Calendar No. 494

104TH CONGRESS

2D SESSION S. 1956

A BILL

To provide for reconciliation pursuant to section

for fiscal year 1997.202(a) of the concurrent resolution on the budget

JULY 16, 1996

Read twice and placed on the calendar
II

Calendar No. 494

104TH CONGRESS

2D SESSION S. 1956

To provide for reconciliation pursuant to section 202(a) of the concurrent

resolution on the budget for fiscal year 1997.

IN THE SENATE OF THE UNITED STATES

JULY 16, 1996

Mr. DOMENICI, from the Committee on the Budget, reported the following

original bill; which was read twice and placed on the calendar

A BILL

To provide for reconciliation pursuant to section 202(a) of

the concurrent resolution on the budget for fiscal year 1997.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Personal Responsibil5 ity, Work Opportunity, and Medicaid Restructuring Act

6 of 1996’’.
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1 TITLE I—AGRICULTURE AND

2 RELATED PROVISIONS

3 SEC. 1001. SHORT TITLE; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This title may be cited as the

5 ‘‘Agricultural Reconciliation Act of 1996’’.

6 (b) TABLE OF CONTENTS.—The table of contents of

7 this title is as follows:

Sec. 1001. Short title; table of contents.

Subtitle A—Food Stamps and Commodity Distribution

CHAPTER 1—FOOD STAMP PROGRAM

Sec. 1111. Definition of certification period.

Sec. 1112. Definition of coupon.

Sec. 1113. Treatment of children living at home.

Sec. 1114. Adjustment of thrifty food plan.

Sec. 1115. Definition of homeless individual.

Sec. 1116. State option for eligibility standards.

Sec. 1117. Earnings of students.

Sec. 1118. Energy assistance.

Sec. 1119. Deductions from income.

Sec. 1120. Vehicle allowance.

Sec. 1121. Vendor payments for transitional housing counted as income.

Sec. 1122. Simplified calculation of income for the self-employed.

Sec. 1123. Doubled penalties for violating food stamp program requirements.

Sec. 1124. Disqualification of convicted individuals.

Sec. 1125. Disqualification.

Sec. 1126. Caretaker exemption.

Sec. 1127. Employment and training.

Sec. 1128. Food stamp eligibility.

Sec. 1129. Comparable treatment for disqualification.

Sec. 1130. Disqualification for receipt of multiple food stamp benefits.

Sec. 1131. Disqualification of fleeing felons.

Sec. 1132. Cooperation with child support agencies.

Sec. 1133. Disqualification relating to child support arrears.

Sec. 1134. Work requirement.

Sec. 1135. Encouragement of electronic benefit transfer systems.

Sec. 1136. Value of minimum allotment.

Sec. 1137. Benefits on recertification.

Sec. 1138. Optional combined allotment for expedited households.

Sec. 1139. Failure to comply with other means-tested public assistance programs.

Sec. 1140. Allotments for households residing in centers.

Sec. 1141. Condition precedent for approval of retail food stores and wholesale

food concerns.

Sec. 1142. Authority to establish authorization periods.
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Sec. 1143. Information for verifying eligibility for authorization.

Sec. 1144. Waiting period for stores that fail to meet authorization criteria.

Sec. 1145. Operation of food stamp offices.

Sec. 1146. State employee and training standards.

Sec. 1147. Exchange of law enforcement information.

Sec. 1148. Expedited coupon service.

Sec. 1149. Withdrawing fair hearing requests.

Sec. 1150. Income, eligibility, and immigration status verification systems.

Sec. 1151. Disqualification of retailers who intentionally submit falsified applications.

Sec. 1152. Disqualification of retailers who are disqualified under the WIC program.

Sec. 1153. Collection of overissuances.

Sec. 1154. Authority to suspend stores violating program requirements pending

administrative and judicial review.

Sec. 1155. Expanded criminal forfeiture for violations.

Sec. 1156. Limitation on Federal match.

Sec. 1157. Standards for administration.

Sec. 1158. Work supplementation or support program.

Sec. 1159. Waiver authority.

Sec. 1160. Response to waivers.

Sec. 1161. Employment initiatives program.

Sec. 1162. Reauthorization.

Sec. 1163. Simplified food stamp program.

Sec. 1164. State food assistance block grant.

CHAPTER 2—COMMODITY DISTRIBUTION PROGRAMS

Sec. 1171. Emergency food assistance program.

Sec. 1172. Food bank demonstration project.

Sec. 1173. Hunger prevention programs.

Sec. 1174. Report on entitlement commodity processing.

Subtitle B—Child Nutrition Programs

CHAPTER 1—AMENDMENTS TO THE NATIONAL SCHOOL LUNCH ACT

Sec. 1201. State disbursement to schools.

Sec. 1202. Nutritional and other program requirements.

Sec. 1203. Free and reduced price policy statement.

Sec. 1204. Special assistance.

Sec. 1205. Miscellaneous provisions and definitions.

Sec. 1206. Summer food service program for children.

Sec. 1207. Commodity distribution.

Sec. 1208. Child and adult care food program.

Sec. 1209. Pilot projects.

Sec. 1210. Reduction of paperwork.

Sec. 1211. Information on income eligibility.

Sec. 1212. Nutrition guidance for child nutrition programs.

CHAPTER 2—AMENDMENTS TO THE CHILD NUTRITION ACT OF 1966

Sec. 1251. Special milk program.

Sec. 1252. Free and reduced price policy statement.

Sec. 1253. School breakfast program authorization.

Sec. 1254. State administrative expenses.

Sec. 1255. Regulations.
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Sec. 1256. Prohibitions.

Sec. 1257. Miscellaneous provisions and definitions.

Sec. 1258. Accounts and records.

Sec. 1259. Special supplemental nutrition program for women, infants, and

children.

Sec. 1260. Cash grants for nutrition education.

Sec. 1261. Nutrition education and training.

Sec. 1262. Rounding rules.

1 Subtitle A—Food Stamps and

2 Commodity Distribution

3 CHAPTER 1—FOOD STAMP PROGRAM

4 SEC. 1111. DEFINITION OF CERTIFICATION PERIOD.

5 Section 3(c) of the Food Stamp Act of 1977 (7

6 U.S.C. 2012(c)) is amended by striking ‘‘Except as pro7 vided’’ and all that follows and inserting the following:

8 ‘‘The certification period shall not exceed 12 months, ex9 cept that the certification period may be up to 24 months

10 if all adult household members are elderly or disabled. A

11 State agency shall have at least 1 contact with each cer12 tified household every 12 months.’’.

13 SEC. 1112. DEFINITION OF COUPON.

14 Section 3(d) of the Food Stamp Act of 1977 (7

15 U.S.C. 2012(d)) is amended by striking ‘‘or type of certifi16 cate’’ and inserting ‘‘type of certificate, authorization

17 card, cash or check issued in lieu of a coupon, or access

18 device, including an electronic benefit transfer card or per19 sonal identification number,’’.
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1 SEC. 1113. TREATMENT OF CHILDREN LIVING AT HOME.

2 The second sentence of section 3(i) of the Food

3 Stamp Act of 1977 (7 U.S.C. 2012(i)) is amended by

4 striking ‘‘(who are not themselves parents living with their

5 children or married and living with their spouses)’’.

6 SEC. 1114. ADJUSTMENT OF THRIFTY FOOD PLAN.

7 The second sentence of section 3(o) of the Food

8 Stamp Act of 1977 (7 U.S.C. 2012(o)) is amended—

9 (1) by striking ‘‘shall (1) make’’ and inserting

10 the following: ‘‘shall—

11 ‘‘(1) make’’;

12 (2) by striking ‘‘scale, (2) make’’ and inserting

13 the following: ‘‘scale;

14 ‘‘(2) make’’;

15 (3) by striking ‘‘Alaska, (3) make’’ and insert16 ing the following: ‘‘Alaska;

17 ‘‘(3) make’’; and

18 (4) by striking ‘‘Columbia, (4) through’’ and all

19 that follows through the end of the subsection and

20 inserting the following: ‘‘Columbia; and

21 ‘‘(4) on October 1, 1996, and each October 1

22 thereafter, adjust the cost of the diet to reflect the

23 cost of the diet in the preceding June, and round the

24 result to the nearest lower dollar increment for each

25 household size, except that on October 1, 1996, the
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1 Secretary may not reduce the cost of the diet in ef2 fect on September 30, 1996.’’.

3 SEC. 1115. DEFINITION OF HOMELESS INDIVIDUAL.

4 Section 3(s)(2)(C) of the Food Stamp Act of 1977

5 (7 U.S.C. 2012(s)(2)(C)) is amended by inserting ‘‘for not

6 more than 90 days’’ after ‘‘temporary accommodation’’.

7 SEC. 1116. STATE OPTION FOR ELIGIBILITY STANDARDS.

8 Section 5(b) of the Food Stamp Act of 1977 (7

9 U.S.C. 2014(d)) is amended by striking ‘‘(b) The Sec10 retary’’ and inserting the following:

11 ‘‘(b) ELIGIBILITY STANDARDS.—Except as otherwise

12 provided in this Act, the Secretary’’.

13 SEC. 1117. EARNINGS OF STUDENTS.

14 Section 5(d)(7) of the Food Stamp Act of 1977 (7

15 U.S.C. 2014(d)(7)) is amended by striking ‘‘21’’ and in16 serting ‘‘19’’.

17 SEC. 1118. ENERGY ASSISTANCE.

18 (a) IN GENERAL.—Section 5(d) of the Food Stamp

19 Act of 1977 (7 U.S.C. 2014(d)) is amended by striking

20 paragraph (11) and inserting the following: ‘‘(11) a 1-time

21 payment or allowance made under a Federal or State law

22 for the costs of weatherization or emergency repair or re23 placement of an unsafe or inoperative furnace or other

24 heating or cooling device,’’.

25 (b) CONFORMING AMENDMENTS.—
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1 (1) Section 5(k) of the Food Stamp Act of

2 1977 (7 U.S.C. 2014(k)) is amended—

3 (A) in paragraph (1)—

4 (i) in subparagraph (A), by striking

5 ‘‘plan for aid to families with dependent

6 children approved’’ and inserting ‘‘program

7 funded’’; and

8 (ii) in subparagraph (B), by striking

9 ‘‘, not including energy or utility-cost as10 sistance,’’;

11 (B) in paragraph (2), by striking subpara12 graph (C) and inserting the following:

13 ‘‘(C) a payment or allowance described in sub14 section (d)(11);’’; and

15 (C) by adding at the end the following:

16 ‘‘(4) THIRD PARTY ENERGY ASSISTANCE PAY17 MENTS.—

18 ‘‘(A) ENERGY ASSISTANCE PAYMENTS.—

19 For purposes of subsection (d)(1), a payment

20 made under a Federal or State law to provide

21 energy assistance to a household shall be con22 sidered money payable directly to the house23 hold.

24 ‘‘(B) ENERGY ASSISTANCE EXPENSES.—

25 For purposes of subsection (e)(7), an expense
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1 paid on behalf of a household under a Federal

2 or State law to provide energy assistance shall

3 be considered an out-of-pocket expense incurred

4 and paid by the household.’’.

5 (2) Section 2605(f) of the Low-Income Home

6 Energy Assistance Act of 1981 (42 U.S.C. 8624(f))

7 is amended—

8 (A) by striking ‘‘(f)(1) Notwithstanding’’

9 and inserting ‘‘(f) Notwithstanding’’;

10 (B) in paragraph (1), by striking ‘‘food

11 stamps,’’; and

12 (C) by striking paragraph (2).

13 SEC. 1119. DEDUCTIONS FROM INCOME.

14 (a) IN GENERAL.—Section 5 of the Food Stamp Act

15 of 1977 (7 U.S.C. 2014) is amended by striking sub16 section (e) and inserting the following:

17 ‘‘(e) DEDUCTIONS FROM INCOME.—

18 ‘‘(1) STANDARD DEDUCTION.—

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

20 allow a standard deduction for each household

21 in the 48 contiguous States and the District of

22 Columbia, Alaska, Hawaii, Guam, and the Vir23 gin Islands of the United States of—

24 ‘‘(i) for fiscal year 1996, $134, $229,

25 $189, $269, and $118, respectively;
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1 ‘‘(ii) for fiscal year 1997, $132, $225,

2 $186, $265, and $116, respectively; and

3 ‘‘(iii) for fiscal years 1998 through

4 2002, $122, $208, $172, $245, and $107,

5 respectively.

6 ‘‘(B) ADJUSTMENT FOR INFLATION.—On

7 October 1, 2002, and each October 1 thereafter,

8 the Secretary shall adjust the standard deduc9 tion to the nearest lower dollar increment to re10 flect changes in the Consumer Price Index for

11 all urban consumers published by the Bureau of

12 Labor Statistics, for items other than food, for

13 the 12-month period ending the preceding June

14 30.

15 ‘‘(2) EARNED INCOME DEDUCTION.—

16 ‘‘(A) DEFINITION OF EARNED INCOME.—

17 In this paragraph, the term ‘earned income’

18 does not include—

19 ‘‘(i) income excluded by subsection

20 (d); or

21 ‘‘(ii) any portion of income earned

22 under a work supplementation or support

23 program, as defined under section 16(b),

24 that is attributable to public assistance.
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1 ‘‘(B) DEDUCTION.—Except as provided in

2 subparagraph (C), a household with earned in3 come shall be allowed a deduction of 20 percent

4 of all earned income to compensate for taxes,

5 other mandatory deductions from salary, and

6 work expenses.

7 ‘‘(C) EXCEPTION.—The deduction de8 scribed in subparagraph (B) shall not be al9 lowed with respect to determining an overissu10 ance due to the failure of a household to report

11 earned income in a timely manner.

12 ‘‘(3) DEPENDENT CARE DEDUCTION.—

13 ‘‘(A) IN GENERAL.—A household shall be

14 entitled, with respect to expenses (other than

15 excluded expenses described in subparagraph

16 (B)) for dependent care, to a dependent care

17 deduction, the maximum allowable level of

18 which shall be $200 per month for each depend19 ent child under 2 years of age and $175 per

20 month for each other dependent, for the actual

21 cost of payments necessary for the care of a de22 pendent if the care enables a household member

23 to accept or continue employment, or training

24 or education that is preparatory for employ25 ment.
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1 ‘‘(B) EXCLUDED EXPENSES.—The ex2 cluded expenses referred to in subparagraph

3 (A) are—

4 ‘‘(i) expenses paid on behalf of the

5 household by a third party;

6 ‘‘(ii) amounts made available and ex7 cluded, for the expenses referred to in sub8 paragraph (A), under subsection (d)(3);

9 and

10 ‘‘(iii) expenses that are paid under

11 section 6(d)(4).

12 ‘‘(4) DEDUCTION FOR CHILD SUPPORT PAY13 MENTS.—

14 ‘‘(A) IN GENERAL.—A household shall be

15 entitled to a deduction for child support pay16 ments made by a household member to or for

17 an individual who is not a member of the

18 household if the household member is legally

19 obligated to make the payments.

20 ‘‘(B) METHODS FOR DETERMINING

21 AMOUNT.—The Secretary may prescribe by reg22 ulation the methods, including calculation on a

23 retrospective basis, that a State agency shall

24 use to determine the amount of the deduction

25 for child support payments.
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1 ‘‘(5) HOMELESS SHELTER ALLOWANCE.—

2 Under rules prescribed by the Secretary, a State

3 agency may develop a standard homeless shelter al4 lowance, which shall not exceed $143 per month, for

5 such expenses as may reasonably be expected to be

6 incurred by households in which all members are

7 homeless individuals but are not receiving free shel8 ter throughout the month. A State agency that de9 velops the allowance may use the allowance in deter10 mining eligibility and allotments for the households.

11 The State agency may make a household with ex12 tremely low shelter costs ineligible for the allowance.

13 ‘‘(6) EXCESS MEDICAL EXPENSE DEDUCTION.—

14 ‘‘(A) IN GENERAL.—A household contain15 ing an elderly or disabled member shall be enti16 tled, with respect to expenses other than ex17 penses paid on behalf of the household by a

18 third party, to an excess medical expense de19 duction for the portion of the actual costs of al20 lowable medical expenses, incurred by the elder21 ly or disabled member, exclusive of special diets,

22 that exceeds $35 per month.

23 ‘‘(B) METHOD OF CLAIMING DEDUC24 TION.—
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1 ‘‘(i) IN GENERAL.—A State agency

2 shall offer an eligible household under sub3 paragraph (A) a method of claiming a de4 duction for recurring medical expenses that

5 are initially verified under the excess medi6 cal expense deduction in lieu of submitting

7 information on, or verification of, actual

8 expenses on a monthly basis.

9 ‘‘(ii) METHOD.—The method de10 scribed in clause (i) shall—

11 ‘‘(I) be designed to minimize the

12 burden for the eligible elderly or dis13 abled household member choosing to

14 deduct the recurrent medical expenses

15 of the member pursuant to the meth16 od;

17 ‘‘(II) rely on reasonable estimates

18 of the expected medical expenses of

19 the member for the certification pe20 riod (including changes that can be

21 reasonably anticipated based on avail22 able information about the medical

23 condition of the member, public or

24 private medical insurance coverage,
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1 and the current verified medical ex2 penses incurred by the member); and

3 ‘‘(III) not require further report4 ing or verification of a change in med5 ical expenses if such a change has

6 been anticipated for the certification

7 period.

8 ‘‘(7) EXCESS SHELTER EXPENSE DEDUC9 TION.—

10 ‘‘(A) IN GENERAL.—A household shall be

11 entitled, with respect to expenses other than ex12 penses paid on behalf of the household by a

13 third party, to an excess shelter expense deduc14 tion to the extent that the monthly amount ex15 pended by a household for shelter exceeds an

16 amount equal to 50 percent of monthly house17 hold income after all other applicable deduc18 tions have been allowed.

19 ‘‘(B) MAXIMUM AMOUNT OF DEDUC20 TION.—

21 ‘‘(i) THROUGH DECEMBER 31, 1996.—

22 In the case of a household that does not

23 contain an elderly or disabled individual,

24 during the 15-month period ending Decem-
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1 ber 31, 1996, the excess shelter expense

2 deduction shall not exceed—

3 ‘‘(I) in the 48 contiguous States

4 and the District of Columbia, $247

5 per month; and

6 ‘‘(II) in Alaska, Hawaii, Guam,

7 and the Virgin Islands of the United

8 States, $429, $353, $300, and $182

9 per month, respectively.

10 ‘‘(i) AFTER DECEMBER 31, 1996.—In

11 the case of a household that does not con12 tain an elderly or disabled individual, after

13 December 31, 1996, the excess shelter ex14 pense deduction shall not exceed—

15 ‘‘(I) in the 48 contiguous States

16 and the District of Columbia, $342

17 per month; and

18 ‘‘(II) in Alaska, Hawaii, Guam,

19 and the Virgin Islands of the United

20 States, $594, $489, $415, and $252

21 per month, respectively.

22 ‘‘(C) STANDARD UTILITY ALLOWANCE.—

23 ‘‘(i) IN GENERAL.—In computing the

24 excess shelter expense deduction, a State

25 agency may use a standard utility allow-
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1 ance in accordance with regulations pro2 mulgated by the Secretary, except that a

3 State agency may use an allowance that

4 does not fluctuate within a year to reflect

5 seasonal variations.

6 ‘‘(ii) RESTRICTIONS ON HEATING AND

7 COOLING EXPENSES.—An allowance for a

8 heating or cooling expense may not be used

9 in the case of a household that—

10 ‘‘(I) does not incur a heating or

11 cooling expense, as the case may be;

12 ‘‘(II) does incur a heating or

13 cooling expense but is located in a

14 public housing unit that has central

15 utility meters and charges households,

16 with regard to the expense, only for

17 excess utility costs; or

18 ‘‘(III) shares the expense with,

19 and lives with, another individual not

20 participating in the food stamp pro21 gram, another household participating

22 in the food stamp program, or both,

23 unless the allowance is prorated be24 tween the household and the other in25 dividual, household, or both.
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1 ‘‘(iii) MANDATORY ALLOWANCE.—

2 ‘‘(I) IN GENERAL.—A State

3 agency may make the use of a stand4 ard utility allowance mandatory for all

5 households with qualifying utility

6 costs if—

7 ‘‘(aa) the State agency has

8 developed 1 or more standards

9 that include the cost of heating

10 and cooling and 1 or more stand11 ards that do not include the cost

12 of heating and cooling; and

13 ‘‘(bb) the Secretary finds

14 that the standards will not result

15 in an increased cost to the Sec16 retary.

17 ‘‘(II) HOUSEHOLD ELECTION.—

18 A State agency that has not made the

19 use of a standard utility allowance

20 mandatory under subclause (I) shall

21 allow a household to switch, at the

22 end of a certification period, between

23 the standard utility allowance and a

24 deduction based on the actual utility

25 costs of the household.
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1 ‘‘(iv) AVAILABILITY OF ALLOWANCE

2 TO RECIPIENTS OF ENERGY ASSISTANCE.—

3 ‘‘(I) IN GENERAL.—Subject to

4 subclause (II), if a State agency elects

5 to use a standard utility allowance

6 that reflects heating or cooling costs,

7 the standard utility allowance shall be

8 made available to households receiving

9 a payment, or on behalf of which a

10 payment is made, under the Low-In11 come Home Energy Assistance Act of

12 1981 (42 U.S.C. 8621 et seq.) or

13 other similar energy assistance pro14 gram, if the household still incurs out15 of-pocket heating or cooling expenses

16 in excess of any assistance paid on be17 half of the household to an energy

18 provider.

19 ‘‘(II) SEPARATE ALLOWANCE.—A

20 State agency may use a separate

21 standard utility allowance for house22 holds on behalf of which a payment

23 described in subclause (I) is made,

24 but may not be required to do so.
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1 ‘‘(III) STATES NOT ELECTING TO

2 USE SEPARATE ALLOWANCE.—A State

3 agency that does not elect to use a

4 separate allowance but makes a single

5 standard utility allowance available to

6 households incurring heating or cool7 ing expenses (other than a household

8 described in subclause (I) or (II) of

9 clause (ii)) may not be required to re10 duce the allowance due to the provi11 sion (directly or indirectly) of assist12 ance under the Low-Income Home

13 Energy Assistance Act of 1981 (42

14 U.S.C. 8621 et seq.).

15 ‘‘(IV) PRORATION OF ASSIST16 ANCE.—For the purpose of the food

17 stamp program, assistance provided

18 under the Low-Income Home Energy

19 Assistance Act of 1981 (42 U.S.C.

20 8621 et seq.) shall be considered to be

21 prorated over the entire heating or

22 cooling season for which the assist23 ance was provided.’’.

24 (b) CONFORMING AMENDMENT.—Section 11(e)(3) of

25 the Food Stamp Act of 1977 (7 U.S.C. 2020(e)(3)) is
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1 amended by striking ‘‘. Under rules prescribed’’ and all

2 that follows through ‘‘verifies higher expenses’’.

3 SEC. 1120. VEHICLE ALLOWANCE.

4 Section 5(g) of the Food Stamp Act of 1977 (7

5 U.S.C. 2014(g)) is amended by striking paragraph (2) and

6 inserting the following:

7 ‘‘(2) INCLUDED ASSETS.—

8 ‘‘(A) IN GENERAL.—Subject to the other

9 provisions of this paragraph, the Secretary

10 shall, in prescribing inclusions in, and exclu11 sions from, financial resources, follow the regu12 lations in force as of June 1, 1982 (other than

13 those relating to licensed vehicles and inacces14 sible resources).

15 ‘‘(B) ADDITIONAL INCLUDED ASSETS.—

16 The Secretary shall include in financial re17 sources—

18 ‘‘(i) any boat, snowmobile, or airplane

19 used for recreational purposes;

20 ‘‘(ii) any vacation home;

21 ‘‘(iii) any mobile home used primarily

22 for vacation purposes;

23 ‘‘(iv) subject to subparagraph (C), any

24 licensed vehicle that is used for household

25 transportation or to obtain or continue em-
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1 ployment to the extent that the fair market

2 value of the vehicle exceeds $4,600 through

3 September 30, 1996, and $5,100 beginning

4 October 1, 1996; and

5 ‘‘(v) any savings or retirement ac6 count (including an individual account), re7 gardless of whether there is a penalty for

8 early withdrawal.

9 ‘‘(C) EXCLUDED VEHICLES.—A vehicle

10 (and any other property, real or personal, to the

11 extent the property is directly related to the

12 maintenance or use of the vehicle) shall not be

13 included in financial resources under this para14 graph if the vehicle is—

15 ‘‘(i) used to produce earned income;

16 ‘‘(ii) necessary for the transportation

17 of a physically disabled household member;

18 or

19 ‘‘(iii) depended on by a household to

20 carry fuel for heating or water for home

21 use and provides the primary source of fuel

22 or water, respectively, for the household.’’.
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1 SEC. 1121. VENDOR PAYMENTS FOR TRANSITIONAL HOUS2 ING COUNTED AS INCOME.

3 Section 5(k)(2) of the Food Stamp Act of 1977 (7

4 U.S.C. 2014(k)(2)) is amended—

5 (1) by striking subparagraph (F); and

6 (2) by redesignating subparagraphs (G) and

7 (H) as subparagraphs (F) and (G), respectively.

8 SEC. 1122. SIMPLIFIED CALCULATION OF INCOME FOR THE

9 SELF-EMPLOYED.

10 Section 5 of the Food Stamp Act of 1977 (7 U.S.C.

11 2014) is amended by adding at the end the following:

12 ‘‘(n) SIMPLIFIED CALCULATION OF INCOME FOR THE

13 SELF-EMPLOYED.—

14 ‘‘(1) IN GENERAL.—Not later than 1 year after

15 the date of enactment of this subsection, the Sec16 retary shall establish a procedure, designed to not

17 increase Federal costs, by which a State may use a

18 reasonable estimate of income excluded under sub19 section (d)(9) in lieu of calculating the actual cost

20 of producing self-employment income.

21 ‘‘(2) INCLUSIVE OF ALL TYPES OF INCOME.—

22 The procedure established under paragraph (1) shall

23 allow a State to estimate income for all types of self24 employment income.

25 ‘‘(3) DIFFERENCES FOR DIFFERENT TYPES OF

26 INCOME.—The procedure established under para-
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1 graph (1) may differ for different types of self-em2 ployment income.’’.

3 SEC. 1123. DOUBLED PENALTIES FOR VIOLATING FOOD

4 STAMP PROGRAM REQUIREMENTS.

5 Section 6(b)(1) of the Food Stamp Act of 1977 (7

6 U.S.C. 2015(b)(1)) is amended—

7 (1) in clause (i), by striking ‘‘six months’’ and

8 inserting ‘‘1 year’’; and

9 (2) in clause (ii), by striking ‘‘1 year’’ and in10 serting ‘‘2 years’’.

11 SEC. 1124. DISQUALIFICATION OF CONVICTED INDIVID12 UALS.

13 Section 6(b)(1)(iii) of the Food Stamp Act of 1977

14 (7 U.S.C. 2015(b)(1)(iii)) is amended—

15 (1) in subclause (II), by striking ‘‘or’’ at the

16 end;

17 (2) in subclause (III), by striking the period at

18 the end and inserting ‘‘; or’’; and

19 (3) by inserting after subclause (III) the follow20 ing:

21 ‘‘(IV) a conviction of an offense under sub22 section (b) or (c) of section 15 involving an

23 item covered by subsection (b) or (c) of section

24 15 having a value of $500 or more.’’.
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1 SEC. 1125. DISQUALIFICATION.

2 (a) IN GENERAL.—Section 6(d) of the Food Stamp

3 Act of 1977 (7 U.S.C. 2015(d)) is amended by striking

4 ‘‘(d)(1) Unless otherwise exempted by the provisions’’ and

5 all that follows through the end of paragraph (1) and in6 serting the following:

7 ‘‘(d) CONDITIONS OF PARTICIPATION.—

8 ‘‘(1) WORK REQUIREMENTS.—

9 ‘‘(A) IN GENERAL.—No physically and

10 mentally fit individual over the age of 15 and

11 under the age of 60 shall be eligible to partici12 pate in the food stamp program if the individ13 ual—

14 ‘‘(i) refuses, at the time of application

15 and every 12 months thereafter, to register

16 for employment in a manner prescribed by

17 the Secretary;

18 ‘‘(ii) refuses without good cause to

19 participate in an employment and training

20 program established under paragraph (4),

21 to the extent required by the State agency;

22 ‘‘(iii) refuses without good cause to

23 accept an offer of employment, at a site or

24 plant not subject to a strike or lockout at

25 the time of the refusal, at a wage not less

26 than the higher of—
25

•S 1956 PCS

1 ‘‘(I) the applicable Federal or

2 State minimum wage; or

3 ‘‘(II) 80 percent of the wage that

4 would have governed had the mini5 mum hourly rate under section

6 6(a)(1) of the Fair Labor Standards

7 Act of 1938 (29 U.S.C. 206(a)(1))

8 been applicable to the offer of employ9 ment;

10 ‘‘(iv) refuses without good cause to

11 provide a State agency with sufficient in12 formation to allow the State agency to de13 termine the employment status or the job

14 availability of the individual;

15 ‘‘(v) voluntarily and without good

16 cause—

17 ‘‘(I) quits a job; or

18 ‘‘(II) reduces work effort and,

19 after the reduction, the individual is

20 working less than 30 hours per week;

21 or

22 ‘‘(vi) fails to comply with section 20.

23 ‘‘(B) HOUSEHOLD INELIGIBILITY.—If an

24 individual who is the head of a household be25 comes ineligible to participate in the food stamp
26

•S 1956 PCS

1 program under subparagraph (A), the house2 hold shall, at the option of the State agency,

3 become ineligible to participate in the food

4 stamp program for a period, determined by the

5 State agency, that does not exceed the lesser

6 of—

7 ‘‘(i) the duration of the ineligibility of

8 the individual determined under subpara9 graph (C); or

10 ‘‘(ii) 180 days.

11 ‘‘(C) DURATION OF INELIGIBILITY.—

12 ‘‘(i) FIRST VIOLATION.—The first

13 time that an individual becomes ineligible

14 to participate in the food stamp program

15 under subparagraph (A), the individual

16 shall remain ineligible until the later of—

17 ‘‘(I) the date the individual be18 comes eligible under subparagraph

19 (A);

20 ‘‘(II) the date that is 1 month

21 after the date the individual became

22 ineligible; or

23 ‘‘(III) a date determined by the

24 State agency that is not later than 3
27

•S 1956 PCS

1 months after the date the individual

2 became ineligible.

3 ‘‘(ii) SECOND VIOLATION.—The sec4 ond time that an individual becomes ineli5 gible to participate in the food stamp pro6 gram under subparagraph (A), the individ7 ual shall remain ineligible until the later

8 of—

9 ‘‘(I) the date the individual be10 comes eligible under subparagraph

11 (A);

12 ‘‘(II) the date that is 3 months

13 after the date the individual became

14 ineligible; or

15 ‘‘(III) a date determined by the

16 State agency that is not later than 6

17 months after the date the individual

18 became ineligible.

19 ‘‘(iii) THIRD OR SUBSEQUENT VIOLA20 TION.—The third or subsequent time that

21 an individual becomes ineligible to partici22 pate in the food stamp program under sub23 paragraph (A), the individual shall remain

24 ineligible until the later of—
28

•S 1956 PCS

1 ‘‘(I) the date the individual be2 comes eligible under subparagraph

3 (A);

4 ‘‘(II) the date that is 6 months

5 after the date the individual became

6 ineligible;

7 ‘‘(III) a date determined by the

8 State agency; or

9 ‘‘(IV) at the option of the State

10 agency, permanently.

11 ‘‘(D) ADMINISTRATION.—

12 ‘‘(i) GOOD CAUSE.—The Secretary

13 shall determine the meaning of good cause

14 for the purpose of this paragraph.

15 ‘‘(ii) VOLUNTARY QUIT.—The Sec16 retary shall determine the meaning of vol17 untarily quitting and reducing work effort

18 for the purpose of this paragraph.

19 ‘‘(iii) DETERMINATION BY STATE

20 AGENCY.—

21 ‘‘(I) IN GENERAL.—Subject to

22 subclause (II) and clauses (i) and (ii),

23 a State agency shall determine—

24 ‘‘(aa) the meaning of any

25 term used in subparagraph (A);
29

•S 1956 PCS

1 ‘‘(bb) the procedures for de2 termining whether an individual

3 is in compliance with a require4 ment under subparagraph (A);

5 and

6 ‘‘(cc) whether an individual

7 is in compliance with a require8 ment under subparagraph (A).

9 ‘‘(II) NOT LESS RESTRICTIVE.—

10 A State agency may not use a mean11 ing, procedure, or determination

12 under subclause (I) that is less re13 strictive on individuals receiving bene14 fits under this Act than a comparable

15 meaning, procedure, or determination

16 under a State program funded under

17 part A of title IV of the Social Secu18 rity Act (42 U.S.C. 601 et seq.).

19 ‘‘(iv) STRIKE AGAINST THE GOVERN20 MENT.—For the purpose of subparagraph

21 (A)(v), an employee of the Federal Govern22 ment, a State, or a political subdivision of

23 a State, who is dismissed for participating

24 in a strike against the Federal Govern25 ment, the State, or the political subdivision
30

•S 1956 PCS

1 of the State shall be considered to have

2 voluntarily quit without good cause.

3 ‘‘(v) SELECTING A HEAD OF HOUSE4 HOLD.—

5 ‘‘(I) IN GENERAL.—For purposes

6 of this paragraph, the State agency

7 shall allow the household to select any

8 adult parent of a child in the house9 hold as the head of the household if

10 all adult household members making

11 application under the food stamp pro12 gram agree to the selection.

13 ‘‘(II) TIME FOR MAKING DES14 IGNATION.—A household may des15 ignate the head of the household

16 under subclause (I) each time the

17 household is certified for participation

18 in the food stamp program, but may

19 not change the designation during a

20 certification period unless there is a

21 change in the composition of the

22 household.

23 ‘‘(vi) CHANGE IN HEAD OF HOUSE24 HOLD.—If the head of a household leaves

25 the household during a period in which the
31

•S 1956 PCS

1 household is ineligible to participate in the

2 food stamp program under subparagraph

3 (B)—

4 ‘‘(I) the household shall, if other5 wise eligible, become eligible to par6 ticipate in the food stamp program;

7 and

8 ‘‘(II) if the head of the household

9 becomes the head of another house10 hold, the household that becomes

11 headed by the individual shall become

12 ineligible to participate in the food

13 stamp program for the remaining pe14 riod of ineligibility.’’.

15 (b) CONFORMING AMENDMENT.—

16 (1) The second sentence of section 17(b)(2) of

17 the Food Stamp Act of 1977 (7 U.S.C. 2026(b)(2))

18 is amended by striking ‘‘6(d)(1)(i)’’ and inserting

19 ‘‘6(d)(1)(A)(i)’’.

20 (2) Section 20 of the Food Stamp Act of 1977

21 (7 U.S.C. 2029) is amended by striking subsection

22 (f) and inserting the following:

23 ‘‘(f) DISQUALIFICATION.—An individual or a house24 hold may become ineligible under section 6(d)(1) to par-
32

•S 1956 PCS

1 ticipate in the food stamp program for failing to comply

2 with this section.’’.

3 SEC. 1126. CARETAKER EXEMPTION.

4 Section 6(d)(2) of the Food Stamp Act of 1977 (7

5 U.S.C. 2015(d)(2)) is amended by striking subparagraph

6 (B) and inserting the following: ‘‘(B) a parent or other

7 member of a household with responsibility for the care of

8 (i) a dependent child under the age of 6 or any lower age

9 designated by the State agency that is not under the age

10 of 1; or (ii) an incapacitated person;’’.

11 SEC. 1127. EMPLOYMENT AND TRAINING.

12 (a) IN GENERAL.—Section 6(d)(4) of the Food

13 Stamp Act of 1977 (7 U.S.C. 2015(d)(4)) is amended—

14 (1) by striking ‘‘(4)(A) Not later than April 1,

15 1987, each’’ and inserting the following:

16 ‘‘(4) EMPLOYMENT AND TRAINING.—

17 ‘‘(A) IN GENERAL.—

18 ‘‘(i) IMPLEMENTATION.—Each’’;

19 (2) in subparagraph (A)—

20 (A) by inserting ‘‘work,’’ after ‘‘skills,

21 training,’’; and

22 (B) by adding at the end the following:

23 ‘‘(ii) STATEWIDE WORKFORCE DEVEL24 OPMENT SYSTEM.—Each component of an

25 employment and training program carried
33

•S 1956 PCS

1 out under this paragraph shall be delivered

2 through a statewide workforce development

3 system, unless the component is not avail4 able locally through such a system.’’;

5 (3) in subparagraph (B)—

6 (A) in the matter preceding clause (i), by

7 striking the colon at the end and inserting the

8 following: ‘‘, except that the State agency shall

9 retain the option to apply employment require10 ments prescribed under this subparagraph to a

11 program applicant at the time of application:’’;

12 (B) in clause (i), by striking ‘‘with terms

13 and conditions’’ and all that follows through

14 ‘‘time of application’’; and

15 (C) in clause (iv)—

16 (i) by striking subclauses (I) and (II);

17 and

18 (ii) by redesignating subclauses (III)

19 and (IV) as subclauses (I) and (II), respec20 tively;

21 (4) in subparagraph (D)—

22 (A) in clause (i), by striking ‘‘to which the

23 application’’ and all that follows through ‘‘30

24 days or less’’;
34

•S 1956 PCS

1 (B) in clause (ii), by striking ‘‘but with re2 spect’’ and all that follows through ‘‘child

3 care’’; and

4 (C) in clause (iii), by striking ‘‘, on the

5 basis of’’ and all that follows through ‘‘clause

6 (ii)’’ and inserting ‘‘the exemption continues to

7 be valid’’;

8 (5) in subparagraph (E), by striking the third

9 sentence;

10 (6) in subparagraph (G)—

11 (A) by striking ‘‘(G)(i) The State’’ and in12 serting ‘‘(G) The State’’; and

13 (B) by striking clause (ii);

14 (7) in subparagraph (H), by striking ‘‘(H)(i)

15 The Secretary’’ and all that follows through ‘‘(ii)

16 Federal funds’’ and inserting ‘‘(H) Federal funds’’;

17 (8) in subparagraph (I)(i)(II), by striking ‘‘, or

18 was in operation,’’ and all that follows through ‘‘So19 cial Security Act’’ and inserting the following: ‘‘),

20 except that no such payment or reimbursement shall

21 exceed the applicable local market rate’’;

22 (9)(A) by striking subparagraphs (K) and (L)

23 and inserting the following:

24 ‘‘(K) LIMITATION ON FUNDING.—Notwith25 standing any other provision of this paragraph,
35

•S 1956 PCS

1 the amount of funds a State agency uses to

2 carry out this paragraph (including funds used

3 to carry out subparagraph (I)) for participants

4 who are receiving benefits under a State pro5 gram funded under part A of title IV of the So6 cial Security Act (42 U.S.C. 601 et seq.) shall

7 not exceed the amount of funds the State agen8 cy used in fiscal year 1995 to carry out this

9 paragraph for participants who were receiving

10 benefits in fiscal year 1995 under a State pro11 gram funded under part A of title IV of the Act

12 (42 U.S.C. 601 et seq.).’’; and

13 (B) by redesignating subparagraphs (M) and

14 (N) as subparagraphs (L) and (M), respectively; and

15 (10) in subparagraph (L), as so redesignated—

16 (A) by striking ‘‘(L)(i) The Secretary’’ and

17 inserting ‘‘(L) The Secretary’’; and

18 (B) by striking clause (ii).

19 (b) FUNDING.—Section 16(h) of the Food Stamp Act

20 of 1977 (7 U.S.C. 2025(h)) is amended by striking

21 ‘‘(h)(1)(A) The Secretary’’ and all that follows through

22 the end of paragraph (1) and inserting the following:

23 ‘‘(h) FUNDING OF EMPLOYMENT AND TRAINING

24 PROGRAMS.—

25 ‘‘(1) IN GENERAL.—
36

•S 1956 PCS

1 ‘‘(A) AMOUNTS.—To carry out employ2 ment and training programs, the Secretary

3 shall reserve for allocation to State agencies

4 from funds made available for each fiscal year

5 under section 18(a)(1) the amount of—

6 ‘‘(i) for fiscal year 1996, $75,000,000;

7 and

8 ‘‘(ii) for each of fiscal years 1997

9 through 2002, $85,000,000.

10 ‘‘(B) ALLOCATION.—The Secretary shall

11 allocate the amounts reserved under subpara12 graph (A) among the State agencies using a

13 reasonable formula (as determined by the Sec14 retary) that gives consideration to the popu15 lation in each State affected by section 6(o).

16 ‘‘(C) REALLOCATION.—

17 ‘‘(i) NOTIFICATION.—A State agency

18 shall promptly notify the Secretary if the

19 State agency determines that the State

20 agency will not expend all of the funds al21 located to the State agency under subpara22 graph (B).

23 ‘‘(ii) REALLOCATION.—On notification

24 under clause (i), the Secretary shall reallo25 cate the funds that the State agency will
37

•S 1956 PCS

1 not expend as the Secretary considers ap2 propriate and equitable.

3 ‘‘(D) MINIMUM ALLOCATION.—Notwith4 standing subparagraphs (A) through (C), the

5 Secretary shall ensure that each State agency

6 operating an employment and training program

7 shall receive not less than $50,000 for each fis8 cal year.’’.

9 (c) ADDITIONAL MATCHING FUNDS.—Section

10 16(h)(2) of the Food Stamp Act of 1977 (7 U.S.C.

11 2025(h)(2)) is amended by inserting before the period at

12 the end the following: ‘‘, including the costs for case man13 agement and casework to facilitate the transition from

14 economic dependency to self-sufficiency through work’’.

15 (d) REPORTS.—Section 16(h) of the Food Stamp Act

16 of 1977 (7 U.S.C. 2025(h)) is amended—

17 (1) in paragraph (5)—

18 (A) by striking ‘‘(5)(A) The Secretary’’

19 and inserting ‘‘(5) The Secretary’’; and

20 (B) by striking subparagraph (B); and

21 (2) by striking paragraph (6).

22 SEC. 1128. FOOD STAMP ELIGIBILITY.

23 The third sentence of section 6(f) of the Food Stamp

24 Act of 1977 (7 U.S.C. 2015(f)) is amended by inserting

25 ‘‘, at State option,’’ after ‘‘less’’.
38

•S 1956 PCS

1 SEC. 1129. COMPARABLE TREATMENT FOR DISQUALIFICA2 TION.

3 (a) IN GENERAL.—Section 6 of the Food Stamp Act

4 of 1977 (7 U.S.C. 2015) is amended by adding at the end

5 the following:

6 ‘‘(i) COMPARABLE TREATMENT FOR DISQUALIFICA7 TION.—

8 ‘‘(1) IN GENERAL.—If a disqualification is im9 posed on a member of a household for a failure of

10 the member to perform an action required under a

11 Federal, State, or local law relating to a means-test12 ed public assistance program, the State agency may

13 impose the same disqualification on the member of

14 the household under the food stamp program.

15 ‘‘(2) RULES AND PROCEDURES.—If a disquali16 fication is imposed under paragraph (1) for a failure

17 of an individual to perform an action required under

18 part A of title IV of the Social Security Act (42

19 U.S.C. 601 et seq.), the State agency may use the

20 rules and procedures that apply under part A of title

21 IV of the Act to impose the same disqualification

22 under the food stamp program.

23 ‘‘(3) APPLICATION AFTER DISQUALIFICATION

24 PERIOD.—A member of a household disqualified

25 under paragraph (1) may, after the disqualification

26 period has expired, apply for benefits under this Act
39

•S 1956 PCS

1 and shall be treated as a new applicant, except that

2 a prior disqualification under subsection (d) shall be

3 considered in determining eligibility.’’.

4 (b) STATE PLAN PROVISIONS.—Section 11(e) of the

5 Food 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 a semicolon; and

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

11 ‘‘(26) the guidelines the State agency uses in

12 carrying out section 6(i); and’’.

13 (c) CONFORMING AMENDMENT.—Section 6(d)(2)(A)

14 of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(2)(A))

15 is amended by striking ‘‘that is comparable to a require16 ment of paragraph (1)’’.

17 SEC. 1130. DISQUALIFICATION FOR RECEIPT OF MULTIPLE

18 FOOD STAMP BENEFITS.

19 Section 6 of the Food Stamp Act of 1977 (7 U.S.C.

20 2015), as amended by section 1129, is amended by adding

21 at the end the following:

22 ‘‘(j) DISQUALIFICATION FOR RECEIPT OF MULTIPLE

23 FOOD STAMP BENEFITS.—An individual shall be ineligible

24 to participate in the food stamp program as a member

25 of any household for a 10-year period if the individual is
40

•S 1956 PCS

1 found by a State agency to have made, or is convicted

2 in a Federal or State court of having made, a fraudulent

3 statement or representation with respect to the identity

4 or place of residence of the individual in order to receive

5 multiple benefits simultaneously under the food stamp

6 program.’’.

7 SEC. 1131. DISQUALIFICATION OF FLEEING FELONS.

8 Section 6 of the Food Stamp Act of 1977 (7 U.S.C.

9 2015), as amended by section 1130, is amended by adding

10 at the end the following:

11 ‘‘(k) DISQUALIFICATION OF FLEEING FELONS.—No

12 member of a household who is otherwise eligible to partici13 pate in the food stamp program shall be eligible to partici14 pate in the program as a member of that or any other

15 household during any period during which the individual

16 is—

17 ‘‘(1) fleeing to avoid prosecution, or custody or

18 confinement after conviction, under the law of the

19 place from which the individual is fleeing, for a

20 crime, or attempt to commit a crime, that is a felony

21 under the law of the place from which the individual

22 is fleeing or that, in the case of New Jersey, is a

23 high misdemeanor under the law of New Jersey; or

24 ‘‘(2) violating a condition of probation or parole

25 imposed under a Federal or State law.’’.
41

•S 1956 PCS

1 SEC. 1132. COOPERATION WITH CHILD SUPPORT AGENCIES.

2 Section 6 of the Food Stamp Act of 1977 (7 U.S.C.

3 2015), as amended by section 1131, is amended by adding

4 at the end the following:

5 ‘‘(l) CUSTODIAL PARENT’S COOPERATION WITH

6 CHILD SUPPORT AGENCIES.—

7 ‘‘(1) IN GENERAL.—At the option of a State

8 agency, subject to paragraphs (2) and (3), no natu9 ral or adoptive parent or other individual (collec10 tively referred to in this subsection as ‘the individ11 ual’) who is living with and exercising parental con12 trol over a child under the age of 18 who has an ab13 sent parent shall be eligible to participate in the food

14 stamp program unless the individual cooperates with

15 the State agency administering the program estab16 lished under part D of title IV of the Social Security

17 Act (42 U.S.C. 651 et seq.)—

18 ‘‘(A) in establishing the paternity of the

19 child (if the child is born out of wedlock); and

20 ‘‘(B) in obtaining support for—

21 ‘‘(i) the child; or

22 ‘‘(ii) the individual and the child.

23 ‘‘(2) GOOD CAUSE FOR NONCOOPERATION.—

24 Paragraph (1) shall not apply to the individual if

25 good cause is found for refusing to cooperate, as de26 termined by the State agency in accordance with
42

•S 1956 PCS

1 standards prescribed by the Secretary in consulta2 tion with the Secretary of Health and Human Serv3 ices. The standards shall take into consideration cir4 cumstances under which cooperation may be against

5 the best interests of the child.

6 ‘‘(3) FEES.—Paragraph (1) shall not require

7 the payment of a fee or other cost for services pro8 vided under part D of title IV of the Social Security

9 Act (42 U.S.C. 651 et seq.).

10 ‘‘(m) NONCUSTODIAL PARENT’S COOPERATION WITH

11 CHILD SUPPORT AGENCIES.—

12 ‘‘(1) IN GENERAL.—At the option of a State

13 agency, subject to paragraphs (2) and (3), a puta14 tive or identified noncustodial parent of a child

15 under the age of 18 (referred to in this subsection

16 as ‘the individual’) shall not be eligible to participate

17 in the food stamp program if the individual refuses

18 to cooperate with the State agency administering the

19 program established under part D of title IV of the

20 Social Security Act (42 U.S.C. 651 et seq.)—

21 ‘‘(A) in establishing the paternity of the

22 child (if the child is born out of wedlock); and

23 ‘‘(B) in providing support for the child.

24 ‘‘(2) REFUSAL TO COOPERATE.—
43

•S 1956 PCS

1 ‘‘(A) GUIDELINES.—The Secretary, in con2 sultation with the Secretary of Health and

3 Human Services, shall develop guidelines on

4 what constitutes a refusal to cooperate under

5 paragraph (1).

6 ‘‘(B) PROCEDURES.—The State agency

7 shall develop procedures, using guidelines devel8 oped under subparagraph (A), for determining

9 whether an individual is refusing to cooperate

10 under paragraph (1).

11 ‘‘(3) FEES.—Paragraph (1) shall not require

12 the payment of a fee or other cost for services pro13 vided under part D of title IV of the Social Security

14 Act (42 U.S.C. 651 et seq.).

15 ‘‘(4) PRIVACY.—The State agency shall provide

16 safeguards to restrict the use of information col17 lected by a State agency administering the program

18 established under part D of title IV of the Social Se19 curity Act (42 U.S.C. 651 et seq.) to purposes for

20 which the information is collected.’’.

