to subparagraph (A)(i) and adjustment

3 amounts pursuant to subparagraph (A)(ii), the Secretary

4 shall ensure that the aggregate number of percentage

5 point increases as incentive adjustments to all States do

6 not exceed such aggregate increases as assumed by the

7 Secretary in estimates of the cost of this section as of

8 June 1995, unless the aggregate performance of all States

9 exceeds the projected aggregate performance of all States

10 in such cost estimates.

11 ‘‘(3) DETERMINATION OF INCENTIVE ADJUST12 MENT.—The Secretary shall determine the amount (if

13 any) of incentive adjustment due each State on the basis

14 of the data submitted by the State pursuant to section

15 454(15)(B) concerning the levels of accomplishment (and

16 rates of improvement) with respect to performance indica17 tors specified by the Secretary pursuant to this section.

18 ‘‘(4) FISCAL YEAR SUBJECT TO INCENTIVE ADJUST19 MENT.—The total percentage point increase determined

20 pursuant to this section with respect to a State program

21 in a fiscal year shall apply as an adjustment to the appli22 cable percent under section 455(a)(2) for payments to

23 such State for the succeeding fiscal year.

24 ‘‘(5) RECYCLING OF INCENTIVE ADJUSTMENT.—A

25 State shall expend in the State program under this part
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1 all funds paid to the State by the Federal Government

2 as a result of an incentive adjustment under this section.

3 ‘‘(b) MEANING OF TERMS.—For purposes of this sec4 tion—

5 ‘‘(1) the term ‘Statewide paternity establish6 ment percentage’ means, with respect to a fiscal

7 year, the ratio (expressed as a percentage) of—

8 ‘‘(A) the total number of out-of-wedlock

9 children in the State under one year of age for

10 whom paternity is established or acknowledged

11 during the fiscal year, to

12 ‘‘(B) the total number of children born out

13 of wedlock in the State during such fiscal year;

14 and

15 ‘‘(2) the term ‘overall performance in child sup16 port enforcement’ means a measure or measures of

17 the effectiveness of the State agency in a fiscal year

18 which takes into account factors including—

19 ‘‘(A) the percentage of cases requiring a

20 child support order in which such an order was

21 established;

22 ‘‘(B) the percentage of cases in which child

23 support is being paid;

24 ‘‘(C) the ratio of child support collected to

25 child support due; and
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1 ‘‘(D) the cost-effectiveness of the State

2 program, as determined in accordance with

3 standards established by the Secretary in regu4 lations.’’.

5 (b) ADJUSTMENT OF PAYMENTS UNDER PART D OF

6 TITLE IV.—Section 455(a)(2) (42 U.S.C. 655(a)(2)), as

7 amended by section 411(a) of this Act, is amended—

8 (1) by striking the period at the end of sub9 paragraph (C)(ii) and inserting a comma; and

10 (2) by adding after and below subparagraph

11 (C), flush with the left margin of the subsection, the

12 following:

13 ‘‘increased by the incentive adjustment factor (if any) de14 termined by the Secretary pursuant to section 458.’’.

15 (c) CONFORMING AMENDMENTS.—Section 454(22)

16 (42 U.S.C. 654(22)) is amended—

17 (1) by striking ‘‘incentive payments’’ the first

18 place it appears and inserting ‘‘incentive adjust19 ments’’; and

20 (2) by striking ‘‘any such incentive payments

21 made to the State for such period’’ and inserting

22 ‘‘any increases in Federal payments to the State re23 sulting from such incentive adjustments’’.

24 (d) CALCULATION OF IV–D PATERNITY ESTABLISH25 MENT PERCENTAGE.—(1) Section 452(g)(1) (42 U.S.C.
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1 652(g)(1)) is amended in the matter preceding subpara2 graph (A) by inserting ‘‘its overall performance in child

3 support enforcement is satisfactory (as defined in section

4 458(b) and regulations of the Secretary), and’’ after

5 ‘‘1994,’’.

6 (2) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is

7 amended—

8 (A) in subparagraph (A), in the matter preced9 ing clause (i)—

10 (i) by striking ‘‘paternity establishment

11 percentage’’ and inserting ‘‘IV–D paternity es12 tablishment percentage’’; and

13 (ii) by striking ‘‘(or all States, as the case

14 may be)’’;

15 (B) in subparagraph (A)(i), by striking ‘‘during

16 the fiscal year’’;

17 (C) in subparagraph (A)(ii)(I), by striking ‘‘as

18 of the end of the fiscal year’’ and inserting ‘‘in the

19 fiscal year or, at the option of the State, as of the

20 end of such year’’;

21 (D) in subparagraph (A)(ii)(II), by striking ‘‘or

22 (E) as of the end of the fiscal year’’ and inserting

23 ‘‘in the fiscal year or, at the option of the State, as

24 of the end of such year’’;

25 (E) in subparagraph (A)(iii)—
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1 (i) by striking ‘‘during the fiscal year’’;

2 and

3 (ii) by striking ‘‘and’’ at the end; and

4 (F) in the matter following subparagraph (A)—

5 (i) by striking ‘‘who were born out of wed6 lock during the immediately preceding fiscal

7 year’’ and inserting ‘‘born out of wedlock’’;

8 (ii) by striking ‘‘such preceding fiscal

9 year’’ both places it appears and inserting ‘‘the

10 preceding fiscal year’’; and

11 (iii) by striking ‘‘or (E)’’ the second place

12 it appears.

13 (3) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is

14 amended—

15 (A) by striking subparagraph (A) and redesig16 nating subparagraphs (B) and (C) as subparagraphs

17 (A) and (B), respectively;

18 (B) in subparagraph (A), as redesignated, by

19 striking ‘‘the percentage of children born out-of-wed20 lock in the State’’ and inserting ‘‘the percentage of

21 children in the State who are born out of wedlock

22 or for whom support has not been established’’; and

23 (C) in subparagraph (B), as redesignated—
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1 (i) by inserting ‘‘and overall performance

2 in child support enforcement’’ after ‘‘paternity

3 establishment percentages’’; and

4 (ii) by inserting ‘‘and securing support’’

5 before the period.

6 (e) REDUCTION OF PAYMENTS UNDER PART D OF

7 TITLE IV.—

8 (1) NEW REQUIREMENTS.—Section 455 (42

9 U.S.C. 655) is amended by inserting after sub10 section (b) the following:

11 ‘‘(c)(1) If the Secretary finds, with respect to a State

12 program under this part in a fiscal year beginning on or

13 after October 1, 1997—

14 ‘‘(A)(i) on the basis of data submitted by a

15 State pursuant to section 454(15)(B), that the State

16 program in such fiscal year failed to achieve the IV–

17 D paternity establishment percentage (as defined in

18 section 452(g)(2)(A)) or the appropriate level of

19 overall performance in child support enforcement (as

20 defined in section 458(b)(2)), or to meet other per21 formance measures that may be established by the

22 Secretary, or

23 ‘‘(ii) on the basis of an audit or audits of such

24 State data conducted pursuant to section

25 452(a)(4)(C), that the State data submitted pursu-
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1 ant to section 454(15)(B) is incomplete or unreli2 able; and

3 ‘‘(B) that, with respect to the succeeding fiscal

4 year—

5 ‘‘(i) the State failed to take sufficient cor6 rective action to achieve the appropriate per7 formance levels as described in subparagraph

8 (A)(i) of this paragraph, or

9 ‘‘(ii) the data submitted by the State pur10 suant to section 454(15)(B) is incomplete or

11 unreliable,

12 the amounts otherwise payable to the State under this

13 part for quarters following the end of such succeeding fis14 cal year, prior to quarters following the end of the first

15 quarter throughout which the State program is in compli16 ance with such performance requirement, shall be reduced

17 by the percentage specified in paragraph (2).

18 ‘‘(2) The reductions required under paragraph (1)

19 shall be—

20 ‘‘(A) not less than 6 nor more than 8 percent,

21 or

22 ‘‘(B) not less than 8 nor more than 12 percent,

23 if the finding is the second consecutive finding made

24 pursuant to paragraph (1), or
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1 ‘‘(C) not less than 12 nor more than 15 per2 cent, if the finding is the third or a subsequent con3 secutive such finding.

4 ‘‘(3) For purposes of this subsection, section

5 402(a)(27), and section 452(a)(4), a State which is deter6 mined as a result of an audit to have submitted incomplete

7 or unreliable data pursuant to section 454(15)(B), shall

8 be determined to have submitted adequate data if the Sec9 retary determines that the extent of the incompleteness

10 or unreliability of the data is of a technical nature which

11 does not adversely affect the determination of the level of

12 the State’s performance.’’.

13 (2) CONFORMING AMENDMENTS.—

14 (A) Section 403 (42 U.S.C. 603) is amend15 ed by striking subsection (h).

16 (B) Section 452(a)(4) (42 U.S.C.

17 652(a)(4)) is amended by striking ‘‘403(h)’’

18 each place such term appears and inserting

19 ‘‘455(c)’’.

20 (C) Subsections (d)(3)(A), (g)(1), and

21 (g)(3)(A) of section 452 (42 U.S.C. 652) are

22 each amended by striking ‘‘403(h)’’ and insert23 ing ‘‘455(c)’’.

24 (f) EFFECTIVE DATES.—
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1 (1) INCENTIVE ADJUSTMENTS.—(A) The

2 amendments made by subsections (a), (b), and (c)

3 shall become effective October 1, 1997, except to the

4 extent provided in subparagraph (B).

5 (B) Section 458 of the Social Security Act, as

6 in effect prior to the enactment of this section, shall

7 be effective for purposes of incentive payments to

8 States for fiscal years prior to fiscal year 1999.

9 (2) PENALTY REDUCTIONS.—(A) The amend10 ments made by subsection (d) shall become effective

11 with respect to calendar quarters beginning on and

12 after the date of enactment of this Act.

13 (B) The amendments made by subsection (e)

14 shall become effective with respect to calendar quar15 ters beginning on and after the date one year after

16 the date of enactment of this Act.

17 SEC. 413. FEDERAL AND STATE REVIEWS AND AUDITS.

18 (a) STATE AGENCY ACTIVITIES.—Section 454 (42

19 U.S.C. 654) is amended—

20 (1) in paragraph (14), by striking ‘‘(14)’’ and

21 inserting ‘‘(14)(A)’’;

22 (2) by redesignating paragraph (15) as sub23 paragraph (B) of paragraph (14); and

24 (3) by inserting after paragraph (14) the fol25 lowing new paragraph:
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1 ‘‘(15) provide for—

2 ‘‘(A) a process for annual reviews of and

3 reports to the Secretary on the State program

4 under this part, which shall include such infor5 mation as may be necessary to measure State

6 compliance with Federal requirements for expe7 dited procedures and timely case processing,

8 using such standards and procedures as are re9 quired by the Secretary, under which the State

10 agency will determine the extent to which such

11 program is in conformity with applicable re12 quirements with respect to the operation of

13 State programs under this part (including the

14 status of complaints filed under the procedure

15 required under paragraph (12)(B)); and

16 ‘‘(B) a process of extracting from the

17 State automated data processing system and

18 transmitting to the Secretary data and calcula19 tions concerning the levels of accomplishment

20 (and rates of improvement) with respect to ap21 plicable performance indicators (including IV–D

22 paternity establishment percentages and overall

23 performance in child support enforcement) to

24 the extent necessary for purposes of sections

25 452(g) and 458.’’.
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1 (b) FEDERAL ACTIVITIES.—Section 452(a)(4) (42

2 U.S.C. 652(a)(4)) is amended to read as follows:

3 ‘‘(4)(A) review data and calculations transmit4 ted by State agencies pursuant to section

5 454(15)(B) on State program accomplishments with

6 respect to performance indicators for purposes of

7 section 452(g) and 458, and determine the amount

8 (if any) of penalty reductions pursuant to section

9 455(c) to be applied to the State;

10 ‘‘(B) review annual reports by State agencies

11 pursuant to section 454(15)(A) on State program

12 conformity with Federal requirements; evaluate any

13 elements of a State program in which significant de14 ficiencies are indicated by such report on the status

15 of complaints under the State procedure under sec16 tion 454(12)(B); and, as appropriate, provide to the

17 State agency comments, recommendations for addi18 tional or alternative corrective actions, and technical

19 assistance; and

20 ‘‘(C) conduct audits, in accordance with the

21 government auditing standards of the United States

22 Comptroller General—

23 ‘‘(i) at least once every 3 years (or more

24 frequently, in the case of a State which fails to

25 meet requirements of this part, or of regula-
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1 tions implementing such requirements, concern2 ing performance standards and reliability of

3 program data) to assess the completeness, reli4 ability, and security of the data, and the accu5 racy of the reporting systems, used for the cal6 culations of performance indicators specified in

7 subsection (g) and section 458;

8 ‘‘(ii) of the adequacy of financial manage9 ment of the State program, including assess10 ments of—

11 ‘‘(I) whether Federal and other funds

12 made available to carry out the State pro13 gram under this part are being appro14 priately expended, and are properly and

15 fully accounted for; and

16 ‘‘(II) whether collections and disburse17 ments of support payments and program

18 income are carried out correctly and are

19 properly and fully accounted for; and

20 ‘‘(iii) for such other purposes as the Sec21 retary may find necessary;’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall be effective with respect to calendar

24 quarters beginning on or after the date one year after en25 actment of this section.
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1 SEC. 414. REQUIRED REPORTING PROCEDURES.

2 (a) ESTABLISHMENT.—Section 452(a)(5) (42 U.S.C.

3 652(a)(5)) is amended by inserting ‘‘, and establish proce4 dures to be followed by States for collecting and reporting

5 information required to be provided under this part, and

6 establish uniform definitions (including those necessary to

7 enable the measurement of State compliance with the re8 quirements of this part relating to expedited processes and

9 timely case processing) to be applied in following such pro10 cedures’’ before the semicolon.

11 (b) STATE PLAN REQUIREMENT.—Section 454 (42

12 U.S.C. 654), as amended by section 404(a) of this Act,

13 is amended—

14 (1) by striking ‘‘and’’ at the end of paragraph

15 (24);

16 (2) by striking the period at the end of para17 graph (25) and inserting ‘‘; and’’; and

18 (3) by adding after paragraph (25) the follow19 ing:

20 ‘‘(26) provide that the State shall use the defi21 nitions established under section 452(a)(5) in col22 lecting and reporting information as required under

23 this part.’’.

24 SEC. 415. AUTOMATED DATA PROCESSING REQUIREMENTS.

25 (a) REVISED REQUIREMENTS.—(1) Section 454(16)

26 (42 U.S.C. 654(16)) is amended—
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1 (A) by striking ‘‘, at the option of the State,’’;

2 (B) by inserting ‘‘and operation by the State

3 agency’’ after ‘‘for the establishment’’;

4 (C) by inserting ‘‘meeting the requirements of

5 section 454A’’ after ‘‘information retrieval system’’;

6 (D) by striking ‘‘in the State and localities

7 thereof, so as (A)’’ and inserting ‘‘so as’’;

8 (E) by striking ‘‘(i)’’; and

9 (F) by striking ‘‘(including’’ and all that follows

10 and inserting a semicolon.

11 (2) Part D of title IV (42 U.S.C. 651–669) is amend12 ed by inserting after section 454 the following new section:

13 ‘‘AUTOMATED DATA PROCESSING

14 ‘‘SEC. 454A. (a) IN GENERAL.—In order to meet the

15 requirements of this section, for purposes of the require16 ment of section 454(16), a State agency shall have in op17 eration a single statewide automated data processing and

18 information retrieval system which has the capability to

19 perform the tasks specified in this section, and performs

20 such tasks with the frequency and in the manner specified

21 in this part or in regulations or guidelines of the Sec22 retary.

23 ‘‘(b) PROGRAM MANAGEMENT.—The automated sys24 tem required under this section shall perform such func25 tions as the Secretary may specify relating to management

26 of the program under this part, including—
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1 ‘‘(1) controlling and accounting for use of Fed2 eral, State, and local funds to carry out such pro3 gram; and

4 ‘‘(2) maintaining the data necessary to meet

5 Federal reporting requirements on a timely basis.

6 ‘‘(c) CALCULATION OF PERFORMANCE INDICA7 TORS.—In order to enable the Secretary to determine the

8 incentive and penalty adjustments required by sections

9 452(g) and 458, the State agency shall—

10 ‘‘(1) use the automated system—

11 ‘‘(A) to maintain the requisite data on

12 State performance with respect to paternity es13 tablishment and child support enforcement in

14 the State; and

15 ‘‘(B) to calculate the IV–D paternity es16 tablishment percentage and overall performance

17 in child support enforcement for the State for

18 each fiscal year; and

19 ‘‘(2) have in place systems controls to ensure

20 the completeness, and reliability of, and ready access

21 to, the data described in paragraph (1)(A), and the

22 accuracy of the calculations described in paragraph

23 (1)(B).

24 ‘‘(d) INFORMATION INTEGRITY AND SECURITY.—The

25 State agency shall have in effect safeguards on the integ-
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1 rity, accuracy, and completeness of, access to, and use of

2 data in the automated system required under this section,

3 which shall include the following (in addition to such other

4 safeguards as the Secretary specifies in regulations):

5 ‘‘(1) POLICIES RESTRICTING ACCESS.—Written

6 policies concerning access to data by State agency

7 personnel, and sharing of data with other persons,

8 which—

9 ‘‘(A) permit access to and use of data only

10 to the extent necessary to carry out program re11 sponsibilities;

12 ‘‘(B) specify the data which may be used

13 for particular program purposes, and the per14 sonnel permitted access to such data; and

15 ‘‘(C) ensure that data obtained or disclosed

16 for a limited program purpose is not used or

17 redisclosed for another, impermissible purpose.

18 ‘‘(2) SYSTEMS CONTROLS.—Systems controls

19 (such as passwords or blocking of fields) to ensure

20 strict adherence to the policies specified under para21 graph (1).

22 ‘‘(3) MONITORING OF ACCESS.—Routine mon23 itoring of access to and use of the automated sys24 tem, through methods such as audit trails and feed-
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1 back mechanisms, to guard against and promptly

2 identify unauthorized access or use.

3 ‘‘(4) TRAINING AND INFORMATION.—The State

4 agency shall have in effect procedures to ensure that

5 all personnel (including State and local agency staff

6 and contractors) who may have access to or be re7 quired to use sensitive or confidential program data

8 are fully informed of applicable requirements and

9 penalties, and are adequately trained in security pro10 cedures.

11 ‘‘(5) PENALTIES.—The State agency shall have

12 in effect administrative penalties (up to and includ13 ing dismissal from employment) for unauthorized ac14 cess to, or disclosure or use of, confidential data.’’.

15 (3) REGULATIONS.—Section 452 (42 U.S.C. 652) is

16 amended by adding at the end the following:

17 ‘‘(j) The Secretary shall prescribe final regulations

18 for implementation of the requirements of section 454A

19 not later than 2 years after the date of the enactment of

20 this subsection.’’.

21 (4) IMPLEMENTATION TIMETABLE.—Section

22 454(24) (42 U.S.C. 654(24)), as amended by sections

23 404(a)(2) and 414(b)(1) of this Act, is amended to read

24 as follows:
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1 ‘‘(24) provide that the State will have in effect

2 an automated data processing and information re3 trieval system—

4 ‘‘(A) by October 1, 1995, meeting all re5 quirements of this part which were enacted on

6 or before the date of enactment of the Family

7 Support Act of 1988; and

8 ‘‘(B) by October 1, 1999, meeting all re9 quirements of this part enacted on or before the

10 date of enactment of the Individual Responsibil11 ity Act of 1995 (but this provision shall not be

12 construed to alter earlier deadlines specified for

13 elements of such system), except that such

14 deadline shall be extended by 1 day for each

15 day (if any) by which the Secretary fails to

16 meet the deadline imposed by section 452(j);’’.

17 (b) SPECIAL FEDERAL MATCHING RATE FOR DE18 VELOPMENT COSTS OF AUTOMATED SYSTEMS.—Section

19 455(a) (42 U.S.C. 655(a)) is amended—

20 (1) in paragraph (1)(B)—

21 (A) by striking ‘‘90 percent’’ and inserting

22 ‘‘the percent specified in paragraph (3)’’;

23 (B) by striking ‘‘so much of’’; and

24 (C) by striking ‘‘which the Secretary’’ and

25 all that follows and inserting ‘‘, and’’; and
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1 (2) by adding at the end the following new

2 paragraph:

3 ‘‘(3)(A) The Secretary shall pay to each State, for

4 each quarter in fiscal year 1996, 90 percent of so much

5 of State expenditures described in subparagraph (1)(B) as

6 the Secretary finds are for a system meeting the require7 ments specified in section 454(16), or meeting such re8 quirements without regard to clause (D) thereof.

9 ‘‘(B)(i) The Secretary shall pay to each State, for

10 each quarter in fiscal years 1997 through 2001, the per11 centage specified in clause (ii) of so much of State expend12 itures described in subparagraph (1)(B) as the Secretary

13 finds are for a system meeting the requirements specified

14 in section 454(16) and 454A, subject to clause (iii).

15 ‘‘(ii) The percentage specified in this clause, for pur16 poses of clause (i), is the higher of—

17 ‘‘(I) 80 percent, or

18 ‘‘(II) the percentage otherwise applicable to

19 Federal payments to the State under subparagraph

20 (A) (as adjusted pursuant to section 458).’’.

21 (c) CONFORMING AMENDMENT.—Section 123(c) of

22 the Family Support Act of 1988 (102 Stat. 2352; Public

23 Law 100–485) is repealed.

24 (d) ADDITIONAL PROVISIONS.—For additional provi25 sions of section 454A, as added by subsection (a) of this
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1 section, see the amendments made by sections 421,

2 422(c), and 433(d) of this Act.

3 SEC. 416. DIRECTOR OF CSE PROGRAM; STAFFING STUDY.

4 (a) REPORTING TO SECRETARY.—Section 452(a) (42

5 U.S.C. 652(a)) is amended in the matter preceding para6 graph (1) by striking ‘‘directly’’.

7 (b) STAFFING STUDIES.—

8 (1) SCOPE.—The Secretary of Health and

9 Human Services shall, directly or by contract, con10 duct studies of the staffing of each State child sup11 port enforcement program under part D of title IV

12 of the Social Security Act. Such studies shall include

13 a review of the staffing needs created by require14 ments for automated data processing, maintenance

15 of a central case registry and centralized collections

16 of child support, and of changes in these needs re17 sulting from changes in such requirements. Such

18 studies shall examine and report on effective staffing

19 practices used by the States and on recommended

20 staffing procedures.

21 (2) FREQUENCY OF STUDIES.—The Secretary

22 shall complete the first staffing study required under

23 paragraph (1) by October 1, 1997, and may conduct

24 additional studies subsequently at appropriate inter25 vals.
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1 (3) REPORT TO THE CONGRESS.—The Sec2 retary shall submit a report to the Congress stating

3 the findings and conclusions of each study conducted

4 under this subsection.

5 SEC. 417. FUNDING FOR SECRETARIAL ASSISTANCE TO

6 STATE PROGRAMS.

7 Section 452 (42 U.S.C. 652), as amended by section

8 415(a)(3) of this Act, is amended by adding at the end

9 the following new subsection:

10 ‘‘(k) FUNDING FOR FEDERAL ACTIVITIES ASSISTING

11 STATE PROGRAMS.—(1) There shall be available to the

12 Secretary, from amounts appropriated for fiscal year 1996

13 and each succeeding fiscal year for payments to States

14 under this part, the amount specified in paragraph (2) for

15 the costs to the Secretary for—

16 ‘‘(A) information dissemination and technical

17 assistance to States, training of State and Federal

18 staff, staffing studies, and related activities needed

19 to improve programs (including technical assistance

20 concerning State automated systems);

21 ‘‘(B) research, demonstration, and special

22 projects of regional or national significance relating

23 to the operation of State programs under this part;

24 and
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1 ‘‘(C) operation of the Federal Parent Locator

2 Service under section 453, to the extent such costs

3 are not recovered through user fees.

4 ‘‘(2) The amount specified in this paragraph for a

5 fiscal year is the amount equal to a percentage of the re6 duction in Federal payments to States under part A on

7 account of child support (including arrearages) collected

8 in the preceding fiscal year on behalf of children receiving

9 aid under such part A in such preceding fiscal year (as

10 determined on the basis of the most recent reliable data

11 available to the Secretary as of the end of the third cal12 endar quarter following the end of such preceding fiscal

13 year), equal to—

14 ‘‘(A) 1 percent, for the activities specified in

15 subparagraphs (A) and (B) of paragraph (1); and

16 ‘‘(B) 2 percent, for the activities specified in

17 subparagraph (C) of paragraph (1).’’.

18 SEC. 418. REPORTS AND DATA COLLECTION BY THE SEC19 RETARY.

20 (a) ANNUAL REPORT TO CONGRESS.—(1) Section

21 452(a)(10)(A) (42 U.S.C. 652(a)(10)(A)) is amended—

22 (A) by striking ‘‘this part;’’ and inserting ‘‘this

23 part, including—’’; and

24 (B) by adding at the end the following indented

25 clauses:
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1 ‘‘(i) the total amount of child support

2 payments collected as a result of services

3 furnished during such fiscal year to indi4 viduals receiving services under this part;

5 ‘‘(ii) the cost to the States and to the

6 Federal Government of furnishing such

7 services to those individuals; and

8 ‘‘(iii) the number of cases involving

9 families—

10 ‘‘(I) who became ineligible for aid

11 under part A during a month in such

12 fiscal year; and

13 ‘‘(II) with respect to whom a

14 child support payment was received in

15 the same month;’’.

16 (2) Section 452(a)(10)(C) (42 U.S.C. 652(a)(10)(C))

17 is amended—

18 (A) in the matter preceding clause (i)—

19 (i) by striking ‘‘with the data required

20 under each clause being separately stated for

21 cases’’ and inserting ‘‘separately stated for (1)

22 cases’’;

23 (ii) by striking ‘‘cases where the child was

24 formerly receiving’’ and inserting ‘‘or formerly

25 received’’;
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1 (iii) by inserting ‘‘or 1912’’ after

2 ‘‘471(a)(17)’’; and

3 (iv) by inserting ‘‘(2)’’ before ‘‘all other’’;

4 (B) in each of clauses (i) and (ii), by striking

5 ‘‘, and the total amount of such obligations’’;

6 (C) in clause (iii), by striking ‘‘described in’’

7 and all that follows and inserting ‘‘in which support

8 was collected during the fiscal year;’’;

9 (D) by striking clause (iv); and

10 (E) by redesignating clause (v) as clause (vii),

11 and inserting after clause (iii) the following new

12 clauses:

13 ‘‘(iv) the total amount of support col14 lected during such fiscal year and distrib15 uted as current support;

16 ‘‘(v) the total amount of support col17 lected during such fiscal year and distrib18 uted as arrearages;

19 ‘‘(vi) the total amount of support due

20 and unpaid for all fiscal years; and’’.

21 (3) Section 452(a)(10)(G) (42 U.S.C. 652(a)(10)(G))

22 is amended by striking ‘‘on the use of Federal courts

23 and’’.

24 (4) Section 452(a)(10) (42 U.S.C. 652(a)(10)) is

25 amended by striking all that follows subparagraph (I).
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1 (b) DATA COLLECTION AND REPORTING.—Section

2 469 (42 U.S.C. 669) is amended—

3 (1) by striking subsections (a) and (b) and in4 serting the following:

5 ‘‘(a) The Secretary shall collect and maintain, on a

6 fiscal year basis, up-to-date statistics, by State, with re7 spect to services to establish paternity and services to es8 tablish child support obligations, the data specified in sub9 section (b), separately stated, in the case of each such

10 service, with respect to—

11 ‘‘(1) families (or dependent children) receiving

12 aid under plans approved under part A (or E); and

13 ‘‘(2) families not receiving such aid.

14 ‘‘(b) The data referred to in subsection (a) are—

15 ‘‘(1) the number of cases in the caseload of the

16 State agency administering the plan under this part

17 in which such service is needed; and

18 ‘‘(2) the number of such cases in which the

19 service has been provided.’’; and

20 (2) in subsection (c), by striking ‘‘(a)(2)’’ and

21 inserting ‘‘(b)(2)’’.

22 (c) EFFECTIVE DATE.—The amendments made by

23 this section shall be effective with respect to fiscal year

24 1996 and succeeding fiscal years.
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1 Subtitle C—Locate and Case

2 Tracking

3 SEC. 421. CENTRAL STATE AND CASE REGISTRY.

4 Section 454A, as added by section 415(a)(2) of this

5 Act, is amended by adding at the end the following:

6 ‘‘(e) CENTRAL CASE REGISTRY.—(1) IN GEN7 ERAL.—The automated system required under this section

8 shall perform the functions, in accordance with the provi9 sions of this subsection, of a single central registry con10 taining records with respect to each case in which services

11 are being provided by the State agency (including, on and

12 after October 1, 1998, each order specified in section

13 466(a)(12)), using such standardized data elements (such

14 as names, social security numbers or other uniform identi15 fication numbers, dates of birth, and case identification

16 numbers), and containing such other information (such as

17 information on case status) as the Secretary may require.

18 ‘‘(2) PAYMENT RECORDS.—Each case record in the

19 central registry shall include a record of—

20 ‘‘(A) the amount of monthly (or other periodic)

21 support owed under the support order, and other

22 amounts due or overdue (including arrears, interest

23 or late payment penalties, and fees);
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1 ‘‘(B) the date on which or circumstances under

2 which the support obligation will terminate under

3 such order;

4 ‘‘(C) all child support and related amounts col5 lected (including such amounts as fees, late payment

6 penalties, and interest on arrearages);

7 ‘‘(D) the distribution of such amounts collected;

8 and

9 ‘‘(E) the birth date of the child for whom the

10 child support order is entered.

11 ‘‘(3) UPDATING AND MONITORING.—The State agen12 cy shall promptly establish and maintain, and regularly

13 monitor, case records in the registry required by this sub14 section, on the basis of—

15 ‘‘(A) information on administrative actions and

16 administrative and judicial proceedings and orders

17 relating to paternity and support;

18 ‘‘(B) information obtained from matches with

19 Federal, State, or local data sources;

20 ‘‘(C) information on support collections and dis21 tributions; and

22 ‘‘(D) any other relevant information.

23 ‘‘(f) DATA MATCHES AND OTHER DISCLOSURES OF

24 INFORMATION.—The automated system required under

25 this section shall have the capacity, and be used by the
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1 State agency, to extract data at such times, and in such

2 standardized format or formats, as may be required by

3 the Secretary, and to share and match data with, and re4 ceive data from, other data bases and data matching serv5 ices, in order to obtain (or provide) information necessary

6 to enable the State agency (or Secretary or other State

7 or Federal agencies) to carry out responsibilities under

8 this part. Data matching activities of the State agency

9 shall include at least the following:

10 ‘‘(1) DATA BANK OF CHILD SUPPORT OR11 DERS.—Furnish to the Data Bank of Child Support

12 Orders established under section 453(h) (and update

13 as necessary, with information including notice of

14 expiration of orders) minimal information (to be

15 specified by the Secretary) on each child support

16 case in the central case registry.

17 ‘‘(2) FEDERAL PARENT LOCATOR SERVICE.—

18 Exchange data with the Federal Parent Locator

19 Service for the purposes specified in section 453.

20 ‘‘(3) AFDC AND MEDICAID AGENCIES.—Ex21 change data with State agencies (of the State and

22 of other States) administering the programs under

23 part A and title XIX, as necessary for the perform24 ance of State agency responsibilities under this part

25 and under such programs.
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1 ‘‘(4) INTRA- AND INTERSTATE DATA

2 MATCHES.—Exchange data with other agencies of

3 the State, agencies of other States, and interstate

4 information networks, as necessary and appropriate

5 to carry out (or assist other States to carry out) the

6 purposes of this part.’’.

7 SEC. 422. CENTRALIZED COLLECTION AND DISBURSEMENT

8 OF SUPPORT PAYMENTS.

9 (a) STATE PLAN REQUIREMENT.—Section 454 (42

10 U.S.C. 654), as amended by sections 404(a) and 414(b)

11 of this Act, is amended—

12 (1) by striking ‘‘and’’ at the end of paragraph

13 (25);

14 (2) by striking the period at the end of para15 graph (26) and inserting ‘‘; and’’; and

16 (3) by adding after paragraph (26) the follow17 ing new paragraph:

18 ‘‘(27) provide that the State agency, on and

19 after October 1, 1998—

20 ‘‘(A) will operate a centralized, automated

21 unit for the collection and disbursement of child

22 support under orders being enforced under this

23 part, in accordance with section 454B; and

24 ‘‘(B) will have sufficient State staff (con25 sisting of State employees), and (at State op-
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1 tion) contractors reporting directly to the State

2 agency to monitor and enforce support collec3 tions through such centralized unit, including

4 carrying out the automated data processing re5 sponsibilities specified in section 454A(g) and

6 to impose, as appropriate in particular cases,

7 the administrative enforcement remedies speci8 fied in section 466(c)(1).’’.

9 (b) ESTABLISHMENT OF CENTRALIZED COLLECTION

10 UNIT.—Part D of title IV (42 U.S.C. 651–669) is amend11 ed by adding after section 454A the following new section:

12 ‘‘CENTRALIZED COLLECTION AND DISBURSEMENT OF

13 SUPPORT PAYMENTS

14 ‘‘SEC. 454B. (a) IN GENERAL.—In order to meet the

15 requirement of section 454(27), the State agency must op16 erate a single centralized, automated unit for the collection

17 and disbursement of support payments, coordinated with

18 the automated data system required under section 454A,

19 in accordance with the provisions of this section, which

20 shall be—

21 ‘‘(1) operated directly by the State agency (or

22 by two or more State agencies under a regional co23 operative agreement), or by a single contractor re24 sponsible directly to the State agency; and

25 ‘‘(2) used for the collection and disbursement

26 (including interstate collection and disbursement) of
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1 payments under support orders in all cases being en2 forced by the State pursuant to section 454(4).

3 ‘‘(b) REQUIRED PROCEDURES.—The centralized col4 lections unit shall use automated procedures, electronic

5 processes, and computer-driven technology to the maxi6 mum extent feasible, efficient, and economical, for the col7 lection and disbursement of support payments, including

8 procedures—

9 ‘‘(1) for receipt of payments from parents, em10 ployers, and other States, and for disbursements to

11 custodial parents and other obligees, the State agen12 cy, and the State agencies of other States;

13 ‘‘(2) for accurate identification of payments;

14 ‘‘(3) to ensure prompt disbursement of the cus15 todial parent’s share of any payment; and

16 ‘‘(4) to furnish to either parent, upon request,

17 timely information on the current status of support

18 payments.’’.

19 (c) USE OF AUTOMATED SYSTEM.—Section 454A, as

20 added by section 415(a)(2) of this Act and as amended

21 by section 421 of this Act, is amended by adding at the

22 end the following new subsection:

23 ‘‘(g) CENTRALIZED COLLECTION AND DISTRIBUTION

24 OF SUPPORT PAYMENTS.—The automated system re25 quired under this section shall be used, to the maximum
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1 extent feasible, to assist and facilitate collections and dis2 bursement of support payments through the centralized

3 collections unit operated pursuant to section 454B,

4 through the performance of functions including at a mini5 mum—

6 ‘‘(1) generation of orders and notices to em7 ployers (and other debtors) for the withholding of

8 wages (and other income)—

9 ‘‘(A) within two working days after receipt

10 (from the directory of New Hires established

11 under section 453(i) or any other source) of no12 tice of and the income source subject to such

13 withholding; and

14 ‘‘(B) using uniform formats directed by

15 the Secretary;

16 ‘‘(2) ongoing monitoring to promptly identify

17 failures to make timely payment; and

18 ‘‘(3) automatic use of enforcement mechanisms

19 (including mechanisms authorized pursuant to sec20 tion 466(c)) where payments are not timely made.’’.

21 (d) EFFECTIVE DATE.—The amendments made by

22 this section shall become effective on October 1, 1998.
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1 SEC. 423. AMENDMENTS CONCERNING INCOME WITHHOLD2 ING.

3 (a) MANDATORY INCOME WITHHOLDING.—(1) Sec4 tion 466(a)(1) (42 U.S.C. 666(a)(1)) is amended to read

5 as follows:

6 ‘‘(1) INCOME WITHHOLDING.—(A) UNDER OR7 DERS ENFORCED UNDER THE STATE PLAN.—Proce8 dures described in subsection (b) for the withholding

9 from income of amounts payable as support in cases

10 subject to enforcement under the State plan.

11 ‘‘(B) UNDER CERTAIN ORDERS PREDATING

12 CHANGE IN REQUIREMENT.—Procedures under

13 which all child support orders issued (or modified)

14 before October 1, 1996, and which are not otherwise

15 subject to withholding under subsection (b), shall be16 come subject to withholding from wages as provided

17 in subsection (b) if arrearages occur, without the

18 need for a judicial or administrative hearing.’’.

19 (2) Section 466(a)(8) (42 U.S.C. 666(a)(8)) is re20 pealed.

21 (3) Section 466(b) (42 U.S.C. 666(b)) is amended—

22 (A) in the matter preceding paragraph (1), by

23 striking ‘‘subsection (a)(1)’’ and inserting ‘‘sub24 section (a)(1)(A)’’;

25 (B) in paragraph (5), by striking all that fol26 lows ‘‘administered by’’ and inserting ‘‘the State
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1 through the centralized collections unit established

2 pursuant to section 454B, in accordance with the re3 quirements of such section 454B.’’;

4 (C) in paragraph (6)(A)(i)—

5 (i) by inserting ‘‘, in accordance with time6 tables established by the Secretary,’’ after

7 ‘‘must be required’’; and

8 (ii) by striking ‘‘to the appropriate agency’’

9 and all that follows and inserting ‘‘to the State

10 centralized collections unit within 5 working

11 days after the date such amount would (but for

12 this subsection) have been paid or credited to

13 the employee, for distribution in accordance

14 with this part.’’;

15 (D) in paragraph (6)(A)(ii), by inserting ‘‘be in

16 a standard format prescribed by the Secretary, and’’

17 after ‘‘shall’’; and

18 (E) in paragraph (6)(D)—

19 (i) by striking ‘‘employer who discharges’’

20 and inserting ‘‘employer who—(A) discharges’’;

21 (ii) by relocating subparagraph (A), as des22 ignated, as an indented subparagraph after and

23 below the introductory matter;

24 (iii) by striking the period at the end; and
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1 (iv) by adding after and below subpara2 graph (A) the following new subparagraph:

3 ‘‘(B) fails to withhold support from wages,

4 or to pay such amounts to the State centralized

5 collections unit in accordance with this sub6 section.’’.

