1 

" ! HOUSE OF REPRESENTATIVES 

114TH CONGRESS

2d Session 

REPORT

114–462 

REDUCING DUPLICATIVE AND INEFFECTIVE 

FEDERAL FUNDING ACT 

R E P O R T 

OF THE

COMMITTEE ON WAYS AND MEANS 

HOUSE OF REPRESENTATIVES 

TO ACCOMPANY

H.R. 4724 

together with 

DISSENTING VIEWS 

[Including cost estimate of the Congressional Budget Office] 

MARCH 23 2016.—Committed to the Committee of the Whole House on 

the State of the Union and ordered to be printed 


emcdonald on DSK67QTVN1PROD with HEARINGE:\Seals\Congress.#13
REDUCING DUPLICATIVE AND INEFFECTIVE FEDERAL FUNDING ACT 


emcdonald on DSK67QTVN1PROD with HEARING
U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

1 

99–558 

" ! HOUSE OF REPRESENTATIVES 

114TH CONGRESS

2d Session 

REPORT

2016

114–462 

REDUCING DUPLICATIVE AND INEFFECTIVE 

FEDERAL FUNDING ACT 

R E P O R T 

OF THE

COMMITTEE ON WAYS AND MEANS 

HOUSE OF REPRESENTATIVES 

TO ACCOMPANY

H.R. 4724 

together with 

DISSENTING VIEWS 

[Including cost estimate of the Congressional Budget Office] 

MARCH 23 2016.—Committed to the Committee of the Whole House on 

the State of the Union and ordered to be printed 


emcdonald on DSK67QTVN1PROD with HEARINGE:\Seals\Congress.#13

emcdonald on DSK67QTVN1PROD with HEARING
(III) 

CONTENTS 

Page 

I. SUMMARY AND BACKGROUND ............................................................... 3 

A. Purpose and Summary .................................................................... 3 

B. Background and Need for Legislation ............................................ 3 

C. Legislative History ........................................................................... 9 

II. EXPLANATION OF THE BILL ................................................................... 9 

Section 1: Short Title ............................................................................. 9 

Section 2: Repeal of Funding for the Social Services Block Grants 

Program ........................................................................................... 10 

II. VOTES OF THE COMMITTEE .................................................................... 11 

III. NEW BUDGET AUTHORITY AND TAX EXPENDITURES ..................... 12 

IV. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET 

OFFICE ....................................................................................................... 12 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF 

THE HOUSE .............................................................................................. 14 

A. Committee Oversight Findings and Recommendations ................ 14 

B. Statement of General Performance Goals and Objectives ............ 14 

C. Applicability of House Rule XXI 5(b) .............................................. 14 

D. Congressional Earmarks, Limited Tax Benefits, and Limited 

Tariff Benefits ................................................................................. 15 

E. Duplication of Federal Programs .................................................... 15 

F. Disclosure of Directed Rule Makings .............................................. 15 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED 15 

A. Text of Existing Law Amended or Repealed by the Bill, as 

Reported .......................................................................................... 15 

B. Changes in Existing Law Proposed by the Bill, as Reported ....... 245 

VII. DISSENTING VIEWS ................................................................................... 475 


emcdonald on DSK67QTVN1PROD with HEARING

emcdonald on DSK67QTVN1PROD with HEARING
114TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 114–462 

REDUCING DUPLICATIVE AND INEFFECTIVE FEDERAL 

FUNDING ACT 

MARCH 23, 2016.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. BRADY of Texas, from the Committee on Ways and Means, 

submitted the following 

R E P O R T 

together with 

DISSENTING VIEWS 

[To accompany H.R. 4724] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Ways and Means, to whom was referred the 

bill (H.R. 4724) to repeal the program of block grants to States for 

social services, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended 

do pass. 

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Reducing Duplicative and Ineffective Federal Funding Act’’. 

SEC. 2. REPEAL OF THE PROGRAM OF BLOCK GRANTS TO STATES FOR SOCIAL SERVICES. 

(a) REPEALS.—Sections 2001 through 2007 of the Social Security Act (42 U.S.C. 

1397–1397f) are repealed. 

(b) CONFORMING AMENDMENTS.— 

(1) Section 404(d) of the Social Security Act (42 U.S.C. 604(d)) is amended— 

(A) in paragraph (1), by striking ‘‘any or all of the following provisions 

of law:’’ and all that follows through ‘‘The’’ and inserting ‘‘the’’; 

(B) in paragraph (3)— 

(i) by striking ‘‘RULES’’ and all that follows through ‘‘any amount 

paid’’ and inserting ‘‘RULES.—Any amount paid’’; 

(ii) by striking ‘‘a provision of law specified in paragraph (1)’’ and inserting ‘‘the Child Care and Development Block Grant Act of 1990’’; 

and 

(iii) by striking subparagraph (B); and 


emcdonald on DSK67QTVN1PROD with HEARING
2 

(C) by striking paragraph (2) and redesignating paragraph (3) as paragraph (2). 

(2) Section 422(b) of the Social Security Act (42 U.S.C. 622(b)) is amended— 

(A) in paragraph (1)(A)— 

(i) by striking ‘‘administers or supervises’’ and inserting ‘‘administered or supervised’’; and 

(ii) by striking ‘‘subtitle 1 of title XX’’ and inserting ‘‘subtitle A of title 

XX (as in effect before the repeal of such subtitle)’’; and 

(B) in paragraph (2), by striking ‘‘under subtitle 1 of title XX,’’. 

(3) Section 471(a) of the Social Security Act (42 U.S.C. 671(a)) is amended— 

(A) in paragraph (4), by striking ‘‘, under subtitle 1 of title XX of this 

Act,’’; and 

(B) in paragraph (8), by striking ‘‘XIX, or XX’’ and inserting ‘‘or XIX’’. 

(4) Section 472(h)(1) of the Social Security Act (42 U.S.C. 672(h)(1)) is amended by striking the 2nd sentence. 

(5) Section 473(b) of the Social Security Act (42 U.S.C. 673(b)) is amended— 

(A) in paragraph (1), by striking ‘‘(3)’’ and inserting ‘‘(2)’’; 

(B) in paragraph (4), by striking ‘‘paragraphs (1) and (2)’’ and inserting 

‘‘paragraph (1)’’; and 

(C) by striking paragraph (2) and redesignating paragraphs (3) and (4) 

as paragraphs (2) and (3), respectively. 

(6) Section 504(b)(6) of the Social Security Act (42 U.S.C. 704(b)(6)) is amended in each of subparagraphs (A) and (B) by striking ‘‘, XIX, or XX’’ and inserting 

‘‘or XIX’’. 

(7) Section 1101(a)(1) of the Social Security Act (42 U.S.C. 1301(a)(1)) is 

amended by striking the penultimate sentence. 

(8) Section 1128(h) of the Social Security Act (42 U.S.C. 1320a–7(h)) is 

amended— 

(A) by adding ‘‘or’’ at the end of paragraph (2); and 

(B) by striking paragraph (3) and redesignating paragraph (4) as paragraph (3). 

(9) Section 1128A(i)(1) of the Social Security Act (42 U.S.C. 1320a–7a(i)(1)) is 

amended by striking ‘‘or subtitle 1 of title XX’’. 

(10) Section 1132(a)(1) of the Social Security Act (42 U.S.C. 1320b–2(a)(1)) is 

amended by striking ‘‘XIX, or XX’’ and inserting ‘‘or XIX’’. 

(11) Section 1902(e)(13)(F)(iii) of the Social Security Act (42 U.S.C. 

1396a(e)(13)(F)(iii)) is amended— 

(A) by striking ‘‘EXCLUSIONS’’ and inserting ‘‘EXCLUSION’’; and 

(B) by striking ‘‘an agency that determines eligibility for a program established under the Social Services Block Grant established under title XX or’’. 

(12) The heading for title XX of the Social Security Act is amended by striking 

‘‘BLOCK GRANTS TO STATES FOR SOCIAL SERVICES’’ and inserting 

‘‘HEALTH PROFESSIONS DEMONSTRATIONS AND ENVIRONMENTAL 

HEALTH CONDITION DETECTION’’. 

(13) The heading for subtitle A of title XX of the Social Security Act is amended by striking ‘‘Block Grants to States for Social Services’’ and inserting 

‘‘Health Professions Demonstrations and Environmental Health Condition Detection’’. 

(14) Section 16(k)(5)(B)(i) of the Food and Nutrition Act of 2008 (7 U.S.C. 

2025(k)(5)(B)(i)) is amended— 

(A) by striking ‘‘, or title XX,’’; and 

(B) by striking ‘‘, 1397 et seq.’’. 

(15) Section 402(b)(3) of the Personal Responsibility and Work Opportunity 

Reconciliation Act of 1996 (8 U.S.C. 1612(b)(3)) is amended by striking subparagraph (B) and redesignating subparagraph (C) as subparagraph (B). 

(16) Section 245A(h)(4)(I) of the Immigration and Nationality Act (8 U.S.C. 

1255a(h)(4)(I)) is amended by striking ‘‘, XVI, and XX’’ and inserting ‘‘and XVI’’. 

(17) Section 17 of the Richard B. Russell National School Lunch Act (42 

U.S.C. 1766) is amended— 

(A) in subsection (a)(2)— 

(i) in subparagraph (B)— 

(I) by striking ‘‘—’’ and all that follows through ‘‘(i)’’; 

(II) by striking ‘‘or’’ at the end of clause (i); and 

(III) by striking clause (ii); and 

(ii) in subparagraph (D)(ii), by striking ‘‘or title XX’’; and 

(B) in subsection (o)(2)(B)— 

(i) by striking ‘‘or title XX’’ each place it appears; and 

(ii) by striking ‘‘or XX’’. 


emcdonald on DSK67QTVN1PROD with HEARING
3 

(18) Section 201(b) of the Indian Child Welfare Act of 1978 (25 U.S.C. 1931(b)) 

is amended by striking ‘‘titles IV–B and XX’’ each place it appears and inserting 

‘‘part B of title IV’’. 

(19) Section 3803(c)(2)(C) of title 31, United States Code, is amended by striking clause (vi) and redesignating clauses (vii) through (xvi) as clauses (vi) 

through (xv), respectively. 

(20) Section 14502(d)(3) of title 40, United States Code, is amended— 

(A) by striking ‘‘and title XX’’; and 

(B) by striking ‘‘, 1397 et seq.’’. 

(21) Section 2006(a)(15) of the Public Health Service Act (42 U.S.C. 300z– 

5(a)(15)) is amended by striking ‘‘and title XX’’. 

(22) Section 203(b)(3) of the Older Americans Act of 1965 (42 U.S.C. 

3013(b)(3)) is amended by striking ‘‘XIX, and XX’’ and inserting ‘‘and XIX’’. 

(23) Section 213 of the Older Americans Act of 1965 (42 U.S.C. 3020d) is 

amended by striking ‘‘or title XX’’. 

(24) Section 306(d) of the Older Americans Act of 1965 (42 U.S.C. 3026(d)) is 

amended in each of paragraphs (1) and (2) by striking ‘‘titles XIX and XX’’ and 

inserting ‘‘title XIX’’. 

(25) Section 2605 of the Low-Income Home Energy Assistance Act of 1981 (42 

U.S.C. 8624) is amended in each of subsections (b)(4) and (j) by striking ‘‘under 

title XX of the Social Security Act,’’. 

(26) Section 602 of the Child Development Associate Scholarship Assistance 

Act of 1985 (42 U.S.C. 10901) is repealed. 

(27) Section 3(d)(1) of the Assisted Suicide Funding Restriction Act of 1997 

(42 U.S.C. 14402(d)(1)) is amended by striking subparagraph (C) and redesignating subparagraphs (D) through (K) as subparagraphs (C) through (J), respectively. 

(c) EFFECTIVE DATE.—The amendments made by this section shall take effect on 

October 1, 2016. 

I. SUMMARY AND BACKGROUND 

A. PURPOSE AND SUMMARY

H.R. 4724 as amended, the Reducing Duplicative and Ineffective 

Federal Funding Act, as ordered reported by the Committee on 

Ways and Means on March 16, 2016, repeals sections 2001 through 

2007 of title XX of the Social Security Act effective on October 1, 

2016, saving $1.3 billion in FY 2017, $2.9 billion over the first two 

years, and $16.5 billion over 10 years. 

B. BACKGROUND AND NEED FOR LEGISLATION

The predecessor to the current Social Services Block Grant 

(SSBG) began in 1956 as a way to match targeted state spending 

on specific services to help families leave welfare. Over the ensuing 

decades, SSBG evolved in both structure and purpose, and is now 

a 100 percent federal funding stream used to support a wide range 

of services to individuals regardless of their income. The Committee, after conducting an oversight hearing on program duplication, reviewing related reports by the nonpartisan Government Accountability Office (GAO), and examining the range of federallyfunded social services programs designed to serve similar purposes, 

has determined that the SSBG program has critical program flaws 

that argue for its elimination, which will both minimize program 

duplication and achieve significant savings for taxpayers. Accordingly, the Committee legislation eliminates the SSBG effective on 

October 1, 2016 (that is, for FY 2017 and beyond), saving $1.3 billion in FY 2017 and almost $17 billion over 10 years. 

The Committee is not opposed to the specific services funded by 

the SSBG, nor does the Committee believe that individuals receiving these services are not in need of assistance. Indeed, as is deVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00009 Fmt 6659 Sfmt 6602 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
4 

scribed in greater detail below, an important argument for ending 

the SSBG is the fact that it duplicates so many other programs, 

which generally provide far greater support and greater accountability to the recipients and taxpayers than SSBG currently offers 

for many of the same services, such as child care, child welfare, 

and Meals on Wheels. Further, the Committee is concerned with 

the design of this program, which lacks measures of effectiveness. 

In sum, the following key flaws in the SSBG program reflect how 

it clearly does not serve taxpayers well: 

1. No focus: SSBG spends $1.7 billion per year to support 29 different types of social services, including a category called ‘‘other.’’ 

The current program has no federal eligibility requirements for 

persons receiving social services funded from the SSBG. 

2. Duplicative: In the time since the SSBG was created in the 

1950s, more targeted welfare programs, which in fiscal year 2015 

spent more than $500 billion, have been created. These programs 

include Medicaid, Supplemental Security Income, Head Start, the 

Earned Income Tax Credit, numerous foster care and adoption programs, and other programs that are all much more targeted in purpose than SSBG. 

3. No state partnership: In contrast with other anti-poverty programs under the Committee’s jurisdiction, SSBG does not require 

any state contribution to match federal dollars spent through the 

program. As a result, SSBG is structured as a permanent state aid 

program rather than a focused anti-poverty program. 

4. No accountability: SSBG includes no accountability for results. 

State reporting on recipients is limited to a count of the number 

of people receiving services funded with SSBG dollars by general 

age categories, and there is no information collected on the demographics of recipients, their earnings, or their progress out of poverty and toward self-sufficiency. SSBG has only one outcome measure, which is simply a measure of state spending. This measure is 

calculated as the percentage difference between what states 

planned on spending in each category in a year, compared to what 

they ended up spending in each category for that year. 

History of the Social Services Block Grant 

The SSBG began as many federal programs do—as a relatively 

small program focused on helping a specific population achieve specific goals. But in ensuing years it devolved into a simple transfer 

from federal taxpayers to states for a broad array of services with 

no accountability for real results. 

Created in 1956, the precursor to the SSBG began as a 50/50 federal/state match program designed to provide services to help families on welfare move off public assistance. When many states declined to participate, in 1962 the federal match rate was increased 

to 75 percent, allowable spending was expanded to include child 

welfare, adult disability services, and elderly services, and eligibility was broadened to include potential welfare recipients. 

In 1967, the program was again expanded to cover job training 

and child care services, and the federal match rate was raised yet 

again to 85 percent. As a result, spending exploded from $282 million in FY 1967 to $1.7 billion in FY 1972, leading Congress to cap 

federal spending at $2.5 billion per year. In 1974, program services 

were broadened yet again to include an even wider range of social 


emcdonald on DSK67QTVN1PROD with HEARING
5 

1 U.S. Government Accountability Office. Human Services Programs: Opportunities to Reduce 

Inefficiencies. April 5, 2011. Accessed March 23, 2016. Available online: http://www.gao.gov/ 

assets/130/125910.pdf. 2 U.S. Government Accountability Office. Early Learning and Child Care: Federal Funds Support Multiple Programs with Similar Goals. February 5, 2014. Accessed March 23, 2016. Available online http://www.gao.gov/assets/670/660685.pdf. 3 U.S. Department of Health and Human Services. SSBG Annual Report 2012. January 21, 

2015. Accessed March 23, 2016. Available online: http://www.acf.hhs.gov/programs/ocs/ 

resource/ssbg-2012-annual-report. 

services, and eligibility was expanded to include anyone below 85 

percent of state median income (which is about $43,000 in current 

terms). 

This prior funding stream officially became the SSBG in 1981, 

when annual funding was set at $2.4 billion and all state matching 

and eligibility requirements were eliminated. Since 1981, annual 

SSBG funding rose to $2.8 billion in 1991 through 1995 before falling in the late 1990s and finally settling at $1.7 billion since 2001. 

Duplication between the SSBG and other social service programs 

On March 1, 2011, the Government Accountability Office (GAO) 

released its first annual report identifying duplicative and wasteful 

government programs, agencies, and offices. The report highlighted 

billions of dollars spent on redundant federal programs. In an April 

5, 2011 hearing of the Ways and Means Subcommittee on Human 

Resources on the GAO report on program duplication, GAO provided testimony on fragmentation, overlap, and duplication among 

programs under the Subcommittee’s jurisdiction, including SSBG. 

Summarizing their work on human services programs, GAO reported that: 

‘‘This array of programs plays a key role in supporting 

those in need, but our work has shown it to be too fragmented and overly complex—for clients to navigate, for 

program operators to administer efficiently, and for program managers and policymakers to assess program performance.’’ 1

States report spending SSBG funds on 29 different types of social 

services, including a catchall category called ‘‘other.’’ A significant 

portion of this State-reported SSBG spending is for services funded 

under a variety of other Federal programs, including a number 

under the jurisdiction of the Committee, as described in detail 

below. 

Child care 

The largest category of SSBG spending reported by states is day 

care for children. However, a 2014 GAO report cited the SSBG as 

one of 45 different programs and five tax provisions, administered 

by nine different federal agencies, that funds education and care 

for children under the age of five.2 In FY 2012, states spent $66 

million in SSBG funds on child care, while other federal programs 

provided much more funding.3 For example, Head Start spending 

has increased from $7.2 billion in FY 2010 to $8.6 billion in FY 

2015, a $1.4 billion per year increase in just the most recent five 

years. In addition, child care block grant spending has increased 

from $5.0 billion in FY 2010 to $5.4 billion in FY 2015, a $400 million per year increase in just the most recent five years. 


emcdonald on DSK67QTVN1PROD with HEARING
6 

4 Congressional Budget Office. Snapshot of Foster Care, Adoption Assistance, and Guardianship Assistance. April 18, 2013. Accessed March 23, 2016. Available online: https:// 

www.cbo.gov/publication/44082. 5 Ibid. 

6 U.S. Department of Health and Human Services. SSBG Annual Report 2012. January 21, 

2015. Accessed March 23, 2016. Available online: http://www.acf.hhs.gov/programs/ocs/ 

resource/ssbg-2012-annual-report. 7Government Accountability Office. Federal Disability Assistance: Wide Array of Programs 

Needs to be Examined in Light of 21st Century Challenges. June 2, 2005. Accessed March 23, 

2016. Available online: http://gao.gov/products/GAO-05-626. 

Child welfare 

Child welfare is a shared responsibility between the states and 

the federal government. Federal foster care and adoption assistance programs match state spending on child welfare services. In 

contrast, spending on child welfare under the SSBG program includes no state matching requirement. Recent and ongoing trends 

in child welfare funding suggest that, even without SSBG funds, 

federal support for various child welfare services and supports will 

only continue to grow in the years ahead. SSBG duplicates eight 

other child welfare programs under the jurisdiction of the Ways 

and Means Committee: Child Welfare Services, Promoting Safe and 

Stable Families, Foster Care/Adoption/Kinship Guardianship Assistance, Chafee Foster Care Independence Program, Chafee Education and Training Vouchers, Adoption and Legal Guardianship 

Incentives program, Temporary Assistance for Needy Families, and 

the Adoption Tax Credit. Other committees, such as the Committee 

on Education and the Workforce and the Judiciary Committee, also 

oversee child welfare programs. While SSBG has remained flat 

since 2001, other federal child welfare programs have grown by 

more than $1 billion from FY 2013 through FY 2016. Due to 

changes enacted in 2008, States will continue to receive increased 

federal funding to help support families for an increasing proportion of adoptions in the years ahead. In fact, according to CBO, federal funding for adoption alone is expected to rise by more than $1 

billion in the next eight years.4

States are also beginning to receive new Federal entitlement 

funding to support children placed with relatives. As the federal 

government begins paying for the cost of kinship care (i.e., when 

a child is placed with a relative or close family friend), CBO 

projects that federal reimbursement for kinship care will rise from 

$217 million per year in FY 2013 to $533 million per year by 2018, 

constituting a significant new source of child welfare funding for 

states and families with child welfare needs.5

Disability services 

In FY 2012, States reported spending 11 percent of their SSBG 

funds on special services for the disabled.6 A GAO report published 

in 2005 identified almost 200 programs in 20 agencies that provided over $120 billion in federal funds to serve people with disabilities. In addition to these programs, the GAO determined that 

Medicare and Medicaid spent $132 billion in 2002 on services for 

the disabled.7

Meals on wheels 

Seventeen States reported spending a small portion of their 

SSBG funds on home-delivered meals. According to the annual reVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
7 

8 Congressional Research Service. Older Americans Act: Funding Formulas (Report RS22549). 

March 19, 2015. 9Meals on Wheels Association of America. Financial Statements and Independent Auditors’ 

Report, December 31, 2014 and 2013. Accessed March 23, 2016. Available online: http:// 

www.mealsonwheelsamerica.org/docs/default-source/financials/meals-on-wheels-america-audited-financial-statement-2014.pdf?sfvrsn=2 10 U.S. Department of Health and Human Services. SSBG Annual Report 2012. January 21, 

2015. Accessed March 23, 2016. Available online: http://www.acf.hhs.gov/programs/ocs/resource/ssbg-2012-annual-report 11 U.S. Government Accountability Office. Elder Justice: Stronger Federal Leadership Could 

Enhance National Response to Elder Abuse. March, 2011. Accessed March 23, 2016. Available 

online: http://www.gao.gov/new.items/d11208.pdf 

port on SSBG, ‘‘home-delivered meals’’ constituted just one percent 

of SSBG expenditures in FY 2012. Other current government programs provide far more support for meals on wheels than SSBG, 

showing how it is duplicative. 

Primary funding for what is commonly referred to as ‘‘meals on 

wheels’’ is provided at the state and local level. Federal funding is 

provided under the Elderly Nutrition Services program authorized 

under Title III of the Older Americans Act. This program, under 

the jurisdiction of the Committee on Education and the Workforce, 

provides grants to state agencies on aging to support congregate 

and home-delivered meals for people aged 60 and older. According 

to CRS, Title III of the Older Americans Act spent $214 million on 

meals on wheels services in FY 2015. The share of Older Americans Act spending on Meals on Wheels has been rising in recent 

years.8

Significant funding for Meals on Wheels also comes from private 

sources. For example, the Meals on Wheels Association of America, 

reports that 95 percent of their funding comes from sources other 

than government grants.9

Adult Protective Services 

States report that about seven percent of their SSBG funding is 

for Adult Protective Services.10 However, a separate federal program was created for this specific purpose in 2010. Created as part 

of the Patient Protection and Affordable Care Act (P.L. 111–148), 

Subtitle B of Title XX of the Social Security Act titled ‘‘Elder Justice’’ established (1) an Elder Justice Coordinating Council; (2) an 

Advisory Board on Elder Abuse, Neglect, and Exploitation; (3) a 

new grant program for forensic centers to help organizations develop specialized expertise related to elder abuse, neglect, and exploitation; and (4) a number of new grant programs to promote 

elder justice. In addition to the Elder Justice program, Medicaid 

funds are also used for this purpose. In a March 2011 GAO report, 

GAO found that states received at least $42 million in FY 2009 

from Medicaid for Adult Protective Services programs.11

Beyond federal funding provided for this purpose, states should 

be—and are—a critical source of funding for Adult Protective Services. In the same March 2011 GAO report and survey, states reported that more than half of the budget for Adult Protective Services came from state and local revenues. In some states, the entire 

budget came from these sources. 


emcdonald on DSK67QTVN1PROD with HEARING
8 

12 U.S. Department of Health and Human Services. SSBG Annual Report 2012. January 21, 

2015. Accessed March 23, 2016. Available online: http://www.acf.hhs.gov/programs/ocs/resource/ssbg-2012-annual-report 13Multiple Employment and Training Programs: Providing Information on Colocating Services 

and Consolidating Administrative Structures Could Promote Efficiencies. Accessed March 23, 

2016. Available online: http://www.gao.gov/products/GAO–11–92 14 Budget of the United States Government. Fiscal Year 1999. Accessed March 23, 2016. Available online: http://www.gpo.gov/fdsys/pkg/BUDGET-1999-BUD/pdf/BUDGET-1999-BUD.pdf 

Education and training 

States reported spending $7 million in SSBG funds on education 

and training services in FY 2012.12 A GAO report on education and 

training programs revealed that in FY2009 the federal government 

spent $18 billion on 47 different education and training programs 

across nine federal agencies; and only one in 10 of these programs 

had been evaluated for effectiveness in the prior seven years.13

State partnership lacking in SSBG 

Although the SSBG program is referred to as a block grant, 

SSBG lacks many features commonly associated with block grants 

and related federal funding streams. First, the program contains no 

match requirement. Other block grant programs, such as Temporary Assistance for Needy Families (TANF) and the Child Care 

and Development Fund (CCDF) require states to maintain a specified spending level in order to receive federal funding. Although 

SSBG originally began as a program requiring states to match federal spending, the match was eliminated over 30 years ago and 

states are no longer required to invest state dollars to receive funding. 

SSBG has no accountability 

Unlike other block grants, the SSBG is not targeted to a specific 

population through federal eligibility requirements. The program 

also lacks data on recipients or program services that would reveal 

the impact and effectiveness of the program. Due to the lack of eligibility requirements and metrics on program performance, the program does not include financial penalties for state failure to satisfy 

program purposes and thus states cannot be held accountable for 

achieving any specific outcomes such as reducing poverty, promoting work, or ending dependence on government benefits. 

These ongoing flaws have resulted in SSBG being repeatedly 

cited in both Democrat and Republican budgets as a program lacking accountability for results. For example, President Clinton’s FY 

1999 budget proposed substantial reductions in funding for the 

SSBG, stating that ‘‘the budget targets funding to programs that 

can better demonstrate positive performance. The Social Services 

Block Grant supports a broad range of social service programs, but 

without statutory performance goals or measures of progress.’’ 14

In proposing a reduction in funding for SSBG in President Bush’s 

FY 2007 budget, the administration stated that ‘‘the SSBG program was rated Results Not Demonstrated in the PART process, 

was found to lack a national system of performance measures 

against which program performance can be measured and improvements sought, and was critiqued for an absence of evaluations of 

sufficient scope of SSBG-funded activities and programs. The program’s flexibility and lack of state reporting requirements pose a 


emcdonald on DSK67QTVN1PROD with HEARING
9 

15 U.S. Department of Health and Human Services. FY 2007 ACF Congressional Justification: 

Social Services Block Grant. Accessed March 23, 2016. Available online: http:// 

www.acf.hhs.gov/programs/olab/fy-2007-acf-congressional-justification 16 House Document 110–123. A Request for Budget Amendment for Fiscal Year 2009. Accessed 

March 23, 2016. Available online: http://www.gpo.gov/fdsys/pkg/CDOC-110hdoc123/pdf/CDOC110hdoc123.pdf 17 Human Resources Subcommittee Discusses Need to Better Coordinate Dozens of AntiPoverty Programs. November 3, 2015. Accessed March 23, 2016. Available online: http:// 

waysandmeans.house.gov/human-resources-subcommittee-discusses-need-to-better-coordinate-dozens-of-anti-poverty-programs/ 

challenge in developing measures.’’ 15 In later proposing the elimination of funding for the program, the Bush administration stated 

‘‘The program’s minimal requirements maximize state flexibility 

but, at the same time, do not ensure that funded activities are effective. This is because SSBG is a funding stream rather than a 

program with measurable performance objectives.’’ 16

C. LEGISLATIVE HISTORY

Background 

H.R. 4724, the Reducing Duplicative and Ineffective Federal 

Funding Act, was introduced on March 10, 2016, by Representative 

Kevin Brady, and was referred to the Committee on Ways and 

Means. 

Committee hearings 

On November 3, 2015, the Human Resources Subcommittee held 

a hearing on the need to better coordinate federal social services 

programs to improve services for individuals in need.17 At the hearing, the Subcommittee released a chart highlighting the complexity 

of the current system, with more than 80 federal anti-poverty programs designed to help those with limited income—in many cases 

illustrating how these programs are overlapping and duplicative. In 

prior years, the Human Resources Subcommittee also held hearings on duplication in social services programs and the lack of accountability in many federally-funded social service programs. 

Committee action 

The Committee on Ways and Means marked up H.R. 4724, the 

Reducing Duplicative and Ineffective Federal Funding Act, on 

March 16, 2016. The bill, H.R. 4724, was ordered favorably reported to the House of Representatives as amended by a roll call 

vote of 20 yeas to 16 nays (with a quorum being present). 

II. EXPLANATION OF THE BILL 

SECTION 1: SHORT TITLE

Present law 

No provision. 

Explanation of provision 

This section contains the short title of the bill, the ‘‘Reducing Duplicative and Ineffective Federal Funding Act.’’ 

Reason for change 

The Committee believes that the short title reflects the policy actions included in the legislation. 


emcdonald on DSK67QTVN1PROD with HEARING
10 

Effective date 

The provision is effective upon enactment. 

SECTION 2: REPEAL OF FUNDING FOR THE SOCIAL SERVICES BLOCK

GRANTS PROGRAM

Present law 

The SSBG is permanently authorized by Title XX, Subtitle A, of 

the Social Security Act as a ‘‘capped’’ entitlement to states. This 

means that states (and territories) are entitled to their share of 

funds, as determined by formula, out of an amount that is capped 

in statute at a specific level. Although social services for certain 

welfare recipients have been authorized under various titles of the 

Social Security Act since 1956, the SSBG in its current form was 

created in 1981 (P.L. 97–35). Block grant funds are given to states 

to achieve a wide range of social policy goals, which include promoting self-sufficiency, preventing child abuse, and supporting 

community-based care for the elderly and disabled. The FY2016 appropriations law (P.L. 114–113) appropriated $1.7 billion for the SSBG. However, this amount was reduced to $1.584 

billion due to budget sequestration. The FY2016 appropriations law 

also maintained a provision, included in annual appropriations 

laws since FY2001, allowing states to transfer up to 10% of their 

Temporary Assistance for Needy Families (TANF) block grants to 

the SSBG. In addition to annual appropriations, the SSBG occasionally receives supplemental appropriations to assist states and 

territories in responding to natural disasters, including in FY2006, 

FY2008, and FY2013. 

Explanation of provision 

Subsection (a) of this section repeals sections 2001 through 2007 

of title XX of the Social Security Act, which now provides authorization for the Social Services Block Grant (SSBG). Subsection (b) 

of this section makes various conforming amendments to the Social 

Security Act and other laws to remove references to the SSBG 

given its repeal. Subsection (c) of this section specifies the effective 

date of the repeal of the SSBG, which is October 1, 2016. 

Reason for change 

The SSBG began as a focused program created to match state 

spending on helping welfare recipients reduce their dependence on 

government benefits. Over ensuing decades, the program evolved to 

cover more services, at greater federal cost, for more beneficiaries, 

and with less accountability and fewer measurable results. Since 

its creation, dozens of other programs have been created to fund 

similar services, most of which contain focused objectives, include 

better oversight, and can point to tangible results. 

Congress has generally agreed to share the cost of social services 

with states. For those services not funded by the federal government, states support services with their own state funds, local 

funds, or even private dollars. The role of the federal government 

has never been to pay for the full cost of all types of programs and 

services that states provide to assist families in need, nor should 

it be. Ending the duplicative and unaccountable SSBG program 

means that states will have to make choices in prioritizing assistVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00016 Fmt 6659 Sfmt 6602 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
11 

18Fiscal Year 2013 Budget of the U.S. Government: Cutting Waste, Reducing the Deficit, and 

Asking All to Pay Their Fare Share. Accessed March 23, 2016. Available online: http:// 

www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/cutting.pdf. 

ance and services. However, to support them and individuals in 

need, states will continue to receive significant and rising funding 

from the federal government for a range of other social service programs, most of which requires some state contribution—unlike 

SSBG. The Committee believes this will provide for a stronger 

partnership between the federal government and states and in the 

long run provide better social services for those in need. 

The decision to end funding for this program is based on the 

Committee’s view of the federal government’s proper role in helping 

states administer social services, as well as on serious flaws in the 

design of the SSBG program. The Committee does not believe continued funding for SSBG represents a wise and effective use of taxpayer dollars, especially as the Congress continues to provide hundreds of billions of dollars each year to states for a range of social 

services in programs that are more focused and more accountable 

than the SSBG. 

The federal government can not afford to award money to states 

with no focus, no accountability, and no proven results. President 

Obama said as much in his FY 2013 budget document, in which 

he stated ‘‘for far too long, many [g]overnment programs have been 

allowed to continue or to grow even when their objectives are no 

longer clear and they lack rigorous assessment of whether the programs are achieving the desired goals. The result has been the profusion of programs that are duplicative, ineffective, or outdated— 

at a significant cost to taxpayers.’’ 18 When a program is known to 

fund the same services that are provided in literally dozens of 

other federal programs, as well as having been repeatedly cited as 

ineffective, the Committee believes it is our responsibility to say it 

should end. 

Effective date 

The provision is effective on October 1, 2016. 

II. VOTES OF THE COMMITTEE 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the vote of the Committee on Ways and Means in its consideration of H.R. 4724, the Reducing Duplicative and Ineffective 

Federal Funding Act, on March 16, 2016. 

The Committee on Ways and Means marked up H.R. 4724, the 

Reducing Duplicative and Ineffective Federal Funding Act, on 

March 16, 2016. The bill, H.R. 4724, was ordered favorably reported to the House of Representatives as amended by a roll call 

vote of 20 yeas to 16 nays (with a quorum being present). The vote 

was as follows: 

Representative Yea Nay Present Representative Yea Nay Present 

Mr. Brady .................................. X Mr. Levin .................................. X 

Mr. Johnson ............................... X Mr. Rangel ............................... X 

Mr. Nunes ................................. X Mr. McDermott ......................... X 

Mr. Tiberi .................................. X Mr. Lewis .................................. X 

Mr. Reichert .............................. X Mr. Neal ................................... X 


emcdonald on DSK67QTVN1PROD with HEARING
12 

Representative Yea Nay Present Representative Yea Nay Present 

Mr. Boustany ............................. X Mr. Becerra .............................. X 

Mr. Roskam ............................... X Mr. Doggett .............................. X 

Mr. Price ................................... ......... Mr. Thompson .......................... X 

Mr. Buchanan ........................... ......... Mr. Larson ................................ X 

Mr. Smith (NE) .......................... X Mr. Blumenauer ....................... X 

Ms. Jenkins ............................... X Mr. Kind ................................... X 

Mr. Paulsen ............................... X Mr. Pascrell .............................. X 

Mr. Marchant ............................ X Mr. Crowley .............................. X 

Ms. Black .................................. X Mr. Davis .................................. X 

Mr. Reed ................................... X Ms. Sanchez ............................. X 

Mr. Young ................................. X 

Mr. Kelly .................................... X 

Mr. Renacci ............................... X 

Mr. Meehan ............................... X 

Ms. Noem .................................. X 

Mr. Holding ............................... X 

Mr. Smith (MO) ......................... .........

Mr. Dold .................................... ......... X 

Mr. Rice .................................... X 

III. NEW BUDGET AUTHORITY AND TAX EXPENDITURES 

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee states that the bill involves no new budget authority or tax expenditure budget authority. 

IV. COST ESTIMATE PREPARED BY THE 

CONGRESSIONAL BUDGET OFFICE 

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives, requiring a cost estimate prepared by 

the CBO, the Committee sets forth the following estimate and comparison prepared by the Director of the Congressional Budget Office. 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, March 21, 2016. 

Hon. KEVIN BRADY, 

Chairman Committee on Ways and Means, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 4724, the Reducing Duplicative and Ineffective Federal Funding Act. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Susanne S. Mehlman. 

Sincerely, 

KEITH HALL. 

Enclosure. 

H.R. 4724—Reducing Duplicative and Ineffective Federal Funding 

Act 

Summary: H.R. 4724 would amend title XX of the Social Security 

Act to repeal the Social Services Block Grant (SSBG) program, effective October 1, 2016. SSBG, which is administered by the Department of Health and Human Services, supports a variety of activities, including child welfare services, day care for both children 


emcdonald on DSK67QTVN1PROD with HEARING
13 

and adults, counseling services, home-delivered meals, and special 

services for the disabled. This program has a permanent authorization of $1.7 billion per year. Although funding for the program is 

provided in annual appropriation acts, spending for SSBG is classified as direct spending. CBO estimates that enacting this legislation would reduce direct spending by $16.5 billion over the 2016– 

2026 period. 

Because enacting the legislation would affect direct spending, 

pay-as-you-go procedures apply. Enacting H.R. 4724 would not affect revenues. CBO estimates that enacting H.R. 4724 would not 

increase net direct spending or on-budget deficits in any of the four 

consecutive 10-year periods beginning in 2027. 

H.R. 4724 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA). 

Estimated cost to the federal government: The estimated budgetary effect of this legislation is shown in the following table. The 

costs of this legislation fall within budget function 500 (education, 

training, employment, and social services). 

By fiscal year, in billions of dollars— 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016–2021 2016–2026 

DECREASE IN DIRECT SPENDING 

Estimated 

Budget Authority ......... 0 ¥1.6 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥8.4 ¥16.9 

Estimated Outlays ............. 0 ¥1.3 ¥1.6 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥8.0 ¥16.5 

Basis of estimate: For this estimate, CBO assumes that H.R. 

4724 will be enacted by the start of 2017 and outlays will follow 

historical patterns. Under the procedures established in the Budget 

Control Act of 2011 for sequestration, the Office of Management 

and Budget has announced that the amount appropriated for SSBG 

in 2017 will be reduced by 6.9 percent. Thus, although SSBG has 

an annual authorization of $1.7 billion, the savings in budget authority in 2017 would be $1.6 billion, which would lead to outlay 

savings of $1.3 billion that year. 

Pay-As-You-Go considerations: The Statutory Pay-As-You-Go Act 

of 2010 establishes budget-reporting and enforcement procedures 

for legislation affecting direct spending or revenues. CB0 estimates 

that repealing SSBG would reduce direct spending over the 2016– 

2026 period as shown in the following table. 

CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 4724 AS ORDERED REPORTED BY THE 

HOUSE COMMITTEE ON WAYS AND MEANS ON MARCH 16, 2016 

By fiscal year, in billions of dollars— 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2016–2021 2016–2026 

NET DECREASE IN THE DEFICIT 

Statutory PayAs-You-Go 

Impact ........ 0 ¥1.3 ¥1.6 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥1.7 ¥8.0 ¥16.5 

Increase in long-term direct spending and deficits: CBO estimates that enacting the legislation would not increase net direct 


emcdonald on DSK67QTVN1PROD with HEARING
14 

spending or on-budget deficits in any of the four consecutive 10- 

year periods beginning in 2027. 

Intergovernmental and private-sector impact: For large entitlement programs like the SSBG program, UMRA defines a reduction 

in funding as an intergovernmental mandate if the affected governments lack authority to amend their financial or programmatic responsibilities to continue providing required services. The bill 

would repeal funding for the SSBG program and all conditions of 

assistance associated with the program. Because states would be 

under no obligation to continue providing services funded by SSBG, 

the repeal would not impose an intergovernmental mandate as defined in UMRA. However, states would either have to eliminate 

services or use their own funds to support current programs. CBO 

estimates that the repeal would reduce federal aid to states by $1.3 

billion in 2017 and by $16.5 billion over the 2017–2026 period. 

The bill contains no private-sector mandates as defined in 

UMRA. 

Estimate prepared by: Federal Costs: Jennifer Gray and Susanne 

S. Mehlman; Impact on State, Local, and Tribal Governments: 

J’Nell Blanco Suchy; Impact on the Private Sector: Paige Piper/ 

Bach. 

Estimate approved by: H. Samuel Papenfuss, Deputy Assistant 

Director for Budget Analysis. 

V. OTHER MATTERS TO BE DISCUSSED UNDER THE 

RULES OF THE HOUSE 

A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee advises that the findings 

and recommendations of the Committee, based on oversight activities under clause 2(b)(1) of Rule X of the Rules of the House of Representatives, are incorporated in the description portions of this report. 

B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

With respect to the requirement of clause 3(c)(4) of rule XIII of 

the Rules of the House of Representatives, the performance goals 

and objectives of this legislation are to end funding for the Social 

Services Block Grant, beginning October 1, 2016. 

C. APPLICABILITY OF HOUSE RULE XXI 5(b) 

Rule XXI 5(b) of the Rules of the House of Representatives provides, in part, that ‘‘A bill or joint resolution, amendment, or conference report carrying a Federal income tax rate increase may not 

be considered as passed or agreed to unless so determined by a 

vote of not less than three-fifths of the Members voting, a quorum 

being present.’’ The Committee has carefully reviewed the bill, and 

states that the bill does not involve any Federal income tax rate 

increases within the meaning of the rule. 


emcdonald on DSK67QTVN1PROD with HEARING
15 

D. CONGRESSIONAL EARMARKS, LIMITED TAX BENEFITS, AND

LIMITED TARIFF BENEFITS

With respect to clause 9 of rule XXI of the Rules of the House 

of Representatives, the Committee has carefully reviewed the provisions of the bill, and states that the provisions of the bill do not 

contain any congressional earmarks, limited tax benefits, or limited 

tariff benefits within the meaning of the rule. 

E. DUPLICATION OF FEDERAL PROGRAMS

In compliance with Sec. 3(g)(2) of H. Res. 5 (114th Congress), the 

Committee states that no provision of the bill establishes or reauthorizes: (1) a program of the Federal Government known to be duplicative of another Federal program; (2) a program included in any 

report from the Government Accountability Office to Congress pursuant to section 21 of Public Law 111–139; or (3) a program related 

to a program identified in the most recent Catalog of Federal Domestic Assistance, published pursuant to the Federal Program Information Act (Pub. L. No. 95–220, as amended by Pub. L. No. 98– 

169). 

F. DISCLOSURE OF DIRECTED RULE MAKINGS

In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), the 

following statement is made concerning directed rule makings: The 

Committee estimates that the bill requires no directed rule makings within the meaning of such section. 

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

A. TEXT OF EXISTING LAW AMENDED OR REPEALED BY THE BILL, AS

REPORTED

In compliance with clause 3(e)(1)(A) of rule XIII of the Rules of 

the House of Representatives, the text of each section proposed to 

be amended or repealed by the bill, as reported, is shown below: 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e)(1)(A) of rule XIII of the Rules of 

the House of Representatives, the text of each section proposed to 

be amended or repealed by the bill, as reported, is shown below: 

SOCIAL SECURITY ACT 

* * * * * * * 

TITLE IV—GRANTS TO STATES FOR AID AND SERVICES TO 

NEEDY FAMILIES WITH CHILDREN AND FOR CHILD-WELFARE SERVICES 

PART A—BLOCK GRANTS TO STATES FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
16 

SEC. 404. USE OF GRANTS. 

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

grant is made under section 403 may use the grant— 

(1) in any manner that is reasonably calculated to accomplish the purpose of this part, including to provide low income 

households with assistance in meeting home heating and cooling costs; or 

(2) in any manner that the State was authorized to use 

amounts received under part A or F, as such parts were in effect on September 30, 1995, or (at the option of the State) August 21, 1996. 

(b) LIMITATION ON USE OF GRANT FOR ADMINISTRATIVE PUR- POSES.— 

(1) LIMITATION.—A State to which a grant is made under 

section 403 shall not expend more than 15 percent of the grant 

for administrative purposes. 

(2) EXCEPTION.—Paragraph (1) shall not apply to the use of 

a grant for information technology and computerization needed 

for tracking or monitoring required by or under this part. 

(c) AUTHORITY TO TREAT INTERSTATE IMMIGRANTS UNDER RULES

OF FORMER STATE.—A State operating a program funded under 

this part may apply to a family the rules (including benefit 

amounts) of the program funded under this part of another State 

if the family has moved to the State from the other State and has 

resided in the State for less than 12 months. 

(d) AUTHORITY TO USE PORTION OF GRANT FOR OTHER PURPOSES.— 

(1) IN GENERAL.—Subject to paragraph (2), a State may use 

not more than 30 percent of the amount of any grant made to 

the State under section 403(a) for a fiscal year to carry out a 

State program pursuant to any or all of the following provisions of law: 

(A) Subtitle A of title XX of this Act. 

(B) The Child Care and Development Block Grant Act of 

1990. 

(2) LIMITATION ON AMOUNT TRANSFERABLE TO SUBTITLE 1 OF

TITLE XX PROGRAMS.— 

(A) IN GENERAL.—A State may use not more than the 

applicable percent of the amount of any grant made to the 

State under section 403(a) for a fiscal year to carry out 

State programs pursuant to subtitle 1 of title XX. 

(B) APPLICABLE PERCENT.—For purposes of subparagraph (A), the applicable percent is 4.25 percent in the 

case of fiscal year 2001 and each succeeding fiscal year. 

(3) APPLICABLE RULES.— 

(A) IN GENERAL.—Except as provided in subparagraph 

(B) of this paragraph, any amount paid to a State under 

this part that is used to carry out a State program pursuant to a provision of law specified in paragraph (1) shall 

not be subject to the requirements of this part, but shall 

be subject to the requirements that apply to Federal funds 

provided directly under the provision of law to carry out 

the program, and the expenditure of any amount so used 

shall not be considered to be an expenditure under this 

part. 


emcdonald on DSK67QTVN1PROD with HEARING
17 

(B) EXCEPTION RELATING TO SUBTITLE 1 OF TITLE XX PROGRAMS.—All amounts paid to a State under this part that 

are used to carry out State programs pursuant to subtitle 

1 of title XX shall be used only for programs and services 

to children or their families whose income is less than 200 

percent of the income official poverty line (as defined by 

the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus 

Budget Reconciliation Act of 1981) applicable to a family 

of the size involved. 

(e) AUTHORITY TO CARRY OVER CERTAIN AMOUNTS FOR BENEFITS

OR SERVICES OR FOR FUTURE CONTINGENCIES.—A State or tribe 

may use a grant made to the State or tribe under this part for any 

fiscal year to provide, without fiscal year limitation, any benefit or 

service that may be provided under the State or tribal program 

funded under this part. 

(f) AUTHORITY TO OPERATE EMPLOYMENT PLACEMENT PROGRAM.—A State to which a grant is made under section 403 may 

use the grant to make payments (or provide job placement vouchers) to State-approved public and private job placement agencies 

that provide employment placement services to individuals who receive assistance under the State program funded under this part. 

(g) IMPLEMENTATION OF ELECTRONIC BENEFIT TRANSFER SYSTEM.—A State to which a grant is made under section 403 is encouraged to implement an electronic benefit transfer system for 

providing assistance under the State program funded under this 

part, and may use the grant for such purpose. 

(h) USE OF FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS.— 

(1) IN GENERAL.—A State to which a grant is made under 

section 403 may use the grant to carry out a program to fund 

individual development accounts (as defined in paragraph (2)) 

established by individuals eligible for assistance under the 

State program funded under this part. 

(2) INDIVIDUAL DEVELOPMENT ACCOUNTS.— 

(A) ESTABLISHMENT.—Under a State program carried out 

under paragraph (1), an individual development account 

may be established by or on behalf of an individual eligible 

for assistance under the State program operated under 

this part for the purpose of enabling the individual to accumulate funds for a qualified purpose described in subparagraph (B). 

(B) QUALIFIED PURPOSE.—A qualified purpose described 

in this subparagraph is 1 or more of the following, as provided by the qualified entity providing assistance to the individual under this subsection: 

(i) POSTSECONDARY EDUCATIONAL EXPENSES.—Postsecondary educational expenses paid from an individual development account directly to an eligible educational institution. 

(ii) FIRST HOME PURCHASE.—Qualified acquisition 

costs with respect to a qualified principal residence for 

a qualified first-time homebuyer, if paid from an individual development account directly to the persons to 

whom the amounts are due. 


emcdonald on DSK67QTVN1PROD with HEARING
18 

(iii) BUSINESS CAPITALIZATION.—Amounts paid from 

an individual development account directly to a business capitalization account which is established in a 

federally insured financial institution and is restricted 

to use solely for qualified business capitalization expenses. 

(C) CONTRIBUTIONS TO BE FROM EARNED INCOME.—An individual may only contribute to an individual development 

account such amounts as are derived from earned income, 

as defined in section 911(d)(2) of the Internal Revenue 

Code of 1986. 

(D) WITHDRAWAL OF FUNDS.—The Secretary shall establish such regulations as may be necessary to ensure that 

funds held in an individual development account are not 

withdrawn except for 1 or more of the qualified purposes 

described in subparagraph (B). 

(3) REQUIREMENTS.— 

(A) IN GENERAL.—An individual development account established under this subsection shall be a trust created or 

organized in the United States and funded through periodic contributions by the establishing individual and 

matched by or through a qualified entity for a qualified 

purpose (as described in paragraph (2)(B)). 

(B) QUALIFIED ENTITY.—As used in this subsection, the 

term ‘‘qualified entity’’ means— 

(i) a not-for-profit organization described in section 

501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; 

or 

(ii) a State or local government agency acting in cooperation with an organization described in clause (i). 

(4) NO REDUCTION IN BENEFITS.—Notwithstanding any other 

provision of Federal law (other than the Internal Revenue 

Code of 1986) that requires consideration of 1 or more financial 

circumstances of an individual, for the purpose of determining 

eligibility to receive, or the amount of, any assistance or benefit authorized by such law to be provided to or for the benefit 

of such individual, funds (including interest accruing) in an individual development account under this subsection shall be 

disregarded for such purpose with respect to any period during 

which such individual maintains or makes contributions into 

such an account. 

(5) DEFINITIONS.—As used in this subsection— 

(A) ELIGIBLE EDUCATIONAL INSTITUTION.—The term ‘‘eligible educational institution’’ means the following: 

(i) An institution described in section 481(a)(1) or 

1201(a) of the Higher Education Act of 1965 (20 U.S.C. 

1088(a)(1) or 1141(a)), as such sections are in effect on 

the date of the enactment of this subsection. 

(ii) An area vocational education school (as defined 

in subparagraph (C) or (D) of section 521(4) of the Carl 

D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2471(4))) which is in any State 

(as defined in section 521(33) of such Act), as such secVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00024 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
19 

tions are in effect on the date of the enactment of this 

subsection. 

(B) POST-SECONDARY EDUCATIONAL EXPENSES.—The term 

‘‘post-secondary educational expenses’’ means— 

(i) tuition and fees required for the enrollment or attendance of a student at an eligible educational institution, and 

(ii) fees, books, supplies, and equipment required for 

courses of instruction at an eligible educational institution. 

(C) QUALIFIED ACQUISITION COSTS.—The term ‘‘qualified 

acquisition costs’’ means the costs of acquiring, constructing, or reconstructing a residence. The term includes 

any usual or reasonable settlement, financing, or other 

closing costs. 

(D) QUALIFIED BUSINESS.—The term ‘‘qualified business’’ 

means any business that does not contravene any law or 

public policy (as determined by the Secretary). 

(E) QUALIFIED BUSINESS CAPITALIZATION EXPENSES.—The 

term ‘‘qualified business capitalization expenses’’ means 

qualified expenditures for the capitalization of a qualified 

business pursuant to a qualified plan. 

(F) QUALIFIED EXPENDITURES.—The term ‘‘qualified expenditures’’ means expenditures included in a qualified 

plan, including capital, plant, equipment, working capital, 

and inventory expenses. 

(G) QUALIFIED FIRST-TIME HOMEBUYER.— (i) IN GENERAL.—The term ‘‘qualified first-time 

homebuyer’’ means a taxpayer (and, if married, the 

taxpayer’s spouse) who has no present ownership interest in a principal residence during the 3-year period 

ending on the date of acquisition of the principal residence to which this subsection applies. 

(ii) DATE OF ACQUISITION.—The term ‘‘date of acquisition’’ means the date on which a binding contract to 

acquire, construct, or reconstruct the principal residence to which this subparagraph applies is entered 

into. 

(H) QUALIFIED PLAN.—The term ‘‘qualified plan’’ means 

a business plan which— 

(i) is approved by a financial institution, or by a 

nonprofit loan fund having demonstrated fiduciary integrity, 

(ii) includes a description of services or goods to be 

sold, a marketing plan, and projected financial statements, and 

(iii) may require the eligible individual to obtain the 

assistance of an experienced entrepreneurial advisor. 

(I) QUALIFIED PRINCIPAL RESIDENCE.—The term ‘‘qualified principal residence’’ means a principal residence (within the meaning of section 1034 of the Internal Revenue 

Code of 1986), the qualified acquisition costs of which do 

not exceed 100 percent of the average area purchase price 

applicable to such residence (determined in accordance 

with paragraphs (2) and (3) of section 143(e) of such Code). 


emcdonald on DSK67QTVN1PROD with HEARING
20 

(i) SANCTION WELFARE RECIPIENTS FOR FAILING TO ENSURE THAT

MINOR DEPENDENT CHILDREN ATTEND SCHOOL.—A State to which 

a grant is made under section 403 shall not be prohibited from 

sanctioning a family that includes an adult who has received assistance under any State program funded under this part attributable to funds provided by the Federal Government or under the 

supplemental nutrition assistance program, as defined in section 

3(l) of the Food and Nutrition Act of 2008, if such adult fails to ensure that the minor dependent children of such adult attend school 

as required by the law of the State in which the minor children reside. 

(j) REQUIREMENT FOR HIGH SCHOOL DIPLOMA OR EQUIVALENT.— 

A State to which a grant is made under section 403 shall not be 

prohibited from sanctioning a family that includes an adult who is 

older than age 20 and younger than age 51 and who has received 

assistance under any State program funded under this part attributable to funds provided by the Federal Government or under the 

supplemental nutrition assistance program, as defined in section 

3(l) of the Food and Nutrition Act of 2008, if such adult does not 

have, or is not working toward attaining, a secondary school diploma or its recognized equivalent unless such adult has been determined in the judgment of medical, psychiatric, or other appropriate professionals to lack the requisite capacity to complete successfully a course of study that would lead to a secondary school 

diploma or its recognized equivalent. 

(k) LIMITATIONS ON USE OF GRANT FOR MATCHING UNDER CERTAIN FEDERAL TRANSPORTATION PROGRAM.— 

(1) USE LIMITATIONS.—A State to which a grant is made 

under section 403 may not use any part of the grant to match 

funds made available under section 3037 of the Transportation 

Equity Act for the 21st Century, unless— 

(A) the grant is used for new or expanded transportation 

services (and not for construction) that benefit individuals 

described in subparagraph (C), and not to subsidize current operating costs; 

(B) the grant is used to supplement and not supplant 

other State expenditures on transportation; 

(C) the preponderance of the benefits derived from such 

use of the grant accrues to individuals who are— 

(i) recipients of assistance under the State program 

funded under this part; 

(ii) former recipients of such assistance; 

(iii) noncustodial parents who are described in section 403(a)(5)(C)(iii); and 

(iv) low-income individuals who are at risk of qualifying for such assistance; and 

(D) the services provided through such use of the grant 

promote the ability of such recipients to engage in work activities (as defined in section 407(d)). 

(2) AMOUNT LIMITATION.—From a grant made to a State 

under section 403(a), the amount that a State uses to match 

funds described in paragraph (1) of this subsection shall not 

exceed the amount (if any) by which 30 percent of the total 

amount of the grant exceeds the amount (if any) of the grant 


emcdonald on DSK67QTVN1PROD with HEARING
21 

that is used by the State to carry out any State program described in subsection (d)(1) of this section. 

(3) RULE OF INTERPRETATION.—The provision by a State of a 

transportation benefit under a program conducted under section 3037 of the Transportation Equity Act for the 21st Century, to an individual who is not otherwise a recipient of assistance under the State program funded under this part, using 

funds from a grant made under section 403(a) of this Act, shall 

not be considered to be the provision of assistance to the individual under the State program funded under this part. 

* * * * * * * 

PART B—CHILD AND FAMILY SERVICES 

Subpart 1—Stephanie Tubbs Jones Child Welfare 

Services Program 

* * * * * * * 

STATE PLANS FOR CHILD WELFARE SERVICES

SEC. 422. (a) In order to be eligible for payment under this subpart, a State must have a plan for child welfare services which has 

been developed jointly by the Secretary and the State agency designated pursuant to subsection (b)(1), and which meets the requirements of subsection (b). 

(b) Each plan for child welfare services under this subpart 

shall— 

(1) provide that (A) the individual or agency that administers 

or supervises the administration of the State’s services program under subtitle 1 of title XX will administer or supervise 

the administration of the plan (except as otherwise provided in 

section 103(d) of the Adoption Assistance and Child Welfare 

Act of 1980), and (B) to the extent that child welfare services 

are furnished by the staff of the State agency or local agency 

administering the plan, a single organizational unit in such 

State or local agency, as the case may be, will be responsible 

for furnishing such child welfare services; 

(2) provide for coordination between the services provided for 

children under the plan and the services and assistance provided under subtitle 1 of title XX, under the State program 

funded under part A, under the State plan approved under 

subpart 2 of this part, under the State plan approved under 

the State plan approved under part E, and under other State 

programs having a relationship to the program under this subpart, with a view to provision of welfare and related services 

which will best promote the welfare of such children and their 

families; 

(3) include a description of the services and activities which 

the State will fund under the State program carried out pursuant to this subpart, and how the services and activities will 

achieve the purpose of this subpart; 

(4) contain a description of— 

(A) the steps the State will take to provide child welfare 

services statewide and to expand and strengthen the range 


emcdonald on DSK67QTVN1PROD with HEARING
22 

of existing services and develop and implement services to 

improve child outcomes; and 

(B) the child welfare services staff development and 

training plans of the State; 

(5) provide, in the development of services for children, for 

utilization of the facilities and experience of voluntary agencies 

in accordance with State and local programs and arrangements, as authorized by the State; 

(6) provide that the agency administering or supervising the 

administration of the plan will furnish such reports, containing 

such information, and participate in such evaluations, as the 

Secretary may require; 

(7) provide for the diligent recruitment of potential foster 

and adoptive families that reflect the ethnic and racial diversity of children in the State for whom foster and adoptive 

homes are needed; 

(8) provide assurances that the State— 

(A) is operating, to the satisfaction of the Secretary— 

(i) a statewide information system from which can 

be readily determined the status, demographic characteristics, location, and goals for the placement of every 

child who is (or, within the immediately preceding 12 

months, has been) in foster care; 

(ii) a case review system (as defined in section 

475(5) and in accordance with the requirements of section 475A) for each child receiving foster care under 

the supervision of the State; 

(iii) a service program designed to help children— 

(I) where safe and appropriate, return to families from which they have been removed; or 

(II) be placed for adoption, with a legal guardian, or if adoption or legal guardianship is determined not to be appropriate for a child, in some 

other planned, permanent living arrangement, 

subject to the requirements of sections 475(5)(C) 

and 475A(a), which may include a residential educational program; and 

(iv) a preplacement preventive services program designed to help children at risk of foster care placement 

remain safely with their families; and 

(B) has in effect policies and administrative and judicial 

procedures for children abandoned at or shortly after birth 

(including policies and procedures providing for legal representation of the children) which enable permanent decisions to be made expeditiously with respect to the placement of the children; 

(9) contain a description, developed after consultation with 

tribal organizations (as defined in section 4 of the Indian SelfDetermination and Education Assistance Act) in the State, of 

the specific measures taken by the State to comply with the Indian Child Welfare Act; 

(10) contain assurances that the State shall make effective 

use of cross-jurisdictional resources (including through contracts for the purchase of services), and shall eliminate legal 


emcdonald on DSK67QTVN1PROD with HEARING
23 

barriers, to facilitate timely adoptive or permanent placements 

for waiting children; 

(11) contain a description of the activities that the State has 

undertaken for children adopted from other countries, including the provision of adoption and post-adoption services; 

(12) provide that the State shall collect and report information on children who are adopted from other countries and who 

enter into State custody as a result of the disruption of a placement for adoption or the dissolution of an adoption, including 

the number of children, the agencies who handled the placement or adoption, the plans for the child, and the reasons for 

the disruption or dissolution; 

(13) demonstrate substantial, ongoing, and meaningful collaboration with State courts in the development and implementation of the State plan under subpart 1, the State plan approved under subpart 2, and the State plan approved under 

part E, and in the development and implementation of any program improvement plan required under section 1123A; 

(14) not later than October 1, 2007, include assurances that 

not more than 10 percent of the expenditures of the State with 

respect to activities funded from amounts provided under this 

subpart will be for administrative costs; 

(15)(A) provides that the State will develop, in coordination 

and collaboration with the State agency referred to in paragraph (1) and the State agency responsible for administering 

the State plan approved under title XIX, and in consultation 

with pediatricians, other experts in health care, and experts in 

and recipients of child welfare services, a plan for the ongoing 

oversight and coordination of health care services for any child 

in a foster care placement, which shall ensure a coordinated 

strategy to identify and respond to the health care needs of 

children in foster care placements, including mental health and 

dental health needs, and shall include an outline of— 

(i) a schedule for initial and follow-up health 

screenings that meet reasonable standards of medical 

practice; 

(ii) how health needs identified through screenings 

will be monitored and treated, including emotional 

trauma associated with a child’s maltreatment and removal from home; 

(iii) how medical information for children in care 

will be updated and appropriately shared, which may 

include the development and implementation of an 

electronic health record; 

(iv) steps to ensure continuity of health care services, which may include the establishment of a medical 

home for every child in care; 

(v) the oversight of prescription medicines, including 

protocols for the appropriate use and monitoring of 

psychotropic medications; 

(vi) how the State actively consults with and involves physicians or other appropriate medical or nonmedical professionals in assessing the health and wellbeing of children in foster care and in determining appropriate medical treatment for the children; and 


emcdonald on DSK67QTVN1PROD with HEARING
24 

(vii) steps to ensure that the components of the transition plan development process required under section 475(5)(H) that relate to the health care needs of 

children aging out of foster care, including the requirements to include options for health insurance, information about a health care power of attorney, health 

care proxy, or other similar document recognized 

under State law, and to provide the child with the option to execute such a document, are met; and 

(B) subparagraph (A) shall not be construed to reduce or 

limit the responsibility of the State agency responsible for administering the State plan approved under title XIX to administer and provide care and services for children with respect to 

whom services are provided under the State plan developed 

pursuant to this subpart; 

(16) provide that, not later than 1 year after the date of the 

enactment of this paragraph, the State shall have in place procedures providing for how the State programs assisted under 

this subpart, subpart 2 of this part, or part E would respond 

to a disaster, in accordance with criteria established by the 

Secretary which should include how a State would— 

(A) identify, locate, and continue availability of services 

for children under State care or supervision who are displaced or adversely affected by a disaster; 

(B) respond, as appropriate, to new child welfare cases 

in areas adversely affected by a disaster, and provide services in those cases; 

(C) remain in communication with caseworkers and 

other essential child welfare personnel who are displaced 

because of a disaster; 

(D) preserve essential program records; and 

(E) coordinate services and share information with other 

States; 

(17) not later than October 1, 2007, describe the State standards for the content and frequency of caseworker visits for children who are in foster care under the responsibility of the 

State, which, at a minimum, ensure that the children are visited on a monthly basis and that the caseworker visits are 

well-planned and focused on issues pertinent to case planning 

and service delivery to ensure the safety, permanency, and 

well-being of the children; 

(18) include a description of the activities that the State has 

undertaken to reduce the length of time children who have not 

attained 5 years of age are without a permanent family, and 

the activities the State undertakes to address the developmental needs of such children who receive benefits or services 

under this part or part E; and 

(19) contain a description of the sources used to compile information on child maltreatment deaths required by Federal 

law to be reported by the State agency referred to in paragraph 

(1), and to the extent that the compilation does not include information on such deaths from the State vital statistics department, child death review teams, law enforcement agencies, or 

offices of medical examiners or coroners, the State shall deVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00030 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
25 

scribe why the information is not so included and how the 

State will include the information. 

(c) DEFINITIONS.—In this subpart: 

(1) ADMINISTRATIVE COSTS.—The term ‘‘administrative costs’’ 

means costs for the following, but only to the extent incurred 

in administering the State plan developed pursuant to this 

subpart: procurement, payroll management, personnel functions (other than the portion of the salaries of supervisors attributable to time spent directly supervising the provision of 

services by caseworkers), management, maintenance and operation of space and property, data processing and computer 

services, accounting, budgeting, auditing, and travel expenses 

(except those related to the provision of services by caseworkers or the oversight of programs funded under this subpart). 

(2) OTHER TERMS.—For definitions of other terms used in 

this part, see section 475. 

* * * * * * * 

PART E—FEDERAL PAYMENTS FOR FOSTER CARE AND ADOPTION

ASSISTANCE

* * * * * * * 

STATE PLAN FOR FOSTER CARE AND ADOPTION ASSISTANCE

SEC. 471. (a) In order for a State to be eligible for payments 

under this part, it shall have a plan approved by the Secretary 

which— 

(1) provides for foster care maintenance payments in accordance with section 472 and for adoption assistance in accordance with section 473; 

(2) provides that the State agency responsible for administering the program authorized by subpart 1 of part B of this 

title shall administer, or supervise the administration of, the 

program authorized by this part; 

(3) provides that the plan shall be in effect in all political 

subdivisions of the State, and, if administered by them, be 

mandatory upon them; 

(4) provides that the State shall assure that the programs at 

the local level assisted under this part will be coordinated with 

the programs at the State or local level assisted under parts 

A and B of this title, under subtitle 1 of title XX of this Act, 

and under any other appropriate provision of Federal law; 

(5) provides that the State will, in the administration of its 

programs under this part, use such methods relating to the establishment and maintenance of personnel standards on a 

merit basis as are found by the Secretary to be necessary for 

the proper and efficient operation of the programs, except that 

the Secretary shall exercise no authority with respect to the selection, tenure of office, or compensation of any individual employed in accordance with such methods; 

(6) provides that the State agency referred to in paragraph 

(2) (hereinafter in this part referred to as the ‘‘State agency’’) 

will make such reports, in such form and containing such information as the Secretary may from time to time require, and 


emcdonald on DSK67QTVN1PROD with HEARING
26 

comply with such provisions as the Secretary may from time 

to time find necessary to assure the correctness and 

verification of such reports; 

(7) provides that the State agency will monitor and conduct 

periodic evaluations of activities carried out under this part; 

(8) subject to subsection (c), provides safeguards which restrict the use of or disclosure of information concerning individuals assisted under the State plan to purposes directly connected with (A) the administration of the plan of the State approved under this part, the plan or program of the State under 

part A, B, or D of this title or under title I, V, X, XIV, XVI 

(as in effect in Puerto Rico, Guam, and the Virgin Islands), 

XIX, or XX, or the supplemental security income program established by title XVI, (B) any investigation, prosecution, or 

criminal or civil proceeding, conducted in connection with the 

administration of any such plan or program, (C) the administration of any other Federal or federally assisted program 

which provides assistance, in cash or in kind, or services, directly to individuals on the basis of need, (D) any audit or similar activity conducted in connection with the administration of 

any such plan or program by any governmental agency which 

is authorized by law to conduct such audit or activity, and (E) 

reporting and providing information pursuant to paragraph (9) 

to appropriate authorities with respect to known or suspected 

child abuse or neglect; and the safeguards so provided shall 

prohibit disclosure, to any committee or legislative body (other 

than an agency referred to in clause (D) with respect to an activity referred to in such clause), of any information which 

identifies by name or address any such applicant or recipient; 

except that nothing contained herein shall preclude a State 

from providing standards which restrict disclosures to purposes 

more limited than those specified herein, or which, in the case 

of adoptions, prevent disclosure entirely; 

(9) provides that the State agency will— 

(A) report to an appropriate agency or official, known or 

suspected instances of physical or mental injury, sexual 

abuse or exploitation, or negligent treatment or maltreatment of a child receiving aid under part B or this part 

under circumstances which indicate that the child’s health 

or welfare is threatened thereby; 

(B) provide such information with respect to a situation 

described in subparagraph (A) as the State agency may 

have; and 

(C) not later than— 

(i) 1 year after the date of enactment of this subparagraph, demonstrate to the Secretary that the 

State agency has developed, in consultation with State 

and local law enforcement, juvenile justice systems, 

health care providers, education agencies, and organizations with experience in dealing with at-risk children and youth, policies and procedures (including relevant training for caseworkers) for identifying, documenting in agency records, and determining appropriate services with respect to— 


emcdonald on DSK67QTVN1PROD with HEARING
27 

(I) any child or youth over whom the State 

agency has responsibility for placement, care, or 

supervision and who the State has reasonable 

cause to believe is, or is at risk of being, a sex 

trafficking victim (including children for whom a 

State child welfare agency has an open case file 

but who have not been removed from the home, 

children who have run away from foster care and 

who have not attained 18 years of age or such 

older age as the State has elected under section 

475(8) of this Act, and youth who are not in foster 

care but are receiving services under section 477 

of this Act); and 

(II) at the option of the State, any individual 

who has not attained 26 years of age, without regard to whether the individual is or was in foster 

care under the responsibility of the State; and 

(ii) 2 years after such date of enactment, demonstrate to the Secretary that the State agency is implementing the policies and procedures referred to in 

clause (i). 

(10) provides— 

(A) for the establishment or designation of a State authority or authorities that shall be responsible for establishing and maintaining standards for foster family homes 

and child care institutions which are reasonably in accord 

with recommended standards of national organizations 

concerned with standards for the institutions or homes, including standards related to admission policies, safety, 

sanitation, and protection of civil rights, and which shall 

permit use of the reasonable and prudent parenting standard; 

(B) that the standards established pursuant to subparagraph (A) shall be applied by the State to any foster family 

home or child care institution receiving funds under this 

part or part B and shall require, as a condition of each 

contract entered into by a child care institution to provide 

foster care, the presence on-site of at least 1 official who, 

with respect to any child placed at the child care institution, is designated to be the caregiver who is authorized to 

apply the reasonable and prudent parent standard to decisions involving the participation of the child in age or developmentally-appropriate activities, and who is provided 

with training in how to use and apply the reasonable and 

prudent parent standard in the same manner as prospective foster parents are provided the training pursuant to 

paragraph (24); 

(C) that the standards established pursuant to subparagraph (A) shall include policies related to the liability of 

foster parents and private entities under contract by the 

State involving the application of the reasonable and prudent parent standard, to ensure appropriate liability for 

caregivers when a child participates in an approved activity and the caregiver approving the activity acts in accordVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00033 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
28 

ance with the reasonable and prudent parent standard; 

and 

(D) that a waiver of any standards established pursuant 

to subparagraph (A) may be made only on a case-by-case 

basis for nonsafety standards (as determined by the State) 

in relative foster family homes for specific children in care; 

(11) provides for periodic review of the standards referred to 

in the preceding paragraph and amounts paid as foster care 

maintenance payments and adoption assistance to assure their 

continuing appropriateness; 

(12) provides for granting an opportunity for a fair hearing 

before the State agency to any individual whose claim for benefits available pursuant to this part is denied or is not acted 

upon with reasonable promptness; 

(13) provides that the State shall arrange for a periodic and 

independently conducted audit of the programs assisted under 

this part and part B of this title, which shall be conducted no 

less frequently than once every three years; 

(14) provides (A) specific goals (which shall be established by 

State law on or before October 1, 1982) for each fiscal year 

(commencing with the fiscal year which begins on October 1, 

1983) as to the maximum number of children (in absolute numbers or as a percentage of all children in foster care with respect to whom assistance under the plan is provided during 

such year) who, at any time during such year, will remain in 

foster care after having been in such care for a period in excess 

of twenty-four months, and (B) a description of the steps which 

will be taken by the State to achieve such goals; 

(15) provides that— 

(A) in determining reasonable efforts to be made with respect to a child, as described in this paragraph, and in 

making such reasonable efforts, the child’s health and 

safety shall be the paramount concern; 

(B) except as provided in subparagraph (D), reasonable 

efforts shall be made to preserve and reunify 

families— 

(i) prior to the placement of a child in foster care, to 

prevent or eliminate the need for removing the child 

from the child’s home; and 

(ii) to make it possible for a child to safely return to 

the child’s home; 

(C) if continuation of reasonable efforts of the type described in subparagraph (B) is determined to be inconsistent with the permanency plan for the child, reasonable 

efforts shall be made to place the child in a timely manner 

in accordance with the permanency plan (including, if appropriate, through an interstate placement), and to complete whatever steps are necessary to finalize the permanent placement of the child; 

(D) reasonable efforts of the type described in subparagraph (B) shall not be required to be made with respect to 

a parent of a child if a court of competent jurisdiction has 

determined that— 

(i) the parent has subjected the child to aggravated 

circumstances (as defined in State law, which definiVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00034 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
29 

tion may include but need not be limited to abandonment, torture, chronic abuse, and sexual abuse); 

(ii) the parent has— 

(I) committed murder (which would have been 

an offense under section 1111(a) of title 18, United 

States Code, if the offense had occurred in the 

special maritime or territorial jurisdiction of the 

United States) of another child of the parent; 

(II) committed voluntary manslaughter (which 

would have been an offense under section 1112(a) 

of title 18, United States Code, if the offense had 

occurred in the special maritime or territorial jurisdiction of the United States) of another child of 

the parent; 

(III) aided or abetted, attempted, conspired, or 

solicited to commit such a murder or such a voluntary manslaughter; or 

(IV) committed a felony assault that results in 

serious bodily injury to the child or another child 

of the parent; or 

(iii) the parental rights of the parent to a sibling 

have been terminated involuntarily; 

(E) if reasonable efforts of the type described in subparagraph (B) are not made with respect to a child as a result 

of a determination made by a court of competent jurisdiction in accordance with subparagraph (D)— 

(i) a permanency hearing (as described in section 

475(5)(C)), which considers in-State and out-of-State 

permanent placement options for the child, shall be 

held for the child within 30 days after the determination; and 

(ii) reasonable efforts shall be made to place the 

child in a timely manner in accordance with the permanency plan, and to complete whatever steps are 

necessary to finalize the permanent placement of the 

child; and 

(F) reasonable efforts to place a child for adoption or 

with a legal guardian, including identifying appropriate inState and out-of-State placements may be made concurrently with reasonable efforts of the type described in subparagraph (B); 

(16) provides for the development of a case plan (as defined 

in section 475(1) and in accordance with the requirements of 

section 475A) for each child receiving foster care maintenance 

payments under the State plan and provides for a case review 

system which meets the requirements described in sections 

475(5) and 475A with respect to each such child; 

(17) provides that, where appropriate, all steps will be taken, 

including cooperative efforts with the State agencies administering the program funded under part A and plan approved 

under part D, to secure an assignment to the State of any 

rights to support on behalf of each child receiving foster care 

maintenance payments under this part; 

(18) not later than January 1, 1997, provides that neither 

the State nor any other entity in the State that receives funds 


emcdonald on DSK67QTVN1PROD with HEARING
30 

from the Federal Government and is involved in adoption or 

foster care placements may— 

(A) deny to any person the opportunity to become an 

adoptive or a foster parent, on the basis of the race, color, 

or national origin of the person, or of the child, involved; 

or 

(B) delay or deny the placement of a child for adoption 

or into foster care, on the basis of the race, color, or national origin of the adoptive or foster parent, or the child, 

involved; 

(19) provides that the State shall consider giving preference 

to an adult relative over a non-related caregiver when determining a placement for a child, provided that the relative caregiver meets all relevant State child protection standards; 

(20)(A) provides procedures for criminal records checks, including fingerprint-based checks of national crime information 

databases (as defined in section 534(e)(3)(A) of title 28, United 

States Code), for any prospective foster or adoptive parent before the foster or adoptive parent may be finally approved for 

placement of a child regardless of whether foster care maintenance payments or adoption assistance payments are to be 

made on behalf of the child under the State plan under this 

part, including procedures requiring that— 

(i) in any case involving a child on whose behalf such 

payments are to be so made in which a record check reveals a felony conviction for child abuse or neglect, for 

spousal abuse, for a crime against children (including child 

pornography), or for a crime involving violence, including 

rape, sexual assault, or homicide, but not including other 

physical assault or battery, if a State finds that a court of 

competent jurisdiction has determined that the felony was 

committed at any time, such final approval shall not be 

granted; and 

(ii) in any case involving a child on whose behalf such 

payments are to be so made in which a record check reveals a felony conviction for physical assault, battery, or a 

drug-related offense, if a State finds that a court of competent jurisdiction has determined that the felony was 

committed within the past 5 years, such final approval 

shall not be granted; and 

(B) provides that the State shall— 

(i) check any child abuse and neglect registry maintained by the State for information on any prospective foster or adoptive parent and on any other adult living in the 

home of such a prospective parent, and request any other 

State in which any such prospective parent or other adult 

has resided in the preceding 5 years, to enable the State 

to check any child abuse and neglect registry maintained 

by such other State for such information, before the prospective foster or adoptive parent may be finally approved 

for placement of a child, regardless of whether foster care 

maintenance payments or adoption assistance payments 

are to be made on behalf of the child under the State plan 

under this part; 


emcdonald on DSK67QTVN1PROD with HEARING
31 

(ii) comply with any request described in clause (i) that 

is received from another State; and 

(iii) have in place safeguards to prevent the unauthorized disclosure of information in any child abuse and neglect registry maintained by the State, and to prevent any 

such information obtained pursuant to this subparagraph 

from being used for a purpose other than the conducting 

of background checks in foster or adoptive placement 

cases; and 

(C) provides procedures for criminal records checks, including fingerprint-based checks of national crime information 

databases (as defined in section 534(e)(3)(A) of title 28, United 

States Code), on any relative guardian, and for checks described in subparagraph (B) of this paragraph on any relative 

guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child 

under the State plan under this part; 

(21) provides for health insurance coverage (including, at 

State option, through the program under the State plan approved under title XIX) for any child who has been determined 

to be a child with special needs, for whom there is in effect an 

adoption assistance agreement (other than an agreement under 

this part) between the State and an adoptive parent or parents, and who the State has determined cannot be placed with 

an adoptive parent or parents without medical assistance because such child has special needs for medical, mental health, 

or rehabilitative care, and that with respect to the provision of 

such health insurance coverage— 

(A) such coverage may be provided through 1 or more 

State medical assistance programs; 

(B) the State, in providing such coverage, shall ensure 

that the medical benefits, including mental health benefits, provided are of the same type and kind as those that 

would be provided for children by the State under title 

XIX; 

(C) in the event that the State provides such coverage 

through a State medical assistance program other than the 

program under title XIX, and the State exceeds its funding 

for services under such other program, any such child shall 

be deemed to be receiving aid or assistance under the 

State plan under this part for purposes of section 

1902(a)(10)(A)(i)(I); and 

(D) in determining cost-sharing requirements, the State 

shall take into consideration the circumstances of the 

adopting parent or parents and the needs of the child 

being adopted consistent, to the extent coverage is provided through a State medical assistance program, with 

the rules under such program; 

(22) provides that, not later than January 1, 1999, the State 

shall develop and implement standards to ensure that children 

in foster care placements in public or private agencies are provided quality services that protect the safety and health of the 

children; 

(23) provides that the State shall not— 


emcdonald on DSK67QTVN1PROD with HEARING
32 

(A) deny or delay the placement of a child for adoption 

when an approved family is available outside of the jurisdiction with responsibility for handling the case of the 

child; or 

(B) fail to grant an opportunity for a fair hearing, as described in paragraph (12), to an individual whose allegation of a violation of subparagraph (A) of this paragraph 

is denied by the State or not acted upon by the State with 

reasonable promptness; 

(24) includes a certification that, before a child in foster care 

under the responsibility of the State is placed with prospective 

foster parents, the prospective foster parents will be prepared 

adequately with the appropriate knowledge and skills to provide for the needs of the child, that the preparation will be continued, as necessary, after the placement of the child, and that 

the preparation shall include knowledge and skills relating to 

the reasonable and prudent parent standard for the participation of the child in age or developmentally-appropriate activities, including knowledge and skills relating to the developmental stages of the cognitive, emotional, physical, and behavioral capacities of a child, and knowledge and skills relating to 

applying the standard to decisions such as whether to allow 

the child to engage in social, extracurricular, enrichment, cultural, and social activities, including sports, field trips, and 

overnight activities lasting 1 or more days, and to decisions involving the signing of permission slips and arranging of transportation for the child to and from extracurricular, enrichment, 

and social activities; 

(25) provide that the State shall have in effect procedures for 

the orderly and timely interstate placement of children; and 

procedures implemented in accordance with an interstate compact, if incorporating with the procedures prescribed by paragraph (26), shall be considered to satisfy the requirement of 

this paragraph; 

(26) provides that— 

(A)(i) within 60 days after the State receives from another State a request to conduct a study of a home environment for purposes of assessing the safety and suitability of placing a child in the home, the State shall, directly or by contract— 

(I) conduct and complete the study; and 

(II) return to the other State a report on the results 

of the study, which shall address the extent to which 

placement in the home would meet the needs of the 

child; and 

(ii) in the case of a home study begun on or before September 30, 2008, if the State fails to comply with clause 

(i) within the 60-day period as a result of circumstances 

beyond the control of the State (such as a failure by a Federal agency to provide the results of a background check, 

or the failure by any entity to provide completed medical 

forms, requested by the State at least 45 days before the 

end of the 60-day period), the State shall have 75 days to 

comply with clause (i) if the State documents the cirVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00038 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
33 

cumstances involved and certifies that completing the 

home study is in the best interests of the child; except that 

(iii) this subparagraph shall not be construed to require 

the State to have completed, within the applicable period, 

the parts of the home study involving the education and 

training of the prospective foster or adoptive parents; 

(B) the State shall treat any report described in subparagraph (A) that is received from another State or an Indian tribe (or from a private agency under contract with 

another State) as meeting any requirements imposed by 

the State for the completion of a home study before placing 

a child in the home, unless, within 14 days after receipt 

of the report, the State determines, based on grounds that 

are specific to the content of the report, that making a decision in reliance on the report would be contrary to the 

welfare of the child; and 

(C) the State shall not impose any restriction on the 

ability of a State agency administering, or supervising the 

administration of, a State program operated under a State 

plan approved under this part to contract with a private 

agency for the conduct of a home study described in subparagraph (A); 

(27) provides that, with respect to any child in foster care 

under the responsibility of the State under this part or part B 

and without regard to whether foster care maintenance payments are made under section 472 on behalf of the child, the 

State has in effect procedures for verifying the citizenship or 

immigration status of the child; 

(28) at the option of the State, provides for the State to enter 

into kinship guardianship assistance agreements to provide 

kinship guardianship assistance payments on behalf of children to grandparents and other relatives who have assumed 

legal guardianship of the children for whom they have cared as 

foster parents and for whom they have committed to care on 

a permanent basis, as provided in section 473(d); 

(29) provides that, within 30 days after the removal of a 

child from the custody of the parent or parents of the child, the 

State shall exercise due diligence to identify and provide notice 

to the following relatives: all adult grandparents, all parents of 

a sibling of the child, where such parent has legal custody of 

such sibling, and other adult relatives of the child (including 

any other adult relatives suggested by the parents), subject to 

exceptions due to family or domestic violence, that— 

(A) specifies that the child has been or is being removed 

from the custody of the parent or parents of the child; 

(B) explains the options the relative has under Federal, 

State, and local law to participate in the care and placement of the child, including any options that may be lost 

by failing to respond to the notice; 

(C) describes the requirements under paragraph (10) of 

this subsection to become a foster family home and the additional services and supports that are available for children placed in such a home; and 

(D) if the State has elected the option to make kinship 

guardianship assistance payments under paragraph (28) of 


emcdonald on DSK67QTVN1PROD with HEARING
34 

this subsection, describes how the relative guardian of the 

child may subsequently enter into an agreement with the 

State under section 473(d) to receive the payments; 

(30) provides assurances that each child who has attained 

the minimum age for compulsory school attendance under 

State law and with respect to whom there is eligibility for a 

payment under the State plan is a full-time elementary or secondary school student or has completed secondary school, and 

for purposes of this paragraph, the term ‘‘elementary or secondary school student’’ means, with respect to a child, that the 

child is— 

(A) enrolled (or in the process of enrolling) in an institution which provides elementary or secondary education, as 

determined under the law of the State or other jurisdiction 

in which the institution is located; 

(B) instructed in elementary or secondary education at 

home in accordance with a home school law of the State 

or other jurisdiction in which the home is located; 

(C) in an independent study elementary or secondary 

education program in accordance with the law of the State 

or other jurisdiction in which the program is located, 

which is administered by the local school or school district; 

or 

(D) incapable of attending school on a full-time basis due 

to the medical condition of the child, which incapability is 

supported by regularly updated information in the case 

plan of the child; 

(31) provides that reasonable efforts shall be made— 

(A) to place siblings removed from their home in the 

same foster care, kinship guardianship, or adoptive placement, unless the State documents that such a joint placement would be contrary to the safety or well-being of any 

of the siblings; and 

(B) in the case of siblings removed from their home who 

are not so jointly placed, to provide for frequent visitation 

or other ongoing interaction between the siblings, unless 

that State documents that frequent visitation or other ongoing interaction would be contrary to the safety or wellbeing of any of the siblings; 

(32) provides that the State will negotiate in good faith with 

any Indian tribe, tribal organization or tribal consortium in the 

State that requests to develop an agreement with the State to 

administer all or part of the program under this part on behalf 

of Indian children who are under the authority of the tribe, organization, or consortium, including foster care maintenance 

payments on behalf of children who are placed in State or tribally licensed foster family homes, adoption assistance payments, and, if the State has elected to provide such payments, 

kinship guardianship assistance payments under section 

473(d), and tribal access to resources for administration, training, and data collection under this part; 

(33) provides that the State will inform any individual who 

is adopting, or whom the State is made aware is considering 

adopting, a child who is in foster care under the responsibility 

of the State of the potential eligibility of the individual for a 


emcdonald on DSK67QTVN1PROD with HEARING
35 

Federal tax credit under section 23 of the Internal Revenue 

Code of 1986; 

(34) provides that, for each child or youth described in paragraph (9)(C)(i)(I), the State agency shall— 

(A) not later than 2 years after the date of the enactment of this paragraph, report immediately, and in no case 

later than 24 hours after receiving information on children 

or youth who have been identified as being a sex trafficking victim, to the law enforcement authorities; and 

(B) not later than 3 years after such date of enactment 

and annually thereafter, report to the Secretary the total 

number of children and youth who are sex trafficking victims; and 

(35) provides that— 

(A) not later than 1 year after the date of the enactment 

of this paragraph, the State shall develop and implement 

specific protocols for— 

(i) expeditiously locating any child missing from foster care; 

(ii) determining the primary factors that contributed 

to the child’s running away or otherwise being absent 

from care, and to the extent possible and appropriate, 

responding to those factors in current and subsequent 

placements; 

(iii) determining the child’s experiences while absent 

from care, including screening the child to determine 

if the child is a possible sex trafficking victim (as defined in section 475(9)(A)); and 

(iv) reporting such related information as required 

by the Secretary; and 

(B) not later than 2 years after such date of enactment, 

for each child and youth described in paragraph (9)(C)(i)(I) 

of this subsection, the State agency shall report immediately, and in no case later than 24 hours after receiving, 

information on missing or abducted children or youth to 

the law enforcement authorities for entry into the National 

Crime Information Center (NCIC) database of the Federal 

Bureau of Investigation, established pursuant to section 

534 of title 28, United States Code, and to the National 

Center for Missing and Exploited Children. 

(b) The Secretary shall approve any plan which complies with the 

provisions of subsection (a) of this section. 

(c) USE OF CHILD WELFARE RECORDS IN STATE COURT PROCEEDINGS.—Subsection (a)(8) shall not be construed to limit the 

flexibility of a State in determining State policies relating to public 

access to court proceedings to determine child abuse and neglect or 

other court hearings held pursuant to part B or this part, except 

that such policies shall, at a minimum, ensure the safety and wellbeing of the child, parents, and family. 

(d) ANNUAL REPORTS BY THE SECRETARY ON NUMBER OF CHIL- DREN AND YOUTH REPORTED BY STATES TO BE SEX TRAFFICKING

VICTIMS.—Not later than 4 years after the date of the enactment 

of this subsection and annually thereafter, the Secretary shall report to the Congress and make available to the public on the Internet website of the Department of Health and Human Services the 


emcdonald on DSK67QTVN1PROD with HEARING
36 

number of children and youth reported in accordance with subsection (a)(34)(B) of this section to be sex trafficking victims (as defined in section 475(9)(A)). 

FOSTER CARE MAINTENANCE PAYMENTS PROGRAM

SEC. 472. (a) IN GENERAL.— 

(1) ELIGIBILITY.—Each State with a plan approved under 

this part shall make foster care maintenance payments on behalf of each child who has been removed from the home of a 

relative specified in section 406(a) (as in effect on July 16, 

1996) into foster care if— 

(A) the removal and foster care placement met, and the 

placement continues to meet, the requirements of paragraph (2); and 

(B) the child, while in the home, would have met the 

AFDC eligibility requirement of paragraph (3). 

(2) REMOVAL AND FOSTER CARE PLACEMENT REQUIREMENTS.— 

The removal and foster care placement of a child meet the requirements of this paragraph if— 

(A) the removal and foster care placement are in accordance with— 

(i) a voluntary placement agreement entered into by 

a parent or legal guardian of the child who is the relative referred to in paragraph (1); or 

(ii) a judicial determination to the effect that continuation in the home from which removed would be 

contrary to the welfare of the child and that reasonable efforts of the type described in section 471(a)(15) 

for a child have been made; 

(B) the child’s placement and care are the responsibility 

of— 

(i) the State agency administering the State plan approved under section 471; 

(ii) any other public agency with which the State 

agency administering or supervising the administration of the State plan has made an agreement which 

is in effect; or 

(iii) an Indian tribe or a tribal organization (as defined in section 479B(a)) or a tribal consortium that 

has a plan approved under section 471 in accordance 

with section 479B; and 

(C) the child has been placed in a foster family home or 

child-care institution. 

(3) AFDC ELIGIBILITY REQUIREMENT.— 

(A) IN GENERAL.—A child in the home referred to in 

paragraph (1) would have met the AFDC eligibility requirement of this paragraph if the child— 

(i) would have received aid under the State plan approved under section 402 (as in effect on July 16, 

1996) in the home, in or for the month in which the 

agreement was entered into or court proceedings leading to the determination referred to in paragraph 

(2)(A)(ii) of this subsection were initiated; or 


emcdonald on DSK67QTVN1PROD with HEARING
37 

(ii)(I) would have received the aid in the home, in or 

for the month referred to in clause (i), if application 

had been made therefor; or 

(II) had been living in the home within 6 months before the month in which the agreement was entered 

into or the proceedings were initiated, and would have 

received the aid in or for such month, if, in such 

month, the child had been living in the home with the 

relative referred to in paragraph (1) and application 

for the aid had been made. 

(B) RESOURCES DETERMINATION.—For purposes of subparagraph (A), in determining whether a child would have 

received aid under a State plan approved under section 

402 (as in effect on July 16, 1996), a child whose resources 

(determined pursuant to section 402(a)(7)(B), as so in effect) have a combined value of not more than $10,000 shall 

be considered a child whose resources have a combined 

value of not more than $1,000 (or such lower amount as 

the State may determine for purposes of section 

402(a)(7)(B)). 

(4) ELIGIBILITY OF CERTAIN ALIEN CHILDREN.—Subject to title 

IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, if the child is an alien disqualified 

under section 245A(h) or 210(f) of the Immigration and Nationality Act from receiving aid under the State plan approved 

under section 402 in or for the month in which the agreement 

described in paragraph (2)(A)(i) was entered into or court proceedings leading to the determination described in paragraph 

(2)(A)(ii) were initiated, the child shall be considered to satisfy 

the requirements of paragraph (3), with respect to the month, 

if the child would have satisfied the requirements but for the 

disqualification. 

(b) Foster care maintenance payments may be made under this 

part only on behalf of a child described in subsection (a) of this section who is— 

(1) in the foster family home of an individual, whether the 

payments therefor are made to such individual or to a public 

or private child-placement or child-care agency, or 

(2) in a child-care institution, whether the payments therefor 

are made to such institution or to a public or private childplacement or child-care agency, which payments shall be limited so as to include in such payments only those items which 

are included in the term ‘‘foster care maintenance payments’’ 

(as defined in section 475(4)). 

(c) For the purposes of this part, (1) the term ‘‘foster family 

home’’ means a foster family home for children which is licensed 

by the State in which it is situated or has been approved, by the 

agency of such State having responsibility for licensing homes of 

this type, as meeting the standards established for such licensing; 

and (2) the term ‘‘child-care institution’’ means a private child-care 

institution, or a public child-care institution which accommodates 

no more than twenty-five children, which is licensed by the State 

in which it is situated or has been approved, by the agency of such 

State responsible for licensing or approval of institutions of this 

type, as meeting the standards established for such licensing, exVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00043 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
38 

cept, in the case of a child who has attained 18 years of age, the 

term shall include a supervised setting in which the individual is 

living independently, in accordance with such conditions as the 

Secretary shall establish in regulations, but the term shall not include detention facilities, forestry camps, training schools, or any 

other facility operated primarily for the detention of children who 

are determined to be delinquent. 

(d) Notwithstanding any other provision of this title, Federal 

payments may be made under this part with respect to amounts 

expended by any State as foster care maintenance payments under 

this section, in the case of children removed from their homes pursuant to voluntary placement agreements as described in subsection (a), only if (at the time such amounts were expended) the 

State has fulfilled all of the requirements of section 422(b)(8). 

(e) No Federal payment may be made under this part with respect to amounts expended by any State as foster care maintenance 

payments under this section, in the case of any child who was removed from his or her home pursuant to a voluntary placement 

agreement as described in subsection (a) and has remained in voluntary placement for a period in excess of 180 days, unless there 

has been a judicial determination by a court of competent jurisdiction (within the first 180 days of such placement) to the effect that 

such placement is in the best interests of the child. 

(f) For the purposes of this part and part B of this title, (1) the 

term ‘‘voluntary placement’’ means an out-of-home placement of a 

minor, by or with participation of a State agency, after the parents 

or guardians of the minor have requested the assistance of the 

agency and signed a voluntary placement agreement; and (2) the 

term ‘‘voluntary placement agreement’’ means a written agreement, 

binding on the parties to the agreement, between the State agency, 

any other agency acting on its behalf, and the parents or guardians 

of a minor child which specifies, at a minimum, the legal status of 

the child and the rights and obligations of the parents or guardians, the child, and the agency while the child is in placement. 

(g) In any case where— 

(1) the placement of a minor child in foster care occurred 

pursuant to a voluntary placement agreement entered into by 

the parents or guardians of such child as provided in subsection (a), and 

(2) such parents or guardians request (in such manner and 

form as the Secretary may prescribe) that the child be returned to their home or to the home of a relative, 

the voluntary placement agreement shall be deemed to be revoked 

unless the State agency opposes such request and obtains a judicial 

determination, by a court of competent jurisdiction, that the return 

of the child to such home would be contrary to the child’s best interests. 

(h)(1) For purposes of title XIX, any child with respect to whom 

foster care maintenance payments are made under this section is 

deemed to be a dependent child as defined in section 406 (as in effect as of July 16, 1996) and deemed to be a recipient of aid to families with dependent children under part A of this title (as so in effect). For purposes of subtitle 1 of title XX, any child with respect 

to whom foster care maintenance payments are made under this 

section is deemed to be a minor child in a needy family under a 


emcdonald on DSK67QTVN1PROD with HEARING
39 

State program funded under part A of this title and is deemed to 

be a recipient of assistance under such part. 

(2) For purposes of paragraph (1), a child whose costs in a foster 

family home or child care institution are covered by the foster care 

maintenance payments being made with respect to the child’s 

minor parent, as provided in section 475(4)(B), shall be considered 

a child with respect to whom foster care maintenance payments are 

made under this section. 

(i) ADMINISTRATIVE COSTS ASSOCIATED WITH OTHERWISE ELIGIBLE CHILDREN NOT IN LICENSED FOSTER CARE SETTINGS.—Expenditures by a State that would be considered administrative expenditures for purposes of section 474(a)(3) if made with respect to a 

child who was residing in a foster family home or child-care institution shall be so considered with respect to a child not residing in 

such a home or institution— 

(1) in the case of a child who has been removed in accordance with subsection (a) of this section from the home of a relative specified in section 406(a) (as in effect on July 16, 1996), 

only for expenditures— 

(A) with respect to a period of not more than the lesser 

of 12 months or the average length of time it takes for the 

State to license or approve a home as a foster home, in 

which the child is in the home of a relative and an application is pending for licensing or approval of the home as a 

foster family home; or 

(B) with respect to a period of not more than 1 calendar 

month when a child moves from a facility not eligible for 

payments under this part into a foster family home or 

child care institution licensed or approved by the State; 

and 

(2) in the case of any other child who is potentially eligible 

for benefits under a State plan approved under this part and 

at imminent risk of removal from the home, only if— 

(A) reasonable efforts are being made in accordance with 

section 471(a)(15) to prevent the need for, or if necessary 

to pursue, removal of the child from the home; and 

(B) the State agency has made, not less often than every 

6 months, a determination (or redetermination) as to 

whether the child remains at imminent risk of removal 

from the home. 

ADOPTION AND GUARDIANSHIP ASSISTANCE PROGRAM

SEC. 473. (a)(1)(A) Each State having a plan approved under this 

part shall enter into adoption assistance agreements (as defined in 

section 475(3)) with the adoptive parents of children with special 

needs. 

(B) Under any adoption assistance agreement entered into by a 

State with parents who adopt a child with special needs, the 

State— 

(i) shall make payments of nonrecurring adoption expenses 

incurred by or on behalf of such parents in connection with the 

adoption of such child, directly through the State agency or 

through another public or nonprofit private agency, in amounts 

determined under paragraph (3), and 


emcdonald on DSK67QTVN1PROD with HEARING
40 

(ii) in any case where the child meets the requirements of 

paragraph (2), may make adoption assistance payments to 

such parents, directly through the State agency or through another public or nonprofit private agency, in amounts so determined. 

(2)(A) For purposes of paragraph (1)(B)(ii), a child meets the requirements of this paragraph if— 

(i) in the case of a child who is not an applicable child for 

the fiscal year (as defined in subsection (e)), the child— 

(I)(aa)(AA) was removed from the home of a relative 

specified in section 406(a) (as in effect on July 16, 1996) 

and placed in foster care in accordance with a voluntary 

placement agreement with respect to which Federal payments are provided under section 474 (or section 403, as 

such section was in effect on July 16, 1996), or in accordance with a judicial determination to the effect that continuation in the home would be contrary to the welfare of 

the child; and 

(BB) met the requirements of section 472(a)(3) with respect to the home referred to in subitem (AA) of this item; 

(bb) meets all of the requirements of title XVI with respect to eligibility for supplemental security income benefits; or 

(cc) is a child whose costs in a foster family home or 

child-care institution are covered by the foster care maintenance payments being made with respect to the minor 

parent of the child as provided in section 475(4)(B); and 

(II) has been determined by the State, pursuant to subsection (c)(1) of this section, to be a child with special 

needs; or 

(ii) in the case of a child who is an applicable child for the 

fiscal year (as so defined), the child— 

(I)(aa) at the time of initiation of adoption proceedings 

was in the care of a public or licensed private child placement agency or Indian tribal organization pursuant to— 

(AA) an involuntary removal of the child from the 

home in accordance with a judicial determination to 

the effect that continuation in the home would be contrary to the welfare of the child; or 

(BB) a voluntary placement agreement or voluntary 

relinquishment; 

(bb) meets all medical or disability requirements of title 

XVI with respect to eligibility for supplemental security income benefits; or 

(cc) was residing in a foster family home or child care institution with the child’s minor parent, and the child’s 

minor parent was in such foster family home or child care 

institution pursuant to— 

(AA) an involuntary removal of the child from the 

home in accordance with a judicial determination to 

the effect that continuation in the home would be contrary to the welfare of the child; or 

(BB) a voluntary placement agreement or voluntary 

relinquishment; and 


emcdonald on DSK67QTVN1PROD with HEARING
41 

(II) has been determined by the State, pursuant to subsection (c)(2), to be a child with special needs. 

(B) Section 472(a)(4) shall apply for purposes of subparagraph (A) 

of this paragraph, in any case in which the child is an alien described in such section. 

(C) A child shall be treated as meeting the requirements of this 

paragraph for the purpose of paragraph (1)(B)(ii) if— 

(i) in the case of a child who is not an applicable child for 

the fiscal year (as defined in subsection (e)), the child— 

(I) meets the requirements of subparagraph (A)(i)(II); 

(II) was determined eligible for adoption assistance payments under this part with respect to a prior adoption; 

(III) is available for adoption because— 

(aa) the prior adoption has been dissolved, and the 

parental rights of the adoptive parents have been terminated; or 

(bb) the child’s adoptive parents have died; and 

(IV) fails to meet the requirements of subparagraph 

(A)(i) but would meet such requirements if— 

(aa) the child were treated as if the child were in 

the same financial and other circumstances the child 

was in the last time the child was determined eligible 

for adoption assistance payments under this part; and 

(bb) the prior adoption were treated as never having 

occurred; or 

(ii) in the case of a child who is an applicable child for the 

fiscal year (as so defined), the child meets the requirements of 

subparagraph (A)(ii)(II), is determined eligible for adoption assistance payments under this part with respect to a prior adoption (or who would have been determined eligible for such payments had the Adoption and Safe Families Act of 1997 been in 

effect at the time that such determination would have been 

made), and is available for adoption because the prior adoption 

has been dissolved and the parental rights of the adoptive parents have been terminated or because the child’s adoptive parents have died. 

(D) In determining the eligibility for adoption assistance payments of a child in a legal guardianship arrangement described 

in section 471(a)(28), the placement of the child with the relative guardian involved and any kinship guardianship assistance payments made on behalf of the child shall be considered 

never to have been made. 

(3) The amount of the payments to be made in any case under 

clauses (i) and (ii) of paragraph (1)(B) shall be determined through 

agreement between the adoptive parents and the State or local 

agency administering the program under this section, which shall 

take into consideration the circumstances of the adopting parents 

and the needs of the child being adopted, and may be readjusted 

periodically, with the concurrence of the adopting parents (which 

may be specified in the adoption assistance agreement), depending 

upon changes in such circumstances. However, in no case may the 

amount of the adoption assistance payment made under clause (ii) 

of paragraph (1)(B) exceed the foster care maintenance payment 

which would have been paid during the period if the child with reVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00047 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
42 

spect to whom the adoption assistance payment is made had been 

in a foster family home. 

(4)(A) Notwithstanding any other provision of this section, a payment may not be made pursuant to this section to parents or relative guardians with respect to a child— 

(i) who has attained— 

(I) 18 years of age, or such greater age as the State may 

elect under section 475(8)(B)(iii); or 

(II) 21 years of age, if the State determines that the 

child has a mental or physical handicap which warrants 

the continuation of assistance; 

(ii) who has not attained 18 years of age, if the State determines that the parents or relative guardians, as the case may 

be, are no longer legally responsible for the support of the 

child; or 

(iii) if the State determines that the child is no longer receiving any support from the parents or relative guardians, as the 

case may be. 

(B) Parents or relative guardians who have been receiving adoption assistance payments or kinship guardianship assistance payments under this section shall keep the State or local agency administering the program under this section informed of circumstances which would, pursuant to this subsection, make them 

ineligible for the payments, or eligible for the payments in a different amount. 

(5) For purposes of this part, individuals with whom a child (who 

has been determined by the State, pursuant to subsection (c), to be 

a child with special needs) is placed for adoption in accordance 

with applicable State and local law shall be eligible for such payments, during the period of the placement, on the same terms and 

subject to the same conditions as if such individuals had adopted 

such child. 

(6)(A) For purposes of paragraph (1)(B)(i), the term ‘‘nonrecurring 

adoption expenses’’ means reasonable and necessary adoption fees, 

court costs, attorney fees, and other expenses which are directly related to the legal adoption of a child with special needs and which 

are not incurred in violation of State or Federal law. 

(B) A State’s payment of nonrecurring adoption expenses under 

an adoption assistance agreement shall be treated as an expenditure made for the proper and efficient administration of the State 

plan for purposes of section 474(a)(3)(E). 

(7)(A) Notwithstanding any other provision of this subsection, no 

payment may be made to parents with respect to any applicable 

child for a fiscal year that— 

(i) would be considered a child with special needs under subsection (c)(2); 

(ii) is not a citizen or resident of the United States; and 

(iii) was adopted outside of the United States or was brought 

into the United States for the purpose of being adopted. 

(B) Subparagraph (A) shall not be construed as prohibiting payments under this part for an applicable child described in subparagraph (A) that is placed in foster care subsequent to the failure, as 

determined by the State, of the initial adoption of the child by the 

parents described in subparagraph (A). 


emcdonald on DSK67QTVN1PROD with HEARING
43 

(8)(A) A State shall calculate the savings (if any) resulting from 

the application of paragraph (2)(A)(ii) to all applicable children for 

a fiscal year, using a methodology specified by the Secretary or an 

alternate methodology proposed by the State and approved by the 

Secretary. 

(B) A State shall annually report to the Secretary— 

(i) the methodology used to make the calculation described in 

subparagraph (A), without regard to whether any savings are 

found; 

(ii) the amount of any savings referred to in subparagraph 

(A); and 

(iii) how any such savings are spent, accounting for and reporting the spending separately from any other spending reported to the Secretary under part B or this part. 

(C) The Secretary shall make all information reported pursuant 

to subparagraph (B) available on the website of the Department of 

Health and Human Services in a location easily accessible to the 

public. 

(D)(i) A State shall spend an amount equal to the amount of the 

savings (if any) in State expenditures under this part resulting 

from the application of paragraph (2)(A)(ii) to all applicable children for a fiscal year, to provide to children of families any service 

that may be provided under part B or this part. A State shall 

spend not less than 30 percent of any such savings on post-adoption services, post-guardianship services, and services to support 

and sustain positive permanent outcomes for children who otherwise might enter into foster care under the responsibility of the 

State, with at least 2⁄3 of the spending by the State to comply with 

such 30 percent requirement being spent on post-adoption and 

post-guardianship services. 

(ii) Any State spending required under clause (i) shall be used to 

supplement, and not supplant, any Federal or non-Federal funds 

used to provide any service under part B or this part. 

(b)(1) For purposes of title XIX, any child who is described in 

paragraph (3) is deemed to be a dependent child as defined in section 406 (as in effect as of July 16, 1996) and deemed to be a recipient of aid to families with dependent children under part A of this 

title (as so in effect) in the State where such child resides. 

(2) For purposes of subtitle 1 of title XX, any child who is described in paragraph (3) is deemed to be a minor child in a needy 

family under a State program funded under part A of this title and 

deemed to be a recipient of assistance under such part. 

(3) A child described in this paragraph is any child— 

(A)(i) who is a child described in subsection (a)(2), and 

(ii) with respect to whom an adoption assistance agreement 

is in effect under this section (whether or not adoption assistance payments are provided under the agreement or are being 

made under this section), including any such child who has 

been placed for adoption in accordance with applicable State 

and local law (whether or not an interlocutory or other judicial 

decree of adoption has been issued), 

(B) with respect to whom foster care maintenance payments 

are being made under section 472, or 

(C) with respect to whom kinship guardianship assistance 

payments are being made pursuant to subsection (d). 


emcdonald on DSK67QTVN1PROD with HEARING
44 

(4) For purposes of paragraphs (1) and (2), a child whose costs 

in a foster family home or child-care institution are covered by the 

foster care maintenance payments being made with respect to the 

child’s minor parent, as provided in section 475(4)(B), shall be considered a child with respect to whom foster care maintenance payments are being made under section 472. 

(c) For purposes of this section— 

(1) in the case of a child who is not an applicable child for 

a fiscal year, the child shall not be considered a child with special needs unless— 

(A) the State has determined that the child cannot or 

should not be returned to the home of his parents; and 

(B) the State had first determined (A) that there exists 

with respect to the child a specific factor or condition (such 

as his ethnic background, age, or membership in a minority or sibling group, or the presence of factors such as medical conditions or physical, mental, or emotional handicaps) 

because of which it is reasonable to conclude that such 

child cannot be placed with adoptive parents without providing adoption assistance under this section or medical 

assistance under title XIX, and (B) that, except where it 

would be against the best interests of the child because of 

such factors as the existence of significant emotional ties 

with prospective adoptive parents while in the care of such 

parents as a foster child, a reasonable, but unsuccessful, 

effort has been made to place the child with appropriate 

adoptive parents without providing adoption assistance 

under this section or medical assistance under title XIX; or 

(2) in the case of a child who is an applicable child for a fiscal year, the child shall not be considered a child with special 

needs unless— 

(A) the State has determined, pursuant to a criterion or 

criteria established by the State, that the child cannot or 

should not be returned to the home of his parents; 

(B)(i) the State has determined that there exists with respect to the child a specific factor or condition (such as ethnic background, age, or membership in a minority or sibling group, or the presence of factors such as medical conditions or physical, mental, or emotional handicaps) because of which it is reasonable to conclude that the child 

cannot be placed with adoptive parents without providing 

adoption assistance under this section and medical assistance under title XIX; or 

(ii) the child meets all medical or disability requirements 

of title XVI with respect to eligibility for supplemental security income benefits; and 

(C) the State has determined that, except where it would 

be against the best interests of the child because of such 

factors as the existence of significant emotional ties with 

prospective adoptive parents while in the care of the parents as a foster child, a reasonable, but unsuccessful, effort 

has been made to place the child with appropriate adoptive 

parents without providing adoption assistance under this 

section or medical assistance under title XIX. 


emcdonald on DSK67QTVN1PROD with HEARING
45 

(d) KINSHIP GUARDIANSHIP ASSISTANCE PAYMENTS FOR CHIL- DREN.— 

(1) KINSHIP GUARDIANSHIP ASSISTANCE AGREEMENT.— (A) IN GENERAL.—In order to receive payments under 

section 474(a)(5), a State shall— 

(i) negotiate and enter into a written, binding kinship guardianship assistance agreement with the prospective relative guardian of a child who meets the requirements of this paragraph; and 

(ii) provide the prospective relative guardian with a 

copy of the agreement. 

(B) MINIMUM REQUIREMENTS.—The agreement shall 

specify, at a minimum— 

(i) the amount of, and manner in which, each kinship guardianship assistance payment will be provided 

under the agreement, and the manner in which the 

payment may be adjusted periodically, in consultation 

with the relative guardian, based on the circumstances 

of the relative guardian and the needs of the child; 

(ii) the additional services and assistance that the 

child and relative guardian will be eligible for under 

the agreement; 

(iii) the procedure by which the relative guardian 

may apply for additional services as needed; and 

(iv) subject to subparagraph (D), that the State will 

pay the total cost of nonrecurring expenses associated 

with obtaining legal guardianship of the child, to the 

extent the total cost does not exceed $2,000. 

(C) INTERSTATE APPLICABILITY.—The agreement shall 

provide that the agreement shall remain in effect without 

regard to the State residency of the relative guardian. 

(D) NO EFFECT ON FEDERAL REIMBURSEMENT.—Nothing 

in subparagraph (B)(iv) shall be construed as affecting the 

ability of the State to obtain reimbursement from the Federal Government for costs described in that subparagraph. 

(2) LIMITATIONS ON AMOUNT OF KINSHIP GUARDIANSHIP AS- SISTANCE PAYMENT.—A kinship guardianship assistance payment on behalf of a child shall not exceed the foster care maintenance payment which would have been paid on behalf of the 

child if the child had remained in a foster family home. 

(3) CHILD’S ELIGIBILITY FOR A KINSHIP GUARDIANSHIP ASSISTANCE PAYMENT.— 

(A) IN GENERAL.—A child is eligible for a kinship guardianship assistance payment under this subsection if the 

State agency determines the following: 

(i) The child has been— 

(I) removed from his or her home pursuant to a 

voluntary placement agreement or as a result of a 

judicial determination to the effect that continuation in the home would be contrary to the welfare of the child; and 

(II) eligible for foster care maintenance payments under section 472 while residing for at 

least 6 consecutive months in the home of the prospective relative guardian. 


emcdonald on DSK67QTVN1PROD with HEARING
46 

(ii) Being returned home or adopted are not appropriate permanency options for the child. 

(iii) The child demonstrates a strong attachment to 

the prospective relative guardian and the relative 

guardian has a strong commitment to caring permanently for the child. 

(iv) With respect to a child who has attained 14 

years of age, the child has been consulted regarding 

the kinship guardianship arrangement. 

(B) TREATMENT OF SIBLINGS.—With respect to a child described in subparagraph (A) whose sibling or siblings are 

not so described— 

(i) the child and any sibling of the child may be 

placed in the same kinship guardianship arrangement, 

in accordance with section 471(a)(31), if the State 

agency and the relative agree on the appropriateness 

of the arrangement for the siblings; and 

(ii) kinship guardianship assistance payments may 

be paid on behalf of each sibling so placed. 

(C) ELIGIBILITY NOT AFFECTED BY REPLACEMENT OF

GUARDIAN WITH A SUCCESSOR GUARDIAN.—In the event of 

the death or incapacity of the relative guardian, the eligibility of a child for a kinship guardianship assistance payment under this subsection shall not be affected by reason 

of the replacement of the relative guardian with a successor legal guardian named in the kinship guardianship 

assistance agreement referred to in paragraph (1) (including in any amendment to the agreement), notwithstanding 

subparagraph (A) of this paragraph and section 471(a)(28). 

(e) APPLICABLE CHILD DEFINED.— 

(1) ON THE BASIS OF AGE.— (A) IN GENERAL.—Subject to paragraphs (2) and (3), in 

this section, the term ‘‘applicable child’’ means a child for 

whom an adoption assistance agreement is entered into 

under this section during any fiscal year described in subparagraph (B) if the child attained the applicable age for 

that fiscal year before the end of that fiscal year. 

(B) APPLICABLE AGE.—For purposes of subparagraph (A), 

the applicable age for a fiscal year is as follows: 

In the case of fiscal year: The applicable age is: 

2010 ................................................................................................. 16

2011 ................................................................................................. 14

2012 ................................................................................................. 12

2013 ................................................................................................. 10

2014 ................................................................................................. 8

2015 ................................................................................................. 6

2016 ................................................................................................. 4

2017 ................................................................................................. 2

2018 or thereafter ........................................................................... any age. 

(2) EXCEPTION FOR DURATION IN CARE.—Notwithstanding 

paragraph (1) of this subsection, beginning with fiscal year 

2010, such term shall include a child of any age on the date 


emcdonald on DSK67QTVN1PROD with HEARING
47 

on which an adoption assistance agreement is entered into on 

behalf of the child under this section if the child— 

(A) has been in foster care under the responsibility of 

the State for at least 60 consecutive months; and 

(B) meets the requirements of subsection (a)(2)(A)(ii). 

(3) EXCEPTION FOR MEMBER OF A SIBLING GROUP.—Notwithstanding paragraphs (1) and (2) of this subsection, beginning 

with fiscal year 2010, such term shall include a child of any 

age on the date on which an adoption assistance agreement is 

entered into on behalf of the child under this section without 

regard to whether the child is described in paragraph (2)(A) of 

this subsection if the child— 

(A) is a sibling of a child who is an applicable child for 

the fiscal year under paragraph (1) or (2) of this subsection; 

(B) is to be placed in the same adoption placement as an 

applicable child for the fiscal year who is their sibling; and 

(C) meets the requirements of subsection (a)(2)(A)(ii). 

* * * * * * * 

TITLE V—MATERNAL AND CHILD HEALTH SERVICES 

BLOCK GRANT 

* * * * * * * 

USE OF ALLOTMENT FUNDS

SEC. 504. (a) Except as otherwise provided under this section, a 

State may use amounts paid to it under section 503 for the provision of health services and related activities (including planning, 

administration, education, and evaluation and including payment 

of salaries and other related expenses of National Health Service 

Corps personnel) consistent with its application transmitted under 

section 505(a). 

(b) Amounts described in subsection (a) may not be used for— 

(1) inpatient services, other than inpatient services provided 

to children with special health care needs or to high-risk pregnant women and infants and such other inpatient services as 

the Secretary may approve; 

(2) cash payments to intended recipients of health services; 

(3) the purchase or improvement of land, the purchase, construction, or permanent improvement (other than minor remodeling) of any building or other facility, or the purchase of 

major medical equipment; 

(4) satisfying any requirement for the expenditure of nonFederal funds as a condition for the receipt of Federal funds; 

(5) providing funds for research or training to any entity 

other than a public or nonprofit private entity; or 

(6) payment for any item or service (other than an emergency item or service) furnished— 

(A) by an individual or entity during the period when 

such individual or entity is excluded under this title or 

title XVIII, XIX, or XX pursuant to section 1128, 1128A, 

1156, or 1842(j)(2), or 

(B) at the medical direction or on the prescription of a 

physician during the period when the physician is exVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00053 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
48 

cluded under this title or title XVIII, XIX, or XX pursuant 

to section 1128, 1128A, 1156, or 1842(j)(2) and when the 

person furnishing such item or service knew or had reason 

to know of the exclusion (after a reasonable time period 

after reasonable notice has been furnished to the person). 

The Secretary may waive the limitation contained in paragraph (3) 

upon the request of a State if the Secretary finds that there are 

extraordinary circumstances to justify the waiver and that granting 

the waiver will assist in carrying out this title. 

(c) A State may use a portion of the amounts described in subsection (a) for the purpose of purchasing technical assistance from 

public or private entities if the State determines that such assistance is required in developing, implementing, and administering 

programs funded under this title. 

(d) Of the amounts paid to a State under section 503 from an allotment for a fiscal year under section 502(c), not more than 10 

percent may be used for administering the funds paid under such 

section. 

* * * * * * * 

TITLE XI—GENERAL PROVISIONS, PEER REVIEW, AND 

ADMINISTRATIVE SIMPLIFICATION 

PART A—GENERAL PROVISIONS

DEFINITIONS

SEC. 1101. (a) When used in this Act— 

(1) The term ‘‘State’’, except where otherwise provided, includes the District of Columbia and the Commonwealth of 

Puerto Rico, and when used in titles IV, V, VII, XI, XIX, and 

XXI includes the Virgin Islands and Guam. Such term when 

used in titles III, IX, and XII also includes the Virgin Islands. 

Such term when used in title V and in part B of this title also 

includes American Samoa, the Northern Mariana Islands, and 

the Trust Territory of the Pacific Islands. Such term when 

used in titles XIX and XXI also includes the Northern Mariana 

Islands and American Samoa. In the case of Puerto Rico, the 

Virgin Islands, and Guam, titles I, X, and XIV, and title XVI 

(as in effect without regard to the amendment made by section 

301 of the Social Security Amendments of 1972) shall continue 

to apply, and the term ‘‘State’’ when used in such titles (but 

not in title XVI as in effect pursuant to such amendment after 

December 31, 1973) includes Puerto Rico, the Virgin Islands, 

and Guam. Such term when used in title XX also includes the 

Virgin Islands, Guam, American Samoa, and the Northern 

Mariana Islands. Such term when used in title IV also includes 

American Samoa. 

(2) The term ‘‘United States’’ when used in a geographical 

sense means, except where otherwise provided, the States. 

(3) The term ‘‘person’’ means an individual, a trust or estate, 

a partnership, or a corporation. 

(4) The term ‘‘corporation’’ includes associations, joint-stock 

companies, and insurance companies. 


emcdonald on DSK67QTVN1PROD with HEARING
49 

(5) The term ‘‘shareholder’’ includes a member in an association, joint-stock company, or insurance company. 

(6) The term ‘‘Secretary’’, except when the context otherwise 

requires, means the Secretary of Health and Human Services. 

(7) The terms ‘‘physician’’ and ‘‘medical care’’ and ‘‘hospitalization’’ include osteopathic practitioners or the services of 

osteopathic practitioners and hospitals within the scope of 

their practice as defined by State law. 

(8)(A) The ‘‘Federal percentage’’ for any State (other than 

Puerto Rico, the Virgin Islands, and Guam) shall be 100 per 

centum less the State percentage; and the State percentage 

shall be that percentage which bears the same ratio to 50 per 

centum as the square of the per capita income of such State 

bears to the square of the per capita income of the United 

States; except that the Federal percentage shall in no case be 

less than 50 per centum or more than 65 per centum. 

(B) The Federal percentage for each State (other than Puerto 

Rico, the Virgin Islands, and Guam) shall be promulgated by 

the Secretary between October 1 and November 30 of each 

year, on the basis of the average per capita income of each 

State and of the United States for the three most recent calendar years for which satisfactory data are available from the 

Department of Commerce. Such promulgation shall be conclusive for each of the four quarters in the period beginning October 1 next succeeding such promulgation: Provided, That the 

Secretary shall promulgate such percentages as soon as possible after the enactment of the Social Security Amendments 

of 1958, which promulgation shall be conclusive for each of the 

eleven quarters in the period beginning October 1, 1958, and 

ending with the close of June 30, 1961. 

(C) The term ‘‘United States’’ means (but only for purposes 

of subparagraphs (A) and (B) of this paragraph) the fifty States 

and the District of Columbia. 

(D) Promulgations made before satisfactory data are available from the Department of Commerce for a full year on the 

per capita income of Alaska shall prescribe a Federal percentage for Alaska of 50 per centum and, for purposes of such promulgations, Alaska shall not be included as part of the ‘‘United 

States’’. Promulgations made thereafter but before per capita 

income data for Alaska for a full three-year period are available from the Department of Commerce shall be based on satisfactory data available therefrom for Alaska for such one full 

year or, when such data are available for a two-year period, for 

such two years. 

(9) The term ‘‘shared health facility’’ means any arrangement 

whereby— 

(A) two or more health care practitioners practice their 

professions at a common physical location; 

(B) such practitioners share (i) common waiting areas, 

examining rooms, treatment rooms, or other space, (ii) the 

services of supporting staff, or (iii) equipment; 

(C) such practitioners have a person (who may himself 

be a practitioner)— 

(i) who is in charge of, controls, manages, or supervises substantial aspects of the arrangement or operVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00055 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
50 

ation for the delivery of health or medical services at 

such common physical location, other than the direct 

furnishing of professional health care services by the 

practitioners to their patients; or 

(ii) who makes available to such practitioners the 

services of supporting staff who are not employees of 

such practitioners; 

and who is compensated in whole or in part, for the use 

of such common physical location or support services pertaining thereto, on a basis related to amounts charged or 

collected for the services rendered or ordered at such location or on any basis clearly unrelated to the value of the 

services provided by the person; and 

(D) at least one of such practitioners received payments 

on a fee-for-service basis under titles XVIII and XIX in an 

amount exceeding $5,000 for any one month during the 

preceding 12 months or in an aggregate amount exceeding 

$40,000 during the preceding 12 months; 

except that such term does not include a provider of services 

(as defined in section 1861(u) of this Act), a health maintenance organization (as defined in section 1301(a) of the Public 

Health Service Act), a hospital cooperative shared services organization meeting the requirements of section 501(e) of the 

Internal Revenue Code of 1954, or any public entity. 

(10) The term ‘‘Administration’’ means the Social Security 

Administration, except where the context requires otherwise. 

(b) The terms ‘‘includes’’ and ‘‘including’’ when used in a definition contained in this Act shall not be deemed to exclude other 

things otherwise within the meaning of the term defined. 

(c) Whenever under this Act or any Act of Congress, or under the 

law of any State, an employer is required or permitted to deduct 

any amount from the remuneration of an employee and to pay the 

amount deducted to the United States, a State, or any political subdivision thereof, then for the purposes of this Act the amount so 

deducted shall be considered to have been paid to the employee at 

the time of such deduction. 

(d) Nothing in this Act shall be construed as authorizing any 

Federal official, agent, or representative, in carrying out any of the 

provisions of this Act, to take charge of any child over the objection 

of either of the parents of such child, or of the person standing in 

loco parentis to such child. 

* * * * * * * 

EXCLUSION OF CERTAIN INDIVIDUALS AND ENTITIES FROM

PARTICIPATION IN MEDICARE AND STATE HEALTH CARE PROGRAMS

SEC. 1128. (a) MANDATORY EXCLUSION.—The Secretary shall exclude the following individuals and entities from participation in 

any Federal health care program (as defined in section 1128B(f)): 

(1) CONVICTION OF PROGRAM-RELATED CRIMES.—Any individual or entity that has been convicted of a criminal offense 

related to the delivery of an item or service under title XVIII 

or under any State health care program. 

(2) CONVICTION RELATING TO PATIENT ABUSE.—Any individual or entity that has been convicted, under Federal or 


emcdonald on DSK67QTVN1PROD with HEARING
51 

State law, of a criminal offense relating to neglect or abuse of 

patients in connection with the delivery of a health care item 

or service. 

(3) FELONY CONVICTION RELATING TO HEALTH CARE FRAUD.— Any individual or entity that has been convicted for an offense 

which occurred after the date of the enactment of the Health 

Insurance Portability and Accountability Act of 1996, under 

Federal or State law, in connection with the delivery of a 

health care item or service or with respect to any act or omission in a health care program (other than those specifically described in paragraph (1)) operated by or financed in whole or 

in part by any Federal, State, or local government agency, of 

a criminal offense consisting of a felony relating to fraud, theft, 

embezzlement, breach of fiduciary responsibility, or other financial misconduct. 

(4) FELONY CONVICTION RELATING TO CONTROLLED SUBSTANCE.—Any individual or entity that has been convicted for 

an offense which occurred after the date of the enactment of 

the Health Insurance Portability and Accountability Act of 

1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. 

(b) PERMISSIVE EXCLUSION.—The Secretary may exclude the following individuals and entities from participation in any Federal 

health care program (as defined in section 1128B(f)): 

(1) CONVICTION RELATING TO FRAUD.—Any individual or entity that has been convicted for an offense which occurred after 

the date of the enactment of the Health Insurance Portability 

and Accountability Act of 1996, under Federal or State law— 

(A) of a criminal offense consisting of a misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct— 

(i) in connection with the delivery of a health care 

item or service, or 

(ii) with respect to any act or omission in a health 

care program (other than those specifically described 

in subsection (a)(1)) operated by or financed in whole 

or in part by any Federal, State, or local government 

agency; or 

(B) of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct with respect to any act or omission in a 

program (other than a health care program) operated by or 

financed in whole or in part by any Federal, State, or local 

government agency. 

(2) CONVICTION RELATING TO OBSTRUCTION OF AN INVESTIGATION OR AUDIT.—Any individual or entity that has been convicted, under Federal or State law, in connection with the interference with or obstruction of any investigation or audit related to— 

(i) any offense described in paragraph (1) or in subsection (a); or 

(ii) the use of funds received, directly or indirectly, 

from any Federal health care program (as defined in 

section 1128B(f)). 


emcdonald on DSK67QTVN1PROD with HEARING
52 

(3) MISDEMEANOR CONVICTION RELATING TO CONTROLLED

SUBSTANCE.—Any individual or entity that has been convicted, 

under Federal or State law, of a criminal offense consisting of 

a misdemeanor relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. 

(4) LICENSE REVOCATION OR SUSPENSION.—Any individual or 

entity— 

(A) whose license to provide health care has been revoked or suspended by any State licensing authority, or 

who otherwise lost such a license or the right to apply for 

or renew such a license, for reasons bearing on the individual’s or entity’s professional competence, professional performance, or financial integrity, or 

(B) who surrendered such a license while a formal disciplinary proceeding was pending before such an authority 

and the proceeding concerned the individual’s or entity’s 

professional competence, professional performance, or financial integrity. 

(5) EXCLUSION OR SUSPENSION UNDER FEDERAL OR STATE

HEALTH CARE PROGRAM.—Any individual or entity which has 

been suspended or excluded from participation, or otherwise 

sanctioned, under— 

(A) any Federal program, including programs of the Department of Defense or the Department of Veterans Affairs, involving the provision of health care, or 

(B) a State health care program, 

for reasons bearing on the individual’s or entity’s professional 

competence, professional performance, or financial integrity. 

(6) CLAIMS FOR EXCESSIVE CHARGES OR UNNECESSARY SERVICES AND FAILURE OF CERTAIN ORGANIZATIONS TO FURNISH

MEDICALLY NECESSARY SERVICES.—Any individual or entity 

that the Secretary determines— 

(A) has submitted or caused to be submitted bills or requests for payment (where such bills or requests are based 

on charges or cost) under title XVIII or a State health care 

program containing charges (or, in applicable cases, requests for payment of costs) for items or services furnished 

substantially in excess of such individual’s or entity’s 

usual charges (or, in applicable cases, substantially in excess of such individual’s or entity’s costs) for such items or 

services, unless the Secretary finds there is good cause for 

such bills or requests containing such charges or costs; 

(B) has furnished or caused to be furnished items or 

services to patients (whether or not eligible for benefits 

under title XVIII or under a State health care program) 

substantially in excess of the needs of such patients or of 

a quality which fails to meet professionally recognized 

standards of health care; 

(C) is— 

(i) a health maintenance organization (as defined in 

section 1903(m)) providing items and services under a 

State plan approved under title XIX, or 

(ii) an entity furnishing services under a waiver approved under section 1915(b)(1), 


emcdonald on DSK67QTVN1PROD with HEARING
53 

and has failed substantially to provide medically necessary 

items and services that are required (under law or the contract with the State under title XIX) to be provided to individuals covered under that plan or waiver, if the failure 

has adversely affected (or has a substantial likelihood of 

adversely affecting) these individuals; or 

(D) is an entity providing items and services as an eligible organization under a risk-sharing contract under section 1876 and has failed substantially to provide medically 

necessary items and services that are required (under law 

or such contract) to be provided to individuals covered 

under the risk-sharing contract, if the failure has adversely affected (or has a substantial likelihood of adversely affecting) these individuals. 

(7) FRAUD, KICKBACKS, AND OTHER PROHIBITED ACTIVITIES.— 

Any individual or entity that the Secretary determines has 

committed an act which is described in section 1128A, 1128B, 

or 1129. 

(8) ENTITIES CONTROLLED BY A SANCTIONED INDIVIDUAL.— 

Any entity with respect to which the Secretary determines that 

a person— 

(A)(i) who has a direct or indirect ownership or control 

interest of 5 percent or more in the entity or with an ownership or control interest (as defined in section 1124(a)(3)) 

in that entity, 

(ii) who is an officer, director, agent, or managing employee (as defined in section 1126(b)) of that entity; or 

(iii) who was described in clause (i) but is no longer so 

described because of a transfer of ownership or control interest, in anticipation of (or following) a conviction, assessment, or exclusion described in subparagraph (B) against 

the person, to an immediate family member (as defined in 

subsection (j)(1)) or a member of the household of the person (as defined in subsection (j)(2)) who continues to maintain an interest described in such clause— 

is a person— 

(B)(i) who has been convicted of any offense described in 

subsection (a) or in paragraph (1), (2), or (3) of this subsection; 

(ii) against whom a civil monetary penalty has been assessed under section 1128A or 1129; or 

(iii) who has been excluded from participation under a 

program under title XVIII or under a State health care 

program. 

(9) FAILURE TO DISCLOSE REQUIRED INFORMATION.—Any entity that did not fully and accurately make any disclosure required by section 1124, section 1124A, or section 1126. 

(10) FAILURE TO SUPPLY REQUESTED INFORMATION ON SUBCONTRACTORS AND SUPPLIERS.—Any disclosing entity (as defined in section 1124(a)(2)) that fails to supply (within such period as may be specified by the Secretary in regulations) upon 

request specifically addressed to the entity by the Secretary or 

by the State agency administering or supervising the administration of a State health care program— 


emcdonald on DSK67QTVN1PROD with HEARING
54 

(A) full and complete information as to the ownership of 

a subcontractor (as defined by the Secretary in regulations) with whom the entity has had, during the previous 

12 months, business transactions in an aggregate amount 

in excess of $25,000, or 

(B) full and complete information as to any significant 

business transactions (as defined by the Secretary in regulations), occurring during the five-year period ending on 

the date of such request, between the entity and any wholly owned supplier or between the entity and any subcontractor. 

(11) FAILURE TO SUPPLY PAYMENT INFORMATION.—Any individual or entity furnishing, ordering, referring for furnishing, 

or certifying the need for items or services for which payment 

may be made under title XVIII or a State health care program 

that fails to provide such information as the Secretary or the 

appropriate State agency finds necessary to determine whether 

such payments are or were due and the amounts thereof, or 

has refused to permit such examination of its records by or on 

behalf of the Secretary or that agency as may be necessary to 

verify such information. 

(12) FAILURE TO GRANT IMMEDIATE ACCESS.—Any individual 

or entity that fails to grant immediate access, upon reasonable 

request (as defined by the Secretary in regulations) to any of 

the following: 

(A) To the Secretary, or to the agency used by the Secretary, for the purpose specified in the first sentence of 

section 1864(a) (relating to compliance with conditions of 

participation or payment). 

(B) To the Secretary or the State agency, to perform the 

reviews and surveys required under State plans under 

paragraphs (26), (31), and (33) of section 1902(a) and 

under section 1903(g). 

(C) To the Inspector General of the Department of 

Health and Human Services, for the purpose of reviewing 

records, documents, and other data necessary to the performance of the statutory functions of the Inspector General. 

(D) To a State medicaid fraud control unit (as defined in 

section 1903(q)), for the purpose of conducting activities 

described in that section. 

(13) FAILURE TO TAKE CORRECTIVE ACTION.—Any hospital 

that fails to comply substantially with a corrective action required under section 1886(f)(2)(B). 

(14) DEFAULT ON HEALTH EDUCATION LOAN OR SCHOLARSHIP

OBLIGATIONS.—Any individual who the Secretary determines is 

in default on repayments of scholarship obligations or loans in 

connection with health professions education made or secured, 

in whole or in part, by the Secretary and with respect to whom 

the Secretary has taken all reasonable steps available to the 

Secretary to secure repayment of such obligations or loans, except that (A) the Secretary shall not exclude pursuant to this 

paragraph a physician who is the sole community physician or 

sole source of essential specialized services in a community if 

a State requests that the physician not be excluded, and (B) 


emcdonald on DSK67QTVN1PROD with HEARING
55 

the Secretary shall take into account, in determining whether 

to exclude any other physician pursuant to this paragraph, access of beneficiaries to physician services for which payment 

may be made under title XVIII or XIX. 

(15) INDIVIDUALS CONTROLLING A SANCTIONED ENTITY.—(A) 

Any individual— 

(i) who has a direct or indirect ownership or control interest in a sanctioned entity and who knows or should 

know (as defined in section 1128A(i)(6)) of the action constituting the basis for the conviction or exclusion described 

in subparagraph (B); or 

(ii) who is an officer or managing employee (as defined 

in section 1126(b)) of such an entity. 

(B) For purposes of subparagraph (A), the term ‘‘sanctioned 

entity’’ means an entity— 

(i) that has been convicted of any offense described in 

subsection (a) or in paragraph (1), (2), or (3) of this subsection; or 

(ii) that has been excluded from participation under a 

program under title XVIII or under a State health care 

program. 

(16) MAKING FALSE STATEMENTS OR MISREPRESENTATION OF

MATERIAL FACTS.—Any individual or entity that knowingly 

makes or causes to be made any false statement, omission, or 

misrepresentation of a material fact in any application, agreement, bid, or contract to participate or enroll as a provider of 

services or supplier under a Federal health care program (as 

defined in section 1128B(f)), including Medicare Advantage organizations under part C of title XVIII, prescription drug plan 

sponsors under part D of title XVIII, medicaid managed care 

organizations under title XIX, and entities that apply to participate as providers of services or suppliers in such managed 

care organizations and such plans. 

(c) NOTICE, EFFECTIVE DATE, AND PERIOD OF EXCLUSION.—(1) An 

exclusion under this section or under section 1128A shall be effective at such time and upon such reasonable notice to the public and 

to the individual or entity excluded as may be specified in regulations consistent with paragraph (2). 

(2)(A) Except as provided in subparagraph (B), such an exclusion 

shall be effective with respect to services furnished to an individual 

on or after the effective date of the exclusion. 

(B) Unless the Secretary determines that the health and safety 

of individuals receiving services warrants the exclusion taking effect earlier, an exclusion shall not apply to payments made under 

title XVIII or under a State health care program for— 

(i) inpatient institutional services furnished to an individual 

who was admitted to such institution before the date of the exclusion, or 

(ii) home health services and hospice care furnished to an individual under a plan of care established before the date of the 

exclusion, 

until the passage of 30 days after the effective date of the exclusion. 

(3)(A) The Secretary shall specify, in the notice of exclusion 

under paragraph (1) and the written notice under section 1128A, 


emcdonald on DSK67QTVN1PROD with HEARING
56 

the minimum period (or, in the case of an exclusion of an individual under subsection (b)(12) or in the case described in subparagraph (G), the period) of the exclusion. 

(B) Subject to subparagraph (G), in the case of an exclusion 

under subsection (a), the minimum period of exclusion shall be not 

less than five years, except that, upon the request of the administrator of a Federal health care program (as defined in section 

1128B(f)) who determines that the exclusion would impose a hardship on beneficiaries (as defined in section 1128A(i)(5)) of that program, the Secretary may, after consulting with the Inspector General of the Department of Health and Human Services, waive the 

exclusion under subsection (a)(1), (a)(3), or (a)(4) with respect to 

that program in the case of an individual or entity that is the sole 

community physician or sole source of essential specialized services 

in a community. The Secretary’s decision whether to waive the exclusion shall not be reviewable. 

(C) In the case of an exclusion of an individual under subsection 

(b)(12), the period of the exclusion shall be equal to the sum of— 

(i) the length of the period in which the individual failed to 

grant the immediate access described in that subsection, and 

(ii) an additional period, not to exceed 90 days, set by the 

Secretary. 

(D) Subject to subparagraph (G), in the case of an exclusion of 

an individual or entity under paragraph (1), (2), or (3) of subsection 

(b), the period of the exclusion shall be 3 years, unless the Secretary determines in accordance with published regulations that a 

shorter period is appropriate because of mitigating circumstances 

or that a longer period is appropriate because of aggravating circumstances. 

(E) In the case of an exclusion of an individual or entity under 

subsection (b)(4) or (b)(5), the period of the exclusion shall not be 

less than the period during which the individual’s or entity’s license to provide health care is revoked, suspended, or surrendered, 

or the individual or the entity is excluded or suspended from a Federal or State health care program. 

(F) In the case of an exclusion of an individual or entity under 

subsection (b)(6)(B), the period of the exclusion shall be not less 

than 1 year. 

(G) In the case of an exclusion of an individual under subsection 

(a) based on a conviction occurring on or after the date of the enactment of this subparagraph, if the individual has (before, on, or 

after such date) been convicted— 

(i) on one previous occasion of one or more offenses for which 

an exclusion may be effected under such subsection, the period 

of the exclusion shall be not less than 10 years, or 

(ii) on 2 or more previous occasions of one or more offenses 

for which an exclusion may be effected under such subsection, 

the period of the exclusion shall be permanent. 

(d) NOTICE TO STATE AGENCIES AND EXCLUSION UNDER STATE

HEALTH CARE PROGRAMS.—(1) Subject to paragraph (3), the Secretary shall exercise the authority under this section and section 

1128A in a manner that results in an individual’s or entity’s exclusion from all the programs under title XVIII and all the State 

health care programs in which the individual or entity may otherwise participate. 


emcdonald on DSK67QTVN1PROD with HEARING
57 

(2) The Secretary shall promptly notify each appropriate State 

agency administering or supervising the administration of each 

State health care program (and, in the case of an exclusion effected 

pursuant to subsection (a) and to which section 304(a)(5) of the 

Controlled Substances Act may apply, the Attorney General)— 

(A) of the fact and circumstances of each exclusion effected 

against an individual or entity under this section or section 

1128A, and 

(B) of the period (described in paragraph (3)) for which the 

State agency is directed to exclude the individual or entity 

from participation in the State health care program. 

