I

103D CONGRESS

2D SESSION H. R. 4414

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

families, require personal responsibility, and support State flexibility.

IN THE HOUSE OF REPRESENTATIVES

MAY 12, 1994

Mr. MCCURDY (for himself, Mr. WHEAT, Mr. CLEMENT, Mr. DARDEN, Mr.

DEAL, Ms. LONG, Mr. SWETT, Mr. TANNER, Mr. JOHNSON of Georgia,

Ms. LAMBERT, Mr. PAYNE of Virginia, Mr. BARLOW, Mr. SKELTON, Mr.

GORDON, Mr. MINGE, Mr. LIPINSKI, Mr. ORTON, Mr. BREWSTER, Mr.

MANN, Mr. KLINK, Mr. PETERSON of Minnesota, Mr. LAUGHLIN, Mr.

ROWLAND, Mr. PETE GEREN of Texas, Ms. KAPTUR, Mr. MONTGOMERY,

Mr. HAYES, and Mr. TAYLOR of Mississippi) introduced the following bill;

which was referred jointly to the Committees on Ways and Means, Agriculture, Energy and Commerce, Education and Labor, and the Judiciary

A BILL

To reconnect welfare families to the world of work, make

work pay, strengthen families, require personal responsibility, and support State flexibility.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Independence for Fam5 ilies Act of 1994’’.
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1 SEC. 2. TABLE OF CONTENTS.

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

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I—TIME-LIMITED TRANSITIONAL ASSISTANCE

Sec. 101. Limitation on duration of AFDC benefits.

Sec. 102. Job search requirement.

Sec. 103. Transitional child care benefits for persons who exhaust AFDC.

Sec. 104. Establishment of Federal data base.

TITLE II—MAKE WORK PAY

Subtitle A—Health Care

Sec. 201. Transitional medicaid benefits.

Subtitle B—Earned Income Tax Credit

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

recipients of AFDC, food stamps, and medicaid.

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

tax credit to be included on W–4 form.

Subtitle C—Child Care

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

Sec. 222. Increased Federal matching rate for child care costs of the 50 States

and the District of Columbia.

Sec. 223. Maintenance of effort.

Sec. 224. Notice of eligibility for transitional child care benefits required to be

provided to applicants for, and upon termination of, AFDC.

Sec. 225. Extension of eligibility for transitional child care benefits.

Sec. 226. Increased funding for at-risk child care.

Sec. 227. Authority to use certain child care funds for training.

Sec. 228. Transitional child care for 2-parent families.

Sec. 229. Sense of the Congress regarding the Child Care Development and

Block Grant Act.

Sec. 230. Use of child care funds to create child care jobs for welfare recipients.

Sec. 230A. Sense of the Congress regarding child care vouchers.

Subtitle D—AFDC Work Disregards

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

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

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

under AFDC-UP program.

Subtitle E—AFDC Asset Limitations

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

Sec. 242. Limited disregard of amounts saved for postsecondary education, the

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

or operation of a microenterprise.
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Sec. 243. Treatment of microenterprises.

TITLE III—THE WORK FIRST PROGRAM

Subtitle A—AFDC

Sec. 301. Work first program.

Sec. 302. Regulations.

Sec. 303. Applicability to States.

Subtitle B—Targeted Jobs Tax Credit

Sec. 311. Increase in minimum period of employment required to receive credit.

TITLE IV—FAMILY RESPONSIBILITY AND IMPROVED CHILD

SUPPORT ENFORCEMENT

Subtitle A—Enhancement of Ability to Identify and Locate Noncustodial

Parents

Sec. 401. Expansion of functions of Federal parent locator service.

Sec. 402. Expansion of data bases accessed by parent locator systems.

Sec. 403. National parent locator network.

Sec. 404. Private access to locate and enforcement services.

Subtitle B—Paternity Establishment

Sec. 411. Sense of the Congress.

Sec. 412. Availability of parenting social services for new fathers.

Sec. 413. AFDC benefits conditioned on cooperation in identifying noncustodial

parent.

Sec. 414. Increase in pass-through of collected child support to AFDC recipients.

Subtitle C—Improvement of Child Support Order Establishment Process

Sec. 421. National Child Support Guidelines Commission.

Subtitle D—Child Support Enforcement

Sec. 431. National reporting of new hires and child support information.

Sec. 432. Certain benefits subject to garnishment.

Sec. 433. Seizure of lottery winnings, settlements, payouts, awards, and bequests, and sale of forfeited property, to pay child support arrearages.

Sec. 434. Reporting of child support arrearages to credit bureaus.

Sec. 435. Liability of grandparents for financial support of children of their

minor children.

Sec. 436. Sense of the Congress regarding programs for noncustodial parents

unable to meet child support obligations.

TITLE V—TEEN PREGNANCY AND FAMILY STABILITY

Subtitle A—Federal Role

Sec. 501. State option not to deny AFDC for additional children.

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

Sec. 503. Task force to reduce teenage pregnancy.
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Sec. 504. Incentive for teen parents to attend school.

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

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

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

program for families in which both parents are teens.

Subtitle B—State Role

Sec. 511. Teenage pregnancy prevention and family stability.

Sec. 512. Availability of family planning services.

TITLE VI—PROGRAM SIMPLIFICATION

Subtitle A—Increased State Flexibility

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

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

Subtitle B—Coordination of AFDC and Food Stamp Programs

Sec. 611. Amendments to part A of title IV of the Social Security Act.

Sec. 612. Amendments to the Food Stamp Act of 1977.

Subtitle C—Fraud Reduction

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

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

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

programs under both the Social Security Act and health reform

legislation.

TITLE VII—FINANCING

Subtitle A—Ineligibility of Certain Aliens for Certain Social Services

Sec. 701. Certain aliens ineligible for aid to families with dependent children.

Sec. 702. Certain aliens ineligible for supplemental security income benefits.

Sec. 703. Illegal aliens not eligible for earned income tax credit.

Sec. 704. Disqualification of certain aliens to receive food stamp benefits.

Sec. 705. Certain aliens ineligible for medical assistance under medicaid.

Subtitle B—Other Provisions Relating to Aliens

Sec. 711. Sponsor responsibility for costs of general cash public assistance provided to an alien.

Sec. 712. Enforcement of affidavits of support or financial responsibility by

State and local governments providing assistance.

Sec. 713. Authority to States and localities to limit assistance to aliens and to

distinguish among classes of aliens in providing general public

assistance.

Sec. 714. Federal financial assistance to States for assistance to immigrants.

Subtitle C—Limitation on Emergency Assistance Expenditures

Sec. 721. Limitation on expenditures for emergency assistance.
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Subtitle D—Family Day Care Homes Program Improvements

Sec. 731. Improvement of operation of family or group day care homes located

in low- and moderate-income areas under the child and adult

care food program under the National School Lunch Act.

Subtitle E—Collection of Certain State and Local Taxes on Out-of-State

Sales

Sec. 741. Short title.

Sec. 742. Findings.

Sec. 743. Sense of Congress.

Sec. 744. Authority for collection of sales tax.

Sec. 745. Treatment of local sales taxes.

Sec. 746. Return and remittance requirements.

Sec. 747. Nondiscrimination and exemptions.

Sec. 748. Application of State law.

Sec. 749. Toll-free information service.

Sec. 750. Definitions.

Sec. 751. Effective date.

TITLE VIII—EFFECTIVE DATE

Sec. 801. Effective date.

1 TITLE I—TIME-LIMITED

2 TRANSITIONAL ASSISTANCE

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

4 Section 402(a) of the Social Security Act (42 U.S.C.

5 602(a)) is amended—

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

7 (44);

8 (2) by striking the period at the end of para9 graph (45) and inserting ‘‘; and’’; and

10 (3) by inserting after paragraph (45) the fol11 lowing:

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

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

14 that a family shall not be eligible for aid under the

15 State plan if a member of the family is prohibited
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1 from participating in the State program established

2 under part F by reason of section 487(c).’’.

3 SEC. 102. JOB SEARCH REQUIREMENT.

4 (a) IN GENERAL.—Section 402(a) of the Social Secu5 rity Act (42 U.S.C. 602(a)), as amended by section 101

6 of this Act, is amended—

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

8 (45);

9 (2) by striking the period at the end of para10 graph (46) and inserting ‘‘; and’’; and

11 (3) by inserting after paragraph (46) the fol12 lowing:

13 ‘‘(47) provide that participation in job search

14 activities shall be a condition of eligibility for aid

15 under the State plan, except during any period of

16 unsubsidized full-time employment in the private

17 sector.’’.

18 SEC. 103. TRANSITIONAL CHILD CARE BENEFITS FOR PER19 SONS WHO EXHAUST AFDC.

20 Section 402(g)(1)(A)(ii) of the Social Security Act

21 (42 U.S.C. 602(g)(1)(A)(ii)) is amended by inserting ‘‘or

22 subsection (a)(46)’’ before the period.
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1 SEC. 104. ESTABLISHMENT OF FEDERAL DATA BASE.

2 Section 402 of the Social Security Act (42 U.S.C.

3 602) is amended by inserting after subsection (c) the fol4 lowing:

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

6 data base of participants in State programs established

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

8 States for use in administering subsection (a)(46).’’.

9 TITLE II—MAKE WORK PAY

10 Subtitle A—Health Care

11 SEC. 201. TRANSITIONAL MEDICAID BENEFITS.

12 (a) EXTENSION OF MEDICAID ENROLLMENT FOR

13 FORMER AFDC RECIPIENTS FOR 1 ADDITIONAL YEAR.—

14 (1) IN GENERAL.—Section 1925(b)(1) of the

15 Social Security Act (42 U.S.C. 1396r–6(b)(1)) is

16 amended by striking the period at the end and in17 serting the following: ‘‘, and that the State shall

18 offer to each such family the option of extending

19 coverage under this subsection for any of the first 2

20 succeeding 6-month periods, in the same manner

21 and under the same conditions as the option of ex22 tending coverage under this subsection for the first

23 succeeding 6-month period.’’.

24 (2) CONFORMING AMENDMENTS.—Section

25 1925(b) of such Act (42 U.S.C. 1396r–6(b)) is

26 amended—
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1 (A) in the heading, by striking ‘‘EXTEN2 SION’’ and inserting ‘‘EXTENSIONS’’;

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

4 striking ‘‘REQUIREMENT’’ and inserting ‘‘IN

5 GENERAL’’;

6 (C) in paragraph (2)(B)(ii)—

7 (i) in the heading, by striking ‘‘PE8 RIOD’’ and inserting ‘‘PERIODS’’, and

9 (ii) by striking ‘‘in the period’’ and in10 serting ‘‘in each of the 6-month periods’’;

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

12 6-month period’’ and inserting ‘‘any 6-month

13 period’’;

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

15 extension period’’ and inserting ‘‘any extension

16 period’’; and

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

18 a 3-month period’’ and all that follows and in19 serting the following: ‘‘is, with respect to a par20 ticular 6-month additional extension period pro21 vided under this subsection, a 3-month period

22 beginning with the 1st or 4th month of such ex23 tension period.’’.

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

25 subsection (a) shall apply to calendar quarters beginning
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1 on or after October 1, 1996, without regard to whether

2 or not final regulations to carry out such amendments

3 have been promulgated by such date.

4 Subtitle B—Earned Income Tax

5 Credit

6 SEC. 211. NOTICE OF AVAILABILITY REQUIRED TO BE PRO7 VIDED TO APPLICANTS AND FORMER RECIPI8 ENTS OF AFDC, FOOD STAMPS, AND MEDIC9 AID.

10 (a) AFDC.—Section 402(a) of the Social Security

11 Act (42 U.S.C. 602(a)), as amended by sections 101 and

12 102(a) of this Act, is amended—

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

14 (46);

15 (2) by striking the period at the end of para16 graph (47) and inserting ‘‘; and’’; and

17 (3) by inserting after paragraph (47) the fol18 lowing:

19 ‘‘(48) provide that the State agency must pro20 vide written notice of the existence and availability

21 of the earned income credit under section 32 of the

22 Internal Revenue Code of 1986 to—

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

24 under the State plan, upon receipt of the appli25 cation; and
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1 ‘‘(B) any individual whose aid under the

2 State plan is terminated, in the notice of termi3 nation of benefits.’’.

4 (b) FOOD STAMPS.—Section 11(e) of the Food

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

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

7 end;

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

9 the end and inserting ‘‘; and’’; and

10 (3) by inserting after paragraph (25) the fol11 lowing:

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

13 food stamp benefits, and whenever such benefits are

14 terminated with respect to a household, the State

15 agency shall provide to each member of such house16 hold notice of—

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

18 tax credit under section 32 of the Internal Rev19 enue Code of 1986; and

20 ‘‘(B) the fact that such credit may be ap21 plicable to such member.’’.

22 (c) MEDICAID.—Section 1902(a) of the Social Secu23 rity Act (42 U.S.C. 1396a(a)) is amended—

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

25 (61);
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1 (2) by striking the period at the end of para2 graph (62) and inserting ‘‘; and’’; and

3 (3) by adding at the end the following new

4 paragraph:

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

6 of the existence and availability of the earned income

7 tax credit under section 32 of the Internal Revenue

8 Code of 1986 to each individual applying for medical

9 assistance under the State plan and to each individ10 ual whose eligibility for medical assistance under the

11 State plan is terminated.’’.

12 SEC. 212. NOTICE OF AVAILABILITY OF EARNED INCOME

13 TAX CREDIT AND DEPENDENT CARE TAX

14 CREDIT TO BE INCLUDED ON W–4 FORM.

15 Section 11114 of the Omnibus Budget Reconciliation

16 Act of 1990 (relating to program to increase public aware17 ness) is amended by adding at the end the following new

18 sentence: ‘‘Such means shall include printing a notice of

19 the availability of such credits on the forms used by em20 ployees to determine the proper number of withholding ex21 emptions under chapter 24 of the Internal Revenue Code

22 of 1986.’’.
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1 Subtitle C—Child Care

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

3 HIGH-INCOME TAXPAYERS INELIGIBLE FOR

4 CREDIT.

5 (a) CREDIT TO BE REFUNDABLE.—

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

7 Revenue Code of 1986 (relating to expenses for

8 household and dependent care services necessary for

9 gainful employment) is hereby moved to subpart C

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

11 Code (relating to refundable credits) and inserted

12 after section 34.

13 (2) TECHNICAL AMENDMENTS.—

14 (A) Section 35 of such Code is redesig15 nated as section 36.

16 (B) Section 21 of such Code is redesig17 nated as section 35.

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

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

20 amended by striking ‘‘this chapter’’ and insert21 ing ‘‘this subtitle’’.

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

23 of such Code is amended by striking ‘‘section

24 21(e)’’ and inserting ‘‘section 35(e)’’.
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1 (E) Paragraph (2) of section 129(b) of

2 such Code is amended by striking ‘‘section

3 21(d)(2)’’ and inserting ‘‘section 35(d)(2)’’.

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

5 such Code is amended by striking ‘‘section

6 21(b)(2)’’ and inserting ‘‘section 35(b)(2)’’.

7 (G) Subsection (e) of section 213 of such

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

9 inserting ‘‘section 35’’.

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

11 title 31, United States Code, is amended by in12 serting before the period ‘‘or from section 35 of

13 such Code’’.

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

15 part IV of subchapter A of chapter 1 of such

16 Code is amended by striking the item relating

17 to section 35 and inserting the following:

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

necessary for gainful employment.

‘‘Sec. 36. Overpayments of tax.’’.

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

19 such part IV is amended by striking the item

20 relating to section 21.

21 (b) HIGHER-INCOME TAXPAYERS INELIGIBLE FOR

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

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

24 the end the following new paragraph:
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1 ‘‘(3) PHASEOUT OF CREDIT FOR HIGHER-IN2 COME TAXPAYERS.—The amount of the credit which

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

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

5 amount which bears the same ratio to such amount

6 of credit as the excess of the taxpayer’s adjusted

7 gross income for the taxable year over $110,000

8 bears to $10,000. Any reduction determined under

9 the preceding sentence which is not a multiple of

10 $10 shall be rounded to the nearest multiple of

11 $10.’’.

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

13 this section shall apply to taxable years beginning after

14 December 31, 1995.

15 SEC. 222. INCREASED FEDERAL MATCHING RATE FOR

16 CHILD CARE COSTS OF THE 50 STATES AND

17 THE DISTRICT OF COLUMBIA.

18 Section 402(g)(3)(A)(i) of the Social Security Act (42

19 U.S.C. 602(g)(3)(A)(i)) is amended by striking ‘‘the Fed20 eral medical assistance percentage (as defined in section

21 1118)’’ and inserting ‘‘80 percent’’.

22 SEC. 223. MAINTENANCE OF EFFORT.

23 Section 403 of the Social Security Act (42 U.S.C.

24 603) is amended by adding at the end the following:
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1 ‘‘(o) Notwithstanding any other provision of this

2 part, the amount otherwise payable to a State under this

3 part for a fiscal year shall be reduced by the percentage

4 (if any) by which the total expenditures by the State under

5 this part for the fiscal year does not exceed the average

6 annual expenditures by the State under this part during

7 fiscal years 1994, 1995, and 1996.’’.

8 SEC. 224. NOTICE OF ELIGIBILITY FOR TRANSITIONAL

9 CHILD CARE BENEFITS REQUIRED TO BE

10 PROVIDED TO APPLICANTS FOR, AND UPON

11 TERMINATION OF, AFDC.

12 Section 402(a) of the Social Security Act (42 U.S.C.

13 602(a)), as amended by sections 101, 102(a), and 211(a)

14 of this Act, is amended—

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

16 (47);

17 (2) by striking the period at the end of para18 graph (48);

19 (3) by inserting after paragraph (48) the fol20 lowing:

21 ‘‘(49) provide that the State agency must pro22 vide written notice that, upon termination of aid

23 under the State plan, a family may be eligible for

24 child care benefits under section 402(g)(1)(A)(ii),

25 to—
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1 ‘‘(A) any individual who applies for aid

2 under the State plan, upon receipt of the appli3 cation; and

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

5 State plan is terminated, in the notice of termi6 nation of benefits.’’.

7 SEC. 225. EXTENSION OF ELIGIBILITY FOR TRANSITIONAL

8 CHILD CARE BENEFITS.

9 Section 402(g)(1)(A) of the Social Security Act (42

10 U.S.C. 602(g)(1)(A)) is amended—

11 (1) in clause (iii), by striking ‘‘12’’ and insert12 ing ‘‘24’’; and

13 (2) in clause (iv), by striking ‘‘3 of the 6’’ and

14 inserting ‘‘1 of the ‘‘24’’.

15 SEC. 226. INCREASED FUNDING FOR AT-RISK CHILD CARE.

16 Section 403(n) of the Social Security Act (42 U.S.C.

17 603(n)) is amended—

18 (1) in paragraph (1)(A), by striking ‘‘the Fed19 eral medical assistance percentage (as defined in sec20 tion 1905(b))’’ and inserting ‘‘80 percent’’; and

21 (2) in paragraph (2)(B)—

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

23 (iv); and

24 (B) by striking clause (v) and inserting the

25 following:
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1 ‘‘(v) $300,000,000 for each of fiscal years

2 1995, 1996, and 1997;

3 ‘‘(vi) $500,000,000 for fiscal year 1998;

4 ‘‘(vii) $1,000,000,000 for fiscal year 1999;

5 ‘‘(viii) $1,500,000,000 for fiscal year 2000; and

6 ‘‘(vi) $2,000,000,000 for fiscal year 2001.’’.

7 SEC. 227. AUTHORITY TO USE CERTAIN CHILD CARE FUNDS

8 FOR TRAINING.

9 (a) TRANSITIONAL CHILD CARE FUNDS.—Section

10 402(g)(1)(A)(ii) of the Social Security Act (42 U.S.C.

11 602(g)(1)(A)(ii)) is amended by inserting ‘‘training or’’

12 before ‘‘employment’’ the first place such term appears.