7 (b) CONFORMING AMENDMENT.—Section 466(c) (42

8 U.S.C. 666(c)) is repealed.

9 (c) DEFINITION OF TERMS.—The Secretary shall

10 promulgate regulations providing definitions, for purposes

11 of part D of title IV of the Social Security Act, for the

12 term ‘‘income’’ and for such other terms relating to in13 come withholding under section 466(b) of such Act as the

14 Secretary may find it necessary or advisable to define.

15 SEC. 424. LOCATOR INFORMATION FROM INTERSTATE NET16 WORKS.

17 Section 466(a) (42 U.S.C. 666(a)), as amended by

18 section 423(a)(2) of this Act, is amended by inserting

19 after paragraph (7) the following:

20 ‘‘(8) LOCATOR INFORMATION FROM INTER21 STATE NETWORKS.—Procedures ensuring that the

22 State will neither provide funding for, nor use for

23 any purpose (including any purpose unrelated to the

24 purposes of this part), any automated interstate net25 work or system used to locate individuals—
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1 ‘‘(A) for purposes relating to the use of

2 motor vehicles; or

3 ‘‘(B) providing information for law en4 forcement purposes (where child support en5 forcement agencies are otherwise allowed access

6 by State and Federal law),

7 unless all Federal and State agencies administering

8 programs under this part (including the entities es9 tablished under section 453) have access to informa10 tion in such system or network to the same extent

11 as any other user of such system or network.’’.

12 SEC. 425. EXPANDED FEDERAL PARENT LOCATOR SERVICE.

13 (a) EXPANDED AUTHORITY TO LOCATE INDIVIDUALS

14 AND ASSETS.—Section 453 (42 U.S.C. 653) is amended—

15 (1) in subsection (a), by striking all that follows

16 ‘‘subsection (c))’’ and inserting the following:

17 ‘‘, for the purpose of establishing parentage, establishing,

18 setting the amount of, modifying, or enforcing child sup19 port obligations—

20 ‘‘(1) information on, or facilitating the discov21 ery of, the location of any individual—

22 ‘‘(A) who is under an obligation to pay

23 child support;

24 ‘‘(B) against whom such an obligation is

25 sought; or
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1 ‘‘(C) to whom such an obligation is owed,

2 including such individual’s social security num3 ber (or numbers), most recent residential ad4 dress, and the name, address, and employer

5 identification number of such individual’s em6 ployer; and

7 ‘‘(2) information on the individual’s wages (or

8 other income) from, and benefits of, employment (in9 cluding rights to or enrollment in group health care

10 coverage); and

11 ‘‘(3) information on the type, status, location,

12 and amount of any assets of, or debts owed by or

13 to, any such individual.’’; and

14 (2) in subsection (b)—

15 (A) in the matter preceding paragraph (1),

16 by striking ‘‘social security’’ and all that follows

17 through ‘‘absent parent’’ and inserting ‘‘infor18 mation specified in subsection (a)’’; and

19 (B) in paragraph (2), by inserting before

20 the period ‘‘, or from any consumer reporting

21 agency (as defined in section 603(f) of the Fair

22 Credit Reporting Act (15 U.S.C. 1681a(f))’’;

23 (3) in subsection (e)(1), by inserting before the

24 period ‘‘, or by consumer reporting agencies’’.
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1 (b) REIMBURSEMENT FOR DATA FROM FEDERAL

2 AGENCIES.—Section 453(e)(2) (42 U.S.C. 653(e)(2)) is

3 amended in the fourth sentence by inserting before the

4 period ‘‘in an amount which the Secretary determines to

5 be reasonable payment for the data exchange (which

6 amount shall not include payment for the costs of obtain7 ing, compiling, or maintaining the data)’’.

8 (c) ACCESS TO CONSUMER REPORTS UNDER FAIR

9 CREDIT REPORTING ACT.—(1) Section 608 of the Fair

10 Credit Reporting Act (15 U.S.C. 1681f) is amended—

11 (A) by striking ‘‘, limited to’’ and inserting ‘‘to

12 a governmental agency (including the entire

13 consumer report, in the case of a Federal, State, or

14 local agency administering a program under part D

15 of title IV of the Social Security Act, and limited

16 to’’; and

17 (B) by striking ‘‘employment, to a govern18 mental agency’’ and inserting ‘‘employment, in the

19 case of any other governmental agency)’’.

20 (2) REIMBURSEMENT FOR REPORTS BY STATE

21 AGENCIES AND CREDIT BUREAUS.—Section 453 (42

22 U.S.C. 653) is amended by adding at the end the following

23 new subsection:

24 ‘‘(g) The Secretary is authorized to reimburse costs

25 to State agencies and consumer credit reporting agencies
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1 the costs incurred by such entities in furnishing informa2 tion requested by the Secretary pursuant to this section

3 in an amount which the Secretary determines to be rea4 sonable payment for the data exchange (which amount

5 shall not include payment for the costs of obtaining, com6 piling, or maintaining the data).’’.

7 (d) DISCLOSURE OF TAX RETURN INFORMATION.—

8 (1) Section 6103(1)(6)(A)(ii) of the Internal Revenue

9 Code of 1986 is amended by striking ‘‘, but only if’’ and

10 all that follows and inserting a period.

11 (2) Section 6103(1)(8)(A) of the Internal Revenue

12 Code of 1986 is amended by inserting ‘‘Federal,’’ before

13 ‘‘State or local’’.

14 (e) TECHNICAL AMENDMENTS.—

15 (1) Sections 452(a)(9), 453(a), 453(b), 463(a),

16 and 463(e) (42 U.S.C. 652(a)(9), 653(a), 653(b),

17 663(a), and 663(e)) are each amended by inserting

18 ‘‘Federal’’ before ‘‘Parent’’ each place it appears.

19 (2) Section 453 (42 U.S.C. 653) is amended in

20 the heading by adding ‘‘FEDERAL’’ before ‘‘PAR21 ENT’’.

22 (f) NEW COMPONENTS.—Section 453 (42 U.S.C.

23 653), as amended by subsection (c)(2) of this section, is

24 amended by adding at the end the following:

25 ‘‘(h) DATA BANK OF CHILD SUPPORT ORDERS.—
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1 ‘‘(1) IN GENERAL.—Not later than October 1,

2 1998, in order to assist States in administering their

3 State plans under this part and parts A, F, and G,

4 and for the other purposes specified in this section,

5 the Secretary shall establish and maintain in the

6 Federal Parent Locator Service an automated reg7 istry to be known as the Data Bank of Child Sup8 port Orders, which shall contain abstracts of child

9 support orders and other information described in

10 paragraph (2) on each case in each State central

11 case registry maintained pursuant to section

12 454A(e), as furnished (and regularly updated), pur13 suant to section 454A(f), by State agencies admin14 istering programs under this part.

15 ‘‘(2) CASE INFORMATION.—The information re16 ferred to in paragraph (1), as specified by the Sec17 retary, shall include sufficient information (including

18 names, social security numbers or other uniform

19 identification numbers, and State case identification

20 numbers) to identify the individuals who owe or are

21 owed support (or with respect to or on behalf of

22 whom support obligations are sought to be estab23 lished), and the State or States which have estab24 lished or modified, or are enforcing or seeking to es25 tablish, such an order.
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1 ‘‘(i) DIRECTORY OF NEW HIRES.—

2 ‘‘(1) IN GENERAL.—Not later than October 1,

3 1998, In order to assist States in administering

4 their State plans under this part and parts A, F,

5 and G, and for the other purposes specified in this

6 section, the Secretary shall establish and maintain in

7 the Federal Parent Locator Service an automated

8 directory to be known as the directory of New Hires,

9 containing—

10 ‘‘(A) information supplied by employers on

11 each newly hired individual, in accordance with

12 paragraph (2); and

13 ‘‘(B) information supplied by State agen14 cies administering State unemployment com15 pensation laws, in accordance with paragraph

16 (3).

17 ‘‘(2) EMPLOYER INFORMATION.—

18 ‘‘(A) INFORMATION REQUIRED.—Subject

19 to subparagraph (D), each employer shall fur20 nish to the Secretary, for inclusion in the direc21 tory established under this subsection, not later

22 than 10 days after the date (on or after Octo23 ber 1, 1998) on which the employer hires a new

24 employee (as defined in subparagraph (C)), a

25 report containing the name, date of birth, and
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1 social security number of such employee, and

2 the employer identification number of the em3 ployer.

4 ‘‘(B) REPORTING METHOD AND FOR5 MAT.—The Secretary shall provide for trans6 mission of the reports required under subpara7 graph (A) using formats and methods which

8 minimize the burden on employers, which shall

9 include—

10 ‘‘(i) automated or electronic trans11 mission of such reports;

12 ‘‘(ii) transmission by regular mail;

13 and

14 ‘‘(iii) transmission of a copy of the

15 form required for purposes of compliance

16 with section 3402 of the Internal Revenue

17 Code of 1986.

18 ‘‘(C) EMPLOYEE DEFINED.—For purposes

19 of this paragraph, the term ‘employee’ means

20 any individual subject to the requirement of

21 section 3402(f)(2) of the Internal Revenue Code

22 of 1986.

23 ‘‘(D) PAPERWORK REDUCTION REQUIRE24 MENT.—As required by the information re25 sources management policies published by the
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1 Director of the Office of Management and

2 Budget pursuant to section 3504(b)(1) of title

3 44, United States Code, the Secretary, in order

4 to minimize the cost and reporting burden on

5 employers, shall not require reporting pursuant

6 to this paragraph if an alternative reporting

7 mechanism can be developed that either relies

8 on existing Federal or State reporting or en9 ables the Secretary to collect the needed infor10 mation in a more cost-effective and equally ex11 peditious manner, taking into account the re12 porting costs on employers.

13 ‘‘(E) CIVIL MONEY PENALTY ON NON14 COMPLYING EMPLOYERS.—(i) Any employer

15 that fails to make a timely report in accordance

16 with this paragraph with respect to an individ17 ual shall be subject to a civil money penalty, for

18 each calendar year in which the failure occurs,

19 of the lesser of $500 or 1 percent of the wages

20 or other compensation paid by such employer to

21 such individual during such calendar year.

22 ‘‘(ii) Subject to clause (iii), the provisions

23 of section 1128A (other than subsections (a)

24 and (b) thereof) shall apply to a civil money

25 penalty under clause (i) in the same manner as
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1 they apply to a civil money penalty or proceed2 ing under section 1128A(a).

3 ‘‘(iii) Any employer with respect to whom

4 a penalty under this subparagraph is upheld

5 after an administrative hearing shall be liable to

6 pay all costs of the Secretary with respect to

7 such hearing.

8 ‘‘(3) EMPLOYMENT SECURITY INFORMATION.—

9 ‘‘(A) REPORTING REQUIREMENT.—Each

10 State agency administering a State unemploy11 ment compensation law approved by the Sec12 retary of Labor under the Federal Unemploy13 ment Tax Act shall furnish to the Secretary of

14 Health and Human Services extracts of the re15 ports to the Secretary of Labor concerning the

16 wages and unemployment compensation paid to

17 individuals required under section 303(a)(6), in

18 accordance with subparagraph (B).

19 ‘‘(B) MANNER OF COMPLIANCE.—The ex20 tracts required under subparagraph (A) shall be

21 furnished to the Secretary of Health and

22 Human Services on a quarterly basis, with re23 spect to calendar quarters beginning on and

24 after October 1, 1996, by such dates, in such
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1 format, and containing such information as re2 quired by that Secretary in regulations.

3 ‘‘(j) DATA MATCHES AND OTHER DISCLOSURES.—

4 ‘‘(1) VERIFICATION BY SOCIAL SECURITY AD5 MINISTRATION.—(A) The Secretary shall transmit

6 data on individuals and employers maintained under

7 this section to the Social Security Administration to

8 the extent necessary for verification in accordance

9 with subparagraph (B).

10 ‘‘(B) The Social Security Administration shall

11 verify the accuracy of, correct or supply to the ex12 tent necessary and feasible, and report to the Sec13 retary, the following information in data supplied by

14 the Secretary pursuant to subparagraph (A):

15 ‘‘(i) the name, social security number, and

16 birth date of each individual; and

17 ‘‘(ii) the employer identification number of

18 each employer.

19 ‘‘(2) CHILD SUPPORT LOCATOR MATCHES.—For

20 the purpose of locating individuals for purposes of

21 paternity establishment and establishment and en22 forcement of child support, the Secretary shall—

23 ‘‘(A) match data in the directory of New

24 Hires against the child support order abstracts
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1 in the Data Bank of Child Support Orders not

2 less often than every 2 working days; and

3 ‘‘(B) report information obtained from

4 such a match to concerned State agencies oper5 ating programs under this part not later than

6 2 working days after such match.

7 ‘‘(3) DATA MATCHES AND DISCLOSURES OF

8 DATA IN ALL REGISTRIES FOR TITLE IV PROGRAM

9 PURPOSES.—The Secretary shall—

10 ‘‘(A) perform matches of data in each com11 ponent of the Federal Parent Locator Service

12 maintained under this section against data in

13 each other such component (other than the

14 matches required pursuant to paragraph (1)),

15 and report information resulting from such

16 matches to State agencies operating programs

17 under this part and parts A, F, and G; and

18 ‘‘(B) disclose data in such registries to

19 such State agencies,

20 to the extent, and with the frequency, that the Sec21 retary determines to be effective in assisting such

22 States to carry out their responsibilities under such

23 programs.

24 ‘‘(k) FEES.—
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1 ‘‘(1) FOR SSA VERIFICATION.—The Secretary

2 shall reimburse the Commissioner of Social Security,

3 at a rate negotiated between the Secretary and the

4 Commissioner, the costs incurred by the Commis5 sioner in performing the verification services speci6 fied in subsection (j).

7 ‘‘(2) FOR INFORMATION FROM SESAS.—The

8 Secretary shall reimburse costs incurred by State

9 employment security agencies in furnishing data as

10 required by subsection (j)(3), at rates which the Sec11 retary determines to be reasonable (which rates shall

12 not include payment for the costs of obtaining, com13 piling, or maintaining such data).

14 ‘‘(3) FOR INFORMATION FURNISHED TO STATE

15 AND FEDERAL AGENCIES.—State and Federal agen16 cies receiving data or information from the Secretary

17 pursuant to this section shall reimburse the costs in18 curred by the Secretary in furnishing such data or

19 information, at rates which the Secretary determines

20 to be reasonable (which rates shall include payment

21 for the costs of obtaining, verifying, maintaining,

22 and matching such data or information).

23 ‘‘(l) RESTRICTION ON DISCLOSURE AND USE.—Data

24 in the Federal Parent Locator Service, and information
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1 resulting from matches using such data, shall not be used

2 or disclosed except as specifically provided in this section.

3 ‘‘(m) RETENTION OF DATA.—Data in the Federal

4 Parent Locator Service, and data resulting from matches

5 performed pursuant to this section, shall be retained for

6 such period (determined by the Secretary) as appropriate

7 for the data uses specified in this section.

8 ‘‘(n) INFORMATION INTEGRITY AND SECURITY.—The

9 Secretary shall establish and implement safeguards with

10 respect to the entities established under this section de11 signed to—

12 ‘‘(1) ensure the accuracy and completeness of

13 information in the Federal Parent Locator Service;

14 and

15 ‘‘(2) restrict access to confidential information

16 in the Federal Parent Locator Service to authorized

17 persons, and restrict use of such information to au18 thorized purposes.

19 ‘‘(o) LIMIT ON LIABILITY.—The Secretary shall not

20 be liable to either a State or an individual for inaccurate

21 information provided to a component of the Federal Par22 ent Locator Service section and disclosed by the Secretary

23 in accordance with this section.’’.

24 (g) CONFORMING AMENDMENTS.—
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1 (1) TO PART D OF TITLE IV OF THE SOCIAL SE2 CURITY ACT.—Section 454(8)(B) (42 U.S.C.

3 654(8)(B)) is amended to read as follows:

4 ‘‘(B) the Federal Parent Locator Service

5 established under section 453;’’.

6 (2) TO FEDERAL UNEMPLOYMENT TAX ACT.—

7 Section 3304(16) of the Internal Revenue Code of

8 1986 is amended—

9 (A) by striking ‘‘Secretary of Health, Edu10 cation, and Welfare’’ each place such term ap11 pears and inserting ‘‘Secretary of Health and

12 Human Services’’;

13 (B) in subparagraph (B), by striking

14 ‘‘such information’’ and all that follows and in15 serting ‘‘information furnished under subpara16 graph (A) or (B) is used only for the purposes

17 authorized under such subparagraph;’’;

18 (C) by striking ‘‘and’’ at the end of sub19 paragraph (A);

20 (D) by redesignating subparagraph (B) as

21 subparagraph (C); and

22 (E) by inserting after subparagraph (A)

23 the following new subparagraph:

24 ‘‘(B) wage and unemployment compensa25 tion information contained in the records of
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1 such agency shall be furnished to the Secretary

2 of Health and Human Services (in accordance

3 with regulations promulgated by such Sec4 retary) as necessary for the purposes of the di5 rectory of New Hires established under section

6 453(i) of the Social Security Act, and’’.

7 (3) TO STATE GRANT PROGRAM UNDER TITLE

8 III OF THE SOCIAL SECURITY ACT.—Section 303(a)

9 (42 U.S.C. 503(a)) is amended—

10 (A) by striking ‘‘and’’ at the end of para11 graph (8);

12 (B) by striking the period at the end of

13 paragraph (9) and inserting ‘‘; and’’; and

14 (C) by adding after paragraph (9) the fol15 lowing new paragraph:

16 ‘‘(10) The making of quarterly electronic re17 ports, at such dates, in such format, and containing

18 such information, as required by the Secretary of

19 Health and Human Services under section 453(i)(3),

20 and compliance with such provisions as such Sec21 retary may find necessary to ensure the correctness

22 and verification of such reports.’’.

23 SEC. 426. USE OF SOCIAL SECURITY NUMBERS.

24 (a) STATE LAW REQUIREMENT.—Section 466(a) (42

25 U.S.C. 666(a)), as amended by section 401(a) of this Act,
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1 is amended by inserting after paragraph (12) the follow2 ing:

3 ‘‘(13) SOCIAL SECURITY NUMBERS RE4 QUIRED.—Procedures requiring the recording of so5 cial security numbers—

6 ‘‘(A) of both parties on marriage licenses

7 and divorce decrees; and

8 ‘‘(B) of both parents, on birth records and

9 child support and paternity orders.’’.

10 (b) CLARIFICATION OF FEDERAL POLICY.—Section

11 205(c)(2)(C)(ii) (42 U.S.C. 405(c)(2)(C)(ii)) is amended

12 by striking the third sentence and inserting ‘‘This clause

13 shall not be considered to authorize disclosure of such

14 numbers except as provided in the preceding sentence.’’.

15 Subtitle D—Streamlining and

16 Uniformity of Procedures

17 SEC. 431. ADOPTION OF UNIFORM STATE LAWS.

18 Section 466(a) (42 U.S.C. 666(a)), as amended by

19 sections 401(a) and 426(a) of this Act, is amended insert20 ing after paragraph (13) the following:

21 ‘‘(14) INTERSTATE ENFORCEMENT.—(A) ADOP22 TION OF UIFSA.—Procedures under which the State

23 adopts in its entirety (with the modifications and ad24 ditions specified in this paragraph) not later than

25 January 1, 1997, and uses on and after such date,
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1 the Uniform Interstate Family Support Act, as ap2 proved by the National Conference of Commissioners

3 on Uniform State Laws in August, 1992.

4 ‘‘(B) EXPANDED APPLICATION OF UIFSA.—The

5 State law adopted pursuant to subparagraph (A)

6 shall be applied to any case—

7 ‘‘(i) involving an order established or modi8 fied in one State and for which a subsequent

9 modification is sought in another State; or

10 ‘‘(ii) in which interstate activity is required

11 to enforce an order.

12 ‘‘(C) JURISDICTION TO MODIFY ORDERS.—The

13 State law adopted pursuant to subparagraph (A) of

14 this paragraph shall contain the following provision

15 in lieu of section 611(a)(1) of the Uniform Inter16 state Family Support Act described in such subpara17 graph (A):

18 ‘‘ ‘(1) the following requirements are met:

19 ‘‘ ‘(i) the child, the individual obligee, and

20 the obligor—

21 ‘‘ ‘(I) do not reside in the issuing

22 State; and

23 ‘‘ ‘(II) either reside in this State or

24 are subject to the jurisdiction of this State

25 pursuant to section 201; and
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1 ‘‘ ‘(ii) (in any case where another State is

2 exercising or seeks to exercise jurisdiction to

3 modify the order) the conditions of section 204

4 are met to the same extent as required for pro5 ceedings to establish orders; or’.

6 ‘‘(D) SERVICE OF PROCESS.—The State law

7 adopted pursuant to subparagraph (A) shall recog8 nize as valid, for purposes of any proceeding subject

9 to such State law, service of process upon persons

10 in the State (and proof of such service) by any

11 means acceptable in another State which is the initi12 ating or responding State in such proceeding.

13 ‘‘(E) COOPERATION BY EMPLOYERS.—The

14 State law adopted pursuant to subparagraph (A)

15 shall provide for the use of procedures (including

16 sanctions for noncompliance) under which all entities

17 in the State (including for-profit, nonprofit, and gov18 ernmental employers) are required to provide

19 promptly, in response to a request by the State

20 agency of that or any other State administering a

21 program under this part, information on the employ22 ment, compensation, and benefits of any individual

23 employed by such entity as an employee or contrac24 tor.’’.
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1 SEC. 432. IMPROVEMENTS TO FULL FAITH AND CREDIT

2 FOR CHILD SUPPORT ORDERS.

3 Section 1738B of title 28, United States Code, is

4 amended—

5 (1) in subsection (a)(2), by striking ‘‘subsection

6 (e)’’ and inserting ‘‘subsections (e), (f), and (i)’’;

7 (2) in subsection (b), by inserting after the 2nd

8 undesignated paragraph the following:

9 ‘‘ ‘child’s home State’ means the State in which

10 a child lived with a parent or a person acting as par11 ent for at least six consecutive months immediately

12 preceding the time of filing of a petition or com13 parable pleading for support and, if a child is less

14 than six months old, the State in which the child

15 lived from birth with any of them. A period of tem16 porary absence of any of them is counted as part of

17 the six-month period.’’;

18 (3) in subsection (c), by inserting ‘‘by a court

19 of a State’’ before ‘‘is made’’;

20 (4) in subsection (c)(1), by inserting ‘‘and sub21 sections (e), (f), and (g)’’ after ‘‘located’’;

22 (5) in subsection (d)—

23 (A) by inserting ‘‘individual’’ before ‘‘con24 testant’’; and

25 (B) by striking ‘‘subsection (e)’’ and in26 serting ‘‘subsections (e) and (f)’’;
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1 (6) in subsection (e), by striking ‘‘make a modi2 fication of a child support order with respect to a

3 child that is made’’ and inserting ‘‘modify a child

4 support order issued’’;

5 (7) in subsection (e)(1), by inserting ‘‘pursuant

6 to subsection (i)’’ before the semicolon;

7 (8) in subsection (e)(2)—

8 (A) by inserting ‘‘individual’’ before ‘‘con9 testant’’ each place such term appears; and

10 (B) by striking ‘‘to that court’s making the

11 modification and assuming’’ and inserting ‘‘with

12 the State of continuing, exclusive jurisdiction

13 for a court of another State to modify the order

14 and assume’’;

15 (9) by redesignating subsections (f) and (g) as

16 subsections (g) and (h), respectively;

17 (10) by inserting after subsection (e) the follow18 ing:

19 ‘‘(f) RECOGNITION OF CHILD SUPPORT ORDERS.—

20 If one or more child support orders have been issued in

21 this or another State with regard to an obligor and a child,

22 a court shall apply the following rules in determining

23 which order to recognize for purposes of continuing, exclu24 sive jurisdiction and enforcement:
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1 ‘‘(1) If only one court has issued a child sup2 port order, the order of that court must be recog3 nized.

4 ‘‘(2) If two or more courts have issued child

5 support orders for the same obligor and child, and

6 only one of the courts would have continuing, exclu7 sive jurisdiction under this section, the order of that

8 court must be recognized.

9 ‘‘(3) If two or more courts have issued child

10 support orders for the same obligor and child, and

11 only one of the courts would have continuing, exclu12 sive jurisdiction under this section, an order issued

13 by a court in the current home State of the child

14 must be recognized, but if an order has not been is15 sued in the current home State of the child, the

16 order most recently issued must be recognized.

17 ‘‘(4) If two or more courts have issued child

18 support orders for the same obligor and child, and

19 none of the courts would have continuing, exclusive

20 jurisdiction under this section, a court may issue a

21 child support order, which must be recognized.

22 ‘‘(5) The court that has issued an order recog23 nized under this subsection is the court having con24 tinuing, exclusive jurisdiction.’’;

25 (11) in subsection (g) (as so redesignated)—
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1 (A) by striking ‘‘PRIOR’’ and inserting

2 ‘‘MODIFIED’’; and

3 (B) by striking ‘‘subsection (e)’’ and in4 serting ‘‘subsections (e) and (f)’’;

5 (12) in subsection (h) (as so redesignated)—

6 (A) in paragraph (2), by inserting ‘‘includ7 ing the duration of current payments and other

8 obligations of support’’ before the comma; and

9 (B) in paragraph (3), by inserting ‘‘arrears

10 under’’ after ‘‘enforce’’; and

11 (13) by adding at the end the following:

12 ‘‘(i) REGISTRATION FOR MODIFICATION.—If there is

13 no individual contestant or child residing in the issuing

14 State, the party or support enforcement agency seeking

15 to modify, or to modify and enforce, a child support order

16 issued in another State shall register that order in a State

17 with jurisdiction over the nonmovant for the purpose of

18 modification.’’.

19 SEC. 433. STATE LAWS PROVIDING EXPEDITED PROCE20 DURES.

21 (a) STATE LAW REQUIREMENTS.—Section 466 (42

22 U.S.C. 666) is amended—

23 (1) in subsection (a)(2), in the first sentence, to

24 read as follows: ‘‘Expedited administrative and judi25 cial procedures (including the procedures specified in
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1 subsection (c)) for establishing paternity and for es2 tablishing, modifying, and enforcing support obliga3 tions.’’; and

4 (2) by adding after subsection (b) the following

5 new subsection:

6 ‘‘(c) EXPEDITED PROCEDURES.—The procedures

7 specified in this subsection are the following:

8 ‘‘(1) ADMINISTRATIVE ACTION BY STATE AGEN9 CY.—Procedures which give the State agency the au10 thority (and recognize and enforce the authority of

11 State agencies of other States), without the necessity

12 of obtaining an order from any other judicial or ad13 ministrative tribunal (but subject to due process

14 safeguards, including (as appropriate) requirements

15 for notice, opportunity to contest the action, and op16 portunity for an appeal on the record to an inde17 pendent administrative or judicial tribunal), to take

18 the following actions relating to establishment or en19 forcement of orders:

20 ‘‘(A) GENETIC TESTING.—To order genetic

21 testing for the purpose of paternity establish22 ment as provided in section 466(a)(5).

23 ‘‘(B) DEFAULT ORDERS.—To enter a de24 fault order, upon a showing of service of proc-
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1 ess and any additional showing required by

2 State law—

3 ‘‘(i) establishing paternity, in the case

4 of any putative father who refuses to sub5 mit to genetic testing; and

6 ‘‘(ii) establishing or modifying a sup7 port obligation, in the case of a parent (or

8 other obligor or obligee) who fails to re9 spond to notice to appear at a proceeding

10 for such purpose.

11 ‘‘(C) SUBPOENAS.—To subpoena any fi12 nancial or other information needed to estab13 lish, modify, or enforce an order, and to sanc14 tion failure to respond to any such subpoena.

15 ‘‘(D) ACCESS TO PERSONAL AND FINAN16 CIAL INFORMATION.—To obtain access, subject

17 to safeguards on privacy and information secu18 rity, to the following records (including auto19 mated access, in the case of records maintained

20 in automated data bases):

21 ‘‘(i) records of other State and local

22 government agencies, including—

23 ‘‘(I) vital statistics (including

24 records of marriage, birth, and di25 vorce);
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1 ‘‘(II) State and local tax and rev2 enue records (including information

3 on residence address, employer, in4 come and assets);

5 ‘‘(III) records concerning real

6 and titled personal property;

7 ‘‘(IV) records of occupational and

8 professional licenses, and records con9 cerning the ownership and control of

10 corporations, partnerships, and other

11 business entities;

12 ‘‘(V) employment security

13 records;

14 ‘‘(VI) records of agencies admin15 istering public assistance programs;

16 ‘‘(VII) records of the motor vehi17 cle department; and

18 ‘‘(VIII) corrections records; and

19 ‘‘(ii) certain records held by private

20 entities, including—

21 ‘‘(I) customer records of public

22 utilities and cable television compa23 nies; and

24 ‘‘(II) information (including in25 formation on assets and liabilities) on
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1 individuals who owe or are owed sup2 port (or against or with respect to

3 whom a support obligation is sought)

4 held by financial institutions (subject

5 to limitations on liability of such enti6 ties arising from affording such ac7 cess).

8 ‘‘(E) INCOME WITHHOLDING.—To order

9 income withholding in accordance with sub10 section (a)(1) and (b) of section 466.

11 ‘‘(F) CHANGE IN PAYEE.—(In cases where

12 support is subject to an assignment under sec13 tion 402(a)(26), 471(a)(17), or 1912, or to a

14 requirement to pay through the centralized col15 lections unit under section 454B) upon provid16 ing notice to obligor and obligee, to direct the

17 obligor or other payor to change the payee to

18 the appropriate government entity.

19 ‘‘(G) SECURE ASSETS TO SATISFY ARREAR20 AGES.—For the purpose of securing overdue

21 support—

22 ‘‘(i) to intercept and seize any peri23 odic or lump-sum payment to the obligor

24 by or through a State or local government

25 agency, including—
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1 ‘‘(I) unemployment compensa2 tion, workers’ compensation, and

3 other benefits;

4 ‘‘(II) judgments and settlements

5 in cases under the jurisdiction of the

6 State or local government; and

7 ‘‘(III) lottery winnings;

8 ‘‘(ii) to attach and seize assets of the

9 obligor held by financial institutions;

10 ‘‘(iii) to attach public and private re11 tirement funds in appropriate cases, as de12 termined by the Secretary; and

13 ‘‘(iv) to impose liens in accordance

14 with paragraph (a)(4) and, in appropriate

15 cases, to force sale of property and dis16 tribution of proceeds.

17 ‘‘(H) INCREASE MONTHLY PAYMENTS.—

18 For the purpose of securing overdue support, to

19 increase the amount of monthly support pay20 ments to include amounts for arrearages (sub21 ject to such conditions or restrictions as the

22 State may provide).

23 ‘‘(I) SUSPENSION OF DRIVERS’ LI24 CENSES.—To suspend drivers’ licenses of indi-
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1 viduals owing past-due support, in accordance

2 with subsection (a)(16).

3 ‘‘(2) SUBSTANTIVE AND PROCEDURAL RULES.—

4 The expedited procedures required under subsection

5 (a)(2) shall include the following rules and author6 ity, applicable with respect to all proceedings to es7 tablish paternity or to establish, modify, or enforce

8 support orders:

9 ‘‘(A) LOCATOR INFORMATION; PRESUMP10 TIONS CONCERNING NOTICE.—Procedures

11 under which—

12 ‘‘(i) the parties to any paternity or

13 child support proceedings are required

14 (subject to privacy safeguards) to file with

15 the tribunal before entry of an order, and

16 to update as appropriate, information on

17 location and identity (including Social Se18 curity number, residential and mailing ad19 dresses, telephone number, driver’s license

20 number, and name, address, and telephone

21 number of employer); and

22 ‘‘(ii) in any subsequent child support

23 enforcement action between the same par24 ties, the tribunal shall be authorized, upon

25 sufficient showing that diligent effort has
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1 been made to ascertain such party’s cur2 rent location, to deem due process require3 ments for notice and service of process to

4 be met, with respect to such party, by de5 livery to the most recent residential or em6 ployer address so filed pursuant to clause

7 (i).

8 ‘‘(B) STATEWIDE JURISDICTION.—Proce9 dures under which—

10 ‘‘(i) the State agency and any admin11 istrative or judicial tribunal with authority

12 to hear child support and paternity cases

13 exerts statewide jurisdiction over the par14 ties, and orders issued in such cases have

15 statewide effect; and

16 ‘‘(ii) (in the case of a State in which

17 orders in such cases are issued by local ju18 risdictions) a case may be transferred be19 tween jurisdictions in the State without

20 need for any additional filing by the peti21 tioner, or service of process upon the re22 spondent, to retain jurisdiction over the

23 parties.’’.
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1 (c) EXCEPTIONS FROM STATE LAW REQUIRE2 MENTS.—Section 466(d) (42 U.S.C. 666(d)) is amend3 ed—

4 (1) by striking ‘‘(d) If’’ and inserting the fol5 lowing:

6 ‘‘(d) EXEMPTIONS FROM REQUIREMENTS.—

7 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

8 if’’; and

9 (2) by adding at the end the following new

10 paragraph:

11 ‘‘(2) NONEXEMPT REQUIREMENTS.—The Sec12 retary shall not grant an exemption from the re13 quirements of—

14 ‘‘(A) subsection (a)(5) (concerning proce15 dures for paternity establishment);

16 ‘‘(B) subsection (a)(10) (concerning modi17 fication of orders);

18 ‘‘(C) subsection (a)(12) (concerning re19 cording of orders in the central State case reg20 istry);

21 ‘‘(D) subsection (a)(13) (concerning re22 cording of Social Security numbers);

23 ‘‘(E) subsection (a)(14) (concerning inter24 state enforcement); or
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1 ‘‘(F) subsection (c) (concerning expedited

2 procedures), other than paragraph (1)(A) there3 of (concerning establishment or modification of

4 support amount).’’.

5 (d) AUTOMATION OF STATE AGENCY FUNCTIONS.—

6 Section 454A, as added by section 415(a)(2) of this Act

7 and as amended by sections 421 and 422(c) of this Act,

8 is amended by adding at the end the following new sub9 section:

10 ‘‘(h) EXPEDITED ADMINISTRATIVE PROCEDURES.—

11 The automated system required under this section shall

12 be used, to the maximum extent feasible, to implement any

13 expedited administrative procedures required under sec14 tion 466(c).’’.

15 Subtitle E—Paternity

16 Establishment

17 SEC. 441. SENSE OF THE CONGRESS.

18 It is the sense of the Congress that social services

19 should be provided in hospitals to women who have become

20 pregnant as a result of rape or incest.

21 SEC. 442. AVAILABILITY OF PARENTING SOCIAL SERVICES

22 FOR NEW FATHERS.

23 Section 466(a) (42 U.S.C. 666(a)), as amended by

24 sections 401(a), 426(a), and 431 of this Act, is amended

25 by inserting after paragraph (14) the following:
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1 ‘‘(15) Procedures for providing new fathers

2 with positive parenting counseling that stresses the

3 importance of paying child support in a timely man4 ner, in accordance with regulations prescribed by the

5 Secretary.’’.

6 SEC. 443. COOPERATION REQUIREMENT AND GOOD CAUSE

7 EXCEPTION.

8 (a) CHILD SUPPORT ENFORCEMENT REQUIRE9 MENTS.—Section 454 (42 U.S.C. 654) is amended—

10 (1) by striking ‘‘and’’ at the end of paragraph

11 (23);

12 (2) by striking the period at the end of para13 graph (24) and inserting ‘‘; and’’; and

14 (3) by inserting after paragraph (24) the fol15 lowing:

16 ‘‘(25) provide that the State agency administer17 ing the plan under this part—

18 ‘‘(A) will make the determination specified

19 under paragraph (4), as to whether an individ20 ual is cooperating with efforts to establish pa21 ternity and secure support (or has good cause

22 not to cooperate with such efforts) for purposes

23 of the requirements of sections 402(a)(26) and

24 1912;
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1 ‘‘(B) will advise individuals, both orally

2 and in writing, of the grounds for good cause

3 exceptions to the requirement to cooperate with

4 such efforts;

5 ‘‘(C) will take the best interests of the

6 child into consideration in making the deter7 mination whether such individual has good

8 cause not to cooperate with such efforts;

9 ‘‘(D)(i) will make the initial determination

10 as to whether an individual is cooperating (or

11 has good cause not to cooperate) with efforts to

12 establish paternity within 10 days after such in13 dividual is referred to such State agency by the

14 State agency administering the program under

15 part A of title XIX;

16 ‘‘(ii) will make redeterminations as to co17 operation or good cause at appropriate inter18 vals; and

19 ‘‘(iii) will promptly notify the individual,

20 and the State agencies administering such pro21 grams, of each such determination and redeter22 mination;

23 ‘‘(E) with respect to any child born on or

24 after the date 10 months after enactment of

25 this provision, will not determine (or redeter-
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1 mine) the mother (or other custodial relative) of

2 such child to be cooperating with efforts to es3 tablish paternity unless such individual fur4 nishes—

5 ‘‘(i) the name of the putative father

6 (or fathers); and

7 ‘‘(ii) sufficient additional information

8 to enable the State agency, if reasonable

9 efforts were made, to verify the identity of

10 the person named as the putative father

11 (including such information as the putative

12 father’s present address, telephone num13 ber, date of birth, past or present place of

14 employment, school previously or currently

15 attended, and names and addresses of par16 ents, friends, or relatives able to provide

17 location information, or other information

18 that could enable service of process on

19 such person), and

20 ‘‘(F)(i) (where a custodial parent who was

21 initially determined not to be cooperating (or to

22 have good cause not to cooperate) is later deter23 mined to be cooperating or to have good cause

24 not to cooperate) will immediately notify the

25 State agencies administering the programs
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1 under part A of title XIX that this eligibility

2 condition has been met; and

3 ‘‘(ii) (where a custodial parent was initially

4 determined to be cooperating (or to have good

5 cause not to cooperate)) will not later determine

6 such individual not to be cooperating (or not to

7 have good cause not to cooperate) until such in8 dividual has been afforded an opportunity for a

9 hearing.’’.