(3)(A) Except as provided in subparagraph (B), the period of the 

exclusion under a State health care program under paragraph (2) 

shall be the same as any period of exclusion under title XVIII. 

(B)(i) The Secretary may waive an individual’s or entity’s exclusion under a State health care program under paragraph (2) if the 

Secretary receives and approves a request for the waiver with respect to the individual or entity from the State agency administering or supervising the administration of the program. 

(ii) A State health care program may provide for a period of exclusion which is longer than the period of exclusion under title 

XVIII. 

(e) NOTICE TO STATE LICENSING AGENCIES.—The Secretary 

shall— 

(1) promptly notify the appropriate State or local agency or 

authority having responsibility for the licensing or certification 

of an individual or entity excluded (or directed to be excluded) 

from participation under this section or section 1128A, of the 

fact and circumstances of the exclusion, 

(2) request that appropriate investigations be made and 

sanctions invoked in accordance with applicable State law and 

policy, and 

(3) request that the State or local agency or authority keep 

the Secretary and the Inspector General of the Department of 

Health and Human Services fully and currently informed with 

respect to any actions taken in response to the request. 

(f) NOTICE, HEARING, AND JUDICIAL REVIEW.—(1) Subject to paragraph (2), any individual or entity that is excluded (or directed to 

be excluded) from participation under this section is entitled to reasonable notice and opportunity for a hearing thereon by the Secretary to the same extent as is provided in section 205(b), and to 

judicial review of the Secretary’s final decision after such hearing 

as is provided in section 205(g), except that, in so applying such 

sections and section 205(l), any reference therein to the Commissioner of Social Security or the Social Security Administration shall 

be considered a reference to the Secretary or the Department of 

Health and Human Services, respectively. 

(2) Unless the Secretary determines that the health or safety of 

individuals receiving services warrants the exclusion taking effect 

earlier, any individual or entity that is the subject of an adverse 

determination under subsection (b)(7) shall be entitled to a hearing 

by an administrative law judge (as provided under section 205(b)) 

on the determination under subsection (b)(7) before any exclusion 

based upon the determination takes effect. 


emcdonald on DSK67QTVN1PROD with HEARING
58 

(3) The provisions of section 205(h) shall apply with respect to 

this section and sections 1128A, 1129, and 1156 to the same extent 

as it is applicable with respect to title II, except that, in so applying such section and section 205(l), any reference therein to the 

Commissioner of Social Security shall be considered a reference to 

the Secretary. 

(4) The provisions of subsections (d) and (e) of section 205 

shall apply with respect to this section to the same extent as 

they are applicable with respect to title II. The Secretary may 

delegate the authority granted by section 205(d) (as made applicable to this section) to the Inspector General of the Department of Health and Human Services for purposes of any investigation under this section. 

(g) APPLICATION FOR TERMINATION OF EXCLUSION.—(1) An individual or entity excluded (or directed to be excluded) from participation under this section or section 1128A may apply to the Secretary, in the manner specified by the Secretary in regulations and 

at the end of the minimum period of exclusion provided under subsection (c)(3) and at such other times as the Secretary may provide, 

for termination of the exclusion effected under this section or section 1128A. 

(2) The Secretary may terminate the exclusion if the Secretary 

determines, on the basis of the conduct of the applicant which occurred after the date of the notice of exclusion or which was unknown to the Secretary at the time of the exclusion, that— 

(A) there is no basis under subsection (a) or (b) or section 

1128A(a) for a continuation of the exclusion, and 

(B) there are reasonable assurances that the types of actions 

which formed the basis for the original exclusion have not recurred and will not recur. 

(3) The Secretary shall promptly notify each appropriate State 

agency administering or supervising the administration of each 

State health care program (and, in the case of an exclusion effected 

pursuant to subsection (a) and to which section 304(a)(5) of the 

Controlled Substances Act may apply, the Attorney General) of the 

fact and circumstances of each termination of exclusion made 

under this subsection. 

(h) DEFINITION OF STATE HEALTH CARE PROGRAM.—For purposes 

of this section and sections 1128A and 1128B, the term ‘‘State 

health care program’’ means— 

(1) a State plan approved under title XIX, 

(2) any program receiving funds under title V or from an allotment to a State under such title, 

(3) any program receiving funds under subtitle 1 of title XX 

or from an allotment to a State under such subtitle, or 

(4) a State child health plan approved under title XXI. 

(i) CONVICTED DEFINED.—For purposes of subsections (a) and (b), 

an individual or entity is considered to have been ‘‘convicted’’ of a 

criminal offense— 

(1) when a judgment of conviction has been entered against 

the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the 

judgment of conviction or other record relating to criminal conduct has been expunged; 


emcdonald on DSK67QTVN1PROD with HEARING
59 

(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court; 

(3) when a plea of guilty or nolo contendere by the individual 

or entity has been accepted by a Federal, State, or local court; 

or 

(4) when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld. 

(j) DEFINITION OF IMMEDIATE FAMILY MEMBER AND MEMBER OF

HOUSEHOLD.—For purposes of subsection (b)(8)(A)(iii): 

(1) The term ‘‘immediate family member’’ means, with respect to a person— 

(A) the husband or wife of the person; 

(B) the natural or adoptive parent, child, or sibling of 

the person; 

(C) the stepparent, stepchild, stepbrother, or stepsister 

of the person; 

(D) the father-, mother-, daughter-, son-, brother-, or sister-in-law of the person; 

(E) the grandparent or grandchild of the person; and 

(F) the spouse of a grandparent or grandchild of the person. 

(2) The term ‘‘member of the household’’ means, with respect 

to any person, any individual sharing a common abode as part 

of a single family unit with the person, including domestic employees and others who live together as a family unit, but not 

including a roomer or boarder. 

CIVIL MONETARY PENALTIES

SEC. 1128A. (a) Any person (including an organization, agency, 

or other entity, but excluding a beneficiary, as defined in subsection (i)(5)) that— 

(1) knowingly presents or causes to be presented to an officer, employee, or agent of the United States, or of any department or agency thereof, or of any State agency (as defined in 

subsection (i)(1)), a claim (as defined in subsection (i)(2)) that 

the Secretary determines— 

(A) is for a medical or other item or service that the person knows or should know was not provided as claimed, including any person who engages in a pattern or practice of 

presenting or causing to be presented a claim for an item 

or service that is based on a code that the person knows 

or should know will result in a greater payment to the person than the code the person knows or should know is applicable to the item or service actually provided, 

(B) is for a medical or other item or service and the person knows or should know the claim is false or fraudulent, 

(C) is presented for a physician’s service (or an item or 

service incident to a physician’s service) by a person who 

knows or should know that the individual who furnished 

(or supervised the furnishing of) the service— 

(i) was not licensed as a physician, 

(ii) was licensed as a physician, but such license had 

been obtained through a misrepresentation of material 


emcdonald on DSK67QTVN1PROD with HEARING
60 

fact (including cheating on an examination required 

for licensing), or 

(iii) represented to the patient at the time the service was furnished that the physician was certified in 

a medical specialty by a medical specialty board when 

the individual was not so certified, 

(D) is for a medical or other item or service furnished 

during a period in which the person was excluded from the 

program under which the claim was made pursuant to a 

determination by the Secretary under this section or under 

section 1128, 1156, 1160(b) (as in effect on September 2, 

1982), 1862(d) (as in effect on the date of the enactment 

of the Medicare and Medicaid Patient and Program Protection Act of 1987), or 1866(b) or as a result of the application of the provisions of section 1842(j)(2), or 

(E) is for a pattern of medical or other items or services 

that a person knows or should know are not medically necessary; 

(2) knowingly presents or causes to be presented to any person a request for payment which is in violation of the terms 

of (A) an assignment under section 1842(b)(3)(B)(ii), or (B) an 

agreement with a State agency (or other requirement of a 

State plan under title XIX) not to charge a person for an item 

or service in excess of the amount permitted to be charged, or 

(C) an agreement to be a participating physician or supplier 

under section 1842(h)(1), or (D) an agreement pursuant to section 1866(a)(1)(G); 

(3) knowingly gives or causes to be given to any person, with 

respect to coverage under title XVIII of inpatient hospital services subject to the provisions of section 1886, information that 

he knows or should know is false or misleading, and that could 

reasonably be expected to influence the decision when to discharge such person or another individual from the hospital; 

(4) in the case of a person who is not an organization, agency, or other entity, is excluded from participating in a program 

under title XVIII or a State health care program in accordance 

with this subsection or under section 1128 and who, at the 

time of a violation of this subsection— 

(A) retains a direct or indirect ownership or control interest in an entity that is participating in a program under 

title XVIII or a State health care program, and who knows 

or should know of the action constituting the basis for the 

exclusion; or 

(B) is an officer or managing employee (as defined in section 1126(b)) of such an entity; 

(5) offers to or transfers remuneration to any individual eligible for benefits under title XVIII of this Act, or under a State 

health care program (as defined in section 1128(h)) that such 

person knows or should know is likely to influence such individual to order or receive from a particular provider, practitioner, or supplier any item or service for which payment may 

be made, in whole or in part, under title XVIII, or a State 

health care program (as so defined); 

(6) arranges or contracts (by employment or otherwise) with 

an individual or entity that the person knows or should know 


emcdonald on DSK67QTVN1PROD with HEARING
61 

is excluded from participation in a Federal health care program (as defined in section 1128B(f)), for the provision of items 

or services for which payment may be made under such a program; 

(7) commits an act described in paragraph (1) or (2) of section 1128B(b); 

(8) knowingly makes, uses, or causes to be made or used, a 

false record or statement material to a false or fraudulent 

claim for payment for items and services furnished under a 

Federal health care program; or 

(9) fails to grant timely access, upon reasonable request (as 

defined by the Secretary in regulations), to the Inspector General of the Department of Health and Human Services, for the 

purpose of audits, investigations, evaluations, or other statutory functions of the Inspector General of the Department of 

Health and Human Services; 

(8) orders or prescribes a medical or other item or service 

during a period in which the person was excluded from a Federal health care program (as so defined), in the case where the 

person knows or should know that a claim for such medical or 

other item or service will be made under such a program; 

(9) knowingly makes or causes to be made any false statement, omission, or misrepresentation of a material fact in any 

application, bid, or contract to participate or enroll as a provider of services or a supplier under a Federal health care program (as so defined), including Medicare Advantage organizations under part C of title XVIII, prescription drug plan sponsors under part D of title XVIII, medicaid managed care organizations under title XIX, and entities that apply to participate 

as providers of services or suppliers in such managed care organizations and such plans; 

(10) knows of an overpayment (as defined in paragraph (4) 

of section 1128J(d)) and does not report and return the overpayment in accordance with such section; 

shall be subject, in addition to any other penalties that may be prescribed by law, to a civil money penalty of not more than $10,000 

for each item or service (or, in cases under paragraph (3), $15,000 

for each individual with respect to whom false or misleading information was given; in cases under paragraph (4), $10,000 for each 

day the prohibited relationship occurs; in cases under paragraph 

(7), $50,000 for each such act; or in cases under paragraph (9), 

$50,000 for each false statement or misrepresentation of a material 

fact). In addition, such a person shall be subject to an assessment 

of not more than 3 times the amount claimed for each such item 

or service in lieu of damages sustained by the United States or a 

State agency because of such claim (or, in cases under paragraph 

(7), damages of not more than 3 times the total amount of remuneration offered, paid, solicited, or received, without regard to 

whether a portion of such remuneration was offered, paid, solicited, 

or received for a lawful purpose; or in cases under paragraph (9), 

an assessment of not more than 3 times the total amount claimed 

for each item or service for which payment was made based upon 

the application containing the false statement or misrepresentation 

of a material fact). In addition the Secretary may make a determination in the same proceeding to exclude the person from parVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00067 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
62 

ticipation in the Federal health care programs (as defined in section 1128B(f)(1)) and to direct the appropriate State agency to exclude the person from participation in any State health care program. 

(b)(1) If a hospital or a critical access hospital knowingly makes 

a payment, directly or indirectly, to a physician as an inducement 

to reduce or limit medically necessary services provided with respect to individuals who— 

(A) are entitled to benefits under part A or part B of title 

XVIII or to medical assistance under a State plan approved 

under title XIX, and 

(B) are under the direct care of the physician, 

the hospital or a critical access hospital shall be subject, in addition 

to any other penalties that may be prescribed by law, to a civil 

money penalty of not more than $2,000 for each such individual 

with respect to whom the payment is made. 

(2) Any physician who knowingly accepts receipt of a payment 

described in paragraph (1) shall be subject, in addition to any other 

penalties that may be prescribed by law, to a civil money penalty 

of not more than $2,000 for each individual described in such paragraph with respect to whom the payment is made. 

(3)(A) Any physician who executes a document described in subparagraph (B) with respect to an individual knowing that all of the 

requirements referred to in such subparagraph are not met with 

respect to the individual shall be subject to a civil monetary penalty of not more than the greater of— 

(i) $5,000, or 

(ii) three times the amount of the payments under title XVIII 

for home health services which are made pursuant to such certification. 

(B) A document described in this subparagraph is any document 

that certifies, for purposes of title XVIII, that an individual meets 

the requirements of section 1814(a)(2)(C) or 1835(a)(2)(A) in the 

case of home health services furnished to the individual. 

(c)(1) The Secretary may initiate a proceeding to determine 

whether to impose a civil money penalty, assessment, or exclusion 

under subsection (a) or (b) only as authorized by the Attorney General pursuant to procedures agreed upon by them. The Secretary 

may not initiate an action under this section with respect to any 

claim, request for payment, or other occurrence described in this 

section later than six years after the date the claim was presented, 

the request for payment was made, or the occurrence took place. 

The Secretary may initiate an action under this section by serving 

notice of the action in any manner authorized by Rule 4 of the Federal Rules of Civil Procedure. 

(2) The Secretary shall not make a determination adverse to any 

person under subsection (a) or (b) until the person has been given 

written notice and an opportunity for the determination to be made 

on the record after a hearing at which the person is entitled to be 

represented by counsel, to present witnesses, and to cross-examine 

witnesses against the person. 

(3) In a proceeding under subsection (a) or (b) which— 

(A) is against a person who has been convicted (whether 

upon a verdict after trial or upon a plea of guilty or nolo 


emcdonald on DSK67QTVN1PROD with HEARING
63 

contendere) of a Federal crime charging fraud or false statements, and 

(B) involves the same transaction as in the criminal action, 

the person is estopped from denying the essential elements of 

the criminal offense. 

(4) The official conducting a hearing under this section may sanction a person, including any party or attorney, for failing to comply 

with an order or procedure, failing to defend an action, or other 

misconduct as would interfere with the speedy, orderly, or fair conduct of the hearing. Such sanction shall reasonably relate to the severity and nature of the failure or misconduct. Such sanction may 

include— 

(A) in the case of refusal to provide or permit discovery, 

drawing negative factual inferences or treating such refusal as 

an admission by deeming the matter, or certain facts, to be established, 

(B) prohibiting a party from introducing certain evidence or 

otherwise supporting a particular claim or defense, 

(C) striking pleadings, in whole or in part, 

(D) staying the proceedings, 

(E) dismissal of the action, 

(F) entering a default judgment, 

(G) ordering the party or attorney to pay attorneys’ fees and 

other costs caused by the failure or misconduct, and 

(H) refusing to consider any motion or other action which is 

not filed in a timely manner. 

(d) In determining the amount or scope of any penalty, assessment, or exclusion imposed pursuant to subsection (a) or (b), the 

Secretary shall take into account— 

(1) the nature of claims and the circumstances under which 

they were presented, 

(2) the degree of culpability, history of prior offenses, and financial condition of the person presenting the claims, and 

(3) such other matters as justice may require. 

(e) Any person adversely affected by a determination of the Secretary under this section may obtain a review of such determination in the United States Court of Appeals for the circuit in which 

the person resides, or in which the claim was presented, by filing 

in such court (within sixty days following the date the person is notified of the Secretary’s determination) a written petition requesting that the determination be modified or set aside. A copy of the 

petition shall be forthwith transmitted by the clerk of the court to 

the Secretary, and thereupon the Secretary shall file in the Court 

the record in the proceeding as provided in section 2112 of title 28, 

United States Code. Upon such filing, the court shall have jurisdiction of the proceeding and of the question determined therein, and 

shall have the power to make and enter upon the pleadings, testimony, and proceedings set forth in such record a decree affirming, 

modifying, remanding for further consideration, or setting aside, in 

whole or in part, the determination of the Secretary and enforcing 

the same to the extent that such order is affirmed or modified. No 

objection that has not been urged before the Secretary shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances. 

The findings of the Secretary with respect to questions of fact, if 


emcdonald on DSK67QTVN1PROD with HEARING
64 

supported by substantial evidence on the record considered as a 

whole, shall be conclusive. If any party shall apply to the court for 

leave to adduce additional evidence and shall show to the satisfaction of the court that such additional evidence is material and that 

there were reasonable grounds for the failure to adduce such evidence in the hearing before the Secretary, the court may order such 

additional evidence to be taken before the Secretary and to be 

made a part of the record. The Secretary may modify his findings 

as to the facts, or make new findings, by reason of additional evidence so taken and filed, and he shall file with the court such 

modified or new findings, which findings with respect to questions 

of fact, if supported by substantial evidence on the record considered as a whole, shall be conclusive, and his recommendations, if 

any, for the modification or setting aside of his original order. Upon 

the filing of the record with it, the jurisdiction of the court shall 

be exclusive and its judgment and decree shall be final, except that 

the same shall be subject to review by the Supreme Court of the 

United States, as provided in section 1254 of title 28, United States 

Code. 

(f) Civil money penalties and assessments imposed under this 

section may be compromised by the Secretary and may be recovered in a civil action in the name of the United States brought in 

United States district court for the district where the claim was 

presented, or where the claimant resides, as determined by the 

Secretary. Amounts recovered under this section shall be paid to 

the Secretary and disposed of as follows: 

(1)(A) In the case of amounts recovered arising out of a claim 

under title XIX, there shall be paid to the State agency an 

amount bearing the same proportion to the total amount recovered as the State’s share of the amount paid by the State agency for such claim bears to the total amount paid for such claim. 

(B) In the case of amounts recovered arising out of a claim 

under an allotment to a State under title V, there shall be paid 

to the State agency an amount equal to three-sevenths of the 

amount recovered. 

(2) Such portion of the amounts recovered as is determined 

to have been paid out of the trust funds under sections 1817 

and 1841 shall be repaid to such trust funds. 

(3) With respect to amounts recovered arising out of a claim 

under a Federal health care program (as defined in section 

1128B(f)), the portion of such amounts as is determined to 

have been paid by the program shall be repaid to the program, 

and the portion of such amounts attributable to the amounts 

recovered under this section by reason of the amendments 

made by the Health Insurance Portability and Accountability 

Act of 1996 (as estimated by the Secretary) shall be deposited 

into the Federal Hospital Insurance Trust Fund pursuant to 

section 1817(k)(2)(C). 

(4) The remainder of the amounts recovered shall be deposited as miscellaneous receipts of the Treasury of the United 

States. 

The amount of such penalty or assessment, when finally determined, or the amount agreed upon in compromise, may be deducted 

from any sum then or later owing by the United States or a State 


emcdonald on DSK67QTVN1PROD with HEARING
65 

agency to the person against whom the penalty or assessment has 

been assessed. 

(g) A determination by the Secretary to impose a penalty, assessment, or exclusion under subsection (a) or (b) shall be final upon 

the expiration of the sixty-day period referred to in subsection (e). 

Matters that were raised or that could have been raised in a hearing before the Secretary or in an appeal pursuant to subsection (e) 

may not be raised as a defense to a civil action by the United 

States to collect a penalty, assessment, or exclusion assessed under 

this section. 

(h) Whenever the Secretary’s determination to impose a penalty, 

assessment, or exclusion under subsection (a) or (b) becomes final, 

he shall notify the appropriate State or local medical or professional organization, the appropriate State agency or agencies administering or supervising the administration of State health care 

programs (as defined in section 1128(h)), and the appropriate utilization and quality control peer review organization, and the appropriate State or local licensing agency or organization (including the 

agency specified in section 1864(a) and 1902(a)(33)) that such a 

penalty, assessment, or exclusion has become final and the reasons 

therefor. 

(i) For the purposes of this section: 

(1) The term ‘‘State agency’’ means the agency established or 

designated to administer or supervise the administration of the 

State plan under title XIX of this Act or designated to administer the State’s program under title V or subtitle 1 of title XX 

of this Act. 

(2) The term ‘‘claim’’ means an application for payments for 

items and services under a Federal health care program (as defined in section 1128B(f)). 

(3) The term ‘‘item or service’’ includes (A) any particular 

item, device, medical supply, or service claimed to have been 

provided to a patient and listed in an itemized claim for payment, and (B) in the case of a claim based on costs, any entry 

in the cost report, books of account or other documents supporting such claim. 

(4) The term ‘‘agency of the United States’’ includes any contractor acting as a fiscal intermediary, carrier, or fiscal agent 

or any other claims processing agent for a Federal health care 

program (as so defined). 

(5) The term ‘‘beneficiary’’ means an individual who is eligible to receive items or services for which payment may be 

made under a Federal health care program (as so defined) but 

does not include a provider, supplier, or practitioner. 

(6) The term ‘‘remuneration’’ includes the waiver of coinsurance and deductible amounts (or any part thereof), and transfers of items or services for free or for other than fair market 

value. The term ‘‘remuneration’’ does not include— 

(A) the waiver of coinsurance and deductible amounts by 

a person, if— 

(i) the waiver is not offered as part of any advertisement or solicitation; 

(ii) the person does not routinely waive coinsurance 

or deductible amounts; and 

(iii) the person— 


emcdonald on DSK67QTVN1PROD with HEARING
66 

(I) waives the coinsurance and deductible 

amounts after determining in good faith that the 

individual is in financial need; or 

(II) fails to collect coinsurance or deductible 

amounts after making reasonable collection efforts; 

(B) subject to subsection (n), any permissible practice described in any subparagraph of section 1128B(b)(3) or in 

regulations issued by the Secretary; 

(C) differentials in coinsurance and deductible amounts 

as part of a benefit plan design as long as the differentials 

have been disclosed in writing to all beneficiaries, third 

party payers, and providers, to whom claims are presented 

and as long as the differentials meet the standards as defined in regulations promulgated by the Secretary not later 

than 180 days after the date of the enactment of the 

Health Insurance Portability and Accountability Act of 

1996; 

(D) incentives given to individuals to promote the delivery of preventive care as determined by the Secretary in 

regulations so promulgated; 

(E) a reduction in the copayment amount for covered 

OPD services under section 1833(t)(5)(B); 

(F) any other remuneration which promotes access to 

care and poses a low risk of harm to patients and Federal 

health care programs (as defined in section 1128B(f) and 

designated by the Secretary under regulations); 

(G) the offer or transfer of items or services for free or 

less than fair market value by a person, if— 

(i) the items or services consist of coupons, rebates, 

or other rewards from a retailer; 

(ii) the items or services are offered or transferred 

on equal terms available to the general public, regardless of health insurance status; and 

(iii) the offer or transfer of the items or services is 

not tied to the provision of other items or services reimbursed in whole or in part by the program under 

title XVIII or a State health care program (as defined 

in section 1128(h)); 

(H) the offer or transfer of items or services for free or 

less than fair market value by a person, if— 

(i) the items or services are not offered as part of 

any advertisement or solicitation; 

(ii) the items or services are not tied to the provision 

of other services reimbursed in whole or in part by the 

program under title XVIII or a State health care program (as so defined); 

(iii) there is a reasonable connection between the 

items or services and the medical care of the individual; and 

(iv) the person provides the items or services after 

determining in good faith that the individual is in financial need; or 

(I) effective on a date specified by the Secretary (but not 

earlier than January 1, 2011), the waiver by a PDP sponVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00072 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
67 

sor of a prescription drug plan under part D of title XVIII 

or an MA organization offering an MA–PD plan under part 

C of such title of any copayment for the first fill of a covered part D drug (as defined in section 1860D–2(e)) that 

is a generic drug for individuals enrolled in the prescription drug plan or MA–PD plan, respectively. 

(7) The term ‘‘should know’’ means that a person, with respect to information— 

(A) acts in deliberate ignorance of the truth or falsity of 

the information; or 

(B) acts in reckless disregard of the truth or falsity of 

the information, 

and no proof of specific intent to defraud is required. 

(j)(1) The provisions of subsections (d) and (e) of section 205 shall 

apply with respect to this section to the same extent as they are 

applicable with respect to title II. The Secretary may delegate the 

authority granted by section 205(d) (as made applicable to this section) to the Inspector General of the Department of Health and 

Human Services for purposes of any investigation under this section. 

(2) The Secretary may delegate authority granted under this section and under section 1128 to the Inspector General of the Department of Health and Human Services. 

(k) Whenever the Secretary has reason to believe that any person 

has engaged, is engaging, or is about to engage in any activity 

which makes the person subject to a civil monetary penalty under 

this section, the Secretary may bring an action in an appropriate 

district court of the United States (or, if applicable, a United States 

court of any territory) to enjoin such activity, or to enjoin the person from concealing, removing, encumbering, or disposing of assets 

which may be required in order to pay a civil monetary penalty if 

any such penalty were to be imposed or to seek other appropriate 

relief. 

(l) A principal is liable for penalties, assessments, and an exclusion under this section for the actions of the principal’s agent acting within the scope of the agency. 

(m)(1) For purposes of this section, with respect to a Federal 

health care program not contained in this Act, references to the 

Secretary in this section shall be deemed to be references to the 

Secretary or Administrator of the department or agency with jurisdiction over such program and references to the Inspector General 

of the Department of Health and Human Services in this section 

shall be deemed to be references to the Inspector General of the applicable department or agency. 

(2)(A) The Secretary and Administrator of the departments and 

agencies referred to in paragraph (1) may include in any action 

pursuant to this section, claims within the jurisdiction of other 

Federal departments or agencies as long as the following conditions 

are satisfied: 

(i) The case involves primarily claims submitted to the Federal health care programs of the department or agency initiating the action. 

(ii) The Secretary or Administrator of the department or 

agency initiating the action gives notice and an opportunity to 

participate in the investigation to the Inspector General of the 


emcdonald on DSK67QTVN1PROD with HEARING
68 

department or agency with primary jurisdiction over the Federal health care programs to which the claims were submitted. 

(B) If the conditions specified in subparagraph (A) are fulfilled, 

the Inspector General of the department or agency initiating the 

action is authorized to exercise all powers granted under the Inspector General Act of 1978 (5 U.S.C. App.) with respect to the 

claims submitted to the other departments or agencies to the same 

manner and extent as provided in that Act with respect to claims 

submitted to such departments or agencies. 

(n)(1) Subparagraph (B) of subsection (i)(6) shall not apply to a 

practice described in paragraph (2) unless— 

(A) the Secretary, through the Inspector General of the Department of Health and Human Services, promulgates a rule 

authorizing such a practice as an exception to remuneration; 

and 

(B) the remuneration is offered or transferred by a person 

under such rule during the 2-year period beginning on the date 

the rule is first promulgated. 

(2) A practice described in this paragraph is a practice under 

which a health care provider or facility pays, in whole or in part, 

premiums for medicare supplemental policies for individuals entitled to benefits under part A of title XVIII pursuant to section 

226A. 

* * * * * * * 

PERIOD WITHIN WHICH CERTAIN CLAIMS MUST BE FILED

SEC. 1132. (a) Notwithstanding any other provision of this Act 

(but subject to subsection (b)), any claim by a State for payment 

with respect to an expenditure made during any calendar quarter 

by the State— 

(1) in carrying out a State plan approved under title I, IV, 

X, XIV, XVI, XIX, or XX of this Act, or 

(2) under any other provision of this Act which provides (on 

an entitlement basis) for Federal financial participation in expenditures made under State plans or programs, 

shall be filed (in such form and manner as the Secretary shall by 

regulations prescribe) within the two-year period which begins on 

the first day of the calendar quarter immediately following such 

calendar quarter; and payment shall not be made under this Act 

on account of any such expenditure if claim therefor is not made 

within such two-year period; except that this subsection shall not 

be applied so as to deny payment with respect to any expenditure 

involving court-ordered retroactive payments or audit exceptions, 

or adjustments to prior year costs. 

(b) The Secretary shall waive the requirement imposed under 

subsection (a) with respect to the filing of any claim if he determines (in accordance with regulations) that there was good cause 

for the failure by the State to file such claim within the period prescribed under subsection (a). Any such waiver shall be only for 

such additional period of time as may be necessary to provide the 

State with a reasonable opportunity to file such claim. A failure to 

file a claim within such time period which is attributable to neglect 


emcdonald on DSK67QTVN1PROD with HEARING
69 

or administrative inadequacies shall be deemed not to be for good 

cause. 

* * * * * * * 

TITLE XIX—GRANTS TO STATES FOR MEDICAL ASSISTANCE 

PROGRAMS 

* * * * * * * 

STATE PLANS FOR MEDICAL ASSISTANCE

SEC. 1902. (a) A State plan for medical assistance must— 

(1) provide that it shall be in effect in all political subdivisions of the State, and, if administered by them, be mandatory 

upon them; 

(2) provide for financial participation by the State equal to 

not less than 40 per centum of the non-Federal share of the expenditures under the plan with respect to which payments 

under section 1903 are authorized by this title; and, effective 

July 1, 1969, provide for financial participation by the State 

equal to all of such non-Federal share or provide for distribution of funds from Federal or State sources, for carrying out 

the State plan, on an equalization or other basis which will assure that the lack of adequate funds from local sources will not 

result in lowering the amount, duration, scope, or quality of 

care and services available under the plan; 

(3) provide for granting an opportunity for a fair hearing before the State agency to any individual whose claim for medical 

assistance under the plan is denied or is not acted upon with 

reasonable promptness; 

(4) provide (A) such methods of administration (including 

methods relating to the establishment and maintenance of personnel standards on a merit basis, except that the Secretary 

shall exercise no authority with respect to the selection, tenure 

of office, and compensation of any individual employed in accordance with such methods, and including provision for utilization of professional medical personnel in the administration 

and, where administered locally, supervision of administration 

of the plan) as are found by the Secretary to be necessary for 

the proper and efficient operation of the plan, (B) for the training and effective use of paid subprofessional staff, with particular emphasis on the full-time or part-time employment of 

recipients and other persons of low income, as community service aides, in the administration of the plan and for the use of 

nonpaid or partially paid volunteers in a social service volunteer program in providing services to applicants and recipients 

and in assisting any advisory committees established by the 

State agency, (C) that each State or local officer, employee, or 

independent contractor who is responsible for the expenditure 

of substantial amounts of funds under the State plan, each individual who formerly was such an officer, employee, or contractor, and each partner of such an officer, employee, or contractor shall be prohibited from committing any act, in relation 

to any activity under the plan, the commission of which, in 

connection with any activity concerning the United States Government, by an officer or employee of the United States GovVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00075 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
70 

ernment, an individual who was such an officer or employee, 

or a partner of such an officer or employee is prohibited by section 207 or 208 of title 18, United States Code, and (D) that 

each State or local officer, employee, or independent contractor 

who is responsible for selecting, awarding, or otherwise obtaining items and services under the State plan shall be subject to 

safeguards against conflicts of interest that are at least as 

stringent as the safeguards that apply under section 27 of the 

Office of Federal Procurement Policy Act (41 U.S.C. 423) to 

persons described in subsection (a)(2) of such section of that 

Act; 

(5) either provide for the establishment or designation of a 

single State agency to administer or to supervise the administration of the plan; or provide for the establishment or designation of a single State agency to administer or to supervise the 

administration of the plan, except that the determination of 

eligibility for medical assistance under the plan shall be made 

by the State or local agency administering the State plan approved under title I or XVI (insofar as it relates to the aged) 

if the State is eligible to participate in the State plan program 

established under title XVI, or by the agency or agencies administering the supplemental security income program established under title XVI or the State plan approved under part 

A of title IV if the State is not eligible to participate in the 

State plan program established under title XVI; 

(6) provide that the State agency will make such reports, in 

such form and containing such information, as the Secretary 

may from time to time require, and comply with such provisions as the Secretary may from time to time find necessary 

to assure the correctness and verification of such reports; 

(7) provide— 

(A) safeguards which restrict the use or disclosure of information concerning applicants and recipients to purposes 

directly connected with— 

(i) the administration of the plan; and 

(ii) the exchange of information necessary to certify 

or verify the certification of eligibility of children for 

free or reduced price breakfasts under the Child Nutrition Act of 1966 and free or reduced price lunches 

under the Richard B. Russell National School Lunch 

Act, in accordance with section 9(b) of that Act, using 

data standards and formats established by the State 

agency; and 

(B) that, notwithstanding the Express Lane option under 

subsection (e)(13), the State may enter into an agreement 

with the State agency administering the school lunch program established under the Richard B. Russell National 

School Lunch Act under which the State shall establish 

procedures to ensure that— 

(i) a child receiving medical assistance under the 

State plan under this title whose family income does 

not exceed 133 percent of the poverty line (as defined 

in section 673(2) of the Community Services Block 

Grant Act, including any revision required by such 

section), as determined without regard to any expense, 


emcdonald on DSK67QTVN1PROD with HEARING
71 

block, or other income disregard, applicable to a family 

of the size involved, may be certified as eligible for 

free lunches under the Richard B. Russell National 

School Lunch Act and free breakfasts under the Child 

Nutrition Act of 1966 without further application; and 

(ii) the State agencies responsible for administering 

the State plan under this title, and for carrying out 

the school lunch program established under the Richard B. Russell National School Lunch Act (42 U.S.C. 

1751 et seq.) or the school breakfast program established by section 4 of the Child Nutrition Act of 1966 

(42 U.S.C. 1773), cooperate in carrying out paragraphs 

(3)(F) and (15) of section 9(b) of that Act; 

(8) provide that all individuals wishing to make application 

for medical assistance under the plan shall have opportunity to 

do so, and that such assistance shall be furnished with reasonable promptness to all eligible individuals; 

(9) provide— 

(A) that the State health agency, or other appropriate 

State medical agency (whichever is utilized by the Secretary for the purpose specified in the first sentence of section 1864(a)), shall be responsible for establishing and 

maintaining health standards for private or public institutions in which recipients of medical assistance under the 

plan may receive care or services, 

(B) for the establishment or designation of a State authority or authorities which shall be responsible for establishing and maintaining standards, other than those relating to health, for such institutions, 

(C) that any laboratory services paid for under such plan 

must be provided by a laboratory which meets the applicable requirements of section 1861(e)(9) or paragraphs (16) 

and (17) of section 1861(s), or, in the case of a laboratory 

which is in a rural health clinic, of section 1861(aa)(2)(G), 

and 

(D) that the State maintain a consumer-oriented website 

providing useful information to consumers regarding all 

skilled nursing facilities and all nursing facilities in the 

State, including for each facility, Form 2567 State inspection reports (or a successor form), complaint investigation 

reports, the facility’s plan of correction, and such other information that the State or the Secretary considers useful 

in assisting the public to assess the quality of long term 

care options and the quality of care provided by individual 

facilities; 

(10) provide— 

(A) for making medical assistance available, including at 

least the care and services listed in paragraphs (1) through 

(5), (17), (21), and (28) of section 1905(a), to— 

(i) all individuals— 

(I) who are receiving aid or assistance under 

any plan of the State approved under title I, X, 

XIV, or XVI, or part A or part E of title IV (including individuals eligible under this title by reason 

of section 402(a)(37), 406(h), or 473(b), or considVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00077 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
72 

ered by the State to be receiving such aid as authorized under section 482(e)(6)), 

(II)(aa) with respect to whom supplemental security income benefits are being paid under title 

XVI (or were being paid as of the date of the enactment of section 211(a) of the Personal Responsibility and Work Opportunity Reconciliation Act 

of 1996 (P.L. 104–193) and would continue to be 

paid but for the enactment of that section), (bb) 

who are qualified severely impaired individuals 

(as defined in section 1905(q)), or (cc) who are 

under 21 years of age and with respect to whom 

supplemental security income benefits would be 

paid under title XVI if subparagraphs (A) and (B) 

of section 1611(c)(7) were applied without regard 

to the phrase ‘‘the first day of the month following’’, 

(III) who are qualified pregnant women or children as defined in section 1905(n), 

(IV) who are described in subparagraph (A) or 

(B) of subsection (l)(1) and whose family income 

does not exceed the minimum income level the 

State is required to establish under subsection 

(l)(2)(A) for such a family; 

(V) who are qualified family members as defined 

in section 1905(m)(1), 

(VI) who are described in subparagraph (C) of 

subsection (l)(1) and whose family income does not 

exceed the income level the State is required to 

establish under subsection (l)(2)(B) for such a family, 

(VII) who are described in subparagraph (D) of 

subsection (l)(1) and whose family income does not 

exceed the income level the State is required to 

establish under subsection (l)(2)(C) for such a family; 

(VIII) beginning January 1, 2014, who are 

under 65 years of age, not pregnant, not entitled 

to, or enrolled for, benefits under part A of title 

XVIII, or enrolled for benefits under part B of title 

XVIII, and are not described in a previous subclause of this clause, and whose income (as determined under subsection (e)(14)) does not exceed 

133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size 

involved, subject to subsection (k); or 

(IX) who— 

(aa) are under 26 years of age; 

(bb) are not described in or enrolled under 

any of subclauses (I) through (VII) of this 

clause or are described in any of such subclauses but have income that exceeds the 

level of income applicable under the State 

plan for eligibility to enroll for medical assistance under such subclause; 


emcdonald on DSK67QTVN1PROD with HEARING
73 

(cc) were in foster care under the responsibility of the State on the date of attaining 18 

years of age or such higher age as the State 

has elected under section 475(8)(B)(iii); and 

(dd) were enrolled in the State plan under 

this title or under a waiver of the plan while 

in such foster care; 

(ii) at the option of the State, to any group or groups 

of individuals described in section 1905(a) (or, in the 

case of individuals described in section 1905(a)(i), to 

any reasonable categories of such individuals) who are 

not individuals described in clause (i) of this subparagraph but— 

(I) who meet the income and resources requirements of the appropriate State plan described in 

clause (i) or the supplemental security income program (as the case may be), 

(II) who would meet the income and resources 

requirements of the appropriate State plan described in clause (i) if their work-related child care 

costs were paid from their earnings rather than by 

a State agency as a service expenditure, 

(III) who would be eligible to receive aid under 

the appropriate State plan described in clause (i) 

if coverage under such plan was as broad as allowed under Federal law, 

(IV) with respect to whom there is being paid, 

or who are eligible, or would be eligible if they 

were not in a medical institution, to have paid 

with respect to them, aid or assistance under the 

appropriate State plan described in clause (i), supplemental security income benefits under title 

XVI, or a State supplementary payment; 

(V) who are in a medical institution for a period 

of not less than 30 consecutive days (with eligibility by reason of this subclause beginning on the 

first day of such period), who meet the resource 

requirements of the appropriate State plan described in clause (i) or the supplemental security 

income program, and whose income does not exceed a separate income standard established by 

the State which is consistent with the limit established under section 1903(f)(4)(C), 

(VI) who would be eligible under the State plan 

under this title if they were in a medical institution, with respect to whom there has been a determination that but for the provision of home or 

community-based services described in subsection 

(c), (d), or (e) of section 1915 they would require 

the level of care provided in a hospital, nursing facility or intermediate care facility for the mentally 

retarded the cost of which could be reimbursed 

under the State plan, and who will receive home 

or community-based services pursuant to a waiver 


emcdonald on DSK67QTVN1PROD with HEARING
74 

granted by the Secretary under subsection (c), (d), 

or (e) of section 1915, 

(VII) who would be eligible under the State plan 

under this title if they were in a medical institution, who are terminally ill, and who will receive 

hospice care pursuant to a voluntary election described in section 1905(o); 

(VIII) who is a child described in section 

1905(a)(i)— 

(aa) for whom there is in effect an adoption 

assistance agreement (other than an agreement under part E of title IV) between the 

State and an adoptive parent or parents, 

(bb) who the State agency responsible for 

adoption assistance has determined cannot be 

placed with adoptive parents without medical 

assistance because such child has special 

needs for medical or rehabilitative care, and 

(cc) who was eligible for medical assistance 

under the State plan prior to the adoption assistance agreement being entered into, or who 

would have been eligible for medical assistance at such time if the eligibility standards 

and methodologies of the State’s foster care 

program under part E of title IV were applied 

rather than the eligibility standards and 

methodologies of the State’s aid to families 

with dependent children program under part 

A of title IV; 

(IX) who are described in subsection (l)(1) and 

are not described in clause (i)(IV), clause (i)(VI), or 

clause (i)(VII); 

(X) who are described in subsection (m)(1); 

(XI) who receive only an optional State supplementary payment based on need and paid on a 

regular basis, equal to the difference between the 

individual’s countable income and the income 

standard used to determine eligibility for such 

supplementary payment (with countable income 

being the income remaining after deductions as 

established by the State pursuant to standards 

that may be more restrictive than the standards 

for supplementary security income benefits under 

title XVI), which are available to all individuals in 

the State (but which may be based on different income standards by political subdivision according 

to cost of living differences), and which are paid 

by a State that does not have an agreement with 

the Commissioner of Social Security under section 

1616 or 1634; 

(XII) who are described in subsection (z)(1) (relating to certain TB-infected individuals); 

(XIII) who are in families whose income is less 

than 250 percent of the income official poverty 

line (as defined by the Office of Management and 


emcdonald on DSK67QTVN1PROD with HEARING
75 

Budget, and revised annually in accordance with 

section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size 

involved, and who but for earnings in excess of the 

limit established under section 1905(q)(2)(B), 

would be considered to be receiving supplemental 

security income (subject, notwithstanding section 

1916, to payment of premiums or other cost-sharing charges (set on a sliding scale based on income) that the State may determine); 

(XIV) who are optional targeted low-income children described in section 1905(u)(2)(B); 

(XV) who, but for earnings in excess of the limit 

established under section 1905(q)(2)(B), would be 

considered to be receiving supplemental security 

income, who is at least 16, but less than 65, years 

of age, and whose assets, resources, and earned or 

unearned income (or both) do not exceed such limitations (if any) as the State may establish; 

(XVI) who are employed individuals with a 

medically improved disability described in section 

1905(v)(1) and whose assets, resources, and 

earned or unearned income (or both) do not exceed 

such limitations (if any) as the State may establish, but only if the State provides medical assistance to individuals described in subclause (XV); 

(XVII) who are independent foster care adolescents (as defined in section 1905(w)(1)), or who are 

within any reasonable categories of such adolescents specified by the State; 

(XVIII) who are described in subsection (aa) (relating to certain breast or cervical cancer patients); 

(XIX) who are disabled children described in 

subsection (cc)(1); 

(XX) beginning January 1, 2014, who are under 

65 years of age and are not described in or enrolled under a previous subclause of this clause, 

and whose income (as determined under subsection (e)(14)) exceeds 133 percent of the poverty 

line (as defined in section 2110(c)(5)) applicable to 

a family of the size involved but does not exceed 

the highest income eligibility level established 

under the State plan or under a waiver of the 

plan, subject to subsection (hh); 

(XXI) who are described in subsection (ii) (relating to individuals who meet certain income standards); or 

(XXII) who are eligible for home and community-based services under needs-based criteria established under paragraph (1)(A) of section 

1915(i), or who are eligible for home and community-based services under paragraph (6) of such 

section, and who will receive home and commuVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00081 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
76 

nity-based services pursuant to a State plan 

amendment under such subsection; 

(B) that the medical assistance made available to any individual described in subparagraph (A)— 

(i) shall not be less in amount, duration, or scope 

than the medical assistance made available to any 

other such individual, and 

(ii) shall not be less in amount, duration, or scope 

than the medical assistance made available to individuals not described in subparagraph (A); 

(C) that if medical assistance is included for any group 

of individuals described in section 1905(a) who are not described in subparagraph (A) or (E), then— 

(i) the plan must include a description of (I) the criteria for determining eligibility of individuals in the 

group for such medical assistance, (II) the amount, duration, and scope of medical assistance made available 

to individuals in the group, and (III) the single standard to be employed in determining income and resource eligibility for all such groups, and the methodology to be employed in determining such eligibility, 

which shall be no more restrictive than the methodology which would be employed under the supplemental security income program in the case of groups 

consisting of aged, blind, or disabled individuals in a 

State in which such program is in effect, and which 

shall be no more restrictive than the methodology 

which would be employed under the appropriate State 

plan (described in subparagraph (A)(i)) to which such 

group is most closely categorically related in the case 

of other groups; 

(ii) the plan must make available medical assistance— 

(I) to individuals under the age of 18 who (but 

for income and resources) would be eligible for 

medical assistance as an individual described in 

subparagraph (A)(i), and 

(II) to pregnant women, during the course of 

their pregnancy, who (but for income and resources) would be eligible for medical assistance 

as an individual described in subparagraph (A); 

(iii) such medical assistance must include (I) with 

respect to children under 18 and individuals entitled 

to institutional services, ambulatory services, and (II) 

with respect to pregnant women, prenatal care and delivery services; and 

(iv) if such medical assistance includes services in 

institutions for mental diseases or in an intermediate 

care facility for the mentally retarded (or both) for any 

such group, it also must include for all groups covered 

at least the care and services listed in paragraphs (1) 

through (5) and (17) of section 1905(a) or the care and 

services listed in any 7 of the paragraphs numbered 

(1) through (24) of such section; 


emcdonald on DSK67QTVN1PROD with HEARING
77 

(D) for the inclusion of home health services for any individual who, under the State plan, is entitled to nursing 

facility services; 

(E)(i) for making medical assistance available for medicare cost-sharing (as defined in section 1905(p)(3)) for 

qualified medicare beneficiaries described in section 

1905(p)(1); 

(ii) for making medical assistance available for payment 

of medicare cost-sharing described in section 

1905(p)(3)(A)(i) for qualified disabled and working individuals described in section 1905(s); 

(iii) for making medical assistance available for medicare 

cost sharing described in section 1905(p)(3)(A)(ii) subject to 

section 1905(p)(4), for individuals who would be qualified 

medicare beneficiaries described in section 1905(p)(1) but 

for the fact that their income exceeds the income level established by the State under section 1905(p)(2) but is less 

than 110 percent in 1993 and 1994, and 120 percent in 

1995 and years thereafter of the official poverty line (referred to in such section) for a family of the size involved; 

and 

(iv) subject to sections 1933 and 1905(p)(4), for making 

medical assistance available for medicare cost-sharing described in section 1905(p)(3)(A)(ii) for individuals who 

would be qualified medicare beneficiaries described in section 1905(p)(1) but for the fact that their income exceeds 

the income level established by the State under section 

1905(p)(2) and is at least 120 percent, but less than 135 

percent, of the official poverty line (referred to in such section) for a family of the size involved and who are not otherwise eligible for medical assistance under the State plan; 

(F) at the option of a State, for making medical assistance available for COBRA premiums (as defined in subsection (u)(2)) for qualified COBRA continuation beneficiaries described in section 1902(u)(1); and 

(G) that, in applying eligibility criteria of the supplemental security income program under title XVI for purposes of determining eligibility for medical assistance 

under the State plan of an individual who is not receiving 

supplemental security income, the State will disregard the 

provisions of subsections (c) and (e) of section 1613; 

except that (I) the making available of the services described 

in paragraph (4), (14), or (16) of section 1905(a) to individuals 

meeting the age requirements prescribed therein shall not, by 

reason of this paragraph (10), require the making available of 

any such services, or the making available of such services of 

the same amount, duration, and scope, to individuals of any 

other ages, (II) the making available of supplementary medical 

insurance benefits under part B of title XVIII to individuals eligible therefor (either pursuant to an agreement entered into 

under section 1843 or by reason of the payment of premiums 

under such title by the State agency on behalf of such individuals), or provision for meeting part or all of the cost of 

deductibles, cost sharing, or similar charges under part B of 

title XVIII for individuals eligible for benefits under such part, 


emcdonald on DSK67QTVN1PROD with HEARING
78 

shall not, by reason of this paragraph (10), require the making 

available of any such benefits, or the making available of services of the same amount, duration, and scope, to any other individuals, (III) the making available of medical assistance 

equal in amount, duration, and scope to the medical assistance 

made available to individuals described in clause (A) to any 

classification of individuals approved by the Secretary with respect to whom there is being paid, or who are eligible, or would 

be eligible if they were not in a medical institution, to have 

paid with respect to them, a State supplementary payment 

shall not, by reason of this paragraph (10), require the making 

available of any such assistance, or the making available of 

such assistance of the same amount, duration, and scope, to 

any other individuals not described in clause (A), (IV) the imposition of a deductible, cost sharing, or similar charge for any 

item or service furnished to an individual not eligible for the 

exemption under section 1916(a)(2) or (b)(2) shall not require 

the imposition of a deductible, cost sharing, or similar charge 

for the same item or service furnished to an individual who is 

eligible for such exemption, (V) the making available to pregnant women covered under the plan of services relating to 

pregnancy (including prenatal, delivery, and postpartum services) or to any other condition which may complicate pregnancy 

shall not, by reason of this paragraph (10), require the making 

available of such services, or the making available of such services of the same amount, duration, and scope, to any other individuals, provided such services are made available (in the 

same amount, duration, and scope) to all pregnant women covered under the State plan, (VI) with respect to the making 

available of medical assistance for hospice care to terminally ill 

individuals who have made a voluntary election described in 

section 1905(o) to receive hospice care instead of medical assistance for certain other services, such assistance may not be 

made available in an amount, duration, or scope less than that 

provided under title XVIII, and the making available of such 

assistance shall not, by reason of this paragraph (10), require 

the making available of medical assistance for hospice care to 

other individuals or the making available of medical assistance 

for services waived by such terminally ill individuals, (VII) the 

medical assistance made available to an individual described in 

subsection (l)(1)(A) who is eligible for medical assistance only 

because of subparagraph (A)(i)(IV) or (A)(ii)(IX) shall be limited 

to medical assistance for services related to pregnancy (including prenatal, delivery, postpartum, and family planning services) and to other conditions which may complicate pregnancy, 

(VIII) the medical assistance made available to a qualified 

medicare beneficiary described in section 1905(p)(1) who is 

only entitled to medical assistance because the individual is 

such a beneficiary shall be limited to medical assistance for 

medicare cost-sharing (described in section 1905(p)(3)), subject 

to the provisions of subsection (n) and section 1916(b), (IX) the 

making available of respiratory care services in accordance 

with subsection (e)(9) shall not, by reason of this paragraph 

(10), require the making available of such services, or the making available of such services of the same amount, duration, 


emcdonald on DSK67QTVN1PROD with HEARING
79 

and scope, to any individuals not included under subsection 

(e)(9)(A), provided such services are made available (in the 

same amount, duration, and scope) to all individuals described 

in such subsection, (X) if the plan provides for any fixed 

durational limit on medical assistance for inpatient hospital 

services (whether or not such a limit varies by medical condition or diagnosis), the plan must establish exceptions to such 

a limit for medically necessary inpatient hospital services furnished with respect to individuals under one year of age in a 

hospital defined under the State plan, pursuant to section 

1923(a)(1)(A), as a disproportionate share hospital and subparagraph (B) (relating to comparability) shall not be construed as requiring such an exception for other individuals, 

services, or hospitals, (XI) the making available of medical assistance to cover the costs of premiums, deductibles, coinsurance, and other cost-sharing obligations for certain individuals 

for private health coverage as described in section 1906 shall 

not, by reason of paragraph (10), require the making available 

of any such benefits or the making available of services of the 

same amount, duration, and scope of such private coverage to 

any other individuals, (XII) the medical assistance made available to an individual described in subsection (u)(1) who is eligible for medical assistance only because of subparagraph (F) 

shall be limited to medical assistance for COBRA continuation 

premiums (as defined in subsection (u)(2)), (XIII) the medical 

assistance made available to an individual described in subsection (z)(1) who is eligible for medical assistance only because 

of subparagraph (A)(ii)(XII) shall be limited to medical assistance for TB-related services (described in subsection (z)(2)), 

(XIV) the medical assistance made available to an individual 

described in subsection (aa) who is eligible for medical assistance only because of subparagraph (A)(10)(ii)(XVIII) shall be 

limited to medical assistance provided during the period in 

which such an individual requires treatment for breast or cervical cancer (XV) the medical assistance made available to an 

individual described in subparagraph (A)(i)(VIII) shall be limited to medical assistance described in subsection (k)(1), (XVI) 

the medical assistance made available to an individual described in subsection (ii) shall be limited to family planning 

services and supplies described in section 1905(a)(4)(C) including medical diagnosis and treatment services that are provided 

pursuant to a family planning service in a family planning setting and (XVII) if an individual is described in subclause (IX) 

of subparagraph (A)(i) and is also described in subclause (VIII) 

of that subparagraph, the medical assistance shall be made 

available to the individual through subclause (IX) instead of 

through subclause (VIII); 

(11)(A) provide for entering into cooperative arrangements 

with the State agencies responsible for administering or supervising the administration of health services and vocational rehabilitation services in the State looking toward maximum utilization of such services in the provision of medical assistance 

under the plan, (B) provide, to the extent prescribed by the 

Secretary, for entering into agreements, with any agency, institution, or organization receiving payments under (or through 


emcdonald on DSK67QTVN1PROD with HEARING
80 

an allotment under) title V, (i) providing for utilizing such 

agency, institution, or organization in furnishing care and services which are available under such title or allotment and 

which are included in the State plan approved under this section (ii) making such provision as may be appropriate for reimbursing such agency, institution, or organization for the cost of 

any such care and services furnished any individual for which 

payment would otherwise be made to the State with respect to 

the individual under section 1903, and (iii) providing for coordination of information and education on pediatric vaccinations 

and delivery of immunization services, and (C) provide for coordination of the operations under this title, including the provision of information and education on pediatric vaccinations 

and the delivery of immunization services, with the State’s operations under the special supplemental nutrition program for 

women, infants, and children under section 17 of the Child Nutrition Act of 1966; 

(12) provide that, in determining whether an individual is 

blind, there shall be an examination by a physician skilled in 

the diseases of the eye or by an optometrist, whichever the individual may select; 

(13) provide— 

(A) for a public process for determination of rates of payment under the plan for hospital services, nursing facility 

services, and services of intermediate care facilities for the 

mentally retarded under which— 

(i) proposed rates, the methodologies underlying the 

establishment of such rates, and justifications for the 

proposed rates are published, 

(ii) providers, beneficiaries and their representatives, and other concerned State residents are given a 

reasonable opportunity for review and comment on the 

proposed rates, methodologies, and justifications, 

(iii) final rates, the methodologies underlying the establishment of such rates, and justifications for such 

final rates are published, and 

(iv) in the case of hospitals, such rates take into account (in a manner consistent with section 1923) the 

situation of hospitals which serve a disproportionate 

number of low-income patients with special needs; 

(B) for payment for hospice care in amounts no lower 

than the amounts, using the same methodology, used 

under part A of title XVIII and for payment of amounts 

under section 1905(o)(3); except that in the case of hospice 

care which is furnished to an individual who is a resident 

of a nursing facility or intermediate care facility for the 

mentally retarded, and who would be eligible under the 

plan for nursing facility services or services in an intermediate care facility for the mentally retarded if he had 

not elected to receive hospice care, there shall be paid an 

additional amount, to take into account the room and 

board furnished by the facility, equal to at least 95 percent 

of the rate that would have been paid by the State under 

the plan for facility services in that facility for that individual; and 


emcdonald on DSK67QTVN1PROD with HEARING
81 

(C) payment for primary care services (as defined in subsection (jj)) furnished in 2013 and 2014 by a physician 

with a primary specialty designation of family medicine, 

general internal medicine, or pediatric medicine at a rate 

not less than 100 percent of the payment rate that applies 

to such services and physician under part B of title XVIII 

(or, if greater, the payment rate that would be applicable 

under such part if the conversion factor under section 

1848(d) for the year involved were the conversion factor 

under such section for 2009); 

(14) provide that enrollment fees, premiums, or similar 

charges, and deductions, cost sharing, or similar charges, may 

be imposed only as provided in section 1916; 

(15) provide for payment for services described in clause (B) 

or (C) of section 1905(a)(2) under the plan in accordance with 

subsection (bb); 

(16) provide for inclusion, to the extent required by regulations prescribed by the Secretary, of provisions (conforming to 

such regulations) with respect to the furnishing of medical assistance under the plan to individuals who are residents of the 

State but are absent therefrom; 

(17) except as provided in subsections (e)(14), (e)(14), (l)(3), 

(m)(3), and (m)(4), include reasonable standards (which shall 

be comparable for all groups and may, in accordance with 

standards prescribed by the Secretary, differ with respect to income levels, but only in the case of applicants or recipients of 

assistance under the plan who are not receiving aid or assistance under any plan of the State approved under title I, X, 

XIV, or XVI, or part A of title IV, and with respect to whom 

supplemental security income benefits are not being paid 

under title XVI, based on the variations between shelter costs 

in urban areas and in rural areas) for determining eligibility 

for and the extent of medical assistance under the plan which 

(A) are consistent with the objectives of this title, (B) provide 

for taking into account only such income and resources as are, 

as determined in accordance with standards prescribed by the 

Secretary, available to the applicant or recipient and (in the 

case of any applicant or recipient who would, except for income 

and resources, be eligible for aid or assistance in the form of 

money payments under any plan of the State approved under 

title I, X, XIV, or XVI, or part A of title IV, or to have paid 

with respect to him supplemental security income benefits 

under title XVI) as would not be disregarded (or set aside for 

future needs) in determining his eligibility for such aid, assistance, or benefits, (C) provide for reasonable evaluation of any 

such income or resources, and (D) do not take into account the 

financial responsibility of any individual for any applicant or 

recipient of assistance under the plan unless such applicant or 

recipient is such individual’s spouse or such individual’s child 

who is under age 21 or (with respect to States eligible to participate in the State program established under title XVI), is 

blind or permanently and totally disabled, or is blind or disabled as defined in section 1614 (with respect to States which 

are not eligible to participate in such program); and provide for 

flexibility in the application of such standards with respect to 


emcdonald on DSK67QTVN1PROD with HEARING
82 

income by taking into account, except to the extent prescribed 

by the Secretary, the costs (whether in the form of insurance 

premiums, payments made to the State under section 

1903(f)(2)(B), or otherwise and regardless of whether such costs 

are reimbursed under another public program of the State or 

political subdivision thereof) incurred for medical care or for 

any other type of remedial care recognized under State law; 

(18) comply with the provisions of section 1917 with respect 

to liens, adjustments and recoveries of medical assistance correctly paid, transfers of assets, and treatment of certain trusts; 

(19) provide such safeguards as may be necessary to assure 

that eligibility for care and services under the plan will be determined, and such care and services will be provided, in a 

manner consistent with simplicity of administration and the 

best interests of the recipients; 

(20) if the State plan includes medical assistance in behalf 

of individuals 65 years of age or older who are patients in institutions for mental diseases— 

(A) provide for having in effect such agreements or other 

arrangements with State authorities concerned with mental diseases, and, where appropriate, with such institutions, as may be necessary for carrying out the State plan, 

including arrangements for joint planning and for development of alternate methods of care, arrangements providing 

assurance of immediate readmittance to institutions where 

needed for individuals under alternate plans of care, and 

arrangements providing for access to patients and facilities, for furnishing information, and for making reports; 

(B) provide for an individual plan for each such patient 

to assure that the institutional care provided to him is in 

his best interests, including, to that end, assurances that 

there will be initial and periodic review of his medical and 

other needs, that he will be given appropriate medical 

treatment within the institution, and that there will be a 

periodic determination of his need for continued treatment 

in the institution; and 

(C) provide for the development of alternate plans of 

care, making maximum utilization of available resources, 

for recipients 65 years of age or older who would otherwise 

need care in such institutions, including appropriate medical treatment and other aid or assistance; for services referred to in section 3(a)(4)(A)(i) and (ii) or section 

1603(a)(4)(A)(i) and (ii) which are appropriate for such recipients and for such patients; and for methods of administration necessary to assure that the responsibilities of the 

State agency under the State plan with respect to such recipients and such patients will be effectively carried out; 

(21) if the State plan includes medical assistance in behalf 

of individuals 65 years of age or older who are patients in public institutions for mental diseases, show that the State is making satisfactory progress toward developing and implementing 

a comprehensive mental health program, including provision 

for utilization of community mental health centers, nursing facilities, and other alternatives to care in public institutions for 

mental diseases; 


emcdonald on DSK67QTVN1PROD with HEARING
83 

(22) include descriptions of (A) the kinds and numbers of 

professional medical personnel and supporting staff that will 

be used in the administration of the plan and of the responsibilities they will have, (B) the standards, for private or public 

institutions in which recipients of medical assistance under the 

plan may receive care or services, that will be utilized by the 

State authority or authorities responsible for establishing and 

maintaining such standards, (C) the cooperative arrangements 

with State health agencies and State vocational rehabilitation 

agencies entered into with a view to maximum utilization of 

and coordination of the provision of medical assistance with 

the services administered or supervised by such agencies, and 

(D) other standards and methods that the State will use to assure that medical or remedial care and services provided to recipients of medical assistance are of high quality; 

(23) provide that (A) any individual eligible for medical assistance (including drugs) may obtain such assistance from any 

institution, agency, community pharmacy, or person, qualified 

to perform the service or services required (including an organization which provides such services, or arranges for their 

availability, on a prepayment basis), who undertakes to provide him such services, and (B) an enrollment of an individual 

eligible for medical assistance in a primary care case-management system (described in section 1915(b)(1)), a medicaid managed care organization, or a similar entity shall not restrict the 

choice of the qualified person from whom the individual may 

receive services under section 1905(a)(4)(C), except as provided 

in subsection (g) and in section 1915, except that this paragraph shall not apply in the case of Puerto Rico, the Virgin Islands, and Guam, and except that nothing in this paragraph 

shall be construed as requiring a State to provide medical assistance for such services furnished by a person or entity convicted of a felony under Federal or State law for an offense 

which the State agency determines is inconsistent with the 

best interests of beneficiaries under the State plan or by a provider or supplier to which a moratorium under subsection 

(kk)(4) is applied during the period of such moratorium’; 

(24) effective July 1, 1969, provide for consultative services 

by health agencies and other appropriate agencies of the State 

to hospitals, nursing facilities, home health agencies, clinics, 

laboratories, and such other institutions as the Secretary may 

specify in order to assist them (A) to qualify for payments 

under this Act, (B) to establish and maintain such fiscal 

records as may be necessary for the proper and efficient administration of this Act, and (C) to provide information needed 

to determine payments due under this Act on account of care 

and services furnished to individuals; 

(25) provide— 

(A) that the State or local agency administering such 

plan will take all reasonable measures to ascertain the 

legal liability of third parties (including health insurers, 

self-insured plans, group health plans (as defined in section 607(1) of the Employee Retirement Income Security 

Act of 1974), service benefit plans, managed care organizations, pharmacy benefit managers, or other parties that 


emcdonald on DSK67QTVN1PROD with HEARING
84 

are, by statute, contract, or agreement, legally responsible 

for payment of a claim for a health care item or service) 

to pay for care and services available under the plan, including— 

(i) the collection of sufficient information (as specified by the Secretary in regulations) to enable the 

State to pursue claims against such third parties, with 

such information being collected at the time of any determination or redetermination of eligibility for medical assistance, and 

(ii) the submission to the Secretary of a plan (subject to approval by the Secretary) for pursuing claims 

against such third parties, which plan shall be integrated with, and be monitored as a part of the Secretary’s review of, the State’s mechanized claims processing and information retrieval systems required 

under section 1903(r); 

(B) that in any case where such a legal liability is found 

to exist after medical assistance has been made available 

on behalf of the individual and where the amount of reimbursement the State can reasonably expect to recover exceeds the costs of such recovery, the State or local agency 

will seek reimbursement for such assistance to the extent 

of such legal liability; 

(C) that in the case of an individual who is entitled to 

medical assistance under the State plan with respect to a 

service for which a third party is liable for payment, the 

person furnishing the service may not seek to collect from 

the individual (or any financially responsible relative or 

representative of that individual) payment of an amount 

for that service (i) if the total of the amount of the liabilities of third parties for that service is at least equal to the 

amount payable for that service under the plan (disregarding section 1916), or (ii) in an amount which exceeds 

the lesser of (I) the amount which may be collected under 

section 1916, or (II) the amount by which the amount payable for that service under the plan (disregarding section 

1916) exceeds the total of the amount of the liabilities of 

third parties for that service; 

(D) that a person who furnishes services and is participating under the plan may not refuse to furnish services 

to an individual (who is entitled to have payment made 

under the plan for the services the person furnishes) because of a third party’s potential liability for payment for 

the service; 

(E) that in the case of prenatal or preventive pediatric 

care (including early and periodic screening and diagnosis 

services under section 1905(a)(4)(B)) covered under the 

State plan, the State shall— 

(i) make payment for such service in accordance 

with the usual payment schedule under such plan for 

such services without regard to the liability of a third 

party for payment for such services; and 

(ii) seek reimbursement from such third party in accordance with subparagraph (B); 


emcdonald on DSK67QTVN1PROD with HEARING
85 

(F) that in the case of any services covered under such 

plan which are provided to an individual on whose behalf 

child support enforcement is being carried out by the State 

agency under part D of title IV of this Act, the State 

shall— 

(i) make payment for such service in accordance 

with the usual payment schedule under such plan for 

such services without regard to any third-party liability for payment for such services, if such third-party 

liability is derived (through insurance or otherwise) 

from the parent whose obligation to pay support is 

being enforced by such agency, if payment has not 

been made by such third party within 30 days after 

such services are furnished; 

(ii) seek reimbursement from such third party in accordance with subparagraph (B); 

(G) that the State prohibits any health insurer (including a group health plan, as defined in section 607(1) of the 

Employee Retirement Income Security Act of 1974, a selfinsured plan, a service benefit plan, a managed care organization, a pharmacy benefit manager, or other party that 

is, by statute, contract, or agreement, legally responsible 

for payment of a claim for a health care item or service), 

in enrolling an individual or in making any payments for 

benefits to the individual or on the individual’s behalf, 

from taking into account that the individual is eligible for 

or is provided medical assistance under a plan under this 

title for such State, or any other State; 

(H) that to the extent that payment has been made 

under the State plan for medical assistance in any case 

where a third party has a legal liability to make payment 

for such assistance, the State has in effect laws under 

which, to the extent that payment has been made under 

the State plan for medical assistance for health care items 

or services furnished to an individual, the State is considered to have acquired the rights of such individual to payment by any other party for such health care items or 

services; and 

(I) that the State shall provide assurances satisfactory to 

the Secretary that the State has in effect laws requiring 

health insurers, including self-insured plans, group health 

plans (as defined in section 607(1) of the Employee Retirement Income Security Act of 1974), service benefit plans, 

managed care organizations, pharmacy benefit managers, 

or other parties that are, by statute, contract, or agreement, legally responsible for payment of a claim for a 

health care item or service, as a condition of doing business in the State, to— 

(i) provide, with respect to individuals who are eligible (and, at State option, individuals who apply or 

whose eligibility for medical assistance is being evaluated in accordance with section 1902(e)(13)(D)) for, or 

are provided, medical assistance under the State plan 

under this title (and, at State option, child health assistance under title XXI), upon the request of the 


emcdonald on DSK67QTVN1PROD with HEARING
86 

State, information to determine during what period 

the individual or their spouses or their dependents 

may be (or may have been) covered by a health insurer and the nature of the coverage that is or was 

provided by the health insurer (including the name, 

address, and identifying number of the plan) in a manner prescribed by the Secretary; 

(ii) accept the State’s right of recovery and the assignment to the State of any right of an individual or 

other entity to payment from the party for an item or 

service for which payment has been made under the 

State plan; 

(iii) respond to any inquiry by the State regarding a 

claim for payment for any health care item or service 

that is submitted not later than 3 years after the date 

of the provision of such health care item or service; 

and 

(iv) agree not to deny a claim submitted by the State 

solely on the basis of the date of submission of the 

claim, the type or format of the claim form, or a failure to present proper documentation at the point-ofsale that is the basis of the claim, if— 

(I) the claim is submitted by the State within 

the 3-year period beginning on the date on which 

the item or service was furnished; and 

(II) any action by the State to enforce its rights 

with respect to such claim is commenced within 6 

years of the State’s submission of such claim; 

(26) if the State plan includes medical assistance for inpatient mental hospital services, provide, with respect to each patient receiving such services, for a regular program of medical 

review (including medical evaluation) of his need for such services, and for a written plan of care; 

(27) provide for agreements with every person or institution 

providing services under the State plan under which such person or institution agrees (A) to keep such records as are necessary fully to disclose the extent of the services provided to 

individuals receiving assistance under the State plan, and (B) 

to furnish the State agency or the Secretary with such information, regarding any payments claimed by such person or institution for providing services under the State plan, as the 

State agency or the Secretary may from time to time request; 

(28) provide— 

(A) that any nursing facility receiving payments under 

such plan must satisfy all the requirements of subsections 

(b) through (d) of section 1919 as they apply to such facilities; 

(B) for including in ‘‘nursing facility services’’ at least 

the items and services specified (or deemed to be specified) 

by the Secretary under section 1919(f)(7) and making 

available upon request a description of the items and services so included; 

(C) for procedures to make available to the public the 

data and methodology used in establishing payment rates 

for nursing facilities under this title; and 


emcdonald on DSK67QTVN1PROD with HEARING
87 

(D) for compliance (by the date specified in the respective sections) with the requirements of— 

(i) section 1919(e); 

(ii) section 1919(g) (relating to responsibility for survey and certification of nursing facilities); and 

(iii) sections 1919(h)(2)(B) and 1919(h)(2)(D) (relating to establishment and application of remedies); 

(29) include a State program which meets the requirements 

set forth in section 1908, for the licensing of administrators of 

nursing homes; 

(30)(A) provide such methods and procedures relating to the 

utilization of, and the payment for, care and services available 

under the plan (including but not limited to utilization review 

plans as provided for in section 1903(i)(4)) as may be necessary 

to safeguard against unnecessary utilization of such care and 

services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist 

enough providers so that care and services are available under 

the plan at least to the extent that such care and services are 

available to the general population in the geographic area; and 

(B) provide, under the program described in subparagraph 

(A), that— 

(i) each admission to a hospital, intermediate care facility for the mentally retarded, or hospital for mental diseases is reviewed or screened in accordance with criteria 

established by medical and other professional personnel 

who are not themselves directly responsible for the care of 

the patient involved, and who do not have a significant financial interest in any such institution and are not, except 

in the case of a hospital, employed by the institution providing the care involved, and 

(ii) the information developed from such review or 

screening, along with the data obtained from prior reviews 

of the necessity for admission and continued stay of patients by such professional personnel, shall be used as the 

basis for establishing the size and composition of the sample of admissions to be subject to review and evaluation by 

such personnel, and any such sample may be of any size 

up to 100 percent of all admissions and must be of sufficient size to serve the purpose of (I) identifying the patterns of care being provided and the changes occurring 

over time in such patterns so that the need for modification may be ascertained, and (II) subjecting admissions to 

early or more extensive review where information indicates that such consideration is warranted to a hospital, 

intermediate care facility for the mentally retarded, or hospital for mental diseases; 

(31) with respect to services in an intermediate care facility 

for the mentally retarded (where the State plan includes medical assistance for such services) provide, with respect to each 

patient receiving such services, for a written plan of care, prior 

to admission to or authorization of benefits in such facility, in 

accordance with regulations of the Secretary, and for a regular 

program of independent professional review (including medical 


emcdonald on DSK67QTVN1PROD with HEARING
88 

evaluation) which shall periodically review his need for such 

services; 

(32) provide that no payment under the plan for any care or 

service provided to an individual shall be made to anyone other 

than such individual or the person or institution providing 

such care or service, under an assignment or power of attorney 

or otherwise; except that— 

(A) in the case of any care or service provided by a physician, dentist, or other individual practitioner, such payment may be made (i) to the employer of such physician, 

dentist, or other practitioner if such physician, dentist, or 

practitioner is required as a condition of his employment 

to turn over his fee for such care or service to his employer, or (ii) (where the care or service was provided in 

a hospital, clinic, or other facility) to the facility in which 

the care or service was provided if there is a contractual 

arrangement between such physician, dentist, or practitioner and such facility under which such facility submits 

the bill for such care or service; 

(B) nothing in this paragraph shall be construed (i) to 

prevent the making of such a payment in accordance with 

an assignment from the person or institution providing the 

care or service involved if such assignment is made to a 

governmental agency or entity or is established by or pursuant to the order of a court of competent jurisdiction, or 

(ii) to preclude an agent of such person or institution from 

receiving any such payment if (but only if) such agent does 

so pursuant to an agency agreement under which the compensation to be paid to the agent for his services for or in 

connection with the billing or collection of payments due 

such person or institution under the plan is unrelated (directly or indirectly) to the amount of such payments or the 

billings therefor, and is not dependent upon the actual collection of any such payment; 

(C) in the case of services furnished (during a period 

that does not exceed 14 continuous days in the case of an 

informal reciprocal arrangement or 90 continuous days (or 

such longer period as the Secretary may provide) in the 

case of an arrangement involving per diem or other fee-fortime compensation) by, or incident to the services of, one 

physician to the patients of another physician who submits 

the claim for such services, payment shall be made to the 

physician submitting the claim (as if the services were furnished by, or incident to, the physician’s services), but only 

if the claim identifies (in a manner specified by the Secretary) the physician who furnished the services; and 

(D) in the case of payment for a childhood vaccine administered before October 1, 1994, to individuals entitled 

to medical assistance under the State plan, the State plan 

may make payment directly to the manufacturer of the 

vaccine under a voluntary replacement program agreed to 

by the State pursuant to which the manufacturer (i) supplies doses of the vaccine to providers administering the 

vaccine, (ii) periodically replaces the supply of the vaccine, 

and (iii) charges the State the manufacturer’s price to the 


emcdonald on DSK67QTVN1PROD with HEARING
89 

Centers for Disease Control and Prevention for the vaccine 

so administered (which price includes a reasonable amount 

to cover shipping and the handling of returns); 

(33) provide— 

(A) that the State health agency, or other appropriate 

State medical agency, shall be responsible for establishing 

a plan, consistent with regulations prescribed by the Secretary, for the review by appropriate professional health 

personnel of the appropriateness and quality of care and 

services furnished to recipients of medical assistance 

under the plan in order to provide guidance with respect 

thereto in the administration of the plan to the State agency established or designated pursuant to paragraph (5) 

and, where applicable, to the State agency described in the 

second sentence of this subsection; and 

(B) that, except as provided in section 1919(g), the State 

or local agency utilized by the Secretary for the purpose 

specified in the first sentence of section 1864(a), or, if such 

agency is not the State agency which is responsible for licensing health institutions, the State agency responsible 

for such licensing, will perform for the State agency administering or supervising the administration of the plan 

approved under this title the function of determining 

whether institutions and agencies meet the requirements 

for participation in the program under such plan, except 

that, if the Secretary has cause to question the adequacy 

of such determinations, the Secretary is authorized to validate State determinations and, on that basis, make independent and binding determinations concerning the extent 

to which individual institutions and agencies meet the requirements for participation; 

(34) provide that in the case of any individual who has been 

determined to be eligible for medical assistance under the plan, 

such assistance will be made available to him for care and 

services included under the plan and furnished in or after the 

third month before the month in which he made application (or 

application was made on his behalf in the case of a deceased 

individual) for such assistance if such individual was (or upon 

application would have been) eligible for such assistance at the 

time such care and services were furnished; 

(35) provide that any disclosing entity (as defined in section 

1124(a)(2)) receiving payments under such plan complies with 

the requirements of section 1124; 

(36) provide that within 90 days following the completion of 

each survey of any health care facility, laboratory, agency, clinic, or organization, by the appropriate State agency described 

in paragraph (9), such agency shall (in accordance with regulations of the Secretary) make public in readily available form 

and place the pertinent findings of each such survey relating 

to the compliance of each such health care facility, laboratory, 

clinic, agency, or organization with (A) the statutory conditions 

of participation imposed under this title, and (B) the major additional conditions which the Secretary finds necessary in the 

interest of health and safety of individuals who are furnished 


emcdonald on DSK67QTVN1PROD with HEARING
90 

care or services by any such facility, laboratory, clinic, agency, 

or organization; 

(37) provide for claims payment procedures which (A) ensure 

that 90 per centum of claims for payment (for which no further 

written information or substantiation is required in order to 

make payment) made for services covered under the plan and 

furnished by health care practitioners through individual or 

group practices or through shared health facilities are paid 

within 30 days of the date of receipt of such claims and that 

99 per centum of such claims are paid within 90 days of the 

date of receipt of such claims, and (B) provide for procedures 

of prepayment and postpayment claims review, including review of appropriate data with respect to the recipient and provider of a service and the nature of the service for which payment is claimed, to ensure the proper and efficient payment of 

claims and management of the program; 

(38) require that an entity (other than an individual practitioner or a group of practitioners) that furnishes, or arranges 

for the furnishing of, items or services under the plan, shall 

supply (within such period as may be specified in regulations 

by the Secretary or by the single State agency which administers or supervises the administration of the plan) upon request specifically addressed to such entity by the Secretary or 

such State agency, the information described in section 

1128(b)(9); 

(39) provide that the State agency shall exclude any specified 

individual or entity from participation in the program under 

the State plan for the period specified by the Secretary, when 

required by him to do so pursuant to section 1128 or section 

1128A, terminate the participation of any individual or entity 

in such program if (subject to such exceptions as are permitted 

with respect to exclusion under sections 1128(c)(3)(B) and 

1128(d)(3)(B)) participation of such individual or entity is terminated under title XVIII or any other State plan under this 

title, and provide that no payment may be made under the 

plan with respect to any item or service furnished by such individual or entity during such period; 

(40) require each health services facility or organization 

which receives payments under the plan and of a type for 

which a uniform reporting system has been established under 

section 1121(a) to make reports to the Secretary of information 

described in such section in accordance with the uniform reporting system (established under such section) for that type of 

facility or organization; 

(41) provide that whenever a provider of services or any 

other person is terminated, suspended, or otherwise sanctioned 

or prohibited from participating under the State plan, the 

State agency shall promptly notify the Secretary and, in the 

case of a physician and notwithstanding paragraph (7), the 

State medical licensing board of such action; 

(42) provide that— 

(A) the records of any entity participating in the plan 

and providing services reimbursable on a cost-related basis 

will be audited as the Secretary determines to be necVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00096 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
91 

essary to insure that proper payments are made under the 

plan; and 

(B) not later than December 31, 2010, the State shall— 

(i) establish a program under which the State contracts (consistent with State law and in the same 

manner as the Secretary enters into contracts with recovery audit contractors under section 1893(h), subject 

to such exceptions or requirements as the Secretary 

may require for purposes of this title or a particular 

State) with 1 or more recovery audit contractors for 

the purpose of identifying underpayments and overpayments and recouping overpayments under the 

State plan and under any waiver of the State plan 

with respect to all services for which payment is made 

to any entity under such plan or waiver; and 

(ii) provide assurances satisfactory to the Secretary 

that— 

(I) under such contracts, payment shall be made 

to such a contractor only from amounts recovered; 

(II) from such amounts recovered, payment— 

(aa) shall be made on a contingent basis for 

collecting overpayments; and 

(bb) may be made in such amounts as the 

State may specify for identifying underpayments; 

(III) the State has an adequate process for entities to appeal any adverse determination made by 

such contractors; and 

(IV) such program is carried out in accordance 

with such requirements as the Secretary shall 

specify, including— 

(aa) for purposes of section 1903(a)(7), that 

amounts expended by the State to carry out 

the program shall be considered amounts expended as necessary for the proper and efficient administration of the State plan or a 

waiver of the plan; 

(bb) that section 1903(d) shall apply to 

amounts recovered under the program; and 

(cc) that the State and any such contractors 

under contract with the State shall coordinate 

such recovery audit efforts with other contractors or entities performing audits of entities 

receiving payments under the State plan or 

waiver in the State, including efforts with 

Federal and State law enforcement with respect to the Department of Justice, including 

the Federal Bureau of Investigations, the Inspector General of the Department of Health 

and Human Services, and the State medicaid 

fraud control unit; and 

(43) provide for— 

(A) informing all persons in the State who are under the 

age of 21 and who have been determined to be eligible for 

medical assistance including services described in section 


emcdonald on DSK67QTVN1PROD with HEARING
92 

1905(a)(4)(B), of the availability of early and periodic 

screening, diagnostic, and treatment services as described 

in section 1905(r) and the need for age-appropriate immunizations against vaccine-preventable diseases, 

(B) providing or arranging for the provision of such 

screening services in all cases where they are requested, 

(C) arranging for (directly or through referral to appropriate agencies, organizations, or individuals) corrective 

treatment the need for which is disclosed by such child 

health screening services, and 

(D) reporting to the Secretary (in a uniform form and 

manner established by the Secretary, by age group and by 

basis of eligibility for medical assistance, and by not later 

than April 1 after the end of each fiscal year, beginning 

with fiscal year 1990) the following information relating to 

early and periodic screening, diagnostic, and treatment 

services provided under the plan during each fiscal year: 

(i) the number of children provided child health 

screening services, 

(ii) the number of children referred for corrective 

treatment (the need for which is disclosed by such 

child health screening services), 

(iii) the number of children receiving dental services, 

and other information relating to the provision of dental services to such children described in section 

2108(e) and 

(iv) the State’s results in attaining the participation 

goals set for the State under section 1905(r); 

(44) in each case for which payment for inpatient hospital 

services, services in an intermediate care facility for the mentally retarded, or inpatient mental hospital services is made 

under the State plan— 

(A) a physician (or, in the case of skilled nursing facility 

services or intermediate care facility services, a physician, 

or a nurse practitioner or clinical nurse specialist who is 

not an employee of the facility but is working in collaboration with a physician) certifies at the time of admission, or, 

if later, the time the individual applies for medical assistance under the State plan (and a physician, a physician 

assistant under the supervision of a physician, or, in the 

case of skilled nursing facility services or intermediate 

care facility services, a physician, or a nurse practitioner 

or clinical nurse specialist who is not an employee of the 

facility but is working in collaboration with a physician, 

recertifies, where such services are furnished over a period 

of time, in such cases, at least as often as required under 

section 1903(g)(6) (or, in the case of services that are services provided in an intermediate care facility for the mentally retarded, every year), and accompanied by such supporting material, appropriate to the case involved, as may 

be provided in regulations of the Secretary), that such 

services are or were required to be given on an inpatient 

basis because the individual needs or needed such services, 

and 


emcdonald on DSK67QTVN1PROD with HEARING
93 

(B) such services were furnished under a plan established and periodically reviewed and evaluated by a physician, or, in the case of skilled nursing facility services or 

intermediate care facility services, a physician, or a nurse 

practitioner or clinical nurse specialist who is not an employee of the facility but is working in collaboration with 

a physician; 

(45) provide for mandatory assignment of rights of payment 

for medical support and other medical care owed to recipients, 

in accordance with section 1912; 

(46)(A) provide that information is requested and exchanged 

for purposes of income and eligibility verification in accordance 

with a State system which meets the requirements of section 

1137 of this Act; and 

(B) provide, with respect to an individual declaring to be a 

citizen or national of the United States for purposes of establishing eligibility under this title, that the State shall satisfy 

the requirements of— 

(i) section 1903(x); or 

(ii) subsection (ee); 

(47) provide— 

(A) at the option of the State, for making ambulatory 

prenatal care available to pregnant women during a presumptive eligibility period in accordance with section 1920 

and provide for making medical assistance for items and 

services described in subsection (a) of section 1920A available to children during a presumptive eligibility period in 

accordance with such section and provide for making medical assistance available to individuals described in subsection (a) of section 1920B during a presumptive eligibility period in accordance with such section and provide 

for making medical assistance available to individuals described in subsection (a) of section 1920C during a presumptive eligibility period in accordance with such section; 

and 

(B) that any hospital that is a participating provider 

under the State plan may elect to be a qualified entity for 

purposes of determining, on the basis of preliminary information, whether any individual is eligible for medical assistance under the State plan or under a waiver of the 

plan for purposes of providing the individual with medical 

assistance during a presumptive eligibility period, in the 

same manner, and subject to the same requirements, as 

apply to the State options with respect to populations described in section 1920, 1920A, 1920B, or 1920C (but without regard to whether the State has elected to provide for 

a presumptive eligibility period under any such sections), 

subject to such guidance as the Secretary shall establish; 

(48) provide a method of making cards evidencing eligibility 

for medical assistance available to an eligible individual who 

does not reside in a permanent dwelling or does not have a 

fixed home or mailing address; 

(49) provide that the State will provide information and access to certain information respecting sanctions taken against 


emcdonald on DSK67QTVN1PROD with HEARING
94 

health care practitioners and providers by State licensing authorities in accordance with section 1921; 

(50) provide, in accordance with subsection (q), for a monthly 

personal needs allowance for certain institutionalized individuals and couples; 

(51) meet the requirements of section 1924 (relating to protection of community spouses); 

(52) meet the requirements of section 1925 (relating to extension of eligibility for medical assistance); 

(53) provide— 

(A) for notifying in a timely manner all individuals in 

the State who are determined to be eligible for medical assistance and who are pregnant women, breastfeeding or 

postpartum women (as defined in section 17 of the Child 

Nutrition Act of 1966), or children below the age of 5, of 

the availability of benefits furnished by the special supplemental nutrition program under such section, and 

(B) for referring any such individual to the State agency 

responsible for administering such program; 

(54) in the case of a State plan that provides medical assistance for covered outpatient drugs (as defined in section 

1927(k)), comply with the applicable requirements of section 

1927; 

(55) provide for receipt and initial processing of applications 

of individuals for medical assistance under subsection 

(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 

(a)(10)(A)(ii)(IX)— 

(A) at locations which are other than those used for the 

receipt and processing of applications for aid under part A 

of title IV and which include facilities defined as disproportionate share hospitals under section 1923(a)(1)(A) and 

Federally-qualified health centers described in section 

1905(1)(2)(B), and 

(B) using applications which are other than those used 

for applications for aid under such part; 

(56) provide, in accordance with subsection (s), for adjusted 

payments for certain inpatient hospital services; 

(57) provide that each hospital, nursing facility, provider of 

home health care or personal care services, hospice program, 

or medicaid managed care organization (as defined in section 

1903(m)(1)(A)) receiving funds under the plan shall comply 

with the requirements of subsection (w); 

(58) provide that the State, acting through a State agency, 

association, or other private nonprofit entity, develop a written 

description of the law of the State (whether statutory or as recognized by the courts of the State) concerning advance directives that would be distributed by providers or organizations 

under the requirements of subsection (w); 

(59) maintain a list (updated not less often than monthly, 

and containing each physician’s unique identifier provided 

under the system established under subsection (x)) of all physicians who are certified to participate under the State plan; 

(60) provide that the State agency shall provide assurances 

satisfactory to the Secretary that the State has in effect the 


emcdonald on DSK67QTVN1PROD with HEARING
95 

laws relating to medical child support required under section 

1908A; 

(61) provide that the State must demonstrate that it operates a medicaid fraud and abuse control unit described in section 1903(q) that effectively carries out the functions and requirements described in such section, as determined in accordance with standards established by the Secretary, unless the 

State demonstrates to the satisfaction of the Secretary that the 

effective operation of such a unit in the State would not be 

cost-effective because minimal fraud exists in connection with 

the provision of covered services to eligible individuals under 

the State plan, and that beneficiaries under the plan will be 

protected from abuse and neglect in connection with the provision of medical assistance under the plan without the existence 

of such a unit; 

(62) provide for a program for the distribution of pediatric 

vaccines to program-registered providers for the immunization 

of vaccine-eligible children in accordance with section 1928; 

(63) provide for administration and determinations of eligibility with respect to individuals who are (or seek to be) eligible for medical assistance based on the application of section 

1931; 

(64) provide, not later than 1 year after the date of the enactment of this paragraph, a mechanism to receive reports 

from beneficiaries and others and compile data concerning alleged instances of waste, fraud, and abuse relating to the operation of this title; 

(65) provide that the State shall issue provider numbers for 

all suppliers of medical assistance consisting of durable medical equipment, as defined in section 1861(n), and the State 

shall not issue or renew such a supplier number for any such 

supplier unless— 

(A)(i) full and complete information as to the identity of 

each person with an ownership or control interest (as defined in section 1124(a)(3)) in the supplier or in any subcontractor (as defined by the Secretary in regulations) in 

which the supplier directly or indirectly has a 5 percent or 

more ownership interest; and 

(ii) to the extent determined to be feasible under regulations of the Secretary, the name of any disclosing entity 

(as defined in section 1124(a)(2)) with respect to which a 

person with such an ownership or control interest in the 

supplier is a person with such an ownership or control interest in the disclosing entity; and 

(B) a surety bond in a form specified by the Secretary 

under section 1834(a)(16)(B) and in an amount that is not 

less than $50,000 or such comparable surety bond as the 

Secretary may permit under the second sentence of such 

section; 

(66) provide for making eligibility determinations under section 1935(a); 

(67) provide, with respect to services covered under the State 

plan (but not under title XVIII) that are furnished to a PACE 

program eligible individual enrolled with a PACE provider by 

a provider participating under the State plan that does not 


emcdonald on DSK67QTVN1PROD with HEARING
96 

have a contract or other agreement with the PACE provider 

that establishes payment amounts for such services, that such 

participating provider may not require the PACE provider to 

pay the participating provider an amount greater than the 

amount that would otherwise be payable for the service to the 

participating provider under the State plan for the State where 

the PACE provider is located (in accordance with regulations 

issued by the Secretary); 

(68) provide that any entity that receives or makes annual 

payments under the State plan of at least $5,000,000, as a condition of receiving such payments, shall— 

(A) establish written policies for all employees of the entity (including management), and of any contractor or 

agent of the entity, that provide detailed information about 

the False Claims Act established under sections 3729 

through 3733 of title 31, United States Code, administrative remedies for false claims and statements established 

under chapter 38 of title 31, United States Code, any State 

laws pertaining to civil or criminal penalties for false 

claims and statements, and whistleblower protections 

under such laws, with respect to the role of such laws in 

preventing and detecting fraud, waste, and abuse in Federal health care programs (as defined in section 1128B(f)); 

(B) include as part of such written policies, detailed provisions regarding the entity’s policies and procedures for 

detecting and preventing fraud, waste, and abuse; and 

(C) include in any employee handbook for the entity, a 

specific discussion of the laws described in subparagraph 

(A), the rights of employees to be protected as whistleblowers, and the entity’s policies and procedures for detecting and preventing fraud, waste, and abuse; 

(69) provide that the State must comply with any requirements determined by the Secretary to be necessary for carrying 

out the Medicaid Integrity Program established under section 

1936; 

(70) at the option of the State and notwithstanding paragraphs (1), (10)(B), and (23), provide for the establishment of 

a non-emergency medical transportation brokerage program in 

order to more cost-effectively provide transportation for individuals eligible for medical assistance under the State plan 

who need access to medical care or services and have no other 

means of transportation which— 

(A) may include a wheelchair van, taxi, stretcher car, 

bus passes and tickets, secured transportation, and such 

other transportation as the Secretary determines appropriate; and 

(B) may be conducted under contract with a broker 

who— 

(i) is selected through a competitive bidding process 

based on the State’s evaluation of the broker’s experience, performance, references, resources, qualifications, and costs; 

(ii) has oversight procedures to monitor beneficiary 

access and complaints and ensure that transport perVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00102 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
97 

sonnel are licensed, qualified, competent, and courteous; 

(iii) is subject to regular auditing and oversight by 

the State in order to ensure the quality of the transportation services provided and the adequacy of beneficiary access to medical care and services; and 

(iv) complies with such requirements related to prohibitions on referrals and conflict of interest as the 

Secretary shall establish (based on the prohibitions on 

physician referrals under section 1877 and such other 

prohibitions and requirements as the Secretary determines to be appropriate); 

(71) provide that the State will implement an asset 

verification program as required under section 1940; 

(72) provide that the State will not prevent a Federallyqualified health center from entering into contractual relationships with private practice dental providers in the provision of 

Federally-qualified health center services; 

(73) in the case of any State in which 1 or more Indian 

Health Programs or Urban Indian Organizations furnishes 

health care services, provide for a process under which the 

State seeks advice on a regular, ongoing basis from designees 

of such Indian Health Programs and Urban Indian Organizations on matters relating to the application of this title that 

are likely to have a direct effect on such Indian Health Programs and Urban Indian Organizations and that— 

(A) shall include solicitation of advice prior to submission of any plan amendments, waiver requests, and proposals for demonstration projects likely to have a direct effect on Indians, Indian Health Programs, or Urban Indian 

Organizations; and 

(B) may include appointment of an advisory committee 

and of a designee of such Indian Health Programs and 

Urban Indian Organizations to the medical care advisory 

committee advising the State on its State plan under this 

title; 

(74) provide for maintenance of effort under the State plan 

or under any waiver of the plan in accordance with subsection 

(gg); and 

(75) provide that, beginning January 2015, and annually 

thereafter, the State shall submit a report to the Secretary 

that contains— 

(A) the total number of enrolled and newly enrolled individuals in the State plan or under a waiver of the plan for 

the fiscal year ending on September 30 of the preceding 

calendar year, disaggregated by population, including children, parents, nonpregnant childless adults, disabled individuals, elderly individuals, and such other categories or 

sub-categories of individuals eligible for medical assistance 

under the State plan or under a waiver of the plan as the 

Secretary may require; 

(B) a description, which may be specified by population, 

of the outreach and enrollment processes used by the State 

during such fiscal year; and 


emcdonald on DSK67QTVN1PROD with HEARING
98 

(C) any other data reporting determined necessary by 

the Secretary to monitor enrollment and retention of individuals eligible for medical assistance under the State plan 

or under a waiver of the plan; 

(76) provide that any data collected under the State plan 

meets the requirements of section 3101 of the Public Health 

Service Act; 

(77) provide that the State shall comply with provider and 

supplier screening, oversight, and reporting requirements in 

accordance with subsection (kk); 

(79) provide that any agent, clearinghouse, or other alternate 

payee (as defined by the Secretary) that submits claims on behalf of a health care provider must register with the State and 

the Secretary in a form and manner specified by the Secretary; 

(80) provide that the State shall not provide any payments 

for items or services provided under the State plan or under 

a waiver to any financial institution or entity located outside 

of the United States; and 

(81) provide for implementation of the payment models specified by the Secretary under section 1115A(c) for implementation on a nationwide basis unless the State demonstrates to 

the satisfaction of the Secretary that implementation would 

not be administratively feasible or appropriate to the health 

care delivery system of the State. 

Notwithstanding paragraph (5), if on January 1, 1965, and on the 

date on which a State submits its plan for approval under this 

title, the State agency which administered or supervised the administration of the plan of such State approved under title X (or 

title XVI, insofar as it relates to the blind) was different from the 

State agency which administered or supervised the administration 

of the State plan approved under title I (or title XVI, insofar as it 

relates to the aged), the State agency which administered or supervised the administration of such plan approved under title X (or 

title XVI, insofar as it relates to the blind) may be designated to 

administer or supervise the administration of the portion of the 

State plan for medical assistance which relates to blind individuals 

and a different State agency may be established or designated to 

administer or supervise the administration of the rest of the State 

plan for medical assistance; and in such case the part of the plan 

which each such agency administers, or the administration of 

which each such agency supervises, shall be regarded as a separate 

plan for purposes of this title (except for purposes of paragraph 

(10)). The provisions of paragraphs (9)(A), (31), and (33) and of section 1903(i)(4) shall not apply to a religious nonmedical health care 

institution (as defined in section 1861(ss)(1)). 

For purposes of paragraph (10) any individual who, for the 

month of August 1972, was eligible for or receiving aid or assistance under a State plan approved under title I, X, XIV, or XVI, or 

part A of title IV and who for such month was entitled to monthly 

insurance benefits under title II shall for purposes of this title only 

be deemed to be eligible for financial aid or assistance for any 

month thereafter if such individual would have been eligible for financial aid or assistance for such month had the increase in 

monthly insurance benefits under title II resulting from enactment 

of Public Law 92-336 not been applicable to such individual. 


emcdonald on DSK67QTVN1PROD with HEARING
99 

The requirement of clause (A) of paragraph (37) with respect to 

a State plan may be waived by the Secretary if he finds that the 

State has exercised good faith in trying to meet such requirement. 

For purposes of this title, any child who meets the requirements of 

paragraph (1) or (2) of section 473(b) shall be deemed to be a dependent child as defined in section 406 and shall be deemed to be 

a recipient of aid to families with dependent children under part 

A of title IV in the State where such child resides. Notwithstanding 

paragraph (10)(B) or any other provision of this subsection, a State 

plan shall provide medical assistance with respect to an alien who 

is not lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law only in 

accordance with section 1903(v). 

(b) The Secretary shall approve any plan which fulfills the conditions specified in subsection (a) of this section, except that he shall 

not approve any plan which imposes, as a condition of eligibility for 

medical assistance under the plan— 

(1) an age requirement of more than 65 years; or 

(2) any residence requirement which excludes any individual 

who resides in the State, regardless of whether or not the residence is maintained permanently or at a fixed address; or 

(3) any citizenship requirement which excludes any citizen of 

the United States. 

(c) Notwithstanding subsection (b), the Secretary shall not approve any State plan for medical assistance if the State requires individuals described in subsection (l)(1) to apply for assistance under 

the State program funded under part A of title IV as a condition 

of applying for or receiving medical assistance under this title. 

(d) If a State contracts with an entity which meets the requirements of section 1152, as determined by the Secretary, or a utilization and quality control peer review organization having a contract 

with the Secretary under part B of title XI for the performance of 

medical or utilization review functions (including quality review 

functions described in subsection (a)(30)(C)) required under this 

title of a State plan with respect to specific services or providers 

(or services or providers in a geographic area of the State), such requirements shall be deemed to be met for those services or providers (or services or providers in that area) by delegation to such 

an entity or organization under the contract of the State’s authority 

to conduct such review activities if the contract provides for the 

performance of activities not inconsistent with part B of title XI 

and provides for such assurances of satisfactory performance by 

such an entity or organization as the Secretary may prescribe. 

(e)(1) Beginning April 1, 1990, for provisions relating to the extension of eligibility for medical assistance for certain families who 

have received aid pursuant to a State plan approved under part A 

of title IV and have earned income, see section 1925. 

(2)(A) In the case of an individual who is enrolled with a medicaid managed care organization (as defined in section 

1903(m)(1)(A)), with a primary care case manager (as defined in 

section 1905(t)), or with an eligible organization with a contract 

under section 1876 and who would (but for this paragraph) lose eligibility for benefits under this title before the end of the minimum 

enrollment period (defined in subparagraph (B)), the State plan 

may provide, notwithstanding any other provision of this title, that 


emcdonald on DSK67QTVN1PROD with HEARING
100 

the individual shall be deemed to continue to be eligible for such 

benefits until the end of such minimum period, but, except for benefits furnished under section 1905(a)(4)(C), only with respect to 

such benefits provided to the individual as an enrollee of such organization or entity or by or through the case manager. 

(B) For purposes of subparagraph (A), the term ‘‘minimum enrollment period’’ means, with respect to an individual’s enrollment 

with an organization or entity under a State plan, a period, established by the State, of not more than six months beginning on the 

date the individual’s enrollment with the organization or entity becomes effective. 

(3) At the option of the State, any individual who— 

(A) is 18 years of age or younger and qualifies as a disabled 

individual under section 1614(a); 

(B) with respect to whom there has been a determination by 

the State that— 

(i) the individual requires a level of care provided in a 

hospital, nursing facility, or intermediate care facility for 

the mentally retarded, 

(ii) it is appropriate to provide such care for the individual outside such an institution, and 

(iii) the estimated amount which would be expended for 

medical assistance for the individual for such care outside 

an institution is not greater than the estimated amount 

which would otherwise be expended for medical assistance 

for the individual within an appropriate institution; and 

(C) if the individual were in a medical institution, would be 

eligible for medical assistance under the State plan under this 

title, 

shall be deemed, for purposes of this title only, to be an individual with respect to whom a supplemental security income 

payment, or State supplemental payment, respectively, is being 

paid under title XVI. 

(4) A child born to a woman eligible for and receiving medical assistance under a State plan on the date of the child’s birth shall 

be deemed to have applied for medical assistance and to have been 

found eligible for such assistance under such plan on the date of 

such birth and to remain eligible for such assistance for a period 

of one year. During the period in which a child is deemed under 

the preceding sentence to be eligible for medical assistance, the 

medical assistance eligibility identification number of the mother 

shall also serve as the identification number of the child, and all 

claims shall be submitted and paid under such number (unless the 

State issues a separate identification number for the child before 

such period expires). Notwithstanding the preceding sentence, in 

the case of a child who is born in the United States to an alien 

mother for whom medical assistance for the delivery of the child is 

made available pursuant to section 1903(v), the State immediately 

shall issue a separate identification number for the child upon notification by the facility at which such delivery occurred of the child’s 

birth. 

(5) A woman who, while pregnant, is eligible for, has applied for, 

and has received medical assistance under the State plan, shall 

continue to be eligible under the plan, as though she were pregnant, for all pregnancy-related and postpartum medical assistance 


emcdonald on DSK67QTVN1PROD with HEARING
101 

under the plan, through the end of the month in which the 60-day 

period (beginning on the last day of her pregnancy) ends. 

(6) In the case of a pregnant woman described in subsection 

(a)(10) who, because of a change in income of the family of which 

she is a member, would not otherwise continue to be described in 

such subsection, the woman shall be deemed to continue to be an 

individual described in subsection (a)(10)(A)(i)(IV) and subsection 

(l)(1)(A) without regard to such change of income through the end 

of the month in which the 60-day period (beginning on the last day 

of her pregnancy) ends. The preceding sentence shall not apply in 

the case of a woman who has been provided ambulatory prenatal 

care pursuant to section 1920 during a presumptive eligibility period and is then, in accordance with such section, determined to be 

ineligible for medical assistance under the State plan. 

(7) In the case of an infant or child described in subparagraph 

(B), (C), or (D) of subsection (l)(1) or paragraph (2) of section 

1905(n)— 

(A) who is receiving inpatient services for which medical assistance is provided on the date the infant or child attains the 

maximum age with respect to which coverage is provided 

under the State plan for such individuals, and 

(B) who, but for attaining such age, would remain eligible for 

medical assistance under such subsection, 

the infant or child shall continue to be treated as an individual described in such respective provision until the end of the stay for 

which the inpatient services are furnished. 

(8) If an individual is determined to be a qualified medicare beneficiary (as defined in section 1905(p)(1)), such determination shall 

apply to services furnished after the end of the month in which the 

determination first occurs. For purposes of payment to a State 

under section 1903(a), such determination shall be considered to be 

valid for an individual for a period of 12 months, except that a 

State may provide for such determinations more frequently, but not 

more frequently than once every 6 months for an individual. 

(9)(A) At the option of the State, the plan may include as medical 

assistance respiratory care services for any individual who— 

(i) is medically dependent on a ventilator for life support at 

least six hours per day; 

(ii) has been so dependent for at least 30 consecutive days 

(or the maximum number of days authorized under the State 

plan, whichever is less) as an inpatient; 

(iii) but for the availability of respiratory care services, 

would require respiratory care as an inpatient in a hospital, 

nursing facility, or intermediate care facility for the mentally 

retarded and would be eligible to have payment made for such 

inpatient care under the State plan; 

(iv) has adequate social support services to be cared for at 

home; and 

(v) wishes to be cared for at home. 

(B) The requirements of subparagraph (A)(ii) may be satisfied by 

a continuous stay in one or more hospitals, nursing facilities, or intermediate care facilities for the mentally retarded. 

(C) For purposes of this paragraph, respiratory care services 

means services provided on a part-time basis in the home of the 

individual by a respiratory therapist or other health care profesVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00107 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
102 

sional trained in respiratory therapy (as determined by the State), 

payment for which is not otherwise included within other items 

and services furnished to such individual as medical assistance 

under the plan. 

(10)(A) The fact that an individual, child, or pregnant woman 

may be denied aid under part A of title IV pursuant to section 

402(a)(43) shall not be construed as denying (or permitting a State 

to deny) medical assistance under this title to such individual, 

child, or woman who is eligible for assistance under this title on 

a basis other than the receipt of aid under such part. 

(B) If an individual, child, or pregnant woman is receiving aid 

under part A of title IV and such aid is terminated pursuant to section 402(a)(43), the State may not discontinue medical assistance 

under this title for the individual, child, or woman until the State 

has determined that the individual, child, or woman is not eligible 

for assistance under this title on a basis other than the receipt of 

aid under such part. 

(11)(A) In the case of an individual who is enrolled with a group 

health plan under section 1906 and who would (but for this paragraph) lose eligibility for benefits under this title before the end of 

the minimum enrollment period (defined in subparagraph (B)), the 

State plan may provide, notwithstanding any other provision of 

this title, that the individual shall be deemed to continue to be eligible for such benefits until the end of such minimum period, but 

only with respect to such benefits provided to the individual as an 

enrollee of such plan. 

(B) For purposes of subparagraph (A), the term ‘‘minimum enrollment period’’ means, with respect to an individual’s enrollment 

with a group health plan, a period established by the State, of not 

more than 6 months beginning on the date the individual’s enrollment under the plan becomes effective. 

(12) At the option of the State, the plan may provide that an individual who is under an age specified by the State (not to exceed 

19 years of age) and who is determined to be eligible for benefits 

under a State plan approved under this title under subsection 

(a)(10)(A) shall remain eligible for those benefits until the earlier 

of— 

(A) the end of a period (not to exceed 12 months) following 

the determination; or 

(B) the time that the individual exceeds that age. 

(13) EXPRESS LANE OPTION.— 

(A) IN GENERAL.— 

(i) OPTION TO USE A FINDING FROM AN EXPRESS LANE

AGENCY.—At the option of the State, the State plan may 

provide that in determining eligibility under this title for 

a child (as defined in subparagraph (G)), the State may 

rely on a finding made within a reasonable period (as determined by the State) from an Express Lane agency (as 

defined in subparagraph (F)) when it determines whether 

a child satisfies one or more components of eligibility for 

medical assistance under this title. The State may rely on 

a finding from an Express Lane agency notwithstanding 

sections 1902(a)(46)(B) and 1137(d) or any differences in 

budget unit, disregard, deeming or other methodology, if 

the following requirements are met: 


emcdonald on DSK67QTVN1PROD with HEARING
103 

(I) PROHIBITION ON DETERMINING CHILDREN INELI- GIBLE FOR COVERAGE.—If a finding from an Express 

Lane agency would result in a determination that a 

child does not satisfy an eligibility requirement for 

medical assistance under this title and for child health 

assistance under title XXI, the State shall determine 

eligibility for assistance using its regular procedures. 

(II) NOTICE REQUIREMENT.—For any child who is 

found eligible for medical assistance under the State 

plan under this title or child health assistance under 

title XXI and who is subject to premiums based on an 

Express Lane agency’s finding of such child’s income 

level, the State shall provide notice that the child may 

qualify for lower premium payments if evaluated by 

the State using its regular policies and of the procedures for requesting such an evaluation. 

(III) COMPLIANCE WITH SCREEN AND ENROLL RE- QUIREMENT.—The State shall satisfy the requirements 

under subparagraphs (A) and (B) of section 2102(b)(3) 

(relating to screen and enroll) before enrolling a child 

in child health assistance under title XXI. At its option, the State may fulfill such requirements in accordance with either option provided under subparagraph 

(C) of this paragraph. 

(IV) VERIFICATION OF CITIZENSHIP OR NATIONALITY

STATUS.—The State shall satisfy the requirements of 

section 1902(a)(46)(B) or 2105(c)(9), as applicable for 

verifications of citizenship or nationality status. 

(V) CODING.—The State meets the requirements of 

subparagraph (E). 

(ii) OPTION TO APPLY TO RENEWALS AND REDETERMINATIONS.—The State may apply the provisions of this paragraph when conducting initial determinations of eligibility, 

redeterminations of eligibility, or both, as described in the 

State plan. 

(B) RULES OF CONSTRUCTION.—Nothing in this paragraph 

shall be construed— 

(i) to limit or prohibit a State from taking any actions 

otherwise permitted under this title or title XXI in determining eligibility for or enrolling children into medical assistance under this title or child health assistance under 

title XXI; or 

(ii) to modify the limitations in section 1902(a)(5) concerning the agencies that may make a determination of eligibility for medical assistance under this title. 

(C) OPTIONS FOR SATISFYING THE SCREEN AND ENROLL REQUIREMENT.— 

(i) IN GENERAL.—With respect to a child whose eligibility 

for medical assistance under this title or for child health 

assistance under title XXI has been evaluated by a State 

agency using an income finding from an Express Lane 

agency, a State may carry out its duties under subparagraphs (A) and (B) of section 2102(b)(3) (relating to screen 

and enroll) in accordance with either clause (ii) or clause 

(iii). 


emcdonald on DSK67QTVN1PROD with HEARING
104 

(ii) ESTABLISHING A SCREENING THRESHOLD.— 

(I) IN GENERAL.—Under this clause, the State establishes a screening threshold set as a percentage of the 

Federal poverty level that exceeds the highest income 

threshold applicable under this title to the child by a 

minimum of 30 percentage points or, at State option, 

a higher number of percentage points that reflects the 

value (as determined by the State and described in the 

State plan) of any differences between income methodologies used by the program administered by the 

Express Lane agency and the methodologies used by 

the State in determining eligibility for medical assistance under this title. 

(II) CHILDREN WITH INCOME NOT ABOVE THRESHOLD.—If the income of a child does not exceed the 

screening threshold, the child is deemed to satisfy the 

income eligibility criteria for medical assistance under 

this title regardless of whether such child would otherwise satisfy such criteria. 

(III) CHILDREN WITH INCOME ABOVE THRESHOLD.—If 

the income of a child exceeds the screening threshold, 

the child shall be considered to have an income above 

the Medicaid applicable income level described in section 2110(b)(4) and to satisfy the requirement under 

section 2110(b)(1)(C) (relating to the requirement that 

CHIP matching funds be used only for children not eligible for Medicaid). If such a child is enrolled in child 

health assistance under title XXI, the State shall provide the parent, guardian, or custodial relative with 

the following: 

(aa) Notice that the child may be eligible to receive medical assistance under the State plan 

under this title if evaluated for such assistance 

under the State’s regular procedures and notice of 

the process through which a parent, guardian, or 

custodial relative can request that the State 

evaluate the child’s eligibility for medical assistance under this title using such regular procedures. 

(bb) A description of differences between the 

medical assistance provided under this title and 

child health assistance under title XXI, including 

differences in cost-sharing requirements and covered benefits. 

(iii) TEMPORARY ENROLLMENT IN CHIP PENDING SCREEN

AND ENROLL.— 

(I) IN GENERAL.—Under this clause, a State enrolls 

a child in child health assistance under title XXI for 

a temporary period if the child appears eligible for 

such assistance based on an income finding by an Express Lane agency. 

(II) DETERMINATION OF ELIGIBILITY.—During such 

temporary enrollment period, the State shall determine the child’s eligibility for child health assistance 


emcdonald on DSK67QTVN1PROD with HEARING
105 

under title XXI or for medical assistance under this 

title in accordance with this clause. 

(III) PROMPT FOLLOW UP.—In making such a determination, the State shall take prompt action to determine whether the child should be enrolled in medical 

assistance under this title or child health assistance 

under title XXI pursuant to subparagraphs (A) and (B) 

of section 2102(b)(3) (relating to screen and enroll). 

(IV) REQUIREMENT FOR SIMPLIFIED DETERMINA- TION.—In making such a determination, the State 

shall use procedures that, to the maximum feasible extent, reduce the burden imposed on the individual of 

such determination. Such procedures may not require 

the child’s parent, guardian, or custodial relative to 

provide or verify information that already has been 

provided to the State agency by an Express Lane 

agency or another source of information unless the 

State agency has reason to believe the information is 

erroneous. 

(V) AVAILABILITY OF CHIP MATCHING FUNDS DURING

TEMPORARY ENROLLMENT PERIOD.—Medical assistance 

for items and services that are provided to a child enrolled in title XXI during a temporary enrollment period under this clause shall be treated as child health 

assistance under such title. 

(D) OPTION FOR AUTOMATIC ENROLLMENT.— (i) IN GENERAL.—The State may initiate and determine 

eligibility for medical assistance under the State Medicaid 

plan or for child health assistance under the State CHIP 

plan without a program application from, or on behalf of, 

the child based on data obtained from sources other than 

the child (or the child’s family), but a child can only be 

automatically enrolled in the State Medicaid plan or the 

State CHIP plan if the child or the family affirmatively 

consents to being enrolled through affirmation in writing, 

by telephone, orally, through electronic signature, or 

through any other means specified by the Secretary or by 

signature on an Express Lane agency application, if the requirement of clause (ii) is met. 

(ii) INFORMATION REQUIREMENT.—The requirement of 

this clause is that the State informs the parent, guardian, 

or custodial relative of the child of the services that will 

be covered, appropriate methods for using such services, 

premium or other cost sharing charges (if any) that apply, 

medical support obligations (under section 1912(a)) created 

by enrollment (if applicable), and the actions the parent, 

guardian, or relative must take to maintain enrollment 

and renew coverage. 

(E) CODING; APPLICATION TO ENROLLMENT ERROR RATES.— (i) IN GENERAL.—For purposes of subparagraph (A)(iv), 

the requirement of this subparagraph for a State is that 

the State agrees to— 

(I) assign such codes as the Secretary shall require 

to the children who are enrolled in the State Medicaid 

plan or the State CHIP plan through reliance on a 


emcdonald on DSK67QTVN1PROD with HEARING
106 

finding made by an Express Lane agency for the duration of the State’s election under this paragraph; 

(II) annually provide the Secretary with a statistically valid sample (that is approved by Secretary) of 

the children enrolled in such plans through reliance on 

such a finding by conducting a full Medicaid eligibility 

review of the children identified for such sample for 

purposes of determining an eligibility error rate (as 

described in clause (iv)) with respect to the enrollment 

of such children (and shall not include such children 

in any data or samples used for purposes of complying 

with a Medicaid Eligibility Quality Control (MEQC) 

review or a payment error rate measurement (PERM) 

requirement); 

(III) submit the error rate determined under subclause (II) to the Secretary; 

(IV) if such error rate exceeds 3 percent for either 

of the first 2 fiscal years in which the State elects to 

apply this paragraph, demonstrate to the satisfaction 

of the Secretary the specific corrective actions implemented by the State to improve upon such error rate; 

and 

(V) if such error rate exceeds 3 percent for any fiscal 

year in which the State elects to apply this paragraph, 

a reduction in the amount otherwise payable to the 

State under section 1903(a) for quarters for that fiscal 

year, equal to the total amount of erroneous excess 

payments determined for the fiscal year only with respect to the children included in the sample for the fiscal year that are in excess of a 3 percent error rate 

with respect to such children. 

(ii) NO PUNITIVE ACTION BASED ON ERROR RATE.—The 

Secretary shall not apply the error rate derived from the 

sample under clause (i) to the entire population of children 

enrolled in the State Medicaid plan or the State CHIP 

plan through reliance on a finding made by an Express 

Lane agency, or to the population of children enrolled in 

such plans on the basis of the State’s regular procedures 

for determining eligibility, or penalize the State on the 

basis of such error rate in any manner other than the reduction of payments provided for under clause (i)(V). 

(iii) RULE OF CONSTRUCTION.—Nothing in this paragraph 

shall be construed as relieving a State that elects to apply 

this paragraph from being subject to a penalty under section 1903(u), for payments made under the State Medicaid 

plan with respect to ineligible individuals and families 

that are determined to exceed the error rate permitted 

under that section (as determined without regard to the 

error rate determined under clause (i)(II)). 

(iv) ERROR RATE DEFINED.—In this subparagraph, the 

term ‘‘error rate’’ means the rate of erroneous excess payments for medical assistance (as defined in section 

1903(u)(1)(D)) for the period involved, except that such 

payments shall be limited to individuals for which eligibility determinations are made under this paragraph and 


emcdonald on DSK67QTVN1PROD with HEARING
107 

except that in applying this paragraph under title XXI, 

there shall be substituted for references to provisions of 

this title corresponding provisions within title XXI. 

(F) EXPRESS LANE AGENCY.— 

(i) IN GENERAL.—In this paragraph, the term ‘‘Express 

Lane agency’’ means a public agency that— 

(I) is determined by the State Medicaid agency or 

the State CHIP agency (as applicable) to be capable of 

making the determinations of one or more eligibility 

requirements described in subparagraph (A)(i); 

(II) is identified in the State Medicaid plan or the 

State CHIP plan; and 

(III) notifies the child’s family— 

(aa) of the information which shall be disclosed 

in accordance with this paragraph; 

(bb) that the information disclosed will be used 

solely for purposes of determining eligibility for 

medical assistance under the State Medicaid plan 

or for child health assistance under the State 

CHIP plan; and 

(cc) that the family may elect to not have the information disclosed for such purposes; and 

(IV) enters into, or is subject to, an interagency 

agreement to limit the disclosure and use of the information disclosed. 

(ii) INCLUSION OF SPECIFIC PUBLIC AGENCIES AND INDIAN

TRIBES AND TRIBAL ORGANIZATIONS.—Such term includes 

the following: 

(I) A public agency that determines eligibility for assistance under any of the following: 

(aa) The temporary assistance for needy families program funded under part A of title IV. 

(bb) A State program funded under part D of 

title IV. 

(cc) The State Medicaid plan. 

(dd) The State CHIP plan. 

(ee) The Food and Nutrition Act of 2008 (7 

U.S.C. 2011 et seq.). 

(ff) The Head Start Act (42 U.S.C. 9801 et seq.). 

(gg) The Richard B. Russell National School 

Lunch Act (42 U.S.C. 1751 et seq.). 

(hh) The Child Nutrition Act of 1966 (42 U.S.C. 

1771 et seq.). 

(ii) The Child Care and Development Block 

Grant Act of 1990 (42 U.S.C. 9858 et seq.). 

(jj) The Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11301 et seq.). 

(kk) The United States Housing Act of 1937 (42 

U.S.C. 1437 et seq.). 

(ll) The Native American Housing Assistance 

and Self-Determination Act of 1996 (25 U.S.C. 

4101 et seq.). 

(II) A State-specified governmental agency that has 

fiscal liability or legal responsibility for the accuracy of 


emcdonald on DSK67QTVN1PROD with HEARING
108 

the eligibility determination findings relied on by the 

State. 

(III) A public agency that is subject to an interagency agreement limiting the disclosure and use of 

the information disclosed for purposes of determining 

eligibility under the State Medicaid plan or the State 

CHIP plan. 

(IV) The Indian Health Service, an Indian Tribe, 

Tribal Organization, or Urban Indian Organization (as 

defined in section 1139(c)). 

(iii) EXCLUSIONS.—Such term does not include an agency 

that determines eligibility for a program established under 

the Social Services Block Grant established under title XX 

or a private, for-profit organization. 

(iv) RULES OF CONSTRUCTION.—Nothing in this paragraph shall be construed as— 

(I) exempting a State Medicaid agency from complying with the requirements of section 1902(a)(4) relating to merit-based personnel standards for employees of the State Medicaid agency and safeguards 

against conflicts of interest); or 

(II) authorizing a State Medicaid agency that elects 

to use Express Lane agencies under this subparagraph 

to use the Express Lane option to avoid complying 

with such requirements for purposes of making eligibility determinations under the State Medicaid plan. 

(v) ADDITIONAL DEFINITIONS.—In this paragraph: 

(I) STATE.—The term ‘‘State’’ means 1 of the 50 

States or the District of Columbia. 

(II) STATE CHIP AGENCY.—The term ‘‘State CHIP 

agency’’ means the State agency responsible for administering the State CHIP plan. 

(III) STATE CHIP PLAN.—The term ‘‘State CHIP plan’’ 

means the State child health plan established under 

title XXI and includes any waiver of such plan. 

(IV) STATE MEDICAID AGENCY.—The term ‘‘State 

Medicaid agency’’ means the State agency responsible 

for administering the State Medicaid plan. 

(V) STATE MEDICAID PLAN.—The term ‘‘State Medicaid plan’’ means the State plan established under 

title XIX and includes any waiver of such plan. 

(G) CHILD DEFINED.—For purposes of this paragraph, the 

term ‘‘child’’ means an individual under 19 years of age, or, at 

the option of a State, such higher age, not to exceed 21 years 

of age, as the State may elect. 

(H) STATE OPTION TO RELY ON STATE INCOME TAX DATA OR

RETURN.—At the option of the State, a finding from an Express 

Lane agency may include gross income or adjusted gross income shown by State income tax records or returns. 

(I) APPLICATION.—This paragraph shall not apply with respect to eligibility determinations made after September 30, 

2017. 

(14) INCOME DETERMINED USING MODIFIED ADJUSTED GROSS

INCOME.— 


emcdonald on DSK67QTVN1PROD with HEARING
109 

(A) IN GENERAL.—Notwithstanding subsection (r) or any 

other provision of this title, except as provided in subparagraph (D), for purposes of determining income eligibility 

for medical assistance under the State plan or under any 

waiver of such plan and for any other purpose applicable 

under the plan or waiver for which a determination of income is required, including with respect to the imposition 

of premiums and cost-sharing, a State shall use the modified adjusted gross income of an individual and, in the case 

of an individual in a family greater than 1, the household 

income of such family. A State shall establish income eligibility thresholds for populations to be eligible for medical 

assistance under the State plan or a waiver of the plan 

using modified adjusted gross income and household income that are not less than the effective income eligibility 

levels that applied under the State plan or waiver on the 

date of enactment of the Patient Protection and Affordable 

Care Act. For purposes of complying with the maintenance 

of effort requirements under subsection (gg) during the 

transition to modified adjusted gross income and household income, a State shall, working with the Secretary, establish an equivalent income test that ensures individuals 

eligible for medical assistance under the State plan or 

under a waiver of the plan on the date of enactment of the 

Patient Protection and Affordable Care Act, do not lose 

coverage under the State plan or under a waiver of the 

plan. The Secretary may waive such provisions of this title 

and title XXI as are necessary to ensure that States establish income and eligibility determination systems that protect beneficiaries. 

(B) NO INCOME OR EXPENSE DISREGARDS.—Subject to 

subparagraph (I), no type of expense, block, or other income disregard shall be applied by a State to determine income eligibility for medical assistance under the State plan 

or under any waiver of such plan or for any other purpose 

applicable under the plan or waiver for which a determination of income is required. 

(C) NO ASSETS TEST.—A State shall not apply any assets 

or resources test for purposes of determining eligibility for 

medical assistance under the State plan or under a waiver 

of the plan. 

(D) EXCEPTIONS.— 

(i) INDIVIDUALS ELIGIBLE BECAUSE OF OTHER AID OR

ASSISTANCE, ELDERLY INDIVIDUALS, MEDICALLY NEEDY

INDIVIDUALS, AND INDIVIDUALS ELIGIBLE FOR MEDICARE

COST-SHARING.—Subparagraphs (A), (B), and (C) shall 

not apply to the determination of eligibility under the 

State plan or under a waiver for medical assistance for 

the following: 

(I) Individuals who are eligible for medical assistance under the State plan or under a waiver 

of the plan on a basis that does not require a determination of income by the State agency administering the State plan or waiver, including as a 

result of eligibility for, or receipt of, other Federal 


emcdonald on DSK67QTVN1PROD with HEARING
110 

or State aid or assistance, individuals who are eligible on the basis of receiving (or being treated as 

if receiving) supplemental security income benefits 

under title XVI, and individuals who are eligible 

as a result of being or being deemed to be a child 

in foster care under the responsibility of the State. 

(II) Individuals who have attained age 65. 

(III) Individuals who qualify for medical assistance under the State plan or under any waiver of 

such plan on the basis of being blind or disabled 

(or being treated as being blind or disabled) without regard to whether the individual is eligible for 

supplemental security income benefits under title 

XVI on the basis of being blind or disabled and including an individual who is eligible for medical 

assistance on the basis of section 1902(e)(3). 

(IV) Individuals described in subsection 

(a)(10)(C). 

(V) Individuals described in any clause of subsection (a)(10)(E). 

(ii) EXPRESS LANE AGENCY FINDINGS.—In the case of 

a State that elects the Express Lane option under 

paragraph (13), notwithstanding subparagraphs (A), 

(B), and (C), the State may rely on a finding made by 

an Express Lane agency in accordance with that paragraph relating to the income of an individual for purposes of determining the individual’s eligibility for 

medical assistance under the State plan or under a 

waiver of the plan. 

(iii) MEDICARE PRESCRIPTION DRUG SUBSIDIES DETER- MINATIONS.—Subparagraphs (A), (B), and (C) shall not 

apply to any determinations of eligibility for premium 

and cost-sharing subsidies under and in accordance 

with section 1860D–14 made by the State pursuant to 

section 1935(a)(2). 

(iv) LONG-TERM CARE.—Subparagraphs (A), (B), and 

(C) shall not apply to any determinations of eligibility 

of individuals for purposes of medical assistance for 

nursing facility services, a level of care in any institution equivalent to that of nursing facility services, 

home or community-based services furnished under a 

waiver or State plan amendment under section 1915 

or a waiver under section 1115, and services described 

in section 1917(c)(1)(C)(ii). 

(v) GRANDFATHER OF CURRENT ENROLLEES UNTIL

DATE OF NEXT REGULAR REDETERMINATION.—An individual who, on January 1, 2014, is enrolled in the 

State plan or under a waiver of the plan and who 

would be determined ineligible for medical assistance 

solely because of the application of the modified adjusted gross income or household income standard described in subparagraph (A), shall remain eligible for 

medical assistance under the State plan or waiver 

(and subject to the same premiums and cost-sharing 

as applied to the individual on that date) through 


emcdonald on DSK67QTVN1PROD with HEARING
111 

March 31, 2014, or the date on which the individual’s 

next regularly scheduled redetermination of eligibility 

is to occur, whichever is later. 

(E) TRANSITION PLANNING AND OVERSIGHT.—Each State 

shall submit to the Secretary for the Secretary’s approval 

the income eligibility thresholds proposed to be established 

using modified adjusted gross income and household income, the methodologies and procedures to be used to determine income eligibility using modified adjusted gross income and household income and, if applicable, a State plan 

amendment establishing an optional eligibility category 

under subsection (a)(10)(A)(ii)(XX). To the extent practicable, the State shall use the same methodologies and 

procedures for purposes of making such determinations as 

the State used on the date of enactment of the Patient Protection and Affordable Care Act. The Secretary shall ensure that the income eligibility thresholds proposed to be 

established using modified adjusted gross income and 

household income, including under the eligibility category 

established under subsection (a)(10)(A)(ii)(XX), and the 

methodologies and procedures proposed to be used to determine income eligibility, will not result in children who 

would have been eligible for medical assistance under the 

State plan or under a waiver of the plan on the date of enactment of the Patient Protection and Affordable Care Act 

no longer being eligible for such assistance. 

(F) LIMITATION ON SECRETARIAL AUTHORITY.—The Secretary shall not waive compliance with the requirements of 

this paragraph except to the extent necessary to permit a 

State to coordinate eligibility requirements for dual eligible individuals (as defined in section 1915(h)(2)(B)) under 

the State plan or under a waiver of the plan and under 

title XVIII and individuals who require the level of care 

provided in a hospital, a nursing facility, or an intermediate care facility for the mentally retarded. 

(G) DEFINITIONS OF MODIFIED ADJUSTED GROSS INCOME

AND HOUSEHOLD INCOME.—In this paragraph, the terms 

‘‘modified adjusted gross income’’ and ‘‘household income’’ 

have the meanings given such terms in section 36B(d)(2) 

of the Internal Revenue Code of 1986. 

(H) CONTINUED APPLICATION OF MEDICAID RULES REGARDING POINT-IN-TIME INCOME AND SOURCES OF INCOME.—The requirement under this paragraph for States 

to use modified adjusted gross income and household income to determine income eligibility for medical assistance 

under the State plan or under any waiver of such plan and 

for any other purpose applicable under the plan or waiver 

for which a determination of income is required shall not 

be construed as affecting or limiting the application of— 

(i) the requirement under this title and under the 

State plan or a waiver of the plan to determine an individual’s income as of the point in time at which an 

application for medical assistance under the State 

plan or a waiver of the plan is processed; or 


emcdonald on DSK67QTVN1PROD with HEARING
112 

(ii) any rules established under this title or under 

the State plan or a waiver of the plan regarding 

sources of countable income. 

(I) TREATMENT OF PORTION OF MODIFIED ADJUSTED GROSS

INCOME.—For purposes of determining the income eligibility of an individual for medical assistance whose eligibility is determined based on the application of modified 

adjusted gross income under subparagraph (A), the State 

shall— 

(i) determine the dollar equivalent of the difference 

between the upper income limit on eligibility for such 

an individual (expressed as a percentage of the poverty line) and such upper income limit increased by 5 

percentage points; and 

(ii) notwithstanding the requirement in subparagraph (A) with respect to use of modified adjusted 

gross income, utilize as the applicable income of such 

individual, in determining such income eligibility, an 

amount equal to the modified adjusted gross income 

applicable to such individual reduced by such dollar 

equivalent amount. 

(14) EXCLUSION OF COMPENSATION FOR PARTICIPATION IN A

CLINICAL TRIAL FOR TESTING OF TREATMENTS FOR A RARE DIS- EASE OR CONDITION.—The first $2,000 received by an individual (who has attained 19 years of age) as compensation for 

participation in a clinical trial meeting the requirements of section 1612(b)(26) shall be disregarded for purposes of determining the income eligibility of such individual for medical assistance under the State plan or any waiver of such plan. 

(f) Notwithstanding any other provision of this title, except as 

provided in subsection (e) and section 1619(b)(3) and section 1924, 

except with respect to qualified disabled and working individuals 

(described in section 1905(s)), and except with respect to qualified 

medicare beneficiaries, qualified severely impaired individuals, and 

individuals described in subsection (m)(1), no State not eligible to 

participate in the State plan program established under title XVI 

shall be required to provide medical assistance to any aged, blind, 

or disabled individual (within the meaning of title XVI) for any 

month unless such State would be (or would have been) required 

to provide medical assistance to such individual for such month 

had its plan for medical assistance approved under this title and 

in effect on January 1, 1972, been in effect in such month, except 

that for this purpose any such individual shall be deemed eligible 

for medical assistance under such State plan if (in addition to 

meeting such other requirements as are or may be imposed under 

the State plan) the income of any such individual as determined in 

accordance with section 1903(f) (after deducting any supplemental 

security income payment and State supplementary payment made 

with respect to such individual, and incurred expenses for medical 

care as recognized under State law regardless of whether such expenses are reimbursed under another public program of the State 

or political subdivision thereof) is not in excess of the standard for 

medical assistance established under the State plan as in effect on 

January 1, 1972. In States which provide medical assistance to individuals pursuant to paragraph (10)(C) of subsection (a) of this 


emcdonald on DSK67QTVN1PROD with HEARING
113 

section, an individual who is eligible for medical assistance by reason of the requirements of this section concerning the deduction of 

incurred medical expenses from income shall be considered an individual eligible for medical assistance under paragraph (10)(A) of 

that subsection if that individual is, or is eligible to be (1) an individual with respect to whom there is payable a State supplementary payment on the basis of which similarly situated individuals are eligible to receive medical assistance equal in amount, duration, and scope to that provided to individuals eligible under 

paragraph (10)(A), or (2) an eligible individual or eligible spouse, 

as defined in title XVI, with respect to whom supplemental security 

income benefits are payable; otherwise that individual shall be considered to be an individual eligible for medical assistance under 

paragraph (10)(C) of that subsection. In States which do not provide medical assistance to individuals pursuant to paragraph 

(10)(C) of that subsection, an individual who is eligible for medical 

assistance by reason of the requirements of this section concerning 

the deduction of incurred medical expenses from income shall be 

considered an individual eligible for medical assistance under paragraph (10)(A) of that subsection. 

(g) In addition to any other sanction available to a State, a State 

may provide for a reduction of any payment amount otherwise due 

with respect to a person who furnishes services under the plan in 

an amount equal to up to three times the amount of any payment 

sought to be collected by that person in violation of subsection 

(a)(25)(C). 

(h) Nothing in this title (including subsections (a)(13) and (a)(30) 

of this section) shall be construed as authorizing the Secretary to 

limit the amount of payment that may be made under a plan under 

this title for home and community care. 

(i)(1) In addition to any other authority under State law, where 

a State determines that a intermediate care facility for the mentally retarded which is certified for participation under its plan no 

longer substantially meets the requirements for such a facility 

under this title and further determines that the facility’s deficiencies— 

(A) immediately jeopardize the health and safety of its patients, the State shall provide for the termination of the facility’s certification for participation under the plan and may provide, or 

(B) do not immediately jeopardize the health and safety of its 

patients, the State may, in lieu of providing for terminating 

the facility’s certification for participation under the plan, establish alternative remedies if the State demonstrates to the 

Secretary’s satisfaction that the alternative remedies are effective in deterring noncompliance and correcting deficiencies, 

and may provide 

that no payment will be made under the State plan with respect 

to any individual admitted to such facility after a date specified by 

the State. 

(2) The State shall not make such a decision with respect to a 

facility until the facility has had a reasonable opportunity, following the initial determination that it no longer substantially 

meets the requirements for such a facility under this title, to corVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00119 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
114 

rect its deficiencies, and, following this period, has been given reasonable notice and opportunity for a hearing. 

(3) The State’s decision to deny payment may be made effective 

only after such notice to the public and to the facility as may be 

provided for by the State, and its effectiveness shall terminate (A) 

when the State finds that the facility is in substantial compliance 

(or is making good faith efforts to achieve substantial compliance) 

with the requirements for such a facility under this title, or (B) in 

the case described in paragraph (1)(B), with the end of the eleventh 

month following the month such decision is made effective, whichever occurs first. If a facility to which clause (B) of the previous 

sentence applies still fails to substantially meet the provisions of 

the respective section on the date specified in such clause, the 

State shall terminate such facility’s certification for participation 

under the plan effective with the first day of the first month following the month specified in such clause. 

(j) Notwithstanding any other requirement of this title, the Secretary may waive or modify any requirement of this title with respect to the medical assistance program in American Samoa and 

the Northern Mariana Islands, other than a waiver of the Federal 

medical assistance percentage, the limitation in section 1108(f), or 

the requirement that payment may be made for medical assistance 

only with respect to amounts expended by American Samoa or the 

Northern Mariana Islands for care and services described in a 

numbered paragraph of section 1905(a). 

(k)(1) The medical assistance provided to an individual described 

in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of benchmark coverage described in section 1937(b)(1) or benchmark equivalent coverage described in section 1937(b)(2). Such medical assistance shall be provided subject to the requirements of section 1937, 

without regard to whether a State otherwise has elected the option 

to provide medical assistance through coverage under that section, 

unless an individual described in subclause (VIII) of subsection 

(a)(10)(A)(i) is also an individual for whom, under subparagraph (B) 

of section 1937(a)(2), the State may not require enrollment in 

benchmark coverage described in subsection (b)(1) of section 1937 

or benchmark equivalent coverage described in subsection (b)(2) of 

that section. 

(2) Beginning with the first day of any fiscal year quarter that 

begins on or after April 1, 2010, and before January 1, 2014, a 

State may elect through a State plan amendment to provide medical assistance to individuals who would be described in subclause 

(VIII) of subsection (a)(10)(A)(i) if that subclause were effective before January 1, 2014. A State may elect to phase-in the extension 

of eligibility for medical assistance to such individuals based on income, so long as the State does not extend such eligibility to individuals described in such subclause with higher income before 

making individuals described in such subclause with lower income 

eligible for medical assistance. 

(3) If an individual described in subclause (VIII) of subsection 

(a)(10)(A)(i) is the parent of a child who is under 19 years of age 

(or such higher age as the State may have elected) who is eligible 

for medical assistance under the State plan or under a waiver of 

such plan (under that subclause or under a State plan amendment 

under paragraph (2), the individual may not be enrolled under the 


emcdonald on DSK67QTVN1PROD with HEARING
115 

State plan unless the individual’s child is enrolled under the State 

plan or under a waiver of the plan or is enrolled in other health 

insurance coverage. For purposes of the preceding sentence, the 

term ‘‘parent’’ includes an individual treated as a caretaker relative 

for purposes of carrying out section 1931. 

(l)(1) Individuals described in this paragraph are— 

(A) women during pregnancy (and during the 60-day period 

beginning on the last day of the pregnancy), 

(B) infants under one year of age, 

(C) children who have attained one year of age but have not 

attained 6 years of age, and 

(D) children born after September 30, 1983 (or, at the option 

of a State, after any earlier date), who have attained 6 years 

of age but have not attained 19 years of age, 

who are not described in any of subclauses (I) through (III) of subsection (a)(10)(A)(i) and whose family income does not exceed the 

income level established by the State under paragraph (2) for a 

family size equal to the size of the family, including the woman, 

infant, or child. 

(2)(A)(i) For purposes of paragraph (1) with respect to individuals 

described in subparagraph (A) or (B) of that paragraph, the State 

shall establish an income level which is a percentage (not less than 

the percentage provided under clause (ii) and not more than 185 

percent) of the income official poverty line (as defined by the Office 

of Management and Budget, and revised annually in accordance 

with section 673(2) of the Omnibus Budget Reconciliation Act of 

1981) applicable to a family of the size involved. 

(ii) The percentage provided under this clause, with respect to 

eligibility for medical assistance on or after— 

(I) July 1, 1989, is 75 percent, or, if greater, the percentage 

provided under clause (iii), and 

(II) April 1, 1990, 133 percent, or, if greater, the percentage 

provided under clause (iv). 

(iii) In the case of a State which, as of the date of the enactment 

of this clause, has elected to provide, and provides, medical assistance to individuals described in this subsection or has enacted legislation authorizing, or appropriating funds, to provide such assistance to such individuals before July 1, 1989, the percentage provided under clause (ii)(I) shall not be less than— 

(I) the percentage specified by the State in an amendment to 

its State plan (whether approved or not) as of the date of the 

enactment of this clause, or 

(II) if no such percentage is specified as of the date of the 

enactment of this clause, the percentage established under the 

State’s authorizing legislation or provided for under the State’s 

appropriations; 

but in no case shall this clause require the percentage provided 

under clause (ii)(I) to exceed 100 percent. 

(iv) In the case of a State which, as of the date of the enactment 

of this clause, has established under clause (i), or has enacted legislation authorizing, or appropriating funds, to provide for, a percentage (of the income official poverty line) that is greater than 133 

percent, the percentage provided under clause (ii) for medical assistance on or after April 1, 1990, shall not be less than— 


emcdonald on DSK67QTVN1PROD with HEARING
116 

(I) the percentage specified by the State in an amendment to 

its State plan (whether approved or not) as of the date of the 

enactment of this clause, or 

(II) if no such percentage is specified as of the date of the 

enactment of this clause, the percentage established under the 

State’s authorizing legislation or provided for under the State’s 

appropriations. 

(B) For purposes of paragraph (1) with respect to individuals described in subparagraph (C) of such paragraph, the State shall establish an income level which is equal to 133 percent of the income 

official poverty line described in subparagraph (A) applicable to a 

family of the size involved. 

(C) For purposes of paragraph (1) with respect to individuals described in subparagraph (D) of that paragraph, the State shall establish an income level which is equal to 100 percent (or, beginning 

January 1, 2014, 133 percent) of the income official poverty line described in subparagraph (A) applicable to a family of the size involved. 

(3) Notwithstanding subsection (a)(17), for individuals who are 

eligible for medical assistance because of subsection 

(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 

(a)(10)(A)(ii)(IX)— 

(A) application of a resource standard shall be at the option 

of the State; 

(B) any resource standard or methodology that is applied 

with respect to an individual described in subparagraph (A) of 

paragraph (1) may not be more restrictive than the resource 

standard or methodology that is applied under title XVI; 

(C) any resource standard or methodology that is applied 

with respect to an individual described in subparagraph (B), 

(C), or (D) of paragraph (1) may not be more restrictive than 

the corresponding methodology that is applied under the State 

plan under part A of title IV; 

(D) the income standard to be applied is the appropriate income standard established under paragraph (2); and 

(E) family income shall be determined in accordance with the 

methodology employed under the State plan under part A or 

E of title IV (except to the extent such methodology is inconsistent with clause (D) of subsection (a)(17)), and costs incurred 

for medical care or for any other type of remedial care shall not 

be taken into account. 