13 (b) AT-RISK CHILD CARE FUNDS.—Section

14 402(i)(1)(B) of such Act (42 U.S.C. 602(i)(1)(B)) is

15 amended by inserting ‘‘or receive training for work’’ before

16 the semicolon.

17 SEC. 228. TRANSITIONAL CHILD CARE FOR 2–PARENT FAMI18 LIES.

19 Section 402(g)(1)(A)(i) of the Social Security Act (42

20 U.S.C. 602(g)(1)(A)(i)) is amended—

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

22 (I);

23 (2) by striking the period at the end of

24 subclause (II) and inserting ‘‘; and’’; and

25 (3) by adding at the end the following:
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1 ‘‘(III) for each 2-parent family with a depend2 ent child requiring such care, if 1 parent in the fam3 ily is employed and the other parent in the family

4 is not available to provide such care because such

5 other parent is employed or receiving training, to the

6 extent that such care is determined by the State

7 agency to be necessary for either parent to accept

8 employment, remain employed, or receive such train9 ing;’’.

10 SEC. 229. SENSE OF THE CONGRESS REGARDING THE

11 CHILD CARE DEVELOPMENT AND BLOCK

12 GRANT ACT.

13 It is the sense of the Congress that the Child Care

14 Development and Block Grant Act should be reauthorized

15 to allow States greater flexibility in the use of their funds

16 to strengthen child care quality and to increase supply.

17 SEC. 230. USE OF CHILD CARE FUNDS TO CREATE CHILD

18 CARE JOBS FOR WELFARE RECIPIENTS.

19 Section 402(g)(3) of the Social Security Act (42

20 U.S.C. 602(g)(3)) is amended by adding at the end the

21 following:

22 ‘‘(C) Amounts expended by a State with a plan ap23 proved under part G for the creation of employment in

24 the field of child care (in accordance with State licensing

25 requirements) for recipients of aid under the State plan
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1 approved under this part shall be considered amounts ex2 pended for child care pursuant to paragraph (1), and sub3 paragraph (B) of this paragraph shall not apply to such

4 amounts.’’.

5 SEC. 230A. SENSE OF THE CONGRESS REGARDING CHILD

6 CARE VOUCHERS.

7 It is the sense of the Congress that—

8 (1) the States should institute a system under

9 which—

10 (A) vouchers are provided to each family

11 eligible for child care services under subsections

12 (g) and (i) of section 402 of the Social Security

13 Act, under programs operated with funds pro14 vided under title XX of the Social Security Act,

15 or under the Child Care Development and

16 Block Grant Act, which may be used by the

17 family to purchase child care services;

18 (B) 1 voucher is provided to the family for

19 each child in the family with respect to whom

20 child care services may be provided;

21 (C) the dollar value of each voucher is set

22 at a level that is greater than the dollar value

23 of the dependent care disregard under section

24 402(a)(8)(A)(iii) of the Social Security Act, and
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1 is adjusted to reflect regional differences in the

2 kinds and costs of such services;

3 (D) a board consisting of child care provid4 ers and representatives from the State agency

5 referred to in section 402(a)(3) of the Social

6 Security Act annually negotiates and deter7 mines the dollar value of the child care vouchers

8 to be issued by the State; and

9 (E) the State agency referred to in section

10 402(a)(3) of the Social Security Act monitors

11 the performance of private providers of child

12 care services in the State and the compliance of

13 such providers with the system;

14 (2) the States should create a Consumer Infor15 mation Center responsible for maintaining an up16 dated roster of eligible providers of child care serv17 ices, and a record of the performance of such provid18 ers as evaluated by recipients of such services, which

19 should be published in a brochure that is available

20 to all persons who are eligible to receive such serv21 ices; and

22 (3) the States should loosen their regulations to

23 allow for the reimbursement of the child costs of li24 censed child care providers and unsolicited or home

25 care child care providers.
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1 Subtitle D—AFDC Work Disregards

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

4 Section 402(a)(8)(A) of the Social Security Act (42

5 U.S.C. 602(a)(8)(A)) is amended—

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

7 and

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

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

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

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

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

14 first $225 of the total of such earned income

15 not disregarded under any other clause of this

subparagraph, plus not more than 1 16 ⁄3 of the re17 mainder of such earned income; and’’.

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

20 Section 402(a) of the Social Security Act (42 U.S.C.

21 602(a)), as amended by sections 101, 102(a), 211(a), and

22 224 of this Act, is amended—

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

24 (48);
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1 (2) by striking the period at the end of para2 graph (49) and inserting ‘‘; and’’; and

3 (3) by inserting after paragraph (49) the fol4 lowing:

5 ‘‘(50) at the option of the State, and in such

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

7 provide that—

8 ‘‘(A) upon the recommendation of the case9 worker who is handling the case of a family eli10 gible for aid under the State plan, the State

11 shall, in lieu of any other payment under the

12 State plan to a family during a 3-month period,

13 make a lump-sum payment to the family for the

14 3-month period in an amount equal to 3 times

15 the amount of the monthly benefit to which the

16 family is entitled under the State plan;

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

18 subparagraph (A) shall not be made more than

19 once to any family; and

20 ‘‘(C) if, during a 3-month period for which

21 the State has made a lump-sum payment to a

22 family pursuant to subparagraph (A), the fam23 ily applies for and (but for the lump-sum pay24 ment) would be eligible for aid under the State

25 plan for a greater monthly benefit than the
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1 monthly benefit to which the family was entitled

2 under the State plan at the time of the calcula3 tion of the lump sum payment, then, notwith4 standing subparagraph (A), the State shall, for

5 that part of the 3-month period that remains

6 after the family becomes eligible for the greater

7 monthly benefit, provide monthly benefits to the

8 family in an amount equal to—

9 ‘‘(i) 3 times the amount by which the

10 greater monthly benefit exceeds the former

11 monthly benefit; divided by

12 ‘‘(ii) the whole number of months re13 maining in the 3-month period.’’.

14 SEC. 233. ELIMINATION OF QUARTERS OF COVERAGE RE15 QUIREMENT FOR MARRIED TEENS UNDER

16 AFDC–UP PROGRAM.

17 Section 407(b)(1)(A)(iii)(I) of the Social Security Act

18 (42 U.S.C. 607(b)(1)(A)(iii)(I)) is amended by inserting

19 ‘‘except in the case of a family in which the parents are

20 married and neither parent has attained 20 years of age,’’

21 after ‘‘(I)’’.
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1 Subtitle E—AFDC Asset

2 Limitations

3 SEC. 241. INCREASE IN RESOURCE THRESHOLDS; SEPA4 RATE THRESHOLD FOR VEHICLES.

5 Section 402(a)(7)(B) of the Social Security Act (42

6 U.S.C. 602(a)(7)(B)) is amended—

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

8 as the State may determine’’ and inserting

9 ‘‘$2,000’’; and

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

11 the Secretary may prescribe’’ and inserting ‘‘the dol12 lar amount prescribed by the Secretary of Agri13 culture under section 5(g) of the Food Stamp Act of

14 1977’’.

15 SEC. 242. LIMITED DISREGARD OF AMOUNTS SAVED FOR

16 POST-SECONDARY EDUCATION, THE PUR17 CHASE OF A FIRST CAR OR A FIRST HOME, OR

18 THE ESTABLISHMENT OR OPERATION OF A

19 MICROENTERPRISE.

20 (a) DISREGARD FROM RESOURCES.—Section

21 402(a)(7)(B) of the Social Security Act (42 U.S.C.

22 602(a)(7)(B)) is amended—

23 (1) by striking ‘‘or’’ before ‘‘(iv)’’; and

24 (2) by inserting ‘‘, or (v) any amount not ex25 ceeding $8,000 in 1 qualified asset account (as de-
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1 fined in section 406(i)) of 1 member of such family’’

2 before ‘‘; and’’.

3 (b) DISREGARD FROM INCOME.—

4 (1) IN GENERAL.—Section 402(a)(8)(A) of such

5 Act (42 U.S.C. 602(a)(8)(A)), as amended by sec6 tion 231 of this Act, is amended—

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

8 (viii); and

9 (B) by inserting after clause (ix) the fol10 lowing new clause:

11 ‘‘(x) shall disregard any interest or in12 come earned on a qualified asset account

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

14 the account, to the extent that the total

15 amount in the account, after such pay16 ment, does not exceed $8,000; and’’.

17 (2) NONRECURRING LUMP SUM EXEMPT FROM

18 LUMP SUM RULE.—Section 402(a)(17) of such Act

19 (42 U.S.C. 602(a)(17)) is amended by adding at the

20 end the following: ‘‘; and that this paragraph shall

21 not apply to earned or unearned income received in

22 a month on a nonrecurring basis to the extent that

23 such income is placed in a qualified asset account

24 (as defined in section 406(i)) the total amount in
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1 which, after such placement, does not exceed

2 $8,000;’’.

3 (3) TREATMENT AS INCOME.—Section

4 402(a)(7) of such Act (42 U.S.C. 602(a)(7)) is

5 amended—

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

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

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

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

11 subparagraph:

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

13 from a qualified asset account (as defined in

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

16 (c) DEFINITIONS.—Section 406 of such Act (42

17 U.S.C. 606) is amended by adding at the end the follow18 ing:

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

20 mechanism approved by the State (such as individual re21 tirement accounts, escrow accounts, or savings bonds) that

22 allows savings of an individual receiving aid to families

23 with dependent children to be used for a purpose described

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

3 following purposes:

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

5 at any postsecondary education program.

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

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

8 no member of the family has an ownership interest

9 in such a property.

10 ‘‘(C) The purchase of an automobile if no mem11 ber of the family has an ownership interest in an

12 automobile.

13 ‘‘(D) The establishment or operation of a

14 microenterprise owned by a member of the family.

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

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

17 whom owns the enterprise.’’.

18 SEC. 243. TREATMENT OF MICROENTERPRISES.

19 (a) IN GENERAL.—Section 402(a) of the Social Secu20 rity Act (42 U.S.C. 602(a)), as amended by sections 101,

21 102(a), 211(a), 224, and 232 of this Act, is amended—

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

23 (49);

24 (2) by striking the period at the end of para25 graph (50) and inserting ‘‘; and’’; and
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1 (3) by inserting after paragraph (50) the fol2 lowing:

3 ‘‘(51) provide that the State agency—

4 ‘‘(A) shall not include as a resource of the

5 family of which a child referred to in paragraph

6 (7)(A) is a member, for purposes of paragraph

7 (7)(B), the first $8,000 of the net worth (assets

8 reduced by liabilities with respect thereto) of 1

9 microenterprise (as defined in section 406(j)(1))

10 owned, in whole or in part, by the child or by

11 a relative or other individual referred to in

12 paragraph (7)(A), for a period not to exceed 2

13 years; and

14 ‘‘(B) shall take into consideration as

15 earned income of the family of which the child

16 is a member, only the net profits (as defined in

17 section 406(j)(2)) of 1 such microenterprise, for

18 a period not to exceed 2 years.’’.

19 (b) DEFINITIONS.—Section 406(j) of such Act (42

20 U.S.C. 606(j)), as added by section 242(c) of this Act,

21 is amended—

22 (1) by inserting ‘‘(1)’’ after ‘‘(j)’’; and

23 (2) by adding at the end the following:
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1 ‘‘(2) The term ‘net profits’ means, with respect to

2 a microenterprise, the gross receipts of the

3 microenterprise, minus—

4 ‘‘(A) payments of principal or interest on a loan

5 to the microenterprise;

6 ‘‘(B) transportation expenses incurred in oper7 ating the microenterprise;

8 ‘‘(C) expenses incurred in maintaining inven9 tory for the microenterprise;

10 ‘‘(D) expenditures for the purchase of capital

11 equipment for the microenterprise;

12 ‘‘(E) cash retained by the microenterprise for

13 future use;

14 ‘‘(F) taxes paid by the microenterprise;

15 ‘‘(G) if the microenterprise is covered under a

16 policy of insurance against loss—

17 ‘‘(i) the premiums paid for such insurance;

18 and

19 ‘‘(ii) the losses incurred by the

20 microenterprise that are not reimbursed by the

21 insurer solely by reason of the existence of a de22 ductible with respect to the insurance policy;

23 ‘‘(H) the reasonable costs of obtaining and op24 erating 1 motor vehicle necessary for the conduct of

25 the microenterprise; and
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1 ‘‘(I) the other expenses of the

2 microenterprise.’’.

3 TITLE III—THE WORK FIRST

4 PROGRAM

5 Subtitle A—AFDC

6 SEC. 301. WORK FIRST PROGRAM.

7 (a) STATE PLAN REQUIREMENT.—Section 402(a) of

8 the Social Security Act (42 U.S.C. 602(a)), as amended

9 by sections 101, 102(a), 211(a), 224, 232, and 243(a) of

10 this Act, is amended—

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

12 (50);

13 (2) by striking the period at the end of para14 graph (51) and inserting ‘‘; and’’; and

15 (3) by inserting after paragraph (51) the fol16 lowing:

17 ‘‘(52) at the option of the State, provide that

18 the State has in effect and operation a work first

19 program that meets the requirements of part F and

20 a community service program that meets the re21 quirements of part G, and must provide to partici22 pants in such programs such case management serv23 ices as are necessary to ensure the integrated provi24 sion of benefits and services under such programs.’’.
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1 (b) ESTABLISHMENT AND OPERATION OF PRO2 GRAM.—Title IV of such Act (42 U.S.C. 601 et seq.) is

3 amended by striking part F and inserting the following:

4 ‘‘PART F—WORK FIRST PROGRAM

5 ‘‘SEC. 481. ESTABLISHMENT AND OPERATION OF STATE

6 PROGRAMS.

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

8 part if the program meets the following requirements:

9 ‘‘(1) OBJECTIVE.—The objective of the pro10 gram is for each program participant to find and

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

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

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

14 to connect recipients of aid to families with depend15 ent children with the private sector labor market as

16 soon as possible and offer them the support and

17 skills necessary to remain in the labor market. Each

18 component of the program should be permeated with

19 an emphasis on employment and with an under20 standing that minimum wage jobs are a stepping

21 stone to more highly paid employment.

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

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

24 component of the program and shall be a priority for
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1 each State office with responsibilities under the pro2 gram.

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

4 incentives to change the culture of each State office

5 with responsibilities under the State plan approved

6 under part A, improve the performance of employ7 ees, and ensure that the objective of each employee

8 of each such State office is to find an unsubsidized

9 paid job for each program participant.

10 ‘‘(5) CASEWORKER TRAINING.—The State shall

11 provide such training to caseworkers and related

12 personnel (including through the use of incentives)

13 as may be necessary to ensure successful job place14 ments that result in full-time public or private em15 ployment (outside the State agencies with respon16 sibilities under part A) for program participants.

17 The State shall reward any caseworker who enters

18 a participation agreement with a program partici19 pant that provides for education or training activi20 ties as well as work.

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

22 for operating the program shall make monthly sta23 tistical reports to the governing body of the State,

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

25 and the number of program participants who are no
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1 longer receiving aid under the State plan approved

2 under part A as a result of participation in the pro3 gram.

4 ‘‘(7) PLAN REQUIRED.—The program is estab5 lished and operated in accordance with a plan ap6 proved by the Secretary as meeting the requirements

7 of this part.

8 ‘‘(8) CASE MANAGEMENT TEAMS.—

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

10 State to assign to each individual required or

11 allowed to participate in the program a case

12 management team that shall meet with the pro13 gram participant and develop a participation

14 agreement for the individual.

15 ‘‘(B) DEADLINE.—

16 ‘‘(i) IN GENERAL.—The case manage17 ment team shall comply with subparagraph

18 (A) with respect to a program participant

19 within 30 days (or, at the option of the

20 State, within a period not exceeding 90

21 days) after the later of—

22 ‘‘(I) the date the application of

23 the program participant for aid under

24 the State plan approved under part A

25 was approved; or
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1 ‘‘(II) the date this part first ap2 plies to the State.

3 ‘‘(ii) REPEAT PARTICIPANTS.—Within

4 30 days after the State makes a deter5 mination under section 487(c)(2) to allow

6 an individual to participate in the pro7 gram, the case management team shall

8 meet with the individual and develop a par9 ticipation agreement for the individual.

10 ‘‘(9) PARTICIPATION AGREEMENTS.—The par11 ticipation agreement for a participant shall—

12 ‘‘(A) contain an individualized comprehen13 sive plan, developed by the team and the partic14 ipant, to move the participant into a full-time

15 unsubsidized job, through activities under sec16 tion 482, 483, 484, 485, or 486;

17 ‘‘(B) to the greatest extent possible, be de18 signed to move the participant as quickly as

19 possible into whatever type and amount of work

20 as the participant is capable of handling, and

21 increases the responsibility and amount of work

22 over time until the participant is able to work

23 full-time;

24 ‘‘(C) where necessary, provide for edu25 cation or training of the participant;
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1 ‘‘(D) provide that aid under the State plan

2 is to be paid to the participant based on the

3 number of hours that the participant spends in

4 activities provided for in the agreement;

5 ‘‘(E) provide that the participant shall

6 spend at least 20 hours per week in activities

7 provided for in the agreement;

8 ‘‘(F) provide that the participant shall ac9 cept any bona fide offer of unsubsidized full10 time employment, unless the participant has

11 good cause for not doing so; and

12 ‘‘(G) at the option of the State, require the

13 participant to undergo appropriate substance

14 abuse treatment.

15 ‘‘(10) OPTIONS FOR PARTICIPANTS.—The case

16 manager for a program participant shall present the

17 participant with each option offered under the State

18 program through which the participant will, over

19 time, be moved into full-time unsubsidized employ20 ment.

21 ‘‘(11) ONE-STOP EMPLOYMENT SHOPS.—

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

23 program, the State shall utilize and make avail24 able to each program participant, through the

25 establishment and operation or utilization of
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1 appropriate Federal or State one-stop employ2 ment shops, services under programs carried

3 out under the following provisions of law:

4 ‘‘(i) Part A of title II of the Job

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

6 et seq.) (relating to the adult training pro7 gram).

8 ‘‘(ii) Part B of title II of such Act (29

9 U.S.C. 1630 et seq.) (relating to the sum10 mer youth employment and training pro11 grams).

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

13 (29 U.S.C. 1641 et seq.) (relating to the

14 youth training program).

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

16 1651 et seq.) (relating to employment and

17 training assistance for dislocated workers).

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

19 (29 U.S.C. 1691 et seq.) (relating to the

20 Job Corps).

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

22 and Applied Technology Education Act (20

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

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

25 U.S.C. 1201 et seq.).
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1 ‘‘(viii) Part B of chapter 1 of title I

2 of the Elementary and Secondary Edu3 cation Act of 1965 (20 U.S.C. 2741 et

4 seq.) (relating to Even Start family lit5 eracy programs).

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

7 Stewart B. Mckinney Homeless Assistance

8 Act (42 U.S.C. 11421) (relating to adult

9 education for the homeless).

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

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

12 education for homeless children and

13 youth).

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

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

16 training for the homeless).

17 ‘‘(xii) The School-to-Work Opportuni18 ties Act of 1994.

19 ‘‘(xiii) The National and Community

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

21 seq.).

22 ‘‘(xiv) The National Skill Standards

23 Act of 1994.

24 ‘‘(B) COORDINATION.—In utilizing appro25 priate Federal or State one-stop employment
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1 shops described in subparagraph (A), the State

2 shall ensure coordination between the case3 worker of each program participant and the ad4 ministrators of the programs carried out under

5 the provisions of law described in such subpara6 graph.

7 ‘‘(12) PENALTIES FOR REFUSAL TO WORK.—

8 The amount of aid otherwise payable under the

9 State plan approved under part A to a family that

10 includes an individual who fails without good cause

11 to comply with a participation agreement signed by

12 the individual shall be reduced for 1 month by 25

13 percent for each act of noncompliance.

14 ‘‘(13) PERFORMANCE STANDARDS.—The State

15 shall (in accordance with regulations prescribed by

16 the Secretary) develop standards to be used to meas17 ure the effectiveness of the programs established

18 under this part and part G in moving recipients of

19 aid under the State plan approved under part A into

20 full-time unsubsidized employment.