10 (b) AFDC AMENDMENTS.—

11 (1) Section 402(a)(11) (42 U.S.C. 602(a)(11))

12 is amended by striking ‘‘furnishing of’’ and inserting

13 ‘‘application for’’.

14 (2) Section 402(a)(26) (42 U.S.C. 602(a)(26))

15 is amended—

16 (A) in each of subparagraphs (A) and (B),

17 by redesignating clauses (i) and (ii) as

18 subclauses (I) and (II);

19 (B) by indenting and redesignating sub20 paragraphs (A), (B), and (C) as clauses (i), (ii),

21 and (iv), respectively;

22 (C) in clause (ii), as redesignated—

23 (i) by striking ‘‘is claimed, or in ob24 taining any other payments or property
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1 due such applicant or such child,’’ and in2 serting ‘‘is claimed;’’; and

3 (ii) by striking ‘‘unless’’ and all that

4 follows through ‘‘aid is claimed; and’’;

5 (D) by adding after clause (ii) the follow6 ing new clause:

7 ‘‘(iii) to cooperate with the State in

8 obtaining any other payments or property

9 due such applicant or such child; and’’;

10 (E) in the matter preceding clause (i) (as

11 so redesignated) to read as follows:

12 ‘‘(26) provide—

13 ‘‘(A) that, as a condition of eligibility for

14 aid, each applicant or recipient will be required

15 (subject to subparagraph (C))—’’;

16 (F) in subparagraph (A)(iv), as redesig17 nated, by striking ‘‘, unless such individual’’

18 and all that follows through ‘‘individuals in19 volved’’;

20 (G) by adding at the end the following new

21 subparagraphs:

22 ‘‘(B) that the State agency will imme23 diately refer each applicant requiring paternity

24 establishment services to the State agency ad25 ministering the program under part D;
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1 ‘‘(C) that an individual will not be required

2 to cooperate with the State, as provided under

3 subparagraph (A), if the individual is found to

4 have good cause for refusing to cooperate, as

5 determined in accordance with standards pre6 scribed by the Secretary, which standards shall

7 take into consideration the best interests of the

8 child on whose behalf aid is claimed—

9 ‘‘(i) to the satisfaction of the State

10 agency administering the program under

11 part D, as determined in accordance with

12 section 454(25), with respect to the re13 quirements under clauses (i) and (ii) of

14 subparagraph (A); and

15 ‘‘(ii) to the satisfaction of the State

16 agency administering the program under

17 this part, with respect to the requirements

18 under clauses (iii) and (iv) of subpara19 graph (A);

20 ‘‘(D) that (except as provided in subpara21 graph (E)) an applicant requiring paternity es22 tablishment services (other than an individual

23 eligible for emergency assistance as defined in

24 section 406(e)) shall not be eligible for any aid
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1 under a State plan approved under this part

2 until such applicant—

3 ‘‘(i) has furnished to the agency ad4 ministering the State plan under part D

5 the information specified in section

6 454(25)(E); or

7 ‘‘(ii) has been determined by such

8 agency to have good cause not to cooper9 ate;

10 ‘‘(E) that the provisions of subparagraph

11 (D) shall not apply—

12 ‘‘(i) if the State agency specified in

13 such subparagraph has not, within 10 days

14 after such individual was referred to such

15 agency, provided the notification required

16 by section 454(25)(D)(iii), until such noti17 fication is received; and

18 ‘‘(ii) if such individual appeals a de19 termination that the individual lacks good

20 cause for noncooperation, until after such

21 determination is affirmed after notice and

22 opportunity for a hearing; and’’; and

23 (H)(i) by relocating and redesignating as

24 subparagraph (F) the text at the end of sub25 paragraph (A)(ii) beginning with ‘‘that, if the
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1 relative’’ and all that follows through the semi2 colon;

3 (ii) in subparagraph (F), as so redesig4 nated and relocated, by striking ‘‘subpara5 graphs (A) and (B) of this paragraph’’ and in6 serting ‘‘subparagraph (A)’’; and

7 (iii) by striking ‘‘and’’ at the end of sub8 paragraph (a)(ii).

9 (c) MEDICAID AMENDMENTS.—Section 1912(a) (42

10 U.S.C. 1396k(a)) is amended—

11 (1) in paragraph (1)(B), by inserting ‘‘(except

12 as provided in paragraph (2))’’ after ‘‘to cooperate

13 with the State’’;

14 (2) in subparagraphs (B) and (C) of paragraph

15 (1) by striking ‘‘, unless’’ and all that follows and

16 inserting a semicolon; and

17 (3) by redesignating paragraph (2) as para18 graph (5), and inserting after paragraph (1) the fol19 lowing new paragraphs:

20 ‘‘(2) provide that the State agency will imme21 diately refer each applicant or recipient requiring

22 paternity establishment services to the State agency

23 administering the program under part D of title IV;

24 ‘‘(3) provide that an individual will not be re25 quired to cooperate with the State, as provided
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1 under paragraph (1), if the individual is found to

2 have good cause for refusing to cooperate, as deter3 mined in accordance with standards prescribed by

4 the Secretary, which standards shall take into con5 sideration the best interests of the individuals in6 volved—

7 ‘‘(A) to the satisfaction of the State agency

8 administering the program under part D, as de9 termined in accordance with section 454(25),

10 with respect to the requirements to cooperate

11 with efforts to establish paternity and to obtain

12 support (including medical support) from a par13 ent; and

14 ‘‘(B) to the satisfaction of the State agen15 cy administering the program under this title,

16 with respect to other requirements to cooperate

17 under paragraph (1);

18 ‘‘(4) provide that (except as provided in para19 graph (5)) an applicant requiring paternity estab20 lishment services (other than an individual eligible

21 for emergency assistance as defined in section

22 406(e), or presumptively eligible pursuant to section

23 1920) shall not be eligible for medical assistance

24 under this title until such applicant—
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1 ‘‘(i) has furnished to the agency admin2 istering the State plan under part D of title IV

3 the information specified in section 454(25)(E);

4 or

5 ‘‘(ii) has been determined by such agency

6 to have good cause not to cooperate; and

7 ‘‘(5) provide that the provisions of paragraph

8 (4) shall not apply with respect to an applicant—

9 ‘‘(i) if such agency has not, within 10 days

10 after such individual was referred to such agen11 cy, provided the notification required by section

12 454(25)(D)(iii), until such notification is re13 ceived); and

14 ‘‘(ii) if such individual appeals a deter15 mination that the individual lacks good cause

16 for noncooperation, until after such determina17 tion is affirmed after notice and opportunity for

18 a hearing.’’.

19 (d) EFFECTIVE DATE.—The amendments made by

20 this section shall be effective with respect to applications

21 filed in or after the first calendar quarter beginning 10

22 months or more after the date of the enactment of this

23 Act (or such earlier quarter as the State may select) for

24 aid under a State plan approved under part A of title IV
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1 or for medical assistance under a State plan approved

2 under title XIX.

3 SEC. 444. FEDERAL MATCHING PAYMENTS.

4 (a) INCREASED BASE MATCHING RATE.—Section

5 455(a)(2) (42 U.S.C. 655(a)(2)) is amended to read as

6 follows:

7 ‘‘(2) The applicable percent for a quarter for

8 purposes of paragraph (1)(A) is—

9 ‘‘(A) for fiscal year 1996, 69 percent;

10 ‘‘(B) for fiscal year 1997, 72 percent; and

11 ‘‘(C) for fiscal year 1998 and succeeding

12 fiscal years, 75 percent.’’.

13 (b) MAINTENANCE OF EFFORT.—Section 455 (42

14 U.S.C. 655) is amended—

15 (1) in subsection (a)(1), in the matter preced16 ing subparagraph (A), by striking ‘‘From’’ and in17 serting ‘‘Subject to subsection (c), from’’; and

18 (2) by inserting after subsection (b) the follow19 ing:

20 ‘‘(c) MAINTENANCE OF EFFORT.—Notwithstanding

21 subsection (a), total expenditures for the State program

22 under this part for fiscal year 1996 and each succeeding

23 fiscal year, reduced by the percentage specified for such

24 fiscal year under subparagraph (A), (B), or (C)(i) of para-
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1 graph (2), shall not be less than such total expenditures

2 for fiscal year 1995, reduced by 66 percent.’’.

3 SEC. 445. PERFORMANCE-BASED INCENTIVES AND PEN4 ALTIES.

5 (a) INCENTIVE ADJUSTMENTS TO FEDERAL MATCH6 ING RATE.—Section 458 (42 U.S.C. 658) is amended to

7 read as follows:

8 ‘‘INCENTIVE ADJUSTMENTS TO MATCHING RATE

9 ‘‘SEC. 458. (a) INCENTIVE ADJUSTMENT.—

10 ‘‘(1) IN GENERAL.—In order to encourage and

11 reward State child support enforcement programs

12 which perform in an effective manner, the Federal

13 matching rate for payments to a State under section

14 455(a)(1)(A), for each fiscal year beginning on or

15 after October 1, 1997, shall be increased by a factor

16 reflecting the sum of the applicable incentive adjust17 ments (if any) determined in accordance with regu18 lations under this section with respect to Statewide

19 paternity establishment and the overall performance

20 of the State in child support enforcement.

21 ‘‘(2) STANDARDS.—

22 ‘‘(A) IN GENERAL.—The Secretary shall

23 specify in regulations—

24 ‘‘(i) the levels of accomplishment, and

25 rates of improvement as alternatives to

26 such levels, which States must attain to
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1 qualify for incentive adjustments under

2 this section; and

3 ‘‘(ii) the amounts of incentive adjust4 ment that shall be awarded to States

5 achieving specified accomplishment or im6 provement levels, which amounts shall be

7 graduated, ranging up to—

8 ‘‘(I) 5 percentage points, in con9 nection with Statewide paternity es10 tablishment; and

11 ‘‘(II) 10 percentage points, in

12 connection with overall performance in

13 child support enforcement.

14 ‘‘(B) LIMITATION.—In setting performance

15 standards pursuant to subparagraph (A)(i) and

16 adjustment amounts pursuant to subparagraph

17 (A)(ii), the Secretary shall ensure that the ag18 gregate number of percentage point increases as

19 incentive adjustments to all States do not ex20 ceed such aggregate increases as assumed by

21 the Secretary in estimates of the cost of this

22 section as of June 1994, unless the aggregate

23 performance of all States exceeds the projected

24 aggregate performance of all States in such cost

25 estimates.
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1 ‘‘(3) DETERMINATION OF INCENTIVE ADJUST2 MENT.—

3 ‘‘(A) USE OF PERFORMANCE INDICA4 TORS.—The Secretary shall, for fiscal year

5 1998 and each succeeding fiscal year, determine

6 the amount (if any) of incentive adjustment for

7 each State on the basis of the data submitted

8 by the State pursuant to section 454(15)(B)

9 with respect to performance indicators estab10 lished by the Secretary.

11 ‘‘(B) MINIMUM PERFORMANCE RE12 QUIRED.—

13 ‘‘(i) IN GENERAL.—The Secretary

14 shall not determine an incentive adjust15 ment for a State for a fiscal year if the

16 level of performance of the State for the

17 fiscal year with respect to such perform18 ance indicators is below the performance

19 threshold established by the Secretary for

20 the State for the fiscal year.

21 ‘‘(ii) ESTABLISHMENT OF STATE PER22 FORMANCE THRESHOLD.—The perform23 ance threshold with respect to such per24 formance indicators for a State and a fis-
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1 cal year shall be at or above the greater

2 of—

3 ‘‘(I) the national average level of

4 performance with respect to such indi5 cators, as of the date of the enact6 ment of this section; or

7 ‘‘(II) the level of performance of

8 the State with respect to such indica9 tors for the immediately preceding fis10 cal year.

11 ‘‘(C) DEADLINE FOR ISSUANCE OF REGU12 LATIONS.—Within 90 days after the date of the

13 enactment of this section, the Secretary shall

14 issue regulations setting forth the criteria for

15 awarding incentive adjustments.

16 ‘‘(4) FISCAL YEAR SUBJECT TO INCENTIVE AD17 JUSTMENT.—The total percentage point increase de18 termined pursuant to this section with respect to a

19 State program in a fiscal year shall apply as an ad20 justment to the percent applicable under section

21 455(a)(2) for payments to such State for the suc22 ceeding fiscal year.

23 ‘‘(b) DEFINITIONS.—As used in subsection (a):

24 ‘‘(1) STATEWIDE PATERNITY ESTABLISHMENT

25 PERCENTAGE.—The term ‘Statewide paternity estab-
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1 lishment percentage’ means, with respect to a fiscal

2 year, the ratio (expressed as a percentage) of—

3 ‘‘(A) the total number of out-of-wedlock

4 children in the State under one year of age for

5 whom paternity is established or acknowledged

6 during the fiscal year, to

7 ‘‘(B) the total number of children born out

8 of wedlock in the State during such fiscal year.

9 ‘‘(2) OVERALL PERFORMANCE OF THE STATE

10 IN CHILD SUPPORT ENFORCEMENT.—The term

11 ‘overall performance of the State in child support

12 enforcement’ means a measure or measures of the

13 effectiveness of the State agency in a fiscal year

14 which takes into account factors including—

15 ‘‘(A) the percentage of cases requiring a

16 child support order in which such an order was

17 established;

18 ‘‘(B) the percentage of cases in which child

19 support is being paid;

20 ‘‘(C) the ratio of child support collected to

21 child support due; and

22 ‘‘(D) the cost-effectiveness of the State

23 program, as determined in accordance with

24 standards established by the Secretary in regu25 lations.’’.
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1 (b) TITLE IV–D PAYMENT ADJUSTMENT.—Section

2 455(a)(2) (42 U.S.C. 655(a)(2)), as amended by section

3 415(a) of this Act, is amended—

4 (1) by striking the period at the end of sub5 paragraph (C) and inserting a semicolon; and

6 (2) by adding after and below subparagraph

7 (C), flush with the left margin of the subsection, the

8 following:

9 ‘‘increased by the incentive adjustment factor (if any) de10 termined by the Secretary pursuant to section 458.’’.

11 (c) CONFORMING AMENDMENTS.—Section 454(22)

12 (42 U.S.C. 654(22)) is amended—

13 (1) by striking ‘‘incentive payments’’ the 1st

14 place such term appears and inserting ‘‘incentive ad15 justments’’; and

16 (2) by striking ‘‘any such incentive payments

17 made to the State for such period’’ and inserting

18 ‘‘any increases in Federal payments to the State re19 sulting from such incentive adjustments’’.

20 (d) CALCULATION OF IV–D PATERNITY ESTABLISH21 MENT PERCENTAGE.—

22 (1) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is

23 amended in the matter preceding subparagraph (A)

24 by inserting ‘‘its overall performance in child sup25 port enforcement is satisfactory (as defined in sec-
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1 tion 458(b) and regulations of the Secretary), and’’

2 after ‘‘1994,’’.

3 (2) Section 452(g)(2)(A) (42 U.S.C.

4 652(g)(2)(A)) is amended in the matter preceding

5 clause (i)—

6 (A) by striking ‘‘paternity establishment

7 percentage’’ and inserting ‘‘IV–D paternity es8 tablishment percentage’’; and

9 (B) by striking ‘‘(or all States, as the case

10 may be)’’.

11 (3) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is

12 amended—

13 (A) by striking subparagraph (A) and re14 designating subparagraphs (B) and (C) as sub15 paragraphs (A) and (B), respectively;

16 (B) in subparagraph (A) (as so redesig17 nated), by striking ‘‘the percentage of children

18 born out-of-wedlock in a State’’ and inserting

19 ‘‘the percentage of children in a State who are

20 born out of wedlock or for whom support has

21 not been established’’; and

22 (C) in subparagraph (B) (as so redesig23 nated)—
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1 (i) by inserting ‘‘and overall perform2 ance in child support enforcement’’ after

3 ‘‘paternity establishment percentages’’; and

4 (ii) by inserting ‘‘and securing sup5 port’’ before the period.

6 (e) TITLE IV–A PAYMENT REDUCTION.—Section

7 403 (42 U.S.C. 603) is amended—

8 (1) in subsection (a), by striking ‘‘1958—’’ and

9 inserting ‘‘1958—’’ (subject to subsection (h))—’’;

10 (2) in subsection (h), by striking all that pre11 cedes paragraph (3) and inserting the following:

12 ‘‘(h)(1) If the Secretary finds, with respect to a State

13 program under this part in a fiscal year beginning on or

14 after October 1, 1996—

15 ‘‘(A)(i) on the basis of data submitted by a

16 State pursuant to section 454(15)(B), that the State

17 program in such fiscal year failed to achieve the IV–

18 D paternity establishment percentage (as defined in

19 section 452(g)(2)(A)) or the appropriate level of

20 overall performance in child support enforcement (as

21 defined in section 458(b)(2)), or to meet other per22 formance measures that may be established by the

23 Secretary, or

24 ‘‘(ii) on the basis of an audit or audits of such

25 State data conducted pursuant to section
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1 452(a)(4)(C), that the State data submitted pursu2 ant to section 454(15)(B) is incomplete or unreli3 able; and

4 ‘‘(B) that, with respect to the succeeding fiscal

5 year—

6 ‘‘(i) the State failed to take sufficient cor7 rective action to achieve the appropriate per8 formance levels as described in subparagraph

9 (A)(i), or

10 ‘‘(ii) the data submitted by the State pur11 suant to section 454(15)(B) is incomplete or

12 unreliable,

13 the amounts otherwise payable to the State under this

14 part for quarters following the end of such succeeding fis15 cal year, prior to quarters following the end of the first

16 quarter throughout which the State program is in compli17 ance with such performance requirement, shall be reduced

18 by the percentage specified in paragraph (2).

19 ‘‘(2) The reductions required under paragraph (1)

20 shall be—

21 ‘‘(A) not less than 1 nor more than 2 percent,

22 or

23 ‘‘(B) not less than 2 nor more than 3 percent,

24 if the finding is the 2nd consecutive finding made

25 pursuant to paragraph (1), or
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1 ‘‘(C) not less than 3 nor more than 5 percent,

2 if the finding is the 3rd or a subsequent consecutive

3 such finding.’’; and

4 (3) in subsection (h)(3), by striking ‘‘not in full

5 compliance’’ and all that follows and inserting ‘‘de6 termined as a result of an audit to have submitted

7 incomplete or unreliable data pursuant to section

8 454(15)(B), shall be determined to have submitted

9 adequate data if the Secretary determines that the

10 extent of the incompleteness or unreliability of the

11 data is of a technical nature which does not ad12 versely affect the determination of the level of the

13 State’s performance.’’.

14 (f) EFFECTIVE DATES.—

15 (1) INCENTIVE ADJUSTMENTS.—(A) The

16 amendments made by subsections (a), (b), and (c)

17 shall become effective October 1, 1996, except to the

18 extent provided in subparagraph (B).

19 (B) Section 458 of the Social Security Act, as

20 in effect immediately before the date of the enact21 ment of this section, shall be effective for purposes

22 of incentive payments to States for fiscal years be23 fore fiscal year 1998.

24 (2) PENALTY REDUCTIONS.—(A) The amend25 ments made by subsection (d) shall become effective
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1 with respect to calendar quarters beginning on and

2 after the date of enactment of this Act.

3 (B) The amendments made by subsection (e)

4 shall become effective with respect to calendar quar5 ters beginning on and after the date that is 1 year

6 after the date of enactment of this Act.

7 SEC. 446. STATE LAWS CONCERNING PATERNITY ESTAB8 LISHMENT.

9 (a) STATE LAWS REQUIRED.—Section 466(a)(5) (42

10 U.S.C. 666(a)(5)) is amended—

11 (1) by striking ‘‘(5)’’ and inserting the follow12 ing:

13 ‘‘(5) PROCEDURES CONCERNING PATERNITY ES14 TABLISHMENT.—’’;

15 (2) in subparagraph (A)—

16 (A) by striking ‘‘(A)(i)’’ and inserting the

17 following:

18 ‘‘(A) ESTABLISHMENT PROCESS AVAIL19 ABLE FROM BIRTH UNTIL AGE EIGHTEEN.—

20 (i)’’; and

21 (B) by indenting clauses (i) and (ii) so

22 that the left margin of such clauses is 2 ems to

23 the right of the left margin of paragraph (4);

24 (3) in subparagraph (B)—
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1 (A) by striking ‘‘(B)’’ and inserting the

2 following:

3 ‘‘(B) PROCEDURES CONCERNING GENETIC

4 TESTING.—(i)’’;

5 (B) in clause (i), as redesignated, by in6 serting before the period ‘‘, where such request

7 is supported by a sworn statement (I) by such

8 party alleging paternity setting forth facts es9 tablishing a reasonable possibility of the req10 uisite sexual contact of the parties, or (II) by

11 such party denying paternity setting forth facts

12 establishing a reasonable possibility of the

13 nonexistence of sexual contact of the parties;’’;

14 (C) by inserting after and below clause (i)

15 (as redesignated) the following new clause:

16 ‘‘(ii) Procedures which require the State

17 agency, in any case in which such agency orders

18 genetic testing—

19 ‘‘(I) to pay costs of such tests, subject

20 to recoupment (where the State so elects)

21 from the putative father if paternity is es22 tablished; and

23 ‘‘(II) to obtain additional testing in

24 any case where an original test result is
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1 disputed, upon request and advance pay2 ment by the disputing party.’’;

3 (4) by striking subparagraphs (C) and (D) and

4 inserting the following:

5 ‘‘(C) PATERNITY ACKNOWLEDGMENT.—(i)

6 Procedures for a simple civil process for volun7 tarily acknowledging paternity under which the

8 State must provide that, before a mother and a

9 putative father can sign an acknowledgment of

10 paternity, the putative father and the mother

11 must be given notice, orally, in writing, and in

12 a language that each can understand, of the al13 ternatives to, the legal consequences of, and the

14 rights (including, if 1 parent is a minor, any

15 rights afforded due to minority status) and re16 sponsibilities that arise from, signing the ac17 knowledgment.

18 ‘‘(ii) Such procedures must include a hos19 pital-based program for the voluntary acknowl20 edgment of paternity focusing on the period im21 mediately before or after the birth of a child.

22 ‘‘(iii) Such procedures must require the

23 State agency responsible for maintaining birth

24 records to offer voluntary paternity establish25 ment services.
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1 ‘‘(iv) The Secretary shall prescribe regula2 tions governing voluntary paternity establish3 ment services offered by hospitals and birth

4 record agencies. The Secretary shall prescribe

5 regulations specifying the types of other entities

6 that may offer voluntary paternity establish7 ment services, and governing the provision of

8 such services, which shall include a requirement

9 that such an entity must use the same notice

10 provisions used by, the same materials used by,

11 provide the personnel providing such services

12 with the same training provided by, and evalu13 ate the provision of such services in the same

14 manner as, voluntary paternity establishment

15 programs of hospitals and birth record agen16 cies.

17 ‘‘(v) Such procedures must require the

18 State and those required to establish paternity

19 to use only the affidavit developed under section

20 452(a)(7) for the voluntary acknowledgment of

21 paternity, and to give full faith and credit to

22 such an affidavit signed in any other State.

23 ‘‘(D) STATUS OF SIGNED PATERNITY AC24 KNOWLEDGMENT.—(i) Procedures under which

25 a signed acknowledgment of paternity is consid-
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1 ered a legal finding of paternity, subject to the

2 right of any signatory to rescind the acknowl3 edgment within 60 days.

4 ‘‘(ii)(I) Procedures under which, after the

5 60-day period referred to in clause (i), a signed

6 acknowledgment of paternity may be challenged

7 in court only on the basis of fraud, duress, or

8 material mistake of fact, with the burden of

9 proof upon the challenger, and under which the

10 legal responsibilities (including child support

11 obligations) of any signatory arising from the

12 acknowledgment may not be suspended during

13 the challenge, except for good cause shown.

14 ‘‘(II) Procedures under which, after the

15 60-day period referred to in clause (i), a minor

16 who signs an acknowledgment of paternity

17 other than in the presence of a parent or court18 appointed guardian ad litem may rescind the

19 acknowledgment in a judicial or administrative

20 proceeding, until the earlier of—

21 ‘‘(aa) attaining the age of majority; or

22 ‘‘(bb) the date of the first judicial or

23 administrative proceeding brought (after

24 the signing) to establish a child support

25 obligation, visitation rights, or custody
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1 rights with respect to the child whose pa2 ternity is the subject of the acknowledg3 ment, and at which the minor is rep4 resented by a parent, guardian ad litem, or

5 attorney.’’;

6 (5) by striking subparagraph (E) and inserting

7 the following:

8 ‘‘(E) BAR ON ACKNOWLEDGMENT RATIFI9 CATION PROCEEDINGS.—Procedures under

10 which no judicial or administrative proceedings

11 are required or permitted to ratify an unchal12 lenged acknowledgment of paternity.’’;

13 (6) by striking subparagraph (F) and inserting

14 the following:

15 ‘‘(F) ADMISSIBILITY OF GENETIC TESTING

16 RESULTS.—Procedures—

17 ‘‘(i) requiring that the State admit

18 into evidence, for purposes of establishing

19 paternity, results of any genetic test that

20 is—

21 ‘‘(I) of a type generally acknowl22 edged, by accreditation bodies des23 ignated by the Secretary, as reliable

24 evidence of paternity; and
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1 ‘‘(II) performed by a laboratory

2 approved by such an accreditation

3 body;

4 ‘‘(ii) that any objection to genetic

5 testing results must be made in writing not

6 later than a specified number of days be7 fore any hearing at which such results may

8 be introduced into evidence (or, at State

9 option, not later than a specified number

10 of days after receipt of such results); and

11 ‘‘(iii) that, if no objection is made, the

12 test results are admissible as evidence of

13 paternity without the need for foundation

14 testimony or other proof of authenticity or

15 accuracy.’’; and

16 (7) by adding after subparagraph (H) the

17 following new subparagraphs:

18 ‘‘(I) NO RIGHT TO JURY TRIAL.—Proce19 dures providing that the parties to an action to

20 establish paternity are not entitled to jury trial.

21 ‘‘(J) TEMPORARY SUPPORT ORDER BASED

22 ON PROBABLE PATERNITY IN CONTESTED

23 CASES.—Procedures which require that a tem24 porary order be issued, upon motion by a party,

25 requiring the provision of child support pending
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1 an administrative or judicial determination of

2 parentage, where there is clear and convincing

3 evidence of paternity (on the basis of genetic

4 tests or other evidence).

5 ‘‘(K) PROOF OF CERTAIN SUPPORT AND

6 PATERNITY ESTABLISHMENT COSTS.—Proce7 dures under which bills for pregnancy, child8 birth, and genetic testing are admissible as evi9 dence without requiring third-party foundation

10 testimony, and shall constitute prima facie evi11 dence of amounts incurred for such services and

12 testing on behalf of the child.

13 ‘‘(L) WAIVER OF STATE DEBTS FOR CO14 OPERATION.—At the option of the State, proce15 dures under which the tribunal establishing pa16 ternity and support has discretion to waive

17 rights to all or part of amounts owed to the

18 State (but not to the mother) for costs related

19 to pregnancy, childbirth, and genetic testing

20 and for public assistance paid to the family

21 where the father cooperates or acknowledges

22 paternity before or after genetic testing.

23 ‘‘(M) STANDING OF PUTATIVE FATHERS.—

24 Procedures ensuring that the putative father
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1 has a reasonable opportunity to initiate a pater2 nity action.’’.

3 (b) NATIONAL PATERNITY ACKNOWLEDGMENT AFFI4 DAVIT.—Section 452(a)(7) (42 U.S.C. 652(a)(7)) is

5 amended by inserting ‘‘, and develop an affidavit to be

6 used for the voluntary acknowledgment of paternity which

7 shall include the social security account number of each

8 parent’’ before the semicolon.

9 (c) TECHNICAL AMENDMENT.—Section 468 (42

10 U.S.C. 668) is amended by striking ‘‘a simple civil process

11 for voluntarily acknowledging paternity and’’.

12 SEC. 447. OUTREACH FOR VOLUNTARY PATERNITY ESTAB13 LISHMENT.

14 (a) STATE PLAN REQUIREMENT.—Section 454(23)

15 (42 U.S.C. 654(23)) is amended by adding at the end the

16 following new subparagraph:

17 ‘‘(C) publicize the availability and encour18 age the use of procedures for voluntary estab19 lishment of paternity and child support through

20 a variety of means, which—

21 ‘‘(i) include distribution of written

22 materials at health care facilities (includ23 ing hospitals and clinics), and other loca24 tions such as schools;
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1 ‘‘(ii) may include pre-natal programs

2 to educate expectant couples on individual

3 and joint rights and responsibilities with

4 respect to paternity (and may require all

5 expectant recipients of assistance under

6 part A to participate in such pre-natal pro7 grams, as an element of cooperation with

8 efforts to establish paternity and child sup9 port);

10 ‘‘(iii) include, with respect to each

11 child discharged from a hospital after birth

12 for whom paternity or child support has

13 not been established, reasonable follow-up

14 efforts (including at least one contact of

15 each parent whose whereabouts are known,

16 except where there is reason to believe

17 such follow-up efforts would put mother or

18 child at risk), providing—

19 ‘‘(I) in the case of a child for

20 whom paternity has not been estab21 lished, information on the benefits of

22 and procedures for establishing pater23 nity; and

24 ‘‘(II) in the case of a child for

25 whom paternity has been established
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1 but child support has not been estab2 lished, information on the benefits of

3 and procedures for establishing a

4 child support order, and an applica5 tion for child support services;’’.

6 (b) ENHANCED FEDERAL MATCHING.—Section

7 455(a)(1)(C) (42 U.S.C. 655(a)(1)(C)) is amended—

8 (1) by inserting ‘‘(i)’’ before ‘‘laboratory costs’’,

9 and

10 (2) by inserting before the semicolon ‘‘, and (ii)

11 costs of outreach programs designed to encourage

12 voluntary acknowledgment of paternity’’.

13 (c) EFFECTIVE DATES.—(1) The amendments made

14 by subsection (a) shall become effective October 1, 1997.

15 (2) The amendments made by subsection (b) shall be

16 effective with respect to calendar quarters beginning on

17 and after October 1, 1996.

18 Subtitle F—Establishment and

19 Modification of Support Orders

20 SEC. 451. NATIONAL CHILD SUPPORT GUIDELINES COMMIS21 SION.

22 (a) ESTABLISHMENT.—There is hereby established a

23 commission to be known as the ‘‘National Child Support

24 Guidelines Commission’’ (in this section referred to as the

25 ‘‘Commission’’).
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1 (b) GENERAL DUTIES.—The Commission shall de2 velop a national child support guideline for consideration

3 by the Congress that is based on a study of various guide4 line models, the benefits and deficiencies of such models,

5 and any needed improvements.

6 (c) MEMBERSHIP.—

7 (1) NUMBER; APPOINTMENT.—

8 (A) IN GENERAL.—The Commission shall

9 be composed of 12 individuals appointed jointly

10 by the Secretary of Health and Human Services

11 and the Congress, not later than January 15,

12 1997, of which—

13 (i) 2 shall be appointed by the Chair14 man of the Committee on Finance of the

15 Senate, and 1 shall be appointed by the

16 ranking minority member of the Commit17 tee;

18 (ii) 2 shall be appointed by the Chair19 man of the Committee on Ways and Means

20 of the House of Representatives, and 1

21 shall be appointed by the ranking minority

22 member of the Committee; and

23 (iii) 6 shall be appointed by the Sec24 retary of Health and Human Services.
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1 (B) QUALIFICATIONS OF MEMBERS.—

2 Members of the Commission shall have exper3 tise and experience in the evaluation and devel4 opment of child support guidelines. At least 1

5 member shall represent advocacy groups for

6 custodial parents, at least 1 member shall rep7 resent advocacy groups for noncustodial par8 ents, and at least 1 member shall be the direc9 tor of a State program under part D of title IV

10 of the Social Security Act.

11 (2) TERMS OF OFFICE.—Each member shall be

12 appointed for a term of 2 years. A vacancy in the

13 Commission shall be filled in the manner in which

14 the original appointment was made.

15 (d) COMMISSION POWERS, COMPENSATION, ACCESS

16 TO INFORMATION, AND SUPERVISION.—The first sentence

17 of subparagraph (C), the first and third sentences of sub18 paragraph (D), subparagraph (F) (except with respect to

19 the conduct of medical studies), clauses (ii) and (iii) of

20 subparagraph (G), and subparagraph (H) of section

21 1886(e)(6) of the Social Security Act shall apply to the

22 Commission in the same manner in which such provisions

23 apply to the Prospective Payment Assessment Commis24 sion.
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1 (e) REPORT.—Not later than 2 years after the ap2 pointment of members, the Commission shall submit to

3 the President, the Committee on Ways and Means of the

4 House of Representatives, and the Committee on Finance

5 of the Senate, a recommended national child support

6 guideline and a final assessment of issues relating to such

7 a proposed national child support guideline.

8 (f) TERMINATION.—The Commission shall terminate

9 6 months after the submission of the report described in

10 subsection (e).

11 SEC. 452. SIMPLIFIED PROCESS FOR REVIEW AND ADJUST12 MENT OF CHILD SUPPORT ORDERS.

13 (a) IN GENERAL.—Section 466(a)(10) (42 U.S.C.

14 666(a)(10)) is amended to read as follows:

15 ‘‘(10) PROCEDURES FOR MODIFICATION OF

16 SUPPORT ORDERS.—

17 ‘‘(A)(i) Procedures under which—

18 ‘‘(I) every 3 years, at the request of

19 either parent subject to a child support

20 order, the State shall review and, as appro21 priate, adjust the order in accordance with

22 the guidelines established under section

23 467(a) if the amount of the child support

24 award under the order differs from the

25 amount that would be awarded in accord-
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1 ance with such guidelines, without a re2 quirement for any other change in cir3 cumstances; and

4 ‘‘(II) upon request at any time of ei5 ther parent subject to a child support

6 order, the State shall review and, as appro7 priate, adjust the order in accordance with

8 the guidelines established under section

9 467(a) based on a substantial change in

10 the circumstances of either such parent.

11 ‘‘(ii) Such procedures shall require both

12 parents subject to a child support order to be

13 notified of their rights and responsibilities pro14 vided for under clause (i) at the time the order

15 is issued and in the annual information ex16 change form provided under subparagraph (B).

17 ‘‘(B) Procedures under which each child

18 support order issued or modified in the State

19 after the effective date of this subparagraph

20 shall require the parents subject to the order to

21 provide each other with a complete statement of

22 their respective financial condition annually on

23 a form which shall be established by the Sec24 retary and provided by the State. The Secretary
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1 shall establish regulations for the enforcement

2 of such exchange of information.’’.

3 Subtitle G—Enforcement of

4 Support Orders

5 SEC. 461. FEDERAL INCOME TAX REFUND OFFSET.

6 (a) CHANGED ORDER OF REFUND DISTRIBUTION

7 UNDER INTERNAL REVENUE CODE.—Section 6402(c) of

8 the Internal Revenue Code of 1986 is amended by striking

9 the 3rd sentence.

10 (b) ELIMINATION OF DISPARITIES IN TREATMENT

11 OF ASSIGNED AND NON-ASSIGNED ARREARAGES.—(1)

12 Section 464(a) (42 U.S.C. 664(a)) is amended—

13 (A) by striking ‘‘(a)’’ and inserting ‘‘(a) OFF14 SET AUTHORIZED.—’’;

15 (B) in paragraph (1)—

16 (i) in the first sentence, by striking ‘‘which

17 has been assigned to such State pursuant to

18 section 402(a)(26) or section 471(a)(17)’’; and

19 (ii) in the second sentence, by striking ‘‘in

20 accordance with section 457 (b)(4) or (d)(3)’’

21 and inserting ‘‘as provided in paragraph (2)’’;

22 (C) in paragraph (2), to read as follows:

23 ‘‘(2) The State agency shall distribute amounts

24 paid by the Secretary of the Treasury pursuant to

25 paragraph (1)—
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1 ‘‘(A) in accordance with section 457 (a)(4)

2 or (d)(3), in the case of past-due support as3 signed to a State pursuant to section

4 402(a)(26) or section 471(a)(17); and

5 ‘‘(B) to or on behalf of the child to whom

6 the support was owed, in the case of past-due

7 support not so assigned.’’;

8 (D) in paragraph (3)—

9 (i) by striking ‘‘or (2)’’ each place it ap10 pears; and

11 (ii) in subparagraph (B), by striking

12 ‘‘under paragraph (2)’’ and inserting ‘‘on ac13 count of past-due support described in para14 graph (2)(B)’’.

15 (2) Section 464(b) (42 U.S.C. 664(b)) is

16 amended—

17 (A) by striking ‘‘(b)(1)’’ and inserting ‘‘(b)

18 REGULATIONS.—’’; and

19 (B) by striking paragraph (2).

20 (3) Section 464(c) (42 U.S.C. 664(c)) is

21 amended—

22 (A) by striking ‘‘(c)(1) Except as provided

23 in paragraph (2), as’’ and inserting ‘‘(c) DEFI24 NITION.—As’’; and

25 (B) by striking paragraphs (2) and (3).
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1 (c) TREATMENT OF LUMP-SUM TAX REFUND

2 UNDER AFDC.—

3 (1) EXEMPTION FROM LUMP-SUM RULE.—Sec4 tion 402(a)(17) (42 U.S.C. 602(a)(17)) is amended

5 by adding at the end the following: ‘‘but this para6 graph shall not apply to income received by a family

7 that is attributable to a child support obligation

8 owed with respect to a member of the family and

9 that is paid to the family from amounts withheld

10 from a Federal income tax refund otherwise payable

11 to the person owing such obligation, to the extent

12 that such income is placed in a qualified asset ac13 count (as defined in section 406(j)) the total

14 amounts in which, after such placement, does not

15 exceed $10,000;’’.

