```

[House Report 114-462]
[From the U.S. Government Publishing Office]

114th Congress  }                                      {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session     }                                      {       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]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

 March 23 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

114th Congress  }                                      {        Report
                        HOUSE OF REPRESENTATIVES
 2d Session     }                                      {       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]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

 March 23 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed
                                   ______

                         U.S. GOVERNMENT PUBLISHING OFFICE 

99-558                         WASHINGTON : 2016               
              
              

              
              
              
              
              
              
              
              
              
                                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

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
                  (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''.
          (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 federally-funded 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 described 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 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\
---------------------------------------------------------------------------
    \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.

    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.
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------
    \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.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \5\Ibid.
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------
    \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.
    \7\Government 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.
---------------------------------------------------------------------------

Meals on wheels

    Seventeen States reported spending a small portion of their 
SSBG funds on home-delivered meals. According to the annual 
report 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\
---------------------------------------------------------------------------
    \8\Congressional Research Service. Older Americans Act: Funding 
Formulas (Report RS22549). March 19, 2015.
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \9\Meals 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
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
    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.

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\
---------------------------------------------------------------------------
    \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 
    \13\Multiple 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
---------------------------------------------------------------------------

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\
---------------------------------------------------------------------------
    \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 
---------------------------------------------------------------------------
    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 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\
---------------------------------------------------------------------------
    \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/CDOC-110hdoc123.pdf
---------------------------------------------------------------------------

                         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.
---------------------------------------------------------------------------
    \ 17\Human Resources Subcommittee Discusses Need to Better 
Coordinate Dozens of Anti-Poverty 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/
---------------------------------------------------------------------------

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.

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 assistance 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.
---------------------------------------------------------------------------
    \18\Fiscal 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.
---------------------------------------------------------------------------

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
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 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 Pay-As-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 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.

  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

           *       *       *       *       *       *       *

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 Purposes.--
          (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.
                  (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.
                          (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 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, 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).
  (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 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 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 Self-Determination 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 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 non-medical 
                        professionals in assessing the health 
                        and well-being 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
          (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 
        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 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--
                                  (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 
                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 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 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 
                                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 in-State 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 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;
                  (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--
                  (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 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 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 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 well-being 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
          (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 well-being 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--
                  (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 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 child-placement 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 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 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
          (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
                  (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 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 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.
  (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).
  (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.
  (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 
                        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 
        assistance 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.
                          (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 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 
        non-Federal 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 excluded 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.
          (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 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
                  (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, 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)).
          (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),
                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--
                  (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) 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, 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.
  (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.
  (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;
          (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 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 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 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 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 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 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 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 sup- 
        porting 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 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 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
          (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 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 
        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 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;
          (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'',
                                  (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),
                                  (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
                                          (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 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 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;
                  (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, 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, 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 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
                  (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 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;
          (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 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);
                  (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 self-
                insured 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 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-of-sale 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 
        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 
                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-for-time 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
                  (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;
          (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--
                                  (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:
                          (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--
                  (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;
          (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) 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 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 
                        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 
        Federally-qualified 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
                  (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.
  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 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 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 
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 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 ineligible 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 requirement.--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).
                  (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 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 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 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 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 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.--
                  (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 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 determinations.--
                        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 
                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
                          (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 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 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).
  (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 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 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) 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
          (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--
          (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--
          (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.
  (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
          (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 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;
          (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 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 Federally-qualified 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
          (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 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 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 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 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 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 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 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 
                secretary.--
                          (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 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
          (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 
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;
          (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, intermediate 
        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 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 paragraph 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 self-employment, 
                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 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.
          (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 training, 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.
          (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 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 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--
                          (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 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 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 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.
                  (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.--
                  (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;
          (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.--
                  (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).
          (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.--
          (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.
                          (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 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.
                          (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 
                                                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, 
                                        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.
                                  (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.
                          (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;
                                          (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
                                          (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--
                                  (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.
                  (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 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.
  (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 
        benefiting 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 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 
                        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--
                                  (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 
                        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 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 
                benefits.--
                          (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 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 (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 
                individuals.--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 
                                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 
                                        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.--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 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 (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--
                          (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).

           *       *       *       *       *       *       *

                              ----------                              

          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 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.--
                          (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 temporary 
        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 
        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 long-term 
                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.--
                          (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.--
          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 
        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 
                review.--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 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.