21 SEC. 1133. DISQUALIFICATION RELATING TO CHILD SUP22 PORT ARREARS.

23 Section 6 of the Food Stamp Act of 1977 (7 U.S.C.

24 2015), as amended by section 1132, is amended by adding

25 at the end the following:
44

•S 1956 PCS

1 ‘‘(n) DISQUALIFICATION FOR CHILD SUPPORT AR2 REARS.—

3 ‘‘(1) IN GENERAL.—At the option of a State

4 agency, no individual shall be eligible to participate

5 in the food stamp program as a member of any

6 household during any month that the individual is

7 delinquent in any payment due under a court order

8 for the support of a child of the individual.

9 ‘‘(2) EXCEPTIONS.—Paragraph (1) shall not

10 apply if—

11 ‘‘(A) a court is allowing the individual to

12 delay payment; or

13 ‘‘(B) the individual is complying with a

14 payment plan approved by a court or the State

15 agency designated under part D of title IV of

16 the Social Security Act (42 U.S.C. 651 et seq.)

17 to provide support for the child of the individ18 ual.’’.

19 SEC. 1134. WORK REQUIREMENT.

20 (a) IN GENERAL.—Section 6 of the Food Stamp Act

21 of 1977 (7 U.S.C. 2015), as amended by section 1133,

22 is amended by adding at the end the following:

23 ‘‘(o) WORK REQUIREMENT.—

24 ‘‘(1) DEFINITION OF WORK PROGRAM.—In this

25 subsection, the term ‘work program’ means—
45

•S 1956 PCS

1 ‘‘(A) a program under the Job Training

2 Partnership Act (29 U.S.C. 1501 et seq.);

3 ‘‘(B) a program under section 236 of the

4 Trade Act of 1974 (19 U.S.C. 2296); or

5 ‘‘(C) a program of employment or training

6 operated or supervised by a State or political

7 subdivision of a State that meets standards ap8 proved by the Governor of the State, including

9 a program under subsection (d)(4), other than

10 a job search program or a job search training

11 program.

12 ‘‘(2) WORK REQUIREMENT.—Subject to the

13 other provisions of this subsection, no individual

14 shall be eligible to participate in the food stamp pro15 gram as a member of any household if, during the

16 preceding 12-month period, the individual received

17 food stamp benefits for not less than 4 months dur18 ing which the individual did not—

19 ‘‘(A) work 20 hours or more per week,

20 averaged monthly;

21 ‘‘(B) participate in and comply with the re22 quirements of a work program for 20 hours or

23 more per week, as determined by the State

24 agency;
46

•S 1956 PCS

1 ‘‘(C) participate in and comply with the re2 quirements of a program under section 20 or a

3 comparable program established by a State or

4 political subdivision of a State; or

5 ‘‘(D) receive an exemption under para6 graph (6).

7 ‘‘(3) EXCEPTION.—Paragraph (2) shall not

8 apply to an individual if the individual is—

9 ‘‘(A) under 18 or over 50 years of age;

10 ‘‘(B) medically certified as physically or

11 mentally unfit for employment;

12 ‘‘(C) a parent or other member of a house13 hold with responsibility for a dependent child;

14 ‘‘(D) otherwise exempt under subsection

15 (d)(2); or

16 ‘‘(E) a pregnant woman.

17 ‘‘(4) WAIVER.—

18 ‘‘(A) IN GENERAL.—On the request of a

19 State agency, the Secretary may waive the ap20 plicability of paragraph (2) to any group of in21 dividuals in the State if the Secretary makes a

22 determination that the area in which the indi23 viduals reside—

24 ‘‘(i) has an unemployment rate of over

25 10 percent; or
47

•S 1956 PCS

1 ‘‘(ii) does not have a sufficient num2 ber of jobs to provide employment for the

3 individuals.

4 ‘‘(B) RESPONSE.—The Secretary shall re5 spond to a request made pursuant to subpara6 graph (A) not later than 15 days after the

7 State agency makes the request.

8 ‘‘(C) REPORT.—The Secretary shall report

9 the basis for a waiver under subparagraph (A)

10 to the Committee on Agriculture of the House

11 of Representatives and the Committee on Agri12 culture, Nutrition, and Forestry of the Senate.

13 ‘‘(5) SUBSEQUENT ELIGIBILITY.—

14 ‘‘(A) IN GENERAL.—An individual shall be15 come eligible to participate in the food stamp

16 program if, during a 30-day period, the individ17 ual—

18 ‘‘(i) works 80 or more hours;

19 ‘‘(ii) participates in and complies with

20 the requirements of a work program for 80

21 or more hours, as determined by a State

22 agency; or

23 ‘‘(iii) participates in and complies

24 with the requirements of a program under

25 section 20 or a comparable program estab-
48

•S 1956 PCS

1 lished by a State or political subdivision of

2 a State.

3 ‘‘(B) AFTER BECOMING ELIGIBLE.—An in4 dividual shall remain subject to paragraph (2)

5 during any 12-month period subsequent to be6 coming eligible to participate in the food stamp

7 program under subparagraph (A), except that

8 the term ‘preceding 12-month period’ in para9 graph (2) shall mean the preceding period be10 ginning on the date the individual most recently

11 satisfied the requirements of subparagraph (A).

12 ‘‘(6) STATE AGENCY EXEMPTIONS.—

13 ‘‘(A) IN GENERAL.—A State agency may

14 exempt an individual for purposes of paragraph

15 (2)(D)—

16 ‘‘(i) by reason of hardship; or

17 ‘‘(ii) if the individual participates in

18 and complies with the requirements of a

19 program of job search or job search train20 ing under clauses (i) or (ii) of subsection

21 (d)(4)(B) that requires an average of not

22 less than 20 hours per week of participa23 tion.

24 ‘‘(B) LIMITATION ON HARDSHIP EXEMP25 TION.—The average monthly number of individ-
49

•S 1956 PCS

1 uals receiving benefits due to a hardship exemp2 tion granted by a State agency under subpara3 graph (A)(i) for a fiscal year may not exceed 10

4 percent of the average monthly number of indi5 viduals receiving allotments during the fiscal

6 year in the State who are not exempt from the

7 requirements of this subsection under para8 graph (3) or (4).

9 ‘‘(C) LIMITATION ON JOB SEARCH EXEMP10 TION.—A State agency may not exempt an indi11 vidual under subparagraph (A)(ii) for more

12 than 1 month during any 12-month period.’’.

13 (b) TRANSITION PROVISION.—During the 1-year pe14 riod beginning on the date of enactment of this Act, the

15 term ‘‘preceding 12-month period’’ in section 6(o) of the

16 Food Stamp Act of 1977, as added by subsection (a),

17 means the preceding period that begins on the date of en18 actment of this Act.

19 SEC. 1135. ENCOURAGEMENT OF ELECTRONIC BENEFIT

20 TRANSFER SYSTEMS.

21 (a) IN GENERAL.—Section 7(i) of the Food Stamp

22 Act of 1977 (7 U.S.C. 2016(i)) is amended—

23 (1) by striking paragraph (1) and inserting the

24 following:

25 ‘‘(1) ELECTRONIC BENEFIT TRANSFERS.—
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1 ‘‘(A) IMPLEMENTATION.—Not later than

2 October 1, 2002, each State agency shall imple3 ment an electronic benefit transfer system

4 under which household benefits determined

5 under section 8(a) or 26 are issued from and

6 stored in a central databank, unless the Sec7 retary provides a waiver for a State agency that

8 faces unusual barriers to implementing an elec9 tronic benefit transfer system.

10 ‘‘(B) TIMELY IMPLEMENTATION.—Each

11 State agency is encouraged to implement an

12 electronic benefit transfer system under sub13 paragraph (A) as soon as practicable.

14 ‘‘(C) STATE FLEXIBILITY.—Subject to

15 paragraph (2), a State agency may procure and

16 implement an electronic benefit transfer system

17 under the terms, conditions, and design that

18 the State agency considers appropriate.

19 ‘‘(D) OPERATION.—An electronic benefit

20 transfer system should take into account gen21 erally accepted standard operating rules based

22 on—

23 ‘‘(i) commercial electronic funds

24 transfer technology;
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1 ‘‘(ii) the need to permit interstate op2 eration and law enforcement monitoring;

3 and

4 ‘‘(iii) the need to permit monitoring

5 and investigations by authorized law en6 forcement agencies.’’;

7 (2) in paragraph (2)—

8 (A) by striking ‘‘effective no later than

9 April 1, 1992,’’;

10 (B) in subparagraph (A)—

11 (i) by striking ‘‘, in any 1 year,’’; and

12 (ii) by striking ‘‘on-line’’;

13 (C) by striking subparagraph (D) and in14 serting the following:

15 ‘‘(D)(i) measures to maximize the security

16 of a system using the most recent technology

17 available that the State agency considers appro18 priate and cost effective and which may include

19 personal identification numbers, photographic

20 identification on electronic benefit transfer

21 cards, and other measures to protect against

22 fraud and abuse; and

23 ‘‘(ii) effective not later than 2 years after

24 the date of enactment of this clause, to the ex25 tent practicable, measures that permit a system
52

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1 to differentiate items of food that may be ac2 quired with an allotment from items of food

3 that may not be acquired with an allotment;’’;

4 (D) in subparagraph (G), by striking

5 ‘‘and’’ at the end;

6 (E) in subparagraph (H), by striking the

7 period at the end and inserting ‘‘; and’’; and

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

9 ‘‘(I) procurement standards.’’; and

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

11 ‘‘(7) REPLACEMENT OF BENEFITS.—Regula12 tions issued by the Secretary regarding the replace13 ment of benefits and liability for replacement of ben14 efits under an electronic benefit transfer system

15 shall be similar to the regulations in effect for a

16 paper-based food stamp issuance system.

17 ‘‘(8) REPLACEMENT CARD FEE.—A State agen18 cy may collect a charge for replacement of an elec19 tronic benefit transfer card by reducing the monthly

20 allotment of the household receiving the replacement

21 card.

22 ‘‘(9) OPTIONAL PHOTOGRAPHIC IDENTIFICA23 TION.—

24 ‘‘(A) IN GENERAL.—A State agency may

25 require that an electronic benefit card contain
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•S 1956 PCS

1 a photograph of 1 or more members of a house2 hold.

3 ‘‘(B) OTHER AUTHORIZED USERS.—If a

4 State agency requires a photograph on an elec5 tronic benefit card under subparagraph (A), the

6 State agency shall establish procedures to en7 sure that any other appropriate member of the

8 household or any authorized representative of

9 the household may utilize the card.

10 ‘‘(10) APPLICABLE LAW.—Disclosures, protec11 tions, responsibilities, and remedies established by

12 the Federal Reserve Board under section 904 of the

13 Electronic Fund Transfer Act (15 U.S.C. 1693b)

14 shall not apply to benefits under this Act delivered

15 through any electronic benefit transfer system.’’.

16 (b) SENSE OF CONGRESS.—It is the sense of Con17 gress that a State that operates an electronic benefit

18 transfer system under the Food Stamp Act of 1977 (7

19 U.S.C. 2011 et seq.) should operate the system in a man20 ner that is compatible with electronic benefit transfer sys21 tems operated by other States.

22 SEC. 1136. VALUE OF MINIMUM ALLOTMENT.

23 The proviso in section 8(a) of the Food Stamp Act

24 of 1977 (7 U.S.C. 2017(a)) is amended by striking ‘‘, and

25 shall be adjusted’’ and all that follows through ‘‘$5’’.
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1 SEC. 1137. BENEFITS ON RECERTIFICATION.

2 Section 8(c)(2)(B) of the Food Stamp Act of 1977

3 (7 U.S.C. 2017(c)(2)(B)) is amended by striking ‘‘of more

4 than one month’’.

5 SEC. 1138. OPTIONAL COMBINED ALLOTMENT FOR EXPE6 DITED HOUSEHOLDS.

7 Section 8(c) of the Food Stamp Act of 1977 (7

8 U.S.C. 2017(c)) is amended by striking paragraph (3) and

9 inserting the following:

10 ‘‘(3) OPTIONAL COMBINED ALLOTMENT FOR

11 EXPEDITED HOUSEHOLDS.—A State agency may

12 provide to an eligible household applying after the

13 15th day of a month, in lieu of the initial allotment

14 of the household and the regular allotment of the

15 household for the following month, an allotment that

16 is equal to the total amount of the initial allotment

17 and the first regular allotment. The allotment shall

18 be provided in accordance with section 11(e)(3) in

19 the case of a household that is not entitled to expe20 dited service and in accordance with paragraphs (3)

21 and (9) of section 11(e) in the case of a household

22 that is entitled to expedited service.’’.
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1 SEC. 1139. FAILURE TO COMPLY WITH OTHER MEANS-TEST2 ED PUBLIC ASSISTANCE PROGRAMS.

3 Section 8 of the Food Stamp Act of 1977 (7 U.S.C.

4 2017) is amended by striking subsection (d) and inserting

5 the following:

6 ‘‘(d) REDUCTION OF PUBLIC ASSISTANCE BENE7 FITS.—

8 ‘‘(1) IN GENERAL.—If the benefits of a house9 hold are reduced under a Federal, State, or local law

10 relating to a means-tested public assistance program

11 for the failure of a member of the household to per12 form an action required under the law or program,

13 for the duration of the reduction—

14 ‘‘(A) the household may not receive an in15 creased allotment as the result of a decrease in

16 the income of the household to the extent that

17 the decrease is the result of the reduction; and

18 ‘‘(B) the State agency may reduce the al19 lotment of the household by not more than 25

20 percent.

21 ‘‘(2) RULES AND PROCEDURES.—If the allot22 ment of a household is reduced under this subsection

23 for a failure to perform an action required under

24 part A of title IV of the Social Security Act (42

25 U.S.C. 601 et seq.), the State agency may use the

26 rules and procedures that apply under part A of title
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1 IV of the Act to reduce the allotment under the food

2 stamp program.’’.

3 SEC. 1140. ALLOTMENTS FOR HOUSEHOLDS RESIDING IN

4 CENTERS.

5 Section 8 of the Food Stamp Act of 1977 (7 U.S.C.

6 2017) is amended by adding at the end the following:

7 ‘‘(f) ALLOTMENTS FOR HOUSEHOLDS RESIDING IN

8 CENTERS.—

9 ‘‘(1) IN GENERAL.—In the case of an individual

10 who resides in a center for the purpose of a drug or

11 alcoholic treatment program described in the last

12 sentence of section 3(i), a State agency may provide

13 an allotment for the individual to—

14 ‘‘(A) the center as an authorized represent15 ative of the individual for a period that is less

16 than 1 month; and

17 ‘‘(B) the individual, if the individual leaves

18 the center.

19 ‘‘(2) DIRECT PAYMENT.—A State agency may

20 require an individual referred to in paragraph (1) to

21 designate the center in which the individual resides

22 as the authorized representative of the individual for

23 the purpose of receiving an allotment.’’.
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1 SEC. 1141. CONDITION PRECEDENT FOR APPROVAL OF RE2 TAIL FOOD STORES AND WHOLESALE FOOD

3 CONCERNS.

4 Section 9(a)(1) of the Food Stamp Act of 1977 (7

5 U.S.C. 2018(a)(1)) is amended by adding at the end the

6 following: ‘‘No retail food store or wholesale food concern

7 of a type determined by the Secretary, based on factors

8 that include size, location, and type of items sold, shall

9 be approved to be authorized or reauthorized for participa10 tion in the food stamp program unless an authorized em11 ployee of the Department of Agriculture, a designee of the

12 Secretary, or, if practicable, an official of the State or local

13 government designated by the Secretary has visited the

14 store or concern for the purpose of determining whether

15 the store or concern should be approved or reauthorized,

16 as appropriate.’’.

17 SEC. 1142. AUTHORITY TO ESTABLISH AUTHORIZATION PE18 RIODS.

19 Section 9(a) of the Food Stamp Act of 1977 (7

20 U.S.C. 2018(a)) is amended by adding at the end the fol21 lowing:

22 ‘‘(3) AUTHORIZATION PERIODS.—The Secretary

23 shall establish specific time periods during which au24 thorization to accept and redeem coupons, or to re25 deem benefits through an electronic benefit transfer
58

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1 system, shall be valid under the food stamp pro2 gram.’’.

3 SEC. 1143. INFORMATION FOR VERIFYING ELIGIBILITY FOR

4 AUTHORIZATION.

5 Section 9(c) of the Food Stamp Act of 1977 (7

6 U.S.C. 2018(c)) is amended—

7 (1) in the first sentence, by inserting ‘‘, which

8 may include relevant income and sales tax filing doc9 uments,’’ after ‘‘submit information’’; and

10 (2) by inserting after the first sentence the fol11 lowing: ‘‘The regulations may require retail food

12 stores and wholesale food concerns to provide writ13 ten authorization for the Secretary to verify all rel14 evant tax filings with appropriate agencies and to

15 obtain corroborating documentation from other

16 sources so that the accuracy of information provided

17 by the stores and concerns may be verified.’’.

18 SEC. 1144. WAITING PERIOD FOR STORES THAT FAIL TO

19 MEET AUTHORIZATION CRITERIA.

20 Section 9(d) of the Food Stamp Act of 1977 (7

21 U.S.C. 2018(d)) is amended by adding at the end the fol22 lowing: ‘‘A retail food store or wholesale food concern that

23 is denied approval to accept and redeem coupons because

24 the store or concern does not meet criteria for approval

25 established by the Secretary may not, for at least 6
59

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1 months, submit a new application to participate in the

2 program. The Secretary may establish a longer time pe3 riod under the preceding sentence, including permanent

4 disqualification, that reflects the severity of the basis of

5 the denial.’’.

6 SEC. 1145. OPERATION OF FOOD STAMP OFFICES.

7 Section 11 of the Food Stamp Act of 1977 (7 U.S.C.

8 2020), as amended by sections 1119(b) and 1129(b), is

9 amended—

10 (1) in subsection (e)—

11 (A) by striking paragraph (2) and insert12 ing the following:

13 ‘‘(2)(A) that the State agency shall establish

14 procedures governing the operation of food stamp of15 fices that the State agency determines best serve

16 households in the State, including households with

17 special needs, such as households with elderly or dis18 abled members, households in rural areas with low19 income members, homeless individuals, households

20 residing on reservations, and households in areas in

21 which a substantial number of members of low-in22 come households speak a language other than Eng23 lish.

24 ‘‘(B) In carrying out subparagraph (A), a State

25 agency—
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1 ‘‘(i) shall provide timely, accurate, and fair

2 service to applicants for, and participants in,

3 the food stamp program;

4 ‘‘(ii) shall develop an application contain5 ing the information necessary to comply with

6 this Act;

7 ‘‘(iii) shall permit an applicant household

8 to apply to participate in the program on the

9 same day that the household first contacts a

10 food stamp office in person during office hours;

11 ‘‘(iv) shall consider an application that

12 contains the name, address, and signature of

13 the applicant to be filed on the date the appli14 cant submits the application;

15 ‘‘(v) shall require that an adult representa16 tive of each applicant household certify in writ17 ing, under penalty of perjury, that—

18 ‘‘(I) the information contained in the

19 application is true; and

20 ‘‘(II) all members of the household

21 are citizens or are aliens eligible to receive

22 food stamps under section 6(f);

23 ‘‘(vi) shall provide a method of certifying

24 and issuing coupons to eligible homeless individ25 uals, to ensure that participation in the food
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1 stamp program is limited to eligible households;

2 and

3 ‘‘(vii) may establish operating procedures

4 that vary for local food stamp offices to reflect

5 regional and local differences within the State.

6 ‘‘(C) Nothing in this Act shall prohibit the use

7 of signatures provided and maintained electronically,

8 storage of records using automated retrieval systems

9 only, or any other feature of a State agency’s appli10 cation system that does not rely exclusively on the

11 collection and retention of paper applications or

12 other records.

13 ‘‘(D) The signature of any adult under this

14 paragraph shall be considered sufficient to comply

15 with any provision of Federal law requiring a house16 hold member to sign an application or statement.’’;

17 (B) in paragraph (3)—

18 (i) by striking ‘‘shall—’’ and all that

19 follows through ‘‘provide each’’ and insert20 ing ‘‘shall provide each’’; and

21 (ii) by striking ‘‘(B) assist’’ and all

22 that follows through ‘‘representative of the

23 State agency;’’;

24 (C) by striking paragraphs (14) and (25);
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1 (D)(i) by redesignating paragraphs (15)

2 through (24) as paragraphs (14) through (23),

3 respectively; and

4 (ii) by redesignating paragraph (26), as

5 paragraph (24); and

6 (2) in subsection (i)—

7 (A) by striking ‘‘(i) Notwithstanding’’ and

8 all that follows through ‘‘(2)’’ and inserting the

9 following:

10 ‘‘(i) APPLICATION AND DENIAL PROCEDURES.—

11 ‘‘(1) APPLICATION PROCEDURES.—Notwith12 standing any other provision of law,’’; and

13 (B) by striking ‘‘; (3) households’’ and all

14 that follows through ‘‘title IV of the Social Se15 curity Act. No’’ and inserting a period and the

16 following:

17 ‘‘(2) DENIAL AND TERMINATION.—Except in a

18 case of disqualification as a penalty for failure to

19 comply with a public assistance program rule or reg20 ulation, no’’.

21 SEC. 1146. STATE EMPLOYEE AND TRAINING STANDARDS.

22 Section 11(e)(6) of the Food Stamp Act of 1977 (7

23 U.S.C. 2020(e)(6)) is amended—

24 (1) by striking ‘‘that (A) the’’ and inserting

25 ‘‘that—
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1 ‘‘(A) the’’;

2 (2) by striking ‘‘Act; (B) the’’ and inserting

3 ‘‘Act; and

4 ‘‘(B) the’’;

5 (3) in subparagraph (B), by striking ‘‘United

6 States Civil Service Commission’’ and inserting ‘‘Of7 fice of Personnel Management’’; and

8 (4) by striking subparagraphs (C) through (E).

9 SEC. 1147. EXCHANGE OF LAW ENFORCEMENT INFORMA10 TION.

11 Section 11(e)(8) of the Food Stamp Act of 1977 (7

12 U.S.C. 2020(e)(8)) is amended—

13 (1) by striking ‘‘that (A) such’’ and inserting

14 the following: ‘‘that—

15 ‘‘(A) the’’;

16 (2) by striking ‘‘law, (B) notwithstanding’’ and

17 inserting the following: ‘‘law;

18 ‘‘(B) notwithstanding’’;

19 (3) by striking ‘‘Act, and (C) such’’ and insert20 ing the following: ‘‘Act;

21 ‘‘(C) the’’; and

22 (4) by adding at the end the following:

23 ‘‘(D) notwithstanding any other provision

24 of law, the address, social security number, and,

25 if available, photograph of any member of a
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1 household shall be made available, on request,

2 to any Federal, State, or local law enforcement

3 officer if the officer furnishes the State agency

4 with the name of the member and notifies the

5 agency that—

6 ‘‘(i) the member—

7 ‘‘(I) is fleeing to avoid prosecu8 tion, or custody or confinement after

9 conviction, for a crime (or attempt to

10 commit a crime) that, under the law

11 of the place the member is fleeing, is

12 a felony (or, in the case of New Jer13 sey, a high misdemeanor), or is violat14 ing a condition of probation or parole

15 imposed under Federal or State law;

16 or

17 ‘‘(II) has information that is nec18 essary for the officer to conduct an of19 ficial duty related to subclause (I);

20 ‘‘(ii) locating or apprehending the

21 member is an official duty; and

22 ‘‘(iii) the request is being made in the

23 proper exercise of an official duty; and

24 ‘‘(E) the safeguards shall not prevent com25 pliance with paragraph (16);’’.
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1 SEC. 1148. EXPEDITED COUPON SERVICE.

2 Section 11(e)(9) of the Food Stamp Act of 1977 (7

3 U.S.C. 2020(e)(9)) is amended—

4 (1) in subparagraph (A)—

5 (A) by striking ‘‘five days’’ and inserting

6 ‘‘7 days’’; and

7 (B) by inserting ‘‘and’’ at the end;

8 (2) by striking subparagraphs (B) and (C);

9 (3) by redesignating subparagraph (D) as sub10 paragraph (B); and

11 (4) in subparagraph (B), as so redesignated, by

12 striking ‘‘, (B), or (C)’’.

13 SEC. 1149. WITHDRAWING FAIR HEARING REQUESTS.

14 Section 11(e)(10) of the Food Stamp Act of 1977 (7

15 U.S.C. 2020(e)(10)) is amended by inserting before the

16 semicolon at the end a period and the following: ‘‘At the

17 option of a State, at any time prior to a fair hearing deter18 mination under this paragraph, a household may with19 draw, orally or in writing, a request by the household for

20 the fair hearing. If the withdrawal request is an oral re21 quest, the State agency shall provide a written notice to

22 the household confirming the withdrawal request and pro23 viding the household with an opportunity to request a

24 hearing’’.
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1 SEC. 1150. INCOME, ELIGIBILITY, AND IMMIGRATION STA2 TUS VERIFICATION SYSTEMS.

3 Section 11 of the Food Stamp Act of 1977 (7 U.S.C.

4 2020) is amended—

5 (1) in subsection (e)(18), as redesignated by

6 section 1145(1)(D)—

7 (A) by striking ‘‘that information is’’ and

8 inserting ‘‘at the option of the State agency,

9 that information may be’’; and

10 (B) by striking ‘‘shall be requested’’ and

11 inserting ‘‘may be requested’’; and

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

13 ‘‘(p) STATE VERIFICATION OPTION.—Notwithstand14 ing any other provision of law, in carrying out the food

15 stamp program, a State agency shall not be required to

16 use an income and eligibility or an immigration status ver17 ification system established under section 1137 of the So18 cial Security Act (42 U.S.C. 1320b–7).’’.

19 SEC. 1151. DISQUALIFICATION OF RETAILERS WHO INTEN20 TIONALLY SUBMIT FALSIFIED APPLICATIONS.

21 Section 12(b) of the Food Stamp Act of 1977 (7

22 U.S.C. 2021(b)) is amended—

23 (1) in paragraph (2), by striking ‘‘and’’ at the

24 end;

25 (2) in paragraph (3), by striking the period at

26 the end and inserting ‘‘; and’’; and
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•S 1956 PCS

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

2 ‘‘(4) for a reasonable period of time to be deter3 mined by the Secretary, including permanent dis4 qualification, on the knowing submission of an appli5 cation for the approval or reauthorization to accept

6 and redeem coupons that contains false information

7 about a substantive matter that was a part of the

8 application.’’.

9 SEC. 1152. DISQUALIFICATION OF RETAILERS WHO ARE

10 DISQUALIFIED UNDER THE WIC PROGRAM.

11 Section 12 of the Food Stamp Act of 1977 (7 U.S.C.

12 2021) is amended by adding at the end the following:

13 ‘‘(g) DISQUALIFICATION OF RETAILERS WHO ARE

14 DISQUALIFIED UNDER THE WIC PROGRAM.—

15 ‘‘(1) IN GENERAL.—The Secretary shall issue

16 regulations providing criteria for the disqualification

17 under this Act of an approved retail food store and

18 a wholesale food concern that is disqualified from

19 accepting benefits under the special supplemental

20 nutrition program for women, infants, and children

21 established under section 17 of the Child Nutrition

22 Act of 1966 (7 U.S.C. 1786).

23 ‘‘(2) TERMS.—A disqualification under para24 graph (1)—
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1 ‘‘(A) shall be for the same length of time

2 as the disqualification from the program re3 ferred to in paragraph (1);

4 ‘‘(B) may begin at a later date than the

5 disqualification from the program referred to in

6 paragraph (1); and

7 ‘‘(C) notwithstanding section 14, shall not

8 be subject to judicial or administrative review.’’.

9 SEC. 1153. COLLECTION OF OVERISSUANCES.

10 (a) COLLECTION OF OVERISSUANCES.—Section 13 of

11 the Food Stamp Act of 1977 (7 U.S.C. 2022) is amend12 ed—

13 (1) by striking subsection (b) and inserting the

14 following:

15 ‘‘(b) COLLECTION OF OVERISSUANCES.—

16 ‘‘(1) IN GENERAL.—Except as otherwise pro17 vided in this subsection, a State agency shall collect

18 any overissuance of coupons issued to a household

19 by—

20 ‘‘(A) reducing the allotment of the house21 hold;

22 ‘‘(B) withholding amounts from unemploy23 ment compensation from a member of the

24 household under subsection (c);
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1 ‘‘(C) recovering from Federal pay or a

2 Federal income tax refund under subsection

3 (d); or

4 ‘‘(D) any other means.

5 ‘‘(2) COST EFFECTIVENESS.—Paragraph (1)

6 shall not apply if the State agency demonstrates to

7 the satisfaction of the Secretary that all of the

8 means referred to in paragraph (1) are not cost ef9 fective.

10 ‘‘(3) MAXIMUM REDUCTION ABSENT FRAUD.—

11 If a household received an overissuance of coupons

12 without any member of the household being found

13 ineligible to participate in the program under section

14 6(b)(1) and a State agency elects to reduce the allot15 ment of the household under paragraph (1)(A), the

16 State agency shall not reduce the monthly allotment

17 of the household under paragraph (1)(A) by an

18 amount in excess of the greater of—

19 ‘‘(A) 10 percent of the monthly allotment

20 of the household; or

21 ‘‘(B) $10.

22 ‘‘(4) PROCEDURES.—A State agency shall col23 lect an overissuance of coupons issued to a house24 hold under paragraph (1) in accordance with the re25 quirements established by the State agency for pro-
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1 viding notice, electing a means of payment, and es2 tablishing a time schedule for payment.’’; and

3 (2) in subsection (d)—

4 (A) by striking ‘‘as determined under sub5 section (b) and except for claims arising from

6 an error of the State agency,’’ and inserting ‘‘,

7 as determined under subsection (b)(1),’’; and

8 (B) by inserting before the period at the

9 end the following: ‘‘or a Federal income tax re10 fund as authorized by section 3720A of title 31,

11 United States Code’’.

12 (b) CONFORMING AMENDMENTS.—Section

13 11(e)(8)(C) of the Food Stamp Act of 1977 (7 U.S.C.

14 2020(e)(8)(C)) is amended—

15 (1) by striking ‘‘and excluding claims’’ and all

16 that follows through ‘‘such section’’; and

17 (2) by inserting before the semicolon at the end

18 the following: ‘‘or a Federal income tax refund as

19 authorized by section 3720A of title 31, United

20 States Code’’.

21 (c) RETENTION RATE.—The proviso of the first sen22 tence of section 16(a) of the Food Stamp Act of 1977 (7

23 U.S.C. 2025(a)) is amended by striking ‘‘25 percent dur24 ing the period beginning October 1, 1990’’ and all that

25 follows through ‘‘error of a State agency’’ and inserting
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1 the following: ‘‘25 percent of the overissuances collected

2 by the State agency under section 13, except those

3 overissuances arising from an error of the State agency’’.

4 SEC. 1154. AUTHORITY TO SUSPEND STORES VIOLATING

5 PROGRAM REQUIREMENTS PENDING ADMIN6 ISTRATIVE AND JUDICIAL REVIEW.

7 Section 14(a) of the Food Stamp Act of 1977 (7

8 U.S.C. 2023(a)) is amended—

9 (1) by redesignating the first through seven10 teenth sentences as paragraphs (1) through (17), re11 spectively; and

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

13 ‘‘(18) SUSPENSION OF STORES PENDING RE14 VIEW.—Notwithstanding any other provision of this

15 subsection, any permanent disqualification of a retail

16 food store or wholesale food concern under para17 graph (3) or (4) of section 12(b) shall be effective

18 from the date of receipt of the notice of disqualifica19 tion. If the disqualification is reversed through ad20 ministrative or judicial review, the Secretary shall

21 not be liable for the value of any sales lost during

22 the disqualification period.’’.
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1 SEC. 1155. EXPANDED CRIMINAL FORFEITURE FOR VIOLA2 TIONS.

3 (a) FORFEITURE OF ITEMS EXCHANGED IN FOOD

4 STAMP TRAFFICKING.—The first sentence of section

5 15(g) of the Food Stamp Act of 1977 (7 U.S.C. 2024(g))

6 is amended by striking ‘‘or intended to be furnished’’.

7 (b) CRIMINAL FORFEITURE.—Section 15 of the Food

8 Stamp Act of 1977 (7 U.S.C. 2024) is amended by adding

9 at the end the following:

10 ‘‘(h) CRIMINAL FORFEITURE.—

11 ‘‘(1) IN GENERAL.—In imposing a sentence on

12 a person convicted of an offense in violation of sub13 section (b) or (c), a court shall order, in addition to

14 any other sentence imposed under this section, that

15 the person forfeit to the United States all property

16 described in paragraph (2).

17 ‘‘(2) PROPERTY SUBJECT TO FORFEITURE.—All

18 property, real and personal, used in a transaction or

19 attempted transaction, to commit, or to facilitate the

20 commission of, a violation (other than a mis21 demeanor) of subsection (b) or (c), or proceeds

22 traceable to a violation of subsection (b) or (c), shall

23 be subject to forfeiture to the United States under

24 paragraph (1).

25 ‘‘(3) INTEREST OF OWNER.—No interest in

26 property shall be forfeited under this subsection as
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1 the result of any act or omission established by the

2 owner of the interest to have been committed or

3 omitted without the knowledge or consent of the

4 owner.

5 ‘‘(4) PROCEEDS.—The proceeds from any sale

6 of forfeited property and any monies forfeited under

7 this subsection shall be used—

8 ‘‘(A) first, to reimburse the Department of

9 Justice for the costs incurred by the Depart10 ment to initiate and complete the forfeiture pro11 ceeding;

12 ‘‘(B) second, to reimburse the Department

13 of Agriculture Office of Inspector General for

14 any costs the Office incurred in the law enforce15 ment effort resulting in the forfeiture;

16 ‘‘(C) third, to reimburse any Federal or

17 State law enforcement agency for any costs in18 curred in the law enforcement effort resulting

19 in the forfeiture; and

20 ‘‘(D) fourth, by the Secretary to carry out

21 the approval, reauthorization, and compliance

22 investigations of retail stores and wholesale

23 food concerns under section 9.’’.
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1 SEC. 1156. LIMITATION ON FEDERAL MATCH.

2 Section 16(a)(4) of the Food Stamp Act of 1977 (7

3 U.S.C. 2025(a)(4)) is amended by inserting after the

4 comma at the end the following: ‘‘but not including re5 cruitment activities,’’.

6 SEC. 1157. STANDARDS FOR ADMINISTRATION.

7 (a) IN GENERAL.—Section 16 of the Food Stamp Act

8 of 1977 (7 U.S.C. 2025) is amended by striking sub9 section (b).

10 (b) CONFORMING AMENDMENTS.—

11 (1) The first sentence of section 11(g) of the

12 Food Stamp Act of 1977 (7 U.S.C. 2020(g)) is

13 amended by striking ‘‘the Secretary’s standards for

14 the efficient and effective administration of the pro15 gram established under section 16(b)(1) or’’.

16 (2) Section 16(c)(1)(B) of the Food Stamp Act

17 of 1977 (7 U.S.C. 2025(c)(1)(B)) is amended by

18 striking ‘‘pursuant to subsection (b)’’.

19 SEC. 1158. WORK SUPPLEMENTATION OR SUPPORT PRO20 GRAM.

21 Section 16 of the Food Stamp Act of 1977 (7 U.S.C.

22 2025), as amended by section 1157(a), is amended by in23 serting after subsection (a) the following:

24 ‘‘(b) WORK SUPPLEMENTATION OR SUPPORT PRO25 GRAM.—
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•S 1956 PCS

1 ‘‘(1) DEFINITION OF WORK SUPPLEMENTATION

2 OR SUPPORT PROGRAM.—In this subsection, the

3 term ‘work supplementation or support program’

4 means a program under which, as determined by the

5 Secretary, public assistance (including any benefits

6 provided under a program established by the State

7 and the food stamp program) is provided to an em8 ployer to be used for hiring and employing a public

9 assistance recipient who was not employed by the

10 employer at the time the public assistance recipient

11 entered the program.

12 ‘‘(2) PROGRAM.—A State agency may elect to

13 use an amount equal to the allotment that would

14 otherwise be issued to a household under the food

15 stamp program, but for the operation of this sub16 section, for the purpose of subsidizing or supporting

17 a job under a work supplementation or support pro18 gram established by the State.

19 ‘‘(3) PROCEDURE.—If a State agency makes an

20 election under paragraph (2) and identifies each

21 household that participates in the food stamp pro22 gram that contains an individual who is participat23 ing in the work supplementation or support pro24 gram—
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•S 1956 PCS

1 ‘‘(A) the Secretary shall pay to the State

2 agency an amount equal to the value of the al3 lotment that the household would be eligible to

4 receive but for the operation of this subsection;

5 ‘‘(B) the State agency shall expend the

6 amount received under subparagraph (A) in ac7 cordance with the work supplementation or sup8 port program in lieu of providing the allotment

9 that the household would receive but for the op10 eration of this subsection;

11 ‘‘(C) for purposes of—

12 ‘‘(i) sections 5 and 8(a), the amount

13 received under this subsection shall be ex14 cluded from household income and re15 sources; and

16 ‘‘(ii) section 8(b), the amount received

17 under this subsection shall be considered to

18 be the value of an allotment provided to

19 the household; and

20 ‘‘(D) the household shall not receive an al21 lotment from the State agency for the period

22 during which the member continues to partici23 pate in the work supplementation or support

24 program.
77

•S 1956 PCS

1 ‘‘(4) OTHER WORK REQUIREMENTS.—No indi2 vidual shall be excused, by reason of the fact that

3 a State has a work supplementation or support pro4 gram, from any work requirement under section

5 6(d), except during the periods in which the individ6 ual is employed under the work supplementation or

7 support program.

8 ‘‘(5) LENGTH OF PARTICIPATION.—A State

9 agency shall provide a description of how the public

10 assistance recipients in the program shall, within a

11 specific period of time, be moved from supplemented

12 or supported employment to employment that is not

13 supplemented or supported.

14 ‘‘(6) DISPLACEMENT.—A work supplementation

15 or support program shall not displace the employ16 ment of individuals who are not supplemented or

17 supported.’’.

18 SEC. 1159. WAIVER AUTHORITY.

19 Section 17(b)(1) of the Food Stamp Act of 1977 (7

20 U.S.C. 2026(b)(1)) is amended—

21 (1) by redesignating subparagraph (B) as sub22 paragraph (C); and

23 (2) in subparagraph (A)—

24 (A) in the first sentence, by striking ‘‘ben25 efits to eligible households, including’’ and in-
78

•S 1956 PCS

1 serting the following: ‘‘benefits to eligible house2 holds, and may waive any requirement of this

3 Act to the extent necessary for the project to be

4 conducted.

5 ‘‘(B) PROJECT REQUIREMENTS.—

6 ‘‘(i) PROGRAM GOAL.—The Secretary

7 may not conduct a project under subpara8 graph (A) unless—

9 ‘‘(I) the project is consistent with

10 the goal of the food stamp program of

11 providing food assistance to raise lev12 els of nutrition among low-income in13 dividuals; and

14 ‘‘(II) the project includes an eval15 uation to determine the effects of the

16 project.

17 ‘‘(ii) PERMISSIBLE PROJECTS.—The

18 Secretary may conduct a project under

19 subparagraph (A) to—

20 ‘‘(I) improve program adminis21 tration;

22 ‘‘(II) increase the self-sufficiency

23 of food stamp recipients;

24 ‘‘(III) test innovative welfare re25 form strategies; or
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•S 1956 PCS

1 ‘‘(IV) allow greater conformity

2 with the rules of other programs than

3 would be allowed but for this para4 graph.

5 ‘‘(iii) RESTRICTIONS ON PERMISSIBLE

6 PROJECTS.—If the Secretary finds that a

7 project under subparagraph (A) would re8 duce benefits by more than 20 percent for

9 more than 15 percent of households in the

10 area subject to the project (not including

11 any household whose benefits are reduced

12 due to a failure to comply with work or

13 other conduct requirements), the project—

14 ‘‘(I) may not include more than

15 15 percent of the State’s food stamp

16 household, unless the Secretary deter17 mines that including a larger percent18 age of the food stamp household is

19 justified by the nature of the project;

20 and

21 ‘‘(II) shall continue for not more

22 than 5 years after the date of imple23 mentation, unless the Secretary ap24 proves an extension requested by the

25 State agency at any time.
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1 ‘‘(iv) IMPERMISSIBLE PROJECTS.—

2 The Secretary may not conduct a project

3 under subparagraph (A) that—

4 ‘‘(I) involves the payment of the

5 value of an allotment in the form of

6 cash, unless the project was approved

7 prior to the date of enactment of this

8 subparagraph;

9 ‘‘(II) has the effect of substan10 tially transferring funds made avail11 able under this Act to services or ben12 efits provided primarily through an13 other public assistance program, or

14 using the funds for any purpose other

15 than the purchase of food, program

16 administration, or an employment or

17 training program;

18 ‘‘(III) is inconsistent with—

19 ‘‘(aa) the last 2 sentences of

20 section 3(i);

21 ‘‘(bb) the last sentence of

22 section 5(a), insofar as a waiver

23 denies assistance on the basis of

24 nonfinancial criteria to an other25 wise eligible household or individ-
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•S 1956 PCS

1 ual if the household or individual

2 has not failed to comply with any

3 work, behavioral, or other con4 duct requirement under this or

5 another program;

6 ‘‘(cc) section 5(c)(2);

7 ‘‘(dd) paragraph (2)(B),

8 (4)(F)(i), or (4)(K) of section

9 6(d);

10 ‘‘(ee) section 8(b);

11 ‘‘(ff) subsection (a), (c), (g),

12 (h)(2), or (h)(3) of section 16;

13 ‘‘(gg) this paragraph; or

14 ‘‘(hh) subsection (a)(1) or

15 (g)(1) of section 20; or

16 ‘‘(IV) is not limited to a specific

17 time period.

18 ‘‘(v) ADDITIONAL INCLUDED

19 PROJECTS.—Pilot or experimental projects

20 may include’’;

21 (B) by striking ‘‘to aid to families with de22 pendent children under part A of title IV of the

23 Social Security Act’’ and inserting ‘‘are receiv24 ing assistance under a State program funded
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•S 1956 PCS

1 under part A of title IV of the Social Security

2 Act (42 U.S.C. 601 et seq.)’’; and

3 (C) by striking ‘‘coupons. The Secretary’’

4 and all that follows through ‘‘Any pilot’’ and in5 serting the following: ‘‘coupons.

6 ‘‘(vi) CASH PAYMENT PILOT

7 PROJECTS.—Any pilot’’.

8 SEC. 1160. RESPONSE TO WAIVERS.

9 Section 17(b)(1) of the Food Stamp Act of 1977 (7

10 U.S.C. 2026(b)(1)), as amended by section 1159, is

11 amended by adding at the end the following:

12 ‘‘(D) RESPONSE TO WAIVERS.—

13 ‘‘(i) RESPONSE.—Not later than 60

14 days after the date of receiving a request

15 for a waiver under subparagraph (A), the

16 Secretary shall provide a response that—

17 ‘‘(I) approves the waiver request;

18 ‘‘(II) denies the waiver request

19 and describes any modification needed

20 for approval of the waiver request;

21 ‘‘(III) denies the waiver request

22 and describes the grounds for the de23 nial; or

24 ‘‘(IV) requests clarification of the

25 waiver request.
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1 ‘‘(ii) FAILURE TO RESPOND.—If the

2 Secretary does not provide a response in

3 accordance with clause (i), the waiver shall

4 be considered approved, unless the ap5 proval is specifically prohibited by this Act.

6 ‘‘(iii) NOTICE OF DENIAL.—On denial

7 of a waiver request under clause (i)(III),

8 the Secretary shall provide a copy of the

9 waiver request and a description of the

10 reasons for the denial to the Committee on

11 Agriculture of the House of Representa12 tives and the Committee on Agriculture,

13 Nutrition, and Forestry of the Senate.’’.

14 SEC. 1161. EMPLOYMENT INITIATIVES PROGRAM.

15 Section 17 of the Food Stamp Act of 1977 (7 U.S.C.

16 2026) is amended by striking subsection (d) and inserting

17 the following:

18 ‘‘(d) EMPLOYMENT INITIATIVES PROGRAM.—

19 ‘‘(1) ELECTION TO PARTICIPATE.—

20 ‘‘(A) IN GENERAL.—Subject to the other

21 provisions of this subsection, a State may elect

22 to carry out an employment initiatives program

23 under this subsection.

24 ‘‘(B) REQUIREMENT.—A State shall be eli25 gible to carry out an employment initiatives
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1 program under this subsection only if not less

2 than 50 percent of the households in the State

3 that received food stamp benefits during the

4 summer of 1993 also received benefits under a

5 State program funded under part A of title IV

6 of the Social Security Act (42 U.S.C. 601 et

7 seq.) during the summer of 1993.

8 ‘‘(2) PROCEDURE.—

9 ‘‘(A) IN GENERAL.—A State that has

10 elected to carry out an employment initiatives

11 program under paragraph (1) may use amounts

12 equal to the food stamp allotments that would

13 otherwise be issued to a household under the

14 food stamp program, but for the operation of

15 this subsection, to provide cash benefits in lieu

16 of the food stamp allotments to the household

17 if the household is eligible under paragraph (3).

18 ‘‘(B) PAYMENT.—The Secretary shall pay

19 to each State that has elected to carry out an

20 employment initiatives program under para21 graph (1) an amount equal to the value of the

22 allotment that each household participating in

23 the program in the State would be eligible to

24 receive under this Act but for the operation of

25 this subsection.
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1 ‘‘(C) OTHER PROVISIONS.—For purposes

2 of the food stamp program (other than this

3 subsection)—

4 ‘‘(i) cash assistance under this sub5 section shall be considered to be an allot6 ment; and

7 ‘‘(ii) each household receiving cash

8 benefits under this subsection shall not re9 ceive any other food stamp benefit during

10 the period for which the cash assistance is

11 provided.

12 ‘‘(D) ADDITIONAL PAYMENTS.—Each

13 State that has elected to carry out an employ14 ment initiatives program under paragraph (1)

15 shall—

16 ‘‘(i) increase the cash benefits pro17 vided to each household participating in

18 the program in the State under this sub19 section to compensate for any State or

20 local sales tax that may be collected on

21 purchases of food by the household, unless

22 the Secretary determines on the basis of

23 information provided by the State that the

24 increase is unnecessary on the basis of the
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•S 1956 PCS

1 limited nature of the items subject to the

2 State or local sales tax; and

3 ‘‘(ii) pay the cost of any increase in

4 cash benefits required by clause (i).

5 ‘‘(3) ELIGIBILITY.—A household shall be eligi6 ble to receive cash benefits under paragraph (2) if

7 an adult member of the household—

8 ‘‘(A) has worked in unsubsidized employ9 ment for not less than the preceding 90 days;

10 ‘‘(B) has earned not less than $350 per

11 month from the employment referred to in sub12 paragraph (A) for not less than the preceding

13 90 days;

14 ‘‘(C)(i) is receiving benefits under a State

15 program funded under part A of title IV of the

16 Social Security Act (42 U.S.C. 601 et seq.); or

17 ‘‘(ii) was receiving benefits under a State

18 program funded under part A of title IV of the

19 Social Security Act (42 U.S.C. 601 et seq.) at

20 the time the member first received cash benefits

21 under this subsection and is no longer eligible

22 for the State program because of earned in23 come;
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1 ‘‘(D) is continuing to earn not less than

2 $350 per month from the employment referred

3 to in subparagraph (A); and

4 ‘‘(E) elects to receive cash benefits in lieu

5 of food stamp benefits under this subsection.

6 ‘‘(4) EVALUATION.—A State that operates a

7 program under this subsection for 2 years shall pro8 vide to the Secretary a written evaluation of the im9 pact of cash assistance under this subsection. The

10 State agency, with the concurrence of the Secretary,

11 shall determine the content of the evaluation.’’.

12 SEC. 1162. REAUTHORIZATION.

13 The first sentence of section 18(a)(1) of the Food

14 Stamp Act of 1977 (7 U.S.C. 2027(a)(1)) is amended by

15 striking ‘‘1991 through 1997’’ and inserting ‘‘1996

16 through 2002’’.

17 SEC. 1163. SIMPLIFIED FOOD STAMP PROGRAM.

18 (a) IN GENERAL.—The Food Stamp Act of 1977 (7

19 U.S.C. 2011 et seq.) is amended by adding at the end

20 the following:

21 ‘‘SEC. 26. SIMPLIFIED FOOD STAMP PROGRAM.

22 ‘‘(a) DEFINITION OF FEDERAL COSTS.—In this sec23 tion, the term ‘Federal costs’ does not include any Federal

24 costs incurred under section 17.
88

•S 1956 PCS

1 ‘‘(b) ELECTION.—Subject to subsection (d), a State

2 may elect to carry out a Simplified Food Stamp Program

3 (referred to in this section as a ‘Program’), statewide or

4 in a political subdivision of the State, in accordance with

5 this section.