16 (2) QUALIFIED ASSET ACCOUNT DEFINED.—

17 Section 406 (42 U.S.C. 606), as amended by section

18 402(g)(2) of this Act, is amended by adding at the

19 end the following:

20 ‘‘(j)(1) The term ‘qualified asset account’ means a

21 mechanism approved by the State (such as individual re22 tirement accounts, escrow accounts, or savings bonds) that

23 allows savings of a family receiving aid to families with

24 dependent children to be used for qualified distributions.
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1 ‘‘(2) The term ‘qualified distribution’ means a dis2 tribution from a qualified asset account for expenses di3 rectly related to 1 or more of the following purposes:

4 ‘‘(A) The attendance of a member of the family

5 at any education or training program.

6 ‘‘(B) The improvement of the employability (in7 cluding self-employment) of a member of the family

8 (such as through the purchase of an automobile).

9 ‘‘(C) The purchase of a home for the family.

10 ‘‘(D) A change of the family residence.’’.

11 (d) EFFECTIVE DATE.—The amendments made by

12 this section shall become effective October 1, 1999.

13 SEC. 462. INTERNAL REVENUE SERVICE COLLECTION OF

14 ARREARS.

15 (a) AMENDMENT TO INTERNAL REVENUE CODE.—

16 Section 6305(a) of the Internal Revenue Code of 1986 is

17 amended—

18 (1) in paragraph (1), by inserting ‘‘except as

19 provided in paragraph (5)’’ after ‘‘collected’’;

20 (2) by striking ‘‘and’’ at the end of paragraph

21 (3);

22 (3) by striking the period at the end of para23 graph (4) and inserting a comma;

24 (4) by adding after paragraph (4) the following

25 new paragraph:
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1 ‘‘(5) no additional fee may be assessed for ad2 justments to an amount previously certified pursu3 ant to such section 452(b) with respect to the same

4 obligor.’’; and

5 (5) by striking ‘‘Secretary of Health, Edu6 cation, and Welfare’’ each place it appears and in7 serting ‘‘Secretary of Health and Human Services’’.

8 (b) EFFECTIVE DATE.—The amendments made by

9 this section shall become effective October 1, 1997.

10 SEC. 463. AUTHORITY TO COLLECT SUPPORT FROM FED11 ERAL EMPLOYEES.

12 (a) CONSOLIDATION AND STREAMLINING OF AU13 THORITIES.—

14 (1) Section 459 (42 U.S.C. 659) is amended in

15 the caption by inserting ‘‘INCOME WITHHOLDING,’’

16 before ‘‘GARNISHMENT’’.

17 (2) Section 459(a) (42 U.S.C. 659(a)) is

18 amended—

19 (A) by striking ‘‘(a)’’ and inserting ‘‘(a)

20 CONSENT TO SUPPORT ENFORCEMENT.—

21 (B) by striking ‘‘section 207’’ and insert22 ing ‘‘section 207 of this Act and 38 U.S.C.

23 5301’’; and

24 (C) by striking all that follows ‘‘a private

25 person,’’ and inserting ‘‘to withholding in ac-
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1 cordance with State law pursuant to subsections

2 (a)(1) and (b) of section 466 and regulations of

3 the Secretary thereunder, and to any other legal

4 process brought, by a State agency administer5 ing a program under this part or by an individ6 ual obligee, to enforce the legal obligation of

7 such individual to provide child support or ali8 mony.’’.

9 (3) Section 459(b) (42 U.S.C. 659(b)) is

10 amended to read as follows:

11 ‘‘(b) CONSENT TO REQUIREMENTS APPLICABLE TO

12 PRIVATE PERSON.— Except as otherwise provided herein,

13 each entity specified in subsection (a) shall be subject,

14 with respect to notice to withhold income pursuant to sub15 section (a)(1) or (b) of section 466, or to any other order

16 or process to enforce support obligations against an indi17 vidual (if such order or process contains or is accompanied

18 by sufficient data to permit prompt identification of the

19 individual and the moneys involved), to the same require20 ments as would apply if such entity were a private per21 son.’’.

22 (4) Section 459(c) (42 U.S.C. 659(c)) is redes23 ignated and relocated as paragraph (2) of subsection

24 (f), and is amended—
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1 (A) by striking ‘‘responding to interrog2 atories pursuant to requirements imposed by

3 section 461(b)(3)’’ and inserting ‘‘taking ac4 tions necessary to comply with the requirements

5 of subsection (A) with regard to any individ6 ual’’; and

7 (B) by striking ‘‘any of his duties’’ and all

8 that follows and inserting ‘‘such duties.’’.

9 (5) Section 461 (42 U.S.C. 661) is amended by

10 striking subsection (b), and section 459 (42 U.S.C.

11 659) is amended by inserting after subsection (b)

12 (as added by paragraph (3) of this subsection) the

13 following:

14 ‘‘(c) DESIGNATION OF AGENT; RESPONSE TO NOTICE

15 OR PROCESS.—(1) The head of each agency subject to the

16 requirements of this section shall—

17 ‘‘(A) designate an agent or agents to receive or18 ders and accept service of process; and

19 ‘‘(B) publish (i) in the appendix of such regula20 tions, (ii) in each subsequent republication of such

21 regulations, and (iii) annually in the Federal Reg22 ister, the designation of such agent or agents, identi23 fied by title of position, mailing address, and tele24 phone number.’’.
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1 (6) Section 459 (42 U.S.C. 659) is amended by

2 striking subsection (d) and by inserting after sub3 section (c)(1) (as added by paragraph (5) of this

4 subsection) the following:

5 ‘‘(2) Whenever an agent designated pursuant to para6 graph (1) receives notice pursuant to subsection (a)(1) or

7 (b) of section 466, or is effectively served with any order,

8 process, or interrogatories, with respect to an individual’s

9 child support or alimony payment obligations, such agent

10 shall—

11 ‘‘(A) as soon as possible (but not later than fif12 teen days) thereafter, send written notice of such no13 tice or service (together with a copy thereof) to such

14 individual at his duty station or last-known home

15 address;

16 ‘‘(B) within 30 days (or such longer period as

17 may be prescribed by applicable State law) after re18 ceipt of a notice pursuant to subsection (a)(1) or (b)

19 of section 466, comply with all applicable provisions

20 of such section 466; and

21 ‘‘(C) within 30 days (or such longer period as

22 may be prescribed by applicable State law) after ef23 fective service of any other such order, process, or

24 interrogatories, respond thereto.’’.
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1 (7) Section 461 (42 U.S.C. 661) is amended by

2 striking subsection (c), and section 459 (42 U.S.C.

3 659) is amended by inserting after subsection (c) (as

4 added by paragraph (5) and amended by paragraph

5 (6) of this subsection) the following:

6 ‘‘(d) PRIORITY OF CLAIMS.—In the event that a gov7 ernmental entity receives notice or is served with process,

8 as provided in this section, concerning amounts owed by

9 an individual to more than one person—

10 ‘‘(1) support collection under section 466(b)

11 must be given priority over any other process, as

12 provided in section 466(b)(7);

13 ‘‘(2) allocation of moneys due or payable to an

14 individual among claimants under section 466(b)

15 shall be governed by the provisions of such section

16 466(b) and regulations thereunder; and

17 ‘‘(3) such moneys as remain after compliance

18 with subparagraphs (A) and (B) shall be available to

19 satisfy any other such processes on a first-come,

20 first-served basis, with any such process being satis21 fied out of such moneys as remain after the satisfac22 tion of all such processes which have been previously

23 served.’’.
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1 (8) Section 459(e) (42 U.S.C. 659(e)) is

2 amended by striking ‘‘(e)’’ and inserting the follow3 ing:

4 ‘‘(e) NO REQUIREMENT TO VARY PAY CYCLES.—’’.

5 (9) Section 459(f) (42 U.S.C. 659(f)) is amend6 ed by striking ‘‘(f)’’ and inserting the following:

7 ‘‘(f) RELIEF FROM LIABILITY.—(1)’’.

8 (10) Section 461(a) (42 U.S.C. 661(a)) is re9 designated and relocated as section 459(g), and is

10 amended—

11 (A) by striking ‘‘(g)’’ and inserting the fol12 lowing:

13 ‘‘(g) REGULATIONS.—’’; and

14 (B) by striking ‘‘section 459’’ and insert15 ing ‘‘this section’’.

16 (11) Section 462 (42 U.S.C. 662) is amended

17 by striking subsection (f), and section 459 (42

18 U.S.C. 659) is amended by inserting the following

19 after subsection (g) (as added by paragraph (10) of

20 this subsection):

21 ‘‘(h) MONEYS SUBJECT TO PROCESS.—(1) Subject to

22 subsection (i), moneys paid or payable to an individual

23 which are considered to be based upon remuneration for

24 employment, for purposes of this section—

25 ‘‘(A) consist of—
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1 ‘‘(i) compensation paid or payable for per2 sonal services of such individual, whether such

3 compensation is denominated as wages, salary,

4 commission, bonus, pay, allowances, or other5 wise (including severance pay, sick pay, and in6 centive pay);

7 ‘‘(ii) periodic benefits (including a periodic

8 benefit as defined in section 228(h)(3)) or other

9 payments—

10 ‘‘(I) under the insurance system es11 tablished by title II;

12 ‘‘(II) under any other system or fund

13 established by the United States which

14 provides for the payment of pensions, re15 tirement or retired pay, annuities, depend16 ents’ or survivors’ benefits, or similar

17 amounts payable on account of personal

18 services performed by the individual or any

19 other individual;

20 ‘‘(III) as compensation for death

21 under any Federal program;

22 ‘‘(IV) under any Federal program es23 tablished to provide ‘black lung’ benefits;

24 or
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1 ‘‘(V) by the Secretary of Veterans Af2 fairs as pension, or as compensation for a

3 service-connected disability or death (ex4 cept any compensation paid by such Sec5 retary to a former member of the Armed

6 Forces who is in receipt of retired or re7 tainer pay if such former member has

8 waived a portion of his retired pay in order

9 to receive such compensation); and

10 ‘‘(iii) worker’s compensation benefits paid

11 under Federal or State law; but

12 ‘‘(B) do not include any payment—

13 ‘‘(i) by way of reimbursement or otherwise,

14 to defray expenses incurred by such individual

15 in carrying out duties associated with his em16 ployment; or

17 ‘‘(ii) as allowances for members of the uni18 formed services payable pursuant to chapter 7

19 of title 37, United States Code, as prescribed

20 by the Secretaries concerned (defined by section

21 101(5) of such title) as necessary for the effi22 cient performance of duty.’’.

23 (12) Section 462(g) (42 U.S.C. 662(g)) is re24 designated and relocated as section 459(i) (42

25 U.S.C. 659(i)).
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1 (13)(A) Section 462 (42 U.S.C. 662) is amend2 ed—

3 (i) in subsection (e)(1), by redesignating

4 subparagraphs (A), (B), and (C) as clauses (i),

5 (ii), and (iii); and

6 (ii) in subsection (e), by redesignating

7 paragraphs (1) and (2) as subparagraphs (A)

8 and (B).

9 (B) Section 459 (42 U.S.C. 659) is amended by

10 adding at the end the following:

11 ‘‘(j) DEFINITIONS.—For purposes of this sec12 tion—’’.

13 (C) Subsections (a) through (e) of section 462

14 (42 U.S.C. 662), as amended by subparagraph (A)

15 of this paragraph, are relocated and redesignated as

16 paragraphs (1) through (4), respectively of section

17 459(j) (as added by subparagraph (B) of this para18 graph, (42 U.S.C. 659(j)), and the left margin of

19 each of such paragraphs (1) through (4) is indented

20 2 ems to the right of the left margin of subsection

21 (i) (as added by paragraph (12) of this subsection).

22 (b) CONFORMING AMENDMENTS.—

23 (1) TO PART D OF TITLE IV.—Sections 461 and

24 462 (42 U.S.C. 661), as amended by subsection (a)

25 of this section, are repealed.
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1 (2) TO TITLE 5, UNITED STATES CODE.—Sec2 tion 5520a of title 5, United States Code, is amend3 ed, in subsections (h)(2) and (i), by striking ‘‘sec4 tions 459, 461, and 462 of the Social Security Act

5 (42 U.S.C. 659, 661, and 662)’’ and inserting ‘‘sec6 tion 459 of the Social Security Act (42 U.S.C.

7 659)’’.

8 (c) MILITARY RETIRED AND RETAINER PAY.—(1)

9 DEFINITION OF COURT.—Section 1408(a)(1) of title 10,

10 United States Code, is amended—

11 (A) by striking ‘‘and’’ at the end of subpara12 graph (B);

13 (B) by striking the period at the end of sub14 paragraph (C) and inserting ‘‘; and’’; and

15 (C) by adding after subparagraph (C) the fol16 lowing new paragraph:

17 ‘‘(D) any administrative or judicial tribu18 nal of a State competent to enter orders for

19 support or maintenance (including a State

20 agency administering a State program under

21 part D of title IV of the Social Security Act).’’;

22 (2) DEFINITION OF COURT ORDER.—Section

23 1408(a)(2) of such title is amended by inserting ‘‘or a

24 court order for the payment of child support not included
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1 in or accompanied by such a decree or settlement,’’ before

2 ‘‘which—’’.

3 (3) PUBLIC PAYEE.—Section 1408(d) of such title is

4 amended—

5 (A) in the heading, by striking ‘‘to spouse’’ and

6 inserting ‘‘to (or for benefit of)’’; and

7 (B) in paragraph (1), in the first sentence, by

8 inserting ‘‘(or for the benefit of such spouse or

9 former spouse to a State central collections unit or

10 other public payee designated by a State, in accord11 ance with part D of title IV of the Social Security

12 Act, as directed by court order, or as otherwise di13 rected in accordance with such part D)’’ before ‘‘in

14 an amount sufficient’’.

15 (4) RELATIONSHIP TO PART D OF TITLE IV.—Sec16 tion 1408 of such title is amended by adding at the end

17 the following new subsection:

18 ‘‘(j) RELATIONSHIP TO OTHER LAWS.—In any case

19 involving a child support order against a member who has

20 never been married to the other parent of the child, the

21 provisions of this section shall not apply, and the case

22 shall be subject to the provisions of section 459 of the

23 Social Security Act.’’.
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall become effective 6 months after the date

3 of the enactment of this Act.

4 SEC. 464. ENFORCEMENT OF CHILD SUPPORT OBLIGA5 TIONS OF MEMBERS OF THE ARMED FORCES.

6 (a) AVAILABILITY OF LOCATOR INFORMATION.—

7 (1) MAINTENANCE OF ADDRESS INFORMA8 TION.—The Secretary of Defense shall establish a

9 centralized personnel locator service that includes

10 the address of each member of the Armed Forces

11 under the jurisdiction of the Secretary. Upon re12 quest of the Secretary of Transportation, addresses

13 for members of the Coast Guard shall be included in

14 the centralized personnel locator service.

15 (2) TYPE OF ADDRESS.—

16 (A) RESIDENTIAL ADDRESS.—Except as

17 provided in subparagraph (B), the address for

18 a member of the Armed Forces shown in the lo19 cator service shall be the residential address of

20 that member.

21 (B) DUTY ADDRESS.—The address for a

22 member of the Armed Forces shown in the loca23 tor service shall be the duty address of that

24 member in the case of a member—
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1 (i) who is permanently assigned over2 seas, to a vessel, or to a routinely

3 deployable unit; or

4 (ii) with respect to whom the Sec5 retary concerned makes a determination

6 that the member’s residential address

7 should not be disclosed due to national se8 curity or safety concerns.

9 (3) UPDATING OF LOCATOR INFORMATION.—

10 Within 30 days after a member listed in the locator

11 service establishes a new residential address (or a

12 new duty address, in the case of a member covered

13 by paragraph (2)(B)), the Secretary concerned shall

14 update the locator service to indicate the new ad15 dress of the member.

16 (4) AVAILABILITY OF INFORMATION.—The Sec17 retary of Defense shall make information regarding

18 the address of a member of the Armed Forces listed

19 in the locator service available, on request, to the

20 Federal Parent Locator Service.

21 (b) FACILITATING GRANTING OF LEAVE FOR AT22 TENDANCE AT HEARINGS.—

23 (1) REGULATIONS.—The Secretary of each

24 military department, and the Secretary of Transpor25 tation with respect to the Coast Guard when it is
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1 not operating as a service in the Navy, shall pre2 scribe regulations to facilitate the granting of leave

3 to a member of the Armed Forces under the juris4 diction of that Secretary in a case in which—

5 (A) the leave is needed for the member to

6 attend a hearing described in paragraph (2);

7 (B) the member is not serving in or with

8 a unit deployed in a contingency operation (as

9 defined in section 101 of title 10, United States

10 Code); and

11 (C) the exigencies of military service (as

12 determined by the Secretary concerned) do not

13 otherwise require that such leave not be

14 granted.

15 (2) COVERED HEARINGS.—Paragraph (1) ap16 plies to a hearing that is conducted by a court or

17 pursuant to an administrative process established

18 under State law, in connection with a civil action—

19 (A) to determine whether a member of the

20 Armed Forces is a natural parent of a child; or

21 (B) to determine an obligation of a mem22 ber of the Armed Forces to provide child sup23 port.

24 (3) DEFINITIONS.—For purposes of this sub25 section:
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1 (A) The term ‘‘court’’ has the meaning

2 given that term in section 1408(a) of title 10,

3 United States Code.

4 (B) The term ‘‘child support’’ has the

5 meaning given such term in section 462 of the

6 Social Security Act (42 U.S.C. 662).

7 (c) PAYMENT OF MILITARY RETIRED PAY IN COM8 PLIANCE WITH CHILD SUPPORT ORDERS.—

9 (1) DATE OF CERTIFICATION OF COURT

10 ORDER.—Section 1408 of title 10, United States

11 Code, is amended—

12 (A) by redesignating subsection (i) as sub13 section (j); and

14 (B) by inserting after subsection (h) the

15 following new subsection (i):

16 ‘‘(i) CERTIFICATION DATE.—It is not necessary that

17 the date of a certification of the authenticity or complete18 ness of a copy of a court order or an order of an adminis19 trative process established under State law for child sup20 port received by the Secretary concerned for the purposes

21 of this section be recent in relation to the date of receipt

22 by the Secretary.’’.

23 (2) PAYMENTS CONSISTENT WITH ASSIGN24 MENTS OF RIGHTS TO STATES.—Section 1408(d)(1)

25 of such title is amended by inserting after the first
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1 sentence the following: ‘‘In the case of a spouse or

2 former spouse who, pursuant to section 402(a)(26)

3 of the Social Security Act (42 U.S.C. 602(26)), as4 signs to a State the rights of the spouse or former

5 spouse to receive support, the Secretary concerned

6 may make the child support payments referred to

7 in the preceding sentence to that State in amounts

8 consistent with that assignment of rights.’’.

9 (3) ARREARAGES OWED BY MEMBERS OF THE

10 UNIFORMED SERVICES.—Section 1408(d) of such

11 title is amended by adding at the end the following

12 new paragraph:

13 ‘‘(6) In the case of a court order or an order of an

14 administrative process established under State law for

15 which effective service is made on the Secretary concerned

16 on or after the date of the enactment of this paragraph

17 and which provides for payments from the disposable re18 tired pay of a member to satisfy the amount of child sup19 port set forth in the order, the authority provided in para20 graph (1) to make payments from the disposable retired

21 pay of a member to satisfy the amount of child support

22 set forth in a court order or an order of an administrative

23 process established under State law shall apply to payment

24 of any amount of child support arrearages set forth in that
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1 order as well as to amounts of child support that currently

2 become due.’’.

3 SEC. 465. MOTOR VEHICLE LIENS.

4 Section 466(a)(4) (42 U.S.C. 666(a)(4)) is amend5 ed—

6 (1) by striking ‘‘(4) Procedures’’ and inserting

7 the following:

8 ‘‘(4) LIENS.—

9 ‘‘(A) IN GENERAL.—Procedures’’; and

10 (2) by adding at the end the following new sub11 paragraph:

12 ‘‘(B) MOTOR VEHICLE LIENS.—Procedures

13 for placing liens for arrears of child support on

14 motor vehicle titles of individuals owing such

15 arrears equal to or exceeding two months of

16 support, under which—

17 ‘‘(i) any person owed such arrears

18 may place such a lien;

19 ‘‘(ii) the State agency administering

20 the program under this part shall system21 atically place such liens;

22 ‘‘(iii) expedited methods are provided

23 for—

24 ‘‘(I) ascertaining the amount of

25 arrears;
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1 ‘‘(II) affording the person owing

2 the arrears or other titleholder to con3 test the amount of arrears or to ob4 tain a release upon fulfilling the sup5 port obligation;

6 ‘‘(iv) such a lien has precedence over

7 all other encumbrances on a vehicle title

8 other than a purchase money security in9 terest; and

10 ‘‘(v) the individual or State agency

11 owed the arrears may execute on, seize,

12 and sell the property in accordance with

13 State law.’’.

14 SEC. 466. VOIDING OF FRAUDULENT TRANSFERS.

15 Section 466(a) (42 U.S.C. 666(a)), as amended by

16 sections 401(a), 426(a), 431, and 442 of this Act, is

17 amended by inserting after paragraph (15) the following:

18 ‘‘(16) FRAUDULENT TRANSFERS.—Procedures

19 under which—

20 ‘‘(A) the State has in effect—

21 ‘‘(i) the Uniform Fraudulent Convey22 ance Act of 1981,

23 ‘‘(ii) the Uniform Fraudulent Trans24 fer Act of 1984, or
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1 ‘‘(iii) another law, specifying indicia of

2 fraud which create a prima facie case that

3 a debtor transferred income or property to

4 avoid payment to a child support creditor,

5 which the Secretary finds affords com6 parable rights to child support creditors;

7 and

8 ‘‘(B) in any case in which the State knows

9 of a transfer by a child support debtor with re10 spect to which such a prima facie case is estab11 lished, the State must—

12 ‘‘(i) seek to void such transfer; or

13 ‘‘(ii) obtain a settlement in the best

14 interests of the child support creditor.’’.

15 SEC. 467. STATE LAW AUTHORIZING SUSPENSION OF LI16 CENSES.

17 Section 466(a) (42 U.S.C. 666(a)), as amended by

18 sections 401(a), 426(a), 431, 442, and 466 of this Act,

19 is amended by inserting after paragraph (16) the follow20 ing:

21 ‘‘(17) AUTHORITY TO WITHHOLD OR SUSPEND

22 LICENSES.—Procedures under which the State has

23 (and uses in appropriate cases) authority (subject to

24 appropriate due process safeguards) to withhold or

25 suspend, or to restrict the use of driver’s licenses,
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1 and professional and occupational licenses of individ2 uals owing overdue child support or failing, after re3 ceiving appropriate notice, to comply with subpoenas

4 or warrants relating to paternity or child support

5 proceedings.’’.

6 SEC. 468. REPORTING ARREARAGES TO CREDIT BUREAUS.

7 Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amended

8 to read as follows:

9 ‘‘(7) REPORTING ARREARAGES TO CREDIT BU10 REAUS.—(A) Procedures (subject to safeguards pur11 suant to subparagraph (B)) requiring the State to

12 report periodically to consumer reporting agencies

13 (as defined in section 603(f) of the Fair Credit Re14 porting Act (15 U.S.C. 1681a(f)) the name of any

15 absent parent who is delinquent by 90 days or more

16 in the payment of support, and the amount of over17 due support owed by such parent.

18 ‘‘(B) Procedures ensuring that, in carrying out

19 subparagraph (A), information with respect to an

20 absent parent is reported—

21 ‘‘(i) only after such parent has been af22 forded all due process required under State law,

23 including notice and a reasonable opportunity

24 to contest the accuracy of such information;

25 and
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1 ‘‘(ii) only to an entity that has furnished

2 evidence satisfactory to the State that the en3 tity is a consumer reporting agency.’’.

4 SEC. 469. EXTENDED STATUTE OF LIMITATION FOR COL5 LECTION OF ARREARAGES.

6 (a) AMENDMENTS.—Section 466(a)(9) (42 U.S.C.

7 666(a)(9)) is amended—

8 (1) by striking ‘‘(9) Procedures’’ and inserting

9 the following:

10 ‘‘(9) LEGAL TREATMENT OF ARREARS.—

11 ‘‘(A) FINALITY.—Procedures’’;

12 (2) by redesignating subparagraphs (A), (B),

13 and (C) as clauses (i), (ii), and (iii), respectively,

14 and by indenting each of such clauses 2 additional

15 ems to the right; and

16 (3) by adding after and below subparagraph

17 (A), as redesignated, the following new subpara18 graph:

19 ‘‘(B) STATUTE OF LIMITATIONS.—Proce20 dures under which the statute of limitations on

21 any arrearages of child support extends at least

22 until the child owed such support is 30 years of

23 age.’’.

24 (b) APPLICATION OF REQUIREMENT.—The amend25 ment made by this section shall not be read to require
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1 any State law to revive any payment obligation which had

2 lapsed prior to the effective date of such State law.

3 SEC. 470. CHARGES FOR ARREARAGES.

4 (a) STATE LAW REQUIREMENT.—Section 466(a) (42

5 U.S.C. 666(a)), as amended by sections 401(a), 426(a),

6 431, 442, 466, and 467 of this Act, is amended by insert7 ing after paragraph (17) the following:

8 ‘‘(18) CHARGES FOR ARREARAGES.—Proce9 dures providing for the calculation and collection of

10 interest or penalties for arrearages of child support,

11 and for distribution of such interest or penalties col12 lected for the benefit of the child (except where the

13 right to support has been assigned to the State).’’.

14 (b) REGULATIONS.—The Secretary of Health and

15 Human Services shall establish by regulation a rule to re16 solve choice of law conflicts arising in the implementation

17 of the amendment made by subsection (a).

18 (c) CONFORMING AMENDMENT.—Section 454(21)

19 (42 U.S.C. 654(21)) is repealed.

20 (d) EFFECTIVE DATE.—The amendments made by

21 this section shall be effective with respect to arrearages

22 accruing on or after October 1, 1998.

23 SEC. 471. DENIAL OF PASSPORTS FOR NONPAYMENT OF

24 CHILD SUPPORT.

25 (a) HHS CERTIFICATION PROCEDURE.—
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1 (1) SECRETARIAL RESPONSIBILITY.—Section

2 452 (42 U.S.C. 652), as amended by sections

3 415(a)(3) and 417 of this Act, is amended by adding

4 at the end the following new subsection:

5 ‘‘(l) CERTIFICATIONS FOR PURPOSES OF PASSPORT

6 RESTRICTIONS.—

7 ‘‘(1) IN GENERAL.—Where the Secretary re8 ceives a certification by a State agency in accord9 ance with the requirements of section 454(28) that

10 an individual owes arrearages of child support in an

11 amount exceeding $5,000 or in an amount exceeding

12 24 months’ worth of child support, the Secretary

13 shall transmit such certification to the Secretary of

14 State for action (with respect to denial, revocation,

15 or limitation of passports) pursuant to section

16 471(b) of the Individual Responsibility Act of 1995.

17 ‘‘(2) LIMIT ON LIABILITY.—The Secretary shall

18 not be liable to an individual for any action with re19 spect to a certification by a State agency under this

20 section.’’.

21 (2) STATE CSE AGENCY RESPONSIBILITY.—Sec22 tion 454 (42 U.S.C. 654), as amended by sections

23 404(a), 414(b), and 422(a) of this Act, is amend24 ed—
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1 (A) by striking ‘‘and’’ at the end of para2 graph (26);

3 (B) by striking the period at the end of

4 paragraph (27) and inserting ‘‘; and’’; and

5 (C) by adding after paragraph (27) the fol6 lowing new paragraph:

7 ‘‘(28) provide that the State agency will have in

8 effect a procedure (which may be combined with the

9 procedure for tax refund offset under section 464)

10 for certifying to the Secretary, for purposes of the

11 procedure under section 452(l) (concerning denial of

12 passports) determinations that individuals owe ar13 rearages of child support in an amount exceeding

14 $5,000 or in an amount exceeding 24 months’ worth

15 of child support, under which procedure—

16 ‘‘(A) each individual concerned is afforded

17 notice of such determination and the con18 sequences thereof, and an opportunity to con19 test the determination; and

20 ‘‘(B) the certification by the State agency

21 is furnished to the Secretary in such format,

22 and accompanied by such supporting docu23 mentation, as the Secretary may require.’’.

24 (b) STATE DEPARTMENT PROCEDURE FOR DENIAL

25 OF PASSPORTS.—
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1 (1) IN GENERAL.—The Secretary of State,

2 upon certification by the Secretary of Health and

3 Human Services, in accordance with section 452(l)

4 of the Social Security Act, that an individual owes

5 arrearages of child support in excess of $5,000, shall

6 refuse to issue a passport to such individual, and

7 may revoke, restrict, or limit a passport issued pre8 viously to such individual.

9 (2) LIMIT ON LIABILITY.—The Secretary of

10 State shall not be liable to an individual for any ac11 tion with respect to a certification by a State agency

12 under this section.

13 (c) EFFECTIVE DATE.—This section and the amend14 ments made by this section shall become effective October

15 1, 1996.

16 SEC. 472. INTERNATIONAL CHILD SUPPORT ENFORCE17 MENT.

18 (a) SENSE OF THE CONGRESS THAT THE UNITED

19 STATES SHOULD RATIFY THE UNITED NATIONS CON20 VENTION OF 1956.—It is the sense of the Congress that

21 the United States should ratify the United Nations Con22 vention of 1956.

23 (b) TREATMENT OF INTERNATIONAL CHILD SUP24 PORT CASES AS INTERSTATE CASES.—Section 454 (42
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1 U.S.C. 654), as amended by sections 404(a), 414(b),

2 422(a), and 471(a)(2) of this Act, is amended—

3 (1) by striking ‘‘and’’ at the end of paragraph

4 (27);

5 (2) by striking the period at the end of para6 graph (28) and inserting ‘‘; and’’; and

7 (3) by inserting after paragraph (28) the fol8 lowing:

9 ‘‘(29) provide that the State must treat inter10 national child support cases in the same manner as

11 the State treats interstate child support cases.’’.

12 SEC. 473. SEIZURE OF LOTTERY WINNINGS, SETTLEMENTS,

13 PAYOUTS, AWARDS, AND BEQUESTS, AND

14 SALE OF FORFEITED PROPERTY, TO PAY

15 CHILD SUPPORT ARREARAGES.

16 Section 466(a) (42 U.S.C. 666(a)), as amended by

17 sections 401(a), 426(a), 431, 442, 466, 467, and 470(a)

18 of this Act, is amended by inserting after paragraph (18)

19 the following:

20 ‘‘(19) Procedures, in addition to other income

21 withholding procedures, under which a lien is im22 posed against property with the following effect:

23 ‘‘(A) The distributor of the winnings from

24 a State lottery or State-sanctioned or tribal25 sanctioned gambling house or casino shall—
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1 ‘‘(i) suspend payment of the winnings

2 from the person otherwise entitled to the

3 payment until an inquiry is made to and a

4 response is received from the State child

5 support enforcement agency as to whether

6 the person owes a child support arrearage;

7 and

8 ‘‘(ii) if there is such an arrearage,

9 withhold from the payment the lesser of

10 the amount of the payment or the amount

11 of the arrearage, and pay the amount with12 held to the agency for distribution.

13 ‘‘(B) The person required to make a pay14 ment under a policy of insurance or a settle15 ment of a claim made with respect to the policy

16 shall—

17 ‘‘(i) suspend the payment until an in18 quiry is made to and a response received

19 from the agency as to whether the person

20 otherwise entitled to the payment owes a

21 child support arrearage; and

22 ‘‘(ii) if there is such an arrearage,

23 withhold from the payment the lesser of

24 the amount of the payment or the amount
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1 of the arrearage, and pay the amount with2 held to the agency for distribution.

3 ‘‘(C) The payor of any amount pursuant to

4 an award, judgment, or settlement in any ac5 tion brought in Federal or State court shall—

6 ‘‘(i) suspend the payment of the

7 amount until an inquiry is made to and a

8 response is received from the agency as to

9 whether the person otherwise entitled to

10 the payment owes a child support arrear11 age; and

12 ‘‘(ii) if there is such an arrearage,

13 withhold from the payment the lesser of

14 the amount of the payment or the amount

15 of the arrearage, and pay the amount with16 held to the agency for distribution.

17 ‘‘(D) If the State seizes property forfeited

18 to the State by an individual by reason of a

19 criminal conviction, the State shall—

20 ‘‘(i) hold the property until an inquiry

21 is made to and a response is received from

22 the agency as to whether the individual

23 owes a child support arrearage; and

24 ‘‘(ii) if there is such an arrearage, sell

25 the property and, after satisfying the
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1 claims of all other private or public claim2 ants to the property and deducting from

3 the proceeds of the sale the attendant costs

4 (such as for towing, storage, and the sale),

5 pay the lesser of the remaining proceeds or

6 the amount of the arrearage directly to the

7 agency for distribution.

8 ‘‘(E) Any person required to make a pay9 ment in respect of a decedent shall—

10 ‘‘(i) suspend the payment until an in11 quiry is made to and a response received

12 from the agency as to whether the person

13 otherwise entitled to the payment owes a

14 child support arrearage; and

15 ‘‘(ii) if there is such an arrearage,

16 withhold from the payment the lesser of

17 the amount of the payment or the amount

18 of the arrearage, and pay the amount with19 held to the agency for distribution.’’.

20 SEC. 474. LIABILITY OF GRANDPARENTS FOR FINANCIAL

21 SUPPORT OF CHILDREN OF THEIR MINOR

22 CHILDREN.

23 Section 466(a) (42 U.S.C. 666(a)), as amended by

24 sections 401(a), 426(a), 431, 442, 466, 467, 470(a), and
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1 473 of this Act, is amended by inserting after paragraph

2 (19) the following:

3 ‘‘(20) Procedures under which each parent of

4 an individual who has not attained 18 years of age

5 is liable for the financial support of any child of the

6 individual to the extent that the individual is unable

7 to provide such support. The preceding sentence

8 shall not apply to the State if the State plan explic9 itly provides for such inapplicability.’’.

10 SEC. 475. SENSE OF THE CONGRESS REGARDING PRO11 GRAMS FOR NONCUSTODIAL PARENTS UN12 ABLE TO MEET CHILD SUPPORT OBLIGA13 TIONS.

14 It is the sense of the Congress that the States should

15 develop programs, such as the program of the State of

16 Wisconsin known as the ‘‘Children’s First Program’’, that

17 are designed to work with noncustodial parents who are

18 unable to meet their child support obligations.

19 Subtitle H—Medical Support

20 SEC. 481. TECHNICAL CORRECTION TO ERISA DEFINITION

21 OF MEDICAL CHILD SUPPORT ORDER.

22 (a) IN GENERAL.—Section 609(a)(2)(B) of the Em23 ployee Retirement Income Security Act of 1974 (29

24 U.S.C. 1169(a)(2)(B)) is amended—
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1 (1) by striking ‘‘issued by a court of competent

2 jurisdiction’’;

3 (2) by striking the period at the end of clause

4 (ii) and inserting a comma; and

5 (3) by adding, after and below clause (ii), the

6 following:

7 ‘‘if such judgment, decree, or order (I) is issued

8 by a court of competent jurisdiction or (II) is

9 issued by an administrative adjudicator and has

10 the force and effect of law under applicable

11 State law.’’.

12 (b) EFFECTIVE DATE.—

13 (1) IN GENERAL.—The amendments made by

14 this section shall take effect on the date of the en15 actment of this Act.

16 (2) PLAN AMENDMENTS NOT REQUIRED UNTIL

17 JANUARY 1, 1996.—Any amendment to a plan re18 quired to be made by an amendment made by this

19 section shall not be required to be made before the

20 first plan year beginning on or after January 1,

21 1996, if—

22 (A) during the period after the date before

23 the date of the enactment of this Act and be24 fore such first plan year, the plan is operated
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1 in accordance with the requirements of the

2 amendments made by this section, and

3 (B) such plan amendment applies retro4 actively to the period after the date before the

5 date of the enactment of this Act and before

6 such first plan year.

7 A plan shall not be treated as failing to be operated

8 in accordance with the provisions of the plan merely

9 because it operates in accordance with this para10 graph.

11 SEC. 482. EXTENSION OF MEDICAID ELIGIBILITY FOR FAMI12 LIES LOSING AFDC DUE TO INCREASED

13 CHILD SUPPORT COLLECTIONS.

14 Section 402(a) (42 U.S.C. 602(a)), as amended by

15 the other provisions of this Act, is amended—

16 (1) by striking ‘‘and’’ at the end of paragraph

17 (55);

18 (2) by striking the period at the end of para19 graph (56) and inserting ‘‘; and’’; and

20 (3) by inserting after paragraph (56) the fol21 lowing:

22 ‘‘(57) provide that each member of a family

23 which would be eligible for aid under the State plan

24 but for the receipt of child support payments shall

25 be considered to be receiving such aid for purposes
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1 of eligibility for medical assistance under the State

2 plan approved under title XIX for so long as the

3 family would (but for such receipt) be eligible for

4 such aid.’’.

5 Subtitle I—Effect of Enactment

6 SEC. 491. EFFECTIVE DATES.

7 (a) IN GENERAL.—Except as otherwise specifically

8 provided (but subject to subsections (b) and (c))—

9 (1) provisions of this title requiring enactment

10 or amendment of State laws under section 466 of

11 the Social Security Act, or revision of State plans

12 under section 454 of such Act, shall be effective with

13 respect to periods beginning on and after October 1,

14 1996; and

15 (2) all other provisions of this title shall become

16 effective upon enactment.

17 (b) GRACE PERIOD FOR STATE LAW CHANGES.—The

18 provisions of this title shall become effective with respect

19 to a State on the later of—

20 (1) the date specified in this title, or

21 (2) the effective date of laws enacted by the leg22 islature of such State implementing such provisions,

23 but in no event later than the first day of the first cal24 endar quarter beginning after the close of the first regular

25 session of the State legislature that begins after the date
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1 of enactment of this Act. For purposes of the previous

2 sentence, in the case of a State that has a 2-year legisla3 tive session, each year of such session shall be deemed to

4 be a separate regular session of the State legislature.

