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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1135 Reported in House (RH)]

                                                  Union Calendar No. 39

104th CONGRESS

  1st Session

                               H. R. 1135

                          [Report No. 104-77]

_______________________________________________________________________

                                 A BILL

  To improve the commodity distribution programs of the Department of 
  Agriculture, to reform and simplify the Food Stamp Program, and for 
                            other purposes.

_______________________________________________________________________

                             March 14, 1995

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed

                                                  Union Calendar No. 39
104th CONGRESS
  1st Session
                                H. R. 1135

                          [Report No. 104-77]

  To improve the commodity distribution programs of the Department of 
  Agriculture, to reform and simplify the Food Stamp Program, and for 
                            other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 6, 1995

 Mr. Roberts introduced the following bill; which was referred to the 
                        Committee on Agriculture

                             March 14, 1995

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
 [For text of introduced bill, see copy of bill as introduced on March 
                                6, 1995]

_______________________________________________________________________

                                 A BILL

 
  To improve the commodity distribution programs of the Department of 
  Agriculture, to reform and simplify the Food Stamp Program, and for 
                            other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Food Stamp Reform and Commodity 
Distribution Act''.

               TITLE I--COMMODITY DISTRIBUTION PROVISIONS

SEC. 101. SHORT TITLE.

    This title may be cited as the ``Commodity Distribution Act of 
1995''.

SEC. 102. AVAILABILITY OF COMMODITIES.

    (a) Notwithstanding any other provision of law, the Secretary of 
Agriculture (hereinafter in this title referred to as the 
``Secretary'') is authorized during fiscal years 1996 through 2000 to 
purchase a variety of nutritious and useful commodities and distribute 
such commodities to the States for distribution in accordance with this 
title.
    (b) In addition to the commodities described in subsection (a), the 
Secretary may expend funds made available to carry out the section 32 
of the Act of August 24, 1935 (7 U.S.C. 612c), which are not expended 
or needed to carry out such sections, to purchase, process, and 
distribute commodities of the types customarily purchased under such 
section to the States for distribution in accordance with this title.
    (c) In addition to the commodities described in subsections (a) and 
(b), agricultural commodities and the products thereof made available 
under clause (2) of the second sentence of section 32 of the Act of 
August 24, 1935 (7 U.S.C. 612c), may be made available by the Secretary 
to the States for distribution in accordance with this title.
    (d) In addition to the commodities described in subsections (a), 
(b), and (c), commodities acquired by the Commodity Credit Corporation 
that the Secretary determines, in the discretion of the Secretary, are 
in excess of quantities needed to--
            (1) carry out other domestic donation programs;
            (2) meet other domestic obligations;
            (3) meet international market development and food aid 
        commitments; and
            (4) carry out the farm price and income stabilization 
        purposes of the Agricultural Adjustment Act of 1938, the 
        Agricultural Act of 1949, and the Commodity Credit Corporation 
        Charter Act;
shall be made available by the Secretary, without charge or credit for 
such commodities, to the States for distribution in accordance with 
this title.
    (e) During each fiscal year, the types, varieties and amounts of 
commodities to be purchased under this title shall be determined by the 
Secretary. In purchasing such commodities, except those commodities 
purchased pursuant to section 110, the Secretary shall, to the extent 
practicable and appropriate, make purchases based on--
            (1) agricultural market conditions;
            (2) the preferences and needs of States and distributing 
        agencies; and
            (3) the preferences of the recipients.

SEC. 103. STATE, LOCAL AND PRIVATE SUPPLEMENTATION OF COMMODITIES.

    (a) The Secretary shall establish procedures under which State and 
local agencies, recipient agencies, or any other entity or person may 
supplement the commodities distributed under this title for use by 
recipient agencies with nutritious and wholesome commodities that such 
entities or persons donate for distribution, in all or part of the 
State, in addition to the commodities otherwise made available under 
this title.
    (b) States and eligible recipient agencies may use--
            (1) the funds appropriated for administrative cost under 
        section 109(b);
            (2) equipment, structures, vehicles, and all other 
        facilities involved in the storage, handling, or distribution 
        of commodities made available under this title; and
            (3) the personnel, both paid or volunteer, involved in such 
        storage, handling, or distribution;
to store, handle or distribute commodities donated for use under 
subsection (a).
    (c) States and recipient agencies shall continue, to the maximum 
extent practical, to use volunteer workers, and commodities and other 
foodstuffs donated by charitable and other organizations, in the 
distribution of commodities under this title.

SEC. 104. STATE PLAN.

    (a) A State seeking to receive commodities under this title shall 
submit a plan of operation and administration every four years to the 
Secretary for approval. The plan may be amended at any time, with the 
approval of the Secretary.
    (b) The State plan, at a minimum, shall--
            (1) designate the State agency responsible for distributing 
        the commodities received under this title;
            (2) set forth a plan of operation and administration to 
        expeditiously distribute commodities under this title in 
        quantities requested to eligible recipient agencies in 
        accordance with sections 106 and 110;
            (3) set forth the standards of eligibility for recipient 
        agencies; and
            (4) set forth the standards of eligibility for individual 
        or household recipients of commodities, which at minimum shall 
        require--
                    (A) individuals or households to be comprised of 
                needy persons; and
                    (B) individual or household members to be residing 
                in the geographic location served by the distributing 
                agency at the time of application for assistance.
    (c) The Secretary shall encourage each State receiving commodities 
under this title to establish a State advisory board consisting of 
representatives of all interested entities, both public and private, in 
the distribution of commodities received under this title in the State.
    (d) A State agency receiving commodities under this title may--
            (1)(A) enter into cooperative agreements with State 
        agencies of other States to jointly provide commodities 
        received under this title to eligible recipient agencies that 
        serve needy persons in a single geographical area which 
        includes such States; or
            (B) transfer commodities received under this title to any 
        such eligible recipient agency in the other State under such 
        agreement; and
            (2) advise the Secretary of an agreement entered into under 
        this subsection and the transfer of commodities made pursuant 
        to such agreement.

SEC. 105. ALLOCATION OF COMMODITIES TO STATES.

    (a) In each fiscal year, except for those commodities purchased 
under section 110, the Secretary shall allocate the commodities 
distributed under this title as follows:
            (1) 60 percent of the such total value of commodities shall 
        be allocated in a manner such that the value of commodities 
        allocated to each State bears the same ratio to 60 percent of 
        such total value as the number of persons in households within 
        the State having incomes below the poverty line bears to the 
        total number of persons in households within all States having 
        incomes below such poverty line. Each State shall receive the 
        value of commodities allocated under this paragraph.
            (2) 40 percent of such total value of commodities shall be 
        allocated in a manner such that the value of commodities 
        allocated to each State bears the same ratio to 40 percent of 
        such total value as the average monthly number of unemployed 
        persons within the State bears to the average monthly number of 
        unemployed persons within all States during the same fiscal 
        year. Each State shall receive the value of commodities 
        allocated to the State under this paragraph.
    (b)(1) The Secretary shall notify each State of the amount of 
commodities that such State is allotted to receive under subsection (a) 
or this subsection, if applicable. Each State shall promptly notify the 
Secretary if such State determines that it will not accept any or all 
of the commodities made available under such allocation. On such a 
notification by a State, the Secretary shall reallocate and distribute 
such commodities as the Secretary deems appropriate and equitable. The 
Secretary shall further establish procedures to permit States to 
decline to receive portions of such allocation during each fiscal year 
as the State determines is appropriate and the Secretary shall 
reallocate and distribute such allocation as the Secretary deems 
appropriate and equitable.
    (2) In the event of any drought, flood, hurricane, or other natural 
disaster affecting substantial numbers of persons in a State, county, 
or parish, the Secretary may request that States unaffected by such a 
disaster consider assisting affected States by allowing the Secretary 
to reallocate commodities from such unaffected State to States 
containing areas adversely affected by the disaster.
    (c) Purchases of commodities under this title shall be made by the 
Secretary at such times and under such conditions as the Secretary 
determines appropriate within each fiscal year. All commodities so 
purchased for each such fiscal year shall be delivered at reasonable 
intervals to States based on the allocations and reallocations made 
under subsections (a) and (b), and or carry out section 110, not later 
than December 31 of the following fiscal year.

SEC. 106. PRIORITY SYSTEM FOR STATE DISTRIBUTION OF COMMODITIES.