6 ‘‘(c) OPERATION OF PROGRAM.—If a State elects to

7 carry out a Program, within the State or a political sub8 division of the State—

9 ‘‘(1) only households in which all members re10 ceive assistance under a State program funded

11 under part A of title IV of the Social Security Act

12 (42 U.S.C. 601 et seq.) shall receive benefits under

13 the Program;

14 ‘‘(2) a household in which all members receive

15 assistance under a State program funded under part

16 A of title IV of the Social Security Act (42 U.S.C.

17 601 et seq.) shall automatically be eligible to partici18 pate in the Program; and

19 ‘‘(3) subject to subsection (f), benefits under

20 the Program shall be determined under rules and

21 procedures established by the State under—

22 ‘‘(A) a State program funded under part A

23 of title IV of the Social Security Act (42 U.S.C.

24 601 et seq.);
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1 ‘‘(B) the food stamp program (other than

2 section 27); or

3 ‘‘(C) a combination of a State program

4 funded under part A of title IV of the Social

5 Security Act (42 U.S.C. 601 et seq.) and the

6 food stamp program (other than section 27).

7 ‘‘(d) APPROVAL OF PROGRAM.—

8 ‘‘(1) STATE PLAN.—A State agency may not

9 operate a Program unless the Secretary approves a

10 State plan for the operation of the Program under

11 paragraph (2).

12 ‘‘(2) APPROVAL OF PLAN.—The Secretary shall

13 approve any State plan to carry out a Program if

14 the Secretary determines that the plan—

15 ‘‘(A) complies with this section; and

16 ‘‘(B) contains sufficient documentation

17 that the plan will not increase Federal costs for

18 any fiscal year.

19 ‘‘(e) INCREASED FEDERAL COSTS.—

20 ‘‘(1) DETERMINATION.—

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

22 determine whether a Program being carried out

23 by a State agency is increasing Federal costs

24 under this Act.
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•S 1956 PCS

1 ‘‘(B) NO EXCLUDED HOUSEHOLDS.—In

2 making a determination under subparagraph

3 (A), the Secretary shall not require the State

4 agency to collect or report any information on

5 households not included in the Program.

6 ‘‘(C) ALTERNATIVE ACCOUNTING PERI7 ODS.—The Secretary may approve the request

8 of a State agency to apply alternative account9 ing periods to determine if Federal costs do not

10 exceed the Federal costs had the State agency

11 not elected to carry out the Program.

12 ‘‘(2) NOTIFICATION.—If the Secretary deter13 mines that the Program has increased Federal costs

14 under this Act for any fiscal year or any portion of

15 any fiscal year, the Secretary shall notify the State

16 not later than 30 days after the Secretary makes the

17 determination under paragraph (1).

18 ‘‘(3) ENFORCEMENT.—

19 ‘‘(A) CORRECTIVE ACTION.—Not later

20 than 90 days after the date of a notification

21 under paragraph (2), the State shall submit a

22 plan for approval by the Secretary for prompt

23 corrective action that is designed to prevent the

24 Program from increasing Federal costs under

25 this Act.
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•S 1956 PCS

1 ‘‘(B) TERMINATION.—If the State does not

2 submit a plan under subparagraph (A) or carry

3 out a plan approved by the Secretary, the Sec4 retary shall terminate the approval of the State

5 agency operating the Program and the State

6 agency shall be ineligible to operate a future

7 Program.

8 ‘‘(f) RULES AND PROCEDURES.—

9 ‘‘(1) IN GENERAL.—In operating a Program, a

10 State or political subdivision of a State may follow

11 the rules and procedures established by the State or

12 political subdivision under a State program funded

13 under part A of title IV of the Social Security Act

14 (42 U.S.C. 601 et seq.) or under the food stamp

15 program.

16 ‘‘(2) STANDARDIZED DEDUCTIONS.—In operat17 ing a Program, a State or political subdivision of a

18 State may standardize the deductions provided

19 under section 5(e). In developing the standardized

20 deduction, the State shall consider the work ex21 penses, dependent care costs, and shelter costs of

22 participating households.

23 ‘‘(3) REQUIREMENTS.—In operating a Pro24 gram, a State or political subdivision shall comply

25 with the requirements of—
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•S 1956 PCS

1 ‘‘(A) subsections (a) through (g) of section

2 7;

3 ‘‘(B) section 8(a) (except that the income

4 of a household may be determined under a

5 State program funded under part A of title IV

6 of the Social Security Act (42 U.S.C. 601 et

7 seq.));

8 ‘‘(C) subsection (b) and (d) of section 8;

9 ‘‘(D) subsections (a), (c), (d), and (n) of

10 section 11;

11 ‘‘(E) paragraph (3) of section 11(e), to the

12 extent that the paragraph requires that an eli13 gible household be certified and receive an allot14 ment for the period of application not later

15 than 30 days after filing an application;

16 ‘‘(F) paragraphs (8), (12), (16), (18),

17 (20), (24), and (25) of section 11(e);

18 ‘‘(G) section 11(e)(10) (or a comparable

19 requirement established by the State under a

20 State program funded under part A of title IV

21 of the Social Security Act (42 U.S.C. 601 et

22 seq.)); and

23 ‘‘(H) section 16.

24 ‘‘(4) LIMITATION ON ELIGIBILITY.—Notwith25 standing any other provision of this section, a house-
93

•S 1956 PCS

1 hold may not receive benefits under this section as

2 a result of the eligibility of the household under a

3 State program funded under part A of title IV of the

4 Social Security Act (42 U.S.C. 601 et seq.), unless

5 the Secretary determines that any household with in6 come above 130 percent of the poverty guidelines is

7 not eligible for the program.’’.

8 (b) STATE PLAN PROVISIONS.—Section 11(e) of the

9 Food Stamp Act of 1977 (7 U.S.C. 2020(e)), as amended

10 by sections 1129(b) and 1145, is amended by adding at

11 the end the following:

12 ‘‘(25) if a State elects to carry out a Simplified

13 Food Stamp Program under section 26, the plans of

14 the State agency for operating the program, includ15 ing—

16 ‘‘(A) the rules and procedures to be fol17 lowed by the State agency to determine food

18 stamp benefits;

19 ‘‘(B) how the State agency will address the

20 needs of households that experience high shelter

21 costs in relation to the incomes of the house22 holds; and

23 ‘‘(C) a description of the method by which

24 the State agency will carry out a quality control

25 system under section 16(c).’’.
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1 (c) CONFORMING AMENDMENTS.—

2 (1) Section 8 of the Food Stamp Act of 1977

3 (7 U.S.C. 2017), as amended by section 1140, is

4 amended—

5 (A) by striking subsection (e); and

6 (B) by redesignating subsection (f) as sub7 section (e).

8 (2) Section 17 of the Food Stamp Act of 1977

9 (7 U.S.C. 2026) is amended—

10 (A) by striking subsection (i); and

11 (B) by redesignating subsections (j)

12 through (l) as subsections (i) through (k), re13 spectively.

14 SEC. 1164. STATE FOOD ASSISTANCE BLOCK GRANT.

15 (a) IN GENERAL.—The Food Stamp Act of 1977 (7

16 U.S.C. 2011 et seq.), as amended by section 1163, is

17 amended by adding at the end the following:

18 ‘‘SEC. 27. STATE FOOD ASSISTANCE BLOCK GRANT.

19 ‘‘(a) DEFINITIONS.—In this section:

20 ‘‘(1) FOOD ASSISTANCE.—The term ‘food as21 sistance’ means assistance that may be used only to

22 obtain food, as defined in section 3(g).

23 ‘‘(2) STATE.—The term ‘State’ means each of

24 the 50 States, the District of Columbia, Guam, and

25 the Virgin Islands of the United States.
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•S 1956 PCS

1 ‘‘(b) ESTABLISHMENT.—The Secretary shall estab2 lish a program to make grants to States in accordance

3 with this section to provide—

4 ‘‘(1) food assistance to needy individuals and

5 families residing in the State; and

6 ‘‘(2) funds for administrative costs incurred in

7 providing the assistance.

8 ‘‘(c) ELECTION.—

9 ‘‘(1) IN GENERAL.—A State may annually elect

10 to participate in the program established under sub11 section (b) if the State—

12 ‘‘(A) has fully implemented an electronic

13 benefit transfer system that operates in the en14 tire State;

15 ‘‘(B) has a payment error rate under sec16 tion 16(c) that is not more than 6 percent as

17 announced most recently by the Secretary; or

18 ‘‘(C) has a payment error rate in excess of

19 6 percent and agrees to contribute non-Federal

20 funds for the fiscal year of the grant, for bene21 fits and administration of the State’s food as22 sistance program, in an amount determined

23 under paragraph (2).

24 ‘‘(2) STATE MANDATORY CONTRIBUTIONS.—
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•S 1956 PCS

1 ‘‘(A) IN GENERAL.—In the case of a State

2 that elects to participate in the program under

3 paragraph (1)(C), the State shall agree to con4 tribute, for a fiscal year, an amount equal to—

5 ‘‘(i)(I) the food stamp benefits issued

6 in the State; multiplied by

7 ‘‘(II) the payment error rate of the

8 State under section 16(c); minus

9 ‘‘(ii)(I) the food stamp benefits issued

10 in the State; multiplied by

11 ‘‘(II) 6 percent.

12 ‘‘(B) DETERMINATION.—Notwithstanding

13 sections 13 and 14, the calculation of the con14 tribution shall be based solely on the determina15 tion of the Secretary of the payment error rate

16 under section 16(c).

17 ‘‘(C) DATA.—For purposes of implement18 ing subparagraph (A) for a fiscal year, the Sec19 retary shall use the data for the most recent

20 fiscal year available.

21 ‘‘(3) ELECTION LIMITATION.—

22 ‘‘(A) RE-ENTERING FOOD STAMP PRO23 GRAM.—A State that elects to participate in the

24 program under paragraph (1) may in a subse25 quent year decline to elect to participate in the
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•S 1956 PCS

1 program established under subsection (b) and

2 instead participate in the food stamp program

3 in accordance with the other sections of this

4 Act.

5 ‘‘(B) LIMITATION.—Subsequent to reenter6 ing the food stamp program under subpara7 graph (A), the State shall only be eligible to

8 participate in the food stamp program in ac9 cordance with the other sections of this Act and

10 shall not be eligible to elect to participate in the

11 program established under subsection (b).

12 ‘‘(4) PROGRAM EXCLUSIVE.—

13 ‘‘(A) IN GENERAL.—A State that is par14 ticipating in the program established under sub15 section (b) shall not be subject to, or receive

16 any benefit under, this Act except as provided

17 in this section.

18 ‘‘(B) CONTRACT WITH FEDERAL GOVERN19 MENT.—Nothing in this section shall prohibit a

20 State from contracting with the Federal Gov21 ernment for the provision of services or mate22 rials necessary to carry out a program under

23 this section.

24 ‘‘(d) LEAD AGENCY.—A State desiring to receive a

25 grant under this section shall designate, in an application
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•S 1956 PCS

1 submitted to the Secretary under subsection (e)(1), an ap2 propriate State agency responsible for the administration

3 of the program under this section as the lead agency.

4 ‘‘(e) APPLICATION AND PLAN.—

5 ‘‘(1) APPLICATION.—To be eligible to receive

6 assistance under this section, a State shall prepare

7 and submit to the Secretary an application at such

8 time, in such manner, and containing such informa9 tion as the Secretary shall by regulation require, in10 cluding—

11 ‘‘(A) an assurance that the State will com12 ply with the requirements of this section;

13 ‘‘(B) a State plan that meets the require14 ments of paragraph (3); and

15 ‘‘(C) an assurance that the State will com16 ply with the requirements of the State plan

17 under paragraph (3).

18 ‘‘(2) ANNUAL PLAN.—The State plan contained

19 in the application under paragraph (1) shall be sub20 mitted for approval annually.

21 ‘‘(3) REQUIREMENTS OF PLAN.—

22 ‘‘(A) LEAD AGENCY.—The State plan shall

23 identify the lead agency.

24 ‘‘(B) USE OF BLOCK GRANT FUNDS.—The

25 State plan shall provide that the State shall use
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•S 1956 PCS

1 the amounts provided to the State for each fis2 cal year under this section—

3 ‘‘(i) to provide food assistance to

4 needy individuals and families residing in

5 the State, other than residents of institu6 tions who are ineligible for food stamps

7 under section 3(i); and

8 ‘‘(ii) to pay administrative costs in9 curred in providing the assistance.

10 ‘‘(C) GROUPS SERVED.—The State plan

11 shall describe how and to what extent the pro12 gram will serve specific groups of individuals

13 and families and how the treatment will differ

14 from treatment under the food stamp program

15 under the other sections of this Act of the indi16 viduals and families, including—

17 ‘‘(i) elderly individuals and families;

18 ‘‘(ii) migrants or seasonal farm19 workers;

20 ‘‘(iii) homeless individuals and fami21 lies;

22 ‘‘(iv) individuals and families who live

23 in institutions eligible under section 3(i);

24 ‘‘(v) individuals and families with

25 earnings; and
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1 ‘‘(vi) members of Indian tribes or trib2 al organizations.

3 ‘‘(D) ASSISTANCE FOR ENTIRE STATE.—

4 The State plan shall provide that benefits under

5 this section shall be available throughout the

6 entire State.

7 ‘‘(E) NOTICE AND HEARINGS.—The State

8 plan shall provide that an individual or family

9 who applies for, or receives, assistance under

10 this section shall be provided with notice of, and

11 an opportunity for a hearing on, any action

12 under this section that adversely affects the in13 dividual or family.

14 ‘‘(F) ASSESSMENT OF NEEDS.—The State

15 plan shall assess the food and nutrition needs

16 of needy persons residing in the State.

17 ‘‘(G) ELIGIBILITY STANDARDS.—The State

18 plan shall describe the income, resource, and

19 other eligibility standards that are established

20 for the receipt of assistance under this section.

21 ‘‘(H) DISQUALIFICATION OF FLEEING FEL22 ONS.—The State plan shall provide for the dis23 qualification of any individual who would be

24 disqualified from participating in the food

25 stamp program under section 6(k).
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1 ‘‘(I) RECEIVING BENEFITS IN MORE THAN

2 1 JURISDICTION.—The State plan shall estab3 lish a system for the exchange of information

4 with other States to verify the identity and re5 ceipt of benefits by recipients.

6 ‘‘(J) PRIVACY.—The State plan shall pro7 vide for safeguarding and restricting the use

8 and disclosure of information about any individ9 ual or family receiving assistance under this

10 section.

11 ‘‘(K) OTHER INFORMATION.—The State

12 plan shall contain such other information as

13 may be required by the Secretary.

14 ‘‘(4) APPROVAL OF APPLICATION AND PLAN.—

15 The Secretary shall approve an application and

16 State plan that satisfies the requirements of this

17 section.

18 ‘‘(f) NO INDIVIDUAL OR FAMILY ENTITLEMENT TO

19 ASSISTANCE.—Nothing in this section—

20 ‘‘(1) entitles any individual or family to assist21 ance under this section; or

22 ‘‘(2) limits the right of a State to impose addi23 tional limitations or conditions on assistance under

24 this section.

25 ‘‘(g) BENEFITS FOR ALIENS.—
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1 ‘‘(1) ELIGIBILITY.—No individual who is an

2 alien shall be eligible to receive benefits under a

3 State plan approved under subsection (e)(4) if the

4 individual is not eligible to participate in the food

5 stamp program due to the alien status of the indi6 vidual.

7 ‘‘(2) INCOME.—The State plan shall provide

8 that the income of an alien shall be determined in

9 accordance with sections 5(i) and 6(f).

10 ‘‘(h) EMPLOYMENT AND TRAINING.—

11 ‘‘(1) WORK REQUIREMENTS.—No individual or

12 household shall be eligible to receive benefits under

13 a State plan funded under this section if the individ14 ual or household is not eligible to participate in the

15 food stamp program under subsection (d) or (o) of

16 section 6.

17 ‘‘(2) WORK PROGRAMS.—Each State shall im18 plement an employment and training program in ac19 cordance with the terms and conditions of section

20 6(d)(4) for individuals under the program and shall

21 be eligible to receive funding under section 16(h).

22 ‘‘(i) ENFORCEMENT.—

23 ‘‘(1) REVIEW OF COMPLIANCE WITH STATE

24 PLAN.—The Secretary shall review and monitor
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1 State compliance with this section and the State

2 plan approved under subsection (e)(4).

3 ‘‘(2) NONCOMPLIANCE.—

4 ‘‘(A) IN GENERAL.—If the Secretary, after

5 reasonable notice to a State and opportunity for

6 a hearing, finds that—

7 ‘‘(i) there has been a failure by the

8 State to comply substantially with any pro9 vision or requirement set forth in the State

10 plan approved under subsection (e)(4); or

11 ‘‘(ii) in the operation of any program

12 or activity for which assistance is provided

13 under this section, there is a failure by the

14 State to comply substantially with any pro15 vision of this section;

16 the Secretary shall notify the State of the find17 ing and that no further grants will be made to

18 the State under this section (or, in the case of

19 noncompliance in the operation of a program or

20 activity, that no further grants to the State will

21 be made with respect to the program or activ22 ity) until the Secretary is satisfied that there is

23 no longer any failure to comply or that the non24 compliance will be promptly corrected.
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1 ‘‘(B) OTHER PENALTIES.—In the case of a

2 finding of noncompliance made pursuant to

3 subparagraph (A), the Secretary may, in addi4 tion to, or in lieu of, imposing the penalties de5 scribed in subparagraph (A), impose other ap6 propriate penalties, including recoupment of

7 money improperly expended for purposes pro8 hibited or not authorized by this section and

9 disqualification from the receipt of financial as10 sistance under this section.

11 ‘‘(C) NOTICE.—The notice required under

12 subparagraph (A) shall include a specific identi13 fication of any additional penalty being imposed

14 under subparagraph (B).

15 ‘‘(3) ISSUANCE OF REGULATIONS.—The Sec16 retary shall establish by regulation procedures for—

17 ‘‘(A) receiving, processing, and determin18 ing the validity of complaints made to the Sec19 retary concerning any failure of a State to com20 ply with the State plan or any requirement of

21 this section; and

22 ‘‘(B) imposing penalties under this section.

23 ‘‘(j) GRANT.—

24 ‘‘(1) IN GENERAL.—For each fiscal year, the

25 Secretary shall pay to a State that has an applica-
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1 tion approved by the Secretary under subsection

2 (e)(4) an amount that is equal to the grant of the

3 State under subsection (m) for the fiscal year.

4 ‘‘(2) METHOD OF GRANT.—The Secretary shall

5 make a grant to a State for a fiscal year under this

6 section by issuing 1 or more letters of credit for the

7 fiscal year, with necessary adjustments on account

8 of overpayments or underpayments, as determined

9 by the Secretary.

10 ‘‘(3) SPENDING OF GRANTS BY STATE.—

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

12 subparagraph (B), a grant to a State deter13 mined under subsection (m)(1) for a fiscal year

14 may be expended by the State only in the fiscal

15 year.

16 ‘‘(B) CARRYOVER.—The State may reserve

17 up to 10 percent of a grant determined under

18 subsection (m)(1) for a fiscal year to provide

19 assistance under this section in subsequent fis20 cal years, except that the reserved funds may

21 not exceed 30 percent of the total grant re22 ceived under this section for a fiscal year.

23 ‘‘(4) FOOD ASSISTANCE AND ADMINISTRATIVE

24 EXPENDITURES.—In each fiscal year, not more than

25 6 percent of the Federal and State funds required
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1 to be expended by a State under this section shall

2 be used for administrative expenses.

3 ‘‘(5) PROVISION OF FOOD ASSISTANCE.—A

4 State may provide food assistance under this section

5 in any manner determined appropriate by the State,

6 such as electronic benefit transfer limited to food

7 purchases, coupons limited to food purchases, or di8 rect provision of commodities.

9 ‘‘(k) QUALITY CONTROL.—Each State participating

10 in the program established under this section shall main11 tain a system in accordance with, and shall be subject to,

12 section 16(c), including sanctions and eligibility for incen13 tive payment under section 16(c), adjusted for State spe14 cific characteristics under regulations issued by the Sec15 retary.

16 ‘‘(l) NONDISCRIMINATION.—

17 ‘‘(1) IN GENERAL.—No person with responsibil18 ity for the operation of a program, project, or activ19 ity under this section may discriminate with respect

20 to the program, project, or activity because of race,

21 religion, color, national origin, sex, disability, or age.

22 ‘‘(2) ENFORCEMENT.—The powers, remedies,

23 and procedures set forth in title VI of the Civil

24 Rights Act of 1964 (42 U.S.C. 2000d et seq.) may

25 be used by the Secretary to enforce paragraph (1).
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1 ‘‘(m) GRANT CALCULATION.—

2 ‘‘(1) STATE GRANT.—

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

4 this paragraph, from the amounts made avail5 able under section 18 for each fiscal year, the

6 Secretary shall provide a grant to each State

7 participating in the program established under

8 this section an amount that is equal to the sum

9 of—

10 ‘‘(i) the greater of, as determined by

11 the Secretary—

12 ‘‘(I) the total dollar value of all

13 benefits issued under the food stamp

14 program established under this Act by

15 the State during fiscal year 1994; or

16 ‘‘(II) the average per fiscal year

17 of the total dollar value of all benefits

18 issued under the food stamp program

19 by the State during each of fiscal

20 years 1992 through 1994; and

21 ‘‘(ii) the greater of, as determined by

22 the Secretary—

23 ‘‘(I) the total amount received by

24 the State for administrative costs

25 under section 16(a) (not including any
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1 adjustment under section 16(c)) for

2 fiscal year 1994; or

3 ‘‘(II) the average per fiscal year

4 of the total amount received by the

5 State for administrative costs under

6 section 16(a) (not including any ad7 justment under section 16(c)) for each

8 of fiscal years 1992 through 1994.

9 ‘‘(B) LIMITATION FOR FISCAL YEAR

10 1997.—No grant to a State that elects to receive

11 funding under this section for fiscal year 1997

12 shall exceed—

13 ‘‘(i) the sum of—

14 ‘‘(I) the amount of all benefits is15 sued under the food stamp program

16 by the State during fiscal year 1996;

17 and

18 ‘‘(II) the amount received by the

19 State for administrative costs under

20 section 16(a) (not including any ad21 justment under section 16(c)) for fis22 cal year 1996; multiplied by

23 ‘‘(ii) the ratio (as projected by the Di24 rector of the Congressional Budget Office

25 in the most recent estimate made prior to
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•S 1956 PCS

1 the date of enactment of this section of the

2 effects of the Agricultural Reconciliation

3 Act of 1996) of—

4 ‘‘(I) the cost to the Secretary of

5 all benefits and administrative reim6 bursements under the food stamp pro7 gram, as amended by the Agricultural

8 Reconciliation Act of 1996, for fiscal

9 year 1997; to

10 ‘‘(II) such costs and reimburse11 ments for fiscal year 1996.

12 ‘‘(C) LIMITATION AFTER FISCAL YEAR

13 1997.—No grant to a State that elects to receive

14 funding under this section for fiscal year 1998

15 or a subsequent fiscal year shall exceed the cost

16 to the Secretary of all benefits and administra17 tive reimbursements for the State under the

18 food stamp program for fiscal year 1997.

19 ‘‘(D) INSUFFICIENT FUNDS.—If the Sec20 retary finds that the total amount of grants to

21 which States would otherwise be entitled for a

22 fiscal year under this paragraph will exceed the

23 amount of funds that will be made available to

24 provide the grants for the fiscal year, the Sec25 retary shall reduce the grants made to States
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1 under this subsection, on a pro rata basis, to

2 the extent necessary.

3 ‘‘(2) REDUCTION.—The Secretary shall reduce

4 the grant of a State by the amount a State has

5 agreed to contribute under subsection (c)(1)(C).’’.

6 (b) EMPLOYMENT AND TRAINING FUNDING.—Sec7 tion 16(h) of the Food Stamp Act of 1977 (7 U.S.C.

8 2025(a)), as amended by section 1127(d)(2), is amended

9 by adding at the end the following:

10 ‘‘(6) BLOCK GRANT STATES.—Each State elect11 ing to operate a program under section 27 shall—

12 ‘‘(A) in lieu of payments under paragraph

13 (1), receive the greater of—

14 ‘‘(i) the total dollar value of the funds

15 received under paragraph (1) by the State

16 for fiscal year 1994; or

17 ‘‘(ii) the average per fiscal year of the

18 total dollar value of all funds received

19 under paragraph (1) by the State for each

20 of fiscal years 1992 through 1994; and

21 ‘‘(B) be eligible to receive funds under

22 paragraph (2), within the limitations estab23 lished in section 6(d)(4)(K).’’.

24 (c) RESEARCH ON OPTIONAL STATE FOOD ASSIST25 ANCE BLOCK GRANT.—Section 17 of the Food Stamp Act
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•S 1956 PCS

1 of 1977 (7 U.S.C. 2026), as amended by section

2 1163(c)(2), is amended by adding at the end the following:

3 ‘‘(l) RESEARCH ON OPTIONAL STATE FOOD ASSIST4 ANCE BLOCK GRANT.—The Secretary may conduct re5 search on the effects and costs of a State program carried

6 out under section 27.’’.

7 CHAPTER 2—COMMODITY DISTRIBUTION

8 PROGRAMS

9 SEC. 1171. EMERGENCY FOOD ASSISTANCE PROGRAM.

10 (a) DEFINITIONS.—Section 201A of the Emergency

11 Food Assistance Act of 1983 (Public Law 98–8; 7 U.S.C.

12 612c note) is amended to read as follows:

13 ‘‘SEC. 201A. DEFINITIONS.

14 ‘‘In this Act:

15 ‘‘(1) ADDITIONAL COMMODITIES.—The term

16 ‘additional commodities’ means commodities made

17 available under section 214 in addition to the com18 modities made available under sections 202 and

19 203D.

20 ‘‘(2) AVERAGE MONTHLY NUMBER OF UNEM21 PLOYED PERSONS.—The term ‘average monthly

22 number of unemployed persons’ means the average

23 monthly number of unemployed persons in each

24 State during the most recent fiscal year for which

25 information concerning the number of unemployed
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1 persons is available, as determined by the Bureau of

2 Labor Statistics of the Department of Labor.

3 ‘‘(3) ELIGIBLE RECIPIENT AGENCY.—The term

4 ‘eligible recipient agency’ means a public or non5 profit organization that—

6 ‘‘(A) administers—

7 ‘‘(i) an emergency feeding organiza8 tion;

9 ‘‘(ii) a charitable institution (including

10 a hospital and a retirement home, but ex11 cluding a penal institution) to the extent

12 that the institution serves needy persons;

13 ‘‘(iii) a summer camp for children, or

14 a child nutrition program providing food

15 service;

16 ‘‘(iv) a nutrition project operating

17 under the Older Americans Act of 1965

18 (42 U.S.C. 3001 et seq.), including a

19 project that operates a congregate nutri20 tion site and a project that provides home21 delivered meals; or

22 ‘‘(v) a disaster relief program;

23 ‘‘(B) has been designated by the appro24 priate State agency, or by the Secretary; and
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•S 1956 PCS

1 ‘‘(C) has been approved by the Secretary

2 for participation in the program established

3 under this Act.

4 ‘‘(4) EMERGENCY FEEDING ORGANIZATION.—

5 The term ‘emergency feeding organization’ means a

6 public or nonprofit organization that administers ac7 tivities and projects (including the activities and

8 projects of a charitable institution, a food bank, a

9 food pantry, a hunger relief center, a soup kitchen,

10 or a similar public or private nonprofit eligible recip11 ient agency) providing nutrition assistance to relieve

12 situations of emergency and distress through the

13 provision of food to needy persons, including low-in14 come and unemployed persons.

15 ‘‘(5) FOOD BANK.—The term ‘food bank’

16 means a public or charitable institution that main17 tains an established operation involving the provision

18 of food or edible commodities, or the products of

19 food or edible commodities, to food pantries, soup

20 kitchens, hunger relief centers, or other food or feed21 ing centers that, as an integral part of their normal

22 activities, provide meals or food to feed needy per23 sons on a regular basis.

24 ‘‘(6) FOOD PANTRY.—The term ‘food pantry’

25 means a public or private nonprofit organization
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•S 1956 PCS

1 that distributes food to low-income and unemployed

2 households, including food from sources other than

3 the Department of Agriculture, to relieve situations

4 of emergency and distress.

5 ‘‘(7) POVERTY LINE.—The term ‘poverty line’

6 has the meaning provided in section 673(2) of the

7 Community Services Block Grant Act (42 U.S.C.

8 9902(2)).

9 ‘‘(8) SOUP KITCHEN.—The term ‘soup kitchen’

10 means a public or charitable institution that, as an

11 integral part of the normal activities of the institu12 tion, maintains an established feeding operation to

13 provide food to needy homeless persons on a regular

14 basis.

15 ‘‘(9) TOTAL VALUE OF ADDITIONAL COMMOD16 ITIES.—The term ‘total value of additional commod17 ities’ means the actual cost of all additional com18 modities that are paid by the Secretary (including

19 the distribution and processing costs incurred by the

20 Secretary).

21 ‘‘(10) VALUE OF ADDITIONAL COMMODITIES

22 ALLOCATED TO EACH STATE.—The term ‘value of

23 additional commodities allocated to each State’

24 means the actual cost of additional commodities allo25 cated to each State that are paid by the Secretary
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1 (including the distribution and processing costs in2 curred by the Secretary).’’.

3 (b) STATE PLAN.—Section 202A of the Emergency

4 Food Assistance Act of 1983 (Public Law 98–8; 7 U.S.C.

5 612c note) is amended to read as follows:

6 ‘‘SEC. 202A. STATE PLAN.

7 ‘‘(a) IN GENERAL.—To receive commodities under

8 this Act, a State shall submit a plan of operation and ad9 ministration every 4 years to the Secretary for approval.

10 The plan may be amended at any time, with the approval

11 of the Secretary.

12 ‘‘(b) REQUIREMENTS.—Each plan shall—

13 ‘‘(1) designate the State agency responsible for

14 distributing the commodities received under this Act;

15 ‘‘(2) set forth a plan of operation and adminis16 tration to expeditiously distribute commodities under

17 this Act;

18 ‘‘(3) set forth the standards of eligibility for re19 cipient agencies; and

20 ‘‘(4) set forth the standards of eligibility for in21 dividual or household recipients of commodities,

22 which shall require—

23 ‘‘(A) individuals or households to be com24 prised of needy persons; and
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•S 1956 PCS

1 ‘‘(B) individual or household members to

2 be residing in the geographic location served by

3 the distributing agency at the time of applying

4 for assistance.

5 ‘‘(c) STATE ADVISORY BOARD.—The Secretary shall

6 encourage each State receiving commodities under this Act

7 to establish a State advisory board consisting of represent8 atives of all entities in the State, both public and private,

9 interested in the distribution of commodities received

10 under this Act.’’.

11 (c) AUTHORIZATION OF APPROPRIATIONS FOR AD12 MINISTRATIVE FUNDS.—Section 204(a)(1) of the Emer13 gency Food Assistance Act of 1983 (Public Law 98–8; 7

14 U.S.C. 612c note) is amended—

15 (1) in the first sentence, by striking ‘‘for State

16 and local’’ and all that follows through ‘‘under this

17 title’’ and inserting ‘‘to pay for the direct and indi18 rect administrative costs of the States related to the

19 processing, transporting, and distributing to eligible

20 recipient agencies of commodities provided by the

21 Secretary under this Act and commodities secured

22 from other sources’’; and

23 (2) by striking the fourth sentence.
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1 (d) DELIVERY OF COMMODITIES.—Section 214 of the

2 Emergency Food Assistance Act of 1983 (Public Law 98–

3 8; 7 U.S.C. 612c note) is amended—

4 (1) by striking subsections (a) through (e) and

5 (j);

6 (2) by redesignating subsections (f) through (i)

7 as subsections (a) through (d), respectively;

8 (3) in subsection (b), as redesignated by para9 graph (2)—

10 (A) in the first sentence, by striking ‘‘sub11 section (f) or subsection (j) if applicable,’’ and

12 inserting ‘‘subsection (a),’’; and

13 (B) in the second sentence, by striking

14 ‘‘subsection (f)’’ and inserting ‘‘subsection (a)’’;

15 (4) by striking subsection (c), as redesignated

16 by paragraph (2), and inserting the following:

17 ‘‘(c) ADMINISTRATION.—

18 ‘‘(1) IN GENERAL.—Commodities made avail19 able for each fiscal year under this section shall be

20 delivered at reasonable intervals to States based on

21 the grants calculated under subsection (a), or reallo22 cated under subsection (b), before December 31 of

23 the following fiscal year.
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1 ‘‘(2) ENTITLEMENT.—Each State shall be enti2 tled to receive the value of additional commodities

3 determined under subsection (a).’’; and

4 (5) in subsection (d), as redesignated by para5 graph (2), by striking ‘‘or reduce’’ and all that fol6 lows through ‘‘each fiscal year’’.

7 (e) TECHNICAL AMENDMENTS.—The Emergency

8 Food Assistance Act of 1983 (Public Law 98–8; 7 U.S.C.

9 612c note) is amended—

10 (1) in the first sentence of section 203B(a), by

11 striking ‘‘203 and 203A of this Act’’ and inserting

12 ‘‘203A’’;

13 (2) in section 204(a), by striking ‘‘title’’ each

14 place it appears and inserting ‘‘Act’’;

15 (3) in the first sentence of section 210(e), by

16 striking ‘‘(except as otherwise provided for in section

17 214(j))’’; and

18 (4) by striking section 212.

19 (f) REPORT ON EFAP.—Section 1571 of the Food

20 Security Act of 1985 (Public Law 99–198; 7 U.S.C. 612c

21 note) is repealed.

22 (g) AVAILABILITY OF COMMODITIES UNDER THE

23 FOOD STAMP PROGRAM.—The Food Stamp Act of 1977

24 (7 U.S.C. 2011 et seq.), as amended by section 1164(a),

25 is amended by adding at the end the following:
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1 ‘‘SEC. 28. AVAILABILITY OF COMMODITIES FOR THE EMER2 GENCY FOOD ASSISTANCE PROGRAM.

3 ‘‘(a) PURCHASE OF COMMODITIES.—From amounts

4 appropriated under this Act, for each of fiscal years 1997

5 through 2002, the Secretary shall purchase $100,000,000

6 of a variety of nutritious and useful commodities of the

7 types that the Secretary has the authority to acquire

8 through the Commodity Credit Corporation or under sec9 tion 32 of the Act entitled ‘An Act to amend the Agricul10 tural Adjustment Act, and for other purposes’, approved

11 August 24, 1935 (7 U.S.C. 612c), and distribute the com12 modities to States for distribution in accordance with sec13 tion 214 of the Emergency Food Assistance Act of 1983

14 (Public Law 98–8; 7 U.S.C. 612c note).

15 ‘‘(b) BASIS FOR COMMODITY PURCHASES.—In pur16 chasing commodities under subsection (a), the Secretary

17 shall, to the extent practicable and appropriate, make pur18 chases based on—

19 ‘‘(1) agricultural market conditions;

20 ‘‘(2) preferences and needs of States and dis21 tributing agencies; and

22 ‘‘(3) preferences of recipients.’’.

23 (h) EFFECTIVE DATE.—The amendments made by

24 subsection (d) shall become effective on October 1, 1996.
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1 SEC. 1172. FOOD BANK DEMONSTRATION PROJECT.

2 Section 3 of the Charitable Assistance and Food

3 Bank Act of 1987 (Public Law 100–232; 7 U.S.C. 612c

4 note) is repealed.

5 SEC. 1173. HUNGER PREVENTION PROGRAMS.

6 The Hunger Prevention Act of 1988 (Public Law

7 100–435; 7 U.S.C. 612c note) is amended—

8 (1) by striking section 110;

9 (2) by striking subtitle C of title II; and

10 (3) by striking section 502.

11 SEC. 1174. REPORT ON ENTITLEMENT COMMODITY PROC12 ESSING.

13 Section 1773 of the Food, Agriculture, Conservation,

14 and Trade Act of 1990 (Public Law 101–624; 7 U.S.C.

15 612c note) is amended by striking subsection (f).

16 Subtitle B—Child Nutrition

17 Programs

18 CHAPTER 1—AMENDMENTS TO THE

19 NATIONAL SCHOOL LUNCH ACT

20 SEC. 1201. STATE DISBURSEMENT TO SCHOOLS.

21 (a) IN GENERAL.—Section 8 of the National School

22 Lunch Act (42 U.S.C. 1757) is amended—

23 (1) in the third sentence, by striking ‘‘Nothing’’

24 and all that follows through ‘‘educational agency to’’

25 and inserting ‘‘The State educational agency may’’;

26 (2) by striking the fourth and fifth sentences;
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•S 1956 PCS

1 (3) by redesignating the first through seventh

2 sentences, as amended by paragraph (2), as sub3 sections (a) through (g), respectively;

4 (4) in subsection (b), as redesignated by para5 graph (3), by striking ‘‘the preceding sentence’’ and

6 inserting ‘‘subsection (a)’’; and

7 (5) in subsection (d), as redesignated by para8 graph (3), by striking ‘‘Such food costs’’ and insert9 ing ‘‘Use of funds paid to States’’.

10 (b) DEFINITION OF CHILD.—Section 12(d) of the

11 National School Lunch Act (42 U.S.C. 1760(d)) is amend12 ed by adding at the end the following:

13 ‘‘(9) CHILD.—

14 ‘‘(A) IN GENERAL.—The term ‘child’ in15 cludes an individual, regardless of age, who—

16 ‘‘(i) is determined by a State edu17 cational agency, in accordance with regula18 tions prescribed by the Secretary, to have

19 1 or more mental or physical disabilities;

20 and

21 ‘‘(ii) is attending any institution, as

22 defined in section 17(a), or any nonresi23 dential public or nonprofit private school of

24 high school grade or under, for the purpose

25 of participating in a school program estab-
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1 lished for individuals with mental or phys2 ical disabilities.

3 ‘‘(B) RELATIONSHIP TO CHILD AND ADULT

4 CARE FOOD PROGRAM.—No institution that is

5 not otherwise eligible to participate in the pro6 gram under section 17 shall be considered eligi7 ble because of this paragraph.’’.

8 SEC. 1202. NUTRITIONAL AND OTHER PROGRAM REQUIRE9 MENTS.

10 (a) NUTRITIONAL STANDARDS.—Section 9(a) of the

11 National School Lunch Act (42 U.S.C. 1758(a)) is amend12 ed—

13 (1) in paragraph (2)—

14 (A) by striking ‘‘(2)(A) Lunches’’ and in15 serting ‘‘(2) Lunches’’;

16 (B) by striking subparagraph (B); and

17 (C) by redesignating clauses (i) and (ii) as

18 subparagraphs (A) and (B), respectively;

19 (2) by striking paragraph (3); and

20 (3) by redesignating paragraph (4) as para21 graph (3).

22 (b) ELIGIBILITY GUIDELINES.—Section 9(b) of the

23 National School Lunch Act (42 U.S.C. 1758(b)) is amend24 ed—

25 (1) in paragraph (2)—
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1 (A) by striking subparagraph (A); and

2 (B) by redesignating subparagraphs (B)

3 and (C) as subparagraphs (A) and (B), respec4 tively;

5 (2) in paragraph (5), by striking the third sen6 tence; and

7 (3) in paragraph (6)(B), by striking ‘‘para8 graph (2)(C)’’ and inserting ‘‘paragraph (2)(B)’’.

9 (c) UTILIZATION OF AGRICULTURAL COMMOD10 ITIES.—Section 9(c) of the National School Lunch Act (42

11 U.S.C. 1758(c)) is amended—

12 (1) in the fifth sentence, by striking ‘‘of the

13 provisions of law referred to in the preceding sen14 tence’’ and inserting ‘‘provision of law’’; and

15 (2) by striking the second, fourth, and sixth

16 sentences.

17 (d) CONFORMING AMENDMENT.—The last sentence

18 of section 9(d)(1) of the National School Lunch Act (42

19 U.S.C. 1758(d)(1)) is amended by striking ‘‘subsection

20 (b)(2)(C)’’ and inserting ‘‘subsection (b)(2)(B)’’.

21 (e) NUTRITIONAL INFORMATION.—Section 9(f) of the

22 National School Lunch Act (42 U.S.C. 1758(f)) is amend23 ed—

24 (1) by striking paragraph (1);

25 (2) by striking ‘‘(2)’’;
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1 (3) by redesignating subparagraphs (A) through

2 (D) as paragraphs (1) through (4), respectively;

3 (4) by striking paragraph (1), as redesignated

4 by paragraph (3), and inserting the following:

5 ‘‘(1) NUTRITIONAL REQUIREMENTS.—Except as

6 provided in paragraph (2), not later than the first

7 day of the 1996–1997 school year, each school that

8 is participating in the school lunch or school break9 fast program shall serve lunches and breakfasts

10 under the program that—

11 ‘‘(A) are consistent with the goals of the

12 most recent Dietary Guidelines for Americans

13 published under section 301 of the National

14 Nutrition Monitoring and Related Research Act

15 of 1990 (7 U.S.C. 5341); and

16 ‘‘(B) provide, on the average over each

17 week, at least—

‘‘(i) with respect to school lunches, 1 18 ⁄3

19 of the daily recommended dietary allow20 ance established by the Food and Nutrition

21 Board of the National Research Council of

22 the National Academy of Sciences; and

23 ‘‘(ii) with respect to school breakfasts,

1 24 ⁄4 of the daily recommended dietary allow25 ance established by the Food and Nutrition
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1 Board of the National Research Council of

2 the National Academy of Sciences.’’;

3 (5) in paragraph (3), as redesignated by para4 graph (3)—

5 (A) by redesignating clauses (i) and (ii) as

6 subparagraphs (A) and (B), respectively; and

7 (B) in subparagraph (A), as so redesig8 nated, by redesignating subclauses (I) and (II)

9 as clauses (i) and (ii), respectively; and

10 (6) in paragraph (4), as redesignated by para11 graph (3)—

12 (A) by redesignating clauses (i) and (ii) as

13 subparagraphs (A) and (B), respectively; and

14 (B) in subparagraph (A), as so redesig15 nated—

16 (i) by redesignating subclauses (I) and

17 (II) as clauses (i) and (ii), respectively;

18 and

19 (ii) in clause (ii), as so redesignated,

20 by striking ‘‘subparagraph (C)’’ and insert21 ing ‘‘paragraph (3)’’.

22 (f) USE OF RESOURCES.—Section 9 of the National

23 School Lunch Act (42 U.S.C. 1758) is amended by strik24 ing subsection (h).
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1 SEC. 1203. FREE AND REDUCED PRICE POLICY STATEMENT.

2 Section 9(b)(2) of the National School Lunch Act (42

3 U.S.C. 1758(b)(2)), as amended by section 1202(b)(1), is

4 amended by adding at the end the following:

5 ‘‘(C) FREE AND REDUCED PRICE POLICY

6 STATEMENT.—After the initial submission, a

7 school food authority shall not be required to

8 submit a free and reduced price policy state9 ment to a State educational agency under this

10 Act unless there is a substantive change in the

11 free and reduced price policy of the school food

12 authority. A routine change in the policy of a

13 school food authority, such as an annual adjust14 ment of the income eligibility guidelines for free

15 and reduced price meals, shall not be sufficient

16 cause for requiring the school food authority to

17 submit a policy statement.’’.

18 SEC. 1204. SPECIAL ASSISTANCE.

19 (a) EXTENSION OF PAYMENT PERIOD.—Section

20 11(a)(1)(D)(i) of the National School Lunch Act (42

21 U.S.C. 1759a(a)(1)(D)(i)) is amended by striking ‘‘, on

22 the date of enactment of this subparagraph,’’.

23 (b) APPLICABILITY OF OTHER PROVISIONS.—Section

24 11 of the National School Lunch Act (42 U.S.C. 1759a)

25 is amended—

26 (1) by striking subsection (d);
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•S 1956 PCS

1 (2) in subsection (e)(2)—

2 (A) by striking ‘‘The’’ and inserting ‘‘On

3 request of the Secretary, the’’; and

4 (B) by striking ‘‘each month’’; and

5 (3) by redesignating subsections (e) and (f) as

6 subsections (d) and (e), respectively.

7 SEC. 1205. MISCELLANEOUS PROVISIONS AND DEFINI8 TIONS.

9 (a) ACCOUNTS AND RECORDS.—The second sentence

10 of section 12(a) of the National School Lunch Act (42

11 U.S.C. 1760(a)) is amended by striking ‘‘at all times be

12 available’’ and inserting ‘‘be available at any reasonable

13 time’’.

14 (b) RESTRICTION ON REQUIREMENTS.—Section

15 12(c) of the National School Lunch Act (42 U.S.C.

16 1760(c)) is amended by striking ‘‘neither the Secretary

17 nor the State shall’’ and inserting ‘‘the Secretary shall

18 not’’.

19 (c) DEFINITIONS.—Section 12(d) of the National

20 School Lunch Act (42 U.S.C. 1760(d)), as amended by

21 section 1201(b), is amended—

22 (1) in paragraph (1), by striking ‘‘the Trust

23 Territory of the Pacific Islands’’ and inserting ‘‘the

24 Commonwealth of the Northern Mariana Islands’’;

25 (2) by striking paragraphs (3) and (4); and
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•S 1956 PCS

1 (3) by redesignating paragraphs (1), (2), and

2 (5) through (9) as paragraphs (6), (7), (3), (4), (2),

3 (5), and (1), respectively, and rearranging the para4 graphs so as to appear in numerical order.

5 (d) ADJUSTMENTS TO NATIONAL AVERAGE PAY6 MENT RATES.—Section 12(f) of the National School

7 Lunch Act (42 U.S.C. 1760(f)) is amended by striking

8 ‘‘the Trust Territory of the Pacific Islands,’’.

9 (e) EXPEDITED RULEMAKING.—Section 12(k) of the

10 National School Lunch Act (42 U.S.C. 1760(k)) is amend11 ed—

12 (1) by striking paragraphs (1), (2), and (5);

13 and

14 (2) by redesignating paragraphs (3) and (4) as

15 paragraphs (1) and (2), respectively.

16 (f) WAIVER.—Section 12(l) of the National School

17 Lunch Act (42 U.S.C. 1760(l)) is amended—

18 (1) in paragraph (2)(A)—

19 (A) in clause (iii), by adding ‘‘and’’ at the

20 end;

21 (B) in clause (iv), by striking the semi22 colon at the end and inserting a period; and

23 (C) by striking clauses (v) through (vii);

24 (2) in paragraph (3)—
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•S 1956 PCS

1 (A) in subparagraph (A), by striking

2 ‘‘(A)’’; and

3 (B) by striking subparagraphs (B) through

4 (D);

5 (3) in paragraph (4)—

6 (A) in the matter preceding subparagraph

7 (A), by striking ‘‘of any requirement relating’’

8 and inserting ‘‘that increases Federal costs or

9 that relates’’;

10 (B) by striking subparagraph (D);

11 (C) by redesignating subparagraphs (E)

12 through (N) as subparagraphs (D) through

13 (M), respectively; and

14 (D) in subparagraph (L), as redesignated

15 by subparagraph (C), by striking ‘‘and’’ at the

16 end and inserting ‘‘or’’; and

17 (4) in paragraph (6)—

18 (A) by striking ‘‘(A)(i)’’ and all that fol19 lows through ‘‘(B)’’; and

20 (B) by redesignating clauses (i) through

21 (iv) as subparagraphs (A) through (D), respec22 tively.

23 (g) FOOD AND NUTRITION PROJECTS.—Section 12

24 of the National School Lunch Act (42 U.S.C. 1760) is

25 amended by striking subsection (m).
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1 (h) SIMPLIFIED ADMINISTRATION OF SCHOOL MEAL

2 AND OTHER NUTRITION PROGRAMS.—Section 12 of the

3 National School Lunch Act (42 U.S.C. 1760), as amended

4 by subsection (g), is amended by adding at the end the

5 following:

6 ‘‘(m) SIMPLIFIED ADMINISTRATION OF SCHOOL

7 MEAL AND OTHER NUTRITION PROGRAMS.—Notwith8 standing any other provision of law, no assistance or bene9 fits provided under the programs established under the

10 following provisions of law shall be contingent on the citi11 zenship or immigration status of any applicant or recipi12 ent:

13 ‘‘(1) This Act.

14 ‘‘(2) The Child Nutrition Act of 1966 (42

15 U.S.C. 1771 et seq.);

16 ‘‘(3) Section 4 of the Agriculture and Consumer

17 Protection Act of 1973 (Public Law 93–86; 7 U.S.C.

18 612c note).

19 ‘‘(4) The Emergency Food Assistance Act of

20 1983 (Public Law 98–8; 7 U.S.C. 612c note).

21 ‘‘(5) The food distribution program on Indian

22 reservations established under section 4(b) of Public

23 Law 88–525 (7 U.S.C. 2013(b)).’’.
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1 SEC. 1206. SUMMER FOOD SERVICE PROGRAM FOR CHIL2 DREN.

3 (a) ESTABLISHMENT OF PROGRAM.—Section 13(a)

4 of the National School Lunch Act (42 U.S.C. 1761(a))

5 is amended—

6 (1) in paragraph (1)—

7 (A) in the first sentence, by striking ‘‘initi8 ate, maintain, and expand’’ and inserting ‘‘initi9 ate and maintain’’; and

10 (B) in subparagraph (E) of the second

11 sentence, by striking ‘‘the Trust Territory of

12 the Pacific Islands,’’; and

13 (2) in paragraph (7)(A), by striking ‘‘Except as

14 provided in subparagraph (C), private’’ and inserting

15 ‘‘Private’’.