21 ‘‘SEC. 482. REVAMPED JOBS PROGRAM.

22 ‘‘A State that establishes a program under this part

23 may operate a program similar to the program known as

24 the ‘GAIN Program’ that has been operated by Riverside

25 County, California, under Federal law in effect imme-
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1 diately before the date this part first applies to the State

2 of California.

3 ‘‘SEC. 483. USE OF PLACEMENT COMPANIES.

4 ‘‘(a) IN GENERAL.—A State that establishes a pro5 gram under this part may enter into contracts with private

6 companies (whether operated for profit or not for profit)

7 for the placement of participants in the program in posi8 tions of full-time employment, preferably in the private

9 sector, for wages sufficient to eliminate the need of such

10 participants for cash assistance.

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

12 entered into under this section with a company shall meet

13 the following requirements:

14 ‘‘(1) PROVISION OF JOB READINESS AND SUP15 PORT SERVICES.—The contract shall require the

16 company to provide, to any program participant who

17 presents to the company a voucher issued under sub18 section (d) intensive personalized support and job

19 readiness services designed to prepare the individual

20 for employment and ensure the continued success of

21 the individual in employment.

22 ‘‘(2) PAYMENTS.—

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

24 provide for payments to be made to the com25 pany with respect to each program participant
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1 who presents to the company a voucher issued

2 under subsection (d).

3 ‘‘(B) STRUCTURE.—The contract shall

4 provide for the majority of the amounts to be

5 paid under the contract with respect to a pro6 gram participant, to be paid after the company

7 has placed the participant in a position of full8 time employment and the participant has been

9 employed in the position for such period of not

10 less than 5 months as the State deems appro11 priate.

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

13 under this section shall be awarded only after competitive

14 bidding.

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

16 each program participant whose participation agreement

17 provides for the use of placement companies under this

18 section, indicating that the participant is eligible for the

19 services of such a company.

20 ‘‘SEC. 484. TEMPORARY SUBSIDIZED JOB CREATION.

21 ‘‘A State that establishes a program under this part

22 may establish a program similar to the program known

23 as ‘JOBS Plus’ that has been operated by the State of

24 Oregon under Federal law in effect immediately before the

25 date this part first applies to the State of Oregon.
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1 ‘‘SEC. 485. MICROENTERPRISE.

2 ‘‘(a) GRANTS AND LOANS TO NONPROFIT ORGANIZA3 TIONS FOR THE PROVISION OF TECHNICAL ASSISTANCE,

4 TRAINING, AND CREDIT TO LOW INCOME ENTRE5 PRENEURS.—A State that establishes a program under

6 this part may make grants and loans to nonprofit organi7 zations to provide technical assistance, training, and credit

8 to low income entrepreneurs for the purpose of establish9 ing microenterprises.

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

11 this subsection, the term ‘microenterprise’ means a com12 mercial enterprise which has 5 or fewer employees, 1 or

13 more of whom owns the enterprise.

14 ‘‘SEC. 486. WORK SUPPLEMENTATION PROGRAM.

15 ‘‘(a) IN GENERAL.—A State that establishes a pro16 gram under this part may institute a work

17 supplementation program under which the State, to the

18 extent it considers appropriate, may reserve the sums that

19 would otherwise be payable to participants in the program

20 as aid to families with dependent children and use the

21 sums instead for the purpose of providing and subsidizing

22 jobs for the participants (as described in subsection

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

24 with dependent children that would otherwise be so pay25 able to the participants.

26 ‘‘(b) STATE FLEXIBILITY.—
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1 ‘‘(1) Nothing in this part, or in any State plan

2 approved under part A, shall be construed to prevent

3 a State from operating (on such terms and condi4 tions and in such cases as the State may find to be

5 necessary or appropriate) a work supplementation

6 program in accordance with this section and section

7 484 (as in effect immediately before the date this

8 part first applies to the State).

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

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

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

12 State determines to be necessary and appropriate for

13 carrying out a work supplementation program under

14 this section.

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

16 other provision of law, a State operating a work

17 supplementation program under this section may

18 provide that the need standards in effect in those

19 areas of the State in which the program is in oper20 ation may be different from the need standards in

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

22 operation, and the State may provide that the need

23 standards for categories of recipients may vary

24 among such categories to the extent the State deter-
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1 mines to be appropriate on the basis of ability to

2 participate in the work supplementation program.

3 ‘‘(4) Notwithstanding any other provision of

4 law, a State may make such further adjustments in

5 the amounts of the aid to families with dependent

6 children paid under the plan to different categories

7 of recipients (as determined under paragraph (3)) in

8 order to offset increases in benefits from needs-relat9 ed programs (other than the State plan approved

10 under part A) as the State determines to be nec11 essary and appropriate to further the purposes of

12 the work supplementation program.

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

14 and used for providing and subsidizing jobs under

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

16 may use a sampling methodology.

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

18 other provision of law, a State operating a work

19 supplementation program under this section—

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

21 of earned income to be disregarded under the

22 State plan as the State determines to be nec23 essary and appropriate to further the purposes

24 of the work supplementation program; and
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1 ‘‘(B) during 1 or more of the first 9

2 months of an individual’s employment pursuant

3 to a program under this part, may apply to the

4 wages of the individual the provisions of sub5 paragraph (A)(iv) of section 402(a)(8) without

6 regard to the provisions of subparagraph

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

8 ‘‘(c) RULES RELATING TO SUPPLEMENTED JOBS.—

9 ‘‘(1) A work supplementation program operated

10 by a State under this section may provide that any

11 individual who is an eligible individual (as deter12 mined under paragraph (2)) shall take a supple13 mented job (as defined in paragraph (3)) to the ex14 tent that supplemented jobs are available under the

15 program. Payments by the State to individuals or to

16 employers under the work supplementation program

17 shall be treated as expenditures incurred by the

18 State for aid to families with dependent children ex19 cept as limited by subsection (d).

20 ‘‘(2) For purposes of this section, an eligible in21 dividual is an individual who is in a category which

22 the State determines should be eligible to participate

23 in the work supplementation program, and who

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

25 be eligible for aid to families with dependent chil-
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1 dren under an approved State plan if the State did

2 not have a work supplementation program in effect.

3 ‘‘(3) For purposes of this subsection, a supple4 mented job is—

5 ‘‘(A) a job provided to an eligible individ6 ual by the State or local agency administering

7 the State plan under part A; or

8 ‘‘(B) a job provided to an eligible individ9 ual by any other employer for which all or part

10 of the wages are paid by the State or local

11 agency.

12 A State may provide or subsidize under the program

13 any job which the State determines to be appro14 priate.

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

16 hold supplemented jobs under a State’s work

17 supplementation program shall be exempt from the

18 retrospective budgeting requirements imposed pursu19 ant to section 402(a)(13)(A)(ii) (and the amount of

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

21 individual for any month, or which would be so pay22 able but for the individual’s participation in the

23 work supplementation program, shall be determined

24 on the basis of the income and other relevant cir25 cumstances in that month).
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1 ‘‘(d) COST LIMITATION.—The amount of the Federal

2 payment to a State under section 403 for expenditures in3 curred in making payments to individuals and employers

4 under a work supplementation program under this sub5 section shall not exceed an amount equal to the amount

6 which would otherwise be payable under such section if

7 the family of each individual employed in the program es8 tablished in the State under this section had received the

9 maximum amount of aid to families with dependent chil10 dren payable under the State plan to such a family with

11 no income (without regard to adjustments under sub12 section (b)) for the lesser of—

13 ‘‘(1) 9 months; or

14 ‘‘(2) the number of months in which the indi15 vidual was employed in the program.

16 ‘‘(e) RULES OF INTERPRETATION.—

17 ‘‘(1) This section shall not be construed as re18 quiring the State or local agency administering the

19 State plan to provide employee status to an eligible

20 individual to whom the State or local agency pro21 vides a job under the work supplementation program

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

23 provides all or part of the wages paid to the individ24 ual by another entity under the program), or as re25 quiring any State or local agency to provide that an
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1 eligible individual filling a job position provided by

2 another entity under the program be provided em3 ployee status by the entity during the first 13 weeks

4 the individual fills the position.

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

6 program shall be considered to be earned income for

7 purposes of any provision of law.

8 ‘‘(f) PRESERVATION OF MEDICAID ELIGIBILITY.—

9 Any State that chooses to operate a work supplementation

10 program under this section shall provide that any individ11 ual who participates in the program, and any child or rel12 ative of the individual (or other individual living in the

13 same household as the individual) who would be eligible

14 for aid to families with dependent children under the State

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

16 work supplementation program, shall be considered indi17 viduals receiving aid to families with dependent children

18 under the State plan approved under part A for purposes

19 of eligibility for medical assistance under the State plan

20 approved under title XIX.

21 ‘‘(g) RELATIONSHIP TO WORK REQUIREMENTS IM22 POSED UNDER THIS PART.—No individual receiving aid

23 to families with dependent children under a State plan

24 shall be excused from any requirement of this part relating

25 to work requirements by reason of the fact that the State
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1 has a work supplementation program, except during peri2 ods in which the individual is employed under the work

3 supplementation program.

4 ‘‘SEC. 487. PARTICIPATION RULES.

5 ‘‘(a) IN GENERAL.—Except as provided in sub6 sections (b) and (c), a State that establishes a program

7 under this part may require any individual receiving aid

8 under the State plan approved under part A to participate

9 in the program.

10 ‘‘(b) EXEMPTIONS.—The State may not require an

11 individual to participate in the program if the individual—

12 ‘‘(1) has not attained 20 years of age, and has

13 attended secondary school or has been engaged in

14 obtaining a certificate of high school equivalency;

15 ‘‘(2) has been employed on a part-time basis,

16 and has been participating on a part-time basis in

17 technical or vocational education;

18 ‘‘(3) has a serious health condition (as defined

19 in section 101(11) of the Family and Medical Leave

20 Act of 1993), or has been caring for a relative who

21 had such a condition;

22 ‘‘(4)(A) is incapacitated, but only if the State

23 verifies that a physician or licensed or certified psy24 chologist has determined that the incapacitation is

25 due to a physical or mental impairment that pre-
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1 vents the individual from engaging in employment or

2 training under the program; or

3 ‘‘(B) is recuperating from childbirth, and a

4 physician has prescribed that the individual not en5 gage in such employment or training; or

6 ‘‘(5)(A) is pregnant, obtains physical custody of

7 a child, or becomes a guardian of a child, during the

8 3-month period that ends on the date the State may

9 otherwise have required the individual to participate

10 in the program; and

11 ‘‘(B) the 12-week period that begins with the

12 first day during the 3-month period that the family

13 member was pregnant, obtained such custody, or be14 came such a guardian has not expired.

15 ‘‘(c) 2-YEAR LIMITATION ON PARTICIPATION.—

16 ‘‘(1) IN GENERAL.—Except as provided in para17 graph (2), an individual may not participate in the

18 State program established under this part if the in19 dividual has participated in the program for 24

20 months after the date the individual first signed a

21 participation agreement under this part.

22 ‘‘(2) AUTHORITY TO ALLOW REPEAT PARTICI23 PATION.—

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graph (B) of this paragraph, a State may allow
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1 an individual who, by reason of paragraph (1),

2 would be prohibited from participating in the

3 State program established under this part to

4 participate in the program for such additional

5 period or periods as the State determines ap6 propriate, if the individual has participated for

7 36 months in the State community service pro8 gram established under part G.

9 ‘‘(B) LIMITATION ON PERCENTAGE OF RE10 PEAT PARTICIPANTS.—The number of individ11 uals allowed under subparagraph (A) to partici12 pate during a program year in a State program

13 established under this part shall not exceed 10

14 percent of the total number of individuals that

15 the Secretary projects will participate in the

16 program for the program year.

17 ‘‘SEC. 488. PHASE-IN OF PARTICIPATION.

18 ‘‘(a) INITIAL PARTICIPANTS.—Notwithstanding sec19 tion 487(a), an individual may not participate in a pro20 gram established by a State under this part unless the

21 individual—

22 ‘‘(1) has not attained 25 years of age; or

23 ‘‘(2) was participating in the State program es24 tablished under part F (as in effect immediately be-
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1 fore the date this part first applies to the State) im2 mediately before such date.

3 ‘‘(b) PHASE-IN OF OLDER PARTICIPANTS.—Notwith4 standing section 487(a) and subsection (a) of this section,

5 effective on each October 1 of each calendar year after

6 1996, a State that establishes a program under this

7 part—

8 ‘‘(1) except as provided in paragraph (2) of this

9 subsection, may not allow an individual to partici10 pate in the program unless the individual has not at11 tained the age (in years) of 25, plus 2 times the

12 whole number of calendar years that have elapsed

13 since October 1, 1996; and

14 ‘‘(2) may include in the program not more than

15 20 percent of the families receiving aid under the

16 State plan approved under part A in which the care17 taker relative has attained 25 years of age, with an

18 emphasis on—

19 ‘‘(A) recipients of such aid who have re20 ceived such aid for any 36 of the preceding 60

21 months; and

22 ‘‘(B) members of families in which the

23 youngest child is within 2 years of being ineli24 gible for aid to families with dependent children

25 because of age.
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1 ‘‘PART G—COMMUNITY SERVICE PROGRAM

2 ‘‘SEC. 491. ESTABLISHMENT AND OPERATION OF PROGRAM.

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

4 first program under part F shall establish and carry out

5 a community service program that meets the requirements

6 of this part.

7 ‘‘(b) OBJECTIVE.—The objective of the community

8 service program is for each program participant to find

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

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

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

12 assign to each program participant a case management

13 team that shall meet with the participant and assist the

14 participant to choose the most suitable community service

15 job under subsection (d) and to eventually obtain a full16 time unsubsidized paid job.

17 ‘‘(d) PROVISION OF COMMUNITY SERVICE JOB.—

18 ‘‘(1) IN GENERAL.—Except as provided in para19 graphs (2) and (3), the State shall provide each par20 ticipant with a full-time community service job

21 under which the participant works a minimum of 30

22 hours per week and is paid at a rate equal to—

23 ‘‘(A) the minimum wage rate in effect

24 under section 6 of the Fair Labor Standards

25 Act of 1938; or
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1 ‘‘(B) the State minimum wage rate, if such

2 rate is equal to or higher than the minimum

3 wage rate described in subparagraph (A).

4 ‘‘(2) EXCEPTION.—(A) If the participant has

5 obtained unsubsidized part-time employment in the

6 private sector, the State shall provide the participant

7 with a part-time community service job.

8 ‘‘(B) If the State provides a participant a part9 time community service job under subparagraph (A),

10 such State shall ensure that the total number of

11 hours that the participant works in a week is at

12 least 30 hours.

13 ‘‘(3) WAIVER.—(A) The State may submit to

14 the Secretary a request for a waiver of the 30-hour

15 per week work requirement described in paragraph

16 (1) if such requirement is too financially burdensome

17 for the State to meet.

18 ‘‘(B) Any waiver granted under subparagraph

19 (A) shall require the State—

20 ‘‘(i) to ensure that each participant works

21 part-time at the community service job; and

22 ‘‘(ii) to meet such 30-hour per week work

23 requirement by the year 2001.

24 ‘‘(4) WAGES NOT CONSIDERED EARNED IN25 COME.—Wages paid under a community service pro-
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1 gram shall not be considered to be earned income for

2 purposes of any provision of law.

3 ‘‘(5) COMMUNITY SERVICE JOB DEFINED.—For

4 purposes of this section, the term ‘community serv5 ice job’ means—

6 ‘‘(A) a job provided to a participant by the

7 State administering the State plan under part

8 A; or

9 ‘‘(B) a job provided to a participant by any

10 other employer for which all or part of the

11 wages are paid by the State.

12 A State may provide or subsidize under the program

13 any job which the State determines to be appro14 priate.

15 ‘‘(e) JOB SEARCH REQUIREMENT.—The State shall

16 require each participant to spend a minimum of 5 hours

17 per week on activities related to securing unsubsidized

18 full-time employment in the private sector.

19 ‘‘(f) DURATION OF PARTICIPATION.—

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

22 more than 3 years in a community service program

23 under this section.

24 ‘‘(2) AUTHORITY TO ALLOW REPEATED PAR25 TICIPATION.—
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1 ‘‘(A) IN GENERAL.—Subject to subpara2 graph (B), a State may allow an individual

3 whose participation in the community service

4 program under this section has terminated, or

5 (but for this paragraph) would terminate, to

6 participate in the program for an additional pe7 riod of time, as determined by the State.

8 ‘‘(B) LIMITATION ON PERCENTAGE OF RE9 PEAT PARTICIPANTS.—The number of individ10 uals allowed under subparagraph (A) to partici11 pate during a program year in a State program

12 established under this part shall not exceed 10

13 percent of the total number of individuals that

14 the Secretary projects will participate in the

15 program for the program year.

16 ‘‘(g) USE OF PLACEMENT COMPANIES.—A State that

17 establishes a community service program under this sec18 tion may enter into contracts with private companies

19 (whether operated for profit or not for profit) for the

20 placement of participants in the program in positions of

21 full-time employment, preferably in the private sector, for

22 wages sufficient to eliminate the need of such participants

23 for cash assistance in accordance with section 483.

24 ‘‘(h) TEMPORARY SUBSIDIZED JOB CREATION.—A

25 State that establishes a community service program under
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1 this part may establish a program similar to the program

2 operated by the State of Oregon, which is known as

3 ‘JOBS Plus’.

4 ‘‘(i) WORK SUPPLEMENTATION PROGRAM.—

5 ‘‘(1) IN GENERAL.—A State that establishes a

6 community service program under this section may

7 institute a work supplementation program under

8 which the State, to the extent it considers appro9 priate, may reserve the sums that would otherwise

10 be payable to participants in the program as a com11 munity service minimum wage and use the sums in12 stead for the purpose of providing and subsidizing

13 private sector jobs for the participants.

14 ‘‘(2) EMPLOYER AGREEMENT.—An employer

15 who provides a private sector job to a participant

16 under paragraph (1) shall agree to provide to the

17 participant an amount in wages equal to the poverty

18 threshold for a family of three.

19 ‘‘(j) FAILURE TO COMPLY WITH EMPLOYABILITY

20 AGREEMENT OR OTHER ACT OF NONCOMPLIANCE.—

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

22 if the program participant fails without good cause

23 to comply with an employability agreement signed by

24 the participant, or the participant otherwise engages

25 in any other act of noncompliance, the participant
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1 shall be afforded the opportunity to change commu2 nity service jobs.

3 ‘‘(2) MAXIMUM OF 3 COMMUNITY SERVICE

4 JOBS.—A program participant may not receive more

5 than 3 community service jobs under the program.

6 ‘‘(3) DETERMINATION OF ACT OF NONCOMPLI7 ANCE.—For purposes of this subsection, the term

8 ‘act of noncompliance’ shall be determined by the

9 State or the employer and shall include failure by

10 the participant to accept an offer of full-time em11 ployment in the private sector without good rea12 son.’’.

13 (c) FUNDING.—

14 (1) GENERAL RULE.—Section 403(a) of such

15 Act (42 U.S.C. 603(a)) is amended—

16 (A) by striking ‘‘and’’ at the end of para17 graph (3); and

18 (B) by inserting after paragraph (3) the

19 following:

20 ‘‘(4) in the case of any State, an amount equal

21 to the sum of 80 percent of the total amount ex22 pended during the quarter for the operation and ad23 ministration of a program under part F, in accord24 ance with the State plan approved under part F,

25 and 80 percent of the total amount expended during
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1 the quarter for the operation and administration of

2 a community service program under part G, in ac3 cordance with the State plan approved under such

4 part G, except that not more than 10 percent of the

5 amount payable to the State under this paragraph

6 for the quarter may be for expenditures made with

7 respect to program participants who are

8 noncustodial parents and not eligible for aid under

9 the State plan; and’’.