    (a) In distributing the commodities allocated under subsections (a) 
and (b) of section 105, the State agency, under procedures determined 
by the State agency, shall offer, or otherwise make available, its full 
allocation of commodities for distribution to emergency feeding 
organizations.
    (b) If the State agency determines that the State will not exhaust 
the commodities allocated under subsections (a) and (b) of section 105 
through distribution to organizations referred to in subsection (a), 
its remaining allocation of commodities shall be distributed to 
charitable institutions described in section 113(3) not receiving 
commodities under subsection (a).
    (c) If the State agency determines that the State will not exhaust 
the commodities allocated under subsections (a) and (b) of section 105 
through distribution to organizations referred to in subsections (a) 
and (b), its remaining allocation of commodities shall be distributed 
to any eligible recipient agency not receiving commodities under 
subsections (a) and (b).

SEC. 107. INITIAL PROCESSING COSTS.

    The Secretary may use funds of the Commodity Credit Corporation to 
pay the costs of initial processing and packaging of commodities to be 
distributed under this title into forms and in quantities suitable, as 
determined by the Secretary, for use by the individual households or 
eligible recipient agencies, as applicable. The Secretary may pay such 
costs in the form of Corporation-owned commodities equal in value to 
such costs. The Secretary shall ensure that any such payments in kind 
will not displace commercial sales of such commodities.

SEC. 108. ASSURANCES; ANTICIPATED USE.

    (a) The Secretary shall take such precautions as the Secretary 
deems necessary to ensure that commodities made available under this 
title will not displace commercial sales of such commodities or the 
products thereof. The Secretary shall submit to the Committee on 
Agriculture of the House of Representatives and the Committee on 
Agriculture, Nutrition, and Forestry of the Senate by December 31, 
1997, and not less than every two years thereafter, a report as to 
whether and to what extent such displacements or substitutions are 
occurring.
    (b) The Secretary shall determine that commodities provided under 
this title shall be purchased and distributed only in quantities that 
can be consumed without waste. No eligible recipient agency may receive 
commodities under this title in excess of anticipated use, based on 
inventory records and controls, or in excess of its ability to accept 
and store such commodities.

SEC. 109. AUTHORIZATION OF APPROPRIATIONS.

    (a) Purchase of Commodities.--To carry out this title, there are 
authorized to be appropriated $260,000,000 for each of the fiscal years 
1996 through 2000 to purchase, process, and distribute commodities to 
the States in accordance with this title.
    (b) Administrative Funds.--(1) There are authorized to be 
appropriated $40,000,000 for each of the fiscal years 1996 through 2000 
for the Secretary to make available to the States for State and local 
payments for costs associated with the distribution of commodities by 
eligible recipient agencies under this title, excluding costs 
associated with the distribution of those commodities distributed under 
section 110. Funds appropriated under this paragraph for any fiscal 
year shall be allocated to the States on an advance basis dividing such 
funds among the States in the same proportions as the commodities 
distributed under this title for such fiscal year are allocated among 
the States. If a State agency is unable to use all of the funds so 
allocated to it, the Secretary shall reallocate such unused funds among 
the other States in a manner the Secretary deems appropriate and 
equitable.
    (2)(A) A State shall make available in each fiscal year to eligible 
recipient agencies in the State not less than 40 percent of the funds 
received by the State under paragraph (1) for such fiscal year, as 
necessary to pay for, or provide advance payments to cover, the 
allowable expenses of eligible recipient agencies for distributing 
commodities to needy persons, but only to the extent such expenses are 
actually so incurred by such recipient agencies.
    (B) As used in this paragraph, the term ``allowable expenses'' 
includes--
            (i) costs of transporting, storing, handling, repackaging, 
        processing, and distributing commodities incurred after such 
        commodities are received by eligible recipient agencies;
            (ii) costs associated with determinations of eligibility, 
        verification, and documentation;
            (iii) costs of providing information to persons receiving 
        commodities under this title concerning the appropriate storage 
        and preparation of such commodities; and
            (iv) costs of recordkeeping, auditing, and other 
        administrative procedures required for participation in the 
        program under this title.
    (C) If a State makes a payment, using State funds, to cover 
allowable expenses of eligible recipient agencies, the amount of such 
payment shall be counted toward the amount a State must make available 
for allowable expenses of recipient agencies under this paragraph.
    (3) States to which funds are allocated for a fiscal year under 
this subsection shall submit financial reports to the Secretary, on a 
regular basis, as to the use of such funds. No such funds may be used 
by States or eligible recipient agencies for costs other than those 
involved in covering the expenses related to the distribution of 
commodities by eligible recipient agencies.
    (4)(A) Except as provided in subparagraph (B), to be eligible to 
receive funds under this subsection, a State shall provide in cash or 
in kind (according to procedures approved by the Secretary for 
certifying these in-kind contributions) from non-Federal sources a 
contribution equal to the difference between--
            (i) the amount of such funds so received; and
            (ii) any part of the amount allocated to the State and paid 
        by the State--
                    (I) to eligible recipient agencies; or
                    (II) for the allowable expenses of such recipient 
                agencies;
        for use in carrying out this title.
    (B) Funds allocated to a State under this section may, upon State 
request, be allocated before States satisfy the matching requirement 
specified in subparagraph (A), based on the estimated contribution 
required. The Secretary shall periodically reconcile estimated and 
actual contributions and adjust allocations to the State to correct for 
overpayments and underpayments.
    (C) Any funds distributed for administrative costs under section 
110(b) shall not be covered by this paragraph.
    (5) States may not charge for commodities made available to 
eligible recipient agencies, and may not pass on to such recipient 
agencies the cost of any matching requirements, under this title.
    (c) The value of the commodities made available under subsection 
(c) and (d) of section 102, and the funds of the Commodity Credit 
Corporation used to pay the costs of initial processing, packaging 
(including forms suitable for home use), and delivering commodities to 
the States shall not be charged against appropriations authorized by 
this section.

SEC. 110. COMMODITY SUPPLEMENTAL FOOD PROGRAM.

    (a) From the funds appropriated under section 109(a), $94,500,000 
shall be used for each fiscal year to purchase and distribute 
commodities to supplemental feeding programs serving women, infants, 
and children or elderly individuals (hereinafter in this section 
referred to as the ``commodity supplemental food program''), or serving 
both groups wherever located.
    (b) Not more than 20 percent of the funds made available under 
subsection (a) shall be made available to the States for State and 
local payments of administrative costs associated with the distribution 
of commodities by eligible recipient agencies under this section. 
Administrative costs for the purposes of the commodity supplemental 
food program shall include, but not be limited to, expenses for 
information and referral, operation, monitoring, nutrition education, 
start-up costs, and general administration, including staff, warehouse 
and transportation personnel, insurance, and administration of the 
State or local office.
    (c)(1) During each fiscal year the commodity supplemental food 
program is in operation, the types, varieties, and amounts of 
commodities to be purchased under this section shall be determined by 
the Secretary, but, if the Secretary proposes to make any significant 
changes in the types, varieties or amounts from those that were 
available or were planned at the beginning of the fiscal year the 
Secretary shall report such changes before implementation to the 
Committee on Agriculture of the House of Representatives and the 
Committee on Agriculture, Nutrition, and Forestry of the Senate.
    (2) Notwithstanding any other provision of law, the Commodity 
Credit Corporation shall, to the extent that the Commodity Credit 
Corporation inventory levels permit, provide not less than 9,000,000 
pounds of cheese and not less than 4,000,000 pounds of nonfat dry milk 
in each of the fiscal years 1996 through 2000 to the Secretary. The 
Secretary shall use such amounts of cheese and nonfat dry milk to carry 
out the commodity supplemental food program before the end of the 
fiscal year.
    (d) The Secretary shall, in each fiscal year, approve applications 
of additional sites for the program, including sites that serve only 
elderly persons, in areas in which the program currently does not 
operate, to the full extent that applications can be approved within 
the appropriations available for the program for the fiscal year and 
without reducing actual participation levels (including participation 
of elderly persons under subsection (e)) in areas in which the program 
is in effect.
    (e) If a local agency that administers the commodity supplemental 
food program determines that the amount of funds made available to the 
agency to carry out this section exceeds the amount of funds necessary 
to provide assistance under such program to women, infants, and 
children, the agency, with the approval of the Secretary, may permit 
low-income elderly persons (as defined by the Secretary) to participate 
in and be served by such program.
    (f)(1) If it is necessary for the Secretary to pay a significantly 
higher than expected price for one or more types of commodities 
purchased under this section, the Secretary shall promptly determine 
whether the price is likely to cause the number of persons that can be 
served in the program in a fiscal year to decline.
    (2) If the Secretary determines that such a decline would occur, 
the Secretary shall promptly notify the State agencies charged with 
operating the program of the decline and shall ensure that a State 
agency notify all local agencies operating the program in the State of 
the decline.
    (g) Commodities distributed to States pursuant to this section 
shall not be considered in determining the commodity allocation to each 
State under section 105 or priority of distribution under 106.