5 (c) GRACE PERIOD FOR STATE CONSTITUTIONAL

6 AMENDMENT.—A State shall not be found out of compli7 ance with any requirement enacted by this title if it is

8 unable to comply without amending the State constitution

9 until the earlier of—

10 (1) the date one year after the effective date of

11 the necessary State constitutional amendment, or

12 (2) the date five years after enactment of this

13 title.

14 SEC. 492. SEVERABILITY.

15 If any provision of this title or the application thereof

16 to any person or circumstance is held invalid, the invalid17 ity shall not affect other provisions or applications of this

18 title which can be given effect without regard to the invalid

19 provision or application, and to this end the provisions of

20 this title shall be severable.
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1 TITLE V—TEEN PREGNANCY

2 AND FAMILY STABILITY

3 Subtitle A—Federal Role

4 SEC. 501. STATE OPTION TO DENY AFDC FOR ADDITIONAL

5 CHILDREN.

6 (a) IN GENERAL.—Section 402(a) (42 U.S.C.

7 602(a)), as amended by sections 101, 102, 211(a), 232,

8 and 301(a) of this Act, is amended—

9 (1) by striking ‘‘and’’ at the end of paragraph

10 (49);

11 (2) by striking the period at the end of para12 graph (50) and inserting ‘‘; and’’; and

13 (3) by inserting after paragraph (50) the fol14 lowing:

15 ‘‘(51) at the option of the State, provide that—

16 ‘‘(A)(i) notwithstanding paragraph (7)(A),

17 the needs of a child will not be taken into ac18 count in making the determination under para19 graph (7) with respect to the family of the child

20 if the child was born (other than as a result of

21 rape or incest) to a member of the family—

22 ‘‘(I) while the family was a recipient

23 of aid under the State plan; or
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1 ‘‘(II) during the 6-month period end2 ing with the date the family applied for

3 such aid; and

4 ‘‘(ii) if the amount of aid payable to a fam5 ily under the State plan is reduced by reason of

6 subparagraph (A), each member of the family

7 shall be considered to be receiving such aid for

8 purposes of eligibility for medical assistance

9 under the State plan approved under title XIX

10 for so long as such aid would otherwise not be

11 so reduced; and

12 ‘‘(B) if the State exercises the option, the State

13 may provide the family with vouchers, in amounts

14 not exceeding the amount of any such reduction in

15 aid, that may be used only to pay for particular

16 goods and services specified by the State as suitable

17 for the care of the child of the parent (such as dia18 pers, clothing, or school supplies).’’.

19 (b) APPLICABILITY.—The amendments made by sub20 section (a) shall apply to payments under a State plan

21 approved under part A of title IV of the Social Security

22 Act for months beginning after the date of the enactment

23 of this Act, and to payments to States under such part

24 for quarters beginning after such date.
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1 SEC. 502. MINORS RECEIVING AFDC REQUIRED TO LIVE

2 UNDER RESPONSIBLE ADULT SUPERVISION.

3 Section 402(a)(43) (42 U.S.C. 602(a)(43)) is amend4 ed by striking ‘‘at the option of the State,’’.

5 SEC. 503. NATIONAL CLEARINGHOUSE ON ADOLESCENT

6 PREGNANCY.

7 (a) IN GENERAL.—Title XX (42 U.S.C. 1397–

8 1397f), as amended by section 222(b) of this Act, is

9 amended by adding at the end the following:

10 ‘‘SEC. 2010. NATIONAL CLEARINGHOUSE ON ADOLESCENT

11 PREGNANCY.

12 ‘‘(a) NATIONAL CLEARINGHOUSE ON ADOLESCENT

13 PREGNANCY.—

14 ‘‘(1) ESTABLISHMENT.—The responsible Fed15 eral officials shall establish, through grant or con16 tract, a national center for the collection and provi17 sion of programmatic information and technical as18 sistance that relates to adolescent pregnancy preven19 tion programs, to be known as the ‘National Clear20 inghouse on Adolescent Pregnancy Prevention Pro21 grams’.

22 ‘‘(2) FUNCTIONS.—The national center estab23 lished under paragraph (1) shall serve as a national

24 information and data clearinghouse, and as a train25 ing, technical assistance, and material development
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1 source for adolescent pregnancy prevention pro2 grams. Such center shall—

3 ‘‘(A) develop and maintain a system for

4 disseminating information on all types of ado5 lescent pregnancy prevention program and on

6 the state of adolescent pregnancy prevention

7 program development, including information

8 concerning the most effective model programs;

9 ‘‘(B) develop and sponsor a variety of

10 training institutes and curricula for adolescent

11 pregnancy prevention program staff;

12 ‘‘(C) identify model programs representing

13 the various types of adolescent pregnancy pre14 vention programs;

15 ‘‘(D) develop technical assistance materials

16 and activities to assist other entities in estab17 lishing and improving adolescent pregnancy

18 prevention programs;

19 ‘‘(E) develop networks of adolescent preg20 nancy prevention programs for the purpose of

21 sharing and disseminating information; and

22 ‘‘(F) conduct such other activities as the

23 responsible Federal officials find will assist in

24 developing and carrying out programs or activi25 ties to reduce adolescent pregnancy.
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1 ‘‘(b) FUNDING.—The responsible Federal officials

2 shall make grants to eligible entities for the establishment

3 and operation of a National Clearinghouse on Adolescent

4 Pregnancy Prevention Programs under subsection (a) so

5 that in the aggregate the expenditures for such grants do

6 not exceed $2,000,000 for fiscal year 1996, $4,000,000

7 for fiscal year 1997, $8,000,000 for fiscal year 1998, and

8 $10,000,000 for fiscal year 1999 and each subsequent fis9 cal year.

10 ‘‘(c) DEFINITIONS.—As used in this section:

11 ‘‘(1) ADOLESCENTS.—The term ‘adolescents’

12 means youth who are ages 10 through 19.

13 ‘‘(2) ELIGIBLE ENTITY.—The term ‘eligible en14 tity’ means a partnership that includes—

15 ‘‘(A) a local education agency, acting on

16 behalf of one or more schools, together with

17 ‘‘(B) one or more community-based organi18 zations, institutions of higher education, or

19 public or private agencies or organizations.

20 ‘‘(3) ELIGIBLE AREA.—The term ‘eligible area’

21 means a school attendance area in which—

22 ‘‘(A) at least 75 percent of the children are

23 from low-income families as that term is used

24 in part A of title I of the Elementary and Sec25 ondary Education Act of 1965; or
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1 ‘‘(B) the number of children receiving Aid

2 to Families with Dependent Children under

3 part A of title IV is substantial as determined

4 by the responsible Federal officials; or

5 ‘‘(C) the unmarried adolescent birth rate is

6 high, as determined by the responsible Federal

7 officials.

8 ‘‘(4) SCHOOL.—The term ‘school’ means a pub9 lic elementary, middle, or secondary school.

10 ‘‘(5) RESPONSIBLE FEDERAL OFFICIALS.—The

11 term ‘responsible Federal officials’ means the Sec12 retary of Education, the Secretary of Health and

13 Human Services, and the Chief Executive Officer of

14 the Corporation for National and Community Serv15 ice.’’.

16 (b) EFFECTIVE DATE.—The amendment made by

17 this section shall become effective October 1, 1994.

18 SEC. 504. INCENTIVE FOR TEEN PARENTS TO ATTEND

19 SCHOOL.

20 Section 402(a) (42 U.S.C. 602(a)), as amended by

21 sections 101, 102, 211(a), 232, 301(a), and 501(a) of this

22 Act, is amended—

23 (1) by striking ‘‘and’’ at the end of paragraph

24 (50);
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1 (2) by striking the period at the end of para2 graph (51) and inserting ‘‘; and’’; and

3 (3) by inserting after paragraph (51) the fol4 lowing:

5 ‘‘(52) provide that the amount of aid otherwise

6 payable under the plan for a month to a family that

7 includes a parent who has not attained 20 years of

8 age and has not completed secondary school (or re9 ceived a certificate of high school equivalency) may

10 be reduced by 25 percent if, during the immediately

11 preceding month, the parent has failed without good

12 cause (as defined by the State in consultation with

13 the Secretary) to maintain minimum attendance (as

14 defined by the State in consultation with the Sec15 retary) at an educational institution.’’.

16 SEC. 505. STATE OPTION TO DISREGARD 100–HOUR RULE

17 UNDER AFDC–UP PROGRAM.

18 Section 407(a) (42 U.S.C. 607(a)) is amended—

19 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’; and

20 (2) by adding at the end the following:

21 ‘‘(2) A standard prescribed pursuant to paragraph

22 (1) that imposes a limit on the amount of time during

23 which a parent who is the principal earner in a family

24 in which both parents are married may be employed dur25 ing a month shall not apply to a State if the State plan
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1 under this part explicitly provides for such inapplicabil2 ity.’’.

3 SEC. 506. STATE OPTION TO DISREGARD 6–MONTH LIMITA4 TION ON AFDC–UP BENEFITS.

5 Section 407(b)(2)(B) (42 U.S.C. 607(b)(2)(B)) is

6 amended by adding at the end the following:

7 ‘‘(iv) A regulation prescribed by the Secretary that

8 limits the length of time with respect to which a family

9 of a dependent child in which both parents are married

10 may receive aid to families with dependent children by rea11 son of this section shall not apply to a State if the State

12 plan under this part explicitly provides for such inapplica13 bility.’’.

14 SEC. 507. ELIMINATION OF QUARTERS OF COVERAGE RE15 QUIREMENT UNDER AFDC–UP PROGRAM FOR

16 FAMILIES IN WHICH BOTH PARENTS ARE

17 TEENS.

18 Section 407(b)(1)(A)(iii) (42 U.S.C.

19 607(b)(1)(A)(iii)) is amended by striking ‘‘(iii)(I)’’ and in20 serting ‘‘(iii) neither of the child’s parents have attained

21 20 years of age, and (I)’’.
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1 SEC. 508. DENIAL OF FEDERAL HOUSING BENEFITS TO MI2 NORS WHO BEAR CHILDREN OUT-OF-WED3 LOCK.

4 (a) PROHIBITION OF ASSISTANCE.—Notwithstanding

5 any other provision of law, a household whose head of

6 household is an individual who has borne a child out-of7 wedlock before attaining 18 years of age may not be pro8 vided Federal housing assistance for a dwelling unit until

9 attaining such age, unless—

10 (1) after the birth of the child—

11 (A) the individual marries an individual

12 who has been determined by the relevant State

13 to be the biological father of the child; or

14 (B) the biological parent of the child has

15 legal custody of the child and marries an indi16 vidual who legally adopts the child;

17 (2) the individual is a biological and custodial

18 parent of another child who was not born out-of19 wedlock; or

20 (3) eligibility for such Federal housing assist21 ance is based in whole or in part on any disability

22 or handicap of a member of the household.

23 (b) DEFINITIONS.—For purposes of this section, the

24 following definitions shall apply:

25 (1) COVERED PROGRAM.—The term ‘‘covered

26 program’’ means—
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1 (A) the program of rental assistance on be2 half of low-income families provided under sec3 tion 8 of the United States Housing Act of

4 1937 (42 U.S.C. 1437f);

5 (B) the public housing program under title

6 I of the United States Housing Act of 1937 (42

7 U.S.C. 1437 et seq.);

8 (C) the program of rent supplement pay9 ments on behalf of qualified tenants pursuant

10 to contracts entered into under section 101 of

11 the Housing and Urban Development Act of

12 1965 (12 U.S.C. 1701s);

13 (D) the program of interest reduction pay14 ments pursuant to contracts entered into by the

15 Secretary of Housing and Urban Development

16 under section 236 of the National Housing Act

17 (12 U.S.C. 1715z–1);

18 (E) the program for mortgage insurance

19 provided pursuant to sections 221(d) (3) or (4)

20 of the National Housing Act (12 U.S.C.

21 1715l(d)) for multifamily housing for low- and

22 moderate-income families;

23 (F) the rural housing loan program under

24 section 502 of the Housing Act of 1949 (42

25 U.S.C. 1472);
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1 (G) the rural housing loan guarantee pro2 gram under section 502(h) of the Housing Act

3 of 1949 (42 U.S.C. 1472(h));

4 (H) the loan and grant programs under

5 section 504 of the Housing Act of 1949 (42

6 U.S.C. 1474) for repairs and improvements to

7 rural dwellings;

8 (I) the program of loans for rental and co9 operative rural housing under section 515 of

10 the Housing Act of 1949 (42 U.S.C. 1485);

11 (J) the program of rental assistance pay12 ments pursuant to contracts entered into under

13 section 521(a)(2)(A) of the Housing Act of

14 1949 (42 U.S.C. 1490a(a)(2)(A));

15 (K) the loan and assistance programs

16 under sections 514 and 516 of the Housing Act

17 of 1949 (42 U.S.C. 1484, 1486) for housing for

18 farm labor;

19 (L) the program of grants and loans for

20 mutual and self-help housing and technical as21 sistance under section 523 of the Housing Act

22 of 1949 (42 U.S.C. 1490c);

23 (M) the program of grants for preservation

24 and rehabilitation of housing under section 533
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1 of the Housing Act of 1949 (42 U.S.C.

2 1490m); and

3 (N) the program of site loans under sec4 tion 524 of the Housing Act of 1949 (42

5 U.S.C. 1490d).

6 (2) COVERED PROJECT.—The term ‘‘covered

7 project’’ means any housing for which Federal hous8 ing assistance is provided that is attached to the

9 project or specific dwelling units in the project.

10 (3) FEDERAL HOUSING ASSISTANCE.—The term

11 ‘‘Federal housing assistance’’ means—

12 (A) assistance provided under a covered

13 program in the form of any contract, grant,

14 loan, subsidy, cooperative agreement, loan or

15 mortgage guarantee or insurance, or other fi16 nancial assistance; or

17 (B) occupancy in a dwelling unit that is—

18 (i) provided assistance under a cov19 ered program; or

20 (ii) located in a covered project and

21 subject to occupancy limitations under a

22 covered program that are based on income.

23 (4) STATE.—The term ‘‘State’’ means the

24 States of the United States, the District of Colum25 bia, the Commonwealth of Puerto Rico, the Com-
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1 monwealth of the Northern Mariana Islands, Guam,

2 the Virgin Islands, American Samoa, and any other

3 territory or possession of the United States.

4 (c) LIMITATIONS ON APPLICABILITY.—Subsection

5 (a) shall not apply to Federal housing assistance provided

6 for a household pursuant to an application or request for

7 such assistance made by such household before the effec8 tive date of this Act if the household was receiving such

9 assistance on the effective date of this Act.

10 SEC. 509. STATE OPTION TO DENY AFDC TO MINOR

11 PARENTS.

12 (a) IN GENERAL.—Section 402(a) (42 U.S.C.

13 602(a)), as amended by sections 101, 102, 211(a), 232,

14 301(a), 501(a), and 504 of this Act, is amended—

15 (1) by striking ‘‘and’’ at the end of paragraph

16 (51);

17 (2) by striking the period at the end of para18 graph (52) and inserting ‘‘; and’’; and

19 (3) by inserting after paragraph (52) the fol20 lowing:

21 ‘‘(53)(A) at the option of the State, provide

22 that—

23 ‘‘(i) in making the determination under

24 paragraph (7) with respect to a family, the

25 State may disregard the needs of any family
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1 member who is a parent and has not attained

2 18 years of age or such lesser age as the State

3 may prescribe; and

4 ‘‘(ii) if the amount of aid payable to a fam5 ily under the State plan is reduced by reason of

6 subparagraph (A), each member of the family

7 shall be considered to be receiving such aid for

8 purposes of eligibility for medical assistance

9 under the State plan approved under title XIX

10 for so long as such aid would otherwise not be

11 so reduced; and

12 ‘‘(B) if the State exercises the option, the State

13 may provide the family with vouchers, in amounts

14 not exceeding the amount of any such reduction in

15 aid, that may be used only to pay for—

16 ‘‘(i) particular goods and services specified

17 by the State as suitable for the care of the child

18 of the parent (such as diapers, clothing, or

19 cribs); and

20 ‘‘(ii) the costs associated with a maternity

21 home, foster home, or other adult-supervised

22 supportive living arrangement in which the par23 ent and the child live.’’.

24 (b) APPLICABILITY.—The amendments made by sub25 section (a) shall apply to payments under a State plan
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1 approved under part A of title IV of the Social Security

2 Act for months beginning on or after January 1, 1998,

3 and to payments to States under such part for quarters

4 beginning after such date.

5 Subtitle B—State Role

6 SEC. 511. TEENAGE PREGNANCY PREVENTION AND FAMILY

7 STABILITY.

8 (a) FINDINGS.—The Congress finds that—

9 (1) long-term welfare dependency is increasing

10 driven by illegitimate births;

11 (2) too many teens are becoming parents and

12 too few are able to responsibly care for and nurture

13 their children;

14 (3) new research has shown that spending time

15 in a single-parent family puts children at substan16 tially increased risk of dropping out of high school,

17 having a child out-of-wedlock, or being neither in

18 school nor at work; and

19 (4) between 1986 and 1991, the rate of births

20 to teens aged 15 to 19 rose 24 percent, from 50.2

21 to 62.1 births per 1,000 females.

22 (b) SENSE OF THE CONGRESS.—It is the sense of

23 the Congress that—

24 (1) children should be educated about the risks

25 involved in choosing parenthood at an early age;
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1 (2) reproductive family planning and education

2 should be made available to every potential parent so

3 as to give such parents the opportunity to avoid un4 intended births;

5 (3) States should use funds provided under title

6 XX of the Social Security Act to provide comprehen7 sive services to youth in high risk neighborhoods,

8 through community organizations, churches, and

9 schools; and

10 (4) States should work with schools for the

11 early identification and referral of children at risk

12 for parenthood at an early age.

13 SEC. 512. AVAILABILITY OF FAMILY PLANNING SERVICES.

14 Section 402(a)(15)(A) (42 U.S.C. 602(a)(15)(A)) is

15 amended by striking ‘‘out of wedlock’’.

16 TITLE VI—PROGRAM

17 SIMPLIFICATION

18 Subtitle A—Increased State

19 Flexibility

20 SEC. 601. STATE OPTION TO PROVIDE AFDC THROUGH

21 ELECTRONIC BENEFIT TRANSFER SYSTEMS.

22 Section 402(a) (42 U.S.C. 602(a)), as amended by

23 sections 101, 102, 211(a), 232, 301(a), 501(a), 504, and

24 509(a) of this Act, is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (52);

3 (2) by striking the period at the end of para4 graph (53) and inserting ‘‘; and’’; and

5 (3) by inserting after paragraph (53) the fol6 lowing:

7 ‘‘(54) at the option of the State, provide for the

8 payment of aid under the State plan through the use

9 of electronic benefit transfer systems.’’.

10 SEC. 602. DEADLINE FOR ACTION ON APPLICATION FOR

11 WAIVER OF REQUIREMENT APPLICABLE TO

12 PROGRAM OF AID TO FAMILIES WITH DE13 PENDENT CHILDREN.

14 Section 1115 (42 U.S.C. 1315) is amended by adding

15 at the end the following:

16 ‘‘(e) The Secretary shall approve or deny an applica17 tion for a waiver under this section with respect to a re18 quirement of section 402, not later than 90 days after the

19 Secretary receives the application, unless otherwise agreed

20 upon by the Secretary and the applicant.’’.
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1 Subtitle B—Coordination of AFDC

2 and Food Stamp Programs

3 SEC. 611. AMENDMENTS TO PART A OF TITLE IV OF THE SO4 CIAL SECURITY ACT.

5 (a) STATE OPTION TO USE INCOME AND ELIGI6 BILITY VERIFICATION SYSTEM.—Section 1137(b) (42

7 U.S.C. 1320b–7(b)) is amended—

8 (1) by striking paragraphs (1) and (4), and re9 designating paragraphs (2), (3), and (5) as para10 graphs (1), (2), and (3), respectively; and

11 (2) in paragraph (2) (as so redesignated), by

12 adding ‘‘or’’ at the end.

13 (b) STATE OPTION TO USE RETROSPECTIVE BUDG14 ETING WITHOUT MONTHLY REPORTING.—Section

15 402(a)(13) (42 U.S.C. 602(a)(13)) is amended—

16 (1) by striking all that precedes subparagraph

17 (A) and inserting the following:

18 ‘‘(13) provide, at the option of the State and

19 with respect to such category or categories as the

20 State may select and identify in the State plan,

21 that—’’; and

22 (2) in each of subparagraphs (A) and (B), by

23 striking ‘‘, in the case of families who are required

24 to report monthly to the State agency pursuant to

25 paragraph (14)’’.
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1 (c) EXCLUSION FROM INCOME OF ALL INCOME OF

2 DEPENDENT CHILD WHO IS A STUDENT.—Section

3 402(a)(8)(A)(i) (42 U.S.C. 602(a)(8)(A)(i)) is amended—

4 (1) by striking ‘‘earned’’; and

5 (2) by inserting ‘‘applying for or’’ before ‘‘re6 ceiving’’.

7 (d) EXCLUSION FROM INCOME OF CERTAIN ENERGY

8 ASSISTANCE PAYMENTS BASED ON NEED.—

9 (1) IN GENERAL.—Section 402(a)(8)(A) (42

10 U.S.C. 602(a)(8)(A)), as amended by sections 231

11 and 242(b)(1) of this Act, is amended—

12 (A) by striking ‘‘and’’ at the end of clause

13 (ix); and

14 (B) by adding at the end the following:

15 ‘‘(xi) shall disregard any energy or utility16 cost assistance payment based on need, that is

17 paid to any member of the family under—

18 ‘‘(I) a State or local general assist19 ance program; or

20 ‘‘(II) another basic assistance pro21 gram comparable to general assistance (as

22 determined by the Secretary); and’’.

23 (2) INCLUSION OF ENERGY ASSISTANCE PRO24 VIDED UNDER THE LIHEAP PROGRAM.—Section
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1 402(a)(8)(B) (42 U.S.C. 602(a)(8)(B)) is amend2 ed—

3 (A) by striking ‘‘and’’ at the end of clause

4 (i); and

5 (B) by adding at the end the following:

6 ‘‘(iii) shall not disregard any assist7 ance provided directly to, or indirectly for

8 the benefit of, any person described in sub9 paragraph (A)(ii) under the Low-Income

10 Home Energy Assistance Act of 1981, not11 withstanding section 2605(f)(1) of such

12 Act; and’’.

13 (e) APPLICABILITY TO AFDC OF FUTURE INCOME

14 EXCLUSIONS UNDER FOOD STAMP PROGRAM.—Section

15 402(a)(8)(A) (42 U.S.C. 602(a)(8)(A)), as amended by

16 sections 231, 242(b)(1) of this Act and by subsection

17 (d)(1) of this section, is amended—

18 (1) by striking ‘‘and’’ at the end of clause (x);

19 and

20 (2) by adding at the end the following:

21 ‘‘(xii) shall disregard from the income of

22 any child, relative, or other individual described

23 in clause (ii) applying for aid under the State

24 plan, any child, relative, or other individual so

25 described receiving such aid, or both, any funds
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1 that a Federal statute (enacted after the date

2 of the enactment of this clause) excludes from

3 income for purposes of determining eligibility

4 for benefits under the food stamp program

5 under the Food Stamp Act of 1977, the level

6 of benefits under the program, or both, respec7 tively.’’.

8 (f) PERIODIC REVIEWS.—Section 402(a) (42 U.S.C.

9 602(a)), as amended by sections 101, 102, 211(a), 232,

10 301(a), 501(a), 504, 509(a), and 601 of this Act, is

11 amended—

12 (1) by striking ‘‘and’’ at the end of paragraph

13 (53);

14 (2) by striking the period at the end of para15 graph (54) and inserting ‘‘; and’’; and

16 (3) by inserting after paragraph (54) the fol17 lowing:

18 ‘‘(55) provide that the State shall, not less fre19 quently than annually review each determination

20 made under the State plan with respect to the eligi21 bility of each recipient of aid under the State plan;’’.

22 (g) EXCLUSION FROM RESOURCES OF ES23 SENTIAL EMPLOYMENT-RELATED PROPERTY.—Section

24 402(a)(7)(B) (42 U.S.C. 602(a)(7)(B)), as amended by

25 section 242(a) of this Act, is amended—
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1 (1) by striking ‘‘or’’ at the end of clause (iv);

2 and

3 (2) by inserting ‘‘, or (vi) the value of real and

4 tangible personal property (other than currency,

5 commercial paper, and similar property) of a family

6 member that is essential to the employment or self7 employment of the member, until the expiration of

8 the 1-year period beginning on the date the member

9 ceases to be so employed or so self-employed’’ before

10 the semicolon.

11 (h) EXCLUSION FROM RESOURCES OF EQUITY IN

12 CERTAIN INCOME-PRODUCING REAL PROPERTY.—Sec13 tion 402(a)(7)(B) (42 U.S.C. 602(a)(7)(B)), as amended

14 by section 242(a) of this Act and by subsection (g) of this

15 section, is amended—

16 (1) by striking ‘‘or’’ at the end of clause (v);

17 and

18 (2) by inserting ‘‘, or (vii) the equity of any

19 member of the family in real property to which 1 or

20 more members of the family have sole and clear title,

21 that the State agency determines is producing in22 come consistent with the fair market value of the

23 property’’ before the semicolon.

24 (i) EXCLUSION FROM RESOURCES OF LIFE INSUR25 ANCE POLICIES.—Section 402(a)(7)(B) (42 U.S.C.
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1 602(a)(7)(B)), as amended by section 242(a) of this Act

2 and by subsections (g) and (h) of this section, is amend3 ed—

4 (1) by striking ‘‘or’’ at the end of clause (vi);

5 and

6 (2) by inserting ‘‘, or (viii) any life insurance

7 policy’’ before the semicolon.

8 (j) EXCLUSION FROM RESOURCES OF REAL PROP9 ERTY THAT THE FAMILY IS MAKING A GOOD FAITH EF10 FORT TO SELL.—Section 402(a)(7)(B)(iii) (42 U.S.C.

11 602(a)(7)(B)(iii)) is amended—

12 (1) by striking ‘‘for such period or periods of

13 time as the Secretary may prescribe’’; and

14 (2) by striking ‘‘any such period’’ and inserting

15 ‘‘any period during which the family is making such

16 an effort’’.

17 (k) PROMPT RESTORATION OF BENEFITS WRONG18 FULLY DENIED.—Section 402(a) (42 U.S.C. 602(a)), as

19 amended by sections 101, 102, 211(a), 232, 301(a),

20 501(a), 504, 509(a), and 601 of this Act and by sub21 section (f) of this section, is amended—

22 (1) by striking ‘‘and’’ at the end of paragraph

23 (54);

24 (2) by striking the period at the end of para25 graph (55) and inserting ‘‘; and’’; and
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1 (3) by inserting after paragraph (55) the fol2 lowing:

3 ‘‘(56) provide that, upon receipt of a request

4 from a family for the payment of any amount of aid

5 under the State plan the payment of which to the

6 family has been wrongfully denied or terminated, the

7 State shall promptly pay the amount to the family

8 if the wrongful denial or termination occurred not

9 more than 1 year before the date of the request or

10 the date the State agency is notified or otherwise

11 discovers the wrongful denial or termination.’’.

12 SEC. 612. AMENDMENTS TO THE FOOD STAMP ACT OF 1977.

13 (a) CERTIFICATION PERIOD.—(1) Section 3(c) of the

14 Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is amended

15 to read as follows:

16 ‘‘(c) ‘Certification period’ means the period specified

17 by the State agency for which households shall be eligible

18 to receive authorization cards, except that such period

19 shall be—

20 ‘‘(1) 24 months for households in which all

21 adult members are elderly or disabled; and

22 ‘‘(2) not more than 12 months for all other

23 households.’’.

24 (2) Section 6(c)(1)(C) of the Food Stamp Act of

25 1977 (7 U.S.C. 2015(c)(1)(C)) is amended—
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1 (A) in clause (ii) by adding ‘‘and’’ at the end;

2 (B) in clause (iii) by striking ‘‘; and’’ at the end

3 and inserting a period; and

4 (C) by striking clause (iv).

5 (b) INCLUSION OF ENERGY ASSISTANCE IN IN6 COME.—

7 (1) AMENDMENTS TO THE FOOD STAMP ACT

8 OF 1977.—Section 5 of the Food Stamp Act of

9 1977 (7 U.S.C. 2014) is amended—

10 (A) in subsection (d)—

11 (i) by striking paragraph (11); and

12 (ii) by redesignating paragraphs (12)

13 through (16) as paragraphs (11) through (15),

14 respectively; and

15 (B) in subsection (k)—

16 (i) in paragraph (1)(B) by striking ‘‘, not

17 including energy or utility-cost assistance,’’; and

18 (ii) in paragraph (2)—

19 (I) by striking subparagraph (C); and

20 (II) by redesignating subparagraphs

21 (D) through (H) as subparagraphs (C)

22 through (J), respectively.

23 (2) AMENDMENTS TO THE LOW-INCOME HOME

24 ENERGY ASSISTANCE ACT OF 1981.—Section
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1 2605(f) of the Low-Income Home Energy Assistance

2 Act of 1981 (42 U.S.C. 8624(f)) is amended—

3 (A) in paragraph (1) by striking ‘‘food

4 stamps,’’; and

5 (B) by amending paragraph (2) to read as

6 follows:

7 ‘‘(2) Paragraph (1) shall not apply for any purpose

8 under the Food Stamp Act of 1977.’’.

9 (c) EXCLUSION OF CERTAIN JTPA INCOME.—Sec10 tion 5(d) of the Food Stamp Act of 1977 (7 U.S.C.

11 2014(d)), as amended by subsection (b), is amended—

12 (1) by striking ‘‘and (15)’’ and inserting

13 ‘‘(15)’’; and

14 (2) by inserting before the period the following:

15 ‘‘, and (16) income received under the Job Training Part16 nership Act by a household member who is less than 19

17 years of age’’.

18 (d) EXCLUSION OF EDUCATIONAL ASSISTANCE

19 FROM INCOME.—Section 5(d) of the Food Stamp Act of

20 1977 (7 U.S.C. 2014(d)) is amended—

21 (1) by amending paragraph (3) to read as follows:

22 ‘‘(3) all educational loans on which payment is deferred

23 (including any loan origination fees or insurance pre24 miums associated with such loans), grants, scholarships,

25 fellowships, veterans’ educational benefits, and the like
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1 awarded to a household member enrolled at a recognized

2 institution of post-secondary education, at a school for the

3 handicapped, in a vocational education program, or in a

4 program that provides for completion of a secondary

5 school diploma or obtaining the equivalent thereof,’’; and

6 (2) in paragraph (5) by striking ‘‘and no portion’’

7 and all that follows through ‘‘reimbursement’’.

8 (e) LIMITATION ON ADDITIONAL EARNED INCOME

9 DEDUCTION.—The 3rd sentence of section 5(e) of the

10 Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is amended

11 by striking ‘‘earned income that’’ and all that follows

12 through ‘‘report’’, and inserting ‘‘determining an

13 overissuance due to the failure of a household to report

14 earned income’’.

15 (f) EXCLUSION OF ESSENTIAL EMPLOYMENT-RE16 LATED PROPERTY.—Section 5(g)(3) of the Food Stamp

17 Act of 1977 (7 U.S.C. 2014(g)(3)) is amended to read

18 as follows:

19 ‘‘(3) The value of real and tangible personal property

20 (other than currency, commercial paper, and similar prop21 erty) of a household member that is essential to the em22 ployment or self-employment of such member shall be ex23 cluded by the Secretary from financial resources until the

24 expiration of the 1-year period beginning on the date such

25 member ceases to be so employed or so self-employed.’’.
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1 (g) EXCLUSION OF LIFE INSURANCE POLICIES.—

2 Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C.

3 2014(g)) is amended by adding at the end the following:

4 ‘‘(6) The Secretary shall exclude from financial re5 sources the cash value of any life insurance policy owned

6 by a member of a household.’’.

7 (h) IN-TANDEM EXCLUSIONS FROM INCOME.—Sec8 tion 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014)

9 is amended by adding at the end the following:

10 ‘‘(n) Whenever a Federal statute enacted after the

11 date of the enactment of this Act excludes funds from in12 come for purposes of determining eligibility, benefit levels,

13 or both under State plans approved under part A of title

14 IV of the Social Security Act, then such funds shall be

15 excluded from income for purposes of determining eligi16 bility, benefit levels, or both, respectively, under the food

17 stamp program of households all of whose members re18 ceive benefits under a State plan approved under part A

19 of title IV of the Social Security Act.’’.

20 (i) APPLICATION OF AMENDMENTS.—The amend21 ments made by this section shall not apply with respect

22 to certification periods beginning before the effective date

23 of this section.
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1 Subtitle C—Fraud Reduction

2 SEC. 631. SENSE OF THE CONGRESS IN SUPPORT OF THE

3 EFFORTS OF THE ADMINISTRATION TO AD4 DRESS THE PROBLEMS OF FRAUD AND

5 ABUSE IN THE SUPPLEMENTAL SECURITY IN6 COME PROGRAM.

7 The Congress hereby expresses support for the efforts

8 of the Social Security Administration to reduce fraud and

9 abuse in the supplemental security income program under

10 title XVI of the Social Security Act by implementing a

11 structured approach to disability decisionmaking that

12 takes into consideration the large number of disability

13 claims received while providing a basis for consistent, equi14 table decisionmaking by claims adjudicators at each level,

15 that provides for the following:

16 (1) A simplification of the monetary guidelines

17 for determining whether an individual (except those

18 filing for benefits based on blindness) is engaging in

19 substantial gainful activity.

20 (2) The replacement of a threshold severity re21 quirement for determining whether a claimant has a

22 medically determinable impairment with a threshold

23 inquiry as to whether the claimant has a medically

24 determinable physical or mental impairment that
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1 can be demonstrated by acceptable clinical and lab2 oratory diagnostic techniques.

3 (3) The comparison of an impairment referred

4 to in paragraph (2) with an index of disabling im5 pairments that contains fewer impairments, has less

6 detail and complexity, and does not rely on the con7 cept of ‘‘medical equivalence’’.

8 (4)(A) The consideration of whether an individ9 ual has the ability to perform substantial gainful ac10 tivity despite any functional loss caused by a medi11 cally determinable physical or mental impairment.

12 (B) The definition of the physical and mental

13 requirements of substantial gainful activity.

14 (C) The objective measurement, to the extent

15 possible, of whether an individual meets such re16 quirements.

17 (D) The development, with the assistance of the

18 medical community and other outside experts from

19 disability programs, of standardized criteria which

20 can be used to measure an individual’s functional

21 ability.

22 (E) The assumption by the Social Security Ad23 ministration of primary responsibility for document24 ing functional ability using the standardized meas25 urement criteria, with the goal of developing func-
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1 tional assessment instruments that are standardized,

2 accurately measure an individual’s functional abili3 ties, and are universally accepted by the public, the

4 advocacy community, and health care professionals.

5 (F) The use of the results of the standardized

6 functional measurement with a new standard to de7 scribe basic physical and mental demands of a base8 line of work that represents substantial gainful ac9 tivity and that exists in significant numbers in the

10 national economy.

11 (5)(A) An evaluation of whether a child is en12 gaging in substantial gainful activity, whether a

13 child has a medically determinable physical or men14 tal impairment that will meet the duration require15 ment, and whether a child has an impairment that

16 meets the criteria in the index of disabling impair17 ments.

18 (B) The development, with the assistance of the

19 medical community and educational experts, of

20 standardized criteria which can be used to measure

21 a child’s functional ability to perform a baseline of

22 functions that are comparable to the baseline of oc23 cupational demands for an adult.

24 (C) The conduct of research to specifically iden25 tify a skill acquisition threshold to measure broad
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1 areas required to develop the ability to perform sub2 stantial gainful activity.

3 SEC. 632. STUDY ON FEASIBILITY OF SINGLE TAMPER4 PROOF IDENTIFICATION CARD TO SERVE

5 PROGRAMS UNDER BOTH THE SOCIAL SECU6 RITY ACT AND HEALTH REFORM LEGISLA7 TION.

8 (a) STUDY.—As soon as practicable after the date of

9 the enactment of this Act, the Commissioner of Social Se10 curity shall conduct a study of the feasibility of issuing,

11 in counterfeit-resistant form, a single identification card

12 which would combine the features of the social security

13 card now issued pursuant to section 205 of the Social Se14 curity Act and any health security card which may be pro15 vided for in health reform legislation enacted in the 104th

16 Congress. In such study, the Commissioner shall devote

17 particular consideration to—

18 (1) employment in such card of finger-print

19 identification, bar code validation, a photograph, a

20 hologram, or any other identifiable feature,

21 (2) the efficiencies and economies which may be

22 achieved by combining the features of the social se23 curity card as currently issued and the features of

24 any health security card which might be issued

25 under health reform legislation, and
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1 (3) any costs and risks which might result from

2 combining such features in a single identification

3 card and possible means of alleviating any such

4 costs and risks.

5 (b) REPORT.—The Commissioner of Social Security

6 shall, not later than 1 year after the date of the enactment

7 of this Act, transmit a report to each House of the Con8 gress setting forth the Commissioner’s findings from the

9 study conducted pursuant to subsection (a). Such report

10 may include such recommendations for administrative or

11 legislative changes as the Commissioner considers appro12 priate.

13 Subtitle D—Additional Provisions

14 SEC. 641. STATE OPTIONS REGARDING UNEMPLOYED PAR15 ENT PROGRAM.

16 (a) DURATION OF UNEMPLOYMENT AND RECENCY17 OF-WORK TESTS.—Section 407(b)(1)(A) (42 U.S.C.