10 (2) RULES APPLICABLE TO THE TERRI11 TORIES.—Section 403 of such Act (42 U.S.C. 603)

12 is amended by redesignating subsection (b) as sub13 section (c) and by inserting after subsection (a) the

14 following:

15 ‘‘(b)(1) In lieu of any payment under subsection (a),

16 the Secretary shall pay to each State with a plan approved

17 under part F and to which section 1108 applies, with re18 spect to expenditures by the State to carry out a program

19 under part F (including expenditures for child care under

20 section 402(g)(1)(A)), an amount equal to—

21 ‘‘(A) with respect to so much of such expendi22 tures in a fiscal year as do not exceed the State’s

23 expenditures in the fiscal year 1987 with respect to

24 which payments were made to such State from its
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1 allotment for such fiscal year pursuant to part C of

2 this title as then in effect, 90 percent; and

3 ‘‘(B) with respect to so much of such expendi4 tures in a fiscal year as exceed the amount described

5 in subparagraph (A)—

6 ‘‘(i) 50 percent, in the case of expenditures

7 for administrative costs made by a State in op8 erating such a program for such fiscal year

9 (other than the personnel costs for staff em10 ployed full-time in the operation of such pro11 gram) and the costs of transportation and other

12 work-related supportive services under section

13 402(g)(2); and

14 ‘‘(ii) the greater of 60 percent or the Fed15 eral medical assistance percentage (as defined

16 in section 1118), in the case of expenditures

17 made by a State in operating such a program

18 for such fiscal year (other than for costs de19 scribed in clause (i)).

20 ‘‘(2) With respect to the amount for which payment

21 is made to a State under paragraph (1)(A), the State’s

22 expenditures for the costs of operating a program estab23 lished under part F may be in cash or in kind, fairly evalu24 ated.
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1 ‘‘(3) Not more than 10 percent of the amount payable

2 to a State under this subsection for a quarter may be for

3 expenditures made during the quarter with respect to pro4 gram participants who are not eligible for aid under the

5 State plan approved under part A.’’.

6 (d) ENFORCEMENT OF PERFORMANCE STAND7 ARDS.—Section 403 of such Act (42 U.S.C. 603) is

8 amended by inserting after subsection (c) the following:

9 ‘‘(d) If the Secretary determines that the programs

10 established by a State under parts F and G, as a whole,

11 have failed for a fiscal year to meet the performance

12 standards developed by the State under section 481(13),

13 the Secretary shall, notwithstanding subsection (a)(4) of

14 this section, pay to the State an amount equal to the sum

15 of 50 percent of the total amount expended during the

16 fiscal year for the operation and administration of such

17 programs in accordance with the State plans approved

18 under parts F and G.’’.

19 (e) CONFORMING AMENDMENTS.—

20 (1) Section 402(a) of the Social Security Act

21 (42 U.S.C. 602(a)) is amended by striking para22 graph (19).

23 (2) Section 402(e)(2)(C) of such Act (42

24 U.S.C. 602(e)(2)(C)) is amended by striking

25 ‘‘403(b)’’ and inserting ‘‘403(c)’’.
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1 (3) Section 403(e) of such Act (42 U.S.C.

2 603(e)) is amended by striking ‘‘(b)(1)’’ and insert3 ing ‘‘(c)(1)’’.

4 (4) Section 403 of such Act (42 U.S.C. 603) is

5 amended by striking subsections (k) and (l).

6 (5) Section 407(b)(1)(B) of such Act (42

7 U.S.C. 607(b)(1)(B)) is amended—

8 (A) by adding ‘‘and’’ at the end of clause

9 (iii);

10 (B) by striking ‘‘; and’’ at the end of

11 clause (iv) and inserting a period; and

12 (C) by striking clause (v).

13 (6) Section 407(b)(2)(B)(ii)(I) of such Act (42

14 U.S.C. 607(b)(2)(B)(ii)(I)) is amended by striking

15 ‘‘under section 402(a)(19) or’’.

16 (7) Section 407(b)(2)(C) of such Act (42

17 U.S.C. 607(b)(2)(C)) is amended by striking ‘‘sec18 tion 402(a)(19) and’’.

19 (8) Section 1115(b)(2)(A) of such Act (42

20 U.S.C. 1315(b)(2)(A)) is amended by striking ‘‘, and

21 402(a)(19) (relating to the work incentive pro22 gram)’’.

23 (9) Section 1108 of such Act (42 U.S.C. 1308)

24 is amended—
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1 (A) in subsection (a), by striking ‘‘or, in

2 the case of part A of title IV, section 403(k)’’;

3 and

4 (B) in subsection (d), by striking ‘‘(exclu5 sive of any amounts on account of services and

6 items to which, in the case of part A of such

7 title, section 403(k) applies)’’.

8 (10) Section 1902(a)(19)(A)(i)(I) of such Act

9 (42 U.S.C. 1396a(a)(19)(A)(i)(I)) is amended by

10 striking ‘‘482(e)(6)’’ and inserting ‘‘486(f)’’.

11 (11) Section 1928(a)(1) of such Act (42 U.S.C.

12 1396s(a)(1)) is amended by striking ‘‘482(e)(6)’’

13 and inserting ‘‘486(f)’’.

14 (f) INTENT OF THE CONGRESS.—The Congress in15 tends for State activities under section 484 of the Social

16 Security Act (as added by the amendment made by section

17 301(b) of this Act) to emphasize the use of the funds that

18 would otherwise be used to provide individuals with aid

19 to families with dependent children under part A of title

20 IV of the Social Security Act and with food stamp benefits

21 under the Food Stamp Act of 1977, to subsidize the wages

22 of such individuals in temporary jobs.
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1 SEC. 302. REGULATIONS.

2 The Secretary of Health and Human Services shall

3 prescribe such regulations as may be necessary to imple4 ment the amendments made by this title.

5 SEC. 303. APPLICABILITY TO STATES.

6 (a) STATE OPTION TO ACCELERATE APPLICABIL7 ITY.—If a State formally notifies the Secretary of Health

8 and Human Services that the State desires to accelerate

9 the applicability to the State of the amendments made by

10 this title, the amendments shall apply to the State on and

11 after such earlier date as the State may select.

12 (b) STATE OPTION TO DELAY APPLICABILITY UNTIL

13 WAIVERS EXPIRE.—The amendments made by this title

14 shall not apply to a State with respect to which there is

15 in effect a waiver issued under section 1115 of the Social

16 Security Act for the State program established under part

17 F of title IV of such Act, until the waiver expires, if State

18 formally notifies the Secretary of Health and Human

19 Services that the State desires to so delay such effective

20 date.

21 (c) AUTHORITY OF THE SECRETARY OF HEALTH

22 AND HUMAN SERVICES TO DELAY APPLICABILITY TO A

23 STATE.—If a State formally notifies the Secretary of

24 Health and Human Services that the State desires to

25 delay the applicability to the State of the amendments

26 made by this title, the amendments shall apply to the
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1 State on and after any later date agreed upon by the Sec2 retary and the State.

3 (d) FULL PHASE-IN.—Effective October 1, 2005, sec4 tion 488 of the Social Security Act is hereby repealed.

5 Subtitle B—Targeted Jobs Tax

6 Credit

7 SEC. 311. INCREASE IN MINIMUM PERIOD OF EMPLOYMENT

8 REQUIRED TO RECEIVE CREDIT.

9 (a) IN GENERAL.—Paragraph (3) of section 51(i) of

10 the Internal Revenue Code of 1986 (relating to certain

11 individuals ineligible) is amended—

12 (1) by striking ‘‘90 days’’ and inserting ‘‘180

13 days’’,

14 (2) by striking ‘‘14 days’’ and inserting ‘‘28

15 days’’,

16 (3) by striking ‘‘120 hours’’ and inserting ‘‘240

17 hours’’, and

18 (4) by striking ‘‘20 hours’’ and inserting ‘‘40

19 hours’’.

20 (b) EFFECTIVE DATE.—The amendment made by

21 subsection (a) shall apply with respect to individuals who

22 begin work for the employer after December 31, 1994.
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1 TITLE IV—FAMILY RESPONSIBIL2 ITY AND IMPROVED CHILD

3 SUPPORT ENFORCEMENT

4 Subtitle A—Enhancement of Ability

5 to Identify and Locate

6 Noncustodial Parents

7 SEC. 401. EXPANSION OF FUNCTIONS OF FEDERAL PARENT

8 LOCATOR SERVICE.

9 (a) IN GENERAL.—Section 453 of the Social Security

10 Act (42 U.S.C. 653) is amended—

11 (1) in subsection (a), by striking ‘‘enforcing

12 support obligations against such parent’’ and insert13 ing ‘‘establishing parentage, establishing, modifying,

14 and enforcing child support obligations, and enforc15 ing child visitation rights and responsibilities, and

16 which shall use safeguards to prevent the disclosure

17 of information in cases that would jeopardize the

18 safety of the custodial parent or any child of the

19 custodial parent’’;

20 (2) in subsection (b), by inserting after the 2nd

21 sentence the following: ‘‘Information with respect to

22 an absent parent shall not be disclosed to any person

23 if the disclosure would jeopardize the safety of the

24 custodial parent or any child of the custodial parent.

25 Information with respect to an absent parent shall
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1 not be disclosed to any person (other than the custo2 dial parent) unless the custodial parent has been no3 tified in advance of the disclosure.’’; and

4 (3) in subsection (d), by inserting ‘‘and such

5 reasonable fees’’ after ‘‘such documents’’.

6 (b) SENSE OF THE CONGRESS.—It is the sense of

7 the Congress that—

8 (1) the denial of visitation rights under a child

9 support order should be treated as irrelevant in any

10 action brought to enforce the support provisions of

11 the order; and

12 (2) the failure to pay child support pursuant to

13 a child support order should be treated as irrelevant

14 in any action brought to enforce visitation rights

15 under the order.

16 SEC. 402. EXPANSION OF DATA BASES ACCESSED BY PAR17 ENT LOCATOR SYSTEMS.

18 (a) ADDITIONAL INFORMATION FOR FEDERAL PAR19 ENT LOCATOR SERVICE.—Section 453 of the Social Secu20 rity Act (42 U.S.C. 653) is amended—

21 (1) in subsection (b), by striking ‘‘the most re22 cent address and place of employment’’ and insert23 ing ‘‘the most recent residential address, employer

24 name and address, and amounts and nature of in25 come and assets’’;
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1 (2) in subsection (c)(3), by striking ‘‘the resi2 dent parent’’ and inserting ‘‘either parent’’; and

3 (3) in subsection (e), by adding at the end the

4 following:

5 ‘‘(4) The Secretary of the Treasury shall enter into

6 an agreement with the Secretary to provide prompt access

7 by the Secretary (in accordance with this subsection and

8 section 6103(l)(6) of the Internal Revenue Code of 1986)

9 to the quarterly estimated Federal income tax returns

10 filed by individuals with the Internal Revenue Service.’’.

11 (b) STATE INFORMATION.—Section 466(a) of such

12 Act (42 U.S.C. 666(a)) is amended by inserting after

13 paragraph (10) the following:

14 ‘‘(11) Procedures under which the State child

15 support enforcement agency shall have automated

16 on-line or batch access (or, if necessary,

17 nonautomated access) to information regarding resi18 dential addresses, employers and employer address19 es, income and assets, and medical insurance bene20 fits with respect to absent parents that is available

21 through any data base maintained by—

22 ‘‘(A) any agency of the State or any politi23 cal subdivision thereof, that contains informa24 tion on residential addresses, or on employers
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1 and employer addresses, as the State deems ap2 propriate;

3 ‘‘(B) any publicly regulated utility com4 pany located in the State; and

5 ‘‘(C) any credit reporting agency located in

6 the State.

7 (c) MAINTENANCE OF STATE CHILD SUPPORT

8 ORDER REGISTRIES.—Section 466(a) of the Social Secu9 rity Act (42 U.S.C. 666(a)), as amended by subsection

10 (b) of this section, is amended by inserting after para11 graph (11) the following:

12 ‘‘(12) Procedures under which the State child

13 support enforcement agency shall—

14 ‘‘(A) maintain a child support order reg15 istry which shall include a copy of each child

16 support order, issued or modified in the State

17 after the date that is 30 years before the effec18 tive date of this paragraph; and

19 ‘‘(B) transmit a copy of each such order

20 electronically to the Office of Child Support En21 forcement.’’.

22 (d) MAINTENANCE OF FEDERAL CHILD SUPPORT

23 ORDER REGISTRY.—Section 452(a) of such Act (42 U.S.C

24 652(a)) is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (9);

3 (2) by striking the period at the end of the 2nd

4 sentence of paragraph (10) and inserting ‘‘; and’’;

5 and

6 (3) by adding at the end the following:

7 ‘‘(11) maintain a registry of all child support

8 orders transmitted pursuant to section

9 466(a)(12)(B).’’.

10 (e) SENSE OF THE CONGRESS.—It is the sense of the

11 Congress that the Secretary of Health and Human Serv12 ices should investigate, pursuant to section 453(e) of the

13 Social Security Act, accessing Federal data banks that are

14 not linked to the Parent Locator Service which are more

15 than marginally useful in locating absent parents.

16 SEC. 403. NATIONAL PARENT LOCATOR NETWORK.

17 (a) ESTABLISHMENT.—Section 453 of the Social Se18 curity Act (42 U.S.C. 653) is amended by adding at the

19 end the following:

20 ‘‘(g) The Secretary shall expand the Parent Locator

21 Service to establish a national network based on the com22 prehensive statewide child support enforcement systems

23 developed by the States, to—

24 ‘‘(1) allow each State to—
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1 ‘‘(A) locate any absent parent who owes

2 child support, for whom a child support obliga3 tion is being established, or for whom an order

4 for visitation is being enforced, by—

5 ‘‘(i) accessing the records of other

6 State agencies and sources of locate infor7 mation directly from one computer system

8 to another; and

9 ‘‘(ii) accessing Federal sources of lo10 cate information in the same fashion;

11 ‘‘(B) access the files of other States to de12 termine whether there are other child support

13 orders and obtain the details of those orders;

14 ‘‘(C) provide for both on-line and batch

15 processing of locate requests, with on-line ac16 cess restricted to cases in which the information

17 is needed immediately (for such reasons as

18 court appearances) and batch processing used

19 to ‘troll’ data bases to locate individuals or up20 date information periodically; and

21 ‘‘(D) direct locate requests to individual

22 States or Federal agencies, broadcast requests

23 to selected States, or broadcast cases to all

24 States when there is no indication of the source

25 of needed information;
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1 ‘‘(2) provide for a maximum of 48-hour turn2 around time for information to be broadcast and re3 turned to a requesting State;

4 ‘‘(3) provide ready access to courts of the infor5 mation on the network by location of a computer

6 terminal in each court; and

7 ‘‘(4) access the registry of child support orders

8 for public and private cases maintained at the State

9 level by the State agencies as described in section

10 466(a)(12).’’.

11 (b) EXPANDED STATE INTERACTION WITH NA12 TIONAL NETWORK.—Section 454(16) of such Act (42

13 U.S.C. 654(16)) is amended—

14 (1) by striking ‘‘and (E)’’ and inserting ‘‘(E)’’;

15 and

16 (2) by striking ‘‘enforcement;’’ and inserting

17 ‘‘enforcement, and (F) to provide access to the na18 tional network developed pursuant to section

19 453(g);’’.

20 (c) SENSE OF THE CONGRESS.—It is the sense of the

21 Congress that the national network established under sec22 tion 453(g) of the Social Security Act should be used to

23 access State records only through the agency that admin24 isters the State plan approved under part D of title IV

25 of such Act.
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1 SEC. 404. PRIVATE ACCESS TO LOCATE AND ENFORCEMENT

2 SERVICES.

3 Section 466(a) of the Social Security Act (42 U.S.C.

4 666(a)), as amended by section 402 of this Act, is amend5 ed by inserting after paragraph (12) the following:

6 ‘‘(13)(A) Procedures under which private attor7 neys and pro se obligees must be given access to

8 State locate resources and through enforcement

9 techniques of the State child support enforcement

10 agency, for the purpose of establishing, modifying,

11 and enforcing child support, visitation, and parent12 age orders, in accordance with safeguards estab13 lished—

14 ‘‘(i) to provide the custodial parent ad15 vance notice of any release of information with

16 respect to a noncustodial parent; and

17 ‘‘(ii) to prevent release of information with

18 respect to a noncustodial parent if the release

19 may jeopardize the safety of the noncustodial

20 parent, the custodial parent, or any child of ei21 ther parent; and

22 ‘‘(B) The procedures described in subparagraph

23 (A) must require the State—

24 ‘‘(i) to develop and publish guidelines im25 plementing the safeguards described in sub26 paragraph (A); and
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1 ‘‘(ii) if the State provides for reasonable

2 fees for the access referred to in subparagraph

3 (A), to establish such fees in accordance with

4 guidelines developed and published by the State

5 that set schedules for such fees.’’.

6 Subtitle B—Paternity

7 Establishment

8 SEC. 411. SENSE OF THE CONGRESS.

9 It is the sense of the Congress that social services

10 should be provided in hospitals to women who have become

11 pregnant as a result of rape or incest.

12 SEC. 412. AVAILABILITY OF PARENTING SOCIAL SERVICES

13 FOR NEW FATHERS.

14 Section 466(a) of the Social Security Act (42 U.S.C.

15 666(a)), as amended by sections 402 and 404 of this Act,

16 is amended by inserting after paragraph (13) the follow17 ing:

18 ‘‘(14) Procedures for providing new fathers

19 with positive parenting counseling that stresses the

20 importance of paying child support in a timely man21 ner, in accordance with regulations prescribed by the

22 Secretary.’’.
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1 SEC. 413. AFDC BENEFITS CONDITIONED ON COOPERATION

2 IN IDENTIFYING NONCUSTODIAL PARENT.

3 (a) IN GENERAL.—Section 402(a)(26)(B) of the So4 cial Security Act (42 U.S.C. 602(a)(26)(B)) is amended—

5 (1) in clause (i), by inserting ‘‘unless (in ac6 cordance with regulations prescribed by the Sec7 retary, the State finds that the child was born as a

8 result of rape or incest), or unless the applicant or

9 recipient reasonably believes that such cooperation

10 would endanger herself or her child and dem11 onstrates such belief through such documentation as

12 a police report, a restraining order, or an affidavit

13 from a social service provider, except that, if there

14 is no such documentation, the State shall provide

15 the applicant or recipient with information about

16 available social service agencies that will evaluate

17 claims of prior or potential harm,’’ after the comma;

18 (2) by inserting ‘‘and, in either case, such co19 operation shall include the provision of the full

20 name, the last known telephone number and ad21 dress, the name of the last known employer, the

22 name of the closest living relative (or, if there is no

23 known relative, an acquaintance), and the social se24 curity account number of any noncustodial parent of

25 such child, and the name of any State in which any

26 such noncustodial parent was known to be licensed
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1 to operate a motor vehicle,’’ before ‘‘unless’’ the 1st

2 place such term appears; and

3 (3) by inserting ‘‘, except that the applicant or

4 recipient shall not be found to have such good cause

5 unless the applicant or recipient demonstrates that

6 the applicant or recipient failed to obtain such infor7 mation despite an earnest attempt to do so’’ before

8 the 1st semicolon.

9 (b) SENSE OF THE CONGRESS.—It is the sense of

10 the Congress that States should implement methods for

11 the immediate verification of information provided by ap12 plicants and recipients of aid to families with dependent

13 children that might serve to identify and locate

14 noncustodial parents of the children with respect to whom

15 such aid is claimed.

16 SEC. 414. INCREASE IN PASS-THROUGH OF COLLECTED

17 CHILD SUPPORT TO AFDC RECIPIENTS.

18 (a) IN GENERAL.—Section 457(b)(1) of the Social

19 Security Act (42 U.S.C. 657(b)(1)) is amended by striking

20 ‘‘$50’’ each place such term appears and inserting

21 ‘‘$100’’.