SEC. 111. COMMODITIES NOT INCOME.

    Notwithstanding any other provision of law, commodities distributed 
under this title shall not be considered income or resources for 
purposes of determining recipient eligibility under any Federal, State, 
or local means-tested program.

SEC. 112. PROHIBITION AGAINST CERTAIN STATE CHARGES.

    Whenever a commodity is made available without charge or credit 
under this title by the Secretary for distribution within the States to 
eligible recipient agencies, the State may not charge recipient 
agencies any amount that is in excess of the State's direct costs of 
storing, and transporting to recipient agencies the commodities minus 
any amount the Secretary provides the State for the costs of storing 
and transporting such commodities.

SEC. 113. DEFINITIONS.

    As used in this title:
            (1) The term ``average monthly number of unemployed 
        persons'' means the average monthly number of unemployed 
        persons within a State in the most recent fiscal year for which 
        such information is available as determined by the Bureau of 
        Labor Statistics of the Department of Labor.
            (2) The term ``elderly persons'' means individuals 60 years 
        of age or older.
            (3) The term ``eligible recipient agency'' means a public 
        or nonprofit organization that administers--
                    (A) an institution providing commodities to 
                supplemental feeding programs serving women, infants, 
                and children or serving elderly persons, or serving 
                both groups;
                    (B) an emergency feeding organization;
                    (C) a charitable institution (including a hospitals 
                and retirement home, but excluding a penal institution) 
                to the extent that such institution serves needy 
                persons;
                    (D) a summer camp for children, or a child 
                nutrition program providing food service;
                    (E) a nutrition project operating under the Older 
                Americans Act of 1965, including such project that 
                operates a congregate nutrition site and a project that 
                provides home-delivered meals; or
                    (F) a disaster relief program;
        and that has been designated by the appropriate State agency, 
        or by the Secretary, and approved by the Secretary for 
        participation in the program established under this title.
            (4) The term ``emergency feeding organization'' means a 
        public or nonprofit organization that administers activities 
        and projects (including the activities and projects of a 
        charitable institution, a food bank, a food pantry, a hunger 
        relief center, a soup kitchen, or a similar public or private 
        nonprofit eligible recipient agency) providing nutrition 
        assistance to relieve situations of emergency and distress 
        through the provision of food to needy persons, including low-
        income and unemployed persons.
            (5) The term ``food bank'' means a public and charitable 
        institution that maintains an established operation involving 
        the provision of food or edible commodities, or the products 
        thereof, to food pantries, soup kitchens, hunger relief 
        centers, or other food or feeding centers that, as an integral 
        part of their normal activities, provide meals or food to feed 
        needy persons on a regular basis.
            (6) The term ``food pantry'' means a public or private 
        nonprofit organization that distributes food to low-income and 
        unemployed households, including food from sources other than 
        the Department of Agriculture, to relieve situations of 
        emergency and distress.
            (7) The term ``needy persons'' means--
                    (A) individuals who have low incomes or who are 
                unemployed, as determined by the State (in no event 
                shall the income of such individual or household exceed 
                185 percent of the poverty line);
                    (B) households certified as eligible to participate 
                in the food stamp program under the Food Stamp Act of 
                1977 (7 U.S.C. 2011 et seq.); or
                    (C) individuals or households participating in any 
                other Federal, or federally assisted, means-tested 
                program.
            (8) The term ``poverty line'' has the same meaning given 
        such term in section 673(2) of the Community Services Block 
        Grant Act (42 U.S.C. 9902(2)).
            (9) The term ``soup kitchen'' means a public and charitable 
        institution that, as integral part of its normal activities, 
        maintains an established feeding operation to provide food to 
        needy homeless persons on a regular basis.

SEC. 114. REGULATIONS.

    (a) The Secretary shall issue regulations within 120 days to 
implement this title.
    (b) In administering this subtitle, the Secretary shall minimize, 
to the maximum extent practicable, the regulatory, recordkeeping, and 
paperwork requirements imposed on eligible recipient agencies.
    (c) The Secretary shall as early as feasible but not later than the 
beginning of each fiscal year, publish in the Federal Register a 
nonbinding estimate of the types and quantities of commodities that the 
Secretary anticipates are likely to be made available under the 
commodity distribution program under this title during the fiscal year.
    (d) The regulations issued by the Secretary under this section 
shall include provisions that set standards with respect to liability 
for commodity losses for the commodities distributed under this title 
in situations in which there is no evidence of negligence or fraud, and 
conditions for payment to cover such losses. Such provisions shall take 
into consideration the special needs and circumstances of eligible 
recipient agencies.

SEC. 115. FINALITY OF DETERMINATIONS.

    Determinations made by the Secretary under this title and the facts 
constituting the basis for any donation of commodities under this 
title, or the amount thereof, when officially determined in conformity 
with the applicable regulations prescribed by the Secretary, shall be 
final and conclusive and shall not be reviewable by any other officer 
or agency of the Government.

SEC. 116. SALE OF COMMODITIES PROHIBITED.

    Except as otherwise provided in section 107, none of the 
commodities distributed under this title shall be sold or otherwise 
disposed of in commercial channels in any form.

SEC. 117. SETTLEMENT AND ADJUSTMENT OF CLAIMS.

    (a) The Secretary, or a designee of the Secretary, shall have the 
authority to--
            (1) determine the amount of, settle, and adjust any claim 
        arising under this title; and
            (2) waive such a claim is the Secretary determines that to 
        do so will serve the purposes of this title.
    (b) Nothing contained in this section shall be construed to 
diminish the authority of the Attorney General of the United States 
under section 516 of title 28, United States Code, to conduct 
litigation on behalf of the United States.

SEC. 118. REPEALERS; AMENDMENTS.

    (a) The Emergency Food Assistance Act of 1983 (7 U.S.C. 612c note) 
is repealed.
    (b) Amendments.--
            (1) The Hunger Prevention Act of 1988 (7 U.S.C. 612c note) 
        is amended--
                    (A) by striking section 110;
                    (B) by striking subtitle C of title II; and
                    (C) by striking section 502.
            (2) The Commodity Distribution Reform Act and WIC 
        Amendments of 1987 (7 U.S.C. 612c note) is amended by striking 
        section 4.
            (3) The Charitable Assistance and Food Bank Act of 1987 (7 
        U.S.C. 612c note) is amended by striking section 3.
            (4) The Food Security Act of 1985 (7 U.S.C. 612c note) is 
        amended--
                    (A) by striking section 1571; and
                    (B) in section 1562(d), by striking ``section 4 of 
                the Agricultural and Consumer Protection Act of 1973'' 
                and inserting ``section 110 of the Commodity 
                Distribution Act of 1995''.
            (5) The Agricultural and Consumer Protection Act of 1973 (7 
        U.S.C. 612c note) is amended--
                    (A) in section 4(a), by striking ``institutions 
                (including hospitals and facilities caring for needy 
                infants and children), supplemental feeding programs 
                serving women, infants and children or elderly persons, 
                or both, wherever located, disaster areas, summer camps 
                for children'' and inserting ``disaster areas'';
                    (B) in subsection 4(c), by striking ``the Emergency 
                Food Assistance Act of 1983'' and inserting ``the 
                Commodity Distribution Act of 1995''; and
                    (C) by striking section 5.
            (6) The Food, Agriculture, Conservation, and Trade Act of 
        1990 (7 U.S.C. 612c note) is amended by striking section 
        1773(f).

       TITLE II--SIMPLIFICATION AND REFORM OF FOOD STAMP PROGRAM

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Food Stamp Simplification and 
Reform Act of 1995''.

  Subtitle A--Simplified Food Stamp Program and State Assistance for 
                             Needy Families

SEC. 202. ESTABLISHMENT OF SIMPLIFIED FOOD STAMP PROGRAM.

    Section 4(a) of the Food Stamp Act of 1977 (7 U.S.C. 2013(a)) is 
amended--
            (1) by inserting ``(1)'' after ``(a)''; and
            (2) by adding at the end the following new paragraph:
    ``(2) At the request of the State agency, a State may operate a 
program, as provided in section 24, within the State or any political 
subdivisions within the State in which households with one or more 
members receiving regular cash benefits under the program established 
by the State under the Temporary Assistance for Needy Families Block 
Grant be issued food stamp benefits in accordance with the rules and 
procedures established--
            ``(A) by the State under the Temporary Assistance for Needy 
        Families Block Grant or this Act; or
            ``(B) under the food stamp program.''.