          (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 
                        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 services 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 children.--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 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 
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, 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
                  (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 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 
                        (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.
                          (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--
                          (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 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 
        organizations.--
                  (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 
                                        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 
                                        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.
          (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.--
                  (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 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:
                                          (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 
                                        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 
                                        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 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 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.
                          (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.
  (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.--
                          (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
                          (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 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.
  (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 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.--
          (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
                          (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.
                  (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
                          (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.

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                    INDIAN CHILD WELFARE ACT OF 1978

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               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.

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                      TITLE 31, UNITED STATES CODE

           *       *       *       *       *       *       *
SUBTITLE III--FINANCIAL MANAGEMENT

           *       *       *       *       *       *       *

CHAPTER 38--ADMINISTRATIVE REMEDIES FOR FALSE CLAIMS AND STATEMENTS

           *       *       *       *       *       *       *

Sec. 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--
          (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);
          (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 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.
          (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 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.

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                      TITLE 40, UNITED STATES CODE

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SUBTITLE IV--APPALACHIAN REGIONAL DEVELOPMENT

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               CHAPTER 145--SPECIAL APPALACHIAN PROGRAMS

Subchapter I--PROGRAMS

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Sec. 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-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.
          (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 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 at-risk 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.

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                              ----------                              

                       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;
          (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;
          (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
                  (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 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 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.

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                              ----------                              

                      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, 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 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
          (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.

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                      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.

           *       *       *       *       *       *       *

      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 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--
                  (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--
                          (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 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;
                          (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 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;
          (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 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

           *       *       *       *       *       *       *
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 
                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--
                  (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 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--
          (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.
  (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;
          (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
          (III) such weatherization activities have been 
        demonstrated to produce measurable savings in energy 
        expenditures by low-income 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
          (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 
                program.--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.
          (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.
  (b) Limitation on Use of Grant for Administrative Purposes.--
          (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] 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)] (2) Applicable rules.--
                  [(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 [a 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.
                  [(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.
                          (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 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, 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).
  (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 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] administered or supervised 
        the administration of the State's services program 
        under [subtitle 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 [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 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 Self-Determination 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 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 non-medical 
                        professionals in assessing the health 
                        and well-being 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
          (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 
        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 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 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 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 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 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 
                                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 in-State 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 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;
                  (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--
                  (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 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 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 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 well-being 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
          (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 well-being 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--
                  (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 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 child-placement 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 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 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
          (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
                  (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 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 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.
  (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)] (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.
  [(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)] (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).
  [(4)] (3) For purposes of [paragraphs (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 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 
                        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 
        assistance 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.
                          (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 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 
        non-Federal 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] 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 XVIII[, 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.
  (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.
          (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 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
                  (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, 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)).
          (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),
                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--
                  (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) 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, 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.
  (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.
  (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, or
          [(3) any program receiving funds under subtitle 1 of 
        title XX or from an allotment to a State under such 
        subtitle, or]
          [(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;
                  (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
                  (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 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 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 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 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 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 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 sup- 
        porting 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 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 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
          (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] 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 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 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;
          (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'',
                                  (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),
                                  (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
                                          (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 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 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;
                  (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, 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, 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 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
                  (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 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;
          (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 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);
                  (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 self-
                insured 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 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-of-sale 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 
        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 
                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-for-time 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
                  (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;
          (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--
                                  (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:
                          (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--
                  (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;
          (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) 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 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 
                        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 
        Federally-qualified 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
                  (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.
  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 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 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 
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 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 ineligible 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 requirement.--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).
                  (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 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 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 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 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 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]  Exclusion.--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.--
                  (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 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 determinations.--
                        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 
                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
                          (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 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 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).
  (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 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 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) 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
          (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--
          (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--
          (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.
  (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
          (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 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;
          (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 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 Federally-qualified 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
          (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 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 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 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 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 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 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 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 
                secretary.--
                          (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 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--[BLOCK GRANTS TO STATES FOR 
  SOCIAL SERVICES]HEALTH PROFESSIONS DEMONSTRATIONS AND ENVIRONMENTAL 
                       HEALTH CONDITION DETECTION

    Subtitle A--[Block Grants to States for Social Services] Health 
Professions Demonstrations and Environmental Health Condition Detection

         [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
          [(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 
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;
          [(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, intermediate 
        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 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 paragraph 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 self-employment, 
                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 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.