16 (b) SERVICE INSTITUTIONS.—Section 13(b) of the

17 National School Lunch Act (42 U.S.C. 1761(b)) is amend18 ed by striking ‘‘(b)(1)’’ and all that follows through the

19 end of paragraph (1) and inserting the following:

20 ‘‘(b) SERVICE INSTITUTIONS.—

21 ‘‘(1) PAYMENTS.—

22 ‘‘(A) IN GENERAL.—Except as otherwise

23 provided in this paragraph, payments to service

24 institutions shall equal the full cost of food

25 service operations (which cost shall include the
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•S 1956 PCS

1 costs of obtaining, preparing, and serving food,

2 but shall not include administrative costs).

3 ‘‘(B) MAXIMUM AMOUNTS.—Subject to

4 subparagraph (C), payments to any institution

5 under subparagraph (A) shall not exceed—

6 ‘‘(i) $1.93 for each lunch and supper

7 served;

8 ‘‘(ii) $1.13 for each breakfast served;

9 and

10 ‘‘(iii) 46 cents for each meal supple11 ment served.

12 ‘‘(C) ADJUSTMENTS.—Amounts specified

13 in subparagraph (B) shall be adjusted on Janu14 ary 1, 1997, and each January 1 thereafter, to

15 the nearest lower cent increment to reflect

16 changes for the 12-month period ending the

17 preceding November 30 in the series for food

18 away from home of the Consumer Price Index

19 for All Urban Consumers published by the Bu20 reau of Labor Statistics of the Department of

21 Labor. Each adjustment shall be based on the

22 unrounded adjustment for the prior 12-month

23 period.’’.
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•S 1956 PCS

1 (c) ADMINISTRATION OF SERVICE INSTITUTIONS.—

2 Section 13(b)(2) of the National School Lunch Act (42

3 U.S.C. 1761(b)(2)) is amended—

4 (1) in the first sentence, by striking ‘‘four

5 meals’’ and inserting ‘‘3 meals, or 2 meals and 1

6 supplement,’’; and

7 (2) by striking the second sentence.

8 (d) REIMBURSEMENTS.—Section 13(c)(2) of the Na9 tional School Lunch Act (42 U.S.C. 1761(c)(2)) is amend10 ed—

11 (1) by striking subparagraphs (A), (C), (D),

12 and (E);

13 (2) by striking ‘‘(B)’’;

14 (3) by striking ‘‘, and such higher education in15 stitutions,’’; and

16 (4) by striking ‘‘without application’’ and in17 serting ‘‘upon showing residence in areas in which

18 poor economic conditions exist or on the basis of in19 come eligibility statements for children enrolled in

20 the program’’.

21 (e) ADVANCE PROGRAM PAYMENTS.—Section

22 13(e)(1) of the National School Lunch Act (42 U.S.C.

23 1761(e)(1)) is amended—

24 (1) by striking ‘‘institution: Provided, That (A)

25 the’’ and inserting ‘‘institution. The’’;
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•S 1956 PCS

1 (2) by inserting ‘‘(excluding a school)’’ after

2 ‘‘any service institution’’; and

3 (3) by striking ‘‘responsibilities, and (B) no’’

4 and inserting ‘‘responsibilities. No’’.

5 (f) FOOD REQUIREMENTS.—Section 13(f) of the Na6 tional School Lunch Act (42 U.S.C. 1761(f)) is amend7 ed—

8 (1) by redesignating the first through seventh

9 sentences as paragraphs (1) through (7), respec10 tively;

11 (2) by striking paragraph (3), as redesignated

12 by paragraph (1);

13 (3) in paragraph (4), as redesignated by para14 graph (1), by striking ‘‘the first sentence’’ and in15 serting ‘‘paragraph (1)’’;

16 (4) in subparagraph (B) of paragraph (6), as

17 redesignated by paragraph (1), by striking ‘‘that

18 bacteria levels’’ and all that follows through the pe19 riod at the end and inserting ‘‘conformance with

20 standards set by local health authorities.’’; and

21 (5) by redesignating paragraphs (4) through

22 (7), as redesignated by paragraph (1), as para23 graphs (3) through (6), respectively.

24 (g) PERMITTING OFFER VERSUS SERVE.—Section

25 13(f) of the National School Lunch Act (42 U.S.C.
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•S 1956 PCS

1 1761(f)), as amended by subsection (f), is amended by

2 adding at the end the following:

3 ‘‘(7) OFFER VERSUS SERVE.—A school food au4 thority participating as a service institution may

5 permit a child attending a site on school premises

6 operated directly by the authority to refuse 1 or

7 more items of a meal that the child does not intend

8 to consume, under rules that the school uses for

9 school meals programs. A refusal of an offered food

10 item shall not affect the amount of payments made

11 under this section to a school for the meal.’’.

12 (h) FOOD SERVICE MANAGEMENT COMPANIES.—

13 Section 13(l) of the National School Lunch Act (42 U.S.C.

14 1761(l)) is amended—

15 (1) by striking paragraph (4);

16 (2) in paragraph (5), by striking the first sen17 tence; and

18 (3) by redesignating paragraph (5) as para19 graph (4).

20 (i) RECORDS.—The second sentence of section 13(m)

21 of the National School Lunch Act (42 U.S.C. 1761(m))

22 is amended by striking ‘‘at all times be available’’ and in23 serting ‘‘be available at any reasonable time’’.

24 (j) REMOVING MANDATORY NOTICE TO INSTITU25 TIONS.—Section 13(n)(2) of the National School Lunch
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•S 1956 PCS

1 Act (42 U.S.C. 1761(n)(2)) is amended by striking ‘‘, and

2 its plans and schedule for informing service institutions

3 of the availability of the program’’.

4 (k) PLAN.—Section 13(n) of the National School

5 Lunch Act (42 U.S.C. 1761(n)) is amended—

6 (1) in paragraph (2), by striking ‘‘including the

7 State’s methods of assessing need,’’;

8 (2) by striking paragraph (3);

9 (3) in paragraph (4), by striking ‘‘and sched10 ule’’; and

11 (4) by redesignating paragraphs (4) through

12 (7) as paragraphs (3) through (6), respectively.

13 (l) MONITORING AND TRAINING.—Section 13(q) of

14 the National School Lunch Act (42 U.S.C. 1761(q)) is

15 amended—

16 (1) by striking paragraphs (2) and (4);

17 (2) in paragraph (3), by striking ‘‘paragraphs

18 (1) and (2) of this subsection’’ and inserting ‘‘para19 graph (1)’’; and

20 (3) by redesignating paragraph (3) as para21 graph (2).

22 (m) EXPIRED PROGRAM.—Section 13 of the National

23 School Lunch Act (42 U.S.C. 1761) is amended—

24 (1) by striking subsection (p); and
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•S 1956 PCS

1 (2) by redesignating subsections (q) and (r) as

2 subsections (p) and (q), respectively.

3 (n) EFFECTIVE DATE.—The amendments made by

4 subsection (b) shall become effective on January 1, 1997.

5 SEC. 1207. COMMODITY DISTRIBUTION.

6 (a) CEREAL AND SHORTENING IN COMMODITY DO7 NATIONS.—Section 14(b) of the National School Lunch

8 Act (42 U.S.C. 1762a(b)) is amended—

9 (1) by striking paragraph (1); and

10 (2) by redesignating paragraphs (2) and (3) as

11 paragraphs (1) and (2), respectively.

12 (b) IMPACT STUDY AND PURCHASING PROCE13 DURES.—Section 14(d) of the National School Lunch Act

14 (42 U.S.C. 1762a(d)) is amended by striking the second

15 and third sentences.

16 (c) ADVISORY COUNCIL.—Section 14(e) of the Na17 tional School Lunch Act (42 U.S.C. 1762a(e)) is amended

18 by striking ‘‘educational’’.

19 (d) CASH COMPENSATION FOR PILOT PROJECT

20 SCHOOLS.—Section 14(g) of the National School Lunch

21 Act (42 U.S.C. 1762a(g)) is amended by striking para22 graph (3).

23 SEC. 1208. CHILD AND ADULT CARE FOOD PROGRAM.

24 (a) ESTABLISHMENT OF PROGRAM.—Section 17 of

25 the National School Lunch Act (42 U.S.C. 1766) is
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•S 1956 PCS

1 amended in the first sentence of subsection (a), by striking

2 ‘‘initiate, maintain, and expand’’ and inserting ‘‘initiate

3 and maintain’’.

4 (b) PAYMENTS TO SPONSOR EMPLOYEES.—Para5 graph (2) of the last sentence of section 17(a) of the Na6 tional School Lunch Act (42 U.S.C. 1766(a)) is amend7 ed—

8 (1) in subparagraph (B), by striking ‘‘and’’ at

9 the end;

10 (2) in subparagraph (C), by striking the period

11 at the end and inserting ‘‘; and’’; and

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

13 ‘‘(D) in the case of a family or group day

14 care home sponsoring organization that employs

15 more than 1 employee, the organization does

16 not base payments to an employee of the orga17 nization on the number of family or group day

18 care homes recruited.’’.

19 (c) TECHNICAL ASSISTANCE.—The last sentence of

20 section 17(d)(1) of the National School Lunch Act (42

21 U.S.C. 1766(d)(1)) is amended by striking ‘‘, and shall

22 provide technical assistance’’ and all that follows through

23 ‘‘its application’’.

24 (d) REIMBURSEMENT OF CHILD CARE INSTITU25 TIONS.—Section 17(f)(2)(B) of the National School
139

•S 1956 PCS

1 Lunch Act (42 U.S.C. 1766(f)(2)(B)) is amended by strik2 ing ‘‘two meals and two supplements or three meals and

3 one supplement’’ and inserting ‘‘2 meals and 1 supple4 ment’’.

5 (e) IMPROVED TARGETING OF DAY CARE HOME RE6 IMBURSEMENTS.—

7 (1) RESTRUCTURED DAY CARE HOME REIM8 BURSEMENTS.—Section 17(f)(3) of the National

9 School Lunch Act (42 U.S.C. 1766(f)(3)) is amend10 ed by striking ‘‘(3)(A) Institutions’’ and all that fol11 lows through the end of subparagraph (A) and in12 serting the following:

13 ‘‘(3) REIMBURSEMENT OF FAMILY OR GROUP

14 DAY CARE HOME SPONSORING ORGANIZATIONS.—

15 ‘‘(A) REIMBURSEMENT FACTOR.—

16 ‘‘(i) IN GENERAL.—An institution

17 that participates in the program under this

18 section as a family or group day care home

19 sponsoring organization shall be provided,

20 for payment to a home sponsored by the

21 organization, reimbursement factors in ac22 cordance with this subparagraph for the

23 cost of obtaining and preparing food and

24 prescribed labor costs involved in providing

25 meals under this section.
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•S 1956 PCS

1 ‘‘(ii) TIER I FAMILY OR GROUP DAY

2 CARE HOMES.—

3 ‘‘(I) DEFINITION OF TIER I FAM4 ILY OR GROUP DAY CARE HOME.—In

5 this paragraph, the term ‘tier I family

6 or group day care home’ means—

7 ‘‘(aa) a family or group day

8 care home that is located in a ge9 ographic area, as defined by the

10 Secretary based on census data,

11 in which at least 50 percent of

12 the children residing in the area

13 are members of households whose

14 incomes meet the income eligi15 bility guidelines for free or re16 duced price meals under section

17 9;

18 ‘‘(bb) a family or group day

19 care home that is located in an

20 area served by a school enrolling

21 elementary students in which at

22 least 50 percent of the total num23 ber of children enrolled are cer24 tified eligible to receive free or

25 reduced price school meals under
141

•S 1956 PCS

1 this Act or the Child Nutrition

2 Act of 1966 (42 U.S.C. 1771 et

3 seq.); or

4 ‘‘(cc) a family or group day

5 care home that is operated by a

6 provider whose household meets

7 the income eligibility guidelines

8 for free or reduced price meals

9 under section 9 and whose in10 come is verified by the sponsor11 ing or organization of the home

12 under regulations established by

13 the Secretary.

14 ‘‘(II) REIMBURSEMENT.—Except

15 as provided in subclause (III), a tier

16 I family or group day care home shall

17 be provided reimbursement factors

18 under this clause without a require19 ment for documentation of the costs

20 described in clause (i), except that re21 imbursement shall not be provided

22 under this subclause for meals or sup23 plements served to the children of a

24 person acting as a family or group

25 day care home provider unless the
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•S 1956 PCS

1 children meet the income eligibility

2 guidelines for free or reduced price

3 meals under section 9.

4 ‘‘(III) FACTORS.—Except as pro5 vided in subclause (IV), the reim6 bursement factors applied to a home

7 referred to in subclause (II) shall be

8 the factors in effect on July 1, 1996.

9 ‘‘(IV) ADJUSTMENTS.—The re10 imbursement factors under this sub11 paragraph shall be adjusted on July

12 1, 1997, and each July 1 thereafter,

13 to reflect changes in the Consumer

14 Price Index for food at home for the

15 most recent 12-month period for

16 which the data are available. The re17 imbursement factors under this sub18 paragraph shall be rounded to the

19 nearest lower cent increment and

20 based on the unrounded adjustment in

21 effect on June 30 of the preceding

22 school year.

23 ‘‘(iii) TIER II FAMILY OR GROUP DAY

24 CARE HOMES.—

25 ‘‘(I) IN GENERAL.—
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•S 1956 PCS

1 ‘‘(aa) FACTORS.—Except as

2 provided in subclause (II), with

3 respect to meals or supplements

4 served under this clause by a

5 family or group day care home

6 that does not meet the criteria

7 set forth in clause (ii)(I), the re8 imbursement factors shall be $1

9 for lunches and suppers, 30 cents

10 for breakfasts, and 15 cents for

11 supplements.

12 ‘‘(bb) ADJUSTMENTS.—The

13 factors shall be adjusted on July

14 1, 1997, and each July 1 there15 after, to reflect changes in the

16 Consumer Price Index for food at

17 home for the most recent 12-

18 month period for which the data

19 are available. The reimbursement

20 factors under this item shall be

21 rounded down to the nearest

22 lower cent increment and based

23 on the unrounded adjustment for

24 the preceding 12-month period.
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•S 1956 PCS

1 ‘‘(cc) REIMBURSEMENT.—A

2 family or group day care home

3 shall be provided reimbursement

4 factors under this subclause with5 out a requirement for docu6 mentation of the costs described

7 in clause (i), except that reim8 bursement shall not be provided

9 under this subclause for meals or

10 supplements served to the chil11 dren of a person acting as a fam12 ily or group day care home pro13 vider unless the children meet the

14 income eligibility guidelines for

15 free or reduced price meals under

16 section 9.

17 ‘‘(II) OTHER FACTORS.—A fam18 ily or group day care home that does

19 not meet the criteria set forth in

20 clause (ii)(I) may elect to be provided

21 reimbursement factors determined in

22 accordance with the following require23 ments:

24 ‘‘(aa) CHILDREN ELIGIBLE

25 FOR FREE OR REDUCED PRICE
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1 MEALS.—In the case of meals or

2 supplements served under this

3 subsection to children who are

4 members of households whose in5 comes meet the income eligibility

6 guidelines for free or reduced

7 price meals under section 9, the

8 family or group day care home

9 shall be provided reimbursement

10 factors set by the Secretary in

11 accordance with clause (ii)(III).

12 ‘‘(bb) INELIGIBLE CHIL13 DREN.—In the case of meals or

14 supplements served under this

15 subsection to children who are

16 members of households whose in17 comes do not meet the income

18 eligibility guidelines, the family

19 or group day care home shall be

20 provided reimbursement factors

21 in accordance with subclause (I).

22 ‘‘(III) INFORMATION AND DE23 TERMINATIONS.—

24 ‘‘(aa) IN GENERAL.—If a

25 family or group day care home
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•S 1956 PCS

1 elects to claim the factors de2 scribed in subclause (II), the

3 family or group day care home

4 sponsoring organization serving

5 the home shall collect the nec6 essary income information, as de7 termined by the Secretary, from

8 any parent or other caretaker to

9 make the determinations speci10 fied in subclause (II) and shall

11 make the determinations in ac12 cordance with rules prescribed by

13 the Secretary.

14 ‘‘(bb) CATEGORICAL ELIGI15 BILITY.—In making a determina16 tion under item (aa), a family or

17 group day care home sponsoring

18 organization may consider a child

19 participating in or subsidized

20 under, or a child with a parent

21 participating in or subsidized

22 under, a federally or State sup23 ported child care or other benefit

24 program with an income eligi25 bility limit that does not exceed
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•S 1956 PCS

1 the eligibility standard for free or

2 reduced price meals under section

3 9 to be a child who is a member

4 of a household whose income

5 meets the income eligibility

6 guidelines under section 9.

7 ‘‘(cc) FACTORS FOR CHIL8 DREN ONLY.—A family or group

9 day care home may elect to re10 ceive the reimbursement factors

11 prescribed under clause (ii)(III)

12 solely for the children participat13 ing in a program referred to in

14 item (bb) if the home elects not

15 to have income statements col16 lected from parents or other care17 takers.

18 ‘‘(IV) SIMPLIFIED MEAL COUNT19 ING AND REPORTING PROCEDURES.—

20 The Secretary shall prescribe sim21 plified meal counting and reporting

22 procedures for use by a family or

23 group day care home that elects to

24 claim the factors under subclause (II)

25 and by a family or group day care
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1 home sponsoring organization that

2 sponsors the home. The procedures

3 the Secretary prescribes may include

4 1 or more of the following:

5 ‘‘(aa) Setting an annual per6 centage for each home of the

7 number of meals served that are

8 to be reimbursed in accordance

9 with the reimbursement factors

10 prescribed under clause (ii)(III)

11 and an annual percentage of the

12 number of meals served that are

13 to be reimbursed in accordance

14 with the reimbursement factors

15 prescribed under subclause (I),

16 based on the family income of

17 children enrolled in the home in a

18 specified month or other period.

19 ‘‘(bb) Placing a home into 1

20 of 2 or more reimbursement cat21 egories annually based on the

22 percentage of children in the

23 home whose households have in24 comes that meet the income eligi25 bility guidelines under section 9,
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1 with each such reimbursement

2 category carrying a set of reim3 bursement factors such as the

4 factors prescribed under clause

5 (ii)(III) or subclause (I) or fac6 tors established within the range

7 of factors prescribed under clause

8 (ii)(III) and subclause (I).

9 ‘‘(cc) Such other simplified

10 procedures as the Secretary may

11 prescribe.

12 ‘‘(V) MINIMUM VERIFICATION

13 REQUIREMENTS.—The Secretary may

14 establish any minimum verification re15 quirements that are necessary to

16 carry out this clause.’’.

17 (2) GRANTS TO STATES TO PROVIDE ASSIST18 ANCE TO FAMILY OR GROUP DAY CARE HOMES.—

19 Section 17(f)(3) of the National School Lunch Act

20 (42 U.S.C. 1766(f)(3)) is amended by adding at the

21 end the following:

22 ‘‘(D) GRANTS TO STATES TO PROVIDE AS23 SISTANCE TO FAMILY OR GROUP DAY CARE

24 HOMES.—

25 ‘‘(i) IN GENERAL.—
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1 ‘‘(I) RESERVATION.—From

2 amounts made available to carry out

3 this section, the Secretary shall re4 serve $5,000,000 of the amount made

5 available for fiscal year 1997.

6 ‘‘(II) PURPOSE.—The Secretary

7 shall use the funds made available

8 under subclause (I) to provide grants

9 to States for the purpose of provid10 ing—

11 ‘‘(aa) assistance, including

12 grants, to family and day care

13 home sponsoring organizations

14 and other appropriate organiza15 tions, in securing and providing

16 training, materials, automated

17 data processing assistance, and

18 other assistance for the staff of

19 the sponsoring organizations; and

20 ‘‘(bb) training and other as21 sistance to family and group day

22 care homes in the implementation

23 of the amendment to subpara24 graph (A) made by section
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1 1208(e)(1) of the Agricultural

2 Reconciliation Act of 1996.

3 ‘‘(ii) ALLOCATION.—The Secretary

4 shall allocate from the funds reserved

5 under clause (i)(I)—

6 ‘‘(I) $30,000 in base funding to

7 each State; and

8 ‘‘(II) any remaining amount

9 among the States, based on the num10 ber of family day care homes partici11 pating in the program in a State dur12 ing fiscal year 1995 as a percentage

13 of the number of all family day care

14 homes participating in the program

15 during fiscal year 1995.

16 ‘‘(iii) RETENTION OF FUNDS.—Of the

17 amount of funds made available to a State

18 for fiscal year 1997 under clause (i), the

19 State may retain not to exceed 30 percent

20 of the amount to carry out this subpara21 graph.

22 ‘‘(iv) ADDITIONAL PAYMENTS.—Any

23 payments received under this subpara24 graph shall be in addition to payments
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1 that a State receives under subparagraph

2 (A).’’.

3 (3) PROVISION OF DATA.—Section 17(f)(3) of

4 the National School Lunch Act (42 U.S.C.

5 1766(f)(3)), as amended by paragraph (2), is

6 amended by adding at the end the following:

7 ‘‘(E) PROVISION OF DATA TO FAMILY OR

8 GROUP DAY CARE HOME SPONSORING ORGANI9 ZATIONS.—

10 ‘‘(i) CENSUS DATA.—The Secretary

11 shall provide to each State agency admin12 istering a child and adult care food pro13 gram under this section data from the

14 most recent decennial census survey or

15 other appropriate census survey for which

16 the data are available showing which areas

17 in the State meet the requirements of sub18 paragraph (A)(ii)(I)(aa). The State agency

19 shall provide the data to family or group

20 day care home sponsoring organizations lo21 cated in the State.

22 ‘‘(ii) SCHOOL DATA.—

23 ‘‘(I) IN GENERAL.—A State

24 agency administering the school lunch

25 program under this Act or the school
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1 breakfast program under the Child

2 Nutrition Act of 1966 (42 U.S.C.

3 1771 et seq.) shall provide to ap4 proved family or group day care home

5 sponsoring organizations a list of

6 schools serving elementary school chil7 dren in the State in which not less

than 1 8 ⁄2 of the children enrolled are

9 certified to receive free or reduced

10 price meals. The State agency shall

11 collect the data necessary to create

12 the list annually and provide the list

13 on a timely basis to any approved

14 family or group day care home spon15 soring organization that requests the

16 list.

17 ‘‘(II) USE OF DATA FROM PRE18 CEDING SCHOOL YEAR.—In determin19 ing for a fiscal year or other annual

20 period whether a home qualifies as a

21 tier I family or group day care home

22 under subparagraph (A)(ii)(I), the

23 State agency administering the pro24 gram under this section, and a family

25 or group day care home sponsoring
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1 organization, shall use the most cur2 rent available data at the time of the

3 determination.

4 ‘‘(iii) DURATION OF DETERMINA5 TION.—For purposes of this section, a de6 termination that a family or group day

7 care home is located in an area that quali8 fies the home as a tier I family or group

9 day care home (as the term is defined in

10 subparagraph (A)(ii)(I)), shall be in effect

11 for 3 years (unless the determination is

12 made on the basis of census data, in which

13 case the determination shall remain in ef14 fect until more recent census data are

15 available) unless the State agency deter16 mines that the area in which the home is

17 located no longer qualifies the home as a

18 tier I family or group day care home.’’.

19 (4) CONFORMING AMENDMENTS.—Section 17(c)

20 of the National School Lunch Act (42 U.S.C.

21 1766(c)) is amended by inserting ‘‘except as pro22 vided in subsection (f)(3),’’ after ‘‘For purposes of

23 this section,’’ each place it appears in paragraphs

24 (1), (2), and (3).
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1 (f) REIMBURSEMENT.—Section 17(f) of the National

2 School Lunch Act (42 U.S.C. 1766(f)) is amended—

3 (1) in paragraph (3)—

4 (A) in subparagraph (B), by striking the

5 third and fourth sentences; and

6 (B) in subparagraph (C)(ii), by striking

7 ‘‘conduct outreach’’ and all that follows through

8 ‘‘may become’’ and inserting ‘‘assist unlicensed

9 family or group day care homes in becoming’’;

10 and

11 (2) in the first sentence of paragraph (4), by

12 striking ‘‘shall’’ and inserting ‘‘may’’.

13 (g) NUTRITIONAL REQUIREMENTS.—Section

14 17(g)(1) of the National School Lunch Act (42 U.S.C.

15 1766(g)(1)) is amended—

16 (1) in subparagraph (A), by striking the second

17 sentence; and

18 (2) in subparagraph (B), by striking the second

19 sentence.

20 (h) ELIMINATION OF STATE PAPERWORK AND OUT21 REACH BURDEN.—Section 17 of the National School

22 Lunch Act (42 U.S.C. 1766) is amended by striking sub23 section (k) and inserting the following:

24 ‘‘(k) TRAINING AND TECHNICAL ASSISTANCE.—A

25 State participating in the program established under this
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1 section shall provide sufficient training, technical assist2 ance, and monitoring to facilitate effective operation of the

3 program. The Secretary shall assist the State in develop4 ing plans to fulfill the requirements of this subsection.’’.

5 (i) RECORDS.—The second sentence of section 17(m)

6 of the National School Lunch Act (42 U.S.C. 1766(m))

7 is amended by striking ‘‘at all times’’ and inserting ‘‘at

8 any reasonable time’’.

9 (j) INFORMATION FOR PARENTS.—Section 17 of the

10 National School Lunch Act (42 U.S.C. 1766) is amended

11 by striking subsection (q) and inserting the following:

12 ‘‘(q) INFORMATION FOR PARENTS.—The State agen13 cy shall ensure that, at least once a year, child care insti14 tutions provide written information to parents that in15 cludes—

16 ‘‘(1) basic information on the benefits of the

17 special supplemental nutrition program for women,

18 infants, and children authorized under section 17 of

19 the Child Nutrition Act of 1966 (42 U.S.C. 1786);

20 ‘‘(2) information on the maximum income lim21 its, according to family size, applicable to the pro22 gram; and

23 ‘‘(3) information on where parents may apply to

24 participate in the program.’’.

25 (k) EFFECTIVE DATE.—
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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section

3 shall become effective on the date of enactment of

4 this Act.

5 (2) IMPROVED TARGETING OF DAY CARE HOME

6 REIMBURSEMENTS.—The amendments made by

7 paragraphs (1) and (4) of subsection (e) shall be8 come effective on July 1, 1997.

9 (3) REGULATIONS.—

10 (A) INTERIM REGULATIONS.—Not later

11 than January 1, 1997, the Secretary of Agri12 culture shall issue interim regulations to imple13 ment—

14 (i) the amendments made by para15 graphs (1), (3), and (4) of subsection (e);

16 and

17 (ii) section 17(f)(3)(C) of the National

18 School Lunch Act (42 U.S.C.

19 1766(f)(3)(C)).

20 (B) FINAL REGULATIONS.—Not later than

21 July 1, 1997, the Secretary of Agriculture shall

22 issue final regulations to implement the provi23 sions of law referred to in subparagraph (A).
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1 (l) STUDY OF IMPACT OF AMENDMENTS ON PRO2 GRAM PARTICIPATION AND FAMILY DAY CARE LICENS3 ING.—

4 (1) IN GENERAL.—The Secretary of Agri5 culture, in conjunction with the Secretary of Health

6 and Human Services, shall study the impact of the

7 amendments made by this section on—

8 (A) the number of family day care homes

9 participating in the child and adult care food

10 program established under section 17 of the

11 National School Lunch Act (42 U.S.C. 1766);

12 (B) the number of day care home sponsor13 ing organizations participating in the program;

14 (C) the number of day care homes that are

15 licensed, certified, registered, or approved by

16 each State in accordance with regulations is17 sued by the Secretary;

18 (D) the rate of growth of the numbers re19 ferred to in subparagraphs (A) through (C);

20 (E) the nutritional adequacy and quality of

21 meals served in family day care homes that—

22 (i) received reimbursement under the

23 program prior to the amendments made by

24 this section but do not receive reimburse-
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1 ment after the amendments made by this

2 section; or

3 (ii) received full reimbursement under

4 the program prior to the amendments

5 made by this section but do not receive full

6 reimbursement after the amendments

7 made by this section; and

8 (F) the proportion of low-income children

9 participating in the program prior to the

10 amendments made by this section and the pro11 portion of low-income children participating in

12 the program after the amendments made by

13 this section.

14 (2) REQUIRED DATA.—Each State agency par15 ticipating in the child and adult care food program

16 under section 17 of the National School Lunch Act

17 (42 U.S.C. 1766) shall submit to the Secretary of

18 Agriculture data on—

19 (A) the number of family day care homes

20 participating in the program on June 30, 1997,

21 and June 30, 1998;

22 (B) the number of family day care homes

23 licensed, certified, registered, or approved for

24 service on June 30, 1997, and June 30, 1998;

25 and
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1 (C) such other data as the Secretary may

2 require to carry out this subsection.

3 (3) SUBMISSION OF REPORT.—Not later than 2

4 years after the date of enactment of this section, the

5 Secretary of Agriculture shall submit the study re6 quired under this subsection to the Committee on

7 Economic and Educational Opportunities of the

8 House of Representatives and the Committee on Ag9 riculture, Nutrition, and Forestry of the Senate.

10 SEC. 1209. PILOT PROJECTS.

11 (a) UNIVERSAL FREE PILOT.—Section 18(d) of the

12 National School Lunch Act (42 U.S.C. 1769(d)) is amend13 ed—

14 (1) by striking paragraph (3); and

15 (2) by redesignating paragraphs (4) and (5) as

16 paragraphs (3) and (4), respectively.

17 (b) DEMONSTRATION PROJECT OUTSIDE SCHOOL

18 HOURS.—Section 18(e) of the National School Lunch Act

19 (42 U.S.C. 1769(e)) is amended—

20 (1) in paragraph (1)—

21 (A) in subparagraph (A)—

22 (i) by striking ‘‘(A)’’; and

23 (ii) by striking ‘‘shall’’ and inserting

24 ‘‘may’’; and

25 (B) by striking subparagraph (B); and
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1 (2) by striking paragraph (5) and inserting the

2 following:

3 ‘‘(5) AUTHORIZATION OF APPROPRIATIONS.—

4 There are authorized to be appropriated to carry out

5 this subsection such sums as are necessary for each

6 of fiscal years 1997 and 1998.’’.

7 (c) ELIMINATING PROJECTS.—Section 18 of the Na8 tional School Lunch Act (42 U.S.C. 1769) is amended—

9 (1) by striking subsections (a) and (g) through

10 (i); and

11 (2) by redesignating subsections (b) through

12 (f), as so amended, as subsections (a) through (e),

13 respectively.

14 (d) CONFORMING AMENDMENT.—Section

15 17B(d)(1)(A) of the National School Lunch Act (42

16 U.S.C. 1766b(d)(1)(A)) is amended by striking ‘‘18(c)’’

17 and inserting ‘‘18(b)’’.

18 SEC. 1210. REDUCTION OF PAPERWORK.

19 Section 19 of the National School Lunch Act (42

20 U.S.C. 1769a) is repealed.

21 SEC. 1211. INFORMATION ON INCOME ELIGIBILITY.

22 Section 23 of the National School Lunch Act (42

23 U.S.C. 1769d) is repealed.
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1 SEC. 1212. NUTRITION GUIDANCE FOR CHILD NUTRITION

2 PROGRAMS.

3 Section 24 of the National School Lunch Act (42

4 U.S.C. 1769e) is repealed.

5 CHAPTER 2—AMENDMENTS TO THE

6 CHILD NUTRITION ACT OF 1966

7 SEC. 1251. SPECIAL MILK PROGRAM.

8 Section 3(a)(3) of the Child Nutrition Act of 1966

9 (42 U.S.C. 1772(a)(3)) is amended by striking ‘‘the Trust

10 Territory of the Pacific Islands’’ and inserting ‘‘the Com11 monwealth of the Northern Mariana Islands’’.

12 SEC. 1252. FREE AND REDUCED PRICE POLICY STATEMENT.

13 Section 4(b)(1) of the Child Nutrition Act of 1966

14 (42 U.S.C. 1773(b)(1)) is amended by adding at the end

15 the following:

16 ‘‘(E) FREE AND REDUCED PRICE POLICY

17 STATEMENT.—After the initial submission, a

18 school food authority shall not be required to

19 submit a free and reduced price policy state20 ment to a State educational agency under this

21 Act unless there is a substantive change in the

22 free and reduced price policy of the school food

23 authority. A routine change in the policy of a

24 school food authority, such as an annual adjust25 ment of the income eligibility guidelines for free

26 and reduced price meals, shall not be sufficient
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1 cause for requiring the school food authority to

2 submit a policy statement.’’.

3 SEC. 1253. SCHOOL BREAKFAST PROGRAM AUTHORIZA4 TION.

5 (a) TRAINING AND TECHNICAL ASSISTANCE IN FOOD

6 PREPARATION.—Section 4(e)(1)(B) of the Child Nutrition

7 Act of 1966 (42 U.S.C. 1773(e)(1)(B)) is amended by

8 striking the second sentence.

9 (b) EXPANSION OF PROGRAM; STARTUP AND EXPAN10 SION COSTS.—

11 (1) IN GENERAL.—Section 4 of the Child Nutri12 tion Act of 1966 (42 U.S.C. 1773) is amended by

13 striking subsections (f) and (g).

14 (2) EFFECTIVE DATE.—The amendments made

15 by paragraph (1) shall become effective on October

16 1, 1996.

17 SEC. 1254. STATE ADMINISTRATIVE EXPENSES.

18 (a) USE OF FUNDS FOR COMMODITY DISTRIBUTION

19 ADMINISTRATION; STUDIES.—Section 7 of the Child Nu20 trition Act of 1966 (42 U.S.C. 1776) is amended—

21 (1) by striking subsections (e) and (h); and

22 (2) by redesignating subsections (f), (g), and (i)

23 as subsections (e), (f), and (g), respectively.
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1 (b) APPROVAL OF CHANGES.—Section 7(e) of the

2 Child Nutrition Act of 1966 (42 U.S.C. 1776(e)), as so

3 redesignated, is amended—

4 (1) by striking ‘‘each year an annual plan’’ and

5 inserting ‘‘the initial fiscal year a plan’’; and

6 (2) by adding at the end the following: ‘‘After

7 submitting the initial plan, a State shall be required

8 to submit to the Secretary for approval only a sub9 stantive change in the plan.’’.

10 SEC. 1255. REGULATIONS.

11 Section 10(b) of the Child Nutrition Act of 1966 (42

12 U.S.C. 1779(b)) is amended—

13 (1) in paragraph (1), by striking ‘‘(1)’’; and

14 (2) by striking paragraphs (2) through (4).

15 SEC. 1256. PROHIBITIONS.

16 Section 11(a) of the Child Nutrition Act of 1966 (42

17 U.S.C. 1780(a)) is amended by striking ‘‘neither the Sec18 retary nor the State shall’’ and inserting ‘‘the Secretary

19 shall not’’.

20 SEC. 1257. MISCELLANEOUS PROVISIONS AND DEFINI21 TIONS.

22 Section 15 of the Child Nutrition Act of 1966 (42

23 U.S.C. 1784) is amended—

24 (1) in paragraph (1), by striking ‘‘the Trust

25 Territory of the Pacific Islands’’ and inserting ‘‘the
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1 Commonwealth of the Northern Mariana Islands’’;

2 and

3 (2) in the first sentence of paragraph (3)—

4 (A) in subparagraph (A), by inserting

5 ‘‘and’’ at the end; and

6 (B) by striking ‘‘, and (C)’’ and all that

7 follows through ‘‘Governor of Puerto Rico’’.

8 SEC. 1258. ACCOUNTS AND RECORDS.

9 The second sentence of section 16(a) of the Child Nu10 trition Act of 1966 (42 U.S.C. 1785(a)) is amended by

11 striking ‘‘at all times be available’’ and inserting ‘‘be avail12 able at any reasonable time’’.

13 SEC. 1259. SPECIAL SUPPLEMENTAL NUTRITION PROGRAM

14 FOR WOMEN, INFANTS, AND CHILDREN.

15 (a) DEFINITIONS.—Section 17(b) of the Child Nutri16 tion Act of 1966 (42 U.S.C. 1786(b)) is amended—

17 (1) in paragraph (15)(B)(iii), by inserting ‘‘of

18 not more than 365 days’’ after ‘‘accommodation’’;

19 and

20 (2) in paragraph (16)—

21 (A) in subparagraph (A), by adding ‘‘and’’

22 at the end; and

23 (B) in subparagraph (B), by striking ‘‘;

24 and’’ and inserting a period; and

25 (C) by striking subparagraph (C).
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1 (b) SECRETARY’S PROMOTION OF WIC.—Section

2 17(c) of the Child Nutrition Act of 1966 (42 U.S.C.

3 1786(c)) is amended by striking paragraph (5).

4 (c) ELIGIBLE PARTICIPANTS.—Section 17(d) of the

5 Child Nutrition Act of 1966 (42 U.S.C. 1786(d)) is

6 amended by striking paragraph (4).

7 (d) NUTRITION EDUCATION AND DRUG ABUSE EDU8 CATION.—Section 17(e) of the Child Nutrition Act of

9 1966 (42 U.S.C. 1786(e)) is amended—

10 (1) in the first sentence of paragraph (1), by

11 striking ‘‘shall ensure’’ and all that follows through

12 ‘‘is provided’’ and inserting ‘‘shall provide nutrition

13 education and may provide drug abuse education’’;

14 (2) in paragraph (2), by striking the third sen15 tence;

16 (3) in paragraph (4)—

17 (A) in the matter preceding subparagraph

18 (A), by striking ‘‘shall’’;

19 (B) by striking subparagraph (A);

20 (C) by redesignating subparagraphs (B)

21 and (C) as subparagraphs (A) and (B), respec22 tively;

23 (D) in subparagraph (A), as so redesig24 nated—
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1 (i) by inserting ‘‘shall’’ before ‘‘pro2 vide’’; and

3 (ii) by striking ‘‘and’’ at the end;

4 (E) in subparagraph (B), as so redesig5 nated—

6 (i) by inserting ‘‘shall’’ before ‘‘pro7 vide’’; and

8 (ii) by striking the period at the end

9 and inserting ‘‘; and’’; and

10 (F) by adding at the end the following:

11 ‘‘(C) may provide a local agency with materials

12 describing other programs for which a participant in

13 the program may be eligible.’’;

14 (4) in paragraph (5), by striking ‘‘The State

15 agency shall ensure that each’’ and inserting

16 ‘‘Each’’; and

17 (5) by striking paragraph (6).

18 (e) STATE PLAN.—Section 17(f) of the Child Nutri19 tion Act of 1966 (42 U.S.C. 1786(f)) is amended—

20 (1) in paragraph (1)—

21 (A) in subparagraph (A)—

22 (i) by striking ‘‘annually to the Sec23 retary, by a date specified by the Sec24 retary, a’’ and inserting ‘‘to the Secretary,
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1 by a date specified by the Secretary, an

2 initial’’; and

3 (ii) by adding at the end the follow4 ing: ‘‘After submitting the initial plan, a

5 State shall be required to submit to the

6 Secretary for approval only a substantive

7 change in the plan.’’;

8 (B) in subparagraph (C)—

9 (i) by striking clause (iii) and insert10 ing the following:

11 ‘‘(iii) a plan to coordinate operations under the

12 program with other services or programs that may

13 benefit participants in, and applicants for, the pro14 gram;’’;

15 (ii) in clause (vi), by inserting after

16 ‘‘in the State’’ the following: ‘‘(including a

17 plan to improve access to the program for

18 participants and prospective applicants

19 who are employed, or who reside, in rural

20 areas)’’;

21 (iii) in clause (vii), by striking ‘‘to

22 provide program benefits’’ and all that fol23 lows through ‘‘emphasis on’’ and inserting

24 ‘‘for’’;
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1 (iv) by striking clauses (ix), (x), and

2 (xii);

3 (v) in clause (xiii), by striking ‘‘may

4 require’’ and inserting ‘‘may reasonably re5 quire’’;

6 (vi) by redesignating clauses (xi) and

7 (xiii), as so amended, as clauses (ix) and

8 (x), respectively; and

9 (vii) in clause (ix), as so redesignated,

10 by adding ‘‘and’’ at the end;

11 (C) by striking subparagraph (D); and

12 (D) by redesignating subparagraph (E) as

13 subparagraph (D);

14 (2) by striking paragraphs (2), (6), (8), and

15 (22);

16 (3) in the second sentence of paragraph (5), by

17 striking ‘‘at all times be available’’ and inserting ‘‘be

18 available at any reasonable time’’;

19 (4) in paragraph (9)(B), by striking the second

20 sentence;

21 (5) in the first sentence of paragraph (11), by

22 striking ‘‘, including standards that will ensure suffi23 cient State agency staff’’;

24 (6) in paragraph (12), by striking the third sen25 tence;
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1 (7) in paragraph (17), by striking ‘‘and to ac2 commodate’’ and all that follows through ‘‘facili3 ties’’;

4 (8) in paragraph (19), by striking ‘‘shall’’ and

5 inserting ‘‘may’’; and

6 (9) by redesignating paragraphs (3), (4), (5),

7 (7), (9) through (21), (23), and (24) as paragraphs

8 (2), (3), (4), (5), (6) through (18), (19), and (20),

9 respectively.

10 (f) INFORMATION.—Section 17(g) of the Child Nutri11 tion Act of 1966 (42 U.S.C. 1786(g)) is amended—

12 (1) in paragraph (5), by striking ‘‘the report re13 quired under subsection (d)(4)’’ and inserting ‘‘re14 ports on program participant characteristics’’; and

15 (2) by striking paragraph (6).

16 (g) PROCUREMENT OF INFANT FORMULA.—

17 (1) IN GENERAL.—Section 17(h) of the Child

18 Nutrition Act of 1966 (42 U.S.C. 1786(h)) is

19 amended—

20 (A) in paragraph (4)(E), by striking ‘‘and,

21 on’’ and all that follows through ‘‘(d)(4)’’;

22 (B) in paragraph (8)—

23 (i) by striking subparagraphs (A),

24 (C), and (M);

25 (ii) in subparagraph (G)—
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1 (I) in clause (i), by striking ‘‘(i)’’;

2 and

3 (II) by striking clauses (ii)

4 through (ix);

5 (iii) in subparagraph (I), by striking

6 ‘‘Secretary—’’ and all that follows through

7 ‘‘(v) may’’ and inserting ‘‘Secretary may’’;

8 (iv) by redesignating subparagraphs

9 (B) and (D) through (L) as subparagraphs

10 (A) and (B) through (J), respectively;

11 (v) in subparagraph (A)(i), as so re12 designated, by striking ‘‘subparagraphs

13 (C), (D), and (E)(iii), in carrying out sub14 paragraph (A),’’ and inserting ‘‘subpara15 graphs (B) and (C)(iii),’’;

16 (vi) in subparagraph (B)(i), as so re17 designated, by striking ‘‘subparagraph

18 (B)’’ each place it appears and inserting

19 ‘‘subparagraph (A)’’; and

20 (vii) in subparagraph (C)(iii), as so

21 redesignated, by striking ‘‘subparagraph

22 (B)’’ and inserting ‘‘subparagraph (A)’’;

23 and

24 (C) in paragraph (10)(B)—
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1 (i) in clause (i), by adding ‘‘and’’ at

2 the end;

3 (ii) in clause (ii), by striking ‘‘; and’’

4 and inserting a period; and

5 (iii) by striking clause (iii).

6 (2) APPLICATION.—The amendments made by

7 paragraph (1) shall not apply to a contract for the

8 procurement of infant formula under section

9 17(h)(8) of the Child Nutrition Act of 1966 (42

10 U.S.C. 1786(h)(8)) that is in effect on the date of

11 enactment of this subsection.

12 (h) NATIONAL ADVISORY COUNCIL ON MATERNAL,

13 INFANT, AND FETAL NUTRITION.—Section 17(k)(3) of

14 the Child Nutrition Act of 1966 (42 U.S.C. 1786(k)(3))

15 is amended by striking ‘‘Secretary shall designate’’ and

16 inserting ‘‘Council shall elect’’.

17 (i) COMPLETED STUDY; COMMUNITY COLLEGE DEM18 ONSTRATION; GRANTS FOR INFORMATION AND DATA SYS19 TEM.—Section 17 of the Child Nutrition Act of 1966 (42

20 U.S.C. 1786) is amended by striking subsections (n), (o),

21 and (p).

22 (j) DISQUALIFICATION OF VENDORS WHO ARE DIS23 QUALIFIED UNDER THE FOOD STAMP PROGRAM.—Sec24 tion 17 of the Child Nutrition Act of 1966 (42 U.S.C.
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1 1786), as amended by subsection (i), is amended by add2 ing at the end the following:

3 ‘‘(n) DISQUALIFICATION OF VENDORS WHO ARE

4 DISQUALIFIED UNDER THE FOOD STAMP PROGRAM.—

5 ‘‘(1) IN GENERAL.—The Secretary shall issue

6 regulations providing criteria for the disqualification

7 under this section of an approved vendor that is dis8 qualified from accepting benefits under the food

9 stamp program established under the Food Stamp

10 Act of 1977 (7 U.S.C. 2011 et seq.).

11 ‘‘(2) TERMS.—A disqualification under para12 graph (1)—

13 ‘‘(A) shall be for the same period as the

14 disqualification from the program referred to in

15 paragraph (1);

16 ‘‘(B) may begin at a later date than the

17 disqualification from the program referred to in

18 paragraph (1); and

19 ‘‘(C) shall not be subject to judicial or ad20 ministrative review.’’.

21 SEC. 1260. CASH GRANTS FOR NUTRITION EDUCATION.

22 Section 18 of the Child Nutrition Act of 1966 (42

23 U.S.C. 1787) is repealed.
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1 SEC. 1261. NUTRITION EDUCATION AND TRAINING.

2 (a) FINDINGS.—Section 19 of the Child Nutrition

3 Act of 1966 (42 U.S.C. 1788) is amended—

4 (1) in subsection (a), by striking ‘‘that—’’ and

5 all that follows through the period at the end and

6 inserting ‘‘that effective dissemination of scientif7 ically valid information to children participating or

8 eligible to participate in the school lunch and related

9 child nutrition programs should be encouraged.’’;

10 and

11 (2) in the first sentence of subsection (b), by

12 striking ‘‘encourage’’ and all that follows through

13 ‘‘establishing’’ and inserting ‘‘establish’’.

14 (b) USE OF FUNDS.—Section 19(f) of the Child Nu15 trition Act of 1966 (42 U.S.C. 1788(f)) is amended—

16 (1) in paragraph (1)—

17 (A) by striking subparagraph (B); and

18 (B) in subparagraph (A)—

19 (i) by striking ‘‘(A)’’;

20 (ii) by striking clauses (ix) through

21 (xix);

22 (iii) by redesignating clauses (i)

23 through (viii) and (xx) as subparagraphs

24 (A) through (H) and (I), respectively;
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1 (iv) in subparagraph (I), as so redes2 ignated, by striking the period at the end

3 and inserting ‘‘; and’’; and

4 (v) by adding at the end the following:

5 ‘‘(J) other appropriate related activities, as de6 termined by the State.’’;

7 (2) by striking paragraphs (2) and (4); and

8 (3) by redesignating paragraph (3) as para9 graph (2).

10 (c) ACCOUNTS, RECORDS, AND REPORTS.—The sec11 ond sentence of section 19(g)(1) of the Child Nutrition

12 Act of 1966 (42 U.S.C. 1788(g)(1)) is amended by strik13 ing ‘‘at all times be available’’ and inserting ‘‘be available

14 at any reasonable time’’.

15 (d) STATE COORDINATORS FOR NUTRITION; STATE

16 PLAN.—Section 19(h) of the Child Nutrition Act of 1966

17 (42 U.S.C. 1788(h)) is amended—

18 (1) in the second sentence of paragraph (1)—

19 (A) by striking ‘‘as provided in paragraph

20 (2) of this subsection’’; and

21 (B) by striking ‘‘as provided in paragraph

22 (3) of this subsection’’;

23 (2) in paragraph (2), by striking the second

24 and third sentences; and

25 (3) by striking paragraph (3).
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1 (e) AUTHORIZATION OF APPROPRIATIONS.—Section

2 19(i) of the Child Nutrition Act of 1966 (42 U.S.C.

3 1788(i)) is amended—

4 (1) in the first sentence of paragraph (2)(A), by

5 striking ‘‘and each succeeding fiscal year’’;

6 (2) by redesignating paragraphs (3) and (4) as

7 paragraphs (4) and (5), respectively; and

8 (3) by inserting after paragraph (2) the follow9 ing:

10 ‘‘(3) FISCAL YEARS 1997 THROUGH 2002.—

11 ‘‘(A) IN GENERAL.—There are authorized

12 to be appropriated to carry out this section

13 $10,000,000 for each of fiscal years 1997

14 through 2002.

15 ‘‘(B) GRANTS.—

16 ‘‘(i) IN GENERAL.—Grants to each

17 State from the amounts made available

18 under subparagraph (A) shall be based on

19 a rate of 50 cents for each child enrolled

20 in schools or institutions within the State,

21 except that no State shall receive an

22 amount less than $75,000 per fiscal year.

