I

104TH CONGRESS

2D SESSION H. R. 3507

To restore the American family, enhance support and work opportunities

for families with children, reduce out-of-wedlock pregnancies, reduce welfare dependence by requiring work, meet the health care needs of America’s most vulnerable citizens, control welfare and Medicaid spending,

and increase State flexibility.

IN THE HOUSE OF REPRESENTATIVES

MAY 22, 1996

Mr. ARCHER (for himself, Mr. BLILEY, Mr. ROBERTS, Mr. SHAW, Mr. BILIRAKIS, Mr. EMERSON, Mr. CAMP, Mr. MCCRERY, Mr. COLLINS of Georgia, Mr. ENGLISH of Pennsylvania, Mr. NUSSLE, Ms. DUNN of Washington, Mr. ENSIGN, Mr. LAUGHLIN, and Mr. DEAL of Georgia) introduced

the following bill; which was referred to the Committee on Ways and

Means, and in addition to the Committees on Agriculture, Banking and

Financial Services, Commerce, Economic and Educational Opportunities,

Government Reform and Oversight, the Judiciary, National Security,

International Relations, and the Budget, 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 restore the American family, enhance support and work

opportunities for families with children, reduce out-ofwedlock pregnancies, reduce welfare dependence by requiring work, meet the health care needs of America’s

most vulnerable citizens, control welfare and Medicaid

spending, and increase State flexibility.
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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 ‘‘Personal Responsibility

5 and Work Opportunity Act of 1996’’.

6 SEC. 2. TABLE OF CONTENTS.

7 The table of contents of this Act is as follows:

DIVISION A—REFORMING NONMEDICAL WELFARE PROGRAMS

TITLE I—BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR

NEEDY FAMILIES

Sec. 101. Findings.

Sec. 102. Reference to Social Security Act.

Sec. 103. Block grants to States.

Sec. 104. Services provided by charitable, religious, or private organizations.

Sec. 105. Census data on grandparents as primary caregivers for their grandchildren.

Sec. 106. Report on data processing.

Sec. 107. Study on alternative outcomes measures.

Sec. 108. Conforming amendments to the Social Security Act.

Sec. 109. Conforming amendments to the Food Stamp Act of 1977 and related

provisions.

Sec. 110. Conforming amendments to other laws.

Sec. 111. Development of prototype of counterfeit-resistant social security card

required.

Sec. 112. Disclosure of receipt of Federal funds.

Sec. 113. Modifications to the job opportunities for certain low-income individuals program.

Sec. 114. Secretarial submission of legislative proposal for technical and conforming amendments.

Sec. 115. Effective date; transition rule.

TITLE II—SUPPLEMENTAL SECURITY INCOME

Sec. 200. Reference to Social Security Act.

Subtitle A—Eligibility Restrictions

Sec. 201. Denial of SSI benefits for 10 years to individuals found to have

fraudulently misrepresented residence in order to obtain benefits simultaneously in 2 or more States.

Sec. 202. Denial of SSI benefits for fugitive felons and probation and parole

violators.

Sec. 203. Treatment of prisoners.

Sec. 204. Effective date of application for benefits.

Subtitle B—Benefits for Disabled Children
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Sec. 211. Definition and eligibility rules.

Sec. 212. Eligibility redeterminations and continuing disability reviews.

Sec. 213. Additional accountability requirements.

Sec. 214. Reduction in cash benefits payable to institutionalized individuals

whose medical costs are covered by private insurance.

Sec. 215. Installment payment of large past-due supplemental security income

benefits.

Sec. 216. Recovery of supplemental security income overpayments from social

security benefits.

Sec. 217. Regulations.

Subtitle C—State Supplementation Programs

Sec. 221. Repeal of maintenance of effort requirements applicable to optional

State programs for supplementation of SSI benefits.

Subtitle D—Studies Regarding Supplemental Security Income Program

Sec. 231. Annual report on the supplemental security income program.

Sec. 232. Study of disability determination process.

Sec. 233. Study by General Accounting Office.

Subtitle E—National Commission on the Future of Disability

Sec. 241. Establishment.

Sec. 242. Duties of the Commission.

Sec. 243. Membership.

Sec. 244. Staff and support services.

Sec. 245. Powers of Commission.

Sec. 246. Reports.

Sec. 247. Termination.

Sec. 248. Authorization of appropriations.

Subtitle F—Retirement Age Eligibility

Sec. 251. Eligibility for supplemental security income benefits based on social

security retirement age.

TITLE III—CHILD SUPPORT

Sec. 300. Reference to Social Security Act.

Subtitle A—Eligibility for Services; Distribution of Payments

Sec. 301. State obligation to provide child support enforcement services.

Sec. 302. Distribution of child support collections.

Sec. 303. Privacy safeguards.

Sec. 304. Rights to notification of hearings.

Subtitle B—Locate and Case Tracking

Sec. 311. State case registry.

Sec. 312. Collection and disbursement of support payments.

Sec. 313. State directory of new hires.

Sec. 314. Amendments concerning income withholding.

Sec. 315. Locator information from interstate networks.

Sec. 316. Expansion of the Federal parent locator service.
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Sec. 317. Collection and use of social security numbers for use in child support

enforcement.

Subtitle C—Streamlining and Uniformity of Procedures

Sec. 321. Adoption of uniform State laws.

Sec. 322. Improvements to full faith and credit for child support orders.

Sec. 323. Administrative enforcement in interstate cases.

Sec. 324. Use of forms in interstate enforcement.

Sec. 325. State laws providing expedited procedures.

Subtitle D—Paternity Establishment

Sec. 331. State laws concerning paternity establishment.

Sec. 332. Outreach for voluntary paternity establishment.

Sec. 333. Cooperation by applicants for and recipients of part A assistance.

Subtitle E—Program Administration and Funding

Sec. 341. Performance-based incentives and penalties.

Sec. 342. Federal and State reviews and audits.

Sec. 343. Required reporting procedures.

Sec. 344. Automated data processing requirements.

Sec. 345. Technical assistance.

Sec. 346. Reports and data collection by the secretary.

Subtitle F—Establishment and Modification of Support Orders

Sec. 351. Simplified process for review and adjustment of child support orders.

Sec. 352. Furnishing consumer reports for certain purposes relating to child

support.

Sec. 353. Nonliability for financial institutions providing financial records to

State child support enforcement agencies in child support

cases.

Subtitle G—Enforcement of Support Orders

Sec. 361. Internal Revenue Service collection of arrearages.

Sec. 362. Authority to collect support from Federal employees.

Sec. 363. Enforcement of child support obligations of members of the Armed

Forces.

Sec. 364. Voiding of fraudulent transfers.

Sec. 365. Work requirement for persons owing past-due child support.

Sec. 366. Definition of support order.

Sec. 367. Reporting arrearages to credit bureaus.

Sec. 368. Liens.

Sec. 369. State law authorizing suspension of licenses.

Sec. 370. Denial of passports for nonpayment of child support.

Sec. 371. International support enforcement.

Sec. 372. Financial institution data matches.

Sec. 373. Enforcement of orders against paternal or maternal grandparents in

cases of minor parents.

Sec. 374. Nondischargeability in bankruptcy of certain debts for the support of

a child.

Subtitle H—Medical Support

Sec. 376. Correction to ERISA definition of medical child support order.
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Sec. 377. Enforcement of orders for health care coverage.

Subtitle I—Enhancing Responsibility and Opportunity for Non-Residential

Parents

Sec. 381. Grants to States for access and visitation programs.

Subtitle J—Effective Dates and Conforming Amendments

Sec. 391. Effective dates and conforming amendments.

TITLE IV—RESTRICTING WELFARE AND PUBLIC BENEFITS FOR

ALIENS

Sec. 400. Statements of national policy concerning welfare and immigration.

Subtitle A—Eligibility for Federal Benefits

Sec. 401. Aliens who are not qualified aliens ineligible for Federal public benefits.

Sec. 402. Limited eligibility of qualified aliens for certain Federal programs.

Sec. 403. Five-year limited eligibility of qualified aliens for Federal means-tested public benefit.

Sec. 404. Notification and information reporting.

Subtitle B—Eligibility for State and Local Public Benefits Programs

Sec. 411. Aliens who are not qualified aliens or nonimmigrants ineligible for

State and local public benefits.

Sec. 412. State authority to limit eligibility of qualified aliens for State public

benefits.

Subtitle C—Attribution of Income and Affidavits of Support

Sec. 421. Federal attribution of sponsor’s income and resources to alien.

Sec. 422. Authority for States to provide for attribution of sponsors income and

resources to the alien with respect to State programs.

Sec. 423. Requirements for sponsor’s affidavit of support.

Sec. 424. Cosignature of alien student loans.

Subtitle D—General Provisions

Sec. 431. Definitions.

Sec. 432. Verification of eligibility for Federal public benefits.

Sec. 433. Statutory construction.

Sec. 434. Communication between State and local government agencies and the

Immigration and Naturalization Service.

Sec. 435. Qualifying quarters.

Subtitle E—Conforming Amendments

Sec. 441. Conforming amendments relating to assisted housing.

TITLE V—REDUCTIONS IN FEDERAL GOVERNMENT POSITIONS

Sec. 501. Reductions.

Sec. 502. Reductions in Federal bureaucracy.

Sec. 503. Reducing personnel in Washington, D.C. area.

TITLE VI—REFORM OF PUBLIC HOUSING
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Sec. 601. Failure to comply with other welfare and public assistance programs.

Sec. 602. Fraud under means-tested welfare and public assistance programs.

Sec. 603. Effective date.

TITLE VII—CHILD PROTECTION BLOCK GRANT PROGRAMS AND

FOSTER CARE, ADOPTION ASSISTANCE, AND INDEPENDENT

LIVING PROGRAMS

Subtitle A—Child Protection Block Grant Program and Foster Care,

Adoption Assistance, and Independent Living Programs

CHAPTER 1—BLOCK GRANTS TO STATES FOR THE PROTECTION OF

CHILDREN

Sec. 701. Establishment of program.

Sec. 702. Conforming amendments.

CHAPTER 2—FOSTER CARE, ADOPTION ASSISTANCE, AND INDEPENDENT

LIVING PROGRAMS

Sec. 711. Conforming amendments to part E of title IV.

CHAPTER 3—MISCELLANEOUS

Sec. 731. Secretarial submission of legislative proposal for technical and conforming amendments.

Sec. 732. Sense of the Congress regarding timely adoption of children.

Sec. 733. Effective date; transition rules.

Subtitle B—Child and Family Services Block Grant

Sec. 751. Child and Family Services Block Grant.

Sec. 752. Reauthorizations.

Sec. 753. Repeals.

TITLE VIII—CHILD CARE

Sec. 801. Short title and references.

Sec. 802. Goals.

Sec. 803. Authorization of appropriations and entitlement authority.

Sec. 804. Lead agency.

Sec. 805. Application and plan.

Sec. 806. Limitation on State allotments.

Sec. 807. Activities to improve the quality of child care.

Sec. 808. Repeal of early childhood development and before- and after-school

care requirement.

Sec. 809. Administration and enforcement.

Sec. 810. Payments.

Sec. 811. Annual report and audits.

Sec. 812. Report by the Secretary.

Sec. 813. Allotments.

Sec. 814. Definitions.

Sec. 815. Repeals.

Sec. 816. Effective date.

TITLE IX—CHILD NUTRITION PROGRAMS

Subtitle A—National School Lunch Act
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Sec. 901. State disbursement to schools.

Sec. 902. Nutritional and other program requirements.

Sec. 903. Free and reduced price policy statement.

Sec. 904. Special assistance.

Sec. 905. Miscellaneous provisions and definitions.

Sec. 906. Summer food service program for children.

Sec. 907. Commodity distribution.

Sec. 908. Child care food program.

Sec. 909. Pilot projects.

Sec. 910. Reduction of paperwork.

Sec. 911. Information on income eligibility.

Sec. 912. Nutrition guidance for child nutrition programs.

Sec. 913. Information clearinghouse.

Subtitle B—Child Nutrition Act of 1966

Sec. 921. Special milk program.

Sec. 922. Free and reduced price policy statement.

Sec. 923. School breakfast program authorization.

Sec. 924. State administrative expenses.

Sec. 925. Regulations.

Sec. 926. Prohibitions.

Sec. 927. Miscellaneous provisions and definitions.

Sec. 928. Accounts and records.

Sec. 929. Special supplemental nutrition program for women, infants, and children.

Sec. 930. Cash grants for nutrition education.

Sec. 931. Nutrition education and training.

Sec. 932. Breastfeeding promotion program.

TITLE X—FOOD STAMPS AND COMMODITY DISTRIBUTION

Sec. 1001. Short title.

Subtitle A—Food Stamp Program

Sec. 1011. Definition of certification period.

Sec. 1012. Definition of coupon.

Sec. 1013. Treatment of children living at home.

Sec. 1014. Optional additional criteria for separate household determinations.

Sec. 1015. Adjustment of thrifty food plan.

Sec. 1016. Definition of homeless individual.

Sec. 1017. State option for eligibility standards.

Sec. 1018. Earnings of students.

Sec. 1019. Energy assistance.

Sec. 1020. Deductions from income.

Sec. 1021. Vehicle allowance.

Sec. 1022. Vendor payments for transitional housing counted as income.

Sec. 1023. Doubled penalties for violating food stamp program requirements.

Sec. 1024. Disqualification of convicted individuals.

Sec. 1025. Disqualification.

Sec. 1026. Caretaker exemption.

Sec. 1027. Employment and training.

Sec. 1028. Comparable treatment for disqualification.

Sec. 1029. Disqualification for receipt of multiple food stamp benefits.

Sec. 1030. Disqualification of fleeing felons.
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Sec. 1031. Cooperation with child support agencies.

Sec. 1032. Disqualification relating to child support arrears.

Sec. 1033. Work requirement.

Sec. 1034. Encourage electronic benefit transfer systems.

Sec. 1035. Value of minimum allotment.

Sec. 1036. Benefits on recertification.

Sec. 1037. Optional combined allotment for expedited households.

Sec. 1038. Failure to comply with other means-tested public assistance programs.

Sec. 1039. Allotments for households residing in centers.

Sec. 1040. Condition precedent for approval of retail food stores and wholesale

food concerns.

Sec. 1041. Authority to establish authorization periods.

Sec. 1042. Information for verifying eligibility for authorization.

Sec. 1043. Waiting period for stores that fail to meet authorization criteria.

Sec. 1044. Operation of food stamp offices.

Sec. 1045. State employee and training standards.

Sec. 1046. Exchange of law enforcement information.

Sec. 1047. Expedited coupon service.

Sec. 1048. Withdrawing fair hearing requests.

Sec. 1049. Income, eligibility, and immigration status verification systems.

Sec. 1050. Disqualification of retailers who intentionally submit falsified applications.

Sec. 1051. Disqualification of retailers who are disqualified under the WIC program.

Sec. 1052. Collection of overissuances.

Sec. 1053. Authority to suspend stores violating program requirements pending

administrative and judicial review.

Sec. 1054. Expanded criminal forfeiture for violations.

Sec. 1055. Limitation of Federal match.

Sec. 1056. Standards for administration.

Sec. 1057. Work supplementation or support program.

Sec. 1058. Waiver authority.

Sec. 1059. Authorization of pilot projects.

Sec. 1060. Response to waivers.

Sec. 1061. Employment initiatives program.

Sec. 1062. Reauthorization.

Sec. 1063. Simplified food stamp program.

Sec. 1064. State food assistance block grant.

Subtitle B—Commodity Distribution Programs

Sec. 1071. Emergency food assistance program.

Sec. 1072. Food bank demonstration project.

Sec. 1073. Hunger prevention programs.

Sec. 1074. Report on entitlement commodity processing.

TITLE XI—MISCELLANEOUS

Sec. 1101. Expenditure of Federal funds in accordance with laws and procedures applicable to expenditure of State funds.

Sec. 1102. Elimination of housing assistance with respect to fugitive felons and

probation and parole violators.

Sec. 1103. Sense of the Senate regarding enterprise zones.

Sec. 1104. Sense of the Senate regarding the inability of the non-custodial parent to pay child support.
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Sec. 1105. Food stamp eligibility.

Sec. 1106. Establishing national goals to prevent teenage pregnancies.

Sec. 1107. Sense of the Senate regarding enforcement of statutory rape laws.

Sec. 1108. Sanctioning for testing positive for controlled substances.

Sec. 1109. Abstinence education.

Sec. 1110. Provisions to encourage electronic benefit transfer systems.

Sec. 1111. Reduction in block grants to States for social services.

DIVISION B—RESTRUCTURING MEDICAID

Sec. 2001. Short title of division.

Sec. 2002. Finding; goals for Medicaid restructuring.

Sec. 2003. Restructuring the Medicaid program.

Sec. 2004. Termination of current program and transition.

Sec. 2005. Integration demonstration project.

1 DIVISION A—REFORMING NON2 MEDICAL WELFARE PRO3 GRAMS

4 TITLE I—BLOCK GRANTS FOR

5 TEMPORARY ASSISTANCE

6 FOR NEEDY FAMILIES

7 SEC. 101. FINDINGS.

8 The Congress makes the following findings:

9 (1) Marriage is the foundation of a successful

10 society.

11 (2) Marriage is an essential institution of a suc12 cessful society which promotes the interests of chil13 dren.

14 (3) Promotion of responsible fatherhood and

15 motherhood is integral to successful child rearing

16 and the well-being of children.

17 (4) In 1992, only 54 percent of single-parent

18 families with children had a child support order es-
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1 tablished and, of that 54 percent, only about one2 half received the full amount due. Of the cases en3 forced through the public child support enforcement

4 system, only 18 percent of the caseload has a collec5 tion.

6 (5) The number of individuals receiving aid to

7 families with dependent children (in this section re8 ferred to as ‘‘AFDC’’) has more than tripled since

9 1965. More than two-thirds of these recipients are

10 children. Eighty-nine percent of children receiving

11 AFDC benefits now live in homes in which no father

12 is present.

13 (A)(i) The average monthly number of

14 children receiving AFDC benefits—

15 (I) was 3,300,000 in 1965;

16 (II) was 6,200,000 in 1970;

17 (III) was 7,400,000 in 1980; and

18 (IV) was 9,300,000 in 1992.

19 (ii) While the number of children receiving

20 AFDC benefits increased nearly threefold be21 tween 1965 and 1992, the total number of chil22 dren in the United States aged 0 to 18 has de23 clined by 5.5 percent.

24 (B) The Department of Health and

25 Human Services has estimated that 12,000,000
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1 children will receive AFDC benefits within 10

2 years.

3 (C) The increase in the number of children

4 receiving public assistance is closely related to

5 the increase in births to unmarried women. Be6 tween 1970 and 1991, the percentage of live

7 births to unmarried women increased nearly

8 threefold, from 10.7 percent to 29.5 percent.

9 (6) The increase of out-of-wedlock pregnancies

10 and births is well documented as follows:

11 (A) It is estimated that the rate of non12 marital teen pregnancy rose 23 percent from 54

13 pregnancies per 1,000 unmarried teenagers in

14 1976 to 66.7 pregnancies in 1991. The overall

15 rate of nonmarital pregnancy rose 14 percent

16 from 90.8 pregnancies per 1,000 unmarried

17 women in 1980 to 103 in both 1991 and 1992.

18 In contrast, the overall pregnancy rate for mar19 ried couples decreased 7.3 percent between

20 1980 and 1991, from 126.9 pregnancies per

21 1,000 married women in 1980 to 117.6 preg22 nancies in 1991.

23 (B) The total of all out-of-wedlock births

24 between 1970 and 1991 has risen from 10.7

25 percent to 29.5 percent and if the current trend
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1 continues, 50 percent of all births by the year

2 2015 will be out-of-wedlock.

3 (7) The negative consequences of an out-of-wed4 lock birth on the mother, the child, the family, and

5 society are well documented as follows:

6 (A) Young women 17 and under who give

7 birth outside of marriage are more likely to go

8 on public assistance and to spend more years

9 on welfare once enrolled. These combined ef10 fects of ‘‘younger and longer’’ increase total

11 AFDC costs per household by 25 percent to 30

12 percent for 17-year-olds.

13 (B) Children born out-of-wedlock have a

14 substantially higher risk of being born at a very

15 low or moderately low birth weight.

16 (C) Children born out-of-wedlock are more

17 likely to experience low verbal cognitive attain18 ment, as well as more child abuse, and neglect.

19 (D) Children born out-of-wedlock were

20 more likely to have lower cognitive scores, lower

21 educational aspirations, and a greater likelihood

22 of becoming teenage parents themselves.

23 (E) Being born out-of-wedlock significantly

24 reduces the chances of the child growing up to

25 have an intact marriage.
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1 (F) Children born out-of-wedlock are 3

2 times more likely to be on welfare when they

3 grow up.

4 (8) Currently 35 percent of children in single5 parent homes were born out-of-wedlock, nearly the

6 same percentage as that of children in single-parent

7 homes whose parents are divorced (37 percent).

8 While many parents find themselves, through divorce

9 or tragic circumstances beyond their control, facing

10 the difficult task of raising children alone, neverthe11 less, the negative consequences of raising children in

12 single-parent homes are well documented as follows:

13 (A) Only 9 percent of married-couple fami14 lies with children under 18 years of age have

15 income below the national poverty level. In con16 trast, 46 percent of female-headed households

17 with children under 18 years of age are below

18 the national poverty level.

19 (B) Among single-parent families, nearly

1 20 ⁄2 of the mothers who never married received

AFDC while only 1 21 ⁄5 of divorced mothers re22 ceived AFDC.

23 (C) Children born into families receiving

24 welfare assistance are 3 times more likely to be
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1 on welfare when they reach adulthood than chil2 dren not born into families receiving welfare.

3 (D) Mothers under 20 years of age are at

4 the greatest risk of bearing low-birth-weight ba5 bies.

6 (E) The younger the single parent mother,

7 the less likely she is to finish high school.

8 (F) Young women who have children be9 fore finishing high school are more likely to re10 ceive welfare assistance for a longer period of

11 time.

12 (G) Between 1985 and 1990, the public

13 cost of births to teenage mothers under the aid

14 to families with dependent children program,

15 the food stamp program, and the medicaid pro16 gram has been estimated at $120,000,000,000.

17 (H) The absence of a father in the life of

18 a child has a negative effect on school perform19 ance and peer adjustment.

20 (I) Children of teenage single parents have

21 lower cognitive scores, lower educational aspira22 tions, and a greater likelihood of becoming teen23 age parents themselves.

24 (J) Children of single-parent homes are 3

25 times more likely to fail and repeat a year in
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1 grade school than are children from intact 2-

2 parent families.

3 (K) Children from single-parent homes are

4 almost 4 times more likely to be expelled or sus5 pended from school.

6 (L) Neighborhoods with larger percentages

7 of youth aged 12 through 20 and areas with

8 higher percentages of single-parent households

9 have higher rates of violent crime.

10 (M) Of those youth held for criminal of11 fenses within the State juvenile justice system,

12 only 29.8 percent lived primarily in a home with

13 both parents. In contrast to these incarcerated

14 youth, 73.9 percent of the 62,800,000 children

15 in the Nation’s resident population were living

16 with both parents.

17 (9) Therefore, in light of this demonstration of

18 the crisis in our Nation, it is the sense of the Con19 gress that prevention of out-of-wedlock pregnancy

20 and reduction in out-of-wedlock birth are very im21 portant Government interests and the policy con22 tained in part A of title IV of the Social Security

23 Act (as amended by section 103(a) of this Act) is in24 tended to address the crisis.
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1 SEC. 102. REFERENCE TO SOCIAL SECURITY ACT.

2 Except as otherwise specifically provided, wherever in

3 this title an amendment is expressed in terms of an

4 amendment to or repeal of a section or other provision,

5 the reference shall be considered to be made to that sec6 tion or other provision of the Social Security Act.

7 SEC. 103. BLOCK GRANTS TO STATES.

8 (a) IN GENERAL.—Part A of title IV (42 U.S.C. 601

9 et seq.) is amended to read as follows:

10 ‘‘PART A—BLOCK GRANTS TO STATES FOR

11 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

12 ‘‘SEC. 401. PURPOSE.

13 ‘‘(a) IN GENERAL.—The purpose of this part is to

14 increase the flexibility of States in operating a program

15 designed to—

16 ‘‘(1) provide assistance to needy families so that

17 children may be cared for in their own homes or in

18 the homes of relatives;

19 ‘‘(2) end the dependence of needy parents on

20 government benefits by promoting job preparation,

21 work, and marriage;

22 ‘‘(3) prevent and reduce the incidence of out-of23 wedlock pregnancies and establish annual numerical

24 goals for preventing and reducing the incidence of

25 these pregnancies; and
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1 ‘‘(4) encourage the formation and maintenance

2 of two-parent families.

3 ‘‘(b) NO INDIVIDUAL ENTITLEMENT.—This part

4 shall not be interpreted to entitle any individual or family

5 to assistance under any State program funded under this

6 part.

7 ‘‘SEC. 402. ELIGIBLE STATES; STATE PLAN.

8 ‘‘(a) IN GENERAL.—As used in this part, the term

9 ‘eligible State’ means, with respect to a fiscal year, a State

10 that, during the 2-year period immediately preceding the

11 fiscal year, has submitted to the Secretary a plan that in12 cludes the following:

13 ‘‘(1) OUTLINE OF FAMILY ASSISTANCE PRO14 GRAM.—

15 ‘‘(A) GENERAL PROVISIONS.—A written

16 document that outlines how the State intends to

17 do the following:

18 ‘‘(i) Conduct a program, designed to

19 serve all political subdivisions in the State

20 (not necessarily in a uniform manner),

21 that provides assistance to needy families

22 with (or expecting) children and provides

23 parents with job preparation, work, and

24 support services to enable them to leave

25 the program and become self-sufficient.
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1 ‘‘(ii) Require a parent or caretaker re2 ceiving assistance under the program to

3 engage in work (as defined by the State)

4 once the State determines the parent or

5 caretaker is ready to engage in work, or

6 once the parent or caretaker has received

7 assistance under the program for 24

8 months (whether or not consecutive),

9 whichever is earlier.

10 ‘‘(iii) Ensure that parents and care11 takers receiving assistance under the pro12 gram engage in work activities in accord13 ance with section 407.

14 ‘‘(iv) Take such reasonable steps as

15 the State deems necessary to restrict the

16 use and disclosure of information about in17 dividuals and families receiving assistance

18 under the program attributable to funds

19 provided by the Federal Government.

20 ‘‘(v) Establish goals and take action

21 to prevent and reduce the incidence of out22 of-wedlock pregnancies, with special em23 phasis on teenage pregnancies, and estab24 lish numerical goals for reducing the ille25 gitimacy ratio of the State (as defined in
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1 section 403(a)(2)(B)) for calendar years

2 1996 through 2005.

3 ‘‘(B) SPECIAL PROVISIONS.—

4 ‘‘(i) The document shall indicate

5 whether the State intends to treat families

6 moving into the State from another State

7 differently than other families under the

8 program, and if so, how the State intends

9 to treat such families under the program.

10 ‘‘(ii) The document shall indicate

11 whether the State intends to provide as12 sistance under the program to individuals

13 who are not citizens of the United States,

14 and if so, shall include an overview of such

15 assistance.

16 ‘‘(iii) The document shall set forth ob17 jective criteria for the delivery of benefits

18 and the determination of eligibility and for

19 fair and equitable treatment, including an

20 explanation of how the State will provide

21 opportunities for recipients who have been

22 adversely affected to be heard in a State

23 administrative or appeal process.

24 ‘‘(2) CERTIFICATION THAT THE STATE WILL

25 OPERATE A CHILD SUPPORT ENFORCEMENT PRO-
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1 GRAM.—A certification by the chief executive officer

2 of the State that, during the fiscal year, the State

3 will operate a child support enforcement program

4 under the State plan approved under part D.

5 ‘‘(3) CERTIFICATION THAT THE STATE WILL

6 OPERATE A CHILD PROTECTION PROGRAM.—A cer7 tification by the chief executive officer of the State

8 that, during the fiscal year, the State will operate a

9 child protection program under the State plan ap10 proved under part B.

11 ‘‘(4) CERTIFICATION OF THE ADMINISTRATION

12 OF THE PROGRAM.—A certification by the chief ex13 ecutive officer of the State specifying which State

14 agency or agencies will administer and supervise the

15 program referred to in paragraph (1) for the fiscal

16 year, which shall include assurances that local gov17 ernments and private sector organizations—

18 ‘‘(A) have been consulted regarding the

19 plan and design of welfare services in the State

20 so that services are provided in a manner ap21 propriate to local populations; and

22 ‘‘(B) have had at least 45 days to submit

23 comments on the plan and the design of such

24 services.
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1 ‘‘(5) CERTIFICATION THAT THE STATE WILL

2 PROVIDE INDIANS WITH EQUITABLE ACCESS TO AS3 SISTANCE.—A certification by the chief executive of4 ficer of the State that, during the fiscal year, the

5 State will provide each Indian who is a member of

6 an Indian tribe in the State that does not have a

7 tribal family assistance plan approved under section

8 412 with equitable access to assistance under the

9 State program funded under this part attributable to

10 funds provided by the Federal Government.

11 ‘‘(b) PUBLIC AVAILABILITY OF STATE PLAN SUM12 MARY.—The State shall make available to the public a

13 summary of any plan submitted by the State under this

14 section.

15 ‘‘SEC. 403. GRANTS TO STATES.

16 ‘‘(a) GRANTS.—

17 ‘‘(1) FAMILY ASSISTANCE GRANT.—

18 ‘‘(A) IN GENERAL.—Each eligible State

19 shall be entitled to receive from the Secretary,

20 for each of fiscal years 1996, 1997, 1998,

21 1999, 2000, and 2001 a grant in an amount

22 equal to the State family assistance grant.

23 ‘‘(B) STATE FAMILY ASSISTANCE GRANT

24 DEFINED.—As used in this part, the term
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1 ‘State family assistance grant’ means the great2 est of—

‘‘(i) 1 3 ⁄3 of the total amount required

4 to be paid to the State under former sec5 tion 403 (as in effect on September 30,

6 1995) for fiscal years 1992, 1993, and

7 1994 (other than with respect to amounts

8 expended by the State for child care under

9 subsection (g) or (i) of former section 402

10 (as so in effect));

11 ‘‘(ii)(I) the total amount required to

12 be paid to the State under former section

13 403 for fiscal year 1994 (other than with

14 respect to amounts expended by the State

15 for child care under subsection (g) or (i) of

16 former section 402 (as so in effect)); plus

17 ‘‘(II) an amount equal to 85 percent

18 of the amount (if any) by which the total

19 amount required to be paid to the State

20 under former section 403(a)(5) for emer21 gency assistance for fiscal year 1995 ex22 ceeds the total amount required to be paid

23 to the State under former section

24 403(a)(5) for fiscal year 1994, if, during

25 fiscal year 1994 or 1995, the Secretary ap-
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•HR 3507 IH

1 proved under former section 402 an

2 amendment to the former State plan with

3 respect to the provision of emergency as4 sistance in the context of family preserva5 tion; or

‘‘(iii) 4 6 ⁄3 of the total amount required

7 to be paid to the State under former sec8 tion 403 (as in effect on September 30,

9 1995) for the 1st 3 quarters of fiscal year

10 1995 (other than with respect to amounts

11 expended by the State under the State

12 plan approved under part F (as so in ef13 fect) or for child care under subsection (g)

14 or (i) of former section 402 (as so in ef15 fect)), plus the total amount required to be

16 paid to the State for fiscal year 1995

17 under former section 403(l) (as so in ef18 fect).

19 ‘‘(C) TOTAL AMOUNT REQUIRED TO BE

20 PAID TO THE STATE UNDER FORMER SECTION

21 403 DEFINED.—As used in this part, the term

22 ‘total amount required to be paid to the State

23 under former section 403’ means, with respect

24 to a fiscal year—
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1 ‘‘(i) in the case of a State to which

2 section 1108 does not apply, the sum of—

3 ‘‘(I) the Federal share of mainte4 nance assistance expenditures for the

5 fiscal year, before reduction pursuant

6 to subparagraph (B) or (C) of section

7 403(b)(2) (as in effect on September

8 30, 1995), as reported by the State on

9 ACF Form 231;

10 ‘‘(II) the Federal share of admin11 istrative expenditures (including ad12 ministrative expenditures for the de13 velopment of management information

14 systems) for the fiscal year, as re15 ported by the State on ACF Form

16 231;

17 ‘‘(III) the Federal share of emer18 gency assistance expenditures for the

19 fiscal year, as reported by the State

20 on ACF Form 231;

21 ‘‘(IV) the Federal share of ex22 penditures for the fiscal year with re23 spect to child care pursuant to sub24 sections (g) and (i) of former section

25 402 (as in effect on September 30,
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•HR 3507 IH

1 1995), as reported by the State on

2 ACF Form 231; and

3 ‘‘(V) the aggregate amount re4 quired to be paid to the State for the

5 fiscal year with respect to the State

6 program operated under part F (as in

7 effect on September 30, 1995), as de8 termined by the Secretary, including

9 additional obligations or reductions in

10 obligations made after the close of the

11 fiscal year; and

12 ‘‘(ii) in the case of a State to which

13 section 1108 applies, the lesser of—

14 ‘‘(I) the sum described in clause

15 (i); or

16 ‘‘(II) the total amount certified

17 by the Secretary under former section

18 403 (as in effect during the fiscal

19 year) with respect to the territory.

20 ‘‘(D) INFORMATION TO BE USED IN DE21 TERMINING AMOUNTS.—

22 ‘‘(i) FOR FISCAL YEARS 1992 AND

23 1993.—

24 ‘‘(I) In determining the amounts

25 described in subclauses (I) through
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1 (IV) of subparagraph (C)(i) for any

2 State for each of fiscal years 1992

3 and 1993, the Secretary shall use in4 formation available as of April 28,

5 1995.

6 ‘‘(II) In determining the amount

7 described in subparagraph (C)(i)(V)

8 for any State for each of fiscal years

9 1992 and 1993, the Secretary shall

10 use information available as of Janu11 ary 6, 1995.

12 ‘‘(ii) FOR FISCAL YEAR 1994.—In de13 termining the amounts described in sub14 paragraph (C)(i) for any State for fiscal

15 year 1994, the Secretary shall use informa16 tion available as of April 28, 1995.

17 ‘‘(iii) FOR FISCAL YEAR 1995.—

18 ‘‘(I) In determining the amount

19 described in subparagraph (B)(ii)(II)

20 for any State for fiscal year 1995, the

21 Secretary shall use the information

22 which was reported by the States and

23 estimates made by the States with re24 spect to emergency assistance expend-
27

•HR 3507 IH

1 itures and was available as of August

2 11, 1995.

3 ‘‘(II) In determining the amounts

4 described in subclauses (I) through

5 (III) of subparagraph (C)(i) for any

6 State for fiscal year 1995, the Sec7 retary shall use information available

8 as of October 2, 1995.

9 ‘‘(III) In determining the amount

10 described in subparagraph (C)(i)(IV)

11 for any State for fiscal year 1995, the

12 Secretary shall use information avail13 able as of February 28, 1996.

14 ‘‘(IV) In determining the amount

15 described in subparagraph (C)(i)(V)

16 for any State for fiscal year 1995, the

17 Secretary shall use information avail18 able as of October 5, 1995.

19 ‘‘(E) APPROPRIATION.—Out of any money

20 in the Treasury of the United States not other21 wise appropriated, there are appropriated for

22 fiscal years 1996, 1997, 1998, 1999, 2000, and

23 2001 such sums as are necessary for grants

24 under this paragraph.
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•HR 3507 IH

1 ‘‘(2) GRANT TO REWARD STATES THAT REDUCE

2 OUT-OF-WEDLOCK BIRTHS.—

3 ‘‘(A) IN GENERAL.—Each eligible State

4 shall be entitled to receive from the Secretary

5 for fiscal year 1998 or any succeeding fiscal

6 year, a grant in an amount equal to the State

7 family assistance grant multiplied by—

8 ‘‘(i) 5 percent if—

9 ‘‘(I) the illegitimacy ratio of the

10 State for the fiscal year is at least 1

11 percentage point lower than the ille12 gitimacy ratio of the State for fiscal

13 year 1995; and

14 ‘‘(II) the rate of induced preg15 nancy terminations in the State for

16 the fiscal year is less than the rate of

17 induced pregnancy terminations in the

18 State for fiscal year 1995; or

19 ‘‘(ii) 10 percent if—

20 ‘‘(I) the illegitimacy ratio of the

21 State for the fiscal year is at least 2

22 percentage points lower than the ille23 gitimacy ratio of the State for fiscal

24 year 1995; and
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•HR 3507 IH

1 ‘‘(II) the rate of induced preg2 nancy terminations in the State for

3 the fiscal year is less than the rate of

4 induced pregnancy terminations in the

5 State for fiscal year 1995.

6 ‘‘(B) ILLEGITIMACY RATIO.—As used in

7 this paragraph, the term ‘illegitimacy ratio’

8 means, with respect to a State and a fiscal

9 year—

10 ‘‘(i) the number of out-of-wedlock

11 births that occurred in the State during

12 the most recent fiscal year for which such

13 information is available; divided by

14 ‘‘(ii) the number of births that oc15 curred in the State during the most recent

16 fiscal year for which such information is

17 available.

18 ‘‘(C) DISREGARD OF CHANGES IN DATA

19 DUE TO CHANGED REPORTING METHODS.—For

20 purposes of subparagraph (A), the Secretary

21 shall disregard—

22 ‘‘(i) any difference between the illegit23 imacy ratio of a State for a fiscal year and

24 the illegitimacy ratio of the State for fiscal

25 year 1995 which is attributable to a
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•HR 3507 IH

1 change in State methods of reporting data

2 used to calculate the illegitimacy ratio; and

3 ‘‘(ii) any difference between the rate

4 of induced pregnancy terminations in a

5 State for a fiscal year and such rate for

6 fiscal year 1995 which is attributable to a

7 change in State methods of reporting data

8 used to calculate such rate.

9 ‘‘(D) APPROPRIATION.—Out of any money

10 in the Treasury of the United States not other11 wise appropriated, there are appropriated for

12 fiscal year 1998 and for each succeeding fiscal

13 year such sums as are necessary for grants

14 under this paragraph.

15 ‘‘(3) SUPPLEMENTAL GRANT FOR POPULATION

16 INCREASES IN CERTAIN STATES.—

17 ‘‘(A) IN GENERAL.—Each qualifying State

18 shall, subject to subparagraph (F), be entitled

19 to receive from the Secretary—

20 ‘‘(i) for fiscal year 1997 a grant in an

21 amount equal to 2.5 percent of the total

22 amount required to be paid to the State

23 under former section 403 (as in effect dur24 ing fiscal year 1994) for fiscal year 1994;

25 and
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1 ‘‘(ii) for each of fiscal years 1998,

2 1999, and 2000, a grant in an amount

3 equal to the sum of—

4 ‘‘(I) the amount (if any) required

5 to be paid to the State under this

6 paragraph for the immediately preced7 ing fiscal year; and

8 ‘‘(II) 2.5 percent of the sum of—

9 ‘‘(aa) the total amount re10 quired to be paid to the State

11 under former section 403 (as in

12 effect during fiscal year 1994)

13 for fiscal year 1994; and

14 ‘‘(bb) the amount (if any)

15 required to be paid to the State

16 under this paragraph for the fis17 cal year preceding the fiscal year

18 for which the grant is to be

19 made.

20 ‘‘(B) PRESERVATION OF GRANT WITHOUT

21 INCREASES FOR STATES FAILING TO REMAIN

22 QUALIFYING STATES.—Each State that is not a

23 qualifying State for a fiscal year specified in

24 subparagraph (A)(ii) but was a qualifying State

25 for a prior fiscal year shall, subject to subpara-
32

•HR 3507 IH

1 graph (F), be entitled to receive from the Sec2 retary for the specified fiscal year, a grant in

3 an amount equal to the amount required to be

4 paid to the State under this paragraph for the

5 most recent fiscal year for which the State was

6 a qualifying State.

7 ‘‘(C) QUALIFYING STATE.—

8 ‘‘(i) IN GENERAL.—For purposes of

9 this paragraph, a State is a qualifying

10 State for a fiscal year if—

11 ‘‘(I) the level of welfare spending

12 per poor person by the State for the

13 immediately preceding fiscal year is

14 less than the national average level of

15 State welfare spending per poor per16 son for such preceding fiscal year; and

17 ‘‘(II) the population growth rate

18 of the State (as determined by the

19 Bureau of the Census) for the most

20 recent fiscal year for which informa21 tion is available exceeds the average

22 population growth rate for all States

23 (as so determined) for such most re24 cent fiscal year.
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•HR 3507 IH

1 ‘‘(ii) STATE MUST QUALIFY IN FISCAL

2 YEAR 1997.—Notwithstanding clause (i), a

3 State shall not be a qualifying State for

4 any fiscal year after 1997 by reason of

5 clause (i) if the State is not a qualifying

6 State for fiscal year 1997 by reason of

7 clause (i).

8 ‘‘(iii) CERTAIN STATES DEEMED

9 QUALIFYING STATES.—For purposes of

10 this paragraph, a State is deemed to be a

11 qualifying State for fiscal years 1997,

12 1998, 1999, and 2000 if—

13 ‘‘(I) the level of welfare spending

14 per poor person by the State for fiscal

15 year 1996 is less than 35 percent of

16 the national average level of State

17 welfare spending per poor person for

18 fiscal year 1996; or

19 ‘‘(II) the population of the State

20 increased by more than 10 percent

21 from April 1, 1990 to July 1, 1994,

22 according to the population estimates

23 in publication CB94-204 of the Bu24 reau of the Census.
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•HR 3507 IH

1 ‘‘(D) DEFINITIONS.—As used in this para2 graph:

3 ‘‘(i) LEVEL OF WELFARE SPENDING

4 PER POOR PERSON.—The term ‘level of

5 State welfare spending per poor person’

6 means, with respect to a State and a fiscal

7 year—

8 ‘‘(I) the sum of—

9 ‘‘(aa) the total amount re10 quired to be paid to the State

11 under former section 403 (as in

12 effect during fiscal year 1994)

13 for fiscal year 1994; and

14 ‘‘(bb) the amount (if any)

15 paid to the State under this

16 paragraph for the immediately

17 preceding fiscal year; divided by

18 ‘‘(II) the number of individuals,

19 according to the 1990 decennial cen20 sus, who were residents of the State

21 and whose income was below the pov22 erty line.

23 ‘‘(ii) NATIONAL AVERAGE LEVEL OF

24 STATE WELFARE SPENDING PER POOR

25 PERSON.—The term ‘national average level
35

•HR 3507 IH

1 of State welfare spending per poor person’

2 means, with respect to a fiscal year, an

3 amount equal to—

4 ‘‘(I) the total amount required to

5 be paid to the States under former

6 section 403 (as in effect during fiscal

7 year 1994) for fiscal year 1994; di8 vided by

9 ‘‘(II) the number of individuals,

10 according to the 1990 decennial cen11 sus, who were residents of any State

12 and whose income was below the pov13 erty line.

14 ‘‘(iii) STATE.—The term ‘State’

15 means each of the 50 States of the United

16 States and the District of Columbia.

17 ‘‘(E) APPROPRIATION.—Out of any money

18 in the Treasury of the United States not other19 wise appropriated, there are appropriated for

20 fiscal years 1997, 1998, 1999, and 2000 such

21 sums as are necessary for grants under this

22 paragraph, in a total amount not to exceed

23 $800,000,000.

24 ‘‘(F) GRANTS REDUCED PRO RATA IF IN25 SUFFICIENT APPROPRIATIONS.—If the amount
36

•HR 3507 IH

1 appropriated pursuant to this paragraph for a

2 fiscal year is less than the total amount of pay3 ments otherwise required to be made under this

4 paragraph for the fiscal year, then the amount

5 otherwise payable to any State for the fiscal

6 year under this paragraph shall be reduced by

7 a percentage equal to the amount so appro8 priated divided by such total amount.

9 ‘‘(G) BUDGET SCORING.—Notwithstanding

10 section 257(b)(2) of the Balanced Budget and

11 Emergency Deficit Control Act of 1985, the

12 baseline shall assume that no grant shall be

13 made under this paragraph after fiscal year

14 2000.

15 ‘‘(4) BONUS TO REWARD HIGH PERFORMANCE

16 STATES.—

17 ‘‘(A) IN GENERAL.—The Secretary shall

18 make a grant pursuant to this paragraph to

19 each State for each bonus year for which the

20 State is a high performing State.

21 ‘‘(B) AMOUNT OF GRANT.—

22 ‘‘(i) IN GENERAL.—Subject to clause

23 (ii) of this subparagraph, the Secretary

24 shall determine the amount of the grant

25 payable under this paragraph to a high
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1 performing State for a bonus year, which

2 shall be based on the score assigned to the

3 State under subparagraph (D)(i) for the

4 fiscal year that immediately precedes the

5 bonus year.

6 ‘‘(ii) LIMITATION.—The amount pay7 able to a State under this paragraph for a

8 bonus year shall not exceed 5 percent of

9 the State family assistance grant.

10 ‘‘(C) FORMULA FOR MEASURING STATE

11 PERFORMANCE.—Not later than 1 year after

12 the date of the enactment of the Personal Re13 sponsibility and Work Opportunity Act of 1996,

14 the Secretary, in consultation with the National

15 Governors’ Association and the American Pub16 lic Welfare Association, shall develop a formula

17 for measuring State performance in operating

18 the State program funded under this part so as

19 to achieve the goals set forth in section 401(a),

20 based on employment-related criteria which may

21 include such factors as the number of families

22 that become ineligible for assistance under the

23 State program funded under this part as a re24 sult of unsubsidized employment and the extent

25 to which the State exceeds the work participa-
38

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1 tion rates required by section 407(a) and may

2 take into account the unemployment conditions

3 of the State.

4 ‘‘(D) SCORING OF STATE PERFORMANCE;

5 SETTING OF PERFORMANCE THRESHOLDS.—

6 For each bonus year, the Secretary shall—

7 ‘‘(i) use the formula developed under

8 subparagraph (C) to assign a score to each

9 eligible State for the fiscal year that imme10 diately precedes the bonus year; and

11 ‘‘(ii) prescribe a performance thresh12 old in such a manner so as to ensure

13 that—

14 ‘‘(I) the average annual total

15 amount of grants to be made under

16 this paragraph for each bonus year

17 equals $200,000,000; and

18 ‘‘(II) the total amount of grants

19 to be made under this paragraph for

20 all bonus years equals

21 $1,000,000,000.

22 ‘‘(E) DEFINITIONS.—As used in this para23 graph:
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•HR 3507 IH

1 ‘‘(i) BONUS YEAR.—The term ‘bonus

2 year’ means fiscal years 1999, 2000, 2001,

3 2002, and 2003.

4 ‘‘(ii) HIGH PERFORMING STATE.—The

5 term ‘high performing State’ means, with

6 respect to a bonus year, an eligible State

7 whose score assigned pursuant to subpara8 graph (D)(i) for the fiscal year imme9 diately preceding the bonus year equals or

10 exceeds the performance threshold pre11 scribed under subparagraph (D)(ii) for

12 such preceding fiscal year.

13 ‘‘(F) APPROPRIATION.—Out of any money

14 in the Treasury of the United States not other15 wise appropriated, there are appropriated for

16 fiscal years 1999 through 2003 $1,000,000,000

17 for grants under this paragraph.

18 ‘‘(b) CONTINGENCY FUND.—

19 ‘‘(1) ESTABLISHMENT.—There is hereby estab20 lished in the Treasury of the United States a fund

21 which shall be known as the ‘Contingency Fund for

22 State Welfare Programs’ (in this section referred to

23 as the ‘Fund’).

24 ‘‘(2) DEPOSITS INTO FUND.—Out of any money

25 in the Treasury of the United States not otherwise
40

•HR 3507 IH

1 appropriated, there are appropriated for fiscal years

2 1997, 1998, 1999, 2000, and 2001 such sums as are

3 necessary for payment to the Fund in a total

4 amount not to exceed $2,000,000,000.

5 ‘‘(3) GRANTS.—

6 ‘‘(A) PROVISIONAL PAYMENTS.—If an eli7 gible State submits to the Secretary a request

8 for funds under this paragraph during an eligi9 ble month, the Secretary shall, subject to this

10 paragraph, pay to the State, from amounts ap11 propriated pursuant to paragraph (2), an

12 amount equal to the amount of funds so re13 quested.

14 ‘‘(B) PAYMENT PRIORITY.—The Secretary

15 shall make payments under subparagraph (A)

16 in the order in which the Secretary receives re17 quests for such payments.

18 ‘‘(C) LIMITATIONS.—

19 ‘‘(i) MONTHLY PAYMENT TO A

20 STATE.—The total amount paid to a single

21 State under subparagraph (A) during a

month shall not exceed 1 22 ⁄12 of 20 percent

23 of the State family assistance grant.

24 ‘‘(ii) PAYMENTS TO ALL STATES.—

25 The total amount paid to all States under
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•HR 3507 IH

1 subparagraph (A) during fiscal years 1997

2 through 2001 shall not exceed the total

3 amount appropriated pursuant to para4 graph (2).

5 ‘‘(4) ANNUAL RECONCILIATION.—Notwithstand6 ing paragraph (3), at the end of each fiscal year,

7 each State shall remit to the Secretary an amount

8 equal to the amount (if any) by which the total

9 amount paid to the State under paragraph (3) dur10 ing the fiscal year exceeds—

11 ‘‘(A) the Federal medical assistance per12 centage for the State for the fiscal year (as de13 fined in section 1905(b), as in effect on Sep14 tember 30, 1995) of the amount (if any) by

15 which the expenditures under the State pro16 gram funded under this part for the fiscal year

17 exceed historic State expenditures (as defined in

18 section 409(a)(7)(B)(iii)); multiplied by

‘‘(B) 1 19 ⁄12 times the number of months dur20 ing the fiscal year for which the Secretary

21 makes a payment to the State under this sub22 section.

23 ‘‘(5) ELIGIBLE MONTH.—As used in paragraph

24 (3)(A), the term ‘eligible month’ means, with respect

25 to a State, a month in the 2-month period that be-
42

•HR 3507 IH

1 gins with any month for which the State is a needy

2 State.

3 ‘‘(6) NEEDY STATE.—For purposes of para4 graph (5), a State is a needy State for a month if—

5 ‘‘(A) the average rate of—

6 ‘‘(i) total unemployment in such State

7 (seasonally adjusted) for the period con8 sisting of the most recent 3 months for

9 which data for all States are published

10 equals or exceeds 6.5 percent; and

11 ‘‘(ii) total unemployment in such

12 State (seasonally adjusted) for the 3-

13 month period equals or exceeds 110 per14 cent of such average rate for either (or

15 both) of the corresponding 3-month periods

16 ending in the 2 preceding calendar years;

17 or

18 ‘‘(B) as determined by the Secretary of

19 Agriculture (in the discretion of the Secretary

20 of Agriculture), the monthly average number of

21 individuals (as of the last day of each month)

22 participating in the food stamp program in the

23 State in the then most recently concluded 3-

24 month period for which data are available ex-
43

•HR 3507 IH

1 ceeds by not less than 10 percent the lesser

2 of—

3 ‘‘(i) the monthly average number of

4 individuals (as of the last day of each

5 month) in the State that would have par6 ticipated in the food stamp program in the

7 corresponding 3-month period in fiscal

8 year 1994 if the amendments made by ti9 tles IV and X of the Personal Responsibil10 ity and Work Opportunity Act of 1996 had

11 been in effect throughout fiscal year 1994;

12 or

13 ‘‘(ii) the monthly average number of

14 individuals (as of the last day of each

15 month) in the State that would have par16 ticipated in the food stamp program in the

17 corresponding 3-month period in fiscal

18 year 1995 if the amendments made by ti19 tles IV and X of the Personal Responsibil20 ity and Work Opportunity Act of 1996 had

21 been in effect throughout fiscal year 1995.

22 ‘‘(7) OTHER TERMS DEFINED.—As used in this

23 subsection:
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•HR 3507 IH

1 ‘‘(A) STATE.—The term ‘State’ means

2 each of the 50 States of the United States and

3 the District of Columbia.

4 ‘‘(B) SECRETARY.—The term ‘Secretary’

5 means the Secretary of the Treasury.

6 ‘‘(8) ANNUAL REPORTS.—The Secretary shall

7 annually report to the Congress on the status of the

8 Fund.

9 ‘‘(9) BUDGET SCORING.—Notwithstanding sec10 tion 257(b)(2) of the Balanced Budget and Emer11 gency Deficit Control Act of 1985, the baseline shall

12 assume that no grant shall be made under this sub13 section after fiscal year 2001.

14 ‘‘SEC. 404. USE OF GRANTS.

15 ‘‘(a) GENERAL RULES.—Subject to this part, a State

16 to which a grant is made under section 403 may use the

17 grant—

18 ‘‘(1) in any manner that is reasonably cal19 culated to accomplish the purpose of this part, in20 cluding to provide low income households with as21 sistance in meeting home heating and cooling costs;

22 or

23 ‘‘(2) in any manner that the State was author24 ized to use amounts received under part A or F, as

25 such parts were in effect on September 30, 1995.
45

•HR 3507 IH

1 ‘‘(b) LIMITATION ON USE OF GRANT FOR ADMINIS2 TRATIVE PURPOSES.—

3 ‘‘(1) LIMITATION.—A State to which a grant is

4 made under section 403 shall not expend more than

5 15 percent of the grant for administrative purposes.

6 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

7 apply to the use of a grant for information tech8 nology and computerization needed for tracking or

9 monitoring required by or under this part.

10 ‘‘(c) AUTHORITY TO TREAT INTERSTATE IMMI11 GRANTS UNDER RULES OF FORMER STATE.—A State op12 erating a program funded under this part may apply to

13 a family the rules (including benefit amounts) of the pro14 gram funded under this part of another State if the family

15 has moved to the State from the other State and has re16 sided in the State for less than 12 months.

17 ‘‘(d) AUTHORITY TO USE PORTION OF GRANT FOR

18 OTHER PURPOSES.—

19 ‘‘(1) IN GENERAL.—A State may use not more

20 than 30 percent of the amount of the grant made to

21 the State under section 403 for a fiscal year to carry

22 out a State program pursuant to any or all of the

23 following provisions of law:

24 ‘‘(A) Part B or E of this title.

25 ‘‘(B) Title XX of this Act.
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•HR 3507 IH

1 ‘‘(C) The Child Care and Development

2 Block Grant Act of 1990.

3 ‘‘(2) APPLICABLE RULES.—Any amount paid to

4 the State under this part that is used to carry out

5 a State program pursuant to a provision of law spec6 ified or described in paragraph (1) shall not be sub7 ject to the requirements of this part, but shall be

8 subject to the requirements that apply to Federal

9 funds provided directly under the provision of law to

10 carry out the program.

11 ‘‘(e) AUTHORITY TO RESERVE CERTAIN AMOUNTS

12 FOR ASSISTANCE.—A State may reserve amounts paid to

13 the State under this part for any fiscal year for the pur14 pose of providing, without fiscal year limitation, assistance

15 under the State program funded under this part.

16 ‘‘(f) AUTHORITY TO OPERATE EMPLOYMENT PLACE17 MENT PROGRAM.—A State to which a grant is made under

18 section 403 may use the grant to make payments (or pro19 vide job placement vouchers) to State-approved public and

20 private job placement agencies that provide employment

21 placement services to individuals who receive assistance

22 under the State program funded under this part.

23 ‘‘(g) IMPLEMENTATION OF ELECTRONIC BENEFIT

24 TRANSFER SYSTEM.—A State to which a grant is made

25 under section 403 is encouraged to implement an elec-
47

•HR 3507 IH

1 tronic benefit transfer system for providing assistance

2 under the State program funded under this part, and may

3 use the grant for such purpose.

4 ‘‘SEC. 405. ADMINISTRATIVE PROVISIONS.

5 ‘‘(a) QUARTERLY.—The Secretary shall pay each

6 grant payable to a State under section 403 in quarterly

7 installments.

8 ‘‘(b) NOTIFICATION.—Not later than 3 months before

9 the payment of any such quarterly installment to a State,

10 the Secretary shall notify the State of the amount of any

11 reduction determined under section 412(a)(1)(B) with re12 spect to the State.

13 ‘‘(c) COMPUTATION AND CERTIFICATION OF PAY14 MENTS TO STATES.—

15 ‘‘(1) COMPUTATION.—The Secretary shall esti16 mate the amount to be paid to each eligible State for

17 each quarter under this part, such estimate to be

18 based on a report filed by the State containing an

19 estimate by the State of the total sum to be ex20 pended by the State in the quarter under the State

21 program funded under this part and such other in22 formation as the Secretary may find necessary.

23 ‘‘(2) CERTIFICATION.—The Secretary of Health

24 and Human Services shall certify to the Secretary of

25 the Treasury the amount estimated under paragraph
48

•HR 3507 IH

1 (1) with respect to a State, reduced or increased to

2 the extent of any overpayment or underpayment

3 which the Secretary of Health and Human Services

4 determines was made under this part to the State

5 for any prior quarter and with respect to which ad6 justment has not been made under this paragraph.

7 ‘‘(d) PAYMENT METHOD.—Upon receipt of a certifi8 cation under subsection (c)(2) with respect to a State, the

9 Secretary of the Treasury shall, through the Fiscal Service

10 of the Department of the Treasury and before audit or

11 settlement by the General Accounting Office, pay to the

12 State, at the time or times fixed by the Secretary of

13 Health and Human Services, the amount so certified.

14 ‘‘(e) COLLECTION OF STATE OVERPAYMENTS TO

15 FAMILIES FROM FEDERAL TAX REFUNDS.—

16 ‘‘(1) IN GENERAL.—Upon receiving notice from

17 the Secretary of Health and Human Services that a

18 State agency administering a program funded under

19 this part has notified the Secretary that a named in20 dividual has been overpaid under the State program

21 funded under this part, the Secretary of the Treas22 ury shall determine whether any amounts as refunds

23 of Federal taxes paid are payable to such individual,

24 regardless of whether the individual filed a tax re25 turn as a married or unmarried individual. If the
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•HR 3507 IH

1 Secretary of the Treasury finds that any such

2 amount is so payable, the Secretary shall withhold

3 from such refunds an amount equal to the overpay4 ment sought to be collected by the State and pay

5 such amount to the State agency.

6 ‘‘(2) REGULATIONS.—The Secretary of the

7 Treasury shall issue regulations, after review by the

8 Secretary of Health and Human services, that pro9 vide—

10 ‘‘(A) that a State may only submit under

11 paragraph (1) requests for collection of over12 payments with respect to individuals—

13 ‘‘(i) who are no longer receiving as14 sistance under the State program funded

15 under this part;

16 ‘‘(ii) with respect to whom the State

17 has already taken appropriate action under

18 State law against the income or resources

19 of the individuals or families involved to

20 collect the past-due legally enforceable

21 debt; and

22 ‘‘(iii) to whom the State agency has

23 given notice of its intent to request with24 holding by the Secretary of the Treasury
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1 from the income tax refunds of such indi2 viduals;

3 ‘‘(B) that the Secretary of the Treasury

4 will give a timely and appropriate notice to any

5 other person filing a joint return with the indi6 vidual whose refund is subject to withholding

7 under paragraph (1); and

8 ‘‘(C) the procedures that the State and the

9 Secretary of the Treasury will follow in carrying

10 out this subsection which, to the maximum ex11 tent feasible and consistent with the provisions

12 of this subsection, will be the same as those is13 sued pursuant to section 464(b) applicable to

14 collection of past-due child support.

15 ‘‘SEC. 406. FEDERAL LOANS FOR STATE WELFARE PRO16 GRAMS.

17 ‘‘(a) LOAN AUTHORITY.—

18 ‘‘(1) IN GENERAL.—The Secretary shall make

19 loans to any loan-eligible State, for a period to ma20 turity of not more than 3 years.

21 ‘‘(2) LOAN-ELIGIBLE STATE.—As used in para22 graph (1), the term ‘loan-eligible State’ means a

23 State against which a penalty has not been imposed

24 under section 409(a)(1).
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1 ‘‘(b) RATE OF INTEREST.—The Secretary shall

2 charge and collect interest on any loan made under this

3 section at a rate equal to the current average market yield

4 on outstanding marketable obligations of the United

5 States with remaining periods to maturity comparable to

6 the period to maturity of the loan.

7 ‘‘(c) USE OF LOAN.—A State shall use a loan made

8 to the State under this section only for any purpose for

9 which grant amounts received by the State under section

10 403(a) may be used, including—

11 ‘‘(1) welfare anti-fraud activities; and

12 ‘‘(2) the provision of assistance under the State

13 program to Indian families that have moved from

14 the service area of an Indian tribe with a tribal fam15 ily assistance plan approved under section 412.

16 ‘‘(d) LIMITATION ON TOTAL AMOUNT OF LOANS TO

17 A STATE.—The cumulative dollar amount of all loans

18 made to a State under this section during fiscal years

19 1997 through 2001 shall not exceed 10 percent of the

20 State family assistance grant.

21 ‘‘(e) LIMITATION ON TOTAL AMOUNT OF OUTSTAND22 ING LOANS.—The total dollar amount of loans outstand23 ing under this section may not exceed $1,700,000,000.

24 ‘‘(f) APPROPRIATION.—Out of any money in the

25 Treasury of the United States not otherwise appropriated,
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1 there are appropriated such sums as may be necessary for

2 the cost of loans under this section.

3 ‘‘SEC. 407. MANDATORY WORK REQUIREMENTS.

4 ‘‘(a) PARTICIPATION RATE REQUIREMENTS.—

5 ‘‘(1) ALL FAMILIES.—A State to which a grant

6 is made under section 403 for a fiscal year shall

7 achieve the minimum participation rate specified in

8 the following table for the fiscal year with respect to

9 all families receiving assistance under the State pro10 gram funded under this part:

The minimum

participation

‘‘If the fiscal year is: rate is:

1996 ............................................................... 15

1997 ............................................................... 20

1998 ............................................................... 25

1999 ............................................................... 30

2000 ............................................................... 35

2001 ............................................................... 40

2002 or thereafter ......................................... 50.

11 ‘‘(2) 2-PARENT FAMILIES.—A State to which a

12 grant is made under section 403 for a fiscal year

13 shall achieve the minimum participation rate speci14 fied in the following table for the fiscal year with re15 spect to 2-parent families receiving assistance under

16 the State program funded under this part:

The minimum

participation

‘‘If the fiscal year is: rate is:

1996 ............................................................... 50

1997 ............................................................... 75

1998 ............................................................... 75

1999 or thereafter ......................................... 90.

17 ‘‘(b) CALCULATION OF PARTICIPATION RATES.—
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1 ‘‘(1) ALL FAMILIES.—

2 ‘‘(A) AVERAGE MONTHLY RATE.—For pur3 poses of subsection (a)(1), the participation

4 rate for all families of a State for a fiscal year

5 is the average of the participation rates for all

6 families of the State for each month in the fis7 cal year.

8 ‘‘(B) MONTHLY PARTICIPATION RATES.—

9 The participation rate of a State for all families

10 of the State for a month, expressed as a per11 centage, is—

12 ‘‘(i) the number of families receiving

13 assistance under the State program funded

14 under this part that include an adult who

15 is engaged in work for the month; divided

16 by

17 ‘‘(ii) the amount by which—

18 ‘‘(I) the number of families re19 ceiving such assistance during the

20 month that include an adult receiving

21 such assistance; exceeds

22 ‘‘(II) the number of families re23 ceiving such assistance that are sub24 ject in such month to a penalty de25 scribed in subsection (e)(1) but have
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•HR 3507 IH

1 not been subject to such penalty for

2 more than 3 months within the pre3 ceding 12-month period (whether or

4 not consecutive).

5 ‘‘(2) 2-PARENT FAMILIES.—

6 ‘‘(A) AVERAGE MONTHLY RATE.—For pur7 poses of subsection (a)(2), the participation

8 rate for 2-parent families of a State for a fiscal

9 year is the average of the participation rates for

10 2-parent families of the State for each month in

11 the fiscal year.

12 ‘‘(B) MONTHLY PARTICIPATION RATES.—

13 The participation rate of a State for 2-parent

14 families of the State for a month shall be cal15 culated by use of the formula set forth in para16 graph (1)(B), except that in the formula the

17 term ‘number of 2-parent families’ shall be sub18 stituted for the term ‘number of families’ each

19 place such latter term appears.

20 ‘‘(3) PRO RATA REDUCTION OF PARTICIPATION

21 RATE DUE TO CASELOAD REDUCTIONS NOT RE22 QUIRED BY FEDERAL LAW.—

23 ‘‘(A) IN GENERAL.—The Secretary shall

24 prescribe regulations for reducing the minimum

25 participation rate otherwise required by this
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1 section for a fiscal year by the number of per2 centage points equal to the number of percent3 age points (if any) by which—

4 ‘‘(i) the number of families receiving

5 assistance during the fiscal year under the

6 State program funded under this part is

7 less than

8 ‘‘(ii) the number of families that re9 ceived aid under the State plan approved

10 under part A (as in effect on September

11 30, 1995) during fiscal year 1995.

12 The minimum participation rate shall not be re13 duced to the extent that the Secretary deter14 mines that the reduction in the number of fami15 lies receiving such assistance is required by

16 Federal law.

17 ‘‘(B) ELIGIBILITY CHANGES NOT COUNT18 ED.—The regulations described in subpara19 graph (A) shall not take into account families

20 that are diverted from a State program funded

21 under this part as a result of differences in eli22 gibility criteria under a State program funded

23 under this part and eligibility criteria under the

24 State program operated under the State plan

25 approved under part A (as such plan and such
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•HR 3507 IH

1 part were in effect on September 30, 1995).

2 Such regulations shall place the burden on the

3 Secretary to prove that such families were di4 verted as a direct result of differences in such

5 eligibility criteria.

6 ‘‘(4) STATE OPTION TO INCLUDE INDIVIDUALS

7 RECEIVING ASSISTANCE UNDER A TRIBAL FAMILY

8 ASSISTANCE PLAN.—For purposes of paragraphs

9 (1)(B) and (2)(B), a State may, at its option, in10 clude families receiving assistance under a tribal

11 family assistance plan approved under section 412.

12 ‘‘(5) STATE OPTION FOR PARTICIPATION RE13 QUIREMENT EXEMPTIONS.—For any fiscal year, a

14 State may, at its option, not require an individual

15 who is a single custodial parent caring for a child

16 who has not attained 12 months of age to engage in

17 work and may disregard such an individual in deter18 mining the participation rates under subsection (a).

19 ‘‘(c) ENGAGED IN WORK.—

20 ‘‘(1) ALL FAMILIES.—For purposes of sub21 section (b)(1)(B)(i), a recipient is engaged in work

22 for a month in a fiscal year if the recipient is par23 ticipating in work activities for at least the minimum

24 average number of hours per week specified in the

25 following table during the month, not fewer than 20
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•HR 3507 IH

1 hours per week of which are attributable to an activ2 ity described in paragraph (1), (2), (3), (4), (5), (6),

3 (7), or (8) of subsection (d):

The minimum

‘‘If the month is average number of

in fiscal year: hours per week is:

1996 ............................................................... 20

1997 ............................................................... 20

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

1999 or thereafter ......................................... 25.

4 ‘‘(2) 2-PARENT FAMILIES.—For purposes of

5 subsection (b)(2)(B)(i), an adult is engaged in work

6 for a month in a fiscal year if the adult is making

7 progress in work activities for at least 35 hours per

8 week during the month, not fewer than 30 hours per

9 week of which are attributable to an activity de10 scribed in paragraph (1), (2), (3), (4), (5), (6), (7),

11 or (8) of subsection (d).

12 ‘‘(3) LIMITATION ON NUMBER OF WEEKS FOR

13 WHICH JOB SEARCH COUNTS AS WORK.—Notwith14 standing paragraphs (1) and (2), an individual shall

15 not be considered to be engaged in work by virtue

16 of participation in an activity described in subsection

17 (d)(6), after the individual has participated in such

18 an activity for 12 weeks in a fiscal year. An individ19 ual shall be considered to be participating in such an

20 activity for a week if the individual participates in

21 such an activity at any time during the week.
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1 ‘‘(4) LIMITATION ON VOCATIONAL EDUCATION

2 ACTIVITIES COUNTED AS WORK.—For purposes of

3 determining monthly participation rates under para4 graphs (1)(B)(i) and (2)(B)(i) of subsection (b), not

5 more than 20 percent of adults in all families and

6 in 2-parent families determined to be engaged in

7 work in the State for a month may meet the work

8 activity requirement through participation in voca9 tional educational training.

10 ‘‘(5) SINGLE PARENT WITH CHILD UNDER AGE

11 6 DEEMED TO BE MEETING WORK PARTICIPATION

12 REQUIREMENTS IF PARENT IS ENGAGED IN WORK

13 FOR 20 HOURS PER WEEK.—For purposes of deter14 mining monthly participation rates under subsection

15 (b)(1)(B)(i), a recipient in a 1-parent family who is

16 the parent of a child who has not attained 6 years

17 of age is deemed to be engaged in work for a month

18 if the recipient is engaged in work for an average of

19 at least 20 hours per week during the month.

20 ‘‘(6) TEEN HEAD OF HOUSEHOLD WHO MAIN21 TAINS SATISFACTORY SCHOOL ATTENDANCE

22 DEEMED TO BE MEETING WORK PARTICIPATION RE23 QUIREMENTS.—For purposes of determining month24 ly participation rates under subsection (b)(1)(B)(i),

25 a recipient who is a single head of household and
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•HR 3507 IH

1 has not attained 20 years of age is deemed to be en2 gaged in work for a month in a fiscal year if the re3 cipient—

4 ‘‘(A) maintains satisfactory attendance at

5 secondary school or the equivalent during the

6 month; or

7 ‘‘(B) participates in education directly re8 lated to employment for at least the minimum

9 average number of hours per week specified in

10 the table set forth in paragraph (1).

11 ‘‘(d) WORK ACTIVITIES DEFINED.—As used in this

12 section, the term ‘work activities’ means—

13 ‘‘(1) unsubsidized employment;

14 ‘‘(2) subsidized private sector employment;

15 ‘‘(3) subsidized public sector employment;

16 ‘‘(4) work experience (including work associated

17 with the refurbishing of publicly assisted housing) if

18 sufficient private sector employment is not available;

19 ‘‘(5) on-the-job training;

20 ‘‘(6) job search and job readiness assistance;

21 ‘‘(7) community service programs;

22 ‘‘(8) vocational educational training (not to ex23 ceed 12 months with respect to any individual);

24 ‘‘(9) job skills training directly related to em25 ployment;
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1 ‘‘(10) education directly related to employment,

2 in the case of a recipient who has not attained 20

3 years of age, and has not received a high school di4 ploma or a certificate of high school equivalency; and

5 ‘‘(11) satisfactory attendance at secondary

6 school, in the case of a recipient who—

7 ‘‘(A) has not completed secondary school;

8 and

9 ‘‘(B) is a dependent child, or a head of

10 household who has not attained 20 years of age.

11 ‘‘(e) PENALTIES AGAINST INDIVIDUALS.—

12 ‘‘(1) IN GENERAL.—Except as provided in para13 graph (2), if an adult in a family receiving assist14 ance under the State program funded under this

15 part refuses to engage in work required in accord16 ance with this section, the State shall—

17 ‘‘(A) reduce the amount of assistance oth18 erwise payable to the family pro rata (or more,

19 at the option of the State) with respect to any

20 period during a month in which the adult so re21 fuses; or

22 ‘‘(B) terminate such assistance,

23 subject to such good cause and other exceptions as

24 the State may establish.
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1 ‘‘(2) EXCEPTION.—Notwithstanding paragraph

2 (1), a State may not reduce or terminate assistance

3 under the State program funded under this part

4 based on a refusal of an adult to work if the adult

5 is a single custodial parent caring for a child who

6 has not attained 6 years of age, and the adult proves

7 that the adult has a demonstrated inability (as de8 termined by the State) to obtain needed child care,

9 for 1 or more of the following reasons:

10 ‘‘(A) Unavailability of appropriate child

11 care within a reasonable distance from the indi12 vidual’s home or work site.

13 ‘‘(B) Unavailability or unsuitability of in14 formal child care by a relative or under other

15 arrangements.

16 ‘‘(C) Unavailability of appropriate and af17 fordable formal child care arrangements.

18 ‘‘(f) NONDISPLACEMENT IN WORK ACTIVITIES.—

19 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

20 an adult in a family receiving assistance under a

21 State program funded under this part attributable to

22 funds provided by the Federal Government may fill

23 a vacant employment position in order to engage in

24 a work activity described in subsection (d).
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1 ‘‘(2) NO FILLING OF CERTAIN VACANCIES.—No

2 adult in a work activity described in subsection (d)

3 which is funded, in whole or in part, by funds pro4 vided by the Federal Government shall be employed

5 or assigned—

6 ‘‘(A) when any other individual is on layoff

7 from the same or any substantially equivalent

8 job; or

9 ‘‘(B) if the employer has terminated the

10 employment of any regular employee or other11 wise caused an involuntary reduction of its

12 workforce in order to fill the vacancy so created

13 with an adult described in paragraph (1).

14 ‘‘(3) NO PREEMPTION.—Nothing in this sub15 section shall preempt or supersede any provision of

16 State or local law that provides greater protection

17 for employees from displacement.

18 ‘‘(g) SENSE OF THE CONGRESS.—It is the sense of

19 the Congress that in complying with this section, each

20 State that operates a program funded under this part is

21 encouraged to assign the highest priority to requiring

22 adults in 2-parent families and adults in single-parent

23 families that include older preschool or school-age children

24 to be engaged in work activities.
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1 ‘‘(h) SENSE OF THE CONGRESS THAT STATES

2 SHOULD IMPOSE CERTAIN REQUIREMENTS ON NON3 CUSTODIAL, NONSUPPORTING MINOR PARENTS.—It is the

4 sense of the Congress that the States should require non5 custodial, nonsupporting parents who have not attained 18

6 years of age to fulfill community work obligations and at7 tend appropriate parenting or money management classes

8 after school.

9 ‘‘SEC. 408. PROHIBITIONS; REQUIREMENTS.

10 ‘‘(a) IN GENERAL.—

11 ‘‘(1) NO ASSISTANCE FOR FAMILIES WITHOUT A

12 MINOR CHILD.—A State to which a grant is made

13 under section 403 shall not use any part of the

14 grant to provide assistance to a family, unless the

15 family includes—

16 ‘‘(A) a minor child who resides with a cus17 todial parent or other adult caretaker relative of

18 the child; or

19 ‘‘(B) a pregnant individual.

20 ‘‘(2) REDUCTION OR ELIMINATION OF ASSIST21 ANCE FOR NONCOOPERATION IN ESTABLISHING PA22 TERNITY OR OBTAINING CHILD SUPPORT.—If the

23 agency responsible for administering the State plan

24 approved under part D determines that an individual

25 is not cooperating with the State in establishing pa-
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1 ternity or in establishing, modifying, or enforcing a

2 support order with respect to a child of the individ3 ual, and the individual does not qualify for any good

4 cause or other exception established by the State

5 pursuant to section 454(29), then the State—

6 ‘‘(A) shall deduct from the assistance that

7 would otherwise be provided to the family of the

8 individual under the State program funded

9 under this part the share of such assistance at10 tributable to the individual; and

11 ‘‘(B) may deny the family any assistance

12 under the State program.

13 ‘‘(3) NO ASSISTANCE FOR FAMILIES NOT AS14 SIGNING CERTAIN SUPPORT RIGHTS TO THE

15 STATE.—

16 ‘‘(A) IN GENERAL.—A State to which a

17 grant is made under section 403 shall require,

18 as a condition of providing assistance to a fam19 ily under the State program funded under this

20 part, that a member of the family assign to the

21 State any rights the family member may have

22 (on behalf of the family member or of any other

23 person for whom the family member has applied

24 for or is receiving such assistance) to support

25 from any other person, not exceeding the total
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1 amount of assistance so provided to the family,

2 which accrue (or have accrued) before the date

3 the family leaves the program, which assign4 ment, on and after the date the family leaves

5 the program, shall not apply with respect to any

6 support (other than support collected pursuant

7 to section 464) which accrued before the family

8 received such assistance and which the State

9 has not collected by—

10 ‘‘(i) September 30, 2000, if the as11 signment is executed on or after October 1,

12 1997, and before October 1, 2000; or

13 ‘‘(ii) the date the family leaves the

14 program, if the assignment is executed on

15 or after October 1, 2000.

16 ‘‘(B) LIMITATION.—A State to which a

17 grant is made under section 403 shall not re18 quire, as a condition of providing assistance to

19 any family under the State program funded

20 under this part, that a member of the family

21 assign to the State any rights to support de22 scribed in subparagraph (A) which accrue after

23 the date the family leaves the program, except

24 to the extent necessary to enable the State to

25 comply with section 457.
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1 ‘‘(4) NO ASSISTANCE FOR TEENAGE PARENTS

2 WHO DO NOT ATTEND HIGH SCHOOL OR OTHER

3 EQUIVALENT TRAINING PROGRAM.—A State to

4 which a grant is made under section 403 shall not

5 use any part of the grant to provide assistance to an

6 individual who has not attained 18 years of age, is

7 not married, has a minor child at least 12 weeks of

8 age in his or her care, and has not successfully com9 pleted a high-school education (or its equivalent), if

10 the individual does not participate in—

11 ‘‘(A) educational activities directed toward

12 the attainment of a high school diploma or its

13 equivalent; or

14 ‘‘(B) an alternative educational or training

15 program that has been approved by the State.

16 ‘‘(5) NO ASSISTANCE FOR TEENAGE PARENTS

17 NOT LIVING IN ADULT-SUPERVISED SETTINGS.—

18 ‘‘(A) IN GENERAL.—

19 ‘‘(i) REQUIREMENT.—Except as pro20 vided in subparagraph (B), a State to

21 which a grant is made under section 403

22 shall not use any part of the grant to pro23 vide assistance to an individual described

24 in clause (ii) of this subparagraph if the

25 individual and the minor child referred to
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1 in clause (ii)(II) do not reside in a place of

2 residence maintained by a parent, legal

3 guardian, or other adult relative of the in4 dividual as such parent’s, guardian’s, or

5 adult relative’s own home.

6 ‘‘(ii) INDIVIDUAL DESCRIBED.—For

7 purposes of clause (i), an individual de8 scribed in this clause is an individual

9 who—

10 ‘‘(I) has not attained 18 years of

11 age; and

12 ‘‘(II) is not married, and has a

13 minor child in his or her care.

14 ‘‘(B) EXCEPTION.—

15 ‘‘(i) PROVISION OF, OR ASSISTANCE IN

16 LOCATING, ADULT-SUPERVISED LIVING AR17 RANGEMENT.—In the case of an individual

18 who is described in clause (ii), the State

19 agency referred to in section 402(a)(4)

20 shall provide, or assist the individual in lo21 cating, a second chance home, maternity

22 home, or other appropriate adult-super23 vised supportive living arrangement, taking

24 into consideration the needs and concerns

25 of the individual, unless the State agency
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1 determines that the individual’s current

2 living arrangement is appropriate, and

3 thereafter shall require that the individual

4 and the minor child referred to in subpara5 graph (A)(ii)(II) reside in such living ar6 rangement as a condition of the continued

7 receipt of assistance under the State pro8 gram funded under this part attributable

9 to funds provided by the Federal Govern10 ment (or in an alternative appropriate ar11 rangement, should circumstances change

12 and the current arrangement cease to be

13 appropriate).

14 ‘‘(ii) INDIVIDUAL DESCRIBED.—For

15 purposes of clause (i), an individual is de16 scribed in this clause if the individual is

17 described in subparagraph (A)(ii), and—

18 ‘‘(I) the individual has no parent,

19 legal guardian or other appropriate

20 adult relative described in subclause

21 (II) of his or her own who is living or

22 whose whereabouts are known;

23 ‘‘(II) no living parent, legal

24 guardian, or other appropriate adult

25 relative, who would otherwise meet
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1 applicable State criteria to act as the

2 individual’s legal guardian, of such in3 dividual allows the individual to live in

4 the home of such parent, guardian, or

5 relative;

6 ‘‘(III) the State agency deter7 mines that—

8 ‘‘(aa) the individual or the

9 minor child referred to in sub10 paragraph (A)(ii)(II) is being or

11 has been subjected to serious

12 physical or emotional harm, sex13 ual abuse, or exploitation in the

14 residence of the individual’s own

15 parent or legal guardian; or

16 ‘‘(bb) substantial evidence

17 exists of an act or failure to act

18 that presents an imminent or se19 rious harm if the individual and

20 the minor child lived in the same

21 residence with the individual’s

22 own parent or legal guardian; or

23 ‘‘(IV) the State agency otherwise

24 determines that it is in the best inter25 est of the minor child to waive the re-
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1 quirement of subparagraph (A) with

2 respect to the individual or the minor

3 child.

4 ‘‘(iii) SECOND-CHANCE HOME.—For

5 purposes of this subparagraph, the term

6 ‘second-chance home’ means an entity that

7 provides individuals described in clause (ii)

8 with a supportive and supervised living ar9 rangement in which such individuals are

10 required to learn parenting skills, including

11 child development, family budgeting, health

12 and nutrition, and other skills to promote

13 their long-term economic independence and

14 the well-being of their children.

15 ‘‘(6) NO MEDICAL SERVICES.—

16 ‘‘(A) IN GENERAL.—Except as provided in

17 subparagraph (B), a State to which a grant is

18 made under section 403 shall not use any part

19 of the grant to provide medical services.

20 ‘‘(B) EXCEPTION FOR FAMILY PLANNING

21 SERVICES.—As used in subparagraph (A), the

22 term ‘medical services’ does not include family

23 planning services.

24 ‘‘(7) NO ASSISTANCE FOR MORE THAN 5

25 YEARS.—
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1 ‘‘(A) IN GENERAL.—Except as provided in

2 subparagraphs (B) and (C), a State to which a

3 grant is made under section 403 shall not use

4 any part of the grant to provide assistance to

5 a family that includes an adult who has re6 ceived assistance under any State program

7 funded under this part attributable to funds

8 provided by the Federal Government, for 60

9 months (whether or not consecutive) after the

10 date the State program funded under this part

11 commences.

12 ‘‘(B) MINOR CHILD EXCEPTION.—In deter13 mining the number of months for which an in14 dividual who is a parent or pregnant has re15 ceived assistance under the State program

16 funded under this part, the State shall dis17 regard any month for which such assistance

18 was provided with respect to the individual and

19 during which the individual was—

20 ‘‘(i) a minor child; and

21 ‘‘(ii) not the head of a household or

22 married to the head of a household.

23 ‘‘(C) HARDSHIP EXCEPTION.—

24 ‘‘(i) IN GENERAL.—The State may ex25 empt a family from the application of sub-
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1 paragraph (A) by reason of hardship or if

2 the family includes an individual who has

3 been battered or subjected to extreme cru4 elty.

5 ‘‘(ii) LIMITATION.—The number of

6 families with respect to which an exemp7 tion made by a State under clause (i) is in

8 effect for a fiscal year shall not exceed 20

9 percent of the average monthly number of

10 families to which assistance is provided

11 under the State program funded under this

12 part.

13 ‘‘(iii) BATTERED OR SUBJECT TO EX14 TREME CRUELTY DEFINED.—For purposes

15 of clause (i), an individual has been bat16 tered or subjected to extreme cruelty if the

17 individual has been subjected to—

18 ‘‘(I) physical acts that resulted

19 in, or threatened to result in, physical

20 injury to the individual;

21 ‘‘(II) sexual abuse;

22 ‘‘(III) sexual activity involving a

23 dependent child;

24 ‘‘(IV) being forced as the care25 taker relative of a dependent child to
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1 engage in nonconsensual sexual acts

2 or activities;

3 ‘‘(V) threats of, or attempts at,

4 physical or sexual abuse;

5 ‘‘(VI) mental abuse; or

6 ‘‘(VII) neglect or deprivation of

7 medical care.

8 ‘‘(D) RULE OF INTERPRETATION.—Sub9 paragraph (A) shall not be interpreted to re10 quire any State to provide assistance to any in11 dividual for any period of time under the State

12 program funded under this part.

13 ‘‘(8) DENIAL OF ASSISTANCE FOR 10 YEARS TO

14 A PERSON FOUND TO HAVE FRAUDULENTLY MIS15 REPRESENTED RESIDENCE IN ORDER TO OBTAIN AS16 SISTANCE IN 2 OR MORE STATES.—A State to which

17 a grant is made under section 403 shall not use any

18 part of the grant to provide cash assistance to an in19 dividual during the 10-year period that begins on

20 the date the individual is convicted in Federal or

21 State court of having made a fraudulent statement

22 or representation with respect to the place of resi23 dence of the individual in order to receive assistance

24 simultaneously from 2 or more States under pro25 grams that are funded under this title, title XV or
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1 XIX, or the Food Stamp Act of 1977, or benefits in

2 2 or more States under the supplemental security in3 come program under title XVI. The preceding sen4 tence shall not apply with respect to a conviction of

5 an individual, for any month beginning after the

6 President of the United States grants a pardon with

7 respect to the conduct which was the subject of the

8 conviction.

9 ‘‘(9) DENIAL OF ASSISTANCE FOR FUGITIVE

10 FELONS AND PROBATION AND PAROLE VIOLA11 TORS.—

12 ‘‘(A) IN GENERAL.—A State to which a

13 grant is made under section 403 shall not use

14 any part of the grant to provide assistance to

15 any individual who is—

16 ‘‘(i) fleeing to avoid prosecution, or

17 custody or confinement after conviction,

18 under the laws of the place from which the

19 individual flees, for a crime, or an attempt

20 to commit a crime, which is a felony under

21 the laws of the place from which the indi22 vidual flees, or which, in the case of the

23 State of New Jersey, is a high mis24 demeanor under the laws of such State; or
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1 ‘‘(ii) violating a condition of probation

2 or parole imposed under Federal or State

3 law.

4 The preceding sentence shall not apply with re5 spect to conduct of an individual, for any month

6 beginning after the President of the United

7 States grants a pardon with respect to the con8 duct.

9 ‘‘(B) EXCHANGE OF INFORMATION WITH

10 LAW ENFORCEMENT AGENCIES.—If a State to

11 which a grant is made under section 403 estab12 lishes safeguards against the use or disclosure

13 of information about applicants or recipients of

14 assistance under the State program funded

15 under this part, the safeguards shall not pre16 vent the State agency administering the pro17 gram from furnishing a Federal, State, or local

18 law enforcement officer, upon the request of the

19 officer, with the current address of any recipi20 ent if the officer furnishes the agency with the

21 name of the recipient and notifies the agency

22 that—

23 ‘‘(i) the recipient—

24 ‘‘(I) is described in subparagraph

25 (A); or
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1 ‘‘(II) has information that is nec2 essary for the officer to conduct the

3 official duties of the officer; and

4 ‘‘(ii) the location or apprehension of

5 the recipient is within such official duties.

6 ‘‘(10) DENIAL OF ASSISTANCE FOR MINOR

7 CHILDREN WHO ARE ABSENT FROM THE HOME FOR

8 A SIGNIFICANT PERIOD.—

9 ‘‘(A) IN GENERAL.—A State to which a

10 grant is made under section 403 shall not use

11 any part of the grant to provide assistance for

12 a minor child who has been, or is expected by

13 a parent (or other caretaker relative) of the

14 child to be, absent from the home for a period

15 of 45 consecutive days or, at the option of the

16 State, such period of not less than 30 and not

17 more than 180 consecutive days as the State

18 may provide for in the State plan submitted

19 pursuant to section 402.

20 ‘‘(B) STATE AUTHORITY TO ESTABLISH

21 GOOD CAUSE EXCEPTIONS.—The State may es22 tablish such good cause exceptions to subpara23 graph (A) as the State considers appropriate if

24 such exceptions are provided for in the State

25 plan submitted pursuant to section 402.
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1 ‘‘(C) DENIAL OF ASSISTANCE FOR REL2 ATIVE WHO FAILS TO NOTIFY STATE AGENCY

3 OF ABSENCE OF CHILD.—A State to which a

4 grant is made under section 403 shall not use

5 any part of the grant to provide assistance for

6 an individual who is a parent (or other care7 taker relative) of a minor child and who fails to

8 notify the agency administering the State pro9 gram funded under this part of the absence of

10 the minor child from the home for the period

11 specified in or provided for pursuant to sub12 paragraph (A), by the end of the 5-day period

13 that begins with the date that it becomes clear

14 to the parent (or relative) that the minor child

15 will be absent for such period so specified or

16 provided for.

17 ‘‘(11) INCOME SECURITY PAYMENTS NOT TO BE

18 DISREGARDED IN DETERMINING THE AMOUNT OF

19 ASSISTANCE TO BE PROVIDED TO A FAMILY.—If a

20 State to which a grant is made under section 403

21 uses any part of the grant to provide assistance for

22 any individual who is receiving benefits, or on behalf

23 of whom benefits are paid, under a State plan for

24 old-age assistance approved under section 2, under

25 section 202, 205(j)(1), 223, or 228, under a State
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1 program funded under part E that provides cash

2 payments for foster care, or under the supplemental

3 security income program under title XVI, then the

4 State shall not disregard the payment in determin5 ing the amount of assistance to be provided under

6 the State program funded under this part, from

7 funds provided by the Federal Government, to the

8 family of which the individual is a member.

9 ‘‘(b) ALIENS.—For special rules relating to the treat10 ment of aliens, see section 402 of the Personal Respon11 sibility and Work Opportunity Act of 1996.

12 ‘‘SEC. 409. PENALTIES.

13 ‘‘(a) IN GENERAL.—Subject to this section:

14 ‘‘(1) USE OF GRANT IN VIOLATION OF THIS

15 PART.—

16 ‘‘(A) GENERAL PENALTY.—If an audit

17 conducted under chapter 75 of title 31, United

18 States Code, finds that an amount paid to a

19 State under section 403 for a fiscal year has

20 been used in violation of this part, the Sec21 retary shall reduce the grant payable to the

22 State under section 403(a)(1) for the imme23 diately succeeding fiscal year quarter by the

24 amount so used.
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1 ‘‘(B) ENHANCED PENALTY FOR INTEN2 TIONAL VIOLATIONS.—If the State does not

3 prove to the satisfaction of the Secretary that

4 the State did not intend to use the amount in

5 violation of this part, the Secretary shall fur6 ther reduce the grant payable to the State

7 under section 403(a)(1) for the immediately

8 succeeding fiscal year quarter by an amount

9 equal to 5 percent of the State family assist10 ance grant.

11 ‘‘(2) FAILURE TO SUBMIT REQUIRED RE12 PORT.—

13 ‘‘(A) IN GENERAL.—If the Secretary deter14 mines that a State has not, within 1 month

15 after the end of a fiscal quarter, submitted the

16 report required by section 411(a) for the quar17 ter, the Secretary shall reduce the grant pay18 able to the State under section 403(a)(1) for

19 the immediately succeeding fiscal year by an

20 amount equal to 4 percent of the State family

21 assistance grant.

22 ‘‘(B) RESCISSION OF PENALTY.—The Sec23 retary shall rescind a penalty imposed on a

24 State under subparagraph (A) with respect to a

25 report if the State submits the report before the
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1 end of the fiscal quarter that immediately suc2 ceeds the fiscal quarter for which the report

3 was required.

4 ‘‘(3) FAILURE TO SATISFY MINIMUM PARTICIPA5 TION RATES.—

6 ‘‘(A) IN GENERAL.—If the Secretary deter7 mines that a State to which a grant is made

8 under section 403 for a fiscal year has failed to

9 comply with section 407(a) for the fiscal year,

10 the Secretary shall reduce the grant payable to

11 the State under section 403(a)(1) for the imme12 diately succeeding fiscal year by an amount

13 equal to not more than 5 percent of the State

14 family assistance grant.

15 ‘‘(B) PENALTY BASED ON SEVERITY OF

16 FAILURE.—The Secretary shall impose reduc17 tions under subparagraph (A) based on the de18 gree of noncompliance.

19 ‘‘(4) FAILURE TO PARTICIPATE IN THE INCOME

20 AND ELIGIBILITY VERIFICATION SYSTEM.—If the

21 Secretary determines that a State program funded

22 under this part is not participating during a fiscal

23 year in the income and eligibility verification system

24 required by section 1137, the Secretary shall reduce

25 the grant payable to the State under section
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1 403(a)(1) for the immediately succeeding fiscal year

2 by an amount equal to not more than 2 percent of

3 the State family assistance grant.

4 ‘‘(5) FAILURE TO COMPLY WITH PATERNITY ES5 TABLISHMENT AND CHILD SUPPORT ENFORCEMENT

6 REQUIREMENTS UNDER PART D.—Notwithstanding

7 any other provision of this Act, if the Secretary de8 termines that the State agency that administers a

9 program funded under this part does not enforce the

10 penalties requested by the agency administering part

11 D against recipients of assistance under the State

12 program who fail to cooperate in establishing pater13 nity or in establishing, modifying, or enforcing a

14 child support order in accordance with such part,

15 the Secretary shall reduce the grant payable to the

16 State under section 403(a)(1) for the immediately

17 succeeding fiscal year (without regard to this sec18 tion) by not more than 5 percent.

19 ‘‘(6) FAILURE TO TIMELY REPAY A FEDERAL

20 LOAN FUND FOR STATE WELFARE PROGRAMS.—If

21 the Secretary determines that a State has failed to

22 repay any amount borrowed from the Federal Loan

23 Fund for State Welfare Programs established under

24 section 406 within the period of maturity applicable

25 to the loan, plus any interest owed on the loan, the
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1 Secretary shall reduce the grant payable to the State

2 under section 403(a)(1) for the immediately succeed3 ing fiscal year quarter (without regard to this sec4 tion) by the outstanding loan amount, plus the inter5 est owed on the outstanding amount. The Secretary

6 shall not forgive any outstanding loan amount or in7 terest owed on the outstanding amount.

8 ‘‘(7) FAILURE OF ANY STATE TO MAINTAIN

9 CERTAIN LEVEL OF HISTORIC EFFORT.—

10 ‘‘(A) IN GENERAL.—The Secretary shall

11 reduce the grant payable to the State under

12 section 403(a)(1) for fiscal year 1998, 1999,

13 2000, 2001, or 2002 by the amount (if any) by

14 which qualified State expenditures for the then

15 immediately preceding fiscal year are less than

16 the applicable percentage of historic State ex17 penditures with respect to such preceding fiscal

18 year.

19 ‘‘(B) DEFINITIONS.—As used in this para20 graph:

21 ‘‘(i) QUALIFIED STATE EXPENDI22 TURES.—

23 ‘‘(I) IN GENERAL.—The term

24 ‘qualified State expenditures’ means,

25 with respect to a State and a fiscal
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1 year, the total expenditures by the

2 State during the fiscal year, under all

3 State programs, for any of the follow4 ing with respect to eligible families:

5 ‘‘(aa) Cash assistance.

6 ‘‘(bb) Child care assistance.

7 ‘‘(cc) Educational activities

8 designed to increase self-suffi9 ciency, job training, and work.

10 ‘‘(dd) Administrative costs.

11 ‘‘(ee) Any other use of funds

12 allowable under section

13 404(a)(1).

14 ‘‘(II) EXCLUSION OF TRANSFERS

15 FROM OTHER STATE AND LOCAL PRO16 GRAMS.—Such term does not include

17 funding supplanted by transfers from

18 other State and local programs.

19 ‘‘(III) ELIGIBLE FAMILIES.—As

20 used in subclause (I), the term ‘eligi21 ble families’ means families eligible

22 for assistance under the State pro23 gram funded under this part, and

24 families that would be eligible for such

25 assistance but for the application of
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1 section 408(a)(7) of this Act or sec2 tion 402 of the Personal Responsibil3 ity and Work Opportunity Act of

4 1996.

5 ‘‘(ii) APPLICABLE PERCENTAGE.—The

6 term ‘applicable percentage’ means for fis7 cal years 1997 through 2001, 75 percent

8 reduced (if appropriate) in accordance with

9 subparagraph (C)(ii).

10 ‘‘(iii) HISTORIC STATE EXPENDI11 TURES.—The term ‘historic State expendi12 tures’ means, with respect to a State, the

13 lesser of—

14 ‘‘(I) the expenditures by the

15 State under parts A and F (as in ef16 fect during fiscal year 1994) for fiscal

17 year 1994; or

18 ‘‘(II) the amount which bears the

19 same ratio to the amount described in

20 subclause (I) as—

21 ‘‘(aa) the State family as22 sistance grant, plus the total

23 amount required to be paid to

24 the State under former section

25 403 for fiscal year 1994 with re-
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1 spect to amounts expended by

2 the State for child care under

3 subsection (g) or (i) of section

4 402 (as in effect during fiscal

5 year 1994); bears to

6 ‘‘(bb) the total amount re7 quired to be paid to the State

8 under former section 403 (as in

9 effect during fiscal year 1994)

10 for fiscal year 1994.

11 Such term does not include any expendi12 tures under the State plan approved under

13 part A (as so in effect) on behalf of indi14 viduals covered by a tribal family assist15 ance plan approved under section 412, as

16 determined by the Secretary.

17 ‘‘(iv) EXPENDITURES BY THE

18 STATE.—The term ‘expenditures by the

19 State’ does not include—

20 ‘‘(I) any expenditures from

21 amounts made available by the Fed22 eral Government;

23 ‘‘(II) State funds expended for

24 the medicaid program under title XV

25 or XIX; or
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1 ‘‘(III) any State funds which are

2 used to match Federal funds or are

3 expended as a condition of receiving

4 Federal funds under Federal pro5 grams other than under this part.

6 ‘‘(C) APPLICABLE PERCENTAGE REDUCED

7 FOR HIGH PERFORMANCE STATES.—

8 ‘‘(i) DETERMINATION OF HIGH PER9 FORMANCE STATES.—The Secretary shall

10 use the formula developed under section

11 403(a)(4)(C) to assign a score to each eli12 gible State that represents the perform13 ance of the State program funded under

14 this part for each fiscal year, and shall

15 prescribe a performance threshold which

16 the Secretary shall use to determine

17 whether to reduce the applicable percent18 age with respect to any eligible State for a

19 fiscal year.

20 ‘‘(ii) REDUCTION PROPORTIONAL TO

21 PERFORMANCE.—The Secretary shall re22 duce the applicable percentage for a fiscal

23 year with respect to each eligible State by

24 an amount which is directly proportional to

25 the amount (if any) by which the score as-
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1 signed to the State under clause (i) for the

2 immediately preceding fiscal year exceeds

3 the performance threshold prescribed

4 under clause (i) for such preceding fiscal

5 year, subject to clause (iii).

6 ‘‘(iii) LIMITATION ON REDUCTION.—

7 The applicable percentage for a fiscal year

8 with respect to a State may not be reduced

9 by more than 8 percentage points under

10 this subparagraph.

11 ‘‘(8) SUBSTANTIAL NONCOMPLIANCE OF STATE

12 CHILD SUPPORT ENFORCEMENT PROGRAM WITH RE13 QUIREMENTS OF PART D.—

14 ‘‘(A) IN GENERAL.—If a State program

15 operated under part D is found as a result of

16 a review conducted under section 452(a)(4) not

17 to have complied substantially with the require18 ments of such part for any quarter, and the

19 Secretary determines that the program is not

20 complying substantially with such requirements

21 at the time the finding is made, the Secretary

22 shall reduce the grant payable to the State

23 under section 403(a)(1) for the quarter and

24 each subsequent quarter that ends before the

25 1st quarter throughout which the program is
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1 found to be in substantial compliance with such

2 requirements by—

3 ‘‘(i) not less than 1 nor more than 2

4 percent;

5 ‘‘(ii) not less than 2 nor more than 3

6 percent, if the finding is the 2nd consecu7 tive such finding made as a result of such

8 a review; or

9 ‘‘(iii) not less than 3 nor more than 5

10 percent, if the finding is the 3rd or a sub11 sequent consecutive such finding made as a

12 result of such a review.

13 ‘‘(B) DISREGARD OF NONCOMPLIANCE

14 WHICH IS OF A TECHNICAL NATURE.—For pur15 poses of subparagraph (A) and section

16 452(a)(4), a State which is not in full compli17 ance with the requirements of this part shall be

18 determined to be in substantial compliance with

19 such requirements only if the Secretary deter20 mines that any noncompliance with such re21 quirements is of a technical nature which does

22 not adversely affect the performance of the

23 State’s program operated under part D.

24 ‘‘(9) FAILURE OF STATE RECEIVING AMOUNTS

25 FROM CONTINGENCY FUND TO MAINTAIN 100 PER-
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1 CENT OF HISTORIC EFFORT.—If, at the end of any

2 fiscal year during which amounts from the Contin3 gency Fund for State Welfare Programs have been

4 paid to a State, the Secretary finds that the expendi5 tures under the State program funded under this

6 part for the fiscal year are less than 100 percent of

7 historic State expenditures (as defined in paragraph

8 (7)(B)(iii) of this subsection), the Secretary shall re9 duce the grant payable to the State under section

10 403(a)(1) for the immediately succeeding fiscal year

11 by the total of the amounts so paid to the State.

12 ‘‘(10) FAILURE TO EXPEND ADDITIONAL STATE

13 FUNDS TO REPLACE GRANT REDUCTIONS.—If the

14 grant payable to a State under section 403(a)(1) for

15 a fiscal year is reduced by reason of this subsection,

16 the State shall, during the immediately succeeding

17 fiscal year, expend under the State program funded

18 under this part an amount equal to the total amount

19 of such reductions.

20 ‘‘(b) REASONABLE CAUSE EXCEPTION.—

21 ‘‘(1) IN GENERAL.—The Secretary may not im22 pose a penalty on a State under subsection (a) with

23 respect to a requirement if the Secretary determines

24 that the State has reasonable cause for failing to

25 comply with the requirement.
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1 ‘‘(2) EXCEPTION.—Paragraph (1) of this sub2 section shall not apply to any penalty under para3 graph (6) or (7) of subsection (a).

4 ‘‘(c) CORRECTIVE COMPLIANCE PLAN.—

5 ‘‘(1) IN GENERAL.—

6 ‘‘(A) NOTIFICATION OF VIOLATION.—Be7 fore imposing a penalty against a State under

8 subsection (a) with respect to a violation of this

9 part, the Secretary shall notify the State of the

10 violation and allow the State the opportunity to

11 enter into a corrective compliance plan in ac12 cordance with this subsection which outlines

13 how the State will correct the violation and how

14 the State will insure continuing compliance with

15 this part.

16 ‘‘(B) 60-DAY PERIOD TO PROPOSE A COR17 RECTIVE COMPLIANCE PLAN.—During the 60-

18 day period that begins on the date the State re19 ceives a notice provided under subparagraph

20 (A) with respect to a violation, the State may

21 submit to the Federal Government a corrective

22 compliance plan to correct the violation.

23 ‘‘(C) CONSULTATION ABOUT MODIFICA24 TIONS.—During the 60-day period that begins

25 with the date the Secretary receives a corrective
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1 compliance plan submitted by a State in accord2 ance with subparagraph (B), the Secretary may

3 consult with the State on modifications to the

4 plan.

5 ‘‘(D) ACCEPTANCE OF PLAN.—A corrective

6 compliance plan submitted by a State in accord7 ance with subparagraph (B) is deemed to be ac8 cepted by the Secretary if the Secretary does

9 not accept or reject the plan during 60-day pe10 riod that begins on the date the plan is submit11 ted.

12 ‘‘(2) EFFECT OF CORRECTING VIOLATION.—

13 The Secretary may not impose any penalty under

14 subsection (a) with respect to any violation covered

15 by a State corrective compliance plan accepted by

16 the Secretary if the State corrects the violation pur17 suant to the plan.

18 ‘‘(3) EFFECT OF FAILING TO CORRECT VIOLA19 TION.—The Secretary shall assess some or all of a

20 penalty imposed on a State under subsection (a)

21 with respect to a violation if the State does not, in

22 a timely manner, correct the violation pursuant to a

23 State corrective compliance plan accepted by the

24 Secretary.
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1 ‘‘(4) INAPPLICABILITY TO FAILURE TO TIMELY

2 REPAY A FEDERAL LOAN FUND FOR A STATE WEL3 FARE PROGRAM.—This subsection shall not apply to

4 the imposition of a penalty against a State under

5 subsection (a)(6).

6 ‘‘(d) LIMITATION ON AMOUNT OF PENALTY.—

7 ‘‘(1) IN GENERAL.—In imposing the penalties

8 described in subsection (a), the Secretary shall not

9 reduce any quarterly payment to a State by more

10 than 25 percent.

11 ‘‘(2) CARRYFORWARD OF UNRECOVERED PEN12 ALTIES.—To the extent that paragraph (1) of this

13 subsection prevents the Secretary from recovering

14 during a fiscal year the full amount of penalties im15 posed on a State under subsection (a) of this section

16 for a prior fiscal year, the Secretary shall apply any

17 remaining amount of such penalties to the grant

18 payable to the State under section 403(a)(1) for the

19 immediately succeeding fiscal year.

20 ‘‘SEC. 410. APPEAL OF ADVERSE DECISION.

21 ‘‘(a) IN GENERAL.—Within 5 days after the date the

22 Secretary takes any adverse action under this part with

23 respect to a State, the Secretary shall notify the chief ex24 ecutive officer of the State of the adverse action, including

25 any action with respect to the State plan submitted under
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1 section 402 or the imposition of a penalty under section

2 409.

3 ‘‘(b) ADMINISTRATIVE REVIEW.—

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

5 date a State receives notice under subsection (a) of

6 an adverse action, the State may appeal the action,

7 in whole or in part, to the Departmental Appeals

8 Board established in the Department of Health and

9 Human Services (in this section referred to as the

10 ‘Board’) by filing an appeal with the Board.

11 ‘‘(2) PROCEDURAL RULES.—The Board shall

12 consider an appeal filed by a State under paragraph

13 (1) on the basis of such documentation as the State

14 may submit and as the Board may require to sup15 port the final decision of the Board. In deciding

16 whether to uphold an adverse action or any portion

17 of such an action, the Board shall conduct a thor18 ough review of the issues and take into account all

19 relevant evidence. The Board shall make a final de20 termination with respect to an appeal filed under

21 paragraph (1) not less than 60 days after the date

22 the appeal is filed.

23 ‘‘(c) JUDICIAL REVIEW OF ADVERSE DECISION.—

24 ‘‘(1) IN GENERAL.—Within 90 days after the

25 date of a final decision by the Board under this sec-
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1 tion with respect to an adverse action taken against

2 a State, the State may obtain judicial review of the

3 final decision (and the findings incorporated into the

4 final decision) by filing an action in—

5 ‘‘(A) the district court of the United States

6 for the judicial district in which the principal or

7 headquarters office of the State agency is lo8 cated; or

9 ‘‘(B) the United States District Court for

10 the District of Columbia.

11 ‘‘(2) PROCEDURAL RULES.—The district court

12 in which an action is filed under paragraph (1) shall

13 review the final decision of the Board on the record

14 established in the administrative proceeding, in ac15 cordance with the standards of review prescribed by

16 subparagraphs (A) through (E) of section 706(2) of

17 title 5, United States Code. The review shall be on

18 the basis of the documents and supporting data sub19 mitted to the Board.

20 ‘‘SEC. 411. DATA COLLECTION AND REPORTING.

21 ‘‘(a) QUARTERLY REPORTS BY STATES.—

22 ‘‘(1) GENERAL REPORTING REQUIREMENT.—

23 ‘‘(A) CONTENTS OF REPORT.—Each eligi24 ble State shall collect on a monthly basis, and

25 report to the Secretary on a quarterly basis, the
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1 following disaggregated case record information

2 on the families receiving assistance under the

3 State program funded under this part:

4 ‘‘(i) The county of residence of the

5 family.

6 ‘‘(ii) Whether a child receiving such

7 assistance or an adult in the family is dis8 abled.

9 ‘‘(iii) The ages of the members of

10 such families.

11 ‘‘(iv) The number of individuals in the

12 family, and the relation of each family

13 member to the youngest child in the fam14 ily.

15 ‘‘(v) The employment status and earn16 ings of the employed adult in the family.

17 ‘‘(vi) The marital status of the adults

18 in the family, including whether such

19 adults have never married, are widowed, or

20 are divorced.

21 ‘‘(vii) The race and educational status

22 of each adult in the family.

23 ‘‘(viii) The race and educational sta24 tus of each child in the family.
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1 ‘‘(ix) Whether the family received sub2 sidized housing, medical assistance under

3 the State plan under title XV or the State

4 plan approved under title XIX, food

5 stamps, or subsidized child care, and if the

6 latter 2, the amount received.

7 ‘‘(x) The number of months that the

8 family has received each type of assistance

9 under the program.

10 ‘‘(xi) If the adults participated in, and

11 the number of hours per week of participa12 tion in, the following activities:

13 ‘‘(I) Education.

14 ‘‘(II) Subsidized private sector

15 employment.

16 ‘‘(III) Unsubsidized employment.

17 ‘‘(IV) Public sector employment,

18 work experience, or community serv19 ice.

20 ‘‘(V) Job search.

21 ‘‘(VI) Job skills training or on22 the-job training.

23 ‘‘(VII) Vocational education.
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1 ‘‘(xii) Information necessary to cal2 culate participation rates under section

3 407.

4 ‘‘(xiii) The type and amount of assist5 ance received under the program, including

6 the amount of and reason for any reduc7 tion of assistance (including sanctions).

8 ‘‘(xiv) Any amount of unearned in9 come received by any member of the fam10 ily.

11 ‘‘(xv) The citizenship of the members

12 of the family.

13 ‘‘(xvi) From a sample of closed cases,

14 whether the family left the program, and if

15 so, whether the family left due to—

16 ‘‘(I) employment;

17 ‘‘(II) marriage;

18 ‘‘(III) the prohibition set forth in

19 section 408(a)(7);

20 ‘‘(IV) sanction; or

21 ‘‘(V) State policy.

22 ‘‘(B) USE OF ESTIMATES.—

23 ‘‘(i) AUTHORITY.—A State may com24 ply with subparagraph (A) by submitting

25 an estimate which is obtained through the
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1 use of scientifically acceptable sampling

2 methods approved by the Secretary.

3 ‘‘(ii) SAMPLING AND OTHER METH4 ODS.—The Secretary shall provide the

5 States with such case sampling plans and

6 data collection procedures as the Secretary

7 deems necessary to produce statistically

8 valid estimates of the performance of State

9 programs funded under this part. The Sec10 retary may develop and implement proce11 dures for verifying the quality of data sub12 mitted by the States.

13 ‘‘(2) REPORT ON USE OF FEDERAL FUNDS TO

14 COVER ADMINISTRATIVE COSTS AND OVERHEAD.—

15 The report required by paragraph (1) for a fiscal

16 quarter shall include a statement of the percentage

17 of the funds paid to the State under this part for

18 the quarter that are used to cover administrative

19 costs or overhead.

20 ‘‘(3) REPORT ON STATE EXPENDITURES ON

21 PROGRAMS FOR NEEDY FAMILIES.—The report re22 quired by paragraph (1) for a fiscal quarter shall in23 clude a statement of the total amount expended by

24 the State during the quarter on programs for needy

25 families.
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1 ‘‘(4) REPORT ON NONCUSTODIAL PARENTS PAR2 TICIPATING IN WORK ACTIVITIES.—The report re3 quired by paragraph (1) for a fiscal quarter shall in4 clude the number of noncustodial parents in the

5 State who participated in work activities (as defined

6 in section 407(d)) during the quarter.

7 ‘‘(5) REPORT ON TRANSITIONAL SERVICES.—

8 The report required by paragraph (1) for a fiscal

9 quarter shall include the total amount expended by

10 the State during the quarter to provide transitional

11 services to a family that has ceased to receive assist12 ance under this part because of employment, along

13 with a description of such services.

14 ‘‘(6) REPORT ON THOSE WHO HAVE LEFT THE

15 PROGRAM BECAUSE OF EMPLOYMENT.—The report

16 required by paragraph (1) for a fiscal quarter shall

17 include such information as the Secretary may re18 quire to enable the Secretary to verify that those

19 who have become ineligible to receive assistance

20 under the State program because of employment

21 have not received cash assistance under the program

22 in the fiscal year in which the quarter occurs.

23 ‘‘(7) REGULATIONS.—The Secretary shall pre24 scribe such regulations as may be necessary to de-
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1 fine the data elements with respect to which reports

2 are required by this subsection.

3 ‘‘(b) ANNUAL REPORTS TO THE CONGRESS BY THE

4 SECRETARY.—Not later than 6 months after the end of

5 fiscal year 1997, and each fiscal year thereafter, the Sec6 retary shall transmit to the Congress a report describ7 ing—

8 ‘‘(1) whether the States are meeting—

9 ‘‘(A) the participation rates described in

10 section 407(a); and

11 ‘‘(B) the objectives of—

12 ‘‘(i) increasing employment and earn13 ings of needy families, and child support

14 collections; and

15 ‘‘(ii) decreasing out-of-wedlock preg16 nancies and child poverty;

17 ‘‘(2) the demographic and financial characteris18 tics of families applying for assistance, families re19 ceiving assistance, and families that become ineli20 gible to receive assistance;

21 ‘‘(3) the characteristics of each State program

22 funded under this part; and

23 ‘‘(4) the trends in employment and earnings of

24 needy families with minor children living at home.
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1 ‘‘SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY IN2 DIAN TRIBES.

3 ‘‘(a) GRANTS FOR INDIAN TRIBES.—

4 ‘‘(1) TRIBAL FAMILY ASSISTANCE GRANT.—

5 ‘‘(A) IN GENERAL.—For each of fiscal

6 years 1997, 1998, 1999, and 2000, the Sec7 retary shall pay to each Indian tribe that has

8 an approved tribal family assistance plan a trib9 al family assistance grant for the fiscal year in

10 an amount equal to the amount determined

11 under subparagraph (B), and shall reduce the

12 grant payable under section 403(a)(1) to any

13 State in which lies the service area or areas of

14 the Indian tribe by that portion of the amount

15 so determined that is attributable to expendi16 tures by the State.

17 ‘‘(B) AMOUNT DETERMINED.—

18 ‘‘(i) IN GENERAL.—The amount de19 termined under this subparagraph is an

20 amount equal to the total amount of the

21 Federal payments to a State or States

22 under section 403 (as in effect during such

23 fiscal year) for fiscal year 1994 attrib24 utable to expenditures (other than child

25 care expenditures) by the State or States

26 under parts A and F (as so in effect) for
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1 fiscal year 1994 for Indian families resid2 ing in the service area or areas identified

3 by the Indian tribe pursuant to subsection

4 (b)(1)(C) of this section.

5 ‘‘(ii) USE OF STATE SUBMITTED

6 DATA.—

7 ‘‘(I) IN GENERAL.—The Sec8 retary shall use State submitted data

9 to make each determination under

10 clause (i).

11 ‘‘(II) DISAGREEMENT WITH DE12 TERMINATION.—If an Indian tribe or

13 tribal organization disagrees with

14 State submitted data described under

15 subclause (I), the Indian tribe or trib16 al organization may submit to the

17 Secretary such additional information

18 as may be relevant to making the de19 termination under clause (i) and the

20 Secretary may consider such informa21 tion before making such determina22 tion.

23 ‘‘(2) GRANTS FOR INDIAN TRIBES THAT RE24 CEIVED JOBS FUNDS.—
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1 ‘‘(A) IN GENERAL.—The Secretary shall

2 pay to each eligible Indian tribe for each of fis3 cal years 1996, 1997, 1998, 1999, and 2000 a

4 grant in an amount equal to the amount re5 ceived by the Indian tribe in fiscal year 1994

6 under section 482(i) (as in effect during fiscal

7 year 1994).

8 ‘‘(B) ELIGIBLE INDIAN TRIBE.—For pur9 poses of subparagraph (A), the term ‘eligible

10 Indian tribe’ means an Indian tribe or Alaska

11 Native organization that conducted a job oppor12 tunities and basic skills training program in fis13 cal year 1995 under section 482(i) (as in effect

14 during fiscal year 1995).

15 ‘‘(C) USE OF GRANT.—Each Indian tribe

16 to which a grant is made under this paragraph

17 shall use the grant for the purpose of operating

18 a program to make work activities available to

19 members of the Indian tribe.

20 ‘‘(D) APPROPRIATION.—Out of any money

21 in the Treasury of the United States not other22 wise appropriated, there are appropriated

23 $7,638,474 for each fiscal year specified in sub24 paragraph (A) for grants under subparagraph

25 (A).
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1 ‘‘(b) 3-YEAR TRIBAL FAMILY ASSISTANCE PLAN.—

2 ‘‘(1) IN GENERAL.—Any Indian tribe that de3 sires to receive a tribal family assistance grant shall

4 submit to the Secretary a 3-year tribal family assist5 ance plan that—

6 ‘‘(A) outlines the Indian tribe’s approach

7 to providing welfare-related services for the 3-

8 year period, consistent with this section;

9 ‘‘(B) specifies whether the welfare-related

10 services provided under the plan will be pro11 vided by the Indian tribe or through agree12 ments, contracts, or compacts with intertribal

13 consortia, States, or other entities;

14 ‘‘(C) identifies the population and service

15 area or areas to be served by such plan;

16 ‘‘(D) provides that a family receiving as17 sistance under the plan may not receive duplica18 tive assistance from other State or tribal pro19 grams funded under this part;

20 ‘‘(E) identifies the employment opportuni21 ties in or near the service area or areas of the

22 Indian tribe and the manner in which the In23 dian tribe will cooperate and participate in en24 hancing such opportunities for recipients of as-
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1 sistance under the plan consistent with any ap2 plicable State standards; and

3 ‘‘(F) applies the fiscal accountability provi4 sions of section 5(f)(1) of the Indian Self-De5 termination and Education Assistance Act (25

6 U.S.C. 450c(f)(1)), relating to the submission

7 of a single-agency audit report required by

8 chapter 75 of title 31, United States Code.

9 ‘‘(2) APPROVAL.—The Secretary shall approve

10 each tribal family assistance plan submitted in ac11 cordance with paragraph (1).

12 ‘‘(3) CONSORTIUM OF TRIBES.—Nothing in this

13 section shall preclude the development and submis14 sion of a single tribal family assistance plan by the

15 participating Indian tribes of an intertribal consor16 tium.

17 ‘‘(c) MINIMUM WORK PARTICIPATION REQUIRE18 MENTS AND TIME LIMITS.—The Secretary, with the par19 ticipation of Indian tribes, shall establish for each Indian

20 tribe receiving a grant under this section minimum work

21 participation requirements, appropriate time limits for re22 ceipt of welfare-related services under the grant, and pen23 alties against individuals—

24 ‘‘(1) consistent with the purposes of this sec25 tion;
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1 ‘‘(2) consistent with the economic conditions

2 and resources available to each tribe; and

3 ‘‘(3) similar to comparable provisions in section

4 407(d).

5 ‘‘(d) EMERGENCY ASSISTANCE.—Nothing in this sec6 tion shall preclude an Indian tribe from seeking emergency

7 assistance from any Federal loan program or emergency

8 fund.

9 ‘‘(e) ACCOUNTABILITY.—Nothing in this section shall

10 be construed to limit the ability of the Secretary to main11 tain program funding accountability consistent with—

12 ‘‘(1) generally accepted accounting principles;

13 and

14 ‘‘(2) the requirements of the Indian Self-Deter15 mination and Education Assistance Act (25 U.S.C.

16 450 et seq.).

17 ‘‘(f) PENALTIES.—

18 ‘‘(1) Subsections (a)(1), (a)(6), and (b) of sec19 tion 409, shall apply to an Indian tribe with an ap20 proved tribal assistance plan in the same manner as

21 such subsections apply to a State.

22 ‘‘(2) Section 409(a)(3) shall apply to an Indian

23 tribe with an approved tribal assistance plan by sub24 stituting ‘meet minimum work participation require-
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1 ments established under section 412(c)’ for ‘comply

2 with section 407(a)’.

3 ‘‘(g) DATA COLLECTION AND REPORTING.—Section

4 411 shall apply to an Indian tribe with an approved tribal

5 family assistance plan.

6 ‘‘(h) SPECIAL RULE FOR INDIAN TRIBES IN ALAS7 KA.—

8 ‘‘(1) IN GENERAL.—Notwithstanding any other

9 provision of this section, and except as provided in

10 paragraph (2), an Indian tribe in the State of Alas11 ka that receives a tribal family assistance grant

12 under this section shall use the grant to operate a

13 program in accordance with requirements com14 parable to the requirements applicable to the pro15 gram of the State of Alaska funded under this part.

16 Comparability of programs shall be established on

17 the basis of program criteria developed by the Sec18 retary in consultation with the State of Alaska and

19 such Indian tribes.

20 ‘‘(2) WAIVER.—An Indian tribe described in

21 paragraph (1) may apply to the appropriate State

22 authority to receive a waiver of the requirement of

23 paragraph (1).
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1 ‘‘SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUD2 IES.

3 ‘‘(a) RESEARCH.—The Secretary shall conduct re4 search on the benefits, effects, and costs of operating dif5 ferent State programs funded under this part, including

6 time limits relating to eligibility for assistance. The re7 search shall include studies on the effects of different pro8 grams and the operation of such programs on welfare de9 pendency, illegitimacy, teen pregnancy, employment rates,

10 child well-being, and any other area the Secretary deems

11 appropriate. The Secretary shall also conduct research on

12 the costs and benefits of State activities under section

13 409.

14 ‘‘(b) DEVELOPMENT AND EVALUATION OF INNOVA15 TIVE APPROACHES TO REDUCING WELFARE DEPEND16 ENCY AND INCREASING CHILD WELL-BEING.—

17 ‘‘(1) IN GENERAL.—The Secretary may assist

18 States in developing, and shall evaluate, innovative

19 approaches for reducing welfare dependency and in20 creasing the well-being of minor children living at

21 home with respect to recipients of assistance under

22 programs funded under this part. The Secretary

23 may provide funds for training and technical assist24 ance to carry out the approaches developed pursuant

25 to this paragraph.
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1 ‘‘(2) EVALUATIONS.—In performing the evalua2 tions under paragraph (1), the Secretary shall, to

3 the maximum extent feasible, use random assign4 ment as an evaluation methodology.

5 ‘‘(c) DISSEMINATION OF INFORMATION.—The Sec6 retary shall develop innovative methods of disseminating

7 information on any research, evaluations, and studies con8 ducted under this section, including the facilitation of the

9 sharing of information and best practices among States

10 and localities through the use of computers and other

11 technologies.

12 ‘‘(d) ANNUAL RANKING OF STATES AND REVIEW OF

13 MOST AND LEAST SUCCESSFUL WORK PROGRAMS.—

14 ‘‘(1) ANNUAL RANKING OF STATES.—The Sec15 retary shall rank annually the States to which

16 grants are paid under section 403 in the order of

17 their success in placing recipients of assistance

18 under the State program funded under this part into

19 long-term private sector jobs, reducing the overall

20 welfare caseload, and, when a practicable method for

21 calculating this information becomes available, di22 verting individuals from formally applying to the

23 State program and receiving assistance. In ranking

24 States under this subsection, the Secretary shall

25 take into account the average number of minor chil-
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1 dren living at home in families in the State that

2 have incomes below the poverty line and the amount

3 of funding provided each State for such families.

4 ‘‘(2) ANNUAL REVIEW OF MOST AND LEAST

5 SUCCESSFUL WORK PROGRAMS.—The Secretary shall

6 review the programs of the 3 States most recently

7 ranked highest under paragraph (1) and the 3

8 States most recently ranked lowest under paragraph

9 (1) that provide parents with work experience, as10 sistance in finding employment, and other work

11 preparation activities and support services to enable

12 the families of such parents to leave the program

13 and become self-sufficient.

14 ‘‘(e) ANNUAL RANKING OF STATES AND REVIEW OF

15 ISSUES RELATING TO OUT-OF-WEDLOCK BIRTHS.—

16 ‘‘(1) ANNUAL RANKING OF STATES.—

17 ‘‘(A) IN GENERAL.—The Secretary shall

18 annually rank States to which grants are made

19 under section 403 based on the following rank20 ing factors:

21 ‘‘(i) ABSOLUTE OUT-OF-WEDLOCK RA22 TIOS.—The ratio represented by—

23 ‘‘(I) the total number of out-of24 wedlock births in families receiving as25 sistance under the State program
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1 under this part in the State for the

2 most recent fiscal year for which in3 formation is available; over

4 ‘‘(II) the total number of births

5 in families receiving assistance under

6 the State program under this part in

7 the State for such year.

8 ‘‘(ii) NET CHANGES IN THE OUT-OF9 WEDLOCK RATIO.—The difference between

10 the ratio described in subparagraph (A)(i)

11 with respect to a State for the most recent

12 fiscal year for which such information is

13 available and the ratio with respect to the

14 State for the immediately preceding year.

15 ‘‘(2) ANNUAL REVIEW.—The Secretary shall re16 view the programs of the 5 States most recently

17 ranked highest under paragraph (1) and the 5

18 States most recently ranked the lowest under para19 graph (1).

20 ‘‘(f) STATE-INITIATED EVALUATIONS.—A State shall

21 be eligible to receive funding to evaluate the State pro22 gram funded under this part if—

23 ‘‘(1) the State submits a proposal to the Sec24 retary for the evaluation;
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1 ‘‘(2) the Secretary determines that the design

2 and approach of the evaluation is rigorous and is

3 likely to yield information that is credible and will

4 be useful to other States, and

5 ‘‘(3) unless otherwise waived by the Secretary,

6 the State contributes to the cost of the evaluation,

7 from non-Federal sources, an amount equal to at

8 least 10 percent of the cost of the evaluation.

9 ‘‘(g) FUNDING OF STUDIES AND DEMONSTRA10 TIONS.—

11 ‘‘(1) IN GENERAL.—Out of any money in the

12 Treasury of the United States not otherwise appro13 priated, there are appropriated $15,000,000 for each

14 fiscal year specified in section 403(a)(1) for the pur15 pose of paying—

16 ‘‘(A) the cost of conducting the research

17 described in subsection (a);

18 ‘‘(B) the cost of developing and evaluating

19 innovative approaches for reducing welfare de20 pendency and increasing the well-being of minor

21 children under subsection (b);

22 ‘‘(C) the Federal share of any State-initi23 ated study approved under subsection (f); and

24 ‘‘(D) an amount determined by the Sec25 retary to be necessary to operate and evaluate
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1 demonstration projects, relating to this part,

2 that are in effect or approved under section

3 1115 as of September 30, 1995, and are contin4 ued after such date.

5 ‘‘(2) ALLOCATION.—Of the amount appro6 priated under paragraph (1) for a fiscal year—

7 ‘‘(A) 50 percent shall be allocated for the

8 purposes described in subparagraphs (A) and

9 (B) of paragraph (1), and

10 ‘‘(B) 50 percent shall be allocated for the

11 purposes described in subparagraphs (C) and

12 (D) of paragraph (1).

13 ‘‘SEC. 414. STUDY BY THE CENSUS BUREAU.

14 ‘‘(a) IN GENERAL.—The Bureau of the Census shall

15 expand the Survey of Income and Program Participation

16 as necessary to obtain such information as will enable in17 terested persons to evaluate the impact of the amendments

18 made by title I of the Personal Responsibility and Work

19 Opportunity Act of 1996 on a random national sample of

20 recipients of assistance under State programs funded

21 under this part and (as appropriate) other low income

22 families, and in doing so, shall pay particular attention

23 to the issues of out-of-wedlock birth, welfare dependency,

24 the beginning and end of welfare spells, and the causes

25 of repeat welfare spells.
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1 ‘‘(b) APPROPRIATION.—Out of any money in the

2 Treasury of the United States not otherwise appropriated,

3 there are appropriated $10,000,000 for each of fiscal

4 years 1996, 1997, 1998, 1999, 2000, 2001, and 2002 for

5 payment to the Bureau of the Census to carry out sub6 section (a).

7 ‘‘SEC. 415. WAIVERS.

8 ‘‘(a) CONTINUATION OF WAIVERS.—

9 ‘‘(1) WAIVERS IN EFFECT ON DATE OF ENACT10 MENT OF WELFARE REFORM.—Except as provided

11 in paragraph (3), if any waiver granted to a State

12 under section 1115 or otherwise which relates to the

13 provision of assistance under a State plan under this

14 part (as in effect on September 30, 1995) is in ef15 fect as of the date of the enactment of the Personal

16 Responsibility and Work Opportunity Act of 1996,

17 the amendments made by such Act shall not apply

18 with respect to the State before the expiration (de19 termined without regard to any extensions) of the

20 waiver to the extent such amendments are inconsist21 ent with the waiver.

22 ‘‘(2) WAIVERS GRANTED SUBSEQUENTLY.—Ex23 cept as provided in paragraph (3), if any waiver

24 granted to a State under section 1115 or otherwise

25 which relates to the provision of assistance under a
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1 State plan under this part (as in effect on Septem2 ber 30, 1995) is submitted to the Secretary before

3 the date of the enactment of the Personal Respon4 sibility and Work Opportunity Act of 1996 and ap5 proved by the Secretary on or before July 1, 1997,

6 and the State demonstrates to the satisfaction of the

7 Secretary that the waiver will not result in Federal

8 expenditures under title IV of this Act (as in effect

9 without regard to the amendments made by the Per10 sonal Responsibility and Work Opportunity Act of

11 1996) that are greater than would occur in the ab12 sence of the waiver, the amendments made by the

13 Personal Responsibility and Work Opportunity Act

14 of 1996 shall not apply with respect to the State be15 fore the expiration (determined without regard to

16 any extensions) of the waiver to the extent the

17 amendments made by the Personal Responsibility

18 and Work Opportunity Act of 1996 are inconsistent

19 with the waiver.

20 ‘‘(3) FINANCING LIMITATION.—Notwithstand21 ing any other provision of law, beginning with fiscal

22 year 1996, a State operating under a waiver de23 scribed in paragraph (1) shall be entitled to payment

24 under section 403 for the fiscal year, in lieu of any

25 other payment provided for in the waiver.
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1 ‘‘(b) STATE OPTION TO TERMINATE WAIVER.—

2 ‘‘(1) IN GENERAL.—A State may terminate a

3 waiver described in subsection (a) before the expira4 tion of the waiver.

5 ‘‘(2) REPORT.—A State which terminates a

6 waiver under paragraph (1) shall submit a report to

7 the Secretary summarizing the waiver and any avail8 able information concerning the result or effect of

9 the waiver.

10 ‘‘(3) HOLD HARMLESS PROVISION.—

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

12 other provision of law, a State that, not later

13 than the date described in subparagraph (B),

14 submits a written request to terminate a waiver

15 described in subsection (a) shall be held harm16 less for accrued cost neutrality liabilities in17 curred under the waiver.

18 ‘‘(B) DATE DESCRIBED.—The date de19 scribed in this subparagraph is 90 days follow20 ing the adjournment of the first regular session

21 of the State legislature that begins after the

22 date of the enactment of the Personal Respon23 sibility and Work Opportunity Act of 1996.

24 ‘‘(c) SECRETARIAL ENCOURAGEMENT OF CURRENT

25 WAIVERS.—The Secretary shall encourage any State oper-
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1 ating a waiver described in subsection (a) to continue the

2 waiver and to evaluate, using random sampling and other

3 characteristics of accepted scientific evaluations, the result

4 or effect of the waiver.

5 ‘‘(d) CONTINUATION OF INDIVIDUAL WAIVERS.—A

6 State may elect to continue 1 or more individual waivers

7 described in subsection (a).

8 ‘‘SEC. 416. ASSISTANT SECRETARY FOR FAMILY SUPPORT.

9 ‘‘The programs under this part and part D shall be

10 administered by an Assistant Secretary for Family Sup11 port within the Department of Health and Human Serv12 ices, who shall be appointed by the President, by and with

13 the advice and consent of the Senate, and who shall be

14 in addition to any other Assistant Secretary of Health and

15 Human Services provided for by law.

16 ‘‘SEC. 417. LIMITATION ON FEDERAL AUTHORITY.

17 ‘‘No officer or employee of the Federal Government

18 may regulate the conduct of States under this part or en19 force any provision of this part, except to the extent ex20 pressly provided in this part.

21 ‘‘SEC. 418. DEFINITIONS.

22 ‘‘As used in this part:

23 ‘‘(1) ADULT.—The term ‘adult’ means an indi24 vidual who is not a minor child.
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1 ‘‘(2) MINOR CHILD.—The term ‘minor child’

2 means an individual who—

3 ‘‘(A) has not attained 18 years of age; or

4 ‘‘(B) has not attained 19 years of age and

5 is a full-time student in a secondary school (or

6 in the equivalent level of vocational or technical

7 training).

8 ‘‘(3) FISCAL YEAR.—The term ‘fiscal year’

9 means any 12-month period ending on September 30

10 of a calendar year.

11 ‘‘(4) INDIAN, INDIAN TRIBE, AND TRIBAL ORGA12 NIZATION.—

13 ‘‘(A) IN GENERAL.—Except as provided in

14 subparagraph (B), the terms ‘Indian’, ‘Indian

15 tribe’, and ‘tribal organization’ have the mean16 ing given such terms by section 4 of the Indian

17 Self-Determination and Education Assistance

18 Act (25 U.S.C. 450b).

19 ‘‘(B) SPECIAL RULE FOR INDIAN TRIBES

20 IN ALASKA.—The term ‘Indian tribe’ means,

21 with respect to the State of Alaska, only the

22 Metlakatla Indian Community of the Annette

23 Islands Reserve and the following Alaska Native

24 regional nonprofit corporations:

25 ‘‘(i) Arctic Slope Native Association.
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1 ‘‘(ii) Kawerak, Inc.

2 ‘‘(iii) Maniilaq Association.

3 ‘‘(iv) Association of Village Council

4 Presidents.

5 ‘‘(v) Tanana Chiefs Conference.

6 ‘‘(vi) Cook Inlet Tribal Council.

7 ‘‘(vii) Bristol Bay Native Association.

8 ‘‘(viii) Aleutian and Pribilof Island

9 Association.

10 ‘‘(ix) Chugachmuit.

11 ‘‘(x) Tlingit Haida Central Council.

12 ‘‘(xi) Kodiak Area Native Association.

13 ‘‘(xii) Copper River Native Associa14 tion.

15 ‘‘(5) STATE.—Except as otherwise specifically

16 provided, the term ‘State’ means the 50 States of

17 the United States, the District of Columbia, the

18 Commonwealth of Puerto Rico, the United States

19 Virgin Islands, Guam, and American Samoa.’’.

20 (b) GRANTS TO OUTLYING AREAS.—Section 1108

21 (42 U.S.C. 1308) is amended—

22 (1) by redesignating subsection (c) as sub23 section (g);

24 (2) by striking all that precedes subsection (c)

25 and inserting the following:
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1 ‘‘SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE

2 VIRGIN ISLANDS, GUAM, AND AMERICAN

3 SAMOA; LIMITATION ON TOTAL PAYMENTS.

4 ‘‘(a) LIMITATION ON TOTAL PAYMENTS TO EACH

5 TERRITORY.—Notwithstanding any other provision of this

6 Act, the total amount certified by the Secretary of Health

7 and Human Services under titles I, X, XIV, and XVI,

8 under parts A, B, and E of title IV, and under subsection

9 (b) of this section, for payment to any territory for a fiscal

10 year shall not exceed the ceiling amount for the territory

11 for the fiscal year.

12 ‘‘(b) ENTITLEMENT TO MATCHING GRANT.—

13 ‘‘(1) IN GENERAL.—Each territory shall be en14 titled to receive from the Secretary for each fiscal

15 year a grant in an amount equal to 75 percent of

16 the amount (if any) by which—

17 ‘‘(A) the total expenditures of the territory

18 during the fiscal year under the territory pro19 grams funded under parts A, B, and E of title

20 IV; exceeds

21 ‘‘(B) the sum of—

22 ‘‘(i) the total amount required to be

23 paid to the territory (other than with re24 spect to child care) under former section

25 403 (as in effect on September 30, 1995)

26 for fiscal year 1995, which shall be deter-
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1 mined by applying subparagraphs (C) and

2 (D) of section 403(a)(1) to the territory;

3 ‘‘(ii) the total amount required to be

4 paid to the territory under former section

5 434 (as so in effect) for fiscal year 1995;

6 and

7 ‘‘(iii) the total amount expended by

8 the territory during fiscal year 1995 pur9 suant to parts A, B, and F of title IV (as

10 so in effect), other than for child care.

11 ‘‘(2) USE OF GRANT.—Any territory to which a

12 grant is made under paragraph (1) may expend the

13 amount under any program operated or funded

14 under any provision of law specified in subsection

15 (a).

16 ‘‘(c) DEFINITIONS.—As used in this section:

17 ‘‘(1) TERRITORY.—The term ‘territory’ means

18 Puerto Rico, the Virgin Islands, Guam, and Amer19 ican Samoa.

20 ‘‘(2) CEILING AMOUNT.—The term ‘ceiling

21 amount’ means, with respect to a territory and a fis22 cal year, the mandatory ceiling amount with respect

23 to the territory plus the discretionary ceiling amount

24 with respect to the territory, reduced for the fiscal

25 year in accordance with subsection (f).
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1 ‘‘(3) MANDATORY CEILING AMOUNT.—The term

2 ‘mandatory ceiling amount’ means—

3 ‘‘(A) $105,538,000 with respect to for

4 Puerto Rico;

5 ‘‘(B) $4,902,000 with respect to Guam;

6 ‘‘(C) $3,742,000 with respect to the Virgin

7 Islands; and

8 ‘‘(D) $1,122,000 with respect to American

9 Samoa.

10 ‘‘(4) DISCRETIONARY CEILING AMOUNT.—The

11 term ‘discretionary ceiling amount’ means, with re12 spect to a territory and a fiscal year, the total

13 amount appropriated pursuant to subsection (d)(3)

14 for the fiscal year for payment to the territory.

15 ‘‘(5) TOTAL AMOUNT EXPENDED BY THE TER16 RITORY.—The term ‘total amount expended by the

17 territory’—

18 ‘‘(A) does not include expenditures during

19 the fiscal year from amounts made available by

20 the Federal Government; and

21 ‘‘(B) when used with respect to fiscal year

22 1995, also does not include—

23 ‘‘(i) expenditures during fiscal year

24 1995 under subsection (g) or (i) of section
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1 402 (as in effect on September 30, 1995);

2 or

3 ‘‘(ii) any expenditures during fiscal

4 year 1995 for which the territory (but for

5 section 1108, as in effect on September 30,

6 1995) would have received reimbursement

7 from the Federal Government.

8 ‘‘(d) DISCRETIONARY GRANTS.—

9 ‘‘(1) IN GENERAL.—The Secretary shall make a

10 grant to each territory for any fiscal year in the

11 amount appropriated pursuant to paragraph (3) for

12 the fiscal year for payment to the territory.

13 ‘‘(2) USE OF GRANT.—Any territory to which a

14 grant is made under paragraph (1) may expend the

15 amount under any program operated or funded

16 under any provision of law specified in subsection

17 (a).

18 ‘‘(3) LIMITATION ON AUTHORIZATION OF AP19 PROPRIATIONS.—For grants under paragraph (1),

20 there are authorized to be appropriated to the Sec21 retary for each fiscal year—

22 ‘‘(A) $7,951,000 for payment to Puerto

23 Rico;

24 ‘‘(B) $345,000 for payment to Guam;
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1 ‘‘(C) $275,000 for payment to the Virgin

2 Islands; and

3 ‘‘(D) $190,000 for payment to American

4 Samoa.

5 ‘‘(e) AUTHORITY TO TRANSFER FUNDS AMONG PRO6 GRAMS.—Notwithstanding any other provision of this Act,

7 any territory to which an amount is paid under any provi8 sion of law specified in subsection (a) may use part or

9 all of the amount to carry out any program operated by

10 the territory, or funded, under any other such provision

11 of law.

12 ‘‘(f) MAINTENANCE OF EFFORT.—The ceiling

13 amount with respect to a territory shall be reduced for

14 a fiscal year by an amount equal to the amount (if any)

15 by which—

16 ‘‘(1) the total amount expended by the territory

17 under all programs of the territory operated pursu18 ant to the provisions of law specified in subsection

19 (a) (as such provisions were in effect for fiscal year

20 1995) for fiscal year 1995; exceeds

21 ‘‘(2) the total amount expended by the territory

22 under all programs of the territory that are funded

23 under the provisions of law specified in subsection

24 (a) for the fiscal year that immediately precedes the
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1 fiscal year referred to in the matter preceding para2 graph (1).’’; and

3 (3) by striking subsections (d) and (e).

4 (c) REPEAL OF PROVISIONS REQUIRING REDUCTION

5 OF MEDICAID PAYMENTS TO STATES THAT REDUCE

6 WELFARE PAYMENT LEVELS.—

7 (1) Section 1903(i) (42 U.S.C. 1396b(i)) is

8 amended by striking paragraph (9).

9 (2) Section 1902 (42 U.S.C. 1396a) is amended

10 by striking subsection (c).

11 SEC. 104. SERVICES PROVIDED BY CHARITABLE, RELI12 GIOUS, OR PRIVATE ORGANIZATIONS.

13 (a) IN GENERAL.—

14 (1) STATE OPTIONS.—A State may—

15 (A) administer and provide services under

16 the programs described in subparagraphs (A)

17 and (B)(i) of paragraph (2) through contracts

18 with charitable, religious, or private organiza19 tions; and

20 (B) provide beneficiaries of assistance

21 under the programs described in subparagraphs

22 (A) and (B)(ii) of paragraph (2) with certifi23 cates, vouchers, or other forms of disbursement

24 which are redeemable with such organizations.
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1 (2) PROGRAMS DESCRIBED.—The programs de2 scribed in this paragraph are the following pro3 grams:

4 (A) A State program funded under part A

5 of title IV of the Social Security Act (as amend6 ed by section 103(a) of this Act).

7 (B) Any other program established or

8 modified under title I, II, or VI of this Act,

9 that—

10 (i) permits contracts with organiza11 tions; or

12 (ii) permits certificates, vouchers, or

13 other forms of disbursement to be provided

14 to beneficiaries, as a means of providing

15 assistance.

16 (b) RELIGIOUS ORGANIZATIONS.—The purpose of

17 this section is to allow States to contract with religious

18 organizations, or to allow religious organizations to accept

19 certificates, vouchers, or other forms of disbursement

20 under any program described in subsection (a)(2), on the

21 same basis as any other nongovernmental provider without

22 impairing the religious character of such organizations,

23 and without diminishing the religious freedom of bene24 ficiaries of assistance funded under such program.
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1 (c) NONDISCRIMINATION AGAINST RELIGIOUS ORGA2 NIZATIONS.—In the event a State exercises its authority

3 under subsection (a), religious organizations are eligible,

4 on the same basis as any other private organization, as

5 contractors to provide assistance, or to accept certificates,

6 vouchers, or other forms of disbursement, under any pro7 gram described in subsection (a)(2) so long as the pro8 grams are implemented consistent with the Establishment

9 Clause of the United States Constitution. Except as pro10 vided in subsection (k), neither the Federal Government

11 nor a State receiving funds under such programs shall dis12 criminate against an organization which is or applies to

13 be a contractor to provide assistance, or which accepts cer14 tificates, vouchers, or other forms of disbursement, on the

15 basis that the organization has a religious character.

16 (d) RELIGIOUS CHARACTER AND FREEDOM.—

17 (1) RELIGIOUS ORGANIZATIONS.—A religious

18 organization with a contract described in subsection

19 (a)(1)(A), or which accepts certificates, vouchers, or

20 other forms of disbursement under subsection

21 (a)(1)(B), shall retain its independence from Fed22 eral, State, and local governments, including such

23 organization’s control over the definition, develop24 ment, practice, and expression of its religious beliefs.
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1 (2) ADDITIONAL SAFEGUARDS.—Neither the

2 Federal Government nor a State shall require a reli3 gious organization to—

4 (A) alter its form of internal governance;

5 or

6 (B) remove religious art, icons, scripture,

7 or other symbols;

8 in order to be eligible to contract to provide assist9 ance, or to accept certificates, vouchers, or other

10 forms of disbursement, funded under a program de11 scribed in subsection (a)(2).

12 (e) RIGHTS OF BENEFICIARIES OF ASSISTANCE.—

13 (1) IN GENERAL.—If an individual described in

14 paragraph (2) has an objection to the religious char15 acter of the organization or institution from which

16 the individual receives, or would receive, assistance

17 funded under any program described in subsection

18 (a)(2), the State in which the individual resides shall

19 provide such individual (if otherwise eligible for such

20 assistance) within a reasonable period of time after

21 the date of such objection with assistance from an

22 alternative provider that is accessible to the individ23 ual and the value of which is not less than the value

24 of the assistance which the individual would have re25 ceived from such organization.
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1 (2) INDIVIDUAL DESCRIBED.—An individual de2 scribed in this paragraph is an individual who re3 ceives, applies for, or requests to apply for, assist4 ance under a program described in subsection (a)(2).

5 (f) EMPLOYMENT PRACTICES.—A religious organiza6 tion’s exemption provided under section 702 of the Civil

7 Rights Act of 1964 (42 U.S.C. 2000e–1a) regarding em8 ployment practices shall not be affected by its participa9 tion in, or receipt of funds from, programs described in

10 subsection (a)(2).

11 (g) NONDISCRIMINATION AGAINST BENE12 FICIARIES.—Except as otherwise provided in law, a reli13 gious organization shall not discriminate against an indi14 vidual in regard to rendering assistance funded under any

15 program described in subsection (a)(2) on the basis of reli16 gion, a religious belief, or refusal to actively participate

17 in a religious practice.

18 (h) FISCAL ACCOUNTABILITY.—

19 (1) IN GENERAL.—Except as provided in para20 graph (2), any religious organization contracting to

21 provide assistance funded under any program de22 scribed in subsection (a)(2) shall be subject to the

23 same regulations as other contractors to account in

24 accord with generally accepted auditing principles
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1 for the use of such funds provided under such pro2 grams.

3 (2) LIMITED AUDIT.—If such organization seg4 regates Federal funds provided under such programs

5 into separate accounts, then only the financial as6 sistance provided with such funds shall be subject to

7 audit.

8 (i) COMPLIANCE.—Any party which seeks to enforce

9 its rights under this section may assert a civil action for

10 injunctive relief exclusively in an appropriate State court

11 against the entity or agency that allegedly commits such

12 violation.

13 (j) LIMITATIONS ON USE OF FUNDS FOR CERTAIN

14 PURPOSES.—No funds provided directly to institutions or

15 organizations to provide services and administer programs

16 under subsection (a)(1)(A) shall be expended for sectarian

17 worship, instruction, or proselytization.

18 (k) PREEMPTION.—Nothing in this section shall be

19 construed to preempt any provision of a State constitution

20 or State statute that prohibits or restricts the expenditure

21 of State funds in or by religious organizations.

22 SEC. 105. CENSUS DATA ON GRANDPARENTS AS PRIMARY

23 CAREGIVERS FOR THEIR GRANDCHILDREN.

24 (a) IN GENERAL.—Not later than 90 days after the

25 date of the enactment of this Act, the Secretary of Com-
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1 merce, in carrying out section 141 of title 13, United

2 States Code, shall expand the data collection efforts of the

3 Bureau of the Census (in this section referred to as the

4 ‘‘Bureau’’) to enable the Bureau to collect statistically sig5 nificant data, in connection with its decennial census and

6 its mid-decade census, concerning the growing trend of

7 grandparents who are the primary caregivers for their

8 grandchildren.

9 (b) EXPANDED CENSUS QUESTION.—In carrying out

10 subsection (a), the Secretary of Commerce shall expand

11 the Bureau’s census question that details households

12 which include both grandparents and their grandchildren.

13 The expanded question shall be formulated to distinguish

14 between the following households:

15 (1) A household in which a grandparent tempo16 rarily provides a home for a grandchild for a period

17 of weeks or months during periods of parental dis18 tress.

19 (2) A household in which a grandparent pro20 vides a home for a grandchild and serves as the pri21 mary caregiver for the grandchild.