          [(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 training, 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.
          [(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.]

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                              ----------                              

                     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 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--
                          (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 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 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 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.
                  (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.--
                  (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;
          (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.--
                  (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).
          (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.--
          (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.
                          (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 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.
                          (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 
                                                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, 
                                        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.
                                  (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.
                          (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;
                                          (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
                                          (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--
                                  (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.
                  (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 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.
  (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 
        benefiting 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 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 
                        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--
                                  (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 
                        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 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 
                benefits.--
                          (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 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 (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 
                individuals.--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 
                                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 
                                        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.--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 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 (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--
                          (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)] (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 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
                  (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.
                          (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 temporary 
        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 
        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 long-term 
                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.--
                          (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.--
          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 
        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 
                review.--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 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.
          (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 
                        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 services 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 children.--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 V[, 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 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 
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, 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
                  (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 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 
                        (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.
                          (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--
                          (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 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 
        organizations.--
                  (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 
                                        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 
                                        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.
          (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.--
                  (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 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:
                                          (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 
                                        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 
                                        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 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 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.
                          (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.
  (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.--
                          (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
                          (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 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.
  (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 [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.--
          (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
                          (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.
                  (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
                          (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.

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                    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] 
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 [titles 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.

           *       *       *       *       *       *       *

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                      TITLE 31, UNITED STATES CODE

           *       *       *       *       *       *       *
SUBTITLE III--FINANCIAL MANAGEMENT

           *       *       *       *       *       *       *

CHAPTER 38--ADMINISTRATIVE REMEDIES FOR FALSE CLAIMS AND STATEMENTS

           *       *       *       *       *       *       *

Sec. 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--
          (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)] (vi) benefits under the supplemental 
        nutrition assistance program (as defined in section 3 
        of the Food and Nutrition Act of 2008);
          [(viii)] (vii) benefits under chapters 11, 13, 15, 
        17, and 21 of title 38;
          [(ix)] (viii) benefits under the Black Lung Benefits 
        Act;
          [(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;
          [(xi)] (x) benefits under section 336 of the Older 
        Americans Act;
          [(xii)] (xi) any annuity or other benefit under the 
        Railroad Retirement Act of 1974;
          [(xiii)] (xii) benefits under the Richard B. Russell 
        National School Lunch Act;
          [(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;
          [(xv)] (xiv) benefits under the Low-Income Home 
        Energy Assistance Act of 1981; and
          [(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.
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--
                  (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 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.

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                      TITLE 40, UNITED STATES CODE

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SUBTITLE IV--APPALACHIAN REGIONAL DEVELOPMENT

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               CHAPTER 145--SPECIAL APPALACHIAN PROGRAMS

Subchapter I--PROGRAMS

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Sec. 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-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.
          (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] 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 at-risk 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.

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                              ----------                              

                       PUBLIC HEALTH SERVICE ACT

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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 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
                  (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 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 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.

           *       *       *       *       *       *       *

                              ----------                              

                      OLDER AMERICANS ACT OF 1965

           *       *       *       *       *       *       *
TITLE II--ADMINISTRATION ON AGING

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                      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, [XIX, 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,
          (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--
                  (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 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.

           *       *       *       *       *       *       *

      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 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--
                  (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--
                          (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 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;
                          (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 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;
          (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] 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 [titles 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.

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                              ----------                              

             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
                          (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--
                  (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 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--
          (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.
  (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;
          (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
          (III) such weatherization activities have been 
        demonstrated to produce measurable savings in energy 
        expenditures by low-income 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
          (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)] (C) Maternal and child health block 
                grant program.--Title V of the Social Security 
                Act.
                  [(E)] (D) Public health service act.--The 
                Public Health Service Act.
                  [(F)] (E) Indian health care improvement 
                act.--The Indian Health Care Improvement Act.
                  [(G)] (F) Federal employees health benefits 
                program.--Chapter 89 of title 5, United States 
                Code.
                  [(H)] (G) Military health care system 
                (including tricare and champus programs).--
                Chapter 55 of title 10, United States Code.
                  [(I)] (H) Veterans medical care.--Chapter 17 
                of title 38, United States Code.
                  [(J)] (I) Health services for peace corps 
                volunteers.--Section 5(e) of the Peace Corps 
                Act (22 U.S.C. 2504(e)).
                  [(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).

                         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 Majority'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.

                                  [all]
```