SEC. 203. SIMPLIFIED FOOD STAMP PROGRAM.

    (a) The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.) is amended 
by adding the following new section:

``SEC. 24. SIMPLIFIED FOOD STAMP PROGRAM.

    ``(a) If a State elects to operate a program under section 4(a)(2) 
within the State or any political subdivision within the State--
            ``(1) households in which all members receive regular cash 
        benefits under the program established by the State under the 
        Temporary Assistance for Needy Families Block Grant shall be 
        automatically eligible to participate in the food stamp 
        program;
            ``(2) benefits under such program shall be determined under 
        the rules and procedures established by the State or political 
        subdivision under the Temporary Assistance for Needy Families 
        Block Grant or under the food stamp program, subject to 
        subsection (g).
    ``(b) In approving a State plan to carry out a program under 
section 4(a)(2), the Secretary shall certify that the average level of 
food stamp benefits per household participating in the program under 
such section for the State or political subdivision in which such 
program is in operation is not expected to exceed the average level of 
food stamp benefits per household that received benefits under the 
program established by a State under the part A of title IV of the 
Social Security Act (42 U.S.C. 601 et seq.) in such area in the 
preceding fiscal year, adjusted for any changes in the thrifty food 
plan under section 3(o). The Secretary shall compute the permissible 
average level of food stamp benefits per household each year for each 
State or political subdivision in which such program is in operation 
and may require a State to report any information necessary to make 
such computation.
    ``(c) When the Secretary determines that the average level of food 
stamp benefits per household provided by the State or political 
subdivision under such program has exceeded the permissible average 
level of food stamp benefits per household for the State or political 
subdivision in which the program was in operation, the State or 
political subdivision shall pay to the Treasury of the United States 
the value of the food stamp benefits in excess of the permissible 
average level of food stamp benefits per household in the State or 
political subdivision within 90 days after the notification of such 
excess payments.
    ``(d)(1) A household against which a penalty is imposed (including 
a reduction in benefits or disqualification) for noncompliance with the 
program established by the State under the Temporary Assistance for 
Needy Families Block Grant may have the same penalty imposed against it 
(including a reduction in benefits or disqualification) in the program 
administered under this section.
    ``(2) If the penalty for noncompliance with the program established 
by the State under the Temporary Assistance for Needy Families Block 
Grant is a reduction in benefits in such program, the household shall 
not receive an increased allotment under the program administered under 
this section as a result of a decrease in the household's income (as 
determined by the State under this section) caused by such penalty.
    ``(3) Any household disqualified from the program administered 
under this subsection may, after such disqualification period has 
expired, apply for food stamp benefits under this Act and shall be 
treated as a new applicant.
    ``(e) If a State or political subdivision, at its option, operates 
a program under section 4(a)(2) for households that include any member 
who does not receive regular cash benefits under the program 
established by the State under the Temporary Assistance for Needy 
Families Block Grant, the Secretary shall ensure that the State plan 
provides that household eligibility shall be determined under this Act, 
benefits may be determined under the rules and procedures established 
by the State under the Temporary Assistance for Needy Families Block 
Grant or this Act, and benefits provided under this section shall be 
equitably distributed among all household members.
    ``(f)(1) Under the program operated under section 4(a)(2), the 
State may elect to provide cash assistance in lieu of allotments to all 
households that include a member who is employed and whose employment 
produces for the benefit of the member's household income that 
satisfies the requirements of paragraph (2).
    ``(2) The State, in electing to provide cash assistance under 
paragraph (1), at a minimum shall require that such earned income is--
            ``(A) not less than $350 per month;
            ``(B) earned from employment provided by a nongovernmental 
        employer, as determined by the State; and
            ``(C) received from the same employer for a period of 
        employment of not less than 3 consecutive months.
    ``(3) If a State that makes the election described in paragraph (1) 
identifies each household that receives cash assistance under this 
subsection--
            ``(A) the Secretary shall pay to the State an amount equal 
        to the value of the allotment that such household would be 
        eligible to receive under this section but for the operation of 
        this subsection;
            ``(B) the State shall provide such amount to the household 
        as cash assistance in lieu of such allotment; and
            ``(C) for purposes of food stamp program (other than this 
        section and section 4(a)(2))--
                    ``(i) such cash assistance shall be considered to 
                be an allotment; and
                    ``(ii) such household shall not receive any other 
                food stamp benefit for the period for which such cash 
                assistance is provided.
    ``(4) A State that makes the election in paragraph (1) shall--
            ``(A) increase the cash benefits provided to households 
        under this subsection to compensate for any State or local 
        sales tax that may be collected on purchases of food by any 
        household receiving cash benefits under this subsection, unless 
        the Secretary determines on the basis of information provided 
        by the State that the increase is unnecessary on the basis of 
        the limited nature of the items subject to the State or local 
        sales tax; and
            ``(B) pay the cost of any increase in cash benefits 
        required by paragraph (1).
    ``(5) After a State operates a program under this subsection for 2 
years, the State shall provide to the Secretary a written evaluation of 
the impact of cash assistance.
    ``(g) In operating a program under section 4(a)(2), the State or 
political subdivision may follow the rules and procedures established 
by the State or political subdivision under the Temporary Assistance 
for Needy Families Block Grant or under the food stamp program, except 
that the State or political subdivision shall comply with the 
requirements of--
            ``(1) subsections (a) through (g) of section 7 (relating to 
        the issuance and use of coupons);
            ``(2) section 8(a) (relating to the value of allotments, 
        except that a household's income may be determined under the 
        program established by the State under the Temporary Assistance 
        for Needy Families Block Grant);
            ``(3) section 8(b) (allotment not considered income or 
        resources);
            ``(4) subsections (a), (c), (d), and (n) of section 11 
        (relating to administration);
            ``(5) paragraphs (8), (12), (17), (19), (21), (26), and 
        (27) of section 11(e) (relating to the State plan);
            ``(6) section 11(e)(10) (relating to a fair hearing) or a 
        comparable requirement established by the State under the 
        Temporary Assistance for Needy Families Block Grant; and
            ``(7) section 16 (relating to administrative cost-sharing 
        and quality control).''.
    (b) Section 11(e) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)) 
is amended--
            (1) in paragraph (24), by striking ``and'' at the end;
            (2) in paragraph (25), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(26) the plans of the State agency for operating, at the 
        election of the State, a program under section (4)(a)(2), 
        including--
                    ``(A) the rules and procedures to be followed by 
                the State to determine food stamp benefits;
                    ``(B) a statement specifying whether the program 
                operated by the State under section 4(a)(2) will 
                include households that include members who do not 
                receive regular cash benefits under the program 
                established by the State under the Temporary Assistance 
                for Needy Families Block Grant; and
                    ``(C) a description of the method by which the 
                State or political subdivision will carry out a quality 
                control system under section 16(c).''.

SEC. 204. CONFORMING AMENDMENTS.

    (a) Section 8 of the Food Stamp Act of 1977 (7 U.S.C. 2017) is 
amended by striking subsection (e).
    (b) Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026) is 
amended--
            (1) by striking subsection (i); and
            (2) by redesignating subsections (j), (k), and (l) as 
        subsections (i), (j), and (k), respectively.

                     Subtitle B--Food Stamp Program

SEC. 205. THRIFTY FOOD PLAN.

    Section 3(o) of the Food Stamp Act of 1977 (7 U.S.C. 2012(o)) is 
amended by striking ``(4) through January 1, 1980, adjust the cost of 
such diet every January 1 and July 1'' and all that follows through the 
end of the subsection, and inserting the following: ``(4) on October 1, 
1995, adjust the cost of the thrifty food plan to reflect 103 percent 
of the cost of the thrifty food plan in June 1994 and increase such 
amount by 2 percent, rounding the result to the nearest lower dollar 
increment for each household size; and (5) on October 1, 1996, and each 
October 1 thereafter, increase the amount established for the preceding 
October 1, before such amount was rounded, by 2 percent, rounding the 
result to the nearest lower dollar increment for each household 
size.''.

SEC. 206. INCOME DEDUCTIONS AND ENERGY ASSISTANCE.