23 ‘‘(ii) INSUFFICIENT FUNDS.—If the

24 amount made available for any fiscal year

25 is insufficient to pay the amount to which
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1 each State is entitled under clause (i), the

2 amount of each grant shall be ratably re3 duced.’’.

4 (f) ASSESSMENT.—Section 19 of the Child Nutrition

5 Act of 1966 (42 U.S.C. 1788) is amended by striking sub6 section (j).

7 (g) EFFECTIVE DATE.—The amendments made by

8 subsection (e) shall become effective on October 1, 1996.

9 SEC. 1262. ROUNDING RULES.

10 (a) SPECIAL MILK PRICE PROGRAM RATES.—Section

11 3(a)(8) of the Child Nutrition Act of 1966 (42 U.S.C.

12 1772(a)(8)) is amended by striking ‘‘one-fourth cent’’ and

13 inserting ‘‘lower cent increment’’.

14 (b) REDUCED PRICE BREAKFAST RATES.—Section

15 4(b) of the Child Nutrition Act of 1966 (42 U.S.C.

16 1773(b)) is amended—

17 (1) in the second sentence of paragraph (1)(B),

18 by striking ‘‘one-fourth cent’’ and inserting ‘‘lower

19 cent increment’’; and

20 (2) in paragraph (2)(B)(ii), by striking ‘‘one21 fourth cent’’ and inserting ‘‘lower cent increment’’.

22 (c) COMMODITY RATE.—The second sentence of sec23 tion 6(e)(1)(B) of the National School Lunch Act (42

U.S.C. 1755(e)(1)(B)) is amended by striking ‘‘1 24 ⁄4 cent’’

25 and inserting ‘‘lower cent increment’’.
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1 (d) LUNCH, BREAKFAST, AND SUPPLEMENT

2 RATES.—The third sentence of section 11(a)(3)(B) of the

3 National School Lunch Act (42 U.S.C. 1759a(a)(3)(B))

4 is amended by striking ‘‘one-fourth cent’’ and inserting

5 ‘‘lower cent increment’’.

6 (e) EFFECTIVE DATE.—The amendments made by

7 this section shall become effective on July 1, 1996.

8 TITLE II—COMMITTEE ON

9 FINANCE

10 Subtitle A—Welfare Reform

11 SEC. 2001. SHORT TITLE OF SUBTITLE.

12 This subtitle may be cited as the ‘‘Personal Respon13 sibility and Work Opportunity Act of 1996’’.

14 SEC. 2002. TABLE OF CONTENTS OF SUBTITLE.

15 The table of contents for this subtitle is as follows:

Subtitle A—Welfare Reform

Sec. 2001. Short title.

Sec. 2002. Table of contents.

CHAPTER 1—BLOCK GRANTS FOR TEMPORARY ASSISTANCE FOR NEEDY

FAMILIES

Sec. 2101. Findings.

Sec. 2102. Reference to Social Security Act.

Sec. 2103. Block grants to States.

Sec. 2104. Services provided by charitable, religious, or private organizations.

Sec. 2105. Census data on grandparents as primary caregivers for their grandchildren.

Sec. 2106. Report on data processing.

Sec. 2107. Study on alternative outcomes measures.

Sec. 2108. Welfare Formula Fairness Commission.

Sec. 2109. Conforming amendments to the Social Security Act.

Sec. 2110. Conforming amendments to the Food Stamp Act of 1977 and related provisions.

Sec. 2111. Conforming amendments to other laws.
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Sec. 2112. Development of prototype of counterfeit-resistant social security

card required.

Sec. 2113. Disclosure of receipt of Federal funds.

Sec. 2114. Modifications to the job opportunities for certain low-income individuals program.

Sec. 2115. Secretarial submission of legislative proposal for technical and conforming amendments.

Sec. 2116. Effective date; transition rule.

CHAPTER 2—SUPPLEMENTAL SECURITY INCOME

Sec. 2200. Reference to Social Security Act.

SUBCHAPTER A—ELIGIBILITY RESTRICTIONS

Sec. 2201. Denial of SSI benefits for 10 years to individuals found to have

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

Sec. 2202. Denial of SSI benefits for fugitive felons and probation and parole

violators.

Sec. 2203. Treatment of prisoners.

Sec. 2204. Effective date of application for benefits.

SUBCHAPTER B—BENEFITS FOR DISABLED CHILDREN

Sec. 2211. Definition and eligibility rules.

Sec. 2212. Eligibility redeterminations and continuing disability reviews.

Sec. 2213. Additional accountability requirements.

Sec. 2214. Reduction in cash benefits payable to institutionalized individuals

whose medical costs are covered by private insurance.

Sec. 2215. Regulations.

SUBCHAPTER C—ADDITIONAL ENFORCEMENT PROVISION

Sec. 2221. Installment payment of large past-due supplemental security income

benefits.

Sec. 2222. Regulations.

SUBCHAPTER D—STATE SUPPLEMENTATION PROGRAMS

Sec. 2225. Repeal of maintenance of effort requirements applicable to optional

State programs for supplementation of SSI benefits.

SUBCHAPTER E—STUDIES REGARDING SUPPLEMENTAL SECURITY INCOME

PROGRAM

Sec. 2231. Annual report on the supplemental security income program.

Sec. 2232. Study by General Accounting Office.

CHAPTER 3—CHILD SUPPORT

Sec. 2300. Reference to Social Security Act.

SUBCHAPTER A—ELIGIBILITY FOR SERVICES; DISTRIBUTION OF PAYMENTS

Sec. 2301. State obligation to provide child support enforcement services.

Sec. 2302. Distribution of child support collections.

Sec. 2303. Privacy safeguards.

Sec. 2304. Rights to notification of hearings.
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SUBCHAPTER B—LOCATE AND CASE TRACKING

Sec. 2311. State case registry.

Sec. 2312. Collection and disbursement of support payments.

Sec. 2313. State directory of new hires.

Sec. 2314. Amendments concerning income withholding.

Sec. 2315. Locator information from interstate networks.

Sec. 2316. Expansion of the Federal Parent Locator Service.

Sec. 2317. Collection and use of social security numbers for use in child support enforcement.

SUBCHAPTER C—STREAMLINING AND UNIFORMITY OF PROCEDURES

Sec. 2321. Adoption of uniform State laws.

Sec. 2322. Improvements to full faith and credit for child support orders.

Sec. 2323. Administrative enforcement in interstate cases.

Sec. 2324. Use of forms in interstate enforcement.

Sec. 2325. State laws providing expedited procedures.

SUBCHAPTER D—PATERNITY ESTABLISHMENT

Sec. 2331. State laws concerning paternity establishment.

Sec. 2332. Outreach for voluntary paternity establishment.

Sec. 2333. Cooperation by applicants for and recipients of part A assistance.

SUBCHAPTER E—PROGRAM ADMINISTRATION AND FUNDING

Sec. 2341. Performance-based incentives and penalties.

Sec. 2342. Federal and State reviews and audits.

Sec. 2343. Required reporting procedures.

Sec. 2344. Automated data processing requirements.

Sec. 2345. Technical assistance.

Sec. 2346. Reports and data collection by the Secretary.

SUBCHAPTER F—ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS

Sec. 2351. Simplified process for review and adjustment of child support orders.

Sec. 2352. Furnishing consumer reports for certain purposes relating to child

support.

Sec. 2353. Nonliability for financial institutions providing financial records to

State child support enforcement agencies in child support

cases.

SUBCHAPTER G—ENFORCEMENT OF SUPPORT ORDERS

Sec. 2361. Internal Revenue Service collection of arrearages.

Sec. 2362. Authority to collect support from Federal employees.

Sec. 2363. Enforcement of child support obligations of members of the Armed

Forces.

Sec. 2364. Voiding of fraudulent transfers.

Sec. 2365. Work requirement for persons owing past-due child support.

Sec. 2366. Definition of support order.

Sec. 2367. Reporting arrearages to credit bureaus.

Sec. 2368. Liens.

Sec. 2369. State law authorizing suspension of licenses.

Sec. 2370. Denial of passports for nonpayment of child support.

Sec. 2371. International support enforcement.

Sec. 2372. Financial institution data matches.
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Sec. 2373. Enforcement of orders against paternal or maternal grandparents in

cases of minor parents.

Sec. 2374. Nondischargeability in bankruptcy of certain debts for the support

of a child.

SUBCHAPTER H—MEDICAL SUPPORT

Sec. 2376. Correction to ERISA definition of medical child support order.

Sec. 2377. Enforcement of orders for health care coverage.

SUBCHAPTER I—ENHANCING RESPONSIBILITY AND OPPORTUNITY FOR NONRESIDENTIAL PARENTS

Sec. 2381. Grants to States for access and visitation programs.

SUBCHAPTER J—EFFECTIVE DATES AND CONFORMING AMENDMENTS

Sec. 2391. Effective dates and conforming amendments.

CHAPTER 4—RESTRICTING WELFARE AND PUBLIC BENEFITS FOR ALIENS

Sec. 2400. Statements of national policy concerning welfare and immigration.

SUBCHAPTER A—ELIGIBILITY FOR FEDERAL BENEFITS

Sec. 2401. Aliens who are not qualified aliens ineligible for Federal public benefits.

Sec. 2402. Limited eligibility of qualified aliens for certain Federal programs.

Sec. 2403. Five-year limited eligibility of qualified aliens for Federal meanstested public benefit.

Sec. 2404. Notification and information reporting.

SUBCHAPTER B—ELIGIBILITY FOR STATE AND LOCAL PUBLIC BENEFITS

PROGRAMS

Sec. 2411. Aliens who are not qualified aliens or nonimmigrants ineligible for

State and local public benefits.

Sec. 2412. State authority to limit eligibility of qualified aliens for State public

benefits.

SUBCHAPTER C—ATTRIBUTION OF INCOME AND AFFIDAVITS OF SUPPORT

Sec. 2421. Federal attribution of sponsor’s income and resources to alien.

Sec. 2422. Authority for States to provide for attribution of sponsors income

and resources to the alien with respect to State programs.

Sec. 2423. Requirements for sponsor’s affidavit of support.

Sec. 2424. Cosignature of alien student loans.

SUBCHAPTER D—GENERAL PROVISIONS

Sec. 2431. Definitions.

Sec. 2432. Verification of eligibility for Federal public benefits.

Sec. 2433. Statutory construction.

Sec. 2434. Communication between State and local government agencies and

the Immigration and Naturalization Service.

Sec. 2435. Qualifying quarters.

SUBCHAPTER E—CONFORMING AMENDMENTS RELATING TO ASSISTED

HOUSING

Sec. 2441. Conforming amendments relating to assisted housing.
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SUBCHAPTER F—EARNED INCOME CREDIT DENIED TO UNAUTHORIZED

EMPLOYEES

Sec. 2451. Earned income credit denied to individuals not authorized to be employed in the United States.

CHAPTER 5—REDUCTIONS IN FEDERAL GOVERNMENT POSITIONS

Sec. 2501. Reductions.

Sec. 2502. Reductions in Federal bureaucracy.

Sec. 2503. Reducing personnel in Washington, D.C. area.

Sec. 2504. Downward adjustment of discretionary spending limits.

CHAPTER 6—REFORM OF PUBLIC HOUSING

Sec. 2601. Failure to comply with other welfare and public assistance programs.

Sec. 2602. Fraud under means-tested welfare and public assistance programs.

CHAPTER 7—TECHNICAL AMENDMENTS RELATING TO CHILD PROTECTION

PROGRAMS

Sec. 2701. Extension of enhanced funding for implementation of statewide

automated child welfare information systems.

Sec. 2702. Redesignation of section 1123.

CHAPTER 8—CHILD CARE

Sec. 2801. Short title and references.

Sec. 2802. Goals.

Sec. 2803. Authorization of appropriations and entitlement authority.

Sec. 2804. Lead agency.

Sec. 2805. Application and plan.

Sec. 2806. Limitation on State allotments.

Sec. 2807. Activities to improve the quality of child care.

Sec. 2808. Repeal of early childhood development and before- and after-school

care requirement.

Sec. 2809. Administration and enforcement.

Sec. 2810. Payments.

Sec. 2811. Annual report and audits.

Sec. 2812. Report by the Secretary.

Sec. 2813. Allotments.

Sec. 2814. Definitions.

Sec. 2815. Repeals.

Sec. 2816. Effective date.

CHAPTER 9—MISCELLANEOUS

Sec. 2901. Appropriation by State legislatures.

Sec. 2902. Sanctioning for testing positive for controlled substances.

Sec. 2903. Reduction in block grants to States for social services.

Sec. 2904. Elimination of housing assistance with respect to fugitive felons and

probation and parole violators.

Sec. 2905. Sense of the Senate regarding enterprise zones.

Sec. 2906. Sense of the Senate regarding the inability of the non-custodial parent to pay child support.

Sec. 2907. Establishing national goals to prevent teenage pregnancies.

Sec. 2908. Sense of the Senate regarding enforcement of statutory rape laws.
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Sec. 2909. Abstinence education.

Sec. 2910. Provisions to encourage electronic benefit transfer systems.

Sec. 2911. Rules relating to denial of earned income credit on basis of disqualified income.

Sec. 2912. Modification of adjusted gross income definition for earned income

credit.

Sec. 2913. Suspension of inflation adjustments for individuals with no qualifying children.

1 CHAPTER 1—BLOCK GRANTS FOR TEM2 PORARY ASSISTANCE FOR NEEDY

3 FAMILIES

4 SEC. 2101. FINDINGS.

5 The Congress makes the following findings:

6 (1) Marriage is the foundation of a successful

7 society.

8 (2) Marriage is an essential institution of a suc9 cessful society which promotes the interests of chil10 dren.

11 (3) Promotion of responsible fatherhood and

12 motherhood is integral to successful child rearing

13 and the well-being of children.

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

15 families with children had a child support order es16 tablished and, of that 54 percent, only about one17 half received the full amount due. Of the cases en18 forced through the public child support enforcement

19 system, only 18 percent of the caseload has a collec20 tion.
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1 (5) The number of individuals receiving aid to

2 families with dependent children (in this section re3 ferred to as ‘‘AFDC’’) has more than tripled since

4 1965. More than two-thirds of these recipients are

5 children. Eighty-nine percent of children receiving

6 AFDC benefits now live in homes in which no father

7 is present.

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

9 children receiving AFDC benefits—

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

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

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

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

14 (ii) While the number of children receiving

15 AFDC benefits increased nearly threefold be16 tween 1965 and 1992, the total number of chil17 dren in the United States aged 0 to 18 has de18 clined by 5.5 percent.

19 (B) The Department of Health and

20 Human Services has estimated that 12,000,000

21 children will receive AFDC benefits within 10

22 years.

23 (C) The increase in the number of children

24 receiving public assistance is closely related to

25 the increase in births to unmarried women. Be-
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1 tween 1970 and 1991, the percentage of live

2 births to unmarried women increased nearly

3 threefold, from 10.7 percent to 29.5 percent.

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

5 and births is well documented as follows:

6 (A) It is estimated that the rate of non7 marital teen pregnancy rose 23 percent from 54

8 pregnancies per 1,000 unmarried teenagers in

9 1976 to 66.7 pregnancies in 1991. The overall

10 rate of nonmarital pregnancy rose 14 percent

11 from 90.8 pregnancies per 1,000 unmarried

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

13 In contrast, the overall pregnancy rate for mar14 ried couples decreased 7.3 percent between

15 1980 and 1991, from 126.9 pregnancies per

16 1,000 married women in 1980 to 117.6 preg17 nancies in 1991.

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

19 between 1970 and 1991 has risen from 10.7

20 percent to 29.5 percent and if the current trend

21 continues, 50 percent of all births by the year

22 2015 will be out-of-wedlock.

23 (7) The negative consequences of an out-of-wed24 lock birth on the mother, the child, the family, and

25 society are well documented as follows:
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1 (A) Young women 17 and under who give

2 birth outside of marriage are more likely to go

3 on public assistance and to spend more years

4 on welfare once enrolled. These combined ef5 fects of ‘‘younger and longer’’ increase total

6 AFDC costs per household by 25 percent to 30

7 percent for 17-year-olds.

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

9 substantially higher risk of being born at a very

10 low or moderately low birth weight.

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

12 likely to experience low verbal cognitive attain13 ment, as well as more child abuse, and neglect.

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

15 more likely to have lower cognitive scores, lower

16 educational aspirations, and a greater likelihood

17 of becoming teenage parents themselves.

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

19 reduces the chances of the child growing up to

20 have an intact marriage.

21 (F) Children born out-of-wedlock are 3

22 times more likely to be on welfare when they

23 grow up.

24 (8) Currently 35 percent of children in single25 parent homes were born out-of-wedlock, nearly the
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1 same percentage as that of children in single-parent

2 homes whose parents are divorced (37 percent).

3 While many parents find themselves, through divorce

4 or tragic circumstances beyond their control, facing

5 the difficult task of raising children alone, neverthe6 less, the negative consequences of raising children in

7 single-parent homes are well documented as follows:

8 (A) Only 9 percent of married-couple fami9 lies with children under 18 years of age have

10 income below the national poverty level. In con11 trast, 46 percent of female-headed households

12 with children under 18 years of age are below

13 the national poverty level.

14 (B) Among single-parent families, nearly

1 15 ⁄2 of the mothers who never married received

AFDC while only 1 16 ⁄5 of divorced mothers re17 ceived AFDC.

18 (C) Children born into families receiving

19 welfare assistance are 3 times more likely to be

20 on welfare when they reach adulthood than chil21 dren not born into families receiving welfare.

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

23 the greatest risk of bearing low-birth-weight ba24 bies.
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1 (E) The younger the single parent mother,

2 the less likely she is to finish high school.

3 (F) Young women who have children be4 fore finishing high school are more likely to re5 ceive welfare assistance for a longer period of

6 time.

7 (G) Between 1985 and 1990, the public

8 cost of births to teenage mothers under the aid

9 to families with dependent children program,

10 the food stamp program, and the medicaid pro11 gram has been estimated at $120,000,000,000.

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

13 a child has a negative effect on school perform14 ance and peer adjustment.

15 (I) Children of teenage single parents have

16 lower cognitive scores, lower educational aspira17 tions, and a greater likelihood of becoming teen18 age parents themselves.

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

20 times more likely to fail and repeat a year in

21 grade school than are children from intact 2-

22 parent families.

23 (K) Children from single-parent homes are

24 almost 4 times more likely to be expelled or sus25 pended from school.
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1 (L) Neighborhoods with larger percentages

2 of youth aged 12 through 20 and areas with

3 higher percentages of single-parent households

4 have higher rates of violent crime.

5 (M) Of those youth held for criminal of6 fenses within the State juvenile justice system,

7 only 29.8 percent lived primarily in a home with

8 both parents. In contrast to these incarcerated

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

10 in the Nation’s resident population were living

11 with both parents.

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

13 the crisis in our Nation, it is the sense of the Con14 gress that prevention of out-of-wedlock pregnancy

15 and reduction in out-of-wedlock birth are very im16 portant Government interests and the policy con17 tained in part A of title IV of the Social Security

18 Act (as amended by section 2103(a) of this Act) is

19 intended to address the crisis.

20 SEC. 2102. REFERENCE TO SOCIAL SECURITY ACT.

21 Except as otherwise specifically provided, wherever in

22 this chapter an amendment is expressed in terms of an

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

24 the reference shall be considered to be made to that sec25 tion or other provision of the Social Security Act.
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1 SEC. 2103. BLOCK GRANTS TO STATES.

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

3 et seq.) is amended—

4 (1) by striking all that precedes section 418 (as

5 added by section 2803(b)(2) of this Act) and insert6 ing the following:

7 ‘‘PART A—BLOCK GRANTS TO STATES FOR

8 TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

9 ‘‘SEC. 401. PURPOSE.

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

11 increase the flexibility of States in operating a program

12 designed to—

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

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

15 the homes of relatives;

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

17 government benefits by promoting job preparation,

18 work, and marriage;

19 ‘‘(3) prevent and reduce the incidence of out-of20 wedlock pregnancies and establish annual numerical

21 goals for preventing and reducing the incidence of

22 these pregnancies; and

23 ‘‘(4) encourage the formation and maintenance

24 of two-parent families.

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

26 shall not be interpreted to entitle any individual or family
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1 to assistance under any State program funded under this

2 part.

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

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

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

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

7 fiscal year, has submitted to the Secretary a plan that the

8 Secretary has found includes the following:

9 ‘‘(1) OUTLINE OF FAMILY ASSISTANCE PRO10 GRAM.—

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

12 document that outlines how the State intends to

13 do the following:

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

15 serve all political subdivisions in the State

16 (not necessarily in a uniform manner),

17 that provides assistance to needy families

18 with (or expecting) children and provides

19 parents with job preparation, work, and

20 support services to enable them to leave

21 the program and become self-sufficient.

22 ‘‘(ii) Require a parent or caretaker re23 ceiving assistance under the program to

24 engage in work (as defined by the State)

25 once the State determines the parent or
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1 caretaker is ready to engage in work, or

2 once the parent or caretaker has received

3 assistance under the program for 24

4 months (whether or not consecutive),

5 whichever is earlier.

6 ‘‘(iii) Ensure that parents and care7 takers receiving assistance under the pro8 gram engage in work activities in accord9 ance with section 407.

10 ‘‘(iv) Take such reasonable steps as

11 the State deems necessary to restrict the

12 use and disclosure of information about in13 dividuals and families receiving assistance

14 under the program attributable to funds

15 provided by the Federal Government.

16 ‘‘(v) Establish goals and take action

17 to prevent and reduce the incidence of out18 of-wedlock pregnancies, with special em19 phasis on teenage pregnancies, and estab20 lish numerical goals for reducing the ille21 gitimacy ratio of the State (as defined in

22 section 403(a)(2)(B)) for calendar years

23 1996 through 2005.

24 ‘‘(vi) Determine, on an objective and

25 equitable basis, the needs of and the
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1 amount of assistance to be provided to

2 needy families, and, except as provided in

3 subparagraph (B), treat families of similar

4 needs and circumstances similarly.

5 ‘‘(vii) Grant an opportunity for a fair

6 hearing before the appropriate State agen7 cy to any individual to whom assistance

8 under the program is denied, reduced, or

9 terminated, or whose request for such as10 sistance is not acted on with reasonable

11 promptness.

12 ‘‘(B) SPECIAL PROVISIONS.—

13 ‘‘(i) The document shall indicate

14 whether the State intends to treat families

15 moving into the State from another State

16 differently than other families under the

17 program, and if so, how the State intends

18 to treat such families under the program.

19 ‘‘(ii) The document shall indicate

20 whether the State intends to provide as21 sistance under the program to individuals

22 who are not citizens of the United States,

23 and if so, shall include an overview of such

24 assistance.
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1 ‘‘(2) CERTIFICATION THAT THE STATE WILL

2 OPERATE A CHILD SUPPORT ENFORCEMENT PRO3 GRAM.—A certification by the chief executive officer

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

5 will operate a child support enforcement program

6 under the State plan approved under part D.

7 ‘‘(3) CERTIFICATION THAT THE STATE WILL

8 OPERATE A FOSTER CARE AND ADOPTION ASSIST9 ANCE PROGRAM.—A certification by the chief execu10 tive officer of the State that, during the fiscal year,

11 the State will operate a foster care and adoption as12 sistance program under the State plan approved

13 under part E, and that the State will take such ac14 tions as are necessary to ensure that children receiv15 ing assistance under such part are eligible for medi16 cal assistance under the State plan under title XIX

17 (or XV, if applicable).

18 ‘‘(4) CERTIFICATION OF THE ADMINISTRATION

19 OF THE PROGRAM.—A certification by the chief ex20 ecutive officer of the State specifying which State

21 agency or agencies will administer and supervise the

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

23 year, which shall include assurances that local gov24 ernments and private sector organizations—
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1 ‘‘(A) have been consulted regarding the

2 plan and design of welfare services in the State

3 so that services are provided in a manner ap4 propriate to local populations; and

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

6 comments on the plan and the design of such

7 services.

8 ‘‘(5) CERTIFICATION THAT THE STATE WILL

9 PROVIDE INDIANS WITH EQUITABLE ACCESS TO AS10 SISTANCE.—A certification by the chief executive of11 ficer of the State that, during the fiscal year, the

12 State will provide each Indian who is a member of

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

14 tribal family assistance plan approved under section

15 412 with equitable access to assistance under the

16 State program funded under this part attributable

17 to funds provided by the Federal Government.

18 ‘‘(6) CERTIFICATION OF STANDARDS AND PRO19 CEDURES TO ENSURE AGAINST PROGRAM FRAUD

20 AND ABUSE.—A certification by the chief executive

21 officer of the State that the State has established

22 and is enforcing standards and procedures to ensure

23 against program fraud and abuse, including stand24 ards and procedures concerning nepotism, conflicts

25 of interest among individuals responsible for the ad-
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•S 1956 PCS

1 ministration and supervision of the State program,

2 kickbacks, and the use of political patronage.

3 ‘‘(b) PUBLIC AVAILABILITY OF STATE PLAN SUM4 MARY.—The State shall make available to the public a

5 summary of any plan submitted by the State under this

6 section.

7 ‘‘SEC. 403. GRANTS TO STATES.

8 ‘‘(a) GRANTS.—

9 ‘‘(1) FAMILY ASSISTANCE GRANT.—

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

11 shall be entitled to receive from the Secretary,

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

13 1999, 2000, and 2001 a grant in an amount

14 equal to the State family assistance grant.

15 ‘‘(B) STATE FAMILY ASSISTANCE GRANT

16 DEFINED.—As used in this part, the term

17 ‘State family assistance grant’ means the great18 est of—

‘‘(i) 1 19 ⁄3 of the total amount required

20 to be paid to the State under former sec21 tion 403 (as in effect on September 30,

22 1995) for fiscal years 1992, 1993, and

23 1994 (other than with respect to amounts

24 expended by the State for child care under
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•S 1956 PCS

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

2 (as so in effect));

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

4 be paid to the State under former section

5 403 for fiscal year 1994 (other than with

6 respect to amounts expended by the State

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

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

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

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

11 amount required to be paid to the State

12 under former section 403(a)(5) for emer13 gency assistance for fiscal year 1995 ex14 ceeds the total amount required to be paid

15 to the State under former section

16 403(a)(5) for fiscal year 1994, if, during

17 fiscal year 1994 or 1995, the Secretary ap18 proved under former section 402 an

19 amendment to the former State plan to

20 allow the provision of emergency assistance

21 in the context of family preservation; or

‘‘(iii) 4 22 ⁄3 of the total amount required

23 to be paid to the State under former sec24 tion 403 (as in effect on September 30,

25 1995) for the 1st 3 quarters of fiscal year
198

•S 1956 PCS

1 1995 (other than with respect to amounts

2 expended by the State under the State

3 plan approved under part F (as so in ef4 fect) or for child care under subsection (g)

5 or (i) of former section 402 (as so in ef6 fect)), plus the total amount required to be

7 paid to the State for fiscal year 1995

8 under former section 403(l) (as so in ef9 fect).

10 ‘‘(C) TOTAL AMOUNT REQUIRED TO BE

11 PAID TO THE STATE UNDER FORMER SECTION

12 403 DEFINED.—As used in this part, the term

13 ‘total amount required to be paid to the State

14 under former section 403’ means, with respect

15 to a fiscal year—

16 ‘‘(i) in the case of a State to which

17 section 1108 does not apply, the sum of—

18 ‘‘(I) the Federal share of mainte19 nance assistance expenditures for the

20 fiscal year, before reduction pursuant

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

22 403(b)(2) (as in effect on September

23 30, 1995), as reported by the State on

24 ACF Form 231;
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•S 1956 PCS

1 ‘‘(II) the Federal share of admin2 istrative expenditures (including ad3 ministrative expenditures for the de4 velopment of management information

5 systems) for the fiscal year, as re6 ported by the State on ACF Form

7 231;

8 ‘‘(III) the Federal share of emer9 gency assistance expenditures for the

10 fiscal year, as reported by the State

11 on ACF Form 231;

12 ‘‘(IV) the Federal share of ex13 penditures for the fiscal year with re14 spect to child care pursuant to sub15 sections (g) and (i) of former section

16 402 (as in effect on September 30,

17 1995), as reported by the State on

18 ACF Form 231; and

19 ‘‘(V) the aggregate amount re20 quired to be paid to the State for the

21 fiscal year with respect to the State

22 program operated under part F (as in

23 effect on September 30, 1995), as de24 termined by the Secretary, including

25 additional obligations or reductions in
200

•S 1956 PCS

1 obligations made after the close of the

2 fiscal year; and

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

4 section 1108 applies, the lesser of—

5 ‘‘(I) the sum described in clause

6 (i); or

7 ‘‘(II) the total amount certified

8 by the Secretary under former section

9 403 (as in effect during the fiscal

10 year) with respect to the territory.

11 ‘‘(D) INFORMATION TO BE USED IN DE12 TERMINING AMOUNTS.—

13 ‘‘(i) FOR FISCAL YEARS 1992 AND

14 1993.—

15 ‘‘(I) In determining the amounts

16 described in subclauses (I) through

17 (IV) of subparagraph (C)(i) for any

18 State for each of fiscal years 1992

19 and 1993, the Secretary shall use in20 formation available as of April 28,

21 1995.

22 ‘‘(II) In determining the amount

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

24 for any State for each of fiscal years

25 1992 and 1993, the Secretary shall
201

•S 1956 PCS

1 use information available as of Janu2 ary 6, 1995.

3 ‘‘(ii) FOR FISCAL YEAR 1994.—In de4 termining the amounts described in sub5 paragraph (C)(i) for any State for fiscal

6 year 1994, the Secretary shall use informa7 tion available as of April 28, 1995.

8 ‘‘(iii) FOR FISCAL YEAR 1995.—

9 ‘‘(I) In determining the amount

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

11 for any State for fiscal year 1995, the

12 Secretary shall use the information

13 which was reported by the States and

14 estimates made by the States with re15 spect to emergency assistance expend16 itures and was available as of August

17 11, 1995.

18 ‘‘(II) In determining the amounts

19 described in subclauses (I) through

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

21 State for fiscal year 1995, the Sec22 retary shall use information available

23 as of October 2, 1995.

24 ‘‘(III) In determining the amount

25 described in subparagraph (C)(i)(IV)
202

•S 1956 PCS

1 for any State for fiscal year 1995, the

2 Secretary shall use information avail3 able as of February 28, 1996.

4 ‘‘(IV) In determining the amount

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

6 for any State for fiscal year 1995, the

7 Secretary shall use information avail8 able as of October 5, 1995.

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

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

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

13 2001 such sums as are necessary for grants

14 under this paragraph.

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

16 OUT-OF-WEDLOCK BIRTHS.—

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

18 shall be entitled to receive from the Secretary

19 for fiscal year 1998 or any succeeding fiscal

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

21 family assistance grant multiplied by—

22 ‘‘(i) 5 percent if—

23 ‘‘(I) the illegitimacy ratio of the

24 State for the fiscal year is at least 1

25 percentage point lower than the ille-
203

•S 1956 PCS

1 gitimacy ratio of the State for fiscal

2 year 1995; and

3 ‘‘(II) the rate of induced preg4 nancy terminations in the State for

5 the fiscal year is less than the rate of

6 induced pregnancy terminations in the

7 State for fiscal year 1995; or

8 ‘‘(ii) 10 percent if—

9 ‘‘(I) the illegitimacy ratio of the

10 State for the fiscal year is at least 2

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

13 year 1995; and

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

16 the fiscal year is less than the rate of

17 induced pregnancy terminations in the

18 State for fiscal year 1995.

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

20 this paragraph, the term ‘illegitimacy ratio’

21 means, with respect to a State and a fiscal

22 year—

23 ‘‘(i) the number of out-of-wedlock

24 births that occurred in the State during
204

•S 1956 PCS

1 the most recent fiscal year for which such

2 information is available; divided by

3 ‘‘(ii) the number of births that oc4 curred in the State during the most recent

5 fiscal year for which such information is

6 available.

7 ‘‘(C) DISREGARD OF CHANGES IN DATA

8 DUE TO CHANGED REPORTING METHODS.—For

9 purposes of subparagraph (A), the Secretary

10 shall disregard—

11 ‘‘(i) any difference between the illegit12 imacy ratio of a State for a fiscal year and

13 the illegitimacy ratio of the State for fiscal

14 year 1995 which is attributable to a

15 change in State methods of reporting data

16 used to calculate the illegitimacy ratio; and

17 ‘‘(ii) any difference between the rate

18 of induced pregnancy terminations in a

19 State for a fiscal year and such rate for

20 fiscal year 1995 which is attributable to a

21 change in State methods of reporting data

22 used to calculate such rate.

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

24 in the Treasury of the United States not other25 wise appropriated, there are appropriated for
205

•S 1956 PCS

1 fiscal year 1998 and for each succeeding fiscal

2 year such sums as are necessary for grants

3 under this paragraph.

4 ‘‘(3) SUPPLEMENTAL GRANT FOR POPULATION

5 INCREASES IN CERTAIN STATES.—

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

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

8 to receive from the Secretary—

9 ‘‘(i) for fiscal year 1998 a grant in an

10 amount equal to 2.5 percent of the total

11 amount required to be paid to the State

12 under former section 403 (as in effect dur13 ing fiscal year 1994) for fiscal year 1994;

14 and

15 ‘‘(ii) for each of fiscal years 1999,

16 2000, and 2001, a grant in an amount

17 equal to the sum of—

18 ‘‘(I) the amount (if any) required

19 to be paid to the State under this

20 paragraph for the immediately preced21 ing fiscal year; and

22 ‘‘(II) 2.5 percent of the sum of—

23 ‘‘(aa) the total amount re24 quired to be paid to the State

25 under former section 403 (as in
206

•S 1956 PCS

1 effect during fiscal year 1994)

2 for fiscal year 1994; and

3 ‘‘(bb) the amount (if any)

4 required to be paid to the State

5 under this paragraph for the fis6 cal year preceding the fiscal year

7 for which the grant is to be

8 made.

9 ‘‘(B) PRESERVATION OF GRANT WITHOUT

10 INCREASES FOR STATES FAILING TO REMAIN

11 QUALIFYING STATES.—Each State that is not a

12 qualifying State for a fiscal year specified in

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

14 for a prior fiscal year shall, subject to subpara15 graph (F), be entitled to receive from the Sec16 retary for the specified fiscal year, a grant in

17 an amount equal to the amount required to be

18 paid to the State under this paragraph for the

19 most recent fiscal year for which the State was

20 a qualifying State.

21 ‘‘(C) QUALIFYING STATE.—

22 ‘‘(i) IN GENERAL.—For purposes of

23 this paragraph, a State is a qualifying

24 State for a fiscal year if—
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•S 1956 PCS

1 ‘‘(I) the level of welfare spending

2 per poor person by the State for the

3 immediately preceding fiscal year is

4 less than the national average level of

5 State welfare spending per poor per6 son for such preceding fiscal year; and

7 ‘‘(II) the population growth rate

8 of the State (as determined by the

9 Bureau of the Census) for the most

10 recent fiscal year for which informa11 tion is available exceeds the average

12 population growth rate for all States

13 (as so determined) for such most re14 cent fiscal year.

15 ‘‘(ii) STATE MUST QUALIFY IN FISCAL

16 YEAR 1998.—Notwithstanding clause (i), a

17 State shall not be a qualifying State for

18 any fiscal year after 1998 by reason of

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

20 State for fiscal year 1998 by reason of

21 clause (i).

22 ‘‘(iii) CERTAIN STATES DEEMED

23 QUALIFYING STATES.—For purposes of

24 this paragraph, a State is deemed to be a
208

•S 1956 PCS

1 qualifying State for fiscal years 1998,

2 1999, 2000, and 2001 if—

3 ‘‘(I) the level of welfare spending

4 per poor person by the State for fiscal

5 year 1997 is less than 35 percent of

6 the national average level of State

7 welfare spending per poor person for

8 fiscal year 1996; or

9 ‘‘(II) the population of the State

10 increased by more than 10 percent

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

12 according to the population estimates

13 in publication CB94-204 of the Bu14 reau of the Census.

15 ‘‘(D) DEFINITIONS.—As used in this para16 graph:

17 ‘‘(i) LEVEL OF WELFARE SPENDING

18 PER POOR PERSON.—The term ‘level of

19 State welfare spending per poor person’

20 means, with respect to a State and a fiscal

21 year—

22 ‘‘(I) the sum of—

23 ‘‘(aa) the total amount re24 quired to be paid to the State

25 under former section 403 (as in
209

•S 1956 PCS

1 effect during fiscal year 1994)

2 for fiscal year 1994; and

3 ‘‘(bb) the amount (if any)

4 paid to the State under this

5 paragraph for the immediately

6 preceding fiscal year; divided by

7 ‘‘(II) the number of individuals,

8 according to the 1990 decennial cen9 sus, who were residents of the State

10 and whose income was below the pov11 erty line.

12 ‘‘(ii) NATIONAL AVERAGE LEVEL OF

13 STATE WELFARE SPENDING PER POOR

14 PERSON.—The term ‘national average level

15 of State welfare spending per poor person’

16 means, with respect to a fiscal year, an

17 amount equal to—

18 ‘‘(I) the total amount required to

19 be paid to the States under former

20 section 403 (as in effect during fiscal

21 year 1994) for fiscal year 1994; di22 vided by

23 ‘‘(II) the number of individuals,

24 according to the 1990 decennial cen25 sus, who were residents of any State
210

•S 1956 PCS

1 and whose income was below the pov2 erty line.

3 ‘‘(iii) STATE.—The term ‘State’

4 means each of the 50 States of the United

5 States and the District of Columbia.

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

7 in the Treasury of the United States not other8 wise appropriated, there are appropriated for

9 fiscal years 1998, 1999, 2000, and 2001 such

10 sums as are necessary for grants under this

11 paragraph, in a total amount not to exceed

12 $800,000,000.

13 ‘‘(F) GRANTS REDUCED PRO RATA IF IN14 SUFFICIENT APPROPRIATIONS.—If the amount

15 appropriated pursuant to this paragraph for a

16 fiscal year is less than the total amount of pay17 ments otherwise required to be made under this

18 paragraph for the fiscal year, then the amount

19 otherwise payable to any State for the fiscal

20 year under this paragraph shall be reduced by

21 a percentage equal to the amount so appro22 priated divided by such total amount.

23 ‘‘(G) BUDGET SCORING.—Notwithstanding

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

25 Emergency Deficit Control Act of 1985, the
211

•S 1956 PCS

1 baseline shall assume that no grant shall be

2 made under this paragraph after fiscal year

3 2000.

4 ‘‘(4) BONUS TO REWARD HIGH PERFORMANCE

5 STATES.—

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

7 make a grant pursuant to this paragraph to

8 each State for each bonus year for which the

9 State is a high performing State.

10 ‘‘(B) AMOUNT OF GRANT.—

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

12 (ii) of this subparagraph, the Secretary

13 shall determine the amount of the grant

14 payable under this paragraph to a high

15 performing State for a bonus year, which

16 shall be based on the score assigned to the

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

18 fiscal year that immediately precedes the

19 bonus year.

20 ‘‘(ii) LIMITATION.—The amount pay21 able to a State under this paragraph for a

22 bonus year shall not exceed 5 percent of

23 the State family assistance grant.

24 ‘‘(C) FORMULA FOR MEASURING STATE

25 PERFORMANCE.—Not later than 1 year after
212

•S 1956 PCS

1 the date of the enactment of the Personal Re2 sponsibility and Work Opportunity Act of 1996,

3 the Secretary, in consultation with the National

4 Governors’ Association and the American Pub5 lic Welfare Association, shall develop a formula

6 for measuring State performance in operating

7 the State program funded under this part so as

8 to achieve the goals set forth in section 401(a).

9 Such formula shall emphasize the extent to

10 which the State increases the number of fami11 lies that become ineligible for assistance under

12 the State program funded under this part as a

13 result of unsubsidized employment.

14 ‘‘(D) SCORING OF STATE PERFORMANCE;

15 SETTING OF PERFORMANCE THRESHOLDS.—

16 For each bonus year, the Secretary shall—

17 ‘‘(i) use the formula developed under

18 subparagraph (C) to assign a score to each

19 eligible State for the fiscal year that imme20 diately precedes the bonus year; and

21 ‘‘(ii) prescribe a performance thresh22 old in such a manner so as to ensure

23 that—

24 ‘‘(I) the average annual total

25 amount of grants to be made under
213

•S 1956 PCS

1 this paragraph for each bonus year

2 equals the amount specified for such

3 bonus year in subparagraph (E)(ii);

4 and

5 ‘‘(II) the total amount of grants

6 to be made under this paragraph for

7 all bonus years equals

8 $1,000,000,000.

9 ‘‘(E) DEFINITIONS.—As used in this para10 graph:

11 ‘‘(i) BONUS YEAR.—The term ‘bonus

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

13 2002, and 2003.

14 ‘‘(ii) THE AMOUNT SPECIFIED FOR

15 SUCH BONUS YEAR.—The term ‘the

16 amount specified for such bonus year’

17 means the following:

18 ‘‘(I) For fiscal years 1999, 2000,

19 2001, and 2002, $175,000,000.

20 ‘‘(II) For fiscal year 2003,

21 $300,000,000.

22 ‘‘(iii) HIGH PERFORMING STATE.—

23 The term ‘high performing State’ means,

24 with respect a bonus year, an eligible State

25 whose score assigned pursuant to subpara-
214

•S 1956 PCS

1 graph (D)(i) for the fiscal year imme2 diately preceding the bonus year equals or

3 exceeds the performance threshold pre4 scribed under subparagraph (D)(ii) for

5 such preceding fiscal year.

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

7 in the Treasury of the United States not other8 wise appropriated, there are appropriated for

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

10 for grants under this paragraph.

11 ‘‘(b) CONTINGENCY FUND.—

12 ‘‘(1) ESTABLISHMENT.—There is hereby estab13 lished in the Treasury of the United States a fund

14 which shall be known as the ‘Contingency Fund for

15 State Welfare Programs’ (in this section referred to

16 as the ‘Fund’).

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

18 in the Treasury of the United States not otherwise

19 appropriated, there are appropriated for fiscal years

20 1998, 1999, 2000, and 2001 such sums as are nec21 essary for payment to the Fund in a total amount

22 not to exceed $2,000,000,000.

23 ‘‘(3) GRANTS.—

24 ‘‘(A) PROVISIONAL PAYMENTS.—If an eli25 gible State submits to the Secretary a request
215

•S 1956 PCS

1 for funds under this paragraph during an eligi2 ble month, the Secretary shall, subject to this

3 paragraph, pay to the State, from amounts ap4 propriated pursuant to paragraph (2), an

5 amount equal to the amount of funds so re6 quested.

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

8 shall make payments under subparagraph (A)

9 in the order in which the Secretary receives re10 quests for such payments.

11 ‘‘(C) LIMITATIONS.—

12 ‘‘(i) MONTHLY PAYMENT TO A

13 STATE.—The total amount paid to a single

14 State under subparagraph (A) during a

month shall not exceed 1 15 ⁄12 of 20 percent

16 of the State family assistance grant.

17 ‘‘(ii) PAYMENTS TO ALL STATES.—

18 The total amount paid to all States under

19 subparagraph (A) during fiscal years 1998

20 through 2001 shall not exceed the total

21 amount appropriated pursuant to para22 graph (2).

23 ‘‘(4) ANNUAL RECONCILIATION.—Notwithstand24 ing paragraph (3), at the end of each fiscal year,

25 each State shall remit to the Secretary an amount
216

•S 1956 PCS

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

2 amount paid to the State under paragraph (3) dur3 ing the fiscal year exceeds—

4 ‘‘(A) the Federal medical assistance per5 centage for the State for the fiscal year (as de6 fined in section 1905(b), as in effect on Sep7 tember 30, 1995) of the amount (if any) by

8 which the expenditures under the State pro9 gram funded under this part for the fiscal year

10 exceed historic State expenditures (as defined in

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

‘‘(B) 1 12 ⁄12 times the number of months dur13 ing the fiscal year for which the Secretary

14 makes a payment to the State under this sub15 section.

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

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

18 to a State, a month in the 2-month period that be19 gins with any month for which the State is a needy

20 State.

21 ‘‘(6) NEEDY STATE.—For purposes of para22 graph (5), a State is a needy State for a month if—

23 ‘‘(A) the average rate of—

24 ‘‘(i) total unemployment in such State

25 (seasonally adjusted) for the period con-
217

•S 1956 PCS

1 sisting of the most recent 3 months for

2 which data for all States are published

3 equals or exceeds 6.5 percent; and

4 ‘‘(ii) total unemployment in such

5 State (seasonally adjusted) for the 3-

6 month period equals or exceeds 110 per7 cent of such average rate for either (or

8 both) of the corresponding 3-month periods

9 ending in the 2 preceding calendar years;

10 or

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

12 Agriculture (in the discretion of the Secretary

13 of Agriculture), the monthly average number of

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

15 participating in the food stamp program in the

16 State in the then most recently concluded 3-

17 month period for which data are available ex18 ceeds by not less than 10 percent the lesser

19 of—

20 ‘‘(i) the monthly average number of

21 individuals (as of the last day of each

22 month) in the State that would have par23 ticipated in the food stamp program in the

24 corresponding 3-month period in fiscal

25 year 1994 if the amendments made by
218

•S 1956 PCS

1 chapter 4 of the Personal Responsibility

2 and Work Opportunity Act of 1996 and

3 the amendments made by chapter 1 of sub4 title A of title I of the Agricultural Rec5 onciliation Act of 1996 had been in effect

6 throughout fiscal year 1994; or

7 ‘‘(ii) the monthly average number of

8 individuals (as of the last day of each

9 month) in the State that would have par10 ticipated in the food stamp program in the

11 corresponding 3-month period in fiscal

12 year 1995 if the amendments made by

13 chapter 4 of the Personal Responsibility

14 and Work Opportunity Act of 1996 and

15 the amendments made by chapter 1 of sub16 title A of title I of the Agricultural Rec17 onciliation Act of 1996 had been in effect

18 throughout fiscal year 1995.

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

20 subsection:

21 ‘‘(A) STATE.—The term ‘State’ means

22 each of the 50 States of the United States and

23 the District of Columbia.

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

25 means the Secretary of the Treasury.
219

•S 1956 PCS

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

2 annually report to the Congress on the status of the

3 Fund.

4 ‘‘(9) BUDGET SCORING.—Notwithstanding sec5 tion 257(b)(2) of the Balanced Budget and Emer6 gency Deficit Control Act of 1985, the baseline shall

7 assume that no grant shall be made under this sub8 section after fiscal year 2001.

9 ‘‘SEC. 404. USE OF GRANTS.

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

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

12 grant—

13 ‘‘(1) in any manner that is reasonably cal14 culated to accomplish the purpose of this part, in15 cluding to provide low income households with as16 sistance in meeting home heating and cooling costs;

17 or

18 ‘‘(2) in any manner that the State was author19 ized to use amounts received under part A or F, as

20 such parts were in effect on September 30, 1995.

21 ‘‘(b) LIMITATION ON USE OF GRANT FOR ADMINIS22 TRATIVE PURPOSES.—

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

24 made under section 403 shall not expend more than

25 15 percent of the grant for administrative purposes.
220

•S 1956 PCS

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

2 apply to the use of a grant for information tech3 nology and computerization needed for tracking or

4 monitoring required by or under this part.

5 ‘‘(c) AUTHORITY TO TREAT INTERSTATE IMMI6 GRANTS UNDER RULES OF FORMER STATE.—A State op7 erating a program funded under this part may apply to

8 a family the rules (including benefit amounts) of the pro9 gram funded under this part of another State if the family

10 has moved to the State from the other State and has re11 sided in the State for less than 12 months.

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

13 OTHER PURPOSES.—

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

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

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

17 out a State program pursuant to the Child Care and

18 Development Block Grant Act of 1990.

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

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

21 a State program pursuant to a provision of law spec22 ified or described in paragraph (1) shall not be sub23 ject to the requirements of this part, but shall be

24 subject to the requirements that apply to Federal
221

•S 1956 PCS

1 funds provided directly under the provision of law to

2 carry out the program.

3 ‘‘(e) AUTHORITY TO RESERVE CERTAIN AMOUNTS

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

5 the State under this part for any fiscal year for the pur6 pose of providing, without fiscal year limitation, assistance

7 under the State program funded under this part.

8 ‘‘(f) AUTHORITY TO OPERATE EMPLOYMENT PLACE9 MENT PROGRAM.—A State to which a grant is made under

10 section 403 may use the grant to make payments (or pro11 vide job placement vouchers) to State-approved public and

12 private job placement agencies that provide employment

13 placement services to individuals who receive assistance

14 under the State program funded under this part.

15 ‘‘(g) IMPLEMENTATION OF ELECTRONIC BENEFIT

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

17 under section 403 is encouraged to implement an elec18 tronic benefit transfer system for providing assistance

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

20 use the grant for such purpose.

21 ‘‘SEC. 405. ADMINISTRATIVE PROVISIONS.

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

23 grant payable to a State under section 403 in quarterly

24 installments.
222

•S 1956 PCS

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

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

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

4 reduction determined under section 412(a)(1)(B) with re5 spect to the State.