Any different treatment provided under this paragraph for such individuals shall not, because of subsection (a)(17), require or permit 

such treatment for other individuals. 

(4)(A) In the case of any State which is providing medical assistance to its residents under a waiver granted under section 1115, 

the Secretary shall require the State to provide medical assistance 

for pregnant women and infants under age 1 described in subsection (a)(10)(A)(i)(IV) and for children described in subsection 

(a)(10)(A)(i)(VI) or subsection (a)(10)(A)(i)(VII) in the same manner 

as the State would be required to provide such assistance for such 

individuals if the State had in effect a plan approved under this 

title. 

(B) In the case of a State which is not one of the 50 States or 

the District of Columbia, the State need not meet the requirement 


emcdonald on DSK67QTVN1PROD with HEARING
117 

of subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), or (a)(10)(A)(i)(VII) 

and, for purposes of paragraph (2)(A), the State may substitute for 

the percentage provided under clause (ii) of such paragraph any 

percentage. 

(m)(1) Individuals described in this paragraph are individuals— 

(A) who are 65 years of age or older or are disabled individuals (as determined under section 1614(a)(3)), 

(B) whose income (as determined under section 1612 for purposes of the supplemental security income program, except as 

provided in paragraph (2)(C)) does not exceed an income level 

established by the State consistent with paragraph (2)(A), and 

(C) whose resources (as determined under section 1613 for 

purposes of the supplemental security income program) do not 

exceed (except as provided in paragraph (2)(B)) the maximum 

amount of resources that an individual may have and obtain 

benefits under that program. 

(2)(A) The income level established under paragraph (1)(B) may 

not exceed a percentage (not more than 100 percent) of the official 

poverty line (as defined by the Office of Management and Budget, 

and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of 

the size involved. 

(B) In the case of a State that provides medical assistance to individuals not described in subsection (a)(10)(A) and at the State’s 

option, the State may use under paragraph (1)(C) such resource 

level (which is higher than the level described in that paragraph) 

as may be applicable with respect to individuals described in paragraph (1)(A) who are not described in subsection (a)(10)(A). 

(C) The provisions of section 1905(p)(2)(D) shall apply to determinations of income under this subsection in the same manner as 

they apply to determinations of income under section 1905(p). 

(3) Notwithstanding subsection (a)(17), for individuals described 

in paragraph (1) who are covered under the State plan by virtue 

of subsection (a)(10)(A)(ii)(X)— 

(A) the income standard to be applied is the income standard 

described in paragraph (1)(B), and 

(B) except as provided in section 1612(b)(4)(B)(ii), costs incurred for medical care or for any other type of remedial care 

shall not be taken into account in determining income. 

Any different treatment provided under this paragraph for such individuals shall not, because of subsection (a)(17), require or permit 

such treatment for other individuals. 

(4) Notwithstanding subsection (a)(17), for qualified medicare 

beneficiaries described in section 1905(p)(1)— 

(A) the income standard to be applied is the income standard 

described in section 1905(p)(1)(B), and 

(B) except as provided in section 1612(b)(4)(B)(ii), costs incurred for medical care or for any other type of remedial care 

shall not be taken into account in determining income. 

Any different treatment provided under this paragraph for such individuals shall not, because of subsection (a)(17), require or permit 

such treatment for other individuals. 

(n)(1) In the case of medical assistance furnished under this title 

for medicare cost-sharing respecting the furnishing of a service or 

item to a qualified medicare beneficiary, the State plan may proVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00123 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
118 

vide payment in an amount with respect to the service or item that 

results in the sum of such payment amount and any amount of 

payment made under title XVIII with respect to the service or item 

exceeding the amount that is otherwise payable under the State 

plan for the item or service for eligible individuals who are not 

qualified medicare beneficiaries. 

(2) In carrying out paragraph (1), a State is not required to provide any payment for any expenses incurred relating to payment 

for deductibles, coinsurance, or copayments for medicare cost-sharing to the extent that payment under title XVIII for the service 

would exceed the payment amount that otherwise would be made 

under the State plan under this title for such service if provided 

to an eligible recipient other than a medicare beneficiary. 

(3) In the case in which a State’s payment for medicare cost-sharing for a qualified medicare beneficiary with respect to an item or 

service is reduced or eliminated through the application of paragraph (2)— 

(A) for purposes of applying any limitation under title XVIII 

on the amount that the beneficiary may be billed or charged 

for the service, the amount of payment made under title XVIII 

plus the amount of payment (if any) under the State plan shall 

be considered to be payment in full for the service; 

(B) the beneficiary shall not have any legal liability to make 

payment to a provider or to an organization described in section 1903(m)(1)(A) for the service; and 

(C) any lawful sanction that may be imposed upon a provider 

or such an organization for excess charges under this title or 

title XVIII shall apply to the imposition of any charge imposed 

upon the individual in such case. 

This paragraph shall not be construed as preventing payment of 

any medicare cost-sharing by a medicare supplemental policy or an 

employer retiree health plan on behalf of an individual. 

(o) Notwithstanding any provision of subsection (a) to the contrary, a State plan under this title shall provide that any supplemental security income benefits paid by reason of subparagraph (E) 

or (G) of section 1611(e)(1) to an individual who— 

(1) is eligible for medical assistance under the plan, and 

(2) is in a hospital, skilled nursing facility, or intermediate 

care facility at the time such benefits are paid, 

will be disregarded for purposes of determining the amount of any 

post-eligibility contribution by the individual to the cost of the care 

and services provided by the hospital, skilled nursing facility, or intermediate care facility. 

(p)(1) In addition to any other authority, a State may exclude any 

individual or entity for purposes of participating under the State 

plan under this title for any reason for which the Secretary could 

exclude the individual or entity from participation in a program 

under title XVIII under section 1128, 1128A, or 1866(b)(2). 

(2) In order for a State to receive payments for medical assistance under section 1903(a), with respect to payments the State 

makes to a medicaid managed care organization (as defined in section 1903(m)) or to an entity furnishing services under a waiver approved under section 1915(b)(1), the State must provide that it will 

exclude from participation, as such an organization or entity, any 

organization or entity that— 


emcdonald on DSK67QTVN1PROD with HEARING
119 

(A) could be excluded under section 1128(b)(8) (relating to 

owners and managing employees who have been convicted of 

certain crimes or received other sanctions), 

(B) has, directly or indirectly, a substantial contractual relationship (as defined by the Secretary) with an individual or entity that is described in section 1128(b)(8)(B), or 

(C) employs or contracts with any individual or entity that 

is excluded from participation under this title under section 

1128 or 1128A for the provision of health care, utilization review, medical social work, or administrative services or employs or contracts with any entity for the provision (directly or 

indirectly) through such an excluded individual or entity of 

such services. 

(3) As used in this subsection, the term ‘‘exclude’’ includes the refusal to enter into or renew a participation agreement or the termination of such an agreement. 

(q)(1)(A) In order to meet the requirement of subsection (a)(50), 

the State plan must provide that, in the case of an institutionalized 

individual or couple described in subparagraph (B), in determining 

the amount of the individual’s or couple’s income to be applied 

monthly to payment for the cost of care in an institution, there 

shall be deducted from the monthly income (in addition to other allowances otherwise provided under the State plan) a monthly personal needs allowance— 

(i) which is reasonable in amount for clothing and other personal needs of the individual (or couple) while in an institution, 

and 

(ii) which is not less (and may be greater) than the minimum 

monthly personal needs allowance described in paragraph (2). 

(B) In this subsection, the term ‘‘institutionalized individual or 

couple’’ means an individual or married couple— 

(i) who is an inpatient (or who are inpatients) in a medical 

institution or nursing facility for which payments are made 

under this title throughout a month, and 

(ii) who is or are determined to be eligible for medical assistance under the State plan. 

(2) The minimum monthly personal needs allowance described in 

this paragraph is $30 for an institutionalized individual and $60 

for an institutionalized couple (if both are aged, blind, or disabled, 

and their incomes are considered available to each other in determining eligibility). 

(r)(1)(A) For purposes of sections 1902(a)(17) and 1924(d)(1)(D) 

and for purposes of a waiver under section 1915, with respect to 

the post-eligibility treatment of income of individuals who are institutionalized or receiving home or community-based services under 

such a waiver, the treatment described in subparagraph (B) shall 

apply, there shall be disregarded reparation payments made by the 

Federal Republic of Germany, and there shall be taken into account amounts for incurred expenses for medical or remedial care 

that are not subject to payment by a third party, including— 

(i) medicare and other health insurance premiums, 

deductibles, or coinsurance, and 

(ii) necessary medical or remedial care recognized under 

State law but not covered under the State plan under this title, 


emcdonald on DSK67QTVN1PROD with HEARING
120 

subject to reasonable limits the State may establish on the 

amount of these expenses. 

(B)(i) In the case of a veteran who does not have a spouse or a 

child, if the veteran— 

(I) receives, after the veteran has been determined to be eligible for medical assistance under the State plan under this 

title, a veteran’s pension in excess of $90 per month, and 

(II) resides in a State veterans home with respect to which 

the Secretary of Veterans Affairs makes per diem payments for 

nursing home care pursuant to section 1741(a) of title 38, 

United States Code, 

any such pension payment, including any payment made due to the 

need for aid and attendance, or for unreimbursed medical expenses, 

that is in excess of $90 per month shall be counted as income only 

for the purpose of applying such excess payment to the State veterans home’s cost of providing nursing home care to the veteran. 

(ii) The provisions of clause (i) shall apply with respect to a surviving spouse of a veteran who does not have a child in the same 

manner as they apply to a veteran described in such clause. 

(2)(A) The methodology to be employed in determining income 

and resource eligibility for individuals under subsection 

(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), 

(a)(10)(A)(ii), (a)(10)(C)(i)(III), or (f) or under section 1905(p) may 

be less restrictive, and shall be no more restrictive, than the methodology— 

(i) in the case of groups consisting of aged, blind, or disabled 

individuals, under the supplemental security income program 

under title XVI, or 

(ii) in the case of other groups, under the State plan most 

closely categorically related. 

(B) For purposes of this subsection and subsection (a)(10), methodology is considered to be ‘‘no more restrictive’’ if, using the methodology, additional individuals may be eligible for medical assistance and no individuals who are otherwise eligible are made ineligible for such assistance. 

(s) In order to meet the requirements of subsection (a)(55), the 

State plan must provide that payments to hospitals under the plan 

for inpatient hospital services furnished to infants who have not attained the age of 1 year, and to children who have not attained the 

age of 6 years and who receive such services in a disproportionate 

share hospital described in section 1923(b)(1), shall— 

(1) if made on a prospective basis (whether per diem, per 

case, or otherwise) provide for an outlier adjustment in payment amounts for medically necessary inpatient hospital services involving exceptionally high costs or exceptionally long 

lengths of stay, 

(2) not be limited by the imposition of day limits with respect 

to the delivery of such services to such individuals, and 

(3) not be limited by the imposition of dollar limits (other 

than such limits resulting from prospective payments as adjusted pursuant to paragraph (1)) with respect to the delivery 

of such services to any such individual who has not attained 

their first birthday (or in the case of such an individual who 

is an inpatient on his first birthday until such individual is 

discharged). 


emcdonald on DSK67QTVN1PROD with HEARING
121 

(t) Nothing in this title (including sections 1903(a) and 1905(a)) 

shall be construed as authorizing the Secretary to deny or limit 

payments to a State for expenditures, for medical assistance for 

items or services, attributable to taxes of general applicability imposed with respect to the provision of such items or services. 

(u)(1) Individuals described in this paragraph are individuals— 

(A) who are entitled to elect COBRA continuation coverage 

(as defined in paragraph (3)), 

(B) whose income (as determined under section 1612 for purposes of the supplemental security income program) does not 

exceed 100 percent of the official poverty line (as defined by 

the Office of Management and Budget, and revised annually in 

accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved, 

(C) whose resources (as determined under section 1613 for 

purposes of the supplemental security income program) do not 

exceed twice the maximum amount of resources that an individual may have and obtain benefits under that program, and 

(D) with respect to whose enrollment for COBRA continuation coverage the State has determined that the savings in expenditures under this title resulting from such enrollment is 

likely to exceed the amount of payments for COBRA premiums 

made. 

(2) For purposes of subsection (a)(10)(F) and this subsection, the 

term ‘‘COBRA premiums’’ means the applicable premium imposed 

with respect to COBRA continuation coverage. 

(3) In this subsection, the term ‘‘COBRA continuation coverage’’ 

means coverage under a group health plan provided by an employer with 75 or more employees provided pursuant to title XXII 

of the Public Health Service Act, section 4980B of the Internal Revenue Code of 1986, or title VI of the Employee Retirement Income 

Security Act of 1974. 

(4) Notwithstanding subsection (a)(17), for individuals described 

in paragraph (1) who are covered under the State plan by virtue 

of subsection (a)(10)(A)(ii)(XI)— 

(A) the income standard to be applied is the income standard 

described in paragraph (1)(B), and 

(B) except as provided in section 1612(b)(4)(B)(ii), costs incurred for medical care or for any other type of remedial care 

shall not be taken into account in determining income. 

Any different treatment provided under this paragraph for such individuals shall not, because of subsection (a)(10)(B) or (a)(17), require or permit such treatment for other individuals. 

(v) A State plan may provide for the making of determinations 

of disability or blindness for the purpose of determining eligibility 

for medical assistance under the State plan by the single State 

agency or its designee, and make medical assistance available to 

individuals whom it finds to be blind or disabled and who are determined otherwise eligible for such assistance during the period of 

time prior to which a final determination of disability or blindness 

is made by the Social Security Administration with respect to such 

an individual. In making such determinations, the State must 

apply the definitions of disability and blindness found in section 

1614(a) of the Social Security Act. 


emcdonald on DSK67QTVN1PROD with HEARING
122 

(w)(1) For purposes of subsection (a)(57) and sections 

1903(m)(1)(A) and 1919(c)(2)(E), the requirement of this subsection 

is that a provider or organization (as the case may be) maintain 

written policies and procedures with respect to all adult individuals 

receiving medical care by or through the provider or organization— 

(A) to provide written information to each such individual 

concerning— 

(i) an individual’s rights under State law (whether statutory or as recognized by the courts of the State) to make 

decisions concerning such medical care, including the right 

to accept or refuse medical or surgical treatment and the 

right to formulate advance directives (as defined in paragraph (3)), and 

(ii) the provider’s or organization’s written policies respecting the implementation of such rights; 

(B) to document in the individual’s medical record whether 

or not the individual has executed an advance directive; 

(C) not to condition the provision of care or otherwise discriminate against an individual based on whether or not the 

individual has executed an advance directive; 

(D) to ensure compliance with requirements of State law 

(whether statutory or as recognized by the courts of the State) 

respecting advance directives; and 

(E) to provide (individually or with others) for education for 

staff and the community on issues concerning advance directives. 

Subparagraph (C) shall not be construed as requiring the provision 

of care which conflicts with an advance directive. 

(2) The written information described in paragraph (1)(A) shall 

be provided to an adult individual— 

(A) in the case of a hospital, at the time of the individual’s 

admission as an inpatient, 

(B) in the case of a nursing facility, at the time of the individual’s admission as a resident, 

(C) in the case of a provider of home health care or personal 

care services, in advance of the individual coming under the 

care of the provider, 

(D) in the case of a hospice program, at the time of initial 

receipt of hospice care by the individual from the program, and 

(E) in the case of a medicaid managed care organization, at 

the time of enrollment of the individual with the organization. 

(3) Nothing in this section shall be construed to prohibit the application of a State law which allows for an objection on the basis 

of conscience for any health care provider or any agent of such provider which as a matter of conscience cannot implement an advance directive. 

(4) In this subsection, the term ‘‘advance directive’’ means a written instruction, such as a living will or durable power of attorney 

for health care, recognized under State law (whether statutory or 

as recognized by the courts of the State) and relating to the provision of such care when the individual is incapacitated. 

(5) For construction relating to this subsection, see section 7 of 

the Assisted Suicide Funding Restriction Act of 1997 (relating to 

clarification respecting assisted suicide, euthanasia, and mercy killing). 


emcdonald on DSK67QTVN1PROD with HEARING
123 

(x) The Secretary shall establish a system, for implementation by 

not later than July 1, 1991, which provides for a unique identifier 

for each physician who furnishes services for which payment may 

be made under a State plan approved under this title. 

(y)(1) In addition to any other authority under State law, where 

a State determines that a psychiatric hospital which is certified for 

participation under its plan no longer meets the requirements for 

a psychiatric hospital (referred to in section 1905(h)) and further 

finds that the hospital’s deficiencies— 

(A) immediately jeopardize the health and safety of its patients, the State shall terminate the hospital’s participation 

under the State plan; or 

(B) do not immediately jeopardize the health and safety of its 

patients, the State may terminate the hospital’s participation 

under the State plan, or provide that no payment will be made 

under the State plan with respect to any individual admitted 

to such hospital after the effective date of the finding, or both. 

(2) Except as provided in paragraph (3), if a psychiatric hospital 

described in paragraph (1)(B) has not complied with the requirements for a psychiatric hospital under this title— 

(A) within 3 months after the date the hospital is found to 

be out of compliance with such requirements, the State shall 

provide that no payment will be made under the State plan 

with respect to any individual admitted to such hospital after 

the end of such 3-month period, or 

(B) within 6 months after the date the hospital is found to 

be out of compliance with such requirements, no Federal financial participation shall be provided under section 1903(a) with 

respect to further services provided in the hospital until the 

State finds that the hospital is in compliance with the requirements of this title. 

(3) The Secretary may continue payments, over a period of not 

longer than 6 months from the date the hospital is found to be out 

of compliance with such requirements, if— 

(A) the State finds that it is more appropriate to take alternative action to assure compliance of the hospital with the requirements than to terminate the certification of the hospital, 

(B) the State has submitted a plan and timetable for corrective action to the Secretary for approval and the Secretary approves the plan of corrective action, and 

(C) the State agrees to repay to the Federal Government 

payments received under this paragraph if the corrective action is not taken in accordance with the approved plan and 

timetable. 

(z)(1) Individuals described in this paragraph are individuals not 

described in subsection (a)(10)(A)(i)— 

(A) who are infected with tuberculosis; 

(B) whose income (as determined under the State plan under 

this title with respect to disabled individuals) does not exceed 

the maximum amount of income a disabled individual described in subsection (a)(10)(A)(i) may have and obtain medical 

assistance under the plan; and 

(C) whose resources (as determined under the State plan 

under this title with respect to disabled individuals) do not exceed the maximum amount of resources a disabled individual 


emcdonald on DSK67QTVN1PROD with HEARING
124 

described in subsection (a)(10)(A)(i) may have and obtain medical assistance under the plan. 

(2) For purposes of subsection (a)(10), the term ‘‘TB-related services’’ means each of the following services relating to treatment of 

infection with tuberculosis: 

(A) Prescribed drugs. 

(B) Physicians’ services and services described in section 

1905(a)(2). 

(C) Laboratory and X-ray services (including services to confirm the presence of infection). 

(D) Clinic services and Federally-qualified health center 

services. 

(E) Case management services (as defined in section 

1915(g)(2)). 

(F) Services (other than room and board) designed to encourage completion of regimens of prescribed drugs by outpatients, 

including services to observe directly the intake of prescribed 

drugs. 

(aa) Individuals described in this subsection are individuals 

who— 

(1) are not described in subsection (a)(10)(A)(i); 

(2) have not attained age 65; 

(3) have been screened for breast and cervical cancer under 

the Centers for Disease Control and Prevention breast and cervical cancer early detection program established under title XV 

of the Public Health Service Act (42 U.S.C. 300k et seq.) in accordance with the requirements of section 1504 of that Act (42 

U.S.C. 300n) and need treatment for breast or cervical cancer; 

and 

(4) are not otherwise covered under creditable coverage, as 

defined in section 2701(c) of the Public Health Service Act (42 

U.S.C. 300gg(c)), but applied without regard to paragraph 

(1)(F) of such section. 

(bb) PAYMENT FOR SERVICES PROVIDED BY FEDERALLY-QUALIFIED

HEALTH CENTERS AND RURAL HEALTH CLINICS.— 

(1) IN GENERAL.—Beginning with fiscal year 2001 with respect to services furnished on or after January 1, 2001, and 

each succeeding fiscal year, the State plan shall provide for 

payment for services described in section 1905(a)(2)(C) furnished by a Federally-qualified health center and services described in section 1905(a)(2)(B) furnished by a rural health 

clinic in accordance with the provisions of this subsection. 

(2) FISCAL YEAR 2001.—Subject to paragraph (4), for services 

furnished on and after January 1, 2001, during fiscal year 

2001, the State plan shall provide for payment for such services in an amount (calculated on a per visit basis) that is equal 

to 100 percent of the average of the costs of the center or clinic 

of furnishing such services during fiscal years 1999 and 2000 

which are reasonable and related to the cost of furnishing such 

services, or based on such other tests of reasonableness as the 

Secretary prescribes in regulations under section 1833(a)(3), or, 

in the case of services to which such regulations do not apply, 

the same methodology used under section 1833(a)(3), adjusted 

to take into account any increase or decrease in the scope of 


emcdonald on DSK67QTVN1PROD with HEARING
125 

such services furnished by the center or clinic during fiscal 

year 2001. 

(3) FISCAL YEAR 2002 AND SUCCEEDING FISCAL YEARS.—Subject to paragraph (4), for services furnished during fiscal year 

2002 or a succeeding fiscal year, the State plan shall provide 

for payment for such services in an amount (calculated on a 

per visit basis) that is equal to the amount calculated for such 

services under this subsection for the preceding fiscal year— 

(A) increased by the percentage increase in the MEI (as 

defined in section 1842(i)(3)) applicable to primary care 

services (as defined in section 1842(i)(4)) for that fiscal 

year; and 

(B) adjusted to take into account any increase or decrease in the scope of such services furnished by the center 

or clinic during that fiscal year. 

(4) ESTABLISHMENT OF INITIAL YEAR PAYMENT AMOUNT FOR

NEW CENTERS OR CLINICS.—In any case in which an entity first 

qualifies as a Federally-qualified health center or rural health 

clinic after fiscal year 2000, the State plan shall provide for 

payment for services described in section 1905(a)(2)(C) furnished by the center or services described in section 

1905(a)(2)(B) furnished by the clinic in the first fiscal year in 

which the center or clinic so qualifies in an amount (calculated 

on a per visit basis) that is equal to 100 percent of the costs 

of furnishing such services during such fiscal year based on the 

rates established under this subsection for the fiscal year for 

other such centers or clinics located in the same or adjacent 

area with a similar case load or, in the absence of such a center or clinic, in accordance with the regulations and methodology referred to in paragraph (2) or based on such other tests 

of reasonableness as the Secretary may specify. For each fiscal 

year following the fiscal year in which the entity first qualifies 

as a Federally-qualified health center or rural health clinic, the 

State plan shall provide for the payment amount to be calculated in accordance with paragraph (3). 

(5) ADMINISTRATION IN THE CASE OF MANAGED CARE.— (A) IN GENERAL.—In the case of services furnished by a 

Federally-qualified health center or rural health clinic pursuant to a contract between the center or clinic and a managed care entity (as defined in section 1932(a)(1)(B)), the 

State plan shall provide for payment to the center or clinic 

by the State of a supplemental payment equal to the 

amount (if any) by which the amount determined under 

paragraphs (2), (3), and (4) of this subsection exceeds the 

amount of the payments provided under the contract. 

(B) PAYMENT SCHEDULE.—The supplemental payment required under subparagraph (A) shall be made pursuant to 

a payment schedule agreed to by the State and the Federally-qualified health center or rural health clinic, but in no 

case less frequently than every 4 months. 

(6) ALTERNATIVE PAYMENT METHODOLOGIES.—Notwithstanding any other provision of this section, the State plan 

may provide for payment in any fiscal year to a Federallyqualified health center for services described in section 

1905(a)(2)(C) or to a rural health clinic for services described 


emcdonald on DSK67QTVN1PROD with HEARING
126 

in section 1905(a)(2)(B) in an amount which is determined 

under an alternative payment methodology that— 

(A) is agreed to by the State and the center or clinic; and 

(B) results in payment to the center or clinic of an 

amount which is at least equal to the amount otherwise 

required to be paid to the center or clinic under this section. 

(cc)(1) Individuals described in this paragraph are individuals— 

(A) who are children who have not attained 19 years of age 

and are born— 

(i) on or after January 1, 2001 (or, at the option of a 

State, on or after an earlier date), in the case of the second, third, and fourth quarters of fiscal year 2007; 

(ii) on or after October 1, 1995 (or, at the option of a 

State, on or after an earlier date), in the case of each quarter of fiscal year 2008; and 

(iii) after October 1, 1989, in the case of each quarter of 

fiscal year 2009 and each quarter of any fiscal year thereafter; 

(B) who would be considered disabled under section 

1614(a)(3)(C) (as determined under title XVI for children but 

without regard to any income or asset eligibility requirements 

that apply under such title with respect to children); and 

(C) whose family income does not exceed such income level 

as the State establishes and does not exceed— 

(i) 300 percent of the poverty line (as defined in section 

2110(c)(5)) applicable to a family of the size involved; or 

(ii) such higher percent of such poverty line as a State 

may establish, except that— 

(I) any medical assistance provided to an individual 

whose family income exceeds 300 percent of such poverty line may only be provided with State funds; and 

(II) no Federal financial participation shall be provided under section 1903(a) for any medical assistance 

provided to such an individual. 

(2)(A) If an employer of a parent of an individual described in 

paragraph (1) offers family coverage under a group health plan (as 

defined in section 2791(a) of the Public Health Service Act), the 

State shall— 

(i) notwithstanding section 1906, require such parent to 

apply for, enroll in, and pay premiums for such coverage as a 

condition of such parent’s child being or remaining eligible for 

medical assistance under subsection (a)(10)(A)(ii)(XIX) if the 

parent is determined eligible for such coverage and the employer contributes at least 50 percent of the total cost of annual premiums for such coverage; and 

(ii) if such coverage is obtained— 

(I) subject to paragraph (2) of section 1916(h), reduce the 

premium imposed by the State under that section in an 

amount that reasonably reflects the premium contribution 

made by the parent for private coverage on behalf of a 

child with a disability; and 

(II) treat such coverage as a third party liability under 

subsection (a)(25). 


emcdonald on DSK67QTVN1PROD with HEARING
127 

(B) In the case of a parent to which subparagraph (A) applies, 

a State, notwithstanding section 1906 but subject to paragraph 

(1)(C)(ii), may provide for payment of any portion of the annual 

premium for such family coverage that the parent is required to 

pay. Any payments made by the State under this subparagraph 

shall be considered, for purposes of section 1903(a), to be payments 

for medical assistance. 

(dd) ELECTRONIC TRANSMISSION OF INFORMATION.—If the State 

agency determining eligibility for medical assistance under this 

title or child health assistance under title XXI verifies an element 

of eligibility based on information from an Express Lane Agency 

(as defined in subsection (e)(13)(F)), or from another public agency, 

then the applicant’s signature under penalty of perjury shall not be 

required as to such element. Any signature requirement for an application for medical assistance may be satisfied through an electronic signature, as defined in section 1710(1) of the Government 

Paperwork Elimination Act (44 U.S.C. 3504 note). The requirements of subparagraphs (A) and (B) of section 1137(d)(2) may be 

met through evidence in digital or electronic form. 

(ee)(1) For purposes of subsection (a)(46)(B)(ii), the requirements 

of this subsection with respect to an individual declaring to be a 

citizen or national of the United States for purposes of establishing 

eligibility under this title, are, in lieu of requiring the individual 

to present satisfactory documentary evidence of citizenship or nationality under section 1903(x) (if the individual is not described in 

paragraph (2) of that section), as follows: 

(A) The State submits the name and social security number 

of the individual to the Commissioner of Social Security as part 

of the program established under paragraph (2). 

(B) If the State receives notice from the Commissioner of Social Security that the name or social security number, or the 

declaration of citizenship or nationality, of the individual is inconsistent with information in the records maintained by the 

Commissioner— 

(i) the State makes a reasonable effort to identify and 

address the causes of such inconsistency, including 

through typographical or other clerical errors, by contacting the individual to confirm the accuracy of the name 

or social security number submitted or declaration of citizenship or nationality and by taking such additional actions as the Secretary, through regulation or other guidance, or the State may identify, and continues to provide 

the individual with medical assistance while making such 

effort; and 

(ii) in the case such inconsistency is not resolved under 

clause (i), the State— 

(I) notifies the individual of such fact; 

(II) provides the individual with a period of 90 days 

from the date on which the notice required under subclause (I) is received by the individual to either 

present satisfactory documentary evidence of citizenship or nationality (as defined in section 1903(x)(3)) or 

resolve the inconsistency with the Commissioner of Social Security (and continues to provide the individual 


emcdonald on DSK67QTVN1PROD with HEARING
128 

with medical assistance during such 90-day period); 

and 

(III) disenrolls the individual from the State plan 

under this title within 30 days after the end of such 

90-day period if no such documentary evidence is presented or if such inconsistency is not resolved. 

(2)(A) Each State electing to satisfy the requirements of this subsection for purposes of section 1902(a)(46)(B) shall establish a program under which the State submits at least monthly to the Commissioner of Social Security for comparison of the name and social 

security number, of each individual newly enrolled in the State 

plan under this title that month who is not described in section 

1903(x)(2) and who declares to be a United States citizen or national, with information in records maintained by the Commissioner. 

(B) In establishing the State program under this paragraph, the 

State may enter into an agreement with the Commissioner of Social Security— 

(i) to provide, through an on-line system or otherwise, for the 

electronic submission of, and response to, the information submitted under subparagraph (A) for an individual enrolled in 

the State plan under this title who declares to be citizen or national on at least a monthly basis; or 

(ii) to provide for a determination of the consistency of the 

information submitted with the information maintained in the 

records of the Commissioner through such other method as 

agreed to by the State and the Commissioner and approved by 

the Secretary, provided that such method is no more burdensome for individuals to comply with than any burdens that 

may apply under a method described in clause (i). 

(C) The program established under this paragraph shall provide 

that, in the case of any individual who is required to submit a social security number to the State under subparagraph (A) and who 

is unable to provide the State with such number, shall be provided 

with at least the reasonable opportunity to present satisfactory documentary evidence of citizenship or nationality (as defined in section 1903(x)(3)) as is provided under clauses (i) and (ii) of section 

1137(d)(4)(A) to an individual for the submittal to the State of evidence indicating a satisfactory immigration status. 

(3)(A) The State agency implementing the plan approved under 

this title shall, at such times and in such form as the Secretary 

may specify, provide information on the percentage each month 

that the inconsistent submissions bears to the total submissions 

made for comparison for such month. For purposes of this subparagraph, a name, social security number, or declaration of citizenship 

or nationality of an individual shall be treated as inconsistent and 

included in the determination of such percentage only if— 

(i) the information submitted by the individual is not consistent with information in records maintained by the Commissioner of Social Security; 

(ii) the inconsistency is not resolved by the State; 

(iii) the individual was provided with a reasonable period of 

time to resolve the inconsistency with the Commissioner of Social Security or provide satisfactory documentation of citizenVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00134 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
129 

ship status and did not successfully resolve such inconsistency; 

and 

(iv) payment has been made for an item or service furnished 

to the individual under this title. 

(B) If, for any fiscal year, the average monthly percentage determined under subparagraph (A) is greater than 3 percent— 

(i) the State shall develop and adopt a corrective plan to review its procedures for verifying the identities of individuals 

seeking to enroll in the State plan under this title and to identify and implement changes in such procedures to improve 

their accuracy; and 

(ii) pay to the Secretary an amount equal to the amount 

which bears the same ratio to the total payments under the 

State plan for the fiscal year for providing medical assistance 

to individuals who provided inconsistent information as the 

number of individuals with inconsistent information in excess 

of 3 percent of such total submitted bears to the total number 

of individuals with inconsistent information. 

(C) The Secretary may waive, in certain limited cases, all or part 

of the payment under subparagraph (B)(ii) if the State is unable to 

reach the allowable error rate despite a good faith effort by such 

State. 

(D) Subparagraphs (A) and (B) shall not apply to a State for a 

fiscal year if there is an agreement described in paragraph (2)(B) 

in effect as of the close of the fiscal year that provides for the submission on a real-time basis of the information described in such 

paragraph. 

(4) Nothing in this subsection shall affect the rights of any individual under this title to appeal any disenrollment from a State 

plan. 

(ff) Notwithstanding any other requirement of this title or any 

other provision of Federal or State law, a State shall disregard the 

following property from resources for purposes of determining the 

eligibility of an individual who is an Indian for medical assistance 

under this title: 

(1) Property, including real property and improvements, that 

is held in trust, subject to Federal restrictions, or otherwise 

under the supervision of the Secretary of the Interior, located 

on a reservation, including any federally recognized Indian 

Tribe’s reservation, pueblo, or colony, including former reservations in Oklahoma, Alaska Native regions established by the 

Alaska Native Claims Settlement Act, and Indian allotments 

on or near a reservation as designated and approved by the 

Bureau of Indian Affairs of the Department of the Interior. 

(2) For any federally recognized Tribe not described in paragraph (1), property located within the most recent boundaries 

of a prior Federal reservation. 

(3) Ownership interests in rents, leases, royalties, or usage 

rights related to natural resources (including extraction of natural resources or harvesting of timber, other plants and plant 

products, animals, fish, and shellfish) resulting from the exercise of federally protected rights. 

(4) Ownership interests in or usage rights to items not covered by paragraphs (1) through (3) that have unique religious, 

spiritual, traditional, or cultural significance or rights that 


emcdonald on DSK67QTVN1PROD with HEARING
130 

support subsistence or a traditional lifestyle according to applicable tribal law or custom. 

(gg) MAINTENANCE OF EFFORT.— 

(1) GENERAL REQUIREMENT TO MAINTAIN ELIGIBILITY STANDARDS UNTIL STATE EXCHANGE IS FULLY OPERATIONAL.—Subject 

to the succeeding paragraphs of this subsection, during the period that begins on the date of enactment of the Patient Protection and Affordable Care Act and ends on the date on which 

the Secretary determines that an Exchange established by the 

State under section 1311 of the Patient Protection and Affordable Care Act is fully operational, as a condition for receiving 

any Federal payments under section 1903(a) for calendar quarters occurring during such period, a State shall not have in effect eligibility standards, methodologies, or procedures under 

the State plan under this title or under any waiver of such 

plan that is in effect during that period, that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under the plan or waiver that are in effect 

on the date of enactment of the Patient Protection and Affordable Care Act. 

(2) CONTINUATION OF ELIGIBILITY STANDARDS FOR CHILDREN

UNTIL OCTOBER 1, 2019.—The requirement under paragraph (1) 

shall continue to apply to a State through September 30, 2019, 

with respect to the eligibility standards, methodologies, and 

procedures under the State plan under this title or under any 

waiver of such plan that are applicable to determining the eligibility for medical assistance of any child who is under 19 

years of age (or such higher age as the State may have elected). 

(3) NONAPPLICATION.—During the period that begins on January 1, 2011, and ends on December 31, 2013, the requirement 

under paragraph (1) shall not apply to a State with respect to 

nonpregnant, nondisabled adults who are eligible for medical 

assistance under the State plan or under a waiver of the plan 

at the option of the State and whose income exceeds 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved if, on or after December 

31, 2010, the State certifies to the Secretary that, with respect 

to the State fiscal year during which the certification is made, 

the State has a budget deficit, or with respect to the succeeding State fiscal year, the State is projected to have a budget deficit. Upon submission of such a certification to the Secretary, the requirement under paragraph (1) shall not apply to 

the State with respect to any remaining portion of the period 

described in the preceding sentence. 

(4) DETERMINATION OF COMPLIANCE.— 

(A) STATES SHALL APPLY MODIFIED ADJUSTED GROSS INCOME.—A State’s determination of income in accordance 

with subsection (e)(14) shall not be considered to be eligibility standards, methodologies, or procedures that are 

more restrictive than the standards, methodologies, or procedures in effect under the State plan or under a waiver 

of the plan on the date of enactment of the Patient Protection and Affordable Care Act for purposes of determining 


emcdonald on DSK67QTVN1PROD with HEARING
131 

compliance with the requirements of paragraph (1), (2), or 

(3). 

(B) STATES MAY EXPAND ELIGIBILITY OR MOVE WAIVERED

POPULATIONS INTO COVERAGE UNDER THE STATE PLAN.— With respect to any period applicable under paragraph (1), 

(2), or (3), a State that applies eligibility standards, methodologies, or procedures under the State plan under this 

title or under any waiver of the plan that are less restrictive than the eligibility standards, methodologies, or procedures, applied under the State plan or under a waiver of 

the plan on the date of enactment of the Patient Protection 

and Affordable Care Act, or that makes individuals who, 

on such date of enactment, are eligible for medical assistance under a waiver of the State plan, after such date of 

enactment eligible for medical assistance through a State 

plan amendment with an income eligibility level that is 

not less than the income eligibility level that applied under 

the waiver, or as a result of the application of subclause 

(VIII) of section 1902(a)(10)(A)(i), shall not be considered to 

have in effect eligibility standards, methodologies, or procedures that are more restrictive than the standards, 

methodologies, or procedures in effect under the State plan 

or under a waiver of the plan on the date of enactment of 

the Patient Protection and Affordable Care Act for purposes of determining compliance with the requirements of 

paragraph (1), (2), or (3). 

(hh)(1) A State may elect to phase-in the extension of eligibility 

for medical assistance to individuals described in subclause (XX) of 

subsection (a)(10)(A)(ii) based on the categorical group (including 

nonpregnant childless adults) or income, so long as the State does 

not extend such eligibility to individuals described in such subclause with higher income before making individuals described in 

such subclause with lower income eligible for medical assistance. 

(2) If an individual described in subclause (XX) of subsection 

(a)(10)(A)(ii) is the parent of a child who is under 19 years of age 

(or such higher age as the State may have elected) who is eligible 

for medical assistance under the State plan or under a waiver of 

such plan, the individual may not be enrolled under the State plan 

unless the individual’s child is enrolled under the State plan or 

under a waiver of the plan or is enrolled in other health insurance 

coverage. For purposes of the preceding sentence, the term ‘‘parent’’ 

includes an individual treated as a caretaker relative for purposes 

of carrying out section 1931. 

(ii)(1) Individuals described in this subsection are individuals— 

(A) whose income does not exceed an income eligibility 

level established by the State that does not exceed the 

highest income eligibility level established under the State 

plan under this title (or under its State child health plan 

under title XXI) for pregnant women; and 

(B) who are not pregnant. 

(2) At the option of a State, individuals described in this subsection may include individuals who, had individuals applied 

on or before January 1, 2007, would have been made eligible 

pursuant to the standards and processes imposed by that State 

for benefits described in clause (XVI) of the matter following 


emcdonald on DSK67QTVN1PROD with HEARING
132 

subparagraph (G) of section subsection (a)(10) pursuant to a 

waiver granted under section 1115. 

(3) At the option of a State, for purposes of subsection 

(a)(17)(B), in determining eligibility for services under this subsection, the State may consider only the income of the applicant or recipient. 

(jj) PRIMARY CARE SERVICES DEFINED.—For purposes of subsection (a)(13)(C), the term ‘‘primary care services’’ means— 

(1) evaluation and management services that are procedure 

codes (for services covered under title XVIII) for services in the 

category designated Evaluation and Management in the 

Healthcare Common Procedure Coding System (established by 

the Secretary under section 1848(c)(5) as of December 31, 2009, 

and as subsequently modified); and 

(2) services related to immunization administration for vaccines and toxoids for which CPT codes 90465, 90466, 90467, 

90468, 90471, 90472, 90473, or 90474 (as subsequently modified) apply under such System. 

(kk) PROVIDER AND SUPPLIER SCREENING, OVERSIGHT, AND REPORTING REQUIREMENTS.—For purposes of subsection (a)(77), the 

requirements of this subsection are the following: 

(1) SCREENING.—The State complies with the process for 

screening providers and suppliers under this title, as established by the Secretary under section 1886(j)(2). 

(2) PROVISIONAL PERIOD OF ENHANCED OVERSIGHT FOR NEW

PROVIDERS AND SUPPLIERS.—The State complies with procedures to provide for a provisional period of enhanced oversight 

for new providers and suppliers under this title, as established 

by the Secretary under section 1886(j)(3). 

(3) DISCLOSURE REQUIREMENTS.—The State requires providers and suppliers under the State plan or under a waiver 

of the plan to comply with the disclosure requirements established by the Secretary under section 1886(j)(4). 

(4) TEMPORARY MORATORIUM ON ENROLLMENT OF NEW PROVIDERS OR SUPPLIERS.— (A) TEMPORARY MORATORIUM IMPOSED BY THE SEC- RETARY.— 

(i) IN GENERAL.—Subject to clause (ii), the State 

complies with any temporary moratorium on the enrollment of new providers or suppliers imposed by the 

Secretary under section 1886(j)(6). 

(ii) EXCEPTION.—A State shall not be required to 

comply with a temporary moratorium described in 

clause (i) if the State determines that the imposition 

of such temporary moratorium would adversely impact 

beneficiaries’ access to medical assistance. 

(B) MORATORIUM ON ENROLLMENT OF PROVIDERS AND

SUPPLIERS.—At the option of the State, the State imposes, 

for purposes of entering into participation agreements with 

providers or suppliers under the State plan or under a 

waiver of the plan, periods of enrollment moratoria, or numerical caps or other limits, for providers or suppliers 

identified by the Secretary as being at high-risk for fraud, 

waste, or abuse as necessary to combat fraud, waste, or 

abuse, but only if the State determines that the imposition 


emcdonald on DSK67QTVN1PROD with HEARING
133 

of any such period, cap, or other limits would not adversely 

impact beneficiaries’ access to medical assistance. 

(5) COMPLIANCE PROGRAMS.—The State requires providers 

and suppliers under the State plan or under a waiver of the 

plan to establish, in accordance with the requirements of section 1866(j)(7), a compliance program that contains the core 

elements established under subparagraph (B) of that section 

1866(j)(7) for providers or suppliers within a particular industry or category. 

(6) REPORTING OF ADVERSE PROVIDER ACTIONS.—The State 

complies with the national system for reporting criminal and 

civil convictions, sanctions, negative licensure actions, and 

other adverse provider actions to the Secretary, through the 

Administrator of the Centers for Medicare & Medicaid Services, in accordance with regulations of the Secretary. 

(7) ENROLLMENT AND NPI OF ORDERING OR REFERRING PROVIDERS.—The State requires— 

(A) all ordering or referring physicians or other professionals to be enrolled under the State plan or under a 

waiver of the plan as a participating provider; and 

(B) the national provider identifier of any ordering or referring physician or other professional to be specified on 

any claim for payment that is based on an order or referral 

of the physician or other professional. 

(8) OTHER STATE OVERSIGHT.—Nothing in this subsection 

shall be interpreted to preclude or limit the ability of a State 

to engage in provider and supplier screening or enhanced provider and supplier oversight activities beyond those required 

by the Secretary. 

* * * * * * * 

TITLE XX—BLOCK GRANTS TO STATES FOR SOCIAL 

SERVICES AND ELDER JUSTICE 

Subtitle A—Block Grants to States for 

Social Services 

PURPOSES OF SUBTITLE; AUTHORIZATION OF APPROPRIATIONS

SEC. 2001. For the purposes of consolidating Federal assistance 

to States for social services into a single grant, increasing State 

flexibility in using social service grants, and encouraging each 

State, as far as practicable under the conditions in that State, to 

furnish services directed at the goals of— 

(1) achieving or maintaining economic self-support to prevent, reduce, or eliminate dependency; 

(2) achieving or maintaining self-sufficiency, including reduction or prevention of dependency; 

(3) preventing or remedying neglect, abuse, or exploitation of 

children and adults unable to protect their own interests, or 

preserving, rehabilitating or reuniting families; 

(4) preventing or reducing inappropriate institutional care by 

providing for community-based care, home-based care, or other 

forms of less intensive care; and 


emcdonald on DSK67QTVN1PROD with HEARING
134 

(5) securing referral or admission for institutional care when 

other forms of care are not appropriate, or providing services 

to individuals in institution, 

there are authorized to be appropriated for each fiscal year such 

sums as may be necessary to carry out the purposes of this title. 

PAYMENTS TO STATES

SEC. 2002. (a)(1) Each State shall be entitled to payment under 

this title for each fiscal year in an amount equal to its allotment 

for such fiscal year, to be used by such State for services directed 

at the goals set forth in section 2001, subject to the requirements 

of this title. 

(2) For purposes of paragraph (1)— 

(A) services which are directed at the goals set forth in section 2001 include, but are not limited to, child care services, 

protective services for children and adults, services for children 

and adults in foster care, services related to the management 

and maintenance of the home, day care services for adults, 

transportation services, family planning services, training and 

related services, employment services, information, referral, 

and counseling services, the preparation and delivery of meals, 

health support services and appropriate combinations of services designed to meet the special needs of children, the aged, 

the mentally retarded, the blind, the emotionally disturbed, the 

physically handicapped, and alcoholics and drug addicts; and 

(B) expenditures for such services may include expenditures 

for— 

(i) administration (including planning and evaluation); 

(ii) personnel training and retraining directly related to 

the provision of those services (including both short-and 

long-term training at educational institutions through 

grants to such institutions or by direct financial assistance 

to students enrolled in such institutions); and 

(iii) conferences or workshops, and training or retraining 

through grants to nonprofit organizations within the 

meaning of section 501(c)(3) of the Internal Revenue Code 

of 1954 or to individuals with social services expertise, or 

through financial assistance to individuals participating in 

such conferences, workshops, and training or retraining 

(and this clause shall apply with respect to all persons involved in the delivery of such services). 

(b) The Secretary shall make payments in accordance with section 6503 of title 31, United States Code, to each State from its allotment for use under this title. 

(c) Payments to a State from its allotment for any fiscal year 

must be expended by the State in such fiscal year or in the succeeding fiscal year. 

(d) A State may transfer up to 10 percent of its allotment under 

section 2003 for any fiscal year for its use for that year under other 

provisions of Federal law providing block grants for support of 

health services, health promotion and disease prevention activities, 

or low-income home energy assistance (or any combination of those 

activities). Amounts allotted to a State under any provisions of 

Federal law referred to in the preceding sentence and transferred 

by a State for use in carrying out the purposes of this title shall 


emcdonald on DSK67QTVN1PROD with HEARING
135 

be treated as if they were paid to the State under this title but 

shall not affect the computation of the State’s allotment under this 

title. The State shall inform the Secretary of any such transfer of 

funds. 

(e) A State may use a portion of the amounts described in subsection (a) for the purpose of purchasing technical assistance from 

public or private entities if the State determines that such assistance is required in developing, implementing, or administering programs funded under this title. 

(f) A State may use funds provided under this title to provide 

vouchers, for services directed at the goals set forth in section 2001, 

to families, including— 

(1) families who have become ineligible for assistance under 

a State program funded under part A of title IV by reason of 

a durational limit on the provision of such assistance; and 

(2) families denied cash assistance under the State program 

funded under part A of title IV for a child who is born to a 

member of the family who is— 

(A) a recipient of assistance under the program; or 

(B) a person who received such assistance at any time 

during the 10-month period ending with the birth of the 

child. 

ALLOTMENTS

SEC. 2003. (a) The allotment for any fiscal year to each of the jurisdictions of Puerto Rico, Guam, the Virgin Islands, and the 

Northern Mariana Islands shall be an amount which bears the 

same ratio to the amount specified in subsection (c) as the amount 

which was specified for allocation to the particular jurisdiction involved for the fiscal year 1981 under section 2002(a)(2)(C) of this 

Act (as in effect prior to the enactment of this section) bore to 

$2,900,000,000. The allotment for fiscal year 1989 and each succeeding fiscal year to American Samoa shall be an amount which 

bears the same ratio to the amount allotted to the Northern Mariana Islands for that fiscal year as the population of American 

Samoa bears to the population of the Northern Mariana Islands determined on the basis of the most recent data available at the time 

such allotment is determined. 

(b) The allotment for any fiscal year for each State other than 

the jurisdictions of Puerto Rico, Guam, the Virgin Islands, American Samoa, and the Northern Mariana Islands shall be an amount 

which bears the same ratio to— 

(1) the amount specified in subsection (c), reduced by 

(2) the total amount allotted to those jurisdictions for that 

fiscal year under subsection (a), as the population of that State 

bears to the population of all the States (other than Puerto 

Rico, Guam, the Virgin Islands, American Samoa, and the 

Northern Mariana Islands) as determined by the Secretary (on 

the basis of the most recent data available from the Department of Commerce) and promulgated prior to the first day of 

the third month of the preceding fiscal year. 

(c) The amount specified for purposes of subsections (a) and (b) 

shall be— 

(1) $2,400,000,000 for the fiscal year 1982; 

(2) $2,450,000,000 for the fiscal year 1983; 


emcdonald on DSK67QTVN1PROD with HEARING
136 

(3) $2,700,000,000 for the fiscal years 1984, 1985, 1986, 

1987, and 1989; 

(4) $2,750,000,000 for the fiscal year 1988; 

(5) $2,800,000,000 for each of the fiscal years 1990 through 

1995; 

(6) $2,381,000,000 for the fiscal year 1996; 

(7) $2,380,000,000 for the fiscal year 1997; 

(8) $2,299,000,000 for the fiscal year 1998; 

(9) $2,380,000,000 for the fiscal year 1999; 

(10) $2,380,000,000 for the fiscal year 2000; and 

(11) $1,700,000,000 for the fiscal year 2001 and each fiscal 

year thereafter. 

STATE ADMINISTRATION

SEC. 2004. Prior to expenditure by a State of payments made to 

it under section 2002 for any fiscal year, the State shall report on 

the intended use of the payments the State is to receive under this 

title, including information on the types of activities to be supported and the categories or characteristics of individuals to be 

served. The report shall be transmitted to the Secretary and made 

public within the State in such manner as to facilitate comment by 

any person (including any Federal or other public agency) during 

development of the report and after its completion. The report shall 

be revised throughout the year as may be necessary to reflect substantial changes in the activities assisted under this title, and any 

revision shall be subject to the requirements of the previous sentence. 

LIMITATIONS ON USE OF GRANTS

SEC. 2005. (a) Except as provided in subsection (b), grants made 

under this title may not be used by the State, or by any other person with which the State makes arrangements to carry out the purposes of this title— 

(1) for the purchase or improvement of land, or the purchase, 

construction, or permanent improvement (other than minor remodeling) of any building or other facility; 

(2) for the provision of cash payments for costs of subsistence 

or for the provision of room and board (other than costs of subsistence during rehabilitation, room and board provided for a 

short term as an integral but subordinate part of a social service, or temporary emergency shelter provided as a protective 

service); 

(3) for payment of the wages of any individual as a social 

service (other than payment of the wages of welfare recipients 

employed in the provision of child day care services); 

(4) for the provision of medical care (other than family planning services, rehabilitation services, or initial detoxification of 

an alcoholic or drug dependent individual) unless it is an integral but subordinate part of a social service for which grants 

may be used under this title; 

(5) for social services (except services to an alcoholic or drug 

dependent individual or rehabilitation services) provided in 

and by employees of any hospital, skilled nursing facility, inVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00142 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
137 

termediate care facility, or prison, to any individual living in 

such institution; 

(6) for the provision of any educational service which the 

State makes generally available to its residents without cost 

and without regard to their income; 

(7) for any child day care services unless such services meet 

applicable standards of State and local law; 

(8) for the provision of cash payments as a service (except as 

otherwise provided in this section); 

(9) for payment for any item or service (other than an emergency item or service) furnished— 

(A) by an individual or entity during the period when 

such individual or entity is excluded under this title or 

title V, XVIII, or XIX pursuant to section 1128, 1128A, 

1156, or 1842(j)(2), or 

(B) at the medical direction or on the prescription of a 

physician during the period when the physician is excluded under this title or title V, XVIII, or XIX pursuant 

to section 1128, 1128A, 1156, or 1842(j)(2) and when the 

person furnishing such item or service knew or had reason 

to know of the exclusion (after a reasonable time period 

after reasonable notice has been furnished to the person); 

or 

(10) in a manner inconsistent with the Assisted Suicide 

Funding Restriction Act of 1997. 

(b) The Secretary may waive the limitation contained in subsection (a)(1) and (4) upon the State’s request for such a waiver if 

he finds that the request describes extraordinary circumstances to 

justify the waiver and that permitting the waiver will contribute to 

the State’s ability to carry out the purposes of this title. 

REPORTS AND AUDITS

SEC. 2006. (a) Each State shall prepare reports on its activities 

carried out with funds made available (or transferred for use) 

under this title. Reports shall be prepared annually, covering the 

most recently completed fiscal year, and shall be in such form and 

contain such information (including but not limited to the information specified in subsection (c)) as the State finds necessary to provide an accurate description of such activities, to secure a complete 

record of the purposes for which funds were spent, and to determine the extent to which funds were spent in a manner consistent 

with the reports required by section 2004. The State shall make 

copies of the reports required by this section available for public inspection within the State and shall transmit a copy to the Secretary. Copies shall also be provided, upon request, to any interested public agency, and each such agency may provide its views 

on these reports to the Congress. 

(b) Each State shall, not less often than every two years, audit 

its expenditures from amounts received (or transferred for use) 

under this title. Such State audits shall be conducted by an entity 

independent of any agency administering activities funded under 

this title, in accordance with generally accepted auditing principles. 

Within 30 days following the completion of each audit, the State 

shall submit a copy of that audit to the legislature of the State and 

to the Secretary. Each State shall repay to the United States 


emcdonald on DSK67QTVN1PROD with HEARING
138 

amounts ultimately found not to have been expended in accordance 

with this title, or the Secretary may offset such amounts against 

any other amount to which the State is or may become entitled 

under this title. 

(c) Each report prepared and transmitted by a State under subsection (a) shall set forth (with respect to the fiscal year covered 

by the report)— 

(1) the number of individuals who received services paid for 

in whole or in part with funds made available under this title, 

showing separately the number of children and the number of 

adults who received such services, and broken down in each 

case to reflect the types of services and circumstances involved; 

(2) the amount spent in providing each such type of service, 

showing separately for each type of service the amount spent 

per child recipient and the amount spent per adult recipient; 

(3) the criteria applied in determining eligibility for services 

(such as income eligibility guidelines, sliding fee scales, the effect of public assistance benefits, and any requirements for enrollment in school or training programs); and 

(4) the methods by which services were provided, showing 

separately the services provided by public agencies and those 

provided by private agencies, and broken down in each case to 

reflect the types of services and circumstances involved. 

The Secretary shall establish uniform definitions of services for use 

by the States in preparing the information required by this subsection, and make such other provision as may be necessary or appropriate to assure that compliance with the requirements of this 

subsection will not be unduly burdensome on the States. 

(d) For other provisions requiring States to account for Federal 

grants, see section 6503 of title 31, United States Code. 

SEC. 2007. ADDITIONAL GRANTS. 

(a) ENTITLEMENT.— 

(1) IN GENERAL.—In addition to any payment under section 

2002, each State shall be entitled to— 

(A) 2 grants under this section for each qualified empowerment zone in the State; and 

(B) 1 grant under this section for each qualified enterprise community in the State. 

(2) AMOUNT OF GRANTS.— 

(A) EMPOWERMENT GRANTS.—The amount of each grant 

to a State under this section for a qualified empowerment 

zone shall be— 

(i) if the zone is designated in an urban area, 

$50,000,000, multiplied by that proportion of the population of the zone that resides in the State; or 

(ii) if the zone is designated in a rural area, 

$20,000,000, multiplied by each proportion. 

(B) ENTERPRISE GRANTS.—The amount of the grant to a 

State under this section for a qualified enterprise community shall be 1/95 of $280,000,000, multiplied by that proportion of the population of the community that resides in 

the State. 

(C) POPULATION DETERMINATIONS.—The Secretary shall 

make population determinations for purposes of this paraVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00144 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
139 

graph based on the most recent decennial census data 

available. 

(3) TIMING OF GRANTS.— (A) QUALIFIED EMPOWERMENT ZONES.—With respect to 

each qualified empowerment zone, the Secretary shall 

make— 

(i) 1 grant under this section to each State in which 

the zone lies, on the date of the designation of the 

zone under part I of subchapter U of chapter 1 of the 

Internal Revenue Code of 1986; and 

(ii) 1 grant under this section to each such State, on 

the 1st day of the 1st fiscal year that begins after the 

date of the designation. 

(B) QUALIFIED ENTERPRISE COMMUNITIES.—With respect 

to each qualified enterprise community, the Secretary shall 

make 1 grant under this section to each State in which the 

community lies, on the date of the designation of the community under part I of subchapter U of chapter 1 of the 

Internal Revenue Code of 1986. 

(4) FUNDING.—$1,000,000,000 shall be made available to the 

Secretary for grants under this section. 

(b) PROGRAM OPTIONS.—Notwithstanding section 2005(a): 

(1) In order to prevent and remedy the neglect and abuse of 

children, a State may use amounts paid under this section to 

make grants to, or enter into contracts with, entities to provide 

residential or nonresidential drug and alcohol prevention and 

treatment programs that offer comprehensive services for pregnant women and mothers, and their children. 

(2) In order to prevent to assist disadvantaged adults and 

youths in achieving and maintaining self-sufficiency, a State 

may use amounts paid under this section to make grants to, 

or enter into contracts with— 

(A) organizations operated for profit or not for profit, for 

the purpose of training and employing disadvantaged 

adults and youths in construction, rehabilitation, or improvement of affordable housing, public infrastructure, and 

community facilities; and 

(B) nonprofit organizations and community or junior colleges, for the purpose of enabling such entities to provide 

short-term training courses in entrepreneurism and selfemployment, and other training that will promote individual self-sufficiency and the interests of the community. 

(3) A State may use amounts paid under this section to make 

grants to, or enter into contracts with, nonprofit communitybased organizations to enable such organizations to provide activities designed to promote and protect the interests of children and families, outside of school hours, including keeping 

schools open during evenings and weekends for mentoring and 

study. 

(4) In order to assist disadvantaged adults and youths in 

achieving and maintain economic self-support, a State may use 

amounts paid under this section to— 

(A) fund services designed to promote community and 

economic development in qualified empowerment zones 

and qualified enterprise communities, such as skills trainVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00145 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
140 

ing, job counseling, transportation services, housing counseling, financial management, and business counseling; 

(B) assist in emergency and transitional shelter for disadvantaged families and individuals; or 

(C) support programs that promote home ownership, 

education, or other routes to economic independence for 

low-income families and individuals. 

(c) USE OF GRANTS.— (1) IN GENERAL.—Subject to subsection (d) of this section, 

each State that receives a grant under this section with respect 

to an area shall use the grant— 

(A) for services directed only at the goals set forth in 

paragraphs (1), (2), and (3) of section 2001; 

(B) in accordance with the strategic plan for the area; 

and 

(C) for activities that benefit residents of the area for 

which the grant is made. 

(2) TECHNICAL ASSISTANCE.—A State may use a portion of 

any grant made under this section in the manner described in 

section 2002(e). 

(d) REMITTANCE OF CERTAIN AMOUNTS.— (1) PORTION OF GRANT UPON TERMINATION OF DESIGNATION.— Each State to which an amount is paid under this subsection 

during a fiscal year with respect to an area the designation of 

which under part I of subchapter U of chapter 1 of the Internal 

Revenue Code of 1986 ends before the end of the fiscal year 

shall remit to the Secretary an amount equal to the total of the 

amounts so paid with respect to the area, multiplied by that 

proportion of the fiscal year remaining after the designation 

ends. 

(2) AMOUNTS PAID TO THE STATES AND NOT OBLIGATED WITHIN

2 YEARS.—Each State shall remit to the Secretary any amount 

paid to the State under this section that is not obligated by the 

end of the 2-year period that begins with the date of the payment. 

(e) REALLOCATION OF REMAINING FUNDS.— (1) REMITTED AMOUNTS.—The amount specified in section 

2003(c) for any fiscal year is hereby increased by the total of 

the amounts remitted during the fiscal year pursuant to subsection (d) of this section. 

(2) AMOUNTS NOT PAID TO THE STATES.—The amount specified in section 2003(c) for fiscal year 1998 is hereby increased 

by the amount made available for grants under this section 

that has not been paid to any State by the end of fiscal year 

1997. 

(f) DEFINITIONS.—As used in this section: 

(1) QUALIFIED EMPOWERMENT ZONE.—The term ‘‘qualified 

empowerment zone’’ means, with respect to a State, an area— 

(A) which has been designated (other than by the Secretary of the Interior) as an empowerment zone under part 

I of subchapter U of chapter 1 of the Internal Revenue 

Code of 1986; 

(B) with respect to which the designation is in effect; 

(C) the strategic plan for which is a qualified plan; and 

(D) part or all of which is in the State. 


emcdonald on DSK67QTVN1PROD with HEARING
141 

(2) QUALIFIED ENTERPRISE COMMUNITY.—The term ‘‘qualified 

enterprise community’’ means, with respect to a State, an 

area— 

(A) which has been designated (other than by the Secretary of the Interior) as an enterprise community under 

part I of subchapter U of chapter 1 of the Internal Revenue Code of 1986; 

(B) with respect to which the designation is in effect; 

(C) the strategic plan for which is a qualified plan; and 

(D) part or all of which is in the State. 

(3) STRATEGIC PLAN.—The term ‘‘strategic plan’’ means, with 

respect to an area, the plan contained in the application for 

designation of the area under part I of subchapter U of chapter 

1 of the Internal Revenue Code of 1986. 

(4) QUALIFIED PLAN.—The term ‘‘qualified plan’’ means, with 

respect to an area, a plan that— 

(A) includes a detailed description of the activities proposed for the area that are to be funded with amounts provided under this section; 

(B) contains a commitment that the amounts provided 

under this section to any State for the area will not be 

used to supplant Federal or non-Federal funds for services 

and activities which promote the purposes of this section; 

(C) was developed in cooperation with the local government or governments with jurisdiction over the area; and 

(D) to the extent that any State will not use the 

amounts provided under this section for the area in the 

manner described in subsection (b), explains the reasons 

why not. 

(5) RURAL AREA.—The term ‘‘rural area’’ has the meaning 

given such term in section 1393(a)(2) of the Internal Revenue 

Code of 1986. 

(6) URBAN AREA.—The term ‘‘urban area’’ has the meaning 

given such term in section 1393(a)(3) of the Internal Revenue 

Code of 1986. 

* * * * * * * 

FOOD AND NUTRITION ACT OF 2008 

* * * * * * * 

ADMINISTRATIVE COST-SHARING AND QUALITY CONTROL

SEC. 16. (a) Subject to subsection (k), the Secretary is authorized 

to pay to each State agency an amount equal to 50 per centum of 

all administrative costs involved in each State agency’s operation 

of the supplemental nutrition assistance program, which costs shall 

include, but not be limited to, the cost of (1) the certification of applicant households, (2) the acceptance, storage, protection, control, 

and accounting of benefits after their delivery to receiving points 

within the State, (3) the issuance of benefits to all eligible households, (4) informational activities relating to the supplemental nutrition assistance program, including those undertaken under section 11(e)(1)(A), but not including recruitment activities designed to 

persuade an individual to apply forprogram benefits or that proVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00147 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
142 

mote the program through television,radio, or billboard advertisements, (5) fair hearings, (6) automated data processing and information retrieval systems subject to the conditions set forth in subsection (g), (7) supplemental nutrition assistance program investigations and prosecutions, and (8) implementing and operating the 

immigration status verification system established under section 

1137(d) of the Social Security Act (42 U.S.C. 1320b–7(d)): Provided, 

That the Secretary is authorized at the Secretary’s discretion to 

pay any State agency administering the supplemental nutrition assistance program on all or part of an Indian reservation under section 11(d) of this Act or in a Native village within the State of Alaska identified in section 11(b) of Public Law 92–203, such amounts 

for administrative costs as the Secretary determines to be necessary for effective operation of the supplemental nutrition assistance program, as well as to permit each State to retain 35 percent 

of the value of all funds or allotments recovered or collected pursuant to sections 6(b) and 13(c) and 20 percent of the value of any 

other funds or allotments recovered or collected, except the value 

of funds or allotments recovered or collected that arise from an 

error of a State agency. The officials responsible for making determinations of ineligibility under this Act shall not receive or benefit 

from revenues retained by the State under the provisions of this 

subsection. 

(b) WORK SUPPLEMENTATION OR SUPPORT PROGRAM.— 

(1) DEFINITION OF WORK SUPPLEMENTATION OR SUPPORT PROGRAM.—In this subsection, the term ‘‘work supplementation or 

support program’’ means a program under which, as determined by the Secretary, public assistance (including any benefits provided under a program established by the State and the 

supplemental nutrition assistance program) is provided to an 

employer to be used for hiring and employing a public assistance recipient who was not employed by the employer at the 

time the public assistance recipient entered the program. 

(2) PROGRAM.—A State agency may elect to use an amount 

equal to the allotment that would otherwise be issued to a 

household under the supplemental nutrition assistance program, but for the operation of this subsection, for the purpose 

of subsidizing or supporting a job under a work supplementation or support program established by the State. 

(3) PROCEDURE.—If a State agency makes an election under 

paragraph (2) and identifies each household that participates 

in the supplemental nutrition assistance program that contains 

an individual who is participating in the work supplementation 

or support program— 

(A) the Secretary shall pay to the State agency an 

amount equal to the value of the allotment that the household would be eligible to receive but for the operation of 

this subsection; 

(B) the State agency shall expend the amount received 

under subparagraph (A) in accordance with the work supplementation or support program in lieu of providing the 

allotment that the household would receive but for the operation of this subsection; 

(C) for purposes of— 


emcdonald on DSK67QTVN1PROD with HEARING
143 

(i) sections 5 and 8(a), the amount received under 

this subsection shall be excluded from household income and resources; and 

(ii) section 8(b), the amount received under this subsection shall be considered to be the value of an allotment provided to the household; and 

(D) the household shall not receive an allotment from 

the State agency for the period during which the member 

continues to participate in the work supplementation or 

support program. 

(4) OTHER WORK REQUIREMENTS.—No individual shall be excused, by reason of the fact that a State has a work supplementation or support program, from any work requirement 

under section 6(d), except during the periods in which the individual is employed under the work supplementation or support 

program. 

(5) LENGTH OF PARTICIPATION.—A State agency shall provide 

a description of how the public assistance recipients in the program shall, within a specific period of time, be moved from 

supplemented or supported employment to employment that is 

not supplemented or supported. 

(6) DISPLACEMENT.—A work supplementation or support program shall not displace the employment of individuals who are 

not supplemented or supported. 

(c) QUALITY CONTROL SYSTEM.— (1) IN GENERAL.— (A) SYSTEM.— (i) IN GENERAL.—In carrying out the supplemental 

nutrition assistance program, the Secretary shall carry 

out a system that enhances payment accuracy and improves administration by establishing fiscal incentives 

that require State agencies with high payment error 

rates to share in the cost of payment error. 

(ii) TOLERANCE LEVEL FOR EXCLUDING SMALL ERRORS.—The Secretary shall set the tolerance level for 

excluding small errors for the purposes of this subsection— 

(I) for fiscal year 2014, at an amount not great- er than $37; and 

(II) for each fiscal year thereafter, the amount 

specified in subclause (I) adjusted by the percentage by which the thrifty food plan is adjusted 

under section 3(u)(4) between June 30, 2013, and 

June 30 of the immediately preceding fiscal year. 

(B) ADJUSTMENT OF FEDERAL SHARE OF ADMINISTRATIVE

COSTS FOR FISCAL YEARS BEFORE FISCAL YEAR 2003.— 

(i) IN GENERAL.—Subject to clause (ii), with respect 

to any fiscal year before fiscal year 2003, the Secretary 

shall adjust a State agency’s federally funded share of 

administrative costs under subsection (a), other than 

the costs already shared in excess of 50 percent under 

the proviso in the first sentence of subsection (a) or 

under subsection (g), by increasing that share of all 

such administrative costs by 1 percentage point to a 

maximum of 60 percent of all such administrative 


emcdonald on DSK67QTVN1PROD with HEARING
144 

costs for each full 1⁄10 of a percentage point by which 

the payment error rate is less than 6 percent. 

(ii) LIMITATION.—Only States with a rate of invalid 

decisions in denying eligibility that is less than a nationwide percentage that the Secretary determines to 

be reasonable shall be entitled to the adjustment 

under clause (i). 

(C) ESTABLISHMENT OF LIABILITY AMOUNT FOR FISCAL

YEAR 2003 AND THEREAFTER.—With respect to fiscal year 

2004 and any fiscal year thereafter for which the Secretary 

determines that, for the second or subsequent consecutive 

fiscal year, a 95 percent statistical probability exists that 

the payment error rate of a State agency exceeds 105 percent of the national performance measure for payment 

error rates announced under paragraph (6), the Secretary 

shall establish an amount for which the State agency may 

be liable (referred to in this paragraph as the ‘‘liability 

amount’’) that is equal to the product obtained by multiplying— 

(i) the value of all allotments issued by the State 

agency in the fiscal year; 

(ii) the difference between— 

(I) the payment error rate of the State agency; 

and 

(II) 6 percent; and 

(iii) 10 percent. 

(D) AUTHORITY OF SECRETARY WITH RESPECT TO LIABIL- ITY AMOUNT.—With respect to the liability amount established for a State agency under subparagraph (C) for any 

fiscal year, the Secretary shall— 

(i) 

(I) require that a portion, not to exceed 50 percent, 

of the liability amount established for the fiscal year 

be used by the State agency for new investment, approved by the Secretary, to improve administration by 

the State agency of the supplemental nutrition assistance program (referred to in this paragraph as the 

‘‘new investment amount’’), which new investment 

amount shall not be matched by Federal funds; 

(II) designate a portion, not to exceed 50 percent, of 

the amount established for the fiscal year for payment 

to the Secretary in accordance with subparagraph (E) 

(referred to in this paragraph as the ‘‘at-risk amount’’); 

or 

(III) take any combination of the actions described 

in subclauses (I) and (II); or 

(ii) make the determinations described in clause (i) 

and enter into a settlement with the State agency, 

only with respect to any new investment amount, before the end of the fiscal year in which the liability 

amount is determined under subparagraph (C). 

(E) PAYMENT OF AT-RISK AMOUNT FOR CERTAIN STATES.— (i) IN GENERAL.—A State agency shall pay to the 

Secretary the at-risk amount designated under subparagraph (D)(i)(II) for any fiscal year in accordance 


emcdonald on DSK67QTVN1PROD with HEARING
145 

with clause (ii), if, with respect to the immediately following fiscal year, a liability amount has been established for the State agency under subparagraph (C). 

(ii) METHOD OF PAYMENT OF AT-RISK AMOUNT.— (I) REMISSION TO THE SECRETARY.—In the case 

of a State agency required to pay an at-risk 

amount under clause (i), as soon as practicable 

after completion of all administrative and judicial 

reviews with respect to that requirement to pay, 

the chief executive officer of the State shall remit 

to the Secretary the at-risk amount required to be 

paid. 

(II) ALTERNATIVE METHOD OF COLLECTION.— 

(aa) IN GENERAL.—If the chief executive officer of the State fails to make the payment 

under subclause (I) within a reasonable period 

of time determined by the Secretary, the Secretary may reduce any amount due to the 

State agency under any other provision of this 

section by the amount required to be paid 

under clause (i). 

(bb) ACCRUAL OF INTEREST.—During any period of time determined by the Secretary 

under item (aa), interest on the payment 

under subclause (I) shall not accrue under 

section 13(a)(2). 

(F) USE OF PORTION OF LIABILITY AMOUNT FOR NEW IN- VESTMENT.— (i) REDUCTION OF OTHER AMOUNTS DUE TO STATE

AGENCY.—In the case of a State agency that fails to 

comply with a requirement for new investment under 

subparagraph (D)(i)(I) or clause (iii)(I), the Secretary 

may reduce any amount due to the State agency under 

any other provision of this section by the portion of the 

liability amount that has not been used in accordance 

with that requirement. 

(ii) EFFECT OF STATE AGENCY’S WHOLLY PREVAILING

ON APPEAL.—If a State agency begins required new investment under subparagraph (D)(i)(I), the State agency appeals the liability amount of the State agency, 

and the determination by the Secretary of the liability 

amount is reduced to $0 on administrative or judicial 

review, the Secretary shall pay to the State agency an 

amount equal to 50 percent of the new investment 

amount that was included in the liability amount subject to the appeal. 

(iii) EFFECT OF SECRETARY’S WHOLLY PREVAILING ON

APPEAL.—If a State agency does not begin required 

new investment under subparagraph (D)(i)(I), the 

State agency appeals the liability amount of the State 

agency, and the determination by the Secretary of the 

liability amount is wholly upheld on administrative or 

judicial review, the Secretary shall— 

(I) require all or any portion of the new investment amount to be used by the State agency for 


emcdonald on DSK67QTVN1PROD with HEARING
146 

new investment, approved by the Secretary, to improve administration by the State agency of the 

supplemental nutrition assistance program, which 

amount shall not be matched by Federal funds; 

and 

(II) require payment of any remaining portion of 

the new investment amount in accordance with 

subparagraph (E)(ii). 

(iv) EFFECT OF NEITHER PARTY’S WHOLLY PREVAILING

ON APPEAL.—The Secretary shall promulgate regulations regarding obligations of the Secretary and the 

State agency in a case in which the State agency appeals the liability amount of the State agency and neither the Secretary nor the State agency wholly prevails. 

(G) CORRECTIVE ACTION PLANS.—The Secretary shall foster management improvements by the States by requiring 

State agencies, other than State agencies with payment 

error rates of less than 6 percent, to develop and implement corrective action plans to reduce payment errors. 

(2) As used in this section— 

(A) the term ‘‘payment error rate’’ means the sum of the 

point estimates of an overpayment error rate and an underpayment error rate determined by the Secretary from data collected in a probability sample of participating households; 

(B) the term ‘‘overpayment error rate’’ means the percentage 

of the value of all allotments issued in a fiscal year by a State 

agency that are either— 

(i) issued to households that fail to meet basic program 

eligibility requirements; or 

(ii) overissued to eligible households; and 

(C) the term ‘‘underpayment error rate’’ means the ratio of 

the value of allotments underissued to recipient households to 

the total value of allotments issued in a fiscal year by a State 

agency. 

(3) The following errors may be measured for management purposes but shall not be included in the payment error rate: 

(A) Any errors resulting in the application of new regulations 

promulgated under this Act during the first 120 days from the 

required implementation date for such regulations. 

(B) Errors resulting from the use by a State agency of correctly processed information concerning households or individuals received from Federal agencies or from actions based on 

policy information approved or disseminated, in writing, by the 

Secretary or the Secretary’s designee. 

(4) REPORTING REQUIREMENTS.—The Secretary may require a 

State agency to report any factors that the Secretary considers 

necessary to determine a State agency’s payment error rate, liability amount or new investment amount under paragraph 

(1), or performance under the performance measures under 

subsection (d). If a State agency fails to meet the reporting requirements established by the Secretary, the Secretary shall 

base the determination on all pertinent information available 

to the Secretary. 


emcdonald on DSK67QTVN1PROD with HEARING
147 

(5) PROCEDURES.—To facilitate the implementation of this 

subsection, each State agency shall expeditiously submit to the 

Secretary data concerning the operations of the State agency 

in each fiscal year sufficient for the Secretary to establish the 

State agency’s payment error rate, liability amount or new investment amount under paragraph (1), or performance under 

the performance measures under subsection (d). The Secretary 

shall initiate efforts to collect the amount owed by the State 

agency as a claim established under paragraph (1) for a fiscal 

year, subject to the conclusion of any formal or informal appeal 

procedure and administrative or judicial review under section 

14 (as provided for in paragraph (7)), before the end of the fiscal year following such fiscal year. 

(6) NATIONAL PERFORMANCE MEASURE FOR PAYMENT ERROR

RATES.— 

(A) ANNOUNCEMENT.—At the time the Secretary makes 

the notification to State agencies of their error rates, the 

Secretary shall also announce a national performance 

measure that shall be the sum of the products of each 

State agency’s error rate as developed for the notifications 

under paragraph (8) times that State agency’s proportion 

of the total value of national allotments issued for the fiscal year using the most recent issuance data available at 

the time of the notifications issued pursuant to paragraph 

(8). 

(B) USE OF ALTERNATIVE MEASURE OF STATE ERROR.— 

Where a State fails to meet reporting requirements pursuant to paragraph (4), the Secretary may use another measure of a State’s error developed pursuant to paragraph (8), 

to develop the national performance measure. 

(C) USE OF NATIONAL PERFORMANCE MEASURE.—The announced national performance measure shall be used in 

determining the liability amount of a State under paragraph (1)(C) for the fiscal year whose error rates are being 

announced under paragraph (8). 

(D) NO ADMINISTRATIVE OR JUDICIAL REVIEW.—The national performance measure announced under this paragraph shall not be subject to administrative or judicial review. 

(7) ADMINISTRATIVE AND JUDICIAL REVIEW.— 

(A) IN GENERAL.—Except as provided in subparagraphs 

(B) and (C), if the Secretary asserts a financial claim 

against or establishes a liability amount with respect to a 

State agency under paragraph (1), the State may seek administrative and judicial review of the action pursuant to 

section 14. 

(B) DETERMINATION OF PAYMENT ERROR RATE.—With respect to any fiscal year, a determination of the payment 

error rate of a State agency or a determination whether 

the payment error rate exceeds 105 percent of the national 

performance measure for payment error rates shall be subject to administrative or judicial review only if the Secretary establishes a liability amount with respect to the 

fiscal year under paragraph (1)(C). 


emcdonald on DSK67QTVN1PROD with HEARING
148 

(C) AUTHORITY OF SECRETARY WITH RESPECT TO LIABILITY

AMOUNT.—An action by the Secretary under subparagraph 

(D) or (F)(iii) of paragraph (1) shall not be subject to administrative or judicial review. 

(8)(A) This paragraph applies to the determination of whether a 

payment is due by a State agency for a fiscal year under paragraph 

(1). 

(B) Not later than the first May 31 after the end of the fiscal 

year referred to in subparagraph (A), the case review and all arbitrations of State-Federal difference cases shall be completed. 

(C) Not later than the first June 30 after the end of the fiscal 

year referred to in subparagraph (A), the Secretary shall— 

(i) determine final error rates, the national average payment 

error rate, and the amounts of payment claimed against State 

agencies or liability amount established with respect to State 

agencies; 

(ii) notify State agencies of the payment claims or liability 

amounts; and 

(iii) provide a copy of the document providing notification 

under clause (ii) to the chief executive officer and the legislature of the State. 

(D) A State agency desiring to appeal a payment claim or liability amount determined under subparagraph (C) shall submit to an 

administrative law judge— 

(i) a notice of appeal, not later than 10 days after receiving 

a notice of the claim or liability amount; and 

(ii) evidence in support of the appeal of the State agency, not 

later than 60 days after receiving a notice of the claim or liability amount. 

(E) Not later than 60 days after a State agency submits evidence 

in support of the appeal, the Secretary shall submit responsive evidence to the administrative law judge to the extent such evidence 

exists. 

(F) Not later than 30 days after the Secretary submits responsive 

evidence, the State agency shall submit rebuttal evidence to the administrative law judge to the extent such evidence exists. 

(G) The administrative law judge, after an evidentiary hearing, 

shall decide the appeal— 

(i) not later than 60 days after receipt of rebuttal evidence 

submitted by the State agency; or 

(ii) if the State agency does not submit rebuttal evidence, not 

later than 90 days after the State agency submits the notice 

of appeal and evidence in support of the appeal. 

(H) In considering a claim or liability amount under this paragraph, the administrative law judge shall consider all grounds for 

denying the claim or liability amount, in whole or in part, including 

the contention of a State agency that the claim or liability amount 

should be waived, in whole or in part, for good cause. 

(I) The deadlines in subparagraphs (D), (E), (F), and (G) shall be 

extended by the administrative law judge for cause shown. 

(9) As used in this subsection, the term ‘‘good cause’’ includes— 

(A) a natural disaster or civil disorder that adversely affects 

supplemental nutrition assistance program operations; 

(B) a strike by employees of a State agency who are necessary for the determination of eligibility and processing of 


emcdonald on DSK67QTVN1PROD with HEARING
149 

case changes under the supplemental nutrition assistance program; 

(C) a significant growth in the caseload under the supplemental nutrition assistance program in a State prior to or during a fiscal year, such as a 15 percent growth in caseload; 

(D) a change in the supplemental nutrition assistance program or other Federal or State program that has a substantial 

adverse impact on the management of the supplemental nutrition assistance program of a State; and 

(E) a significant circumstance beyond the control of the State 

agency. 

(d) BONUSES FOR STATES THAT DEMONSTRATE HIGH OR MOST IMPROVED PERFORMANCE.— 

(1) FISCAL YEARS 2003 AND 2004.— 

(A) GUIDANCE.—With respect to fiscal years 2003 and 

2004, the Secretary shall establish, in guidance issued to 

State agencies not later than October 1, 2002— 

(i) performance criteria relating to— 

(I) actions taken to correct errors, reduce rates 

of error, and improve eligibility determinations; 

and 

(II) other indicators of effective administration 

determined by the Secretary; and 

(ii) standards for high and most improved performance to be used in awarding performance bonus payments under subparagraph (B)(ii). 

(B) PERFORMANCE BONUS PAYMENTS.—With respect to 

each of fiscal years 2003 and 2004, the Secretary shall— 

(i) measure the performance of each State agency 

with respect to the criteria established under subparagraph (A)(i); and 

(ii) subject to paragraph (3), award performance 

bonus payments in the following fiscal year, in a total 

amount of $48,000,000 for each fiscal year, to State 

agencies that meet standards for high or most improved performance established by the Secretary 

under subparagraph (A)(ii). 

(2) FISCAL YEARS 2005 AND THEREAFTER.— 

(A) REGULATIONS.—With respect to fiscal year 2005 and 

each fiscal year thereafter, the Secretary shall— 

(i) establish, by regulation, performance criteria relating to— 

(I) actions taken to correct errors, reduce rates 

of error, and improve eligibility determinations; 

and 

(II) other indicators of effective administration 

determined by the Secretary; 

(ii) establish, by regulation, standards for high and 

most improved performance to be used in awarding 

performance bonus payments under subparagraph 

(B)(ii); and 

(iii) before issuing proposed regulations to carry out 

clauses (i) and (ii), solicit ideas for performance criteria and standards for high and most improved perVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00155 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
150 

formance from State agencies and organizations that 

represent State interests. 

(B) PERFORMANCE BONUS PAYMENTS.—With respect to 

fiscal year 2005 and each fiscal year thereafter, the Secretary shall— 

(i) measure the performance of each State agency 

with respect to the criteria established under subparagraph (A)(i); and 

(ii) subject to paragraph (3), award performance 

bonus payments in the following fiscal year, in a total 

amount of $48,000,000 for each fiscal year, to State 

agencies that meet standards for high or most improved performance established by the Secretary 

under subparagraph (A)(ii). 

(3) PROHIBITION ON RECEIPT OF PERFORMANCE BONUS PAYMENTS.—A State agency shall not be eligible for a performance 

bonus payment with respect to any fiscal year for which the 

State agency has a liability amount established under subsection (c)(1)(C). 

(4) PAYMENTS NOT SUBJECT TO JUDICIAL REVIEW.—A determination by the Secretary whether, and in what amount, to 

award a performance bonus payment under this subsection 

shall not be subject to administrative or judicial review. 

(5) USE OF PERFORMANCE BONUS PAYMENTS.—A State agency 

may use a performance bonus payment received under this 

subsection only to carry out the program established under this 

Act, including investments in— 

(A) technology; 

(B) improvements in administration and distribution; 

and 

(C) actions to prevent fraud, waste, and abuse. 

(e) The Secretary and State agencies shall (1) require, as a condition of eligibility for participation in the supplemental nutrition assistance program, that each household member furnish to the State 

agency their social security account number (or numbers, if they 

have more than one number), and (2) use such account numbers in 

the administration of the supplemental nutrition assistance program. The Secretary and State agencies shall have access to the information regarding individual supplemental nutrition assistance 

program applicants and participants who receive benefits under 

title XVI of the Social Security Act that has been provided to the 

Commissioner of Social Security, but only to the extent that the 

Secretary and the Commissioner of Social Security determine necessary for purposes of determining or auditing a household’s eligibility to receive assistance or the amount thereof under the supplemental nutrition assistance program, or verifying information related thereto. 

(f) Notwithstanding any other provision of law, counsel may be 

employed and counsel fees, court costs, bail, and other expenses incidental to the defense of officers and employees of the Department 

of Agriculture may be paid in judicial or administrative proceedings 

to which such officers and employees have been made parties and 

that arise directly out of their performance of duties under this Act. 

(g) COST SHARING FOR COMPUTERIZATION.— 


emcdonald on DSK67QTVN1PROD with HEARING
151 

(1) IN GENERAL.—Except as provided in paragraphs (2) and 

(3), the Secretary is authorized to pay to each State agency the 

amount provided under subsection (a)(6) for the costs incurred 

by the State agency in the planning, design, development, or 

installation of 1 or more automatic data processing and information retrieval systems that the Secretary determines— 

(A) would assist in meeting the requirements of this Act; 

(B) meet such conditions as the Secretary prescribes; 

(C) are likely to provide more efficient and effective administration of the supplemental nutrition assistance program; 

(D) would be compatible with other systems used in the 

administration of State programs, including the program 

funded under part A of title IV of the Social Security Act 

(42 U.S.C. 601 et seq.); 

(E) would be tested adequately before and after implementation, including through pilot projects in limited 

areas for major systems changes as determined under 

rules promulgated by the Secretary, data from which shall 

be thoroughly evaluated before the Secretary approves the 

system to be implemented more broadly; and 

(F) would be operated in accordance with an adequate 

plan for— 

(i) continuous updating to reflect changed policy and 

circumstances; and 

(ii) testing the effect of the system on access for eligible households and on payment accuracy. 

(2) LIMITATION.—The Secretary shall not make payments to 

a State agency under paragraph (1) to the extent that the 

State agency— 

(A) is reimbursed for the costs under any other Federal 

program; or 

(B) uses the systems for purposes not connected with the 

supplemental nutrition assistance program. 

(h) FUNDING OF EMPLOYMENT AND TRAINING PROGRAMS.— (1) IN GENERAL.— (A) AMOUNTS.—To carry out employment and training 

programs, the Secretary shall reserve for allocation to 

State agencies, to remain available for 24 months, from 

funds made available for each fiscal year under section 

18(a)(1), $90,000,000 for each fiscal year. 

(B) ALLOCATION.—Funds made available under subparagraph (A) shall be made available to and reallocated 

among State agencies under a reasonable formula that— 

(i) is determined and adjusted by the Secretary; and 

(ii) takes into account the number of individuals 

who are not exempt from the work requirement under 

section 6(o). 

(C) REALLOCATION.— (i) IN GENERAL.—If a State agency will not expend 

all of the funds allocated to the State agency for a fiscal year under subparagraph (B), the Secretary shall 

reallocate the unexpended funds to other States (during the fiscal year or the subsequent fiscal year) as the 

Secretary considers appropriate and equitable. 


emcdonald on DSK67QTVN1PROD with HEARING
152 

(ii) TIMING.—The Secretary shall collect such information as the Secretary determines to be necessary 

about the expenditures and anticipated expenditures 

by the State agencies of the funds initially allocated to 

the State agencies under subparagraph (A) to make 

reallocations of unexpended funds under clause (i) 

within a timeframe that allows each State agency to 

which funds are reallocated at least 270 days to expend the reallocated funds. 

(iii) OPPORTUNITY.—The Secretary shall ensure that 

all State agencies have an opportunity to obtain reallocated funds. 

(D) MINIMUM ALLOCATION.—Notwithstanding subparagraph (B), the Secretary shall ensure that each State agency operating an employment and training program shall 

receive not less than $50,000 for each fiscal year. 

(E) ADDITIONAL ALLOCATIONS FOR STATES THAT ENSURE

AVAILABILITY OF WORK OPPORTUNITIES.— (i) IN GENERAL.—In addition to the allocations under 

subparagraph (A), from funds made available under 

section 18(a)(1), the Secretary shall allocate not more 

than $20,000,000 for each fiscal year to reimburse a 

State agency that is eligible under clause (ii) for the 

costs incurred in serving members of households receiving supplemental nutrition assistance program 

benefits who— 

(I) are not eligible for an exception under section 6(o)(3); and 

(II) are placed in and comply with a program 

described in subparagraph (B) or (C) of section 

6(o)(2). 

(ii) ELIGIBILITY.—To be eligible for an additional allocation under clause (i), a State agency shall make 

and comply with a commitment to offer a position in 

a program described in subparagraph (B) or (C) of section 6(o)(2) to each applicant or recipient who— 

(I) is in the last month of the 3-month period 

described in section 6(o)(2); 

(II) is not eligible for an exception under section 

6(o)(3); 

(III) is not eligible for a waiver under section 

6(o)(4); and 

(IV) is not exempt under section 6(o)(6). 

(F) PILOT PROJECTS TO REDUCE DEPENDENCY AND INCREASE WORK REQUIREMENTS AND WORK EFFORT UNDER

SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM.— 

(i) PILOT PROJECTS REQUIRED.— 

(I) IN GENERAL.—The Secretary shall carry out 

pilot projects under which State agencies shall 

enter into cooperative agreements with the Secretary to develop and test methods, including operating work programs with certain features comparable to the program of block grants to States 

for temporary assistance for needy families established under part A of title IV of the Social SecuVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00158 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
153 

rity Act (42 U.S.C. 601 et seq.), for employment 

and training programs and services to raise the 

number of work registrants under section 6(d) of 

this Act who obtain unsubsidized employment, increase the earned income of the registrants, and 

reduce the reliance of the registrants on public assistance, so as to reduce the need for supplemental nutrition assistance benefits. 

(II) REQUIREMENTS.—Pilot projects shall— 

(aa) meet such terms and conditions as the 

Secretary considers to be appropriate; and 

(bb) except as otherwise provided in this 

subparagraph, be in accordance with the requirements of sections 6(d) and 20. 

(ii) SELECTION CRITERIA.— 

(I) IN GENERAL.—The Secretary shall select pilot 

projects under this subparagraph in accordance 

with the criteria established under this clause and 

additional criteria established by the Secretary. 

(II) QUALIFYING CRITERIA.—To be eligible to participate in a pilot project, a State agency shall— 

(aa) agree to participate in the evaluation 

described in clause (vii), including providing 

evidence that the State has a robust data collection system for program administration 

and cooperating to make available State data 

on the employment activities and post-participation employment, earnings, and public benefit receipt of participants to ensure proper 

and timely evaluation; 

(bb) commit to collaborate with the State 

workforce board and other job training programs in the State and local area; and 

(cc) commit to maintain at least the amount 

of State funding for employment and training 

programs and services under paragraphs (2) 

and (3) and under section 20 as the State expended for fiscal year 2013. 

(III) SELECTION CRITERIA.—In selecting pilot 

projects, the Secretary shall— 

(aa) consider the degree to which the pilot 

project would enhance existing employment 

and training programs in the State; 

(bb) consider the degree to which the pilot 

project would enhance the employment and 

earnings of program participants; 

(cc) consider whether there is evidence that 

the pilot project could be replicated easily by 

other States or political subdivisions; 

(dd) consider whether the State agency has 

a demonstrated capacity to operate high quality employment and training programs; and 

(ee) ensure the pilot projects, when considered as a group, test a range of strategies, including strategies that— 


emcdonald on DSK67QTVN1PROD with HEARING
154 

(AA) target individuals with low skills 

or limited work experience, individuals 

subject to the requirements under section 

6(o), and individuals who are working; 

(BB) are located in a range of geographic areas and States, including rural 

and urban areas; 

(CC) emphasize education and training, 

rehabilitative services for individuals 

with barriers to employment, rapid attachment to employment, and mixed 

strategies; and 

(DD) test programs that assign work 

registrants to mandatory and voluntary 

participation in employment and training 

activities. 

(iii) ACCOUNTABILITY.— 

(I) IN GENERAL.—The Secretary shall establish 

and implement a process to terminate a pilot 

project for which the State has failed to meet the 

criteria described in clause (ii) or other criteria established by the Secretary. 

(II) TIMING.—The process shall include a reasonable time period, not to exceed 180 days, for 

State agencies found noncompliant to correct the 

noncompliance. 

(iv) EMPLOYMENT AND TRAINING ACTIVITIES.—Allowable programs and services carried out under this subparagraph shall include those programs and services 

authorized under this Act and employment and training activities authorized under the program of block 

grants to States for temporary assistance for needy 

families established under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), including: 

(I) Employment in the public or private sector 

that is not subsidized by any public program. 

(II) Employment in the private sector for which 

the employer receives a subsidy from public funds 

to offset all or a part of the wages and costs of employing an adult. 

(III) Employment in the public sector for which 

the employer receives a subsidy from public funds 

to offset all or a part of the wages and costs of employing an adult. 

(IV) A work activity that— 

(aa) is performed in return for public benefits; 

(bb) provides an adult with an opportunity 

to acquire the general skills, knowledge, and 

work habits necessary to obtain employment; 

(cc) is designed to improve the employability of those who cannot find unsubsidized 

employment; and 


emcdonald on DSK67QTVN1PROD with HEARING
155 

(dd) is supervised by an employer, work site 

sponsor, or other responsible party on an ongoing basis. 

(V) Training in the public or private sector 

that— 

(aa) is given to a paid employee while the 

employee is engaged in productive work; and 

(bb) provides knowledge and skills essential 

to the full and adequate performance of the 

job. 

(VI) Job search, obtaining employment, or preparation to seek or obtain employment, including— 

(aa) life skills training; 

(bb) substance abuse treatment or mental 

health treatment, determined to be necessary 

and documented by a qualified medical, substance abuse, or mental health professional; 

and 

(cc) rehabilitation activities, supervised by a 

public agency or other responsible party on an 

ongoing basis. 

(VII) Structured programs and embedded activities— 

(aa) in which adults perform work for the 

direct benefit of the community under the 

auspices of public or nonprofit organizations; 

(bb) that are limited to projects that serve 

useful community purposes in fields such as 

health, social service, environmental protection, education, urban and rural redevelopment, welfare, recreation, public facilities, 

public safety, and child care; 

(cc) that are designed to improve the employability of adults not otherwise able to obtain unsubsidized employment; 

(dd) that are supervised on an ongoing 

basis; and 

(ee) with respect to which a State agency 

takes into account, to the maximum extent 

practicable, the prior training, experience, and 

skills of a recipient in making appropriate 

community service assignments. 

(VIII) Career and technical training programs 

that are— 

(aa) directly related to the preparation of 

adults for employment in current or emerging 

occupations; and 

(bb) supervised on an ongoing basis. 

(IX) Training or education for job skills that 

are— 

(aa) required by an employer to provide an 

adult with the ability to obtain employment or 

to advance or adapt to the changing demands 

of the workplace; and 

(bb) supervised on an ongoing basis. 


emcdonald on DSK67QTVN1PROD with HEARING
156 

(X) Education that is— 

(aa) related to a specific occupation, job, or 

job offer; and 

(bb) supervised on an ongoing basis. 

(XI) In the case of an adult who has not completed secondary school or received a certificate of 

general equivalence, regular attendance that is— 

(aa) in accordance with the requirements of 

the secondary school or course of study, at a 

secondary school or in a course of study leading to a certificate of general equivalence; and 

(bb) supervised on an ongoing basis. 

(XII) Providing child care to enable another recipient of public benefits to participate in a community service program that— 

(aa) does not provide compensation for the 

community service; 

(bb) is a structured program designed to improve the employability of adults who participate in the program; and 

(cc) is supervised on an ongoing basis. 

(v) SANCTIONS.—Subject to clause (vi), no work registrant shall be eligible to participate in the supplemental nutrition assistance program if the individual 

refuses without good cause to participate in an employment and training program under this subparagraph, to the extent required by the State agency. 

(vi) STANDARDS.— (I) IN GENERAL.—Employment and training activities under this subparagraph shall be considered to be carried out under section 6(d), including 

for the purpose of satisfying any conditions of participation and duration of ineligibility. 

(II) STANDARDS FOR CERTAIN EMPLOYMENT ACTIVITIES.—The Secretary shall establish standards 

for employment activities described in subclauses 

(I), (II), and (III) of clause (iv) that ensure that 

failure to work for reasons beyond the control of 

an individual, such as involuntary reduction in 

hours of employment, shall not result in ineligibility. 

(III) PARTICIPATION IN OTHER PROGRAMS.—Before assigning a work registrant to mandatory employment and training activities, a State agency 

shall— 

(aa) assess whether the work registrant is 

participating in substantial employment and 

training activities outside of the pilot project 

that are expected to result in the work registrant gaining increased skills, training, 

work, or experience consistent with the objectives of the pilot project; and 

(bb) if determined to be acceptable, count 

hours engaged in the activities toward any 

minimum participation requirement. 


emcdonald on DSK67QTVN1PROD with HEARING
157 

(vii) EVALUATION AND REPORTING.— 

(I) INDEPENDENT EVALUATION.— 

(aa) IN GENERAL.—The Secretary shall, 

under such terms and conditions as the Secretary determines to be appropriate, conduct 

for each State agency that enters into a cooperative agreement under clause (i) an independent longitudinal evaluation of each pilot 

project of the State agency under this subparagraph, with results reported not less frequently than in consecutive 12-month increments. 

(bb) PURPOSE.—The purpose of the independent evaluation shall be to measure the 

impact of employment and training programs 

and services provided by each State agency 

under the pilot projects on the ability of 

adults in each pilot project target population 

to find and retain employment that leads to 

increased household income and reduced reliance on public assistance, as well as other 

measures of household well-being, compared 

to what would have occurred in the absence of 

the pilot project. 

(cc) METHODOLOGY.—The independent evaluation shall use valid statistical methods that 

can determine, for each pilot project, the difference, if any, between supplemental nutrition assistance and other public benefit receipt expenditures, employment, earnings and 

other impacts as determined by the Secretary— 

(AA) as a result of the employment and 

training programs and services provided 

by the State agency under the pilot 

project; as compared to 

(BB) a control group that is not subject 

to the employment and training programs 

and services provided by the State agency 

under the pilot project. 

(II) REPORTING.—Not later than December 31, 

2015, and each December 31 thereafter until the 

completion of the last evaluation under subclause 

(I), the Secretary shall submit to the Committee 

on Agriculture of the House of Representatives 

and the Committee on Agriculture, Nutrition, and 

Forestry of the Senate and share broadly, including by posting on the Internet website of the Department of Agriculture, a report that includes a 

description of— 

(aa) the status of each pilot project carried 

out under this subparagraph; 

(bb) the results of the evaluation completed 

during the previous fiscal year; 


emcdonald on DSK67QTVN1PROD with HEARING
158 

(cc) to the maximum extent practicable, 

baseline information relevant to the stated 

goals and desired outcomes of the pilot 

project; 

(dd) the employment and training programs 

and services each State tested under the pilot, 

including— 

(AA) the system of the State for assessing the ability of work registrants to participate in and meet the requirements of 

employment and training activities and 

assigning work registrants to appropriate 

activities; and 

(BB) the employment and training activities and services provided under the 

pilot; 

(ee) the impact of the employment and 

training programs and services on appropriate 

employment, income, and public benefit receipt as well as other outcomes among households participating in the pilot project, relative to households not participating; and 

(ff) the steps and funding necessary to incorporate into State employment and training 

programs and services the components of the 

pilot projects that demonstrate increased employment and earnings. 

(viii) FUNDING.— 

(I) IN GENERAL.—Subject to subclause (II), from 

amounts made available under section 18(a)(1), 

the Secretary shall use to carry out this subparagraph— 

(aa) for fiscal year 2014, $10,000,000; and 

(bb) for fiscal year 2015, $190,000,000. 

(II) LIMITATIONS.— 

(aa) IN GENERAL.—The Secretary shall not 

fund more than 10 pilot projects under this 

subparagraph. 

(bb) DURATION.—Each pilot project shall be 

in effect for not more than 3 years. 

(III) AVAILABILITY OF FUNDS.—Funds made 

available under subclause (I) shall remain available through September 30, 2018. 

(ix) USE OF FUNDS.— 

(I) IN GENERAL.—Funds made available under 

this subparagraph for pilot projects shall be used 

only for— 

(aa) pilot projects that comply with this Act; 

(bb) the program and administrative costs 

of carrying out the pilot projects; 

(cc) the costs incurred in developing systems and providing information and data for 

the independent evaluations under clause 

(vii); and 


emcdonald on DSK67QTVN1PROD with HEARING
159 

(dd) the costs of the evaluations under 

clause (vii). 

(II) MAINTENANCE OF EFFORT.—Funds made 

available under this subparagraph shall be used 

only to supplement, not to supplant, non-Federal 

funds used for existing employment and training 

activities or services. 

(III) OTHER FUNDS.—In carrying out pilot 

projects, States may contribute additional funds 

obtained from other sources, including Federal, 

State, or private funds, on the condition that the 

use of the contributions is permissible under Federal law. 

(2) If, in carrying out such program during such fiscal year, a 

State agency incurs costs that exceed the amount allocated to the 

State agency under paragraph (1), the Secretary shall pay such 

State agency an amount equal to 50 per centum of such additional 

costs, subject to the first limitation in paragraph (3), including the 

costs for case management and casework to facilitate the transition 

from economic dependency to self-sufficiency through work. 

(3) The Secretary shall also reimburse each State agency in an 

amount equal to 50 per centum of the total amount of payments 

made or costs incurred by the State agency in connection with 

transportation costs and other expenses reasonably necessary and 

directly related to participation in an employment and training program under section 6(d)(4) or a pilot project under paragraph 

(1)(F), except that the amount of the reimbursement for dependent 

care expenses shall not exceed an amount equal to the payment 

made under section 6(d)(4)(I)(i)(II) but not more than the applicable 

local market rate, and such reimbursement shall not be made out 

of funds allocated under paragraph (1). 

(4) Funds provided to a State agency under this subsection may 

be used only for operating an employment and training program 

under section 6(d)(4) or a pilot project under paragraph (1)(F), and 

may not be used for carrying out other provisions of this Act. 

(5) MONITORING.— (A) IN GENERAL.—The Secretary shall monitor the employment and training programs carried out by State agencies under section 6(d)(4) and assess the effectiveness of 

the programs in— 

(i) preparing members of households participating in 

the supplemental nutrition assistance program for employment, including the acquisition of basic skills necessary for employment; and 

(ii) increasing the number of household members 

who obtain and retain employment subsequent to participation in the employment and training programs. 

(B) REPORTING MEASURES.— 

(i) IN GENERAL.—The Secretary, in consultation with 

the Secretary of Labor, shall develop State reporting 

measures that identify improvements in the skills, 

training, education, or work experience of members of 

households participating in the supplemental nutrition 

assistance program. 

(ii) REQUIREMENTS.—Measures shall— 


emcdonald on DSK67QTVN1PROD with HEARING
160 

(I) be based on common measures of performance for Federal workforce training programs; and 

(II) include additional indicators that reflect the 

challenges facing the types of members of households participating in the supplemental nutrition 

assistance program who participate in a specific 

employment and training component. 

(iii) STATE REQUIREMENTS.—The Secretary shall require that each State employment and training plan 

submitted under section 11(e)(19) identifies appropriate reporting measures for each proposed component that serves a threshold number of participants 

determined by the Secretary of at least 100 people a 

year. 

(iv) INCLUSIONS.—Reporting measures described in 

clause (iii) may include— 

(I) the percentage and number of program participants who received employment and training 

services and are in unsubsidized employment subsequent to the receipt of those services; 

(II) the percentage and number of program participants who obtain a recognized credential, including a registered apprenticeship, or a regular 

secondary school diploma or its recognized equivalent, while participating in, or within 1 year after 

receiving, employment and training services; 

(III) the percentage and number of program participants who are in an education or training program that is intended to lead to a recognized credential, including a registered apprenticeship or 

on-the-job training program, a regular secondary 

school diploma or its recognized equivalent, or unsubsidized employment; 

(IV) subject to terms and conditions established 

by the Secretary, measures developed by each 

State agency to assess the skills acquisition of employment and training program participants that 

reflect the goals of the specific employment and 

training program components of the State agency, 

which may include, at a minimum— 

(aa) the percentage and number of program 

participants who are meeting program requirements in each component of the education and training program of the State 

agency; 

(bb) the percentage and number of program 

participants who are gaining skills likely to 

lead to employment as measured through 

testing, quantitative or qualitative assessment, or other method; and 

(cc) the percentage and number of program 

participants who do not comply with employment and training requirements and who are 

ineligible under section 6(b); and 

(V) other indicators approved by the Secretary. 


emcdonald on DSK67QTVN1PROD with HEARING
161 

(C) OVERSIGHT OF STATE EMPLOYMENT AND TRAINING AC- TIVITIES.—The Secretary shall assess State employment 

and training programs on a periodic basis to ensure— 

(i) compliance with Federal employment and training program rules and regulations; 

(ii) that program activities are appropriate to meet 

the needs of the individuals referred by the State 

agency to an employment and training program component; 

(iii) that reporting measures are appropriate to identify improvements in skills, training, work and experience for participants in an employment and training 

program component; and 

(iv) for States receiving additional allocations under 

paragraph (1)(E), any information the Secretary may 

require to evaluate the compliance of the State agency 

with paragraph (1), which may include— 

(I) a report for each fiscal year of the number of 

individuals in the State who meet the conditions 

of paragraph (1)(E)(ii), the number of individuals 

the State agency offers a position in a program described in subparagraph (B) or (C) of section 

6(o)(2), and the number who participate in such a 

program; 

(II) a description of the types of employment 

and training programs the State agency uses to 

comply with paragraph (1)(E) and the availability 

of those programs throughout the State; and 

(III) any additional information the Secretary 

determines to be appropriate. 

(D) STATE REPORT.—Each State agency shall annually 

prepare and submit to the Secretary a report on the State 

employment and training program that includes, using 

measures identified under subparagraph (B), the numbers 

of supplemental nutrition assistance program participants 

who have gained skills, training, work, or experience that 

will increase the ability of the participants to obtain regular employment. 

(E) MODIFICATIONS TO THE STATE EMPLOYMENT AND

TRAINING PLAN.—Subject to terms and conditions established by the Secretary, if the Secretary determines that 

the performance of a State agency with respect to employment and training outcomes is inadequate, the Secretary 

may require the State agency to make modifications to the 

State employment and training plan to improve the outcomes. 

(F) PERIODIC EVALUATION.—Subject to terms and conditions established by the Secretary, not later than October 

1, 2016, and not less frequently than once every 5 years 

thereafter, the Secretary shall conduct a study to review 

existing practice and research to identify employment and 

training program components and practices that— 

(i) effectively assist members of households participating in the supplemental nutrition assistance program in gaining skills, training, work, or experience 


emcdonald on DSK67QTVN1PROD with HEARING
162 

that will increase the ability of the participants to obtain regular employment; and 

(ii) are best integrated with statewide workforce development systems. 

(i)(1) The Department of Agriculture may use quality control information made available under this section to determine which 

project areas have payment error rates (as defined in subsection 

(d)(1)) that impair the integrity of the supplemental nutrition assistance program. 

(2) The Secretary may require a State agency to carry out new 

or modified procedures for the certification of households in areas 

identified under paragraph (1) if the Secretary determines such 

procedures would improve the integrity of the supplemental nutrition assistance program and be cost effective. 

(j) Not later than 180 days after the date of the enactment of the 

Hunger Prevention Act of 1988, and annually thereafter, the Secretary shall publish instructional materials specifically designed to 

be used by the State agency to provide intensive training to State 

agency personnel who undertake the certification of households 

that include a member who engages in farming. 

(k) REDUCTIONS IN PAYMENTS FOR ADMINISTRATIVE COSTS.— (1) DEFINITIONS.—In this subsection: 

(A) AFDC PROGRAM.—The term ‘‘AFDC program’’ means 

the program of aid to families with dependent children established under part A of title IV of the Social Security Act 

(42 U.S.C. 601 et seq. (as in effect, with respect to a State, 

during the base period for that State)). 

(B) BASE PERIOD.—The term ‘‘base period’’ means the period used to determine the amount of the State family assistance grant for a State under section 403 of the Social 

Security Act (42 U.S.C. 603). 

(C) MEDICAID PROGRAM.—The term ‘‘medicaid program’’ 

means the program of medical assistance under a State 

plan or under a waiver of the plan under title XIX of the 

Social Security Act (42 U.S.C. 1396 et seq.). 

(2) DETERMINATIONS OF AMOUNTS ATTRIBUTABLE TO BENE- FITING PROGRAMS.—Not later than 180 days after the date of 

enactment of this subsection, the Secretary of Health and 

Human Services, in consultation with the Secretary of Agriculture and the States, shall, with respect to the base period 

for each State, determine— 

(A) the annualized amount the State received under section 403(a)(3) of the Social Security Act (42 U.S.C. 

603(a)(3) (as in effect during the base period)) for administrative costs common to determining the eligibility of individuals, families, and households eligible or applying for 

the AFDC program and the supplemental nutrition assistance program, the AFDC program and the medicaid program, and the AFDC program, the supplemental nutrition 

assistance program, and the medicaid program that were 

allocated to the AFDC program; and 

(B) the annualized amount the State would have received under section 403(a)(3) of the Social Security Act 

(42 U.S.C. 603(a)(3) (as so in effect)), section 1903(a)(7) of 

the Social Security Act (42 U.S.C. 1396b(a)(7) (as so in efVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00168 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
163 

fect)), and subsection (a) of this section (as so in effect), for 

administrative costs common to determining the eligibility 

of individuals, families, and households eligible or applying 

for the AFDC program and the supplemental nutrition assistance program, the AFDC program and the medicaid 

program, and the AFDC program, the supplemental nutrition assistance program, and the medicaid program, if 

those costs had been allocated equally among such programs for which the individual, family, or household was 

eligible or applied for. 

(3) REDUCTION IN PAYMENT.— (A) IN GENERAL.—Notwithstanding any other provision 

of this section, the Secretary shall reduce, for each fiscal 

year, the amount paid under subsection (a) to each State 

by an amount equal to the amount determined for the supplemental nutrition assistance program under paragraph 

(2)(B). The Secretary shall, to the extent practicable, make 

the reductions required by this paragraph on a quarterly 

basis. 

(B) APPLICATION.—If the Secretary of Health and 

Human Services does not make the determinations required by paragraph (2) by September 30, 1999— 

(i) during the fiscal year in which the determinations are made, the Secretary shall reduce the amount 

paid under subsection (a) to each State by an amount 

equal to the sum of the amounts determined for the 

supplemental nutrition assistance program under 

paragraph (2)(B) for fiscal year 1999 through the fiscal 

year during which the determinations are made; and 

(ii) for each subsequent fiscal year, subparagraph 

(A) applies. 

(4) APPEAL OF DETERMINATIONS.— 

(A) IN GENERAL.—Not later than 5 days after the date on 

which the Secretary of Health and Human Services makes 

any determination required by paragraph (2) with respect 

to a State, the Secretary shall notify the chief executive officer of the State of the determination. 

(B) REVIEW BY ADMINISTRATIVE LAW JUDGE.— (i) IN GENERAL.—Not later than 60 days after the 

date on which a State receives notice under subparagraph (A) of a determination, the State may appeal 

the determination, in whole or in part, to an administrative law judge of the Department of Health and 

Human Services by filing an appeal with the administrative law judge. 

(ii) DOCUMENTATION.—The administrative law judge 

shall consider an appeal filed by a State under clause 

(i) on the basis of such documentation as the State 

may submit and as the administrative law judge may 

require to support the final decision of the administrative law judge. 

(iii) REVIEW.—In deciding whether to uphold a determination, in whole or in part, the administrative 

law judge shall conduct a thorough review of the 

issues and take into account all relevant evidence. 


emcdonald on DSK67QTVN1PROD with HEARING
164 

(iv) DEADLINE.—Not later than 60 days after the 

date on which the record is closed, the administrative 

law judge shall— 

(I) make a final decision with respect to an appeal filed under clause (i); and 

(II) notify the chief executive officer of the State 

of the decision. 

(C) REVIEW BY DEPARTMENTAL APPEALS BOARD.— 

(i) IN GENERAL.—Not later than 30 days after the 

date on which a State receives notice under subparagraph (B) of a final decision, the State may appeal the 

decision, in whole or in part, to the Departmental Appeals Board established in the Department of Health 

and Human Services (referred to in this paragraph as 

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

(ii) REVIEW.—The Board shall review the decision on 

the record. 

(iii) DEADLINE.—Not later than 60 days after the 

date on which the appeal is filed, the Board shall— 

(I) make a final decision with respect to an appeal filed under clause (i); and 

(II) notify the chief executive officer of the State 

of the decision. 

(D) JUDICIAL REVIEW.—The determinations of the Secretary of Health and Human Services under paragraph (2), 

and a final decision of the administrative law judge or 

Board under subparagraphs (B) and (C), respectively, shall 

not be subject to judicial review. 

(E) REDUCED PAYMENTS PENDING APPEAL.—The pendency of an appeal under this paragraph shall not affect the 

requirement that the Secretary reduce payments in accordance with paragraph (3). 

(5) ALLOCATION OF ADMINISTRATIVE COSTS.— 

(A) IN GENERAL.—No funds or expenditures described in 

subparagraph (B) may be used to pay for costs— 

(i) eligible for reimbursement under subsection (a) 

(or costs that would have been eligible for reimbursement but for this subsection); and 

(ii) allocated for reimbursement to the supplemental 

nutrition assistance program under a plan submitted 

by a State to the Secretary of Health and Human 

Services to allocate administrative costs for public assistance programs. 

(B) FUNDS AND EXPENDITURES.—Subparagraph (A) applies to— 

(i) funds made available to carry out part A of title 

IV, or title XX, of the Social Security Act (42 U.S.C. 

601 et seq., 1397 et seq.); 

(ii) expenditures made as qualified State expenditures (as defined in section 409(a)(7)(B) of that Act (42 

U.S.C. 609(a)(7)(B))); 

(iii) any other Federal funds (except funds provided 

under subsection (a)); and 

(iv) any other State funds that are— 


emcdonald on DSK67QTVN1PROD with HEARING
165 

(I) expended as a condition of receiving Federal 

funds; or 

(II) used to match Federal funds under a Federal program other than the supplemental nutrition assistance program. 

* * * * * * * 

PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY 

RECONCILIATION ACT OF 1996 

* * * * * * * 

TITLE IV—RESTRICTING WELFARE AND 

PUBLIC BENEFITS FOR ALIENS 

* * * * * * * 

Subtitle A—Eligibility for Federal Benefits 

* * * * * * * 

SEC. 402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR CERTAIN 

FEDERAL PROGRAMS. 

(a) LIMITED ELIGIBILITY FOR SPECIFIED FEDERAL PROGRAMS.— (1) IN GENERAL.—Notwithstanding any other provision of law 

and except as provided in paragraph (2), an alien who is a 

qualified alien (as defined in section 431) is not eligible for any 

specified Federal program (as defined in paragraph (3)). 

(2) EXCEPTIONS.— (A) TIME-LIMITED EXCEPTION FOR REFUGEES AND

ASYLEES.—With respect to the specified Federal programs 

described in paragraph (3), paragraph (1) shall not apply 

to an alien until 7 years after the date— 

(i) an alien is admitted to the United States as a refugee under section 207 of the Immigration and Nationality Act; 

(ii) an alien is granted asylum under section 208 of 

such Act; 

(iii) an alien’s deportation is withheld under section 

243(h) of such Act (as in effect immediately before the 

effective date of section 307 of division C of Public 

Law 104–208) or section 241(b)(3) of such Act (as 

amended by section 305(a) of division C of Public Law 

104–208); 

(iv) an alien is granted status as a Cuban and Haitian entrant (as defined in section 501(e) of the Refugee Education Assistance Act of 1980); or 

(v) an alien is admitted to the United States as an 

Amerasian immigrant pursuant to section 584 of the 

Foreign Operations, Export Financing, and Related 

Programs Appropriations Act, 1988 (as contained in 

section 101(e) of Public Law 100–202 and amended by 

the 9th proviso under MIGRATION AND REFUGEE ASSISTVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00171 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
166 

ANCE in title II of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 

1989, Public Law 100–461, as amended). 

(B) CERTAIN PERMANENT RESIDENT ALIENS.—Paragraph 

(1) shall not apply to an alien who— 

(i) is lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act; and 

(ii)(I) has worked 40 qualifying quarters of coverage 

as defined under title II of the Social Security Act or 

can be credited with such qualifying quarters as provided under section 435, and (II) in the case of any 

such qualifying quarter creditable for any period beginning after December 31, 1996, did not receive any 

Federal means-tested public benefit (as provided 

under section 403) during any such period. 

(C) VETERAN AND ACTIVE DUTY EXCEPTION.—Paragraph 

(1) shall not apply to an alien who is lawfully residing in 

any State and is— 

(i) a veteran (as defined in section 101, 1101, or 

1301, or as described in section 107 of title 38, United 

States Code) with a discharge characterized as an honorable discharge and not on account of alienage and 

who fulfills the minimum active-duty service requirements of section 5303A(d) of title 38, United States 

Code, 

(ii) on active duty (other than active duty for 

training) in the Armed Forces of the United States, or 

(iii) the spouse or unmarried dependent child of an 

individual described in clause (i) or (ii) or the 

unremarried surviving spouse of an individual described in clause (i) or (ii) who is deceased if the marriage fulfills the requirements of section 1304 of title 

38, United States Code. 

(D) TRANSITION FOR ALIENS CURRENTLY RECEIVING BENE- FITS.— (i) SSI.— 

(I) IN GENERAL.—With respect to the specified 

Federal program described in paragraph (3)(A), 

during the period beginning on the date of the enactment of this Act and ending on September 30, 

1998, the Commissioner of Social Security shall 

redetermine the eligibility of any individual who 

is receiving benefits under such program as of the 

date of the enactment of this Act and whose eligibility for such benefits may terminate by reason of 

the provisions of this subsection. 

(II) REDETERMINATION CRITERIA.—With respect 

to any redetermination under subclause (I), the 

Commissioner of Social Security shall apply the 

eligibility criteria for new applicants for benefits 

under such program. 

(III) GRANDFATHER PROVISION.—The provisions 

of this subsection and the redetermination under 

subclause (I), shall only apply with respect to the 


emcdonald on DSK67QTVN1PROD with HEARING
167 

benefits of an individual described in subclause (I) 

for months beginning on or after September 30, 

1998. 

(IV) NOTICE.—Not later than March 31, 1997, 

the Commissioner of Social Security shall notify 

an individual described in subclause (I) of the provisions of this clause. 

(ii) FOOD STAMPS.— (I) IN GENERAL.—With respect to the specified 

Federal program described in paragraph (3)(B), ineligibility under paragraph (1) shall not apply 

until April 1, 1997, to an alien who received benefits under such program on the date of enactment 

of this Act, unless such alien is determined to be 

ineligible to receive such benefits under the Food 

Stamp Act of 1977. The State agency shall recertify the eligibility of all such aliens during the period beginning April 1, 1997, and ending August 

22, 1997. 

(II) RECERTIFICATION CRITERIA.—With respect to 

any recertification under subclause (I), the State 

agency shall apply the eligibility criteria for applicants for benefits under such program. 

(III) GRANDFATHER PROVISION.—The provisions 

of this subsection and the recertification under 

subclause (I) shall only apply with respect to the 

eligibility of an alien for a program for months beginning on or after the date of recertification, if on 

the date of enactment of this Act the alien is lawfully residing in any State and is receiving benefits under such program on such date of enactment. 

(E) ALIENS RECEIVING SSI ON AUGUST 22, 1996.—With respect to eligibility for benefits for the program defined in 

paragraph (3)(A) (relating to the supplemental security income program), paragraph (1) shall not apply to an alien 

who is lawfully residing in the United States and who was 

receiving such benefits on August 22, 1996. 

(F) DISABLED ALIENS LAWFULLY RESIDING IN THE UNITED

STATES ON AUGUST 22, 1996.—With respect to eligibility for 

benefits for the specified Federal programs described in 

paragraph (3), paragraph (1) shall not apply to an alien 

who— 

(i) in the case of the specified Federal program described in paragraph (3)(A)— 

(I) was lawfully residing in the United States on 

August 22, 1996; and 

(II) is blind or disabled (as defined in paragraph 

(2) or (3) of section 1614(a) of the Social Security 

Act (42 U.S.C. 1382c(a))); and 

(ii) in the case of the specified Federal program described in paragraph (3)(B), is receiving benefits or assistance for blindness or disability (within the meaning of section 3(j) of the Food Stamp Act of 1977 (7 

U.S.C. 2012(r))). 


emcdonald on DSK67QTVN1PROD with HEARING
168 

(G) EXCEPTION FOR CERTAIN INDIANS.—With respect to 

eligibility for benefits for the specified Federal programs 

described in paragraph (3), section 401(a) and paragraph 

(1) shall not apply to any individual— 

(i) who is an American Indian born in Canada to 

whom the provisions of section 289 of the Immigration 

and Nationality Act (8 U.S.C. 1359) apply; or 

(ii) who is a member of an Indian tribe (as defined 

in section 4(e) of the Indian Self-Determination and 

Education Assistance Act (25 U.S.C. 450b(e))). 

(H) SSI EXCEPTION FOR CERTAIN RECIPIENTS ON THE

BASIS OF VERY OLD APPLICATIONS.—With respect to eligibility for benefits for the program defined in paragraph 

(3)(A) (relating to the supplemental security income program), paragraph (1) shall not apply to any individual— 

(i) who is receiving benefits under such program for 

months after July 1996 on the basis of an application 

filed before January 1, 1979; and 

(ii) with respect to whom the Commissioner of Social 

Security lacks clear and convincing evidence that such 

individual is an alien ineligible for such benefits as a 

result of the application of this section. 

(I) FOOD STAMP EXCEPTION FOR CERTAIN ELDERLY INDI- VIDUALS.—With respect to eligibility for benefits for the 

specified Federal program described in paragraph (3)(B), 

paragraph (1) shall not apply to any individual who on August 22, 1996— 

(i) was lawfully residing in the United States; and 

(ii) was 65 years of age or older. 

(J) FOOD STAMP EXCEPTION FOR CERTAIN CHILDREN.— 

With respect to eligibility for benefits for the specified Federal program described in paragraph (3)(B), paragraph (1) 

shall not apply to any individual who is under 18 years of 

age. 

(K) FOOD STAMP EXCEPTION FOR CERTAIN HMONG AND

HIGHLAND LAOTIANS.—With respect to eligibility for benefits for the specified Federal program described in paragraph (3)(B), paragraph (1) shall not apply to— 

(i) any individual who— 

(I) is lawfully residing in the United States; and 

(II) was a member of a Hmong or Highland Laotian tribe at the time that the tribe rendered assistance to United States personnel by taking part 

in a military or rescue operation during the Vietnam era (as defined in section 101 of title 38, 

United States Code); 

(ii) the spouse, or an unmarried dependent child, of 

such an individual; or 

(iii) the unremarried surviving spouse of such an individual who is deceased. 

(L) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED

ALIENS.—With respect to eligibility for benefits for the 

specified Federal program described in paragraph (3)(B), 

paragraph (1) shall not apply to any qualified alien who 

has resided in the United States with a status within the 


emcdonald on DSK67QTVN1PROD with HEARING
169 

meaning of the term ‘‘qualified alien’’ for a period of 5 

years or more beginning on the date of the alien’s entry 

into the United States. 

(M) SSI EXTENSIONS THROUGH FISCAL YEAR 2011.— (i) TWO-YEAR EXTENSION FOR CERTAIN ALIENS AND

VICTIMS OF TRAFFICKING.— (I) IN GENERAL.—Subject to clause (ii), with respect to eligibility for benefits under subparagraph (A) for the specified Federal program described in paragraph (3)(A) of qualified aliens (as 

defined in section 431(b)) and victims of trafficking in persons (as defined in section 

107(b)(1)(C) of division A of the Victims of Trafficking and Violence Protection Act of 2000 (Public 

Law 106–386) or as granted status under section 

101(a)(15)(T)(ii) of the Immigration and Nationality Act), the 7-year period described in subparagraph (A) shall be deemed to be a 9-year period 

during fiscal years 2009 through 2011 in the case 

of such a qualified alien or victim of trafficking 

who furnishes to the Commissioner of Social Security the declaration required under subclause (IV) 

(if applicable) and is described in subclause (III). 

(II) ALIENS AND VICTIMS WHOSE BENEFITS

CEASED IN PRIOR FISCAL YEARS.—Subject to clause 

(ii), beginning on the date of the enactment of the 

SSI Extension for Elderly and Disabled Refugees 

Act, any qualified alien (as defined in section 

431(b)) or victim of trafficking in persons (as defined in section 107(b)(1)(C) of division A of the 

Victims of Trafficking and Violence Protection Act 

of 2000 (Public Law 106–386) or as granted status 

under section 101(a)(15)(T)(ii) of the Immigration 

and Nationality Act) rendered ineligible for the 

specified Federal program described in paragraph 

(3)(A) during the period beginning on August 22, 

1996, and ending on September 30, 2008, solely by 

reason of the termination of the 7-year period described in subparagraph (A) shall be eligible for 

such program for an additional 2-year period in 

accordance with this clause, if such qualified alien 

or victim of trafficking meets all other eligibility 

factors under title XVI of the Social Security Act, 

furnishes to the Commissioner of Social Security 

the declaration required under subclause (IV) (if 

applicable), and is described in subclause (III). 

(III) ALIENS AND VICTIMS DESCRIBED.—For purposes of subclauses (I) and (II), a qualified alien or 

victim of trafficking described in this subclause is 

an alien or victim who— 

(aa) has been a lawful permanent resident 

for less than 6 years and such status has not 

been abandoned, rescinded under section 246 

of the Immigration and Nationality Act, or 

terminated through removal proceedings 


emcdonald on DSK67QTVN1PROD with HEARING
170 

under section 240 of the Immigration and Nationality Act, and the Commissioner of Social 

Security has verified such status, through 

procedures established in consultation with 

the Secretary of Homeland Security; 

(bb) has filed an application, within 4 years 

from the date the alien or victim began receiving supplemental security income benefits, to 

become a lawful permanent resident with the 

Secretary of Homeland Security, and the 

Commissioner of Social Security has verified, 

through procedures established in consultation with such Secretary, that such application is pending; 

(cc) has been granted the status of Cuban 

and Haitian entrant, as defined in section 

501(e) of the Refugee Education Assistance 

Act of 1980 (Public Law 96–422), for purposes 

of the specified Federal program described in 

paragraph (3)(A); 

(dd) has had his or her deportation withheld by the Secretary of Homeland Security 

under section 243(h) of the Immigration and 

Nationality Act (as in effect immediately before the effective date of section 307 of division C of Public Law 104–208), or whose removal is withheld under section 241(b)(3) of 

such Act; 

(ee) has not attained age 18; or 

(ff) has attained age 70. 

(IV) DECLARATION REQUIRED.— (aa) IN GENERAL.—For purposes of subclauses (I) and (II), the declaration required 

under this subclause of a qualified alien or 

victim of trafficking described in either such 

subclause is a declaration under penalty of 

perjury stating that the alien or victim has 

made a good faith effort to pursue United 

States citizenship, as determined by the Secretary of Homeland Security. The Commissioner of Social Security shall develop criteria 

as needed, in consultation with the Secretary 

of Homeland Security, for consideration of 

such declarations. 

(bb) EXCEPTION FOR CHILDREN.—A qualified 

alien or victim of trafficking described in subclause (I) or (II) who has not attained age 18 

shall not be required to furnish to the Commissioner of Social Security a declaration described in item (aa) as a condition of being eligible for the specified Federal program described in paragraph (3)(A) for an additional 

2-year period in accordance with this clause. 

(V) PAYMENT OF BENEFITS TO ALIENS WHOSE

BENEFITS CEASED IN PRIOR FISCAL YEARS.—BeneVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00176 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
171 

fits paid to a qualified alien or victim described in 

subclause (II) shall be paid prospectively over the 

duration of the qualified alien’s or victim’s renewed eligibility. 

(ii) SPECIAL RULE IN CASE OF PENDING OR APPROVED

NATURALIZATION APPLICATION.—With respect to eligibility for benefits for the specified program described 

in paragraph (3)(A), paragraph (1) shall not apply during fiscal years 2009 through 2011 to an alien described in one of clauses (i) through (v) of subparagraph (A) or a victim of trafficking in persons (as defined in section 107(b)(1)(C) of division A of the Victims of Trafficking and Violence Protection Act of 2000 

(Public Law 106–386) or as granted status under section 101(a)(15)(T)(ii) of the Immigration and Nationality Act), if such alien or victim (including any such 

alien or victim rendered ineligible for the specified 

Federal program described in paragraph (3)(A) during 

the period beginning on August 22, 1996, and ending 

on September 30, 2008, solely by reason of the termination of the 7-year period described in subparagraph 

(A)) has filed an application for naturalization that is 

pending before the Secretary of Homeland Security or 

a United States district court based on section 336(b) 

of the Immigration and Nationality Act, or has been 

approved for naturalization but not yet sworn in as a 

United States citizen, and the Commissioner of Social 

Security has verified, through procedures established 

in consultation with the Secretary of Homeland Security, that such application is pending or has been approved. 

(3) SPECIFIED FEDERAL PROGRAM DEFINED.—For purposes of 

this title, the term ‘‘specified Federal program’’ means any of 

the following: 

(A) SSI.—The supplemental security income program 

under title XVI of the Social Security Act, including supplementary payments pursuant to an agreement for Federal administration under section 1616(a) of the Social Security Act and payments pursuant to an agreement entered into under section 212(b) of Public Law 93–66. 

(B) FOOD STAMPS.—The food stamp program as defined 

in section 3(l) of the Food Stamp Act of 1977. 

(b) LIMITED ELIGIBILITY FOR DESIGNATED FEDERAL

PROGRAMS.— 

(1) IN GENERAL.—Notwithstanding any other provision of law 

and except as provided in section 403 and paragraph (2), a 

State is authorized to determine the eligibility of an alien who 

is a qualified alien (as defined in section 431) for any designated Federal program (as defined in paragraph (3)). 

(2) EXCEPTIONS.—Qualified aliens under this paragraph shall 

be eligible for any designated Federal program. 

(A) TIME-LIMITED EXCEPTION FOR REFUGEES AND

ASYLEES.— 

(i) MEDICAID.—With respect to the designated Federal program described in paragraph (3)(C), paragraph 


emcdonald on DSK67QTVN1PROD with HEARING
172 

(1) shall not apply to an alien until 7 years after the 

date— 

(I) an alien is admitted to the United States as 

a refugee under section 207 of the Immigration 

and Nationality Act; 

(II) an alien is granted asylum under section 

208 of such Act; 

(III) an alien’s deportation is withheld under 

section 243(h) of such Act (as in effect immediately before the effective date of section 307 of 

division C of Public Law 104–208) or section 

241(b)(3) of such Act (as amended by section 

305(a) of division C of Public Law 104–208); 

(IV) an alien is granted status as a Cuban and 

Haitian entrant (as defined in section 501(e) of the 

Refugee Education Assistance Act of 1980); or 

(V) an alien admitted to the United States as an 

Amerasian immigrant as described in subsection 

(a)(2)(A)(i)(V) until 5 years after the date of such 

alien’s entry into the United States. 

(ii) OTHER DESIGNATED FEDERAL PROGRAMS.—With 

respect to the designated Federal programs under 

paragraph (3) (other than subparagraph (C)), paragraph (1) shall not apply to an alien until 5 years after 

the date— 

(I) an alien is admitted to the United States as 

a refugee under section 207 of the Immigration 

and Nationality Act; 

(II) an alien is granted asylum under section 

208 of such Act; 

(III) an alien’s deportation is withheld under 

section 243(h) of such Act; 

(IV) an alien is granted status as a Cuban and 

Haitian entrant (as defined in section 501(e) of the 

Refugee Education Assistance Act of 1980); or 

(V) an alien admitted to the United States as an 

Amerasian immigrant as described in subsection 

(a)(2)(A)(i)(V) until 5 years after the date of such 

alien’s entry into the United States. 

(B) CERTAIN PERMANENT RESIDENT ALIENS.—An 

alien who— 

(i) is lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act; and 

(ii)(I) has worked 40 qualifying quarters of coverage 

as defined under title II of the Social Security Act or 

can be credited with such qualifying quarters as provided under section 435, and (II) in the case of any 

such qualifying quarter creditable for any period beginning after December 31, 1996, did not receive any 

Federal means-tested public benefit (as provided 

under section 403) during any such period. 

(C) VETERAN AND ACTIVE DUTY EXCEPTION.—An alien 

who is lawfully residing in any State and is— 


emcdonald on DSK67QTVN1PROD with HEARING
173 

(i) a veteran (as defined in section 101, 1101, or 

1301, or as described in section 107 of title 38, United 

States Code) with a discharge characterized as an honorable discharge and not on account of alienage and 

who fulfills the minimum active-duty service requirements of section 5303A(d) of title 38, United States 

Code, 

(ii) on active duty (other than active duty for 

training) in the Armed Forces of the United States, or 

(iii) the spouse or unmarried dependent child of an 

individual described in clause (i) or (ii) or the 

unremarried surviving spouse of an individual described in clause (i) or (ii) who is deceased if the marriage fulfills the requirements of section 1304 of title 

38, United States Code. 

(D) TRANSITION FOR THOSE CURRENTLY RECEIVING BENEFITS.—An alien who on the date of the enactment of this 

Act is lawfully residing in any State and is receiving benefits under such program on the date of the enactment of 

this Act shall continue to be eligible to receive such benefits until January 1, 1997. 

(E) MEDICAID EXCEPTION FOR CERTAIN INDIANS.—With 

respect to eligibility for benefits for the program defined in 

paragraph (3)(C) (relating to the medicaid program), section 401(a) and paragraph (1) shall not apply to any individual described in subsection (a)(2)(G). 

(F) MEDICAID EXCEPTION FOR ALIENS RECEIVING SSI.—An 

alien who is receiving benefits under the program defined 

in subsection (a)(3)(A) (relating to the supplemental security income program) shall be eligible for medical assistance under a State plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) under the same terms and 

conditions that apply to other recipients of benefits under 

the program defined in such subsection. 

(3) DESIGNATED FEDERAL PROGRAM DEFINED.—For purposes 

of this title, the term ‘‘designated Federal program’’ means any 

of the following: 

(A) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES.—The 

program of block grants to States for temporary assistance 

for needy families under part A of title IV of the Social Security Act. 

(B) SOCIAL SERVICES BLOCK GRANT.—The program of 

block grants to States for social services under title XX of 

the Social Security Act. 

(C) MEDICAID.—A State plan approved under title XIX of 

the Social Security Act, other than medical assistance described in section 401(b)(1)(A). 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
174 

SECTION 245A OF THE IMMIGRATION AND NATIONALITY 

ACT 

ADJUSTMENT OF STATUS OF CERTAIN ENTRANTS BEFORE JANUARY 1, 1982, TO THAT OF PERSON ADMITTED FOR LAWFUL RESIDENCE

SEC. 245A. (a) TEMPORARY RESIDENT STATUS.—The Attorney 

General shall adjust the status of an alien to that of an alien lawfully admitted for temporary residence if the alien meets the following requirements: 

(1) TIMELY APPLICATION.— (A) DURING APPLICATION PERIOD.—Except as provided in 

subparagraph (B), the alien must apply for such adjustment during the 12-month period beginning on a date (not 

later than 180 days after the date of enactment of this section) designated by the Attorney General. 

(B) APPLICATION WITHIN 30 DAYS OF SHOW-CAUSE

ORDER.—An alien who, at any time during the first 11 

months of the 12-month period described in subparagraph 

(A), is the subject of an order to show cause issued under 

section 242 (as in effect before October 1, 1996), must 

make application under this section not later than the end 

of the 30-day period beginning either on the first day of 

such 12-month period or on the date of the issuance of 

such order, whichever day is later. 

(C) INFORMATION INCLUDED IN APPLICATION.—Each application under this subsection shall contain such information as the Attorney General may require, including information on living relatives of the applicant with respect to 

whom a petition for preference or other status may be filed 

by the applicant at any later date under section 204(a). 

(2) CONTINUOUS UNLAWFUL RESIDENCE SINCE 1982.— (A) IN GENERAL.—The alien must establish that he entered the United States before January 1, 1982, and that 

he has resided continuously in the United States in an unlawful status since such date and through the date the application is filed under this subsection. 

(B) NONIMMIGRANTS.—In the case of an alien who entered the United States as a nonimmigrant before January 

1, 1982, the alien must establish that the alien’s period of 

authorized stay as a nonimmigrant expired before such 

date through the passage of time or the alien’s unlawful 

status was known to the Government as of such date. 

(C) EXCHANGE VISITORS.—If the alien was at any time a 

nonimmigrant exchange alien (as defined in section 

101(a)(15)(J)), the alien must establish that the alien was 

not subject to the two-year foreign residence requirement 

of section 212(e) or has fulfilled that requirement or received a waiver thereof. 

(3) CONTINUOUS PHYSICAL PRESENCE SINCE ENACTMENT.— 

(A) IN GENERAL.—The alien must establish that the 

alien has been continuously physically present in the 

United States since the date of the enactment of this section. 

(B) TREATMENT OF BRIEF, CASUAL, AND INNOCENT ABSENCES.—An alien shall not be considered to have failed to 


emcdonald on DSK67QTVN1PROD with HEARING
175 

maintained continuous physical presence in the United 

States for purposes of subparagraph (A) by virtue of brief, 

casual, and innocent absences from the United States. 

(C) ADMISSIONS.—Nothing in this section shall be construed as authorizing an alien to apply for admission to, 

or to be admitted to, the United States in order to apply 

for adjustment of status under this subsection. 

(4) ADMISSIBLE AS IMMIGRANT.—The alien must establish 

that he— 

(A) is admissible to the United States as an immigrant, 

except as otherwise provided under subsection (d)(2), 

(B) has not been convicted of any felony or of three or 

more misdemeanors committed in the United States, 

(C) has not assisted in the persecution of any person or 

persons on account of race, religion, nationality, membership in a particular social group, or political opinion, and 

(D) is registered or registering under the Military Selective Service Act, if the alien is required to be so registered 

under that Act. 

For purposes of this subsection, an alien in the status of a 

Cuban and Haitian entrant described in paragraph (1) or (2)(A) 

of section 501(e) of Public Law 96–422 shall be considered to 

have entered the United States and to be in an unlawful status 

in the United States. 

(b) SUBSEQUENT ADJUSTMENT TO PERMANENT RESIDENCE AND

NATURE OF TEMPORARY RESIDENT STATUS.— 

(1) ADJUSTMENT TO PERMANENT RESIDENCE.—The Attorney 

General shall adjust the status of any alien provided lawful 

temporary resident status under subsection (a) to that of an 

alien lawfully admitted for permanent residence if the alien 

meets the following requirements: 

(A) TIMELY APPLICATION AFTER ONE YEAR’S RESIDENCE.— 

The alien must apply for such adjustment during the 2- 

year period beginning with the nineteenth month that begins after the date the alien was granted such temporary 

resident status. 

(B) CONTINUOUS RESIDENCE.— 

(i) IN GENERAL.—The alien must establish that he 

has continuously resided in the United States since 

the date the alien was granted such temporary resident status. 

(ii) TREATMENT OF CERTAIN ABSENCES.—An alien 

shall not be considered to have lost the continuous residence referred to in clause (i) by reason of an absence 

from the United States permitted under paragraph 

(3)(A). 

(C) ADMISSIBLE AS IMMIGRANT.—The alien must establish that he— 

(i) is admissible to the United States as an immigrant, except as otherwise provided under subsection 

(d)(2), and 

(ii) has not been convicted of any felony or three or 

more misdemeanors committed in the United States. 