22 (b) CONFORMING AMENDMENT.—Section

23 402(a)(8)(A)(vi) of such Act (42 U.S.C. 602(a)(8)(A)(vi))

24 is amended by striking ‘‘$50’’ each place such term ap25 pears and inserting ‘‘$100’’.
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1 Subtitle C—Improvement of Child

2 Support Order Establishment

3 Process

4 SEC. 421. NATIONAL CHILD SUPPORT GUIDELINES COMMIS5 SION.

6 (a) ESTABLISHMENT.—There is hereby established a

7 commission to be known as the ‘‘National Child Support

8 Guidelines Commission’’ (in this section referred to as the

9 ‘‘Commission’’).

10 (b) GENERAL DUTIES.—The Commission shall con11 vene a conference to study the desirability of a national

12 child support guideline, and if such guideline is advisable,

13 the Commission shall develop for congressional consider14 ation a national child support guideline that is based on

15 the conference’s study of various guideline models, the de16 ficiencies of such models, and any needed improvements,

17 taking into consideration differences in the cost of living

18 in different areas of the United States. In developing such

19 guideline, the Commission shall consider indexing the

20 guideline to the cost of living, specifying minimum (rather

21 than maximum) amounts, or using other methodologies to

22 reflect such differences.

23 (c) MEMBERSHIP.—

24 (1) NUMBER; APPOINTMENT.—
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1 (A) IN GENERAL.—The Commission shall

2 be composed of 9 individuals appointed jointly

3 by the Secretary of Health and Human Services

4 and the Congress, not later than January 15,

5 1995.

6 (B) QUALIFICATIONS OF MEMBERS.—

7 Members of the Commission shall be appointed

8 from among those who are able to provide ex9 pertise and experience in the evaluation and de10 velopment of child support guidelines.

11 (2) TERMS OF OFFICE.—Each member shall be

12 appointed for a term of 2 years. A vacancy in the

13 Commission shall be filled in the manner in which

14 the original appointment was made.

15 (d) COMMISSION POWERS, COMPENSATION, ACCESS

16 TO INFORMATION, AND SUPERVISION.—The first sentence

17 of subparagraph (C), the first and third sentences of sub18 paragraph (D), subparagraph (F) (except with respect to

19 the conduct of medical studies), clauses (ii) and (iii) of

20 subparagraph (G), and subparagraph (H) of section

21 1886(e)(6) of the Social Security Act shall apply to the

22 Commission in the same manner in which such provisions

23 apply to the Prospective Payment Assessment Commis24 sion.
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1 (e) REPORT.—Not later than 2 years after the ap2 pointment of members, the Commission shall submit to

3 the President, the Committee on Ways and Means of the

4 House of Representatives, and the Committee on Finance

5 of the Senate, a report on the results of the study de6 scribed in subsection (b) and the final assessment by the

7 Commission of issues relating to a national child support

8 guideline.

9 (f) TERMINATION.—The Commission shall terminate

10 upon the submission of the report described in subsection

11 (e).

12 Subtitle D—Child Support

13 Enforcement

14 SEC. 431. NATIONAL REPORTING OF NEW HIRES AND CHILD

15 SUPPORT INFORMATION.

16 (a) FEDERAL IMPLEMENTATION OF SYSTEM.—

17 (1) IN GENERAL.—The Secretary of the Treas18 ury, in consultation with the Secretary of Labor,

19 shall establish a system of reporting of new employ20 ees by requiring employers to provide a copy of every

21 new employee’s W–4 form to the employment secu22 rity agency of the State in which the employment is

23 located.

24 (2) EXPANDED USE OF FORM.—The Secretary

25 of the Treasury shall modify the W–4 form to be
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1 completed by a new employee to enable the employee

2 to indicate on the form—

3 (A) whether the employee owes child sup4 port, and if so—

5 (i) to whom the support is payable

6 and the amount of the support payable;

7 and

8 (ii) whether the support is to be paid

9 through wage withholding; and

10 (B) whether health care insurance is avail11 able to the new employee, and, if so, whether

12 the new employee has obtained such insurance

13 for the dependent children of the new employee.

14 (3) EMPLOYER WITHHOLDING OBLIGATION.—

15 (A) IN GENERAL.—Subtitle C of the Inter16 nal Revenue Code of 1986 (relating to employ17 ment taxes) is amended by inserting after chap18 ter 24 the following new chapter:

19 ‘‘CHAPTER 24A—COLLECTION OF CHILD

20 SUPPORT OBLIGATIONS AT SOURCE

21 ON WAGES

‘‘Sec. 3411. Child support obligations collected at source.
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1 ‘‘SEC. 3411. CHILD SUPPORT OBLIGATIONS COLLECTED AT

2 SOURCE.

3 ‘‘(a) REQUIREMENT OF WITHHOLDING.—Every em4 ployer making payment of wages shall deduct and with5 hold upon such wages a specified child support obligation

6 amount.

7 ‘‘(b) SPECIFIED CHILD SUPPORT OBLIGATION

8 AMOUNT.—For purposes of this chapter, the specified

9 child support obligation amount with respect to any em10 ployee shall be determined based on—

11 ‘‘(1) information provided by the employee, or

12 (if an agency of the State in which the employer is

13 located notifies the employer that such information

14 is inaccurate) information provided by the agency;

15 and

16 ‘‘(2) information contained in any wage with17 holding order received by the employer from any

18 State.

19 ‘‘(c) LIABILITY FOR PAYMENT.—The employer shall

20 be liable for the payment of the specified child support

21 obligation amount to the payee identified by the employee.

22 ‘‘(d) SPECIAL RULES.—For purposes of this chapter

23 (and so much of subtitle F as relates to this chapter), any

24 specified child support obligation amount shall be treated

25 as if it were a tax withheld under chapter 24 and rules

26 similar to the rules of such chapter shall apply.’’.
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1 (B) CLERICAL AMENDMENT.—The table of

2 chapters of subtitle C of the Internal Revenue

3 Code of 1986 is amended by inserting after the

4 item relating to chapter 24 the following new

5 item:

‘‘CHAPTER 24A. Child support obligations collected at source.’’.

6 (4) WITHHELD CHILD SUPPORT OBLIGATIONS

7 REPORTED ON W–2 FORMS.—Subsection (a) of sec8 tion 6051 of the Internal Revenue Code of 1986 (re9 lating to receipts for employees) is amended by

10 striking ‘‘and’’ at the end of paragraph (8), by strik11 ing the period at the end of paragraph (9) and in12 serting ‘‘, and’’, and by inserting after paragraph

13 (9) the following new paragraph:

14 ‘‘(10) the total amount of specified child sup15 port obligations withheld under section 3411.’’.

16 (b) STATE IMPLEMENTATION OF SYSTEM.—Section

17 466(a) of the Social Security Act (42 U.S.C. 666(a)), as

18 amended by sections 402, 404, and 412 of this Act, is

19 amended by inserting after paragraph (14) the following:

20 ‘‘(15) Procedures under which the State shall—

21 ‘‘(A) use the Parent Locator Service estab22 lished under section 453 to access information

23 in the national registry of child support orders

24 maintained pursuant to section 452(a)(11) with

25 respect to new employee, compare such infor-
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1 mation with the information reported on W–4

2 forms of new employees, and identify child sup3 port obligations not reported on such forms;

4 ‘‘(B) if child support information from the

5 W–4 form of a new employee agrees with infor6 mation with respect to the new employee in the

7 national registry of child support orders main8 tained pursuant to section 452(a)(11), notify

9 the individual owed the support (or the individ10 ual’s designee) of such information;

11 ‘‘(C) notify an employer of any new em12 ployee who has not reported on the W–4 form

13 a child support obligation of the new employee,

14 using the wage withholding order developed

15 under section 452(a)(12);

16 ‘‘(D) impose monetary penalties on—

17 ‘‘(i) any individual who owes child

18 support and fails to report the obligation

19 to provide the support on a Federal income

20 tax W–4 form at time of employment;

21 ‘‘(ii) any employer who fails to for22 ward a W–4 form for a new employee to

23 the State employment security agency

24 within 10 calendar days of the date of the
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1 first payroll from which the new employee

2 is paid; and

3 ‘‘(iii) any employer who fails to with4 hold from the pay of any new employee

5 who reports a child support obligation on

6 a W–4 form an amount equal to the sup7 port owed, or fails to pay to the individual

8 owed the obligation the amount so with9 held, within 10 calendar days of the date

10 of the payroll, using electronic funds trans11 fer, if possible, unless otherwise notified by

12 a State agency;

13 ‘‘(E) provide the services described in this

14 paragraph to any individual owed child support

15 who applies for assistance under the State plan;

16 and

17 ‘‘(F) on request of another State, broad18 cast over the Parent Locator Service to such

19 other State child support information from W–

20 4 forms that have been sent to the State em21 ployment security agency.’’.

22 (c) UNIFORM WITHHOLDING ORDER.—Section

23 452(a) of the Social Security Act (42 U.S.C. 652(a)), as

24 amended by section 402(d) of this Act, is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (10);

3 (2) by striking the period at the end of para4 graph (11) and inserting ‘‘; and’’; and

5 (3) by inserting after paragraph (11) the fol6 lowing:

7 ‘‘(12) develop a uniform order to be used in all

8 cases in which income is to be withheld for the pay9 ment of child support, which shall contain the name

10 of the individual whose income is to be withheld, the

11 number of children covered by the order, and the in12 dividual or State to whom the withheld income is to

13 be paid, and be generic to allow for the service of

14 the order on all sources of income.’’.

15 (d) EFFECTIVE DATE.—The amendments made by

16 this section shall take effect on January 1, 1995.

17 SEC. 432. CERTAIN BENEFITS SUBJECT TO GARNISHMENT.

18 (a) FEDERAL DEATH BENEFITS, BLACK LUNG BEN19 EFITS, AND VETERANS BENEFITS.—Section 462(f)(2) of

20 the Social Security Act (42 U.S.C. 662(f)(2)) is amended

21 by striking ‘‘(not including’’ and all that follows through

22 ‘‘compensation)’’.

23 (b) WORKERS’ COMPENSATION.—Section 462(f) of

24 such Act (42 U.S.C. 662(f)) is amended—
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1 (1) by striking ‘‘or’’ at the end of paragraph

2 (1);

3 (2) by striking the period at the end of para4 graph (2) and inserting ‘‘, or’’; and

5 (3) by adding at the end the following:

6 ‘‘(3) workers’ compensation benefits.’’.

7 SEC. 433. SEIZURE OF LOTTERY WINNINGS, SETTLEMENTS,

8 PAYOUTS, AWARDS, AND BEQUESTS, AND

9 SALE OF FORFEITED PROPERTY, TO PAY

10 CHILD SUPPORT ARREARAGES.

11 Section 466(a) of the Social Security Act (42 U.S.C.

12 666(a)), as amended by sections 402, 404, 412, and

13 431(b) of this Act, is amended by inserting after para14 graph (15) the following:

15 ‘‘(16) Procedures, in addition to other income

16 withholding procedures, under which a lien is im17 posed against property with the following effect:

18 ‘‘(A) The distributor of the winnings from

19 a State lottery or State-sanctioned or tribal20 sanctioned gambling house or casino shall—

21 ‘‘(i) suspend payment of the winnings

22 from the person otherwise entitled to the

23 payment until an inquiry is made to and a

24 response is received from the State child

25 support enforcement agency as to whether
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1 the person owes a child support arrearage;

2 and

3 ‘‘(ii) if there is such an arrearage,

4 withhold from the payment the lesser of

5 the amount of the payment or the amount

6 of the arrearage, and pay the amount with7 held to the agency for distribution.

8 ‘‘(B) The person required to make a pay9 ment under a policy of insurance or a settle10 ment of a claim made with respect to the policy

11 shall—

12 ‘‘(i) suspend the payment until an in13 quiry is made to and a response received

14 from the agency as to whether the person

15 otherwise entitled to the payment owes a

16 child support arrearage; and

17 ‘‘(ii) if there is such an arrearage,

18 withhold from the payment the lesser of

19 the amount of the payment or the amount

20 of the arrearage, and pay the amount with21 held to the agency for distribution.

22 ‘‘(C) The payor of any amount pursuant to

23 an award, judgment, or settlement in any ac24 tion brought in Federal or State court shall—
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1 ‘‘(i) suspend the payment of the

2 amount until an inquiry is made to and a

3 response is received from the agency as to

4 whether the person otherwise entitled to

5 the payment owes a child support arrear6 age; and

7 ‘‘(ii) if there is such an arrearage,

8 withhold from the payment the lesser of

9 the amount of the payment or the amount

10 of the arrearage, and pay the amount with11 held to the agency for distribution.

12 ‘‘(D) If the State seizes property forfeited

13 to the State by an individual by reason of a

14 criminal conviction, the State shall—

15 ‘‘(i) hold the property until an inquiry

16 is made to and a response is received from

17 the agency as to whether the individual

18 owes a child support arrearage; and

19 ‘‘(ii) if there is such an arrearage, sell

20 the property and, after satisfying the

21 claims of all other private or public claim22 ants to the property and deducting from

23 the proceeds of the sale the attendant costs

24 (such as for towing, storage, and the sale),

25 pay the lesser of the remaining proceeds or
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1 the amount of the arrearage directly to the

2 agency for distribution.

3 ‘‘(E) Any person required to make a pay4 ment in respect of a decedent shall—

5 ‘‘(i) suspend the payment until an in6 quiry is made to and a response received

7 from the agency as to whether the person

8 otherwise entitled to the payment owes a

9 child support arrearage; and

10 ‘‘(ii) if there is such an arrearage,

11 withhold from the payment the lesser of

12 the amount of the payment or the amount

13 of the arrearage, and pay the amount with14 held to the agency for distribution.’’.

15 SEC. 434. REPORTING OF CHILD SUPPORT ARREARAGES TO

16 CREDIT BUREAUS.

17 Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amend18 ed—

19 (1) by inserting ‘‘(A)’’ after ‘‘(7)’’;

20 (2) by redesignating subparagraphs (A), (B),

21 and (C) as clauses (i), (ii), and (iii), respectively;

22 and

23 (3) by adding after and below the end the fol24 lowing:
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1 ‘‘(B) Procedures requiring any court or admin2 istrative agency of the State, at the time the court

3 or agency issues or modifies a child support order,

4 to report to each consumer reporting agency (as so

5 defined)—

6 ‘‘(i) the name of the individual on whom

7 the order imposes an obligation to pay child

8 support pursuant to the order; and

9 ‘‘(ii) the amount of the obligation.’’.

10 SEC. 435. LIABILITY OF GRANDPARENTS FOR FINANCIAL

11 SUPPORT OF CHILDREN OF THEIR MINOR

12 CHILDREN.

13 Section 466(a) of the Social Security Act (42 U.S.C.

14 666(a)), as amended by sections 402, 404, 412, 431(b),

15 and 433 of this Act, is amended by inserting after para16 graph (16) the following:

17 ‘‘(17) Procedures under which each parent of

18 an individual who has not attained 18 years of age

19 is liable for the financial support of any child of the

20 individual to the extent that the individual is unable

21 to provide such support. The preceding sentence

22 shall not apply to the State if the State plan explic23 itly provides for such inapplicability.’’.
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1 SEC. 436. SENSE OF THE CONGRESS REGARDING PRO2 GRAMS FOR NONCUSTODIAL PARENTS UN3 ABLE TO MEET CHILD SUPPORT OBLIGA4 TIONS.

5 It is the sense of the Congress that the States should

6 develop programs, such as the program of the State of

7 Wisconsin known as the ‘‘Children’s First Program’’, that

8 are designed to work with noncustodial parents who are

9 unable to meet their child support obligations.

10 TITLE V—TEEN PREGNANCY

11 AND FAMILY STABILITY

12 Subtitle A—Federal Role

13 SEC. 501. STATE OPTION NOT TO DENY AFDC FOR ADDI14 TIONAL CHILDREN.

15 Section 402(a) of the Social Security Act (42 U.S.C.

16 602(a)), as amended by sections 101, 102(a), 211(a), 224,

17 232, 243(a), and 301(a) of this Act, is amended—

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

19 (51);

20 (2) by striking the period at the end of para21 graph (52) and inserting ‘‘; and’’; and

22 (3) by inserting after paragraph (52) the fol23 lowing:

24 ‘‘(53)(A) provide that, notwithstanding para25 graph (7)(A), the needs of a child shall not be taken

26 into account in making the determination under
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1 paragraph (7) with respect to the family of the child

2 if the child was born (other than as a result of rape

3 or incest) to a member of the family—

4 ‘‘(i) while the family was a recipient of aid

5 under the State plan; or

6 ‘‘(ii) during the 6-month period ending

7 with the date the family applied for such aid;

8 except that

9 ‘‘(B) subparagraph (A) shall not apply to the

10 State if the State plan explicitly provides for such

11 inapplicability.’’.

12 SEC. 502. MINORS RECEIVING AFDC REQUIRED TO LIVE

13 UNDER RESPONSIBLE ADULT SUPERVISION.

14 Section 402(a)(43) of the Social Security Act (42

15 U.S.C. 602(a)(43)) is amended—

16 (1) by striking ‘‘at the option of the State,’’;

17 and

18 (2) by striking ‘‘18’’ and inserting ‘‘19’’.

19 SEC. 503. TASK FORCE TO REDUCE TEENAGE PREGNANCY.

20 The Secretary of Education, in conjunction with the

21 Secretary of Health and Human Services, shall establish

22 a task force to—

23 (1) educate children regarding the risks in24 volved in choosing parenthood at an early age;
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1 (2) ensure that every potential parent is given

2 the opportunity to avoid unintended births through

3 reproductive family planning and education;

4 (3) encourage States to use funds received

5 under title XX of the Social Security Act for com6 prehensive services to youth in high risk areas

7 through community organizations, and schools; and

8 (4) encourage States to work with schools for

9 the early identification and referral of children at

10 risk for parenthood at an early age.

11 SEC. 504. INCENTIVE FOR TEEN PARENTS TO ATTEND

12 SCHOOL.

13 Section 402(a) of the Social Security Act (42 U.S.C.

14 602(a)), as amended by sections 101, 102(a), 211(a), 224,

15 232, 243(a), 301(a), and 501 of this Act, is amended—

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

17 (52);

18 (2) by striking the period at the end of para19 graph (53) and inserting ‘‘; and’’; and

20 (3) by inserting after paragraph (53) the fol21 lowing:

22 ‘‘(54) provide that the amount of aid otherwise

23 payable under the plan for a month to a family that

24 includes a parent who has not attained 20 years of

25 age and has not completed secondary school (or re-
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1 ceived a certificate of high school equivalency) shall

2 be—

3 ‘‘(A) reduced by 25 percent if, during the

4 immediately preceding month, the parent has

5 failed without good cause (as defined by the

6 State in consultation with the Secretary) to

7 maintain minimum attendance (as defined by

8 the State in consultation with the Secretary) at

9 an educational institution; or

10 ‘‘(B) increased by 25 percent if, during the

11 immediately preceding month, the parent has

12 maintained minimum attendance (as defined by

13 the State in consultation with the Secretary) at

14 an educational institution.’’.

15 SEC. 505. STATE OPTION TO DISREGARD 100–HOUR RULE

16 UNDER AFDC–UP PROGRAM.

17 Section 407(a) of the Social Security Act (42 U.S.C.

18 607(a)) is amended—

19 (1) by inserting ‘‘(1)’’ after ‘‘(a)’’; and

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

21 ‘‘(2) A standard prescribed pursuant to paragraph

22 (1) that imposes a limit on the amount of time during

23 which a parent who is the principal earner in a family

24 in which both parents are married may be employed dur25 ing a month shall not apply to a State if the State plan
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1 under this part explicitly provides for such inapplicabil2 ity.’’.

3 SEC. 506. STATE OPTION TO DISREGARD 6–MONTH LIMITA4 TION ON AFDC–UP BENEFITS.

5 Section 407(b)(2)(B) of the Social Security Act (42

6 U.S.C. 607(b)(2)(B)) is amended by adding at the end

7 the following:

8 ‘‘(iv) A regulation prescribed by the Secretary that

9 limits the length of time with respect to which a family

10 of a dependent child in which both parents are married

11 may receive aid to families with dependent children by rea12 son of this section shall not apply to a State if the State

13 plan under this part explicitly provides for such inapplica14 bility.’’.