22 SEC. 106. REPORT ON DATA PROCESSING.

23 (a) IN GENERAL.—Within 6 months after the date

24 of the enactment of this Act, the Secretary of Health and
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1 Human Services shall prepare and submit to the Congress

2 a report on—

3 (1) the status of the automated data processing

4 systems operated by the States to assist manage5 ment in the administration of State programs under

6 part A of title IV of the Social Security Act (wheth7 er in effect before or after October 1, 1995); and

8 (2) what would be required to establish a sys9 tem capable of—

10 (A) tracking participants in public pro11 grams over time; and

12 (B) checking case records of the States to

13 determine whether individuals are participating

14 in public programs of 2 or more States.

15 (b) PREFERRED CONTENTS.—The report required by

16 subsection (a) should include—

17 (1) a plan for building on the automated data

18 processing systems of the States to establish a sys19 tem with the capabilities described in subsection

20 (a)(2); and

21 (2) an estimate of the amount of time required

22 to establish such a system and of the cost of estab23 lishing such a system.
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1 SEC. 107. STUDY ON ALTERNATIVE OUTCOMES MEASURES.

2 (a) STUDY.—The Secretary shall, in cooperation with

3 the States, study and analyze outcomes measures for eval4 uating the success of the States in moving individuals out

5 of the welfare system through employment as an alter6 native to the minimum participation rates described in

7 section 407 of the Social Security Act. The study shall

8 include a determination as to whether such alternative

9 outcomes measures should be applied on a national or a

10 State-by-State basis and a preliminary assessment of the

11 effects of section 409(a)(7)(C) of such Act.

12 (b) REPORT.—Not later than September 30, 1998,

13 the Secretary shall submit to the Committee on Finance

14 of the Senate and the Committee on Ways and Means of

15 the House of Representatives a report containing the find16 ings of the study required by subsection (a).

17 SEC. 108. CONFORMING AMENDMENTS TO THE SOCIAL SE18 CURITY ACT.

19 (a) AMENDMENTS TO TITLE II.—

20 (1) Section 205(c)(2)(C)(vi) (42 U.S.C.

21 405(c)(2)(C)(vi)), as so redesignated by section

22 321(a)(9)(B) of the Social Security Independence

23 and Program Improvements Act of 1994, is amend24 ed—
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1 (A) by inserting ‘‘an agency administering

2 a program funded under part A of title IV or’’

3 before ‘‘an agency operating’’; and

4 (B) by striking ‘‘A or D of title IV of this

5 Act’’ and inserting ‘‘D of such title’’.

6 (2) Section 228(d)(1) (42 U.S.C. 428(d)(1)) is

7 amended by inserting ‘‘under a State program fund8 ed under’’ before ‘‘part A of title IV’’.

9 (b) AMENDMENTS TO PART D OF TITLE IV.—

10 (1) Section 451 (42 U.S.C. 651) is amended by

11 striking ‘‘aid’’ and inserting ‘‘assistance under a

12 State program funded’’.

13 (2) Section 452(a)(10)(C) (42 U.S.C.

14 652(a)(10)(C)) is amended—

15 (A) by striking ‘‘aid to families with de16 pendent children’’ and inserting ‘‘assistance

17 under a State program funded under part A’’;

18 (B) by striking ‘‘such aid’’ and inserting

19 ‘‘such assistance’’; and

20 (C) by striking ‘‘under section 402(a)(26)

21 or’’ and inserting ‘‘pursuant to section

22 408(a)(3) or under section’’.

23 (3) Section 452(a)(10)(F) (42 U.S.C.

24 652(a)(10)(F)) is amended—
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1 (A) by striking ‘‘aid under a State plan ap2 proved’’ and inserting ‘‘assistance under a State

3 program funded’’; and

4 (B) by striking ‘‘in accordance with the

5 standards referred to in section

6 402(a)(26)(B)(ii)’’ and inserting ‘‘by the

7 State’’.

8 (4) Section 452(b) (42 U.S.C. 652(b)) is

9 amended in the first sentence by striking ‘‘aid under

10 the State plan approved under part A’’ and inserting

11 ‘‘assistance under the State program funded under

12 part A’’.

13 (5) Section 452(d)(3)(B)(i) (42 U.S.C.

14 652(d)(3)(B)(i)) is amended by striking ‘‘1115(c)’’

15 and inserting ‘‘1115(b)’’.

16 (6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C.

17 652(g)(2)(A)(ii)(I)) is amended by striking ‘‘aid is

18 being paid under the State’s plan approved under

19 part A or E’’ and inserting ‘‘assistance is being pro20 vided under the State program funded under part

21 A’’.

22 (7) Section 452(g)(2)(A) (42 U.S.C.

23 652(g)(2)(A)) is amended in the matter following

24 clause (iii) by striking ‘‘aid was being paid under the

25 State’s plan approved under part A or E’’ and in-
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1 serting ‘‘assistance was being provided under the

2 State program funded under part A’’.

3 (8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is

4 amended in the matter following subparagraph

5 (B)—

6 (A) by striking ‘‘who is a dependent child’’

7 and inserting ‘‘with respect to whom assistance

8 is being provided under the State program

9 funded under part A’’;

10 (B) by inserting ‘‘by the State agency’’

11 after ‘‘found’’; and

12 (C) by striking ‘‘to have good cause for re13 fusing to cooperate under section 402(a)(26)’’

14 and inserting ‘‘to qualify for a good cause or

15 other exception to cooperate pursuant to section

16 454(29)’’.

17 (9) Section 452(h) (42 U.S.C. 652(h)) is

18 amended by striking ‘‘under section 402(a)(26)’’ and

19 inserting ‘‘pursuant to section 408(a)(3)’’.

20 (10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is

21 amended by striking ‘‘aid under part A of this title’’

22 and inserting ‘‘assistance under a State program

23 funded under part A’’.

24 (11) Section 454(5)(A) (42 U.S.C. 654(5)(A)))

25 is amended—
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1 (A) by striking ‘‘under section 402(a)(26)’’

2 and inserting ‘‘pursuant to section 408(a)(3)’’;

3 and

4 (B) by striking ‘‘; except that this para5 graph shall not apply to such payments for any

6 month following the first month in which the

7 amount collected is sufficient to make such

8 family ineligible for assistance under the State

9 plan approved under part A;’’ and inserting a

10 comma.

11 (12) Section 454(6)(D) (42 U.S.C. 654(6)(D))

12 is amended by striking ‘‘aid under a State plan ap13 proved’’ and inserting ‘‘assistance under a State pro14 gram funded’’.

15 (13) Section 456(a)(1) (42 U.S.C. 656(a)(1)) is

16 amended by striking ‘‘under section 402(a)(26)’’.

17 (14) Section 466(a)(3)(B) (42 U.S.C.

18 666(a)(3)(B)) is amended by striking ‘‘402(a)(26)’’

19 and inserting ‘‘408(a)(3)’’.

20 (15) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is

21 amended by striking ‘‘aid’’ and inserting ‘‘assistance

22 under a State program funded’’.

23 (16) Section 469(a) (42 U.S.C. 669(a)) is

24 amended—
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1 (A) by striking ‘‘aid under plans approved’’

2 and inserting ‘‘assistance under State programs

3 funded’’; and

4 (B) by striking ‘‘such aid’’ and inserting

5 ‘‘such assistance’’.

6 (c) REPEAL OF PART F OF TITLE IV.—Part F of

7 title IV (42 U.S.C. 681–687) is repealed.

8 (d) AMENDMENT TO TITLE X.—Section 1002(a)(7)

9 (42 U.S.C. 1202(a)(7)) is amended by striking ‘‘aid to

10 families with dependent children under the State plan ap11 proved under section 402 of this Act’’ and inserting ‘‘as12 sistance under a State program funded under part A of

13 title IV’’.

14 (e) AMENDMENTS TO TITLE XI.—

15 (1) Section 1109 (42 U.S.C. 1309) is amended

16 by striking ‘‘or part A of title IV,’’.

17 (2) Section 1115 (42 U.S.C. 1315) is amend18 ed—

19 (A) in subsection (a)(2)—

20 (i) by inserting ‘‘(A)’’ after ‘‘(2)’’;

21 (ii) by striking ‘‘403,’’;

22 (iii) by striking the period at the end

23 and inserting ‘‘, and’’; and

24 (iv) by adding at the end the following

25 new subparagraph:
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1 ‘‘(B) costs of such project which would not oth2 erwise be a permissible use of funds under part A

3 of title IV and which are not included as part of the

4 costs of projects under section 1110, shall to the ex5 tent and for the period prescribed by the Secretary,

6 be regarded as a permissible use of funds under

7 such part.’’; and

8 (B) in subsection (c)(3), by striking

9 ‘‘under the program of aid to families with de10 pendent children’’ and inserting ‘‘part A of

11 such title’’.

12 (3) Section 1116 (42 U.S.C. 1316) is amend13 ed—

14 (A) in each of subsections (a)(1), (b), and

15 (d), by striking ‘‘or part A of title IV,’’; and

16 (B) in subsection (a)(3), by striking

17 ‘‘404,’’.

18 (4) Section 1118 (42 U.S.C. 1318) is amend19 ed—

20 (A) by striking ‘‘403(a),’’;

21 (B) by striking ‘‘and part A of title IV,’’;

22 and

23 (C) by striking ‘‘, and shall, in the case of

24 American Samoa, mean 75 per centum with re25 spect to part A of title IV’’.
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1 (5) Section 1119 (42 U.S.C. 1319) is amend2 ed—

3 (A) by striking ‘‘or part A of title IV’’; and

4 (B) by striking ‘‘403(a),’’.

5 (6) Section 1133(a) (42 U.S.C. 1320b–3(a)) is

6 amended by striking ‘‘or part A of title IV,’’.

7 (7) Section 1136 (42 U.S.C. 1320b–6) is re8 pealed.

9 (8) Section 1137 (42 U.S.C. 1320b–7) is

10 amended—

11 (A) in subsection (b), by striking para12 graph (1) and inserting the following:

13 ‘‘(1) any State program funded under part A of

14 title IV of this Act;’’; and

15 (B) in subsection (d)(1)(B)—

16 (i) by striking ‘‘In this subsection—’’

17 and all that follows through ‘‘(ii) in’’ and

18 inserting ‘‘In this subsection, in’’;

19 (ii) by redesignating subclauses (I),

20 (II), and (III) as clauses (i), (ii), and (iii);

21 and

22 (iii) by moving such redesignated ma23 terial 2 ems to the left.

24 (f) AMENDMENT TO TITLE XIV.—Section

25 1402(a)(7) (42 U.S.C. 1352(a)(7)) is amended by striking
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1 ‘‘aid to families with dependent children under the State

2 plan approved under section 402 of this Act’’ and insert3 ing ‘‘assistance under a State program funded under part

4 A of title IV’’.

5 (g) AMENDMENT TO TITLE XVI AS IN EFFECT WITH

6 RESPECT TO THE TERRITORIES.—Section 1602(a)(11),

7 as in effect without regard to the amendment made by

8 section 301 of the Social Security Amendments of 1972

9 (42 U.S.C. 1382 note), is amended by striking ‘‘aid under

10 the State plan approved’’ and inserting ‘‘assistance under

11 a State program funded’’.

12 (h) AMENDMENT TO TITLE XVI AS IN EFFECT WITH

13 RESPECT TO THE STATES.—Section 1611(c)(5)(A) (42

14 U.S.C. 1382(c)(5)(A)) is amended to read as follows: ‘‘(A)

15 a State program funded under part A of title IV,’’.

16 (i) AMENDMENT TO TITLE XIX.—Section 1902(j)

17 (42 U.S.C. 1396a(j)) is amended by striking ‘‘1108(c)’’

18 and inserting ‘‘1108(g)’’.

19 SEC. 109. CONFORMING AMENDMENTS TO THE FOOD

20 STAMP ACT OF 1977 AND RELATED PROVI21 SIONS.

22 (a) Section 5 of the Food Stamp Act of 1977 (7

23 U.S.C. 2014) is amended—

24 (1) in the second sentence of subsection (a), by

25 striking ‘‘plan approved’’ and all that follows
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1 through ‘‘title IV of the Social Security Act’’ and in2 serting ‘‘program funded under part A of title IV of

3 the Social Security Act (42 U.S.C. 601 et seq.)’’;

4 (2) in subsection (d)—

5 (A) in paragraph (5), by striking ‘‘assist6 ance to families with dependent children’’ and

7 inserting ‘‘assistance under a State program

8 funded’’; and

9 (B) by striking paragraph (13) and redes10 ignating paragraphs (14), (15), and (16) as

11 paragraphs (13), (14), and (15), respectively;

12 (3) in subsection (j), by striking ‘‘plan approved

13 under part A of title IV of such Act (42 U.S.C. 601

14 et seq.)’’ and inserting ‘‘program funded under part

15 A of title IV of the Act (42 U.S.C. 601 et seq.)’’;

16 and

17 (4) by striking subsection (m).

18 (b) Section 6 of such Act (7 U.S.C. 2015) is amend19 ed—

20 (1) in subsection (c)(5), by striking ‘‘the State

21 plan approved’’ and inserting ‘‘the State program

22 funded’’; and

23 (2) in subsection (e)(6), by striking ‘‘aid to

24 families with dependent children’’ and inserting

25 ‘‘benefits under a State program funded’’.
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1 (c) Section 16(g)(4) of such Act (7 U.S.C.

2 2025(g)(4)) is amended by striking ‘‘State plans under the

3 Aid to Families with Dependent Children Program under’’

4 and inserting ‘‘State programs funded under part A of’’.

5 (d) Section 17 of such Act (7 U.S.C. 2026) is amend6 ed—

7 (1) in the first sentence of subsection (b)(1)(A),

8 by striking ‘‘to aid to families with dependent chil9 dren under part A of title IV of the Social Security

10 Act’’ and inserting ‘‘or are receiving assistance

11 under a State program funded under part A of title

12 IV of the Social Security Act (42 U.S.C. 601 et

13 seq.)’’; and

14 (2) in subsection (b)(3), by adding at the end

15 the following new subparagraph:

16 ‘‘(I) The Secretary may not grant a waiver

17 under this paragraph on or after October 1, 1995.

18 Any reference in this paragraph to a provision of

19 title IV of the Social Security Act shall be deemed

20 to be a reference to such provision as in effect on

21 September 30, 1995.’’;

22 (e) Section 20 of such Act (7 U.S.C. 2029) is amend23 ed—
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1 (1) in subsection (a)(2)(B) by striking ‘‘operat2 ing—’’ and all that follows through ‘‘(ii) any other’’

3 and inserting ‘‘operating any’’; and

4 (2) in subsection (b)—

5 (A) in paragraph (1)—

6 (i) by striking ‘‘(b)(1) A household’’

7 and inserting ‘‘(b) A household’’; and

8 (ii) in subparagraph (B), by striking

9 ‘‘training program’’ and inserting ‘‘activ10 ity’’;

11 (B) by striking paragraph (2); and

12 (C) by redesignating subparagraphs (A)

13 through (F) as paragraphs (1) through (6), re14 spectively.

15 (f) Section 5(h)(1) of the Agriculture and Consumer

16 Protection Act of 1973 (Public Law 93–186; 7 U.S.C.

17 612c note) is amended by striking ‘‘the program for aid

18 to families with dependent children’’ and inserting ‘‘the

19 State program funded’’.

20 (g) Section 9 of the National School Lunch Act (42

21 U.S.C. 1758) is amended—

22 (1) in subsection (b)—

23 (A) in paragraph (2)(C)(ii)(II)—
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1 (i) by striking ‘‘program for aid to

2 families with dependent children’’ and in3 serting ‘‘State program funded’’; and

4 (ii) by inserting before the period at

5 the end the following: ‘‘that the Secretary

6 determines complies with standards estab7 lished by the Secretary that ensure that

8 the standards under the State program are

9 comparable to or more restrictive than

10 those in effect on June 1, 1995’’; and

11 (B) in paragraph (6)—

12 (i) in subparagraph (A)(ii)—

13 (I) by striking ‘‘an AFDC assist14 ance unit (under the aid to families

15 with dependent children program au16 thorized’’ and inserting ‘‘a family

17 (under the State program funded’’;

18 and

19 (II) by striking ‘‘, in a State’’

20 and all that follows through

21 ‘‘9902(2)))’’ and inserting ‘‘that the

22 Secretary determines complies with

23 standards established by the Secretary

24 that ensure that the standards under

25 the State program are comparable to
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1 or more restrictive than those in effect

2 on June 1, 1995’’; and

3 (ii) in subparagraph (B), by striking

4 ‘‘aid to families with dependent children’’

5 and inserting ‘‘assistance under the State

6 program funded under part A of title IV of

7 the Social Security Act (42 U.S.C. 601 et

8 seq.) that the Secretary determines com9 plies with standards established by the

10 Secretary that ensure that the standards

11 under the State program are comparable

12 to or more restrictive than those in effect

13 on June 1, 1995’’; and

14 (2) in subsection (d)(2)(C)—

15 (A) by striking ‘‘program for aid to fami16 lies with dependent children’’ and inserting

17 ‘‘State program funded’’; and

18 (B) by inserting before the period at the

19 end the following: ‘‘that the Secretary deter20 mines complies with standards established by

21 the Secretary that ensure that the standards

22 under the State program are comparable to or

23 more restrictive than those in effect on June 1,

24 1995’’.
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1 (h) Section 17(d)(2)(A)(ii)(II) of the Child Nutrition

2 Act of 1966 (42 U.S.C. 1786(d)(2)(A)(ii)(II)) is amend3 ed—

4 (1) by striking ‘‘program for aid to families

5 with dependent children established’’ and inserting

6 ‘‘State program funded’’; and

7 (2) by inserting before the semicolon the follow8 ing: ‘‘that the Secretary determines complies with

9 standards established by the Secretary that ensure

10 that the standards under the State program are

11 comparable to or more restrictive than those in ef12 fect on June 1, 1995’’.

13 SEC. 110. CONFORMING AMENDMENTS TO OTHER LAWS.

14 (a) Subsection (b) of section 508 of the Unemploy15 ment Compensation Amendments of 1976 (42 U.S.C.

16 603a; Public Law 94–566; 90 Stat. 2689) is amended to

17 read as follows:

18 ‘‘(b) PROVISION FOR REIMBURSEMENT OF EX19 PENSES.—For purposes of section 455 of the Social Secu20 rity Act, expenses incurred to reimburse State employment

21 offices for furnishing information requested of such of22 fices—

23 ‘‘(1) pursuant to the third sentence of section

24 3(a) of the Act entitled ‘An Act to provide for the

25 establishment of a national employment system and
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1 for cooperation with the States in the promotion of

2 such system, and for other purposes’, approved June

3 6, 1933 (29 U.S.C. 49b(a)), or

4 ‘‘(2) by a State or local agency charged with

5 the duty of carrying a State plan for child support

6 approved under part D of title IV of the Social Se7 curity Act,

8 shall be considered to constitute expenses incurred in the

9 administration of such State plan.’’.

10 (b) Section 9121 of the Omnibus Budget Reconcili11 ation Act of 1987 (42 U.S.C. 602 note) is repealed.

12 (c) Section 9122 of the Omnibus Budget Reconcili13 ation Act of 1987 (42 U.S.C. 602 note) is repealed.

14 (d) Section 221 of the Housing and Urban-Rural Re15 covery Act of 1983 (42 U.S.C. 602 note), relating to treat16 ment under AFDC of certain rental payments for federally

17 assisted housing, is repealed.

18 (e) Section 159 of the Tax Equity and Fiscal Respon19 sibility Act of 1982 (42 U.S.C. 602 note) is repealed.

20 (f) Section 202(d) of the Social Security Amendments

21 of 1967 (81 Stat. 882; 42 U.S.C. 602 note) is repealed.

22 (g) Section 903 of the Stewart B. McKinney Home23 less Assistance Amendments Act of 1988 (42 U.S.C.

24 11381 note), relating to demonstration projects to reduce

25 number of AFDC families in welfare hotels, is amended—
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1 (1) in subsection (a), by striking ‘‘aid to fami2 lies with dependent children under a State plan ap3 proved’’ and inserting ‘‘assistance under a State pro4 gram funded’’; and

5 (2) in subsection (c), by striking ‘‘aid to fami6 lies with dependent children in the State under a

7 State plan approved’’ and inserting ‘‘assistance in

8 the State under a State program funded’’.

9 (h) The Higher Education Act of 1965 (20 U.S.C.

10 1001 et seq.) is amended—

11 (1) in section 404C(c)(3) (20 U.S.C. 1070a–

12 23(c)(3)), by striking ‘‘(Aid to Families with De13 pendent Children)’’; and

14 (2) in section 480(b)(2) (20 U.S.C.

15 1087vv(b)(2)), by striking ‘‘aid to families with de16 pendent children under a State plan approved’’ and

17 inserting ‘‘assistance under a State program fund18 ed’’.

19 (i) The Carl D. Perkins Vocational and Applied Tech20 nology Education Act (20 U.S.C. 2301 et seq.) is amend21 ed—

22 (1) in section 231(d)(3)(A)(ii) (20 U.S.C.

23 2341(d)(3)(A)(ii)), by striking ‘‘the program for aid

24 to dependent children’’ and inserting ‘‘the State pro25 gram funded’’;
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1 (2) in section 232(b)(2)(B) (20 U.S.C.

2 2341a(b)(2)(B)), by striking ‘‘the program for aid to

3 families with dependent children’’ and inserting ‘‘the

4 State program funded’’; and

5 (3) in section 521(14)(B)(iii) (20 U.S.C.

6 2471(14)(B)(iii)), by striking ‘‘the program for aid

7 to families with dependent children’’ and inserting

8 ‘‘the State program funded’’.

9 (j) The Elementary and Secondary Education Act of

10 1965 (20 U.S.C. 2701 et seq.) is amended—

11 (1) in section 1113(a)(5) (20 U.S.C.

12 6313(a)(5)), by striking ‘‘Aid to Families with De13 pendent Children Program’’ and inserting ‘‘State

14 program funded under part A of title IV of the So15 cial Security Act’’;

16 (2) in section 1124(c)(5) (20 U.S.C.

17 6333(c)(5)), by striking ‘‘the program of aid to fam18 ilies with dependent children under a State plan ap19 proved under’’ and inserting ‘‘a State program fund20 ed under part A of’’; and

21 (3) in section 5203(b)(2) (20 U.S.C.

22 7233(b)(2))—

23 (A) in subparagraph (A)(xi), by striking

24 ‘‘Aid to Families with Dependent Children ben25 efits’’ and inserting ‘‘assistance under a State
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1 program funded under part A of title IV of the

2 Social Security Act’’; and

3 (B) in subparagraph (B)(viii), by striking

4 ‘‘Aid to Families with Dependent Children’’ and

5 inserting ‘‘assistance under the State program

6 funded under part A of title IV of the Social

7 Security Act’’.

8 (k) Chapter VII of title I of Public Law 99–88 (25

9 U.S.C. 13d–1) is amended to read as follows: ‘‘Provided

10 further, That general assistance payments made by the

11 Bureau of Indian Affairs shall be made—

12 ‘‘(1) after April 29, 1985, and before October

13 1, 1995, on the basis of Aid to Families with De14 pendent Children (AFDC) standards of need; and

15 ‘‘(2) on and after October 1, 1995, on the basis

16 of standards of need established under the State

17 program funded under part A of title IV of the So18 cial Security Act,

19 except that where a State ratably reduces its AFDC or

20 State program payments, the Bureau shall reduce general

21 assistance payments in such State by the same percentage

22 as the State has reduced the AFDC or State program pay23 ment.’’.

24 (l) The Internal Revenue Code of 1986 (26 U.S.C.

25 1 et seq.) is amended—
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1 (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by

2 striking all that follows ‘‘agency as’’ and inserting

3 ‘‘being eligible for financial assistance under part A

4 of title IV of the Social Security Act and as having

5 continually received such financial assistance during

6 the 90-day period which immediately precedes the

7 date on which such individual is hired by the em8 ployer.’’;

9 (2) in section 3304(a)(16) (26 U.S.C.

10 3304(a)(16)), by striking ‘‘eligibility for aid or serv11 ices,’’ and all that follows through ‘‘children ap12 proved’’ and inserting ‘‘eligibility for assistance, or

13 the amount of such assistance, under a State pro14 gram funded’’;

15 (3) in section 6103(l)(7)(D)(i) (26 U.S.C.

16 6103(l)(7)(D)(i)), by striking ‘‘aid to families with

17 dependent children provided under a State plan ap18 proved’’ and inserting ‘‘a State program funded’’;

19 (4) in section 6103(l)(10) (26 U.S.C.

20 6103(l)(10))—

21 (A) by striking ‘‘(c) or (d)’’ each place it

22 appears and inserting ‘‘(c), (d), or (e)’’; and

23 (B) by adding at the end of subparagraph

24 (B) the following new sentence: ‘‘Any return in25 formation disclosed with respect to section
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1 6402(e) shall only be disclosed to officers and

2 employees of the State agency requesting such

3 information.’’;

4 (5) in section 6103(p)(4) (26 U.S.C.

5 6103(p)(4)), in the matter preceding subparagraph

6 (A)—

7 (A) by striking ‘‘(5), (10)’’ and inserting

8 ‘‘(5)’’; and

9 (B) by striking ‘‘(9), or (12)’’ and insert10 ing ‘‘(9), (10), or (12)’’;

11 (6) in section 6334(a)(11)(A) (26 U.S.C.

12 6334(a)(11)(A)), by striking ‘‘(relating to aid to

13 families with dependent children)’’;

14 (7) in section 6402 (26 U.S.C. 6402)—

15 (A) in subsection (a), by striking ‘‘(c) and

16 (d)’’ and inserting ‘‘(c), (d), and (e)’’;

17 (B) by redesignating subsections (e)

18 through (i) as subsections (f) through (j), re19 spectively; and

20 (C) by inserting after subsection (d) the

21 following:

22 ‘‘(e) COLLECTION OF OVERPAYMENTS UNDER TITLE

23 IV–A OF THE SOCIAL SECURITY ACT.—The amount of

24 any overpayment to be refunded to the person making the

25 overpayment shall be reduced (after reductions pursuant
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1 to subsections (c) and (d), but before a credit against fu2 ture liability for an internal revenue tax) in accordance

3 with section 405(e) of the Social Security Act (concerning

4 recovery of overpayments to individuals under State plans

5 approved under part A of title IV of such Act).’’; and

6 (8) in section 7523(b)(3)(C) (26 U.S.C.

7 7523(b)(3)(C)), by striking ‘‘aid to families with de8 pendent children’’ and inserting ‘‘assistance under a

9 State program funded under part A of title IV of the

10 Social Security Act’’.

11 (m) Section 3(b) of the Wagner-Peyser Act (29

12 U.S.C. 49b(b)) is amended by striking ‘‘State plan ap13 proved under part A of title IV’’ and inserting ‘‘State pro14 gram funded under part A of title IV’’.

15 (n) The Job Training Partnership Act (29 U.S.C.

16 1501 et seq.) is amended—

17 (1) in section 4(29)(A)(i) (29 U.S.C.

18 1503(29)(A)(i)), by striking ‘‘(42 U.S.C. 601 et

19 seq.)’’;

20 (2) in section 106(b)(6)(C) (29 U.S.C.

21 1516(b)(6)(C)), by striking ‘‘State aid to families

22 with dependent children records,’’ and inserting

23 ‘‘records collected under the State program funded

24 under part A of title IV of the Social Security Act,’’;
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1 (3) in section 121(b)(2) (29 U.S.C.

2 1531(b)(2))—

3 (A) by striking ‘‘the JOBS program’’ and

4 inserting ‘‘the work activities required under

5 title IV of the Social Security Act’’; and

6 (B) by striking the second sentence;

7 (4) in section 123(c) (29 U.S.C. 1533(c))—

8 (A) in paragraph (1)(E), by repealing

9 clause (vi); and

10 (B) in paragraph (2)(D), by repealing

11 clause (v);

12 (5) in section 203(b)(3) (29 U.S.C.

13 1603(b)(3)), by striking ‘‘, including recipients

14 under the JOBS program’’;

15 (6) in subparagraphs (A) and (B) of section

16 204(a)(1) (29 U.S.C. 1604(a)(1) (A) and (B)), by

17 striking ‘‘(such as the JOBS program)’’ each place

18 it appears;

19 (7) in section 205(a) (29 U.S.C. 1605(a)), by

20 striking paragraph (4) and inserting the following:

21 ‘‘(4) the portions of title IV of the Social Secu22 rity Act relating to work activities;’’;

23 (8) in section 253 (29 U.S.C. 1632)—

24 (A) in subsection (b)(2), by repealing sub25 paragraph (C); and
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1 (B) in paragraphs (1)(B) and (2)(B) of

2 subsection (c), by striking ‘‘the JOBS program

3 or’’ each place it appears;

4 (9) in section 264 (29 U.S.C. 1644)—

5 (A) in subparagraphs (A) and (B) of sub6 section (b)(1), by striking ‘‘(such as the JOBS

7 program)’’ each place it appears; and

8 (B) in subparagraphs (A) and (B) of sub9 section (d)(3), by striking ‘‘and the JOBS pro10 gram’’ each place it appears;

11 (10) in section 265(b) (29 U.S.C. 1645(b)), by

12 striking paragraph (6) and inserting the following:

13 ‘‘(6) the portion of title IV of the Social Secu14 rity Act relating to work activities;’’;

15 (11) in the second sentence of section 429(e)

16 (29 U.S.C. 1699(e)), by striking ‘‘and shall be in an

17 amount that does not exceed the maximum amount

18 that may be provided by the State pursuant to sec19 tion 402(g)(1)(C) of the Social Security Act (42

20 U.S.C. 602(g)(1)(C))’’;

21 (12) in section 454(c) (29 U.S.C. 1734(c)), by

22 striking ‘‘JOBS and’’;

23 (13) in section 455(b) (29 U.S.C. 1735(b)), by

24 striking ‘‘the JOBS program,’’;
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1 (14) in section 501(1) (29 U.S.C. 1791(1)), by

2 striking ‘‘aid to families with dependent children

3 under part A of title IV of the Social Security Act

4 (42 U.S.C. 601 et seq.)’’ and inserting ‘‘assistance

5 under the State program funded under part A of

6 title IV of the Social Security Act’’;

7 (15) in section 506(1)(A) (29 U.S.C.

8 1791e(1)(A)), by striking ‘‘aid to families with de9 pendent children’’ and inserting ‘‘assistance under

10 the State program funded’’;

11 (16) in section 508(a)(2)(A) (29 U.S.C.

12 1791g(a)(2)(A)), by striking ‘‘aid to families with

13 dependent children’’ and inserting ‘‘assistance under

14 the State program funded’’; and

15 (17) in section 701(b)(2)(A) (29 U.S.C.

16 1792(b)(2)(A))—

17 (A) in clause (v), by striking the semicolon

18 and inserting ‘‘; and’’; and

19 (B) by striking clause (vi).

20 (o) Section 3803(c)(2)(C)(iv) of title 31, United

21 States Code, is amended to read as follows:

22 ‘‘(iv) assistance under a State pro23 gram funded under part A of title IV of

24 the Social Security Act’’.
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1 (p) Section 2605(b)(2)(A)(i) of the Low-Income

2 Home Energy Assistance Act of 1981 (42 U.S.C.

3 8624(b)(2)(A)(i)) is amended to read as follows:

4 ‘‘(i) assistance under the State pro5 gram funded under part A of title IV of

6 the Social Security Act;’’.

7 (q) Section 303(f)(2) of the Family Support Act of

8 1988 (42 U.S.C. 602 note) is amended—

9 (1) by striking ‘‘(A)’’; and

10 (2) by striking subparagraphs (B) and (C).

11 (r) The Balanced Budget and Emergency Deficit

12 Control Act of 1985 (2 U.S.C. 900 et seq.) is amended—

13 (1) in the first section 255(h) (2 U.S.C.

14 905(h)), by striking ‘‘Aid to families with dependent

15 children (75–0412–0–1–609);’’ and inserting ‘‘Block

16 grants to States for temporary assistance for needy

17 families;’’; and

18 (2) in section 256 (2 U.S.C. 906)—

19 (A) by striking subsection (k); and

20 (B) by redesignating subsection (l) as sub21 section (k).

22 (s) The Immigration and Nationality Act (8 U.S.C.

23 1101 et seq.) is amended—

24 (1) in section 210(f) (8 U.S.C. 1160(f)), by

25 striking ‘‘aid under a State plan approved under’’
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1 each place it appears and inserting ‘‘assistance

2 under a State program funded under’’;

3 (2) in section 245A(h) (8 U.S.C. 1255a(h))—

4 (A) in paragraph (1)(A)(i), by striking

5 ‘‘program of aid to families with dependent chil6 dren’’ and inserting ‘‘State program of assist7 ance’’; and

8 (B) in paragraph (2)(B), by striking ‘‘aid

9 to families with dependent children’’ and insert10 ing ‘‘assistance under a State program funded

11 under part A of title IV of the Social Security

12 Act’’; and

13 (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)),

14 by striking ‘‘State plan approved’’ and inserting

15 ‘‘State program funded’’.

16 (t) Section 640(a)(4)(B)(i) of the Head Start Act (42

17 U.S.C. 9835(a)(4)(B)(i)) is amended by striking ‘‘pro18 gram of aid to families with dependent children under a

19 State plan approved’’ and inserting ‘‘State program of as20 sistance funded’’.

21 (u) Section 9 of the Act of April 19, 1950 (64 Stat.

22 47, chapter 92; 25 U.S.C. 639) is repealed.

23 (v) Subparagraph (E) of section 213(d)(6) of the

24 School-To-Work Opportunities Act of 1994 (20 U.S.C.

25 6143(d)(6)) is amended to read as follows:
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1 ‘‘(E) part A of title IV of the Social Secu2 rity Act (42 U.S.C. 601 et seq.) relating to

3 work activities;’’.

4 (w) Section 552a(a)(8)(B)(iv)(III) of title 5, United

5 States Code, is amended by striking ‘‘section 464 or 1137

6 of the Social Security Act’’ and inserting ‘‘section 404(e),

7 464, or 1137 of the Social Security Act.’’.

8 SEC. 111. DEVELOPMENT OF PROTOTYPE OF COUNTER9 FEIT-RESISTANT SOCIAL SECURITY CARD RE10 QUIRED.

11 (a) DEVELOPMENT.—

12 (1) IN GENERAL.—The Commissioner of Social

13 Security (in this section referred to as the ‘‘Commis14 sioner’’) shall, in accordance with this section, de15 velop a prototype of a counterfeit-resistant social se16 curity card. Such prototype card shall—

17 (A) be made of a durable, tamper-resistant

18 material such as plastic or polyester,

19 (B) employ technologies that provide secu20 rity features, such as magnetic stripes,

21 holograms, and integrated circuits, and

22 (C) be developed so as to provide individ23 uals with reliable proof of citizenship or legal

24 resident alien status.
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1 (2) ASSISTANCE BY ATTORNEY GENERAL.—The

2 Attorney General of the United States shall provide

3 such information and assistance as the Commis4 sioner deems necessary to enable the Commissioner

5 to comply with this section.

6 (b) STUDY AND REPORT.—

7 (1) IN GENERAL.—The Commissioner shall con8 duct a study and issue a report to Congress which

9 examines different methods of improving the social

10 security card application process.

11 (2) ELEMENTS OF STUDY.—The study shall in12 clude an evaluation of the cost and work load impli13 cations of issuing a counterfeit-resistant social secu14 rity card for all individuals over a 3-, 5-, and 10-

15 year period. The study shall also evaluate the fea16 sibility and cost implications of imposing a user fee

17 for replacement cards and cards issued to individ18 uals who apply for such a card prior to the sched19 uled 3-, 5-, and 10-year phase-in options.

20 (3) DISTRIBUTION OF REPORT.—The Commis21 sioner shall submit copies of the report described in

22 this subsection along with a facsimile of the proto23 type card as described in subsection (a) to the Com24 mittees on Ways and Means and Judiciary of the

25 House of Representatives and the Committees on Fi-
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1 nance and Judiciary of the Senate within 1 year

2 after the date of the enactment of this Act.

3 SEC. 112. DISCLOSURE OF RECEIPT OF FEDERAL FUNDS.

4 (a) IN GENERAL.—Whenever an organization that

5 accepts Federal funds under this Act or the amendments

6 made by this Act makes any communication that in any

7 way intends to promote public support or opposition to

8 any policy of a Federal, State, or local government

9 through any broadcasting station, newspaper, magazine,

10 outdoor advertising facility, direct mailing, or any other

11 type of general public advertising, such communication

12 shall state the following: ‘‘This was prepared and paid for

13 by an organization that accepts taxpayer dollars.’’.

14 (b) FAILURE TO COMPLY.—If an organization makes

15 any communication described in subsection (a) and fails

16 to provide the statement required by that subsection, such

17 organization shall be ineligible to receive Federal funds

18 under this Act or the amendments made by this Act.

19 (c) DEFINITION.—For purposes of this section, the

20 term ‘‘organization’’ means an organization described in

21 section 501(c) of the Internal Revenue Code of 1986.

22 (d) EFFECTIVE DATES.—This section shall take ef23 fect—

24 (1) with respect to printed communications 1

25 year after the date of enactment of this Act; and
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1 (2) with respect to any other communication on

2 the date of enactment of this Act.

3 SEC. 113. MODIFICATIONS TO THE JOB OPPORTUNITIES

4 FOR CERTAIN LOW-INCOME INDIVIDUALS

5 PROGRAM.

6 Section 505 of the Family Support Act of 1988 (42

7 U.S.C. 1315 note) is amended—

8 (1) in the heading, by striking ‘‘DEMONSTRA9 TION’’;

10 (2) by striking ‘‘demonstration’’ each place such

11 term appears;

12 (3) in subsection (a), by striking ‘‘in each of

13 fiscal years’’ and all that follows through ‘‘10’’ and

14 inserting ‘‘shall enter into agreements with’’;

15 (4) in subsection (b)(3), by striking ‘‘aid to

16 families with dependent children under part A of

17 title IV of the Social Security Act’’ and inserting

18 ‘‘assistance under the program funded part A of title

19 IV of the Social Security Act of the State in which

20 the individual resides’’;

21 (5) in subsection (c)—

22 (A) in paragraph (1)(C), by striking ‘‘aid

23 to families with dependent children under part

24 A of title IV of the Social Security Act’’ and in25 serting ‘‘assistance under a State program
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1 funded part A of title IV of the Social Security

2 Act’’;

3 (B) in paragraph (2), by striking ‘‘aid to

4 families with dependent children under title IV

5 of such Act’’ and inserting ‘‘assistance under a

6 State program funded part A of title IV of the

7 Social Security Act’’;

8 (6) in subsection (d), by striking ‘‘job opportu9 nities and basic skills training program (as provided

10 for under title IV of the Social Security Act)’’ and

11 inserting ‘‘the State program funded under part A

12 of title IV of the Social Security Act’’; and

13 (7) by striking subsections (e) through (g) and

14 inserting the following:

15 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the

16 purpose of conducting projects under this section, there

17 is authorized to be appropriated an amount not to exceed

18 $25,000,000 for any fiscal year.’’.

19 SEC. 114. SECRETARIAL SUBMISSION OF LEGISLATIVE PRO20 POSAL FOR TECHNICAL AND CONFORMING

21 AMENDMENTS.

22 Not later than 90 days after the date of the enact23 ment of this Act, the Secretary of Health and Human

24 Services and the Commissioner of Social Security, in con25 sultation, as appropriate, with the heads of other Federal
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1 agencies, shall submit to the appropriate committees of

2 Congress a legislative proposal proposing such technical

3 and conforming amendments as are necessary to bring the

4 law into conformity with the policy embodied in this title.

5 SEC. 115. EFFECTIVE DATE; TRANSITION RULE.

6 (a) EFFECTIVE DATES.—

7 (1) IN GENERAL.—Except as otherwise pro8 vided in this title, this title and the amendments

9 made by this title shall take effect on July 1, 1997.

10 (2) DELAYED EFFECTIVE DATE FOR CERTAIN

11 PROVISIONS.—Notwithstanding any other provision

12 of this section, paragraphs (2), (3), (4), (5), (8), and

13 (10) of section 409(a) and section 411(a) of the So14 cial Security Act (as added by the amendment made

15 by section 103(a) of this Act) shall not take effect

16 with respect to a State until, and shall apply only

17 with respect to conduct that occurs on or after, the

18 later of—

19 (A) July 1, 1997; or

20 (B) the date that is 6 months after the

21 date the Secretary of Health and Human Serv22 ices receives from the State a plan described in

23 section 402(a) of the Social Security Act (as

24 added by such amendment).
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1 (b) TRANSITION RULES.—Effective on the date of

2 the enactment of this Act:

3 (1) STATE OPTION TO ACCELERATE EFFECTIVE

4 DATE.—

5 (A) IN GENERAL.—If the Secretary of

6 Health and Human Services receives from a

7 State a plan described in section 402(a) of the

8 Social Security Act (as added by the amend9 ment made by section 103(a) of this Act),

10 then—

11 (i) on and after the date of such re12 ceipt—

13 (I) except as provided in clause

14 (ii), this title and the amendments

15 made by this title shall apply with re16 spect to the State; and

17 (II) the State shall be considered

18 an eligible State for purposes of part

19 A of title IV of the Social Security

20 Act (as in effect pursuant to the

21 amendment made by such section

22 103(a)); and

23 (ii) during the period that begins on

24 the date of such receipt and ends on June
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1 30, 1997, there shall remain in effect with

2 respect to the State—

3 (I) section 403(h) of the Social

4 Security Act (as in effect on Septem5 ber 30, 1995); and

6 (II) all State reporting require7 ments under parts A and F of title IV

8 of the Social Security Act (as in effect

9 on September 30, 1995), modified by

10 the Secretary as appropriate, taking

11 into account the State program under

12 part A of title IV of the Social Secu13 rity Act (as in effect pursuant to the

14 amendment made by such section

15 103(a)).

16 (B) LIMITATIONS ON FEDERAL OBLIGA17 TIONS.—

18 (i) UNDER AFDC PROGRAM.—The

19 total obligations of the Federal Govern20 ment to a State under part A of title IV

21 of the Social Security Act (as in effect on

22 September 30, 1995) with respect to ex23 penditures in fiscal year 1997 shall not ex24 ceed an amount equal to the State family

25 assistance grant.
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1 (ii) UNDER TEMPORARY FAMILY AS2 SISTANCE PROGRAM.—Notwithstanding

3 section 403(a)(1) of the Social Security

4 Act (as in effect pursuant to the amend5 ment made by section 103(a) of this Act),

6 the total obligations of the Federal Govern7 ment to a State under such section

8 403(a)(1)—

9 (I) for fiscal year 1996, shall be

10 an amount equal to—

11 (aa) the State family assist12 ance grant; multiplied by

(bb) 1 13 ⁄366 of the number of

14 days during the period that be15 gins on the date the Secretary of

16 Health and Human Services first

17 receives from the State a plan

18 described in section 402(a) of the

19 Social Security Act (as added by

20 the amendment made by section

21 103(a) of this Act) and ends on

22 September 30, 1996; and

23 (II) for fiscal year 1997, shall be

24 an amount equal to the lesser of—
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1 (aa) the amount (if any) by

2 which the State family assistance

3 grant exceeds the total obliga4 tions of the Federal Government

5 to the State under part A of title

6 IV of the Social Security Act (as

7 in effect on September 30, 1995)

8 with respect to expenditures in

9 fiscal year 1997; or

10 (bb) the State family assistance grant, multiplied by 1 11 ⁄365 of

12 the number of days during the

13 period that begins on October 1,

14 1996, or the date the Secretary

15 of Health and Human Services

16 first receives from the State a

17 plan described in section 402(a)

18 of the Social Security Act (as

19 added by the amendment made

20 by section 103(a) of this Act),

21 whichever is later, and ends on

22 September 30, 1997.

23 (iii) CHILD CARE OBLIGATIONS EX24 CLUDED IN DETERMINING FEDERAL AFDC

25 OBLIGATIONS.—As used in this subpara-
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1 graph, the term ‘‘obligations of the Federal

2 Government to the State under part A of

3 title IV of the Social Security Act’’ does

4 not include any obligation of the Federal

5 Government with respect to child care ex6 penditures by the State.

7 (C) SUBMISSION OF STATE PLAN FOR FIS8 CAL YEAR 1996 OR 1997 DEEMED ACCEPTANCE

9 OF GRANT LIMITATIONS AND FORMULA AND

10 TERMINATION OF AFDC ENTITLEMENT.—The

11 submission of a plan by a State pursuant to

12 subparagraph (A) is deemed to constitute—

13 (i) the State’s acceptance of the grant

14 reductions under subparagraph (B) (in15 cluding the formula for computing the

16 amount of the reduction); and

17 (ii) the termination of any entitlement

18 of any individual or family to benefits or

19 services under the State AFDC program.

20 (D) DEFINITIONS.—As used in this para21 graph:

22 (i) STATE AFDC PROGRAM.—The term

23 ‘‘State AFDC program’’ means the State

24 program under parts A and F of title IV
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1 of the Social Security Act (as in effect on

2 September 30, 1995).

3 (ii) STATE.—The term ‘‘State’’ means

4 the 50 States and the District of Colum5 bia.

6 (iii) STATE FAMILY ASSISTANCE

7 GRANT.—The term ‘‘State family assist8 ance grant’’ means the State family assist9 ance grant (as defined in section

10 403(a)(1)(B) of the Social Security Act, as

11 added by the amendment made by section

12 103(a) of this Act).

13 (2) CLAIMS, ACTIONS, AND PROCEEDINGS.—

14 The amendments made by this title shall not apply

15 with respect to—

16 (A) powers, duties, functions, rights,

17 claims, penalties, or obligations applicable to

18 aid, assistance, or services provided before the

19 effective date of this title under the provisions

20 amended; and

21 (B) administrative actions and proceedings

22 commenced before such date, or authorized be23 fore such date to be commenced, under such

24 provisions.
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1 (3) CLOSING OUT ACCOUNT FOR THOSE PRO2 GRAMS TERMINATED OR SUBSTANTIALLY MODIFIED

3 BY THIS TITLE.—In closing out accounts, Federal

4 and State officials may use scientifically acceptable

5 statistical sampling techniques. Claims made with

6 respect to State expenditures under a State plan ap7 proved under part A of title IV of the Social Secu8 rity Act (as in effect on September 30, 1995) with

9 respect to assistance or services provided on or be10 fore September 30, 1995, shall be treated as claims

11 with respect to expenditures during fiscal year 1995

12 for purposes of reimbursement even if payment was

13 made by a State on or after October 1, 1995. Each

14 State shall complete the filing of all claims under the

15 State plan (as so in effect) within 2 years after the

16 date of the enactment of this Act. The head of each

17 Federal department shall—

18 (A) use the single audit procedure to re19 view and resolve any claims in connection with

20 the close out of programs under such State

21 plans; and

22 (B) reimburse States for any payments

23 made for assistance or services provided during

24 a prior fiscal year from funds for fiscal year
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1 1995, rather than from funds authorized by

2 this title.

3 (4) CONTINUANCE IN OFFICE OF ASSISTANT

4 SECRETARY FOR FAMILY SUPPORT.—The individual

5 who, on the day before the effective date of this title,

6 is serving as Assistant Secretary for Family Support

7 within the Department of Health and Human Serv8 ices shall, until a successor is appointed to such po9 sition—

10 (A) continue to serve in such position; and

11 (B) except as otherwise provided by law—

12 (i) continue to perform the functions

13 of the Assistant Secretary for Family Sup14 port under section 417 of the Social Secu15 rity Act (as in effect before such effective

16 date); and

17 (ii) have the powers and duties of the

18 Assistant Secretary for Family Support

19 under section 416 of the Social Security

20 Act (as in effect pursuant to the amend21 ment made by section 103(a) of this Act).

22 (c) TERMINATION OF ENTITLEMENT UNDER AFDC

23 PROGRAM.—Effective October 1, 1996, no individual or

24 family shall be entitled to any benefits or services under

25 any State plan approved under part A or F of title IV
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1 of the Social Security Act (as in effect on September 30,

2 1995).

3 TITLE II—SUPPLEMENTAL

4 SECURITY INCOME

5 SEC. 200. REFERENCE TO SOCIAL SECURITY ACT.

6 Except as otherwise specifically provided, wherever in

7 this title an amendment is expressed in terms of an

8 amendment to or repeal of a section or other provision,

9 the reference shall be considered to be made to that sec10 tion or other provision of the Social Security Act.

11 Subtitle A—Eligibility Restrictions

12 SEC. 201. DENIAL OF SSI BENEFITS FOR 10 YEARS TO INDI13 VIDUALS FOUND TO HAVE FRAUDULENTLY

14 MISREPRESENTED RESIDENCE IN ORDER TO

15 OBTAIN BENEFITS SIMULTANEOUSLY IN 2 OR

16 MORE STATES.

17 (a) IN GENERAL.—Section 1611(e) (42 U.S.C.

18 1382(e)), as amended by section 105(b)(4) of the Contract

19 with America Advancement Act of 1996, is amended by

20 redesignating paragraph (5) as paragraph (3) and by add21 ing at the end the following new paragraph:

22 ‘‘(4)(A) No person shall be considered an eligible in23 dividual or eligible spouse for purposes of this title during

24 the 10-year period that begins on the date the person is

25 convicted in Federal or State court of having made a
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1 fraudulent statement or representation with respect to the

2 place of residence of the person in order to receive assist3 ance simultaneously from 2 or more States under pro4 grams that are funded under title IV, title XV, title XIX,

5 or the Food Stamp Act of 1977, or benefits in 2 or more

6 States under the supplemental security income program

7 under this title.

8 ‘‘(B) As soon as practicable after the conviction of

9 a person in a Federal or State court as described in sub10 paragraph (A), an official of such court shall notify the

11 Commissioner of such conviction.’’.

12 (b) EFFECTIVE DATE.—The amendment made by

13 this section shall take effect on the date of the enactment

14 of this Act.

15 SEC. 202. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS

16 AND PROBATION AND PAROLE VIOLATORS.

17 (a) IN GENERAL.—Section 1611(e) (42 U.S.C.

18 1382(e)), as amended by section 201(a), is amended by

19 adding at the end the following new paragraph:

20 ‘‘(5) No person shall be considered an eligible individ21 ual or eligible spouse for purposes of this title with respect

22 to any month if during such month the person is—

23 ‘‘(A) fleeing to avoid prosecution, or custody or

24 confinement after conviction, under the laws of the

25 place from which the person flees, for a crime, or an
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1 attempt to commit a crime, which is a felony under

2 the laws of the place from which the person flees, or

3 which, in the case of the State of New Jersey, is a

4 high misdemeanor under the laws of such State; or

5 ‘‘(B) violating a condition of probation or pa6 role imposed under Federal or State law.’’.

7 (b) EXCHANGE OF INFORMATION.—Section 1611(e)

8 (42 U.S.C. 1382(e)), as amended by section 201(a) and

9 subsection (a), is amended by adding at the end the follow10 ing new paragraph:

11 ‘‘(6) Notwithstanding any other provision of law

12 (other than section 6103 of the Internal Revenue Code

13 of 1986), the Commissioner shall furnish any Federal,

14 State, or local law enforcement officer, upon the written

15 request of the officer, with the current address, Social Se16 curity number, and photograph (if applicable) of any re17 cipient of benefits under this title, if the officer furnishes

18 the Commissioner with the name of the recipient, and

19 other identifying information as reasonably required by

20 the Commissioner to establish the unique identity of the

21 recipient, and notifies the Commissioner that—

22 ‘‘(A) the recipient—

23 ‘‘(i) is described in subparagraph (A) or

24 (B) of paragraph (5); or
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1 ‘‘(ii) has information that is necessary for

2 the officer to conduct the officer’s official du3 ties; and

4 ‘‘(B) the location or apprehension of the recipi5 ent is within the officer’s official duties.’’.

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

7 this section shall take effect on the date of the enactment

8 of this Act.

9 SEC. 203. TREATMENT OF PRISONERS.

10 (a) IMPLEMENTATION OF PROHIBITION AGAINST

11 PAYMENT OF BENEFITS TO PRISONERS.—

12 (1) IN GENERAL.—Section 1611(e)(1) (42

13 U.S.C. 1382(e)(1)) is amended by adding at the end

14 the following new subparagraph:

15 ‘‘(I)(i) The Commissioner shall enter into a contract,

16 with any interested State or local institution referred to

17 in subparagraph (A), under which—

18 ‘‘(I) the institution shall provide to the Com19 missioner, on a monthly basis, the names, social se20 curity account numbers, dates of birth, and such

21 other identifying information concerning the inmates

22 of the institution as the Commissioner may require

23 for the purpose of carrying out paragraph (1); and

24 ‘‘(II) the Commissioner shall pay to any such

25 institution, with respect to each inmate of the insti-
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1 tution who is eligible for a benefit under this title for

2 the month preceding the first month throughout

3 which such inmate is in such institution and be4 comes ineligible for such benefit (or becomes eligible

5 only for a benefit payable at a reduced rate) as a re6 sult of the application of this paragraph, an amount

7 not to exceed $400 if the institution furnishes the

8 information described in subclause (I) to the Com9 missioner within 30 days after such individual be10 comes an inmate of such institution, or an amount

11 not to exceed $200 if the institution furnishes such

12 information after 30 days after such date but within

13 90 days after such date.

14 ‘‘(ii) The provisions of section 552a of title 5, United

15 States Code, shall not apply to any contract entered into

16 under clause (i) or to information exchanged pursuant to

17 such contract.’’.

18 (2) CONFORMING OASDI AMENDMENTS.—Sec19 tion 202(x)(3) (42 U.S.C. 402(x)(3)) is amended—

20 (A) by inserting ‘‘(A)’’ after ‘‘(3)’’; and

21 (B) by adding at the end the following new

22 subparagraph:

23 ‘‘(B)(i) The Commissioner shall enter into a contract,

24 with any interested State or local institution described in

25 clause (i) or (ii) of paragraph (1)(A) the primary purpose
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1 of which is to confine individuals as described in para2 graph (1)(A), under which—

3 ‘‘(I) the institution shall provide to the Com4 missioner, on a monthly basis, the names, social se5 curity account numbers, dates of birth, and such

6 other identifying information concerning the individ7 uals confined in the institution as the Commissioner

8 may require for the purpose of carrying out para9 graph (1); and

10 ‘‘(II) the Commissioner shall pay to any such

11 institution, with respect to each individual who is en12 titled to a benefit under this title for the month pre13 ceding the first month throughout which such indi14 vidual is confined in such institution as described in

15 paragraph (1)(A), an amount not to exceed $400 if

16 the institution furnishes the information described in

17 subclause (I) to the Commissioner within 30 days

18 after the date such individual’s confinement in such

19 institution begins, or an amount not to exceed $200

20 if the institution furnishes such information after 30

21 days after such date but within 90 days after such

22 date.

23 ‘‘(ii) The provisions of section 552a of title 5, United

24 States Code, shall not apply to any contract entered into
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1 under clause (i) or to information exchanged pursuant to

2 such contract.’’.

3 (b) DENIAL OF SSI BENEFITS FOR 10 YEARS TO A

4 PERSON FOUND TO HAVE FRAUDULENTLY OBTAINED

5 SSI BENEFITS WHILE IN PRISON.—

6 (1) IN GENERAL.—Section 1611(e)(1) (42

7 U.S.C. 1382(e)(1)), as amended by subsection

8 (a)(1), is amended by adding at the end the follow9 ing new subparagraph:

10 ‘‘(J) In any case in which the Commissioner of Social

11 Security finds that a person has made a fraudulent state12 ment or representation in order to obtain or to continue

13 to receive benefits under this title while being an inmate

14 in a penal institution, such person shall not be considered

15 an eligible individual or eligible spouse for any month end16 ing during the 10-year period beginning on the date on

17 which such person ceases being such an inmate.’’.

18 (2) EFFECTIVE DATE.—The amendment made

19 by this subsection shall apply with respect to state20 ments or representations made on or after the date

21 of the enactment of this Act.

22 (c) ELIMINATION OF OASDI REQUIREMENT THAT

23 CONFINEMENT STEM FROM CRIME PUNISHABLE BY IM24 PRISONMENT FOR MORE THAN 1 YEAR.—
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1 (1) IN GENERAL.—Section 202(x)(1)(A) (42

2 U.S.C. 402(x)(1)(A)) is amended—

3 (A) in the matter preceding clause (i), by

4 striking ‘‘during’’ and inserting ‘‘throughout’’;

5 (B) in clause (i), by striking ‘‘pursuant’’

6 and all that follows through ‘‘imposed’’; and

7 (C) in clause (ii)(I), by striking ‘‘an of8 fense punishable by imprisonment for more

9 than 1 year’’ and inserting ‘‘a criminal of10 fense’’.

11 (2) EFFECTIVE DATE.—The amendments made

12 by this subsection shall be effective with respect to

13 benefits payable for months beginning more than

14 180 days after the date of the enactment of this Act.

15 (d) STUDY OF OTHER POTENTIAL IMPROVEMENTS IN

16 THE COLLECTION OF INFORMATION RESPECTING PUBLIC

17 INMATES.—

18 (1) STUDY.—The Commissioner of Social Secu19 rity shall conduct a study of the desirability, feasibil20 ity, and cost of—

21 (A) establishing a system under which

22 Federal, State, and local courts would furnish

23 to the Commissioner such information respect24 ing court orders by which individuals are con25 fined in jails, prisons, or other public penal,
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1 correctional, or medical facilities as the Com2 missioner may require for the purpose of carry3 ing out sections 202(x) and 1611(e)(1) of the

4 Social Security Act; and

5 (B) requiring that State and local jails,

6 prisons, and other institutions that enter into

7 contracts with the Commissioner under section

8 202(x)(3)(B) or 1611(e)(1)(I) of the Social Se9 curity Act furnish the information required by

10 such contracts to the Commissioner by means

11 of an electronic or other sophisticated data ex12 change system.

13 (2) REPORT.—Not later than 1 year after the

14 date of the enactment of this Act, the Commissioner

15 of Social Security shall submit a report on the re16 sults of the study conducted pursuant to this sub17 section to the Committee on Finance of the Senate

18 and the Committee on Ways and Means of the

19 House of Representatives.

20 SEC. 204. EFFECTIVE DATE OF APPLICATION FOR BENE21 FITS.

22 (a) IN GENERAL.—Subparagraph (A) of section

23 1611(c)(7) (42 U.S.C. 1382(c)(7)) is amended to read as

24 follows:
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1 ‘‘(A) the first day of the month following the

2 date such application is filed, or’’.

3 (b) CONFORMING AMENDMENTS.—

4 (1) Section 1614(b) (42 U.S.C. 1382c(b)) is

5 amended by striking ‘‘at the time the application or

6 request is filed’’ and inserting ‘‘on the first day of

7 the month following the date the application or re8 quest is filed’’.

9 (2) Section 1631(g)(3) (42 U.S.C. 1382j(g)(3))

10 is amended by inserting ‘‘following the month’’ after

11 ‘‘beginning with the month’’.

12 (c) EFFECTIVE DATE.—

13 (1) IN GENERAL.—The amendments made by

14 this section shall apply to applications for benefits

15 under title XVI of the Social Security Act filed on

16 or after the date of the enactment of this Act, with17 out regard to whether regulations have been issued

18 to implement such amendments.

19 (2) BENEFITS UNDER TITLE XVI.—For pur20 poses of this subsection, the term ‘‘benefits under

21 title XVI of the Social Security Act’’ includes sup22 plementary payments pursuant to an agreement for

23 Federal administration under section 1616(a) of the

24 Social Security Act, and payments pursuant to an
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1 agreement entered into under section 212(b) of Pub2 lic Law 93–66.

3 Subtitle B—Benefits for Disabled

4 Children

5 SEC. 211. DEFINITION AND ELIGIBILITY RULES.

6 (a) DEFINITION OF CHILDHOOD DISABILITY.—Sec7 tion 1614(a)(3) (42 U.S.C. 1382c(a)(3)), as amended by

8 section 105(b)(1) of the Contract with America Advance9 ment Act of 1996, is amended—

10 (1) in subparagraph (A), by striking ‘‘An indi11 vidual’’ and inserting ‘‘Except as provided in sub12 paragraph (C), an individual’’;

13 (2) in subparagraph (A), by striking ‘‘(or, in

14 the case of an individual under the age of 18, if he

15 suffers from any medically determinable physical or

16 mental impairment of comparable severity)’’;

17 (3) by redesignating subparagraphs (C) through

18 (I) as subparagraphs (D) through (J), respectively;

19 (4) by inserting after subparagraph (B) the fol20 lowing new subparagraph:

21 ‘‘(C) An individual under the age of 18 shall be con22 sidered disabled for the purposes of this title if that indi23 vidual has a medically determinable physical or mental im24 pairment, which results in marked and severe functional

25 limitations, and which can be expected to result in death
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1 or which has lasted or can be expected to last for a contin2 uous period of not less than 12 months. Notwithstanding

3 the preceding sentence, no individual under the age of 18

4 who engages in substantial gainful activity (determined in

5 accordance with regulations prescribed pursuant to sub6 paragraph (E)) may be considered to be disabled.’’; and

7 (5) in subparagraph (F), as redesignated by

8 paragraph (3), by striking ‘‘(D)’’ and inserting

9 ‘‘(E)’’.

10 (b) CHANGES TO CHILDHOOD SSI REGULATIONS.—

11 (1) MODIFICATION TO MEDICAL CRITERIA FOR

12 EVALUATION OF MENTAL AND EMOTIONAL DIS13 ORDERS.—The Commissioner of Social Security

14 shall modify sections 112.00C.2. and

15 112.02B.2.c.(2) of appendix 1 to subpart P of part

16 404 of title 20, Code of Federal Regulations, to

17 eliminate references to maladaptive behavior in the

18 domain of personal/behavorial function.

19 (2) DISCONTINUANCE OF INDIVIDUALIZED

20 FUNCTIONAL ASSESSMENT.—The Commissioner of

21 Social Security shall discontinue the individualized

22 functional assessment for children set forth in sec23 tions 416.924d and 416.924e of title 20, Code of

24 Federal Regulations.
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1 (c) MEDICAL IMPROVEMENT REVIEW STANDARD AS

2 IT APPLIES TO INDIVIDUALS UNDER THE AGE OF 18.—

3 Section 1614(a)(4) (42 U.S.C. 1382(a)(4)) is amended—

4 (1) by redesignating subclauses (I) and (II) of

5 clauses (i) and (ii) of subparagraph (B) as items

6 (aa) and (bb), respectively;

7 (2) by redesignating clauses (i) and (ii) of sub8 paragraphs (A) and (B) as subclauses (I) and (II),

9 respectively;

10 (3) by redesignating subparagraphs (A) through

11 (C) as clauses (i) through (iii), respectively, and by

12 moving their left hand margin 2 ems to the right;

13 (4) by inserting before clause (i) (as redesig14 nated by paragraph (3)) the following new subpara15 graph:

16 ‘‘(A) in the case of an individual who is

17 age 18 or older—’’;

18 (5) at the end of subparagraph (A)(iii) (as re19 designated by paragraphs (3) and (4)), by striking

20 the period and inserting ‘‘; or’’;

21 (6) by inserting after and below subparagraph

22 (A)(iii) (as so redesignated) the following new sub23 paragraph:

24 ‘‘(B) in the case of an individual who is

25 under the age of 18—
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1 ‘‘(i) substantial evidence which dem2 onstrates that there has been medical im3 provement in the individual’s impairment

4 or combination of impairments, and that

5 such impairment or combination of impair6 ments no longer results in marked and se7 vere functional limitations; or

8 ‘‘(ii) substantial evidence which dem9 onstrates that, as determined on the basis

10 of new or improved diagnostic techniques

11 or evaluations, the individual’s impairment

12 or combination of impairments, is not as

13 disabling as it was considered to be at the

14 time of the most recent prior decision that

15 the individual was under a disability or

16 continued to be under a disability, and

17 such impairment or combination of impair18 ments does not result in marked or severe

19 functional limitations; or’’;

20 (7) by redesignating subparagraph (D) as sub21 paragraph (C) and by inserting in such subpara22 graph ‘‘in the case of any individual,’’ before ‘‘sub23 stantial evidence’’; and

24 (8) in the first sentence following subparagraph

25 (C) (as redesignated by paragraph (7)), by—
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1 (A) inserting ‘‘(i)’’ before ‘‘to restore’’; and

2 (B) inserting ‘‘, or (ii) in the case of an in3 dividual under the age of 18, to eliminate or

4 improve the individual’s impairment or com5 bination of impairments so that it no longer re6 sults in marked and severe functional limita7 tions’’ immediately before the period.

8 (d) EFFECTIVE DATES, ETC.—

9 (1) EFFECTIVE DATES.—

10 (A) IN GENERAL.—The provisions of, and

11 amendments made by, subsections (a) and

12 (b)(2) shall apply to applications for benefits

13 under title XVI of the Social Security Act pend14 ing on, or filed on or after, the date of the en15 actment of this Act, without regard to whether

16 regulations have been issued to implement such

17 provisions and amendments.

18 (B) MEDICAL CRITERIA MODIFICATION.—

19 The provisions of, and amendments made by,

20 subsections (b)(1) and (c) shall apply to bene21 fits under title XVI of the Social Security Act

22 for months beginning on or after the date of

23 the enactment of this Act, without regard to

24 whether regulations have been issued to imple25 ment such subsection.
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1 (2) APPLICATION TO CURRENT RECIPIENTS.—

2 (A) ELIGIBILITY DETERMINATIONS.—Dur3 ing the period beginning on the date of the en4 actment of this Act and ending on the date

5 which is 1 year after such date of enactment,

6 the Commissioner of Social Security shall rede7 termine the eligibility of any individual under

8 age 18 who is receiving supplemental security

9 income benefits by reason of disability under

10 title XVI of the Social Security Act as of the

11 date of the enactment of this Act and whose eli12 gibility for such benefits may terminate by rea13 son of the provisions of, or amendments made

14 by, subsections (a) and (b)(2). With respect to

15 any redetermination under this subparagraph—

16 (i) section 1614(a)(4) of the Social

17 Security Act (42 U.S.C. 1382c(a)(4)) shall

18 not apply;

19 (ii) the Commissioner of Social Secu20 rity shall apply the eligibility criteria for

21 new applicants for benefits under title XVI

22 of such Act;

23 (iii) the Commissioner shall give such

24 redetermination priority over all continuing
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1 eligibility reviews and other reviews under

2 such title; and

3 (iv) such redetermination shall be

4 counted as a review or redetermination

5 otherwise required to be made under sec6 tion 208 of the Social Security Independ7 ence and Program Improvements Act of

8 1994 or any other provision of title XVI of

9 the Social Security Act.

10 (B) GRANDFATHER PROVISION.—The pro11 visions of, and amendments made by, sub12 sections (a) and (b)(2), and the redetermination

13 under subparagraph (A), shall only apply with

14 respect to the benefits of an individual de15 scribed in subparagraph (A) for months begin16 ning on or after the date of the redetermination

17 with respect to such individual.

18 (C) NOTICE.—Not later than January 1,

19 1997, the Commissioner of Social Security shall

20 notify an individual described in subparagraph

21 (A) of the provisions of this paragraph.

22 (3) REPORT.—The Commissioner of Social Se23 curity shall report to the Congress regarding the

24 progress made in implementing the provisions of,

25 and amendments made by, this section on child dis-
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1 ability evaluations not later than 180 days after the

2 date of the enactment of this Act.

3 (4) REGULATIONS.—Notwithstanding any other

4 provision of law, the Commissioner of Social Secu5 rity shall submit for review to the committees of ju6 risdiction in the Congress any final regulation per7 taining to the eligibility of individuals under age 18

8 for benefits under title XVI of the Social Security

9 Act at least 45 days before the effective date of such

10 regulation. The submission under this paragraph

11 shall include supporting documentation providing a

12 cost analysis, workload impact, and projections as to

13 how the regulation will effect the future number of

14 recipients under such title.

15 (5) BENEFITS UNDER TITLE XVI.—For pur16 poses of this subsection, the term ‘‘benefits under

17 title XVI of the Social Security Act’’ includes sup18 plementary payments pursuant to an agreement for

19 Federal administration under section 1616(a) of the

20 Social Security Act, and payments pursuant to an

21 agreement entered into under section 212(b) of Pub22 lic Law 93–66.
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1 SEC. 212. ELIGIBILITY REDETERMINATIONS AND CONTINU2 ING DISABILITY REVIEWS.

3 (a) CONTINUING DISABILITY REVIEWS RELATING TO

4 CERTAIN CHILDREN.—Section 1614(a)(3)(H) (42 U.S.C.

5 1382c(a)(3)(H)), as redesignated by section 211(a)(3), is

6 amended—

7 (1) by inserting ‘‘(i)’’ after ‘‘(H)’’; and

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

9 clause:

10 ‘‘(ii)(I) Not less frequently than once every 3 years,

11 the Commissioner shall review in accordance with para12 graph (4) the continued eligibility for benefits under this

13 title of each individual who has not attained 18 years of

14 age and is eligible for such benefits by reason of an im15 pairment (or combination of impairments) which is likely

16 to improve (or, at the option of the Commissioner, which

17 is unlikely to improve).

18 ‘‘(II) A representative payee of a recipient whose case

19 is reviewed under this clause shall present, at the time

20 of review, evidence demonstrating that the recipient is,

21 and has been, receiving treatment, to the extent consid22 ered medically necessary and available, of the condition

23 which was the basis for providing benefits under this title.

24 ‘‘(III) If the representative payee refuses to comply

25 without good cause with the requirements of subclause

26 (II), the Commissioner of Social Security shall, if the
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1 Commissioner determines it is in the best interest of the

2 individual, promptly terminate payment of benefits to the

3 representative payee, and provide for payment of benefits

4 to an alternative representative payee of the individual or,

5 if the interest of the individual under this title would be

6 served thereby, to the individual.

7 ‘‘(IV) Subclause (II) shall not apply to the represent8 ative payee of any individual with respect to whom the

9 Commissioner determines such application would be inap10 propriate or unnecessary. In making such determination,

11 the Commissioner shall take into consideration the nature

12 of the individual’s impairment (or combination of impair13 ments). Section 1631(c) shall not apply to a finding by

14 the Commissioner that the requirements of subclause (II)

15 should not apply to an individual’s representative payee.’’.

16 (b) DISABILITY ELIGIBILITY REDETERMINATIONS

17 REQUIRED FOR SSI RECIPIENTS WHO ATTAIN 18 YEARS

18 OF AGE.—

19 (1) IN GENERAL.—Section 1614(a)(3)(H) (42

20 U.S.C. 1382c(a)(3)(H)), as amended by subsection

21 (a), is amended by adding at the end the following

22 new clause:

23 ‘‘(iii) If an individual is eligible for benefits under this

24 title by reason of disability for the month preceding the
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1 month in which the individual attains the age of 18 years,

2 the Commissioner shall redetermine such eligibility—

3 ‘‘(I) during the 1-year period beginning on the

4 individual’s 18th birthday; and

5 ‘‘(II) by applying the criteria used in determin6 ing the initial eligibility for applicants who are age

7 18 or older.

8 With respect to a redetermination under this clause, para9 graph (4) shall not apply and such redetermination shall

10 be considered a substitute for a review or redetermination

11 otherwise required under any other provision of this sub12 paragraph during that 1-year period.’’.

13 (2) CONFORMING REPEAL.—Section 207 of the

14 Social Security Independence and Program Improve15 ments Act of 1994 (42 U.S.C. 1382 note; 108 Stat.

16 1516) is hereby repealed.

17 (c) CONTINUING DISABILITY REVIEW REQUIRED FOR

18 LOW BIRTH WEIGHT BABIES.—Section 1614(a)(3)(H)

19 (42 U.S.C. 1382c(a)(3)(H)), as amended by subsections

20 (a) and (b), is amended by adding at the end the following

21 new clause:

22 ‘‘(iv)(I) Not later than 12 months after the birth of

23 an individual, the Commissioner shall review in accordance

24 with paragraph (4) the continuing eligibility for benefits

25 under this title by reason of disability of such individual
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1 whose low birth weight is a contributing factor material

2 to the Commissioner’s determination that the individual

3 is disabled.

4 ‘‘(II) A review under subclause (I) shall be considered

5 a substitute for a review otherwise required under any

6 other provision of this subparagraph during that 12-

7 month period.

8 ‘‘(III) A representative payee of a recipient whose

9 case is reviewed under this clause shall present, at the

10 time of review, evidence demonstrating that the recipient

11 is, and has been, receiving treatment, to the extent consid12 ered medically necessary and available, of the condition

13 which was the basis for providing benefits under this title.

14 ‘‘(IV) If the representative payee refuses to comply

15 without good cause with the requirements of subclause

16 (III), the Commissioner of Social Security shall, if the

17 Commissioner determines it is in the best interest of the

18 individual, promptly terminate payment of benefits to the

19 representative payee, and provide for payment of benefits

20 to an alternative representative payee of the individual or,

21 if the interest of the individual under this title would be

22 served thereby, to the individual.

23 ‘‘(V) Subclause (III) shall not apply to the represent24 ative payee of any individual with respect to whom the

25 Commissioner determines such application would be inap-
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1 propriate or unnecessary. In making such determination,

2 the Commissioner shall take into consideration the nature

3 of the individual’s impairment (or combination of impair4 ments). Section 1631(c) shall not apply to a finding by

5 the Commissioner that the requirements of subclause (III)

6 should not apply to an individual’s representative payee.’’.

7 (d) EFFECTIVE DATE.—The amendments made by

8 this section shall apply to benefits for months beginning

9 on or after the date of the enactment of this Act, without

10 regard to whether regulations have been issued to imple11 ment such amendments.

12 SEC. 213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS.

13 (a) DISPOSAL OF RESOURCES FOR LESS THAN FAIR

14 MARKET VALUE.—

15 (1) IN GENERAL.—Section 1613(c) (42 U.S.C.

16 1382b(c)) is amended to read as follows:

17 ‘‘Disposal of Resources for Less Than Fair Market Value

18 ‘‘(c)(1)(A)(i) If an individual who has not attained

19 18 years of age (or any person acting on such individual’s

20 behalf) disposes of resources of the individual for less than

21 fair market value on or after the look-back date specified

22 in clause (ii)(I), the individual is ineligible for benefits

23 under this title for months during the period beginning

24 on the date specified in clause (iii) and equal to the num25 ber of months specified in clause (iv).
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1 ‘‘(ii)(I) The look-back date specified in this subclause

2 is a date that is 36 months before the date specified in

3 subclause (II).

4 ‘‘(II) The date specified in this subclause is the date

5 on which the individual applies for benefits under this title

6 or, if later, the date on which the disposal of the individ7 ual’s resources for less than fair market value occurs.

8 ‘‘(iii) The date specified in this clause is the first day

9 of the first month that follows the month in which the

10 individual’s resources were disposed of for less than fair

11 market value and that does not occur in any other period

12 of ineligibility under this paragraph.

13 ‘‘(iv) The number of months of ineligibility under this

14 clause for an individual shall be equal to—

15 ‘‘(I) the total, cumulative uncompensated value

16 of all the individual’s resources so disposed of on or

17 after the look-back date specified in clause (ii)(I), di18 vided by

19 ‘‘(II) the amount of the maximum monthly ben20 efit payable under section 1611(b) to an eligible in21 dividual for the month in which the date specified in

22 clause (ii)(II) occurs.

23 ‘‘(B) An individual shall not be ineligible for benefits

24 under this title by reason of subparagraph (A) if the Com25 missioner determines that—
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1 ‘‘(i) the individual intended to dispose of the re2 sources at fair market value;

3 ‘‘(ii) the resources were transferred exclusively

4 for a purpose other than to qualify for benefits

5 under this title;

6 ‘‘(iii) all resources transferred for less than fair

7 market value have been returned to the individual;

8 or

9 ‘‘(iv) the denial of eligibility would work an

10 undue hardship on the individual (as determined on

11 the basis of criteria established by the Commissioner

12 in regulations).

13 ‘‘(C) For purposes of this paragraph, in the case of

14 a resource held by an individual in common with another

15 person or persons in a joint tenancy, tenancy in common,

16 or similar arrangement, the resource (or the affected por17 tion of such resource) shall be considered to be disposed

18 of by such individual when any action is taken, either by

19 such individual or by any other person, that reduces or

20 eliminates such individual’s ownership or control of such

21 resource.

22 ‘‘(D)(i) Notwithstanding subparagraph (A), this sub23 section shall not apply to a transfer of a resource to a

24 trust if the portion of the trust attributable to such re25 source is considered a resource available to the individual
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1 pursuant to subsection (e)(3) (or would be so considered,

2 but for the application of subsection (e)(4)).

3 ‘‘(ii) In the case of a trust established by an individ4 ual (within the meaning of subsection (e)(2)(A)), if from

5 such portion of the trust (if any) that is considered a re6 source available to the individual pursuant to subsection

7 (e)(3) (or would be so considered but for the application

8 of subsection (e)(2)) or the residue of such portion upon

9 the termination of the trust—

10 ‘‘(I) there is made a payment other than to or

11 for the benefit of the individual, or

12 ‘‘(II) no payment could under any circumstance

13 be made to the individual,

14 then the payment described in subclause (I) or the fore15 closure of payment described in subclause (II) shall be

16 considered a disposal of resources by the individual subject

17 to this subsection, as of the date of such payment or fore18 closure, respectively.

19 ‘‘(2)(A) At the time an individual (and the individ20 ual’s eligible spouse, if any) applies for benefits under this

21 title, and at the time the eligibility of an individual (and

22 such spouse, if any) for such benefits is redetermined, the

23 Commissioner of Social Security shall—

24 ‘‘(i) inform such individual of the provisions of

25 paragraph (1) providing for a period of ineligibility
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1 for benefits under this title for individuals who make

2 certain dispositions of resources for less than fair

3 market value, and inform such individual that infor4 mation obtained pursuant to clause (ii) will be made

5 available to the State agency administering a State

6 plan approved under title XV or XIX (as provided

7 in subparagraph (B)); and

8 ‘‘(ii) obtain from such individual information

9 which may be used in determining whether or not a

10 period of ineligibility for such benefits would be re11 quired by reason of paragraph (1).

12 ‘‘(B) The Commissioner of Social Security shall make

13 the information obtained under subparagraph (A)(ii)

14 available, on request, to any State agency administering

15 a State plan approved under title XV or XIX.

16 ‘‘(3) For purposes of this subsection—

17 ‘‘(A) the term ‘trust’ includes any legal instru18 ment or device that is similar to a trust; and

19 ‘‘(B) the term ‘benefits under this title’ includes

20 supplementary payments pursuant to an agreement

21 for Federal administration under section 1616(a),

22 and payments pursuant to an agreement entered

23 into under section 212(b) of Public Law 93–66.’’.

24 (2) EFFECTIVE DATE.—The amendment made

25 by this subsection shall be effective with respect to
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1 transfers that occur at least 90 days after the date

2 of the enactment of this Act.

3 (b) TREATMENT OF ASSETS HELD IN TRUST.—

4 (1) TREATMENT AS RESOURCE.—Section 1613

5 (42 U.S.C. 1382) is amended by adding at the end

6 the following new subsection:

7 ‘‘Trusts

8 ‘‘(e)(1) In determining the resources of an individual

9 who has not attained 18 years of age, the provisions of

10 paragraph (3) shall apply to a trust established by such

11 individual.

12 ‘‘(2)(A) For purposes of this subsection, an individual

13 shall be considered to have established a trust if any assets

14 of the individual were transferred to the trust.

15 ‘‘(B) In the case of an irrevocable trust to which the

16 assets of an individual and the assets of any other person

17 or persons were transferred, the provisions of this sub18 section shall apply to the portion of the trust attributable

19 to the assets of the individual.

20 ‘‘(C) This subsection shall apply without regard to—

21 ‘‘(i) the purposes for which the trust is estab22 lished;

23 ‘‘(ii) whether the trustees have or exercise any

24 discretion under the trust;
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1 ‘‘(iii) any restrictions on when or whether dis2 tributions may be made from the trust; or

3 ‘‘(iv) any restrictions on the use of distributions

4 from the trust.

5 ‘‘(3)(A) In the case of a revocable trust, the corpus

6 of the trust shall be considered a resource available to the

7 individual.

8 ‘‘(B) In the case of an irrevocable trust, if there are

9 any circumstances under which payment from the trust

10 could be made to or for the benefit of the individual, the

11 portion of the corpus from which payment to or for the

12 benefit of the individual could be made shall be considered

13 a resource available to the individual.

14 ‘‘(4) The Commissioner may waive the application of

15 this subsection with respect to any individual if the Com16 missioner determines, on the basis of criteria prescribed

17 in regulations, that such application would work an undue

18 hardship on such individual.

19 ‘‘(5) For purposes of this subsection—

20 ‘‘(A) the term ‘trust’ includes any legal instru21 ment or device that is similar to a trust;

22 ‘‘(B) the term ‘corpus’ means all property and

23 other interests held by the trust, including accumu24 lated earnings and any other addition to such trust

25 after its establishment (except that such term does
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1 not include any such earnings or addition in the

2 month in which such earnings or addition is credited

3 or otherwise transferred to the trust);

4 ‘‘(C) the term ‘asset’ includes any income or re5 source of the individual, including—

6 ‘‘(i) any income otherwise excluded by sec7 tion 1612(b);

8 ‘‘(ii) any resource otherwise excluded by

9 this section; and

10 ‘‘(iii) any other payment or property that

11 the individual is entitled to but does not receive

12 or have access to because of action by—

13 ‘‘(I) such individual;

14 ‘‘(II) a person or entity (including a

15 court) with legal authority to act in place

16 of, or on behalf of, such individual; or

17 ‘‘(III) a person or entity (including a

18 court) acting at the direction of, or upon

19 the request of, such individual; and

20 ‘‘(D) the term ‘benefits under this title’ in21 cludes supplementary payments pursuant to an

22 agreement for Federal administration under section

23 1616(a), and payments pursuant to an agreement

24 entered into under section 212(b) of Public Law 93–

25 66.’’.
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1 (2) TREATMENT AS INCOME.—Section

2 1612(a)(2) (42 U.S.C. 1382a(a)(2)) is amended—

3 (A) by striking ‘‘and’’ at the end of sub4 paragraph (E);

5 (B) by striking the period at the end of

6 subparagraph (F) and inserting ‘‘; and’’; and

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

8 subparagraph:

9 ‘‘(G) any earnings of, and additions to, the

10 corpus of a trust (as defined in section 1613(f))

11 established by an individual (within the mean12 ing of section 1613(e)(2)(A)) and of which such

13 individual is a beneficiary (other than a trust to

14 which section 1613(e)(4) applies), except that

15 in the case of an irrevocable trust, there shall

16 exist circumstances under which payment from

17 such earnings or additions could be made to, or

18 for the benefit of, such individual.’’.

19 (3) EFFECTIVE DATE.—The amendments made

20 by this subsection shall take effect on January 1,

21 1996, and shall apply to trusts established on or

22 after such date.

23 (c) REQUIREMENT TO ESTABLISH ACCOUNT.—

24 (1) IN GENERAL.—Section 1631(a)(2) (42

25 U.S.C. 1383(a)(2)) is amended—
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1 (A) by redesignating subparagraphs (F)

2 and (G) as subparagraphs (G) and (H), respec3 tively; and

4 (B) by inserting after subparagraph (E)

5 the following new subparagraph:

6 ‘‘(F)(i)(I) Each representative payee of an eligible in7 dividual under the age of 18 who is eligible for the pay8 ment of benefits described in subclause (II) shall establish

9 on behalf of such individual an account in a financial insti10 tution into which such benefits shall be paid, and shall

11 thereafter maintain such account for use in accordance

12 with clause (ii).

13 ‘‘(II) Benefits described in this subclause are past14 due monthly benefits under this title (which, for purposes

15 of this subclause, include State supplementary payments

16 made by the Commissioner pursuant to an agreement

17 under section 1616 or section 212(b) of Public Law 93–

18 66) in an amount (after any withholding by the Commis19 sioner for reimbursement to a State for interim assistance

20 under subsection (g)) that exceeds the product of—

21 ‘‘(aa) 6, and

22 ‘‘(bb) the maximum monthly benefit payable

23 under this title to an eligible individual.
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1 ‘‘(ii)(I) A representative payee may use funds in the

2 account established under clause (i) to pay for allowable

3 expenses described in subclause (II).

4 ‘‘(II) An allowable expense described in this subclause

5 is an expense for—

6 ‘‘(aa) education or job skills training;

7 ‘‘(bb) personal needs assistance;

8 ‘‘(cc) special equipment;

9 ‘‘(dd) housing modification;

10 ‘‘(ee) medical treatment;

11 ‘‘(ff) therapy or rehabilitation; or

12 ‘‘(gg) any other item or service that the Com13 missioner determines to be appropriate;

14 provided that such expense benefits such individual and,

15 in the case of an expense described in item (cc), (dd), (ff),

16 or (gg), is related to the impairment (or combination of

17 impairments) of such individual.

18 ‘‘(III) The use of funds from an account established

19 under clause (i) in any manner not authorized by this

20 clause—

21 ‘‘(aa) by a representative payee shall constitute

22 misuse of benefits for all purposes of this paragraph,

23 and any representative payee who knowingly misuses

24 benefits from such an account shall be liable to the
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1 Commissioner in an amount equal to the total

2 amount of such misused benefits; and

3 ‘‘(bb) by an eligible individual who is his or her

4 own representative payee shall be considered an

5 overpayment subject to recovery under subsection

6 (b).

7 ‘‘(IV) This clause shall continue to apply to funds in

8 the account after the child has reached age 18, regardless

9 of whether benefits are paid directly to the beneficiary or

10 through a representative payee.

11 ‘‘(iii) The representative payee may deposit into the

12 account established pursuant to clause (i)—

13 ‘‘(I) past-due benefits payable to the eligible in14 dividual in an amount less than that specified in

15 clause (i)(II), and

16 ‘‘(II) any other funds representing an under17 payment under this title to such individual, provided

18 that the amount of such underpayment is equal to

19 or exceeds the maximum monthly benefit payable

20 under this title to an eligible individual.

21 ‘‘(iv) The Commissioner of Social Security shall es22 tablish a system for accountability monitoring whereby

23 such representative payee shall report, at such time and

24 in such manner as the Commissioner shall require, on ac-
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1 tivity respecting funds in the account established pursuant

2 to clause (i).’’.

3 (2) EXCLUSION FROM RESOURCES.—Section

4 1613(a) (42 U.S.C. 1382b(a)) is amended—

5 (A) in paragraph (9), by striking ‘‘; and’’

6 and inserting a semicolon;

7 (B) in the first paragraph (10), by striking

8 the period and inserting a semicolon;

9 (C) by redesignating the second paragraph

10 (10) as paragraph (11), and by striking the pe11 riod and inserting ‘‘; and’’; and

12 (D) by adding at the end the following new

13 paragraph:

14 ‘‘(12) the assets and accrued interest or other

15 earnings of any account established and maintained

16 in accordance with section 1631(a)(2)(F).’’.

17 (3) EXCLUSION FROM INCOME.—Section

18 1612(b) (42 U.S.C. 1382a(b)) is amended—

19 (A) by striking ‘‘and’’ at the end of para20 graph (19);

21 (B) by striking the period at the end of

22 paragraph (20) and inserting ‘‘; and’’; and

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

24 paragraph:
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1 ‘‘(21) the interest or other earnings on any ac2 count established and maintained in accordance with

3 section 1631(a)(2)(F).’’.

4 (4) EFFECTIVE DATE.—The amendments made

5 by this subsection shall apply to payments made

6 after the date of the enactment of this Act.

7 SEC. 214. REDUCTION IN CASH BENEFITS PAYABLE TO IN8 STITUTIONALIZED INDIVIDUALS WHOSE MED9 ICAL COSTS ARE COVERED BY PRIVATE IN10 SURANCE.

11 (a) IN GENERAL.—Section 1611(e)(1)(B) (42 U.S.C.

12 1382(e)(1)(B)) is amended—

13 (1) by striking ‘‘title XIX, or’’ and inserting

14 ‘‘title XV or XIX,’’; and

15 (2) by inserting ‘‘or, in the case of an eligible

16 individual under the age of 18 receiving payments

17 (with respect to such individual) under any health

18 insurance policy issued by a private provider of such

19 insurance’’ after ‘‘section 1614(f)(2)(B),’’.

20 (b) EFFECTIVE DATE.—The amendment made by

21 this section shall apply to benefits for months beginning

22 90 or more days after the date of the enactment of this

23 Act, without regard to whether regulations have been is24 sued to implement such amendments.
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1 SEC. 215. INSTALLMENT PAYMENT OF LARGE PAST-DUE

2 SUPPLEMENTAL SECURITY INCOME BENE3 FITS.

4 (a) IN GENERAL.—Section 1631(a) (42 U.S.C. 1383)

5 is amended by adding at the end the following new para6 graph:

7 ‘‘(10)(A) If an individual is eligible for past-due

8 monthly benefits under this title in an amount that (after

9 any withholding for reimbursement to a State for interim

10 assistance under subsection (g)) equals or exceeds the

11 product of—

12 ‘‘(i) 12, and

13 ‘‘(ii) the maximum monthly benefit payable

14 under this title to an eligible individual (or, if appro15 priate, to an eligible individual and eligible spouse),

16 then the payment of such past-due benefits (after any such

17 reimbursement to a State) shall be made in installments

18 as provided in subparagraph (B).

19 ‘‘(B)(i) The payment of past-due benefits subject to

20 this subparagraph shall be made in not to exceed 3 install21 ments that are made at 6-month intervals.

22 ‘‘(ii) Except as provided in clause (iii), the amount

23 of each of the first and second installments may not exceed

24 an amount equal to the product of clauses (i) and (ii) of

25 subparagraph (A).

26 ‘‘(iii) In the case of an individual who has—
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1 ‘‘(I) outstanding debt attributable to—

2 ‘‘(aa) food,

3 ‘‘(bb) clothing,

4 ‘‘(cc) shelter, or

5 ‘‘(dd) medically necessary services, supplies

6 or equipment, or medicine; or

7 ‘‘(II) current expenses or expenses anticipated

8 in the near term attributable to—

9 ‘‘(aa) medically necessary services, supplies

10 or equipment, or medicine, or

11 ‘‘(bb) the purchase of a home, and

12 such debt or expenses are not subject to reimbursement

13 by a public assistance program, the Secretary under title

14 XVIII, a State plan approved under title XV or XIX, or

15 any private entity legally liable to provide payment pursu16 ant to an insurance policy, pre-paid plan, or other ar17 rangement, the limitation specified in clause (ii) may be

18 exceeded by an amount equal to the total of such debt

19 and expenses.

20 ‘‘(C) This paragraph shall not apply to any individual

21 who, at the time of the Commissioner’s determination that

22 such individual is eligible for the payment of past-due

23 monthly benefits under this title—
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1 ‘‘(i) is afflicted with a medically determinable

2 impairment that is expected to result in death within

3 12 months; or

4 ‘‘(ii) is ineligible for benefits under this title

5 and the Commissioner determines that such individ6 ual is likely to remain ineligible for the next 12

7 months.

8 ‘‘(D) For purposes of this paragraph, the term ‘bene9 fits under this title’ includes supplementary payments pur10 suant to an agreement for Federal administration under

11 section 1616(a), and payments pursuant to an agreement

12 entered into under section 212(b) of Public Law 93–66.’’.

13 (b) CONFORMING AMENDMENT.—Section 1631(a)(1)

14 (42 U.S.C. 1383(a)(1)) is amended by inserting ‘‘(subject

15 to paragraph (10))’’ immediately before ‘‘in such install16 ments’’.

17 (c) EFFECTIVE DATE.—

18 (1) IN GENERAL.—The amendments made by

19 this section are effective with respect to past-due

20 benefits payable under title XVI of the Social Secu21 rity Act after the third month following the month

22 in which this Act is enacted.

23 (2) BENEFITS PAYABLE UNDER TITLE XVI.—

24 For purposes of this subsection, the term ‘‘benefits

25 payable under title XVI of the Social Security Act’’
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1 includes supplementary payments pursuant to an

2 agreement for Federal administration under section

3 1616(a) of the Social Security Act, and payments

4 pursuant to an agreement entered into under section

5 212(b) of Public Law 93–66.

6 SEC. 216. RECOVERY OF SUPPLEMENTAL SECURITY IN7 COME OVERPAYMENTS FROM SOCIAL SECU8 RITY BENEFITS.

9 (a) IN GENERAL.—Part A of title XI is amended by

10 adding at the end the following new section:

11 ‘‘RECOVERY OF SSI OVERPAYMENTS FROM SOCIAL

12 SECURITY BENEFITS

13 ‘‘SEC. 1145. (a) IN GENERAL.—Whenever the Com14 missioner of Social Security determines that more than

15 the correct amount of any payment has been made to any

16 person under the supplemental security income program

17 authorized by title XVI, and the Commissioner is unable

18 to make proper adjustment or recovery of the amount so

19 incorrectly paid as provided in section 1631(b), the Com20 missioner (notwithstanding section 207) may recover the

21 amount incorrectly paid by decreasing any amount which

22 is payable under the Federal Old-Age and Survivors Insur23 ance program or the Federal Disability Insurance pro24 gram authorized by title II to that person or that person’s

25 estate.
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1 ‘‘(b) NO EFFECT ON SSI BENEFIT ELIGIBILITY OR

2 AMOUNT.—Notwithstanding subsections (a) and (b) of

3 section 1611, in any case in which the Commissioner takes

4 action in accordance with subsection (a) to recover an

5 overpayment from any person, neither that person, nor

6 any individual whose eligibility or benefit amount is deter7 mined by considering any part of that person’s income,

8 shall, as a result of such action—

9 ‘‘(1) become eligible under the program of sup10 plemental security income benefits under title XVI,

11 or

12 ‘‘(2) if such person or individual is already so

13 eligible, become eligible for increased benefits there14 under.

15 ‘‘(c) PROGRAM UNDER TITLE XVI.—For purposes of

16 this section, the term ‘supplemental security income pro17 gram authorized by title XVI’ includes supplementary pay18 ments pursuant to an agreement for Federal administra19 tion under section 1616(a), and payments pursuant to an

20 agreement entered into under section 212(b) of Public

21 Law 93–66.’’.

22 (b) CONFORMING AMENDMENTS.—

23 (1) Section 204 (42 U.S.C. 404) is amended by

24 adding at the end the following new subsection:
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1 ‘‘(g) For payments which are adjusted or withheld

2 to recover an overpayment of supplemental security in3 come benefits paid under title XVI (including State sup4 plementary payments which were paid under an agreement

5 pursuant to section 1616(a) or section 212(b) of Public

6 Law 93-66), see section 1145.’’.

7 (2) Section 1631(b) is amended by adding at

8 the end the following new paragraph:

9 ‘‘(5) For the recovery of overpayments of benefits

10 under this title from benefits payable under title II, see

11 section 1145.’’.

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

13 this section shall take effect on the date of the enactment

14 of this Act and shall apply to overpayments outstanding

15 on or after such date.

16 SEC. 217. REGULATIONS.

17 Within 3 months after the date of the enactment of

18 this Act, the Commissioner of Social Security shall pre19 scribe such regulations as may be necessary to implement

20 the amendments made by this subtitle.
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1 Subtitle C—State Supplementation

2 Programs

3 SEC. 221. REPEAL OF MAINTENANCE OF EFFORT REQUIRE4 MENTS APPLICABLE TO OPTIONAL STATE

5 PROGRAMS FOR SUPPLEMENTATION OF SSI

6 BENEFITS.

7 Section 1618 (42 U.S.C. 1382g) is hereby repealed.

8 Subtitle D—Studies Regarding

9 Supplemental Security Income

10 Program

11 SEC. 231. ANNUAL REPORT ON THE SUPPLEMENTAL SECU12 RITY INCOME PROGRAM.

13 Title XVI (42 U.S.C. 1381 et seq.), as amended by

14 section 201(c), is amended by adding at the end the fol15 lowing new section:

16 ‘‘ANNUAL REPORT ON PROGRAM

17 ‘‘SEC. 1637. (a) Not later than May 30 of each year,

18 the Commissioner of Social Security shall prepare and de19 liver a report annually to the President and the Congress

20 regarding the program under this title, including—

21 ‘‘(1) a comprehensive description of the pro22 gram;

23 ‘‘(2) historical and current data on allowances

24 and denials, including number of applications and

25 allowance rates for initial determinations, reconsid-
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1 eration determinations, administrative law judge

2 hearings, appeals council reviews, and Federal court

3 decisions;

4 ‘‘(3) historical and current data on characteris5 tics of recipients and program costs, by recipient

6 group (aged, blind, disabled adults, and disabled

7 children);

8 ‘‘(4) projections of future number of recipients

9 and program costs, through at least 25 years;

10 ‘‘(5) number of redeterminations and continu11 ing disability reviews, and the outcomes of such re12 determinations and reviews;

13 ‘‘(6) data on the utilization of work incentives;

14 ‘‘(7) detailed information on administrative and

15 other program operation costs;

16 ‘‘(8) summaries of relevant research undertaken

17 by the Social Security Administration, or by other

18 researchers;

19 ‘‘(9) State supplementation program operations;

20 ‘‘(10) a historical summary of statutory

21 changes to this title; and

22 ‘‘(11) such other information as the Commis23 sioner deems useful.

24 ‘‘(b) Each member of the Social Security Advisory

25 Board shall be permitted to provide an individual report,
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1 or a joint report if agreed, of views of the program under

2 this title, to be included in the annual report required

3 under this section.’’.

4 SEC. 232. STUDY OF DISABILITY DETERMINATION PROC5 ESS.

6 (a) IN GENERAL.—Not later than 90 days after the

7 date of the enactment of this Act, and from funds other8 wise appropriated, the Commissioner of Social Security

9 shall make arrangements with the National Academy of

10 Sciences, or other independent entity, to conduct a study

11 of the disability determination process under titles II and

12 XVI of the Social Security Act. This study shall be under13 taken in consultation with professionals representing ap14 propriate disciplines.

15 (b) STUDY COMPONENTS.—The study described in

16 subsection (a) shall include—

17 (1) an initial phase examining the appropriate18 ness of, and making recommendations regarding—

19 (A) the definitions of disability in effect on

20 the date of the enactment of this Act and the

21 advantages and disadvantages of alternative

22 definitions; and

23 (B) the operation of the disability deter24 mination process, including the appropriate

25 method of performing comprehensive assess-
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1 ments of individuals under age 18 with physical

2 and mental impairments;

3 (2) a second phase, which may be concurrent

4 with the initial phase, examining the validity, reli5 ability, and consistency with current scientific knowl6 edge of the standards and individual listings in the

7 Listing of Impairments set forth in appendix 1 of

8 subpart P of part 404 of title 20, Code of Federal

9 Regulations, and of related evaluation procedures as

10 promulgated by the Commissioner of Social Security;

11 and

12 (3) such other issues as the applicable entity

13 considers appropriate.

14 (c) REPORTS AND REGULATIONS.—

15 (1) REPORTS.—The Commissioner of Social Se16 curity shall request the applicable entity, to submit

17 an interim report and a final report of the findings

18 and recommendations resulting from the study de19 scribed in this section to the President and the Con20 gress not later than 18 months and 24 months, re21 spectively, from the date of the contract for such

22 study, and such additional reports as the Commis23 sioner deems appropriate after consultation with the

24 applicable entity.
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1 (2) REGULATIONS.—The Commissioner of So2 cial Security shall review both the interim and final

3 reports, and shall issue regulations implementing

4 any necessary changes following each report.

5 SEC. 233. STUDY BY GENERAL ACCOUNTING OFFICE.

6 Not later than January 1, 1999, the Comptroller

7 General of the United States shall study and report on—

8 (1) the impact of the amendments made by,

9 and the provisions of, this title on the supplemental

10 security income program under title XVI of the So11 cial Security Act; and

12 (2) extra expenses incurred by families of chil13 dren receiving benefits under such title that are not

14 covered by other Federal, State, or local programs.

15 Subtitle E—National Commission

16 on the Future of Disability

17 SEC. 241. ESTABLISHMENT.

18 There is established a commission to be known as the

19 National Commission on the Future of Disability (referred

20 to in this subtitle as the ‘‘Commission’’).

21 SEC. 242. DUTIES OF THE COMMISSION.

22 (a) IN GENERAL.—The Commission shall develop

23 and carry out a comprehensive study of all matters related

24 to the nature, purpose, and adequacy of all Federal pro25 grams serving individuals with disabilities. In particular,
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1 the Commission shall study the disability insurance pro2 gram under title II of the Social Security Act and the sup3 plemental security income disability program under title

4 XVI of such Act.

5 (b) MATTERS STUDIED.—The Commission shall pre6 pare an inventory of Federal programs serving individuals

7 with disabilities, and shall examine—

8 (1) trends and projections regarding the size

9 and characteristics of the population of individuals

10 with disabilities, and the implications of such analy11 ses for program planning;

12 (2) the feasibility and design of performance

13 standards for the Nation’s disability programs;

14 (3) the adequacy of Federal efforts in rehabili15 tation research and training, and opportunities to

16 improve the lives of individuals with disabilities

17 through all manners of scientific and engineering re18 search; and

19 (4) the adequacy of policy research available to

20 the Federal Government, and what actions might be

21 undertaken to improve the quality and scope of such

22 research.

23 (c) RECOMMENDATIONS.—The Commission shall

24 submit to the appropriate committees of the Congress and
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1 to the President recommendations and, as appropriate,

2 proposals for legislation, regarding—

3 (1) which (if any) Federal disability programs

4 should be eliminated or augmented;

5 (2) what new Federal disability programs (if

6 any) should be established;

7 (3) the suitability of the organization and loca8 tion of disability programs within the Federal Gov9 ernment;

10 (4) other actions the Federal Government

11 should take to prevent disabilities and disadvantages

12 associated with disabilities; and

13 (5) such other matters as the Commission con14 siders appropriate.

15 SEC. 243. MEMBERSHIP.

16 (a) NUMBER AND APPOINTMENT.—

17 (1) IN GENERAL.—The Commission shall be

18 composed of 15 members, of whom—

19 (A) five shall be appointed by the Presi20 dent, of whom not more than 3 shall be of the

21 same major political party;

22 (B) three shall be appointed by the Major23 ity Leader of the Senate;

24 (C) two shall be appointed by the Minority

25 Leader of the Senate;
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1 (D) three shall be appointed by the Speak2 er of the House of Representatives; and

3 (E) two shall be appointed by the Minority

4 Leader of the House of Representatives.

5 (2) REPRESENTATION.—The Commission mem6 bers shall be chosen based on their education, train7 ing, or experience. In appointing individuals as

8 members of the Commission, the President and the

9 Majority and Minority Leaders of the Senate and

10 the Speaker and Minority Leader of the House of

11 Representatives shall seek to ensure that the mem12 bership of the Commission reflects the general inter13 ests of the business and taxpaying community and

14 the diversity of individuals with disabilities in the

15 United States.

16 (b) COMPTROLLER GENERAL.—The Comptroller

17 General of the United States shall advise the Commission

18 on the methodology and approach of the study of the Com19 mission.

20 (c) TERM OF APPOINTMENT.—The members shall

21 serve on the Commission for the life of the Commission.

22 (d) MEETINGS.—The Commission shall locate its

23 headquarters in the District of Columbia, and shall meet

24 at the call of the Chairperson, but not less than 4 times

25 each year during the life of the Commission.
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1 (e) QUORUM.—Ten members of the Commission shall

2 constitute a quorum, but a lesser number may hold hear3 ings.

4 (f) CHAIRPERSON AND VICE CHAIRPERSON.—Not

5 later than 15 days after the members of the Commission

6 are appointed, such members shall designate a Chair7 person and Vice Chairperson from among the members of

8 the Commission.

9 (g) CONTINUATION OF MEMBERSHIP.—If a member

10 of the Commission becomes an officer or employee of any

11 government after appointment to the Commission, the in12 dividual may continue as a member until a successor mem13 ber is appointed.

14 (h) VACANCIES.—A vacancy on the Commission shall

15 be filled in the manner in which the original appointment

16 was made not later than 30 days after the Commission

17 is given notice of the vacancy.

18 (i) COMPENSATION.—Members of the Commission

19 shall receive no additional pay, allowances, or benefits by

20 reason of their service on the Commission.

21 (j) TRAVEL EXPENSES.—Each member of the Com22 mission shall receive travel expenses, including per diem

23 in lieu of subsistence, in accordance with sections 5702

24 and 5703 of title 5, United States Code.
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1 SEC. 244. STAFF AND SUPPORT SERVICES.

2 (a) DIRECTOR.—

3 (1) APPOINTMENT.—Upon consultation with

4 the members of the Commission, the Chairperson

5 shall appoint a Director of the Commission.

6 (2) COMPENSATION.—The Director shall be

7 paid the rate of basic pay for level V of the Execu8 tive Schedule.

9 (b) STAFF.—With the approval of the Commission,

10 the Director may appoint such personnel as the Director

11 considers appropriate.

12 (c) APPLICABILITY OF CIVIL SERVICE LAWS.—The

13 staff of the Commission shall be appointed without regard

14 to the provisions of title 5, United States Code, governing

15 appointments in the competitive service, and shall be paid

16 without regard to the provisions of chapter 51 and sub17 chapter III of chapter 53 of such title relating to classi18 fication and General Schedule pay rates.

19 (d) EXPERTS AND CONSULTANTS.—With the ap20 proval of the Commission, the Director may procure tem21 porary and intermittent services under section 3109(b) of

22 title 5, United States Code.

23 (e) STAFF OF FEDERAL AGENCIES.—Upon the re24 quest of the Commission, the head of any Federal agency

25 may detail, on a reimbursable basis, any of the personnel
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1 of such agency to the Commission to assist in carrying

2 out the duties of the Commission under this subtitle.

3 (f) OTHER RESOURCES.—The Commission shall have

4 reasonable access to materials, resources, statistical data,

5 and other information from the Library of Congress and

6 agencies and elected representatives of the executive and

7 legislative branches of the Federal Government. The

8 Chairperson of the Commission shall make requests for

9 such access in writing when necessary.

10 (g) PHYSICAL FACILITIES.—The Administrator of

11 the General Services Administration shall locate suitable

12 office space for the operation of the Commission. The fa13 cilities shall serve as the headquarters of the Commission

14 and shall include all necessary equipment and incidentals

15 required for proper functioning of the Commission.

16 SEC. 245. POWERS OF COMMISSION.

17 (a) HEARINGS.—The Commission may conduct pub18 lic hearings or forums at the discretion of the Commission,

19 at any time and place the Commission is able to secure

20 facilities and witnesses, for the purpose of carrying out

21 the duties of the Commission under this subtitle.

22 (b) DELEGATION OF AUTHORITY.—Any member or

23 agent of the Commission may, if authorized by the Com24 mission, take any action the Commission is authorized to

25 take by this section.
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1 (c) INFORMATION.—The Commission may secure di2 rectly from any Federal agency information necessary to

3 enable the Commission to carry out its duties under this

4 subtitle. Upon request of the Chairperson or Vice Chair5 person of the Commission, the head of a Federal agency

6 shall furnish the information to the Commission to the ex7 tent permitted by law.

8 (d) GIFTS, BEQUESTS, AND DEVISES.—The Commis9 sion may accept, use, and dispose of gifts, bequests, or

10 devises of services or property, both real and personal, for

11 the purpose of aiding or facilitating the work of the Com12 mission. Gifts, bequests, or devises of money and proceeds

13 from sales of other property received as gifts, bequests,

14 or devises shall be deposited in the Treasury and shall be

15 available for disbursement upon order of the Commission.

16 (e) MAILS.—The Commission may use the United

17 States mails in the same manner and under the same con18 ditions as other Federal agencies.

19 SEC. 246. REPORTS.

20 (a) INTERIM REPORT.—Not later than 1 year prior

21 to the date on which the Commission terminates pursuant

22 to section 247, the Commission shall submit an interim

23 report to the President and to the Congress. The interim

24 report shall contain a detailed statement of the findings

25 and conclusions of the Commission, together with the
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1 Commission’s recommendations for legislative and admin2 istrative action, based on the activities of the Commission.

3 (b) FINAL REPORT.—Not later than the date on

4 which the Commission terminates, the Commission shall

5 submit to the Congress and to the President a final report

6 containing—

7 (1) a detailed statement of final findings, con8 clusions, and recommendations; and

9 (2) an assessment of the extent to which rec10 ommendations of the Commission included in the in11 terim report under subsection (a) have been imple12 mented.

13 (c) PRINTING AND PUBLIC DISTRIBUTION.—Upon

14 receipt of each report of the Commission under this sec15 tion, the President shall—

16 (1) order the report to be printed; and

17 (2) make the report available to the public upon

18 request.

19 SEC. 247. TERMINATION.

20 The Commission shall terminate on the date that is

21 2 years after the date on which the members of the Com22 mission have met and designated a Chairperson and Vice

23 Chairperson.
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1 SEC. 248. AUTHORIZATION OF APPROPRIATIONS.

2 There are authorized to be appropriated such sums

3 as are necessary to carry out the purposes of the Commis4 sion.

5 Subtitle F—Retirement Age

6 Eligibility

7 SEC. 251. ELIGIBILITY FOR SUPPLEMENTAL SECURITY IN8 COME BENEFITS BASED ON SOCIAL SECU9 RITY RETIREMENT AGE.

10 (a) IN GENERAL.—Section 1614(a)(1)(A) (42 U.S.C.

11 1382C(a)(1)(A)) is amended by striking ‘‘is 65 years of

12 age or older,’’ and inserting ‘‘has attained retirement

13 age.’’.

14 (b) RETIREMENT AGE DEFINED.—Section 1614 (42

15 U.S.C. 1382c) is amended by adding at the end the follow16 ing new subsection:

17 ‘‘Retirement Age

18 ‘‘(g) For purposes of this title, the term ‘‘retirement

19 age’’ has the meaning given such term by section 216(l)(1)

20 with respect to individuals entitled to old-age insurance.’’.

21 (c) CONFORMING AMENDMENTS.—Sections 1601,

22 1612(b)(4), 1615(a)(1), and 1620(b)(2) (42 U.S.C. 1381,

23 1382a(b)(4), 1382d(a)(1), and 1382i(b)(2)) are amended

24 by striking ‘‘age 65’’ each place it appears and inserting

25 ‘‘retirement age’’.
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall take effect on the date of the enactment

3 of this Act.

4 TITLE III—CHILD SUPPORT

5 SEC. 300. REFERENCE TO SOCIAL SECURITY ACT.

6 Except as otherwise specifically provided, wherever in

7 this title an amendment is expressed in terms of an

8 amendment to or repeal of a section or other provision,

9 the reference shall be considered to be made to that sec10 tion or other provision of the Social Security Act.

11 Subtitle A—Eligibility for Services;

12 Distribution of Payments

13 SEC. 301. STATE OBLIGATION TO PROVIDE CHILD SUP14 PORT ENFORCEMENT SERVICES.

15 (a) STATE PLAN REQUIREMENTS.—Section 454 (42

16 U.S.C. 654) is amended—

17 (1) by striking paragraph (4) and inserting the

18 following new paragraph:

19 ‘‘(4) provide that the State will—

20 ‘‘(A) provide services relating to the estab21 lishment of paternity or the establishment,

22 modification, or enforcement of child support

23 obligations, as appropriate, under the plan with

24 respect to—
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1 ‘‘(i) each child for whom (I) assist2 ance is provided under the State program

3 funded under part A of this title, (II) ben4 efits or services for foster care mainte5 nance are provided under the State pro6 gram funded under part E of this title,

7 (III) medical assistance is provided under

8 the State plan under title XV, or (IV)

9 medical assistance is provided under the

10 State plan approved under title XIX, un11 less, in accordance with paragraph (29),

12 good cause and other exceptions exist;

13 ‘‘(ii) any other child, if an individual

14 applies for such services with respect to

15 the child; and

16 ‘‘(B) enforce any support obligation estab17 lished with respect to—

18 ‘‘(i) a child with respect to whom the

19 State provides services under the plan; or

20 ‘‘(ii) the custodial parent of such a

21 child.’’; and

22 (2) in paragraph (6)—

23 (A) by striking ‘‘provide that’’ and insert24 ing ‘‘provide that—’’;
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1 (B) by striking subparagraph (A) and in2 serting the following new subparagraph:

3 ‘‘(A) services under the plan shall be made

4 available to residents of other States on the

5 same terms as to residents of the State submit6 ting the plan;’’;

7 (C) in subparagraph (B), by inserting ‘‘on

8 individuals not receiving assistance under any

9 State program funded under part A’’ after

10 ‘‘such services shall be imposed’’;

11 (D) in each of subparagraphs (B), (C),

12 (D), and (E)—

13 (i) by indenting the subparagraph in

14 the same manner as, and aligning the left

15 margin of the subparagraph with the left

16 margin of, the matter inserted by subpara17 graph (B) of this paragraph; and

18 (ii) by striking the final comma and

19 inserting a semicolon; and

20 (E) in subparagraph (E), by indenting

21 each of clauses (i) and (ii) 2 additional ems.

22 (b) CONTINUATION OF SERVICES FOR FAMILIES

23 CEASING TO RECEIVE ASSISTANCE UNDER THE STATE

24 PROGRAM FUNDED UNDER PART A.—Section 454 (42

25 U.S.C. 654) is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (23);

3 (2) by striking the period at the end of para4 graph (24) and inserting ‘‘; and’’; and

5 (3) by adding after paragraph (24) the follow6 ing new paragraph:

7 ‘‘(25) provide that if a family with respect to

8 which services are provided under the plan ceases to

9 receive assistance under the State program funded

10 under part A, the State shall provide appropriate no11 tice to the family and continue to provide such serv12 ices, subject to the same conditions and on the same

13 basis as in the case of other individuals to whom

14 services are furnished under the plan, except that an

15 application or other request to continue services

16 shall not be required of such a family and paragraph

17 (6)(B) shall not apply to the family.’’.

18 (c) CONFORMING AMENDMENTS.—

19 (1) Section 452(b) (42 U.S.C. 652(b)) is

20 amended by striking ‘‘454(6)’’ and inserting

21 ‘‘454(4)’’.

22 (2) Section 452(g)(2)(A) (42 U.S.C.

23 652(g)(2)(A)) is amended by striking ‘‘454(6)’’ each

24 place it appears and inserting ‘‘454(4)(A)(ii)’’.
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1 (3) Section 466(a)(3)(B) (42 U.S.C.

2 666(a)(3)(B)) is amended by striking ‘‘in the case of

3 overdue support which a State has agreed to collect

4 under section 454(6)’’ and inserting ‘‘in any other

5 case’’.

6 (4) Section 466(e) (42 U.S.C. 666(e)) is

7 amended by striking ‘‘paragraph (4) or (6) of sec8 tion 454’’ and inserting ‘‘section 454(4)’’.

9 SEC. 302. DISTRIBUTION OF CHILD SUPPORT COLLEC10 TIONS.

11 (a) IN GENERAL.—Section 457 (42 U.S.C. 657) is

12 amended to read as follows:

13 ‘‘SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

14 ‘‘(a) IN GENERAL.—Subject to subsection (e), an

15 amount collected on behalf of a family as support by a

16 State pursuant to a plan approved under this part shall

17 be distributed as follows:

18 ‘‘(1) FAMILIES RECEIVING ASSISTANCE.—In the

19 case of a family receiving assistance from the State,

20 the State shall—

21 ‘‘(A) pay to the Federal Government the

22 Federal share of the amount so collected; and

23 ‘‘(B) retain, or distribute to the family, the

24 State share of the amount so collected.
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1 ‘‘(2) FAMILIES THAT FORMERLY RECEIVED AS2 SISTANCE.—In the case of a family that formerly re3 ceived assistance from the State:

4 ‘‘(A) CURRENT SUPPORT PAYMENTS.—To

5 the extent that the amount so collected does not

6 exceed the amount required to be paid to the

7 family for the month in which collected, the

8 State shall distribute the amount so collected to

9 the family.

10 ‘‘(B) PAYMENTS OF ARREARAGES.—To the

11 extent that the amount so collected exceeds the

12 amount required to be paid to the family for

13 the month in which collected, the State shall

14 distribute the amount so collected as follows:

15 ‘‘(i) DISTRIBUTION OF ARREARAGES

16 THAT ACCRUED AFTER THE FAMILY

17 CEASED TO RECEIVE ASSISTANCE.—

18 ‘‘(I) PRE-OCTOBER 1997.—Except

19 as provided in subclause (II), the pro20 visions of this section (other than sub21 section (b)(1)) as in effect and applied

22 on the day before the date of the en23 actment of section 302 of the Per24 sonal Responsibility and Work Oppor25 tunity Act of 1996 shall apply with
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1 respect to the distribution of support

2 arrearages that—

3 ‘‘(aa) accrued after the fam4 ily ceased to receive assistance,

5 and

6 ‘‘(bb) are collected before

7 October 1, 1997.

8 ‘‘(II) POST-SEPTEMBER 1997.—

9 With respect to the amount so col10 lected on or after October 1, 1997 (or

11 before such date, at the option of the

12 State)—

13 ‘‘(aa) IN GENERAL.—The

14 State shall first distribute the

15 amount so collected (other than

16 any amount described in clause

17 (iv)) to the family to the extent

18 necessary to satisfy any support

19 arrearages with respect to the

20 family that accrued after the

21 family ceased to receive assist22 ance from the State.

23 ‘‘(bb) REIMBURSEMENT OF

24 GOVERNMENTS FOR ASSISTANCE

25 PROVIDED TO THE FAMILY.—
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1 After the application of division

2 (aa) and clause (ii)(II)(aa) with

3 respect to the amount so col4 lected, the State shall retain the

5 State share of the amount so col6 lected, and pay to the Federal

7 Government the Federal share

8 (as defined in subsection (c)(2))

9 of the amount so collected, but

10 only to the extent necessary to

11 reimburse amounts paid to the

12 family as assistance by the State.

13 ‘‘(cc) DISTRIBUTION OF THE

14 REMAINDER TO THE FAMILY.—

15 To the extent that neither divi16 sion (aa) nor division (bb) applies

17 to the amount so collected, the

18 State shall distribute the amount

19 to the family.

20 ‘‘(ii) DISTRIBUTION OF ARREARAGES

21 THAT ACCRUED BEFORE THE FAMILY RE22 CEIVED ASSISTANCE.—

23 ‘‘(I) PRE-OCTOBER 2000.—Except

24 as provided in subclause (II), the pro25 visions of this section (other than sub-
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1 section (b)(1)) as in effect and applied

2 on the day before the date of the en3 actment of section 302 of the Per4 sonal Responsibility and Work Oppor5 tunity Act of 1996 shall apply with

6 respect to the distribution of support

7 arrearages that—

8 ‘‘(aa) accrued before the

9 family received assistance, and

10 ‘‘(bb) are collected before

11 October 1, 2000.

12 ‘‘(II) POST-SEPTEMBER 2000.—

13 Unless, based on the report required

14 by paragraph (4), the Congress deter15 mines otherwise, with respect to the

16 amount so collected on or after Octo17 ber 1, 2000 (or before such date, at

18 the option of the State)—

19 ‘‘(aa) IN GENERAL.—The

20 State shall first distribute the

21 amount so collected (other than

22 any amount described in clause

23 (iv)) to the family to the extent

24 necessary to satisfy any support

25 arrearages with respect to the
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1 family that accrued before the

2 family received assistance from

3 the State.

4 ‘‘(bb) REIMBURSEMENT OF

5 GOVERNMENTS FOR ASSISTANCE

6 PROVIDED TO THE FAMILY.—

7 After the application of clause

8 (i)(II)(aa) and division (aa) with

9 respect to the amount so col10 lected, the State shall retain the

11 State share of the amount so col12 lected, and pay to the Federal

13 Government the Federal share

14 (as defined in subsection (c)(2))

15 of the amount so collected, but

16 only to the extent necessary to

17 reimburse amounts paid to the

18 family as assistance by the State.

19 ‘‘(cc) DISTRIBUTION OF THE

20 REMAINDER TO THE FAMILY.—

21 To the extent that neither divi22 sion (aa) nor division (bb) applies

23 to the amount so collected, the

24 State shall distribute the amount

25 to the family.
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1 ‘‘(iii) DISTRIBUTION OF ARREARAGES

2 THAT ACCRUED WHILE THE FAMILY RE3 CEIVED ASSISTANCE.—In the case of a

4 family described in this subparagraph, the

5 provisions of paragraph (1) shall apply

6 with respect to the distribution of support

7 arrearages that accrued while the family

8 received assistance.

9 ‘‘(iv) AMOUNTS COLLECTED PURSU10 ANT TO SECTION 464.—Notwithstanding

11 any other provision of this section, any

12 amount of support collected pursuant to

13 section 464 shall be retained by the State

14 to the extent past-due support has been as15 signed to the State as a condition of re16 ceiving assistance from the State, up to the

17 amount necessary to reimburse the State

18 for amounts paid to the family as assist19 ance by the State. The State shall pay to

20 the Federal Government the Federal share

21 of the amounts so retained. To the extent

22 the amount collected pursuant to section

23 464 exceeds the amount so retained, the

24 State shall distribute the excess to the

25 family.
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1 ‘‘(v) ORDERING RULES FOR DISTRIBU2 TIONS.—For purposes of this subpara3 graph, unless an earlier effective date is re4 quired by this section, effective October 1,

5 2000, the State shall treat any support ar6 rearages collected as accruing in the fol7 lowing order:

8 ‘‘(I) To the period after the fam9 ily ceased to receive assistance.

10 ‘‘(II) To the period before the

11 family received assistance.

12 ‘‘(III) To the period while the

13 family was receiving assistance.

14 ‘‘(3) FAMILIES THAT NEVER RECEIVED ASSIST15 ANCE.—In the case of any other family, the State

16 shall distribute the amount so collected to the fam17 ily.

18 ‘‘(4) STUDY AND REPORT.—Not later than Oc19 tober 1, 1998, the Secretary shall report to the Con20 gress the Secretary’s findings with respect to—

21 ‘‘(A) whether the distribution of post-as22 sistance arrearages to families has been effec23 tive in moving people off of welfare and keeping

24 them off of welfare;
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1 ‘‘(B) whether early implementation of a

2 pre-assistance arrearage program by some

3 States has been effective in moving people off

4 of welfare and keeping them off of welfare;

5 ‘‘(C) what the overall impact has been of

6 the amendments made by the Personal Respon7 sibility and Work Opportunity Act of 1996 with

8 respect to child support enforcement in moving

9 people off of welfare and keeping them off of

10 welfare; and

11 ‘‘(D) based on the information and data

12 the Secretary has obtained, what changes, if

13 any, should be made in the policies related to

14 the distribution of child support arrearages.

15 ‘‘(b) CONTINUATION OF ASSIGNMENTS.—Any rights

16 to support obligations, which were assigned to a State as

17 a condition of receiving assistance from the State under

18 part A and which were in effect on the day before the

19 date of the enactment of the Personal Responsibility and

20 Work Opportunity Act of 1996, shall remain assigned

21 after such date.

22 ‘‘(c) DEFINITIONS.—As used in subsection (a):

23 ‘‘(1) ASSISTANCE.—The term ‘assistance from

24 the State’ means—
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1 ‘‘(A) assistance under the State program

2 funded under part A or under the State plan

3 approved under part A of this title (as in effect

4 on the day before the date of the enactment of

5 the Personal Responsibility and Work Oppor6 tunity Act of 1996); or

7 ‘‘(B) benefits under the State plan ap8 proved under part E of this title (as in effect

9 on the day before the date of the enactment of

10 the Personal Responsibility and Work Oppor11 tunity Act of 1996).

12 ‘‘(2) FEDERAL SHARE.—The term ‘Federal

13 share’ means that portion of the amount collected

14 resulting from the application of the Federal medical

15 assistance percentage in effect for the fiscal year in

16 which the amount is collected.

17 ‘‘(3) FEDERAL MEDICAL ASSISTANCE PERCENT18 AGE.—The term ‘Federal medical assistance per19 centage’ means—

20 ‘‘(A) the Federal medical assistance per21 centage (as defined in section 1118), in the case

22 of Puerto Rico, the Virgin Islands, Guam, and

23 American Samoa; or
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1 ‘‘(B) the Federal medical assistance per2 centage (as defined in section 1905(b)) in the

3 case of any other State.

4 ‘‘(4) STATE SHARE.—The term ‘State share’

5 means 100 percent minus the Federal share.

6 ‘‘(d) HOLD HARMLESS PROVISION.—If the amounts

7 collected which could be retained by the State in the fiscal

8 year (to the extent necessary to reimburse the State for

9 amounts paid to families as assistance by the State) are

10 less than the State share of the amounts collected in fiscal

11 year 1995 (determined in accordance with section 457 as

12 in effect on the day before the date of the enactment of

13 the Personal Responsibility and Work Opportunity Act of

14 1996), the State share for the fiscal year shall be an

15 amount equal to the State share in fiscal year 1995.

16 ‘‘(e) GAP PAYMENTS NOT SUBJECT TO DISTRIBU17 TION UNDER THIS SECTION.—This section shall not

18 apply to any amount collected on behalf of a family as

19 support by a State pursuant to a plan approved under this

20 part if such amount would have been distributed to the

21 family by the State under section 402(a)(28), as in effect

22 and applied on the day before the date of the enactment

23 of section 302 of the Personal Responsibility and Work

24 Opportunity Act of 1996.’’.

25 (b) CONFORMING AMENDMENTS.—
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1 (1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is

2 amended by striking ‘‘section 457(b)(4) or (d)(3)’’

3 and inserting ‘‘section 457’’.

4 (2) Section 454 (42 U.S.C. 654) is amended—

5 (A) in paragraph (11)—

6 (i) by striking ‘‘(11)’’ and inserting

7 ‘‘(11)(A)’’; and

8 (ii) by inserting after the semicolon

9 ‘‘and’’; and

10 (B) by redesignating paragraph (12) as

11 subparagraph (B) of paragraph (11).

12 (c) EFFECTIVE DATES.—

13 (1) IN GENERAL.—Except as provided in para14 graph (2), the amendments made by this section

15 shall be effective on July 1, 1996, or earlier at the

16 State’s option.

17 (2) CONFORMING AMENDMENTS.—The amend18 ments made by subsection (b)(2) shall become effec19 tive on the date of the enactment of this Act.

20 SEC. 303. PRIVACY SAFEGUARDS.

21 (a) STATE PLAN REQUIREMENT.—Section 454 (42

22 U.S.C. 654), as amended by section 301(b) of this Act,

23 is amended—

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

25 (24);
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1 (2) by striking the period at the end of para2 graph (25) and inserting ‘‘; and’’; and

3 (3) by adding after paragraph (25) the follow4 ing new paragraph:

5 ‘‘(26) will have in effect safeguards, applicable

6 to all confidential information handled by the State

7 agency, that are designed to protect the privacy

8 rights of the parties, including—

9 ‘‘(A) safeguards against unauthorized use

10 or disclosure of information relating to proceed11 ings or actions to establish paternity, or to es12 tablish or enforce support;

13 ‘‘(B) prohibitions against the release of in14 formation on the whereabouts of 1 party to an15 other party against whom a protective order

16 with respect to the former party has been en17 tered; and

18 ‘‘(C) prohibitions against the release of in19 formation on the whereabouts of 1 party to an20 other party if the State has reason to believe

21 that the release of the information may result

22 in physical or emotional harm to the former

23 party.’’.

24 (b) EFFECTIVE DATE.—The amendment made by

25 subsection (a) shall become effective on October 1, 1997.
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1 SEC. 304. RIGHTS TO NOTIFICATION OF HEARINGS.

2 (a) IN GENERAL.—Section 454 (42 U.S.C. 654), as

3 amended by section 302(b)(2) of this Act, is amended by

4 inserting after paragraph (11) the following new para5 graph:

6 ‘‘(12) provide for the establishment of proce7 dures to require the State to provide individuals who

8 are applying for or receiving services under the State

9 plan, or who are parties to cases in which services

10 are being provided under the State plan—

11 ‘‘(A) with notice of all proceedings in

12 which support obligations might be established

13 or modified; and

14 ‘‘(B) with a copy of any order establishing

15 or modifying a child support obligation, or (in

16 the case of a petition for modification) a notice

17 of determination that there should be no change

18 in the amount of the child support award, with19 in 14 days after issuance of such order or de20 termination;’’.

21 (b) EFFECTIVE DATE.—The amendment made by

22 subsection (a) shall become effective on October 1, 1997.
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1 Subtitle B—Locate and Case

2 Tracking

3 SEC. 311. STATE CASE REGISTRY.

4 Section 454A, as added by section 344(a)(2) of this

5 Act, is amended by adding at the end the following new

6 subsections:

7 ‘‘(e) STATE CASE REGISTRY.—

8 ‘‘(1) CONTENTS.—The automated system re9 quired by this section shall include a registry (which

10 shall be known as the ‘State case registry’) that con11 tains records with respect to—

12 ‘‘(A) each case in which services are being

13 provided by the State agency under the State

14 plan approved under this part; and

15 ‘‘(B) each support order established or

16 modified in the State on or after October 1,

17 1998.

18 ‘‘(2) LINKING OF LOCAL REGISTRIES.—The

19 State case registry may be established by linking

20 local case registries of support orders through an

21 automated information network, subject to this sec22 tion.

23 ‘‘(3) USE OF STANDARDIZED DATA ELE24 MENTS.—Such records shall use standardized data

25 elements for both parents (such as names, social se-
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1 curity numbers and other uniform identification

2 numbers, dates of birth, and case identification

3 numbers), and contain such other information (such

4 as on case status) as the Secretary may require.

5 ‘‘(4) PAYMENT RECORDS.—Each case record in

6 the State case registry with respect to which services

7 are being provided under the State plan approved

8 under this part and with respect to which a support

9 order has been established shall include a record

10 of—

11 ‘‘(A) the amount of monthly (or other peri12 odic) support owed under the order, and other

13 amounts (including arrearages, interest or late

14 payment penalties, and fees) due or overdue

15 under the order;

16 ‘‘(B) any amount described in subpara17 graph (A) that has been collected;

18 ‘‘(C) the distribution of such collected

19 amounts;

20 ‘‘(D) the birth date of any child for whom

21 the order requires the provision of support; and

22 ‘‘(E) the amount of any lien imposed with

23 respect to the order pursuant to section

24 466(a)(4).
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1 ‘‘(5) UPDATING AND MONITORING.—The State

2 agency operating the automated system required by

3 this section shall promptly establish and update,

4 maintain, and regularly monitor, case records in the

5 State case registry with respect to which services are

6 being provided under the State plan approved under

7 this part, on the basis of—

8 ‘‘(A) information on administrative actions

9 and administrative and judicial proceedings and

10 orders relating to paternity and support;

11 ‘‘(B) information obtained from compari12 son with Federal, State, or local sources of in13 formation;

14 ‘‘(C) information on support collections

15 and distributions; and

16 ‘‘(D) any other relevant information.

17 ‘‘(f) INFORMATION COMPARISONS AND OTHER DIS18 CLOSURES OF INFORMATION.—The State shall use the

19 automated system required by this section to extract infor20 mation from (at such times, and in such standardized for21 mat or formats, as may be required by the Secretary), to

22 share and compare information with, and to receive infor23 mation from, other data bases and information compari24 son services, in order to obtain (or provide) information

25 necessary to enable the State agency (or the Secretary or
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1 other State or Federal agencies) to carry out this part,

2 subject to section 6103 of the Internal Revenue Code of

3 1986. Such information comparison activities shall include

4 the following:

5 ‘‘(1) FEDERAL CASE REGISTRY OF CHILD SUP6 PORT ORDERS.—Furnishing to the Federal Case

7 Registry of Child Support Orders established under

8 section 453(h) (and update as necessary, with infor9 mation including notice of expiration of orders) the

10 minimum amount of information on child support

11 cases recorded in the State case registry that is nec12 essary to operate the registry (as specified by the

13 Secretary in regulations).

14 ‘‘(2) FEDERAL PARENT LOCATOR SERVICE.—

15 Exchanging information with the Federal Parent

16 Locator Service for the purposes specified in section

17 453.

18 ‘‘(3) TEMPORARY FAMILY ASSISTANCE AND

19 MEDICAID AGENCIES.—Exchanging information with

20 State agencies (of the State and of other States) ad21 ministering programs funded under part A, pro22 grams operated under a State plan under title XV

23 or a State plan approved under title XIX, and other

24 programs designated by the Secretary, as necessary
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1 to perform State agency responsibilities under this

2 part and under such programs.

3 ‘‘(4) INTRASTATE AND INTERSTATE INFORMA4 TION COMPARISONS.—Exchanging information with

5 other agencies of the State, agencies of other States,

6 and interstate information networks, as necessary

7 and appropriate to carry out (or assist other States

8 to carry out) the purposes of this part.’’.

9 SEC. 312. COLLECTION AND DISBURSEMENT OF SUPPORT

10 PAYMENTS.

11 (a) STATE PLAN REQUIREMENT.—Section 454 (42

12 U.S.C. 654), as amended by sections 301(b) and 303(a)

13 of this Act, is amended—

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

15 (25);

16 (2) by striking the period at the end of para17 graph (26) and inserting ‘‘; and’’; and

18 (3) by adding after paragraph (26) the follow19 ing new paragraph:

20 ‘‘(27) provide that, on and after October 1,

21 1998, the State agency will—

22 ‘‘(A) operate a State disbursement unit in

23 accordance with section 454B; and

24 ‘‘(B) have sufficient State staff (consisting

25 of State employees) and (at State option) con-
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1 tractors reporting directly to the State agency

2 to—

3 ‘‘(i) monitor and enforce support col4 lections through the unit in cases being en5 forced by the State pursuant to section

6 454(4) (including carrying out the auto7 mated data processing responsibilities de8 scribed in section 454A(g)); and

9 ‘‘(ii) take the actions described in sec10 tion 466(c)(1) in appropriate cases.’’.

11 (b) ESTABLISHMENT OF STATE DISBURSEMENT

12 UNIT.—Part D of title IV (42 U.S.C. 651–669), as

13 amended by section 344(a)(2) of this Act, is amended by

14 inserting after section 454A the following new section:

15 ‘‘SEC. 454B. COLLECTION AND DISBURSEMENT OF SUP16 PORT PAYMENTS.

17 ‘‘(a) STATE DISBURSEMENT UNIT.—

18 ‘‘(1) IN GENERAL.—In order for a State to

19 meet the requirements of this section, the State

20 agency must establish and operate a unit (which

21 shall be known as the ‘State disbursement unit’) for

22 the collection and disbursement of payments under

23 support orders—

24 ‘‘(A) in all cases being enforced by the

25 State pursuant to section 454(4); and
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1 ‘‘(B) in all cases not being enforced by the

2 State under this part in which the support

3 order is initially issued in the State on or after

4 January 1, 1994, and in which the wages of the

5 noncustodial parent are subject to withholding

6 pursuant to section 466(a)(8)(B).

7 ‘‘(2) OPERATION.—The State disbursement

8 unit shall be operated—

9 ‘‘(A) directly by the State agency (or 2 or

10 more State agencies under a regional coopera11 tive agreement), or (to the extent appropriate)

12 by a contractor responsible directly to the State

13 agency; and

14 ‘‘(B) except in cases described in para15 graph (1)(B), in coordination with the auto16 mated system established by the State pursuant

17 to section 454A.

18 ‘‘(3) LINKING OF LOCAL DISBURSEMENT

19 UNITS.—The State disbursement unit may be estab20 lished by linking local disbursement units through

21 an automated information network, subject to this

22 section, if the Secretary agrees that the system will

23 not cost more nor take more time to establish or op24 erate than a centralized system. In addition, employ-
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1 ers shall be given 1 location to which income with2 holding is sent.

3 ‘‘(b) REQUIRED PROCEDURES.—The State disburse4 ment unit shall use automated procedures, electronic proc5 esses, and computer-driven technology to the maximum

6 extent feasible, efficient, and economical, for the collection

7 and disbursement of support payments, including proce8 dures—

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 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 any parent, upon request,

17 timely information on the current status of support

18 payments under an order requiring payments to be

19 made by or to the parent.

20 ‘‘(c) TIMING OF DISBURSEMENTS.—

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2), the State disbursement unit shall distrib23 ute all amounts payable under section 457(a) within

24 2 business days after receipt from the employer or
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1 other source of periodic income, if sufficient infor2 mation identifying the payee is provided.

3 ‘‘(2) PERMISSIVE RETENTION OF ARREAR4 AGES.—The State disbursement unit may delay the

5 distribution of collections toward arrearages until

6 the resolution of any timely appeal with respect to

7 such arrearages.

8 ‘‘(d) BUSINESS DAY DEFINED.—As used in this sec9 tion, the term ‘business day’ means a day on which State

10 offices are open for regular business.’’.

11 (c) USE OF AUTOMATED SYSTEM.—Section 454A, as

12 added by section 344(a)(2) and as amended by section 311

13 of this Act, is amended by adding at the end the following

14 new subsection:

15 ‘‘(g) COLLECTION AND DISTRIBUTION OF SUPPORT

16 PAYMENTS.—

17 ‘‘(1) IN GENERAL.—The State shall use the

18 automated system required by this section, to the

19 maximum extent feasible, to assist and facilitate the

20 collection and disbursement of support payments

21 through the State disbursement unit operated under

22 section 454B, through the performance of functions,

23 including, at a minimum—
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1 ‘‘(A) transmission of orders and notices to

2 employers (and other debtors) for the withhold3 ing of wages and other income—

4 ‘‘(i) within 2 business days after re5 ceipt of notice of, and the income source

6 subject to, such withholding from a court,

7 another State, an employer, the Federal

8 Parent Locator Service, or another source

9 recognized by the State; and

10 ‘‘(ii) using uniform formats prescribed

11 by the Secretary;

12 ‘‘(B) ongoing monitoring to promptly iden13 tify failures to make timely payment of support;

14 and

15 ‘‘(C) automatic use of enforcement proce16 dures (including procedures authorized pursu17 ant to section 466(c)) if payments are not time18 ly made.

19 ‘‘(2) BUSINESS DAY DEFINED.—As used in

20 paragraph (1), the term ‘business day’ means a day

21 on which State offices are open for regular busi22 ness.’’.

23 (d) EFFECTIVE DATES.—
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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section

3 shall become effective on October 1, 1998.

4 (2) LIMITED EXCEPTION TO UNIT HANDLING

5 PAYMENTS.—Notwithstanding section 454B(b)(1) of

6 the Social Security Act, as added by this section,

7 any State which, as of the date of the enactment of

8 this Act, processes the receipt of child support pay9 ments through local courts, and, as of March 21,

10 1996, such courts were not funded under part D of

11 title IV of the Social Security Act, may, at the op12 tion of the State, continue to process through Sep13 tember 30, 1999, such payments through such

14 courts as processed such payments on or before such

15 date of enactment.

16 SEC. 313. STATE DIRECTORY OF NEW HIRES.

17 (a) STATE PLAN REQUIREMENT.—Section 454 (42

18 U.S.C. 654), as amended by sections 301(b), 303(a), and

19 312(a) of this Act, is amended—

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

21 (26);

22 (2) by striking the period at the end of para23 graph (27) and inserting ‘‘; and’’; and

24 (3) by adding after paragraph (27) the follow25 ing new paragraph:
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1 ‘‘(28) provide that, on and after October 1,

2 1997, the State will operate a State Directory of

3 New Hires in accordance with section 453A.’’.

4 (b) STATE DIRECTORY OF NEW HIRES.—Part D of

5 title IV (42 U.S.C. 651–669) is amended by inserting

6 after section 453 the following new section:

7 ‘‘SEC. 453A. STATE DIRECTORY OF NEW HIRES.

8 ‘‘(a) ESTABLISHMENT.—

9 ‘‘(1) IN GENERAL.—

10 ‘‘(A) REQUIREMENT FOR STATES THAT

11 HAVE NO DIRECTORY.—Except as provided in

12 subparagraph (B), not later than October 1,

13 1997, each State shall establish an automated

14 directory (to be known as the ‘State Directory

15 of New Hires’) which shall contain information

16 supplied in accordance with subsection (b) by

17 employers on each newly hired employee.

18 ‘‘(B) STATES WITH NEW HIRE REPORTING

19 IN EXISTENCE.—A State which has a new hire

20 reporting law in existence on the date of the en21 actment of this section may continue to operate

22 under the State law, but the State must meet

23 the requirements of subsection (g)(2) not later

24 than October 1, 1997, and the requirements of
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1 this section (other than subsection (g)(2)) not

2 later than October 1, 1998.

3 ‘‘(2) DEFINITIONS.—As used in this section:

4 ‘‘(A) EMPLOYEE.—The term ‘employee’—

5 ‘‘(i) means an individual who is an

6 employee within the meaning of chapter 24

7 of the Internal Revenue Code of 1986; and

8 ‘‘(ii) does not include an employee of

9 a Federal or State agency performing in10 telligence or counterintelligence functions,

11 if the head of such agency has determined

12 that reporting pursuant to paragraph (1)

13 with respect to the employee could endan14 ger the safety of the employee or com15 promise an ongoing investigation or intel16 ligence mission.

17 ‘‘(B) EMPLOYER.—

18 ‘‘(i) IN GENERAL.—The term ‘em19 ployer’ has the meaning given such term in

20 section 3401(d) of the Internal Revenue

21 Code of 1986 and includes any govern22 mental entity and any labor organization.

23 ‘‘(ii) LABOR ORGANIZATION.—The

24 term ‘labor organization’ shall have the

25 meaning given such term in section 2(5) of
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1 the National Labor Relations Act, and in2 cludes any entity (also known as a ‘hiring

3 hall’) which is used by the organization

4 and an employer to carry out requirements

5 described in section 8(f)(3) of such Act of

6 an agreement between the organization

7 and the employer.

8 ‘‘(b) EMPLOYER INFORMATION.—

9 ‘‘(1) REPORTING REQUIREMENT.—

10 ‘‘(A) IN GENERAL.—Except as provided in

11 subparagraphs (B) and (C), each employer shall

12 furnish to the Directory of New Hires of the

13 State in which a newly hired employee works, a

14 report that contains the name, address, and so15 cial security number of the employee, and the

16 name and address of, and identifying number

17 assigned under section 6109 of the Internal

18 Revenue Code of 1986 to, the employer.

19 ‘‘(B) MULTISTATE EMPLOYERS.—An em20 ployer that has employees who are employed in

21 2 or more States and that transmits reports

22 magnetically or electronically may comply with

23 subparagraph (A) by designating 1 State in

24 which such employer has employees to which

25 the employer will transmit the report described
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1 in subparagraph (A), and transmitting such re2 port to such State. Any employer that transmits

3 reports pursuant to this subparagraph shall no4 tify the Secretary in writing as to which State

5 such employer designates for the purpose of

6 sending reports.

7 ‘‘(C) FEDERAL GOVERNMENT EMPLOY8 ERS.—Any department, agency, or instrumen9 tality of the United States shall comply with

10 subparagraph (A) by transmitting the report

11 described in subparagraph (A) to the National

12 Directory of New Hires established pursuant to

13 section 453.

14 ‘‘(2) TIMING OF REPORT.—Each State may

15 provide the time within which the report required by

16 paragraph (1) shall be made with respect to an em17 ployee, but such report shall be made—

18 ‘‘(A) not later than 20 days after the date

19 the employer hires the employee; or

20 ‘‘(B) in the case of an employer transmit21 ting reports magnetically or electronically, by 2

22 monthly transmissions (if necessary) not less

23 than 12 days nor more than 16 days apart.

24 ‘‘(c) REPORTING FORMAT AND METHOD.—Each re25 port required by subsection (b) shall be made on a W–
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1 4 form or, at the option of the employer, an equivalent

2 form, and may be transmitted by 1st class mail, magneti3 cally, or electronically.

4 ‘‘(d) CIVIL MONEY PENALTIES ON NONCOMPLYING

5 EMPLOYERS.—The State shall have the option to set a

6 State civil money penalty which shall be less than—

7 ‘‘(1) $25; or

8 ‘‘(2) $500 if, under State law, the failure is the

9 result of a conspiracy between the employer and the

10 employee to not supply the required report or to

11 supply a false or incomplete report.

12 ‘‘(e) ENTRY OF EMPLOYER INFORMATION.—Infor13 mation shall be entered into the data base maintained by

14 the State Directory of New Hires within 5 business days

15 of receipt from an employer pursuant to subsection (b).

16 ‘‘(f) INFORMATION COMPARISONS.—

17 ‘‘(1) IN GENERAL.—Not later than May 1,

18 1998, an agency designated by the State shall, di19 rectly or by contract, conduct automated compari20 sons of the social security numbers reported by em21 ployers pursuant to subsection (b) and the social se22 curity numbers appearing in the records of the State

23 case registry for cases being enforced under the

24 State plan.
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1 ‘‘(2) NOTICE OF MATCH.—When an information

2 comparison conducted under paragraph (1) reveals a

3 match with respect to the social security number of

4 an individual required to provide support under a

5 support order, the State Directory of New Hires

6 shall provide the agency administering the State

7 plan approved under this part of the appropriate

8 State with the name, address, and social security

9 number of the employee to whom the social security

10 number is assigned, and the name and address of,

11 and identifying number assigned under section 6109

12 of the Internal Revenue Code of 1986 to, the em13 ployer.

14 ‘‘(g) TRANSMISSION OF INFORMATION.—

15 ‘‘(1) TRANSMISSION OF WAGE WITHHOLDING

16 NOTICES TO EMPLOYERS.—Within 2 business days

17 after the date information regarding a newly hired

18 employee is entered into the State Directory of New

19 Hires, the State agency enforcing the employee’s

20 child support obligation shall transmit a notice to

21 the employer of the employee directing the employer

22 to withhold from the wages of the employee an

23 amount equal to the monthly (or other periodic)

24 child support obligation (including any past due sup25 port obligation) of the employee, unless the employ-
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1 ee’s wages are not subject to withholding pursuant

2 to section 466(b)(3).

3 ‘‘(2) TRANSMISSIONS TO THE NATIONAL DIREC4 TORY OF NEW HIRES.—

5 ‘‘(A) NEW HIRE INFORMATION.—Within 3

6 business days after the date information re7 garding a newly hired employee is entered into

8 the State Directory of New Hires, the State Di9 rectory of New Hires shall furnish the informa10 tion to the National Directory of New Hires.

11 ‘‘(B) WAGE AND UNEMPLOYMENT COM12 PENSATION INFORMATION.—The State Direc13 tory of New Hires shall, on a quarterly basis,

14 furnish to the National Directory of New Hires

15 extracts of the reports required under section

16 303(a)(6) to be made to the Secretary of Labor

17 concerning the wages and unemployment com18 pensation paid to individuals, by such dates, in

19 such format, and containing such information

20 as the Secretary of Health and Human Services

21 shall specify in regulations.

22 ‘‘(3) BUSINESS DAY DEFINED.—As used in this

23 subsection, the term ‘business day’ means a day on

24 which State offices are open for regular business.

25 ‘‘(h) OTHER USES OF NEW HIRE INFORMATION.—
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1 ‘‘(1) LOCATION OF CHILD SUPPORT OBLI2 GORS.—The agency administering the State plan ap3 proved under this part shall use information received

4 pursuant to subsection (f)(2) to locate individuals

5 for purposes of establishing paternity and establish6 ing, modifying, and enforcing child support obliga7 tions.

8 ‘‘(2) VERIFICATION OF ELIGIBILITY FOR CER9 TAIN PROGRAMS.—A State agency responsible for

10 administering a program specified in section 1137(b)

11 shall have access to information reported by employ12 ers pursuant to subsection (b) of this section for

13 purposes of verifying eligibility for the program.

14 ‘‘(3) ADMINISTRATION OF EMPLOYMENT SECU15 RITY AND WORKERS’ COMPENSATION.—State agen16 cies operating employment security and workers’

17 compensation programs shall have access to informa18 tion reported by employers pursuant to subsection

19 (b) for the purposes of administering such pro20 grams.’’.