(D) BASIC CITIZENSHIP SKILLS.— 


emcdonald on DSK67QTVN1PROD with HEARING
176 

(i) IN GENERAL.—The alien must demonstrate that 

he either— 

(I) meets the requirements of section 312(a) (relating to minimal understanding of ordinary 

English and a knowledge and understanding of 

the history and government of the United States), 

or 

(II) is satisfactorily pursuing a course of study 

(recognized by the Attorney General) to achieve 

such an understanding of English and such a 

knowledge and understanding of the history and 

government of the United States. 

(ii) EXCEPTION FOR ELDERLY OR DEVELOPMENTALLY

DISABLED INDIVIDUALS.—The Attorney General may, in 

his discretion, waive all or part of the requirements of 

clause (i) in the case of an alien who is 65 years of age 

or older or who is developmentally disabled. 

(iii) RELATION TO NATURALIZATION EXAMINATION.—In 

accordance with regulations of the Attorney General, 

an alien who has demonstrated under clause (i)(I) that 

the alien meets the requirements of section 312(a) 

may be considered to have satisfied the requirements 

of that section for purposes of becoming naturalized as 

a citizen of the United States under title III. 

(2) TERMINATION OF TEMPORARY RESIDENCE.—The Attorney 

General shall provide for termination of temporary resident 

status granted an alien under subsection (a)— 

(A) if it appears to the Attorney General that the alien 

was in fact not eligible for such status; 

(B) if the alien commits an act that (i) makes the alien 

inadmissible to the United States as an immigrant, except 

as otherwise provided under subsection (d)(2), or (ii) is convicted of any felony or three or more misdemeanors committed in the United States; or 

(C) at the end of the 43rd month beginning after the 

date the alien is granted such status, unless the alien has 

filed an application for adjustment of such status pursuant 

to paragraph (1) and such application has not been denied. 

(3) AUTHORIZED TRAVEL AND EMPLOYMENT DURING TEM- PORARY RESIDENCE.—During the period an alien is in lawful 

temporary resident status granted under subsection (a)— 

(A) AUTHORIZATION OF TRAVEL ABROAD.—The Attorney 

General shall, in accordance with regulations, permit the 

alien to return to the United States after such brief and 

casual trips abroad as reflect an intention on the part of 

the alien to adjust to lawful permanent resident status 

under paragraph (1) and after brief temporary trips abroad 

occasioned by a family obligation involving an occurrence 

such as the illness or death of a close relative or other 

family need. 

(B) AUTHORIZATION OF EMPLOYMENT.—The Attorney 

General shall grant the alien authorization to engage in 

employment in the United States and provide to that alien 

an ‘‘employment authorized’’ endorsement or other appropriate work permit. 


emcdonald on DSK67QTVN1PROD with HEARING
177 

(c) APPLICATIONS FOR ADJUSTMENT OF STATUS.— 

(1) TO WHOM MAY BE MADE.—The Attorney General shall 

provide that applications for adjustment of status under subsection (a) may be filed— 

(A) with the Attorney General, or 

(B) with a qualified designated entity, but only if the applicant consents to the forwarding of the application to the 

Attorney General. 

As used in this section, the term ‘‘qualified designated entity’’ 

means an organization or person designated under paragraph 

(2). 

(2) DESIGNATION OF QUALIFIED ENTITIES TO RECEIVE APPLICATIONS.—For purposes of assisting in the program of legalization provided under this section, the Attorney General— 

(A) shall designate qualified voluntary organizations and 

other qualified State, local, and community organizations, 

and 

(B) may designate such other persons as the Attorney 

General determines are qualified and have substantial experience, demonstrated competence, and traditional longterm involvement in the preparation and submittal of applications for adjustment of status under section 209 or 

245, Public Law 89–732, or Public Law 95–145. 

(3) TREATMENT OF APPLICATIONS BY DESIGNATED ENTITIES.— 

Each qualified designated entity must agree to forward to the 

Attorney General applications filed with it in accordance with 

paragraph (1)(B) but not to forward to the Attorney General 

applications filed with it unless the applicant has consented to 

such forwarding. No such entity may make a determination required by this section to be made by the Attorney General. 

(4) LIMITATION ON ACCESS TO INFORMATION.—Files and 

records of qualified designated entities relating to an alien’s 

seeking assistance or information with respect to filing an application under this section are confidential and the Attorney 

General and the Service shall not have access to such files or 

records relating to an alien without the consent of the alien. 

(5) CONFIDENTIALITY OF INFORMATION.— 

(A) IN GENERAL.—Except as provided in this paragraph, 

neither the Attorney General, nor any other official or employee of the Department of Justice, or bureau or agency 

thereof, may— 

(i) use the information furnished by the applicant 

pursuant to an application filed under this section for 

any purpose other than to make a determination on 

the application, for enforcement of paragraph (6), or 

for the preparation of reports to Congress under section 404 of the Immigration Reform and Control Act of 

1986; 

(ii) make any publication whereby the information 

furnished by any particular applicant can be identified; or 

(iii) permit anyone other than the sworn officers and 

employees of the Department or bureau or agency or, 

with respect to applications filed with a designated enVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00183 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
178 

tity, that designated entity, to examine individual applications. 

(B) REQUIRED DISCLOSURES.—The Attorney General 

shall provide the information furnished under this section, 

and any other information derived from such furnished information, to a duly recognized law enforcement entity in 

connection with a criminal investigation or prosecution, 

when such information is requested in writing by such entity, or to an official coroner for purposes of affirmatively 

identifying a deceased individual (whether or not such individual is deceased as a result of a crime). 

(C) AUTHORIZED DISCLOSURES.—The Attorney General 

may provide, in the Attorney General’s discretion, for the 

furnishing of information furnished under this section in 

the same manner and circumstances as census information 

may be disclosed by the Secretary of Commerce under section 8 of title 13, United States Code. 

(D) CONSTRUCTION.— (i) IN GENERAL.—Nothing in this paragraph shall be 

construed to limit the use, or release, for immigration 

enforcement purposes or law enforcement purposes of 

information contained in files or records of the Service 

pertaining to an application filed under this section, 

other than information furnished by an applicant pursuant to the application, or any other information derived from the application, that is not available from 

any other source. 

(ii) CRIMINAL CONVICTIONS.—Information concerning 

whether the applicant has at any time been convicted 

of a crime may be used or released for immigration enforcement or law enforcement purposes. 

(E) CRIME.—Whoever knowingly uses, publishes, or permits information to be examined in violation of this paragraph shall be fined not more than $10,000. 

(6) PENALTIES FOR FALSE STATEMENTS IN APPLICATIONS.— Whoever files an application for adjustment of status under 

this section and knowingly and willfully falsifies, misrepresents, conceals, or covers up a material fact or makes any false, 

fictitious, or fraudulent statements or representations, or 

makes or uses any false writing or document knowing the 

same to contain any false, fictitious, or fraudulent statement or 

entry, shall be fined in accordance with title 18, United States 

Code, or imprisoned not more than five years, or both. 

(7) APPLICATION FEES.— 

(A) FEE SCHEDULE.—The Attorney General shall provide 

for a schedule of fees to be charged for the filing of applications for adjustment under subsection (a) or (b)(1). The Attorney General shall provide for an additional fee for filing 

an application for adjustment under subsection (b)(1) after 

the end of the first year of the 2-year period described in 

subsection (b)(1)(A). 

(B) USE OF FEES.—The Attorney General shall deposit 

payments received under this paragraph in a separate account and amounts in such account shall be available, 

without fiscal year limitation, to cover administrative and 


emcdonald on DSK67QTVN1PROD with HEARING
179 

other expenses incurred in connection with the review of 

applications filed under this section. 

(C) IMMIGRATION-RELATED UNFAIR EMPLOYMENT PRAC- TICES.—Not to exceed $3,000,000 of the unobligated balances remaining in the account established in subparagraph (B) shall be available in fiscal year 1992 and each 

fiscal year thereafter for grants, contracts, and cooperative 

agreements to community-based organizations for outreach 

programs, to be administered by the Office of Special 

Counsel for Immigration-Related Unfair Employment 

Practices: Provided, That such amounts shall be in addition to any funds appropriated to the Office of Special 

Counsel for such purposes: Provided further, That none of 

the funds made available by this section shall be used by 

the Office of Special Counsel to establish regional offices. 

(d) WAIVER OF NUMERICAL LIMITATIONS AND CERTAIN GROUNDS

FOR EXCLUSION.— 

NUMERICAL LIMITATIONS DO NOT APPLY.—The numerical limitations of sections 201 and 202 shall not apply to the adjustment of aliens to lawful permanent resident status under this 

section. 

(2) WAIVER OF GROUNDS FOR EXCLUSION.—In the determination of an alien’s admissibility under subsections (a)(4)(A), 

(b)(1)(C)(i), and (b)(2)(B)— 

(A) GROUNDS OF EXCLUSION NOT APPLICABLE.—The provisions of paragraphs (5) and (7)(A) of section 212(a) shall 

not apply. 

(B) WAIVER OF OTHER GROUNDS.— (i) IN GENERAL.—Except as provided in clause (ii), 

the Attorney General may waive any other provision 

of section 212(a) in the case of individual aliens for humanitarian purposes, to assure family unity, or when 

it is otherwise in the public interest. 

(ii) GROUNDS THAT MAY NOT BE WAIVED.—The following provisions of section 212(a) may not be waived 

by the Attorney General under clause (i): 

(I) Paragraphs (2)(A) and (2)(B) (relating to 

criminals). 

(II) Paragraph (2)(C) (relating to drug offenses), 

except for so much of such paragraph as relates to 

a single offense of simple possession of 30 grams 

or less of marihuana. 

(III) Paragraph (3) (relating to security and related grounds). 

(IV) Paragraph (4) (relating to aliens likely to 

become public charges) insofar as it relates to an 

application for adjustment to permanent residence. 

Subclause (IV) (prohibiting the waiver of section 

212(a)(4)) shall not apply to an alien who is or was an 

aged, blind, or disabled individual (as defined in section 1614(a)(1) of the Social Security Act). 

(iii) SPECIAL RULE FOR DETERMINATION OF PUBLIC

CHARGE.—An alien is not ineligible for adjustment of 

status under this section due to being inadmissible 


emcdonald on DSK67QTVN1PROD with HEARING
180 

under section 212(a)(4) if the alien demonstrates a history of employment in the United States evidencing 

self-support without receipt of public cash assistance. 

(C) MEDICAL EXAMINATION.—The alien shall be required, 

at the alien’s expense, to undergo such a medical examination (including a determination of immunization status) as 

is appropriate and conforms to generally accepted professional standards of medical practice. 

(e) TEMPORARY STAY OF DEPORTATION AND WORK AUTHORIZATION

FOR CERTAIN APPLICANTS.— (1) BEFORE APPLICATION PERIOD.—The Attorney General 

shall provide that in the case of an alien who is apprehended 

before the beginning of the application period described in subsection (a)(1)(A) and who can establish a prima facie case of 

eligibility to have his status adjusted under subsection (a) (but 

for the fact that he may not apply for such adjustment until 

the beginning of such period), until the alien has had the opportunity during the first 30 days of the application period to 

complete the filing of an application for adjustment, the alien— 

(A) may not be deported, and 

(B) shall be granted authorization to engage in employment in the United States and be provided an ‘‘employment authorized’’ endorsement or other appropriate work 

permit. 

(2) DURING APPLICATION PERIOD.—The Attorney General 

shall provide that in the case of an alien who presents a prima 

facie application for adjustment of status under subsection (a) 

during the application period, and until a final determination 

on the application has been made in accordance with this section, the alien— 

(A) may not be deported, and 

(B) shall be granted authorization to engage in employment in the United States and be provided an ‘‘employment authorized’’ endorsement or other appropriate work 

permit. 

(f) ADMINISTRATIVE AND JUDICIAL REVIEW.— (1) ADMINISTRATIVE AND JUDICIAL REVIEW.—There shall be 

no administrative or judicial review of a determination respecting an application for adjustment of status under this section 

except in accordance with this subsection. 

(2) NO REVIEW FOR LATE FILINGS.—No denial of adjustment 

of status under this section based on a late filing of an application for such adjustment may be reviewed by a court of the 

United States or of any State or reviewed in any administrative proceeding of the United States Government. 

(3) ADMINISTRATIVE REVIEW.— 

(A) SINGLE LEVEL OF ADMINISTRATIVE APPELLATE RE- VIEW.—The Attorney General shall establish an appellate 

authority to provide for a single level of administrative appellate review of a determination described in paragraph 

(1). 

(B) STANDARD FOR REVIEW.—Such administrative appellate review shall be based solely upon the administrative 

record established at the time of the determination on the 

application and upon such additional or newly discovered 


emcdonald on DSK67QTVN1PROD with HEARING
181 

evidence as may not have been available at the time of the 

determination. 

(4) JUDICIAL REVIEW.— (A) LIMITATION TO REVIEW OF DEPORTATION.—There 

shall be judicial review of such a denial only in the judicial 

review of an order of deportation under section 106 (as in 

effect before October 1, 1996). 

(B) STANDARD FOR JUDICIAL REVIEW.—Such judicial review shall be based solely upon the administrative record 

established at the time of the review by the appellate authority and the findings of fact and determinations contained in such record shall be conclusive unless the applicant can establish abuse of discretion or that the findings 

are directly contrary to clear and convincing facts contained in the record considered as a whole. 

(C) JURISDICTION OF COURTS.—Notwithstanding any 

other provision of law, no court shall have jurisdiction of 

any cause of action or claim by or on behalf of any person 

asserting an interest under this section unless such person 

in fact filed an application under this section within the 

period specified by subsection (a)(1), or attempted to file a 

complete application and application fee with an authorized legalization officer of the Service but had the application and fee refused by that officer. 

(g) IMPLEMENTATION OF SECTION.— (1) REGULATIONS.—The Attorney General, after consultation 

with the Committees on the Judiciary of the House of Representatives and of the Senate, shall prescribe— 

(A) regulations establishing a definition of the term ‘‘resided continuously’’, as used in this section, and the evidence needed to establish that an alien has resided continuously in the United States for purposes of this section, 

and 

(B) such other regulations as may be necessary to carry 

out this section. 

(2) CONSIDERATIONS.—In prescribing regulations described in 

paragraph (1)(A)— 

(A) PERIODS OF CONTINUOUS RESIDENCE.—The Attorney 

General shall specify individual periods, and aggregate periods, of absence from the United States which will be considered to break a period of continuous residence in the 

United States and shall take into account absences due 

merely to brief and casual trips abroad. 

(B) ABSENCES CAUSED BY DEPORTATION OR ADVANCED PAROLE.—The Attorney General shall provide that— 

(i) an alien shall not be considered to have resided 

continuously in the United States, if, during any period for which continuous residence is required, the 

alien was outside the United States as a result of a departure under an order of deportation, and 

(ii) any period of time during which an alien is outside the United States pursuant to the advance parole 

procedures of the Service shall not be considered as 

part of the period of time during which an alien is outside the United States for purposes of this section. 


emcdonald on DSK67QTVN1PROD with HEARING
182 

(C) WAIVERS OF CERTAIN ABSENCES.—The Attorney General may provide for a waiver, in the discretion of the Attorney General, of the periods specified under subparagraph (A) in the case of an absence from the United States 

due merely to a brief temporary trip abroad required by 

emergency or extenuating circumstances outside the control of the alien. 

(D) USE OF CERTAIN DOCUMENTATION.—The Attorney 

General shall require that— 

(i) continuous residence and physical presence in the 

United States must be established through documents, 

together with independent corroboration of the information contained in such documents, and 

(ii) the documents provided under clause (i) be employment-related if employment-related documents 

with respect to the alien are available to the applicant. 

(3) INTERIM FINAL REGULATIONS.—Regulations prescribed 

under this section may be prescribed to take effect on an interim final basis if the Attorney General determines that this 

is necessary in order to implement this section in a timely 

manner. 

(h) TEMPORARY DISQUALIFICATION OF NEWLY LEGALIZED ALIENS

FROM RECEIVING CERTAIN PUBLIC WELFARE ASSISTANCE.— 

(1) IN GENERAL.—During the five-year period beginning on 

the date an alien was granted lawful temporary resident status 

under subsection (a), and notwithstanding any other provision 

of law— 

(A) except as provided in paragraphs (2) and (3), the 

alien is not eligible for— 

(i) any program of financial assistance furnished 

under Federal law (whether through grant, loan, guarantee, or otherwise) on the basis of financial need, as 

such programs are identified by the Attorney General 

in consultation with other appropriate heads of the 

various departments and agencies of Government (but 

in any event including the State program of assistance 

under part A of title IV of the Social Security Act), 

(ii) medical assistance under a State plan approved 

under title XIX of the Social Security Act, and 

(iii) assistance under the Food and Nutrition Act of 

2008; and 

(B) a State or political subdivision therein may, to the 

extent consistent with subparagraph (A) and paragraphs 

(2) and (3), provide that the alien is not eligible for the 

programs of financial assistance or for medical assistance 

described in subparagraph (A)(ii) furnished under the law 

of that State or political subdivision. 

Unless otherwise specifically provided by this section or other 

law, an alien in temporary lawful residence status granted 

under subsection (a) shall not be considered (for purposes of 

any law of a State or political subdivision providing for a program of financial assistance) to be permanently residing in the 

United States under color of law. 

(2) EXCEPTIONS.—Paragraph (1) shall not apply— 


emcdonald on DSK67QTVN1PROD with HEARING
183 

(A) to a Cuban and Haitian entrant (as defined in paragraph (1) or (2)(A) of section 501(e) of Public Law 96–422, 

as in effect on April 1, 1983), or 

(B) in the case of assistance (other than assistance under 

a State program funded under part A of title IV of the Social Security Act) which is furnished to an alien who is an 

aged, blind, or disabled individual (as defined in section 

1614(a)(1) of the Social Security Act). 

(3) RESTRICTED MEDICAID BENEFITS.— (A) CLARIFICATION OF ENTITLEMENT.—Subject to the restrictions under subparagraph (B), for the purpose of providing aliens with eligibility to receive medical assistance— 

(i) paragraph (1) shall not apply, 

(ii) aliens who would be eligible for medical assistance but for the provisions of paragraph (1) shall be 

deemed, for purposes of title XIX of the Social Security 

Act, to be so eligible, and 

(iii) aliens lawfully admitted for temporary residence 

under this section, such status not having changed, 

shall be considered to be permanently residing in the 

United States under color of law. 

(B) RESTRICTION OF BENEFITS.— (i) LIMITATION TO EMERGENCY SERVICES AND SERV- ICES FOR PREGNANT WOMEN.—Notwithstanding any 

provision of title XIX of the Social Security Act (including subparagraphs (B) and (C) of section 

1902(a)(10) of such Act), aliens who, but for subparagraph (A), would be ineligible for medical assistance 

under paragraph (1), are only eligible for such assistance with respect to— 

(I) emergency services (as defined for purposes 

of section 1916(a)(2)(D) of the Social Security Act), 

and 

(II) services described in section 1916(a)(2)(B) of 

such Act (relating to service for pregnant women). 

(ii) NO RESTRICTION FOR EXEMPT ALIENS AND CHIL- DREN.—The restrictions of clause (i) shall not apply to 

aliens who are described in paragraph (2) or who are 

under 18 years of age. 

(C) DEFINITION OF MEDICAL ASSISTANCE.—In this paragraph, the term ‘‘medical assistance’’ refers to medical assistance under a State plan approved under title XIX of 

the Social Security Act. 

(4) TREATMENT OF CERTAIN PROGRAMS.—Assistance furnished 

under any of the following provisions of law shall not be construed to be financial assistance described in paragraph 

(1)(A)(i): 

(A) The Richard B. Russell National School Lunch Act. 

(B) The Child Nutrition Act of 1966. 

(C) The The Carl D. Perkins Career and Technical Education Act of 2006. 

(D) Title I of the Elementary and Secondary Education 

Act of 1965. 

(E) The Headstart-Follow Through Act. 


emcdonald on DSK67QTVN1PROD with HEARING
184 

(F) Title I of the Workforce Innovation and Opportunity 

Act. 

(G) Title IV of the Higher Education Act of 1965. 

(H) The Public Health Service Act. 

(I) Titles V, XVI, and XX, and parts B, D, and E of title 

IV, of the Social Security Act (and titles I, X, XIV, and XVI 

of such Act as in effect without regard to the amendment 

made by section 301 of the Social Security Amendments of 

1972). 

(5) ADJUSTMENT NOT AFFECTING FASCELL-STONE BENEFITS.— For the purpose of section 501 of the Refugee Education Assistance Act of 1980 (Public Law 96–122), assistance shall be continued under such section with respect to an alien without regard to the alien’s adjustment of status under this section. 

(i) DISSEMINATION OF INFORMATION ON LEGALIZATION PROGRAM.—Beginning not later than the date designated by the Attorney General under subsection (a)(1)(A), the Attorney General, in cooperation with qualified designated entities, shall broadly disseminate information respecting the benefits which aliens may receive 

under this section and the requirements to obtain such benefits. 

RICHARD B. RUSSELL NATIONAL SCHOOL LUNCH ACT 

* * * * * * * 

SEC. 17. CHILD AND ADULT CARE FOOD PROGRAM. 

(a) PROGRAM PURPOSE, GRANT AUTHORITY AND INSTITUTION ELI- GIBILITY.— 

(1) IN GENERAL.— 

(A) PROGRAM PURPOSE.— 

(i) FINDINGS.—Congress finds that— 

(I) eating habits and other wellness-related behavior habits are established early in life; and 

(II) good nutrition and wellness are important 

contributors to the overall health of young children and essential to cognitive development. 

(ii) PURPOSE.—The purpose of the program authorized by this section is to provide aid to child and adult 

care institutions and family or group day care homes 

for the provision of nutritious foods that contribute to 

the wellness, healthy growth, and development of 

young children, and the health and wellness of older 

adults and chronically impaired disabled persons. 

(B) GRANT AUTHORITY.—The Secretary may carry out a 

program to assist States through grants-in-aid and other 

means to initiate and maintain nonprofit food service programs for children in institutions providing child care. 

(2) DEFINITION OF INSTITUTION.—In this section, the term 

‘‘institution’’ means— 

(A) any public or private nonprofit organization providing nonresidential child care or day care outside school 

hours for school children, including any child care center, 

settlement house, recreational center, Head Start center, 

and institution providing child care facilities for children 

with disabilities; 


emcdonald on DSK67QTVN1PROD with HEARING
185 

(B) any other private organization providing nonresidential child care or day care outside school hours for school 

children, if— 

(i) at least 25 percent of the children served by the 

organization meet the income eligibility criteria established under section 9(b) for free or reduced price 

meals; or 

(ii) the organization receives compensation from 

amounts granted to the States under title XX of the 

Social Security Act (42 U.S.C. 1397 et seq.) (but only 

if the organization receives compensation under that 

title for at least 25 percent of its enrolled children or 

25 percent of its licensed capacity, whichever is less); 

(C) any public or private nonprofit organization acting as 

a sponsoring organization for one or more of the organizations described in subparagraph (A) or (B) or for an adult 

day care center (as defined in subsection (o)(2)); 

(D) any other private organization acting as a sponsoring organization for, and that is part of the same legal 

entity as, one or more organizations that are— 

(i) described in subparagraph (B); or 

(ii) proprietary title XIX or title XX centers (as defined in subsection (o)(2)); 

(E) any public or private nonprofit organization acting as 

a sponsoring organization for one or more family or group 

day care homes; and 

(F) any emergency shelter (as defined in subsection (t)). 

(3) AGE LIMIT.—Except as provided in subsection (r), reimbursement may be provided under this section only for meals 

or supplements served to children not over 12 years of age (except that such age limitation shall not be applicable for children of migrant workers if 15 years of age or less or for children with disabilities). 

(4) ADDITIONAL GUIDELINES.—The Secretary may establish 

separate guidelines for institutions that provide care to school 

children outside of school hours. 

(5) LICENSING.—In order to be eligible, an institution (except 

a school or family or group day care home sponsoring organization) or family or group day care home shall— 

(A)(i) be licensed, or otherwise have approval, by the appropriate Federal, State, or local licensing authority; or 

(ii) be in compliance with appropriate procedures for renewing participation in the program, as prescribed by the 

Secretary, and not be the subject of information possessed 

by the State indicating that the license of the institution 

or home will not be renewed; 

(B) if Federal, State, or local licensing or approval is not 

available— 

(i) meet any alternate approval standards established by the appropriate State or local governmental 

agency; or 

(ii) meet any alternate approval standards established by the Secretary after consultation with the 

Secretary of Health and Human Services; or 


emcdonald on DSK67QTVN1PROD with HEARING
186 

(C) if the institution provides care to school children outside of school hours and Federal, State, or local licensing 

or approval is not required for the institution, meet State 

or local health and safety standards. 

(6) ELIGIBILITY CRITERIA.—No institution shall be eligible to 

participate in the program unless it satisfies the following criteria: 

(A) accepts final administrative and financial responsibility for management of an effective food service; 

(B) has not been seriously deficient in its operation of 

the child and adult care food program, or any other program under this Act or the Child Nutrition Act of 1966, or 

has not been determined to be ineligible to participate in 

any other publicly funded program by reason of violation 

of the requirements of the program, for a period of time 

specified by the Secretary; 

(C)(i) will provide adequate supervisory and operational 

personnel for overall monitoring and management of the 

child care food program; and 

(ii) in the case of a sponsoring organization, the organization shall employ an appropriate number of monitoring 

personnel based on the number and characteristics of child 

care centers and family or group day care homes sponsored 

by the organization, as approved by the State (in accordance with regulations promulgated by the Secretary), to 

ensure effective oversight of the operations of the child 

care centers and family or group day care homes; 

(D) in the case of a family or group day care home sponsoring organization that employs more than one employee, 

the organization does not base payments to an employee of 

the organization on the number of family or group day 

care homes recruited; 

(E) in the case of a sponsoring organization, the organization has in effect a policy that restricts other employment by employees that interferes with the responsibilities 

and duties of the employees of the organization with respect to the program; and 

(F) in the case of a sponsoring organization that applies 

for initial participation in the program on or after the date 

of the enactment of this subparagraph and that operates 

in a State that requires such institutions to be bonded 

under State law, regulation, or policy, the institution is 

bonded in accordance with such law, regulation, or policy. 

(b) For the fiscal year ending September 30, 1979, and for each 

subsequent fiscal year, the Secretary shall provide cash assistance 

to States for meals as provided in subsection (f) of this section, except that, in any fiscal year, the aggregate amount of assistance 

provided to a State by the Secretary under this section shall not 

exceed the sum of (1) the Federal funds provided by the State to 

participating institutions within the State for that fiscal year and 

(2) any funds used by the State under section 10 of the Child Nutrition Act of 1966. 

(c)(1) For purposes of this section, except as provided in subsection (f)(3), the national average payment rate for free lunches 

and suppers, the national average payment rate for reduced price 


emcdonald on DSK67QTVN1PROD with HEARING
187 

lunches and suppers, and the national average payment rate for 

paid lunches and suppers shall be the same as the national average 

payment rates for free lunches, reduced price lunches, and paid 

lunches, respectively, under sections 4 and 11 of this Act as appropriate (as adjusted pursuant to section 11(a) of this Act). 

(2) For purposes of this section, except as provided in subsection 

(f)(3), the national average payment rate for free breakfasts, the 

national average payment rate for reduced price breakfasts, and 

the national average payment rate for paid breakfasts shall be the 

same as the national average payment rates for free breakfasts, reduced price breakfasts, and paid breakfasts, respectively, under 

section 4(b) of the Child Nutrition Act of 1966 (as adjusted pursuant to section 11(a) of this Act). 

(3) For purposes of this section, except as provided in subsection 

(f)(3), the national average payment rate for free supplements shall 

be 30 cents, the national average payment rate for reduced price 

supplements shall be one-half the rate for free supplements, and 

the national average payment rate for paid supplements shall be 

2.75 cents (as adjusted pursuant to section 11(a) of this Act). 

(4) Determinations with regard to eligibility for free and reduced 

price meals and supplements shall be made in accordance with the 

income eligibility guidelines for free lunches and reduced price 

lunches, respectively, under section 9 of this Act. 

(5) A child shall be considered automatically eligible for benefits 

under this section without further application or eligibility determination, if the child is enrolled as a participant in a Head Start 

program authorized under the Head Start Act (42 U.S.C. 9831 et 

seq.), on the basis of a determination that the child meets the eligibility criteria prescribed under section 645(a)(1)(B) of the Head 

Start Act (42 U.S.C. 9840(a)(1)(B)). 

(6) A child who has not yet entered kindergarten shall be considered automatically eligible for benefits under this section without 

further application or eligibility determination if the child is enrolled as a participant in the Even Start program under part B of 

chapter 1 of title I of the Elementary and Secondary Education Act 

of 1965 (20 U.S.C. 2741 et seq.). 

(d) INSTITUTION APPROVAL AND APPLICATIONS.— (1) INSTITUTION APPROVAL.— (A) ADMINISTRATIVE CAPABILITY.—Subject to subparagraph (B) and except as provided in subparagraph (C), the 

State agency shall approve an institution that meets the 

requirements of this section for participation in the child 

and adult care food program if the State agency determines that the institution— 

(i) is financially viable; 

(ii) is administratively capable of operating the program (including whether the sponsoring organization 

has business experience and management plans appropriate to operate the program) described in the application of the institution; and 

(iii) has internal controls in effect to ensure program 

accountability. 

(B) APPROVAL OF PRIVATE INSTITUTIONS.— 

(i) IN GENERAL.—In addition to the requirements established by subparagraph (A) and subject to clause 


emcdonald on DSK67QTVN1PROD with HEARING
188 

(ii), the State agency shall approve a private institution that meets the requirements of this section for 

participation in the child and adult care food program 

only if— 

(I) the State agency conducts a satisfactory visit 

to the institution before approving the participation of the institution in the program; and 

(II) the institution— 

(aa) has tax exempt status under the Internal Revenue Code of 1986; 

(bb) is operating a Federal program requiring nonprofit status to participate in the program; or 

(cc) is described in subsection (a)(2)(B). 

(ii) EXCEPTION FOR FAMILY OR GROUP DAY CARE

HOMES.—Clause (i) shall not apply to a family or 

group day care home. 

(C) EXCEPTION FOR CERTAIN SPONSORING ORGANIZATIONS.— 

(i) IN GENERAL.—The State agency may approve an 

eligible institution acting as a sponsoring organization 

for one or more family or group day care homes or centers that, at the time of application, is not participating in the child and adult care food program only 

if the State agency determines that— 

(I) the institution meets the requirements established by subparagraphs (A) and (B); and 

(II) the participation of the institution will help 

to ensure the delivery of benefits to otherwise 

unserved family or group day care homes or centers or to unserved children in an area. 

(ii) CRITERIA FOR SELECTION.—The State agency 

shall establish criteria for approving an eligible institution acting as a sponsoring organization for one or 

more family or group day care homes or centers that, 

at the time of application, is not participating in the 

child and adult care food program for the purpose of 

determining if the participation of the institution will 

help ensure the delivery of benefits to otherwise 

unserved family or group day care homes or centers or 

to unserved children in an area. 

(D) NOTIFICATION TO APPLICANTS.—Not later than 30 

days after the date on which an applicant institution files 

a completed application with the State agency, the State 

agency shall notify the applicant institution whether the 

institution has been approved or disapproved to participate 

in the child and adult care food program. 

(E) PERMANENT OPERATING AGREEMENTS.— 

(i) IN GENERAL.—Subject to clauses (ii) and (iii), to 

participate in the child and adult care food program, 

an institution that meets the conditions of eligibility 

described in this subsection shall be required to enter 

into a permanent agreement with the applicable State 

agency. 


emcdonald on DSK67QTVN1PROD with HEARING
189 

(ii) AMENDMENTS.—A permanent agreement described in clause (i) may be amended as necessary to 

ensure that the institution is in compliance with all 

requirements established in this section or by the Secretary. 

(iii) TERMINATION.—A permanent agreement described in clause (i)— 

(I) may be terminated for convenience by the institution or State agency that is a party to the 

permanent agreement; and 

(II) shall be terminated— 

(aa) for cause by the applicable State agency in accordance with paragraph (5); or 

(bb) on termination of participation of the 

institution in the child and adult care food 

program. 

(2) PROGRAM APPLICATIONS.— 

(A) IN GENERAL.—The Secretary shall develop a policy 

under which each institution providing child care that participates in the program under this section shall— 

(i) submit to the State agency an initial application 

to participate in the program that meets all requirements established by the Secretary by regulation; 

(ii) annually confirm to the State agency that the institution, and any facilities of the institution in which 

the program is operated by a sponsoring organization, 

is in compliance with subsection (a)(5); and 

(iii) annually submit to the State agency any additional information necessary to confirm that the institution is in compliance with all other requirements to 

participate in the program, as established in this Act 

and by the Secretary by regulation. 

(B) REQUIRED REVIEWS OF SPONSORED FACILITIES.— (i) IN GENERAL.—The Secretary shall develop a policy under which each sponsoring organization participating in the program under this section shall conduct— 

(I) periodic unannounced site visits at not less 

than 3-year intervals to sponsored child and adult 

care centers and family or group day care homes 

to identify and prevent management deficiencies 

and fraud and abuse under the program; and 

(II) at least 1 scheduled site visit each year to 

sponsored child and adult care centers and family 

or group day care homes to identify and prevent 

management deficiencies and fraud and abuse 

under the program and to improve program operations. 

(ii) VARIED TIMING.—Sponsoring organizations shall 

vary the timing of unannounced reviews under clause 

(i)(I) in a manner that makes the reviews unpredictable to sponsored facilities. 

(C) REQUIRED REVIEWS OF INSTITUTIONS.—The Secretary 

shall develop a policy under which each State agency shall 

conduct— 


emcdonald on DSK67QTVN1PROD with HEARING
190 

(i) at least 1 scheduled site visit at not less than 3- 

year intervals to each institution under the State 

agency participating in the program under this section— 

(I) to identify and prevent management deficiencies and fraud and abuse under the program; 

and 

(II) to improve program operations; and 

(ii) more frequent reviews of any institution that— 

(I) sponsors a significant share of the facilities 

participating in the program; 

(II) conducts activities other than the program 

authorized under this section; 

(III) has serious management problems, as identified in a prior review, or is at risk of having serious management problems; or 

(IV) meets such other criteria as are defined by 

the Secretary. 

(D) DETECTION AND DETERRENCE OF ERRONEOUS PAYMENTS AND FALSE CLAIMS.— 

(i) IN GENERAL.—The Secretary may develop a policy 

to detect and deter, and recover erroneous payments 

to, and false claims submitted by, institutions, sponsored child and adult care centers, and family or group 

day care homes participating in the program under 

this section. 

(ii) BLOCK CLAIMS.— (I) DEFINITION OF BLOCK CLAIM.—In this clause, 

the term ‘‘block claim’’ has the meaning given the 

term in section 226.2 of title 7, Code of Federal 

Regulations (or successor regulations). 

(II) PROGRAM EDIT CHECKS.—The Secretary may 

not require any State agency, sponsoring organization, or other institution to perform edit checks 

or on-site reviews relating to the detection of block 

claims by any child care facility. 

(III) ALLOWANCE.—Notwithstanding subclause 

(II), the Secretary may require any State agency, 

sponsoring organization, or other institution to 

collect, store, and transmit to the appropriate entity information necessary to develop any other 

policy developed under clause (i). 

(3) PROGRAM INFORMATION.— 

(A) IN GENERAL.—On enrollment of a child in a sponsored child care center or family or group day care home 

participating in the program, the center or home (or its 

sponsoring organization) shall provide to the child’s parents or guardians— 

(i) information that describes the program and its 

benefits; and 

(ii) the name and telephone number of the sponsoring organization of the center or home and the 

State agency involved in the operation of the program. 

(B) FORM.—The information described in subparagraph 

(A) shall be in a form and, to the maximum extent pracVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00196 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
191 

ticable, language easily understandable by the child’s parents or guardians. 

(4) ALLOWABLE ADMINISTRATIVE EXPENSES FOR SPONSORING

ORGANIZATIONS.—In consultation with State agencies and sponsoring organizations, the Secretary shall develop, and provide 

for the dissemination to State agencies and sponsoring organizations of, a list of allowable reimbursable administrative expenses for sponsoring organizations under the program. 

(5) TERMINATION OR SUSPENSION OF PARTICIPATING ORGANI- ZATIONS.— 

(A) IN GENERAL.—The Secretary shall establish procedures for the termination of participation by institutions 

and family or group day care homes under the program. 

(B) STANDARDS.—Procedures established pursuant to 

subparagraph (A) shall include standards for terminating 

the participation of an institution or family or group day 

care home that— 

(i) engages in unlawful practices, falsifies information provided to the State agency, or conceals a criminal background; or 

(ii) substantially fails to fulfill the terms of its agreement with the State agency. 

(C) CORRECTIVE ACTION.—Procedures established pursuant to subparagraph (A)— 

(i) shall require an entity described in subparagraph 

(B) to undertake corrective action; and 

(ii) may require the immediate suspension of operation of the program by an entity described in subparagraph (B), without the opportunity for corrective 

action, if the State agency determines that there is imminent threat to the health or safety of a participant 

at the entity or the entity engages in any activity that 

poses a threat to public health or safety. 

(D) HEARING.— 

(i) IN GENERAL.—Except as provided in clause (ii), 

an institution or family or group day care home shall 

be provided a fair hearing in accordance with subsection (e)(1) prior to any determination to terminate 

participation by the institution or family or group day 

care home under the program. 

(ii) EXCEPTION FOR FALSE OR FRAUDULENT CLAIMS.— 

(I) IN GENERAL.—If a State agency determines 

that an institution has knowingly submitted a 

false or fraudulent claim for reimbursement, the 

State agency may suspend the participation of the 

institution in the program in accordance with this 

clause. 

(II) REQUIREMENT FOR REVIEW.—Prior to any 

determination to suspend participation of an institution under subclause (I), the State agency shall 

provide for an independent review of the proposed 

suspension in accordance with subclause (III). 

(III) REVIEW PROCEDURE.—The review shall— 

(aa) be conducted by an independent and 

impartial official other than, and not accountVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00197 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
192 

able to, any person involved in the determination to suspend the institution; 

(bb) provide the State agency and the institution the right to submit written documentation relating to the suspension, including 

State agency documentation of the alleged 

false or fraudulent claim for reimbursement 

and the response of the institution to the documentation; 

(cc) require the reviewing official to determine, based on the review, whether the State 

agency has established, based on a preponderance of the evidence, that the institution has 

knowingly submitted a false or fraudulent 

claim for reimbursement; 

(dd) require the suspension to be in effect 

for not more than 120 calendar days after the 

institution has received notification of a determination of suspension in accordance with 

this clause; and 

(ee) require the State agency during the 

suspension to ensure that payments continue 

to be made to sponsored centers and family 

and group day care homes meeting the requirements of the program. 

(IV) HEARING.—A State agency shall provide an 

institution that has been suspended from participation in the program under this clause an opportunity for a fair hearing on the suspension conducted in accordance with subsection (e)(1). 

(E) LIST OF DISQUALIFIED INSTITUTIONS AND INDIVIDUALS.— 

(i) IN GENERAL.—The Secretary shall maintain a list 

of institutions, sponsored family or group day care 

homes, and individuals that have been terminated or 

otherwise disqualified from participation in the program. 

(ii) AVAILABILITY.—The Secretary shall make the list 

available to State agencies for use in approving or renewing applications by institutions, sponsored family 

or group day care homes, and individuals for participation in the program. 

(e) HEARINGS.— 

(1) IN GENERAL.—Except as provided in paragraph (4), each 

State agency shall provide, in accordance with regulations promulgated by the Secretary, an opportunity for a fair hearing 

and a prompt determination to any institution aggrieved by 

any action of the State agency that affects— 

(A) the participation of the institution in the program 

authorized by this section; or 

(B) the claim of the institution for reimbursement under 

this section. 

(2) REIMBURSEMENT.—In accordance with paragraph (3), a 

State agency that fails to meet timeframes for providing an opportunity for a fair hearing and a prompt determination to any 


emcdonald on DSK67QTVN1PROD with HEARING
193 

institution under paragraph (1) in accordance with regulations 

promulgated by the Secretary, shall pay, from non-Federal 

sources, all valid claims for reimbursement to the institution 

and the facilities of the institution during the period beginning 

on the day after the end of any regulatory deadline for providing the opportunity and making the determination and ending on the date on which a hearing determination is made. 

(3) NOTICE TO STATE AGENCY.—The Secretary shall provide 

written notice to a State agency at least 30 days prior to imposing any liability for reimbursement under paragraph (2). 

(4) FEDERAL AUDIT DETERMINATION.—A State is not required 

to provide a hearing to an institution concerning a State action 

taken on the basis of a Federal audit determination. 

(5) SECRETARIAL HEARING.—If a State does not provide a 

hearing to an institution concerning a State action taken on 

the basis of a Federal audit determination, the Secretary, on 

request, shall afford a hearing to the institution concerning the 

action. 

(f) STATE DISBURSEMENTS TO INSTITUTIONS.— 

(1) IN GENERAL.— 

(A) REQUIREMENT.—Funds paid to any State under this 

section shall be disbursed to eligible institutions by the 

State under agreements approved by the Secretary. Disbursements to any institution shall be made only for the 

purpose of assisting in providing meals to children attending institutions, or in family or group day care homes. Disbursement to any institution shall not be dependent upon 

the collection of moneys from participating children. All 

valid claims from such institutions shall be paid within 

forty-five days of receipt by the State. The State shall notify the institution within fifteen days of receipt of a claim 

if the claim as submitted is not valid because it is incomplete or incorrect. 

(B) FRAUD OR ABUSE.— 

(i) IN GENERAL.—The State may recover funds disbursed under subparagraph (A) to an institution if the 

State determines that the institution has engaged in 

fraud or abuse with respect to the program or has submitted an invalid claim for reimbursement. 

(ii) PAYMENT.—Amounts recovered under clause (i)— 

(I) may be paid by the institution to the State 

over a period of one or more years; and 

(II) shall not be paid from funds used to provide 

meals and supplements. 

(iii) HEARING.—An institution shall be provided a 

fair hearing in accordance with subsection (e)(1) prior 

to any determination to recover funds under this subparagraph. 

(2)(A) Subject to subparagraph (B) of this paragraph, the disbursement for any fiscal year to any State for disbursement to institutions, other than family or group day care home sponsoring organizations, for meals provided under this section shall be equal to 

the sum of the products obtained by multiplying the total number 

of each type of meal (breakfast, lunch, or supper, or supplement) 

served in such institution in that fiscal year by the applicable naVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00199 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
194 

tional average payment rate for each such type of meal, as determined under subsection (c). 

(B) No reimbursement may be made to any institution under this 

paragraph, or to family or group day care home sponsoring organizations under paragraph (3) of this subsection, for more than two 

meals and one supplement per day per child, or in the case of an 

institution (but not in the case of a family or group day care home 

sponsoring organization), 2 meals and 1 supplement per day per 

child, for children that are maintained in a child care setting for 

eight or more hours per day. 

(C) LIMITATION ON ADMINISTRATIVE EXPENSES FOR CERTAIN

SPONSORING ORGANIZATIONS.— 

(i) IN GENERAL.—Except as provided in clause (ii), a 

sponsoring organization of a day care center may reserve 

not more than 15 percent of the funds provided under 

paragraph (1) for the administrative expenses of the organization. 

(ii) WAIVER.—A State may waive the requirement in 

clause (i) with respect to a sponsoring organization if the 

organization provides justification to the State that the organization requires funds in excess of 15 percent of the 

funds provided under paragraph (1) to pay the administrative expenses of the organization. 

(3) REIMBURSEMENT OF FAMILY OR GROUP DAY CARE HOME

SPONSORING ORGANIZATIONS.— (A) REIMBURSEMENT FACTOR.— (i) IN GENERAL.—An institution that participates in 

the program under this section as a family or group 

day care home sponsoring organization shall be provided, for payment to a home sponsored by the organization, reimbursement factors in accordance with this 

subparagraph for the cost of obtaining and preparing 

food and prescribed labor costs involved in providing 

meals under this section. 

(ii) TIER I FAMILY OR GROUP DAY CARE HOMES.— (I) DEFINITION OF TIER I FAMILY OR GROUP DAY

CARE HOME.—In this paragraph, the term ‘‘tier I 

family or group day care home’’ means— 

(aa) a family or group day care home that 

is located in a geographic area, as defined by 

the Secretary based on census data, in which 

at least 50 percent of the children residing in 

the area are members of households whose incomes meet the income eligibility guidelines 

for free or reduced price meals under section 

9; 

(bb) a family or group day care home that 

is located in an area served by a school enrolling students in which at least 50 percent of 

the total number of children enrolled are certified eligible to receive free or reduced price 

school meals under this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.); or 

(cc) a family or group day care home that is 

operated by a provider whose household 


emcdonald on DSK67QTVN1PROD with HEARING
195 

meets the income eligibility guidelines for free 

or reduced price meals under section 9 and 

whose income is verified by the sponsoring organization of the home under regulations established by the Secretary. 

(II) REIMBURSEMENT.—Except as provided in 

subclause (III), a tier I family or group day care 

home shall be provided reimbursement factors 

under this clause without a requirement for documentation of the costs described in clause (i), except that reimbursement shall not be provided 

under this subclause for meals or supplements 

served to the children of a person acting as a family or group day care home provider unless the 

children meet the income eligibility guidelines for 

free or reduced price meals under section 9. 

(III) FACTORS.—Except as provided in subclause 

(IV), the reimbursement factors applied to a home 

referred to in subclause (II) shall be the factors in 

effect on July 1, 1996. 

(IV) ADJUSTMENTS.—The reimbursement factors 

under this subparagraph shall be adjusted on July 

1, 1997, and each July 1 thereafter, to reflect 

changes in the Consumer Price Index for food at 

home for the most recent 12-month period for 

which the data are available. The reimbursement 

factors under this subparagraph shall be rounded 

to the nearest lower cent increment and based on 

the unrounded adjustment in effect on June 30 of 

the preceding school year. 

(iii) TIER II FAMILY OR GROUP DAY CARE HOMES.— (I) IN GENERAL.— 

(aa) FACTORS.—Except as provided in subclause (II), with respect to meals or supplements served under this clause by a family or 

group day care home that does not meet the 

criteria set forth in clause (ii)(I), the reimbursement factors shall be 95 cents for 

lunches and suppers, 27 cents for breakfasts, 

and 13 cents for supplements. 

(bb) ADJUSTMENTS.—The factors shall be 

adjusted on July 1, 1997, and each July 1 

thereafter, to reflect changes in the Consumer 

Price Index for food at home for the most recent 12-month period for which the data are 

available. The reimbursement factors under 

this item shall be rounded down to the nearest lower cent increment and based on the 

unrounded adjustment for the preceding 12- 

month period. 

(cc) REIMBURSEMENT.—A family or group 

day care home shall be provided reimbursement factors under this subclause without a 

requirement for documentation of the costs 

described in clause (i), except that reimburseVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00201 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
196 

ment shall not be provided under this subclause for meals or supplements served to the 

children of a person acting as a family or 

group day care home provider unless 

the children meet the income eligibility guidelines for free or reduced price meals under 

section 9. 

(II) OTHER FACTORS.—A family or group day 

care home that does not meet the criteria set forth 

in clause (ii)(I) may elect to be provided reimbursement factors determined in accordance with 

the following requirements: 

(aa) CHILDREN ELIGIBLE FOR FREE OR REDUCED PRICE MEALS.—In the case of meals or 

supplements served under this subsection to 

children who are members of households 

whose incomes meet the income eligibility 

guidelines for free or reduced price meals 

under section 9, the family or group day care 

home shall be provided reimbursement factors 

set by the Secretary in accordance with clause 

(ii)(III). 

(bb) INELIGIBLE CHILDREN.—In the case of 

meals or supplements served under this subsection to children who are members of households whose incomes do not meet the income 

eligibility guidelines, the family or group day 

care home shall be provided reimbursement 

factors in accordance with subclause (I). 

(III) INFORMATION AND DETERMINATIONS.— 

(aa) IN GENERAL.—If a family or group day 

care home elects to claim the factors described 

in subclause (II), the family or group day care 

home sponsoring organization serving the 

home shall collect the necessary income information, as determined by the Secretary, from 

any parent or other caretaker to make the determinations specified in subclause (II) and 

shall make the determinations in accordance 

with rules prescribed by the Secretary. 

(bb) CATEGORICAL ELIGIBILITY.—In making 

a determination under item (aa), a family or 

group day care home sponsoring organization 

may consider a child participating in or subsidized under, or a child with a parent participating in or subsidized under, a federally or 

State supported child care or other benefit 

program with an income eligibility limit that 

does not exceed the eligibility standard for 

free or reduced price meals under section 9 to 

be a child who is a member of a household 

whose income meets the income eligibility 

guidelines under section 9. 

(cc) FACTORS FOR CHILDREN ONLY.—A family or group day care home may elect to reVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00202 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
197 

ceive the reimbursement factors prescribed 

under clause (ii)(III) solely for the children 

participating in a program referred to in item 

(bb) if the home elects not to have income 

statements collected from parents or other 

caretakers. 

(dd) TRANSMISSION OF INCOME INFORMATION

BY SPONSORED FAMILY OR GROUP DAY CARE

HOMES.—If a family or group day care home 

elects to be provided reimbursement factors 

described in subclause (II), the family or 

group day care home may assist in the transmission of necessary household income information to the family or group day care home 

sponsoring organization in accordance with 

the policy described in item (ee). 

(ee) POLICY.—The Secretary shall develop a 

policy under which a sponsored family or 

group day care home described in item (dd) 

may, under terms and conditions specified by 

the Secretary and with the written consent of 

the parents or guardians of a child in a family 

or group day care home participating in the 

program, assist in the transmission of the income information of the family to the family 

or group day care home sponsoring organization. 

(IV) SIMPLIFIED MEAL COUNTING AND REPORTING

PROCEDURES.—The Secretary shall prescribe simplified meal counting and reporting procedures for 

use by a family or group day care home that elects 

to claim the factors under subclause (II) and by a 

family or group day care home sponsoring organization that sponsors the home. The procedures the 

Secretary prescribes may include 1 or more of the 

following: 

(aa) Setting an annual percentage for each 

home of the number of meals served that are 

to be reimbursed in accordance with the reimbursement factors prescribed under clause 

(ii)(III) and an annual percentage of the number of meals served that are to be reimbursed 

in accordance with the reimbursement factors 

prescribed under subclause (I), based on the 

family income of children enrolled in the 

home in a specified month or other period. 

(bb) Placing a home into 1 of 2 or more reimbursement categories annually based on 

the percentage of children in the home whose 

households have incomes that meet the income eligibility guidelines under section 9, 

with each such reimbursement category carrying a set of reimbursement factors such as 

the factors prescribed under clause (ii)(III) or 

subclause (I) or factors established within the 


emcdonald on DSK67QTVN1PROD with HEARING
198 

range of factors prescribed under clause 

(ii)(III) and subclause (I). 

(cc) Such other simplified procedures as the 

Secretary may prescribe. 

(V) MINIMUM VERIFICATION REQUIREMENTS.— 

The Secretary may establish any minimum 

verification requirements that are necessary to 

carry out this clause. 

(B) ADMINISTRATIVE FUNDS.— 

(i) IN GENERAL.—In addition to reimbursement factors described in subparagraph (A), a family or group 

day care home sponsoring organization shall receive 

reimbursement for the administrative expenses of the 

sponsoring organization in an amount that is not less 

than the product obtained each month by multiplying— 

(I) the number of family and group day care 

homes of the sponsoring organization submitting a 

claim for reimbursement during the month; by 

(II) the appropriate administrative rate determined by the Secretary. 

(ii) ANNUAL ADJUSTMENT.—The administrative reimbursement levels specified in clause (i) shall be adjusted July 1 of each year to reflect changes in the 

Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor for the most recent 12-month period for 

which such data are available. 

(iii) CARRYOVER FUNDS.—The Secretary shall develop procedures under which not more than 10 percent of the amount made available to sponsoring organizations under this section for administrative expenses for a fiscal year may remain available for obligation or expenditure in the succeeding fiscal year. 

(C)(i) Reimbursement for administrative expenses shall also include start-up funds to finance the administrative expenses for 

such institutions to initiate successful operation under the program 

and expansion funds to finance the administrative expenses for 

such institutions to expand into low-income or rural areas. Institutions that have received start-up funds may also apply at a later 

date for expansion funds. Such start-up funds and expansion funds 

shall be in addition to other reimbursement to such institutions for 

administrative expenses. Start-up funds and expansion funds shall 

be payable to enable institutions satisfying the criteria of subsection (d) of this section, and any other standards prescribed by 

the Secretary, to develop an application for participation in the program as a family or group day care home sponsoring organization 

or to implement the program upon approval of the application. 

Such start-up funds and expansion funds shall be payable in accordance with the procedures prescribed by the Secretary. The 

amount of start-up funds and expansion funds payable to an institution shall be not less than the institution’s anticipated reimbursement for administrative expenses under the program for one 

month and not more than the institution’s anticipated reimburseVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00204 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
199 

ment for administrative expenses under the program for two 

months. 

(ii) Funds for administrative expenses may be used by family or 

group day care home sponsoring organizations assist unlicensed 

family or group day care homes in becoming licensed. 

(D) LIMITATIONS ON ABILITY OF FAMILY OR GROUP DAY

CARE HOMES TO TRANSFER SPONSORING ORGANIZATIONS.— (i) IN GENERAL.—Subject to clause (ii), a State agency shall limit the ability of a family or group day care 

home to transfer from a sponsoring organization to another sponsoring organization more frequently than 

once a year. 

(ii) GOOD CAUSE.—The State agency may permit or 

require a family or group day care home to transfer 

from a sponsoring organization to another sponsoring 

organization more frequently than once a year for good 

cause (as determined by the State agency), including 

circumstances in which the sponsoring organization of 

the family or group day care home ceases to participate in the child and adult care food program. 

(E) PROVISION OF DATA TO FAMILY OR GROUP DAY CARE

HOME SPONSORING ORGANIZATIONS.— (i) CENSUS DATA.—The Secretary shall provide to 

each State agency administering a child and adult 

care food program under this section data from the 

most recent decennial census survey or other appropriate census survey for which the data are available 

showing which areas in the State meet the requirements of subparagraph (A)(ii)(I)(aa). The State agency 

shall provide the data to family or group day care 

home sponsoring organizations located in the State. 

(ii) SCHOOL DATA.— 

(I) IN GENERAL.—A State agency administering 

the school lunch program under this Act or the 

school breakfast program under the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) shall provide to approved family or group day care home 

sponsoring organizations a list of schools serving 

elementary school children in the State in which 

not less than 1⁄2 of the children enrolled are certified to receive free or reduced price meals. The 

State agency shall collect the data necessary to 

create the list annually and provide the list on a 

timely basis to any approved family or group day 

care home sponsoring organization that requests 

the list. 

(II) USE OF DATA FROM PRECEDING SCHOOL

YEAR.—In determining for a fiscal year or other 

annual period whether a home qualifies as a tier 

I family or group day care home under subparagraph (A)(ii)(I), the State agency administering 

the program under this section, and a family or 

group day care home sponsoring organization, 

shall use the most current available data at the 

time of the determination. 


emcdonald on DSK67QTVN1PROD with HEARING
200 

(iii) DURATION OF DETERMINATION.—For purposes of 

this section, a determination that a family or group 

day care home is located in an area that qualifies the 

home as a tier I family or group day care home (as the 

term is defined in subparagraph (A)(ii)(I)), shall be in 

effect for 5 years (unless the determination is made on 

the basis of census data, in which case the determination shall remain in effect until more recent census 

data are available) unless the State agency determines 

that the area in which the home is located no longer 

qualifies the home as a tier I family or group day care 

home. 

(4) By the first day of each month of operation, the State may 

provide advance payments for the month to each approved institution in an amount that reflects the full level of valid claims customarily received from such institution for one month’s operation. In 

the case of a newly participating institution, the amount of the advance shall reflect the State’s best estimate of the level of valid 

claims such institutions will submit. If the State has reason to believe that an institution will not be able to submit a valid claim 

covering the period for which such an advance has been made, the 

subsequent month’s advance payment shall be withheld until the 

State receives a valid claim. Payments advanced to institutions 

that are not subsequently deducted from a valid claim for reimbursement shall be repaid upon demand by the State. Any prior 

payment that is under dispute may be subtracted from an advance 

payment. 

(g) NUTRITIONAL REQUIREMENTS FOR MEALS AND SNACKS SERVED

IN INSTITUTIONS AND FAMILY OR GROUP DAY CARE HOMES.— 

(1) DEFINITION OF DIETARY GUIDELINES.—In this subsection, 

the term ‘‘Dietary Guidelines’’ means the Dietary Guidelines 

for Americans published under section 301 of the National Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 

5341). 

(2) NUTRITIONAL REQUIREMENTS.— 

(A) IN GENERAL.—Except as provided in subparagraph 

(C), reimbursable meals and snacks served by institutions, 

family or group day care homes, and sponsored centers 

participating in the program under this section shall consist of a combination of foods that meet minimum nutritional requirements prescribed by the Secretary on the 

basis of tested nutritional research. 

(B) CONFORMITY WITH THE DIETARY GUIDELINES AND AUTHORITATIVE SCIENCE.— 

(i) IN GENERAL.—Not less frequently than once every 

10 years, the Secretary shall review and, as appropriate, update requirements for meals served under 

the program under this section to ensure that the 

meals— 

(I) are consistent with the goals of the most recent Dietary Guidelines; and 

(II) promote the health of the population served 

by the program authorized under this section, as 

indicated by the most recent relevant nutrition 


emcdonald on DSK67QTVN1PROD with HEARING
201 

science and appropriate authoritative scientific 

agency and organization recommendations. 

(ii) COST REVIEW.—The review required under clause 

(i) shall include a review of the cost to child care centers and group or family day care homes resulting 

from updated requirements for meals and snacks 

served under the program under this section. 

(iii) REGULATIONS.—Not later than 18 months after 

the completion of the review of the meal pattern under 

clause (i), the Secretary shall promulgate proposed 

regulations to update the meal patterns for meals and 

snacks served under the program under this section. 

(C) EXCEPTIONS.— 

(i) SPECIAL DIETARY NEEDS.—The minimum nutritional requirements prescribed under subparagraph 

(A) shall not prohibit institutions, family or group day 

care homes, and sponsored centers from substituting 

foods to accommodate the medical or other special dietary needs of individual participants. 

(ii) EXEMPT INSTITUTIONS.—The Secretary may elect 

to waive all or part of the requirements of this subsection for emergency shelters participating in the program under this section. 

(3) MEAL SERVICE.—Institutions, family or group day care 

homes, and sponsored centers shall ensure that reimbursable 

meal service contributes to the development and socialization 

of enrolled children by providing that food is not used as a 

punishment or reward. 

(4) FLUID MILK.— 

(A) IN GENERAL.—If an institution, family or group day 

care home, or sponsored center provides fluid milk as part 

of a reimbursable meal or supplement, the institution, 

family or group day care home, or sponsored center shall 

provide the milk in accordance with the most recent 

version of the Dietary Guidelines. 

(B) MILK SUBSTITUTES.—In the case of children who cannot consume fluid milk due to medical or other special dietary needs other than a disability, an institution, family or 

group day care home, or sponsored center may substitute 

for the fluid milk required in meals served, a nondairy 

beverage that— 

(i) is nutritionally equivalent to fluid milk; and 

(ii) meets nutritional standards established by the 

Secretary, including, among other requirements established by the Secretary, fortification of calcium, protein, vitamin A, and vitamin D to levels found in cow’s 

milk. 

(C) APPROVAL.— 

(i) IN GENERAL.—A substitution authorized under 

subparagraph (B) may be made— 

(I) at the discretion of and on approval by the 

participating day care institution; and 

(II) if the substitution is requested by written 

statement of a medical authority, or by the parent 

or legal guardian of the child, that identifies the 


emcdonald on DSK67QTVN1PROD with HEARING
202 

medical or other special dietary need that restricts 

the diet of the child. 

(ii) EXCEPTION.—An institution, family or group day 

care home, or sponsored center that elects to make a 

substitution authorized under this paragraph shall not 

be required to provide beverages other than beverages 

the State has identified as acceptable substitutes. 

(D) EXCESS EXPENSES BORNE BY INSTITUTION.—A participating institution, family or group day care home, or sponsored center shall be responsible for any expenses that— 

(i) are incurred by the institution, family or group 

day care home, or sponsored center to provide substitutions under this paragraph; and 

(ii) are in excess of expenses covered under reimbursements under this Act. 

(5) NONDISCRIMINATION POLICY.—No physical segregation or 

other discrimination against any person shall be made because 

of the inability of the person to pay, nor shall there be any 

overt identification of any such person by special tokens or 

tickets, different meals or meal service, announced or published lists of names, or other means. 

(6) USE OF ABUNDANT AND DONATED FOODS.—To the maximum extent practicable, each institution shall use in its food 

service foods that are— 

(A) designated from time to time by the Secretary as 

being in abundance, either nationally or in the food service 

area; or 

(B) donated by the Secretary. 

(h)(1)(A) The Secretary shall donate agricultural commodities 

produced in the United States for use in institutions participating 

in the child care food program under this section. 

(B) The value of the commodities donated under subparagraph 

(A) (or cash in lieu of commodities) to each State for each school 

year shall be, at a minimum, the amount obtained by multiplying 

the number of lunches and suppers served in participating institutions in that State during the preceding school year by the rate for 

commodities or cash in lieu of commodities established under section 6(c) for the school year concerned. 

(C) After the end of each school year, the Secretary shall— 

(i) reconcile the number of lunches and suppers served in 

participating institutions in each State during such school year 

with the number of lunches and suppers served by participating institutions in each State during the preceding school 

year; and 

(ii) based on such reconciliation, increase or reduce subsequent commodity assistance or cash in lieu of commodities provided to each State. 

(D) Any State receiving assistance under this section for institutions participating in the child care food program may, upon application to the Secretary, receive cash in lieu of some or all of the 

commodities to which it would otherwise be entitled under this 

subsection. In determining whether to request cash in lieu of commodities, the State shall base its decision on the preferences of individual participating institutions within the State, unless this 


emcdonald on DSK67QTVN1PROD with HEARING
203 

proves impracticable due to the small number of institutions preferring donated commodities. 

(2) The Secretary is authorized to provide agricultural commodities obtained by the Secretary under the provisions of the Agricultural Act of 1949 (7 U.S.C. 1421 et seq.) and donated under the 

provisions of section 416 of such Act, to the Department of Defense 

for use by its institutions providing child care services, when such 

commodities are in excess of the quantities needed to meet the 

needs of all other child nutrition programs, domestic and foreign 

food assistance and export enhancement programs. The Secretary 

shall require reimbursement from the Department of Defense for 

the costs, or some portion thereof, of delivering such commodities 

to overseas locations, unless the Secretary determines that it is in 

the best interest of the program that the Department of Agriculture shall assume such costs. 

(i) AUDITS.— 

(1) DISREGARDS.— 

(A) IN GENERAL.—Subject to subparagraph (B), in conducting management evaluations, reviews, or audits under 

this section, the Secretary or a State agency may disregard 

any overpayment to an institution for a fiscal year if the 

total overpayment to the institution for the fiscal year does 

not exceed an amount that is consistent with the disregards allowed in other programs under this Act and recognizes the cost of collecting small claims, as determined 

by the Secretary. 

(B) CRIMINAL OR FRAUD VIOLATIONS.—In carrying out 

this paragraph, the Secretary and a State agency shall not 

disregard any overpayment for which there is evidence of 

a violation of a criminal law or civil fraud law. 

(2) FUNDING.— (A) IN GENERAL.—The Secretary shall make available for 

each fiscal year to each State agency administering the 

child and adult care food program, for the purpose of conducting audits of participating institutions, an amount of 

up to 1.5 percent of the funds used by each State in the 

program under this section, during the second preceding 

fiscal year. 

(B) ADDITIONAL FUNDING.— (i) IN GENERAL.—Subject to clause (ii), for fiscal year 

2016 and each fiscal year thereafter, the Secretary 

may increase the amount of funds made available to 

any State agency under subparagraph (A), if the State 

agency demonstrates that the State agency can effectively use the funds to improve program management 

under criteria established by the Secretary. 

(ii) LIMITATION.—The total amount of funds made 

available to any State agency under this paragraph 

shall not exceed 2 percent of the funds used by each 

State agency in the program under this section, during 

the second preceding fiscal year. 

(j) AGREEMENTS.— (1) IN GENERAL.—The Secretary shall issue regulations directing States to develop and provide for the use of a standard 

form of agreement between each sponsoring organization and 


emcdonald on DSK67QTVN1PROD with HEARING
204 

the family or group day care homes or sponsored day care centers participating in the program under such organization, for 

the purpose of specifying the rights and responsibilities of each 

party. 

(2) DURATION.—An agreement under paragraph (1) shall remain in effect until terminated by either party to the agreement. 

(k) TRAINING AND TECHNICAL ASSISTANCE.—A State participating 

in the program established under this section shall provide sufficient training, technical assistance, and monitoring to facilitate effective operation of the program. The Secretary shall assist the 

State in developing plans to fulfill the requirements of this subsection. 

(l) Expenditures of funds from State and local sources for the 

maintenance of food programs for children shall not be diminished 

as a result of funds received under this section. 

(m) States and institutions participating in the program under 

this section shall keep such accounts and records as may be necessary to enable the Secretary to determine whether there has 

been compliance with the requirements of this section. Such accounts and records shall be available at any reasonable time for inspection and audit by representatives of the Secretary, the Comptroller General of the United States, and appropriate State representatives and shall be preserved for such period of time, not in 

excess of five years, as the Secretary determines necessary. 

(n) There are hereby authorized to be appropriated for each fiscal 

year such funds as are necessary to carry out the purposes of this 

section. 

(o)(1) For purposes of this section, adult day care centers shall 

be considered eligible institutions for reimbursement for meals or 

supplements served to persons 60 years of age or older or to chronically impaired disabled persons, including victims of Alzheimer’s 

disease and related disorders with neurological and organic brain 

dysfunction. Reimbursement provided to such institutions for such 

purposes shall improve the quality of meals or level of services provided or increase participation in the program. Lunches served by 

each such institution for which reimbursement is claimed under 

this section shall provide, on the average, approximately 1⁄3 of the 

daily recommended dietary allowance established by the Food and 

Nutrition Board of the National Research Council of the National 

Academy of Sciences. Such institutions shall make reasonable efforts to serve meals that meet the special dietary requirements of 

participants, including efforts to serve foods in forms palatable to 

participants. 

(2) For purposes of this subsection— 

(A) the term ‘‘adult day care center’’ means any public agency or private nonprofit organization, or any proprietary title 

XIX or title XX center, which— 

(i) is licensed or approved by Federal, State, or local authorities to provide adult day care services to chronically 

impaired disabled adults or persons 60 years of age or 

older in a group setting outside their homes, or a group 

living arrangement, on a less than 24-hour basis; and 

(ii) provides for such care and services directly or under 

arrangements made by the agency or organization whereby 


emcdonald on DSK67QTVN1PROD with HEARING
205 

the agency or organization maintains professional management responsibility for all such services; and 

(B) the term ‘‘proprietary title XIX or title XX center’’ means 

any private, for-profit center providing adult day care services 

for which it receives compensation from amounts granted to 

the States under title XIX or XX of the Social Security Act and 

which title XIX or title XX beneficiaries were not less than 25 

percent of enrolled eligible participants in a calendar month 

preceding initial application or annual reapplication for program participation. 

(3)(A) The Secretary, in consulation with the Assistant Secretary 

for Aging, shall establish, within 6 months of enactment, separate 

guidelines for reimbursement of institutions described in this subsection. Such reimbursement shall take into account the nutritional 

requirements of eligible persons, as determined by the Secretary on 

the basis of tested nutritional research, except that such reimbursement shall not be less than would otherwise be required 

under this section. 

(B) The guidelines shall contain provisions designed to assure 

that reimbursement under this subsection shall not duplicate reimbursement under part C of title III of the Older Americans Act of 

1965, for the same meal served. 

(4) For the purpose of establishing eligibility for free or reduced 

price meals or supplements under this subsection, income shall include only the income of an eligible person and, if any, the spouse 

and dependents with whom the eligible person resides. 

(5) A person described in paragraph (1) shall be considered automatically eligible for free meals or supplements under this subsection, without further application or eligibility determination, if 

the person is— 

(A) a member of a household receiving assistance under the 

Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.); or 

(B) a recipient of assistance under title XVI or XIX of the Social Security Act (42 U.S.C. 1381 et seq.). 

(6) The Governor of any State may designate to administer the 

program under this subsection a State agency other than the agency that administers the child care food program under this section. 

(q) MANAGEMENT SUPPORT.— 

(1) TECHNICAL AND TRAINING ASSISTANCE.—In addition to the 

training and technical assistance that is provided to State 

agencies under other provisions of this Act and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), the Secretary shall 

provide training and technical assistance in order to assist the 

State agencies in improving their program management and 

oversight under this section. 

(2) TECHNICAL AND TRAINING ASSISTANCE FOR IDENTIFICATION

AND PREVENTION OF FRAUD AND ABUSE.—As part of training 

and technical assistance provided under paragraph (1), the 

Secretary shall provide training on a continuous basis to State 

agencies, and shall ensure that such training is provided to 

sponsoring organizations, for the identification and prevention 

of fraud and abuse under the program and to improve management of the program. 

(r) PROGRAM FOR AT-RISK SCHOOL CHILDREN.— 


emcdonald on DSK67QTVN1PROD with HEARING
206 

(1) DEFINITION OF AT-RISK SCHOOL CHILD.—In this subsection, the term ‘‘at-risk school child’’ means a school child 

who— 

(A) is not more than 18 years of age, except that the age 

limitation provided by this subparagraph shall not apply 

to a child described in section 12(d)(1)(A); and 

(B) participates in a program authorized under this section operated at a site located in a geographical area 

served by a school in which at least 50 percent of the children enrolled are certified as eligible to receive free or reduced price school meals under this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.). 

(2) PARTICIPATION IN CHILD AND ADULT CARE FOOD PROGRAM.—An institution may participate in the program authorized under this section only if the institution provides meals or 

supplements under a program— 

(A) organized primarily to provide care to at-risk school 

children during after-school hours, weekends, or holidays 

during the regular school year; and 

(B) with an educational or enrichment purpose. 

(3) ADMINISTRATION.—Except as otherwise provided in this 

subsection, the other provisions of this section apply to an institution described in paragraph (2). 

(4) MEAL AND SUPPLEMENT REIMBURSEMENT.— 

(A) LIMITATIONS.—An institution may claim reimbursement under this subsection only for one meal per child per 

day and one supplement per child per day served under a 

program organized primarily to provide care to at-risk 

school children during after-school hours, weekends, or 

holidays during the regular school year. 

(B) RATES.— 

(i) MEALS.—A meal shall be reimbursed under this 

subsection at the rate established for free meals under 

subsection (c). 

(ii) SUPPLEMENTS.—A supplement shall be reimbursed under this subsection at the rate established 

for a free supplement under subsection (c)(3). 

(C) NO CHARGE.—A meal or supplement claimed for reimbursement under this subsection shall be served without 

charge. 

(5) LIMITATION.—An institution participating in the program 

under this subsection may not claim reimbursement for meals 

and snacks that are served under section 18(h) on the same 

day. 

(6) HANDBOOK.— 

(A) IN GENERAL.—Not later than 180 days after the date 

of enactment of the Healthy, Hunger-Free Kids Act of 

2010, the Secretary shall— 

(i) issue guidelines for afterschool meals for at-risk 

school children; and 

(ii) publish a handbook reflecting those guidelines. 

(B) REVIEW.—Each year after the issuance of guidelines 

under subparagraph (A), the Secretary shall— 

(i) review the guidelines; and 


emcdonald on DSK67QTVN1PROD with HEARING
207 

(ii) issue a revised handbook reflecting changes 

made to the guidelines. 

(s) INFORMATION CONCERNING THE SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN.— 

(1) IN GENERAL.—The Secretary shall provide each State 

agency administering a child and adult care food program 

under this section with information concerning the special supplemental nutrition program for women, infants, and children 

authorized under section 17 of the Child Nutrition Act of 1966 

(42 U.S.C. 1786). 

(2) REQUIREMENTS FOR STATE AGENCIES.—Each State agency 

shall ensure that each participating family and group day care 

home and child care center (other than an institution providing 

care to school children outside school hours)— 

(A) receives materials that include— 

(i) a basic explanation of the importance and benefits of the special supplemental nutrition program for 

women, infants, and children; 

(ii) the maximum State income eligibility standards, 

according to family size, for the program; and 

(iii) information concerning how benefits under the 

program may be obtained; 

(B) receives periodic updates of the information described in subparagraph (A); and 

(C) provides the information described in subparagraph 

(A) to parents of enrolled children at enrollment. 

(t) PARTICIPATION BY EMERGENCY SHELTERS.— 

(1) DEFINITION OF EMERGENCY SHELTER.—In this subsection, 

the term ‘‘emergency shelter’’ means— 

(A) an emergency shelter (as defined in section 321 of 

the Stewart B. McKinney Homeless Assistance Act (42 

U.S.C. 11351)); or 

(B) a site operated by the shelter. 

(2) ADMINISTRATION.—Except as otherwise provided in this 

subsection, an emergency shelter shall be eligible to participate 

in the program authorized under this section in accordance 

with the terms and conditions applicable to eligible institutions 

described in subsection (a). 

(3) LICENSING REQUIREMENTS.—The licensing requirements 

contained in subsection (a)(5) shall not apply to an emergency 

shelter. 

(4) HEALTH AND SAFETY STANDARDS.—To be eligible to participate in the program authorized under this section, an emergency shelter shall comply with applicable State or local health 

and safety standards. 

(5) MEAL OR SUPPLEMENT REIMBURSEMENT.— 

(A) LIMITATIONS.—An emergency shelter may claim reimbursement under this subsection— 

(i) only for a meal or supplement served to children 

residing at an emergency shelter, if the children are— 

(I) not more than 18 years of age; or 

(II) children with disabilities; and 

(ii) for not more than 3 meals, or 2 meals and a supplement, per child per day. 


emcdonald on DSK67QTVN1PROD with HEARING
208 

(B) RATE.—A meal or supplement eligible for reimbursement shall be reimbursed at the rate at which free meals 

and supplements are reimbursed under subsection (c). 

(C) NO CHARGE.—A meal or supplement claimed for reimbursement shall be served without charge. 

(u) PROMOTING HEALTH AND WELLNESS IN CHILD CARE.— (1) PHYSICAL ACTIVITY AND ELECTRONIC MEDIA USE.—The 

Secretary shall encourage participating child care centers and 

family or group day care homes— 

(A) to provide to all children under the supervision of 

the participating child care centers and family or group 

day care homes daily opportunities for structured and 

unstructured age-appropriate physical activity; and 

(B) to limit among children under the supervision of the 

participating child care centers and family or group day 

care homes the use of electronic media to an appropriate 

level. 

(2) WATER CONSUMPTION.—Participating child care centers 

and family or group day care homes shall make available to 

children, as nutritionally appropriate, potable water as an acceptable fluid for consumption throughout the day, including at 

meal times. 

(3) TECHNICAL ASSISTANCE AND GUIDANCE.— (A) IN GENERAL.—The Secretary shall provide technical 

assistance to institutions participating in the program 

under this section to assist participating child care centers 

and family or group day care homes in complying with the 

nutritional requirements and wellness recommendations 

prescribed by the Secretary in accordance with this subsection and subsection (g). 

(B) GUIDANCE.—Not later than January 1, 2012, the Secretary shall issue guidance to States and institutions to 

encourage participating child care centers and family or 

group day care homes serving meals and snacks under this 

section to— 

(i) include foods that are recommended for increased 

serving consumption in amounts recommended by the 

most recent Dietary Guidelines for Americans published under section 301 of the National Nutrition 

Monitoring and Related Research Act of 1990 (7 

U.S.C. 5341), including fresh, canned, dried, or frozen 

fruits and vegetables, whole grain products, lean meat 

products, and low-fat and non-fat dairy products; and 

(ii) reduce sedentary activities and provide opportunities for regular physical activity in quantities recommended by the most recent Dietary Guidelines for 

Americans described in clause (i). 

(C) NUTRITION.—Technical assistance relating to the nutritional requirements of this subsection and subsection (g) 

shall include— 

(i) nutrition education, including education that emphasizes the relationship between nutrition, physical 

activity, and health; 

(ii) menu planning; 

(iii) interpretation of nutrition labels; and 


emcdonald on DSK67QTVN1PROD with HEARING
209 

(iv) food preparation and purchasing guidance to 

produce meals and snacks that are— 

(I) consistent with the goals of the most recent 

Dietary Guidelines; and 

(II) promote the health of the population served 

by the program under this section, as recommended by authoritative scientific organizations. 

(D) PHYSICAL ACTIVITY.—Technical assistance relating to 

the physical activity requirements of this subsection shall 

include— 

(i) education on the importance of regular physical 

activity to overall health and well being; and 

(ii) sharing of best practices for physical activity 

plans in child care centers and homes as recommended 

by authoritative scientific organizations. 

(E) ELECTRONIC MEDIA USE.—Technical assistance relating to the electronic media use requirements of this subsection shall include— 

(i) education on the benefits of limiting exposure to 

electronic media by children; and 

(ii) sharing of best practices for the development of 

daily activity plans that limit use of electronic media. 

(F) MINIMUM ASSISTANCE.—At a minimum, the technical 

assistance required under this paragraph shall include a 

handbook, developed by the Secretary in coordination with 

the Secretary for Health and Human Services, that includes recommendations, guidelines, and best practices for 

participating institutions and family or group day care 

homes that are consistent with the nutrition, physical activity, and wellness requirements and recommendations of 

this subsection. 

(G) ADDITIONAL ASSISTANCE.—In addition to the requirements of this paragraph, the Secretary shall develop and 

provide such appropriate training and education materials, 

guidance, and technical assistance as the Secretary considers to be necessary to comply with the nutritional and 

wellness requirements of this subsection and subsection 

(g). 

(H) FUNDING.— 

(i) IN GENERAL.—On October 1, 2010, out of any 

funds in the Treasury not otherwise appropriated, the 

Secretary of the Treasury shall transfer to the Secretary to provide technical assistance under this subsection $10,000,000, to remain available until expended. 

(ii) RECEIPT AND ACCEPTANCE.—The Secretary shall 

be entitled to receive, shall accept, and shall use to 

carry out this subsection the funds transferred under 

clause (i), without further appropriation. 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
210 

INDIAN CHILD WELFARE ACT OF 1978 

* * * * * * * 

TITLE II—INDIAN CHILD AND FAMILY PROGRAMS 

SEC. 201. (a) The Secretary is authorized to make grants to Indian tribes and organizations in the establishment and operation 

of Indian child and family service programs on or near reservations 

and in the preparation and implementation of child welfare codes. 

The objective of every Indian child and family service program 

shall be to prevent the breakup of Indian families and, in particular, to insure that the permanent removal of an Indian child 

from the custody of his parent or Indian custodian shall be a last 

resort. Such child and family service programs may include, but 

are not limited to— 

(1) a system for licensing or otherwise regulating Indian foster and adoptive homes; 

(2) the operation and maintenance of facilities for the counseling and treatment of Indian families and for the temporary 

custody of Indian children; 

(3) family assistance, including homemaker and home counselors, day care, afterschool care, and employment, recreational 

activities, and respite care; 

(4) home improvement programs; 

(5) the employment of professional and other trained personnel to assist the tribal court in the disposition of domestic 

relations and child welfare matters; 

(6) education and training of Indians, including tribal court 

judges and staff, in skills relating to child and family assistance and service programs; 

(7) a subsidy program under which Indian adoptive children 

may be provided support comparable to that for which they 

would be eligible as foster children, taking into account the appropriate State standards of support for maintenance and medical needs; and 

(8) guidance, legal representation, and advice to Indian families involved in tribal, State, or Federal child custody proceedings. 

(b) Funds appropriated for use by the Secretary in accordance 

with this section may be utilized as non-Federal matching share in 

connection with funds provided under titles IV–B and XX of the Social Security Act or under any other Federal financial assistance 

programs which contribute to the purpose for which such funds are 

authorized to be appropriated for use under this Act. The provision 

or possibility of assistance under this Act shall not be a basis for 

the denial or reduction of any assistance otherwise authorized 

under titles IV–B and XX of the Social Security Act or any other 

federally assisted program. For purposes of qualifying for assistance under a federally assisted program, licensing or approval of 

foster or adoptive homes or institutions by an Indian tribe shall be 

deemed equivalent to licensing or approval by a State. 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
211 

TITLE 31, UNITED STATES CODE 

* * * * * * * 

SUBTITLE III—FINANCIAL MANAGEMENT 

* * * * * * * 

CHAPTER 38—ADMINISTRATIVE REMEDIES FOR FALSE 

CLAIMS AND STATEMENTS 

* * * * * * * 

§ 3803. Hearing and determinations 

(a)(1) The investigating official of an authority may investigate 

allegations that a person is liable under section 3802 of this title 

and shall report the findings and conclusions of such investigation 

to the reviewing official of the authority. The preceding sentence 

does not modify any responsibility of an investigating official to report violations of criminal law to the Attorney General. 

(2) If the reviewing official of an authority determines, based 

upon the report of the investigating official under paragraph (1) of 

this subsection, that there is adequate evidence to believe that a 

person is liable under section 3802 of this title, the reviewing official shall transmit to the Attorney General a written notice of the 

intention of such official to refer the allegations of such liability to 

a presiding officer of such authority. Such notice shall include— 

(A) a statement of the reasons of the reviewing official for 

the referral of such allegations; 

(B) a statement specifying the evidence which supports such 

allegations; 

(C) a description of the claims or statements for which liability under section 3802 of this title is alleged; 

(D) an estimate of the amount of money or the value of property or services requested or demanded in violation of section 

3802 of this title; and 

(E) a statement of any exculpatory or mitigating circumstances which may relate to such claims or statements. 

(b)(1) Within 90 days after receipt of a notice from a reviewing 

official under paragraph (2) of subsection (a), the Attorney General 

or an Assistant Attorney General designated by the Attorney General shall transmit a written statement to the reviewing official 

which specifies— 

(A) that the Attorney General or such Assistant Attorney 

General approves or disapproves the referral to a presiding officer of the allegations of liability stated in such notice; 

(B) in any case in which the referral of allegations is approved, that the initiation of a proceeding under this section 

with respect to such allegations is appropriate; and 

(C) in any case in which the referral of allegations is disapproved, the reasons for such disapproval. 

(2) A reviewing official may refer allegations of liability to a presiding officer only if the Attorney General or an Assistant Attorney 

General designated by the Attorney General approves the referral 

of such allegations in a written statement described in paragraph 

(1) of this subsection. 


emcdonald on DSK67QTVN1PROD with HEARING
212 

(3) If the Attorney General or an Assistant Attorney General designated by the Attorney General transmits to an authority head a 

written finding that the continuation of any hearing under this section with respect to a claim or statement may adversely affect any 

pending or potential criminal or civil action related to such claim 

or statement, such hearing shall be immediately stayed and may 

be resumed only upon written authorization of the Attorney General. 

(c)(1) No allegations of liability under section 3802 of this title 

with respect to any claim made, presented, or submitted by any 

person shall be referred to a presiding officer under paragraph (2) 

of subsection (b) if the reviewing official determines that— (A) an amount of money in excess of $150,000; or 

(B) property or services with a value in excess of $150,000, 

is requested or demanded in violation of section 3802 of this title 

in such claim or in a group of related claims which are submitted 

at the time such claim is submitted. 

(2)(A) Except as provided in subparagraph (B) of this paragraph, 

no allegations of liability against an individual under section 3802 

of this title with respect to any claim or statement made, presented, or submitted, or caused to be made, presented, or submitted, by such individual relating to any benefits received by such 

individual shall be referred to a presiding officer under paragraph 

(2) of subsection (b). 

(B) Allegations of liability against an individual under section 

3802 of this title with respect to any claim or statement made, presented, or submitted, or caused to be made, presented, or submitted, by such individual relating to any benefits received by such 

individual may be referred to a presiding officer under paragraph 

(2) of subsection (b) if— 

(i) such claim or statement is made by such individual in 

making application for such benefits; 

(ii) such allegations relate to the eligibility of such individual 

to receive such benefits; and 

(iii) with respect to such claim or statement, the individual— 

(I) has actual knowledge that the claim or statement is 

false, fictitious, or fraudulent; 

(II) acts in deliberate ignorance of the truth or falsity of 

the claim or statement; or 

(III) acts in reckless disregard of the truth or falsity of 

the claim or statement. 

(C) For purposes of this subsection, the term ‘‘benefits’’ means— 

(i) benefits under the supplemental security income program 

under title XVI of the Social Security Act; 

(ii) old age, survivors, and disability insurance benefits 

under title II of the Social Security Act; 

(iii) benefits under title XVIII of the Social Security Act; 

(iv) assistance under a State program funded under part A 

of title IV of the Social Security Act; 

(v) medical assistance under a State plan approved under 

section 1902(a) of the Social Security Act; 

(vi) benefits under title XX of the Social Security Act; 

(vii) benefits under the supplemental nutrition assistance 

program (as defined in section 3 of the Food and Nutrition Act 

of 2008); 


emcdonald on DSK67QTVN1PROD with HEARING
213 

(viii) benefits under chapters 11, 13, 15, 17, and 21 of title 

38; 

(ix) benefits under the Black Lung Benefits Act; 

(x) benefits under the special supplemental nutrition program for women, infants, and children established under section 17 of the Child Nutrition Act of 1966; 

(xi) benefits under section 336 of the Older Americans Act; 

(xii) any annuity or other benefit under the Railroad Retirement Act of 1974; 

(xiii) benefits under the Richard B. Russell National School 

Lunch Act; 

(xiv) benefits under any housing assistance program for 

lower income families or elderly or handicapped persons which 

is administered by the Secretary of Housing and Urban Development or the Secretary of Agriculture; 

(xv) benefits under the Low-Income Home Energy Assistance 

Act of 1981; and 

(xvi) benefits under part A of the Energy Conservation in Existing Buildings Act of 1976, 

which are intended for the personal use of the individual who receives the benefits or for a member of the individual’s family. 

(d)(1) On or after the date on which a reviewing official is permitted to refer allegations of liability to a presiding officer under 

subsection (b) of this section, the reviewing official shall mail, by 

registered or certified mail, or shall deliver, a notice to the person 

alleged to be liable under section 3802 of this title. Such notice 

shall specify the allegations of liability against such person and 

shall state the right of such person to request a hearing with respect to such allegations. 

(2) If, within 30 days after receiving a notice under paragraph (1) 

of this subsection, the person receiving such notice requests a hearing with respect to the allegations contained in such notice— 

(A) the reviewing official shall refer such allegations to a presiding officer for the commencement of such hearing; and 

(B) the presiding officer shall commence such hearing by 

mailing by registered or certified mail, or by delivery of, a notice which complies with paragraphs (2)(A) and (3)(B)(i) of subsection (g) to such person. 

(e)(1)(A) Except as provided in subparagraph (B) of this paragraph, at any time after receiving a notice under paragraph (2)(B) 

of subsection (d), the person receiving such notice shall be entitled 

to review, and upon payment of a reasonable fee for duplication, 

shall be entitled to obtain a copy of, all relevant and material documents, transcripts, records, and other materials, which relate to 

such allegations and upon which the findings and conclusions of 

the investigating official under paragraph (1) of subsection (a) are 

based. 

(B) A person is not entitled under subparagraph (A) to review 

and obtain a copy of any document, transcript, record, or material 

which is privileged under Federal law. 

(2) At any time after receiving a notice under paragraph (2)(B) 

of subsection (d), the person receiving such notice shall be entitled 

to obtain all exculpatory information in the possession of the investigating official or the reviewing official relating to the allegations 

contained in such notice. The provisions of subparagraph (B) of 


emcdonald on DSK67QTVN1PROD with HEARING
214 

paragraph (1) do not apply to any document, transcript, record, or 

other material, or any portion thereof, in which such exculpatory 

information is contained. 

(f) Any hearing commenced under paragraph (2) of subsection (d) 

shall be conducted by the presiding officer on the record in order 

to determine— 

(1) the liability of a person under section 3802 of this title; 

and 

(2) if a person is determined to be liable under such section, 

the amount of any civil penalty or assessment to be imposed 

on such person. 

Any such determination shall be based on the preponderance of the 

evidence. 

(g)(1) Each hearing under subsection (f) of this section shall be 

conducted— 

(A) in the case of an authority to which the provisions of subchapter II of chapter 5 of title 5 apply, in accordance with— 

(i) the provisions of such subchapter to the extent that 

such provisions are not inconsistent with the provisions of 

this chapter; and 

(ii) procedures promulgated by the authority head under 

paragraph (3) of this subsection; or 

(B) in the case of an authority to which the provisions of 

such subchapter do not apply, in accordance with procedures 

promulgated by the authority head under paragraphs (2) and 

(3) of this subsection. 

(2) An authority head of an authority described in subparagraph 

(B) of paragraph (1) shall by regulation promulgate procedures for 

the conduct of hearings under this chapter. Such procedures shall 

include: 

(A) The provision of written notice of the hearing to any person alleged to be liable under section 3802 of this title, including written notice of— 

(i) the time, place, and nature of the hearing; 

(ii) the legal authority and jurisdiction under which the 

hearing is to be held; and 

(iii) the matters of facts and law to be asserted. 

(B) The provision to any person alleged to be liable under 

section 3802 of this title of opportunities for the submission of 

facts, arguments, offers of settlement, or proposals of adjustment. 

(C) Procedures to ensure that the presiding officer shall not, 

except to the extent required for the disposition of ex parte 

matters as authorized by law— 

(i) consult a person or party on a fact in issue, unless on 

notice and opportunity for all parties to the hearing to participate; or 

(ii) be responsible to or subject to the supervision or direction of the investigating official or the reviewing official. 

(D) Procedures to ensure that the investigating official and 

the reviewing official do not participate or advise in the decision required under subsection (h) of this section or the review 

of the decision by the authority head under subsection (i) of 

this section, except as provided in subsection (j) of this section. 


emcdonald on DSK67QTVN1PROD with HEARING
215 

(E) The provision to any person alleged to be liable under 

section 3802 of this title of opportunities to present such person’s case through oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may 

be required for a full and true disclosure of the facts. 

(F) Procedures to permit any person alleged to be liable 

under section 3802 of this title to be accompanied, represented, 

and advised by counsel or such other qualified representative 

as the authority head may specify in such regulations. 

(G) Procedures to ensure that the hearing is conducted in an 

impartial manner, including procedures to— 

(i) permit the presiding officer to at any time disqualify 

himself; and 

(ii) permit the filing, in good faith, of a timely and sufficient affidavit alleging personal bias or another reason for 

disqualification of a presiding officer or a reviewing official. 

(3)(A) Each authority head shall promulgate by regulation procedures described in subparagraph (B) of this paragraph for the conduct of hearings under this chapter. Such procedures shall be in 

addition to the procedures described in paragraph (1) or paragraph 

(2) of this subsection, as the case may be. 

(B) The procedures referred to in subparagraph (A) of this paragraph are: 

(i) Procedures for the inclusion, in any written notice of a 

hearing under this section to any person alleged to be liable 

under section 3802 of this title, of a description of the procedures for the conduct of the hearing. 

(ii) Procedures to permit discovery by any person alleged to 

be liable under section 3802 of this title only to the extent that 

the presiding officer determines that such discovery is necessary for the expeditious, fair, and reasonable consideration of 

the issues, except that such procedures shall not apply to documents, transcripts, records, or other material which a person 

is entitled to review under paragraph (1) of subsection (e) or 

to information to which a person is entitled under paragraph 

(2) of such subsection. Procedures promulgated under this 

clause shall prohibit the discovery of the notice required under 

subsection (a)(2) of this section. 

(4) Each hearing under subsection (f) of this section shall be 

held— 

(A) in the judicial district of the United States in which the 

person alleged to be liable under section 3802 of this title resides or transacts business; 

(B) in the judicial district of the United States in which the 

claim or statement upon which the allegation of liability under 

such section was made, presented, or submitted; or 

(C) in such other place as may be agreed upon by such person and the presiding officer who will conduct such hearing. 

(h) The presiding officer shall issue a written decision, including 

findings and determinations, after the conclusion of the hearing. 

Such decision shall include the findings of fact and conclusions of 

law which the presiding officer relied upon in determining whether 

a person is liable under this chapter. The presiding officer shall 

promptly send to each party to the hearing a copy of such decision 


emcdonald on DSK67QTVN1PROD with HEARING
216 

and a statement describing the right of any person determined to 

be liable under section 3802 of this title to appeal the decision of 

the presiding officer to the authority head under paragraph (2) of 

subsection (i). 

(i)(1) Except as provided in paragraph (2) of this subsection and 

section 3805 of this title, the decision, including the findings and 

determinations, of the presiding officer issued under subsection (h) 

of this section are final. 

(2)(A)(i) Except as provided in clause (ii) of this subparagraph, 

within 30 days after the presiding officer issues a decision under 

subsection (h) of this section, any person determined in such decision to be liable under section 3802 of this title may appeal such 

decision to the authority head. 

(ii) If, within the 30-day period described in clause (i) of this subparagraph, a person determined to be liable under this chapter requests the authority head for an extension of such 30-day period 

to file an appeal of a decision issued by the presiding officer under 

subsection (h) of this section, the authority head may extend such 

period if such person demonstrates good cause for such extension. 

(B) Any authority head reviewing under this section the decision, 

findings, and determinations of a presiding officer shall not consider any objection that was not raised in the hearing conducted 

pursuant to subsection (f) of this section unless a demonstration is 

made of extraordinary circumstances causing the failure to raise 

the objection. If any party demonstrates to the satisfaction of the 

authority head that additional evidence not presented at such hearing is material and that there were reasonable grounds for the failure to present such evidence at such hearing, the authority head 

shall remand the matter to the presiding officer for consideration 

of such additional evidence. 

(C) The authority head may affirm, reduce, reverse, compromise, 

remand, or settle any penalty or assessment determined by the 

presiding officer pursuant to this section. The authority head shall 

promptly send to each party to the appeal a copy of the decision 

of the authority head and a statement describing the right of any 

person determined to be liable under section 3802 of this title to 

judicial review under section 3805 of this title. 

(j) The reviewing official has the exclusive authority to compromise or settle any allegations of liability under section 3802 of 

this title against a person without the consent of the presiding officer at any time after the date on which the reviewing official is permitted to refer allegations of liability to a presiding officer under 

subsection (b) of this section and prior to the date on which the 

presiding officer issues a decision under subsection (h) of this section. Any such compromise or settlement shall be in writing. 

* * * * * * * 

TITLE 40, UNITED STATES CODE 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
217 

SUBTITLE IV—APPALACHIAN REGIONAL 

DEVELOPMENT 

* * * * * * * 

CHAPTER 145—SPECIAL APPALACHIAN PROGRAMS 

SUBCHAPTER I—PROGRAMS 

* * * * * * * 

§ 14502. Demonstration health projects 

(a) PURPOSE.—To demonstrate the value of adequate health facilities and services to the economic development of the Appalachian region, the Secretary of Health and Human Services may 

make grants for the planning, construction, equipment, and operation of multi-county demonstration health, nutrition, and child 

care projects, including hospitals, regional health diagnostic and 

treatment centers, and other facilities and services necessary for 

the purposes of this section. 

(b) PLANNING GRANTS.— (1) AUTHORITY TO PROVIDE AMOUNTS AND MAKE GRANTS.— The Secretary may provide amounts to the Appalachian Regional Commission for the support of its Health Advisory Committee and may make grants for expenses of planning necessary for the development and operation of demonstration 

health projects for the region. 

(2) LIMITATION ON AVAILABLE AMOUNTS.—The amount of a 

grant under this section for planning shall not be more than 

75 percent of expenses. 

(3) SOURCES OF ASSISTANCE.—The federal contribution may 

be provided entirely from amounts authorized under this section or in combination with amounts provided under other federal or federal grant programs. 

(4) FEDERAL SHARE.—Notwithstanding any provision of law 

limiting the federal share in those other programs, amounts 

appropriated to carry out this section may be used to increase 

the federal share to the maximum percentage cost of a grant 

authorized by this subsection. 

(c) CONSTRUCTION AND EQUIPMENT GRANTS.— (1) ADDITIONAL USES FOR CONSTRUCTION GRANTS.—Grants 

under this section for construction may also be used for— 

(A) the acquisition of privately owned facilities— 

(i) not operated for profit; or 

(ii) previously operated for profit if the Commission 

finds that health services would not otherwise be provided in the area served by the facility if the acquisition is not made; and 

(B) initial equipment. 

(2) STANDARDS FOR MAKING GRANTS.—Grants under this section for construction shall be made in accordance with section 

14523 of this title and shall not be incompatible with the applicable provisions of title VI of the Public Health Service Act (42 

U.S.C. 291 et seq.), the Developmental Disabilities Assistance 

and Bill of Rights Act of 2000 (42 U.S.C. 15001 et seq.), and 

other laws authorizing grants for the construction of health-reVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00223 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
218 

lated facilities, without regard to any provisions in those laws 

relating to appropriation authorization ceilings or to allotments 

among the States. 

(3) LIMITATION ON AVAILABLE AMOUNTS.—A grant for the 

construction or equipment of any component of a demonstration health project shall not be more than 80 percent of the 

cost. 

(4) SOURCES OF ASSISTANCE.—The federal contribution may 

be provided entirely from amounts authorized under this section or in combination with amounts provided under other federal grant programs for the construction or equipment of 

health-related facilities. 

(5) FEDERAL SHARE.—Notwithstanding any provision of law 

limiting the federal share in those other programs, amounts 

authorized under this section may be used to increase federal 

grants for component facilities of a demonstration health 

project to a maximum of 80 percent of the cost of the facilities. 

(d) OPERATION GRANTS.— (1) STANDARDS FOR MAKING GRANTS.—A grant for the operation of a demonstration health project shall not be made— 

(A) unless the facility is publicly owned, or owned by a 

public or private nonprofit organization, and is not operated for profit; 

(B) after five years following the commencement of the 

initial grant for operation of the project, except that child 

development demonstrations assisted under this section 

during fiscal year 1979 may be approved under section 

14322 of this title for continued support beyond that period, on request of the State, if the Commission finds that 

no federal, state, or local amounts are available to continue the project; and 

(C) unless the Secretary of Health and Human Services 

is satisfied that the operation of the project will be conducted under efficient management practices designed to 

obviate operating deficits. 

(2) LIMITATION ON AVAILABLE AMOUNTS.—Grants under this 

section for the operation (including initial operating amounts 

and operating deficits, which include the cost of attracting, 

training, and retaining qualified personnel) of a demonstration 

health project, whether or not constructed with amounts authorized to be appropriated by this section, may be made for 

up to— 

(A) 50 percent of the cost of that operation; 

(B) in the case of a project to be carried out in a county 

for which a distressed county designation is in effect under 

section 14526, 80 percent of the cost of that operation; or 

(C) in the case of a project to be carried out for a county 

for which an at-risk county designation is in effect under 

section 14526, 70 percent of the cost of that operation. 

(3) SOURCES OF ASSISTANCE.—The federal contribution may 

be provided entirely from amounts appropriated to carry out 

this section or in combination with amounts provided under 

other federal grant programs for the operation of health related facilities and the provision of health and child development services, including parts A and B of title IV and title XX 


emcdonald on DSK67QTVN1PROD with HEARING
219 

of the Social Security Act (42 U.S.C. 601 et seq., 620 et seq., 

1397 et seq.). 

(4) FEDERAL SHARE.—Notwithstanding any provision of law 

limiting the federal share in those other programs, amounts 

appropriated to carry out this section may be used to increase 

federal grants for operating components of a demonstration 

health project to the maximum percentage cost of a grant authorized by this subsection. 

(5) STATE DEEMED TO MEET REQUIREMENT OF PROVIDING ASSISTANCE OR SERVICES ON STATEWIDE BASIS.—Notwithstanding 

any provision of the Social Security Act (42 U.S.C. 301 et seq.) 

requiring assistance or services on a statewide basis, a State 

providing assistance or services under a federal grant program 

described in paragraph (2) in any area of the region approved 

by the Commission is deemed to be meeting that requirement. 

(e) GRANT SOURCES AND USE OF GRANTS IN COMPUTING ALLOTMENTS.—Grants under this section— 

(1) shall be made only out of amounts specifically appropriated for the purpose of carrying out this subtitle; and 

(2) shall not be taken into account in computing allotments 

among the States under any other law. 

(f) MAXIMUM COMMISSION CONTRIBUTION.— 

(1) IN GENERAL.—Subject to paragraphs (2) and (3), the Commission may contribute not more than 50 percent of any 

project cost eligible for financial assistance under this section 

from amounts appropriated to carry out this subtitle. 

(2) DISTRESSED COUNTIES.—The maximum Commission contribution for a project to be carried out in a county for which 

a distressed county designation is in effect under section 14526 

of this title may be increased to the lesser of— 

(A) 80 percent; or 

(B) the maximum federal contribution percentage authorized by this section. 

(3) AT-RISK COUNTIES.—The maximum Commission contribution for a project to be carried out in a county for which an atrisk county designation is in effect under section 14526 may be 

increased to the lesser of— 

(A) 70 percent; or 

(B) the maximum Federal contribution percentage authorized by this section. 

(g) EMPHASIS ON OCCUPATIONAL DISEASES FROM COAL MINING.— 

To provide for the further development of the Appalachian region’s 

human resources, grants under this section shall give special emphasis to programs and research for the early detection, diagnosis, 

and treatment of occupational diseases arising from coal mining, 

such as black lung. 

* * * * * * * 

PUBLIC HEALTH SERVICE ACT 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
220 

TITLE XX—ADOLESCENT FAMILY LIFE DEMONSTRATION 

PROJECTS 

* * * * * * * 

REQUIREMENTS FOR APPLICATIONS

SEC. 2006. (a) An application for a grant for a demonstration 

project for services under this title shall be in such form and contain such information as the Secretary may require, and shall include— 

(1) an identification of the incidence of adolescent pregnancy 

and related problems; 

(2) a description of the economic conditions and income levels 

in the geographic area to be served; 

(3) a description of existing pregnancy prevention services 

and programs of care for pregnant adolescents and adolescent 

parents (including adoption services), and including where, 

how, by whom, and to which population groups such services 

are provided, and the extent to which they are coordinated in 

the geographic area to be served; 

(4) a description of the major unmet needs for services for 

adolescents at risk of initial or recurrent pregnancies and an 

estimate of the number of adolescents not being served in the 

area; 

(5)(A) in the case of an applicant who will provide care services, a description of how all core services will be provided in 

the demonstration project using funds under this title or will 

otherwise be provided by the grantee in the area to be served, 

the population to which such services will be provided, how 

such services will be coordinated, integrated, and linked with 

other related programs and services and the source or sources 

of funding of such core services in the public and private sectors; or 

(B) in the case of an applicant who will provide prevention 

services, a description of the necessary services to be provided 

and how the applicant will provide such services; 

(6) a description of the manner in which adolescents needing 

services other than the services provided directly by the applicant will be identified and how access and appropriate referral 

to such other services (such as medicaid; licensed adoption 

agencies; maternity home services; public assistance; employment services; child care services for adolescent parents; and 

other city, county, and State programs related to adolescent 

pregnancy) will be provided, including a description of a plan 

to coordinate such other services with the services supported 

under this title; 

(7) a description of the applicant’s capacity to continue services as Federal funds decrease and in the absence of Federal 

assistance; 

(8) a description of the results expected from the provision 

of services, and the procedures to be used for evaluating those 

results; 

(9) a summary of the views of public agencies, providers of 

services, and the general public in the geographic area to be 

served, concerning the proposed use of funds provided for a 


emcdonald on DSK67QTVN1PROD with HEARING
221 

demonstration project for services under this title and a description of procedures used to obtain those views, and, in the 

case of applicants who propose to coordinate services administered by a State, the written comments of the appropriate 

State officials responsible for such services; 

(10) assurances that the applicant will have an ongoing quality assurance program; 

(11) assurances that, where appropriate, the applicant shall 

have a system for maintaining the confidentiality of patient 

records in accordance with regulations promulgated by the Secretary; 

(12) assurances that the applicant will demonstrate its financial responsibility by the use of such accounting procedures 

and other requirements as may be prescribed by the Secretary; 

(13) assurances that the applicant (A) has or will have a contractual or other arrangement with the agency of the State (in 

which the applicant provides services) that administers or supervises the administration of a State plan approved under 

title XIX of the Social Security Act for the payment of all or 

a part of the applicant’s costs in providing health services to 

persons who are eligible for medical assistance under such a 

State plan, or (B) has made or will make every reasonable effort to enter into such an arrangement; 

(14) assurances that the applicant has made or will make 

and will continue to make every reasonable effort to collect appropriate reimbursement for its costs in providing health services to persons who are entitled to benefits under title V of the 

Social Security Act, to medical assistance under a State plan 

approved under title XIX of such Act, or to assistance for medical expenses under any other public assistance program or private health insurance program; 

(15) assurances that the applicant has or will make and will 

continue to make every reasonable effort to collect appropriate 

reimbursement for its costs in providing services to persons entitled to services under parts B and E of title IV and title XX 

of the Social Security Act; 

(16)(A) a description of— 

(i) the schedule of fees to be used in the provision of 

services, which shall comply with section 2004(c) and 

which shall be designed to cover all reasonable direct and 

indirect costs incurred by the applicant in providing services; and 

(ii) a corresponding schedule of discounts to be applied 

to the payment of such fees, which shall comply with section 2004(c) and which shall be adjusted on the basis of 

the ability of the eligible person to pay; 

(B) assurances that the applicant has made and will continue to make every reasonable effort— 

(i) to secure from eligible persons payment for services 

in accordance with such schedules; 

(ii) to collect reimbursement for health or other services 

provided to persons who are entitled to have payment 

made on their behalf for such services under any Federal 

or other government program or private insurance program; and 


emcdonald on DSK67QTVN1PROD with HEARING
222 

(iii) to seek such reimbursement on the basis of the full 

amount of fees for services without application of any discount; and 

(C) assurances that the applicant has submitted or will submit to the Secretary such reports as the Secretary may require 

to determine compliance with this paragraph; 

(17) assurances that the applicant will make maximum use 

of funds available under title X of this Act; 

(18) assurances that the acceptance by any individual of family planning services or family planning information (including 

educational materials) provided through financial assistance 

under this title shall be voluntary and shall not be a prerequisite to eligibility for or receipt of any other service furnished by the applicant; 

(19) assurances that fees collected by the applicant for services rendered in accordance with this title shall be used by the 

applicant to further the purposes of this title; 

(20) assurances that the applicant, if providing both prevention and care services will not exclude or discriminate against 

any adolescent who receives prevention services and subsequently requires care services as a pregnant adolescent; 

(21) a description of how the applicant will, as appropriate 

in the provision of services— 

(A) involve families of adolescents in a manner which 

will maximize the role of the family in the solution of problems relating to the parenthood or pregnancy of the adolescent; 

(B) involve religious and charitable organizations, voluntary associations, and other groups in the private sector 

as well as services provided by publicly sponsored initiatives; 

(22)(A) assurances that— 

(i) except as provided in subparagraph (B) and subject to 

clause (ii), the applicant will notify the parents or guardians of any unemancipated minor requesting services from 

the applicant and, except as provided in subparagraph (C), 

will obtain the permission of such parents or guardians 

with respect to the provision of such services; and 

(ii) in the case of a pregnant unemancipated minor requesting services from the applicant, the applicant will notify the parents or guardians of such minor under clause 

(i) within a reasonable period of time; 

(B) assurances that the applicant will not notify or request 

the permission of the parents or guardian of any 

unemancipated minor without the consent of the minor— 

(i) who solely is requesting from the applicant pregnancy 

testing or testing or treatment for venereal disease; 

(ii) who is the victim of incest involving a parent; or 

(iii) if an adult sibling of the minor or an adult aunt, 

uncle, or grandparent who is related to the minor by blood 

certifies to the grantee that notification of the parents or 

guardians of such minor would result in physical injury to 

such minor; and 

(C) assurances that the applicant will not require, with respect to the provision of services, the permission of the parents 


emcdonald on DSK67QTVN1PROD with HEARING
223 

or guardians of any pregnant unemancipated minor if such 

parents or guardians are attempting to compel such minor to 

have an abortion; 

(23) assurances that primary emphasis for services supported under this title shall be given to adolescents seventeen 

and under who are not able to obtain needed assistance 

through other means; 

(24) assurances that funds received under this title shall 

supplement and not supplant funds received from any other 

Federal, State, or local program or any private sources of 

funds; and 

(25) a plan for the conduct of, and assurances that the applicant will conduct, evaluations of the effectiveness of the services supported under this title in accordance with subsection 

(b). 

(b)(1) Each grantee which receives funds for a demonstration 

project for services under this title shall expend at least 1 per centum but not in excess of 5 per centum of the amounts received 

under this title for the conduct of evaluations of the services supported under this title. The Secretary may, for a particular grantee 

upon good cause shown, waive the provisions of the preceding sentence with respect to the amounts to be expended on evaluations, 

but may not waive the requirement that such evaluations be conducted. 

(2) Evaluations required by paragraph (1) shall be conducted by 

an organization or entity which is independent of the grantee providing services supported under this title. To assist in conducting 

the evaluations required by paragraph (1), each grantee shall develop a working relationship with a college or university located in 

the grantee’s State which will provide or assist in providing monitoring and evaluation of services supported under this title unless 

no college or university in the grantee’s State is willing or has the 

capacity to provide or assist in providing such monitoring and assistance. 

(3) The Secretary may provide technical assistance with respect 

to the conduct of evaluations required under this subsection to any 

grantee which is unable to develop a working relationship with a 

college or university in the applicant’s State for the reasons described in paragraph (2). 

(c) Each grantee which receives funds for a demonstration project 

for services under this title shall make such reports concerning its 

use of Federal funds as the Secretary may require. Reports shall 

include, at such times as are considered appropriate by the Secretary, the results of the evaluations of the services supported 

under this title. 

(d)(1) A grantee shall periodically notify the Secretary of the 

exact number of instances in which a grantee does not notify the 

parents or guardians of a pregnant unemancipated minor under 

subsection (a)(22)(B)(iii). 

(2) For purposes of subsection (a)(22)(B)(iii), the term ‘‘adult’’ 

means an adult as defined by State law. 

(e) Each applicant shall provide the Governor of the State in 

which the applicant is located a copy of each application submitted 

to the Secretary for a grant for a demonstration project for services 

under this title. The Governor shall submit to the applicant comVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00229 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
224 

ments on any such application within the period of sixty days beginning on the day when the Governor receives such copy. The applicant shall include the comments of the Governor with such application. 

(f) No application submitted for a grant for a demonstration 

project for care services under this title may be approved unless 

the Secretary is satisfied that core services shall be available 

through the applicant within a reasonable time after such grant is 

received. 

* * * * * * * 

OLDER AMERICANS ACT OF 1965 

* * * * * * * 

TITLE II—ADMINISTRATION ON AGING 

* * * * * * * 

FEDERAL AGENCY CONSULTATION

SEC. 203. (a)(1) The Assistant Secretary, in carrying out the objectives and provisions of this Act, shall coordinate, advise, consult 

with, and cooperate with the head of each department, agency, or 

instrumentality of the Federal Government proposing or administering programs or services substantially related to the objectives 

of this Act, with respect to such programs or services. In particular, 

the Assistant Secretary shall coordinate, advise, consult, and cooperate with the Secretary of Labor in carrying out title V and with 

the Corporation for National and Community Service in carrying 

out this Act. 

(2) The head of each department, agency, or instrumentality of 

the Federal Government proposing to establish programs and services substantially related to the objectives of this Act shall consult 

with the Assistant Secretary prior to the establishment of such programs and services. To achieve appropriate coordination, the head 

of each department, agency, or instrumentality of the Federal Government administering any program substantially related to the 

objectives of this Act, particularly administering any program referred to in subsection (b), shall consult and cooperate with the Assistant Secretary in carrying out such program. In particular, the 

Secretary of Labor shall consult and cooperate with the Assistant 

Secretary in carrying out title I of the Workforce Innovation and 

Opportunity Act. 

(3) The head of each department, agency, or instrumentality of 

the Federal Government administering programs and services substantially related to the objectives of this Act shall collaborate with 

the Assistant Secretary in carrying out this Act, and shall develop 

a written analysis, for review and comment by the Assistant Secretary, of the impact of such programs and services on— 

(A) older individuals (with particular attention to low-income 

older individuals, including low-income minority older individuals, older individuals with limited English proficiency, and 

older individuals residing in rural areas) and eligible individuals (as defined in section 518); and 


emcdonald on DSK67QTVN1PROD with HEARING
225 

(B) the functions and responsibilities of State agencies and 

area agencies on aging. 

(b) For the purposes of subsection (a), programs related to the objectives of this Act shall include— 

(1) title I of the Workforce Innovation and Opportunity Act, 

(2) title II of the Domestic Volunteer Service Act of 1973, 

(3) titles XVI, XVIII, XIX, and XX of the Social Security Act, 

(4) sections 231 and 232 of the National Housing Act, 

(5) the United States Housing Act of 1937, 

(6) section 202 of the Housing Act of 1959, 

(7) title I of the Housing and Community Development Act 

of 1974, 

(8) title I of the Higher Education Act of 1965 and the Adult 

Education and Family Literacy Act, 

(9) sections 3, 9, and 16 of the Urban Mass Transportation 

Act of 1964, 

(10) the Public Health Service Act, including block grants 

under title XIX of such Act, 

(11) the Low-Income Home Energy Assistance Act of 1981, 

(12) part A of the Energy Conservation in Existing Buildings 

Act of 1976, relating to weatherization assistance for low income persons, 

(13) the Community Services Block Grant Act, 

(14) demographic statistics and analysis programs conducted 

by the Bureau of the Census under title 13, United States 

Code, 

(15) parts II and III of title 38, United States Code, 

(16) the Rehabilitation Act of 1973, 

(17) the Developmental Disabilities Assistance and Bill of 

Rights Act of 2000, 

(18) the Edward Byrne Memorial State and Local Law Enforcement Assistance Programs, established under part E of 

title I of the Omnibus Crime Control and Safe Streets Act of 

1968 (42 U.S.C. 3750–3766b)), and 

(19) sections 4 and 5 of the Assistive Technology Act of 1998 

(29 U.S.C. 3003, 3004). 

(c)(1) The Secretary, in collaboration with the Federal officials 

specified in paragraph (2), shall establish an Interagency Coordinating Committee on Aging (referred to in this subsection as the 

‘‘Committee’’) focusing on the coordination of agencies with respect 

to aging issues. 

(2) The officials referred to in paragraph (1) shall include the 

Secretary of Labor and the Secretary of Housing and Urban Development, and may include, at the direction of the President, the Attorney General, the Secretary of Transportation, the Secretary of 

the Treasury, the Secretary of Agriculture, the Secretary of Homeland Security, the Commissioner of Social Security, and such other 

Federal officials as the President may direct. An official described 

in this paragraph may appoint a designee to carry out the official’s 

duties under paragraph (1). 

(3) The Secretary of Health and Human Services shall serve as 

the first chairperson of the Committee, for 1 term, and the Secretary of Housing and Urban Development shall serve as the chairperson for the following term. After that following term, the Committee shall select a chairperson from among the members of the 


emcdonald on DSK67QTVN1PROD with HEARING
226 

Committee, and any member may serve as the chairperson. No 

member may serve as the chairperson for more than 1 consecutive 

term. 

(4) For purposes of this subsection, a term shall be a period of 

2 calendar years. 

(5) The Committee shall meet not less often than once each year. 

(6) The Committee shall— 

(A) share information with and establish an ongoing system 

to improve coordination among Federal agencies with responsibility for programs and services for older individuals and recommend improvements to such system with an emphasis on— 

(i) improving access to programs and services for older 

individuals; 

(ii) maximizing the impact of federally funded programs 

and services for older individuals by increasing the efficiency, effectiveness, and delivery of such programs and 

services; 

(iii) planning and preparing for the impact of demographic changes on programs and services for older individuals; and 

(iv) reducing or eliminating areas of overlap and duplication by Federal agencies in the provision and accessibility 

of such programs and services; 

(B) identify, promote, and implement (as appropriate), best 

practices and evidence-based program and service models to 

assist older individuals in meeting their housing, health care, 

and other supportive service needs, including— 

(i) consumer-directed care models for home and community-based care and supportive services that link housing, 

health care, and other supportive services and that facilitate aging in place, enabling older individuals to remain in 

their homes and communities as the individuals age; and 

(ii) innovations in technology applications (including assistive technology devices and assistive technology services) that give older individuals access to information on 

available services or that help in providing services to 

older individuals; 

(C) collect and disseminate information about older individuals and the programs and services available to the individuals 

to ensure that the individuals can access comprehensive information; 

(D) work with the Federal Interagency Forum on Aging-Related Statistics, the Bureau of the Census, and member agencies to ensure the continued collection of data relating to the 

housing, health care, and other supportive service needs of 

older individuals and to support efforts to identify and address 

unmet data needs; 

(E) actively seek input from and consult with nongovernmental experts and organizations, including public health interest and research groups and foundations about the activities 

described in subparagraphs (A) through (F); 

(F) identify any barriers and impediments, including barriers 

and impediments in statutory and regulatory law, to the access 

and use by older individuals of federally funded programs and 

services; and 


emcdonald on DSK67QTVN1PROD with HEARING
227 

(G) work with States to better provide housing, health care, 

and other supportive services to older individuals by— 

(i) holding meetings with State agencies; 

(ii) providing ongoing technical assistance to States 

about better meeting the needs of older individuals; and 

(iii) working with States to designate liaisons, from the 

State agencies, to the Committee. 

(7) Not later than 90 days following the end of each term, the 

Committee shall prepare and submit to the Committee on Financial Services of the House of Representatives, the Committee on 

Education and the Workforce of the House of Representatives, the 

Committee on Energy and Commerce of the House of Representatives, the Committee on Ways and Means of the House of Representatives, the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Health, Education, Labor, 

and Pensions of the Senate, and the Special Committee on Aging 

of the Senate, a report that— 

(A) describes the activities and accomplishments of the Committee in— 

(i) enhancing the overall coordination of federally funded 

programs and services for older individuals; and 

(ii) meeting the requirements of paragraph (6); 

(B) incorporates an analysis from the head of each agency 

that is a member of the interagency coordinating committee established under paragraph (1) that describes the barriers and 

impediments, including barriers and impediments in statutory 

and regulatory law (as the chairperson of the Committee determines to be appropriate), to the access and use by older individuals of programs and services administered by such agency; 

and 

(C) makes such recommendations as the chairman determines to be appropriate for actions to meet the needs described 

in paragraph (6) and for coordinating programs and services 

designed to meet those needs. 

(8) On the request of the Committee, any Federal Government 

employee may be detailed to the Committee without reimbursement, and such detail shall be without interruption or loss of civil 

service status or privilege. 

* * * * * * * 

SURPLUS PROPERTY ELIGIBILITY

SEC. 213. Any State or local government agency, and any nonprofit organization or institution, which receives funds appropriated for programs for older individuals under this Act, under 

title IV or title XX of the Social Security Act, or under titles VIII 

and X of the Economic Opportunity Act of 1964 and the Community Services Block Grant Act, shall be deemed eligible to receive 

for such programs, property which is declared surplus to the needs 

of the Federal Government in accordance with laws applicable to 

surplus property. 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
228 

TITLE III—GRANTS FOR STATE AND COMMUNITY 

PROGRAMS ON AGING 

PART A—GENERAL PROVISIONS

* * * * * * * 

AREA PLANS

SEC. 306. (a) Each area agency on aging designated under section 

305(a)(2)(A) shall, in order to be approved by the State agency, prepare and develop an area plan for a planning and service area for 

a two-, three-, or four-year period determined by the State agency, 

with such annual adjustments as may be necessary. Each such 

plan shall be based upon a uniform format for area plans within 

the State prepared in accordance with section 307(a)(1). Each such 

plan shall— 

(1) provide, through a comprehensive and coordinated system, for supportive services, nutrition services, and, where appropriate, for the establishment, maintenance, or construction 

of multipurpose senior centers, within the planning and service 

area covered by the plan, including determining the extent of 

need for supportive services, nutrition services, and multipurpose senior centers in such area (taking into consideration, 

among other things, the number of older individuals with low 

incomes residing in such area, the number of older individuals 

who have greatest economic need (with particular attention to 

low-income older individuals, including low-income minority 

older individuals, older individuals with limited English proficiency, and older individuals residing in rural areas) residing 

in such area, the number of older individuals who have greatest social need (with particular attention to low-income older 

individuals, including low-income minority older individuals, 

older individuals with limited English proficiency, and older individuals residing in rural areas) residing in such area, and 

the number of older individuals who are Indians residing in 

such area, and the efforts of voluntary organizations in the 

community), evaluating the effectiveness of the use of resources in meeting such need, and entering into agreements 

with providers of supportive services, nutrition services, or 

multipurpose senior centers in such area, for the provision of 

such services or centers to meet such need; 

(2) provide assurances that an adequate proportion, as required under section 307(a)(2), of the amount allotted for part 

B to the planning and service area will be expended for the delivery of each of the following categories of services— 

(A) services associated with access to services (transportation, health services (including mental health services), 

outreach, information and assistance (which may include 

information and assistance to consumers on availability of 

services under part B and how to receive benefits under 

and participate in publicly supported programs for which 

the consumer may be eligible), and case management services); 

(B) in-home services, including supportive services for 

families of older individuals who are victims of Alzheimer’s 


emcdonald on DSK67QTVN1PROD with HEARING
229 

disease and related disorders with neurological and organic brain dysfunction; and 

(C) legal assistance; 

and assurances that the area agency on aging will report annually to the State agency in detail the amount of funds expended for each such category during the fiscal year most recently concluded; 

(3)(A) designate, where feasible, a focal point for comprehensive service delivery in each community, giving special consideration to designating multipurpose senior centers (including 

multipurpose senior centers operated by organizations referred 

to in paragraph (6)(C)) as such focal point; and 

(B) specify, in grants, contracts, and agreements implementing the plan, the identity of each focal point so designated; 

(4)(A)(i)(I) provide assurances that the area agency on aging 

will— 

(aa) set specific objectives, consistent with State policy, 

for providing services to older individuals with greatest 

economic need, older individuals with greatest social need, 

and older individuals at risk for institutional placement; 

(bb) include specific objectives for providing services to 

low-income minority older individuals, older individuals 

with limited English proficiency, and older individuals residing in rural areas; and 

(II) include proposed methods to achieve the objectives described in items (aa) and (bb) of subclause (I); 

(ii) provide assurances that the area agency on aging will include in each agreement made with a provider of any service 

under this title, a requirement that such provider will— 

(I) specify how the provider intends to satisfy the service 

needs of low-income minority individuals, older individuals 

with limited English proficiency, and older individuals residing in rural areas in the area served by the provider; 

(II) to the maximum extent feasible, provide services to 

low-income minority individuals, older individuals with 

limited English proficiency, and older individuals residing 

in rural areas in accordance with their need for such services; and 

(III) meet specific objectives established by the area 

agency on aging, for providing services to low-income minority individuals, older individuals with limited English 

proficiency, and older individuals residing in rural areas 

within the planning and service area; and 

(iii) with respect to the fiscal year preceding the fiscal year 

for which such plan is prepared— 

(I) identify the number of low-income minority older individuals in the planning and service area; 

(II) describe the methods used to satisfy the service 

needs of such minority older individuals; and 

(III) provide information on the extent to which the area 

agency on aging met the objectives described in clause (i); 

(B) provide assurances that the area agency on aging will 

use outreach efforts that will— 


emcdonald on DSK67QTVN1PROD with HEARING
230 

(i) identify individuals eligible for assistance under this 

Act, with special emphasis on— 

(I) older individuals residing in rural areas; 

(II) older individuals with greatest economic need 

(with particular attention to low-income minority individuals and older individuals residing in rural areas); 

(III) older individuals with greatest social need (with 

particular attention to low-income minority individuals and older individuals residing in rural areas); 

(IV) older individuals with severe disabilities; 

(V) older individuals with limited English proficiency; 

(VI) older individuals with Alzheimer’s disease and 

related disorders with neurological and organic brain 

dysfunction (and the caretakers of such individuals); 

and 

(VII) older individuals at risk for institutional placement; and 

(ii) inform the older individuals referred to in subclauses 

(I) through (VI) of clause (i), and the caretakers of such individuals, of the availability of such assistance; and 

(C) contain an assurance that the area agency on aging will 

ensure that each activity undertaken by the agency, including 

planning, advocacy, and systems development, will include a 

focus on the needs of low-income minority older individuals 

and older individuals residing in rural areas; 

(5) provide assurances that the area agency on aging will coordinate planning, identification, assessment of needs, and provision of services for older individuals with disabilities, with 

particular attention to individuals with severe disabilities and 

individuals at risk for institutional placement, with agencies 

that develop or provide services for individuals with disabilities; 

(6) provide that the area agency on aging will— 

(A) take into account in connection with matters of general policy arising in the development and administration 

of the area plan, the views of recipients of services under 

such plan; 

(B) serve as the advocate and focal point for older individuals within the community by (in cooperation with 

agencies, organizations, and individuals participating in 

activities under the plan) monitoring, evaluating, and commenting upon all policies, programs, hearings, levies, and 

community actions which will affect older individuals; 

(C)(i) where possible, enter into arrangements with organizations providing day care services for children, assistance to older individuals caring for relatives who are children, and respite for families, so as to provide opportunities for older individuals to aid or assist on a voluntary 

basis in the delivery of such services to children, adults, 

and families; 

(ii) if possible regarding the provision of services under 

this title, enter into arrangements and coordinate with organizations that have a proven record of providing services 

to older individuals, that— 


emcdonald on DSK67QTVN1PROD with HEARING
231 

(I) were officially designated as community action 

agencies or community action programs under section 

210 of the Economic Opportunity Act of 1964 (42 

U.S.C. 2790) for fiscal year 1981, and did not lose the 

designation as a result of failure to comply with such 

Act; or 

(II) came into existence during fiscal year 1982 as 

direct successors in interest to such community action 

agencies or community action programs; 

and that meet the requirements under section 676B of the 

Community Services Block Grant Act; and 

(iii) make use of trained volunteers in providing direct 

services delivered to older individuals and individuals with 

disabilities needing such services and, if possible, work in 

coordination with organizations that have experience in 

providing training, placement, and stipends for volunteers 

or participants (such as organizations carrying out Federal 

service programs administered by the Corporation for National and Community Service), in community service settings; 

(D) establish an advisory council consisting of older individuals (including minority individuals and older individuals residing in rural areas) who are participants or who 

are eligible to participate in programs assisted under this 

Act, family caregivers of such individuals, representatives 

of older individuals, service providers, representatives of 

the business community, local elected officials, providers of 

veterans’ health care (if appropriate), and the general public, to advise continuously the area agency on aging on all 

matters relating to the development of the area plan, the 

administration of the plan and operations conducted under 

the plan; 

(E) establish effective and efficient procedures for coordination of— 

(i) entities conducting programs that receive assistance under this Act within the planning and service 

area served by the agency; and 

(ii) entities conducting other Federal programs for 

older individuals at the local level, with particular emphasis on entities conducting programs described in 

section 203(b), within the area; 

(F) in coordination with the State agency and with the 

State agency responsible for mental health services, increase public awareness of mental health disorders, remove barriers to diagnosis and treatment, and coordinate 

mental health services (including mental health 

screenings) provided with funds expended by the area 

agency on aging with mental health services provided by 

community health centers and by other public agencies 

and nonprofit private organizations; 

(G) if there is a significant population of older individuals who are Indians in the planning and service area of 

the area agency on aging, the area agency on aging shall 

conduct outreach activities to identify such individuals in 


emcdonald on DSK67QTVN1PROD with HEARING
232 

such area and shall inform such individuals of the availability of assistance under this Act; 

(7) provide that the area agency on aging shall, consistent 

with this section, facilitate the area-wide development and implementation of a comprehensive, coordinated system for providing long-term care in home and community-based settings, 

in a manner responsive to the needs and preferences of older 

individuals and their family caregivers, by— 

(A) collaborating, coordinating activities, and consulting 

with other local public and private agencies and organizations responsible for administering programs, benefits, and 

services related to providing long-term care; 

(B) conducting analyses and making recommendations 

with respect to strategies for modifying the local system of 

long-term care to better— 

(i) respond to the needs and preferences of older individuals and family caregivers; 

(ii) facilitate the provision, by service providers, of 

long-term care in home and community-based settings; 

and 

(iii) target services to older individuals at risk for institutional placement, to permit such individuals to remain in home and community-based settings; 

(C) implementing, through the agency or service providers, evidence-based programs to assist older individuals 

and their family caregivers in learning about and making 

behavioral changes intended to reduce the risk of injury, 

disease, and disability among older individuals; and 

(D) providing for the availability and distribution 

(through public education campaigns, Aging and Disability 

Resource Centers, the area agency on aging itself, and 

other appropriate means) of information relating to— 

(i) the need to plan in advance for long-term care; 

and 

(ii) the full range of available public and private 

long-term care (including integrated long-term care) 

programs, options, service providers, and resources; 

(8) provide that case management services provided under 

this title through the area agency on aging will— 

(A) not duplicate case management services provided 

through other Federal and State programs; 

(B) be coordinated with services described in subparagraph (A); and 

(C) be provided by a public agency or a nonprofit private 

agency that— 

(i) gives each older individual seeking services under 

this title a list of agencies that provide similar services within the jurisdiction of the area agency on 

aging; 

(ii) gives each individual described in clause (i) a 

statement specifying that the individual has a right to 

make an independent choice of service providers and 

documents receipt by such individual of such statement; 


emcdonald on DSK67QTVN1PROD with HEARING
233 

(iii) has case managers acting as agents for the individuals receiving the services and not as promoters for 

the agency providing such services; or 

(iv) is located in a rural area and obtains a waiver 

of the requirements described in clauses (i) through 

(iii); 

(9) provide assurances that the area agency on aging, in carrying out the State Long-Term Care Ombudsman program 

under section 307(a)(9), will expend not less than the total 

amount of funds appropriated under this Act and expended by 

the agency in fiscal year 2000 in carrying out such a program 

under this title; 

(10) provide a grievance procedure for older individuals who 

are dissatisfied with or denied services under this title; 

(11) provide information and assurances concerning services 

to older individuals who are Native Americans (referred to in 

this paragraph as ‘‘older Native Americans’’), including— 

(A) information concerning whether there is a significant 

population of older Native Americans in the planning and 

service area and if so, an assurance that the area agency 

on aging will pursue activities, including outreach, to increase access of those older Native Americans to programs 

and benefits provided under this title; 

(B) an assurance that the area agency on aging will, to 

the maximum extent practicable, coordinate the services 

the agency provides under this title with services provided 

under title VI; and 

(C) an assurance that the area agency on aging will 

make services under the area plan available, to the same 

extent as such services are available to older individuals 

within the planning and service area, to older Native 

Americans; and 

(12) provide that the area agency on aging will establish procedures for coordination of services with entities conducting 

other Federal or federally assisted programs for older individuals at the local level, with particular emphasis on entities 

conducting programs described in section 203(b) within the 

planning and service area. 

(13) provide assurances that the area agency on aging will— 

(A) maintain the integrity and public purpose of services 

provided, and service providers, under this title in all contractual and commercial relationships; 

(B) disclose to the Assistant Secretary and the State 

agency— 

(i) the identity of each nongovernmental entity with 

which such agency has a contract or commercial relationship relating to providing any service to older individuals; and 

(ii) the nature of such contract or such relationship; 

(C) demonstrate that a loss or diminution in the quantity or quality of the services provided, or to be provided, 

under this title by such agency has not resulted and will 

not result from such contract or such relationship; 

(D) demonstrate that the quantity or quality of the services to be provided under this title by such agency will be 


emcdonald on DSK67QTVN1PROD with HEARING
234 

enhanced as a result of such contract or such relationship; 

and 

(E) on the request of the Assistant Secretary or the 

State, for the purpose of monitoring compliance with this 

Act (including conducting an audit), disclose all sources 

and expenditures of funds such agency receives or expends 

to provide services to older individuals; 

(14) provide assurances that preference in receiving services 

under this title will not be given by the area agency on aging 

to particular older individuals as a result of a contract or commercial relationship that is not carried out to implement this 

title; 

(15) provide assurances that funds received under this title 

will be used— 

(A) to provide benefits and services to older individuals, 

giving priority to older individuals identified in paragraph 

(4)(A)(i); and 

(B) in compliance with the assurances specified in paragraph (13) and the limitations specified in section 212; 

(16) provide, to the extent feasible, for the furnishing of services under this Act, consistent with self-directed care; and 

(17) include information detailing how the area agency on 

aging will coordinate activities, and develop long-range emergency preparedness plans, with local and State emergency response agencies, relief organizations, local and State governments, and any other institutions that have responsibility for 

disaster relief service delivery. 

(b)(1) An area agency on aging may include in the area plan an 

assessment of how prepared the area agency on aging and service 

providers in the planning and service area are for any anticipated 

change in the number of older individuals during the 10-year period following the fiscal year for which the plan is submitted. 

(2) Such assessment may include— 

(A) the projected change in the number of older individuals 

in the planning and service area; 

(B) an analysis of how such change may affect such individuals, including individuals with low incomes, individuals with 

greatest economic need, minority older individuals, older individuals residing in rural areas, and older individuals with limited English proficiency; 

(C) an analysis of how the programs, policies, and services 

provided by such area agency can be improved, and how resource levels can be adjusted to meet the needs of the changing 

population of older individuals in the planning and service 

area; and 

(D) an analysis of how the change in the number of individuals age 85 and older in the planning and service area is expected to affect the need for supportive services. 

(3) An area agency on aging, in cooperation with government officials, State agencies, tribal organizations, or local entities, may 

make recommendations to government officials in the planning and 

service area and the State, on actions determined by the area agency to build the capacity in the planning and service area to meet 

the needs of older individuals for— 

(A) health and human services; 


emcdonald on DSK67QTVN1PROD with HEARING
235 

(B) land use; 

(C) housing; 

(D) transportation; 

(E) public safety; 

(F) workforce and economic development; 

(G) recreation; 

(H) education; 

(I) civic engagement; 

(J) emergency preparedness; and 

(K) any other service as determined by such agency. 

(c) Each State, in approving area agency on aging plans under 

this section, shall waive the requirement described in paragraph 

(2) of subsection (a) for any category of services described in such 

paragraph if the area agency on aging demonstrates to the State 

agency that services being furnished for such category in the area 

are sufficient to meet the need for such services in such area and 

had conducted a timely public hearing upon request. 

(d)(1) Subject to regulations prescribed by the Assistant Secretary, an area agency on aging designated under section 

305(a)(2)(A) or, in areas of a State where no such agency has been 

designated, the State agency, may enter into agreement with agencies administering programs under the Rehabilitation Act of 1973, 

and titles XIX and XX of the Social Security Act for the purpose 

of developing and implementing plans for meeting the common 

need for transportation services of individuals receiving benefits 

under such Acts and older individuals participating in programs 

authorized by this title. 

(2) In accordance with an agreement entered into under paragraph (1), funds appropriated under this title may be used to purchase transportation services for older individuals and may be 

pooled with funds made available for the provision of transportation services under the Rehabilitation Act of 1973, and titles XIX 

and XX of the Social Security Act. 

(e) An area agency on aging may not require any provider of 

legal assistance under this title to reveal any information that is 

protected by the attorney-client privilege. 

(f)(1) If the head of a State agency finds that an area agency on 

aging has failed to comply with Federal or State laws, including 

the area plan requirements of this section, regulations, or policies, 

the State may withhold a portion of the funds to the area agency 

on aging available under this title. 

(2)(A) The head of a State agency shall not make a final determination withholding funds under paragraph (1) without first affording the area agency on aging due process in accordance with 

procedures established by the State agency. 

(B) At a minimum, such procedures shall include procedures 

for— 

(i) providing notice of an action to withhold funds; 

(ii) providing documentation of the need for such action; and 

(iii) at the request of the area agency on aging, conducting 

a public hearing concerning the action. 

(3)(A) If a State agency withholds the funds, the State agency 

may use the funds withheld to directly administer programs under 

this title in the planning and service area served by the area agenVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00241 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
236 

cy on aging for a period not to exceed 180 days, except as provided 

in subparagraph (B). 

(B) If the State agency determines that the area agency on aging 

has not taken corrective action, or if the State agency does not approve the corrective action, during the 180-day period described in 

subparagraph (A), the State agency may extend the period for not 

more than 90 days. 

* * * * * * * 

LOW-INCOME HOME ENERGY ASSISTANCE ACT OF 1981 

* * * * * * * 

TITLE XXVI—LOW-INCOME HOME ENERGY ASSISTANCE 

* * * * * * * 

APPLICATIONS AND REQUIREMENTS

SEC. 2605. (a)(1) Each State desiring to receive an allotment for 

any fiscal year under this title shall submit an application to the 

Secretary. Each such application shall be in such form as the Secretary shall require. Each such application shall contain assurances by the chief executive officer of the State that the State will 

meet the conditions enumerated in subsection (b). 

(2) After the expiration of the first fiscal year for which a State 

receives funds under this title, no funds shall be allotted to such 

State for any fiscal year under this title unless such State conduct 

public hearings with respect to the proposed use and distribution 

of funds to be provided under this title for such fiscal year. 