6 ‘‘(c) COMPUTATION AND CERTIFICATION OF PAY7 MENTS TO STATES.—

8 ‘‘(1) COMPUTATION.—The Secretary shall esti9 mate the amount to be paid to each eligible State for

10 each quarter under this part, such estimate to be

11 based on a report filed by the State containing an

12 estimate by the State of the total sum to be ex13 pended by the State in the quarter under the State

14 program funded under this part and such other in15 formation as the Secretary may find necessary.

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

17 and Human Services shall certify to the Secretary of

18 the Treasury the amount estimated under paragraph

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

20 the extent of any overpayment or underpayment

21 which the Secretary of Health and Human Services

22 determines was made under this part to the State

23 for any prior quarter and with respect to which ad24 justment has not been made under this paragraph.
223

•S 1956 PCS

1 ‘‘(d) PAYMENT METHOD.—Upon receipt of a certifi2 cation under subsection (c)(2) with respect to a State, the

3 Secretary of the Treasury shall, through the Fiscal Service

4 of the Department of the Treasury and before audit or

5 settlement by the General Accounting Office, pay to the

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

7 Health and Human Services, the amount so certified.

8 ‘‘(e) COLLECTION OF STATE OVERPAYMENTS TO

9 FAMILIES FROM FEDERAL TAX REFUNDS.—

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

11 the Secretary of Health and Human Services that a

12 State agency administering a program funded under

13 this part has notified the Secretary that a named in14 dividual has been overpaid under the State program

15 funded under this part, the Secretary of the Treas16 ury shall determine whether any amounts as refunds

17 of Federal taxes paid are payable to such individual,

18 regardless of whether the individual filed a tax re19 turn as a married or unmarried individual. If the

20 Secretary of the Treasury finds that any such

21 amount is so payable, the Secretary shall withhold

22 from such refunds an amount equal to the overpay23 ment sought to be collected by the State and pay

24 such amount to the State agency.
224

•S 1956 PCS

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

2 Treasury shall issue regulations, after review by the

3 Secretary of Health and Human Services, that pro4 vide—

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

6 paragraph (1) requests for collection of over7 payments with respect to individuals—

8 ‘‘(i) who are no longer receiving as9 sistance under the State program funded

10 under this part;

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

12 has already taken appropriate action under

13 State law against the income or resources

14 of the individuals or families involved to

15 collect the past-due legally enforceable

16 debt; and

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

18 given notice of its intent to request with19 holding by the Secretary of the Treasury

20 from the income tax refunds of such indi21 viduals;

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

23 will give a timely and appropriate notice to any

24 other person filing a joint return with the indi-
225

•S 1956 PCS

1 vidual whose refund is subject to withholding

2 under paragraph (1); and

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

4 Secretary of the Treasury will follow in carrying

5 out this subsection which, to the maximum ex6 tent feasible and consistent with the provisions

7 of this subsection, will be the same as those is8 sued pursuant to section 464(b) applicable to

9 collection of past-due child support.

10 ‘‘SEC. 406. FEDERAL LOANS FOR STATE WELFARE PRO11 GRAMS.

12 ‘‘(a) LOAN AUTHORITY.—

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

14 loans to any loan-eligible State, for a period to ma15 turity of not more than 3 years.

16 ‘‘(2) LOAN-ELIGIBLE STATE.—As used in para17 graph (1), the term ‘loan-eligible State’ means a

18 State against which a penalty has not been imposed

19 under section 409(a)(1).

20 ‘‘(b) RATE OF INTEREST.—The Secretary shall

21 charge and collect interest on any loan made under this

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

23 on outstanding marketable obligations of the United

24 States with remaining periods to maturity comparable to

25 the period to maturity of the loan.
226

•S 1956 PCS

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

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

3 which grant amounts received by the State under section

4 403(a) may be used, including—

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

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

7 program to Indian families that have moved from

8 the service area of an Indian tribe with a tribal fam9 ily assistance plan approved under section 412.

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

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

12 made to a State under this section during fiscal years

13 1997 through 2001 shall not exceed 10 percent of the

14 State family assistance grant.

15 ‘‘(e) LIMITATION ON TOTAL AMOUNT OF OUTSTAND16 ING LOANS.—The total dollar amount of loans outstand17 ing under this section may not exceed $1,700,000,000.

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

19 Treasury of the United States not otherwise appropriated,

20 there are appropriated such sums as may be necessary for

21 the cost of loans under this section.

22 ‘‘SEC. 407. MANDATORY WORK REQUIREMENTS.

23 ‘‘(a) PARTICIPATION RATE REQUIREMENTS.—

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

25 is made under section 403 for a fiscal year shall
227

•S 1956 PCS

1 achieve the minimum participation rate specified in

2 the following table for the fiscal year with respect to

3 all families receiving assistance under the State pro4 gram funded under this part:

The minimum

participation

‘‘If the fiscal year is: rate is:

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

1997 ............................................................... 25

1998 ............................................................... 30

1999 ............................................................... 35

2000 ............................................................... 40

2001 ............................................................... 45

2002 and thereafter ....................................... 50.

5 ‘‘(2) 2-PARENT FAMILIES.—A State to which a

6 grant is made under section 403 for a fiscal year

7 shall achieve the minimum participation rate speci8 fied in the following table for the fiscal year with re9 spect to 2-parent families receiving assistance under

10 the State program funded under this part:

The minimum

participation

‘‘If the fiscal year is: rate is:

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

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

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

1999 and thereafter ....................................... 90.

11 ‘‘(b) CALCULATION OF PARTICIPATION RATES.—

12 ‘‘(1) ALL FAMILIES.—

13 ‘‘(A) AVERAGE MONTHLY RATE.—For pur14 poses of subsection (a)(1), the participation

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

16 is the average of the participation rates for all
228

•S 1956 PCS

1 families of the State for each month in the fis2 cal year.

3 ‘‘(B) MONTHLY PARTICIPATION RATES.—

4 The participation rate of a State for all families

5 of the State for a month, expressed as a per6 centage, is—

7 ‘‘(i) the number of families receiving

8 assistance under the State program funded

9 under this part that include an adult who

10 is engaged in work for the month; divided

11 by

12 ‘‘(ii) the amount by which—

13 ‘‘(I) the number of families re14 ceiving such assistance during the

15 month that include an adult receiving

16 such assistance; exceeds

17 ‘‘(II) the number of families re18 ceiving such assistance that are sub19 ject in such month to a penalty de20 scribed in subsection (e)(1) but have

21 not been subject to such penalty for

22 more than 3 months within the pre23 ceding 12-month period (whether or

24 not consecutive).

25 ‘‘(2) 2-PARENT FAMILIES.—
229

•S 1956 PCS

1 ‘‘(A) AVERAGE MONTHLY RATE.—For pur2 poses of subsection (a)(2), the participation

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

4 year is the average of the participation rates for

5 2-parent families of the State for each month in

6 the fiscal year.

7 ‘‘(B) MONTHLY PARTICIPATION RATES.—

8 The participation rate of a State for 2-parent

9 families of the State for a month shall be cal10 culated by use of the formula set forth in para11 graph (1)(B), except that in the formula the

12 term ‘number of 2-parent families’ shall be sub13 stituted for the term ‘number of families’ each

14 place such latter term appears.

15 ‘‘(3) PRO RATA REDUCTION OF PARTICIPATION

16 RATE DUE TO CASELOAD REDUCTIONS NOT RE17 QUIRED BY FEDERAL LAW.—

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

19 prescribe regulations for reducing the minimum

20 participation rate otherwise required by this

21 section for a fiscal year by the number of per22 centage points equal to the number of percent23 age points (if any) by which—

24 ‘‘(i) the average monthly number of

25 families receiving assistance during the fis-
230

•S 1956 PCS

1 cal year under the State program funded

2 under this part is less than

3 ‘‘(ii) the average monthly number of

4 families that received aid under the State

5 plan approved under part A (as in effect

6 on September 30, 1995) during fiscal year

7 1995.

8 The minimum participation rate shall not be re9 duced to the extent that the Secretary deter10 mines that the reduction in the number of fami11 lies receiving such assistance is required by

12 Federal law.

13 ‘‘(B) ELIGIBILITY CHANGES NOT COUNT14 ED.—The regulations described in subpara15 graph (A) shall not take into account families

16 that are diverted from a State program funded

17 under this part as a result of differences in eli18 gibility criteria under a State program funded

19 under this part and eligibility criteria under the

20 State program operated under the State plan

21 approved under part A (as such plan and such

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

23 Such regulations shall place the burden on the

24 Secretary to prove that such families were di-
231

•S 1956 PCS

1 verted as a direct result of differences in such

2 eligibility criteria.

3 ‘‘(4) STATE OPTION TO INCLUDE INDIVIDUALS

4 RECEIVING ASSISTANCE UNDER A TRIBAL FAMILY

5 ASSISTANCE PLAN.—For purposes of paragraphs

6 (1)(B) and (2)(B), a State may, at its option, in7 clude families receiving assistance under a tribal

8 family assistance plan approved under section 412.

9 ‘‘(5) STATE OPTION FOR PARTICIPATION RE10 QUIREMENT EXEMPTIONS.—

11 ‘‘(A) IN GENERAL.—For any fiscal year, a

12 State may, at its option, not require an individ13 ual who is a single custodial parent caring for

14 a child who has not attained 12 months of age

15 to engage in work and may disregard such an

16 individual in determining the participation rates

17 under subsection (a).

18 ‘‘(B) LIMITATION.—The exemption de19 scribed in subparagraph (A) may only be ap20 plied to a single custodial parent for a total of

21 12 months (whether or not consecutive).

22 ‘‘(c) ENGAGED IN WORK.—

23 ‘‘(1) ALL FAMILIES.—For purposes of sub24 section (b)(1)(B)(i), a recipient is engaged in work

25 for a month in a fiscal year if the recipient is par-
232

•S 1956 PCS

1 ticipating in work activities for at least the minimum

2 average number of hours per week specified in the

3 following table during the month, not fewer than 20

4 hours per week of which are attributable to an activ5 ity described in paragraph (1), (2), (3), (4), (5), (6),

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

The minimum

‘‘If the month is average number of

in fiscal year: hours per week is:

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

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

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

1999 ............................................................... 25

2000 ............................................................... 30

2001 ............................................................... 30

2002 and thereafter ....................................... 35.

7 ‘‘(2) 2-PARENT FAMILIES.—For purposes of

8 subsection (b)(2)(B)(i)—

9 ‘‘(A) an adult is engaged in work for a

10 month in a fiscal year if the adult is making

11 progress in work activities for at least 35 hours

12 per week during the month, not fewer than 30

13 hours per week of which are attributable to an

14 activity described in paragraph (1), (2), (3),

15 (4), (5), (6), (7), or (8) of subsection (d); and

16 ‘‘(B) if the family of such adult receives

17 federally-funded child care assistance, if the

18 adult’s spouse is making progress in work ac19 tivities for at least 20 hours per week during

20 the month which are attributable to an activity
233

•S 1956 PCS

1 described in paragraph (1), (2), (3), (4), (5), or

2 (7) of subsection (d).

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

4 WHICH JOB SEARCH COUNTS AS WORK.—Notwith5 standing paragraphs (1) and (2), an individual shall

6 not be considered to be engaged in work by virtue

7 of participation in an activity described in subsection

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

9 an activity for 4 weeks (except if the unemployment

10 rate in the State is above the national average, in

11 which case, 12 weeks) in a fiscal year. An individual

12 shall be considered to be participating in such an ac13 tivity for a week if the individual participates in

14 such an activity at any time during the week.

15 ‘‘(4) LIMITATION ON VOCATIONAL EDUCATION

16 ACTIVITIES COUNTED AS WORK.—For purposes of

17 determining monthly participation rates under para18 graphs (1)(B)(i) and (2)(B)(i) of subsection (b), not

19 more than 20 percent of adults in all families and

20 in 2-parent families determined to be engaged in

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

22 activity requirement through participation in voca23 tional educational training.

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

25 6 DEEMED TO BE MEETING WORK PARTICIPATION
234

•S 1956 PCS

1 REQUIREMENTS IF PARENT IS ENGAGED IN WORK

2 FOR 20 HOURS PER WEEK.—For purposes of deter3 mining monthly participation rates under subsection

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

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

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

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

8 at least 20 hours per week during the month.

9 ‘‘(6) TEEN HEAD OF HOUSEHOLD WHO MAIN10 TAINS SATISFACTORY SCHOOL ATTENDANCE

11 DEEMED TO BE MEETING WORK PARTICIPATION RE12 QUIREMENTS.—For purposes of determining month13 ly participation rates under subsection (b)(1)(B)(i),

14 a recipient who is a single head of household and

15 has not attained 20 years of age is deemed to be en16 gaged in work for a month in a fiscal year if the re17 cipient—

18 ‘‘(A) maintains satisfactory attendance at

19 secondary school or the equivalent during the

20 month; or

21 ‘‘(B) participates in education directly re22 lated to employment for at least the minimum

23 average number of hours per week specified in

24 the table set forth in paragraph (1).
235

•S 1956 PCS

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

2 section, the term ‘work activities’ means—

3 ‘‘(1) unsubsidized employment;

4 ‘‘(2) subsidized private sector employment;

5 ‘‘(3) subsidized public sector employment;

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

7 with the refurbishing of publicly assisted housing) if

8 sufficient private sector employment is not available;

9 ‘‘(5) on-the-job training;

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

11 ‘‘(7) community service programs;

12 ‘‘(8) vocational educational training (not to ex13 ceed 12 months with respect to any individual);

14 ‘‘(9) job skills training directly related to em15 ployment;

16 ‘‘(10) education directly related to employment,

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

18 years of age, and has not received a high school di19 ploma or a certificate of high school equivalency; and

20 ‘‘(11) satisfactory attendance at secondary

21 school, in the case of a recipient who—

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

23 and

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

25 household who has not attained 20 years of age.
236

•S 1956 PCS

1 ‘‘(e) PENALTIES AGAINST INDIVIDUALS.—

2 ‘‘(1) IN GENERAL.—Except as provided in para3 graph (2), if an adult in a family receiving assist4 ance under the State program funded under this

5 part refuses to engage in work required in accord6 ance with this section, the State shall—

7 ‘‘(A) reduce the amount of assistance oth8 erwise payable to the family pro rata (or more,

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

10 period during a month in which the adult so

11 refuses; or

12 ‘‘(B) terminate such assistance,

13 subject to such good cause and other exceptions as

14 the State may establish.

15 ‘‘(2) EXCEPTION.—

16 ‘‘(A) IN GENERAL.—Notwithstanding para17 graph (1), a State may not reduce or terminate

18 assistance under the State program funded

19 under this part based on a refusal of an adult

20 to work if the adult is a single custodial parent

21 caring for a child who has not attained 11 years

22 of age, and the adult proves that the adult has

23 a demonstrated inability (as determined by the

24 State) to obtain needed child care, for 1 or

25 more of the following reasons:
237

•S 1956 PCS

1 ‘‘(i) Unavailability of appropriate

2 child care within a reasonable distance

3 from the individual’s home or work site.

4 ‘‘(ii) Unavailability or unsuitability of

5 informal child care by a relative or under

6 other arrangements.

7 ‘‘(iii) Unavailability of appropriate

8 and affordable formal child care arrange9 ments.

10 ‘‘(B) INCLUDED IN DETERMINATION OF

11 PARTICIPATION RATES.—A State may not dis12 regard an adult for which the exception de13 scribed in subparagraph (A) applies from deter14 mination of the participation rates under sub15 section (a).

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

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

18 an adult in a family receiving assistance under a

19 State program funded under this part attributable to

20 funds provided by the Federal Government may fill

21 a vacant employment position in order to engage in

22 a work activity described in subsection (d).

23 ‘‘(2) NO FILLING OF CERTAIN VACANCIES.—No

24 work assignment to an adult in a family receiving
238

•S 1956 PCS

1 assistance under a State program funded under this

2 part shall result in—

3 ‘‘(A) the displacement of any currently em4 ployed worker (including any partial displace5 ment of such worker through such matters as

6 a reduction in the hours of overtime work,

7 wages, or employment benefits), or in the im8 pairment of any contract for services in exist9 ence as of the date of the enactment of the Per10 sonal Responsibility and Work Opportunity Act

11 of 1996, or in the impairment of any collective

12 bargaining agreement in existence as of such

13 date; and

14 ‘‘(B) the termination of the employment of

15 any regular employee or any other involuntary

16 reduction of an employer’s workforce in order

17 to fill the vacancy so created with an adult de18 scribed in paragraph (1).

19 ‘‘(3) GRIEVANCE PROCEDURE.—A State with a

20 program funded under this part shall establish and

21 maintain a grievance procedure for resolving com22 plaints of alleged violations of the provisions of para23 graph (2) and for providing adequate remedies for

24 any such violations established. The grievance proce-
239

•S 1956 PCS

1 dure established under this paragraph shall include

2 an opportunity for a hearing.

3 ‘‘(4) NO PREEMPTION.—Nothing in this sub4 section shall preempt or supersede any provision of

5 State or local law that provides greater protection

6 for employees from displacement.

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

8 the Congress that in complying with this section, each

9 State that operates a program funded under this part is

10 encouraged to assign the highest priority to requiring

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

12 families that include older preschool or school-age children

13 to be engaged in work activities.

14 ‘‘(h) SENSE OF THE CONGRESS THAT STATES

15 SHOULD IMPOSE CERTAIN REQUIREMENTS ON NON16 CUSTODIAL, NONSUPPORTING MINOR PARENTS.—It is the

17 sense of the Congress that the States should require non18 custodial, nonsupporting parents who have not attained 18

19 years of age to fulfill community work obligations and at20 tend appropriate parenting or money management classes

21 after school.

22 ‘‘SEC. 408. PROHIBITIONS; REQUIREMENTS.

23 ‘‘(a) IN GENERAL.—

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

25 MINOR CHILD.—A State to which a grant is made
240

•S 1956 PCS

1 under section 403 shall not use any part of the

2 grant to provide assistance to a family—

3 ‘‘(A) unless the family includes—

4 ‘‘(i) a minor child who resides with a

5 custodial parent or other adult caretaker

6 relative of the child; or

7 ‘‘(ii) a pregnant individual; and

8 ‘‘(B) if such family includes an adult who

9 has received assistance under any State pro10 gram funded under this part attributable to

11 funds provided by the Federal Government, for

12 60 months (whether or not consecutive) after

13 the date the State program funded under this

14 part commences (unless an exception described

15 in subparagraph (B) or (C) of paragraph (8)

16 applies).

17 ‘‘(2) NO ADDITIONAL CASH ASSISTANCE FOR

18 CHILDREN BORN TO FAMILIES RECEIVING ASSIST19 ANCE.—

20 ‘‘(A) GENERAL RULE.—A State to which a

21 grant is made under section 403 shall not use

22 any part of the grant to provide cash benefits

23 for a minor child who is born to—

24 ‘‘(i) a recipient of assistance under

25 the program operated under this part; or
241

•S 1956 PCS

1 ‘‘(ii) a person who received such as2 sistance at any time during the 10-month

3 period ending with the birth of the child.

4 ‘‘(B) EXCEPTION FOR CHILDREN BORN

5 INTO FAMILIES WITH NO OTHER CHILDREN.—

6 Subparagraph (A) shall not apply to a minor

7 child who is born into a family that does not in8 clude any other children.

9 ‘‘(C) EXCEPTION FOR RAPE OR INCEST.—

10 Subparagraph (A) shall not apply with respect

11 to a child who is born as a result of rape or in12 cest.

13 ‘‘(D) STATE ELECTION TO OPT OUT.—

14 Subparagraph (A) shall not apply to a State if

15 State law specifically exempts the State pro16 gram funded under this part from the applica17 tion of subparagraph (A).

18 ‘‘(E) SUBSTITUTION OF FAMILY CAPS IN

19 EFFECT UNDER WAIVERS OR CURRENT STATE

20 LAW.—Subparagraph (A) shall not apply to a

21 State—

22 ‘‘(i) if, not earlier than 2 years prior

23 to the date of the enactment of this part,

24 the State enacted a law permitting the

25 State to deny aid or assistance to a family
242

•S 1956 PCS

1 by reason of the birth of a child to a fam2 ily member otherwise eligible for such aid

3 or assistance; or

4 ‘‘(ii) if, as of the date of the enact5 ment of this part—

6 ‘‘(I) the State has in effect a

7 waiver approved by the Secretary

8 under section 1115 which permits the

9 State to deny aid under the State

10 plan approved under part A of this

11 title (as in effect without regard to

12 the amendments made by chapter 1 of

13 the Personal Responsibility and Work

14 Opportunity Act of 1996) to a family

15 by reason of the birth of a child to a

16 family member otherwise eligible for

17 such aid; and

18 ‘‘(II) the State continues to im19 plement such policy under the State

20 program funded under this part (re21 gardless of the expiration of the waiv22 er), under rules prescribed by the

23 State.

24 ‘‘(3) REDUCTION OR ELIMINATION OF ASSIST25 ANCE FOR NONCOOPERATION IN ESTABLISHING PA-
243

•S 1956 PCS

1 TERNITY OR OBTAINING CHILD SUPPORT.—If the

2 agency responsible for administering the State plan

3 approved under part D determines that an individual

4 is not cooperating with the State in establishing pa5 ternity or in establishing, modifying, or enforcing a

6 support order with respect to a child of the individ7 ual, and the individual does not qualify for any good

8 cause or other exception established by the State

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

10 ‘‘(A) shall deduct not less than 25 percent

11 of the assistance that would otherwise be pro12 vided to the family of the individual under the

13 State program funded under this part; and

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

15 under the State program.

16 ‘‘(4) NO ASSISTANCE FOR FAMILIES NOT AS17 SIGNING CERTAIN SUPPORT RIGHTS TO THE

18 STATE.—

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

20 grant is made under section 403 shall require,

21 as a condition of providing assistance to a fam22 ily under the State program funded under this

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

24 State any rights the family member may have

25 (on behalf of the family member or of any other
244

•S 1956 PCS

1 person for whom the family member has applied

2 for or is receiving such assistance) to support

3 from any other person, not exceeding the total

4 amount of assistance so provided to the family,

5 which accrue (or have accrued) before the date

6 the family leaves the program, which assign7 ment, on and after the date the family leaves

8 the program, shall not apply with respect to any

9 support (other than support collected pursuant

10 to section 464) which accrued before the family

11 received such assistance and which the State

12 has not collected by—

13 ‘‘(i) September 30, 2000, if the as14 signment is executed on or after October 1,

15 1997, and before October 1, 2000; or

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

17 program, if the assignment is executed on

18 or after October 1, 2000.

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

20 grant is made under section 403 shall not re21 quire, as a condition of providing assistance to

22 any family under the State program funded

23 under this part, that a member of the family

24 assign to the State any rights to support de-
245

•S 1956 PCS

1 scribed in subparagraph (A) which accrue after

2 the date the family leaves the program.

3 ‘‘(5) NO ASSISTANCE FOR TEENAGE PARENTS

4 WHO DO NOT ATTEND HIGH SCHOOL OR OTHER

5 EQUIVALENT TRAINING PROGRAM.—A State to

6 which a grant is made under section 403 shall not

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

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

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

10 age in his or her care, and has not successfully com11 pleted a high-school education (or its equivalent), if

12 the individual does not participate in—

13 ‘‘(A) educational activities directed toward

14 the attainment of a high school diploma or its

15 equivalent; or

16 ‘‘(B) an alternative educational or training

17 program that has been approved by the State.

18 ‘‘(6) NO ASSISTANCE FOR TEENAGE PARENTS

19 NOT LIVING IN ADULT-SUPERVISED SETTINGS.—

20 ‘‘(A) IN GENERAL.—

21 ‘‘(i) REQUIREMENT.—Except as pro22 vided in subparagraph (B), a State to

23 which a grant is made under section 403

24 shall not use any part of the grant to pro25 vide assistance to an individual described
246

•S 1956 PCS

1 in clause (ii) of this subparagraph if the

2 individual and the minor child referred to

3 in clause (ii)(II) do not reside in a place of

4 residence maintained by a parent, legal

5 guardian, or other adult relative of the in6 dividual as such parent’s, guardian’s, or

7 adult relative’s own home.

8 ‘‘(ii) INDIVIDUAL DESCRIBED.—For

9 purposes of clause (i), an individual de10 scribed in this clause is an individual

11 who—

12 ‘‘(I) has not attained 18 years of

13 age; and

14 ‘‘(II) is not married, and has a

15 minor child in his or her care.

16 ‘‘(B) EXCEPTION.—

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

18 LOCATING, ADULT-SUPERVISED LIVING AR19 RANGEMENT.—In the case of an individual

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

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

22 shall provide, or assist the individual in lo23 cating, a second chance home, maternity

24 home, or other appropriate adult-super25 vised supportive living arrangement, taking
247

•S 1956 PCS

1 into consideration the needs and concerns

2 of the individual, and thereafter shall re3 quire that the individual and the minor

4 child referred to in subparagraph

5 (A)(ii)(II) reside in such living arrange6 ment as a condition of the continued re7 ceipt of assistance under the State pro8 gram funded under this part attributable

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

12 and the current arrangement cease to be

13 appropriate).

14 ‘‘(ii) INDIVIDUAL DESCRIBED.—For

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

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

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

19 legal guardian or other appropriate

20 adult relative described in subclause

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

22 whose whereabouts are known;

23 ‘‘(II) no living parent, legal

24 guardian, or other appropriate adult

25 relative, who would otherwise meet
248

•S 1956 PCS

1 applicable State criteria to act as the

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

4 the home of such parent, guardian, or

5 relative;

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

8 ‘‘(aa) the individual or the

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

11 has been subjected to serious

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

14 residence of the individual’s own

15 parent or legal guardian; or

16 ‘‘(bb) substantial evidence

17 exists of an act or failure to act

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

20 the minor child lived in the same

21 residence with the individual’s

22 own parent or legal guardian; or

23 ‘‘(IV) the State agency otherwise

24 determines that it is in the best inter25 est of the minor child to waive the re-
249

•S 1956 PCS

1 quirement of subparagraph (A) with

2 respect to the individual or the minor

3 child.

4 ‘‘(iii) SECOND-CHANCE HOME.—For

5 purposes of this subparagraph, the term

6 ‘second-chance home’ means an entity that

7 provides individuals described in clause (ii)

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

10 required to learn parenting skills, including

11 child development, family budgeting, health

12 and nutrition, and other skills to promote

13 their long-term economic independence and

14 the well-being of their children.

15 ‘‘(7) NO MEDICAL SERVICES.—

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

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

18 made under section 403 shall not use any part

19 of the grant to provide medical services.

20 ‘‘(B) EXCEPTION FOR FAMILY PLANNING

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

22 term ‘medical services’ does not include family

23 planning services.

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

25 YEARS.—
250

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

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

3 grant is made under section 403 shall not use

4 any part of the grant to provide assistance to

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

7 funded under this part attributable to funds

8 provided by the Federal Government, for 60

9 months (whether or not consecutive) after the

10 date the State program funded under this part

11 commences.

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

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

18 was provided with respect to the individual and

19 during which the individual was—

20 ‘‘(i) a minor child; and

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

22 married to the head of a household.

23 ‘‘(C) HARDSHIP EXCEPTION.—

24 ‘‘(i) IN GENERAL.—The State may ex25 empt a family from the application of sub-
251

•S 1956 PCS

1 paragraph (A) of this paragraph, or sub2 paragraph (B) of paragraph (1), by reason

3 of hardship or if the family includes an in4 dividual who has been battered or sub5 jected to extreme cruelty.

6 ‘‘(ii) LIMITATION.—The number of

7 families with respect to which an exemp8 tion made by a State under clause (i) is in

9 effect for a fiscal year shall not exceed 20

10 percent of the average monthly number of

11 families to which assistance is provided

12 under the State program funded under this

13 part.

14 ‘‘(iii) BATTERED OR SUBJECT TO EX15 TREME CRUELTY DEFINED.—For purposes

16 of clause (i), an individual has been bat17 tered or subjected to extreme cruelty if the

18 individual has been subjected to—

19 ‘‘(I) physical acts that resulted

20 in, or threatened to result in, physical

21 injury to the individual;

22 ‘‘(II) sexual abuse;

23 ‘‘(III) sexual activity involving a

24 dependent child;
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•S 1956 PCS

1 ‘‘(IV) being forced as the care2 taker relative of a dependent child to

3 engage in nonconsensual sexual acts

4 or activities;

5 ‘‘(V) threats of, or attempts at,

6 physical or sexual abuse;

7 ‘‘(VI) mental abuse; or

8 ‘‘(VII) neglect or deprivation of

9 medical care.

10 ‘‘(D) RULE OF INTERPRETATION.—Sub11 paragraph (A) of this paragraph and subpara12 graph (B) of paragraph (1) shall not be inter13 preted to require any State to provide assist14 ance to any individual for any period of time

15 under the State program funded under this

16 part.

17 ‘‘(9) DENIAL OF ASSISTANCE FOR 10 YEARS TO

18 A PERSON FOUND TO HAVE FRAUDULENTLY MIS19 REPRESENTED RESIDENCE IN ORDER TO OBTAIN AS20 SISTANCE IN 2 OR MORE STATES.—A State to which

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

22 part of the grant to provide cash assistance to an in23 dividual during the 10-year period that begins on

24 the date the individual is convicted in Federal or

25 State court of having made a fraudulent statement
253

•S 1956 PCS

1 or representation with respect to the place of resi2 dence of the individual in order to receive assistance

3 simultaneously from 2 or more States under pro4 grams that are funded under this title, title XV or

5 XIX, or the Food Stamp Act of 1977, or benefits in

6 2 or more States under the supplemental security in7 come program under title XVI. The preceding sen8 tence shall not apply with respect to a conviction of

9 an individual, for any month beginning after the

10 President of the United States grants a pardon with

11 respect to the conduct which was the subject of the

12 conviction.

13 ‘‘(10) DENIAL OF ASSISTANCE FOR FUGITIVE

14 FELONS AND PROBATION AND PAROLE VIOLA15 TORS.—

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

17 grant is made under section 403 shall not use

18 any part of the grant to provide assistance to

19 any individual who is—

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

21 custody or confinement after conviction,

22 under the laws of the place from which the

23 individual flees, for a crime, or an attempt

24 to commit a crime, which is a felony under

25 the laws of the place from which the indi-
254

•S 1956 PCS

1 vidual flees, or which, in the case of the

2 State of New Jersey, is a high mis3 demeanor under the laws of such State; or

4 ‘‘(ii) violating a condition of probation

5 or parole imposed under Federal or State

6 law.

7 The preceding sentence shall not apply with re8 spect to conduct of an individual, for any month

9 beginning after the President of the United

10 States grants a pardon with respect to the con11 duct.

12 ‘‘(B) EXCHANGE OF INFORMATION WITH

13 LAW ENFORCEMENT AGENCIES.—If a State to

14 which a grant is made under section 403 estab15 lishes safeguards against the use or disclosure

16 of information about applicants or recipients of

17 assistance under the State program funded

18 under this part, the safeguards shall not pre19 vent the State agency administering the pro20 gram from furnishing a Federal, State, or local

21 law enforcement officer, upon the request of the

22 officer, with the current address of any recipi23 ent if the officer furnishes the agency with the

24 name of the recipient and notifies the agency

25 that—
255

•S 1956 PCS

1 ‘‘(i) the recipient—

2 ‘‘(I) is described in subparagraph

3 (A); or

4 ‘‘(II) has information that is nec5 essary for the officer to conduct the

6 official duties of the officer; and

7 ‘‘(ii) the location or apprehension of

8 the recipient is within such official duties.

9 ‘‘(11) DENIAL OF ASSISTANCE FOR MINOR

10 CHILDREN WHO ARE ABSENT FROM THE HOME FOR

11 A SIGNIFICANT PERIOD.—

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

13 grant is made under section 403 shall not use

14 any part of the grant to provide assistance for

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

16 a parent (or other caretaker relative) of the

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

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

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

20 more than 180 consecutive days as the State

21 may provide for in the State plan submitted

22 pursuant to section 402.

23 ‘‘(B) STATE AUTHORITY TO ESTABLISH

24 GOOD CAUSE EXCEPTIONS.—The State may es25 tablish such good cause exceptions to subpara-
256

•S 1956 PCS

1 graph (A) as the State considers appropriate if

2 such exceptions are provided for in the State

3 plan submitted pursuant to section 402.

4 ‘‘(C) DENIAL OF ASSISTANCE FOR REL5 ATIVE WHO FAILS TO NOTIFY STATE AGENCY

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

7 grant is made under section 403 shall not use

8 any part of the grant to provide assistance for

9 an individual who is a parent (or other care10 taker relative) of a minor child and who fails to

11 notify the agency administering the State pro12 gram funded under this part of the absence of

13 the minor child from the home for the period

14 specified in or provided for pursuant to sub15 paragraph (A), by the end of the 5-day period

16 that begins with the date that it becomes clear

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

18 will be absent for such period so specified or

19 provided for.

20 ‘‘(12) MEDICAL ASSISTANCE REQUIRED TO BE

21 PROVIDED FOR 1 YEAR FOR FAMILIES BECOMING IN22 ELIGIBLE FOR ASSISTANCE UNDER THIS PART DUE

23 TO INCREASED EARNINGS FROM EMPLOYMENT OR

24 COLLECTION OF CHILD SUPPORT.—
257

•S 1956 PCS

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

2 grant is made under section 403 shall take such

3 action as may be necessary to ensure that, if

4 any family becomes ineligible to receive assist5 ance under the State program funded under

6 this part as a result of—

7 ‘‘(i) increased earnings from employ8 ment;

9 ‘‘(ii) the collection or increased collec10 tion of child or spousal support;

11 ‘‘(iii) a combination of the matters de12 scribed in clauses (i) and (ii); or

13 ‘‘(iv) during the 1-year period that be14 gins on July 1, 1997 (or the date described

15 in section 2116(b)(1)(A) of the Personal

16 Responsibility and Work Opportunity Act

17 of 1996, if earlier), as a result of the State

18 revising the standards and criteria under

19 the State plan for determining eligibility

20 for assistance under this part,

21 and such family received such assistance in at

22 least 3 of the 6 months immediately preceding

23 the month in which such ineligibility begins, the

24 family shall be eligible for medical assistance

25 under the State’s plan approved under title
258

•S 1956 PCS

1 XIX (or, if applicable, title XV) during the im2 mediately succeeding 12-month period for so

3 long as family income (as defined by the State),

4 excluding any refund of Federal income taxes

5 made by reason of section 32 of the Internal

6 Revenue Code of 1986 (relating to earned in7 come tax credit) and any payment made by an

8 employer under section 3507 of such Code (re9 lating to advance payment of earned income

10 credit), is less than the poverty line, and that

11 the family will be appropriately notified of such

12 eligibility.

13 ‘‘(B) EXCEPTION.—No medical assistance

14 may be provided under subparagraph (A) to

15 any family that contains an individual who has

16 had all or part of any assistance provided under

17 this part withheld, deducted, or denied as a re18 sult of the application of—

19 ‘‘(i) a preceding paragraph of this

20 subsection;

21 ‘‘(ii) section 407(e)(1); or

22 ‘‘(iii) in the case of a family described

23 in clause (iv) of subparagraph (A), a sanc24 tion imposed under the State plan under

25 this part (as in effect on June 30, 1997
259

•S 1956 PCS

1 (or the day before the date described in

2 section 2116(b)(1)(A) of the Personal Re3 sponsibility and Work Opportunity Act of

4 1996, if earlier)).

5 ‘‘(b) ALIENS.—For special rules relating to the treat6 ment of aliens, see section 2402 of the Personal Respon7 sibility and Work Opportunity Act of 1996.

8 ‘‘(c) NONDISCRIMINATION PROVISIONS.—Any pro9 gram or activity that receives funds under this part shall

10 be subject to enforcement authorized under the following

11 provisions of law:

12 ‘‘(1) The Age Discrimination Act of 1975 (42

13 U.S.C. 6101 et seq.).

14 ‘‘(2) Section 504 of the Rehabilitation Act of

15 1973 (29 U.S.C. 794).

16 ‘‘(3) The Americans with Disabilities Act of

17 1990 (42 U.S.C. 12101 et seq.).

18 ‘‘(4) Title VI of the Civil Rights Act of 1964

19 (42 U.S.C. 2000d et seq.).

20 ‘‘SEC. 409. PENALTIES.

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

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

23 PART.—

24 ‘‘(A) GENERAL PENALTY.—If an audit

25 conducted under chapter 75 of title 31, United
260

•S 1956 PCS

1 States Code, finds that an amount paid to a

2 State under section 403 for a fiscal year has

3 been used in violation of this part, the Sec4 retary shall reduce the grant payable to the

5 State under section 403(a)(1) for the imme6 diately succeeding fiscal year quarter by the

7 amount so used.

8 ‘‘(B) ENHANCED PENALTY FOR INTEN9 TIONAL VIOLATIONS.—If the State does not

10 prove to the satisfaction of the Secretary that

11 the State did not intend to use the amount in

12 violation of this part, the Secretary shall fur13 ther reduce the grant payable to the State

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

15 succeeding fiscal year quarter by an amount

16 equal to 5 percent of the State family assist17 ance grant.

18 ‘‘(2) FAILURE TO SUBMIT REQUIRED RE19 PORT.—

20 ‘‘(A) IN GENERAL.—If the Secretary deter21 mines that a State has not, within 1 month

22 after the end of a fiscal quarter, submitted the

23 report required by section 411(a) for the quar24 ter, the Secretary shall reduce the grant pay25 able to the State under section 403(a)(1) for
261

•S 1956 PCS

1 the immediately succeeding fiscal year by an

2 amount equal to 4 percent of the State family

3 assistance grant.

4 ‘‘(B) RESCISSION OF PENALTY.—The Sec5 retary shall rescind a penalty imposed on a

6 State under subparagraph (A) with respect to a

7 report if the State submits the report before the

8 end of the fiscal quarter that immediately suc9 ceeds the fiscal quarter for which the report

10 was required.

11 ‘‘(3) FAILURE TO SATISFY MINIMUM PARTICIPA12 TION RATES.—

13 ‘‘(A) IN GENERAL.—If the Secretary deter14 mines that a State to which a grant is made

15 under section 403 for a fiscal year has failed to

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

17 the Secretary shall reduce the grant payable to

18 the State under section 403(a)(1) for the imme19 diately succeeding fiscal year by an amount

20 equal to not more than 5 percent of the State

21 family assistance grant.

22 ‘‘(B) PENALTY BASED ON SEVERITY OF

23 FAILURE.—The Secretary shall impose reduc24 tions under subparagraph (A) based on the de25 gree of noncompliance.
262

•S 1956 PCS

1 ‘‘(C) ADDITIONAL PENALTY FOR CONSECU2 TIVE NONCOMPLIANCE.—Notwithstanding the

3 limitation described in subparagraph (A), the

4 Secretary shall reduce the grant payable to the

5 State under section 403(a)(1) for a fiscal year,

6 in addition to the reduction imposed under sub7 paragraph (A), by an amount equal to 5 per8 cent of the State family assistance grant, if the

9 Secretary determines that the State failed to

10 comply with section 407(a) for 2 or more con11 secutive preceding fiscal years.

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

13 AND ELIGIBILITY VERIFICATION SYSTEM.—If the

14 Secretary determines that a State program funded

15 under this part is not participating during a fiscal

16 year in the income and eligibility verification system

17 required by section 1137, the Secretary shall reduce

18 the grant payable to the State under section

19 403(a)(1) for the immediately succeeding fiscal year

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

21 the State family assistance grant.

22 ‘‘(5) FAILURE TO COMPLY WITH PATERNITY ES23 TABLISHMENT AND CHILD SUPPORT ENFORCEMENT

24 REQUIREMENTS UNDER PART D.—Notwithstanding

25 any other provision of this Act, if the Secretary de-
263

•S 1956 PCS

1 termines that the State agency that administers a

2 program funded under this part does not enforce the

3 penalties requested by the agency administering part

4 D against recipients of assistance under the State

5 program who fail to cooperate in establishing pater6 nity or in establishing, modifying, or enforcing a

7 child support order in accordance with such part and

8 who do not qualify for any good cause or other ex9 ception established by the State under section

10 454(29), the Secretary shall reduce the grant pay11 able to the State under section 403(a)(1) for the im12 mediately succeeding fiscal year (without regard to

13 this section) by not more than 5 percent.

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

15 LOAN FUND FOR STATE WELFARE PROGRAMS.—If

16 the Secretary determines that a State has failed to

17 repay any amount borrowed from the Federal Loan

18 Fund for State Welfare Programs established under

19 section 406 within the period of maturity applicable

20 to the loan, plus any interest owed on the loan, the

21 Secretary shall reduce the grant payable to the State

22 under section 403(a)(1) for the immediately succeed23 ing fiscal year quarter (without regard to this sec24 tion) by the outstanding loan amount, plus the inter25 est owed on the outstanding amount. The Secretary
264

•S 1956 PCS

1 shall not forgive any outstanding loan amount or in2 terest owed on the outstanding amount.

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

4 CERTAIN LEVEL OF HISTORIC EFFORT.—

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

6 reduce the grant payable to the State under

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

8 2000, 2001, or 2002 by the amount (if any) by

9 which qualified State expenditures for the then

10 immediately preceding fiscal year are less than

11 the applicable percentage of historic State ex12 penditures with respect to such preceding fiscal

13 year.

14 ‘‘(B) DEFINITIONS.—As used in this para15 graph:

16 ‘‘(i) QUALIFIED STATE EXPENDI17 TURES.—

18 ‘‘(I) IN GENERAL.—The term

19 ‘qualified State expenditures’ means,

20 with respect to a State and a fiscal

21 year, the total expenditures by the

22 State during the fiscal year, under all

23 State programs, for any of the follow24 ing with respect to eligible families:

25 ‘‘(aa) Cash assistance.
265

•S 1956 PCS

1 ‘‘(bb) Child care assistance.

2 ‘‘(cc) Educational activities

3 designed to increase self-suffi4 ciency, job training, and work,

5 excluding any expenditure for

6 public education in the State ex7 cept expenditures which involve

8 the provision of services or assist9 ance to a member of an eligible

10 family which is not generally

11 available to persons who are not

12 members of an eligible family.

13 ‘‘(dd) Administrative costs

14 in connection with the matters

15 described in items (aa), (bb),

16 (cc), and (ee), but only to the ex17 tent that such costs do not ex18 ceed 15 percent of the total

19 amount of qualified State ex20 penditures for the fiscal year.

21 ‘‘(ee) Any other use of funds

22 allowable under section

23 404(a)(1).

24 ‘‘(II) EXCLUSION OF TRANSFERS

25 FROM OTHER STATE AND LOCAL PRO-
266

•S 1956 PCS

1 GRAMS.—Such term does not include

2 expenditures under any State or local

3 program during a fiscal year, except

4 to the extent that—

5 ‘‘(aa) such expenditures ex6 ceed the amount expended under

7 the State or local program in the

8 fiscal year most recently ending

9 before the date of the enactment

10 of the Personal Responsibility

11 and Work Opportunity Act of

12 1996; or

13 ‘‘(bb) the State is entitled to

14 a payment under former section

15 403 (as in effect immediately be16 fore such date of enactment) with

17 respect to such expenditures.

18 ‘‘(III) ELIGIBLE FAMILIES.—As

19 used in subclause (I), the term ‘eligi20 ble families’ means families eligible

21 for assistance under the State pro22 gram funded under this part, and

23 families that would be eligible for such

24 assistance but for the application of

25 section 408(a)(8) of this Act or sec-
267

•S 1956 PCS

1 tion 2402 of the Personal Responsibil2 ity and Work Opportunity Act of

3 1996.

4 ‘‘(ii) APPLICABLE PERCENTAGE.—The

5 term ‘applicable percentage’ means for fis6 cal years 1997 through 2001, 80 percent

7 reduced (if appropriate) in accordance with

8 subparagraph (C)(ii).

9 ‘‘(iii) HISTORIC STATE EXPENDI10 TURES.—The term ‘historic State expendi11 tures’ means, with respect to a State, the

12 lesser of—

13 ‘‘(I) the expenditures by the

14 State under parts A and F (as in ef15 fect during fiscal year 1994) for fiscal

16 year 1994; or

17 ‘‘(II) the amount which bears the

18 same ratio to the amount described in

19 subclause (I) as—

20 ‘‘(aa) the State family as21 sistance grant, plus the total

22 amount required to be paid to

23 the State under former section

24 403 for fiscal year 1994 with re25 spect to amounts expended by
268

•S 1956 PCS

1 the State for child care under

2 subsection (g) or (i) of section

3 402 (as in effect during fiscal

4 year 1994); bears to

5 ‘‘(bb) the total amount re6 quired to be paid to the State

7 under former section 403 (as in

8 effect during fiscal year 1994)

9 for fiscal year 1994.

10 Such term does not include any expendi11 tures under the State plan approved under

12 part A (as so in effect) on behalf of indi13 viduals covered by a tribal family assist14 ance plan approved under section 412, as

15 determined by the Secretary.

16 ‘‘(iv) EXPENDITURES BY THE

17 STATE.—The term ‘expenditures by the

18 State’ does not include—

19 ‘‘(I) any expenditures from

20 amounts made available by the Fed21 eral Government;

22 ‘‘(II) State funds expended for

23 the medicaid program under title XV

24 or XIX; or
269

•S 1956 PCS

1 ‘‘(III) any State funds which are

2 used to match Federal funds or are

3 expended as a condition of receiving

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

6 ‘‘(C) APPLICABLE PERCENTAGE REDUCED

7 FOR HIGH PERFORMANCE STATES.—

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

10 use the formula developed under section

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

14 this part for each fiscal year, and shall

15 prescribe a performance threshold which

16 the Secretary shall use to determine

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

19 fiscal year.

20 ‘‘(ii) REDUCTION PROPORTIONAL TO

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

23 year with respect to each eligible State by

24 an amount which is directly proportional to

25 the amount (if any) by which the score as-
270

•S 1956 PCS

1 signed to the State under clause (i) for the

2 immediately preceding fiscal year exceeds

3 the performance threshold prescribed

4 under clause (i) for such preceding fiscal

5 year, subject to clause (iii).

6 ‘‘(iii) LIMITATION ON REDUCTION.—

7 The applicable percentage for a fiscal year

8 with respect to a State may not be reduced

9 by more than 8 percentage points under

10 this subparagraph.

11 ‘‘(8) SUBSTANTIAL NONCOMPLIANCE OF STATE

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

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

15 operated under part D is found as a result of

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

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

19 Secretary determines that the program is not

20 complying substantially with such requirements

21 at the time the finding is made, the Secretary

22 shall reduce the grant payable to the State

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

24 each subsequent quarter that ends before the

25 1st quarter throughout which the program is
271

•S 1956 PCS

1 found to be in substantial compliance with such

2 requirements by—

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

4 percent;

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

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

8 a review; or

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

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

12 result of such a review.

13 ‘‘(B) DISREGARD OF NONCOMPLIANCE

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

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

18 determined to be in substantial compliance with

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

22 not adversely affect the performance of the

23 State’s program operated under part D.

24 ‘‘(9) FAILURE OF STATE RECEIVING AMOUNTS

25 FROM CONTINGENCY FUND TO MAINTAIN 100 PER-
272

•S 1956 PCS

1 CENT OF HISTORIC EFFORT.—If, at the end of any

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

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

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

7 historic State expenditures (as defined in paragraph

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

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

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

12 ‘‘(10) FAILURE TO COMPLY WITH PROVISIONS

13 OF THIS PART OR THE STATE PLAN.—If, after rea14 sonable notice and opportunity for hearing, the Sec15 retary determines that during a fiscal year a State

16 has not substantially complied with any provision of

17 this part or of the State plan, the Secretary shall,

18 if a preceding paragraph of this subsection does not

19 apply to such noncompliance, reduce the grant pay20 able to the State under section 403(a)(1) for the im21 mediately succeeding fiscal year by an amount equal

22 to not more than 5 percent of the State family as23 sistance grant, and shall continue to impose such re24 duction during each succeeding fiscal year until the
273

•S 1956 PCS

1 Secretary determines that the State no longer is in

2 noncompliance with such provision.

3 ‘‘(11) FAILURE TO COMPLY WITH 5-YEAR LIMIT

4 ON ASSISTANCE.—If the Secretary determines that

5 during a fiscal year a State has not complied with

6 the provisions of section 408(a)(1)(B), the Secretary

7 shall reduce the grant payable to the State under

8 section 403(a)(1) for the immediately succeeding fis9 cal year by an amount equal to 5 percent of the

10 State family assistance grant.

11 ‘‘(12) REQUIRED REPLACEMENT OF GRANT

12 FUND REDUCTIONS CAUSED BY PENALTIES.—If the

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

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

15 the State shall, during the immediately succeeding

16 fiscal year, expend under the State program funded

17 under this part an amount equal to the total amount

18 of such reductions.

19 ‘‘(b) REASONABLE CAUSE EXCEPTION.—

20 ‘‘(1) IN GENERAL.—The Secretary may not im21 pose a penalty on a State under subsection (a) with

22 respect to a requirement if the Secretary determines

23 that the State has reasonable cause for failing to

24 comply with the requirement.
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•S 1956 PCS

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

4 ‘‘(c) CORRECTIVE COMPLIANCE PLAN.—

5 ‘‘(1) IN GENERAL.—

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

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

9 part, the Secretary shall notify the State of the

10 violation and allow the State the opportunity to

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

13 how the State will correct the violation and how

14 the State will insure continuing compliance with

15 this part.