    (a) Section 5(d)(11) of the Food Stamp Act of 1977 (7 U.S.C. 
2014(d)(11)) is amended--
            (1) by striking ``(A)''; and
            (2) by striking ``or (B) under any State or local laws,'' 
        and all that follows through ``or impracticable to do so,''.
    (b) Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) 
is amended to read as follows:
    ``(e)(1) Standard and Earned Income Deductions.--(A) In computing 
household income, the Secretary shall allow a standard deduction of 
$134 a month for each household, except that households in Alaska, 
Hawaii, Guam, and the Virgin Islands of the United States shall be 
allowed a standard deduction of $229, $189, $269, and $118, 
respectively.
    ``(B) All households with earned income shall also be allowed an 
additional deduction of 20 percent of all earned income (other than 
that excluded by subsection (d) of this section and that earned under 
section 16(j)), to compensate for taxes, other mandatory deductions 
from salary, and work expenses, except that such additional deduction 
shall not be allowed with respect to earned income that a household 
willfully or fraudulently fails (as proven in a proceeding provided for 
in section 6(b)) to report in a timely manner.
    ``(2) Dependent Care Deduction.--The Secretary shall allow 
households a deduction with respect to expenses other than expenses 
paid on behalf of the household by a third party or amounts made 
available and excluded for the expenses under subsection (d)(3), the 
maximum allowable level of which shall be $200 a month for each 
dependent child under 2 years of age and $175 a month for each other 
dependent, for the actual cost of payments necessary for the care of a 
dependent when such care enables a household member to accept or 
continue employment, or training or education which is preparatory for 
employment.
    ``(3) Excess Shelter Expense Deduction.--(A) The Secretary shall 
allow households, other than those households containing an elderly or 
disabled member, with respect to expenses other than expenses paid on 
behalf of the household by a third party, an excess shelter expense 
deduction to the extent that the monthly amount expended by a household 
for shelter exceeds an amount equal to 50 percent of monthly household 
income after all other applicable deductions have been allowed.
    ``(B) Such excess shelter expense deduction shall not exceed $231 a 
month in the 48 contiguous States and the District of Columbia, and 
shall not exceed, in Alaska, Hawaii, Guam, and the Virgin Islands of 
the United States, $402, $330, $280, and $171 a month, respectively.
    ``(C)(i) Notwithstanding section 2605(f) of the Low-Income Home 
Energy Assistance Act of 1981 (42 U.S.C. 8624(f)), a household may not 
claim as a shelter expense any payment received, or costs paid on its 
behalf, under the Low-Income Home Energy Assistance Act of 1981 (42 
U.S.C. 8621 et seq.).
    ``(ii) Notwithstanding section 2605(f) of the Low-Income Home 
Energy Assistance Act of 1981 (42 U.S.C. 8624(f)), a State agency may 
use a standard utility allowance as provided under subparagraph (D) for 
heating and cooling expenses only if the household incurs out-of-pocket 
heating or cooling expenses in excess of any payment received, or costs 
paid on its behalf, under the Low-Income Home Energy Assistance Act of 
1981 (42 U.S.C. 8621 et seq.).
    ``(iii) For purposes of the food stamp program, assistance provided 
under the Low-Income Home Energy Assistance Act of 1981 shall be 
considered to be prorated over the entire heating or cooling season for 
which it was provided.
    ``(iv) At the end of any certification period and up to one 
additional time during each twelve-month period, a State agency shall 
allow a household to switch between any standard utility allowance and 
a deduction based on its actual utility costs.
    ``(D)(i) In computing the excess shelter expense deduction, a State 
agency may use a standard utility allowance in accordance with 
regulations promulgated by the Secretary, except that a State agency 
may use an allowance which does not fluctuate within a year to reflect 
seasonal variations.
    ``(ii) An allowance for a heating or cooling expense may not be 
used for a household that does not incur a heating or cooling expense, 
as the case may be, or does incur a heating or cooling expense but is 
located in a public housing unit which has central utility meters and 
charges households, with regard to such expense, only for excess 
utility costs.
    ``(iii) No such allowance may be used for a household that shares 
such expense with, and lives with, another individual not participating 
in the food stamp program, another household participating in the food 
stamp program, or both, unless the allowance is prorated between the 
household and the other individual, household, or both.
    ``(4) Homeless Shelter Deduction.--
            ``(A) A State shall develop a standard homeless shelter 
        deduction, which shall not exceed $139 a month, for the 
        expenses that may reasonably be expected to be incurred by 
        households in which all members are homeless but are not 
        receiving free shelter throughout the month. Subject to 
        subparagraph (B), the State shall use such deduction in 
determining the eligibility and allotments for such households.
            ``(B) The Secretary may prohibit the use of the standard 
        homeless shelter deduction for households with extremely low 
        shelter costs.
    ``(5) Elderly and Disabled Households.--(A) The Secretary shall 
allow households containing an elderly or disabled member, with respect 
to expenses other than expenses paid on behalf of the household by a 
third party--
            ``(i) an excess medical expense deduction for that portion 
        of the actual cost of allowable medical expenses, incurred by 
        elderly or disabled members, exclusive of special diets, that 
        exceed $35 a month; and
            ``(ii) an excess shelter expense deduction to the extent 
        that the monthly amount expended by a household for shelter 
        exceeds an amount equal to 50 percent of monthly household 
        income after all other applicable deductions have been allowed.
    ``(B) State agencies shall offer eligible households a method of 
claiming a deduction for recurring medical expenses that are initially 
verified under the excess medical expense deduction provided for in 
subparagraph (A), in lieu of submitting information or verification on 
actual expenses on a monthly basis. The method described in the 
preceding sentence shall be designed to minimize the administrative 
burden for eligible elderly and disabled household members choosing to 
deduct their recurrent medical expenses pursuant to such method, shall 
rely on reasonable estimates of the member's expected medical expenses 
for the certification period (including changes that can be reasonably 
anticipated based on available information about the member's medical 
condition, public or private medical insurance coverage, and the 
current verified medical expenses incurred by the member), and shall 
not require further reporting or verification of a change in medical 
expenses if such a change has been anticipated for the certification 
period.
    ``(6) Child Support Deduction.--Before determining the excess 
shelter expense deduction, the Secretary shall allow all households a 
deduction for child support payments made by a household member to or 
for an individual who is not a member of the household if such 
household member was legally obligated to make such payments, except 
that the Secretary is authorized to prescribe by regulation the 
methods, including calculation on a retrospective basis, that State 
agencies shall use to determine the amount of the deduction for child 
support payments.''.
    (c) Section 11(e)(3) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(3)) is amended by striking ``Under the rules prescribed by the 
Secretary, a State agency shall develop standard estimates'' and all 
that follows through the end of the paragraph.

SEC. 207. VEHICLE ALLOWANCE.

    Section 5(g)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(2)) 
is amended by striking ``a level set by the Secretary, which shall be 
$4,500 through August 31, 1994,'' and all that follows through the end 
of the paragraph, and inserting ``$4,550.''.

SEC. 208. ELIGIBILITY OF ALIENS.

    (a) Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is 
amended--
            (1) by striking subsection (i); and
            (2) by redesignating subsections (j) through (m) as 
        subsections (i) through (l), respectively.
    (b) Section 6(f)(2) of the Food Stamp Act of 1977 (7 U.S.C. 
2015(f)(2)) is amended--
            (1) in subparagraph (B), by inserting the following before 
        the semicolon: ``, and such alien has fulfilled the residence 
        requirements and has an application pending for naturalization 
        under the Immigration and Nationality Act, or is a veteran (as 
        defined in section 101 of title 38, United States Code) with a 
        discharge characterized as an honorable discharge (or is spouse 
        or dependent child of such alien), is on active duty (other 
        than active duty for training) in the Armed Forces of the 
        United States (or is the spouse or dependent child of such 
        alien), or is at least 75 years of age and has resided in the 
        United States for at least 5 years''; and
            (2) in subparagraph (D), by inserting ``, but such alien 
        shall be eligible only for five years after such entry'' before 
        the semicolon.

SEC. 209. WORK REQUIREMENTS.