(b) As part of the annual application required by subsection (a), 

the chief executive officer of each State shall certify that the State 

agrees to— 

(1) use the funds available under this title to— 

(A) conduct outreach activities and provide assistance to 

low income households in meeting their home energy costs, 

particularly those with the lowest incomes that pay a high 

proportion of household income for home energy, consistent 

with paragraph (5); 

(B) intervene in energy crisis situations; 

(C) provide low-cost residential weatherization and other 

cost-effective energy-related home repair; and 

(D) plan, develop, and administer the State’s program 

under this title including leveraging programs, 

and the State agrees not to use such funds for any purposes 

other than those specified in this title; 

(2) make payments under this title only with respect to— 

(A) households in which 1 or more individuals are receiving— 

(i) assistance under the State program funded under 

part A of title IV of the Social Security Act; 

(ii) supplemental security income payments under 

title XVI of the Social Security Act; 

(iii) supplemental nutrition assistance program benefits under the Food and Nutrition Act of 2008; or 


emcdonald on DSK67QTVN1PROD with HEARING
237 

(iv) payments under section 415, 521, 541, or 542 of 

title 38, United States Code, or under section 306 of 

the Veterans’ and Survivors’ Pension Improvement Act 

of 1978; or 

(B) households with incomes which do not exceed the 

greater of— 

(i) an amount equal to 150 percent of the poverty 

level for such State; or 

(ii) an amount equal to 60 percent of the State median income; 

except that a State may not exclude a household from eligibility in a fiscal year solely on the basis of household income if such income is less than 110 percent of the poverty 

level for such State, but the State may give priority to 

those households with the highest home energy costs or 

needs in relation to household income; 

(3) conduct outreach activities designed to assure that eligible households, especially households with elderly individuals 

or disabled individuals, or both, and households with high 

home energy burdens, are made aware of the assistance available under this title, and any similar energy-related assistance 

available under subtitle B of title VI (relating to community 

services block grant program) or under any other provision of 

law which carries out programs which were administered 

under the Economic Opportunity Act of 1964 before the date of 

the enactment of this Act; 

(4) coordinate its activities under this title with similar and 

related programs administered by the Federal Government and 

such State, particularly low-income energy-related programs 

under subtitle B of title VI (relating to community services 

block grant program), under the supplemental security income 

program, under part A of title IV of the Social Security Act, 

under title XX of the Social Security Act, under the low-income 

weatherization assistance program under title IV of the Energy 

Conservation and Production Act, or under any other provision 

of law which carries out programs which were administered 

under the Economic Opportunity Act of 1964 before the date of 

the enactment of this Act; 

(5) provide, in a timely manner, that the highest level of assistance will be furnished to those households which have the 

lowest incomes and the highest energy costs or needs in relation to income, taking into account family size, except that the 

State may not differentiate in implementing this section between the households described in clauses (2)(A) and (2)(B) of 

this subsection; 

(6) to the extent it is necessary to designate local administrative agencies in order to carry out the purposes of this title, to 

give special consideration, in the designation of such agencies, 

to any local public or private nonprofit agency which was receiving Federal funds under any low-income energy assistance 

program or weatherization program under the Economic Opportunity Act of 1964 or any other provision of law on the day 

before the date of the enactment of this Act, except that— 


emcdonald on DSK67QTVN1PROD with HEARING
238 

(A) the State shall, before giving such special consideration, determine that the agency involved meets program 

and fiscal requirements established by the State; and 

(B) if there is no such agency because of any change in 

the assistance furnished to programs for economically disadvantaged persons, then the State shall give special consideration in the designation of local administrative agencies to any successor agency which is operated in substantially the same manner as the predecessor agency which 

did receive funds for the fiscal year preceding the fiscal 

year for which the determination is made; 

(7) if the State chooses to pay home energy suppliers directly, establish procedures to— 

(A) notify each participating household of the amount of 

assistance paid on its behalf; 

(B) assure that the home energy supplier will charge the 

eligible household, in the normal billing process, the difference between the actual cost of the home energy and 

the amount of the payment made by the State under this 

title; 

(C) assure that the home energy supplier will provide assurances that any agreement entered into with a home energy supplier under this paragraph will contain provisions 

to assure that no household receiving assistance under this 

title will be treated adversely because of such assistance 

under applicable provisions of State law or public regulatory requirements; and 

(D) ensure that the provision of vendored payments remains at the option of the State in consultation with local 

grantees and may be contingent on unregulated vendors 

taking appropriate measures to alleviate the energy burdens of eligible households, including providing for agreements between suppliers and individuals eligible for benefits under this Act that seek to reduce home energy costs, 

minimize the risks of home energy crisis, and encourage 

regular payments by individuals receiving financial assistance for home energy costs; 

(8) provide assurances that (A) the State will not exclude 

households described in clause (2)(B) of this subsection from 

receiving home energy assistance benefits under clause (2), and 

(B) the State will treat owners and renters equitably under the 

program assisted under this title; 

(9) provide that— 

(A) the State may use for planning and administering 

the use of funds under this title an amount not to exceed 

10 percent of the funds payable to such State under this 

title for a fiscal year; and 

(B) the State will pay from non-Federal sources the remaining costs of planning and administering the program 

assisted under this title and will not use Federal funds for 

such remaining costs (except for the costs of the activities 

described in paragraph (16)); 

(10) provide that such fiscal control and fund accounting procedures will be established as may be necessary to assure the 

proper disbursal of and accounting for Federal funds paid to 


emcdonald on DSK67QTVN1PROD with HEARING
239 

the State under this title, including procedures for monitoring 

the assistance provided under this title, and provide that the 

State will comply with the provisions of chapter 75 of title 31, 

United States Code (commonly known as the ‘‘Single Audit 

Act’’); 

(11) permit and cooperate with Federal investigations undertaken in accordance with section 2608; 

(12) provide for timely and meaningful public participation 

in the development of the plan described in subsection (c); 

(13) provide an opportunity for a fair administrative hearing 

to individuals whose claims for assistance under the plan described in subsection (c) are denied or are not acted upon with 

reasonable promptness; 

(14) cooperate with the Secretary with respect to data collecting and reporting under section 2610; 

(15) beginning in fiscal year 1992, provide, in addition to 

such services as may be offered by State Departments of Public 

Welfare at the local level, outreach and intake functions for crisis situations and heating and cooling assistance that is administered by additional State and local governmental entities 

or community-based organizations (such as community action 

agencies, area agencies on aging, and not-for-profit neighborhood-based organizations), and in States where such organizations do not administer intake functions as of September 30, 

1991, preference in awarding grants or contracts for intake 

services shall be provided to those agencies that administer the 

low-income weatherization or energy crisis intervention programs; and 

(16) use up to 5 percent of such funds, at its option, to provide services that encourage and enable households to reduce 

their home energy needs and thereby the need for energy assistance, including needs assessments, counseling, and assistance with energy vendors, and report to the Secretary concerning the impact of such activities on the number of households served, the level of direct benefits provided to those 

households, and the number of households that remain 

unserved. 

The Secretary may not prescribe the manner in which the States 

will comply with the provisions of this subsection. The Secretary 

shall issue regulations to prevent waste, fraud, and abuse in the 

programs assisted by this title. Not later than 18 months after the 

date of the enactment of the Low-Income Home Energy Assistance 

Amendments of 1994, the Secretary shall develop model performance goals and measurements in consultation with State, territorial, tribal, and local grantees, that the States may use to assess 

the success of the States in achieving the purposes of this title. The 

model performance goals and measurements shall be made available to States to be incorporated, at the option of the States, into 

the plans for fiscal year 1997. The Secretary may request data relevant to the development of model performance goals and measurements. 

(c)(1) As part of the annual application required in subsection (a), 

the chief executive officer of each State shall prepare and furnish 

to the Secretary, in such format as the Secretary may require, a 

plan which— 


emcdonald on DSK67QTVN1PROD with HEARING
240 

(A) describes the eligibility requirements to be used by the 

State for each type of assistance to be provided under this title, 

including criteria for designating an emergency under section 

2604(c); 

(B) describes the benefit levels to be used by the State for 

each type of assistance including assistance to be provided for 

emergency crisis intervention and for weatherization and other 

energy-related home repair; 

(C) contains estimates of the amount of funds the State will 

use for each of the programs under such plan and describes the 

alternative use of funds reserved under section 2604(c) in the 

event any portion of the amount so reserved is not expended 

for emergencies; 

(D) describes weatherization and other energy-related home 

repair the State will provide under subsection (k), including 

any steps the State will take to address the weatherization and 

energy-related home repair needs of households that have high 

home energy burdens, and describes any rules promulgated by 

the Department of Energy for administration of its Low Income 

Weatherization Assistance Program which the State, to the extent permitted by the Secretary to increase consistency between federally assisted programs, will follow regarding the 

use of funds provided under this title by the State for such 

weatherization and energy-related home repairs and improvements; 

(E) describes any steps that will be taken (in addition to 

those necessary to carry out the assurance contained in paragraph (5) of subsection (b)) to target assistance to households 

with high home energy burdens; 

(F) describes how the State will carry out assurances in 

clauses (3), (4), (5), (6), (7), (8), (10), (12), (13), and (15) of subsection (b); 

(G) states, with respect to the 12-month period specified by 

the Secretary, the number and income levels of households 

which apply and the number which are assisted with funds 

provided under this title, and the number of households so assisted with— 

(i) one or more members who had attained 60 years of 

age; 

(ii) one or more members who were disabled; and 

(iii) one or more young children; and 

(H) contains any other information determined by the Secretary to be appropriate for purposes of this title. 

The chief executive officer may revise any plan prepared under this 

paragraph and shall furnish the revised plan to the Secretary. 

(2) Each plan prepared under paragraph (1) and each substantial 

revision thereof shall be made available for public inspection within 

the State involved in such a manner as will facilitate timely and 

meaningful review of, and comment upon, such plan or substantial 

revision. 

(3) Not later than April 1 of each fiscal year the Secretary shall 

make available to the States a model State plan format that may 

be used, at the option of each State, to prepare the plan required 

under paragraph (1) for the next fiscal year. 


emcdonald on DSK67QTVN1PROD with HEARING
241 

(d) The State shall expend funds in accordance with the State 

plan under this title or in accordance with revisions applicable to 

such plan. 

(e) Each State shall, in carrying out the requirements of subsection (b)(10), obtain financial and compliance audits of any funds 

which the State receives under this title. Such audits shall be made 

public within the State on a timely basis. The audits shall be conducted in accordance with chapter 75 of title 31, United States 

Code. 

(f)(1) Notwithstanding any other provision of law unless enacted 

in express limitation of this paragraph, the amount of any home 

energy assistance payments or allowances provided directly to, or 

indirectly for the benefit of, an eligible household under this title 

shall not be considered income or resources of such household (or 

any member thereof) for any purpose under any Federal or State 

law, including any law relating to taxation, supplemental nutrition 

assistance program benefits, public assistance, or welfare programs. 

(2) For purposes of paragraph (1) of this subsection and for purposes of determining any excess shelter expense deduction under 

section 5(e) of the Food and Nutrition Act of 2008 (7 U.S.C. 

2014(e))— 

(A) the full amount of such payments or allowances shall be 

deemed to be expended by such household for heating or cooling expenses, without regard to whether such payments or allowances are provided directly to, or indirectly for the benefit 

of, such household, except that, for purposes of the supplemental nutrition assistance program established under the 

Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.), such 

payments or allowances were greater than $20 annually, consistent with section 5(e)(6)(C)(iv)(I) of that Act (7 U.S.C. 

2014(e)(6)(C)(iv)(I)), as determined by the Secretary of Agriculture; and 

(B) no distinction may be made among households on the 

basis of whether such payments or allowances are provided directly to, or indirectly for the benefit of, any of such households. 

(g) The State shall repay to the United States amounts found not 

to have been expended in accordance with this title or the Secretary may offset such amounts against any other amount to which 

the State is or may become entitled under this title. 

(h) The Comptroller General of the United States shall, from 

time to time evaluate the expenditures by States of grants under 

this title in order to assure that expenditures are consistent with 

the provisions of this title and to determine the effectiveness of the 

State in accomplishing the purposes of this title. 

(i) A household which is described in subsection (b)(2)(A) solely 

by reason of clause (ii) thereof shall not be treated as a household 

described in subsection (b)(2) if the eligibility of the household is 

dependent upon— 

(1) an individual whose annual supplemental security income 

benefit rate is reduced pursuant to section 1611(e)(1) of the Social Security Act by reason of being in an institution receiving 

payments under title XIX of the Social Security Act with respect to such individual; 


emcdonald on DSK67QTVN1PROD with HEARING
242 

(2) an individual to whom the reduction specified in section 

1612(a)(2)(A)(i) of the Social Security Act applies; or 

(3) a child described in section 1614(f)(2) of the Social Security Act who is living together with a parent, or the spouse of 

a parent, of the child. 

(j) In verifying income eligibility for purposes of subsection 

(b)(2)(B), the State may apply procedures and policies consistent 

with procedures and policies used by the State agency administering programs under part A of title IV of the Social Security 

Act, under title XX of the Social Security Act, under subtitle B of 

title VI of this Act (relating to community services block grant program), under any other provision of law which carries out programs 

which were administered under the Economic Opportunity Act of 

1964 before the date of the enactment of this Act, or under other 

income assistance or service programs (as determined by the 

State). 

(k)(1) Except as provided in paragraph (2), not more than 15 percent of the greater of— 

(A) the funds allotted to a State under this title for any fiscal 

year; or 

(B) the funds available to such State under this title for such 

fiscal year; 

may be used by the State for low-cost residential weatherization or 

other energy-related home repair for low-income households, particularly those low-income households with the lowest incomes that 

pay a high proportion of household income for home energy. 

(2)(A) If a State receives a waiver granted under subparagraph 

(B) for a fiscal year, the State may use not more than the greater 

of 25 percent of— 

(i) the funds allotted to a State under this title for such fiscal 

year; or 

(ii) the funds available to such State under this title for such 

fiscal year; 

for residential weatherization or other energy-related home repair 

for low-income households, particularly those low-income households with the lowest incomes that pay a high proportion of household income for home energy. 

(B) For purposes of subparagraph (A), the Secretary may grant 

a waiver to a State for a fiscal year if the State submits a written 

request to the Secretary after March 31 of such fiscal year and if 

the Secretary determines, after reviewing such request and any 

public comments, that— 

(i)(I) the number of households in the State that will receive 

benefits, other than weatherization and energy-related home 

repair, under this title in such fiscal year will not be fewer 

than the number of households in the State that received benefits, other than weatherization and energy-related home repair, 

under this title in the preceding fiscal year; 

(II) the aggregate amounts of benefits that will be received 

under this title by all households in the State in such fiscal 

year will not be less than the aggregate amount of such benefits that were received under this title by all households in the 

State in the preceding fiscal year; and 


emcdonald on DSK67QTVN1PROD with HEARING
243 

(III) such weatherization activities have been demonstrated 

to produce measurable savings in energy expenditures by lowincome households; or 

(ii) in accordance with rules issued by the Secretary, the 

State demonstrates good cause for failing to satisfy the requirements specified in clause (i). 

(l)(1) Any State may use amounts provided under this title for 

the purpose of providing credits against State tax to energy suppliers who supply home energy at reduced rates to low-income 

households. 

(2) Any such credit provided by a State shall not exceed the 

amount of the loss of revenue to such supplier on account of such 

reduced rate. 

(3) Any certification for such tax credits shall be made by the 

State, but such State may use Federal data available to such State 

with respect to recipients of supplemental security income benefits 

if timely delivery of benefits to households described in subsection 

(b) and suppliers will not be impeded by the use of such data. 

* * * * * * * 

CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP 

ASSISTANCE ACT OF 1985 

TITLE VI—CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP 

ASSISTANCE PROGRAM 

* * * * * * * 

SEC. 602. GRANTS AUTHORIZED. 

The Secretary is authorized to make a grant for any fiscal year 

to any State receiving a grant under title XX of the Social Security 

Act for such fiscal year to enable such State to award scholarships 

to eligible individuals within the State who are candidates for the 

Child Development Associate credential. 

* * * * * * * 

SECTION 3 OF THE ASSISTED SUICIDE FUNDING 

RESTRICTION ACT OF 1997 

SEC. 3. RESTRICTION ON USE OF FEDERAL FUNDS UNDER HEALTH 

CARE PROGRAMS. 

(a) RESTRICTION ON FEDERAL FUNDING OF HEALTH CARE SERVICES.—Subject to subsection (b), no funds appropriated by Congress 

for the purpose of paying (directly or indirectly) for the provision 

of health care services may be used— 

(1) to provide any health care item or service furnished for 

the purpose of causing, or for the purpose of assisting in causing, the death of any individual, such as by assisted suicide, 

euthanasia, or mercy killing; 

(2) to pay (directly, through payment of Federal financial 

participation or other matching payment, or otherwise) for 

such an item or service, including payment of expenses relating to such an item or service; or 


emcdonald on DSK67QTVN1PROD with HEARING
244 

(3) to pay (in whole or in part) for health benefit coverage 

that includes any coverage of such an item or service or of any 

expenses relating to such an item or service. 

(b) CONSTRUCTION AND TREATMENT OF CERTAIN SERVICES.— Nothing in subsection (a), or in any other provision of this Act (or 

in any amendment made by this Act), shall be construed to apply 

to or to affect any limitation relating to— 

(1) the withholding or withdrawing of medical treatment or 

medical care; 

(2) the withholding or withdrawing of nutrition or hydration; 

(3) abortion; or 

(4) the use of an item, good, benefit, or service furnished for 

the purpose of alleviating pain or discomfort, even if such use 

may increase the risk of death, so long as such item, good, benefit, or service is not also furnished for the purpose of causing, 

or the purpose of assisting in causing, death, for any reason. 

(c) LIMITATION ON FEDERAL FACILITIES AND EMPLOYEES.—Subject 

to subsection (b), with respect to health care items and services furnished— 

(1) by or in a health care facility owned or operated by the 

Federal government, or 

(2) by any physician or other individual employed by the 

Federal government to provide health care services within the 

scope of the physician’s or individual’s employment, no such 

item or service may be furnished for the purpose of causing, or 

for the purpose of assisting in causing, the death of any individual, such as by assisted suicide, euthanasia, or mercy killing. 

(d) LIST OF PROGRAMS TO WHICH RESTRICTIONS APPLY.— 

(1) FEDERAL HEALTH CARE FUNDING PROGRAMS.—Subsection 

(a) applies to funds appropriated under or to carry out the following: 

(A) MEDICARE PROGRAM.—Title XVIII of the Social Security Act. 

(B) MEDICAID PROGRAM.—Title XIX of the Social Security 

Act. 

(C) TITLE XX SOCIAL SERVICES BLOCK GRANT.—Title XX of 

the Social Security Act. 

(D) MATERNAL AND CHILD HEALTH BLOCK GRANT PRO- GRAM.—Title V of the Social Security Act. 

(E) PUBLIC HEALTH SERVICE ACT.—The Public Health 

Service Act. 

(F) INDIAN HEALTH CARE IMPROVEMENT ACT.—The Indian 

Health Care Improvement Act. 

(G) FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM.— 

Chapter 89 of title 5, United States Code. 

(H) MILITARY HEALTH CARE SYSTEM (INCLUDING TRICARE

AND CHAMPUS PROGRAMS).—Chapter 55 of title 10, United 

States Code. 

(I) VETERANS MEDICAL CARE.—Chapter 17 of title 38, 

United States Code. 

(J) HEALTH SERVICES FOR PEACE CORPS VOLUNTEERS.— Section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)). 

(K) MEDICAL SERVICES FOR FEDERAL PRISONERS Section 

4005(a) of title 18, United States Code. 


emcdonald on DSK67QTVN1PROD with HEARING
245 

(2) FEDERAL FACILITIES AND PERSONNEL.—The provisions of 

subsection (c) apply to facilities and personnel of the following: 

(A) MILITARY HEALTH CARE SYSTEM.—The Department of 

Defense operating under chapter 55 of title 10, United 

States Code. 

(B) VETERANS MEDICAL CARE.—The Veterans Health Administration of the Department of Veterans Affairs. 

(C) PUBLIC HEALTH SERVICE.—The Public Health Service. 

(3) NONEXCLUSIVE LIST.—Nothing in this subsection shall be 

construed as limiting the application of subsection (a) to the 

programs specified in paragraph (1) or the application of subsection (c) to the facilities and personnel specified in paragraph 

(2). 

B. CHANGES IN EXISTING LAW PROPOSED BY THE BILL, AS REPORTED

In compliance with clause 3(e)(1)(B) of rule XIII of the Rules of 

the House of Representatives, changes in existing law proposed by 

the bill, as reported, are shown as follows (existing law proposed 

to be omitted is enclosed in black brackets, new matter is printed 

in italic, existing law in which no change is proposed is shown in 

roman): 

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e)(1)(B) of rule XIII of the Rules of 

the House of Representatives, changes in existing law made by the 

bill, as reported, are shown as follows (existing law proposed to be 

omitted is enclosed in black brackets, new matter is printed in 

italics, and existing law in which no change is proposed is shown 

in roman): 

SOCIAL SECURITY ACT 

* * * * * * * 

TITLE IV—GRANTS TO STATES FOR AID AND SERVICES TO 

NEEDY FAMILIES WITH CHILDREN AND FOR CHILD-WELFARE SERVICES 

PART A—BLOCK GRANTS TO STATES FOR TEMPORARY ASSISTANCE FOR NEEDY FAMILIES 

* * * * * * * 

SEC. 404. USE OF GRANTS. 

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

grant is made under section 403 may use the grant— 

(1) in any manner that is reasonably calculated to accomplish the purpose of this part, including to provide low income 

households with assistance in meeting home heating and cooling costs; or 

(2) in any manner that the State was authorized to use 

amounts received under part A or F, as such parts were in effect on September 30, 1995, or (at the option of the State) August 21, 1996. 


emcdonald on DSK67QTVN1PROD with HEARING
246 

(b) LIMITATION ON USE OF GRANT FOR ADMINISTRATIVE PUR- POSES.— 

(1) LIMITATION.—A State to which a grant is made under 

section 403 shall not expend more than 15 percent of the grant 

for administrative purposes. 

(2) EXCEPTION.—Paragraph (1) shall not apply to the use of 

a grant for information technology and computerization needed 

for tracking or monitoring required by or under this part. 

(c) AUTHORITY TO TREAT INTERSTATE IMMIGRANTS UNDER RULES

OF FORMER STATE.—A State operating a program funded under 

this part may apply to a family the rules (including benefit 

amounts) of the program funded under this part of another State 

if the family has moved to the State from the other State and has 

resided in the State for less than 12 months. 

(d) AUTHORITY TO USE PORTION OF GRANT FOR OTHER PURPOSES.— 

(1) IN GENERAL.—Subject to paragraph (2), a State may use 

not more than 30 percent of the amount of any grant made to 

the State under section 403(a) for a fiscal year to carry out a 

State program pursuant to øany or all of the following provisions of law:¿ 

ø(A) Subtitle A of title XX of this Act.¿ 

ø(B) The¿ the Child Care and Development Block Grant 

Act of 1990. 

ø(2) LIMITATION ON AMOUNT TRANSFERABLE TO SUBTITLE 1 OF

TITLE XX PROGRAMS.— ø(A) IN GENERAL.—A State may use not more than the 

applicable percent of the amount of any grant made to the 

State under section 403(a) for a fiscal year to carry out 

State programs pursuant to subtitle 1 of title XX. 

ø(B) APPLICABLE PERCENT.—For purposes of subparagraph (A), the applicable percent is 4.25 percent in the 

case of fiscal year 2001 and each succeeding fiscal year.¿ 

ø(3)¿ (2) APPLICABLE RULES.— 

ø(A) IN GENERAL.—Except as provided in subparagraph 

(B) of this paragraph, any amount paid¿ Any amount paid 

to a State under this part that is used to carry out a State 

program pursuant to øa provision of law specified in paragraph (1)¿ the Child Care and Development Block Grant 

Act of 1990 shall not be subject to the requirements of this 

part, but shall be subject to the requirements that apply 

to Federal funds provided directly under the provision of 

law to carry out the program, and the expenditure of any 

amount so used shall not be considered to be an expenditure under this part. 

ø(B) EXCEPTION RELATING TO SUBTITLE 1 OF TITLE XX

PROGRAMS.—All amounts paid to a State under this part 

that are used to carry out State programs pursuant to subtitle 1 of title XX shall be used only for programs and services to children or their families whose income is less than 

200 percent of the income official poverty line (as defined 

by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus 

Budget Reconciliation Act of 1981) applicable to a family 

of the size involved.¿ 


emcdonald on DSK67QTVN1PROD with HEARING
247 

(e) AUTHORITY TO CARRY OVER CERTAIN AMOUNTS FOR BENEFITS

OR SERVICES OR FOR FUTURE CONTINGENCIES.—A State or tribe 

may use a grant made to the State or tribe under this part for any 

fiscal year to provide, without fiscal year limitation, any benefit or 

service that may be provided under the State or tribal program 

funded under this part. 

(f) AUTHORITY TO OPERATE EMPLOYMENT PLACEMENT PRO- GRAM.—A State to which a grant is made under section 403 may 

use the grant to make payments (or provide job placement vouchers) to State-approved public and private job placement agencies 

that provide employment placement services to individuals who receive assistance under the State program funded under this part. 

(g) IMPLEMENTATION OF ELECTRONIC BENEFIT TRANSFER SYSTEM.—A State to which a grant is made under section 403 is encouraged to implement an electronic benefit transfer system for 

providing assistance under the State program funded under this 

part, and may use the grant for such purpose. 

(h) USE OF FUNDS FOR INDIVIDUAL DEVELOPMENT ACCOUNTS.— (1) IN GENERAL.—A State to which a grant is made under 

section 403 may use the grant to carry out a program to fund 

individual development accounts (as defined in paragraph (2)) 

established by individuals eligible for assistance under the 

State program funded under this part. 

(2) INDIVIDUAL DEVELOPMENT ACCOUNTS.— (A) ESTABLISHMENT.—Under a State program carried out 

under paragraph (1), an individual development account 

may be established by or on behalf of an individual eligible 

for assistance under the State program operated under 

this part for the purpose of enabling the individual to accumulate funds for a qualified purpose described in subparagraph (B). 

(B) QUALIFIED PURPOSE.—A qualified purpose described 

in this subparagraph is 1 or more of the following, as provided by the qualified entity providing assistance to the individual under this subsection: 

(i) POSTSECONDARY EDUCATIONAL EXPENSES.—Postsecondary educational expenses paid from an individual development account directly to an eligible educational institution. 

(ii) FIRST HOME PURCHASE.—Qualified acquisition 

costs with respect to a qualified principal residence for 

a qualified first-time homebuyer, if paid from an individual development account directly to the persons to 

whom the amounts are due. 

(iii) BUSINESS CAPITALIZATION.—Amounts paid from 

an individual development account directly to a business capitalization account which is established in a 

federally insured financial institution and is restricted 

to use solely for qualified business capitalization expenses. 

(C) CONTRIBUTIONS TO BE FROM EARNED INCOME.—An individual may only contribute to an individual development 

account such amounts as are derived from earned income, 

as defined in section 911(d)(2) of the Internal Revenue 

Code of 1986. 


emcdonald on DSK67QTVN1PROD with HEARING
248 

(D) WITHDRAWAL OF FUNDS.—The Secretary shall establish such regulations as may be necessary to ensure that 

funds held in an individual development account are not 

withdrawn except for 1 or more of the qualified purposes 

described in subparagraph (B). 

(3) REQUIREMENTS.— (A) IN GENERAL.—An individual development account established under this subsection shall be a trust created or 

organized in the United States and funded through periodic contributions by the establishing individual and 

matched by or through a qualified entity for a qualified 

purpose (as described in paragraph (2)(B)). 

(B) QUALIFIED ENTITY.—As used in this subsection, the 

term ‘‘qualified entity’’ means— 

(i) a not-for-profit organization described in section 

501(c)(3) of the Internal Revenue Code of 1986 and exempt from taxation under section 501(a) of such Code; 

or 

(ii) a State or local government agency acting in cooperation with an organization described in clause (i). 

(4) NO REDUCTION IN BENEFITS.—Notwithstanding any other 

provision of Federal law (other than the Internal Revenue 

Code of 1986) that requires consideration of 1 or more financial 

circumstances of an individual, for the purpose of determining 

eligibility to receive, or the amount of, any assistance or benefit authorized by such law to be provided to or for the benefit 

of such individual, funds (including interest accruing) in an individual development account under this subsection shall be 

disregarded for such purpose with respect to any period during 

which such individual maintains or makes contributions into 

such an account. 

(5) DEFINITIONS.—As used in this subsection— 

(A) ELIGIBLE EDUCATIONAL INSTITUTION.—The term ‘‘eligible educational institution’’ means the following: 

(i) An institution described in section 481(a)(1) or 

1201(a) of the Higher Education Act of 1965 (20 U.S.C. 

1088(a)(1) or 1141(a)), as such sections are in effect on 

the date of the enactment of this subsection. 

(ii) An area vocational education school (as defined 

in subparagraph (C) or (D) of section 521(4) of the Carl 

D. Perkins Vocational and Applied Technology Education Act (20 U.S.C. 2471(4))) which is in any State 

(as defined in section 521(33) of such Act), as such sections are in effect on the date of the enactment of this 

subsection. 

(B) POST-SECONDARY EDUCATIONAL EXPENSES.—The term 

‘‘post-secondary educational expenses’’ means— 

(i) tuition and fees required for the enrollment or attendance of a student at an eligible educational institution, and 

(ii) fees, books, supplies, and equipment required for 

courses of instruction at an eligible educational institution. 

(C) QUALIFIED ACQUISITION COSTS.—The term ‘‘qualified 

acquisition costs’’ means the costs of acquiring, conVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00254 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
249 

structing, or reconstructing a residence. The term includes 

any usual or reasonable settlement, financing, or other 

closing costs. 

(D) QUALIFIED BUSINESS.—The term ‘‘qualified business’’ 

means any business that does not contravene any law or 

public policy (as determined by the Secretary). 

(E) QUALIFIED BUSINESS CAPITALIZATION EXPENSES.—The 

term ‘‘qualified business capitalization expenses’’ means 

qualified expenditures for the capitalization of a qualified 

business pursuant to a qualified plan. 

(F) QUALIFIED EXPENDITURES.—The term ‘‘qualified expenditures’’ means expenditures included in a qualified 

plan, including capital, plant, equipment, working capital, 

and inventory expenses. 

(G) QUALIFIED FIRST-TIME HOMEBUYER.— 

(i) IN GENERAL.—The term ‘‘qualified first-time 

homebuyer’’ means a taxpayer (and, if married, the 

taxpayer’s spouse) who has no present ownership interest in a principal residence during the 3-year period 

ending on the date of acquisition of the principal residence to which this subsection applies. 

(ii) DATE OF ACQUISITION.—The term ‘‘date of acquisition’’ means the date on which a binding contract to 

acquire, construct, or reconstruct the principal residence to which this subparagraph applies is entered 

into. 

(H) QUALIFIED PLAN.—The term ‘‘qualified plan’’ means 

a business plan which— 

(i) is approved by a financial institution, or by a 

nonprofit loan fund having demonstrated fiduciary integrity, 

(ii) includes a description of services or goods to be 

sold, a marketing plan, and projected financial statements, and 

(iii) may require the eligible individual to obtain the 

assistance of an experienced entrepreneurial advisor. 

(I) QUALIFIED PRINCIPAL RESIDENCE.—The term ‘‘qualified principal residence’’ means a principal residence (within the meaning of section 1034 of the Internal Revenue 

Code of 1986), the qualified acquisition costs of which do 

not exceed 100 percent of the average area purchase price 

applicable to such residence (determined in accordance 

with paragraphs (2) and (3) of section 143(e) of such Code). 

(i) SANCTION WELFARE RECIPIENTS FOR FAILING TO ENSURE THAT

MINOR DEPENDENT CHILDREN ATTEND SCHOOL.—A State to which 

a grant is made under section 403 shall not be prohibited from 

sanctioning a family that includes an adult who has received assistance under any State program funded under this part attributable to funds provided by the Federal Government or under the 

supplemental nutrition assistance program, as defined in section 

3(l) of the Food and Nutrition Act of 2008, if such adult fails to ensure that the minor dependent children of such adult attend school 

as required by the law of the State in which the minor children reside. 


emcdonald on DSK67QTVN1PROD with HEARING
250 

(j) REQUIREMENT FOR HIGH SCHOOL DIPLOMA OR EQUIVALENT.— 

A State to which a grant is made under section 403 shall not be 

prohibited from sanctioning a family that includes an adult who is 

older than age 20 and younger than age 51 and who has received 

assistance under any State program funded under this part attributable to funds provided by the Federal Government or under the 

supplemental nutrition assistance program, as defined in section 

3(l) of the Food and Nutrition Act of 2008, if such adult does not 

have, or is not working toward attaining, a secondary school diploma or its recognized equivalent unless such adult has been determined in the judgment of medical, psychiatric, or other appropriate professionals to lack the requisite capacity to complete successfully a course of study that would lead to a secondary school 

diploma or its recognized equivalent. 

(k) LIMITATIONS ON USE OF GRANT FOR MATCHING UNDER CER- TAIN FEDERAL TRANSPORTATION PROGRAM.— (1) USE LIMITATIONS.—A State to which a grant is made 

under section 403 may not use any part of the grant to match 

funds made available under section 3037 of the Transportation 

Equity Act for the 21st Century, unless— 

(A) the grant is used for new or expanded transportation 

services (and not for construction) that benefit individuals 

described in subparagraph (C), and not to subsidize current operating costs; 

(B) the grant is used to supplement and not supplant 

other State expenditures on transportation; 

(C) the preponderance of the benefits derived from such 

use of the grant accrues to individuals who are— 

(i) recipients of assistance under the State program 

funded under this part; 

(ii) former recipients of such assistance; 

(iii) noncustodial parents who are described in section 403(a)(5)(C)(iii); and 

(iv) low-income individuals who are at risk of qualifying for such assistance; and 

(D) the services provided through such use of the grant 

promote the ability of such recipients to engage in work activities (as defined in section 407(d)). 

(2) AMOUNT LIMITATION.—From a grant made to a State 

under section 403(a), the amount that a State uses to match 

funds described in paragraph (1) of this subsection shall not 

exceed the amount (if any) by which 30 percent of the total 

amount of the grant exceeds the amount (if any) of the grant 

that is used by the State to carry out any State program described in subsection (d)(1) of this section. 

(3) RULE OF INTERPRETATION.—The provision by a State of a 

transportation benefit under a program conducted under section 3037 of the Transportation Equity Act for the 21st Century, to an individual who is not otherwise a recipient of assistance under the State program funded under this part, using 

funds from a grant made under section 403(a) of this Act, shall 

not be considered to be the provision of assistance to the individual under the State program funded under this part. 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
251 

PART B—CHILD AND FAMILY SERVICES 

Subpart 1—Stephanie Tubbs Jones Child Welfare 

Services Program 

* * * * * * * 

STATE PLANS FOR CHILD WELFARE SERVICES

SEC. 422. (a) In order to be eligible for payment under this subpart, a State must have a plan for child welfare services which has 

been developed jointly by the Secretary and the State agency designated pursuant to subsection (b)(1), and which meets the requirements of subsection (b). 

(b) Each plan for child welfare services under this subpart 

shall— 

(1) provide that (A) the individual or agency that øadministers or supervises¿ administered or supervised the administration of the State’s services program under øsubtitle 1 of title 

XX¿ subtitle A of title XX (as in effect before the repeal of such 

subtitle) will administer or supervise the administration of the 

plan (except as otherwise provided in section 103(d) of the 

Adoption Assistance and Child Welfare Act of 1980), and (B) 

to the extent that child welfare services are furnished by the 

staff of the State agency or local agency administering the 

plan, a single organizational unit in such State or local agency, 

as the case may be, will be responsible for furnishing such 

child welfare services; 

(2) provide for coordination between the services provided for 

children under the plan and the services and assistance provided øunder subtitle 1 of title XX,¿ under the State program 

funded under part A, under the State plan approved under 

subpart 2 of this part, under the State plan approved under 

the State plan approved under part E, and under other State 

programs having a relationship to the program under this subpart, with a view to provision of welfare and related services 

which will best promote the welfare of such children and their 

families; 

(3) include a description of the services and activities which 

the State will fund under the State program carried out pursuant to this subpart, and how the services and activities will 

achieve the purpose of this subpart; 

(4) contain a description of— 

(A) the steps the State will take to provide child welfare 

services statewide and to expand and strengthen the range 

of existing services and develop and implement services to 

improve child outcomes; and 

(B) the child welfare services staff development and 

training plans of the State; 

(5) provide, in the development of services for children, for 

utilization of the facilities and experience of voluntary agencies 

in accordance with State and local programs and arrangements, as authorized by the State; 

(6) provide that the agency administering or supervising the 

administration of the plan will furnish such reports, containing 


emcdonald on DSK67QTVN1PROD with HEARING
252 

such information, and participate in such evaluations, as the 

Secretary may require; 

(7) provide for the diligent recruitment of potential foster 

and adoptive families that reflect the ethnic and racial diversity of children in the State for whom foster and adoptive 

homes are needed; 

(8) provide assurances that the State— 

(A) is operating, to the satisfaction of the Secretary— 

(i) a statewide information system from which can 

be readily determined the status, demographic characteristics, location, and goals for the placement of every 

child who is (or, within the immediately preceding 12 

months, has been) in foster care; 

(ii) a case review system (as defined in section 

475(5) and in accordance with the requirements of section 475A) for each child receiving foster care under 

the supervision of the State; 

(iii) a service program designed to help children— 

(I) where safe and appropriate, return to families from which they have been removed; or 

(II) be placed for adoption, with a legal guardian, or if adoption or legal guardianship is determined not to be appropriate for a child, in some 

other planned, permanent living arrangement, 

subject to the requirements of sections 475(5)(C) 

and 475A(a), which may include a residential educational program; and 

(iv) a preplacement preventive services program designed to help children at risk of foster care placement 

remain safely with their families; and 

(B) has in effect policies and administrative and judicial 

procedures for children abandoned at or shortly after birth 

(including policies and procedures providing for legal representation of the children) which enable permanent decisions to be made expeditiously with respect to the placement of the children; 

(9) contain a description, developed after consultation with 

tribal organizations (as defined in section 4 of the Indian SelfDetermination and Education Assistance Act) in the State, of 

the specific measures taken by the State to comply with the Indian Child Welfare Act; 

(10) contain assurances that the State shall make effective 

use of cross-jurisdictional resources (including through contracts for the purchase of services), and shall eliminate legal 

barriers, to facilitate timely adoptive or permanent placements 

for waiting children; 

(11) contain a description of the activities that the State has 

undertaken for children adopted from other countries, including the provision of adoption and post-adoption services; 

(12) provide that the State shall collect and report information on children who are adopted from other countries and who 

enter into State custody as a result of the disruption of a placement for adoption or the dissolution of an adoption, including 

the number of children, the agencies who handled the placeVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00258 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
253 

ment or adoption, the plans for the child, and the reasons for 

the disruption or dissolution; 

(13) demonstrate substantial, ongoing, and meaningful collaboration with State courts in the development and implementation of the State plan under subpart 1, the State plan approved under subpart 2, and the State plan approved under 

part E, and in the development and implementation of any program improvement plan required under section 1123A; 

(14) not later than October 1, 2007, include assurances that 

not more than 10 percent of the expenditures of the State with 

respect to activities funded from amounts provided under this 

subpart will be for administrative costs; 

(15)(A) provides that the State will develop, in coordination 

and collaboration with the State agency referred to in paragraph (1) and the State agency responsible for administering 

the State plan approved under title XIX, and in consultation 

with pediatricians, other experts in health care, and experts in 

and recipients of child welfare services, a plan for the ongoing 

oversight and coordination of health care services for any child 

in a foster care placement, which shall ensure a coordinated 

strategy to identify and respond to the health care needs of 

children in foster care placements, including mental health and 

dental health needs, and shall include an outline of— 

(i) a schedule for initial and follow-up health 

screenings that meet reasonable standards of medical 

practice; 

(ii) how health needs identified through screenings 

will be monitored and treated, including emotional 

trauma associated with a child’s maltreatment and removal from home; 

(iii) how medical information for children in care 

will be updated and appropriately shared, which may 

include the development and implementation of an 

electronic health record; 

(iv) steps to ensure continuity of health care services, which may include the establishment of a medical 

home for every child in care; 

(v) the oversight of prescription medicines, including 

protocols for the appropriate use and monitoring of 

psychotropic medications; 

(vi) how the State actively consults with and involves physicians or other appropriate medical or nonmedical professionals in assessing the health and wellbeing of children in foster care and in determining appropriate medical treatment for the children; and 

(vii) steps to ensure that the components of the transition plan development process required under section 475(5)(H) that relate to the health care needs of 

children aging out of foster care, including the requirements to include options for health insurance, information about a health care power of attorney, health 

care proxy, or other similar document recognized 

under State law, and to provide the child with the option to execute such a document, are met; and 


emcdonald on DSK67QTVN1PROD with HEARING
254 

(B) subparagraph (A) shall not be construed to reduce or 

limit the responsibility of the State agency responsible for administering the State plan approved under title XIX to administer and provide care and services for children with respect to 

whom services are provided under the State plan developed 

pursuant to this subpart; 

(16) provide that, not later than 1 year after the date of the 

enactment of this paragraph, the State shall have in place procedures providing for how the State programs assisted under 

this subpart, subpart 2 of this part, or part E would respond 

to a disaster, in accordance with criteria established by the 

Secretary which should include how a State would— 

(A) identify, locate, and continue availability of services 

for children under State care or supervision who are displaced or adversely affected by a disaster; 

(B) respond, as appropriate, to new child welfare cases 

in areas adversely affected by a disaster, and provide services in those cases; 

(C) remain in communication with caseworkers and 

other essential child welfare personnel who are displaced 

because of a disaster; 

(D) preserve essential program records; and 

(E) coordinate services and share information with other 

States; 

(17) not later than October 1, 2007, describe the State standards for the content and frequency of caseworker visits for children who are in foster care under the responsibility of the 

State, which, at a minimum, ensure that the children are visited on a monthly basis and that the caseworker visits are 

well-planned and focused on issues pertinent to case planning 

and service delivery to ensure the safety, permanency, and 

well-being of the children; 

(18) include a description of the activities that the State has 

undertaken to reduce the length of time children who have not 

attained 5 years of age are without a permanent family, and 

the activities the State undertakes to address the developmental needs of such children who receive benefits or services 

under this part or part E; and 

(19) contain a description of the sources used to compile information on child maltreatment deaths required by Federal 

law to be reported by the State agency referred to in paragraph 

(1), and to the extent that the compilation does not include information on such deaths from the State vital statistics department, child death review teams, law enforcement agencies, or 

offices of medical examiners or coroners, the State shall describe why the information is not so included and how the 

State will include the information. 

(c) DEFINITIONS.—In this subpart: 

(1) ADMINISTRATIVE COSTS.—The term ‘‘administrative costs’’ 

means costs for the following, but only to the extent incurred 

in administering the State plan developed pursuant to this 

subpart: procurement, payroll management, personnel functions (other than the portion of the salaries of supervisors attributable to time spent directly supervising the provision of 

services by caseworkers), management, maintenance and operVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00260 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
255 

ation of space and property, data processing and computer 

services, accounting, budgeting, auditing, and travel expenses 

(except those related to the provision of services by caseworkers or the oversight of programs funded under this subpart). 

(2) OTHER TERMS.—For definitions of other terms used in 

this part, see section 475. 

* * * * * * * 

PART E—FEDERAL PAYMENTS FOR FOSTER CARE AND ADOPTION

ASSISTANCE

* * * * * * * 

STATE PLAN FOR FOSTER CARE AND ADOPTION ASSISTANCE

SEC. 471. (a) In order for a State to be eligible for payments 

under this part, it shall have a plan approved by the Secretary 

which— 

(1) provides for foster care maintenance payments in accordance with section 472 and for adoption assistance in accordance with section 473; 

(2) provides that the State agency responsible for administering the program authorized by subpart 1 of part B of this 

title shall administer, or supervise the administration of, the 

program authorized by this part; 

(3) provides that the plan shall be in effect in all political 

subdivisions of the State, and, if administered by them, be 

mandatory upon them; 

(4) provides that the State shall assure that the programs at 

the local level assisted under this part will be coordinated with 

the programs at the State or local level assisted under parts 

A and B of this titleø, under subtitle 1 of title XX of this Act,¿ 

and under any other appropriate provision of Federal law; 

(5) provides that the State will, in the administration of its 

programs under this part, use such methods relating to the establishment and maintenance of personnel standards on a 

merit basis as are found by the Secretary to be necessary for 

the proper and efficient operation of the programs, except that 

the Secretary shall exercise no authority with respect to the selection, tenure of office, or compensation of any individual employed in accordance with such methods; 

(6) provides that the State agency referred to in paragraph 

(2) (hereinafter in this part referred to as the ‘‘State agency’’) 

will make such reports, in such form and containing such information as the Secretary may from time to time require, and 

comply with such provisions as the Secretary may from time 

to time find necessary to assure the correctness and 

verification of such reports; 

(7) provides that the State agency will monitor and conduct 

periodic evaluations of activities carried out under this part; 

(8) subject to subsection (c), provides safeguards which restrict the use of or disclosure of information concerning individuals assisted under the State plan to purposes directly connected with (A) the administration of the plan of the State approved under this part, the plan or program of the State under 


emcdonald on DSK67QTVN1PROD with HEARING
256 

part A, B, or D of this title or under title I, V, X, XIV, XVI 

(as in effect in Puerto Rico, Guam, and the Virgin Islands), 

øXIX, or XX¿ or XIX, or the supplemental security income program established by title XVI, (B) any investigation, prosecution, or criminal or civil proceeding, conducted in connection 

with the administration of any such plan or program, (C) the 

administration of any other Federal or federally assisted program which provides assistance, in cash or in kind, or services, 

directly to individuals on the basis of need, (D) any audit or 

similar activity conducted in connection with the administration of any such plan or program by any governmental agency 

which is authorized by law to conduct such audit or activity, 

and (E) reporting and providing information pursuant to paragraph (9) to appropriate authorities with respect to known or 

suspected child abuse or neglect; and the safeguards so provided shall prohibit disclosure, to any committee or legislative 

body (other than an agency referred to in clause (D) with respect to an activity referred to in such clause), of any information which identifies by name or address any such applicant or 

recipient; except that nothing contained herein shall preclude 

a State from providing standards which restrict disclosures to 

purposes more limited than those specified herein, or which, in 

the case of adoptions, prevent disclosure entirely; 

(9) provides that the State agency will— 

(A) report to an appropriate agency or official, known or 

suspected instances of physical or mental injury, sexual 

abuse or exploitation, or negligent treatment or maltreatment of a child receiving aid under part B or this part 

under circumstances which indicate that the child’s health 

or welfare is threatened thereby; 

(B) provide such information with respect to a situation 

described in subparagraph (A) as the State agency may 

have; and 

(C) not later than— 

(i) 1 year after the date of enactment of this subparagraph, demonstrate to the Secretary that the 

State agency has developed, in consultation with State 

and local law enforcement, juvenile justice systems, 

health care providers, education agencies, and organizations with experience in dealing with at-risk children and youth, policies and procedures (including relevant training for caseworkers) for identifying, documenting in agency records, and determining appropriate services with respect to— 

(I) any child or youth over whom the State 

agency has responsibility for placement, care, or 

supervision and who the State has reasonable 

cause to believe is, or is at risk of being, a sex 

trafficking victim (including children for whom a 

State child welfare agency has an open case file 

but who have not been removed from the home, 

children who have run away from foster care and 

who have not attained 18 years of age or such 

older age as the State has elected under section 

475(8) of this Act, and youth who are not in foster 


emcdonald on DSK67QTVN1PROD with HEARING
257 

care but are receiving services under section 477 

of this Act); and 

(II) at the option of the State, any individual 

who has not attained 26 years of age, without regard to whether the individual is or was in foster 

care under the responsibility of the State; and 

(ii) 2 years after such date of enactment, demonstrate to the Secretary that the State agency is implementing the policies and procedures referred to in 

clause (i). 

(10) provides— 

(A) for the establishment or designation of a State authority or authorities that shall be responsible for establishing and maintaining standards for foster family homes 

and child care institutions which are reasonably in accord 

with recommended standards of national organizations 

concerned with standards for the institutions or homes, including standards related to admission policies, safety, 

sanitation, and protection of civil rights, and which shall 

permit use of the reasonable and prudent parenting standard; 

(B) that the standards established pursuant to subparagraph (A) shall be applied by the State to any foster family 

home or child care institution receiving funds under this 

part or part B and shall require, as a condition of each 

contract entered into by a child care institution to provide 

foster care, the presence on-site of at least 1 official who, 

with respect to any child placed at the child care institution, is designated to be the caregiver who is authorized to 

apply the reasonable and prudent parent standard to decisions involving the participation of the child in age or developmentally-appropriate activities, and who is provided 

with training in how to use and apply the reasonable and 

prudent parent standard in the same manner as prospective foster parents are provided the training pursuant to 

paragraph (24); 

(C) that the standards established pursuant to subparagraph (A) shall include policies related to the liability of 

foster parents and private entities under contract by the 

State involving the application of the reasonable and prudent parent standard, to ensure appropriate liability for 

caregivers when a child participates in an approved activity and the caregiver approving the activity acts in accordance with the reasonable and prudent parent standard; 

and 

(D) that a waiver of any standards established pursuant 

to subparagraph (A) may be made only on a case-by-case 

basis for nonsafety standards (as determined by the State) 

in relative foster family homes for specific children in care; 

(11) provides for periodic review of the standards referred to 

in the preceding paragraph and amounts paid as foster care 

maintenance payments and adoption assistance to assure their 

continuing appropriateness; 

(12) provides for granting an opportunity for a fair hearing 

before the State agency to any individual whose claim for beneVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00263 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
258 

fits available pursuant to this part is denied or is not acted 

upon with reasonable promptness; 

(13) provides that the State shall arrange for a periodic and 

independently conducted audit of the programs assisted under 

this part and part B of this title, which shall be conducted no 

less frequently than once every three years; 

(14) provides (A) specific goals (which shall be established by 

State law on or before October 1, 1982) for each fiscal year 

(commencing with the fiscal year which begins on October 1, 

1983) as to the maximum number of children (in absolute numbers or as a percentage of all children in foster care with respect to whom assistance under the plan is provided during 

such year) who, at any time during such year, will remain in 

foster care after having been in such care for a period in excess 

of twenty-four months, and (B) a description of the steps which 

will be taken by the State to achieve such goals; 

(15) provides that— 

(A) in determining reasonable efforts to be made with respect to a child, as described in this paragraph, and in 

making such reasonable efforts, the child’s health and 

safety shall be the paramount concern; 

(B) except as provided in subparagraph (D), reasonable 

efforts shall be made to preserve and reunify families— 

(i) prior to the placement of a child in foster care, to 

prevent or eliminate the need for removing the child 

from the child’s home; and 

(ii) to make it possible for a child to safely return to 

the child’s home; 

(C) if continuation of reasonable efforts of the type described in subparagraph (B) is determined to be inconsistent with the permanency plan for the child, reasonable 

efforts shall be made to place the child in a timely manner 

in accordance with the permanency plan (including, if appropriate, through an interstate placement), and to complete whatever steps are necessary to finalize the permanent placement of the child; 

(D) reasonable efforts of the type described in subparagraph (B) shall not be required to be made with respect to 

a parent of a child if a court of competent jurisdiction has 

determined that— 

(i) the parent has subjected the child to aggravated 

circumstances (as defined in State law, which definition may include but need not be limited to abandonment, torture, chronic abuse, and sexual abuse); 

(ii) the parent has— 

(I) committed murder (which would have been 

an offense under section 1111(a) of title 18, United 

States Code, if the offense had occurred in the 

special maritime or territorial jurisdiction of the 

United States) of another child of the parent; 

(II) committed voluntary manslaughter (which 

would have been an offense under section 1112(a) 

of title 18, United States Code, if the offense had 

occurred in the special maritime or territorial juVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00264 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
259 

risdiction of the United States) of another child of 

the parent; 

(III) aided or abetted, attempted, conspired, or 

solicited to commit such a murder or such a voluntary manslaughter; or 

(IV) committed a felony assault that results in 

serious bodily injury to the child or another child 

of the parent; or 

(iii) the parental rights of the parent to a sibling 

have been terminated involuntarily; 

(E) if reasonable efforts of the type described in subparagraph (B) are not made with respect to a child as a result 

of a determination made by a court of competent jurisdiction in accordance with subparagraph (D)— 

(i) a permanency hearing (as described in section 

475(5)(C)), which considers in-State and out-of-State 

permanent placement options for the child, shall be 

held for the child within 30 days after the determination; and 

(ii) reasonable efforts shall be made to place the 

child in a timely manner in accordance with the permanency plan, and to complete whatever steps are 

necessary to finalize the permanent placement of the 

child; and 

(F) reasonable efforts to place a child for adoption or 

with a legal guardian, including identifying appropriate inState and out-of-State placements may be made concurrently with reasonable efforts of the type described in subparagraph (B); 

(16) provides for the development of a case plan (as defined 

in section 475(1) and in accordance with the requirements of 

section 475A) for each child receiving foster care maintenance 

payments under the State plan and provides for a case review 

system which meets the requirements described in sections 

475(5) and 475A with respect to each such child; 

(17) provides that, where appropriate, all steps will be taken, 

including cooperative efforts with the State agencies administering the program funded under part A and plan approved 

under part D, to secure an assignment to the State of any 

rights to support on behalf of each child receiving foster care 

maintenance payments under this part; 

(18) not later than January 1, 1997, provides that neither 

the State nor any other entity in the State that receives funds 

from the Federal Government and is involved in adoption or 

foster care placements may— 

(A) deny to any person the opportunity to become an 

adoptive or a foster parent, on the basis of the race, color, 

or national origin of the person, or of the child, involved; 

or 

(B) delay or deny the placement of a child for adoption 

or into foster care, on the basis of the race, color, or national origin of the adoptive or foster parent, or the child, 

involved; 

(19) provides that the State shall consider giving preference 

to an adult relative over a non-related caregiver when deterVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00265 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
260 

mining a placement for a child, provided that the relative caregiver meets all relevant State child protection standards; 

(20)(A) provides procedures for criminal records checks, including fingerprint-based checks of national crime information 

databases (as defined in section 534(e)(3)(A) of title 28, United 

States Code), for any prospective foster or adoptive parent before the foster or adoptive parent may be finally approved for 

placement of a child regardless of whether foster care maintenance payments or adoption assistance payments are to be 

made on behalf of the child under the State plan under this 

part, including procedures requiring that— 

(i) in any case involving a child on whose behalf such 

payments are to be so made in which a record check reveals a felony conviction for child abuse or neglect, for 

spousal abuse, for a crime against children (including child 

pornography), or for a crime involving violence, including 

rape, sexual assault, or homicide, but not including other 

physical assault or battery, if a State finds that a court of 

competent jurisdiction has determined that the felony was 

committed at any time, such final approval shall not be 

granted; and 

(ii) in any case involving a child on whose behalf such 

payments are to be so made in which a record check reveals a felony conviction for physical assault, battery, or a 

drug-related offense, if a State finds that a court of competent jurisdiction has determined that the felony was 

committed within the past 5 years, such final approval 

shall not be granted; and 

(B) provides that the State shall— 

(i) check any child abuse and neglect registry maintained by the State for information on any prospective foster or adoptive parent and on any other adult living in the 

home of such a prospective parent, and request any other 

State in which any such prospective parent or other adult 

has resided in the preceding 5 years, to enable the State 

to check any child abuse and neglect registry maintained 

by such other State for such information, before the prospective foster or adoptive parent may be finally approved 

for placement of a child, regardless of whether foster care 

maintenance payments or adoption assistance payments 

are to be made on behalf of the child under the State plan 

under this part; 

(ii) comply with any request described in clause (i) that 

is received from another State; and 

(iii) have in place safeguards to prevent the unauthorized disclosure of information in any child abuse and neglect registry maintained by the State, and to prevent any 

such information obtained pursuant to this subparagraph 

from being used for a purpose other than the conducting 

of background checks in foster or adoptive placement 

cases; and 

(C) provides procedures for criminal records checks, including fingerprint-based checks of national crime information 

databases (as defined in section 534(e)(3)(A) of title 28, United 

States Code), on any relative guardian, and for checks deVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00266 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
261 

scribed in subparagraph (B) of this paragraph on any relative 

guardian and any other adult living in the home of any relative guardian, before the relative guardian may receive kinship guardianship assistance payments on behalf of the child 

under the State plan under this part; 

(21) provides for health insurance coverage (including, at 

State option, through the program under the State plan approved under title XIX) for any child who has been determined 

to be a child with special needs, for whom there is in effect an 

adoption assistance agreement (other than an agreement under 

this part) between the State and an adoptive parent or parents, and who the State has determined cannot be placed with 

an adoptive parent or parents without medical assistance because such child has special needs for medical, mental health, 

or rehabilitative care, and that with respect to the provision of 

such health insurance coverage— 

(A) such coverage may be provided through 1 or more 

State medical assistance programs; 

(B) the State, in providing such coverage, shall ensure 

that the medical benefits, including mental health benefits, provided are of the same type and kind as those that 

would be provided for children by the State under title 

XIX; 

(C) in the event that the State provides such coverage 

through a State medical assistance program other than the 

program under title XIX, and the State exceeds its funding 

for services under such other program, any such child shall 

be deemed to be receiving aid or assistance under the 

State plan under this part for purposes of section 

1902(a)(10)(A)(i)(I); and 

(D) in determining cost-sharing requirements, the State 

shall take into consideration the circumstances of the 

adopting parent or parents and the needs of the child 

being adopted consistent, to the extent coverage is provided through a State medical assistance program, with 

the rules under such program; 

(22) provides that, not later than January 1, 1999, the State 

shall develop and implement standards to ensure that children 

in foster care placements in public or private agencies are provided quality services that protect the safety and health of the 

children; 

(23) provides that the State shall not— 

(A) deny or delay the placement of a child for adoption 

when an approved family is available outside of the jurisdiction with responsibility for handling the case of the 

child; or 

(B) fail to grant an opportunity for a fair hearing, as described in paragraph (12), to an individual whose allegation of a violation of subparagraph (A) of this paragraph 

is denied by the State or not acted upon by the State with 

reasonable promptness; 

(24) includes a certification that, before a child in foster care 

under the responsibility of the State is placed with prospective 

foster parents, the prospective foster parents will be prepared 

adequately with the appropriate knowledge and skills to proVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00267 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
262 

vide for the needs of the child, that the preparation will be continued, as necessary, after the placement of the child, and that 

the preparation shall include knowledge and skills relating to 

the reasonable and prudent parent standard for the participation of the child in age or developmentally-appropriate activities, including knowledge and skills relating to the developmental stages of the cognitive, emotional, physical, and behavioral capacities of a child, and knowledge and skills relating to 

applying the standard to decisions such as whether to allow 

the child to engage in social, extracurricular, enrichment, cultural, and social activities, including sports, field trips, and 

overnight activities lasting 1 or more days, and to decisions involving the signing of permission slips and arranging of transportation for the child to and from extracurricular, enrichment, 

and social activities; 

(25) provide that the State shall have in effect procedures for 

the orderly and timely interstate placement of children; and 

procedures implemented in accordance with an interstate compact, if incorporating with the procedures prescribed by paragraph (26), shall be considered to satisfy the requirement of 

this paragraph; 

(26) provides that— 

(A)(i) within 60 days after the State receives from another State a request to conduct a study of a home environment for purposes of assessing the safety and suitability of placing a child in the home, the State shall, directly or by contract— 

(I) conduct and complete the study; and 

(II) return to the other State a report on the results 

of the study, which shall address the extent to which 

placement in the home would meet the needs of the 

child; and 

(ii) in the case of a home study begun on or before September 30, 2008, if the State fails to comply with clause 

(i) within the 60-day period as a result of circumstances 

beyond the control of the State (such as a failure by a Federal agency to provide the results of a background check, 

or the failure by any entity to provide completed medical 

forms, requested by the State at least 45 days before the 

end of the 60-day period), the State shall have 75 days to 

comply with clause (i) if the State documents the circumstances involved and certifies that completing the 

home study is in the best interests of the child; except that 

(iii) this subparagraph shall not be construed to require 

the State to have completed, within the applicable period, 

the parts of the home study involving the education and 

training of the prospective foster or adoptive parents; 

(B) the State shall treat any report described in subparagraph (A) that is received from another State or an Indian tribe (or from a private agency under contract with 

another State) as meeting any requirements imposed by 

the State for the completion of a home study before placing 

a child in the home, unless, within 14 days after receipt 

of the report, the State determines, based on grounds that 

are specific to the content of the report, that making a deVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00268 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
263 

cision in reliance on the report would be contrary to the 

welfare of the child; and 

(C) the State shall not impose any restriction on the 

ability of a State agency administering, or supervising the 

administration of, a State program operated under a State 

plan approved under this part to contract with a private 

agency for the conduct of a home study described in subparagraph (A); 

(27) provides that, with respect to any child in foster care 

under the responsibility of the State under this part or part B 

and without regard to whether foster care maintenance payments are made under section 472 on behalf of the child, the 

State has in effect procedures for verifying the citizenship or 

immigration status of the child; 

(28) at the option of the State, provides for the State to enter 

into kinship guardianship assistance agreements to provide 

kinship guardianship assistance payments on behalf of children to grandparents and other relatives who have assumed 

legal guardianship of the children for whom they have cared as 

foster parents and for whom they have committed to care on 

a permanent basis, as provided in section 473(d); 

(29) provides that, within 30 days after the removal of a 

child from the custody of the parent or parents of the child, the 

State shall exercise due diligence to identify and provide notice 

to the following relatives: all adult grandparents, all parents of 

a sibling of the child, where such parent has legal custody of 

such sibling, and other adult relatives of the child (including 

any other adult relatives suggested by the parents), subject to 

exceptions due to family or domestic violence, that— 

(A) specifies that the child has been or is being removed 

from the custody of the parent or parents of the child; 

(B) explains the options the relative has under Federal, 

State, and local law to participate in the care and placement of the child, including any options that may be lost 

by failing to respond to the notice; 

(C) describes the requirements under paragraph (10) of 

this subsection to become a foster family home and the additional services and supports that are available for children placed in such a home; and 

(D) if the State has elected the option to make kinship 

guardianship assistance payments under paragraph (28) of 

this subsection, describes how the relative guardian of the 

child may subsequently enter into an agreement with the 

State under section 473(d) to receive the payments; 

(30) provides assurances that each child who has attained 

the minimum age for compulsory school attendance under 

State law and with respect to whom there is eligibility for a 

payment under the State plan is a full-time elementary or secondary school student or has completed secondary school, and 

for purposes of this paragraph, the term ‘‘elementary or secondary school student’’ means, with respect to a child, that the 

child is— 

(A) enrolled (or in the process of enrolling) in an institution which provides elementary or secondary education, as 


emcdonald on DSK67QTVN1PROD with HEARING
264 

determined under the law of the State or other jurisdiction 

in which the institution is located; 

(B) instructed in elementary or secondary education at 

home in accordance with a home school law of the State 

or other jurisdiction in which the home is located; 

(C) in an independent study elementary or secondary 

education program in accordance with the law of the State 

or other jurisdiction in which the program is located, 

which is administered by the local school or school district; 

or 

(D) incapable of attending school on a full-time basis due 

to the medical condition of the child, which incapability is 

supported by regularly updated information in the case 

plan of the child; 

(31) provides that reasonable efforts shall be made— 

(A) to place siblings removed from their home in the 

same foster care, kinship guardianship, or adoptive placement, unless the State documents that such a joint placement would be contrary to the safety or well-being of any 

of the siblings; and 

(B) in the case of siblings removed from their home who 

are not so jointly placed, to provide for frequent visitation 

or other ongoing interaction between the siblings, unless 

that State documents that frequent visitation or other ongoing interaction would be contrary to the safety or wellbeing of any of the siblings; 

(32) provides that the State will negotiate in good faith with 

any Indian tribe, tribal organization or tribal consortium in the 

State that requests to develop an agreement with the State to 

administer all or part of the program under this part on behalf 

of Indian children who are under the authority of the tribe, organization, or consortium, including foster care maintenance 

payments on behalf of children who are placed in State or tribally licensed foster family homes, adoption assistance payments, and, if the State has elected to provide such payments, 

kinship guardianship assistance payments under section 

473(d), and tribal access to resources for administration, training, and data collection under this part; 

(33) provides that the State will inform any individual who 

is adopting, or whom the State is made aware is considering 

adopting, a child who is in foster care under the responsibility 

of the State of the potential eligibility of the individual for a 

Federal tax credit under section 23 of the Internal Revenue 

Code of 1986; 

(34) provides that, for each child or youth described in paragraph (9)(C)(i)(I), the State agency shall— 

(A) not later than 2 years after the date of the enactment of this paragraph, report immediately, and in no case 

later than 24 hours after receiving information on children 

or youth who have been identified as being a sex trafficking victim, to the law enforcement authorities; and 

(B) not later than 3 years after such date of enactment 

and annually thereafter, report to the Secretary the total 

number of children and youth who are sex trafficking victims; and 


emcdonald on DSK67QTVN1PROD with HEARING
265 

(35) provides that— 

(A) not later than 1 year after the date of the enactment 

of this paragraph, the State shall develop and implement 

specific protocols for— 

(i) expeditiously locating any child missing from foster care; 

(ii) determining the primary factors that contributed 

to the child’s running away or otherwise being absent 

from care, and to the extent possible and appropriate, 

responding to those factors in current and subsequent 

placements; 

(iii) determining the child’s experiences while absent 

from care, including screening the child to determine 

if the child is a possible sex trafficking victim (as defined in section 475(9)(A)); and 

(iv) reporting such related information as required 

by the Secretary; and 

(B) not later than 2 years after such date of enactment, 

for each child and youth described in paragraph (9)(C)(i)(I) 

of this subsection, the State agency shall report immediately, and in no case later than 24 hours after receiving, 

information on missing or abducted children or youth to 

the law enforcement authorities for entry into the National 

Crime Information Center (NCIC) database of the Federal 

Bureau of Investigation, established pursuant to section 

534 of title 28, United States Code, and to the National 

Center for Missing and Exploited Children. 

(b) The Secretary shall approve any plan which complies with the 

provisions of subsection (a) of this section. 

(c) USE OF CHILD WELFARE RECORDS IN STATE COURT PROCEEDINGS.—Subsection (a)(8) shall not be construed to limit the 

flexibility of a State in determining State policies relating to public 

access to court proceedings to determine child abuse and neglect or 

other court hearings held pursuant to part B or this part, except 

that such policies shall, at a minimum, ensure the safety and wellbeing of the child, parents, and family. 

(d) ANNUAL REPORTS BY THE SECRETARY ON NUMBER OF CHILDREN AND YOUTH REPORTED BY STATES TO BE SEX TRAFFICKING

VICTIMS.—Not later than 4 years after the date of the enactment 

of this subsection and annually thereafter, the Secretary shall report to the Congress and make available to the public on the Internet website of the Department of Health and Human Services the 

number of children and youth reported in accordance with subsection (a)(34)(B) of this section to be sex trafficking victims (as defined in section 475(9)(A)). 

FOSTER CARE MAINTENANCE PAYMENTS PROGRAM

SEC. 472. (a) IN GENERAL.— 

(1) ELIGIBILITY.—Each State with a plan approved under 

this part shall make foster care maintenance payments on behalf of each child who has been removed from the home of a 

relative specified in section 406(a) (as in effect on July 16, 

1996) into foster care if— 


emcdonald on DSK67QTVN1PROD with HEARING
266 

(A) the removal and foster care placement met, and the 

placement continues to meet, the requirements of paragraph (2); and 

(B) the child, while in the home, would have met the 

AFDC eligibility requirement of paragraph (3). 

(2) REMOVAL AND FOSTER CARE PLACEMENT REQUIREMENTS.— The removal and foster care placement of a child meet the requirements of this paragraph if— 

(A) the removal and foster care placement are in accordance with— 

(i) a voluntary placement agreement entered into by 

a parent or legal guardian of the child who is the relative referred to in paragraph (1); or 

(ii) a judicial determination to the effect that continuation in the home from which removed would be 

contrary to the welfare of the child and that reasonable efforts of the type described in section 471(a)(15) 

for a child have been made; 

(B) the child’s placement and care are the responsibility 

of— 

(i) the State agency administering the State plan approved under section 471; 

(ii) any other public agency with which the State 

agency administering or supervising the administration of the State plan has made an agreement which 

is in effect; or 

(iii) an Indian tribe or a tribal organization (as defined in section 479B(a)) or a tribal consortium that 

has a plan approved under section 471 in accordance 

with section 479B; and 

(C) the child has been placed in a foster family home or 

child-care institution. 

(3) AFDC ELIGIBILITY REQUIREMENT.— (A) IN GENERAL.—A child in the home referred to in 

paragraph (1) would have met the AFDC eligibility requirement of this paragraph if the child— 

(i) would have received aid under the State plan approved under section 402 (as in effect on July 16, 

1996) in the home, in or for the month in which the 

agreement was entered into or court proceedings leading to the determination referred to in paragraph 

(2)(A)(ii) of this subsection were initiated; or 

(ii)(I) would have received the aid in the home, in or 

for the month referred to in clause (i), if application 

had been made therefor; or 

(II) had been living in the home within 6 months before the month in which the agreement was entered 

into or the proceedings were initiated, and would have 

received the aid in or for such month, if, in such 

month, the child had been living in the home with the 

relative referred to in paragraph (1) and application 

for the aid had been made. 

(B) RESOURCES DETERMINATION.—For purposes of subparagraph (A), in determining whether a child would have 

received aid under a State plan approved under section 


emcdonald on DSK67QTVN1PROD with HEARING
267 

402 (as in effect on July 16, 1996), a child whose resources 

(determined pursuant to section 402(a)(7)(B), as so in effect) have a combined value of not more than $10,000 shall 

be considered a child whose resources have a combined 

value of not more than $1,000 (or such lower amount as 

the State may determine for purposes of section 

402(a)(7)(B)). 

(4) ELIGIBILITY OF CERTAIN ALIEN CHILDREN.—Subject to title 

IV of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, if the child is an alien disqualified 

under section 245A(h) or 210(f) of the Immigration and Nationality Act from receiving aid under the State plan approved 

under section 402 in or for the month in which the agreement 

described in paragraph (2)(A)(i) was entered into or court proceedings leading to the determination described in paragraph 

(2)(A)(ii) were initiated, the child shall be considered to satisfy 

the requirements of paragraph (3), with respect to the month, 

if the child would have satisfied the requirements but for the 

disqualification. 

(b) Foster care maintenance payments may be made under this 

part only on behalf of a child described in subsection (a) of this section who is— 

(1) in the foster family home of an individual, whether the 

payments therefor are made to such individual or to a public 

or private child-placement or child-care agency, or 

(2) in a child-care institution, whether the payments therefor 

are made to such institution or to a public or private childplacement or child-care agency, which payments shall be limited so as to include in such payments only those items which 

are included in the term ‘‘foster care maintenance payments’’ 

(as defined in section 475(4)). 

(c) For the purposes of this part, (1) the term ‘‘foster family 

home’’ means a foster family home for children which is licensed 

by the State in which it is situated or has been approved, by the 

agency of such State having responsibility for licensing homes of 

this type, as meeting the standards established for such licensing; 

and (2) the term ‘‘child-care institution’’ means a private child-care 

institution, or a public child-care institution which accommodates 

no more than twenty-five children, which is licensed by the State 

in which it is situated or has been approved, by the agency of such 

State responsible for licensing or approval of institutions of this 

type, as meeting the standards established for such licensing, except, in the case of a child who has attained 18 years of age, the 

term shall include a supervised setting in which the individual is 

living independently, in accordance with such conditions as the 

Secretary shall establish in regulations, but the term shall not include detention facilities, forestry camps, training schools, or any 

other facility operated primarily for the detention of children who 

are determined to be delinquent. 

(d) Notwithstanding any other provision of this title, Federal 

payments may be made under this part with respect to amounts 

expended by any State as foster care maintenance payments under 

this section, in the case of children removed from their homes pursuant to voluntary placement agreements as described in subVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00273 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
268 

section (a), only if (at the time such amounts were expended) the 

State has fulfilled all of the requirements of section 422(b)(8). 

(e) No Federal payment may be made under this part with respect to amounts expended by any State as foster care maintenance 

payments under this section, in the case of any child who was removed from his or her home pursuant to a voluntary placement 

agreement as described in subsection (a) and has remained in voluntary placement for a period in excess of 180 days, unless there 

has been a judicial determination by a court of competent jurisdiction (within the first 180 days of such placement) to the effect that 

such placement is in the best interests of the child. 

(f) For the purposes of this part and part B of this title, (1) the 

term ‘‘voluntary placement’’ means an out-of-home placement of a 

minor, by or with participation of a State agency, after the parents 

or guardians of the minor have requested the assistance of the 

agency and signed a voluntary placement agreement; and (2) the 

term ‘‘voluntary placement agreement’’ means a written agreement, 

binding on the parties to the agreement, between the State agency, 

any other agency acting on its behalf, and the parents or guardians 

of a minor child which specifies, at a minimum, the legal status of 

the child and the rights and obligations of the parents or guardians, the child, and the agency while the child is in placement. 

(g) In any case where— 

(1) the placement of a minor child in foster care occurred 

pursuant to a voluntary placement agreement entered into by 

the parents or guardians of such child as provided in subsection (a), and 

(2) such parents or guardians request (in such manner and 

form as the Secretary may prescribe) that the child be returned to their home or to the home of a relative, 

the voluntary placement agreement shall be deemed to be revoked 

unless the State agency opposes such request and obtains a judicial 

determination, by a court of competent jurisdiction, that the return 

of the child to such home would be contrary to the child’s best interests. 

(h)(1) For purposes of title XIX, any child with respect to whom 

foster care maintenance payments are made under this section is 

deemed to be a dependent child as defined in section 406 (as in effect as of July 16, 1996) and deemed to be a recipient of aid to families with dependent children under part A of this title (as so in effect). øFor purposes of subtitle 1 of title XX, any child with respect 

to whom foster care maintenance payments are made under this 

section is deemed to be a minor child in a needy family under a 

State program funded under part A of this title and is deemed to 

be a recipient of assistance under such part.¿ 

(2) For purposes of paragraph (1), a child whose costs in a foster 

family home or child care institution are covered by the foster care 

maintenance payments being made with respect to the child’s 

minor parent, as provided in section 475(4)(B), shall be considered 

a child with respect to whom foster care maintenance payments are 

made under this section. 

(i) ADMINISTRATIVE COSTS ASSOCIATED WITH OTHERWISE ELIGI- BLE CHILDREN NOT IN LICENSED FOSTER CARE SETTINGS.—Expenditures by a State that would be considered administrative expenditures for purposes of section 474(a)(3) if made with respect to a 


emcdonald on DSK67QTVN1PROD with HEARING
269 

child who was residing in a foster family home or child-care institution shall be so considered with respect to a child not residing in 

such a home or institution— 

(1) in the case of a child who has been removed in accordance with subsection (a) of this section from the home of a relative specified in section 406(a) (as in effect on July 16, 1996), 

only for expenditures— 

(A) with respect to a period of not more than the lesser 

of 12 months or the average length of time it takes for the 

State to license or approve a home as a foster home, in 

which the child is in the home of a relative and an application is pending for licensing or approval of the home as a 

foster family home; or 

(B) with respect to a period of not more than 1 calendar 

month when a child moves from a facility not eligible for 

payments under this part into a foster family home or 

child care institution licensed or approved by the State; 

and 

(2) in the case of any other child who is potentially eligible 

for benefits under a State plan approved under this part and 

at imminent risk of removal from the home, only if— 

(A) reasonable efforts are being made in accordance with 

section 471(a)(15) to prevent the need for, or if necessary 

to pursue, removal of the child from the home; and 

(B) the State agency has made, not less often than every 

6 months, a determination (or redetermination) as to 

whether the child remains at imminent risk of removal 

from the home. 

ADOPTION AND GUARDIANSHIP ASSISTANCE PROGRAM

SEC. 473. (a)(1)(A) Each State having a plan approved under this 

part shall enter into adoption assistance agreements (as defined in 

section 475(3)) with the adoptive parents of children with special 

needs. 

(B) Under any adoption assistance agreement entered into by a 

State with parents who adopt a child with special needs, the 

State— 

(i) shall make payments of nonrecurring adoption expenses 

incurred by or on behalf of such parents in connection with the 

adoption of such child, directly through the State agency or 

through another public or nonprofit private agency, in amounts 

determined under paragraph (3), and 

(ii) in any case where the child meets the requirements of 

paragraph (2), may make adoption assistance payments to 

such parents, directly through the State agency or through another public or nonprofit private agency, in amounts so determined. 

(2)(A) For purposes of paragraph (1)(B)(ii), a child meets the requirements of this paragraph if— 

(i) in the case of a child who is not an applicable child for 

the fiscal year (as defined in subsection (e)), the child— 

(I)(aa)(AA) was removed from the home of a relative 

specified in section 406(a) (as in effect on July 16, 1996) 

and placed in foster care in accordance with a voluntary 

placement agreement with respect to which Federal payVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00275 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
270 

ments are provided under section 474 (or section 403, as 

such section was in effect on July 16, 1996), or in accordance with a judicial determination to the effect that continuation in the home would be contrary to the welfare of 

the child; and 

(BB) met the requirements of section 472(a)(3) with respect to the home referred to in subitem (AA) of this item; 

(bb) meets all of the requirements of title XVI with respect to eligibility for supplemental security income benefits; or 

(cc) is a child whose costs in a foster family home or 

child-care institution are covered by the foster care maintenance payments being made with respect to the minor 

parent of the child as provided in section 475(4)(B); and 

(II) has been determined by the State, pursuant to subsection (c)(1) of this section, to be a child with special 

needs; or 

(ii) in the case of a child who is an applicable child for the 

fiscal year (as so defined), the child— 

(I)(aa) at the time of initiation of adoption proceedings 

was in the care of a public or licensed private child placement agency or Indian tribal organization pursuant to— 

(AA) an involuntary removal of the child from the 

home in accordance with a judicial determination to 

the effect that continuation in the home would be contrary to the welfare of the child; or 

(BB) a voluntary placement agreement or voluntary 

relinquishment; 

(bb) meets all medical or disability requirements of title 

XVI with respect to eligibility for supplemental security income benefits; or 

(cc) was residing in a foster family home or child care institution with the child’s minor parent, and the child’s 

minor parent was in such foster family home or child care 

institution pursuant to— 

(AA) an involuntary removal of the child from the 

home in accordance with a judicial determination to 

the effect that continuation in the home would be contrary to the welfare of the child; or 

(BB) a voluntary placement agreement or voluntary 

relinquishment; and 

(II) has been determined by the State, pursuant to subsection (c)(2), to be a child with special needs. 

(B) Section 472(a)(4) shall apply for purposes of subparagraph (A) 

of this paragraph, in any case in which the child is an alien described in such section. 

(C) A child shall be treated as meeting the requirements of this 

paragraph for the purpose of paragraph (1)(B)(ii) if— 

(i) in the case of a child who is not an applicable child for 

the fiscal year (as defined in subsection (e)), the child— 

(I) meets the requirements of subparagraph (A)(i)(II); 

(II) was determined eligible for adoption assistance payments under this part with respect to a prior adoption; 

(III) is available for adoption because— 


emcdonald on DSK67QTVN1PROD with HEARING
271 

(aa) the prior adoption has been dissolved, and the 

parental rights of the adoptive parents have been terminated; or 

(bb) the child’s adoptive parents have died; and 

(IV) fails to meet the requirements of subparagraph 

(A)(i) but would meet such requirements if— 

(aa) the child were treated as if the child were in 

the same financial and other circumstances the child 

was in the last time the child was determined eligible 

for adoption assistance payments under this part; and 

(bb) the prior adoption were treated as never having 

occurred; or 

(ii) in the case of a child who is an applicable child for the 

fiscal year (as so defined), the child meets the requirements of 

subparagraph (A)(ii)(II), is determined eligible for adoption assistance payments under this part with respect to a prior adoption (or who would have been determined eligible for such payments had the Adoption and Safe Families Act of 1997 been in 

effect at the time that such determination would have been 

made), and is available for adoption because the prior adoption 

has been dissolved and the parental rights of the adoptive parents have been terminated or because the child’s adoptive parents have died. 

(D) In determining the eligibility for adoption assistance payments of a child in a legal guardianship arrangement described 

in section 471(a)(28), the placement of the child with the relative guardian involved and any kinship guardianship assistance payments made on behalf of the child shall be considered 

never to have been made. 

(3) The amount of the payments to be made in any case under 

clauses (i) and (ii) of paragraph (1)(B) shall be determined through 

agreement between the adoptive parents and the State or local 

agency administering the program under this section, which shall 

take into consideration the circumstances of the adopting parents 

and the needs of the child being adopted, and may be readjusted 

periodically, with the concurrence of the adopting parents (which 

may be specified in the adoption assistance agreement), depending 

upon changes in such circumstances. However, in no case may the 

amount of the adoption assistance payment made under clause (ii) 

of paragraph (1)(B) exceed the foster care maintenance payment 

which would have been paid during the period if the child with respect to whom the adoption assistance payment is made had been 

in a foster family home. 

(4)(A) Notwithstanding any other provision of this section, a payment may not be made pursuant to this section to parents or relative guardians with respect to a child— 

(i) who has attained— 

(I) 18 years of age, or such greater age as the State may 

elect under section 475(8)(B)(iii); or 

(II) 21 years of age, if the State determines that the 

child has a mental or physical handicap which warrants 

the continuation of assistance; 

(ii) who has not attained 18 years of age, if the State determines that the parents or relative guardians, as the case may 


emcdonald on DSK67QTVN1PROD with HEARING
272 

be, are no longer legally responsible for the support of the 

child; or 

(iii) if the State determines that the child is no longer receiving any support from the parents or relative guardians, as the 

case may be. 

(B) Parents or relative guardians who have been receiving adoption assistance payments or kinship guardianship assistance payments under this section shall keep the State or local agency administering the program under this section informed of circumstances which would, pursuant to this subsection, make them 

ineligible for the payments, or eligible for the payments in a different amount. 

(5) For purposes of this part, individuals with whom a child (who 

has been determined by the State, pursuant to subsection (c), to be 

a child with special needs) is placed for adoption in accordance 

with applicable State and local law shall be eligible for such payments, during the period of the placement, on the same terms and 

subject to the same conditions as if such individuals had adopted 

such child. 

(6)(A) For purposes of paragraph (1)(B)(i), the term ‘‘nonrecurring 

adoption expenses’’ means reasonable and necessary adoption fees, 

court costs, attorney fees, and other expenses which are directly related to the legal adoption of a child with special needs and which 

are not incurred in violation of State or Federal law. 

(B) A State’s payment of nonrecurring adoption expenses under 

an adoption assistance agreement shall be treated as an expenditure made for the proper and efficient administration of the State 

plan for purposes of section 474(a)(3)(E). 

(7)(A) Notwithstanding any other provision of this subsection, no 

payment may be made to parents with respect to any applicable 

child for a fiscal year that— 

(i) would be considered a child with special needs under subsection (c)(2); 

(ii) is not a citizen or resident of the United States; and 

(iii) was adopted outside of the United States or was brought 

into the United States for the purpose of being adopted. 

(B) Subparagraph (A) shall not be construed as prohibiting payments under this part for an applicable child described in subparagraph (A) that is placed in foster care subsequent to the failure, as 

determined by the State, of the initial adoption of the child by the 

parents described in subparagraph (A). 

(8)(A) A State shall calculate the savings (if any) resulting from 

the application of paragraph (2)(A)(ii) to all applicable children for 

a fiscal year, using a methodology specified by the Secretary or an 

alternate methodology proposed by the State and approved by the 

Secretary. 

(B) A State shall annually report to the Secretary— 

(i) the methodology used to make the calculation described in 

subparagraph (A), without regard to whether any savings are 

found; 

(ii) the amount of any savings referred to in subparagraph 

(A); and 

(iii) how any such savings are spent, accounting for and reporting the spending separately from any other spending reported to the Secretary under part B or this part. 


emcdonald on DSK67QTVN1PROD with HEARING
273 

(C) The Secretary shall make all information reported pursuant 

to subparagraph (B) available on the website of the Department of 

Health and Human Services in a location easily accessible to the 

public. 

(D)(i) A State shall spend an amount equal to the amount of the 

savings (if any) in State expenditures under this part resulting 

from the application of paragraph (2)(A)(ii) to all applicable children for a fiscal year, to provide to children of families any service 

that may be provided under part B or this part. A State shall 

spend not less than 30 percent of any such savings on post-adoption services, post-guardianship services, and services to support 

and sustain positive permanent outcomes for children who otherwise might enter into foster care under the responsibility of the 

State, with at least 2⁄3 of the spending by the State to comply with 

such 30 percent requirement being spent on post-adoption and 

post-guardianship services. 

(ii) Any State spending required under clause (i) shall be used to 

supplement, and not supplant, any Federal or non-Federal funds 

used to provide any service under part B or this part. 

(b)(1) For purposes of title XIX, any child who is described in 

paragraph ø(3)¿ (2) is deemed to be a dependent child as defined 

in section 406 (as in effect as of July 16, 1996) and deemed to be 

a recipient of aid to families with dependent children under part 

A of this title (as so in effect) in the State where such child resides. 

ø(2) For purposes of subtitle 1 of title XX, any child who is described in paragraph (3) is deemed to be a minor child in a needy 

family under a State program funded under part A of this title and 

deemed to be a recipient of assistance under such part.¿ 

ø(3)¿ (2) A child described in this paragraph is any child— 

(A)(i) who is a child described in subsection (a)(2), and 

(ii) with respect to whom an adoption assistance agreement 

is in effect under this section (whether or not adoption assistance payments are provided under the agreement or are being 

made under this section), including any such child who has 

been placed for adoption in accordance with applicable State 

and local law (whether or not an interlocutory or other judicial 

decree of adoption has been issued), 

(B) with respect to whom foster care maintenance payments 

are being made under section 472, or 

(C) with respect to whom kinship guardianship assistance 

payments are being made pursuant to subsection (d). 

ø(4)¿ (3) For purposes of øparagraphs (1) and (2)¿ paragraph (1), a child whose costs in a foster family home or child-care institution 

are covered by the foster care maintenance payments being made 

with respect to the child’s minor parent, as provided in section 

475(4)(B), shall be considered a child with respect to whom foster 

care maintenance payments are being made under section 472. 

(c) For purposes of this section— 

(1) in the case of a child who is not an applicable child for 

a fiscal year, the child shall not be considered a child with special needs unless— 

(A) the State has determined that the child cannot or 

should not be returned to the home of his parents; and 

(B) the State had first determined (A) that there exists 

with respect to the child a specific factor or condition (such 


emcdonald on DSK67QTVN1PROD with HEARING
274 

as his ethnic background, age, or membership in a minority or sibling group, or the presence of factors such as medical conditions or physical, mental, or emotional handicaps) 

because of which it is reasonable to conclude that such 

child cannot be placed with adoptive parents without providing adoption assistance under this section or medical 

assistance under title XIX, and (B) that, except where it 

would be against the best interests of the child because of 

such factors as the existence of significant emotional ties 

with prospective adoptive parents while in the care of such 

parents as a foster child, a reasonable, but unsuccessful, 

effort has been made to place the child with appropriate 

adoptive parents without providing adoption assistance 

under this section or medical assistance under title XIX; or 

(2) in the case of a child who is an applicable child for a fiscal year, the child shall not be considered a child with special 

needs unless— 

(A) the State has determined, pursuant to a criterion or 

criteria established by the State, that the child cannot or 

should not be returned to the home of his parents; 

(B)(i) the State has determined that there exists with respect to the child a specific factor or condition (such as ethnic background, age, or membership in a minority or sibling group, or the presence of factors such as medical conditions or physical, mental, or emotional handicaps) because of which it is reasonable to conclude that the child 

cannot be placed with adoptive parents without providing 

adoption assistance under this section and medical assistance under title XIX; or 

(ii) the child meets all medical or disability requirements 

of title XVI with respect to eligibility for supplemental security income benefits; and 

(C) the State has determined that, except where it would 

be against the best interests of the child because of such 

factors as the existence of significant emotional ties with 

prospective adoptive parents while in the care of the parents as a foster child, a reasonable, but unsuccessful, effort 

has been made to place the child with appropriate adoptive 

parents without providing adoption assistance under this 

section or medical assistance under title XIX. 

(d) KINSHIP GUARDIANSHIP ASSISTANCE PAYMENTS FOR CHILDREN.— 

(1) KINSHIP GUARDIANSHIP ASSISTANCE AGREEMENT.— 

(A) IN GENERAL.—In order to receive payments under 

section 474(a)(5), a State shall— 

(i) negotiate and enter into a written, binding kinship guardianship assistance agreement with the prospective relative guardian of a child who meets the requirements of this paragraph; and 

(ii) provide the prospective relative guardian with a 

copy of the agreement. 

(B) MINIMUM REQUIREMENTS.—The agreement shall 

specify, at a minimum— 

(i) the amount of, and manner in which, each kinship guardianship assistance payment will be provided 


emcdonald on DSK67QTVN1PROD with HEARING
275 

under the agreement, and the manner in which the 

payment may be adjusted periodically, in consultation 

with the relative guardian, based on the circumstances 

of the relative guardian and the needs of the child; 

(ii) the additional services and assistance that the 

child and relative guardian will be eligible for under 

the agreement; 

(iii) the procedure by which the relative guardian 

may apply for additional services as needed; and 

(iv) subject to subparagraph (D), that the State will 

pay the total cost of nonrecurring expenses associated 

with obtaining legal guardianship of the child, to the 

extent the total cost does not exceed $2,000. 

(C) INTERSTATE APPLICABILITY.—The agreement shall 

provide that the agreement shall remain in effect without 

regard to the State residency of the relative guardian. 

(D) NO EFFECT ON FEDERAL REIMBURSEMENT.—Nothing 

in subparagraph (B)(iv) shall be construed as affecting the 

ability of the State to obtain reimbursement from the Federal Government for costs described in that subparagraph. 

(2) LIMITATIONS ON AMOUNT OF KINSHIP GUARDIANSHIP AS- SISTANCE PAYMENT.—A kinship guardianship assistance payment on behalf of a child shall not exceed the foster care maintenance payment which would have been paid on behalf of the 

child if the child had remained in a foster family home. 

(3) CHILD’S ELIGIBILITY FOR A KINSHIP GUARDIANSHIP ASSIST- ANCE PAYMENT.— (A) IN GENERAL.—A child is eligible for a kinship guardianship assistance payment under this subsection if the 

State agency determines the following: 

(i) The child has been— 

(I) removed from his or her home pursuant to a 

voluntary placement agreement or as a result of a 

judicial determination to the effect that continuation in the home would be contrary to the welfare of the child; and 

(II) eligible for foster care maintenance payments under section 472 while residing for at 

least 6 consecutive months in the home of the prospective relative guardian. 

(ii) Being returned home or adopted are not appropriate permanency options for the child. 

(iii) The child demonstrates a strong attachment to 

the prospective relative guardian and the relative 

guardian has a strong commitment to caring permanently for the child. 

(iv) With respect to a child who has attained 14 

years of age, the child has been consulted regarding 

the kinship guardianship arrangement. 

(B) TREATMENT OF SIBLINGS.—With respect to a child described in subparagraph (A) whose sibling or siblings are 

not so described— 

(i) the child and any sibling of the child may be 

placed in the same kinship guardianship arrangement, 

in accordance with section 471(a)(31), if the State 


emcdonald on DSK67QTVN1PROD with HEARING
276 

agency and the relative agree on the appropriateness 

of the arrangement for the siblings; and 

(ii) kinship guardianship assistance payments may 

be paid on behalf of each sibling so placed. 

(C) ELIGIBILITY NOT AFFECTED BY REPLACEMENT OF

GUARDIAN WITH A SUCCESSOR GUARDIAN.—In the event of 

the death or incapacity of the relative guardian, the eligibility of a child for a kinship guardianship assistance payment under this subsection shall not be affected by reason 

of the replacement of the relative guardian with a successor legal guardian named in the kinship guardianship 

assistance agreement referred to in paragraph (1) (including in any amendment to the agreement), notwithstanding 

subparagraph (A) of this paragraph and section 471(a)(28). 

(e) APPLICABLE CHILD DEFINED.— 

(1) ON THE BASIS OF AGE.— 

(A) IN GENERAL.—Subject to paragraphs (2) and (3), in 

this section, the term ‘‘applicable child’’ means a child for 

whom an adoption assistance agreement is entered into 

under this section during any fiscal year described in subparagraph (B) if the child attained the applicable age for 

that fiscal year before the end of that fiscal year. 

(B) APPLICABLE AGE.—For purposes of subparagraph (A), 

the applicable age for a fiscal year is as follows: 

In the case of fiscal year: The applicable age is: 

2010 ................................................................................................. 16

2011 ................................................................................................. 14

2012 ................................................................................................. 12

2013 ................................................................................................. 10

2014 ................................................................................................. 8

2015 ................................................................................................. 6

2016 ................................................................................................. 4

2017 ................................................................................................. 2

2018 or thereafter ........................................................................... any age. 

(2) EXCEPTION FOR DURATION IN CARE.—Notwithstanding 

paragraph (1) of this subsection, beginning with fiscal year 

2010, such term shall include a child of any age on the date 

on which an adoption assistance agreement is entered into on 

behalf of the child under this section if the child— 

(A) has been in foster care under the responsibility of 

the State for at least 60 consecutive months; and 

(B) meets the requirements of subsection (a)(2)(A)(ii). 

(3) EXCEPTION FOR MEMBER OF A SIBLING GROUP.—Notwithstanding paragraphs (1) and (2) of this subsection, beginning 

with fiscal year 2010, such term shall include a child of any 

age on the date on which an adoption assistance agreement is 

entered into on behalf of the child under this section without 

regard to whether the child is described in paragraph (2)(A) of 

this subsection if the child— 

(A) is a sibling of a child who is an applicable child for 

the fiscal year under paragraph (1) or (2) of this subsection; 


emcdonald on DSK67QTVN1PROD with HEARING
277 

(B) is to be placed in the same adoption placement as an 

applicable child for the fiscal year who is their sibling; and 

(C) meets the requirements of subsection (a)(2)(A)(ii). 

* * * * * * * 

TITLE V—MATERNAL AND CHILD HEALTH SERVICES 

BLOCK GRANT 

* * * * * * * 

USE OF ALLOTMENT FUNDS

SEC. 504. (a) Except as otherwise provided under this section, a 

State may use amounts paid to it under section 503 for the provision of health services and related activities (including planning, 

administration, education, and evaluation and including payment 

of salaries and other related expenses of National Health Service 

Corps personnel) consistent with its application transmitted under 

section 505(a). 

(b) Amounts described in subsection (a) may not be used for— 

(1) inpatient services, other than inpatient services provided 

to children with special health care needs or to high-risk pregnant women and infants and such other inpatient services as 

the Secretary may approve; 

(2) cash payments to intended recipients of health services; 

(3) the purchase or improvement of land, the purchase, construction, or permanent improvement (other than minor remodeling) of any building or other facility, or the purchase of 

major medical equipment; 

(4) satisfying any requirement for the expenditure of nonFederal funds as a condition for the receipt of Federal funds; 

(5) providing funds for research or training to any entity 

other than a public or nonprofit private entity; or 

(6) payment for any item or service (other than an emergency item or service) furnished— 

(A) by an individual or entity during the period when 

such individual or entity is excluded under this title or 

title XVIIIø, XIX, or XX¿ or XIX pursuant to section 1128, 

1128A, 1156, or 1842(j)(2), or 

(B) at the medical direction or on the prescription of a 

physician during the period when the physician is excluded under this title or title XVIIIø, XIX, or XX¿ or XIX 

pursuant to section 1128, 1128A, 1156, or 1842(j)(2) and 

when the person furnishing such item or service knew or 

had reason to know of the exclusion (after a reasonable 

time period after reasonable notice has been furnished to 

the person). 

The Secretary may waive the limitation contained in paragraph (3) 

upon the request of a State if the Secretary finds that there are 

extraordinary circumstances to justify the waiver and that granting 

the waiver will assist in carrying out this title. 

(c) A State may use a portion of the amounts described in subsection (a) for the purpose of purchasing technical assistance from 

public or private entities if the State determines that such assistance is required in developing, implementing, and administering 

programs funded under this title. 


emcdonald on DSK67QTVN1PROD with HEARING
278 

(d) Of the amounts paid to a State under section 503 from an allotment for a fiscal year under section 502(c), not more than 10 

percent may be used for administering the funds paid under such 

section. 

* * * * * * * 

TITLE XI—GENERAL PROVISIONS, PEER REVIEW, AND 

ADMINISTRATIVE SIMPLIFICATION 

PART A—GENERAL PROVISIONS

DEFINITIONS

SEC. 1101. (a) When used in this Act— 

(1) The term ‘‘State’’, except where otherwise provided, includes the District of Columbia and the Commonwealth of 

Puerto Rico, and when used in titles IV, V, VII, XI, XIX, and 

XXI includes the Virgin Islands and Guam. Such term when 

used in titles III, IX, and XII also includes the Virgin Islands. 

Such term when used in title V and in part B of this title also 

includes American Samoa, the Northern Mariana Islands, and 

the Trust Territory of the Pacific Islands. Such term when 

used in titles XIX and XXI also includes the Northern Mariana 

Islands and American Samoa. In the case of Puerto Rico, the 

Virgin Islands, and Guam, titles I, X, and XIV, and title XVI 

(as in effect without regard to the amendment made by section 

301 of the Social Security Amendments of 1972) shall continue 

to apply, and the term ‘‘State’’ when used in such titles (but 

not in title XVI as in effect pursuant to such amendment after 

December 31, 1973) includes Puerto Rico, the Virgin Islands, 

and Guam. øSuch term when used in title XX also includes the 

Virgin Islands, Guam, American Samoa, and the Northern 

Mariana Islands.¿ Such term when used in title IV also includes American Samoa. 

(2) The term ‘‘United States’’ when used in a geographical 

sense means, except where otherwise provided, the States. 

(3) The term ‘‘person’’ means an individual, a trust or estate, 

a partnership, or a corporation. 

(4) The term ‘‘corporation’’ includes associations, joint-stock 

companies, and insurance companies. 

(5) The term ‘‘shareholder’’ includes a member in an association, joint-stock company, or insurance company. 

(6) The term ‘‘Secretary’’, except when the context otherwise 

requires, means the Secretary of Health and Human Services. 

(7) The terms ‘‘physician’’ and ‘‘medical care’’ and ‘‘hospitalization’’ include osteopathic practitioners or the services of 

osteopathic practitioners and hospitals within the scope of 

their practice as defined by State law. 

(8)(A) The ‘‘Federal percentage’’ for any State (other than 

Puerto Rico, the Virgin Islands, and Guam) shall be 100 per 

centum less the State percentage; and the State percentage 

shall be that percentage which bears the same ratio to 50 per 

centum as the square of the per capita income of such State 

bears to the square of the per capita income of the United 


emcdonald on DSK67QTVN1PROD with HEARING
279 

States; except that the Federal percentage shall in no case be 

less than 50 per centum or more than 65 per centum. 

(B) The Federal percentage for each State (other than Puerto 

Rico, the Virgin Islands, and Guam) shall be promulgated by 

the Secretary between October 1 and November 30 of each 

year, on the basis of the average per capita income of each 

State and of the United States for the three most recent calendar years for which satisfactory data are available from the 

Department of Commerce. Such promulgation shall be conclusive for each of the four quarters in the period beginning October 1 next succeeding such promulgation: Provided, That the 

Secretary shall promulgate such percentages as soon as possible after the enactment of the Social Security Amendments 

of 1958, which promulgation shall be conclusive for each of the 

eleven quarters in the period beginning October 1, 1958, and 

ending with the close of June 30, 1961. 

(C) The term ‘‘United States’’ means (but only for purposes 

of subparagraphs (A) and (B) of this paragraph) the fifty States 

and the District of Columbia. 

(D) Promulgations made before satisfactory data are available from the Department of Commerce for a full year on the 

per capita income of Alaska shall prescribe a Federal percentage for Alaska of 50 per centum and, for purposes of such promulgations, Alaska shall not be included as part of the ‘‘United 

States’’. Promulgations made thereafter but before per capita 

income data for Alaska for a full three-year period are available from the Department of Commerce shall be based on satisfactory data available therefrom for Alaska for such one full 

year or, when such data are available for a two-year period, for 

such two years. 

(9) The term ‘‘shared health facility’’ means any arrangement 

whereby— 

(A) two or more health care practitioners practice their 

professions at a common physical location; 

(B) such practitioners share (i) common waiting areas, 

examining rooms, treatment rooms, or other space, (ii) the 

services of supporting staff, or (iii) equipment; 

(C) such practitioners have a person (who may himself 

be a practitioner)— 

(i) who is in charge of, controls, manages, or supervises substantial aspects of the arrangement or operation for the delivery of health or medical services at 

such common physical location, other than the direct 

furnishing of professional health care services by the 

practitioners to their patients; or 

(ii) who makes available to such practitioners the 

services of supporting staff who are not employees of 

such practitioners; 

and who is compensated in whole or in part, for the use 

of such common physical location or support services pertaining thereto, on a basis related to amounts charged or 

collected for the services rendered or ordered at such location or on any basis clearly unrelated to the value of the 

services provided by the person; and 


emcdonald on DSK67QTVN1PROD with HEARING
280 

(D) at least one of such practitioners received payments 

on a fee-for-service basis under titles XVIII and XIX in an 

amount exceeding $5,000 for any one month during the 

preceding 12 months or in an aggregate amount exceeding 

$40,000 during the preceding 12 months; 

except that such term does not include a provider of services 

(as defined in section 1861(u) of this Act), a health maintenance organization (as defined in section 1301(a) of the Public 

Health Service Act), a hospital cooperative shared services organization meeting the requirements of section 501(e) of the 

Internal Revenue Code of 1954, or any public entity. 

(10) The term ‘‘Administration’’ means the Social Security 

Administration, except where the context requires otherwise. 

(b) The terms ‘‘includes’’ and ‘‘including’’ when used in a definition contained in this Act shall not be deemed to exclude other 

things otherwise within the meaning of the term defined. 

(c) Whenever under this Act or any Act of Congress, or under the 

law of any State, an employer is required or permitted to deduct 

any amount from the remuneration of an employee and to pay the 

amount deducted to the United States, a State, or any political subdivision thereof, then for the purposes of this Act the amount so 

deducted shall be considered to have been paid to the employee at 

the time of such deduction. 

(d) Nothing in this Act shall be construed as authorizing any 

Federal official, agent, or representative, in carrying out any of the 

provisions of this Act, to take charge of any child over the objection 

of either of the parents of such child, or of the person standing in 

loco parentis to such child. 

* * * * * * * 

EXCLUSION OF CERTAIN INDIVIDUALS AND ENTITIES FROM

PARTICIPATION IN MEDICARE AND STATE HEALTH CARE PROGRAMS

SEC. 1128. (a) MANDATORY EXCLUSION.—The Secretary shall exclude the following individuals and entities from participation in 

any Federal health care program (as defined in section 1128B(f)): 

(1) CONVICTION OF PROGRAM-RELATED CRIMES.—Any individual or entity that has been convicted of a criminal offense 

related to the delivery of an item or service under title XVIII 

or under any State health care program. 

(2) CONVICTION RELATING TO PATIENT ABUSE.—Any individual or entity that has been convicted, under Federal or 

State law, of a criminal offense relating to neglect or abuse of 

patients in connection with the delivery of a health care item 

or service. 

(3) FELONY CONVICTION RELATING TO HEALTH CARE FRAUD.— 

Any individual or entity that has been convicted for an offense 

which occurred after the date of the enactment of the Health 

Insurance Portability and Accountability Act of 1996, under 

Federal or State law, in connection with the delivery of a 

health care item or service or with respect to any act or omission in a health care program (other than those specifically described in paragraph (1)) operated by or financed in whole or 

in part by any Federal, State, or local government agency, of 

a criminal offense consisting of a felony relating to fraud, theft, 


emcdonald on DSK67QTVN1PROD with HEARING
281 

embezzlement, breach of fiduciary responsibility, or other financial misconduct. 

(4) FELONY CONVICTION RELATING TO CONTROLLED SUB- STANCE.—Any individual or entity that has been convicted for 

an offense which occurred after the date of the enactment of 

the Health Insurance Portability and Accountability Act of 

1996, under Federal or State law, of a criminal offense consisting of a felony relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. 

(b) PERMISSIVE EXCLUSION.—The Secretary may exclude the following individuals and entities from participation in any Federal 

health care program (as defined in section 1128B(f)): 

(1) CONVICTION RELATING TO FRAUD.—Any individual or entity that has been convicted for an offense which occurred after 

the date of the enactment of the Health Insurance Portability 

and Accountability Act of 1996, under Federal or State law— 

(A) of a criminal offense consisting of a misdemeanor relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct— 

(i) in connection with the delivery of a health care 

item or service, or 

(ii) with respect to any act or omission in a health 

care program (other than those specifically described 

in subsection (a)(1)) operated by or financed in whole 

or in part by any Federal, State, or local government 

agency; or 

(B) of a criminal offense relating to fraud, theft, embezzlement, breach of fiduciary responsibility, or other financial misconduct with respect to any act or omission in a 

program (other than a health care program) operated by or 

financed in whole or in part by any Federal, State, or local 

government agency. 

(2) CONVICTION RELATING TO OBSTRUCTION OF AN INVESTIGA- TION OR AUDIT.—Any individual or entity that has been convicted, under Federal or State law, in connection with the interference with or obstruction of any investigation or audit related to— 

(i) any offense described in paragraph (1) or in subsection (a); or 

(ii) the use of funds received, directly or indirectly, 

from any Federal health care program (as defined in 

section 1128B(f)). 

(3) MISDEMEANOR CONVICTION RELATING TO CONTROLLED

SUBSTANCE.—Any individual or entity that has been convicted, 

under Federal or State law, of a criminal offense consisting of 

a misdemeanor relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled substance. 

(4) LICENSE REVOCATION OR SUSPENSION.—Any individual or 

entity— 

(A) whose license to provide health care has been revoked or suspended by any State licensing authority, or 

who otherwise lost such a license or the right to apply for 

or renew such a license, for reasons bearing on the individual’s or entity’s professional competence, professional performance, or financial integrity, or 


emcdonald on DSK67QTVN1PROD with HEARING
282 

(B) who surrendered such a license while a formal disciplinary proceeding was pending before such an authority 

and the proceeding concerned the individual’s or entity’s 

professional competence, professional performance, or financial integrity. 

(5) EXCLUSION OR SUSPENSION UNDER FEDERAL OR STATE

HEALTH CARE PROGRAM.—Any individual or entity which has 

been suspended or excluded from participation, or otherwise 

sanctioned, under— 

(A) any Federal program, including programs of the Department of Defense or the Department of Veterans Affairs, involving the provision of health care, or 

(B) a State health care program, 

for reasons bearing on the individual’s or entity’s professional 

competence, professional performance, or financial integrity. 

(6) CLAIMS FOR EXCESSIVE CHARGES OR UNNECESSARY SERVICES AND FAILURE OF CERTAIN ORGANIZATIONS TO FURNISH

MEDICALLY NECESSARY SERVICES.—Any individual or entity 

that the Secretary determines— 

(A) has submitted or caused to be submitted bills or requests for payment (where such bills or requests are based 

on charges or cost) under title XVIII or a State health care 

program containing charges (or, in applicable cases, requests for payment of costs) for items or services furnished 

substantially in excess of such individual’s or entity’s 

usual charges (or, in applicable cases, substantially in excess of such individual’s or entity’s costs) for such items or 

services, unless the Secretary finds there is good cause for 

such bills or requests containing such charges or costs; 

(B) has furnished or caused to be furnished items or 

services to patients (whether or not eligible for benefits 

under title XVIII or under a State health care program) 

substantially in excess of the needs of such patients or of 

a quality which fails to meet professionally recognized 

standards of health care; 

(C) is— 

(i) a health maintenance organization (as defined in 

section 1903(m)) providing items and services under a 

State plan approved under title XIX, or 

(ii) an entity furnishing services under a waiver approved under section 1915(b)(1), 

and has failed substantially to provide medically necessary 

items and services that are required (under law or the contract with the State under title XIX) to be provided to individuals covered under that plan or waiver, if the failure 

has adversely affected (or has a substantial likelihood of 

adversely affecting) these individuals; or 

(D) is an entity providing items and services as an eligible organization under a risk-sharing contract under section 1876 and has failed substantially to provide medically 

necessary items and services that are required (under law 

or such contract) to be provided to individuals covered 

under the risk-sharing contract, if the failure has adversely affected (or has a substantial likelihood of adversely affecting) these individuals. 


emcdonald on DSK67QTVN1PROD with HEARING
283 

(7) FRAUD, KICKBACKS, AND OTHER PROHIBITED ACTIVITIES.— Any individual or entity that the Secretary determines has 

committed an act which is described in section 1128A, 1128B, 

or 1129. 

(8) ENTITIES CONTROLLED BY A SANCTIONED INDIVIDUAL.— Any entity with respect to which the Secretary determines that 

a person— 

(A)(i) who has a direct or indirect ownership or control 

interest of 5 percent or more in the entity or with an ownership or control interest (as defined in section 1124(a)(3)) 

in that entity, 

(ii) who is an officer, director, agent, or managing employee (as defined in section 1126(b)) of that entity; or 

(iii) who was described in clause (i) but is no longer so 

described because of a transfer of ownership or control interest, in anticipation of (or following) a conviction, assessment, or exclusion described in subparagraph (B) against 

the person, to an immediate family member (as defined in 

subsection (j)(1)) or a member of the household of the person (as defined in subsection (j)(2)) who continues to maintain an interest described in such clause— 

is a person— 

(B)(i) who has been convicted of any offense described in 

subsection (a) or in paragraph (1), (2), or (3) of this subsection; 

(ii) against whom a civil monetary penalty has been assessed under section 1128A or 1129; or 

(iii) who has been excluded from participation under a 

program under title XVIII or under a State health care 

program. 

(9) FAILURE TO DISCLOSE REQUIRED INFORMATION.—Any entity that did not fully and accurately make any disclosure required by section 1124, section 1124A, or section 1126. 

(10) FAILURE TO SUPPLY REQUESTED INFORMATION ON SUBCONTRACTORS AND SUPPLIERS.—Any disclosing entity (as defined in section 1124(a)(2)) that fails to supply (within such period as may be specified by the Secretary in regulations) upon 

request specifically addressed to the entity by the Secretary or 

by the State agency administering or supervising the administration of a State health care program— 

(A) full and complete information as to the ownership of 

a subcontractor (as defined by the Secretary in regulations) with whom the entity has had, during the previous 

12 months, business transactions in an aggregate amount 

in excess of $25,000, or 

(B) full and complete information as to any significant 

business transactions (as defined by the Secretary in regulations), occurring during the five-year period ending on 

the date of such request, between the entity and any wholly owned supplier or between the entity and any subcontractor. 

(11) FAILURE TO SUPPLY PAYMENT INFORMATION.—Any individual or entity furnishing, ordering, referring for furnishing, 

or certifying the need for items or services for which payment 

may be made under title XVIII or a State health care program 


emcdonald on DSK67QTVN1PROD with HEARING
284 

that fails to provide such information as the Secretary or the 

appropriate State agency finds necessary to determine whether 

such payments are or were due and the amounts thereof, or 

has refused to permit such examination of its records by or on 

behalf of the Secretary or that agency as may be necessary to 

verify such information. 

(12) FAILURE TO GRANT IMMEDIATE ACCESS.—Any individual 

or entity that fails to grant immediate access, upon reasonable 

request (as defined by the Secretary in regulations) to any of 

the following: 

(A) To the Secretary, or to the agency used by the Secretary, for the purpose specified in the first sentence of 

section 1864(a) (relating to compliance with conditions of 

participation or payment). 

(B) To the Secretary or the State agency, to perform the 

reviews and surveys required under State plans under 

paragraphs (26), (31), and (33) of section 1902(a) and 

under section 1903(g). 

(C) To the Inspector General of the Department of 

Health and Human Services, for the purpose of reviewing 

records, documents, and other data necessary to the performance of the statutory functions of the Inspector General. 

(D) To a State medicaid fraud control unit (as defined in 

section 1903(q)), for the purpose of conducting activities 

described in that section. 

(13) FAILURE TO TAKE CORRECTIVE ACTION.—Any hospital 

that fails to comply substantially with a corrective action required under section 1886(f)(2)(B). 

(14) DEFAULT ON HEALTH EDUCATION LOAN OR SCHOLARSHIP

OBLIGATIONS.—Any individual who the Secretary determines is 

in default on repayments of scholarship obligations or loans in 

connection with health professions education made or secured, 

in whole or in part, by the Secretary and with respect to whom 

the Secretary has taken all reasonable steps available to the 

Secretary to secure repayment of such obligations or loans, except that (A) the Secretary shall not exclude pursuant to this 

paragraph a physician who is the sole community physician or 

sole source of essential specialized services in a community if 

a State requests that the physician not be excluded, and (B) 

the Secretary shall take into account, in determining whether 

to exclude any other physician pursuant to this paragraph, access of beneficiaries to physician services for which payment 

may be made under title XVIII or XIX. 

(15) INDIVIDUALS CONTROLLING A SANCTIONED ENTITY.—(A) 

Any individual— 

(i) who has a direct or indirect ownership or control interest in a sanctioned entity and who knows or should 

know (as defined in section 1128A(i)(6)) of the action constituting the basis for the conviction or exclusion described 

in subparagraph (B); or 

(ii) who is an officer or managing employee (as defined 

in section 1126(b)) of such an entity. 

(B) For purposes of subparagraph (A), the term ‘‘sanctioned 

entity’’ means an entity— 


emcdonald on DSK67QTVN1PROD with HEARING
285 

(i) that has been convicted of any offense described in 

subsection (a) or in paragraph (1), (2), or (3) of this subsection; or 

(ii) that has been excluded from participation under a 

program under title XVIII or under a State health care 

program. 

(16) MAKING FALSE STATEMENTS OR MISREPRESENTATION OF

MATERIAL FACTS.—Any individual or entity that knowingly 

makes or causes to be made any false statement, omission, or 

misrepresentation of a material fact in any application, agreement, bid, or contract to participate or enroll as a provider of 

services or supplier under a Federal health care program (as 

defined in section 1128B(f)), including Medicare Advantage organizations under part C of title XVIII, prescription drug plan 

sponsors under part D of title XVIII, medicaid managed care 

organizations under title XIX, and entities that apply to participate as providers of services or suppliers in such managed 

care organizations and such plans. 

(c) NOTICE, EFFECTIVE DATE, AND PERIOD OF EXCLUSION.—(1) An 

exclusion under this section or under section 1128A shall be effective at such time and upon such reasonable notice to the public and 

to the individual or entity excluded as may be specified in regulations consistent with paragraph (2). 

(2)(A) Except as provided in subparagraph (B), such an exclusion 

shall be effective with respect to services furnished to an individual 

on or after the effective date of the exclusion. 

(B) Unless the Secretary determines that the health and safety 

of individuals receiving services warrants the exclusion taking effect earlier, an exclusion shall not apply to payments made under 

title XVIII or under a State health care program for— 

(i) inpatient institutional services furnished to an individual 

who was admitted to such institution before the date of the exclusion, or 

(ii) home health services and hospice care furnished to an individual under a plan of care established before the date of the 

exclusion, 

until the passage of 30 days after the effective date of the exclusion. 

(3)(A) The Secretary shall specify, in the notice of exclusion 

under paragraph (1) and the written notice under section 1128A, 

the minimum period (or, in the case of an exclusion of an individual under subsection (b)(12) or in the case described in subparagraph (G), the period) of the exclusion. 

(B) Subject to subparagraph (G), in the case of an exclusion 

under subsection (a), the minimum period of exclusion shall be not 

less than five years, except that, upon the request of the administrator of a Federal health care program (as defined in section 

1128B(f)) who determines that the exclusion would impose a hardship on beneficiaries (as defined in section 1128A(i)(5)) of that program, the Secretary may, after consulting with the Inspector General of the Department of Health and Human Services, waive the 

exclusion under subsection (a)(1), (a)(3), or (a)(4) with respect to 

that program in the case of an individual or entity that is the sole 

community physician or sole source of essential specialized services 


emcdonald on DSK67QTVN1PROD with HEARING
286 

in a community. The Secretary’s decision whether to waive the exclusion shall not be reviewable. 

(C) In the case of an exclusion of an individual under subsection 

(b)(12), the period of the exclusion shall be equal to the sum of— 

(i) the length of the period in which the individual failed to 

grant the immediate access described in that subsection, and 

(ii) an additional period, not to exceed 90 days, set by the 

Secretary. 

(D) Subject to subparagraph (G), in the case of an exclusion of 

an individual or entity under paragraph (1), (2), or (3) of subsection 

(b), the period of the exclusion shall be 3 years, unless the Secretary determines in accordance with published regulations that a 

shorter period is appropriate because of mitigating circumstances 

or that a longer period is appropriate because of aggravating circumstances. 

(E) In the case of an exclusion of an individual or entity under 

subsection (b)(4) or (b)(5), the period of the exclusion shall not be 

less than the period during which the individual’s or entity’s license to provide health care is revoked, suspended, or surrendered, 

or the individual or the entity is excluded or suspended from a Federal or State health care program. 

(F) In the case of an exclusion of an individual or entity under 

subsection (b)(6)(B), the period of the exclusion shall be not less 

than 1 year. 

(G) In the case of an exclusion of an individual under subsection 

(a) based on a conviction occurring on or after the date of the enactment of this subparagraph, if the individual has (before, on, or 

after such date) been convicted— 

(i) on one previous occasion of one or more offenses for which 

an exclusion may be effected under such subsection, the period 

of the exclusion shall be not less than 10 years, or 

(ii) on 2 or more previous occasions of one or more offenses 

for which an exclusion may be effected under such subsection, 

the period of the exclusion shall be permanent. 

(d) NOTICE TO STATE AGENCIES AND EXCLUSION UNDER STATE

HEALTH CARE PROGRAMS.—(1) Subject to paragraph (3), the Secretary shall exercise the authority under this section and section 

1128A in a manner that results in an individual’s or entity’s exclusion from all the programs under title XVIII and all the State 

health care programs in which the individual or entity may otherwise participate. 

(2) The Secretary shall promptly notify each appropriate State 

agency administering or supervising the administration of each 

State health care program (and, in the case of an exclusion effected 

pursuant to subsection (a) and to which section 304(a)(5) of the 

Controlled Substances Act may apply, the Attorney General)— 

(A) of the fact and circumstances of each exclusion effected 

against an individual or entity under this section or section 

1128A, and 

(B) of the period (described in paragraph (3)) for which the 

State agency is directed to exclude the individual or entity 

from participation in the State health care program. 

(3)(A) Except as provided in subparagraph (B), the period of the 

exclusion under a State health care program under paragraph (2) 

shall be the same as any period of exclusion under title XVIII. 


emcdonald on DSK67QTVN1PROD with HEARING
287 

(B)(i) The Secretary may waive an individual’s or entity’s exclusion under a State health care program under paragraph (2) if the 

Secretary receives and approves a request for the waiver with respect to the individual or entity from the State agency administering or supervising the administration of the program. 

(ii) A State health care program may provide for a period of exclusion which is longer than the period of exclusion under title 

XVIII. 

(e) NOTICE TO STATE LICENSING AGENCIES.—The Secretary 

shall— 

(1) promptly notify the appropriate State or local agency or 

authority having responsibility for the licensing or certification 

of an individual or entity excluded (or directed to be excluded) 

from participation under this section or section 1128A, of the 

fact and circumstances of the exclusion, 

(2) request that appropriate investigations be made and 

sanctions invoked in accordance with applicable State law and 

policy, and 

(3) request that the State or local agency or authority keep 

the Secretary and the Inspector General of the Department of 

Health and Human Services fully and currently informed with 

respect to any actions taken in response to the request. 

(f) NOTICE, HEARING, AND JUDICIAL REVIEW.—(1) Subject to paragraph (2), any individual or entity that is excluded (or directed to 

be excluded) from participation under this section is entitled to reasonable notice and opportunity for a hearing thereon by the Secretary to the same extent as is provided in section 205(b), and to 

judicial review of the Secretary’s final decision after such hearing 

as is provided in section 205(g), except that, in so applying such 

sections and section 205(l), any reference therein to the Commissioner of Social Security or the Social Security Administration shall 

be considered a reference to the Secretary or the Department of 

Health and Human Services, respectively. 

(2) Unless the Secretary determines that the health or safety of 

individuals receiving services warrants the exclusion taking effect 

earlier, any individual or entity that is the subject of an adverse 

determination under subsection (b)(7) shall be entitled to a hearing 

by an administrative law judge (as provided under section 205(b)) 

on the determination under subsection (b)(7) before any exclusion 

based upon the determination takes effect. 

(3) The provisions of section 205(h) shall apply with respect to 

this section and sections 1128A, 1129, and 1156 to the same extent 

as it is applicable with respect to title II, except that, in so applying such section and section 205(l), any reference therein to the 

Commissioner of Social Security shall be considered a reference to 

the Secretary. 

(4) The provisions of subsections (d) and (e) of section 205 

shall apply with respect to this section to the same extent as 

they are applicable with respect to title II. The Secretary may 

delegate the authority granted by section 205(d) (as made applicable to this section) to the Inspector General of the Department of Health and Human Services for purposes of any investigation under this section. 

(g) APPLICATION FOR TERMINATION OF EXCLUSION.—(1) An individual or entity excluded (or directed to be excluded) from particiVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00293 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
288 

pation under this section or section 1128A may apply to the Secretary, in the manner specified by the Secretary in regulations and 

at the end of the minimum period of exclusion provided under subsection (c)(3) and at such other times as the Secretary may provide, 

for termination of the exclusion effected under this section or section 1128A. 

(2) The Secretary may terminate the exclusion if the Secretary 

determines, on the basis of the conduct of the applicant which occurred after the date of the notice of exclusion or which was unknown to the Secretary at the time of the exclusion, that— 

(A) there is no basis under subsection (a) or (b) or section 

1128A(a) for a continuation of the exclusion, and 

(B) there are reasonable assurances that the types of actions 

which formed the basis for the original exclusion have not recurred and will not recur. 

(3) The Secretary shall promptly notify each appropriate State 

agency administering or supervising the administration of each 

State health care program (and, in the case of an exclusion effected 

pursuant to subsection (a) and to which section 304(a)(5) of the 

Controlled Substances Act may apply, the Attorney General) of the 

fact and circumstances of each termination of exclusion made 

under this subsection. 

(h) DEFINITION OF STATE HEALTH CARE PROGRAM.—For purposes 

of this section and sections 1128A and 1128B, the term ‘‘State 

health care program’’ means— 

(1) a State plan approved under title XIX, 

(2) any program receiving funds under title V or from an allotment to a State under such title, or 

ø(3) any program receiving funds under subtitle 1 of title XX 

or from an allotment to a State under such subtitle, or¿ 

ø(4)¿ (3) a State child health plan approved under title XXI. 

(i) CONVICTED DEFINED.—For purposes of subsections (a) and (b), 

an individual or entity is considered to have been ‘‘convicted’’ of a 

criminal offense— 

(1) when a judgment of conviction has been entered against 

the individual or entity by a Federal, State, or local court, regardless of whether there is an appeal pending or whether the 

judgment of conviction or other record relating to criminal conduct has been expunged; 

(2) when there has been a finding of guilt against the individual or entity by a Federal, State, or local court; 

(3) when a plea of guilty or nolo contendere by the individual 

or entity has been accepted by a Federal, State, or local court; 

or 

(4) when the individual or entity has entered into participation in a first offender, deferred adjudication, or other arrangement or program where judgment of conviction has been withheld. 

(j) DEFINITION OF IMMEDIATE FAMILY MEMBER AND MEMBER OF

HOUSEHOLD.—For purposes of subsection (b)(8)(A)(iii): 

(1) The term ‘‘immediate family member’’ means, with respect to a person— 

(A) the husband or wife of the person; 

(B) the natural or adoptive parent, child, or sibling of 

the person; 


emcdonald on DSK67QTVN1PROD with HEARING
289 

(C) the stepparent, stepchild, stepbrother, or stepsister 

of the person; 

(D) the father-, mother-, daughter-, son-, brother-, or sister-in-law of the person; 

(E) the grandparent or grandchild of the person; and 

(F) the spouse of a grandparent or grandchild of the person. 

(2) The term ‘‘member of the household’’ means, with respect 

to any person, any individual sharing a common abode as part 

of a single family unit with the person, including domestic employees and others who live together as a family unit, but not 

including a roomer or boarder. 

CIVIL MONETARY PENALTIES

SEC. 1128A. (a) Any person (including an organization, agency, 

or other entity, but excluding a beneficiary, as defined in subsection (i)(5)) that— 

(1) knowingly presents or causes to be presented to an officer, employee, or agent of the United States, or of any department or agency thereof, or of any State agency (as defined in 

subsection (i)(1)), a claim (as defined in subsection (i)(2)) that 

the Secretary determines— 

(A) is for a medical or other item or service that the person knows or should know was not provided as claimed, including any person who engages in a pattern or practice of 

presenting or causing to be presented a claim for an item 

or service that is based on a code that the person knows 

or should know will result in a greater payment to the person than the code the person knows or should know is applicable to the item or service actually provided, 

(B) is for a medical or other item or service and the person knows or should know the claim is false or fraudulent, 

(C) is presented for a physician’s service (or an item or 

service incident to a physician’s service) by a person who 

knows or should know that the individual who furnished 

(or supervised the furnishing of) the service— 

(i) was not licensed as a physician, 

(ii) was licensed as a physician, but such license had 

been obtained through a misrepresentation of material 

fact (including cheating on an examination required 

for licensing), or 

(iii) represented to the patient at the time the service was furnished that the physician was certified in 

a medical specialty by a medical specialty board when 

the individual was not so certified, 

(D) is for a medical or other item or service furnished 

during a period in which the person was excluded from the 

program under which the claim was made pursuant to a 

determination by the Secretary under this section or under 

section 1128, 1156, 1160(b) (as in effect on September 2, 

1982), 1862(d) (as in effect on the date of the enactment 

of the Medicare and Medicaid Patient and Program Protection Act of 1987), or 1866(b) or as a result of the application of the provisions of section 1842(j)(2), or 


emcdonald on DSK67QTVN1PROD with HEARING
290 

(E) is for a pattern of medical or other items or services 

that a person knows or should know are not medically necessary; 

(2) knowingly presents or causes to be presented to any person a request for payment which is in violation of the terms 

of (A) an assignment under section 1842(b)(3)(B)(ii), or (B) an 

agreement with a State agency (or other requirement of a 

State plan under title XIX) not to charge a person for an item 

or service in excess of the amount permitted to be charged, or 

(C) an agreement to be a participating physician or supplier 

under section 1842(h)(1), or (D) an agreement pursuant to section 1866(a)(1)(G); 

(3) knowingly gives or causes to be given to any person, with 

respect to coverage under title XVIII of inpatient hospital services subject to the provisions of section 1886, information that 

he knows or should know is false or misleading, and that could 

reasonably be expected to influence the decision when to discharge such person or another individual from the hospital; 

(4) in the case of a person who is not an organization, agency, or other entity, is excluded from participating in a program 

under title XVIII or a State health care program in accordance 

with this subsection or under section 1128 and who, at the 

time of a violation of this subsection— 

(A) retains a direct or indirect ownership or control interest in an entity that is participating in a program under 

title XVIII or a State health care program, and who knows 

or should know of the action constituting the basis for the 

exclusion; or 

(B) is an officer or managing employee (as defined in section 1126(b)) of such an entity; 

(5) offers to or transfers remuneration to any individual eligible for benefits under title XVIII of this Act, or under a State 

health care program (as defined in section 1128(h)) that such 

person knows or should know is likely to influence such individual to order or receive from a particular provider, practitioner, or supplier any item or service for which payment may 

be made, in whole or in part, under title XVIII, or a State 

health care program (as so defined); 

(6) arranges or contracts (by employment or otherwise) with 

an individual or entity that the person knows or should know 

is excluded from participation in a Federal health care program (as defined in section 1128B(f)), for the provision of items 

or services for which payment may be made under such a program; 

(7) commits an act described in paragraph (1) or (2) of section 1128B(b); 

(8) knowingly makes, uses, or causes to be made or used, a 

false record or statement material to a false or fraudulent 

claim for payment for items and services furnished under a 

Federal health care program; or 

(9) fails to grant timely access, upon reasonable request (as 

defined by the Secretary in regulations), to the Inspector General of the Department of Health and Human Services, for the 

purpose of audits, investigations, evaluations, or other statuVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00296 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
291 

tory functions of the Inspector General of the Department of 

Health and Human Services; 

(8) orders or prescribes a medical or other item or service 

during a period in which the person was excluded from a Federal health care program (as so defined), in the case where the 

person knows or should know that a claim for such medical or 

other item or service will be made under such a program; 

(9) knowingly makes or causes to be made any false statement, omission, or misrepresentation of a material fact in any 

application, bid, or contract to participate or enroll as a provider of services or a supplier under a Federal health care program (as so defined), including Medicare Advantage organizations under part C of title XVIII, prescription drug plan sponsors under part D of title XVIII, medicaid managed care organizations under title XIX, and entities that apply to participate 

as providers of services or suppliers in such managed care organizations and such plans; 

(10) knows of an overpayment (as defined in paragraph (4) 

of section 1128J(d)) and does not report and return the overpayment in accordance with such section; 

shall be subject, in addition to any other penalties that may be prescribed by law, to a civil money penalty of not more than $10,000 

for each item or service (or, in cases under paragraph (3), $15,000 

for each individual with respect to whom false or misleading information was given; in cases under paragraph (4), $10,000 for each 

day the prohibited relationship occurs; in cases under paragraph 

(7), $50,000 for each such act; or in cases under paragraph (9), 

$50,000 for each false statement or misrepresentation of a material 

fact). In addition, such a person shall be subject to an assessment 

of not more than 3 times the amount claimed for each such item 

or service in lieu of damages sustained by the United States or a 

State agency because of such claim (or, in cases under paragraph 

(7), damages of not more than 3 times the total amount of remuneration offered, paid, solicited, or received, without regard to 

whether a portion of such remuneration was offered, paid, solicited, 

or received for a lawful purpose; or in cases under paragraph (9), 

an assessment of not more than 3 times the total amount claimed 

for each item or service for which payment was made based upon 

the application containing the false statement or misrepresentation 

of a material fact). In addition the Secretary may make a determination in the same proceeding to exclude the person from participation in the Federal health care programs (as defined in section 1128B(f)(1)) and to direct the appropriate State agency to exclude the person from participation in any State health care program. 

(b)(1) If a hospital or a critical access hospital knowingly makes 

a payment, directly or indirectly, to a physician as an inducement 

to reduce or limit medically necessary services provided with respect to individuals who— 

(A) are entitled to benefits under part A or part B of title 

XVIII or to medical assistance under a State plan approved 

under title XIX, and 

(B) are under the direct care of the physician, 

the hospital or a critical access hospital shall be subject, in addition 

to any other penalties that may be prescribed by law, to a civil 


emcdonald on DSK67QTVN1PROD with HEARING
292 

money penalty of not more than $2,000 for each such individual 

with respect to whom the payment is made. 

(2) Any physician who knowingly accepts receipt of a payment 

described in paragraph (1) shall be subject, in addition to any other 

penalties that may be prescribed by law, to a civil money penalty 

of not more than $2,000 for each individual described in such paragraph with respect to whom the payment is made. 

(3)(A) Any physician who executes a document described in subparagraph (B) with respect to an individual knowing that all of the 

requirements referred to in such subparagraph are not met with 

respect to the individual shall be subject to a civil monetary penalty of not more than the greater of— 

(i) $5,000, or 

(ii) three times the amount of the payments under title XVIII 

for home health services which are made pursuant to such certification. 

(B) A document described in this subparagraph is any document 

that certifies, for purposes of title XVIII, that an individual meets 

the requirements of section 1814(a)(2)(C) or 1835(a)(2)(A) in the 

case of home health services furnished to the individual. 

(c)(1) The Secretary may initiate a proceeding to determine 

whether to impose a civil money penalty, assessment, or exclusion 

under subsection (a) or (b) only as authorized by the Attorney General pursuant to procedures agreed upon by them. The Secretary 

may not initiate an action under this section with respect to any 

claim, request for payment, or other occurrence described in this 

section later than six years after the date the claim was presented, 

the request for payment was made, or the occurrence took place. 

The Secretary may initiate an action under this section by serving 

notice of the action in any manner authorized by Rule 4 of the Federal Rules of Civil Procedure. 

(2) The Secretary shall not make a determination adverse to any 

person under subsection (a) or (b) until the person has been given 

written notice and an opportunity for the determination to be made 

on the record after a hearing at which the person is entitled to be 

represented by counsel, to present witnesses, and to cross-examine 

witnesses against the person. 

(3) In a proceeding under subsection (a) or (b) which— 

(A) is against a person who has been convicted (whether 

upon a verdict after trial or upon a plea of guilty or nolo 

contendere) of a Federal crime charging fraud or false statements, and 

(B) involves the same transaction as in the criminal action, 

the person is estopped from denying the essential elements of 

the criminal offense. 

(4) The official conducting a hearing under this section may sanction a person, including any party or attorney, for failing to comply 

with an order or procedure, failing to defend an action, or other 

misconduct as would interfere with the speedy, orderly, or fair conduct of the hearing. Such sanction shall reasonably relate to the severity and nature of the failure or misconduct. Such sanction may 

include— 

(A) in the case of refusal to provide or permit discovery, 

drawing negative factual inferences or treating such refusal as 


emcdonald on DSK67QTVN1PROD with HEARING
293 

an admission by deeming the matter, or certain facts, to be established, 

(B) prohibiting a party from introducing certain evidence or 

otherwise supporting a particular claim or defense, 

(C) striking pleadings, in whole or in part, 

(D) staying the proceedings, 

(E) dismissal of the action, 

(F) entering a default judgment, 

(G) ordering the party or attorney to pay attorneys’ fees and 

other costs caused by the failure or misconduct, and 

(H) refusing to consider any motion or other action which is 

not filed in a timely manner. 

(d) In determining the amount or scope of any penalty, assessment, or exclusion imposed pursuant to subsection (a) or (b), the 

Secretary shall take into account— 

(1) the nature of claims and the circumstances under which 

they were presented, 

(2) the degree of culpability, history of prior offenses, and financial condition of the person presenting the claims, and 

(3) such other matters as justice may require. 

(e) Any person adversely affected by a determination of the Secretary under this section may obtain a review of such determination in the United States Court of Appeals for the circuit in which 

the person resides, or in which the claim was presented, by filing 

in such court (within sixty days following the date the person is notified of the Secretary’s determination) a written petition requesting that the determination be modified or set aside. A copy of the 

petition shall be forthwith transmitted by the clerk of the court to 

the Secretary, and thereupon the Secretary shall file in the Court 

the record in the proceeding as provided in section 2112 of title 28, 

United States Code. Upon such filing, the court shall have jurisdiction of the proceeding and of the question determined therein, and 

shall have the power to make and enter upon the pleadings, testimony, and proceedings set forth in such record a decree affirming, 

modifying, remanding for further consideration, or setting aside, in 

whole or in part, the determination of the Secretary and enforcing 

the same to the extent that such order is affirmed or modified. No 

objection that has not been urged before the Secretary shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances. 

The findings of the Secretary with respect to questions of fact, if 

supported by substantial evidence on the record considered as a 

whole, shall be conclusive. If any party shall apply to the court for 

leave to adduce additional evidence and shall show to the satisfaction of the court that such additional evidence is material and that 

there were reasonable grounds for the failure to adduce such evidence in the hearing before the Secretary, the court may order such 

additional evidence to be taken before the Secretary and to be 

made a part of the record. The Secretary may modify his findings 

as to the facts, or make new findings, by reason of additional evidence so taken and filed, and he shall file with the court such 

modified or new findings, which findings with respect to questions 

of fact, if supported by substantial evidence on the record considered as a whole, shall be conclusive, and his recommendations, if 

any, for the modification or setting aside of his original order. Upon 


emcdonald on DSK67QTVN1PROD with HEARING
294 

the filing of the record with it, the jurisdiction of the court shall 

be exclusive and its judgment and decree shall be final, except that 

the same shall be subject to review by the Supreme Court of the 

United States, as provided in section 1254 of title 28, United States 

Code. 

(f) Civil money penalties and assessments imposed under this 

section may be compromised by the Secretary and may be recovered in a civil action in the name of the United States brought in 

United States district court for the district where the claim was 

presented, or where the claimant resides, as determined by the 

Secretary. Amounts recovered under this section shall be paid to 

the Secretary and disposed of as follows: 

(1)(A) In the case of amounts recovered arising out of a claim 

under title XIX, there shall be paid to the State agency an 

amount bearing the same proportion to the total amount recovered as the State’s share of the amount paid by the State agency for such claim bears to the total amount paid for such claim. 

(B) In the case of amounts recovered arising out of a claim 

under an allotment to a State under title V, there shall be paid 

to the State agency an amount equal to three-sevenths of the 

amount recovered. 

(2) Such portion of the amounts recovered as is determined 

to have been paid out of the trust funds under sections 1817 

and 1841 shall be repaid to such trust funds. 

(3) With respect to amounts recovered arising out of a claim 

under a Federal health care program (as defined in section 

1128B(f)), the portion of such amounts as is determined to 

have been paid by the program shall be repaid to the program, 

and the portion of such amounts attributable to the amounts 

recovered under this section by reason of the amendments 

made by the Health Insurance Portability and Accountability 

Act of 1996 (as estimated by the Secretary) shall be deposited 

into the Federal Hospital Insurance Trust Fund pursuant to 

section 1817(k)(2)(C). 

(4) The remainder of the amounts recovered shall be deposited as miscellaneous receipts of the Treasury of the United 

States. 

The amount of such penalty or assessment, when finally determined, or the amount agreed upon in compromise, may be deducted 

from any sum then or later owing by the United States or a State 

agency to the person against whom the penalty or assessment has 

been assessed. 

(g) A determination by the Secretary to impose a penalty, assessment, or exclusion under subsection (a) or (b) shall be final upon 

the expiration of the sixty-day period referred to in subsection (e). 

Matters that were raised or that could have been raised in a hearing before the Secretary or in an appeal pursuant to subsection (e) 

may not be raised as a defense to a civil action by the United 

States to collect a penalty, assessment, or exclusion assessed under 

this section. 

(h) Whenever the Secretary’s determination to impose a penalty, 

assessment, or exclusion under subsection (a) or (b) becomes final, 

he shall notify the appropriate State or local medical or professional organization, the appropriate State agency or agencies administering or supervising the administration of State health care 


emcdonald on DSK67QTVN1PROD with HEARING
295 

programs (as defined in section 1128(h)), and the appropriate utilization and quality control peer review organization, and the appropriate State or local licensing agency or organization (including the 

agency specified in section 1864(a) and 1902(a)(33)) that such a 

penalty, assessment, or exclusion has become final and the reasons 

therefor. 

(i) For the purposes of this section: 

(1) The term ‘‘State agency’’ means the agency established or 

designated to administer or supervise the administration of the 

State plan under title XIX of this Act or designated to administer the State’s program under title V øor subtitle 1 of title 

XX¿ of this Act. 

(2) The term ‘‘claim’’ means an application for payments for 

items and services under a Federal health care program (as defined in section 1128B(f)). 

(3) The term ‘‘item or service’’ includes (A) any particular 

item, device, medical supply, or service claimed to have been 

provided to a patient and listed in an itemized claim for payment, and (B) in the case of a claim based on costs, any entry 

in the cost report, books of account or other documents supporting such claim. 

(4) The term ‘‘agency of the United States’’ includes any contractor acting as a fiscal intermediary, carrier, or fiscal agent 

or any other claims processing agent for a Federal health care 

program (as so defined). 

(5) The term ‘‘beneficiary’’ means an individual who is eligible to receive items or services for which payment may be 

made under a Federal health care program (as so defined) but 

does not include a provider, supplier, or practitioner. 

(6) The term ‘‘remuneration’’ includes the waiver of coinsurance and deductible amounts (or any part thereof), and transfers of items or services for free or for other than fair market 

value. The term ‘‘remuneration’’ does not include— 

(A) the waiver of coinsurance and deductible amounts by 

a person, if— 

(i) the waiver is not offered as part of any advertisement or solicitation; 

(ii) the person does not routinely waive coinsurance 

or deductible amounts; and 

(iii) the person— 

(I) waives the coinsurance and deductible 

amounts after determining in good faith that the 

individual is in financial need; or 

(II) fails to collect coinsurance or deductible 

amounts after making reasonable collection efforts; 

(B) subject to subsection (n), any permissible practice described in any subparagraph of section 1128B(b)(3) or in 

regulations issued by the Secretary; 

(C) differentials in coinsurance and deductible amounts 

as part of a benefit plan design as long as the differentials 

have been disclosed in writing to all beneficiaries, third 

party payers, and providers, to whom claims are presented 

and as long as the differentials meet the standards as defined in regulations promulgated by the Secretary not later 


emcdonald on DSK67QTVN1PROD with HEARING
296 

than 180 days after the date of the enactment of the 

Health Insurance Portability and Accountability Act of 

1996; 

(D) incentives given to individuals to promote the delivery of preventive care as determined by the Secretary in 

regulations so promulgated; 

(E) a reduction in the copayment amount for covered 

OPD services under section 1833(t)(5)(B); 

(F) any other remuneration which promotes access to 

care and poses a low risk of harm to patients and Federal 

health care programs (as defined in section 1128B(f) and 

designated by the Secretary under regulations); 

(G) the offer or transfer of items or services for free or 

less than fair market value by a person, if— 

(i) the items or services consist of coupons, rebates, 

or other rewards from a retailer; 

(ii) the items or services are offered or transferred 

on equal terms available to the general public, regardless of health insurance status; and 

(iii) the offer or transfer of the items or services is 

not tied to the provision of other items or services reimbursed in whole or in part by the program under 

title XVIII or a State health care program (as defined 

in section 1128(h)); 

(H) the offer or transfer of items or services for free or 

less than fair market value by a person, if— 

(i) the items or services are not offered as part of 

any advertisement or solicitation; 

(ii) the items or services are not tied to the provision 

of other services reimbursed in whole or in part by the 

program under title XVIII or a State health care program (as so defined); 

(iii) there is a reasonable connection between the 

items or services and the medical care of the individual; and 

(iv) the person provides the items or services after 

determining in good faith that the individual is in financial need; or 

(I) effective on a date specified by the Secretary (but not 

earlier than January 1, 2011), the waiver by a PDP sponsor of a prescription drug plan under part D of title XVIII 

or an MA organization offering an MA–PD plan under part 

C of such title of any copayment for the first fill of a covered part D drug (as defined in section 1860D–2(e)) that 

is a generic drug for individuals enrolled in the prescription drug plan or MA–PD plan, respectively. 