21 (c) QUARTERLY WAGE REPORTING.—Section

22 1137(a)(3) (42 U.S.C. 1320b–7(a)(3)) is amended—

23 (1) by inserting ‘‘(including State and local gov24 ernmental entities and labor organizations (as de-
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1 fined in section 453A(a)(2)(B)(iii))’’ after ‘‘employ2 ers’’; and

3 (2) by inserting ‘‘, and except that no report

4 shall be filed with respect to an employee of a State

5 or local agency performing intelligence or counter6 intelligence functions, if the head of such agency has

7 determined that filing such a report could endanger

8 the safety of the employee or compromise an ongo9 ing investigation or intelligence mission’’ after

10 ‘‘paragraph (2)’’.

11 SEC. 314. AMENDMENTS CONCERNING INCOME WITHHOLD12 ING.

13 (a) MANDATORY INCOME WITHHOLDING.—

14 (1) IN GENERAL.—Section 466(a)(1) (42

15 U.S.C. 666(a)(1)) is amended to read as follows:

16 ‘‘(1)(A) Procedures described in subsection (b)

17 for the withholding from income of amounts payable

18 as support in cases subject to enforcement under the

19 State plan.

20 ‘‘(B) Procedures under which the wages of a

21 person with a support obligation imposed by a sup22 port order issued (or modified) in the State before

23 October 1, 1996, if not otherwise subject to with24 holding under subsection (b), shall become subject to

25 withholding as provided in subsection (b) if arrear-
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1 ages occur, without the need for a judicial or admin2 istrative hearing.’’.

3 (2) CONFORMING AMENDMENTS.—

4 (A) Section 466(b) (42 U.S.C. 666(b)) is

5 amended in the matter preceding paragraph

6 (1), by striking ‘‘subsection (a)(1)’’ and insert7 ing ‘‘subsection (a)(1)(A)’’.

8 (B) Section 466(b)(4) (42 U.S.C.

9 666(b)(4)) is amended to read as follows:

10 ‘‘(4)(A) Such withholding must be carried out

11 in full compliance with all procedural due process re12 quirements of the State, and the State must send

13 notice to each noncustodial parent to whom para14 graph (1) applies—

15 ‘‘(i) that the withholding has commenced;

16 and

17 ‘‘(ii) of the procedures to follow if the non18 custodial parent desires to contest such with19 holding on the grounds that the withholding or

20 the amount withheld is improper due to a mis21 take of fact.

22 ‘‘(B) The notice under subparagraph (A) of this

23 paragraph shall include the information provided to

24 the employer under paragraph (6)(A).’’.
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1 (C) Section 466(b)(5) (42 U.S.C.

2 666(b)(5)) is amended by striking all that fol3 lows ‘‘administered by’’ and inserting ‘‘the

4 State through the State disbursement unit es5 tablished pursuant to section 454B, in accord6 ance with the requirements of section 454B.’’.

7 (D) Section 466(b)(6)(A) (42 U.S.C.

8 666(b)(6)(A)) is amended—

9 (i) in clause (i), by striking ‘‘to the

10 appropriate agency’’ and all that follows

11 and inserting ‘‘to the State disbursement

12 unit within 5 business days after the date

13 the amount would (but for this subsection)

14 have been paid or credited to the employee,

15 for distribution in accordance with this

16 part. The employer shall comply with the

17 procedural rules relating to income with18 holding of the State in which the employee

19 works, regardless of the State where the

20 notice originates.’’

21 (ii) in clause (ii), by inserting ‘‘be in

22 a standard format prescribed by the Sec23 retary, and’’ after ‘‘shall’’; and

24 (iii) by adding at the end the follow25 ing new clause:
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1 ‘‘(iii) As used in this subparagraph, the term

2 ‘business day’ means a day on which State offices

3 are open for regular business.’’.

4 (E) Section 466(b)(6)(D) (42 U.S.C.

5 666(b)(6)(D)) is amended by striking ‘‘any em6 ployer’’ and all that follows and inserting ‘‘any

7 employer who—

8 ‘‘(i) discharges from employment, refuses

9 to employ, or takes disciplinary action against

10 any noncustodial parent subject to wage with11 holding required by this subsection because of

12 the existence of such withholding and the obli13 gations or additional obligations which it im14 poses upon the employer; or

15 ‘‘(ii) fails to withhold support from wages

16 or to pay such amounts to the State disburse17 ment unit in accordance with this subsection.’’.

18 (F) Section 466(b) (42 U.S.C. 666(b)) is

19 amended by adding at the end the following

20 new paragraph:

21 ‘‘(11) Procedures under which the agency ad22 ministering the State plan approved under this part

23 may execute a withholding order without advance

24 notice to the obligor, including issuing the withhold25 ing order through electronic means.’’.
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1 (b) CONFORMING AMENDMENT.—Section 466(c) (42

2 U.S.C. 666(c)) is repealed.

3 SEC. 315. LOCATOR INFORMATION FROM INTERSTATE NET4 WORKS.

5 Section 466(a) (42 U.S.C. 666(a)) is amended by

6 adding at the end the following new paragraph:

7 ‘‘(12) LOCATOR INFORMATION FROM INTER8 STATE NETWORKS.—Procedures to ensure that all

9 Federal and State agencies conducting activities

10 under this part have access to any system used by

11 the State to locate an individual for purposes relat12 ing to motor vehicles or law enforcement.’’.

13 SEC. 316. EXPANSION OF THE FEDERAL PARENT LOCATOR

14 SERVICE.

15 (a) EXPANDED AUTHORITY TO LOCATE INDIVID16 UALS AND ASSETS.—Section 453 (42 U.S.C. 653) is

17 amended—

18 (1) in subsection (a), by striking all that follows

19 ‘‘subsection (c))’’ and inserting ‘‘, for the purpose of

20 establishing parentage, establishing, setting the

21 amount of, modifying, or enforcing child support ob22 ligations, or enforcing child custody or visitation or23 ders—

24 ‘‘(1) information on, or facilitating the discov25 ery of, the location of any individual—
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1 ‘‘(A) who is under an obligation to pay

2 child support or provide child custody or visita3 tion rights;

4 ‘‘(B) against whom such an obligation is

5 sought;

6 ‘‘(C) to whom such an obligation is owed,

7 including the individual’s social security number (or

8 numbers), most recent address, and the name, ad9 dress, and employer identification number of the in10 dividual’s employer;

11 ‘‘(2) information on the individual’s wages (or

12 other income) from, and benefits of, employment (in13 cluding rights to or enrollment in group health care

14 coverage); and

15 ‘‘(3) information on the type, status, location,

16 and amount of any assets of, or debts owed by or

17 to, any such individual.’’; and

18 (2) in subsection (b)—

19 (A) in the matter preceding paragraph (1),

20 by striking ‘‘social security’’ and all that follows

21 through ‘‘absent parent’’ and inserting ‘‘infor22 mation described in subsection (a)’’; and

23 (B) in the flush paragraph at the end, by

24 adding the following: ‘‘No information shall be

25 disclosed to any person if the State has notified
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1 the Secretary that the State has reasonable evi2 dence of domestic violence or child abuse and

3 the disclosure of such information could be

4 harmful to the custodial parent or the child of

5 such parent. Information received or transmit6 ted pursuant to this section shall be subject to

7 the safeguard provisions contained in section

8 454(26).’’.

9 (b) AUTHORIZED PERSON FOR INFORMATION RE10 GARDING VISITATION RIGHTS.—Section 453(c) (42

11 U.S.C. 653(c)) is amended—

12 (1) in paragraph (1), by striking ‘‘support’’ and

13 inserting ‘‘support or to seek to enforce orders pro14 viding child custody or visitation rights’’; and

15 (2) in paragraph (2), by striking ‘‘, or any

16 agent of such court; and’’ and inserting ‘‘or to issue

17 an order against a resident parent for child custody

18 or visitation rights, or any agent of such court;’’.

19 (c) REIMBURSEMENT FOR INFORMATION FROM FED20 ERAL AGENCIES.—Section 453(e)(2) (42 U.S.C.

21 653(e)(2)) is amended in the 4th sentence by inserting

22 ‘‘in an amount which the Secretary determines to be rea23 sonable payment for the information exchange (which

24 amount shall not include payment for the costs of obtain-
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1 ing, compiling, or maintaining the information)’’ before

2 the period.

3 (d) REIMBURSEMENT FOR REPORTS BY STATE

4 AGENCIES.—Section 453 (42 U.S.C. 653) is amended by

5 adding at the end the following new subsection:

6 ‘‘(g) REIMBURSEMENT FOR REPORTS BY STATE

7 AGENCIES.—The Secretary may reimburse Federal and

8 State agencies for the costs incurred by such entities in

9 furnishing information requested by the Secretary under

10 this section in an amount which the Secretary determines

11 to be reasonable payment for the information exchange

12 (which amount shall not include payment for the costs of

13 obtaining, compiling, or maintaining the information).’’.

14 (e) CONFORMING AMENDMENTS.—

15 (1) Sections 452(a)(9), 453(a), 453(b), 463(a),

16 463(e), and 463(f) (42 U.S.C. 652(a)(9), 653(a),

17 653(b), 663(a), 663(e), and 663(f)) are each amend18 ed by inserting ‘‘Federal’’ before ‘‘Parent’’ each

19 place such term appears.

20 (2) Section 453 (42 U.S.C. 653) is amended in

21 the heading by adding ‘‘FEDERAL’’ before ‘‘PAR22 ENT’’.

23 (f) NEW COMPONENTS.—Section 453 (42 U.S.C.

24 653), as amended by subsection (d) of this section, is
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1 amended by adding at the end the following new sub2 sections:

3 ‘‘(h) FEDERAL CASE REGISTRY OF CHILD SUPPORT

4 ORDERS.—

5 ‘‘(1) IN GENERAL.—Not later than October 1,

6 1998, in order to assist States in administering pro7 grams under State plans approved under this part

8 and programs funded under part A, and for the

9 other purposes specified in this section, the Sec10 retary shall establish and maintain in the Federal

11 Parent Locator Service an automated registry

12 (which shall be known as the ‘Federal Case Registry

13 of Child Support Orders’), which shall contain ab14 stracts of support orders and other information de15 scribed in paragraph (2) with respect to each case

16 in each State case registry maintained pursuant to

17 section 454A(e), as furnished (and regularly up18 dated), pursuant to section 454A(f), by State agen19 cies administering programs under this part.

20 ‘‘(2) CASE INFORMATION.—The information re21 ferred to in paragraph (1) with respect to a case

22 shall be such information as the Secretary may

23 specify in regulations (including the names, social

24 security numbers or other uniform identification

25 numbers, and State case identification numbers) to
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1 identify the individuals who owe or are owed support

2 (or with respect to or on behalf of whom support ob3 ligations are sought to be established), and the State

4 or States which have the case.

5 ‘‘(i) NATIONAL DIRECTORY OF NEW HIRES.—

6 ‘‘(1) IN GENERAL.—In order to assist States in

7 administering programs under State plans approved

8 under this part and programs funded under part A,

9 and for the other purposes specified in this section,

10 the Secretary shall, not later than October 1, 1997,

11 establish and maintain in the Federal Parent Loca12 tor Service an automated directory to be known as

13 the National Directory of New Hires, which shall

14 contain the information supplied pursuant to section

15 453A(g)(2).

16 ‘‘(2) ENTRY OF DATA.—Information shall be

17 entered into the data base maintained by the Na18 tional Directory of New Hires within 2 business

19 days of receipt pursuant to section 453A(g)(2).

20 ‘‘(3) ADMINISTRATION OF FEDERAL TAX

21 LAWS.—The Secretary of the Treasury shall have

22 access to the information in the National Directory

23 of New Hires for purposes of administering section

24 32 of the Internal Revenue Code of 1986, or the ad25 vance payment of the earned income tax credit
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1 under section 3507 of such Code, and verifying a

2 claim with respect to employment in a tax return.

3 ‘‘(4) LIST OF MULTISTATE EMPLOYERS.—The

4 Secretary shall maintain within the National Direc5 tory of New Hires a list of multistate employers that

6 report information regarding newly hired employees

7 pursuant to section 453A(b)(1)(B), and the State

8 which each such employer has designated to receive

9 such information.

10 ‘‘(j) INFORMATION COMPARISONS AND OTHER DIS11 CLOSURES.—

12 ‘‘(1) VERIFICATION BY SOCIAL SECURITY AD13 MINISTRATION.—

14 ‘‘(A) IN GENERAL.—The Secretary shall

15 transmit information on individuals and em16 ployers maintained under this section to the So17 cial Security Administration to the extent nec18 essary for verification in accordance with sub19 paragraph (B).

20 ‘‘(B) VERIFICATION BY SSA.—The Social

21 Security Administration shall verify the accu22 racy of, correct, or supply to the extent pos23 sible, and report to the Secretary, the following

24 information supplied by the Secretary pursuant

25 to subparagraph (A):
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1 ‘‘(i) The name, social security num2 ber, and birth date of each such individual.

3 ‘‘(ii) The employer identification num4 ber of each such employer.

5 ‘‘(2) INFORMATION COMPARISONS.—For the

6 purpose of locating individuals in a paternity estab7 lishment case or a case involving the establishment,

8 modification, or enforcement of a support order, the

9 Secretary shall—

10 ‘‘(A) compare information in the National

11 Directory of New Hires against information in

12 the support case abstracts in the Federal Case

13 Registry of Child Support Orders not less often

14 than every 2 business days; and

15 ‘‘(B) within 2 business days after such a

16 comparison reveals a match with respect to an

17 individual, report the information to the State

18 agency responsible for the case.

19 ‘‘(3) INFORMATION COMPARISONS AND DISCLO20 SURES OF INFORMATION IN ALL REGISTRIES FOR

21 TITLE IV PROGRAM PURPOSES.—To the extent and

22 with the frequency that the Secretary determines to

23 be effective in assisting States to carry out their re24 sponsibilities under programs operated under this
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1 part and programs funded under part A, the Sec2 retary shall—

3 ‘‘(A) compare the information in each com4 ponent of the Federal Parent Locator Service

5 maintained under this section against the infor6 mation in each other such component (other

7 than the comparison required by paragraph

8 (2)), and report instances in which such a com9 parison reveals a match with respect to an indi10 vidual to State agencies operating such pro11 grams; and

12 ‘‘(B) disclose information in such registries

13 to such State agencies.

14 ‘‘(4) PROVISION OF NEW HIRE INFORMATION

15 TO THE SOCIAL SECURITY ADMINISTRATION.—The

16 National Directory of New Hires shall provide the

17 Commissioner of Social Security with all information

18 in the National Directory, which shall be used to de19 termine the accuracy of payments under the supple20 mental security income program under title XVI and

21 in connection with benefits under title II.

22 ‘‘(5) RESEARCH.—The Secretary may provide

23 access to information reported by employers pursu24 ant to section 453A(b) for research purposes found

25 by the Secretary to be likely to contribute to achiev-
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1 ing the purposes of part A or this part, but without

2 personal identifiers.

3 ‘‘(k) FEES.—

4 ‘‘(1) FOR SSA VERIFICATION.—The Secretary

5 shall reimburse the Commissioner of Social Security,

6 at a rate negotiated between the Secretary and the

7 Commissioner, for the costs incurred by the Com8 missioner in performing the verification services de9 scribed in subsection (j).

10 ‘‘(2) FOR INFORMATION FROM STATE DIREC11 TORIES OF NEW HIRES.—The Secretary shall reim12 burse costs incurred by State directories of new

13 hires in furnishing information as required by sub14 section (j)(3), at rates which the Secretary deter15 mines to be reasonable (which rates shall not include

16 payment for the costs of obtaining, compiling, or

17 maintaining such information).

18 ‘‘(3) FOR INFORMATION FURNISHED TO STATE

19 AND FEDERAL AGENCIES.—A State or Federal agen20 cy that receives information from the Secretary pur21 suant to this section shall reimburse the Secretary

22 for costs incurred by the Secretary in furnishing the

23 information, at rates which the Secretary determines

24 to be reasonable (which rates shall include payment
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1 for the costs of obtaining, verifying, maintaining,

2 and comparing the information).

3 ‘‘(l) RESTRICTION ON DISCLOSURE AND USE.—In4 formation in the Federal Parent Locator Service, and in5 formation resulting from comparisons using such informa6 tion, shall not be used or disclosed except as expressly pro7 vided in this section, subject to section 6103 of the Inter8 nal Revenue Code of 1986.

9 ‘‘(m) INFORMATION INTEGRITY AND SECURITY.—

10 The Secretary shall establish and implement safeguards

11 with respect to the entities established under this section

12 designed to—

13 ‘‘(1) ensure the accuracy and completeness of

14 information in the Federal Parent Locator Service;

15 and

16 ‘‘(2) restrict access to confidential information

17 in the Federal Parent Locator Service to authorized

18 persons, and restrict use of such information to au19 thorized purposes.

20 ‘‘(n) FEDERAL GOVERNMENT REPORTING.—Each

21 department, agency, and instrumentality of the United

22 States shall on a quarterly basis report to the Federal

23 Parent Locator Service the name and social security num24 ber of each employee and the wages paid to the employee

25 during the previous quarter, except that such a report
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1 shall not be filed with respect to an employee of a depart2 ment, agency, or instrumentality performing intelligence

3 or counterintelligence functions, if the head of such de4 partment, agency, or instrumentality has determined that

5 filing such a report could endanger the safety of the em6 ployee or compromise an ongoing investigation or intel7 ligence mission.’’.

8 (g) CONFORMING AMENDMENTS.—

9 (1) TO PART D OF TITLE IV OF THE SOCIAL SE10 CURITY ACT.—

11 (A) Section 454(8)(B) (42 U.S.C.

12 654(8)(B)) is amended to read as follows:

13 ‘‘(B) the Federal Parent Locator Service

14 established under section 453;’’.

15 (B) Section 454(13) (42 U.S.C.654(13)) is

16 amended by inserting ‘‘and provide that infor17 mation requests by parents who are residents of

18 other States be treated with the same priority

19 as requests by parents who are residents of the

20 State submitting the plan’’ before the semi21 colon.

22 (2) TO FEDERAL UNEMPLOYMENT TAX ACT.—

23 Section 3304(a)(16) of the Internal Revenue Code of

24 1986 is amended—
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1 (A) by striking ‘‘Secretary of Health, Edu2 cation, and Welfare’’ each place such term ap3 pears and inserting ‘‘Secretary of Health and

4 Human Services’’;

5 (B) in subparagraph (B), by striking

6 ‘‘such information’’ and all that follows and in7 serting ‘‘information furnished under subpara8 graph (A) or (B) is used only for the purposes

9 authorized under such subparagraph;’’;

10 (C) by striking ‘‘and’’ at the end of sub11 paragraph (A);

12 (D) by redesignating subparagraph (B) as

13 subparagraph (C); and

14 (E) by inserting after subparagraph (A)

15 the following new subparagraph:

16 ‘‘(B) wage and unemployment compensa17 tion information contained in the records of

18 such agency shall be furnished to the Secretary

19 of Health and Human Services (in accordance

20 with regulations promulgated by such Sec21 retary) as necessary for the purposes of the Na22 tional Directory of New Hires established under

23 section 453(i) of the Social Security Act, and’’.

24 (3) TO STATE GRANT PROGRAM UNDER TITLE

25 III OF THE SOCIAL SECURITY ACT.—Subsection (h)
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1 of section 303 (42 U.S.C. 503) is amended to read

2 as follows:

3 ‘‘(h)(1) The State agency charged with the adminis4 tration of the State law shall, on a reimbursable basis—

5 ‘‘(A) disclose quarterly, to the Secretary of

6 Health and Human Services, wage and claim infor7 mation, as required pursuant to section 453(i)(1),

8 contained in the records of such agency;

9 ‘‘(B) ensure that information provided pursuant

10 to subparagraph (A) meets such standards relating

11 to correctness and verification as the Secretary of

12 Health and Human Services, with the concurrence

13 of the Secretary of Labor, may find necessary; and

14 ‘‘(C) establish such safeguards as the Secretary

15 of Labor determines are necessary to insure that in16 formation disclosed under subparagraph (A) is used

17 only for purposes of section 453(i)(1) in carrying out

18 the child support enforcement program under title

19 IV.

20 ‘‘(2) Whenever the Secretary of Labor, after reason21 able notice and opportunity for hearing to the State agen22 cy charged with the administration of the State law, finds

23 that there is a failure to comply substantially with the re24 quirements of paragraph (1), the Secretary of Labor shall

25 notify such State agency that further payments will not
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1 be made to the State until the Secretary of Labor is satis2 fied that there is no longer any such failure. Until the

3 Secretary of Labor is so satisfied, the Secretary shall

4 make no future certification to the Secretary of the Treas5 ury with respect to the State.

6 ‘‘(3) For purposes of this subsection—

7 ‘‘(A) the term ‘wage information’ means infor8 mation regarding wages paid to an individual, the

9 social security account number of such individual,

10 and the name, address, State, and the Federal em11 ployer identification number of the employer paying

12 such wages to such individual; and

13 ‘‘(B) the term ‘claim information’ means infor14 mation regarding whether an individual is receiving,

15 has received, or has made application for, unemploy16 ment compensation, the amount of any such com17 pensation being received (or to be received by such

18 individual), and the individual’s current (or most re19 cent) home address.’’.

20 (4) DISCLOSURE OF CERTAIN INFORMATION TO

21 AGENTS OF CHILD SUPPORT ENFORCEMENT AGEN22 CIES.—

23 (A) IN GENERAL.—Paragraph (6) of sec24 tion 6103(l) of the Internal Revenue Code of

25 1986 (relating to disclosure of return informa-
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1 tion to Federal, State, and local child support

2 enforcement agencies) is amended by redesig3 nating subparagraph (B) as subparagraph (C)

4 and by inserting after subparagraph (A) the fol5 lowing new subparagraph:

6 ‘‘(B) DISCLOSURE TO CERTAIN AGENTS.—

7 The following information disclosed to any child

8 support enforcement agency under subpara9 graph (A) with respect to any individual with

10 respect to whom child support obligations are

11 sought to be established or enforced may be dis12 closed by such agency to any agent of such

13 agency which is under contract with such agen14 cy to carry out the purposes described in sub15 paragraph (C):

16 ‘‘(i) The address and social security

17 account number (or numbers) of such indi18 vidual.

19 ‘‘(ii) The amount of any reduction

20 under section 6402(c) (relating to offset of

21 past-due support against overpayments) in

22 any overpayment otherwise payable to such

23 individual.’’

24 (B) CONFORMING AMENDMENTS.—
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1 (i) Paragraph (3) of section 6103(a)

2 of such Code is amended by striking

3 ‘‘(l)(12)’’ and inserting ‘‘paragraph (6) or

4 (12) of subsection (l)’’.

5 (ii) Subparagraph (C) of section

6 6103(l)(6) of such Code, as redesignated

7 by subsection (a), is amended to read as

8 follows:

9 ‘‘(C) RESTRICTION ON DISCLOSURE.—In10 formation may be disclosed under this para11 graph only for purposes of, and to the extent

12 necessary in, establishing and collecting child

13 support obligations from, and locating, individ14 uals owing such obligations.’’

15 (iii) The material following subpara16 graph (F) of section 6103(p)(4) of such

17 Code is amended by striking ‘‘subsection

18 (l)(12)(B)’’ and inserting ‘‘paragraph

19 (6)(A) or (12)(B) of subsection (l)’’.

20 (h) REQUIREMENT FOR COOPERATION.—The Sec21 retary of Labor and the Secretary of Health and Human

22 Services shall work jointly to develop cost-effective and ef23 ficient methods of accessing the information in the various

24 State directories of new hires and the National Directory

25 of New Hires as established pursuant to the amendments
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1 made by this subtitle. In developing these methods the

2 Secretaries shall take into account the impact, including

3 costs, on the States, and shall also consider the need to

4 insure the proper and authorized use of wage record infor5 mation.

6 SEC. 317. COLLECTION AND USE OF SOCIAL SECURITY

7 NUMBERS FOR USE IN CHILD SUPPORT EN8 FORCEMENT.

9 (a) STATE LAW REQUIREMENT.—Section 466(a) (42

10 U.S.C. 666(a)), as amended by section 315 of this Act,

11 is amended by adding at the end the following new para12 graph:

13 ‘‘(13) RECORDING OF SOCIAL SECURITY NUM14 BERS IN CERTAIN FAMILY MATTERS.—Procedures

15 requiring that the social security number of—

16 ‘‘(A) any applicant for a professional li17 cense, commercial driver’s license, occupational

18 license, or marriage license be recorded on the

19 application;

20 ‘‘(B) any individual who is subject to a di21 vorce decree, support order, or paternity deter22 mination or acknowledgment be placed in the

23 records relating to the matter; and
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1 ‘‘(C) any individual who has died be placed

2 in the records relating to the death and be re3 corded on the death certificate.

4 For purposes of subparagraph (A), if a State allows

5 the use of a number other than the social security

6 number, the State shall so advise any applicants.’’.

7 (b) CONFORMING AMENDMENTS.—Section

8 205(c)(2)(C) (42 U.S.C. 405(c)(2)(C)), as amended by

9 section 321(a)(9) of the Social Security Independence and

10 Program Improvements Act of 1994, is amended—

11 (1) in clause (i), by striking ‘‘may require’’ and

12 inserting ‘‘shall require’’;

13 (2) in clause (ii), by inserting after the 1st sen14 tence the following: ‘‘In the administration of any

15 law involving the issuance of a marriage certificate

16 or license, each State shall require each party named

17 in the certificate or license to furnish to the State

18 (or political subdivision thereof), or any State agen19 cy having administrative responsibility for the law

20 involved, the social security number of the party.’’;

21 (3) in clause (ii), by inserting ‘‘or marriage cer22 tificate’’ after ‘‘Such numbers shall not be recorded

23 on the birth certificate’’.

24 (4) in clause (vi), by striking ‘‘may’’ and insert25 ing ‘‘shall’’; and
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1 (5) by adding at the end the following new

2 clauses:

3 ‘‘(x) An agency of a State (or a politi4 cal subdivision thereof) charged with the

5 administration of any law concerning the

6 issuance or renewal of a license, certificate,

7 permit, or other authorization to engage in

8 a profession, an occupation, or a commer9 cial activity shall require all applicants for

10 issuance or renewal of the license, certifi11 cate, permit, or other authorization to pro12 vide the applicant’s social security number

13 to the agency for the purpose of admin14 istering such laws, and for the purpose of

15 responding to requests for information

16 from an agency operating pursuant to part

17 D of title IV.

18 ‘‘(xi) All divorce decrees, support or19 ders, and paternity determinations issued,

20 and all paternity acknowledgments made,

21 in each State shall include the social secu22 rity number of each party to the decree,

23 order, determination, or acknowledgment

24 in the records relating to the matter, for

25 the purpose of responding to requests for
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1 information from an agency operating pur2 suant to part D of title IV.’’.

3 Subtitle C—Streamlining and

4 Uniformity of Procedures

5 SEC. 321. ADOPTION OF UNIFORM STATE LAWS.

6 Section 466 (42 U.S.C. 666) is amended by adding

7 at the end the following new subsection:

8 ‘‘(f) UNIFORM INTERSTATE FAMILY SUPPORT

9 ACT.—

10 ‘‘(1) ENACTMENT AND USE.—In order to sat11 isfy section 454(20)(A), on and after January 1,

12 1998, each State must have in effect the Uniform

13 Interstate Family Support Act, as approved by the

14 American Bar Association on February 9, 1993, to15 gether with any amendments officially adopted be16 fore January 1, 1998 by the National Conference of

17 Commissioners on Uniform State Laws.

18 ‘‘(2) EMPLOYERS TO FOLLOW PROCEDURAL

19 RULES OF STATE WHERE EMPLOYEE WORKS.—The

20 State law enacted pursuant to paragraph (1) shall

21 provide that an employer that receives an income

22 withholding order or notice pursuant to section 501

23 of the Uniform Interstate Family Support Act follow

24 the procedural rules that apply with respect to such
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1 order or notice under the laws of the State in which

2 the obligor works.

3 SEC. 322. IMPROVEMENTS TO FULL FAITH AND CREDIT

4 FOR CHILD SUPPORT ORDERS.

5 Section 1738B of title 28, United States Code, is

6 amended—

7 (1) in subsection (a)(2), by striking ‘‘subsection

8 (e)’’ and inserting ‘‘subsections (e), (f), and (i)’’;

9 (2) in subsection (b), by inserting after the 2nd

10 undesignated paragraph the following:

11 ‘‘ ‘child’s home State’ means the State in which

12 a child lived with a parent or a person acting as par13 ent for at least 6 consecutive months immediately

14 preceding the time of filing of a petition or com15 parable pleading for support and, if a child is less

16 than 6 months old, the State in which the child lived

17 from birth with any of them. A period of temporary

18 absence of any of them is counted as part of the 6-

19 month period.’’;

20 (3) in subsection (c), by inserting ‘‘by a court

21 of a State’’ before ‘‘is made’’;

22 (4) in subsection (c)(1), by inserting ‘‘and sub23 sections (e), (f), and (g)’’ after ‘‘located’’;

24 (5) in subsection (d)—
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1 (A) by inserting ‘‘individual’’ before ‘‘con2 testant’’; and

3 (B) by striking ‘‘subsection (e)’’ and in4 serting ‘‘subsections (e) and (f)’’;

5 (6) in subsection (e), by striking ‘‘make a modi6 fication of a child support order with respect to a

7 child that is made’’ and inserting ‘‘modify a child

8 support order issued’’;

9 (7) in subsection (e)(1), by inserting ‘‘pursuant

10 to subsection (i)’’ before the semicolon;

11 (8) in subsection (e)(2)—

12 (A) by inserting ‘‘individual’’ before ‘‘con13 testant’’ each place such term appears; and

14 (B) by striking ‘‘to that court’s making the

15 modification and assuming’’ and inserting ‘‘with

16 the State of continuing, exclusive jurisdiction

17 for a court of another State to modify the order

18 and assume’’;

19 (9) by redesignating subsections (f) and (g) as

20 subsections (g) and (h), respectively;

21 (10) by inserting after subsection (e) the follow22 ing new subsection:

23 ‘‘(f) RECOGNITION OF CHILD SUPPORT ORDERS.—

24 If 1 or more child support orders have been issued with

25 regard to an obligor and a child, a court shall apply the
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1 following rules in determining which order to recognize for

2 purposes of continuing, exclusive jurisdiction and enforce3 ment:

4 ‘‘(1) If only 1 court has issued a child support

5 order, the order of that court must be recognized.

6 ‘‘(2) If 2 or more courts have issued child sup7 port orders for the same obligor and child, and only

8 1 of the courts would have continuing, exclusive ju9 risdiction under this section, the order of that court

10 must be recognized.

11 ‘‘(3) If 2 or more courts have issued child sup12 port orders for the same obligor and child, and more

13 than 1 of the courts would have continuing, exclusive

14 jurisdiction under this section, an order issued by a

15 court in the current home State of the child must

16 be recognized, but if an order has not been issued

17 in the current home State of the child, the order

18 most recently issued must be recognized.

19 ‘‘(4) If 2 or more courts have issued child sup20 port orders for the same obligor and child, and none

21 of the courts would have continuing, exclusive juris22 diction under this section, a court may issue a child

23 support order, which must be recognized.
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1 ‘‘(5) The court that has issued an order recog2 nized under this subsection is the court having con3 tinuing, exclusive jurisdiction.’’;

4 (11) in subsection (g) (as so redesignated)—

5 (A) by striking ‘‘PRIOR’’ and inserting

6 ‘‘MODIFIED’’; and

7 (B) by striking ‘‘subsection (e)’’ and in8 serting ‘‘subsections (e) and (f)’’;

9 (12) in subsection (h) (as so redesignated)—

10 (A) in paragraph (2), by inserting ‘‘includ11 ing the duration of current payments and other

12 obligations of support’’ before the comma; and

13 (B) in paragraph (3), by inserting ‘‘arrears

14 under’’ after ‘‘enforce’’; and

15 (13) by adding at the end the following new

16 subsection:

17 ‘‘(i) REGISTRATION FOR MODIFICATION.—If there is

18 no individual contestant or child residing in the issuing

19 State, the party or support enforcement agency seeking

20 to modify, or to modify and enforce, a child support order

21 issued in another State shall register that order in a State

22 with jurisdiction over the nonmovant for the purpose of

23 modification.’’.
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1 SEC. 323. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE

2 CASES.

3 Section 466(a) (42 U.S.C. 666(a)), as amended by

4 sections 315 and 317(a) of this Act, is amended by adding

5 at the end the following new paragraph:

6 ‘‘(14) ADMINISTRATIVE ENFORCEMENT IN

7 INTERSTATE CASES.—Procedures under which—

8 ‘‘(A)(i) the State shall respond within 5

9 business days to a request made by another

10 State to enforce a support order; and

11 ‘‘(ii) the term ‘business day’ means a day

12 on which State offices are open for regular

13 business;

14 ‘‘(B) the State may, by electronic or other

15 means, transmit to another State a request for

16 assistance in a case involving the enforcement

17 of a support order, which request—

18 ‘‘(i) shall include such information as

19 will enable the State to which the request

20 is transmitted to compare the information

21 about the case to the information in the

22 data bases of the State; and

23 ‘‘(ii) shall constitute a certification by

24 the requesting State—
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1 ‘‘(I) of the amount of support

2 under the order the payment of which

3 is in arrears; and

4 ‘‘(II) that the requesting State

5 has complied with all procedural due

6 process requirements applicable to the

7 case;

8 ‘‘(C) if the State provides assistance to an9 other State pursuant to this paragraph with re10 spect to a case, neither State shall consider the

11 case to be transferred to the caseload of such

12 other State; and

13 ‘‘(D) the State shall maintain records of—

14 ‘‘(i) the number of such requests for

15 assistance received by the State;

16 ‘‘(ii) the number of cases for which

17 the State collected support in response to

18 such a request; and

19 ‘‘(iii) the amount of such collected

20 support.’’.

21 SEC. 324. USE OF FORMS IN INTERSTATE ENFORCEMENT.

22 (a) PROMULGATION.—Section 452(a) (42 U.S.C.

23 652(a)) is amended—

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

25 (9);
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1 (2) by striking the period at the end of para2 graph (10) and inserting ‘‘; and’’; and

3 (3) by adding at the end the following new

4 paragraph:

5 ‘‘(11) not later than October 1, 1996, after con6 sulting with the State directors of programs under

7 this part, promulgate forms to be used by States in

8 interstate cases for—

9 ‘‘(A) collection of child support through in10 come withholding;

11 ‘‘(B) imposition of liens; and

12 ‘‘(C) administrative subpoenas.’’.

13 (b) USE BY STATES.—Section 454(9) (42 U.S.C.

14 654(9)) is amended—

15 (1) by striking ‘‘and’’ at the end of subpara16 graph (C);

17 (2) by inserting ‘‘and’’ at the end of subpara18 graph (D); and

19 (3) by adding at the end the following new sub20 paragraph:

21 ‘‘(E) not later than March 1, 1997, in

22 using the forms promulgated pursuant to sec23 tion 452(a)(11) for income withholding, imposi24 tion of liens, and issuance of administrative

25 subpoenas in interstate child support cases;’’.
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1 SEC. 325. STATE LAWS PROVIDING EXPEDITED PROCE2 DURES.

3 (a) STATE LAW REQUIREMENTS.—Section 466 (42

4 U.S.C. 666), as amended by section 314 of this Act, is

5 amended—

6 (1) in subsection (a)(2), by striking the first

7 sentence and inserting the following: ‘‘Expedited ad8 ministrative and judicial procedures (including the

9 procedures specified in subsection (c)) for establish10 ing paternity and for establishing, modifying, and

11 enforcing support obligations.’’; and

12 (2) by inserting after subsection (b) the follow13 ing new subsection:

14 ‘‘(c) EXPEDITED PROCEDURES.—The procedures

15 specified in this subsection are the following:

16 ‘‘(1) ADMINISTRATIVE ACTION BY STATE AGEN17 CY.—Procedures which give the State agency the au18 thority to take the following actions relating to es19 tablishment of paternity or to establishment, modi20 fication, or enforcement of support orders, without

21 the necessity of obtaining an order from any other

22 judicial or administrative tribunal, and to recognize

23 and enforce the authority of State agencies of other

24 States) to take the following actions:
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1 ‘‘(A) GENETIC TESTING.—To order genetic

2 testing for the purpose of paternity establish3 ment as provided in section 466(a)(5).

4 ‘‘(B) FINANCIAL OR OTHER INFORMA5 TION.—To subpoena any financial or other in6 formation needed to establish, modify, or en7 force a support order, and to impose penalties

8 for failure to respond to such a subpoena.

9 ‘‘(C) RESPONSE TO STATE AGENCY RE10 QUEST.—To require all entities in the State (in11 cluding for-profit, nonprofit, and governmental

12 employers) to provide promptly, in response to

13 a request by the State agency of that or any

14 other State administering a program under this

15 part, information on the employment, com16 pensation, and benefits of any individual em17 ployed by such entity as an employee or con18 tractor, and to sanction failure to respond to

19 any such request.

20 ‘‘(D) ACCESS TO CERTAIN RECORDS.—To

21 obtain access, subject to safeguards on privacy

22 and information security, to the following

23 records (including automated access, in the case

24 of records maintained in automated data

25 bases):
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1 ‘‘(i) Records of other State and local

2 government agencies, including—

3 ‘‘(I) vital statistics (including

4 records of marriage, birth, and di5 vorce);

6 ‘‘(II) State and local tax and rev7 enue records (including information

8 on residence address, employer, in9 come and assets);

10 ‘‘(III) records concerning real

11 and titled personal property;

12 ‘‘(IV) records of occupational and

13 professional licenses, and records con14 cerning the ownership and control of

15 corporations, partnerships, and other

16 business entities;

17 ‘‘(V) employment security

18 records;

19 ‘‘(VI) records of agencies admin20 istering public assistance programs;

21 ‘‘(VII) records of the motor vehi22 cle department; and

23 ‘‘(VIII) corrections records.

24 ‘‘(ii) Certain records held by private

25 entities with respect to individuals who owe
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1 or are owed support (or against or with re2 spect to whom a support obligation is

3 sought), consisting of—

4 ‘‘(I) the names and addresses of

5 such individuals and the names and

6 addresses of the employers of such in7 dividuals, as appearing in customer

8 records of public utilities and cable

9 television companies; and

10 ‘‘(II) information (including in11 formation on assets and liabilities) on

12 such individuals held by financial in13 stitutions,

14 subject to the nonliability of such entities

15 arising from affording such access under

16 this subparagraph.

17 ‘‘(E) CHANGE IN PAYEE.—In cases in

18 which support is subject to an assignment in

19 order to comply with a requirement imposed

20 pursuant to part A or section 1912, or to a re21 quirement to pay through the State disburse22 ment unit established pursuant to section

23 454B, upon providing notice to obligor and obli24 gee, to direct the obligor or other payor to
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1 change the payee to the appropriate government

2 entity.

3 ‘‘(F) INCOME WITHHOLDING.—To order

4 income withholding in accordance with sub5 sections (a)(1) and (b) of section 466.

6 ‘‘(G) SECURING ASSETS.—In cases in

7 which there is a support arrearage, to secure

8 assets to satisfy the arrearage by—

9 ‘‘(i) intercepting or seizing periodic or

10 lump-sum payments from—

11 ‘‘(I) a State or local agency, in12 cluding unemployment compensation,

13 workers’ compensation, and other ben14 efits; and

15 ‘‘(II) judgments, settlements, and

16 lotteries;

17 ‘‘(ii) attaching and seizing assets of

18 the obligor held in financial institutions;

19 ‘‘(iii) attaching public and private re20 tirement funds; and

21 ‘‘(iv) imposing liens in accordance

22 with subsection (a)(4) and, in appropriate

23 cases, to force sale of property and dis24 tribution of proceeds.
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1 ‘‘(H) INCREASE MONTHLY PAYMENTS.—

2 For the purpose of securing overdue support, to

3 increase the amount of monthly support pay4 ments to include amounts for arrearages, sub5 ject to such conditions or limitations as the

6 State may provide.

7 Such procedures shall be subject to due process safe8 guards, including (as appropriate) requirements for

9 notice, opportunity to contest the action, and oppor10 tunity for an appeal on the record to an independent

11 administrative or judicial tribunal.

12 ‘‘(2) SUBSTANTIVE AND PROCEDURAL RULES.—

13 The expedited procedures required under subsection

14 (a)(2) shall include the following rules and author15 ity, applicable with respect to all proceedings to es16 tablish paternity or to establish, modify, or enforce

17 support orders:

18 ‘‘(A) LOCATOR INFORMATION; PRESUMP19 TIONS CONCERNING NOTICE.—Procedures

20 under which—

21 ‘‘(i) each party to any paternity or

22 child support proceeding is required (sub23 ject to privacy safeguards) to file with the

24 tribunal and the State case registry upon

25 entry of an order, and to update as appro-
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1 priate, information on location and identity

2 of the party, including social security num3 ber, residential and mailing addresses, tele4 phone number, driver’s license number,

5 and name, address, and telephone number

6 of employer; and

7 ‘‘(ii) in any subsequent child support

8 enforcement action between the parties,

9 upon sufficient showing that diligent effort

10 has been made to ascertain the location of

11 such a party, the tribunal may deem State

12 due process requirements for notice and

13 service of process to be met with respect to

14 the party, upon delivery of written notice

15 to the most recent residential or employer

16 address filed with the tribunal pursuant to

17 clause (i).

18 ‘‘(B) STATEWIDE JURISDICTION.—Proce19 dures under which—

20 ‘‘(i) the State agency and any admin21 istrative or judicial tribunal with authority

22 to hear child support and paternity cases

23 exerts statewide jurisdiction over the par24 ties; and
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1 ‘‘(ii) in a State in which orders are is2 sued by courts or administrative tribunals,

3 a case may be transferred between local ju4 risdictions in the State without need for

5 any additional filing by the petitioner, or

6 service of process upon the respondent, to

7 retain jurisdiction over the parties.

8 ‘‘(3) COORDINATION WITH ERISA.—Notwith9 standing subsection (d) of section 514 of the Em10 ployee Retirement Income Security Act of 1974 (re11 lating to effect on other laws), nothing in this sub12 section shall be construed to alter, amend, modify,

13 invalidate, impair, or supersede subsections (a), (b),

14 and (c) of such section 514 as it applies with respect

15 to any procedure referred to in paragraph (1) and

16 any expedited procedure referred to in paragraph

17 (2), except to the extent that such procedure would

18 be consistent with the requirements of section

19 206(d)(3) of such Act (relating to qualified domestic

20 relations orders) or the requirements of section

21 609(a) of such Act (relating to qualified medical

22 child support orders) if the reference in such section

23 206(d)(3) to a domestic relations order and the ref24 erence in such section 609(a) to a medical child sup25 port order were a reference to a support order re-
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1 ferred to in paragraphs (1) and (2) relating to the

2 same matters, respectively.’’.

3 (b) AUTOMATION OF STATE AGENCY FUNCTIONS.—

4 Section 454A, as added by section 344(a)(2) and as

5 amended by sections 311 and 312(c) of this Act, is amend6 ed by adding at the end the following new subsection:

7 ‘‘(h) EXPEDITED ADMINISTRATIVE PROCEDURES.—

8 The automated system required by this section shall be

9 used, to the maximum extent feasible, to implement the

10 expedited administrative procedures required by section

11 466(c).’’.

12 Subtitle D—Paternity

13 Establishment

14 SEC. 331. STATE LAWS CONCERNING PATERNITY ESTAB15 LISHMENT.

16 (a) STATE LAWS REQUIRED.—Section 466(a)(5) (42

17 U.S.C. 666(a)(5)) is amended to read as follows:

18 ‘‘(5) PROCEDURES CONCERNING PATERNITY ES19 TABLISHMENT.—

20 ‘‘(A) ESTABLISHMENT PROCESS AVAIL21 ABLE FROM BIRTH UNTIL AGE 18.—

22 ‘‘(i) Procedures which permit the es23 tablishment of the paternity of a child at

24 any time before the child attains 18 years

25 of age.
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1 ‘‘(ii) As of August 16, 1984, clause (i)

2 shall also apply to a child for whom pater3 nity has not been established or for whom

4 a paternity action was brought but dis5 missed because a statute of limitations of

6 less than 18 years was then in effect in

7 the State.

8 ‘‘(B) PROCEDURES CONCERNING GENETIC

9 TESTING.—

10 ‘‘(i) GENETIC TESTING REQUIRED IN

11 CERTAIN CONTESTED CASES.—Procedures

12 under which the State is required, in a

13 contested paternity case (unless otherwise

14 barred by State law) to require the child

15 and all other parties (other than individ16 uals found under section 454(29) to have

17 good cause and other exceptions for refus18 ing to cooperate) to submit to genetic tests

19 upon the request of any such party, if the

20 request is supported by a sworn statement

21 by the party—

22 ‘‘(I) alleging paternity, and set23 ting forth facts establishing a reason24 able possibility of the requisite sexual

25 contact between the parties; or
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1 ‘‘(II) denying paternity, and set2 ting forth facts establishing a reason3 able possibility of the nonexistence of

4 sexual contact between the parties.

5 ‘‘(ii) OTHER REQUIREMENTS.—Proce6 dures which require the State agency, in

7 any case in which the agency orders ge8 netic testing—

9 ‘‘(I) to pay costs of such tests,

10 subject to recoupment (if the State so

11 elects) from the alleged father if pa12 ternity is established; and

13 ‘‘(II) to obtain additional testing

14 in any case if an original test result is

15 contested, upon request and advance

16 payment by the contestant.

17 ‘‘(C) VOLUNTARY PATERNITY ACKNOWL18 EDGMENT.—

19 ‘‘(i) SIMPLE CIVIL PROCESS.—Proce20 dures for a simple civil process for volun21 tarily acknowledging paternity under which

22 the State must provide that, before a

23 mother and a putative father can sign an

24 acknowledgment of paternity, the mother

25 and the putative father must be given no-
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1 tice, orally and in writing, of the alter2 natives to, the legal consequences of, and

3 the rights (including, if 1 parent is a

4 minor, any rights afforded due to minority

5 status) and responsibilities that arise from,

6 signing the acknowledgment.

7 ‘‘(ii) HOSPITAL-BASED PROGRAM.—

8 Such procedures must include a hospital9 based program for the voluntary acknowl10 edgment of paternity focusing on the pe11 riod immediately before or after the birth

12 of a child, unless good cause and other ex13 ceptions exist which—

14 ‘‘(I) shall be defined, taking into

15 account the best interests of the child,

16 and

17 ‘‘(II) shall be applied in each

18 case,

19 by, at the option of the State, the State

20 agency administering the State program

21 under part A, this part, title XV, or title

22 XIX.

23 ‘‘(iii) PATERNITY ESTABLISHMENT

24 SERVICES.—
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1 ‘‘(I) STATE-OFFERED SERV2 ICES.—Such procedures must require

3 the State agency responsible for main4 taining birth records to offer vol5 untary paternity establishment serv6 ices.

7 ‘‘(II) REGULATIONS.—

8 ‘‘(aa) SERVICES OFFERED

9 BY HOSPITALS AND BIRTH

10 RECORD AGENCIES.—The Sec11 retary shall prescribe regulations

12 governing voluntary paternity es13 tablishment services offered by

14 hospitals and birth record agen15 cies.

16 ‘‘(bb) SERVICES OFFERED

17 BY OTHER ENTITIES.—The Sec18 retary shall prescribe regulations

19 specifying the types of other enti20 ties that may offer voluntary pa21 ternity establishment services,

22 and governing the provision of

23 such services, which shall include

24 a requirement that such an entity

25 must use the same notice provi-
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1 sions used by, use the same ma2 terials used by, provide the per3 sonnel providing such services

4 with the same training provided

5 by, and evaluate the provision of

6 such services in the same manner

7 as the provision of such services

8 is evaluated by, voluntary pater9 nity establishment programs of

10 hospitals and birth record agen11 cies.

12 ‘‘(iv) USE OF PATERNITY ACKNOWL13 EDGMENT AFFIDAVIT.—Such procedures

14 must require the State to develop and use

15 an affidavit for the voluntary acknowledg16 ment of paternity which includes the mini17 mum requirements of the affidavit speci18 fied by the Secretary under section

19 452(a)(7) for the voluntary acknowledg20 ment of paternity, and to give full faith

21 and credit to such an affidavit signed in

22 any other State according to its proce23 dures.

24 ‘‘(D) STATUS OF SIGNED PATERNITY AC25 KNOWLEDGMENT.—
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1 ‘‘(i) INCLUSION IN BIRTH RECORDS.—

2 Procedures under which the name of the

3 father shall be included on the record of

4 birth of the child of unmarried parents

5 only if—

6 ‘‘(I) the father and mother have

7 signed a voluntary acknowledgment of

8 paternity; or

9 ‘‘(II) a court or an administrative

10 agency of competent jurisdiction has

11 issued an adjudication of paternity.

12 Nothing in this clause shall preclude a

13 State agency from obtaining an admission

14 of paternity from the father for submission

15 in a judicial or administrative proceeding,

16 or prohibit the issuance of an order in a

17 judicial or administrative proceeding which

18 bases a legal finding of paternity on an ad19 mission of paternity by the father and any

20 other additional showing required by State

21 law.

22 ‘‘(ii) LEGAL FINDING OF PATER23 NITY.—Procedures under which a signed

24 voluntary acknowledgment of paternity is

25 considered a legal finding of paternity,
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1 subject to the right of any signatory to re2 scind the acknowledgment within the ear3 lier of—

4 ‘‘(I) 60 days; or

5 ‘‘(II) the date of an administra6 tive or judicial proceeding relating to

7 the child (including a proceeding to

8 establish a support order) in which

9 the signatory is a party.

10 ‘‘(iii) CONTEST.—Procedures under

11 which, after the 60-day period referred to

12 in clause (ii), a signed voluntary acknowl13 edgment of paternity may be challenged in

14 court only on the basis of fraud, duress, or

15 material mistake of fact, with the burden

16 of proof upon the challenger, and under

17 which the legal responsibilities (including

18 child support obligations) of any signatory

19 arising from the acknowledgment may not

20 be suspended during the challenge, except

21 for good cause shown.

22 ‘‘(E) BAR ON ACKNOWLEDGMENT RATIFI23 CATION PROCEEDINGS.—Procedures under

24 which judicial or administrative proceedings are
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1 not required or permitted to ratify an unchal2 lenged acknowledgment of paternity.

3 ‘‘(F) ADMISSIBILITY OF GENETIC TESTING

4 RESULTS.—Procedures—

5 ‘‘(i) requiring the admission into evi6 dence, for purposes of establishing pater7 nity, of the results of any genetic test that

8 is—

9 ‘‘(I) of a type generally acknowl10 edged as reliable by accreditation bod11 ies designated by the Secretary; and

12 ‘‘(II) performed by a laboratory

13 approved by such an accreditation

14 body;

15 ‘‘(ii) requiring an objection to genetic

16 testing results to be made in writing not

17 later than a specified number of days be18 fore any hearing at which the results may

19 be introduced into evidence (or, at State

20 option, not later than a specified number

21 of days after receipt of the results); and

22 ‘‘(iii) making the test results admissi23 ble as evidence of paternity without the

24 need for foundation testimony or other
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1 proof of authenticity or accuracy, unless

2 objection is made.

3 ‘‘(G) PRESUMPTION OF PATERNITY IN

4 CERTAIN CASES.—Procedures which create a re5 buttable or, at the option of the State, conclu6 sive presumption of paternity upon genetic test7 ing results indicating a threshold probability

8 that the alleged father is the father of the child.

9 ‘‘(H) DEFAULT ORDERS.—Procedures re10 quiring a default order to be entered in a pater11 nity case upon a showing of service of process

12 on the defendant and any additional showing

13 required by State law.

14 ‘‘(I) NO RIGHT TO JURY TRIAL.—Proce15 dures providing that the parties to an action to

16 establish paternity are not entitled to a trial by

17 jury.

18 ‘‘(J) TEMPORARY SUPPORT ORDER BASED

19 ON PROBABLE PATERNITY IN CONTESTED

20 CASES.—Procedures which require that a tem21 porary order be issued, upon motion by a party,

22 requiring the provision of child support pending

23 an administrative or judicial determination of

24 parentage, if there is clear and convincing evi-
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1 dence of paternity (on the basis of genetic tests

2 or other evidence).

3 ‘‘(K) PROOF OF CERTAIN SUPPORT AND

4 PATERNITY ESTABLISHMENT COSTS.—Proce5 dures under which bills for pregnancy, child6 birth, and genetic testing are admissible as evi7 dence without requiring third-party foundation

8 testimony, and shall constitute prima facie evi9 dence of amounts incurred for such services or

10 for testing on behalf of the child.

11 ‘‘(L) STANDING OF PUTATIVE FATHERS.—

12 Procedures ensuring that the putative father

13 has a reasonable opportunity to initiate a pater14 nity action.

15 ‘‘(M) FILING OF ACKNOWLEDGMENTS AND

16 ADJUDICATIONS IN STATE REGISTRY OF BIRTH

17 RECORDS.—Procedures under which voluntary

18 acknowledgments and adjudications of paternity

19 by judicial or administrative processes are filed

20 with the State registry of birth records for com21 parison with information in the State case reg22 istry.’’.

23 (b) NATIONAL PATERNITY ACKNOWLEDGMENT AFFI24 DAVIT.—Section 452(a)(7) (42 U.S.C. 652(a)(7)) is

25 amended by inserting ‘‘, and specify the minimum require-
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1 ments of an affidavit to be used for the voluntary acknowl2 edgment of paternity which shall include the social secu3 rity number of each parent and, after consultation with

4 the States, other common elements as determined by such

5 designee’’ before the semicolon.

6 (c) CONFORMING AMENDMENT.—Section 468 (42

7 U.S.C. 668) is amended by striking ‘‘a simple civil process

8 for voluntarily acknowledging paternity and’’.

9 SEC. 332. OUTREACH FOR VOLUNTARY PATERNITY ESTAB10 LISHMENT.

11 Section 454(23) (42 U.S.C. 654(23)) is amended by

12 inserting ‘‘and will publicize the availability and encourage

13 the use of procedures for voluntary establishment of pater14 nity and child support by means the State deems appro15 priate’’ before the semicolon.

16 SEC. 333. COOPERATION BY APPLICANTS FOR AND RECIPI17 ENTS OF PART A ASSISTANCE.

18 Section 454 (42 U.S.C. 654), as amended by sections

19 301(b), 303(a), 312(a), and 313(a) of this Act, is amend20 ed—

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

22 (27);

23 (2) by striking the period at the end of para24 graph (28) and inserting ‘‘; and’’; and
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1 (3) by inserting after paragraph (28) the fol2 lowing new paragraph:

3 ‘‘(29) provide that the State agency responsible

4 for administering the State plan—

5 ‘‘(A) shall make the determination (and re6 determination at appropriate intervals) as to

7 whether an individual who has applied for or is

8 receiving assistance under the State program

9 funded under part A, the State program under

10 title XV, or the State program under XIX is co11 operating in good faith with the State in estab12 lishing the paternity of, or in establishing,

13 modifying, or enforcing a support order for, any

14 child of the individual by providing the State

15 agency with the name of, and such other infor16 mation as the State agency may require with

17 respect to, the noncustodial parent of the child,

18 subject to good cause and other exceptions

19 which—

20 ‘‘(i) shall be defined, taking into ac21 count the best interests of the child, and

22 ‘‘(ii) shall be applied in each case,

23 by, at the option of the State, the State agency

24 administering the State program under part A,

25 this part, title XV, or title XIX;
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1 ‘‘(B) shall require the individual to supply

2 additional necessary information and appear at

3 interviews, hearings, and legal proceedings;

4 ‘‘(C) shall require the individual and the

5 child to submit to genetic tests pursuant to ju6 dicial or administrative order;

7 ‘‘(D) may request that the individual sign

8 a voluntary acknowledgment of paternity, after

9 notice of the rights and consequences of such

10 an acknowledgment, but may not require the in11 dividual to sign an acknowledgment or other12 wise relinquish the right to genetic tests as a

13 condition of cooperation and eligibility for as14 sistance under the State program funded under

15 part A, the State program under title XV, or

16 the State program under title XIX; and

17 ‘‘(E) shall promptly notify the individual

18 and the State agency administering the State

19 program funded under part A, the State agency

20 administering the State program under title

21 XV, and the State agency administering the

22 State program under title XIX, of each such

23 determination, and if noncooperation is deter24 mined, the basis therefore.’’.
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1 Subtitle E—Program

2 Administration and Funding

3 SEC. 341. PERFORMANCE-BASED INCENTIVES AND PEN4 ALTIES.

5 (a) DEVELOPMENT OF NEW SYSTEM.—The Sec6 retary of Health and Human Services, in consultation with

7 State directors of programs under part D of title IV of

8 the Social Security Act, shall develop a new incentive sys9 tem to replace, in a revenue neutral manner, the system

10 under section 458 of such Act. The new system shall pro11 vide additional payments to any State based on such

12 State’s performance under such a program. Not later than

13 November 1, 1996, the Secretary shall report on the new

14 system to the Committee on Ways and Means of the

15 House of Representatives and the Committee on Finance

16 of the Senate.

17 (b) CONFORMING AMENDMENTS TO PRESENT SYS18 TEM.—Section 458 (42 U.S.C. 658) is amended—

19 (1) in subsection (a), by striking ‘‘aid to fami20 lies with dependent children under a State plan ap21 proved under part A of this title’’ and inserting ‘‘as22 sistance under a program funded under part A’’;

23 (2) in subsection (b)(1)(A), by striking ‘‘section

24 402(a)(26)’’ and inserting ‘‘section 408(a)(4)’’;

25 (3) in subsections (b) and (c)—
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1 (A) by striking ‘‘AFDC collections’’ each

2 place it appears and inserting ‘‘title IV–A col3 lections’’, and

4 (B) by striking ‘‘non-AFDC collections’’

5 each place it appears and inserting ‘‘non-title

6 IV–A collections’’; and

7 (4) in subsection (c), by striking ‘‘combined

8 AFDC/non-AFDC administrative costs’’ both places

9 it appears and inserting ‘‘combined title IV–A/non10 title IV–A administrative costs’’.

11 (c) CALCULATION OF PATERNITY ESTABLISHMENT

12 PERCENTAGE.—

13 (1) Section 452(g)(1)(A) (42 U.S.C.

14 652(g)(1)(A)) is amended by striking ‘‘75’’ and in15 serting ‘‘90’’.

16 (2) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is

17 amended—

18 (A) by redesignating subparagraphs (B)

19 through (E) as subparagraphs (C) through (F),

20 respectively, and by inserting after subpara21 graph (A) the following new subparagraph:

22 ‘‘(B) for a State with a paternity establish23 ment percentage of not less than 75 percent but

24 less than 90 percent for such fiscal year, the

25 paternity establishment percentage of the State
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1 for the immediately preceding fiscal year plus 2

2 percentage points;’’; and

3 (B) by adding at the end the following new

4 flush sentence:

5 ‘‘In determining compliance under this section, a State

6 may use as its paternity establishment percentage either

7 the State’s IV–D paternity establishment percentage (as

8 defined in paragraph (2)(A)) or the State’s statewide pa9 ternity establishment percentage (as defined in paragraph

10 (2)(B)).’’.

11 (3) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is

12 amended—

13 (A) in subparagraph (A)—

14 (i) in the matter preceding clause

15 (i)—

16 (I) by striking ‘‘paternity estab17 lishment percentage’’ and inserting

18 ‘‘IV–D paternity establishment per19 centage’’; and

20 (II) by striking ‘‘(or all States, as

21 the case may be)’’;

22 (ii) by striking ‘‘and’’ at the end

23 thereof;
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1 (B) by redesignating subparagraph (B) as

2 subparagraph (C) and by inserting after sub3 paragraph (A) the following new subparagraph:

4 ‘‘(B) the term ‘statewide paternity establish5 ment percentage’ means, with respect to a State for

6 a fiscal year, the ratio (expressed as a percentage)

7 that the total number of minor children—

8 ‘‘(i) who have been born out of wedlock,

9 and

10 ‘‘(ii) the paternity of whom has been estab11 lished or acknowledged during the fiscal year,

12 bears to the total number of children born out of

13 wedlock during the preceding fiscal year; and’’; and

14 (iii) in the matter following subpara15 graph (C) (as so redesignated), by striking

16 ‘‘to have good cause for refusing to cooper17 ate’’ and inserting ‘‘to qualify for a good

18 cause or other exception to cooperation’’.

19 (4) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is

20 amended—

21 (A) by striking subparagraph (A) and re22 designating subparagraphs (B) and (C) as sub23 paragraphs (A) and (B), respectively; and

24 (B) in subparagraph (A) (as so redesig25 nated), by striking ‘‘the percentage of children
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1 born out-of-wedlock in a State’’ and inserting

2 ‘‘the percentage of children in a State who are

3 born out of wedlock or for whom support has

4 not been established’’.

5 (d) EFFECTIVE DATES.—

6 (1) INCENTIVE ADJUSTMENTS.—

7 (A) IN GENERAL.—The system developed

8 under subsection (a) and the amendments made

9 by subsection (b) shall become effective on Oc10 tober 1, 1997, except to the extent provided in

11 subparagraph (B).

12 (B) APPLICATION OF SECTION 458.—Sec13 tion 458 of the Social Security Act, as in effect

14 on the day before the date of the enactment of

15 this section, shall be effective for purposes of

16 incentive payments to States for fiscal years be17 fore fiscal year 1999.

18 (2) PENALTY REDUCTIONS.—The amendments

19 made by subsection (c) shall become effective with

20 respect to calendar quarters beginning on or after

21 the date of the enactment of this Act.

22 SEC. 342. FEDERAL AND STATE REVIEWS AND AUDITS.

23 (a) STATE AGENCY ACTIVITIES.—Section 454 (42

24 U.S.C. 654) is amended—
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1 (1) in paragraph (14), by striking ‘‘(14)’’ and

2 inserting ‘‘(14)(A)’’;

3 (2) by redesignating paragraph (15) as sub4 paragraph (B) of paragraph (14); and

5 (3) by inserting after paragraph (14) the fol6 lowing new paragraph:

7 ‘‘(15) provide for—

8 ‘‘(A) a process for annual reviews of and

9 reports to the Secretary on the State program

10 operated under the State plan approved under

11 this part, including such information as may be

12 necessary to measure State compliance with

13 Federal requirements for expedited procedures,

14 using such standards and procedures as are re15 quired by the Secretary, under which the State

16 agency will determine the extent to which the

17 program is operated in compliance with this

18 part; and

19 ‘‘(B) a process of extracting from the auto20 mated data processing system required by para21 graph (16) and transmitting to the Secretary

22 data and calculations concerning the levels of

23 accomplishment (and rates of improvement)

24 with respect to applicable performance indica25 tors (including paternity establishment percent-
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1 ages) to the extent necessary for purposes of

2 sections 452(g) and 458.’’.

3 (b) FEDERAL ACTIVITIES.—Section 452(a)(4) (42

4 U.S.C. 652(a)(4)) is amended to read as follows:

5 ‘‘(4)(A) review data and calculations transmit6 ted by State agencies pursuant to section

7 454(15)(B) on State program accomplishments with

8 respect to performance indicators for purposes of

9 subsection (g) of this section and section 458;

10 ‘‘(B) review annual reports submitted pursuant

11 to section 454(15)(A) and, as appropriate, provide

12 to the State comments, recommendations for addi13 tional or alternative corrective actions, and technical

14 assistance; and

15 ‘‘(C) conduct audits, in accordance with the

16 Government auditing standards of the Comptroller

17 General of the United States—

18 ‘‘(i) at least once every 3 years (or more

19 frequently, in the case of a State which fails to

20 meet the requirements of this part concerning

21 performance standards and reliability of pro22 gram data) to assess the completeness, reliabil23 ity, and security of the data and the accuracy

24 of the reporting systems used in calculating
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1 performance indicators under subsection (g) of

2 this section and section 458;

3 ‘‘(ii) of the adequacy of financial manage4 ment of the State program operated under the

5 State plan approved under this part, including

6 assessments of—

7 ‘‘(I) whether Federal and other funds

8 made available to carry out the State pro9 gram are being appropriately expended,

10 and are properly and fully accounted for;

11 and

12 ‘‘(II) whether collections and disburse13 ments of support payments are carried out

14 correctly and are fully accounted for; and

15 ‘‘(iii) for such other purposes as the Sec16 retary may find necessary;’’.

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

18 this section shall be effective with respect to calendar

19 quarters beginning 12 months or more after the date of

20 the enactment of this Act.

21 SEC. 343. REQUIRED REPORTING PROCEDURES.

22 (a) ESTABLISHMENT.—Section 452(a)(5) (42 U.S.C.

23 652(a)(5)) is amended by inserting ‘‘, and establish proce24 dures to be followed by States for collecting and reporting

25 information required to be provided under this part, and
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1 establish uniform definitions (including those necessary to

2 enable the measurement of State compliance with the re3 quirements of this part relating to expedited processes) to

4 be applied in following such procedures’’ before the semi5 colon.

6 (b) STATE PLAN REQUIREMENT.—Section 454 (42

7 U.S.C. 654), as amended by sections 301(b), 303(a),

8 312(a), 313(a), and 333 of this Act, is amended—

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

10 (28);

11 (2) by striking the period at the end of para12 graph (29) and inserting ‘‘; and’’; and

13 (3) by adding after paragraph (29) the follow14 ing new paragraph:

15 ‘‘(30) provide that the State shall use the defi16 nitions established under section 452(a)(5) in col17 lecting and reporting information as required under

18 this part.’’.

19 SEC. 344. AUTOMATED DATA PROCESSING REQUIREMENTS.

20 (a) REVISED REQUIREMENTS.—

21 (1) IN GENERAL.—Section 454(16) (42 U.S.C.

22 654(16)) is amended—

23 (A) by striking ‘‘, at the option of the

24 State,’’;
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1 (B) by inserting ‘‘and operation by the

2 State agency’’ after ‘‘for the establishment’’;

3 (C) by inserting ‘‘meeting the requirements

4 of section 454A’’ after ‘‘information retrieval

5 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

10 follows and inserting a semicolon.

11 (2) AUTOMATED DATA PROCESSING.—Part D of

12 title IV (42 U.S.C. 651–669) is amended by insert13 ing after section 454 the following new section:

14 ‘‘SEC. 454A. AUTOMATED DATA PROCESSING.

15 ‘‘(a) IN GENERAL.—In order for a State to meet the

16 requirements of this section, the State agency administer17 ing the State program under this part shall have in oper18 ation a single statewide automated data processing and

19 information retrieval system which has the capability to

20 perform the tasks specified in this section with the fre21 quency and in the manner required by or under this part.

22 ‘‘(b) PROGRAM MANAGEMENT.—The automated sys23 tem required by this section shall perform such functions

24 as the Secretary may specify relating to management of

25 the State program under this part, including—
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1 ‘‘(1) controlling and accounting for use of Fed2 eral, State, and local funds in carrying out the pro3 gram; and

4 ‘‘(2) maintaining the data necessary to meet

5 Federal reporting requirements under this part on a

6 timely basis.

7 ‘‘(c) CALCULATION OF PERFORMANCE INDICA8 TORS.—In order to enable the Secretary to determine the

9 incentive payments and penalty adjustments required by

10 sections 452(g) and 458, the State agency shall—

11 ‘‘(1) use the automated system—

12 ‘‘(A) to maintain the requisite data on

13 State performance with respect to paternity es14 tablishment and child support enforcement in

15 the State; and

16 ‘‘(B) to calculate the paternity establish17 ment percentage for the State for each fiscal

18 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 by this section,

3 which shall include the following (in addition to such other

4 safeguards as the Secretary may specify 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 the State

11 program under this part; and

12 ‘‘(B) specify the data which may be used

13 for particular program purposes, and the per14 sonnel permitted access to such data.

15 ‘‘(2) SYSTEMS CONTROLS.—Systems controls

16 (such as passwords or blocking of fields) to ensure

17 strict adherence to the policies described in para18 graph (1).

19 ‘‘(3) MONITORING OF ACCESS.—Routine mon20 itoring of access to and use of the automated sys21 tem, through methods such as audit trails and feed22 back mechanisms, to guard against and promptly

23 identify unauthorized access or use.

24 ‘‘(4) TRAINING AND INFORMATION.—Proce25 dures to ensure that all personnel (including State
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1 and local agency staff and contractors) who may

2 have access to or be required to use confidential pro3 gram data are informed of applicable requirements

4 and penalties (including those in section 6103 of the

5 Internal Revenue Code of 1986), and are adequately

6 trained in security procedures.

7 ‘‘(5) PENALTIES.—Administrative penalties (up

8 to and including dismissal from employment) for un9 authorized access to, or disclosure or use of, con10 fidential data.’’.

11 (3) REGULATIONS.—The Secretary of Health

12 and Human Services shall prescribe final regulations

13 for implementation of section 454A of the Social Se14 curity Act not later than 2 years after the date of

15 the enactment of this Act.

16 (4) IMPLEMENTATION TIMETABLE.—Section

17 454(24) (42 U.S.C. 654(24)), as amended by section

18 303(a)(1) of this Act, is amended to read as follows:

19 ‘‘(24) provide that the State will have in effect

20 an automated data processing and information re21 trieval system—

22 ‘‘(A) by October 1, 1997, which meets all

23 requirements of this part which were enacted on

24 or before the date of enactment of the Family

25 Support Act of 1988, and
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1 ‘‘(B) by October 1, 1999, which meets all

2 requirements of this part enacted on or before

3 the date of the enactment of the Personal Re4 sponsibility and Work Opportunity Act of 1996,

5 except that such deadline shall be extended by

6 1 day for each day (if any) by which the Sec7 retary fails to meet the deadline imposed by

8 section 344(a)(3) of the Personal Responsibility

9 and Work Opportunity Act of 1996;’’.

10 (b) SPECIAL FEDERAL MATCHING RATE FOR DE11 VELOPMENT COSTS OF AUTOMATED SYSTEMS.—

12 (1) IN GENERAL.—Section 455(a) (42 U.S.C.

13 655(a)) is amended—

14 (A) in paragraph (1)(B)—

15 (i) by striking ‘‘90 percent’’ and in16 serting ‘‘the percent specified in paragraph

17 (3)’’;

18 (ii) by striking ‘‘so much of’’; and

19 (iii) by striking ‘‘which the Secretary’’

20 and all that follows and inserting ‘‘, and’’;

21 and

22 (B) by adding at the end the following new

23 paragraph:

24 ‘‘(3)(A) The Secretary shall pay to each State, for

25 each quarter in fiscal years 1996 and 1997, 90 percent
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1 of so much of the State expenditures described in para2 graph (1)(B) as the Secretary finds are for a system meet3 ing the requirements specified in section 454(16) (as in

4 effect on September 30, 1995) but limited to the amount

5 approved for States in the advance planning documents

6 of such States submitted on or before September 30,

7 1995.

8 ‘‘(B)(i) The Secretary shall pay to each State, for

9 each quarter in fiscal years 1996 through 2001, the per10 centage specified in clause (ii) of so much of the State

11 expenditures described in paragraph (1)(B) as the Sec12 retary finds are for a system meeting the requirements

13 of sections 454(16) and 454A.

14 ‘‘(ii) The percentage specified in this clause is 80 per15 cent.’’.

16 (2) TEMPORARY LIMITATION ON PAYMENTS

17 UNDER SPECIAL FEDERAL MATCHING RATE.—

18 (A) IN GENERAL.—The Secretary of

19 Health and Human Services may not pay more

20 than $400,000,000 in the aggregate under sec21 tion 455(a)(3)(B) of the Social Security Act for

22 fiscal years 1996 through 2001.

23 (B) ALLOCATION OF LIMITATION AMONG

24 STATES.—The total amount payable to a State

25 under section 455(a)(3)(B) of such Act for fis-
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1 cal years 1996 through 2001 shall not exceed

2 the limitation determined for the State by the

3 Secretary of Health and Human Services in

4 regulations.

5 (C) ALLOCATION FORMULA.—The regula6 tions referred to in subparagraph (B) shall pre7 scribe a formula for allocating the amount spec8 ified in subparagraph (A) among States with

9 plans approved under part D of title IV of the

10 Social Security Act, which shall take into ac11 count—

12 (i) the relative size of State caseloads

13 under such part; and

14 (ii) the level of automation needed to

15 meet the automated data processing re16 quirements of such part.

17 (c) CONFORMING AMENDMENT.—Section 123(c) of

18 the Family Support Act of 1988 (102 Stat. 2352; Public

19 Law 100–485) is repealed.

20 SEC. 345. TECHNICAL ASSISTANCE.

21 (a) FOR TRAINING OF FEDERAL AND STATE STAFF,

22 RESEARCH AND DEMONSTRATION PROGRAMS, AND SPE23 CIAL PROJECTS OF REGIONAL OR NATIONAL SIGNIFI24 CANCE.—Section 452 (42 U.S.C. 652) is amended by add25 ing at the end the following new subsection:
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1 ‘‘(j) Out of any money in the Treasury of the United

2 States not otherwise appropriated, there is hereby appro3 priated to the Secretary for each fiscal year an amount

4 equal to 1 percent of the total amount paid to the Federal

5 Government pursuant to section 457(a) during the imme6 diately preceding fiscal year (as determined on the basis

7 of the most recent reliable data available to the Secretary

8 as of the end of the 3rd calendar quarter following the

9 end of such preceding fiscal year), to cover costs incurred

10 by the Secretary for—

11 ‘‘(1) information dissemination and technical

12 assistance to States, training of State and Federal

13 staff, staffing studies, and related activities needed

14 to improve programs under this part (including tech15 nical assistance concerning State automated systems

16 required by this part); and

17 ‘‘(2) research, demonstration, and special

18 projects of regional or national significance relating

19 to the operation of State programs under this part.

20 The amount appropriated under this subsection shall re21 main available until expended.’’.

22 (b) OPERATION OF FEDERAL PARENT LOCATOR

23 SERVICE.—Section 453 (42 U.S.C. 653), as amended by

24 section 316 of this Act, is amended by adding at the end

25 the following new subsection:
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1 ‘‘(o) RECOVERY OF COSTS.—Out of any money in the

2 Treasury of the United States not otherwise appropriated,

3 there is hereby appropriated to the Secretary for each fis4 cal year an amount equal to 2 percent of the total amount

5 paid to the Federal Government pursuant to section

6 457(a) during the immediately preceding fiscal year (as

7 determined on the basis of the most recent reliable data

8 available to the Secretary as of the end of the 3rd calendar

9 quarter following the end of such preceding fiscal year),

10 to cover costs incurred by the Secretary for operation of

11 the Federal Parent Locator Service under this section, to

12 the extent such costs are not recovered through user

13 fees.’’.

14 SEC. 346. REPORTS AND DATA COLLECTION BY THE SEC15 RETARY.

16 (a) ANNUAL REPORT TO CONGRESS.—

17 (1) Section 452(a)(10)(A) (42 U.S.C.

18 652(a)(10)(A)) is amended—

19 (A) by striking ‘‘this part;’’ and inserting

20 ‘‘this part, including—’’; and

21 (B) by adding at the end the following new

22 clauses:

23 ‘‘(i) the total amount of child support

24 payments collected as a result of services
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1 furnished during the fiscal year to individ2 uals receiving services under this part;

3 ‘‘(ii) the cost to the States and to the

4 Federal Government of so furnishing the

5 services; and

6 ‘‘(iii) the number of cases involving

7 families—

8 ‘‘(I) who became ineligible for as9 sistance under State programs funded

10 under part A during a month in the

11 fiscal year; and

12 ‘‘(II) with respect to whom a

13 child support payment was received in

14 the month;’’.

15 (2) Section 452(a)(10)(C) (42 U.S.C.

16 652(a)(10)(C)) is amended—

17 (A) in the matter preceding clause (i)—

18 (i) by striking ‘‘with the data required

19 under each clause being separately stated

20 for cases’’ and inserting ‘‘separately stated

21 for (1) cases’’;

22 (ii) by striking ‘‘cases where the child

23 was formerly receiving’’ and inserting ‘‘or

24 formerly received’’;
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1 (iii) by inserting ‘‘or 1912’’ after

2 ‘‘471(a)(17)’’; and

3 (iv) by inserting ‘‘(2)’’ before ‘‘all

4 other’’;

5 (B) in each of clauses (i) and (ii), by strik6 ing ‘‘, and the total amount of such obliga7 tions’’;

8 (C) in clause (iii), by striking ‘‘described

9 in’’ and all that follows and inserting ‘‘in which

10 support was collected during the fiscal year;’’;

11 (D) by striking clause (iv); and

12 (E) by redesignating clause (v) as clause

13 (vii), and inserting after clause (iii) the follow14 ing new clauses:

15 ‘‘(iv) the total amount of support col16 lected during such fiscal year and distrib17 uted as current support;

18 ‘‘(v) the total amount of support col19 lected during such fiscal year and distrib20 uted as arrearages;

21 ‘‘(vi) the total amount of support due

22 and unpaid for all fiscal years; and’’.

23 (3) Section 452(a)(10)(G) (42 U.S.C.

24 652(a)(10)(G)) is amended by striking ‘‘on the use

25 of Federal courts and’’.
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1 (4) Section 452(a)(10) (42 U.S.C. 652(a)(10))

2 is amended—

3 (A) in subparagraph (H), by striking

4 ‘‘and’’;

5 (B) in subparagraph (I), by striking the

6 period and inserting ‘‘; and’’; and

7 (C) by inserting after subparagraph (I) the

8 following new subparagraph:

9 ‘‘(J) compliance, by State, with the stand10 ards established pursuant to subsections (h)

11 and (i).’’.

12 (5) Section 452(a)(10) (42 U.S.C. 652(a)(10))

13 is amended by striking all that follows subparagraph

14 (J), as added by paragraph (4).

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

16 subsection (a) shall be effective with respect to fiscal year

17 1997 and succeeding fiscal years.

18 Subtitle F—Establishment and

19 Modification of Support Orders

20 SEC. 351. SIMPLIFIED PROCESS FOR REVIEW AND ADJUST21 MENT OF CHILD SUPPORT ORDERS.

22 Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amend23 ed to read as follows:

24 ‘‘(10) REVIEW AND ADJUSTMENT OF SUPPORT

25 ORDERS UPON REQUEST.—Procedures under which
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1 the State shall review and adjust each support order

2 being enforced under this part if there is an assign3 ment under part A or upon the request of either

4 parent, and may review and adjust any other sup5 port order being enforced under this part. Such pro6 cedures shall provide the following:

7 ‘‘(A) IN GENERAL.—

8 ‘‘(i) 3-YEAR CYCLE.—Except as pro9 vided in subparagraphs (B) and (C), the

10 State shall review and, as appropriate, ad11 just the support order every 3 years, tak12 ing into account the best interests of the

13 child involved.

14 ‘‘(ii) METHODS OF ADJUSTMENT.—

15 The State may elect to review and, if ap16 propriate, adjust an order pursuant to

17 clause (i) by—

18 ‘‘(I) reviewing and, if appro19 priate, adjusting the order in accord20 ance with the guidelines established

21 pursuant to section 467(a) if the

22 amount of the child support award

23 under the order differs from the

24 amount that would be awarded in ac25 cordance with the guidelines; or
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1 ‘‘(II) applying a cost-of-living ad2 justment to the order in accordance

3 with a formula developed by the State

4 and permit either party to contest the

5 adjustment, within 30 days after the

6 date of the notice of the adjustment,

7 by making a request for review and, if

8 appropriate, adjustment of the order

9 in accordance with the child support

10 guidelines established pursuant to sec11 tion 467(a).

12 ‘‘(iii) NO PROOF OF CHANGE IN CIR13 CUMSTANCES NECESSARY.—Any adjust14 ment under this subparagraph (A) shall be

15 made without a requirement for proof or

16 showing of a change in circumstances.

17 ‘‘(B) AUTOMATED METHOD.—The State

18 may use automated methods (including auto19 mated comparisons with wage or State income

20 tax data) to identify orders eligible for review,

21 conduct the review, identify orders eligible for

22 adjustment, and apply the appropriate adjust23 ment to the orders eligible for adjustment

24 under the threshold established by the State.
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1 ‘‘(C) REQUEST UPON SUBSTANTIAL

2 CHANGE IN CIRCUMSTANCES.—The State shall,

3 at the request of either parent subject to such

4 an order or of any State child support enforce5 ment agency, review and, if appropriate, adjust

6 the order in accordance with the guidelines es7 tablished pursuant to section 467(a) based

8 upon a substantial change in the circumstances

9 of either parent.

10 ‘‘(D) NOTICE OF RIGHT TO REVIEW.—The

11 State shall provide notice not less than once

12 every 3 years to the parents subject to such an

13 order informing them of their right to request

14 the State to review and, if appropriate, adjust

15 the order pursuant to this paragraph. The no16 tice may be included in the order.’’.

17 SEC. 352. FURNISHING CONSUMER REPORTS FOR CERTAIN

18 PURPOSES RELATING TO CHILD SUPPORT.

19 Section 604 of the Fair Credit Reporting Act (15

20 U.S.C. 1681b) is amended by adding at the end the follow21 ing new paragraphs:

22 ‘‘(4) In response to a request by the head of a

23 State or local child support enforcement agency (or

24 a State or local government official authorized by

25 the head of such an agency), if the person making
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1 the request certifies to the consumer reporting agen2 cy that—

3 ‘‘(A) the consumer report is needed for the

4 purpose of establishing an individual’s capacity

5 to make child support payments or determining

6 the appropriate level of such payments;

7 ‘‘(B) the paternity of the consumer for the

8 child to which the obligation relates has been

9 established or acknowledged by the consumer in

10 accordance with State laws under which the ob11 ligation arises (if required by those laws);

12 ‘‘(C) the person has provided at least 10

13 days’ prior notice to the consumer whose report

14 is requested, by certified or registered mail to

15 the last known address of the consumer, that

16 the report will be requested; and

17 ‘‘(D) the consumer report will be kept con18 fidential, will be used solely for a purpose de19 scribed in subparagraph (A), and will not be

20 used in connection with any other civil, admin21 istrative, or criminal proceeding, or for any

22 other purpose.

23 ‘‘(5) To an agency administering a State plan

24 under section 454 of the Social Security Act (42
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1 U.S.C. 654) for use to set an initial or modified

2 child support award.’’.

3 SEC. 353. NONLIABILITY FOR FINANCIAL INSTITUTIONS

4 PROVIDING FINANCIAL RECORDS TO STATE

5 CHILD SUPPORT ENFORCEMENT AGENCIES

6 IN CHILD SUPPORT CASES.

7 Part D of title IV (42 U.S.C. 651–669) is amended

8 by adding at the end the following:

9 ‘‘SEC. 469A. NONLIABILITY FOR FINANCIAL INSTITUTIONS

10 PROVIDING FINANCIAL RECORDS TO STATE

11 CHILD SUPPORT ENFORCEMENT AGENCIES

12 IN CHILD SUPPORT CASES.

13 ‘‘(a) IN GENERAL.—Notwithstanding any other pro14 vision of Federal or State law, a financial institution shall

15 not be liable under any Federal or State law to any person

16 for disclosing any financial record of an individual to a

17 State child support enforcement agency attempting to es18 tablish, modify, or enforce a child support obligation of

19 such individual.

20 ‘‘(b) PROHIBITION OF DISCLOSURE OF FINANCIAL

21 RECORD OBTAINED BY STATE CHILD SUPPORT EN22 FORCEMENT AGENCY.—A State child support enforcement

23 agency which obtains a financial record of an individual

24 from a financial institution pursuant to subsection (a)

25 may disclose such financial record only for the purpose
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1 of, and to the extent necessary in, establishing, modifying,

2 or enforcing a child support obligation of such individual.

3 ‘‘(c) CIVIL DAMAGES FOR UNAUTHORIZED DISCLO4 SURE.—

5 ‘‘(1) DISCLOSURE BY STATE OFFICER OR EM6 PLOYEE.—If any person knowingly, or by reason of

7 negligence, discloses a financial record of an individ8 ual in violation of subsection (b), such individual

9 may bring a civil action for damages against such

10 person in a district court of the United States.

11 ‘‘(2) NO LIABILITY FOR GOOD FAITH BUT ER12 RONEOUS INTERPRETATION.—No liability shall arise

13 under this subsection with respect to any disclosure

14 which results from a good faith, but erroneous, in15 terpretation of subsection (b).

16 ‘‘(3) DAMAGES.—In any action brought under

17 paragraph (1), upon a finding of liability on the part

18 of the defendant, the defendant shall be liable to the

19 plaintiff in an amount equal to the sum of—

20 ‘‘(A) the greater of—

21 ‘‘(i) $1,000 for each act of unauthor22 ized disclosure of a financial record with

23 respect to which such defendant is found

24 liable; or

25 ‘‘(ii) the sum of—
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1 ‘‘(I) the actual damages sus2 tained by the plaintiff as a result of

3 such unauthorized disclosure; plus

4 ‘‘(II) in the case of a willful dis5 closure or a disclosure which is the re6 sult of gross negligence, punitive dam7 ages; plus

8 ‘‘(B) the costs (including attorney’s fees)

9 of the action.

10 ‘‘(d) DEFINITIONS.—For purposes of this section—

11 ‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi12 nancial institution’ means—

13 ‘‘(A) a depository institution, as defined in

14 section 3(c) of the Federal Deposit Insurance

15 Act (12 U.S.C. 1813(c));

16 ‘‘(B) an institution-affiliated party, as de17 fined in section 3(u) of such Act (12 U.S.C.

18 1813(u));

19 ‘‘(C) any Federal credit union or State

20 credit union, as defined in section 101 of the

21 Federal Credit Union Act (12 U.S.C. 1752), in22 cluding an institution-affiliated party of such a

23 credit union, as defined in section 206(r) of

24 such Act (12 U.S.C. 1786(r)); and
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1 ‘‘(D) any benefit association, insurance

2 company, safe deposit company, money-market

3 mutual fund, or similar entity authorized to do

4 business in the State.

5 ‘‘(2) FINANCIAL RECORD.—The term ‘‘financial

6 record’’ has the meaning given such term in section

7 1101 of the Right to Financial Privacy Act of 1978

8 (12 U.S.C. 3401).’’.

9 Subtitle G—Enforcement of

10 Support Orders

11 SEC. 361. INTERNAL REVENUE SERVICE COLLECTION OF

12 ARREARAGES.

13 (a) COLLECTION OF FEES.—Section 6305(a) of the

14 Internal Revenue Code of 1986 (relating to collection of

15 certain liability) is amended—

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

17 (3);

18 (2) by striking the period at the end of para19 graph (4) and inserting ‘‘, and’’;

20 (3) by adding at the end the following new

21 paragraph:

22 ‘‘(5) no additional fee may be assessed for ad23 justments to an amount previously certified pursu24 ant to such section 452(b) with respect to the same

25 obligor.’’; and
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1 (4) by striking ‘‘Secretary of Health, Edu2 cation, and Welfare’’ each place it appears and in3 serting ‘‘Secretary of Health and Human Services’’.

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

5 this section shall become effective October 1, 1997.

6 SEC. 362. AUTHORITY TO COLLECT SUPPORT FROM FED7 ERAL EMPLOYEES.

8 (a) CONSOLIDATION AND STREAMLINING OF AU9 THORITIES.—Section 459 (42 U.S.C. 659) is amended to

10 read as follows:

11 ‘‘SEC. 459. CONSENT BY THE UNITED STATES TO INCOME

12 WITHHOLDING, GARNISHMENT, AND SIMILAR

13 PROCEEDINGS FOR ENFORCEMENT OF CHILD

14 SUPPORT AND ALIMONY OBLIGATIONS.

15 ‘‘(a) CONSENT TO SUPPORT ENFORCEMENT.—Not16 withstanding any other provision of law (including section

17 207 of this Act and section 5301 of title 38, United States

18 Code), effective January 1, 1975, moneys (the entitlement

19 to which is based upon remuneration for employment) due

20 from, or payable by, the United States or the District of

21 Columbia (including any agency, subdivision, or instru22 mentality thereof) to any individual, including members

23 of the Armed Forces of the United States, shall be subject,

24 in like manner and to the same extent as if the United

25 States or the District of Columbia were a private person,
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1 to withholding in accordance with State law enacted pur2 suant to subsections (a)(1) and (b) of section 466 and reg3 ulations of the Secretary under such subsections, and to

4 any other legal process brought, by a State agency admin5 istering a program under a State plan approved under this

6 part or by an individual obligee, to enforce the legal obliga7 tion of the individual to provide child support or alimony.

8 ‘‘(b) CONSENT TO REQUIREMENTS APPLICABLE TO

9 PRIVATE PERSON.—With respect to notice to withhold in10 come pursuant to subsection (a)(1) or (b) of section 466,

11 or any other order or process to enforce support obliga12 tions against an individual (if the order or process con13 tains or is accompanied by sufficient data to permit

14 prompt identification of the individual and the moneys in15 volved), each governmental entity specified in subsection

16 (a) shall be subject to the same requirements as would

17 apply if the entity were a private person, except as other18 wise provided in this section.

19 ‘‘(c) DESIGNATION OF AGENT; RESPONSE TO NOTICE

20 OR PROCESS—

21 ‘‘(1) DESIGNATION OF AGENT.—The head of

22 each agency subject to this section shall—

23 ‘‘(A) designate an agent or agents to re24 ceive orders and accept service of process in
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1 matters relating to child support or alimony;

2 and

3 ‘‘(B) annually publish in the Federal Reg4 ister the designation of the agent or agents,

5 identified by title or position, mailing address,

6 and telephone number.

7 ‘‘(2) RESPONSE TO NOTICE OR PROCESS.—If an

8 agent designated pursuant to paragraph (1) of this

9 subsection receives notice pursuant to State proce10 dures in effect pursuant to subsection (a)(1) or (b)

11 of section 466, or is effectively served with any

12 order, process, or interrogatory, with respect to an

13 individual’s child support or alimony payment obli14 gations, the agent shall—

15 ‘‘(A) as soon as possible (but not later

16 than 15 days) thereafter, send written notice of

17 the notice or service (together with a copy of

18 the notice or service) to the individual at the

19 duty station or last-known home address of the

20 individual;

21 ‘‘(B) within 30 days (or such longer period

22 as may be prescribed by applicable State law)

23 after receipt of a notice pursuant to such State

24 procedures, comply with all applicable provi25 sions of section 466; and
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1 ‘‘(C) within 30 days (or such longer period

2 as may be prescribed by applicable State law)

3 after effective service of any other such order,

4 process, or interrogatory, respond to the order,

5 process, or interrogatory.

6 ‘‘(d) PRIORITY OF CLAIMS.—If a governmental entity

7 specified in subsection (a) receives notice or is served with

8 process, as provided in this section, concerning amounts

9 owed by an individual to more than 1 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 section 466(b) and the regula16 tions prescribed under such section; and

17 ‘‘(3) such moneys as remain after compliance

18 with paragraphs (1) and (2) 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.

24 ‘‘(e) NO REQUIREMENT TO VARY PAY CYCLES.—A

25 governmental entity that is affected by legal process
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1 served for the enforcement of an individual’s child support

2 or alimony payment obligations shall not be required to

3 vary its normal pay and disbursement cycle in order to

4 comply with the legal process.

5 ‘‘(f) RELIEF FROM LIABILITY.—

6 ‘‘(1) Neither the United States, nor the govern7 ment of the District of Columbia, nor any disbursing

8 officer shall be liable with respect to any payment

9 made from moneys due or payable from the United

10 States to any individual pursuant to legal process

11 regular on its face, if the payment is made in ac12 cordance with this section and the regulations issued

13 to carry out this section.

14 ‘‘(2) No Federal employee whose duties include

15 taking actions necessary to comply with the require16 ments of subsection (a) with regard to any individ17 ual shall be subject under any law to any discipli18 nary action or civil or criminal liability or penalty

19 for, or on account of, any disclosure of information

20 made by the employee in connection with the carry21 ing out of such actions.

22 ‘‘(g) REGULATIONS.—Authority to promulgate regu23 lations for the implementation of this section shall, insofar

24 as this section applies to moneys due from (or payable

25 by)—
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1 ‘‘(1) the United States (other than the legisla2 tive or judicial branches of the Federal Government)

3 or the government of the District of Columbia, be

4 vested in the President (or the designee of the Presi5 dent);

6 ‘‘(2) the legislative branch of the Federal Gov7 ernment, be vested jointly in the President pro tem8 pore of the Senate and the Speaker of the House of

9 Representatives (or their designees), and

10 ‘‘(3) the judicial branch of the Federal Govern11 ment, be vested in the Chief Justice of the United

12 States (or the designee of the Chief Justice).

13 ‘‘(h) MONEYS SUBJECT TO PROCESS.—

14 ‘‘(1) IN GENERAL.—Subject to paragraph (2),

15 moneys paid or payable to an individual which are

16 considered to be based upon remuneration for em17 ployment, for purposes of this section—

18 ‘‘(A) consist of—

19 ‘‘(i) compensation paid or payable for

20 personal services of the individual, whether

21 the compensation is denominated as wages,

22 salary, commission, bonus, pay, allowances,

23 or otherwise (including severance pay, sick

24 pay, and incentive pay);
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1 ‘‘(ii) periodic benefits (including a

2 periodic benefit as defined in section

3 228(h)(3)) or other payments—

4 ‘‘(I) under the insurance system

5 established by title II;

6 ‘‘(II) under any other system or

7 fund established by the United States

8 which provides for the payment of

9 pensions, retirement or retired pay,

10 annuities, dependents’ or survivors’

11 benefits, or similar amounts payable

12 on account of personal services per13 formed by the individual or any other

14 individual;

15 ‘‘(III) as compensation for death

16 under any Federal program;

17 ‘‘(IV) under any Federal pro18 gram established to provide ‘black

19 lung’ benefits; or

20 ‘‘(V) by the Secretary of Veter21 ans Affairs as compensation for a

22 service-connected disability paid by

23 the Secretary to a former member of

24 the Armed Forces who is in receipt of

25 retired or retainer pay if the former
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1 member has waived a portion of the

2 retired or retainer pay in order to re3 ceive such compensation; and

4 ‘‘(iii) worker’s compensation benefits

5 paid under Federal or State law but—

6 ‘‘(B) do not include any payment—

7 ‘‘(i) by way of reimbursement or oth8 erwise, to defray expenses incurred by the

9 individual in carrying out duties associated

10 with the employment of the individual; or

11 ‘‘(ii) as allowances for members of the

12 uniformed services payable pursuant to

13 chapter 7 of title 37, United States Code,

14 as prescribed by the Secretaries concerned

15 (defined by section 101(5) of such title) as

16 necessary for the efficient performance of

17 duty.

18 ‘‘(2) CERTAIN AMOUNTS EXCLUDED.—In deter19 mining the amount of any moneys due from, or pay20 able by, the United States to any individual, there

21 shall be excluded amounts which—

22 ‘‘(A) are owed by the individual to the

23 United States;

24 ‘‘(B) are required by law to be, and are,

25 deducted from the remuneration or other pay-
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1 ment involved, including Federal employment

2 taxes, and fines and forfeitures ordered by

3 court-martial;

4 ‘‘(C) are properly withheld for Federal,

5 State, or local income tax purposes, if the with6 holding of the amounts is authorized or re7 quired by law and if amounts withheld are not

8 greater than would be the case if the individual

9 claimed all dependents to which he was entitled

10 (the withholding of additional amounts pursu11 ant to section 3402(i) of the Internal Revenue

12 Code of 1986 may be permitted only when the

13 individual presents evidence of a tax obligation

14 which supports the additional withholding);

15 ‘‘(D) are deducted as health insurance pre16 miums;

17 ‘‘(E) are deducted as normal retirement

18 contributions (not including amounts deducted

19 for supplementary coverage); or

20 ‘‘(F) are deducted as normal life insurance

21 premiums from salary or other remuneration

22 for employment (not including amounts de23 ducted for supplementary coverage).

24 ‘‘(i) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) UNITED STATES.—The term ‘United

2 States’ includes any department, agency, or instru3 mentality of the legislative, judicial, or executive

4 branch of the Federal Government, the United

5 States Postal Service, the Postal Rate Commission,

6 any Federal corporation created by an Act of Con7 gress that is wholly owned by the Federal Govern8 ment, and the governments of the territories and

9 possessions of the United States.

10 ‘‘(2) CHILD SUPPORT.—The term ‘child sup11 port’, when used in reference to the legal obligations

12 of an individual to provide such support, means

13 amounts required to be paid under a judgment, de14 cree, or order, whether temporary, final, or subject

15 to modification, issued by a court or an administra16 tive agency of competent jurisdiction, for the sup17 port and maintenance of a child, including a child

18 who has attained the age of majority under the law

19 of the issuing State, or a child and the parent with

20 whom the child is living, which provides for mone21 tary support, health care, arrearages or reimburse22 ment, and which may include other related costs and

23 fees, interest and penalties, income withholding, at24 torney’s fees, and other relief.

25 ‘‘(3) ALIMONY.—
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1 ‘‘(A) IN GENERAL.—The term ‘alimony’,

2 when used in reference to the legal obligations

3 of an individual to provide the same, means

4 periodic payments of funds for the support and

5 maintenance of the spouse (or former spouse)

6 of the individual, and (subject to and in accord7 ance with State law) includes separate mainte8 nance, alimony pendente lite, maintenance, and

9 spousal support, and includes attorney’s fees,

10 interest, and court costs when and to the extent

11 that the same are expressly made recoverable

12 as such pursuant to a decree, order, or judg13 ment issued in accordance with applicable State

14 law by a court of competent jurisdiction.

15 ‘‘(B) EXCEPTIONS.—Such term does not

16 include—

17 ‘‘(i) any child support; or

18 ‘‘(ii) any payment or transfer of prop19 erty or its value by an individual to the

20 spouse or a former spouse of the individual

21 in compliance with any community prop22 erty settlement, equitable distribution of

23 property, or other division of property be24 tween spouses or former spouses.
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1 ‘‘(4) PRIVATE PERSON.—The term ‘private per2 son’ means a person who does not have sovereign or

3 other special immunity or privilege which causes the

4 person not to be subject to legal process.

5 ‘‘(5) LEGAL PROCESS.—The term ‘legal proc6 ess’ means any writ, order, summons, or other simi7 lar process in the nature of garnishment—

8 ‘‘(A) which is issued by—

9 ‘‘(i) a court or an administrative

10 agency of competent jurisdiction in any

11 State, territory, or possession of the Unit12 ed States;

13 ‘‘(ii) a court or an administrative

14 agency of competent jurisdiction in any

15 foreign country with which the United

16 States has entered into an agreement

17 which requires the United States to honor

18 the process; or

19 ‘‘(iii) an authorized official pursuant

20 to an order of such a court or an adminis21 trative agency of competent jurisdiction or

22 pursuant to State or local law; and

23 ‘‘(B) which is directed to, and the purpose

24 of which is to compel, a governmental entity

25 which holds moneys which are otherwise pay-
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1 able to an individual to make a payment from

2 the moneys to another party in order to satisfy

3 a legal obligation of the individual to provide

4 child support or make alimony payments.’’.

5 (b) CONFORMING AMENDMENTS.—

6 (1) TO PART D OF TITLE IV.—Sections 461 and

7 462 (42 U.S.C. 661 and 662) are repealed.

8 (2) TO TITLE 5, UNITED STATES CODE.—Sec9 tion 5520a of title 5, United States Code, is amend10 ed, in subsections (h)(2) and (i), by striking ‘‘sec11 tions 459, 461, and 462 of the Social Security Act

12 (42 U.S.C. 659, 661, and 662)’’ and inserting ‘‘sec13 tion 459 of the Social Security Act (42 U.S.C.

14 659)’’.

15 (c) MILITARY RETIRED AND RETAINER PAY.—

16 (1) DEFINITION OF COURT.—Section

17 1408(a)(1) of title 10, United States Code, is

18 amended—

19 (A) by striking ‘‘and’’ at the end of sub20 paragraph (B);

21 (B) by striking the period at the end of

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

23 (C) by adding after subparagraph (C) the

24 following new subparagraph:
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1 ‘‘(D) any administrative or judicial tribu2 nal of a State competent to enter orders for

3 support or maintenance (including a State

4 agency administering a program under a State

5 plan approved under part D of title IV of the

6 Social Security Act), and, for purposes of this

7 subparagraph, the term ‘State’ includes the

8 District of Columbia, the Commonwealth of

9 Puerto Rico, the Virgin Islands, Guam, and

10 American Samoa.’’.

11 (2) DEFINITION OF COURT ORDER.—Section

12 1408(a)(2) of such title is amended—

13 (A) by inserting ‘‘or a support order, as

14 defined in section 453(p) of the Social Security

15 Act (42 U.S.C. 653(p)),’’ before ‘‘which—’’;

16 (B) in subparagraph (B)(i), by striking

17 ‘‘(as defined in section 462(b) of the Social Se18 curity Act (42 U.S.C. 662(b)))’’ and inserting

19 ‘‘(as defined in section 459(i)(2) of the Social

20 Security Act (42 U.S.C. 659(i)(2)))’’; and

21 (C) in subparagraph (B)(ii), by striking

22 ‘‘(as defined in section 462(c) of the Social Se23 curity Act (42 U.S.C. 662(c)))’’ and inserting

24 ‘‘(as defined in section 459(i)(3) of the Social

25 Security Act (42 U.S.C. 659(i)(3)))’’.
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1 (3) PUBLIC PAYEE.—Section 1408(d) of such

2 title is amended—

3 (A) in the heading, by inserting ‘‘(OR FOR

4 BENEFIT OF)’’ before ‘‘SPOUSE OR’’; and

5 (B) in paragraph (1), in the 1st sentence,

6 by inserting ‘‘(or for the benefit of such spouse

7 or former spouse to a State disbursement unit

8 established pursuant to section 454B of the So9 cial Security Act or other public payee des10 ignated by a State, in accordance with part D

11 of title IV of the Social Security Act, as di12 rected by court order, or as otherwise directed

13 in accordance with such part D)’’ before ‘‘in an

14 amount sufficient’’.

15 (4) RELATIONSHIP TO PART D OF TITLE IV.—

16 Section 1408 of such title is amended by adding at

17 the end the following new subsection:

18 ‘‘(j) RELATIONSHIP TO OTHER LAWS.—In any case

19 involving an order providing for payment of child support

20 (as defined in section 459(i)(2) of the Social Security Act)

21 by a member who has never been married to the other

22 parent of the child, the provisions of this section shall not

23 apply, and the case shall be subject to the provisions of

24 section 459 of such 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. 363. 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 established under

21 section 453 of the Social Security Act.

22 (b) FACILITATING GRANTING OF LEAVE FOR AT23 TENDANCE AT HEARINGS.—

24 (1) REGULATIONS.—The Secretary of each

25 military department, and the Secretary of Transpor-
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1 tation with respect to the Coast Guard when it is

2 not operating as a service in the Navy, shall pre3 scribe regulations to facilitate the granting of leave

4 to a member of the Armed Forces under the juris5 diction of that Secretary in a case in which—

6 (A) the leave is needed for the member to

7 attend a hearing described in paragraph (2);

8 (B) the member is not serving in or with

9 a unit deployed in a contingency operation (as

10 defined in section 101 of title 10, United States

11 Code); and

12 (C) the exigencies of military service (as

13 determined by the Secretary concerned) do not

14 otherwise require that such leave not be grant15 ed.

16 (2) COVERED HEARINGS.—Paragraph (1) ap17 plies to a hearing that is conducted by a court or

18 pursuant to an administrative process established

19 under State law, in connection with a civil action—

20 (A) to determine whether a member of the

21 Armed Forces is a natural parent of a child; or

22 (B) to determine an obligation of a mem23 ber of the Armed Forces to provide child sup24 port.
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1 (3) DEFINITIONS.—For purposes of this sub2 section—

3 (A) The term ‘‘court’’ has the meaning

4 given that term in section 1408(a) of title 10,

5 United States Code.

6 (B) The term ‘‘child support’’ has the

7 meaning given such term in section 459(i) of

8 the Social Security Act (42 U.S.C. 659(i)).

9 (c) PAYMENT OF MILITARY RETIRED PAY IN COM10 PLIANCE WITH CHILD SUPPORT ORDERS.—

11 (1) DATE OF CERTIFICATION OF COURT

12 ORDER.—Section 1408 of title 10, United States

13 Code, as amended by section 362(c)(4) of this Act,

14 is amended—

15 (A) by redesignating subsections (i) and (j)

16 as subsections (j) and (k), respectively; and

17 (B) by inserting after subsection (h) the

18 following new subsection:

19 ‘‘(i) CERTIFICATION DATE.—It is not necessary that

20 the date of a certification of the authenticity or complete21 ness of a copy of a court order for child support received

22 by the Secretary concerned for the purposes of this section

23 be recent in relation to the date of receipt by the Sec24 retary.’’.
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1 (2) PAYMENTS CONSISTENT WITH ASSIGN2 MENTS OF RIGHTS TO STATES.—Section 1408(d)(1)

3 of such title is amended by inserting after the 1st

4 sentence the following new sentence: ‘‘In the case of

5 a spouse or former spouse who, pursuant to section

6 408(a)(4) of the Social Security Act (42 U.S.C.

7 608(a)(4)), assigns to a State the rights of the

8 spouse or former spouse to receive support, the Sec9 retary concerned may make the child support pay10 ments referred to in the preceding sentence to that

11 State in amounts consistent with that assignment of

12 rights.’’.

13 (3) ARREARAGES OWED BY MEMBERS OF THE

14 UNIFORMED SERVICES.—Section 1408(d) of such

15 title is amended by adding at the end the following

16 new paragraph:

17 ‘‘(6) In the case of a court order for which effective

18 service is made on the Secretary concerned on or after

19 the date of the enactment of this paragraph and which

20 provides for payments from the disposable retired pay of

21 a member to satisfy the amount of child support set forth

22 in the order, the authority provided in paragraph (1) to

23 make payments from the disposable retired pay of a mem24 ber to satisfy the amount of child support set forth in a

25 court order shall apply to payment of any amount of child
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1 support arrearages set forth in that order as well as to

2 amounts of child support that currently become due.’’.

3 (4) PAYROLL DEDUCTIONS.—The Secretary of

4 Defense shall begin payroll deductions within 30

5 days after receiving notice of withholding, or for the

6 1st pay period that begins after such 30-day period.

7 SEC. 364. VOIDING OF FRAUDULENT TRANSFERS.

8 Section 466 (42 U.S.C. 666), as amended by section

9 321 of this Act, is amended by adding at the end the fol10 lowing new subsection:

11 ‘‘(g) LAWS VOIDING FRAUDULENT TRANSFERS.—In

12 order to satisfy section 454(20)(A), each State must have

13 in effect—

14 ‘‘(1)(A) the Uniform Fraudulent Conveyance

15 Act of 1981;

16 ‘‘(B) the Uniform Fraudulent Transfer Act

17 of 1984; or

18 ‘‘(C) another law, specifying indicia of

19 fraud which create a prima facie case that a

20 debtor transferred income or property to avoid

21 payment to a child support creditor, which the

22 Secretary finds affords comparable rights to

23 child support creditors; and

24 ‘‘(2) procedures under which, in any case in

25 which the State knows of a transfer by a child sup-
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1 port debtor with respect to which such a prima facie

2 case is established, the State must—

3 ‘‘(A) seek to void such transfer; or

4 ‘‘(B) obtain a settlement in the best inter5 ests of the child support creditor.’’.

6 SEC. 365. WORK REQUIREMENT FOR PERSONS OWING

7 PAST-DUE CHILD SUPPORT.

8 (a) IN GENERAL.—Section 466(a) (42 U.S.C.

9 666(a)), as amended by sections 315, 317(a), and 323 of

10 this Act, is amended by adding at the end the following

11 new paragraph:

12 ‘‘(15) PROCEDURES TO ENSURE THAT PERSONS

13 OWING PAST-DUE SUPPORT WORK OR HAVE A PLAN

14 FOR PAYMENT OF SUCH SUPPORT.—

15 ‘‘(A) IN GENERAL.—Procedures under

16 which the State has the authority, in any case

17 in which an individual owes past-due support

18 with respect to a child receiving assistance

19 under a State program funded under part A, to

20 issue an order or to request that a court or an

21 administrative process established pursuant to

22 State law issue an order that requires the indi23 vidual to—

24 ‘‘(i) pay such support in accordance

25 with a plan approved by the court, or, at
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1 the option of the State, a plan approved by

2 the State agency administering the State

3 program under this part; or

4 ‘‘(ii) if the individual is subject to

5 such a plan and is not incapacitated, par6 ticipate in such work activities (as defined

7 in section 407(d)) as the court, or, at the

8 option of the State, the State agency ad9 ministering the State program under this

10 part, deems appropriate.

11 ‘‘(B) PAST-DUE SUPPORT DEFINED.—For

12 purposes of subparagraph (A), the term ‘past13 due support’ means the amount of a delin14 quency, determined under a court order, or an

15 order of an administrative process established

16 under State law, for support and maintenance

17 of a child, or of a child and the parent with

18 whom the child is living.’’.

19 (b) CONFORMING AMENDMENT.—The flush para20 graph at the end of section 466(a) (42 U.S.C.666(a)) is

21 amended by striking ‘‘and (7)’’ and inserting ‘‘(7), and

22 (15)’’.
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1 SEC. 366. DEFINITION OF SUPPORT ORDER.

2 Section 453 (42 U.S.C. 653) as amended by sections

3 316 and 345(b) of this Act, is amended by adding at the

4 end the following new subsection:

5 ‘‘(p) SUPPORT ORDER DEFINED.—As used in this

6 part, the term ‘support order’ means a judgment, decree,

7 or order, whether temporary, final, or subject to modifica8 tion, issued by a court or an administrative agency of com9 petent jurisdiction, for the support and maintenance of a

10 child, including a child who has attained the age of major11 ity under the law of the issuing State, or a child and the

12 parent with whom the child is living, which provides for

13 monetary support, health care, arrearages, or reimburse14 ment, and which may include related costs and fees, inter15 est and penalties, income withholding, attorneys’ fees, and

16 other relief.’’.

17 SEC. 367. REPORTING ARREARAGES TO CREDIT BUREAUS.

18 Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amended

19 to read as follows:

20 ‘‘(7) REPORTING ARREARAGES TO CREDIT BU21 REAUS.—

22 ‘‘(A) IN GENERAL.—Procedures (subject to

23 safeguards pursuant to subparagraph (B)) re24 quiring the State to report periodically to

25 consumer reporting agencies (as defined in sec26 tion 603(f) of the Fair Credit Reporting Act
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1 (15 U.S.C. 1681a(f)) the name of any non2 custodial parent who is delinquent in the pay3 ment of support, and the amount of overdue

4 support owed by such parent.

5 ‘‘(B) SAFEGUARDS.—Procedures ensuring

6 that, in carrying out subparagraph (A), infor7 mation with respect to a noncustodial parent is

8 reported—

9 ‘‘(i) only after such parent has been

10 afforded all due process required under

11 State law, including notice and a reason12 able opportunity to contest the accuracy of

13 such information; and

14 ‘‘(ii) only to an entity that has fur15 nished evidence satisfactory to the State

16 that the entity is a consumer reporting

17 agency (as so defined).’’.

18 SEC. 368. LIENS.

19 Section 466(a)(4) (42 U.S.C. 666(a)(4)) is amended

20 to read as follows:

21 ‘‘(4) LIENS.—Procedures under which—

22 ‘‘(A) liens arise by operation of law against

23 real and personal property for amounts of over24 due support owed by a noncustodial parent who

25 resides or owns property in the State; and
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1 ‘‘(B) the State accords full faith and credit

2 to liens described in subparagraph (A) arising

3 in another State, when the State agency, party,

4 or other entity seeking to enforce such a lien

5 complies with the procedural rules relating to

6 recording or serving liens that arise within the

7 State, except that such rules may not require

8 judicial notice or hearing prior to the enforce9 ment of such a lien.’’.

10 SEC. 369. STATE LAW AUTHORIZING SUSPENSION OF LI11 CENSES.

12 Section 466(a) (42 U.S.C. 666(a)), as amended by

13 sections 315, 317(a), 323, and 365 of this Act, is amended

14 by adding at the end the following:

15 ‘‘(16) AUTHORITY TO WITHHOLD OR SUSPEND

16 LICENSES.—Procedures under which the State has

17 (and uses in appropriate cases) authority to withhold

18 or suspend, or to restrict the use of driver’s licenses,

19 professional and occupational licenses, and rec20 reational licenses of individuals owing overdue sup21 port or failing, after receiving appropriate notice, to

22 comply with subpoenas or warrants relating to pa23 ternity or child support proceedings.’’.
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1 SEC. 370. DENIAL OF PASSPORTS FOR NONPAYMENT OF

2 CHILD SUPPORT.

3 (a) HHS CERTIFICATION PROCEDURE.—

4 (1) SECRETARIAL RESPONSIBILITY.—Section

5 452 (42 U.S.C. 652), as amended by section 345 of

6 this Act, is amended by adding at the end the fol7 lowing new subsection:

8 ‘‘(k)(1) If the Secretary receives a certification by a

9 State agency in accordance with the requirements of sec10 tion 454(31) that an individual owes arrearages of child

11 support in an amount exceeding $5,000, the Secretary

12 shall transmit such certification to the Secretary of State

13 for action (with respect to denial, revocation, or limitation

14 of passports) pursuant paragraph (2).

15 ‘‘(2) The Secretary of State shall, upon certification

16 by the Secretary transmitted under paragraph (1), refuse

17 to issue a passport to such individual, and may revoke,

18 restrict, or limit a passport issued previously to such indi19 vidual.

20 ‘‘(3) The Secretary and the Secretary of State shall

21 not be liable to an individual for any action with respect

22 to a certification by a State agency under this section.’’.

23 (2) STATE AGENCY RESPONSIBILITY.—Section

24 454 (42 U.S.C. 654), as amended by sections

25 301(b), 303(a), 312(b), 313(a), 333, and 343(b) of

26 this Act, is amended—
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1 (A) by striking ‘‘and’’ at the end of para2 graph (29);

3 (B) by striking the period at the end of

4 paragraph (30) and inserting ‘‘; and’’; and

5 (C) by adding after paragraph (30) the fol6 lowing new paragraph:

7 ‘‘(31) provide that the State agency will have in

8 effect a procedure for certifying to the Secretary, for

9 purposes of the procedure under section 452(k), de10 terminations that individuals owe arrearages of child

11 support in an amount exceeding $5,000, under

12 which procedure—

13 ‘‘(A) each individual concerned is afforded

14 notice of such determination and the con15 sequences thereof, and an opportunity to con16 test the determination; and

17 ‘‘(B) the certification by the State agency

18 is furnished to the Secretary in such format,

19 and accompanied by such supporting docu20 mentation, as the Secretary may require.’’.

21 (b) EFFECTIVE DATE.—This section and the amend22 ments made by this section shall become effective October

23 1, 1997.
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1 SEC. 371. INTERNATIONAL SUPPORT ENFORCEMENT.

2 (a) AUTHORITY FOR INTERNATIONAL AGREE3 MENTS.—Part D of title IV, as amended by section 362(a)

4 of this Act, is amended by adding after section 459 the

5 following new section:

6 ‘‘SEC. 459A. INTERNATIONAL SUPPORT ENFORCEMENT.

7 ‘‘(a) AUTHORITY FOR DECLARATIONS.—

8 ‘‘(1) DECLARATION.—The Secretary of State,

9 with the concurrence of the Secretary of Health and

10 Human Services, is authorized to declare any foreign

11 country (or a political subdivision thereof) to be a

12 foreign reciprocating country if the foreign country

13 has established, or undertakes to establish, proce14 dures for the establishment and enforcement of du15 ties of support owed to obligees who are residents of

16 the United States, and such procedures are substan17 tially in conformity with the standards prescribed

18 under subsection (b).

19 ‘‘(2) REVOCATION.—A declaration with respect

20 to a foreign country made pursuant to paragraph

21 (1) may be revoked if the Secretaries of State and

22 Health and Human Services determine that—

23 ‘‘(A) the procedures established by the for24 eign country regarding the establishment and

25 enforcement of duties of support have been so

26 changed, or the foreign country’s implementa-
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1 tion of such procedures is so unsatisfactory,

2 that such procedures do not meet the criteria

3 for such a declaration; or

4 ‘‘(B) continued operation of the declaration

5 is not consistent with the purposes of this part.

6 ‘‘(3) FORM OF DECLARATION.—A declaration

7 under paragraph (1) may be made in the form of an

8 international agreement, in connection with an inter9 national agreement or corresponding foreign declara10 tion, or on a unilateral basis.

11 ‘‘(b) STANDARDS FOR FOREIGN SUPPORT ENFORCE12 MENT PROCEDURES.—

13 ‘‘(1) MANDATORY ELEMENTS.—Support en14 forcement procedures of a foreign country which

15 may be the subject of a declaration pursuant to sub16 section (a)(1) shall include the following elements:

17 ‘‘(A) The foreign country (or political sub18 division thereof) has in effect procedures, avail19 able to residents of the United States—

20 ‘‘(i) for establishment of paternity,

21 and for establishment of orders of support

22 for children and custodial parents; and

23 ‘‘(ii) for enforcement of orders to pro24 vide support to children and custodial par25 ents, including procedures for collection
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1 and appropriate distribution of child sup2 port payments under such orders.

3 ‘‘(B) The procedures described in subpara4 graph (A), including legal and administrative

5 assistance, are provided to residents of the

6 United States at no cost.

7 ‘‘(C) An agency of the foreign country is

8 designated as a Central Authority responsible

9 for—

10 ‘‘(i) facilitating support enforcement in cases

11 involving residents of the foreign country and resi12 dents of the United States; and

13 ‘‘(ii) ensuring compliance with the standards es14 tablished pursuant to this subsection.

15 ‘‘(2) ADDITIONAL ELEMENTS.—The Secretary

16 of Health and Human Services and the Secretary of

17 State, in consultation with the States, may establish

18 such additional standards as may be considered nec19 essary to further the purposes of this section.

20 ‘‘(c) DESIGNATION OF UNITED STATES CENTRAL

21 AUTHORITY.—It shall be the responsibility of the Sec22 retary of Health and Human Services to facilitate support

23 enforcement in cases involving residents of the United

24 States and residents of foreign countries that are the sub-
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1 ject of a declaration under this section, by activities in2 cluding—

3 ‘‘(1) development of uniform forms and proce4 dures for use in such cases;

5 ‘‘(2) notification of foreign reciprocating coun6 tries of the State of residence of individuals sought

7 for support enforcement purposes, on the basis of in8 formation provided by the Federal Parent Locator

9 Service; and

10 ‘‘(3) such other oversight, assistance, and co11 ordination activities as the Secretary may find nec12 essary and appropriate.

13 ‘‘(d) EFFECT ON OTHER LAWS.—States may enter

14 into reciprocal arrangements for the establishment and en15 forcement of support obligations with foreign countries

16 that are not the subject of a declaration pursuant to sub17 section (a), to the extent consistent with Federal law.’’.

18 (b) STATE PLAN REQUIREMENT.—Section 454 (42

19 U.S.C. 654), as amended by sections 301(b), 303(a),

20 312(b), 313(a), 333, 343(b), and 370(a)(2) of this Act,

21 is amended—

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

23 (30);

24 (2) by striking the period at the end of para25 graph (31) and inserting ‘‘; and’’; and
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1 (3) by adding after paragraph (31) the follow2 ing new paragraph:

3 ‘‘(32)(A) provide that any request for services

4 under this part by a foreign reciprocating country or

5 a foreign country with which the State has an ar6 rangement described in section 459A(d)(2) shall be

7 treated as a request by a State;

8 ‘‘(B) provide, at State option, notwithstanding

9 paragraph (4) or any other provision of this part,

10 for services under the plan for enforcement of a

11 spousal support order not described in paragraph

12 (4)(B) entered by such a country (or subdivision);

13 and

14 ‘‘(C) provide that no applications will be re15 quired from, and no costs will be assessed for such

16 services against, the foreign reciprocating country or

17 foreign obligee (but costs may at State option be as18 sessed against the obligor).’’.

19 SEC. 372. FINANCIAL INSTITUTION DATA MATCHES.

20 Section 466(a) (42 U.S.C. 666(a)), as amended by

21 sections 315, 317(a), 323, 365, and 369 of this Act, is

22 amended by adding at the end the following new para23 graph:

24 ‘‘(17) FINANCIAL INSTITUTION DATA

25 MATCHES.—
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1 ‘‘(A) IN GENERAL.—Procedures under

2 which the State agency shall enter into agree3 ments with financial institutions doing business

4 in the State—

5 ‘‘(i) to develop and operate, in coordi6 nation with such financial institutions, a

7 data match system, using automated data

8 exchanges to the maximum extent feasible,

9 in which each such financial institution is

10 required to provide for each calendar quar11 ter the name, record address, social secu12 rity number or other taxpayer identifica13 tion number, and other identifying infor14 mation for each noncustodial parent who

15 maintains an account at such institution

16 and who owes past-due support, as identi17 fied by the State by name and social secu18 rity number or other taxpayer identifica19 tion number; and

20 ‘‘(ii) in response to a notice of lien or

21 levy, encumber or surrender, as the case

22 may be, assets held by such institution on

23 behalf of any noncustodial parent who is

24 subject to a child support lien pursuant to

25 paragraph (4).
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1 ‘‘(B) REASONABLE FEES.—The State

2 agency may pay a reasonable fee to a financial

3 institution for conducting the data match pro4 vided for in subparagraph (A)(i), not to exceed

5 the actual costs incurred by such financial insti6 tution.

7 ‘‘(C) LIABILITY.—A financial institution

8 shall not be liable under any Federal or State

9 law to any person—

10 ‘‘(i) for any disclosure of information

11 to the State agency under subparagraph

12 (A)(i);

13 ‘‘(ii) for encumbering or surrendering

14 any assets held by such financial institu15 tion in response to a notice of lien or levy

16 issued by the State agency as provided for

17 in subparagraph (A)(ii); or

18 ‘‘(iii) for any other action taken in

19 good faith to comply with the requirements

20 of subparagraph (A).

21 ‘‘(D) DEFINITIONS.—For purposes of this

22 paragraph—

23 ‘‘(i) FINANCIAL INSTITUTION.—The

24 term ‘financial institution’ has the mean-
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1 ing given to such term by section

2 469A(d)(1).

3 ‘‘(ii) ACCOUNT.—The term ‘account’

4 means a demand deposit account, checking

5 or negotiable withdrawal order account,

6 savings account, time deposit account, or

7 money-market mutual fund account.’’.

8 SEC. 373. ENFORCEMENT OF ORDERS AGAINST PATERNAL

9 OR MATERNAL GRANDPARENTS IN CASES OF

10 MINOR PARENTS.

11 Section 466(a) (42 U.S.C. 666(a)), as amended by

12 sections 315, 317(a), 323, 365, 369, and 372 of this Act,

13 is amended by adding at the end the following new para14 graph:

15 ‘‘(18) ENFORCEMENT OF ORDERS AGAINST PA16 TERNAL OR MATERNAL GRANDPARENTS.—Proce17 dures under which, at the State’s option, any child

18 support order enforced under this part with respect

19 to a child of minor parents, if the custodial parent

20 of such child is receiving assistance under the State

21 program under part A, shall be enforceable, jointly

22 and severally, against the parents of the noncusto23 dial parent of such child.’’.
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1 SEC. 374. NONDISCHARGEABILITY IN BANKRUPTCY OF

2 CERTAIN DEBTS FOR THE SUPPORT OF A

3 CHILD.

4 (a) AMENDMENT TO TITLE 11 OF THE UNITED

5 STATES CODE.—Section 523(a) of title 11, United States

6 Code, is amended—

7 (1) in paragraph (16) by striking the period at

8 the end and inserting ‘‘; or’’,

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

10 ‘‘(17) owed under State law to a State or mu11 nicipality that is—

12 ‘‘(A) in the nature of support, and

13 ‘‘(B) enforceable under part D of title IV

14 of the Social Security Act (42 U.S.C. 601 et

15 seq.).’’, and

16 (3) in paragraph (5), by striking ‘‘section

17 402(a)(26)’’ and inserting ‘‘section 408(a)(4)’’.

18 (b) AMENDMENT TO THE SOCIAL SECURITY ACT.—

19 Section 456(b) (42 U.S.C. 656(b)) is amended to read as

20 follows:

21 ‘‘(b) NONDISCHARGEABILITY.—A debt (as defined in

22 section 101 of title 11 of the United States Code) owed

23 under State law to a State (as defined in such section)

24 or municipality (as defined in such section) that is in the

25 nature of support and that is enforceable under this part
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1 is not released by a discharge in bankruptcy under title

2 11 of the United States Code.’’.

3 (c) APPLICATION OF AMENDMENTS.—The amend4 ments made by this section shall apply only with respect

5 to cases commenced under title 11 of the United States

6 Code after the date of the enactment of this Act.

7 Subtitle H—Medical Support

8 SEC. 376. CORRECTION TO ERISA DEFINITION OF MEDICAL

9 CHILD SUPPORT ORDER.

10 (a) IN GENERAL.—Section 609(a)(2)(B) of the Em11 ployee Retirement Income Security Act of 1974 (29

12 U.S.C. 1169(a)(2)(B)) is amended—

13 (1) by striking ‘‘issued by a court of competent

14 jurisdiction’’;

15 (2) by striking the period at the end of clause

16 (ii) and inserting a comma; and

17 (3) by adding, after and below clause (ii), the

18 following:

19 ‘‘if such judgment, decree, or order (I) is issued

20 by a court of competent jurisdiction or (II) is

21 issued through an administrative process estab22 lished under State law and has the force and ef23 fect of law under applicable State law.’’.

24 (b) EFFECTIVE DATE.—
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1 (1) IN GENERAL.—The amendments made by

2 this section shall take effect on the date of the en3 actment of this Act.

4 (2) PLAN AMENDMENTS NOT REQUIRED UNTIL

5 JANUARY 1, 1997.—Any amendment to a plan re6 quired to be made by an amendment made by this

7 section shall not be required to be made before the

8 1st plan year beginning on or after January 1,

9 1997, if—

10 (A) during the period after the date before

11 the date of the enactment of this Act and be12 fore such 1st plan year, the plan is operated in

13 accordance with the requirements of the amend14 ments made by this section; and

15 (B) such plan amendment applies retro16 actively to the period after the date before the

17 date of the enactment of this Act and before

18 such 1st plan year.

19 A plan shall not be treated as failing to be operated

20 in accordance with the provisions of the plan merely

21 because it operates in accordance with this para22 graph.
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1 SEC. 377. ENFORCEMENT OF ORDERS FOR HEALTH CARE

2 COVERAGE.

3 Section 466(a) (42 U.S.C. 666(a)), as amended by

4 sections 315, 317(a), 323, 365, 369, 372, and 373 of this

5 Act, is amended by adding at the end the following new

6 paragraph:

7 ‘‘(19) HEALTH CARE COVERAGE.—Procedures

8 under which all child support orders enforced pursu9 ant to this part shall include a provision for the

10 health care coverage of the child, and in the case in

11 which a noncustodial parent provides such coverage

12 and changes employment, and the new employer pro13 vides health care coverage, the State agency shall

14 transfer notice of the provision to the employer,

15 which notice shall operate to enroll the child in the

16 noncustodial parent’s health plan, unless the non17 custodial parent contests the notice.’’.

18 Subtitle I—Enhancing Responsibil19 ity and Opportunity for Non20 Residential Parents

21 SEC. 381. GRANTS TO STATES FOR ACCESS AND VISITA22 TION PROGRAMS.

23 Part D of title IV (42 U.S.C. 651–669), as amended

24 by section 353, is amended by adding at the end the fol25 lowing new section:
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1 ‘‘SEC. 469B. GRANTS TO STATES FOR ACCESS AND VISITA2 TION PROGRAMS.

3 ‘‘(a) IN GENERAL.—The Administration for Children

4 and Families shall make grants under this section to en5 able States to establish and administer programs to sup6 port and facilitate noncustodial parents’ access to and visi7 tation of their children, by means of activities including

8 mediation (both voluntary and mandatory), counseling,

9 education, development of parenting plans, visitation en10 forcement (including monitoring, supervision and neutral

11 drop-off and pickup), and development of guidelines for

12 visitation and alternative custody arrangements.

13 ‘‘(b) AMOUNT OF GRANT.—The amount of the grant

14 to be made to a State under this section for a fiscal year

15 shall be an amount equal to the lesser of—

16 ‘‘(1) 90 percent of State expenditures during

17 the fiscal year for activities described in subsection

18 (a); or

19 ‘‘(2) the allotment of the State under sub20 section (c) for the fiscal year.

21 ‘‘(c) ALLOTMENTS TO STATES.—

22 ‘‘(1) IN GENERAL.—The allotment of a State

23 for a fiscal year is the amount that bears the same

24 ratio to $10,000,000 for grants under this section

25 for the fiscal year as the number of children in the
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1 State living with only 1 biological parent bears to

2 the total number of such children in all States.

3 ‘‘(2) MINIMUM ALLOTMENT.—The Administra4 tion for Children and Families shall adjust allot5 ments to States under paragraph (1) as necessary to

6 ensure that no State is allotted less than—

7 ‘‘(A) $50,000 for fiscal year 1997 or 1998;

8 or

9 ‘‘(B) $100,000 for any succeeding fiscal

10 year.

11 ‘‘(d) NO SUPPLANTATION OF STATE EXPENDITURES

12 FOR SIMILAR ACTIVITIES.—A State to which a grant is

13 made under this section may not use the grant to supplant

14 expenditures by the State for activities specified in sub15 section (a), but shall use the grant to supplement such

16 expenditures at a level at least equal to the level of such

17 expenditures for fiscal year 1995.

18 ‘‘(e) STATE ADMINISTRATION.—Each State to which

19 a grant is made under this section—

20 ‘‘(1) may administer State programs funded

21 with the grant, directly or through grants to or con22 tracts with courts, local public agencies, or non-prof23 it private entities;

24 ‘‘(2) shall not be required to operate such pro25 grams on a statewide basis; and
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1 ‘‘(3) shall monitor, evaluate, and report on such

2 programs in accordance with regulations prescribed

3 by the Secretary.’’.

4 Subtitle J—Effective Dates and

5 Conforming Amendments

6 SEC. 391. EFFECTIVE DATES AND CONFORMING AMEND7 MENTS.

8 (a) IN GENERAL.—Except as otherwise specifically

9 provided (but subject to subsections (b) and (c))—

10 (1) the provisions of this title requiring the en11 actment or amendment of State laws under section

12 466 of the Social Security Act, or revision of State

13 plans under section 454 of such Act, shall be effec14 tive with respect to periods beginning on and after

15 October 1, 1996; and

16 (2) all other provisions of this title shall become

17 effective upon the date of the enactment of this Act.

18 (b) GRACE PERIOD FOR STATE LAW CHANGES.—The

19 provisions of this title shall become effective with respect

20 to a State on the later of—

21 (1) the date specified in this title, or

22 (2) the effective date of laws enacted by the leg23 islature of such State implementing such provisions,

24 but in no event later than the 1st day of the 1st calendar

25 quarter beginning after the close of the 1st regular session
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1 of the State legislature that begins after the date of the

2 enactment of this Act. For purposes of the previous sen3 tence, in the case of a State that has a 2-year legislative

4 session, each year of such session shall be deemed to be

5 a separate regular session of the State legislature.

6 (c) GRACE PERIOD FOR STATE CONSTITUTIONAL

7 AMENDMENT.—A State shall not be found out of compli8 ance with any requirement enacted by this title if the State

9 is unable to so comply without amending the State con10 stitution until the earlier of—

11 (1) 1 year after the effective date of the nec12 essary State constitutional amendment; or

13 (2) 5 years after the date of the enactment of

14 this Act.

15 (d) CONFORMING AMENDMENTS.—

16 (1) The following provisions are amended by

17 striking ‘‘absent’’ each place it appears and inserting

18 ‘‘noncustodial’’:

19 (A) Section 451 (42 U.S.C. 651).

20 (B) Subsections (a)(1), (a)(8), (a)(10)(E),

21 (a)(10)(F), (f), and (h) of section 452 (42

22 U.S.C. 652).

23 (C) Subsections (a) and (f) of section 453

24 (42 U.S.C. 653).
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1 (D) Paragraphs (8), (13), and (21)(A) of

2 section 454 (42 U.S.C. 654).

3 (E) Section 455(e)(1) (42 U.S.C.

4 655(e)(1)).

5 (F) Section 458(a) (42 U.S.C. 658(a)).

6 (G) Subsections (a), (b), and (c) of section

7 463 (42 U.S.C. 663).

8 (H) Subsections (a)(3)(A), (a)(3)(C),

9 (a)(6), and (a)(8)(B)(ii), the last sentence of

10 subsection (a), and subsections (b)(1),

11 (b)(3)(B), (b)(3)(B)(i), (b)(6)(A)(i), (b)(8),

12 (b)(9), and (e) of section 466 (42 U.S.C. 666).

13 (2) The following provisions are amended by

14 striking ‘‘an absent’’ each place it appears and in15 serting ‘‘a noncustodial’’:

16 (A) Paragraphs (2) and (3) of section

17 453(c) (42 U.S.C. 653(c)).

18 (B) Subparagraphs (B) and (C) of section

19 454(9) (42 U.S.C. 654(9)).

20 (C) Section 456(a)(3) (42 U.S.C.

21 656(a)(3)).

22 (D) Subsections (a)(3)(A), (a)(6),

23 (a)(8)(B)(i), (b)(3)(A), and (b)(3)(B) of section

24 466 (42 U.S.C. 666).
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1 (E) Paragraphs (2) and (4) of section 469

2 (42 U.S.C. 669).

3 TITLE IV—RESTRICTING WEL4 FARE AND PUBLIC BENEFITS

5 FOR ALIENS

6 SEC. 400. STATEMENTS OF NATIONAL POLICY CONCERNING

7 WELFARE AND IMMIGRATION.

8 The Congress makes the following statements con9 cerning national policy with respect to welfare and immi10 gration:

11 (1) Self-sufficiency has been a basic principle of

12 United States immigration law since this country’s

13 earliest immigration statutes.

14 (2) It continues to be the immigration policy of

15 the United States that—

16 (A) aliens within the nation’s borders not

17 depend on public resources to meet their needs,

18 but rather rely on their own capabilities and the

19 resources of their families, their sponsors, and

20 private organizations, and

21 (B) the availability of public benefits not

22 constitute an incentive for immigration to the

23 United States.

24 (3) Despite the principle of self-sufficiency,

25 aliens have been applying for and receiving public
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1 benefits from Federal, State, and local governments

2 at increasing rates.

3 (4) Current eligibility rules for public assistance

4 and unenforceable financial support agreements have

5 proved wholly incapable of assuring that individual

6 aliens not burden the public benefits system.

7 (5) It is a compelling government interest to

8 enact new rules for eligibility and sponsorship agree9 ments in order to assure that aliens be self-reliant

10 in accordance with national immigration policy.

11 (6) It is a compelling government interest to re12 move the incentive for illegal immigration provided

13 by the availability of public benefits.

14 (7) With respect to the State authority to make

15 determinations concerning the eligibility of qualified

16 aliens for public benefits in this title, a State that

17 chooses to follow the Federal classification in deter18 mining the eligibility of such aliens for public assist19 ance shall be considered to have chosen the least re20 strictive means available for achieving the compelling

21 governmental interest of assuring that aliens be self22 reliant in accordance with national immigration pol23 icy.
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1 Subtitle A—Eligibility for Federal

2 Benefits

3 SEC. 401. ALIENS WHO ARE NOT QUALIFIED ALIENS INELI4 GIBLE FOR FEDERAL PUBLIC BENEFITS.

5 (a) IN GENERAL.—Notwithstanding any other provi6 sion of law and except as provided in subsection (b), an

7 alien who is not a qualified alien (as defined in section

8 431) is not eligible for any Federal public benefit (as de9 fined in subsection (c)).

10 (b) EXCEPTIONS.—

11 (1) Subsection (a) shall not apply with respect

12 to the following Federal public benefits:

13 (A) Emergency medical services under title

14 XIX or XXI of the Social Security Act.

15 (B) Short-term, non-cash, in-kind emer16 gency disaster relief.

17 (C)(i) Public health assistance for immuni18 zations.

19 (ii) Public health assistance for testing and

20 treatment of a serious communicable disease if

21 the Secretary of Health and Human Services

22 determines that it is necessary to prevent the

23 spread of such disease.

24 (D) Programs, services, or assistance (such

25 as soup kitchens, crisis counseling and interven-
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1 tion, and short-term shelter) specified by the

2 Attorney General, in the Attorney General’s

3 sole and unreviewable discretion after consulta4 tion with appropriate Federal agencies and de5 partments, which (i) deliver in-kind services at

6 the community level, including through public

7 or private nonprofit agencies; (ii) do not condi8 tion the provision of assistance, the amount of

9 assistance provided, or the cost of assistance

10 provided on the individual recipient’s income or

11 resources; and (iii) are necessary for the protec12 tion of life or safety.

13 (E) Programs for housing or community

14 development assistance or financial assistance

15 administered by the Secretary of Housing and

16 Urban Development, any program under title V

17 of the Housing Act of 1949, or any assistance

18 under section 306C of the Consolidated Farm

19 and Rural Development Act, to the extent that

20 the alien is receiving such a benefit on the date

21 of the enactment of this Act.

22 (2) Subsection (a) shall not apply to any benefit

23 payable under title II of the Social Security Act to

24 an alien who is lawfully present in the United States

25 as determined by the Attorney General, to any bene-
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1 fit if nonpayment of such benefit would contravene

2 an international agreement described in section 233

3 of the Social Security Act, to any benefit if nonpay4 ment would be contrary to section 202(t) of the So5 cial Security Act, or to any benefit payable under

6 title II of the Social Security Act to which entitle7 ment is based on an application filed in or before the

8 month in which this Act becomes law.

9 (c) FEDERAL PUBLIC BENEFIT DEFINED.—

10 (1) Except as provided in paragraph (2), for

11 purposes of this title the term ‘‘Federal public bene12 fit’’ means—

13 (A) any grant, contract, loan, professional

14 license, or commercial license provided by an

15 agency of the United States or by appropriated

16 funds of the United States; and

17 (B) any retirement, welfare, health, dis18 ability, public or assisted housing, postsecond19 ary education, food assistance, unemployment

20 benefit, or any other similar benefit for which

21 payments or assistance are provided to an indi22 vidual, household, or family eligibility unit by

23 an agency of the United States or by appro24 priated funds of the United States.

25 (2) Such term shall not apply—
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1 (A) to any contract, professional license, or

2 commercial license for a nonimmigrant whose

3 visa for entry is related to such employment in

4 the United States; or

5 (B) with respect to benefits for an alien

6 who as a work authorized nonimmigrant or as

7 an alien lawfully admitted for permanent resi8 dence under the Immigration and Nationality

9 Act qualified for such benefits and for whom

10 the United States under reciprocal treaty agree11 ments is required to pay benefits, as determined

12 by the Attorney General, after consultation with

13 the Secretary of State.

14 SEC. 402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR

15 CERTAIN FEDERAL PROGRAMS.

16 (a) LIMITED ELIGIBILITY FOR SPECIFIED FEDERAL

17 PROGRAMS.—

18 (1) IN GENERAL.—Notwithstanding any other

19 provision of law and except as provided in paragraph

20 (2), an alien who is a qualified alien (as defined in

21 section 431) is not eligible for any specified Federal

22 program (as defined in paragraph (3)).

23 (2) EXCEPTIONS.—
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1 (A) TIME-LIMITED EXCEPTION FOR REFU2 GEES AND ASYLEES.—Paragraph (1) shall not

3 apply to an alien until 5 years after the date—

4 (i) an alien is admitted to the United

5 States as a refugee under section 207 of

6 the Immigration and Nationality Act;

7 (ii) an alien is granted asylum under

8 section 208 of such Act; or

9 (iii) an alien’s deportation is withheld

10 under section 243(h) of such Act.

11 (B) CERTAIN PERMANENT RESIDENT

12 ALIENS.—Paragraph (1) shall not apply to an

13 alien who—

14 (i) is lawfully admitted to the United

15 States for permanent residence under the

16 Immigration and Nationality Act; and

17 (ii)(I) has worked 40 qualifying quar18 ters of coverage as defined under title II of

19 the Social Security Act or can be credited

20 with such qualifying quarters as provided

21 under section 435, and (II) did not receive

22 any Federal means-tested public benefit

23 (as defined in section 403(c)) during any

24 such quarter.
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1 (C) VETERAN AND ACTIVE DUTY EXCEP2 TION.—Paragraph (1) shall not apply to an

3 alien who is lawfully residing in any State and

4 is—

5 (i) a veteran (as defined in section

6 101 of title 38, United States Code) with

7 a discharge characterized as an honorable

8 discharge and not on account of alienage,

9 (ii) on active duty (other than active

10 duty for training) in the Armed Forces of

11 the United States, or

12 (iii) the spouse or unmarried depend13 ent child of an individual described in

14 clause (i) or (ii).

15 (D) TRANSITION FOR ALIENS CURRENTLY

16 RECEIVING BENEFITS.—

17 (i) SSI.—

18 (I) IN GENERAL.—With respect

19 to the specified Federal program de20 scribed in paragraph (3)(A), during

21 the period beginning on the date of

22 the enactment of this Act and ending

23 on the date which is 1 year after such

24 date of enactment, the Commissioner

25 of Social Security shall redetermine
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1 the eligibility of any individual who is

2 receiving benefits under such program

3 as of the date of the enactment of this

4 Act and whose eligibility for such ben5 efits may terminate by reason of the

6 provisions of this subsection.

7 (II) REDETERMINATION CRI8 TERIA.— With respect to any redeter9 mination under subclause (I), the

10 Commissioner of Social Security shall

11 apply the eligibility criteria for new

12 applicants for benefits under such

13 program.

14 (III) GRANDFATHER PROVI15 SION.—The provisions of this sub16 section and the redetermination under

17 subclause (I), shall only apply with re18 spect to the benefits of an individual

19 described in subclause (I) for months

20 beginning on or after the date of the

21 redetermination with respect to such

22 individual.

23 (IV) NOTICE.—Not later than

24 January 1, 1997, the Commissioner of

25 Social Security shall notify an individ-
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1 ual described in subclause (I) of the

2 provisions of this clause.

3 (ii) FOOD STAMPS.—

4 (I) IN GENERAL.—With respect

5 to the specified Federal program de6 scribed in paragraph (3)(B), during

7 the period beginning on the date of

8 enactment of this Act and ending on

9 the date which is 1 year after the date

10 of enactment, the State agency shall,

11 at the time of the recertification, re12 certify the eligibility of any individual

13 who is receiving benefits under such

14 program as of the date of enactment

15 of this Act and whose eligibility for

16 such benefits may terminate by reason

17 of the provisions of this subsection.

18 (II) RECERTIFICATION CRI19 TERIA.—With respect to any recertifi20 cation under subclause (I), the State

21 agency shall apply the eligibility cri22 teria for applicants for benefits under

23 such program.

24 (III) GRANDFATHER PROVI25 SION.—The provisions of this sub-
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1 section and the recertification under

2 subclause (I) shall only apply with re3 spect to the eligibility of an alien for

4 a program for months beginning on or

5 after the date of recertification, if on

6 the date of enactment of this Act the

7 alien is lawfully residing in any State

8 and is receiving benefits under such

9 program on such date of enactment.

10 (3) SPECIFIED FEDERAL PROGRAM DEFINED.—

11 For purposes of this title, the term ‘‘specified Fed12 eral program’’ means any of the following:

13 (A) SSI.—The supplemental security in14 come program under title XVI of the Social Se15 curity Act, including supplementary payments

16 pursuant to an agreement for Federal adminis17 tration under section 1616(a) of the Social Se18 curity Act and payments pursuant to an agree19 ment entered into under section 212(b) of Pub20 lic Law 93–66.

21 (B) FOOD STAMPS.—The food stamp pro22 gram as defined in section 3(h) of the Food

23 Stamp Act of 1977.

24 (b) LIMITED ELIGIBILITY FOR DESIGNATED FED25 ERAL PROGRAMS.—
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1 (1) IN GENERAL.—Notwithstanding any other

2 provision of law and except as provided in section

3 403 and paragraph (2), a State is authorized to de4 termine the eligibility of an alien who is a qualified

5 alien (as defined in section 431) for any designated

6 Federal program (as defined in paragraph (3)).

7 (2) EXCEPTIONS.—Qualified aliens under this

8 paragraph shall be eligible for any designated Fed9 eral program.

10 (A) TIME-LIMITED EXCEPTION FOR REFU11 GEES AND ASYLEES.—

12 (i) An alien who is admitted to the

13 United States as a refugee under section

14 207 of the Immigration and Nationality

15 Act until 5 years after the date of an

16 alien’s entry into the United States.

17 (ii) An alien who is granted asylum

18 under section 208 of such Act until 5 years

19 after the date of such grant of asylum.

20 (iii) An alien whose deportation is

21 being withheld under section 243(h) of

22 such Act until 5 years after such withhold23 ing.

24 (B) CERTAIN PERMANENT RESIDENT

25 ALIENS.—An alien who—
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1 (i) is lawfully admitted to the United

2 States for permanent residence under the

3 Immigration and Nationality Act; and

4 (ii)(I) has worked 40 qualifying quar5 ters of coverage as defined under title II of

6 the Social Security Act or can be credited

7 with such qualifying quarters as provided

8 under section 435, and (II) did not receive

9 any Federal means-tested public benefit

10 (as defined in section 403(c)) during any

11 such quarter.

12 (C) VETERAN AND ACTIVE DUTY EXCEP13 TION.—An alien who is lawfully residing in any

14 State and is—

15 (i) a veteran (as defined in section

16 101 of title 38, United States Code) with

17 a discharge characterized as an honorable

18 discharge and not on account of alienage,

19 (ii) on active duty (other than active

20 duty for training) in the Armed Forces of

21 the United States, or

22 (iii) the spouse or unmarried depend23 ent child of an individual described in

24 clause (i) or (ii).
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1 (D) TRANSITION FOR THOSE CURRENTLY

2 RECEIVING BENEFITS.—An alien who on the

3 date of the enactment of this Act is lawfully re4 siding in any State and is receiving benefits

5 under such program on the date of the enact6 ment of this Act shall continue to be eligible to

7 receive such benefits until January 1, 1997.

8 (3) DESIGNATED FEDERAL PROGRAM DE9 FINED.—For purposes of this title, the term ‘‘des10 ignated Federal program’’ means any of the follow11 ing:

12 (A) TEMPORARY ASSISTANCE FOR NEEDY

13 FAMILIES.—The program of block grants to

14 States for temporary assistance for needy fami15 lies under part A of title IV of the Social Secu16 rity Act.

17 (B) SOCIAL SERVICES BLOCK GRANT.—

18 The program of block grants to States for so19 cial services under title XX of the Social Secu20 rity Act.

21 (C) MEDICAID.—The program of medical

22 assistance under title XV and XIX of the Social

23 Security Act.
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1 SEC. 403. FIVE-YEAR LIMITED ELIGIBILITY OF QUALIFIED

2 ALIENS FOR FEDERAL MEANS-TESTED PUB3 LIC BENEFIT.

4 (a) IN GENERAL.—Notwithstanding any other provi5 sion of law and except as provided in subsection (b), an

6 alien who is a qualified alien (as defined in section 431)

7 and who enters the United States on or after the date

8 of the enactment of this Act is not eligible for any Federal

9 means-tested public benefit (as defined in subsection (c))

10 for a period of five years beginning on the date of the

11 alien’s entry into the United States with a status within

12 the meaning of the term ‘‘qualified alien’’.

13 (b) EXCEPTIONS.—The limitation under subsection

14 (a) shall not apply to the following aliens:

15 (1) EXCEPTION FOR REFUGEES AND

16 ASYLEES.—

17 (A) An alien who is admitted to the United

18 States as a refugee under section 207 of the

19 Immigration and Nationality Act.

20 (B) An alien who is granted asylum under

21 section 208 of such Act.

22 (C) An alien whose deportation is being

23 withheld under section 243(h) of such Act.