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

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

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

21 submit to the Federal Government a corrective

22 compliance plan to correct the violation.

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

25 with the date the Secretary receives a corrective
275

•S 1956 PCS

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

3 consult with the State on modifications to the

4 plan.

5 ‘‘(D) ACCEPTANCE OF PLAN.— A correc6 tive compliance plan submitted by a State in ac7 cordance with subparagraph (B) is deemed to

8 be accepted by the Secretary if the Secretary

9 does not accept or reject the plan during 60-day

10 period that begins on the date the plan is sub11 mitted.

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

13 The Secretary may not impose any penalty under

14 subsection (a) with respect to any violation covered

15 by a State corrective compliance plan accepted by

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

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

20 penalty imposed on a State under subsection (a)

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

22 a timely manner, correct the violation pursuant to a

23 State corrective compliance plan accepted by the

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

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

4 the imposition of a penalty against a State under

5 subsection (a)(6).

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

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

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

9 reduce any quarterly payment to a State by more

10 than 25 percent.

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

13 subsection prevents the Secretary from recovering

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

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

17 remaining amount of such penalties to the grant

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

19 immediately succeeding fiscal year.

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

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

22 Secretary takes any adverse action under this part with

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

25 any action with respect to the State plan submitted under
277

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1 section 402 or the imposition of a penalty under section

2 409.

3 ‘‘(b) ADMINISTRATIVE REVIEW.—

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

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

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

7 in whole or in part, to the Departmental Appeals

8 Board established in the Department of Health and

9 Human Services (in this section referred to as the

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

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

12 consider an appeal filed by a State under paragraph

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

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

16 whether to uphold an adverse action or any portion

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

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

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

22 the appeal is filed.

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

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

25 date of a final decision by the Board under this sec-
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•S 1956 PCS

1 tion with respect to an adverse action taken against

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

3 final decision (and the findings incorporated into the

4 final decision) by filing an action in—

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

6 for the judicial district in which the principal or

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

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

10 the District of Columbia.

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

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

13 review the final decision of the Board on the record

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

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

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

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

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

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

22 ‘‘(1) GENERAL REPORTING REQUIREMENT.—

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

25 report to the Secretary on a quarterly basis, the
279

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1 following disaggregated case record information

2 on the families receiving assistance under the

3 State program funded under this part:

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

5 family.

6 ‘‘(ii) Whether a child receiving such

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

9 ‘‘(iii) The ages of the members of

10 such families.

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

12 family, and the relation of each family

13 member to the youngest child in the fam14 ily.

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

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

18 in the family, including whether such

19 adults have never married, are widowed, or

20 are divorced.

21 ‘‘(vii) The race and educational status

22 of each adult in the family.

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

3 the State plan under title XV or the State

4 plan approved under title XIX, food

5 stamps, or subsidized child care, and if the

6 latter 2, the amount received.

7 ‘‘(x) The number of months that the

8 family has received each type of assistance

9 under the program.

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

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

13 ‘‘(I) Education.

14 ‘‘(II) Subsidized private sector

15 employment.

16 ‘‘(III) Unsubsidized employment.

17 ‘‘(IV) Public sector employment,

18 work experience, or community serv19 ice.

20 ‘‘(V) Job search.

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

23 ‘‘(VII) Vocational education.
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•S 1956 PCS

1 ‘‘(xii) Information necessary to cal2 culate participation rates under section

3 407.

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

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

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

11 ‘‘(xv) The citizenship of the members

12 of the family.

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

14 whether the family left the program, and if

15 so, whether the family left due to—

16 ‘‘(I) employment;

17 ‘‘(II) marriage;

18 ‘‘(III) the prohibition set forth in

19 section 408(a)(8);

20 ‘‘(IV) sanction; or

21 ‘‘(V) State policy.

22 ‘‘(B) USE OF ESTIMATES.—

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

25 an estimate which is obtained through the
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•S 1956 PCS

1 use of scientifically acceptable sampling

2 methods approved by the Secretary.

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

5 States with such case sampling plans and

6 data collection procedures as the Secretary

7 deems necessary to produce statistically

8 valid estimates of the performance of State

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

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

14 COVER ADMINISTRATIVE COSTS AND OVERHEAD.—

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

16 quarter shall include a statement of the percentage

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

18 the quarter that are used to cover administrative

19 costs or overhead.

20 ‘‘(3) REPORT ON STATE EXPENDITURES ON

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

24 the State during the quarter on programs for needy

25 families.
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•S 1956 PCS

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

5 State who participated in work activities (as defined

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

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

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

9 quarter shall include the total amount expended by

10 the State during the quarter to provide transitional

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

13 with a description of such services.

14 ‘‘(6) REGULATIONS.—The Secretary shall pre15 scribe such regulations as may be necessary to de16 fine the data elements with respect to which reports

17 are required by this subsection.

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

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

20 fiscal year 1997, and each fiscal year thereafter, the Sec21 retary shall transmit to the Congress a report describ22 ing—

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

24 ‘‘(A) the participation rates described in

25 section 407(a); and
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•S 1956 PCS

1 ‘‘(B) the objectives of—

2 ‘‘(i) increasing employment and earn3 ings of needy families, and child support

4 collections; and

5 ‘‘(ii) decreasing out-of-wedlock preg6 nancies and child poverty;

7 ‘‘(2) the demographic and financial characteris8 tics of families applying for assistance, families re9 ceiving assistance, and families that become ineli10 gible to receive assistance;

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

12 funded under this part; and

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

14 needy families with minor children living at home.

15 ‘‘SEC. 412. DIRECT FUNDING AND ADMINISTRATION BY IN16 DIAN TRIBES.

17 ‘‘(a) GRANTS FOR INDIAN TRIBES.—

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

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

20 years 1997, 1998, 1999, 2000, and 2001, the

21 Secretary shall pay to each Indian tribe that

22 has an approved tribal family assistance plan a

23 tribal family assistance grant for the fiscal year

24 in an amount equal to the amount determined

25 under subparagraph (B), and shall reduce the
285

•S 1956 PCS

1 grant payable under section 403(a)(1) to any

2 State in which lies the service area or areas of

3 the Indian tribe by that portion of the amount

4 so determined that is attributable to expendi5 tures by the State.

6 ‘‘(B) AMOUNT DETERMINED.—

7 ‘‘(i) IN GENERAL.—The amount de8 termined under this subparagraph is an

9 amount equal to the total amount of the

10 Federal payments to a State or States

11 under section 403 (as in effect during such

12 fiscal year) for fiscal year 1994 attrib13 utable to expenditures (other than child

14 care expenditures) by the State or States

15 under parts A and F (as so in effect) for

16 fiscal year 1994 for Indian families resid17 ing in the service area or areas identified

18 by the Indian tribe pursuant to subsection

19 (b)(1)(C) of this section.

20 ‘‘(ii) USE OF STATE SUBMITTED

21 DATA.—

22 ‘‘(I) IN GENERAL.—The Sec23 retary shall use State submitted data

24 to make each determination under

25 clause (i).
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•S 1956 PCS

1 ‘‘(II) DISAGREEMENT WITH DE2 TERMINATION.—If an Indian tribe or

3 tribal organization disagrees with

4 State submitted data described under

5 subclause (I), the Indian tribe or trib6 al organization may submit to the

7 Secretary such additional information

8 as may be relevant to making the de9 termination under clause (i) and the

10 Secretary may consider such informa11 tion before making such determina12 tion.

13 ‘‘(2) GRANTS FOR INDIAN TRIBES THAT RE14 CEIVED JOBS FUNDS.—

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

16 pay to each eligible Indian tribe for each of fis17 cal years 1996, 1997, 1998, 1999, 2000, and

18 2001 a grant in an amount equal to the amount

19 received by the Indian tribe in fiscal year 1994

20 under section 482(i) (as in effect during fiscal

21 year 1994).

22 ‘‘(B) ELIGIBLE INDIAN TRIBE.—For pur23 poses of subparagraph (A), the term ‘eligible

24 Indian tribe’ means an Indian tribe or Alaska

25 Native organization that conducted a job oppor-
287

•S 1956 PCS

1 tunities and basic skills training program in fis2 cal year 1995 under section 482(i) (as in effect

3 during fiscal year 1995).

4 ‘‘(C) USE OF GRANT.—Each Indian tribe

5 to which a grant is made under this paragraph

6 shall use the grant for the purpose of operating

7 a program to make work activities available to

8 members of the Indian tribe.

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

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

12 $7,638,474 for each fiscal year specified in sub13 paragraph (A) for grants under subparagraph

14 (A).

15 ‘‘(b) 3-YEAR TRIBAL FAMILY ASSISTANCE PLAN.—

16 ‘‘(1) IN GENERAL.—Any Indian tribe that de17 sires to receive a tribal family assistance grant shall

18 submit to the Secretary a 3-year tribal family assist19 ance plan that—

20 ‘‘(A) outlines the Indian tribe’s approach

21 to providing welfare-related services for the 3-

22 year period, consistent with this section;

23 ‘‘(B) specifies whether the welfare-related

24 services provided under the plan will be pro25 vided by the Indian tribe or through agree-
288

•S 1956 PCS

1 ments, contracts, or compacts with intertribal

2 consortia, States, or other entities;

3 ‘‘(C) identifies the population and service

4 area or areas to be served by such plan;

5 ‘‘(D) provides that a family receiving as6 sistance under the plan may not receive duplica7 tive assistance from other State or tribal pro8 grams funded under this part;

9 ‘‘(E) identifies the employment opportuni10 ties in or near the service area or areas of the

11 Indian tribe and the manner in which the In12 dian tribe will cooperate and participate in en13 hancing such opportunities for recipients of as14 sistance under the plan consistent with any ap15 plicable State standards; and

16 ‘‘(F) applies the fiscal accountability provi17 sions of section 5(f)(1) of the Indian Self-De18 termination and Education Assistance Act (25

19 U.S.C. 450c(f)(1)), relating to the submission

20 of a single-agency audit report required by

21 chapter 75 of title 31, United States Code.

22 ‘‘(2) APPROVAL.—The Secretary shall approve

23 each tribal family assistance plan submitted in ac24 cordance with paragraph (1).
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•S 1956 PCS

1 ‘‘(3) CONSORTIUM OF TRIBES.—Nothing in this

2 section shall preclude the development and submis3 sion of a single tribal family assistance plan by the

4 participating Indian tribes of an intertribal consor5 tium.

6 ‘‘(c) MINIMUM WORK PARTICIPATION REQUIRE7 MENTS AND TIME LIMITS.—The Secretary, with the par8 ticipation of Indian tribes, shall establish for each Indian

9 tribe receiving a grant under this section minimum work

10 participation requirements, appropriate time limits for re11 ceipt of welfare-related services under the grant, and pen12 alties against individuals—

13 ‘‘(1) consistent with the purposes of this sec14 tion;

15 ‘‘(2) consistent with the economic conditions

16 and resources available to each tribe; and

17 ‘‘(3) similar to comparable provisions in section

18 407(d).

19 ‘‘(d) EMERGENCY ASSISTANCE.—Nothing in this sec20 tion shall preclude an Indian tribe from seeking emergency

21 assistance from any Federal loan program or emergency

22 fund.

23 ‘‘(e) ACCOUNTABILITY.—Nothing in this section shall

24 be construed to limit the ability of the Secretary to main25 tain program funding accountability consistent with—
290

•S 1956 PCS

1 ‘‘(1) generally accepted accounting principles;

2 and

3 ‘‘(2) the requirements of the Indian Self-Deter4 mination and Education Assistance Act (25 U.S.C.

5 450 et seq.).

6 ‘‘(f) PENALTIES.—

7 ‘‘(1) Subsections (a)(1), (a)(6), and (b) of sec8 tion 409, shall apply to an Indian tribe with an ap9 proved tribal assistance plan in the same manner as

10 such subsections apply to a State.

11 ‘‘(2) Section 409(a)(3) shall apply to an Indian

12 tribe with an approved tribal assistance plan by sub13 stituting ‘meet minimum work participation require14 ments established under section 412(c)’ for ‘comply

15 with section 407(a)’.

16 ‘‘(g) DATA COLLECTION AND REPORTING.—Section

17 411 shall apply to an Indian tribe with an approved tribal

18 family assistance plan.

19 ‘‘(h) SPECIAL RULE FOR INDIAN TRIBES IN ALAS20 KA.—

21 ‘‘(1) IN GENERAL.—Notwithstanding any other

22 provision of this section, and except as provided in

23 paragraph (2), an Indian tribe in the State of Alas24 ka that receives a tribal family assistance grant

25 under this section shall use the grant to operate a
291

•S 1956 PCS

1 program in accordance with requirements com2 parable to the requirements applicable to the pro3 gram of the State of Alaska funded under this part.

4 Comparability of programs shall be established on

5 the basis of program criteria developed by the Sec6 retary in consultation with the State of Alaska and

7 such Indian tribes.

8 ‘‘(2) WAIVER.—An Indian tribe described in

9 paragraph (1) may apply to the appropriate State

10 authority to receive a waiver of the requirement of

11 paragraph (1).

12 ‘‘SEC. 413. RESEARCH, EVALUATIONS, AND NATIONAL STUD13 IES.

14 ‘‘(a) RESEARCH.—The Secretary shall conduct re15 search on the benefits, effects, and costs of operating dif16 ferent State programs funded under this part, including

17 time limits relating to eligibility for assistance. The re18 search shall include studies on the effects of different pro19 grams and the operation of such programs on welfare de20 pendency, illegitimacy, teen pregnancy, employment rates,

21 child well-being, and any other area the Secretary deems

22 appropriate. The Secretary shall also conduct research on

23 the costs and benefits of State activities under section

24 409.
292

•S 1956 PCS

1 ‘‘(b) DEVELOPMENT AND EVALUATION OF INNOVA2 TIVE APPROACHES TO REDUCING WELFARE DEPEND3 ENCY AND INCREASING CHILD WELL-BEING.—

4 ‘‘(1) IN GENERAL.—The Secretary may assist

5 States in developing, and shall evaluate, innovative

6 approaches for reducing welfare dependency and in7 creasing the well-being of minor children living at

8 home with respect to recipients of assistance under

9 programs funded under this part. The Secretary

10 may provide funds for training and technical assist11 ance to carry out the approaches developed pursuant

12 to this paragraph.

13 ‘‘(2) EVALUATIONS.—In performing the evalua14 tions under paragraph (1), the Secretary shall, to

15 the maximum extent feasible, use random assign16 ment as an evaluation methodology.

17 ‘‘(c) DISSEMINATION OF INFORMATION.—The Sec18 retary shall develop innovative methods of disseminating

19 information on any research, evaluations, and studies con20 ducted under this section, including the facilitation of the

21 sharing of information and best practices among States

22 and localities through the use of computers and other

23 technologies.

24 ‘‘(d) ANNUAL RANKING OF STATES AND REVIEW OF

25 MOST AND LEAST SUCCESSFUL WORK PROGRAMS.—
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•S 1956 PCS

1 ‘‘(1) ANNUAL RANKING OF STATES.—The Sec2 retary shall rank annually the States to which

3 grants are paid under section 403 in the order of

4 their success in placing recipients of assistance

5 under the State program funded under this part into

6 long-term private sector jobs, reducing the overall

7 welfare caseload, and, when a practicable method for

8 calculating this information becomes available, di9 verting individuals from formally applying to the

10 State program and receiving assistance. In ranking

11 States under this subsection, the Secretary shall

12 take into account the average number of minor chil13 dren living at home in families in the State that

14 have incomes below the poverty line and the amount

15 of funding provided each State for such families.

16 ‘‘(2) ANNUAL REVIEW OF MOST AND LEAST

17 SUCCESSFUL WORK PROGRAMS.—The Secretary shall

18 review the programs of the 3 States most recently

19 ranked highest under paragraph (1) and the 3

20 States most recently ranked lowest under paragraph

21 (1) that provide parents with work experience, as22 sistance in finding employment, and other work

23 preparation activities and support services to enable

24 the families of such parents to leave the program

25 and become self-sufficient.
294

•S 1956 PCS

1 ‘‘(e) ANNUAL RANKING OF STATES AND REVIEW OF

2 ISSUES RELATING TO OUT-OF-WEDLOCK BIRTHS.—

3 ‘‘(1) ANNUAL RANKING OF STATES.—

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

5 annually rank States to which grants are made

6 under section 403 based on the following rank7 ing factors:

8 ‘‘(i) ABSOLUTE OUT-OF-WEDLOCK RA9 TIOS.—The ratio represented by—

10 ‘‘(I) the total number of out-of11 wedlock births in families receiving as12 sistance under the State program

13 under this part in the State for the

14 most recent fiscal year for which in15 formation is available; over

16 ‘‘(II) the total number of births

17 in families receiving assistance under

18 the State program under this part in

19 the State for such year.

20 ‘‘(ii) NET CHANGES IN THE OUT-OF21 WEDLOCK RATIO.—The difference between

22 the ratio described in subparagraph (A)(i)

23 with respect to a State for the most recent

24 fiscal year for which such information is
295

•S 1956 PCS

1 available and the ratio with respect to the

2 State for the immediately preceding year.

3 ‘‘(2) ANNUAL REVIEW.—The Secretary shall re4 view the programs of the 5 States most recently

5 ranked highest under paragraph (1) and the 5

6 States most recently ranked the lowest under para7 graph (1).

8 ‘‘(f) STATE-INITIATED EVALUATIONS.—A State shall

9 be eligible to receive funding to evaluate the State pro10 gram funded under this part if—

11 ‘‘(1) the State submits a proposal to the Sec12 retary for the evaluation;

13 ‘‘(2) the Secretary determines that the design

14 and approach of the evaluation is rigorous and is

15 likely to yield information that is credible and will

16 be useful to other States; and

17 ‘‘(3) unless otherwise waived by the Secretary,

18 the State contributes to the cost of the evaluation,

19 from non-Federal sources, an amount equal to at

20 least 10 percent of the cost of the evaluation.

21 ‘‘(g) FUNDING OF STUDIES AND DEMONSTRA22 TIONS.—

23 ‘‘(1) IN GENERAL.—Out of any money in the

24 Treasury of the United States not otherwise appro25 priated, there are appropriated $15,000,000 for each
296

•S 1956 PCS

1 of fiscal years 1998 through 2001, for the purpose

2 of paying—

3 ‘‘(A) the cost of conducting the research

4 described in subsection (a);

5 ‘‘(B) the cost of developing and evaluating

6 innovative approaches for reducing welfare de7 pendency and increasing the well-being of minor

8 children under subsection (b);

9 ‘‘(C) the Federal share of any State-initi10 ated study approved under subsection (f); and

11 ‘‘(D) an amount determined by the Sec12 retary to be necessary to operate and evaluate

13 demonstration projects, relating to this part,

14 that are in effect or approved under section

15 1115 as of September 30, 1995, and are contin16 ued after such date.

17 ‘‘(2) ALLOCATION.—Of the amount appro18 priated under paragraph (1) for a fiscal year—

19 ‘‘(A) 50 percent shall be allocated for the

20 purposes described in subparagraphs (A) and

21 (B) of paragraph (1), and

22 ‘‘(B) 50 percent shall be allocated for the

23 purposes described in subparagraphs (C) and

24 (D) of paragraph (1).
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•S 1956 PCS

1 ‘‘(3) DEMONSTRATIONS OF INNOVATIVE STRAT2 EGIES.—The Secretary may implement and evaluate

3 demonstrations of innovative and promising strate4 gies which—

5 ‘‘(A) provide one-time capital funds to es6 tablish, expand, or replicate programs;

7 ‘‘(B) test performance-based grant-to-loan

8 financing in which programs meeting perform9 ance targets receive grants while programs not

10 meeting such targets repay funding on a pro11 rated basis; and

12 ‘‘(C) test strategies in multiple States and

13 types of communities.

14 ‘‘SEC. 414. STUDY BY THE CENSUS BUREAU.

15 ‘‘(a) IN GENERAL.—The Bureau of the Census shall

16 expand the Survey of Income and Program Participation

17 as necessary to obtain such information as will enable in18 terested persons to evaluate the impact of the amendments

19 made by chapter 1 of the Personal Responsibility and

20 Work Opportunity Act of 1996 on a random national sam21 ple of recipients of assistance under State programs fund22 ed under this part and (as appropriate) other low income

23 families, and in doing so, shall pay particular attention

24 to the issues of out-of-wedlock birth, welfare dependency,
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•S 1956 PCS

1 the beginning and end of welfare spells, and the causes

2 of repeat welfare spells.

3 ‘‘(b) APPROPRIATION.—Out of any money in the

4 Treasury of the United States not otherwise appropriated,

5 there are appropriated $10,000,000 for each of fiscal

6 years 1998, 1999, 2000, 2001, and 2002 for payment to

7 the Bureau of the Census to carry out subsection (a).

8 ‘‘SEC. 415. WAIVERS.

9 ‘‘(a) CONTINUATION OF WAIVERS.—

10 ‘‘(1) WAIVERS IN EFFECT ON DATE OF ENACT11 MENT OF WELFARE REFORM.—Except as provided

12 in paragraph (3), if any waiver granted to a State

13 under section 1115 or otherwise which relates to the

14 provision of assistance under a State plan under this

15 part (as in effect on September 30, 1996) is in ef16 fect as of the date of the enactment of the Personal

17 Responsibility and Work Opportunity Act of 1996,

18 the amendments made by such Act (other than by

19 section 2103(d) of such Act) shall not apply with re20 spect to the State before the expiration (determined

21 without regard to any extensions) of the waiver to

22 the extent such amendments are inconsistent with

23 the waiver.

24 ‘‘(2) WAIVERS GRANTED SUBSEQUENTLY.—Ex25 cept as provided in paragraph (3), if any waiver
299

•S 1956 PCS

1 granted to a State under section 1115 or otherwise

2 which relates to the provision of assistance under a

3 State plan under this part (as in effect on Septem4 ber 30, 1996) is submitted to the Secretary before

5 the date of the enactment of the Personal Respon6 sibility and Work Opportunity Act of 1996 and ap7 proved by the Secretary on or before July 1, 1997,

8 and the State demonstrates to the satisfaction of the

9 Secretary that the waiver will not result in Federal

10 expenditures under title IV of this Act (as in effect

11 without regard to the amendments made by the Per12 sonal Responsibility and Work Opportunity Act of

13 1996) that are greater than would occur in the ab14 sence of the waiver, the amendments made by the

15 Personal Responsibility and Work Opportunity Act

16 of 1996 (other than by section 2103(d) of such Act)

17 shall not apply with respect to the State before the

18 expiration (determined without regard to any exten19 sions) of the waiver to the extent the amendments

20 made by the Personal Responsibility and Work Op21 portunity Act of 1996 are inconsistent with the

22 waiver.

23 ‘‘(3) FINANCING LIMITATION.—Notwithstand24 ing any other provision of law, beginning with fiscal

25 year 1996, a State operating under a waiver de-
300

•S 1956 PCS

1 scribed in paragraph (1) shall be entitled to payment

2 under section 403 for the fiscal year, in lieu of any

3 other payment provided for in the waiver.

4 ‘‘(b) STATE OPTION TO TERMINATE WAIVER.—

5 ‘‘(1) IN GENERAL.—A State may terminate a

6 waiver described in subsection (a) before the expira7 tion of the waiver.

8 ‘‘(2) REPORT.—A State which terminates a

9 waiver under paragraph (1) shall submit a report to

10 the Secretary summarizing the waiver and any avail11 able information concerning the result or effect of

12 the waiver.

13 ‘‘(3) HOLD HARMLESS PROVISION.—

14 ‘‘(A) IN GENERAL.—Notwithstanding any

15 other provision of law, a State that, not later

16 than the date described in subparagraph (B),

17 submits a written request to terminate a waiver

18 described in subsection (a) shall be held harm19 less for accrued cost neutrality liabilities in20 curred under the waiver.

21 ‘‘(B) DATE DESCRIBED.—The date de22 scribed in this subparagraph is 90 days follow23 ing the adjournment of the first regular session

24 of the State legislature that begins after the
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1 date of the enactment of the Personal Respon2 sibility and Work Opportunity Act of 1996.

3 ‘‘(c) SECRETARIAL ENCOURAGEMENT OF CURRENT

4 WAIVERS.—The Secretary shall encourage any State oper5 ating a waiver described in subsection (a) to continue the

6 waiver and to evaluate, using random sampling and other

7 characteristics of accepted scientific evaluations, the result

8 or effect of the waiver.

9 ‘‘(d) CONTINUATION OF INDIVIDUAL WAIVERS.—A

10 State may elect to continue 1 or more individual waivers

11 described in subsection (a).

12 ‘‘SEC. 416. ADMINISTRATION.

13 ‘‘The programs under this part and part D shall be

14 administered by an Assistant Secretary for Family Sup15 port within the Department of Health and Human Serv16 ices, who shall be appointed by the President, by and with

17 the advice and consent of the Senate, and who shall be

18 in addition to any other Assistant Secretary of Health and

19 Human Services provided for by law, and the Secretary

20 shall reduce the Federal workforce within the Department

21 of Health and Human Services by an amount equal to the

22 sum of 75 percent of the full-time equivalent positions at

23 such Department that relate to any direct spending pro24 gram, or any program funded through discretionary

25 spending, that has been converted into a block grant pro-
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1 gram under the Personal Responsibility and Work Oppor2 tunity Act of 1996 and the amendments made by such

3 Act, and by an amount equal to 75 percent of that portion

4 of the total full-time equivalent departmental management

5 positions at such Department that bears the same rela6 tionship to the amount appropriated for any direct spend7 ing program, or any program funded through discre8 tionary spending, that has been converted into a block

9 grant program under the Personal Responsibility and

10 Work Opportunity Act of 1996 and the amendments made

11 by such Act, as such amount relates to the total amount

12 appropriated for use by such Department, and, notwith13 standing any other provision of law, the Secretary shall

14 take such actions as may be necessary, including reduc15 tions in force actions, consistent with sections 3502 and

16 3595 of title 5, United States Code, to reduce the full17 time equivalent positions within the Department of Health

18 and Human Services by 245 full-time equivalent positions

19 related to the program converted into a block grant under

20 the amendment made by section 2103 of the Personal Re21 sponsibility and Work Opportunity Act of 1996, and by

22 60 full-time equivalent managerial positions in the Depart23 ment.
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1 ‘‘SEC. 417. LIMITATION ON FEDERAL AUTHORITY.

2 ‘‘No officer or employee of the Federal Government

3 may regulate the conduct of States under this part or en4 force any provision of this part, except to the extent ex5 pressly provided in this part.’’; and

6 (2) by inserting after such section 418 the fol7 lowing:

8 ‘‘SEC. 419. DEFINITIONS.

9 ‘‘As used in this part:

10 ‘‘(1) ADULT.—The term ‘adult’ means an indi11 vidual who is not a minor child.

12 ‘‘(2) MINOR CHILD.—The term ‘minor child’

13 means an individual who—

14 ‘‘(A) has not attained 18 years of age; or

15 ‘‘(B) has not attained 19 years of age and

16 is a full-time student in a secondary school (or

17 in the equivalent level of vocational or technical

18 training).

19 ‘‘(3) FISCAL YEAR.—The term ‘fiscal year’

20 means any 12-month period ending on September 30

21 of a calendar year.

22 ‘‘(4) INDIAN, INDIAN TRIBE, AND TRIBAL ORGA23 NIZATION.—

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

25 subparagraph (B), the terms ‘Indian’, ‘Indian

26 tribe’, and ‘tribal organization’ have the mean-
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1 ing given such terms by section 4 of the Indian

2 Self-Determination and Education Assistance

3 Act (25 U.S.C. 450b).

4 ‘‘(B) SPECIAL RULE FOR INDIAN TRIBES

5 IN ALASKA.—The term ‘Indian tribe’ means,

6 with respect to the State of Alaska, only the

7 Metlakatla Indian Community of the Annette

8 Islands Reserve and the following Alaska Native

9 regional nonprofit corporations:

10 ‘‘(i) Arctic Slope Native Association.

11 ‘‘(ii) Kawerak, Inc.

12 ‘‘(iii) Maniilaq Association.

13 ‘‘(iv) Association of Village Council

14 Presidents.

15 ‘‘(v) Tanana Chiefs Conference.

16 ‘‘(vi) Cook Inlet Tribal Council.

17 ‘‘(vii) Bristol Bay Native Association.

18 ‘‘(viii) Aleutian and Pribilof Island

19 Association.

20 ‘‘(ix) Chugachmuit.

21 ‘‘(x) Tlingit Haida Central Council.

22 ‘‘(xi) Kodiak Area Native Association.

23 ‘‘(xii) Copper River Native Associa24 tion.

25 ‘‘(5) STATE.—
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1 ‘‘(A) IN GENERAL.—Except as otherwise

2 specifically provided, the term ‘State’ means the

3 50 States of the United States, the District of

4 Columbia, the Commonwealth of Puerto Rico,

5 the United States Virgin Islands, Guam, and

6 American Samoa.

7 ‘‘(B) STATE OPTION TO CONTRACT TO

8 PROVIDE SERVICES.—The term ‘State’ includes

9 the—

10 ‘‘(i) administration and provision of

11 services under the program funded under

12 this part, or under the programs funded

13 under parts B and E of this title, through

14 contracts with charitable, religious, or pri15 vate organizations; and

16 ‘‘(ii) provision to beneficiaries of as17 sistance under such programs with certifi18 cates, vouchers, or other forms of disburse19 ment which are redeemable with such orga20 nizations.’’.

21 (b) GRANTS TO OUTLYING AREAS.—Section 1108

22 (42 U.S.C. 1308) is amended—

23 (1) by redesignating subsection (c) as sub24 section (g);
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1 (2) by striking all that precedes subsection (c)

2 and inserting the following:

3 ‘‘SEC. 1108. ADDITIONAL GRANTS TO PUERTO RICO, THE

4 VIRGIN ISLANDS, GUAM, AND AMERICAN

5 SAMOA; LIMITATION ON TOTAL PAYMENTS.

6 ‘‘(a) LIMITATION ON TOTAL PAYMENTS TO EACH

7 TERRITORY.—Notwithstanding any other provision of this

8 Act, the total amount certified by the Secretary of Health

9 and Human Services under titles I, X, XIV, and XVI,

10 under parts A and E of title IV, and under subsection

11 (b) of this section, for payment to any territory for a fiscal

12 year shall not exceed the ceiling amount for the territory

13 for the fiscal year.

14 ‘‘(b) ENTITLEMENT TO MATCHING GRANT.—

15 ‘‘(1) IN GENERAL.—Each territory shall be en16 titled to receive from the Secretary for each fiscal

17 year a grant in an amount equal to 75 percent of

18 the amount (if any) by which—

19 ‘‘(A) the total expenditures of the territory

20 during the fiscal year under the territory pro21 grams funded under parts A and E of title IV;

22 exceeds

23 ‘‘(B) the sum of—

24 ‘‘(i) the total amount required to be

25 paid to the territory (other than with re-
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1 spect to child care) under former section

2 403 (as in effect on September 30, 1995)

3 for fiscal year 1995, which shall be deter4 mined by applying subparagraphs (C) and

5 (D) of section 403(a)(1) to the territory;

6 ‘‘(ii) the total amount required to be

7 paid to the territory under former section

8 434 (as so in effect) for fiscal year 1995;

9 and

10 ‘‘(iii) the total amount expended by

11 the territory during fiscal year 1995 pur12 suant to parts A and F of title IV (as so

13 in effect), other than for child care.

14 ‘‘(2) USE OF GRANT.—Any territory to which a

15 grant is made under paragraph (1) may expend the

16 amount under any program operated or funded

17 under any provision of law specified in subsection

18 (a).

19 ‘‘(c) DEFINITIONS.—As used in this section:

20 ‘‘(1) TERRITORY.—The term ‘territory’ means

21 Puerto Rico, the Virgin Islands, Guam, and Amer22 ican Samoa.

23 ‘‘(2) CEILING AMOUNT.—The term ‘ceiling

24 amount’ means, with respect to a territory and a fis25 cal year, the mandatory ceiling amount with respect
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1 to the territory, reduced for the fiscal year in ac2 cordance with subsection (e).

3 ‘‘(3) MANDATORY CEILING AMOUNT.—The term

4 ‘mandatory ceiling amount’ means—

5 ‘‘(A) $102,040,000 with respect to for

6 Puerto Rico;

7 ‘‘(B) $4,683,000 with respect to Guam;

8 ‘‘(C) $3,554,000 with respect to the Virgin

9 Islands; and

10 ‘‘(D) $1,000,000 with respect to American

11 Samoa.

12 ‘‘(4) TOTAL AMOUNT EXPENDED BY THE TER13 RITORY.—The term ‘total amount expended by the

14 territory’—

15 ‘‘(A) does not include expenditures during

16 the fiscal year from amounts made available by

17 the Federal Government; and

18 ‘‘(B) when used with respect to fiscal year

19 1995, also does not include—

20 ‘‘(i) expenditures during fiscal year

21 1995 under subsection (g) or (i) of section

22 402 (as in effect on September 30, 1995);

23 or

24 ‘‘(ii) any expenditures during fiscal

25 year 1995 for which the territory (but for
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1 section 1108, as in effect on September 30,

2 1995) would have received reimbursement

3 from the Federal Government.

4 ‘‘(d) AUTHORITY TO TRANSFER FUNDS AMONG PRO5 GRAMS.—Notwithstanding any other provision of this Act,

6 any territory to which an amount is paid under any provi7 sion of law specified in subsection (a) may use part or

8 all of the amount to carry out any program operated by

9 the territory, or funded, under any other such provision

10 of law.

11 ‘‘(e) MAINTENANCE OF EFFORT.—The ceiling

12 amount with respect to a territory shall be reduced for

13 a fiscal year by an amount equal to the amount (if any)

14 by which—

15 ‘‘(1) the total amount expended by the territory

16 under all programs of the territory operated pursu17 ant to the provisions of law specified in subsection

18 (a) (as such provisions were in effect for fiscal year

19 1995) for fiscal year 1995; exceeds

20 ‘‘(2) the total amount expended by the territory

21 under all programs of the territory that are funded

22 under the provisions of law specified in subsection

23 (a) for the fiscal year that immediately precedes the

24 fiscal year referred to in the matter preceding para25 graph (1).’’; and
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1 (3) by striking subsections (d) and (e).

2 (c) REPEAL OF PROVISIONS REQUIRING REDUCTION

3 OF MEDICAID PAYMENTS TO STATES THAT REDUCE

4 WELFARE PAYMENT LEVELS.—

5 (1) Section 1903(i) (42 U.S.C. 1396b(i)) is

6 amended by striking paragraph (9).

7 (2) Section 1902 (42 U.S.C. 1396a) is amended

8 by striking subsection (c).

9 (d) ELIMINATION OF CHILD CARE PROGRAMS

10 UNDER THE SOCIAL SECURITY ACT.—

11 (1) AFDC AND TRANSITIONAL CHILD CARE

12 PROGRAMS.—Section 402 (42 U.S.C. 602) is amend13 ed by striking subsection (g).

14 (2) AT-RISK CHILD CARE PROGRAM.—

15 (A) AUTHORIZATION.—Section 402 (42

16 U.S.C. 602) is amended by striking subsection

17 (i).

18 (B) FUNDING PROVISIONS.—Section 403

19 (42 U.S.C. 603) is amended by striking sub20 section (n).

21 SEC. 2104. SERVICES PROVIDED BY CHARITABLE, RELI22 GIOUS, OR PRIVATE ORGANIZATIONS.

23 (a) IN GENERAL.—

24 (1) STATE OPTIONS.—A State may—
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1 (A) administer and provide services under

2 the programs described in subparagraphs (A)

3 and (B)(i) of paragraph (2) through contracts

4 with charitable, religious, or private organiza5 tions; and

6 (B) provide beneficiaries of assistance

7 under the programs described in subparagraphs

8 (A) and (B)(ii) of paragraph (2) with certifi9 cates, vouchers, or other forms of disbursement

10 which are redeemable with such organizations.

11 (2) PROGRAMS DESCRIBED.—The programs de12 scribed in this paragraph are the following pro13 grams:

14 (A) A State program funded under part A

15 of title IV of the Social Security Act (as amend16 ed by section 2103(a) of this Act).

17 (B) Any other program established or

18 modified under chapter 1 or 2 of this subtitle,

19 that—

20 (i) permits contracts with organiza21 tions; or

22 (ii) permits certificates, vouchers, or

23 other forms of disbursement to be provided

24 to beneficiaries, as a means of providing

25 assistance.
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1 (b) RELIGIOUS ORGANIZATIONS.—The purpose of

2 this section is to allow States to contract with religious

3 organizations, or to allow religious organizations to accept

4 certificates, vouchers, or other forms of disbursement

5 under any program described in subsection (a)(2), on the

6 same basis as any other nongovernmental provider without

7 impairing the religious character of such organizations,

8 and without diminishing the religious freedom of bene9 ficiaries of assistance funded under such program.

10 (c) NONDISCRIMINATION AGAINST RELIGIOUS ORGA11 NIZATIONS.—In the event a State exercises its authority

12 under subsection (a), religious organizations are eligible,

13 on the same basis as any other private organization, as

14 contractors to provide assistance, or to accept certificates,

15 vouchers, or other forms of disbursement, under any pro16 gram described in subsection (a)(2) so long as the pro17 grams are implemented consistent with the Establishment

18 Clause of the United States Constitution. Except as pro19 vided in subsection (k), neither the Federal Government

20 nor a State receiving funds under such programs shall dis21 criminate against an organization which is or applies to

22 be a contractor to provide assistance, or which accepts cer23 tificates, vouchers, or other forms of disbursement, on the

24 basis that the organization has a religious character.

25 (d) RELIGIOUS CHARACTER AND FREEDOM.—
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1 (1) RELIGIOUS ORGANIZATIONS.—A religious

2 organization with a contract described in subsection

3 (a)(1)(A), or which accepts certificates, vouchers, or

4 other forms of disbursement under subsection

5 (a)(1)(B), shall retain its independence from Fed6 eral, State, and local governments, including such

7 organization’s control over the definition, develop8 ment, practice, and expression of its religious beliefs.

9 (2) ADDITIONAL SAFEGUARDS.—Neither the

10 Federal Government nor a State shall require a reli11 gious organization to—

12 (A) alter its form of internal governance;

13 or

14 (B) remove religious art, icons, scripture,

15 or other symbols;

16 in order to be eligible to contract to provide assist17 ance, or to accept certificates, vouchers, or other

18 forms of disbursement, funded under a program de19 scribed in subsection (a)(2).

20 (e) RIGHTS OF BENEFICIARIES OF ASSISTANCE.—

21 (1) IN GENERAL.—If an individual described in

22 paragraph (2) has an objection to the religious char23 acter of the organization or institution from which

24 the individual receives, or would receive, assistance

25 funded under any program described in subsection
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1 (a)(2), the State in which the individual resides shall

2 provide such individual (if otherwise eligible for such

3 assistance) within a reasonable period of time after

4 the date of such objection with assistance from an

5 alternative provider that is accessible to the individ6 ual and the value of which is not less than the value

7 of the assistance which the individual would have re8 ceived from such organization.

9 (2) INDIVIDUAL DESCRIBED.—An individual de10 scribed in this paragraph is an individual who re11 ceives, applies for, or requests to apply for, assist12 ance under a program described in subsection (a)(2).

13 (f) EMPLOYMENT PRACTICES.—A religious organiza14 tion’s exemption provided under section 702 of the Civil

15 Rights Act of 1964 (42 U.S.C. 2000e–1a) regarding em16 ployment practices shall not be affected by its participa17 tion in, or receipt of funds from, programs described in

18 subsection (a)(2).

19 (g) NONDISCRIMINATION AGAINST BENE20 FICIARIES.—Except as otherwise provided in law, a reli21 gious organization shall not discriminate against an indi22 vidual in regard to rendering assistance funded under any

23 program described in subsection (a)(2) on the basis of reli24 gion, a religious belief, or refusal to actively participate

25 in a religious practice.
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1 (h) FISCAL ACCOUNTABILITY.—

2 (1) IN GENERAL.—Except as provided in para3 graph (2), any religious organization contracting to

4 provide assistance funded under any program de5 scribed in subsection (a)(2) shall be subject to the

6 same regulations as other contractors to account in

7 accord with generally accepted auditing principles

8 for the use of such funds provided under such pro9 grams.

10 (2) LIMITED AUDIT.—If such organization seg11 regates Federal funds provided under such programs

12 into separate accounts, then only the financial as13 sistance provided with such funds shall be subject to

14 audit.

15 (i) COMPLIANCE.—Any party which seeks to enforce

16 its rights under this section may assert a civil action for

17 injunctive relief exclusively in an appropriate State court

18 against the entity or agency that allegedly commits such

19 violation.

20 (j) LIMITATIONS ON USE OF FUNDS FOR CERTAIN

21 PURPOSES.—No funds provided directly to institutions or

22 organizations to provide services and administer programs

23 under subsection (a)(1)(A) shall be expended for sectarian

24 worship, instruction, or proselytization.
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1 (k) PREEMPTION.—Nothing in this section shall be

2 construed to preempt any provision of a State constitution

3 or State statute that prohibits or restricts the expenditure

4 of State funds in or by religious organizations.

5 SEC. 2105. CENSUS DATA ON GRANDPARENTS AS PRIMARY

6 CAREGIVERS FOR THEIR GRANDCHILDREN.

7 (a) IN GENERAL.—Not later than 90 days after the

8 date of the enactment of this Act, the Secretary of Com9 merce, in carrying out section 141 of title 13, United

10 States Code, shall expand the data collection efforts of the

11 Bureau of the Census (in this section referred to as the

12 ‘‘Bureau’’) to enable the Bureau to collect statistically sig13 nificant data, in connection with its decennial census and

14 its mid-decade census, concerning the growing trend of

15 grandparents who are the primary caregivers for their

16 grandchildren.

17 (b) EXPANDED CENSUS QUESTION.—In carrying out

18 subsection (a), the Secretary of Commerce shall expand

19 the Bureau’s census question that details households

20 which include both grandparents and their grandchildren.

21 The expanded question shall be formulated to distinguish

22 between the following households:

23 (1) A household in which a grandparent tempo24 rarily provides a home for a grandchild for a period
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1 of weeks or months during periods of parental dis2 tress.

3 (2) A household in which a grandparent pro4 vides a home for a grandchild and serves as the pri5 mary caregiver for the grandchild.

6 SEC. 2106. REPORT ON DATA PROCESSING.

7 (a) IN GENERAL.—Within 6 months after the date

8 of the enactment of this Act, the Secretary of Health and

9 Human Services shall prepare and submit to the Congress

10 a report on—

11 (1) the status of the automated data processing

12 systems operated by the States to assist manage13 ment in the administration of State programs under

14 part A of title IV of the Social Security Act (wheth15 er in effect before or after October 1, 1995); and

16 (2) what would be required to establish a sys17 tem capable of—

18 (A) tracking participants in public pro19 grams over time; and

20 (B) checking case records of the States to

21 determine whether individuals are participating

22 in public programs of 2 or more States.

23 (b) PREFERRED CONTENTS.—The report required by

24 subsection (a) should include—
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1 (1) a plan for building on the automated data

2 processing systems of the States to establish a sys3 tem with the capabilities described in subsection

4 (a)(2); and

5 (2) an estimate of the amount of time required

6 to establish such a system and of the cost of estab7 lishing such a system.

8 SEC. 2107. STUDY ON ALTERNATIVE OUTCOMES MEASURES.

9 (a) STUDY.—The Secretary shall, in cooperation with

10 the States, study and analyze outcomes measures for eval11 uating the success of the States in moving individuals out

12 of the welfare system through employment as an alter13 native to the minimum participation rates described in

14 section 407 of the Social Security Act. The study shall

15 include a determination as to whether such alternative

16 outcomes measures should be applied on a national or a

17 State-by-State basis and a preliminary assessment of the

18 effects of section 409(a)(7)(C) of such Act.

19 (b) REPORT.—Not later than September 30, 1998,

20 the Secretary shall submit to the Committee on Finance

21 of the Senate and the Committee on Ways and Means of

22 the House of Representatives a report containing the find23 ings of the study required by subsection (a).
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1 SEC. 2108. WELFARE FORMULA FAIRNESS COMMISSION.

2 (a) ESTABLISHMENT.—There is established a com3 mission to be known as the Welfare Formula Fairness

4 Commission (in this section referred to as the ‘‘Commis5 sion’’).

6 (b) MEMBERSHIP.—

7 (1) COMPOSITION.—The Commission shall be

8 composed of 13 members, of whom—

9 (A) 3 shall be appointed by the President,

10 of whom not more than 2 shall be of the same

11 political party;

12 (B) 3 shall be appointed by the Majority

13 Leader of the Senate;

14 (C) 2 shall be appointed by the Minority

15 Leader of the Senate;

16 (D) 3 shall be appointed by the Speaker of

17 the House of Representatives; and

18 (E) 2 shall be appointed by the Minority

19 Leader of the House of Representatives.

20 (2) DATE.—The appointments of the members

21 of the Commission shall be made not later than 30

22 days after the date of the enactment of this Act.

23 (c) PERIOD OF APPOINTMENT; VACANCIES.—Mem24 bers shall be appointed for the life of the Commission. Any

25 vacancy in the Commission shall not affect its powers, but
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1 shall be filled in the same manner as the original appoint2 ment.

3 (d) INITIAL MEETING.—Not later than 30 days after

4 the date on which all members of the Commission have

5 been appointed, the Commission shall hold its first meet6 ing.

7 (e) MEETINGS.—The Commission shall meet at the

8 call of the Chair.

9 (f) QUORUM.—A majority of the members of the

10 Commission shall constitute a quorum, but a lesser num11 ber of members may hold hearings.

12 (g) CHAIR AND VICE CHAIR.—The Commission shall

13 select a Chair and Vice Chair from among its members.

14 (h) DUTIES OF THE COMMISSION.—

15 (1) STUDY.—The Commission shall study—

16 (A) the temporary assistance for needy

17 families block grant program established under

18 part A of title IV of the Social Security Act, as

19 amended by section 2103 of this Act; and

20 (B) the funding formulas applied, the

21 bonus payments provided, and the work re22 quirements established under such program.

23 (2) REPORT.—Not later than September 1,

24 1998, the Commission shall submit a report to the
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1 Congress on the matters studied under paragraph

2 (1).

3 (i) POWERS OF THE COMMISSION.—

4 (1) HEARINGS.—The Commission may hold

5 such hearings, sit and act at such times and places,

6 take such testimony, and receive such evidence as

7 the Commission considers advisable to carry out the

8 purposes of this section.

9 (2) INFORMATION FROM FEDERAL AGENCIES.—

10 The Commission may secure directly from any Fed11 eral department or agency such information as the

12 Commission considers necessary to carry out the

13 provisions of this section. Upon request of the Chair

14 of the Commission, the head of such department or

15 agency shall furnish such information to the Com16 mission.

17 (3) POSTAL SERVICES.—The Commission may

18 use the United States mails in the same manner and

19 under the same conditions as other departments and

20 agencies of the Federal Government.

21 (4) GIFTS.—The Commission may accept, use,

22 and dispose of gifts or donations of services or prop23 erty.

24 (j) PERSONNEL MATTERS.—
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1 (1) COMPENSATION OF MEMBERS.—Each mem2 ber of the Commission who is not an officer or em3 ployee of the Federal Government shall be com4 pensated at a rate equal to the daily equivalent of

5 the annual rate of basic pay prescribed for level IV

6 of the Executive Schedule under section 5315 of title

7 5, United States Code, for each day (including travel

8 time) during which such member is engaged in the

9 performance of the duties of the Commission. All

10 members of the Commission who are officers or em11 ployees of the United States shall serve without com12 pensation in addition to that received for their serv13 ices as officers or employees of the United States.

14 (2) TRAVEL EXPENSES.—The members of the

15 Commission shall be allowed travel expenses, includ16 ing per diem in lieu of subsistence, at rates author17 ized for employees of agencies under subchapter I of

18 chapter 57 of title 5, United States Code, while

19 away from their homes or regular places of business

20 in the performance of services for the Commission.

21 (3) STAFF.—

22 (A) IN GENERAL.—The Chair of the Com23 mission may, without regard to the civil service

24 laws and regulations, appoint and terminate an

25 executive director and such other additional
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1 personnel as may be necessary to enable the

2 Commission to perform its duties. The employ3 ment of an executive director shall be subject to

4 confirmation by the Commission.

5 (B) COMPENSATION.—The Chair of the

6 Commission may fix the compensation of the

7 executive director and other personnel without

8 regard to the provisions of chapter 51 and sub9 chapter III of chapter 53 of title 5, United

10 States Code, relating to classification of posi11 tions and General Schedule pay rates, except

12 that the rate of pay for the executive director

13 and other personnel may not exceed the rate

14 payable for level V of the Executive Schedule

15 under section 5316 of such title.

16 (4) DETAIL OF GOVERNMENT EMPLOYEES.—

17 Any Federal Government employee may be detailed

18 to the Commission without reimbursement, and such

19 detail shall be without interruption or loss of civil

20 service status or privilege.