(7) The term ‘‘should know’’ means that a person, with respect to information— 

(A) acts in deliberate ignorance of the truth or falsity of 

the information; or 

(B) acts in reckless disregard of the truth or falsity of 

the information, 

and no proof of specific intent to defraud is required. 

(j)(1) The provisions of subsections (d) and (e) of section 205 shall 

apply with respect to this section to the same extent as they are 


emcdonald on DSK67QTVN1PROD with HEARING
297 

applicable with respect to title II. The Secretary may delegate the 

authority granted by section 205(d) (as made applicable to this section) to the Inspector General of the Department of Health and 

Human Services for purposes of any investigation under this section. 

(2) The Secretary may delegate authority granted under this section and under section 1128 to the Inspector General of the Department of Health and Human Services. 

(k) Whenever the Secretary has reason to believe that any person 

has engaged, is engaging, or is about to engage in any activity 

which makes the person subject to a civil monetary penalty under 

this section, the Secretary may bring an action in an appropriate 

district court of the United States (or, if applicable, a United States 

court of any territory) to enjoin such activity, or to enjoin the person from concealing, removing, encumbering, or disposing of assets 

which may be required in order to pay a civil monetary penalty if 

any such penalty were to be imposed or to seek other appropriate 

relief. 

(l) A principal is liable for penalties, assessments, and an exclusion under this section for the actions of the principal’s agent acting within the scope of the agency. 

(m)(1) For purposes of this section, with respect to a Federal 

health care program not contained in this Act, references to the 

Secretary in this section shall be deemed to be references to the 

Secretary or Administrator of the department or agency with jurisdiction over such program and references to the Inspector General 

of the Department of Health and Human Services in this section 

shall be deemed to be references to the Inspector General of the applicable department or agency. 

(2)(A) The Secretary and Administrator of the departments and 

agencies referred to in paragraph (1) may include in any action 

pursuant to this section, claims within the jurisdiction of other 

Federal departments or agencies as long as the following conditions 

are satisfied: 

(i) The case involves primarily claims submitted to the Federal health care programs of the department or agency initiating the action. 

(ii) The Secretary or Administrator of the department or 

agency initiating the action gives notice and an opportunity to 

participate in the investigation to the Inspector General of the 

department or agency with primary jurisdiction over the Federal health care programs to which the claims were submitted. 

(B) If the conditions specified in subparagraph (A) are fulfilled, 

the Inspector General of the department or agency initiating the 

action is authorized to exercise all powers granted under the Inspector General Act of 1978 (5 U.S.C. App.) with respect to the 

claims submitted to the other departments or agencies to the same 

manner and extent as provided in that Act with respect to claims 

submitted to such departments or agencies. 

(n)(1) Subparagraph (B) of subsection (i)(6) shall not apply to a 

practice described in paragraph (2) unless— 

(A) the Secretary, through the Inspector General of the Department of Health and Human Services, promulgates a rule 

authorizing such a practice as an exception to remuneration; 

and 


emcdonald on DSK67QTVN1PROD with HEARING
298 

(B) the remuneration is offered or transferred by a person 

under such rule during the 2-year period beginning on the date 

the rule is first promulgated. 

(2) A practice described in this paragraph is a practice under 

which a health care provider or facility pays, in whole or in part, 

premiums for medicare supplemental policies for individuals entitled to benefits under part A of title XVIII pursuant to section 

226A. 

* * * * * * * 

PERIOD WITHIN WHICH CERTAIN CLAIMS MUST BE FILED

SEC. 1132. (a) Notwithstanding any other provision of this Act 

(but subject to subsection (b)), any claim by a State for payment 

with respect to an expenditure made during any calendar quarter 

by the State— 

(1) in carrying out a State plan approved under title I, IV, 

X, XIV, XVI, øXIX, or XX¿ or XIX of this Act, or 

(2) under any other provision of this Act which provides (on 

an entitlement basis) for Federal financial participation in expenditures made under State plans or programs, 

shall be filed (in such form and manner as the Secretary shall by 

regulations prescribe) within the two-year period which begins on 

the first day of the calendar quarter immediately following such 

calendar quarter; and payment shall not be made under this Act 

on account of any such expenditure if claim therefor is not made 

within such two-year period; except that this subsection shall not 

be applied so as to deny payment with respect to any expenditure 

involving court-ordered retroactive payments or audit exceptions, 

or adjustments to prior year costs. 

(b) The Secretary shall waive the requirement imposed under 

subsection (a) with respect to the filing of any claim if he determines (in accordance with regulations) that there was good cause 

for the failure by the State to file such claim within the period prescribed under subsection (a). Any such waiver shall be only for 

such additional period of time as may be necessary to provide the 

State with a reasonable opportunity to file such claim. A failure to 

file a claim within such time period which is attributable to neglect 

or administrative inadequacies shall be deemed not to be for good 

cause. 

* * * * * * * 

TITLE XIX—GRANTS TO STATES FOR MEDICAL ASSISTANCE 

PROGRAMS 

* * * * * * * 

STATE PLANS FOR MEDICAL ASSISTANCE

SEC. 1902. (a) A State plan for medical assistance must— 

(1) provide that it shall be in effect in all political subdivisions of the State, and, if administered by them, be mandatory 

upon them; 

(2) provide for financial participation by the State equal to 

not less than 40 per centum of the non-Federal share of the expenditures under the plan with respect to which payments 


emcdonald on DSK67QTVN1PROD with HEARING
299 

under section 1903 are authorized by this title; and, effective 

July 1, 1969, provide for financial participation by the State 

equal to all of such non-Federal share or provide for distribution of funds from Federal or State sources, for carrying out 

the State plan, on an equalization or other basis which will assure that the lack of adequate funds from local sources will not 

result in lowering the amount, duration, scope, or quality of 

care and services available under the plan; 

(3) provide for granting an opportunity for a fair hearing before the State agency to any individual whose claim for medical 

assistance under the plan is denied or is not acted upon with 

reasonable promptness; 

(4) provide (A) such methods of administration (including 

methods relating to the establishment and maintenance of personnel standards on a merit basis, except that the Secretary 

shall exercise no authority with respect to the selection, tenure 

of office, and compensation of any individual employed in accordance with such methods, and including provision for utilization of professional medical personnel in the administration 

and, where administered locally, supervision of administration 

of the plan) as are found by the Secretary to be necessary for 

the proper and efficient operation of the plan, (B) for the training and effective use of paid subprofessional staff, with particular emphasis on the full-time or part-time employment of 

recipients and other persons of low income, as community service aides, in the administration of the plan and for the use of 

nonpaid or partially paid volunteers in a social service volunteer program in providing services to applicants and recipients 

and in assisting any advisory committees established by the 

State agency, (C) that each State or local officer, employee, or 

independent contractor who is responsible for the expenditure 

of substantial amounts of funds under the State plan, each individual who formerly was such an officer, employee, or contractor, and each partner of such an officer, employee, or contractor shall be prohibited from committing any act, in relation 

to any activity under the plan, the commission of which, in 

connection with any activity concerning the United States Government, by an officer or employee of the United States Government, an individual who was such an officer or employee, 

or a partner of such an officer or employee is prohibited by section 207 or 208 of title 18, United States Code, and (D) that 

each State or local officer, employee, or independent contractor 

who is responsible for selecting, awarding, or otherwise obtaining items and services under the State plan shall be subject to 

safeguards against conflicts of interest that are at least as 

stringent as the safeguards that apply under section 27 of the 

Office of Federal Procurement Policy Act (41 U.S.C. 423) to 

persons described in subsection (a)(2) of such section of that 

Act; 

(5) either provide for the establishment or designation of a 

single State agency to administer or to supervise the administration of the plan; or provide for the establishment or designation of a single State agency to administer or to supervise the 

administration of the plan, except that the determination of 

eligibility for medical assistance under the plan shall be made 


emcdonald on DSK67QTVN1PROD with HEARING
300 

by the State or local agency administering the State plan approved under title I or XVI (insofar as it relates to the aged) 

if the State is eligible to participate in the State plan program 

established under title XVI, or by the agency or agencies administering the supplemental security income program established under title XVI or the State plan approved under part 

A of title IV if the State is not eligible to participate in the 

State plan program established under title XVI; 

(6) provide that the State agency will make such reports, in 

such form and containing such information, as the Secretary 

may from time to time require, and comply with such provisions as the Secretary may from time to time find necessary 

to assure the correctness and verification of such reports; 

(7) provide— 

(A) safeguards which restrict the use or disclosure of information concerning applicants and recipients to purposes 

directly connected with— 

(i) the administration of the plan; and 

(ii) the exchange of information necessary to certify 

or verify the certification of eligibility of children for 

free or reduced price breakfasts under the Child Nutrition Act of 1966 and free or reduced price lunches 

under the Richard B. Russell National School Lunch 

Act, in accordance with section 9(b) of that Act, using 

data standards and formats established by the State 

agency; and 

(B) that, notwithstanding the Express Lane option under 

subsection (e)(13), the State may enter into an agreement 

with the State agency administering the school lunch program established under the Richard B. Russell National 

School Lunch Act under which the State shall establish 

procedures to ensure that— 

(i) a child receiving medical assistance under the 

State plan under this title whose family income does 

not exceed 133 percent of the poverty line (as defined 

in section 673(2) of the Community Services Block 

Grant Act, including any revision required by such 

section), as determined without regard to any expense, 

block, or other income disregard, applicable to a family 

of the size involved, may be certified as eligible for 

free lunches under the Richard B. Russell National 

School Lunch Act and free breakfasts under the Child 

Nutrition Act of 1966 without further application; and 

(ii) the State agencies responsible for administering 

the State plan under this title, and for carrying out 

the school lunch program established under the Richard B. Russell National School Lunch Act (42 U.S.C. 

1751 et seq.) or the school breakfast program established by section 4 of the Child Nutrition Act of 1966 

(42 U.S.C. 1773), cooperate in carrying out paragraphs 

(3)(F) and (15) of section 9(b) of that Act; 

(8) provide that all individuals wishing to make application 

for medical assistance under the plan shall have opportunity to 

do so, and that such assistance shall be furnished with reasonable promptness to all eligible individuals; 


emcdonald on DSK67QTVN1PROD with HEARING
301 

(9) provide— 

(A) that the State health agency, or other appropriate 

State medical agency (whichever is utilized by the Secretary for the purpose specified in the first sentence of section 1864(a)), shall be responsible for establishing and 

maintaining health standards for private or public institutions in which recipients of medical assistance under the 

plan may receive care or services, 

(B) for the establishment or designation of a State authority or authorities which shall be responsible for establishing and maintaining standards, other than those relating to health, for such institutions, 

(C) that any laboratory services paid for under such plan 

must be provided by a laboratory which meets the applicable requirements of section 1861(e)(9) or paragraphs (16) 

and (17) of section 1861(s), or, in the case of a laboratory 

which is in a rural health clinic, of section 1861(aa)(2)(G), 

and 

(D) that the State maintain a consumer-oriented website 

providing useful information to consumers regarding all 

skilled nursing facilities and all nursing facilities in the 

State, including for each facility, Form 2567 State inspection reports (or a successor form), complaint investigation 

reports, the facility’s plan of correction, and such other information that the State or the Secretary considers useful 

in assisting the public to assess the quality of long term 

care options and the quality of care provided by individual 

facilities; 

(10) provide— 

(A) for making medical assistance available, including at 

least the care and services listed in paragraphs (1) through 

(5), (17), (21), and (28) of section 1905(a), to— 

(i) all individuals— 

(I) who are receiving aid or assistance under 

any plan of the State approved under title I, X, 

XIV, or XVI, or part A or part E of title IV (including individuals eligible under this title by reason 

of section 402(a)(37), 406(h), or 473(b), or considered by the State to be receiving such aid as authorized under section 482(e)(6)), 

(II)(aa) with respect to whom supplemental security income benefits are being paid under title 

XVI (or were being paid as of the date of the enactment of section 211(a) of the Personal Responsibility and Work Opportunity Reconciliation Act 

of 1996 (P.L. 104–193) and would continue to be 

paid but for the enactment of that section), (bb) 

who are qualified severely impaired individuals 

(as defined in section 1905(q)), or (cc) who are 

under 21 years of age and with respect to whom 

supplemental security income benefits would be 

paid under title XVI if subparagraphs (A) and (B) 

of section 1611(c)(7) were applied without regard 

to the phrase ‘‘the first day of the month following’’, 


emcdonald on DSK67QTVN1PROD with HEARING
302 

(III) who are qualified pregnant women or children as defined in section 1905(n), 

(IV) who are described in subparagraph (A) or 

(B) of subsection (l)(1) and whose family income 

does not exceed the minimum income level the 

State is required to establish under subsection 

(l)(2)(A) for such a family; 

(V) who are qualified family members as defined 

in section 1905(m)(1), 

(VI) who are described in subparagraph (C) of 

subsection (l)(1) and whose family income does not 

exceed the income level the State is required to 

establish under subsection (l)(2)(B) for such a family, 

(VII) who are described in subparagraph (D) of 

subsection (l)(1) and whose family income does not 

exceed the income level the State is required to 

establish under subsection (l)(2)(C) for such a family; 

(VIII) beginning January 1, 2014, who are 

under 65 years of age, not pregnant, not entitled 

to, or enrolled for, benefits under part A of title 

XVIII, or enrolled for benefits under part B of title 

XVIII, and are not described in a previous subclause of this clause, and whose income (as determined under subsection (e)(14)) does not exceed 

133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size 

involved, subject to subsection (k); or 

(IX) who— 

(aa) are under 26 years of age; 

(bb) are not described in or enrolled under 

any of subclauses (I) through (VII) of this 

clause or are described in any of such subclauses but have income that exceeds the 

level of income applicable under the State 

plan for eligibility to enroll for medical assistance under such subclause; 

(cc) were in foster care under the responsibility of the State on the date of attaining 18 

years of age or such higher age as the State 

has elected under section 475(8)(B)(iii); and 

(dd) were enrolled in the State plan under 

this title or under a waiver of the plan while 

in such foster care; 

(ii) at the option of the State, to any group or groups 

of individuals described in section 1905(a) (or, in the 

case of individuals described in section 1905(a)(i), to 

any reasonable categories of such individuals) who are 

not individuals described in clause (i) of this subparagraph but— 

(I) who meet the income and resources requirements of the appropriate State plan described in 

clause (i) or the supplemental security income program (as the case may be), 


emcdonald on DSK67QTVN1PROD with HEARING
303 

(II) who would meet the income and resources 

requirements of the appropriate State plan described in clause (i) if their work-related child care 

costs were paid from their earnings rather than by 

a State agency as a service expenditure, 

(III) who would be eligible to receive aid under 

the appropriate State plan described in clause (i) 

if coverage under such plan was as broad as allowed under Federal law, 

(IV) with respect to whom there is being paid, 

or who are eligible, or would be eligible if they 

were not in a medical institution, to have paid 

with respect to them, aid or assistance under the 

appropriate State plan described in clause (i), supplemental security income benefits under title 

XVI, or a State supplementary payment; 

(V) who are in a medical institution for a period 

of not less than 30 consecutive days (with eligibility by reason of this subclause beginning on the 

first day of such period), who meet the resource 

requirements of the appropriate State plan described in clause (i) or the supplemental security 

income program, and whose income does not exceed a separate income standard established by 

the State which is consistent with the limit established under section 1903(f)(4)(C), 

(VI) who would be eligible under the State plan 

under this title if they were in a medical institution, with respect to whom there has been a determination that but for the provision of home or 

community-based services described in subsection 

(c), (d), or (e) of section 1915 they would require 

the level of care provided in a hospital, nursing facility or intermediate care facility for the mentally 

retarded the cost of which could be reimbursed 

under the State plan, and who will receive home 

or community-based services pursuant to a waiver 

granted by the Secretary under subsection (c), (d), 

or (e) of section 1915, 

(VII) who would be eligible under the State plan 

under this title if they were in a medical institution, who are terminally ill, and who will receive 

hospice care pursuant to a voluntary election described in section 1905(o); 

(VIII) who is a child described in section 

1905(a)(i)— 

(aa) for whom there is in effect an adoption 

assistance agreement (other than an agreement under part E of title IV) between the 

State and an adoptive parent or parents, 

(bb) who the State agency responsible for 

adoption assistance has determined cannot be 

placed with adoptive parents without medical 

assistance because such child has special 

needs for medical or rehabilitative care, and 


emcdonald on DSK67QTVN1PROD with HEARING
304 

(cc) who was eligible for medical assistance 

under the State plan prior to the adoption assistance agreement being entered into, or who 

would have been eligible for medical assistance at such time if the eligibility standards 

and methodologies of the State’s foster care 

program under part E of title IV were applied 

rather than the eligibility standards and 

methodologies of the State’s aid to families 

with dependent children program under part 

A of title IV; 

(IX) who are described in subsection (l)(1) and 

are not described in clause (i)(IV), clause (i)(VI), or 

clause (i)(VII); 

(X) who are described in subsection (m)(1); 

(XI) who receive only an optional State supplementary payment based on need and paid on a 

regular basis, equal to the difference between the 

individual’s countable income and the income 

standard used to determine eligibility for such 

supplementary payment (with countable income 

being the income remaining after deductions as 

established by the State pursuant to standards 

that may be more restrictive than the standards 

for supplementary security income benefits under 

title XVI), which are available to all individuals in 

the State (but which may be based on different income standards by political subdivision according 

to cost of living differences), and which are paid 

by a State that does not have an agreement with 

the Commissioner of Social Security under section 

1616 or 1634; 

(XII) who are described in subsection (z)(1) (relating to certain TB-infected individuals); 

(XIII) who are in families whose income is less 

than 250 percent of the income official poverty 

line (as defined by the Office of Management and 

Budget, and revised annually in accordance with 

section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size 

involved, and who but for earnings in excess of the 

limit established under section 1905(q)(2)(B), 

would be considered to be receiving supplemental 

security income (subject, notwithstanding section 

1916, to payment of premiums or other cost-sharing charges (set on a sliding scale based on income) that the State may determine); 

(XIV) who are optional targeted low-income children described in section 1905(u)(2)(B); 

(XV) who, but for earnings in excess of the limit 

established under section 1905(q)(2)(B), would be 

considered to be receiving supplemental security 

income, who is at least 16, but less than 65, years 

of age, and whose assets, resources, and earned or 


emcdonald on DSK67QTVN1PROD with HEARING
305 

unearned income (or both) do not exceed such limitations (if any) as the State may establish; 

(XVI) who are employed individuals with a 

medically improved disability described in section 

1905(v)(1) and whose assets, resources, and 

earned or unearned income (or both) do not exceed 

such limitations (if any) as the State may establish, but only if the State provides medical assistance to individuals described in subclause (XV); 

(XVII) who are independent foster care adolescents (as defined in section 1905(w)(1)), or who are 

within any reasonable categories of such adolescents specified by the State; 

(XVIII) who are described in subsection (aa) (relating to certain breast or cervical cancer patients); 

(XIX) who are disabled children described in 

subsection (cc)(1); 

(XX) beginning January 1, 2014, who are under 

65 years of age and are not described in or enrolled under a previous subclause of this clause, 

and whose income (as determined under subsection (e)(14)) exceeds 133 percent of the poverty 

line (as defined in section 2110(c)(5)) applicable to 

a family of the size involved but does not exceed 

the highest income eligibility level established 

under the State plan or under a waiver of the 

plan, subject to subsection (hh); 

(XXI) who are described in subsection (ii) (relating to individuals who meet certain income standards); or 

(XXII) who are eligible for home and community-based services under needs-based criteria established under paragraph (1)(A) of section 

1915(i), or who are eligible for home and community-based services under paragraph (6) of such 

section, and who will receive home and community-based services pursuant to a State plan 

amendment under such subsection; 

(B) that the medical assistance made available to any individual described in subparagraph (A)— 

(i) shall not be less in amount, duration, or scope 

than the medical assistance made available to any 

other such individual, and 

(ii) shall not be less in amount, duration, or scope 

than the medical assistance made available to individuals not described in subparagraph (A); 

(C) that if medical assistance is included for any group 

of individuals described in section 1905(a) who are not described in subparagraph (A) or (E), then— 

(i) the plan must include a description of (I) the criteria for determining eligibility of individuals in the 

group for such medical assistance, (II) the amount, duration, and scope of medical assistance made available 

to individuals in the group, and (III) the single standVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00311 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
306 

ard to be employed in determining income and resource eligibility for all such groups, and the methodology to be employed in determining such eligibility, 

which shall be no more restrictive than the methodology which would be employed under the supplemental security income program in the case of groups 

consisting of aged, blind, or disabled individuals in a 

State in which such program is in effect, and which 

shall be no more restrictive than the methodology 

which would be employed under the appropriate State 

plan (described in subparagraph (A)(i)) to which such 

group is most closely categorically related in the case 

of other groups; 

(ii) the plan must make available medical assistance— 

(I) to individuals under the age of 18 who (but 

for income and resources) would be eligible for 

medical assistance as an individual described in 

subparagraph (A)(i), and 

(II) to pregnant women, during the course of 

their pregnancy, who (but for income and resources) would be eligible for medical assistance 

as an individual described in subparagraph (A); 

(iii) such medical assistance must include (I) with 

respect to children under 18 and individuals entitled 

to institutional services, ambulatory services, and (II) 

with respect to pregnant women, prenatal care and delivery services; and 

(iv) if such medical assistance includes services in 

institutions for mental diseases or in an intermediate 

care facility for the mentally retarded (or both) for any 

such group, it also must include for all groups covered 

at least the care and services listed in paragraphs (1) 

through (5) and (17) of section 1905(a) or the care and 

services listed in any 7 of the paragraphs numbered 

(1) through (24) of such section; 

(D) for the inclusion of home health services for any individual who, under the State plan, is entitled to nursing 

facility services; 

(E)(i) for making medical assistance available for medicare cost-sharing (as defined in section 1905(p)(3)) for 

qualified medicare beneficiaries described in section 

1905(p)(1); 

(ii) for making medical assistance available for payment 

of medicare cost-sharing described in section 

1905(p)(3)(A)(i) for qualified disabled and working individuals described in section 1905(s); 

(iii) for making medical assistance available for medicare 

cost sharing described in section 1905(p)(3)(A)(ii) subject to 

section 1905(p)(4), for individuals who would be qualified 

medicare beneficiaries described in section 1905(p)(1) but 

for the fact that their income exceeds the income level established by the State under section 1905(p)(2) but is less 

than 110 percent in 1993 and 1994, and 120 percent in 

1995 and years thereafter of the official poverty line (reVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00312 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
307 

ferred to in such section) for a family of the size involved; 

and 

(iv) subject to sections 1933 and 1905(p)(4), for making 

medical assistance available for medicare cost-sharing described in section 1905(p)(3)(A)(ii) for individuals who 

would be qualified medicare beneficiaries described in section 1905(p)(1) but for the fact that their income exceeds 

the income level established by the State under section 

1905(p)(2) and is at least 120 percent, but less than 135 

percent, of the official poverty line (referred to in such section) for a family of the size involved and who are not otherwise eligible for medical assistance under the State plan; 

(F) at the option of a State, for making medical assistance available for COBRA premiums (as defined in subsection (u)(2)) for qualified COBRA continuation beneficiaries described in section 1902(u)(1); and 

(G) that, in applying eligibility criteria of the supplemental security income program under title XVI for purposes of determining eligibility for medical assistance 

under the State plan of an individual who is not receiving 

supplemental security income, the State will disregard the 

provisions of subsections (c) and (e) of section 1613; 

except that (I) the making available of the services described 

in paragraph (4), (14), or (16) of section 1905(a) to individuals 

meeting the age requirements prescribed therein shall not, by 

reason of this paragraph (10), require the making available of 

any such services, or the making available of such services of 

the same amount, duration, and scope, to individuals of any 

other ages, (II) the making available of supplementary medical 

insurance benefits under part B of title XVIII to individuals eligible therefor (either pursuant to an agreement entered into 

under section 1843 or by reason of the payment of premiums 

under such title by the State agency on behalf of such individuals), or provision for meeting part or all of the cost of 

deductibles, cost sharing, or similar charges under part B of 

title XVIII for individuals eligible for benefits under such part, 

shall not, by reason of this paragraph (10), require the making 

available of any such benefits, or the making available of services of the same amount, duration, and scope, to any other individuals, (III) the making available of medical assistance 

equal in amount, duration, and scope to the medical assistance 

made available to individuals described in clause (A) to any 

classification of individuals approved by the Secretary with respect to whom there is being paid, or who are eligible, or would 

be eligible if they were not in a medical institution, to have 

paid with respect to them, a State supplementary payment 

shall not, by reason of this paragraph (10), require the making 

available of any such assistance, or the making available of 

such assistance of the same amount, duration, and scope, to 

any other individuals not described in clause (A), (IV) the imposition of a deductible, cost sharing, or similar charge for any 

item or service furnished to an individual not eligible for the 

exemption under section 1916(a)(2) or (b)(2) shall not require 

the imposition of a deductible, cost sharing, or similar charge 

for the same item or service furnished to an individual who is 


emcdonald on DSK67QTVN1PROD with HEARING
308 

eligible for such exemption, (V) the making available to pregnant women covered under the plan of services relating to 

pregnancy (including prenatal, delivery, and postpartum services) or to any other condition which may complicate pregnancy 

shall not, by reason of this paragraph (10), require the making 

available of such services, or the making available of such services of the same amount, duration, and scope, to any other individuals, provided such services are made available (in the 

same amount, duration, and scope) to all pregnant women covered under the State plan, (VI) with respect to the making 

available of medical assistance for hospice care to terminally ill 

individuals who have made a voluntary election described in 

section 1905(o) to receive hospice care instead of medical assistance for certain other services, such assistance may not be 

made available in an amount, duration, or scope less than that 

provided under title XVIII, and the making available of such 

assistance shall not, by reason of this paragraph (10), require 

the making available of medical assistance for hospice care to 

other individuals or the making available of medical assistance 

for services waived by such terminally ill individuals, (VII) the 

medical assistance made available to an individual described in 

subsection (l)(1)(A) who is eligible for medical assistance only 

because of subparagraph (A)(i)(IV) or (A)(ii)(IX) shall be limited 

to medical assistance for services related to pregnancy (including prenatal, delivery, postpartum, and family planning services) and to other conditions which may complicate pregnancy, 

(VIII) the medical assistance made available to a qualified 

medicare beneficiary described in section 1905(p)(1) who is 

only entitled to medical assistance because the individual is 

such a beneficiary shall be limited to medical assistance for 

medicare cost-sharing (described in section 1905(p)(3)), subject 

to the provisions of subsection (n) and section 1916(b), (IX) the 

making available of respiratory care services in accordance 

with subsection (e)(9) shall not, by reason of this paragraph 

(10), require the making available of such services, or the making available of such services of the same amount, duration, 

and scope, to any individuals not included under subsection 

(e)(9)(A), provided such services are made available (in the 

same amount, duration, and scope) to all individuals described 

in such subsection, (X) if the plan provides for any fixed 

durational limit on medical assistance for inpatient hospital 

services (whether or not such a limit varies by medical condition or diagnosis), the plan must establish exceptions to such 

a limit for medically necessary inpatient hospital services furnished with respect to individuals under one year of age in a 

hospital defined under the State plan, pursuant to section 

1923(a)(1)(A), as a disproportionate share hospital and subparagraph (B) (relating to comparability) shall not be construed as requiring such an exception for other individuals, 

services, or hospitals, (XI) the making available of medical assistance to cover the costs of premiums, deductibles, coinsurance, and other cost-sharing obligations for certain individuals 

for private health coverage as described in section 1906 shall 

not, by reason of paragraph (10), require the making available 

of any such benefits or the making available of services of the 


emcdonald on DSK67QTVN1PROD with HEARING
309 

same amount, duration, and scope of such private coverage to 

any other individuals, (XII) the medical assistance made available to an individual described in subsection (u)(1) who is eligible for medical assistance only because of subparagraph (F) 

shall be limited to medical assistance for COBRA continuation 

premiums (as defined in subsection (u)(2)), (XIII) the medical 

assistance made available to an individual described in subsection (z)(1) who is eligible for medical assistance only because 

of subparagraph (A)(ii)(XII) shall be limited to medical assistance for TB-related services (described in subsection (z)(2)), 

(XIV) the medical assistance made available to an individual 

described in subsection (aa) who is eligible for medical assistance only because of subparagraph (A)(10)(ii)(XVIII) shall be 

limited to medical assistance provided during the period in 

which such an individual requires treatment for breast or cervical cancer (XV) the medical assistance made available to an 

individual described in subparagraph (A)(i)(VIII) shall be limited to medical assistance described in subsection (k)(1), (XVI) 

the medical assistance made available to an individual described in subsection (ii) shall be limited to family planning 

services and supplies described in section 1905(a)(4)(C) including medical diagnosis and treatment services that are provided 

pursuant to a family planning service in a family planning setting and (XVII) if an individual is described in subclause (IX) 

of subparagraph (A)(i) and is also described in subclause (VIII) 

of that subparagraph, the medical assistance shall be made 

available to the individual through subclause (IX) instead of 

through subclause (VIII); 

(11)(A) provide for entering into cooperative arrangements 

with the State agencies responsible for administering or supervising the administration of health services and vocational rehabilitation services in the State looking toward maximum utilization of such services in the provision of medical assistance 

under the plan, (B) provide, to the extent prescribed by the 

Secretary, for entering into agreements, with any agency, institution, or organization receiving payments under (or through 

an allotment under) title V, (i) providing for utilizing such 

agency, institution, or organization in furnishing care and services which are available under such title or allotment and 

which are included in the State plan approved under this section (ii) making such provision as may be appropriate for reimbursing such agency, institution, or organization for the cost of 

any such care and services furnished any individual for which 

payment would otherwise be made to the State with respect to 

the individual under section 1903, and (iii) providing for coordination of information and education on pediatric vaccinations 

and delivery of immunization services, and (C) provide for coordination of the operations under this title, including the provision of information and education on pediatric vaccinations 

and the delivery of immunization services, with the State’s operations under the special supplemental nutrition program for 

women, infants, and children under section 17 of the Child Nutrition Act of 1966; 

(12) provide that, in determining whether an individual is 

blind, there shall be an examination by a physician skilled in 


emcdonald on DSK67QTVN1PROD with HEARING
310 

the diseases of the eye or by an optometrist, whichever the individual may select; 

(13) provide— 

(A) for a public process for determination of rates of payment under the plan for hospital services, nursing facility 

services, and services of intermediate care facilities for the 

mentally retarded under which— 

(i) proposed rates, the methodologies underlying the 

establishment of such rates, and justifications for the 

proposed rates are published, 

(ii) providers, beneficiaries and their representatives, and other concerned State residents are given a 

reasonable opportunity for review and comment on the 

proposed rates, methodologies, and justifications, 

(iii) final rates, the methodologies underlying the establishment of such rates, and justifications for such 

final rates are published, and 

(iv) in the case of hospitals, such rates take into account (in a manner consistent with section 1923) the 

situation of hospitals which serve a disproportionate 

number of low-income patients with special needs; 

(B) for payment for hospice care in amounts no lower 

than the amounts, using the same methodology, used 

under part A of title XVIII and for payment of amounts 

under section 1905(o)(3); except that in the case of hospice 

care which is furnished to an individual who is a resident 

of a nursing facility or intermediate care facility for the 

mentally retarded, and who would be eligible under the 

plan for nursing facility services or services in an intermediate care facility for the mentally retarded if he had 

not elected to receive hospice care, there shall be paid an 

additional amount, to take into account the room and 

board furnished by the facility, equal to at least 95 percent 

of the rate that would have been paid by the State under 

the plan for facility services in that facility for that individual; and 

(C) payment for primary care services (as defined in subsection (jj)) furnished in 2013 and 2014 by a physician 

with a primary specialty designation of family medicine, 

general internal medicine, or pediatric medicine at a rate 

not less than 100 percent of the payment rate that applies 

to such services and physician under part B of title XVIII 

(or, if greater, the payment rate that would be applicable 

under such part if the conversion factor under section 

1848(d) for the year involved were the conversion factor 

under such section for 2009); 

(14) provide that enrollment fees, premiums, or similar 

charges, and deductions, cost sharing, or similar charges, may 

be imposed only as provided in section 1916; 

(15) provide for payment for services described in clause (B) 

or (C) of section 1905(a)(2) under the plan in accordance with 

subsection (bb); 

(16) provide for inclusion, to the extent required by regulations prescribed by the Secretary, of provisions (conforming to 

such regulations) with respect to the furnishing of medical asVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00316 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
311 

sistance under the plan to individuals who are residents of the 

State but are absent therefrom; 

(17) except as provided in subsections (e)(14), (e)(14), (l)(3), 

(m)(3), and (m)(4), include reasonable standards (which shall 

be comparable for all groups and may, in accordance with 

standards prescribed by the Secretary, differ with respect to income levels, but only in the case of applicants or recipients of 

assistance under the plan who are not receiving aid or assistance under any plan of the State approved under title I, X, 

XIV, or XVI, or part A of title IV, and with respect to whom 

supplemental security income benefits are not being paid 

under title XVI, based on the variations between shelter costs 

in urban areas and in rural areas) for determining eligibility 

for and the extent of medical assistance under the plan which 

(A) are consistent with the objectives of this title, (B) provide 

for taking into account only such income and resources as are, 

as determined in accordance with standards prescribed by the 

Secretary, available to the applicant or recipient and (in the 

case of any applicant or recipient who would, except for income 

and resources, be eligible for aid or assistance in the form of 

money payments under any plan of the State approved under 

title I, X, XIV, or XVI, or part A of title IV, or to have paid 

with respect to him supplemental security income benefits 

under title XVI) as would not be disregarded (or set aside for 

future needs) in determining his eligibility for such aid, assistance, or benefits, (C) provide for reasonable evaluation of any 

such income or resources, and (D) do not take into account the 

financial responsibility of any individual for any applicant or 

recipient of assistance under the plan unless such applicant or 

recipient is such individual’s spouse or such individual’s child 

who is under age 21 or (with respect to States eligible to participate in the State program established under title XVI), is 

blind or permanently and totally disabled, or is blind or disabled as defined in section 1614 (with respect to States which 

are not eligible to participate in such program); and provide for 

flexibility in the application of such standards with respect to 

income by taking into account, except to the extent prescribed 

by the Secretary, the costs (whether in the form of insurance 

premiums, payments made to the State under section 

1903(f)(2)(B), or otherwise and regardless of whether such costs 

are reimbursed under another public program of the State or 

political subdivision thereof) incurred for medical care or for 

any other type of remedial care recognized under State law; 

(18) comply with the provisions of section 1917 with respect 

to liens, adjustments and recoveries of medical assistance correctly paid, transfers of assets, and treatment of certain trusts; 

(19) provide such safeguards as may be necessary to assure 

that eligibility for care and services under the plan will be determined, and such care and services will be provided, in a 

manner consistent with simplicity of administration and the 

best interests of the recipients; 

(20) if the State plan includes medical assistance in behalf 

of individuals 65 years of age or older who are patients in institutions for mental diseases— 


emcdonald on DSK67QTVN1PROD with HEARING
312 

(A) provide for having in effect such agreements or other 

arrangements with State authorities concerned with mental diseases, and, where appropriate, with such institutions, as may be necessary for carrying out the State plan, 

including arrangements for joint planning and for development of alternate methods of care, arrangements providing 

assurance of immediate readmittance to institutions where 

needed for individuals under alternate plans of care, and 

arrangements providing for access to patients and facilities, for furnishing information, and for making reports; 

(B) provide for an individual plan for each such patient 

to assure that the institutional care provided to him is in 

his best interests, including, to that end, assurances that 

there will be initial and periodic review of his medical and 

other needs, that he will be given appropriate medical 

treatment within the institution, and that there will be a 

periodic determination of his need for continued treatment 

in the institution; and 

(C) provide for the development of alternate plans of 

care, making maximum utilization of available resources, 

for recipients 65 years of age or older who would otherwise 

need care in such institutions, including appropriate medical treatment and other aid or assistance; for services referred to in section 3(a)(4)(A)(i) and (ii) or section 

1603(a)(4)(A)(i) and (ii) which are appropriate for such recipients and for such patients; and for methods of administration necessary to assure that the responsibilities of the 

State agency under the State plan with respect to such recipients and such patients will be effectively carried out; 

(21) if the State plan includes medical assistance in behalf 

of individuals 65 years of age or older who are patients in public institutions for mental diseases, show that the State is making satisfactory progress toward developing and implementing 

a comprehensive mental health program, including provision 

for utilization of community mental health centers, nursing facilities, and other alternatives to care in public institutions for 

mental diseases; 

(22) include descriptions of (A) the kinds and numbers of 

professional medical personnel and supporting staff that will 

be used in the administration of the plan and of the responsibilities they will have, (B) the standards, for private or public 

institutions in which recipients of medical assistance under the 

plan may receive care or services, that will be utilized by the 

State authority or authorities responsible for establishing and 

maintaining such standards, (C) the cooperative arrangements 

with State health agencies and State vocational rehabilitation 

agencies entered into with a view to maximum utilization of 

and coordination of the provision of medical assistance with 

the services administered or supervised by such agencies, and 

(D) other standards and methods that the State will use to assure that medical or remedial care and services provided to recipients of medical assistance are of high quality; 

(23) provide that (A) any individual eligible for medical assistance (including drugs) may obtain such assistance from any 

institution, agency, community pharmacy, or person, qualified 


emcdonald on DSK67QTVN1PROD with HEARING
313 

to perform the service or services required (including an organization which provides such services, or arranges for their 

availability, on a prepayment basis), who undertakes to provide him such services, and (B) an enrollment of an individual 

eligible for medical assistance in a primary care case-management system (described in section 1915(b)(1)), a medicaid managed care organization, or a similar entity shall not restrict the 

choice of the qualified person from whom the individual may 

receive services under section 1905(a)(4)(C), except as provided 

in subsection (g) and in section 1915, except that this paragraph shall not apply in the case of Puerto Rico, the Virgin Islands, and Guam, and except that nothing in this paragraph 

shall be construed as requiring a State to provide medical assistance for such services furnished by a person or entity convicted of a felony under Federal or State law for an offense 

which the State agency determines is inconsistent with the 

best interests of beneficiaries under the State plan or by a provider or supplier to which a moratorium under subsection 

(kk)(4) is applied during the period of such moratorium’; 

(24) effective July 1, 1969, provide for consultative services 

by health agencies and other appropriate agencies of the State 

to hospitals, nursing facilities, home health agencies, clinics, 

laboratories, and such other institutions as the Secretary may 

specify in order to assist them (A) to qualify for payments 

under this Act, (B) to establish and maintain such fiscal 

records as may be necessary for the proper and efficient administration of this Act, and (C) to provide information needed 

to determine payments due under this Act on account of care 

and services furnished to individuals; 

(25) provide— 

(A) that the State or local agency administering such 

plan will take all reasonable measures to ascertain the 

legal liability of third parties (including health insurers, 

self-insured plans, group health plans (as defined in section 607(1) of the Employee Retirement Income Security 

Act of 1974), service benefit plans, managed care organizations, pharmacy benefit managers, or other parties that 

are, by statute, contract, or agreement, legally responsible 

for payment of a claim for a health care item or service) 

to pay for care and services available under the plan, including— 

(i) the collection of sufficient information (as specified by the Secretary in regulations) to enable the 

State to pursue claims against such third parties, with 

such information being collected at the time of any determination or redetermination of eligibility for medical assistance, and 

(ii) the submission to the Secretary of a plan (subject to approval by the Secretary) for pursuing claims 

against such third parties, which plan shall be integrated with, and be monitored as a part of the Secretary’s review of, the State’s mechanized claims processing and information retrieval systems required 

under section 1903(r); 


emcdonald on DSK67QTVN1PROD with HEARING
314 

(B) that in any case where such a legal liability is found 

to exist after medical assistance has been made available 

on behalf of the individual and where the amount of reimbursement the State can reasonably expect to recover exceeds the costs of such recovery, the State or local agency 

will seek reimbursement for such assistance to the extent 

of such legal liability; 

(C) that in the case of an individual who is entitled to 

medical assistance under the State plan with respect to a 

service for which a third party is liable for payment, the 

person furnishing the service may not seek to collect from 

the individual (or any financially responsible relative or 

representative of that individual) payment of an amount 

for that service (i) if the total of the amount of the liabilities of third parties for that service is at least equal to the 

amount payable for that service under the plan (disregarding section 1916), or (ii) in an amount which exceeds 

the lesser of (I) the amount which may be collected under 

section 1916, or (II) the amount by which the amount payable for that service under the plan (disregarding section 

1916) exceeds the total of the amount of the liabilities of 

third parties for that service; 

(D) that a person who furnishes services and is participating under the plan may not refuse to furnish services 

to an individual (who is entitled to have payment made 

under the plan for the services the person furnishes) because of a third party’s potential liability for payment for 

the service; 

(E) that in the case of prenatal or preventive pediatric 

care (including early and periodic screening and diagnosis 

services under section 1905(a)(4)(B)) covered under the 

State plan, the State shall— 

(i) make payment for such service in accordance 

with the usual payment schedule under such plan for 

such services without regard to the liability of a third 

party for payment for such services; and 

(ii) seek reimbursement from such third party in accordance with subparagraph (B); 

(F) that in the case of any services covered under such 

plan which are provided to an individual on whose behalf 

child support enforcement is being carried out by the State 

agency under part D of title IV of this Act, the State 

shall— 

(i) make payment for such service in accordance 

with the usual payment schedule under such plan for 

such services without regard to any third-party liability for payment for such services, if such third-party 

liability is derived (through insurance or otherwise) 

from the parent whose obligation to pay support is 

being enforced by such agency, if payment has not 

been made by such third party within 30 days after 

such services are furnished; 

(ii) seek reimbursement from such third party in accordance with subparagraph (B); 


emcdonald on DSK67QTVN1PROD with HEARING
315 

(G) that the State prohibits any health insurer (including a group health plan, as defined in section 607(1) of the 

Employee Retirement Income Security Act of 1974, a selfinsured plan, a service benefit plan, a managed care organization, a pharmacy benefit manager, or other party that 

is, by statute, contract, or agreement, legally responsible 

for payment of a claim for a health care item or service), 

in enrolling an individual or in making any payments for 

benefits to the individual or on the individual’s behalf, 

from taking into account that the individual is eligible for 

or is provided medical assistance under a plan under this 

title for such State, or any other State; 

(H) that to the extent that payment has been made 

under the State plan for medical assistance in any case 

where a third party has a legal liability to make payment 

for such assistance, the State has in effect laws under 

which, to the extent that payment has been made under 

the State plan for medical assistance for health care items 

or services furnished to an individual, the State is considered to have acquired the rights of such individual to payment by any other party for such health care items or 

services; and 

(I) that the State shall provide assurances satisfactory to 

the Secretary that the State has in effect laws requiring 

health insurers, including self-insured plans, group health 

plans (as defined in section 607(1) of the Employee Retirement Income Security Act of 1974), service benefit plans, 

managed care organizations, pharmacy benefit managers, 

or other parties that are, by statute, contract, or agreement, legally responsible for payment of a claim for a 

health care item or service, as a condition of doing business in the State, to— 

(i) provide, with respect to individuals who are eligible (and, at State option, individuals who apply or 

whose eligibility for medical assistance is being evaluated in accordance with section 1902(e)(13)(D)) for, or 

are provided, medical assistance under the State plan 

under this title (and, at State option, child health assistance under title XXI), upon the request of the 

State, information to determine during what period 

the individual or their spouses or their dependents 

may be (or may have been) covered by a health insurer and the nature of the coverage that is or was 

provided by the health insurer (including the name, 

address, and identifying number of the plan) in a manner prescribed by the Secretary; 

(ii) accept the State’s right of recovery and the assignment to the State of any right of an individual or 

other entity to payment from the party for an item or 

service for which payment has been made under the 

State plan; 

(iii) respond to any inquiry by the State regarding a 

claim for payment for any health care item or service 

that is submitted not later than 3 years after the date 


emcdonald on DSK67QTVN1PROD with HEARING
316 

of the provision of such health care item or service; 

and 

(iv) agree not to deny a claim submitted by the State 

solely on the basis of the date of submission of the 

claim, the type or format of the claim form, or a failure to present proper documentation at the point-ofsale that is the basis of the claim, if— 

(I) the claim is submitted by the State within 

the 3-year period beginning on the date on which 

the item or service was furnished; and 

(II) any action by the State to enforce its rights 

with respect to such claim is commenced within 6 

years of the State’s submission of such claim; 

(26) if the State plan includes medical assistance for inpatient mental hospital services, provide, with respect to each patient receiving such services, for a regular program of medical 

review (including medical evaluation) of his need for such services, and for a written plan of care; 

(27) provide for agreements with every person or institution 

providing services under the State plan under which such person or institution agrees (A) to keep such records as are necessary fully to disclose the extent of the services provided to 

individuals receiving assistance under the State plan, and (B) 

to furnish the State agency or the Secretary with such information, regarding any payments claimed by such person or institution for providing services under the State plan, as the 

State agency or the Secretary may from time to time request; 

(28) provide— 

(A) that any nursing facility receiving payments under 

such plan must satisfy all the requirements of subsections 

(b) through (d) of section 1919 as they apply to such facilities; 

(B) for including in ‘‘nursing facility services’’ at least 

the items and services specified (or deemed to be specified) 

by the Secretary under section 1919(f)(7) and making 

available upon request a description of the items and services so included; 

(C) for procedures to make available to the public the 

data and methodology used in establishing payment rates 

for nursing facilities under this title; and 

(D) for compliance (by the date specified in the respective sections) with the requirements of— 

(i) section 1919(e); 

(ii) section 1919(g) (relating to responsibility for survey and certification of nursing facilities); and 

(iii) sections 1919(h)(2)(B) and 1919(h)(2)(D) (relating to establishment and application of remedies); 

(29) include a State program which meets the requirements 

set forth in section 1908, for the licensing of administrators of 

nursing homes; 

(30)(A) provide such methods and procedures relating to the 

utilization of, and the payment for, care and services available 

under the plan (including but not limited to utilization review 

plans as provided for in section 1903(i)(4)) as may be necessary 

to safeguard against unnecessary utilization of such care and 


emcdonald on DSK67QTVN1PROD with HEARING
317 

services and to assure that payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist 

enough providers so that care and services are available under 

the plan at least to the extent that such care and services are 

available to the general population in the geographic area; and 

(B) provide, under the program described in subparagraph 

(A), that— 

(i) each admission to a hospital, intermediate care facility for the mentally retarded, or hospital for mental diseases is reviewed or screened in accordance with criteria 

established by medical and other professional personnel 

who are not themselves directly responsible for the care of 

the patient involved, and who do not have a significant financial interest in any such institution and are not, except 

in the case of a hospital, employed by the institution providing the care involved, and 

(ii) the information developed from such review or 

screening, along with the data obtained from prior reviews 

of the necessity for admission and continued stay of patients by such professional personnel, shall be used as the 

basis for establishing the size and composition of the sample of admissions to be subject to review and evaluation by 

such personnel, and any such sample may be of any size 

up to 100 percent of all admissions and must be of sufficient size to serve the purpose of (I) identifying the patterns of care being provided and the changes occurring 

over time in such patterns so that the need for modification may be ascertained, and (II) subjecting admissions to 

early or more extensive review where information indicates that such consideration is warranted to a hospital, 

intermediate care facility for the mentally retarded, or hospital for mental diseases; 

(31) with respect to services in an intermediate care facility 

for the mentally retarded (where the State plan includes medical assistance for such services) provide, with respect to each 

patient receiving such services, for a written plan of care, prior 

to admission to or authorization of benefits in such facility, in 

accordance with regulations of the Secretary, and for a regular 

program of independent professional review (including medical 

evaluation) which shall periodically review his need for such 

services; 

(32) provide that no payment under the plan for any care or 

service provided to an individual shall be made to anyone other 

than such individual or the person or institution providing 

such care or service, under an assignment or power of attorney 

or otherwise; except that— 

(A) in the case of any care or service provided by a physician, dentist, or other individual practitioner, such payment may be made (i) to the employer of such physician, 

dentist, or other practitioner if such physician, dentist, or 

practitioner is required as a condition of his employment 

to turn over his fee for such care or service to his employer, or (ii) (where the care or service was provided in 

a hospital, clinic, or other facility) to the facility in which 

the care or service was provided if there is a contractual 


emcdonald on DSK67QTVN1PROD with HEARING
318 

arrangement between such physician, dentist, or practitioner and such facility under which such facility submits 

the bill for such care or service; 

(B) nothing in this paragraph shall be construed (i) to 

prevent the making of such a payment in accordance with 

an assignment from the person or institution providing the 

care or service involved if such assignment is made to a 

governmental agency or entity or is established by or pursuant to the order of a court of competent jurisdiction, or 

(ii) to preclude an agent of such person or institution from 

receiving any such payment if (but only if) such agent does 

so pursuant to an agency agreement under which the compensation to be paid to the agent for his services for or in 

connection with the billing or collection of payments due 

such person or institution under the plan is unrelated (directly or indirectly) to the amount of such payments or the 

billings therefor, and is not dependent upon the actual collection of any such payment; 

(C) in the case of services furnished (during a period 

that does not exceed 14 continuous days in the case of an 

informal reciprocal arrangement or 90 continuous days (or 

such longer period as the Secretary may provide) in the 

case of an arrangement involving per diem or other fee-fortime compensation) by, or incident to the services of, one 

physician to the patients of another physician who submits 

the claim for such services, payment shall be made to the 

physician submitting the claim (as if the services were furnished by, or incident to, the physician’s services), but only 

if the claim identifies (in a manner specified by the Secretary) the physician who furnished the services; and 

(D) in the case of payment for a childhood vaccine administered before October 1, 1994, to individuals entitled 

to medical assistance under the State plan, the State plan 

may make payment directly to the manufacturer of the 

vaccine under a voluntary replacement program agreed to 

by the State pursuant to which the manufacturer (i) supplies doses of the vaccine to providers administering the 

vaccine, (ii) periodically replaces the supply of the vaccine, 

and (iii) charges the State the manufacturer’s price to the 

Centers for Disease Control and Prevention for the vaccine 

so administered (which price includes a reasonable amount 

to cover shipping and the handling of returns); 

(33) provide— 

(A) that the State health agency, or other appropriate 

State medical agency, shall be responsible for establishing 

a plan, consistent with regulations prescribed by the Secretary, for the review by appropriate professional health 

personnel of the appropriateness and quality of care and 

services furnished to recipients of medical assistance 

under the plan in order to provide guidance with respect 

thereto in the administration of the plan to the State agency established or designated pursuant to paragraph (5) 

and, where applicable, to the State agency described in the 

second sentence of this subsection; and 


emcdonald on DSK67QTVN1PROD with HEARING
319 

(B) that, except as provided in section 1919(g), the State 

or local agency utilized by the Secretary for the purpose 

specified in the first sentence of section 1864(a), or, if such 

agency is not the State agency which is responsible for licensing health institutions, the State agency responsible 

for such licensing, will perform for the State agency administering or supervising the administration of the plan 

approved under this title the function of determining 

whether institutions and agencies meet the requirements 

for participation in the program under such plan, except 

that, if the Secretary has cause to question the adequacy 

of such determinations, the Secretary is authorized to validate State determinations and, on that basis, make independent and binding determinations concerning the extent 

to which individual institutions and agencies meet the requirements for participation; 

(34) provide that in the case of any individual who has been 

determined to be eligible for medical assistance under the plan, 

such assistance will be made available to him for care and 

services included under the plan and furnished in or after the 

third month before the month in which he made application (or 

application was made on his behalf in the case of a deceased 

individual) for such assistance if such individual was (or upon 

application would have been) eligible for such assistance at the 

time such care and services were furnished; 

(35) provide that any disclosing entity (as defined in section 

1124(a)(2)) receiving payments under such plan complies with 

the requirements of section 1124; 

(36) provide that within 90 days following the completion of 

each survey of any health care facility, laboratory, agency, clinic, or organization, by the appropriate State agency described 

in paragraph (9), such agency shall (in accordance with regulations of the Secretary) make public in readily available form 

and place the pertinent findings of each such survey relating 

to the compliance of each such health care facility, laboratory, 

clinic, agency, or organization with (A) the statutory conditions 

of participation imposed under this title, and (B) the major additional conditions which the Secretary finds necessary in the 

interest of health and safety of individuals who are furnished 

care or services by any such facility, laboratory, clinic, agency, 

or organization; 

(37) provide for claims payment procedures which (A) ensure 

that 90 per centum of claims for payment (for which no further 

written information or substantiation is required in order to 

make payment) made for services covered under the plan and 

furnished by health care practitioners through individual or 

group practices or through shared health facilities are paid 

within 30 days of the date of receipt of such claims and that 

99 per centum of such claims are paid within 90 days of the 

date of receipt of such claims, and (B) provide for procedures 

of prepayment and postpayment claims review, including review of appropriate data with respect to the recipient and provider of a service and the nature of the service for which payment is claimed, to ensure the proper and efficient payment of 

claims and management of the program; 


emcdonald on DSK67QTVN1PROD with HEARING
320 

(38) require that an entity (other than an individual practitioner or a group of practitioners) that furnishes, or arranges 

for the furnishing of, items or services under the plan, shall 

supply (within such period as may be specified in regulations 

by the Secretary or by the single State agency which administers or supervises the administration of the plan) upon request specifically addressed to such entity by the Secretary or 

such State agency, the information described in section 

1128(b)(9); 

(39) provide that the State agency shall exclude any specified 

individual or entity from participation in the program under 

the State plan for the period specified by the Secretary, when 

required by him to do so pursuant to section 1128 or section 

1128A, terminate the participation of any individual or entity 

in such program if (subject to such exceptions as are permitted 

with respect to exclusion under sections 1128(c)(3)(B) and 

1128(d)(3)(B)) participation of such individual or entity is terminated under title XVIII or any other State plan under this 

title, and provide that no payment may be made under the 

plan with respect to any item or service furnished by such individual or entity during such period; 

(40) require each health services facility or organization 

which receives payments under the plan and of a type for 

which a uniform reporting system has been established under 

section 1121(a) to make reports to the Secretary of information 

described in such section in accordance with the uniform reporting system (established under such section) for that type of 

facility or organization; 

(41) provide that whenever a provider of services or any 

other person is terminated, suspended, or otherwise sanctioned 

or prohibited from participating under the State plan, the 

State agency shall promptly notify the Secretary and, in the 

case of a physician and notwithstanding paragraph (7), the 

State medical licensing board of such action; 

(42) provide that— 

(A) the records of any entity participating in the plan 

and providing services reimbursable on a cost-related basis 

will be audited as the Secretary determines to be necessary to insure that proper payments are made under the 

plan; and 

(B) not later than December 31, 2010, the State shall— 

(i) establish a program under which the State contracts (consistent with State law and in the same 

manner as the Secretary enters into contracts with recovery audit contractors under section 1893(h), subject 

to such exceptions or requirements as the Secretary 

may require for purposes of this title or a particular 

State) with 1 or more recovery audit contractors for 

the purpose of identifying underpayments and overpayments and recouping overpayments under the 

State plan and under any waiver of the State plan 

with respect to all services for which payment is made 

to any entity under such plan or waiver; and 

(ii) provide assurances satisfactory to the Secretary 

that— 


emcdonald on DSK67QTVN1PROD with HEARING
321 

(I) under such contracts, payment shall be made 

to such a contractor only from amounts recovered; 

(II) from such amounts recovered, payment— 

(aa) shall be made on a contingent basis for 

collecting overpayments; and 

(bb) may be made in such amounts as the 

State may specify for identifying underpayments; 

(III) the State has an adequate process for entities to appeal any adverse determination made by 

such contractors; and 

(IV) such program is carried out in accordance 

with such requirements as the Secretary shall 

specify, including— 

(aa) for purposes of section 1903(a)(7), that 

amounts expended by the State to carry out 

the program shall be considered amounts expended as necessary for the proper and efficient administration of the State plan or a 

waiver of the plan; 

(bb) that section 1903(d) shall apply to 

amounts recovered under the program; and 

(cc) that the State and any such contractors 

under contract with the State shall coordinate 

such recovery audit efforts with other contractors or entities performing audits of entities 

receiving payments under the State plan or 

waiver in the State, including efforts with 

Federal and State law enforcement with respect to the Department of Justice, including 

the Federal Bureau of Investigations, the Inspector General of the Department of Health 

and Human Services, and the State medicaid 

fraud control unit; and 

(43) provide for— 

(A) informing all persons in the State who are under the 

age of 21 and who have been determined to be eligible for 

medical assistance including services described in section 

1905(a)(4)(B), of the availability of early and periodic 

screening, diagnostic, and treatment services as described 

in section 1905(r) and the need for age-appropriate immunizations against vaccine-preventable diseases, 

(B) providing or arranging for the provision of such 

screening services in all cases where they are requested, 

(C) arranging for (directly or through referral to appropriate agencies, organizations, or individuals) corrective 

treatment the need for which is disclosed by such child 

health screening services, and 

(D) reporting to the Secretary (in a uniform form and 

manner established by the Secretary, by age group and by 

basis of eligibility for medical assistance, and by not later 

than April 1 after the end of each fiscal year, beginning 

with fiscal year 1990) the following information relating to 

early and periodic screening, diagnostic, and treatment 

services provided under the plan during each fiscal year: 


emcdonald on DSK67QTVN1PROD with HEARING
322 

(i) the number of children provided child health 

screening services, 

(ii) the number of children referred for corrective 

treatment (the need for which is disclosed by such 

child health screening services), 

(iii) the number of children receiving dental services, 

and other information relating to the provision of dental services to such children described in section 

2108(e) and 

(iv) the State’s results in attaining the participation 

goals set for the State under section 1905(r); 

(44) in each case for which payment for inpatient hospital 

services, services in an intermediate care facility for the mentally retarded, or inpatient mental hospital services is made 

under the State plan— 

(A) a physician (or, in the case of skilled nursing facility 

services or intermediate care facility services, a physician, 

or a nurse practitioner or clinical nurse specialist who is 

not an employee of the facility but is working in collaboration with a physician) certifies at the time of admission, or, 

if later, the time the individual applies for medical assistance under the State plan (and a physician, a physician 

assistant under the supervision of a physician, or, in the 

case of skilled nursing facility services or intermediate 

care facility services, a physician, or a nurse practitioner 

or clinical nurse specialist who is not an employee of the 

facility but is working in collaboration with a physician, 

recertifies, where such services are furnished over a period 

of time, in such cases, at least as often as required under 

section 1903(g)(6) (or, in the case of services that are services provided in an intermediate care facility for the mentally retarded, every year), and accompanied by such supporting material, appropriate to the case involved, as may 

be provided in regulations of the Secretary), that such 

services are or were required to be given on an inpatient 

basis because the individual needs or needed such services, 

and 

(B) such services were furnished under a plan established and periodically reviewed and evaluated by a physician, or, in the case of skilled nursing facility services or 

intermediate care facility services, a physician, or a nurse 

practitioner or clinical nurse specialist who is not an employee of the facility but is working in collaboration with 

a physician; 

(45) provide for mandatory assignment of rights of payment 

for medical support and other medical care owed to recipients, 

in accordance with section 1912; 

(46)(A) provide that information is requested and exchanged 

for purposes of income and eligibility verification in accordance 

with a State system which meets the requirements of section 

1137 of this Act; and 

(B) provide, with respect to an individual declaring to be a 

citizen or national of the United States for purposes of establishing eligibility under this title, that the State shall satisfy 

the requirements of— 


emcdonald on DSK67QTVN1PROD with HEARING
323 

(i) section 1903(x); or 

(ii) subsection (ee); 

(47) provide— 

(A) at the option of the State, for making ambulatory 

prenatal care available to pregnant women during a presumptive eligibility period in accordance with section 1920 

and provide for making medical assistance for items and 

services described in subsection (a) of section 1920A available to children during a presumptive eligibility period in 

accordance with such section and provide for making medical assistance available to individuals described in subsection (a) of section 1920B during a presumptive eligibility period in accordance with such section and provide 

for making medical assistance available to individuals described in subsection (a) of section 1920C during a presumptive eligibility period in accordance with such section; 

and 

(B) that any hospital that is a participating provider 

under the State plan may elect to be a qualified entity for 

purposes of determining, on the basis of preliminary information, whether any individual is eligible for medical assistance under the State plan or under a waiver of the 

plan for purposes of providing the individual with medical 

assistance during a presumptive eligibility period, in the 

same manner, and subject to the same requirements, as 

apply to the State options with respect to populations described in section 1920, 1920A, 1920B, or 1920C (but without regard to whether the State has elected to provide for 

a presumptive eligibility period under any such sections), 

subject to such guidance as the Secretary shall establish; 

(48) provide a method of making cards evidencing eligibility 

for medical assistance available to an eligible individual who 

does not reside in a permanent dwelling or does not have a 

fixed home or mailing address; 

(49) provide that the State will provide information and access to certain information respecting sanctions taken against 

health care practitioners and providers by State licensing authorities in accordance with section 1921; 

(50) provide, in accordance with subsection (q), for a monthly 

personal needs allowance for certain institutionalized individuals and couples; 

(51) meet the requirements of section 1924 (relating to protection of community spouses); 

(52) meet the requirements of section 1925 (relating to extension of eligibility for medical assistance); 

(53) provide— 

(A) for notifying in a timely manner all individuals in 

the State who are determined to be eligible for medical assistance and who are pregnant women, breastfeeding or 

postpartum women (as defined in section 17 of the Child 

Nutrition Act of 1966), or children below the age of 5, of 

the availability of benefits furnished by the special supplemental nutrition program under such section, and 

(B) for referring any such individual to the State agency 

responsible for administering such program; 


emcdonald on DSK67QTVN1PROD with HEARING
324 

(54) in the case of a State plan that provides medical assistance for covered outpatient drugs (as defined in section 

1927(k)), comply with the applicable requirements of section 

1927; 

(55) provide for receipt and initial processing of applications 

of individuals for medical assistance under subsection 

(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 

(a)(10)(A)(ii)(IX)— 

(A) at locations which are other than those used for the 

receipt and processing of applications for aid under part A 

of title IV and which include facilities defined as disproportionate share hospitals under section 1923(a)(1)(A) and 

Federally-qualified health centers described in section 

1905(1)(2)(B), and 

(B) using applications which are other than those used 

for applications for aid under such part; 

(56) provide, in accordance with subsection (s), for adjusted 

payments for certain inpatient hospital services; 

(57) provide that each hospital, nursing facility, provider of 

home health care or personal care services, hospice program, 

or medicaid managed care organization (as defined in section 

1903(m)(1)(A)) receiving funds under the plan shall comply 

with the requirements of subsection (w); 

(58) provide that the State, acting through a State agency, 

association, or other private nonprofit entity, develop a written 

description of the law of the State (whether statutory or as recognized by the courts of the State) concerning advance directives that would be distributed by providers or organizations 

under the requirements of subsection (w); 

(59) maintain a list (updated not less often than monthly, 

and containing each physician’s unique identifier provided 

under the system established under subsection (x)) of all physicians who are certified to participate under the State plan; 

(60) provide that the State agency shall provide assurances 

satisfactory to the Secretary that the State has in effect the 

laws relating to medical child support required under section 

1908A; 

(61) provide that the State must demonstrate that it operates a medicaid fraud and abuse control unit described in section 1903(q) that effectively carries out the functions and requirements described in such section, as determined in accordance with standards established by the Secretary, unless the 

State demonstrates to the satisfaction of the Secretary that the 

effective operation of such a unit in the State would not be 

cost-effective because minimal fraud exists in connection with 

the provision of covered services to eligible individuals under 

the State plan, and that beneficiaries under the plan will be 

protected from abuse and neglect in connection with the provision of medical assistance under the plan without the existence 

of such a unit; 

(62) provide for a program for the distribution of pediatric 

vaccines to program-registered providers for the immunization 

of vaccine-eligible children in accordance with section 1928; 

(63) provide for administration and determinations of eligibility with respect to individuals who are (or seek to be) eligiVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00330 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
325 

ble for medical assistance based on the application of section 

1931; 

(64) provide, not later than 1 year after the date of the enactment of this paragraph, a mechanism to receive reports 

from beneficiaries and others and compile data concerning alleged instances of waste, fraud, and abuse relating to the operation of this title; 

(65) provide that the State shall issue provider numbers for 

all suppliers of medical assistance consisting of durable medical equipment, as defined in section 1861(n), and the State 

shall not issue or renew such a supplier number for any such 

supplier unless— 

(A)(i) full and complete information as to the identity of 

each person with an ownership or control interest (as defined in section 1124(a)(3)) in the supplier or in any subcontractor (as defined by the Secretary in regulations) in 

which the supplier directly or indirectly has a 5 percent or 

more ownership interest; and 

(ii) to the extent determined to be feasible under regulations of the Secretary, the name of any disclosing entity 

(as defined in section 1124(a)(2)) with respect to which a 

person with such an ownership or control interest in the 

supplier is a person with such an ownership or control interest in the disclosing entity; and 

(B) a surety bond in a form specified by the Secretary 

under section 1834(a)(16)(B) and in an amount that is not 

less than $50,000 or such comparable surety bond as the 

Secretary may permit under the second sentence of such 

section; 

(66) provide for making eligibility determinations under section 1935(a); 

(67) provide, with respect to services covered under the State 

plan (but not under title XVIII) that are furnished to a PACE 

program eligible individual enrolled with a PACE provider by 

a provider participating under the State plan that does not 

have a contract or other agreement with the PACE provider 

that establishes payment amounts for such services, that such 

participating provider may not require the PACE provider to 

pay the participating provider an amount greater than the 

amount that would otherwise be payable for the service to the 

participating provider under the State plan for the State where 

the PACE provider is located (in accordance with regulations 

issued by the Secretary); 

(68) provide that any entity that receives or makes annual 

payments under the State plan of at least $5,000,000, as a condition of receiving such payments, shall— 

(A) establish written policies for all employees of the entity (including management), and of any contractor or 

agent of the entity, that provide detailed information about 

the False Claims Act established under sections 3729 

through 3733 of title 31, United States Code, administrative remedies for false claims and statements established 

under chapter 38 of title 31, United States Code, any State 

laws pertaining to civil or criminal penalties for false 

claims and statements, and whistleblower protections 


emcdonald on DSK67QTVN1PROD with HEARING
326 

under such laws, with respect to the role of such laws in 

preventing and detecting fraud, waste, and abuse in Federal health care programs (as defined in section 1128B(f)); 

(B) include as part of such written policies, detailed provisions regarding the entity’s policies and procedures for 

detecting and preventing fraud, waste, and abuse; and 

(C) include in any employee handbook for the entity, a 

specific discussion of the laws described in subparagraph 

(A), the rights of employees to be protected as whistleblowers, and the entity’s policies and procedures for detecting and preventing fraud, waste, and abuse; 

(69) provide that the State must comply with any requirements determined by the Secretary to be necessary for carrying 

out the Medicaid Integrity Program established under section 

1936; 

(70) at the option of the State and notwithstanding paragraphs (1), (10)(B), and (23), provide for the establishment of 

a non-emergency medical transportation brokerage program in 

order to more cost-effectively provide transportation for individuals eligible for medical assistance under the State plan 

who need access to medical care or services and have no other 

means of transportation which— 

(A) may include a wheelchair van, taxi, stretcher car, 

bus passes and tickets, secured transportation, and such 

other transportation as the Secretary determines appropriate; and 

(B) may be conducted under contract with a broker 

who— 

(i) is selected through a competitive bidding process 

based on the State’s evaluation of the broker’s experience, performance, references, resources, qualifications, and costs; 

(ii) has oversight procedures to monitor beneficiary 

access and complaints and ensure that transport personnel are licensed, qualified, competent, and courteous; 

(iii) is subject to regular auditing and oversight by 

the State in order to ensure the quality of the transportation services provided and the adequacy of beneficiary access to medical care and services; and 

(iv) complies with such requirements related to prohibitions on referrals and conflict of interest as the 

Secretary shall establish (based on the prohibitions on 

physician referrals under section 1877 and such other 

prohibitions and requirements as the Secretary determines to be appropriate); 

(71) provide that the State will implement an asset 

verification program as required under section 1940; 

(72) provide that the State will not prevent a Federallyqualified health center from entering into contractual relationships with private practice dental providers in the provision of 

Federally-qualified health center services; 

(73) in the case of any State in which 1 or more Indian 

Health Programs or Urban Indian Organizations furnishes 

health care services, provide for a process under which the 


emcdonald on DSK67QTVN1PROD with HEARING
327 

State seeks advice on a regular, ongoing basis from designees 

of such Indian Health Programs and Urban Indian Organizations on matters relating to the application of this title that 

are likely to have a direct effect on such Indian Health Programs and Urban Indian Organizations and that— 

(A) shall include solicitation of advice prior to submission of any plan amendments, waiver requests, and proposals for demonstration projects likely to have a direct effect on Indians, Indian Health Programs, or Urban Indian 

Organizations; and 

(B) may include appointment of an advisory committee 

and of a designee of such Indian Health Programs and 

Urban Indian Organizations to the medical care advisory 

committee advising the State on its State plan under this 

title; 

(74) provide for maintenance of effort under the State plan 

or under any waiver of the plan in accordance with subsection 

(gg); and 

(75) provide that, beginning January 2015, and annually 

thereafter, the State shall submit a report to the Secretary 

that contains— 

(A) the total number of enrolled and newly enrolled individuals in the State plan or under a waiver of the plan for 

the fiscal year ending on September 30 of the preceding 

calendar year, disaggregated by population, including children, parents, nonpregnant childless adults, disabled individuals, elderly individuals, and such other categories or 

sub-categories of individuals eligible for medical assistance 

under the State plan or under a waiver of the plan as the 

Secretary may require; 

(B) a description, which may be specified by population, 

of the outreach and enrollment processes used by the State 

during such fiscal year; and 

(C) any other data reporting determined necessary by 

the Secretary to monitor enrollment and retention of individuals eligible for medical assistance under the State plan 

or under a waiver of the plan; 

(76) provide that any data collected under the State plan 

meets the requirements of section 3101 of the Public Health 

Service Act; 

(77) provide that the State shall comply with provider and 

supplier screening, oversight, and reporting requirements in 

accordance with subsection (kk); 

(79) provide that any agent, clearinghouse, or other alternate 

payee (as defined by the Secretary) that submits claims on behalf of a health care provider must register with the State and 

the Secretary in a form and manner specified by the Secretary; 

(80) provide that the State shall not provide any payments 

for items or services provided under the State plan or under 

a waiver to any financial institution or entity located outside 

of the United States; and 

(81) provide for implementation of the payment models specified by the Secretary under section 1115A(c) for implementation on a nationwide basis unless the State demonstrates to 

the satisfaction of the Secretary that implementation would 


emcdonald on DSK67QTVN1PROD with HEARING
328 

not be administratively feasible or appropriate to the health 

care delivery system of the State. 

Notwithstanding paragraph (5), if on January 1, 1965, and on the 

date on which a State submits its plan for approval under this 

title, the State agency which administered or supervised the administration of the plan of such State approved under title X (or 

title XVI, insofar as it relates to the blind) was different from the 

State agency which administered or supervised the administration 

of the State plan approved under title I (or title XVI, insofar as it 

relates to the aged), the State agency which administered or supervised the administration of such plan approved under title X (or 

title XVI, insofar as it relates to the blind) may be designated to 

administer or supervise the administration of the portion of the 

State plan for medical assistance which relates to blind individuals 

and a different State agency may be established or designated to 

administer or supervise the administration of the rest of the State 

plan for medical assistance; and in such case the part of the plan 

which each such agency administers, or the administration of 

which each such agency supervises, shall be regarded as a separate 

plan for purposes of this title (except for purposes of paragraph 

(10)). The provisions of paragraphs (9)(A), (31), and (33) and of section 1903(i)(4) shall not apply to a religious nonmedical health care 

institution (as defined in section 1861(ss)(1)). 

For purposes of paragraph (10) any individual who, for the 

month of August 1972, was eligible for or receiving aid or assistance under a State plan approved under title I, X, XIV, or XVI, or 

part A of title IV and who for such month was entitled to monthly 

insurance benefits under title II shall for purposes of this title only 

be deemed to be eligible for financial aid or assistance for any 

month thereafter if such individual would have been eligible for financial aid or assistance for such month had the increase in 

monthly insurance benefits under title II resulting from enactment 

of Public Law 92-336 not been applicable to such individual. 

The requirement of clause (A) of paragraph (37) with respect to 

a State plan may be waived by the Secretary if he finds that the 

State has exercised good faith in trying to meet such requirement. 

For purposes of this title, any child who meets the requirements of 

paragraph (1) or (2) of section 473(b) shall be deemed to be a dependent child as defined in section 406 and shall be deemed to be 

a recipient of aid to families with dependent children under part 

A of title IV in the State where such child resides. Notwithstanding 

paragraph (10)(B) or any other provision of this subsection, a State 

plan shall provide medical assistance with respect to an alien who 

is not lawfully admitted for permanent residence or otherwise permanently residing in the United States under color of law only in 

accordance with section 1903(v). 

(b) The Secretary shall approve any plan which fulfills the conditions specified in subsection (a) of this section, except that he shall 

not approve any plan which imposes, as a condition of eligibility for 

medical assistance under the plan— 

(1) an age requirement of more than 65 years; or 

(2) any residence requirement which excludes any individual 

who resides in the State, regardless of whether or not the residence is maintained permanently or at a fixed address; or 


emcdonald on DSK67QTVN1PROD with HEARING
329 

(3) any citizenship requirement which excludes any citizen of 

the United States. 

(c) Notwithstanding subsection (b), the Secretary shall not approve any State plan for medical assistance if the State requires individuals described in subsection (l)(1) to apply for assistance under 

the State program funded under part A of title IV as a condition 

of applying for or receiving medical assistance under this title. 

(d) If a State contracts with an entity which meets the requirements of section 1152, as determined by the Secretary, or a utilization and quality control peer review organization having a contract 

with the Secretary under part B of title XI for the performance of 

medical or utilization review functions (including quality review 

functions described in subsection (a)(30)(C)) required under this 

title of a State plan with respect to specific services or providers 

(or services or providers in a geographic area of the State), such requirements shall be deemed to be met for those services or providers (or services or providers in that area) by delegation to such 

an entity or organization under the contract of the State’s authority 

to conduct such review activities if the contract provides for the 

performance of activities not inconsistent with part B of title XI 

and provides for such assurances of satisfactory performance by 

such an entity or organization as the Secretary may prescribe. 

(e)(1) Beginning April 1, 1990, for provisions relating to the extension of eligibility for medical assistance for certain families who 

have received aid pursuant to a State plan approved under part A 

of title IV and have earned income, see section 1925. 

(2)(A) In the case of an individual who is enrolled with a medicaid managed care organization (as defined in section 

1903(m)(1)(A)), with a primary care case manager (as defined in 

section 1905(t)), or with an eligible organization with a contract 

under section 1876 and who would (but for this paragraph) lose eligibility for benefits under this title before the end of the minimum 

enrollment period (defined in subparagraph (B)), the State plan 

may provide, notwithstanding any other provision of this title, that 

the individual shall be deemed to continue to be eligible for such 

benefits until the end of such minimum period, but, except for benefits furnished under section 1905(a)(4)(C), only with respect to 

such benefits provided to the individual as an enrollee of such organization or entity or by or through the case manager. 

(B) For purposes of subparagraph (A), the term ‘‘minimum enrollment period’’ means, with respect to an individual’s enrollment 

with an organization or entity under a State plan, a period, established by the State, of not more than six months beginning on the 

date the individual’s enrollment with the organization or entity becomes effective. 

(3) At the option of the State, any individual who— 

(A) is 18 years of age or younger and qualifies as a disabled 

individual under section 1614(a); 

(B) with respect to whom there has been a determination by 

the State that— 

(i) the individual requires a level of care provided in a 

hospital, nursing facility, or intermediate care facility for 

the mentally retarded, 

(ii) it is appropriate to provide such care for the individual outside such an institution, and 


emcdonald on DSK67QTVN1PROD with HEARING
330 

(iii) the estimated amount which would be expended for 

medical assistance for the individual for such care outside 

an institution is not greater than the estimated amount 

which would otherwise be expended for medical assistance 

for the individual within an appropriate institution; and 

(C) if the individual were in a medical institution, would be 

eligible for medical assistance under the State plan under this 

title, 

shall be deemed, for purposes of this title only, to be an individual with respect to whom a supplemental security income 

payment, or State supplemental payment, respectively, is being 

paid under title XVI. 

(4) A child born to a woman eligible for and receiving medical assistance under a State plan on the date of the child’s birth shall 

be deemed to have applied for medical assistance and to have been 

found eligible for such assistance under such plan on the date of 

such birth and to remain eligible for such assistance for a period 

of one year. During the period in which a child is deemed under 

the preceding sentence to be eligible for medical assistance, the 

medical assistance eligibility identification number of the mother 

shall also serve as the identification number of the child, and all 

claims shall be submitted and paid under such number (unless the 

State issues a separate identification number for the child before 

such period expires). Notwithstanding the preceding sentence, in 

the case of a child who is born in the United States to an alien 

mother for whom medical assistance for the delivery of the child is 

made available pursuant to section 1903(v), the State immediately 

shall issue a separate identification number for the child upon notification by the facility at which such delivery occurred of the child’s 

birth. 

(5) A woman who, while pregnant, is eligible for, has applied for, 

and has received medical assistance under the State plan, shall 

continue to be eligible under the plan, as though she were pregnant, for all pregnancy-related and postpartum medical assistance 

under the plan, through the end of the month in which the 60-day 

period (beginning on the last day of her pregnancy) ends. 

(6) In the case of a pregnant woman described in subsection 

(a)(10) who, because of a change in income of the family of which 

she is a member, would not otherwise continue to be described in 

such subsection, the woman shall be deemed to continue to be an 

individual described in subsection (a)(10)(A)(i)(IV) and subsection 

(l)(1)(A) without regard to such change of income through the end 

of the month in which the 60-day period (beginning on the last day 

of her pregnancy) ends. The preceding sentence shall not apply in 

the case of a woman who has been provided ambulatory prenatal 

care pursuant to section 1920 during a presumptive eligibility period and is then, in accordance with such section, determined to be 

ineligible for medical assistance under the State plan. 

(7) In the case of an infant or child described in subparagraph 

(B), (C), or (D) of subsection (l)(1) or paragraph (2) of section 

1905(n)— 

(A) who is receiving inpatient services for which medical assistance is provided on the date the infant or child attains the 

maximum age with respect to which coverage is provided 

under the State plan for such individuals, and 


emcdonald on DSK67QTVN1PROD with HEARING
331 

(B) who, but for attaining such age, would remain eligible for 

medical assistance under such subsection, 

the infant or child shall continue to be treated as an individual described in such respective provision until the end of the stay for 

which the inpatient services are furnished. 

(8) If an individual is determined to be a qualified medicare beneficiary (as defined in section 1905(p)(1)), such determination shall 

apply to services furnished after the end of the month in which the 

determination first occurs. For purposes of payment to a State 

under section 1903(a), such determination shall be considered to be 

valid for an individual for a period of 12 months, except that a 

State may provide for such determinations more frequently, but not 

more frequently than once every 6 months for an individual. 

(9)(A) At the option of the State, the plan may include as medical 

assistance respiratory care services for any individual who— 

(i) is medically dependent on a ventilator for life support at 

least six hours per day; 

(ii) has been so dependent for at least 30 consecutive days 

(or the maximum number of days authorized under the State 

plan, whichever is less) as an inpatient; 

(iii) but for the availability of respiratory care services, 

would require respiratory care as an inpatient in a hospital, 

nursing facility, or intermediate care facility for the mentally 

retarded and would be eligible to have payment made for such 

inpatient care under the State plan; 

(iv) has adequate social support services to be cared for at 

home; and 

(v) wishes to be cared for at home. 

(B) The requirements of subparagraph (A)(ii) may be satisfied by 

a continuous stay in one or more hospitals, nursing facilities, or intermediate care facilities for the mentally retarded. 

(C) For purposes of this paragraph, respiratory care services 

means services provided on a part-time basis in the home of the 

individual by a respiratory therapist or other health care professional trained in respiratory therapy (as determined by the State), 

payment for which is not otherwise included within other items 

and services furnished to such individual as medical assistance 

under the plan. 

(10)(A) The fact that an individual, child, or pregnant woman 

may be denied aid under part A of title IV pursuant to section 

402(a)(43) shall not be construed as denying (or permitting a State 

to deny) medical assistance under this title to such individual, 

child, or woman who is eligible for assistance under this title on 

a basis other than the receipt of aid under such part. 

(B) If an individual, child, or pregnant woman is receiving aid 

under part A of title IV and such aid is terminated pursuant to section 402(a)(43), the State may not discontinue medical assistance 

under this title for the individual, child, or woman until the State 

has determined that the individual, child, or woman is not eligible 

for assistance under this title on a basis other than the receipt of 

aid under such part. 

(11)(A) In the case of an individual who is enrolled with a group 

health plan under section 1906 and who would (but for this paragraph) lose eligibility for benefits under this title before the end of 

the minimum enrollment period (defined in subparagraph (B)), the 


emcdonald on DSK67QTVN1PROD with HEARING
332 

State plan may provide, notwithstanding any other provision of 

this title, that the individual shall be deemed to continue to be eligible for such benefits until the end of such minimum period, but 

only with respect to such benefits provided to the individual as an 

enrollee of such plan. 

(B) For purposes of subparagraph (A), the term ‘‘minimum enrollment period’’ means, with respect to an individual’s enrollment 

with a group health plan, a period established by the State, of not 

more than 6 months beginning on the date the individual’s enrollment under the plan becomes effective. 

(12) At the option of the State, the plan may provide that an individual who is under an age specified by the State (not to exceed 

19 years of age) and who is determined to be eligible for benefits 

under a State plan approved under this title under subsection 

(a)(10)(A) shall remain eligible for those benefits until the earlier 

of— 

(A) the end of a period (not to exceed 12 months) following 

the determination; or 

(B) the time that the individual exceeds that age. 

(13) EXPRESS LANE OPTION.— 

(A) IN GENERAL.— (i) OPTION TO USE A FINDING FROM AN EXPRESS LANE

AGENCY.—At the option of the State, the State plan may 

provide that in determining eligibility under this title for 

a child (as defined in subparagraph (G)), the State may 

rely on a finding made within a reasonable period (as determined by the State) from an Express Lane agency (as 

defined in subparagraph (F)) when it determines whether 

a child satisfies one or more components of eligibility for 

medical assistance under this title. The State may rely on 

a finding from an Express Lane agency notwithstanding 

sections 1902(a)(46)(B) and 1137(d) or any differences in 

budget unit, disregard, deeming or other methodology, if 

the following requirements are met: 

(I) PROHIBITION ON DETERMINING CHILDREN INELI- GIBLE FOR COVERAGE.—If a finding from an Express 

Lane agency would result in a determination that a 

child does not satisfy an eligibility requirement for 

medical assistance under this title and for child health 

assistance under title XXI, the State shall determine 

eligibility for assistance using its regular procedures. 

(II) NOTICE REQUIREMENT.—For any child who is 

found eligible for medical assistance under the State 

plan under this title or child health assistance under 

title XXI and who is subject to premiums based on an 

Express Lane agency’s finding of such child’s income 

level, the State shall provide notice that the child may 

qualify for lower premium payments if evaluated by 

the State using its regular policies and of the procedures for requesting such an evaluation. 

(III) COMPLIANCE WITH SCREEN AND ENROLL RE- QUIREMENT.—The State shall satisfy the requirements 

under subparagraphs (A) and (B) of section 2102(b)(3) 

(relating to screen and enroll) before enrolling a child 

in child health assistance under title XXI. At its opVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00338 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
333 

tion, the State may fulfill such requirements in accordance with either option provided under subparagraph 

(C) of this paragraph. 

(IV) VERIFICATION OF CITIZENSHIP OR NATIONALITY

STATUS.—The State shall satisfy the requirements of 

section 1902(a)(46)(B) or 2105(c)(9), as applicable for 

verifications of citizenship or nationality status. 

(V) CODING.—The State meets the requirements of 

subparagraph (E). 

(ii) OPTION TO APPLY TO RENEWALS AND REDETERMINA- TIONS.—The State may apply the provisions of this paragraph when conducting initial determinations of eligibility, 

redeterminations of eligibility, or both, as described in the 

State plan. 

(B) RULES OF CONSTRUCTION.—Nothing in this paragraph 

shall be construed— 

(i) to limit or prohibit a State from taking any actions 

otherwise permitted under this title or title XXI in determining eligibility for or enrolling children into medical assistance under this title or child health assistance under 

title XXI; or 

(ii) to modify the limitations in section 1902(a)(5) concerning the agencies that may make a determination of eligibility for medical assistance under this title. 

(C) OPTIONS FOR SATISFYING THE SCREEN AND ENROLL RE- QUIREMENT.— (i) IN GENERAL.—With respect to a child whose eligibility 

for medical assistance under this title or for child health 

assistance under title XXI has been evaluated by a State 

agency using an income finding from an Express Lane 

agency, a State may carry out its duties under subparagraphs (A) and (B) of section 2102(b)(3) (relating to screen 

and enroll) in accordance with either clause (ii) or clause 

(iii). 

(ii) ESTABLISHING A SCREENING THRESHOLD.— (I) IN GENERAL.—Under this clause, the State establishes a screening threshold set as a percentage of the 

Federal poverty level that exceeds the highest income 

threshold applicable under this title to the child by a 

minimum of 30 percentage points or, at State option, 

a higher number of percentage points that reflects the 

value (as determined by the State and described in the 

State plan) of any differences between income methodologies used by the program administered by the 

Express Lane agency and the methodologies used by 

the State in determining eligibility for medical assistance under this title. 

(II) CHILDREN WITH INCOME NOT ABOVE THRESHOLD.—If the income of a child does not exceed the 

screening threshold, the child is deemed to satisfy the 

income eligibility criteria for medical assistance under 

this title regardless of whether such child would otherwise satisfy such criteria. 

(III) CHILDREN WITH INCOME ABOVE THRESHOLD.—If 

the income of a child exceeds the screening threshold, 


emcdonald on DSK67QTVN1PROD with HEARING
334 

the child shall be considered to have an income above 

the Medicaid applicable income level described in section 2110(b)(4) and to satisfy the requirement under 

section 2110(b)(1)(C) (relating to the requirement that 

CHIP matching funds be used only for children not eligible for Medicaid). If such a child is enrolled in child 

health assistance under title XXI, the State shall provide the parent, guardian, or custodial relative with 

the following: 

(aa) Notice that the child may be eligible to receive medical assistance under the State plan 

under this title if evaluated for such assistance 

under the State’s regular procedures and notice of 

the process through which a parent, guardian, or 

custodial relative can request that the State 

evaluate the child’s eligibility for medical assistance under this title using such regular procedures. 

(bb) A description of differences between the 

medical assistance provided under this title and 

child health assistance under title XXI, including 

differences in cost-sharing requirements and covered benefits. 

(iii) TEMPORARY ENROLLMENT IN CHIP PENDING SCREEN

AND ENROLL.— (I) IN GENERAL.—Under this clause, a State enrolls 

a child in child health assistance under title XXI for 

a temporary period if the child appears eligible for 

such assistance based on an income finding by an Express Lane agency. 

(II) DETERMINATION OF ELIGIBILITY.—During such 

temporary enrollment period, the State shall determine the child’s eligibility for child health assistance 

under title XXI or for medical assistance under this 

title in accordance with this clause. 

(III) PROMPT FOLLOW UP.—In making such a determination, the State shall take prompt action to determine whether the child should be enrolled in medical 

assistance under this title or child health assistance 

under title XXI pursuant to subparagraphs (A) and (B) 

of section 2102(b)(3) (relating to screen and enroll). 

(IV) REQUIREMENT FOR SIMPLIFIED DETERMINATION.—In making such a determination, the State 

shall use procedures that, to the maximum feasible extent, reduce the burden imposed on the individual of 

such determination. Such procedures may not require 

the child’s parent, guardian, or custodial relative to 

provide or verify information that already has been 

provided to the State agency by an Express Lane 

agency or another source of information unless the 

State agency has reason to believe the information is 

erroneous. 

(V) AVAILABILITY OF CHIP MATCHING FUNDS DURING

TEMPORARY ENROLLMENT PERIOD.—Medical assistance 

for items and services that are provided to a child enVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00340 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
335 

rolled in title XXI during a temporary enrollment period under this clause shall be treated as child health 

assistance under such title. 

(D) OPTION FOR AUTOMATIC ENROLLMENT.— (i) IN GENERAL.—The State may initiate and determine 

eligibility for medical assistance under the State Medicaid 

plan or for child health assistance under the State CHIP 

plan without a program application from, or on behalf of, 

the child based on data obtained from sources other than 

the child (or the child’s family), but a child can only be 

automatically enrolled in the State Medicaid plan or the 

State CHIP plan if the child or the family affirmatively 

consents to being enrolled through affirmation in writing, 

by telephone, orally, through electronic signature, or 

through any other means specified by the Secretary or by 

signature on an Express Lane agency application, if the requirement of clause (ii) is met. 

(ii) INFORMATION REQUIREMENT.—The requirement of 

this clause is that the State informs the parent, guardian, 

or custodial relative of the child of the services that will 

be covered, appropriate methods for using such services, 

premium or other cost sharing charges (if any) that apply, 

medical support obligations (under section 1912(a)) created 

by enrollment (if applicable), and the actions the parent, 

guardian, or relative must take to maintain enrollment 

and renew coverage. 

(E) CODING; APPLICATION TO ENROLLMENT ERROR RATES.— (i) IN GENERAL.—For purposes of subparagraph (A)(iv), 

the requirement of this subparagraph for a State is that 

the State agrees to— 

(I) assign such codes as the Secretary shall require 

to the children who are enrolled in the State Medicaid 

plan or the State CHIP plan through reliance on a 

finding made by an Express Lane agency for the duration of the State’s election under this paragraph; 

(II) annually provide the Secretary with a statistically valid sample (that is approved by Secretary) of 

the children enrolled in such plans through reliance on 

such a finding by conducting a full Medicaid eligibility 

review of the children identified for such sample for 

purposes of determining an eligibility error rate (as 

described in clause (iv)) with respect to the enrollment 

of such children (and shall not include such children 

in any data or samples used for purposes of complying 

with a Medicaid Eligibility Quality Control (MEQC) 

review or a payment error rate measurement (PERM) 

requirement); 

(III) submit the error rate determined under subclause (II) to the Secretary; 

(IV) if such error rate exceeds 3 percent for either 

of the first 2 fiscal years in which the State elects to 

apply this paragraph, demonstrate to the satisfaction 

of the Secretary the specific corrective actions implemented by the State to improve upon such error rate; 

and 


emcdonald on DSK67QTVN1PROD with HEARING
336 

(V) if such error rate exceeds 3 percent for any fiscal 

year in which the State elects to apply this paragraph, 

a reduction in the amount otherwise payable to the 

State under section 1903(a) for quarters for that fiscal 

year, equal to the total amount of erroneous excess 

payments determined for the fiscal year only with respect to the children included in the sample for the fiscal year that are in excess of a 3 percent error rate 

with respect to such children. 

(ii) NO PUNITIVE ACTION BASED ON ERROR RATE.—The 

Secretary shall not apply the error rate derived from the 

sample under clause (i) to the entire population of children 

enrolled in the State Medicaid plan or the State CHIP 

plan through reliance on a finding made by an Express 

Lane agency, or to the population of children enrolled in 

such plans on the basis of the State’s regular procedures 

for determining eligibility, or penalize the State on the 

basis of such error rate in any manner other than the reduction of payments provided for under clause (i)(V). 

(iii) RULE OF CONSTRUCTION.—Nothing in this paragraph 

shall be construed as relieving a State that elects to apply 

this paragraph from being subject to a penalty under section 1903(u), for payments made under the State Medicaid 

plan with respect to ineligible individuals and families 

that are determined to exceed the error rate permitted 

under that section (as determined without regard to the 

error rate determined under clause (i)(II)). 

(iv) ERROR RATE DEFINED.—In this subparagraph, the 

term ‘‘error rate’’ means the rate of erroneous excess payments for medical assistance (as defined in section 

1903(u)(1)(D)) for the period involved, except that such 

payments shall be limited to individuals for which eligibility determinations are made under this paragraph and 

except that in applying this paragraph under title XXI, 

there shall be substituted for references to provisions of 

this title corresponding provisions within title XXI. 

(F) EXPRESS LANE AGENCY.— (i) IN GENERAL.—In this paragraph, the term ‘‘Express 

Lane agency’’ means a public agency that— 

(I) is determined by the State Medicaid agency or 

the State CHIP agency (as applicable) to be capable of 

making the determinations of one or more eligibility 

requirements described in subparagraph (A)(i); 

(II) is identified in the State Medicaid plan or the 

State CHIP plan; and 

(III) notifies the child’s family— 

(aa) of the information which shall be disclosed 

in accordance with this paragraph; 

(bb) that the information disclosed will be used 

solely for purposes of determining eligibility for 

medical assistance under the State Medicaid plan 

or for child health assistance under the State 

CHIP plan; and 

(cc) that the family may elect to not have the information disclosed for such purposes; and 


emcdonald on DSK67QTVN1PROD with HEARING
337 

(IV) enters into, or is subject to, an interagency 

agreement to limit the disclosure and use of the information disclosed. 

(ii) INCLUSION OF SPECIFIC PUBLIC AGENCIES AND INDIAN

TRIBES AND TRIBAL ORGANIZATIONS.—Such term includes 

the following: 

(I) A public agency that determines eligibility for assistance under any of the following: 

(aa) The temporary assistance for needy families program funded under part A of title IV. 

(bb) A State program funded under part D of 

title IV. 

(cc) The State Medicaid plan. 

(dd) The State CHIP plan. 

(ee) The Food and Nutrition Act of 2008 (7 

U.S.C. 2011 et seq.). 

(ff) The Head Start Act (42 U.S.C. 9801 et seq.). 

(gg) The Richard B. Russell National School 

Lunch Act (42 U.S.C. 1751 et seq.). 

(hh) The Child Nutrition Act of 1966 (42 U.S.C. 

1771 et seq.). 

(ii) The Child Care and Development Block 

Grant Act of 1990 (42 U.S.C. 9858 et seq.). 

(jj) The Stewart B. McKinney Homeless Assistance Act (42 U.S.C. 11301 et seq.). 

(kk) The United States Housing Act of 1937 (42 

U.S.C. 1437 et seq.). 

(ll) The Native American Housing Assistance 

and Self-Determination Act of 1996 (25 U.S.C. 

4101 et seq.). 

(II) A State-specified governmental agency that has 

fiscal liability or legal responsibility for the accuracy of 

the eligibility determination findings relied on by the 

State. 

(III) A public agency that is subject to an interagency agreement limiting the disclosure and use of 

the information disclosed for purposes of determining 

eligibility under the State Medicaid plan or the State 

CHIP plan. 

(IV) The Indian Health Service, an Indian Tribe, 

Tribal Organization, or Urban Indian Organization (as 

defined in section 1139(c)). 

(iii) øEXCLUSIONS¿ EXCLUSION.—Such term does not include øan agency that determines eligibility for a program 

established under the Social Services Block Grant established under title XX or¿ a private, for-profit organization. 

(iv) RULES OF CONSTRUCTION.—Nothing in this paragraph shall be construed as— 

(I) exempting a State Medicaid agency from complying with the requirements of section 1902(a)(4) relating to merit-based personnel standards for employees of the State Medicaid agency and safeguards 

against conflicts of interest); or 

(II) authorizing a State Medicaid agency that elects 

to use Express Lane agencies under this subparagraph 


emcdonald on DSK67QTVN1PROD with HEARING
338 

to use the Express Lane option to avoid complying 

with such requirements for purposes of making eligibility determinations under the State Medicaid plan. 

(v) ADDITIONAL DEFINITIONS.—In this paragraph: 

(I) STATE.—The term ‘‘State’’ means 1 of the 50 

States or the District of Columbia. 

(II) STATE CHIP AGENCY.—The term ‘‘State CHIP 

agency’’ means the State agency responsible for administering the State CHIP plan. 

(III) STATE CHIP PLAN.—The term ‘‘State CHIP plan’’ 

means the State child health plan established under 

title XXI and includes any waiver of such plan. 

(IV) STATE MEDICAID AGENCY.—The term ‘‘State 

Medicaid agency’’ means the State agency responsible 

for administering the State Medicaid plan. 

(V) STATE MEDICAID PLAN.—The term ‘‘State Medicaid plan’’ means the State plan established under 

title XIX and includes any waiver of such plan. 

(G) CHILD DEFINED.—For purposes of this paragraph, the 

term ‘‘child’’ means an individual under 19 years of age, or, at 

the option of a State, such higher age, not to exceed 21 years 

of age, as the State may elect. 

(H) STATE OPTION TO RELY ON STATE INCOME TAX DATA OR

RETURN.—At the option of the State, a finding from an Express 

Lane agency may include gross income or adjusted gross income shown by State income tax records or returns. 

(I) APPLICATION.—This paragraph shall not apply with respect to eligibility determinations made after September 30, 

2017. 

(14) INCOME DETERMINED USING MODIFIED ADJUSTED GROSS

INCOME.— 

(A) IN GENERAL.—Notwithstanding subsection (r) or any 

other provision of this title, except as provided in subparagraph (D), for purposes of determining income eligibility 

for medical assistance under the State plan or under any 

waiver of such plan and for any other purpose applicable 

under the plan or waiver for which a determination of income is required, including with respect to the imposition 

of premiums and cost-sharing, a State shall use the modified adjusted gross income of an individual and, in the case 

of an individual in a family greater than 1, the household 

income of such family. A State shall establish income eligibility thresholds for populations to be eligible for medical 

assistance under the State plan or a waiver of the plan 

using modified adjusted gross income and household income that are not less than the effective income eligibility 

levels that applied under the State plan or waiver on the 

date of enactment of the Patient Protection and Affordable 

Care Act. For purposes of complying with the maintenance 

of effort requirements under subsection (gg) during the 

transition to modified adjusted gross income and household income, a State shall, working with the Secretary, establish an equivalent income test that ensures individuals 

eligible for medical assistance under the State plan or 

under a waiver of the plan on the date of enactment of the 


emcdonald on DSK67QTVN1PROD with HEARING
339 

Patient Protection and Affordable Care Act, do not lose 

coverage under the State plan or under a waiver of the 

plan. The Secretary may waive such provisions of this title 

and title XXI as are necessary to ensure that States establish income and eligibility determination systems that protect beneficiaries. 

(B) NO INCOME OR EXPENSE DISREGARDS.—Subject to 

subparagraph (I), no type of expense, block, or other income disregard shall be applied by a State to determine income eligibility for medical assistance under the State plan 

or under any waiver of such plan or for any other purpose 

applicable under the plan or waiver for which a determination of income is required. 

(C) NO ASSETS TEST.—A State shall not apply any assets 

or resources test for purposes of determining eligibility for 

medical assistance under the State plan or under a waiver 

of the plan. 

(D) EXCEPTIONS.— (i) INDIVIDUALS ELIGIBLE BECAUSE OF OTHER AID OR

ASSISTANCE, ELDERLY INDIVIDUALS, MEDICALLY NEEDY

INDIVIDUALS, AND INDIVIDUALS ELIGIBLE FOR MEDICARE

COST-SHARING.—Subparagraphs (A), (B), and (C) shall 

not apply to the determination of eligibility under the 

State plan or under a waiver for medical assistance for 

the following: 

(I) Individuals who are eligible for medical assistance under the State plan or under a waiver 

of the plan on a basis that does not require a determination of income by the State agency administering the State plan or waiver, including as a 

result of eligibility for, or receipt of, other Federal 

or State aid or assistance, individuals who are eligible on the basis of receiving (or being treated as 

if receiving) supplemental security income benefits 

under title XVI, and individuals who are eligible 

as a result of being or being deemed to be a child 

in foster care under the responsibility of the State. 

(II) Individuals who have attained age 65. 

(III) Individuals who qualify for medical assistance under the State plan or under any waiver of 

such plan on the basis of being blind or disabled 

(or being treated as being blind or disabled) without regard to whether the individual is eligible for 

supplemental security income benefits under title 

XVI on the basis of being blind or disabled and including an individual who is eligible for medical 

assistance on the basis of section 1902(e)(3). 

(IV) Individuals described in subsection 

(a)(10)(C). 

(V) Individuals described in any clause of subsection (a)(10)(E). 

(ii) EXPRESS LANE AGENCY FINDINGS.—In the case of 

a State that elects the Express Lane option under 

paragraph (13), notwithstanding subparagraphs (A), 

(B), and (C), the State may rely on a finding made by 


emcdonald on DSK67QTVN1PROD with HEARING
340 

an Express Lane agency in accordance with that paragraph relating to the income of an individual for purposes of determining the individual’s eligibility for 

medical assistance under the State plan or under a 

waiver of the plan. 

(iii) MEDICARE PRESCRIPTION DRUG SUBSIDIES DETER- MINATIONS.—Subparagraphs (A), (B), and (C) shall not 

apply to any determinations of eligibility for premium 

and cost-sharing subsidies under and in accordance 

with section 1860D–14 made by the State pursuant to 

section 1935(a)(2). 

(iv) LONG-TERM CARE.—Subparagraphs (A), (B), and 

(C) shall not apply to any determinations of eligibility 

of individuals for purposes of medical assistance for 

nursing facility services, a level of care in any institution equivalent to that of nursing facility services, 

home or community-based services furnished under a 

waiver or State plan amendment under section 1915 

or a waiver under section 1115, and services described 

in section 1917(c)(1)(C)(ii). 

(v) GRANDFATHER OF CURRENT ENROLLEES UNTIL

DATE OF NEXT REGULAR REDETERMINATION.—An individual who, on January 1, 2014, is enrolled in the 

State plan or under a waiver of the plan and who 

would be determined ineligible for medical assistance 

solely because of the application of the modified adjusted gross income or household income standard described in subparagraph (A), shall remain eligible for 

medical assistance under the State plan or waiver 

(and subject to the same premiums and cost-sharing 

as applied to the individual on that date) through 

March 31, 2014, or the date on which the individual’s 

next regularly scheduled redetermination of eligibility 

is to occur, whichever is later. 

(E) TRANSITION PLANNING AND OVERSIGHT.—Each State 

shall submit to the Secretary for the Secretary’s approval 

the income eligibility thresholds proposed to be established 

using modified adjusted gross income and household income, the methodologies and procedures to be used to determine income eligibility using modified adjusted gross income and household income and, if applicable, a State plan 

amendment establishing an optional eligibility category 

under subsection (a)(10)(A)(ii)(XX). To the extent practicable, the State shall use the same methodologies and 

procedures for purposes of making such determinations as 

the State used on the date of enactment of the Patient Protection and Affordable Care Act. The Secretary shall ensure that the income eligibility thresholds proposed to be 

established using modified adjusted gross income and 

household income, including under the eligibility category 

established under subsection (a)(10)(A)(ii)(XX), and the 

methodologies and procedures proposed to be used to determine income eligibility, will not result in children who 

would have been eligible for medical assistance under the 

State plan or under a waiver of the plan on the date of enVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00346 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
341 

actment of the Patient Protection and Affordable Care Act 

no longer being eligible for such assistance. 

(F) LIMITATION ON SECRETARIAL AUTHORITY.—The Secretary shall not waive compliance with the requirements of 

this paragraph except to the extent necessary to permit a 

State to coordinate eligibility requirements for dual eligible individuals (as defined in section 1915(h)(2)(B)) under 

the State plan or under a waiver of the plan and under 

title XVIII and individuals who require the level of care 

provided in a hospital, a nursing facility, or an intermediate care facility for the mentally retarded. 

(G) DEFINITIONS OF MODIFIED ADJUSTED GROSS INCOME

AND HOUSEHOLD INCOME.—In this paragraph, the terms 

‘‘modified adjusted gross income’’ and ‘‘household income’’ 

have the meanings given such terms in section 36B(d)(2) 

of the Internal Revenue Code of 1986. 

(H) CONTINUED APPLICATION OF MEDICAID RULES RE- GARDING POINT-IN-TIME INCOME AND SOURCES OF INCOME.—The requirement under this paragraph for States 

to use modified adjusted gross income and household income to determine income eligibility for medical assistance 

under the State plan or under any waiver of such plan and 

for any other purpose applicable under the plan or waiver 

for which a determination of income is required shall not 

be construed as affecting or limiting the application of— 

(i) the requirement under this title and under the 

State plan or a waiver of the plan to determine an individual’s income as of the point in time at which an 

application for medical assistance under the State 

plan or a waiver of the plan is processed; or 

(ii) any rules established under this title or under 

the State plan or a waiver of the plan regarding 

sources of countable income. 

(I) TREATMENT OF PORTION OF MODIFIED ADJUSTED GROSS

INCOME.—For purposes of determining the income eligibility of an individual for medical assistance whose eligibility is determined based on the application of modified 

adjusted gross income under subparagraph (A), the State 

shall— 

(i) determine the dollar equivalent of the difference 

between the upper income limit on eligibility for such 

an individual (expressed as a percentage of the poverty line) and such upper income limit increased by 5 

percentage points; and 

(ii) notwithstanding the requirement in subparagraph (A) with respect to use of modified adjusted 

gross income, utilize as the applicable income of such 

individual, in determining such income eligibility, an 

amount equal to the modified adjusted gross income 

applicable to such individual reduced by such dollar 

equivalent amount. 

(14) EXCLUSION OF COMPENSATION FOR PARTICIPATION IN A

CLINICAL TRIAL FOR TESTING OF TREATMENTS FOR A RARE DISEASE OR CONDITION.—The first $2,000 received by an individual (who has attained 19 years of age) as compensation for 


emcdonald on DSK67QTVN1PROD with HEARING
342 

participation in a clinical trial meeting the requirements of section 1612(b)(26) shall be disregarded for purposes of determining the income eligibility of such individual for medical assistance under the State plan or any waiver of such plan. 

(f) Notwithstanding any other provision of this title, except as 

provided in subsection (e) and section 1619(b)(3) and section 1924, 

except with respect to qualified disabled and working individuals 

(described in section 1905(s)), and except with respect to qualified 

medicare beneficiaries, qualified severely impaired individuals, and 

individuals described in subsection (m)(1), no State not eligible to 

participate in the State plan program established under title XVI 

shall be required to provide medical assistance to any aged, blind, 

or disabled individual (within the meaning of title XVI) for any 

month unless such State would be (or would have been) required 

to provide medical assistance to such individual for such month 

had its plan for medical assistance approved under this title and 

in effect on January 1, 1972, been in effect in such month, except 

that for this purpose any such individual shall be deemed eligible 

for medical assistance under such State plan if (in addition to 

meeting such other requirements as are or may be imposed under 

the State plan) the income of any such individual as determined in 

accordance with section 1903(f) (after deducting any supplemental 

security income payment and State supplementary payment made 

with respect to such individual, and incurred expenses for medical 

care as recognized under State law regardless of whether such expenses are reimbursed under another public program of the State 

or political subdivision thereof) is not in excess of the standard for 

medical assistance established under the State plan as in effect on 

January 1, 1972. In States which provide medical assistance to individuals pursuant to paragraph (10)(C) of subsection (a) of this 

section, an individual who is eligible for medical assistance by reason of the requirements of this section concerning the deduction of 

incurred medical expenses from income shall be considered an individual eligible for medical assistance under paragraph (10)(A) of 

that subsection if that individual is, or is eligible to be (1) an individual with respect to whom there is payable a State supplementary payment on the basis of which similarly situated individuals are eligible to receive medical assistance equal in amount, duration, and scope to that provided to individuals eligible under 

paragraph (10)(A), or (2) an eligible individual or eligible spouse, 

as defined in title XVI, with respect to whom supplemental security 

income benefits are payable; otherwise that individual shall be considered to be an individual eligible for medical assistance under 

paragraph (10)(C) of that subsection. In States which do not provide medical assistance to individuals pursuant to paragraph 

(10)(C) of that subsection, an individual who is eligible for medical 

assistance by reason of the requirements of this section concerning 

the deduction of incurred medical expenses from income shall be 

considered an individual eligible for medical assistance under paragraph (10)(A) of that subsection. 

(g) In addition to any other sanction available to a State, a State 

may provide for a reduction of any payment amount otherwise due 

with respect to a person who furnishes services under the plan in 

an amount equal to up to three times the amount of any payment 


emcdonald on DSK67QTVN1PROD with HEARING
343 

sought to be collected by that person in violation of subsection 

(a)(25)(C). 

(h) Nothing in this title (including subsections (a)(13) and (a)(30) 

of this section) shall be construed as authorizing the Secretary to 

limit the amount of payment that may be made under a plan under 

this title for home and community care. 

(i)(1) In addition to any other authority under State law, where 

a State determines that a intermediate care facility for the mentally retarded which is certified for participation under its plan no 

longer substantially meets the requirements for such a facility 

under this title and further determines that the facility’s deficiencies— 

(A) immediately jeopardize the health and safety of its patients, the State shall provide for the termination of the facility’s certification for participation under the plan and may provide, or 

(B) do not immediately jeopardize the health and safety of its 

patients, the State may, in lieu of providing for terminating 

the facility’s certification for participation under the plan, establish alternative remedies if the State demonstrates to the 

Secretary’s satisfaction that the alternative remedies are effective in deterring noncompliance and correcting deficiencies, 

and may provide 

that no payment will be made under the State plan with respect 

to any individual admitted to such facility after a date specified by 

the State. 

(2) The State shall not make such a decision with respect to a 

facility until the facility has had a reasonable opportunity, following the initial determination that it no longer substantially 

meets the requirements for such a facility under this title, to correct its deficiencies, and, following this period, has been given reasonable notice and opportunity for a hearing. 

(3) The State’s decision to deny payment may be made effective 

only after such notice to the public and to the facility as may be 

provided for by the State, and its effectiveness shall terminate (A) 

when the State finds that the facility is in substantial compliance 

(or is making good faith efforts to achieve substantial compliance) 

with the requirements for such a facility under this title, or (B) in 

the case described in paragraph (1)(B), with the end of the eleventh 

month following the month such decision is made effective, whichever occurs first. If a facility to which clause (B) of the previous 

sentence applies still fails to substantially meet the provisions of 

the respective section on the date specified in such clause, the 

State shall terminate such facility’s certification for participation 

under the plan effective with the first day of the first month following the month specified in such clause. 

(j) Notwithstanding any other requirement of this title, the Secretary may waive or modify any requirement of this title with respect to the medical assistance program in American Samoa and 

the Northern Mariana Islands, other than a waiver of the Federal 

medical assistance percentage, the limitation in section 1108(f), or 

the requirement that payment may be made for medical assistance 

only with respect to amounts expended by American Samoa or the 

Northern Mariana Islands for care and services described in a 

numbered paragraph of section 1905(a). 


emcdonald on DSK67QTVN1PROD with HEARING
344 

(k)(1) The medical assistance provided to an individual described 

in subclause (VIII) of subsection (a)(10)(A)(i) shall consist of benchmark coverage described in section 1937(b)(1) or benchmark equivalent coverage described in section 1937(b)(2). Such medical assistance shall be provided subject to the requirements of section 1937, 

without regard to whether a State otherwise has elected the option 

to provide medical assistance through coverage under that section, 

unless an individual described in subclause (VIII) of subsection 

(a)(10)(A)(i) is also an individual for whom, under subparagraph (B) 

of section 1937(a)(2), the State may not require enrollment in 

benchmark coverage described in subsection (b)(1) of section 1937 

or benchmark equivalent coverage described in subsection (b)(2) of 

that section. 

(2) Beginning with the first day of any fiscal year quarter that 

begins on or after April 1, 2010, and before January 1, 2014, a 

State may elect through a State plan amendment to provide medical assistance to individuals who would be described in subclause 

(VIII) of subsection (a)(10)(A)(i) if that subclause were effective before January 1, 2014. A State may elect to phase-in the extension 

of eligibility for medical assistance to such individuals based on income, so long as the State does not extend such eligibility to individuals described in such subclause with higher income before 

making individuals described in such subclause with lower income 

eligible for medical assistance. 

(3) If an individual described in subclause (VIII) of subsection 

(a)(10)(A)(i) is the parent of a child who is under 19 years of age 

(or such higher age as the State may have elected) who is eligible 

for medical assistance under the State plan or under a waiver of 

such plan (under that subclause or under a State plan amendment 

under paragraph (2), the individual may not be enrolled under the 

State plan unless the individual’s child is enrolled under the State 

plan or under a waiver of the plan or is enrolled in other health 

insurance coverage. For purposes of the preceding sentence, the 

term ‘‘parent’’ includes an individual treated as a caretaker relative 

for purposes of carrying out section 1931. 

(l)(1) Individuals described in this paragraph are— 

(A) women during pregnancy (and during the 60-day period 

beginning on the last day of the pregnancy), 

(B) infants under one year of age, 

(C) children who have attained one year of age but have not 

attained 6 years of age, and 

(D) children born after September 30, 1983 (or, at the option 

of a State, after any earlier date), who have attained 6 years 

of age but have not attained 19 years of age, 

who are not described in any of subclauses (I) through (III) of subsection (a)(10)(A)(i) and whose family income does not exceed the 

income level established by the State under paragraph (2) for a 

family size equal to the size of the family, including the woman, 

infant, or child. 

(2)(A)(i) For purposes of paragraph (1) with respect to individuals 

described in subparagraph (A) or (B) of that paragraph, the State 

shall establish an income level which is a percentage (not less than 

the percentage provided under clause (ii) and not more than 185 

percent) of the income official poverty line (as defined by the Office 

of Management and Budget, and revised annually in accordance 


emcdonald on DSK67QTVN1PROD with HEARING
345 

with section 673(2) of the Omnibus Budget Reconciliation Act of 

1981) applicable to a family of the size involved. 

(ii) The percentage provided under this clause, with respect to 

eligibility for medical assistance on or after— 

(I) July 1, 1989, is 75 percent, or, if greater, the percentage 

provided under clause (iii), and 

(II) April 1, 1990, 133 percent, or, if greater, the percentage 

provided under clause (iv). 

(iii) In the case of a State which, as of the date of the enactment 

of this clause, has elected to provide, and provides, medical assistance to individuals described in this subsection or has enacted legislation authorizing, or appropriating funds, to provide such assistance to such individuals before July 1, 1989, the percentage provided under clause (ii)(I) shall not be less than— 

(I) the percentage specified by the State in an amendment to 

its State plan (whether approved or not) as of the date of the 

enactment of this clause, or 

(II) if no such percentage is specified as of the date of the 

enactment of this clause, the percentage established under the 

State’s authorizing legislation or provided for under the State’s 

appropriations; 

but in no case shall this clause require the percentage provided 

under clause (ii)(I) to exceed 100 percent. 

(iv) In the case of a State which, as of the date of the enactment 

of this clause, has established under clause (i), or has enacted legislation authorizing, or appropriating funds, to provide for, a percentage (of the income official poverty line) that is greater than 133 

percent, the percentage provided under clause (ii) for medical assistance on or after April 1, 1990, shall not be less than— 

(I) the percentage specified by the State in an amendment to 

its State plan (whether approved or not) as of the date of the 

enactment of this clause, or 

(II) if no such percentage is specified as of the date of the 

enactment of this clause, the percentage established under the 

State’s authorizing legislation or provided for under the State’s 

appropriations. 

(B) For purposes of paragraph (1) with respect to individuals described in subparagraph (C) of such paragraph, the State shall establish an income level which is equal to 133 percent of the income 

official poverty line described in subparagraph (A) applicable to a 

family of the size involved. 

(C) For purposes of paragraph (1) with respect to individuals described in subparagraph (D) of that paragraph, the State shall establish an income level which is equal to 100 percent (or, beginning 

January 1, 2014, 133 percent) of the income official poverty line described in subparagraph (A) applicable to a family of the size involved. 

(3) Notwithstanding subsection (a)(17), for individuals who are 

eligible for medical assistance because of subsection 

(a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), or 

(a)(10)(A)(ii)(IX)— 

(A) application of a resource standard shall be at the option 

of the State; 

(B) any resource standard or methodology that is applied 

with respect to an individual described in subparagraph (A) of 


emcdonald on DSK67QTVN1PROD with HEARING
346 

paragraph (1) may not be more restrictive than the resource 

standard or methodology that is applied under title XVI; 

(C) any resource standard or methodology that is applied 

with respect to an individual described in subparagraph (B), 

(C), or (D) of paragraph (1) may not be more restrictive than 

the corresponding methodology that is applied under the State 

plan under part A of title IV; 

(D) the income standard to be applied is the appropriate income standard established under paragraph (2); and 

(E) family income shall be determined in accordance with the 

methodology employed under the State plan under part A or 

E of title IV (except to the extent such methodology is inconsistent with clause (D) of subsection (a)(17)), and costs incurred 

for medical care or for any other type of remedial care shall not 

be taken into account. 

Any different treatment provided under this paragraph for such individuals shall not, because of subsection (a)(17), require or permit 

such treatment for other individuals. 

(4)(A) In the case of any State which is providing medical assistance to its residents under a waiver granted under section 1115, 

the Secretary shall require the State to provide medical assistance 

for pregnant women and infants under age 1 described in subsection (a)(10)(A)(i)(IV) and for children described in subsection 

(a)(10)(A)(i)(VI) or subsection (a)(10)(A)(i)(VII) in the same manner 

as the State would be required to provide such assistance for such 

individuals if the State had in effect a plan approved under this 

title. 

(B) In the case of a State which is not one of the 50 States or 

the District of Columbia, the State need not meet the requirement 

of subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), or (a)(10)(A)(i)(VII) 

and, for purposes of paragraph (2)(A), the State may substitute for 

the percentage provided under clause (ii) of such paragraph any 

percentage. 

(m)(1) Individuals described in this paragraph are individuals— 

(A) who are 65 years of age or older or are disabled individuals (as determined under section 1614(a)(3)), 

(B) whose income (as determined under section 1612 for purposes of the supplemental security income program, except as 

provided in paragraph (2)(C)) does not exceed an income level 

established by the State consistent with paragraph (2)(A), and 

(C) whose resources (as determined under section 1613 for 

purposes of the supplemental security income program) do not 

exceed (except as provided in paragraph (2)(B)) the maximum 

amount of resources that an individual may have and obtain 

benefits under that program. 

(2)(A) The income level established under paragraph (1)(B) may 

not exceed a percentage (not more than 100 percent) of the official 

poverty line (as defined by the Office of Management and Budget, 

and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of 

the size involved. 

(B) In the case of a State that provides medical assistance to individuals not described in subsection (a)(10)(A) and at the State’s 

option, the State may use under paragraph (1)(C) such resource 

level (which is higher than the level described in that paragraph) 


emcdonald on DSK67QTVN1PROD with HEARING
347 

as may be applicable with respect to individuals described in paragraph (1)(A) who are not described in subsection (a)(10)(A). 

(C) The provisions of section 1905(p)(2)(D) shall apply to determinations of income under this subsection in the same manner as 

they apply to determinations of income under section 1905(p). 

(3) Notwithstanding subsection (a)(17), for individuals described 

in paragraph (1) who are covered under the State plan by virtue 

of subsection (a)(10)(A)(ii)(X)— 

(A) the income standard to be applied is the income standard 

described in paragraph (1)(B), and 

(B) except as provided in section 1612(b)(4)(B)(ii), costs incurred for medical care or for any other type of remedial care 

shall not be taken into account in determining income. 

Any different treatment provided under this paragraph for such individuals shall not, because of subsection (a)(17), require or permit 

such treatment for other individuals. 

(4) Notwithstanding subsection (a)(17), for qualified medicare 

beneficiaries described in section 1905(p)(1)— 

(A) the income standard to be applied is the income standard 

described in section 1905(p)(1)(B), and 

(B) except as provided in section 1612(b)(4)(B)(ii), costs incurred for medical care or for any other type of remedial care 

shall not be taken into account in determining income. 

Any different treatment provided under this paragraph for such individuals shall not, because of subsection (a)(17), require or permit 

such treatment for other individuals. 

(n)(1) In the case of medical assistance furnished under this title 

for medicare cost-sharing respecting the furnishing of a service or 

item to a qualified medicare beneficiary, the State plan may provide payment in an amount with respect to the service or item that 

results in the sum of such payment amount and any amount of 

payment made under title XVIII with respect to the service or item 

exceeding the amount that is otherwise payable under the State 

plan for the item or service for eligible individuals who are not 

qualified medicare beneficiaries. 

(2) In carrying out paragraph (1), a State is not required to provide any payment for any expenses incurred relating to payment 

for deductibles, coinsurance, or copayments for medicare cost-sharing to the extent that payment under title XVIII for the service 

would exceed the payment amount that otherwise would be made 

under the State plan under this title for such service if provided 

to an eligible recipient other than a medicare beneficiary. 

(3) In the case in which a State’s payment for medicare cost-sharing for a qualified medicare beneficiary with respect to an item or 

service is reduced or eliminated through the application of paragraph (2)— 

(A) for purposes of applying any limitation under title XVIII 

on the amount that the beneficiary may be billed or charged 

for the service, the amount of payment made under title XVIII 

plus the amount of payment (if any) under the State plan shall 

be considered to be payment in full for the service; 

(B) the beneficiary shall not have any legal liability to make 

payment to a provider or to an organization described in section 1903(m)(1)(A) for the service; and 


emcdonald on DSK67QTVN1PROD with HEARING
348 

(C) any lawful sanction that may be imposed upon a provider 

or such an organization for excess charges under this title or 

title XVIII shall apply to the imposition of any charge imposed 

upon the individual in such case. 

This paragraph shall not be construed as preventing payment of 

any medicare cost-sharing by a medicare supplemental policy or an 

employer retiree health plan on behalf of an individual. 

(o) Notwithstanding any provision of subsection (a) to the contrary, a State plan under this title shall provide that any supplemental security income benefits paid by reason of subparagraph (E) 

or (G) of section 1611(e)(1) to an individual who— 

(1) is eligible for medical assistance under the plan, and 

(2) is in a hospital, skilled nursing facility, or intermediate 

care facility at the time such benefits are paid, 

will be disregarded for purposes of determining the amount of any 

post-eligibility contribution by the individual to the cost of the care 

and services provided by the hospital, skilled nursing facility, or intermediate care facility. 

(p)(1) In addition to any other authority, a State may exclude any 

individual or entity for purposes of participating under the State 

plan under this title for any reason for which the Secretary could 

exclude the individual or entity from participation in a program 

under title XVIII under section 1128, 1128A, or 1866(b)(2). 

(2) In order for a State to receive payments for medical assistance under section 1903(a), with respect to payments the State 

makes to a medicaid managed care organization (as defined in section 1903(m)) or to an entity furnishing services under a waiver approved under section 1915(b)(1), the State must provide that it will 

exclude from participation, as such an organization or entity, any 

organization or entity that— 

(A) could be excluded under section 1128(b)(8) (relating to 

owners and managing employees who have been convicted of 

certain crimes or received other sanctions), 

(B) has, directly or indirectly, a substantial contractual relationship (as defined by the Secretary) with an individual or entity that is described in section 1128(b)(8)(B), or 

(C) employs or contracts with any individual or entity that 

is excluded from participation under this title under section 

1128 or 1128A for the provision of health care, utilization review, medical social work, or administrative services or employs or contracts with any entity for the provision (directly or 

indirectly) through such an excluded individual or entity of 

such services. 

(3) As used in this subsection, the term ‘‘exclude’’ includes the refusal to enter into or renew a participation agreement or the termination of such an agreement. 

(q)(1)(A) In order to meet the requirement of subsection (a)(50), 

the State plan must provide that, in the case of an institutionalized 

individual or couple described in subparagraph (B), in determining 

the amount of the individual’s or couple’s income to be applied 

monthly to payment for the cost of care in an institution, there 

shall be deducted from the monthly income (in addition to other allowances otherwise provided under the State plan) a monthly personal needs allowance— 


emcdonald on DSK67QTVN1PROD with HEARING
349 

(i) which is reasonable in amount for clothing and other personal needs of the individual (or couple) while in an institution, 

and 

(ii) which is not less (and may be greater) than the minimum 

monthly personal needs allowance described in paragraph (2). 

(B) In this subsection, the term ‘‘institutionalized individual or 

couple’’ means an individual or married couple— 

(i) who is an inpatient (or who are inpatients) in a medical 

institution or nursing facility for which payments are made 

under this title throughout a month, and 

(ii) who is or are determined to be eligible for medical assistance under the State plan. 

(2) The minimum monthly personal needs allowance described in this paragraph is $30 for an institutionalized individual and $60 

for an institutionalized couple (if both are aged, blind, or disabled, 

and their incomes are considered available to each other in determining eligibility). 

(r)(1)(A) For purposes of sections 1902(a)(17) and 1924(d)(1)(D) 

and for purposes of a waiver under section 1915, with respect to 

the post-eligibility treatment of income of individuals who are institutionalized or receiving home or community-based services under 

such a waiver, the treatment described in subparagraph (B) shall 

apply, there shall be disregarded reparation payments made by the 

Federal Republic of Germany, and there shall be taken into account amounts for incurred expenses for medical or remedial care 

that are not subject to payment by a third party, including— 

(i) medicare and other health insurance premiums, 

deductibles, or coinsurance, and 

(ii) necessary medical or remedial care recognized under 

State law but not covered under the State plan under this title, 

subject to reasonable limits the State may establish on the 

amount of these expenses. 

(B)(i) In the case of a veteran who does not have a spouse or a 

child, if the veteran— 

(I) receives, after the veteran has been determined to be eligible for medical assistance under the State plan under this 

title, a veteran’s pension in excess of $90 per month, and 

(II) resides in a State veterans home with respect to which 

the Secretary of Veterans Affairs makes per diem payments for 

nursing home care pursuant to section 1741(a) of title 38, 

United States Code, 

any such pension payment, including any payment made due to the 

need for aid and attendance, or for unreimbursed medical expenses, 

that is in excess of $90 per month shall be counted as income only 

for the purpose of applying such excess payment to the State veterans home’s cost of providing nursing home care to the veteran. 

(ii) The provisions of clause (i) shall apply with respect to a surviving spouse of a veteran who does not have a child in the same 

manner as they apply to a veteran described in such clause. 

(2)(A) The methodology to be employed in determining income 

and resource eligibility for individuals under subsection 

(a)(10)(A)(i)(III), (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), (a)(10)(A)(i)(VII), 

(a)(10)(A)(ii), (a)(10)(C)(i)(III), or (f) or under section 1905(p) may 

be less restrictive, and shall be no more restrictive, than the methodology— 


emcdonald on DSK67QTVN1PROD with HEARING
350 

(i) in the case of groups consisting of aged, blind, or disabled 

individuals, under the supplemental security income program 

under title XVI, or 

(ii) in the case of other groups, under the State plan most 

closely categorically related. 

(B) For purposes of this subsection and subsection (a)(10), methodology is considered to be ‘‘no more restrictive’’ if, using the methodology, additional individuals may be eligible for medical assistance and no individuals who are otherwise eligible are made ineligible for such assistance. 

(s) In order to meet the requirements of subsection (a)(55), the 

State plan must provide that payments to hospitals under the plan 

for inpatient hospital services furnished to infants who have not attained the age of 1 year, and to children who have not attained the 

age of 6 years and who receive such services in a disproportionate 

share hospital described in section 1923(b)(1), shall— 

(1) if made on a prospective basis (whether per diem, per 

case, or otherwise) provide for an outlier adjustment in payment amounts for medically necessary inpatient hospital services involving exceptionally high costs or exceptionally long 

lengths of stay, 

(2) not be limited by the imposition of day limits with respect 

to the delivery of such services to such individuals, and 

(3) not be limited by the imposition of dollar limits (other 

than such limits resulting from prospective payments as adjusted pursuant to paragraph (1)) with respect to the delivery 

of such services to any such individual who has not attained 

their first birthday (or in the case of such an individual who 

is an inpatient on his first birthday until such individual is 

discharged). 

(t) Nothing in this title (including sections 1903(a) and 1905(a)) 

shall be construed as authorizing the Secretary to deny or limit 

payments to a State for expenditures, for medical assistance for 

items or services, attributable to taxes of general applicability imposed with respect to the provision of such items or services. 

(u)(1) Individuals described in this paragraph are individuals— 

(A) who are entitled to elect COBRA continuation coverage 

(as defined in paragraph (3)), 

(B) whose income (as determined under section 1612 for purposes of the supplemental security income program) does not 

exceed 100 percent of the official poverty line (as defined by 

the Office of Management and Budget, and revised annually in 

accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved, 

(C) whose resources (as determined under section 1613 for 

purposes of the supplemental security income program) do not 

exceed twice the maximum amount of resources that an individual may have and obtain benefits under that program, and 

(D) with respect to whose enrollment for COBRA continuation coverage the State has determined that the savings in expenditures under this title resulting from such enrollment is 

likely to exceed the amount of payments for COBRA premiums 

made. 


emcdonald on DSK67QTVN1PROD with HEARING
351 

(2) For purposes of subsection (a)(10)(F) and this subsection, the 

term ‘‘COBRA premiums’’ means the applicable premium imposed 

with respect to COBRA continuation coverage. 

(3) In this subsection, the term ‘‘COBRA continuation coverage’’ 

means coverage under a group health plan provided by an employer with 75 or more employees provided pursuant to title XXII 

of the Public Health Service Act, section 4980B of the Internal Revenue Code of 1986, or title VI of the Employee Retirement Income 

Security Act of 1974. 

(4) Notwithstanding subsection (a)(17), for individuals described 

in paragraph (1) who are covered under the State plan by virtue 

of subsection (a)(10)(A)(ii)(XI)— 

(A) the income standard to be applied is the income standard 

described in paragraph (1)(B), and 

(B) except as provided in section 1612(b)(4)(B)(ii), costs incurred for medical care or for any other type of remedial care 

shall not be taken into account in determining income. 

Any different treatment provided under this paragraph for such individuals shall not, because of subsection (a)(10)(B) or (a)(17), require or permit such treatment for other individuals. 

(v) A State plan may provide for the making of determinations 

of disability or blindness for the purpose of determining eligibility 

for medical assistance under the State plan by the single State 

agency or its designee, and make medical assistance available to 

individuals whom it finds to be blind or disabled and who are determined otherwise eligible for such assistance during the period of 

time prior to which a final determination of disability or blindness 

is made by the Social Security Administration with respect to such 

an individual. In making such determinations, the State must 

apply the definitions of disability and blindness found in section 

1614(a) of the Social Security Act. 

(w)(1) For purposes of subsection (a)(57) and sections 

1903(m)(1)(A) and 1919(c)(2)(E), the requirement of this subsection 

is that a provider or organization (as the case may be) maintain 

written policies and procedures with respect to all adult individuals 

receiving medical care by or through the provider or organization— 

(A) to provide written information to each such individual 

concerning— 

(i) an individual’s rights under State law (whether statutory or as recognized by the courts of the State) to make 

decisions concerning such medical care, including the right 

to accept or refuse medical or surgical treatment and the 

right to formulate advance directives (as defined in paragraph (3)), and 

(ii) the provider’s or organization’s written policies respecting the implementation of such rights; 

(B) to document in the individual’s medical record whether 

or not the individual has executed an advance directive; 

(C) not to condition the provision of care or otherwise discriminate against an individual based on whether or not the 

individual has executed an advance directive; 

(D) to ensure compliance with requirements of State law 

(whether statutory or as recognized by the courts of the State) 

respecting advance directives; and 


emcdonald on DSK67QTVN1PROD with HEARING
352 

(E) to provide (individually or with others) for education for 

staff and the community on issues concerning advance directives. 

Subparagraph (C) shall not be construed as requiring the provision 

of care which conflicts with an advance directive. 

(2) The written information described in paragraph (1)(A) shall 

be provided to an adult individual— 

(A) in the case of a hospital, at the time of the individual’s 

admission as an inpatient, 

(B) in the case of a nursing facility, at the time of the individual’s admission as a resident, 

(C) in the case of a provider of home health care or personal 

care services, in advance of the individual coming under the 

care of the provider, 

(D) in the case of a hospice program, at the time of initial 

receipt of hospice care by the individual from the program, and 

(E) in the case of a medicaid managed care organization, at 

the time of enrollment of the individual with the organization. 

(3) Nothing in this section shall be construed to prohibit the application of a State law which allows for an objection on the basis 

of conscience for any health care provider or any agent of such provider which as a matter of conscience cannot implement an advance directive. 

(4) In this subsection, the term ‘‘advance directive’’ means a written instruction, such as a living will or durable power of attorney 

for health care, recognized under State law (whether statutory or 

as recognized by the courts of the State) and relating to the provision of such care when the individual is incapacitated. 

(5) For construction relating to this subsection, see section 7 of 

the Assisted Suicide Funding Restriction Act of 1997 (relating to 

clarification respecting assisted suicide, euthanasia, and mercy killing). 

(x) The Secretary shall establish a system, for implementation by 

not later than July 1, 1991, which provides for a unique identifier 

for each physician who furnishes services for which payment may 

be made under a State plan approved under this title. 

(y)(1) In addition to any other authority under State law, where 

a State determines that a psychiatric hospital which is certified for 

participation under its plan no longer meets the requirements for 

a psychiatric hospital (referred to in section 1905(h)) and further 

finds that the hospital’s deficiencies— 

(A) immediately jeopardize the health and safety of its patients, the State shall terminate the hospital’s participation 

under the State plan; or 

(B) do not immediately jeopardize the health and safety of its 

patients, the State may terminate the hospital’s participation 

under the State plan, or provide that no payment will be made 

under the State plan with respect to any individual admitted 

to such hospital after the effective date of the finding, or both. 

(2) Except as provided in paragraph (3), if a psychiatric hospital 

described in paragraph (1)(B) has not complied with the requirements for a psychiatric hospital under this title— 

(A) within 3 months after the date the hospital is found to 

be out of compliance with such requirements, the State shall 

provide that no payment will be made under the State plan 


emcdonald on DSK67QTVN1PROD with HEARING
353 

with respect to any individual admitted to such hospital after 

the end of such 3-month period, or 

(B) within 6 months after the date the hospital is found to 

be out of compliance with such requirements, no Federal financial participation shall be provided under section 1903(a) with 

respect to further services provided in the hospital until the 

State finds that the hospital is in compliance with the requirements of this title. 

(3) The Secretary may continue payments, over a period of not 

longer than 6 months from the date the hospital is found to be out 

of compliance with such requirements, if— 

(A) the State finds that it is more appropriate to take alternative action to assure compliance of the hospital with the requirements than to terminate the certification of the hospital, 

(B) the State has submitted a plan and timetable for corrective action to the Secretary for approval and the Secretary approves the plan of corrective action, and 

(C) the State agrees to repay to the Federal Government 

payments received under this paragraph if the corrective action is not taken in accordance with the approved plan and 

timetable. 

(z)(1) Individuals described in this paragraph are individuals not 

described in subsection (a)(10)(A)(i)— 

(A) who are infected with tuberculosis; 

(B) whose income (as determined under the State plan under 

this title with respect to disabled individuals) does not exceed 

the maximum amount of income a disabled individual described in subsection (a)(10)(A)(i) may have and obtain medical 

assistance under the plan; and 

(C) whose resources (as determined under the State plan 

under this title with respect to disabled individuals) do not exceed the maximum amount of resources a disabled individual 

described in subsection (a)(10)(A)(i) may have and obtain medical assistance under the plan. 

(2) For purposes of subsection (a)(10), the term ‘‘TB-related services’’ means each of the following services relating to treatment of 

infection with tuberculosis: 

(A) Prescribed drugs. 

(B) Physicians’ services and services described in section 

1905(a)(2). 

(C) Laboratory and X-ray services (including services to confirm the presence of infection). 

(D) Clinic services and Federally-qualified health center 

services. 

(E) Case management services (as defined in section 

1915(g)(2)). 

(F) Services (other than room and board) designed to encourage completion of regimens of prescribed drugs by outpatients, 

including services to observe directly the intake of prescribed 

drugs. 

(aa) Individuals described in this subsection are individuals 

who— 

(1) are not described in subsection (a)(10)(A)(i); 

(2) have not attained age 65; 


emcdonald on DSK67QTVN1PROD with HEARING
354 

(3) have been screened for breast and cervical cancer under 

the Centers for Disease Control and Prevention breast and cervical cancer early detection program established under title XV 

of the Public Health Service Act (42 U.S.C. 300k et seq.) in accordance with the requirements of section 1504 of that Act (42 

U.S.C. 300n) and need treatment for breast or cervical cancer; 

and 

(4) are not otherwise covered under creditable coverage, as 

defined in section 2701(c) of the Public Health Service Act (42 

U.S.C. 300gg(c)), but applied without regard to paragraph 

(1)(F) of such section. 

(bb) PAYMENT FOR SERVICES PROVIDED BY FEDERALLY-QUALIFIED

HEALTH CENTERS AND RURAL HEALTH CLINICS.— 

(1) IN GENERAL.—Beginning with fiscal year 2001 with respect to services furnished on or after January 1, 2001, and 

each succeeding fiscal year, the State plan shall provide for 

payment for services described in section 1905(a)(2)(C) furnished by a Federally-qualified health center and services described in section 1905(a)(2)(B) furnished by a rural health 

clinic in accordance with the provisions of this subsection. 

(2) FISCAL YEAR 2001.—Subject to paragraph (4), for services 

furnished on and after January 1, 2001, during fiscal year 

2001, the State plan shall provide for payment for such services in an amount (calculated on a per visit basis) that is equal 

to 100 percent of the average of the costs of the center or clinic 

of furnishing such services during fiscal years 1999 and 2000 

which are reasonable and related to the cost of furnishing such 

services, or based on such other tests of reasonableness as the 

Secretary prescribes in regulations under section 1833(a)(3), or, 

in the case of services to which such regulations do not apply, 

the same methodology used under section 1833(a)(3), adjusted 

to take into account any increase or decrease in the scope of 

such services furnished by the center or clinic during fiscal 

year 2001. 

(3) FISCAL YEAR 2002 AND SUCCEEDING FISCAL YEARS.—Subject to paragraph (4), for services furnished during fiscal year 

2002 or a succeeding fiscal year, the State plan shall provide 

for payment for such services in an amount (calculated on a 

per visit basis) that is equal to the amount calculated for such 

services under this subsection for the preceding fiscal year— 

(A) increased by the percentage increase in the MEI (as 

defined in section 1842(i)(3)) applicable to primary care 

services (as defined in section 1842(i)(4)) for that fiscal 

year; and 

(B) adjusted to take into account any increase or decrease in the scope of such services furnished by the center 

or clinic during that fiscal year. 

(4) ESTABLISHMENT OF INITIAL YEAR PAYMENT AMOUNT FOR

NEW CENTERS OR CLINICS.—In any case in which an entity first 

qualifies as a Federally-qualified health center or rural health 

clinic after fiscal year 2000, the State plan shall provide for 

payment for services described in section 1905(a)(2)(C) furnished by the center or services described in section 

1905(a)(2)(B) furnished by the clinic in the first fiscal year in 

which the center or clinic so qualifies in an amount (calculated 


emcdonald on DSK67QTVN1PROD with HEARING
355 

on a per visit basis) that is equal to 100 percent of the costs 

of furnishing such services during such fiscal year based on the 

rates established under this subsection for the fiscal year for 

other such centers or clinics located in the same or adjacent 

area with a similar case load or, in the absence of such a center or clinic, in accordance with the regulations and methodology referred to in paragraph (2) or based on such other tests 

of reasonableness as the Secretary may specify. For each fiscal 

year following the fiscal year in which the entity first qualifies 

as a Federally-qualified health center or rural health clinic, the 

State plan shall provide for the payment amount to be calculated in accordance with paragraph (3). 

(5) ADMINISTRATION IN THE CASE OF MANAGED CARE.— 

(A) IN GENERAL.—In the case of services furnished by a 

Federally-qualified health center or rural health clinic pursuant to a contract between the center or clinic and a managed care entity (as defined in section 1932(a)(1)(B)), the 

State plan shall provide for payment to the center or clinic 

by the State of a supplemental payment equal to the 

amount (if any) by which the amount determined under 

paragraphs (2), (3), and (4) of this subsection exceeds the 

amount of the payments provided under the contract. 

(B) PAYMENT SCHEDULE.—The supplemental payment required under subparagraph (A) shall be made pursuant to 

a payment schedule agreed to by the State and the Federally-qualified health center or rural health clinic, but in no 

case less frequently than every 4 months. 