18 607(b)(1)(A)), as amended by section 507 of this Act, is

19 amended—

20 (1) by striking the matter preceding clause (i)

21 and inserting the following:

22 ‘‘(A) subject to paragraph (2), shall provide for

23 the payment of aid to families with dependent chil24 dren with respect to a dependent child within the

25 meaning of subsection (a)—’’.
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1 (2) in clause (i), by striking ‘‘whichever’’ and

2 inserting ‘‘when, if the State chooses to so require

3 (and specifies in its State plan), whichever’’;

4 (3) in clause (ii), by inserting ‘‘when’’ before

5 such parent; and

6 (4) in clause (iii), by inserting ‘‘when, if the

7 State chooses to so require (and so specifies in its

8 State plan)’’ after ‘‘(iii)’’.

9 (b) STATE OPTION TO EXPAND PROGRAM.—Section

10 407(a) (42 U.S.C. 607(a)) is amended by inserting ‘‘or

11 the unemployment (as defined (if at all) by the State in

12 the State plan approved under section 402)’’ before ‘‘of

13 the parent’’.

14 (c) EFFECTIVE DATE.—Subsection (b) and the

15 amendments made by subsection (a) shall become effective

16 October 1, 1996.

17 SEC. 642. DEFINITION OF ESSENTIAL PERSON.

18 (a) GENERAL REQUIREMENT.—Section 402 (42

19 U.S.C. 602), as amended by section 222(a)(1)(A) of this

20 Act, is amended by inserting after subsection (f) the fol21 lowing:

22 ‘‘(g) In order that the State may include the needs

23 of an individual in determining the needs of the dependent

24 child and relative with whom the child is living, such indi-
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1 vidual must be living in the same home as such child and

2 relative, and—

3 ‘‘(1) furnishing personal services required be4 cause of the relative’s physical or mental inability to

5 provide care necessary for herself or himself or for

6 the dependent child (which, for purposes of this sub7 section only, includes a child receiving supplemental

8 security income benefits under title XVI); or

9 ‘‘(2) furnishing child care services, or care for

10 an incapacitated member of the family, that is nec11 essary to permit the caretaker relative—

12 ‘‘(A) to engage in full or part-time employ13 ment outside the home, or

14 ‘‘(B) to attend a course of education de15 signed to lead to a high school diploma (or its

16 equivalent) or a course of training on a full or

17 part-time basis, or to participate in the pro18 gram under part G on a full or part-time

19 basis.’’.

20 SEC. 643. ‘‘FILL-THE-GAP’’ BUDGETING.

21 (a) IN GENERAL.—Section 402(a)(8)(A) (42 U.S.C.

22 602(a)(8)(A)), as amended by sections 231, 242(b)(1),

23 and 611(d)(1) of this Act, is amended—

24 (1) by striking ‘‘and’’ at the end of clause (xi);

25 and
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1 (2) by adding at the end the following:

2 ‘‘(xiii) in addition to any other amounts re3 quired or permitted by this paragraph to be dis4 regarded in a month, may exempt countable in5 come identified in the State plan by type or

6 source and by amount, but in an amount not

7 exceeding the difference between the State’s

8 standard of need applicable to the family and

9 the amount from which all remaining

10 nonexempt income is subtracted to determine

11 the amount of aid payable under the State plan

12 to a family of the same size with no other in13 come;’’.

14 (b) EFFECTIVE DATE.—The amendment made by

15 subsection (a) shall take effect on October 1, 1997.

16 SEC. 644. REPEAL OF REQUIREMENT TO MAKE CERTAIN

17 SUPPLEMENTAL PAYMENTS IN STATES PAY18 ING LESS THAN THEIR NEEDS STANDARDS.

19 Section 402(a)(28) (42 U.S.C. 602(a)(28)) is hereby

20 repealed.

21 SEC. 645. COLLECTION OF AFDC OVERPAYMENTS FROM

22 FEDERAL TAX REFUNDS.

23 (a) AUTHORITY TO INTERCEPT TAX REFUND.—(1)

24 Part A of title IV (42 U.S.C. 601–617) is amended by

25 adding at the end the following:
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1 ‘‘COLLECTION OF OVERPAYMENTS FROM FEDERAL TAX

2 REFUNDS

3 ‘‘SEC. 418. (a) Upon receiving notice from a State

4 agency administering a plan approved under this part that

5 a named individual has been overpaid under the State plan

6 approved under this part, the Secretary of the Treasury

7 shall determine whether any amounts as refunds of Fed8 eral taxes paid are payable to such individual, regardless

9 of whether such individual filed a tax return as a married

10 or unmarried individual. If the Secretary of the Treasury

11 finds that any such amount is payable, he shall withhold

12 from such refunds an amount equal to the overpayment

13 sought to be collected by the State and pay such amount

14 to the State agency.

15 ‘‘(b) The Secretary of the Treasury shall issue regula16 tions, approved by the Secretary of Health and Human

17 Services, that provide—

18 ‘‘(1) that a State may only submit under sub19 section (a) requests for collection of overpayments

20 with respect to individuals (A) who are no longer re21 ceiving aid under the State plan approved under this

22 part, (B) with respect to whom the State has al23 ready taken appropriate action under State law

24 against the income or resources of the individuals or

25 families involved as required under section
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1 402(a)(22) (B), and (C) to whom the State agency

2 has given notice of its intent to request withholding

3 by the Secretary of the Treasury from their income

4 tax refunds;

5 ‘‘(2) that the Secretary of the Treasury will

6 give a timely and appropriate notice to any other

7 person filing a joint return with the individual whose

8 refund is subject to withholding under subsection

9 (a); and

10 ‘‘(3) the procedures that the State and the Sec11 retary of the Treasury will follow in carrying out

12 this section which, to the maximum extent feasible

13 and consistent with the specific provisions of this

14 section, will be the same as those issued pursuant to

15 section 464(b) applicable to collection of past-due

16 child support.’’.

17 (2) Section 6402 of the Internal Revenue Code of

18 1986 (as amended by section 443(a) of this Act) is amend19 ed—

20 (A) in subsection (a), by striking ‘‘(c) and (d)’’

21 and inserting ‘‘(c), (d), and (e)’’;

22 (B) by redesignating subsections (e) through (i)

23 as subsections (f) through (j), respectively; and

24 (C) by inserting after subsection (d) the follow25 ing:
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1 ‘‘(g) COLLECTION OF OVERPAYMENTS UNDER TITLE

2 IV–A OF THE SOCIAL SECURITY ACT.—The amount of

3 any overpayment to be refunded to the person making the

4 overpayment shall be reduced (after reductions pursuant

5 to subsections (c) and (d), but before a credit against fu6 ture liability for an internal revenue tax) in accordance

7 with section 418 of the Social Security Act (concerning

8 recovery of overpayments to individuals under State plans

9 approved under part A of title IV of such Act).’’.

10 (b) CONFORMING AMENDMENT.—Section

11 552a(a)(8)(B)(iv)(III) of title 5, United States Code, is

12 amended by striking ‘‘section 464 or 1137 of the Social

13 Security Act’’ and inserting ‘‘section 419, 464, or 1137

14 of the Social Security Act.’’

15 SEC. 646. TERRITORIES.

16 (a) IN GENERAL.—Section 1108(a) (42 U.S.C.

17 1308(a)) is amended by striking paragraphs (1), (2), and

18 (3) and inserting the following:

19 ‘‘(1) for payment to Puerto Rico shall not ex20 ceed—

21 ‘‘(A) $82,000,000 with respect to fiscal

22 years 1994, 1995, and 1996, and

23 ‘‘(B) $102,500,000 or, if greater, such

24 amount adjusted by the CPI (as prescribed in
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1 subsection (f)) for fiscal year 1997 and each

2 fiscal year thereafter;

3 ‘‘(2) for payment to the Virgin Islands shall not

4 exceed—

5 ‘‘(A) $2,800,000 with respect to fiscal

6 years 1994, 1995, and 1996, and

7 ‘‘(B) $3,500,000 or, if greater, such

8 amount adjusted by the CPI (as prescribed in

9 subsection (f)) for fiscal year 1997 and each

10 fiscal year thereafter; and

11 ‘‘(3) for payment to Guam shall not exceed—

12 ‘‘(A) $3,800,000 with respect to fiscal year

13 1994, 1995, and 1996, and

14 ‘‘(B) $4,750,000 or, if greater, such

15 amount adjusted by the CPI (as prescribed in

16 subsection (f)), for fiscal year 1997 and each

17 fiscal year thereafter.’’.

18 (b) CPI ADJUSTMENT.—Section 1108 (42 U.S.C.

19 1308) is amended by adding at the end the following:

20 ‘‘(f) For purposes of subsection (a), an amount is ‘ad21 justed by the CPI’ for months in calendar year by mul22 tiplying that amount by the ratio of the Consumer Price

23 Index as prepared by the Department of Labor for—

24 ‘‘(1) the third quarter of the preceding calendar

25 year, to
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1 ‘‘(2) the third quarter of calendar year 1996,

2 and rounding the product, if not a multiple of

3 $10,000, to the nearer multiple of $10,000.’’.

4 SEC. 647. DISREGARD OF STUDENT INCOME.

5 (a) IN GENERAL.—Section 402(a)(8)(A)(i) (42

6 U.S.C. 602(a)(8)(A)(i)) is amended by striking ‘‘depend7 ent child’’ and all that follows and inserting ‘‘individual

8 who has not attained 19 years of age and is an elementary

9 or secondary school student’’.

10 (b) CONFORMING AMENDMENTS.—Section 402(a)

11 (42 U.S.C. 602(a)) is amended—

12 (1) in paragraph (8)(A)(vii)—

13 (A) by striking ‘‘a dependent child who is

14 a full-time student’’ and inserting ‘‘an individ15 ual who has not attained 19 years of age and

16 is an elementary or secondary school student’’;

17 and

18 (B) by striking ‘‘such child’’ and inserting

19 ‘‘such individual’’; and

20 (2) in paragraph (18), by striking ‘‘of a de21 pendent child’’ and inserting ‘‘of an individual under

22 age 19’’.
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1 SEC. 648. LUMP-SUM INCOME.

2 Section 402(a)(8)(A) (42 U.S.C. 602(a)(8)(A)), as

3 amended by sections 231, 242(b)(1), 611(d)(1), and

4 643(a) of this Act, is amended—

5 (1) by striking ‘‘and’’ at the end of clause (xii);

6 and

7 (2) by adding at the end the following:

8 ‘‘(xiv) shall disregard from the income of

9 any family member any amounts of income re10 ceived in the form of nonrecurring lump-sum

11 payments other than payments made pursuant

12 to an order for child or spousal support being

13 enforced by the agency administering the State

14 plan approved under part D;’’.

15 TITLE VII—CHILD PROTECTION

16 BLOCK GRANT PROGRAM

17 SEC. 701. ESTABLISHMENT OF PROGRAMS.

18 Part B of title IV (42 U.S.C. 620–635) is amended

19 to read as follows:

20 PART B—CHILD PROTECTION BLOCK GRANT

21 PROGRAM

22 ‘‘SEC. 420. PURPOSES; AUTHORIZATIONS OF APPROPRIA23 TIONS.

24 ‘‘The purpose of this part is to enable States to carry

25 out a program of child welfare and child protection serv26 ices which includes—
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1 ‘‘(1) child protection services for children who

2 are, or are suspected of being or at risk of becoming,

3 victims of abuse or neglect;

4 ‘‘(2) preventive services and activities, including

5 community-based family support services, designed

6 to strengthen and preserve families and to prevent

7 child abuse and neglect; and

8 ‘‘(3) permanency planning services and activi9 ties to achieve planned, permanent living arrange10 ments (including family reunification, adoption, and

11 independent living) for children who have been re12 moved from their families.

13 ‘‘SEC. 421. STATE PLANS.

14 ‘‘(a) IN GENERAL.—In order to be eligible for pay15 ment under this part, a State must have an approved plan

16 (developed jointly by the Secretary and the State agency,

17 after consultation with persons and entities specified in

18 subsection (b)) for the provision of services to children and

19 families which meet the requirements of subsection (c).

20 ‘‘(b) CONSULTATION WITH APPROPRIATE ENTI21 TIES.—A State, in developing its plan for approval under

22 this part, shall consult with concerned persons and enti23 ties, including—

24 ‘‘(1) public and nonprofit private agencies and

25 community-based organizations with experience in
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1 administering programs of child welfare services for

2 children and families; and

3 ‘‘(2) representatives of and advocates for chil4 dren and families.

5 ‘‘(c) STATE PLAN REQUIREMENTS.—A State plan

6 under this part shall—

7 ‘‘(1) describe the services and activities to be

8 performed, and the service delivery mechanisms (in9 cluding service providers and statewide distribution

10 of services) to be used, to provide—

11 ‘‘(A) child protection services described in

12 section 420(1) (including such services provided

13 under this part and part E);

14 ‘‘(B) preventive services described in sec15 tion 420(2) (and shall provide for delivery of

16 such services through a statewide network of

17 local nonprofit community-based family support

18 programs, in collaboration with existing health,

19 mental health, education, employment, training,

20 child welfare, and other social services agen21 cies); and

22 ‘‘(C) permanency planning services de23 scribed in section 420(3) (including family re24 unification, adoption, and independent living);
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1 ‘‘(2)(A)(i) declare the State’s goals for accom2 plishments under the plan is in operation in the

3 State, and (ii) be updated periodically to declare the

4 State’s goals for accomplishments under the plan by

5 the end of each fifth fiscal year thereafter;

6 ‘‘(B) describe the methods to be used in meas7 uring progress toward accomplishment of the goals;

8 and

9 ‘‘(C) contain a commitment that the State—

10 ‘‘(i) will perform an interim review of its

11 progress toward accomplishment of the goals after

12 the end of each of the first 4 fiscal years covered by

13 the goals, and on the basis of such interim review

14 will revise the statement of goals in the plan, if nec15 essary, to reflect changed circumstances or other rel16 evant factors; and

17 ‘‘(ii) will perform, after the end of the last fis18 cal year covered by the goals, a final review of its

19 progress toward accomplishment of the goals and

20 prepare a report to the Secretary on the basis of

21 such final review;

22 ‘‘(3) provide assurances that reasonable

23 amounts will be expended under this part to carry

24 out each of the purposes specified in paragraphs (1)

25 through (3) of section 420; and
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1 ‘‘(4) provide assurances that the State has in

2 effect a program of foster care safeguards meeting

3 the requirements of section 425.

4 ‘‘(d) SECRETARIAL APPROVAL.—The Secretary shall

5 approve a State plan that meets the requirements of this

6 section.

7 ‘‘SEC. 422. RESERVATIONS; ALLOTMENTS TO STATES.

8 ‘‘(a) IN GENERAL..—The Secretary shall allot the

9 amount specified in subsection (b) for each fiscal year in

10 accordance with subsections (c) through (f).

11 ‘‘(b) FEDERAL FUNDING.—The amount specified for

12 purposes of this section shall be—

13 ‘‘(1) $653,000,000 for fiscal year 1996;

14 ‘‘(1) $682,000,000 for fiscal year 1997;

15 ‘‘(1) $713,000,000 for fiscal year 1998;

16 ‘‘(1) $737,000,000 for fiscal year 1999; and

17 ‘‘(1) $763,000,000 for fiscal year 2000.

18 ‘‘(c) PROJECTS OF NATIONAL SIGNIFICANCE.—Two

19 percent of the amount specified under subsection (b) for

20 each fiscal year shall be reserved for expenditure by the

21 Secretary for projects of national significance related to

22 the purposes of this part.

23 ‘‘(d) TRAINING AND TECHNICAL ASSISTANCE.—Two

24 percent of the amount specified under subsection (b) for

25 each fiscal year shall be reserved for expenditure by the
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1 Secretary for training and technical assistance to State

2 and local public and nonprofit private entities related to

3 the program under this part.

4 ‘‘(e) INDIAN TRIBES.—One percent of the amount

5 specified under subsection (b) for each fiscal year shall

6 be reserved for allotment to Indian tribes in accordance

7 with section 424.

8 ‘‘(f) STATES.—From the balance of the amount spec9 ified for each fiscal year under subsection (b) remaining

10 after the application of subsections (c), (d), and (e), the

11 Secretary shall allot to each State an amount which bears

12 the same ratio to the amount specified as the total amount

13 that would have been allotted to the State for such fiscal

14 year under this part, as in effect on September 30, 1995,

15 bears to the total amount that would have been so allotted

16 to all States for such fiscal year.

17 ‘‘SEC. 423. PAYMENTS TO STATES.

18 ‘‘(a) ENTITLEMENT TO PAYMENT; FEDERAL SHARE

19 OF COSTS.—Each State which has a plan approved under

20 this part shall be entitled to payment, equal to its allot21 ment under section 422 for a fiscal year, for use in pay22 ment by the State of 75 percent of the costs of activities

23 under the State plan during such fiscal year. The remain24 ing 25 percent of such costs shall be paid by the State

25 with funds from non-Federal sources.
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1 ‘‘(b) PAYMENT INSTALLMENTS.—The Secretary shall

2 make payments in accordance with section 6503 of title

3 31, United States Code, to each State from its allotment

4 for use under this part.

5 ‘‘SEC. 424. PAYMENTS TO INDIAN TRIBES.

6 ‘‘(a) IN GENERAL.—The Secretary shall make pay7 ments under this part for a fiscal year directly to the tribal

8 organization of an Indian tribe with a plan approved under

9 this part, except that such plan need not meet any require10 ment under such section that the Secretary determines is

11 inappropriate with respect to such Indian tribe.

12 ‘‘(b) ALLOTMENT.—From the amount reserved pur13 suant to section 422(e) for any fiscal year, the Secretary

14 shall allot to each Indian tribe meeting the conditions

15 specified in subsection (a), an amount bearing the same

16 ratio to such reserved amount as the number of children

17 in all Indian tribes with State plans so approved, as deter18 mined by the Secretary on the basis of the most current

19 and reliable information available to the Secretary.

20 ‘‘SEC. 425. FOSTER CARE PROTECTION.

21 ‘‘In order to meet the requirements of this section,

22 for purposes of section 421(c)(4), a State shall—

23 ‘‘(1) since June 17, 1980, have completed an

24 inventory of all children who, before the inventory,
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1 had been in foster care under the responsibility of

2 the State for 6 months or more, which determined—

3 ‘‘(A) the appropriateness of, and necessity

4 for, the foster care placement;

5 ‘‘(B) whether the child could or should be

6 returned to the parents of the child or should

7 be freed for adoption or other permanent place8 ment; and

9 ‘‘(C) the services necessary to facilitate the

10 return of the child or the placement of the child

11 for adoption or legal guardianship;

12 ‘‘(2) be operating, to the satisfaction of the Sec13 retary—

14 ‘‘(A) a statewide information system from

15 which can be readily determined the status, de16 mographic characteristics, location, and goals

17 for the placement of every child who is (or,

18 within the immediately preceding 12 months,

19 has been) in foster care;

20 ‘‘(B) a case review system (as defined in

21 section 475(5)) for each child receiving foster

22 care under the supervision of the State;

23 ‘‘(C) a service program designed to help

24 children—
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1 ‘‘(i) where appropriate, return to fam2 ilies from which they have been removed;

3 or

4 ‘‘(ii) be placed for adoption, with a

5 legal guardian, or, if adoption or legal

6 guardianship is determined not to be ap7 propriate for a child, in some other

8 planned, permanent living arrangement;

9 and

10 ‘‘(D) a replacement preventive services

11 program designed to help children at risk of

12 foster care placement remain with their fami13 lies; and

14 ‘‘(3)(A) have reviewed (or by October 31, 1995

15 will have reviewed) State policies and administrative

16 and judicial procedures in effect for children aban17 doned at or shortly after birth (including policies

18 and procedures providing for legal representation of

19 such children); and

20 ‘‘(B) be implementing (or by October 31, 1996,

21 will be implementing) such policies and procedures

22 as the State determines, on the basis of the review

23 described in clause (i), to be necessary to enable per24 manent decisions to be made expeditiously with re25 spect to the placement of such children.
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1 SEC. 702. REPEALS AND CONFORMING AMENDMENTS.

2 (a) ABANDONED INFANTS ASSISTANCE.—

3 (1) REPEAL.—The Abandoned Infants Assist4 ance Act of 1988 (42 U.S.C. 670 note) is repealed.

5 (2) CONFORMING AMENDMENT.—Section

6 421(7) of the Domestic Violence Service Act of 1973

7 (42 U.S.C. 5061(7)) is amended to read as follows:

8 ‘‘(7) the term ‘boarder baby’ means an infant

9 who is medically cleared for discharge from an

10 acute-care hospital setting, but remains hospitalized

11 because of a lack of appropriate out-of-hospital

12 placement alternatives.’’.

13 (b) CHILD ABUSE PREVENTION AND TREATMENT.—

14 (1) REPEAL.—The Child Abuse Prevention and

15 Treatment Act (42 U.S.C. 5101 et seq.) is repealed.

16 (2) CONFORMING AMENDMENTS.—The Victims

17 of Crime Act of 1984 (42 U.S.C. 10601 et seq.) is

18 amended by striking section 1404A.

19 (c) ADOPTION OPPORTUNITIES.—The Child Abuse

20 Prevention and Treatment and Adoption Reform Act of

21 1978 (42 U.S.C. 5111 et seq.) is repealed.

22 (d) FAMILY SUPPORT CENTERS.—Subtitle F of title

23 VII of the Stewart B. McKinney Homeless Assistance Act

24 (42 U.S.C. 11481–11489) is repealed.
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1 (e) FOSTER CARE.—Section 472(d) (42 U.S.C.

2 672(d)) is amended by striking ‘‘422(b)(9)’’ and inserting

3 ‘‘425’’.

4 SEC. 703. EFFECTIVE DATE.

5 The amendments and repeals made by this title shall

6 take effect on October 1, 1995, and shall apply with re7 spect to activities under State programs on and after that

8 date.

9 TITLE VIII—SSI REFORM

10 Subtitle A—Eligibility of Children

11 for Benefits

12 SEC. 801. RESTRICTIONS ON ELIGIBILITY.

13 (a) IN GENERAL.—Section 1614(a)(3)(A) (42 U.S.C.

14 1382c(a)(3)(A)) is amended—

15 (1) by inserting ‘‘(i)’’ after ‘‘(3)(A)’’;

16 (2) by inserting ‘‘who has attained 18 years of

17 age’’ before ‘‘shall be considered’’;

18 (3) by striking ‘‘he’’ and inserting ‘‘the individ19 ual’’;

20 (4) by striking ‘‘(or, in the case of an individual

21 under the age of 18, if he suffers from any medically

22 determinable physical or mental impairment of com23 parable severity)’’; and

24 (5) by adding after and below the end the fol25 lowing:
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1 ‘‘(ii) An individual who has not attained 18 years of

2 age shall be considered to be disabled for purposes of this

3 title for a month if the individual has any medically deter4 minable physical or mental impairment (or combination

5 of impairments) that meets the requirements, applicable

6 to individuals who have not attained 18 years of age, of

7 the Listings of Impairments set forth in appendix 1 of

8 subpart P of part 404 of title 20, Code of Federal Regula9 tions, or the individual has a combination of impairments

10 the effect of which should be considered disabling for pur11 poses of this title. In applying this clause, such Listings

12 shall not include maladaptive behavior or psychoactive

13 substance dependence disorder (as specified in the appen14 dix setting forth such Listings).’’.

15 (b) TRANSITION TO NEW ELIGIBILITY CRITERIA.—

16 Within 3 months after the date of the enactment of this

17 Act, the Commissioner of Social Security shall establish

18 a functional equivalency standard separate from the List19 ing of Impairments (set forth in appendix 1 of subpart

20 P of part 404 of title 20, Code of Federal Regulations

21 (revised as of April 1, 1994)) under which a child with

22 a combination of impairments should be considered dis23 abled for purposes of the supplemental security income

24 program under title XVI of the Social Security Act. With25 in 10 months after the date of the enactment of this Act,
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1 the Commissioner shall review the case of each individual

2 who, immediately before such date of enactment, qualified

3 for benefits under such program by reason of an individ4 ualized functional assessment in order to determine eligi5 bility under such Listings and the criteria established

6 under such standard.

7 SEC. 802. CONTINUING DISABILITY REVIEWS FOR CERTAIN

8 CHILDREN.

9 Section 1614(a)(3)(G) (42 U.S.C. 1382c(a)(3)(G)) is

10 amended—

11 (1) by inserting ‘‘(i)’’ after ‘‘(G)’’; and

12 (2) by adding at the end the following:

13 ‘‘(ii)(I) Not less frequently than once every 3 years,

14 the Commissioner shall redetermine the eligibility for ben15 efits under this title of each individual who has not at16 tained 18 years of age and is eligible for such benefits

17 by reason of disability.

18 ‘‘(II) Subclause (I) shall not apply to an individual

19 if the individual has an impairment (or combination of im20 pairments) which is (or are) not expected to improve.

21 ‘‘(III) Subject to recommendations made by the Com22 missioner, parents or guardians of recipients whose cases

23 are reviewed under this clause shall present, at the time

24 of review, evidence demonstrating that funds provided

25 under this title have been used to assist the recipient in
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1 improving the condition which was the basis for providing

2 benefits under this title.’’.

3 SEC. 803. DISABILITY REVIEW REQUIRED FOR SSI RECIPI4 ENTS WHO ARE 18 YEARS OF AGE.

5 (a) IN GENERAL.—Section 1614(a)(3)(G) (42 U.S.C.

6 1382c(a)(3)(G)), as amended by section 802 of this sub7 title, is amended by adding at the end the following:

8 ‘‘(iii)(I) The Commissioner shall redetermine the eli9 gibility of a qualified individual for supplemental security

10 income benefits under this title by reason of disability, by

11 applying the criteria used in determining eligibility for

12 such benefits of applicants who have attained 18 years of

13 age.

14 ‘‘(II) The redetermination required by subclause (I)

15 with respect to a qualified individual shall be conducted

16 during the 1-year period that begins on the date the quali17 fied individual attains 18 years of age.

18 ‘‘(III) As used in this clause, the term ‘qualified indi19 vidual’ means an individual who attains 18 years of age

20 and is a recipient of benefits under this title by reason

21 of disability.

22 ‘‘(IV) A redetermination under subclause (I) of this

23 clause shall be considered a substitute for a review re24 quired under any other provision of this subparagraph.’’.
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1 (b) REPORT TO THE CONGRESS.—Not later than Oc2 tober 1, 1998, the Commissioner of Social Security shall

3 submit to the Committee on Ways and Means of the

4 House of Representatives and the Committee on Finance

5 of the Senate a report on the activities conducted under

6 section 1614(a)(3)(G)(iii) of the Social Security Act.

7 (c) CONFORMING REPEAL.—Section 207 of the So8 cial Security Independence and Program Improvements

9 Act of 1994 (42 U.S.C. 1382 note; 108 Stat. 1516) is

10 hereby repealed.

11 SEC. 804. APPLICABILITY.

12 (a) NEW ELIGIBILITY STANDARDS AND DISABILITY

13 REVIEWS FOR CHILDREN.—

14 (1) IN GENERAL.—Except as provided in para15 graph (2), the amendments made by sections 801

16 and 802 shall apply to benefits for months beginning

17 more than 9 months after the date of the enactment

18 of this Act, without regard to whether regulations

19 have been issued to implement such amendments.

20 (2) TRANSITIONAL RULE.—

21 (A) IN GENERAL.—For months beginning

22 after the date of the enactment of this Act and

23 before the first month to which the amend24 ments made by section 801 apply under para25 graph (1) and subject to subparagraph (B), no
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1 individual who has not attained 18 years of age

2 shall be considered to be disabled for purposes

3 of the supplemental security income program

4 under title XVI of the Social Security Act solely

5 on the basis of maladaptive behavior or

6 psychoactive substance dependence disorder.

7 (B) EXCEPTION FOR CURRENT BENE8 FICIARIES.—Subparagraph (A) shall not apply

9 in the case of an individual who is a recipient

10 of supplemental security income benefits under

11 such title for the month in which this Act be12 comes law.

13 (b) DISABILITY REVIEWS FOR 18-YEAR OLD RECIPI14 ENTS.—The amendments made by section 803 shall apply

15 to benefits for months beginning after the date of the en16 actment of this Act.

17 Subtitle B—Denial of SSI Benefits

18 by Reason of Disability to Drug

19 Addicts and Alcoholics

20 SEC. 811. DENIAL OF SSI BENEFITS BY REASON OF DISABIL21 ITY TO DRUG ADDICTS AND ALCOHOLICS.

22 (a) IN GENERAL.—Section 1614(a)(3) (42 U.S.C.

23 1382c(a)(3)) is amended by adding at the end the follow24 ing:
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1 ‘‘(I) Notwithstanding subparagraph (A), an individ2 ual shall not be considered to be disabled for purposes of

3 this title if alcoholism or drug addiction would (but for

4 this subparagraph) be a contributing factor material to

5 the Commissioner’s determination that the individual is

6 disabled.’’.

7 (b) CONFORMING AMENDMENTS.—

8 (1) Section 1611(e) (42 U.S.C. 1382(e)) is

9 amended by striking paragraph (3).

10 (2) Section 1631(a)(2)(A)(ii) (42 U.S.C.

11 1383(a)(2)(A)(ii)) is amended—

12 (A) by striking ‘‘(I)’’; and

13 (B) by striking subclause (II).

14 (3) Section 1631(a)(2)(B) (42 U.S.C.

15 1383(a)(2)(B)) is amended—

16 (A) by striking clause (vii);

17 (B) in clause (viii), by striking ‘‘(ix)’’ and

18 inserting ‘‘(viii)’’;

19 (C) in clause (ix)—

20 (i) by striking ‘‘(viii)’’ and inserting

21 ‘‘(vii)’’; and

22 (ii) in subclause (II), by striking all

23 that follows ‘‘15 years’’ and inserting a pe24 riod;

25 (D) in clause (xiii)—
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1 (i) by striking ‘‘(xii)’’ and inserting

2 ‘‘(xi)’’; and

3 (ii) by striking ‘‘(xi)’’ and inserting

4 ‘‘(x)’’; and

5 (E) by redesignating clauses (viii) through

6 (xiii) as clauses (vii) through (xii), respectively.

7 (4) Section 1631(a)(2)(D)(i)(II) (42 U.S.C.

8 1383(a)(2)(D)(i)(II)) is amended by striking all that

9 follows ‘‘$25.00 per month’’ and inserting a period.

10 (5) Section 1634 (42 U.S.C. 1383c) is amended

11 by striking subsection (e).

12 (6) Section 201(c)(1) of the Social Security

13 Independence and Program Improvements Act of

14 1994 (42 U.S.C. 425 note) is amended—

15 (A) by striking ‘‘—’’ and all that follows

16 through ‘‘(A)’’ the 1st place such term appears;

17 (B) by striking ‘‘and’’ the 3rd place such

18 term appears;

19 (C) by striking subparagraph (B);

20 (D) by striking ‘‘either subparagraph (A)

21 or subparagraph (B)’’ and inserting ‘‘the pre22 ceding sentence’’; and

23 (E) by striking ‘‘subparagraph (A) or (B)’’

24 and inserting ‘‘the preceding sentence’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect on October 1, 1995, and shall

3 apply with respect to months beginning on or after such

4 date.

5 (d) FUNDING OF CERTAIN PROGRAMS FOR DRUG

6 ADDICTS AND ALCOHOLICS.—Out of any money in the

7 Treasury of the United States not otherwise appropriated,

8 the Secretary of the Treasury shall pay to the Director

9 of the National Institute on Drug Abuse—

10 (1) $95,000,000, for each of fiscal years 1997,

11 1998, 1999, and 2000, for expenditure through the

12 Federal Capacity Expansion Program to expand the

13 availability of drug treatment; and

14 (2) $5,000,000 for each of fiscal years 1997,

15 1998, 1999, and 2000 to be expended solely on the

16 medication development project to improve drug

17 abuse and drug treatment research.

18 TITLE IX—FINANCING

19 Subtitle A—Treatment of Aliens

20 SEC. 901. EXTENSION OF DEEMING OF INCOME AND RE21 SOURCES UNDER AFDC, SSI, AND FOOD

22 STAMP PROGRAMS.

23 (a) IN GENERAL.—Except as provided in subsections

24 (b) and (c), in applying sections 415 and 1621 of the So25 cial Security Act and section 5(i) of the Food Stamp Act
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1 of 1977, the period in which each respective section other2 wise applies with respect to an alien shall be extended

3 through the date (if any) on which the alien becomes a

4 citizen of the United States (under chapter 2 of title III

5 of the Immigration and Nationality Act).

6 (b) EXCEPTION.—Subsection (a) shall not apply to

7 an alien if—

8 (1) the alien has been lawfully admitted to the

9 United States for permanent residence, has attained

10 75 years of age, and has resided in the United

11 States for at least 5 years;

12 (2) the alien—

13 (A) is a veteran (as defined in section 101

14 of title 38, United States Code) with a dis15 charge characterized as an honorable discharge,

16 (B) is on active duty (other than active

17 duty for training) in the Armed Forces of the

18 United States, or

19 (C) is the spouse or unmarried dependent

20 child of an individual described in subparagraph

21 (A) or (B);

22 (3) the alien is the subject of domestic violence

23 by the alien’s spouse and a divorce between the alien

24 and the alien’s spouse has been initiated through the
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1 filing of an appropriate action in an appropriate

2 court; or

3 (4) there has been paid with respect to the self4 employment income or employment of the alien, or

5 of a parent or spouse of the alien, taxes under chap6 ter 2 or chapter 21 of the Internal Revenue Code of

7 1986 in each of 20 different calendar quarters.

8 (c) HOLD HARMLESS FOR MEDICAID ELIGIBILITY.—

9 Subsection (a) shall not apply with respect to determina10 tions of eligibility for benefits under part A of title IV of

11 the Social Security Act or under the supplemental income

12 security program under title XVI of such Act but only in13 sofar as such determinations provide for eligibility for

14 medical assistance under title XIX of such Act.

15 (d) EFFECTIVE DATE.—This section shall take effect

16 on October 1, 1995.

17 SEC. 902. REQUIREMENTS FOR SPONSOR’S AFFIDAVITS OF

18 SUPPORT.

19 (a) IN GENERAL.—Title II of the Immigration and

20 Nationality Act is amended by inserting after section 213

21 the following new section:

22 ‘‘REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF SUPPORT

23 ‘‘SEC. 213A. (a) ENFORCEABILITY.—

24 ‘‘(1) IN GENERAL.—No affidavit of support

25 may be accepted by the Attorney General or by any

26 consular officer to establish that an alien is not ex-
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1 cludable under section 212(a)(4) unless such affida2 vit is executed as a contract—

3 ‘‘(A) which is legally enforceable against

4 the sponsor by the Federal Government, by a

5 State, or by any political subdivision of a State,

6 providing cash benefits under a public cash as7 sistance program (as defined in subsection

8 (f)(2)), but not later than 5 years after the date

9 the alien last receives any such cash benefit;

10 and

11 ‘‘(B) in which the sponsor agrees to submit

12 to the jurisdiction of any Federal or State court

13 for the purpose of actions brought under sub14 section (e)(2).

15 ‘‘(2) EXPIRATION OF LIABILITY.—Such con16 tract shall only apply with respect to cash benefits

17 described in paragraph (1)(A) provided to an alien

18 before the earliest of the following:

19 ‘‘(A) CITIZENSHIP.—The date the alien be20 comes a citizen of the United States under

21 chapter 2 of title III.

22 ‘‘(B) VETERAN.—The first date the alien

23 is described in section 901(b)(2)(A).

24 ‘‘(C) PAYMENT OF SOCIAL SECURITY

25 TAXES.—The first date as of which the condi-
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1 tion described in section 901(b)(4) is met with

2 respect to the alien.

3 ‘‘(3) NONAPPLICATION DURING CERTAIN PERI4 ODS.—Such contract also shall not apply with re5 spect to cash benefits described in paragraph (1)(A)

6 provided during any period in which the alien is de7 scribed in section 901(b)(2)(B) or 901(b)(2)(C).

8 ‘‘(b) FORMS.—Not later than 90 days after the date

9 of enactment of this section, the Attorney General, in con10 sultation with the Secretary of State and the Secretary

11 of Health and Human Services, shall formulate an affida12 vit of support consistent with the provisions of this sec13 tion.

14 ‘‘(c) NOTIFICATION OF CHANGE OF ADDRESS.—

15 ‘‘(1) REQUIREMENT.—The sponsor shall notify

16 the Federal Government and the State in which the

17 sponsored alien is currently resident within 30 days

18 of any change of address of the sponsor during the

19 period specified in subsection (a)(1)(A).

20 ‘‘(2) ENFORCEMENT.—Any person subject to

21 the requirement of paragraph (1) who fails to satisfy

22 such requirement shall be subject to a civil penalty

23 of—

24 ‘‘(A) not less than $250 or more than

25 $2,000, or
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1 ‘‘(B) if such failure occurs with knowledge

2 that the sponsored alien has received any bene3 fit under any means-tested public benefits pro4 gram, not less than $2,000 or more than

5 $5,000.

6 ‘‘(d) REIMBURSEMENT OF GOVERNMENT EX7 PENSES.—

8 ‘‘(1) REQUEST FOR REIMBURSEMENT.—

9 ‘‘(A) IN GENERAL.—Upon notification that

10 a sponsored alien has received any cash benefits

11 described in subsection (a)(1)(A), the appro12 priate Federal, State, or local official shall re13 quest reimbursement by the sponsor in the

14 amount of such cash benefits.

15 ‘‘(B) REGULATIONS.—The Attorney Gen16 eral, in consultation with the Secretary of

17 Health and Human Services, shall prescribe

18 such regulations as may be necessary to carry

19 out subparagraph (A).

20 ‘‘(2) INITIATION OF ACTION.—If within 45 days

21 after requesting reimbursement, the appropriate

22 Federal, State, or local agency has not received a re23 sponse from the sponsor indicating a willingness to

24 commence payments, an action may be brought
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1 against the sponsor pursuant to the affidavit of sup2 port.

3 ‘‘(3) FAILURE TO ABIDE BY REPAYMENT

4 TERMS.—If the sponsor fails to abide by the repay5 ment terms established by such agency, the agency

6 may, within 60 days of such failure, bring an action

7 against the sponsor pursuant to the affidavit of sup8 port.

9 ‘‘(4) LIMITATION ON ACTIONS.—No cause of

10 action may be brought under this subsection later

11 than 5 years after the date the alien last received

12 any cash benefit described in subsection (a)(1)(A).