15 SEC. 507. ELIMINATION OF QUARTERS OF COVERAGE RE16 QUIREMENT UNDER AFDC–UP PROGRAM FOR

17 FAMILIES IN WHICH BOTH PARENTS ARE

18 TEENS.

19 Section 407(b)(1)(A)(iii) of the Social Security Act

20 (42 U.S.C. 607(b)(1)(A)(iii)) is amended by striking

21 ‘‘(iii)(I)’’ and inserting ‘‘(iii) neither of the child’s parents

22 have attained 20 years of age, and (I)’’.
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1 Subtitle B—State Role

2 SEC. 511. TEENAGE PREGNANCY PREVENTION AND FAMILY

3 STABILITY.

4 (a) FINDINGS.—The Congress finds that—

5 (1) long-term welfare dependency is increasing

6 driven by illegitimate births;

7 (2) too many teens are becoming parents and

8 too few are able to responsibly care for and nurture

9 their children;

10 (3) new research has shown that spending time

11 in a single-parent family puts children at substan12 tially increased risk of dropping out of high school,

13 having a child out-of-wedlock, or being neither in

14 school nor at work; and

15 (4) between 1986 and 1991, the rate of births

16 to teens aged 15 to 19 rose 24 percent, from 50.2

17 to 62.1 births per 1,000 females.

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

19 the Congress that—

20 (1) children should be educated about the risks

21 involved in choosing parenthood at an early age;

22 (2) reproductive family planning and education

23 should be made available to every potential parent so

24 as to give such parents the opportunity to avoid un25 intended births;
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1 (3) States should use funds provided under title

2 XX of the Social Security Act to provide comprehen3 sive services to youth in high risk neighborhoods,

4 through community organizations, churches, and

5 schools; and

6 (4) States should work with schools for the

7 early identification and referral of children at risk

8 for parenthood at an early age.

9 SEC. 512. AVAILABILITY OF FAMILY PLANNING SERVICES.

10 Section 402(a)(15)(A) of the Social Security Act (42

11 U.S.C. 602(a)(15)(A)) is amended by striking ‘‘out of

12 wedlock’’.

13 TITLE VI—PROGRAM

14 SIMPLIFICATION

15 Subtitle A—Increased State

16 Flexibility

17 SEC. 601. STATE OPTION TO PROVIDE AFDC THROUGH

18 ELECTRONIC BENEFIT TRANSFER SYSTEMS.

19 Section 402(a) of the Social Security Act (42 U.S.C.

20 602(a)), as amended by sections 101, 102(a), 211(a), 224,

21 232, 243(a), 301(a), 501, and 504 of this Act, is amend22 ed—

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

24 (53);
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1 (2) by striking the period at the end of para2 graph (54) and inserting ‘‘; and’’; and

3 (3) by inserting after paragraph (54) the fol4 lowing:

5 ‘‘(55) at the option of the State, provide for the

6 payment of aid under the State plan through the use

7 of electronic benefit transfer systems.’’.

8 SEC. 602. DEADLINE FOR ACTION ON APPLICATION FOR

9 WAIVER OF REQUIREMENT APPLICABLE TO

10 PROGRAM OF AID TO FAMILIES WITH DE11 PENDENT CHILDREN.

12 Section 1115 of the Social Security Act (42 U.S.C.

13 1315) is amended by adding at the end the following:

14 ‘‘(e) The Secretary shall approve or deny an applica15 tion for a waiver under this section with respect to a re16 quirement of section 402, not later than 90 days after the

17 Secretary receives the application, unless otherwise agreed

18 upon by the Secretary and the applicant.’’.

19 Subtitle B—Coordination of AFDC

20 and Food Stamp Programs

21 SEC. 611. AMENDMENTS TO PART A OF TITLE IV OF THE SO22 CIAL SECURITY ACT.

23 (a) STATE OPTION TO USE INCOME AND ELIGI24 BILITY VERIFICATION SYSTEM.—Section 1137(b) of the

25 Social Security Act (42 U.S.C. 1320b–7(b)) is amended—
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1 (1) by striking paragraphs (1) and (4), and re2 designating paragraphs (2), (3), and (5) as para3 graphs (1), (2), and (3), respectively; and

4 (2) in paragraph (2) (as so redesignated), by

5 adding ‘‘or’’ at the end.

6 (b) STATE OPTION TO USE RETROSPECTIVE BUDG7 ETING WITHOUT MONTHLY REPORTING.—Section

8 402(a)(13) of such Act (42 U.S.C. 602(a)(13)) is amend9 ed—

10 (1) by striking all that precedes subparagraph

11 (A) and inserting the following:

12 ‘‘(13) provide, at the option of the State and

13 with respect to such category or categories as the

14 State may select and identify in the State plan,

15 that—’’; and

16 (2) in each of subparagraphs (A) and (B), by

17 striking ‘‘, in the case of families who are required

18 to report monthly to the State agency pursuant to

19 paragraph (14)’’.

20 (c) EXCLUSION FROM INCOME OF ALL INCOME OF

21 DEPENDENT CHILD WHO IS A STUDENT.—Section

22 402(a)(8)(A)(i) of such Act (42 U.S.C. 602(a)(8)(A)(i))

23 is amended—

24 (1) by striking ‘‘earned’’; and
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1 (2) by inserting ‘‘applying for or’’ before ‘‘re2 ceiving’’.

3 (d) EXCLUSION FROM INCOME OF ENERGY ASSIST4 ANCE PAYMENTS BASED ON NEED.—Section

5 402(a)(8)(A) of such Act (42 U.S.C. 602(a)(8)(A)), as

6 amended by sections 231 and 242(b)(1) of this Act, is

7 amended—

8 (1) by striking ‘‘and’’ at the end of clause (ix);

9 and

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

11 ‘‘(xi) shall disregard any energy or utility12 cost assistance payment based on need, that is

13 paid to any member of the family under—

14 ‘‘(I) a State or local general assist15 ance program; or

16 ‘‘(II) another basic assistance pro17 gram comparable to general assistance (as

18 determined by the Secretary); and’’.

19 (e) APPLICABILITY TO AFDC OF FUTURE INCOME

20 EXCLUSIONS UNDER FOOD STAMP PROGRAM.—Section

21 402(a)(8)(A) of such Act (42 U.S.C. 602(a)(8)(A)), as

22 amended by sections 231 and 242(b)(1) of this Act and

23 by subsection (d) of this section, is amended—

24 (1) by striking ‘‘and’’ at the end of clause (x);

25 and
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1 (2) by adding at the end the following:

2 ‘‘(xii) shall disregard from the income of

3 any child, relative, or other individual described

4 in clause (ii) applying for aid under the State

5 plan, any child, relative, or other individual so

6 described receiving such aid, or both, any funds

7 that a Federal statute (enacted after the date

8 of the enactment of this clause) excludes from

9 income for purposes of determining eligibility

10 for benefits under the food stamp program

11 under the Food Stamp Act of 1977, the level of

12 benefits under the program, or both, respec13 tively.’’.

14 (f) EXCLUSION OF EARNINGS FROM STATE TRAIN15 ING PROGRAMS UNDER THE JOB TRAINING PARTNER16 SHIP ACT.—Section 402(a)(8)(A)(v) of such Act (42

17 U.S.C. 602(a)(8)(A)(v)) is amended to read as follows:

18 ‘‘(v) with respect to earned income from an

19 on-the-job training program under section

20 204(b)(1)(C) or 264(c)(1)(A) of the Job Train21 ing Partnership Act—

22 ‘‘(I) shall disregard such earned in23 come received by any dependent child ap24 plying for or receiving aid to families with

25 dependent children; and
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1 ‘‘(II) notwithstanding section 142(b)

2 of the Job Training Partnership Act, shall

3 not disregard such earned income received

4 by any other individual (living in the same

5 home as the dependent child) whose needs

6 are taken into account in making such de7 termination;’’.

8 (g) USE OF FOOD STAMP PROGRAM LUMP-SUM PAY9 MENT RULE.—Section 402(a)(17) of such Act (42 U.S.C.

10 602(a)(17)) is amended by inserting ‘‘(excluding income

11 tax refunds, rebates, or credits, cash donations based on

12 need that are received from 1 or more private nonprofit

13 charitable organizations, but not in excess of $300 in the

14 aggregate in a quarter, retroactive lump-sum social secu15 rity or railroad retirement pension payments and retro16 active lump-sum insurance settlements)’’ after ‘‘unearned

17 income’’.

18 (h) PERIODIC REVIEWS.—Section 402(a) of such Act

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

20 211(a), 224, 232, 243(a), 301(a), 501, 504, and 601 of

21 this Act, is amended—

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

23 (54);

24 (2) by striking the period at the end of para25 graph (55) and inserting ‘‘; and’’; and
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1 (3) by inserting after paragraph (55) the fol2 lowing:

3 ‘‘(56) provide that the State shall, not less fre4 quently than annually review each determination

5 made under the State plan with respect to the eligi6 bility of each recipient of aid under the State plan;’’.

7 (i) EXCLUSION FROM RESOURCES OF ESSENTIAL

8 EMPLOYMENT-RELATED PROPERTY.—Section

9 402(a)(7)(B) of such Act (42 U.S.C. 602(a)(7)(B)), as

10 amended by section 242(a) of this Act, is amended—

11 (1) by striking ‘‘or’’ at the end of clause (iv);

12 and

13 (2) by inserting ‘‘, or (vi) the value of real and

14 tangible personal property (other than currency,

15 commercial paper, and similar property) of a family

16 member that is essential to the employment or self17 employment of the member, until the expiration of

18 the 1-year period beginning on the date the member

19 ceases to be so employed or so self-employed’’ before

20 the semicolon.

21 (j) EXCLUSION FROM RESOURCES OF EQUITY IN

22 CERTAIN INCOME-PRODUCING REAL PROPERTY.—Sec23 tion 402(a)(7)(B) of such Act (42 U.S.C. 602(a)(7)(B)),

24 as amended by section 242(a) of this Act and by sub25 section (i) of this section, is amended—
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1 (1) by striking ‘‘or’’ at the end of clause (v);

2 and

3 (2) by inserting ‘‘, or (vii) the equity of any

4 member of the family in real property to which 1 or

5 more members of the family have sole and clear title,

6 that the State agency determines is producing in7 come consistent with the fair market value of the

8 property’’ before the semicolon.

9 (k) EXCLUSION FROM RESOURCES OF LIFE INSUR10 ANCE POLICIES.—Section 402(a)(7)(B) of such Act (42

11 U.S.C. 602(a)(7)(B)), as amended by section 242(a) of

12 this Act and by subsections (i) and (j) of this section, is

13 amended—

14 (1) by striking ‘‘or’’ at the end of clause (vi);

15 and

16 (2) by inserting ‘‘, or (viii) any life insurance

17 policy’’ before the semicolon.

18 (l) EXCLUSION FROM RESOURCES OF REAL PROP19 ERTY THAT THE FAMILY IS MAKING A GOOD FAITH EF20 FORT TO SELL.—Section 402(a)(7)(B)(iii) of such Act (42

21 U.S.C. 602(a)(7)(B)(iii)) is amended—

22 (1) by striking ‘‘for such period or periods of

23 time as the Secretary may prescribe’’; and
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1 (2) by striking ‘‘any such period’’ and inserting

2 ‘‘any period during which the family is making such

3 an effort’’.

4 (m) PROMPT RESTORATION OF BENEFITS WRONG5 FULLY DENIED.—Section 402(a) of such Act (42 U.S.C.

6 602(a)), as amended by sections 101, 102(a), 211(a), 224,

7 232, 243(a), 301(a), 501, 504, and 601 of this Act and

8 by subsection (h) of this section, is amended—

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

10 (55);

11 (2) by striking the period at the end of para12 graph (56) and inserting ‘‘; and’’; and

13 (3) by inserting after paragraph (56) the fol14 lowing:

15 ‘‘(57) provide that, upon receipt of a request

16 from a family for the payment of any amount of aid

17 under the State plan the payment of which to the

18 family has been wrongfully denied or terminated, the

19 State shall promptly pay the amount to the family

20 if the wrongful denial or termination occurred not

21 more than 1 year before the date of the request or

22 the date the State agency is notified or otherwise

23 discovers the wrongful denial or termination.’’.
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1 SEC. 612. AMENDMENTS TO THE FOOD STAMP ACT OF 1977.

2 (a) CERTIFICATION PERIOD.—(1) Section 3(c) of the

3 Food Stamp Act of 1977 (7 U.S.C. 2012(c)) is amended

4 to read as follows:

5 ‘‘(c) ‘Certification period’ means the period specified

6 by the State agency for which households shall be eligible

7 to receive authorization cards, except that such period

8 shall be—

9 ‘‘(1) 24 months for households in which all

10 adult members are elderly or disabled; and

11 ‘‘(2) not more than 12 months for all other

12 households.’’.

13 (2) Section 6(c)(1)(C) of the Food Stamp Act of

14 1977 (7 U.S.C. 2015(c)(1)(C)) is amended—

15 (A) in clause (ii) by adding ‘‘and’’ at the end;

16 (B) in clause (iii) by striking ‘‘; and’’ at the end

17 and inserting a period; and

18 (C) by striking clause (iv).

19 (b) EXCLUSION OF CERTAIN JTPA INCOME.—Sec20 tion 5(d) of the Food Stamp Act of 1977 (7 U.S.C.

21 2014(d)) is amended—

22 (1) by striking ‘‘and (16)’’ and inserting

23 ‘‘(16)’’; and

24 (2) by inserting before the period the following:
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1 ‘‘, and (17) income received under the Job Training Part2 nership Act by a household member who is less than 19

3 years of age’’.

4 (c) EXCLUSION OF EDUCATIONAL ASSISTANCE FROM

5 INCOME.—Section 5(d)(3) of the Food Stamp Act of 1977

6 (7 U.S.C. 2014(d)(3)) is amended to read as follows: ‘‘(3)

7 all educational loans on which payment is deferred (includ8 ing any loan origination fees or insurance premiums asso9 ciated with such loans), grants, scholarships, fellowships,

10 veterans’ educational benefits, and the like awarded to a

11 household member enrolled at a recognized institution of

12 post-secondary education, at a school for the handicapped,

13 in a vocational education program, or in a program that

14 provides for completion of a secondary school diploma or

15 obtaining the equivalent thereof,’’.

16 (d) LIMITATION ON ADDITIONAL EARNED INCOME

17 DEDUCTION.—The 3rd sentence of section 5(e) of the

18 Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is amended

19 by striking ‘‘that a household’’ and all that follows

20 through ‘‘report’’, and inserting ‘‘determining an

21 overissuance due to the failure of a household to report

22 earned income’’.

23 (e) SHELTER EXPENSE DEDUCTION.—Section 5(e)

24 of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is

25 amended—
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1 (1) by amending paragraph (2) of the 4th sen2 tence to read as follows:‘‘(2) a shelter expense de3 duction for the monthly amount expended by a

4 household for shelter’’;

5 (2) by striking the 5th and 6th sentences and

6 inserting the following:‘‘In computing the shelter ex7 pense deduction, a State may use a standard shelter

8 expense deduction based on the actual shelter ex9 penses incurred monthly by all households in the

10 State in the preceding year, except that the shelter

11 expense deduction shall be the actual shelter expense

12 incurred monthly by a household if such household

13 is located in public housing or verifies that it in14 curred shelter expenses monthly in excess of the

15 amount of such standard shelter expense.’’;

16 (3) in the 7th sentence by striking ‘‘excess’’;

17 and

18 (4) in the last sentence by striking ‘‘excess’’.

19 (f) REPEAL OF EXCESS MEDICAL EXPENSE DEDUC20 TION.—Section 5(e) of the Food Stamp Act of 1977 (7

21 U.S.C. 2014(e)) is amended—

22 (1) in the 15th sentence—

23 (A) by striking subparagraph (A); and
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1 (B) by redesignating subparagraphs (B)

2 and (C) as subparagraphs (A) and (B), respec3 tively; and

4 (2) by striking the 16th and 17th sentences.

5 (g) EXCLUSION OF ESSENTIAL EMPLOYMENT-RE6 LATED PROPERTY.—Section 5(g)(3) of the Food Stamp

7 Act of 1977 (7 U.S.C. 2014(g)(3)) is amended to read

8 as follows:

9 ‘‘(3) The value of real and tangible personal property

10 (other than currency, commercial paper, and similar prop11 erty) of a household member that is essential to the em12 ployment or self-employment of such member shall be ex13 cluded by the Secretary from financial resources until the

14 expiration of the 1-year period beginning on the date such

15 member ceases to be so employed or so self-employed.’’.

16 (h) EXCLUSION OF LIFE INSURANCE POLICIES.—

17 Section 5(g) of the Food Stamp Act of 1977 (7 U.S.C.

18 2014(g)) is amended by adding at the end the following:

19 ‘‘(6) The Secretary shall exclude from financial re20 sources the cash value of any life insurance policy owned

21 by a member of a household.’’.

22 (i) IN-TANDEM EXCLUSIONS FROM INCOME.—Sec23 tion 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014)

24 is amended by adding at the end the following:
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1 ‘‘(n) Whenever a Federal statute enacted after the

2 date of the enactment of this Act excludes funds from in3 come for purposes of determining eligibility, benefit levels,

4 or both under State plans approved under part A of title

5 IV of the Social Security Act, then such funds shall be

6 excluded from income for purposes of determining eligi7 bility, benefit levels, or both, respectively, under the food

8 stamp program of households all of whose members re9 ceive benefits under a State plan approved under part A

10 of title IV of the Social Security Act.’’.

11 (j) REMOVAL OF DISQUALIFICATION OF STUDENTS

12 RECEIVING GENERAL ASSISTANCE.—Section 6(e) of the

13 Food Stamp Act of 1977 (7 U.S.C. 2015(e)) is amended—

14 (1) in paragraph (7) by striking ‘‘or’’ at the

15 end;

16 (2) in paragraph (8) by striking the period at

17 the end and inserting ‘‘; or’’; and

18 (3) by adding at the end the following:

19 ‘‘(9) is receiving general assistance under a

20 State or local program.’’.

21 (k) APPLICATION OF AMENDMENTS.—The amend22 ments made by this section shall not apply with respect

23 to certification periods beginning before the effective date

24 of this section.
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1 Subtitle C—Fraud Reduction

2 SEC. 631. SENSE OF THE CONGRESS IN SUPPORT OF THE

3 EFFORTS OF THE ADMINISTRATION TO AD4 DRESS THE PROBLEMS OF FRAUD AND

5 ABUSE IN THE SUPPLEMENTAL SECURITY IN6 COME PROGRAM.

7 The Congress hereby expresses support for the efforts

8 of the Social Security Administration to reduce fraud and

9 abuse in the supplemental security income program under

10 title XVI of the Social Security Act by implementing a

11 structured approach to disability decisionmaking that

12 takes into consideration the large number of disability

13 claims received while providing a basis for consistent, equi14 table decisionmaking by claims adjudicators at each level,

15 that provides for the following:

16 (1) A simplification of the monetary guidelines

17 for determining whether an individual (except those

18 filing for benefits based on blindness) is engaging in

19 substantial gainful activity.

20 (2) The replacement of a threshold severity re21 quirement for determining whether a claimant has a

22 medically determinable impairment with a threshold

23 inquiry as to whether the claimant has a medically

24 determinable physical or mental impairment that
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1 can be demonstrated by acceptable clinical and lab2 oratory diagnostic techniques.

3 (3) The comparison of an impairment referred

4 to in paragraph (2) with an index of disabling im5 pairments that contains fewer impairments, has less

6 detail and complexity, and does not rely on the con7 cept of ‘‘medical equivalence’’.

8 (4)(A) The consideration of whether an individ9 ual has the ability to perform substantial gainful ac10 tivity despite any functional loss caused by a medi11 cally determinable physical or mental impairment.

12 (B) The definition of the physical and mental

13 requirements of substantial gainful activity.