(6) ALTERNATIVE PAYMENT METHODOLOGIES.—Notwithstanding any other provision of this section, the State plan 

may provide for payment in any fiscal year to a Federallyqualified health center for services described in section 

1905(a)(2)(C) or to a rural health clinic for services described 

in section 1905(a)(2)(B) in an amount which is determined 

under an alternative payment methodology that— 

(A) is agreed to by the State and the center or clinic; and 

(B) results in payment to the center or clinic of an 

amount which is at least equal to the amount otherwise 

required to be paid to the center or clinic under this section. 

(cc)(1) Individuals described in this paragraph are individuals— 

(A) who are children who have not attained 19 years of age 

and are born— 

(i) on or after January 1, 2001 (or, at the option of a 

State, on or after an earlier date), in the case of the second, third, and fourth quarters of fiscal year 2007; 

(ii) on or after October 1, 1995 (or, at the option of a 

State, on or after an earlier date), in the case of each quarter of fiscal year 2008; and 

(iii) after October 1, 1989, in the case of each quarter of 

fiscal year 2009 and each quarter of any fiscal year thereafter; 

(B) who would be considered disabled under section 

1614(a)(3)(C) (as determined under title XVI for children but 

without regard to any income or asset eligibility requirements 

that apply under such title with respect to children); and 


emcdonald on DSK67QTVN1PROD with HEARING
356 

(C) whose family income does not exceed such income level 

as the State establishes and does not exceed— 

(i) 300 percent of the poverty line (as defined in section 

2110(c)(5)) applicable to a family of the size involved; or 

(ii) such higher percent of such poverty line as a State 

may establish, except that— 

(I) any medical assistance provided to an individual 

whose family income exceeds 300 percent of such poverty line may only be provided with State funds; and 

(II) no Federal financial participation shall be provided under section 1903(a) for any medical assistance 

provided to such an individual. 

(2)(A) If an employer of a parent of an individual described in 

paragraph (1) offers family coverage under a group health plan (as 

defined in section 2791(a) of the Public Health Service Act), the 

State shall— 

(i) notwithstanding section 1906, require such parent to 

apply for, enroll in, and pay premiums for such coverage as a 

condition of such parent’s child being or remaining eligible for 

medical assistance under subsection (a)(10)(A)(ii)(XIX) if the 

parent is determined eligible for such coverage and the employer contributes at least 50 percent of the total cost of annual premiums for such coverage; and 

(ii) if such coverage is obtained— 

(I) subject to paragraph (2) of section 1916(h), reduce the 

premium imposed by the State under that section in an 

amount that reasonably reflects the premium contribution 

made by the parent for private coverage on behalf of a 

child with a disability; and 

(II) treat such coverage as a third party liability under 

subsection (a)(25). 

(B) In the case of a parent to which subparagraph (A) applies, 

a State, notwithstanding section 1906 but subject to paragraph 

(1)(C)(ii), may provide for payment of any portion of the annual 

premium for such family coverage that the parent is required to 

pay. Any payments made by the State under this subparagraph 

shall be considered, for purposes of section 1903(a), to be payments 

for medical assistance. 

(dd) ELECTRONIC TRANSMISSION OF INFORMATION.—If the State 

agency determining eligibility for medical assistance under this 

title or child health assistance under title XXI verifies an element 

of eligibility based on information from an Express Lane Agency 

(as defined in subsection (e)(13)(F)), or from another public agency, 

then the applicant’s signature under penalty of perjury shall not be 

required as to such element. Any signature requirement for an application for medical assistance may be satisfied through an electronic signature, as defined in section 1710(1) of the Government 

Paperwork Elimination Act (44 U.S.C. 3504 note). The requirements of subparagraphs (A) and (B) of section 1137(d)(2) may be 

met through evidence in digital or electronic form. 

(ee)(1) For purposes of subsection (a)(46)(B)(ii), the requirements 

of this subsection with respect to an individual declaring to be a 

citizen or national of the United States for purposes of establishing 

eligibility under this title, are, in lieu of requiring the individual 

to present satisfactory documentary evidence of citizenship or naVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00362 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
357 

tionality under section 1903(x) (if the individual is not described in 

paragraph (2) of that section), as follows: 

(A) The State submits the name and social security number 

of the individual to the Commissioner of Social Security as part 

of the program established under paragraph (2). 

(B) If the State receives notice from the Commissioner of Social Security that the name or social security number, or the 

declaration of citizenship or nationality, of the individual is inconsistent with information in the records maintained by the 

Commissioner— 

(i) the State makes a reasonable effort to identify and 

address the causes of such inconsistency, including 

through typographical or other clerical errors, by contacting the individual to confirm the accuracy of the name 

or social security number submitted or declaration of citizenship or nationality and by taking such additional actions as the Secretary, through regulation or other guidance, or the State may identify, and continues to provide 

the individual with medical assistance while making such 

effort; and 

(ii) in the case such inconsistency is not resolved under 

clause (i), the State— 

(I) notifies the individual of such fact; 

(II) provides the individual with a period of 90 days 

from the date on which the notice required under subclause (I) is received by the individual to either 

present satisfactory documentary evidence of citizenship or nationality (as defined in section 1903(x)(3)) or 

resolve the inconsistency with the Commissioner of Social Security (and continues to provide the individual 

with medical assistance during such 90-day period); 

and 

(III) disenrolls the individual from the State plan 

under this title within 30 days after the end of such 

90-day period if no such documentary evidence is presented or if such inconsistency is not resolved. 

(2)(A) Each State electing to satisfy the requirements of this subsection for purposes of section 1902(a)(46)(B) shall establish a program under which the State submits at least monthly to the Commissioner of Social Security for comparison of the name and social 

security number, of each individual newly enrolled in the State 

plan under this title that month who is not described in section 

1903(x)(2) and who declares to be a United States citizen or national, with information in records maintained by the Commissioner. 

(B) In establishing the State program under this paragraph, the 

State may enter into an agreement with the Commissioner of Social Security— 

(i) to provide, through an on-line system or otherwise, for the 

electronic submission of, and response to, the information submitted under subparagraph (A) for an individual enrolled in 

the State plan under this title who declares to be citizen or national on at least a monthly basis; or 

(ii) to provide for a determination of the consistency of the 

information submitted with the information maintained in the 


emcdonald on DSK67QTVN1PROD with HEARING
358 

records of the Commissioner through such other method as 

agreed to by the State and the Commissioner and approved by 

the Secretary, provided that such method is no more burdensome for individuals to comply with than any burdens that 

may apply under a method described in clause (i). 

(C) The program established under this paragraph shall provide 

that, in the case of any individual who is required to submit a social security number to the State under subparagraph (A) and who 

is unable to provide the State with such number, shall be provided 

with at least the reasonable opportunity to present satisfactory documentary evidence of citizenship or nationality (as defined in section 1903(x)(3)) as is provided under clauses (i) and (ii) of section 

1137(d)(4)(A) to an individual for the submittal to the State of evidence indicating a satisfactory immigration status. 

(3)(A) The State agency implementing the plan approved under 

this title shall, at such times and in such form as the Secretary 

may specify, provide information on the percentage each month 

that the inconsistent submissions bears to the total submissions 

made for comparison for such month. For purposes of this subparagraph, a name, social security number, or declaration of citizenship 

or nationality of an individual shall be treated as inconsistent and 

included in the determination of such percentage only if— 

(i) the information submitted by the individual is not consistent with information in records maintained by the Commissioner of Social Security; 

(ii) the inconsistency is not resolved by the State; 

(iii) the individual was provided with a reasonable period of 

time to resolve the inconsistency with the Commissioner of Social Security or provide satisfactory documentation of citizenship status and did not successfully resolve such inconsistency; 

and 

(iv) payment has been made for an item or service furnished 

to the individual under this title. 

(B) If, for any fiscal year, the average monthly percentage determined under subparagraph (A) is greater than 3 percent— 

(i) the State shall develop and adopt a corrective plan to review its procedures for verifying the identities of individuals 

seeking to enroll in the State plan under this title and to identify and implement changes in such procedures to improve 

their accuracy; and 

(ii) pay to the Secretary an amount equal to the amount 

which bears the same ratio to the total payments under the 

State plan for the fiscal year for providing medical assistance 

to individuals who provided inconsistent information as the 

number of individuals with inconsistent information in excess 

of 3 percent of such total submitted bears to the total number 

of individuals with inconsistent information. 

(C) The Secretary may waive, in certain limited cases, all or part 

of the payment under subparagraph (B)(ii) if the State is unable to 

reach the allowable error rate despite a good faith effort by such 

State. 

(D) Subparagraphs (A) and (B) shall not apply to a State for a 

fiscal year if there is an agreement described in paragraph (2)(B) 

in effect as of the close of the fiscal year that provides for the subVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00364 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
359 

mission on a real-time basis of the information described in such 

paragraph. 

(4) Nothing in this subsection shall affect the rights of any individual under this title to appeal any disenrollment from a State 

plan. 

(ff) Notwithstanding any other requirement of this title or any 

other provision of Federal or State law, a State shall disregard the 

following property from resources for purposes of determining the 

eligibility of an individual who is an Indian for medical assistance 

under this title: 

(1) Property, including real property and improvements, that 

is held in trust, subject to Federal restrictions, or otherwise 

under the supervision of the Secretary of the Interior, located 

on a reservation, including any federally recognized Indian 

Tribe’s reservation, pueblo, or colony, including former reservations in Oklahoma, Alaska Native regions established by the 

Alaska Native Claims Settlement Act, and Indian allotments 

on or near a reservation as designated and approved by the 

Bureau of Indian Affairs of the Department of the Interior. 

(2) For any federally recognized Tribe not described in paragraph (1), property located within the most recent boundaries 

of a prior Federal reservation. 

(3) Ownership interests in rents, leases, royalties, or usage 

rights related to natural resources (including extraction of natural resources or harvesting of timber, other plants and plant 

products, animals, fish, and shellfish) resulting from the exercise of federally protected rights. 

(4) Ownership interests in or usage rights to items not covered by paragraphs (1) through (3) that have unique religious, 

spiritual, traditional, or cultural significance or rights that 

support subsistence or a traditional lifestyle according to applicable tribal law or custom. 

(gg) MAINTENANCE OF EFFORT.— (1) GENERAL REQUIREMENT TO MAINTAIN ELIGIBILITY STANDARDS UNTIL STATE EXCHANGE IS FULLY OPERATIONAL.—Subject 

to the succeeding paragraphs of this subsection, during the period that begins on the date of enactment of the Patient Protection and Affordable Care Act and ends on the date on which 

the Secretary determines that an Exchange established by the 

State under section 1311 of the Patient Protection and Affordable Care Act is fully operational, as a condition for receiving 

any Federal payments under section 1903(a) for calendar quarters occurring during such period, a State shall not have in effect eligibility standards, methodologies, or procedures under 

the State plan under this title or under any waiver of such 

plan that is in effect during that period, that are more restrictive than the eligibility standards, methodologies, or procedures, respectively, under the plan or waiver that are in effect 

on the date of enactment of the Patient Protection and Affordable Care Act. 

(2) CONTINUATION OF ELIGIBILITY STANDARDS FOR CHILDREN

UNTIL OCTOBER 1, 2019.—The requirement under paragraph (1) 

shall continue to apply to a State through September 30, 2019, 

with respect to the eligibility standards, methodologies, and 

procedures under the State plan under this title or under any 


emcdonald on DSK67QTVN1PROD with HEARING
360 

waiver of such plan that are applicable to determining the eligibility for medical assistance of any child who is under 19 

years of age (or such higher age as the State may have elected). 

(3) NONAPPLICATION.—During the period that begins on January 1, 2011, and ends on December 31, 2013, the requirement 

under paragraph (1) shall not apply to a State with respect to 

nonpregnant, nondisabled adults who are eligible for medical 

assistance under the State plan or under a waiver of the plan 

at the option of the State and whose income exceeds 133 percent of the poverty line (as defined in section 2110(c)(5)) applicable to a family of the size involved if, on or after December 

31, 2010, the State certifies to the Secretary that, with respect 

to the State fiscal year during which the certification is made, 

the State has a budget deficit, or with respect to the succeeding State fiscal year, the State is projected to have a budget deficit. Upon submission of such a certification to the Secretary, the requirement under paragraph (1) shall not apply to 

the State with respect to any remaining portion of the period 

described in the preceding sentence. 

(4) DETERMINATION OF COMPLIANCE.— (A) STATES SHALL APPLY MODIFIED ADJUSTED GROSS IN- COME.—A State’s determination of income in accordance 

with subsection (e)(14) shall not be considered to be eligibility standards, methodologies, or procedures that are 

more restrictive than the standards, methodologies, or procedures in effect under the State plan or under a waiver 

of the plan on the date of enactment of the Patient Protection and Affordable Care Act for purposes of determining 

compliance with the requirements of paragraph (1), (2), or 

(3). 

(B) STATES MAY EXPAND ELIGIBILITY OR MOVE WAIVERED

POPULATIONS INTO COVERAGE UNDER THE STATE PLAN.— With respect to any period applicable under paragraph (1), 

(2), or (3), a State that applies eligibility standards, methodologies, or procedures under the State plan under this 

title or under any waiver of the plan that are less restrictive than the eligibility standards, methodologies, or procedures, applied under the State plan or under a waiver of 

the plan on the date of enactment of the Patient Protection 

and Affordable Care Act, or that makes individuals who, 

on such date of enactment, are eligible for medical assistance under a waiver of the State plan, after such date of 

enactment eligible for medical assistance through a State 

plan amendment with an income eligibility level that is 

not less than the income eligibility level that applied under 

the waiver, or as a result of the application of subclause 

(VIII) of section 1902(a)(10)(A)(i), shall not be considered to 

have in effect eligibility standards, methodologies, or procedures that are more restrictive than the standards, 

methodologies, or procedures in effect under the State plan 

or under a waiver of the plan on the date of enactment of 

the Patient Protection and Affordable Care Act for purposes of determining compliance with the requirements of 

paragraph (1), (2), or (3). 


emcdonald on DSK67QTVN1PROD with HEARING
361 

(hh)(1) A State may elect to phase-in the extension of eligibility 

for medical assistance to individuals described in subclause (XX) of 

subsection (a)(10)(A)(ii) based on the categorical group (including 

nonpregnant childless adults) or income, so long as the State does 

not extend such eligibility to individuals described in such subclause with higher income before making individuals described in 

such subclause with lower income eligible for medical assistance. 

(2) If an individual described in subclause (XX) of subsection 

(a)(10)(A)(ii) is the parent of a child who is under 19 years of age 

(or such higher age as the State may have elected) who is eligible 

for medical assistance under the State plan or under a waiver of 

such plan, the individual may not be enrolled under the State plan 

unless the individual’s child is enrolled under the State plan or 

under a waiver of the plan or is enrolled in other health insurance 

coverage. For purposes of the preceding sentence, the term ‘‘parent’’ 

includes an individual treated as a caretaker relative for purposes 

of carrying out section 1931. 

(ii)(1) Individuals described in this subsection are individuals— 

(A) whose income does not exceed an income eligibility 

level established by the State that does not exceed the 

highest income eligibility level established under the State 

plan under this title (or under its State child health plan 

under title XXI) for pregnant women; and 

(B) who are not pregnant. 

(2) At the option of a State, individuals described in this subsection may include individuals who, had individuals applied 

on or before January 1, 2007, would have been made eligible 

pursuant to the standards and processes imposed by that State 

for benefits described in clause (XVI) of the matter following 

subparagraph (G) of section subsection (a)(10) pursuant to a 

waiver granted under section 1115. 

(3) At the option of a State, for purposes of subsection 

(a)(17)(B), in determining eligibility for services under this subsection, the State may consider only the income of the applicant or recipient. 

(jj) PRIMARY CARE SERVICES DEFINED.—For purposes of subsection (a)(13)(C), the term ‘‘primary care services’’ means— 

(1) evaluation and management services that are procedure 

codes (for services covered under title XVIII) for services in the 

category designated Evaluation and Management in the 

Healthcare Common Procedure Coding System (established by 

the Secretary under section 1848(c)(5) as of December 31, 2009, 

and as subsequently modified); and 

(2) services related to immunization administration for vaccines and toxoids for which CPT codes 90465, 90466, 90467, 

90468, 90471, 90472, 90473, or 90474 (as subsequently modified) apply under such System. 

(kk) PROVIDER AND SUPPLIER SCREENING, OVERSIGHT, AND REPORTING REQUIREMENTS.—For purposes of subsection (a)(77), the 

requirements of this subsection are the following: 

(1) SCREENING.—The State complies with the process for 

screening providers and suppliers under this title, as established by the Secretary under section 1886(j)(2). 

(2) PROVISIONAL PERIOD OF ENHANCED OVERSIGHT FOR NEW

PROVIDERS AND SUPPLIERS.—The State complies with proceVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00367 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
362 

dures to provide for a provisional period of enhanced oversight 

for new providers and suppliers under this title, as established 

by the Secretary under section 1886(j)(3). 

(3) DISCLOSURE REQUIREMENTS.—The State requires providers and suppliers under the State plan or under a waiver 

of the plan to comply with the disclosure requirements established by the Secretary under section 1886(j)(4). 

(4) TEMPORARY MORATORIUM ON ENROLLMENT OF NEW PRO- VIDERS OR SUPPLIERS.— (A) TEMPORARY MORATORIUM IMPOSED BY THE SEC- RETARY.— 

(i) IN GENERAL.—Subject to clause (ii), the State 

complies with any temporary moratorium on the enrollment of new providers or suppliers imposed by the 

Secretary under section 1886(j)(6). 

(ii) EXCEPTION.—A State shall not be required to 

comply with a temporary moratorium described in 

clause (i) if the State determines that the imposition 

of such temporary moratorium would adversely impact 

beneficiaries’ access to medical assistance. 

(B) MORATORIUM ON ENROLLMENT OF PROVIDERS AND

SUPPLIERS.—At the option of the State, the State imposes, 

for purposes of entering into participation agreements with 

providers or suppliers under the State plan or under a 

waiver of the plan, periods of enrollment moratoria, or numerical caps or other limits, for providers or suppliers 

identified by the Secretary as being at high-risk for fraud, 

waste, or abuse as necessary to combat fraud, waste, or 

abuse, but only if the State determines that the imposition 

of any such period, cap, or other limits would not adversely 

impact beneficiaries’ access to medical assistance. 

(5) COMPLIANCE PROGRAMS.—The State requires providers 

and suppliers under the State plan or under a waiver of the 

plan to establish, in accordance with the requirements of section 1866(j)(7), a compliance program that contains the core 

elements established under subparagraph (B) of that section 

1866(j)(7) for providers or suppliers within a particular industry or category. 

(6) REPORTING OF ADVERSE PROVIDER ACTIONS.—The State 

complies with the national system for reporting criminal and 

civil convictions, sanctions, negative licensure actions, and 

other adverse provider actions to the Secretary, through the 

Administrator of the Centers for Medicare & Medicaid Services, in accordance with regulations of the Secretary. 

(7) ENROLLMENT AND NPI OF ORDERING OR REFERRING PROVIDERS.—The State requires— 

(A) all ordering or referring physicians or other professionals to be enrolled under the State plan or under a 

waiver of the plan as a participating provider; and 

(B) the national provider identifier of any ordering or referring physician or other professional to be specified on 

any claim for payment that is based on an order or referral 

of the physician or other professional. 

(8) OTHER STATE OVERSIGHT.—Nothing in this subsection 

shall be interpreted to preclude or limit the ability of a State 


emcdonald on DSK67QTVN1PROD with HEARING
363 

to engage in provider and supplier screening or enhanced provider and supplier oversight activities beyond those required 

by the Secretary. 

* * * * * * * 

TITLE XX HEALTH PROFESSIONS DEMONSTRATIONS 

AND ENVIRONMENTAL HEALTH CONDITION DETECTION AND ELDER JUSTICE—øBLOCK GRANTS TO 

STATES FOR SOCIAL SERVICES¿HEALTH PROFESSIONS 

DEMONSTRATIONS AND ENVIRONMENTAL HEALTH CONDITION DETECTION 

Subtitle A—øBlock Grants to States for Social Services¿ Health Professions Demonstrations and Environmental Health 

Condition Detection 

øPURPOSES OF SUBTITLE; AUTHORIZATION OF APPROPRIATIONS

øSEC. 2001. For the purposes of consolidating Federal assistance 

to States for social services into a single grant, increasing State 

flexibility in using social service grants, and encouraging each 

State, as far as practicable under the conditions in that State, to 

furnish services directed at the goals of— 

ø(1) achieving or maintaining economic self-support to prevent, reduce, or eliminate dependency; 

ø(2) achieving or maintaining self-sufficiency, including reduction or prevention of dependency; 

ø(3) preventing or remedying neglect, abuse, or exploitation 

of children and adults unable to protect their own interests, or 

preserving, rehabilitating or reuniting families; 

ø(4) preventing or reducing inappropriate institutional care 

by providing for community-based care, home-based care, or 

other forms of less intensive care; and 

ø(5) securing referral or admission for institutional care 

when other forms of care are not appropriate, or providing 

services to individuals in institution, 

there are authorized to be appropriated for each fiscal year such 

sums as may be necessary to carry out the purposes of this title. 

øPAYMENTS TO STATES

øSEC. 2002. (a)(1) Each State shall be entitled to payment under 

this title for each fiscal year in an amount equal to its allotment 

for such fiscal year, to be used by such State for services directed 

at the goals set forth in section 2001, subject to the requirements 

of this title. 

ø(2) For purposes of paragraph (1)— 

ø(A) services which are directed at the goals set forth in section 2001 include, but are not limited to, child care services, 

protective services for children and adults, services for children 

and adults in foster care, services related to the management 

and maintenance of the home, day care services for adults, 

transportation services, family planning services, training and 


emcdonald on DSK67QTVN1PROD with HEARING
364 

related services, employment services, information, referral, 

and counseling services, the preparation and delivery of meals, 

health support services and appropriate combinations of services designed to meet the special needs of children, the aged, 

the mentally retarded, the blind, the emotionally disturbed, the 

physically handicapped, and alcoholics and drug addicts; and 

ø(B) expenditures for such services may include expenditures 

for— 

ø(i) administration (including planning and evaluation); 

ø(ii) personnel training and retraining directly related to 

the provision of those services (including both short-and 

long-term training at educational institutions through 

grants to such institutions or by direct financial assistance 

to students enrolled in such institutions); and 

ø(iii) conferences or workshops, and training or retraining through grants to nonprofit organizations within the 

meaning of section 501(c)(3) of the Internal Revenue Code 

of 1954 or to individuals with social services expertise, or 

through financial assistance to individuals participating in 

such conferences, workshops, and training or retraining 

(and this clause shall apply with respect to all persons involved in the delivery of such services). 

ø(b) The Secretary shall make payments in accordance with section 6503 of title 31, United States Code, to each State from its allotment for use under this title. 

ø(c) Payments to a State from its allotment for any fiscal year 

must be expended by the State in such fiscal year or in the succeeding fiscal year. 

ø(d) A State may transfer up to 10 percent of its allotment under 

section 2003 for any fiscal year for its use for that year under other 

provisions of Federal law providing block grants for support of 

health services, health promotion and disease prevention activities, 

or low-income home energy assistance (or any combination of those 

activities). Amounts allotted to a State under any provisions of 

Federal law referred to in the preceding sentence and transferred 

by a State for use in carrying out the purposes of this title shall 

be treated as if they were paid to the State under this title but 

shall not affect the computation of the State’s allotment under this 

title. The State shall inform the Secretary of any such transfer of 

funds. 

ø(e) A State may use a portion of the amounts described in subsection (a) for the purpose of purchasing technical assistance from 

public or private entities if the State determines that such assistance is required in developing, implementing, or administering programs funded under this title. 

ø(f) A State may use funds provided under this title to provide 

vouchers, for services directed at the goals set forth in section 2001, 

to families, including— 

ø(1) families who have become ineligible for assistance under 

a State program funded under part A of title IV by reason of 

a durational limit on the provision of such assistance; and 

ø(2) families denied cash assistance under the State program 

funded under part A of title IV for a child who is born to a 

member of the family who is— 

ø(A) a recipient of assistance under the program; or 


emcdonald on DSK67QTVN1PROD with HEARING
365 

ø(B) a person who received such assistance at any time 

during the 10-month period ending with the birth of the 

child. 

øALLOTMENTS

øSEC. 2003. (a) The allotment for any fiscal year to each of the 

jurisdictions of Puerto Rico, Guam, the Virgin Islands, and the 

Northern Mariana Islands shall be an amount which bears the 

same ratio to the amount specified in subsection (c) as the amount 

which was specified for allocation to the particular jurisdiction involved for the fiscal year 1981 under section 2002(a)(2)(C) of this 

Act (as in effect prior to the enactment of this section) bore to 

$2,900,000,000. The allotment for fiscal year 1989 and each succeeding fiscal year to American Samoa shall be an amount which 

bears the same ratio to the amount allotted to the Northern Mariana Islands for that fiscal year as the population of American 

Samoa bears to the population of the Northern Mariana Islands determined on the basis of the most recent data available at the time 

such allotment is determined. 

ø(b) The allotment for any fiscal year for each State other than 

the jurisdictions of Puerto Rico, Guam, the Virgin Islands, American Samoa, and the Northern Mariana Islands shall be an amount 

which bears the same ratio to— 

ø(1) the amount specified in subsection (c), reduced by 

ø(2) the total amount allotted to those jurisdictions for that 

fiscal year under subsection (a), as the population of that State 

bears to the population of all the States (other than Puerto 

Rico, Guam, the Virgin Islands, American Samoa, and the 

Northern Mariana Islands) as determined by the Secretary (on 

the basis of the most recent data available from the Department of Commerce) and promulgated prior to the first day of 

the third month of the preceding fiscal year. 

ø(c) The amount specified for purposes of subsections (a) and (b) 

shall be— 

ø(1) $2,400,000,000 for the fiscal year 1982; 

ø(2) $2,450,000,000 for the fiscal year 1983; 

ø(3) $2,700,000,000 for the fiscal years 1984, 1985, 1986, 

1987, and 1989; 

ø(4) $2,750,000,000 for the fiscal year 1988; 

ø(5) $2,800,000,000 for each of the fiscal years 1990 through 

1995; 

ø(6) $2,381,000,000 for the fiscal year 1996; 

ø(7) $2,380,000,000 for the fiscal year 1997; 

ø(8) $2,299,000,000 for the fiscal year 1998; 

ø(9) $2,380,000,000 for the fiscal year 1999; 

ø(10) $2,380,000,000 for the fiscal year 2000; and 

ø(11) $1,700,000,000 for the fiscal year 2001 and each fiscal 

year thereafter. 

øSTATE ADMINISTRATION

øSEC. 2004. Prior to expenditure by a State of payments made 

to it under section 2002 for any fiscal year, the State shall report 

on the intended use of the payments the State is to receive under 

this title, including information on the types of activities to be supVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00371 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
366 

ported and the categories or characteristics of individuals to be 

served. The report shall be transmitted to the Secretary and made 

public within the State in such manner as to facilitate comment by 

any person (including any Federal or other public agency) during 

development of the report and after its completion. The report shall 

be revised throughout the year as may be necessary to reflect substantial changes in the activities assisted under this title, and any 

revision shall be subject to the requirements of the previous sentence. 

øLIMITATIONS ON USE OF GRANTS

øSEC. 2005. (a) Except as provided in subsection (b), grants made 

under this title may not be used by the State, or by any other person with which the State makes arrangements to carry out the purposes of this title— 

ø(1) for the purchase or improvement of land, or the purchase, construction, or permanent improvement (other than 

minor remodeling) of any building or other facility; 

ø(2) for the provision of cash payments for costs of subsistence or for the provision of room and board (other than costs 

of subsistence during rehabilitation, room and board provided 

for a short term as an integral but subordinate part of a social 

service, or temporary emergency shelter provided as a protective service); 

ø(3) for payment of the wages of any individual as a social 

service (other than payment of the wages of welfare recipients 

employed in the provision of child day care services); 

ø(4) for the provision of medical care (other than family planning services, rehabilitation services, or initial detoxification of 

an alcoholic or drug dependent individual) unless it is an integral but subordinate part of a social service for which grants 

may be used under this title; 

ø(5) for social services (except services to an alcoholic or drug 

dependent individual or rehabilitation services) provided in 

and by employees of any hospital, skilled nursing facility, intermediate care facility, or prison, to any individual living in 

such institution; 

ø(6) for the provision of any educational service which the 

State makes generally available to its residents without cost 

and without regard to their income; 

ø(7) for any child day care services unless such services meet 

applicable standards of State and local law; 

ø(8) for the provision of cash payments as a service (except 

as otherwise provided in this section); 

ø(9) for payment for any item or service (other than an emergency item or service) furnished— 

ø(A) by an individual or entity during the period when 

such individual or entity is excluded under this title or 

title V, XVIII, or XIX pursuant to section 1128, 1128A, 

1156, or 1842(j)(2), or 

ø(B) at the medical direction or on the prescription of a 

physician during the period when the physician is excluded under this title or title V, XVIII, or XIX pursuant 

to section 1128, 1128A, 1156, or 1842(j)(2) and when the 

person furnishing such item or service knew or had reason 


emcdonald on DSK67QTVN1PROD with HEARING
367 

to know of the exclusion (after a reasonable time period 

after reasonable notice has been furnished to the person); 

or 

ø(10) in a manner inconsistent with the Assisted Suicide 

Funding Restriction Act of 1997. 

ø(b) The Secretary may waive the limitation contained in subsection (a)(1) and (4) upon the State’s request for such a waiver if 

he finds that the request describes extraordinary circumstances to 

justify the waiver and that permitting the waiver will contribute to 

the State’s ability to carry out the purposes of this title. 

øREPORTS AND AUDITS

øSEC. 2006. (a) Each State shall prepare reports on its activities 

carried out with funds made available (or transferred for use) 

under this title. Reports shall be prepared annually, covering the 

most recently completed fiscal year, and shall be in such form and 

contain such information (including but not limited to the information specified in subsection (c)) as the State finds necessary to provide an accurate description of such activities, to secure a complete 

record of the purposes for which funds were spent, and to determine the extent to which funds were spent in a manner consistent 

with the reports required by section 2004. The State shall make 

copies of the reports required by this section available for public inspection within the State and shall transmit a copy to the Secretary. Copies shall also be provided, upon request, to any interested public agency, and each such agency may provide its views 

on these reports to the Congress. 

ø(b) Each State shall, not less often than every two years, audit 

its expenditures from amounts received (or transferred for use) 

under this title. Such State audits shall be conducted by an entity 

independent of any agency administering activities funded under 

this title, in accordance with generally accepted auditing principles. 

Within 30 days following the completion of each audit, the State 

shall submit a copy of that audit to the legislature of the State and 

to the Secretary. Each State shall repay to the United States 

amounts ultimately found not to have been expended in accordance 

with this title, or the Secretary may offset such amounts against 

any other amount to which the State is or may become entitled 

under this title. 

ø(c) Each report prepared and transmitted by a State under subsection (a) shall set forth (with respect to the fiscal year covered 

by the report)— 

ø(1) the number of individuals who received services paid for 

in whole or in part with funds made available under this title, 

showing separately the number of children and the number of 

adults who received such services, and broken down in each 

case to reflect the types of services and circumstances involved; 

ø(2) the amount spent in providing each such type of service, 

showing separately for each type of service the amount spent 

per child recipient and the amount spent per adult recipient; 

ø(3) the criteria applied in determining eligibility for services 

(such as income eligibility guidelines, sliding fee scales, the effect of public assistance benefits, and any requirements for enrollment in school or training programs); and 


emcdonald on DSK67QTVN1PROD with HEARING
368 

ø(4) the methods by which services were provided, showing 

separately the services provided by public agencies and those 

provided by private agencies, and broken down in each case to 

reflect the types of services and circumstances involved. 

The Secretary shall establish uniform definitions of services for use 

by the States in preparing the information required by this subsection, and make such other provision as may be necessary or appropriate to assure that compliance with the requirements of this 

subsection will not be unduly burdensome on the States. 

ø(d) For other provisions requiring States to account for Federal 

grants, see section 6503 of title 31, United States Code. 

øSEC. 2007. ADDITIONAL GRANTS. 

ø(a) ENTITLEMENT.— 

ø(1) IN GENERAL.—In addition to any payment under section 

2002, each State shall be entitled to— 

ø(A) 2 grants under this section for each qualified empowerment zone in the State; and 

ø(B) 1 grant under this section for each qualified enterprise community in the State. 

ø(2) AMOUNT OF GRANTS.— 

ø(A) EMPOWERMENT GRANTS.—The amount of each grant 

to a State under this section for a qualified empowerment 

zone shall be— 

ø(i) if the zone is designated in an urban area, 

$50,000,000, multiplied by that proportion of the population of the zone that resides in the State; or 

ø(ii) if the zone is designated in a rural area, 

$20,000,000, multiplied by each proportion. 

ø(B) ENTERPRISE GRANTS.—The amount of the grant to 

a State under this section for a qualified enterprise community shall be 1/95 of $280,000,000, multiplied by that 

proportion of the population of the community that resides 

in the State. 

ø(C) POPULATION DETERMINATIONS.—The Secretary shall 

make population determinations for purposes of this paragraph based on the most recent decennial census data 

available. 

ø(3) TIMING OF GRANTS.— 

ø(A) QUALIFIED EMPOWERMENT ZONES.—With respect to 

each qualified empowerment zone, the Secretary shall 

make— 

ø(i) 1 grant under this section to each State in 

which the zone lies, on the date of the designation of 

the zone under part I of subchapter U of chapter 1 of 

the Internal Revenue Code of 1986; and 

ø(ii) 1 grant under this section to each such State, 

on the 1st day of the 1st fiscal year that begins after 

the date of the designation. 

ø(B) QUALIFIED ENTERPRISE COMMUNITIES.—With respect 

to each qualified enterprise community, the Secretary shall 

make 1 grant under this section to each State in which the 

community lies, on the date of the designation of the community under part I of subchapter U of chapter 1 of the 

Internal Revenue Code of 1986. 


emcdonald on DSK67QTVN1PROD with HEARING
369 

ø(4) FUNDING.—$1,000,000,000 shall be made available to 

the Secretary for grants under this section. 

ø(b) PROGRAM OPTIONS.—Notwithstanding section 2005(a): 

ø(1) In order to prevent and remedy the neglect and abuse 

of children, a State may use amounts paid under this section 

to make grants to, or enter into contracts with, entities to provide residential or nonresidential drug and alcohol prevention 

and treatment programs that offer comprehensive services for 

pregnant women and mothers, and their children. 

ø(2) In order to prevent to assist disadvantaged adults and 

youths in achieving and maintaining self-sufficiency, a State 

may use amounts paid under this section to make grants to, 

or enter into contracts with— 

ø(A) organizations operated for profit or not for profit, 

for the purpose of training and employing disadvantaged 

adults and youths in construction, rehabilitation, or improvement of affordable housing, public infrastructure, and 

community facilities; and 

ø(B) nonprofit organizations and community or junior 

colleges, for the purpose of enabling such entities to provide short-term training courses in entrepreneurism and 

self-employment, and other training that will promote individual self-sufficiency and the interests of the community. 

ø(3) A State may use amounts paid under this section to 

make grants to, or enter into contracts with, nonprofit community-based organizations to enable such organizations to provide activities designed to promote and protect the interests of 

children and families, outside of school hours, including keeping schools open during evenings and weekends for mentoring 

and study. 

ø(4) In order to assist disadvantaged adults and youths in 

achieving and maintain economic self-support, a State may use 

amounts paid under this section to— 

ø(A) fund services designed to promote community and 

economic development in qualified empowerment zones 

and qualified enterprise communities, such as skills training, job counseling, transportation services, housing counseling, financial management, and business counseling; 

ø(B) assist in emergency and transitional shelter for disadvantaged families and individuals; or 

ø(C) support programs that promote home ownership, 

education, or other routes to economic independence for 

low-income families and individuals. 

ø(c) USE OF GRANTS.— 

ø(1) IN GENERAL.—Subject to subsection (d) of this section, 

each State that receives a grant under this section with respect 

to an area shall use the grant— 

ø(A) for services directed only at the goals set forth in 

paragraphs (1), (2), and (3) of section 2001; 

ø(B) in accordance with the strategic plan for the area; 

and 

ø(C) for activities that benefit residents of the area for 

which the grant is made. 


emcdonald on DSK67QTVN1PROD with HEARING
370 

ø(2) TECHNICAL ASSISTANCE.—A State may use a portion of 

any grant made under this section in the manner described in 

section 2002(e). 

ø(d) REMITTANCE OF CERTAIN AMOUNTS.— 

ø(1) PORTION OF GRANT UPON TERMINATION OF DESIGNATION.—Each State to which an amount is paid under this subsection during a fiscal year with respect to an area the designation of which under part I of subchapter U of chapter 1 of 

the Internal Revenue Code of 1986 ends before the end of the 

fiscal year shall remit to the Secretary an amount equal to the 

total of the amounts so paid with respect to the area, multiplied by that proportion of the fiscal year remaining after the 

designation ends. 

ø(2) AMOUNTS PAID TO THE STATES AND NOT OBLIGATED WITHIN 2 YEARS.—Each State shall remit to the Secretary any 

amount paid to the State under this section that is not obligated by the end of the 2-year period that begins with the date 

of the payment. 

ø(e) REALLOCATION OF REMAINING FUNDS.— 

ø(1) REMITTED AMOUNTS.—The amount specified in section 

2003(c) for any fiscal year is hereby increased by the total of 

the amounts remitted during the fiscal year pursuant to subsection (d) of this section. 

ø(2) AMOUNTS NOT PAID TO THE STATES.—The amount specified in section 2003(c) for fiscal year 1998 is hereby increased 

by the amount made available for grants under this section 

that has not been paid to any State by the end of fiscal year 

1997. 

ø(f) DEFINITIONS.—As used in this section: 

ø(1) QUALIFIED EMPOWERMENT ZONE.—The term ‘‘qualified 

empowerment zone’’ means, with respect to a State, an area— 

ø(A) which has been designated (other than by the Secretary of the Interior) as an empowerment zone under part 

I of subchapter U of chapter 1 of the Internal Revenue 

Code of 1986; 

ø(B) with respect to which the designation is in effect; 

ø(C) the strategic plan for which is a qualified plan; and 

ø(D) part or all of which is in the State. 

ø(2) QUALIFIED ENTERPRISE COMMUNITY.—The term ‘‘qualified enterprise community’’ means, with respect to a State, an 

area— 

ø(A) which has been designated (other than by the Secretary of the Interior) as an enterprise community under 

part I of subchapter U of chapter 1 of the Internal Revenue Code of 1986; 

ø(B) with respect to which the designation is in effect; 

ø(C) the strategic plan for which is a qualified plan; and 

ø(D) part or all of which is in the State. 

ø(3) STRATEGIC PLAN.—The term ‘‘strategic plan’’ means, 

with respect to an area, the plan contained in the application 

for designation of the area under part I of subchapter U of 

chapter 1 of the Internal Revenue Code of 1986. 

ø(4) QUALIFIED PLAN.—The term ‘‘qualified plan’’ means, 

with respect to an area, a plan that— 


emcdonald on DSK67QTVN1PROD with HEARING
371 

ø(A) includes a detailed description of the activities proposed for the area that are to be funded with amounts provided under this section; 

ø(B) contains a commitment that the amounts provided 

under this section to any State for the area will not be 

used to supplant Federal or non-Federal funds for services 

and activities which promote the purposes of this section; 

ø(C) was developed in cooperation with the local government or governments with jurisdiction over the area; and 

ø(D) to the extent that any State will not use the 

amounts provided under this section for the area in the 

manner described in subsection (b), explains the reasons 

why not. 

ø(5) RURAL AREA.—The term ‘‘rural area’’ has the meaning 

given such term in section 1393(a)(2) of the Internal Revenue 

Code of 1986. 

ø(6) URBAN AREA.—The term ‘‘urban area’’ has the meaning 

given such term in section 1393(a)(3) of the Internal Revenue 

Code of 1986.¿ 

* * * * * * * 

FOOD AND NUTRITION ACT OF 2008 

* * * * * * * 

ADMINISTRATIVE COST-SHARING AND QUALITY CONTROL

SEC. 16. (a) Subject to subsection (k), the Secretary is authorized 

to pay to each State agency an amount equal to 50 per centum of 

all administrative costs involved in each State agency’s operation 

of the supplemental nutrition assistance program, which costs shall 

include, but not be limited to, the cost of (1) the certification of applicant households, (2) the acceptance, storage, protection, control, 

and accounting of benefits after their delivery to receiving points 

within the State, (3) the issuance of benefits to all eligible households, (4) informational activities relating to the supplemental nutrition assistance program, including those undertaken under section 11(e)(1)(A), but not including recruitment activities designed to 

persuade an individual to apply forprogram benefits or that promote the program through television,radio, or billboard advertisements, (5) fair hearings, (6) automated data processing and information retrieval systems subject to the conditions set forth in subsection (g), (7) supplemental nutrition assistance program investigations and prosecutions, and (8) implementing and operating the 

immigration status verification system established under section 

1137(d) of the Social Security Act (42 U.S.C. 1320b–7(d)): Provided, 

That the Secretary is authorized at the Secretary’s discretion to 

pay any State agency administering the supplemental nutrition assistance program on all or part of an Indian reservation under section 11(d) of this Act or in a Native village within the State of Alaska identified in section 11(b) of Public Law 92–203, such amounts 

for administrative costs as the Secretary determines to be necessary for effective operation of the supplemental nutrition assistance program, as well as to permit each State to retain 35 percent 

of the value of all funds or allotments recovered or collected pursuVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00377 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
372 

ant to sections 6(b) and 13(c) and 20 percent of the value of any 

other funds or allotments recovered or collected, except the value 

of funds or allotments recovered or collected that arise from an 

error of a State agency. The officials responsible for making determinations of ineligibility under this Act shall not receive or benefit 

from revenues retained by the State under the provisions of this 

subsection. 

(b) WORK SUPPLEMENTATION OR SUPPORT PROGRAM.— 

(1) DEFINITION OF WORK SUPPLEMENTATION OR SUPPORT PROGRAM.—In this subsection, the term ‘‘work supplementation or 

support program’’ means a program under which, as determined by the Secretary, public assistance (including any benefits provided under a program established by the State and the 

supplemental nutrition assistance program) is provided to an 

employer to be used for hiring and employing a public assistance recipient who was not employed by the employer at the 

time the public assistance recipient entered the program. 

(2) PROGRAM.—A State agency may elect to use an amount 

equal to the allotment that would otherwise be issued to a 

household under the supplemental nutrition assistance program, but for the operation of this subsection, for the purpose 

of subsidizing or supporting a job under a work supplementation or support program established by the State. 

(3) PROCEDURE.—If a State agency makes an election under 

paragraph (2) and identifies each household that participates 

in the supplemental nutrition assistance program that contains 

an individual who is participating in the work supplementation 

or support program— 

(A) the Secretary shall pay to the State agency an 

amount equal to the value of the allotment that the household would be eligible to receive but for the operation of 

this subsection; 

(B) the State agency shall expend the amount received 

under subparagraph (A) in accordance with the work supplementation or support program in lieu of providing the 

allotment that the household would receive but for the operation of this subsection; 

(C) for purposes of— 

(i) sections 5 and 8(a), the amount received under 

this subsection shall be excluded from household income and resources; and 

(ii) section 8(b), the amount received under this subsection shall be considered to be the value of an allotment provided to the household; and 

(D) the household shall not receive an allotment from 

the State agency for the period during which the member 

continues to participate in the work supplementation or 

support program. 

(4) OTHER WORK REQUIREMENTS.—No individual shall be excused, by reason of the fact that a State has a work supplementation or support program, from any work requirement 

under section 6(d), except during the periods in which the individual is employed under the work supplementation or support 

program. 


emcdonald on DSK67QTVN1PROD with HEARING
373 

(5) LENGTH OF PARTICIPATION.—A State agency shall provide 

a description of how the public assistance recipients in the program shall, within a specific period of time, be moved from 

supplemented or supported employment to employment that is 

not supplemented or supported. 

(6) DISPLACEMENT.—A work supplementation or support program shall not displace the employment of individuals who are 

not supplemented or supported. 

(c) QUALITY CONTROL SYSTEM.— (1) IN GENERAL.— (A) SYSTEM.— (i) IN GENERAL.—In carrying out the supplemental 

nutrition assistance program, the Secretary shall carry 

out a system that enhances payment accuracy and improves administration by establishing fiscal incentives 

that require State agencies with high payment error 

rates to share in the cost of payment error. 

(ii) TOLERANCE LEVEL FOR EXCLUDING SMALL ERRORS.—The Secretary shall set the tolerance level for 

excluding small errors for the purposes of this subsection— 

(I) for fiscal year 2014, at an amount not greater than $37; and 

(II) for each fiscal year thereafter, the amount 

specified in subclause (I) adjusted by the percentage by which the thrifty food plan is adjusted 

under section 3(u)(4) between June 30, 2013, and 

June 30 of the immediately preceding fiscal year. 

(B) ADJUSTMENT OF FEDERAL SHARE OF ADMINISTRATIVE

COSTS FOR FISCAL YEARS BEFORE FISCAL YEAR 2003.— 

(i) IN GENERAL.—Subject to clause (ii), with respect 

to any fiscal year before fiscal year 2003, the Secretary 

shall adjust a State agency’s federally funded share of 

administrative costs under subsection (a), other than 

the costs already shared in excess of 50 percent under 

the proviso in the first sentence of subsection (a) or 

under subsection (g), by increasing that share of all 

such administrative costs by 1 percentage point to a 

maximum of 60 percent of all such administrative 

costs for each full 1⁄10 of a percentage point by which 

the payment error rate is less than 6 percent. 

(ii) LIMITATION.—Only States with a rate of invalid 

decisions in denying eligibility that is less than a nationwide percentage that the Secretary determines to 

be reasonable shall be entitled to the adjustment 

under clause (i). 

(C) ESTABLISHMENT OF LIABILITY AMOUNT FOR FISCAL

YEAR 2003 AND THEREAFTER.—With respect to fiscal year 

2004 and any fiscal year thereafter for which the Secretary 

determines that, for the second or subsequent consecutive 

fiscal year, a 95 percent statistical probability exists that 

the payment error rate of a State agency exceeds 105 percent of the national performance measure for payment 

error rates announced under paragraph (6), the Secretary 

shall establish an amount for which the State agency may 


emcdonald on DSK67QTVN1PROD with HEARING
374 

be liable (referred to in this paragraph as the ‘‘liability 

amount’’) that is equal to the product obtained by multiplying— 

(i) the value of all allotments issued by the State 

agency in the fiscal year; 

(ii) the difference between— 

(I) the payment error rate of the State agency; 

and 

(II) 6 percent; and 

(iii) 10 percent. 

(D) AUTHORITY OF SECRETARY WITH RESPECT TO LIABILITY AMOUNT.—With respect to the liability amount established for a State agency under subparagraph (C) for any 

fiscal year, the Secretary shall— 

(i) 

(I) require that a portion, not to exceed 50 percent, 

of the liability amount established for the fiscal year 

be used by the State agency for new investment, approved by the Secretary, to improve administration by 

the State agency of the supplemental nutrition assistance program (referred to in this paragraph as the 

‘‘new investment amount’’), which new investment 

amount shall not be matched by Federal funds; 

(II) designate a portion, not to exceed 50 percent, of 

the amount established for the fiscal year for payment 

to the Secretary in accordance with subparagraph (E) 

(referred to in this paragraph as the ‘‘at-risk amount’’); 

or 

(III) take any combination of the actions described 

in subclauses (I) and (II); or 

(ii) make the determinations described in clause (i) 

and enter into a settlement with the State agency, 

only with respect to any new investment amount, before the end of the fiscal year in which the liability 

amount is determined under subparagraph (C). 

(E) PAYMENT OF AT-RISK AMOUNT FOR CERTAIN STATES.— (i) IN GENERAL.—A State agency shall pay to the 

Secretary the at-risk amount designated under subparagraph (D)(i)(II) for any fiscal year in accordance 

with clause (ii), if, with respect to the immediately following fiscal year, a liability amount has been established for the State agency under subparagraph (C). 

(ii) METHOD OF PAYMENT OF AT-RISK AMOUNT.— 

(I) REMISSION TO THE SECRETARY.—In the case 

of a State agency required to pay an at-risk 

amount under clause (i), as soon as practicable 

after completion of all administrative and judicial 

reviews with respect to that requirement to pay, 

the chief executive officer of the State shall remit 

to the Secretary the at-risk amount required to be 

paid. 

(II) ALTERNATIVE METHOD OF COLLECTION.— (aa) IN GENERAL.—If the chief executive officer of the State fails to make the payment 

under subclause (I) within a reasonable period 


emcdonald on DSK67QTVN1PROD with HEARING
375 

of time determined by the Secretary, the Secretary may reduce any amount due to the 

State agency under any other provision of this 

section by the amount required to be paid 

under clause (i). 

(bb) ACCRUAL OF INTEREST.—During any period of time determined by the Secretary 

under item (aa), interest on the payment 

under subclause (I) shall not accrue under 

section 13(a)(2). 

(F) USE OF PORTION OF LIABILITY AMOUNT FOR NEW INVESTMENT.— 

(i) REDUCTION OF OTHER AMOUNTS DUE TO STATE

AGENCY.—In the case of a State agency that fails to 

comply with a requirement for new investment under 

subparagraph (D)(i)(I) or clause (iii)(I), the Secretary 

may reduce any amount due to the State agency under 

any other provision of this section by the portion of the 

liability amount that has not been used in accordance 

with that requirement. 

(ii) EFFECT OF STATE AGENCY’S WHOLLY PREVAILING

ON APPEAL.—If a State agency begins required new investment under subparagraph (D)(i)(I), the State agency appeals the liability amount of the State agency, 

and the determination by the Secretary of the liability 

amount is reduced to $0 on administrative or judicial 

review, the Secretary shall pay to the State agency an 

amount equal to 50 percent of the new investment 

amount that was included in the liability amount subject to the appeal. 

(iii) EFFECT OF SECRETARY’S WHOLLY PREVAILING ON

APPEAL.—If a State agency does not begin required 

new investment under subparagraph (D)(i)(I), the 

State agency appeals the liability amount of the State 

agency, and the determination by the Secretary of the 

liability amount is wholly upheld on administrative or 

judicial review, the Secretary shall— 

(I) require all or any portion of the new investment amount to be used by the State agency for 

new investment, approved by the Secretary, to improve administration by the State agency of the 

supplemental nutrition assistance program, which 

amount shall not be matched by Federal funds; 

and 

(II) require payment of any remaining portion of 

the new investment amount in accordance with 

subparagraph (E)(ii). 

(iv) EFFECT OF NEITHER PARTY’S WHOLLY PREVAILING

ON APPEAL.—The Secretary shall promulgate regulations regarding obligations of the Secretary and the 

State agency in a case in which the State agency appeals the liability amount of the State agency and neither the Secretary nor the State agency wholly prevails. 


emcdonald on DSK67QTVN1PROD with HEARING
376 

(G) CORRECTIVE ACTION PLANS.—The Secretary shall foster management improvements by the States by requiring 

State agencies, other than State agencies with payment 

error rates of less than 6 percent, to develop and implement corrective action plans to reduce payment errors. 

(2) As used in this section— 

(A) the term ‘‘payment error rate’’ means the sum of the 

point estimates of an overpayment error rate and an underpayment error rate determined by the Secretary from data collected in a probability sample of participating households; 

(B) the term ‘‘overpayment error rate’’ means the percentage 

of the value of all allotments issued in a fiscal year by a State 

agency that are either— 

(i) issued to households that fail to meet basic program 

eligibility requirements; or 

(ii) overissued to eligible households; and 

(C) the term ‘‘underpayment error rate’’ means the ratio of 

the value of allotments underissued to recipient households to 

the total value of allotments issued in a fiscal year by a State 

agency. 

(3) The following errors may be measured for management purposes but shall not be included in the payment error rate: 

(A) Any errors resulting in the application of new regulations 

promulgated under this Act during the first 120 days from the 

required implementation date for such regulations. 

(B) Errors resulting from the use by a State agency of correctly processed information concerning households or individuals received from Federal agencies or from actions based on 

policy information approved or disseminated, in writing, by the 

Secretary or the Secretary’s designee. 

(4) REPORTING REQUIREMENTS.—The Secretary may require a 

State agency to report any factors that the Secretary considers 

necessary to determine a State agency’s payment error rate, liability amount or new investment amount under paragraph 

(1), or performance under the performance measures under 

subsection (d). If a State agency fails to meet the reporting requirements established by the Secretary, the Secretary shall 

base the determination on all pertinent information available 

to the Secretary. 

(5) PROCEDURES.—To facilitate the implementation of this 

subsection, each State agency shall expeditiously submit to the 

Secretary data concerning the operations of the State agency 

in each fiscal year sufficient for the Secretary to establish the 

State agency’s payment error rate, liability amount or new investment amount under paragraph (1), or performance under 

the performance measures under subsection (d). The Secretary 

shall initiate efforts to collect the amount owed by the State 

agency as a claim established under paragraph (1) for a fiscal 

year, subject to the conclusion of any formal or informal appeal 

procedure and administrative or judicial review under section 

14 (as provided for in paragraph (7)), before the end of the fiscal year following such fiscal year. 

(6) NATIONAL PERFORMANCE MEASURE FOR PAYMENT ERROR

RATES.— 


emcdonald on DSK67QTVN1PROD with HEARING
377 

(A) ANNOUNCEMENT.—At the time the Secretary makes 

the notification to State agencies of their error rates, the 

Secretary shall also announce a national performance 

measure that shall be the sum of the products of each 

State agency’s error rate as developed for the notifications 

under paragraph (8) times that State agency’s proportion 

of the total value of national allotments issued for the fiscal year using the most recent issuance data available at 

the time of the notifications issued pursuant to paragraph 

(8). 

(B) USE OF ALTERNATIVE MEASURE OF STATE ERROR.— Where a State fails to meet reporting requirements pursuant to paragraph (4), the Secretary may use another measure of a State’s error developed pursuant to paragraph (8), 

to develop the national performance measure. 

(C) USE OF NATIONAL PERFORMANCE MEASURE.—The announced national performance measure shall be used in 

determining the liability amount of a State under paragraph (1)(C) for the fiscal year whose error rates are being 

announced under paragraph (8). 

(D) NO ADMINISTRATIVE OR JUDICIAL REVIEW.—The national performance measure announced under this paragraph shall not be subject to administrative or judicial review. 

(7) ADMINISTRATIVE AND JUDICIAL REVIEW.— (A) IN GENERAL.—Except as provided in subparagraphs 

(B) and (C), if the Secretary asserts a financial claim 

against or establishes a liability amount with respect to a 

State agency under paragraph (1), the State may seek administrative and judicial review of the action pursuant to 

section 14. 

(B) DETERMINATION OF PAYMENT ERROR RATE.—With respect to any fiscal year, a determination of the payment 

error rate of a State agency or a determination whether 

the payment error rate exceeds 105 percent of the national 

performance measure for payment error rates shall be subject to administrative or judicial review only if the Secretary establishes a liability amount with respect to the 

fiscal year under paragraph (1)(C). 

(C) AUTHORITY OF SECRETARY WITH RESPECT TO LIABILITY

AMOUNT.—An action by the Secretary under subparagraph 

(D) or (F)(iii) of paragraph (1) shall not be subject to administrative or judicial review. 

(8)(A) This paragraph applies to the determination of whether a 

payment is due by a State agency for a fiscal year under paragraph 

(1). 

(B) Not later than the first May 31 after the end of the fiscal 

year referred to in subparagraph (A), the case review and all arbitrations of State-Federal difference cases shall be completed. 

(C) Not later than the first June 30 after the end of the fiscal 

year referred to in subparagraph (A), the Secretary shall— 

(i) determine final error rates, the national average payment 

error rate, and the amounts of payment claimed against State 

agencies or liability amount established with respect to State 

agencies; 


emcdonald on DSK67QTVN1PROD with HEARING
378 

(ii) notify State agencies of the payment claims or liability 

amounts; and 

(iii) provide a copy of the document providing notification 

under clause (ii) to the chief executive officer and the legislature of the State. 

(D) A State agency desiring to appeal a payment claim or liability amount determined under subparagraph (C) shall submit to an 

administrative law judge— 

(i) a notice of appeal, not later than 10 days after receiving 

a notice of the claim or liability amount; and 

(ii) evidence in support of the appeal of the State agency, not 

later than 60 days after receiving a notice of the claim or liability amount. 

(E) Not later than 60 days after a State agency submits evidence 

in support of the appeal, the Secretary shall submit responsive evidence to the administrative law judge to the extent such evidence 

exists. 

(F) Not later than 30 days after the Secretary submits responsive 

evidence, the State agency shall submit rebuttal evidence to the administrative law judge to the extent such evidence exists. 

(G) The administrative law judge, after an evidentiary hearing, 

shall decide the appeal— 

(i) not later than 60 days after receipt of rebuttal evidence 

submitted by the State agency; or 

(ii) if the State agency does not submit rebuttal evidence, not 

later than 90 days after the State agency submits the notice 

of appeal and evidence in support of the appeal. 

(H) In considering a claim or liability amount under this paragraph, the administrative law judge shall consider all grounds for 

denying the claim or liability amount, in whole or in part, including 

the contention of a State agency that the claim or liability amount 

should be waived, in whole or in part, for good cause. 

(I) The deadlines in subparagraphs (D), (E), (F), and (G) shall be 

extended by the administrative law judge for cause shown. 

(9) As used in this subsection, the term ‘‘good cause’’ includes— 

(A) a natural disaster or civil disorder that adversely affects 

supplemental nutrition assistance program operations; 

(B) a strike by employees of a State agency who are necessary for the determination of eligibility and processing of 

case changes under the supplemental nutrition assistance program; 

(C) a significant growth in the caseload under the supplemental nutrition assistance program in a State prior to or during a fiscal year, such as a 15 percent growth in caseload; 

(D) a change in the supplemental nutrition assistance program or other Federal or State program that has a substantial 

adverse impact on the management of the supplemental nutrition assistance program of a State; and 

(E) a significant circumstance beyond the control of the State 

agency. 

(d) BONUSES FOR STATES THAT DEMONSTRATE HIGH OR MOST IMPROVED PERFORMANCE.— 

(1) FISCAL YEARS 2003 AND 2004.— 


emcdonald on DSK67QTVN1PROD with HEARING
379 

(A) GUIDANCE.—With respect to fiscal years 2003 and 

2004, the Secretary shall establish, in guidance issued to 

State agencies not later than October 1, 2002— 

(i) performance criteria relating to— 

(I) actions taken to correct errors, reduce rates 

of error, and improve eligibility determinations; 

and 

(II) other indicators of effective administration 

determined by the Secretary; and 

(ii) standards for high and most improved performance to be used in awarding performance bonus payments under subparagraph (B)(ii). 

(B) PERFORMANCE BONUS PAYMENTS.—With respect to 

each of fiscal years 2003 and 2004, the Secretary shall— 

(i) measure the performance of each State agency 

with respect to the criteria established under subparagraph (A)(i); and 

(ii) subject to paragraph (3), award performance 

bonus payments in the following fiscal year, in a total 

amount of $48,000,000 for each fiscal year, to State 

agencies that meet standards for high or most improved performance established by the Secretary 

under subparagraph (A)(ii). 

(2) FISCAL YEARS 2005 AND THEREAFTER.— 

(A) REGULATIONS.—With respect to fiscal year 2005 and 

each fiscal year thereafter, the Secretary shall— 

(i) establish, by regulation, performance criteria relating to— 

(I) actions taken to correct errors, reduce rates 

of error, and improve eligibility determinations; 

and 

(II) other indicators of effective administration 

determined by the Secretary; 

(ii) establish, by regulation, standards for high and 

most improved performance to be used in awarding 

performance bonus payments under subparagraph 

(B)(ii); and 

(iii) before issuing proposed regulations to carry out 

clauses (i) and (ii), solicit ideas for performance criteria and standards for high and most improved performance from State agencies and organizations that 

represent State interests. 

(B) PERFORMANCE BONUS PAYMENTS.—With respect to 

fiscal year 2005 and each fiscal year thereafter, the Secretary shall— 

(i) measure the performance of each State agency 

with respect to the criteria established under subparagraph (A)(i); and 

(ii) subject to paragraph (3), award performance 

bonus payments in the following fiscal year, in a total 

amount of $48,000,000 for each fiscal year, to State 

agencies that meet standards for high or most improved performance established by the Secretary 

under subparagraph (A)(ii). 


emcdonald on DSK67QTVN1PROD with HEARING
380 

(3) PROHIBITION ON RECEIPT OF PERFORMANCE BONUS PAY- MENTS.—A State agency shall not be eligible for a performance 

bonus payment with respect to any fiscal year for which the 

State agency has a liability amount established under subsection (c)(1)(C). 

(4) PAYMENTS NOT SUBJECT TO JUDICIAL REVIEW.—A determination by the Secretary whether, and in what amount, to 

award a performance bonus payment under this subsection 

shall not be subject to administrative or judicial review. 

(5) USE OF PERFORMANCE BONUS PAYMENTS.—A State agency 

may use a performance bonus payment received under this 

subsection only to carry out the program established under this 

Act, including investments in— 

(A) technology; 

(B) improvements in administration and distribution; 

and 

(C) actions to prevent fraud, waste, and abuse. 

(e) The Secretary and State agencies shall (1) require, as a condition of eligibility for participation in the supplemental nutrition assistance program, that each household member furnish to the State 

agency their social security account number (or numbers, if they 

have more than one number), and (2) use such account numbers in 

the administration of the supplemental nutrition assistance program. The Secretary and State agencies shall have access to the information regarding individual supplemental nutrition assistance 

program applicants and participants who receive benefits under 

title XVI of the Social Security Act that has been provided to the 

Commissioner of Social Security, but only to the extent that the 

Secretary and the Commissioner of Social Security determine necessary for purposes of determining or auditing a household’s eligibility to receive assistance or the amount thereof under the supplemental nutrition assistance program, or verifying information related thereto. 

(f) Notwithstanding any other provision of law, counsel may be 

employed and counsel fees, court costs, bail, and other expenses incidental to the defense of officers and employees of the Department 

of Agriculture may be paid in judicial or administrative proceedings 

to which such officers and employees have been made parties and 

that arise directly out of their performance of duties under this Act. 

(g) COST SHARING FOR COMPUTERIZATION.— 

(1) IN GENERAL.—Except as provided in paragraphs (2) and 

(3), the Secretary is authorized to pay to each State agency the 

amount provided under subsection (a)(6) for the costs incurred 

by the State agency in the planning, design, development, or 

installation of 1 or more automatic data processing and information retrieval systems that the Secretary determines— 

(A) would assist in meeting the requirements of this Act; 

(B) meet such conditions as the Secretary prescribes; 

(C) are likely to provide more efficient and effective administration of the supplemental nutrition assistance program; 

(D) would be compatible with other systems used in the 

administration of State programs, including the program 

funded under part A of title IV of the Social Security Act 

(42 U.S.C. 601 et seq.); 


emcdonald on DSK67QTVN1PROD with HEARING
381 

(E) would be tested adequately before and after implementation, including through pilot projects in limited 

areas for major systems changes as determined under 

rules promulgated by the Secretary, data from which shall 

be thoroughly evaluated before the Secretary approves the 

system to be implemented more broadly; and 

(F) would be operated in accordance with an adequate 

plan for— 

(i) continuous updating to reflect changed policy and 

circumstances; and 

(ii) testing the effect of the system on access for eligible households and on payment accuracy. 

(2) LIMITATION.—The Secretary shall not make payments to 

a State agency under paragraph (1) to the extent that the 

State agency— 

(A) is reimbursed for the costs under any other Federal 

program; or 

(B) uses the systems for purposes not connected with the 

supplemental nutrition assistance program. 

(h) FUNDING OF EMPLOYMENT AND TRAINING PROGRAMS.— 

(1) IN GENERAL.— 

(A) AMOUNTS.—To carry out employment and training 

programs, the Secretary shall reserve for allocation to 

State agencies, to remain available for 24 months, from 

funds made available for each fiscal year under section 

18(a)(1), $90,000,000 for each fiscal year. 

(B) ALLOCATION.—Funds made available under subparagraph (A) shall be made available to and reallocated 

among State agencies under a reasonable formula that— 

(i) is determined and adjusted by the Secretary; and 

(ii) takes into account the number of individuals 

who are not exempt from the work requirement under 

section 6(o). 

(C) REALLOCATION.— 

(i) IN GENERAL.—If a State agency will not expend 

all of the funds allocated to the State agency for a fiscal year under subparagraph (B), the Secretary shall 

reallocate the unexpended funds to other States (during the fiscal year or the subsequent fiscal year) as the 

Secretary considers appropriate and equitable. 

(ii) TIMING.—The Secretary shall collect such information as the Secretary determines to be necessary 

about the expenditures and anticipated expenditures 

by the State agencies of the funds initially allocated to 

the State agencies under subparagraph (A) to make 

reallocations of unexpended funds under clause (i) 

within a timeframe that allows each State agency to 

which funds are reallocated at least 270 days to expend the reallocated funds. 

(iii) OPPORTUNITY.—The Secretary shall ensure that 

all State agencies have an opportunity to obtain reallocated funds. 

(D) MINIMUM ALLOCATION.—Notwithstanding subparagraph (B), the Secretary shall ensure that each State agenVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00387 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
382 

cy operating an employment and training program shall 

receive not less than $50,000 for each fiscal year. 

(E) ADDITIONAL ALLOCATIONS FOR STATES THAT ENSURE

AVAILABILITY OF WORK OPPORTUNITIES.— (i) IN GENERAL.—In addition to the allocations under 

subparagraph (A), from funds made available under 

section 18(a)(1), the Secretary shall allocate not more 

than $20,000,000 for each fiscal year to reimburse a 

State agency that is eligible under clause (ii) for the 

costs incurred in serving members of households receiving supplemental nutrition assistance program 

benefits who— 

(I) are not eligible for an exception under section 6(o)(3); and 

(II) are placed in and comply with a program 

described in subparagraph (B) or (C) of section 

6(o)(2). 

(ii) ELIGIBILITY.—To be eligible for an additional allocation under clause (i), a State agency shall make 

and comply with a commitment to offer a position in 

a program described in subparagraph (B) or (C) of section 6(o)(2) to each applicant or recipient who— 

(I) is in the last month of the 3-month period 

described in section 6(o)(2); 

(II) is not eligible for an exception under section 

6(o)(3); 

(III) is not eligible for a waiver under section 

6(o)(4); and 

(IV) is not exempt under section 6(o)(6). 

(F) PILOT PROJECTS TO REDUCE DEPENDENCY AND IN- CREASE WORK REQUIREMENTS AND WORK EFFORT UNDER

SUPPLEMENTAL NUTRITION ASSISTANCE PROGRAM.— 

(i) PILOT PROJECTS REQUIRED.— (I) IN GENERAL.—The Secretary shall carry out 

pilot projects under which State agencies shall 

enter into cooperative agreements with the Secretary to develop and test methods, including operating work programs with certain features comparable to the program of block grants to States 

for temporary assistance for needy families established under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), for employment 

and training programs and services to raise the 

number of work registrants under section 6(d) of 

this Act who obtain unsubsidized employment, increase the earned income of the registrants, and 

reduce the reliance of the registrants on public assistance, so as to reduce the need for supplemental nutrition assistance benefits. 

(II) REQUIREMENTS.—Pilot projects shall— 

(aa) meet such terms and conditions as the 

Secretary considers to be appropriate; and 

(bb) except as otherwise provided in this 

subparagraph, be in accordance with the requirements of sections 6(d) and 20. 


emcdonald on DSK67QTVN1PROD with HEARING
383 

(ii) SELECTION CRITERIA.— (I) IN GENERAL.—The Secretary shall select pilot 

projects under this subparagraph in accordance 

with the criteria established under this clause and 

additional criteria established by the Secretary. 

(II) QUALIFYING CRITERIA.—To be eligible to participate in a pilot project, a State agency shall— 

(aa) agree to participate in the evaluation 

described in clause (vii), including providing 

evidence that the State has a robust data collection system for program administration 

and cooperating to make available State data 

on the employment activities and post-participation employment, earnings, and public benefit receipt of participants to ensure proper 

and timely evaluation; 

(bb) commit to collaborate with the State 

workforce board and other job training programs in the State and local area; and 

(cc) commit to maintain at least the amount 

of State funding for employment and training 

programs and services under paragraphs (2) 

and (3) and under section 20 as the State expended for fiscal year 2013. 

(III) SELECTION CRITERIA.—In selecting pilot 

projects, the Secretary shall— 

(aa) consider the degree to which the pilot 

project would enhance existing employment 

and training programs in the State; 

(bb) consider the degree to which the pilot 

project would enhance the employment and 

earnings of program participants; 

(cc) consider whether there is evidence that 

the pilot project could be replicated easily by 

other States or political subdivisions; 

(dd) consider whether the State agency has 

a demonstrated capacity to operate high quality employment and training programs; and 

(ee) ensure the pilot projects, when considered as a group, test a range of strategies, including strategies that— 

(AA) target individuals with low skills 

or limited work experience, individuals 

subject to the requirements under section 

6(o), and individuals who are working; 

(BB) are located in a range of geographic areas and States, including rural 

and urban areas; 

(CC) emphasize education and training, 

rehabilitative services for individuals 

with barriers to employment, rapid attachment to employment, and mixed 

strategies; and 

(DD) test programs that assign work 

registrants to mandatory and voluntary 


emcdonald on DSK67QTVN1PROD with HEARING
384 

participation in employment and training 

activities. 

(iii) ACCOUNTABILITY.— (I) IN GENERAL.—The Secretary shall establish 

and implement a process to terminate a pilot 

project for which the State has failed to meet the 

criteria described in clause (ii) or other criteria established by the Secretary. 

(II) TIMING.—The process shall include a reasonable time period, not to exceed 180 days, for 

State agencies found noncompliant to correct the 

noncompliance. 

(iv) EMPLOYMENT AND TRAINING ACTIVITIES.—Allowable programs and services carried out under this subparagraph shall include those programs and services 

authorized under this Act and employment and training activities authorized under the program of block 

grants to States for temporary assistance for needy 

families established under part A of title IV of the Social Security Act (42 U.S.C. 601 et seq.), including: 

(I) Employment in the public or private sector 

that is not subsidized by any public program. 

(II) Employment in the private sector for which 

the employer receives a subsidy from public funds 

to offset all or a part of the wages and costs of employing an adult. 

(III) Employment in the public sector for which 

the employer receives a subsidy from public funds 

to offset all or a part of the wages and costs of employing an adult. 

(IV) A work activity that— 

(aa) is performed in return for public benefits; 

(bb) provides an adult with an opportunity 

to acquire the general skills, knowledge, and 

work habits necessary to obtain employment; 

(cc) is designed to improve the employability of those who cannot find unsubsidized 

employment; and 

(dd) is supervised by an employer, work site 

sponsor, or other responsible party on an ongoing basis. 

(V) Training in the public or private sector 

that— 

(aa) is given to a paid employee while the 

employee is engaged in productive work; and 

(bb) provides knowledge and skills essential 

to the full and adequate performance of the 

job. 

(VI) Job search, obtaining employment, or preparation to seek or obtain employment, including— 

(aa) life skills training; 

(bb) substance abuse treatment or mental 

health treatment, determined to be necessary 

and documented by a qualified medical, subVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00390 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
385 

stance abuse, or mental health professional; 

and 

(cc) rehabilitation activities, supervised by a 

public agency or other responsible party on an 

ongoing basis. 

(VII) Structured programs and embedded activities— 

(aa) in which adults perform work for the 

direct benefit of the community under the 

auspices of public or nonprofit organizations; 

(bb) that are limited to projects that serve 

useful community purposes in fields such as 

health, social service, environmental protection, education, urban and rural redevelopment, welfare, recreation, public facilities, 

public safety, and child care; 

(cc) that are designed to improve the employability of adults not otherwise able to obtain unsubsidized employment; 

(dd) that are supervised on an ongoing 

basis; and 

(ee) with respect to which a State agency 

takes into account, to the maximum extent 

practicable, the prior training, experience, and 

skills of a recipient in making appropriate 

community service assignments. 

(VIII) Career and technical training programs 

that are— 

(aa) directly related to the preparation of 

adults for employment in current or emerging 

occupations; and 

(bb) supervised on an ongoing basis. 

(IX) Training or education for job skills that 

are— 

(aa) required by an employer to provide an 

adult with the ability to obtain employment or 

to advance or adapt to the changing demands 

of the workplace; and 

(bb) supervised on an ongoing basis. 

(X) Education that is— 

(aa) related to a specific occupation, job, or 

job offer; and 

(bb) supervised on an ongoing basis. 

(XI) In the case of an adult who has not completed secondary school or received a certificate of 

general equivalence, regular attendance that is— 

(aa) in accordance with the requirements of 

the secondary school or course of study, at a 

secondary school or in a course of study leading to a certificate of general equivalence; and 

(bb) supervised on an ongoing basis. 

(XII) Providing child care to enable another recipient of public benefits to participate in a community service program that— 


emcdonald on DSK67QTVN1PROD with HEARING
386 

(aa) does not provide compensation for the 

community service; 

(bb) is a structured program designed to improve the employability of adults who participate in the program; and 

(cc) is supervised on an ongoing basis. 

(v) SANCTIONS.—Subject to clause (vi), no work registrant shall be eligible to participate in the supplemental nutrition assistance program if the individual 

refuses without good cause to participate in an employment and training program under this subparagraph, to the extent required by the State agency. 

(vi) STANDARDS.— 

(I) IN GENERAL.—Employment and training activities under this subparagraph shall be considered to be carried out under section 6(d), including 

for the purpose of satisfying any conditions of participation and duration of ineligibility. 

(II) STANDARDS FOR CERTAIN EMPLOYMENT ACTIVITIES.—The Secretary shall establish standards 

for employment activities described in subclauses 

(I), (II), and (III) of clause (iv) that ensure that 

failure to work for reasons beyond the control of 

an individual, such as involuntary reduction in 

hours of employment, shall not result in ineligibility. 

(III) PARTICIPATION IN OTHER PROGRAMS.—Before assigning a work registrant to mandatory employment and training activities, a State agency 

shall— 

(aa) assess whether the work registrant is 

participating in substantial employment and 

training activities outside of the pilot project 

that are expected to result in the work registrant gaining increased skills, training, 

work, or experience consistent with the objectives of the pilot project; and 

(bb) if determined to be acceptable, count 

hours engaged in the activities toward any 

minimum participation requirement. 

(vii) EVALUATION AND REPORTING.— 

(I) INDEPENDENT EVALUATION.— 

(aa) IN GENERAL.—The Secretary shall, 

under such terms and conditions as the Secretary determines to be appropriate, conduct 

for each State agency that enters into a cooperative agreement under clause (i) an independent longitudinal evaluation of each pilot 

project of the State agency under this subparagraph, with results reported not less frequently than in consecutive 12-month increments. 

(bb) PURPOSE.—The purpose of the independent evaluation shall be to measure the 

impact of employment and training programs 


emcdonald on DSK67QTVN1PROD with HEARING
387 

and services provided by each State agency 

under the pilot projects on the ability of 

adults in each pilot project target population 

to find and retain employment that leads to 

increased household income and reduced reliance on public assistance, as well as other 

measures of household well-being, compared 

to what would have occurred in the absence of 

the pilot project. 

(cc) METHODOLOGY.—The independent evaluation shall use valid statistical methods that 

can determine, for each pilot project, the difference, if any, between supplemental nutrition assistance and other public benefit receipt expenditures, employment, earnings and 

other impacts as determined by the Secretary— 

(AA) as a result of the employment and 

training programs and services provided 

by the State agency under the pilot 

project; as compared to 

(BB) a control group that is not subject 

to the employment and training programs 

and services provided by the State agency 

under the pilot project. 

(II) REPORTING.—Not later than December 31, 

2015, and each December 31 thereafter until the 

completion of the last evaluation under subclause 

(I), the Secretary shall submit to the Committee 

on Agriculture of the House of Representatives 

and the Committee on Agriculture, Nutrition, and 

Forestry of the Senate and share broadly, including by posting on the Internet website of the Department of Agriculture, a report that includes a 

description of— 

(aa) the status of each pilot project carried 

out under this subparagraph; 

(bb) the results of the evaluation completed 

during the previous fiscal year; 

(cc) to the maximum extent practicable, 

baseline information relevant to the stated 

goals and desired outcomes of the pilot 

project; 

(dd) the employment and training programs 

and services each State tested under the pilot, 

including— 

(AA) the system of the State for assessing the ability of work registrants to participate in and meet the requirements of 

employment and training activities and 

assigning work registrants to appropriate 

activities; and 

(BB) the employment and training activities and services provided under the 

pilot; 


emcdonald on DSK67QTVN1PROD with HEARING
388 

(ee) the impact of the employment and 

training programs and services on appropriate 

employment, income, and public benefit receipt as well as other outcomes among households participating in the pilot project, relative to households not participating; and 

(ff) the steps and funding necessary to incorporate into State employment and training 

programs and services the components of the 

pilot projects that demonstrate increased employment and earnings. 

(viii) FUNDING.— 

(I) IN GENERAL.—Subject to subclause (II), from 

amounts made available under section 18(a)(1), 

the Secretary shall use to carry out this subparagraph— 

(aa) for fiscal year 2014, $10,000,000; and 

(bb) for fiscal year 2015, $190,000,000. 

(II) LIMITATIONS.— 

(aa) IN GENERAL.—The Secretary shall not 

fund more than 10 pilot projects under this 

subparagraph. 

(bb) DURATION.—Each pilot project shall be 

in effect for not more than 3 years. 

(III) AVAILABILITY OF FUNDS.—Funds made 

available under subclause (I) shall remain available through September 30, 2018. 

(ix) USE OF FUNDS.— (I) IN GENERAL.—Funds made available under 

this subparagraph for pilot projects shall be used 

only for— 

(aa) pilot projects that comply with this Act; 

(bb) the program and administrative costs 

of carrying out the pilot projects; 

(cc) the costs incurred in developing systems and providing information and data for 

the independent evaluations under clause 

(vii); and 

(dd) the costs of the evaluations under 

clause (vii). 

(II) MAINTENANCE OF EFFORT.—Funds made 

available under this subparagraph shall be used 

only to supplement, not to supplant, non-Federal 

funds used for existing employment and training 

activities or services. 

(III) OTHER FUNDS.—In carrying out pilot 

projects, States may contribute additional funds 

obtained from other sources, including Federal, 

State, or private funds, on the condition that the 

use of the contributions is permissible under Federal law. 

(2) If, in carrying out such program during such fiscal year, a 

State agency incurs costs that exceed the amount allocated to the 

State agency under paragraph (1), the Secretary shall pay such 

State agency an amount equal to 50 per centum of such additional 


emcdonald on DSK67QTVN1PROD with HEARING
389 

costs, subject to the first limitation in paragraph (3), including the 

costs for case management and casework to facilitate the transition 

from economic dependency to self-sufficiency through work. 

(3) The Secretary shall also reimburse each State agency in an 

amount equal to 50 per centum of the total amount of payments 

made or costs incurred by the State agency in connection with 

transportation costs and other expenses reasonably necessary and 

directly related to participation in an employment and training program under section 6(d)(4) or a pilot project under paragraph 

(1)(F), except that the amount of the reimbursement for dependent 

care expenses shall not exceed an amount equal to the payment 

made under section 6(d)(4)(I)(i)(II) but not more than the applicable 

local market rate, and such reimbursement shall not be made out 

of funds allocated under paragraph (1). 

(4) Funds provided to a State agency under this subsection may 

be used only for operating an employment and training program 

under section 6(d)(4) or a pilot project under paragraph (1)(F), and 

may not be used for carrying out other provisions of this Act. 

(5) MONITORING.— 

(A) IN GENERAL.—The Secretary shall monitor the employment and training programs carried out by State agencies under section 6(d)(4) and assess the effectiveness of 

the programs in— 

(i) preparing members of households participating in 

the supplemental nutrition assistance program for employment, including the acquisition of basic skills necessary for employment; and 

(ii) increasing the number of household members 

who obtain and retain employment subsequent to participation in the employment and training programs. 

(B) REPORTING MEASURES.— 

(i) IN GENERAL.—The Secretary, in consultation with 

the Secretary of Labor, shall develop State reporting 

measures that identify improvements in the skills, 

training, education, or work experience of members of 

households participating in the supplemental nutrition 

assistance program. 

(ii) REQUIREMENTS.—Measures shall— 

(I) be based on common measures of performance for Federal workforce training programs; and 

(II) include additional indicators that reflect the 

challenges facing the types of members of households participating in the supplemental nutrition 

assistance program who participate in a specific 

employment and training component. 

(iii) STATE REQUIREMENTS.—The Secretary shall require that each State employment and training plan 

submitted under section 11(e)(19) identifies appropriate reporting measures for each proposed component that serves a threshold number of participants 

determined by the Secretary of at least 100 people a 

year. 

(iv) INCLUSIONS.—Reporting measures described in 

clause (iii) may include— 


emcdonald on DSK67QTVN1PROD with HEARING
390 

(I) the percentage and number of program participants who received employment and training 

services and are in unsubsidized employment subsequent to the receipt of those services; 

(II) the percentage and number of program participants who obtain a recognized credential, including a registered apprenticeship, or a regular 

secondary school diploma or its recognized equivalent, while participating in, or within 1 year after 

receiving, employment and training services; 

(III) the percentage and number of program participants who are in an education or training program that is intended to lead to a recognized credential, including a registered apprenticeship or 

on-the-job training program, a regular secondary 

school diploma or its recognized equivalent, or unsubsidized employment; 

(IV) subject to terms and conditions established 

by the Secretary, measures developed by each 

State agency to assess the skills acquisition of employment and training program participants that 

reflect the goals of the specific employment and 

training program components of the State agency, 

which may include, at a minimum— 

(aa) the percentage and number of program 

participants who are meeting program requirements in each component of the education and training program of the State 

agency; 

(bb) the percentage and number of program 

participants who are gaining skills likely to 

lead to employment as measured through 

testing, quantitative or qualitative assessment, or other method; and 

(cc) the percentage and number of program 

participants who do not comply with employment and training requirements and who are 

ineligible under section 6(b); and 

(V) other indicators approved by the Secretary. 

(C) OVERSIGHT OF STATE EMPLOYMENT AND TRAINING ACTIVITIES.—The Secretary shall assess State employment 

and training programs on a periodic basis to ensure— 

(i) compliance with Federal employment and training program rules and regulations; 

(ii) that program activities are appropriate to meet 

the needs of the individuals referred by the State 

agency to an employment and training program component; 

(iii) that reporting measures are appropriate to identify improvements in skills, training, work and experience for participants in an employment and training 

program component; and 

(iv) for States receiving additional allocations under 

paragraph (1)(E), any information the Secretary may 


emcdonald on DSK67QTVN1PROD with HEARING
391 

require to evaluate the compliance of the State agency 

with paragraph (1), which may include— 

(I) a report for each fiscal year of the number of 

individuals in the State who meet the conditions 

of paragraph (1)(E)(ii), the number of individuals 

the State agency offers a position in a program described in subparagraph (B) or (C) of section 

6(o)(2), and the number who participate in such a 

program; 

(II) a description of the types of employment 

and training programs the State agency uses to 

comply with paragraph (1)(E) and the availability 

of those programs throughout the State; and 

(III) any additional information the Secretary 

determines to be appropriate. 

(D) STATE REPORT.—Each State agency shall annually 

prepare and submit to the Secretary a report on the State 

employment and training program that includes, using 

measures identified under subparagraph (B), the numbers 

of supplemental nutrition assistance program participants 

who have gained skills, training, work, or experience that 

will increase the ability of the participants to obtain regular employment. 

(E) MODIFICATIONS TO THE STATE EMPLOYMENT AND

TRAINING PLAN.—Subject to terms and conditions established by the Secretary, if the Secretary determines that 

the performance of a State agency with respect to employment and training outcomes is inadequate, the Secretary 

may require the State agency to make modifications to the 

State employment and training plan to improve the outcomes. 

(F) PERIODIC EVALUATION.—Subject to terms and conditions established by the Secretary, not later than October 

1, 2016, and not less frequently than once every 5 years 

thereafter, the Secretary shall conduct a study to review 

existing practice and research to identify employment and 

training program components and practices that— 

(i) effectively assist members of households participating in the supplemental nutrition assistance program in gaining skills, training, work, or experience 

that will increase the ability of the participants to obtain regular employment; and 

(ii) are best integrated with statewide workforce development systems. 

(i)(1) The Department of Agriculture may use quality control information made available under this section to determine which 

project areas have payment error rates (as defined in subsection 

(d)(1)) that impair the integrity of the supplemental nutrition assistance program. 

(2) The Secretary may require a State agency to carry out new 

or modified procedures for the certification of households in areas 

identified under paragraph (1) if the Secretary determines such 

procedures would improve the integrity of the supplemental nutrition assistance program and be cost effective. 


emcdonald on DSK67QTVN1PROD with HEARING
392 

(j) Not later than 180 days after the date of the enactment of the 

Hunger Prevention Act of 1988, and annually thereafter, the Secretary shall publish instructional materials specifically designed to 

be used by the State agency to provide intensive training to State 

agency personnel who undertake the certification of households 

that include a member who engages in farming. 

(k) REDUCTIONS IN PAYMENTS FOR ADMINISTRATIVE COSTS.— (1) DEFINITIONS.—In this subsection: 

(A) AFDC PROGRAM.—The term ‘‘AFDC program’’ means 

the program of aid to families with dependent children established under part A of title IV of the Social Security Act 

(42 U.S.C. 601 et seq. (as in effect, with respect to a State, 

during the base period for that State)). 

(B) BASE PERIOD.—The term ‘‘base period’’ means the period used to determine the amount of the State family assistance grant for a State under section 403 of the Social 

Security Act (42 U.S.C. 603). 

(C) MEDICAID PROGRAM.—The term ‘‘medicaid program’’ 

means the program of medical assistance under a State 

plan or under a waiver of the plan under title XIX of the 

Social Security Act (42 U.S.C. 1396 et seq.). 

(2) DETERMINATIONS OF AMOUNTS ATTRIBUTABLE TO BENE- FITING PROGRAMS.—Not later than 180 days after the date of 

enactment of this subsection, the Secretary of Health and 

Human Services, in consultation with the Secretary of Agriculture and the States, shall, with respect to the base period 

for each State, determine— 

(A) the annualized amount the State received under section 403(a)(3) of the Social Security Act (42 U.S.C. 

603(a)(3) (as in effect during the base period)) for administrative costs common to determining the eligibility of individuals, families, and households eligible or applying for 

the AFDC program and the supplemental nutrition assistance program, the AFDC program and the medicaid program, and the AFDC program, the supplemental nutrition 

assistance program, and the medicaid program that were 

allocated to the AFDC program; and 

(B) the annualized amount the State would have received under section 403(a)(3) of the Social Security Act 

(42 U.S.C. 603(a)(3) (as so in effect)), section 1903(a)(7) of 

the Social Security Act (42 U.S.C. 1396b(a)(7) (as so in effect)), and subsection (a) of this section (as so in effect), for 

administrative costs common to determining the eligibility 

of individuals, families, and households eligible or applying 

for the AFDC program and the supplemental nutrition assistance program, the AFDC program and the medicaid 

program, and the AFDC program, the supplemental nutrition assistance program, and the medicaid program, if 

those costs had been allocated equally among such programs for which the individual, family, or household was 

eligible or applied for. 

(3) REDUCTION IN PAYMENT.— (A) IN GENERAL.—Notwithstanding any other provision 

of this section, the Secretary shall reduce, for each fiscal 

year, the amount paid under subsection (a) to each State 


emcdonald on DSK67QTVN1PROD with HEARING
393 

by an amount equal to the amount determined for the supplemental nutrition assistance program under paragraph 

(2)(B). The Secretary shall, to the extent practicable, make 

the reductions required by this paragraph on a quarterly 

basis. 

(B) APPLICATION.—If the Secretary of Health and 

Human Services does not make the determinations required by paragraph (2) by September 30, 1999— 

(i) during the fiscal year in which the determinations are made, the Secretary shall reduce the amount 

paid under subsection (a) to each State by an amount 

equal to the sum of the amounts determined for the 

supplemental nutrition assistance program under 

paragraph (2)(B) for fiscal year 1999 through the fiscal 

year during which the determinations are made; and 

(ii) for each subsequent fiscal year, subparagraph 

(A) applies. 

(4) APPEAL OF DETERMINATIONS.— 

(A) IN GENERAL.—Not later than 5 days after the date on 

which the Secretary of Health and Human Services makes 

any determination required by paragraph (2) with respect 

to a State, the Secretary shall notify the chief executive officer of the State of the determination. 

(B) REVIEW BY ADMINISTRATIVE LAW JUDGE.— 

(i) IN GENERAL.—Not later than 60 days after the 

date on which a State receives notice under subparagraph (A) of a determination, the State may appeal 

the determination, in whole or in part, to an administrative law judge of the Department of Health and 

Human Services by filing an appeal with the administrative law judge. 

(ii) DOCUMENTATION.—The administrative law judge 

shall consider an appeal filed by a State under clause 

(i) on the basis of such documentation as the State 

may submit and as the administrative law judge may 

require to support the final decision of the administrative law judge. 

(iii) REVIEW.—In deciding whether to uphold a determination, in whole or in part, the administrative 

law judge shall conduct a thorough review of the 

issues and take into account all relevant evidence. 

(iv) DEADLINE.—Not later than 60 days after the 

date on which the record is closed, the administrative 

law judge shall— 

(I) make a final decision with respect to an appeal filed under clause (i); and 

(II) notify the chief executive officer of the State 

of the decision. 

(C) REVIEW BY DEPARTMENTAL APPEALS BOARD.— 

(i) IN GENERAL.—Not later than 30 days after the 

date on which a State receives notice under subparagraph (B) of a final decision, the State may appeal the 

decision, in whole or in part, to the Departmental Appeals Board established in the Department of Health 


emcdonald on DSK67QTVN1PROD with HEARING
394 

and Human Services (referred to in this paragraph as 

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

(ii) REVIEW.—The Board shall review the decision on 

the record. 

(iii) DEADLINE.—Not later than 60 days after the 

date on which the appeal is filed, the Board shall— 

(I) make a final decision with respect to an appeal filed under clause (i); and 

(II) notify the chief executive officer of the State 

of the decision. 

(D) JUDICIAL REVIEW.—The determinations of the Secretary of Health and Human Services under paragraph (2), 

and a final decision of the administrative law judge or 

Board under subparagraphs (B) and (C), respectively, shall 

not be subject to judicial review. 

(E) REDUCED PAYMENTS PENDING APPEAL.—The pendency of an appeal under this paragraph shall not affect the 

requirement that the Secretary reduce payments in accordance with paragraph (3). 

(5) ALLOCATION OF ADMINISTRATIVE COSTS.— 

(A) IN GENERAL.—No funds or expenditures described in 

subparagraph (B) may be used to pay for costs— 

(i) eligible for reimbursement under subsection (a) 

(or costs that would have been eligible for reimbursement but for this subsection); and 

(ii) allocated for reimbursement to the supplemental 

nutrition assistance program under a plan submitted 

by a State to the Secretary of Health and Human 

Services to allocate administrative costs for public assistance programs. 

(B) FUNDS AND EXPENDITURES.—Subparagraph (A) applies to— 

(i) funds made available to carry out part A of title 

IVø, or title XX,¿ of the Social Security Act (42 U.S.C. 

601 et seq.ø, 1397 et seq.¿); 

(ii) expenditures made as qualified State expenditures (as defined in section 409(a)(7)(B) of that Act (42 

U.S.C. 609(a)(7)(B))); 

(iii) any other Federal funds (except funds provided 

under subsection (a)); and 

(iv) any other State funds that are— 

(I) expended as a condition of receiving Federal 

funds; or 

(II) used to match Federal funds under a Federal program other than the supplemental nutrition assistance program. 

* * * * * * * 

PERSONAL RESPONSIBILITY AND WORK OPPORTUNITY 

RECONCILIATION ACT OF 1996 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
395 

TITLE IV—RESTRICTING WELFARE AND 

PUBLIC BENEFITS FOR ALIENS 

* * * * * * * 

Subtitle A—Eligibility for Federal Benefits 

* * * * * * * 

SEC. 402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS FOR CERTAIN 

FEDERAL PROGRAMS. 

(a) LIMITED ELIGIBILITY FOR SPECIFIED FEDERAL PROGRAMS.— (1) IN GENERAL.—Notwithstanding any other provision of law 

and except as provided in paragraph (2), an alien who is a 

qualified alien (as defined in section 431) is not eligible for any 

specified Federal program (as defined in paragraph (3)). 

(2) EXCEPTIONS.— (A) TIME-LIMITED EXCEPTION FOR REFUGEES AND

ASYLEES.—With respect to the specified Federal programs 

described in paragraph (3), paragraph (1) shall not apply 

to an alien until 7 years after the date— 

(i) an alien is admitted to the United States as a refugee under section 207 of the Immigration and Nationality Act; 

(ii) an alien is granted asylum under section 208 of 

such Act; 

(iii) an alien’s deportation is withheld under section 

243(h) of such Act (as in effect immediately before the 

effective date of section 307 of division C of Public 

Law 104–208) or section 241(b)(3) of such Act (as 

amended by section 305(a) of division C of Public Law 

104–208); 

(iv) an alien is granted status as a Cuban and Haitian entrant (as defined in section 501(e) of the Refugee Education Assistance Act of 1980); or 

(v) an alien is admitted to the United States as an 

Amerasian immigrant pursuant to section 584 of the 

Foreign Operations, Export Financing, and Related 

Programs Appropriations Act, 1988 (as contained in 

section 101(e) of Public Law 100–202 and amended by 

the 9th proviso under MIGRATION AND REFUGEE ASSISTANCE in title II of the Foreign Operations, Export Financing, and Related Programs Appropriations Act, 

1989, Public Law 100–461, as amended). 

(B) CERTAIN PERMANENT RESIDENT ALIENS.—Paragraph 

(1) shall not apply to an alien who— 

(i) is lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act; and 

(ii)(I) has worked 40 qualifying quarters of coverage 

as defined under title II of the Social Security Act or 

can be credited with such qualifying quarters as provided under section 435, and (II) in the case of any 

such qualifying quarter creditable for any period beVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00401 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
396 

ginning after December 31, 1996, did not receive any 

Federal means-tested public benefit (as provided 

under section 403) during any such period. 

(C) VETERAN AND ACTIVE DUTY EXCEPTION.—Paragraph 

(1) shall not apply to an alien who is lawfully residing in 

any State and is— 

(i) a veteran (as defined in section 101, 1101, or 

1301, or as described in section 107 of title 38, United 

States Code) with a discharge characterized as an honorable discharge and not on account of alienage and 

who fulfills the minimum active-duty service requirements of section 5303A(d) of title 38, United States 

Code, 

(ii) on active duty (other than active duty for training) in the Armed Forces of the United States, or 

(iii) the spouse or unmarried dependent child of an 

individual described in clause (i) or (ii) or the 

unremarried surviving spouse of an individual described in clause (i) or (ii) who is deceased if the marriage fulfills the requirements of section 1304 of title 

38, United States Code. 

(D) TRANSITION FOR ALIENS CURRENTLY RECEIVING BENE- FITS.— (i) SSI.— 

(I) IN GENERAL.—With respect to the specified 

Federal program described in paragraph (3)(A), 

during the period beginning on the date of the enactment of this Act and ending on September 30, 

1998, the Commissioner of Social Security shall 

redetermine the eligibility of any individual who 

is receiving benefits under such program as of the 

date of the enactment of this Act and whose eligibility for such benefits may terminate by reason of 

the provisions of this subsection. 

(II) REDETERMINATION CRITERIA.—With respect 

to any redetermination under subclause (I), the 

Commissioner of Social Security shall apply the 

eligibility criteria for new applicants for benefits 

under such program. 

(III) GRANDFATHER PROVISION.—The provisions 

of this subsection and the redetermination under 

subclause (I), shall only apply with respect to the 

benefits of an individual described in subclause (I) 

for months beginning on or after September 30, 

1998. 

(IV) NOTICE.—Not later than March 31, 1997, 

the Commissioner of Social Security shall notify 

an individual described in subclause (I) of the provisions of this clause. 

(ii) FOOD STAMPS.— (I) IN GENERAL.—With respect to the specified 

Federal program described in paragraph (3)(B), ineligibility under paragraph (1) shall not apply 

until April 1, 1997, to an alien who received benefits under such program on the date of enactment 


emcdonald on DSK67QTVN1PROD with HEARING
397 

of this Act, unless such alien is determined to be 

ineligible to receive such benefits under the Food 

Stamp Act of 1977. The State agency shall recertify the eligibility of all such aliens during the period beginning April 1, 1997, and ending August 

22, 1997. 

(II) RECERTIFICATION CRITERIA.—With respect to 

any recertification under subclause (I), the State 

agency shall apply the eligibility criteria for applicants for benefits under such program. 

(III) GRANDFATHER PROVISION.—The provisions 

of this subsection and the recertification under 

subclause (I) shall only apply with respect to the 

eligibility of an alien for a program for months beginning on or after the date of recertification, if on 

the date of enactment of this Act the alien is lawfully residing in any State and is receiving benefits under such program on such date of enactment. 

(E) ALIENS RECEIVING SSI ON AUGUST 22, 1996.—With respect to eligibility for benefits for the program defined in 

paragraph (3)(A) (relating to the supplemental security income program), paragraph (1) shall not apply to an alien 

who is lawfully residing in the United States and who was 

receiving such benefits on August 22, 1996. 

(F) DISABLED ALIENS LAWFULLY RESIDING IN THE UNITED

STATES ON AUGUST 22, 1996.—With respect to eligibility for 

benefits for the specified Federal programs described in 

paragraph (3), paragraph (1) shall not apply to an alien 

who— 

(i) in the case of the specified Federal program described in paragraph (3)(A)— 

(I) was lawfully residing in the United States on 

August 22, 1996; and 

(II) is blind or disabled (as defined in paragraph 

(2) or (3) of section 1614(a) of the Social Security 

Act (42 U.S.C. 1382c(a))); and 

(ii) in the case of the specified Federal program described in paragraph (3)(B), is receiving benefits or assistance for blindness or disability (within the meaning of section 3(j) of the Food Stamp Act of 1977 (7 

U.S.C. 2012(r))). 

(G) EXCEPTION FOR CERTAIN INDIANS.—With respect to 

eligibility for benefits for the specified Federal programs 

described in paragraph (3), section 401(a) and paragraph 

(1) shall not apply to any individual— 

(i) who is an American Indian born in Canada to 

whom the provisions of section 289 of the Immigration 

and Nationality Act (8 U.S.C. 1359) apply; or 

(ii) who is a member of an Indian tribe (as defined 

in section 4(e) of the Indian Self-Determination and 

Education Assistance Act (25 U.S.C. 450b(e))). 

(H) SSI EXCEPTION FOR CERTAIN RECIPIENTS ON THE

BASIS OF VERY OLD APPLICATIONS.—With respect to eligibility for benefits for the program defined in paragraph 


emcdonald on DSK67QTVN1PROD with HEARING
398 

(3)(A) (relating to the supplemental security income program), paragraph (1) shall not apply to any individual— 

(i) who is receiving benefits under such program for 

months after July 1996 on the basis of an application 

filed before January 1, 1979; and 

(ii) with respect to whom the Commissioner of Social 

Security lacks clear and convincing evidence that such 

individual is an alien ineligible for such benefits as a 

result of the application of this section. 

(I) FOOD STAMP EXCEPTION FOR CERTAIN ELDERLY INDI- VIDUALS.—With respect to eligibility for benefits for the 

specified Federal program described in paragraph (3)(B), 

paragraph (1) shall not apply to any individual who on August 22, 1996— 

(i) was lawfully residing in the United States; and 

(ii) was 65 years of age or older. 

(J) FOOD STAMP EXCEPTION FOR CERTAIN CHILDREN.— 

With respect to eligibility for benefits for the specified Federal program described in paragraph (3)(B), paragraph (1) 

shall not apply to any individual who is under 18 years of 

age. 

(K) FOOD STAMP EXCEPTION FOR CERTAIN HMONG AND

HIGHLAND LAOTIANS.—With respect to eligibility for benefits for the specified Federal program described in paragraph (3)(B), paragraph (1) shall not apply to— 

(i) any individual who— 

(I) is lawfully residing in the United States; and 

(II) was a member of a Hmong or Highland Laotian tribe at the time that the tribe rendered assistance to United States personnel by taking part 

in a military or rescue operation during the Vietnam era (as defined in section 101 of title 38, 

United States Code); 

(ii) the spouse, or an unmarried dependent child, of 

such an individual; or 

(iii) the unremarried surviving spouse of such an individual who is deceased. 

(L) FOOD STAMP EXCEPTION FOR CERTAIN QUALIFIED

ALIENS.—With respect to eligibility for benefits for the 

specified Federal program described in paragraph (3)(B), 

paragraph (1) shall not apply to any qualified alien who 

has resided in the United States with a status within the 

meaning of the term ‘‘qualified alien’’ for a period of 5 

years or more beginning on the date of the alien’s entry 

into the United States. 

(M) SSI EXTENSIONS THROUGH FISCAL YEAR 2011.— 

(i) TWO-YEAR EXTENSION FOR CERTAIN ALIENS AND

VICTIMS OF TRAFFICKING.— 

(I) IN GENERAL.—Subject to clause (ii), with respect to eligibility for benefits under subparagraph (A) for the specified Federal program described in paragraph (3)(A) of qualified aliens (as 

defined in section 431(b)) and victims of trafficking in persons (as defined in section 

107(b)(1)(C) of division A of the Victims of TrafVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00404 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
399 

ficking and Violence Protection Act of 2000 (Public 

Law 106–386) or as granted status under section 

101(a)(15)(T)(ii) of the Immigration and Nationality Act), the 7-year period described in subparagraph (A) shall be deemed to be a 9-year period 

during fiscal years 2009 through 2011 in the case 

of such a qualified alien or victim of trafficking 

who furnishes to the Commissioner of Social Security the declaration required under subclause (IV) 

(if applicable) and is described in subclause (III). 

(II) ALIENS AND VICTIMS WHOSE BENEFITS

CEASED IN PRIOR FISCAL YEARS.—Subject to clause 

(ii), beginning on the date of the enactment of the 

SSI Extension for Elderly and Disabled Refugees 

Act, any qualified alien (as defined in section 

431(b)) or victim of trafficking in persons (as defined in section 107(b)(1)(C) of division A of the 

Victims of Trafficking and Violence Protection Act 

of 2000 (Public Law 106–386) or as granted status 

under section 101(a)(15)(T)(ii) of the Immigration 

and Nationality Act) rendered ineligible for the 

specified Federal program described in paragraph 

(3)(A) during the period beginning on August 22, 

1996, and ending on September 30, 2008, solely by 

reason of the termination of the 7-year period described in subparagraph (A) shall be eligible for 

such program for an additional 2-year period in 

accordance with this clause, if such qualified alien 

or victim of trafficking meets all other eligibility 

factors under title XVI of the Social Security Act, 

furnishes to the Commissioner of Social Security 

the declaration required under subclause (IV) (if 

applicable), and is described in subclause (III). 

(III) ALIENS AND VICTIMS DESCRIBED.—For purposes of subclauses (I) and (II), a qualified alien or 

victim of trafficking described in this subclause is 

an alien or victim who— 

(aa) has been a lawful permanent resident 

for less than 6 years and such status has not 

been abandoned, rescinded under section 246 

of the Immigration and Nationality Act, or 

terminated through removal proceedings 

under section 240 of the Immigration and Nationality Act, and the Commissioner of Social 

Security has verified such status, through 

procedures established in consultation with 

the Secretary of Homeland Security; 

(bb) has filed an application, within 4 years 

from the date the alien or victim began receiving supplemental security income benefits, to 

become a lawful permanent resident with the 

Secretary of Homeland Security, and the 

Commissioner of Social Security has verified, 

through procedures established in consultaVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00405 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
400 

tion with such Secretary, that such application is pending; 

(cc) has been granted the status of Cuban 

and Haitian entrant, as defined in section 

501(e) of the Refugee Education Assistance 

Act of 1980 (Public Law 96–422), for purposes 

of the specified Federal program described in 

paragraph (3)(A); 

(dd) has had his or her deportation withheld by the Secretary of Homeland Security 

under section 243(h) of the Immigration and 

Nationality Act (as in effect immediately before the effective date of section 307 of division C of Public Law 104–208), or whose removal is withheld under section 241(b)(3) of 

such Act; 

(ee) has not attained age 18; or 

(ff) has attained age 70. 

(IV) DECLARATION REQUIRED.— 

(aa) IN GENERAL.—For purposes of subclauses (I) and (II), the declaration required 

under this subclause of a qualified alien or 

victim of trafficking described in either such 

subclause is a declaration under penalty of 

perjury stating that the alien or victim has 

made a good faith effort to pursue United 

States citizenship, as determined by the Secretary of Homeland Security. The Commissioner of Social Security shall develop criteria 

as needed, in consultation with the Secretary 

of Homeland Security, for consideration of 

such declarations. 

(bb) EXCEPTION FOR CHILDREN.—A qualified 

alien or victim of trafficking described in subclause (I) or (II) who has not attained age 18 

shall not be required to furnish to the Commissioner of Social Security a declaration described in item (aa) as a condition of being eligible for the specified Federal program described in paragraph (3)(A) for an additional 

2-year period in accordance with this clause. 

(V) PAYMENT OF BENEFITS TO ALIENS WHOSE

BENEFITS CEASED IN PRIOR FISCAL YEARS.—Benefits paid to a qualified alien or victim described in 

subclause (II) shall be paid prospectively over the 

duration of the qualified alien’s or victim’s renewed eligibility. 

(ii) SPECIAL RULE IN CASE OF PENDING OR APPROVED

NATURALIZATION APPLICATION.—With respect to eligibility for benefits for the specified program described 

in paragraph (3)(A), paragraph (1) shall not apply during fiscal years 2009 through 2011 to an alien described in one of clauses (i) through (v) of subparagraph (A) or a victim of trafficking in persons (as defined in section 107(b)(1)(C) of division A of the VicVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00406 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
401 

tims of Trafficking and Violence Protection Act of 2000 

(Public Law 106–386) or as granted status under section 101(a)(15)(T)(ii) of the Immigration and Nationality Act), if such alien or victim (including any such 

alien or victim rendered ineligible for the specified 

Federal program described in paragraph (3)(A) during 

the period beginning on August 22, 1996, and ending 

on September 30, 2008, solely by reason of the termination of the 7-year period described in subparagraph 

(A)) has filed an application for naturalization that is 

pending before the Secretary of Homeland Security or 

a United States district court based on section 336(b) 

of the Immigration and Nationality Act, or has been 

approved for naturalization but not yet sworn in as a 

United States citizen, and the Commissioner of Social 

Security has verified, through procedures established 

in consultation with the Secretary of Homeland Security, that such application is pending or has been approved. 

(3) SPECIFIED FEDERAL PROGRAM DEFINED.—For purposes of 

this title, the term ‘‘specified Federal program’’ means any of 

the following: 

(A) SSI.—The supplemental security income program 

under title XVI of the Social Security Act, including supplementary payments pursuant to an agreement for Federal administration under section 1616(a) of the Social Security Act and payments pursuant to an agreement entered into under section 212(b) of Public Law 93–66. 

(B) FOOD STAMPS.—The food stamp program as defined 

in section 3(l) of the Food Stamp Act of 1977. 

(b) LIMITED ELIGIBILITY FOR DESIGNATED FEDERAL PROGRAMS.— (1) IN GENERAL.—Notwithstanding any other provision of law 

and except as provided in section 403 and paragraph (2), a 

State is authorized to determine the eligibility of an alien who 

is a qualified alien (as defined in section 431) for any designated Federal program (as defined in paragraph (3)). 

(2) EXCEPTIONS.—Qualified aliens under this paragraph shall 

be eligible for any designated Federal program. 

(A) TIME-LIMITED EXCEPTION FOR REFUGEES AND

ASYLEES.— 

(i) MEDICAID.—With respect to the designated Federal program described in paragraph (3)(C), paragraph 

(1) shall not apply to an alien until 7 years after the 

date— 

(I) an alien is admitted to the United States as 

a refugee under section 207 of the Immigration 

and Nationality Act; 

(II) an alien is granted asylum under section 

208 of such Act; 

(III) an alien’s deportation is withheld under 

section 243(h) of such Act (as in effect immediately before the effective date of section 307 of 

division C of Public Law 104–208) or section 

241(b)(3) of such Act (as amended by section 

305(a) of division C of Public Law 104–208); 


emcdonald on DSK67QTVN1PROD with HEARING
402 

(IV) an alien is granted status as a Cuban and 

Haitian entrant (as defined in section 501(e) of the 

Refugee Education Assistance Act of 1980); or 

(V) an alien admitted to the United States as an 

Amerasian immigrant as described in subsection 

(a)(2)(A)(i)(V) until 5 years after the date of such 

alien’s entry into the United States. 

(ii) OTHER DESIGNATED FEDERAL PROGRAMS.—With 

respect to the designated Federal programs under 

paragraph (3) (other than subparagraph (C)), paragraph (1) shall not apply to an alien until 5 years after 

the date— 

(I) an alien is admitted to the United States as 

a refugee under section 207 of the Immigration 

and Nationality Act; 

(II) an alien is granted asylum under section 

208 of such Act; 

(III) an alien’s deportation is withheld under 

section 243(h) of such Act; 

(IV) an alien is granted status as a Cuban and 

Haitian entrant (as defined in section 501(e) of the 

Refugee Education Assistance Act of 1980); or 

(V) an alien admitted to the United States as an 

Amerasian immigrant as described in subsection 

(a)(2)(A)(i)(V) until 5 years after the date of such 

alien’s entry into the United States. 

(B) CERTAIN PERMANENT RESIDENT ALIENS.—An alien 

who— 

(i) is lawfully admitted to the United States for permanent residence under the Immigration and Nationality Act; and 

(ii)(I) has worked 40 qualifying quarters of coverage 

as defined under title II of the Social Security Act or 

can be credited with such qualifying quarters as provided under section 435, and (II) in the case of any 

such qualifying quarter creditable for any period beginning after December 31, 1996, did not receive any 

Federal means-tested public benefit (as provided 

under section 403) during any such period. 

(C) VETERAN AND ACTIVE DUTY EXCEPTION.—An alien 

who is lawfully residing in any State and is— 

(i) a veteran (as defined in section 101, 1101, or 

1301, or as described in section 107 of title 38, United 

States Code) with a discharge characterized as an honorable discharge and not on account of alienage and 

who fulfills the minimum active-duty service requirements of section 5303A(d) of title 38, United States 

Code, 

(ii) on active duty (other than active duty for 

training) in the Armed Forces of the United States, or 

(iii) the spouse or unmarried dependent child of an 

individual described in clause (i) or (ii) or the 

unremarried surviving spouse of an individual described in clause (i) or (ii) who is deceased if the marVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00408 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
403 

riage fulfills the requirements of section 1304 of title 

38, United States Code. 

(D) TRANSITION FOR THOSE CURRENTLY RECEIVING BENE- FITS.—An alien who on the date of the enactment of this 

Act is lawfully residing in any State and is receiving benefits under such program on the date of the enactment of 

this Act shall continue to be eligible to receive such benefits until January 1, 1997. 

(E) MEDICAID EXCEPTION FOR CERTAIN INDIANS.—With 

respect to eligibility for benefits for the program defined in 

paragraph (3)(C) (relating to the medicaid program), section 401(a) and paragraph (1) shall not apply to any individual described in subsection (a)(2)(G). 

(F) MEDICAID EXCEPTION FOR ALIENS RECEIVING SSI.—An 

alien who is receiving benefits under the program defined 

in subsection (a)(3)(A) (relating to the supplemental security income program) shall be eligible for medical assistance under a State plan under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) under the same terms and 

conditions that apply to other recipients of benefits under 

the program defined in such subsection. 

(3) DESIGNATED FEDERAL PROGRAM DEFINED.—For purposes 

of this title, the term ‘‘designated Federal program’’ means any 

of the following: 

(A) TEMPORARY ASSISTANCE FOR NEEDY FAMILIES.—The 

program of block grants to States for temporary assistance 

for needy families under part A of title IV of the Social Security Act. 

ø(B) SOCIAL SERVICES BLOCK GRANT.—The program of 

block grants to States for social services under title XX of 

the Social Security Act.¿ 

ø(C)¿ (B) MEDICAID.—A State plan approved under title 

XIX of the Social Security Act, other than medical assistance described in section 401(b)(1)(A). 

* * * * * * * 

SECTION 245A OF THE IMMIGRATION AND NATIONALITY 

ACT 

ADJUSTMENT OF STATUS OF CERTAIN ENTRANTS BEFORE JANUARY 1, 

1982, TO THAT OF PERSON ADMITTED FOR LAWFUL RESIDENCE

SEC. 245A. (a) TEMPORARY RESIDENT STATUS.—The Attorney 

General shall adjust the status of an alien to that of an alien lawfully admitted for temporary residence if the alien meets the following requirements: 

(1) TIMELY APPLICATION.— 

(A) DURING APPLICATION PERIOD.—Except as provided in 

subparagraph (B), the alien must apply for such adjustment during the 12-month period beginning on a date (not 

later than 180 days after the date of enactment of this section) designated by the Attorney General. 

(B) APPLICATION WITHIN 30 DAYS OF SHOW-CAUSE

ORDER.—An alien who, at any time during the first 11 


emcdonald on DSK67QTVN1PROD with HEARING
404 

months of the 12-month period described in subparagraph 

(A), is the subject of an order to show cause issued under 

section 242 (as in effect before October 1, 1996), must 

make application under this section not later than the end 

of the 30-day period beginning either on the first day of 

such 12-month period or on the date of the issuance of 

such order, whichever day is later. 

(C) INFORMATION INCLUDED IN APPLICATION.—Each application under this subsection shall contain such information as the Attorney General may require, including information on living relatives of the applicant with respect to 

whom a petition for preference or other status may be filed 

by the applicant at any later date under section 204(a). 

(2) CONTINUOUS UNLAWFUL RESIDENCE SINCE 1982.— 

(A) IN GENERAL.—The alien must establish that he entered the United States before January 1, 1982, and that 

he has resided continuously in the United States in an unlawful status since such date and through the date the application is filed under this subsection. 

(B) NONIMMIGRANTS.—In the case of an alien who entered the United States as a nonimmigrant before January 

1, 1982, the alien must establish that the alien’s period of 

authorized stay as a nonimmigrant expired before such 

date through the passage of time or the alien’s unlawful 

status was known to the Government as of such date. 

(C) EXCHANGE VISITORS.—If the alien was at any time a 

nonimmigrant exchange alien (as defined in section 

101(a)(15)(J)), the alien must establish that the alien was 

not subject to the two-year foreign residence requirement 

of section 212(e) or has fulfilled that requirement or received a waiver thereof. 

(3) CONTINUOUS PHYSICAL PRESENCE SINCE ENACTMENT.— 

(A) IN GENERAL.—The alien must establish that the 

alien has been continuously physically present in the 

United States since the date of the enactment of this section. 

(B) TREATMENT OF BRIEF, CASUAL, AND INNOCENT ABSENCES.—An alien shall not be considered to have failed to 

maintained continuous physical presence in the United 

States for purposes of subparagraph (A) by virtue of brief, 

casual, and innocent absences from the United States. 

(C) ADMISSIONS.—Nothing in this section shall be construed as authorizing an alien to apply for admission to, 

or to be admitted to, the United States in order to apply 

for adjustment of status under this subsection. 

(4) ADMISSIBLE AS IMMIGRANT.—The alien must establish 

that he— 

(A) is admissible to the United States as an immigrant, 

except as otherwise provided under subsection (d)(2), 

(B) has not been convicted of any felony or of three or 

more misdemeanors committed in the United States, 

(C) has not assisted in the persecution of any person or 

persons on account of race, religion, nationality, membership in a particular social group, or political opinion, and 


emcdonald on DSK67QTVN1PROD with HEARING
405 

(D) is registered or registering under the Military Selective Service Act, if the alien is required to be so registered 

under that Act. 

For purposes of this subsection, an alien in the status of a 

Cuban and Haitian entrant described in paragraph (1) or (2)(A) 

of section 501(e) of Public Law 96–422 shall be considered to 

have entered the United States and to be in an unlawful status 

in the United States. 

(b) SUBSEQUENT ADJUSTMENT TO PERMANENT RESIDENCE AND

NATURE OF TEMPORARY RESIDENT STATUS.— (1) ADJUSTMENT TO PERMANENT RESIDENCE.—The Attorney 

General shall adjust the status of any alien provided lawful 

temporary resident status under subsection (a) to that of an 

alien lawfully admitted for permanent residence if the alien 

meets the following requirements: 

(A) TIMELY APPLICATION AFTER ONE YEAR’S RESIDENCE.— 

The alien must apply for such adjustment during the 2- 

year period beginning with the nineteenth month that begins after the date the alien was granted such temporary 

resident status. 

(B) CONTINUOUS RESIDENCE.— (i) IN GENERAL.—The alien must establish that he 

has continuously resided in the United States since 

the date the alien was granted such temporary resident status. 

(ii) TREATMENT OF CERTAIN ABSENCES.—An alien 

shall not be considered to have lost the continuous residence referred to in clause (i) by reason of an absence 

from the United States permitted under paragraph 

(3)(A). 

(C) ADMISSIBLE AS IMMIGRANT.—The alien must establish that he— 

(i) is admissible to the United States as an immigrant, except as otherwise provided under subsection 

(d)(2), and 

(ii) has not been convicted of any felony or three or 

more misdemeanors committed in the United States. 

(D) BASIC CITIZENSHIP SKILLS.— (i) IN GENERAL.—The alien must demonstrate that 

he either— 

(I) meets the requirements of section 312(a) (relating to minimal understanding of ordinary 

English and a knowledge and understanding of 

the history and government of the United States), 

or 

(II) is satisfactorily pursuing a course of study 

(recognized by the Attorney General) to achieve 

such an understanding of English and such a 

knowledge and understanding of the history and 

government of the United States. 

(ii) EXCEPTION FOR ELDERLY OR DEVELOPMENTALLY

DISABLED INDIVIDUALS.—The Attorney General may, in 

his discretion, waive all or part of the requirements of 

clause (i) in the case of an alien who is 65 years of age 

or older or who is developmentally disabled. 


emcdonald on DSK67QTVN1PROD with HEARING
406 

(iii) RELATION TO NATURALIZATION EXAMINATION.—In 

accordance with regulations of the Attorney General, 

an alien who has demonstrated under clause (i)(I) that 

the alien meets the requirements of section 312(a) 

may be considered to have satisfied the requirements 

of that section for purposes of becoming naturalized as 

a citizen of the United States under title III. 

(2) TERMINATION OF TEMPORARY RESIDENCE.—The Attorney 

General shall provide for termination of temporary resident 

status granted an alien under subsection (a)— 

(A) if it appears to the Attorney General that the alien 

was in fact not eligible for such status; 

(B) if the alien commits an act that (i) makes the alien 

inadmissible to the United States as an immigrant, except 

as otherwise provided under subsection (d)(2), or (ii) is convicted of any felony or three or more misdemeanors committed in the United States; or 

(C) at the end of the 43rd month beginning after the 

date the alien is granted such status, unless the alien has 

filed an application for adjustment of such status pursuant 

to paragraph (1) and such application has not been denied. 

(3) AUTHORIZED TRAVEL AND EMPLOYMENT DURING TEM- PORARY RESIDENCE.—During the period an alien is in lawful 

temporary resident status granted under subsection (a)— 

(A) AUTHORIZATION OF TRAVEL ABROAD.—The Attorney 

General shall, in accordance with regulations, permit the 

alien to return to the United States after such brief and 

casual trips abroad as reflect an intention on the part of 

the alien to adjust to lawful permanent resident status 

under paragraph (1) and after brief temporary trips abroad 

occasioned by a family obligation involving an occurrence 

such as the illness or death of a close relative or other 

family need. 

(B) AUTHORIZATION OF EMPLOYMENT.—The Attorney 

General shall grant the alien authorization to engage in 

employment in the United States and provide to that alien 

an ‘‘employment authorized’’ endorsement or other appropriate work permit. 

(c) APPLICATIONS FOR ADJUSTMENT OF STATUS.— (1) TO WHOM MAY BE MADE.—The Attorney General shall 

provide that applications for adjustment of status under subsection (a) may be filed— 

(A) with the Attorney General, or 

(B) with a qualified designated entity, but only if the applicant consents to the forwarding of the application to the 

Attorney General. 

As used in this section, the term ‘‘qualified designated entity’’ 

means an organization or person designated under paragraph 

(2). 

(2) DESIGNATION OF QUALIFIED ENTITIES TO RECEIVE APPLICA- TIONS.—For purposes of assisting in the program of legalization provided under this section, the Attorney General— 

(A) shall designate qualified voluntary organizations and 

other qualified State, local, and community organizations, 

and 


emcdonald on DSK67QTVN1PROD with HEARING
407 

(B) may designate such other persons as the Attorney 

General determines are qualified and have substantial experience, demonstrated competence, and traditional longterm involvement in the preparation and submittal of applications for adjustment of status under section 209 or 

245, Public Law 89–732, or Public Law 95–145. 

(3) TREATMENT OF APPLICATIONS BY DESIGNATED ENTITIES.— Each qualified designated entity must agree to forward to the 

Attorney General applications filed with it in accordance with 

paragraph (1)(B) but not to forward to the Attorney General 

applications filed with it unless the applicant has consented to 

such forwarding. No such entity may make a determination required by this section to be made by the Attorney General. 

(4) LIMITATION ON ACCESS TO INFORMATION.—Files and 

records of qualified designated entities relating to an alien’s 

seeking assistance or information with respect to filing an application under this section are confidential and the Attorney 

General and the Service shall not have access to such files or 

records relating to an alien without the consent of the alien. 

(5) CONFIDENTIALITY OF INFORMATION.— 

(A) IN GENERAL.—Except as provided in this paragraph, 

neither the Attorney General, nor any other official or employee of the Department of Justice, or bureau or agency 

thereof, may— 

(i) use the information furnished by the applicant 

pursuant to an application filed under this section for 

any purpose other than to make a determination on 

the application, for enforcement of paragraph (6), or 

for the preparation of reports to Congress under section 404 of the Immigration Reform and Control Act of 

1986; 

(ii) make any publication whereby the information 

furnished by any particular applicant can be identified; or 

(iii) permit anyone other than the sworn officers and 

employees of the Department or bureau or agency or, 

with respect to applications filed with a designated entity, that designated entity, to examine individual applications. 

(B) REQUIRED DISCLOSURES.—The Attorney General 

shall provide the information furnished under this section, 

and any other information derived from such furnished information, to a duly recognized law enforcement entity in 

connection with a criminal investigation or prosecution, 

when such information is requested in writing by such entity, or to an official coroner for purposes of affirmatively 

identifying a deceased individual (whether or not such individual is deceased as a result of a crime). 

(C) AUTHORIZED DISCLOSURES.—The Attorney General 

may provide, in the Attorney General’s discretion, for the 

furnishing of information furnished under this section in 

the same manner and circumstances as census information 

may be disclosed by the Secretary of Commerce under section 8 of title 13, United States Code. 

(D) CONSTRUCTION.— 


emcdonald on DSK67QTVN1PROD with HEARING
408 

(i) IN GENERAL.—Nothing in this paragraph shall be 

construed to limit the use, or release, for immigration 

enforcement purposes or law enforcement purposes of 

information contained in files or records of the Service 

pertaining to an application filed under this section, 

other than information furnished by an applicant pursuant to the application, or any other information derived from the application, that is not available from 

any other source. 

(ii) CRIMINAL CONVICTIONS.—Information concerning 

whether the applicant has at any time been convicted 

of a crime may be used or released for immigration enforcement or law enforcement purposes. 

(E) CRIME.—Whoever knowingly uses, publishes, or permits information to be examined in violation of this paragraph shall be fined not more than $10,000. 

(6) PENALTIES FOR FALSE STATEMENTS IN APPLICATIONS.— 

Whoever files an application for adjustment of status under 

this section and knowingly and willfully falsifies, misrepresents, conceals, or covers up a material fact or makes any false, 

fictitious, or fraudulent statements or representations, or 

makes or uses any false writing or document knowing the 

same to contain any false, fictitious, or fraudulent statement or 

entry, shall be fined in accordance with title 18, United States 

Code, or imprisoned not more than five years, or both. 

(7) APPLICATION FEES.— 

(A) FEE SCHEDULE.—The Attorney General shall provide 

for a schedule of fees to be charged for the filing of applications for adjustment under subsection (a) or (b)(1). The Attorney General shall provide for an additional fee for filing 

an application for adjustment under subsection (b)(1) after 

the end of the first year of the 2-year period described in 

subsection (b)(1)(A). 

(B) USE OF FEES.—The Attorney General shall deposit 

payments received under this paragraph in a separate account and amounts in such account shall be available, 

without fiscal year limitation, to cover administrative and 

other expenses incurred in connection with the review of 

applications filed under this section. 

(C) IMMIGRATION-RELATED UNFAIR EMPLOYMENT PRACTICES.—Not to exceed $3,000,000 of the unobligated balances remaining in the account established in subparagraph (B) shall be available in fiscal year 1992 and each 

fiscal year thereafter for grants, contracts, and cooperative 

agreements to community-based organizations for outreach 

programs, to be administered by the Office of Special 

Counsel for Immigration-Related Unfair Employment 

Practices: Provided, That such amounts shall be in addition to any funds appropriated to the Office of Special 

Counsel for such purposes: Provided further, That none of 

the funds made available by this section shall be used by 

the Office of Special Counsel to establish regional offices. 

(d) WAIVER OF NUMERICAL LIMITATIONS AND CERTAIN GROUNDS

FOR EXCLUSION.— 


emcdonald on DSK67QTVN1PROD with HEARING
409 

NUMERICAL LIMITATIONS DO NOT APPLY.—The numerical limitations of sections 201 and 202 shall not apply to the adjustment of aliens to lawful permanent resident status under this 

section. 

(2) WAIVER OF GROUNDS FOR EXCLUSION.—In the determination of an alien’s admissibility under subsections (a)(4)(A), 

(b)(1)(C)(i), and (b)(2)(B)— 

(A) GROUNDS OF EXCLUSION NOT APPLICABLE.—The provisions of paragraphs (5) and (7)(A) of section 212(a) shall 

not apply. 

(B) WAIVER OF OTHER GROUNDS.— (i) IN GENERAL.—Except as provided in clause (ii), 

the Attorney General may waive any other provision 

of section 212(a) in the case of individual aliens for humanitarian purposes, to assure family unity, or when 

it is otherwise in the public interest. 

(ii) GROUNDS THAT MAY NOT BE WAIVED.—The following provisions of section 212(a) may not be waived 

by the Attorney General under clause (i): 

(I) Paragraphs (2)(A) and (2)(B) (relating to 

criminals). 

(II) Paragraph (2)(C) (relating to drug offenses), 

except for so much of such paragraph as relates to 

a single offense of simple possession of 30 grams 

or less of marihuana. 

(III) Paragraph (3) (relating to security and related grounds). 

(IV) Paragraph (4) (relating to aliens likely to 

become public charges) insofar as it relates to an 

application for adjustment to permanent residence. 

Subclause (IV) (prohibiting the waiver of section 

212(a)(4)) shall not apply to an alien who is or was an 

aged, blind, or disabled individual (as defined in section 1614(a)(1) of the Social Security Act). 

(iii) SPECIAL RULE FOR DETERMINATION OF PUBLIC

CHARGE.—An alien is not ineligible for adjustment of 

status under this section due to being inadmissible 

under section 212(a)(4) if the alien demonstrates a history of employment in the United States evidencing 

self-support without receipt of public cash assistance. 

(C) MEDICAL EXAMINATION.—The alien shall be required, 

at the alien’s expense, to undergo such a medical examination (including a determination of immunization status) as 

is appropriate and conforms to generally accepted professional standards of medical practice. 

(e) TEMPORARY STAY OF DEPORTATION AND WORK AUTHORIZATION

FOR CERTAIN APPLICANTS.— 

(1) BEFORE APPLICATION PERIOD.—The Attorney General 

shall provide that in the case of an alien who is apprehended 

before the beginning of the application period described in subsection (a)(1)(A) and who can establish a prima facie case of 

eligibility to have his status adjusted under subsection (a) (but 

for the fact that he may not apply for such adjustment until 

the beginning of such period), until the alien has had the opVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00415 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
410 

portunity during the first 30 days of the application period to 

complete the filing of an application for adjustment, the alien— 

(A) may not be deported, and 

(B) shall be granted authorization to engage in employment in the United States and be provided an ‘‘employment authorized’’ endorsement or other appropriate work 

permit. 

(2) DURING APPLICATION PERIOD.—The Attorney General 

shall provide that in the case of an alien who presents a prima 

facie application for adjustment of status under subsection (a) 

during the application period, and until a final determination 

on the application has been made in accordance with this section, the alien— 

(A) may not be deported, and 

(B) shall be granted authorization to engage in employment in the United States and be provided an ‘‘employment authorized’’ endorsement or other appropriate work 

permit. 

(f) ADMINISTRATIVE AND JUDICIAL REVIEW.— 

(1) ADMINISTRATIVE AND JUDICIAL REVIEW.—There shall be 

no administrative or judicial review of a determination respecting an application for adjustment of status under this section 

except in accordance with this subsection. 

(2) NO REVIEW FOR LATE FILINGS.—No denial of adjustment 

of status under this section based on a late filing of an application for such adjustment may be reviewed by a court of the 

United States or of any State or reviewed in any administrative proceeding of the United States Government. 

(3) ADMINISTRATIVE REVIEW.— 

(A) SINGLE LEVEL OF ADMINISTRATIVE APPELLATE RE- VIEW.—The Attorney General shall establish an appellate 

authority to provide for a single level of administrative appellate review of a determination described in paragraph 

(1). 

(B) STANDARD FOR REVIEW.—Such administrative appellate review shall be based solely upon the administrative 

record established at the time of the determination on the 

application and upon such additional or newly discovered 

evidence as may not have been available at the time of the 

determination. 

(4) JUDICIAL REVIEW.— 

(A) LIMITATION TO REVIEW OF DEPORTATION.—There 

shall be judicial review of such a denial only in the judicial 

review of an order of deportation under section 106 (as in 

effect before October 1, 1996). 

(B) STANDARD FOR JUDICIAL REVIEW.—Such judicial review shall be based solely upon the administrative record 

established at the time of the review by the appellate authority and the findings of fact and determinations contained in such record shall be conclusive unless the applicant can establish abuse of discretion or that the findings 

are directly contrary to clear and convincing facts contained in the record considered as a whole. 

(C) JURISDICTION OF COURTS.—Notwithstanding any 

other provision of law, no court shall have jurisdiction of 


emcdonald on DSK67QTVN1PROD with HEARING
411 

any cause of action or claim by or on behalf of any person 

asserting an interest under this section unless such person 

in fact filed an application under this section within the 

period specified by subsection (a)(1), or attempted to file a 

complete application and application fee with an authorized legalization officer of the Service but had the application and fee refused by that officer. 

(g) IMPLEMENTATION OF SECTION.— 

(1) REGULATIONS.—The Attorney General, after consultation 

with the Committees on the Judiciary of the House of Representatives and of the Senate, shall prescribe— 

(A) regulations establishing a definition of the term ‘‘resided continuously’’, as used in this section, and the evidence needed to establish that an alien has resided continuously in the United States for purposes of this section, 

and 

(B) such other regulations as may be necessary to carry 

out this section. 

(2) CONSIDERATIONS.—In prescribing regulations described in 

paragraph (1)(A)— 

(A) PERIODS OF CONTINUOUS RESIDENCE.—The Attorney 

General shall specify individual periods, and aggregate periods, of absence from the United States which will be considered to break a period of continuous residence in the 

United States and shall take into account absences due 

merely to brief and casual trips abroad. 

(B) ABSENCES CAUSED BY DEPORTATION OR ADVANCED PAROLE.—The Attorney General shall provide that— 

(i) an alien shall not be considered to have resided 

continuously in the United States, if, during any period for which continuous residence is required, the 

alien was outside the United States as a result of a departure under an order of deportation, and 

(ii) any period of time during which an alien is outside the United States pursuant to the advance parole 

procedures of the Service shall not be considered as 

part of the period of time during which an alien is outside the United States for purposes of this section. 

(C) WAIVERS OF CERTAIN ABSENCES.—The Attorney General may provide for a waiver, in the discretion of the Attorney General, of the periods specified under subparagraph (A) in the case of an absence from the United States 

due merely to a brief temporary trip abroad required by 

emergency or extenuating circumstances outside the control of the alien. 

(D) USE OF CERTAIN DOCUMENTATION.—The Attorney 

General shall require that— 

(i) continuous residence and physical presence in the 

United States must be established through documents, 

together with independent corroboration of the information contained in such documents, and 

(ii) the documents provided under clause (i) be employment-related if employment-related documents 

with respect to the alien are available to the applicant. 


emcdonald on DSK67QTVN1PROD with HEARING
412 

(3) INTERIM FINAL REGULATIONS.—Regulations prescribed 

under this section may be prescribed to take effect on an interim final basis if the Attorney General determines that this 

is necessary in order to implement this section in a timely 

manner. 

(h) TEMPORARY DISQUALIFICATION OF NEWLY LEGALIZED ALIENS

FROM RECEIVING CERTAIN PUBLIC WELFARE ASSISTANCE.— 

(1) IN GENERAL.—During the five-year period beginning on 

the date an alien was granted lawful temporary resident status 

under subsection (a), and notwithstanding any other provision 

of law— 

(A) except as provided in paragraphs (2) and (3), the 

alien is not eligible for— 

(i) any program of financial assistance furnished 

under Federal law (whether through grant, loan, guarantee, or otherwise) on the basis of financial need, as 

such programs are identified by the Attorney General 

in consultation with other appropriate heads of the 

various departments and agencies of Government (but 

in any event including the State program of assistance 

under part A of title IV of the Social Security Act), 

(ii) medical assistance under a State plan approved 

under title XIX of the Social Security Act, and 

(iii) assistance under the Food and Nutrition Act of 

2008; and 

(B) a State or political subdivision therein may, to the 

extent consistent with subparagraph (A) and paragraphs 

(2) and (3), provide that the alien is not eligible for the 

programs of financial assistance or for medical assistance 

described in subparagraph (A)(ii) furnished under the law 

of that State or political subdivision. 

Unless otherwise specifically provided by this section or other 

law, an alien in temporary lawful residence status granted 

under subsection (a) shall not be considered (for purposes of 

any law of a State or political subdivision providing for a program of financial assistance) to be permanently residing in the 

United States under color of law. 

(2) EXCEPTIONS.—Paragraph (1) shall not apply— 

(A) to a Cuban and Haitian entrant (as defined in paragraph (1) or (2)(A) of section 501(e) of Public Law 96–422, 

as in effect on April 1, 1983), or 

(B) in the case of assistance (other than assistance under 

a State program funded under part A of title IV of the Social Security Act) which is furnished to an alien who is an 

aged, blind, or disabled individual (as defined in section 

1614(a)(1) of the Social Security Act). 

(3) RESTRICTED MEDICAID BENEFITS.— 

(A) CLARIFICATION OF ENTITLEMENT.—Subject to the restrictions under subparagraph (B), for the purpose of providing aliens with eligibility to receive medical assistance— 

(i) paragraph (1) shall not apply, 

(ii) aliens who would be eligible for medical assistance but for the provisions of paragraph (1) shall be 


emcdonald on DSK67QTVN1PROD with HEARING
413 

deemed, for purposes of title XIX of the Social Security 

Act, to be so eligible, and 

(iii) aliens lawfully admitted for temporary residence 

under this section, such status not having changed, 

shall be considered to be permanently residing in the 

United States under color of law. 

(B) RESTRICTION OF BENEFITS.— (i) LIMITATION TO EMERGENCY SERVICES AND SERV- ICES FOR PREGNANT WOMEN.—Notwithstanding any 

provision of title XIX of the Social Security Act (including subparagraphs (B) and (C) of section 

1902(a)(10) of such Act), aliens who, but for subparagraph (A), would be ineligible for medical assistance 

under paragraph (1), are only eligible for such assistance with respect to— 

(I) emergency services (as defined for purposes 

of section 1916(a)(2)(D) of the Social Security Act), 

and 

(II) services described in section 1916(a)(2)(B) of 

such Act (relating to service for pregnant women). 

(ii) NO RESTRICTION FOR EXEMPT ALIENS AND CHIL- DREN.—The restrictions of clause (i) shall not apply to 

aliens who are described in paragraph (2) or who are 

under 18 years of age. 

(C) DEFINITION OF MEDICAL ASSISTANCE.—In this paragraph, the term ‘‘medical assistance’’ refers to medical assistance under a State plan approved under title XIX of 

the Social Security Act. 

(4) TREATMENT OF CERTAIN PROGRAMS.—Assistance furnished 

under any of the following provisions of law shall not be construed to be financial assistance described in paragraph 

(1)(A)(i): 

(A) The Richard B. Russell National School Lunch Act. 

(B) The Child Nutrition Act of 1966. 

(C) The The Carl D. Perkins Career and Technical Education Act of 2006. 

(D) Title I of the Elementary and Secondary Education 

Act of 1965. 

(E) The Headstart-Follow Through Act. 

(F) Title I of the Workforce Innovation and Opportunity 

Act. 

(G) Title IV of the Higher Education Act of 1965. 

(H) The Public Health Service Act. 

(I) Titles Vø, XVI, and XX¿ and XVI, and parts B, D, 

and E of title IV, of the Social Security Act (and titles I, 

X, XIV, and XVI of such Act as in effect without regard to 

the amendment made by section 301 of the Social Security 

Amendments of 1972). 

(5) ADJUSTMENT NOT AFFECTING FASCELL-STONE BENEFITS.— For the purpose of section 501 of the Refugee Education Assistance Act of 1980 (Public Law 96–122), assistance shall be continued under such section with respect to an alien without regard to the alien’s adjustment of status under this section. 

(i) DISSEMINATION OF INFORMATION ON LEGALIZATION PROGRAM.—Beginning not later than the date designated by the AttorVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00419 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
414 

ney General under subsection (a)(1)(A), the Attorney General, in cooperation with qualified designated entities, shall broadly disseminate information respecting the benefits which aliens may receive 

under this section and the requirements to obtain such benefits. 

RICHARD B. RUSSELL NATIONAL SCHOOL LUNCH ACT 

* * * * * * * 

SEC. 17. CHILD AND ADULT CARE FOOD PROGRAM. 

(a) PROGRAM PURPOSE, GRANT AUTHORITY AND INSTITUTION ELIGIBILITY.— 

(1) IN GENERAL.— 

(A) PROGRAM PURPOSE.— 

(i) FINDINGS.—Congress finds that— 

(I) eating habits and other wellness-related behavior habits are established early in life; and 

(II) good nutrition and wellness are important 

contributors to the overall health of young children and essential to cognitive development. 

(ii) PURPOSE.—The purpose of the program authorized by this section is to provide aid to child and adult 

care institutions and family or group day care homes 

for the provision of nutritious foods that contribute to 

the wellness, healthy growth, and development of 

young children, and the health and wellness of older 

adults and chronically impaired disabled persons. 

(B) GRANT AUTHORITY.—The Secretary may carry out a 

program to assist States through grants-in-aid and other 

means to initiate and maintain nonprofit food service programs for children in institutions providing child care. 