    (a) Section 6(d) of the Food Stamp Act of 1977 (42 U.S.C. 2015(d)) 
is amended--
            (1) in paragraph (1)(A)(i), by striking ``an employment and 
        training program under paragraph (4), to the extent required 
        under paragraph (4), including any reasonable employment 
        requirements as are prescribed by the State agency in 
        accordance with paragraph (4)'' and inserting ``a State job 
        search program'';
            (2) in paragraph (2)(A)--
                    (A) by striking ``title IV of the Social Security 
                Act (42 U.S.C. 602)'' and inserting ``the program 
                established by the State under the Temporary Assistance 
                for Needy Families Block Grant''; and
                    (B) by striking ``that is comparable to a 
                requirement of paragraph (1)''; and
            (3) by amending paragraph (4), to read as follows:
            ``(4)(A) Except as provided in subparagraphs (B), (C), and 
        (D), an individual shall not be denied initial eligibility but 
        shall be disqualified from the food stamp program if after 90 
        days from the certification of eligibility of such individual 
        the individual was not employed a minimum of 20 hours per week, 
        or does not participate in a program established under section 
        20 or a comparable program established by the State or local 
        government.
            ``(B) Subparagraph (A) shall not apply in the case of an 
        individual who--
                    ``(i) is under eighteen or over fifty years of age;
                    ``(ii) is certified by a physician as physically or 
                mentally unfit for employment;
                    ``(iii) is a parent or other member of a household 
                with responsibility for the care of a dependent; or
                    ``(iv) is participating a minimum of 20 hours per 
                week and is in compliance with the requirements of--
                            ``(I) a program under the Job Training 
                        Partnership Act (29 U.S.C. 1501 et seq.);
                            ``(II) a program under section 236 of the 
                        Trade Act of 1974 (19 U.S.C. 2296); or
                            ``(III) a program of employment or training 
                        operated or supervised by a agency of State or 
                        local government which meets standards deemed 
                        appropriate by the Governor; or
                    ``(v) would otherwise be exempt under subsection 
                (d)(2).
            ``(C) Upon request of the State, the Secretary may waive 
        the requirements of subparagraph (A) in the case of some or all 
        individuals within all or part of the State if the Secretary 
        makes a determination that such area--
                    ``(i) has an unemployment rate of over 10 percent; 
                or
                    ``(ii) does not have a sufficient number of jobs to 
                provide employment for individuals subject to this 
                paragraph. The Secretary shall report to the Committee 
                on Agriculture of the House of Representatives and the 
                Committee on Agriculture, Nutrition, and Forestry of 
                the Senate on the basis on which the Secretary made 
                such a decision.
            ``(D) An individual who has been disqualified from the food 
        stamp program under subparagraph (A) may reestablish 
        eligibility for assistance if such person becomes exempt under 
        subparagraph (B) or by--
                    ``(i) becoming employed for a minimum of 20 hours 
                per week during any consecutive thirty-day period; or
                    ``(ii) participating in a program established under 
                section 20 or a comparable program established by the 
                State or local government.''.
    (b) Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025) is 
amended--
            (1) by striking subsection (h); and
            (2) by redesignating subsections (i) and (j) as subsections 
        (h) and (i), respectively.
    (c) Section 17 of the Food Stamp Act of 1977 (7 U.S.C. 2026), as 
amended by section 204(b), is amended--
            (1) by striking subsection (d); and
            (2) by redesignating subsections (e) through (k) as 
        subsections (d) through (j), respectively.
    (d) Section 20 of the Food Stamp Act of 1977 (7 U.S.C. 2029) is 
amended to read as follows:
    ``Sec. 20. (a)(1) The Secretary shall permit a State that applies 
and submits a plan in compliance with guidelines promulgated by the 
Secretary to operate a program within the State or any political 
subdivision within the State, under which persons who are required to 
work under section 6(d)(4) may accept an offer from the State or 
political subdivision to perform work on its behalf, or on behalf of a 
private nonprofit entity designated by the state or political 
subdivision, in order to continue to qualify for benefits after they 
have initially been judged eligible.
    ``(2) The Secretary shall promulgate guidelines pursuant to 
paragraph (1) which, to the maximum extent practicable, enable a State 
or political subdivision to design and operate a program that is 
compatible and consistent with similar programs operated by the State 
or political subdivision.
    ``(b) To be approved by the Secretary, a program shall provide that 
participants work, in return for compensation consisting of the 
allotment to which the household is entitled under section 8(a), with 
each hour of such work entitling that household to a portion of its 
allotment equal in value to 100 percent of the higher of the applicable 
State minimum wage or the Federal minimum hourly rate under the Fair 
Labor Standards Act of 1938.
    ``(c) No State or political subdivision that receives funds 
provided under this section shall replace any employed worker with an 
individual who is participating in a program under this section for the 
purposes of complying with section 6(d)(4). Such an individual may be 
placed in any position offered by the state or political subdivision 
that--
            ``(1) is a new position;
            ``(2) is a position that became available in the normal 
        course of conducting the business of the State or political 
        subdivision;
            ``(3) involves performing work that would otherwise be 
        performed on an overtime basis by a worker who is not an 
        individual participating in such program; or
            ``(4) that is a position which became available by shifting 
        a current employee to an alternate position.
    ``(d) The Secretary shall allocate among the States or political 
subdivisions in each fiscal year, from funds appropriated for the 
fiscal year under section 18(a)(1), the amount of $75,000,000 to assist 
in carrying out the program under this section during the fiscal year.
    ``(e)(1) In making the allocation required under subsection (d), 
the Secretary shall allocate to each State operating a program under 
this section that percentage of the total funds allocated under 
subsection (d) which equals the estimate of the Secretary of the 
percentage of participants who are required to work under section 
6(d)(4) that reside in such State.
    ``(2) The State shall promptly notify the Secretary if such state 
determines that it will not expend the funds allocated it under 
paragraph (1) and the Secretary shall reallocate such funds as the 
Secretary deems appropriate and equitable.
    ``(f) Notwithstanding subsection (d), the Secretary shall ensure 
that each State operating a program under this section is allocated at 
least $50,000 by reducing, to the extent necessary, the funds allocated 
to those States allocated more than $50,000.
    ``(g) If, in carrying out such program during such fiscal year, a 
State or political subdivision incurs costs that exceed the amount 
allocated to the State agency under subsection (d)--
            ``(1) the Secretary shall pay such state agency an amount 
        equal to 50 percent of such additional costs, subject to the 
        first limitation in paragraph (2); and
            ``(2) the Secretary shall also reimburse each State agency 
        in an amount equal to 50 percent of the total amount of 
        payments made or costs incurred by the State or political 
        subdivision in connection with transportation costs and other 
        expenses reasonably necessary and directly related to 
        participation in a program under this section, except that such 
        total amount shall not exceed an amount representing $25 per 
        participant per month for costs of transportation and other 
        actual costs and cash reimbursement shall not be made out of 
        funds allocated under subsection (d).
    ``(h) The Secretary may suspend or cancel some or all of these 
payments, or may withdraw approval from a State or political 
subdivision to operate a program, upon a finding that the State or 
political subdivision has failed to comply with the requirements of 
this section.''.
    (e) Section 7(i)(6) of the Food Stamp Act of 1977 (7 U.S.C. 
2015(i)(6)) is amended by striking ``section 17(f)'' and inserting 
``17(e)''.

SEC. 210. COMPARABLE TREATMENT OF DISQUALIFIED INDIVIDUALS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) is amended 
by adding at the end the following new subsection:
    ``(i) An individual who is a member of a household who would 
otherwise be eligible to participate in the food stamp program under 
this section and who has been disqualified for noncompliance with 
program requirements from the program established by the State under 
part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.) 
shall not be eligible to participate in the food stamp program during 
the period such disqualification is in effect.''.

SEC. 211. ENCOURAGE ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    (a) Section 7(i) of the Food Stamp Act of 1977 (7 U.S.C. 201(i)) is 
amended--
            (1) by amending paragraph (1) to read as follows:
            ``(1)(A) State agencies are encouraged to implement an on-
        line electronic benefit transfer system in which household 
        benefits determined under section 8(a) or section 24 are issued 
        from and stored in a central data bank and electronically 
        accessed by household members at the point-of-sale.
            ``(B) Subject to paragraph (2), a State is authorized to 
        procure and implement an on-line electronic benefit transfer 
        system under the terms, conditions, and design that the State 
        deems appropriate.
            ``(C) Upon request of a State, the Secretary may waive any 
        provision of this Act prohibiting the effective implementation 
        of an electronic benefit transfer system under this 
        subsection.'';
            (2) in paragraph (2), by striking ``the approval of''; and
            (3) in paragraph (3), by striking ``the Secretary shall not 
        approve such a system unless--'' and inserting ``such system 
        shall provide that--''.
    (b) The Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), as amended 
by section 203(a), is amended by adding at the end the following new 
section:

``SEC. 25. ENCOURAGEMENT OF ELECTRONIC BENEFIT TRANSFER SYSTEMS.