13 ‘‘(f) DEFINITIONS.—For the purposes of this section:

14 ‘‘(1) SPONSOR.—The term ‘sponsor’ means an

15 individual who—

16 ‘‘(A) is a citizen or national of the United

17 States or an alien who is lawfully admitted to

18 the United States for permanent residence;

19 ‘‘(B) is 18 years of age or over; and

20 ‘‘(C) is domiciled in any State.

21 ‘‘(2) PUBLIC CASH ASSISTANCE PROGRAM.—

22 The term ‘public cash assistance program’ means a

23 program of the Federal Government or of a State or

24 political subdivision of a State that provides direct

25 cash assistance for the purpose of income mainte-
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1 nance and in which the eligibility of an individual,

2 household, or family eligibility unit for cash benefits

3 under the program, or the amount of such cash ben4 efits, or both are determined on the basis of income,

5 resources, or financial need of the individual, house6 hold, or unit. Such term does not include any pro7 gram insofar as it provides medical, housing, edu8 cation, job training, food, or in-kind assistance or

9 social services.’’.

10 (b) CLERICAL AMENDMENT.—The table of contents

11 of such Act is amended by inserting after the item relating

12 to section 213 the following:

‘‘Sec. 213A. Requirements for sponsor’s affidavit of support.’’.

13 (c) EFFECTIVE DATE.—Subsection (a) of section

14 213A of the Immigration and Nationality Act, as inserted

15 by subsection (a) of this section, shall apply to affidavits

16 of support executed on or after a date specified by the

17 Attorney General, which date shall be not earlier than 60

18 days (and not later than 90 days) after the date the Attor19 ney General formulates the form for such affidavits under

20 subsection (b) of such section 213A.
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1 SEC. 903. EXTENDING REQUIREMENT FOR AFFIDAVITS OF

2 SUPPORT TO FAMILY-RELATED AND DIVER3 SITY IMMIGRANTS.

4 (A) IN GENERAL.—Section 212(a)(4) of the Immi5 gration and Nationality Act (8 U.S.C. 1182(a)(4)) is

6 amended to read as follows:

7 ‘‘(4) PUBLIC CHARGE AND AFFIDAVITS OF SUP8 PORT.—

9 ‘‘(A) PUBLIC CHARGE.—Any alien who, in

10 the opinion of the consular officer at the time

11 of application for a visa, or in the opinion of

12 the Attorney General at the time of application

13 for admission or adjustment of status, is likely

14 at any time to become a public charge is exclud15 able.

16 ‘‘(B) AFFIDAVITS OF SUPPORT.—Any im17 migrant who seeks admission or adjustment of

18 status as any of the following is excludable un19 less there has been executed with respect to the

20 immigrant an affidavit of support pursuant to

21 section 213A:

22 ‘‘(i) As an immediate relative (under

23 section 201(b)(2)).

24 ‘‘(ii) As a family-sponsored immigrant

25 under section 203(a) (or as the spouse or
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1 child under section 203(d) of such an im2 migrant).

3 ‘‘(iii) As the spouse or child (under

4 section 203(d)) of an employment-based

5 immigrant under section 203(b).

6 ‘‘(iv) As a diversity immigrant under

7 section 203(c) (or as the spouse or child

8 under section 203(d) of such an immi9 grant).’’.

10 (b) EFFECTIVE DATE.—The amendment made by

11 subsection (a) shall apply to aliens with respect to whom

12 an immigrant visa is issued (or adjustment of status is

13 granted) after the date specified by the Attorney General

14 under section 902(c).

15 Subtitle B—Limitation on Emer16 gency Assistance Expenditures

17 SEC. 911. LIMITATION ON EXPENDITURES FOR EMERGENCY

18 ASSISTANCE.

19 (a) IN GENERAL.—Section 403(a)(5) (42 U.S.C.

20 602(a)(5)) is amended to read as follows:

21 ‘‘(5) in the case of any State, an amount equal

22 to the lesser of—

23 ‘‘(A) 50 percent of the total amount ex24 pended under the State plan during such quar-
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1 ter as emergency assistance to needy families

2 with children; or

3 ‘‘(B) the greater of—

4 ‘‘(i) the total amount expended under

5 the State plan during the fiscal year that

6 immediately precedes the fiscal year in

7 which the quarter occurs; multiplied by

8 ‘‘(I) 4 percent, if the national un9 employment rate for the United

10 States (as determined by the Sec11 retary of Labor) for the 3rd or 4th

12 quarter of the immediately preceding

13 fiscal year is at least 7 percent; or

14 ‘‘(II) 3 percent, otherwise; or

15 ‘‘(ii) the total amount expended under

16 the State plan during fiscal year 1995 as

17 emergency assistance to needy families

18 with children.’’.

19 (b) AUTHORITY OF STATES TO DEFINE EMERGENCY

20 ASSISTANCE.—Section 406(e)(1) (42 U.S.C. 606(e)(1)) is

21 amended to read as follows:

22 ‘‘(e)(1)(A) The term ‘emergency assistance to needy

23 families with children’ means emergency assistance fur24 nished by an eligible State with respect to an eligible needy
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1 child to avoid destitution of the child or to provide living

2 arrangements in a home for the child.

3 ‘‘(B) As used in this paragraph:

4 ‘‘(i) The term ‘emergency assistance’ means

5 emergency assistance as provided for in the State

6 plan approved under section 402 of an eligible State,

7 but shall not include care for an eligible needy child

8 or other member of the household in which the child

9 is living to the extent that the child or other member

10 is entitled to such care as medical assistance under

11 the State plan under title XIX.

12 ‘‘(ii) The term ‘eligible needy child’ means a

13 needy child—

14 ‘‘(I) who has not attained 21 years of age;

15 ‘‘(II) who is or (within such period as the

16 Secretary may specify) has been living with any

17 relative specified in subsection (a)(1) in a place

18 of residence maintained by 1 or more of such

19 relatives as the home of the relative or relatives;

20 ‘‘(III) who is without available resources;

21 and

22 ‘‘(IV) whose requirement for emergency as23 sistance did not arise because the child or rel24 ative refused without good cause to accept em25 ployment or training for employment.
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1 ‘‘(iii) The term ‘‘eligible State’’ means a State

2 whose State plan approved under section 402 in3 cludes provision for emergency assistance.’’.

4 Subtitle C—Tax Provisions

5 SEC. 921. CERTAIN FEDERAL ASSISTANCE INCLUDIBLE IN

6 GROSS INCOME.

7 (a) IN GENERAL.—Part II of subchapter B of chap8 ter 1 of the Internal Revenue Code of 1986 (relating to

9 items specifically included in gross income) is amended by

10 adding at the end the following new section:

11 ‘‘SEC. 91. CERTAIN FEDERAL ASSISTANCE.

12 ‘‘(a) IN GENERAL.—Gross income shall include an

13 amount equal to the specified Federal assistance received

14 by the taxpayer during the taxable year.

15 ‘‘(b) SPECIFIED FEDERAL ASSISTANCE.—For pur16 poses of this section—

17 ‘‘(1) IN GENERAL.—The term ‘specified Federal

18 assistance’ means—

19 ‘‘(A) aid provided under a State plan ap20 proved under part A of title IV of the Social

21 Security Act (relating to aid to families with de22 pendent children), and

23 ‘‘(B) assistance provided under any food

24 stamp program.
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1 ‘‘(2) SPECIAL RULE.—In the case of assistance

2 provided under a program described in subsection

3 (d)(2), such term shall include only the assistance

4 required to be provided under section 21 or 22 (as

5 the case may be) of the Food Stamp Act of 1977.

6 ‘‘(c) INDIVIDUALS SUBJECT TO TAX.—For purposes

7 of this section—

8 ‘‘(1) AFDC.—Aid described in subsection

9 (b)(1)(A) shall be treated as received by the relative

10 with whom the dependent child is living (within the

11 meaning of section 406(c) of the Social Security

12 Act).

13 ‘‘(2) FOOD STAMPS.—In the case of assistance

14 described in subsection (b)(1)(B)—

15 ‘‘(A) IN GENERAL.—Except as provided in

16 subparagraph (B), such assistance shall be

17 treated as received ratably by each of the indi18 viduals taken into account in determining the

19 amount of such assistance for the benefit of

20 such individuals.

21 ‘‘(B) ASSISTANCE TO CHILDREN TREATED

22 AS RECEIVED BY PARENTS, ETC.—The amount

23 of assistance which would (but for this subpara24 graph) be treated as received by a child shall be

25 treated as received as follows:
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1 ‘‘(i) If there is an includible parent,

2 such amount shall be treated as received

3 by the includible parent (or if there is

4 more than 1 includible parent, as received

5 ratably by each includible parent).

6 ‘‘(ii) If there is no includible parent

7 and there is an includible grandparent,

8 such amount shall be treated as received

9 by the includible grandparent (or if there

10 is more than 1 includible grandparent, as

11 received ratably by each includible grand12 parent).

13 ‘‘(iii) If there is no includible parent

14 or grandparent, such amount shall be

15 treated as received ratably by each includ16 ible adult.

17 ‘‘(C) DEFINITIONS.—For purposes of sub18 paragraph (B)—

19 ‘‘(i) CHILD.—The term ‘child’ means

20 any individual who has not attained age 16

21 as of the close of the taxable year. Such

22 term shall not include any individual who

23 is an includible parent of a child (as de24 fined in the preceding sentence).
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1 ‘‘(ii) ADULT.—The term ‘adult’ means

2 any individual who is not a child.

3 ‘‘(iii) INCLUDIBLE.—The term ‘in4 cludible’ means, with respect to any indi5 vidual, an individual who is included in de6 termining the amount of assistance paid to

7 the household which includes the child.

8 ‘‘(iv) PARENT.—The term ‘parent’ in9 cludes the stepfather and stepmother of

10 the child.

11 ‘‘(v) GRANDPARENT.—The term

12 ‘grandparent’ means any parent of a par13 ent of the child.

14 ‘‘(d) FOOD STAMP PROGRAM.—For purposes of sub15 section (b), the term ‘food stamp program’ means—

16 ‘‘(1) the food stamp program (as defined in sec17 tion 3(h) of the Food Stamp Act of 1977), and

18 ‘‘(2) the portion of the program under sections

19 21 and 22 of such Act which provides food assist20 ance.’’

21 (b) REPORTING.—

22 (1) IN GENERAL.—Subpart B of part III of

23 subchapter A of chapter 61 of such Code is amended

24 by adding at the end the following new section:
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1 ‘‘SEC. 6050Q. PAYMENTS OF CERTAIN FEDERAL ASSIST2 ANCE.

3 ‘‘(a) REQUIREMENT OF REPORTING.—The appro4 priate official shall make a return, according to the forms

5 and regulations prescribed by the Secretary, setting

6 forth—

7 ‘‘(1) the aggregate amount of specified Federal

8 assistance paid to any individual during any cal9 endar year, and

10 ‘‘(2) the name, address, and TIN of such indi11 vidual.

12 ‘‘(b) STATEMENTS TO BE FURNISHED TO PERSONS

13 WITH RESPECT TO WHOM INFORMATION IS REQUIRED.—

14 Every person required to make a return under subsection

15 (a) shall furnish to each individual whose name is re16 quired to be set forth in such return a written statement

17 showing—

18 ‘‘(1) the name of the agency making the pay19 ments, and

20 ‘‘(2) the aggregate amount of payments made

21 to the individual which are required to be shown on

22 such return.

23 The written statement required under the preceding sen24 tence shall be furnished to the individual on or before Jan25 uary 31 of the year following the calendar year for which

26 the return under subsection (a) was required to be made.
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1 ‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur2 poses of this section—

3 ‘‘(1) APPROPRIATE OFFICIAL.—The term ‘ap4 propriate official’ means—

5 ‘‘(A) in the case of specified Federal as6 sistance described in section 91(b)(1)(A), the

7 head of the State agency administering the plan

8 under which such assistance is provided,

9 ‘‘(B) in the case of specified Federal as10 sistance described in section 91(b)(1)(B), the

11 head of the State agency administering the pro12 gram under which such assistance is provided,

13 and

14 ‘‘(C) in the case of specified Federal assist15 ance described in section 91(b)(1)(C), the head

16 of the State pubic housing agency administering

17 the program under which such assistance is

18 provided.

19 ‘‘(2) SPECIFIED FEDERAL ASSISTANCE.—The

20 term ‘specified Federal assistance’ has the meaning

21 given such term by section 91(b).

22 ‘‘(3) AMOUNTS TREATED AS PAID.—The rules

23 of section 91(c) shall apply for purposes of deter24 mining to whom specified Federal assistance is

25 paid.’’
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1 (2) PENALTIES.—

2 (A) Subparagraph (B) of section

3 6724(b)(1) of such Code is amended by redesig4 nating clauses (ix) through (xiv) as clauses (x)

5 through (xv), respectively, and by inserting

6 after clause (viii) the following new clause:

7 ‘‘(ix) section 6050Q (relating to pay8 ments of certain Federal assistance),’’.

9 (B) Paragraph (2) of section 6724(d) of

10 such Code is amended by redesignating sub11 paragraphs (Q) through (T) as subparagraphs

12 (R) through (U), respectively, and by inserting

13 after subparagraph (P) the following new sub14 paragraph:

15 ‘‘(Q) section 6050Q(b) (relating to pay16 ments of certain Federal assistance),’’.

17 (c) CLERICAL AMENDMENTS.—

18 (1) The table of sections for part II of sub19 chapter B of chapter 1 of such Code is amended by

20 adding at the end the following new item:

‘‘Sec. 91. Certain Federal assistance.’’

21 (2) The table of sections for subpart B of part

22 III of subchapter A of chapter 61 of such Code is

23 amended by adding at the end the following new

24 item:

‘‘Sec. 6050Q. Payments of certain Federal assistance.’’
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to benefits received after December

3 31, 1995.

4 SEC. 922. EARNED INCOME TAX CREDIT DENIED TO INDI5 VIDUALS NOT AUTHORIZED TO BE EM6 PLOYED IN THE UNITED STATES.

7 (a) IN GENERAL.—Section 32(c)(1) of the Internal

8 Revenue Code of 1986 (relating to individuals eligible to

9 claim the earned income tax credit) is amended by adding

10 at the end the following new subparagraph:

11 ‘‘(F) IDENTIFICATION NUMBER REQUIRE12 MENT.—The term ‘eligible individual’ does not

13 include any individual who does not include on

14 the return of tax for the taxable year—

15 ‘‘(i) such individual’s taxpayer identi16 fication number, and

17 ‘‘(ii) if the individual is married (with18 in the meaning of section 7703), the tax19 payer identification number of such indi20 vidual’s spouse.’’

21 (b) SPECIAL IDENTIFICATION NUMBER.—Section 32

22 of such Code is amended by adding at the end the follow23 ing new subsection:

24 ‘‘(k) IDENTIFICATION NUMBERS.—Solely for pur25 poses of subsections (c)(1)(F) and (c)(3)(D), a taxpayer
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1 identification number means a social security number is2 sued to an individual by the Social Security Administra3 tion (other than a social security number issued pursuant

4 to clause (II) (or that portion of clause (III) that relates

5 to clause (II)) of section 205(c)(2)(B)(i) of the Social Se6 curity Act).’’

7 (c) EXTENSION OF PROCEDURES APPLICABLE TO

8 MATHEMATICAL OR CLERICAL ERRORS.—Section

9 6213(g)(2) of such Code (relating to the definition of

10 mathematical or clerical errors) is amended by striking

11 ‘‘and’’ at the end of subparagraph (D), by striking the

12 period at the end of subparagraph (E) and inserting ‘‘,

13 and’’, and by inserting after subparagraph (E) the follow14 ing new subparagraph:

15 ‘‘(F) an omission of a correct taxpayer

16 identification number required under section 32

17 (relating to the earned income tax credit) to be

18 included on a return.’’

19 (d) EFFECTIVE DATE.—The amendments made by

20 this section shall apply to taxable years beginning after

21 December 31, 1995.
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1 SEC. 923. PHASEOUT OF EARNED INCOME CREDIT FOR IN2 DIVIDUALS HAVING MORE THAN $2,500 OF

3 TAXABLE INTEREST AND DIVIDENDS.

4 (a) IN GENERAL.—Section 32 of the Internal Reve5 nue Code of 1986 is amended by redesignating subsections

6 (i) and (j) as subsections (j) and (k), respectively, and by

7 inserting after subsection (h) the following new subsection:

8 ‘‘(i) PHASEOUT OF CREDIT FOR INDIVIDUALS HAV9 ING MORE THAN $2,500 OF TAXABLE INTEREST AND

10 DIVIDENDS.—If the aggregate amount of interest and

11 dividends includible in the gross income of the taxpayer

12 for the taxable year exceeds $2,500, the amount of the

13 credit which would (but for this subsection) be allowed

14 under this section for such taxable year shall be reduced

15 (but not below zero) by an amount which bears the same

16 ratio to such amount of credit as such excess bears to

17 $650.’’

18 (b) INFLATION ADJUSTMENT.—Subsection (j) of sec19 tion 32 of such Code (relating to inflation adjustments),

20 as redesignated by subsection (a), is amended by striking

21 paragraph (2) and by inserting the following new para22 graphs:

23 ‘‘(2) INTEREST AND DIVIDEND INCOME LIMITA24 TION.—In the case of a taxable year beginning in a

25 calendar year after 1996, each dollar amount con-
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1 tained in subsection (i) shall be increased by an

2 amount equal to—

3 ‘‘(A) such dollar amount, multiplied by

4 ‘‘(B) the cost-of-living adjustment deter5 mined under section 1(f)(3) for the calendar

6 year in which the taxable year begins, deter7 mined by substituting ‘calendar year 1995’ for

8 ‘calendar year 1992’ in subparagraph (B)

9 thereof.

10 ‘‘(3) ROUNDING.—If any amount as adjusted

11 under paragraph (1) or (2) is not a multiple of $10,

12 such dollar amount shall be rounded to the nearest

13 multiple of $10.’’

14 (c) EFFECTIVE DATE.—The amendments made by

15 this section shall apply to taxable years beginning after

16 December 31, 1995.

17 SEC. 924. AFDC AND FOOD STAMP BENEFITS NOT TAKEN

18 INTO ACCOUNT FOR PURPOSES OF THE

19 EARNED INCOME TAX CREDIT.

20 (a) IN GENERAL.—Section 32 of the Internal Reve21 nue Code of 1986 (relating to the earned income tax cred22 it), as amended by section 932(b) of this Act, is amended

23 by adding at the end the following new subsection:

24 ‘‘(l) ADJUSTED GROSS INCOME DETERMINED WITH25 OUT REGARD TO CERTAIN FEDERAL ASSISTANCE.—For
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1 purposes of this section, adjusted gross income shall be

2 determined without regard to any amount which is includ3 ible in gross income solely by reason of section 91.’’.

4 (b) EFFECTIVE DATE.—The amendment made by

5 this section shall apply to taxable years beginning after

6 December 31, 1995.

7 TITLE X—FOOD ASSISTANCE

8 REFORM

9 Subtitle A—Food Stamp Program

10 Integrity and Reform

11 SEC. 1001. AUTHORITY TO ESTABLISH AUTHORIZATION

12 PERIODS.

13 Section 9(a)(1) of the Food Stamp Act of 1977 (7

14 U.S.C. 2018(a)(1)) is amended by adding at the end the

15 following: ‘‘The Secretary is authorized to issue regula16 tions establishing specific time periods during which au17 thorization to accept and redeem coupons under the food

18 stamp program shall be valid.’’.

19 SEC. 1002. SPECIFIC PERIOD FOR PROHIBITING PARTICIPA20 TION OF STORES BASED ON LACK OF BUSI21 NESS INTEGRITY.

22 Section 9(a)(1) of the Food Stamp Act of 1977 (7

23 U.S.C. 2018(a)(1)), as amended by section 1001, is

24 amended by adding at the end the following: ‘‘The Sec25 retary is authorized to issue regulations establishing spe-
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1 cific time periods during which a retail food store or

2 wholesale food concern that has an application for ap3 proval to accept and redeem coupons denied or that has

4 such an approval withdrawn on the basis of business integ5 rity and reputation cannot submit a new application for

6 approval. Such periods shall reflect the severity of business

7 integrity infractions that are the basis of such denials or

8 withdrawals.’’.

9 SEC. 1003. INFORMATION FOR VERIFYING ELIGIBILITY FOR

10 AUTHORIZATION.

11 Section 9(c) of the Food Stamp Act of 1977 (7

12 U.S.C. 2018(c)) is amended—

13 (1) in the first sentence by inserting ‘‘, which

14 may include relevant income and sales tax filing doc15 uments,’’ after ‘‘submit information’’ ; and

16 (2) by inserting after the first sentence the fol17 lowing: ‘‘The regulations may require retail food

18 stores and wholesale food concerns to provide writ19 ten authorization for the Secretary to verify all rel20 evant tax filings with appropriate agencies and to

21 obtain corroborating documentation from other

22 sources in order that the accuracy of information

23 provided by such stores and concerns may be

24 verified.’’.
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1 SEC. 1004. WAITING PERIOD FOR STORES THAT INITIALLY

2 FAIL TO MEET AUTHORIZATION CRITERIA.

3 Section 9(d) of the Food Stamp Act of 1977 (7

4 U.S.C. 2018(d)) is amended by adding at the end the fol5 lowing: ‘‘Regulations issued pursuant to this Act shall pro6 hibit a retail food store or wholesale food concern that has

7 an application for approval to accept and redeem coupons

8 denied because it does not meet criteria for approval estab9 lished by the Secretary in regulations from submitting a

10 new application for six months from the date of such

11 denial.’’.

12 SEC. 1005. BASES FOR SUSPENSIONS AND DISQUALIFICA13 TIONS.

14 Section 12(a) of the Food Stamp Act of 1977 (7

15 U.S.C. 2021(a)) is amended by adding at the end the fol16 lowing: ‘‘Regulations issued pursuant to this Act shall pro17 vide criteria for the finding of violations and the suspen18 sion or disqualification of a retail food store or wholesale

19 food concern on the basis of evidence which may include,

20 but is not limited to, facts established through on-site in21 vestigations, inconsistent redemption data, or evidence ob22 tained through transaction reports under electronic benefit

23 transfer systems.’’.
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1 SEC. 1006. AUTHORITY TO SUSPEND STORES VIOLATING

2 PROGRAM REQUIREMENTS PENDING ADMIN3 ISTRATIVE AND JUDICIAL REVIEW.

4 (a) Section 12(a) of the Food Stamp Act of 1977 (7

5 U.S.C. 2021(a)), as amended by section 1005, is amended

6 by adding at the end the following: ‘‘Such regulations may

7 establish criteria under which the authorization of a retail

8 food store or wholesale food concern to accept and redeem

9 coupons may be suspended at the time such store or con10 cern is initially found to have committed violations of pro11 gram requirements. Such suspension may coincide with

12 the period of a review as provided in section 14. The Sec13 retary shall not be liable for the value of any sales lost

14 during any suspension or disqualification period.’’.

15 (b) Section 14(a) of the Food Stamp Act of 1977 (7

16 U.S.C. 2023(a)) is amended—

17 (1) in the first sentence by inserting ‘‘sus18 pended,’’ before ‘‘disqualified or subjected’’;

19 (2) in the fifth sentence by inserting before the

20 period at the end the following: ‘‘, except that in the

21 case of the suspension of a retail food store or

22 wholesale food concern pursuant to section 12(a),

23 such suspension shall remain in effect pending any

24 administrative or judicial review of the proposed dis25 qualification action, and the period of suspension
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1 shall be deemed a part of any period of disqualifica2 tion which is imposed.’’; and

3 (3) by striking the last sentence.

4 SEC. 1007. DISQUALIFICATION OF RETAILERS WHO ARE

5 DISQUALIFIED FROM THE WIC PROGRAM.

6 Section 12 of the Food Stamp Act of 1977 (7 U.S.C.

7 2021) is amended by adding at the end the following:

8 ‘‘(g) The Secretary shall issue regulations providing

9 criteria for the disqualification of approved retail food

10 stores and wholesale food concerns that are otherwise dis11 qualified from accepting benefits under the Special Sup12 plemental Nutrition Program for Women, Infants and

13 Children (WIC) authorized under section 17 of the Child

14 Nutrition Act of 1966. Such disqualification—

15 ‘‘(1) shall be for the same period as the dis16 qualification from the WIC Program;

17 ‘‘(2) may begin at a later date; and

18 ‘‘(3) notwithstanding section 14 of this Act,

19 shall not be subject to administrative or judicial re20 view.’’.
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1 SEC. 1008. PERMANENT DEBARMENT OF RETAILERS WHO

2 INTENTIONALLY SUBMIT FALSIFIED APPLI3 CATIONS.

4 Section 12 of the Food Stamp Act of 1977 (7 U.S.C.

5 2021), as amended by section 1007, is amended by adding

6 at the end the following:

7 ‘‘(h) The Secretary shall issue regulations providing

8 for the permanent disqualification of a retail food store

9 or wholesale food concern that is determined to have

10 knowingly submitted an application for approval to accept

11 and redeem coupons which contains false information

12 about one or more substantive matters which were the

13 basis for providing approval. Any disqualification imposed

14 under this subsection shall be subject to administrative

15 and judicial review pursuant to section 14, but such dis16 qualification shall remain in effect pending such review.’’.

17 SEC. 1009. EXPANDED CIVIL AND CRIMINAL FORFEITURE

18 FOR VIOLATIONS OF THE FOOD STAMP ACT.

19 (a) FORFEITURE OF ITEMS EXCHANGED IN FOOD

20 STAMP TRAFFICKING.—Section 15(g) of the Food Stamp

21 Act of 1977 (7 U.S.C. 2024(g)) is amended by striking

22 ‘‘or intended to be furnished’’.

23 (b) CIVIL AND CRIMINAL FORFEITURE.—Section 15

24 of the Food Stamp Act of 1977 (7 U.S.C. 2024)) is

25 amended by adding at the end the following:
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1 ‘‘(h)(1) CIVIL FORFEITURE FOR FOOD STAMP BENE2 FIT VIOLATIONS.—

3 ‘‘(A) Any food stamp benefits and any property,

4 real or personal—

5 ‘‘(i) constituting, derived from, or traceable

6 to any proceeds obtained directly or indirectly

7 from, or

8 ‘‘(ii) used, or intended to be used, to com9 mit, or to facilitate,

10 the commission of a violation of subsection (b) or

11 subsection (c) involving food stamp benefits having

12 an aggregate value of not less than $5,000, shall be

13 subject to forfeiture to the United States.

14 ‘‘(B) The provisions of chapter 46 of title 18,

15 relating to civil forfeitures shall extend to a seizure

16 or forfeiture under this subsection, insofar as appli17 cable and not inconsistent with the provisions of this

18 subsection.

19 ‘‘(2) CRIMINAL FORFEITURE FOR FOOD STAMP BEN20 EFIT VIOLATIONS.—

21 ‘‘(A)(i) Any person convicted of violating sub22 section (b) or subsection (c) involving food stamp

23 benefits having an aggregate value of not less than

24 $5,000, shall forfeit to the United States, irrespec25 tive of any State law—
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1 ‘‘(I) any food stamp benefits and any prop2 erty constituting, or derived from, or traceable

3 to any proceeds such person obtained directly or

4 indirectly as a result of such violation; and

5 ‘‘(II) any food stamp benefits and any of

6 such person’s property used, or intended to be

7 used, in any manner or part, to commit, or to

8 facilitate the commission of such violation.

9 ‘‘(ii) In imposing sentence on such person, the

10 court shall order that the person forfeit to the

11 United States all property described in this sub12 section.

13 ‘‘(B) All food stamp benefits and any property

14 subject to forfeiture under this subsection, any sei15 zure and disposition thereof, and any administrative

16 or judicial proceeding relating thereto, shall be gov17 erned by subsections (b), (c), (e), and (g) through

18 (p) of section 413 of the Comprehensive Drug Abuse

19 Prevention and Control Act of 1970 (21 U.S.C.

20 853), insofar as applicable and not inconsistent with

21 the provisions of this subsection.

22 ‘‘(3) This subsection shall not apply to property spec23 ified in subsection (g) of this section.
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1 ‘‘(4) The Secretary may prescribe such rules and reg2 ulations as may be necessary to carry out this sub3 section.’’.

4 SEC. 1010. EXPANDED AUTHORITY FOR SHARING INFORMA5 TION PROVIDED BY RETAILERS.

6 (a) Section 205(c)(2)(C)(iii) (42 U.S.C.

7 405(c)(2)(C)(iii)) (as amended by section 316(a) of the

8 Social Security Administrative Reform Act of 1994 (Pub9 lic Law 103–296; 108 Stat. 1464) is amended—

10 (1) by inserting in the first sentence of

11 subclause (II) after ‘‘instrumentality of the United

12 States’’ the following: ‘‘, or State government offi13 cers and employees with law enforcement or inves14 tigative responsibilities, or State agencies that have

15 the responsibility for administering the Special Sup16 plemental Nutrition Program for Women, Infants

17 and Children (WIC)’’;

18 (2) by inserting in the last sentence of

19 subclause (II) immediately after ‘‘other Federal’’ the

20 words ‘‘or State’’; and

21 (3) by inserting ‘‘or a State’’ in subclause (III)

22 immediately after ‘‘United States’’.

23 (b) Section 6109(f)(2) of the Internal Revenue Code

24 of 1986 (26 U.S.C. 6109(f)(2)) (as added by section

25 316(b) of the Social Security Administrative Reform
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1 Act of 1994 (Public Law 103–296; 108 Stat. 1464)) is

2 amended—

3 (1) by inserting in subparagraph (A) after ‘‘in4 strumentality of the United States’’ the following: ‘‘,

5 or State government officers and employees with law

6 enforcement or investigative responsibilities, or State

7 agencies that have the responsibility for administer8 ing the Special Supplemental Nutrition Program for

9 Women, Infants and Children (WIC)’’;

10 (2) in the last sentence of subparagraph (A) by

11 inserting ‘‘or State’’ after ‘‘other Federal’’; and

12 (3) in subparagraph (B) by inserting ‘‘or a

13 State’’ after ‘‘United States’’.

14 SEC. 1011. EXPANDED DEFINITION OF ‘‘COUPON’’.

15 Section 3(d) of the Food Stamp Act of 1977 (7

16 U.S.C. 2012(d)) is amended by striking ‘‘or type of certifi17 cate’’ and inserting ‘‘type of certificate, authorization

18 cards, cash or checks issued of coupons or access devices,

19 including, but not limited to, electronic benefit transfer

20 cards and personal identification numbers’’.

21 SEC. 1012. DOUBLED PENALTIES FOR VIOLATING FOOD

22 STAMP PROGRAM REQUIREMENTS.

23 Section 6(b)(1) of the Food Stamp Act of 1977 (7

24 U.S.C. 2015(b)(1)) is amended—

25 (1) in clause (i)—
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1 (A) by striking ‘‘six months’’ and inserting

2 ‘‘1 year’’; and

3 (B) by adding ‘‘and’’ at the end; and

4 (2) striking clauses (ii) and (iii) and inserting

5 the following:

6 ‘‘(ii) permanently upon—

7 ‘‘(I) the second occasion of any such deter8 mination; or

9 ‘‘(II) the first occasion of a finding by a

10 Federal, State, or local court of the trading of

11 a controlled substance (as defined in section

12 102 of the Controlled Substances Act (21

13 U.S.C. 802)), firearms, ammunition, or explo14 sives for coupons.’’.

15 SEC. 1013. MANDATORY CLAIMS COLLECTION METHODS.

16 (a) Section 11(e)(8) of the Food Stamp Act of 1977

17 (7 U.S.C. 2020(e)(8)) is amended by inserting ‘‘or refunds

18 of Federal taxes as authorized pursuant to 31 U.S.C.

19 3720A’’ before the semicolon at the end.

20 (b) Section 13(d) of the Food Stamp Act of 1977

21 (7 U.S.C. 2022(d)) is amended—

22 (1) by striking ‘‘may’’ and inserting ‘‘shall’’;

23 and
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1 (2) by inserting ‘‘or refunds of Federal taxes as

2 authorized pursuant to 31 U.S.C. 3720A’’ before the

3 period at the end.

4 (c) Section 6103(1) of the Internal Revenue Code (26

5 U.S.C. 6103(1)) is amended—

6 (1) by striking ‘‘officers and employees’’ in

7 paragraph (10)(A) and inserting ‘‘officers, employ8 ees or agents, including State agencies’’; and

9 (2) by striking ‘‘officers and employees’’ in

10 paragraph (10)(B) and inserting ‘‘officers, employ11 ees or agents, including State agencies’’.

12 SEC. 1014. REDUCTION OF BASIC BENEFIT LEVEL.

13 Section 3(o) of the Food Stamp Act of 1977 (7

14 U.S.C. 2012(o)) is amended—

15 (1) by striking ‘‘and (11)’’ and inserting

16 ‘‘(11)’’;

17 (2) in clause (11) by inserting ‘‘through Octo18 ber 1, 1994’’ after ‘‘each October 1 thereafter’’; and

19 (3) by inserting before the period at the end the

20 following:

21 ‘‘, and (12) on October 1, 1995, and on each October 1

22 thereafter, adjust the cost of such diet to reflect 102 per23 cent of the cost, in the preceding June (without regard

24 to any previous adjustment made under this clause or

25 clauses (4) through (11) of this subsection) and round the
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1 result to the nearest lower dollar increment for each

2 household size’’.

3 SEC. 1015. PRO-RATING BENEFITS AFTER INTERRUPTIONS

4 IN PARTICIPATION.

5 Section 8(c)(2)(B) of the Food Stamp Act of 1977

6 (7 U.S.C. 2017(c)(2)(B)) is amended by striking ‘‘of more

7 than one month’’.

8 SEC. 1016. WORK REQUIREMENT FOR ABLE-BODIED RECIPI9 ENTS.

10 (a) WORK REQUIREMENT.—Section 6(d) of the Food

11 Stamp Act of 1977 (7 U.S.C. 2015(d)) is amended by

12 adding at the end the following:

13 ‘‘(5)(A) Except as provided in subparagraphs (B),

14 (C), and (D), an individual who has received an allotment

15 for six consecutive months during which such individual

16 has not been employed a minimum of an average of 20

17 hours per week shall be disqualified if such individual is

18 not employed at least an average of 20 hours per week,

19 participating in a workfare program under section 20 (or

20 a comparable State or local workfare program), or partici21 pating in and complying with the requirements of an ap22 proved employment and training program under para23 graph (4).

24 ‘‘(B) The provisions of subparagraph (A) shall not

25 apply in the case of an individual who—
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1 ‘‘(i) is under eighteen or over fifty years of age;

2 ‘‘(ii) is certified by a physician as physically or

3 mentally unfit for employment;

4 ‘‘(iii) is a parent or other member of a house5 hold that includes a minor child;

6 ‘‘(iv) is participating a minimum of an average

7 of 20 hours per week and is in compliance with the

8 requirements of—

9 ‘‘(I) a program under the Job Training

10 Partnership Act (29 U.S.C. 1501 et seq.);

11 ‘‘(II) a program under section 236 of the

12 Trade Act of 1974 (19 U.S.C. 2296); or

13 ‘‘(III) another program for the purpose of

14 employment and training operated by a State or

15 local government, as determined appropriate by

16 the Secretary; or

17 ‘‘(v) or would otherwise be exempt under sub18 section (d)(2).

19 ‘‘(C) The Secretary may waive the requirements of

20 subparagraph (A) in the case of some or all individuals

21 within all or part of State if the Secretary finds that such

22 area—

23 ‘‘(i) has an unemployment rate of over 7 per24 cent; or
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1 ‘‘(ii) does not have a sufficient number of jobs

2 to provide employment for individuals subject to this

3 paragraph. The Secretary shall report to the Com4 mittee on Agriculture of the House of Representa5 tives and the Committee on Agriculture, Nutrition,

6 and Forestry of the Senate on the basis in which the

7 Secretary made this decision.

8 ‘‘(D) An individual who has been disqualified from

9 the food stamp program by reason of subparagraph (A)

10 may reestablish eligibility for assistance—

11 ‘‘(i) by meeting the requirements of subpara12 graph (A);

13 ‘‘(ii) by becoming exempt under subparagraph

14 (B); or

15 ‘‘(iii) if the Secretary grants a waiver under

16 subparagraph (C).

17 ‘‘(E) A household (as defined in section 3(i) of the

18 Food Stamp Act of 1977 (7 U.S.C. 2015(i)) that includes

19 an individual who refuses to work, refuses to look for

20 work, turns down a job, or refuses to participate in the

21 State program if the State places the individual in such

22 program shall be ineligible to receive food stamp benefits.

23 The State agency shall reduce, by such amount the State

24 considers appropriate, the amount otherwise payable to a

25 household that includes an individual who fails without
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1 good cause to comply with other requirements of the indi2 vidual responsibility plan signed by the individual.

3 ‘‘(F) The State agency shall make an initial assess4 ment of the skills, prior work experience, and employ5 ability of each participant not exempted under subpara6 graph (B) within six months of initial certification. The

7 State agency shall use such assessment, in consultation

8 with the program participant, to develop an Individual Re9 sponsibility Plan for the participant. Such plan—

10 ‘‘(i) shall provide that participation in food

11 stamp employment and training activities shall be a

12 condition of eligibility for food stamp benefits, ex13 cept during any period of unsubsidized full-time em14 ployment in the private sector;

15 ‘‘(ii) shall establish an employment goal and a

16 plan for moving the individual into private sector

17 employment immediately;

18 ‘‘(iii) shall establish the obligations of the par19 ticipant, which shall include actions that will help

20 the individual obtain and keep private sector employ21 ment; and

22 ‘‘(iv) may require that the individual enter the

23 State program approved under part G or part H of

24 title IV of the Social Security Act if the caseworker

25 determines that the individual will need education,
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1 training, job placement assistance, wage enhance2 ment, or other services to obtain private sector em3 ployment.’’.