(2) DEFINITION OF INSTITUTION.—In this section, the term 

‘‘institution’’ means— 

(A) any public or private nonprofit organization providing nonresidential child care or day care outside school 

hours for school children, including any child care center, 

settlement house, recreational center, Head Start center, 

and institution providing child care facilities for children 

with disabilities; 

(B) any other private organization providing nonresidential child care or day care outside school hours for school 

children, ifø—¿ 

ø(i)¿ at least 25 percent of the children served by 

the organization meet the income eligibility criteria established under section 9(b) for free or reduced price 

meals; øor¿ 

ø(ii) the organization receives compensation from 

amounts granted to the States under title XX of the 

Social Security Act (42 U.S.C. 1397 et seq.) (but only 

if the organization receives compensation under that 

title for at least 25 percent of its enrolled children or 

25 percent of its licensed capacity, whichever is less);¿ 

(C) any public or private nonprofit organization acting as 

a sponsoring organization for one or more of the organizaVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00420 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
415 

tions described in subparagraph (A) or (B) or for an adult 

day care center (as defined in subsection (o)(2)); 

(D) any other private organization acting as a sponsoring organization for, and that is part of the same legal 

entity as, one or more organizations that are— 

(i) described in subparagraph (B); or 

(ii) proprietary title XIX øor title XX¿ centers (as defined in subsection (o)(2)); 

(E) any public or private nonprofit organization acting as 

a sponsoring organization for one or more family or group 

day care homes; and 

(F) any emergency shelter (as defined in subsection (t)). 

(3) AGE LIMIT.—Except as provided in subsection (r), reimbursement may be provided under this section only for meals 

or supplements served to children not over 12 years of age (except that such age limitation shall not be applicable for children of migrant workers if 15 years of age or less or for children with disabilities). 

(4) ADDITIONAL GUIDELINES.—The Secretary may establish 

separate guidelines for institutions that provide care to school 

children outside of school hours. 

(5) LICENSING.—In order to be eligible, an institution (except 

a school or family or group day care home sponsoring organization) or family or group day care home shall— 

(A)(i) be licensed, or otherwise have approval, by the appropriate Federal, State, or local licensing authority; or 

(ii) be in compliance with appropriate procedures for renewing participation in the program, as prescribed by the 

Secretary, and not be the subject of information possessed 

by the State indicating that the license of the institution 

or home will not be renewed; 

(B) if Federal, State, or local licensing or approval is not 

available— 

(i) meet any alternate approval standards established by the appropriate State or local governmental 

agency; or 

(ii) meet any alternate approval standards established by the Secretary after consultation with the 

Secretary of Health and Human Services; or 

(C) if the institution provides care to school children outside of school hours and Federal, State, or local licensing 

or approval is not required for the institution, meet State 

or local health and safety standards. 

(6) ELIGIBILITY CRITERIA.—No institution shall be eligible to 

participate in the program unless it satisfies the following criteria: 

(A) accepts final administrative and financial responsibility for management of an effective food service; 

(B) has not been seriously deficient in its operation of 

the child and adult care food program, or any other program under this Act or the Child Nutrition Act of 1966, or 

has not been determined to be ineligible to participate in 

any other publicly funded program by reason of violation 

of the requirements of the program, for a period of time 

specified by the Secretary; 


emcdonald on DSK67QTVN1PROD with HEARING
416 

(C)(i) will provide adequate supervisory and operational 

personnel for overall monitoring and management of the 

child care food program; and 

(ii) in the case of a sponsoring organization, the organization shall employ an appropriate number of monitoring 

personnel based on the number and characteristics of child 

care centers and family or group day care homes sponsored 

by the organization, as approved by the State (in accordance with regulations promulgated by the Secretary), to 

ensure effective oversight of the operations of the child 

care centers and family or group day care homes; 

(D) in the case of a family or group day care home sponsoring organization that employs more than one employee, 

the organization does not base payments to an employee of 

the organization on the number of family or group day 

care homes recruited; 

(E) in the case of a sponsoring organization, the organization has in effect a policy that restricts other employment by employees that interferes with the responsibilities 

and duties of the employees of the organization with respect to the program; and 

(F) in the case of a sponsoring organization that applies 

for initial participation in the program on or after the date 

of the enactment of this subparagraph and that operates 

in a State that requires such institutions to be bonded 

under State law, regulation, or policy, the institution is 

bonded in accordance with such law, regulation, or policy. 

(b) For the fiscal year ending September 30, 1979, and for each 

subsequent fiscal year, the Secretary shall provide cash assistance 

to States for meals as provided in subsection (f) of this section, except that, in any fiscal year, the aggregate amount of assistance 

provided to a State by the Secretary under this section shall not 

exceed the sum of (1) the Federal funds provided by the State to 

participating institutions within the State for that fiscal year and 

(2) any funds used by the State under section 10 of the Child Nutrition Act of 1966. 

(c)(1) For purposes of this section, except as provided in subsection (f)(3), the national average payment rate for free lunches 

and suppers, the national average payment rate for reduced price 

lunches and suppers, and the national average payment rate for 

paid lunches and suppers shall be the same as the national average 

payment rates for free lunches, reduced price lunches, and paid 

lunches, respectively, under sections 4 and 11 of this Act as appropriate (as adjusted pursuant to section 11(a) of this Act). 

(2) For purposes of this section, except as provided in subsection 

(f)(3), the national average payment rate for free breakfasts, the 

national average payment rate for reduced price breakfasts, and 

the national average payment rate for paid breakfasts shall be the 

same as the national average payment rates for free breakfasts, reduced price breakfasts, and paid breakfasts, respectively, under 

section 4(b) of the Child Nutrition Act of 1966 (as adjusted pursuant to section 11(a) of this Act). 

(3) For purposes of this section, except as provided in subsection 

(f)(3), the national average payment rate for free supplements shall 

be 30 cents, the national average payment rate for reduced price 


emcdonald on DSK67QTVN1PROD with HEARING
417 

supplements shall be one-half the rate for free supplements, and 

the national average payment rate for paid supplements shall be 

2.75 cents (as adjusted pursuant to section 11(a) of this Act). 

(4) Determinations with regard to eligibility for free and reduced 

price meals and supplements shall be made in accordance with the 

income eligibility guidelines for free lunches and reduced price 

lunches, respectively, under section 9 of this Act. 

(5) A child shall be considered automatically eligible for benefits 

under this section without further application or eligibility determination, if the child is enrolled as a participant in a Head Start 

program authorized under the Head Start Act (42 U.S.C. 9831 et 

seq.), on the basis of a determination that the child meets the eligibility criteria prescribed under section 645(a)(1)(B) of the Head 

Start Act (42 U.S.C. 9840(a)(1)(B)). 

(6) A child who has not yet entered kindergarten shall be considered automatically eligible for benefits under this section without 

further application or eligibility determination if the child is enrolled as a participant in the Even Start program under part B of 

chapter 1 of title I of the Elementary and Secondary Education Act 

of 1965 (20 U.S.C. 2741 et seq.). 

(d) INSTITUTION APPROVAL AND APPLICATIONS.— 

(1) INSTITUTION APPROVAL.— 

(A) ADMINISTRATIVE CAPABILITY.—Subject to subparagraph (B) and except as provided in subparagraph (C), the 

State agency shall approve an institution that meets the 

requirements of this section for participation in the child 

and adult care food program if the State agency determines that the institution— 

(i) is financially viable; 

(ii) is administratively capable of operating the program (including whether the sponsoring organization 

has business experience and management plans appropriate to operate the program) described in the application of the institution; and 

(iii) has internal controls in effect to ensure program 

accountability. 

(B) APPROVAL OF PRIVATE INSTITUTIONS.— 

(i) IN GENERAL.—In addition to the requirements established by subparagraph (A) and subject to clause 

(ii), the State agency shall approve a private institution that meets the requirements of this section for 

participation in the child and adult care food program 

only if— 

(I) the State agency conducts a satisfactory visit 

to the institution before approving the participation of the institution in the program; and 

(II) the institution— 

(aa) has tax exempt status under the Internal Revenue Code of 1986; 

(bb) is operating a Federal program requiring nonprofit status to participate in the program; or 

(cc) is described in subsection (a)(2)(B). 


emcdonald on DSK67QTVN1PROD with HEARING
418 

(ii) EXCEPTION FOR FAMILY OR GROUP DAY CARE

HOMES.—Clause (i) shall not apply to a family or 

group day care home. 

(C) EXCEPTION FOR CERTAIN SPONSORING ORGANIZATIONS.— 

(i) IN GENERAL.—The State agency may approve an 

eligible institution acting as a sponsoring organization 

for one or more family or group day care homes or centers that, at the time of application, is not participating in the child and adult care food program only 

if the State agency determines that— 

(I) the institution meets the requirements established by subparagraphs (A) and (B); and 

(II) the participation of the institution will help 

to ensure the delivery of benefits to otherwise 

unserved family or group day care homes or centers or to unserved children in an area. 

(ii) CRITERIA FOR SELECTION.—The State agency 

shall establish criteria for approving an eligible institution acting as a sponsoring organization for one or 

more family or group day care homes or centers that, 

at the time of application, is not participating in the 

child and adult care food program for the purpose of 

determining if the participation of the institution will 

help ensure the delivery of benefits to otherwise 

unserved family or group day care homes or centers or 

to unserved children in an area. 

(D) NOTIFICATION TO APPLICANTS.—Not later than 30 

days after the date on which an applicant institution files 

a completed application with the State agency, the State 

agency shall notify the applicant institution whether the 

institution has been approved or disapproved to participate 

in the child and adult care food program. 

(E) PERMANENT OPERATING AGREEMENTS.— 

(i) IN GENERAL.—Subject to clauses (ii) and (iii), to 

participate in the child and adult care food program, 

an institution that meets the conditions of eligibility 

described in this subsection shall be required to enter 

into a permanent agreement with the applicable State 

agency. 

(ii) AMENDMENTS.—A permanent agreement described in clause (i) may be amended as necessary to 

ensure that the institution is in compliance with all 

requirements established in this section or by the Secretary. 

(iii) TERMINATION.—A permanent agreement described in clause (i)— 

(I) may be terminated for convenience by the institution or State agency that is a party to the 

permanent agreement; and 

(II) shall be terminated— 

(aa) for cause by the applicable State agency in accordance with paragraph (5); or 


emcdonald on DSK67QTVN1PROD with HEARING
419 

(bb) on termination of participation of the 

institution in the child and adult care food 

program. 

(2) PROGRAM APPLICATIONS.— (A) IN GENERAL.—The Secretary shall develop a policy 

under which each institution providing child care that participates in the program under this section shall— 

(i) submit to the State agency an initial application 

to participate in the program that meets all requirements established by the Secretary by regulation; 

(ii) annually confirm to the State agency that the institution, and any facilities of the institution in which 

the program is operated by a sponsoring organization, 

is in compliance with subsection (a)(5); and 

(iii) annually submit to the State agency any additional information necessary to confirm that the institution is in compliance with all other requirements to 

participate in the program, as established in this Act 

and by the Secretary by regulation. 

(B) REQUIRED REVIEWS OF SPONSORED FACILITIES.— 

(i) IN GENERAL.—The Secretary shall develop a policy under which each sponsoring organization participating in the program under this section shall conduct— 

(I) periodic unannounced site visits at not less 

than 3-year intervals to sponsored child and adult 

care centers and family or group day care homes 

to identify and prevent management deficiencies 

and fraud and abuse under the program; and 

(II) at least 1 scheduled site visit each year to 

sponsored child and adult care centers and family 

or group day care homes to identify and prevent 

management deficiencies and fraud and abuse 

under the program and to improve program operations. 

(ii) VARIED TIMING.—Sponsoring organizations shall 

vary the timing of unannounced reviews under clause 

(i)(I) in a manner that makes the reviews unpredictable to sponsored facilities. 

(C) REQUIRED REVIEWS OF INSTITUTIONS.—The Secretary 

shall develop a policy under which each State agency shall 

conduct— 

(i) at least 1 scheduled site visit at not less than 3- 

year intervals to each institution under the State 

agency participating in the program under this section— 

(I) to identify and prevent management deficiencies and fraud and abuse under the program; 

and 

(II) to improve program operations; and 

(ii) more frequent reviews of any institution that— 

(I) sponsors a significant share of the facilities 

participating in the program; 

(II) conducts activities other than the program 

authorized under this section; 


emcdonald on DSK67QTVN1PROD with HEARING
420 

(III) has serious management problems, as identified in a prior review, or is at risk of having serious management problems; or 

(IV) meets such other criteria as are defined by 

the Secretary. 

(D) DETECTION AND DETERRENCE OF ERRONEOUS PAY- MENTS AND FALSE CLAIMS.— (i) IN GENERAL.—The Secretary may develop a policy 

to detect and deter, and recover erroneous payments 

to, and false claims submitted by, institutions, sponsored child and adult care centers, and family or group 

day care homes participating in the program under 

this section. 

(ii) BLOCK CLAIMS.— 

(I) DEFINITION OF BLOCK CLAIM.—In this clause, 

the term ‘‘block claim’’ has the meaning given the 

term in section 226.2 of title 7, Code of Federal 

Regulations (or successor regulations). 

(II) PROGRAM EDIT CHECKS.—The Secretary may 

not require any State agency, sponsoring organization, or other institution to perform edit checks 

or on-site reviews relating to the detection of block 

claims by any child care facility. 

(III) ALLOWANCE.—Notwithstanding subclause 

(II), the Secretary may require any State agency, 

sponsoring organization, or other institution to 

collect, store, and transmit to the appropriate entity information necessary to develop any other 

policy developed under clause (i). 

(3) PROGRAM INFORMATION.— 

(A) IN GENERAL.—On enrollment of a child in a sponsored child care center or family or group day care home 

participating in the program, the center or home (or its 

sponsoring organization) shall provide to the child’s parents or guardians— 

(i) information that describes the program and its 

benefits; and 

(ii) the name and telephone number of the sponsoring organization of the center or home and the 

State agency involved in the operation of the program. 

(B) FORM.—The information described in subparagraph 

(A) shall be in a form and, to the maximum extent practicable, language easily understandable by the child’s parents or guardians. 

(4) ALLOWABLE ADMINISTRATIVE EXPENSES FOR SPONSORING

ORGANIZATIONS.—In consultation with State agencies and sponsoring organizations, the Secretary shall develop, and provide 

for the dissemination to State agencies and sponsoring organizations of, a list of allowable reimbursable administrative expenses for sponsoring organizations under the program. 

(5) TERMINATION OR SUSPENSION OF PARTICIPATING ORGANI- ZATIONS.— 

(A) IN GENERAL.—The Secretary shall establish procedures for the termination of participation by institutions 

and family or group day care homes under the program. 


emcdonald on DSK67QTVN1PROD with HEARING
421 

(B) STANDARDS.—Procedures established pursuant to 

subparagraph (A) shall include standards for terminating 

the participation of an institution or family or group day 

care home that— 

(i) engages in unlawful practices, falsifies information provided to the State agency, or conceals a criminal background; or 

(ii) substantially fails to fulfill the terms of its agreement with the State agency. 

(C) CORRECTIVE ACTION.—Procedures established pursuant to subparagraph (A)— 

(i) shall require an entity described in subparagraph 

(B) to undertake corrective action; and 

(ii) may require the immediate suspension of operation of the program by an entity described in subparagraph (B), without the opportunity for corrective 

action, if the State agency determines that there is imminent threat to the health or safety of a participant 

at the entity or the entity engages in any activity that 

poses a threat to public health or safety. 

(D) HEARING.— (i) IN GENERAL.—Except as provided in clause (ii), 

an institution or family or group day care home shall 

be provided a fair hearing in accordance with subsection (e)(1) prior to any determination to terminate 

participation by the institution or family or group day 

care home under the program. 

(ii) EXCEPTION FOR FALSE OR FRAUDULENT CLAIMS.— (I) IN GENERAL.—If a State agency determines 

that an institution has knowingly submitted a 

false or fraudulent claim for reimbursement, the 

State agency may suspend the participation of the 

institution in the program in accordance with this 

clause. 

(II) REQUIREMENT FOR REVIEW.—Prior to any 

determination to suspend participation of an institution under subclause (I), the State agency shall 

provide for an independent review of the proposed 

suspension in accordance with subclause (III). 

(III) REVIEW PROCEDURE.—The review shall— 

(aa) be conducted by an independent and 

impartial official other than, and not accountable to, any person involved in the determination to suspend the institution; 

(bb) provide the State agency and the institution the right to submit written documentation relating to the suspension, including 

State agency documentation of the alleged 

false or fraudulent claim for reimbursement 

and the response of the institution to the documentation; 

(cc) require the reviewing official to determine, based on the review, whether the State 

agency has established, based on a preponderance of the evidence, that the institution has 


emcdonald on DSK67QTVN1PROD with HEARING
422 

knowingly submitted a false or fraudulent 

claim for reimbursement; 

(dd) require the suspension to be in effect 

for not more than 120 calendar days after the 

institution has received notification of a determination of suspension in accordance with 

this clause; and 

(ee) require the State agency during the 

suspension to ensure that payments continue 

to be made to sponsored centers and family 

and group day care homes meeting the requirements of the program. 

(IV) HEARING.—A State agency shall provide an 

institution that has been suspended from participation in the program under this clause an opportunity for a fair hearing on the suspension conducted in accordance with subsection (e)(1). 

(E) LIST OF DISQUALIFIED INSTITUTIONS AND INDIVIDUALS.— 

(i) IN GENERAL.—The Secretary shall maintain a list 

of institutions, sponsored family or group day care 

homes, and individuals that have been terminated or 

otherwise disqualified from participation in the program. 

(ii) AVAILABILITY.—The Secretary shall make the list 

available to State agencies for use in approving or renewing applications by institutions, sponsored family 

or group day care homes, and individuals for participation in the program. 

(e) HEARINGS.— 

(1) IN GENERAL.—Except as provided in paragraph (4), each 

State agency shall provide, in accordance with regulations promulgated by the Secretary, an opportunity for a fair hearing 

and a prompt determination to any institution aggrieved by 

any action of the State agency that affects— 

(A) the participation of the institution in the program 

authorized by this section; or 

(B) the claim of the institution for reimbursement under 

this section. 

(2) REIMBURSEMENT.—In accordance with paragraph (3), a 

State agency that fails to meet timeframes for providing an opportunity for a fair hearing and a prompt determination to any 

institution under paragraph (1) in accordance with regulations 

promulgated by the Secretary, shall pay, from non-Federal 

sources, all valid claims for reimbursement to the institution 

and the facilities of the institution during the period beginning 

on the day after the end of any regulatory deadline for providing the opportunity and making the determination and ending on the date on which a hearing determination is made. 

(3) NOTICE TO STATE AGENCY.—The Secretary shall provide 

written notice to a State agency at least 30 days prior to imposing any liability for reimbursement under paragraph (2). 

(4) FEDERAL AUDIT DETERMINATION.—A State is not required 

to provide a hearing to an institution concerning a State action 

taken on the basis of a Federal audit determination. 


emcdonald on DSK67QTVN1PROD with HEARING
423 

(5) SECRETARIAL HEARING.—If a State does not provide a 

hearing to an institution concerning a State action taken on 

the basis of a Federal audit determination, the Secretary, on 

request, shall afford a hearing to the institution concerning the 

action. 

(f) STATE DISBURSEMENTS TO INSTITUTIONS.— 

(1) IN GENERAL.— 

(A) REQUIREMENT.—Funds paid to any State under this 

section shall be disbursed to eligible institutions by the 

State under agreements approved by the Secretary. Disbursements to any institution shall be made only for the 

purpose of assisting in providing meals to children attending institutions, or in family or group day care homes. Disbursement to any institution shall not be dependent upon 

the collection of moneys from participating children. All 

valid claims from such institutions shall be paid within 

forty-five days of receipt by the State. The State shall notify the institution within fifteen days of receipt of a claim 

if the claim as submitted is not valid because it is incomplete or incorrect. 

(B) FRAUD OR ABUSE.— 

(i) IN GENERAL.—The State may recover funds disbursed under subparagraph (A) to an institution if the 

State determines that the institution has engaged in 

fraud or abuse with respect to the program or has submitted an invalid claim for reimbursement. 

(ii) PAYMENT.—Amounts recovered under clause (i)— 

(I) may be paid by the institution to the State 

over a period of one or more years; and 

(II) shall not be paid from funds used to provide 

meals and supplements. 

(iii) HEARING.—An institution shall be provided a 

fair hearing in accordance with subsection (e)(1) prior 

to any determination to recover funds under this subparagraph. 

(2)(A) Subject to subparagraph (B) of this paragraph, the disbursement for any fiscal year to any State for disbursement to institutions, other than family or group day care home sponsoring organizations, for meals provided under this section shall be equal to 

the sum of the products obtained by multiplying the total number 

of each type of meal (breakfast, lunch, or supper, or supplement) 

served in such institution in that fiscal year by the applicable national average payment rate for each such type of meal, as determined under subsection (c). 

(B) No reimbursement may be made to any institution under this 

paragraph, or to family or group day care home sponsoring organizations under paragraph (3) of this subsection, for more than two 

meals and one supplement per day per child, or in the case of an 

institution (but not in the case of a family or group day care home 

sponsoring organization), 2 meals and 1 supplement per day per 

child, for children that are maintained in a child care setting for 

eight or more hours per day. 

(C) LIMITATION ON ADMINISTRATIVE EXPENSES FOR CERTAIN

SPONSORING ORGANIZATIONS.— 


emcdonald on DSK67QTVN1PROD with HEARING
424 

(i) IN GENERAL.—Except as provided in clause (ii), a 

sponsoring organization of a day care center may reserve 

not more than 15 percent of the funds provided under 

paragraph (1) for the administrative expenses of the organization. 

(ii) WAIVER.—A State may waive the requirement in 

clause (i) with respect to a sponsoring organization if the 

organization provides justification to the State that the organization requires funds in excess of 15 percent of the 

funds provided under paragraph (1) to pay the administrative expenses of the organization. 

(3) REIMBURSEMENT OF FAMILY OR GROUP DAY CARE HOME

SPONSORING ORGANIZATIONS.— 

(A) REIMBURSEMENT FACTOR.— 

(i) IN GENERAL.—An institution that participates in 

the program under this section as a family or group 

day care home sponsoring organization shall be provided, for payment to a home sponsored by the organization, reimbursement factors in accordance with this 

subparagraph for the cost of obtaining and preparing 

food and prescribed labor costs involved in providing 

meals under this section. 

(ii) TIER I FAMILY OR GROUP DAY CARE HOMES.— (I) DEFINITION OF TIER I FAMILY OR GROUP DAY

CARE HOME.—In this paragraph, the term ‘‘tier I 

family or group day care home’’ means— 

(aa) a family or group day care home that 

is located in a geographic area, as defined by 

the Secretary based on census data, in which 

at least 50 percent of the children residing in 

the area are members of households whose incomes meet the income eligibility guidelines 

for free or reduced price meals under section 

9; 

(bb) a family or group day care home that 

is located in an area served by a school enrolling students in which at least 50 percent of 

the total number of children enrolled are certified eligible to receive free or reduced price 

school meals under this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.); or 

(cc) a family or group day care home that is 

operated by a provider whose household 

meets the income eligibility guidelines for free 

or reduced price meals under section 9 and 

whose income is verified by the sponsoring organization of the home under regulations established by the Secretary. 

(II) REIMBURSEMENT.—Except as provided in 

subclause (III), a tier I family or group day care 

home shall be provided reimbursement factors 

under this clause without a requirement for documentation of the costs described in clause (i), except that reimbursement shall not be provided 

under this subclause for meals or supplements 


emcdonald on DSK67QTVN1PROD with HEARING
425 

served to the children of a person acting as a family or group day care home provider unless the 

children meet the income eligibility guidelines for 

free or reduced price meals under section 9. 

(III) FACTORS.—Except as provided in subclause 

(IV), the reimbursement factors applied to a home 

referred to in subclause (II) shall be the factors in 

effect on July 1, 1996. 

(IV) ADJUSTMENTS.—The reimbursement factors 

under this subparagraph shall be adjusted on July 

1, 1997, and each July 1 thereafter, to reflect 

changes in the Consumer Price Index for food at 

home for the most recent 12-month period for 

which the data are available. The reimbursement 

factors under this subparagraph shall be rounded 

to the nearest lower cent increment and based on 

the unrounded adjustment in effect on June 30 of 

the preceding school year. 

(iii) TIER II FAMILY OR GROUP DAY CARE HOMES.— 

(I) IN GENERAL.— 

(aa) FACTORS.—Except as provided in subclause (II), with respect to meals or supplements served under this clause by a family or 

group day care home that does not meet the 

criteria set forth in clause (ii)(I), the reimbursement factors shall be 95 cents for 

lunches and suppers, 27 cents for breakfasts, 

and 13 cents for supplements. 

(bb) ADJUSTMENTS.—The factors shall be 

adjusted on July 1, 1997, and each July 1 

thereafter, to reflect changes in the Consumer 

Price Index for food at home for the most recent 12-month period for which the data are 

available. The reimbursement factors under 

this item shall be rounded down to the nearest lower cent increment and based on the 

unrounded adjustment for the preceding 12- 

month period. 

(cc) REIMBURSEMENT.—A family or group 

day care home shall be provided reimbursement factors under this subclause without a 

requirement for documentation of the costs 

described in clause (i), except that reimbursement shall not be provided under this subclause for meals or supplements served to the 

children of a person acting as a family or 

group day care home provider unless the children meet the income eligibility guidelines for 

free or reduced price meals under section 9. 

(II) OTHER FACTORS.—A family or group day 

care home that does not meet the criteria set forth 

in clause (ii)(I) may elect to be provided reimbursement factors determined in accordance with 

the following requirements: 


emcdonald on DSK67QTVN1PROD with HEARING
426 

(aa) CHILDREN ELIGIBLE FOR FREE OR RE- DUCED PRICE MEALS.—In the case of meals or 

supplements served under this subsection to 

children who are members of households 

whose incomes meet the income eligibility 

guidelines for free or reduced price meals 

under section 9, the family or group day care 

home shall be provided reimbursement factors 

set by the Secretary in accordance with clause 

(ii)(III). 

(bb) INELIGIBLE CHILDREN.—In the case of 

meals or supplements served under this subsection to children who are members of households whose incomes do not meet the income 

eligibility guidelines, the family or group day 

care home shall be provided reimbursement 

factors in accordance with subclause (I). 

(III) INFORMATION AND DETERMINATIONS.— (aa) IN GENERAL.—If a family or group day 

care home elects to claim the factors described 

in subclause (II), the family or group day care 

home sponsoring organization serving the 

home shall collect the necessary income information, as determined by the Secretary, from 

any parent or other caretaker to make the determinations specified in subclause (II) and 

shall make the determinations in accordance 

with rules prescribed by the Secretary. 

(bb) CATEGORICAL ELIGIBILITY.—In making 

a determination under item (aa), a family or 

group day care home sponsoring organization 

may consider a child participating in or subsidized under, or a child with a parent participating in or subsidized under, a federally or 

State supported child care or other benefit 

program with an income eligibility limit that 

does not exceed the eligibility standard for 

free or reduced price meals under section 9 to 

be a child who is a member of a household 

whose income meets the income eligibility 

guidelines under section 9. 

(cc) FACTORS FOR CHILDREN ONLY.—A family or group day care home may elect to receive the reimbursement factors prescribed 

under clause (ii)(III) solely for the children 

participating in a program referred to in item 

(bb) if the home elects not to have income 

statements collected from parents or other 

caretakers. 

(dd) TRANSMISSION OF INCOME INFORMATION

BY SPONSORED FAMILY OR GROUP DAY CARE

HOMES.—If a family or group day care home 

elects to be provided reimbursement factors 

described in subclause (II), the family or 

group day care home may assist in the transVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00432 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
427 

mission of necessary household income information to the family or group day care home 

sponsoring organization in accordance with 

the policy described in item (ee). 

(ee) POLICY.—The Secretary shall develop a 

policy under which a sponsored family or 

group day care home described in item (dd) 

may, under terms and conditions specified by 

the Secretary and with the written consent of 

the parents or guardians of a child in a family 

or group day care home participating in the 

program, assist in the transmission of the income information of the family to the family 

or group day care home sponsoring organization. 

(IV) SIMPLIFIED MEAL COUNTING AND REPORTING

PROCEDURES.—The Secretary shall prescribe simplified meal counting and reporting procedures for 

use by a family or group day care home that elects 

to claim the factors under subclause (II) and by a 

family or group day care home sponsoring organization that sponsors the home. The procedures the 

Secretary prescribes may include 1 or more of the 

following: 

(aa) Setting an annual percentage for each 

home of the number of meals served that are 

to be reimbursed in accordance with the reimbursement factors prescribed under clause 

(ii)(III) and an annual percentage of the number of meals served that are to be reimbursed 

in accordance with the reimbursement factors 

prescribed under subclause (I), based on the 

family income of children enrolled in the 

home in a specified month or other period. 

(bb) Placing a home into 1 of 2 or more reimbursement categories annually based on 

the percentage of children in the home whose 

households have incomes that meet the income eligibility guidelines under section 9, 

with each such reimbursement category carrying a set of reimbursement factors such as 

the factors prescribed under clause (ii)(III) or 

subclause (I) or factors established within the 

range of factors prescribed under clause 

(ii)(III) and subclause (I). 

(cc) Such other simplified procedures as the 

Secretary may prescribe. 

(V) MINIMUM VERIFICATION REQUIREMENTS.— 

The Secretary may establish any minimum 

verification requirements that are necessary to 

carry out this clause. 

(B) ADMINISTRATIVE FUNDS.— (i) IN GENERAL.—In addition to reimbursement factors described in subparagraph (A), a family or group 

day care home sponsoring organization shall receive 


emcdonald on DSK67QTVN1PROD with HEARING
428 

reimbursement for the administrative expenses of the 

sponsoring organization in an amount that is not less 

than the product obtained each month by multiplying— 

(I) the number of family and group day care 

homes of the sponsoring organization submitting a 

claim for reimbursement during the month; by 

(II) the appropriate administrative rate determined by the Secretary. 

(ii) ANNUAL ADJUSTMENT.—The administrative reimbursement levels specified in clause (i) shall be adjusted July 1 of each year to reflect changes in the 

Consumer Price Index for All Urban Consumers published by the Bureau of Labor Statistics of the Department of Labor for the most recent 12-month period for 

which such data are available. 

(iii) CARRYOVER FUNDS.—The Secretary shall develop procedures under which not more than 10 percent of the amount made available to sponsoring organizations under this section for administrative expenses for a fiscal year may remain available for obligation or expenditure in the succeeding fiscal year. 

(C)(i) Reimbursement for administrative expenses shall also include start-up funds to finance the administrative expenses for 

such institutions to initiate successful operation under the program 

and expansion funds to finance the administrative expenses for 

such institutions to expand into low-income or rural areas. Institutions that have received start-up funds may also apply at a later 

date for expansion funds. Such start-up funds and expansion funds 

shall be in addition to other reimbursement to such institutions for 

administrative expenses. Start-up funds and expansion funds shall 

be payable to enable institutions satisfying the criteria of subsection (d) of this section, and any other standards prescribed by 

the Secretary, to develop an application for participation in the program as a family or group day care home sponsoring organization 

or to implement the program upon approval of the application. 

Such start-up funds and expansion funds shall be payable in accordance with the procedures prescribed by the Secretary. The 

amount of start-up funds and expansion funds payable to an institution shall be not less than the institution’s anticipated reimbursement for administrative expenses under the program for one 

month and not more than the institution’s anticipated reimbursement for administrative expenses under the program for two 

months. 

(ii) Funds for administrative expenses may be used by family or 

group day care home sponsoring organizations assist unlicensed 

family or group day care homes in becoming licensed. 

(D) LIMITATIONS ON ABILITY OF FAMILY OR GROUP DAY

CARE HOMES TO TRANSFER SPONSORING ORGANIZATIONS.— 

(i) IN GENERAL.—Subject to clause (ii), a State agency shall limit the ability of a family or group day care 

home to transfer from a sponsoring organization to another sponsoring organization more frequently than 

once a year. 


emcdonald on DSK67QTVN1PROD with HEARING
429 

(ii) GOOD CAUSE.—The State agency may permit or 

require a family or group day care home to transfer 

from a sponsoring organization to another sponsoring 

organization more frequently than once a year for good 

cause (as determined by the State agency), including 

circumstances in which the sponsoring organization of 

the family or group day care home ceases to participate in the child and adult care food program. 

(E) PROVISION OF DATA TO FAMILY OR GROUP DAY CARE

HOME SPONSORING ORGANIZATIONS.— (i) CENSUS DATA.—The Secretary shall provide to 

each State agency administering a child and adult 

care food program under this section data from the 

most recent decennial census survey or other appropriate census survey for which the data are available 

showing which areas in the State meet the requirements of subparagraph (A)(ii)(I)(aa). The State agency 

shall provide the data to family or group day care 

home sponsoring organizations located in the State. 

(ii) SCHOOL DATA.— 

(I) IN GENERAL.—A State agency administering 

the school lunch program under this Act or the 

school breakfast program under the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.) shall provide to approved family or group day care home 

sponsoring organizations a list of schools serving 

elementary school children in the State in which 

not less than 1⁄2 of the children enrolled are certified to receive free or reduced price meals. The 

State agency shall collect the data necessary to 

create the list annually and provide the list on a 

timely basis to any approved family or group day 

care home sponsoring organization that requests 

the list. 

(II) USE OF DATA FROM PRECEDING SCHOOL

YEAR.—In determining for a fiscal year or other 

annual period whether a home qualifies as a tier 

I family or group day care home under subparagraph (A)(ii)(I), the State agency administering 

the program under this section, and a family or 

group day care home sponsoring organization, 

shall use the most current available data at the 

time of the determination. 

(iii) DURATION OF DETERMINATION.—For purposes of 

this section, a determination that a family or group 

day care home is located in an area that qualifies the 

home as a tier I family or group day care home (as the 

term is defined in subparagraph (A)(ii)(I)), shall be in 

effect for 5 years (unless the determination is made on 

the basis of census data, in which case the determination shall remain in effect until more recent census 

data are available) unless the State agency determines 

that the area in which the home is located no longer 

qualifies the home as a tier I family or group day care 

home. 


emcdonald on DSK67QTVN1PROD with HEARING
430 

(4) By the first day of each month of operation, the State may 

provide advance payments for the month to each approved institution in an amount that reflects the full level of valid claims customarily received from such institution for one month’s operation. In 

the case of a newly participating institution, the amount of the advance shall reflect the State’s best estimate of the level of valid 

claims such institutions will submit. If the State has reason to believe that an institution will not be able to submit a valid claim 

covering the period for which such an advance has been made, the 

subsequent month’s advance payment shall be withheld until the 

State receives a valid claim. Payments advanced to institutions 

that are not subsequently deducted from a valid claim for reimbursement shall be repaid upon demand by the State. Any prior 

payment that is under dispute may be subtracted from an advance 

payment. 

(g) NUTRITIONAL REQUIREMENTS FOR MEALS AND SNACKS SERVED

IN INSTITUTIONS AND FAMILY OR GROUP DAY CARE HOMES.— 

(1) DEFINITION OF DIETARY GUIDELINES.—In this subsection, 

the term ‘‘Dietary Guidelines’’ means the Dietary Guidelines 

for Americans published under section 301 of the National Nutrition Monitoring and Related Research Act of 1990 (7 U.S.C. 

5341). 

(2) NUTRITIONAL REQUIREMENTS.— (A) IN GENERAL.—Except as provided in subparagraph 

(C), reimbursable meals and snacks served by institutions, 

family or group day care homes, and sponsored centers 

participating in the program under this section shall consist of a combination of foods that meet minimum nutritional requirements prescribed by the Secretary on the 

basis of tested nutritional research. 

(B) CONFORMITY WITH THE DIETARY GUIDELINES AND AUTHORITATIVE SCIENCE.— 

(i) IN GENERAL.—Not less frequently than once every 

10 years, the Secretary shall review and, as appropriate, update requirements for meals served under 

the program under this section to ensure that the 

meals— 

(I) are consistent with the goals of the most recent Dietary Guidelines; and 

(II) promote the health of the population served 

by the program authorized under this section, as 

indicated by the most recent relevant nutrition 

science and appropriate authoritative scientific 

agency and organization recommendations. 

(ii) COST REVIEW.—The review required under clause 

(i) shall include a review of the cost to child care centers and group or family day care homes resulting 

from updated requirements for meals and snacks 

served under the program under this section. 

(iii) REGULATIONS.—Not later than 18 months after 

the completion of the review of the meal pattern under 

clause (i), the Secretary shall promulgate proposed 

regulations to update the meal patterns for meals and 

snacks served under the program under this section. 

(C) EXCEPTIONS.— 


emcdonald on DSK67QTVN1PROD with HEARING
431 

(i) SPECIAL DIETARY NEEDS.—The minimum nutritional requirements prescribed under subparagraph 

(A) shall not prohibit institutions, family or group day 

care homes, and sponsored centers from substituting 

foods to accommodate the medical or other special dietary needs of individual participants. 

(ii) EXEMPT INSTITUTIONS.—The Secretary may elect 

to waive all or part of the requirements of this subsection for emergency shelters participating in the program under this section. 

(3) MEAL SERVICE.—Institutions, family or group day care 

homes, and sponsored centers shall ensure that reimbursable 

meal service contributes to the development and socialization 

of enrolled children by providing that food is not used as a 

punishment or reward. 

(4) FLUID MILK.— 

(A) IN GENERAL.—If an institution, family or group day 

care home, or sponsored center provides fluid milk as part 

of a reimbursable meal or supplement, the institution, 

family or group day care home, or sponsored center shall 

provide the milk in accordance with the most recent 

version of the Dietary Guidelines. 

(B) MILK SUBSTITUTES.—In the case of children who cannot consume fluid milk due to medical or other special dietary needs other than a disability, an institution, family or 

group day care home, or sponsored center may substitute 

for the fluid milk required in meals served, a nondairy 

beverage that— 

(i) is nutritionally equivalent to fluid milk; and 

(ii) meets nutritional standards established by the 

Secretary, including, among other requirements established by the Secretary, fortification of calcium, protein, vitamin A, and vitamin D to levels found in cow’s 

milk. 

(C) APPROVAL.— (i) IN GENERAL.—A substitution authorized under 

subparagraph (B) may be made— 

(I) at the discretion of and on approval by the 

participating day care institution; and 

(II) if the substitution is requested by written 

statement of a medical authority, or by the parent 

or legal guardian of the child, that identifies the 

medical or other special dietary need that restricts 

the diet of the child. 

(ii) EXCEPTION.—An institution, family or group day 

care home, or sponsored center that elects to make a 

substitution authorized under this paragraph shall not 

be required to provide beverages other than beverages 

the State has identified as acceptable substitutes. 

(D) EXCESS EXPENSES BORNE BY INSTITUTION.—A participating institution, family or group day care home, or sponsored center shall be responsible for any expenses that— 

(i) are incurred by the institution, family or group 

day care home, or sponsored center to provide substitutions under this paragraph; and 


emcdonald on DSK67QTVN1PROD with HEARING
432 

(ii) are in excess of expenses covered under reimbursements under this Act. 

(5) NONDISCRIMINATION POLICY.—No physical segregation or 

other discrimination against any person shall be made because 

of the inability of the person to pay, nor shall there be any 

overt identification of any such person by special tokens or 

tickets, different meals or meal service, announced or published lists of names, or other means. 

(6) USE OF ABUNDANT AND DONATED FOODS.—To the maximum extent practicable, each institution shall use in its food 

service foods that are— 

(A) designated from time to time by the Secretary as 

being in abundance, either nationally or in the food service 

area; or 

(B) donated by the Secretary. 

(h)(1)(A) The Secretary shall donate agricultural commodities 

produced in the United States for use in institutions participating 

in the child care food program under this section. 

(B) The value of the commodities donated under subparagraph 

(A) (or cash in lieu of commodities) to each State for each school 

year shall be, at a minimum, the amount obtained by multiplying 

the number of lunches and suppers served in participating institutions in that State during the preceding school year by the rate for 

commodities or cash in lieu of commodities established under section 6(c) for the school year concerned. 

(C) After the end of each school year, the Secretary shall— 

(i) reconcile the number of lunches and suppers served in 

participating institutions in each State during such school year 

with the number of lunches and suppers served by participating institutions in each State during the preceding school 

year; and 

(ii) based on such reconciliation, increase or reduce subsequent commodity assistance or cash in lieu of commodities provided to each State. 

(D) Any State receiving assistance under this section for institutions participating in the child care food program may, upon application to the Secretary, receive cash in lieu of some or all of the 

commodities to which it would otherwise be entitled under this 

subsection. In determining whether to request cash in lieu of commodities, the State shall base its decision on the preferences of individual participating institutions within the State, unless this 

proves impracticable due to the small number of institutions preferring donated commodities. 

(2) The Secretary is authorized to provide agricultural commodities obtained by the Secretary under the provisions of the Agricultural Act of 1949 (7 U.S.C. 1421 et seq.) and donated under the 

provisions of section 416 of such Act, to the Department of Defense 

for use by its institutions providing child care services, when such 

commodities are in excess of the quantities needed to meet the 

needs of all other child nutrition programs, domestic and foreign 

food assistance and export enhancement programs. The Secretary 

shall require reimbursement from the Department of Defense for 

the costs, or some portion thereof, of delivering such commodities 

to overseas locations, unless the Secretary determines that it is in 


emcdonald on DSK67QTVN1PROD with HEARING
433 

the best interest of the program that the Department of Agriculture shall assume such costs. 

(i) AUDITS.— (1) DISREGARDS.— (A) IN GENERAL.—Subject to subparagraph (B), in conducting management evaluations, reviews, or audits under 

this section, the Secretary or a State agency may disregard 

any overpayment to an institution for a fiscal year if the 

total overpayment to the institution for the fiscal year does 

not exceed an amount that is consistent with the disregards allowed in other programs under this Act and recognizes the cost of collecting small claims, as determined 

by the Secretary. 

(B) CRIMINAL OR FRAUD VIOLATIONS.—In carrying out 

this paragraph, the Secretary and a State agency shall not 

disregard any overpayment for which there is evidence of 

a violation of a criminal law or civil fraud law. 

(2) FUNDING.— (A) IN GENERAL.—The Secretary shall make available for 

each fiscal year to each State agency administering the 

child and adult care food program, for the purpose of conducting audits of participating institutions, an amount of 

up to 1.5 percent of the funds used by each State in the 

program under this section, during the second preceding 

fiscal year. 

(B) ADDITIONAL FUNDING.— (i) IN GENERAL.—Subject to clause (ii), for fiscal year 

2016 and each fiscal year thereafter, the Secretary 

may increase the amount of funds made available to 

any State agency under subparagraph (A), if the State 

agency demonstrates that the State agency can effectively use the funds to improve program management 

under criteria established by the Secretary. 

(ii) LIMITATION.—The total amount of funds made 

available to any State agency under this paragraph 

shall not exceed 2 percent of the funds used by each 

State agency in the program under this section, during 

the second preceding fiscal year. 

(j) AGREEMENTS.— (1) IN GENERAL.—The Secretary shall issue regulations directing States to develop and provide for the use of a standard 

form of agreement between each sponsoring organization and 

the family or group day care homes or sponsored day care centers participating in the program under such organization, for 

the purpose of specifying the rights and responsibilities of each 

party. 

(2) DURATION.—An agreement under paragraph (1) shall remain in effect until terminated by either party to the agreement. 

(k) TRAINING AND TECHNICAL ASSISTANCE.—A State participating 

in the program established under this section shall provide sufficient training, technical assistance, and monitoring to facilitate effective operation of the program. The Secretary shall assist the 

State in developing plans to fulfill the requirements of this subsection. 


emcdonald on DSK67QTVN1PROD with HEARING
434 

(l) Expenditures of funds from State and local sources for the 

maintenance of food programs for children shall not be diminished 

as a result of funds received under this section. 

(m) States and institutions participating in the program under 

this section shall keep such accounts and records as may be necessary to enable the Secretary to determine whether there has 

been compliance with the requirements of this section. Such accounts and records shall be available at any reasonable time for inspection and audit by representatives of the Secretary, the Comptroller General of the United States, and appropriate State representatives and shall be preserved for such period of time, not in 

excess of five years, as the Secretary determines necessary. 

(n) There are hereby authorized to be appropriated for each fiscal 

year such funds as are necessary to carry out the purposes of this 

section. 

(o)(1) For purposes of this section, adult day care centers shall 

be considered eligible institutions for reimbursement for meals or 

supplements served to persons 60 years of age or older or to chronically impaired disabled persons, including victims of Alzheimer’s 

disease and related disorders with neurological and organic brain 

dysfunction. Reimbursement provided to such institutions for such 

purposes shall improve the quality of meals or level of services provided or increase participation in the program. Lunches served by 

each such institution for which reimbursement is claimed under 

this section shall provide, on the average, approximately 1⁄3 of the 

daily recommended dietary allowance established by the Food and 

Nutrition Board of the National Research Council of the National 

Academy of Sciences. Such institutions shall make reasonable efforts to serve meals that meet the special dietary requirements of 

participants, including efforts to serve foods in forms palatable to 

participants. 

(2) For purposes of this subsection— 

(A) the term ‘‘adult day care center’’ means any public agency or private nonprofit organization, or any proprietary title 

XIX or title XX center, which— 

(i) is licensed or approved by Federal, State, or local authorities to provide adult day care services to chronically 

impaired disabled adults or persons 60 years of age or 

older in a group setting outside their homes, or a group 

living arrangement, on a less than 24-hour basis; and 

(ii) provides for such care and services directly or under 

arrangements made by the agency or organization whereby 

the agency or organization maintains professional management responsibility for all such services; and 

(B) the term ‘‘proprietary title XIX øor title XX¿ center’’ 

means any private, for-profit center providing adult day care 

services for which it receives compensation from amounts 

granted to the States under title XIX øor XX¿ of the Social Security Act and which title XIX øor title XX¿ beneficiaries were 

not less than 25 percent of enrolled eligible participants in a 

calendar month preceding initial application or annual reapplication for program participation. 

(3)(A) The Secretary, in consulation with the Assistant Secretary 

for Aging, shall establish, within 6 months of enactment, separate 

guidelines for reimbursement of institutions described in this subVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00440 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
435 

section. Such reimbursement shall take into account the nutritional 

requirements of eligible persons, as determined by the Secretary on 

the basis of tested nutritional research, except that such reimbursement shall not be less than would otherwise be required 

under this section. 

(B) The guidelines shall contain provisions designed to assure 

that reimbursement under this subsection shall not duplicate reimbursement under part C of title III of the Older Americans Act of 

1965, for the same meal served. 

(4) For the purpose of establishing eligibility for free or reduced 

price meals or supplements under this subsection, income shall include only the income of an eligible person and, if any, the spouse 

and dependents with whom the eligible person resides. 

(5) A person described in paragraph (1) shall be considered automatically eligible for free meals or supplements under this subsection, without further application or eligibility determination, if 

the person is— 

(A) a member of a household receiving assistance under the 

Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.); or 

(B) a recipient of assistance under title XVI or XIX of the Social Security Act (42 U.S.C. 1381 et seq.). 

(6) The Governor of any State may designate to administer the 

program under this subsection a State agency other than the agency that administers the child care food program under this section. 

(q) MANAGEMENT SUPPORT.— (1) TECHNICAL AND TRAINING ASSISTANCE.—In addition to the 

training and technical assistance that is provided to State 

agencies under other provisions of this Act and the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.), the Secretary shall 

provide training and technical assistance in order to assist the 

State agencies in improving their program management and 

oversight under this section. 

(2) TECHNICAL AND TRAINING ASSISTANCE FOR IDENTIFICATION

AND PREVENTION OF FRAUD AND ABUSE.—As part of training 

and technical assistance provided under paragraph (1), the 

Secretary shall provide training on a continuous basis to State 

agencies, and shall ensure that such training is provided to 

sponsoring organizations, for the identification and prevention 

of fraud and abuse under the program and to improve management of the program. 

(r) PROGRAM FOR AT-RISK SCHOOL CHILDREN.— 

(1) DEFINITION OF AT-RISK SCHOOL CHILD.—In this subsection, the term ‘‘at-risk school child’’ means a school child 

who— 

(A) is not more than 18 years of age, except that the age 

limitation provided by this subparagraph shall not apply 

to a child described in section 12(d)(1)(A); and 

(B) participates in a program authorized under this section operated at a site located in a geographical area 

served by a school in which at least 50 percent of the children enrolled are certified as eligible to receive free or reduced price school meals under this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.). 

(2) PARTICIPATION IN CHILD AND ADULT CARE FOOD PROGRAM.—An institution may participate in the program authorVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00441 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
436 

ized under this section only if the institution provides meals or 

supplements under a program— 

(A) organized primarily to provide care to at-risk school 

children during after-school hours, weekends, or holidays 

during the regular school year; and 

(B) with an educational or enrichment purpose. 

(3) ADMINISTRATION.—Except as otherwise provided in this 

subsection, the other provisions of this section apply to an institution described in paragraph (2). 

(4) MEAL AND SUPPLEMENT REIMBURSEMENT.— (A) LIMITATIONS.—An institution may claim reimbursement under this subsection only for one meal per child per 

day and one supplement per child per day served under a 

program organized primarily to provide care to at-risk 

school children during after-school hours, weekends, or 

holidays during the regular school year. 

(B) RATES.— 

(i) MEALS.—A meal shall be reimbursed under this 

subsection at the rate established for free meals under 

subsection (c). 

(ii) SUPPLEMENTS.—A supplement shall be reimbursed under this subsection at the rate established 

for a free supplement under subsection (c)(3). 

(C) NO CHARGE.—A meal or supplement claimed for reimbursement under this subsection shall be served without 

charge. 

(5) LIMITATION.—An institution participating in the program 

under this subsection may not claim reimbursement for meals 

and snacks that are served under section 18(h) on the same 

day. 

(6) HANDBOOK.— (A) IN GENERAL.—Not later than 180 days after the date 

of enactment of the Healthy, Hunger-Free Kids Act of 

2010, the Secretary shall— 

(i) issue guidelines for afterschool meals for at-risk 

school children; and 

(ii) publish a handbook reflecting those guidelines. 

(B) REVIEW.—Each year after the issuance of guidelines 

under subparagraph (A), the Secretary shall— 

(i) review the guidelines; and 

(ii) issue a revised handbook reflecting changes 

made to the guidelines. 

(s) INFORMATION CONCERNING THE SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN.— 

(1) IN GENERAL.—The Secretary shall provide each State 

agency administering a child and adult care food program 

under this section with information concerning the special supplemental nutrition program for women, infants, and children 

authorized under section 17 of the Child Nutrition Act of 1966 

(42 U.S.C. 1786). 

(2) REQUIREMENTS FOR STATE AGENCIES.—Each State agency 

shall ensure that each participating family and group day care 

home and child care center (other than an institution providing 

care to school children outside school hours)— 

(A) receives materials that include— 


emcdonald on DSK67QTVN1PROD with HEARING
437 

(i) a basic explanation of the importance and benefits of the special supplemental nutrition program for 

women, infants, and children; 

(ii) the maximum State income eligibility standards, 

according to family size, for the program; and 

(iii) information concerning how benefits under the 

program may be obtained; 

(B) receives periodic updates of the information described in subparagraph (A); and 

(C) provides the information described in subparagraph 

(A) to parents of enrolled children at enrollment. 

(t) PARTICIPATION BY EMERGENCY SHELTERS.— 

(1) DEFINITION OF EMERGENCY SHELTER.—In this subsection, 

the term ‘‘emergency shelter’’ means— 

(A) an emergency shelter (as defined in section 321 of 

the Stewart B. McKinney Homeless Assistance Act (42 

U.S.C. 11351)); or 

(B) a site operated by the shelter. 

(2) ADMINISTRATION.—Except as otherwise provided in this 

subsection, an emergency shelter shall be eligible to participate 

in the program authorized under this section in accordance 

with the terms and conditions applicable to eligible institutions 

described in subsection (a). 

(3) LICENSING REQUIREMENTS.—The licensing requirements 

contained in subsection (a)(5) shall not apply to an emergency 

shelter. 

(4) HEALTH AND SAFETY STANDARDS.—To be eligible to participate in the program authorized under this section, an emergency shelter shall comply with applicable State or local health 

and safety standards. 

(5) MEAL OR SUPPLEMENT REIMBURSEMENT.— 

(A) LIMITATIONS.—An emergency shelter may claim reimbursement under this subsection— 

(i) only for a meal or supplement served to children 

residing at an emergency shelter, if the children are— 

(I) not more than 18 years of age; or 

(II) children with disabilities; and 

(ii) for not more than 3 meals, or 2 meals and a supplement, per child per day. 

(B) RATE.—A meal or supplement eligible for reimbursement shall be reimbursed at the rate at which free meals 

and supplements are reimbursed under subsection (c). 

(C) NO CHARGE.—A meal or supplement claimed for reimbursement shall be served without charge. 

(u) PROMOTING HEALTH AND WELLNESS IN CHILD CARE.— 

(1) PHYSICAL ACTIVITY AND ELECTRONIC MEDIA USE.—The 

Secretary shall encourage participating child care centers and 

family or group day care homes— 

(A) to provide to all children under the supervision of 

the participating child care centers and family or group 

day care homes daily opportunities for structured and 

unstructured age-appropriate physical activity; and 

(B) to limit among children under the supervision of the 

participating child care centers and family or group day 


emcdonald on DSK67QTVN1PROD with HEARING
438 

care homes the use of electronic media to an appropriate 

level. 

(2) WATER CONSUMPTION.—Participating child care centers 

and family or group day care homes shall make available to 

children, as nutritionally appropriate, potable water as an acceptable fluid for consumption throughout the day, including at 

meal times. 

(3) TECHNICAL ASSISTANCE AND GUIDANCE.— 

(A) IN GENERAL.—The Secretary shall provide technical 

assistance to institutions participating in the program 

under this section to assist participating child care centers 

and family or group day care homes in complying with the 

nutritional requirements and wellness recommendations 

prescribed by the Secretary in accordance with this subsection and subsection (g). 

(B) GUIDANCE.—Not later than January 1, 2012, the Secretary shall issue guidance to States and institutions to 

encourage participating child care centers and family or 

group day care homes serving meals and snacks under this 

section to— 

(i) include foods that are recommended for increased 

serving consumption in amounts recommended by the 

most recent Dietary Guidelines for Americans published under section 301 of the National Nutrition 

Monitoring and Related Research Act of 1990 (7 

U.S.C. 5341), including fresh, canned, dried, or frozen 

fruits and vegetables, whole grain products, lean meat 

products, and low-fat and non-fat dairy products; and 

(ii) reduce sedentary activities and provide opportunities for regular physical activity in quantities recommended by the most recent Dietary Guidelines for 

Americans described in clause (i). 

(C) NUTRITION.—Technical assistance relating to the nutritional requirements of this subsection and subsection (g) 

shall include— 

(i) nutrition education, including education that emphasizes the relationship between nutrition, physical 

activity, and health; 

(ii) menu planning; 

(iii) interpretation of nutrition labels; and 

(iv) food preparation and purchasing guidance to 

produce meals and snacks that are— 

(I) consistent with the goals of the most recent 

Dietary Guidelines; and 

(II) promote the health of the population served 

by the program under this section, as recommended by authoritative scientific organizations. 

(D) PHYSICAL ACTIVITY.—Technical assistance relating to 

the physical activity requirements of this subsection shall 

include— 

(i) education on the importance of regular physical 

activity to overall health and well being; and 


emcdonald on DSK67QTVN1PROD with HEARING
439 

(ii) sharing of best practices for physical activity 

plans in child care centers and homes as recommended 

by authoritative scientific organizations. 

(E) ELECTRONIC MEDIA USE.—Technical assistance relating to the electronic media use requirements of this subsection shall include— 

(i) education on the benefits of limiting exposure to 

electronic media by children; and 

(ii) sharing of best practices for the development of 

daily activity plans that limit use of electronic media. 

(F) MINIMUM ASSISTANCE.—At a minimum, the technical 

assistance required under this paragraph shall include a 

handbook, developed by the Secretary in coordination with 

the Secretary for Health and Human Services, that includes recommendations, guidelines, and best practices for 

participating institutions and family or group day care 

homes that are consistent with the nutrition, physical activity, and wellness requirements and recommendations of 

this subsection. 

(G) ADDITIONAL ASSISTANCE.—In addition to the requirements of this paragraph, the Secretary shall develop and 

provide such appropriate training and education materials, 

guidance, and technical assistance as the Secretary considers to be necessary to comply with the nutritional and 

wellness requirements of this subsection and subsection 

(g). 

(H) FUNDING.— (i) IN GENERAL.—On October 1, 2010, out of any 

funds in the Treasury not otherwise appropriated, the 

Secretary of the Treasury shall transfer to the Secretary to provide technical assistance under this subsection $10,000,000, to remain available until expended. 

(ii) RECEIPT AND ACCEPTANCE.—The Secretary shall 

be entitled to receive, shall accept, and shall use to 

carry out this subsection the funds transferred under 

clause (i), without further appropriation. 

* * * * * * * 

INDIAN CHILD WELFARE ACT OF 1978 

* * * * * * * 

TITLE II—INDIAN CHILD AND FAMILY PROGRAMS 

SEC. 201. (a) The Secretary is authorized to make grants to Indian tribes and organizations in the establishment and operation 

of Indian child and family service programs on or near reservations 

and in the preparation and implementation of child welfare codes. 

The objective of every Indian child and family service program 

shall be to prevent the breakup of Indian families and, in particular, to insure that the permanent removal of an Indian child 

from the custody of his parent or Indian custodian shall be a last 

resort. Such child and family service programs may include, but 

are not limited to— 


emcdonald on DSK67QTVN1PROD with HEARING
440 

(1) a system for licensing or otherwise regulating Indian foster and adoptive homes; 

(2) the operation and maintenance of facilities for the counseling and treatment of Indian families and for the temporary 

custody of Indian children; 

(3) family assistance, including homemaker and home counselors, day care, afterschool care, and employment, recreational 

activities, and respite care; 

(4) home improvement programs; 

(5) the employment of professional and other trained personnel to assist the tribal court in the disposition of domestic 

relations and child welfare matters; 

(6) education and training of Indians, including tribal court 

judges and staff, in skills relating to child and family assistance and service programs; 

(7) a subsidy program under which Indian adoptive children 

may be provided support comparable to that for which they 

would be eligible as foster children, taking into account the appropriate State standards of support for maintenance and medical needs; and 

(8) guidance, legal representation, and advice to Indian families involved in tribal, State, or Federal child custody proceedings. 

(b) Funds appropriated for use by the Secretary in accordance 

with this section may be utilized as non-Federal matching share in 

connection with funds provided under øtitles IV–B and XX¿ part B 

of title IV of the Social Security Act or under any other Federal financial assistance programs which contribute to the purpose for 

which such funds are authorized to be appropriated for use under 

this Act. The provision or possibility of assistance under this Act 

shall not be a basis for the denial or reduction of any assistance 

otherwise authorized under øtitles IV–B and XX¿ part B of title IV 

of the Social Security Act or any other federally assisted program. 

For purposes of qualifying for assistance under a federally assisted 

program, licensing or approval of foster or adoptive homes or institutions by an Indian tribe shall be deemed equivalent to licensing 

or approval by a State. 

* * * * * * * 

TITLE 31, UNITED STATES CODE 

* * * * * * * 

SUBTITLE III—FINANCIAL MANAGEMENT 

* * * * * * * 

CHAPTER 38—ADMINISTRATIVE REMEDIES FOR FALSE 

CLAIMS AND STATEMENTS 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
441 

§ 3803. Hearing and determinations 

(a)(1) The investigating official of an authority may investigate 

allegations that a person is liable under section 3802 of this title 

and shall report the findings and conclusions of such investigation 

to the reviewing official of the authority. The preceding sentence 

does not modify any responsibility of an investigating official to report violations of criminal law to the Attorney General. 

(2) If the reviewing official of an authority determines, based 

upon the report of the investigating official under paragraph (1) of 

this subsection, that there is adequate evidence to believe that a 

person is liable under section 3802 of this title, the reviewing official shall transmit to the Attorney General a written notice of the 

intention of such official to refer the allegations of such liability to 

a presiding officer of such authority. Such notice shall include— 

(A) a statement of the reasons of the reviewing official for 

the referral of such allegations; 

(B) a statement specifying the evidence which supports such 

allegations; 

(C) a description of the claims or statements for which liability under section 3802 of this title is alleged; 

(D) an estimate of the amount of money or the value of property or services requested or demanded in violation of section 

3802 of this title; and 

(E) a statement of any exculpatory or mitigating circumstances which may relate to such claims or statements. 

(b)(1) Within 90 days after receipt of a notice from a reviewing 

official under paragraph (2) of subsection (a), the Attorney General 

or an Assistant Attorney General designated by the Attorney General shall transmit a written statement to the reviewing official 

which specifies— 

(A) that the Attorney General or such Assistant Attorney 

General approves or disapproves the referral to a presiding officer of the allegations of liability stated in such notice; 

(B) in any case in which the referral of allegations is approved, that the initiation of a proceeding under this section 

with respect to such allegations is appropriate; and 

(C) in any case in which the referral of allegations is disapproved, the reasons for such disapproval. 

(2) A reviewing official may refer allegations of liability to a presiding officer only if the Attorney General or an Assistant Attorney 

General designated by the Attorney General approves the referral 

of such allegations in a written statement described in paragraph 

(1) of this subsection. 

(3) If the Attorney General or an Assistant Attorney General designated by the Attorney General transmits to an authority head a 

written finding that the continuation of any hearing under this section with respect to a claim or statement may adversely affect any 

pending or potential criminal or civil action related to such claim 

or statement, such hearing shall be immediately stayed and may 

be resumed only upon written authorization of the Attorney General. 

(c)(1) No allegations of liability under section 3802 of this title 

with respect to any claim made, presented, or submitted by any 

person shall be referred to a presiding officer under paragraph (2) 

of subsection (b) if the reviewing official determines that— 


emcdonald on DSK67QTVN1PROD with HEARING
442 

(A) an amount of money in excess of $150,000; or 

(B) property or services with a value in excess of $150,000, 

is requested or demanded in violation of section 3802 of this title 

in such claim or in a group of related claims which are submitted 

at the time such claim is submitted. 

(2)(A) Except as provided in subparagraph (B) of this paragraph, 

no allegations of liability against an individual under section 3802 

of this title with respect to any claim or statement made, presented, or submitted, or caused to be made, presented, or submitted, by such individual relating to any benefits received by such 

individual shall be referred to a presiding officer under paragraph 

(2) of subsection (b). 

(B) Allegations of liability against an individual under section 

3802 of this title with respect to any claim or statement made, presented, or submitted, or caused to be made, presented, or submitted, by such individual relating to any benefits received by such 

individual may be referred to a presiding officer under paragraph 

(2) of subsection (b) if— 

(i) such claim or statement is made by such individual in 

making application for such benefits; 

(ii) such allegations relate to the eligibility of such individual 

to receive such benefits; and 

(iii) with respect to such claim or statement, the individual— 

(I) has actual knowledge that the claim or statement is 

false, fictitious, or fraudulent; 

(II) acts in deliberate ignorance of the truth or falsity of 

the claim or statement; or 

(III) acts in reckless disregard of the truth or falsity of 

the claim or statement. 

(C) For purposes of this subsection, the term ‘‘benefits’’ means— 

(i) benefits under the supplemental security income program 

under title XVI of the Social Security Act; 

(ii) old age, survivors, and disability insurance benefits 

under title II of the Social Security Act; 

(iii) benefits under title XVIII of the Social Security Act; 

(iv) assistance under a State program funded under part A 

of title IV of the Social Security Act; 

(v) medical assistance under a State plan approved under 

section 1902(a) of the Social Security Act; 

ø(vi) benefits under title XX of the Social Security Act;¿ 

ø(vii)¿ (vi) benefits under the supplemental nutrition assistance program (as defined in section 3 of the Food and Nutrition Act of 2008); 

ø(viii)¿ (vii) benefits under chapters 11, 13, 15, 17, and 21 

of title 38; 

ø(ix)¿ (viii) benefits under the Black Lung Benefits Act; 

ø(x)¿ (ix) benefits under the special supplemental nutrition 

program for women, infants, and children established under 

section 17 of the Child Nutrition Act of 1966; 

ø(xi)¿ (x) benefits under section 336 of the Older Americans 

Act; 

ø(xii)¿ (xi) any annuity or other benefit under the Railroad 

Retirement Act of 1974; 

ø(xiii)¿ (xii) benefits under the Richard B. Russell National 

School Lunch Act; 


emcdonald on DSK67QTVN1PROD with HEARING
443 

ø(xiv)¿ (xiii) benefits under any housing assistance program 

for lower income families or elderly or handicapped persons 

which is administered by the Secretary of Housing and Urban 

Development or the Secretary of Agriculture; 

ø(xv)¿ (xiv) benefits under the Low-Income Home Energy Assistance Act of 1981; and 

ø(xvi)¿ (xv) benefits under part A of the Energy Conservation 

in Existing Buildings Act of 1976, 

which are intended for the personal use of the individual who receives the benefits or for a member of the individual’s family. 

(d)(1) On or after the date on which a reviewing official is permitted to refer allegations of liability to a presiding officer under 

subsection (b) of this section, the reviewing official shall mail, by 

registered or certified mail, or shall deliver, a notice to the person 

alleged to be liable under section 3802 of this title. Such notice 

shall specify the allegations of liability against such person and 

shall state the right of such person to request a hearing with respect to such allegations. 

(2) If, within 30 days after receiving a notice under paragraph (1) 

of this subsection, the person receiving such notice requests a hearing with respect to the allegations contained in such notice— 

(A) the reviewing official shall refer such allegations to a presiding officer for the commencement of such hearing; and 

(B) the presiding officer shall commence such hearing by 

mailing by registered or certified mail, or by delivery of, a notice which complies with paragraphs (2)(A) and (3)(B)(i) of subsection (g) to such person. 

(e)(1)(A) Except as provided in subparagraph (B) of this paragraph, at any time after receiving a notice under paragraph (2)(B) 

of subsection (d), the person receiving such notice shall be entitled 

to review, and upon payment of a reasonable fee for duplication, 

shall be entitled to obtain a copy of, all relevant and material documents, transcripts, records, and other materials, which relate to 

such allegations and upon which the findings and conclusions of 

the investigating official under paragraph (1) of subsection (a) are 

based. 

(B) A person is not entitled under subparagraph (A) to review 

and obtain a copy of any document, transcript, record, or material 

which is privileged under Federal law. 

(2) At any time after receiving a notice under paragraph (2)(B) 

of subsection (d), the person receiving such notice shall be entitled 

to obtain all exculpatory information in the possession of the investigating official or the reviewing official relating to the allegations 

contained in such notice. The provisions of subparagraph (B) of 

paragraph (1) do not apply to any document, transcript, record, or 

other material, or any portion thereof, in which such exculpatory 

information is contained. 

(f) Any hearing commenced under paragraph (2) of subsection (d) 

shall be conducted by the presiding officer on the record in order 

to determine— 

(1) the liability of a person under section 3802 of this title; 

and 

(2) if a person is determined to be liable under such section, 

the amount of any civil penalty or assessment to be imposed 

on such person. 


emcdonald on DSK67QTVN1PROD with HEARING
444 

Any such determination shall be based on the preponderance of the 

evidence. 

(g)(1) Each hearing under subsection (f) of this section shall be 

conducted— 

(A) in the case of an authority to which the provisions of subchapter II of chapter 5 of title 5 apply, in accordance with— 

(i) the provisions of such subchapter to the extent that 

such provisions are not inconsistent with the provisions of 

this chapter; and 

(ii) procedures promulgated by the authority head under 

paragraph (3) of this subsection; or 

(B) in the case of an authority to which the provisions of 

such subchapter do not apply, in accordance with procedures 

promulgated by the authority head under paragraphs (2) and 

(3) of this subsection. 

(2) An authority head of an authority described in subparagraph 

(B) of paragraph (1) shall by regulation promulgate procedures for 

the conduct of hearings under this chapter. Such procedures shall 

include: 

(A) The provision of written notice of the hearing to any person alleged to be liable under section 3802 of this title, including written notice of— 

(i) the time, place, and nature of the hearing; 

(ii) the legal authority and jurisdiction under which the 

hearing is to be held; and 

(iii) the matters of facts and law to be asserted. 

(B) The provision to any person alleged to be liable under 

section 3802 of this title of opportunities for the submission of 

facts, arguments, offers of settlement, or proposals of adjustment. 

(C) Procedures to ensure that the presiding officer shall not, 

except to the extent required for the disposition of ex parte 

matters as authorized by law— 

(i) consult a person or party on a fact in issue, unless on 

notice and opportunity for all parties to the hearing to participate; or 

(ii) be responsible to or subject to the supervision or direction of the investigating official or the reviewing official. 

(D) Procedures to ensure that the investigating official and 

the reviewing official do not participate or advise in the decision required under subsection (h) of this section or the review 

of the decision by the authority head under subsection (i) of 

this section, except as provided in subsection (j) of this section. 

(E) The provision to any person alleged to be liable under 

section 3802 of this title of opportunities to present such person’s case through oral or documentary evidence, to submit rebuttal evidence, and to conduct such cross-examination as may 

be required for a full and true disclosure of the facts. 

(F) Procedures to permit any person alleged to be liable 

under section 3802 of this title to be accompanied, represented, 

and advised by counsel or such other qualified representative 

as the authority head may specify in such regulations. 

(G) Procedures to ensure that the hearing is conducted in an 

impartial manner, including procedures to— 


emcdonald on DSK67QTVN1PROD with HEARING
445 

(i) permit the presiding officer to at any time disqualify 

himself; and 

(ii) permit the filing, in good faith, of a timely and sufficient affidavit alleging personal bias or another reason for 

disqualification of a presiding officer or a reviewing official. 

(3)(A) Each authority head shall promulgate by regulation procedures described in subparagraph (B) of this paragraph for the conduct of hearings under this chapter. Such procedures shall be in 

addition to the procedures described in paragraph (1) or paragraph 

(2) of this subsection, as the case may be. 

(B) The procedures referred to in subparagraph (A) of this paragraph are: 

(i) Procedures for the inclusion, in any written notice of a 

hearing under this section to any person alleged to be liable 

under section 3802 of this title, of a description of the procedures for the conduct of the hearing. 

(ii) Procedures to permit discovery by any person alleged to 

be liable under section 3802 of this title only to the extent that 

the presiding officer determines that such discovery is necessary for the expeditious, fair, and reasonable consideration of 

the issues, except that such procedures shall not apply to documents, transcripts, records, or other material which a person 

is entitled to review under paragraph (1) of subsection (e) or 

to information to which a person is entitled under paragraph 

(2) of such subsection. Procedures promulgated under this 

clause shall prohibit the discovery of the notice required under 

subsection (a)(2) of this section. 

(4) Each hearing under subsection (f) of this section shall be 

held— 

(A) in the judicial district of the United States in which the 

person alleged to be liable under section 3802 of this title resides or transacts business; 

(B) in the judicial district of the United States in which the 

claim or statement upon which the allegation of liability under 

such section was made, presented, or submitted; or 

(C) in such other place as may be agreed upon by such person and the presiding officer who will conduct such hearing. 

(h) The presiding officer shall issue a written decision, including 

findings and determinations, after the conclusion of the hearing. 

Such decision shall include the findings of fact and conclusions of 

law which the presiding officer relied upon in determining whether 

a person is liable under this chapter. The presiding officer shall 

promptly send to each party to the hearing a copy of such decision 

and a statement describing the right of any person determined to 

be liable under section 3802 of this title to appeal the decision of 

the presiding officer to the authority head under paragraph (2) of 

subsection (i). 

(i)(1) Except as provided in paragraph (2) of this subsection and 

section 3805 of this title, the decision, including the findings and 

determinations, of the presiding officer issued under subsection (h) 

of this section are final. 

(2)(A)(i) Except as provided in clause (ii) of this subparagraph, 

within 30 days after the presiding officer issues a decision under 

subsection (h) of this section, any person determined in such deciVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00451 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
446 

sion to be liable under section 3802 of this title may appeal such 

decision to the authority head. 

(ii) If, within the 30-day period described in clause (i) of this subparagraph, a person determined to be liable under this chapter requests the authority head for an extension of such 30-day period 

to file an appeal of a decision issued by the presiding officer under 

subsection (h) of this section, the authority head may extend such 

period if such person demonstrates good cause for such extension. 

(B) Any authority head reviewing under this section the decision, 

findings, and determinations of a presiding officer shall not consider any objection that was not raised in the hearing conducted 

pursuant to subsection (f) of this section unless a demonstration is 

made of extraordinary circumstances causing the failure to raise 

the objection. If any party demonstrates to the satisfaction of the 

authority head that additional evidence not presented at such hearing is material and that there were reasonable grounds for the failure to present such evidence at such hearing, the authority head 

shall remand the matter to the presiding officer for consideration 

of such additional evidence. 

(C) The authority head may affirm, reduce, reverse, compromise, 

remand, or settle any penalty or assessment determined by the 

presiding officer pursuant to this section. The authority head shall 

promptly send to each party to the appeal a copy of the decision 

of the authority head and a statement describing the right of any 

person determined to be liable under section 3802 of this title to 

judicial review under section 3805 of this title. 

(j) The reviewing official has the exclusive authority to compromise or settle any allegations of liability under section 3802 of 

this title against a person without the consent of the presiding officer at any time after the date on which the reviewing official is permitted to refer allegations of liability to a presiding officer under 

subsection (b) of this section and prior to the date on which the 

presiding officer issues a decision under subsection (h) of this section. Any such compromise or settlement shall be in writing. 

* * * * * * * 

TITLE 40, UNITED STATES CODE 

* * * * * * * 

SUBTITLE IV—APPALACHIAN REGIONAL 

DEVELOPMENT 

* * * * * * * 

CHAPTER 145—SPECIAL APPALACHIAN PROGRAMS 

SUBCHAPTER I—PROGRAMS 

* * * * * * * 

§ 14502. Demonstration health projects 

(a) PURPOSE.—To demonstrate the value of adequate health facilities and services to the economic development of the AppaVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00452 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
447 

lachian region, the Secretary of Health and Human Services may 

make grants for the planning, construction, equipment, and operation of multi-county demonstration health, nutrition, and child 

care projects, including hospitals, regional health diagnostic and 

treatment centers, and other facilities and services necessary for 

the purposes of this section. 

(b) PLANNING GRANTS.— 

(1) AUTHORITY TO PROVIDE AMOUNTS AND MAKE GRANTS.— 

The Secretary may provide amounts to the Appalachian Regional Commission for the support of its Health Advisory Committee and may make grants for expenses of planning necessary for the development and operation of demonstration 

health projects for the region. 

(2) LIMITATION ON AVAILABLE AMOUNTS.—The amount of a 

grant under this section for planning shall not be more than 

75 percent of expenses. 

(3) SOURCES OF ASSISTANCE.—The federal contribution may 

be provided entirely from amounts authorized under this section or in combination with amounts provided under other federal or federal grant programs. 

(4) FEDERAL SHARE.—Notwithstanding any provision of law 

limiting the federal share in those other programs, amounts 

appropriated to carry out this section may be used to increase 

the federal share to the maximum percentage cost of a grant 

authorized by this subsection. 

(c) CONSTRUCTION AND EQUIPMENT GRANTS.— 

(1) ADDITIONAL USES FOR CONSTRUCTION GRANTS.—Grants 

under this section for construction may also be used for— 

(A) the acquisition of privately owned facilities— 

(i) not operated for profit; or 

(ii) previously operated for profit if the Commission 

finds that health services would not otherwise be provided in the area served by the facility if the acquisition is not made; and 

(B) initial equipment. 

(2) STANDARDS FOR MAKING GRANTS.—Grants under this section for construction shall be made in accordance with section 

14523 of this title and shall not be incompatible with the applicable provisions of title VI of the Public Health Service Act (42 

U.S.C. 291 et seq.), the Developmental Disabilities Assistance 

and Bill of Rights Act of 2000 (42 U.S.C. 15001 et seq.), and 

other laws authorizing grants for the construction of health-related facilities, without regard to any provisions in those laws 

relating to appropriation authorization ceilings or to allotments 

among the States. 

(3) LIMITATION ON AVAILABLE AMOUNTS.—A grant for the 

construction or equipment of any component of a demonstration health project shall not be more than 80 percent of the 

cost. 

(4) SOURCES OF ASSISTANCE.—The federal contribution may 

be provided entirely from amounts authorized under this section or in combination with amounts provided under other federal grant programs for the construction or equipment of 

health-related facilities. 


emcdonald on DSK67QTVN1PROD with HEARING
448 

(5) FEDERAL SHARE.—Notwithstanding any provision of law 

limiting the federal share in those other programs, amounts 

authorized under this section may be used to increase federal 

grants for component facilities of a demonstration health 

project to a maximum of 80 percent of the cost of the facilities. 

(d) OPERATION GRANTS.— (1) STANDARDS FOR MAKING GRANTS.—A grant for the operation of a demonstration health project shall not be made— 

(A) unless the facility is publicly owned, or owned by a 

public or private nonprofit organization, and is not operated for profit; 

(B) after five years following the commencement of the 

initial grant for operation of the project, except that child 

development demonstrations assisted under this section 

during fiscal year 1979 may be approved under section 

14322 of this title for continued support beyond that period, on request of the State, if the Commission finds that 

no federal, state, or local amounts are available to continue the project; and 

(C) unless the Secretary of Health and Human Services 

is satisfied that the operation of the project will be conducted under efficient management practices designed to 

obviate operating deficits. 

(2) LIMITATION ON AVAILABLE AMOUNTS.—Grants under this 

section for the operation (including initial operating amounts 

and operating deficits, which include the cost of attracting, 

training, and retaining qualified personnel) of a demonstration 

health project, whether or not constructed with amounts authorized to be appropriated by this section, may be made for 

up to— 

(A) 50 percent of the cost of that operation; 

(B) in the case of a project to be carried out in a county 

for which a distressed county designation is in effect under 

section 14526, 80 percent of the cost of that operation; or 

(C) in the case of a project to be carried out for a county 

for which an at-risk county designation is in effect under 

section 14526, 70 percent of the cost of that operation. 

(3) SOURCES OF ASSISTANCE.—The federal contribution may 

be provided entirely from amounts appropriated to carry out 

this section or in combination with amounts provided under 

other federal grant programs for the operation of health related facilities and the provision of health and child development services, including parts A and B of title IV øand title 

XX¿ of the Social Security Act (42 U.S.C. 601 et seq., 620 et 

seq.ø, 1397 et seq.¿). 

(4) FEDERAL SHARE.—Notwithstanding any provision of law 

limiting the federal share in those other programs, amounts 

appropriated to carry out this section may be used to increase 

federal grants for operating components of a demonstration 

health project to the maximum percentage cost of a grant authorized by this subsection. 

(5) STATE DEEMED TO MEET REQUIREMENT OF PROVIDING AS- SISTANCE OR SERVICES ON STATEWIDE BASIS.—Notwithstanding 

any provision of the Social Security Act (42 U.S.C. 301 et seq.) 

requiring assistance or services on a statewide basis, a State 


emcdonald on DSK67QTVN1PROD with HEARING
449 

providing assistance or services under a federal grant program 

described in paragraph (2) in any area of the region approved 

by the Commission is deemed to be meeting that requirement. 

(e) GRANT SOURCES AND USE OF GRANTS IN COMPUTING ALLOT- MENTS.—Grants under this section— 

(1) shall be made only out of amounts specifically appropriated for the purpose of carrying out this subtitle; and 

(2) shall not be taken into account in computing allotments 

among the States under any other law. 

(f) MAXIMUM COMMISSION CONTRIBUTION.— (1) IN GENERAL.—Subject to paragraphs (2) and (3), the Commission may contribute not more than 50 percent of any 

project cost eligible for financial assistance under this section 

from amounts appropriated to carry out this subtitle. 

(2) DISTRESSED COUNTIES.—The maximum Commission contribution for a project to be carried out in a county for which 

a distressed county designation is in effect under section 14526 

of this title may be increased to the lesser of— 

(A) 80 percent; or 

(B) the maximum federal contribution percentage authorized by this section. 

(3) AT-RISK COUNTIES.—The maximum Commission contribution for a project to be carried out in a county for which an atrisk county designation is in effect under section 14526 may be 

increased to the lesser of— 

(A) 70 percent; or 

(B) the maximum Federal contribution percentage authorized by this section. 

(g) EMPHASIS ON OCCUPATIONAL DISEASES FROM COAL MINING.— 

To provide for the further development of the Appalachian region’s 

human resources, grants under this section shall give special emphasis to programs and research for the early detection, diagnosis, 

and treatment of occupational diseases arising from coal mining, 

such as black lung. 

* * * * * * * 

PUBLIC HEALTH SERVICE ACT 

* * * * * * * 

TITLE XX—ADOLESCENT FAMILY LIFE DEMONSTRATION 

PROJECTS 

* * * * * * * 

REQUIREMENTS FOR APPLICATIONS

SEC. 2006. (a) An application for a grant for a demonstration 

project for services under this title shall be in such form and contain such information as the Secretary may require, and shall include— 

(1) an identification of the incidence of adolescent pregnancy 

and related problems; 

(2) a description of the economic conditions and income levels 

in the geographic area to be served; 


emcdonald on DSK67QTVN1PROD with HEARING
450 

(3) a description of existing pregnancy prevention services 

and programs of care for pregnant adolescents and adolescent 

parents (including adoption services), and including where, 

how, by whom, and to which population groups such services 

are provided, and the extent to which they are coordinated in 

the geographic area to be served; 

(4) a description of the major unmet needs for services for 

adolescents at risk of initial or recurrent pregnancies and an 

estimate of the number of adolescents not being served in the 

area; 

(5)(A) in the case of an applicant who will provide care services, a description of how all core services will be provided in 

the demonstration project using funds under this title or will 

otherwise be provided by the grantee in the area to be served, 

the population to which such services will be provided, how 

such services will be coordinated, integrated, and linked with 

other related programs and services and the source or sources 

of funding of such core services in the public and private sectors; or 

(B) in the case of an applicant who will provide prevention 

services, a description of the necessary services to be provided 

and how the applicant will provide such services; 

(6) a description of the manner in which adolescents needing 

services other than the services provided directly by the applicant will be identified and how access and appropriate referral 

to such other services (such as medicaid; licensed adoption 

agencies; maternity home services; public assistance; employment services; child care services for adolescent parents; and 

other city, county, and State programs related to adolescent 

pregnancy) will be provided, including a description of a plan 

to coordinate such other services with the services supported 

under this title; 

(7) a description of the applicant’s capacity to continue services as Federal funds decrease and in the absence of Federal 

assistance; 

(8) a description of the results expected from the provision 

of services, and the procedures to be used for evaluating those 

results; 

(9) a summary of the views of public agencies, providers of 

services, and the general public in the geographic area to be 

served, concerning the proposed use of funds provided for a 

demonstration project for services under this title and a description of procedures used to obtain those views, and, in the 

case of applicants who propose to coordinate services administered by a State, the written comments of the appropriate 

State officials responsible for such services; 

(10) assurances that the applicant will have an ongoing quality assurance program; 

(11) assurances that, where appropriate, the applicant shall 

have a system for maintaining the confidentiality of patient 

records in accordance with regulations promulgated by the Secretary; 

(12) assurances that the applicant will demonstrate its financial responsibility by the use of such accounting procedures 

and other requirements as may be prescribed by the Secretary; 


emcdonald on DSK67QTVN1PROD with HEARING
451 

(13) assurances that the applicant (A) has or will have a contractual or other arrangement with the agency of the State (in 

which the applicant provides services) that administers or supervises the administration of a State plan approved under 

title XIX of the Social Security Act for the payment of all or 

a part of the applicant’s costs in providing health services to 

persons who are eligible for medical assistance under such a 

State plan, or (B) has made or will make every reasonable effort to enter into such an arrangement; 

(14) assurances that the applicant has made or will make 

and will continue to make every reasonable effort to collect appropriate reimbursement for its costs in providing health services to persons who are entitled to benefits under title V of the 

Social Security Act, to medical assistance under a State plan 

approved under title XIX of such Act, or to assistance for medical expenses under any other public assistance program or private health insurance program; 

(15) assurances that the applicant has or will make and will 

continue to make every reasonable effort to collect appropriate 

reimbursement for its costs in providing services to persons entitled to services under parts B and E of title IV øand title XX¿ 

of the Social Security Act; 

(16)(A) a description of— 

(i) the schedule of fees to be used in the provision of 

services, which shall comply with section 2004(c) and 

which shall be designed to cover all reasonable direct and 

indirect costs incurred by the applicant in providing services; and 

(ii) a corresponding schedule of discounts to be applied 

to the payment of such fees, which shall comply with section 2004(c) and which shall be adjusted on the basis of 

the ability of the eligible person to pay; 

(B) assurances that the applicant has made and will continue to make every reasonable effort— 

(i) to secure from eligible persons payment for services 

in accordance with such schedules; 

(ii) to collect reimbursement for health or other services 

provided to persons who are entitled to have payment 

made on their behalf for such services under any Federal 

or other government program or private insurance program; and 

(iii) to seek such reimbursement on the basis of the full 

amount of fees for services without application of any discount; and 

(C) assurances that the applicant has submitted or will submit to the Secretary such reports as the Secretary may require 

to determine compliance with this paragraph; 

(17) assurances that the applicant will make maximum use 

of funds available under title X of this Act; 

(18) assurances that the acceptance by any individual of family planning services or family planning information (including 

educational materials) provided through financial assistance 

under this title shall be voluntary and shall not be a prerequisite to eligibility for or receipt of any other service furnished by the applicant; 


emcdonald on DSK67QTVN1PROD with HEARING
452 

(19) assurances that fees collected by the applicant for services rendered in accordance with this title shall be used by the 

applicant to further the purposes of this title; 

(20) assurances that the applicant, if providing both prevention and care services will not exclude or discriminate against 

any adolescent who receives prevention services and subsequently requires care services as a pregnant adolescent; 

(21) a description of how the applicant will, as appropriate 

in the provision of services— 

(A) involve families of adolescents in a manner which 

will maximize the role of the family in the solution of problems relating to the parenthood or pregnancy of the adolescent; 

(B) involve religious and charitable organizations, voluntary associations, and other groups in the private sector 

as well as services provided by publicly sponsored initiatives; 

(22)(A) assurances that— 

(i) except as provided in subparagraph (B) and subject to 

clause (ii), the applicant will notify the parents or guardians of any unemancipated minor requesting services from 

the applicant and, except as provided in subparagraph (C), 

will obtain the permission of such parents or guardians 

with respect to the provision of such services; and 

(ii) in the case of a pregnant unemancipated minor requesting services from the applicant, the applicant will notify the parents or guardians of such minor under clause 

(i) within a reasonable period of time; 

(B) assurances that the applicant will not notify or request 

the permission of the parents or guardian of any 

unemancipated minor without the consent of the minor— 

(i) who solely is requesting from the applicant pregnancy 

testing or testing or treatment for venereal disease; 

(ii) who is the victim of incest involving a parent; or 

(iii) if an adult sibling of the minor or an adult aunt, 

uncle, or grandparent who is related to the minor by blood 

certifies to the grantee that notification of the parents or 

guardians of such minor would result in physical injury to 

such minor; and 

(C) assurances that the applicant will not require, with respect to the provision of services, the permission of the parents 

or guardians of any pregnant unemancipated minor if such 

parents or guardians are attempting to compel such minor to 

have an abortion; 

(23) assurances that primary emphasis for services supported under this title shall be given to adolescents seventeen 

and under who are not able to obtain needed assistance 

through other means; 

(24) assurances that funds received under this title shall 

supplement and not supplant funds received from any other 

Federal, State, or local program or any private sources of 

funds; and 

(25) a plan for the conduct of, and assurances that the applicant will conduct, evaluations of the effectiveness of the servVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00458 Fmt 6659 Sfmt 6601 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
453 

ices supported under this title in accordance with subsection 

(b). 

(b)(1) Each grantee which receives funds for a demonstration 

project for services under this title shall expend at least 1 per centum but not in excess of 5 per centum of the amounts received 

under this title for the conduct of evaluations of the services supported under this title. The Secretary may, for a particular grantee 

upon good cause shown, waive the provisions of the preceding sentence with respect to the amounts to be expended on evaluations, 

but may not waive the requirement that such evaluations be conducted. 

(2) Evaluations required by paragraph (1) shall be conducted by 

an organization or entity which is independent of the grantee providing services supported under this title. To assist in conducting 

the evaluations required by paragraph (1), each grantee shall develop a working relationship with a college or university located in 

the grantee’s State which will provide or assist in providing monitoring and evaluation of services supported under this title unless 

no college or university in the grantee’s State is willing or has the 

capacity to provide or assist in providing such monitoring and assistance. 

(3) The Secretary may provide technical assistance with respect 

to the conduct of evaluations required under this subsection to any 

grantee which is unable to develop a working relationship with a 

college or university in the applicant’s State for the reasons described in paragraph (2). 

(c) Each grantee which receives funds for a demonstration project 

for services under this title shall make such reports concerning its 

use of Federal funds as the Secretary may require. Reports shall 

include, at such times as are considered appropriate by the Secretary, the results of the evaluations of the services supported 

under this title. 

(d)(1) A grantee shall periodically notify the Secretary of the 

exact number of instances in which a grantee does not notify the 

parents or guardians of a pregnant unemancipated minor under 

subsection (a)(22)(B)(iii). 

(2) For purposes of subsection (a)(22)(B)(iii), the term ‘‘adult’’ 

means an adult as defined by State law. 

(e) Each applicant shall provide the Governor of the State in 

which the applicant is located a copy of each application submitted 

to the Secretary for a grant for a demonstration project for services 

under this title. The Governor shall submit to the applicant comments on any such application within the period of sixty days beginning on the day when the Governor receives such copy. The applicant shall include the comments of the Governor with such application. 

(f) No application submitted for a grant for a demonstration 

project for care services under this title may be approved unless 

the Secretary is satisfied that core services shall be available 

through the applicant within a reasonable time after such grant is 

received. 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
454 

OLDER AMERICANS ACT OF 1965 

* * * * * * * 

TITLE II—ADMINISTRATION ON AGING 

* * * * * * * 

FEDERAL AGENCY CONSULTATION

SEC. 203. (a)(1) The Assistant Secretary, in carrying out the objectives and provisions of this Act, shall coordinate, advise, consult 

with, and cooperate with the head of each department, agency, or 

instrumentality of the Federal Government proposing or administering programs or services substantially related to the objectives 

of this Act, with respect to such programs or services. In particular, 

the Assistant Secretary shall coordinate, advise, consult, and cooperate with the Secretary of Labor in carrying out title V and with 

the Corporation for National and Community Service in carrying 

out this Act. 

(2) The head of each department, agency, or instrumentality of 

the Federal Government proposing to establish programs and services substantially related to the objectives of this Act shall consult 

with the Assistant Secretary prior to the establishment of such programs and services. To achieve appropriate coordination, the head 

of each department, agency, or instrumentality of the Federal Government administering any program substantially related to the 

objectives of this Act, particularly administering any program referred to in subsection (b), shall consult and cooperate with the Assistant Secretary in carrying out such program. In particular, the 

Secretary of Labor shall consult and cooperate with the Assistant 

Secretary in carrying out title I of the Workforce Innovation and 

Opportunity Act. 

(3) The head of each department, agency, or instrumentality of 

the Federal Government administering programs and services substantially related to the objectives of this Act shall collaborate with 

the Assistant Secretary in carrying out this Act, and shall develop 

a written analysis, for review and comment by the Assistant Secretary, of the impact of such programs and services on— 

(A) older individuals (with particular attention to low-income 

older individuals, including low-income minority older individuals, older individuals with limited English proficiency, and 

older individuals residing in rural areas) and eligible individuals (as defined in section 518); and 

(B) the functions and responsibilities of State agencies and 

area agencies on aging. 

(b) For the purposes of subsection (a), programs related to the objectives of this Act shall include— 

(1) title I of the Workforce Innovation and Opportunity Act, 

(2) title II of the Domestic Volunteer Service Act of 1973, 

(3) titles XVI, XVIII, øXIX, and XX¿ and XIX of the Social 

Security Act, 

(4) sections 231 and 232 of the National Housing Act, 

(5) the United States Housing Act of 1937, 

(6) section 202 of the Housing Act of 1959, 

(7) title I of the Housing and Community Development Act 

of 1974, 


emcdonald on DSK67QTVN1PROD with HEARING
455 

(8) title I of the Higher Education Act of 1965 and the Adult 

Education and Family Literacy Act, 

(9) sections 3, 9, and 16 of the Urban Mass Transportation 

Act of 1964, 

(10) the Public Health Service Act, including block grants 

under title XIX of such Act, 

(11) the Low-Income Home Energy Assistance Act of 1981, 

(12) part A of the Energy Conservation in Existing Buildings 

Act of 1976, relating to weatherization assistance for low income persons, 

(13) the Community Services Block Grant Act, 

(14) demographic statistics and analysis programs conducted 

by the Bureau of the Census under title 13, United States 

Code, 

(15) parts II and III of title 38, United States Code, 

(16) the Rehabilitation Act of 1973, 

(17) the Developmental Disabilities Assistance and Bill of 

Rights Act of 2000, 

(18) the Edward Byrne Memorial State and Local Law Enforcement Assistance Programs, established under part E of 

title I of the Omnibus Crime Control and Safe Streets Act of 

1968 (42 U.S.C. 3750–3766b)), and 

(19) sections 4 and 5 of the Assistive Technology Act of 1998 

(29 U.S.C. 3003, 3004). 

(c)(1) The Secretary, in collaboration with the Federal officials 

specified in paragraph (2), shall establish an Interagency Coordinating Committee on Aging (referred to in this subsection as the 

‘‘Committee’’) focusing on the coordination of agencies with respect 

to aging issues. 

(2) The officials referred to in paragraph (1) shall include the 

Secretary of Labor and the Secretary of Housing and Urban Development, and may include, at the direction of the President, the Attorney General, the Secretary of Transportation, the Secretary of 

the Treasury, the Secretary of Agriculture, the Secretary of Homeland Security, the Commissioner of Social Security, and such other 

Federal officials as the President may direct. An official described 

in this paragraph may appoint a designee to carry out the official’s 

duties under paragraph (1). 

(3) The Secretary of Health and Human Services shall serve as 

the first chairperson of the Committee, for 1 term, and the Secretary of Housing and Urban Development shall serve as the chairperson for the following term. After that following term, the Committee shall select a chairperson from among the members of the 

Committee, and any member may serve as the chairperson. No 

member may serve as the chairperson for more than 1 consecutive 

term. 

(4) For purposes of this subsection, a term shall be a period of 

2 calendar years. 

(5) The Committee shall meet not less often than once each year. 

(6) The Committee shall— 

(A) share information with and establish an ongoing system 

to improve coordination among Federal agencies with responsibility for programs and services for older individuals and recommend improvements to such system with an emphasis on— 


emcdonald on DSK67QTVN1PROD with HEARING
456 

(i) improving access to programs and services for older 

individuals; 

(ii) maximizing the impact of federally funded programs 

and services for older individuals by increasing the efficiency, effectiveness, and delivery of such programs and 

services; 

(iii) planning and preparing for the impact of demographic changes on programs and services for older individuals; and 

(iv) reducing or eliminating areas of overlap and duplication by Federal agencies in the provision and accessibility 

of such programs and services; 

(B) identify, promote, and implement (as appropriate), best 

practices and evidence-based program and service models to 

assist older individuals in meeting their housing, health care, 

and other supportive service needs, including— 

(i) consumer-directed care models for home and community-based care and supportive services that link housing, 

health care, and other supportive services and that facilitate aging in place, enabling older individuals to remain in 

their homes and communities as the individuals age; and 

(ii) innovations in technology applications (including assistive technology devices and assistive technology services) that give older individuals access to information on 

available services or that help in providing services to 

older individuals; 

(C) collect and disseminate information about older individuals and the programs and services available to the individuals 

to ensure that the individuals can access comprehensive information; 

(D) work with the Federal Interagency Forum on Aging-Related Statistics, the Bureau of the Census, and member agencies to ensure the continued collection of data relating to the 

housing, health care, and other supportive service needs of 

older individuals and to support efforts to identify and address 

unmet data needs; 

(E) actively seek input from and consult with nongovernmental experts and organizations, including public health interest and research groups and foundations about the activities 

described in subparagraphs (A) through (F); 

(F) identify any barriers and impediments, including barriers 

and impediments in statutory and regulatory law, to the access 

and use by older individuals of federally funded programs and 

services; and 

(G) work with States to better provide housing, health care, 

and other supportive services to older individuals by— 

(i) holding meetings with State agencies; 

(ii) providing ongoing technical assistance to States 

about better meeting the needs of older individuals; and 

(iii) working with States to designate liaisons, from the 

State agencies, to the Committee. 

(7) Not later than 90 days following the end of each term, the 

Committee shall prepare and submit to the Committee on Financial Services of the House of Representatives, the Committee on 

Education and the Workforce of the House of Representatives, the 


emcdonald on DSK67QTVN1PROD with HEARING
457 

Committee on Energy and Commerce of the House of Representatives, the Committee on Ways and Means of the House of Representatives, the Committee on Banking, Housing, and Urban Affairs of the Senate, the Committee on Health, Education, Labor, 

and Pensions of the Senate, and the Special Committee on Aging 

of the Senate, a report that— 

(A) describes the activities and accomplishments of the Committee in— 

(i) enhancing the overall coordination of federally funded 

programs and services for older individuals; and 

(ii) meeting the requirements of paragraph (6); 

(B) incorporates an analysis from the head of each agency 

that is a member of the interagency coordinating committee established under paragraph (1) that describes the barriers and 

impediments, including barriers and impediments in statutory 

and regulatory law (as the chairperson of the Committee determines to be appropriate), to the access and use by older individuals of programs and services administered by such agency; 

and 

(C) makes such recommendations as the chairman determines to be appropriate for actions to meet the needs described 

in paragraph (6) and for coordinating programs and services 

designed to meet those needs. 

(8) On the request of the Committee, any Federal Government 

employee may be detailed to the Committee without reimbursement, and such detail shall be without interruption or loss of civil 

service status or privilege. 

* * * * * * * 

SURPLUS PROPERTY ELIGIBILITY

SEC. 213. Any State or local government agency, and any nonprofit organization or institution, which receives funds appropriated for programs for older individuals under this Act, under 

title IV øor title XX¿ of the Social Security Act, or under titles VIII 

and X of the Economic Opportunity Act of 1964 and the Community Services Block Grant Act, shall be deemed eligible to receive 

for such programs, property which is declared surplus to the needs 

of the Federal Government in accordance with laws applicable to 

surplus property. 

* * * * * * * 

TITLE III—GRANTS FOR STATE AND COMMUNITY 

PROGRAMS ON AGING 

PART A—GENERAL PROVISIONS

* * * * * * * 

AREA PLANS

SEC. 306. (a) Each area agency on aging designated under section 

305(a)(2)(A) shall, in order to be approved by the State agency, prepare and develop an area plan for a planning and service area for 

a two-, three-, or four-year period determined by the State agency, 

with such annual adjustments as may be necessary. Each such 


emcdonald on DSK67QTVN1PROD with HEARING
458 

plan shall be based upon a uniform format for area plans within 

the State prepared in accordance with section 307(a)(1). Each such 

plan shall— 

(1) provide, through a comprehensive and coordinated system, for supportive services, nutrition services, and, where appropriate, for the establishment, maintenance, or construction 

of multipurpose senior centers, within the planning and service 

area covered by the plan, including determining the extent of 

need for supportive services, nutrition services, and multipurpose senior centers in such area (taking into consideration, 

among other things, the number of older individuals with low 

incomes residing in such area, the number of older individuals 

who have greatest economic need (with particular attention to 

low-income older individuals, including low-income minority 

older individuals, older individuals with limited English proficiency, and older individuals residing in rural areas) residing 

in such area, the number of older individuals who have greatest social need (with particular attention to low-income older 

individuals, including low-income minority older individuals, 

older individuals with limited English proficiency, and older individuals residing in rural areas) residing in such area, and 

the number of older individuals who are Indians residing in 

such area, and the efforts of voluntary organizations in the 

community), evaluating the effectiveness of the use of resources in meeting such need, and entering into agreements 

with providers of supportive services, nutrition services, or 

multipurpose senior centers in such area, for the provision of 

such services or centers to meet such need; 

(2) provide assurances that an adequate proportion, as required under section 307(a)(2), of the amount allotted for part 

B to the planning and service area will be expended for the delivery of each of the following categories of services— 

(A) services associated with access to services (transportation, health services (including mental health services), 

outreach, information and assistance (which may include 

information and assistance to consumers on availability of 

services under part B and how to receive benefits under 

and participate in publicly supported programs for which 

the consumer may be eligible), and case management services); 

(B) in-home services, including supportive services for 

families of older individuals who are victims of Alzheimer’s 

disease and related disorders with neurological and organic brain dysfunction; and 

(C) legal assistance; 

and assurances that the area agency on aging will report annually to the State agency in detail the amount of funds expended for each such category during the fiscal year most recently concluded; 

(3)(A) designate, where feasible, a focal point for comprehensive service delivery in each community, giving special consideration to designating multipurpose senior centers (including 

multipurpose senior centers operated by organizations referred 

to in paragraph (6)(C)) as such focal point; and 


emcdonald on DSK67QTVN1PROD with HEARING
459 

(B) specify, in grants, contracts, and agreements implementing the plan, the identity of each focal point so designated; 

(4)(A)(i)(I) provide assurances that the area agency on aging 

will— 

(aa) set specific objectives, consistent with State policy, 

for providing services to older individuals with greatest 

economic need, older individuals with greatest social need, 

and older individuals at risk for institutional placement; 

(bb) include specific objectives for providing services to 

low-income minority older individuals, older individuals 

with limited English proficiency, and older individuals residing in rural areas; and 

(II) include proposed methods to achieve the objectives described in items (aa) and (bb) of subclause (I); 

(ii) provide assurances that the area agency on aging will include in each agreement made with a provider of any service 

under this title, a requirement that such provider will— 

(I) specify how the provider intends to satisfy the service 

needs of low-income minority individuals, older individuals 

with limited English proficiency, and older individuals residing in rural areas in the area served by the provider; 

(II) to the maximum extent feasible, provide services to 

low-income minority individuals, older individuals with 

limited English proficiency, and older individuals residing 

in rural areas in accordance with their need for such services; and 

(III) meet specific objectives established by the area 

agency on aging, for providing services to low-income minority individuals, older individuals with limited English 

proficiency, and older individuals residing in rural areas 

within the planning and service area; and 

(iii) with respect to the fiscal year preceding the fiscal year 

for which such plan is prepared— 

(I) identify the number of low-income minority older individuals in the planning and service area; 

(II) describe the methods used to satisfy the service 

needs of such minority older individuals; and 

(III) provide information on the extent to which the area 

agency on aging met the objectives described in clause (i); 

(B) provide assurances that the area agency on aging will 

use outreach efforts that will— 

(i) identify individuals eligible for assistance under this 

Act, with special emphasis on— 

(I) older individuals residing in rural areas; 

(II) older individuals with greatest economic need 

(with particular attention to low-income minority individuals and older individuals residing in rural areas); 

(III) older individuals with greatest social need (with 

particular attention to low-income minority individuals and older individuals residing in rural areas); 

(IV) older individuals with severe disabilities; 

(V) older individuals with limited English proficiency; 


emcdonald on DSK67QTVN1PROD with HEARING
460 

(VI) older individuals with Alzheimer’s disease and 

related disorders with neurological and organic brain 

dysfunction (and the caretakers of such individuals); 

and 

(VII) older individuals at risk for institutional placement; and 

(ii) inform the older individuals referred to in subclauses 

(I) through (VI) of clause (i), and the caretakers of such individuals, of the availability of such assistance; and 

(C) contain an assurance that the area agency on aging will 

ensure that each activity undertaken by the agency, including 

planning, advocacy, and systems development, will include a 

focus on the needs of low-income minority older individuals 

and older individuals residing in rural areas; 

(5) provide assurances that the area agency on aging will coordinate planning, identification, assessment of needs, and provision of services for older individuals with disabilities, with 

particular attention to individuals with severe disabilities and 

individuals at risk for institutional placement, with agencies 

that develop or provide services for individuals with disabilities; 

(6) provide that the area agency on aging will— 

(A) take into account in connection with matters of general policy arising in the development and administration 

of the area plan, the views of recipients of services under 

such plan; 

(B) serve as the advocate and focal point for older individuals within the community by (in cooperation with 

agencies, organizations, and individuals participating in 

activities under the plan) monitoring, evaluating, and commenting upon all policies, programs, hearings, levies, and 

community actions which will affect older individuals; 

(C)(i) where possible, enter into arrangements with organizations providing day care services for children, assistance to older individuals caring for relatives who are children, and respite for families, so as to provide opportunities for older individuals to aid or assist on a voluntary 

basis in the delivery of such services to children, adults, 

and families; 

(ii) if possible regarding the provision of services under 

this title, enter into arrangements and coordinate with organizations that have a proven record of providing services 

to older individuals, that— 

(I) were officially designated as community action 

agencies or community action programs under section 

210 of the Economic Opportunity Act of 1964 (42 

U.S.C. 2790) for fiscal year 1981, and did not lose the 

designation as a result of failure to comply with such 

Act; or 

(II) came into existence during fiscal year 1982 as 

direct successors in interest to such community action 

agencies or community action programs; 

and that meet the requirements under section 676B of the 

Community Services Block Grant Act; and 


emcdonald on DSK67QTVN1PROD with HEARING
461 

(iii) make use of trained volunteers in providing direct 

services delivered to older individuals and individuals with 

disabilities needing such services and, if possible, work in 

coordination with organizations that have experience in 

providing training, placement, and stipends for volunteers 

or participants (such as organizations carrying out Federal 

service programs administered by the Corporation for National and Community Service), in community service settings; 

(D) establish an advisory council consisting of older individuals (including minority individuals and older individuals residing in rural areas) who are participants or who 

are eligible to participate in programs assisted under this 

Act, family caregivers of such individuals, representatives 

of older individuals, service providers, representatives of 

the business community, local elected officials, providers of 

veterans’ health care (if appropriate), and the general public, to advise continuously the area agency on aging on all 

matters relating to the development of the area plan, the 

administration of the plan and operations conducted under 

the plan; 

(E) establish effective and efficient procedures for coordination of— 

(i) entities conducting programs that receive assistance under this Act within the planning and service 

area served by the agency; and 

(ii) entities conducting other Federal programs for 

older individuals at the local level, with particular emphasis on entities conducting programs described in 

section 203(b), within the area; 

(F) in coordination with the State agency and with the 

State agency responsible for mental health services, increase public awareness of mental health disorders, remove barriers to diagnosis and treatment, and coordinate 

mental health services (including mental health 

screenings) provided with funds expended by the area 

agency on aging with mental health services provided by 

community health centers and by other public agencies 

and nonprofit private organizations; 

(G) if there is a significant population of older individuals who are Indians in the planning and service area of 

the area agency on aging, the area agency on aging shall 

conduct outreach activities to identify such individuals in 

such area and shall inform such individuals of the availability of assistance under this Act; 

(7) provide that the area agency on aging shall, consistent 

with this section, facilitate the area-wide development and implementation of a comprehensive, coordinated system for providing long-term care in home and community-based settings, 

in a manner responsive to the needs and preferences of older 

individuals and their family caregivers, by— 

(A) collaborating, coordinating activities, and consulting 

with other local public and private agencies and organizations responsible for administering programs, benefits, and 

services related to providing long-term care; 


emcdonald on DSK67QTVN1PROD with HEARING
462 

(B) conducting analyses and making recommendations 

with respect to strategies for modifying the local system of 

long-term care to better— 

(i) respond to the needs and preferences of older individuals and family caregivers; 

(ii) facilitate the provision, by service providers, of 

long-term care in home and community-based settings; 

and 

(iii) target services to older individuals at risk for institutional placement, to permit such individuals to remain in home and community-based settings; 

(C) implementing, through the agency or service providers, evidence-based programs to assist older individuals 

and their family caregivers in learning about and making 

behavioral changes intended to reduce the risk of injury, 

disease, and disability among older individuals; and 

(D) providing for the availability and distribution 

(through public education campaigns, Aging and Disability 

Resource Centers, the area agency on aging itself, and 

other appropriate means) of information relating to— 

(i) the need to plan in advance for long-term care; 

and 

(ii) the full range of available public and private 

long-term care (including integrated long-term care) 

programs, options, service providers, and resources; 

(8) provide that case management services provided under 

this title through the area agency on aging will— 

(A) not duplicate case management services provided 

through other Federal and State programs; 

(B) be coordinated with services described in subparagraph (A); and 

(C) be provided by a public agency or a nonprofit private 

agency that— 

(i) gives each older individual seeking services under 

this title a list of agencies that provide similar services within the jurisdiction of the area agency on 

aging; 

(ii) gives each individual described in clause (i) a 

statement specifying that the individual has a right to 

make an independent choice of service providers and 

documents receipt by such individual of such statement; 

(iii) has case managers acting as agents for the individuals receiving the services and not as promoters for 

the agency providing such services; or 

(iv) is located in a rural area and obtains a waiver 

of the requirements described in clauses (i) through 

(iii); 

(9) provide assurances that the area agency on aging, in carrying out the State Long-Term Care Ombudsman program 

under section 307(a)(9), will expend not less than the total 

amount of funds appropriated under this Act and expended by 

the agency in fiscal year 2000 in carrying out such a program 

under this title; 


emcdonald on DSK67QTVN1PROD with HEARING
463 

(10) provide a grievance procedure for older individuals who 

are dissatisfied with or denied services under this title; 

(11) provide information and assurances concerning services 

to older individuals who are Native Americans (referred to in 

this paragraph as ‘‘older Native Americans’’), including— 

(A) information concerning whether there is a significant 

population of older Native Americans in the planning and 

service area and if so, an assurance that the area agency 

on aging will pursue activities, including outreach, to increase access of those older Native Americans to programs 

and benefits provided under this title; 

(B) an assurance that the area agency on aging will, to 

the maximum extent practicable, coordinate the services 

the agency provides under this title with services provided 

under title VI; and 

(C) an assurance that the area agency on aging will 

make services under the area plan available, to the same 

extent as such services are available to older individuals 

within the planning and service area, to older Native 

Americans; and 

(12) provide that the area agency on aging will establish procedures for coordination of services with entities conducting 

other Federal or federally assisted programs for older individuals at the local level, with particular emphasis on entities 

conducting programs described in section 203(b) within the 

planning and service area. 

(13) provide assurances that the area agency on aging will— 

(A) maintain the integrity and public purpose of services 

provided, and service providers, under this title in all contractual and commercial relationships; 

(B) disclose to the Assistant Secretary and the State 

agency— 

(i) the identity of each nongovernmental entity with 

which such agency has a contract or commercial relationship relating to providing any service to older individuals; and 

(ii) the nature of such contract or such relationship; 

(C) demonstrate that a loss or diminution in the quantity or quality of the services provided, or to be provided, 

under this title by such agency has not resulted and will 

not result from such contract or such relationship; 

(D) demonstrate that the quantity or quality of the services to be provided under this title by such agency will be 

enhanced as a result of such contract or such relationship; 

and 

(E) on the request of the Assistant Secretary or the 

State, for the purpose of monitoring compliance with this 

Act (including conducting an audit), disclose all sources 

and expenditures of funds such agency receives or expends 

to provide services to older individuals; 

(14) provide assurances that preference in receiving services 

under this title will not be given by the area agency on aging 

to particular older individuals as a result of a contract or commercial relationship that is not carried out to implement this 

title; 


emcdonald on DSK67QTVN1PROD with HEARING
464 

(15) provide assurances that funds received under this title 

will be used— 

(A) to provide benefits and services to older individuals, 

giving priority to older individuals identified in paragraph 

(4)(A)(i); and 

(B) in compliance with the assurances specified in paragraph (13) and the limitations specified in section 212; 

(16) provide, to the extent feasible, for the furnishing of services under this Act, consistent with self-directed care; and 

(17) include information detailing how the area agency on 

aging will coordinate activities, and develop long-range emergency preparedness plans, with local and State emergency response agencies, relief organizations, local and State governments, and any other institutions that have responsibility for 

disaster relief service delivery. 

(b)(1) An area agency on aging may include in the area plan an 

assessment of how prepared the area agency on aging and service 

providers in the planning and service area are for any anticipated 

change in the number of older individuals during the 10-year period following the fiscal year for which the plan is submitted. 

(2) Such assessment may include— 

(A) the projected change in the number of older individuals 

in the planning and service area; 

(B) an analysis of how such change may affect such individuals, including individuals with low incomes, individuals with 

greatest economic need, minority older individuals, older individuals residing in rural areas, and older individuals with limited English proficiency; 

(C) an analysis of how the programs, policies, and services 

provided by such area agency can be improved, and how resource levels can be adjusted to meet the needs of the changing 

population of older individuals in the planning and service 

area; and 

(D) an analysis of how the change in the number of individuals age 85 and older in the planning and service area is expected to affect the need for supportive services. 

(3) An area agency on aging, in cooperation with government officials, State agencies, tribal organizations, or local entities, may 

make recommendations to government officials in the planning and 

service area and the State, on actions determined by the area agency to build the capacity in the planning and service area to meet 

the needs of older individuals for— 

(A) health and human services; 

(B) land use; 

(C) housing; 

(D) transportation; 

(E) public safety; 

(F) workforce and economic development; 

(G) recreation; 

(H) education; 

(I) civic engagement; 

(J) emergency preparedness; and 

(K) any other service as determined by such agency. 

(c) Each State, in approving area agency on aging plans under 

this section, shall waive the requirement described in paragraph 


emcdonald on DSK67QTVN1PROD with HEARING
465 

(2) of subsection (a) for any category of services described in such 

paragraph if the area agency on aging demonstrates to the State 

agency that services being furnished for such category in the area 

are sufficient to meet the need for such services in such area and 

had conducted a timely public hearing upon request. 

(d)(1) Subject to regulations prescribed by the Assistant Secretary, an area agency on aging designated under section 

305(a)(2)(A) or, in areas of a State where no such agency has been 

designated, the State agency, may enter into agreement with agencies administering programs under the Rehabilitation Act of 1973, 

and øtitles XIX and XX¿ title XIX of the Social Security Act for the 

purpose of developing and implementing plans for meeting the 

common need for transportation services of individuals receiving 

benefits under such Acts and older individuals participating in programs authorized by this title. 

(2) In accordance with an agreement entered into under paragraph (1), funds appropriated under this title may be used to purchase transportation services for older individuals and may be 

pooled with funds made available for the provision of transportation services under the Rehabilitation Act of 1973, and øtitles 

XIX and XX¿ title XIX of the Social Security Act. 

(e) An area agency on aging may not require any provider of 

legal assistance under this title to reveal any information that is 

protected by the attorney-client privilege. 

(f)(1) If the head of a State agency finds that an area agency on 

aging has failed to comply with Federal or State laws, including 

the area plan requirements of this section, regulations, or policies, 

the State may withhold a portion of the funds to the area agency 

on aging available under this title. 

(2)(A) The head of a State agency shall not make a final determination withholding funds under paragraph (1) without first affording the area agency on aging due process in accordance with 

procedures established by the State agency. 

(B) At a minimum, such procedures shall include procedures 

for— 

(i) providing notice of an action to withhold funds; 

(ii) providing documentation of the need for such action; and 

(iii) at the request of the area agency on aging, conducting 

a public hearing concerning the action. 

(3)(A) If a State agency withholds the funds, the State agency 

may use the funds withheld to directly administer programs under 

this title in the planning and service area served by the area agency on aging for a period not to exceed 180 days, except as provided 

in subparagraph (B). 

(B) If the State agency determines that the area agency on aging 

has not taken corrective action, or if the State agency does not approve the corrective action, during the 180-day period described in 

subparagraph (A), the State agency may extend the period for not 

more than 90 days. 

* * * * * * * 

LOW-INCOME HOME ENERGY ASSISTANCE ACT OF 1981 

* * * * * * * 


emcdonald on DSK67QTVN1PROD with HEARING
466 

TITLE XXVI—LOW-INCOME HOME ENERGY ASSISTANCE 

* * * * * * * 

APPLICATIONS AND REQUIREMENTS

SEC. 2605. (a)(1) Each State desiring to receive an allotment for 

any fiscal year under this title shall submit an application to the 

Secretary. Each such application shall be in such form as the Secretary shall require. Each such application shall contain assurances by the chief executive officer of the State that the State will 

meet the conditions enumerated in subsection (b). 

(2) After the expiration of the first fiscal year for which a State 

receives funds under this title, no funds shall be allotted to such 

State for any fiscal year under this title unless such State conduct 

public hearings with respect to the proposed use and distribution 

of funds to be provided under this title for such fiscal year. 

(b) As part of the annual application required by subsection (a), 

the chief executive officer of each State shall certify that the State 

agrees to— 

(1) use the funds available under this title to— 

(A) conduct outreach activities and provide assistance to 

low income households in meeting their home energy costs, 

particularly those with the lowest incomes that pay a high 

proportion of household income for home energy, consistent 

with paragraph (5); 

(B) intervene in energy crisis situations; 

(C) provide low-cost residential weatherization and other 

cost-effective energy-related home repair; and 

(D) plan, develop, and administer the State’s program 

under this title including leveraging programs, 

and the State agrees not to use such funds for any purposes 

other than those specified in this title; 

(2) make payments under this title only with respect to— 

(A) households in which 1 or more individuals are receiving— 

(i) assistance under the State program funded under 

part A of title IV of the Social Security Act; 

(ii) supplemental security income payments under 

title XVI of the Social Security Act; 

(iii) supplemental nutrition assistance program benefits under the Food and Nutrition Act of 2008; or 

(iv) payments under section 415, 521, 541, or 542 of 

title 38, United States Code, or under section 306 of 

the Veterans’ and Survivors’ Pension Improvement Act 

of 1978; or 

(B) households with incomes which do not exceed the 

greater of— 

(i) an amount equal to 150 percent of the poverty 

level for such State; or 

(ii) an amount equal to 60 percent of the State median income; 

except that a State may not exclude a household from eligibility in a fiscal year solely on the basis of household income if such income is less than 110 percent of the poverty 

level for such State, but the State may give priority to 


emcdonald on DSK67QTVN1PROD with HEARING
467 

those households with the highest home energy costs or 

needs in relation to household income; 

(3) conduct outreach activities designed to assure that eligible households, especially households with elderly individuals 

or disabled individuals, or both, and households with high 

home energy burdens, are made aware of the assistance available under this title, and any similar energy-related assistance 

available under subtitle B of title VI (relating to community 

services block grant program) or under any other provision of 

law which carries out programs which were administered 

under the Economic Opportunity Act of 1964 before the date of 

the enactment of this Act; 

(4) coordinate its activities under this title with similar and 

related programs administered by the Federal Government and 

such State, particularly low-income energy-related programs 

under subtitle B of title VI (relating to community services 

block grant program), under the supplemental security income 

program, under part A of title IV of the Social Security Act, 

øunder title XX of the Social Security Act,¿ under the low-income weatherization assistance program under title IV of the 

Energy Conservation and Production Act, or under any other 

provision of law which carries out programs which were administered under the Economic Opportunity Act of 1964 before the 

date of the enactment of this Act; 

(5) provide, in a timely manner, that the highest level of assistance will be furnished to those households which have the 

lowest incomes and the highest energy costs or needs in relation to income, taking into account family size, except that the 

State may not differentiate in implementing this section between the households described in clauses (2)(A) and (2)(B) of 

this subsection; 

(6) to the extent it is necessary to designate local administrative agencies in order to carry out the purposes of this title, to 

give special consideration, in the designation of such agencies, 

to any local public or private nonprofit agency which was receiving Federal funds under any low-income energy assistance 

program or weatherization program under the Economic Opportunity Act of 1964 or any other provision of law on the day 

before the date of the enactment of this Act, except that— 

(A) the State shall, before giving such special consideration, determine that the agency involved meets program 

and fiscal requirements established by the State; and 

(B) if there is no such agency because of any change in 

the assistance furnished to programs for economically disadvantaged persons, then the State shall give special consideration in the designation of local administrative agencies to any successor agency which is operated in substantially the same manner as the predecessor agency which 

did receive funds for the fiscal year preceding the fiscal 

year for which the determination is made; 

(7) if the State chooses to pay home energy suppliers directly, establish procedures to— 

(A) notify each participating household of the amount of 

assistance paid on its behalf; 


emcdonald on DSK67QTVN1PROD with HEARING
468 

(B) assure that the home energy supplier will charge the 

eligible household, in the normal billing process, the difference between the actual cost of the home energy and 

the amount of the payment made by the State under this 

title; 

(C) assure that the home energy supplier will provide assurances that any agreement entered into with a home energy supplier under this paragraph will contain provisions 

to assure that no household receiving assistance under this 

title will be treated adversely because of such assistance 

under applicable provisions of State law or public regulatory requirements; and 

(D) ensure that the provision of vendored payments remains at the option of the State in consultation with local 

grantees and may be contingent on unregulated vendors 

taking appropriate measures to alleviate the energy burdens of eligible households, including providing for agreements between suppliers and individuals eligible for benefits under this Act that seek to reduce home energy costs, 

minimize the risks of home energy crisis, and encourage 

regular payments by individuals receiving financial assistance for home energy costs; 

(8) provide assurances that (A) the State will not exclude 

households described in clause (2)(B) of this subsection from 

receiving home energy assistance benefits under clause (2), and 

(B) the State will treat owners and renters equitably under the 

program assisted under this title; 

(9) provide that— 

(A) the State may use for planning and administering 

the use of funds under this title an amount not to exceed 

10 percent of the funds payable to such State under this 

title for a fiscal year; and 

(B) the State will pay from non-Federal sources the remaining costs of planning and administering the program 

assisted under this title and will not use Federal funds for 

such remaining costs (except for the costs of the activities 

described in paragraph (16)); 

(10) provide that such fiscal control and fund accounting procedures will be established as may be necessary to assure the 

proper disbursal of and accounting for Federal funds paid to 

the State under this title, including procedures for monitoring 

the assistance provided under this title, and provide that the 

State will comply with the provisions of chapter 75 of title 31, 

United States Code (commonly known as the ‘‘Single Audit 

Act’’); 

(11) permit and cooperate with Federal investigations undertaken in accordance with section 2608; 

(12) provide for timely and meaningful public participation 

in the development of the plan described in subsection (c); 

(13) provide an opportunity for a fair administrative hearing 

to individuals whose claims for assistance under the plan described in subsection (c) are denied or are not acted upon with 

reasonable promptness; 

(14) cooperate with the Secretary with respect to data collecting and reporting under section 2610; 


emcdonald on DSK67QTVN1PROD with HEARING
469 

(15) beginning in fiscal year 1992, provide, in addition to 

such services as may be offered by State Departments of Public 

Welfare at the local level, outreach and intake functions for crisis situations and heating and cooling assistance that is administered by additional State and local governmental entities 

or community-based organizations (such as community action 

agencies, area agencies on aging, and not-for-profit neighborhood-based organizations), and in States where such organizations do not administer intake functions as of September 30, 

1991, preference in awarding grants or contracts for intake 

services shall be provided to those agencies that administer the 

low-income weatherization or energy crisis intervention programs; and 

(16) use up to 5 percent of such funds, at its option, to provide services that encourage and enable households to reduce 

their home energy needs and thereby the need for energy assistance, including needs assessments, counseling, and assistance with energy vendors, and report to the Secretary concerning the impact of such activities on the number of households served, the level of direct benefits provided to those 

households, and the number of households that remain 

unserved. 

The Secretary may not prescribe the manner in which the States 

will comply with the provisions of this subsection. The Secretary 

shall issue regulations to prevent waste, fraud, and abuse in the 

programs assisted by this title. Not later than 18 months after the 

date of the enactment of the Low-Income Home Energy Assistance 

Amendments of 1994, the Secretary shall develop model performance goals and measurements in consultation with State, territorial, tribal, and local grantees, that the States may use to assess 

the success of the States in achieving the purposes of this title. The 

model performance goals and measurements shall be made available to States to be incorporated, at the option of the States, into 

the plans for fiscal year 1997. The Secretary may request data relevant to the development of model performance goals and measurements. 

(c)(1) As part of the annual application required in subsection (a), 

the chief executive officer of each State shall prepare and furnish 

to the Secretary, in such format as the Secretary may require, a 

plan which— 

(A) describes the eligibility requirements to be used by the 

State for each type of assistance to be provided under this title, 

including criteria for designating an emergency under section 

2604(c); 

(B) describes the benefit levels to be used by the State for 

each type of assistance including assistance to be provided for 

emergency crisis intervention and for weatherization and other 

energy-related home repair; 

(C) contains estimates of the amount of funds the State will 

use for each of the programs under such plan and describes the 

alternative use of funds reserved under section 2604(c) in the 

event any portion of the amount so reserved is not expended 

for emergencies; 

(D) describes weatherization and other energy-related home 

repair the State will provide under subsection (k), including 


emcdonald on DSK67QTVN1PROD with HEARING
470 

any steps the State will take to address the weatherization and 

energy-related home repair needs of households that have high 

home energy burdens, and describes any rules promulgated by 

the Department of Energy for administration of its Low Income 

Weatherization Assistance Program which the State, to the extent permitted by the Secretary to increase consistency between federally assisted programs, will follow regarding the 

use of funds provided under this title by the State for such 

weatherization and energy-related home repairs and improvements; 

(E) describes any steps that will be taken (in addition to 

those necessary to carry out the assurance contained in paragraph (5) of subsection (b)) to target assistance to households 

with high home energy burdens; 

(F) describes how the State will carry out assurances in 

clauses (3), (4), (5), (6), (7), (8), (10), (12), (13), and (15) of subsection (b); 

(G) states, with respect to the 12-month period specified by 

the Secretary, the number and income levels of households 

which apply and the number which are assisted with funds 

provided under this title, and the number of households so assisted with— 

(i) one or more members who had attained 60 years of 

age; 

(ii) one or more members who were disabled; and 

(iii) one or more young children; and 

(H) contains any other information determined by the Secretary to be appropriate for purposes of this title. 

The chief executive officer may revise any plan prepared under this 

paragraph and shall furnish the revised plan to the Secretary. 

(2) Each plan prepared under paragraph (1) and each substantial 

revision thereof shall be made available for public inspection within 

the State involved in such a manner as will facilitate timely and 

meaningful review of, and comment upon, such plan or substantial 

revision. 

(3) Not later than April 1 of each fiscal year the Secretary shall 

make available to the States a model State plan format that may 

be used, at the option of each State, to prepare the plan required 

under paragraph (1) for the next fiscal year. 

(d) The State shall expend funds in accordance with the State 

plan under this title or in accordance with revisions applicable to 

such plan. 

(e) Each State shall, in carrying out the requirements of subsection (b)(10), obtain financial and compliance audits of any funds 

which the State receives under this title. Such audits shall be made 

public within the State on a timely basis. The audits shall be conducted in accordance with chapter 75 of title 31, United States 

Code. 

(f)(1) Notwithstanding any other provision of law unless enacted 

in express limitation of this paragraph, the amount of any home 

energy assistance payments or allowances provided directly to, or 

indirectly for the benefit of, an eligible household under this title 

shall not be considered income or resources of such household (or 

any member thereof) for any purpose under any Federal or State 

law, including any law relating to taxation, supplemental nutrition 


emcdonald on DSK67QTVN1PROD with HEARING
471 

assistance program benefits, public assistance, or welfare programs. 

(2) For purposes of paragraph (1) of this subsection and for purposes of determining any excess shelter expense deduction under 

section 5(e) of the Food and Nutrition Act of 2008 (7 U.S.C. 

2014(e))— 

(A) the full amount of such payments or allowances shall be 

deemed to be expended by such household for heating or cooling expenses, without regard to whether such payments or allowances are provided directly to, or indirectly for the benefit 

of, such household, except that, for purposes of the supplemental nutrition assistance program established under the 

Food and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.), such 

payments or allowances were greater than $20 annually, consistent with section 5(e)(6)(C)(iv)(I) of that Act (7 U.S.C. 

2014(e)(6)(C)(iv)(I)), as determined by the Secretary of Agriculture; and 

(B) no distinction may be made among households on the 

basis of whether such payments or allowances are provided directly to, or indirectly for the benefit of, any of such households. 

(g) The State shall repay to the United States amounts found not 

to have been expended in accordance with this title or the Secretary may offset such amounts against any other amount to which 

the State is or may become entitled under this title. 

(h) The Comptroller General of the United States shall, from 

time to time evaluate the expenditures by States of grants under 

this title in order to assure that expenditures are consistent with 

the provisions of this title and to determine the effectiveness of the 

State in accomplishing the purposes of this title. 

(i) A household which is described in subsection (b)(2)(A) solely 

by reason of clause (ii) thereof shall not be treated as a household 

described in subsection (b)(2) if the eligibility of the household is 

dependent upon— 

(1) an individual whose annual supplemental security income 

benefit rate is reduced pursuant to section 1611(e)(1) of the Social Security Act by reason of being in an institution receiving 

payments under title XIX of the Social Security Act with respect to such individual; 

(2) an individual to whom the reduction specified in section 

1612(a)(2)(A)(i) of the Social Security Act applies; or 

(3) a child described in section 1614(f)(2) of the Social Security Act who is living together with a parent, or the spouse of 

a parent, of the child. 

(j) In verifying income eligibility for purposes of subsection 

(b)(2)(B), the State may apply procedures and policies consistent 

with procedures and policies used by the State agency administering programs under part A of title IV of the Social Security 

Act, øunder title XX of the Social Security Act,¿ under subtitle B 

of title VI of this Act (relating to community services block grant 

program), under any other provision of law which carries out programs which were administered under the Economic Opportunity 

Act of 1964 before the date of the enactment of this Act, or under 

other income assistance or service programs (as determined by the 

State). 


emcdonald on DSK67QTVN1PROD with HEARING
472 

(k)(1) Except as provided in paragraph (2), not more than 15 percent of the greater of— 

(A) the funds allotted to a State under this title for any fiscal 

year; or 

(B) the funds available to such State under this title for such 

fiscal year; 

may be used by the State for low-cost residential weatherization or 

other energy-related home repair for low-income households, particularly those low-income households with the lowest incomes that 

pay a high proportion of household income for home energy. 

(2)(A) If a State receives a waiver granted under subparagraph 

(B) for a fiscal year, the State may use not more than the greater 

of 25 percent of— 

(i) the funds allotted to a State under this title for such fiscal 

year; or 

(ii) the funds available to such State under this title for such 

fiscal year; 

for residential weatherization or other energy-related home repair 

for low-income households, particularly those low-income households with the lowest incomes that pay a high proportion of household income for home energy. 

(B) For purposes of subparagraph (A), the Secretary may grant 

a waiver to a State for a fiscal year if the State submits a written 

request to the Secretary after March 31 of such fiscal year and if 

the Secretary determines, after reviewing such request and any 

public comments, that— 

(i)(I) the number of households in the State that will receive 

benefits, other than weatherization and energy-related home 

repair, under this title in such fiscal year will not be fewer 

than the number of households in the State that received benefits, other than weatherization and energy-related home repair, 

under this title in the preceding fiscal year; 

(II) the aggregate amounts of benefits that will be received 

under this title by all households in the State in such fiscal 

year will not be less than the aggregate amount of such benefits that were received under this title by all households in the 

State in the preceding fiscal year; and 

(III) such weatherization activities have been demonstrated 

to produce measurable savings in energy expenditures by lowincome households; or 

(ii) in accordance with rules issued by the Secretary, the 

State demonstrates good cause for failing to satisfy the requirements specified in clause (i). 

(l)(1) Any State may use amounts provided under this title for 

the purpose of providing credits against State tax to energy suppliers who supply home energy at reduced rates to low-income 

households. 

(2) Any such credit provided by a State shall not exceed the 

amount of the loss of revenue to such supplier on account of such 

reduced rate. 

(3) Any certification for such tax credits shall be made by the 

State, but such State may use Federal data available to such State 

with respect to recipients of supplemental security income benefits 


emcdonald on DSK67QTVN1PROD with HEARING
473 

if timely delivery of benefits to households described in subsection 

(b) and suppliers will not be impeded by the use of such data. 

* * * * * * * 

CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP 

ASSISTANCE ACT OF 1985 

TITLE VI—CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP 

ASSISTANCE PROGRAM 

* * * * * * * 

øSEC. 602. GRANTS AUTHORIZED. 

øThe Secretary is authorized to make a grant for any fiscal year 

to any State receiving a grant under title XX of the Social Security 

Act for such fiscal year to enable such State to award scholarships 

to eligible individuals within the State who are candidates for the 

Child Development Associate credential.¿ 

* * * * * * * 

SECTION 3 OF THE ASSISTED SUICIDE FUNDING 

RESTRICTION ACT OF 1997 

SEC. 3. RESTRICTION ON USE OF FEDERAL FUNDS UNDER HEALTH 

CARE PROGRAMS. 

(a) RESTRICTION ON FEDERAL FUNDING OF HEALTH CARE SERV- ICES.—Subject to subsection (b), no funds appropriated by Congress 

for the purpose of paying (directly or indirectly) for the provision 

of health care services may be used— 

(1) to provide any health care item or service furnished for 

the purpose of causing, or for the purpose of assisting in causing, the death of any individual, such as by assisted suicide, 

euthanasia, or mercy killing; 

(2) to pay (directly, through payment of Federal financial 

participation or other matching payment, or otherwise) for 

such an item or service, including payment of expenses relating to such an item or service; or 

(3) to pay (in whole or in part) for health benefit coverage 

that includes any coverage of such an item or service or of any 

expenses relating to such an item or service. 

(b) CONSTRUCTION AND TREATMENT OF CERTAIN SERVICES.— 

Nothing in subsection (a), or in any other provision of this Act (or 

in any amendment made by this Act), shall be construed to apply 

to or to affect any limitation relating to— 

(1) the withholding or withdrawing of medical treatment or 

medical care; 

(2) the withholding or withdrawing of nutrition or hydration; 

(3) abortion; or 

(4) the use of an item, good, benefit, or service furnished for 

the purpose of alleviating pain or discomfort, even if such use 

may increase the risk of death, so long as such item, good, benefit, or service is not also furnished for the purpose of causing, 

or the purpose of assisting in causing, death, for any reason. 


emcdonald on DSK67QTVN1PROD with HEARING
474 

(c) LIMITATION ON FEDERAL FACILITIES AND EMPLOYEES.—Subject 

to subsection (b), with respect to health care items and services furnished— 

(1) by or in a health care facility owned or operated by the 

Federal government, or 

(2) by any physician or other individual employed by the 

Federal government to provide health care services within the 

scope of the physician’s or individual’s employment, no such 

item or service may be furnished for the purpose of causing, or 

for the purpose of assisting in causing, the death of any individual, such as by assisted suicide, euthanasia, or mercy killing. 

(d) LIST OF PROGRAMS TO WHICH RESTRICTIONS APPLY.— 

(1) FEDERAL HEALTH CARE FUNDING PROGRAMS.—Subsection 

(a) applies to funds appropriated under or to carry out the following: 

(A) MEDICARE PROGRAM.—Title XVIII of the Social Security Act. 

(B) MEDICAID PROGRAM.—Title XIX of the Social Security 

Act. 

ø(C) TITLE XX SOCIAL SERVICES BLOCK GRANT.—Title XX 

of the Social Security Act.¿ 

ø(D)¿ (C) MATERNAL AND CHILD HEALTH BLOCK GRANT

PROGRAM.—Title V of the Social Security Act. 

ø(E)¿ (D) PUBLIC HEALTH SERVICE ACT.—The Public 

Health Service Act. 

ø(F)¿ (E) INDIAN HEALTH CARE IMPROVEMENT ACT.—The 

Indian Health Care Improvement Act. 

ø(G)¿ (F) FEDERAL EMPLOYEES HEALTH BENEFITS PROGRAM.—Chapter 89 of title 5, United States Code. 

ø(H)¿ (G) MILITARY HEALTH CARE SYSTEM (INCLUDING

TRICARE AND CHAMPUS PROGRAMS).—Chapter 55 of title 10, 

United States Code. 

ø(I)¿ (H) VETERANS MEDICAL CARE.—Chapter 17 of title 

38, United States Code. 

ø(J)¿ (I) HEALTH SERVICES FOR PEACE CORPS VOLUNTEERS.—Section 5(e) of the Peace Corps Act (22 U.S.C. 

2504(e)). 

ø(K)¿ (J) MEDICAL SERVICES FOR FEDERAL PRISONERS

Section 4005(a) of title 18, United States Code. 

(2) FEDERAL FACILITIES AND PERSONNEL.—The provisions of 

subsection (c) apply to facilities and personnel of the following: 

(A) MILITARY HEALTH CARE SYSTEM.—The Department of 

Defense operating under chapter 55 of title 10, United 

States Code. 

(B) VETERANS MEDICAL CARE.—The Veterans Health Administration of the Department of Veterans Affairs. 

(C) PUBLIC HEALTH SERVICE.—The Public Health Service. 

(3) NONEXCLUSIVE LIST.—Nothing in this subsection shall be 

construed as limiting the application of subsection (a) to the 

programs specified in paragraph (1) or the application of subsection (c) to the facilities and personnel specified in paragraph 

(2). 


emcdonald on DSK67QTVN1PROD with HEARING
(475) 

VII. DISSENTING VIEWS 

With the economy still recovering and hardworking Americans 

feeling left behind, we should be focusing in our Committee on proposals to grow the economy, create good-paying jobs, and strengthen the programs that reduce poverty and protect children and seniors, not tearing those very programs apart. This bill was part of 

a misguided effort to win support from extreme, right-wing Republicans for their party’s budget resolution. Committee Democrats 

strongly oppose both this specific bill and the general tactic of appeasing hardliners by offering legislation that harms seniors, children, and Americans trying to work their way out of poverty and 

obtain health coverage for their families. 

We strongly oppose H.R. 4724, which would eliminate the Social 

Services Block Grant (SSBG). SSBG helps provide critical services 

to nearly 30 million children, seniors, and individuals with disabilities. If H.R. 4724 were enacted, it would leave gaping holes in 

state and local budgets for services such as child welfare, elder 

abuse prevention, child care, and independent living services like 

home-delivered meals for seniors and persons with disabilities. For 

example, in 2013, SSBG provided close to a third of the total investment, from all sources, in child abuse prevention and intervention. It was 40 percent of total funding to prevent elder abuse. And 

it provided services to nearly 3 million seniors and disabled Americans. 

SSBG is not ‘‘duplicating’’ services Americans receive from other 

programs as the Majority claims. Rather, it is filling gaps created 

by the Majority’s long-time practice of under-funding anti-poverty 

tools and aid to vulnerable people. SSBG also allows states to coordinate related programs. As the American Public Human Services Association, which represents state agency directors, wrote to 

our Committee: ‘‘Many programs rely on SSBG funding almost exclusively, such as adult protective services and meal delivery services, while others use it as a means by which to braid funds such 

as child welfare and child care services.’’ 

For example, the Majority argues that it is duplicative for 30 

states to use SSBG to fund child care assistance, because the Child 

Care Development Fund (CCDF) also funds child care assistance. 

However, the Congressional Research Service estimates that because of funding shortfalls, only 17 percent of eligible families receive CCDF child care subsidies. SSBG is not ‘‘duplicating’’ child 

care—it ensures child care for four million children who would otherwise not have a safe place to be while their parents are at work. 

The Majority’s change of heart about SSBG, a block grant created under the leadership of President Ronald Reagan and supported by Republicans for many years, is a good illustration of how 

block grants are used to make it easier to cut programs and funding. Committee Democrats find particularly hypocritical the MajorVerDate Sep 11 2014 04:29 Mar 26, 2016 Jkt 099558 PO 00000 Frm 00481 Fmt 6604 Sfmt 6604 E:\HR\OC\HR462.XXX HR462

emcdonald on DSK67QTVN1PROD with HEARING
476 

ity’s claim that SSBG is too flexible and not accountable enough, 

given that it is just the kind of highly flexible, multi-purpose block 

grant Republicans have proposed to replace effective anti-poverty 

programs like Medicaid and the Supplemental Nutrition Assistance 

Program (SNAP). If the Majority is genuinely concerned about 

making SSBG more accountable, we suggest they consider setting 

aside a small portion of SSBG funds for research and evaluation, 

as the Administration has proposed more than once without any 

action from Congress. 

Once again, the Majority is asking seniors and disabled Americans who are trying to live independently, parents who are trying 

to make a better life for their families, and children and elders who 

are at risk of abuse to pay the price for their inability to govern 

effectively. Americans of all ages deserve better than H.R. 4724. 

SANDER M. LEVIN, 

Ranking Member. 

Æ 


emcdonald on DSK67QTVN1PROD with HEARING