    ``(a) Upon fully implementing an electronic benefit transfer system 
which operates in the entire State, a State may, subject to the 
provisions of this section, elect to receive a grant for any fiscal 
year to operate a low-income nutrition assistance program in such 
fiscal year in lieu of the food stamp program.
    ``(b)(1) A State that meets the requirements of this section and 
elects to operate such program, shall receive each fiscal year under 
this section sum of--
            ``(A)(i) the total dollar value of all benefits issued 
        under the food stamp program by the State during fiscal year 
        1994; or
            ``(ii) the average per fiscal year of the total dollar 
        value of all benefits issued under the food stamp program by 
        the State during fiscal years 1992 through 1994; and
            ``(B) the total amount received by the State for 
        administrative costs under section 16(a) for fiscal year 1994 
        or the average per fiscal year of the total amount received by 
        the State for administrative costs under section 16(a) for 
        fiscal years 1992 through 1994.
    ``(2) Upon approval by the Secretary of the plan submitted by a 
State under subsection (c), the Secretary shall pay to the State at 
such times and in such manner as the Secretary may determine, the 
amount to which the State is eligible under subsection (b)(1).
    ``(c) To be eligible to operate a low-income nutrition assistance 
program under this section, a State shall submit for approval each 
fiscal year a plan of operation specifying the manner in which such a 
program will be conducted by the State. Such plan shall--
            ``(1) certify that the State has implemented a state-wide 
        electronic benefit transfer system in accordance with section 
        7(i);
            ``(2) designate a single State agency responsible for the 
        administration of the low-income nutrition assistance program 
        under this section;
            ``(3) assess the food and nutrition needs of needy persons 
        residing in the State;
            ``(4) limit the assistance to be provided under this 
        section to the purchase of food;
            ``(5) describe the persons to whom such assistance will be 
        provided;
            ``(6) assure the Secretary that assistance will be provided 
        to the most needy persons in the State and that applicants for 
        assistance shall have adequate notice and fair hearings 
        comparable to those required under section 11;
            ``(7) provide that, in the operation of the low-income 
        nutrition assistance program, there shall be no discrimination 
        on the basis of race, sex, religion, national origin, or 
        political beliefs; and
            ``(8) include other information as may be required by the 
        Secretary.
    ``(d) Payments made under this section to the State may be expended 
only in the fiscal year for which such payments are distributed, except 
that the State may reserve up to 5 percent of the grant received for a 
fiscal year to provide assistance under this section in the subsequent 
fiscal year: Provided, That such reserved funds may not total more than 
20 percent of the total grant received under this section for a fiscal 
year.
    ``(e) The State agency shall keep records concerning the operation 
of the program carried out under this section and shall make such 
records available to the Secretary and the Comptroller General of the 
United States.
    ``(f) If the Secretary finds that there is substantial failure by a 
State to comply with the requirements of this section, regulations 
issued pursuant to this section, or the plan approved under subsection 
(c), then the Secretary shall take one or more of the following 
actions:
            ``(1) Suspend all or part of such payment authorized by 
        subsection (b)(2) to be made available to such State, until the 
        Secretary determines the State to be in substantial compliance 
        with such requirements.
            ``(2) Withhold all or part of such payments until the 
        Secretary determines that there is no longer failure to comply 
        with such requirements, at which time the withheld payment may 
        be paid.
            ``(3) Terminate the authority of the State to operate the 
        low-income nutrition assistance program.
    ``(g)(1) States which receive grants under this section shall 
provide for--
            ``(A) a biennial audit, conducted in accordance with the 
        standards of the Comptroller General, of expenditures for the 
        provision of nutrition assistance under this section; and
            ``(B) not later than 120 days of the end of each fiscal 
        year in which an audit is conducted, provide the Secretary with 
        such audit.
States shall make the report of such audit available for public 
inspection.
    ``(2) Not later than 120 days after the end of the fiscal year for 
which a State receives a grant under this section, such State shall 
prepare an activities report comparing actual expenditures for such 
fiscal year for nutrition assistance under this section with the 
expenditures for such fiscal year predicted in the plan submitted in 
accordance with subsection (c). Such State shall make the activities 
report available for public inspection.
    ``(h) Whoever knowingly and willfully embezzles, misapplies, 
steals, or obtains by fraud, false statement, or forgery, any funds, 
assets, or property provided or financed under this section shall be 
fined not more than $10,000 or imprisoned for not more than 5 years, or 
both.''.

SEC. 212. VALUE OF MINIMUM ALLOTMENT.

    Section 8(a) of the Food Stamp Act of 1977 (7 U.S.C. 2017(a)) is 
amended by striking ``, and shall be adjusted on each October 1'' and 
all that follows through the end of such subsection, and inserting a 
period.

SEC. 213. INITIAL MONTH BENEFIT DETERMINATION.

    Section 8(c)(2)(B) of the Food Stamp Act of 1977 (7 U.S.C. 
2017(c)(2)(B)) is amended by striking ``of more than one month'' after 
``following any period''.

SEC. 214. IMPROVING FOOD STAMP PROGRAM MANAGEMENT.

    (a) Section 13(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
2022(a)(1)) is amended--
            (1) in the fifth sentence, by inserting ``(after a 
        determination on any request for a waiver for good cause 
        related to the claim has been made by the Secretary)'' after 
        ``bill for collection''; and
            (2) in the sixth sentence, by striking ``1 year'' and 
        inserting ``2 years''.
    (b) Section 16(c) of the Food Stamp Act of 1977 (7 U.S.C. 2025(c)) 
is amended--
            (1) in paragraph (1)(C)--
                    (A) by striking ``national performance measure'' 
                and inserting ``payment error tolerance level''; and
                    (B) by striking ``equal to--'' and all that follows 
                through the period at the end and inserting the 
                following: ``equal to its payment error rate less such 
                tolerance level times the total value of allotments 
                issued in such a fiscal year by such State agency. The 
                amount of liability shall not be affected by corrective 
                action under subparagraph (B).'';
            (2) in paragraph (3)(A), by striking ``120 days'' and 
        inserting ``60 days (or 90 days at the discretion of the 
        Secretary)'';
            (3) in the last sentence of paragraph (6), by inserting 
        ``shall be used to establish a payment-error tolerance level. 
        Such tolerance level for any fiscal year will be one percentage 
        point added to the lowest national performance measure ever 
        announced up to and including such fiscal year under this 
        section. The payment-error tolerance level'' after ``The 
        announced national performance measure''; and
            (4) by striking paragraphs (8) and (9).

SEC. 215. WORK SUPPLEMENTATION OR SUPPORT PROGRAM.

    (a) Section 11(e) of the Food Stamp Act of 1977 (7 U.S.C. 2020(e)), 
as amended by section 203(b), is amended--
            (1) in paragraph (25), by striking ``and'';
            (2) in paragraph (26), by striking the period and inserting 
        ``; and'' at the end; and
            (3) by adding at the end the following new paragraph:
            ``(27) the plans of the State agency for including eligible 
        food stamp recipients in a work supplementation or support 
        program under section 16(j).''.
    (b) Section 16 of the Food Stamp Act of 1977 (7 U.S.C. 2025), as 
amended by section 209(b), is amended by adding at the end the 
following new subsection:
    ``(j) Work Supplementation of Support Program.--(1) A State may 
elect to use the sums equal to the food stamp benefits that would 
otherwise be allotted to participants under the food stamp program but 
for the operation of this subsection for the purposes of providing and 
subsidizing or supporting jobs under a work supplementation or support 
program established by the State.
    ``(2) If a State that makes the election described in paragraph (1) 
identifies each household that participates in the food stamp program 
which contains an individual who is participating in such work 
supplementation or support program--
            ``(A) the Secretary shall pay to the State an amount equal 
        to the value of the allotment that the household would be 
        eligible to receive but for the operation of this subsection;
            ``(B) the State shall expend such amount in accordance with 
        its work supplementation or support program in lieu of the 
        allotment that the household would receive but for the 
        operation of this subsection;
            ``(C) for purposes of--
                    ``(i) sections 5 and 8(a), the amount received 
                under this subsection shall be excluded from household 
                income and resources; and
                    ``(ii) section 8(b), the amount received under this 
                subsection shall be considered as the value of an 
                allotment provided to the household; and
            ``(D) The household shall not receive an allotment from the 
        State agency for the period during which the member continues 
        to participate in the work supplementation program.
    ``(3) No person shall be excused by reason of the fact that such 
State has a work supplementation or support program from any work 
requirement under section 6(d), except during the periods in which such 
individual is employed under such work supplementation or support 
program.
    ``(4) For purposes of this subsection, the term `work 
supplementation or support program' shall mean a program in which, as 
determined by the Secretary, public assistance, including any benefits 
provided under a program established by the State and the food stamp 
program, is provided to an employer to be used for hiring a public 
assistance recipient.''.