24 (2) VETERAN AND ACTIVE DUTY EXCEPTION.—

25 An alien who is lawfully residing in any State and

26 is—
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1 (A) a veteran (as defined in section 101 of

2 title 38, United States Code) with a discharge

3 characterized as an honorable discharge and not

4 on account of alienage,

5 (B) on active duty (other than active duty

6 for training) in the Armed Forces of the United

7 States, or

8 (C) the spouse or unmarried dependent

9 child of an individual described in subparagraph

10 (A) or (B).

11 (c) FEDERAL MEANS-TESTED PUBLIC BENEFIT DE12 FINED.—

13 (1) Except as provided in paragraph (2), for

14 purposes of this title, the term ‘‘Federal means-test15 ed public benefit’’ means a public benefit (including

16 cash, medical, housing, and food assistance and so17 cial services) of the Federal Government in which

18 the eligibility of an individual, household, or family

19 eligibility unit for benefits, or the amount of such

20 benefits, or both are determined on the basis of in21 come, resources, or financial need of the individual,

22 household, or unit.

23 (2) Such term does not include the following:

24 (A) Emergency medical services under title

25 XV or XIX of the Social Security Act.
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1 (B) Short-term, non-cash, in-kind emer2 gency disaster relief.

3 (C) Assistance or benefits under the Na4 tional School Lunch Act.

5 (D) Assistance or benefits under the Child

6 Nutrition Act of 1966.

7 (E)(i) Public health assistance for immuni8 zations.

9 (ii) Public health assistance for testing and

10 treatment of a serious communicable disease if

11 the Secretary of Health and Human Services

12 determines that it is necessary to prevent the

13 spread of such disease.

14 (F) Payments for foster care and adoption

15 assistance under part B of title IV of the Social

16 Security Act for a child who would, in the ab17 sence of subsection (a), be eligible to have such

18 payments made on the child’s behalf under such

19 part, but only if the foster or adoptive parent

20 or parents of such child are not described under

21 subsection (a).

22 (G) Programs, services, or assistance (such

23 as soup kitchens, crisis counseling and interven24 tion, and short-term shelter) specified by the

25 Attorney General, in the Attorney General’s
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1 sole and unreviewable discretion after consulta2 tion with appropriate Federal agencies and de3 partments, which (i) deliver in-kind services at

4 the community level, including through public

5 or private nonprofit agencies; (ii) do not condi6 tion the provision of assistance, the amount of

7 assistance provided, or the cost of assistance

8 provided on the individual recipient’s income or

9 resources; and (iii) are necessary for the protec10 tion of life or safety.

11 (H) Programs of student assistance under

12 titles IV, V, IX, and X of the Higher Education

13 Act of 1965.

14 (I) Means-tested programs under the Ele15 mentary and Secondary Education Act of 1965.

16 SEC. 404. NOTIFICATION AND INFORMATION REPORTING.

17 (a) NOTIFICATION.—Each Federal agency that ad18 ministers a program to which section 401, 402, or 403

19 applies shall, directly or through the States, post informa20 tion and provide general notification to the public and to

21 program recipients of the changes regarding eligibility for

22 any such program pursuant to this subtitle.

23 (b) INFORMATION REPORTING UNDER TITLE IV OF

24 THE SOCIAL SECURITY ACT.—Part A of title IV of the

25 Social Security Act, as amended by section 103(a) of this
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1 Act, is amended by inserting the following new section

2 after section 411:

3 ‘‘SEC. 411A. STATE REQUIRED TO PROVIDE CERTAIN INFOR4 MATION.

5 ‘‘Each State to which a grant is made under section

6 403 shall, at least 4 times annually and upon request of

7 the Immigration and Naturalization Service, furnish the

8 Immigration and Naturalization Service with the name

9 and address of, and other identifying information on, any

10 individual who the State knows is unlawfully in the United

11 States.’’.

12 (c) SSI.—Section 1631(e) of such Act (42 U.S.C.

13 1383(e)) is amended—

14 (1) by redesignating the paragraphs (6) and (7)

15 inserted by sections 206(d)(2) and 206(f)(1) of the

16 Social Security Independence and Programs Im17 provement Act of 1994 (Public Law 103–296; 108

18 Stat. 1514, 1515) as paragraphs (7) and (8), re19 spectively; and

20 (2) by adding at the end the following new

21 paragraph:

22 ‘‘(9) Notwithstanding any other provision of

23 law, the Commissioner shall, at least 4 times annu24 ally and upon request of the Immigration and Natu25 ralization Service (hereafter in this paragraph re-
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1 ferred to as the ‘Service’), furnish the Service with

2 the name and address of, and other identifying in3 formation on, any individual who the Commissioner

4 knows is unlawfully in the United States, and shall

5 ensure that each agreement entered into under sec6 tion 1616(a) with a State provides that the State

7 shall furnish such information at such times with re8 spect to any individual who the State knows is un9 lawfully in the United States.’’.

10 (d) INFORMATION REPORTING FOR HOUSING PRO11 GRAMS.—Title I of the United States Housing Act of 1937

12 (42 U.S.C. 1437 et seq.) is amended by adding at the end

13 the following new section:

14 ‘‘SEC. 27. PROVISION OF INFORMATION TO LAW ENFORCE15 MENT AND OTHER AGENCIES.

16 ‘‘Notwithstanding any other provision of law, the Sec17 retary shall, at least 4 times annually and upon request

18 of the Immigration and Naturalization Service (hereafter

19 in this section referred to as the ‘Service’), furnish the

20 Service with the name and address of, and other identify21 ing information on, any individual who the Secretary

22 knows is unlawfully in the United States, and shall ensure

23 that each contract for assistance entered into under sec24 tion 6 or 8 of this Act with a public housing agency pro25 vides that the public housing agency shall furnish such
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1 information at such times with respect to any individual

2 who the public housing agency knows is unlawfully in the

3 United States.’’.

4 Subtitle B—Eligibility for State

5 and Local Public Benefits Pro6 grams

7 SEC. 411. ALIENS WHO ARE NOT QUALIFIED ALIENS OR

8 NONIMMIGRANTS INELIGIBLE FOR STATE

9 AND LOCAL PUBLIC BENEFITS.

10 (a) IN GENERAL.—Notwithstanding any other provi11 sion of law and except as provided in subsections (b) and

12 (d), an alien who is not—

13 (1) a qualified alien (as defined in section 431),

14 (2) a nonimmigrant under the Immigration and

15 Nationality Act, or

16 (3) an alien who is paroled into the United

17 States under section 212(d)(5) of such Act for less

18 than one year,

19 is not eligible for any State or local public benefit (as de20 fined in subsection (c)).

21 (b) EXCEPTIONS.—Subsection (a) shall not apply

22 with respect to the following State or local public benefits:

23 (1) Emergency medical services under title XV

24 or XIX of the Social Security Act.
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1 (2) Short-term, non-cash, in-kind emergency

2 disaster relief.

3 (3)(A) Public health assistance for immuniza4 tions.

5 (B) Public health assistance for testing and

6 treatment of a serious communicable disease if the

7 Secretary of Health and Human Services determines

8 that it is necessary to prevent the spread of such

9 disease.

10 (4) Programs, services, or assistance (such as

11 soup kitchens, crisis counseling and intervention,

12 and short-term shelter) specified by the Attorney

13 General, in the Attorney General’s sole and

14 unreviewable discretion after consultation with ap15 propriate Federal agencies and departments, which

16 (A) deliver in-kind services at the community level,

17 including through public or private nonprofit agen18 cies; (B) do not condition the provision of assistance,

19 the amount of assistance provided, or the cost of as20 sistance provided on the individual recipient’s in21 come or resources; and (C) are necessary for the

22 protection of life or safety.

23 (c) STATE OR LOCAL PUBLIC BENEFIT DEFINED.—
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1 (1) Except as provided in paragraph (2), for

2 purposes of this subtitle the term ‘‘State or local

3 public benefit’’ means—

4 (A) any grant, contract, loan, professional

5 license, or commercial license provided by an

6 agency of a State or local government or by ap7 propriated funds of a State or local govern8 ment; and

9 (B) any retirement, welfare, health, dis10 ability, public or assisted housing, postsecond11 ary education, food assistance, unemployment

12 benefit, or any other similar benefit for which

13 payments or assistance are provided to an indi14 vidual, household, or family eligibility unit by

15 an agency of a State or local government or by

16 appropriated funds of a State or local govern17 ment.

18 (2) Such term shall not apply—

19 (A) to any contract, professional license, or

20 commercial license for a nonimmigrant whose

21 visa for entry is related to such employment in

22 the United States; or

23 (B) with respect to benefits for an alien

24 who as a work authorized nonimmigrant or as

25 an alien lawfully admitted for permanent resi-
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1 dence under the Immigration and Nationality

2 Act qualified for such benefits and for whom

3 the United States under reciprocal treaty agree4 ments is required to pay benefits, as determined

5 by the Secretary of State, after consultation

6 with the Attorney General.

7 (d) STATE AUTHORITY TO PROVIDE FOR ELIGI8 BILITY OF ILLEGAL ALIENS FOR STATE AND LOCAL PUB9 LIC BENEFITS.—A State may provide that an alien who

10 is not lawfully present in the United States is eligible for

11 any State or local public benefit for which such alien would

12 otherwise be ineligible under subsection (a) only through

13 the enactment of a State law after the date of the enact14 ment of this Act which affirmatively provides for such eli15 gibility.

16 SEC. 412. STATE AUTHORITY TO LIMIT ELIGIBILITY OF

17 QUALIFIED ALIENS FOR STATE PUBLIC BENE18 FITS.

19 (a) IN GENERAL.—Notwithstanding any other provi20 sion of law and except as provided in subsection (b), a

21 State is authorized to determine the eligibility for any

22 State public benefits (as defined in subsection (c) of an

23 alien who is a qualified alien (as defined in section 431),

24 a nonimmigrant under the Immigration and Nationality
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1 Act, or an alien who is paroled into the United States

2 under section 212(d)(5) of such Act for less than one year.

3 (b) EXCEPTIONS.—Qualified aliens under this sub4 section shall be eligible for any State public benefits.

5 (1) TIME-LIMITED EXCEPTION FOR REFUGEES

6 AND ASYLEES.—

7 (A) An alien who is admitted to the United

8 States as a refugee under section 207 of the

9 Immigration and Nationality Act until 5 years

10 after the date of an alien’s entry into the Unit11 ed States.

12 (B) An alien who is granted asylum under

13 section 208 of such Act until 5 years after the

14 date of such grant of asylum.

15 (C) An alien whose deportation is being

16 withheld under section 243(h) of such Act until

17 5 years after such withholding.

18 (2) CERTAIN PERMANENT RESIDENT ALIENS.—

19 An alien who—

20 (A) is lawfully admitted to the United

21 States for permanent residence under the Im22 migration and Nationality Act; and

23 (B)(i) has worked 40 qualifying quarters

24 of coverage as defined under title II of the So25 cial Security Act or can be credited with such
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1 qualifying quarters as provided under section

2 435, and (ii) did not receive any Federal

3 means-tested public benefit (as defined in sec4 tion 403(c)) during any such quarter.

5 (3) VETERAN AND ACTIVE DUTY EXCEPTION.—

6 An alien who is lawfully residing in any State and

7 is—

8 (A) a veteran (as defined in section 101 of

9 title 38, United States Code) with a discharge

10 characterized as an honorable discharge and not

11 on account of alienage,

12 (B) on active duty (other than active duty

13 for training) in the Armed Forces of the United

14 States, or

15 (C) the spouse or unmarried dependent

16 child of an individual described in subparagraph

17 (A) or (B).

18 (4) TRANSITION FOR THOSE CURRENTLY RE19 CEIVING BENEFITS.—An alien who on the date of

20 the enactment of this Act is lawfully residing in any

21 State and is receiving benefits on the date of the en22 actment of this Act shall continue to be eligible to

23 receive such benefits until January 1, 1997.

24 (c) STATE PUBLIC BENEFITS DEFINED.—The term

25 ‘‘State public benefits’’ means any means-tested public
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1 benefit of a State or political subdivision of a State under

2 which the State or political subdivision specifies the stand3 ards for eligibility, and does not include any Federal public

4 benefit.

5 Subtitle C—Attribution of Income

6 and Affidavits of Support

7 SEC. 421. FEDERAL ATTRIBUTION OF SPONSOR’S INCOME

8 AND RESOURCES TO ALIEN.

9 (a) IN GENERAL.—Notwithstanding any other provi10 sion of law, in determining the eligibility and the amount

11 of benefits of an alien for any Federal means-tested public

12 benefits program (as defined in section 403(c)), the in13 come and resources of the alien shall be deemed to include

14 the following:

15 (1) The income and resources of any person

16 who executed an affidavit of support pursuant to

17 section 213A of the Immigration and Nationality

18 Act (as added by section 423) on behalf of such

19 alien.

20 (2) The income and resources of the spouse (if

21 any) of the person.

22 (b) APPLICATION.—Subsection (a) shall apply with

23 respect to an alien until such time as the alien—
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1 (1) achieves United States citizenship through

2 naturalization pursuant to chapter 2 of title III of

3 the Immigration and Nationality Act; or

4 (2)(A) has worked 40 qualifying quarters of

5 coverage as defined under title II of the Social Secu6 rity Act or can be credited with such qualifying

7 quarters as provided under section 435, and (B) did

8 not receive any Federal means-tested public benefit

9 (as defined in section 403(c)) during any such quar10 ter.

11 (c) REVIEW OF INCOME AND RESOURCES OF ALIEN

12 UPON REAPPLICATION.—Whenever an alien is required to

13 reapply for benefits under any Federal means-tested pub14 lic benefits program, the applicable agency shall review the

15 income and resources attributed to the alien under sub16 section (a).

17 (d) APPLICATION.—

18 (1) If on the date of the enactment of this Act,

19 a Federal means-tested public benefits program at20 tributes a sponsor’s income and resources to an alien

21 in determining the alien’s eligibility and the amount

22 of benefits for an alien, this section shall apply to

23 any such determination beginning on the day after

24 the date of the enactment of this Act.
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1 (2) If on the date of the enactment of this Act,

2 a Federal means-tested public benefits program does

3 not attribute a sponsor’s income and resources to an

4 alien in determining the alien’s eligibility and the

5 amount of benefits for an alien, this section shall

6 apply to any such determination beginning 180 days

7 after the date of the enactment of this Act.

8 SEC. 422. AUTHORITY FOR STATES TO PROVIDE FOR ATTRI9 BUTION OF SPONSORS INCOME AND RE10 SOURCES TO THE ALIEN WITH RESPECT TO

11 STATE PROGRAMS.

12 (a) OPTIONAL APPLICATION TO STATE PROGRAMS.—

13 Except as provided in subsection (b), in determining the

14 eligibility and the amount of benefits of an alien for any

15 State public benefits (as defined in section 412(c)), the

16 State or political subdivision that offers the benefits is au17 thorized to provide that the income and resources of the

18 alien shall be deemed to include—

19 (1) the income and resources of any individual

20 who executed an affidavit of support pursuant to

21 section 213A of the Immigration and Nationality

22 Act (as added by section 423) on behalf of such

23 alien, and

24 (2) the income and resources of the spouse (if

25 any) of the individual.
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1 (b) EXCEPTIONS.—Subsection (a) shall not apply

2 with respect to the following State public benefits:

3 (1) Emergency medical services.

4 (2) Short-term, non-cash, in-kind emergency

5 disaster relief.

6 (3) Programs comparable to assistance or bene7 fits under the National School Lunch Act.

8 (4) Programs comparable to assistance or bene9 fits under the Child Nutrition Act of 1966.

10 (5)(A) Public health assistance for immuniza11 tions.

12 (B) Public health assistance for testing and

13 treatment of a serious communicable disease if the

14 appropriate chief State health official determines

15 that it is necessary to prevent the spread of such

16 disease.

17 (6) Payments for foster care and adoption as18 sistance.

19 (7) Programs, services, or assistance (such as

20 soup kitchens, crisis counseling and intervention,

21 and short-term shelter) specified by the Attorney

22 General of a State, after consultation with appro23 priate agencies and departments, which (A) deliver

24 in-kind services at the community level, including

25 through public or private nonprofit agencies; (B) do
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1 not condition the provision of assistance, the amount

2 of assistance provided, or the cost of assistance pro3 vided on the individual recipient’s income or re4 sources; and (C) are necessary for the protection of

5 life or safety.

6 SEC. 423. REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF

7 SUPPORT.

8 (a) IN GENERAL.—Title II of the Immigration and

9 Nationality Act is amended by inserting after section 213

10 the following new section:

11 ‘‘REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF SUPPORT

12 ‘‘SEC. 213A. (a) ENFORCEABILITY.—(1) No affidavit

13 of support may be accepted by the Attorney General or

14 by any consular officer to establish that an alien is not

15 excludable as a public charge under section 212(a)(4) un16 less such affidavit is executed as a contract—

17 ‘‘(A) which is legally enforceable against the

18 sponsor by the sponsored alien, the Federal Govern19 ment, and by any State (or any political subdivision

20 of such State) which provides any means-tested pub21 lic benefits program, but not later than 10 years

22 after the alien last receives any such benefit;

23 ‘‘(B) in which the sponsor agrees to financially

24 support the alien, so that the alien will not become

25 a public charge; and
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1 ‘‘(C) in which the sponsor agrees to submit to

2 the jurisdiction of any Federal or State court for the

3 purpose of actions brought under subsection (e)(2).

4 ‘‘(2) A contract under paragraph (1) shall be enforce5 able with respect to benefits provided to the alien until

6 such time as the alien achieves United States citizenship

7 through naturalization pursuant to chapter 2 of title III.

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) REMEDIES.—Remedies available to enforce an

15 affidavit of support under this section include any or all

16 of the remedies described in section 3201, 3203, 3204,

17 or 3205 of title 28, United States Code, as well as an

18 order for specific performance and payment of legal fees

19 and other costs of collection, and include corresponding

20 remedies available under State law. A Federal agency may

21 seek to collect amounts owed under this section in accord22 ance with the provisions of subchapter II of chapter 37

23 of title 31, United States Code.

24 ‘‘(d) NOTIFICATION OF CHANGE OF ADDRESS.—
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1 (1) IN GENERAL.—The sponsor shall notify the

2 Attorney General and the State in which the spon3 sored alien is currently resident within 30 days of

4 any change of address of the sponsor during the pe5 riod specified in subsection (a)(2).

6 (2) PENALTY.—Any person subject to the re7 quirement of paragraph (1) who fails to satisfy such

8 requirement shall be subject to a civil penalty of—

9 (A) not less than $250 or more than

10 $2,000, or

11 (B) if such failure occurs with knowledge

12 that the alien has received any means-tested

13 public benefit, not less than $2,000 or more

14 than $5,000.

15 ‘‘(e) REIMBURSEMENT OF GOVERNMENT EX16 PENSES.—(1)(A) Upon notification that a sponsored alien

17 has received any benefit under any means-tested public

18 benefits program, the appropriate Federal, State, or local

19 official shall request reimbursement by the sponsor in the

20 amount of such assistance.

21 ‘‘(B) The Attorney General, in consultation with the

22 Secretary of Health and Human Services, shall prescribe

23 such regulations as may be necessary to carry out sub24 paragraph (A).
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1 ‘‘(2) If within 45 days after requesting reimburse2 ment, the appropriate Federal, State, or local agency has

3 not received a response from the sponsor indicating a will4 ingness to commence payments, an action may be brought

5 against the sponsor pursuant to the affidavit of support.

6 ‘‘(3) If the sponsor fails to abide by the repayment

7 terms established by such agency, the agency may, within

8 60 days of such failure, bring an action against the spon9 sor pursuant to the affidavit of support.

10 ‘‘(4) No cause of action may be brought under this

11 subsection later than 10 years after the alien last received

12 any benefit under any means-tested public benefits pro13 gram.

14 ‘‘(5) If, pursuant to the terms of this subsection, a

15 Federal, State, or local agency requests reimbursement

16 from the sponsor in the amount of assistance provided,

17 or brings an action against the sponsor pursuant to the

18 affidavit of support, the appropriate agency may appoint

19 or hire an individual or other person to act on behalf of

20 such agency acting under the authority of law for purposes

21 of collecting any moneys owed. Nothing in this subsection

22 shall preclude any appropriate Federal, State, or local

23 agency from directly requesting reimbursement from a

24 sponsor for the amount of assistance provided, or from
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1 bringing an action against a sponsor pursuant to an affi2 davit of support.

3 ‘‘(f) DEFINITIONS.—For the purposes of this sec4 tion—

5 ‘‘(1) SPONSOR.—The term ‘sponsor’ means an

6 individual who—

7 ‘‘(A) is a citizen or national of the United

8 States or an alien who is lawfully admitted to

9 the United States for permanent residence;

10 ‘‘(B) is 18 years of age or over;

11 ‘‘(C) is domiciled in any of the 50 States

12 or the District of Columbia; and

13 ‘‘(D) is the person petitioning for the ad14 mission of the alien under section 204.

15 ‘‘(2) MEANS-TESTED PUBLIC BENEFITS PRO16 GRAM.—The term ‘means-tested public benefits pro17 gram’ means a program of public benefits (including

18 cash, medical, housing, and food assistance and so19 cial services) of the Federal Government or of a

20 State or political subdivision of a State in which the

21 eligibility of an individual, household, or family eligi22 bility unit for benefits under the program, or the

23 amount of such benefits, or both are determined on

24 the basis of income, resources, or financial need of

25 the individual, household, or unit.’’.
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1 (b) CLERICAL AMENDMENT.—The table of contents

2 of such Act is amended by inserting after the item relating

3 to section 213 the following:

‘‘Sec. 213A. Requirements for sponsor’s affidavit of support.’’.

4 (c) EFFECTIVE DATE.—Subsection (a) of section

5 213A of the Immigration and Nationality Act, as inserted

6 by subsection (a) of this section, shall apply to affidavits

7 of support executed on or after a date specified by the

8 Attorney General, which date shall be not earlier than 60

9 days (and not later than 90 days) after the date the Attor10 ney General formulates the form for such affidavits under

11 subsection (b) of such section.

12 (d) BENEFITS NOT SUBJECT TO REIMBURSE13 MENT.—Requirements for reimbursement by a sponsor for

14 benefits provided to a sponsored alien pursuant to an affi15 davit of support under section 213A of the Immigration

16 and Nationality Act shall not apply with respect to the

17 following:

18 (1) Emergency medical services under title XV

19 or XIX of the Social Security Act.

20 (2) Short-term, non-cash, in-kind emergency

21 disaster relief.

22 (3) Assistance or benefits under the National

23 School Lunch Act.

24 (4) Assistance or benefits under the Child Nu25 trition Act of 1966.
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1 (5)(A) Public health assistance for immuniza2 tions.

3 (B) Public health assistance for testing and

4 treatment of a serious communicable disease if the

5 Secretary of Health and Human Services determines

6 that it is necessary to prevent the spread of such

7 disease.

8 (6) Payments for foster care and adoption as9 sistance under part B of title IV of the Social Secu10 rity Act for a child, but only if the foster or adoptive

11 parent or parents of such child are not otherwise in12 eligible pursuant to section 403 of this Act.

13 (7) Programs, services, or assistance (such as

14 soup kitchens, crisis counseling and intervention,

15 and short-term shelter) specified by the Attorney

16 General, in the Attorney General’s sole and

17 unreviewable discretion after consultation with ap18 propriate Federal agencies and departments, which

19 (A) deliver in-kind services at the community level,

20 including through public or private nonprofit agen21 cies; (B) do not condition the provision of assistance,

22 the amount of assistance provided, or the cost of as23 sistance provided on the individual recipient’s in24 come or resources; and (C) are necessary for the

25 protection of life or safety.
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1 (8) Programs of student assistance under titles

2 IV, V, IX, and X of the Higher Education Act of

3 1965.

4 SEC. 424. COSIGNATURE OF ALIEN STUDENT LOANS.

5 Section 484(b) of the Higher Education Act of 1965

6 (20 U.S.C. 1091(b)) is amended by adding at the end the

7 following new paragraph:

8 ‘‘(6) Notwithstanding sections 427(a)(2)(A),

9 428B(a), 428C(b)(4)(A), and 464(c)(1)(E), or any

10 other provision of this title, a student who is an

11 alien lawfully admitted for permanent residence

12 under the Immigration and Nationality Act shall not

13 be eligible for a loan under this title unless the loan

14 is endorsed and cosigned by the alien’s sponsor

15 under section 213A of the Immigration and Nation16 ality Act or by another creditworthy individual who

17 is a United States citizen.’’.

18 Subtitle D—General Provisions

19 SEC. 431. DEFINITIONS.

20 (a) IN GENERAL.—Except as otherwise provided in

21 this title, the terms used in this title have the same mean22 ing given such terms in section 101(a) of the Immigration

23 and Nationality Act.

24 (b) QUALIFIED ALIEN.—For purposes of this title,

25 the term ‘‘qualified alien’’ means an alien who, at the time
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1 the alien applies for, receives, or attempts to receive a

2 Federal public benefit, is—

3 (1) an alien who is lawfully admitted for perma4 nent residence under the Immigration and National5 ity Act,

6 (2) an alien who is granted asylum under sec7 tion 208 of such Act,

8 (3) a refugee who is admitted to the United

9 States under section 207 of such Act,

10 (4) an alien who is paroled into the United

11 States under section 212(d)(5) of such Act for a pe12 riod of at least 1 year,

13 (5) an alien whose deportation is being withheld

14 under section 243(h) of such Act, or

15 (6) an alien who is granted conditional entry

16 pursuant to section 203(a)(7) of such Act as in ef17 fect prior to April 1, 1980.

18 SEC. 432. VERIFICATION OF ELIGIBILITY FOR FEDERAL

19 PUBLIC BENEFITS.

20 (a) IN GENERAL.—Not later than 18 months after

21 the date of the enactment of this Act, the Attorney Gen22 eral of the United States, after consultation with the Sec23 retary of Health and Human Services, shall promulgate

24 regulations requiring verification that a person applying

25 for a Federal public benefit (as defined in section 401(c)),
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1 to which the limitation under section 401 applies, is a

2 qualified alien and is eligible to receive such benefit. Such

3 regulations shall, to the extent feasible, require that infor4 mation requested and exchanged be similar in form and

5 manner to information requested and exchanged under

6 section 1137 of the Social Security Act.

7 (b) STATE COMPLIANCE.—Not later than 24 months

8 after the date the regulations described in subsection (a)

9 are adopted, a State that administers a program that pro10 vides a Federal public benefit shall have in effect a ver11 ification system that complies with the regulations.

12 (c) AUTHORIZATION OF APPROPRIATIONS.—There

13 are authorized to be appropriated such sums as may be

14 necessary to carry out the purpose of this section.

15 SEC. 433. STATUTORY CONSTRUCTION.

16 (a) LIMITATION.—

17 (1) Nothing in this title may be construed as an

18 entitlement or a determination of an individual’s eli19 gibility or fulfillment of the requisite requirements

20 for any Federal, State, or local governmental pro21 gram, assistance, or benefits. For purposes of this

22 title, eligibility relates only to the general issue of

23 eligibility or ineligibility on the basis of alienage.

24 (2) Nothing in this title may be construed as

25 addressing alien eligibility for a basic public edu-
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1 cation as determined by the Supreme Court of the

2 United States under Plyler v. Doe (457 U.S. 202)

3 (1982).

4 (b) NOT APPLICABLE TO FOREIGN ASSISTANCE.—

5 This title does not apply to any Federal, State, or local

6 governmental program, assistance, or benefits provided to

7 an alien under any program of foreign assistance as deter8 mined by the Secretary of State in consultation with the

9 Attorney General.

10 (c) SEVERABILITY.—If any provision of this title or

11 the application of such provision to any person or cir12 cumstance is held to be unconstitutional, the remainder

13 of this title and the application of the provisions of such

14 to any person or circumstance shall not be affected there15 by.

16 SEC. 434. COMMUNICATION BETWEEN STATE AND LOCAL

17 GOVERNMENT AGENCIES AND THE IMMIGRA18 TION AND NATURALIZATION SERVICE.

19 Notwithstanding any other provision of Federal,

20 State, or local law, no State or local government entity

21 may be prohibited, or in any way restricted, from sending

22 to or receiving from the Immigration and Naturalization

23 Service information regarding the immigration status,

24 lawful or unlawful, of an alien in the United States.
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1 SEC. 435. QUALIFYING QUARTERS.

2 For purposes of this title, in determining the number

3 of qualifying quarters of coverage under title II of the So4 cial Security Act an alien shall be credited with—

5 (1) all of the qualifying quarters of coverage as

6 defined under title II of the Social Security Act

7 worked by a parent of such alien while the alien was

8 under age 18 if the parent did not receive any Fed9 eral means-tested public benefit (as defined in sec10 tion 403(c)) during any such quarter, and

11 (2) all of the qualifying quarters worked by a

12 spouse of such alien during their marriage if the

13 spouse did not receive any Federal means-tested

14 public benefit (as defined in section 403(c)) during

15 any such quarter and the alien remains married to

16 such spouse or such spouse is deceased.

17 Subtitle E—Conforming Amend18 ments Relating to Assisted

19 Housing

20 SEC. 441. CONFORMING AMENDMENTS RELATING TO AS21 SISTED HOUSING.

22 (a) LIMITATIONS ON ASSISTANCE.—Section 214 of

23 the Housing and Community Development Act of 1980

24 (42 U.S.C. 1436a) is amended—
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1 (1) by striking ‘‘Secretary of Housing and

2 Urban Development’’ each place it appears and in3 serting ‘‘applicable Secretary’’;

4 (2) in subsection (b), by inserting after ‘‘Na5 tional Housing Act,’’ the following: ‘‘the direct loan

6 program under section 502 of the Housing Act of

7 1949 or section 502(c)(5)(D), 504, 521(a)(2)(A), or

8 542 of such Act, subtitle A of title III of the Cran9 ston-Gonzalez National Affordable Housing Act,’’;

10 (3) in paragraphs (2) through (6) of subsection

11 (d), by striking ‘‘Secretary’’ each place it appears

12 and inserting ‘‘applicable Secretary’’;

13 (4) in subsection (d), in the matter following

14 paragraph (6), by striking ‘‘the term ‘Secretary’’’

15 and inserting ‘‘the term ‘applicable Secretary’’’; and

16 (5) by adding at the end the following new sub17 section:

18 ‘‘(h) For purposes of this section, the term ‘applicable

19 Secretary’ means—

20 ‘‘(1) the Secretary of Housing and Urban De21 velopment, with respect to financial assistance ad22 ministered by such Secretary and financial assist23 ance under subtitle A of title III of the Cranston24 Gonzalez National Affordable Housing Act; and
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1 ‘‘(2) the Secretary of Agriculture, with respect

2 to financial assistance administered by such Sec3 retary.’’.

4 (b) CONFORMING AMENDMENTS.—Section 501(h) of

5 the Housing Act of 1949 (42 U.S.C. 1471(h)) is amend6 ed—

7 (1) by striking ‘‘(1)’’;

8 (2) by striking ‘‘by the Secretary of Housing

9 and Urban Development’’; and

10 (3) by striking paragraph (2).

11 Subtitle F—Earned Income Credit

12 Denied To Unauthorized Em13 ployees

14 SEC. 451. EARNED INCOME CREDIT DENIED TO INDIVID15 UALS NOT AUTHORIZED TO BE EMPLOYED IN

16 THE UNITED STATES.

17 (a) IN GENERAL.—Section 32(c)(1) of the Internal

18 Revenue Code of 1986 (relating to individuals eligible to

19 claim the earned income credit) is amended by adding at

20 the end the following new subparagraph:

21 ‘‘(F) IDENTIFICATION NUMBER REQUIRE22 MENT.—The term ‘eligible individual’ does not

23 include any individual who does not include on

24 the return of tax for the taxable year—
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1 ‘‘(i) such individual’s taxpayer identi2 fication number, and

3 ‘‘(ii) if the individual is married (with4 in the meaning of section 7703), the tax5 payer identification number of such indi6 vidual’s spouse.’’.

7 (b) SPECIAL IDENTIFICATION NUMBER.—Section 32

8 of such Code is amended by adding at the end the follow9 ing new subsection:

10 ‘‘(l) IDENTIFICATION NUMBERS.—Solely for pur11 poses of subsections (c)(1)(F) and (c)(3)(D), a taxpayer

12 identification number means a social security number is13 sued to an individual by the Social Security Administra14 tion (other than a social security number issued pursuant

15 to clause (II) (or that portion of clause (III) that relates

16 to clause (II)) of section 205(c)(2)(B)(i) of the Social Se17 curity Act).’’.

18 (c) EXTENSION OF PROCEDURES APPLICABLE TO

19 MATHEMATICAL OR CLERICAL ERRORS.—Section

20 6213(g)(2) (relating to the definition of mathematical or

21 clerical errors) is amended by striking ‘‘and’ at the end

22 of subparagraph (D), by striking the period at the end

23 of subparagraph (E) and inserting a comma, and by in24 serting after subparagraph (E) the following new subpara25 graphs:
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1 ‘‘(F) an omission of a correct taxpayer

2 identification number required under section 32

3 (relating to the earned income tax credit) to be

4 included on a return, and

5 ‘‘(G) an entry on a return claiming the

6 credit under section 32 with respect to net

7 earnings from self-employment described in sec8 tion 32(c)(2)(A) to the extent the tax imposed

9 by section 1401 (relating to self-employment

10 tax) on such net earnings has not been paid.’’

11 (d) EFFECTIVE DATE.—The amendments made by

12 this section shall apply to taxable years beginning after

13 December 31, 1995.

14 TITLE V—REDUCTIONS IN FED15 ERAL GOVERNMENT POSI16 TIONS

17 SEC. 501. REDUCTIONS.

18 (a) DEFINITIONS.—As used in this section:

19 (1) APPROPRIATE EFFECTIVE DATE.—The term

20 ‘‘appropriate effective date’’, used with respect to a

21 Department referred to in this section, means the

22 date on which all provisions of this Act (other than

23 title II) that the Department is required to carry

24 out, and amendments and repeals made by such Act
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1 to provisions of Federal law that the Department is

2 required to carry out, are effective.

3 (2) COVERED ACTIVITY.—The term ‘‘covered

4 activity’’, used with respect to a Department re5 ferred to in this section, means an activity that the

6 Department is required to carry out under—

7 (A) a provision of this Act (other than title

8 II); or

9 (B) a provision of Federal law that is

10 amended or repealed by this Act (other than

11 title II).

12 (b) REPORTS.—

13 (1) CONTENTS.—Not later than December 31,

14 1996, each Secretary referred to in paragraph (2)

15 shall prepare and submit to the relevant committees

16 described in paragraph (3) a report containing—

17 (A) the determinations described in sub18 section (c);

19 (B) appropriate documentation in support

20 of such determinations; and

21 (C) a description of the methodology used

22 in making such determinations.

23 (2) SECRETARY.—The Secretaries referred to in

24 this paragraph are—

25 (A) the Secretary of Agriculture;
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1 (B) the Secretary of Education;

2 (C) the Secretary of Labor;

3 (D) the Secretary of Housing and Urban

4 Development; and

5 (E) the Secretary of Health and Human

6 Services.

7 (3) RELEVANT COMMITTEES.—The relevant

8 Committees described in this paragraph are the fol9 lowing:

10 (A) With respect to each Secretary de11 scribed in paragraph (2), the Committee on

12 Government Reform and Oversight of the

13 House of Representatives and the Committee

14 on Governmental Affairs of the Senate.

15 (B) With respect to the Secretary of Agri16 culture, the Committee on Agriculture and the

17 Committee on Economic and Educational Op18 portunities of the House of Representatives and

19 the Committee on Agriculture, Nutrition, and

20 Forestry of the Senate.

21 (C) With respect to the Secretary of Edu22 cation, the Committee on Economic and Edu23 cational Opportunities of the House of Rep24 resentatives and the Committee on Labor and

25 Human Resources of the Senate.
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1 (D) With respect to the Secretary of

2 Labor, the Committee on Economic and Edu3 cational Opportunities of the House of Rep4 resentatives and the Committee on Labor and

5 Human Resources of the Senate.

6 (E) With respect to the Secretary of Hous7 ing and Urban Development, the Committee on

8 Banking and Financial Services of the House of

9 Representatives and the Committee on Bank10 ing, Housing, and Urban Affairs of the Senate.

11 (F) With respect to the Secretary of

12 Health and Human Services, the Committee on

13 Economic and Educational Opportunities of the

14 House of Representatives, the Committee on

15 Labor and Human Resources of the Senate, the

16 Committee on Ways and Means of the House of

17 Representatives, and the Committee on Finance

18 of the Senate.

19 (4) REPORT ON CHANGES.—Not later than De20 cember 31, 1997, and each December 31 thereafter,

21 each Secretary referred to in paragraph (2) shall

22 prepare and submit to the relevant Committees de23 scribed in paragraph (3), a report concerning any

24 changes with respect to the determinations made
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1 under subsection (c) for the year in which the report

2 is being submitted.

3 (c) DETERMINATIONS.—Not later than December 31,

4 1996, each Secretary referred to in subsection (b)(2) shall

5 determine—

6 (1) the number of full-time equivalent positions

7 required by the Department headed by such Sec8 retary to carry out the covered activities of the De9 partment, as of the day before the date of enactment

10 of this Act;

11 (2) the number of such positions required by

12 the Department to carry out the activities, as of the

13 appropriate effective date for the Department; and

14 (3) the difference obtained by subtracting the

15 number referred to in paragraph (2) from the num16 ber referred to in paragraph (1).

17 (d) ACTIONS.—Each Secretary referred to in sub18 section (b)(2) shall take such actions as may be necessary,

19 including reduction in force actions, consistent with sec20 tions 3502 and 3595 of title 5, United States Code, to

21 reduce the number of positions of personnel of the Depart22 ment—

23 (1) not later than 30 days after the appropriate

24 effective date for the Department involved, by at
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1 least 50 percent of the difference referred to in sub2 section (c)(3); and

3 (2) not later than 13 months after such appro4 priate effective date, by at least the remainder of

5 such difference (after the application of paragraph

6 (1)).

7 (e) CONSISTENCY.—

8 (1) EDUCATION.—The Secretary of Education

9 shall carry out this section in a manner that enables

10 the Secretary to meet the requirements of this sec11 tion.

12 (2) LABOR.—The Secretary of Labor shall

13 carry out this section in a manner that enables the

14 Secretary to meet the requirements of this section.

15 (3) HEALTH AND HUMAN SERVICES.—The Sec16 retary of Health and Human Services shall carry out

17 this section in a manner that enables the Secretary

18 to meet the requirements of this section and sections

19 502 and 503.

20 (f) CALCULATION.—In determining, under subsection

21 (c), the number of full-time equivalent positions required

22 by a Department to carry out a covered activity, a Sec23 retary referred to in subsection (b)(2) shall include the

24 number of such positions occupied by personnel carrying

25 out program functions or other functions (including budg-
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1 etary, legislative, administrative, planning, evaluation, and

2 legal functions) related to the activity.

3 (g) GENERAL ACCOUNTING OFFICE REPORT.—Not

4 later than July 1, 1997, the Comptroller General of the

5 United States shall prepare and submit to the committees

6 described in subsection (b)(3), a report concerning the de7 terminations made by each Secretary under subsection (c).

8 Such report shall contain an analysis of the determina9 tions made by each Secretary under subsection (c) and

10 a determination as to whether further reductions in full11 time equivalent positions are appropriate.

12 SEC. 502. REDUCTIONS IN FEDERAL BUREAUCRACY.

13 (a) IN GENERAL.—The Secretary of Health and

14 Human Services shall reduce the Federal workforce within

15 the Department of Health and Human Services by an

16 amount equal to the sum of—

17 (1) 75 percent of the full-time equivalent posi18 tions at such Department that relate to any direct

19 spending program, or any program funded through

20 discretionary spending, that has been converted into

21 a block grant program under this Act and the

22 amendments made by this Act; and

23 (2) an amount equal to 75 percent of that por24 tion of the total full-time equivalent departmental

25 management positions at such Department that
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1 bears the same relationship to the amount appro2 priated for the programs referred to in paragraph

3 (1) as such amount relates to the total amount ap4 propriated for use by such Department.

5 (b) REDUCTIONS IN THE DEPARTMENT OF HEALTH

6 AND HUMAN SERVICES.—Notwithstanding any other pro7 vision of this Act, the Secretary of Health and Human

8 Services shall take such actions as may be necessary, in9 cluding reductions in force actions, consistent with sec10 tions 3502 and 3595 of title 5, United States Code, to

11 reduce the full-time equivalent positions within the De12 partment of Health and Human Services—

13 (1) by 245 full-time equivalent positions related

14 to the program converted into a block grant under

15 the amendment made by section 103; and

16 (2) by 60 full-time equivalent managerial posi17 tions in the Department.

18 SEC. 503. REDUCING PERSONNEL IN WASHINGTON, D.C.

19 AREA.

20 In making reductions in full-time equivalent posi21 tions, the Secretary of Health and Human Services is en22 couraged to reduce personnel in the Washington, D.C.,

23 area office (agency headquarters) before reducing field

24 personnel.
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1 TITLE VI—REFORM OF PUBLIC

2 HOUSING

3 SEC. 601. FAILURE TO COMPLY WITH OTHER WELFARE AND

4 PUBLIC ASSISTANCE PROGRAMS.

5 Title I of the United States Housing Act of 1937 (42

6 U.S.C. 1437 et seq.), as amended by section 404(d) of

7 this Act, is amended by adding at the end the following

8 new section:

9 ‘‘SEC. 28. FAILURE TO COMPLY WITH OTHER WELFARE AND

10 PUBLIC ASSISTANCE PROGRAMS.

11 ‘‘(a) IN GENERAL.—If the benefits of a family are

12 reduced under a Federal, State, or local law relating to

13 welfare or a public assistance program for the failure of

14 any member of the family to perform an action required

15 under the law or program, the family may not, for the

16 duration of the reduction, receive any increased assistance

17 under this Act as the result of a decrease in the income

18 of the family to the extent that the decrease in income

19 is the result of the benefits reduction.

20 ‘‘(b) EXCEPTION.—Subsection (a) shall not apply in

21 any case in which the benefits of a family are reduced be22 cause the welfare or public assistance program to which

23 the Federal, State, or local law relates limits the period

24 during which benefits may be provided under the pro25 gram.’’.
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1 SEC. 602. FRAUD UNDER MEANS-TESTED WELFARE AND

2 PUBLIC ASSISTANCE PROGRAMS.

3 (a) IN GENERAL.—If an individual’s benefits under

4 a Federal, State, or local law relating to a means-tested

5 welfare or a public assistance program are reduced be6 cause of an act of fraud by the individual under the law

7 or program, the individual may not, for the duration of

8 the reduction, receive an increased benefit under any other

9 means-tested welfare or public assistance program for

10 which Federal funds are appropriated as a result of a de11 crease in the income of the individual (determined under

12 the applicable program) attributable to such reduction.

13 (b) WELFARE OR PUBLIC ASSISTANCE PROGRAMS

14 FOR WHICH FEDERAL FUNDS ARE APPROPRIATED.—For

15 purposes of subsection (a), the term ‘‘means-tested welfare

16 or public assistance program for which Federal funds are

17 appropriated’’ includes the food stamp program under the

18 Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), any

19 program of public or assisted housing under title I of the

20 United States Housing Act of 1937 (42 U.S.C. 1437 et

21 seq.), and State programs funded under part A of title

22 IV of the Social Security Act (42 U.S.C. 601 et seq.).

23 SEC. 603. EFFECTIVE DATE.

24 This title and the amendment made by this title shall

25 become effective on the date of enactment of this Act.
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1 TITLE VII—CHILD PROTECTION

2 BLOCK GRANT PROGRAMS

3 AND FOSTER CARE, ADOP4 TION ASSISTANCE, AND INDE5 PENDENT LIVING PROGRAMS

6 Subtitle A—Child Protection Block

7 Grant Program and Foster Care,

8 Adoption Assistance, and Inde9 pendent Living Programs

10 CHAPTER 1—BLOCK GRANTS TO STATES

11 FOR THE PROTECTION OF CHILDREN

12 SEC. 701. ESTABLISHMENT OF PROGRAM.

13 Title IV of the Social Security Act (42 U.S.C. 601

14 et seq.) is amended by striking part B and inserting the

15 following:

16 ‘‘PART B—BLOCK GRANTS TO STATES FOR THE

17 PROTECTION OF CHILDREN

18 ‘‘SEC. 421. PURPOSE.

19 ‘‘The purpose of this part is to enable eligible States

20 to carry out a child protection program to—

21 ‘‘(1) identify and assist families at risk of abus22 ing or neglecting their children;

23 ‘‘(2) operate a system for receiving reports of

24 abuse or neglect of children;
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1 ‘‘(3) improve the intake, assessment, screening,

2 and investigation of reports of abuse and neglect;

3 ‘‘(4) enhance the general child protective sys4 tem by improving risk and safety assessment tools

5 and protocols;

6 ‘‘(5) improve legal preparation and representa7 tion, including procedures for appealing and re8 sponding to appeals of substantiated reports of

9 abuse and neglect;

10 ‘‘(6) provide support, treatment, and family

11 preservation services to families which are, or are at

12 risk of, abusing or neglecting their children;

13 ‘‘(7) support children who must be removed

14 from or who cannot live with their families;

15 ‘‘(8) make timely decisions about permanent liv16 ing arrangements for children who must be removed

17 from or who cannot live with their families;

18 ‘‘(9) provide for continuing evaluation and im19 provement of child protection laws, regulations, and

20 services;

21 ‘‘(10) develop and facilitate training protocols

22 for individuals mandated to report child abuse or ne23 glect; and

24 ‘‘(11) develop and enhance the capacity of com25 munity-based programs to integrate shared leader-
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1 ship strategies between parents and professionals to

2 prevent and treat child abuse and neglect at the

3 neighborhood level.

4 ‘‘SEC. 422. ELIGIBLE STATES.

5 ‘‘(a) IN GENERAL.—As used in this part, the term

6 ‘eligible State’ means a State that has submitted to the

7 Secretary, not later than October 1, 1996, and every 3

8 years thereafter, a plan which has been signed by the chief

9 executive officer of the State and that includes the follow10 ing:

11 ‘‘(1) OUTLINE OF CHILD PROTECTION PRO12 GRAM.—A written document that outlines the activi13 ties the State intends to conduct to achieve the pur14 pose of this part, including the procedures to be

15 used for—

16 ‘‘(A) receiving and assessing reports of

17 child abuse or neglect;

18 ‘‘(B) investigating such reports;

19 ‘‘(C) with respect to families in which

20 abuse or neglect has been confirmed, providing

21 services or referral for services for families and

22 children where the State makes a determination

23 that the child may safely remain with the fam24 ily;
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1 ‘‘(D) protecting children by removing them

2 from dangerous settings and ensuring their

3 placement in a safe environment;

4 ‘‘(E) providing training for individuals

5 mandated to report suspected cases of child

6 abuse or neglect;

7 ‘‘(F) protecting children in foster care;

8 ‘‘(G) promoting timely adoptions;

9 ‘‘(H) protecting the rights of families,

10 using adult relatives as the preferred placement

11 for children separated from their parents where

12 such relatives meet the relevant State child pro13 tection standards; and

14 ‘‘(I) providing services to individuals, fami15 lies, or communities, either directly or through

16 referral, that are aimed at preventing the occur17 rence of child abuse and neglect.

18 ‘‘(2) CERTIFICATION OF STATE LAW REQUIRING

19 THE REPORTING OF CHILD ABUSE AND NEGLECT.—

20 A certification that the State has in effect laws that

21 require public officials and other professionals to re22 port, in good faith, actual or suspected instances of

23 child abuse or neglect.

24 ‘‘(3) CERTIFICATION OF PROCEDURES FOR

25 SCREENING, SAFETY ASSESSMENT, AND PROMPT IN-
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1 VESTIGATION.—A certification that the State has in

2 effect procedures for receiving and responding to re3 ports of child abuse or neglect, including the reports

4 described in paragraph (2), and for the immediate

5 screening, safety assessment, and prompt investiga6 tion of such reports.

7 ‘‘(4) CERTIFICATION OF STATE PROCEDURES

8 FOR REMOVAL AND PLACEMENT OF ABUSED OR NE9 GLECTED CHILDREN.—A certification that the State

10 has in effect procedures for the removal from fami11 lies and placement of abused or neglected children

12 and of any other child in the same household who

13 may also be in danger of abuse or neglect.

14 ‘‘(5) CERTIFICATION OF PROVISIONS FOR IMMU15 NITY FROM PROSECUTION.—A certification that the

16 State has in effect laws requiring immunity from

17 prosecution under State and local laws and regula18 tions for individuals making good faith reports of

19 suspected or known instances of child abuse or ne20 glect.

21 ‘‘(6) CERTIFICATION OF PROVISIONS AND PRO22 CEDURES RELATING TO APPEALS.—A certification

23 that not later than 2 years after the date of the en24 actment of this part, the State shall have laws and

25 procedures in effect affording individuals an oppor-
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1 tunity to appeal an official finding of abuse or ne2 glect.

3 ‘‘(7) CERTIFICATION OF STATE PROCEDURES

4 FOR DEVELOPING AND REVIEWING WRITTEN PLANS

5 FOR PERMANENT PLACEMENT OF REMOVED CHIL6 DREN.—A certification that the State has in effect

7 procedures for ensuring that a written plan is pre8 pared for children who have been removed from their

9 families. Such plan shall specify the goals for achiev10 ing a permanent placement for the child in a timely

11 fashion, for ensuring that the written plan is re12 viewed every 6 months (until such placement is

13 achieved), and for ensuring that information about

14 such children is collected regularly and recorded in

15 case records, and include a description of such pro16 cedures.

17 ‘‘(8) CERTIFICATION OF STATE PROGRAM TO

18 PROVIDE INDEPENDENT LIVING SERVICES.—A cer19 tification that the State has in effect a program to

20 provide independent living services, for assistance in

21 making the transition to self-sufficient adulthood, to

22 individuals in the child protection program of the

23 State who are 16, but who are not 20 (or, at the op24 tion of the State, 22), years of age, and who do not

25 have a family to which to be returned.
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1 ‘‘(9) CERTIFICATION OF STATE PROCEDURES

2 TO RESPOND TO REPORTING OF MEDICAL NEGLECT

3 OF DISABLED INFANTS.—

4 ‘‘(A) IN GENERAL.—A certification that

5 the State has in place for the purpose of re6 sponding to the reporting of medical neglect of

7 infants (including instances of withholding of

8 medically indicated treatment from disabled in9 fants with life-threatening conditions), proce10 dures or programs, or both (within the State

11 child protective services system), to provide

12 for—

13 ‘‘(i) coordination and consultation

14 with individuals designated by and within

15 appropriate health-care facilities;

16 ‘‘(ii) prompt notification by individ17 uals designated by and within appropriate

18 health-care facilities of cases of suspected

19 medical neglect (including instances of

20 withholding of medically indicated treat21 ment from disabled infants with life-threat22 ening conditions); and

23 ‘‘(iii) authority, under State law, for

24 the State child protective service to pursue

25 any legal remedies, including the authority
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1 to initiate legal proceedings in a court of

2 competent jurisdiction, as may be nec3 essary to prevent the withholding of medi4 cally indicated treatment from disabled in5 fants with life-threatening conditions.

6 ‘‘(B) WITHHOLDING OF MEDICALLY INDI7 CATED TREATMENT.—As used in subparagraph

8 (A), the term ‘withholding of medically indi9 cated treatment’ means the failure to respond

10 to the infant’s life-threatening conditions by

11 providing treatment (including appropriate nu12 trition, hydration, and medication) which, in the

13 treating physician’s or physicians’ reasonable

14 medical judgment, will be most likely to be ef15 fective in ameliorating or correcting all such

16 conditions, except that such term does not in17 clude the failure to provide treatment (other

18 than appropriate nutrition, hydration, or medi19 cation) to an infant when, in the treating physi20 cian’s or physicians’ reasonable medical judg21 ment—

22 ‘‘(i) the infant is chronically and irre23 versibly comatose;

24 ‘‘(ii) the provision of such treatment

25 would—
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1 ‘‘(I) merely prolong dying;

2 ‘‘(II) not be effective in amelio3 rating or correcting all of the infant’s

4 life-threatening conditions; or

5 ‘‘(III) otherwise be futile in

6 terms of the survival of the infant; or

7 ‘‘(iii) the provision of such treatment

8 would be virtually futile in terms of the

9 survival of the infant and the treatment it10 self under such circumstances would be in11 humane.

12 ‘‘(10) IDENTIFICATION OF CHILD PROTECTION

13 GOALS.—The quantitative goals of the State child

14 protection program.

15 ‘‘(11) CERTIFICATION OF CHILD PROTECTION

16 STANDARDS.—With respect to fiscal years beginning

17 on or after April 1, 1996, a certification that the

18 State—

19 ‘‘(A) has completed an inventory of all

20 children who, before the inventory, had been in

21 foster care under the responsibility of the State

22 for 6 months or more, which determined—

23 ‘‘(i) the appropriateness of, and neces24 sity for, the foster care placement;
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1 ‘‘(ii) whether the child could or should

2 be returned to the parents of the child or

3 should be freed for adoption or other per4 manent placement; and

5 ‘‘(iii) the services necessary to facili6 tate the return of the child or the place7 ment of the child for adoption or legal

8 guardianship;

9 ‘‘(B) is operating, to the satisfaction of the

10 Secretary—

11 ‘‘(i) a statewide information system

12 from which can be readily determined the

13 status, demographic characteristics, loca14 tion, and goals for the placement of every

15 child who is (or, within the immediately

16 preceding 12 months, has been) in foster

17 care;

18 ‘‘(ii) a case review system for each

19 child receiving foster care under the super20 vision of the State;

21 ‘‘(iii) a service program designed to

22 help children—

23 ‘‘(I) where appropriate, return to

24 families from which they have been

25 removed; or
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1 ‘‘(II) be placed for adoption, with

2 a legal guardian, or if adoption or

3 legal guardianship is determined not

4 to be appropriate for a child, in some

5 other planned, permanent living ar6 rangement; and

7 ‘‘(iv) a preplacement preventive serv8 ices program designed to help children at

9 risk for foster care placement remain with

10 their families; and

11 ‘‘(C)(i) has reviewed (or not later than Oc12 tober 1, 1997, will review) State policies and

13 administrative and judicial procedures in effect

14 for children abandoned at or shortly after birth

15 (including policies and procedures providing for

16 legal representation of such children); and

17 ‘‘(ii) is implementing (or not later than Oc18 tober 1, 1997, will implement) such policies and

19 procedures as the State determines, on the

20 basis of the review described in clause (i), to be

21 necessary to enable permanent decisions to be

22 made expeditiously with respect to the place23 ment of such children.

24 ‘‘(12) CERTIFICATION OF REASONABLE EF25 FORTS BEFORE PLACEMENT OF CHILDREN IN FOS-
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1 TER CARE.—A certification that the State in each

2 case will—

3 ‘‘(A) make reasonable efforts prior to the

4 placement of a child in foster care, to prevent

5 or eliminate the need for removal of the child

6 from the child’s home, and to make it possible

7 for the child to return home; and

8 ‘‘(B) with respect to families in which

9 abuse or neglect has been confirmed, provide

10 services or referral for services for families and

11 children where the State makes a determination

12 that the child may safely remain with the fam13 ily.

14 ‘‘(13) CERTIFICATION OF COOPERATIVE EF15 FORTS.—A certification by the State, where appro16 priate, that all steps will be taken, including cooper17 ative efforts with the State agencies administering

18 the plans approved under parts A and D, to secure

19 an assignment to the State of any rights to support

20 on behalf of each child receiving foster care mainte21 nance payments under part E.

22 ‘‘(14) CERTIFICATION OF CONFIDENTIALITY

23 AND REQUIREMENTS FOR INFORMATION DISCLO24 SURE.—
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1 ‘‘(A) IN GENERAL.—A certification that

2 the State has in effect and operational—

3 ‘‘(i) requirements ensuring that re4 ports and records made and maintained

5 pursuant to the purposes of this part shall

6 only be made available to—

7 ‘‘(I) individuals who are the sub8 ject of the report;

9 ‘‘(II) Federal, State, or local gov10 ernment entities, or any agent of such

11 entities, having a need for such infor12 mation in order to carry out their re13 sponsibilities under law to protect

14 children from abuse and neglect;

15 ‘‘(III) child abuse citizen review

16 panels;

17 ‘‘(IV) child fatality review panels;

18 ‘‘(V) a grand jury or court, upon

19 a finding that information in the

20 record is necessary for the determina21 tion of an issue before the court or

22 grand jury; and

23 ‘‘(VI) other entities or classes of

24 individuals statutorily authorized by

25 the State to receive such information
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1 pursuant to a legitimate State pur2 pose; and

3 ‘‘(ii) provisions that allow for public

4 disclosure of the findings or information

5 about cases of child abuse or neglect that

6 have resulted in a child fatality or near fa7 tality.

8 ‘‘(B) LIMITATION.—Disclosures made pur9 suant to clause (i) or (ii) shall not include the

10 identifying information concerning the individ11 ual initiating a report or complaint alleging sus12 pected instances of child abuse or neglect.

13 ‘‘(C) DEFINITION.—For purposes of this

14 paragraph, the term ‘near fatality’ means an

15 act that, as certified by a physician, places the

16 child in serious or critical condition.

17 ‘‘(b) DETERMINATIONS.—The Secretary shall deter18 mine whether a plan submitted pursuant to subsection (a)

19 contains the material required by subsection (a), other

20 than the material described in paragraph (9) of such sub21 section. The Secretary may not require a State to include

22 in such a plan any material not described in subsection

23 (a).

24 ‘‘SEC. 423. GRANTS TO STATES FOR CHILD PROTECTION.

25 ‘‘(a) FUNDING OF BLOCK GRANTS.—
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1 ‘‘(1) ENTITLEMENT COMPONENT.—Each eligi2 ble State shall be entitled to receive from the Sec3 retary for each fiscal year specified in subsection

4 (b)(1) a grant in an amount equal to the State share

5 of the child protection amount for the fiscal year.

6 ‘‘(2) AUTHORIZATION COMPONENT.—

7 ‘‘(A) IN GENERAL.—For each eligible

8 State for each fiscal year specified in subsection

9 (b)(1), the Secretary shall supplement the grant

10 under paragraph (1) of this subsection by an

11 amount equal to the State share of the amount

12 (if any) appropriated pursuant to subparagraph

13 (B) of this paragraph for the fiscal year.

14 ‘‘(B) LIMITATION ON AUTHORIZATION OF

15 APPROPRIATIONS.—For grants under subpara16 graph (A), there are authorized to be appro17 priated to the Secretary an amount not to ex18 ceed $325,000,000 for each fiscal year specified

19 in subsection (b)(1).

20 ‘‘(b) DEFINITIONS.—As used in this section:

21 ‘‘(1) CHILD PROTECTION AMOUNT.—The term

22 ‘child protection amount’ means—

23 ‘‘(A) $240,000,000 for fiscal year 1997;

24 ‘‘(B) $255,000,000 for fiscal year 1998;

25 ‘‘(C) $262,000,000 for fiscal year 1999;
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1 ‘‘(D) $270,000,000 for fiscal year 2000;

2 ‘‘(E) $278,000,000 for fiscal year 2001;

3 and

4 ‘‘(F) $286,000,000 for fiscal year 2002;

5 ‘‘(2) STATE SHARE.—

6 ‘‘(A) IN GENERAL.—The term ‘State

7 share’ means the qualified child protection ex8 penses of the State divided by the sum of the

9 qualified child protection expenses of all of the

10 States.

11 ‘‘(B) QUALIFIED CHILD PROTECTION EX12 PENSES.—The term ‘qualified child protection

13 expenses’ means, with respect to a State the

14 greater of—

15 ‘‘(i) the total amount of one-third of

16 the Federal grant amounts to the State

17 under the provisions of law specified in

18 clauses (i) and (ii) of subparagraph (C) for

19 fiscal years 1992, 1993, and 1994; or

20 ‘‘(ii) the total amount of the Federal

21 grant amounts to the State under the pro22 visions of law specified in clauses (i) and

23 (ii) of subparagraph (C) for fiscal year

24 1994.
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1 ‘‘(C) PROVISIONS OF LAW.—The provisions

2 of law specified in this subparagraph are the

3 following (as in effect with respect to each of

4 the fiscal years referred to in subparagraph

5 (B)):

6 ‘‘(i) Section 423 of this Act.

7 ‘‘(ii) Section 434 of this Act.

8 ‘‘(D) DETERMINATION OF INFORMA9 TION.—In determining amounts for fiscal years

10 1992, 1993, and 1994 under clauses (i) and (ii)

11 of subparagraph (B), the Secretary shall use in12 formation listed as actual amounts in the Jus13 tification for Estimates for Appropriation Com14 mittees of the Administration for Children and

15 Families for fiscal years 1994, 1995, and 1996,

16 respectively.

17 ‘‘(c) USE OF GRANT.—

18 ‘‘(1) IN GENERAL.—A State to which a grant

19 is made under this section may use the grant in any

20 manner that the State deems appropriate to accom21 plish the purpose of this part.

22 ‘‘(2) TIMING OF EXPENDITURES.—A State to

23 which a grant is made under this section for a fiscal

24 year shall expend the total amount of the grant not
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1 later than the end of the immediately succeeding fis2 cal year.

3 ‘‘(3) RULE OF INTERPRETATION.—This part

4 shall not be interpreted to prohibit short- and long5 term foster care facilities operated for profit from

6 receiving funds provided under this part or part E.

7 ‘‘(d) TIMING OF PAYMENTS.—The Secretary shall

8 pay each eligible State the amount of the grant payable

9 to the State under this section in quarterly installments.

10 ‘‘(e) PENALTIES.—

11 ‘‘(1) FOR USE OF GRANT IN VIOLATION OF

12 THIS PART.—If an audit conducted pursuant to

13 chapter 75 of title 31, United States Code, finds

14 that an amount paid to a State under this section

15 for a fiscal year has been used in violation of this

16 part, then the Secretary shall reduce the amount of

17 the grant that would (in the absence of this para18 graph) be payable to the State under this section for

19 the immediately succeeding fiscal year by the

20 amount so used, plus 5 percent of the grant paid

21 under this section to the State for such fiscal year.

22 ‘‘(2) FOR FAILURE TO MAINTAIN EFFORT.—

23 ‘‘(A) IN GENERAL.—If an audit conducted

24 pursuant to chapter 75 of title 31, United

25 States Code, finds that the amount expended by
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1 a State (other than from amounts provided by

2 the Federal Government) during the fiscal years

3 specified in subparagraph (B), to carry out the

4 State program funded under this part is less

5 than the applicable percentage specified in such

6 subparagraph of the total amount expended by

7 the State (other than from amounts provided by

8 the Federal Government) during fiscal year

9 1994 under parts B and E of this title (as in

10 effect on the day before the date of the enact11 ment of this part), then the Secretary shall re12 duce the amount of the grant that would (in

13 the absence of this paragraph) be payable to

14 the State under this section for the immediately

15 succeeding fiscal year by the amount of the dif16 ference, plus 5 percent of the grant paid under

17 this section to the State for such fiscal year.

18 ‘‘(B) SPECIFICATION OF FISCAL YEARS

19 AND APPLICABLE PERCENTAGES.—The fiscal

20 years and applicable percentages specified in

21 this subparagraph are as follows:

22 ‘‘(i) For fiscal years 1997 and 1998,

23 100 percent.

24 ‘‘(ii) For fiscal years 1999 through

25 2002, 75 percent.
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1 ‘‘(3) FOR FAILURE TO SUBMIT REQUIRED RE2 PORT.—

3 ‘‘(A) IN GENERAL.—The Secretary shall

4 reduce by 3 percent the amount of the grant

5 that would (in the absence of this paragraph)

6 be payable to a State under this section for a

7 fiscal year if the Secretary determines that the

8 State has not submitted the report required by

9 section 424 for the immediately preceding fiscal

10 year, within 6 months after the end of the im11 mediately preceding fiscal year.

12 ‘‘(B) RESCISSION OF PENALTY.—The Sec13 retary shall rescind a penalty imposed on a

14 State under subparagraph (A) with respect to a

15 report for a fiscal year if the State submits the

16 report before the end of the immediately suc17 ceeding fiscal year.

18 ‘‘(4) STATE FUNDS TO REPLACE REDUCTIONS

19 IN GRANT.—A State which has a penalty imposed

20 against it under this subsection for a fiscal year

21 shall expend additional State funds in an amount

22 equal to the amount of the penalty for the purpose

23 of carrying out the State program under this part

24 during the immediately succeeding fiscal year.
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1 ‘‘(5) REASONABLE CAUSE EXCEPTION.—Except

2 in the case of the penalty described in paragraph

3 (2), the Secretary may not impose a penalty on a

4 State under this subsection with respect to a re5 quirement if the Secretary determines that the State

6 has reasonable cause for failing to comply with the

7 requirement.

8 ‘‘(6) CORRECTIVE COMPLIANCE PLAN.—

9 ‘‘(A) IN GENERAL.—

10 ‘‘(i) NOTIFICATION OF VIOLATION.—

11 Before imposing a penalty against a State

12 under this subsection with respect to a vio13 lation of this part, the Secretary shall no14 tify the State of the violation and allow the

15 State the opportunity to enter into a cor16 rective compliance plan in accordance with

17 this paragraph which outlines how the

18 State will correct the violation and how the

19 State will insure continuing compliance

20 with this part.

21 ‘‘(ii) 60-DAY PERIOD TO PROPOSE A

22 CORRECTIVE COMPLIANCE PLAN.—During

23 the 60-day period that begins on the date

24 the State receives a notice provided under

25 clause (i) with respect to a violation, the
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1 State may submit to the Federal Govern2 ment a corrective compliance plan to cor3 rect the violation.

4 ‘‘(iii) CONSULTATION ABOUT MODI5 FICATIONS.—During the 60-day period

6 that begins with the date the Secretary re7 ceives a corrective compliance plan submit8 ted by a State in accordance with clause

9 (ii), the Secretary may consult with the

10 State on modifications to the plan.

11 ‘‘(iv) ACCEPTANCE OF PLAN.—A cor12 rective compliance plan submitted by a

13 State in accordance with clause (ii) is

14 deemed to be accepted by the Secretary if

15 the Secretary does not accept or reject the

16 plan during the 60-day period that begins

17 on the date the plan is submitted.

18 ‘‘(B) EFFECT OF CORRECTING VIOLA19 TION.—The Secretary may not impose any pen20 alty under this subsection with respect to any

21 violation covered by a State corrective compli22 ance plan accepted by the Secretary if the State

23 corrects the violation pursuant to the plan.

24 ‘‘(C) EFFECT OF FAILING TO CORRECT

25 VIOLATION.—The Secretary shall assess some
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1 or all of a penalty imposed on a State under

2 this subsection with respect to a violation if the

3 State does not, in a timely manner, correct the

4 violation pursuant to a State corrective compli5 ance plan accepted by the Secretary.

6 ‘‘(7) LIMITATION ON AMOUNT OF PENALTY.—

7 ‘‘(A) IN GENERAL.—In imposing the pen8 alties described in this subsection, the Secretary

9 shall not reduce any quarterly payment to a

10 State by more than 25 percent.

11 ‘‘(B) CARRYFORWARD OF UNRECOVERED

12 PENALTIES.—To the extent that subparagraph

13 (A) prevents the Secretary from recovering dur14 ing a fiscal year the full amount of all penalties

15 imposed on a State under this subsection for a

16 prior fiscal year, the Secretary shall apply any

17 remaining amount of such penalties to the

18 grant payable to the State under section 423(a)

19 for the immediately succeeding fiscal year.

20 ‘‘(f) TREATMENT OF TERRITORIES.—

21 ‘‘(1) IN GENERAL.—A territory, as defined in

22 section 1108(b)(1), shall carry out a child protection

23 program in accordance with the provisions of this

24 part.
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1 ‘‘(2) PAYMENTS.—Subject to the mandatory

2 ceiling amounts specified in section 1108, each terri3 tory, as so defined, shall be entitled to receive from

4 the Secretary for any fiscal year an amount equal to

5 the total obligations to the territory under section

6 434 (as in effect on the day before the date of the

7 enactment of this part) for fiscal year 1995.

8 ‘‘(g) LIMITATION ON FEDERAL AUTHORITY.—Except

9 as expressly provided in this Act, the Secretary may not

10 regulate the conduct of States under this part or enforce

11 any provision of this part.

12 ‘‘SEC. 424. DATA COLLECTION AND REPORTING.

13 ‘‘(a) NATIONAL CHILD ABUSE AND NEGLECT DATA

14 SYSTEM.—The Secretary shall establish a national data

15 collection and analysis program—

16 ‘‘(1) which, to the extent practicable, coordi17 nates existing State child abuse and neglect reports

18 and which shall include—

19 ‘‘(A) standardized data on substantiated,

20 as well as false, unfounded, or unsubstantiated

21 reports; and

22 ‘‘(B) information on the number of deaths

23 due to child abuse and neglect; and

24 ‘‘(2) which shall collect, compile, analyze, and

25 make available State child abuse and neglect report-
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1 ing information which, to the extent practical, is uni2 versal and case-specific and integrated with other

3 case-based foster care and adoption data collected by

4 the Secretary.

5 ‘‘(b) ADOPTION AND FOSTER CARE AND ANALYSIS

6 AND REPORTING SYSTEMS.—The Secretary shall imple7 ment a system for the collection of data relating to adop8 tion and foster care in the United States. Such data collec9 tion system shall—

10 ‘‘(1) avoid unnecessary diversion of resources

11 from agencies responsible for adoption and foster

12 care;

13 ‘‘(2) assure that any data that is collected is re14 liable and consistent over time and among jurisdic15 tions through the use of uniform definitions and

16 methodologies;

17 ‘‘(3) provide comprehensive national informa18 tion with respect to—

19 ‘‘(A) the demographic characteristics of

20 adoptive and foster children and their biological

21 and adoptive or foster parents;

22 ‘‘(B) the status of the foster care popu23 lation (including the number of children in fos24 ter care, length of placement, type of place-
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1 ment, availability for adoption, and goals for

2 ending or continuing foster care);

3 ‘‘(C) the number and characteristics of—

4 ‘‘(i) children placed in or removed

5 from foster care;

6 ‘‘(ii) children adopted or with respect

7 to whom adoptions have been terminated;

8 and

9 ‘‘(iii) children placed in foster care

10 outside the State which has placement and

11 care responsibility; and

12 ‘‘(D) the extent and nature of assistance

13 provided by Federal, State, and local adoption

14 and foster care programs and the characteris15 tics of the children with respect to whom such

16 assistance is provided; and

17 ‘‘(4) utilize appropriate requirements and incen18 tives to ensure that the system functions reliably

19 throughout the United States.

20 ‘‘(c) ADDITIONAL INFORMATION.—The Secretary

21 may require the provision of additional information under

22 the data collection system established under subsection (b)

23 if the addition of such information is agreed to by a major24 ity of the States.
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1 ‘‘(d) ANNUAL REPORT BY THE SECRETARY.—Not

2 later than 6 months after the end of each fiscal year, the

3 Secretary shall prepare a report based on information pro4 vided by the States for the fiscal year pursuant to this

5 section, and shall make the report and such information

6 available to the Congress and the public.

7 ‘‘SEC. 425. FUNDING FOR STUDIES OF CHILD WELFARE.

8 ‘‘(a) NATIONAL RANDOM SAMPLE STUDY OF CHILD

9 WELFARE.—There are authorized to be appropriated and

10 there are appropriated to the Secretary for each of fiscal

11 years 1996 through 2002—

12 ‘‘(1) $6,000,000 to conduct a national study

13 based on random samples of children who are at risk

14 of child abuse or neglect, or are determined by

15 States to have been abused or neglected under sec16 tion 208 of the Child and Family Services Block

17 Grant Act of 1996; and

18 ‘‘(2) $10,000,000 for such other research as

19 may be necessary under such section.

20 ‘‘(b) ASSESSMENT OF STATE COURTS IMPROVEMENT

21 OF HANDLING OF PROCEEDINGS RELATING TO FOSTER

22 CARE AND ADOPTION.—There are authorized to be appro23 priated and there are appropriated to the Secretary for

24 each of fiscal years 1996 through 1998 $10,000,000 for

25 the purpose of carrying out section 13712 of the Omnibus
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1 Budget Reconciliation Act of 1993 (42 U.S.C. 670 note).

2 All funds appropriated under this subsection shall be ex3 pended not later than September 30, 1999.

4 ‘‘SEC. 426. DEFINITIONS.

5 ‘‘For purposes of this part and part E, the following

6 definitions shall apply:

7 ‘‘(1) ADMINISTRATIVE REVIEW.—The term ‘ad8 ministrative review’ means a review open to the par9 ticipation of the parents of the child, conducted by

10 a panel of appropriate persons at least one of whom

11 is not responsible for the case management of, or

12 the delivery of services to, either the child or the

13 parents who are the subject of the review.

14 ‘‘(2) ADOPTION ASSISTANCE AGREEMENT.—The

15 term ‘adoption assistance agreement’ means a writ16 ten agreement, binding on the parties to the agree17 ment, between the State, other relevant agencies,

18 and the prospective adoptive parents of a minor

19 child which at a minimum—

20 ‘‘(A) specifies the nature and amount of

21 any payments, services, and assistance to be

22 provided under such agreement; and

23 ‘‘(B) stipulates that the agreement shall

24 remain in effect regardless of the State of
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1 which the adoptive parents are residents at any

2 given time.

3 The agreement shall contain provisions for the pro4 tection (under an interstate compact approved by

5 the Secretary or otherwise) of the interests of the

6 child in cases where the adoptive parents and child

7 move to another State while the agreement is effec8 tive.

9 ‘‘(3) CASE PLAN.—The term ‘case plan’ means

10 a written document which includes at least the fol11 lowing:

12 ‘‘(A) A description of the type of home or

13 institution in which a child is to be placed, in14 cluding a discussion of the appropriateness of

15 the placement and how the agency which is re16 sponsible for the child plans to carry out the

17 voluntary placement agreement entered into or

18 judicial determination made with respect to the

19 child in accordance with section 472(a)(1).

20 ‘‘(B) A plan for assuring that the child re21 ceives proper care and that services are pro22 vided to the parents, child, and foster parents

23 in order to improve the conditions in the par24 ents’ home, facilitate return of the child to his

25 or her own home or the permanent placement
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1 of the child, and address the needs of the child

2 while in foster care, including a discussion of

3 the appropriateness of the services that have

4 been provided to the child under the plan.

5 ‘‘(C) To the extent available and acces6 sible, the health and education records of the

7 child, including—

8 ‘‘(i) the names and addresses of the

9 child’s health and educational providers;

10 ‘‘(ii) the child’s grade level perform11 ance;

12 ‘‘(iii) the child’s school record;

13 ‘‘(iv) assurances that the child’s place14 ment in foster care takes into account

15 proximity to the school in which the child

16 is enrolled at the time of placement;

17 ‘‘(v) a record of the child’s immuniza18 tions;

19 ‘‘(vi) the child’s known medical prob20 lems;

21 ‘‘(vii) the child’s medications; and

22 ‘‘(viii) any other relevant health and

23 education information concerning the child

24 determined to be appropriate by the State.
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1 Where appropriate, for a child age 16 or over,

2 the case plan must also include a written de3 scription of the programs and services which

4 will help such child prepare for the transition

5 from foster care to independent living.

6 ‘‘(4) CASE REVIEW SYSTEM.—The term ‘case

7 review system’ means a procedure for assuring

8 that—

9 ‘‘(A) each child has a case plan designed to

10 achieve placement in the least restrictive (most

11 family-like) and most appropriate setting avail12 able and in close proximity to the parents’

13 home, consistent with the best interests and

14 special needs of the child, which—

15 ‘‘(i) if the child has been placed in a

16 foster family home or child-care institution

17 a substantial distance from the home of

18 the parents of the child, or in a State dif19 ferent from the State in which such home

20 is located, sets forth the reasons why such

21 placement is in the best interests of the

22 child; and

23 ‘‘(ii) if the child has been placed in

24 foster care outside the State in which the

25 home of the parents of the child is located,
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1 requires that, periodically, but not less fre2 quently than every 12 months, a case3 worker on the staff of the State in which

4 the home of the parents of the child is lo5 cated, or of the State in which the child

6 has been placed, visit such child in such

7 home or institution and submit a report on

8 such visit to the State in which the home

9 of the parents of the child is located;

10 ‘‘(B) the status of each child is reviewed

11 periodically but no less frequently than once

12 every 6 months by either a court or by adminis13 trative review (as defined in paragraph (1)) in

14 order to determine the continuing necessity for

15 and appropriateness of the placement, the ex16 tent of compliance with the case plan, and the

17 extent of progress which has been made toward

18 alleviating or mitigating the causes necessitat19 ing placement in foster care, and to project a

20 likely date by which the child may be returned

21 to the home or placed for adoption or legal

22 guardianship;

23 ‘‘(C) with respect to each such child, pro24 cedural safeguards will be applied, among other

25 things, to assure each child in foster care under
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1 the supervision of the State of a dispositional

2 hearing to be held, in a family or juvenile court

3 or another court (including a tribal court) of

4 competent jurisdiction, or by an administrative

5 body appointed or approved by the court, no

6 later than 18 months after the original place7 ment (and not less frequently than every 12

8 months thereafter during the continuation of

9 foster care), which hearing shall determine the

10 future status of the child (including whether the

11 child should be returned to the parent, should

12 be continued in foster care for a specified pe13 riod, should be placed for adoption, or should

14 (because of the child’s special needs or cir15 cumstances) be continued in foster care on a

16 permanent or long-term basis) and, in the case

17 of a child described in subparagraph (A)(ii),

18 whether the out-of-State placement continues to

19 be appropriate and in the best interests of the

20 child, and, in the case of a child who has at21 tained age 16, the services needed to assist the

22 child to make the transition from foster care to

23 independent living; and procedural safeguards

24 shall also be applied with respect to parental

25 rights pertaining to the removal of the child
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1 from the home of his parents, to a change in

2 the child’s placement, and to any determination

3 affecting visitation privileges of parents; and

4 ‘‘(D) a child’s health and education record

5 (as described in paragraph (3)(C)) is reviewed

6 and updated, and supplied to the foster parent

7 or foster care provider with whom the child is

8 placed, at the time of each placement of the

9 child in foster care.

10 ‘‘(5) CHILD-CARE INSTITUTION.—The term

11 ‘child-care institution’ means a private child-care in12 stitution, or a public child-care institution which ac13 commodates no more than 25 children, which is li14 censed by the State in which it is situated or has

15 been approved, by the agency of such State respon16 sible for licensing or approval of institutions of this

17 type, as meeting the standards established for such

18 licensing, but the term shall not include detention

19 facilities, forestry camps, training schools, or any

20 other facility operated primarily for the detention of

21 children who are determined to be delinquent.

22 ‘‘(6) FOSTER CARE MAINTENANCE PAY23 MENTS.—

24 ‘‘(A) IN GENERAL.—The term ‘foster care

25 maintenance payments’ means payments to
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1 cover the cost of (and the cost of providing)

2 food, clothing, shelter, daily supervision, school

3 supplies, a child’s personal incidentals, liability

4 insurance with respect to a child, and reason5 able travel to the child’s home for visitation. In

6 the case of institutional care, such term shall

7 include the reasonable costs of administration

8 and operation of such institution as are nec9 essarily required to provide the items described

10 in the preceding sentence.

11 ‘‘(B) SPECIAL RULE.—In cases where—

12 ‘‘(i) a child placed in a foster family

13 home or child-care institution is the parent

14 of a son or daughter who is in the same

15 home or institution; and

16 ‘‘(ii) payments described in subpara17 graph (A) are being made under this part

18 with respect to such child,

19 the foster care maintenance payments made

20 with respect to such child as otherwise deter21 mined under subparagraph (A) shall also in22 clude such amounts as may be necessary to

23 cover the cost of the items described in that

24 subparagraph with respect to such son or

25 daughter.
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1 ‘‘(7) FOSTER FAMILY HOME.—The term ‘foster

2 family home’ means a foster family home for chil3 dren which is licensed by the State in which it is sit4 uated or has been approved, by the agency of such

5 State having responsibility for licensing homes of

6 this type, as meeting the standards established for

7 such licensing.

8 ‘‘(8) PARENTS.—The term ‘parents’ means bio9 logical or adoptive parents or legal guardians, as de10 termined by applicable State law.

11 ‘‘(9) STATE.—The term ‘State’ means the 50

12 States and the District of Columbia.

13 ‘‘(10) VOLUNTARY PLACEMENT.—The term

14 ‘voluntary placement’ means an out-of-home place15 ment of a minor, by or with participation of the

16 State, after the parents or guardians of the minor

17 have requested the assistance of the State and

18 signed a voluntary placement agreement.

19 ‘‘(11) VOLUNTARY PLACEMENT AGREEMENT.—

20 The term ‘voluntary placement agreement’ means a

21 written agreement, binding on the parties to the

22 agreement, between the State, any other agency act23 ing on its behalf, and the parents or guardians of a

24 minor child which specifies, at a minimum, the legal

25 status of the child and the rights and obligations of
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1 the parents or guardians, the child, and the agency

2 while the child is in placement.’’.

3 SEC. 702. CONFORMING AMENDMENTS.

4 (a) AMENDMENTS TO PART D OF TITLE IV OF THE

5 SOCIAL SECURITY ACT.—

6 (1) Section 452(a)(10)(C) of the Social Security

7 Act (42 U.S.C. 652(a)(10)(C)), as amended by sec8 tion 108(b)(2) of this Act, is amended by striking

9 ‘‘or under section 471(a)(17)’’.

10 (2) Section 452(g)(2)(A) of such Act (42

11 U.S.C. 652(g)(2)(A)), as amended by paragraphs

12 (6) and (7) of section 108(b), is amended by insert13 ing ‘‘or benefits or services for foster care mainte14 nance were being provided under the State program

15 funded under part E’’ after ‘‘part A’’ each place it

16 appears.

17 (3) Section 466(a)(3)(B) of such Act (42

18 U.S.C. 666(a)(3)(B)), as amended by section

19 108(b)(14), is amended by striking ‘‘or 471(a)(17)’’.

20 (b) AMENDMENT TO SECTION 9442 OF THE OMNI21 BUS BUDGET RECONCILIATION ACT OF 1986.—Section

22 9442(4) of the Omnibus Budget Reconciliation Act of

23 1986 (42 U.S.C. 679a(4)) is amended by inserting ‘‘(as

24 in effect before October 1, 1995)’’ after ‘‘Act’’.
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1 (c) REDESIGNATION AND AMENDMENTS OF SECTION

2 1123.—

3 (1) REDESIGNATION.—The Social Security Act

4 is amended by redesignating section 1123, the sec5 ond place it appears (42 U.S.C. 1320a–1a), as sec6 tion 1123A.

7 (2) AMENDMENTS.—Section 1123A of such

8 Act, as so redesignated, is amended in subsection

9 (a)—

10 (A) by striking ‘‘The Secretary’’ and in11 serting ‘‘Notwithstanding section 423(g), the

12 Secretary’’; and

13 (B) in paragraph (2), by inserting ‘‘under

14 this section’’ after ‘‘promulgated’’.

15 CHAPTER 2—FOSTER CARE, ADOPTION

16 ASSISTANCE, AND INDEPENDENT LIV17 ING PROGRAMS

18 SEC. 711. CONFORMING AMENDMENTS TO PART E OF TITLE

19 IV.

20 (a) PURPOSE; APPROPRIATION.—Section 470 of the

21 Social Security Act (42 U.S.C 670) is amended—

22 (1) by amending the heading to read as follows:

23 ‘‘SEC. 470. PURPOSE; APPROPRIATION.’’; and

24 (2) in the second sentence, by striking ‘‘this

25 part’’ and inserting ‘‘section 422’’.
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1 (b) STATE PLAN FOR FOSTER CARE AND ADOPTION

2 ASSISTANCE.—Section 471 of such Act (42 U.S.C. 671)

3 is amended to read as follows:

4 ‘‘SEC. 471. ELIGIBLE STATES.

5 ‘‘In order for a State to be eligible for payments

6 under this part, the State shall have submitted to the Sec7 retary a plan which satisfies the requirements of section

8 422.’’.

9 (c) FOSTER CARE MAINTENANCE PAYMENTS PRO10 GRAM.—Section 472 of such Act (42 U.S.C. 672) is

11 amended to read as follows:

12 ‘‘SEC. 472. REQUIREMENTS FOR FOSTER CARE MAINTE13 NANCE PAYMENTS.

14 ‘‘(a) IN GENERAL.—Each State operating a program

15 under this part shall make foster care maintenance pay16 ments, as defined in section 426(6) with respect to a child

17 who would meet the requirements of section 406(a) (as

18 in effect on the day before the date of the enactment of

19 the Personal Responsibility and Work Opportunity Act of

20 1996) or of section 407 (as so in effect) but for the re21 moval of the child from the home of a relative (specified

22 in section 406(a) (as so in effect)), if—

23 ‘‘(1) the removal from the home occurred pur24 suant to a voluntary placement agreement entered

25 into by the child’s parent or legal guardian, or was
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1 the result of a judicial determination to the effect

2 that continuation therein would be contrary to the

3 welfare of such child and that reasonable efforts of

4 the type described in section 422(a)(12) have been

5 made;

6 ‘‘(2) such child’s placement and care are the re7 sponsibility of—

8 ‘‘(A) the State; or

9 ‘‘(B) any other public agency with which

10 the State has made an agreement for the ad11 ministration of the State program under this

12 part which is still in effect;

13 ‘‘(3) such child has been placed in a foster fam14 ily home or child-care institution as a result of the

15 voluntary placement agreement or judicial deter16 mination referred to in paragraph (1); and

17 ‘‘(4) such child—

18 ‘‘(A) would have been eligible to receive aid

19 under the eligibility standards under the State

20 plan approved under section 402 (as in effect

21 on the day before the date of the enactment of

22 this part and adjusted for inflation, in accord23 ance with regulations issued by the Secretary)

24 in or for the month in which such agreement

25 was entered into or court proceedings leading to
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1 the removal of such child from the home were

2 initiated; or

3 ‘‘(B) would have received such aid in or for

4 such month if application had been made there5 for, or the child had been living with a relative

6 specified in section 406(a) (as so in effect)

7 within 6 months prior to the month in which

8 such agreement was entered into or such pro9 ceedings were initiated, and would have received

10 such aid in or for such month if in such month

11 such child had been living with such a relative

12 and application therefor had been made.

13 ‘‘(b) LIMITATION ON FOSTER CARE PAYMENTS.—

14 Foster care maintenance payments may be made under

15 this part only on behalf of a child described in subsection

16 (a) of this section who is—

17 ‘‘(1) in the foster family home of an individual,

18 whether the payments therefore are made to such in19 dividual or to a public or private child placement or

20 child-care agency; or

21 ‘‘(2) in a child-care institution, whether the

22 payments therefore are made to such institution or

23 to a public or private child-placement or child-care

24 agency, which payments shall be limited so as to in25 clude in such payments only those items which are
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1 included in the term ‘foster care maintenance pay2 ments’ (as defined in section 426(6)).

3 ‘‘(c) VOLUNTARY PLACEMENTS.—

4 ‘‘(1) SATISFACTION OF CHILD PROTECTION

5 STANDARDS.—Notwithstanding any other provision

6 of this section, Federal payments may be made

7 under this part with respect to amounts expended by

8 any State as foster care maintenance payments

9 under this part, in the case of children removed

10 from their homes pursuant to voluntary placement

11 agreements as described in subsection (a), only if (at

12 the time such amounts were expended) the State has

13 fulfilled all of the requirements of section

14 422(a)(11).

15 ‘‘(2) REMOVAL IN EXCESS OF 180 DAYS.—No

16 Federal payment may be made under this part with

17 respect to amounts expended by any State as foster

18 care maintenance payments, in the case of any child

19 who was removed from such child’s home pursuant

20 to a voluntary placement agreement as described in

21 subsection (a) and has remained in voluntary place22 ment for a period in excess of 180 days, unless there

23 has been a judicial determination by a court of com24 petent jurisdiction (within the first 180 days of such
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1 placement) that such placement is in the best inter2 ests of the child.

3 ‘‘(3) DEEMED REVOCATION OF AGREEMENTS.—

4 In any case where—

5 ‘‘(A) the placement of a minor child in fos6 ter care occurred pursuant to a voluntary place7 ment agreement entered into by the parents or

8 guardians of such child as provided in sub9 section (a); and

10 ‘‘(B) such parents or guardians request (in

11 such manner and form as the Secretary may

12 prescribe) that the child be returned to their

13 home or to the home of a relative,

14 the voluntary placement agreement shall be deemed

15 to be revoked unless the State opposes such request

16 and obtains a judicial determination, by a court of

17 competent jurisdiction, that the return of the child

18 to such home would be contrary to the child’s best

19 interests.’’.

20 (d) ADOPTION ASSISTANCE PROGRAM.—Section 473

21 of such Act (42 U.S.C. 673) is amended to read as follows:

22 ‘‘SEC. 473. REQUIREMENTS FOR ADOPTION ASSISTANCE

23 PAYMENTS.

24 ‘‘(a) IN GENERAL.—A State operating a program

25 under this part shall enter into adoption assistance agree-
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1 ments with the adoptive parents of children with special

2 needs.

3 ‘‘(b) PAYMENTS UNDER AGREEMENTS.—

4 ‘‘(1) IN GENERAL.—Under any adoption assist5 ance agreement entered into by a State with parents

6 who adopt a child with special needs, the State—

7 ‘‘(A) shall make payments of nonrecurring

8 adoption expenses incurred by or on behalf of

9 such parents in connection with the adoption of

10 such child, directly through the State agency or

11 through another public or nonprofit private

12 agency, in amounts determined under sub13 section (d), and

14 ‘‘(B) in any case where the child meets the

15 requirements of subsection (c), may make adop16 tion assistance payments to such parents, di17 rectly through the State agency or through an18 other public or nonprofit private agency, in

19 amounts so determined.

20 ‘‘(2) DEFINITION OF NONRECURRING ADOPTION

21 EXPENSES.—

22 ‘‘(A) IN GENERAL.—For purposes of para23 graph (1)(A), the term ‘nonrecurring adoption

24 expenses’ means reasonable and necessary

25 adoption fees, court costs, attorney fees, and
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1 other expenses which are directly related to the

2 legal adoption of a child with special needs and

3 which are not incurred in violation of State or

4 Federal law.

5 ‘‘(B) TREATMENT AS AN ADMINISTRATIVE

6 EXPENSE.—A State’s payment of nonrecurring

7 adoption expenses under an adoption assistance

8 agreement shall be treated as an expenditure

9 made for the proper and efficient administra10 tion of the State plan for purposes of section

11 474(a)(3)(E).

12 ‘‘(c) CHILDREN WITH SPECIAL NEEDS.—For pur13 poses of subsection (b)(1)(B), a child meets the require14 ments of this subsection if such child—

15 ‘‘(1)(A) at the time adoption proceedings were

16 initiated, met the requirements of section 406(a) (as

17 in effect on the day before the date of the enactment

18 of the Personal Responsibility and Work Oppor19 tunity Act of 1996) or section 407 (as so in effect)

20 or would have met such requirements except for

21 such child’s removal from the home of a relative

22 (specified in section 406(a) (as so in effect)), either

23 pursuant to a voluntary placement agreement with

24 respect to which Federal payments are provided

25 under section 474 (or 403 (as so in effect)) or as
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1 a result of a judicial determination to the effect that

2 continuation therein would be contrary to the wel3 fare of such child;

4 ‘‘(B) meets all of the requirements of title XVI

5 with respect to eligibility for supplemental security

6 income benefits; or

7 ‘‘(C) is a child whose costs in a foster family

8 home or child-care institution are covered by the fos9 ter care maintenance payments being made with re10 spect to his or her minor parent;

11 ‘‘(2)(A) would have received aid under the eligi12 bility standards under the State plan approved

13 under section 402 (as in effect on the day before the

14 date of the enactment of this part, adjusted for in15 flation, in accordance with regulations issued by the

16 Secretary) in or for the month in which such agree17 ment was entered into or court proceedings leading

18 to the removal of such child from the home were ini19 tiated;

20 ‘‘(B) would have received such aid in or for

21 such month if application had been made therefor,

22 or had been living with a relative specified in section

23 406(a) (as so in effect) within 6 months prior to the

24 month in which such agreement was entered into or

25 such proceedings were initiated, and would have re-
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1 ceived such aid in or for such month if in such

2 month such child had been living with such a rel3 ative and application therefor had been made; or

4 ‘‘(C) is a child described in subparagraph (A)

5 or (B); and

6 ‘‘(3) has been determined by the State, pursu7 ant to subsection (g) of this section, to be a child

8 with special needs.

9 ‘‘(d) DETERMINATION OF PAYMENTS.—The amount

10 of the payments to be made in any case under subsection

11 (b) shall be determined through agreement between the

12 adoptive parents and the State or a public or nonprofit

13 private agency administering the program under this part,

14 which shall take into consideration the circumstances of

15 the adopting parents and the needs of the child being

16 adopted, and may be readjusted periodically, with the con17 currence of the adopting parents (which may be specified

18 in the adoption assistance agreement), depending upon

19 changes in such circumstances. However, in no case may

20 the amount of the adoption assistance payment exceed the

21 foster care maintenance payment which would have been

22 paid during the period if the child with respect to whom

23 the adoption assistance payment is made had been in a

24 foster family home.
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1 ‘‘(e) PAYMENT EXCEPTION.—Notwithstanding sub2 section (d), no payment may be made to parents with re3 spect to any child who has attained the age of 18 (or,

4 where the State determines that the child has a mental

5 or physical disability which warrants the continuation of

6 assistance, the age of 21), and no payment may be made

7 to parents with respect to any child if the State determines

8 that the parents are no longer legally responsible for the

9 support of the child or if the State determines that the

10 child is no longer receiving any support from such parents.

11 Parents who have been receiving adoption assistance pay12 ments under this part shall keep the State or public or

13 nonprofit private agency administering the program under

14 this part informed of circumstances which would, pursu15 ant to this section, make them ineligible for such assist16 ance payments, or eligible for assistance payments in a

17 different amount.

18 ‘‘(f) PREADOPTION PAYMENTS.—For purposes of

19 this part, individuals with whom a child who has been de20 termined by the State, pursuant to subsection (g), to be

21 a child with special needs is placed for adoption in accord22 ance with applicable State and local law shall be eligible

23 for adoption assistance payments during the period of the

24 placement, on the same terms and subject to the same

25 conditions as if such individuals had adopted such child.
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1 ‘‘(g) DETERMINATION OF CHILD WITH SPECIAL

2 NEEDS.—For purposes of this section, a child shall not

3 be considered a child with special needs unless—

4 ‘‘(1) the State has determined that the child

5 cannot or should not be returned to the home of the

6 child’s parents; and

7 ‘‘(2) the State had first determined—

8 ‘‘(A) that there exists with respect to the

9 child a specific factor or condition such as the

10 child’s ethnic background, age, or membership

11 in a minority or sibling group, or the presence

12 of factors such as medical conditions or phys13 ical, mental, or emotional handicaps because of

14 which it is reasonable to conclude that such

15 child cannot be placed with adoptive parents

16 without providing adoption assistance under

17 this part or medical assistance under title XV

18 or XIX; and

19 ‘‘(B) that, except where it would be

20 against the best interests of the child because

21 of such factors as the existence of significant

22 emotional ties with prospective adoptive parents

23 while in the care of such parents as a foster

24 child, a reasonable, but unsuccessful, effort has

25 been made to place the child with appropriate
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1 adoptive parents without providing adoption as2 sistance under this section or medical assistance

3 under title XV or XIX.’’.

4 (e) PAYMENTS TO STATES; ALLOTMENTS TO

5 STATES.—Section 474 of such Act (42 U.S.C. 674) is

6 amended to read as follows:

7 ‘‘SEC. 474. PAYMENTS TO STATES; ALLOTMENTS TO STATES.

8 ‘‘(a) FOSTER CARE, ADOPTION ASSISTANCE, AND

9 INDEPENDENT LIVING PROGRAMS PAYMENTS.—Each eli10 gible State, as determined under section 471, shall be enti11 tled to receive from the Secretary for each quarter of each

12 fiscal year a payment equal to the sum of—

13 ‘‘(1) an amount equal to the Federal medical

14 assistance percentage (as defined in section 1905(b)

15 of this Act as in effect on the day before the date

16 of the enactment of the Personal Responsibility and

17 Work Opportunity Act of 1996) of the total amount

18 expended during such quarter as foster care mainte19 nance payments under the child protection program

20 under this part for children in foster family homes

21 or child-care institutions; plus

22 ‘‘(2) an amount equal to the Federal medical

23 assistance percentage (as defined in section 1905(b)

24 of this Act (as so in effect)) of the total amount ex25 pended during such quarter as adoption assistance
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1 payments under the child protection program under

2 this part pursuant to adoption assistance agree3 ments; plus

4 ‘‘(3) an amount equal to the sum of the follow5 ing proportions of the total amounts expended dur6 ing such quarter as found necessary by the Sec7 retary for the provision of child placement services

8 and for the proper and efficient administration of

9 the State foster care and adoption assistance pro10 gram—

11 ‘‘(A) 75 percent of so much of such ex12 penditures as are for the training (including

13 both short and long-term training at edu14 cational institutions through grants to such in15 stitutions or by direct financial assistance to

16 students enrolled in such institutions) of per17 sonnel employed or preparing for employment

18 by the State agency or by the local agency ad19 ministering the plan in the political subdivision;

20 ‘‘(B) 75 percent of so much of such ex21 penditures (including travel and per diem ex22 penses) as are for the short-term training of

23 current or prospective foster or adoptive par24 ents and the members of the staff of State-li25 censed or State-approved child care institutions
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1 providing care to foster and adopted children

2 receiving assistance under this part, in ways

3 that increase the ability of such current or pro4 spective parents, staff members, and institu5 tions to provide support and assistance to foster

6 and adopted children, whether incurred directly

7 by the State or by contract;

8 ‘‘(C) 50 percent of so much of such ex9 penditures as are for the planning, design, de10 velopment, or installation of statewide mecha11 nized data collection and information retrieval

12 systems (including 50 percent of the full

13 amount of expenditures for hardware compo14 nents for such systems) but only to the extent

15 that such systems—

16 ‘‘(i) meet the requirements imposed

17 by regulations;

18 ‘‘(ii) to the extent practicable, are ca19 pable of interfacing with the State data

20 collection system that collects information

21 relating to child abuse and neglect;

22 ‘‘(iii) to the extent practicable, have

23 the capability of interfacing with, and re24 trieving information from, the State data

25 collection system that collects information
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1 relating to the eligibility of individuals

2 under part A (for the purposes of facilitat3 ing verification of eligibility of foster chil4 dren); and

5 ‘‘(iv) are determined by the Secretary

6 to be likely to provide more efficient, eco7 nomical, and effective administration of

8 the programs carried out under a State

9 plan approved under this part;

10 ‘‘(D) 50 percent of so much of such ex11 penditures as are for the operation of the state12 wide mechanized data collection and informa13 tion retrieval systems referred to in subpara14 graph (C); and

15 ‘‘(E) one-half of the remainder of such ex16 penditures; plus

17 ‘‘(4) an amount equal to the sum of—

18 ‘‘(A) so much of the amounts expended by

19 such State to carry out a program under sec20 tion 476, as do not exceed the basic amount for

21 such State determined under subsection (e)(1)

22 of such section; and

23 ‘‘(B) the lesser of—
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1 ‘‘(i) one-half of any additional

2 amounts expended by such State for such

3 programs; or

4 ‘‘(ii) the maximum additional amount

5 for such State under subsection (e)(1) of

6 such section.

7 ‘‘(b) AUTOMATED DATA COLLECTION EXPENDI8 TURES.—The Secretary shall treat as necessary for the

9 proper and efficient administration of the State plan all

10 expenditures of a State necessary in order for the State

11 to plan, design, develop, install, and operate data collec12 tion and information retrieval systems, without regard to

13 whether the systems may be used with respect to foster

14 or adoptive children other than those on behalf of whom

15 foster care maintenance payments or adoption assistance

16 payments may be made under this part.

17 ‘‘(c) ESTIMATES BY THE SECRETARY.—

18 ‘‘(1) IN GENERAL.—The Secretary shall, prior

19 to the beginning of each quarter, estimate the

20 amount which a State will be entitled to receive

21 under subsection (a) for such quarter, such esti22 mates to be based on—

23 ‘‘(A) a report filed by the State containing

24 its estimate of the total sum to be expended in

25 such quarter in accordance with subsection (a),
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1 and stating the amount appropriated or made

2 available by the State and its political subdivi3 sions for such expenditures in such quarter, and

4 if such amount is less than the State’s propor5 tionate share of the total sum of such estimated

6 expenditures, the source or sources from which

7 the difference is expected to be derived;

8 ‘‘(B) records showing the number of chil9 dren in the State receiving assistance under

10 this part; and

11 ‘‘(C) such other information as the Sec12 retary may find necessary.

13 ‘‘(2) PAYMENTS.—The Secretary shall pay to

14 the States the amounts so estimated under para15 graph (1), reduced or increased to the extent of any

16 overpayment or underpayment which the Secretary

17 determines was made under this subsection to such

18 State for any prior quarter and with respect to

19 which adjustment has not already been made under

20 this subsection.

21 ‘‘(3) PRO RATA SHARE.— The pro rata share to

22 which the United States is equitably entitled, as de23 termined by the Secretary, of the net amount recov24 ered during any quarter by the State or any political

25 subdivision thereof with respect to foster care and
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1 adoption assistance furnished under this part shall

2 be considered an overpayment to be adjusted under

3 this subsection.

4 ‘‘(d) ALLOWANCE OR DISALLOWANCE OF CLAIM.—

5 ‘‘(1) IN GENERAL.—Within 60 days after re6 ceipt of a State claim for expenditures pursuant to

7 subsection (b)(1), the Secretary shall allow, disallow,

8 or defer such claim.

9 ‘‘(2) NOTICE.—Within 15 days after a decision

10 to defer a State claim, the Secretary shall notify the

11 State of the reasons for the deferral and of the addi12 tional information necessary to determine the allow13 ability of the claim.

14 ‘‘(3) DECISION.—Within 90 days after receiving

15 such necessary information (in readily reviewable

16 form), the Secretary shall—

17 ‘‘(A) disallow the claim, if able to complete

18 the review and determine that the claim is not

19 allowable; or

20 ‘‘(B) in any other case, allow the claim,

21 subject to disallowance (as necessary)—

22 ‘‘(i) upon completion of the review, if

23 it is determined that the claim is not allow24 able; or
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1 ‘‘(ii) on the basis of findings of an

2 audit or financial management review.’’.

3 (f) DEFINITIONS.—Section 475 of such Act (42

4 U.S.C. 675) is amended to read as follows:

5 ‘‘SEC. 475. DEFINITIONS.

6 For definitions of terms used in this part, see section

7 426.’’.

8 (g) TECHNICAL ASSISTANCE; DATA COLLECTION

9 AND EVALUATION.—Part E of title IV of such Act is

10 amended by striking section 476.

11 (h) INDEPENDENT LIVING INITIATIVES.—Part E of

12 title IV of such Act (42 U.S.C. 670 et seq.), as amended

13 by subsection (g), is amended—

14 (1) by redesignating section 477 as section 476;

15 and

16 (2) by amending section 476, as so redesig17 nated, to read as follows:

18 ‘‘SEC. 476. REQUIREMENTS FOR INDEPENDENT LIVING

19 PROGRAMS.

20 ‘‘(a) PAYMENTS FOR INDEPENDENT LIVING PRO21 GRAMS.—

22 ‘‘(1) IN GENERAL.—Payments shall be made in

23 accordance with this section for the purpose of as24 sisting States and localities in establishing and car25 rying out programs designed to assist children de-
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1 scribed in paragraph (2) who have attained age 16

2 in making the transition from foster care to inde3 pendent living. Any State which provides for the es4 tablishment and carrying out of one or more such

5 programs in accordance with this section for a fiscal

6 year shall be entitled to receive payments under this

7 section for such fiscal year, in an amount deter8 mined under subsection (e).

9 ‘‘(2) PROGRAM REQUIREMENTS.—A program

10 established and carried out under paragraph (1)—

11 ‘‘(A) shall be designed to assist children

12 with respect to whom foster care maintenance

13 payments are being made by the State under

14 this part;

15 ‘‘(B) may at the option of the State also

16 include any or all other children in foster care

17 under the responsibility of the State; and

18 ‘‘(C) may at the option of the State also

19 include any child who has not attained age 21

20 to whom foster care maintenance payments

21 were previously made by a State under this part

22 and whose payments were discontinued on or

23 after the date such child attained age 16, and

24 any child who previously was in foster care de25 scribed in subparagraph (B) and for whom such
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1 care was discontinued on or after the date such

2 child attained age 16; and a written transitional

3 independent living plan of the type described in

4 subsection (d)(6) shall be developed for such

5 child as a part of such program.

6 ‘‘(b) USE OF FUNDS.—Payment under this section

7 shall be made to the State, and shall be used for the pur8 pose of conducting and providing in accordance with this

9 section (directly or under contracts with local govern10 mental entities or private nonprofit organizations) the ac11 tivities and services required to carry out the program or

12 programs involved.

13 ‘‘(c) SUBMISSION OF PROGRAM DESCRIPTION AND

14 ASSURANCES.—In order for a State to receive payments

15 under this section for any fiscal year, the State, prior to

16 February 1 of such fiscal year, must submit to the Sec17 retary, in such manner and form as the Secretary may

18 prescribe, a description of the program together with satis19 factory assurances that the program will be operated in

20 an effective and efficient manner and will otherwise meet

21 the requirements of this section.

22 ‘‘(d) PROGRAM OBJECTIVES.—In carrying out the

23 purpose described in subsection (a), it shall be the objec24 tive of each program established under this section to help

25 the individuals participating in such program to prepare
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1 to live independently upon leaving foster care. Such pro2 grams may include (subject to the availability of funds)

3 programs to—

4 ‘‘(1) enable participants to seek a high school

5 diploma or its equivalent or to take part in appro6 priate vocational training;

7 ‘‘(2) provide training in daily living skills, budg8 eting, locating and maintaining housing, and career

9 planning;

10 ‘‘(3) provide for individual and group counsel11 ing;

12 ‘‘(4) integrate and coordinate services otherwise

13 available to participants;

14 ‘‘(5) provide for the establishment of outreach

15 programs designed to attract individuals who are eli16 gible to participate in the program;

17 ‘‘(6) provide each participant a written transi18 tional independent living plan which shall be based

19 on an assessment of his needs, and which shall be

20 incorporated into his case plan, as defined in section

21 426(3); and

22 ‘‘(7) provide participants with other services

23 and assistance designed to improve their transition

24 to independent living.

25 ‘‘(e) DETERMINATION OF PAYMENTS.—
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1 ‘‘(1) BASIC AMOUNT.—

2 ‘‘(A) IN GENERAL.—The basic amount to

3 which a State shall be entitled under section

4 474(a)(4) for a fiscal year shall be an amount

5 which bears the same ratio to the basic ceiling

6 for such fiscal year as such State’s average

7 number of children receiving foster care mainte8 nance payments under part E in fiscal year

9 1984 bore to the total of the average number

10 of children receiving such payments under such

11 part for all States for fiscal year 1984.

12 ‘‘(B) MAXIMUM ADDITIONAL AMOUNT.—

13 The maximum additional amount to which a

14 State shall be entitled under section 474(a)(4)

15 for a fiscal year shall be an amount which bears

16 the same ratio to the additional ceiling for such

17 fiscal year as the basic amount of such State

18 bears to $45,000,000.

19 ‘‘(C) DEFINITIONS.—For purposes of this

20 section:

21 ‘‘(i) BASIC CEILING.—The term ‘basic

22 ceiling’ means, for any fiscal year,

23 $45,000,000.
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1 ‘‘(ii) ADDITIONAL CEILING.—The

2 term ‘additional ceiling’ means, for any fis3 cal year, $25,000,000.

4 ‘‘(2) REALLOCATION OF FUNDS.—If any State

5 does not apply for funds under this section for any

6 fiscal year within the time provided in subsection

7 (c), the funds to which such State would have been

8 entitled for such fiscal year shall be reallocated to

9 one or more other States on the basis of their rel10 ative need for additional payments under this section

11 (as determined by the Secretary).

12 ‘‘(3) SUPPLEMENT TO OTHER FUNDS.—Any

13 amounts payable to States under this section shall

14 be in addition to amounts payable to States under

15 paragraphs (1), (2), and (3) of section 474(a), and

16 shall supplement and not replace any other funds

17 which may be available for the same general pur18 poses in the localities involved.

19 ‘‘(f) LIMITATION ON USE OF FUNDS.—Payments

20 made to a State under this section for any fiscal year—

21 ‘‘(1) shall be used only for the specific purposes

22 described in this section;

23 ‘‘(2) may not be used for the provision of room

24 or board;
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1 ‘‘(3) may be made on an estimated basis in ad2 vance of the determination of the exact amount, with

3 appropriate subsequent adjustments to take account

4 of any error in the estimates; and

5 ‘‘(4) shall be expended by such State in such

6 fiscal year or in the succeeding fiscal year.

7 ‘‘(g) REPORTING REQUIREMENTS.—Not later than

8 the first January 1 following the end of each fiscal year,

9 each State shall submit to the Secretary a report on the

10 programs carried out during such fiscal year with the

11 amounts received under this section. Such report shall be

12 in such form and contain such information as may be nec13 essary to provide an accurate description of such activities,

14 to provide a complete record of the purposes for which

15 the funds were spent, and to indicate the extent to which

16 the expenditure of such funds succeeded in accomplishing

17 the purpose described in subsection (a).

18 ‘‘(h) ASSISTANCE NOT CONSIDERED INCOME OR RE19 SOURCES.—Notwithstanding any other provision of this

20 title, payments made and services provided to participants

21 in a program under this section, as a direct consequence

22 of their participation in such program, shall not be consid23 ered as income or resources for purposes of determining

24 eligibility (or the eligibility of any other persons) for as25 sistance under the State’s plan approved under this part
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1 or part A, or for purposes of determining the level of such

2 assistance.’’.

3 (i) COLLECTION OF DATA RELATING TO ADOPTION

4 AND FOSTER CARE.—Part E of title IV of such Act (42

5 U.S.C. 670 et seq.) is amended—

6 (1) by redesignating section 479 as section 477;

7 and

8 (2) by amending section 477, as so redesig9 nated, to read as follows:

10 ‘‘SEC. 477. COLLECTION OF DATA RELATING TO ADOPTION

11 AND FOSTER CARE.

12 ‘‘For requirements with respect to the collection of

13 data relating to adoption and foster care, see section

14 424.’’.

15 CHAPTER 3—MISCELLANEOUS

16 SEC. 731. SECRETARIAL SUBMISSION OF LEGISLATIVE PRO17 POSAL FOR TECHNICAL AND CONFORMING

18 AMENDMENTS.

19 Not later than 90 days after the date of the enact20 ment of this subtitle, the Secretary of Health and Human

21 Services, in consultation, as appropriate, with the heads

22 of other Federal agencies, shall submit to the appropriate

23 committees of Congress a legislative proposal providing for

24 such technical and conforming amendments in the law as

25 are required by the provisions of this subtitle.
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1 SEC. 732. SENSE OF THE CONGRESS REGARDING TIMELY

2 ADOPTION OF CHILDREN.

3 It is the sense of the Congress that—

4 (1) too many children who wish to be adopted

5 are spending inordinate amounts of time in foster

6 care;

7 (2) there is an urgent need for States to in8 crease the number of waiting children being adopted

9 in a timely and lawful manner;

10 (3) studies have shown that States spend an ex11 cess of $15,000 each year on each special needs

12 child in foster care, and would save significant

13 amounts of money if they offered incentives to fami14 lies to adopt special needs children;

15 (4) States should allocate sufficient funds under

16 this title for adoption assistance and medical assist17 ance to encourage more families to adopt children

18 who otherwise would languish in the foster care sys19 tem for a period that many experts consider det20 rimental to their development;

21 (5) States should offer incentives for families

22 that adopt special needs children to make adoption

23 more affordable for middle-class families;

24 (6) when it is necessary for a State to remove

25 a child from the home of the child’s biological par26 ents, the State should strive—
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1 (A) to provide the child with a single foster

2 care placement and a single coordinated case

3 team; and

4 (B) to conclude an adoption of the child,

5 when adoption is the goal of the child and the

6 State, within one year of the child’s placement

7 in foster care; and

8 (7) States should participate in local, regional,

9 or national programs to enable maximum visibility of

10 waiting children to potential parents. Such programs

11 should include a nationwide, interactive computer

12 network to disseminate information on children eligi13 ble for adoption to help match them with families

14 around the country.

15 SEC. 733. EFFECTIVE DATE; TRANSITION RULES.

16 (a) EFFECTIVE DATE.—

17 (1) IN GENERAL.—Except as provided in para18 graph (2), this subtitle and the amendments made

19 by this subtitle shall be effective on and after Octo20 ber 1, 1996.

21 (2) EXCEPTION.—Section 425 of part B of title

22 IV of the Social Security Act, as added by section

23 701, section 702(a), and section 704 shall take ef24 fect on the date of the enactment of this subtitle.
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1 (3) TEMPORARY REDESIGNATION OF SECTION

2 425.—During the period beginning on the date of the

3 enactment of this subtitle and ending on October 1,

4 1996, section 425 of part B of title IV of the Social

5 Security Act, as added by section 701, shall be re6 designated as section 425A.

7 (b) TRANSITION RULES.—

8 (1) CLAIMS, ACTIONS, AND PROCEEDINGS.—

9 The amendments made by this subtitle shall not

10 apply with respect to—

11 (A) powers, duties, functions, rights,

12 claims, penalties, or obligations applicable to

13 aid, assistance, or services provided before the

14 effective date of this subtitle under the provi15 sions amended; and

16 (B) administrative actions and proceedings

17 commenced before such date, or authorized be18 fore such date to be commenced, under such

19 provisions.

20 (2) CLOSING OUT ACCOUNT FOR THOSE PRO21 GRAMS TERMINATED OR SUBSTANTIALLY MODIFIED

22 BY THIS SUBTITLE.—In closing out accounts, Fed23 eral and State officials may use scientifically accept24 able statistical sampling techniques. Claims made

25 under programs which are repealed or substantially
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1 amended in this subtitle and which involve State ex2 penditures in cases where assistance or services were

3 provided during a prior fiscal year, shall be treated

4 as expenditures during fiscal year 1995 for purposes

5 of reimbursement even if payment was made by a

6 State on or after October 1, 1995. States shall com7 plete the filing of all claims no later than September

8 30, 1997. Federal department heads shall—

9 (A) use the single audit procedure to re10 view and resolve any claims in connection with

11 the closeout of programs; and

12 (B) reimburse States for any payments

13 made for assistance or services provided during

14 a prior fiscal year from funds for fiscal year

15 1995, rather than the funds authorized by this

16 subtitle.

17 Subtitle B—Child and Family

18 Services Block Grant

19 SEC. 751. CHILD AND FAMILY SERVICES BLOCK GRANT.

20 The Child Abuse Prevention and Treatment Act (42

21 U.S.C. 5101 et seq.) is amended to read as follows:

22 ‘‘SECTION 1. SHORT TITLE.

23 ‘‘This Act may be cited as the ‘Child and Family

24 Services Block Grant Act of 1996’.
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1 ‘‘SEC. 2. FINDINGS.

2 ‘‘The Congress finds the following:

3 ‘‘(1) Each year, close to 1,000,000 American

4 children are victims of abuse and neglect.

5 ‘‘(2) Many of these children and their families

6 fail to receive adequate protection or treatment.

7 ‘‘(3) The problem of child abuse and neglect re8 quires a comprehensive approach that—

9 ‘‘(A) integrates the work of social service,

10 legal, health, mental health, education, and sub11 stance abuse agencies and organizations;

12 ‘‘(B) strengthens coordination among all

13 levels of government, and with private agencies,

14 civic, religious, and professional organizations,

15 and individual volunteers;

16 ‘‘(C) emphasizes the need for abuse and

17 neglect prevention, assessment, investigation,

18 and treatment at the neighborhood level;

19 ‘‘(D) ensures properly trained and support

20 staff with specialized knowledge, to carry out

21 their child protection duties; and

22 ‘‘(E) is sensitive to ethnic and cultural di23 versity.

24 ‘‘(4) The child protection system should be

25 comprehensive, child-centered, family-focused, and

26 community-based, should incorporate all appropriate
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1 measures to prevent the occurrence or recurrence of

2 child abuse and neglect, and should promote physical

3 and psychological recovery and social reintegration

4 in an environment that fosters the health, safety,

5 self-respect, and dignity of the child.

6 ‘‘(5) The Federal Government should provide

7 leadership and assist communities in their child and

8 family protection efforts by—

9 ‘‘(A) generating and sharing knowledge

10 relevant to child and family protection, includ11 ing the development of models for service deliv12 ery;

13 ‘‘(B) strengthening the capacity of States

14 to assist communities;

15 ‘‘(C) helping communities to carry out

16 their child and family protection plans by pro17 moting the competence of professional, para18 professional, and volunteer resources; and

19 ‘‘(D) providing leadership to end the abuse

20 and neglect of the Nation’s children and youth.

21 ‘‘SEC. 3. PURPOSES.

22 ‘‘The purposes of this Act are the following:

23 ‘‘(1) To assist each State in improving the child

24 protective service systems of such State by—
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1 ‘‘(A) improving risk and safety assessment

2 tools and protocols;

3 ‘‘(B) developing, strengthening, and facili4 tating training opportunities for individuals who

5 are mandated to report child abuse or neglect

6 or otherwise overseeing, investigating, prosecut7 ing, or providing services to children and fami8 lies who are at risk of abusing or neglecting

9 their children; and

10 ‘‘(C) developing, implementing, or operat11 ing information, education, training, or other

12 programs designed to assist and provide serv13 ices for families of disabled infants with life14 threatening conditions.

15 ‘‘(2) To support State efforts to develop, oper16 ate, expand and enhance a network of community17 based, prevention-focused, family resource and sup18 port programs that are culturally competent and

19 that coordinate resources among existing education,

20 vocational rehabilitation, disability, respite, health,

21 mental health, job readiness, self-sufficiency, child

22 and family development, community action, Head

23 Start, child care, child abuse and neglect prevention,

24 juvenile justice, domestic violence prevention and
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1 intervention, housing, and other human service orga2 nizations within the State.

3 ‘‘(3) To facilitate the elimination of barriers to

4 adoption and to provide permanent and loving home

5 environments for children who would benefit from

6 adoption, particularly children with special needs, in7 cluding disabled infants with life-threatening condi8 tions, by—

9 ‘‘(A) promoting model adoption legislation

10 and procedures in the States and territories of

11 the United States in order to eliminate jurisdic12 tional and legal obstacles to adoption;

13 ‘‘(B) providing a mechanism for the De14 partment of Health and Human Services to—

15 ‘‘(i) promote quality standards for

16 adoption services, preplacement, post17 placement, and post-legal adoption counsel18 ing, and standards to protect the rights of

19 children in need of adoption;

20 ‘‘(ii) maintain a national adoption in21 formation exchange system to bring to22 gether children who would benefit from

23 adoption and qualified prospective adoptive

24 parents who are seeking such children, and

25 conduct national recruitment efforts in
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1 order to reach prospective parents for chil2 dren awaiting adoption; and

3 ‘‘(iii) demonstrate expeditious ways to

4 free children for adoption for whom it has

5 been determined that adoption is the ap6 propriate plan; and

7 ‘‘(C) facilitating the identification and re8 cruitment of foster and adoptive families that

9 can meet children’s needs.

10 ‘‘(4) To respond to the needs of children, in

11 particular those who are drug exposed or afflicted

12 with Acquired Immune Deficiency Syndrome

13 (AIDS), by supporting activities aimed at preventing

14 the abandonment of children, providing support to

15 children and their families, and facilitating the re16 cruitment and training of health and social service

17 personnel.

18 ‘‘(5) To carry out any other activities as the

19 Secretary determines are consistent with this Act.

20 ‘‘SEC. 4. DEFINITIONS.

21 ‘‘As used in this Act:

22 ‘‘(1) CHILD.—The term ‘child’ means a person

23 who has not attained the lesser of—

24 ‘‘(A) the age of 18; or
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1 ‘‘(B) except in the case of sexual abuse,

2 the age specified by the child protection law of

3 the State in which the child resides.

4 ‘‘(2) CHILD ABUSE AND NEGLECT.—The term

5 ‘child abuse and neglect’ means, at a minimum, any

6 recent act or failure to act on the part of a parent

7 or caretaker, which results in death, serious physical

8 or emotional harm, sexual abuse or exploitation, or

9 an act or failure to act which presents an imminent

10 risk of serious harm.

11 ‘‘(3) FAMILY RESOURCE AND SUPPORT PRO12 GRAMS.—The term ‘family resource and support

13 program’ means a community-based, prevention-fo14 cused entity that—

15 ‘‘(A) provides, through direct service, the

16 core services required under this Act, includ17 ing—

18 ‘‘(i) parent education, support and

19 leadership services, together with services

20 characterized by relationships between par21 ents and professionals that are based on

22 equality and respect, and designed to assist

23 parents in acquiring parenting skills, learn24 ing about child development, and respond-
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1 ing appropriately to the behavior of their

2 children;

3 ‘‘(ii) services to facilitate the ability of

4 parents to serve as resources to one an5 other (such as through mutual support and

6 parent self-help groups);

7 ‘‘(iii) early developmental screening of

8 children to assess any needs of children,

9 and to identify types of support that may

10 be provided;

11 ‘‘(iv) outreach services provided

12 through voluntary home visits and other

13 methods to assist parents in becoming

14 aware of and able to participate in family

15 resources and support program activities;

16 ‘‘(v) community and social services to

17 assist families in obtaining community re18 sources; and

19 ‘‘(vi) followup services;

20 ‘‘(B) provides, or arranges for the provi21 sion of, other core services through contracts or

22 agreements with other local agencies; and

23 ‘‘(C) provides access to optional services,

24 directly or by contract, purchase of service, or

25 interagency agreement, including—
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1 ‘‘(i) child care, early childhood devel2 opment and early intervention services;

3 ‘‘(ii) self-sufficiency and life manage4 ment skills training;

5 ‘‘(iii) education services, such as scho6 lastic tutoring, literacy training, and Gen7 eral Educational Degree services;

8 ‘‘(iv) job readiness skills;

9 ‘‘(v) child abuse and neglect preven10 tion activities;

11 ‘‘(vi) services that families with chil12 dren with disabilities or special needs may

13 require;

14 ‘‘(vii) community and social service re15 ferral;

16 ‘‘(viii) peer counseling;

17 ‘‘(ix) referral for substance abuse

18 counseling and treatment; and

19 ‘‘(x) help line services.

20 ‘‘(4) INDIAN TRIBE AND TRIBAL ORGANIZA21 TION.—The terms ‘Indian tribe’ and ‘tribal organi22 zation’ shall have the same meanings given such

23 terms in subsections (e) and (l), respectively, of sec24 tion 4 of the Indian Self-Determination and Edu25 cation Assistance Act (25 U.S.C. 450b(e) and (l)).
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1 ‘‘(5) RESPITE SERVICES.—The term ‘respite

2 services’ means short-term care services provided in

3 the temporary absence of the regular caregiver (par4 ent, other relative, foster parent, adoptive parent, or

5 guardian) to children who—

6 ‘‘(A) are in danger of abuse or neglect;

7 ‘‘(B) have experienced abuse or neglect; or

8 ‘‘(C) have disabilities, chronic, or terminal

9 illnesses.

10 Such services shall be provided within or outside the

11 home of the child, be short-term care (ranging from

12 a few hours to a few weeks of time, per year), and

13 be intended to enable the family to stay together and

14 to keep the child living in the home and community

15 of the child.

16 ‘‘(6) SECRETARY.—The term ‘Secretary’ means

17 the Secretary of Health and Human Services.

18 ‘‘(7) SEXUAL ABUSE.—The term ‘sexual abuse’

19 includes—

20 ‘‘(A) the employment, use, persuasion, in21 ducement, enticement, or coercion of any child

22 to engage in, or assist any other person to en23 gage in, any sexually explicit conduct or simula24 tion of such conduct for the purpose of produc25 ing a visual depiction of such conduct; or
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1 ‘‘(B) the rape, molestation, prostitution, or

2 other form of sexual exploitation of children, or

3 incest with children.

4 ‘‘(8) STATE.—The term ‘State’ means each of

5 the several States, the District of Columbia, the

6 Commonwealth of Puerto Rico, the Virgin Islands,

7 Guam, American Samoa, the Commonwealth of the

8 Northern Mariana Islands, and the Trust Territory

9 of the Pacific Islands.

10 ‘‘(9) WITHHOLDING OF MEDICALLY INDICATED

11 TREATMENT.—The term ‘withholding of medically

12 indicated treatment’ means the failure to respond to

13 the infant’s life-threatening conditions by providing

14 treatment (including appropriate nutrition, hydra15 tion, and medication) which, in the treating physi16 cian’s or physicians’ reasonable medical judgment,

17 will be most likely to be effective in ameliorating or

18 correcting all such conditions, except that the term

19 does not include the failure to provide treatment

20 (other than appropriate nutrition, hydration, or

21 medication) to an infant when, in the treating physi22 cian’s or physicians’ reasonable medical judgment—

23 ‘‘(A) the infant is chronically and irrevers24 ibly comatose;
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1 ‘‘(B) the provision of such treatment

2 would—

3 ‘‘(i) merely prolong dying;

4 ‘‘(ii) not be effective in ameliorating

5 or correcting all of the infant’s life-threat6 ening conditions; or

7 ‘‘(iii) otherwise be futile in terms of

8 the survival of the infant; or

9 ‘‘(C) the provision of such treatment would

10 be virtually futile in terms of the survival of the

11 infant and the treatment itself under such cir12 cumstances would be inhumane.

13 ‘‘TITLE I—GENERAL BLOCK

14 GRANT

15 ‘‘SEC. 101. CHILD AND FAMILY SERVICES BLOCK GRANTS.

16 ‘‘(a) ELIGIBILITY.—The Secretary shall award

17 grants to eligible States that file a State plan that is ap18 proved under section 102 and that otherwise meet the eli19 gibility requirements for grants under this title.

20 ‘‘(b) AMOUNT OF GRANT.—The amount of a grant

21 made to each State under subsection (a) for a fiscal year

22 shall be based on the population of children under the age

23 of 18 residing in each State that applies for a grant under

24 this section.
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1 ‘‘(c) USE OF AMOUNTS.—Amounts received by a

2 State under a grant awarded under subsection (a) shall

3 be used to carry out the purposes described in section 3.

4 ‘‘SEC. 102. ELIGIBLE STATES.

5 ‘‘(a) IN GENERAL.—As used in this title, the term

6 ‘eligible State’ means a State that has submitted to the

7 Secretary, not later than October 1, 1996, and every 3

8 years thereafter, a plan which has been signed by the chief

9 executive officer of the State and that includes the follow10 ing:

11 ‘‘(1) OUTLINE OF CHILD PROTECTION PRO12 GRAM.—A written document that outlines the activi13 ties the State intends to conduct to achieve the pur14 pose of this title, including the procedures to be used

15 for—

16 ‘‘(A) receiving and assessing reports of

17 child abuse or neglect;

18 ‘‘(B) investigating such reports;

19 ‘‘(C) with respect to families in which

20 abuse or neglect has been confirmed, providing

21 services or referral for services for families and

22 children where the State makes a determination

23 that the child may safely remain with the fam24 ily;
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1 ‘‘(D) protecting children by removing them

2 from dangerous settings and ensuring their

3 placement in a safe environment;

4 ‘‘(E) providing training for individuals

5 mandated to report suspected cases of child

6 abuse or neglect;

7 ‘‘(F) protecting children in foster care;

8 ‘‘(G) promoting timely adoptions;

9 ‘‘(H) protecting the rights of families,

10 using adult relatives as the preferred placement

11 for children separated from their parents where

12 such relatives meet the relevant State child pro13 tection standards; and

14 ‘‘(I) providing services to individuals, fami15 lies, or communities, either directly or through

16 referral, that are aimed at preventing the occur17 rence of child abuse and neglect.

18 ‘‘(2) CERTIFICATION OF STATE LAW REQUIRING

19 THE REPORTING OF CHILD ABUSE AND NEGLECT.—

20 A certification that the State has in effect laws that

21 require public officials and other professionals to re22 port, in good faith, actual or suspected instances of

23 child abuse or neglect.

24 ‘‘(3) CERTIFICATION OF PROCEDURES FOR

25 SCREENING, SAFETY ASSESSMENT, AND PROMPT IN-
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1 VESTIGATION.—A certification that the State has in

2 effect procedures for receiving and responding to re3 ports of child abuse or neglect, including the reports

4 described in paragraph (2), and for the immediate

5 screening, safety assessment, and prompt investiga6 tion of such reports.

7 ‘‘(4) CERTIFICATION OF STATE PROCEDURES

8 FOR REMOVAL AND PLACEMENT OF ABUSED OR NE9 GLECTED CHILDREN.—A certification that the State

10 has in effect procedures for the removal from fami11 lies and placement of abused or neglected children

12 and of any other child in the same household who

13 may also be in danger of abuse or neglect.

14 ‘‘(5) CERTIFICATION OF PROVISIONS FOR IMMU15 NITY FROM PROSECUTION.—A certification that the

16 State has in effect laws requiring immunity from

17 prosecution under State and local laws and regula18 tions for individuals making good faith reports of

19 suspected or known instances of child abuse or ne20 glect.

21 ‘‘(6) CERTIFICATION OF PROVISIONS AND PRO22 CEDURES RELATING TO APPEALS.—A certification

23 that not later than 2 years after the date of the en24 actment of this Act, the State shall have laws and

25 procedures in effect affording individuals an oppor-
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1 tunity to appeal an official finding of abuse or ne2 glect.

3 ‘‘(7) CERTIFICATION OF STATE PROCEDURES

4 FOR DEVELOPING AND REVIEWING WRITTEN PLANS

5 FOR PERMANENT PLACEMENT OF REMOVED CHIL6 DREN.—A certification that the State has in effect

7 procedures for ensuring that a written plan is pre8 pared for children who have been removed from their

9 families. Such plan shall specify the goals for achiev10 ing a permanent placement for the child in a timely

11 fashion, for ensuring that the written plan is re12 viewed every 6 months (until such placement is

13 achieved), and for ensuring that information about

14 such children is collected regularly and recorded in

15 case records, and include a description of such pro16 cedures.

17 ‘‘(8) CERTIFICATION OF STATE PROGRAM TO

18 PROVIDE INDEPENDENT LIVING SERVICES.—A cer19 tification that the State has in effect a program to

20 provide independent living services, for assistance in

21 making the transition to self-sufficient adulthood, to

22 individuals in the child protection program of the

23 State who are 16, but who are not 20 (or, at the op24 tion of the State, 22), years of age, and who do not

25 have a family to which to be returned.
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1 ‘‘(9) CERTIFICATION OF STATE PROCEDURES

2 TO RESPOND TO REPORTING OF MEDICAL NEGLECT

3 OF DISABLED INFANTS.—

4 ‘‘(A) IN GENERAL.—A certification that

5 the State has in place for the purpose of re6 sponding to the reporting of medical neglect of

7 infants (including instances of withholding of

8 medically indicated treatment from disabled in9 fants with life-threatening conditions), proce10 dures or programs, or both (within the State

11 child protective services system), to provide

12 for—

13 ‘‘(i) coordination and consultation

14 with individuals designated by and within

15 appropriate health-care facilities;

16 ‘‘(ii) prompt notification by individ17 uals designated by and within appropriate

18 health-care facilities of cases of suspected

19 medical neglect (including instances of

20 withholding of medically indicated treat21 ment from disabled infants with life-threat22 ening conditions); and

23 ‘‘(iii) authority, under State law, for

24 the State child protective service to pursue

25 any legal remedies, including the authority
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1 to initiate legal proceedings in a court of

2 competent jurisdiction, as may be nec3 essary to prevent the withholding of medi4 cally indicated treatment from disabled in5 fants with life-threatening conditions.

6 ‘‘(B) WITHHOLDING OF MEDICALLY INDI7 CATED TREATMENT.—As used in subparagraph

8 (A), the term ‘withholding of medically indi9 cated treatment’ means the failure to respond

10 to the infant’s life-threatening conditions by

11 providing treatment (including appropriate nu12 trition, hydration, and medication) which, in the

13 treating physician’s or physicians’ reasonable

14 medical judgment, will be most likely to be ef15 fective in ameliorating or correcting all such

16 conditions, except that such term does not in17 clude the failure to provide treatment (other

18 than appropriate nutrition, hydration, or medi19 cation) to an infant when, in the treating physi20 cian’s or physicians’ reasonable medical judg21 ment—

22 ‘‘(i) the infant is chronically and irre23 versibly comatose;

24 ‘‘(ii) the provision of such treatment

25 would—
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1 ‘‘(I) merely prolong dying;

2 ‘‘(II) not be effective in amelio3 rating or correcting all of the infant’s

4 life-threatening conditions; or

5 ‘‘(III) otherwise be futile in

6 terms of the survival of the infant; or

7 ‘‘(iii) the provision of such treatment

8 would be virtually futile in terms of the

9 survival of the infant and the treatment it10 self under such circumstances would be in11 humane.

12 ‘‘(10) IDENTIFICATION OF CHILD PROTECTION

13 GOALS.—The quantitative goals of the State child

14 protection program.

15 ‘‘(11) CERTIFICATION OF CHILD PROTECTION

16 STANDARDS.—With respect to fiscal years beginning

17 on or after April 1, 1996, a certification that the

18 State—

19 ‘‘(A) has completed an inventory of all

20 children who, before the inventory, had been in

21 foster care under the responsibility of the State

22 for 6 months or more, which determined—

23 ‘‘(i) the appropriateness of, and neces24 sity for, the foster care placement;
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•HR 3507 IH

1 ‘‘(ii) whether the child could or should

2 be returned to the parents of the child or

3 should be freed for adoption or other per4 manent placement; and

5 ‘‘(iii) the services necessary to facili6 tate the return of the child or the place7 ment of the child for adoption or legal

8 guardianship;

9 ‘‘(B) is operating, to the satisfaction of the

10 Secretary—

11 ‘‘(i) a statewide information system

12 from which can be readily determined the

13 status, demographic characteristics, loca14 tion, and goals for the placement of every

15 child who is (or, within the immediately

16 preceding 12 months, has been) in foster

17 care;

18 ‘‘(ii) a case review system for each

19 child receiving foster care under the super20 vision of the State;

21 ‘‘(iii) a service program designed to

22 help children—

23 ‘‘(I) where appropriate, return to

24 families from which they have been

25 removed; or
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1 ‘‘(II) be placed for adoption, with

2 a legal guardian, or if adoption or

3 legal guardianship is determined not

4 to be appropriate for a child, in some

5 other planned, permanent living ar6 rangement; and

7 ‘‘(iv) a preplacement preventive serv8 ices program designed to help children at

9 risk for foster care placement remain with

10 their families; and

11 ‘‘(C)(i) has reviewed (or not later than Oc12 tober 1, 1997, will review) State policies and

13 administrative and judicial procedures in effect

14 for children abandoned at or shortly after birth

15 (including policies and procedures providing for

16 legal representation of such children); and

17 ‘‘(ii) is implementing (or not later than Oc18 tober 1, 1997, will implement) such policies and

19 procedures as the State determines, on the

20 basis of the review described in clause (i), to be

21 necessary to enable permanent decisions to be

22 made expeditiously with respect to the place23 ment of such children.

24 ‘‘(12) CERTIFICATION OF REASONABLE EF25 FORTS BEFORE PLACEMENT OF CHILDREN IN FOS-
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1 TER CARE.—A certification that the State in each

2 case will—

3 ‘‘(A) make reasonable efforts prior to the

4 placement of a child in foster care, to prevent

5 or eliminate the need for removal of the child

6 from the child’s home, and to make it possible

7 for the child to return home; and

8 ‘‘(B) with respect to families in which

9 abuse or neglect has been confirmed, provide

10 services or referral for services for families and

11 children where the State makes a determination

12 that the child may safely remain with the fam13 ily.

14 ‘‘(13) CERTIFICATION OF CONFIDENTIALITY

15 AND REQUIREMENTS FOR INFORMATION DISCLO16 SURE.—

17 ‘‘(A) IN GENERAL.—A certification that

18 the State has in effect and operational—

19 ‘‘(i) requirements ensuring that re20 ports and records made and maintained

21 pursuant to the purposes of this part shall

22 only be made available to—

23 ‘‘(I) individuals who are the sub24 ject of the report;
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1 ‘‘(II) Federal, State, or local gov2 ernment entities, or any agent of such

3 entities, having a need for such infor4 mation in order to carry out their re5 sponsibilities under law to protect

6 children from abuse and neglect;

7 ‘‘(III) child abuse citizen review

8 panels;

9 ‘‘(IV) child fatality review panels;

10 ‘‘(V) a grand jury or court, upon

11 a finding that information in the

12 record is necessary for the determina13 tion of an issue before the court or

14 grand jury; and

15 ‘‘(VI) other entities or classes of

16 individuals statutorily authorized by

17 the State to receive such information

18 pursuant to a legitimate State pur19 pose; and

20 ‘‘(ii) provisions that allow for public

21 disclosure of the findings or information

22 about cases of child abuse or neglect that

23 have resulted in a child fatality or near fa24 tality.
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1 ‘‘(B) LIMITATION.—Disclosures made pur2 suant to clause (i) or (ii) shall not include the

3 identifying information concerning the individ4 ual initiating a report or complaint alleging sus5 pected instances of child abuse or neglect.

6 ‘‘(C) DEFINITION.—For purposes of this

7 paragraph, the term ‘near fatality’ means an

8 act that, as certified by a physician, places the

9 child in serious or critical condition.

10 ‘‘(b) DETERMINATIONS.—The Secretary shall deter11 mine whether a plan submitted pursuant to subsection (a)

12 contains the material required by subsection (a), other

13 than the material described in paragraph (9) of such sub14 section. The Secretary may not require a State to include

15 in such a plan any material not described in subsection

16 (a).

17 ‘‘SEC. 103. DATA COLLECTION AND REPORTING.

18 ‘‘(a) NATIONAL CHILD ABUSE AND NEGLECT DATA

19 SYSTEM.—The Secretary shall establish a national data

20 collection and analysis program—

21 ‘‘(1) which, to the extent practicable, coordi22 nates existing State child abuse and neglect reports

23 and which shall include—
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1 ‘‘(A) standardized data on substantiated,

2 as well as false, unfounded, or unsubstantiated

3 reports; and

4 ‘‘(B) information on the number of deaths

5 due to child abuse and neglect; and

6 ‘‘(2) which shall collect, compile, analyze, and

7 make available State child abuse and neglect report8 ing information which, to the extent practical, is uni9 versal and case-specific and integrated with other

10 case-based foster care and adoption data collected by

11 the Secretary.

12 ‘‘(b) ADOPTION AND FOSTER CARE AND ANALYSIS

13 AND REPORTING SYSTEMS.—The Secretary shall imple14 ment a system for the collection of data relating to adop15 tion and foster care in the United States. Such data collec16 tion system shall—

17 ‘‘(1) avoid unnecessary diversion of resources

18 from agencies responsible for adoption and foster

19 care;

20 ‘‘(2) assure that any data that is collected is re21 liable and consistent over time and among jurisdic22 tions through the use of uniform definitions and

23 methodologies;

24 ‘‘(3) provide comprehensive national informa25 tion with respect to—
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1 ‘‘(A) the demographic characteristics of

2 adoptive and foster children and their biological

3 and adoptive or foster parents;

4 ‘‘(B) the status of the foster care popu5 lation (including the number of children in fos6 ter care, length of placement, type of place7 ment, availability for adoption, and goals for

8 ending or continuing foster care);

9 ‘‘(C) the number and characteristics of—

10 ‘‘(i) children placed in or removed

11 from foster care;

12 ‘‘(ii) children adopted or with respect

13 to whom adoptions have been terminated;

14 and

15 ‘‘(iii) children placed in foster care

16 outside the State which has placement and

17 care responsibility; and

18 ‘‘(D) the extent and nature of assistance

19 provided by Federal, State, and local adoption

20 and foster care programs and the characteris21 tics of the children with respect to whom such

22 assistance is provided; and

23 ‘‘(4) utilize appropriate requirements and incen24 tives to ensure that the system functions reliably

25 throughout the United States.
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1 ‘‘(c) ADDITIONAL INFORMATION.—The Secretary

2 may require the provision of additional information under

3 the data collection system established under subsection (b)

4 if the addition of such information is agreed to by a major5 ity of the States.

6 ‘‘(d) ANNUAL REPORT BY THE SECRETARY.—Within

7 6 months after the end of each fiscal year, the Secretary

8 shall prepare a report based on information provided by

9 the States for the fiscal year pursuant to this section, and

10 shall make the report and such information available to

11 the Congress and the public.

12 ‘‘TITLE II—RESEARCH, DEM13 ONSTRATIONS, TRAINING,

14 AND TECHNICAL ASSISTANCE

15 ‘‘SEC. 201. RESEARCH GRANTS.

16 ‘‘(a) IN GENERAL.—The Secretary, in consultation

17 with appropriate Federal officials and recognized experts

18 in the field, shall award grants or contracts for the con19 duct of research in accordance with subsection (b).

20 ‘‘(b) RESEARCH.—Research projects to be conducted

21 using amounts received under this section—

22 ‘‘(1) shall be designed to provide information to

23 better protect children from abuse or neglect and to

24 improve the well-being of abused or neglected chil-
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1 dren, with at least a portion of any such research

2 conducted under a project being field initiated;

3 ‘‘(2) shall at a minimum, focus on—

4 ‘‘(A) the nature and scope of child abuse

5 and neglect;

6 ‘‘(B) the causes, prevention, assessment,

7 identification, treatment, cultural and socio8 economic distinctions, and the consequences of

9 child abuse and neglect;

10 ‘‘(C) appropriate, effective and culturally

11 sensitive investigative, administrative, and judi12 cial procedures with respect to cases of child

13 abuse; and

14 ‘‘(D) the national incidence of child abuse

15 and neglect, including—

16 ‘‘(i) the extent to which incidents of

17 child abuse are increasing or decreasing in

18 number and severity;

19 ‘‘(ii) the incidence of substantiated

20 and unsubstantiated reported child abuse

21 cases;

22 ‘‘(iii) the number of substantiated

23 cases that result in a judicial finding of

24 child abuse or neglect or related criminal

25 court convictions;
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1 ‘‘(iv) the extent to which the number

2 of unsubstantiated, unfounded and false

3 reported cases of child abuse or neglect

4 have contributed to the inability of a State

5 to respond effectively to serious cases of

6 child abuse or neglect;

7 ‘‘(v) the extent to which the lack of

8 adequate resources and the lack of ade9 quate training of reporters have contrib10 uted to the inability of a State to respond

11 effectively to serious cases of child abuse

12 and neglect;

13 ‘‘(vi) the number of unsubstantiated,

14 false, or unfounded reports that have re15 sulted in a child being placed in substitute

16 care, and the duration of such placement;

17 ‘‘(vii) the extent to which unsubstan18 tiated reports return as more serious cases

19 of child abuse or neglect;

20 ‘‘(viii) the incidence and prevalence of

21 physical, sexual, and emotional abuse and

22 physical and emotional neglect in sub23 stitute care;

24 ‘‘(ix) the incidence and outcomes of

25 abuse allegations reported within the con-
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1 text of divorce, custody, or other family

2 court proceedings, and the interaction be3 tween this venue and the child protective

4 services system; and

5 ‘‘(x) the cases of children reunited

6 with their families or receiving family pres7 ervation services that result in subsequent

8 substantiated reports of child abuse and

9 neglect, including the death of the child;

10 and

11 ‘‘(3) may include the appointment of an advi12 sory board to—

13 ‘‘(A) provide recommendations on coordi14 nating Federal, State, and local child abuse and

15 neglect activities at the State level with similar

16 activities at the State and local level pertaining

17 to family violence prevention;

18 ‘‘(B) consider specific modifications needed

19 in State laws and programs to reduce the num20 ber of unfounded or unsubstantiated reports of

21 child abuse or neglect while enhancing the abil22 ity to identify and substantiate legitimate cases

23 of abuse or neglect which place a child in dan24 ger; and
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1 ‘‘(C) provide recommendations for modi2 fications needed to facilitate coordinated na3 tional and Statewide data collection with re4 spect to child protection and child welfare.

5 ‘‘SEC. 202. NATIONAL CLEARINGHOUSE FOR INFORMATION

6 RELATING TO CHILD ABUSE.

7 ‘‘(a) ESTABLISHMENT.—The Secretary shall,

8 through the Department of Health and Human Services,

9 or by one or more contracts of not less than 3 years dura10 tion provided through a competition, establish a national

11 clearinghouse for information relating to child abuse.

12 ‘‘(b) FUNCTIONS.—The Secretary shall, through the

13 clearinghouse established by subsection (a)—

14 ‘‘(1) maintain, coordinate, and disseminate in15 formation on all programs, including private pro16 grams, that show promise of success with respect to

17 the prevention, assessment, identification, and treat18 ment of child abuse and neglect;

19 ‘‘(2) maintain and disseminate information re20 lating to—

21 ‘‘(A) the incidence of cases of child abuse

22 and neglect in the United States;

23 ‘‘(B) the incidence of such cases in popu24 lations determined by the Secretary under sec25 tion 105(a)(1) of the Child Abuse Prevention,
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1 Adoption, and Family Services Act of 1988 (as

2 such section was in effect on the day before the

3 date of enactment of this Act); and

4 ‘‘(C) the incidence of any such cases relat5 ed to alcohol or drug abuse;

6 ‘‘(3) disseminate information related to data

7 collected and reported by States pursuant to section

8 103;

9 ‘‘(4) compile, analyze, and publish a summary

10 of the research conducted under section 201; and

11 ‘‘(5) solicit public comment on the components

12 of such clearinghouse.

13 ‘‘SEC. 203. GRANTS FOR DEMONSTRATION PROJECTS.

14 ‘‘(a) AWARDING OF GENERAL GRANTS.—The Sec15 retary may make grants to, and enter into contracts with,

16 public and nonprofit private agencies or organizations (or

17 combinations of such agencies or organizations) for the

18 purpose of developing, implementing, and operating time

19 limited, demonstration programs and projects for the fol20 lowing purposes:

21 ‘‘(1) INNOVATIVE PROGRAMS AND PROJECTS.—

22 The Secretary may award grants to public agencies

23 that demonstrate innovation in responding to reports

24 of child abuse and neglect including programs of col25 laborative partnerships between the State child pro-
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1 tective service agency, community social service

2 agencies and family support programs, schools,

3 churches and synagogues, and other community

4 agencies to allow for the establishment of a triage

5 system that—

6 ‘‘(A) accepts, screens and assesses reports

7 received to determine which such reports re8 quire an intensive intervention and which re9 quire voluntary referral to another agency, pro10 gram or project;

11 ‘‘(B) provides, either directly or through

12 referral, a variety of community-linked services

13 to assist families in preventing child abuse and

14 neglect; and

15 ‘‘(C) provides further investigation and in16 tensive intervention where the child’s safety is

17 in jeopardy.

18 ‘‘(2) KINSHIP CARE PROGRAMS AND

19 PROJECTS.—The Secretary may award grants to

20 public entities to assist such entities in developing or

21 implementing procedures using adult relatives as the

22 preferred placement for children removed from their

23 home, where such relatives are determined to be ca24 pable of providing a safe nurturing environment for

25 the child and where, to the maximum extent prac-
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1 ticable, such relatives comply with relevant State

2 child protection standards.