14 (C) The objective measurement, to the extent

15 possible, of whether an individual meets such re16 quirements.

17 (D) The development, with the assistance of the

18 medical community and other outside experts from

19 disability programs, of standardized criteria which

20 can be used to measure an individual’s functional

21 ability.

22 (E) The assumption by the Social Security Ad23 ministration of primary responsibility for document24 ing functional ability using the standardized meas25 urement criteria, with the goal of developing func-
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1 tional assessment instruments that are standardized,

2 accurately measure an individual’s functional abili3 ties, and are universally accepted by the public, the

4 advocacy community, and health care professionals.

5 (F) The use of the results of the standardized

6 functional measurement with a new standard to de7 scribe basic physical and mental demands of a base8 line of work that represents substantial gainful ac9 tivity and that exists in significant numbers in the

10 national economy.

11 (5)(A) An evaluation of whether a child is en12 gaging in substantial gainful activity, whether a

13 child has a medically determinable physical or men14 tal impairment that will meet the duration require15 ment, and whether a child has an impairment that

16 meets the criteria in the index of disabling impair17 ments.

18 (B) The development, with the assistance of the

19 medical community and educational experts, of

20 standardized criteria which can be used to measure

21 a child’s functional ability to perform a baseline of

22 functions that are comparable to the baseline of oc23 cupational demands for an adult.

24 (C) The conduct of research to specifically iden25 tify a skill acquisition threshold to measure broad
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1 areas required to develop the ability to perform sub2 stantial gainful activity.

3 SEC. 632. STUDY ON FEASIBILITY OF SINGLE TAMPER4 PROOF IDENTIFICATION CARD TO SERVE

5 PROGRAMS UNDER BOTH THE SOCIAL SECU6 RITY ACT AND HEALTH REFORM LEGISLA7 TION.

8 (a) STUDY.—As soon as practicable after the date of

9 the enactment of this Act, the Secretary of Health and

10 Human Services shall conduct a study of the feasibility

11 of issuing, in counterfeit-resistant form, a single identi12 fication card which would combine the features of the so13 cial security card now issued pursuant to section 205 of

14 the Social Security Act and any health security card which

15 may be provided for in health reform legislation enacted

16 in the 103d Congress. In such study, the Secretary shall

17 devote particular consideration to—

18 (1) employment in such card of finger-print

19 identification, bar code validation, a photograph, a

20 hologram, or any other identifiable feature,

21 (2) the efficiencies and economies which may be

22 achieved by combining the features of the social se23 curity card as currently issued and the features of

24 any health security card which might be issued

25 under health reform legislation, and
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1 (3) any costs and risks which might result from

2 combining such features in a single identification

3 card and possible means of alleviating any such

4 costs and risks.

5 (b) REPORT.—The Secretary of Health and Human

6 Services shall, not later than 1 year after the date of the

7 enactment of this Act, transmit a report to each House

8 of the Congress setting forth the Secretary’s findings from

9 the study conducted pursuant to subsection (a). Such re10 port may include such recommendations for administrative

11 or legislative changes as the Secretary considers appro12 priate.

13 TITLE VII—FINANCING

14 Subtitle A—Ineligibility of Certain

15 Aliens for Certain Social Services

16 SEC. 701. CERTAIN ALIENS INELIGIBLE FOR AID TO FAMI17 LIES WITH DEPENDENT CHILDREN.

18 (a) IN GENERAL.—Section 402(a)(33) of the Social

19 Security Act (42 U.S.C. 602(a)) is amended—

20 (1) by redesignating subparagraphs (A) and

21 (B) as clauses (i) and (ii), respectively;

22 (2) by inserting ‘‘(A)’’ after ‘‘(33)’’;

23 (3) by adding ‘‘and’’ at the end; and

24 (4) by adding after and below the end the fol25 lowing:
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1 ‘‘(B) provide that—

2 ‘‘(i) notwithstanding subparagraph (A), an

3 alien otherwise eligible for aid under the State

4 plan shall not be eligible for such aid—

5 ‘‘(I) after the 6-year period that be6 gins with the date the alien is admitted to

7 the United States, in the case of an alien

8 who has qualified for entry pursuant to

9 section 207 of the Immigration and Na10 tionality Act; or

11 ‘‘(II) after the 6-year period that be12 gins with the date the alien is granted asy13 lum, in the case of an alien who has ap14 plied for asylum under section 208 of the

15 Immigration and Nationality Act; and

16 ‘‘(ii) clause (i) shall not apply to an alien

17 who has attained 75 years of age and has re18 sided in the United States for at least 5

19 years.’’.

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

21 subsection (a) shall take effect on October 1, 1995.
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1 SEC. 702. CERTAIN ALIENS INELIGIBLE FOR SUPPLE2 MENTAL SECURITY INCOME BENEFITS.

3 (a) IN GENERAL.—Section 1614(a) of the Social Se4 curity Act (42 U.S.C. 1382c(a)) is amended by adding at

5 the end the following:

6 ‘‘(5)(A) Notwithstanding any other provision of this

7 title, an alien otherwise eligible for benefits under this title

8 shall not be eligible for such benefits—

9 ‘‘(i) after the 6-year period that begins with the

10 date the alien is admitted to the United States, in

11 the case of an alien who has qualified for entry pur12 suant to section 207 of the Immigration and Nation13 ality Act; or

14 ‘‘(ii) after the 6-year period that begins with

15 the date the alien is granted asylum, in the case of

16 an alien who has applied for asylum under section

17 208 of the Immigration and Nationality Act.

18 ‘‘(B) Subparagraph (A) shall not apply to an alien

19 who has attained 75 years of age and has resided in the

20 United States for at least 5 years.’’.

21 (b) EFFECTIVE DATE.—The amendment made by

22 subsection (a) shall take effect on October 1, 1995.
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1 SEC. 703. ILLEGAL ALIENS NOT ELIGIBLE FOR EARNED IN2 COME TAX CREDIT.

3 (a) IN GENERAL.—Paragraph (1) of section 32(c) of

4 the Internal Revenue Code of 1986 is amended by adding

5 at the end the following new subparagraph:

6 ‘‘(E) EXCEPTION FOR INDIVIDUALS NOT

7 LAWFULLY ADMITTED.—The term ‘eligible indi8 vidual’ shall not include any alien unless such

9 alien is lawfully present in the United States

10 (or has been granted asylum in the United

11 States) and, under the provisions of the Immi12 gration and Nationality Act governing such

13 alien’s presence in the United States, is per14 mitted to be employed.’’.

15 (b) EFFECTIVE DATE.—The amendment made by

16 subsection (a) shall apply to taxable years beginning after

17 the date of the enactment of this Act.

18 SEC. 704. DISQUALIFICATION OF CERTAIN ALIENS TO RE19 CEIVE FOOD STAMP BENEFITS.

20 (a) AMENDMENT.—Section 6 of the Food Stamp Act

21 of 1977 (7 U.S.C. 2015) is amended by adding at the end

22 the following:

23 ‘‘(i)(1) Except as provided in paragraph (2), an alien

24 who is otherwise eligible to participate in the food stamp

25 program shall not be eligible to participate in the food

26 stamp program—
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1 ‘‘(A) after the expiration of the 6-year period

2 beginning on the date such alien is admitted to the

3 United States, in the case of an alien who has quali4 fied for entry pursuant to section 207 of the Immi5 gration and Nationality Act; and

6 ‘‘(B) after the expiration of the 6-year period

7 beginning on the date such alien is granted asylum,

8 in the case of an alien who has applied for asylum

9 under section 208 of the Immigration and National10 ity Act.

11 ‘‘(2) Paragraph (1) shall not apply with respect to

12 an alien who is 75 years of age or older and has resided

13 in the United States for at least 5 years.’’.

14 (b) EFFECTIVE DATE; APPLICATION OF AMEND15 MENT.—The amendment made by subsection (a) shall

16 take effect on October 1, 1995 and shall not apply with

17 respect to certification periods beginning before such date.

18 SEC. 705. CERTAIN ALIENS INELIGIBLE FOR MEDICAL AS19 SISTANCE UNDER MEDICAID.

20 (a) IN GENERAL.—Section 1903(v) of the Social Se21 curity Act (42 U.S.C. 1396b(v)(1)) is amended—

22 (1) in paragraph (1)—

23 (A) by striking ‘‘paragraph (2)’’ and in24 serting ‘‘paragraphs (2) and (3)’’, and
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1 (B) by striking ‘‘who is not lawfully admit2 ted’’ and all that follows and inserting a period;

3 (2) in paragraph (2), by striking ‘‘described in

4 paragraph (1)’’; and

5 (3) by adding at the end the following new

6 paragraph:

7 ‘‘(4) The limitation on payments provided under

8 paragraph (1) shall not apply with respect to medical as9 sistance furnished to an alien—

10 ‘‘(A) who is 75 years of age or older and has

11 resided in the United States for at least 5 years; and

12 ‘‘(B)(i) in the case of an alien who has qualified

13 for entry pursuant to section 207 of the Immigra14 tion and Nationality Act, during the 6-year period

15 beginning on the date such alien is admitted to the

16 United States; or

17 ‘‘(ii) in the case of an alien who has applied for

18 asylum under section 208 of the Immigration and

19 Nationality Act, during the 6-year period beginning

20 on the date the alien is granted asylum.’’.

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

22 this section shall apply to medical assistance furnished

23 during quarters beginning on or after October 1, 1995,

24 without regard to whether or not regulations to carry out

25 such amendments have been promulgated by such date.
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1 Subtitle B—Other Provisions

2 Relating to Aliens

3 SEC. 711. SPONSOR RESPONSIBILITY FOR COSTS OF GEN4 ERAL CASH PUBLIC ASSISTANCE PROVIDED

5 TO AN ALIEN.

6 An affidavit of support or similar document of finan7 cial responsibility with respect to the admission into the

8 United States of an alien under the Immigration and Na9 tionality Act shall provide that the sponsor shall be liable

10 for any costs incurred by any State or a political subdivi11 sion of a State for general cash public assistance provided

12 to such alien until the date on which the alien becomes

13 a citizen of the United States.

14 SEC. 712. ENFORCEMENT OF AFFIDAVITS OF SUPPORT OR

15 FINANCIAL RESPONSIBILITY BY STATE AND

16 LOCAL GOVERNMENTS PROVIDING ASSIST17 ANCE.

18 An affidavit of support or document of financial re19 sponsibility referred to in section 711 may be enforced

20 with respect to an alien against the alien’s sponsor in a

21 civil suit brought by the Attorney General or a State or

22 political subdivision of a State in the United States district

23 court for the district in which the sponsor resides for the

24 recovery of any costs incurred by any State or political

25 subdivision of a State for general cash public assistance
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1 provided to such alien for which the sponsor agreed to be

2 liable under such an affidavit or document. A sponsor or

3 the sponsor’s estate shall not be liable under such an affi4 davit or document if the sponsor dies or is adjudicated

5 a bankrupt under title 11, United States Code.

6 SEC. 713. AUTHORITY TO STATES AND LOCALITIES TO

7 LIMIT ASSISTANCE TO ALIENS AND TO DIS8 TINGUISH AMONG CLASSES OF ALIENS IN

9 PROVIDING GENERAL PUBLIC ASSISTANCE.

10 (a) IN GENERAL.—Subject to subsection (b) and not11 withstanding any other provision of law, a State or local

12 government may prohibit or otherwise limit or restrict the

13 eligibility of aliens or classes of aliens for programs of gen14 eral public assistance furnished under the law of the State

15 or a political subdivision of a State.

16 (b) LIMITATION.—The authority under subsection (a)

17 may be exercised only to the extent that any prohibitions,

18 limitations, or restrictions are not inconsistent with the

19 eligibility requirements for comparable Federal programs

20 or are less restrictive. For the purposes of this section,

21 attribution to an alien of a sponsor’s income and resources

22 for purposes of determining the eligibility for and amount

23 of benefits of an alien shall be considered less restrictive

24 than a prohibition of eligibility.
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1 SEC. 714. FEDERAL FINANCIAL ASSISTANCE TO STATES

2 FOR ASSISTANCE TO IMMIGRANTS.

3 (a) AUTHORIZATION OF APPROPRIATIONS.—There is

4 authorized to be appropriated for each of the fiscal years

5 1995, 1996, 1997, and 1998 $250,000,000 for financial

6 assistance to States for State discretionary programs of

7 assistance to aliens lawfully admitted for permanent resi8 dence under the Immigration and Nationality Act.

9 (b) ALLOCATION OF FUNDS.—Subject to subsection

10 (c), for each fiscal year funds appropriated under sub11 section (a) shall be allocated as follows:

12 (1) California—$107,114,100.

13 (2) New York—$37,886,750.

14 (3) Florida—$23,852,725.

15 (4) Texas—$17,796,225.

16 (5) New Jersey—$8,146,075.

17 (6) Illinois—$8,083,875.

18 (7) Massachusetts—$7,406,850.

19 (8) Washington—$4,212,100.

20 (9) Pennsylvania—$3,663,175.

21 (10) Maryland—$2,832,450.

22 (11) Michigan—$2,521,400.

23 (12) Virginia—$2,364,025.

24 (13) Arizona—$2,221,325.

25 (14) Minnesota—$1,924,900.

26 (15) Ohio—$1,771,200.
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1 (16) Hawaii—$1,569,925.

2 (17) Colorado—$1,493,075.

3 (18) Connecticut—$1,485,750.

4 (19) Wisconsin—$1,467,450.

5 (20) Oregon—$1,332,050.

6 (21) Georgia—$1,273,500.

7 (22) Rhode Island—$1,028,300.

8 (23) New Mexico—$966,100.

9 (24) Louisiana—$955,125.

10 (25) Nevada—$720,925.

11 (26) North Carolina—$640,400.

12 (27) Missouri—$530,625.

13 (28) Kansas—$457,425.

14 (29) Oklahoma—$373,250.

15 (30) Utah—$384,225.

16 (31) Iowa—$373,250.

17 (32) Tennessee—$347,650.

18 (33) Indiana—$340,325.

19 (34) District of Columbia—$329,350.

20 (35) Alaska—$230,525.

21 (36) South Carolina—$230,525.

22 (37) Kentucky—$208,575.

23 (38) Maine—$204,925.

24 (39) Alabama—$186,625.

25 (40) Nebraska—$164,675.
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1 (41) Mississippi—$157,350.

2 (42) Delaware—$124,400.

3 (43) Arkansas—$113,425.

4 (44) Idaho—$106,125.

5 (45) New Hampshire—$102,450.

6 (46) West Virginia—$69,525.

7 (47) South Dakota—$62,200.

8 (48) Vermont—$43,900.

9 (49) Montana—$43,900.

10 (50) North Dakota—$36,575.

11 (51) Wyoming—22,710.

12 (c) INSUFFICIENT APPROPRIATIONS.—If for any fis13 cal year sums appropriated under subsection (a) are not

14 sufficient to pay the allocations under subsection (b) each

15 allocated amount under subsection (b) shall be ratably re16 duced.

17 Subtitle C—Limitation on Emer18 gency Assistance Expenditures

19 SEC. 721. LIMITATION ON EXPENDITURES FOR EMERGENCY

20 ASSISTANCE.

21 (a) IN GENERAL.—Section 403(a)(5) of the Social

22 Security Act (42 U.S.C. 602(a)(5)) is amended to read

23 as follows:

24 ‘‘(5) in the case of any State, an amount equal

25 to the lesser of—
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1 ‘‘(A) 50 percent of the total amount ex2 pended under the State plan during such quar3 ter as emergency assistance to needy families

4 with children; or

5 ‘‘(B) the greater of—

6 ‘‘(i) the total amount expended under

7 the State plan during the fiscal year that

8 immediately precedes the fiscal year in

9 which the quarter occurs; multiplied by

10 ‘‘(I) 4 percent, if the national un11 employment rate for the United

12 States (as determined by the Sec13 retary of Labor) for the 3rd or 4th

14 quarter of the immediately preceding

15 fiscal year is at least 7 percent; or

16 ‘‘(II) 3 percent, otherwise; or

17 ‘‘(ii) the total amount expended under

18 the State plan during fiscal year 1993 as

19 emergency assistance to needy families

20 with children.’’.

21 (b) AUTHORITY OF STATES TO DEFINE EMERGENCY

22 ASSISTANCE.—Section 406(e)(1) of such Act (42 U.S.C.

23 606(e)(1)) is amended to read as follows:

24 ‘‘(e)(1)(A) The term ‘emergency assistance to needy

25 families with children’ means emergency assistance fur-
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1 nished by an eligible State with respect to an eligible needy

2 child to avoid destitution of the child or to provide living

3 arrangements in a home for the child.

4 ‘‘(B) As used in this paragraph:

5 ‘‘(i) The term ‘emergency assistance’ means

6 emergency assistance as provided for in the State

7 plan approved under section 402 of an eligible State,

8 but shall not include care for an eligible needy child

9 or other member of the household in which the child

10 is living to the extent that the child or other member

11 is entitled to such care as medical assistance under

12 the State plan under title XIX.

13 ‘‘(ii) The term ‘eligible needy child’ means a

14 needy child—

15 ‘‘(I) who has not attained 21 years of age;

16 ‘‘(II) who is or (within such period as the

17 Secretary may specify) has been living with any

18 relative specified in subsection (a)(1) in a place

19 of residence maintained by 1 or more of such

20 relatives as the home of the relative or relatives;

21 ‘‘(III) who is without available resources;

22 and

23 ‘‘(IV) whose requirement for emergency as24 sistance did not arise because the child or rel-
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1 ative refused without good cause to accept em2 ployment or training for employment.

3 ‘‘(iii) The term ‘‘eligible State’’ means a State

4 whose State plan approved under section 402 in5 cludes provision for emergency assistance.’’.

6 Subtitle D—Family Day Care

7 Homes Program Improvements

8 SEC. 731. IMPROVEMENT OF OPERATION OF FAMILY OR

9 GROUP DAY CARE HOMES LOCATED IN LOW10 AND MODERATE-INCOME AREAS UNDER THE

11 CHILD AND ADULT CARE FOOD PROGRAM

12 UNDER THE NATIONAL SCHOOL LUNCH ACT.

13 (a) IN GENERAL.—Section 17(f)(3)(A) of the Na14 tional School Lunch Act (42 U.S.C. 1766(f)(3)(A)) is

15 amended to read as follows:

16 ‘‘(A)(i) Institutions that participate in the program

17 under this section as family or group day care home spon18 soring organizations shall be provided, for payment to

19 such homes, a reimbursement factor in accordance with

20 this subparagraph for the cost of obtaining and preparing

21 food and prescribed labor costs, involved in providing

22 meals under this section.

23 ‘‘(ii)(I) A low- or moderate-income family or group

24 day care home shall be provided a reimbursement factor

25 without a requirement for documentation of the costs de-
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1 scribed in clause (i), except that reimbursement shall not

2 be provided under this clause for meals or supplements

3 served to the children of a person acting as a family or

4 group day care home provider unless such children meet

5 the eligibility standards for free or reduced price meals

6 under section 9 of this Act. The reimbursement factors

7 applied to such a home shall be the factors in effect on

8 the date of enactment of the Self-Sufficient and Independ9 ence Act of 1994. The reimbursement factors under this

10 subparagraph shall be adjusted on July 1 of each year

11 to reflect changes in the Consumer Price Index for food

12 away from home for the most recent 12-month period for

13 which such data are available. The reimbursement factors

14 under this subparagraph shall be rounded to the nearest

15 one-fourth cent.