4 (b) ENHANCED EMPLOYMENT AND TRAINING PRO5 GRAM.—Section 16(h)(1) of the Food Stamp Act of 1977

6 (7 U.S.C. 2025 (h)(1)) is amended—

7 (1) in subparagraph (A)—

8 (A) by striking ‘‘$75,000,000’’ and insert9 ing ‘‘$150,000,000’’; and

10 (B) by striking ‘‘1991 through 1995’’ and

11 inserting ‘‘1996 through 2000’’;

12 (2) by striking subparagraphs (B), (C), (E) and

13 (F) and redesignating subparagraph (D) as subpara14 graph (B); and

15 (3) in subparagraph (B) (as so redesignated),

16 by striking ‘‘for each’’ and all that follows through

17 ‘‘of $60,000,000’’ and inserting ‘‘the Secretary shall

18 allocate funding’’.

19 (c) REQUIRED PARTICIPATION IN WORK AND TRAIN20 ING PROGRAMS.—Section 6(d)(4) of the Food Stamp Act

21 of 1977 (7 U.S.C. 2015(d)(4)), is amended by adding at

22 the end the following:

23 ‘‘(O) The State agency shall provide an opportunity

24 to participate in the employment and training program

25 under this paragraph to any individual who would other-
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1 wise become subject to disqualification under paragraph

2 (5)(A).’’.

3 (d) COORDINATING WORK REQUIREMENTS IN AFDC

4 AND FOOD STAMP PROGRAMS.—Section 6(d)(4) of the

5 Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4)), as

6 amended by subsection (c), is amended by adding at the

7 end the following:

8 ‘‘(P)(i) Notwithstanding any other provision of this

9 paragraph, a State agency that meets the participation re10 quirements of paragraph (ii) may operate its employment

11 and training program for persons receiving allotments

12 under this Act as part of its Work First Program under

13 part F of title IV of the Social Security Act (42 U.S.C.

14 681 et seq.), except that sections 487(b) and 489(a)(4)

15 shall not apply to any months during which a person par16 ticipates in such program while not receiving income under

17 part A of subtitle IV of the Social Security Act (42 U.S.C.

18 601 et seq.). If a State agency exercises the option pro19 vided under this subparagraph, the operation of this pro20 gram shall be subject to the requirements of such part

21 F, except that any reference to ‘aid to families with de22 pendent children’ in such part shall be deemed a reference

23 to food stamp benefits for purposes of any person not re24 ceiving income under such part A.
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1 ‘‘(ii) A State may exercise the option provided under

2 clause (i) if it provides any persons subject to the require3 ments of paragraph (5) who is not employed at least an

4 average of 20 hours per week or participating in a

5 workfare program under section 20 (or a comparable

6 State or local program) with the opportunity to participate

7 in an approved employment and training program. A State

8 agency shall be considered to have complied with the re9 quirements of this subparagraph in any area for which a

10 waiver under subsection (5)(4)(C) is in effect.’’.

11 SEC. 1017. EXTENDING CURRENT CLAIMS RETENTION

12 RATES.

13 Section 16(a) of the Food Stamp Act of 1977 (7

14 U.S.C. 2025(a)) is amended by striking ‘‘September 30,

15 1995’’ each place it appears and inserting ‘‘September 30,

16 2000’’.

17 SEC. 1018. COORDINATION OF EMPLOYMENT AND TRAIN18 ING PROGRAMS.

19 (a) Section 8(d) of the Food Stamp Act of 1977 (7

20 U.S.C. 2019(d)) is amended—

21 (1) by inserting ‘‘or any work requirement

22 under such program’’ after ‘‘assistance program’’;

23 and

24 (2) by adding at the end the following:
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1 ‘‘If a household fails to comply with a work requirement

2 in the program under part A of title IV of the Social Secu3 rity Act (42 U.S.C. 601 et seq.), the household shall not

4 receive an increased allotment under this Act as a result

5 of a decrease in the household’s income caused by a pen6 alty imposed under such Act, and the State agency is au7 thorized to reduce the household’s allotment by no more

8 than 25 percent.’’.

9 SEC. 1019. PROMOTING EXPANSION OF ELECTRONIC BENE10 FITS TRANSFER.

11 Section 7(i) of the Food Stamp Act of 1977 (7 U.S.C.

12 2016(i)(1)) is amended—

13 (1) by amending paragraph (1) to read:

14 ‘‘(1)(A) State agencies are encouraged to implement

15 an on-line electronic benefit transfer system in which

16 household benefits determined under section 8(a) are is17 sued from and stored in a central data bank and electroni18 cally accessed by household members at the point-of-sale.

19 ‘‘(B) Subject to paragraph (2), a State agency is au20 thorized to procure and implement an electronic benefit

21 transfer system under the terms, conditions, and design

22 that the State agency deems appropriate.

23 ‘‘(C) The Secretary shall, upon request of a State

24 agency, waive any provision of this subsection prohibiting

25 the effective implementation of an electronic benefit trans-
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1 fer system consistent with the purposes of this Act. The

2 Secretary shall act upon any request for such a waiver

3 within 90 days of receipt of a complete application.’’;

4 (2) in paragraph (2), by striking ‘‘for the ap5 proval’’; and

6 (3) in paragraph (3), by striking ‘‘the Secretary

7 shall not approve such a system unless’’ and insert8 ing ‘‘the State agency shall ensure that’’.

9 SEC. 1020. ONE-YEAR FREEZE OF STANDARD DEDUCTION.

10 Section 5(e) of the Food Stamp Act of 1977 (7

11 U.S.C. 2014(e)) is amended in the second sentence by in12 serting ‘‘except October 1, 1995’’ after ‘‘thereafter’’.

13 SEC. 1021. NUTRITION ASSISTANCE FOR PUERTO RICO.

14 Section 19(a)(1)(A) of the Food Stamp Act of 1977

15 (7 U.S.C. 2028(a)(1)(A)) is amended—

16 (1) by striking ‘‘1994, and’’ and inserting

17 ‘‘1994,’’; and

18 (2) by inserting ‘‘and $1,143,000,000 for fiscal

19 year 1996,’’ before ‘‘to finance’’.

20 SEC. 1022. OTHER AMENDMENTS TO THE FOOD STAMP ACT

21 OF 1977.

22 (a) CERTIFICATION PERIOD.—(1) Section 3(c) of the

23 Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is amended

24 to read as follows:
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1 ‘‘(c) ‘Certification period’ means the period specified

2 by the State agency for which households shall be eligible

3 to receive authorization cards, except that such period

4 shall be—

5 ‘‘(1) 24 months for households in which all

6 adult members are elderly or disabled; and

7 ‘‘(2) not more than 12 months for all other

8 households.’’.

9 (2) Section 6(c)(1)(C) of the Food Stamp Act of

10 1977 (7 U.S.C. 2015(c)(1)(C)) is amended—

11 (A) in clause (ii) by adding ‘‘and’’ at the end;

12 (B) in clause (iii) by striking ‘‘; and’’ at the end

13 and inserting a period; and

14 (C) by striking clause (iv).

15 (b) INCLUSION OF ENERGY ASSISTANCE IN IN16 COME.—

17 (1) AMENDMENTS TO THE FOOD STAMP ACT OF

18 1977.—Section 5 of the Food Stamp Act of 1977 (7

19 U.S.C. 2014) is amended—

20 (A) in subsection (d)—

21 (i) by striking paragraph (11); and

22 (ii) by redesignating paragraphs (12)

23 through (16) as paragraphs (11) through

24 (15), respectively; and

25 (B) in subsection (k)—
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1 (i) in paragraph (1)(B) by striking ‘‘,

2 not including energy or utility-cost assist3 ance,’’; and

4 (ii) in paragraph (2)—

5 (I) by striking subparagraph (C);

6 and

7 (II) by redesignating subpara8 graphs (D) through (H) as subpara9 graphs (C) through (J), respectively.

10 (2) AMENDMENTS TO THE LOW-INCOME HOME

11 ENERGY ASSISTANCE ACT OF 1981.—Section 2605(f)

12 of the Low-Income Home Energy Assistance Act of

13 1981 (42 U.S.C. 8624(f)) is amended—

14 (A) in paragraph (1) by striking ‘‘food

15 stamps,’’; and

16 (B) by amending paragraph (2) to read as

17 follows:

18 ‘‘(2) Paragraph (1) shall not apply for any purpose

19 under the Food Stamp Act of 1977.’’.

20 (c) EXCLUSION OF CERTAIN JTPA INCOME.—Sec21 tion 5(d) of the Food Stamp Act of 1977 (7 U.S.C.

22 2014(d)), as amended by subsection (b), is amended—

23 (1) by striking ‘‘and (15)’’ and inserting

24 ‘‘(15)’’; and

25 (2) by inserting before the period the following:
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1 ‘‘, and (16) income received under the Job Training Part2 nership Act by a household member who is less than 19

3 years of age’’.

4 (d) EXCLUSION OF EDUCATIONAL ASSISTANCE

5 FROM INCOME.—Section 5(d) of the Food Stamp Act of

6 1977 (7 U.S.C. 2014(d)) is amended—

7 (1) by amending paragraph (3) to read as fol8 lows: ‘‘(3) all educational loans on which payment is

9 deferred (including any loan origination fees or in10 surance premiums associated with such loans),

11 grants, scholarships, fellowships, veterans’ edu12 cational benefits, and the like awarded to a house13 hold member enrolled at a recognized institution of

14 post-secondary education, at a school for the handi15 capped, in a vocational education program, or in a

16 program that provides for completion of a secondary

17 school diploma or obtaining the equivalent thereof,’’;

18 and

19 (2) in paragraph (5) by striking ‘‘and no por20 tion’’ and all that follows through ‘‘reimbursement’’.

21 (e) LIMITATION ON ADDITIONAL EARNED INCOME

22 DEDUCTION.—The 3rd sentence of section 5(e) of the

23 Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is amended

24 by striking ‘‘earned income that’’ and all that follows

25 through ‘‘report’’, and inserting ‘‘determining an
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1 overissuance due to the failure of a household to report

2 earned income’’.

3 (f) EXCLUSION OF ESSENTIAL EMPLOYMENT-RE4 LATED PROPERTY.—Section 5(g)(3) of the Food Stamp

5 Act of 1977 (7 U.S.C. 2014(g)(3)) is amended to read

6 as follows:

7 ‘‘(3) The value of real and tangible personal property

8 (other than currency, commercial paper, and similar prop9 erty) of a household member that is essential to the em10 ployment or self-employment of such member shall be ex11 cluded by the Secretary from financial resources until the

12 expiration of the 1-year period beginning on the date such

13 member ceases to be so employed or so self-employed.’’.

14 (g) EXCLUSION OF LIFE INSURANCE POLICIES.—

15 Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C.

16 2014(g)) is amended by adding at the end the following:

17 ‘‘(6) The Secretary shall exclude from financial re18 sources the cash value of any life insurance policy owned

19 by a member of a household.’’.

20 (h) IN-TANDEM EXCLUSIONS FROM INCOME.—Sec21 tion 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014)

22 is amended by adding at the end the following:

23 ‘‘(n) Whenever a Federal statute enacted after the

24 date of the enactment of this Act excludes funds from in25 come for purposes of determining eligibility, benefit levels,
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1 or both under State plans approved under part A of title

2 IV of the Social Security Act, then such funds shall be

3 excluded from income for purposes of determining eligi4 bility, benefit levels, or both, respectively, under the food

5 stamp program of households all of whose members re6 ceive benefits under a State plan approved under part A

7 of title IV of the Social Security Act.’’.

8 (i) APPLICATION OF AMENDMENTS.—The amend9 ments made by this section shall not apply with respect

10 to certification periods beginning before the effective date

11 of this section.

12 Subtitle B—Commodity

13 Distribution

14 SEC. 1051. SHORT TITLE.

15 This subtitle may be cited as the ‘‘Commodity Dis16 tribution Act of 1995’’.

17 SEC. 1052. AVAILABILITY OF COMMODITIES.

18 (a) Notwithstanding any other provision of law, the

19 Secretary of Agriculture (hereinafter in this subtitle re20 ferred to as the ‘‘Secretary’’) is authorized during fiscal

21 years 1996 through 2000 to purchase a variety of nutri22 tious and useful commodities and distribute such commod23 ities to the States for distribution in accordance with this

24 subtitle.
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1 (b) In addition to the commodities described in sub2 section (a), the Secretary may expend funds made avail3 able to carry out the section 32 of the Act of August 24,

4 1935 (7 U.S.C. 612c), which are not expended or needed

5 to carry out such sections, to purchase, process, and dis6 tribute commodities of the types customarily purchased

7 under such section to the States for distribution in accord8 ance to this subtitle.

9 (c) In addition to the commodities described in sub10 sections (a) and (b), agricultural commodities and the

11 products thereof made available under clause (2) of the

12 second sentence of section 32 of the Act of August 24,

13 1935 (7 U.S.C. 612c), may be made available by the Sec14 retary to the States for distribution in accordance with

15 this subtitle.

16 (d) In addition to the commodities described in sub17 sections (a), (b), and (c), commodities acquired by the

18 Commodity Credit Corporation that the Secretary deter19 mines, in the discretion of the Secretary, are in excess of

20 quantities needed to—

21 (1) carry out other domestic donation pro22 grams;

23 (2) meet other domestic obligations;

24 (3) meet international market development and

25 food aid commitments, and
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1 (4) carry out the farm price and income sta2 bilization purposes of the Agricultural Adjustment

3 Act of 1938, the Agricultural Act of 1949, and the

4 Commodity Credit Corporation Charter Act; shall be

5 made available by the Secretary, without charge or

6 credit for such commodities, to the States for dis7 tribution in accordance with this subtitle.

8 (e) During each fiscal year, the types, varieties, and

9 amounts of commodities to be purchased under this sub10 title shall be determined by the Secretary. In purchasing

11 such commodities, except those commodities purchased

12 pursuant to section 1060, the Secretary shall, to the ex13 tent practicable and appropriate, make purchases based

14 on—

15 (1) agricultural market conditions;

16 (2) the preferences and needs of States and dis17 tributing agencies; and

18 (3) the preferences of the recipients.

19 SEC. 1053. STATE, LOCAL AND PRIVATE SUPPLEMENTATION

20 OF COMMODITIES.

21 (a) The Secretary shall establish procedures under

22 which State and local agencies, recipient agencies, or any

23 other entity or person may supplement the commodities

24 distributed under this subtitle for use by recipient agencies

25 with nutritious and wholesome commodities that such en-
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1 tities or persons donate for distribution, in all or part of

2 the State, in addition to the commodities otherwise made

3 available under this subtitle.

4 (b) States and eligible recipient agencies may use—

5 (1) the funds appropriated for administrative

6 cost under section 1059(b);

7 (2) equipment, structures, vehicles, and all

8 other facilities involved in the storage, handling, or

9 distribution of commodities made available under

10 this subtitle; and

11 (3) the personnel, both paid or volunteer, in12 volved in such storage, handling, or distribution; to

13 store, handle or distribute commodities donated for

14 use under subsection (a).

15 (c) States and recipient agencies shall continue, to

16 the maximum extent practical, to use volunteer workers,

17 and commodities and other foodstuffs donated by chari18 table and other organizations, in the distribution of com19 modities under this subtitle.

20 SEC. 1054. STATE PLAN.

21 (a) A State seeking to receive commodities under this

22 subtitle shall submit a plan of operation and administra23 tion every four years to the Secretary for approval. The

24 plan may be amended at any time, with the approval of

25 the Secretary.
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1 (b) The State plan, at a minimum, shall—

2 (1) designate the State agency responsible for

3 distributing the commodities received under this sub4 title;

5 (2) set forth a plan of operation and adminis6 tration to expeditiously distribute commodities under

7 this subtitle in quantities requested to eligible recipi8 ent agencies in accordance with sections 1056 and

9 1060;

10 (3) set forth the standards of eligibility for re11 cipient agencies; and

12 (4) set forth the standards of eligibility for indi13 vidual or household recipients of commodities, which

14 at minimum shall require—

15 (A) individuals or households to be com16 prised of needy persons; and

17 (B) individual or household members to be

18 residing in the geographic location served by

19 the distributing agency at the time of applica20 tion for assistance.

21 (c) The Secretary shall encourage each State receiv22 ing commodities under this subtitle to establish a State

23 advisory board consisting of representatives of all inter24 ested entities, both public and private, in the distribution

25 of commodities received under this subtitle in the State.
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1 (d) A State agency receiving commodities under this

2 subtitle may—

3 (1)(A) enter into cooperative agreements with

4 State agencies of other States to jointly provide

5 commodities received under this subtitle to eligible

6 recipient agencies that serve needy persons in a sin7 gle geographical area which includes such States; or

8 (B) transfer commodities received under this

9 subtitle to any such eligible recipient agency in the

10 other State under such agreement; and

11 (2) advise the Secretary of an agreement en12 tered into under this subsection and the transfer of

13 commodities made pursuant to such agreement.

14 SEC. 1055. ALLOCATION OF COMMODITIES TO STATES.

15 (a) In each fiscal year, except for those commodities

16 purchased under section 1060, the Secretary shall allocate

17 the commodities distributed under this subtitle as follows:

18 (1) 60 percent of such total value of commod19 ities shall be allocated in a manner such that the

20 value of commodities allocated to each State bears

21 the same ratio to 60 percent of such total value as

22 the number of persons in households within the

23 State having incomes below the poverty line bears to

24 the total number of persons in households within all

25 States having incomes below such poverty line. Each
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1 State shall receive the value of commodities allocated

2 under this paragraph.

3 (2) 40 percent of such total value of commod4 ities shall be allocated in a manner such that the

5 value of commodities allocated to each State bears

6 the same ratio to 40 percent of such total value as

7 the average monthly number of unemployed persons

8 within the State bears to the average monthly num9 ber of unemployed persons within all States during

10 the same fiscal year. Each State shall receive the

11 value of commodities allocated to the State under

12 this paragraph.

13 (b)(1) The Secretary shall notify each State of the

14 amount of commodities that such State is allotted to re15 ceive under subsection (a) or this subsection, if applicable.

16 Each State shall promptly notify the Secretary if such

17 State determines that it will not accept any or all of the

18 commodities made available under such allocation. On

19 such a notification by a State, the Secretary shall reallo20 cate and distribute such commodities in a manner the Sec21 retary deems appropriate and equitable. The Secretary

22 shall further establish procedures to permit States to de23 cline to receive portions of such allocation during each fis24 cal year in a manner the State determines is appropriate
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1 and the Secretary shall reallocate and distribute such allo2 cation as the Secretary deems appropriate and equitable.

3 (2) In the event of any drought, flood, hurricane, or

4 other natural disaster affecting substantial numbers of

5 persons in a State, county, or parish, the Secretary may

6 request that States unaffected by such a disaster consider

7 assisting affected States by allowing the Secretary to re8 allocate commodities from such unaffected State to States

9 containing areas adversely affected by the disaster.

10 (c) Purchases of commodities under this subtitle shall

11 be made by the Secretary at such times and under such

12 conditions as the Secretary determines appropriate within

13 each fiscal year. All commodities so purchased for each

14 such fiscal year shall be delivered at reasonable intervals

15 to States based on the allocations and reallocations made

16 under subsections (a) and (b), and or carry out section

17 1060, not later than December 31 of the following fiscal

18 year.

19 SEC. 1056. PRIORITY SYSTEM FOR STATE DISTRIBUTION OF

20 COMMODITIES.

21 (a) In distributing the commodities allocated under

22 subsections (a) and (b) of section 1055, the State agency,

23 under procedures determined by the State agency, shall

24 offer, or otherwise make available, its full allocation of
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1 commodities for distribution to emergency feeding organi2 zations.

3 (b) If the State agency determines that the State will

4 not exhaust the commodities allocated under subsections

5 (a) and (b) of section 1055 through distribution to organi6 zations referred to in subsection (a), its remaining alloca7 tion of commodities shall be distributed to charitable insti8 tutions described in section 1063(3) not receiving com9 modities under subsection (a).

10 (c) If the State agency determines that the State will

11 not exhaust the commodities allocated under subsections

12 (a) and (b) of section 1055 through distribution to organi13 zations referred to in subsections (a) and (b), its remain14 ing allocation of commodities shall be distributed to any

15 eligible recipient agency not receiving commodities under

16 subsections (a) and (b).

17 SEC. 1057. INITIAL PROCESSING COSTS.

18 The Secretary may use funds of the Commodity

19 Credit Corporation to pay the costs of initial processing

20 and packaging of commodities to be distributed under this

21 subtitle into forms and in quantities suitable, as deter22 mined by the Secretary, for use by the individual house23 holds or eligible recipient agencies, as applicable. The Sec24 retary may pay such costs in the form of Corporation25 owned commodities equal in value to such costs. The Sec-
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1 retary shall ensure that any such payments in kind will

2 not displace commercial sales of such commodities.

3 SEC. 1058. ASSURANCES; ANTICIPATED USE.

4 (a) The Secretary shall take such precautions as the

5 Secretary deems necessary to ensure that commodities

6 made available under this subtitle will not displace com7 mercial sales of such commodities or the products thereof.

8 The Secretary shall submit to the Committee on Agri9 culture of the House of Representatives and the Commit10 tee on Agriculture, Nutrition, and Forestry of the Senate

11 by December 31, 1997, and not less than every two years

12 thereafter, a report as to whether and to what extent such

13 displacements or substitutions are occurring.

14 (b) The Secretary shall determine that commodities

15 provided under this subtitle shall be purchased and dis16 tributed only in quantities that can be consumed without

17 waste. No eligible recipient agency may receive commod18 ities under this subtitle in excess of anticipated use, based

19 on inventory records and controls, or in excess of its ability

20 to accept and store such commodities.

21 SEC. 1059. AUTHORIZATION OF APPROPRIATIONS.

22 (a) PURCHASE OF COMMODITIES.—To carry out this

23 subtitle, there are authorized to be appropriated

24 $260,000,000 for each of the fiscal years 1996 through
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1 2000 to purchase, process, and distribute commodities to

2 the States in accordance with this subtitle.

3 (b) ADMINISTRATIVE FUNDS.—

4 (1) There are authorized to be appropriated

5 $40,000,000 for each of the fiscal years 1996

6 through 2000 for the Secretary to make available to

7 the States for State and local payments for costs as8 sociated with the distribution of commodities by eli9 gible recipient agencies under this subtitle, excluding

10 costs associated with the distribution of those com11 modities distributed under section 1060. Funds ap12 propriated under this paragraph for any fiscal year

13 shall be allocated to the States on an advance basis

14 dividing such funds among the States in the same

15 proportions as the commodities distributed under

16 this subtitle for such fiscal year are allocated among

17 the States. If a State agency is unable to use all of

18 the funds so allocated to it, the Secretary shall re19 allocate such unused funds among the other States

20 in a manner the Secretary deems appropriate and

21 equitable.

22 (2)(A) A State shall make available in each fis23 cal year to eligible recipient agencies in the State

24 not less than 40 percent of the funds received by the

25 State under paragraph (1) for such fiscal year, as
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1 necessary to pay for, or provide advance payments

2 to cover, the allowable expenses of eligible recipient

3 agencies for distributing commodities to needy per4 sons, but only to the extent such expenses are actu5 ally so incurred by such recipient agencies.

6 (B) As used in this paragraph, the term ‘‘allow7 able expenses’’ includes—

8 (i) costs of transporting, storing, handling,

9 repackaging, processing, and distributing com10 modities incurred after such commodities are

11 received by eligible recipient agencies;

12 (ii) costs associated with determinations of

13 eligibility, verification, and documentation;

14 (iii) costs of providing information to per15 sons receiving commodities under this subtitle

16 concerning the appropriate storage and prepa17 ration of such commodities; and

18 (iv) costs of recordkeeping, auditing, and

19 other administrative procedures required for

20 participation in the program under this subtitle.

21 (C) If a State makes a payment, using State

22 funds, to cover allowable expenses of eligible recipi23 ent agencies, the amount of such payment shall be

24 counted toward the amount a State must make
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1 available for allowable expenses of recipient agencies

2 under this paragraph.

3 (3) States to which funds are allocated for a

4 fiscal year under this subsection shall submit finan5 cial reports to the Secretary, on a regular basis, as

6 to the use of such funds. No such funds may be

7 used by States or eligible recipient agencies for costs

8 other than those involved in covering the expenses

9 related to the distribution of commodities by eligible

10 recipient agencies.

11 (4)(A) Except as provided in subparagraph (B),

12 to be eligible to receive funds under this subsection,

13 a State shall provide in cash or in kind (according

14 to procedures approved by the Secretary for certify15 ing these in-kind contributions) from non-Federal

16 sources a contribution equal to the difference be17 tween—

18 (i) the amount of such funds so received;

19 and

20 (ii) any part of the amount allocated to the

21 State and paid by the State—

22 (I) to eligible recipient agencies; or

23 (II) for the allowable expenses of such

24 recipient agencies;for use in carrying out

25 this subtitle.
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1 (B) Funds allocated to a State under this sec2 tion may, upon State request, be allocated before

3 States satisfy the matching requirement specified in

4 subparagraph (A), based on the estimated contribu5 tion required. The Secretary shall periodically rec6 oncile estimated and actual contributions and adjust

7 allocations to the State to correct for overpayments

8 and underpayments.

9 (C) Any funds distributed for administrative

10 costs under section 1060(b) shall not be covered by

11 this paragraph.

12 (5) States may not charge for commodities

13 made available to eligible recipient agencies, and

14 may not pass on to such recipient agencies the cost

15 of any matching requirements, under this subtitle.

16 (c) VALUE OF COMMODITIES.—The value of the com17 modities made available under subsections (c) and (d) of

18 section 1052, and the funds of the Corporation used to

19 pay the costs of initial processing, packaging (including

20 forms suitable for home use), and delivering commodities

21 to the States shall not be charged against appropriations

22 authorized by this section.

23 SEC. 1060. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

24 (a) From the funds appropriated under section

25 1059(a), $94,500,000 shall be used for each fiscal year
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1 to purchase and distribute commodities to supplemental

2 feeding programs serving woman, infants, and children or

3 elderly individuals (hereinafter in this section referred to

4 as the ‘‘commodity supplemental food program′′), or serv5 ing both groups wherever located.

6 (b) Not more than 20 percent of the funds made

7 available under subsection (a) shall be made available to

8 the States for State and local payments of administrative

9 costs associated with the distribution of commodities by

10 eligible recipient agencies under this section. Administra11 tive costs for the purposes of the commodity supplemental

12 food program shall include, but not be limited to, expenses

13 for information and referral, operation, monitoring, nutri14 tion education, start-up costs, and general administration,

15 including staff, warehouse and transportation personnel,

16 insurance, and administration of the State or local office.

17 (c)(1) During each fiscal year the commodity supple18 mental food program is in operation, the types, varieties,

19 and amounts of commodities to be purchased under this

20 section shall be determined by the Secretary, but, if the

21 Secretary proposes to make any significant changes in the

22 types, varieties, or amounts from those that were available

23 or were planned at the beginning of the fiscal year the

24 Secretary shall report such changes before implementation

25 to the Committee on Agriculture of the House of Rep-
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1 resentatives and the Committee on Agriculture, Nutrition,

2 and Forestry of the Senate.

3 (2) Notwithstanding any other provision of law, the

4 Commodity Credit Corporation shall, to the extent that

5 the Commodity Credit Corporation inventory levels per6 mit, provide not less than 9,000,000 pounds of cheese and

7 not less than 4,000,000 pounds of nonfat dry milk in each

8 of the fiscal years 1996 through 2000 to the Secretary.

9 The Secretary shall use such amounts of cheese and non10 fat dry milk to carry out the commodity supplemental food

11 program before the end of each fiscal year.

12 (d) The Secretary shall, in each fiscal year, approve

13 applications of additional sites for the program, including

14 sites that serve only elderly persons, in areas in which the

15 program currently does not operate, to the full extent that

16 applications can be approved within the appropriations

17 available for the program for the fiscal year and without

18 reducing actual participation levels (including participa19 tion of elderly persons under subsection (e)) in areas in

20 which the program is in effect.

21 (e) If a local agency that administers the commodity

22 supplemental food program determines that the amount

23 of funds made available to the agency to carry out this

24 section exceeds the amount of funds necessary to provide

25 assistance under such program to women, infants, and
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1 children, the agency, with the approval of the Secretary,

2 may permit low-income elderly persons (as defined by the

3 Secretary) to participate in and be served by such pro4 gram.

5 (f)(1) If it is necessary for the Secretary to pay a

6 significantly higher than expected price for one or more

7 types of commodities purchased under this section, the

8 Secretary shall promptly determine whether the price is

9 likely to cause the number of persons that can be served

10 in the program in a fiscal year to decline.

11 (2) If the Secretary determines that such a decline

12 would occur, the Secretary shall promptly notify the State

13 agencies charged with operating the program of the de14 cline and shall ensure that a State agency notify all local

15 agencies operating the program in the State of the decline.

16 (g) Commodities distributed to States pursuant to

17 this section shall not be considered in determining the

18 commodity allocation to each State under section 1055 or

19 priority of distribution under section 1056.

20 SEC. 1061. COMMODITIES NOT INCOME.

21 Notwithstanding any other provision of law, commod22 ities distributed under this subtitle shall not be considered

23 income or resources for purposes of determining recipient

24 eligibility under any Federal, State, or local means-tested

25 program.
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1 SEC. 1062. PROHIBITION AGAINST CERTAIN STATE

2 CHARGES.

3 Whenever a commodity is made available without

4 charge or credit under this subtitle by the Secretary for

5 distribution within the States to eligible recipient agencies,

6 the State may not charge recipient agencies any amount

7 that is in excess of the State’s direct costs of storing, and

8 transporting to recipient agencies the commodities minus

9 any amount the Secretary provides the State for the costs

10 of storing and transporting such commodities.

11 SEC. 1063. DEFINITIONS.

12 As used in this subtitle:

13 (1) The term ‘‘average monthly number of un14 employed persons’’ means the average monthly num15 ber of unemployed persons within a State in the

16 most recent fiscal year for which such information is

17 available as determined by the Bureau of Labor Sta18 tistics of the Department of Labor.

19 (2) The term ‘‘elderly persons’’ means individ20 uals 60 years of age or older.

21 (3) The term ‘‘eligible recipient agency’’ means

22 a public or nonprofit organization that admin23 isters—

24 (A) an institution providing commodities to

25 supplemental feeding programs serving women,
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1 infants, and children or serving elderly persons,

2 or serving both groups;

3 (B) an emergency feeding organization;

4 (C) a charitable institution (including hos5 pitals and retirement homes and excluding

6 penal institutions) to the extent that such insti7 tution serves needy persons;

8 (D) a summer camp for children, or a

9 child nutrition program providing food service;

10 (E) a nutrition project operating under the

11 Older Americans Act of 1965, including such

12 projects that operate a congregate nutrition site

13 and a project that provides home-delivered

14 meals; or

15 (F) a disaster relief program; and that has

16 been designated by the appropriate State agen17 cy, or by the Secretary, and approved by the

18 Secretary for participation in the program es19 tablished under this subtitle.

20 (4) The term ‘‘emergency feeding organization’’

21 means a public or nonprofit organization that ad22 ministers activities and projects (including the activi23 ties and projects of a charitable institution, a food

24 bank, a food pantry, a hunger relief center, a soup

25 kitchen, or a similar public or private nonprofit eligi-
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1 ble recipient agency) providing nutrition assistance

2 to relieve situations of emergency and distress

3 through the provision of food to needy persons, in4 cluding low-income and unemployed persons.

5 (5) The term ‘‘food bank’’ means a public and

6 charitable institution that maintains an established

7 operation involving the provision of food or edible

8 commodities, or the products thereof, to food pan9 tries, soup kitchens, hunger relief centers, or other

10 food or feeding centers that, as an integral part of

11 their normal activities, provide meals or food to feed

12 needy persons on a regular basis.

13 (6) The term ‘‘food pantry’’ means a public or

14 private nonprofit organization that distributes food

15 to low-income and unemployed households, including

16 food from sources other than the Department of

17 Agriculture, to relieve situations of emergency and

18 distress.

19 (7) The term ‘‘needy persons’’ means—

20 (A) individuals who have low incomes or

21 who are unemployed, as determined by the

22 State (in no event shall the income of such indi23 vidual or household exceed 185 percent of the

24 poverty line);
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1 (B) households certified as eligible to par2 ticipate in the food stamp program under the

3 Food Stamp Act of 1977 (7 U.S.C. 2011 et

4 seq.); or

5 (C) individuals or households participating

6 in any other Federal, or federally assisted,

7 means-tested program.

8 (8) The term ‘‘poverty line’’ has the same

9 meaning given such term in section 673(2) of the

10 Community Services Block Grant Act (42 U.S.C.

11 9902(2)).

12 (9) The term ‘‘soup kitchen’’ means a public

13 and charitable institution that, as integral part of its

14 normal activities, maintains an established feeding

15 operation to provide food to needy homeless persons

16 on a regular basis.

17 SEC. 1064. REGULATIONS.

18 (a) The Secretary shall issue regulations within 120

19 days to implement this subtitle.

20 (b) In administering this subtitle, the Secretary shall

21 minimize, to the maximum extent practicable, the regu22 latory, recordkeeping, and paperwork requirements im23 posed on eligible recipient agencies.

24 (c) The Secretary shall as early as feasible but not

25 later than the beginning of each fiscal year, publish in the
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1 Federal Register a nonbinding estimate of the types and

2 quantities of commodities that the Secretary anticipates

3 are likely to be made available under the commodity dis4 tribution program under this subtitle during the fiscal

5 year.

6 (d) The regulations issued by the Secretary under

7 this section shall include provisions that set standards

8 with respect to liability for commodity losses for the com9 modities distributed under this subtitle in situations in

10 which there is no evidence of negligence or fraud, and con11 ditions for payment to cover such losses. Such provisions

12 shall take into consideration the special needs and cir13 cumstances of eligible recipient agencies.

14 SEC. 1065. FINALITY OF DETERMINATIONS.

15 Determinations made by the Secretary under this

16 subtitle and the facts constituting the basis for any dona17 tion of commodities under this subtitle, or the amount

18 thereof, when officially determined in conformity with the

19 applicable regulations prescribed by the Secretary, shall

20 be final and conclusive and shall not be reviewable by any

21 other officer or agency of the Government.

22 SEC. 1066. RELATIONSHIP TO OTHER PROGRAMS.

23 (a) Section 4(b) of the Food Stamp Act of 1977 (7

24 U.S.C. 2013(b)) shall not apply with respect to the dis25 tribution of commodities under this subtitle.
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1 (b) Except as otherwise provided in section 1057,

2 none of the commodities distributed under this subtitle

3 shall be sold or otherwise disposed of in commercial chan4 nels in any form.

5 SEC. 1067. SETTLEMENT AND ADJUSTMENT OF CLAIMS.

6 (a) The Secretary may—

7 (1) determine the amount of, settle, and adjust

8 any claim arising under this subtitle; and

9 (2) waive such a claim if the Secretary deter10 mines that to do so will serve the purposes of this

11 subtitle.

12 (b) Nothing contained in this section shall be con13 strued to diminish the authority of the Attorney General

14 of the United States under section 516 of title 28, United

15 States Code, to conduct litigation on behalf of the United

16 States.

17 SEC. 1068. REPEALERS; AMENDMENTS.

18 (a) REPEALER.—The Emergency Food Assistance

19 Act of 1983 (7 U.S.C. 612c note) is repealed.

20 (b) AMENDMENTS.—

21 (1) The Hunger Prevention Act of 1988 (7

22 U.S.C. 612c note) is amended—

23 (A) by striking section 110; and

24 (B) by striking section 502.
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1 (2) The Commodity Distribution Reform Act

2 and WIC Amendments of 1987 (7 U.S.C. 612c note)

3 is amended by striking section 4.

4 (3) The Charitable Assistance and Food Bank

5 Act of 1987 (7 U.S.C. 612c note) is amended by

6 striking section 3.

7 (4) The Food Security Act of 1985 (7 U.S.C.

8 612c note) is amended—

9 (A) by striking section 1562(a) and section

10 1571; and

11 (B) in section 1562(d), by striking ‘‘sec12 tion 4 of the Agricultural and Consumer Pro13 tection Act of 1973’’ and inserting ‘‘section

14 1060 of the Commodity Distribution Act of

15 1995’’.

16 (5) The Agricultural and Consumer Protection

17 Act of 1973 (7 U.S.C. 612c note) is amended—

18 (A) in section 4(a), by striking ‘‘institu19 tions (including hospitals and facilities caring

20 for needy infants and children), supplemental

21 feeding programs serving women, infants and

22 children or elderly persons, or both, wherever

23 located, disaster areas, summer camps for chil24 dren,’’;
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1 (B) in subsection 4(c), by striking ‘‘the

2 Emergency Food Assistance Act of 1983’’ and

3 inserting ‘‘the Commodity Distribution Act of

4 1995’’; and

5 (C) by striking section 5.

6 (6) The Food, Agriculture, Conservation, and

7 Trade Act of 1990 (7 U.S.C. 612c note) is amended

8 by striking section 1773(f).

9 Title XI—DEFICIT REDUCTION

10 SEC. 1101. DEDICATION OF SAVINGS TO DEFICIT REDUC11 TION.

12 (a) Upon the enactment of this Act, the Director of

13 the Office of Management and Budget shall make down14 ward adjustments in the discretionary spending limits

15 (new budget authority and outlays), as adjusted, set forth

16 in 601(a)(2) of the Congressional Budget Act of 1974 for

17 each of fiscal years 1996 through 1998 as follows:

18 (1) For fiscal year 1996, reduce new budget au19 thority by $1,420,000,000 and reduce outlays by

20 $1,420,000,000.

21 (2) For fiscal year 1997, reduce new budget au22 thority by $1,420,000,000 and reduce outlays by

23 $1,420,000,000.
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1 (3) For fiscal year 1998, reduce new budget au2 thority by $1,470,000,000 and reduce outlays by

3 $1,470,000,000.

4 (b) Reductions in outlays resulting from the enact5 ment of this Act shall not be taken into account for pur6 poses of section 252 of the Balanced Budget and Emer7 gency Deficit Control Act of 1985.

8 TITLE XII—EFFECTIVE DATE

9 SEC. 1201. EFFECTIVE DATE.

10 Except as otherwise provided in this Act, this Act and

11 the amendments made by this Act shall take effect on Oc12 tober 1, 1996.

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