3 ‘‘(3) ADOPTION OPPORTUNITIES.—The Sec4 retary may award grants to public entities to assist

5 such entities in developing or implementing pro6 grams to expand opportunities for the adoption of

7 children with special needs.

8 ‘‘(4) FAMILY RESOURCE CENTERS.—The Sec9 retary may award grants to public or nonprofit pri10 vate entities to provide for the establishment of fam11 ily resource programs and support services that—

12 ‘‘(A) develop, expand, and enhance state13 wide networks of community-based, prevention14 focused centers, programs, or services that pro15 vide comprehensive support for families;

16 ‘‘(B) promote the development of parental

17 competencies and capacities in order to increase

18 family stability;

19 ‘‘(C) support the additional needs of fami20 lies with children with disabilities;

21 ‘‘(D) foster the development of a contin22 uum of preventive services for children and

23 families through State and community-based

24 collaborations and partnerships (both public

25 and private); and
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1 ‘‘(E) maximize funding for the financing,

2 planning, community mobilization, collabora3 tion, assessment, information and referral,

4 startup, training and technical assistance, infor5 mation management, reporting, and evaluation

6 costs for establishing, operating, or expanding a

7 statewide network of community-based, preven8 tion-focused family resource and support serv9 ices.

10 ‘‘(5) OTHER INNOVATIVE PROGRAMS.—The

11 Secretary may award grants to public or private

12 nonprofit organizations to assist such entities in de13 veloping or implementing innovative programs and

14 projects that show promise of preventing and treat15 ing cases of child abuse and neglect (such as Par16 ents Anonymous).

17 ‘‘(b) GRANTS FOR ABANDONED INFANT PRO18 GRAMS.—The Secretary may award grants to public and

19 nonprofit private entities to assist such entities in develop20 ing or implementing procedures—

21 ‘‘(1) to prevent the abandonment of infants and

22 young children, including the provision of services to

23 members of the natural family for any condition that

24 increases the probability of abandonment of an in25 fant or young child;
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1 ‘‘(2) to identify and address the needs of aban2 doned infants and young children;

3 ‘‘(3) to assist abandoned infants and young

4 children to reside with their natural families or in

5 foster care, as appropriate;

6 ‘‘(4) to recruit, train, and retain foster families

7 for abandoned infants and young children;

8 ‘‘(5) to carry out residential care programs for

9 abandoned infants and young children who are un10 able to reside with their families or to be placed in

11 foster care;

12 ‘‘(6) to carry out programs of respite care for

13 families and foster families of infants and young

14 children; and

15 ‘‘(7) to recruit and train health and social serv16 ices personnel to work with families, foster care fam17 ilies, and residential care programs for abandoned

18 infants and young children.

19 ‘‘(c) EVALUATION.—In making grants for demonstra20 tion projects under this section, the Secretary shall require

21 all such projects to be evaluated for their effectiveness.

22 Funding for such evaluations shall be provided either as

23 a stated percentage of a demonstration grant or as a sepa24 rate grant entered into by the Secretary for the purpose
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1 of evaluating a particular demonstration project or group

2 of projects.

3 ‘‘SEC. 204. TECHNICAL ASSISTANCE.

4 ‘‘(a) CHILD ABUSE AND NEGLECT.—

5 ‘‘(1) IN GENERAL.—The Secretary shall provide

6 technical assistance under this title to States to as7 sist such States in planning, improving, developing,

8 and carrying out programs and activities relating to

9 the prevention, assessment identification, and treat10 ment of child abuse and neglect.

11 ‘‘(2) EVALUATION.—Technical assistance pro12 vided under paragraph (1) may include an evalua13 tion or identification of—

14 ‘‘(A) various methods and procedures for

15 the investigation, assessment, and prosecution

16 of child physical and sexual abuse cases;

17 ‘‘(B) ways to mitigate psychological trau18 ma to the child victim; and

19 ‘‘(C) effective programs carried out by the

20 States under this Act.

21 ‘‘(b) ADOPTION OPPORTUNITIES.—The Secretary

22 shall provide, directly or by grant to or contract with pub23 lic or private nonprofit agencies or organizations—

24 ‘‘(1) technical assistance and resource and re25 ferral information to assist State or local govern-
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1 ments with termination of parental rights issues, in

2 recruiting and retaining adoptive families, in the

3 successful placement of children with special needs,

4 and in the provision of pre- and post-placement serv5 ices, including post-legal adoption services; and

6 ‘‘(2) other assistance to help State and local

7 governments replicate successful adoption-related

8 projects from other areas in the United States.

9 ‘‘SEC. 205. TRAINING RESOURCES.

10 ‘‘(a) TRAINING PROGRAMS.—The Secretary may

11 award grants to public or private nonprofit organiza12 tions—

13 ‘‘(1) for the training of professional and para14 professional personnel in the fields of medicine, law,

15 education, law enforcement, social work, and other

16 relevant fields who are engaged in, or intend to work

17 in, the field of prevention, identification, and treat18 ment of child abuse and neglect, including the links

19 between domestic violence and child abuse;

20 ‘‘(2) to provide culturally specific instruction in

21 methods of protecting children from child abuse and

22 neglect to children and to persons responsible for the

23 welfare of children, including parents of and persons

24 who work with children with disabilities; and
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1 ‘‘(3) to improve the recruitment, selection, and

2 training of volunteers serving in private and public

3 nonprofit children, youth and family service organi4 zations in order to prevent child abuse and neglect

5 through collaborative analysis of current recruit6 ment, selection, and training programs and develop7 ment of model programs for dissemination and rep8 lication nationally.

9 ‘‘(b) DISSEMINATION OF INFORMATION.—The Sec10 retary may provide for and disseminate information relat11 ing to various training resources available at the State and

12 local level to—

13 ‘‘(1) individuals who are engaged, or who intend

14 to engage, in the prevention, identification, assess15 ment, and treatment of child abuse and neglect; and

16 ‘‘(2) appropriate State and local officials, in17 cluding prosecutors, to assist in training law en18 forcement, legal, judicial, medical, mental health,

19 education, and child welfare personnel in appropriate

20 methods of interacting during investigative, adminis21 trative, and judicial proceedings with children who

22 have been subjected to abuse.
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1 ‘‘SEC. 206. APPLICATIONS AND AMOUNTS OF GRANTS.

2 ‘‘(a) REQUIREMENT OF APPLICATION.—The Sec3 retary may not make a grant to a State or other entity

4 under this title unless—

5 ‘‘(1) an application for the grant is submitted

6 to the Secretary;

7 ‘‘(2) with respect to carrying out the purpose

8 for which the grant is to be made, the application

9 provides assurances of compliance satisfactory to the

10 Secretary; and

11 ‘‘(3) the application otherwise is in such form,

12 is made in such manner, and contains such agree13 ments, assurances, and information as the Secretary

14 determines to be necessary to carry out this title.

15 ‘‘(b) AMOUNT OF GRANT.—The Secretary shall de16 termine the amount of a grant to be awarded under this

17 title.

18 ‘‘SEC. 207. PEER REVIEW FOR GRANTS.

19 ‘‘(a) ESTABLISHMENT OF PEER REVIEW PROCESS.—

20 ‘‘(1) IN GENERAL.—The Secretary shall, in con21 sultation with experts in the field and other Federal

22 agencies, establish a formal, rigorous, and meritori23 ous peer review process for purposes of evaluating

24 and reviewing applications for grants under this title

25 and determining the relative merits of the projects

26 for which such assistance is requested. The purpose
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1 of this process is to enhance the quality and useful2 ness of research in the field of child abuse and ne3 glect.

4 ‘‘(2) REQUIREMENTS FOR MEMBERS.—In estab5 lishing the process required by paragraph (1), the

6 Secretary shall appoint to the peer review panels

7 only members who are experts in the field of child

8 abuse and neglect or related disciplines, with appro9 priate expertise in the application to be reviewed,

10 and who are not individuals who are officers or em11 ployees of the Administration for Children and Fam12 ilies. The panels shall meet as often as is necessary

13 to facilitate the expeditious review of applications for

14 grants and contracts under this title, but may not

15 meet less than once a year. The Secretary shall en16 sure that the peer review panel utilizes scientifically

17 valid review criteria and scoring guidelines for re18 view committees.

19 ‘‘(b) REVIEW OF APPLICATIONS FOR ASSISTANCE.—

20 Each peer review panel established under subsection

21 (a)(1) that reviews any application for a grant shall—

22 ‘‘(1) determine and evaluate the merit of each

23 project described in such application;

24 ‘‘(2) rank such application with respect to all

25 other applications it reviews in the same priority
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1 area for the fiscal year involved, according to the rel2 ative merit of all of the projects that are described

3 in such application and for which financial assist4 ance is requested; and

5 ‘‘(3) make recommendations to the Secretary

6 concerning whether the application for the project

7 shall be approved.

8 The Secretary shall award grants under this title on the

9 basis of competitive review.

10 ‘‘(c) NOTICE OF APPROVAL.—

11 ‘‘(1) IN GENERAL.—The Secretary shall provide

12 grants under this title from among the projects

13 which the peer review panels established under sub14 section (a)(1) have determined to have merit.

15 ‘‘(2) REQUIREMENT OF EXPLANATION.—In the

16 instance in which the Secretary approves an applica17 tion for a program under this title without having

18 approved all applications ranked above such applica19 tion, the Secretary shall append to the approved ap20 plication a detailed explanation of the reasons relied

21 on for approving the application and for failing to

22 approve each pending application that is superior in

23 merit.
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1 ‘‘SEC. 208. NATIONAL RANDOM SAMPLE STUDY OF CHILD

2 WELFARE.

3 ‘‘(a) IN GENERAL.—The Secretary shall conduct a

4 national study based on random samples of children who

5 are at risk of child abuse or neglect, or are determined

6 by States to have been abused or neglected, and such other

7 research as may be necessary.

8 ‘‘(b) REQUIREMENTS.—The study required by sub9 section (a) shall—

10 ‘‘(1) have a longitudinal component; and

11 ‘‘(2) yield data reliable at the State level for as

12 many States as the Secretary determines is feasible.

13 ‘‘(c) PREFERRED CONTENTS.—In conducting the

14 study required by subsection (a), the Secretary should—

15 ‘‘(1) collect data on the child protection pro16 grams of different small States (or different groups

17 of such States) in different years to yield an occa18 sional picture of the child protection programs of

19 such States;

20 ‘‘(2) carefully consider selecting the sample

21 from cases of confirmed abuse or neglect; and

22 ‘‘(3) follow each case for several years while ob23 taining information on, among other things—

24 ‘‘(A) the type of abuse or neglect involved;

25 ‘‘(B) the frequency of contact with State

26 or local agencies;
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1 ‘‘(C) whether the child involved has been

2 separated from the family, and, if so, under

3 what circumstances;

4 ‘‘(D) the number, type, and characteristics

5 of out-of-home placements of the child; and

6 ‘‘(E) the average duration of each place7 ment.

8 ‘‘(d) REPORTS.—

9 ‘‘(1) IN GENERAL.—From time to time, the

10 Secretary shall prepare reports summarizing the re11 sults of the study required by subsection (a).

12 ‘‘(2) AVAILABILITY.—The Secretary shall make

13 available to the public any report prepared under

14 paragraph (1), in writing or in the form of an elec15 tronic data tape.

16 ‘‘(3) AUTHORITY TO CHARGE FEE.—The Sec17 retary may charge and collect a fee for the furnish18 ing of reports under paragraph (2).

19 ‘‘(4) FUNDING.—The Secretary shall carry out

20 this section using amounts made available under sec21 tion 425 of the Social Security Act.
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1 ‘‘TITLE III—GENERAL

2 PROVISIONS

3 ‘‘SEC. 301. AUTHORIZATION OF APPROPRIATIONS.

4 ‘‘(a) TITLE I.—There are authorized to be appro5 priated to carry out title I, $230,000,000 for fiscal year

6 1996, and such sums as may be necessary for each of the

7 fiscal years 1997 through 2002.

8 ‘‘(b) TITLE II.—

9 ‘‘(1) IN GENERAL.—Of the amount appro10 priated under subsection (a) for a fiscal year, the

11 Secretary shall make available 12 percent of such

12 amount to carry out title II (except for sections 203

13 and 208).

14 ‘‘(2) GRANTS FOR DEMONSTRATION

15 PROJECTS.—Of the amount made available under

16 paragraph (1) for a fiscal year, the Secretary shall

17 make available not less than 40 percent of such

18 amount to carry out section 203.

19 ‘‘(c) INDIAN TRIBES.—Of the amount appropriated

20 under subsection (a) for a fiscal year, the Secretary shall

21 make available 1 percent of such amount to provide grants

22 and contracts to Indian tribes and Tribal Organizations.

23 ‘‘(d) AVAILABILITY OF APPROPRIATIONS.—Amounts

24 appropriated under subsection (a) shall remain available

25 until expended.
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1 ‘‘SEC. 302. GRANTS TO STATES FOR PROGRAMS RELATING

2 TO THE INVESTIGATION AND PROSECUTION

3 OF CHILD ABUSE AND NEGLECT CASES.

4 ‘‘(a) GRANTS TO STATES.—The Secretary, in con5 sultation with the Attorney General, is authorized to make

6 grants to the States for the purpose of assisting States

7 in developing, establishing, and operating programs de8 signed to improve—

9 ‘‘(1) the handling of child abuse and neglect

10 cases, particularly cases of child sexual abuse and

11 exploitation, in a manner which limits additional

12 trauma to the child victim;

13 ‘‘(2) the handling of cases of suspected child

14 abuse or neglect related fatalities; and

15 ‘‘(3) the investigation and prosecution of cases

16 of child abuse and neglect, particularly child sexual

17 abuse and exploitation.

18 ‘‘(b) ELIGIBILITY REQUIREMENTS.—In order for a

19 State to qualify for assistance under this section, such

20 State shall—

21 ‘‘(1) be an eligible State under section 102;

22 ‘‘(2) establish a task force as provided in sub23 section (c);

24 ‘‘(3) fulfill the requirements of subsection (d);

25 ‘‘(4) submit annually an application to the Sec26 retary at such time and containing such information
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1 and assurances as the Secretary considers necessary,

2 including an assurance that the State will—

3 ‘‘(A) make such reports to the Secretary as

4 may reasonably be required; and

5 ‘‘(B) maintain and provide access to

6 records relating to activities under subsection

7 (a); and

8 ‘‘(5) submit annually to the Secretary a report

9 on the manner in which assistance received under

10 this program was expended throughout the State,

11 with particular attention focused on the areas de12 scribed in paragraphs (1) through (3) of subsection

13 (a).

14 ‘‘(c) STATE TASK FORCES.—

15 ‘‘(1) GENERAL RULE.—Except as provided in

16 paragraph (2), a State requesting assistance under

17 this section shall establish or designate, and main18 tain, a State multidisciplinary task force on chil19 dren’s justice (hereafter in this section referred to as

20 ‘State task force’) composed of professionals with

21 knowledge and experience relating to the criminal

22 justice system and issues of child physical abuse,

23 child neglect, child sexual abuse and exploitation,

24 and child maltreatment related fatalities. The State

25 task force shall include—
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1 ‘‘(A) individuals representing the law en2 forcement community;

3 ‘‘(B) judges and attorneys involved in both

4 civil and criminal court proceedings related to

5 child abuse and neglect (including individuals

6 involved with the defense as well as the prosecu7 tion of such cases);

8 ‘‘(C) child advocates, including both attor9 neys for children and, where such programs are

10 in operation, court appointed special advocates;

11 ‘‘(D) health and mental health profes12 sionals;

13 ‘‘(E) individuals representing child protec14 tive service agencies;

15 ‘‘(F) individuals experienced in working

16 with children with disabilities;

17 ‘‘(G) parents; and

18 ‘‘(H) representatives of parents’ groups.

19 ‘‘(2) EXISTING TASK FORCE.—As determined

20 by the Secretary, a State commission or task force

21 established after January 1, 1983, with substantially

22 comparable membership and functions, may be con23 sidered the State task force for purposes of this sub24 section.
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1 ‘‘(d) STATE TASK FORCE STUDY.—Before a State

2 receives assistance under this section, and at 3–year inter3 vals thereafter, the State task force shall comprehen4 sively—

5 ‘‘(1) review and evaluate State investigative, ad6 ministrative and both civil and criminal judicial han7 dling of cases of child abuse and neglect, particularly

8 child sexual abuse and exploitation, as well as cases

9 involving suspected child maltreatment related fatali10 ties and cases involving a potential combination of

11 jurisdictions, such as interstate, Federal-State, and

12 State-Tribal; and

13 ‘‘(2) make policy and training recommendations

14 in each of the categories described in subsection (e).

15 The task force may make such other comments and rec16 ommendations as are considered relevant and useful.

17 ‘‘(e) ADOPTION OF STATE TASK FORCE REC18 OMMENDATIONS.—

19 ‘‘(1) GENERAL RULE.—Subject to the provi20 sions of paragraph (2), before a State receives as21 sistance under this section, a State shall adopt rec22 ommendations of the State task force in each of the

23 following categories—

24 ‘‘(A) investigative, administrative, and ju25 dicial handling of cases of child abuse and ne-
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1 glect, particularly child sexual abuse and exploi2 tation, as well as cases involving suspected child

3 maltreatment related fatalities and cases involv4 ing a potential combination of jurisdictions,

5 such as interstate, Federal-State, and State6 Tribal, in a manner which reduces the addi7 tional trauma to the child victim and the vic8 tim’s family and which also ensures procedural

9 fairness to the accused;

10 ‘‘(B) experimental, model and demonstra11 tion programs for testing innovative approaches

12 and techniques which may improve the prompt

13 and successful resolution of civil and criminal

14 court proceedings or enhance the effectiveness

15 of judicial and administrative action in child

16 abuse and neglect cases, particularly child sex17 ual abuse and exploitation cases, including the

18 enhancement of performance of court-appointed

19 attorneys and guardians ad litem for children;

20 and

21 ‘‘(C) reform of State laws, ordinances, reg22 ulations, protocols and procedures to provide

23 comprehensive protection for children from

24 abuse, particularly child sexual abuse and ex-
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1 ploitation, while ensuring fairness to all affected

2 persons.

3 ‘‘(2) EXEMPTION.—As determined by the Sec4 retary, a State shall be considered to be in fulfill5 ment of the requirements of this subsection if—

6 ‘‘(A) the State adopts an alternative to the

7 recommendations of the State task force, which

8 carries out the purpose of this section, in each

9 of the categories under paragraph (1) for which

10 the State task force’s recommendations are not

11 adopted; or

12 ‘‘(B) the State is making substantial

13 progress toward adopting recommendations of

14 the State task force or a comparable alternative

15 to such recommendations.

16 ‘‘(f) FUNDS AVAILABLE.—For grants under this sec17 tion, the Secretary shall use the amount authorized by sec18 tion 1404A of the Victims of Crime Act of 1984.

19 ‘‘SEC. 303. TRANSITIONAL PROVISION.

20 ‘‘A State or other entity that has a grant, contract,

21 or cooperative agreement in effect, on the date of enact22 ment of this Act, under the Family Resource and Support

23 Program, the Community-Based Family Resource Pro24 gram, the Family Support Center Program, the Emer25 gency Child Abuse Prevention Grant Program, or the
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1 Temporary Child Care for Children with Disabilities and

2 Crisis Nurseries Programs shall continue to receive funds

3 under such grant, contract, or cooperative agreement, sub4 ject to the original terms under which such funds were

5 provided, through the end of the applicable grant, con6 tract, or agreement cycle.

7 ‘‘SEC. 304. RULE OF CONSTRUCTION.

8 ‘‘(a) IN GENERAL.—Nothing in this Act, or in part

9 B or E of title IV of the Social Security Act, shall be con10 strued—

11 ‘‘(1) as establishing a Federal requirement that

12 a parent or legal guardian provide a child any medi13 cal service or treatment against the religious beliefs

14 of the parent or legal guardian; and

15 ‘‘(2) to require that a State find, or to prohibit

16 a State from finding, abuse or neglect in cases in

17 which a parent or legal guardian relies solely or par18 tially upon spiritual means rather than medical

19 treatment, in accordance with the religious beliefs of

20 the parent or legal guardian.

21 ‘‘(b) STATE REQUIREMENT.—Notwithstanding sub22 section (a), a State shall have in place authority under

23 State law to permit the child protective service system of

24 the State to pursue any legal remedies, including the au25 thority to initiate legal proceedings in a court of competent
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1 jurisdiction, to provide medical care or treatment for a

2 child when such care or treatment is necessary to prevent

3 or remedy serious harm to the child, or to prevent the

4 withholding of medically indicated treatment from children

5 with life threatening conditions. Except with respect to the

6 withholding of medically indicated treatments from dis7 abled infants with life threatening conditions, case by case

8 determinations concerning the exercise of the authority of

9 this subsection shall be within the sole discretion of the

10 State.’’.

11 SEC. 752. REAUTHORIZATIONS.

12 (a) MISSING CHILDREN’S ASSISTANCE ACT.—Section

13 408 of the Missing Children’s Assistance Act (42 U.S.C.

14 5777) is amended—

15 (1) by striking ‘‘To’’ and inserting ‘‘(a) IN

16 GENERAL.—’’

17 (2) by striking ‘‘and 1996’’ and inserting

18 ‘‘1996, and 1997’’; and

19 (3) by adding at the end thereof the following

20 new subsection:

21 ‘‘(b) EVALUATION.—The Administrator shall use not

22 more than 5 percent of the amount appropriated for a fis23 cal year under subsection (a) to conduct an evaluation of

24 the effectiveness of the programs and activities established

25 and operated under this title.’’.
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1 (b) VICTIMS OF CHILD ABUSE ACT OF 1990.—Sec2 tion 214B of the Victims of Child Abuse Act of 1990 (42

3 U.S.C. 13004) is amended—

4 (1) in subsection (a)(2), by striking ‘‘and 1996’’

5 and inserting ‘‘1996, and 1997’’; and

6 (2) in subsection (b)(2), by striking ‘‘and

7 1996’’ and inserting ‘‘1996 and 1997’’.

8 SEC. 753. REPEALS.

9 (a) IN GENERAL.—The following provisions of law

10 are repealed:

11 (1) Title II of the Child Abuse Prevention and

12 Treatment and Adoption Reform Act of 1978 (42

13 U.S.C. 5111 et seq.).

14 (2) The Abandoned Infants Assistance Act of

15 1988 (42 U.S.C. 670 note).

16 (3) The Temporary Child Care for Children

17 with Disabilities and Crisis Nurseries Act of 1986

18 (42 U.S.C. 5117 et seq.).

19 (4) Subtitle F of title VII of the Stewart B.

20 McKinney Homeless Assistance Act (42 U.S.C.

21 11481 et seq.).

22 (b) CONFORMING AMENDMENTS.—

23 (1) RECOMMENDED LEGISLATION.—After con24 sultation with the appropriate committees of the

25 Congress and the Director of the Office of Manage-
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1 ment and Budget, the Secretary of Health and

2 Human Services shall prepare and submit to the

3 Congress a legislative proposal in the form of an im4 plementing bill containing technical and conforming

5 amendments to reflect the repeals made by this sec6 tion.

7 (2) SUBMISSION TO CONGRESS.—Not later than

8 6 months after the date of enactment of this chap9 ter, the Secretary of Health and Human Services

10 shall submit the implementing bill referred to under

11 paragraph (1).

12 TITLE VIII—CHILD CARE

13 SEC. 801. SHORT TITLE AND REFERENCES.

14 (a) SHORT TITLE.—This title may be cited as the

15 ‘‘Child Care and Development Block Grant Amendments

16 of 1996’’.

17 (b) REFERENCES.—Except as otherwise expressly

18 provided, whenever in this title an amendment or repeal

19 is expressed in terms of an amendment to, or repeal of,

20 a section or other provision, the reference shall be consid21 ered to be made to a section or other provision of the Child

22 Care and Development Block Grant Act of 1990 (42

23 U.S.C. 9858 et seq.).
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1 SEC. 802. GOALS.

2 (a) GOALS.—Section 658A (42 U.S.C. 9801 note) is

3 amended—

4 (1) in the section heading by inserting ‘‘AND

5 GOALS’’ after ‘‘TITLE’’;

6 (2) by inserting ‘‘(a) SHORT TITLE.—’’ before

7 ‘‘This’’; and

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

9 ‘‘(b) GOALS.—The goals of this subchapter are—

10 ‘‘(1) to allow each State maximum flexibility in

11 developing child care programs and policies that best

12 suit the needs of children and parents within such

13 State;

14 ‘‘(2) to promote parental choice to empower

15 working parents to make their own decisions on the

16 child care that best suits their family’s needs;

17 ‘‘(3) to encourage States to provide consumer

18 education information to help parents make in19 formed choices about child care;

20 ‘‘(4) to assist States to provide child care to

21 parents trying to achieve independence from public

22 assistance; and

23 ‘‘(5) to assist States in implementing the

24 health, safety, licensing, and registration standards

25 established in State regulations.’’.
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1 SEC. 803. AUTHORIZATION OF APPROPRIATIONS AND EN2 TITLEMENT AUTHORITY.

3 (a) IN GENERAL.—Section 658B (42 U.S.C. 9858)

4 is amended to read as follows:

5 ‘‘SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

6 ‘‘There is authorized to be appropriated to carry out

7 this subchapter $1,000,000,000 for each of the fiscal

8 years 1996 through 2002.’’.

9 (b) SOCIAL SECURITY ACT.—Part A of title IV of

10 the Social Security Act (as amended by section 103) is

11 amended—

12 (1) by redesignating section 418 as section 419;

13 and

14 (2) by inserting after section 417, the following

15 new section:

16 ‘‘SEC. 418. FUNDING FOR CHILD CARE.

17 ‘‘(a) GENERAL CHILD CARE ENTITLEMENT.—

18 ‘‘(1) GENERAL ENTITLEMENT.—Subject to the

19 amount appropriated under paragraph (3), each

20 State shall, for the purpose of providing child care

21 assistance, be entitled to payments under a grant

22 under this subsection for a fiscal year in an amount

23 equal to—

24 ‘‘(A) the sum of the total amount required

25 to be paid to the State under former section

26 403 for fiscal year 1994 or 1995 (whichever is
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1 greater) with respect to amounts expended for

2 child care under section—

3 ‘‘(i) 402(g) of this Act (as such sec4 tion was in effect before October 1, 1995);

5 and

6 ‘‘(ii) 403(i) of this Act (as so in ef7 fect); or

8 ‘‘(B) the average of the total amounts re9 quired to be paid to the State for fiscal years

10 1992 through 1994 under the sections referred

11 to in subparagraph (A);

12 whichever is greater.

13 ‘‘(2) REMAINDER.—

14 ‘‘(A) GRANTS.—The Secretary shall use

15 any amounts appropriated for a fiscal year

16 under paragraph (3), and remaining after the

17 reservation described in paragraph (4) and

18 after grants are awarded under paragraph (1),

19 to make grants to States under this paragraph.

20 ‘‘(B) AMOUNT.—Subject to subparagraph

21 (C), the amount of a grant awarded to a State

22 for a fiscal year under this paragraph shall be

23 based on the formula used for determining the

24 amount of Federal payments to the State under
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1 section 403(n) (as such section was in effect be2 fore October 1, 1995).

3 ‘‘(C) MATCHING REQUIREMENT.—The Sec4 retary shall pay to each eligible State in a fiscal

5 year an amount, under a grant under subpara6 graph (A), equal to the Federal medical assist7 ance percentage for such State for fiscal year

8 1995 (as defined in section 1905(b)) of so

9 much of the expenditures by the State for child

10 care in such year as exceed the State set-aside

11 for such State under paragraph (1)(A) for such

12 year and the amount of State expenditures in

13 fiscal year 1994 that equal the non-Federal

14 share for the programs described in subpara15 graph (A) of paragraph (1).

16 ‘‘(D) REDISTRIBUTION.—

17 ‘‘(i) IN GENERAL.—With respect to

18 any fiscal year, if the Secretary determines

19 (in accordance with clause (ii)) that

20 amounts under any grant awarded to a

21 State under this paragraph for such fiscal

22 year will not be used by such State during

23 such fiscal year for carrying out the pur24 pose for which the grant is made, the Sec25 retary shall make such amounts available
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1 in the subsequent fiscal year for carrying

2 out such purpose to 1 or more States

3 which apply for such funds to the extent

4 the Secretary determines that such States

5 will be able to use such additional amounts

6 for carrying out such purpose. Such avail7 able amounts shall be redistributed to a

8 State pursuant to section 402(i) (as such

9 section was in effect before October 1,

10 1995) by substituting ‘the number of chil11 dren residing in all States applying for

12 such funds’ for ‘the number of children re13 siding in the United States in the second

14 preceding fiscal year’.

15 ‘‘(ii) TIME OF DETERMINATION AND

16 DISTRIBUTION.—The determination of the

17 Secretary under clause (i) for a fiscal year

18 shall be made not later than the end of the

19 first quarter of the subsequent fiscal year.

20 The redistribution of amounts under clause

21 (i) shall be made as close as practicable to

22 the date on which such determination is

23 made. Any amount made available to a

24 State from an appropriation for a fiscal

25 year in accordance with this subparagraph
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1 shall, for purposes of this part, be re2 garded as part of such State’s payment (as

3 determined under this subsection) for the

4 fiscal year in which the redistribution is

5 made.

6 ‘‘(3) APPROPRIATION.—There are authorized to

7 be appropriated, and there are appropriated, to

8 carry out this section—

9 ‘‘(A) $1,967,000,000 for fiscal year 1997;

10 ‘‘(B) $2,067,000,000 for fiscal year 1998;

11 ‘‘(C) $2,167,000,000 for fiscal year 1999;

12 ‘‘(D) $2,367,000,000 for fiscal year 2000;

13 ‘‘(E) $2,567,000,000 for fiscal year 2001;

14 and

15 ‘‘(F) $2,717,000,000 for fiscal year 2002.

16 ‘‘(4) INDIAN TRIBES.—The Secretary shall re17 serve not more than 1 percent of the aggregate

18 amount appropriated to carry out this section in

19 each fiscal year for payments to Indian tribes and

20 tribal organizations.

21 ‘‘(b) USE OF FUNDS.—

22 ‘‘(1) IN GENERAL.—Amounts received by a

23 State under this section shall only be used to provide

24 child care assistance. Amounts received by a State

25 under a grant under subsection (a)(1) shall be avail-
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1 able for use by the State without fiscal year limita2 tion.

3 ‘‘(2) USE FOR CERTAIN POPULATIONS.—A

4 State shall ensure that not less than 70 percent of

5 the total amount of funds received by the State in

6 a fiscal year under this section are used to provide

7 child care assistance to families who are receiving

8 assistance under a State program under this part,

9 families who are attempting through work activities

10 to transition off of such assistance program, and

11 families who are at risk of becoming dependent on

12 such assistance program.

13 ‘‘(c) APPLICATION OF CHILD CARE AND DEVELOP14 MENT BLOCK GRANT ACT of 1990.—Notwithstanding any

15 other provision of law, amounts provided to a State under

16 this section shall be transferred to the lead agency under

17 the Child Care and Development Block Grant Act of 1990,

18 integrated by the State into the programs established by

19 the State under such Act, and be subject to requirements

20 and limitations of such Act.

21 ‘‘(d) DEFINITION.—As used in this section, the term

22 ‘State’ means each of the 50 States or the District of Co23 lumbia.’’.

24 SEC. 804. LEAD AGENCY.

25 Section 658D(b) (42 U.S.C. 9858b(b)) is amended—
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1 (1) in paragraph (1)—

2 (A) in subparagraph (A), by striking

3 ‘‘State’’ the first place that such appears and

4 inserting ‘‘governmental or nongovernmental’’;

5 and

6 (B) in subparagraph (C), by inserting

7 ‘‘with sufficient time and Statewide distribution

8 of the notice of such hearing,’’ after ‘‘hearing in

9 the State’’; and

10 (2) in paragraph (2), by striking the second

11 sentence.

12 SEC. 805. APPLICATION AND PLAN.

13 Section 658E (42 U.S.C. 9858c) is amended—

14 (1) in subsection (b)—

15 (A) by striking ‘‘implemented—’’ and all

16 that follows through ‘‘(2)’’ and inserting ‘‘im17 plemented’’; and

18 (B) by striking ‘‘for subsequent State

19 plans’’;

20 (2) in subsection (c)—

21 (A) in paragraph (2)—

22 (i) in subparagraph (A)—

23 (I) in clause (i) by striking ‘‘,

24 other than through assistance pro25 vided under paragraph (3)(C),’’; and
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1 (II) by striking ‘‘except’’ and all

2 that follows through ‘‘1992’’, and in3 serting ‘‘and provide a detailed de4 scription of the procedures the State

5 will implement to carry out the re6 quirements of this subparagraph’’;

7 (ii) in subparagraph (B)—

8 (I) by striking ‘‘Provide assur9 ances’’ and inserting ‘‘Certify’’; and

10 (II) by inserting before the pe11 riod at the end ‘‘and provide a de12 tailed description of such procedures’’;

13 (iii) in subparagraph (C)—

14 (I) by striking ‘‘Provide assur15 ances’’ and inserting ‘‘Certify’’; and

16 (II) by inserting before the pe17 riod at the end ‘‘and provide a de18 tailed description of how such record

19 is maintained and is made available’’;

20 (iv) by amending subparagraph (D) to

21 read as follows:

22 ‘‘(D) CONSUMER EDUCATION INFORMA23 TION.—Certify that the State will collect and

24 disseminate to parents of eligible children and

25 the general public, consumer education informa-
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1 tion that will promote informed child care

2 choices.’’;

3 (v) in subparagraph (E), to read as

4 follows:

5 ‘‘(E) COMPLIANCE WITH STATE LICENSING

6 REQUIREMENTS.—

7 ‘‘(i) IN GENERAL.—Certify that the

8 State has in effect licensing requirements

9 applicable to child care services provided

10 within the State, and provide a detailed de11 scription of such requirements and of how

12 such requirements are effectively enforced.

13 Nothing in the preceding sentence shall be

14 construed to require that licensing require15 ments be applied to specific types of pro16 viders of child care services.

17 ‘‘(ii) INDIAN TRIBES AND TRIBAL OR18 GANIZATIONS.—In lieu of any licensing

19 and regulatory requirements applicable

20 under State and local law, the Secretary,

21 in consultation with Indian tribes and trib22 al organizations, shall develop minimum

23 child care standards (that appropriately re24 flect tribal needs and available resources)

25 that shall be applicable to Indian tribes
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1 and tribal organization receiving assistance

2 under this subchapter.’’;

3 (vi) by striking subparagraph (F);

4 (vii) in subparagraph (G)—

5 (I) by redesignating such sub6 paragraph as subparagraph (F);

7 (II) by striking ‘‘Provide assur8 ances’’ and inserting ‘‘Certify’’; and

9 (III) by striking ‘‘as described in

10 subparagraph (F)’’; and

11 (viii) by striking subparagraphs (H),

12 (I), and (J) and inserting the following:

13 ‘‘(G) MEETING THE NEEDS OF CERTAIN

14 POPULATIONS.—Demonstrate the manner in

15 which the State will meet the specific child care

16 needs of families who are receiving assistance

17 under a State program under part A of title IV

18 of the Social Security Act, families who are at19 tempting through work activities to transition

20 off of such assistance program, and families

21 that are at risk of becoming dependent on such

22 assistance program.’’;

23 (B) in paragraph (3)—
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1 (i) in subparagraph (A), by striking

2 ‘‘(B) and (C)’’ and inserting ‘‘(B) through

3 (D)’’;

4 (ii) in subparagraph (B)—

5 (I) by striking ‘‘.—Subject to the

6 reservation contained in subparagraph

7 (C), the’’ and inserting ‘‘AND RELAT8 ED ACTIVITIES.—The’’;

9 (II) in clause (i) by striking ‘‘;

10 and’’ at the end and inserting a pe11 riod;

12 (III) by striking ‘‘for—’’ and all

13 that follows through ‘‘section

14 658E(c)(2)(A)’’ and inserting ‘‘for

15 child care services on sliding fee scale

16 basis, activities that improve the qual17 ity or availability of such services, and

18 any other activity that the State

19 deems appropriate to realize any of

20 the goals specified in paragraphs (2)

21 through (5) of section 658A(b)’’; and

22 (IV) by striking clause (ii);

23 (iii) by amending subparagraph (C) to

24 read as follows:
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1 ‘‘(C) LIMITATION ON ADMINISTRATIVE

2 COSTS.—Not more than 5 percent of the aggre3 gate amount of funds available to the State to

4 carry out this subchapter by a State in each fis5 cal year may be expended for administrative

6 costs incurred by such State to carry out all of

7 its functions and duties under this subchapter.

8 As used in the preceding sentence, the term

9 ‘administrative costs’ shall not include the costs

10 of providing direct services.’’; and

11 (iv) by adding at the end thereof the

12 following:

13 ‘‘(D) ASSISTANCE FOR CERTAIN FAMI14 LIES.—A State shall ensure that a substantial

15 portion of the amounts available (after the

16 State has complied with the requirement of sec17 tion 418(b)(2) of the Social Security Act with

18 respect to each of the fiscal years 1997 through

19 2002) to the State to carry out activities under

20 this subchapter in each fiscal year is used to

21 provide assistance to low-income working fami22 lies other than families described in paragraph

23 (2)(F).’’; and

24 (C) in paragraph (4)(A)—
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1 (i) by striking ‘‘provide assurances’’

2 and inserting ‘‘certify’’;

3 (ii) in the first sentence by inserting

4 ‘‘and shall provide a summary of the facts

5 relied on by the State to determine that

6 such rates are sufficient to ensure such ac7 cess’’ before the period; and

8 (iii) by striking the last sentence.

9 SEC. 806. LIMITATION ON STATE ALLOTMENTS.

10 Section 658F(b) (42 U.S.C. 9858d(b)) is amended—

11 (1) in paragraph (1), by striking ‘‘No’’ and in12 serting ‘‘Except as provided for in section

13 658O(c)(6), no’’; and

14 (2) in paragraph (2), by striking ‘‘referred to in

15 section 658E(c)(2)(F)’’.

16 SEC. 807. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD

17 CARE.

18 Section 658G (42 U.S.C. 9858e) is amended to read

19 as follows:

20 ‘‘SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF

21 CHILD CARE.

22 ‘‘A State that receives funds to carry out this sub23 chapter for a fiscal year, shall use not less than 3 percent

24 of the amount of such funds for activities that are de25 signed to provide comprehensive consumer education to
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1 parents and the public, activities that increase parental

2 choice, and activities designed to improve the quality and

3 availability of child care (such as resource and referral

4 services).’’.

5 SEC. 808. REPEAL OF EARLY CHILDHOOD DEVELOPMENT

6 AND BEFORE- AND AFTER-SCHOOL CARE RE7 QUIREMENT.

8 Section 658H (42 U.S.C. 9858f) is repealed.

9 SEC. 809. ADMINISTRATION AND ENFORCEMENT.

10 Section 658I(b) (42 U.S.C. 9858g(b)) is amended—

11 (1) in paragraph (1), by striking ‘‘, and shall

12 have’’ and all that follows through ‘‘(2)’’; and

13 (2) in the matter following clause (ii) of para14 graph (2)(A), by striking ‘‘finding and that’’ and all

15 that follows through the period and inserting ‘‘find16 ing and shall require that the State reimburse the

17 Secretary for any funds that were improperly ex18 pended for purposes prohibited or not authorized by

19 this subchapter, that the Secretary deduct from the

20 administrative portion of the State allotment for the

21 following fiscal year an amount that is less than or

22 equal to any improperly expended funds, or a com23 bination of such options.’’.
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1 SEC. 810. PAYMENTS.

2 Section 658J(c) (42 U.S.C. 9858h(c)) is amended by

3 striking ‘‘expended’’ and inserting ‘‘obligated’’.

4 SEC. 811. ANNUAL REPORT AND AUDITS.

5 Section 658K (42 U.S.C. 9858i) is amended—

6 (1) in the section heading by striking ‘‘ANNUAL

7 REPORT’’ and inserting ‘‘REPORTS’’;

8 (2) in subsection (a), to read as follows:

9 ‘‘(a) REPORTS.—

10 ‘‘(1) COLLECTION OF INFORMATION BY

11 STATES.—

12 ‘‘(A) IN GENERAL.—A State that receives

13 funds to carry out this subchapter shall collect

14 the information described in subparagraph (B)

15 on a monthly basis.

16 ‘‘(B) REQUIRED INFORMATION.—The in17 formation required under this subparagraph

18 shall include, with respect to a family unit re19 ceiving assistance under this subchapter infor20 mation concerning—

21 ‘‘(i) family income;

22 ‘‘(ii) county of residence;

23 ‘‘(iii) the gender, race, and age of

24 children receiving such assistance;

25 ‘‘(iv) whether the family includes only

26 1 parent;
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1 ‘‘(v) the sources of family income, in2 cluding the amount obtained from (and

3 separately identified)—

4 ‘‘(I) employment, including self5 employment;

6 ‘‘(II) cash or other assistance

7 under part A of title IV of the Social

8 Security Act;

9 ‘‘(III) housing assistance;

10 ‘‘(IV) assistance under the Food

11 Stamp Act of 1977; and

12 ‘‘(V) other assistance programs;

13 ‘‘(vi) the number of months the family

14 has received benefits;

15 ‘‘(vii) the type of child care in which

16 the child was enrolled (such as family child

17 care, home care, or center-based child

18 care);

19 ‘‘(viii) whether the child care provider

20 involved was a relative;

21 ‘‘(ix) the cost of child care for such

22 families; and

23 ‘‘(x) the average hours per week of

24 such care;
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1 during the period for which such information is

2 required to be submitted.

3 ‘‘(C) SUBMISSION TO SECRETARY.—A

4 State described in subparagraph (A) shall, on a

5 quarterly basis, submit the information required

6 to be collected under subparagraph (B) to the

7 Secretary.

8 ‘‘(D) SAMPLING.—The Secretary may dis9 approve the information collected by a State

10 under this paragraph if the State uses sampling

11 methods to collect such information.

12 ‘‘(2) BIANNUAL REPORTS.—Not later than De13 cember 31, 1997, and every 6 months thereafter, a

14 State described in paragraph (1)(A) shall prepare

15 and submit to the Secretary a report that includes

16 aggregate data concerning—

17 ‘‘(A) the number of child care providers

18 that received funding under this subchapter as

19 separately identified based on the types of pro20 viders listed in section 658P(5);

21 ‘‘(B) the monthly cost of child care serv22 ices, and the portion of such cost that is paid

23 for with assistance provided under this sub24 chapter, listed by the type of child care services

25 provided;
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1 ‘‘(C) the number of payments made by the

2 State through vouchers, contracts, cash, and

3 disregards under public benefit programs, listed

4 by the type of child care services provided;

5 ‘‘(D) the manner in which consumer edu6 cation information was provided to parents and

7 the number of parents to whom such informa8 tion was provided; and

9 ‘‘(E) the total number (without duplica10 tion) of children and families served under this

11 subchapter;

12 during the period for which such report is required

13 to be submitted.’’; and

14 (2) in subsection (b)—

15 (A) in paragraph (1) by striking ‘‘a appli16 cation’’ and inserting ‘‘an application’’;

17 (B) in paragraph (2) by striking ‘‘any

18 agency administering activities that receive’’

19 and inserting ‘‘the State that receives’’; and

20 (C) in paragraph (4) by striking ‘‘entitles’’

21 and inserting ‘‘entitled’’.

22 SEC. 812. REPORT BY THE SECRETARY.

23 Section 658L (42 U.S.C. 9858j) is amended—

24 (1) by striking ‘‘1993’’ and inserting ‘‘1997’’;
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1 (2) by striking ‘‘annually’’ and inserting ‘‘bien2 nially’’; and

3 (3) by striking ‘‘Education and Labor’’ and in4 serting ‘‘Economic and Educational Opportunities’’.

5 SEC. 813. ALLOTMENTS.

6 Section 658O (42 U.S.C. 9858m) is amended—

7 (1) in subsection (a)—

8 (A) in paragraph (1)

9 (i) by striking ‘‘POSSESSIONS’’ and in10 serting ‘‘POSSESSIONS’’;

11 (ii) by inserting ‘‘and’’ after

12 ‘‘States,’’; and

13 (iii) by striking ‘‘, and the Trust Ter14 ritory of the Pacific Islands’’; and

15 (B) in paragraph (2), by striking ‘‘3 per16 cent’’ and inserting ‘‘1 percent’’;

17 (2) in subsection (c)—

18 (A) in paragraph (5) by striking ‘‘our’’ and

19 inserting ‘‘out’’; and

20 (B) by adding at the end thereof the fol21 lowing new paragraph:

22 ‘‘(6) CONSTRUCTION OR RENOVATION OF FA23 CILITIES.—

24 ‘‘(A) REQUEST FOR USE OF FUNDS.—An

25 Indian tribe or tribal organization may submit
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1 to the Secretary a request to use amounts pro2 vided under this subsection for construction or

3 renovation purposes.

4 ‘‘(B) DETERMINATION.—With respect to a

5 request submitted under subparagraph (A), and

6 except as provided in subparagraph (C), upon a

7 determination by the Secretary that adequate

8 facilities are not otherwise available to an In9 dian tribe or tribal organization to enable such

10 tribe or organization to carry out child care

11 programs in accordance with this subchapter,

12 and that the lack of such facilities will inhibit

13 the operation of such programs in the future,

14 the Secretary may permit the tribe or organiza15 tion to use assistance provided under this sub16 section to make payments for the construction

17 or renovation of facilities that will be used to

18 carry out such programs.

19 ‘‘(C) LIMITATION.—The Secretary may not

20 permit an Indian tribe or tribal organization to

21 use amounts provided under this subsection for

22 construction or renovation if such use will re23 sult in a decrease in the level of child care serv24 ices provided by the tribe or organization as

25 compared to the level of such services provided
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1 by the tribe or organization in the fiscal year

2 preceding the year for which the determination

3 under subparagraph (A) is being made.

4 ‘‘(D) UNIFORM PROCEDURES.—The Sec5 retary shall develop and implement uniform

6 procedures for the solicitation and consideration

7 of requests under this paragraph.’’; and

8 (3) in subsection (e), by adding at the end

9 thereof the following new paragraph:

10 ‘‘(4) INDIAN TRIBES OR TRIBAL ORGANIZA11 TIONS.—Any portion of a grant or contract made to

12 an Indian tribe or tribal organization under sub13 section (c) that the Secretary determines is not

14 being used in a manner consistent with the provision

15 of this subchapter in the period for which the grant

16 or contract is made available, shall be allotted by the

17 Secretary to other tribes or organizations that have

18 submitted applications under subsection (c) in ac19 cordance with their respective needs.’’.

20 SEC. 814. DEFINITIONS.

21 Section 658P (42 U.S.C. 9858n) is amended—

22 (1) in paragraph (2), in the first sentence by

23 inserting ‘‘or as a deposit for child care services if

24 such a deposit is required of other children being
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1 cared for by the provider’’ after ‘‘child care serv2 ices’’; and

3 (2) by striking paragraph (3);

4 (3) in paragraph (4)(B), by striking ‘‘75 per5 cent’’ and inserting ‘‘85 percent’’;

6 (4) in paragraph (5)(B)—

7 (A) by inserting ‘‘great grandchild, sibling

8 (if such provider lives in a separate residence),’’

9 after ‘‘grandchild,’’;

10 (B) by striking ‘‘is registered and’’; and

11 (C) by striking ‘‘State’’ and inserting ‘‘ap12 plicable’’.

13 (5) by striking paragraph (10);

14 (6) in paragraph (13)—

15 (A) by inserting ‘‘or’’ after ‘‘Samoa,’’; and

16 (B) by striking ‘‘, and the Trust Territory

17 of the Pacific Islands’’;

18 (7) in paragraph (14)—

19 (A) by striking ‘‘The term’’ and inserting

20 the following:

21 ‘‘(A) IN GENERAL.—The term’’; and

22 (B) by adding at the end thereof the fol23 lowing new subparagraph:

24 ‘‘(B) OTHER ORGANIZATIONS.—Such term

25 includes a Native Hawaiian Organization, as
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1 defined in section 4009(4) of the Augustus F.

2 Hawkins-Robert T. Stafford Elementary and

3 Secondary School Improvement Amendments of

4 1988 (20 U.S.C. 4909(4)) and a private non5 profit organization established for the purpose

6 of serving youth who are Indians or Native Ha7 waiians.’’.

8 SEC. 815. REPEALS.

9 (a) CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP

10 ASSISTANCE ACT OF 1985.—Title VI of the Human Serv11 ices Reauthorization Act of 1986 (42 U.S.C. 10901–

12 10905) is repealed.

13 (b) STATE DEPENDENT CARE DEVELOPMENT

14 GRANTS ACT.—Subchapter E of chapter 8 of subtitle A

15 of title VI of the Omnibus Budget Reconciliation Act of

16 1981 (42 U.S.C. 9871–9877) is repealed.

17 (c) PROGRAMS OF NATIONAL SIGNIFICANCE.—Title

18 X of the Elementary and Secondary Education Act of

19 1965, as amended by Public Law 103–382 (108 Stat.

20 3809 et seq.), is amended—

21 (1) in section 10413(a) by striking paragraph

22 (4),

23 (2) in section 10963(b)(2) by striking subpara24 graph (G), and
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1 (3) in section 10974(a)(6) by striking subpara2 graph (G).

3 (d) NATIVE HAWAIIAN FAMILY-BASED EDUCATION

4 CENTERS.—Section 9205 of the Native Hawaiian Edu5 cation Act (Public Law 103–382; 108 Stat. 3794) is re6 pealed.

7 SEC. 816. EFFECTIVE DATE.

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

9 (b), this title and the amendments made by this title shall

10 take effect on October 1, 1996.

11 (b) EXCEPTION.—The amendment made by section

12 803(a) shall take effect on the date of enactment of this

13 Act.

14 TITLE IX—CHILD NUTRITION

15 PROGRAMS

16 Subtitle A—National School Lunch

17 Act

18 SEC. 901. STATE DISBURSEMENT TO SCHOOLS.

19 (a) IN GENERAL.—Section 8 of the National School

20 Lunch Act (42 U.S.C. 1757) is amended—

21 (1) in the third sentence, by striking ‘‘Nothing’’

22 and all that follows through ‘‘educational agency to’’

23 and inserting ‘‘The State educational agency may’’;

24 (2) by striking the fourth, fifth, and eighth sen25 tences;
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1 (3) by redesignating the first through sixth sen2 tences, as amended by paragraph (1), as subsections

3 (a) through (f), respectively;

4 (4) in subsection (b), as redesignated by para5 graph (3), by striking ‘‘the preceding sentence’’ and

6 inserting ‘‘subsection (a)’’; and

7 (5) in subsection (d), as redesignated by para8 graph (3), by striking ‘‘Such food costs’’ and insert9 ing ‘‘Use of funds paid to States’’.

10 (b) DEFINITION OF CHILD.—Section 12(d) of the Act

11 (42 U.S.C. 1760(d)) is amended by adding at the end the

12 following:

13 ‘‘(9) ‘child’ includes an individual, regardless of

14 age, who—

15 ‘‘(A) is determined by a State educational

16 agency, in accordance with regulations pre17 scribed by the Secretary, to have 1 or more

18 mental or physical disabilities; and

19 ‘‘(B) is attending any institution, as de20 fined in section 17(a), or any nonresidential

21 public or nonprofit private school of high school

22 grade or under, for the purpose of participating

23 in a school program established for individuals

24 with mental or physical disabilities.
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1 No institution that is not otherwise eligible to par2 ticipate in the program under section 17 shall be

3 considered eligible because of this paragraph.’’.

4 SEC. 902. NUTRITIONAL AND OTHER PROGRAM REQUIRE5 MENTS.

6 (a) NUTRITIONAL STANDARDS.—Section 9(a) of the

7 National School Lunch Act (42 U.S.C. 1758(a)) is amend8 ed—

9 (1) in paragraph (2)—

10 (A) by striking ‘‘(2)(A) Lunches’’ and in11 serting ‘‘(2) Lunches’’;

12 (B) by striking subparagraph (B); and

13 (C) by redesignating clauses (i) and (ii) as

14 subparagraphs (A) and (B), respectively;

15 (2) by striking paragraph (3); and

16 (3) by redesignating paragraph (4) as para17 graph (3).

18 (b) ELIGIBILITY GUIDELINES.—Section 9(b) of the

19 Act is amended—

20 (1) in paragraph (2)—

21 (A) by striking subparagraph (A); and

22 (B) by redesignating subparagraphs (B)

23 and (C) as subparagraphs (A) and (B), respec24 tively;
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1 (2) in paragraph (5), by striking the third sen2 tence; and

3 (3) in paragraph (6), by striking ‘‘paragraph

4 (2)(C)’’ and inserting ‘‘paragraph (2)(B)’’.

5 (c) UTILIZATION OF AGRICULTURAL COMMOD6 ITIES.—Section 9(c) of the Act is amended by striking the

7 second, fourth, and sixth sentences.

8 (d) CONFORMING AMENDMENT.—The last sentence

9 of section 9(d)(1) of the Act is amended by striking ‘‘sub10 section (b)(2)(C)’’ and inserting ‘‘subsection (b)(2)(B)’’.

11 (e) NUTRITIONAL INFORMATION.—Section 9(f) of the

12 Act is amended—

13 (1) by striking paragraph (1);

14 (2) by striking ‘‘(2)’’;

15 (3) by redesignating subparagraphs (A) through

16 (D) as paragraphs (1) through (4), respectively;

17 (4) by striking paragraph (1), as redesignated

18 by paragraph (3), and inserting the following:

19 ‘‘(1) NUTRITIONAL REQUIREMENTS.—Except as

20 provided in paragraph (2), not later than the first

21 day of the 1996–1997 school year, schools that are

22 participating in the school lunch or school breakfast

23 program shall serve lunches and breakfasts under

24 the program that—
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1 ‘‘(A) are consistent with the goals of the

2 most recent Dietary Guidelines for Americans

3 published under section 301 of the National

4 Nutrition Monitoring and Related Research Act

5 of 1990 (7 U.S.C. 5341); and

6 ‘‘(B) provide, on the average over each

7 week, at least—

‘‘(i) with respect to school lunches, 1 8 ⁄3

9 of the daily recommended dietary allow10 ance established by the Food and Nutrition

11 Board of the National Research Council of

12 the National Academy of Sciences; and

13 ‘‘(ii) with respect to school breakfasts,

1 14 ⁄4 of the daily recommended dietary allow15 ance established by the Food and Nutrition

16 Board of the National Research Council of

17 the National Academy of Sciences.’’;

18 (5) in paragraph (3), as redesignated by para19 graph (3)—

20 (A) by redesignating clauses (i) and (ii) as

21 subparagraphs (A) and (B), respectively; and

22 (B) in subparagraph (A), as so redesig23 nated, by redesignating subclauses (I) and (II)

24 as clauses (i) and (ii), respectively; and
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1 (6) in paragraph (4), as redesignated by para2 graph (3), by striking ‘‘subparagraph (C)’’ and in3 serting ‘‘paragraph (3)’’.

4 (f) USE OF RESOURCES.—Section 9 of the Act is

5 amended by striking subsection (h).

6 SEC. 903. FREE AND REDUCED PRICE POLICY STATEMENT.

7 Section 9(b)(2) of the National School Lunch Act (42

8 U.S.C. 1758(b)(2)), as amended by section 902(b)(1), is

9 further amended by adding at the end the following:

10 ‘‘(C) FREE AND REDUCED PRICE POLICY

11 STATEMENT.—After the initial submission, a

12 school shall not be required to submit a free

13 and reduced price policy statement to a State

14 educational agency under this Act unless there

15 is a substantive change in the free and reduced

16 price policy of the school. A routine change in

17 the policy of a school, such as an annual adjust18 ment of the income eligibility guidelines for free

19 and reduced price meals, shall not be sufficient

20 cause for requiring the school to submit a policy

21 statement.’’.

22 SEC. 904. SPECIAL ASSISTANCE.

23 (a) FINANCING BASED ON NEED.—Section 11(b) of

24 the National School Lunch Act (42 U.S.C. 1759a(b)) is

25 amended—
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1 (1) in the second sentence, by striking ‘‘, with2 in’’ and all that follows through ‘‘all States,’’; and

3 (2) by striking the third sentence.

4 (b) APPLICABILITY OF OTHER PROVISIONS.—Section

5 11 of the Act is amended—

6 (1) by striking subsection (d);

7 (2) in subsection (e)(2)—

8 (A) by striking ‘‘The’’ and inserting ‘‘On

9 request of the Secretary, the’’; and

10 (B) by striking ‘‘each month’’; and

11 (3) by redesignating subsections (e) and (f), as

12 so amended, as subsections (d) and (e), respectively.

13 SEC. 905. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

14 (a) ACCOUNTS AND RECORDS.—Section 12(a) of the

15 National School Lunch Act (42 U.S.C. 1760(a)) is amend16 ed by striking ‘‘at all times be available’’ and inserting

17 ‘‘be available at any reasonable time’’.

18 (b) RESTRICTION ON REQUIREMENTS.—Section

19 12(c) of the Act is amended by striking ‘‘neither the Sec20 retary nor the State shall’’ and inserting ‘‘the Secretary

21 shall not’’.

22 (c) DEFINITIONS.—Section 12(d) of the Act, as

23 amended by section 901(b), is further amended—
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1 (1) in paragraph (1), by striking ‘‘the Trust

2 Territory of the Pacific Islands’’ and inserting ‘‘the

3 Commonwealth of the Northern Mariana Islands’’;

4 (2) by striking paragraphs (3) and (4); and

5 (3) by redesignating paragraphs (1), (2), and

6 (5) through (9) as paragraphs (6), (7), (3), (4), (2),

7 (5), and (1), respectively, and rearranging the para8 graphs so as to appear in numerical order.

9 (d) ADJUSTMENTS TO NATIONAL AVERAGE PAY10 MENT RATES.—Section 12(f) of the Act is amended by

11 striking ‘‘the Trust Territory of the Pacific Islands,’’.

12 (e) EXPEDITED RULEMAKING.—Section 12(k) of the

13 Act is

14 amended—

15 (1) by striking paragraphs (1), (2), and (5);

16 and

17 (2) by redesignating paragraphs (3) and (4) as

18 paragraphs (1) and (2), respectively.

19 (f) WAIVER.—Section 12(l) of the Act is amended—

20 (1) in paragraph (2)—

21 (A) by striking ‘‘(A)’’;

22 (B) in clause (iii), by adding ‘‘and’’ at the

23 end;

24 (C) in clause (iv), by striking the semicolon

25 at the end and inserting a period;
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1 (D) by striking clauses (v) through (vii);

2 (E) by striking subparagraph (B); and

3 (F) by redesignating clauses (i) through

4 (iv), as so amended, as subparagraphs (A)

5 through (D), respectively;

6 (2) in paragraph (3)—

7 (A) by striking ‘‘(A)’’; and

8 (B) by striking subparagraphs (B) through

9 (D);

10 (3) in paragraph (4)—

11 (A) in the matter preceding subparagraph

12 (A), by striking ‘‘of any requirement relating’’

13 and inserting ‘‘that increases Federal costs or

14 that relates’’;

15 (B) by striking subparagraphs (B), (D),

16 (F), (H), (J), (K), and (L);

17 (C) by redesignating subparagraphs (C),

18 (E), (G), (I), (M), and (N) as subparagraphs

19 (B) through (G), respectively; and

20 (D) in subparagraph (F), as redesignated

21 by subparagraph (C), by striking ‘‘and’’ at the

22 end and inserting ‘‘or’’; and

23 (4) in paragraph (6)—

24 (A) by striking ‘‘(A)(i)’’ and all that fol25 lows through ‘‘(B)’’; and
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1 (B) by redesignating clauses (i) through

2 (iv) as subparagraphs (A) through (D), respec3 tively.

4 (g) FOOD AND NUTRITION PROJECTS.—Section 12

5 of the Act is amended by striking subsection (m).

6 SEC. 906. SUMMER FOOD SERVICE PROGRAM FOR CHIL7 DREN.

8 (a) ESTABLISHMENT OF PROGRAM.—Section 13(a)

9 of the National School Lunch Act (42 U.S.C. 1761(a))

10 is amended—

11 (1) in paragraph (1)—

12 (A) in the first sentence, by striking ‘‘initi13 ate, maintain, and expand’’ and inserting ‘‘initi14 ate and maintain’’; and

15 (B) in subparagraph (E) of the second

16 sentence, by striking ‘‘the Trust Territory of

17 the Pacific Islands,’’; and

18 (2) in paragraph (7)(A), by striking ‘‘Except as

19 provided in subparagraph (C), private’’ and inserting

20 ‘‘Private’’.

21 (b) SERVICE INSTITUTIONS.—Section 13(b) of the

22 Act is amended by striking ‘‘(b)(1)’’ and all that follows

23 through the end of paragraph (1) and inserting the follow24 ing:

25 ‘‘(b) SERVICE INSTITUTIONS.—
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1 ‘‘(1) PAYMENTS.—

2 ‘‘(A) IN GENERAL.—Except as otherwise

3 provided in this paragraph, payments to service

4 institutions shall equal the full cost of food

5 service operations (which cost shall include the

6 costs of obtaining, preparing, and serving food,

7 but shall not include administrative costs).

8 ‘‘(B) MAXIMUM AMOUNTS.—Subject to

9 subparagraph (C), payments to any institution

10 under subparagraph (A) shall not exceed—

11 ‘‘(i) $1.82 for each lunch and supper

12 served;

13 ‘‘(ii) $1.13 for each breakfast served;

14 and

15 ‘‘(iii) 46 cents for each meal supple16 ment served.

17 ‘‘(C) ADJUSTMENTS.—Amounts specified

18 in subparagraph (B) shall be adjusted on Janu19 ary 1, 1997, and each January 1 thereafter, to

20 the nearest lower cent increment in accordance

21 with the changes for the 12-month period end22 ing the preceding November 30 in the series for

23 food away from home of the Consumer Price

24 Index for All Urban Consumers published by

25 the Bureau of Labor Statistics of the Depart-
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1 ment of Labor. Each adjustment shall be based

2 on the unrounded adjustment for the prior 12-

3 month period.’’.

4 (c) ADMINISTRATION OF SERVICE INSTITUTIONS.—

5 Section 13(b)(2) of the Act is amended—

6 (1) in the first sentence, by striking ‘‘four

7 meals’’ and inserting ‘‘3 meals, or 2 meals and 1

8 supplement,’’; and

9 (2) by striking the second sentence.

10 (d) REIMBURSEMENTS.—Section 13(c)(2) of the Act

11 is amended—

12 (1) by striking subparagraph (A);

13 (2) in subparagraph (B)—

14 (A) in the first sentence—

15 (i) by striking ‘‘, and such higher edu16 cation institutions,’’; and

17 (ii) by striking ‘‘without application’’

18 and inserting ‘‘upon showing residence in

19 areas in which poor economic conditions

20 exist or on the basis of income eligibility

21 statements for children enrolled in the pro22 gram’’; and

23 (B) by adding at the end the following:

24 ‘‘The higher education institutions referred to

25 in the preceding sentence shall be eligible to
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1 participate in the program under this para2 graph without application.’’;

3 (3) in subparagraph (C)(ii), by striking ‘‘severe

4 need’’; and

5 (4) by redesignating subparagraphs (B)

6 through (E), as so amended, as subparagraphs (A)

7 through (D), respectively.

8 (e) ADVANCE PROGRAM PAYMENTS.—Section

9 13(e)(1) of the Act is amended—

10 (1) by striking ‘‘institution: Provided, That (A)

11 the’’ and inserting ‘‘institution. The’’;

12 (2) by inserting ‘‘(excluding a school)’’ after

13 ‘‘any service institution’’; and

14 (3) by striking ‘‘responsibilities, and (B) no’’

15 and inserting ‘‘responsibilities. No’’.

16 (f) FOOD REQUIREMENTS.—Section 13(f) of the Act

17 is amended—

18 (1) by redesignating the first through seventh

19 sentences as paragraphs (1) through (7), respec20 tively;

21 (2) by striking paragraph (3), as redesignated

22 by paragraph (1);

23 (3) in paragraph (4), as redesignated by para24 graph (1), by striking ‘‘the first sentence’’ and in25 serting ‘‘paragraph (1)’’;
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1 (4) in paragraph (6), as redesignated by para2 graph (1), by striking ‘‘that bacteria levels’’ and all

3 that follows through the period at the end and in4 serting ‘‘conformance with standards set by local

5 health authorities.’’; and

6 (5) by redesignating paragraphs (4) through

7 (7), as redesignated by paragraph (1), as para8 graphs (3) through (6), respectively.

9 (g) PERMITTING OFFER VERSUS SERVE.—Section

10 13(f) of the Act, as amended by subsection (f), is further

11 amended by adding at the end the following:

12 ‘‘(7) OFFER VERSUS SERVE.—A school food au13 thority participating as a service institution may

14 permit a child attending a site on school premises

15 operated directly by the authority to refuse not more

16 than 1 item of a meal that the child does not intend

17 to consume. A refusal of an offered food item shall

18 not affect the amount of payments made under this

19 section to a school for the meal.’’.

20 (h) HEALTH DEPARTMENT INSPECTIONS.—Section

21 13(k) of the Act is amended by striking paragraph (3).

22 (i) FOOD SERVICE MANAGEMENT COMPANIES.—Sec23 tion 13(l) of the Act is amended—

24 (1) by striking paragraph (4);
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1 (2) in paragraph (5), by striking the first sen2 tence; and

3 (3) by redesignating paragraph (5), as so

4 amended, as paragraph (4).

5 (j) RECORDS.—The second sentence of section 13(m)

6 of the Act is amended by striking ‘‘at all times be avail7 able’’ and inserting ‘‘be available at any reasonable time’’.

8 (k) REMOVING MANDATORY NOTICE TO INSTITU9 TIONS.—Section 13(n)(2) of the Act is amended by strik10 ing ‘‘, and its plans and schedule for informing service

11 institutions of the availability of the program’’.

12 (l) PLAN.—Section 13(n) of the Act is amended—

13 (1) in paragraph (2), by striking ‘‘including the

14 State’s methods of assessing need’’;

15 (2) by striking paragraph (3);

16 (3) in paragraph (4), by striking ‘‘and sched17 ule’’; and

18 (4) by redesignating paragraphs (4) through

19 (7), as so amended, as paragraphs (3) through (6),

20 respectively.

21 (m) MONITORING AND TRAINING.—Section 13(q) of

22 the Act is amended—

23 (1) by striking paragraphs (2) and (4);
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1 (2) in paragraph (3), by striking ‘‘paragraphs

2 (1) and (2) of this subsection’’ and inserting ‘‘para3 graph (1)’’; and

4 (3) by redesignating paragraph (3), as so

5 amended, as paragraph (2).

6 (n) EXPIRED PROGRAM.—Section 13 of the Act is

7 amended—

8 (1) by striking subsection (p); and

9 (2) by redesignating subsections (q) and (r), as

10 so amended, as subsections (p) and (q), respectively.

11 (o) EFFECTIVE DATE.—The amendments made by

12 subsection (b) shall become effective on January 1, 1997.

13 SEC. 907. COMMODITY DISTRIBUTION.

14 (a) CEREAL AND SHORTENING IN COMMODITY DO15 NATIONS.—Section 14(b) of the National School Lunch

16 Act (42 U.S.C. 1762a(b)) is amended—

17 (1) by striking paragraph (1); and

18 (2) by redesignating paragraphs (2) and (3) as

19 paragraphs (1) and (2), respectively.

20 (b) IMPACT STUDY AND PURCHASING PROCE21 DURES.—Section 14(d) of the Act is amended by striking

22 the second and third sentences.

23 (c) CASH COMPENSATION FOR PILOT PROJECT

24 SCHOOLS.—Section 14(g) of the Act is amended by strik25 ing paragraph (3).
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1 (d) STATE ADVISORY COUNCIL.—Section 14 is

2 amended—

3 (1) by striking subsection (e); and

4 (2) by redesignating subsections (f) and (g), as

5 so amended, as subsections (e) and (f), respectively.

6 SEC. 908. CHILD CARE FOOD PROGRAM.

7 (a) ESTABLISHMENT OF PROGRAM.—Section 17 of

8 the National School Lunch Act (42 U.S.C. 1766) is

9 amended—

10 (1) in the section heading, by striking ‘‘AND

11 ADULT’’; and

12 (2) in the first sentence of subsection (a), by

13 striking ‘‘initiate, maintain, and expand’’ and insert14 ing ‘‘initiate and maintain’’.

15 (b) PAYMENTS TO SPONSOR EMPLOYEES.—Para16 graph (2) of the last sentence of section 17(a) of the Act

17 (42 U.S.C. 1766(a)) is amended—

18 (1) by striking ‘‘and’’ at the end of subpara19 graph (B);

20 (2) by striking the period at the end of sub21 paragraph (C) and inserting ‘‘; and’’; and

22 (3) by adding at the end the following:

23 ‘‘(D) in the case of a family or group day

24 care home sponsoring organization that employs

25 more than 1 employee, the organization does
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1 not base payments to an employee of the orga2 nization on the number of family or group day

3 care homes recruited.’’.

4 (c) TECHNICAL ASSISTANCE.—The last sentence of

5 section 17(d)(1) of the Act is amended by striking ‘‘, and

6 shall provide technical assistance’’ and all that follows

7 through ‘‘its application’’.

8 (d) REIMBURSEMENT OF CHILD CARE INSTITU9 TIONS.—Section 17(f)(2)(B) of the Act (42 U.S.C.

10 1766(f)(2)(B)) is amended by striking ‘‘two meals and two

11 supplements or three meals and one supplement’’ and in12 serting ‘‘two meals and one supplement’’.

13 (e) IMPROVED TARGETING OF DAY CARE HOME RE14 IMBURSEMENTS.—

15 (1) RESTRUCTURED DAY CARE HOME REIM16 BURSEMENTS.—Section 17(f)(3) of the Act is

17 amended by striking ‘‘(3)(A) Institutions’’ and all

18 that follows through the end of subparagraph (A)

19 and inserting the following:

20 ‘‘(3) REIMBURSEMENT OF FAMILY OR GROUP

21 DAY CARE HOME SPONSORING ORGANIZATIONS.—

22 ‘‘(A) REIMBURSEMENT FACTOR.—

23 ‘‘(i) IN GENERAL.—An institution

24 that participates in the program under this

25 section as a family or group day care home
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1 sponsoring organization shall be provided,

2 for payment to a home sponsored by the

3 organization, reimbursement factors in ac4 cordance with this subparagraph for the

5 cost of obtaining and preparing food and

6 prescribed labor costs involved in providing

7 meals under this section.

8 ‘‘(ii) TIER I FAMILY OR GROUP DAY

9 CARE HOMES.—

10 ‘‘(I) DEFINITION.—In this para11 graph, the term ‘tier I family or group

12 day care home’ means—

13 ‘‘(aa) a family or group day

14 care home that is located in a ge15 ographic area, as defined by the

16 Secretary based on census data,

17 in which at least 50 percent of

18 the children residing in the area

19 are members of households whose

20 incomes meet the income eligi21 bility guidelines for free or re22 duced price meals under section

23 9;

24 ‘‘(bb) a family or group day

25 care home that is located in an
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1 area served by a school enrolling

2 elementary students in which at

3 least 50 percent of the total num4 ber of children enrolled are cer5 tified eligible to receive free or

6 reduced price school meals under

7 this Act or the Child Nutrition

8 Act of 1966 (42 U.S.C. 1771 et

9 seq.); or

10 ‘‘(cc) a family or group day

11 care home that is operated by a

12 provider whose household meets

13 the income eligibility guidelines

14 for free or reduced price meals

15 under section 9 and whose in16 come is verified by the sponsor17 ing or organization of the home

18 under regulations established by

19 the Secretary.

20 ‘‘(II) REIMBURSEMENT.—Except

21 as provided in subclause (III), a tier

22 I family or group day care home shall

23 be provided reimbursement factors

24 under this clause without a require25 ment for documentation of the costs
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1 described in clause (i), except that re2 imbursement shall not be provided

3 under this subclause for meals or sup4 plements served to the children of a

5 person acting as a family or group

6 day care home provider unless the

7 children meet the income eligibility

8 guidelines for free or reduced price

9 meals under section 9.

10 ‘‘(III) FACTORS.—Except as pro11 vided in subclause (IV), the reim12 bursement factors applied to a home

13 referred to in subclause (II) shall be

14 the factors in effect on July 1, 1996.

15 ‘‘(IV) ADJUSTMENTS.—The re16 imbursement factors under this sub17 paragraph shall be adjusted on July

18 1, 1997, and each July 1 thereafter,

19 to reflect changes in the Consumer

20 Price Index for food at home for the

21 most recent 12-month period for

22 which the data are available. The re23 imbursement factors under this sub24 paragraph shall be rounded to the

25 nearest lower cent increment and
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1 based on the unrounded adjustment in

2 effect on June 30 of the preceding

3 school year.

4 ‘‘(iii) TIER II FAMILY OR GROUP DAY

5 CARE HOMES.—

6 ‘‘(I) IN GENERAL.—

7 ‘‘(aa) FACTORS.—Except as

8 provided in subclause (II), with

9 respect to meals or supplements

10 served under this clause by a

11 family or group day care home

12 that does not meet the criteria

13 set forth in clause (ii)(I), the re14 imbursement factors shall be 90

15 cents for lunches and suppers, 25

16 cents for breakfasts, and 10

17 cents for supplements.

18 ‘‘(bb) ADJUSTMENTS.—The

19 factors shall be adjusted on July

20 1, 1997, and each July 1 there21 after, to reflect changes in the

22 Consumer Price Index for food at

23 home for the most recent 12-

24 month period for which the data

25 are available. The reimbursement
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1 factors under this item shall be

2 rounded down to the nearest

3 lower cent increment and based

4 on the unrounded adjustment for

5 the preceding 12-month period.

6 ‘‘(cc) REIMBURSEMENT.—A

7 family or group day care home

8 shall be provided reimbursement

9 factors under this subclause with10 out a requirement for docu11 mentation of the costs described

12 in clause (i), except that reim13 bursement shall not be provided

14 under this subclause for meals or

15 supplements served to the chil16 dren of a person acting as a fam17 ily or group day care home pro18 vider unless the children meet the

19 income eligibility guidelines for

20 free or reduced price meals under

21 section 9.

22 ‘‘(II) OTHER FACTORS.—A fam23 ily or group day care home that does

24 not meet the criteria set forth in

25 clause (ii)(I) may elect to be provided
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1 reimbursement factors determined in

2 accordance with the following require3 ments:

4 ‘‘(aa) CHILDREN ELIGIBLE

5 FOR FREE OR REDUCED PRICE

6 MEALS.—In the case of meals or

7 supplements served under this

8 subsection to children who are

9 members of households whose in10 comes meet the income eligibility

11 guidelines for free or reduced

12 price meals under section 9, the

13 family or group day care home

14 shall be provided reimbursement

15 factors set by the Secretary in

16 accordance with clause (ii)(III).

17 ‘‘(bb) INELIGIBLE CHIL18 DREN.—In the case of meals or

19 supplements served under this

20 subsection to children who are

21 members of households whose in22 comes do not meet the income

23 eligibility guidelines, the family

24 or group day care home shall be
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1 provided reimbursement factors

2 in accordance with subclause (I).

3 ‘‘(III) INFORMATION AND DE4 TERMINATIONS.—

5 ‘‘(aa) IN GENERAL.—If a

6 family or group day care home

7 elects to claim the factors de8 scribed in subclause (II), the

9 family or group day care home

10 sponsoring organization serving

11 the home shall collect the nec12 essary income information, as de13 termined by the Secretary, from

14 any parent or other caretaker to

15 make the determinations speci16 fied in subclause (II) and shall

17 make the determinations in ac18 cordance with rules prescribed by

19 the Secretary.

20 ‘‘(bb) CATEGORICAL ELIGI21 BILITY.—In making a determina22 tion under item (aa), a family or

23 group day care home sponsoring

24 organization may consider a child

25 participating in or subsidized
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1 under, or a child with a parent

2 participating in or subsidized

3 under, a federally or State sup4 ported child care or other benefit

5 program with an income eligi6 bility limit that does not exceed

7 the eligibility standard for free or

8 reduced price meals under section

9 9 to be a child who is a member

10 of a household whose income

11 meets the income eligibility

12 guidelines under section 9.

13 ‘‘(cc) FACTORS FOR CHIL14 DREN ONLY.—A family or group

15 day care home may elect to re16 ceive the reimbursement factors

17 prescribed under clause (ii)(III)

18 solely for the children participat19 ing in a program referred to in

20 item (bb) if the home elects not

21 to have income statements col22 lected from parents or other care23 takers.

24 ‘‘(IV) SIMPLIFIED MEAL COUNT25 ING AND REPORTING PROCEDURES.—
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1 The Secretary shall prescribe sim2 plified meal counting and reporting

3 procedures for use by a family or

4 group day care home that elects to

5 claim the factors under subclause (II)

6 and by a family or group day care

7 home sponsoring organization that

8 sponsors the home. The procedures

9 the Secretary prescribes may include

10 1 or more of the following:

11 ‘‘(aa) Setting an annual per12 centage for each home of the

13 number of meals served that are

14 to be reimbursed in accordance

15 with the reimbursement factors

16 prescribed under clause (ii)(III)

17 and an annual percentage of the

18 number of meals served that are

19 to be reimbursed in accordance

20 with the reimbursement factors

21 prescribed under subclause (I),

22 based on the family income of

23 children enrolled in the home in a

24 specified month or other period.
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1 ‘‘(bb) Placing a home into 1

2 of 2 or more reimbursement cat3 egories annually based on the

4 percentage of children in the

5 home whose households have in6 comes that meet the income eligi7 bility guidelines under section 9,

8 with each such reimbursement

9 category carrying a set of reim10 bursement factors such as the

11 factors prescribed under clause

12 (ii)(III) or subclause (I) or fac13 tors established within the range

14 of factors prescribed under clause

15 (ii)(III) and subclause (I).

16 ‘‘(cc) Such other simplified

17 procedures as the Secretary may

18 prescribe.

19 ‘‘(V) MINIMUM VERIFICATION

20 REQUIREMENTS.—The Secretary may

21 establish any necessary minimum ver22 ification requirements.’’.

23 (2) GRANTS TO STATES TO PROVIDE ASSIST24 ANCE TO FAMILY OR GROUP DAY CARE HOMES.—
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1 Section 17(f)(3) of the Act is amended by adding at

2 the end the following:

3 ‘‘(D) GRANTS TO STATES TO PROVIDE AS4 SISTANCE TO FAMILY OR GROUP DAY CARE

5 HOMES.—

6 ‘‘(i) IN GENERAL.—

7 ‘‘(I) RESERVATION.—From

8 amounts made available to carry out

9 this section, the Secretary shall re10 serve $5,000,000 of the amount made

11 available for fiscal year 1997.

12 ‘‘(II) PURPOSE.—The Secretary

13 shall use the funds made available

14 under subclause (I) to provide grants

15 to States for the purpose of provid16 ing—

17 ‘‘(aa) assistance, including

18 grants, to family and day care

19 home sponsoring organizations

20 and other appropriate organiza21 tions, in securing and providing

22 training, materials, automated

23 data processing assistance, and

24 other assistance for the staff of

25 the sponsoring organizations; and
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1 ‘‘(bb) training and other as2 sistance to family and group day

3 care homes in the implementation

4 of the amendment to subpara5 graph (A) made by section

6 908(e)(1) of the Personal Re7 sponsibility and Work Oppor8 tunity Act of 1996.

9 ‘‘(ii) ALLOCATION.—The Secretary

10 shall allocate from the funds reserved

11 under clause (i)(I)—

12 ‘‘(I) $30,000 in base funding to

13 each State; and

14 ‘‘(II) any remaining amount

15 among the States, based on the num16 ber of family day care homes partici17 pating in the program in a State dur18 ing fiscal year 1995 as a percentage

19 of the number of all family day care

20 homes participating in the program

21 during fiscal year 1995.

22 ‘‘(iii) RETENTION OF FUNDS.—Of the

23 amount of funds made available to a State

24 for fiscal year 1997 under clause (i), the

25 State may retain not to exceed 30 percent
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1 of the amount to carry out this subpara2 graph.

3 ‘‘(iv) ADDITIONAL PAYMENTS.—Any

4 payments received under this subpara5 graph shall be in addition to payments

6 that a State receives under subparagraph

7 (A).’’.

8 (3) PROVISION OF DATA.—Section 17(f)(3) of

9 the Act, as amended by paragraph (2), is further

10 amended by adding at the end the following:

11 ‘‘(E) PROVISION OF DATA TO FAMILY OR

12 GROUP DAY CARE HOME SPONSORING ORGANI13 ZATIONS.—

14 ‘‘(i) CENSUS DATA.—The Secretary

15 shall provide to each State agency admin16 istering a child care food program under

17 this section data from the most recent de18 cennial census survey or other appropriate

19 census survey for which the data are avail20 able showing which areas in the State meet

21 the requirements of subparagraph

22 (A)(ii)(I)(aa). The State agency shall pro23 vide the data to family or group day care

24 home sponsoring organizations located in

25 the State.
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1 ‘‘(ii) SCHOOL DATA.—

2 ‘‘(I) IN GENERAL.—A State

3 agency administering the school lunch

4 program under this Act or the school

5 breakfast program under the Child

6 Nutrition Act of 1966 (42 U.S.C.

7 1771 et seq.) shall provide to ap8 proved family or group day care home

9 sponsoring organizations a list of

10 schools serving elementary school chil11 dren in the State in which not less

than 1 12 ⁄2 of the children enrolled are

13 certified to receive free or reduced

14 price meals. The State agency shall

15 collect the data necessary to create

16 the list annually and provide the list

17 on a timely basis to any approved

18 family or group day care home spon19 soring organization that requests the

20 list.

21 ‘‘(II) USE OF DATA FROM PRE22 CEDING SCHOOL YEAR.—In determin23 ing for a fiscal year or other annual

24 period whether a home qualifies as a

25 tier I family or group day care home
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1 under subparagraph (A)(ii)(I), the

2 State agency administering the pro3 gram under this section, and a family

4 or group day care home sponsoring

5 organization, shall use the most cur6 rent available data at the time of the

7 determination.

8 ‘‘(iii) DURATION OF DETERMINA9 TION.—For purposes of this section, a de10 termination that a family or group day

11 care home is located in an area that quali12 fies the home as a tier I family or group

13 day care home (as the term is defined in

14 subparagraph (A)(ii)(I)), shall be in effect

15 for 3 years (unless the determination is

16 made on the basis of census data, in which

17 case the determination shall remain in ef18 fect until more recent census data are

19 available) unless the State agency deter20 mines that the area in which the home is

21 located no longer qualifies the home as a

22 tier I family or group day care home.’’.

23 (4) CONFORMING AMENDMENTS.—Section 17(c)

24 of the Act is amended by inserting ‘‘except as pro25 vided in subsection (f)(3),’’ after ‘‘For purposes of
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1 this section,’’ each place it appears in paragraphs

2 (1), (2), and (3).

3 (f) REIMBURSEMENT.—Section 17(f) of the Act is

4 amended—

5 (1) in paragraph (3)—

6 (A) in subparagraph (B), by striking the

7 third and fourth sentences; and

8 (B) in subparagraph (C)—

9 (i) in clause (i)—

10 (I) by striking ‘‘(i)’’;

11 (II) in the first sentence, by

12 striking ‘‘and expansion funds’’ and

13 all that follows through ‘‘rural areas’’;

14 (III) by striking the second sen15 tence; and

16 (IV) by striking ‘‘and expansion

17 funds’’ each place it appears; and

18 (ii) by striking clause (ii); and

19 (2) by striking paragraph (4).

20 (g) NUTRITIONAL REQUIREMENTS.—Section

21 17(g)(1) of the Act is amended—

22 (1) in subparagraph (A), by striking the second

23 sentence; and

24 (2) in subparagraph (B), by striking the second

25 sentence.
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1 (h) ELIMINATION OF STATE PAPERWORK AND OUT2 REACH BURDEN.—Section 17 of the Act is amended by

3 striking subsection (k) and inserting the following:

4 ‘‘(k) TRAINING AND TECHNICAL ASSISTANCE.—A

5 State participating in the program established under this

6 section shall provide sufficient training, technical assist7 ance, and monitoring to facilitate effective operation of the

8 program. The Secretary shall assist the State in develop9 ing plans to fulfill the requirements of this subsection.’’.

10 (i) RECORDS.—The second sentence of section 17(m)

11 of the Act is amended by striking ‘‘at all times’’ and in12 serting ‘‘at any reasonable time’’.

13 (j) MODIFICATION OF ADULT CARE FOOD PRO14 GRAM.—Section 17(o) of the Act is amended—

15 (1) in the first sentence of paragraph (1)—

16 (A) by striking ‘‘adult day care centers’’

17 and inserting ‘‘day care centers for chronically

18 impaired disabled persons’’; and

19 (B) by striking ‘‘to persons 60 years of age

20 or older or’’; and

21 (2) in paragraph (2)—

22 (A) in subparagraph (A)—

23 (i) by striking ‘‘adult day care center’’

24 and inserting ‘‘day care center for chron25 ically impaired disabled persons’’; and
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1 (ii) in clause (i)—

2 (I) by striking ‘‘adult’’;

3 (II) by striking ‘‘adults’’ and in4 serting ‘‘persons’’; and

5 (III) by striking ‘‘or persons 60

6 years of age or older’’; and

7 (B) in subparagraph (B), by striking

8 ‘‘adult day care services’’ and inserting ‘‘day

9 care services for chronically impaired disabled

10 persons’’.

11 (k) UNNEEDED PROVISION.—Section 17 of the Act

12 is amended by striking subsection (q).

13 (l) CONFORMING AMENDMENTS.—

14 (1) Section 17B(f) of the Act (42 U.S.C.

15 1766b(f)) is amended—

16 (A) in the subsection heading, by striking

17 ‘‘AND ADULT’’; and

18 (B) in paragraph (1), by striking ‘‘and

19 adult’’.

20 (2) Section 18(e)(3)(B) of the Act (42 U.S.C.

21 1769(e)(3)(B)) is amended by striking ‘‘and adult’’.

22 (3) Section 25(b)(1)(C) of the Act (42 U.S.C.

23 1769f(b)(1)(C)) is amended by striking ‘‘and adult’’.
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1 (4) Section 3(1) of the Healthy Meals for

2 Healthy Americans Act of 1994 (Public Law 103–

3 448) is amended by striking ‘‘and adult’’.

4 (m) EFFECTIVE DATE.—

5 (1) IN GENERAL.—Except as provided in para6 graph (2), the amendments made by this section

7 shall become effective on the date of enactment of

8 this Act.

9 (2) IMPROVED TARGETING OF DAY CARE HOME

10 REIMBURSEMENTS.—The amendments made by

11 paragraphs (1) and (4) of subsection (e) shall be12 come effective on July 1, 1997.

13 (3) REGULATIONS.—

14 (A) INTERIM REGULATIONS.—Not later

15 than January 1, 1997, the Secretary shall issue

16 interim regulations to implement—

17 (i) the amendments made by para18 graphs (1), (3), and (4) of subsection (e);

19 and

20 (ii) section 17(f)(3)(C) of the National

21 School Lunch Act (42 U.S.C.

22 1766(f)(3)(C)).

23 (B) FINAL REGULATIONS.—Not later than

24 July 1, 1997, the Secretary shall issue final
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1 regulations to implement the provisions of law

2 referred to in subparagraph (A).

3 (n) STUDY OF IMPACT OF AMENDMENTS ON PRO4 GRAM PARTICIPATION AND FAMILY DAY CARE LICENS5 ING.—

6 (1) IN GENERAL.—The Secretary of Agri7 culture, in conjunction with the Secretary of Health

8 and Human Services, shall study the impact of the

9 amendments made by this section on—

10 (A) the number of family day care homes

11 participating in the child care food program es12 tablished under section 17 of the National

13 School Lunch Act (42 U.S.C. 1766);

14 (B) the number of day care home sponsor15 ing organizations participating in the program;

16 (C) the number of day care homes that are

17 licensed, certified, registered, or approved by

18 each State in accordance with regulations is19 sued by the Secretary;

20 (D) the rate of growth of the numbers re21 ferred to in subparagraphs (A) through (C);

22 (E) the nutritional adequacy and quality of

23 meals served in family day care homes that—

24 (i) received reimbursement under the

25 program prior to the amendments made by
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1 this section but do not receive reimburse2 ment after the amendments made by this

3 section; or

4 (ii) received full reimbursement under

5 the program prior to the amendments

6 made by this section but do not receive full

7 reimbursement after the amendments

8 made by this section; and

9 (F) the proportion of low-income children

10 participating in the program prior to the

11 amendments made by this section and the pro12 portion of low-income children participating in

13 the program after the amendments made by

14 this section.

15 (2) REQUIRED DATA.—Each State agency par16 ticipating in the child care food program under sec17 tion 17 of the National School Lunch Act (42

18 U.S.C. 1766) shall submit to the Secretary data

19 on—

20 (A) the number of family day care homes

21 participating in the program on June 30, 1997,

22 and June 30, 1998;

23 (B) the number of family day care homes

24 licensed, certified, registered, or approved for
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1 service on June 30, 1997, and June 30, 1998;

2 and

3 (C) such other data as the Secretary may

4 require to carry out this subsection.

5 (3) SUBMISSION OF REPORT.—Not later than 2

6 years after the effective date of this section, the Sec7 retary shall submit the study required under this

8 subsection to the Committee on Economic and Edu9 cational Opportunities of the House of Representa10 tives and the Committee on Agriculture, Nutrition,

11 and Forestry of the Senate.

12 SEC. 909. PILOT PROJECTS.

13 (a) UNIVERSAL FREE PILOT.—Section 18(d) of the

14 National School Lunch Act (42 U.S.C. 1769(d)) is amend15 ed—

16 (1) by striking paragraph (3); and

17 (2) by redesignating paragraphs (4) and (5) as

18 paragraphs (3) and (4), respectively.

19 (b) DEMO PROJECT OUTSIDE SCHOOL HOURS.—Sec20 tion 18(e) of the Act is amended—

21 (1) in paragraph (1)—

22 (A) in subparagraph (A)—

23 (i) by striking ‘‘(A)’’; and

24 (ii) by striking ‘‘shall’’ and inserting

25 ‘‘may’’; and
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1 (B) by striking subparagraph (B); and

2 (2) by striking paragraph (5) and inserting the

3 following:

4 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.—

5 There are authorized to be appropriated to carry out

6 this subsection such sums as are necessary for each

7 of fiscal years 1997 and 1998.’’.

8 (c) ELIMINATING PROJECTS.—Section 18 of the Act

9 is amended—

10 (1) by striking subsections (a) and (g) through

11 (i); and

12 (2) by redesignating subsections (b) through

13 (f), as so amended, as subsections (a) through (e),

14 respectively.

15 (d) CONFORMING AMENDMENT.—Section

16 17B(d)(1)(A) of the Act (42 U.S.C. 1766b(d)(1)(A)) is

17 amended by striking ‘‘18(c)’’ and inserting ‘‘18(b)’’.

18 SEC. 910. REDUCTION OF PAPERWORK.

19 Section 19 of the National School Lunch Act (42

20 U.S.C. 1769a) is repealed.

21 SEC. 911. INFORMATION ON INCOME ELIGIBILITY.

22 Section 23 of the National School Lunch Act (42

23 U.S.C. 1769d) is repealed.
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1 SEC. 912. NUTRITION GUIDANCE FOR CHILD NUTRITION

2 PROGRAMS.

3 Section 24 of the National School Lunch Act (42

4 U.S.C. 1769e) is repealed.

5 SEC. 913. INFORMATION CLEARINGHOUSE.

6 Section 26 of the National School Lunch Act (42

7 U.S.C. 1769g) is repealed.

8 Subtitle B—Child Nutrition Act of

9 1966

10 SEC. 921. SPECIAL MILK PROGRAM.

11 Section 3(a)(3) of the Child Nutrition Act of 1966

12 (42 U.S.C. 1772(a)(3)) is amended by striking ‘‘the Trust

13 Territory of the Pacific Islands’’ and inserting ‘‘the Com14 monwealth of the Northern Mariana Islands’’.

15 SEC. 922. FREE AND REDUCED PRICE POLICY STATEMENT.

16 Section 4(b)(1) of the Child Nutrition Act of 1966

17 (42 U.S.C. 1773(b)(1)) is amended by adding at the end

18 the following:

19 ‘‘(E) FREE AND REDUCED PRICE POLICY

20 STATEMENT.—After the initial submission, a

21 school shall not be required to submit a free

22 and reduced price policy statement to a State

23 educational agency under this Act unless there

24 is a substantive change in the free and reduced

25 price policy of the school. A routine change in

26 the policy of a school, such as an annual adjust-
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1 ment of the income eligibility guidelines for free

2 and reduced price meals, shall not be sufficient

3 cause for requiring the school to submit a policy

4 statement.’’.

5 SEC. 923. SCHOOL BREAKFAST PROGRAM AUTHORIZATION.

6 (a) TRAINING AND TECHNICAL ASSISTANCE IN FOOD

7 PREPARATION.—Section 4(e)(1) of the Child Nutrition

8 Act of 1966 (42 U.S.C. 1773(e)(1)) is amended—

9 (1) in subparagraph (A), by striking ‘‘(A)’’; and

10 (2) by striking subparagraph (B).

11 (b) EXPANSION OF PROGRAM; STARTUP AND EXPAN12 SION COSTS.—

13 (1) IN GENERAL.—Section 4 of the Act is

14 amended by striking subsections (f) and (g).

15 (2) EFFECTIVE DATE.—The amendments made

16 by paragraph (1) shall become effective on October

17 1, 1996.

18 SEC. 924. STATE ADMINISTRATIVE EXPENSES.

19 (a) USE OF FUNDS FOR COMMODITY DISTRIBUTION

20 ADMINISTRATION; STUDIES.—Section 7 of the Child Nu21 trition Act of 1966 (42 U.S.C. 1776) is amended—

22 (1) by striking subsections (e) and (h); and

23 (2) by redesignating subsections (f), (g), and (i)

24 as subsections (e), (f), and (g), respectively.
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1 (b) APPROVAL OF CHANGES.—Section 7(e) of the

2 Act, as so redesignated, is amended—

3 (1) by striking ‘‘each year an annual plan’’ and

4 inserting ‘‘the initial fiscal year a plan’’; and

5 (2) by adding at the end the following: ‘‘After

6 submitting the initial plan, a State shall only be re7 quired to submit to the Secretary for approval a

8 substantive change in the plan.’’.

9 SEC. 925. REGULATIONS.

10 Section 10 of the Child Nutrition Act of 1966 (42

11 U.S.C. 1779) is amended—

12 (1) in subsection (b)—

13 (A) in paragraph (1), by striking ‘‘(1)’’;

14 and

15 (B) by striking paragraphs (2) through

16 (4); and

17 (2) in subsection (c), by striking ‘‘may’’ and in18 serting ‘‘shall’’.

19 SEC. 926. PROHIBITIONS.

20 Section 11(a) of the Child Nutrition Act of 1966 (42

21 U.S.C. 1780(a)) is amended by striking ‘‘neither the Sec22 retary nor the State shall’’ and inserting ‘‘the Secretary

23 shall not’’.
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1 SEC. 927. MISCELLANEOUS PROVISIONS AND DEFINITIONS.

2 Section 15 of the Child Nutrition Act of 1966 (42

3 U.S.C. 1784) is amended—

4 (1) in paragraph (1), by striking ‘‘the Trust

5 Territory of the Pacific Islands’’ and inserting ‘‘the

6 Commonwealth of the Northern Mariana Islands’’;

7 and

8 (2) in the first sentence of paragraph (3)—

9 (A) in subparagraph (A), by inserting

10 ‘‘and’’ at the end; and

11 (B) by striking ‘‘, and (C)’’ and all that

12 follows through ‘‘Governor of Puerto Rico’’.

13 SEC. 928. ACCOUNTS AND RECORDS.

14 The second sentence of section 16(a) of the Child Nu15 trition Act of 1966 (42 U.S.C. 1785(a)) is amended by

16 striking ‘‘at all times be available’’ and inserting ‘‘be avail17 able at any reasonable time’’.

18 SEC. 929. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM

19 FOR WOMEN, INFANTS, AND CHILDREN.

20 (a) DEFINITIONS.—Section 17(b) of the Child Nutri21 tion Act of 1966 (42 U.S.C. 1786(b)) is amended—

22 (1) in paragraph (15)(B)(iii), by inserting ‘‘of

23 not more than 90 days’’ after ‘‘accommodation’’;

24 and

25 (2) in paragraph (16)—
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1 (A) in subparagraph (A), by adding ‘‘and’’

2 at the end; and

3 (B) in subparagraph (B), by striking ‘‘;

4 and’’ and inserting a period; and

5 (C) by striking subparagraph (C).

6 (b) SECRETARY’S PROMOTION OF WIC.—Section

7 17(c) of the Act is amended by striking paragraph (5).

8 (c) ELIGIBLE PARTICIPANTS.—Section 17(d) of the

9 Act is amended by striking paragraph (4).

10 (d) NUTRITION EDUCATION AND DRUG ABUSE EDU11 CATION.—Section 17(e) of the Act is amended—

12 (1) in the first sentence of paragraph (1), by

13 striking ‘‘shall ensure’’ and all that follows through

14 ‘‘is provided’’ and inserting ‘‘shall provide nutrition

15 education and may provide drug abuse education’’;

16 (2) in paragraph (2), by striking the third sen17 tence;

18 (3) by striking paragraph (4) and inserting the

19 following:

20 ‘‘(4) INFORMATION.—The State agency may

21 provide a local agency with materials describing

22 other programs for which participants in the pro23 gram may be eligible.’’;
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1 (4) in paragraph (5), by striking ‘‘The State’’

2 and all that follows through ‘‘local agency shall’’ and

3 inserting ‘‘A local agency may’’; and

4 (5) by striking paragraph (6).

5 (e) STATE PLAN.—Section 17(f) of the Act is amend6 ed—

7 (1) in paragraph (1)—

8 (A) in subparagraph (A)—

9 (i) by striking ‘‘annually to the Sec10 retary, by a date specified by the Sec11 retary, a’’ and inserting ‘‘to the Secretary,

12 by a date specified by the Secretary, an

13 initial’’; and

14 (ii) by adding at the end the follow15 ing: ‘‘After submitting the initial plan, a

16 State shall only be required to submit to

17 the Secretary for approval a substantive

18 change in the plan.’’;

19 (B) in subparagraph (C)—

20 (i) by striking clause (iii) and insert21 ing the following:

22 ‘‘(iii) a plan to coordinate operations under the

23 program with other services or programs that may

24 benefit participants in, and applicants for, the pro25 gram;’’;
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1 (ii) in clause (vi), by inserting after

2 ‘‘in the State’’ the following: ‘‘(including a

3 plan to improve access to the program for

4 participants and prospective applicants

5 who are employed, or who reside in rural

6 areas)’’;

7 (iii) by striking clauses (vii), (ix), (x),

8 and (xii);

9 (iv) in clause (xiii), by striking ‘‘may

10 require’’ and inserting ‘‘may reasonably re11 quire’’; and

12 (v) by redesignating clauses (viii),

13 (xi), and (xiii), as so amended, as clauses

14 (vii), (viii), and (ix), respectively;

15 (C) by striking subparagraph (D); and

16 (D) by redesignating subparagraph (E) as

17 subparagraph (D);

18 (2) by striking paragraphs (2), (6), (8), (20),

19 (22), and (24);

20 (3) in the second sentence of paragraph (5), by

21 striking ‘‘at all times be available’’ and inserting ‘‘be

22 available at any reasonable time’’;

23 (4) in paragraph (9)(B), by striking the second

24 sentence;
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1 (5) in the first sentence of paragraph (11), by

2 striking ‘‘, including standards that will ensure suffi3 cient State agency staff’’;

4 (6) in paragraph (12), by striking the third sen5 tence;

6 (7) in paragraph (14), by striking ‘‘shall’’ and

7 inserting ‘‘may’’;

8 (8) in paragraph (17), by striking ‘‘and to ac9 commodate’’ and all that follows through ‘‘facili10 ties’’;

11 (9) in paragraph (19), by striking ‘‘shall’’ and

12 inserting ‘‘may’’; and

13 (10) by redesignating paragraphs (3), (4), (5),

14 (7), (9) through (19), (21), and (23), as so amend15 ed, as paragraphs (2), (3), (4), (5), (6) through

16 (16), (17), and (18), respectively.

17 (f) INFORMATION.—Section 17(g) of the Act is

18 amended—

19 (1) in paragraph (5), by striking ‘‘the report re20 quired under subsection (d)(4)’’ and inserting ‘‘re21 ports on program participant characteristics’’; and

22 (2) by striking paragraph (6).

23 (g) PROCUREMENT OF INFANT FORMULA.—

24 (1) IN GENERAL.—Section 17(h) of the Act is

25 amended—
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1 (A) in paragraph (4)(E), by striking ‘‘and,

2 on’’ and all that follows through ‘‘(d)(4)’’;

3 (B) in paragraph (8)—

4 (i) by striking subparagraphs (A),

5 (C), and (M);

6 (ii) in subparagraph (G)—

7 (I) in clause (i), by striking ‘‘(i)’’;

8 and

9 (II) by striking clauses (ii)

10 through (ix);

11 (iii) in subparagraph (I), by striking

12 ‘‘Secretary—’’ and all that follows through

13 ‘‘(v) may’’ and inserting ‘‘Secretary may’’;

14 (iv) by redesignating subparagraphs

15 (B) and (D) through (L) as subparagraphs

16 (A) and (B) through (J), respectively;

17 (v) in subparagraph (A)(i), as so re18 designated, by striking ‘‘subparagraphs

19 (C), (D), and (E)(iii), in carrying out sub20 paragraph (A),’’ and inserting ‘‘subpara21 graphs (B) and (C)(iii),’’;

22 (vi) in subparagraph (B)(i), as so re23 designated, by striking ‘‘subparagraph

24 (B)’’ each place it appears and inserting

25 ‘‘subparagraph (A)’’; and
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1 (vii) in subparagraph (C)(iii), as so

2 redesignated, by striking ‘‘subparagraph

3 (B)’’ and inserting ‘‘subparagraph (A)’’;

4 and

5 (C) in paragraph (10)(A), by striking

6 ‘‘shall’’ and inserting ‘‘may’’.

7 (2) APPLICATION.—The amendments made by

8 paragraph (1) shall not apply to a contract for the

9 procurement of infant formula under section

10 17(h)(8) of the Act that is in effect on the effective

11 date of this subsection.

12 (h) NATIONAL ADVISORY COUNCIL ON MATERNAL,

13 INFANT, AND FETAL NUTRITION.—Section 17(k)(3) of

14 the Act is amended by striking ‘‘Secretary shall designate’’

15 and inserting ‘‘Council shall elect’’.

16 (i) COMPLETED STUDY; COMMUNITY COLLEGE DEM17 ONSTRATION; GRANTS FOR INFORMATION AND DATA SYS18 TEM.—Section 17 of the Act is amended by striking sub19 sections (n), (o), and (p).

20 (j) DISQUALIFICATION OF VENDORS WHO ARE DIS21 QUALIFIED UNDER THE FOOD STAMP PROGRAM.—Sec22 tion 17 of the Act, as so amended, is further amended

23 by adding at the end the following:

24 ‘‘(n) DISQUALIFICATION OF VENDORS WHO ARE

25 DISQUALIFIED UNDER THE FOOD STAMP PROGRAM.—
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1 ‘‘(1) IN GENERAL.—The Secretary shall issue

2 regulations providing criteria for the disqualification

3 under this section of an approved vendor that is dis4 qualified from accepting benefits under the food

5 stamp program established under the Food Stamp

6 Act of 1977 (7 U.S.C. 2011 et seq.).

7 ‘‘(2) TERMS.—A disqualification under para8 graph (1)—

9 ‘‘(A) shall be for the same period as the

10 disqualification from the program referred to in

11 paragraph (1);

12 ‘‘(B) may begin at a later date than the

13 disqualification from the program referred to in

14 paragraph (1); and

15 ‘‘(C) shall not be subject to judicial or ad16 ministrative review.’’.

17 SEC. 930. CASH GRANTS FOR NUTRITION EDUCATION.

18 Section 18 of the Child Nutrition Act of 1966 (42

19 U.S.C. 1787) is repealed.

20 SEC. 931. NUTRITION EDUCATION AND TRAINING.

21 (a) FINDINGS.—Section 19 of the Child Nutrition

22 Act of 1966 (42 U.S.C. 1788) is amended—

23 (1) in subsection (a), by striking ‘‘that—’’ and

24 all that follows through the period at the end and

25 inserting ‘‘that effective dissemination of scientif-
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1 ically valid information to children participating or

2 eligible to participate in the school lunch and related

3 child nutrition programs should be encouraged.’’;

4 and

5 (2) in subsection (b), by striking ‘‘encourage’’

6 and all that follows through ‘‘establishing’’ and in7 serting ‘‘establish’’.

8 (b) USE OF FUNDS.—Section 19(f) of the Act is

9 amended—

10 (1) in paragraph (1)—

11 (A) by striking subparagraph (B); and

12 (B) in subparagraph (A)—

13 (i) by striking ‘‘(A)’’;

14 (ii) by striking clauses (ix) through

15 (xix);

16 (iii) by redesignating clauses (i)

17 through (viii) and (xx) as subparagraphs

18 (A) through (H) and (I), respectively; and

19 (iv) in subparagraph (H), as so redes20 ignated, by inserting ‘‘and’’ at the end;

21 (2) by striking paragraphs (2) and (4); and

22 (3) by redesignating paragraph (3) as para23 graph (2).

24 (c) ACCOUNTS, RECORDS, AND REPORTS.—The sec25 ond sentence of section 19(g)(1) of the Act is amended
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1 by striking ‘‘at all times be available’’ and inserting ‘‘be

2 available at any reasonable time’’.

3 (d) STATE COORDINATORS FOR NUTRITION; STATE

4 PLAN.—Section 19(h) of the Act is amended—

5 (1) in the second sentence of paragraph (1)—

6 (A) by striking ‘‘as provided in paragraph

7 (2) of this subsection’’; and

8 (B) by striking ‘‘as provided in paragraph

9 (3) of this subsection’’;

10 (2) in paragraph (2), by striking the second

11 and third sentences; and

12 (3) by striking paragraph (3).

13 (e) AUTHORIZATION OF APPROPRIATIONS.—Section

14 19(i) of the Act is amended—

15 (1) in the first sentence of paragraph (2)(A), by

16 striking ‘‘and each succeeding fiscal year’’;

17 (2) by redesignating paragraphs (3) and (4) as

18 paragraphs (4) and (5), respectively; and

19 (3) by inserting after paragraph (2) the follow20 ing:

21 ‘‘(3) FISCAL YEARS 1997 THROUGH 2002.—

22 ‘‘(A) IN GENERAL.—There are authorized

23 to be appropriated to carry out this section

24 $10,000,000 for each of fiscal years 1997

25 through 2002.
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1 ‘‘(B) GRANTS.—

2 ‘‘(i) IN GENERAL.—Grants to each

3 State from the amounts made available

4 under subparagraph (A) shall be based on

5 a rate of 50 cents for each child enrolled

6 in schools or institutions within the State,

7 except that no State shall receive an

8 amount less than $75,000 per fiscal year.

9 ‘‘(ii) INSUFFICIENT FUNDS.—If the

10 amount made available for any fiscal year

11 is insufficient to pay the amount to which

12 each State is entitled under clause (i), the

13 amount of each grant shall be ratably re14 duced.’’.

15 (f) ASSESSMENT.—Section 19 of the Act is amended

16 by striking subsection (j).

17 (g) EFFECTIVE DATE.—The amendments made by

18 subsection (e) shall become effective on October 1, 1996.

19 SEC. 932. BREASTFEEDING PROMOTION PROGRAM.

20 Section 21 of the Child Nutrition Act of 1966 (42

21 U.S.C. 1790) is repealed.
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1 TITLE X—FOOD STAMPS AND

2 COMMODITY DISTRIBUTION

3 SEC. 1001. SHORT TITLE.

4 This title may be cited as the ‘‘Food Stamp Reform

5 and Commodity Distribution Act of 1996’’.

6 Subtitle A—Food Stamp Program

7 SEC. 1011. DEFINITION OF CERTIFICATION PERIOD.

8 Section 3(c) of the Food Stamp Act of 1977 (7

9 U.S.C. 2012(c)) is amended by striking ‘‘Except as pro10 vided’’ and all that follows and inserting the following:

11 ‘‘The certification period shall not exceed 12 months, ex12 cept that the certification period may be up to 24 months

13 if all adult household members are elderly or disabled. A

14 State agency shall have at least 1 contact with each cer15 tified household every 12 months.’’.

16 SEC. 1012. DEFINITION OF COUPON.

17 Section 3(d) of the Food Stamp Act of 1977 (7

18 U.S.C. 2012(d)) is amended by striking ‘‘or type of certifi19 cate’’ and inserting ‘‘type of certificate, authorization

20 card, cash or check issued in lieu of a coupon, or an access

21 device, including an electronic benefit transfer card or per22 sonal identification number,’’.

23 SEC. 1013. TREATMENT OF CHILDREN LIVING AT HOME.

24 The second sentence of section 3(i) of the Food

25 Stamp Act of 1977 (7 U.S.C. 2012(i)) is amended by
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1 striking ‘‘(who are not themselves parents living with their

2 children or married and living with their spouses)’’.

3 SEC. 1014. OPTIONAL ADDITIONAL CRITERIA FOR SEPA4 RATE HOUSEHOLD DETERMINATIONS.

5 Section 3(i) of the Food Stamp Act of 1977 (7 U.S.C.

6 2012(i)) is amended by inserting after the third sentence

7 the following: ‘‘Notwithstanding the preceding sentences,

8 a State may establish criteria that prescribe when individ9 uals who live together, and who would be allowed to par10 ticipate as separate households under the preceding sen11 tences, shall be considered a single household, without re12 gard to the common purchase of food and preparation of

13 meals.’’.

14 SEC. 1015. ADJUSTMENT OF THRIFTY FOOD PLAN.

15 The second sentence of section 3(o) of the Food

16 Stamp Act of 1977 (7 U.S.C. 2012(o)) is amended—

17 (1) by striking ‘‘shall (1) make’’ and inserting

18 the following: ‘‘shall—

19 ‘‘(1) make’’;

20 (2) by striking ‘‘scale, (2) make’’ and inserting

21 ‘‘scale;

22 ‘‘(2) make’’;

23 (3) by striking ‘‘Alaska, (3) make’’ and insert24 ing the following: ‘‘Alaska;

25 ‘‘(3) make’’; and
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1 (4) by striking ‘‘Columbia, (4) through’’ and all

2 that follows through the end of the subsection and

3 inserting the following: ‘‘Columbia; and

4 ‘‘(4) on October 1, 1996, and each October 1

5 thereafter, adjust the cost of the diet to reflect the

6 cost of the diet, in the preceding June, and round

7 the result to the nearest lower dollar increment for

8 each household size, except that on October 1, 1996,

9 the Secretary may not reduce the cost of the diet in

10 effect on September 30, 1996.’’.

11 SEC. 1016. DEFINITION OF HOMELESS INDIVIDUAL.

12 Section 3(s)(2)(C) of the Food Stamp Act of 1977

13 (7 U.S.C. 2012(s)(2)(C)) is amended by inserting ‘‘for not

14 more than 90 days’’ after ‘‘temporary accommodation’’.

15 SEC. 1017. STATE OPTION FOR ELIGIBILITY STANDARDS.

16 Section 5(b) of the Food Stamp Act of 1977 (7

17 U.S.C. 2014(d)) is amended by striking ‘‘(b) The Sec18 retary’’ and inserting the following:

19 ‘‘(b) ELIGIBILITY STANDARDS.—Except as otherwise

20 provided in this Act, the Secretary’’.

21 SEC. 1018. EARNINGS OF STUDENTS.

22 Section 5(d)(7) of the Food Stamp Act of 1977 (7

23 U.S.C. 2014(d)(7)) is amended by striking ‘‘21’’ and in24 serting ‘‘19’’.
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1 SEC. 1019. ENERGY ASSISTANCE.

2 (a) IN GENERAL.—Section 5(d) of the Food Stamp

3 Act of 1977 (7 U.S.C. 2014(d)) is amended by striking

4 paragraph (11) and inserting the following: ‘‘(11) a 1-time

5 payment or allowance made under a Federal or State law

6 for the costs of weatherization or emergency repair or re7 placement of an unsafe or inoperative furnace or other

8 heating or cooling device,’’.

9 (b) CONFORMING AMENDMENTS.—

10 (1) Section 5(k) of the Act (7 U.S.C. 2014(k))

11 is amended—

12 (A) in paragraph (1)—

13 (i) in subparagraph (A), by striking

14 ‘‘plan for aid to families with dependent

15 children approved’’ and inserting ‘‘program

16 funded’’; and

17 (ii) in subparagraph (B), by striking

18 ‘‘, not including energy or utility-cost as19 sistance,’’;

20 (B) in paragraph (2), by striking subpara21 graph (C) and inserting the following:

22 ‘‘(C) a payment or allowance described in sub23 section (d)(11);’’; and

24 (C) by adding at the end the following:

25 ‘‘(4) THIRD PARTY ENERGY ASSISTANCE PAY26 MENTS.—
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1 ‘‘(A) ENERGY ASSISTANCE PAYMENTS.—

2 For purposes of subsection (d)(1), a payment

3 made under a Federal or State law to provide

4 energy assistance to a household shall be con5 sidered money payable directly to the house6 hold.

7 ‘‘(B) ENERGY ASSISTANCE EXPENSES.—

8 For purposes of subsection (e)(7), an expense

9 paid on behalf of a household under a Federal

10 or State law to provide energy assistance shall

11 be considered an out-of-pocket expense incurred

12 and paid by the household.’’.

13 (2) Section 2605(f) of the Low-Income Home

14 Energy Assistance Act of 1981 (42 U.S.C. 8624(f))

15 is amended—

16 (A) by striking ‘‘(f)(1) Notwithstanding’’

17 and inserting ‘‘(f) Notwithstanding’’;

18 (B) in paragraph (1), by striking ‘‘food

19 stamps,’’; and

20 (C) by striking paragraph (2).

21 SEC. 1020. DEDUCTIONS FROM INCOME.

22 (a) IN GENERAL.—Section 5 of the Food Stamp Act

23 of 1977 (7 U.S.C. 2014) is amended by striking sub24 section (e) and inserting the following:

25 ‘‘(e) DEDUCTIONS FROM INCOME.—
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1 ‘‘(1) STANDARD DEDUCTION.—The Secretary

2 shall allow a standard deduction for each household

3 in the 48 contiguous States and the District of Co4 lumbia, Alaska, Hawaii, Guam, and the Virgin Is5 lands of the United States of $134, $229, $189,

6 $269, and $118, respectively.

7 ‘‘(2) EARNED INCOME DEDUCTION.—

8 ‘‘(A) DEFINITION OF EARNED INCOME.—

9 In this paragraph, the term ‘earned income’

10 does not include income excluded by subsection

11 (d) or any portion of income earned under a

12 work supplementation or support program, as

13 defined under section 16(b), that is attributable

14 to public assistance.

15 ‘‘(B) DEDUCTION.—Except as provided in

16 subparagraph (C), a household with earned in17 come shall be allowed a deduction of 20 percent

18 of all earned income to compensate for taxes,

19 other mandatory deductions from salary, and

20 work expenses.

21 ‘‘(C) EXCEPTION.—The deduction de22 scribed in subparagraph (B) shall not be al23 lowed with respect to determining an overissu24 ance due to the failure of a household to report

25 earned income in a timely manner.
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1 ‘‘(3) DEPENDENT CARE DEDUCTION.—

2 ‘‘(A) IN GENERAL.—A household shall be

3 entitled, with respect to expenses (other than

4 excluded expenses described in subparagraph

5 (B)) for dependent care, to a dependent care

6 deduction, the maximum allowable level of

7 which shall be $200 per month for each depend8 ent child under 2 years of age and $175 per

9 month for each other dependent, for the actual

10 cost of payments necessary for the care of a

11 dependent if the care enables a household mem12 ber to accept or continue employment, or train13 ing or education that is preparatory for employ14 ment.

15 ‘‘(B) EXCLUDED EXPENSES.—The ex16 cluded expenses referred to in subparagraph

17 (A) are—

18 ‘‘(i) expenses paid on behalf of the

19 household by a third party;

20 ‘‘(ii) amounts made available and ex21 cluded for the expenses referred to in sub22 paragraph (A) under subsection (d)(3);

23 and

24 ‘‘(iii) expenses that are paid under

25 section 6(d)(4).
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1 ‘‘(4) DEDUCTION FOR CHILD SUPPORT PAY2 MENTS.—

3 ‘‘(A) IN GENERAL.—A household shall be

4 entitled to a deduction for child support pay5 ments made by a household member to or for

6 an individual who is not a member of the

7 household if the household member is legally

8 obligated to make the payments.

9 ‘‘(B) METHODS FOR DETERMINING

10 AMOUNT.—The Secretary may prescribe by reg11 ulation the methods, including calculation on a

12 retrospective basis, that a State agency shall

13 use to determine the amount of the deduction

14 for child support payments.

15 ‘‘(5) HOMELESS SHELTER ALLOWANCE.—A

16 State agency may develop a standard homeless shel17 ter allowance, which shall not exceed $143 per

18 month, for such expenses as may reasonably be ex19 pected to be incurred by households in which all

20 members are homeless individuals but are not receiv21 ing free shelter throughout the month. A State agen22 cy that develops the allowance may use the allow23 ance in determining eligibility and allotments for the

24 households, except that the State agency may pro-
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1 hibit the use of the allowance for households with

2 extremely low shelter costs.

3 ‘‘(6) EXCESS MEDICAL EXPENSE DEDUCTION.—

4 ‘‘(A) IN GENERAL.—A household contain5 ing an elderly or disabled member shall be enti6 tled, with respect to expenses other than ex7 penses paid on behalf of the household by a

8 third party, to an excess medical expense de9 duction for the portion of the actual costs of al10 lowable medical expenses, incurred by the elder11 ly or disabled member, exclusive of special diets,

12 that exceeds $35 per month.

13 ‘‘(B) METHOD OF CLAIMING DEDUC14 TION.—

15 ‘‘(i) IN GENERAL.—A State agency

16 shall offer an eligible household under sub17 paragraph (A) a method of claiming a de18 duction for recurring medical expenses that

19 are initially verified under the excess medi20 cal expense deduction in lieu of submitting

21 information or verification on actual ex22 penses on a monthly basis.

23 ‘‘(ii) METHOD.—The method de24 scribed in clause (i) shall—
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1 ‘‘(I) be designed to minimize the

2 burden for the eligible elderly or dis3 abled household member choosing to

4 deduct the recurrent medical expenses

5 of the member pursuant to the meth6 od;

7 ‘‘(II) rely on reasonable estimates

8 of the expected medical expenses of

9 the member for the certification pe10 riod (including changes that can be

11 reasonably anticipated based on avail12 able information about the medical

13 condition of the member, public or

14 private medical insurance coverage,

15 and the current verified medical ex16 penses incurred by the member); and

17 ‘‘(III) not require further report18 ing or verification of a change in med19 ical expenses if such a change has

20 been anticipated for the certification

21 period.

22 ‘‘(7) EXCESS SHELTER EXPENSE DEDUC23 TION.—

24 ‘‘(A) IN GENERAL.—A household shall be

25 entitled, with respect to expenses other than ex-
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1 penses paid on behalf of the household by a

2 third party, to an excess shelter expense deduc3 tion to the extent that the monthly amount ex4 pended by a household for shelter exceeds an

5 amount equal to 50 percent of monthly house6 hold income after all other applicable deduc7 tions have been allowed.

8 ‘‘(B) MAXIMUM AMOUNT OF DEDUC9 TION.—In the case of a household that does not

10 contain an elderly or disabled individual, the ex11 cess shelter expense deduction shall not ex12 ceed—

13 ‘‘(i) in the 48 contiguous States and

14 the District of Columbia, $247 per month;

15 and

16 ‘‘(ii) in Alaska, Hawaii, Guam, and

17 the Virgin Islands of the United States,

18 $429, $353, $300, and $182 per month,

19 respectively.

20 ‘‘(C) STANDARD UTILITY ALLOWANCE.—

21 ‘‘(i) IN GENERAL.—In computing the

22 excess shelter expense deduction, a State

23 agency may use a standard utility allow24 ance in accordance with regulations pro25 mulgated by the Secretary, except that a
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1 State agency may use an allowance that

2 does not fluctuate within a year to reflect

3 seasonal variations.

4 ‘‘(ii) RESTRICTIONS ON HEATING AND

5 COOLING EXPENSES.—An allowance for a

6 heating or cooling expense may not be used

7 in the case of a household that—

8 ‘‘(I) does not incur a heating or

9 cooling expense, as the case may be;

10 ‘‘(II) does incur a heating or

11 cooling expense but is located in a

12 public housing unit that has central

13 utility meters and charges households,

14 with regard to the expense, only for

15 excess utility costs; or

16 ‘‘(III) shares the expense with,

17 and lives with, another individual not

18 participating in the food stamp pro19 gram, another household participating

20 in the food stamp program, or both,

21 unless the allowance is prorated be22 tween the household and the other in23 dividual, household, or both.

24 ‘‘(iii) MANDATORY ALLOWANCE.—
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1 ‘‘(I) IN GENERAL.—A State

2 agency may make the use of a stand3 ard utility allowance mandatory for all

4 households with qualifying utility

5 costs if—

6 ‘‘(aa) the State agency has

7 developed 1 or more standards

8 that include the cost of heating

9 and cooling and 1 or more stand10 ards that do not include the cost

11 of heating and cooling; and

12 ‘‘(bb) the Secretary finds

13 that the standards will not result

14 in an increased cost to the Sec15 retary.

16 ‘‘(II) HOUSEHOLD ELECTION.—

17 A State agency that has not made the

18 use of a standard utility allowance

19 mandatory under subclause (I) shall

20 allow a household to switch, at the

21 end of a certification period, between

22 the standard utility allowance and a

23 deduction based on the actual utility

24 costs of the household.
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1 ‘‘(iv) AVAILABILITY OF ALLOWANCE

2 TO RECIPIENTS OF ENERGY ASSISTANCE.—

3 ‘‘(I) IN GENERAL.—Subject to

4 subclause (II), if a State agency elects

5 to use a standard utility allowance

6 that reflects heating or cooling costs,

7 the standard utility allowance shall be

8 made available to households receiving

9 a payment, or on behalf of which a

10 payment is made, under the Low-In11 come Home Energy Assistance Act of

12 1981 (42 U.S.C. 8621 et seq.) or

13 other similar energy assistance pro14 gram, if the household still incurs out15 of-pocket heating or cooling expenses

16 in excess of any assistance paid on be17 half of the household to an energy

18 provider.

19 ‘‘(II) SEPARATE ALLOWANCE.—A

20 State agency may use a separate

21 standard utility allowance for house22 holds on behalf of which a payment

23 described in subclause (I) is made,

24 but may not be required to do so.
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1 ‘‘(III) STATES NOT ELECTING TO

2 USE SEPARATE ALLOWANCE.—A State

3 agency that does not elect to use a

4 separate allowance but makes a single

5 standard utility allowance available to

6 households incurring heating or cool7 ing expenses (other than a household

8 described in subclause (I) or (II) of

9 subparagraph (C)(ii)) may not be re10 quired to reduce the allowance due to

11 the provision (directly or indirectly) of

12 assistance under the Low-Income

13 Home Energy Assistance Act of 1981

14 (42 U.S.C. 8621 et seq.).

15 ‘‘(IV) PRORATION OF ASSIST16 ANCE.—For the purpose of the food

17 stamp program, assistance provided

18 under the Low-Income Home Energy

19 Assistance Act of 1981 (42 U.S.C.

20 8621 et seq.) shall be considered to be

21 prorated over the entire heating or

22 cooling season for which the assist23 ance was provided.’’.

24 (b) CONFORMING AMENDMENT.—Section 11(e)(3) of

25 the Act (7 U.S.C. 2020(e)(3)) is amended by striking ‘‘.
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1 Under rules prescribed’’ and all that follows through

2 ‘‘verifies higher expenses’’.

3 SEC. 1021. VEHICLE ALLOWANCE.

4 Section 5(g) of the Food Stamp Act of 1977 (7

5 U.S.C. 2014(g)) is amended by striking paragraph (2) and

6 inserting the following:

7 ‘‘(2) INCLUDED ASSETS.—

8 ‘‘(A) IN GENERAL.—Subject to the other

9 provisions of this paragraph, the Secretary

10 shall, in prescribing inclusions in, and exclu11 sions from, financial resources, follow the regu12 lations in force as of June 1, 1982 (other than

13 those relating to licensed vehicles and inacces14 sible resources).

15 ‘‘(B) ADDITIONAL INCLUDED ASSETS.—

16 The Secretary shall include in financial re17 sources—

18 ‘‘(i) any boat, snowmobile, or airplane

19 used for recreational purposes;

20 ‘‘(ii) any vacation home;

21 ‘‘(iii) any mobile home used primarily

22 for vacation purposes;

23 ‘‘(iv) subject to subparagraph (C), any

24 licensed vehicle that is used for household

25 transportation or to obtain or continue em-
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1 ployment to the extent that the fair market

2 value of the vehicle exceeds $4,600; and

3 ‘‘(v) any savings or retirement ac4 count (including an individual account), re5 gardless of whether there is a penalty for

6 early withdrawal.

7 ‘‘(C) EXCLUDED VEHICLES.—A vehicle

8 (and any other property, real or personal, to the

9 extent the property is directly related to the

10 maintenance or use of the vehicle) shall not be

11 included in financial resources under this para12 graph if the vehicle is—

13 ‘‘(i) used to produce earned income;

14 ‘‘(ii) necessary for the transportation

15 of a physically disabled household member;

16 or

17 ‘‘(iii) depended on by a household to

18 carry fuel for heating or water for home

19 use and provides the primary source of fuel

20 or water, respectively, for the household.’’.

21 SEC. 1022. VENDOR PAYMENTS FOR TRANSITIONAL HOUS22 ING COUNTED AS INCOME.

23 Section 5(k)(2) of the Food Stamp Act of 1977 (7

24 U.S.C. 2014(k)(2)) is amended—

25 (1) by striking subparagraph (F); and
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1 (2) by redesignating subparagraphs (G) and

2 (H) as subparagraphs (F) and (G), respectively.

3 SEC. 1023. DOUBLED PENALTIES FOR VIOLATING FOOD

4 STAMP PROGRAM REQUIREMENTS.

5 Section 6(b)(1) of the Food Stamp Act of 1977 (7

6 U.S.C. 2015(b)(1)) is amended—

7 (1) in clause (i), by striking ‘‘six months’’ and

8 inserting ‘‘1 year’’; and

9 (2) in clause (ii), by striking ‘‘1 year’’ and in10 serting ‘‘2 years’’.

11 SEC. 1024. DISQUALIFICATION OF CONVICTED INDIVID12 UALS.

13 Section 6(b)(1)(iii) of the Food Stamp Act of 1977

14 (7 U.S.C. 2015(b)(1)(iii)) is amended—

15 (1) in subclause (II), by striking ‘‘or’’ at the

16 end;

17 (2) in subclause (III), by striking the period at

18 the end and inserting ‘‘; or’’; and

19 (3) by inserting after subclause (III) the follow20 ing:

21 ‘‘(IV) a conviction of an offense under sub22 section (b) or (c) of section 15 involving an

23 item covered by subsection (b) or (c) of section

24 15 having a value of $500 or more.’’.
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1 SEC. 1025. DISQUALIFICATION.

2 (a) IN GENERAL.—Section 6(d) of the Food Stamp

3 Act of 1977 (7 U.S.C. 2015(d)) is amended by striking

4 ‘‘(d)(1) Unless otherwise exempted by the provisions’’ and

5 all that follows through the end of paragraph (1) and in6 serting the following:

7 ‘‘(d) CONDITIONS OF PARTICIPATION.—

8 ‘‘(1) WORK REQUIREMENTS.—

9 ‘‘(A) IN GENERAL.—No physically and

10 mentally fit individual over the age of 15 and

11 under the age of 60 shall be eligible to partici12 pate in the food stamp program if the individ13 ual—

14 ‘‘(i) refuses, at the time of application

15 and every 12 months thereafter, to register

16 for employment in a manner prescribed by

17 the Secretary;

18 ‘‘(ii) refuses without good cause to

19 participate in an employment and training

20 program under paragraph (4), to the ex21 tent required by the State agency;

22 ‘‘(iii) refuses without good cause to

23 accept an offer of employment, at a site or

24 plant not subject to a strike or lockout at

25 the time of the refusal, at a wage not less

26 than the higher of—
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1 ‘‘(I) the applicable Federal or

2 State minimum wage; or

3 ‘‘(II) 80 percent of the wage that

4 would have governed had the mini5 mum hourly rate under section

6 6(a)(1) of the Fair Labor Standards

7 Act of 1938 (29 U.S.C. 206(a)(1))

8 been applicable to the offer of employ9 ment;

10 ‘‘(iv) refuses without good cause to

11 provide a State agency with sufficient in12 formation to allow the State agency to de13 termine the employment status or the job

14 availability of the individual;

15 ‘‘(v) voluntarily and without good

16 cause—

17 ‘‘(I) quits a job; or

18 ‘‘(II) reduces work effort and,

19 after the reduction, the individual is

20 working less than 30 hours per week;

21 or

22 ‘‘(vi) fails to comply with section 20.

23 ‘‘(B) HOUSEHOLD INELIGIBILITY.—If an

24 individual who is the head of a household be25 comes ineligible to participate in the food stamp
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1 program under subparagraph (A), the house2 hold shall, at the option of the State agency,

3 become ineligible to participate in the food

4 stamp program for a period, determined by the

5 State agency, that does not exceed the lesser

6 of—

7 ‘‘(i) the duration of the ineligibility of

8 the individual determined under subpara9 graph (C); or

10 ‘‘(ii) 180 days.

11 ‘‘(C) DURATION OF INELIGIBILITY.—

12 ‘‘(i) FIRST VIOLATION.—The first

13 time that an individual becomes ineligible

14 to participate in the food stamp program

15 under subparagraph (A), the individual

16 shall remain ineligible until the later of—

17 ‘‘(I) the date the individual be18 comes eligible under subparagraph

19 (A);

20 ‘‘(II) the date that is 1 month

21 after the date the individual became

22 ineligible; or

23 ‘‘(III) a date determined by the

24 State agency that is not later than 3
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1 months after the date the individual

2 became ineligible.

3 ‘‘(ii) SECOND VIOLATION.—The sec4 ond time that an individual becomes ineli5 gible to participate in the food stamp pro6 gram under subparagraph (A), the individ7 ual shall remain ineligible until the later

8 of—

9 ‘‘(I) the date the individual be10 comes eligible under subparagraph

11 (A);

12 ‘‘(II) the date that is 3 months

13 after the date the individual became

14 ineligible; or

15 ‘‘(III) a date determined by the

16 State agency that is not later than 6

17 months after the date the individual

18 became ineligible.

19 ‘‘(iii) THIRD OR SUBSEQUENT VIOLA20 TION.—The third or subsequent time that

21 an individual becomes ineligible to partici22 pate in the food stamp program under sub23 paragraph (A), the individual shall remain

24 ineligible until the later of—
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1 ‘‘(I) the date the individual be2 comes eligible under subparagraph

3 (A);

4 ‘‘(II) the date that is 6 months

5 after the date the individual became

6 ineligible;

7 ‘‘(III) a date determined by the

8 State agency; or

9 ‘‘(IV) at the option of the State

10 agency, permanently.

11 ‘‘(D) ADMINISTRATION.—

12 ‘‘(i) GOOD CAUSE.—The Secretary

13 shall determine the meaning of good cause

14 for the purpose of this paragraph.

15 ‘‘(ii) VOLUNTARY QUIT.—The Sec16 retary shall determine the meaning of vol17 untarily quitting and reducing work effort

18 for the purpose of this paragraph.

19 ‘‘(iii) DETERMINATION BY STATE

20 AGENCY.—

21 ‘‘(I) IN GENERAL.—Subject to

22 subclause (II) and clauses (i) and (ii),

23 a State agency shall determine—

24 ‘‘(aa) the meaning of any

25 term in subparagraph (A);
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1 ‘‘(bb) the procedures for de2 termining whether an individual

3 is in compliance with a require4 ment under subparagraph (A);

5 and

6 ‘‘(cc) whether an individual

7 is in compliance with a require8 ment under subparagraph (A).

9 ‘‘(II) NOT LESS RESTRICTIVE.—

10 A State agency may not determine a

11 meaning, procedure, or determination

12 under subclause (I) to be less restric13 tive than a comparable meaning, pro14 cedure, or determination under a

15 State program funded under part A of

16 title IV of the Social Security Act (42

17 U.S.C. 601 et seq.).

18 ‘‘(iv) STRIKE AGAINST THE GOVERN19 MENT.—For the purpose of subparagraph

20 (A)(v), an employee of the Federal Govern21 ment, a State, or a political subdivision of

22 a State, who is dismissed for participating

23 in a strike against the Federal Govern24 ment, the State, or the political subdivision
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1 of the State shall be considered to have

2 voluntarily quit without good cause.

3 ‘‘(v) SELECTING A HEAD OF HOUSE4 HOLD.—

5 ‘‘(I) IN GENERAL.—For the pur6 pose of this paragraph, the State

7 agency shall allow the household to se8 lect any adult parent of a child in the

9 household as the head of the house10 hold if all adult household members

11 making application under the food

12 stamp program agree to the selection.

13 ‘‘(II) TIME FOR MAKING DES14 IGNATION.—A household may des15 ignate the head of the household

16 under subclause (I) each time the

17 household is certified for participation

18 in the food stamp program, but may

19 not change the designation during a

20 certification period unless there is a

21 change in the composition of the

22 household.

23 ‘‘(vi) CHANGE IN HEAD OF HOUSE24 HOLD.—If the head of a household leaves

25 the household during a period in which the
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1 household is ineligible to participate in the

2 food stamp program under subparagraph

3 (B)—

4 ‘‘(I) the household shall, if other5 wise eligible, become eligible to par6 ticipate in the food stamp program;

7 and

8 ‘‘(II) if the head of the household

9 becomes the head of another house10 hold, the household that becomes

11 headed by the individual shall become

12 ineligible to participate in the food

13 stamp program for the remaining pe14 riod of ineligibility.’’.

15 (b) CONFORMING AMENDMENT.—

16 (1) The second sentence of section 17(b)(2) of

17 the Act (7 U.S.C. 2026(b)(2)) is amended by strik18 ing ‘‘6(d)(1)(i)’’ and inserting ‘‘6(d)(1)(A)(i)’’.

19 (2) Section 20 of the Act (7 U.S.C. 2029) is

20 amended by striking subsection (f) and inserting the

21 following:

22 ‘‘(f) DISQUALIFICATION.—An individual or a house23 hold may become ineligible under section 6(d)(1) to par24 ticipate in the food stamp program for failing to comply

25 with this section.’’.
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1 SEC. 1026. CARETAKER EXEMPTION.

2 Section 6(d)(2) of the Food Stamp Act of 1977 (7

3 U.S.C. 2015(d)(2)) is amended by striking subparagraph

4 (B) and inserting the following: ‘‘(B) a parent or other

5 member of a household with responsibility for the care of

6 (i) a dependent child under the age of 6 or any lower age

7 designated by the State agency that is not under the age

8 of 1, or (ii) an incapacitated person;’’.

9 SEC. 1027. EMPLOYMENT AND TRAINING.

10 (a) IN GENERAL.—Section 6(d)(4) of the Food

11 Stamp Act of 1977 (7 U.S.C. 2015(d)(4)) is amended—

12 (1) in subparagraph (A)—

13 (A) by striking ‘‘Not later than April 1,

14 1987, each’’ and inserting ‘‘Each’’;

15 (B) by inserting ‘‘work,’’ after ‘‘skills,

16 training,’’; and

17 (C) by adding at the end the following:

18 ‘‘Each component of an employment and train19 ing program carried out under this paragraph

20 shall be delivered through a statewide workforce

21 development system, unless the component is

22 not available locally through the statewide

23 workforce development system.’’;

24 (2) in subparagraph (B)—

25 (A) in the matter preceding clause (i), by

26 striking the colon at the end and inserting the
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1 following: ‘‘, except that the State agency shall

2 retain the option to apply employment require3 ments prescribed under this subparagraph to a

4 program applicant at the time of application:’’;

5 (B) in clause (i), by striking ‘‘with terms

6 and conditions’’ and all that follows through

7 ‘‘time of application’’; and

8 (C) in clause (iv)—

9 (i) by striking subclauses (I) and (II);

10 and

11 (ii) by redesignating subclauses (III)

12 and (IV) as subclauses (I) and (II), respec13 tively;

14 (3) in subparagraph (D)—

15 (A) in clause (i), by striking ‘‘to which the

16 application’’ and all that follows through ‘‘30

17 days or less’’;

18 (B) in clause (ii), by striking ‘‘but with re19 spect’’ and all that follows through ‘‘child

20 care’’; and

21 (C) in clause (iii), by striking ‘‘, on the

22 basis of’’ and all that follows through ‘‘clause

23 (ii)’’ and inserting ‘‘the exemption continues to

24 be valid’’;
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1 (4) in subparagraph (E), by striking the third

2 sentence;

3 (5) in subparagraph (G)—

4 (A) by striking ‘‘(G)(i) The State’’ and in5 serting ‘‘(G) The State’’; and

6 (B) by striking clause (ii);

7 (6) in subparagraph (H), by striking ‘‘(H)(i)

8 The Secretary’’ and all that follows through ‘‘(ii)

9 Federal funds’’ and inserting ‘‘(H) Federal funds’’;

10 (7) in subparagraph (I)(i)(II), by striking ‘‘, or

11 was in operation,’’ and all that follows through ‘‘So12 cial Security Act’’ and inserting the following: ‘‘),

13 except that no such payment or reimbursement shall

14 exceed the applicable local market rate’’;

15 (8)(A) by striking subparagraphs (K) and (L)

16 and inserting the following:

17 ‘‘(K) LIMITATION ON FUNDING.—Notwith18 standing any other provision of this paragraph,

19 the amount of funds a State agency uses to

20 carry out this paragraph (including under sub21 paragraph (I)) for participants who are receiv22 ing benefits under a State program funded

23 under part A of title IV of the Social Security

24 Act (42 U.S.C. 601 et seq.) shall not exceed the

25 amount of funds the State agency used in fiscal
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1 year 1995 to carry out this paragraph for par2 ticipants who were receiving benefits in fiscal

3 year 1995 under a State program funded under

4 part A of title IV of the Act (42 U.S.C. 601 et

5 seq.).’’; and

6 (B) by redesignating subparagraphs (M) and

7 (N) as subparagraphs (L) and (M), respectively; and

8 (9) in subparagraph (L), as redesignated by

9 paragraph (8)(B)—

10 (A) by striking ‘‘(L)(i) The Secretary’’ and

11 inserting ‘‘(L) The Secretary’’; and

12 (B) by striking clause (ii).

13 (b) FUNDING.—Section 16(h) of the Act (7 U.S.C.

14 2025(h)) is amended by striking ‘‘(h)(1)(A) The Sec15 retary’’ and all that follows through the end of paragraph

16 (1) and inserting the following:

17 ‘‘(h) FUNDING OF EMPLOYMENT AND TRAINING

18 PROGRAMS.—

19 ‘‘(1) IN GENERAL.—

20 ‘‘(A) AMOUNTS.—To carry out employ21 ment and training programs, the Secretary

22 shall reserve for allocation to State agencies

23 from funds made available for each fiscal year

24 under section 18(a)(1) the amount of—

25 ‘‘(i) for fiscal year 1996, $75,000,000;
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1 ‘‘(ii) for fiscal year 1997,

2 $79,000,000;

3 ‘‘(iii) for fiscal year 1998,

4 $81,000,000;

5 ‘‘(iv) for fiscal year 1999,

6 $84,000,000;

7 ‘‘(v) for fiscal year 2000,

8 $86,000,000;

9 ‘‘(vi) for fiscal year 2001,

10 $88,000,000; and

11 ‘‘(vii) for fiscal year 2002,

12 $90,000,000.

13 ‘‘(B) ALLOCATION.—The Secretary shall

14 allocate the amounts reserved under subpara15 graph (A) among the State agencies using a

16 reasonable formula (as determined by the Sec17 retary) that gives consideration to the popu18 lation in each State affected by section 6(o).

19 ‘‘(C) REALLOCATION.—

20 ‘‘(i) NOTIFICATION.—A State agency

21 shall promptly notify the Secretary if the

22 State agency determines that the State

23 agency will not expend all of the funds al24 located to the State agency under subpara25 graph (B).
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1 ‘‘(ii) REALLOCATION.—On notification

2 under clause (i), the Secretary shall reallo3 cate the funds that the State agency will

4 not expend as the Secretary considers ap5 propriate and equitable.

6 ‘‘(D) MINIMUM ALLOCATION.—Notwith7 standing subparagraphs (A) through (C), the

8 Secretary shall ensure that each State agency

9 operating an employment and training program

10 shall receive not less than $50,000 in each fis11 cal year.’’.

12 (c) ADDITIONAL MATCHING FUNDS.—Section

13 16(h)(2) of the Act (7 U.S.C. 2025(h)(2)) is amended by

14 inserting before the period at the end the following: ‘‘, in15 cluding the costs for case management and casework to

16 facilitate the transition from economic dependency to self17 sufficiency through work’’.

18 (d) REPORTS.—Section 16(h) of the Act (7 U.S.C.

19 2025(h)) is amended—

20 (1) in paragraph (5)—

21 (A) by striking ‘‘(5)(A) The Secretary’’

22 and inserting ‘‘(5) The Secretary’’; and

23 (B) by striking subparagraph (B); and

24 (2) by striking paragraph (6).
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1 SEC. 1028. COMPARABLE TREATMENT FOR DISQUALIFICA2 TION.

3 (a) IN GENERAL.—Section 6 of the Food Stamp Act

4 of 1977 (7 U.S.C. 2015) is amended—

5 (1) by redesignating subsection (i), as added by

6 section 107, as subsection (p); and

7 (2) by inserting after subsection (h) the follow8 ing:

9 ‘‘(i) COMPARABLE TREATMENT FOR DISQUALIFICA10 TION.—

11 ‘‘(1) IN GENERAL.—If a disqualification is im12 posed on a member of a household for a failure of

13 the member to perform an action required under a

14 Federal, State, or local law relating to a means-test15 ed public assistance program, the State agency may

16 impose the same disqualification on the member of

17 the household under the food stamp program.

18 ‘‘(2) RULES AND PROCEDURES.—If a disquali19 fication is imposed under paragraph (1) for a failure

20 of an individual to perform an action required under

21 part A of title IV of the Social Security Act (42

22 U.S.C. 601 et seq.), the State agency may use the

23 rules and procedures that apply under part A of title

24 IV of the Act to impose the same disqualification

25 under the food stamp program.
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1 ‘‘(3) APPLICATION AFTER DISQUALIFICATION

2 PERIOD.—A member of a household disqualified

3 under paragraph (1) may, after the disqualification

4 period has expired, apply for benefits under this Act

5 and shall be treated as a new applicant, except that

6 a prior disqualification under subsection (d) shall be

7 considered in determining eligibility.’’.

8 (b) STATE PLAN PROVISIONS.—Section 11(e) of the

9 Act (7 U.S.C. 2020(e)) is amended—

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

11 end;

12 (2) in paragraph (25), by striking the period at

13 the end and inserting a semicolon; and

14 (3) by adding at the end the following:

15 ‘‘(26) the guidelines the State agency uses in

16 carrying out section 6(i); and’’.

17 (c) CONFORMING AMENDMENT.—Section 6(d)(2)(A)

18 of the Act (7 U.S.C. 2015(d)(2)(A)) is amended by strik19 ing ‘‘that is comparable to a requirement of paragraph

20 (1)’’.

21 SEC. 1029. DISQUALIFICATION FOR RECEIPT OF MULTIPLE

22 FOOD STAMP BENEFITS.

23 Section 6 of the Food Stamp Act of 1977 (7 U.S.C.

24 2015), as amended by section 1028, is further amended

25 by inserting after subsection (i) the following:
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1 ‘‘(j) DISQUALIFICATION FOR RECEIPT OF MULTIPLE

2 FOOD STAMP BENEFITS.—An individual shall be ineligible

3 to participate in the food stamp program as a member

4 of any household for a 10-year period if the individual is

5 found by a State agency to have made, or is convicted

6 in a Federal or State court of having made, a fraudulent

7 statement or representation with respect to the identity

8 or place of residence of the individual in order to receive

9 multiple benefits simultaneously under the food stamp

10 program.’’.

11 SEC. 1030. DISQUALIFICATION OF FLEEING FELONS.

12 Section 6 of the Food Stamp Act of 1977 (7 U.S.C.

13 2015), as amended by section 1029, is further amended

14 by inserting after subsection (j) the following:

15 ‘‘(k) DISQUALIFICATION OF FLEEING FELONS.—No

16 member of a household who is otherwise eligible to partici17 pate in the food stamp program shall be eligible to partici18 pate in the program as a member of that or any other

19 household during any period during which the individual

20 is—

21 ‘‘(1) fleeing to avoid prosecution, or custody or

22 confinement after conviction, under the law of the

23 place from which the individual is fleeing, for a

24 crime, or attempt to commit a crime, that is a felony

25 under the law of the place from which the individual
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1 is fleeing or that, in the case of New Jersey, is a

2 high misdemeanor under the law of New Jersey; or

3 ‘‘(2) violating a condition of probation or parole

4 imposed under a Federal or State law.’’.

5 SEC. 1031. COOPERATION WITH CHILD SUPPORT AGENCIES.

6 Section 6 of the Food Stamp Act of 1977 (7 U.S.C.

7 2015), as amended by section 1030, is further amended

8 by inserting after subsection (k) the following:

9 ‘‘(l) CUSTODIAL PARENT’S COOPERATION WITH

10 CHILD SUPPORT AGENCIES.—

11 ‘‘(1) IN GENERAL.—At the option of a State

12 agency, subject to paragraphs (2) and (3), no natu13 ral or adoptive parent or other individual (collec14 tively referred to in this subsection as ‘the individ15 ual’) who is living with and exercising parental con16 trol over a child under the age of 18 who has an ab17 sent parent shall be eligible to participate in the food

18 stamp program unless the individual cooperates with

19 the State agency administering the program estab20 lished under part D of title IV of the Social Security

21 Act (42 U.S.C. 651 et seq.)—

22 ‘‘(A) in establishing the paternity of the

23 child (if the child is born out of wedlock); and

24 ‘‘(B) in obtaining support for—

25 ‘‘(i) the child; or
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1 ‘‘(ii) the individual and the child.

2 ‘‘(2) GOOD CAUSE FOR NONCOOPERATION.—

3 Paragraph (1) shall not apply to the individual if

4 good cause is found for refusing to cooperate, as de5 termined by the State agency in accordance with

6 standards prescribed by the Secretary in consulta7 tion with the Secretary of Health and Human Serv8 ices. The standards shall take into consideration cir9 cumstances under which cooperation may be against

10 the best interests of the child.

11 ‘‘(3) FEES.—Paragraph (1) shall not require

12 the payment of a fee or other cost for services pro13 vided under part D of title IV of the Social Security

14 Act (42 U.S.C. 651 et seq.).

15 ‘‘(m) NON-CUSTODIAL PARENT’S COOPERATION

16 WITH CHILD SUPPORT AGENCIES.—

17 ‘‘(1) IN GENERAL.—At the option of a State

18 agency, subject to paragraphs (2) and (3), a puta19 tive or identified non-custodial parent of a child

20 under the age of 18 (referred to in this subsection

21 as ‘the individual’) shall not be eligible to participate

22 in the food stamp program if the individual refuses

23 to cooperate with the State agency administering the

24 program established under part D of title IV of the

25 Social Security Act (42 U.S.C. 651 et seq.)—
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1 ‘‘(A) in establishing the paternity of the

2 child (if the child is born out of wedlock); and

3 ‘‘(B) in providing support for the child.