16 ‘‘(II) For purposes of this clause, the term ‘low- or

17 moderate-income family or group day care home’ means—

18 ‘‘(aa) a family or group day care home that is

19 located in a census tract area in which at least 40

20 percent of the children residing in such area are

21 members of households whose incomes meet the eli22 gibility standards for free or reduced price meals

23 under section 9 of this Act, as determined by the

24 family or group day care home sponsoring organiza25 tion using census tract data provided to such organi-
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1 zation by the State agency in accordance with sub2 paragraph (B)(i);

3 ‘‘(bb) a family or group day care home that is

4 located in an area served by a school in which at

5 least 40 percent of the total number of children en6 rolled are certified to receive free or reduced price

7 meals under this Act or the Child Nutrition Act of

8 1966 (42 U.S.C. 1771 et seq.), as determined by the

9 family or group day care home sponsoring organiza10 tion using data provided to such organization by the

11 State agency in accordance with subparagraph

12 (B)(ii); or

13 ‘‘(cc) a family or group day care home that is

14 operated by a provider whose household meets the

15 eligibility standards for free or reduced price meals

16 under section 9 of this Act.

17 ‘‘(iii)(I) Except as provided for in subclause (II), with

18 respect to meals or supplements served under this clause

19 by a family or group day care home that does not meet

20 the criteria set forth in clause (ii)(II), the reimbursement

21 factors shall be—

22 ‘‘(aa) $1.2675 for lunches and suppers;

23 ‘‘(bb) $.5375 for breakfasts; and

24 ‘‘(cc) $.25 for supplements.
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1 Such factors shall be adjusted on July 1, 1995, and each

2 July 1 thereafter to reflect changes in the Consumer Price

3 Index for food away from home for the most recent 12-

4 month period for which such data are available. The reim5 bursement factors under this clause shall be rounded to

6 the nearest one-fourth cent. A family or group day care

7 home shall be provided a reimbursement factor under this

8 subclause without a requirement for documentation of the

9 costs described in clause (i), except that reimbursement

10 shall not be provided under this clause for meals or supple11 ments served to the children of a person acting as a family

12 or group day care home provider unless such children meet

13 the eligibility standards for free or reduced price meals

14 under section 9 of this Act.

15 ‘‘(II) A family or group day care home that does not

16 meet the criteria set forth in clause (ii)(II), may elect to

17 be provided a reimbursement factor determined in accord18 ance with the following requirements:

19 ‘‘(aa) With respect to meals or supplements

20 served under this subsection to children who are

21 members of households whose incomes meet the eli22 gibility standards for free or reduced price meals

23 under section 9 of this Act, the family or group day

24 care home shall be provided reimbursement factors
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1 set by the Secretary in accordance with subclause

2 (ii)(I).

3 ‘‘(bb) With respect to meals or supplements

4 served under this subsection to children who are

5 members of households whose incomes do not meet

6 such eligibility standards, the family or group day

7 care home shall be provided a reimbursement factor

8 in accordance with subclause (I).

9 ‘‘(III) A family or group day care home electing to

10 use the procedures under subclause (II) may consider a

11 child with a parent participating in the work first program

12 established under part F of title IV of the Social Security

13 Act, the community service program established under

14 section 489 of such Act, the transitional child care pro15 gram under title IV of such Act, the at-risk child care

16 program under title IV of such Act, or a State child care

17 program with an income eligibility limit that does not ex18 ceed the eligibility standard for free or reduced price meals

19 under section 9 of this Act, to be a child who is a member

20 of a household whose income meets the eligibility stand21 ards under section 9 of this Act. A family or group day

22 care home may elect to receive the reimbursement factors

23 prescribed under clause (ii)(I) solely for such children if

24 it does not wish to have income statements collected from

25 parents.
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1 ‘‘(IV) The Secretary shall prescribe simplified meal

2 counting and reporting procedures for use by family and

3 group day care homes that elect to use the procedures

4 under clause (iii)(II) and by family and group day care

5 home sponsoring organizations that serve such homes.

6 Such procedures may include the following:

7 ‘‘(aa) Setting an annual percentage for each

8 such home of the number of meals served that are

9 to be reimbursed in accordance with the reimburse10 ment factors prescribed under clause (ii)(I) and an

11 annual percentage of the number of meals served

12 that are to be reimbursed in accordance with the re13 imbursement factors prescribed under clause (ii)(II),

14 based on the incomes of children enrolled in the

15 home in a specified month or other period.

16 ‘‘(bb) Setting blended reimbursement factors

17 for a home annually based on the incomes of chil18 dren enrolled in the home in a specified month or

19 period.

20 ‘‘(cc) Placing a home into one of several reim21 bursement categories annually based on the percent22 age of children in the home whose households have

23 incomes that meet the eligibility standards under

24 section 9 of this Act.
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1 ‘‘(dd) Such other simplified procedures as the

2 Secretary may prescribe.’’.

3 (b) PROVISION OF DATA TO FAMILY OR GROUP DAY

4 CARE HOMES.—Section 17(f)(3) of such Act (42 U.S.C.

5 1766(f)(3)) is amended—

6 (1) by redesignating subparagraphs (B) and

7 (C) as subparagraphs (D) and (E), respectively; and

8 (2) by inserting after subparagraph (A) (as

9 amended by subsection (a)) the following new sub10 paragraph:

11 ‘‘(B)(i) The Secretary shall provide to each State

12 agency administering a child and adult care food program

13 under this section data from the most recent decennial

14 census for which such data are available showing which

15 census tracts in the State meet the requirements of sub16 paragraph (A)(ii)(II)(aa). The State agency shall provide

17 such data to family or group day care home sponsoring

18 organizations located in the State.

19 ‘‘(ii) Each State agency administering a child and

20 adult care food program under this section shall annually

21 provide to family or group day care home sponsoring orga22 nizations located in the State a list of all schools in the

23 State in which at least 40 percent of the children are en24 rolled are certified to receive free or reduced price meals

25 under this Act or the Child Nutrition Act of 1966 (42
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1 U.S.C. 1771 et seq.). The Secretary shall direct State

2 agencies administering the school lunch program under

3 this Act and the school breakfast program under the Child

4 Nutrition Act of 1966 to collect this information annually

5 and to provide it on a timely basis to the State agency

6 administering the program under this section.’’.

7 (c) GRANTS TO STATES TO PROVIDE ASSISTANCE TO

8 FAMILY OR GROUP DAY CARE HOMES.—Section 17(f)(3)

9 of such Act (42 U.S.C. 1766(f)(3)) is amended by insert10 ing after subparagraph (B) (as added by subsection

11 (b)(2)) the following new subparagraph:

12 ‘‘(C)(i) From amounts appropriated to carry out this

13 section, the Secretary shall reserve $2,000,000 in fiscal

14 year 1995 and $5,000,000 in fiscal year 1996 to provide

15 grants to States for the purpose of providing grants to

16 family and day care home sponsoring organizations and

17 other appropriate organizations to secure and provide

18 training, materials, automated data processing assistance,

19 and other assistance for the staff of such sponsoring orga20 nizations and for family and group day care homes in

21 order to assist in the implementation of the requirements

22 contained in subparagraph (A).

23 ‘‘(ii) From amounts appropriated to carry out this

24 section, the Secretary shall reserve $5,000,000 in fiscal

25 year 1997 and in each fiscal year thereafter to provide
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1 grants to States for the purpose of making grants to fam2 ily or group day care home sponsoring organizations and

3 other appropriate organizations to assist low- or moderate4 income family or group day care homes (as such term is

5 defined in subparagraph (A)(ii)(II)) become licensed or

6 registered for the program under this section or overcome

7 other barriers to the program.’’.

8 (d) EFFECTIVE DATES.—(1) The amendments made

9 by subsections (a) and (b) shall take effect on July 1,

10 1996.

11 (2) The amendments made by subsection (c) shall

12 take effect on the date of the enactment of this Act.

13 Subtitle E—Collection of Certain

14 State and Local Taxes on Out-of15 State Sales

16 SEC. 741. SHORT TITLE.

17 This subtitle may be cited as the ‘‘Tax Fairness for

18 Main Street Business Act of 1994’’.

19 SEC. 742. FINDINGS.

20 The Congress finds that—

21 (1) sales by out-of-State firms already are sub22 ject to State and local sales taxes, but State and

23 local governments are unable to compel out-of-State

24 firms to collect and remit such taxes,
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1 (2) small businesses, which are compelled to

2 collect State and local sales taxes, are subject to un3 fair competition when out-of-State firms cannot be

4 compelled to collect and remit such taxes on their

5 sales to residents of the State,

6 (3) State and local governments provide a num7 ber of resources to out-of-State firms including gov8 ernment services relating to mail delivery, commu9 nications, bank and court systems, and disposal of

10 tons of catalogs,

11 (4) the inability of State and local governments

12 to require out-of-State firms to collect and remit

13 sales taxes deprives State and local governments of

14 needed revenue and forces such State and local gov15 ernments to raise taxes on taxpayers, including

16 small businesses, in such State,

17 (5) the Supreme Court ruled in Quill v. North

18 Dakota, 112 U.S. 1904 (1992) that the due process

19 clause of the Constitution does not prohibit a State

20 government from imposing personal jurisdiction and

21 tax obligations on out-of-State firms that purpose22 fully solicit sales from residents therein, and that

23 the Congress has the power to authorize State gov24 ernments to require out-of-State firms to collect

25 State and local sales taxes, and
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1 (6) as a matter of federalism, the Federal Gov2 ernment has a duty to assist State and local govern3 ments in collecting sales taxes on sales from out-of4 State firms.

5 SEC. 743. SENSE OF CONGRESS.

6 Congress recognizes that some States will be ad7 versely affected by the provisions of this Act which deny

8 immigrants certain public assistance and pledges to help

9 those States offset the potential cost shift. In authorizing

10 States to require out-of-State companies to collect sales

11 taxes on mail order purchases, Congress encourages

12 States to use increased revenues resulting from such col13 lections to offset such cost shift and to design assistance

14 programs that address the special needs of immigrants en15 tering this country.

16 SEC. 744. AUTHORITY FOR COLLECTION OF SALES TAX.

17 (a) IN GENERAL.—A State is authorized to require

18 a person who is subject to the personal jurisdiction of the

19 State to collect and remit a State sales tax, a local sales

20 tax, or both, with respect to tangible personal property

21 if—

22 (1) the destination of the tangible personal

23 property is in the State,

24 (2) during the 1-year period ending on Septem25 ber 30 of the calendar year preceding the calendar
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1 year in which the taxable event occurs, the person

2 has gross receipts from sales of such tangible per3 sonal property—

4 (A) in the United States exceeding

5 $3,000,000, or

6 (B) in the State exceeding $100,000, and

7 (3) the State, on behalf of its local jurisdictions,

8 collects and administers all local sales taxes imposed

9 pursuant to this subtitle.

10 (b) STATES MUST COLLECT LOCAL SALES TAXES.—

11 A State in which both State and local sales taxes are im12 posed may not require State sales taxes to be collected

13 and remitted under subsection (a) unless the State also

14 requires the local sales taxes to be collected and remitted

15 under subsection (a).

16 (c) AGGREGATION RULES.—All persons that would

17 be treated as a single employer under section 52 (a) or

18 (b) of the Internal Revenue Code of 1986 shall be treated

19 as one person for purposes of subsection (a).

20 (d) DESTINATION.—For purposes of subsection (a),

21 the destination of tangible personal property is the State

22 or local jurisdiction which is the final location to which

23 the seller ships or delivers the property, or to which the

24 seller causes the property to be shipped or delivered, re-
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1 gardless of the means of shipment or delivery or the loca2 tion of the buyer.

3 SEC. 745. TREATMENT OF LOCAL SALES TAXES.

4 (a) UNIFORM LOCAL SALES TAXES.—

5 (1) IN GENERAL.—Sales taxes imposed by local

6 jurisdictions of a State shall be deemed to be uni7 form for purposes of this subtitle and shall be col8 lected under this subtitle in the same manner as

9 State sales taxes if—

10 (A) such local sales taxes are imposed at

11 the same rate and on identical transactions in

12 all geographic areas in the State, and

13 (B) such local sales taxes imposed on sales

14 by out-of-State persons are collected and ad15 ministered by the State.

16 (2) APPLICATION TO BORDER JURISDICTION

17 TAX RATES.—A State shall not be treated as failing

18 to meet the requirements of paragraph (1)(A) if,

19 with respect to a local jurisdiction which borders on

20 another State, such State or local jurisdiction—

21 (A) either reduces or increases the local

22 sales tax in order to achieve a rate of tax equal

23 to that imposed by the bordering State on iden24 tical transactions, or
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1 (B) exempts from the tax transactions

2 which are exempt from tax in the bordering

3 State.

4 (b) NONUNIFORM LOCAL SALES TAXES.—

5 (1) IN GENERAL.—Nonuniform local sales taxes

6 required to be collected pursuant to this subtitle

7 shall be collected under one of the options provided

8 under paragraph (2).

9 (2) ELECTION.—For purposes of paragraph

10 (1), any person required under authority of this sub11 title to collect nonuniform local sales taxes shall

12 elect to collect either—

13 (A) all nonuniform local sales taxes appli14 cable to transactions in the State, or

15 (B) a fee (at the rate determined under

16 paragraph (3)) which shall be in lieu of the

17 nonuniform local sales taxes described in sub18 paragraph (A).

19 Such election shall require the person to use the

20 method elected for all transactions in the State while

21 the election is in effect.

22 (3) RATE OF IN-LIEU FEE.—For purposes of

23 paragraph (2)(B), the rate of the in-lieu fee for any

24 calendar year shall be an amount equal to the prod25 uct of—
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1 (A) the amount determined by dividing

2 total nonuniform local sales tax revenues col3 lected in the State for the most recently com4 pleted State fiscal year for which data is avail5 able by total State sales tax revenues for the

6 same year, and

7 (B) the State sales tax rate.

8 Such amount shall be rounded to the nearest 0.25

9 percent.

10 (4) NONUNIFORM LOCAL SALES TAXES.—For

11 purposes of this subtitle, nonuniform local sales

12 taxes are local sales taxes which do not meet the re13 quirements of subsection (a).

14 (c) DISTRIBUTION OF LOCAL SALES TAXES.—

15 (1) IN GENERAL.—A State shall distribute to

16 local jurisdictions a portion of the amounts collected

17 pursuant to this subtitle determined on the basis

18 of—

19 (A) in the case of uniform local sales taxes,

20 the proportion which each local jurisdiction re21 ceives of uniform local sales taxes not collected

22 pursuant to this subtitle,

23 (B) in the case of in-lieu fees, as described

24 in subsection (b)(2)(B), the proportion which

25 each local jurisdiction’s nonuniform local sales
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1 tax receipts bears to the total nonuniform local

2 sales tax receipts in the State, and

3 (C) in the case of any nonuniform local

4 sales tax collected pursuant to this subtitle, the

5 geographical location of the transaction on

6 which the tax was imposed.

7 The amounts determined under subparagraphs (A)

8 and (B) shall be calculated on the basis of data for

9 the most recently completed State fiscal year for

10 which the data is available.

11 (2) TIMING.—Amounts described in paragraph

12 (1) (B) or (C) shall be distributed by a State to its

13 local jurisdictions in accordance with State time14 tables for distributing local sales taxes, but not less

15 frequently than every calendar quarter. Amounts de16 scribed in paragraph (1)(A) shall be distributed by

17 a State as provided under State law.

18 (3) TRANSITION RULE.—If, upon the effective

19 date of this subtitle, a State has a State law in ef20 fect providing a method for distributing local sales

21 taxes other than the method under this subsection,

22 then this subsection shall not apply to that State

23 until the 91st day following the adjournment sine

24 die of that State’s next regular legislative session

25 which convenes after the effective date of this sub-
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1 title (or such earlier date as State law may provide).

2 Local sales taxes collected pursuant to this subtitle

3 prior to the application of this subsection shall be

4 distributed as provided by State law.

5 SEC. 746. RETURN AND REMITTANCE REQUIREMENTS.

6 (a) IN GENERAL.—A State may not require any per7 son subject to this subtitle—

8 (1) to file a return reporting the amount of any

9 tax collected or required to be collected under this

10 subtitle, or to remit the receipts of such tax, more

11 frequently than once with respect to sales in a cal12 endar quarter, or

13 (2) to file the initial such return, or to make

14 the initial such remittance, before the 90th day after

15 the person’s first taxable transaction under this sub16 title.

17 (b) LOCAL TAXES.—The provisions of subsection (a)

18 shall also apply to any person required by a State acting

19 under authority of this subtitle to collect a local sales tax

20 or in-lieu fee.

21 SEC. 747. NONDISCRIMINATION AND EXEMPTIONS.

22 A State shall not have power under this subtitle to

23 require any person not located in the State or local juris24 diction to collect and remit a State or local sales tax if

25 a person located in the State or local jurisdiction would
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1 have been exempt from or otherwise not subject to such

2 State or local sales tax under similar circumstances.

3 SEC. 748. APPLICATION OF STATE LAW.

4 (a) PERSONS REQUIRED TO COLLECT STATE OR

5 LOCAL SALES TAX.—Any person required by section 744

6 to collect a State or local sales tax shall be subject to the

7 laws of such State relating to such sales tax to the extent

8 that such laws are consistent with the limitations con9 tained in this subtitle.

10 (b) LIMITATIONS.—Except as provided in subsection

11 (a), nothing in this subtitle shall be construed to permit

12 a State—

13 (1) to license or regulate any person,

14 (2) to require any person to qualify to transact

15 intrastate business, or

16 (3) to subject any person to State taxes not re17 lated to the sales of tangible personnel property.

18 (c) PREEMPTION.—Except as otherwise provided in

19 this subtitle, this subtitle shall not be construed to pre20 empt or limit any power exercised or to be exercised by

21 a State or local jurisdiction under the law of such State

22 or local jurisdiction or under any other Federal law.

23 SEC. 749. TOLL-FREE INFORMATION SERVICE.

24 A State shall not have power under this subtitle to

25 require any person to collect a State or local sales tax on
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1 any sale unless, at the time of such sale, such State has

2 a toll-free telephone service available to provide such per3 son information relating to collection of such State or local

4 sales tax. Such information shall include, at a minimum,

5 all applicable tax rates, return and remittance addresses

6 and deadlines, and penalty and interest information. As

7 part of the service, the State shall also provide all nec8 essary forms and instructions at no cost to any person

9 using the service. The State shall prominently display the

10 toll-free telephone number on all correspondence with any

11 person using the service. This service may be provided

12 jointly with other States.

13 SEC. 750. DEFINITIONS.

14 For the purposes of this subtitle—

15 (1) the term ‘‘compensating use tax’’ means a

16 tax imposed on or incident to the use, storage, con17 sumption, distribution, or other use within a State

18 or local jurisdiction or other area of a State, of tan19 gible personal property;

20 (2) the term ‘‘local sales tax’’ means a sales tax

21 imposed in a local jurisdiction or area of a State and

22 includes, but is not limited to—

23 (A) a sales tax or in-lieu fee imposed in a

24 local jurisdiction or area of a State by the State

25 on behalf of such jurisdiction or area, and
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1 (B) a sales tax imposed by a local jurisdic2 tion or other State-authorized entity pursuant

3 to the authority of State law, local law, or both;

4 (3) the term ‘‘person’’ means an individual, a

5 trust, estate, partnership, society, association, com6 pany or corporation, including a limited liability

7 company, whether or not acting in a fiduciary or

8 representative capacity, and any combination of the

9 foregoing;

10 (4) the term ‘‘sales tax’’ means a tax, including

11 a compensating use tax, that is—

12 (A) imposed on or incident to the sale,

13 purchase, storage, consumption, distribution, or

14 other use of tangible personal property as may

15 be defined or specified under the laws imposing

16 such tax, and

17 (B) measured by the amount of the sales

18 price, cost, charge or other value of or for such

19 property; and

20 (5) the term ‘‘State’’ means any of the several

21 States of the United States, the District of Colum22 bia, the Commonwealth of Puerto Rico, and any ter23 ritory or possession of the United States.
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1 SEC. 751. EFFECTIVE DATE.

2 This subtitle shall take effect 180 days after the date

3 of the enactment of this subtitle. In no event shall this

4 subtitle apply to any sale occurring before such effective

5 date.

6 TITLE VIII—EFFECTIVE DATE

7 SEC. 801. EFFECTIVE DATE.

8 Except as otherwise provided in this Act, this Act and

9 the amendments made by this Act shall take effect on Oc10 tober 1, 1996.

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