SEC. 216. OBLIGATIONS AND ALLOTMENTS.

    Section 18 of the Food Stamp Act of 1977 (7 U.S.C. 2027) is 
amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by striking ``are authorized to be 
                        appropriated such sums as are necessary for 
                        each of the fiscal years 1991 through 1995'' 
                        and inserting the following: ``is provided to 
                        be obligated, not in excess of the cost 
                        estimate made by the Congressional Budget 
                        Office for this Act, as amended by the Food 
                        Stamp Simplification and Reform Act of 1995, 
                        for the fiscal year ending September 30, 1996, 
                        with adjustments for any estimates of total 
                        obligations for additional fiscal years made by 
                        the Congressional Budget Office to reflect the 
                        provisions contained in the Food Stamp 
                        Simplification and Reform Act of 1995'';
                            (ii) by striking ``In each monthly report, 
                        the Secretary shall also state'' and inserting 
                        ``Also, the Secretary shall file a report every 
                        February 15, April 15, and July 15, stating''; 
                        and
                            (iii) by striking ``supplemental 
                        appropriations'' and inserting ``additional 
                        obligational authority''; and
                    (B) in paragraph (2), by striking ``authorized to 
                be appropriated'' and inserting ``obligated'';
            (2) in subsection (b)--
                    (A) in the first sentence, by striking 
                ``appropriation'' and inserting ``total obligations 
                limitation provided''; and
                    (B) in the second sentence, by striking 
                ``appropriation'' and inserting ``obligational amount 
                provided in subsection (a)(1)'';
            (3) in subsection (c)--
                    (A) by inserting ``or under section 24'' after 
                ``under sections 5(d) and 5(e)'';
                    (B) by inserting ``or under section 24'' after 
                ``under section 5(c)'';
                    (C) by striking ``and'' after ``or otherwise 
                disabled''; and
                    (D) by inserting before the period at the end ``, 
                and (3) adequate and appropriate recommendations on how 
                to equitably achieve such reductions''; and
            (4) in subsection (f), by striking ``No funds 
        appropriated'' and inserting ``None of the funds obligated''.

                     Subtitle C--Program Integrity

SEC. 301. AUTHORITY TO ESTABLISH AUTHORIZATION PERIODS.

    Section 9(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 2018(a)(1)) 
is amended by adding at the end the following new sentence: ``The 
Secretary shall establish specific time periods during which 
authorization to accept and redeem coupons or redeem benefits through 
an electronic benefit transfer system under the food stamp program 
shall be valid.''.

SEC. 302. CONDITION PRECEDENT TO APPROVAL OF RETAIL FOOD STORES AND 
              WHOLESALE FOOD CONCERNS.

    Section 9(a)(1) of the Food Stamp Act of 1977 (7 U.S.C. 
2018(a)(1)), as amended by section 301, is amended by adding at the end 
the following new sentence: ``No retail food store or wholesale food 
concern shall be approved for participation in the food stamp program 
unless an authorized employee of the Department of Agriculture, or an 
official of the State or local government designated by the Department 
of Agriculture, wherever possible, has visited such retail food store 
or wholesale food concern for the purpose of determining whether such 
retail food store or wholesale food concern should be so approved.''.

SEC. 303. WAITING PERIOD FOR RETAIL FOOD STORES AND WHOLESALE FOOD 
              CONCERNS THAT ARE DENIED APPROVAL TO ACCEPT COUPONS.

    Section 9(d) of the Food Stamp Act of 1977 (7 U.S.C. 2018(d)) is 
amended by adding at the end the following new sentence: ``Such retail 
food store or wholesale food concern shall not submit an application 
under subsection (a)(1) for six months from the date of receipt of the 
notice of denial.''.

SEC. 304. DISQUALIFICATION OF RETAIL FOOD STORES AND WHOLESALE FOOD 
              CONCERNS.

    Section 12(a) of the Food Stamp Act of 1977 (7 U.S.C. 2021(a)) is 
amended--
            (1) by inserting ``(1)'' after ``(a); and
            (2) by inserting the following new paragraph:
    ``(2) A retail food store or wholesale food concern that is 
disqualified from participating in the program under section 17 of the 
Child Nutrition Act of 1966 shall for such period of disqualification 
also be disqualified from participating in the food stamp program.''.

SEC. 305. AUTHORITY TO SUSPEND STORES VIOLATING PROGRAM REQUIREMENTS 
              PENDING ADMINISTRATIVE AND JUDICIAL REVIEW.

    Section 14(a) of the Food Stamp Act of 1977 (7 U.S.C. 2023(a)) is 
amended by adding at the end the following new sentence: 
``Notwithstanding any other provision of law, the permanent 
disqualification of a retail food store or wholesale food concern under 
section 12(b)(3) shall be effective from the date of receipt of the 
notice of disqualification.''.

SEC. 306. CRIMINAL FORFEITURE.

    Section 15(g) of the Food Stamp Act of 1977 (7 U.S.C. 2024(g)) is 
amended to read as follows:
    ``(g)(1) The court, in imposing sentence on a person convicted of 
an offense in violation of subsection (b) or (c), shall order, in 
addition to any other sentence imposed pursuant to this subsection, 
that the person forfeit to the United States all property described in 
paragraph (2).
    ``(2) All property, real and personal, used in a transaction or 
attempted transaction, to commit, or to facilitate the commission of, a 
violation (other than a misdemeanor) of subsection (b) or (c), or 
proceeds traceable to a violation of subsection (b) or (c), is subject 
to forfeiture to the United States.
    ``(3) No property shall be forfeited under this subsection to the 
extent of an interest of an owner, by reason of any act or omission 
established by that owner to have been committed or omitted without the 
knowledge or consent of that owner.
    ``(4) The proceeds from any sale of forfeited property and any 
monies forfeited under this subsection shall be used--
            ``(A) to reimburse the Department of Justice for the costs 
        incurred by the Department to initiate and complete the 
        forfeiture proceeding that caused the sale that produced such 
        proceeds;
            ``(B) to reimburse the Department of Agriculture Office of 
        Inspector General for any costs it incurred in the law 
        enforcement effort resulting in the forfeiture;
            ``(C) to reimburse any Federal or State law enforcement 
        agencies for any costs incurred in the law enforcement effort 
        resulting in the forfeiture; and
            ``(D) by the Secretary to carry out the approval, 
        reauthorization, and compliance investigations of retail stores 
        under section 9.''.

SEC. 307. EXPANDED DEFINITION OF ``COUPON''.

    Section 3(d) of the Food Stamp Act of 1977 (7 U.S.C. 2012(d)) is 
amended by striking ``or type of certificate'' and inserting ``type of 
certificate, authorization cards, cash or checks issued in lieu of 
coupons, or access devices, including, but not limited to, electronic 
benefit transfer cards or personal identification numbers''.

SEC. 308. DOUBLED PENALTIES FOR VIOLATING FOOD STAMP PROGRAM 
              REQUIREMENTS.

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

SEC. 309. DISQUALIFICATION OF CONVICTED INDIVIDUALS.

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

SEC. 310. CLAIMS COLLECTION.

    (a) Section 11(e)(8) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(8)) is amended by inserting before the semicolon at the end 
``or refunds of Federal taxes as authorized pursuant to section 3720A 
of title 31 of the United States Code''.
    (b) Section 13(d) of the Act (7 U.S.C. 2022(d)) is amended--
            (1) by striking ``may'' and inserting ``shall''; and
            (2) by inserting before the period at the end ``or refunds 
        of Federal taxes as authorized pursuant to section 3720A of 
        title 31 of the United States Code''.

        Subtitle D--Effective Dates and Miscellaneous Provisions

SEC. 401. EFFECTIVE DATES.

    (a) Except as provided in subsection (b) and (c), this Act and 
amendments made by this Act shall take effect on October 1, 1995.
    (b) The amendments made by section 208 shall take effect on October 
1, 1996.
    (c) The amendments made by section 214 shall take effect on October 
1, 1994.

SEC. 402. SENSE OF THE CONGRESS.

    It is the sense of the Congress that States that operate electronic 
benefit systems to transfer benefits provided under the Food Stamp Act 
of 1977 should operate electronic benefit systems that are compatible 
with each other.

SEC. 403. DEFICIT REDUCTION.

    It is the sense of the Committee on Agriculture of the House of 
Representatives that reductions in outlays resulting from this title 
shall not be taken into account for purposes of section 252 of the 
Balanced Budget and Emergency Deficit Control Act of 1985.
```