4 ‘‘(2) REFUSAL TO COOPERATE.—

5 ‘‘(A) GUIDELINES.—The Secretary, in con6 sultation with the Secretary of Health and

7 Human Services, shall develop guidelines on

8 what constitutes a refusal to cooperate under

9 paragraph (1).

10 ‘‘(B) PROCEDURES.—The State agency

11 shall develop procedures, using guidelines devel12 oped under subparagraph (A), for determining

13 whether an individual is refusing to cooperate

14 under paragraph (1).

15 ‘‘(3) FEES.—Paragraph (1) shall not require

16 the payment of a fee or other cost for services pro17 vided under part D of title IV of the Social Security

18 Act (42 U.S.C. 651 et seq.).

19 ‘‘(4) PRIVACY.—The State agency shall provide

20 safeguards to restrict the use of information col21 lected by a State agency administering the program

22 established under part D of title IV of the Social Se23 curity Act (42 U.S.C. 651 et seq.) to purposes for

24 which the information is collected.’’.
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1 SEC. 1032. DISQUALIFICATION RELATING TO CHILD SUP2 PORT ARREARS.

3 Section 6 of the Food Stamp Act of 1977 (7 U.S.C.

4 2015), as amended by section 1031, is further amended

5 by inserting after subsection (m) the following:

6 ‘‘(n) DISQUALIFICATION FOR CHILD SUPPORT AR7 REARS.—

8 ‘‘(1) IN GENERAL.—At the option of the State

9 agency, no individual shall be eligible to participate

10 in the food stamp program as a member of any

11 household during any month that the individual is

12 delinquent in any payment due under a court order

13 for the support of a child of the individual.

14 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

15 apply if—

16 ‘‘(A) a court is allowing the individual to

17 delay payment; or

18 ‘‘(B) the individual is complying with a

19 payment plan approved by a court or the State

20 agency designated under part D of title IV of

21 the Social Security Act (42 U.S.C. 651 et seq.)

22 to provide support for the child of the individ23 ual.’’.

24 SEC. 1033. WORK REQUIREMENT.

25 (a) IN GENERAL.—Section 6 of the Food Stamp Act

26 of 1977 (7 U.S.C. 2015), as amended by section 1032,
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1 is further amended by inserting after subsection (n) the

2 following:

3 ‘‘(o) WORK REQUIREMENT.—

4 ‘‘(1) DEFINITION OF WORK PROGRAM.—In this

5 subsection, the term ‘work program’ means—

6 ‘‘(A) a program under the Job Training

7 Partnership Act (29 U.S.C. 1501 et seq.);

8 ‘‘(B) a program under section 236 of the

9 Trade Act of 1974 (19 U.S.C. 2296); or

10 ‘‘(C) a program of employment or training

11 operated or supervised by a State or political

12 subdivision of a State that meets standards ap13 proved by the Governor of the State, including

14 a program under section 6(d)(4), other than a

15 job search program or a job search training

16 program.

17 ‘‘(2) WORK REQUIREMENT.—Subject to the

18 other provisions of this subsection, no individual

19 shall be eligible to participate in the food stamp pro20 gram as a member of any household if, during the

21 preceding 12-month period, the individual received

22 food stamp benefits for not less than 4 months dur23 ing which the individual did not—

24 ‘‘(A) work 20 hours or more per week,

25 averaged monthly; or
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1 ‘‘(B) participate in and comply with the re2 quirements of a work program for 20 hours or

3 more per week, as determined by the State

4 agency; or

5 ‘‘(C) participate in a program under sec6 tion 20 or a comparable program established by

7 a State or political subdivision of a State.

8 ‘‘(3) EXCEPTION.—Paragraph (2) shall not

9 apply to an individual if the individual is—

10 ‘‘(A) under 18 or over 50 years of age;

11 ‘‘(B) medically certified as physically or

12 mentally unfit for employment;

13 ‘‘(C) a parent or other member of a house14 hold with responsibility for a dependent child;

15 ‘‘(D) otherwise exempt under section

16 6(d)(2); or

17 ‘‘(E) a pregnant woman.

18 ‘‘(4) WAIVER.—

19 ‘‘(A) IN GENERAL.—On the request of a

20 State agency, the Secretary may waive the ap21 plicability of paragraph (2) to any group of in22 dividuals in the State if the Secretary makes a

23 determination that the area in which the indi24 viduals reside—
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1 ‘‘(i) has an unemployment rate of over

2 10 percent; or

3 ‘‘(ii) does not have a sufficient num4 ber of jobs to provide employment for the

5 individuals.

6 ‘‘(B) REPORT.—The Secretary shall report

7 the basis for a waiver under subparagraph (A)

8 to the Committee on Agriculture of the House

9 of Representatives and the Committee on Agri10 culture, Nutrition, and Forestry of the Senate.

11 ‘‘(5) SUBSEQUENT ELIGIBILITY.—

12 ‘‘(A) IN GENERAL.—Paragraph (2) shall

13 cease to apply to an individual if, during a 30-

14 day period, the individual—

15 ‘‘(i) works 80 or more hours;

16 ‘‘(ii) participates in and complies with

17 the requirements of a work program for 80

18 or more hours, as determined by a State

19 agency; or

20 ‘‘(iii) participates in a program under

21 section 20 or a comparable program estab22 lished by a State or political subdivision of

23 a State.

24 ‘‘(B) LIMITATION.—During the subsequent

25 12-month period, the individual shall be eligible
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1 to participate in the food stamp program for

2 not more than 4 months during which the indi3 vidual does not—

4 ‘‘(i) work 20 hours or more per week,

5 averaged monthly;

6 ‘‘(ii) participate in and comply with

7 the requirements of a work program for 20

8 hours or more per week, as determined by

9 the State agency; or

10 ‘‘(iii) participate in a program under

11 section 20 or a comparable program estab12 lished by a State or political subdivision of

13 a State.’’.

14 (b) TRANSITION PROVISION.—Prior to 1 year after

15 the date of enactment of this Act, the term ‘‘preceding

16 12-month period’’ in section 6(o) of the Food Stamp Act

17 of 1977, as amended by subsection (a), means the preced18 ing period that begins on the date of enactment of this

19 Act.

20 SEC. 1034. ENCOURAGE ELECTRONIC BENEFIT TRANSFER

21 SYSTEMS.

22 (a) IN GENERAL.—Section 7(i) of the Food Stamp

23 Act of 1977 (7 U.S.C. 2016(i)) is amended—

24 (1) by striking paragraph (1) and inserting the

25 following:
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1 ‘‘(1) ELECTRONIC BENEFIT TRANSFERS.—

2 ‘‘(A) IMPLEMENTATION.—Each State

3 agency shall implement an electronic benefit

4 transfer system in which household benefits de5 termined under section 8(a) or 24 are issued

6 from and stored in a central databank before

7 October 1, 2002, unless the Secretary provides

8 a waiver for a State agency that faces unusual

9 barriers to implementing an electronic benefit

10 transfer system.

11 ‘‘(B) TIMELY IMPLEMENTATION.—State

12 agencies are encouraged to implement an elec13 tronic benefit transfer system under subpara14 graph (A) as soon as practicable.

15 ‘‘(C) STATE FLEXIBILITY.—Subject to

16 paragraph (2), a State agency may procure and

17 implement an electronic benefit transfer system

18 under the terms, conditions, and design that

19 the State agency considers appropriate.

20 ‘‘(D) OPERATION.—An electronic benefit

21 transfer system should take into account gen22 erally accepted standard operating rules based

23 on—

24 ‘‘(i) commercial electronic funds

25 transfer technology;
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1 ‘‘(ii) the need to permit interstate op2 eration and law enforcement monitoring;

3 and

4 ‘‘(iii) the need to permit monitoring

5 and investigations by authorized law en6 forcement agencies.’’;

7 (2) in paragraph (2)—

8 (A) by striking ‘‘effective no later than

9 April 1, 1992,’’;

10 (B) in subparagraph (A)—

11 (i) by striking ‘‘, in any 1 year,’’; and

12 (ii) by striking ‘‘on-line’’;

13 (C) by striking subparagraph (D) and in14 serting the following:

15 ‘‘(D)(i) measures to maximize the security

16 of a system using the most recent technology

17 available that the State agency considers appro18 priate and cost effective and which may include

19 personal identification numbers, photographic

20 identification on electronic benefit transfer

21 cards, and other measures to protect against

22 fraud and abuse; and

23 ‘‘(ii) effective not later than 2 years after

24 the effective date of this clause, to the extent

25 practicable, measures that permit a system to
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1 differentiate items of food that may be acquired

2 with an allotment from items of food that may

3 not be acquired with an allotment.’’;

4 (D) in subparagraph (G), by striking

5 ‘‘and’’ at the end;

6 (E) in subparagraph (H), by striking the

7 period at the end and inserting ‘‘; and’’; and

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

9 ‘‘(I) procurement standards.’’; and

10 (3) by adding at the end the following:

11 ‘‘(7) REPLACEMENT OF BENEFITS.—Regula12 tions issued by the Secretary regarding the replace13 ment of benefits and liability for replacement of ben14 efits under an electronic benefit transfer system

15 shall be similar to the regulations in effect for a

16 paper food stamp issuance system.

17 ‘‘(8) REPLACEMENT CARD FEE.—A State agen18 cy may collect a charge for replacement of an elec19 tronic benefit transfer card by reducing the monthly

20 allotment of the household receiving the replacement

21 card.

22 ‘‘(9) OPTIONAL PHOTOGRAPHIC IDENTIFICA23 TION.—

24 ‘‘(A) IN GENERAL.—A State agency may

25 require that an electronic benefit card contain
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1 a photograph of 1 or more members of a house2 hold.

3 ‘‘(B) OTHER AUTHORIZED USERS.—If a

4 State agency requires a photograph on an elec5 tronic benefit card under subparagraph (A), the

6 State agency shall establish procedures to en7 sure that any other appropriate member of the

8 household or any authorized representative of

9 the household may utilize the card.’’.

10 (b) SENSE OF CONGRESS.—It is the sense of Con11 gress that a State that operates an electronic benefit

12 transfer system under the Food Stamp Act of 1977 (7

13 U.S.C. 2011 et seq.) should operate the system in a man14 ner that is compatible with electronic benefit transfer sys15 tems operated by other States.

16 SEC. 1035. VALUE OF MINIMUM ALLOTMENT.

17 The proviso in section 8(a) of the Food Stamp Act

18 of 1977 (7 U.S.C. 2017(a)) is amended by striking ‘‘, and

19 shall be adjusted’’ and all that follows through ‘‘$5’’.

20 SEC. 1036. BENEFITS ON RECERTIFICATION.

21 Section 8(c)(2)(B) of the Food Stamp Act of 1977

22 (7 U.S.C. 2017(c)(2)(B)) is amended by striking ‘‘of more

23 than one month’’.
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1 SEC. 1037. OPTIONAL COMBINED ALLOTMENT FOR EXPE2 DITED HOUSEHOLDS.

3 Section 8(c) of the Food Stamp Act of 1977 (7

4 U.S.C. 2017(c)) is amended by striking paragraph (3) and

5 inserting the following:

6 ‘‘(3) OPTIONAL COMBINED ALLOTMENT FOR

7 EXPEDITED HOUSEHOLDS.—A State agency may

8 provide to an eligible household applying after the

9 15th day of a month, in lieu of the initial allotment

10 of the household and the regular allotment of the

11 household for the following month, an allotment that

12 is equal to the total amount of the initial allotment

13 and the first regular allotment. The allotment shall

14 be provided in accordance with section 11(e)(3) in

15 the case of a household that is not entitled to expe16 dited service and in accordance with paragraphs (3)

17 and (9) of section 11(e) in the case of a household

18 that is entitled to expedited service.’’.

19 SEC. 1038. FAILURE TO COMPLY WITH OTHER MEANS-TEST20 ED PUBLIC ASSISTANCE PROGRAMS.

21 Section 8 of the Food Stamp Act of 1977 (7 U.S.C.

22 2017) is amended by striking subsection (d) and inserting

23 the following:

24 ‘‘(d) REDUCTION OF PUBLIC ASSISTANCE BENE25 FITS.—
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1 ‘‘(1) IN GENERAL.—If the benefits of a house2 hold are reduced under a Federal, State, or local law

3 relating to a means-tested public assistance program

4 for the failure of a member of the household to per5 form an action required under the law or program,

6 for the duration of the reduction—

7 ‘‘(A) the household may not receive an in8 creased allotment as the result of a decrease in

9 the income of the household to the extent that

10 the decrease is the result of the reduction; and

11 ‘‘(B) the State agency may reduce the al12 lotment of the household by not more than 25

13 percent.

14 ‘‘(2) RULES AND PROCEDURES.—If the allot15 ment of a household is reduced under this subsection

16 for a failure to perform an action required under

17 part A of title IV of the Social Security Act (42

18 U.S.C. 601 et seq.), the State agency may use the

19 rules and procedures that apply under part A of title

20 IV of the Act to reduce the allotment under the food

21 stamp program.’’.

22 SEC. 1039. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN

23 CENTERS.

24 Section 8 of the Food Stamp Act of 1977 (7 U.S.C.

25 2017) is amended by adding at the end the following:
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1 ‘‘(f) ALLOTMENTS FOR HOUSEHOLDS RESIDING IN

2 CENTERS.—

3 ‘‘(1) IN GENERAL.—In the case of an individual

4 who resides in a center for the purpose of a drug or

5 alcoholic treatment program described in the last

6 sentence of section 3(i), a State agency may provide

7 an allotment for the individual to—

8 ‘‘(A) the center as an authorized represent9 ative of the individual for a period that is less

10 than 1 month; and

11 ‘‘(B) the individual, if the individual leaves

12 the center.

13 ‘‘(2) DIRECT PAYMENT.—A State agency may

14 require an individual referred to in paragraph (1) to

15 designate the center in which the individual resides

16 as the authorized representative of the individual for

17 the purpose of receiving an allotment.’’.

18 SEC. 1040. CONDITION PRECEDENT FOR APPROVAL OF RE19 TAIL FOOD STORES AND WHOLESALE FOOD

20 CONCERNS.

21 Section 9(a)(1) of the Food Stamp Act of 1977 (7

22 U.S.C. 2018(a)(1)) is amended by adding at the end the

23 following: ‘‘No retail food store or wholesale food concern

24 of a type determined by the Secretary, based on factors

25 that include size, location, and type of items sold, shall
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1 be approved to be authorized or reauthorized for participa2 tion in the food stamp program unless an authorized em3 ployee of the Department of Agriculture, a designee of the

4 Secretary, or, if practicable, an official of the State or local

5 government designated by the Secretary has visited the

6 store or concern for the purpose of determining whether

7 the store or concern should be approved or reauthorized,

8 as appropriate.’’.

9 SEC. 1041. AUTHORITY TO ESTABLISH AUTHORIZATION PE10 RIODS.

11 Section 9(a) of the Food Stamp Act of 1977 (7

12 U.S.C. 2018(a)) is amended by adding at the end the fol13 lowing:

14 ‘‘(3) AUTHORIZATION PERIODS.—The Secretary

15 shall establish specific time periods during which au16 thorization to accept and redeem coupons, or to re17 deem benefits through an electronic benefit transfer

18 system, shall be valid under the food stamp pro19 gram.’’.

20 SEC. 1042. INFORMATION FOR VERIFYING ELIGIBILITY FOR

21 AUTHORIZATION.

22 Section 9(c) of the Food Stamp Act of 1977 (7

23 U.S.C. 2018(c)) is amended—
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1 (1) in the first sentence, by inserting ‘‘, which

2 may include relevant income and sales tax filing doc3 uments,’’ after ‘‘submit information’’; and

4 (2) by inserting after the first sentence the fol5 lowing: ‘‘The regulations may require retail food

6 stores and wholesale food concerns to provide writ7 ten authorization for the Secretary to verify all rel8 evant tax filings with appropriate agencies and to

9 obtain corroborating documentation from other

10 sources so that the accuracy of information provided

11 by the stores and concerns may be verified.’’.

12 SEC. 1043. WAITING PERIOD FOR STORES THAT FAIL TO

13 MEET AUTHORIZATION CRITERIA.

14 Section 9(d) of the Food Stamp Act of 1977 (7

15 U.S.C. 2018(d)) is amended by adding at the end the fol16 lowing: ‘‘A retail food store or wholesale food concern that

17 is denied approval to accept and redeem coupons because

18 the store or concern does not meet criteria for approval

19 established by the Secretary may not, for at least 6

20 months, submit a new application to participate in the

21 program. The Secretary may establish a longer time pe22 riod under the preceding sentence, including permanent

23 disqualification, that reflects the severity of the basis of

24 the denial.’’.
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1 SEC. 1044. OPERATION OF FOOD STAMP OFFICES.

2 Section 11 of the Food Stamp Act of 1977 (7 U.S.C.

3 2020), as amended by section 1020(b), is further amend4 ed—

5 (1) in subsection (e)—

6 (A) by striking paragraph (2) and insert7 ing the following:

8 ‘‘(2)(A) that the State agency shall establish

9 procedures governing the operation of food stamp of10 fices that the State agency determines best serve

11 households in the State, including households with

12 special needs, such as households with elderly or dis13 abled members, households in rural areas with low14 income members, homeless individuals, households

15 residing on reservations, and households in areas in

16 which a substantial number of members of low-in17 come households speak a language other than Eng18 lish.

19 ‘‘(B) In carrying out subparagraph (A), a State

20 agency—

21 ‘‘(i) shall provide timely, accurate, and fair

22 service to applicants for, and participants in,

23 the food stamp program;

24 ‘‘(ii) shall develop an application contain25 ing the information necessary to comply with

26 this Act;
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1 ‘‘(iii) shall permit an applicant household

2 to apply to participate in the program on the

3 same day that the household first contacts a

4 food stamp office in person during office hours;

5 ‘‘(iv) shall consider an application that

6 contains the name, address, and signature of

7 the applicant to be filed on the date the appli8 cant submits the application;

9 ‘‘(v) shall require that an adult representa10 tive of each applicant household certify in writ11 ing, under penalty of perjury, that—

12 ‘‘(I) the information contained in the

13 application is true; and

14 ‘‘(II) all members of the household

15 are citizens or are aliens eligible to receive

16 food stamps under section 6(f);

17 ‘‘(vi) shall provide a method of certifying

18 and issuing coupons to eligible homeless individ19 uals, to ensure that participation in the food

20 stamp program is limited to eligible households;

21 and

22 ‘‘(vii) may establish operating procedures

23 that vary for local food stamp offices to reflect

24 regional and local differences within the State.
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1 ‘‘(C) Nothing in this Act shall prohibit the use

2 of signatures provided and maintained electronically,

3 storage of records using automated retrieval systems

4 only, or any other feature of a State agency’s appli5 cation system that does not rely exclusively on the

6 collection and retention of paper applications or

7 other records.

8 ‘‘(D) The signature of any adult under this

9 paragraph shall be considered sufficient to comply

10 with any provision of Federal law requiring a house11 hold member to sign an application or statement.’’;

12 (B) in paragraph (3)—

13 (i) by striking ‘‘shall—’’ and all that

14 follows through ‘‘provide each’’ and insert15 ing ‘‘shall provide each’’; and

16 (ii) by striking ‘‘(B) assist’’ and all

17 that follows through ‘‘representative of the

18 State agency;’’;

19 (C) by striking paragraphs (14) and (25);

20 (D)(i) by redesignating paragraphs (15)

21 through (24) as paragraphs (14) through (23),

22 respectively; and

23 (ii) by redesignating paragraph (26) as

24 paragraph (24); and

25 (2) in subsection (i)—
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1 (A) by striking ‘‘(i) Notwithstanding’’ and

2 all that follows through ‘‘(2)’’ and inserting the

3 following:

4 ‘‘(i) APPLICATION AND DENIAL PROCEDURES.—

5 ‘‘(1) APPLICATION PROCEDURES.—Notwith6 standing any other provision of law,’’; and

7 (B) by striking ‘‘; (3) households’’ and all

8 that follows through ‘‘title IV of the Social Se9 curity Act. No’’ and inserting a period and the

10 following:

11 ‘‘(2) DENIAL AND TERMINATION.—Other than

12 in a case of disqualification as a penalty for failure

13 to comply with a public assistance program rule or

14 regulation, no’’.

15 SEC. 1045. STATE EMPLOYEE AND TRAINING STANDARDS.

16 Section 11(e)(6) of the Food Stamp Act of 1977 (7

17 U.S.C. 2020(e)(6)) is amended—

18 (1) by striking ‘‘that (A) the’’ and inserting

19 ‘‘that—

20 ‘‘(A) the’’;

21 (2) by striking ‘‘Act; (B) the’’ and inserting

22 ‘‘Act; and

23 ‘‘(B) the’’;
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1 (3) in subparagraph (B), by striking ‘‘United

2 States Civil Service Commission’’ and inserting ‘‘Of3 fice of Personnel Management’’; and

4 (4) by striking subparagraphs (C) through (E).

5 SEC. 1046. EXCHANGE OF LAW ENFORCEMENT INFORMA6 TION.

7 Section 11(e)(8) of the Food Stamp Act of 1977 (7

8 U.S.C. 2020(e)(8)) is amended—

9 (1) by striking ‘‘that (A) such’’ and inserting

10 the following: ‘‘that—

11 ‘‘(A) the’’;

12 (2) by striking ‘‘law, (B) notwithstanding’’ and

13 inserting the following: ‘‘law;

14 ‘‘(B) notwithstanding’’;

15 (3) by striking ‘‘Act, and (C) such’’ and insert16 ing the following: ‘‘Act;

17 ‘‘(C) the’’; and

18 (4) by adding at the end the following:

19 ‘‘(D) notwithstanding any other provision

20 of law, the address, social security number, and,

21 if available, photograph of any member of a

22 household shall be made available, on request,

23 to any Federal, State, or local law enforcement

24 officer if the officer furnishes the State agency
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1 with the name of the member and notifies the

2 agency that—

3 ‘‘(i) the member—

4 ‘‘(I) is fleeing to avoid prosecu5 tion, or custody or confinement after

6 conviction, for a crime (or attempt to

7 commit a crime) that, under the law

8 of the place the member is fleeing, is

9 a felony (or, in the case of New Jer10 sey, a high misdemeanor), or is violat11 ing a condition of probation or parole

12 imposed under Federal or State law;

13 or

14 ‘‘(II) has information that is nec15 essary for the officer to conduct an of16 ficial duty related to subclause (I);

17 ‘‘(ii) locating or apprehending the

18 member is an official duty; and

19 ‘‘(iii) the request is being made in the

20 proper exercise of an official duty; and

21 ‘‘(E) the safeguards shall not prevent com22 pliance with paragraph (16);’’.

23 SEC. 1047. EXPEDITED COUPON SERVICE.

24 Section 11(e)(9) of the Food Stamp Act of 1977 (7

25 U.S.C. 2020(e)(9)) is amended—
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1 (1) in subparagraph (A)—

2 (A) by striking ‘‘five days’’ and inserting

3 ‘‘7 days’’; and

4 (B) by inserting ‘‘and’’ at the end;

5 (2) by striking subparagraphs (B) and (C);

6 (3) by redesignating subparagraph (D) as sub7 paragraph (B); and

8 (4) in subparagraph (B), as redesignated by

9 paragraph (3), by striking ‘‘, (B), or (C)’’.

10 SEC. 1048. WITHDRAWING FAIR HEARING REQUESTS.

11 Section 11(e)(10) of the Food Stamp Act of 1977 (7

12 U.S.C. 2020(e)(10)) is amended by inserting before the

13 semicolon at the end a period and the following: ‘‘At the

14 option of a State, at any time prior to a fair hearing deter15 mination under this paragraph, a household may with16 draw, orally or in writing, a request by the household for

17 the fair hearing. If the withdrawal request is an oral re18 quest, the State agency shall provide a written notice to

19 the household confirming the withdrawal request and pro20 viding the household with an opportunity to request a

21 hearing’’.

22 SEC. 1049. INCOME, ELIGIBILITY, AND IMMIGRATION STA23 TUS VERIFICATION SYSTEMS.

24 Section 11 of the Food Stamp Act of 1977 (7 U.S.C.

25 2020) is amended—
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1 (1) in subsection (e)(18), as redesignated by

2 section 1044(1)(D)—

3 (A) by striking ‘‘that information is’’ and

4 inserting ‘‘at the option of the State agency,

5 that information may be’’; and

6 (B) by striking ‘‘shall be requested’’ and

7 inserting ‘‘may be requested’’; and

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

9 ‘‘(p) STATE VERIFICATION OPTION.—Notwithstand10 ing any other provision of law, in carrying out the food

11 stamp program, a State agency shall not be required to

12 use an income and eligibility or an immigration status ver13 ification system established under section 1137 of the So14 cial Security Act (42 U.S.C. 1320b–7).’’.

15 SEC. 1050. DISQUALIFICATION OF RETAILERS WHO INTEN16 TIONALLY SUBMIT FALSIFIED APPLICATIONS.

17 Section 12(b) of the Food Stamp Act of 1977 (7

18 U.S.C. 2021(b)) is amended—

19 (1) in paragraph (2), by striking ‘‘and’’ at the

20 end;

21 (2) in paragraph (3), by striking the period at

22 the end and inserting ‘‘; and’’; and

23 (3) by adding at the end the following:

24 ‘‘(4) for a reasonable period of time to be deter25 mined by the Secretary, including permanent dis-
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1 qualification, on the knowing submission of an appli2 cation for the approval or reauthorization to accept

3 and redeem coupons that contains false information

4 about a substantive matter that was a part of the

5 application.’’.

6 SEC. 1051. DISQUALIFICATION OF RETAILERS WHO ARE

7 DISQUALIFIED UNDER THE WIC PROGRAM.

8 Section 12 of the Food Stamp Act of 1977 (7 U.S.C.

9 2021) is amended by adding at the end the following:

10 ‘‘(g) DISQUALIFICATION OF RETAILERS WHO ARE

11 DISQUALIFIED UNDER THE WIC PROGRAM.—

12 ‘‘(1) IN GENERAL.—The Secretary shall issue

13 regulations providing criteria for the disqualification

14 under this Act of an approved retail food store and

15 a wholesale food concern that is disqualified from

16 accepting benefits under the special supplemental

17 nutrition program for women, infants, and children

18 established under section 17 of the Child Nutrition

19 Act of 1966 (7 U.S.C. 1786).

20 ‘‘(2) TERMS.—A disqualification under para21 graph (1)—

22 ‘‘(A) shall be for the same length of time

23 as the disqualification from the program re24 ferred to in paragraph (1);
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1 ‘‘(B) may begin at a later date than the

2 disqualification from the program referred to in

3 paragraph (1); and

4 ‘‘(C) notwithstanding section 14, shall not

5 be subject to judicial or administrative review.’’.

6 SEC. 1052. COLLECTION OF OVERISSUANCES.

7 (a) COLLECTION OF OVERISSUANCES.—Section 13 of

8 the Food Stamp Act of 1977 (7 U.S.C. 2022) is amend9 ed—

10 (1) by striking subsection (b) and inserting the

11 following:

12 ‘‘(b) COLLECTION OF OVERISSUANCES.—

13 ‘‘(1) IN GENERAL.—Except as otherwise pro14 vided in this subsection, a State agency shall collect

15 any overissuance of coupons issued to a household

16 by—

17 ‘‘(A) reducing the allotment of the house18 hold;

19 ‘‘(B) withholding amounts from unemploy20 ment compensation from a member of the

21 household under subsection (c);

22 ‘‘(C) recovering from Federal pay or a

23 Federal income tax refund under subsection

24 (d); or

25 ‘‘(D) any other means.
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1 ‘‘(2) COST EFFECTIVENESS.—Paragraph (1)

2 shall not apply if the State agency demonstrates to

3 the satisfaction of the Secretary that all of the

4 means referred to in paragraph (1) are not cost ef5 fective.

6 ‘‘(3) MAXIMUM REDUCTION ABSENT FRAUD.—

7 If a household received an overissuance of coupons

8 without any member of the household being found

9 ineligible to participate in the program under section

10 6(b)(1) and a State agency elects to reduce the allot11 ment of the household under paragraph (1)(A), the

12 State agency shall not reduce the monthly allotment

13 of the household under paragraph (1)(A) by an

14 amount in excess of the greater of—

15 ‘‘(A) 10 percent of the monthly allotment

16 of the household; or

17 ‘‘(B) $10.

18 ‘‘(4) PROCEDURES.—A State agency shall col19 lect an overissuance of coupons issued to a house20 hold under paragraph (1) in accordance with the re21 quirements established by the State agency for pro22 viding notice, electing a means of payment, and es23 tablishing a time schedule for payment.’’; and

24 (2) in subsection (d)—
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1 (A) by striking ‘‘as determined under sub2 section (b) and except for claims arising from

3 an error of the State agency,’’ and inserting ‘‘,

4 as determined under subsection (b)(1),’’; and

5 (B) by inserting before the period at the

6 end the following: ‘‘or a Federal income tax re7 fund as authorized by section 3720A of title 31,

8 United States Code’’.

9 (b) CONFORMING AMENDMENTS.—Section 11(e)(8)

10 of the Act (7 U.S.C. 2020(e)(8)) is amended—

11 (1) by striking ‘‘and excluding claims’’ and all

12 that follows through ‘‘such section’’; and

13 (2) by inserting before the semicolon at the end

14 the following: ‘‘or a Federal income tax refund as

15 authorized by section 3720A of title 31, United

16 States Code’’.

17 (c) RETENTION RATE.—Section 16(a) of the Act (7

18 U.S.C. 2025(a)) is amended by striking ‘‘25 percent dur19 ing the period beginning October 1, 1990’’ and all that

20 follows through ‘‘error of a State agency’’ and inserting

21 the following: ‘‘25 percent of the overissuances collected

22 by the State agency under section 13, except those

23 overissuances arising from an error of the State agency’’.
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1 SEC. 1053. AUTHORITY TO SUSPEND STORES VIOLATING

2 PROGRAM REQUIREMENTS PENDING ADMIN3 ISTRATIVE AND JUDICIAL REVIEW.

4 Section 14(a) of the Food Stamp Act of 1977 (7

5 U.S.C. 2023(a)) is amended—

6 (1) by redesignating the first through seven7 teenth sentences as paragraphs (1) through (17), re8 spectively; and

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

10 ‘‘(18) SUSPENSION OF STORES PENDING RE11 VIEW.—Notwithstanding any other provision of this

12 subsection, any permanent disqualification of a retail

13 food store or wholesale food concern under para14 graph (3) or (4) of section 12(b) shall be effective

15 from the date of receipt of the notice of disqualifica16 tion. If the disqualification is reversed through ad17 ministrative or judicial review, the Secretary shall

18 not be liable for the value of any sales lost during

19 the disqualification period.’’.

20 SEC. 1054. EXPANDED CRIMINAL FORFEITURE FOR VIOLA21 TIONS.

22 (a) FORFEITURE OF ITEMS EXCHANGED IN FOOD

23 STAMP TRAFFICKING.—The first sentence of section

24 15(g) of the Food Stamp Act of 1977 (7 U.S.C. 2024(g))

25 is amended by striking ‘‘or intended to be furnished’’.
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1 (b) CRIMINAL FORFEITURE.—Section 15 of the Act

2 (7 U.S.C. 2024) is amended by adding at the end the fol3 lowing:

4 ‘‘(h) CRIMINAL FORFEITURE.—

5 ‘‘(1) IN GENERAL.—In imposing a sentence on

6 a person convicted of an offense in violation of sub7 section (b) or (c), a court shall order, in addition to

8 any other sentence imposed under this subsection,

9 that the person forfeit to the United States all prop10 erty described in paragraph (2).

11 ‘‘(2) PROPERTY SUBJECT TO FORFEITURE.—All

12 property, real and personal, used in a transaction or

13 attempted transaction, to commit, or to facilitate the

14 commission of, a violation (other than a mis15 demeanor) of subsection (b) or (c), or proceeds

16 traceable to a violation of subsection (b) or (c), shall

17 be subject to forfeiture to the United States under

18 paragraph (1).

19 ‘‘(3) INTEREST OF OWNER.—No interest in

20 property shall be forfeited under this subsection as

21 the result of any act or omission established by the

22 owner of the interest to have been committed or

23 omitted without the knowledge or consent of the

24 owner.
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1 ‘‘(4) PROCEEDS.—The proceeds from any sale

2 of forfeited property and any monies forfeited under

3 this subsection shall be used—

4 ‘‘(A) first, to reimburse the Department of

5 Justice for the costs incurred by the Depart6 ment to initiate and complete the forfeiture pro7 ceeding;

8 ‘‘(B) second, to reimburse the Department

9 of Agriculture Office of Inspector General for

10 any costs the Office incurred in the law enforce11 ment effort resulting in the forfeiture;

12 ‘‘(C) third, to reimburse any Federal or

13 State law enforcement agency for any costs in14 curred in the law enforcement effort resulting

15 in the forfeiture; and

16 ‘‘(D) fourth, by the Secretary to carry out

17 the approval, reauthorization, and compliance

18 investigations of retail stores and wholesale

19 food concerns under section 9.’’.

20 SEC. 1055. LIMITATION OF FEDERAL MATCH.

21 Section 16(a)(4) of the Food Stamp Act of 1977 (7

22 U.S.C. 2025(a)(4)) is amended by inserting after the

23 comma at the end the following: ‘‘but not including re24 cruitment activities,’’.
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1 SEC. 1056. STANDARDS FOR ADMINISTRATION.

2 (a) IN GENERAL.—Section 16 of the Food Stamp Act

3 of 1977 (7 U.S.C. 2025) is amended by striking sub4 section (b).

5 (b) CONFORMING AMENDMENTS.—

6 (1) The first sentence of section 11(g) of the

7 Act (7 U.S.C. 2020(g)) is amended by striking ‘‘the

8 Secretary’s standards for the efficient and effective

9 administration of the program established under sec10 tion 16(b)(1) or’’.

11 (2) Section 16(c)(1)(B) of the Act (7 U.S.C.

12 2025(c)(1)(B)) is amended by striking ‘‘pursuant to

13 subsection (b)’’.

14 SEC. 1057. WORK SUPPLEMENTATION OR SUPPORT PRO15 GRAM.

16 Section 16 of the Food Stamp Act of 1977 (7 U.S.C.

17 2025), as amended by section 1056(a), is further amended

18 by inserting after subsection (a) the following:

19 ‘‘(b) WORK SUPPLEMENTATION OR SUPPORT PRO20 GRAM.—

21 ‘‘(1) DEFINITION OF WORK SUPPLEMENTATION

22 OR SUPPORT PROGRAM.—In this subsection, the

23 term ‘work supplementation or support program’

24 means a program under which, as determined by the

25 Secretary, public assistance (including any benefits

26 provided under a program established by the State
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1 and the food stamp program) is provided to an em2 ployer to be used for hiring and employing a public

3 assistance recipient who was not employed by the

4 employer at the time the public assistance recipient

5 entered the program.

6 ‘‘(2) PROGRAM.—A State agency may elect to

7 use an amount equal to the allotment that would

8 otherwise be issued to a household under the food

9 stamp program, but for the operation of this sub10 section, for the purpose of subsidizing or supporting

11 a job under a work supplementation or support pro12 gram established by the State.

13 ‘‘(3) PROCEDURE.—If a State agency makes an

14 election under paragraph (2) and identifies each

15 household that participates in the food stamp pro16 gram that contains an individual who is participat17 ing in the work supplementation or support pro18 gram—

19 ‘‘(A) the Secretary shall pay to the State

20 agency an amount equal to the value of the al21 lotment that the household would be eligible to

22 receive but for the operation of this subsection;

23 ‘‘(B) the State agency shall expend the

24 amount received under subparagraph (A) in ac25 cordance with the work supplementation or sup-
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1 port program in lieu of providing the allotment

2 that the household would receive but for the op3 eration of this subsection;

4 ‘‘(C) for purposes of—

5 ‘‘(i) sections 5 and 8(a), the amount

6 received under this subsection shall be ex7 cluded from household income and re8 sources; and

9 ‘‘(ii) section 8(b), the amount received

10 under this subsection shall be considered to

11 be the value of an allotment provided to

12 the household; and

13 ‘‘(D) the household shall not receive an al14 lotment from the State agency for the period

15 during which the member continues to partici16 pate in the work supplementation or support

17 program.

18 ‘‘(4) OTHER WORK REQUIREMENTS.—No indi19 vidual shall be excused, by reason of the fact that

20 a State has a work supplementation or support pro21 gram, from any work requirement under section

22 6(d), except during the periods in which the individ23 ual is employed under the work supplementation or

24 support program.
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1 ‘‘(5) LENGTH OF PARTICIPATION.—A State

2 agency shall provide a description of how the public

3 assistance recipients in the program shall, within a

4 specific period of time, be moved from supplemented

5 or supported employment to employment that is not

6 supplemented or supported.

7 ‘‘(6) DISPLACEMENT.—A work supplementation

8 or support program shall not displace the employ9 ment of individuals who are not supplemented or

10 supported.’’.

11 SEC. 1058. WAIVER AUTHORITY.

12 Section 17(b)(1) of the Food Stamp Act of 1977 (7

13 U.S.C. 2026(b)(1)) is amended—

14 (1) by redesignating subparagraph (B) as sub15 paragraph (C); and

16 (2) in subparagraph (A)—

17 (A) by striking the second sentence; and

18 (B) by striking ‘‘benefits to eligible house19 holds, including’’ and inserting the following:

20 ‘‘benefits to eligible households, and may waive

21 any requirement of this Act to the extent nec22 essary for the project to be conducted.

23 ‘‘(B) PROJECT REQUIREMENTS.—

24 ‘‘(i) PROGRAM GOAL.—The Secretary

25 may not conduct a project under subpara-
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1 graph (A) unless the project is consistent

2 with the goal of the food stamp program of

3 providing food assistance to raise levels of

4 nutrition among low-income individuals.

5 ‘‘(ii) PERMISSIBLE PROJECTS.—The

6 Secretary may conduct a project under

7 subparagraph (A) to—

8 ‘‘(I) improve program adminis9 tration;

10 ‘‘(II) increase the self-sufficiency

11 of food stamp recipients;

12 ‘‘(III) test innovative welfare re13 form strategies; and

14 ‘‘(IV) allow greater conformity

15 with the rules of other programs than

16 would be allowed but for this para17 graph.

18 ‘‘(iii) IMPERMISSIBLE PROJECTS.—

19 The Secretary may not conduct a project

20 under subparagraph (A) that—

21 ‘‘(I) involves the payment of the

22 value of an allotment in the form of

23 cash, unless the project was approved

24 prior to the date of enactment of this

25 subparagraph;
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1 ‘‘(II) substantially transfers

2 funds made available under this Act

3 to services or benefits provided pri4 marily through another public assist5 ance program; or

6 ‘‘(III) is not limited to a specific

7 time period.

8 ‘‘(iv) ADDITIONAL INCLUDED

9 PROJECTS.—Pilot or experimental projects

10 may include’’.

11 SEC. 1059. AUTHORIZATION OF PILOT PROJECTS.

12 Section 17(b)(1)(B) of the Food Stamp Act of 1977

13 (7 U.S.C. 2026(b)(1)(B)), as amended by section 1058,

14 is further amended—

15 (1) in clause (iv), by striking ‘‘coupons. Any

16 pilot’’ and inserting the following: ‘‘coupons.

17 ‘‘(v) CASH PAYMENT PILOT

18 PROJECTS.—Any pilot’’; and

19 (2) in clause (v), as so amended, by striking

20 ‘‘1995’’ and inserting ‘‘2002’’.

21 SEC. 1060. RESPONSE TO WAIVERS.

22 Section 17(b)(1) of the Food Stamp Act of 1977 (7

23 U.S.C. 2026(b)(1)), as amended by section 1058, is fur24 ther amended by adding at the end the following:

25 ‘‘(D) RESPONSE TO WAIVERS.—
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1 ‘‘(i) RESPONSE.—Not later than 60

2 days after the date of receiving a request

3 for a waiver under subparagraph (A), the

4 Secretary shall provide a response that—

5 ‘‘(I) approves the waiver request;

6 ‘‘(II) denies the waiver request

7 and explains any modification needed

8 for approval of the waiver request;

9 ‘‘(III) denies the waiver request

10 and explains the grounds for the de11 nial; or

12 ‘‘(IV) requests clarification of the

13 waiver request.

14 ‘‘(ii) FAILURE TO RESPOND.—If the

15 Secretary does not provide a response in

16 accordance with clause (i), the waiver shall

17 be considered approved, unless the ap18 proval is specifically prohibited by this Act.

19 ‘‘(iii) NOTICE OF DENIAL.—On denial

20 of a waiver request under clause (i)(III),

21 the Secretary shall provide a copy of the

22 waiver request and a description of the

23 reasons for the denial to the Committee on

24 Agriculture of the House of Representa-
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1 tives and the Committee on Agriculture,

2 Nutrition, and Forestry of the Senate.’’.

3 SEC. 1061. EMPLOYMENT INITIATIVES PROGRAM.

4 Section 17 of the Food Stamp Act of 1977 (7 U.S.C.

5 2026) is amended by striking subsection (d) and inserting

6 the following:

7 ‘‘(d) EMPLOYMENT INITIATIVES PROGRAM.—

8 ‘‘(1) ELECTION TO PARTICIPATE.—

9 ‘‘(A) IN GENERAL.—Subject to the other

10 provisions of this subsection, a State may elect

11 to carry out an employment initiatives program

12 under this subsection.

13 ‘‘(B) REQUIREMENT.—A State shall be eli14 gible to carry out an employment initiatives

15 program under this subsection only if not less

16 than 50 percent of the households that received

17 food stamp benefits during the summer of 1993

18 also received benefits under a State program

19 funded under part A of title IV of the Social

20 Security Act (42 U.S.C. 601 et seq.) during the

21 summer of 1993.

22 ‘‘(2) PROCEDURE.—

23 ‘‘(A) IN GENERAL.—A State that has

24 elected to carry out an employment initiatives

25 program under paragraph (1) may use amounts
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1 equal to the food stamp allotments that would

2 otherwise be issued to a household under the

3 food stamp program, but for the operation of

4 this subsection, to provide cash benefits in lieu

5 of the food stamp allotments to the household

6 if the household is eligible under paragraph (3).

7 ‘‘(B) PAYMENT.—The Secretary shall pay

8 to each State that has elected to carry out an

9 employment initiatives program under para10 graph (1) an amount equal to the value of the

11 allotment that each household would be eligible

12 to receive under this Act but for the operation

13 of this subsection.

14 ‘‘(C) OTHER PROVISIONS.—For purposes

15 of the food stamp program (other than this

16 subsection)—

17 ‘‘(i) cash assistance under this sub18 section shall be considered to be an allot19 ment; and

20 ‘‘(ii) each household receiving cash

21 benefits under this subsection shall not re22 ceive any other food stamp benefit for the

23 period for which the cash assistance is pro24 vided.
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1 ‘‘(D) ADDITIONAL PAYMENTS.—Each

2 State that has elected to carry out an employ3 ment initiatives program under paragraph (1)

4 shall—

5 ‘‘(i) increase the cash benefits pro6 vided to each household under this sub7 section to compensate for any State or

8 local sales tax that may be collected on

9 purchases of food by any household receiv10 ing cash benefits under this subsection, un11 less the Secretary determines on the basis

12 of information provided by the State that

13 the increase is unnecessary on the basis of

14 the limited nature of the items subject to

15 the State or local sales tax; and

16 ‘‘(ii) pay the cost of any increase in

17 cash benefits required by clause (i).

18 ‘‘(3) ELIGIBILITY.—A household shall be eligi19 ble to receive cash benefits under paragraph (2) if

20 an adult member of the household—

21 ‘‘(A) has worked in unsubsidized employ22 ment for not less than the preceding 90 days;

23 ‘‘(B) has earned not less than $350 per

24 month from the employment referred to in sub-
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1 paragraph (A) for not less than the preceding

2 90 days;

3 ‘‘(C)(i) is receiving benefits under a State

4 program funded under part A of title IV of the

5 Social Security Act (42 U.S.C. 601 et seq.); or

6 ‘‘(ii) was receiving benefits under a State

7 program funded under part A of title IV of the

8 Social Security Act (42 U.S.C. 601 et seq.) at

9 the time the member first received cash benefits

10 under this subsection and is no longer eligible

11 for the State program because of earned in12 come;

13 ‘‘(D) is continuing to earn not less than

14 $350 per month from the employment referred

15 to in subparagraph (A); and

16 ‘‘(E) elects to receive cash benefits in lieu

17 of food stamp benefits under this subsection.

18 ‘‘(4) EVALUATION.—A State that operates a

19 program under this subsection for 2 years shall pro20 vide to the Secretary a written evaluation of the im21 pact of cash assistance under this subsection. The

22 State agency, with the concurrence of the Secretary,

23 shall determine the content of the evaluation.’’.
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1 SEC. 1062. REAUTHORIZATION.

2 The first sentence of section 18(a)(1) of the Food

3 Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended by

4 striking ‘‘1991 through 1997’’ and inserting ‘‘1996

5 through 2002’’.

6 SEC. 1063. SIMPLIFIED FOOD STAMP PROGRAM.

7 (a) IN GENERAL.—The Food Stamp Act of 1977 (7

8 U.S.C. 2011 et seq.) is amended by adding at the end

9 the following:

10 ‘‘SEC. 26. SIMPLIFIED FOOD STAMP PROGRAM.

11 ‘‘(a) DEFINITION OF FEDERAL COSTS.—In this sec12 tion, the term ‘Federal costs’ does not include any Federal

13 costs incurred under section 17.

14 ‘‘(b) ELECTION.—Subject to subsection (d), a State

15 may elect to carry out a Simplified Food Stamp Program

16 (referred to in this section as a ‘Program’), statewide or

17 in a political subdivision of the State, in accordance with

18 this section.

19 ‘‘(c) OPERATION OF PROGRAM.—If a State elects to

20 carry out a Program, within the State or a political sub21 division of the State—

22 ‘‘(1) a household in which all members receive

23 assistance under a State program funded under part

24 A of title IV of the Social Security Act (42 U.S.C.

25 601 et seq.) shall automatically be eligible to partici26 pate in the Program; and
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1 ‘‘(2) subject to subsection (f), benefits under

2 the Program shall be determined under rules and

3 procedures established by the State under—

4 ‘‘(A) a State program funded under part A

5 of title IV of the Social Security Act (42 U.S.C.

6 601 et seq.);

7 ‘‘(B) the food stamp program (other than

8 section 25); or

9 ‘‘(C) a combination of a State program

10 funded under part A of title IV of the Social

11 Security Act (42 U.S.C. 601 et seq.) and the

12 food stamp program (other than section 25).

13 ‘‘(d) APPROVAL OF PROGRAM.—

14 ‘‘(1) STATE PLAN.—A State agency may not

15 operate a Program unless the Secretary approves a

16 State plan for the operation of the Program under

17 paragraph (2).

18 ‘‘(2) APPROVAL OF PLAN.—The Secretary shall

19 approve any State plan to carry out a Program if

20 the Secretary determines that the plan—

21 ‘‘(A) complies with this section; and

22 ‘‘(B) contains sufficient documentation

23 that the plan will not increase Federal costs for

24 any fiscal year.

25 ‘‘(e) INCREASED FEDERAL COSTS.—
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1 ‘‘(1) DETERMINATION.—During each fiscal

2 year and not later than 90 days after the end of

3 each fiscal year, the Secretary shall determine

4 whether a Program being carried out by a State

5 agency is increasing Federal costs under this Act

6 above the Federal costs incurred under the food

7 stamp program in operation in the State or political

8 sub- division of the State for the fiscal year prior

9 to the implementation of the Program, adjusted for

10 any changes in—

11 ‘‘(A) participation;

12 ‘‘(B) the income of participants in the food

13 stamp program that is not attributable to pub14 lic assistance; and

15 ‘‘(C) the thrifty food plan under section

16 3(o).

17 ‘‘(2) NOTIFICATION.—If the Secretary deter18 mines that the Program has increased Federal costs

19 under this Act for any fiscal year or any portion of

20 any fiscal year, the Secretary shall notify the State

21 not later than 30 days after the Secretary makes the

22 determination under paragraph (1).

23 ‘‘(3) ENFORCEMENT.—

24 ‘‘(A) CORRECTIVE ACTION.—Not later

25 than 90 days after the date of a notification
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1 under paragraph (2), the State shall submit a

2 plan for approval by the Secretary for prompt

3 corrective action that is designed to prevent the

4 Program from increasing Federal costs under

5 this Act.

6 ‘‘(B) TERMINATION.—If the State does not

7 submit a plan under subparagraph (A) or carry

8 out a plan approved by the Secretary, the Sec9 retary shall terminate the approval of the State

10 agency operating the Program and the State

11 agency shall be ineligible to operate a future

12 Program.

13 ‘‘(f) RULES AND PROCEDURES.—

14 ‘‘(1) IN GENERAL.—In operating a Program, a

15 State or political subdivision of a State may follow

16 the rules and procedures established by the State or

17 political subdivision under a State program funded

18 under part A of title IV of the Social Security Act

19 (42 U.S.C. 601 et seq.) or under the food stamp

20 program.

21 ‘‘(2) STANDARDIZED DEDUCTIONS.—In operat22 ing a Program, a State or political subdivision of a

23 State may standardize the deductions provided

24 under section 5(e). In developing the standardized

25 deduction, the State shall consider the work ex-
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1 penses, dependent care costs, and shelter costs of

2 participating households.

3 ‘‘(3) REQUIREMENTS.—In operating a Pro4 gram, a State or political subdivision shall comply

5 with the requirements of—

6 ‘‘(A) subsections (a) through (g) of section

7 7;

8 ‘‘(B) section 8(a) (except that the income

9 of a household may be determined under a

10 State program funded under part A of title IV

11 of the Social Security Act (42 U.S.C. 601 et

12 seq.));

13 ‘‘(C) subsection (b) and (d) of section 8;

14 ‘‘(D) subsections (a), (c), (d), and (n) of

15 section 11;

16 ‘‘(E) paragraphs (8), (12), (16), (18),

17 (20), (24), and (25) of section 11(e);

18 ‘‘(F) section 11(e)(10) (or a comparable

19 requirement established by the State under a

20 State program funded under part A of title IV

21 of the Social Security Act (42 U.S.C. 601 et

22 seq.)); and

23 ‘‘(G) section 16.

24 ‘‘(4) LIMITATION ON ELIGIBILITY.—Notwith25 standing any other provision of this section, a house-
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1 hold may not receive benefits under this section as

2 a result of the eligibility of the household under a

3 State program funded under part A of title IV of the

4 Social Security Act (42 U.S.C. 601 et seq.), unless

5 the Secretary determines that any household with in6 come above 130 percent of the poverty guidelines is

7 not eligible for the program.’’.

8 (b) STATE PLAN PROVISIONS.—Section 11(e) of the

9 Act (7 U.S.C. 2020(e)), as amended by sections 1028(b)

10 and 1044, is further amended by adding at the end the

11 following:

12 ‘‘(25) if a State elects to carry out a Simplified

13 Food Stamp Program under section 26, the plans of

14 the State agency for operating the program, includ15 ing—

16 ‘‘(A) the rules and procedures to be fol17 lowed by the State agency to determine food

18 stamp benefits;

19 ‘‘(B) how the State agency will address the

20 needs of households that experience high shelter

21 costs in relation to the incomes of the house22 holds; and

23 ‘‘(C) a description of the method by which

24 the State agency will carry out a quality control

25 system under section 16(c).’’.
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1 (c) CONFORMING AMENDMENTS.—

2 (1) Section 8 of the Act (7 U.S.C. 2017), as

3 amended by section 1039, is further amended—

4 (A) by striking subsection (e); and

5 (B) by redesignating subsection (f) as sub6 section (e).

7 (2) Section 17 of the Act (7 U.S.C. 2026) is

8 amended—

9 (A) by striking subsection (i); and

10 (B) by redesignating subsections (j)

11 through (l) as subsections (i) through (k), re12 spectively.

13 SEC. 1064. STATE FOOD ASSISTANCE BLOCK GRANT.

14 (a) IN GENERAL.—The Food Stamp Act of 1977 (7

15 U.S.C. 2011 et seq.), as amended by section 1064, is fur16 ther amended by adding at the end the following:

17 ‘‘SEC. 27. STATE FOOD ASSISTANCE BLOCK GRANT.

18 ‘‘(a) DEFINITIONS.—In this section:

19 ‘‘(1) FOOD ASSISTANCE.—The term ‘food as20 sistance’ means assistance that may be used only to

21 obtain food, as defined in section 3(g).

22 ‘‘(2) STATE.—The term ‘State’ means each of

23 the 50 States, the District of Columbia, Guam, and

24 the Virgin Islands of the United States.
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1 ‘‘(b) ESTABLISHMENT.—The Secretary shall estab2 lish a program to make grants to States in accordance

3 with this section to provide—

4 ‘‘(1) food assistance to needy individuals and

5 families residing in the State; and

6 ‘‘(2) funds for administrative costs incurred in

7 providing the assistance.

8 ‘‘(c) ELECTION.—

9 ‘‘(1) IN GENERAL.—A State may annually elect

10 to participate in the program established under sub11 section (b) if the State—

12 ‘‘(A) has fully implemented an electronic

13 benefit transfer system that operates in the en14 tire State;

15 ‘‘(B) has a payment error rate under sec16 tion 16(c) that is not more than 6 percent as

17 announced most recently by the Secretary; or

18 ‘‘(C) has a payment error rate in excess of

19 6 percent and agrees to contribute non-Federal

20 funds for the fiscal year of the grant, for bene21 fits and administration of the State’s food as22 sistance program, the amount determined under

23 paragraph (2).

24 ‘‘(2) STATE MANDATORY CONTRIBUTIONS.—
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1 ‘‘(A) IN GENERAL.—In the case of a State

2 that elects to participate in the program under

3 paragraph (1)(C), the State shall agree to con4 tribute, for a fiscal year, an amount equal to—

5 ‘‘(A)(i) the benefits issued in the State;

6 multiplied by

7 ‘‘(ii) the payment error rate of the State;

8 minus

9 ‘‘(B)(i) the benefits issued in the State;

10 multiplied by

11 ‘‘(ii) 6 percent.

12 ‘‘(B) DETERMINATION.—Notwithstanding

13 sections 13 and 14, the calculation of the con14 tribution shall be based solely on the determina15 tion of the Secretary of the payment error rate.

16 ‘‘(C) DATA.—For purposes of implement17 ing subparagraph (A) for a fiscal year, the Sec18 retary shall use the data for the most recent

19 fiscal year available.

20 ‘‘(3) ELECTION LIMITATION.—

21 ‘‘(A) RE-ENTERING FOOD STAMP PRO22 GRAM.—A State that elects to participate in the

23 program under paragraph (1) may in a subse24 quent year decline to elect to participate in the

25 program and instead participate in the food
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•HR 3507 IH

1 stamp program in accordance with the other

2 sections of this Act.

3 ‘‘(B) LIMITATION.—Subsequent to re-en4 tering the food stamp program under subpara5 graph (A), the State shall only be eligible to

6 participate in the food stamp program in ac7 cordance with the other sections of this Act and

8 shall not be eligible to elect to participate in the

9 program established under subsection (b).

10 ‘‘(4) PROGRAM EXCLUSIVE.—

11 ‘‘(A) IN GENERAL.—A State that is par12 ticipating in the program established under sub13 section (b) shall not be subject to, or receive

14 any benefit under, this Act except as provided

15 in this section.

16 ‘‘(B) CONTRACT WITH FEDERAL GOVERN17 MENT.—Nothing in this section shall prohibit a

18 State from contracting with the Federal Gov19 ernment for the provision of services or mate20 rials necessary to carry out a program under

21 this section.

22 ‘‘(d) LEAD AGENCY.—A State desiring to receive a

23 grant under this section shall designate, in an application

24 submitted to the Secretary under subsection (e)(1), an ap-
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•HR 3507 IH

1 propriate State agency responsible for the administration

2 of the program under this section as the lead agency.

3 ‘‘(e) APPLICATION AND PLAN.—

4 ‘‘(1) APPLICATION.—To be eligible to receive

5 assistance under this section, a State shall prepare

6 and submit to the Secretary an application at such

7 time, in such manner, and containing such informa8 tion as the Secretary shall by regulation require, in9 cluding—

10 ‘‘(A) an assurance that the State will com11 ply with the requirements of this section;

12 ‘‘(B) a State plan that meets the require13 ments of paragraph (3); and

14 ‘‘(C) an assurance that the State will com15 ply with the requirements of the State plan

16 under paragraph (3).

17 ‘‘(2) ANNUAL PLAN.—The State plan contained

18 in the application under paragraph (1) shall be sub19 mitted for approval annually.

20 ‘‘(3) REQUIREMENTS OF PLAN.—

21 ‘‘(A) LEAD AGENCY.—The State plan shall

22 identify the lead agency.

23 ‘‘(B) USE OF BLOCK GRANT FUNDS.—The

24 State plan shall provide that the State shall use
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•HR 3507 IH

1 the amounts provided to the State for each fis2 cal year under this section—

3 ‘‘(i) to provide food assistance to

4 needy individuals and families residing in

5 the State, other than residents of institu6 tions who are ineligible for food stamps

7 under section 3(i); and

8 ‘‘(ii) to pay administrative costs in9 curred in providing the assistance.

10 ‘‘(C) GROUPS SERVED.—The State plan

11 shall describe how and to what extent the pro12 gram will serve specific groups of individuals

13 and families and how the treatment will differ

14 from treatment under the food stamp program

15 under the other sections of this Act of the indi16 viduals and families, including—

17 ‘‘(i) elderly individuals and families;

18 ‘‘(ii) migrants or seasonal farm19 workers;

20 ‘‘(iii) homeless individuals and fami21 lies;

22 ‘‘(iv) individuals and families who live

23 in institutions eligible under section 3(i);

24 ‘‘(v) individuals and families with

25 earnings; and
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1 ‘‘(vi) members of Indian tribes or trib2 al organizations.

3 ‘‘(D) ASSISTANCE FOR ENTIRE STATE.—

4 The State plan shall provide that benefits under

5 this section shall be available throughout the

6 entire State.

7 ‘‘(E) NOTICE AND HEARINGS.—The State

8 plan shall provide that an individual or family

9 who applies for, or receives, assistance under

10 this section shall be provided with notice of, and

11 an opportunity for a hearing on, any action

12 under this section that adversely affects the in13 dividual or family.

14 ‘‘(F) ASSESSMENT OF NEEDS.—The State

15 plan shall assess the food and nutrition needs

16 of needy persons residing in the State.

17 ‘‘(G) ELIGIBILITY STANDARDS.—The State

18 plan shall describe the income, resource, and

19 other eligibility standards that are established

20 for the receipt of assistance under this section.

21 ‘‘(H) DISQUALIFICATION OF FLEEING FEL22 ONS.—The State plan shall provide for the dis23 qualification of any individual who would be

24 disqualified from participating in the food

25 stamp program under section 6(k).
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1 ‘‘(I) RECEIVING BENEFITS IN MORE THAN

2 1 JURISDICTION.—The State plan shall estab3 lish a system for the exchange of information

4 with other States to verify the identity and re5 ceipt of benefits by recipients.

6 ‘‘(J) PRIVACY.—The State plan shall pro7 vide for safeguarding and restricting the use

8 and disclosure of information about any individ9 ual or family receiving assistance under this

10 section.

11 ‘‘(K) OTHER INFORMATION.—The State

12 plan shall contain such other information as

13 may be required by the Secretary.

14 ‘‘(4) APPROVAL OF APPLICATION AND PLAN.—

15 The Secretary shall approve an application and

16 State plan that satisfies the requirements of this

17 section.

18 ‘‘(f) NO INDIVIDUAL OR FAMILY ENTITLEMENT TO

19 ASSISTANCE.—Nothing in this section—

20 ‘‘(1) entitles any individual or family to assist21 ance under this section; or

22 ‘‘(2) limits the right of a State to impose addi23 tional limitations or conditions on assistance under

24 this section.

25 ‘‘(g) BENEFITS FOR ALIENS.—
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1 ‘‘(1) ELIGIBILITY.—No individual who is an

2 alien shall be eligible to receive benefits under a

3 State plan approved under subsection (e)(4) if the

4 individual is not eligible to participate in the food

5 stamp program due to the alien status of the indi6 vidual.

7 ‘‘(2) INCOME.—The State plan shall provide

8 that the income of an alien shall be determined in

9 accordance with section 5(i).

10 ‘‘(h) EMPLOYMENT AND TRAINING.—

11 ‘‘(1) WORK REQUIREMENTS.—No individual or

12 household shall be eligible to receive benefits under

13 a State plan funded under this section if the individ14 ual or household is not eligible to participate in the

15 food stamp program under subsection (d) or (o) of

16 section 6.

17 ‘‘(2) WORK PROGRAMS.—Each State shall im18 plement an employment and training program in ac19 cordance with the terms and conditions of section

20 6(d)(4) for individuals under the program and shall

21 be eligible to receive funding under section 16(h).

22 ‘‘(i) ENFORCEMENT.—

23 ‘‘(1) REVIEW OF COMPLIANCE WITH STATE

24 PLAN.—The Secretary shall review and monitor
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1 State compliance with this section and the State

2 plan approved under subsection (e)(4).

3 ‘‘(2) NONCOMPLIANCE.—

4 ‘‘(A) IN GENERAL.—If the Secretary, after

5 reasonable notice to a State and opportunity for

6 a hearing, finds that—

7 ‘‘(i) there has been a failure by the

8 State to comply substantially with any pro9 vision or requirement set forth in the State

10 plan approved under subsection (e)(4); or

11 ‘‘(ii) in the operation of any program

12 or activity for which assistance is provided

13 under this section, there is a failure by the

14 State to comply substantially with any pro15 vision of this section;

16 the Secretary shall notify the State of the find17 ing and that no further grants will be made to

18 the State under this section (or, in the case of

19 noncompliance in the operation of a program or

20 activity, that no further grants to the State will

21 be made with respect to the program or activ22 ity) until the Secretary is satisfied that there is

23 no longer any failure to comply or that the non24 compliance will be promptly corrected.
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1 ‘‘(B) OTHER PENALTIES.—In the case of a

2 finding of noncompliance made pursuant to

3 subparagraph (A), the Secretary may, in addi4 tion to, or in lieu of, imposing the penalties de5 scribed in subparagraph (A), impose other ap6 propriate penalties, including recoupment of

7 money improperly expended for purposes pro8 hibited or not authorized by this section and

9 disqualification from the receipt of financial as10 sistance under this section.

11 ‘‘(C) NOTICE.—The notice required under

12 subparagraph (A) shall include a specific identi13 fication of any additional penalty being imposed

14 under subparagraph (B).

15 ‘‘(3) ISSUANCE OF REGULATIONS.—The Sec16 retary shall establish by regulation procedures for—

17 ‘‘(A) receiving, processing, and determin18 ing the validity of complaints made to the Sec19 retary concerning any failure of a State to com20 ply with the State plan or any requirement of

21 this section; and

22 ‘‘(B) imposing penalties under this section.

23 ‘‘(j) GRANT.—

24 ‘‘(1) IN GENERAL.—For each fiscal year, the

25 Secretary shall pay to a State that has an applica-
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1 tion approved by the Secretary under subsection

2 (e)(4) an amount that is equal to the grant of the

3 State under subsection (m) for the fiscal year.

4 ‘‘(2) METHOD OF GRANT.—The Secretary shall

5 make a grant to a State for a fiscal year under this

6 section by issuing 1 or more letters of credit for the

7 fiscal year, with necessary adjustments on account

8 of overpayments or underpayments, as determined

9 by the Secretary.

10 ‘‘(3) SPENDING OF GRANTS BY STATE.—

11 ‘‘(A) IN GENERAL.—Except as provided in

12 subparagraph (B), a grant to a State deter13 mined under subsection (m)(1) for a fiscal year

14 may be expended by the State only in the fiscal

15 year.

16 ‘‘(B) CARRYOVER.—The State may reserve

17 up to 10 percent of a grant determined under

18 subsection (m)(1) for a fiscal year to provide

19 assistance under this section in subsequent fis20 cal years, except that the reserved funds may

21 not exceed 30 percent of the total grant re22 ceived under this section for a fiscal year.

23 ‘‘(4) FOOD ASSISTANCE AND ADMINISTRATIVE

24 EXPENDITURES.—In each fiscal year, not more than

25 6 percent of the Federal and State funds required
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1 to be expended by a State under this section shall

2 be used for administrative expenses.

3 ‘‘(5) PROVISION OF FOOD ASSISTANCE.—A

4 State may provide food assistance under this section

5 in any manner determined appropriate by the State,

6 such as electronic benefit transfer limited to food

7 purchases, coupons limited to food purchases, or di8 rect provision of commodities.

9 ‘‘(k) QUALITY CONTROL.—Each State participating

10 in the program established under this section shall main11 tain a system in accordance with, and shall be subject to

12 section 16(c), including sanctions and eligibility for incen13 tive payment under section 16(c), adjusted for State spe14 cific characteristics under regulations issued by the Sec15 retary.

16 ‘‘(l) NONDISCRIMINATION.—

17 ‘‘(1) IN GENERAL.—The Secretary shall not

18 provide financial assistance for any program,

19 project, or activity under this section if any person

20 with responsibilities for the operation of the pro21 gram, project, or activity discriminates with respect

22 to the program, project, or activity because of race,

23 religion, color, national origin, sex, or disability.

24 ‘‘(2) ENFORCEMENT.—The powers, remedies,

25 and procedures set forth in title VI of the Civil
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1 Rights Act of 1964 (42 U.S.C. 2000d et seq.) may

2 be used by the Secretary to enforce paragraph (1).

3 ‘‘(m) GRANT CALCULATION.—

4 ‘‘(1) STATE GRANT.—

5 ‘‘(A) IN GENERAL.—Except as provided in

6 subparagraph (B), from the amounts made

7 available under section 18 for each fiscal year,

8 the Secretary shall provide a grant to each

9 State participating in the program established

10 under this section an amount that is equal to

11 the sum of—

12 ‘‘(i) the greater of, as determined by

13 the Secretary—

14 ‘‘(I) the total dollar value of all

15 benefits issued under the food stamp

16 program established under this Act by

17 the State during fiscal year 1994; or

18 ‘‘(II) the average per fiscal year

19 of the total dollar value of all benefits

20 issued under the food stamp program

21 by the State during each of fiscal

22 years 1992 through 1994; and

23 ‘‘(ii) the greater of, as determined by

24 the Secretary—
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1 ‘‘(I) the total amount received by

2 the State for administrative costs

3 under section 16(a) (not including any

4 adjustment under section 16(c)) for

5 fiscal year 1994; or

6 ‘‘(II) the average per fiscal year

7 of the total amount received by the

8 State for administrative costs under

9 section 16(a) (not including any ad10 justment under section 16(c)) for each

11 of fiscal years 1992 through 1994.

12 ‘‘(B) INSUFFICIENT FUNDS.—If the Sec13 retary finds that the total amount of grants to

14 which States would otherwise be entitled for a

15 fiscal year under subparagraph (A) will exceed

16 the amount of funds that will be made available

17 to provide the grants for the fiscal year, the

18 Secretary shall reduce the grants made to

19 States under this subsection, on a pro rata

20 basis, to the extent necessary.

21 ‘‘(2) REDUCTION.—The Secretary shall reduce

22 the grant of a State by the amount a State has

23 agreed to contribute under subsection (c)(1)(C).’’.

24 (b) EMPLOYMENT AND TRAINING FUNDING.—Sec25 tion 16(h) of the Act (7 U.S.C. 2025(a)), as amended by
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1 section 1027(d)(2), is further amended by adding at the

2 end the following:

3 ‘‘(6) BLOCK GRANT STATES.—Each State elect4 ing to operate a program under section 27 shall—

5 ‘‘(A) receive the greater of—

6 ‘‘(i) the total dollar value of the funds

7 received under paragraph (1) by the State

8 during fiscal year 1994; or

9 ‘‘(ii) the average per fiscal year of the

10 total dollar value of all funds received

11 under paragraph (1) by the State during

12 each of fiscal years 1992 through 1994;

13 and

14 ‘‘(B) be eligible to receive funds under

15 paragraph (2), within the limitations in section

16 6(d)(4)(K).’’.

17 (c) RESEARCH ON OPTIONAL STATE FOOD ASSIST18 ANCE BLOCK GRANT.—Section 17 of the Act (7 U.S.C.

19 2026), as amended by section 1064(c)(2), is further

20 amended by adding at the end the following:

21 ‘‘(l) RESEARCH ON OPTIONAL STATE FOOD ASSIST22 ANCE BLOCK GRANT.—The Secretary may conduct re23 search on the effects and costs of a State program carried

24 out under section 27.’’.
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1 Subtitle B—Commodity

2 Distribution Programs

3 SEC. 1071. EMERGENCY FOOD ASSISTANCE PROGRAM.

4 (a) DEFINITIONS.—Section 201A of the Emergency

5 Food Assistance Act of 1983 (Public Law 98–8; 7 U.S.C.

6 612c note) is amended to read as follows:

7 ‘‘SEC. 201A. DEFINITIONS.

8 ‘‘In this Act:

9 ‘‘(1) ADDITIONAL COMMODITIES.—The term

10 ‘additional commodities’ means commodities made

11 available under section 214 in addition to the com12 modities made available under sections 202 and

13 203D.

14 ‘‘(2) AVERAGE MONTHLY NUMBER OF UNEM15 PLOYED PERSONS.—The term ‘average monthly

16 number of unemployed persons’ means the average

17 monthly number of unemployed

18 persons in each State in the most recent fiscal year

19 for which information concerning the number of un20 employed persons is available, as determined by the

21 Bureau of Labor Statistics of the Department of

22 Labor.

23 ‘‘(3) ELIGIBLE RECIPIENT AGENCY.—The term

24 ‘eligible recipient agency’ means a public or non25 profit organization—
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1 ‘‘(A) that administers—

2 ‘‘(i) an emergency feeding organiza3 tion;

4 ‘‘(ii) a charitable institution (including

5 a hospital and a retirement home, but ex6 cluding a penal institution) to the extent

7 that the institution serves needy persons;

8 ‘‘(iii) a summer camp for children, or

9 a child nutrition program providing food

10 service;

11 ‘‘(iv) a nutrition project operating

12 under the Older Americans Act of 1965

13 (42 U.S.C. 3001 et seq.), including a

14 project that operates a congregate nutri15 tion site and a project that provides home16 delivered meals; or

17 ‘‘(v) a disaster relief program;

18 ‘‘(B) that has been designated by the ap19 propriate State agency, or by the Secretary;

20 and

21 ‘‘(C) that has been approved by the Sec22 retary for participation in the program estab23 lished under this Act.

24 ‘‘(4) EMERGENCY FEEDING ORGANIZATION.—

25 The term ‘emergency feeding organization’ means a
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1 public or nonprofit organization that administers ac2 tivities and projects (including the activities and

3 projects of a charitable institution, a food bank, a

4 food pantry, a hunger relief center, a soup kitchen,

5 or a similar public or private nonprofit eligible recip6 ient agency) providing nutrition assistance to relieve

7 situations of emergency and distress through the

8 provision of food to needy persons, including low-in9 come and unemployed persons.

10 ‘‘(5) FOOD BANK.—The term ‘food bank’

11 means a public or charitable institution that main12 tains an established operation involving the provision

13 of food or edible commodities, or the products of

14 food or edible commodities, to food pantries, soup

15 kitchens, hunger relief centers, or other food or feed16 ing centers that, as an integral part of their normal

17 activities, provide meals or food to feed needy per18 sons on a regular basis.

19 ‘‘(6) FOOD PANTRY.—The term ‘food pantry’

20 means a public or private nonprofit organization

21 that distributes food to low-income and unemployed

22 households, including food from sources other than

23 the Department of Agriculture, to relieve situations

24 of emergency and distress.
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1 ‘‘(7) POVERTY LINE.—The term ‘poverty line’

2 has the same meaning given the term in section

3 673(2) of the Community Services Block Grant Act

4 (42 U.S.C. 9902(2)).

5 ‘‘(8) SOUP KITCHEN.—The term ‘soup kitchen’

6 means a public or charitable institution that, as an

7 integral part of the normal activities of the institu8 tion, maintains an established feeding operation to

9 provide food to needy homeless persons on a regular

10 basis.

11 ‘‘(9) TOTAL VALUE OF ADDITIONAL COMMOD12 ITIES.—The term ‘total value of additional commod13 ities’ means the actual cost of all additional com14 modities made available under section 214 that are

15 paid by the Secretary (including the distribution and

16 processing costs incurred by the Secretary).

17 ‘‘(10) VALUE OF ADDITIONAL COMMODITIES

18 ALLOCATED TO EACH STATE.—The term ‘value of

19 additional commodities allocated to each State’

20 means the actual cost of additional commodities

21 made available under section 214 and allocated to

22 each State that are paid by the Secretary (including

23 the distribution and processing costs incurred by the

24 Secretary).’’.
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1 (b) STATE PLAN.—Section 202A of the Act (7 U.S.C.

2 612c note) is amended to read as follows:

3 ‘‘SEC. 202A. STATE PLAN.

4 ‘‘(a) IN GENERAL.—To receive commodities under

5 this Act, a State shall submit a plan of operation and ad6 ministration every 4 years to the Secretary for approval.

7 The plan may be amended at any time, with the approval

8 of the Secretary.

9 ‘‘(b) REQUIREMENTS.—Each plan shall—

10 ‘‘(1) designate the State agency responsible for

11 distributing the commodities received under this Act;

12 ‘‘(2) set forth a plan of operation and adminis13 tration to expeditiously distribute commodities under

14 this Act;

15 ‘‘(3) set forth the standards of eligibility for re16 cipient agencies; and

17 ‘‘(4) set forth the standards of eligibility for in18 dividual or household recipients of commodities,

19 which shall require—

20 ‘‘(A) individuals or households to be com21 prised of needy persons; and

22 ‘‘(B) individual or household members to

23 be residing in the geographic location served by

24 the distributing agency at the time of applying

25 for assistance.
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1 ‘‘(c) STATE ADVISORY BOARD.—The Secretary shall

2 encourage each State receiving commodities under this Act

3 to establish a State advisory board consisting of represent4 atives of all interested entities, both public and private,

5 in the distribution of commodities received under this Act

6 in the State.’’.

7 (c) AUTHORIZATION OF APPROPRIATIONS FOR AD8 MINISTRATIVE FUNDS.—Section 204(a)(1) of the Act (7

9 U.S.C. 612c note) is amended—

10 (1) in the first sentence by striking ‘‘for State

11 and local’’ and all that follows through ‘‘under this

12 title’’ and inserting ‘‘to pay for the direct and indi13 rect administrative costs of the State related to the

14 processing, transporting, and distributing to eligible

15 recipient agencies of commodities provided by the

16 Secretary under this Act and commodities secured

17 from other sources’’; and

18 (2) by striking the fourth sentence.

19 (d) DELIVERY OF COMMODITIES.—Section 214 of the

20 Act (7 U.S.C. 612c note) is amended—

21 (1) by striking subsections (a) through (e) and

22 (j);

23 (2) by redesignating subsections (f) through (i)

24 as subsections (a) through (d), respectively;
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1 (3) in subsection (b), as redesignated by para2 graph (2)—

3 (A) in the first sentence, by striking ‘‘sub4 section (f) or subsection (j) if applicable,’’ and

5 inserting ‘‘subsection (a)’’; and

6 (B) in the second sentence, by striking

7 ‘‘subsection (f)’’ and inserting ‘‘subsection (a)’’;

8 (4) by striking subsection (c), as redesignated

9 by paragraph (2), and inserting the following:

10 ‘‘(c) ADMINISTRATION.—

11 ‘‘(1) IN GENERAL.—Commodities made avail12 able for each fiscal year under this section shall be

13 delivered at reasonable intervals to States based on

14 the grants calculated under subsection (a), or reallo15 cated under subsection (b), before December 31 of

16 the following fiscal year.

17 ‘‘(2) ENTITLEMENT.—Each State shall be enti18 tled to receive the value of additional commodities

19 determined under subsection (a).’’; and

20 (5) in subsection (d), as redesignated by para21 graph (2), by striking ‘‘or reduce’’ and all that fol22 lows through ‘‘each fiscal year’’.

23 (e) TECHNICAL AMENDMENTS.—The Act (7 U.S.C.

24 612c note) is amended—
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1 (1) in the first sentence of section 203B(a), by

2 striking ‘‘203 and 203A of this Act’’ and inserting

3 ‘‘203A’’;

4 (2) in section 204(a), by striking ‘‘title’’ each

5 place it appears and inserting ‘‘Act’’;

6 (3) in the first sentence of section 210(e), by

7 striking ‘‘(except as otherwise provided for in section

8 214(j))’’; and

9 (4) by striking section 212.

10 (f) REPORT ON EFAP.—Section 1571 of the Food

11 Security Act of 1985 (Public Law 99–198; 7 U.S.C. 612c

12 note) is repealed.

13 (g) AVAILABILITY OF COMMODITIES UNDER THE

14 FOOD STAMP PROGRAM.—The Food Stamp Act of 1977

15 (7 U.S.C. 2011 et seq.), as amended by section 1067, is

16 further amended by adding at the end the following:

17 ‘‘SEC. 28. AVAILABILITY OF COMMODITIES FOR THE EMER18 GENCY FOOD ASSISTANCE PROGRAM.

19 ‘‘(a) PURCHASE OF COMMODITIES.—From amounts

20 appropriated under this Act, for each of fiscal years 1997

21 through 2002, the Secretary shall purchase $300,000,000

22 of a variety of nutritious and useful commodities of the

23 types that the Secretary has the authority to acquire

24 through the Commodity Credit Corporation or under sec25 tion 32 of the Act entitled ‘An Act to amend the Agricul-
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1 tural Adjustment Act, and for other purposes’, approved

2 August 24, 1935 (7 U.S.C. 612c), and distribute the com3 modities to States for distribution in accordance with sec4 tion 214 of the Emergency Food Assistance Act of 1983

5 (Public Law 98–8; 7 U.S.C. 612c note).

6 ‘‘(b) BASIS FOR COMMODITY PURCHASES.—In pur7 chasing commodities under subsection (a), the Secretary

8 shall, to the extent practicable and appropriate, make pur9 chases based on—

10 ‘‘(1) agricultural market conditions;

11 ‘‘(2) preferences and needs of States and dis12 tributing agencies; and

13 ‘‘(3) preferences of recipients.’’.

14 (h) EFFECTIVE DATE.—The amendments made by

15 subsection (d) shall become effective on October 1, 1996.

16 SEC. 1072. FOOD BANK DEMONSTRATION PROJECT.

17 Section 3 of the Charitable Assistance and Food

18 Bank Act of 1987 (Public Law 100–232; 7 U.S.C. 612c

19 note) is repealed.

20 SEC. 1073. HUNGER PREVENTION PROGRAMS.

21 The Hunger Prevention Act of 1988 (Public Law

22 100–435; 7 U.S.C. 612c note) is amended—

23 (1) by striking section 110;

24 (2) by striking subtitle C of title II; and

25 (3) by striking section 502.
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1 SEC. 1074. REPORT ON ENTITLEMENT COMMODITY PROC2 ESSING.

3 Section 1773 of the Food, Agriculture, Conservation,

4 and Trade Act of 1990 (Public Law 101–624; 7 U.S.C.

5 612c note) is amended by striking subsection (f).

6 TITLE XI—MISCELLANEOUS

7 SEC. 1101. EXPENDITURE OF FEDERAL FUNDS IN ACCORD8 ANCE WITH LAWS AND PROCEDURES APPLI9 CABLE TO EXPENDITURE OF STATE FUNDS.

10 (a) IN GENERAL.—Notwithstanding any other provi11 sion of law, any funds received by a State under the provi12 sions of law specified in subsection (b) shall be expended

13 only in accordance with the laws and procedures applicable

14 to expenditures of the State’s own revenues, including ap15 propriation by the State legislature, consistent with the

16 terms and conditions required under such provisions of

17 law.

18 (b) PROVISIONS OF LAW.—The provisions of law

19 specified in this subsection are the following:

20 (1) Part A of title IV of the Social Security Act

21 (relating to block grants for temporary assistance

22 for needy families).

23 (2) Section 25 of the Food Stamp Act of 1977

24 (relating to the optional State food assistance block

25 grant).
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1 (3) The Child Care and Development Block

2 Grant Act of 1990 (relating to block grants for child

3 care).

4 SEC. 1102. ELIMINATION OF HOUSING ASSISTANCE WITH

5 RESPECT TO FUGITIVE FELONS AND PROBA6 TION AND PAROLE VIOLATORS.

7 (a) ELIGIBILITY FOR ASSISTANCE.—The United

8 States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is

9 amended—

10 (1) in section 6(l)—

11 (A) in paragraph (5), by striking ‘‘and’’ at

12 the end;

13 (B) in paragraph (6), by striking the pe14 riod at the end and inserting ‘‘; and’’; and

15 (C) by inserting immediately after para16 graph (6) the following new paragraph:

17 ‘‘(7) provide that it shall be cause for imme18 diate termination of the tenancy of a public housing

19 tenant if such tenant—

20 ‘‘(A) is fleeing to avoid prosecution, or cus21 tody or confinement after conviction, under the

22 laws of the place from which the individual

23 flees, for a crime, or attempt to commit a

24 crime, which is a felony under the laws of the

25 place from which the individual flees, or which,
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1 in the case of the State of New Jersey, is a

2 high misdemeanor under the laws of such State;

3 or

4 ‘‘(2) is violating a condition of probation or pa5 role imposed under Federal or State law.’’; and

6 (2) in section 8(d)(1)(B)—

7 (A) in clause (iii), by striking ‘‘and’’ at the

8 end;

9 (B) in clause (iv), by striking the period at

10 the end and inserting ‘‘; and’’; and

11 (C) by adding after clause (iv) the follow12 ing new clause:

13 ‘‘(v) it shall be cause for termination

14 of the tenancy of a tenant if such tenant—

15 ‘‘(I) is fleeing to avoid prosecu16 tion, or custody or confinement after

17 conviction, under the laws of the place

18 from which the individual flees, for a

19 crime, or attempt to commit a crime,

20 which is a felony under the laws of

21 the place from which the individual

22 flees, or which, in the case of the

23 State of New Jersey, is a high mis24 demeanor under the laws of such

25 State; or
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1 ‘‘(II) is violating a condition of

2 probation or parole imposed under

3 Federal or State law;’’.

4 (b) PROVISION OF INFORMATION TO LAW ENFORCE5 MENT AGENCIES.—Title I of the United States Housing

6 Act of 1937 (42 U.S.C. 1437 et seq.), as amended by sec7 tions 404(d) and 601 of this Act, is amended by adding

8 at the end the following:

9 ‘‘SEC. 29. EXCHANGE OF INFORMATION WITH LAW EN10 FORCEMENT AGENCIES.

11 ‘‘Notwithstanding any other provision of law, each

12 public housing agency that enters into a contract for as13 sistance under section 6 or 8 of this Act with the Secretary

14 shall furnish any Federal, State, or local law enforcement

15 officer, upon the request of the officer, with the current

16 address, Social Security number, and photograph (if appli17 cable) of any recipient of assistance under this Act, if the

18 officer—

19 ‘‘(1) furnishes the public housing agency with

20 the name of the recipient; and

21 ‘‘(2) notifies the agency that—

22 ‘‘(A) such recipient—

23 ‘‘(i) is fleeing to avoid prosecution, or

24 custody or confinement after conviction,

25 under the laws of the place from which the
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1 individual flees, for a crime, or attempt to

2 commit a crime, which is a felony under

3 the laws of the place from which the indi4 vidual flees, or which, in the case of the

5 State of New Jersey, is a high mis6 demeanor under the laws of such State; or

7 ‘‘(ii) is violating a condition of proba8 tion or parole imposed under Federal or

9 State law; or

10 ‘‘(iii) has information that is nec11 essary for the officer to conduct the offi12 cer’s official duties;

13 ‘‘(B) the location or apprehension of the

14 recipient is within such officer’s official duties;

15 and

16 ‘‘(C) the request is made in the proper ex17 ercise of the officer’s official duties.’’.

18 SEC. 1103. SENSE OF THE SENATE REGARDING ENTER19 PRISE ZONES.

20 (a) FINDINGS.—The Senate finds that:

21 (1) Many of the Nation’s urban centers are

22 places with high levels of poverty, high rates of wel23 fare dependency, high crime rates, poor schools, and

24 joblessness;
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1 (2) Federal tax incentives and regulatory re2 forms can encourage economic growth, job creation

3 and small business formation in many urban centers;

4 (3) Encouraging private sector investment in

5 America’s economically distressed urban and rural

6 areas is essential to breaking the cycle of poverty

7 and the related ills of crime, drug abuse, illiteracy,

8 welfare dependency, and unemployment;

9 (4) The empowerment zones enacted in 1993

10 should be enhanced by providing incentives to in11 crease entrepreneurial growth, capital formation, job

12 creation, educational opportunities, and home owner13 ship in the designated communities and zones.

14 (b) SENSE OF THE SENATE.—Therefore, it is the

15 Sense of the Senate that the Congress should adopt enter16 prise zone legislation in the One Hundred Fourth Con17 gress, and that such enterprise zone legislation provide the

18 following incentives and provisions:

19 (1) Federal tax incentives that expand access to

20 capital, increase the formation and expansion of

21 small businesses, and promote commercial revitaliza22 tion;

23 (2) Regulatory reforms that allow localities to

24 petition Federal agencies, subject to the relevant

25 agencies’ approval, for waivers or modifications of
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1 regulations to improve job creation, small business

2 formation and expansion, community development,

3 or economic revitalization objectives of the enterprise

4 zones;

5 (3) Home ownership incentives and grants to

6 encourage resident management of public housing

7 and home ownership of public housing;

8 (4) School reform pilot projects in certain des9 ignated enterprise zones to provide low-income par10 ents with new and expanded educational options for

11 their children’s elementary and secondary schooling.

12 SEC. 1104. SENSE OF THE SENATE REGARDING THE IN13 ABILITY OF THE NON-CUSTODIAL PARENT TO

14 PAY CHILD SUPPORT.

15 It is the sense of the Senate that—

16 (a) States should diligently continue their efforts to

17 enforce child support payments by the non-custodial par18 ent to the custodial parent, regardless of the employment

19 status or location of the non-custodial parent; and

20 (b) States are encouraged to pursue pilot programs

21 in which the parents of a non-adult, non-custodial parent

22 who refuses to or is unable to pay child support must—

23 (1) pay or contribute to the child support owed

24 by the non-custodial parent; or
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1 (2) otherwise fulfill all financial obligations and

2 meet all conditions imposed on the non-custodial

3 parent, such as participation in a work program or

4 other related activity.

5 SEC. 1105. FOOD STAMP ELIGIBILITY.

6 Section 6(f) of the Food Stamp Act of 1977 (7

7 U.S.C. 2015(f)) is amended by striking the third sentence

8 and inserting the following:

9 ‘‘The State agency shall, at its option, consider either

10 all income and financial resources of the individual ren11 dered ineligible to participate in the food stamp program

12 under this subsection, or such income, less a pro rata

13 share, and the financial resources of the ineligible individ14 ual, to determine the eligibility and the value of the allot15 ment of the household of which such individual is a mem16 ber.’’.

17 SEC. 1106. ESTABLISHING NATIONAL GOALS TO PREVENT

18 TEENAGE PREGNANCIES.

19 (a) IN GENERAL.—Not later than January 1, 1997,

20 the Secretary of Health and Human Services shall estab21 lish and implement a strategy for—

22 (1) preventing out-of-wedlock teenage preg23 nancies, and
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1 (2) assuring that at least 25 percent of the

2 communities in the United States have teenage preg3 nancy prevention programs in place.

4 (b) REPORT.—Not later than June 30, 1998, and an5 nually thereafter, the Secretary shall report to the Con6 gress with respect to the progress that has been made in

7 meeting the goals described in paragraphs (1) and (2) of

8 subsection (a).

9 SEC. 1107. SENSE OF THE SENATE REGARDING ENFORCE10 MENT OF STATUTORY RAPE LAWS.

11 It is the sense of the Senate that States and local

12 jurisdictions should aggressively enforce statutory rape

13 laws.

14 SEC. 1108. SANCTIONING FOR TESTING POSITIVE FOR

15 CONTROLLED SUBSTANCES.

16 Notwithstanding any other provision of law, States

17 shall not be prohibited by the Federal Government from

18 sanctioning welfare recipients who test positive for use of

19 controlled substances.

20 SEC. 1109. ABSTINENCE EDUCATION.

21 (a) INCREASES IN FUNDING.—Section 501(a) of the

22 Social Security Act (42 U.S.C. 701(a)) is amended in the

23 matter preceding paragraph (1) by striking ‘‘Fiscal year

24 1990 and each fiscal year thereafter’’ and inserting ‘‘Fis-
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1 cal years 1990 through 1995 and $761,000,000 for fiscal

2 year 1996 and each fiscal year thereafter’’.

3 (b) ABSTINENCE EDUCATION.—Section 501(a)(1) of

4 such Act (42 U.S.C. 701(a)(1)) is amended—

5 (1) in subparagraph (C), by striking ‘‘and’’ at

6 the end;

7 (2) in subparagraph (D), by adding ‘‘and’’ at

8 the end; and

9 (3) by adding at the end the following new sub10 paragraph:

11 ‘‘(E) to provide abstinence education, and

12 at the option of the State, where appropriate,

13 mentoring, counseling, and adult supervision to

14 promote abstinence from sexual activity, with a

15 focus on those groups which are most likely to

16 bear children out-of-wedlock.’’.

17 (c) ABSTINENCE EDUCATION DEFINED.—Section

18 501(b) of such Act (42 U.S.C. 701(b)) is amended by add19 ing at the end the following new paragraph:

20 ‘‘(5) ABSTINENCE EDUCATION.—For purposes

21 of this subsection, the term ‘abstinence education’

22 means an educational or motivational program

23 which—
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1 ‘‘(A) has as its exclusive purpose, teaching

2 the social, psychological, and health gains to be

3 realized by abstaining from sexual activity;

4 ‘‘(B) teaches abstinence from sexual activ5 ity outside marriage as the expected standard

6 for all school age children;

7 ‘‘(C) teaches that abstinence from sexual

8 activity is the only certain way to avoid out-of9 wedlock pregnancy, sexually transmitted dis10 eases, and other associated health problems;

11 ‘‘(D) teaches that a mutually faithful

12 monogamous relationship in context of marriage

13 is the expected standard of human sexual activ14 ity;

15 ‘‘(E) teaches that sexual activity outside of

16 the context of marriage is likely to have harm17 ful psychological and physical effects;

18 ‘‘(F) teaches that bearing children out-of19 wedlock is likely to have harmful consequences

20 for the child, the child’s parents, and society;

21 ‘‘(G) teaches young people how to reject

22 sexual advances and how alcohol and drug use

23 increases vulnerability to sexual advances; and
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1 ‘‘(H) teaches the importance of attaining

2 self-sufficiency before engaging in sexual activ3 ity.’’.

4 (d) SET-ASIDE.—

5 (1) IN GENERAL.—Section 502(c) of such Act

6 (42 U.S.C. 702(c)) is amended in the matter preced7 ing paragraph (1) by striking ‘‘From’’ and inserting

8 ‘‘Except as provided in subsection (e), from’’.

9 (2) SET-ASIDE.—Section 502 of such Act (42

10 U.S.C. 702) is amended by adding at the end the

11 following new subsection:

12 ‘‘(e) Of the amounts appropriated under section

13 501(a) for any fiscal year, the Secretary shall set aside

14 $75,000,000 for abstinence education in accordance with

15 section 501(a)(1)(E).’’.

16 SEC. 1110. PROVISIONS TO ENCOURAGE ELECTRONIC BEN17 EFIT TRANSFER SYSTEMS.

18 Section 904 of the Electronic Fund Transfer Act (15

19 U.S.C. 1693b) is amended—

20 (1) by striking ‘‘(d) In the event’’ and inserting

21 ‘‘(d) APPLICABILITY TO SERVICE PROVIDERS

22 OTHER THAN CERTAIN FINANCIAL INSTITU23 TIONS.—

24 ‘‘(1) IN GENERAL.—In the event’’; and
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1 (2) by adding at the end the following new

2 paragraph:

3 ‘‘(2) STATE AND LOCAL GOVERNMENT ELEC4 TRONIC BENEFIT TRANSFER PROGRAMS.—

5 ‘‘(A) EXEMPTION GENERALLY.—The dis6 closures, protections, responsibilities, and rem7 edies established under this title, and any regu8 lation prescribed or order issued by the Board

9 in accordance with this title, shall not apply to

10 any electronic benefit transfer program estab11 lished under State or local law or administered

12 by a State or local government.

13 ‘‘(B) EXCEPTION FOR DIRECT DEPOSIT

14 INTO RECIPIENT’S ACCOUNT.—Subparagraph

15 (A) shall not apply with respect to any elec16 tronic funds transfer under an electronic benefit

17 transfer program for deposits directly into a

18 consumer account held by the recipient of the

19 benefit.

20 ‘‘(C) RULE OF CONSTRUCTION.—No provi21 sion of this paragraph may be construed as—

22 ‘‘(i) affecting or altering the protec23 tions otherwise applicable with respect to

24 benefits established by Federal, State, or

25 local law; or
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1 ‘‘(ii) otherwise superseding the appli2 cation of any State or local law.

3 ‘‘(D) ELECTRONIC BENEFIT TRANSFER

4 PROGRAM DEFINED.—For purposes of this

5 paragraph, the term ‘electronic benefit transfer

6 program’—

7 ‘‘(i) means a program under which a

8 government agency distributes needs-tested

9 benefits by establishing accounts to be

10 accessed by recipients electronically, such

11 as through automated teller machines, or

12 point-of-sale terminals; and

13 ‘‘(ii) does not include employment-re14 lated payments, including salaries and pen15 sion, retirement, or unemployment benefits

16 established by Federal, State, or local gov17 ernments.’’.

18 SEC. 1111. REDUCTION IN BLOCK GRANTS TO STATES FOR

19 SOCIAL SERVICES.

20 Section 2003(c) of the Social Security Act (42 U.S.C.

21 1397b(c)) is amended—

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

23 (4); and

24 (2) by striking paragraph (5) and inserting the

25 following:
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1 ‘‘(5) $2,800,000,000 for each of the fiscal years

2 1990 through 1996;

3 ‘‘(6) $2,380,000,000 for the fiscal year 1997;

4 ‘‘(7) $2,240,000,000 for each of the fiscal years

5 1997 through 2002; and

6 ‘‘(8) $2,380,000,000 for the fiscal year 2003

7 and each succeeding fiscal year.’’.

8 DIVISION B—RESTRUCTURING

9 MEDICAID

10 SEC. 2001. SHORT TITLE OF DIVISION.

11 This division may be cited as the ‘‘Medicaid Restruc12 turing Act of 1996’’.

13 SEC. 2002. FINDING; GOALS FOR MEDICAID RESTRUCTUR14 ING.

15 (a) FINDING.—The Congress finds that the National

16 Governors’ Association on February 6, 1996, adopted

17 unanimously and on a bipartisan basis goals to guide the

18 restructuring of the medicaid program.

19 (b) GOALS FOR RESTRUCTURING.—The following are

20 the 4 primary goals so adopted:

21 (1) The basic health care needs of the nation’s

22 most vulnerable populations must be guaranteed.

23 (2) The growth in health care expenditures

24 must be brought under control.
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1 (3) States must have maximum flexibility in the

2 design and implementation of cost-effective systems

3 of care.

4 (4) States must be protected from unantici5 pated program costs resulting from economic fluc6 tuations in the business cycle, changing demo7 graphics, and natural disasters.

8 SEC. 2003. RESTRUCTURING THE MEDICAID PROGRAM.

9 The Social Security Act is amended by inserting after

10 title XIV the following new title:

‘‘TITLE XV—PROGRAM OF MEDICAL ASSISTANCE FOR LOWINCOME INDIVIDUALS AND FAMILIES

‘‘TABLE OF CONTENTS OF TITLE

‘‘Sec. 1500. Purpose; State plans.

‘‘PART A—ELIGIBILITY AND BENEFITS

‘‘Sec. 1501. Guaranteed eligibility and benefits.

‘‘Sec. 1502. Other provisions relating to eligibility and benefits.

‘‘Sec. 1503. Premiums and cost-sharing.

‘‘Sec. 1504. Description of process for developing capitation payment rates.

‘‘Sec. 1505. Preventing spousal impoverishment.

‘‘Sec. 1506. Preventing family impoverishment.

‘‘Sec. 1507. State flexibility.

‘‘Sec. 1508. Private rights of action.

‘‘PART B—PAYMENTS TO STATES

‘‘Sec. 1511. Allotment of funds among States.

‘‘Sec. 1512. Payments to States.

‘‘Sec. 1513. Limitation on use of funds; disallowance.

‘‘PART C—ESTABLISHMENT AND AMENDMENT OF STATE PLANS

‘‘Sec. 1521. Description of strategic objectives and performance goals.

‘‘Sec. 1522. Annual reports.

‘‘Sec. 1523. Periodic, independent evaluations.

‘‘Sec. 1524. Description of process for State plan development.

‘‘Sec. 1525. Consultation in State plan development.

‘‘Sec. 1526. Submittal and approval of State plans.

‘‘Sec. 1527. Submittal and approval of plan amendments.

‘‘Sec. 1528. Process for State withdrawal from program.

‘‘Sec. 1529. Sanctions for noncompliance.
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‘‘Sec. 1530. Secretarial authority.

‘‘PART D—PROGRAM INTEGRITY AND QUALITY

‘‘Sec. 1551. Use of audits to achieve fiscal integrity.

‘‘Sec. 1552. Fraud prevention program.

‘‘Sec. 1553. Information concerning sanctions taken by State licensing authorities against health care practitioners and providers.

‘‘Sec. 1554. State fraud control units.

‘‘Sec. 1555. Recoveries from third parties and others.

‘‘Sec. 1556. Assignment of rights of payment.

‘‘Sec. 1557. Quality assurance requirements for nursing facilities.

‘‘Sec. 1558. Other provisions promoting program integrity.

‘‘PART E—GENERAL PROVISIONS

‘‘Sec. 1571. Definitions.

‘‘Sec. 1572. Treatment of territories.

‘‘Sec. 1573. Description of treatment of Indian Health Service facilities.

‘‘Sec. 1574. Application of certain general provisions.

‘‘Sec. 1575. Optional master drug rebate agreements.

1 ‘‘SEC. 1500. PURPOSE; STATE PLANS.

2 ‘‘(a) PURPOSE.—The purpose of this title is to pro3 vide funds to States to enable them to provide medical

4 assistance to low-income individuals and families in a

5 more effective, efficient, and responsive manner.

6 ‘‘(b) STATE PLAN REQUIRED.—A State is not eligible

7 for payment under section 1512 unless the State has sub8 mitted to the Secretary under part C a plan (in this title

9 referred to as a ‘State plan’) that—

10 ‘‘(1) sets forth how the State intends to use the

11 funds provided under this title to provide medical as12 sistance to needy individuals and families consistent

13 with the provisions of this title, and

14 ‘‘(2) is approved under such part.

15 ‘‘(c) CONTINUED APPROVAL.—An approved State

16 plan shall continue in effect unless and until—
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1 ‘‘(1) the State amends the plan under section

2 1527,

3 ‘‘(2) the State terminates participation under

4 this title under section 1528, or

5 ‘‘(3) the Secretary finds substantial noncompli6 ance of the plan with the requirements of this title

7 under section 1529.

8 ‘‘(d) STATE ENTITLEMENT.—This title constitutes

9 budget authority in advance of appropriations Acts and

10 represents the obligation of the Federal Government to

11 provide for the payment to States of amounts provided

12 under part B.

13 ‘‘(e) EFFECTIVE DATE.—No State is eligible for pay14 ments under section 1512 for any calendar quarter begin15 ning before October 1, 1996.

16 ‘‘PART A—ELIGIBILITY AND BENEFITS

17 ‘‘SEC. 1501. GUARANTEED ELIGIBILITY AND BENEFITS.

18 ‘‘(a) GUARANTEED COVERAGE AND BENEFITS FOR

19 CERTAIN POPULATIONS.—

20 ‘‘(1) IN GENERAL.—Each State plan shall pro21 vide for making medical assistance available for ben22 efits in the guaranteed benefit package (as defined

23 in paragraph (2) and as subject to subsection (d))

24 to individuals within each of the following categories:
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1 ‘‘(A) POOR PREGNANT WOMEN.—Pregnant

2 women with family income below 133 percent of

3 the poverty line.

4 ‘‘(B) CHILDREN UNDER 6.—Children

5 under 6 years of age whose family income does

6 not exceed 133 percent of the poverty line.

7 ‘‘(C) CHILDREN 6 TO 12.—Children over 5

8 years of age, but under 13 years of age, whose

9 family income does not exceed 100 percent of

10 the poverty line.

11 ‘‘(D) DISABLED INDIVIDUALS.—As elected

12 by the State under paragraph (3), either—

13 ‘‘(i) disabled individuals (as defined

14 by the State) who meet the income and re15 source standards established under the

16 plan, or

17 ‘‘(ii) individuals who are under 65

18 years of age, who are disabled (as deter19 mined under section 1614(a)(3)), and who

20 meet the income and resource standards

21 for the payment of supplemental security

22 income benefits under title XVI.

23 ‘‘(E) POOR ELDERLY INDIVIDUALS.—Sub24 ject to paragraph (4), elderly individuals who

25 meet the income and resource standards for the
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1 payment of supplemental security income bene2 fits under title XVI.

3 ‘‘(F) CHILDREN RECEIVING FOSTER CARE

4 OR ADOPTION ASSISTANCE.—Subject to para5 graph (5), children who meet the requirements

6 for receipt of foster care maintenance payments

7 or adoption assistance under title IV.

8 ‘‘(G) CERTAIN LOW-INCOME FAMILIES.—

9 Subject to paragraph (6), individuals and mem10 bers of families who meet current AFDC in11 come and resource standards (as defined in

12 paragraph (6)(C)) in the State.

13 ‘‘(2) GUARANTEED BENEFITS PACKAGE.—In

14 this title, the term ‘guaranteed benefit package’

15 means benefits (in an amount, duration, and scope

16 specified under the State plan) for at least the fol17 lowing categories of services:

18 ‘‘(A) Inpatient and outpatient hospital

19 services.

20 ‘‘(B) Physicians’ surgical and medical serv21 ices.

22 ‘‘(C) Laboratory and x-ray services.

23 ‘‘(D) Nursing facility services.

24 ‘‘(E) Home health care.
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1 ‘‘(F) Federally-qualified health center serv2 ices and rural health clinic services, during the

3 first 8 quarters in which this title is in effect

4 in a State.

5 ‘‘(G) Immunizations for children (in ac6 cordance with a schedule for immunizations es7 tablished by the Health Department of the

8 State in consultation with the State agency re9 sponsible for the administration of the plan).

10 ‘‘(H) Prepregnancy family planning serv11 ices and supplies (as specified by the State).

12 ‘‘(I) Prenatal care.

13 ‘‘(J) Pediatric and family nurse practi14 tioner services and nurse midwife services.

15 ‘‘(K) EPSDT services (as defined in sec16 tion 1571(e)) for individuals who are under the

17 age of 21.

18 A State may establish criteria, including utilization

19 review, and cost effectiveness of alternative covered

20 services, for purposes of specifying the amount, du21 ration, and scope of benefits provided under the

22 State plan.

23 ‘‘(3) STATE ELECTION OF DISABLED INDIVID24 UALS TO BE GUARANTEED COVERAGE.—
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1 ‘‘(A) IN GENERAL.—Each State shall

2 specify in its State plan, before the beginning of

3 each Federal fiscal year, whether to guarantee

4 coverage of disabled individuals under the plan

5 under the option described in paragraph

6 (1)(D)(i) or under the option described in para7 graph (1)(D)(ii). An election under this para8 graph shall continue in effect for the subse9 quent fiscal year unless the election is changed

10 before the beginning of the fiscal year.

11 ‘‘(B) CONSEQUENCES OF ELECTION.—

12 ‘‘(i) STATE FLEXIBLE DEFINITION OP13 TION.—If a State elects the option de14 scribed in paragraph (1)(D)(i) for a fiscal

15 year—

16 ‘‘(I) the State plan must provide

17 under section 1502(c) for a set aside

18 of funds for disabled individuals for

19 the fiscal year, and

20 ‘‘(II) disabled individuals are not

21 taken into account in determining a

22 State supplemental umbrella allotment

23 under section 1511(g).
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1 ‘‘(ii) SSI DEFINITION OPTION.—If a

2 State elects the option described in para3 graph (1)(D)(ii) for a fiscal year—

4 ‘‘(I) section 1502(c) shall not

5 apply for the fiscal year, and

6 ‘‘(II) the State is eligible for an

7 increase under section 1511(g) in its

8 outlay allotment for the fiscal year

9 based on an increase in the number of

10 guaranteed and optional disabled indi11 viduals covered under the plan.

12 ‘‘(4) CONTINUATION OF SPECIAL ELIGIBILITY

13 STANDARDS FOR SECTION 209(b) STATES.—

14 ‘‘(A) IN GENERAL.—A section 209(b)

15 State (as defined in subparagraph (B)) may

16 elect to treat any reference in paragraph (1)(E)

17 to ‘elderly individuals who meet the income and

18 resource standards for the payment of supple19 mental security income benefits under title

20 XVI’ as a reference to ‘elderly individuals who

21 meet the standards described in the first sen22 tence of section 1902(f) (as in effect on the day

23 before the date of the enactment of this title)’.

24 ‘‘(B) SECTION 209(b) STATE DEFINED.—In

25 subparagraph (A), the term ‘section 209(b)
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1 State’ means a State to which section 1902(f)

2 applied as of the day before the date of the en3 actment of this title.

4 (5) OPTION FOR APPLICATION OF CURRENT RE5 QUIREMENTS FOR CERTAIN CHILDREN.—A State

6 may elect to apply paragraph (1)(F) by treating any

7 reference to ‘requirements for receipt of foster care

8 maintenance payments or adoption assistance under

9 title IV’ as a reference to ’requirements for receipt

10 of foster care maintenance payments or adoption as11 sistance as in effect under its State plan under part

12 E of title IV as of the date of the enactment of this

13 title’.

14 ‘‘(6) SPECIAL RULES FOR LOW-INCOME FAMI15 LIES.—

16 ‘‘(A) OPTIONAL USE OF LOWER NATIONAL

17 AVERAGE STANDARDS.—In the case of a State

18 in which the current AFDC income and re19 source standards are above the national average

20 of the current AFDC income and resource

21 standards for the 50 States and the District of

22 Columbia, as determined and published by the

23 Secretary, in applying paragraph (1)(G), the

24 State may elect to substitute such national av25 erage income and resource standards for the
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1 current AFDC income and resource standards

2 in that State.

3 ‘‘(B) OPTIONAL ELIGIBILITY BASED ON

4 LINK TO OTHER ASSISTANCE.—

5 ‘‘(i) IN GENERAL.—Subject to clause

6 (ii), in the case of a State which maintains

7 a link between eligibility for aid or assist8 ance under one or more parts of title IV

9 and eligibility for medical assistance under

10 this title, in applying paragraph (1)(G),

11 the State may elect to treat any reference

12 in such paragraph to ‘individuals and

13 members of families who meet current

14 AFDC income and resource standards in

15 the State’ as a reference to ‘members of

16 families who are receiving assistance under

17 a State plan under part A or E of title IV’.

18 ‘‘(ii) LIMITATION ON ELECTION.—A

19 State may only make the election described

20 in clause (i) if, and so long as, the State

21 demonstrates to the satisfaction of the Sec22 retary that the such election does not re23 sult in Federal expenditures under this

24 title (taking into account any supplemental

25 amounts provided pursuant to section
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1 1511(g)) that are greater than the Federal

2 expenditures that would have been made

3 under this title if the State had not made

4 such election.

5 ‘‘(C) CURRENT AFDC INCOME AND RE6 SOURCE STANDARDS DEFINED.—In this sub7 section, the term ‘current AFDC income and

8 resource standards’ means, with respect to a

9 State, the income and resource standards for

10 the payment of assistance under the State plan

11 under part A or E of title IV (as in effect as

12 of March 1, 1996).

13 ‘‘(D) STATE OPTION TO CONTINUE TO

14 PROVIDE MEDICAL ASSISTANCE DURING THE

15 TRANSITION FROM WELFARE TO WORK.—Noth16 ing in this title shall be construed as preventing

17 a State from continuing to provide medical as18 sistance under a State plan under this title to

19 an individual or a member of such individual’s

20 family who—

21 ‘‘(i) is eligible for medical assistance

22 under this title as a result of a link be23 tween eligibility for such medical assistance

24 and aid or assistance under one or more
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1 parts of title IV or any other program of

2 assistance based on need; and

3 ‘‘(ii) because of hours of, or income

4 from, employment is no longer eligible for

5 such aid or assistance.

6 ‘‘(b) GUARANTEED COVERAGE OF MEDICARE PRE7 MIUMS AND COST-SHARING FOR CERTAIN MEDICARE

8 BENEFICIARIES.—

9 ‘‘(1) GUARANTEED ELIGIBILITY.—Each State

10 plan shall provide—

11 ‘‘(A) for making medical assistance avail12 able for required medicare cost-sharing (as de13 fined in paragraph (2)) for qualified medicare

14 beneficiaries described in paragraph (3);

15 ‘‘(B) for making medical assistance avail16 able for payment of medicare premiums under

17 section 1818A for qualified disabled and work18 ing individuals described in paragraph (4); and

19 ‘‘(C) for making medical assistance avail20 able for payment of medicare premiums under

21 section 1839 for individuals who would be quali22 fied medicare beneficiaries described in para23 graph (3) but for the fact that their income ex24 ceeds 100 percent, but is less than 120 percent,
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1 of the poverty line for a family of the size in2 volved.

3 ‘‘(2) REQUIRED MEDICARE COST-SHARING DE4 FINED.—

5 ‘‘(A) IN GENERAL.—In this subsection, the

6 term ‘required medicare cost-sharing’ means,

7 with respect to an individual, costs incurred for

8 medicare cost-sharing described in paragraphs

9 (1) through (4) of section 1571(c) (and, at the

10 option of a State, section 1571(c)(5))) without

11 regard to whether the costs incurred were for

12 items and services for which medical assistance

13 is otherwise available under the plan.

14 ‘‘(B) LIMITATION ON OBLIGATION FOR

15 CERTAIN COST-SHARING ASSISTANCE.—In the

16 case of medical assistance furnished under this

17 title for medicare cost-sharing described in

18 paragraph (2), (3), or (4) of section 1571(c) re19 lating to the furnishing of a service or item to

20 a medicare beneficiary, nothing in this title

21 shall be construed as preventing a State plan—

22 ‘‘(i) from limiting the assistance to

23 the amount (if any) by which (I) the

24 amount that is otherwise payable under

25 the plan for the item or service for eligible
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1 individuals who are not such medicare

2 beneficiaries (or, if payments for such

3 items or services are made on a capitated

4 basis, an amount reasonably related or de5 rived from such capitated payment

6 amount), exceeds (II) amount of payment

7 (if any) made under title XVIII with re8 spect to the service or item, and

9 ‘‘(ii) if the amount described in sub10 clause (II) of clause (i) exceeds the amount

11 described in subclause (I) of such clause,

12 from treating the amount paid under title

13 XVIII as payment in full and not requiring

14 or providing for any additional medical as15 sistance under this subsection.

16 ‘‘(3) QUALIFIED MEDICARE BENEFICIARY DE17 FINED.—In this subsection, the term ‘qualified med18 icare beneficiary’ means an individual—

19 ‘‘(A) who is entitled to hospital insurance

20 benefits under part A of title XVIII (including

21 an individual entitled to such benefits pursuant

22 to an enrollment under section 1818, but not

23 including an individual entitled to such benefits

24 only pursuant to an enrollment under section

25 1818A),
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1 ‘‘(B) whose income (as determined under

2 section 1612 for purposes of the supplemental

3 security income program, except as provided in

4 paragraph (5) does not exceed 100 percent of

5 the poverty line applicable to a family of the

6 size involved, and

7 ‘‘(C) whose resources (as determined under

8 section 1613 for purposes of the supplemental

9 security income program) do not exceed twice

10 the maximum amount of resources that an indi11 vidual may have and obtain benefits under that

12 program.

13 ‘‘(4) QUALIFIED DISABLED AND WORKING INDI14 VIDUAL DEFINED.—In this subsection, the term

15 ‘qualified disabled and working individual’ means an

16 individual—

17 ‘‘(A) who is entitled to enroll for hospital

18 insurance benefits under part A of title XVIII

19 under section 1818A;

20 ‘‘(B) whose income (as determined under

21 section 1612 for purposes of the supplemental

22 security income program) does not exceed 200

23 percent of the poverty line applicable to a fam24 ily of the size involved;
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1 ‘‘(C) whose resources (as determined under

2 section 1613 for purposes of the supplemental

3 security income program) do not exceed twice

4 the maximum amount of resources that an indi5 vidual or a couple (in the case of an individual

6 with a spouse) may have and obtain benefits for

7 supplemental security income benefits under

8 title XVI; and

9 ‘‘(D) who is not otherwise eligible for med10 ical assistance under this title.

11 ‘‘(5) INCOME DETERMINATIONS.—

12 ‘‘(A) IN GENERAL.—In determining under

13 this subsection the income of an individual who

14 is entitled to monthly insurance benefits under

15 title II for a transition month (as defined in

16 subparagraph (B)) in a year, such income shall

17 not include any amounts attributable to an in18 crease in the level of monthly insurance benefits

19 payable under such title which have occurred

20 pursuant to section 215(i) for benefits payable

21 for months beginning with December of the

22 previous year.

23 ‘‘(B) TRANSITION MONTH DEFINED.—For

24 purposes of subparagraph (A), the term ‘transi25 tion month’ means each month in a year
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1 through the month following the month in

2 which the annual revision of the poverty line is

3 published.

4 ‘‘SEC. 1502. OTHER PROVISIONS RELATING TO ELIGIBILITY

5 AND BENEFITS.

6 ‘‘(a) OPTIONAL ELIGIBILITY GROUPS FOR WHICH

7 UMBRELLA SUPPLEMENTAL FUNDING IS AVAILABLE.—

8 In addition to the guaranteed coverage categories de9 scribed in section 1501(a)(1), the following are population

10 groups with respect to which supplemental allotments may

11 be made under section 1511(g), but only if (for the indi12 vidual involved) medical assistance is made available under

13 the State plan for the guaranteed benefit package (as de14 fined in section 1501(a)(2)):

15 ‘‘(1) CERTAIN POOR CHILDREN OVER 12 YEARS

16 OF AGE.—Children born after September 30, 1983,

17 under 12 years of age, but under 19 years of age,

18 and whose family income does not exceed 100 per19 cent of the poverty line.

20 ‘‘(2) CERTAIN DISABLED INDIVIDUALS.—Indi21 viduals (not described in section 1501(a)(1)(D)(ii))

22 who are disabled (as determined under section

23 1614(a)(3)), covered under the State plan, and meet

24 the eligibility standards for coverage under the State
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1 medicaid plan under title XIX (as in effect as of

2 May 1, 1996).

3 ‘‘(3) CERTAIN ELDERLY INDIVIDUALS.—Elderly

4 individuals (not described in section 1501(a)(1)(E))

5 who are covered under the State plan and who meet

6 the eligibility standards for coverage under the State

7 medicaid plan under title XIX (as in effect as of

8 May 1, 1996) other than solely on the basis of being

9 an individual described in section 1902(a)(10)(E).

10 ‘‘(b) OTHER PROVISIONS RELATING TO GENERAL

11 ELIGIBILITY AND BENEFITS.—

12 ‘‘(1) GENERAL DESCRIPTION.—Each State plan

13 shall include a description (consistent with this title)

14 of the following:

15 ‘‘(A) GENERAL ELIGIBILITY GUIDE16 LINES.—The general eligibility guidelines of the

17 plan for eligible low-income individuals, includ18 ing—

19 ‘‘(i) for individuals other than those

20 covered under subsection (a) or (b) of sec21 tion 1501, any limitations as to the dura22 tion of eligibility,

23 ‘‘(ii) any eligibility standards relating

24 to age, income and resources (including

25 any standards relating to spenddowns and
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1 disposition of resources), residency, disabil2 ity status, immigration status, or employ3 ment status of individuals,

4 ‘‘(iii) methods of establishing and con5 tinuing eligibility and enrollment, including

6 the methodology for computing family in7 come,

8 ‘‘(iv) the eligibility standards in the

9 plan that protect the income and resources

10 of a married individual who is living in the

11 community and whose spouse is residing in

12 an institution in order to prevent the im13 poverishment of the community spouse,

14 and

15 ‘‘(v) for individuals other than those

16 covered under subsection (a) or (b) of sec17 tion 1501, any other standards relating to

18 eligibility for medical assistance under the

19 plan.

20 ‘‘(B) SCOPE OF ASSISTANCE.—The

21 amount, duration, and scope of health care

22 services and items covered under the plan, in23 cluding differences among different eligible pop24 ulation groups.
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1 ‘‘(C) DELIVERY METHOD.—The State’s

2 approach to delivery of medical assistance, in3 cluding a general description of—

4 ‘‘(i) the use (or intended use) of

5 vouchers, fee-for-service, or managed care

6 arrangements (such as capitated health

7 care plans, case management, and case co8 ordination); and

9 ‘‘(ii) utilization control systems.

10 ‘‘(D) FEE-FOR-SERVICE BENEFITS.—To

11 the extent that medical assistance is furnished

12 on a fee-for-service basis—

13 ‘‘(i) how the State determines the

14 qualifications of health care providers eligi15 ble to provide such assistance; and

16 ‘‘(ii) how the State determines rates

17 of reimbursement for providing such as18 sistance.

19 ‘‘(E) COST-SHARING.—Beneficiary cost20 sharing (if any), including variations in such

21 cost-sharing by population group or type of

22 service and financial responsibilities of parents

23 of recipients who are children and the spouses

24 of recipients.
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1 ‘‘(F) UTILIZATION INCENTIVES.—Incen2 tives or requirements (if any) to encourage the

3 appropriate utilization of services.

4 ‘‘(G) SUPPORT FOR CERTAIN HOS5 PITALS.—

6 ‘‘(i) IN GENERAL.—With respect to

7 hospitals described in clause (ii) located in

8 the State, a description of the extent to

9 which provisions are made for expenditures

10 for items and services furnished by such

11 hospitals and covered under the State plan.

12 ‘‘(ii) HOSPITALS DESCRIBED.—A hos13 pital described in this clause is a short14 term acute care general hospital or a chil15 dren’s hospital, the low-income utilization

16 rate of which exceeds the lesser of—

17 ‘‘(I) 1 standard deviation above

18 the mean low-income utilization rate

19 for hospitals receiving payments under

20 a State plan in the State in which

21 such hospital is located, or

‘‘(II) 11 22 ⁄4 standard deviations

23 above the mean low-income utilization

24 rate for hospitals receiving such pay-
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1 ments in the 50 States and the Dis2 trict of Columbia.

3 ‘‘(iii) LOW-INCOME UTILIZATION

4 RATE.—For purposes of clause (ii), the

5 term ‘low-income utilization rate’ means,

6 for a hospital, a fraction (expressed as a

7 percentage), the numerator of which is the

8 hospital’s number of patient days attrib9 utable to patients who (for such days) were

10 eligible for medical assistance under a

11 State plan or were uninsured in a period,

12 and the denominator of which is the total

13 number of the hospital’s patient days in

14 that period.

15 ‘‘(iv) PATIENT DAYS.—For purposes

16 of clause (iii), the term ‘patient day’ in17 cludes each day in which—

18 ‘‘(I) an individual, including a

19 newborn, is an inpatient in the hos20 pital, whether or not the individual is

21 in a specialized ward and whether or

22 not the individual remains in the hos23 pital for lack of suitable placement

24 elsewhere; or
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1 ‘‘(II) an individual makes one or

2 more outpatient visits to the hospital.

3 ‘‘(2) CONDITIONS FOR GUARANTEES AND RELA4 TION OF GUARANTEES TO FINANCING.—The guaran5 tees of States required under subsection (a) and (b)

6 of section 1501 and subsection (d) of this section

7 are subject to the general eligibility guidelines of

8 States described under the plan under paragraph

9 (1)(A) and are subject to the limitations on payment

10 to the States provided under section 1511 (including

11 the provisions of subsection (g), relating to supple12 mental umbrella allotments). In submitting a plan

13 under this title, a State voluntarily agrees to accept

14 payment amounts provided under such section as

15 full payment from the Federal Government in return

16 for providing for the benefits (including the guaran17 teed benefit package) under this title.

18 ‘‘(3) SECONDARY PAYMENT.—Nothing in this

19 section shall be construed as preventing a State

20 from denying benefits to an individual to the extent

21 such benefits are available to the individual under

22 the medicare program under title XVIII or under

23 another public or private health care insurance pro24 gram.
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1 ‘‘(4) RESIDENCY REQUIREMENT.—In the case

2 of an individual who—

3 ‘‘(A) is described in section 1501(a)(1),

4 ‘‘(B) changed residence from another State

5 to the State, and

6 ‘‘(C) has resided in the State for less than

7 180 days,

8 the State may limit the benefits provided to such in9 dividual in the guaranteed benefits package under

10 paragraph (2) of section 1501(a) to the amount, du11 ration, and scope of benefits available under the

12 State plan of the individual’s previous State of resi13 dence.

14 ‘‘(c) SET-ASIDE OF FUNDS FOR THE LOW-INCOME

15 DISABLED.—

16 ‘‘(1) IN GENERAL.—In the case of a State that

17 has elected the option described in section

18 1501(a)(1)(D)(i) for a fiscal year, the State plan

19 shall provide that the percentage of funds expended

20 under the plan for medical assistance for eligible

21 low-income individuals who are not elderly individ22 uals and who are eligible for such assistance on the

23 basis of a disability, including being blind, for the

24 fiscal year is not less than the minimum low-income25 disabled percentage specified in paragraph (2) of the
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1 total funds expended under the plan for medical as2 sistance for the fiscal year.

3 ‘‘(2) MINIMUM LOW-INCOME-DISABLED PER4 CENTAGE.—The minimum low-income-disabled per5 centage specified in this paragraph for a State is

6 equal to 90 percent of the percentage of the expendi7 tures under title XIX for medical assistance in the

8 State during Federal fiscal year 1995 which was at9 tributable to expenditures for medical assistance for

10 benefits furnished to individuals whose coverage (at

11 such time) was on a basis directly related to disabil12 ity status, including being blind.

13 ‘‘(3) COMPUTATIONS.—States shall calculate

14 the minimum percentage under paragraph (2) in a

15 reasonable manner consistent with reports submitted

16 to the Secretary for the fiscal years involved and

17 medical assistance attributable to the exception pro18 vided under section 1903(v)(2) shall not be consid19 ered to be expenditures for medical assistance.

20 ‘‘(d) TRANSITIONAL PAYMENT FOR FEDERALLY21 QUALIFIED HEALTH CENTER SERVICES AND RURAL

22 HEALTH CLINIC SERVICES.—Each State plan shall pro23 vide that, for Federally-qualified health center services

24 and rural health clinic services (as defined in section

25 1571(f)) furnished under the plan during the first 8 cal-
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1 endar quarters in which the plan is in effect and for which

2 payment is made under the plan, payment shall be made

3 for such services at a rate based on 100 percent of costs

4 which are reasonable and related to the cost of furnishing

5 such services or based on such other tests of reasonable6 ness, as the Secretary prescribes in regulations under sec7 tion 1833(a)(3), or, in the case of services to which those

8 regulations do not apply, on the same methodology used

9 under section 1833(a)(3).

10 ‘‘(e) PREEXISTING CONDITION EXCLUSIONS.—Not11 withstanding any other provision of this title—

12 ‘‘(1) a State plan may not deny or exclude cov13 erage of any item or service for an eligible individual

14 for benefits under the State plan for such item or

15 service on the basis of a preexisting condition; and

16 ‘‘(2) if a State contracts or makes other ar17 rangements (through the eligible individual or

18 through another entity) with a capitated health care

19 organization, insurer, or other entity, for the provi20 sion of items or services to eligible individuals under

21 the State plan and the State permits such organiza22 tion, insurer, or other entity to exclude coverage of

23 a covered item or service on the basis of a preexist24 ing condition, the State shall provide, through its

25 State plan, for such coverage (through direct pay-
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1 ment or otherwise) for any such covered item or

2 service denied or excluded on the basis of a preexist3 ing condition.

4 ‘‘(f) SOLVENCY STANDARDS FOR CAPITATED

5 HEALTH CARE ORGANIZATIONS.—

6 ‘‘(1) IN GENERAL.—A State may not contract

7 with a capitated health care organization, as defined

8 in section 1504(c)(1), for the provision of medical

9 assistance under a State plan under which the orga10 nization is—

11 ‘‘(A) at full financial risk, as defined by

12 the State, unless the organization meets sol13 vency standards established by the State for

14 private health maintenance organizations, or

15 ‘‘(B) is not at such risk, unless the organi16 zation meets solvency standards that are estab17 lished under the State plan.

18 ‘‘(2) TREATMENT OF PUBLIC ENTITIES.—Para19 graph (1) shall not apply to an organization that is

20 a public entity or if the solvency of such organiza21 tion is guaranteed by the State.

22 ‘‘(3) TRANSITION.—In the case of a capitated

23 health care organization that as of the date of the

24 enactment of this title has entered into a contract

25 with a State for the provision of medical assistance
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1 under title XIX under which the organization as2 sumes full financial risk and is receiving capitation

3 payments, paragraph (1) shall not apply to such or4 ganization until 3 years after the date of the enact5 ment of this title.

6 ‘‘SEC. 1503. PREMIUMS AND COST-SHARING.

7 ‘‘(a) IN GENERAL.—Subject to subsection (b), if any

8 charges are imposed under the State plan for cost-sharing

9 (as defined in subsection (d)), such cost-sharing shall be

10 pursuant to a public cost-sharing schedule.

11 ‘‘(b) LIMITATION ON PREMIUM AND CERTAIN COST12 SHARING FOR LOW-INCOME FAMILIES INCLUDING CHIL13 DREN OR PREGNANT WOMEN.—

14 ‘‘(1) IN GENERAL.—In the case of a pregnant

15 woman or a child who is a member of a family de16 scribed in paragraph (2)—

17 ‘‘(A) the plan shall not impose any pre18 mium, and

19 ‘‘(B) the plan shall not (except as provided

20 in subsection (c)(1)) impose any cost-sharing

21 with respect to primary and preventive care

22 services (as defined by the State) covered under

23 the State plan for children or pregnant women

24 unless such cost-sharing is nominal in nature.
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1 ‘‘(2) FAMILY DESCRIBED.—A family described

2 in this paragraph is a family (which may be an indi3 vidual) which—

4 ‘‘(A) includes a child or a pregnant

5 woman,

6 ‘‘(B) is made eligible for medical assistance

7 under the State plan, and

8 ‘‘(C) the income of which does not exceed

9 100 percent of the poverty line applicable to a

10 family of the size involved.

11 ‘‘(c) CERTAIN COST-SHARING PERMITTED.—Nothing

12 in this section shall be construed as preventing a State

13 plan (consistent with subsection (b))—

14 ‘‘(1) from imposing cost-sharing to discourage

15 the inappropriate use of emergency medical services

16 delivered through a hospital emergency room, a med17 ical transportation provider, or otherwise,

18 ‘‘(2) from imposing premiums and cost-sharing

19 differentially in order to encourage the use of pri20 mary and preventive care and discourage unneces21 sary or less economical care,

22 ‘‘(3) from scaling cost-sharing in a manner that

23 reflects economic factors, employment status, and

24 family size,
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1 ‘‘(4) from scaling cost-sharing based on the

2 availability to the individual or family of other

3 health insurance coverage, or

4 ‘‘(5) from scaling cost-sharing based on partici5 pation in employment training programs, drug or al6 cohol abuse treatment, counseling programs, or

7 other programs promoting personal responsibility.

8 ‘‘(d) COST-SHARING DEFINED.—In this section, the

9 term ‘cost-sharing’ includes copayments, deductibles, coin10 surance, and other charges for the provision of health care

11 services.

12 ‘‘SEC. 1504. DESCRIPTION OF PROCESS FOR DEVELOPING

13 CAPITATION PAYMENT RATES.

14 ‘‘(a) IN GENERAL.—If a State contracts (or intends

15 to contract) with a capitated health care organization (as

16 defined in subsection (c)(1)) under which the State makes

17 a capitation payment (as defined in subsection (c)(2)) to

18 the organization for providing or arranging for the provi19 sion of medical assistance under the State plan for a group

20 of services, including at least inpatient hospital services

21 and physicians’ services, the plan shall include a descrip22 tion of the following:

23 ‘‘(1) USE OF ACTUARIAL SCIENCE.—The extent

24 and manner in which the State uses actuarial

25 science—
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1 ‘‘(A) to analyze and project health care ex2 penditures and utilization for individuals en3 rolled (or to be enrolled) in such an organiza4 tion under the State plan, and

5 ‘‘(B) to develop capitation payment rates,

6 including a brief description of the general

7 methodologies used by actuaries.

8 ‘‘(2) QUALIFICATIONS OF ORGANIZATIONS.—

9 The general qualifications, including any accredita10 tion, State licensure or certification, or provider net11 work standards, required by the State for participa12 tion of capitated health care organizations under the

13 State plan.

14 ‘‘(3) DISSEMINATION PROCESS.—The process

15 used by the State under subsection (b) and other16 wise to disseminate, before entering into contracts

17 with capitated health care organizations, actuarial

18 information to such organizations on the historical

19 fee-for-service costs (or, if not available, other recent

20 financial data associated with providing covered

21 services) and utilization associated with individuals

22 described in paragraph (1)(A).

23 ‘‘(b) PUBLIC NOTICE AND COMMENT.—Under the

24 State plan the State shall provide a process for providing,

25 before the beginning of each contract year—
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1 ‘‘(1) public notice of—

2 ‘‘(A) the amounts of the capitation pay3 ments (if any) made under the plan for the con4 tract year preceding the public notice, and

5 ‘‘(B)(i) the information described under

6 subsection (a)(1) with respect to capitation pay7 ments for the contract year involved, or (ii)

8 amounts of the capitation payments the State

9 expects to make for the contract year involved,

10 unless such information is designated as proprietary

11 and not subject to public disclosure under State law,

12 and

13 ‘‘(2) an opportunity for receiving public com14 ment on the amounts and information for which no15 tice is provided under paragraph (1).

16 ‘‘(c) DEFINITIONS.—In this title:

17 ‘‘(1) CAPITATED HEALTH CARE ORGANIZA18 TION.—The term ‘capitated health care organiza19 tion’ means a health maintenance organization or

20 any other entity (including a health insuring organi21 zation, managed care organization, prepaid health

22 plan, integrated service network, or similar entity)

23 which under State law is permitted to accept capita24 tion payments for providing (or arranging for the

25 provision of) a group of items and services including
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1 at least inpatient hospital services and physicians’

2 services.

3 ‘‘(2) CAPITATION PAYMENT.—The term ‘capita4 tion payment’ means, with respect to payment, pay5 ment on a prepaid capitation basis or any other risk

6 basis to an entity for the entity’s provision (or ar7 ranging for the provision) of a group of items and

8 services, including at least inpatient hospital services

9 and physicians’ services.

10 ‘‘SEC. 1505. PREVENTING SPOUSAL IMPOVERISHMENT.

11 ‘‘(a) SPECIAL TREATMENT FOR INSTITUTIONALIZED

12 SPOUSES.—

13 ‘‘(1) SUPERSEDES OTHER PROVISIONS.—In de14 termining the eligibility for medical assistance of an

15 institutionalized spouse (as defined in subsection

16 (h)(1)), the provisions of this section supersede any

17 other provision of this title which is inconsistent

18 with them.

19 ‘‘(2) DOES NOT AFFECT CERTAIN DETERMINA20 TIONS.—Except as this section specifically provides,

21 this section does not apply to—

22 ‘‘(A) the determination of what constitutes

23 income or resources, or
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1 ‘‘(B) the methodology and standards for

2 determining and evaluating income and re3 sources.

4 ‘‘(3) NO APPLICATION IN COMMONWEALTHS

5 AND TERRITORIES.—This section shall only apply to

6 a State that is one of the 50 States or the District

7 of Columbia.

8 ‘‘(b) RULES FOR TREATMENT OF INCOME.—

9 ‘‘(1) SEPARATE TREATMENT OF INCOME.—Dur10 ing any month in which an institutionalized spouse

11 is in the institution, except as provided in paragraph

12 (2), no income of the community spouse shall be

13 deemed available to the institutionalized spouse.

14 ‘‘(2) ATTRIBUTION OF INCOME.—In determin15 ing the income of an institutionalized spouse or com16 munity spouse for purposes of the post-eligibility in17 come determination described in subsection (d), ex18 cept as otherwise provided in this section and re19 gardless of any State laws relating to community

20 property or the division of marital property, the fol21 lowing rules apply:

22 ‘‘(A) NON-TRUST PROPERTY.—Subject to

23 subparagraphs (C) and (D), in the case of in24 come not from a trust, unless the instrument
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1 providing the income otherwise specifically pro2 vides—

3 ‘‘(i) if payment of income is made

4 solely in the name of the institutionalized

5 spouse or the community spouse, the in6 come shall be considered available only to

7 that respective spouse,

8 ‘‘(ii) if payment of income is made in

9 the names of the institutionalized spouse

and the community spouse, 1 10 ⁄2 of the in11 come shall be considered available to each

12 of them, and

13 ‘‘(iii) if payment of income is made in

14 the names of the institutionalized spouse

15 or the community spouse, or both, and to

16 another person or persons, the income

17 shall be considered available to each spouse

18 in proportion to the spouse’s interest (or,

19 if payment is made with respect to both

20 spouses and no such interest is specified,

1 21 ⁄2 of the joint interest shall be considered

22 available to each spouse).

23 ‘‘(B) TRUST PROPERTY.—In the case of a

24 trust—
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1 ‘‘(i) except as provided in clause (ii),

2 income shall be attributed in accordance

3 with the provisions of this title; and

4 ‘‘(ii) income shall be considered avail5 able to each spouse as provided in the

6 trust, or, in the absence of a specific provi7 sion in the trust—

8 ‘‘(I) if payment of income is

9 made solely to the institutionalized

10 spouse or the community spouse, the

11 income shall be considered available

12 only to that respective spouse,

13 ‘‘(II) if payment of income is

14 made to both the institutionalized

spouse and the community spouse, 1 15 ⁄2

16 of the income shall be considered

17 available to each of them, and

18 ‘‘(III) if payment of income is

19 made to the institutionalized spouse

20 or the community spouse, or both,

21 and to another person or persons, the

22 income shall be considered available to

23 each spouse in proportion to the

24 spouse’s interest (or, if payment is

25 made with respect to both spouses
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and no such interest is specified, 1 1 ⁄2 of

2 the joint interest shall be considered

3 available to each spouse).

4 ‘‘(C) PROPERTY WITH NO INSTRUMENT.—

5 In the case of income not from a trust in which

6 there is no instrument establishing ownership,

subject to subparagraph (D), 1 7 ⁄2 of the income

8 shall be considered to be available to the institutionalized spouse and 1 9 ⁄2 to the community

10 spouse.

11 ‘‘(D) REBUTTING OWNERSHIP.—The rules

12 of subparagraphs (A) and (C) are superseded to

13 the extent that an institutionalized spouse can

14 establish, by a preponderance of the evidence,

15 that the ownership interests in income are other

16 than as provided under such subparagraphs.

17 ‘‘(c) RULES FOR TREATMENT OF RESOURCES.—

18 ‘‘(1) COMPUTATION OF SPOUSAL SHARE AT

19 TIME OF INSTITUTIONALIZATION.—

20 ‘‘(A) TOTAL JOINT RESOURCES.—There

21 shall be computed (as of the beginning of the

22 first continuous period of institutionalization of

23 the institutionalized spouse)—

24 ‘‘(i) the total value of the resources to

25 the extent either the institutionalized
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1 spouse or the community spouse has an

2 ownership interest, and

3 ‘‘(ii) a spousal share which is equal to

1 4 ⁄2 of such total value.

5 ‘‘(B) ASSESSMENT.—At the request of an

6 institutionalized spouse or community spouse,

7 at the beginning of the first continuous period

8 of institutionalization of the institutionalized

9 spouse and upon the receipt of relevant docu10 mentation of resources, the State shall promptly

11 assess and document the total value described

12 in subparagraph (A)(i) and shall provide a copy

13 of such assessment and documentation to each

14 spouse and shall retain a copy of the assess15 ment for use under this section. If the request

16 is not part of an application for medical assist17 ance under this title, the State may, at its op18 tion as a condition of providing the assessment,

19 require payment of a fee not exceeding the rea20 sonable expenses of providing and documenting

21 the assessment. At the time of providing the

22 copy of the assessment, the State shall include

23 a notice indicating that the spouse will have a

24 right to a fair hearing under subsection (e)(2).
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1 ‘‘(2) ATTRIBUTION OF RESOURCES AT TIME OF

2 INITIAL ELIGIBILITY DETERMINATION.—In deter3 mining the resources of an institutionalized spouse

4 at the time of application for medical assistance

5 under this title, regardless of any State laws relating

6 to community property or the division of marital

7 property—

8 ‘‘(A) except as provided in subparagraph

9 (B), all the resources held by either the institu10 tionalized spouse, community spouse, or both,

11 shall be considered to be available to the insti12 tutionalized spouse, and

13 ‘‘(B) resources shall be considered to be

14 available to an institutionalized spouse, but only

15 to the extent that the amount of such resources

16 exceeds the amount computed under subsection

17 (f)(2)(A) (as of the time of application for med18 ical assistance).

19 ‘‘(3) ASSIGNMENT OF SUPPORT RIGHTS.—The

20 institutionalized spouse shall not be ineligible by rea21 son of resources determined under paragraph (2) to

22 be available for the cost of care where—

23 ‘‘(A) the institutionalized spouse has as24 signed to the State any rights to support from

25 the community spouse,
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1 ‘‘(B) the institutionalized spouse lacks the

2 ability to execute an assignment due to physical

3 or mental impairment but the State has the

4 right to bring a support proceeding against a

5 community spouse without such assignment, or

6 ‘‘(C) the State determines that denial of

7 eligibility would work an undue hardship.

8 ‘‘(4) SEPARATE TREATMENT OF RESOURCES

9 AFTER ELIGIBILITY FOR MEDICAL ASSISTANCE ES10 TABLISHED.—During the continuous period in which

11 an institutionalized spouse is in an institution and

12 after the month in which an institutionalized spouse

13 is determined to be eligible for medical assistance

14 under this title, no resources of the community

15 spouse shall be deemed available to the institutional16 ized spouse.

17 ‘‘(5) RESOURCES DEFINED.—In this section,

18 the term ‘resources’ does not include—

19 ‘‘(A) resources excluded under subsection

20 (a) or (d) of section 1613, and

21 ‘‘(B) resources that would be excluded

22 under section 1613(a)(2)(A) but for the limita23 tion on total value described in such section.

24 ‘‘(d) PROTECTING INCOME FOR COMMUNITY

25 SPOUSE.—
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1 ‘‘(1) ALLOWANCES TO BE OFFSET FROM IN2 COME OF INSTITUTIONALIZED SPOUSE.—After an

3 institutionalized spouse is determined or redeter4 mined to be eligible for medical assistance, in deter5 mining the amount of the spouse’s income that is to

6 be applied monthly to payment for the costs of care

7 in the institution, there shall be deducted from the

8 spouse’s monthly income the following amounts in

9 the following order:

10 ‘‘(A) A personal needs allowance (described

11 in paragraph (2)(A)), in an amount not less

12 than the amount specified in paragraph (2)(C).

13 ‘‘(B) A community spouse monthly income

14 allowance (as defined in paragraph (3)), but

15 only to the extent income of the institutional16 ized spouse is made available to (or for the ben17 efit of) the community spouse.

18 ‘‘(C) A family allowance, for each family

member, equal to at least 1 19 ⁄3 of the amount by

20 which the amount described in paragraph

21 (4)(A)(i) exceeds the amount of the monthly in22 come of that family member.

23 ‘‘(D) Amounts for incurred expenses for

24 medical or remedial care for the institutional25 ized spouse as provided under paragraph (6).
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1 In subparagraph (C), the term ‘family member’ only

2 includes minor or dependent children, dependent

3 parents, or dependent siblings of the institutional4 ized or community spouse who are residing with the

5 community spouse.

6 ‘‘(2) PERSONAL NEEDS ALLOWANCE.—

7 ‘‘(A) IN GENERAL.—The State plan must

8 provide that, in the case of an institutionalized

9 individual or couple described in subparagraph

10 (B), in determining the amount of the individ11 ual’s or couple’s income to be applied monthly

12 to payment for the cost of care in an institu13 tion, there shall be deducted from the monthly

14 income (in addition to other allowances other15 wise provided under the plan) a monthly per16 sonal needs allowance—

17 ‘‘(i) which is reasonable in amount for

18 clothing and other personal needs of the

19 individual (or couple) while in an institu20 tion, and

21 ‘‘(ii) which is not less (and may be

22 greater) than the minimum monthly per23 sonal needs allowance described in sub24 paragraph (C).
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1 ‘‘(B) INSTITUTIONALIZED INDIVIDUAL OR

2 COUPLE DEFINED.—In this paragraph, the

3 term ‘institutionalized individual or couple’

4 means an individual or married couple—

5 ‘‘(i) who is an inpatient (or who are

6 inpatients) in a medical institution or

7 nursing facility for which payments are

8 made under this title throughout a month,

9 and

10 ‘‘(ii) who is or are determined to be

11 eligible for medical assistance under the

12 State plan.

13 ‘‘(C) MINIMUM ALLOWANCE.—The mini14 mum monthly personal needs allowance de15 scribed in this subparagraph is $40 for an insti16 tutionalized individual and $80 for an institu17 tionalized couple (if both are aged, blind, or dis18 abled, and their incomes are considered avail19 able to each other in determining eligibility).

20 ‘‘(3) COMMUNITY SPOUSE MONTHLY INCOME

21 ALLOWANCE DEFINED.—

22 ‘‘(A) IN GENERAL.—In this section (except

23 as provided in subparagraph (B)), the commu24 nity spouse monthly income allowance for a

25 community spouse is an amount by which—
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1 ‘‘(i) except as provided in subsection

2 (e), the minimum monthly maintenance

3 needs allowance (established under and in

4 accordance with paragraph (4)) for the

5 spouse, exceeds

6 ‘‘(ii) the amount of monthly income

7 otherwise available to the community

8 spouse (determined without regard to such

9 an allowance).

10 ‘‘(B) COURT ORDERED SUPPORT.—If a

11 court has entered an order against an institu12 tionalized spouse for monthly income for the

13 support of the community spouse, the commu14 nity spouse monthly income allowance for the

15 spouse shall be not less than the amount of the

16 monthly income so ordered.

17 ‘‘(4) ESTABLISHMENT OF MINIMUM MONTHLY

18 MAINTENANCE NEEDS ALLOWANCE.—

19 ‘‘(A) IN GENERAL.—Each State shall es20 tablish a minimum monthly maintenance needs

21 allowance for each community spouse which,

22 subject to subparagraph (B), is equal to or ex23 ceeds—
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‘‘(i) 150 percent of 1 1 ⁄12 of the poverty

2 line applicable to a family unit of 2 mem3 bers, plus

4 ‘‘(ii) an excess shelter allowance (as

5 defined in paragraph (4)).

6 A revision of the poverty line referred to in

7 clause (i) shall apply to medical assistance fur8 nished during and after the second calendar

9 quarter that begins after the date of publication

10 of the revision.

11 ‘‘(B) CAP ON MINIMUM MONTHLY MAINTE12 NANCE NEEDS ALLOWANCE.—The minimum

13 monthly maintenance needs allowance estab14 lished under subparagraph (A) may not exceed

15 $1,500 (subject to adjustment under sub16 sections (e) and (g)).

17 ‘‘(5) EXCESS SHELTER ALLOWANCE DE18 FINED.—In paragraph (4)(A)(ii), the term ‘excess

19 shelter allowance’ means, for a community spouse,

20 the amount by which the sum of—

21 ‘‘(A) the spouse’s expenses for rent or

22 mortgage payment (including principal and in23 terest), taxes and insurance and, in the case of

24 a condominium or cooperative, required mainte-
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1 nance charge, for the community spouse’s prin2 cipal residence, and

3 ‘‘(B) the standard utility allowance (used

4 by the State under section 5(e) of the Food

5 Stamp Act of 1977) or, if the State does not

6 use such an allowance, the spouse’s actual util7 ity expenses,

8 exceeds 30 percent of the amount described in para9 graph (4)(A)(i), except that, in the case of a con10 dominium or cooperative, for which a maintenance

11 charge is included under subparagraph (A), any al12 lowance under subparagraph (B) shall be reduced to

13 the extent the maintenance charge includes utility

14 expenses.

15 ‘‘(6) TREATMENT OF INCURRED EXPENSES.—

16 With respect to the post-eligibility treatment of in17 come under this section, there shall be disregarded

18 reparation payments made by the Federal Republic

19 of Germany and, there shall be taken into account

20 amounts for incurred expenses for medical or reme21 dial care that are not subject to payment by a third

22 party, including—

23 ‘‘(A) medicare and other health insurance

24 premiums, deductibles, or coinsurance, and
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1 ‘‘(B) necessary medical or remedial care

2 recognized under State law but not covered

3 under the State plan under this title, subject to

4 reasonable limits the State may establish on the

5 amount of these expenses.

6 ‘‘(e) NOTICE AND FAIR HEARING.—

7 ‘‘(1) NOTICE.—Upon—

8 ‘‘(A) a determination of eligibility for med9 ical assistance of an institutionalized spouse, or

10 ‘‘(B) a request by either the institutional11 ized spouse, or the community spouse, or a rep12 resentative acting on behalf of either spouse,

13 each State shall notify both spouses (in the case de14 scribed in subparagraph (A)) or the spouse making

15 the request (in the case described in subparagraph

16 (B)) of the amount of the community spouse month17 ly income allowance (described in subsection

18 (d)(1)(B)), of the amount of any family allowances

19 (described in subsection (d)(1)(C)), of the method

20 for computing the amount of the community spouse

21 resources allowance permitted under subsection (f),

22 and of the spouse’s right to a fair hearing under the

23 State plan respecting ownership or availability of in24 come or resources, and the determination of the
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1 community spouse monthly income or resource al2 lowance.

3 ‘‘(2) FAIR HEARING.—

4 ‘‘(A) IN GENERAL.—If either the institu5 tionalized spouse or the community spouse is

6 dissatisfied with a determination of—

7 ‘‘(i) the community spouse monthly

8 income allowance;

9 ‘‘(ii) the amount of monthly income

10 otherwise available to the community

11 spouse (as applied under subsection

12 (d)(3)(A)(ii));

13 ‘‘(iii) the computation of the spousal

14 share of resources under subsection (c)(1);

15 ‘‘(iv) the attribution of resources

16 under subsection (c)(2); or

17 ‘‘(v) the determination of the commu18 nity spouse resource allowance (as defined

19 in subsection (f)(2));

20 such spouse is entitled to a fair hearing under

21 the State plan with respect to such determina22 tion if an application for benefits under this

23 title has been made on behalf of the institu24 tionalized spouse. Any such hearing respecting

25 the determination of the community spouse re-
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1 source allowance shall be held within 30 days of

2 the date of the request for the hearing.

3 ‘‘(B) REVISION OF MINIMUM MONTHLY

4 MAINTENANCE NEEDS ALLOWANCE.—If either

5 such spouse establishes that the community

6 spouse needs income, above the level otherwise

7 provided by the minimum monthly maintenance

8 needs allowance, due to exceptional cir9 cumstances resulting in significant financial du10 ress, there shall be substituted, for the mini11 mum monthly maintenance needs allowance in

12 subsection (d)(3)(A)(i), an amount adequate to

13 provide such additional income as is necessary.

14 ‘‘(C) REVISION OF COMMUNITY SPOUSE

15 RESOURCE ALLOWANCE.—If either such spouse

16 establishes that the community spouse resource

17 allowance (in relation to the amount of income

18 generated by such an allowance) is inadequate

19 to raise the community spouse’s income to the

20 minimum monthly maintenance needs allow21 ance, there shall be substituted, for the commu22 nity spouse resource allowance under subsection

23 (f)(2), an amount adequate to provide such a

24 minimum monthly maintenance needs allow25 ance.
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1 ‘‘(f) PERMITTING TRANSFER OF RESOURCES TO

2 COMMUNITY SPOUSE.—

3 ‘‘(1) IN GENERAL.—An institutionalized spouse

4 may, without regard to any other provision of the

5 State plan to the contrary, transfer an amount equal

6 to the community spouse resource allowance (as de7 fined in paragraph (2)), but only to the extent the

8 resources of the institutionalized spouse are trans9 ferred to, or for the sole benefit of, the community

10 spouse. The transfer under the preceding sentence

11 shall be made as soon as practicable after the date

12 of the initial determination of eligibility, taking into

13 account such time as may be necessary to obtain a

14 court order under paragraph (3).

15 ‘‘(2) COMMUNITY SPOUSE RESOURCE ALLOW16 ANCE DEFINED.—In paragraph (1), the ‘community

17 spouse resource allowance’ for a community spouse

18 is an amount (if any) by which—

19 ‘‘(A) the greatest of—

20 ‘‘(i) $12,000 (subject to adjustment

21 under subsection (g)), or, if greater (but

22 not to exceed the amount specified in

23 clause (ii)(II)) an amount specified under

24 the State plan,
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1 ‘‘(ii) the lesser of (I) the spousal

2 share computed under subsection (c)(1), or

3 (II) $60,000 (subject to adjustment under

4 subsection (g)),

5 ‘‘(iii) the amount established under

6 subsection (e)(2), or

7 ‘‘(iv) the amount transferred under a

8 court order under paragraph (3);

9 exceeds

10 ‘‘(B) the amount of the resources other11 wise available to the community spouse (deter12 mined without regard to such an allowance).

13 ‘‘(3) TRANSFERS UNDER COURT ORDERS.—If a

14 court has entered an order against an institutional15 ized spouse for the support of the community

16 spouse, any provisions under the plan relating to

17 transfers or disposals of assets for less than fair

18 market value shall not apply to amounts of resources

19 transferred pursuant to such order for the support

20 of the spouse or a family member (as defined in sub21 section (d)(1)).

22 ‘‘(g) INDEXING DOLLAR AMOUNTS.—For services

23 furnished during a calendar year after 1989, the dollar

24 amounts specified in subsections (d)(3)(C), (f)(2)(A)(i),

25 and (f)(2)(A)(ii)(II) shall be increased by the same per-
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1 centage as the percentage increase in the consumer price

2 index for all urban consumers (all items; U.S. city aver3 age) between September 1988 and the September before

4 the calendar year involved.

5 ‘‘(h) DEFINITIONS.—In this section:

6 ‘‘(1) INSTITUTIONALIZED SPOUSE.—The term

7 ‘institutionalized spouse’ means an individual—

8 ‘‘(A)(i) who is in a medical institution or

9 nursing facility, or

10 ‘‘(ii) at the option of the State (I) who

11 would be eligible under the State plan under

12 this title if such individual was in a medical in13 stitution, (II) with respect to whom there has

14 been a determination that but for the provision

15 of home or community-based services such indi16 vidual would require the level of care provided

17 in a hospital, nursing facility or intermediate

18 care facility for the mentally retarded the cost

19 of which could be reimbursed under the plan,

20 and (III) who will receive home or community21 based services pursuant the plan; and

22 ‘‘(B) is married to a spouse who is not in

23 a medical institution or nursing facility;
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1 but does not include any such individual who is not

2 likely to meet the requirements of subparagraph (A)

3 for at least 30 consecutive days.

4 ‘‘(2) COMMUNITY SPOUSE.—The term ‘commu5 nity spouse’ means the spouse of an institutionalized

6 spouse.

7 ‘‘SEC. 1506. PREVENTING FAMILY IMPOVERISHMENT.

8 ‘‘(a) RESPONSIBILITIES FOR LONG-TERM CARE GEN9 ERALLY.—A State plan may not—

10 ‘‘(1) require an adult child or any other individ11 ual (other than the applicant or recipient of services

12 or the spouse of such an applicant or recipient) to

13 contribute to the cost of covered nursing facility

14 services and other long-term care services under the

15 plan; and

16 ‘‘(2) take into account with respect to such

17 services the financial responsibility of any individual

18 for any applicant or recipient of assistance under the

19 plan unless such applicant or recipient is such indi20 vidual’s spouse or such individual’s child who is

21 under age 21 or (with respect to States eligible to

22 participate in the State program established under

23 title XVI), is blind or permanently and totally dis24 abled, or is blind or disabled as defined in section
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1 1614 (with respect to States which are not eligible

2 to participate in such program).

3 ‘‘(b) LIMITATIONS ON LIENS.—

4 ‘‘(1) IN GENERAL.—No lien may be imposed

5 against the property of any individual prior to the

6 individual’s death on account of medical assistance

7 paid or to be paid on the individual’s behalf under

8 a State plan, except—

9 ‘‘(A) pursuant to the judgment of a court

10 on account of benefits incorrectly paid on behalf

11 of such individual; or

12 ‘‘(B) in the case of the real property of an

13 individual—

14 ‘‘(i) who is an inpatient in a nursing

15 facility, intermediate care facility for the

16 mentally retarded, or other medical institu17 tion, if such individual is required, as a

18 condition of receiving services in such insti19 tution under the plan, to spend for costs of

20 medical care all but a minimal amount of

21 the individual’s income required for per22 sonal needs, and

23 ‘‘(ii) with respect to whom the State

24 determines, after notice and opportunity

25 for a hearing (in accordance with proce-
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1 dures established by the State), that the

2 individual cannot reasonably be expected to

3 be discharged from the medical institution

4 and to return home,

5 except as provided in paragraph (2).

6 ‘‘(2) EXCEPTION.—No lien may be imposed

7 under paragraph (1)(B) on such individual’s home

8 if—

9 ‘‘(A) the spouse of such individual,

10 ‘‘(B) such individual’s child who is under

11 age 21, or (with respect to States eligible to

12 participate in the State program established

13 under title XVI) is blind or permanently and to14 tally disabled, or (with respect to States which

15 are not eligible to participate in such program)

16 is blind or disabled as defined in section 1614,

17 or

18 ‘‘(C) a sibling of such individual (who has

19 an equity interest in such home and who was

20 residing in such individual’s home for a period

21 of at least one year immediately before the date

22 of the individual’s admission to the medical in23 stitution),

24 is lawfully residing in such home.
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1 ‘‘(3) DISSOLUTION UPON RETURN HOME.—Any

2 lien imposed with respect to an individual pursuant

3 to paragraph (1)(B) shall dissolve upon that individ4 ual’s discharge from the medical institution and re5 turn home.

6 ‘‘SEC. 1507. STATE FLEXIBILITY.

7 ‘‘(a) STATE FLEXIBILITY IN BENEFITS, PROVIDER

8 PAYMENTS, GEOGRAPHICAL COVERAGE AREA, AND SE9 LECTION OF PROVIDERS.—The State under its State plan

10 may—

11 ‘‘(1) specify those items and services for which

12 medical assistance is provided (consistent with guar13 antees under subsections (a) and (b) of section

14 1501), the providers which may provide such items

15 and services, and the amount and frequency of pro16 viding such items and services (consistent with the

17 requirements of section 1502(d));

18 ‘‘(2) specify the extent to which the same medi19 cal assistance will be provided in all geographical

20 areas or political subdivisions of the State, so long

21 as medical assistance is made available in all such

22 areas or subdivisions;

23 ‘‘(3) specify the extent to which the medical as24 sistance made available to any individual eligible for

25 medical assistance is comparable in amount, dura-
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1 tion, or scope to the medical assistance made avail2 able to any other such individual; and

3 ‘‘(4) specify the extent to which an individual

4 eligible for medical assistance with respect to an

5 item or service may choose to obtain such assistance

6 from any institution, agency, or person qualified to

7 provide the item or service.

8 ‘‘(b) STATE FLEXIBILITY WITH RESPECT TO MAN9 AGED CARE.—Nothing in this title shall be construed—

10 ‘‘(1) to limit a State’s ability to contract with,

11 on a capitated basis or otherwise, health care plans

12 or individual health care providers for the provision

13 or arrangement of medical assistance,

14 ‘‘(2) to limit a State’s ability to contract with

15 health care plans or other entities for case manage16 ment services or for coordination of medical assist17 ance, or

18 ‘‘(3) to restrict a State from establishing capi19 tation rates on the basis of competition among

20 health care plans or negotiations between the State

21 and one or more health care plans.

22 ‘‘SEC. 1508. PRIVATE RIGHTS OF ACTION.

23 ‘‘(a) LIMITATION ON FEDERAL CAUSES OF AC24 TION.—Except as provided in this section, no person or

25 entity may bring an action against a State in Federal
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1 court based on its failure to comply with any requirement

2 of this title.

3 ‘‘(b) STATE CAUSES OF ACTION.—

4 ‘‘(1) ADMINISTRATIVE PROCEDURES.—A State

5 plan shall provide for—

6 ‘‘(A) an administrative procedure whereby

7 an individual alleging a denial of benefits under

8 the State plan may receive a hearing regarding

9 such denial, and

10 ‘‘(B) judicial review, through a private

11 right of action in a State court by an individual

12 or class of individuals, regarding such a denial,

13 but a State may require exhaustion of adminis14 trative remedies before such an action may be

15 taken.

16 ‘‘(2) WRIT OF CERTIORARI.—An individual or

17 class may file a petition for certiorari before the Su18 preme Court of the United States in a case of a de19 nial of benefits under the State plan to review a de20 termination of the highest court of a State regarding

21 such denial.

22 (3) CONSTRUCTION.—Nothing in this sub23 section shall be construed as requiring a State to

24 provide a private right of action in State court by
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1 a provider, health plan, or a class of providers or

2 health plans.

3 ‘‘(c) SECRETARIAL RELIEF.—

4 ‘‘(1) IN GENERAL.—The Secretary may bring

5 an action in Federal court against a State and on

6 behalf of an individual or class of individuals in

7 order to assure that a State provides benefits to in8 dividuals and classes of individuals as guaranteed

9 under subsection (a) or (b) of section 1501 under its

10 State plan.

11 ‘‘(2) NO PRIVATE RIGHT.—No action may be

12 brought in any court against the Secretary based on

13 the Secretary’s bringing, or failure to bring, an ac14 tion under paragraph (1).

15 ‘‘(3) CONSTRUCTION.—Nothing in this title

16 shall be construed as authorizing the Secretary to

17 bring an action on behalf of a provider, health plan,

18 or a class of providers or health plans.

19 ‘‘Part B——Payments to States

20 ‘‘SEC. 1511. ALLOTMENT OF FUNDS AMONG STATES.

21 ‘‘(a) ALLOTMENTS.—

22 ‘‘(1) COMPUTATION.—The Secretary shall pro23 vide for the computation of State obligation and out24 lay allotments in accordance with this section for

25 each fiscal year beginning with fiscal year 1997.
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1 Nothing in this part shall be construed as authoriz2 ing payment under this part to any State for fiscal

3 year 1996.

4 ‘‘(2) LIMITATION ON OBLIGATIONS.—

5 ‘‘(A) IN GENERAL.—Subject to the suc6 ceeding provisions of this paragraph, the Sec7 retary shall not enter into obligations with any

8 State under this title for a fiscal year in excess

9 of the sum of the following allotments for the

10 State for the fiscal year:

11 ‘‘(i) BASE OBLIGATION ALLOT12 MENT.—The amount of the base obligation

13 allotment for that State for the fiscal year

14 under paragraph (4).

15 ‘‘(ii) SUPPLEMENTAL ALLOTMENT

16 FOR CERTAIN ALIENS.—The amount of

17 any supplemental allotment for that State

18 for the fiscal year under subsection (f).

19 ‘‘(iii) SUPPLEMENTAL PER BENE20 FICIARY UMBRELLA ALLOTMENT.—The

21 amount of any supplemental per bene22 ficiary umbrella allotment for that State

23 for the fiscal year under subsection (g).

24 ‘‘(iv) SUPPLEMENTAL ALLOTMENT

25 FOR INDIAN HEALTH SERVICES.—The
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1 amount of any supplemental allotment for

2 that State for the fiscal year under sub3 section (h).

4 The sum of the base obligation allotments for all

5 States in any fiscal year (excluding amounts carried

6 over under subparagraph (B) and excluding changes

7 in allotments effected under paragraph (4)(D)) shall

8 not exceed the aggregate limit on new base obliga9 tion authority specified in paragraph (3) for that fis10 cal year.

11 ‘‘(B) ADJUSTMENTS.—

12 ‘‘(i) CARRYOVER OF BASE ALLOTMENT

13 PERMITTED.—Subject to clauses (ii), if the

14 amount of obligations entered into under

15 this part with a State for quarters in a fis16 cal year is less than the amount of the ob17 ligation allotment under this section to the

18 State for the fiscal year, the amount of the

19 difference (less any amount computed

20 under clause (iii)) shall be added to the

21 amount of the State obligation allotment

22 otherwise provided under this section for

23 the succeeding fiscal year.

24 ‘‘(ii) NO CARRYOVER PERMITTED FOR

25 STATES RECEIVING SUPPLEMENTAL UM-
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1 BRELLA ALLOTMENTS.—Clause (i) shall

2 not apply, insofar as it permits a carryover

3 for a State from a particular year to the

4 next year, if in the particular year the

5 State receives a supplemental umbrella al6 lotment under subsection (g).

7 ‘‘(iii) NO CARRYOVER OF ALIEN AND

8 INDIAN SUPPLEMENTAL ALLOTMENTS.—

9 The amount of any carryover under clause

10 (i) from a fiscal year shall be reduced by

11 the amount (if any) by which the amount

12 of the outlays for expenditures described in

13 subsection (f) or (h) for the fiscal year is

14 less than the amount of any supplemental

15 allotment provided under the respective

16 subsection for the State and fiscal year in17 volved.

18 ‘‘(C) REDUCTION FOR NEW OBLIGATIONS

19 UNDER TITLE XIX IN FISCAL YEAR 1997.—The

20 amount of the base obligation allotment other21 wise provided under this section for fiscal year

22 1997 for a State shall be reduced by the

23 amount of the obligations entered into with re24 spect to the State under section 1903(a) during

25 such fiscal year.
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1 ‘‘(D) NO EFFECT ON PRIOR YEAR OBLIGA2 TIONS.—Subparagraph (A) shall not apply to or

3 affect obligations for a fiscal year prior to fiscal

4 year 1997.

5 ‘‘(E) OBLIGATION.—For purposes of this

6 section, the Secretary’s establishment of an es7 timate under section 1512(b) of the amount a

8 State is entitled to receive for a quarter (taking

9 into account any adjustments described in such

10 subsection) beginning during or after fiscal year

11 1997 shall be treated as the obligation of such

12 amount for the State as of the first day of the

13 quarter.

14 ‘‘(F) RELATION TO GUARANTEES.—The

15 Federal Government’s obligations for payments

16 under this title are limited as provided under

17 subparagraph (A) and are only subject to ad18 justment based on any guarantee provided

19 under section 1501 as provided under sub20 section (g).

21 ‘‘(3) AGGREGATE LIMIT ON NEW BASE OBLIGA22 TION AUTHORITY.—

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

24 subsection, subject to subparagraph (C), the

25 ‘aggregate limit on new base obligation author-
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1 ity’, for a fiscal year, is the base pool amount

2 under subsection (b) for the fiscal year, divided

3 by the payout adjustment factor (described in

4 subparagraph (B)) for the fiscal year.

5 ‘‘(B) PAYOUT ADJUSTMENT FACTOR.—For

6 purposes of this subsection, the ‘payout adjust7 ment factor’—

8 ‘‘(i) for fiscal year 1997 is 0.950,

9 ‘‘(ii) for fiscal year 1998 is 0.986, and

10 ‘‘(iii) for a subsequent fiscal year is

11 0.998.

12 ‘‘(C) TRANSITIONAL ADJUSTMENT FOR

13 PRE-FISCAL YEAR 1997-OBLIGATION OUTLAYS.—

14 In order to account for pre-fiscal year 1997-ob15 ligation outlays described in paragraph

16 (4)(C)(iv), in determining the aggregate limit

17 on new obligation authority under subpara18 graph (A) for fiscal year 1997, the pool amount

19 for such fiscal year is equal to—

20 ‘‘(i) the pool amount for such year,

21 reduced by

22 ‘‘(ii) $12,000,000,000.

23 ‘‘(4) BASE OBLIGATION ALLOTMENTS.—

24 ‘‘(A) GENERAL RULE FOR 50 STATES AND

25 THE DISTRICT OF COLUMBIA.—Except as pro-
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1 vided in this paragraph, the ‘base obligation al2 lotment’ for any of the 50 States or the District

3 of Columbia for a fiscal year (beginning with

4 fiscal year 1997) is an amount that bears the

5 same ratio to the base outlay allotment under

6 subsection (c)(2) for such State or District (not

7 taking into account any adjustment due to an

8 election under subsection (c)(4)) for the fiscal

9 year as the ratio of—

10 ‘‘(i) the aggregate limit on new base

11 obligation authority (less the total of the

12 obligation allotments under subparagraph

13 (B)) for the fiscal year, to

14 ‘‘(ii) the base pool amount (less the

15 sum of the base outlay allotments for the

16 territories) for such fiscal year.

17 ‘‘(B) TERRITORIES.—The base obligation

18 allotment for each of the Commonwealths and

19 territories for a fiscal year is the base outlay al20 lotment for such Commonwealth or Territory

21 (as determined under subsection (c)(5)) for the

22 fiscal year divided by the payout adjustment

23 factor for the fiscal year (as defined in para24 graph (3)(B)).
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1 ‘‘(C) TRANSITIONAL RULE FOR FISCAL

2 YEAR 1997.—

3 ‘‘(i) IN GENERAL.—The obligation

4 amount for fiscal year 1997 for any State

5 (including the District of Columbia, a

6 Commonwealth, or Territory) is deter7 mined according to the formula: A=(B-C)/

8 D, where—

9 ‘‘(I) ‘A’ is the base obligation

10 amount for such State,

11 ‘‘(II) ‘B’ is the base outlay allot12 ment of such State for fiscal year

13 1997, as determined under subsection

14 (c),

15 ‘‘(III) ‘C’ is the amount of the

16 pre-enactment-obligation outlays (as

17 established for such State under

18 clause (ii)), and

19 ‘‘(IV) ‘D’ is the payout adjust20 ment factor for such fiscal year (as

21 defined in paragraph (3)(B)).

22 ‘‘(ii) PRE-FISCAL YEAR 1997-OBLIGA23 TION OUTLAY AMOUNTS.—Not later than

24 November 1, 1996, the Secretary shall es25 timate (based on the best data available)
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1 and publish in the Federal Register the

2 amount of the pre-fiscal year 1997-obliga3 tion outlays (as defined in clause (iv)) for

4 each State (including the District of Co5 lumbia, Commonwealths, and Territories).

6 The total of such amounts shall equal the

7 dollar amount specified in paragraph

8 (3)(C)(ii).

9 ‘‘(iii) AGREEMENT.—The submission

10 of a State plan by a State under this title

11 is deemed to constitute the State’s accept12 ance of the obligation allotment limitations

13 under this subsection, including the for14 mula for computing the amount of the

15 base obligation allotment and any supple16 mental obligation allotments.

17 ‘‘(iv) PRE-FISCAL YEAR 1997-OBLIGA18 TION OUTLAYS DEFINED.—In this sub19 section, the term ‘pre-fiscal year 1997-obli20 gation outlays’ means, for a State, the out21 lays of the Federal Government that result

22 from obligations that have been incurred

23 under title XIX with respect to the State

24 before October 1, 1996, but for which pay-
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1 ments to States have not been made as of

2 such date.

3 ‘‘(D) ADJUSTMENT TO REFLECT ADOPTION

4 OF ALTERNATIVE GROWTH FORMULA.—Any

5 State that has elected an alternative growth

6 formula under subsection (c)(4) which increases

7 or decreases the dollar amount of an outlay al8 lotment for a fiscal year is deemed to have in9 creased or decreased, respectively, its obligation

10 amount for such fiscal year by the amount of

11 such increase or decrease.

12 ‘‘(E) TRANSITIONAL CORRECTION FOR FIS13 CAL YEAR 1997.—

14 ‘‘(i) IN GENERAL.—The base obliga15 tion amount for fiscal year 1998 for any

16 State described in clause (ii) shall be in17 creased by the amount by which the

18 amount described in clause (ii)(I) exceeds

19 the amount described in clause (ii)(II), di20 vided by the payout adjustment factor

21 specified in paragraph (3)(B) for fiscal

22 year 1997. The increase under this clause

23 shall be paid to a State in the first quarter

24 of fiscal year 1998.
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1 ‘‘(ii) STATES DESCRIBED.—A State

2 described in this clause is a State for

3 which—

4 ‘‘(I) the amount of the pre-fiscal

5 year 1997-obligation outlays (as es6 tablished for such State under sub7 paragraph (C)(ii)), exceeded

8 ‘‘(II) the outlays of the Federal

9 Government during fiscal year 1997

10 that are attributable to obligations

11 that were incurred under title XIX

12 with respect to the State before Octo13 ber 1, 1996, but for which payments

14 to States had not been made as of

15 such date.

16 ‘‘(5) SEQUENCE OF OBLIGATIONS.—For pur17 poses of carrying out this title, payments under sec18 tion 1512 to a State eligible for a supplemental out19 lay allotment that are attributable to—

20 ‘‘(A) expenditures for medical assistance

21 described in the second sentence of subsection

22 (f)(1) or the second sentence of subsection

23 (h)(1) shall first be counted toward the supple24 mental outlay allotment provided under sub25 section (f) or (h), respectively, rather than to-
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1 ward the base outlay allotment otherwise pro2 vided under this section; or

3 ‘‘(B) subsection (g) (relating to the um4 brella fund) shall first be counted toward the

5 allotment provided other than under such sub6 section, and then to such subsection.

7 ‘‘(b) BASE POOL OF AVAILABLE FUNDS.—

8 ‘‘(1) IN GENERAL.—For purposes of this sec9 tion, the ‘base pool amount’ under this subsection

10 for—

11 ‘‘(A) fiscal year 1996 is $96,601,037,894,

12 ‘‘(B) fiscal year 1997 is $103,447,755,053,

13 ‘‘(C) fiscal year 1998 is $108,430,173,129,

14 ‘‘(D) fiscal year 1999 is

15 $113,652,562,483,

16 ‘‘(E) fiscal year 2000 is $119,126,480,999,

17 ‘‘(F) fiscal year 2001 is $124,864,043,230,

18 ‘‘(G) fiscal year 2002 is $130,877,947,213,

19 and

20 ‘‘(H) each subsequent fiscal year is the

21 pool amount under this paragraph for the pre22 vious fiscal year increased by the lesser of 4.82

23 percent or the annual percentage increase in

24 the gross domestic product for the 12-month
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1 period ending in June before the beginning of

2 that subsequent fiscal year.

3 ‘‘(2) NATIONAL GROWTH PERCENTAGE.—For

4 purposes of this section for a fiscal year (beginning

5 with fiscal year 1997), the ‘national growth percent6 age’ is the percentage by which—

7 ‘‘(A) the base pool amount under para8 graph (1) for the fiscal year, exceeds

9 ‘‘(B) such base pool amount for the pre10 vious fiscal year.

11 ‘‘(c) STATE BASE OUTLAY ALLOTMENTS.—

12 ‘‘(1) FISCAL YEAR 1996.—

13 ‘‘(A) IN GENERAL.—For each of the 50

14 States and the District of Columbia, the

15 amount of the State base outlay allotment

16 under this subsection for fiscal year 1996 is,

17 subject to paragraph (4), determined in accord18 ance with the following table:

‘‘State or District: Outlay allotment (in dollars):

Alabama ......................................... 1,517,652,207

Alaska ............................................ 204,933,213

Arizona .......................................... 1,385,781,297

Arkansas ........................................ 1,011,457,933

California ....................................... 8,946,838,461

Colorado ......................................... 757,492,679

Connecticut .................................... 1,463,011,635

Delaware ........................................ 212,327,763

District of Columbia ...................... 501,412,091

Florida ........................................... 3,715,624,180

Georgia .......................................... 2,426,320,602

Hawaii ........................................... 323,124,375

Idaho .............................................. 278,329,686

Illinois ............................................ 3,467,274,342

Indiana .......................................... 1,952,467,267
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‘‘State or District: Outlay allotment (in dollars):

Iowa ............................................... 835,235,895

Kansas ........................................... 713,700,869

Kentucky ....................................... 1,577,828,832

Louisiana ....................................... 2,622,000,000

Maine ............................................. 694,220,790

Maryland ....................................... 1,369,699,847

Massachusetts ................................ 2,870,346,862

Michigan ........................................ 3,465,182,886

Minnesota ...................................... 1,793,776,356

Mississippi ..................................... 1,261,781,330

Missouri ......................................... 1,849,248,945

Montana ......................................... 312,212,472

Nebraska ....................................... 463,900,417

Nevada ........................................... 257,896,453

New Hampshire ............................. 560,000,000

New Jersey .................................... 2,854,621,241

New Mexico ................................... 634,756,945

New York ....................................... 12,901,793,038

North Carolina .............................. 2,587,883,809

North Dakota ................................ 241,168,563

Ohio ............................................... 4,034,049,690

Oklahoma ....................................... 911,198,775

Oregon ........................................... 1,088,670,440

Pennsylvania .................................. 4,454,423,400

Rhode Island ................................. 545,686,262

South Carolina ............................... 1,621,021,815

South Dakota ................................ 262,804,959

Tennessee ...................................... 2,519,934,251

Texas ............................................. 6,351,909,343

Utah ............................................... 484,274,254

Vermont ......................................... 248,158,729

Virginia .......................................... 1,144,962,509

Washington .................................... 1,763,460,996

West Virginia ................................. 1,156,813,157

Wisconsin ....................................... 1,709,500,642

Wyoming ........................................ 132,915,390.

1 ‘‘(2) FOR SUBSEQUENT FISCAL YEARS.—

2 ‘‘(A) IN GENERAL.—Subject to the suc3 ceeding provisions of this subsection, the

4 amount of the State base outlay allotment

5 under this subsection for one of the 50 States

6 and the District of Columbia for a fiscal year

7 (beginning with fiscal year 1997) is equal to the

8 product of—
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1 ‘‘(i) the needs-based amount deter2 mined under subparagraph (B) for such

3 State or District for the fiscal year, and

4 ‘‘(ii) the adjustment factor described

5 in subparagraph (C) for the fiscal year.

6 ‘‘(B) NEEDS-BASED AMOUNT.—The needs7 based amount under this subparagraph for a

8 State or the District of Columbia for a fiscal

9 year is equal to the product of—

10 ‘‘(i) the State’s or District’s aggregate

11 expenditure need for the fiscal year (as de12 termined under subsection (d)), and

13 ‘‘(ii) the State’s or District’s old Fed14 eral medical assistance percentage (as de15 fined in section 1512(d)) for the fiscal year

16 (or, in the case of fiscal year 1997, the

17 Federal medical assistance percentage de18 termined under section 1905(b) for fiscal

19 year 1996).

20 ‘‘(C) ADJUSTMENT FACTOR.—The adjust21 ment factor under this subparagraph for a fis22 cal year is such proportion so that, when it is

23 applied under subparagraph (A)(ii) for the fis24 cal year (taking into account the floors and ceil25 ings under paragraph (3)), the total of the base
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1 outlay allotments under this subsection for all

2 the 50 States and the District of Columbia for

3 the fiscal year (not taking into account any in4 crease in a base outlay allotment for a fiscal

5 year attributable to the election of an alter6 native growth formula under paragraph (4)) is

7 equal to the amount by which (i) the base pool

8 amount for the fiscal year (as determined under

9 subsection (b)), exceeds (ii) the sum of the base

10 outlay allotments provided under paragraph (5)

11 for the Commonwealths and Territories for the

12 fiscal year.

13 ‘‘(3) FLOORS AND CEILINGS.—

14 ‘‘(A) FLOORS.—Subject to the ceiling es15 tablished under subparagraph (B), in no case

16 shall the amount of the State base outlay allot17 ment under paragraph (2) for a fiscal year be

18 less than the greatest of the following:

19 ‘‘(i) IN GENERAL.—Beginning with

20 fiscal year 1998, 0.24 percent of the pool

21 amount for the fiscal year.

22 ‘‘(ii) FLOOR BASED ON PREVIOUS

23 YEAR’S OUTLAY ALLOTMENT.—Subject to

24 clause (iii)—
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1 ‘‘(I) for fiscal year 1997, 103.5

2 percent of the amount of the State

3 base outlay allotment under this sub4 section for fiscal year 1996,

5 ‘‘(II) for fiscal year 1998, 103

6 percent of the amount of the State

7 base outlay allotment under this sub8 section for fiscal year 1997,

9 ‘‘(III) for fiscal year 1999, 102.5

10 percent of the amount of the State

11 base outlay allotment under this sub12 section for fiscal year 1998,

13 ‘‘(IV) for fiscal year 2000,

14 102.25 percent of the amount of the

15 State base outlay allotment under this

16 subsection for fiscal year 1999, and

17 ‘‘(V) for each of fiscal years 2001

18 and 2002, 102 percent of the amount

19 of the State base outlay allotment

20 under this subsection for the previous

21 fiscal year.

22 ‘‘(iii) FLOOR BASED ON OUTLAY AL23 LOTMENT GROWTH RATE IN FIRST

24 YEAR.—Beginning with fiscal year 1998,

25 in the case of a State for which the outlay
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1 allotment under this subsection for fiscal

2 year 1997 exceeded its outlay allotment

3 under this subsection for the previous fis4 cal year by more than 95 percent of the

5 national growth percentage for fiscal year

6 1997, 90 percent of the national growth

7 percentage for the fiscal year involved.

8 ‘‘(B) CEILINGS.—

9 ‘‘(i) IN GENERAL.—Subject to clause

10 (ii), in no case shall the amount of the

11 State base outlay allotment under para12 graph (2) for a fiscal year be greater than

13 the product of—

14 ‘‘(I) the State base outlay allot15 ment under this subsection for the

16 State for the preceding fiscal year,

17 and

18 ‘‘(II) the applicable percent

19 (specified in clause (ii) or (iii)) for the

20 fiscal year involved.

21 ‘‘(ii) GENERAL RULE FOR APPLICA22 BLE PERCENT.—For purposes of clause

23 (i), subject to clause (iii), the ‘applicable

24 percent’ for a fiscal year is 133 percent of
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1 the national growth percentage for the fis2 cal year.

3 ‘‘(iii) SPECIAL RULE.—For a fiscal

4 year after fiscal year 1997, in the case of

5 a State (among the 50 States and the Dis6 trict of Columbia) that is one of the 10

7 States with the lowest Federal spending

8 per resident-in-poverty rates (as deter9 mined under clause (iv)) for the fiscal

10 year, the ‘applicable percent’ is 150 per11 cent of the national growth percentage for

12 the fiscal year.

13 ‘‘(iv) DETERMINATION OF FEDERAL

14 SPENDING PER RESIDENT-IN-POVERTY

15 RATE.—For purposes of clause (iii), the

16 ‘Federal spending per resident-in-poverty

17 rate’ for a State for a fiscal year is equal

18 to—

19 ‘‘(I) the State’s outlay allotment

20 under this subsection for the previous

21 fiscal year (determined without regard

22 to paragraph (4)), divided by

23 ‘‘(II) the average annual number

24 of residents of the State in poverty
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1 (as defined in subsection (d)(2)) with

2 respect to the fiscal year.

3 ‘‘(C) SPECIAL RULE.—

4 ‘‘(i) IN GENERAL.—Notwithstanding

5 the preceding subparagraphs of this para6 graph, the State base outlay allotment

7 for—

8 ‘‘(I) Louisiana, subject to sub9 clause (II), for each of the fiscal years

10 1997 through 2000, is

11 $2,622,000,000,

12 ‘‘(II) Louisiana for fiscal year

13 1997 only, as otherwise determined,

14 shall be increased by $37,048,207,

15 and

16 ‘‘(III) Nevada for each of fiscal

17 years 1997, 1998, and 1999, as other18 wise determined, shall be increased by

19 $90,000,000.

20 ‘‘(ii) EXCEPTION.—A State described

21 in subclause (I) of clause (i) may apply to

22 the Secretary for use of the State base out23 lay allotment otherwise determined under

24 this subsection for any fiscal year, if such

25 State notifies the Secretary not later than
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1 March 1 preceding such fiscal year that

2 such State will be able to expend sufficient

3 State funds in such fiscal year to qualify

4 for such allotment.

5 ‘‘(iii) TREATMENT OF INCREASE AS

6 SUPPLEMENTAL ALLOTMENT.—Any in7 crease in an outlay allotment under clause

8 (i)(II) or (i)(III) shall not be taken into ac9 count for purposes of determining—

10 ‘‘(I) the adjustment factor under

11 paragraph (2) for fiscal year 1997,

12 ‘‘(II) any State base outlay allot13 ment for a fiscal year after fiscal year

14 1997,

15 ‘‘(III) the base pool amount for a

16 fiscal year after fiscal year 1997, or

17 ‘‘(IV) determination of the na18 tional growth percentage for any fiscal

19 year.

20 ‘‘(4) ELECTION OF ALTERNATIVE GROWTH

21 FORMULA.—

22 ‘‘(A) ELECTION.—In order to reduce vari23 ations in increases in outlay allotments over

24 time, any of the 50 States or the District of Co25 lumbia may elect (by notice provided to the Sec-
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1 retary by not later than April 1, 1997) to adopt

2 an alternative growth rate formula under this

3 paragraph for the determination of the State’s

4 base outlay allotment in fiscal year 1997 and

5 for the increase in the amount of such allot6 ment in subsequent fiscal years.

7 ‘‘(B) FORMULA.—The alternative growth

8 formula under this paragraph may be any for9 mula under which a portion of the State base

10 outlay allotment for fiscal year 1997 under

11 paragraph (1) is deferred and applied to in12 crease the amount of its base outlay allotment

13 for one or more subsequent fiscal years, so long

14 as the total amount of such increases for all

15 such subsequent fiscal years does not exceed the

16 amount of the base outlay allotment deferred

17 from fiscal year 1997.

18 ‘‘(5) COMMONWEALTHS AND TERRITORIES.—

19 ‘‘(A) IN GENERAL.—The base outlay allot20 ment for each of the Commonwealths and Ter21 ritories for a fiscal year is the maximum

22 amount that could have been certified under

23 section 1108(c) (as in effect on the day before

24 the date of the enactment of this title) with re25 spect to the Commonwealth or Territory for the
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1 fiscal year with respect to title XIX, if the na2 tional growth percentage (as determined under

3 subsection (b)(2)) for the fiscal year had been

4 substituted (beginning with fiscal year 1997)

5 for the percentage increase referred to in sec6 tion 1108(c)(1)(B) (as so in effect).

7 ‘‘(B) DISREGARD OF ROUNDING REQUIRE8 MENTS.—For purposes of subparagraph (A),

9 the rounding requirements under section

10 1108(c) shall not apply.

11 ‘‘(C) LIMITATION ON TOTAL AMOUNT FOR

12 FISCAL YEAR 1996.—Notwithstanding the provi13 sions of subparagraph (A), the total amount of

14 the base outlay allotments for the Common15 wealths and Territories for fiscal year 1996

16 may not exceed $139,950,000.

17 ‘‘(d) STATE AGGREGATE EXPENDITURE NEED DE18 TERMINED.—

19 ‘‘(1) IN GENERAL.—For purposes of subsection

20 (c), the ‘State aggregate expenditure need’ for a

21 State or the District of Columbia for a fiscal year

22 is equal to the product of the following 4 factors:

23 ‘‘(A) PROGRAM NEED.—The program need

24 for the State for the fiscal year, as determined

25 under paragraph (2).
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1 ‘‘(B) HEALTH CARE COST INDEX.—The

2 health care cost index for the State (as deter3 mined under paragraph (3)) for the most recent

4 fiscal year for which data are available.

5 ‘‘(C) PROJECTED INFLATION.—The CPI

6 increase factor for the fiscal year (as defined in

7 subsection (g)(4)(C)).

8 ‘‘(D) NATIONAL AVERAGE SPENDING PER

9 RESIDENT IN POVERTY.—The national average

10 spending per resident in poverty (as determined

11 under paragraph (4)).

12 ‘‘(2) PROGRAM NEED.—

13 ‘‘(A) IN GENERAL.—In this subsection, the

14 ‘program need’ of a State for a fiscal year is

15 equal to the sum, for each of the population

16 groups described in subparagraph (B), of the

17 product described in subparagraph (C) for that

18 population group.

19 ‘‘(B) POPULATION GROUPS DESCRIBED.—

20 The population groups described in this sub21 paragraph are as follows:

22 ‘‘(i) INDIVIDUALS BETWEEN 60 AND

23 85.—Individuals who are least 60, but less

24 than 85, years of age.
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1 ‘‘(ii) INDIVIDUALS 85 OR OLDER.—In2 dividuals who are 85 years of age or older.

3 ‘‘(iii) DISABLED INDIVIDUALS.—Indi4 viduals who are eligible for medical assist5 ance because such individuals are blind or

6 disabled and are not described in clause (i)

7 or (ii).

8 ‘‘(iv) CHILDREN.—Individuals de9 scribed in subsection (g)(2)(B).

10 ‘‘(v) OTHER INDIVIDUALS.—Individ11 uals not described in a previous clause of

12 this subparagraph.

13 ‘‘(C) PRODUCT DESCRIBED.—The product

14 described in this subparagraph, with respect to

15 a population group for a fiscal year for a State

16 (or District), is the product of the following 2

17 factors for that group, year, and State (or Dis18 trict):

19 ‘‘(i) WEIGHTING FACTOR REFLECTING

20 RELATIVE NEED FOR THE GROUP.—For all

21 States, the national average per recipient

22 expenditures under this title in the 50

23 States and the District of Columbia for in24 dividuals in such group, as determined

25 under subparagraph (D), divided by the
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1 national average of such averages for all

2 such groups (weighted by the number of

3 recipients in each group); except that in no

4 case shall be factor under this clause be

5 less than 0.9 or be greater than 1.15.

6 ‘‘(ii) NUMBER OF NEEDY IN GROUP.—

7 The product of—

8 ‘‘(I) for all groups, the average

9 annual number of residents in poverty

10 in such State or District (based on

11 data made generally available by the

12 Bureau of the Census from the Cur13 rent Population Survey) for the most

14 recent 3-calendar-year period (ending

15 before the fiscal year) for which such

16 data are available; and

17 ‘‘(II) the proportion, of all indi18 viduals who received medical assist19 ance under this title in such State or

20 District, that were individuals in such

21 group.

22 In clause (ii)(II), the term ‘resident in pov23 erty’ means an individual whose family in24 come does not exceed the poverty threshold

25 (as such terms are defined by the Office of
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1 Management and Budget and are generally

2 interpreted and applied by the Bureau of

3 the Census for the year involved).

4 ‘‘(D) DETERMINATION OF NATIONAL

5 AVERAGES AND PROPORTIONS.—The national

6 averages per recipient and the proportions re7 ferred to in subparagraph (C)(ii) and (C)(iii),

8 respectively, shall be determined by the Sec9 retary using the most recent data available.

10 ‘‘(E) EXPENDITURE DEFINED.—For pur11 poses of this paragraph, the term ‘expenditure’

12 means medical vendor payments by basis of eli13 gibility as reported by HCFA Form 2082.

14 ‘‘(3) HEALTH CARE COST INDEX.—

15 ‘‘(A) IN GENERAL.—In this section, the

16 ‘health care cost index’ for a State or the Dis17 trict of Columbia for a fiscal year is the sum

18 of—

19 ‘‘(i) 0.15, and

20 ‘‘(ii) 0.85 multiplied by the ratio of

21 (I) the annual average wages for hospital

22 employees in such State or District for the

23 fiscal year (as determined under subpara24 graph (B)), to (II) the annual average

25 wages for hospital employees in the 50
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1 States and the District of Columbia for

2 such year (as determined under such sub3 paragraph).

4 ‘‘(B) DETERMINATION OF ANNUAL AVER5 AGE WAGES OF HOSPITAL EMPLOYEES.—The

6 Secretary shall provide for the determination of

7 annual average wages for hospital employees in

8 a State or the District of Columbia and, collec9 tively, in the 50 States and the District of Co10 lumbia for a fiscal year based on the area wage

11 data applicable to hospitals under section

12 1886(d)(2)(E) (or, if such data no longer ex13 ists, comparable data of hospital wages) for dis14 charges occurring during the fiscal year in15 volved.

16 ‘‘(4) NATIONAL AVERAGE SPENDING PER RESI17 DENT IN POVERTY.—For purposes of this sub18 section, the ‘national average spending per resident

19 in poverty’—

20 ‘‘(A) for fiscal year 1997 is equal to—

21 ‘‘(i) the sum (for each of the 50

22 States and the District of Columbia) of the

23 total of the Federal and State expenditures

24 under title XIX for calendar quarters in

25 fiscal year 1994, increased by the percent-
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1 age by which (I) the base pool amount for

2 fiscal year 1997, exceeds (II)

3 $83,213,431,458 (which represents Fed4 eral medicaid expenditures for such States

5 and District for fiscal year 1994); divided

6 by

7 ‘‘(ii) the sum of the number of resi8 dents in poverty (as defined in paragraph

9 (2)(A)) for all of the 50 States and the

10 District of Columbia for fiscal year 1994;

11 and

12 ‘‘(B) for a succeeding fiscal year is equal

13 to the national average spending per resident in

14 poverty under this paragraph for the preceding

15 fiscal year increased by the national growth

16 percentage (as defined in subsection (b)(2)) for

17 the fiscal year involved.

18 ‘‘(e) PUBLICATION OF OBLIGATION AND OUTLAY AL19 LOTMENTS.—

20 ‘‘(1) NOTICE OF PRELIMINARY ALLOTMENTS.—

21 Not later than April 1 before the beginning of each

22 fiscal year (beginning with fiscal year 1997), the

23 Secretary shall initially compute, after consultation

24 with the Comptroller General, and publish in the

25 Federal Register notice of the proposed base obliga-
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1 tion allotment, base outlay allotment, and supple2 mental allotments under subsections (f) and (h) for

3 each State under this section (not taking into ac4 count subsection (a)(2)(B)) for the fiscal year. The

5 Secretary shall include in the notice a description of

6 the methodology and data used in deriving such al7 lotments for the year.

8 ‘‘(2) REVIEW BY GAO.—The Comptroller Gen9 eral shall submit to Congress by not later than May

10 15 of each such fiscal year, a report analyzing such

11 allotments and the extent to which they comply with

12 the precise requirements of this section.

13 ‘‘(3) NOTICE OF FINAL ALLOTMENTS.—Not

14 later than July 1 before the beginning of each such

15 fiscal year, the Secretary, taking into consideration

16 the analysis contained in the report of the Comptrol17 ler General under paragraph (2), shall compute and

18 publish in the Federal Register notice of the final al19 lotments under this section (both taking into ac20 count and not taking into account subsection

21 (a)(2)(B)) for the fiscal year. The Secretary shall in22 clude in the notice a description of any changes in

23 such allotments from the initial allotments published

24 under paragraph (1) for the fiscal year and the rea25 sons for such changes. Once published under this
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1 paragraph, the Secretary is not authorized to change

2 such allotments.

3 ‘‘(4) GAO REPORT ON FINAL ALLOTMENTS.—

4 The Comptroller General shall submit to Congress

5 by not later than August 1 of each such fiscal year,

6 a report analyzing the final allotments under para7 graph (3) and the extent to which they comply with

8 the precise requirements of this section.

9 ‘‘(5) TRANSITIONAL RULE FOR FISCAL YEAR

10 1997.—With respect to fiscal year 1997, the dead11 lines under the previous provisions of this subsection

12 shall be extended by a number of days equal to the

13 number of days between March 1, 1996, and the

14 date of the enactment of this title.

15 ‘‘(f) SUPPLEMENTAL ALLOTMENT FOR CERTAIN

16 HEALTH CARE SERVICES TO CERTAIN ALIENS.—

17 ‘‘(1) IN GENERAL.—For purposes of this sec18 tion for each of fiscal years 1997 through 2001 in

19 the case of a subsection (f) supplemental allotment

20 eligible State, the amount of the supplemental allot21 ment under this subsection is the amount provided

22 under paragraph (2) for the State for that year.

23 Such amount may only be used for the purpose of

24 providing medical assistance for care and services

25 for aliens described in paragraph (1) of section
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1 1513(f) and for which the exception described in

2 paragraph (2) of such section applies. Section

3 1512(f)(4) shall apply to such assistance in the same

4 manner as it applies to medical assistance described

5 in such section.

6 ‘‘(2) SUPPLEMENTAL AMOUNT.—

7 ‘‘(A) IN GENERAL.—For purposes of para8 graph (1), the supplemental amount for a sub9 section (f) supplemental allotment eligible State

10 for a fiscal year is equal to the subsection (f)

11 supplemental allotment ratio (as defined in sub12 paragraph (C)) multiplied by the subsection (f)

13 supplemental pool amount (specified in sub14 paragraph (D)) for the fiscal year.

15 ‘‘(B) SUBSECTION (f) SUPPLEMENTAL AL16 LOTMENT ELIGIBLE STATE.—In this subsection,

17 the term ‘subsection (f) supplemental allotment

18 eligible State’ means one of the 15 States with

19 the highest number of undocumented alien resi20 dents of all the States.

21 ‘‘(C) SUBSECTION (f) SUPPLEMENTAL AL22 LOTMENT RATIO.—In this paragraph, the ‘sub23 section (f) supplemental allotment ratio’ for a

24 State is the ratio of—
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1 ‘‘(i) the number of undocumented

2 aliens residing in the State, to

3 ‘‘(ii) the sum of such numbers for all

4 subsection (f) supplemental allotment eligi5 ble States.

6 ‘‘(D) SUBSECTION (f) SUPPLEMENTAL

7 POOL AMOUNT.—In this paragraph, the ‘sub8 section (f) supplemental pool amount’—

9 ‘‘(i) for fiscal year 1997 is

10 $500,000,000,

11 ‘‘(ii) for fiscal year 1998 is

12 $600,000,000,

13 ‘‘(iii) for fiscal year 1999 is

14 $700,000,000,

15 ‘‘(iv) for fiscal year 2000 is

16 $800,000,000, and

17 ‘‘(v) for fiscal year 2001 is

18 $900,000,000.

19 ‘‘(E) DETERMINATION OF NUMBER.—

20 ‘‘(i) IN GENERAL.—The number of

21 undocumented aliens residing in a State

22 under this paragraph—

23 ‘‘(I) for fiscal year 1997 shall be

24 determined based on estimates of the

25 resident illegal alien population resid-
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1 ing in each State prepared by the Sta2 tistics Division of the Immigration

3 and Naturalization Service as of Octo4 ber 1992, and

5 ‘‘(II) for a subsequent fiscal year

6 shall be determined based on the most

7 recent updated estimate made under

8 clause (ii).

9 ‘‘(ii) UPDATING ESTIMATE.—For each

10 fiscal year beginning with fiscal year 1998,

11 the Secretary, in consultation with the

12 Commission of the Immigration and Natu13 ralization Service, States, and outside ex14 perts, shall estimate the number of un15 documented aliens residing in each of the

16 50 States and the District of Columbia.

17 ‘‘(g) SUPPLEMENTAL PER BENEFICIARY UMBRELLA

18 ALLOTMENT FOR STATES WITH EXCESS GROWTH IN CER19 TAIN POPULATION GROUPS.—

20 ‘‘(1) IN GENERAL.—Subject to paragraphs (5)

21 through (7), for purposes of this section the amount

22 of the supplemental allotment under this subsection

23 for a State for a fiscal year (beginning with fiscal

24 year 1997) is the sum, for each supplemental allot-
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1 ment population group described in paragraph (2),

2 of the product of the following:

3 ‘‘(A) EXCESS NUMBER OF INDIVIDUALS.—

4 The excess number of individuals (if any, deter5 mined under paragraph (3)) for State and the

6 fiscal year who are in the population group.

7 ‘‘(B) APPLICABLE PER BENEFICIARY

8 AMOUNT.—The applicable per beneficiary

9 amount (determined under paragraph (4)) for

10 the State and fiscal year for the population

11 group.

12 ‘‘(C) FMAP.—The old Federal medical as13 sistance percentage (as defined in section

14 1512(d)) for the State and fiscal year.

15 ‘‘(2) SUPPLEMENTAL ALLOTMENT POPULATION

16 GROUP.—In this subsection, each of the following

17 shall be considered to be a separate ‘supplemental

18 allotment population group’:

19 ‘‘(A) POOR PREGNANT WOMEN.—Individ20 uals described in section 1501(a)(1)(A).

21 ‘‘(B) POOR CHILDREN.—Individuals (not

22 described in subparagraph (C))—

23 ‘‘(i) described in subparagraph (B) or

24 (C) of section 1501(a)(1),
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1 ‘‘(ii) described in subparagraph (F) or

2 (G) of section 1501(a)(1) who are under

3 21 years of age and who are not pregnant

4 women, or

5 ‘‘(iii) described in section 1502(a)

6 under paragraph (1) of that section.

7 ‘‘(C) POOR DISABLED INDIVIDUALS.—Only

8 in the case of a State that has elected the op9 tion (of guaranteeing coverage of disabled indi10 viduals) described in section 1501(a)(1)(D)(ii)

11 for the fiscal year (and, in the case of a fiscal

12 year after fiscal year 1997, for the previous fis13 cal year), individuals—

14 ‘‘(i) who are described in such section;

15 or

16 ‘‘(ii) who are described in section

17 1502(a) under paragraph (2) of that sec18 tion.

19 ‘‘(D) POOR ELDERLY INDIVIDUALS.—Indi20 viduals who are—

21 ‘‘(i) described in section

22 1501(a)(1)(E); or

23 ‘‘(ii) described in section 1502(a)

24 under paragraph (3) of that section.
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1 ‘‘(E) QUALIFIED MEDICARE BENE2 FICIARIES.—Individuals described in section

3 1501(b)(1)(A) who are not described in sub4 paragraph (D).

5 ‘‘(F) QUALIFIED DISABLED AND WORKING

6 INDIVIDUALS.—Individuals described in section

7 1501(b)(1)(B) who are not described in sub8 paragraph (D).

9 ‘‘(G) CERTAIN OTHER MEDICARE BENE10 FICIARIES.—Individuals described in section

11 1501(b)(1)(C) who are not described in sub12 paragraph (D).

13 ‘‘(H) OTHER POOR ADULTS.—Individuals

14 described in section 1501(a)(1)(G) who are not

15 within a population group described in a pre16 vious subparagraph.

17 ‘‘(3) EXCESS NUMBER OF INDIVIDUALS.—

18 ‘‘(A) IN GENERAL.—In this subsection, the

19 ‘excess number of individuals’, for a State for

20 a fiscal year with respect to a supplemental al21 lotment population group, is equal to the

22 amount (if any) by which—

23 ‘‘(i) the number of full-year equivalent

24 individuals in the population group for the

25 State and fiscal year, exceeds
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1 ‘‘(ii) the anticipated number of such

2 individuals (as determined under subpara3 graph (B)) for the State and fiscal year in

4 such group.

5 ‘‘(B) ANTICIPATED NUMBER.—

6 ‘‘(i) IN GENERAL.—In subparagraph

7 (A)(ii), the ‘anticipated number’ of individ8 uals for a State in a supplemental allot9 ment population group for—

10 ‘‘(I) fiscal year 1997 is equal to

11 the number of full-year equivalent in12 dividuals in such group enrolled in the

13 State medicaid plan under title XIX

14 in fiscal year 1996 increased by the

15 percentage increase factor (described

16 in clause (ii)) for fiscal year 1997; or

17 ‘‘(II) a subsequent fiscal year is

18 equal to the number of full-year equiv19 alent individuals in the population

20 group for the State for the previous

21 fiscal year increased by the percentage

22 increase factor (described in clause

23 (ii)) for that subsequent fiscal year.

24 ‘‘(ii) PERCENTAGE INCREASE FAC25 TOR.—For purposes of this subparagraph,
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1 the ‘percentage increase factor’ for a fiscal

2 year is equal to zero or, if greater, the per3 centage by which (I) the State percentage

4 growth factor (as defined in subparagraph

5 (C)) for the fiscal year, exceeds (II) the

6 percentage increase in the consumer price

7 index for all urban consumers (U.S. city

8 average) during the 12-month period be9 ginning with July before the beginning of

10 the fiscal year.

11 ‘‘(C) STATE PERCENTAGE GROWTH FAC12 TOR.—In this paragraph, the term ‘State per13 centage growth factor’ means, for a State for a

14 fiscal year, the percentage by which (i) the

15 State outlay allotment for the State for the fis16 cal year (determined under this section without

17 regard to this subsection or subsection (f) or

18 (h)), exceeds (ii) such outlay allotment for such

19 State for the preceding fiscal year (as so deter20 mined).

21 ‘‘(D) INDIVIDUALS COUNT ONLY ONCE.—

22 An individual may at any time not be counted

23 in more than one supplemental allotment popu24 lation group.
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1 ‘‘(4) APPLICABLE PER BENEFICIARY

2 AMOUNT.—

3 ‘‘(A) IN GENERAL.—In this subsection,

4 subject to subparagraph (D), the ‘applicable per

5 beneficiary amount’, for a State for a fiscal

6 year for a supplemental allotment population

7 group, is equal to the base per beneficiary

8 amount (determined under subparagraph (B))

9 for the State for the group, increased by the

10 Secretary’s estimate of the increase in the per

11 beneficiary expenditures under this title (and

12 title XIX) for States between fiscal year 1995

13 and fiscal year 1996, and further increased (for

14 each subsequent fiscal year up to the fiscal year

15 involved and in a compounded manner) by the

16 CPI increase factor (as defined in subparagraph

17 (C)) for each such fiscal year.

18 ‘‘(B) BASE PER BENEFICIARY AMOUNT.—

19 ‘‘(i) IN GENERAL.—The Secretary

20 shall determine for each State a base per

21 beneficiary amount for each supplemental

22 allotment population group equal to—

23 ‘‘(I) the sum of the total expendi24 ture amounts described in clauses (ii)

25 and (iii), divided by
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1 ‘‘(II) the full-year equivalent

2 number of such individuals in such

3 group enrolled under the State plan

4 under title XIX for fiscal year 1995.

5 ‘‘(ii) MEDICAL ASSISTANCE EXPENDI6 TURES.—The total expenditure amount de7 scribed in this clause, with respect to a

8 supplemental allotment population group,

9 is the total amount of expenditures for

10 which Federal financial participation was

11 provided to the State under paragraphs (1)

12 and (5) of section 1903(a) for fiscal year

13 1995 with respect to medical assistance

14 furnished with respect to individuals in15 cluded in such group. Such amount shall

16 not include expenditures attributable to

17 payment adjustments under section 1923.

18 ‘‘(iii) ADMINISTRATIVE EXPENDI19 TURES.—The total expenditure amount de20 scribed in this clause, with respect to a

21 supplemental allotment population group,

22 is the product of—

23 ‘‘(I) the total amount of adminis24 trative expenditures for which Federal

25 financial participation was provided to
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1 the State under section 1903(a)

2 (other than paragraphs (1) and (5) of

3 such section) for fiscal year 1995, and

4 ‘‘(II) the ratio described in clause

5 (iv) for the population group.

6 ‘‘(iv) RATIO DESCRIBED.—The ratio de7 scribed in this clause for a group is the ratio

8 of—

9 ‘‘(I) the total amount of expendi10 tures described in clause (ii) for the

11 group, to

12 ‘‘(II) the total amount of expend13 itures described in such clause for all

14 individuals under the State plan

15 under title XIX in the base fiscal

16 year.

17 ‘‘(C) CPI INCREASE FACTOR.—In subpara18 graph (A), the ‘CPI increase factor’ for a fiscal

19 year is the percentage by which—

20 ‘‘(i) the Secretary’s estimate of the

21 average value of the consumer price index

22 for all urban consumers (all items, U.S.

23 city average) for months in the fiscal year,

24 exceeds
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1 ‘‘(ii) the average value of such index

2 for months in the previous fiscal year.

3 ‘‘(D) SPECIAL RULES FOR CERTAIN MEDI4 CARE BENEFICIARIES.—

5 ‘‘(i) QUALIFIED DISABLED AND

6 WORKING INDIVIDUALS.—In the case of

7 the supplemental allotment population

8 group described in paragraph (2)(F), the

9 ‘applicable per beneficiary amount’, for all

10 States for a fiscal year is the sum of the

11 medicare premiums applied under section

12 1818A for months in the fiscal year.

13 ‘‘(ii) OTHER MEDICARE BENE14 FICIARIES.—In the case of the supple15 mental allotment population group de16 scribed in paragraph (2)(G), the ‘applica17 ble per beneficiary amount’, for all States

18 for a fiscal year is the sum of the medicare

19 premiums applied under section 1839 for

20 months in the fiscal year.

21 ‘‘(5) CONDITIONS FOR ACCESS TO UMBRELLA

22 SUPPLEMENTAL ALLOTMENT.—

23 ‘‘(A) IN GENERAL.—A State may receive a

24 supplemental umbrella allotment under this
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1 subsection for a fiscal year only if the following

2 conditions are met:

3 ‘‘(i) The State provides assurances

4 satisfactory to the Secretary that it will ob5 ligate during the fiscal year the full

6 amount of the allotment otherwise provided

7 under this section for the fiscal year.

8 ‘‘(ii) The State provides assurances

9 satisfactory to the Secretary that any

10 amount attributable to a carryover from a

11 previous fiscal year under subsection

12 (a)(2)(B) shall also be obligated under the

13 plan by the end of the fiscal year.

14 ‘‘(iii) The State submits to the Sec15 retary on a periodic basis such reports on

16 numbers of individuals within each supple17 mental allotment population group as the

18 Secretary may determine necessary to as19 sure the accuracy of the supplemental um20 brella allotments under this subsection.

21 The Secretary may not require the submis22 sion of such reports more frequently than

23 quarterly.

24 ‘‘(iv) The State provides assurances

25 satisfactory to the Secretary that it has in
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1 effect such data collection procedures as

2 may be necessary to provide for the reports

3 described in clause (iii).

4 ‘‘(B) ESTIMATE.—The amount of any sup5 plemental allotment under this subsection shall

6 be estimated in advance of the fiscal year in7 volved, based on data required to be reported

8 under subparagraph (A)(iii). The Secretary is

9 authorized to adjust such data on a preliminary

10 basis if the Secretary determines that the esti11 mates do not reasonably reflect the actual ex12 cess number of individuals in the supplemental

13 allotment population groups for the fiscal year

14 involved. Section 1512(b)(6) provides for ad15 justment of payments of the supplemental allot16 ment under this subsection based on a final de17 termination using data on actual numbers of in18 dividual in each supplemental allotment popu19 lation group.

20 ‘‘(6) ADJUSTMENT IN ALLOTMENT FOR SAV21 INGS FROM SLOWER POPULATION GROWTH.—

22 ‘‘(A) IN GENERAL.—The amount of the

23 supplemental umbrella allotment to a State

24 under this subsection for a fiscal year shall be

25 reduced (but not below zero) by the sum, for
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1 each supplemental allotment population group

2 described in paragraph (2), of the product of

3 the following:

4 ‘‘(i) LESS-THAN-ANTICIPATED NUM5 BER OF INDIVIDUALS.—The less-than-an6 ticipated number of individuals (if any, de7 termined under subparagraph (B)) for

8 State and the fiscal year who are in the

9 population group.

10 ‘‘(ii) APPLICABLE PER BENEFICIARY

11 AMOUNT.—The applicable per beneficiary

12 amount (determined under paragraph (4))

13 for the State and fiscal year for the popu14 lation group.

15 ‘‘(iii) FMAP.—The old Federal medi16 cal assistance percentage (as defined in

17 section 1512(d)) for the State and fiscal

18 year.

19 ‘‘(B) LESS-THAN-ANTICIPATED NUMBER

20 OF INDIVIDUALS.—In this paragraph, the ‘less21 than-anticipated number of individuals’, for a

22 State for a fiscal year with respect to a supple23 mental allotment population group, is equal to

24 the amount (if any) by which—
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1 ‘‘(i) the anticipated number of such

2 individuals (as determined under para3 graph (3)(B)) for the State and fiscal year

4 in such group, exceeds

5 ‘‘(ii) the number of full-year equiva6 lent individuals in the population group for

7 the State and fiscal year.

8 ‘‘(7) SPECIAL RULE FOR FISCAL YEAR 1997.—

9 In applying this subsection to fiscal year 1997—

10 ‘‘(A) in determining the excess number of

11 individuals under paragraph (3)—

12 ‘‘(i) the number of full-year equivalent

13 individuals shall only be determined based

14 on the portion of fiscal year 1997 in which

15 the State plan is in effect under this title,

16 and

17 ‘‘(ii) the anticipated number of such

18 individuals (referred to in paragraph

19 (3)(A)(ii)) shall be the anticipated number

20 otherwise determined multiplied by the

21 proportion of fiscal year 1997 in which

22 such State plan will be in effect; and

23 ‘‘(B) if the State plan is effective before

24 April 1, 1997, the amount of the supplemental

25 allotment otherwise determined under this sub-
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1 section shall be multiplied by the ratio of the

2 portion of fiscal year 1997 that occurs on or

3 after April 1, 1997, to the total portion of such

4 fiscal year in which the State plan is in effect.

5 ‘‘(h) ALLOTMENT FOR MEDICAL ASSISTANCE FOR

6 SERVICES PROVIDED IN INDIAN HEALTH SERVICE AND

7 RELATED FACILITIES.—

8 ‘‘(1) IN GENERAL.—For purposes of this sec9 tion for each of fiscal years 1997 through 2002 in

10 the case of a subsection (h) supplemental allotment

11 eligible State, the amount of the supplemental allot12 ment under this subsection is the amount provided

13 under paragraph (2) for the State for that year.

14 Such amount may only be used for the purpose of

15 providing medical assistance described in section

16 1512(f)(3)(A) (relating to services provided by the

17 Indian Health Service and related facilities).

18 ‘‘(2) SUPPLEMENTAL OUTLAY ALLOTMENT.—

19 ‘‘(A) IN GENERAL.—For purposes of para20 graph (1), the amount under this paragraph for

21 a subsection (h) supplemental allotment eligible

22 State for a fiscal year is equal to the subsection

23 (h) supplemental allotment ratio (as defined in

24 subparagraph (C)) multiplied by the subsection
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1 (h) supplemental pool amount (specified in sub2 paragraph (D)) for the fiscal year.

3 ‘‘(B) SUBSECTION (h) SUPPLEMENTAL AL4 LOTMENT ELIGIBLE STATE.—In this subsection,

5 the term ‘subsection (h) supplemental allotment

6 eligible State’ means a State that has one or

7 more facilities described in section

8 1512(f)(3)(A).

9 ‘‘(C) SUBSECTION (h) SUPPLEMENTAL AL10 LOTMENT RATIO.—In this paragraph, the ‘sub11 section (h) supplemental allotment ratio’ for a

12 State is the ratio of—

13 ‘‘(i) the number of Indians residing in

14 the State, to

15 ‘‘(ii) the sum of such numbers for all

16 subsection (h) supplemental allotment eli17 gible States.

18 ‘‘(D) SUBSECTION (h) SUPPLEMENTAL

19 POOL AMOUNT.—In this paragraph, the ‘sub20 section (h) supplemental pool amount’, for—

21 ‘‘(i) fiscal year 1997 is $72,080,969,

22 ‘‘(ii) fiscal year 1998 is $76,246,683,

23 ‘‘(iii) fiscal year 1999 is $80,653,142,

24 ‘‘(iv) fiscal year 2000 is $85,314,260,
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1 ‘‘(v) fiscal year 2001 is $90,244,754,

2 and

3 ‘‘(vi) fiscal year 2002 is $95,460,192.

4 ‘‘(E) DETERMINATION OF NUMBER.—The

5 number of Indians residing in a State under

6 this paragraph for a fiscal year shall be based

7 on the most recent available estimate of the

8 Secretary of the Interior.

9 ‘‘(3) INDIAN DEFINED.—The term ‘Indian’ has

10 the meaning given such term in section 4 of the In11 dian Self-Determination and Education Assistance

12 Act (25 U.S.C. 450b(d)).

13 ‘‘SEC. 1512. PAYMENTS TO STATES.

14 ‘‘(a) AMOUNT OF PAYMENT.—From the allotment of

15 a State under section 1511 for a fiscal year, subject to

16 the succeeding provisions of this title, the Secretary shall

17 pay to each State which has a State plan approved under

18 part C, for each quarter in the fiscal year—

19 ‘‘(1) an amount equal to the applicable Federal

20 medical assistance percentage (as defined in sub21 section (c)) of the total amount expended during

22 such quarter as medical assistance under the plan;

23 plus

24 ‘‘(2) an amount equal to the applicable Federal

25 medical assistance percentage of the total amount
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1 expended during such quarter for medically-related

2 services (as defined in section 1571(g)); plus

3 ‘‘(3) subject to section 1513(c)—

4 ‘‘(A) an amount equal to 90 percent of the

5 amounts expended during such quarter for the

6 design, development, and installation of infor7 mation systems and for providing incentives to

8 promote the enforcement of medical support or9 ders, plus

10 ‘‘(B) an amount equal to 75 percent of the

11 amounts expended during such quarter for

12 medical personnel, administrative support of

13 medical personnel, operation and maintenance

14 of information systems, modification of infor15 mation systems, quality assurance activities,

16 utilization review, medical and peer review,

17 anti-fraud activities, independent evaluations,

18 coordination of benefits, and meeting reporting

19 requirements under this title, plus

20 ‘‘(C) an amount equal to 50 percent of so

21 much of the remainder of the amounts ex22 pended during such quarter as are expended by

23 the State in the administration of the State

24 plan.

25 ‘‘(b) PAYMENT PROCESS.—
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1 ‘‘(1) QUARTERLY ESTIMATES.—Prior to the be2 ginning of each quarter, the Secretary shall estimate

3 the amount to which a State will be entitled under

4 subsection (a) for such quarter, such estimates to be

5 based on (A) a report filed by the State containing

6 its estimate of the total sum to be expended in such

7 quarter in accordance with the provisions of such

8 subsections, and stating the amount appropriated or

9 made available by the State and its political subdivi10 sions for such expenditures in such quarter, and if

11 such amount is less than the State’s proportionate

12 share of the total sum of such estimated expendi13 tures, the source or sources from which the dif14 ference is expected to be derived, and (B) such other

15 investigation as the Secretary may find necessary.

16 ‘‘(2) PAYMENT.—

17 ‘‘(A) IN GENERAL.—The Secretary shall

18 then pay to the State, in such installments as

19 the Secretary may determine and in accordance

20 with section 6503(a) of title 31, United States

21 Code, the amount so estimated, reduced or in22 creased to the extent of any overpayment or

23 underpayment which the Secretary determines

24 was made under this section (or section 1903)

25 to such State for any prior quarter and with
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1 respect to which adjustment has not already

2 been made under this subsection (or under sec3 tion 1903(d)).

4 ‘‘(B) TREATMENT AS OVERPAYMENTS.—

5 Expenditures for which payments were made to

6 the State under subsection (a) shall be treated

7 as an overpayment to the extent that the State

8 or local agency administering such plan has

9 been reimbursed for such expenditures by a

10 third party pursuant to the provisions of its

11 plan in compliance with section 1555.

12 ‘‘(C) RECOVERY OF OVERPAYMENTS.—For

13 purposes of this subsection, when an overpay14 ment is discovered, which was made by a State

15 to a person or other entity, the State shall have

16 a period of 60 days in which to recover or at17 tempt to recover such overpayment before ad18 justment is made in the Federal payment to

19 such State on account of such overpayment.

20 Except as otherwise provided in subparagraph

21 (D), the adjustment in the Federal payment

22 shall be made at the end of the 60 days, wheth23 er or not recovery was made.

24 ‘‘(D) NO ADJUSTMENT FOR

25 UNCOLLECTABLES.—In any case where the
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1 State is unable to recover a debt which rep2 resents an overpayment (or any portion thereof)

3 made to a person or other entity on account of

4 such debt having been discharged in bankruptcy

5 or otherwise being uncollectable, no adjustment

6 shall be made in the Federal payment to such

7 State on account of such overpayment (or por8 tion thereof).

9 ‘‘(3) FEDERAL SHARE OF RECOVERIES.—The

10 pro rata share to which the United States is equi11 tably entitled, as determined by the Secretary, of the

12 net amount recovered during any quarter by the

13 State or any political subdivision thereof with re14 spect to medical assistance furnished under the

15 State plan shall be considered an overpayment to be

16 adjusted under this subsection.

17 ‘‘(4) TIMING OF OBLIGATION OF FUNDS.—

18 Upon the making of any estimate by the Secretary

19 under this subsection, any appropriations available

20 for payments under this section shall be deemed ob21 ligated.

22 ‘‘(5) DISALLOWANCES.—In any case in which

23 the Secretary estimates that there has been an over24 payment under this section to a State on the basis

25 of a claim by such State that has been disallowed by
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1 the Secretary under section 1116(d) or in the case

2 described in paragraph (6)(C), and such State dis3 putes such disallowance or an adjustment under

4 such paragraph, the amount of the Federal payment

5 in controversy shall, at the option of the State, be

6 retained by such State or recovered by the Secretary

7 pending a final determination with respect to such

8 payment amount. If such final determination is to

9 the effect that any amount was properly disallowed,

10 and the State chose to retain payment of the

11 amount in controversy, the Secretary shall offset,

12 from any subsequent payments made to such State

13 under this title, an amount equal to the proper

14 amount of the disallowance plus interest on such

15 amount disallowed for the period beginning on the

16 date such amount was disallowed and ending on the

17 date of such final determination at a rate (deter18 mined by the Secretary) based on the average of the

19 bond equivalent of the weekly 90-day treasury bill

20 auction rates during such period.

21 ‘‘(6) ADJUSTMENTS IN PAYMENTS REFLECTING

22 OVER- AND UNDER-ESTIMATIONS OF SUPPLEMENTAL

23 UMBRELLA ALLOTMENT.—

24 ‘‘(A) IN GENERAL.—Based on data re25 ported under section 1511(g)(5)(A)(iii) and an-
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1 nual audits provided for under section 1551(a)

2 on the actual excess number of individuals in

3 each population group for a fiscal year, the Sec4 retary shall determine the final amount of the

5 supplemental umbrella allotment for each State

6 for the fiscal year and whether, based on such

7 final amount, the amount of payment made for

8 the fiscal year was greater, or less, than the

9 amount that should have been paid if payments

10 had been made based on such final amount.

11 ‘‘(B) PAYMENT IN CASE OF UNDERESTI12 MATION.—If the Secretary determines under

13 subparagraph (A) there was an underpayment

14 to a State, the Secretary shall increase the

15 amount of the next quarterly payment under

16 this section to the State by the amount of such

17 underpayment.

18 ‘‘(C) OFFSETTING OF PAYMENTS IN CASE

19 OF OVERESTIMATION.—If the Secretary deter20 mines under subparagraph (A) there was an

21 overpayment to a State, the Secretary shall,

22 subject to the procedures provided under para23 graph (5), decrease the amount of the payment

24 for the next quarter (or, at the discretion of the

25 Secretary, over a period of not more than 4 cal-
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1 endar quarters) by the amount of such overpay2 ment. In the case in which a State seeks review

3 of such a determination in accordance with the

4 procedures under paragraph (5), the Secretary

5 shall provide for completion of such review

6 process within 1 year after the date the State

7 requests such review.

8 ‘‘(c) APPLICABLE FEDERAL MEDICAL ASSISTANCE

9 PERCENTAGE DEFINED.—In this section, except as pro10 vided in subsection (f), the term ‘applicable Federal medi11 cal assistance percentage’ means, with respect to one of

12 the 50 States or the District of Columbia, at the State’s

13 or District’s option—

14 ‘‘(1) the old Federal medical assistance percent15 age (as determined in subsection (d));

16 ‘‘(2) the lesser of—

17 ‘‘(A) new Federal medical assistance per18 centage (as determined under subsection (e)) or

19 ‘‘(B) the old Federal medical assistance

20 percentage plus 10 percentage points; or

21 ‘‘(3) 60 percent.

22 ‘‘(d) OLD FEDERAL MEDICAL ASSISTANCE PER23 CENTAGE.—

24 ‘‘(1) IN GENERAL.—Except as provided in para25 graph (2) and subsection (f), the term ‘old Federal
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1 medical assistance percentage’ for any State is 100

2 percent less the State percentage; and the State per3 centage is that percentage which bears the same

4 ratio to 45 percent as the square of the per capita

5 income of such State bears to the square of the per

6 capita income of the continental United States (in7 cluding Alaska) and Hawaii.

8 ‘‘(2) LIMITATION ON RANGE.—In no case shall

9 the old Federal medical assistance percentage be less

10 than 50 percent or more than 83 percent.

11 ‘‘(3) PROMULGATION.—The old Federal medical

12 assistance percentage for any State shall be deter13 mined and promulgated in accordance with the pro14 visions of section 1101(a)(8)(B).

15 ‘‘(e) NEW FEDERAL MEDICAL ASSISTANCE PER16 CENTAGE DEFINED.—

17 ‘‘(1) IN GENERAL.—

18 ‘‘(A) TERM DEFINED.—Except as provided

19 in paragraph (3) and subsection (f), the term

20 ‘new Federal medical assistance percentage’

21 means, for each of the 50 States and the Dis22 trict of Columbia, 100 percent reduced by the

23 product 0.39 and the ratio of—
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1 ‘‘(i)(I) for each of the 50 States, the

2 total taxable resources (TTR) ratio of the

3 State specified in subparagraph (B), or

4 ‘‘(II) for the District of Columbia, the

5 per capita income ratio specified in sub6 paragraph (C),

7 to—

8 ‘‘(ii) the aggregate expenditure need

9 ratio of the State or District, as described

10 in subparagraph (D).

11 ‘‘(B) TOTAL TAXABLE RESOURCES (TTR)

12 RATIO.—For purposes of subparagraph

13 (A)(i)(I), the total taxable resources (TTR)

14 ratio for each of the 50 States is—

15 ‘‘(i) an amount equal to the most re16 cent 3-year average of the total taxable re17 sources (TTR) of the State, as determined

18 by the Secretary of the Treasury, divided

19 by

20 ‘‘(ii) an amount equal to the sum of

21 the 3-year averages determined under

22 clause (i) for each of the 50 States.

23 ‘‘(C) PER CAPITA INCOME RATIO.—For

24 purposes of subparagraph (A)(i)(II), the per
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1 capita income ratio of the District of Columbia

2 is—

3 ‘‘(i) an amount equal to the most re4 cent 3-year average of the total personal

5 income of the District of Columbia, as de6 termined in accordance with the provisions

7 of section 1101(a)(8)(B), divided by

8 ‘‘(ii) an amount equal to the total per9 sonal income of the continental United

10 States (including Alaska) and Hawaii, as

11 determined under section 1101(a)(8)(B).

12 ‘‘(D) AGGREGATE EXPENDITURE NEED

13 RATIO.—For purposes of subparagraph (A),

14 with respect to each of the 50 States and the

15 District of Columbia for a fiscal year, the ag16 gregate expenditure need ratio is—

17 ‘‘(i) the State aggregate expenditure

18 need (as defined in section 1511(d)) for

19 the State for the fiscal year, divided by

20 ‘‘(ii) the sum of such State aggregate

21 expenditure needs for the 50 States and

22 the District of Columbia for the fiscal year.

23 ‘‘(2) LIMITATION ON RANGE.—Except as pro24 vided in subsection (f), the new Federal medical as-
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1 sistance percentage shall in no case be less than 40

2 percent or greater than 83 percent.

3 ‘‘(3) PROMULGATION.—The new Federal medi4 cal assistance percentage for any State shall be pro5 mulgated in a timely manner consistent with the

6 promulgation of the old Federal medical assistance

7 percentage under section 1101(a)(8)(B).

8 ‘‘(f) SPECIAL RULES.—For purposes of this title—

9 ‘‘(1) COMMONWEALTHS AND TERRITORIES.—In

10 the case of Puerto Rico, the Virgin Islands, Guam,

11 the Northern Mariana Islands, and American

12 Samoa, the old and new Federal medical assistance

13 percentages are 50 percent.

14 ‘‘(2) ALASKA.—In the case of Alaska, the old

15 Federal medical assistance percentage is that per16 centage which bears the same ratio to 45 percent as

17 the square of the adjusted per capita income of such

18 State bears to the square of the per capita income

19 of the continental United States. For purposes of

20 the preceding sentence, the adjusted per capita in21 come for Alaska shall be determined by dividing the

22 State’s most recent 3-year average per capita by the

23 health care cost index for such State (as determined

24 under section 1511(d)(3)).
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1 ‘‘(3) INDIAN HEALTH SERVICE AND RELATED

2 FACILITIES.—The old and new Federal medical as3 sistance percentages shall be 100 percent with re4 spect to the amounts expended as medical assistance

5 for services provided by—

6 ‘‘(A) an Indian Health Service facility;

7 ‘‘(B) an Indian health program operated

8 by an Indian tribe or tribal organization (as de9 fined in section 4 of the Indian Health Care

10 Improvement Act) pursuant to a contract,

11 grant, cooperative agreement, or compact with

12 the Indian Health Service under the Indian

13 Self-Determination Act; or

14 ‘‘(C) an urban Indian health program op15 erated by an urban Indian organization pursu16 ant to a grant or contract with the Indian

17 Health Service under title V of the Indian

18 Health Care Improvement Act.

19 ‘‘(4) NO STATE MATCHING REQUIRED FOR CER20 TAIN EXPENDITURES.—In applying subsection (a)(1)

21 with respect to medical assistance provided to unlaw22 ful aliens pursuant to the exception specified in sec23 tion 1513(f)(2), pay ment shall be made for the

24 amount of such assistance without regard to any

25 need for a State match.
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1 ‘‘(5) SPECIAL TRANSITIONAL RULE.—

2 ‘‘(A) IN GENERAL.—Notwithstanding sub3 sections (a) and (f), in order to receive the full

4 State outlay allotment described in section

5 1511(c)(3)(C)(i), a State described in subpara6 graph (C) shall expend State funds in a fiscal

7 year (before fiscal year 2000) under a State

8 plan under this title in an amount not less than

9 the adjusted base year State expenditures, plus

10 the applicable percentage of the difference be11 tween such expenditures and the amount nec12 essary to qualify for the full State outlay allot13 ment so described in such fiscal year as deter14 mined under this section without regard to this

15 paragraph.

16 ‘‘(B) REDUCTION IN ALLOTMENT IF EX17 PENDITURE NOT MET.—In the event a State

18 described in subparagraph (C) fails to expend

19 State funds in an amount required by subpara20 graph (A) for a fiscal year, the outlay allotment

21 described in section 1511(c)(3)(C)(i) for such

22 year for such State shall be reduced by an

23 amount which bears the same ratio to such out24 lay allotment as the State funds expended in
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1 such fiscal year bears to the amount required

2 by subparagraph (A).

3 ‘‘(C) ADJUSTED BASE YEAR STATE EX4 PENDITURES.—For purposes of this paragraph,

5 the term ‘adjusted base year State expendi6 tures’ means, for Louisiana, $355,000,000.

7 ‘‘(D) APPLICABLE PERCENTAGE.—For

8 purposes of this paragraph, the applicable per9 centage for a fiscal year is specified in the fol10 lowing table:

Applicable

‘‘Fiscal year: Percentage:

1996 ......................................................................................... 20

1997 ......................................................................................... 40

1998 ......................................................................................... 60

1999 ......................................................................................... 80.

11 ‘‘(6) TREATMENT OF EXPENDITURES ATTRIB12 UTABLE TO UMBRELLA FUND.—The ‘applicable Fed13 eral medical assistance percentage’ with respect to

14 amounts attributable to supplemental amounts de15 scribed in section 1511(g), is the old Federal medi16 cal assistance percentage.

17 ‘‘(g) USE OF LOCAL FUNDS.—

18 ‘‘(1) IN GENERAL.—Subject to paragraph (2), a

19 State may use local funds to meet the non-Federal

20 share of the expenditures under the State plan with

21 respect to which payments may be made under this

22 section.
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1 ‘‘(2) LIMITATION.—For any fiscal year local

2 funds may not exceed 40 percent of the total of the

3 non-Federal share of such expenditures for the fiscal

4 year.

5 ‘‘(h) PERMITTING INTER-GOVERNMENTAL FUNDS

6 TRANSFERS.—

7 ‘‘(1) IN GENERAL.—Public funds, as defined in

8 paragraph (2), may be considered as the State’s

9 share in determining State financial participation

10 under this title.

11 ‘‘(2) PUBLIC FUNDS DEFINED.—For purposes

12 of this subsection, the term ’public funds’ means

13 funds—

14 ‘‘(A) that are—

15 ‘‘(i) appropriated directly to the State

16 or to the local agency administering the

17 State plan under this title, or transferred

18 from other public agencies (including In19 dian tribes) to the State or local agency

20 and under its administrative control, or

21 ‘‘(ii) certified by the contributing pub22 lic agency as representing expenditures eli23 gible for Federal financial participation

24 under this title; and

25 ‘‘(B) that—
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1 ‘‘(i) are not Federal funds, or

2 ‘‘(ii) are Federal funds authorized by

3 Federal law to be used to match other

4 Federal funds.

5 ‘‘SEC. 1513. LIMITATION ON USE OF FUNDS; DISALLOW6 ANCE.

7 ‘‘(a) IN GENERAL.—Funds provided to a State under

8 this title shall only be used to carry out the purposes of

9 this title.

10 ‘‘(b) DISALLOWANCES FOR EXCLUDED PROVID11 ERS.—

12 ‘‘(1) IN GENERAL.—Payment shall not be made

13 to a State under this part for expenditures for items

14 and services furnished—

15 ‘‘(A) by a provider who was excluded from

16 participation under title V, XVIII, or – or

17 under this title pursuant to section 1128,

18 1128A, 1156, or 1842(j)(2), or

19 ‘‘(B) under the medical direction or on the

20 prescription of a physician who was so excluded,

21 if the provider of the services knew or had rea22 son to know of the exclusion.

23 ‘‘(2) EXCEPTION FOR EMERGENCY SERVICES.—

24 Subparagraph (A) shall not apply to emergency
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1 items or services, not including hospital emergency

2 room services.

3 ‘‘(c) LIMITATIONS ON PAYMENTS FOR MEDICALLY4 RELATED SERVICES AND ADMINISTRATIVE EXPENSES.—

5 ‘‘(1) IN GENERAL.—No Federal financial assist6 ance is available for expenditures under the State

7 plan for—

8 ‘‘(A) medically-related services for a quar9 ter to the extent such expenditures exceed 5

10 percent of the total expenditures under the plan

11 for the quarter, or

12 ‘‘(B) total administrative expenses (other

13 than expenses described in paragraph (2) dur14 ing the first 8 quarters in which the plan is in

15 effect under this title) for quarters in a fiscal

16 year to the extent such expenditures exceed the

17 sum of $20,000,000 plus 10 percent of the total

18 expenditures under the plan for the year.

19 ‘‘(2) ADMINISTRATIVE EXPENSES NOT SUBJECT

20 TO LIMITATION.—The administrative expenses re21 ferred to in this paragraph are expenditures under

22 the State plan for the following activities:

23 ‘‘(A) Quality assurance.

24 ‘‘(B) The development and operation of the

25 certification program for nursing facilities and
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1 intermediate care facilities for the mentally re2 tarded under section 1557.

3 ‘‘(C) Utilization review activities, including

4 medical activities and activities of peer review

5 organizations.

6 ‘‘(D) Inspection and oversight of providers

7 and capitated health care organizations.

8 ‘‘(E) Anti-fraud activities.

9 ‘‘(F) Independent evaluations.

10 ‘‘(G) Activities required to meet reporting

11 requirements under this title.

12 ‘‘(d) TREATMENT OF THIRD PARTY LIABILITY.—No

13 payment shall be made to a State under this part for ex14 penditures for medical assistance provided for an individ15 ual under its State plan to the extent that a private in16 surer (as defined by the Secretary by regulation and in17 cluding a group health plan (as defined in section 607(1)

18 of the Employee Retirement Income Security Act of

19 1974), a service benefit plan, and a health maintenance

20 organization) would have been obligated to provide such

21 assistance but for a provision of its insurance contract

22 which has the effect of limiting or excluding such obliga23 tion because the individual is eligible for or is provided

24 medical assistance under the plan.
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1 ‘‘(e) SECONDARY PAYER PROVISIONS.—Except as

2 otherwise provided by law, no payment shall be made to

3 a State under this part for expenditures for medical assist4 ance provided for an individual under its State plan to

5 the extent that payment has been made or can reasonably

6 be expected to be made promptly (as determined in accord7 ance with regulations) under any other federally operated

8 or financed health care insurance program, other than an

9 insurance program operated or financed by the Indian

10 Health Service, as identified by the Secretary. For pur11 poses of this subsection, rules similar to the rules for over12 payments under section 1512(b) shall apply.

13 ‘‘(f) LIMITATION ON PAYMENTS FOR SERVICES TO

14 NONLAWFUL ALIENS.—

15 ‘‘(1) IN GENERAL.—Notwithstanding the pre16 ceding provisions of this section, except as provided

17 in paragraph (2), no payment may be made to a

18 State under this part for medical assistance fur19 nished to an alien who is not lawfully admitted for

20 permanent residence or otherwise permanently resid21 ing in the United States under color of law.

22 ‘‘(2) EXCEPTION.—Payment may be made

23 under this section for care and services that are fur24 nished to an alien described in paragraph (1) only

25 if—
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1 ‘‘(A) such care and services are necessary

2 for the treatment of an emergency medical con3 dition of the alien (or, at the option of the

4 State, for prenatal care),

5 ‘‘(B) such alien otherwise meets the eligi6 bility requirements for medical assistance under

7 the State plan (other than a requirement of the

8 receipt of aid or assistance under title IV, sup9 plemental security income benefits under title

10 XVI, or a State supplementary payment), and

11 ‘‘(C) such care and services are not related

12 to an organ transplant procedure.

13 ‘‘(3) EMERGENCY MEDICAL CONDITION DE14 FINED.—For purposes of this subsection, the term

15 ‘emergency medical condition’ means a medical con16 dition (including emergency labor and delivery)

17 manifesting itself by acute symptoms of sufficient

18 severity (including severe pain) such that the ab19 sence of immediate medical attention could reason20 ably be expected to result in—

21 ‘‘(A) placing the patient’s health in serious

22 jeopardy,

23 ‘‘(B) serious impairment to bodily func24 tions, or
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1 ‘‘(C) serious dysfunction of any bodily

2 organ or part.

3 ‘‘(g) LIMITATION ON PAYMENT FOR CERTAIN OUT4 PATIENT PRESCRIPTION DRUGS.—

5 ‘‘(1) IN GENERAL.—No payment may be made

6 to a State under this part for medical assistance for

7 covered outpatient drugs (as defined in section

8 1575(i)(2)) of a manufacturer provided under the

9 State plan unless the manufacturer (as defined in

10 section 1575(i)(4)) of the drug—

11 ‘‘(A) has entered into a master rebate

12 agreement with the Secretary under section

13 1575,

14 ‘‘(B) is otherwise complying with the provi15 sions of such section,

16 ‘‘(C) is complying with the provisions of

17 section 8126 of title 38, United States Code, in18 cluding the requirement of entering into a mas19 ter agreement with the Secretary of Veterans

20 Affairs under such section, and

21 ‘‘(D) subject to paragraph (4), is comply22 ing with the provisions of section 340B of the

23 Public Health Service Act, including the re24 quirement of entering into an agreement with

25 the Secretary under such section.
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1 ‘‘(2) CONSTRUCTION.—Nothing in this sub2 section shall be construed as requiring a State to

3 participate in the master rebate agreement under

4 section 1575.

5 ‘‘(3) EFFECT OF SUBSEQUENT AMEND6 MENTS.—For purposes of subparagraphs (C) and

7 (D), in determining whether a manufacturer is in

8 compliance with the requirements of section 8126 of

9 title 38, United States Code, or section 340B of the

10 Public Health Service Act—

11 ‘‘(A) the Secretary shall not take into ac12 count any amendments to such sections that

13 are enacted after the enactment of title VI of

14 the Veterans Health Care Act of 1992, and

15 ‘‘(B) a manufacturer is deemed to meet

16 such requirements if the manufacturer estab17 lishes to the satisfaction of the Secretary that

18 the manufacturer would comply (and has of19 fered to comply) with the provisions of such

20 sections (as in effect immediately after the en21 actment of the Veterans Health Care Act of

22 1992) and would have entered into an agree23 ment under such section (as such section was in

24 effect at such time), but for a legislative change
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1 in such section after the date of the enactment

2 of the Veterans Health Care Act of 1992.

3 ‘‘(4) EFFECT OF ESTABLISHMENT OF ALTER4 NATIVE MECHANISM UNDER PUBLIC HEALTH SERV5 ICE ACT.—If the Secretary does not establish a

6 mechanism to ensure against duplicate discounts or

7 rebates under section 340B(a)(5)(A) of the Public

8 Health Service Act within 12 months of the date of

9 the enactment of such section, the following require10 ments shall apply:

11 ‘‘(A) Each covered entity under such sec12 tion shall inform the State when it is seeking

13 reimbursement from the State plan for medical

14 assistance with respect to a unit of any covered

15 outpatient drug which is subject to an agree16 ment under section 340B(a) of such Act.

17 ‘‘(B) Each such State shall provide a

18 means by which such an entity shall indicate on

19 any drug reimbursement claims form (or for20 mat, where electronic claims management is

21 used) that a unit of the drug that is the subject

22 of the form is subject to an agreement under

23 section 340B of such Act, and not submit to

24 any manufacturer a claim for a rebate payment

25 with respect to such a drug.
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1 ‘‘(h) LIMITATION ON PAYMENT FOR ABORTIONS.—

2 ‘‘(1) IN GENERAL.—Payment shall not be made

3 to a State under this part for any amount expended

4 under the State plan to pay for any abortion or to

5 assist in the purchase, in whole or in part, of health

6 benefit coverage that includes coverage of abortion.

7 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

8 apply to an abortion—

9 ‘‘(A) if the pregnancy is the result of an

10 act of rape or incest, or

11 ‘‘(B) in the case where a woman suffers

12 from a physical disorder, illness, or injury that

13 would, as certified by a physician, place the

14 woman in danger of death unless an abortion is

15 performed.

16 ‘‘(i) LIMITATION ON PAYMENT FOR ASSISTING

17 DEATHS.—Payment shall not be made to a State under

18 this part for amounts expended under the State plan to

19 pay for, or to assist in the purchase, in whole or in part,

20 of health benefit coverage that includes payment for any

21 drug, biological product, or service which was furnished

22 for the purpose of causing, or assisting in causing, the

23 death, suicide, euthanasia, or mercy killing of a person.
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1 ‘‘PART C—ESTABLISHMENT AND AMENDMENT OF

2 STATE PLANS

3 ‘‘SEC. 1521. DESCRIPTION OF STRATEGIC OBJECTIVES AND

4 PERFORMANCE GOALS.

5 ‘‘(a) DESCRIPTION.—A State plan shall include a de6 scription of the strategic objectives and performance goals

7 the State has established for providing health care services

8 to low-income populations under this title, including a gen9 eral description of the manner in which the plan is de10 signed to meet these objectives and goals.

11 ‘‘(b) CERTAIN OBJECTIVES AND GOALS RE12 QUIRED.—A State plan shall include strategic objectives

13 and performance goals relating to rates of childhood im14 munizations, reductions in infant mortality and morbidity,

15 and access to services for children with special health care

16 needs (as defined by the State).

17 ‘‘(c) CONSIDERATIONS.—In specifying these objec18 tives and goals the State may consider factors such as the

19 following:

20 ‘‘(1) The State’s priorities with respect to pro21 viding assistance to low-income populations.

22 ‘‘(2) The State’s priorities with respect to the

23 general public health and the health status of indi24 viduals eligible for assistance under the State plan.
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1 ‘‘(3) The State’s financial resources, the par2 ticular economic conditions in the State, and relative

3 adequacy of the health care infrastructure in dif4 ferent regions of the State.

5 ‘‘(d) PERFORMANCE MEASURES.—To the extent

6 practicable—

7 ‘‘(1) one or more performance goals shall be es8 tablished by the State for each strategic objective

9 identified in the State plan; and

10 ‘‘(2) the State plan shall describe, how program

11 performance will be—

12 ‘‘(A) measured through objective, inde13 pendently verifiable means, and

14 ‘‘(B) compared against performance goals,

15 in order to determine the State’s performance

16 under this title.

17 ‘‘(e) PERIOD COVERED.—

18 ‘‘(1) STRATEGIC OBJECTIVES.—The strategic

19 objectives shall cover a period of not less than 5

20 years and shall be updated and revised at least every

21 3 years.

22 ‘‘(2) PERFORMANCE GOALS.—The performance

23 goals shall be established for dates that are not more

24 than 3 years apart.
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1 ‘‘SEC. 1522. ANNUAL REPORTS.

2 ‘‘(a) IN GENERAL.—In the case of a State with a

3 State plan that is in effect for part or all of a fiscal year,

4 no later than March 31 following such fiscal year the State

5 shall prepare and submit to the Secretary and the Con6 gress a report on program activities and performance

7 under this title for such fiscal year.

8 ‘‘(b) CONTENTS.—Each annual report under this sec9 tion for a fiscal year shall include the following:

10 ‘‘(1) EXPENDITURE AND BENEFICIARY SUM11 MARY.—

12 ‘‘(A) INITIAL SUMMARY.—For the report

13 for fiscal year 1997, a summary of all expendi14 tures under the State plan during the fiscal

15 year as follows:

16 ‘‘(i) Aggregate medical assistance ex17 penditures, disaggregated to the extent re18 quired to determine compliance with the

19 set-aside requirement of section 1502(c)

20 and to determine the program need of the

21 State under section 1511(d)(2).

22 ‘‘(ii) For each general category of eli23 gible individuals (specified in subsection

24 (c)(1)), aggregate medical assistance ex25 penditures and the total and average num-
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1 ber of eligible individuals under the State

2 plan.

3 ‘‘(iii) By each general category of eli4 gible individuals, total expenditures for

5 each of the categories of health care items

6 and services (specified in subsection (c)(2))

7 which are covered under the State plan

8 and provided on a fee-for-service basis.

9 ‘‘(iv) By each general category of eli10 gible individuals, total expenditures for

11 payments to capitated health care organi12 zations (as defined in section 1504(c)(1)).

13 ‘‘(v) Total administrative expendi14 tures.

15 ‘‘(B) SUBSEQUENT SUMMARIES.—For re16 ports for each succeeding fiscal year, a sum17 mary of—

18 ‘‘(i) all expenditures under the State

19 plan, and

20 ‘‘(ii) the total and average number of

21 eligible individuals under the State plan for

22 each general category of eligible individ23 uals.

24 ‘‘(2) UTILIZATION SUMMARY.—
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1 ‘‘(A) INITIAL SUMMARY.—For the report

2 for fiscal year 1997, summary statistics on the

3 utilization of health care services under the

4 State plan during the year as follows:

5 ‘‘(i) For each general category of eli6 gible individuals and for each of the cat7 egories of health care items and services

8 which are covered under the State plan

9 and provided on a fee-for-service basis, the

10 number and percentage of persons who re11 ceived such a type of service or item dur12 ing the period covered by the report.

13 ‘‘(ii) Summary of health care utiliza14 tion data reported to the State by

15 capitated health care organizations.

16 ‘‘(B) SUBSEQUENT SUMMARIES.—For re17 ports for each succeeding fiscal year, summary

18 statistics on the utilization of health care serv19 ices under the State plan.

20 ‘‘(3) ACHIEVEMENT OF PERFORMANCE

21 GOALS.—With respect to each performance goal es22 tablished under section 1521 and applicable to the

23 year involved—

24 ‘‘(A) a brief description of the goal;
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1 ‘‘(B) a description of the methods to be

2 used to measure the attainment of such goal;

3 ‘‘(C) data on the actual performance with

4 respect to the goal;

5 ‘‘(D) a review of the extent to which the

6 goal was achieved, based on such data; and

7 ‘‘(E) if a performance goal has not been

8 met—

9 ‘‘(i) why the goal was not met, and

10 ‘‘(ii) actions to be taken in response

11 to such performance, including adjust12 ments in performance goals or program ac13 tivities for subsequent years.

14 ‘‘(4) PROGRAM EVALUATIONS.—A summary of

15 the findings of evaluations under section 1523 com16 pleted during the fiscal year covered by the report.

17 ‘‘(5) FRAUD AND ABUSE AND QUALITY CON18 TROL ACTIVITIES.—A general description of the

19 State’s activities under part D to detect and deter

20 fraud and abuse and to assure quality of services

21 provided under the program.

22 ‘‘(6) PLAN ADMINISTRATION.—

23 ‘‘(A) A description of the administrative

24 roles and responsibilities of entities in the State

25 responsible for administration of this title.
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1 ‘‘(B) Organizational charts for each entity

2 in the State primarily responsible for activities

3 under this title.

4 ‘‘(C) A brief description of each interstate

5 compact (if any) the State has entered into

6 with other States with respect to activities

7 under this title.

8 ‘‘(D) General citations to the State stat9 utes and administrative rules governing the

10 State’s activities under this title.

11 ‘‘(c) DESCRIPTION OF CATEGORIES.—In this section:

12 ‘‘(1) GENERAL CATEGORIES OF ELIGIBLE INDI13 VIDUALS.—Each of the following is a general cat14 egory of eligible individuals:

15 ‘‘(A) Pregnant women.

16 ‘‘(B) Children.

17 ‘‘(C) Blind or disabled adults who are not

18 elderly individuals.

19 ‘‘(D) Elderly individuals.

20 ‘‘(E) Other adults.

21 ‘‘(2) CATEGORIES OF HEALTH CARE ITEMS AND

22 SERVICES.—The health care items and services de23 scribed in each paragraph of section 1571(a) shall

24 be considered a separate category of health care

25 items and services.
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1 ‘‘SEC. 1523. PERIODIC, INDEPENDENT EVALUATIONS.

2 ‘‘(a) IN GENERAL.—During fiscal year 1999 and

3 every third fiscal year thereafter, each State shall provide

4 for an evaluation of the operation of its State plan under

5 this title.

6 ‘‘(b) INDEPENDENT.—Each such evaluation with re7 spect to an activity under the State plan shall be con8 ducted by an entity that is neither responsible under State

9 law for the submission of the State plan (or part thereof)

10 nor responsible for administering (or supervising the ad11 ministration of) the activity. If consistent with the pre12 vious sentence, such an entity may be a college or univer13 sity, a State agency, a legislative branch agency in a State,

14 or an independent contractor.

15 ‘‘(c) RESEARCH DESIGN.—Each such evaluation

16 shall be conducted in accordance with a research design

17 that is based on generally accepted models of survey de18 sign and sampling and statistical analysis.

19 ‘‘SEC. 1524. DESCRIPTION OF PROCESS FOR STATE PLAN

20 DEVELOPMENT.

21 ‘‘Each State plan shall include a description of the

22 process under which the plan shall be developed and imple23 mented in the State (consistent with section 1525).
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1 ‘‘SEC. 1525. CONSULTATION IN STATE PLAN DEVELOPMENT.

2 ‘‘(a) PUBLIC NOTICE PROCESS.—Before submitting

3 a State plan or a plan amendment described in subsection

4 (c) to the Secretary under part C, a State shall provide—

5 ‘‘(1) public notice respecting the submittal of

6 the proposed plan or amendment, including a gen7 eral description of the plan or amendment,

8 ‘‘(2) a means for the public to inspect or obtain

9 a copy (at reasonable charge) of the proposed plan

10 or amendment,

11 ‘‘(3) an opportunity for submittal and consider12 ation of public comments on the proposed plan or

13 amendment, and

14 ‘‘(4) for consultation with one or more advisory

15 committees established and maintained by the State.

16 The previous sentence shall not apply to a revision of a

17 State plan (or revision of an amendment to a plan) made

18 by a State under section 1529(c)(1) or to a plan amend19 ment withdrawal described in section 1529(c)(4).

20 ‘‘(b) CONTENTS OF NOTICE.—A notice under sub21 section (a)(1) for a proposed plan or amendment shall in22 clude a description of—

23 ‘‘(1) the general purpose of the proposed plan

24 or amendment (including applicable effective dates),

25 ‘‘(2) where the public may inspect the proposed

26 plan or amendment,
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1 ‘‘(3) how the public may obtain a copy of the

2 proposed plan or amendment and the applicable

3 charge (if any) for the copy, and

4 ‘‘(4) how the public may submit comments on

5 the proposed plan or amendment, including any

6 deadlines applicable to consideration of such com7 ments.

8 ‘‘(c) AMENDMENTS DESCRIBED.—An amendment to

9 a State plan described in this subsection is an amendment

10 which makes a material and substantial change in eligi11 bility under the State plan or the benefits provided under

12 the plan.

13 ‘‘(d) PUBLICATION.—Notices under this section may

14 be published (as selected by the State) in one or more daily

15 newspapers of general circulation in the State or in any

16 publication used by the State to publish State statutes or

17 rules.

18 ‘‘(e) COMPARABLE PROCESS.—A separate notice, or

19 notices, shall not be required under this section for a State

20 if notice of the State plan or an amendment to the plan

21 will be provided under a process specified in State law that

22 is substantially equivalent to the notice process specified

23 in this section.
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1 ‘‘SEC. 1526. SUBMITTAL AND APPROVAL OF STATE PLANS.

2 ‘‘(a) SUBMITTAL.—As a condition of receiving fund3 ing under part B, each State shall submit to the Secretary

4 a State plan that meets the applicable requirements of this

5 title.

6 ‘‘(b) APPROVAL.—Except as the Secretary may pro7 vide under section 1529 (including subsection (b) relating

8 to noncompliance with required guarantees), a State plan

9 submitted under subsection (a)—

10 ‘‘(1) shall be approved for purposes of this title,

11 and

12 ‘‘(2) shall be effective beginning on a date that

13 is specified in the plan, but in no case earlier than

14 60 days after the date the plan is submitted.

15 ‘‘(c) CONSTRUCTION.—Nothing in this section shall

16 be construed as prohibiting a State from submitting a

17 State plan that includes the coverage and benefits (includ18 ing those provided under a waiver granted under section

19 1115) of its State plan under title XIX (as in effect as

20 of the date of the enactment of the Medicaid Restructur21 ing Act of 1996), so long as such plan complies with the

22 applicable requirements of this title, including the guaran23 tees under section 1501, and remains subject to the fund24 ing provisions of section 1511.
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1 ‘‘SEC. 1527. SUBMITTAL AND APPROVAL OF PLAN AMEND2 MENTS.

3 ‘‘(a) SUBMITTAL OF AMENDMENTS.—A State may

4 amend, in whole or in part, its State plan at any time

5 through transmittal of a plan amendment under this sec6 tion.

7 ‘‘(b) APPROVAL.—Except as the Secretary may pro8 vide under section 1529 (including subsection (b) relating

9 to noncompliance with required guarantees), an amend10 ment to a State plan submitted under subsection (a)—

11 ‘‘(1) shall be approved for purposes of this title,

12 and

13 ‘‘(2) shall be effective as provided in subsection

14 (c).

15 ‘‘(c) EFFECTIVE DATES FOR AMENDMENTS.—

16 ‘‘(1) IN GENERAL.—Subject to the succeeding

17 provisions of this subsection, an amendment to a

18 State plan shall take effect on one or more effective

19 dates specified in the amendment.

20 ‘‘(2) AMENDMENTS RELATING TO ELIGIBILITY

21 OR BENEFITS.—Except as provided in paragraph

22 (4)—

23 ‘‘(A) NOTICE REQUIREMENT.—Any plan

24 amendment that eliminates or restricts eligi25 bility or benefits under the plan may not take

26 effect unless the State certifies that it has pro-
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1 vided prior or contemporaneous public notice of

2 the change, in a form and manner provided

3 under applicable State law.

4 ‘‘(B) TIMELY TRANSMITTAL.—Any plan

5 amendment that eliminates or restricts eligi6 bility or benefits under the plan shall not be ef7 fective for longer than a 60-day period unless

8 the amendment has been transmitted to the

9 Secretary before the end of such period.

10 ‘‘(3) OTHER AMENDMENTS.—Subject to para11 graph (4), any plan amendment that is not described

12 in paragraph (2) becomes effective in a State fiscal

13 year may not remain in effect after the end of such

14 fiscal year (or, if later, the end of the 90-day period

15 on which it becomes effective) unless the amendment

16 has been transmitted to the Secretary.

17 ‘‘(4) EXCEPTION.—The requirements of para18 graphs (2) and (3) shall not apply to a plan amend19 ment that is submitted on a timely basis pursuant

20 to a court order or an order of the Secretary.

21 ‘‘SEC. 1528. PROCESS FOR STATE WITHDRAWAL FROM PRO22 GRAM.

23 ‘‘(a) IN GENERAL.—A State may rescind its State

24 plan and discontinue participation in the program under

25 this title at any time after providing—
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1 ‘‘(1) the public with 90 days prior notice in a

2 publication in one or more daily newspapers of gen3 eral circulation in the State or in any publication

4 used by the State to publish State statutes or rules,

5 and

6 ‘‘(2) the Secretary with 90 days prior written

7 notice.

8 ‘‘(b) EFFECTIVE DATE.—Such discontinuation shall

9 not apply to payments under part B for expenditures

10 made for items and services furnished under the State

11 plan before the effective date of the discontinuation.

12 ‘‘(c) PRORATION OF ALLOTMENTS.—In the case of

13 any withdrawal under this section other than at the end

14 of a Federal fiscal year, notwithstanding any provision of

15 section 1511 to the contrary, the Secretary shall provide

16 for such appropriate proration of the application of allot17 ments under section 1511 as is appropriate.

18 ‘‘SEC. 1529. SANCTIONS FOR NONCOMPLIANCE.

19 ‘‘(a) PROMPT REVIEW OF PLAN SUBMITTALS.—The

20 Secretary shall promptly review State plans and plan

21 amendments submitted under this part to determine if

22 they substantially comply with the requirements of this

23 title.

24 ‘‘(b) DETERMINATIONS OF NONCOMPLIANCE WITH

25 CERTAIN GUARANTEES.—
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1 ‘‘(1) AT TIME OF PLAN OR AMENDMENT SUB2 MITTAL.—If the Secretary determines that a State

3 plan or plan amendment submitted under this part

4 violates the guarantees of coverage and benefits

5 under subsections (a) and (b) of section 1501, the

6 Secretary shall notify the State in writing of such

7 determination and shall issue an order specifying

8 that the plan or amendment, insofar as it is in viola9 tion with such requirement, shall not be effective,

10 except as provided in subsection (d), as of the date

11 specified in the order.

12 ‘‘(2) VIOLATIONS IN ADMINISTRATION OF

13 PLAN.—If the Secretary determines, after reasonable

14 notice and opportunity for a hearing for the State,

15 that in the administration of a State plan there is

16 a violation of guarantee of coverage and benefits

17 under subsection (a) or (b) of section 1501, the Sec18 retary shall provide the State with written notice of

19 the determination and with an order to remedy such

20 violation. Such an order shall become effective pro21 spectively, as specified in the order, after the date of

22 receipt of such written notice. Such an order may

23 include the withholding of funds, consistent with

24 subsection (g), for parts of the State plan affected
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1 by such violation, until the Secretary is satisfied that

2 the violation has been corrected.

3 ‘‘(3) CONSULTATION WITH STATE.—Before

4 making a determination adverse to a State under

5 this section, the Secretary shall—

6 ‘‘(A) reasonably consult with the State in7 volved,

8 ‘‘(B) offer the State a reasonable oppor9 tunity to clarify the submission and submit fur10 ther information to substantiate compliance

11 with the requirements of subsections (a) and

12 (b) of section 1501, and

13 ‘‘(C) reasonably consider any such clari14 fications and information submitted.

15 ‘‘(4) JUSTIFICATION OF ANY INCONSISTENCIES

16 IN DETERMINATIONS.—If the Secretary makes a de17 termination under this section that is, in whole or in

18 part, inconsistent with any previous determination

19 issued by the Secretary under this title, the Sec20 retary shall include in the determination a detailed

21 explanation and justification for any such difference.

22 ‘‘(c) DETERMINATIONS OF OTHER SUBSTANTIAL

23 NONCOMPLIANCE.—

24 ‘‘(1) AT TIME OF PLAN OR AMENDMENT SUB25 MITTAL.—
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1 ‘‘(A) IN GENERAL.—If the Secretary, dur2 ing the 30-day period beginning on the date of

3 submittal of a State plan or plan amendment—

4 ‘‘(i) determines that the plan or

5 amendment substantially violates (within

6 the meaning of paragraph (5)) a require7 ment of this title, and

8 ‘‘(ii) provides written notice of such

9 determination to the State,

10 the Secretary shall issue an order specifying

11 that the plan or amendment, insofar as it is in

12 substantial violation of such a requirement,

13 shall not be effective, except as provided in sub14 section (d), beginning at the end of a period of

15 not less than 30 days (or 120 days in the case

16 of the initial submission of the State plan) spec17 ified in the order beginning on the date of the

18 notice of the determination.

19 ‘‘(B) EXTENSION OF TIME PERIODS.—The

20 time periods specified in subparagraph (A) may

21 be extended by written agreement of the Sec22 retary and the State involved.

23 ‘‘(2) VIOLATIONS IN ADMINISTRATION OF

24 PLAN.—
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1 ‘‘(A) IN GENERAL.—If the Secretary deter2 mines, after reasonable notice and opportunity

3 for a hearing for the State, that in the adminis4 tration of a State plan there is a substantial

5 violation of a requirement of this title, the Sec6 retary shall provide the State with written no7 tice of the determination and with an order to

8 remedy such violation. Such an order shall be9 come effective prospectively, as specified in the

10 order, after the date of receipt of such written

11 notice. Such an order may include the withhold12 ing of funds, consistent with subsection (g), for

13 parts of the State plan affected by such viola14 tion, until the Secretary is satisfied that the

15 violation has been corrected.

16 ‘‘(B) EFFECTIVENESS.—If the Secretary

17 issues an order under paragraph (1), the order

18 shall become effective, except as provided in

19 subsection (d), beginning at the end of a period

20 (of not less than 30 days) specified in the order

21 beginning on the date of the notice of the deter22 mination to the State.

23 ‘‘(C) TIMELINESS OF DETERMINATIONS

24 RELATING TO REPORT-BASED COMPLIANCE.—

25 The Secretary shall make determinations under
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1 this paragraph respecting violations relating to

2 information contained in an annual report

3 under section 1522, an independent evaluation

4 under section 1523, or an audit report under

5 section 1551 not later than 30 days after the

6 date of transmittal of the report or evaluation

7 to the Secretary.

8 ‘‘(3) CONSULTATION WITH STATE.—Before

9 making a determination adverse to a State under

10 this section, the Secretary shall (within any time pe11 riods provided under this section)—

12 ‘‘(A) reasonably consult with the State in13 volved,

14 ‘‘(B) offer the State a reasonable oppor15 tunity to clarify the submission and submit fur16 ther information to substantiate compliance

17 with the requirements of this title, and

18 ‘‘(C) reasonably consider any such clari19 fications and information submitted.

20 ‘‘(4) JUSTIFICATION OF ANY INCONSISTENCIES

21 IN DETERMINATIONS.—If the Secretary makes a de22 termination under this section that is, in whole or in

23 part, inconsistent with any previous determination

24 issued by the Secretary under this title, the Sec-
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1 retary shall include in the determination a detailed

2 explanation and justification for any such difference.

3 ‘‘(5) SUBSTANTIAL VIOLATION DEFINED.—For

4 purposes of this title, a State plan (or amendment

5 to such a plan) or the administration of the State

6 plan is considered to ‘substantially violate’ a require7 ment of this title if a provision of the plan or

8 amendment (or an omission from the plan or amend9 ment) or the administration of the plan—

10 ‘‘(A) is material and substantial in nature

11 and effect, and

12 ‘‘(B) is inconsistent with an express re13 quirement of this title.

14 A failure to meet a strategic objective or perform15 ance goal (as described in section 1521) shall not be

16 considered to substantially violate a requirement of

17 this title.

18 ‘‘(6) RELATION TO OTHER PROVISION.—This

19 subsection shall not apply to violation of a require20 ment of subsection (a) or (b) of section 1501.

21 ‘‘(d) STATE RESPONSE TO ORDERS.—

22 ‘‘(1) STATE RESPONSE BY REVISING PLAN.—

23 ‘‘(A) IN GENERAL.—Insofar as an order

24 under subsection (b)(1) or (c)(1) relates to a

25 violation by a State plan or plan amendment, a
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1 State may respond (before the date the order

2 becomes effective) to such an order by submit3 ting a written revision of the State plan or plan

4 amendment to comply with the requirements of

5 this title.

6 ‘‘(B) REVIEW OF REVISION.—In the case

7 of submission of such a revision, the Secretary

8 shall promptly review the submission and shall,

9 in the case of an order under subsection (c)(1),

10 withhold any action on the order during the pe11 riod of such review.

12 ‘‘(C) SECRETARIAL RESPONSE.—

13 ‘‘(i) ORDERS RELATING TO GUARAN14 TEES.—In the case of a revision submitted

15 in response to an order under subsection

16 (b)(1), the revision shall not be considered

17 to have corrected the deficiency unless the

18 Secretary determines and notifies the State

19 that the State plan or amendment, as pro20 posed to be revised complies with the re21 quirements of subsections (a) and (b) of

22 section 1501. If the Secretary determines

23 that the revision does not correct the defi24 ciency, the Secretary shall notify the State

25 in writing of such determination and the
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1 State may respond by seeking reconsider2 ation or a hearing under paragraph (2).

3 ‘‘(ii) OTHER ORDERS.—In the case of

4 a revision submitted in response to an

5 order under subsection (c)(1), the revision

6 shall be considered to have corrected the

7 deficiency (and the order rescinded insofar

8 as it relates to such deficiency) unless the

9 Secretary determines and notifies the State

10 in writing, within 15 days after the date

11 the Secretary receives the revision, that the

12 State plan or amendment, as proposed to

13 be revised, still substantially violates a re14 quirement of this title. In such case the

15 State may respond by seeking reconsider16 ation or a hearing under paragraph (2).

17 ‘‘(D) REVISION RETROACTIVE.—If the re18 vision provides for compliance (in the case of an

19 order under subsection (b)(1)) or substantial

20 compliance (in the case of an order under sub21 section (c)(1)), the revision may be treated, at

22 the option of the State, as being effective either

23 as of the effective date of the provision to which

24 it relates or such later date as the State and

25 Secretary may agree.
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1 ‘‘(2) STATE RESPONSE BY SEEKING RECONSID2 ERATION OR AN ADMINISTRATIVE HEARING.—A

3 State may respond to an order under subsection (b)

4 or (c) by filing a request with the Secretary for—

5 ‘‘(A) a reconsideration of the determina6 tion, pursuant to subsection (e)(1), or

7 ‘‘(B) a review of the determination through

8 an administrative hearing, pursuant to sub9 section (e)(2).

10 In such case for an order under subsection (c), the

11 order shall not take effect before the completion of

12 the reconsideration or hearing.

13 ‘‘(3) STATE RESPONSE BY CORRECTIVE ACTION

14 PLAN.—

15 ‘‘(A) IN GENERAL.—In the case of an

16 order described in subsection (b)(2) or (c)(2)

17 that relates to a violation in the administration

18 of the State plan, a State may respond to such

19 an order by submitting a corrective action plan

20 with the Secretary to correct deficiencies in the

21 administration of the plan which are the subject

22 of the order.

23 ‘‘(B) REVIEW OF CORRECTIVE ACTION

24 PLAN.—In the case of a corrective action plan

25 submitted in response to an order under sub-
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1 section (c)(2), the Secretary shall withhold any

2 action on the order for a period (not to exceed

3 30 days) during which the Secretary reviews

4 the corrective action plan.

5 ‘‘(C) SECRETARIAL RESPONSE.—

6 ‘‘(i) ORDERS RELATING TO GUARAN7 TEES.—In the case of a corrective action

8 plan submitted in response to an order

9 under subsection (b)(2), the plan shall not

10 be considered to have corrected the defi11 ciency unless the Secretary determines and

12 notifies the State that the State’s adminis13 tration of the State plan, as proposed to be

14 corrected in the plan, will not violate a re15 quirement of subsection (a) or (b) of sec16 tion 1501. If the Secretary determines that

17 the plan does not correct the deficiency,

18 the Secretary shall notify the State in writ19 ing of such determination and the State

20 may respond by seeking reconsideration or

21 a hearing under paragraph (2).

22 ‘‘(ii) OTHER ORDERS.—In the case of

23 a corrective action plan submitted in re24 sponse to an order under subsection (c)(2),

25 the corrective action plan shall be consid-
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1 ered to have corrected the deficiency (and

2 the order rescinded insofar as it relates to

3 such deficiency) unless the Secretary deter4 mines and notifies the State in writing,

5 within 15 days after the date the Secretary

6 receives the corrective action plan, that the

7 State’s administration of the State plan, as

8 proposed to be corrected in the plan, will

9 still substantially violate a requirement of

10 this title. In such case the State may re11 spond by seeking reconsideration or a

12 hearing under paragraph (2).

13 ‘‘(4) STATE RESPONSE BY WITHDRAWAL OF

14 PLAN AMENDMENT; FAILURE TO RESPOND.—Insofar

15 as an order relates to a violation in a plan amend16 ment submitted, a State may respond to such an

17 order by withdrawing the plan amendment and the

18 State plan shall be treated as though the amend19 ment had not been made.

20 ‘‘(e) ADMINISTRATIVE REVIEW AND HEARING.—

21 ‘‘(1) RECONSIDERATION.—Within 30 days after

22 the date of receipt of a request under subsection

23 (d)(2)(A), the Secretary shall notify the State of the

24 time and place at which a hearing will be held for

25 the purpose of reconsidering the Secretary’s deter-
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1 mination. The hearing shall be held not less than

2 20 days nor more than 60 days after the date notice

3 of the hearing is furnished to the State, unless the

4 Secretary and the State agree in writing to holding

5 the hearing at another time. The Secretary shall af6 firm, modify, or reverse the original determination

7 within 60 days of the conclusion of the hearing.

8 ‘‘(2) ADMINISTRATIVE HEARING.—Within 30

9 days after the date of receipt of a request under

10 subsection (d)(2)(B), an administrative law judge

11 shall schedule a hearing for the purpose of reviewing

12 the Secretary’s determination. The hearing shall be

13 held not less than 20 days nor more than 60 days

14 after the date notice of the hearing is furnished to

15 the State, unless the Secretary and the State agree

16 in writing to holding the hearing at another time.

17 The administrative law judge shall affirm, modify, or

18 reverse the determination within 60 days of the con19 clusion of the hearing.

20 ‘‘(f) JUDICIAL REVIEW.—

21 ‘‘(1) IN GENERAL.—A State which is dissatis22 fied with a final determination made by the Sec23 retary under subsection (e)(1) or a final determina24 tion of an administrative law judge under subsection

25 (e)(2) may, within 60 days after it has been notified
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1 of such determination, file with the United States

2 court of appeals for the circuit in which the State

3 is located a petition for review of such determina4 tion. A copy of the petition shall be forthwith trans5 mitted by the clerk of the court to the Secretary

6 and, in the case of a determination under subsection

7 (e)(2), to the administrative law judge involved. The

8 Secretary (or judge involved) thereupon shall file in

9 the court the record of the proceedings on which the

10 final determination was based, as provided in section

11 1502 of title 28, United States Code. Except as pro12 vided in section 1507, only the Secretary, in accord13 ance with this title, may compel a State under Fed14 eral law to comply with the provisions of this title

15 or a State plan, or otherwise enforce a provision of

16 this title against a State, and no action may be filed

17 under Federal law against a State in relation to the

18 State’s compliance, or failure to comply, with the

19 provisions of this title or of a State plan except

20 under section 1507 or by the Secretary as provided

21 under this subsection.

22 ‘‘(2) STANDARD FOR REVIEW.—The findings of

23 fact by the Secretary or administrative law judge, if

24 supported by substantial evidence, shall be conclu25 sive, but the court, for good cause shown, may re-
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1 mand the case to the Secretary or judge to take fur2 ther evidence, and the Secretary or judge may there3 upon make new or modified findings of fact and may

4 modify a previous determination, and shall certify to

5 the court the transcript and record of the further

6 proceedings. Such new or modified findings of fact

7 shall likewise be conclusive if supported by substan8 tial evidence.

9 ‘‘(3) JURISDICTION OF APPELLATE COURT.—

10 The court shall have jurisdiction to affirm the action

11 of the Secretary or judge or to set it aside, in whole

12 or in part. The judgment of the court shall be sub13 ject to review by the Supreme Court of the United

14 States upon certiorari or certification as provided in

15 section 1254 of title 28, United States Code.

16 ‘‘(g) WITHHOLDING OF FUNDS.—

17 ‘‘(1) IN GENERAL.—Any order under this sec18 tion relating to the withholding of funds shall be ef19 fective not earlier than the effective date of the

20 order and shall only relate to the portions of a State

21 plan or administration thereof which violate a re22 quirement of subsection (a) or (b) of section 1501

23 or substantially violate another requirement of this

24 title. In the case of a failure to meet a set-aside re-
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1 quirement under section 1502(c), any withholding

2 shall only apply to the extent of such failure.

3 ‘‘(2) SUSPENSION OF WITHHOLDING.—The Sec4 retary may suspend withholding of funds under

5 paragraph (1) during the period reconsideration or

6 administrative and judicial review is pending under

7 subsection (e) or (f).

8 ‘‘(3) RESTORATION OF FUNDS.—Any funds

9 withheld under this subsection under an order shall

10 be immediately restored to a State—

11 ‘‘(A) to the extent and at the time the

12 order is—

13 ‘‘(i) modified or withdrawn by the

14 Secretary upon reconsideration,

15 ‘‘(ii) modified or reversed by an ad16 ministrative law judge, or

17 ‘‘(iii) set aside (in whole or in part) by

18 an appellate court; or

19 ‘‘(B) when the Secretary determines that

20 the deficiency which was the basis for the order

21 is corrected;

22 ‘‘(C) when the Secretary determines that

23 violation which was the basis for the order is

24 resolved or the amendment which was the basis

25 for the order is withdrawn; or
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1 ‘‘(D) at any time upon the initiative of the

2 Secretary.

3 ‘‘(h) INDIVIDUAL COMPLAINT PROCESS.—The Sec4 retary shall provide for a process under which an individ5 ual may notify the Secretary concerning a State’s failure

6 to provide medical assistance as required under the State

7 plan or otherwise comply with the requirements of this

8 title or such plan, including any failure to comply with

9 a requirement of subsection (a) or (b) of section 1501.

10 If the Secretary finds that there is a pattern of complaints

11 with respect to a State or that a particular failure or find12 ing of noncompliance is egregious, the Secretary shall no13 tify the chief executive officer of the State of such finding

14 and shall notify the Congress if the State fails to respond

15 to such notification within a reasonable period of time.

16 ‘‘SEC. 1530. SECRETARIAL AUTHORITY.

17 ‘‘(a) NEGOTIATED AGREEMENT AND DISPUTE RESO18 LUTION.—

19 ‘‘(1) NEGOTIATIONS.—Nothing in this part

20 shall be construed as preventing the Secretary and

21 a State from at any time negotiating a satisfactory

22 resolution to any dispute concerning the approval of

23 a State plan (or amendments to a State plan) or the

24 compliance of a State plan (including its administra25 tion) with requirements of this title.
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1 ‘‘(2) COOPERATION.—The Secretary shall act in

2 a cooperative manner with the States in carrying out

3 this title. In the event of a dispute between a State

4 and the Secretary, the Secretary shall, whenever

5 practicable, engage in informal dispute resolution ac6 tivities in lieu of formal enforcement or sanctions

7 under section 1529.

8 ‘‘(b) LIMITATIONS ON DELEGATION OF DECISION9 MAKING AUTHORITY.—The Secretary may not delegate

10 (other than to the Administrator of the Health Care Fi11 nancing Administration) the authority to make determina12 tions or reconsiderations respecting the approval of State

13 plans (or amendments to such plans) or the compliance

14 of a State plan (including its administration) with require15 ments of this title. Such Administrator may not further

16 delegate such authority to any individual, including any

17 regional official of such Administration.

18 ‘‘(c) REQUIRING FORMAL RULEMAKING FOR

19 CHANGES IN SECRETARIAL ADMINISTRATION.—The Sec20 retary shall carry out the administration of the program

21 under this title only through a prospective formal rule22 making process, including issuing notices of proposed rule23 making, publishing proposed rules or modifications to

24 rules in the Federal Register, and soliciting public com25 ment.
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1 ‘‘PART D—PROGRAM INTEGRITY AND QUALITY

2 ‘‘SEC. 1551. USE OF AUDITS TO ACHIEVE FISCAL INTEGRITY.

3 ‘‘(a) FINANCIAL AUDITS OF PROGRAM.—

4 ‘‘(1) IN GENERAL.—Each State plan shall pro5 vide for an annual audit of the State’s expenditures

6 from amounts received under this title, in compli7 ance with chapter 75 of title 31, United States

8 Code.

9 ‘‘(2) VERIFICATION AUDITS.—If, after consulta10 tion with the State and the Comptroller General and

11 after a fair hearing, the Secretary determines that

12 a State’s audit under paragraph (1) was performed

13 in substantial violation of chapter 75 of title 31,

14 United States Code, the Secretary may—

15 ‘‘(A) require that the State provide for a

16 verification audit in compliance with such chap17 ter, or

18 ‘‘(B) conduct such a verification audit.

19 ‘‘(3) AVAILABILITY OF AUDIT REPORTS.—With20 in 30 days after completion of each audit or verifica21 tion audit under this subsection, the State shall—

22 ‘‘(A) provide the Secretary with a copy of

23 the audit report, including the State’s response

24 to any recommendations of the auditor, and
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1 ‘‘(B) make the audit report available for

2 public inspection in the same manner as pro3 posed State plan amendments are made avail4 able under section 1525.

5 ‘‘(b) FISCAL CONTROLS.—

6 ‘‘(1) IN GENERAL.—With respect to the ac7 counting and expenditure of funds under this title,

8 each State shall adopt and maintain such fiscal con9 trols, accounting procedures, and data processing

10 safeguards as the State deems reasonably necessary

11 to assure the fiscal integrity of the State’s activities

12 under this title.

13 ‘‘(2) CONSISTENCY WITH GENERALLY ACCEPT14 ED ACCOUNTING PRINCIPLES.—Such controls and

15 procedures shall be generally consistent with gen16 erally accepted accounting principles as recognized

17 by the Governmental Accounting Standards Board

18 or the Comptroller General.

19 ‘‘(c) AUDITS OF PROVIDERS.—Each State plan shall

20 provide that the records of any entity providing items or

21 services for which payment may be made under the plan

22 may be audited as necessary to ensure that proper pay23 ments are made under the plan.
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1 ‘‘SEC. 1552. FRAUD PREVENTION PROGRAM.

2 ‘‘(a) ESTABLISHMENT.—Each State plan shall pro3 vide for the establishment and maintenance of an effective

4 program for the detection and prevention of fraud and

5 abuse by beneficiaries, providers, and others in connection

6 with the operation of the program.

7 ‘‘(b) PROGRAM REQUIREMENTS.—The program es8 tablished pursuant to subsection (a) shall include at least

9 the following requirements:

10 ‘‘(1) DISCLOSURE OF INFORMATION.—Any dis11 closing entity (as defined in section 1124(a)) receiv12 ing payments under the State plan shall comply with

13 the requirements of section 1124.

14 ‘‘(2) SUPPLY OF INFORMATION.—An entity

15 (other than an individual practitioner or a group of

16 practitioners) that furnishes, or arranges for the fur17 nishing of, an item or service under the State plan

18 shall supply upon request specifically addressed to

19 the entity by the Secretary or the State agency the

20 information described in section 1128(b)(9).

21 ‘‘(3) EXCLUSION.—

22 ‘‘(A) IN GENERAL.—The State plan shall

23 exclude any specified individual or entity from

24 participation in the plan for the period specified

25 by the Secretary when required by the Sec26 retary to do so pursuant to section 1128 or sec-
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1 tion 1128A, and provide that no payment may

2 be made under the plan with respect to any

3 item or service furnished by such individual or

4 entity during such period.

5 ‘‘(B) AUTHORITY.—In addition to any

6 other authority, a State may exclude any indi7 vidual or entity for purposes of participating

8 under the State plan for any reason for which

9 the Secretary could exclude the individual or

10 entity from participation in a program under

11 title XVIII or under section 1128, 1128A, or

12 1866(b)(2).

13 ‘‘(4) NOTICE.—The State plan shall provide

14 that whenever a provider of services or any other

15 person is terminated, suspended, or otherwise sanc16 tioned or prohibited from participating under the

17 plan, the State agency responsible for administering

18 the plan shall promptly notify the Secretary and, in

19 the case of a physician, the State medical licensing

20 board of such action.

21 ‘‘(5) ACCESS TO INFORMATION.—The State

22 plan shall provide that the State will provide infor23 mation and access to certain information respecting

24 sanctions taken against health care practitioners and
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1 providers by State licensing authorities in accord2 ance with section 1553.

3 ‘‘SEC. 1553. INFORMATION CONCERNING SANCTIONS TAKEN

4 BY STATE LICENSING AUTHORITIES AGAINST

5 HEALTH CARE PRACTITIONERS AND PROVID6 ERS.

7 ‘‘(a) INFORMATION REPORTING REQUIREMENT.—

8 The requirement referred to in section 1552(b)(5) is that

9 the State must provide for the following:

10 ‘‘(1) INFORMATION REPORTING SYSTEM.—The

11 State must have in effect a system of reporting the

12 following information with respect to formal proceed13 ings (as defined by the Secretary in regulations)

14 concluded against a health care practitioner or entity

15 by any authority of the State (or of a political sub16 division thereof) responsible for the licensing of

17 health care practitioners (or any peer review organi18 zation or private accreditation entity reviewing the

19 services provided by health care practitioners) or en20 tities:

21 ‘‘(A) Any adverse action taken by such li22 censing authority as a result of the proceeding,

23 including any revocation or suspension of a li24 cense (and the length of any such suspension),

25 reprimand, censure, or probation.
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1 ‘‘(B) Any dismissal or closure of the pro2 ceedings by reason of the practitioner or entity

3 surrendering the license or leaving the State or

4 jurisdiction.

5 ‘‘(C) Any other loss of the license of the

6 practitioner or entity, whether by operation of

7 law, voluntary surrender, or otherwise.

8 ‘‘(D) Any negative action or finding by

9 such authority, organization, or entity regard10 ing the practitioner or entity.

11 ‘‘(2) ACCESS TO DOCUMENTS.—The State must

12 provide the Secretary (or an entity designated by the

13 Secretary) with access to such documents of the au14 thority described in paragraph (1) as may be nec15 essary for the Secretary to determine the facts and

16 circumstances concerning the actions and determina17 tions described in such paragraph for the purpose of

18 carrying out this Act.

19 ‘‘(b) FORM OF INFORMATION.—The information de20 scribed in subsection (a)(1) shall be provided to the Sec21 retary (or to an appropriate private or public agency,

22 under suitable arrangements made by the Secretary with

23 respect to receipt, storage, protection of confidentiality,

24 and dissemination of information) in such a form and

25 manner as the Secretary determines to be appropriate in
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1 order to provide for activities of the Secretary under this

2 Act and in order to provide, directly or through suitable

3 arrangements made by the Secretary, information—

4 ‘‘(1) to agencies administering Federal health

5 care programs, including private entities administer6 ing such programs under contract,

7 ‘‘(2) to licensing authorities described in sub8 section (a)(1),

9 ‘‘(3) to State agencies administering or super10 vising the administration of State health care pro11 grams (as defined in section 1128(h)),

12 ‘‘(4) to utilization and quality control peer re13 view organizations described in part B of title XI

14 and to appropriate entities with contracts under sec15 tion 1154(a)(4)(C) with respect to eligible organiza16 tions reviewed under the contracts,

17 ‘‘(5) to State fraud control units (as defined in

18 section 1534),

19 ‘‘(6) to hospitals and other health care entities

20 (as defined in section 431 of the Health Care Qual21 ity Improvement Act of 1986), with respect to physi22 cians or other licensed health care practitioners that

23 have entered (or may be entering) into an employ24 ment or affiliation relationship with, or have applied

25 for clinical privileges or appointments to the medical
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1 staff of, such hospitals or other health care entities

2 (and such information shall be deemed to be dis3 closed pursuant to section 427 of, and be subject

4 to the provisions of, that Act),

5 ‘‘(7) to the Attorney General and such other

6 law enforcement officials as the Secretary deems ap7 propriate, and

8 ‘‘(8) upon request, to the Comptroller General,

9 in order for such authorities to determine the fitness

10 of individuals to provide health care services, to pro11 tect the health and safety of individuals receiving

12 health care through such programs, and to protect

13 the fiscal integrity of such programs.

14 ‘‘(c) CONFIDENTIALITY OF INFORMATION PRO15 VIDED.—The Secretary shall provide for suitable safe16 guards for the confidentiality of the information furnished

17 under subsection (a). Nothing in this subsection shall pre18 vent the disclosure of such information by a party which

19 is otherwise authorized, under applicable State law, to

20 make such disclosure.

21 ‘‘(d) APPROPRIATE COORDINATION.—The Secretary

22 shall provide for the maximum appropriate coordination

23 in the implementation of subsection (a) of this section and

24 section 422 of the Health Care Quality Improvement Act

25 of 1986 and section 1128E.
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1 ‘‘SEC. 1554. STATE FRAUD CONTROL UNITS.

2 ‘‘(a) IN GENERAL.—Each State plan shall provide for

3 a State fraud control unit described in subsection (b) that

4 effectively carries out the functions and requirements de5 scribed in such subsection, unless the State demonstrates

6 to the satisfaction of the Secretary that the effective oper7 ation of such a unit in the State would not be cost-effective

8 because minimal fraud exists in connection with the provi9 sion of covered services to eligible individuals under the

10 plan, and that beneficiaries under the plan will be pro11 tected from abuse and neglect in connection with the pro12 vision of medical assistance under the plan without the

13 existence of such a unit.

14 ‘‘(b) UNITS DESCRIBED.—For purposes of this sec15 tion, the term ‘State fraud control unit’ means a single

16 identifiable entity of the State government which meets

17 the following requirements:

18 ‘‘(1) ORGANIZATION.—The entity—

19 ‘‘(A) is a unit of the office of the State At20 torney General or of another department of

21 State government which possesses statewide au22 thority to prosecute individuals for criminal vio23 lations;

24 ‘‘(B) is in a State the constitution of which

25 does not provide for the criminal prosecution of
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1 individuals by a statewide authority and has

2 formal procedures that—

3 ‘‘(i) assure its referral of suspected

4 criminal violations relating to the program

5 under this title to the appropriate author6 ity or authorities in the State for prosecu7 tion, and

8 ‘‘(ii) assure its assistance of, and co9 ordination with, such authority or authori10 ties in such prosecutions; or

11 ‘‘(C) has a formal working relationship

12 with the office of the State Attorney General

13 and has formal procedures (including proce14 dures for its referral of suspected criminal vio15 lations to such office) which provide effective

16 coordination of activities between the entity and

17 such office with respect to the detection, inves18 tigation, and prosecution of suspected criminal

19 violations relating to the program under this

20 title.

21 ‘‘(2) INDEPENDENCE.—The entity is separate

22 and distinct from any State agency that has prin23 cipal responsibilities for administering or supervising

24 the administration of the State plan.
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1 ‘‘(3) FUNCTION.—The entity’s function is con2 ducting a statewide program for the investigation

3 and prosecution of violations of all applicable State

4 laws regarding any and all aspects of fraud in con5 nection with any aspect of the provision of medical

6 assistance and the activities of providers of such as7 sistance under the State plan.

8 ‘‘(4) REVIEW OF COMPLAINTS.—The entity has

9 procedures for reviewing complaints of the abuse

10 and neglect of patients of health care facilities which

11 receive payments under the State plan under this

12 title, and, where appropriate, for acting upon such

13 complaints under the criminal laws of the State or

14 for referring them to other State agencies for action.

15 ‘‘(5) OVERPAYMENTS.—

16 ‘‘(A) IN GENERAL.—The entity provides

17 for the collection, or referral for collection to a

18 single State agency, of overpayments that are

19 made under the State plan to health care pro20 viders and that are discovered by the entity in

21 carrying out its activities.

22 ‘‘(B) TREATMENT OF CERTAIN OVERPAY23 MENTS.—If an overpayment is the direct result

24 of the failure of the provider (or the provider’s

25 billing agent) to adhere to a change in the
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1 State’s billing instructions, the entity may re2 cover the overpayment only if the entity dem3 onstrates that the provider (or the provider’s

4 billing agent) received prior written or elec5 tronic notice of the change in the billing in6 structions before the submission of the claims

7 on which the overpayment is based.

8 ‘‘(6) PERSONNEL.—The entity employs such

9 auditors, attorneys, investigators, and other nec10 essary personnel and is organized in such a manner

11 as is necessary to promote the effective and efficient

12 conduct of the entity’s activities.

13 ‘‘SEC. 1555. RECOVERIES FROM THIRD PARTIES AND OTH14 ERS.

15 ‘‘(a) THIRD PARTY LIABILITY.—Each State plan

16 shall provide for reasonable steps—

17 ‘‘(1) to ascertain the legal liability of third par18 ties to pay for care and services available under the

19 plan, including the collection of sufficient informa20 tion to enable States to pursue claims against third

21 parties, and

22 ‘‘(2) to seek reimbursement for medical assist23 ance provided to the extent legal liability is estab24 lished where the amount expected to be recovered ex25 ceeds the costs of the recovery.
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1 ‘‘(b) BENEFICIARY PROTECTION.—

2 ‘‘(1) IN GENERAL.—Each State plan shall pro3 vide that in the case of a person furnishing services

4 under the plan for which a third party may be liable

5 for payment—

6 ‘‘(A) the person may not seek to collect

7 from the individual (or financially responsible

8 relative) payment of an amount for the service

9 more than could be collected under the plan in

10 the absence of such third party liability, and

11 ‘‘(B) may not refuse to furnish services to

12 such an individual because of a third party’s

13 potential liability for payment for the service.

14 ‘‘(2) PENALTY.—A State plan may provide for

15 a reduction of any payment amount otherwise due

16 with respect to a person who furnishes services

17 under the plan in an amount equal to up to 3 times

18 the amount of any payment sought to be collected by

19 that person in violation of paragraph (1)(A).

20 ‘‘(c) GENERAL LIABILITY.—The State shall prohibit

21 any health insurer, including a group health plan as de22 fined in section 607 of the Employee Retirement Income

23 Security Act of 1974, a service benefit plan, or a health

24 maintenance organization, in enrolling an individual or in

25 making any payments for benefits to the individual or on
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1 the individual’s behalf, from taking into account that the

2 individual is eligible for or is provided medical assistance

3 under a State plan for any State.

4 ‘‘(d) ACQUISITION OF RIGHTS OF BENEFICIARIES.—

5 To the extent that payment has been made under a State

6 plan in any case where a third party has a legal liability

7 to make payment for such assistance, the State shall have

8 in effect laws under which, to the extent that payment

9 has been made under the plan for health care items or

10 services furnished to an individual, the State is considered

11 to have acquired the rights of such individual to payment

12 by any other party for such health care items or services.

13 ‘‘(e) ASSIGNMENT OF MEDICAL SUPPORT RIGHTS.—

14 The State plan shall provide for mandatory assignment

15 of rights of payment for medical support and other medi16 cal care owed to recipients in accordance with section

17 1556.

18 ‘‘(f) REQUIRED LAWS RELATING TO MEDICAL CHILD

19 SUPPORT.—

20 ‘‘(1) IN GENERAL.—Each State with a State

21 plan under this title shall have in effect the following

22 laws:

23 ‘‘(A) A law that prohibits an insurer from

24 denying enrollment of a child under the health
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1 coverage of the child’s parent on the ground

2 that—

3 ‘‘(i) the child was born out of wedlock,

4 ‘‘(ii) the child is not claimed as a de5 pendent on the parent’s Federal income

6 tax return, or

7 ‘‘(iii) the child does not reside with

8 the parent or in the insurer’s service area.

9 ‘‘(B) In any case in which a parent is re10 quired by a court or administrative order to

11 provide health coverage for a child and the par12 ent is eligible for family health coverage

13 through an insurer, a law that requires such in14 surer—

15 ‘‘(i) to permit such parent to enroll

16 under such family coverage any such child

17 who is otherwise eligible for such coverage

18 (without regard to any enrollment season

19 restrictions);

20 ‘‘(ii) if such a parent is enrolled but

21 fails to make application to obtain cov22 erage of such child, to enroll such child

23 under such family coverage upon applica24 tion by the child’s other parent or by the
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1 State agency administering the program

2 under this title or part D of title IV; and

3 ‘‘(iii) not to disenroll, or eliminate

4 coverage of, such a child unless the insurer

5 is provided satisfactory written evidence

6 that—

7 ‘‘(I) such court or administrative

8 order is no longer in effect, or

9 ‘‘(II) the child is or will be en10 rolled in comparable health coverage

11 through another insurer which will

12 take effect not later than the effective

13 date of such disenrollment.

14 ‘‘(C) In any case in which a parent is re15 quired by a court or administrative order to

16 provide health coverage for a child and the par17 ent is eligible for family health coverage

18 through an employer doing business in the

19 State, a law that requires such employer—

20 ‘‘(i) to permit such parent to enroll

21 under such family coverage any such child

22 who is otherwise eligible for such coverage

23 (without regard to any enrollment season

24 restrictions);
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1 ‘‘(ii) if such a parent is enrolled but

2 fails to make application to obtain cov3 erage of such child, to enroll such child

4 under such family coverage upon applica5 tion by the child’s other parent or by the

6 State agency administering the program

7 under this title or part D of title IV; and

8 ‘‘(iii) not to disenroll (or eliminate

9 coverage of) any such child unless—

10 ‘‘(I) the employer is provided sat11 isfactory written evidence that such

12 court or administrative order is no

13 longer in effect, or the child is or will

14 be enrolled in comparable health cov15 erage which will take effect not later

16 than the effective date of such

17 disenrollment, or

18 ‘‘(II) the employer has eliminated

19 family health coverage for all of its

20 employees; and

21 ‘‘(iv) to withhold from such employ22 ee’s compensation the employee’s share (if

23 any) of premiums for health coverage (ex24 cept that the amount so withheld may not

25 exceed the maximum amount permitted to
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1 be withheld under section 303(b) of the

2 Consumer Credit Protection Act), and to

3 pay such share of premiums to the insurer,

4 except that the Secretary may provide by

5 regulation for appropriate circumstances

6 under which an employer may withhold

7 less than such employee’s share of such

8 premiums.

9 ‘‘(D) A law that prohibits an insurer from

10 imposing requirements on a State agency,

11 which has been assigned the rights of an indi12 vidual eligible for medical assistance under this

13 title and covered for health benefits from the

14 insurer, that are different from requirements

15 applicable to an agent or assignee of any other

16 individual so covered.

17 ‘‘(E) A law that requires an insurer, in

18 any case in which a child has health coverage

19 through the insurer of a noncustodial parent—

20 ‘‘(i) to provide such information to the

21 custodial parent as may be necessary for

22 the child to obtain benefits through such

23 coverage,

24 ‘‘(ii) to permit the custodial parent

25 (or provider, with the custodial parent’s
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1 approval) to submit claims for covered

2 services without the approval of the non3 custodial parent, and

4 ‘‘(iii) to make payment on claims sub5 mitted in accordance with clause (ii) di6 rectly to such custodial parent, the pro7 vider, or the State agency.

8 ‘‘(F) A law that permits the State agency

9 under this title to garnish the wages, salary, or

10 other employment income of, and requires with11 holding amounts from State tax refunds to, any

12 person who—

13 ‘‘(i) is required by court or adminis14 trative order to provide coverage of the

15 costs of health services to a child who is el16 igible for medical assistance under this

17 title,

18 ‘‘(ii) has received payment from a

19 third party for the costs of such services to

20 such child, but

21 ‘‘(iii) has not used such payments to

22 reimburse, as appropriate, either the other

23 parent or guardian of such child or the

24 provider of such services,
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1 to the extent necessary to reimburse the State

2 agency for expenditures for such costs under its

3 plan under this title, but any claims for current

4 or past-due child support shall take priority

5 over any such claims for the costs of such serv6 ices.

7 ‘‘(2) DEFINITION.—For purposes of this sub8 section, the term ‘insurer’ includes a group health

9 plan, as defined in section 607(1) of the Employee

10 Retirement Income Security Act of 1974, a health

11 maintenance organization, and an entity offering a

12 service benefit plan.

13 ‘‘(g) ESTATE RECOVERIES AND LIENS PER14 MITTED.—A State may take such actions as it considers

15 appropriate to adjust or recover from the individual or the

16 individual’s estate any amounts paid as medical assistance

17 to or on behalf of the individual under the State plan, in18 cluding through the imposition of liens against the prop19 erty or estate of the individual to the extent consistent

20 with section 1506.

21 ‘‘SEC. 1556. ASSIGNMENT OF RIGHTS OF PAYMENT.

22 ‘‘(a) IN GENERAL.—For the purpose of assisting in

23 the collection of medical support payments and other pay24 ments for medical care owed to recipients of medical as25 sistance under the State plan, each State plan shall—
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1 ‘‘(1) provide that, as a condition of eligibility

2 for medical assistance under the plan to an individ3 ual who has the legal capacity to execute an assign4 ment for himself, the individual is required—

5 ‘‘(A) to assign the State any rights, of the

6 individual or of any other person who is eligible

7 for medical assistance under the plan and on

8 whose behalf the individual has the legal au9 thority to execute an assignment of such rights,

10 to support (specified as support for the purpose

11 of medical care by a court or administrative

12 order) and to payment for medical care from

13 any third party,

14 ‘‘(B) to cooperate with the State (i) in es15 tablishing the paternity of such person (referred

16 to in subparagraph (A)) if the person is a child

17 born out of wedlock, and (ii) in obtaining sup18 port and payments (described in subparagraph

19 (A)) for himself and for such person, unless (in

20 either case) the individual is a pregnant woman

21 or the individual is found to have good cause

22 for refusing to cooperate as determined by the

23 State, and

24 ‘‘(C) to cooperate with the State in identi25 fying, and providing information to assist the
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1 State in pursuing, any third party who may be

2 liable to pay for care and services available

3 under the plan, unless such individual has good

4 cause for refusing to cooperate as determined

5 by the State; and

6 ‘‘(2) provide for entering into cooperative ar7 rangements, including financial arrangements, with

8 any appropriate agency of any State (including, with

9 respect to the enforcement and collection of rights of

10 payment for medical care by or through a parent,

11 with a State’s agency established or designated

12 under section 454(3)) and with appropriate courts

13 and law enforcement officials, to assist the agency or

14 agencies administering the plan with respect to—

15 ‘‘(A) the enforcement and collection of

16 rights to support or payment assigned under

17 this section, and

18 ‘‘(B) any other matters of common con19 cern.

20 ‘‘(b) USE OF AMOUNTS COLLECTED.—Such part of

21 any amount collected by the State under an assignment

22 made under the provisions of this section shall be retained

23 by the State as is necessary to reimburse it for medical

24 assistance payments made on behalf of an individual with

25 respect to whom such assignment was executed (with ap-
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1 propriate reimbursement of the Federal Government to

2 the extent of its participation in the financing of such

3 medical assistance), and the remainder of such amount

4 collected shall be paid to such individual.

5 ‘‘SEC. 1557. QUALITY ASSURANCE REQUIREMENTS FOR

6 NURSING FACILITIES.

7 ‘‘(a) NURSING FACILITY DEFINED.—In this title, the

8 term ‘nursing facility’ means an institution (or a distinct

9 part of an institution) which—

10 ‘‘(1) is primarily engaged in providing to resi11 dents—

12 ‘‘(A) skilled nursing care and related serv13 ices for residents who require medical or nurs14 ing care,

15 ‘‘(B) rehabilitation services for the reha16 bilitation of injured, disabled, or sick persons,

17 or

18 ‘‘(C) on a regular basis, health-related care

19 and services to individuals who because of their

20 mental or physical condition require care and

21 services (above the level of room and board)

22 which can be made available to them only

23 through institutional facilities,

24 and is not primarily for the care and treatment of

25 mental diseases;
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1 ‘‘(2) has in effect a transfer agreement (meet2 ing the requirements of section 1861(l)) with one or

3 more hospitals having agreements in effect under

4 section 1866; and

5 ‘‘(3) meets the requirements for a nursing facil6 ity described in subsections (b), (c), and (d) of this

7 section.

8 Such term also includes any facility which is located in

9 a State on an Indian reservation and is certified by the

10 Secretary as meeting the requirements of paragraph (1)

11 and subsections (b), (c), and (d).

12 ‘‘(b) REQUIREMENTS RELATING TO PROVISION OF

13 SERVICES.—

14 ‘‘(1) QUALITY OF LIFE.—

15 ‘‘(A) IN GENERAL.—A nursing facility

16 must care for its residents in such a manner

17 and in such an environment as will promote

18 maintenance or enhancement of the quality of

19 life of each resident.

20 ‘‘(B) QUALITY ASSESSMENT AND ASSUR21 ANCE.—A nursing facility must maintain a

22 quality assessment and assurance committee,

23 consisting of the director of nursing services, a

24 physician designated by the facility, and at least

25 3 other members of the facility’s staff, which
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1 (i) meets at least quarterly to identify issues

2 with respect to which quality assessment and

3 assurance activities are necessary and (ii) devel4 ops and implements appropriate plans of action

5 to correct identified quality deficiencies. A State

6 or the Secretary may not require disclosure of

7 the records of such committee except insofar as

8 such disclosure is related to the compliance of

9 such committee with the requirements of this

10 subparagraph.

11 ‘‘(2) SCOPE OF SERVICES AND ACTIVITIES

12 UNDER PLAN OF CARE.—A nursing facility must

13 provide services and activities to attain or maintain

14 the highest practicable physical, mental, and

15 psychosocial well-being of each resident in accord16 ance with a written plan of care which—

17 ‘‘(A) describes the medical, nursing, and

18 psychosocial needs of the resident and how such

19 needs will be met;

20 ‘‘(B) is initially prepared, with the partici21 pation to the extent practicable of the resident

22 or the resident’s family or legal representative,

23 by a team which includes the resident’s attend24 ing physician and a registered professional

25 nurse with responsibility for the resident; and
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1 ‘‘(C) is periodically reviewed and revised by

2 such team after each assessment under para3 graph (3).

4 ‘‘(3) RESIDENTS’ ASSESSMENT.—

5 ‘‘(A) REQUIREMENT.—A nursing facility

6 must conduct a comprehensive, accurate, stand7 ardized, reproducible assessment of each resi8 dent’s functional capacity, which assessment—

9 ‘‘(i) describes the resident’s capability

10 to perform daily life functions and signifi11 cant impairments in functional capacity;

12 ‘‘(ii) is based on a uniform minimum

13 data set specified by the Secretary under

14 subsection (f)(6)(A);

15 ‘‘(iii) uses an instrument which is

16 specified by the State under subsection

17 (e)(5); and

18 ‘‘(iv) includes the identification of

19 medical problems.

20 ‘‘(B) CERTIFICATION.—

21 ‘‘(i) IN GENERAL.—Each such assess22 ment must be conducted or coordinated

23 (with the appropriate participation of

24 health professionals) by a registered pro25 fessional nurse who signs and certifies the
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1 completion of the assessment. Each indi2 vidual who completes a portion of such an

3 assessment shall sign and certify as to the

4 accuracy of that portion of the assessment.

5 ‘‘(ii) PENALTY FOR FALSIFICATION.—

6 ‘‘(I) An individual who willfully

7 and knowingly certifies under clause

8 (i) a material and false statement in

9 a resident assessment is subject to a

10 civil money penalty of not more than

11 $1,000 with respect to each assess12 ment.

13 ‘‘(II) An individual who willfully

14 and knowingly causes another individ15 ual to certify under clause (i) a mate16 rial and false statement in a resident

17 assessment is subject to a civil money

18 penalty of not more than $5,000 with

19 respect to each assessment.

20 ‘‘(III) The provisions of section

21 1128A (other than subsections (a)

22 and (b)) shall apply to a civil money

23 penalty under this clause in the same

24 manner as such provisions apply to a
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1 penalty or proceeding under section

2 1128A(a).

3 ‘‘(iii) USE OF INDEPENDENT ASSES4 SORS.—If a State determines, under a sur5 vey under subsection (g) or otherwise, that

6 there has been a knowing and willful cer7 tification of false assessments under this

8 paragraph, the State may require (for a

9 period specified by the State) that resident

10 assessments under this paragraph be con11 ducted and certified by individuals who are

12 independent of the facility and who are ap13 proved by the State.

14 ‘‘(C) FREQUENCY.—

15 ‘‘(i) IN GENERAL.—Such an assess16 ment must be conducted—

17 ‘‘(I) promptly upon (but no later

18 than 14 days after the date of) admis19 sion for each individual admitted;

20 ‘‘(II) promptly after a significant

21 change in the resident’s physical or

22 mental condition; and

23 ‘‘(III) in no case less often than

24 once every 12 months.
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1 ‘‘(ii) RESIDENT REVIEW.—The nurs2 ing facility must examine each resident no

3 less frequently than once every 3 months

4 and, as appropriate, revise the resident’s

5 assessment to assure the continuing accu6 racy of the assessment.

7 ‘‘(D) USE.—The results of such an assess8 ment shall be used in developing, reviewing, and

9 revising the resident’s plan of care under para10 graph (2).

11 ‘‘(E) COORDINATION.—Such assessments

12 shall be coordinated with any State-required

13 preadmission screening program to the maxi14 mum extent practicable in order to avoid dupli15 cative testing and effort. In addition, a nursing

16 facility shall notify the State mental health au17 thority or State mental retardation or devel18 opmental disability authority, as applicable,

19 promptly after a significant change in the phys20 ical or mental condition of a resident who is

21 mentally ill or mentally retarded.

22 ‘‘(4) PROVISION OF SERVICES AND ACTIVI23 TIES.—

24 ‘‘(A) IN GENERAL.—To the extent needed

25 to fulfill all plans of care described in para-
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1 graph (2), a nursing facility must provide (or

2 arrange for the provision of)—

3 ‘‘(i) nursing and related services and

4 specialized rehabilitative services to attain

5 or maintain the highest practicable phys6 ical, mental, and psychosocial well-being of

7 each resident;

8 ‘‘(ii) medically-related social services

9 to attain or maintain the highest prac10 ticable physical, mental, and psychosocial

11 well-being of each resident;

12 ‘‘(iii) pharmaceutical services (includ13 ing procedures that assure the accurate ac14 quiring, receiving, dispensing, and admin15 istering of all drugs and biologicals) to

16 meet the needs of each resident;

17 ‘‘(iv) dietary services that assure that

18 the meals meet the daily nutritional and

19 special dietary needs of each resident;

20 ‘‘(v) an on-going program, directed by

21 a qualified professional, of activities de22 signed to meet the interests and the phys23 ical, mental, and psychosocial well-being of

24 each resident;
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1 ‘‘(vi) routine dental services (to the

2 extent covered under the State plan) and

3 emergency dental services to meet the

4 needs of each resident; and

5 ‘‘(vii) treatment and services required

6 by mentally ill and mentally retarded resi7 dents not otherwise provided or arranged

8 for (or required to be provided or arranged

9 for) by the State.

10 The services provided or arranged by the facil11 ity must meet professional standards of quality.

12 ‘‘(B) QUALIFIED PERSONS PROVIDING

13 SERVICES.—Services described in clauses (i),

14 (ii), (iii), (iv), and (vi) of subparagraph (A)

15 must be provided by qualified persons in ac16 cordance with each resident’s written plan of

17 care.

18 ‘‘(C) REQUIRED NURSING CARE; FACILITY

19 WAIVERS.—

20 ‘‘(i) GENERAL REQUIREMENTS.—A

21 nursing facility—

22 ‘‘(I) except as provided in clause

23 (ii), must provide 24-hour licensed

24 nursing services which are sufficient
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1 to meet the nursing needs of its resi2 dents, and

3 ‘‘(II) except as provided in clause

4 (ii), must use the services of a reg5 istered professional nurse for at least

6 8 consecutive hours a day, 7 days a

7 week.

8 ‘‘(ii) WAIVER BY STATE.—To the ex9 tent that a facility is unable to meet the

10 requirements of clause (i), a State may

11 waive such requirements with respect to

12 the facility if—

13 ‘‘(I) the facility demonstrates to

14 the satisfaction of the State that the

15 facility has been unable, despite dili16 gent efforts (including offering wages

17 at the community prevailing rate for

18 nursing facilities), to recruit appro19 priate personnel,

20 ‘‘(II) the State determines that a

21 waiver of the requirement will not en22 danger the health or safety of individ23 uals staying in the facility,

24 ‘‘(III) the State finds that, for

25 any such periods in which licensed
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1 nursing services are not available, a

2 registered professional nurse or a phy3 sician is obligated to respond imme4 diately to telephone calls from the fa5 cility,

6 ‘‘(IV) the State agency granting

7 a waiver of such requirements pro8 vides notice of the waiver to the State

9 long-term care ombudsman (estab10 lished under section 307(a)(12) of the

11 Older Americans Act of 1965) and the

12 protection and advocacy system in the

13 State for the mentally ill and the

14 mentally retarded, and

15 ‘‘(V) the nursing facility that is

16 granted such a waiver by a State noti17 fies residents of the facility (or, where

18 appropriate, the guardians or legal

19 representatives of such residents) and

20 members of their immediate families

21 of the waiver.

22 A waiver under this clause shall be subject

23 to annual review and to the review of the

24 Secretary and subject to clause (iii) shall

25 be accepted by the Secretary for purposes
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1 of this title to the same extent as is the

2 State’s certification of the facility. In

3 granting or renewing a waiver, a State

4 may require the facility to use other quali5 fied, licensed personnel.

6 ‘‘(iii) ASSUMPTION OF WAIVER AU7 THORITY BY SECRETARY.—If the Secretary

8 determines that a State has shown a clear

9 pattern and practice of allowing waivers in

10 the absence of diligent efforts by facilities

11 to meet the staffing requirements, the Sec12 retary shall assume and exercise the au13 thority of the State to grant waivers.

14 ‘‘(5) REQUIRED TRAINING OF NURSE AIDES.—

15 ‘‘(A) IN GENERAL.—(i) Except as provided

16 in clause (ii), a nursing facility must not use on

17 a full-time basis any individual as a nurse aide

18 in the facility, for more than 4 months unless

19 the individual—

20 ‘‘(I) has completed a training and

21 competency evaluation program, or a com22 petency evaluation program, approved by

23 the State under subsection (e)(1)(A), and

24 ‘‘(II) is competent to provide nursing

25 or nursing-related services.
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1 ‘‘(ii) A nursing facility must not use on a

2 temporary, per diem, leased, or on any other

3 basis other than as a permanent employee any

4 individual as a nurse aide in the facility, unless

5 the individual meets the requirements described

6 in clause (i).

7 ‘‘(B) OFFERING COMPETENCY EVALUA8 TION PROGRAMS FOR CURRENT EMPLOYEES.—

9 A nursing facility must provide, for individuals

10 used as a nurse aide by the facility, for a com11 petency evaluation program approved by the

12 State under subsection (e)(1) and such prepara13 tion as may be necessary for the individual to

14 complete such a program.

15 ‘‘(C) COMPETENCY.—The nursing facility

16 must not permit an individual, other than in a

17 training and competency evaluation program

18 approved by the State, to serve as a nurse aide

19 or provide services of a type for which the indi20 vidual has not demonstrated competency and

21 must not use such an individual as a nurse aide

22 unless the facility has inquired of any State

23 registry established under subsection (e)(2)(A)

24 that the facility believes will include information

25 concerning the individual.
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1 ‘‘(D) RE-TRAINING REQUIRED.—For pur2 poses of subparagraph (A), if, since an individ3 ual’s most recent completion of a training and

4 competency evaluation program, there has been

5 a continuous period of 24 consecutive months

6 during none of which the individual performed

7 nursing or nursing-related services for monetary

8 compensation, such individual shall complete a

9 new training and competency evaluation pro10 gram, or a new competency evaluation program.

11 ‘‘(E) REGULAR IN-SERVICE EDUCATION.—

12 The nursing facility must provide such regular

13 performance review and regular in-service edu14 cation as assures that individuals used as nurse

15 aides are competent to perform services as

16 nurse aides, including training for individuals

17 providing nursing and nursing-related services

18 to residents with cognitive impairments.

19 ‘‘(F) NURSE AIDE DEFINED.—In this

20 paragraph, the term ‘nurse aide’ means any in21 dividual providing nursing or nursing-related

22 services to residents in a nursing facility, but

23 does not include an individual—
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1 ‘‘(i) who is a licensed health profes2 sional (as defined in subparagraph (G)) or

3 a registered dietitian, or

4 ‘‘(ii) who volunteers to provide such

5 services without monetary compensation.

6 ‘‘(G) LICENSED HEALTH PROFESSIONAL

7 DEFINED.—In this paragraph, the term ‘li8 censed health professional’ means a physician,

9 physician assistant, nurse practitioner, physical,

10 speech, or occupational therapist, physical or

11 occupational therapy assistant, registered pro12 fessional nurse, licensed practical nurse, or li13 censed or certified social worker.

14 ‘‘(6) PHYSICIAN SUPERVISION AND CLINICAL

15 RECORDS.—A nursing facility must—

16 ‘‘(A) require that the health care of every

17 resident be provided under the supervision of a

18 physician (or, at the option of a State, under

19 the supervision of a nurse practitioner, clinical

20 nurse specialist, or physician assistant who is

21 not an employee of the facility but who is work22 ing in collaboration with a physician);

23 ‘‘(B) provide for having a physician avail24 able to furnish necessary medical care in case

25 of emergency; and
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1 ‘‘(C) maintain clinical records on all resi2 dents, which records include the plans of care

3 (described in paragraph (2)) and the residents’

4 assessments (described in paragraph (3)), as

5 well as the results of any pre-admission screen6 ing conducted under subsection (e)(7).

7 ‘‘(7) REQUIRED SOCIAL SERVICES.—In the case

8 of a nursing facility with more than 120 beds, the

9 facility must have at least one social worker (with at

10 least a bachelor’s degree in social work or similar

11 professional qualifications) employed full-time to

12 provide or assure the provision of social services.

13 ‘‘(c) REQUIREMENTS RELATING TO RESIDENTS’

14 RIGHTS.—

15 ‘‘(1) GENERAL RIGHTS.—

16 ‘‘(A) SPECIFIED RIGHTS.—A nursing facil17 ity must protect and promote the rights of each

18 resident, including each of the following rights:

19 ‘‘(i) FREE CHOICE.—The right to

20 choose a personal attending physician, to

21 be fully informed in advance about care

22 and treatment, to be fully informed in ad23 vance of any changes in care or treatment

24 that may affect the resident’s well-being,

25 and (except with respect to a resident ad-
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1 judged incompetent) to participate in plan2 ning care and treatment or changes in care

3 and treatment.

4 ‘‘(ii) FREE FROM RESTRAINTS.—The

5 right to be free from physical or mental

6 abuse, corporal punishment, involuntary

7 seclusion, and any physical or chemical re8 straints imposed for purposes of discipline

9 or convenience and not required to treat

10 the resident’s medical symptoms. Re11 straints may only be imposed—

12 ‘‘(I) to ensure the physical safety

13 of the resident or other residents, and

14 ‘‘(II) only upon the written order

15 of a physician that specifies the dura16 tion and circumstances under which

17 the restraints are to be used (except

18 in emergency circumstances specified

19 by the Secretary until such an order

20 could reasonably be obtained).

21 ‘‘(iii) PRIVACY.—The right to privacy

22 with regard to accommodations, medical

23 treatment, written and telephonic commu24 nications, visits, and meetings of family

25 and of resident groups.
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1 ‘‘(iv) CONFIDENTIALITY.—The right

2 to confidentiality of personal and clinical

3 records and to access to current clinical

4 records of the resident upon request by the

5 resident or the resident’s legal representa6 tive, within 24 hours (excluding hours oc7 curring during a weekend or holiday) after

8 making such a request.

9 ‘‘(v) ACCOMMODATION OF NEEDS.—

10 The right—

11 ‘‘(I) to reside and receive services

12 with reasonable accommodation of in13 dividual needs and preferences, except

14 where the health or safety of the indi15 vidual or other residents would be en16 dangered, and

17 ‘‘(II) to receive notice before the

18 room or roommate of the resident in

19 the facility is changed.

20 ‘‘(vi) GRIEVANCES.—The right to

21 voice grievances with respect to treatment

22 or care that is (or fails to be) furnished,

23 without discrimination or reprisal for voic24 ing the grievances and the right to prompt

25 efforts by the facility to resolve grievances
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1 the resident may have, including those with

2 respect to the behavior of other residents.

3 ‘‘(vii) PARTICIPATION IN RESIDENT

4 AND FAMILY GROUPS.—The right of the

5 resident to organize and participate in resi6 dent groups in the facility and the right of

7 the resident’s family to meet in the facility

8 with the families of other residents in the

9 facility.

10 ‘‘(viii) PARTICIPATION IN OTHER AC11 TIVITIES.—The right of the resident to

12 participate in social, religious, and commu13 nity activities that do not interfere with

14 the rights of other residents in the facility.

15 ‘‘(ix) EXAMINATION OF SURVEY RE16 SULTS.—The right to examine, upon rea17 sonable request, the results of the most re18 cent survey of the facility conducted by the

19 Secretary or a State with respect to the fa20 cility and any plan of correction in effect

21 with respect to the facility.

22 ‘‘(x) REFUSAL OF CERTAIN TRANS23 FERS.—The right to refuse a transfer to

24 another room within the facility, if a pur25 poses of the transfer is to relocate the resi-
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1 dent from a portion of the facility that is

2 not a skilled nursing facility (for purposes

3 of title XVIII) to a portion of the facility

4 that is such a skilled nursing facility.

5 ‘‘(xi) OTHER RIGHTS.—Any other

6 right established by the Secretary.

7 Clause (i) shall not be construed as precluding

8 a State from requiring a resident of a nursing

9 facility to choose a personal attending physician

10 who participates in a managed care network

11 under a contract with the State to provide med12 ical assistance under this title. Clause (iii) shall

13 not be construed as requiring the provision of

14 a private room. A resident’s exercise of a right

15 to refuse transfer under clause (x) shall not af16 fect the resident’s eligibility or entitlement to

17 medical assistance under this title or a State’s

18 entitlement to Federal medical assistance under

19 this title with respect to services furnished to

20 such a resident.

21 ‘‘(B) NOTICE OF RIGHTS.—A nursing fa22 cility must—

23 ‘‘(i) inform each resident, orally and

24 in writing at the time of admission to the

25 facility, of the resident’s legal rights dur-
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1 ing the stay at the facility and of the re2 quirements and procedures for establishing

3 eligibility for medical assistance under this

4 title, including the right to request an as5 sessment under section 1505(c)(1)(B);

6 ‘‘(ii) make available to each resident,

7 upon reasonable request, a written state8 ment of such rights (which statement is

9 updated upon changes in such rights) in10 cluding the notice (if any) of the State de11 veloped under subsection (e)(6);

12 ‘‘(iii) inform each resident who is enti13 tled to medical assistance under this

14 title—

15 ‘‘(I) at the time of admission to

16 the facility or, if later, at the time the

17 resident becomes eligible for such as18 sistance, of the items and services

19 that are included in nursing facility

20 services under the State plan and for

21 which the resident may not be

22 charged, and of those other items and

23 services that the facility offers and for

24 which the resident may be charged
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1 and the amount of the charges for

2 such items and services, and

3 ‘‘(II) of changes in the items and

4 services described in subclause (I) and

5 of changes in the charges imposed for

6 items and services described in that

7 subclause; and

8 ‘‘(iv) inform each other resident, in

9 writing before or at the time of admission

10 and periodically during the resident’s stay,

11 of services available in the facility and of

12 related charges for such services, including

13 any charges for services not covered under

14 title XVIII or by the facility’s basic per

15 diem charge.

16 The written description of legal rights under

17 this subparagraph shall include a description of

18 the protection of personal funds under para19 graph (6) and a statement that a resident may

20 file a complaint with a State survey and certifi21 cation agency respecting resident abuse and ne22 glect and misappropriation of resident property

23 in the facility.

24 ‘‘(C) RIGHTS OF INCOMPETENT RESI25 DENTS.—In the case of a resident adjudged in-
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1 competent under the laws of a State, the rights

2 of the resident under this title shall devolve

3 upon, and, to the extent judged necessary by a

4 court of competent jurisdiction, be exercised by,

5 the person appointed under State law to act on

6 the resident’s behalf.

7 ‘‘(D) USE OF PSYCHOPHARMACOLOGIC

8 DRUGS.—Psychopharmacologic drugs may be

9 administered only on the orders of a physician

10 and only as part of a plan (included in the writ11 ten plan of care described in paragraph (2)) de12 signed to eliminate or modify the symptoms for

13 which the drugs are prescribed and only if, at

14 least annually an independent, external consult15 ant reviews the appropriateness of the drug

16 plan of each resident receiving such drugs.

17 ‘‘(2) TRANSFER AND DISCHARGE RIGHTS.—

18 ‘‘(A) IN GENERAL.—A nursing facility

19 must permit each resident to remain in the fa20 cility and must not transfer or discharge the

21 resident from the facility unless—

22 ‘‘(i) the transfer or discharge is nec23 essary to meet the resident’s welfare and

24 the resident’s welfare cannot be met in the

25 facility;
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1 ‘‘(ii) the transfer or discharge is ap2 propriate because the resident’s health has

3 improved sufficiently so the resident no

4 longer needs the services provided by the

5 facility;

6 ‘‘(iii) the safety of individuals in the

7 facility is endangered;

8 ‘‘(iv) the health of individuals in the

9 facility would otherwise be endangered;

10 ‘‘(v) the resident has failed, after rea11 sonable and appropriate notice, to pay (or

12 to have paid under this title or title XVIII

13 on the resident’s behalf) for a stay at the

14 facility; or

15 ‘‘(vi) the facility ceases to operate.

16 In each of the cases described in clauses (i)

17 through (iv), the basis for the transfer or dis18 charge must be documented in the resident’s

19 clinical record. In the cases described in clauses

20 (i) and (ii), the documentation must be made

21 by the resident’s physician, and in the case de22 scribed in clause (iv) the documentation must

23 be made by a physician. For purposes of clause

24 (v), in the case of a resident who becomes eligi25 ble for assistance under this title after admis-
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1 sion to the facility, only charges which may be

2 imposed under this title shall be considered to

3 be allowable.

4 ‘‘(B) PRE-TRANSFER AND PRE-DISCHARGE

5 NOTICE.—

6 ‘‘(i) IN GENERAL.—Before effecting a

7 transfer or discharge of a resident, a nurs8 ing facility must—

9 ‘‘(I) notify the resident (and, if

10 known, an immediate family member

11 of the resident or legal representative)

12 of the transfer or discharge and the

13 reasons therefor,

14 ‘‘(II) record the reasons in the

15 resident’s clinical record (including

16 any documentation required under

17 subparagraph (A)), and

18 ‘‘(III) include in the notice the

19 items described in clause (iii).

20 ‘‘(ii) TIMING OF NOTICE.—The notice

21 under clause (i)(I) must be made at least

22 30 days in advance of the resident’s trans23 fer or discharge except—

24 ‘‘(I) in a case described in clause

25 (iii) or (iv) of subparagraph (A);
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1 ‘‘(II) in a case described in

2 clause (ii) of subparagraph (A), where

3 the resident’s health improves suffi4 ciently to allow a more immediate

5 transfer or discharge;

6 ‘‘(III) in a case described in

7 clause (i) of subparagraph (A), where

8 a more immediate transfer or dis9 charge is necessitated by the resi10 dent’s urgent medical needs; or

11 ‘‘(IV) in a case where a resident

12 has not resided in the facility for 30

13 days.

14 In the case of such exceptions, notice must

15 be given as many days before the date of

16 the transfer or discharge as is practicable.

17 ‘‘(iii) ITEMS INCLUDED IN NOTICE.—

18 Each notice under clause (i) must in19 clude—

20 ‘‘(I) notice of the resident’s right

21 to appeal the transfer or discharge

22 under the State process established

23 under subsection (e)(3);

24 ‘‘(II) the name, mailing address,

25 and telephone number of the State
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1 long-term care ombudsman (estab2 lished under title III or VII of the

3 Older Americans Act of 1965);

4 ‘‘(III) in the case of residents

5 with developmental disabilities, the

6 mailing address and telephone number

7 of the agency responsible for the pro8 tection and advocacy system for devel9 opmentally disabled individuals estab10 lished under part C of the Devel11 opmental Disabilities Assistance and

12 Bill of Rights Act; and

13 ‘‘(IV) in the case of mentally ill

14 residents (as defined in subsection

15 (e)(7)(G)(i)), the mailing address and

16 telephone number of the agency re17 sponsible for the protection and advo18 cacy system for mentally ill individ19 uals established under the Protection

20 and Advocacy for Mentally Ill Individ21 uals Act.

22 ‘‘(C) ORIENTATION.—A nursing facility

23 must provide sufficient preparation and orienta24 tion to residents to ensure safe and orderly

25 transfer or discharge from the facility.
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1 ‘‘(D) NOTICE ON BED-HOLD POLICY AND

2 READMISSION.—

3 ‘‘(i) NOTICE BEFORE TRANSFER.—

4 Before a resident of a nursing facility is

5 transferred for hospitalization or thera6 peutic leave, a nursing facility must pro7 vide written information to the resident

8 and an immediate family member or legal

9 representative concerning—

10 ‘‘(I) the provisions of the State

11 plan under this title regarding the pe12 riod (if any) during which the resident

13 will be permitted under the State plan

14 to return and resume residence in the

15 facility, and

16 ‘‘(II) the policies of the facility

17 regarding such a period, which poli18 cies must be consistent with clause

19 (iii).

20 ‘‘(ii) NOTICE UPON TRANSFER.—At

21 the time of transfer of a resident to a hos22 pital or for therapeutic leave, a nursing fa23 cility must provide written notice to the

24 resident and an immediate family member
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1 or legal representative of the duration of

2 any period described in clause (i).

3 ‘‘(iii) PERMITTING RESIDENT TO RE4 TURN.—A nursing facility must establish

5 and follow a written policy under which a

6 resident—

7 ‘‘(I) who is eligible for medical

8 assistance for nursing facility services

9 under a State plan,

10 ‘‘(II) who is transferred from the

11 facility for hospitalization or thera12 peutic leave, and

13 ‘‘(III) whose hospitalization or

14 therapeutic leave exceeds a period

15 paid for under the State plan for the

16 holding of a bed in the facility for the

17 resident,

18 will be permitted to be readmitted to the

19 facility immediately upon the first avail20 ability of a bed in a room (not including a

21 private room) in the facility if, at the time

22 of readmission, the resident requires the

23 services provided by the facility.

24 ‘‘(3) ACCESS AND VISITATION RIGHTS.—A

25 nursing facility must—
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1 ‘‘(A) permit immediate access to any resi2 dent by any representative of the Secretary, by

3 any representative of the State, by an ombuds4 man or agency described in subclause (II),

5 (III), or (IV) of paragraph (2)(B)(iii), or by the

6 resident’s individual physician;

7 ‘‘(B) permit immediate access to a resi8 dent, subject to the resident’s right to deny or

9 withdraw consent at any time, by immediate

10 family or other relatives of the resident;

11 ‘‘(C) permit immediate access to a resi12 dent, subject to reasonable restrictions and the

13 resident’s right to deny or withdraw consent at

14 any time, by others who are visiting with the

15 consent of the resident;

16 ‘‘(D) permit reasonable access to a resi17 dent by any entity or individual that provides

18 health, social, legal, or other services to the

19 resident, subject to the resident’s right to deny

20 or withdraw consent at any time; and

21 ‘‘(E) permit representatives of the State

22 ombudsman (described in paragraph

23 (2)(B)(iii)(II)), with the permission of the resi24 dent (or the resident’s legal representative) and
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1 consistent with State law, to examine a resi2 dent’s clinical records.

3 ‘‘(4) EQUAL ACCESS TO QUALITY CARE.—

4 ‘‘(A) IN GENERAL.—A nursing facility

5 must establish and maintain identical policies

6 and practices regarding transfer, discharge, and

7 the provision of services required under the

8 State plan for all individuals regardless of

9 source of payment.

10 ‘‘(B) CONSTRUCTION.—

11 ‘‘(i) NOTHING PROHIBITING ANY

12 CHARGES FOR NON-MEDICAL ASSISTANCE

13 PATIENTS.—Subparagraph (A) shall not be

14 construed as prohibiting a nursing facility

15 from charging any amount for services fur16 nished, consistent with the notice in para17 graph (1)(B) describing such charges.

18 ‘‘(ii) NO ADDITIONAL SERVICES RE19 QUIRED.—Subparagraph (A) shall not be

20 construed as requiring a State to offer ad21 ditional services on behalf of a resident

22 than are otherwise provided under the

23 State plan.

24 ‘‘(5) ADMISSIONS POLICY.—
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1 ‘‘(A) ADMISSIONS.—With respect to admis2 sions practices, a nursing facility must—

3 ‘‘(i)(I) not require individuals apply4 ing to reside or residing in the facility to

5 waive their rights to benefits under a State

6 plan under this title or title XVIII, (II) not

7 require oral or written assurance that such

8 individuals are not eligible for, or will not

9 apply for, benefits under a State plan

10 under this title or title XVIII, and (III)

11 prominently display in the facility written

12 information, and provide to such individ13 uals oral and written information, about

14 how to apply for and use such benefits and

15 how to receive refunds for previous pay16 ments covered by such benefits;

17 ‘‘(ii) not require a third party guaran18 tee of payment to the facility as a condi19 tion of admission (or expedited admission)

20 to, or continued stay in, the facility; and

21 ‘‘(iii) in the case of an individual who

22 is provided medical assistance for nursing

23 facility services, not charge, solicit, accept,

24 or receive, in addition to any amount oth25 erwise required to be paid under the State
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1 plan under this title, any gift, money, do2 nation, or other consideration as a pre3 condition of admitting (or expediting the

4 admission of) the individual to the facility

5 or as a requirement for the individual’s

6 continued stay in the facility.

7 ‘‘(B) CONSTRUCTION.—

8 ‘‘(i) NO PREEMPTION OF STRICTER

9 STANDARDS.—Subparagraph (A) shall not

10 be construed as preventing States or politi11 cal subdivisions therein from prohibiting,

12 under State or local law, the discrimination

13 against individuals who are provided medi14 cal assistance under the State plan with

15 respect to admissions practices of nursing

16 facilities.

17 ‘‘(ii) CONTRACTS WITH LEGAL REP18 RESENTATIVES.—Subparagraph (A)(ii)

19 shall not be construed as preventing a fa20 cility from requiring an individual, who has

21 legal access to a resident’s income or re22 sources available to pay for care in the fa23 cility, to sign a contract (without incurring

24 personal financial liability) to provide pay-
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1 ment from the resident’s income or re2 sources for such care.

3 ‘‘(iii) CHARGES FOR ADDITIONAL

4 SERVICES REQUESTED.—Subparagraph

5 (A)(iii) shall not be construed as prevent6 ing a facility from charging a resident, eli7 gible for medical assistance under the

8 State plan, for items or services the resi9 dent has requested and received and that

10 are not specified in the State plan as in11 cluded in covered nursing facility services.

12 ‘‘(iv) BONA FIDE CONTRIBUTIONS.—

13 Subparagraph (A)(iii) shall not be con14 strued as prohibiting a nursing facility

15 from soliciting, accepting, or receiving a

16 charitable, religious, or philanthropic con17 tribution from an organization or from a

18 person unrelated to the resident (or poten19 tial resident), but only to the extent that

20 such contribution is not a condition of ad21 mission, expediting admission, or continued

22 stay in the facility.

23 ‘‘(6) PROTECTION OF RESIDENT FUNDS.—

24 ‘‘(A) IN GENERAL.—The nursing facility—
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1 ‘‘(i) may not require residents to de2 posit their personal funds with the facility,

3 and

4 ‘‘(ii) upon the written authorization of

5 the resident, must hold, safeguard, and ac6 count for such personal funds under a sys7 tem established and maintained by the fa8 cility in accordance with this paragraph.

9 ‘‘(B) MANAGEMENT OF PERSONAL

10 FUNDS.—Upon written authorization of a resi11 dent under subparagraph (A)(ii), the facility

12 must manage and account for the personal

13 funds of the resident deposited with the facility

14 as follows:

15 ‘‘(i) DEPOSIT.—The facility must de16 posit any amount of personal funds in ex17 cess of $50 with respect to a resident in an

18 interest bearing account (or accounts) that

19 is separate from any of the facility’s oper20 ating accounts and credits all interest

21 earned on such separate account to such

22 account. With respect to any other per23 sonal funds, the facility must maintain

24 such funds in a non-interest bearing ac25 count or petty cash fund.
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1 ‘‘(ii) ACCOUNTING AND RECORDS.—

2 The facility must assure a full and com3 plete separate accounting of each such

4 resident’s personal funds, maintain a writ5 ten record of all financial transactions in6 volving the personal funds of a resident de7 posited with the facility, and afford the

8 resident (or a legal representative of the

9 resident) reasonable access to such record.

10 ‘‘(iii) NOTICE OF CERTAIN BAL11 ANCES.—The facility must notify each resi12 dent receiving medical assistance under the

13 State plan when the amount in the resi14 dent’s account reaches $200 less than the

15 dollar amount determined under section

16 1611(a)(3)(B) and the fact that if the

17 amount in the account (in addition to the

18 value of the resident’s other nonexempt re19 sources) reaches the amount determined

20 under such section the resident may lose

21 eligibility for such medical assistance or for

22 benefits under title XVI.

23 ‘‘(iv) CONVEYANCE UPON DEATH.—

24 Upon the death of a resident with such an

25 account, the facility must convey promptly
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1 the resident’s personal funds (and a final

2 accounting of such funds) to the individual

3 administering the resident’s estate. All

4 other personal property, including medical

5 records, shall be considered part of the

6 resident’s estate and shall only be released

7 to the administrator of the estate.

8 ‘‘(C) ASSURANCE OF FINANCIAL SECU9 RITY.—The facility must purchase a surety

10 bond, or otherwise provide assurance satisfac11 tory to the State, to assure the security of all

12 personal funds of residents deposited with the

13 facility.

14 ‘‘(D) LIMITATION ON CHARGES TO PER15 SONAL FUNDS.—The facility may not impose a

16 charge against the personal funds of a resident

17 for any item or service for which payment is

18 made under this title or title XVIII.

19 ‘‘(7) LIMITATION ON CHARGES IN CASE OF

20 MEDICAL-ASSISTANCE-ELIGIBLE INDIVIDUALS.—

21 ‘‘(A) IN GENERAL.—A nursing facility may

22 not impose charges, for certain medical-assist23 ance-eligible individuals for nursing facility

24 services covered by the State under its plan

25 under this title, that exceed the payment
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1 amounts established by the State for such serv2 ices under this title.

3 ‘‘(B) CERTAIN MEDICAL-ASSISTANCE-ELI4 GIBLE INDIVIDUALS DEFINED.—In subpara5 graph (A), the term ‘certain medical-assistance6 eligible individual’ means an individual who is

7 entitled to medical assistance for nursing facil8 ity services in the facility under this title but

9 with respect to whom such benefits are not

10 being paid because, in determining the amount

11 of the individual’s income to be applied monthly

12 to payment for the costs of such services, the

13 amount of such income exceeds the payment

14 amounts established by the State for such serv15 ices under this title.

16 ‘‘(8) POSTING OF SURVEY RESULTS.—A nurs17 ing facility must post in a place readily accessible to

18 residents, and family members and legal representa19 tives of residents, the results of the most recent sur20 vey of the facility conducted under subsection (g).

21 ‘‘(d) REQUIREMENTS RELATING TO ADMINISTRA22 TION AND OTHER MATTERS.—

23 ‘‘(1) ADMINISTRATION.—

24 ‘‘(A) IN GENERAL.—A nursing facility

25 must be administered in a manner that enables
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1 it to use its resources effectively and efficiently

2 to attain or maintain the highest practicable

3 physical, mental, and psychosocial well-being of

4 each resident (consistent with requirements es5 tablished under subsection (f)(5)).

6 ‘‘(B) REQUIRED NOTICES.—If a change oc7 curs in—

8 ‘‘(i) the persons with an ownership or

9 control interest (as defined in section

10 1124(a)(3)) in the facility,

11 ‘‘(ii) the persons who are officers, di12 rectors, agents, or managing employees (as

13 defined in section 1126(b)) of the facility,

14 ‘‘(iii) the corporation, association, or

15 other company responsible for the manage16 ment of the facility, or

17 ‘‘(iv) the individual who is the admin18 istrator or director of nursing of the facil19 ity,

20 the nursing facility must provide notice to the

21 State agency responsible for the licensing of the

22 facility, at the time of the change, of the change

23 and of the identity of each new person, com24 pany, or individual described in the respective

25 clause.
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1 ‘‘(C) NURSING FACILITY ADMINIS2 TRATOR.—The administrator of a nursing facil3 ity, whether freestanding or hospital-based,

4 must meet such standards as are established by

5 the Secretary under subsection (f)(4).

6 ‘‘(2) LICENSING AND LIFE SAFETY CODE.—

7 ‘‘(A) LICENSING.—A nursing facility must

8 be licensed under applicable State and local law.

9 ‘‘(B) LIFE SAFETY CODE.—A nursing fa10 cility must meet such provisions of such edition

11 (as specified by the Secretary in regulation) of

12 the Life Safety Code of the National Fire Pro13 tection Association as are applicable to nursing

14 homes; except that—

15 ‘‘(i) the Secretary may waive, for such

16 periods as he deems appropriate, specific

17 provisions of such Code which if rigidly ap18 plied would result in unreasonable hard19 ship upon a facility, but only if such waiver

20 would not adversely affect the health and

21 safety of residents or personnel, and

22 ‘‘(ii) the provisions of such Code shall

23 not apply in any State if the Secretary

24 finds that in such State there is in effect

25 a fire and safety code, imposed by State
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1 law, which adequately protects residents of

2 and personnel in nursing facilities.

3 ‘‘(3) SANITARY AND INFECTION CONTROL AND

4 PHYSICAL ENVIRONMENT.—A nursing facility

5 must—

6 ‘‘(A) establish and maintain an infection

7 control program designed to provide a safe, san8 itary, and comfortable environment in which

9 residents reside and to help prevent the devel10 opment and transmission of disease and infec11 tion, and

12 ‘‘(B) be designed, constructed, equipped,

13 and maintained in a manner to protect the

14 health and safety of residents, personnel, and

15 the general public.

16 ‘‘(4) MISCELLANEOUS.—

17 ‘‘(A) COMPLIANCE WITH FEDERAL, STATE,

18 AND LOCAL LAWS AND PROFESSIONAL STAND19 ARDS.—A nursing facility, whether freestanding

20 or hospital-based, must operate and provide

21 services in compliance with all applicable Fed22 eral, State, and local laws and regulations (in23 cluding the requirements of section 1124) and

24 with accepted professional standards and prin-
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1 ciples which apply to professionals providing

2 services in such a facility.

3 ‘‘(B) OTHER.—A nursing facility must

4 meet such other requirements relating to the

5 health and safety of residents or relating to the

6 physical facilities thereof as the Secretary may

7 find necessary.

8 ‘‘(e) STATE REQUIREMENTS RELATING TO NURSING

9 FACILITY REQUIREMENTS.—A State with a State plan

10 under this title shall provide for the following:

11 ‘‘(1) SPECIFICATION AND REVIEW OF NURSE

12 AIDE TRAINING AND COMPETENCY EVALUATION

13 PROGRAMS AND OF NURSE AIDE COMPETENCY EVAL14 UATION PROGRAMS.—The State must—

15 ‘‘(A) specify those training and competency

16 evaluation programs, and those competency

17 evaluation programs, that the State approves

18 for purposes of subsection (b)(5) and that meet

19 the requirements established under subsection

20 (f)(2), and

21 ‘‘(B) provide for the review and reapproval

22 of such programs, at a frequency and using a

23 methodology consistent with the requirements

24 established under subsection (f)(2)(A)(iii).

25 ‘‘(2) NURSE AIDE REGISTRY.—
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1 ‘‘(A) IN GENERAL.—The State shall estab2 lish and maintain a registry of all individuals

3 who have satisfactorily completed a nurse aide

4 training and competency evaluation program, or

5 a nurse aide competency evaluation program,

6 approved under paragraph (1) in the State, or

7 any individual described in subsection

8 (f)(2)(B)(ii) or in subparagraph (B), (C), or

9 (D) of section 6901(b)(4) of the Omnibus

10 Budget Reconciliation Act of 1989.

11 ‘‘(B) INFORMATION IN REGISTRY.—The

12 registry under subparagraph (A) shall provide

13 (in accordance with regulations of the Sec14 retary) for the inclusion of specific documented

15 findings by a State under subsection (g)(1)(C)

16 of resident neglect or abuse or misappropriation

17 of resident property involving an individual list18 ed in the registry, as well as any brief state19 ment of the individual disputing the findings.

20 The State shall make available to the public in21 formation in the registry. In the case of inquir22 ies to the registry concerning an individual list23 ed in the registry, any information disclosed

24 concerning such a finding shall also include dis25 closure of any such statement in the registry re-
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1 lating to the finding or a clear and accurate

2 summary of such a statement.

3 ‘‘(C) PROHIBITION AGAINST CHARGES.—A

4 State may not impose any charges on a nurse

5 aide relating to the registry established and

6 maintained under subparagraph (A).

7 ‘‘(3) STATE APPEALS PROCESS FOR TRANSFERS

8 AND DISCHARGES.—The State must provide for a

9 fair mechanism, meeting the guidelines established

10 under subsection (f)(3), for hearing appeals on

11 transfers and discharges of residents of such facili12 ties.

13 ‘‘(4) NURSING FACILITY ADMINISTRATOR

14 STANDARDS.—The State must implement and en15 force the nursing facility administrator standards

16 developed under subsection (f)(4) respecting the

17 qualification of administrators of nursing facilities.

18 Any such standards promulgated shall apply to ad19 ministrators of hospital-based facilities as well as ad20 ministrators of freestanding facilities.

21 ‘‘(5) SPECIFICATION OF RESIDENT ASSESSMENT

22 INSTRUMENT.—The State shall specify the instru23 ment to be used by nursing facilities in the State in

24 complying with the requirement of subsection

25 (b)(3)(A)(iii). Such instrument shall be—
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1 (A) one of the instruments designated

2 under subsection (f)(6)(B), or

3 (B) an instrument which the Secretary has

4 approved as being consistent with the minimum

5 data set of core elements, common definitions,

6 and utilization guidelines specified by the Sec7 retary under subsection (f)(6)(A).

8 ‘‘(6) NOTICE OF RIGHTS.—Each State shall de9 velop (and periodically update) a written notice of

10 the rights and obligations of residents of nursing fa11 cilities (and spouses of such residents) under this

12 title.

13 ‘‘(7) STATE REQUIREMENTS FOR

14 PREADMISSION SCREENING AND RESIDENT RE15 VIEW.—

16 ‘‘(A) PREADMISSION SCREENING.—

17 ‘‘(i) IN GENERAL.—The State must

18 have in effect a preadmission screening

19 program, for identifying mentally ill and

20 mentally retarded individuals (as defined

21 in subparagraph (B)) who are admitted to

22 nursing facilities and for determining

23 whether they require the level of services of

24 such a facility.
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1 ‘‘(ii) STATE REQUIREMENT FOR RESI2 DENT REVIEW.—The State shall notify the

3 State mental health authority or the State

4 mental retardation or developmental dis5 ability authority, as appropriate, of the in6 dividuals so identified.

7 ‘‘(B) DEFINITIONS.—In this paragraph:

8 ‘‘(i) An individual is considered to be

9 ‘mentally ill’ if the individual has a serious

10 mental illness (as defined by the Secretary

11 in consultation with the National Institute

12 of Mental Health) and does not have a pri13 mary diagnosis of dementia (including Alz14 heimer’s disease or a related disorder) or a

15 diagnosis (other than a primary diagnosis)

16 of dementia and a primary diagnosis that

17 is not a serious mental illness.

18 ‘‘(ii) An individual is considered to be

19 ‘mentally retarded’ if the individual is

20 mentally retarded or a person with a relat21 ed condition.

22 ‘‘(f) RESPONSIBILITIES RELATING TO NURSING FA23 CILITY REQUIREMENTS.—

24 ‘‘(1) GENERAL RESPONSIBILITY.—It is the duty

25 and responsibility of the Secretary to assure that re-
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1 quirements which govern the provision of care in

2 nursing facilities under State plans approved under

3 this title, and the enforcement of such requirements,

4 are adequate to protect the health, safety, welfare,

5 and rights of residents and to promote the effective

6 and efficient use of public moneys.

7 ‘‘(2) REQUIREMENTS FOR NURSE AIDE TRAIN8 ING AND COMPETENCY EVALUATION PROGRAMS AND

9 FOR NURSE AIDE COMPETENCY EVALUATION PRO10 GRAMS.—

11 ‘‘(A) IN GENERAL.—For purposes of sub12 sections (b)(5) and (e)(1)(A), the Secretary

13 shall establish—

14 ‘‘(i) requirements for the approval of

15 nurse aide training and competency evalua16 tion programs, including requirements re17 lating to (I) the areas to be covered in

18 such a program (including at least basic

19 nursing skills, personal care skills, recogni20 tion of mental health and social service

21 needs, care of cognitively impaired resi22 dents, basic restorative services, and resi23 dents’ rights) and content of the curricu24 lum, (II) minimum hours of initial and on25 going training and retraining (including
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1 not less than 75 hours in the case of initial

2 training), (III) qualifications of instruc3 tors, and (IV) procedures for determina4 tion of competency;

5 ‘‘(ii) requirements for the approval of

6 nurse aide competency evaluation pro7 grams, including requirement relating to

8 the areas to be covered in such a program,

9 including at least basic nursing skills, per10 sonal care skills, recognition of mental

11 health and social service needs, care of

12 cognitively impaired residents, basic restor13 ative services, and residents’ rights, and

14 procedures for determination of com15 petency;

16 ‘‘(iii) requirements respecting the

17 minimum frequency and methodology to be

18 used by a State in reviewing such pro19 grams’ compliance with the requirements

20 for such programs; and

21 ‘‘(iv) requirements, under both such

22 programs, that—

23 ‘‘(I) provide procedures for deter24 mining competency that permit a

25 nurse aide, at the nurse aide’s option,
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1 to establish competency through pro2 cedures or methods other than the

3 passing of a written examination and

4 to have the competency evaluation

5 conducted at the nursing facility at

6 which the aide is (or will be) employed

7 (unless the facility is described in sub8 paragraph (B)(iii)(I)),

9 ‘‘(II) prohibit the imposition on a

10 nurse aide who is employed by (or

11 who has received an offer of employ12 ment from) a facility on the date on

13 which the aide begins either such pro14 gram of any charges (including any

15 charges for textbooks and other re16 quired course materials and any

17 charges for the competency evalua18 tion) for either such program, and

19 ‘‘(III) in the case of a nurse aide

20 not described in subclause (II) who is

21 employed by (or who has received an

22 offer of employment from) a facility

23 not later than 12 months after com24 pleting either such program, the State

25 shall provide for the reimbursement of
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1 costs incurred in completing such pro2 gram on a prorata basis during the

3 period in which the nurse aide is so

4 employed.

5 ‘‘(B) APPROVAL OF CERTAIN PROGRAMS.—

6 Such requirements—

7 ‘‘(i) may permit approval of programs

8 offered by or in facilities, as well as outside

9 facilities (including employee organiza10 tions);

11 ‘‘(ii) shall permit a State to find that

12 an individual who has completed (before

13 July 1, 1989) a nurse aide training and

14 competency evaluation program shall be

15 deemed to have completed such a program

16 approved under subsection (b)(5) if the

17 State determines that, at the time the pro18 gram was offered, the program met the re19 quirements for approval under such para20 graph; and

21 ‘‘(iii) shall prohibit approval of such a

22 program—

23 ‘‘(I) offered by or in a nursing

24 facility which, within the previous 2

25 years—
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1 ‘‘(a) has operated under a

2 waiver under subsection

3 (b)(4)(C)(ii) that was granted on

4 the basis of a demonstration that

5 the facility is unable to provide

6 the nursing care required under

7 subsection (b)(4)(C)(i) for a pe8 riod in excess of 48 hours during

9 a week;

10 ‘‘(b) has been subject to an

11 extended (or partial extended)

12 survey under section

13 1819(g)(2)(B)(i) or subsection

14 (g)(2)(B)(i); or

15 ‘‘(c) has been assessed a

16 civil money penalty described in

17 section 1819(h)(2)(B)(ii) or sub18 section (h)(2)(A)(ii) of not less

19 than $5,000, or has been subject

20 to a remedy described in sub21 section (h)(1)(B)(i), clauses (i),

22 (iii), or (iv) of subsection

23 (h)(2)(A), clauses (i) or (iii) of

24 section 1819(h)(2)(B), or section

25 1819(h)(4), or
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1 ‘‘(II) offered by or in a nursing

2 facility unless the State makes the de3 termination, upon an individual’s com4 pletion of the program, that the indi5 vidual is competent to provide nursing

6 and nursing-related services in nurs7 ing facilities.

8 A State may not delegate (through sub9 contract or otherwise) its responsibility

10 under clause (iii)(II) to the nursing facil11 ity.

12 ‘‘(3) FEDERAL GUIDELINES FOR STATE AP13 PEALS PROCESS FOR TRANSFERS AND DIS14 CHARGES.—For purposes of subsections

15 (c)(2)(B)(iii) and (e)(3), the Secretary shall estab16 lish guidelines for minimum standards which State

17 appeals processes under subsection (e)(3) must meet

18 to provide a fair mechanism for hearing appeals on

19 transfers and discharges of residents from nursing

20 facilities.

21 ‘‘(4) QUALIFICATION OF ADMINISTRATORS.—

22 For purposes of subsections (d)(1)(C) and (e)(4),

23 the Secretary shall develop standards to be applied

24 in assuring the qualifications of administrators of

25 nursing facilities. Any such standards must apply to
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1 administrators of hospital-based facilities as well as

2 administrators of freestanding facilities.

3 ‘‘(5) CRITERIA FOR ADMINISTRATION.—The

4 Secretary shall establish criteria for assessing a

5 nursing facility’s compliance with the requirement of

6 subsection (d)(1) with respect to—

7 ‘‘(A) its governing body and management,

8 ‘‘(B) agreements with hospitals regarding

9 transfers of residents to and from the hospitals

10 and to and from other nursing facilities,

11 ‘‘(C) disaster preparedness,

12 ‘‘(D) direction of medical care by a physi13 cian,

14 ‘‘(E) laboratory and radiological services,

15 ‘‘(F) clinical records, and

16 ‘‘(G) resident and advocate participation.

17 ‘‘(6) SPECIFICATION OF RESIDENT ASSESSMENT

18 DATA SET AND INSTRUMENTS.—The Secretary

19 shall—

20 ‘‘(A) specify a minimum data set of core

21 elements and common definitions for use by

22 nursing facilities in conducting the assessments

23 required under subsection (b)(3), and establish

24 guidelines for utilization of the data set; and
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1 ‘‘(B) designate one or more instruments

2 which are consistent with the specification made

3 under subparagraph (A) and which a State may

4 specify under subsection (e)(5)(A) for use by

5 nursing facilities in complying with the require6 ments of subsection (b)(3)(A)(iii).

7 ‘‘(7) LIST OF ITEMS AND SERVICES FURNISHED

8 IN NURSING FACILITIES NOT CHARGEABLE TO THE

9 PERSONAL FUNDS OF A RESIDENT.—The Secretary

10 shall issue regulations that define those costs which

11 may be charged to the personal funds of residents

12 in nursing facilities who are individuals receiving

13 medical assistance with respect to nursing facility

14 services under this title and those costs which are to

15 be included in the payment amount under this title

16 for nursing facility services.

17 ‘‘(8) CRITERIA FOR MONITORING STATE WAIV18 ERS.—The Secretary shall develop criteria and pro19 cedures for monitoring State performances in grant20 ing waivers pursuant to subsection (b)(4)(C)(ii).

21 ‘‘(g) SURVEY AND CERTIFICATION PROCESS.—

22 ‘‘(1) STATE AND FEDERAL RESPONSIBILITY.—

23 ‘‘(A) IN GENERAL.—Under each State plan

24 under this title, the State shall be responsible

25 for certifying, in accordance with surveys con-
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1 ducted under paragraph (2), the compliance of

2 nursing facilities (other than facilities of the

3 State) with the requirements of subsections (b),

4 (c), and (d). The Secretary shall be responsible

5 for certifying, in accordance with surveys con6 ducted under paragraph (2), the compliance of

7 State nursing facilities with the requirements of

8 such subsections.

9 ‘‘(B) EDUCATIONAL PROGRAM.—Each

10 State shall conduct periodic educational pro11 grams for the staff and residents (and their

12 representatives) of nursing facilities in order to

13 present current regulations, procedures, and

14 policies under this section.

15 ‘‘(C) INVESTIGATION OF ALLEGATIONS OF

16 RESIDENT NEGLECT AND ABUSE AND MIS17 APPROPRIATION OF RESIDENT PROPERTY.—The

18 State shall provide, through the agency respon19 sible for surveys and certification of nursing fa20 cilities under this subsection, for a process for

21 the receipt and timely review and investigation

22 of allegations of neglect and abuse and mis23 appropriation of resident property by a nurse

24 aide of a resident in a nursing facility or by an25 other individual used by the facility in providing
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1 services to such a resident. The State shall,

2 after notice to the individual involved and a rea3 sonable opportunity for a hearing for the indi4 vidual to rebut allegations, make a finding as to

5 the accuracy of the allegations. If the State

6 finds that a nurse aide has neglected or abused

7 a resident or misappropriated resident property

8 in a facility, the State shall notify the nurse

9 aide and the registry of such finding. If the

10 State finds that any other individual used by

11 the facility has neglected or abused a resident

12 or misappropriated resident property in a facil13 ity, the State shall notify the appropriate licen14 sure authority. A State shall not make a find15 ing that an individual has neglected a resident

16 if the individual demonstrates that such neglect

17 was caused by factors beyond the control of the

18 individual.

19 ‘‘(2) SURVEYS.—

20 ‘‘(A) ANNUAL STANDARD SURVEY.—

21 ‘‘(i) IN GENERAL.—Each nursing fa22 cility shall be subject to a standard survey,

23 to be conducted without any prior notice to

24 the facility. Any individual who notifies (or

25 causes to be notified) a nursing facility of
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1 the time or date on which such a survey is

2 scheduled to be conducted is subject to a

3 civil money penalty of not to exceed

4 $2,000. The provisions of section 1128A

5 (other than subsections (a) and (b)) shall

6 apply to a civil money penalty under the

7 previous sentence in the same manner as

8 such provisions apply to a penalty or pro9 ceeding under section 1128A(a). The Sec10 retary shall review each State’s procedures

11 for scheduling and conduct of standard

12 surveys to assure that the State has taken

13 all reasonable steps to avoid giving notice

14 of such a survey through the scheduling

15 procedures and the conduct of the surveys

16 themselves.

17 ‘‘(ii) CONTENTS.—Each standard sur18 vey shall include, for a case-mix stratified

19 sample of residents—

20 ‘‘(I) a survey of the quality of

21 care furnished, as measured by indica22 tors of medical, nursing, and rehabili23 tative care, dietary and nutrition serv24 ices, activities and social participation,
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1 and sanitation, infection control, and

2 the physical environment,

3 ‘‘(II) written plans of care pro4 vided under subsection (b)(2) and an

5 audit of the residents’ assessments

6 under subsection (b)(3) to determine

7 the accuracy of such assessments and

8 the adequacy of such plans of care,

9 and

10 ‘‘(III) a review of compliance

11 with residents’ rights under sub12 section (c).

13 ‘‘(iii) FREQUENCY.—

14 ‘‘(I) IN GENERAL.—Each nursing

15 facility shall be subject to a standard

16 survey not later than 15 months after

17 the date of the previous standard sur18 vey conducted under this subpara19 graph. The statewide average interval

20 between standard surveys of a nursing

21 facility shall not exceed 12 months.

22 ‘‘(II) SPECIAL SURVEYS.—If not

23 otherwise conducted under subclause

24 (I), a standard survey (or an abbre25 viated standard survey) may be con-
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•HR 3507 IH

1 ducted within 2 months of any change

2 of ownership, administration, manage3 ment of a nursing facility, or director

4 of nursing in order to determine

5 whether the change has resulted in

6 any decline in the quality of care fur7 nished in the facility.

8 ‘‘(B) EXTENDED SURVEYS.—

9 ‘‘(i) IN GENERAL.—Each nursing fa10 cility which is found, under a standard sur11 vey, to have provided substandard quality

12 of care shall be subject to an extended sur13 vey. Any other facility may, at the Sec14 retary’s or State’s discretion, be subject to

15 such an extended survey (or a partial ex16 tended survey).

17 ‘‘(ii) TIMING.—The extended survey

18 shall be conducted immediately after the

19 standard survey (or, if not practicable, not

20 later than 2 weeks after the date of com21 pletion of the standard survey).

22 ‘‘(iii) CONTENTS.—In such an ex23 tended survey, the survey team shall review

24 and identify the policies and procedures

25 which produced such substandard quality
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•HR 3507 IH

1 of care and shall determine whether the fa2 cility has complied with all the require3 ments described in subsections (b), (c),

4 and (d). Such review shall include an ex5 pansion of the size of the sample of resi6 dents’ assessments reviewed and a review

7 of the staffing, of in-service training, and,

8 if appropriate, of contracts with consult9 ants.

10 ‘‘(iv) CONSTRUCTION.—Nothing in

11 this paragraph shall be construed as re12 quiring an extended or partial extended

13 survey as a prerequisite to imposing a

14 sanction against a facility under subsection

15 (h) on the basis of findings in a standard

16 survey.

17 ‘‘(C) SURVEY PROTOCOL.—Standard and

18 extended surveys shall be conducted—

19 ‘‘(i) based upon the protocol which the

20 Secretary has developed, tested, and vali21 dated, as of the date of the enactment of

22 this title, and

23 ‘‘(ii) by individuals, of a survey team,

24 who meet such minimum qualifications as

25 the Secretary establishes.
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1 ‘‘(D) CONSISTENCY OF SURVEYS.—Each

2 State shall implement programs to measure and

3 reduce inconsistency in the application of sur4 vey results among surveyors.

5 ‘‘(E) SURVEY TEAMS.—

6 ‘‘(i) IN GENERAL.—Surveys under

7 this subsection shall be conducted by a

8 multidisciplinary team of professionals (in9 cluding a registered professional nurse).

10 ‘‘(ii) PROHIBITION OF CONFLICTS OF

11 INTEREST.—A State may not use as a

12 member of a survey team under this sub13 section an individual who is serving (or has

14 served within the previous 2 years) as a

15 member of the staff of, or as a consultant

16 to, the facility surveyed respecting compli17 ance with the requirements of subsections

18 (b), (c), and (d), or who has a personal or

19 familial financial interest in the facility

20 being surveyed.

21 ‘‘(iii) TRAINING.——The Secretary

22 shall provide for the comprehensive train23 ing of State and Federal surveyors in the

24 conduct of standard and extended surveys

25 under this subsection, including the audit-
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1 ing of resident assessments and plans of

2 care. No individual shall serve as a mem3 ber of a survey team unless the individual

4 has successfully completed a training and

5 testing program in survey and certification

6 techniques that has been approved by the

7 Secretary.

8 ‘‘(3) VALIDATION SURVEYS.—

9 ‘‘(A) IN GENERAL.—The Secretary shall

10 conduct onsite surveys of a representative sam11 ple of nursing facilities in each State, within 2

12 months of the date of surveys conducted under

13 paragraph (2) by the State, in a sufficient num14 ber to allow inferences about the adequacies of

15 each State’s surveys conducted under para16 graph (2). In conducting such surveys, the Sec17 retary shall use the same survey protocols as

18 the State is required to use under paragraph

19 (2). If the State has determined that an indi20 vidual nursing facility meets the requirements

21 of subsections (b), (c), and (d), but the Sec22 retary determines that the facility does not

23 meet such requirements, the Secretary’s deter24 mination as to the facility’s noncompliance with
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•HR 3507 IH

1 such requirements is binding and supersedes

2 that of the State survey.

3 ‘‘(B) SCOPE.—With respect to each State,

4 the Secretary shall conduct surveys under sub5 paragraph (A) each year with respect to at least

6 5 percent of the number of nursing facilities

7 surveyed by the State in the year, but in no

8 case less than 5 nursing facilities in the State.

9 ‘‘(C) REDUCTION IN ADMINISTRATIVE

10 COSTS FOR SUBSTANDARD PERFORMANCE.—If

11 the Secretary finds, on the basis of such sur12 veys, that a State has failed to perform surveys

13 as required under paragraph (2) or that a

14 State’s survey and certification performance

15 otherwise is not adequate, the Secretary may

16 provide for the training of survey teams in the

17 State and shall provide for a reduction of the

18 payment otherwise made to the State under sec19 tion 1512(a)(3)(C) with respect to a quarter

20 equal to 33 percent multiplied by a fraction, the

21 denominator of which is equal to the total num22 ber of residents in nursing facilities surveyed by

23 the Secretary that quarter and the numerator

24 of which is equal to the total number of resi25 dents in nursing facilities which were found
1023

•HR 3507 IH

1 pursuant to such surveys to be not in compli2 ance with any of the requirements of sub3 sections (b), (c), and (d). A State that is dissat4 isfied with the Secretary’s findings under this

5 subparagraph may obtain reconsideration and

6 review of the findings under section 1116 in the

7 same manner as a State may seek reconsider8 ation and review under that section of the Sec9 retary’s determination under section

10 1116(a)(1).

11 ‘‘(D) SPECIAL SURVEYS OF COMPLI12 ANCE.—Where the Secretary has reason to

13 question the compliance of a nursing facility

14 with any of the requirements of subsections (b),

15 (c), and (d), the Secretary may conduct a sur16 vey of the facility and, on the basis of that sur17 vey, make independent and binding determina18 tions concerning the extent to which the nurs19 ing facility meets such requirements.

20 ‘‘(4) INVESTIGATION OF COMPLAINTS AND MON21 ITORING NURSING FACILITY COMPLIANCE.—Each

22 State shall maintain procedures and adequate staff

23 to—

24 ‘‘(A) investigate complaints of violations of

25 requirements by nursing facilities, and
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•HR 3507 IH

1 ‘‘(B) monitor, on-site, on a regular, as

2 needed basis, a nursing facility’s compliance

3 with the requirements of subsections (b), (c),

4 and (d), if—

5 ‘‘(i) the facility has been found not to

6 be in compliance with such requirements

7 and is in the process of correcting defi8 ciencies to achieve such compliance;

9 ‘‘(ii) the facility was previously found

10 not to be in compliance with such require11 ments, has corrected deficiencies to achieve

12 such compliance, and verification of contin13 ued compliance is indicated; or

14 ‘‘(iii) the State has reason to question

15 the compliance of the facility with such re16 quirements.

17 A State may maintain and utilize a specialized team

18 (including an attorney, an auditor, and appropriate

19 health care professionals) for the purpose of identi20 fying, surveying, gathering and preserving evidence,

21 and carrying out appropriate enforcement actions

22 against substandard nursing facilities.

23 ‘‘(5) DISCLOSURE OF RESULTS OF INSPECTIONS

24 AND ACTIVITIES.—
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1 ‘‘(A) PUBLIC INFORMATION.—Each State,

2 and the Secretary, shall make available to the

3 public—

4 ‘‘(i) information respecting all surveys

5 and certifications made respecting nursing

6 facilities, including statements of defi7 ciencies, within 14 calendar days after

8 such information is made available to those

9 facilities, and approved plans of correction,

10 ‘‘(ii) copies of cost reports of such fa11 cilities filed under this title or under title

12 XVIII,

13 ‘‘(iii) copies of statements of owner14 ship under section 1124, and

15 ‘‘(iv) information disclosed under sec16 tion 1126.

17 ‘‘(B) NOTICE TO OMBUDSMAN.—Each

18 State shall notify the State long-term care om19 budsman (established under title III or VII of

20 the Older Americans Act of 1965 in accordance

21 with section 712 of the Act) of the State’s find22 ings of noncompliance with any of the require23 ments of subsections (b), (c), and (d), or of any

24 adverse action taken against a nursing facility

25 under paragraphs (1), (2), or (3) of subsection
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1 (h), with respect to a nursing facility in the

2 State.

3 ‘‘(C) NOTICE TO PHYSICIANS AND NURS4 ING FACILITY ADMINISTRATOR LICENSING

5 BOARD.—If a State finds that a nursing facility

6 has provided substandard quality of care, the

7 State shall notify—

8 ‘‘(i) the attending physician of each

9 resident with respect to which such finding

10 is made, and

11 ‘‘(ii) any State board responsible for

12 the licensing of the nursing facility admin13 istrator of the facility.

14 ‘‘(D) ACCESS TO FRAUD CONTROL

15 UNITS.—Each State shall provide its State

16 fraud and abuse control unit (established under

17 section 1554) with access to all information of

18 the State agency responsible for surveys and

19 certifications under this subsection.

20 ‘‘(h) ENFORCEMENT PROCESS.—

21 ‘‘(1) IN GENERAL.—If a State finds, on the

22 basis of a standard, extended, or partial extended

23 survey under subsection (g)(2) or otherwise, that a

24 nursing facility no longer meets a requirement of

25 subsection (b), (c), or (d)—
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1 ‘‘(A) the State shall require the facility to

2 correct the deficiency involved;

3 ‘‘(B) if the State finds that the facility’s

4 deficiencies immediately jeopardize the health

5 or safety of its residents, the State shall take

6 immediate action to remove the jeopardy and

7 correct the deficiencies through the remedy

8 specified in paragraph (2)(A)(iii), or terminate

9 the facility’s participation under the State plan

10 and may provide, in addition, for one or more

11 of the other remedies described in paragraph

12 (2); and

13 ‘‘(C) if the State finds that the facility’s

14 deficiencies do not immediately jeopardize the

15 health or safety of its residents, the State

16 may—

17 ‘‘(i) terminate the facility’s participa18 tion under the State plan,

19 ‘‘(ii) provide for one or more of the

20 remedies described in paragraph (2), or

21 ‘‘(iii) do both.

22 Nothing in this paragraph shall be construed as re23 stricting the remedies available to a State to remedy

24 a nursing facility’s deficiencies. If a State finds that

25 a nursing facility meets the requirements of sub-
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•HR 3507 IH

1 sections (b), (c), and (d), but, as of a previous pe2 riod, did not meet such requirements, the State may

3 provide for a civil money penalty under paragraph

4 (2)(A)(ii) for the days in which it finds that the fa5 cility was not in compliance with such requirements.

6 ‘‘(2) SPECIFIED REMEDIES.—

7 ‘‘(A) LISTING.—Except as provided in sub8 paragraph (B), each State shall establish by law

9 (whether statute or regulation) at least the fol10 lowing remedies:

11 ‘‘(i) Denial of payment under the

12 State plan with respect to any individual

13 admitted to the nursing facility involved

14 after such notice to the public and to the

15 facility as may be provided for by the

16 State.

17 ‘‘(ii) A civil money penalty assessed

18 and collected, with interest, for each day in

19 which the facility is or was out of compli20 ance with a requirement of subsection (b),

21 (c), or (d). Funds collected by a State as

22 a result of imposition of such a penalty (or

23 as a result of the imposition by the State

24 of a civil money penalty for activities de25 scribed in subsections (b)(3)(B)(ii)(I),
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•HR 3507 IH

1 (b)(3)(B)(ii)(II), or (g)(2)(A)(i)) shall be

2 applied to the protection of the health or

3 property of residents of nursing facilities

4 that the State or the Secretary finds defi5 cient, including payment for the costs of

6 relocation of residents to other facilities,

7 maintenance of operation of a facility

8 pending correction of deficiencies or clo9 sure, and reimbursement of residents for

10 personal funds lost.

11 ‘‘(iii) The appointment of temporary

12 management to oversee the operation of

13 the facility and to assure the health and

14 safety of the facility’s residents, where

15 there is a need for temporary management

16 while—

17 ‘‘(I) there is an orderly closure of

18 the facility, or

19 ‘‘(II) improvements are made in

20 order to bring the facility into compli21 ance with all the requirements of sub22 sections (b), (c), and (d).

23 The temporary management under this

24 clause shall not be terminated under sub25 clause (II) until the State has determined
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•HR 3507 IH

1 that the facility has the management capa2 bility to ensure continued compliance with

3 all the requirements of subsections (b), (c),

4 and (d).

5 ‘‘(iv) The authority, in the case of an

6 emergency, to close the facility, to transfer

7 residents in that facility to other facilities,

8 or both.

9 The State also shall specify criteria, as to when

10 and how each of such remedies is to be applied,

11 the amounts of any fines, and the severity of

12 each of these remedies, to be used in the impo13 sition of such remedies. Such criteria shall be

14 designed so as to minimize the time between

15 the identification of violations and final imposi16 tion of the remedies and shall provide for the

17 imposition of incrementally more severe fines

18 for repeated or uncorrected deficiencies. In ad19 dition, the State may provide for other specified

20 remedies, such as directed plans of correction.

21 ‘‘(B) GUIDANCE AND ALTERNATIVE REM22 EDIES.—(i) The Secretary shall provide through

23 regulations guidance to States in establishing

24 remedies under clauses (i) through (iv) of sub25 paragraph (A).
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1 ‘‘(ii) A State may establish alternative

2 remedies (other than termination of participa3 tion) other than those described in clauses (i)

4 through (iv) of subparagraph (A), if the State

5 demonstrates to the Secretary’s satisfaction

6 that the alternative remedies are as effective in

7 deterring noncompliance and correcting defi8 ciencies as those described in such subpara9 graph.

10 ‘‘(C) ASSURING PROMPT COMPLIANCE.—If

11 a nursing facility has not complied with any of

12 the requirements of subsections (b), (c), and

13 (d), within 3 months after the date the facility

14 is found to be out of compliance with such re15 quirements, the State shall impose the remedy

16 described in subparagraph (A)(i) for all individ17 uals who are admitted to the facility after such

18 date.

19 ‘‘(D) REPEATED NONCOMPLIANCE.—In the

20 case of a nursing facility which, on 3 consecu21 tive standard surveys conducted under sub22 section (g)(2), has been found to have provided

23 substandard quality of care, the State shall (re24 gardless of what other remedies are provided)—
1032

•HR 3507 IH

1 ‘‘(i) impose the remedy described in

2 subparagraph (A)(i), and

3 ‘‘(ii) monitor the facility under sub4 section (g)(4)(B),

5 until the facility has demonstrated, to the satis6 faction of the State, that it is in compliance

7 with the requirements of subsections (b), (c),

8 and (d), and that it will remain in compliance

9 with such requirements.

10 ‘‘(E) FUNDING.—The reasonable expendi11 tures of a State to provide for temporary man12 agement and other expenses associated with im13 plementing the remedies described in clauses

14 (iii) and (iv) of subparagraph (A) shall be con15 sidered, for purposes of section 1512(a)(3)(C),

16 to be necessary for the proper and efficient ad17 ministration of the State plan.

18 ‘‘(F) INCENTIVES FOR HIGH QUALITY

19 CARE.—In addition to the remedies specified in

20 this paragraph, a State may establish a pro21 gram to reward, through public recognition, in22 centive payments, or both, nursing facilities

23 that provide the highest quality care to resi24 dents who are entitled to medical assistance

25 under this title. For purposes of section
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1 1512(a)(3)(C), proper expenses incurred by a

2 State in carrying out such a program shall be

3 considered to be expenses necessary for the

4 proper and efficient administration of the State

5 plan.

6 ‘‘(3) SECRETARIAL AUTHORITY.—

7 ‘‘(A) FOR STATE NURSING FACILITIES.—

8 With respect to a State nursing facility, the

9 Secretary shall have the authority and duties of

10 a State under this subsection, including the au11 thority to impose remedies described in clauses

12 (i), (ii), and (iii) of paragraph (2)(A). Nothing

13 in this subparagraph shall be construed as re14 stricting the remedies available to the Secretary

15 to remedy a nursing facility’s deficiencies.

16 ‘‘(B) OTHER NURSING FACILITIES.—With

17 respect to any other nursing facility in a State,

18 if the Secretary finds that a nursing facility no

19 longer meets a requirement of subsection (b),

20 (c), (d), or (e), and further finds that the facili21 ty’s deficiencies—

22 ‘‘(i) immediately jeopardize the health

23 or safety of its residents, the Secretary

24 shall take immediate action to remove the

25 jeopardy and correct the deficiencies
1034

•HR 3507 IH

1 through the remedy specified in subpara2 graph (C)(iii), or terminate the facility’s

3 participation under the State plan and

4 may provide, in addition, for one or more

5 of the other remedies described in subpara6 graph (C); or

7 ‘‘(ii) do not immediately jeopardize

8 the health or safety of its residents, the

9 Secretary may impose any of the remedies

10 described in subparagraph (C).

11 Nothing in this subparagraph shall be con12 strued as restricting the remedies available to

13 the Secretary to remedy a nursing facility’s de14 ficiencies. If the Secretary finds that a nursing

15 facility meets such requirements but, as of a

16 previous period, did not meet such require17 ments, the Secretary may provide for a civil

18 money penalty under subparagraph (C)(ii) for

19 the days on which he finds that the facility was

20 not in compliance with such requirements.

21 ‘‘(C) SPECIFIED REMEDIES.—The rem22 edies specified in this subparagraph are as fol23 lows:

24 ‘‘(i) DENIAL OF PAYMENT.—Denial of

25 any further payments to the State in ac-
1035

•HR 3507 IH

1 cordance with section 1529(f) for medical

2 assistance furnished by the facility to all

3 individuals in the facility or to individuals

4 admitted to the facility after the effective

5 date of the finding.

6 ‘‘(ii) AUTHORITY WITH RESPECT TO

7 CIVIL MONEY PENALTIES.—Imposition of a

8 civil money penalty against the facility in

9 an amount not to exceed $10,000 for each

10 day of noncompliance. The provisions of

11 section 1128A (other than subsections (a)

12 and (b)) shall apply to a civil money pen13 alty under the previous sentence in the

14 same manner as such provisions apply to a

15 penalty or proceeding under section

16 1128A(a).

17 ‘‘(iii) APPOINTMENT OF TEMPORARY

18 MANAGEMENT.—Appointment of tem19 porary management to oversee the oper20 ation of the facility and to assure the

21 health and safety of the facility’s residents,

22 where there is a need for temporary man23 agement while—

24 ‘‘(I) there is an orderly closure of

25 the facility, or
1036

•HR 3507 IH

1 ‘‘(II) improvements are made in

2 order to bring the facility into compli3 ance with all the requirements of sub4 sections (b), (c), and (d).

5 The temporary management under this

6 clause shall not be terminated under sub7 clause (II) until the Secretary has deter8 mined that the facility has the manage9 ment capability to ensure continued com10 pliance with all the requirements of sub11 sections (b), (c), and (d).

12 The Secretary shall specify criteria, as to when

13 and how each of such remedies is to be applied,

14 the amounts of any fines, and the severity of

15 each of these remedies, to be used in the impo16 sition of such remedies. Such criteria shall be

17 designed so as to minimize the time between

18 the identification of violations and final imposi19 tion of the remedies and shall provide for the

20 imposition of incrementally more severe fines

21 for repeated or uncorrected deficiencies. In ad22 dition, the Secretary may provide for other

23 specified remedies, such as directed plans of

24 correction.
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•HR 3507 IH

1 ‘‘(D) CONTINUATION OF PAYMENTS PEND2 ING REMEDIATION.—The Secretary may con3 tinue payments, over a period of not longer

4 than 6 months after the effective date of the

5 findings, under this title with respect to a nurs6 ing facility not in compliance with a require7 ment of subsection (b), (c), or (d), if—

8 ‘‘(i) the State survey agency finds

9 that it is more appropriate to take alter10 native action to assure compliance of the

11 facility with the requirements than to ter12 minate the certification of the facility,

13 ‘‘(ii) the State has submitted a plan

14 and timetable for corrective action to the

15 Secretary for approval and the Secretary

16 approves the plan of corrective action, and

17 ‘‘(iii) the State agrees to repay to the

18 Federal Government payments received

19 under this subparagraph if the corrective

20 action is not taken in accordance with the

21 approved plan and timetable.

22 The Secretary shall establish guidelines for ap23 proval of corrective actions requested by States

24 under this subparagraph.
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•HR 3507 IH

1 ‘‘(4) SPECIAL RULES REGARDING PAYMENTS TO

2 FACILITIES.—

3 ‘‘(A) CONTINUATION OF PAYMENTS PEND4 ING REMEDIATION.—The State or the Sec5 retary, as appropriate, may continue payments,

6 over a period of not longer than 6 months after

7 the effective date of the findings, under this

8 title with respect to a nursing facility not in

9 compliance with a requirement of subsection

10 (b), (c), or (d). The State may continue such

11 payments only if—

12 ‘‘(i) the State survey agency finds

13 that it is more appropriate to take alter14 native action to assure compliance of the

15 facility with the requirements than to ter16 minate the certification of the facility,

17 ‘‘(ii) the State has submitted a plan

18 and timetable for corrective action to the

19 Secretary for approval and the Secretary

20 approves the plan of corrective action, and

21 ‘‘(iii) the State agrees to repay to the

22 Federal Government payments received

23 under this subparagraph if the corrective

24 action is not taken in accordance with the

25 approved plan and timetable.
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•HR 3507 IH

1 The Secretary shall establish guidelines for ap2 proval of corrective actions requested by States

3 under this subparagraph.

4 ‘‘(B) EFFECTIVE PERIOD OF DENIAL OF

5 PAYMENT.—A finding to deny payment under

6 this subsection shall terminate when the State

7 or Secretary (as the case may be) finds that the

8 facility is in substantial compliance with all the

9 requirements of subsections (b), (c), and (d).

10 ‘‘(5) IMMEDIATE TERMINATION OF PARTICIPA11 TION FOR FACILITY WHERE STATE OR SECRETARY

12 FINDS NONCOMPLIANCE AND IMMEDIATE JEOP13 ARDY.—If either the State or the Secretary finds

14 that a nursing facility has not met a requirement of

15 subsection (b), (c), or (d), and finds that the failure

16 immediately jeopardizes the health or safety of its

17 residents, the State or the Secretary, respectively

18 shall notify the other of such finding, and the State

19 or the Secretary, respectively, shall take immediate

20 action to remove the jeopardy and correct the defi21 ciencies through the remedy specified in paragraph

22 (2)(A)(iii) or (3)(C)(iii), or terminate the facility’s

23 participation under the State plan. If the facility’s

24 participation in the State plan is terminated by ei25 ther the State or the Secretary, the State shall pro-
1040

•HR 3507 IH

1 vide for the safe and orderly transfer of the resi2 dents eligible under the State plan consistent with

3 the requirements of subsection (c)(2).

4 ‘‘(6) SPECIAL RULES WHERE STATE AND SEC5 RETARY DO NOT AGREE ON FINDING OF NON6 COMPLIANCE.—

7 ‘‘(A) STATE FINDING OF NONCOMPLIANCE

8 AND NO SECRETARIAL FINDING OF NONCOMPLI9 ANCE.—If the Secretary finds that a nursing

10 facility has met all the requirements of sub11 sections (b), (c), and (d), but a State finds that

12 the facility has not met such requirements and

13 the failure does not immediately jeopardize the

14 health or safety of its residents, the State’s

15 findings shall control and the remedies imposed

16 by the State shall be applied.

17 ‘‘(B) SECRETARIAL FINDING OF NON18 COMPLIANCE AND NO STATE FINDING OF NON19 COMPLIANCE.—If the Secretary finds that a

20 nursing facility has not met all the require21 ments of subsections (b), (c), and (d), and that

22 the failure does not immediately jeopardize the

23 health or safety of its residents, but the State

24 has not made such a finding, the Secretary—
1041

•HR 3507 IH

1 ‘‘(i) may impose any remedies speci2 fied in paragraph (3)(C) with respect to

3 the facility, and

4 ‘‘(ii) shall (pending any termination

5 by the Secretary) permit continuation of

6 payments in accordance with paragraph

7 (3)(D).

8 ‘‘(7) SPECIAL RULES FOR TIMING OF TERMI9 NATION OF PARTICIPATION WHERE REMEDIES OVER10 LAP.—If both the Secretary and the State find that

11 a nursing facility has not met all the requirements

12 of subsections (b), (c), and (d), and neither finds

13 that the failure immediately jeopardizes the health

14 or safety of its residents—

15 ‘‘(A)(i) if both find that the facility’s par16 ticipation under the State plan should be termi17 nated, the State’s timing of any termination

18 shall control so long as the termination date

19 does not occur later than 6 months after the

20 date of the finding to terminate;

21 ‘‘(ii) if the Secretary, but not the State,

22 finds that the facility’s participation under the

23 State plan should be terminated, the Secretary

24 shall (pending any termination by the Sec-
1042

•HR 3507 IH

1 retary) permit continuation of payments in ac2 cordance with paragraph (3)(D); or

3 ‘‘(iii) if the State, but not the Secretary,

4 finds that the facility’s participation under the

5 State plan should be terminated, the State’s de6 cision to terminate, and timing of such termi7 nation, shall control; and

8 ‘‘(B)(i) if the Secretary or the State, but

9 not both, establishes one or more remedies

10 which are additional or alternative to the rem11 edy of terminating the facility’s participation

12 under the State plan, such additional or alter13 native remedies shall also be applied, or

14 ‘‘(ii) if both the Secretary and the State

15 establish one or more remedies which are addi16 tional or alternative to the remedy of terminat17 ing the facility’s participation under the State

18 plan, only the additional or alternative remedies

19 of the Secretary shall apply.

20 ‘‘(8) CONSTRUCTION.—The remedies provided

21 under this subsection are in addition to those other22 wise available under Federal or State law and shall

23 not be construed as limiting such other remedies, in24 cluding any remedy available to an individual at

25 common law. The remedies described in clauses (i),
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1 (iii), and (iv) of paragraph (2)(A) may be imposed

2 during the pendency of any hearing. The provisions

3 of this subsection shall apply to a nursing facility (or

4 portion thereof) notwithstanding that the facility (or

5 portion thereof) also is a skilled nursing facility for

6 purposes of title XVIII.

7 ‘‘(9) SHARING OF INFORMATION.—Notwith8 standing any other provision of law, all information

9 concerning nursing facilities required by this section

10 to be filed with the Secretary or a State agency shall

11 be made available by such facilities to Federal or

12 State employees for purposes consistent with the ef13 fective administration of programs established under

14 this title and title XVIII, including investigations by

15 State fraud control units.

16 ‘‘(i) CONSTRUCTION.—Where requirements or obliga17 tions under this section are identical to those provided

18 under section 1819 of this Act, the fulfillment of those

19 requirements or obligations under section 1819 shall be

20 considered to be the fulfillment of the corresponding re21 quirements or obligations under this section.

22 ‘‘SEC. 1558. OTHER PROVISIONS PROMOTING PROGRAM IN23 TEGRITY.

24 ‘‘(a) PUBLIC ACCESS TO SURVEY RESULTS.—Each

25 State plan shall provide that upon completion of a survey
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1 of any health care facility or organization by a State agen2 cy to carry out the plan, the agency shall make public in

3 readily available form and place the pertinent findings of

4 the survey relating to the compliance of the facility or or5 ganization with requirements of law.

6 ‘‘(b) RECORD KEEPING.—Each State plan shall pro7 vide for agreements with persons or institutions providing

8 services under the plan under which the person or institu9 tion agrees—

10 ‘‘(1) to keep such records, including ledgers,

11 books, and original evidence of costs, as are nec12 essary to fully disclose the extent of the services pro13 vided to individuals receiving assistance under the

14 plan, and

15 ‘‘(2) to furnish the State agency with such in16 formation regarding any payments claimed by such

17 person or institution for providing services under the

18 plan, as the State agency may from time to time re19 quest.

20 ‘‘(c) QUALITY ASSURANCE.—Each State plan shall

21 provide a program to assure the quality of services pro22 vided under the plan, including such services provided to

23 individuals with chronic mental or physical illness.
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1 ‘‘PART E—GENERAL PROVISIONS

2 ‘‘SEC. 1571. DEFINITIONS.

3 ‘‘(a) MEDICAL ASSISTANCE.—For purposes of this

4 title, the term ‘medical assistance’ means payment of part

5 or all of the cost of any of the following, or assistance

6 in the purchase, in whole or in part, of health benefit cov7 erage that includes any of the following, for eligible low8 income individuals (as defined in subsection (b)) as speci9 fied under the State plan:

10 ‘‘(1) Inpatient hospital services.

11 ‘‘(2) Outpatient hospital services.

12 ‘‘(3) Physician services.

13 ‘‘(4) Surgical services.

14 ‘‘(5) Clinic services and other ambulatory

15 health care services.

16 ‘‘(6) Nursing facility services.

17 ‘‘(7) Intermediate care facility services for the

18 mentally retarded.

19 ‘‘(8) Prescription drugs and biologicals and the

20 administration of such drugs and biologicals, only if

21 such drugs and biologicals are not furnished for the

22 purpose of causing, or assisting in causing, the

23 death, suicide, euthanasia, or mercy killing of a per24 son.

25 ‘‘(9) Over-the-counter medications.
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1 ‘‘(10) Laboratory and radiological services.

2 ‘‘(11) Prepregnancy family planning services

3 and supplies.

4 ‘‘(12) Inpatient mental health services, includ5 ing services furnished in a State-operated mental

6 hospital and including residential or other 24-hour

7 therapeutically planned structured services.

8 ‘‘(13) Outpatient mental health services, includ9 ing services furnished in a State-operated mental

10 hospital and including community-based services.

11 ‘‘(14) Durable medical equipment and other

12 medically-related or remedial devices (such as pros13 thetic devices, implants, eyeglasses, hearing aids,

14 dental devices, and adaptive devices).

15 ‘‘(15) Disposable medical supplies.

16 ‘‘(16) Home and community-based health care

17 services and related supportive services (such as

18 home health nursing services, home health aide serv19 ices, personal care, assistance with activities of daily

20 living, chore services, day care services, respite care

21 services, training for family members, and minor

22 modifications to the home).

23 ‘‘(17) Community supported living arrange24 ments, assisted living arrangements, and transitional

25 living arrangements in the community.
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1 ‘‘(18) Nursing care services (such as nurse

2 practitioner services, nurse midwife services, ad3 vanced practice nurse services, private duty nursing

4 care, pediatric nurse services, and respiratory care

5 services) in a home, school, or other setting.

6 ‘‘(19) Abortion only if necessary to save the life

7 of the mother or if the pregnancy is the result of an

8 act of rape or incest.

9 ‘‘(20) Dental services.

10 ‘‘(21) Inpatient substance abuse treatment

11 services and residential substance abuse treatment

12 services.

13 ‘‘(22) Outpatient substance abuse treatment

14 services.

15 ‘‘(23) Case management services.

16 ‘‘(24) Care coordination services.

17 ‘‘(25) Physical therapy, occupational therapy,

18 and services for individuals with speech, hearing,

19 and language disorders.

20 ‘‘(26) Hospice care.

21 ‘‘(27) Any other medical, diagnostic, screening,

22 preventive, restorative, remedial, therapeutic, or re23 habilitative services (whether in a facility, home,

24 school, or other setting) if recognized by State law

25 and only if the service is—
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1 ‘‘(A) prescribed by or furnished by a physi2 cian or other licensed or registered practitioner

3 within the scope of practice as defined by State

4 law,

5 ‘‘(B) performed under the general super6 vision or at the direction of a physician, or

7 ‘‘(C) furnished by a health care facility

8 that is operated by a State or local government

9 or is licensed under State law and operating

10 within the scope of the license.

11 ‘‘(28) Premiums for private health care insur12 ance coverage, including private long-term care in13 surance coverage.

14 ‘‘(29) Medical transportation.

15 ‘‘(30) Medicare cost-sharing (as defined in sub16 section (c)).

17 ‘‘(31) Enabling services (such as transpor18 tation, translation, and outreach services) only if de19 signed to increase the accessibility of primary and

20 preventive health care services for eligible low-in21 come individuals.

22 ‘‘(32) Any other health care services or items

23 specified by the Secretary and not excluded under

24 this section.

25 ‘‘(b) ELIGIBLE LOW-INCOME INDIVIDUAL.—
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1 ‘‘(1) STATE PLAN ELIGIBILITY STANDARDS.—

2 ‘‘(A) IN GENERAL.—The term ‘eligible low3 income individual’ means an individual—

4 ‘‘(i) who has been determined eligible

5 by the State for medical assistance under

6 the State plan and is not an inmate of a

7 public institution (except as a patient in a

8 State psychiatric hospital), and

9 ‘‘(ii) whose family income (as deter10 mined under the plan) does not exceed a

11 percentage (specified in the State plan and

12 not to exceed 275 percent) of the poverty

13 line for a family of the size involved.

14 ‘‘(B) CONTINUTATION OF KATIE BECKETT

15 ELIGIBILITY.—At the option of a State, sub16 paragraph (A)(ii) shall not apply in the case of

17 an individual who—

18 ‘‘(i) is 18 years of age or younger and

19 qualifies as a disabled individual under sec20 tion 1614(a); and

21 ‘‘(ii) with respect to whom there has

22 been a determination by the State that—

23 ‘‘(I) the individual requires a

24 level of care provided in a hospital,
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1 nursing facility, or intermediate care

2 facility for the mentally retarded; and

3 ‘‘(II) it is appropriate to provide

4 such care for the individual outside

5 such an institution.

6 ‘‘(2) AMOUNT OF INCOME.—In determining the

7 amount of income under paragraph (1)(B), a State

8 may exclude costs incurred for medical care or other

9 types of remedial care recognized by the State.

10 ‘‘(3) COMPUTATION OF INCOME FOR CERTAIN

11 CHILDREN.—In determining the amount of family

12 income under paragraph (1)(B) in the case of a

13 child described in section 1501(a)(1)(F), the State

14 shall only count the income of the child and not that

15 of the family in which the child is placed.

16 ‘‘(c) MEDICARE COST-SHARING.—For purposes of

17 this title, the term ‘medicare cost-sharing’ means any of

18 the following:

19 ‘‘(1)(A) Premiums under section 1839.

20 ‘‘(B) Premiums under section 1818 or 1818A.

21 ‘‘(2) Coinsurance under title XVIII (including

22 coinsurance described in section 1813).

23 ‘‘(3) Deductibles established under title XVIII

24 (including those described in sections 1813 and

25 1833(b)).
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1 ‘‘(4) The difference between the amount that is

2 paid under section 1833(a) and the amount that

3 would be paid under such section if any reference to

4 ‘80 percent’ therein were deemed a reference to ‘100

5 percent’.

6 ‘‘(5) Premiums for enrollment of an individual

7 with an eligible organization under section 1876.

8 ‘‘(d) ADDITIONAL DEFINITIONS.—For purposes of

9 this title:

10 ‘‘(1) CHILD.—The term ‘child’ means an indi11 vidual under 19 years of age.

12 ‘‘(2) ELDERLY INDIVIDUAL.—The term ‘elderly

13 individual’ means an individual who has attained re14 tirement age, as defined under section 216(l)(1).

15 ‘‘(3) POVERTY LINE DEFINED.—The term ‘pov16 erty line’ has the meaning given such term in section

17 673(2) of the Community Services Block Grant Act

18 (42 U.S.C. 9902(2)), including any revision required

19 by such section.

20 ‘‘(4) PREGNANT WOMAN.—The term ‘pregnant

21 woman’ includes a woman during the 60-day period

22 beginning on the last day of the pregnancy.

23 ‘‘(e) EPSDT SERVICES.—In this title, the term

24 ‘EPSDT services’ means the following items and services:

25 ‘‘(1) Screening services—
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1 ‘‘(A) which are provided—

2 ‘‘(i) at intervals which meet reason3 able standards of medical and dental prac4 tice, as determined by the State after con5 sultation with recognized medical and den6 tal organizations involved in child health

7 care and, with respect to immunizations

8 under section 1501(a)(2)(G) in accordance

9 with the schedule referred to in such sec10 tion for pediatric vaccines, and

11 ‘‘(ii) at such other intervals, indicated

12 as medically necessary, to determine the

13 existence of certain physical or mental ill14 nesses or conditions; and

15 ‘‘(B) which shall at a minimum include—

16 ‘‘(i) a comprehensive health and devel17 opmental history (including assessment of

18 both physical and mental health develop19 ment),

20 ‘‘(ii) a comprehensive unclothed phys21 ical exam,

22 ‘‘(iii) appropriate immunizations (ac23 cording to the schedule referred to in sec24 tion 1501(a)(2)(G) for pediatric vaccines)

25 according to age and health history,
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1 ‘‘(iv) laboratory tests (including lead

2 blood level assessment appropriate for age

3 and risk factors), and

4 ‘‘(v) health education (including antic5 ipatory guidance).

6 ‘‘(2) Vision services—

7 ‘‘(A) which are provided—

8 ‘‘(i) at intervals which meet reason9 able standards of medical practice, as de10 termined by the State after consultation

11 with recognized medical organizations in12 volved in child health care, and

13 ‘‘(ii) at such other intervals, indicated

14 as medically necessary, to determine the

15 existence of a suspected illness or condi16 tion; and

17 ‘‘(B) which shall at a minimum include di18 agnosis and treatment for defects in vision, in19 cluding eyeglasses.

20 ‘‘(3) Dental services—

21 ‘‘(A) which are provided—

22 ‘‘(i) at intervals which meet reason23 able standards of dental practice, as deter24 mined by the State after consultation with
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1 recognized dental organizations involved in

2 child health care, and

3 ‘‘(ii) at such other intervals, indicated

4 as medically necessary, to determine the

5 existence of a suspected illness or condi6 tion; and

7 ‘‘(B) which shall at a minimum include re8 lief of pain and infections, restoration of teeth,

9 and maintenance of dental health.

10 ‘‘(4) Hearing services—

11 ‘‘(A) which are provided—

12 ‘‘(i) at intervals which meet reason13 able standards of medical practice, as de14 termined by the State after consultation

15 with recognized medical organizations in16 volved in child health care, and

17 ‘‘(ii) at such other intervals, indicated

18 as medically necessary, to determine the

19 existence of a suspected illness or condi20 tion; and

21 ‘‘(B) which shall at a minimum include di22 agnosis and treatment for defects in hearing,

23 including hearing aids.

24 ‘‘(f) CENTER AND CLINIC SERVICES.—In this title:
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1 ‘‘(1) RURAL HEALTH CLINIC RELATED DEFINI2 TIONS.—The terms ‘rural health clinic services’ and

3 ‘rural health clinic’ have the meanings given such

4 terms in section 1861(aa), except that (A) clause (ii)

5 of section 1861(aa)(2) shall not apply to such terms,

6 and (B) the physician arrangement required under

7 section 1861(aa)(2)(B) shall only apply with respect

8 to rural health clinic services and, with respect to

9 other ambulatory care services, the physician ar10 rangement required shall be only such as may be re11 quired under the State plan for those services.

12 ‘‘(2) FEDERALLY-QUALIFIED HEALTH CENTER

13 RELATED DEFINITIONS.—

14 ‘‘(A) SERVICES.—The term ‘Federally15 qualified health center services’ means services

16 of the type described in subparagraphs (A)

17 through (C) of section 1861(aa)(1) when fur18 nished to an individual as an patient of a Fed19 erally-qualified health center and, for this pur20 pose, any reference to a rural health clinic or a

21 physician described in section 1861(aa)(2)(B) is

22 deemed a reference to a Federally-qualified

23 health center or a physician at the center, re24 spectively.
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1 ‘‘(B) CENTER.—The term ‘Federally-quali2 fied health center’ means a entity which—

3 ‘‘(i) is receiving a grant under section

4 329, 330, 340, or 340A of the Public

5 Health Service Act,

6 ‘‘(ii)(I) is receiving funding from such

7 a grant under a contract with the recipient

8 of such a grant, and

9 ‘‘(II) meets the requirements to re10 ceive a grant under section 329, 330, 340,

11 or 340A of such Act,

12 ‘‘(iii) based on the recommendation of

13 the Health Resources and Services Admin14 istration within the Public Health Service,

15 is determined by the Secretary to meet the

16 requirements for receiving such a grant, or

17 ‘‘(iv) was treated by the Secretary, for

18 purposes of part B of title XVIII, as a

19 comprehensive Federally funded health

20 center as of January 1, 1990;

21 and includes an outpatient health program or

22 facility operated by a tribe or tribal organiza23 tion under the Indian Self-Determination Act

24 (Public Law 93-638) or by an urban Indian or25 ganization receiving funds under title V of the
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1 Indian Health Care Improvement Act for the

2 provision of primary health services. In apply3 ing clause (ii), the Secretary may waive any re4 quirement referred to in such clause for up to

5 2 years for good cause shown.

6 ‘‘(g) MEDICALLY-RELATED SERVICES.—In this title,

7 the term ‘medically-related services’ means services rea8 sonably related to, or in direct support of, the State’s at9 tainment of one or more of the strategic objectives and

10 performance goals established under section 1521, but

11 does not include items and services included on the list

12 under subsection (a).

13 ‘‘SEC. 1572. TREATMENT OF TERRITORIES.

14 ‘‘Notwithstanding any other requirement of this title,

15 the Secretary may waive or modify any requirement of this

16 title with respect to the medical assistance program for

17 a State other than the 50 States and the District of Co18 lumbia, other than a waiver of—

19 ‘‘(1) the applicable Federal medical assistance

20 percentage,

21 ‘‘(2) the limitation on total payments in a fiscal

22 year to the amount of the allotment under section

23 1511(c), or

24 ‘‘(3) the requirement that payment may be

25 made for medical assistance only with respect to
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1 amounts expended by the State for care and services

2 described in section 1571(a) and medically-related

3 services (as defined in section 1571(g)).

4 ‘‘SEC. 1573. DESCRIPTION OF TREATMENT OF INDIAN

5 HEALTH SERVICE FACILITIES.

6 ‘‘In the case of a State in which one or more facilities

7 of the Indian Health Service are located, the State plan

8 shall include a description of—

9 ‘‘(1) what provision (if any) has been made for

10 payment for items and services furnished by such fa11 cilities, and

12 ‘‘(2) the manner in which medical assistance for

13 low-income eligible individuals who are Indians will

14 be provided, as determined by the State in consulta15 tion with the appropriate Indian tribes and tribal or16 ganizations.

17 ‘‘SEC. 1574. APPLICATION OF CERTAIN GENERAL PROVI18 SIONS.

19 ‘‘The following sections in part A of title XI shall

20 apply to States under this title in the same manner as

21 they applied to a State under title XIX:

22 ‘‘(1) Section 1101(a)(1) (relating to definition

23 of State).
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1 ‘‘(2) Section 1116 (relating to administrative

2 and judicial review), but only insofar as consistent

3 with the provisions of part B.

4 ‘‘(3) Section 1124 (relating to disclosure of

5 ownership and related information).

6 ‘‘(4) Section 1126 (relating to disclosure of in7 formation about certain convicted individuals).

8 ‘‘(5) Section 1128B(d) (relating to criminal

9 penalties for certain additional charges).

10 ‘‘(6) Section 1132 (relating to periods within

11 which claims must be filed).

12 ‘‘SEC. 1575. OPTIONAL MASTER DRUG REBATE AGREE13 MENTS.

14 ‘‘(a) REQUIREMENT FOR MANUFACTURER TO ENTER

15 INTO AGREEMENT.—

16 ‘‘(1) IN GENERAL.—Pursuant to section

17 1513(f), in order for payment to be made to a State

18 under part B for medical assistance for covered out19 patient drugs of a manufacturer, the manufacturer

20 shall enter into and have in effect a master rebate

21 agreement described in subsection (b) with the Sec22 retary on behalf of States electing to participate in

23 the agreement.

24 ‘‘(2) COVERAGE OF DRUGS NOT COVERED

25 UNDER REBATE AGREEMENTS.—Nothing in this sec-
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1 tion shall be construed to prohibit a State in its dis2 cretion from providing coverage under its State plan

3 of a covered outpatient drug for which no rebate

4 agreement is in effect under this section.

5 ‘‘(3) EFFECT ON EXISTING AGREEMENTS.—If a

6 State has a rebate agreement in effect with a manu7 facturer on the date of the enactment of this section

8 which provides for a minimum aggregate rebate

9 equal to or greater than the minimum aggregate re10 bate which would otherwise be paid under the mas11 ter agreement under this section, at the option of

12 the State—

13 ‘‘(A) such agreement shall be considered to

14 meet the requirements of the master rebate

15 agreement, and

16 ‘‘(B) the State shall be considered to have

17 elected to participate in the master rebate

18 agreement.

19 ‘‘(4) LIMITATION ON PRICES OF DRUGS PUR20 CHASED BY COVERED ENTITIES.—

21 ‘‘(A) AGREEMENT WITH SECRETARY.—A

22 manufacturer meets the requirements of this

23 paragraph if the manufacturer has entered into

24 an agreement with the Secretary that meets the

25 requirements of section 340B of the Public
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1 Health Service Act with respect to covered out2 patient drugs purchased by a covered entity on

3 or after the first day of the first month that be4 gins after the date of the enactment of title VI

5 of the Veterans Health Care Act of 1992.

6 ‘‘(B) COVERED ENTITY DEFINED.—In this

7 subsection, the term ‘covered entity’ means an

8 entity described in subsection (a)(4) of section

9 340B of the Public Health Service Act if the

10 entity furnishes the drugs to patients at a cost

11 no greater than acquisition cost plus such dis12 pensing fee as may be allowable as determined

13 by the Office of Drug Pricing in the Public

14 Health Service.

15 ‘‘(C) ESTABLISHMENT OF ALTERNATIVE

16 MECHANISM TO ENSURE AGAINST DUPLICATE

17 DISCOUNTS OR REBATES.—If the Secretary

18 does not establish a mechanism under section

19 340B(a)(5)(A) of the Public Health Service Act

20 within 12 months of the date of the enactment

21 of such section, the following requirements shall

22 apply:

23 ‘‘(i) Each covered entity shall inform

24 the single State agency under this title

25 when it is seeking reimbursement for medi-
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1 cal assistance with respect to a unit of any

2 covered outpatient drug which is subject to

3 an agreement under section 340B(a) of

4 such Act.

5 ‘‘(ii) Each such single State agency

6 shall provide a means by which a covered

7 entity shall indicate on any drug reim8 bursement claims form (or format, where

9 electronic claims management is used) that

10 a unit of the drug that is the subject of the

11 form is subject to an agreement under sec12 tion 340B of such Act, and not submit to

13 any manufacturer a claim for a rebate pay14 ment under subsection (b) with respect to

15 such a drug.

16 ‘‘(D) EFFECT OF SUBSEQUENT AMEND17 MENTS.—In determining whether an agreement

18 under subparagraph (A) meets the require19 ments of section 340B of the Public Health

20 Service Act, the Secretary shall not take into

21 account any amendments to such section that

22 are enacted after the enactment of title VI of

23 the Veterans Health Care Act of 1992.

24 ‘‘(E) DETERMINATION OF COMPLIANCE.—

25 A manufacturer is deemed to meet the require-
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1 ments of this paragraph if the manufacturer es2 tablishes to the satisfaction of the Secretary

3 that the manufacturer would comply (and has

4 offered to comply) with the provisions of section

5 340B of the Public Health Service Act (as in

6 effect immediately after the enactment title VI

7 of the Veterans Health Care Act of 1992, and

8 would have entered into an agreement under

9 such section (as such section was in effect at

10 such time), but for a legislative change in such

11 section after such enactment.

12 ‘‘(b) TERMS OF REBATE AGREEMENT.—

13 ‘‘(1) PERIODIC REBATES.—The master rebate

14 agreement under this section shall require the manu15 facturer to provide, to the State plan of each State

16 participating in the agreement, a rebate for a rebate

17 period in an amount specified in subsection (c) for

18 covered outpatient drugs of the manufacturer dis19 pensed after the effective date of the agreement, for

20 which payment was made under the plan for such

21 period. Such rebate shall be paid by the manufac22 turer not later than 30 days after the date of receipt

23 of the information described in paragraph (2) for

24 the period involved.

25 ‘‘(2) STATE PROVISION OF INFORMATION.—
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1 ‘‘(A) STATE RESPONSIBILITY.—Each State

2 participating in the master rebate agreement

3 shall report to each manufacturer not later

4 than 60 days after the end of each rebate pe5 riod and in a form consistent with a standard

6 reporting format established by the Secretary,

7 information on the total number of units of

8 each dosage form and strength and package

9 size of each covered outpatient drug, for which

10 payment was made under the State plan for the

11 period, and shall promptly transmit a copy of

12 such report to the Secretary.

13 ‘‘(B) AUDITS.—A manufacturer may audit

14 the information provided (or required to be pro15 vided) under subparagraph (A). Adjustments to

16 rebates shall be made to the extent that infor17 mation indicates that utilization was greater or

18 less than the amount previously specified.

19 ‘‘(3) MANUFACTURER PROVISION OF PRICE IN20 FORMATION.—

21 ‘‘(A) IN GENERAL.—Each manufacturer

22 which is subject to the master rebate agreement

23 under this section shall report to the Sec24 retary—
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1 ‘‘(i) not later than 30 days after the

2 last day of each rebate period under the

3 agreement, on the average manufacturer

4 price (as defined in subsection (i)(1)) and,

5 for single source drugs and innovator mul6 tiple source drugs, the manufacturer’s best

7 price (as defined in subsection (c)(1)(C))

8 for each covered outpatient drug for the

9 rebate period under the agreement, and

10 ‘‘(ii) not later than 30 days after the

11 date of entering into an agreement under

12 this section, on the average manufacturer

13 price (as defined in subsection (i)(1)) as of

14 October 1, 1990, for each of the manufac15 turer’s covered outpatient drugs.

16 ‘‘(B) VERIFICATION SURVEYS OF AVERAGE

17 MANUFACTURER PRICE.—The Secretary may

18 survey wholesalers and manufacturers that di19 rectly distribute their covered outpatient drugs,

20 when necessary, to verify manufacturer prices

21 reported under subparagraph (A). The Sec22 retary may impose a civil monetary penalty in

23 an amount not to exceed $10,000 on a whole24 saler, manufacturer, or direct seller, if the

25 wholesaler, manufacturer, or direct seller of a
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1 covered outpatient drug refuses a request for

2 information by the Secretary in connection with

3 a survey under this subparagraph. The provi4 sions of section 1128A (other than subsections

5 (a) (with respect to amounts of penalties or ad6 ditional assessments) and (b)) shall apply to a

7 civil money penalty under this subparagraph in

8 the same manner as such provisions apply to

9 a penalty or proceeding under section

10 1128A(a).

11 ‘‘(C) PENALTIES.—

12 ‘‘(i) FAILURE TO PROVIDE TIMELY IN13 FORMATION.—In the case of a manufac14 turer which is subject to the master rebate

15 agreement that fails to provide information

16 required under subparagraph (A) on a

17 timely basis, the amount of the penalty

18 shall be $10,000 for each day in which

19 such information has not been provided

20 and such amount shall be paid to the

21 Treasury. If such information is not re22 ported within 90 days of the deadline im23 posed, the agreement shall be suspended

24 for services furnished after the end of such

25 90-day period and until the date such in-
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1 formation is reported (but in no case shall

2 such suspension be for a period of less

3 than 30 days).

4 ‘‘(ii) FALSE INFORMATION.—Any

5 manufacturer which is subject to the mas6 ter rebate agreement, or a wholesaler or

7 direct seller, that knowingly provides false

8 information under subparagraph (A) or

9 (B) is subject to a civil money penalty in

10 an amount not to exceed $100,000 for

11 each item of false information. Any such

12 civil money penalty shall be in addition to

13 other penalties as may be prescribed by

14 law. The provisions of section 1128A

15 (other than subsections (a) and (b)) shall

16 apply to a civil money penalty under this

17 subparagraph in the same manner as such

18 provisions apply to a penalty or proceeding

19 under section 1128A(a).

20 ‘‘(D) CONFIDENTIALITY OF INFORMA21 TION.—Notwithstanding any other provision of

22 law, information disclosed by manufacturers or

23 wholesalers under this paragraph or under an

24 agreement with the Secretary of Veterans Af25 fairs described in section 1513(f) is confidential
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1 and shall not be disclosed by the Secretary or

2 the Secretary of Veterans Affairs or a State

3 agency (or contractor therewith) in a form

4 which discloses the identity of a specific manu5 facturer or wholesaler or the prices charged for

6 drugs by such manufacturer or wholesaler, ex7 cept—

8 ‘‘(i) as the Secretary determines to be

9 necessary to carry out this section,

10 ‘‘(ii) to permit the Comptroller Gen11 eral to review the information provided,

12 and

13 ‘‘(iii) to permit the Director of the

14 Congressional Budget Office to review the

15 information provided.

16 ‘‘(4) LENGTH OF AGREEMENT.—

17 ‘‘(A) IN GENERAL.—The master rebate

18 agreement under this section shall be effective

19 for an initial period of not less than 1 year and

20 shall be automatically renewed for a period of

21 not less than 1 year unless terminated under

22 subparagraph (B).

23 ‘‘(B) TERMINATION.—

24 ‘‘(i) BY THE SECRETARY.—The Sec25 retary may provide for termination of the
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1 master rebate agreement with respect to a

2 manufacturer for violation of the require3 ments of the agreement or other good

4 cause shown. Such termination shall not be

5 effective earlier than 60 days after the

6 date of notice of such termination. The

7 Secretary shall provide, upon request, a

8 manufacturer with a hearing concerning

9 such a termination, but such hearing shall

10 not delay the effective date of the termi11 nation. Failure of a State to provide any

12 advance notice of such a termination as re13 quired by regulation shall not affect the

14 State’s right to terminate coverage of the

15 drugs affected by such termination as of

16 the effective date of such termination.

17 ‘‘(ii) BY A MANUFACTURER.—A man18 ufacturer may terminate its participation

19 in the master rebate agreement under this

20 section for any reason. Any such termi21 nation shall not be effective until the cal22 endar quarter beginning at least 60 days

23 after the date the manufacturer provides

24 notice to the Secretary.
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1 ‘‘(iii) EFFECTIVENESS OF TERMI2 NATION.—Any termination under this sub3 paragraph shall not affect rebates due

4 under the agreement before the effective

5 date of its termination.

6 ‘‘(iv) NOTICE TO STATES.—In the

7 case of a termination under this subpara8 graph, the Secretary shall provide notice of

9 such termination to the States within not

10 less than 30 days before the effective date

11 of such termination.

12 ‘‘(v) APPLICATION TO TERMINATIONS

13 OF OTHER AGREEMENTS.—The provisions

14 of this subparagraph shall apply to the ter15 minations of master agreements described

16 in section 8126(a) of title 38, United

17 States Code.

18 ‘‘(C) DELAY BEFORE REENTRY.—In the

19 case of any rebate agreement with a manufac20 turer under this section which is terminated,

21 another such agreement with the manufacturer

22 (or a successor manufacturer) may not be en23 tered into until a period of 1 calendar quarter

24 has elapsed since the date of the termination,
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1 unless the Secretary finds good cause for an

2 earlier reinstatement of such an agreement.

3 ‘‘(5) SETTLEMENT OF DISPUTES.—

4 ‘‘(A) SECRETARY.—The Secretary shall

5 have the authority to resolve, settle, and com6 promise disputes regarding the amounts of re7 bates owed under this section and section 1927.

8 ‘‘(B) STATE.—Each State, with respect to

9 covered outpatient drugs paid for under the

10 State’s State plan, shall have authority, inde11 pendent of the Secretary’s authority under sub12 paragraph (A), to resolve, settle, and com13 promise disputes regarding the amounts of re14 bates owed under this section. Any such action

15 shall be deemed to comply with the require16 ments of this title, and such covered outpatient

17 drugs shall be eligible for payment under the

18 State plan under this title.

19 ‘‘(C) AMOUNT OF REBATE.—The Secretary

20 shall limit the amount of the rebate payable in

21 any case in which the Secretary determines

22 that, because of unusual circumstances or ques23 tionable data, the provisions of subsection (c)

24 result in a rebate amount that is inequitable or
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1 otherwise inconsistent with the purposes of this

2 section.

3 ‘‘(c) DETERMINATION OF AMOUNT OF REBATE.—

4 ‘‘(1) BASIC REBATE FOR SINGLE SOURCE

5 DRUGS AND INNOVATOR MULTIPLE SOURCE

6 DRUGS.—

7 ‘‘(A) IN GENERAL.—Except as provided in

8 paragraph (2), the amount of the rebate speci9 fied in this subsection with respect to a State

10 participating in the master rebate agreement

11 for a rebate period (as defined in subsection

12 (i)(7)) with respect to each dosage form and

13 strength of a single source drug or an innovator

14 multiple source drug shall be equal to the prod15 uct of—

16 ‘‘(i) the total number of units of each

17 dosage form and strength paid for under

18 the State plan in the rebate period (as re19 ported by the State); and

20 ‘‘(ii) the greater of—

21 ‘‘(I) the difference between the

22 average manufacturer price and the

23 best price (as defined in subparagraph

24 (C)) for the dosage form and strength

25 of the drug, or
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1 ‘‘(II) the minimum rebate per2 centage (specified in subparagraph

3 (B)) of such average manufacturer

4 price,

5 for the rebate period.

6 ‘‘(B) MINIMUM REBATE PERCENTAGE.—

7 For purposes of subparagraph (A)(ii)(II), the

8 ‘minimum rebate percentage’ is 15 percent.

9 ‘‘(C) BEST PRICE DEFINED.—For pur10 poses of this section—

11 ‘‘(i) IN GENERAL.—The term ‘best

12 price’ means, with respect to a single

13 source drug or innovator multiple source

14 drug of a manufacturer, the lowest price

15 available from the manufacturer during the

16 rebate period to any wholesaler, retailer,

17 provider, health maintenance organization,

18 nonprofit entity, or governmental entity

19 within the United States, excluding—

20 ‘‘(I) any prices charged on or

21 after October 1, 1992, to the Indian

22 Health Service, the Department of

23 Veterans Affairs, a State home receiv24 ing funds under section 1741 of title

25 38, United States Code, the Depart-
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1 ment of Defense, the Public Health

2 Service, or a covered entity described

3 in section 340B(a)(4) of the Public

4 Health Service Act,

5 ‘‘(II) any prices charged under

6 the Federal Supply Schedule of the

7 General Services Administration,

8 ‘‘(III) any prices used under a

9 State pharmaceutical assistance pro10 gram, and

11 ‘‘(IV) any depot prices and single

12 award contract prices, as defined by

13 the Secretary, of any agency of the

14 Federal Government.

15 ‘‘(ii) SPECIAL RULES.—The term ‘best

16 price’—

17 ‘‘(I) shall be inclusive of cash dis18 counts, free goods that are contingent

19 on any purchase requirement, volume

20 discounts, and rebates (other than re21 bates under this section),

22 ‘‘(II) shall be determined without

23 regard to special packaging, labeling,

24 or identifiers on the dosage form or

25 product or package,
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1 ‘‘(III) shall not take into account

2 prices that are merely nominal in

3 amount, and

4 ‘‘(IV) shall exclude rebates paid

5 under this section or any other re6 bates paid to a State participating in

7 the master rebate agreement.

8 ‘‘(2) ADDITIONAL REBATE FOR SINGLE SOURCE

9 AND INNOVATOR MULTIPLE SOURCE DRUGS.—

10 ‘‘(A) IN GENERAL.—The amount of the re11 bate specified in this subsection with respect to

12 a State participating in the master rebate

13 agreement for a rebate period, with respect to

14 each dosage form and strength of a single

15 source drug or an innovator multiple source

16 drug, shall be increased by an amount equal to

17 the product of—

18 ‘‘(i) the total number of units of such

19 dosage form and strength dispensed after

20 December 31, 1990, for which payment

21 was made under the State plan for the re22 bate period; and

23 ‘‘(ii) the amount (if any) by which—

24 ‘‘(I) the average manufacturer

25 price for the dosage form and
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1 strength of the drug for the period,

2 exceeds

3 ‘‘(II) the average manufacturer

4 price for such dosage form and

5 strength for the calendar quarter be6 ginning July 1, 1990 (without regard

7 to whether or not the drug has been

8 sold or transferred to an entity, in9 cluding a division or subsidiary of the

10 manufacturer, after the first day of

11 such quarter), increased by the per12 centage by which the Consumer Price

13 Index for All Urban Consumers (Unit14 ed States city average) for the month

15 before the month in which the rebate

16 period begins exceeds such index for

17 September 1990.

18 ‘‘(B) TREATMENT OF SUBSEQUENTLY AP19 PROVED DRUGS.—In the case of a covered out20 patient drug approved by the Food and Drug

21 Administration after October 1, 1990, clause

22 (ii)(II) of subparagraph (A) shall be applied by

23 substituting ‘the first full calendar quarter after

24 the day on which the drug was first marketed’

25 for ‘the calendar quarter beginning July 1,
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1 1990’ and ‘the month prior to the first month

2 of the first full calendar quarter after the day

3 on which the drug was first marketed’ for ‘Sep4 tember 1990’.

5 ‘‘(3) REBATE FOR OTHER DRUGS.—

6 ‘‘(A) IN GENERAL.—The amount of the re7 bate paid to a State participating in the master

8 rebate agreement for a rebate period with re9 spect to each dosage form and strength of cov10 ered outpatient drugs (other than single source

11 drugs and innovator multiple source drugs)

12 shall be equal to the product of—

13 ‘‘(i) the applicable percentage (as de14 scribed in subparagraph (B)) of the aver15 age manufacturer price for the dosage

16 form and strength for the rebate period,

17 and

18 ‘‘(ii) the total number of units of such

19 dosage form and strength dispensed after

20 December 31, 1990, for which payment

21 was made under the State plan for the re22 bate period.

23 ‘‘(B) APPLICABLE PERCENTAGE DE24 FINED.—For purposes of subparagraph (A)(i),

25 the ‘applicable percentage’ is 11 percent.
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1 ‘‘(4) LIMITATION ON AMOUNT OF REBATE TO

2 AMOUNTS PAID FOR CERTAIN DRUGS.—

3 ‘‘(A) IN GENERAL.—Upon request of the

4 manufacturer of a covered outpatient drug, the

5 Secretary shall limit, in accordance with sub6 paragraph (B), the amount of the rebate under

7 this subsection with respect to a dosage form

8 and strength of such drug if the majority of the

9 estimated number of units of such dosage form

10 and strength that are subject to rebates under

11 this section were dispensed to inpatients of

12 nursing facilities.

13 ‘‘(B) AMOUNT OF REBATE.—In the case of

14 a covered outpatient drug subject to subpara15 graph (A), the amount of the rebate specified in

16 this subsection for a rebate period, with respect

17 to each dosage form and strength of such drug,

18 shall not exceed the amount paid under the

19 State plan with respect to such dosage form

20 and strength of the drug in the rebate period

21 (without consideration of any dispensing fees

22 paid).

23 ‘‘(5) SUPPLEMENTAL REBATES PROHIBITED.—

24 No rebates shall be required to be paid by manufac25 turers with respect to covered outpatient drugs fur-
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1 nished to individuals in any State that provides for

2 the collection of such rebates in excess of the rebate

3 amount payable under this section.

4 ‘‘(d) LIMITATIONS ON COVERAGE OF DRUGS BY

5 STATES PARTICIPATING IN MASTER AGREEMENT.—

6 ‘‘(1) PERMISSIBLE RESTRICTIONS.—A State

7 participating in the master rebate agreement under

8 this section may—

9 ‘‘(A) subject to prior authorization under

10 its State plan any covered outpatient drug so

11 long as any such prior authorization program

12 complies with the requirements of paragraph

13 (5); and

14 ‘‘(B) exclude or otherwise restrict coverage

15 under its plan of a covered outpatient drug if—

16 ‘‘(i) the drug is contained in the list

17 referred to in paragraph (2);

18 ‘‘(ii) the drug is subject to such re19 strictions pursuant to the master rebate

20 agreement or any agreement described in

21 subsection (a)(4); or

22 ‘‘(iii) the State has excluded coverage

23 of the drug from its formulary established

24 in accordance with paragraph (4).
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1 ‘‘(2) LIST OF DRUGS SUBJECT TO RESTRIC2 TION.—The following drugs or classes of drugs, or

3 their medical uses, may be excluded from coverage

4 or otherwise restricted by a State participating in

5 the master rebate agreement:

6 ‘‘(A) Agents when used for anorexia,

7 weight loss, or weight gain.

8 ‘‘(B) Agents when used to promote fertil9 ity.

10 ‘‘(C) Agents when used for cosmetic pur11 poses or hair growth.

12 ‘‘(D) Agents when used for the sympto13 matic relief of cough and colds.

14 ‘‘(E) Agents when used to promote smok15 ing cessation.

16 ‘‘(F) Prescription vitamins and mineral

17 products, except prenatal vitamins and fluoride

18 preparations.

19 ‘‘(G) Nonprescription drugs.

20 ‘‘(H) Covered outpatient drugs which the

21 manufacturer seeks to require as a condition of

22 sale that associated tests or monitoring services

23 be purchased exclusively from the manufacturer

24 or its designee.

25 ‘‘(I) Barbiturates.
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1 ‘‘(J) Benzodiazepines.

2 ‘‘(3) ADDITIONS TO DRUG LISTINGS.—The Sec3 retary shall, by regulation, periodically update the

4 list of drugs or classes of drugs described in para5 graph (2), or their medical uses, which the Secretary

6 has determined to be subject to clinical abuse or in7 appropriate use.

8 ‘‘(4) REQUIREMENTS FOR FORMULARIES.—A

9 State participating in the master rebate agreement

10 may establish a formulary if the formulary meets the

11 following requirements:

12 ‘‘(A) The formulary is developed by a com13 mittee consisting of physicians, pharmacists,

14 and other appropriate individuals appointed by

15 the Governor of the State.

16 ‘‘(B) Except as provided in subparagraph

17 (C), the formulary includes the covered out18 patient drugs of any manufacturer which has

19 entered into and complies with the agreement

20 under subsection (a) (other than any drug ex21 cluded from coverage or otherwise restricted

22 under paragraph (2)).

23 ‘‘(C) A covered outpatient drug may be ex24 cluded with respect to the treatment of a spe25 cific disease or condition for an identified popu-
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1 lation (if any) only if, based on the drug’s label2 ing (or, in the case of a drug the prescribed

3 use of which is not approved under the Federal

4 Food, Drug, and Cosmetic Act but is a medi5 cally accepted indication, based on information

6 from the appropriate compendia described in

7 subsection (i)(5)), the excluded drug does not

8 have a significant, clinically meaningful thera9 peutic advantage in terms of safety, effective10 ness, or clinical outcome of such treatment for

11 such population over other drugs included in

12 the formulary and there is a written expla13 nation (available to the public) of the basis for

14 the exclusion.

15 ‘‘(D) The State plan permits coverage of a

16 drug excluded from the formulary (other than

17 any drug excluded from coverage or otherwise

18 restricted under paragraph (2)) pursuant to a

19 prior authorization program that is consistent

20 with paragraph (5).

21 ‘‘(E) The formulary meets such other re22 quirements as the Secretary may impose in

23 order to achieve program savings consistent

24 with protecting the health of program bene25 ficiaries.
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1 A prior authorization program established by a State

2 under paragraph (5) is not a formulary subject to

3 the requirements of this paragraph.

4 ‘‘(5) REQUIREMENTS OF PRIOR AUTHORIZATION

5 PROGRAMS.—The State plan of a State participating

6 in the master rebate agreement may require, as a

7 condition of coverage or payment for a covered out8 patient drug for which Federal financial participa9 tion is available in accordance with this section, the

10 approval of the drug before its dispensing for any

11 medically accepted indication (as defined in sub12 section (i)(5)) only if the system providing for such

13 approval—

14 ‘‘(A) provides response by telephone or

15 other telecommunication device within 24 hours

16 of a request for prior authorization, and

17 ‘‘(B) except with respect to the drugs on

18 the list referred to in paragraph (2), provides

19 for the dispensing of at least a 72-hour supply

20 of a covered outpatient prescription drug in an

21 emergency situation (as defined by the Sec22 retary).

23 ‘‘(6) OTHER PERMISSIBLE RESTRICTIONS.—A

24 State participating in the master rebate agreement

25 may impose limitations, with respect to all such
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1 drugs in a therapeutic class, on the minimum or

2 maximum quantities per prescription or on the num3 ber of refills, if such limitations are necessary to dis4 courage waste, and may address instances of fraud

5 or abuse by individuals in any manner authorized

6 under this Act.

7 ‘‘(e) DRUG USE REVIEW.—

8 ‘‘(1) IN GENERAL.—A State participating in the

9 master rebate agreement may provide for a drug use

10 review program to educate physicians and phar11 macists to identify and reduce the frequency of pat12 terns of fraud, abuse, gross overuse, or inappropri13 ate or medically unnecessary care, among physicians,

14 pharmacists, and patients, or associated with specific

15 drugs or groups of drugs, as well as potential and

16 actual severe adverse reactions to drugs.

17 ‘‘(2) APPLICATION OF STATE STANDARDS.—A

18 State with a drug use review program under this

19 subsection shall establish and operate the program

20 under such standards as it may establish.

21 ‘‘(f) ELECTRONIC CLAIMS MANAGEMENT.—In ac22 cordance with chapter 35 of title 44, United States Code

23 (relating to coordination of Federal information policy),

24 the Secretary shall encourage each State to establish, as

25 its principal means of processing claims for covered out-
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1 patient drugs under its State plan, a point-of-sale elec2 tronic claims management system, for the purpose of per3 forming on-line, real time eligibility verifications, claims

4 data capture, adjudication of claims, and assisting phar5 macists (and other authorized persons) in applying for and

6 receiving payment.

7 ‘‘(g) ANNUAL REPORT.—

8 ‘‘(1) IN GENERAL.—Not later than May 1 of

9 each year, the Secretary shall transmit to the Com10 mittee on Finance of the Senate, and the Committee

11 on Commerce of the House of Representatives, a re12 port on the operation of this section in the preceding

13 fiscal year.

14 ‘‘(2) DETAILS.—Each report shall include infor15 mation on—

16 ‘‘(A) ingredient costs paid under this title

17 for single source drugs, multiple source drugs,

18 and nonprescription covered outpatient drugs,

19 ‘‘(B) the total value of rebates received

20 and number of manufacturers providing such

21 rebates,

22 ‘‘(C) the effect of inflation on the value of

23 rebates required under this section,

24 ‘‘(D) trends in prices paid under this title

25 for covered outpatient drugs, and
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1 ‘‘(E) Federal and State administrative

2 costs associated with compliance with the provi3 sions of this title.

4 ‘‘(h) EXEMPTION FOR CAPITATED HEALTH CARE

5 ORGANIZATIONS, HOSPITALS, AND CERTAIN NURSING

6 FACILITIES.—

7 ‘‘(1) IN GENERAL.—Except as provided in para8 graph (2), the requirements of the master rebate

9 agreement under this section shall not apply with re10 spect to covered outpatient drugs dispensed by or

11 through—

12 ‘‘(A) a capitated health care organization

13 (as defined in section 1504(c)(1)),

14 ‘‘(B) a hospital that dispenses covered out15 patient drugs using a drug formulary system

16 and bills the State no more than the hospital’s

17 purchasing costs for covered outpatient drugs,

18 or

19 ‘‘(C) a nursing facility which receives pay20 ment under this title for health care services,

21 including prescription drugs, on a capitated

22 basis and which dispenses covered outpatient

23 drugs using a drug formulary system.

24 ‘‘(2) CONSTRUCTION IN DETERMINING BEST

25 PRICE.—Nothing in paragraph (1) shall be con-
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1 strued as excluding amounts paid by the entities de2 scribed in such paragraph for covered outpatient

3 drugs from the determination of the best price (as

4 defined in subsection (c)(1)(C)) for such drugs.

5 ‘‘(i) DEFINITIONS.—In the section—

6 ‘‘(1) AVERAGE MANUFACTURER PRICE.—The

7 term ‘average manufacturer price’ means, with re8 spect to a covered outpatient drug of a manufacturer

9 for a rebate period, the average price paid to the

10 manufacturer for the drug in the United States by

11 wholesalers for drugs distributed to the retail phar12 macy class of trade, after deducting customary

13 prompt pay discounts.

14 ‘‘(2) COVERED OUTPATIENT DRUG.—Subject to

15 the exceptions in paragraph (3), the term ‘covered

16 outpatient drug’ means—

17 ‘‘(A) of those drugs which are treated as

18 prescribed drugs for purposes of section

19 1571(a)(8), a drug which may be dispensed

20 only upon prescription (except as provided in

21 subparagraph (D)), and—

22 ‘‘(i) which is approved as a prescrip23 tion drug under section 505 or 507 of the

24 Federal Food, Drug, and Cosmetic Act;
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1 ‘‘(ii)(I) which was commercially used

2 or sold in the United States before the

3 date of the enactment of the Drug Amend4 ments of 1962 or which is identical, simi5 lar, or related (within the meaning of sec6 tion 310.6(b)(1) of title 21 of the Code of

7 Federal Regulations) to such a drug, and

8 (II) which has not been the subject of a

9 final determination by the Secretary that it

10 is a ‘new drug’ (within the meaning of sec11 tion 201(p) of the Federal Food, Drug,

12 and Cosmetic Act) or an action brought by

13 the Secretary under section 301, 302(a),

14 or 304(a) of such Act to enforce section

15 502(f) or 505(a) of such Act; or

16 ‘‘(iii)(I) which is described in section

17 107(c)(3) of the Drug Amendments of

18 1962 and for which the Secretary has de19 termined there is a compelling justification

20 for its medical need, or is identical, simi21 lar, or related (within the meaning of sec22 tion 310.6(b)(1) of title 21 of the Code of

23 Federal Regulations) to such a drug, and

24 (II) for which the Secretary has not issued

25 a notice of an opportunity for a hearing
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1 under section 505(e) of the Federal Food,

2 Drug, and Cosmetic Act on a proposed

3 order of the Secretary to withdraw ap4 proval of an application for such drug

5 under such section because the Secretary

6 has determined that the drug is less than

7 effective for some or all conditions of use

8 prescribed, recommended, or suggested in

9 its labeling;

10 ‘‘(B) a biological product, other than a

11 vaccine which—

12 ‘‘(i) may only be dispensed upon pre13 scription,

14 ‘‘(ii) is licensed under section 351 of

15 the Public Health Service Act, and

16 ‘‘(iii) is produced at an establishment

17 licensed under such section to produce

18 such product;

19 ‘‘(C) insulin certified under section 506 of

20 the Federal Food, Drug, and Cosmetic Act; and

21 ‘‘(D) a drug which may be sold without a

22 prescription (commonly referred to as an ‘over23 the-counter drug’), if the drug is prescribed by

24 a physician (or other person authorized to pre25 scribe under State law).
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1 ‘‘(3) LIMITING DEFINITION.—The term ‘covered

2 outpatient drug’ does not include any drug, biologi3 cal product, or insulin provided as part of, or as in4 cident to and in the same setting as, any of the fol5 lowing (and for which payment may be made under

6 a State plan as part of payment for the following

7 and not as direct reimbursement for the drug):

8 ‘‘(A) Inpatient hospital services.

9 ‘‘(B) Hospice services.

10 ‘‘(C) Dental services, except that drugs for

11 which the State plan authorizes direct reim12 bursement to the dispensing dentist are covered

13 outpatient drugs.

14 ‘‘(D) Physicians’ services.

15 ‘‘(E) Outpatient hospital services.

16 ‘‘(F) Nursing facility services and services

17 provided by an intermediate care facility for the

18 mentally retarded.

19 ‘‘(G) Other laboratory and x-ray services.

20 ‘‘(H) Renal dialysis services.

21 Such term also does not include any such drug or

22 product for which a National Drug Code number is

23 not required by the Food and Drug Administration

24 or a drug or biological product used for a medical

25 indication which is not a medically accepted indica-
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1 tion. Any drug, biological product, or insulin ex2 cluded from the definition of such term as a result

3 of this paragraph shall be treated as a covered out4 patient drug for purposes of determining the best

5 price (as defined in subsection (c)(1)(C)) for such

6 drug, biological product, or insulin.

7 ‘‘(4) MANUFACTURER.—The term ‘manufac8 turer’ means, with respect to a covered outpatient

9 drug, the entity holding legal title to or possession

10 of the National Drug Code number for such drug.

11 ‘‘(5) MEDICALLY ACCEPTED INDICATION.—The

12 term ‘medically accepted indication’ means any use

13 for a covered outpatient drug which is approved

14 under the Federal Food, Drug, and Cosmetic Act, or

15 the use of which is supported by one or more cita16 tions included or approved for inclusion in any of the

17 following compendia:

18 ‘‘(A) American Hospital Formulary Service

19 Drug Information.

20 ‘‘(B) United States Pharmacopeia-Drug

21 Information.

22 ‘‘(C) American Medical Association Drug

23 Evaluations.

24 ‘‘(D) The DRUGDEX Information Sys25 tem.
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1 ‘‘(E) The peer-reviewed medical literature.

2 ‘‘(6) MULTIPLE SOURCE DRUG; INNOVATOR

3 MULTIPLE SOURCE DRUG; NONINNOVATOR MUL4 TIPLE SOURCE DRUG; SINGLE SOURCE DRUG.—

5 ‘‘(A) DEFINED.—

6 ‘‘(i) MULTIPLE SOURCE DRUG.—The

7 term ‘multiple source drug’ means, with

8 respect to a rebate period, a covered out9 patient drug (not including any drug de10 scribed in paragraph (2)(D)) for which

11 there are 2 or more drug products which—

12 ‘‘(I) are rated as therapeutically

13 equivalent (under the Food and Drug

14 Administration’s most recent publica15 tion of ‘Approved Drug Products with

16 Therapeutic Equivalence Evalua17 tions’),

18 ‘‘(II) except as provided in sub19 paragraph (B), are pharmaceutically

20 equivalent and bioequivalent, as de21 fined in subparagraph (C) and as de22 termined by the Food and Drug Ad23 ministration, and

24 ‘‘(III) are sold or marketed in

25 the State during the period.
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1 ‘‘(ii) INNOVATOR MULTIPLE SOURCE

2 DRUG.—The term ‘innovator multiple

3 source drug’ means a multiple source drug

4 that was originally marketed under an

5 original new drug application or product li6 censing application approved by the Food

7 and Drug Administration.

8 ‘‘(iii) NONINNOVATOR MULTIPLE

9 SOURCE DRUG.—The term ‘noninnovator

10 multiple source drug’ means a multiple

11 source drug that is not an innovator mul12 tiple source drug.

13 ‘‘(iv) SINGLE SOURCE DRUG.—The

14 term ‘single source drug’ means a covered

15 outpatient drug (other than a drug de16 scribed in subparagraph (C) or (D) of

17 paragraph (2)) which is produced or dis18 tributed under an original new drug appli19 cation approved by the Food and Drug Ad20 ministration, including a drug product

21 marketed by any cross-licensed producers

22 or distributors operating under the new

23 drug application or product licensing appli24 cation.
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1 ‘‘(B) EXCEPTION.—Subparagraph

2 (A)(i)(II) shall not apply if the Food and Drug

3 Administration changes by regulation the re4 quirement that, for purposes of the publication

5 described in subparagraph (A)(i)(I), in order

6 for drug products to be rated as therapeutically

7 equivalent, they must be pharmaceutically

8 equivalent and bioequivalent, as defined in sub9 paragraph (C).

10 ‘‘(C) DEFINITIONS.—For purposes of this

11 paragraph—

12 ‘‘(i) drug products are pharmaceuti13 cally equivalent if the products contain

14 identical amounts of the same active drug

15 ingredient in the same dosage form and

16 meet compendial or other applicable stand17 ards of strength, quality, purity, and iden18 tity,

19 ‘‘(ii) drugs are bioequivalent if they do

20 not present a known or potential bio21 equivalence problem, or, if they do present

22 such a problem, they are shown to meet an

23 appropriate standard of bioequivalence,

24 and
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1 ‘‘(iii) a drug product is considered to

2 be sold or marketed in a State if it appears

3 in a published national listing of average

4 wholesale prices selected by the Secretary,

5 if the listed product is generally available

6 to the public through retail pharmacies in

7 that State.

8 ‘‘(7) REBATE PERIOD.—The term ‘rebate pe9 riod’ means, with respect to an agreement under

10 subsection (a), a calendar quarter or other period

11 specified by the Secretary with respect to the pay12 ment of rebates under such agreement.’’.

13 SEC. 2004. STATE ELECTION; TERMINATION OF CURRENT

14 PROGRAM; AND TRANSITION.

15 (a) TERMINATION OF CURRENT PROGRAM; LIMITA16 TION ON MEDICAID PAYMENTS IN FISCAL YEAR 1997.—

17 (1) REPEAL OF TITLE.—Title XIX of the Social

18 Security Act is repealed effective October 1, 1997,

19 except that the repeal of section 1928 of such Act

20 is effective on the date of the enactment of this Act

21 and the succeeding two sections of such title shall be

22 effective during fiscal year 1996 in the same manner

23 and to the same extent as such sections were effec24 tive during fiscal year 1995.
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1 (2) LIMITATION ON OBLIGATION AUTHORITY.—

2 Notwithstanding any other provision of such title—

3 (A) FISCAL YEAR 1997.—Subject to sub4 paragraph (B), the Secretary of Health and

5 Human Services (in this section referred to as

6 the ‘‘Secretary’’) may enter into obligations

7 under such title with any State (as defined for

8 purposes of such title) for expenses incurred

9 during fiscal year 1997, but not in excess of the

10 sum determined under clauses (i), (ii) and (iv)

11 of section 1511(a)(2)(A) of the Social Security

12 Act (as added by section 2) for that State for

13 fiscal year 1997.

14 (B) NONE AFTER EFFECTIVE DATE.—The

15 Secretary is not authorized to enter into any

16 obligation with any State under title XIX of

17 such Act for expenses incurred on or after the

18 earlier of—

19 (i) October 1, 1997, or

20 (ii) the first day of the first quarter

21 on which the State plan under title XV of

22 such Act (as added by section 2) is first ef23 fective.

24 (C) AGREEMENT.—A State’s submission of

25 claims for payment under section 1903 of such
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1 Act on or after October 1, 1996, is deemed to

2 constitute the State’s acceptance of the obliga3 tion limitation under subparagraph (A) (includ4 ing the formula for computing the amount of

5 such obligation limitation).

6 (D) EFFECT ON MEDICAL ASSISTANCE.—

7 Effective October 1, 1996—

8 (i) except as provided in this para9 graph, the Federal Government has no ob10 ligation to provide payment with respect to

11 items and services provided under title

12 XIX of the Social Security Act, and

13 (ii) such title and title XV of such Act

14 shall not be construed as providing for an

15 entitlement, under Federal law in relation

16 to the Federal Government, in an individ17 ual or person (including any provider) at

18 the time of provision or receipt of services.

19 (3) REQUIREMENT FOR TIMELY SUBMITTAL OF

20 CLAIMS.—No payment shall be made to a State

21 under title XIX of such Act with respect to an obli22 gation incurred before October 1, 1996, unless the

23 State has submitted to the Secretary, by not later

24 than April 1, 1997, a claim for Federal financial

25 participation for expenses paid by the State with re-
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1 spect to such obligations. Nothing in paragraph (2)

2 shall be construed as affecting the obligation of the

3 Federal Government to pay claims described in the

4 previous sentence.

5 (b) TRANSITION PROVISIONS.—

6 (1) Notwithstanding any other provision of law,

7 in the case where payment has been made under sec8 tion 1903(a) of the Social Security Act to a State

9 before March 1, 1996, and for which a disallowance

10 has not been taken as of such date (or, if so taken,

11 has not been completed, including judicial review, by

12 such date), the Secretary of Health and Human

13 Services shall discontinue the disallowance proceed14 ing and, if such disallowance has been taken as of

15 the date of the enactment of this Act, any payment

16 reductions effected shall be rescinded and the pay17 ments returned to the State.

18 (2) The repeal under subsection (a)(1) of sec19 tion 1928 of the Social Security Act shall not affect

20 the distribution of vaccines purchased and delivered

21 to the States before the date of the enactment of

22 this Act. No vaccine may be purchased after such

23 date by the Federal Government or any State under

24 any contract under section 1928(d) of the Social Se25 curity Act.
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1 (3) No judicial or administrative decision ren2 dered regarding requirements imposed under title

3 XIX of the Social Security Act with respect to a

4 State shall have any application to the State plan of

5 the State under title XV of such Act. A State may,

6 pursuant to the previous sentence, seek the abroga7 tion or modification of any such decision after the

8 date of termination of the State medicaid plan under

9 title XIX of such Act.

10 (4) No cause of action under title XIX of the

11 Social Security Act which seeks to require a State

12 to establish or maintain minimum payment rates

13 under such title or claim which seeks reimbursement

14 for any period before the date of the enactment of

15 this Act based on the alleged failure of the State to

16 comply with such title and which has not become

17 final as of such date shall be brought or continued.

18 (5) Section 6408(a)(3) of the Omnibus Budget

19 Reconciliation Act of 1989 (as amended by section

20 13642 of the Omnibus Budget Reconciliation Act of

21 1993) and section 2 of Public Law 102–276 (as

22 amended by section 13644 of the Omnibus Budget

23 Reconciliation Act of 1993) are each amended by

24 striking ‘‘December 31, 1995’’ and inserting ‘‘Octo25 ber 1, 1997’’.
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1 (c) ANTI-FRAUD PROVISIONS.—Section 1128(h)(1)

2 of the Social Security Act (42 U.S.C. 1320a–7(h)(1)) is

3 amended by inserting ‘‘or a State plan under title XV’’

4 after ‘‘title XIX’’.

5 (d) TECHNICAL AND CONFORMING AMENDMENTS.—

6 (1) SECRETARIAL SUBMISSION OF LEGISLATIVE

7 PROPOSAL.—Not later than 90 days after the date

8 of the enactment of this Act, the Secretary of

9 Health and Human Services, in consultation, as ap10 propriate, with heads of other Federal agencies and

11 the States (as defined in section 1101(a)(8) of the

12 Social Security Act for purposes of title XIX of such

13 Act), shall submit to the appropriate committees of

14 Congress a legislative proposal providing for such

15 technical and conforming amendments in the law as

16 are required by the provisions of, and amendments

17 made by, this title.

18 (2) TRANSITIONAL RULE.—Any reference in

19 any provision of law to title XIX of the Social Secu20 rity Act or any provision thereof shall be deemed to

21 be a reference to such title or provision as in effect

22 on the day before the date of the enactment of this

23 Act.

24 SEC. 2005. INTEGRATION DEMONSTRATION PROJECT.

25 (a) DESCRIPTION OF PROJECTS.—
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1 (1) IN GENERAL.—The Secretary of Health and

2 Human Services (in this section referred to as the

3 ‘‘Secretary’’) may waive such requirements of titles

4 XVIII and XV of the Social Security Act as may be

5 necessary for States to conduct demonstration

6 projects under this section. Such projects shall dem7 onstrate the manner in which States may use funds

8 from the programs under such titles to develop and

9 implement innovative programs for individuals dually

10 eligible for benefits under both titles, including such

11 individuals who are chronically ill. The Secretary

12 shall grant waivers in a manner that permits States

13 flexibility in contracting with medicare risk providers

14 and other providers for services, oversight of con15 tract administration and quality management, and

16 administration of a single enrollment process. Such

17 a waiver may restrict time period during which

18 project participants may disenroll without cause

19 from capitated health plans under the medicare pro20 gram.

21 (2) VOLUNTARY PARTICIPATION.—A State may

22 not require an individual eligible to receive items and

23 services under the medicare and title XV programs

24 to participate in a demonstration project under this

25 section.
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1 (b) BUDGET NEUTRALITY AND REINVESTMENT OF

2 SAVINGS.—

3 (1) BUDGET NEUTRALITY.—The Secretary shall

4 not approve a demonstration project under this sec5 tion for a State unless the State demonstrates that

6 the amount of the Federal expenditures under the

7 program will not exceed the amount of the Federal

8 expenditures that would have been made if the

9 project had not been approve.

10 (2) USE OF SAVINGS.—The Secretary shall per11 mit a State to retain any savings achieved under a

12 project and to use such savings for—

13 (A) expanding eligibility for low income

14 medicare beneficiaries who are risk of institu15 tionalization and who, if institionalized, are

16 likely to qualify for benefits under title XV of

17 the Social Security Act, and

18 (B) providing a scope of services under the

19 project that exceeds the scope of services nor20 mally covered under such title.

21 (c) LIMITATION ON NUMBER OF PROJECTS.—Not

22 more than 10 demonstration projects shall be conducted

23 under this section.

24 (d) DURATION.—
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1 (1) IN GENERAL.—Subject to paragraph (2), a

2 demonstration project conducted under this section

3 shall be conducted for an initial period of 5 years

4 and, upon the request of a State and a finding by

5 the Secretary that the project has been successful,

6 shall be extended indefinitely.

7 (2) TERMINATION.—The Secretary may, with

8 90 days’ notice, terminate any demonstration project

9 conducted under this section that is not in substan10 tial compliance with the terms of the application ap11 proved by the Secretary under this section.

12 (e) APPLICATIONS.—Each State, or a coalition of

13 States, desiring to conduct a demonstration project under

14 this section shall prepare and submit to the Secretary an

15 application at such time, in such manner, and containing

16 such information as the Secretary may require, including

17 an explanation of a plan for evaluating the project. The

18 Secretary shall approve or deny an application not later

19 than 90 days after the receipt of such application.

20 (f) PAYMENTS.—For each calendar quarter occurring

21 during a demonstration project conducted under this sec22 tion, the Secretary shall provide for payments to the State

23 in a manner consistent with subsection (b)(1).

24 (g) OVERSIGHT.—The Secretary shall establish qual25 ity standards for evaluating and monitoring the dem-
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1 onstration projects conducted under this section. Such

2 quality standards shall include reporting requirements

3 which contain the following:

4 (1) A description of the demonstration project.

5 (2) An analysis of beneficiary satisfaction under

6 such project.

7 (3) An analysis of the quality of the services de8 livered under the project.

9 (4) A description of the savings to the medicare

10 and title XV programs as a result of the demonstra11 tion project.

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