21 (5) PROCUREMENT OF TEMPORARY AND INTER22 MITTENT SERVICES.—The Chair of the Commission

23 may procure temporary and intermittent services

24 under section 3109(b) of title 5, United States Code,

25 at rates for individuals which do not exceed the daily
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1 equivalent of the annual rate of basic pay prescribed

2 for level V of the Executive Schedule under section

3 5316 of such title.

4 (k) TERMINATION OF THE COMMISSION.—The Com5 mission shall terminate not later than December 31, 1998.

6 (l) AUTHORIZATION OF APPROPRIATIONS.—There is

7 authorized to be appropriated to the Commission such

8 sums as are necessary to carry out the purposes of this

9 section.

10 SEC. 2109. CONFORMING AMENDMENTS TO THE SOCIAL SE11 CURITY ACT.

12 (a) AMENDMENTS TO PART D OF TITLE IV.—

13 (1) Section 451 (42 U.S.C. 651) is amended by

14 striking ‘‘aid’’ and inserting ‘‘assistance under a

15 State program funded’’.

16 (2) Section 452(a)(10)(C) (42 U.S.C.

17 652(a)(10)(C)) is amended—

18 (A) by striking ‘‘aid to families with de19 pendent children’’ and inserting ‘‘assistance

20 under a State program funded under part A’’;

21 (B) by striking ‘‘such aid’’ and inserting

22 ‘‘such assistance’’; and

23 (C) by striking ‘‘under section 402(a)(26)

24 or’’ and inserting ‘‘pursuant to section

25 408(a)(4) or under section’’.
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1 (3) Section 452(a)(10)(F) (42 U.S.C.

2 652(a)(10)(F)) is amended—

3 (A) by striking ‘‘aid under a State plan ap4 proved’’ and inserting ‘‘assistance under a State

5 program funded’’; and

6 (B) by striking ‘‘in accordance with the

7 standards referred to in section

8 402(a)(26)(B)(ii)’’ and inserting ‘‘by the

9 State’’.

10 (4) Section 452(b) (42 U.S.C. 652(b)) is

11 amended in the first sentence by striking ‘‘aid under

12 the State plan approved under part A’’ and inserting

13 ‘‘assistance under the State program funded under

14 part A’’.

15 (5) Section 452(d)(3)(B)(i) (42 U.S.C.

16 652(d)(3)(B)(i)) is amended by striking ‘‘1115(c)’’

17 and inserting ‘‘1115(b)’’.

18 (6) Section 452(g)(2)(A)(ii)(I) (42 U.S.C.

19 652(g)(2)(A)(ii)(I)) is amended by striking ‘‘aid is

20 being paid under the State’s plan approved under

21 part A or E’’ and inserting ‘‘assistance is being pro22 vided under the State program funded under part

23 A’’.

24 (7) Section 452(g)(2)(A) (42 U.S.C.

25 652(g)(2)(A)) is amended in the matter following
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1 clause (iii) by striking ‘‘aid was being paid under the

2 State’s plan approved under part A or E’’ and in3 serting ‘‘assistance was being provided under the

4 State program funded under part A’’.

5 (8) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is

6 amended in the matter following subparagraph

7 (B)—

8 (A) by striking ‘‘who is a dependent child’’

9 and inserting ‘‘with respect to whom assistance

10 is being provided under the State program

11 funded under part A’’;

12 (B) by inserting ‘‘by the State’’ after

13 ‘‘found’’; and

14 (C) by striking ‘‘to have good cause for re15 fusing to cooperate under section 402(a)(26)’’

16 and inserting ‘‘to qualify for a good cause or

17 other exception to cooperation pursuant to sec18 tion 454(29)’’.

19 (9) Section 452(h) (42 U.S.C. 652(h)) is

20 amended by striking ‘‘under section 402(a)(26)’’ and

21 inserting ‘‘pursuant to section 408(a)(4)’’.

22 (10) Section 453(c)(3) (42 U.S.C. 653(c)(3)) is

23 amended by striking ‘‘aid under part A of this title’’

24 and inserting ‘‘assistance under a State program

25 funded under part A’’.
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1 (11) Section 454(5)(A) (42 U.S.C. 654(5)(A)))

2 is amended—

3 (A) by striking ‘‘under section 402(a)(26)’’

4 and inserting ‘‘pursuant to section 408(a)(4)’’;

5 and

6 (B) by striking ‘‘; except that this para7 graph shall not apply to such payments for any

8 month following the first month in which the

9 amount collected is sufficient to make such

10 family ineligible for assistance under the State

11 plan approved under part A;’’ and inserting a

12 comma.

13 (12) Section 454(6)(D) (42 U.S.C. 654(6)(D))

14 is amended by striking ‘‘aid under a State plan ap15 proved’’ and inserting ‘‘assistance under a State pro16 gram funded’’.

17 (13) Section 456(a)(1) (42 U.S.C. 656(a)(1)) is

18 amended by striking ‘‘under section 402(a)(26)’’.

19 (14) Section 466(a)(3)(B) (42 U.S.C.

20 666(a)(3)(B)) is amended by striking ‘‘402(a)(26)’’

21 and inserting ‘‘408(a)(3)’’.

22 (15) Section 466(b)(2) (42 U.S.C. 666(b)(2)) is

23 amended by striking ‘‘aid’’ and inserting ‘‘assistance

24 under a State program funded’’.
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1 (16) Section 469(a) (42 U.S.C. 669(a)) is

2 amended—

3 (A) by striking ‘‘aid under plans approved’’

4 and inserting ‘‘assistance under State programs

5 funded’’; and

6 (B) by striking ‘‘such aid’’ and inserting

7 ‘‘such assistance’’.

8 (b) REPEAL OF PART F OF TITLE IV.—Part F of

9 title IV (42 U.S.C. 681–687) is repealed.

10 (c) AMENDMENT TO TITLE X.—Section 1002(a)(7)

11 (42 U.S.C. 1202(a)(7)) is amended by striking ‘‘aid to

12 families with dependent children under the State plan ap13 proved under section 402 of this Act’’ and inserting ‘‘as14 sistance under a State program funded under part A of

15 title IV’’.

16 (d) AMENDMENTS TO TITLE XI.—

17 (1) Section 1109 (42 U.S.C. 1309) is amended

18 by striking ‘‘or part A of title IV,’’.

19 (2) Section 1115 (42 U.S.C. 1315) is amend20 ed—

21 (A) in subsection (a)(2)—

22 (i) by inserting ‘‘(A)’’ after ‘‘(2)’’;

23 (ii) by striking ‘‘403,’’;

24 (iii) by striking the period at the end

25 and inserting ‘‘, and’’; and
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•S 1956 PCS

1 (iv) by adding at the end the following

2 new subparagraph:

3 ‘‘(B) costs of such project which would not oth4 erwise be a permissible use of funds under part A

5 of title IV and which are not included as part of the

6 costs of projects under section 1110, shall to the ex7 tent and for the period prescribed by the Secretary,

8 be regarded as a permissible use of funds under

9 such part.’’; and

10 (B) in subsection (c)(3), by striking ‘‘the

11 program of aid to families with dependent chil12 dren’’ and inserting ‘‘part A of such title’’.

13 (3) Section 1116 (42 U.S.C. 1316) is amend14 ed—

15 (A) in each of subsections (a)(1), (b), and

16 (d), by striking ‘‘or part A of title IV,’’; and

17 (B) in subsection (a)(3), by striking

18 ‘‘404,’’.

19 (4) Section 1118 (42 U.S.C. 1318) is amend20 ed—

21 (A) by striking ‘‘403(a),’’;

22 (B) by striking ‘‘and part A of title IV,’’;

23 and
330

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1 (C) by striking ‘‘, and shall, in the case of

2 American Samoa, mean 75 per centum with re3 spect to part A of title IV’’.

4 (5) Section 1119 (42 U.S.C. 1319) is amend5 ed—

6 (A) by striking ‘‘or part A of title IV’’; and

7 (B) by striking ‘‘403(a),’’.

8 (6) Section 1133(a) (42 U.S.C. 1320b–3(a)) is

9 amended by striking ‘‘or part A of title IV,’’.

10 (7) Section 1136 (42 U.S.C. 1320b–6) is re11 pealed.

12 (8) Section 1137 (42 U.S.C. 1320b–7) is

13 amended—

14 (A) in subsection (b), by striking para15 graph (1) and inserting the following:

16 ‘‘(1) any State program funded under part A of

17 title IV of this Act;’’; and

18 (B) in subsection (d)(1)(B)—

19 (i) by striking ‘‘In this subsection—’’

20 and all that follows through ‘‘(ii) in’’ and

21 inserting ‘‘In this subsection, in’’;

22 (ii) by redesignating subclauses (I),

23 (II), and (III) as clauses (i), (ii), and (iii);

24 and
331

•S 1956 PCS

1 (iii) by moving such redesignated ma2 terial 2 ems to the left.

3 (e) AMENDMENT TO TITLE XIV.—Section

4 1402(a)(7) (42 U.S.C. 1352(a)(7)) is amended by striking

5 ‘‘aid to families with dependent children under the State

6 plan approved under section 402 of this Act’’ and insert7 ing ‘‘assistance under a State program funded under part

8 A of title IV’’.

9 (f) AMENDMENT TO TITLE XVI AS IN EFFECT WITH

10 RESPECT TO THE TERRITORIES.—Section 1602(a)(11),

11 as in effect without regard to the amendment made by

12 section 301 of the Social Security Amendments of 1972

13 (42 U.S.C. 1382 note), is amended by striking ‘‘aid under

14 the State plan approved’’ and inserting ‘‘assistance under

15 a State program funded’’.

16 (g) AMENDMENT TO TITLE XVI AS IN EFFECT WITH

17 RESPECT TO THE STATES.—Section 1611(c)(5)(A) (42

18 U.S.C. 1382(c)(5)(A)) is amended to read as follows: ‘‘(A)

19 a State program funded under part A of title IV,’’.

20 (h) AMENDMENT TO TITLE XIX.—Section 1902(j)

21 (42 U.S.C. 1396a(j)) is amended by striking ‘‘1108(c)’’

22 and inserting ‘‘1108(g)’’.
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1 SEC. 2110. CONFORMING AMENDMENTS TO THE FOOD

2 STAMP ACT OF 1977 AND RELATED PROVI3 SIONS.

4 (a) Section 5 of the Food Stamp Act of 1977 (7

5 U.S.C. 2014) is amended—

6 (1) in the second sentence of subsection (a), by

7 striking ‘‘plan approved’’ and all that follows

8 through ‘‘title IV of the Social Security Act’’ and in9 serting ‘‘program funded under part A of title IV of

10 the Social Security Act (42 U.S.C. 601 et seq.)’’;

11 (2) in subsection (d)—

12 (A) in paragraph (5), by striking ‘‘assist13 ance to families with dependent children’’ and

14 inserting ‘‘assistance under a State program

15 funded’’; and

16 (B) by striking paragraph (13) and redes17 ignating paragraphs (14), (15), and (16) as

18 paragraphs (13), (14), and (15), respectively;

19 (3) in subsection (j), by striking ‘‘plan approved

20 under part A of title IV of such Act (42 U.S.C. 601

21 et seq.)’’ and inserting ‘‘program funded under part

22 A of title IV of the Act (42 U.S.C. 601 et seq.)’’;

23 and

24 (4) by striking subsection (m) and redesignat25 ing subsection (n), as added by section 1122, as sub26 section (m).
333

•S 1956 PCS

1 (b) Section 6 of such Act (7 U.S.C. 2015) is amend2 ed—

3 (1) in subsection (c)(5), by striking ‘‘the State

4 plan approved’’ and inserting ‘‘the State program

5 funded’’; and

6 (2) in subsection (e)(6), by striking ‘‘aid to

7 families with dependent children’’ and inserting

8 ‘‘benefits under a State program funded’’.

9 (c) Section 16(g)(4) of such Act (7 U.S.C.

10 2025(g)(4)) is amended by striking ‘‘State plans under the

11 Aid to Families with Dependent Children Program under’’

12 and inserting ‘‘State programs funded under part A of’’.

13 (d) Section 17(b)(3) of such Act (7 U.S.C.

14 2026(b)(3)) is amended by adding at the end the following

15 new subparagraph:

16 ‘‘(I) The Secretary may not grant a waiver under this

17 paragraph on or after October 1, 1995. Any reference in

18 this paragraph to a provision of title IV of the Social Secu19 rity Act shall be deemed to be a reference to such provision

20 as in effect on September 30, 1995.’’.

21 (e) Section 20 of such Act (7 U.S.C. 2029) is amend22 ed—

23 (1) in subsection (a)(2)(B) by striking ‘‘operat24 ing—’’ and all that follows through ‘‘(ii) any other’’

25 and inserting ‘‘operating any’’; and
334

•S 1956 PCS

1 (2) in subsection (b)—

2 (A) in paragraph (1)—

3 (i) by striking ‘‘(b)(1) A household’’

4 and inserting ‘‘(b) A household’’; and

5 (ii) in subparagraph (B), by striking

6 ‘‘training program’’ and inserting ‘‘activ7 ity’’;

8 (B) by striking paragraph (2); and

9 (C) by redesignating subparagraphs (A)

10 through (F) as paragraphs (1) through (6), re11 spectively.

12 (f) Section 5(h)(1) of the Agriculture and Consumer

13 Protection Act of 1973 (Public Law 93–186; 7 U.S.C.

14 612c note) is amended by striking ‘‘the program for aid

15 to families with dependent children’’ and inserting ‘‘the

16 State program funded’’.

17 (g) Section 9 of the National School Lunch Act (42

18 U.S.C. 1758) is amended—

19 (1) in subsection (b)—

20 (A) in paragraph (2)(B)(ii)(II), as amend21 ed by section 1202(b)—

22 (i) by striking ‘‘program for aid to

23 families with dependent children’’ and in24 serting ‘‘State program funded’’; and
335

•S 1956 PCS

1 (ii) by inserting before the period at

2 the end the following: ‘‘(42 U.S.C. 601 et

3 seq.) that the Secretary determines com4 plies with standards established by the

5 Secretary that ensure that the standards

6 under the State program are comparable

7 to or more restrictive than those in effect

8 on June 1, 1995’’; and

9 (B) in paragraph (6)—

10 (i) in subparagraph (A)(ii)—

11 (I) by striking ‘‘an AFDC assist12 ance unit (under the aid to families

13 with dependent children program au14 thorized’’ and inserting ‘‘a family

15 (under the State program funded’’;

16 and

17 (II) by striking ‘‘, in a State’’

18 and all that follows through

19 ‘‘9902(2)))’’ and inserting ‘‘that the

20 Secretary determines complies with

21 standards established by the Secretary

22 that ensure that the standards under

23 the State program are comparable to

24 or more restrictive than those in effect

25 on June 1, 1995’’; and
336

•S 1956 PCS

1 (ii) in subparagraph (B), by striking

2 ‘‘aid to families with dependent children’’

3 and inserting ‘‘assistance under the State

4 program funded under part A of title IV of

5 the Social Security Act (42 U.S.C. 601 et

6 seq.) that the Secretary determines com7 plies with standards established by the

8 Secretary that ensure that the standards

9 under the State program are comparable

10 to or more restrictive than those in effect

11 on June 1, 1995’’; and

12 (2) in subsection (d)(2)(C)—

13 (A) by striking ‘‘program for aid to fami14 lies with dependent children’’ and inserting

15 ‘‘State program funded’’; and

16 (B) by inserting before the period at the

17 end the following: ‘‘(42 U.S.C. 601 et seq.) that

18 the Secretary determines complies with stand19 ards established by the Secretary that ensure

20 that the standards under the State program are

21 comparable to or more restrictive than those in

22 effect on June 1, 1995’’.

23 (h) Section 17(d)(2)(A)(ii)(II) of the Child Nutrition

24 Act of 1966 (42 U.S.C. 1786(d)(2)(A)(ii)(II)) is amend25 ed—
337

•S 1956 PCS

1 (1) by striking ‘‘program for aid to families

2 with dependent children established’’ and inserting

3 ‘‘State program funded’’; and

4 (2) by inserting before the semicolon the follow5 ing: ‘‘(42 U.S.C. 601 et seq.) that the Secretary de6 termines complies with standards established by the

7 Secretary that ensure that the standards under the

8 State program are comparable to or more restrictive

9 than those in effect on June 1, 1995’’.

10 SEC. 2111. CONFORMING AMENDMENTS TO OTHER LAWS.

11 (a) Subsection (b) of section 508 of the Unemploy12 ment Compensation Amendments of 1976 (42 U.S.C.

13 603a; Public Law 94–566; 90 Stat. 2689) is amended to

14 read as follows:

15 ‘‘(b) PROVISION FOR REIMBURSEMENT OF EX16 PENSES.—For purposes of section 455 of the Social Secu17 rity Act, expenses incurred to reimburse State employment

18 offices for furnishing information requested of such of19 fices—

20 ‘‘(1) pursuant to the third sentence of section

21 3(a) of the Act entitled ‘An Act to provide for the

22 establishment of a national employment system and

23 for cooperation with the States in the promotion of

24 such system, and for other purposes’, approved June

25 6, 1933 (29 U.S.C. 49b(a)), or
338

•S 1956 PCS

1 ‘‘(2) by a State or local agency charged with

2 the duty of carrying a State plan for child support

3 approved under part D of title IV of the Social Se4 curity Act,

5 shall be considered to constitute expenses incurred in the

6 administration of such State plan.’’.

7 (b) Section 9121 of the Omnibus Budget Reconcili8 ation Act of 1987 (42 U.S.C. 602 note) is repealed.

9 (c) Section 9122 of the Omnibus Budget Reconcili10 ation Act of 1987 (42 U.S.C. 602 note) is repealed.

11 (d) Section 221 of the Housing and Urban-Rural Re12 covery Act of 1983 (42 U.S.C. 602 note), relating to treat13 ment under AFDC of certain rental payments for federally

14 assisted housing, is repealed.

15 (e) Section 159 of the Tax Equity and Fiscal Respon16 sibility Act of 1982 (42 U.S.C. 602 note) is repealed.

17 (f) Section 202(d) of the Social Security Amendments

18 of 1967 (81 Stat. 882; 42 U.S.C. 602 note) is repealed.

19 (g) Section 903 of the Stewart B. McKinney Home20 less Assistance Amendments Act of 1988 (42 U.S.C.

21 11381 note), relating to demonstration projects to reduce

22 number of AFDC families in welfare hotels, is amended—

23 (1) in subsection (a), by striking ‘‘aid to fami24 lies with dependent children under a State plan ap-
339

•S 1956 PCS

1 proved’’ and inserting ‘‘assistance under a State pro2 gram funded’’; and

3 (2) in subsection (c), by striking ‘‘aid to fami4 lies with dependent children in the State under a

5 State plan approved’’ and inserting ‘‘assistance in

6 the State under a State program funded’’.

7 (h) The Higher Education Act of 1965 (20 U.S.C.

8 1001 et seq.) is amended—

9 (1) in section 404C(c)(3) (20 U.S.C. 1070a–

10 23(c)(3)), by striking ‘‘(Aid to Families with De11 pendent Children)’’; and

12 (2) in section 480(b)(2) (20 U.S.C.

13 1087vv(b)(2)), by striking ‘‘aid to families with de14 pendent children under a State plan approved’’ and

15 inserting ‘‘assistance under a State program fund16 ed’’.

17 (i) The Carl D. Perkins Vocational and Applied Tech18 nology Education Act (20 U.S.C. 2301 et seq.) is amend19 ed—

20 (1) in section 231(d)(3)(A)(ii) (20 U.S.C.

21 2341(d)(3)(A)(ii)), by striking ‘‘The program for aid

22 to dependent children’’ and inserting ‘‘The State

23 program funded’’;

24 (2) in section 232(b)(2)(B) (20 U.S.C.

25 2341a(b)(2)(B)), by striking ‘‘the program for aid to
340

•S 1956 PCS

1 families with dependent children’’ and inserting ‘‘the

2 State program funded’’; and

3 (3) in section 521(14)(B)(iii) (20 U.S.C.

4 2471(14)(B)(iii)), by striking ‘‘the program for aid

5 to families with dependent children’’ and inserting

6 ‘‘the State program funded’’.

7 (j) The Elementary and Secondary Education Act of

8 1965 (20 U.S.C. 2701 et seq.) is amended—

9 (1) in section 1113(a)(5) (20 U.S.C.

10 6313(a)(5)), by striking ‘‘Aid to Families with De11 pendent Children program’’ and inserting ‘‘State

12 program funded under part A of title IV of the So13 cial Security Act’’;

14 (2) in section 1124(c)(5) (20 U.S.C.

15 6333(c)(5)), by striking ‘‘the program of aid to fam16 ilies with dependent children under a State plan ap17 proved under’’ and inserting ‘‘a State program fund18 ed under part A of’’; and

19 (3) in section 5203(b)(2) (20 U.S.C.

20 7233(b)(2))—

21 (A) in subparagraph (A)(xi), by striking

22 ‘‘Aid to Families with Dependent Children ben23 efits’’ and inserting ‘‘assistance under a State

24 program funded under part A of title IV of the

25 Social Security Act’’; and
341

•S 1956 PCS

1 (B) in subparagraph (B)(viii), by striking

2 ‘‘Aid to Families with Dependent Children’’ and

3 inserting ‘‘assistance under the State program

4 funded under part A of title IV of the Social

5 Security Act’’.

6 (k) The 4th proviso of chapter VII of title I of Public

7 Law 99–88 (25 U.S.C. 13d–1) is amended to read as fol8 lows: ‘‘Provided further, That general assistance payments

9 made by the Bureau of Indian Affairs shall be made—

10 ‘‘(1) after April 29, 1985, and before October

11 1, 1995, on the basis of Aid to Families with De12 pendent Children (AFDC) standards of need; and

13 ‘‘(2) on and after October 1, 1995, on the basis

14 of standards of need established under the State

15 program funded under part A of title IV of the So16 cial Security Act,

17 except that where a State ratably reduces its AFDC or

18 State program payments, the Bureau shall reduce general

19 assistance payments in such State by the same percentage

20 as the State has reduced the AFDC or State program pay21 ment.’’.

22 (l) The Internal Revenue Code of 1986 (26 U.S.C.

23 1 et seq.) is amended—

24 (1) in section 51(d)(9) (26 U.S.C. 51(d)(9)), by

25 striking all that follows ‘‘agency as’’ and inserting
342

•S 1956 PCS

1 ‘‘being eligible for financial assistance under part A

2 of title IV of the Social Security Act and as having

3 continually received such financial assistance during

4 the 90-day period which immediately precedes the

5 date on which such individual is hired by the em6 ployer.’’;

7 (2) in section 3304(a)(16) (26 U.S.C.

8 3304(a)(16)), by striking ‘‘eligibility for aid or serv9 ices,’’ and all that follows through ‘‘children ap10 proved’’ and inserting ‘‘eligibility for assistance, or

11 the amount of such assistance, under a State pro12 gram funded’’;

13 (3) in section 6103(l)(7)(D)(i) (26 U.S.C.

14 6103(l)(7)(D)(i)), by striking ‘‘aid to families with

15 dependent children provided under a State plan ap16 proved’’ and inserting ‘‘a State program funded’’;

17 (4) in section 6103(l)(10) (26 U.S.C.

18 6103(l)(10))—

19 (A) by striking ‘‘(c) or (d)’’ each place it

20 appears and inserting ‘‘(c), (d), or (e)’’; and

21 (B) by adding at the end of subparagraph

22 (B) the following new sentence: ‘‘Any return in23 formation disclosed with respect to section

24 6402(e) shall only be disclosed to officers and
343

•S 1956 PCS

1 employees of the State agency requesting such

2 information.’’;

3 (5) in section 6103(p)(4) (26 U.S.C.

4 6103(p)(4)), in the matter preceding subparagraph

5 (A)—

6 (A) by striking ‘‘(5), (10)’’ and inserting

7 ‘‘(5)’’; and

8 (B) by striking ‘‘(9), or (12)’’ and insert9 ing ‘‘(9), (10), or (12)’’;

10 (6) in section 6334(a)(11)(A) (26 U.S.C.

11 6334(a)(11)(A)), by striking ‘‘(relating to aid to

12 families with dependent children)’’;

13 (7) in section 6402 (26 U.S.C. 6402)—

14 (A) in subsection (a), by striking ‘‘(c) and

15 (d)’’ and inserting ‘‘(c), (d), and (e)’’;

16 (B) by redesignating subsections (e)

17 through (i) as subsections (f) through (j), re18 spectively; and

19 (C) by inserting after subsection (d) the

20 following:

21 ‘‘(e) COLLECTION OF OVERPAYMENTS UNDER TITLE

22 IV–A OF THE SOCIAL SECURITY ACT.—The amount of

23 any overpayment to be refunded to the person making the

24 overpayment shall be reduced (after reductions pursuant

25 to subsections (c) and (d), but before a credit against fu-
344

•S 1956 PCS

1 ture liability for an internal revenue tax) in accordance

2 with section 405(e) of the Social Security Act (concerning

3 recovery of overpayments to individuals under State plans

4 approved under part A of title IV of such Act).’’; and

5 (8) in section 7523(b)(3)(C) (26 U.S.C.

6 7523(b)(3)(C)), by striking ‘‘aid to families with de7 pendent children’’ and inserting ‘‘assistance under a

8 State program funded under part A of title IV of the

9 Social Security Act’’.

10 (m) Section 3(b) of the Wagner-Peyser Act (29

11 U.S.C. 49b(b)) is amended by striking ‘‘State plan ap12 proved under part A of title IV’’ and inserting ‘‘State pro13 gram funded under part A of title IV’’.

14 (n) The Job Training Partnership Act (29 U.S.C.

15 1501 et seq.) is amended—

16 (1) in section 4(29)(A)(i) (29 U.S.C.

17 1503(29)(A)(i)), by striking ‘‘(42 U.S.C. 601 et

18 seq.)’’;

19 (2) in section 106(b)(6)(C) (29 U.S.C.

20 1516(b)(6)(C)), by striking ‘‘State aid to families

21 with dependent children records,’’ and inserting

22 ‘‘records collected under the State program funded

23 under part A of title IV of the Social Security Act,’’;

24 (3) in section 121(b)(2) (29 U.S.C.

25 1531(b)(2))—
345

•S 1956 PCS

1 (A) by striking ‘‘the JOBS program’’ and

2 inserting ‘‘the work activities required under

3 title IV of the Social Security Act’’; and

4 (B) by striking the second sentence;

5 (4) in section 123(c) (29 U.S.C. 1533(c))—

6 (A) in paragraph (1)(E), by repealing

7 clause (vi); and

8 (B) in paragraph (2)(D), by repealing

9 clause (v);

10 (5) in section 203(b)(3) (29 U.S.C.

11 1603(b)(3)), by striking ‘‘, including recipients

12 under the JOBS program’’;

13 (6) in subparagraphs (A) and (B) of section

14 204(a)(1) (29 U.S.C. 1604(a)(1) (A) and (B)), by

15 striking ‘‘(such as the JOBS program)’’ each place

16 it appears;

17 (7) in section 205(a) (29 U.S.C. 1605(a)), by

18 striking paragraph (4) and inserting the following:

19 ‘‘(4) the portions of title IV of the Social Secu20 rity Act relating to work activities;’’;

21 (8) in section 253 (29 U.S.C. 1632)—

22 (A) in subsection (b)(2), by repealing sub23 paragraph (C); and
346

•S 1956 PCS

1 (B) in paragraphs (1)(B) and (2)(B) of

2 subsection (c), by striking ‘‘the JOBS program

3 or’’ each place it appears;

4 (9) in section 264 (29 U.S.C. 1644)—

5 (A) in subparagraphs (A) and (B) of sub6 section (b)(1), by striking ‘‘(such as the JOBS

7 program)’’ each place it appears; and

8 (B) in subparagraphs (A) and (B) of sub9 section (d)(3), by striking ‘‘and the JOBS pro10 gram’’ each place it appears;

11 (10) in section 265(b) (29 U.S.C. 1645(b)), by

12 striking paragraph (6) and inserting the following:

13 ‘‘(6) the portion of title IV of the Social Secu14 rity Act relating to work activities;’’;

15 (11) in the second sentence of section 429(e)

16 (29 U.S.C. 1699(e)), by striking ‘‘and shall be in an

17 amount that does not exceed the maximum amount

18 that may be provided by the State pursuant to sec19 tion 402(g)(1)(C) of the Social Security Act (42

20 U.S.C. 602(g)(1)(C))’’;

21 (12) in section 454(c) (29 U.S.C. 1734(c)), by

22 striking ‘‘JOBS and’’;

23 (13) in section 455(b) (29 U.S.C. 1735(b)), by

24 striking ‘‘the JOBS program,’’;
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•S 1956 PCS

1 (14) in section 501(1) (29 U.S.C. 1791(1)), by

2 striking ‘‘aid to families with dependent children

3 under part A of title IV of the Social Security Act

4 (42 U.S.C. 601 et seq.)’’ and inserting ‘‘assistance

5 under the State program funded under part A of

6 title IV of the Social Security Act’’;

7 (15) in section 506(1)(A) (29 U.S.C.

8 1791e(1)(A)), by striking ‘‘aid to families with de9 pendent children’’ and inserting ‘‘assistance under

10 the State program funded’’;

11 (16) in section 508(a)(2)(A) (29 U.S.C.

12 1791g(a)(2)(A)), by striking ‘‘aid to families with

13 dependent children’’ and inserting ‘‘assistance under

14 the State program funded’’; and

15 (17) in section 701(b)(2)(A) (29 U.S.C.

16 1792(b)(2)(A))—

17 (A) in clause (v), by striking the semicolon

18 and inserting ‘‘; and’’; and

19 (B) by striking clause (vi).

20 (o) Section 3803(c)(2)(C)(iv) of title 31, United

21 States Code, is amended to read as follows:

22 ‘‘(iv) assistance under a State program funded

23 under part A of title IV of the Social Security Act;’’.
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1 (p) Section 2605(b)(2)(A)(i) of the Low-Income

2 Home Energy Assistance Act of 1981 (42 U.S.C.

3 8624(b)(2)(A)(i)) is amended to read as follows:

4 ‘‘(i) assistance under the State pro5 gram funded under part A of title IV of

6 the Social Security Act;’’.

7 (q) Section 303(f)(2) of the Family Support Act of

8 1988 (42 U.S.C. 602 note) is amended—

9 (1) by striking ‘‘(A)’’; and

10 (2) by striking subparagraphs (B) and (C).

11 (r) The Balanced Budget and Emergency Deficit

12 Control Act of 1985 (2 U.S.C. 900 et seq.) is amended—

13 (1) in the first section 255(h) (2 U.S.C.

14 905(h)), by striking ‘‘Aid to families with dependent

15 children (75–0412–0–1–609);’’ and inserting ‘‘Block

16 grants to States for temporary assistance for needy

17 families;’’; and

18 (2) in section 256 (2 U.S.C. 906)—

19 (A) by striking subsection (k); and

20 (B) by redesignating subsection (l) as sub21 section (k).

22 (s) The Immigration and Nationality Act (8 U.S.C.

23 1101 et seq.) is amended—

24 (1) in section 210(f) (8 U.S.C. 1160(f)), by

25 striking ‘‘aid under a State plan approved under’’
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1 each place it appears and inserting ‘‘assistance

2 under a State program funded under’’;

3 (2) in section 245A(h) (8 U.S.C. 1255a(h))—

4 (A) in paragraph (1)(A)(i), by striking

5 ‘‘program of aid to families with dependent chil6 dren’’ and inserting ‘‘State program of assist7 ance’’; and

8 (B) in paragraph (2)(B), by striking ‘‘aid

9 to families with dependent children’’ and insert10 ing ‘‘assistance under a State program funded

11 under part A of title IV of the Social Security

12 Act’’; and

13 (3) in section 412(e)(4) (8 U.S.C. 1522(e)(4)),

14 by striking ‘‘State plan approved’’ and inserting

15 ‘‘State program funded’’.

16 (t) Section 640(a)(4)(B)(i) of the Head Start Act (42

17 U.S.C. 9835(a)(4)(B)(i)) is amended by striking ‘‘pro18 gram of aid to families with dependent children under a

19 State plan approved’’ and inserting ‘‘State program of as20 sistance funded’’.

21 (u) Section 9 of the Act of April 19, 1950 (64 Stat.

22 47, chapter 92; 25 U.S.C. 639) is repealed.

23 (v) Subparagraph (E) of section 213(d)(6) of the

24 School-To-Work Opportunities Act of 1994 (20 U.S.C.

25 6143(d)(6)) is amended to read as follows:
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1 ‘‘(E) part A of title IV of the Social Secu2 rity Act (42 U.S.C. 601 et seq.) relating to

3 work activities;’’.

4 (w) Section 552a(a)(8)(B)(iv)(III) of title 5, United

5 States Code, is amended by striking ‘‘section 464 or 1137

6 of the Social Security Act’’ and inserting ‘‘section 404(e),

7 464, or 1137 of the Social Security Act’’.

8 SEC. 2112. DEVELOPMENT OF PROTOTYPE OF COUNTER9 FEIT-RESISTANT SOCIAL SECURITY CARD RE10 QUIRED.

11 (a) DEVELOPMENT.—

12 (1) IN GENERAL.—The Commissioner of Social

13 Security (in this section referred to as the ‘‘Commis14 sioner’’) shall, in accordance with this section, de15 velop a prototype of a counterfeit-resistant social se16 curity card. Such prototype card shall—

17 (A) be made of a durable, tamper-resistant

18 material such as plastic or polyester,

19 (B) employ technologies that provide secu20 rity features, such as magnetic stripes,

21 holograms, and integrated circuits, and

22 (C) be developed so as to provide individ23 uals with reliable proof of citizenship or legal

24 resident alien status.
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1 (2) ASSISTANCE BY ATTORNEY GENERAL.—The

2 Attorney General of the United States shall provide

3 such information and assistance as the Commis4 sioner deems necessary to enable the Commissioner

5 to comply with this section.

6 (b) STUDY AND REPORT.—

7 (1) IN GENERAL.—The Commissioner shall con8 duct a study and issue a report to the Congress

9 which examines different methods of improving the

10 social security card application process.

11 (2) ELEMENTS OF STUDY.—The study shall in12 clude an evaluation of the cost and work load impli13 cations of issuing a counterfeit-resistant social secu14 rity card for all individuals over a 3-, 5-, and 10-

15 year period. The study shall also evaluate the fea16 sibility and cost implications of imposing a user fee

17 for replacement cards and cards issued to individ18 uals who apply for such a card prior to the sched19 uled 3-, 5-, and 10-year phase-in options.

20 (3) DISTRIBUTION OF REPORT.—The Commis21 sioner shall submit copies of the report described in

22 this subsection along with a facsimile of the proto23 type card as described in subsection (a) to the Com24 mittees on Ways and Means and Judiciary of the

25 House of Representatives and the Committees on Fi-
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1 nance and Judiciary of the Senate within 1 year

2 after the date of the enactment of this Act.

3 SEC. 2113. DISCLOSURE OF RECEIPT OF FEDERAL FUNDS.

4 (a) IN GENERAL.—Whenever an organization that

5 accepts Federal funds under this subtitle or the amend6 ments made by this subtitle makes any communication

7 that in any way intends to promote public support or op8 position to any policy of a Federal, State, or local govern9 ment through any broadcasting station, newspaper, maga10 zine, outdoor advertising facility, direct mailing, or any

11 other type of general public advertising, such communica12 tion shall state the following: ‘‘This was prepared and paid

13 for by an organization that accepts taxpayer dollars.’’.

14 (b) FAILURE TO COMPLY.—If an organization makes

15 any communication described in subsection (a) and fails

16 to provide the statement required by that subsection, such

17 organization shall be ineligible to receive Federal funds

18 under this subtitle or the amendments made by this sub19 title.

20 (c) DEFINITION.—For purposes of this section, the

21 term ‘‘organization’’ means an organization described in

22 section 501(c) of the Internal Revenue Code of 1986.

23 (d) EFFECTIVE DATES.—This section shall take ef24 fect—
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1 (1) with respect to printed communications 1

2 year after the date of enactment of this Act; and

3 (2) with respect to any other communication on

4 the date of enactment of this Act.

5 SEC. 2114. MODIFICATIONS TO THE JOB OPPORTUNITIES

6 FOR CERTAIN LOW-INCOME INDIVIDUALS

7 PROGRAM.

8 Section 505 of the Family Support Act of 1988 (42

9 U.S.C. 1315 note) is amended—

10 (1) in the heading, by striking ‘‘DEMONSTRA11 TION’’;

12 (2) by striking ‘‘demonstration’’ each place such

13 term appears;

14 (3) in subsection (a), by striking ‘‘in each of

15 fiscal years’’ and all that follows through ‘‘10’’ and

16 inserting ‘‘shall enter into agreements with’’;

17 (4) in subsection (b)(3), by striking ‘‘aid to

18 families with dependent children under part A of

19 title IV of the Social Security Act’’ and inserting

20 ‘‘assistance under the program funded part A of title

21 IV of the Social Security Act of the State in which

22 the individual resides’’;

23 (5) in subsection (c)—

24 (A) in paragraph (1)(C), by striking ‘‘aid

25 to families with dependent children under title
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1 IV of the Social Security Act’’ and inserting

2 ‘‘assistance under a State program funded part

3 A of title IV of the Social Security Act’’; and

4 (B) in paragraph (2), by striking ‘‘aid to

5 families with dependent children under title IV

6 of such Act’’ and inserting ‘‘assistance under a

7 State program funded part A of title IV of the

8 Social Security Act’’;

9 (6) in subsection (d), by striking ‘‘job opportu10 nities and basic skills training program (as provided

11 for under title IV of the Social Security Act)’’ and

12 inserting ‘‘the State program funded under part A

13 of title IV of the Social Security Act’’; and

14 (7) by striking subsections (e) through (g) and

15 inserting the following:

16 ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—For the

17 purpose of conducting projects under this section, there

18 is authorized to be appropriated an amount not to exceed

19 $25,000,000 for any fiscal year.’’.

20 SEC. 2115. SECRETARIAL SUBMISSION OF LEGISLATIVE

21 PROPOSAL FOR TECHNICAL AND CONFORM22 ING AMENDMENTS.

23 Not later than 90 days after the date of the enact24 ment of this Act, the Secretary of Health and Human

25 Services and the Commissioner of Social Security, in con-
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1 sultation, as appropriate, with the heads of other Federal

2 agencies, shall submit to the appropriate committees of

3 the Congress a legislative proposal proposing such tech4 nical and conforming amendments as are necessary to

5 bring the law into conformity with the policy embodied in

6 this chapter.

7 SEC. 2116. EFFECTIVE DATE; TRANSITION RULE.

8 (a) EFFECTIVE DATES.—

9 (1) IN GENERAL.—Except as otherwise pro10 vided in this chapter, this chapter and the amend11 ments made by this chapter shall take effect on July

12 1, 1997.

13 (2) DELAYED EFFECTIVE DATE FOR CERTAIN

14 PROVISIONS.—Notwithstanding any other provision

15 of this section, paragraphs (2), (3), (4), (5), (8), and

16 (10) of section 409(a) and section 411(a) of the So17 cial Security Act (as added by the amendments

18 made by section 2103(a) of this Act) shall not take

19 effect with respect to a State until, and shall apply

20 only with respect to conduct that occurs on or after,

21 the later of—

22 (A) July 1, 1997; or

23 (B) the date that is 6 months after the

24 date the Secretary of Health and Human Serv25 ices receives from the State a plan described in
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1 section 402(a) of the Social Security Act (as

2 added by such amendment).

3 (3) ELIMINATION OF CHILD CARE PROGRAMS.—

4 The amendments made by section 2103(d) shall take

5 effect on October 1, 1996.

6 (4) DEFINITIONS APPLICABLE TO NEW CHILD

7 CARE ENTITLEMENT.—Sections 403(a)(1)(C),

8 403(a)(1)(D), and 419(4) of the Social Security Act,

9 as added by the amendments made by section

10 2103(a) of this Act, shall take effect on October 1,

11 1996.

12 (b) TRANSITION RULES.—Effective on the date of

13 the enactment of this Act:

14 (1) STATE OPTION TO ACCELERATE EFFECTIVE

15 DATE.—

16 (A) IN GENERAL.—If the Secretary of

17 Health and Human Services receives from a

18 State a plan described in section 402(a) of the

19 Social Security Act (as added by the amend20 ment made by section 2103(a)(1) of this Act),

21 then—

22 (i) on and after the date of such re23 ceipt—

24 (I) except as provided in clause

25 (ii), this chapter and the amendments
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1 made by this chapter (other than by

2 section 2103(d) of this Act) shall

3 apply with respect to the State; and

4 (II) the State shall be considered

5 an eligible State for purposes of part

6 A of title IV of the Social Security

7 Act (as in effect pursuant to the

8 amendments made by such section

9 2103(a)); and

10 (ii) during the period that begins on

11 the date of such receipt and ends on June

12 30, 1997, there shall remain in effect with

13 respect to the State—

14 (I) section 403(h) of the Social

15 Security Act (as in effect on Septem16 ber 30, 1995); and

17 (II) all State reporting require18 ments under parts A and F of title IV

19 of the Social Security Act (as in effect

20 on September 30, 1995), modified by

21 the Secretary as appropriate, taking

22 into account the State program under

23 part A of title IV of the Social Secu24 rity Act (as in effect pursuant to the
358

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1 amendments made by such section

2 2103(a)).

3 (B) LIMITATIONS ON FEDERAL OBLIGA4 TIONS.—

5 (i) UNDER AFDC PROGRAM.—The

6 total obligations of the Federal Govern7 ment to a State under part A of title IV

8 of the Social Security Act (as in effect on

9 September 30, 1995) with respect to ex10 penditures in fiscal year 1997 shall not ex11 ceed an amount equal to the State family

12 assistance grant.

13 (ii) UNDER TEMPORARY FAMILY AS14 SISTANCE PROGRAM.—Notwithstanding

15 section 403(a)(1) of the Social Security

16 Act (as in effect pursuant to the amend17 ments made by section 2103(a) of this

18 Act), the total obligations of the Federal

19 Government to a State under such section

20 403(a)(1)—

21 (I) for fiscal year 1996, shall be

22 an amount equal to—

23 (aa) the State family assist24 ance grant; multiplied by
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(bb) 1 1 ⁄366 of the number of

2 days during the period that be3 gins on the date the Secretary of

4 Health and Human Services first

5 receives from the State a plan

6 described in section 402(a) of the

7 Social Security Act (as added by

8 the amendment made by section

9 2103(a)(1) of this Act) and ends

10 on September 30, 1996; and

11 (II) for fiscal year 1997, shall be

12 an amount equal to the lesser of—

13 (aa) the amount (if any) by

14 which the State family assistance

15 grant exceeds the total obliga16 tions of the Federal Government

17 to the State under part A of title

18 IV of the Social Security Act (as

19 in effect on September 30, 1995)

20 with respect to expenditures in

21 fiscal year 1997; or

22 (bb) the State family assistance grant, multiplied by 1 23 ⁄365 of

24 the number of days during the

25 period that begins on October 1,
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1 1996, or the date the Secretary

2 of Health and Human Services

3 first receives from the State a

4 plan described in section 402(a)

5 of the Social Security Act (as

6 added by the amendment made

7 by section 2103(a)(1) of this

8 Act), whichever is later, and ends

9 on September 30, 1997.

10 (iii) CHILD CARE OBLIGATIONS EX11 CLUDED IN DETERMINING FEDERAL AFDC

12 OBLIGATIONS.—As used in this subpara13 graph, the term ‘‘obligations of the Federal

14 Government to the State under part A of

15 title IV of the Social Security Act’’ does

16 not include any obligation of the Federal

17 Government with respect to child care ex18 penditures by the State.

19 (C) SUBMISSION OF STATE PLAN FOR FIS20 CAL YEAR 1996 OR 1997 DEEMED ACCEPTANCE

21 OF GRANT LIMITATIONS AND FORMULA AND

22 TERMINATION OF AFDC ENTITLEMENT.—The

23 submission of a plan by a State pursuant to

24 subparagraph (A) is deemed to constitute—
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1 (i) the State’s acceptance of the grant

2 reductions under subparagraph (B) (in3 cluding the formula for computing the

4 amount of the reduction); and

5 (ii) the termination of any entitlement

6 of any individual or family to benefits or

7 services under the State AFDC program.

8 (D) DEFINITIONS.—As used in this para9 graph:

10 (i) STATE AFDC PROGRAM.—The term

11 ‘‘State AFDC program’’ means the State

12 program under parts A and F of title IV

13 of the Social Security Act (as in effect on

14 September 30, 1995).

15 (ii) STATE.—The term ‘‘State’’ means

16 the 50 States and the District of Colum17 bia.

18 (iii) STATE FAMILY ASSISTANCE

19 GRANT.—The term ‘‘State family assist20 ance grant’’ means the State family assist21 ance grant (as defined in section

22 403(a)(1)(B) of the Social Security Act, as

23 added by the amendment made by section

24 2103(a)(1) of this Act).
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1 (2) CLAIMS, ACTIONS, AND PROCEEDINGS.—

2 The amendments made by this chapter shall not

3 apply with respect to—

4 (A) powers, duties, functions, rights,

5 claims, penalties, or obligations applicable to

6 aid, assistance, or services provided before the

7 effective date of this chapter under the provi8 sions amended; and

9 (B) administrative actions and proceedings

10 commenced before such date, or authorized be11 fore such date to be commenced, under such

12 provisions.

13 (3) CLOSING OUT ACCOUNT FOR THOSE PRO14 GRAMS TERMINATED OR SUBSTANTIALLY MODIFIED

15 BY THIS CHAPTER.—In closing out accounts, Fed16 eral and State officials may use scientifically accept17 able statistical sampling techniques. Claims made

18 with respect to State expenditures under a State

19 plan approved under part A of title IV of the Social

20 Security Act (as in effect on September 30, 1995)

21 with respect to assistance or services provided on or

22 before September 30, 1995, shall be treated as

23 claims with respect to expenditures during fiscal

24 year 1995 for purposes of reimbursement even if

25 payment was made by a State on or after October
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1 1, 1995. Each State shall complete the filing of all

2 claims under the State plan (as so in effect) within

3 2 years after the date of the enactment of this Act.

4 The head of each Federal department shall—

5 (A) use the single audit procedure to re6 view and resolve any claims in connection with

7 the close out of programs under such State

8 plans; and

9 (B) reimburse States for any payments

10 made for assistance or services provided during

11 a prior fiscal year from funds for fiscal year

12 1995, rather than from funds authorized by

13 this chapter.

14 (4) CONTINUANCE IN OFFICE OF ASSISTANT

15 SECRETARY FOR FAMILY SUPPORT.—The individual

16 who, on the day before the effective date of this

17 chapter, is serving as Assistant Secretary for Family

18 Support within the Department of Health and

19 Human Services shall, until a successor is appointed

20 to such position—

21 (A) continue to serve in such position; and

22 (B) except as otherwise provided by law—

23 (i) continue to perform the functions

24 of the Assistant Secretary for Family Sup25 port under section 417 of the Social Secu-
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1 rity Act (as in effect before such effective

2 date); and

3 (ii) have the powers and duties of the

4 Assistant Secretary for Family Support

5 under section 416 of the Social Security

6 Act (as in effect pursuant to the amend7 ment made by section 2103(a)(1) of this

8 Act).

9 (c) TERMINATION OF ENTITLEMENT UNDER AFDC

10 PROGRAM.—Effective October 1, 1996, no individual or

11 family shall be entitled to any benefits or services under

12 any State plan approved under part A or F of title IV

13 of the Social Security Act (as in effect on September 30,

14 1995).

15 CHAPTER 2—SUPPLEMENTAL SECURITY

16 INCOME

17 SEC. 2200. REFERENCE TO SOCIAL SECURITY ACT.

18 Except as otherwise specifically provided, wherever in

19 this chapter an amendment is expressed in terms of an

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

21 the reference shall be considered to be made to that sec22 tion or other provision of the Social Security Act.
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1 Subchapter A—Eligibility Restrictions

2 SEC. 2201. DENIAL OF SSI BENEFITS FOR 10 YEARS TO INDI3 VIDUALS FOUND TO HAVE FRAUDULENTLY

4 MISREPRESENTED RESIDENCE IN ORDER TO

5 OBTAIN BENEFITS SIMULTANEOUSLY IN 2 OR

6 MORE STATES.

7 (a) IN GENERAL.—Section 1611(e) (42 U.S.C.

8 1382(e)), as amended by section 105(b)(4) of the Contract

9 with America Advancement Act of 1996, is amended by

10 redesignating paragraph (5) as paragraph (3) and by add11 ing at the end the following new paragraph:

12 ‘‘(4)(A) No person shall be considered an eligible in13 dividual or eligible spouse for purposes of this title during

14 the 10-year period that begins on the date the person is

15 convicted in Federal or State court of having made a

16 fraudulent statement or representation with respect to the

17 place of residence of the person in order to receive assist18 ance simultaneously from 2 or more States under pro19 grams that are funded under title IV, title XV, title XIX,

20 or the Food Stamp Act of 1977, or benefits in 2 or more

21 States under the supplemental security income program

22 under this title.

23 ‘‘(B) As soon as practicable after the conviction of

24 a person in a Federal or State court as described in sub-
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•S 1956 PCS

1 paragraph (A), an official of such court shall notify the

2 Commissioner of such conviction.’’.

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

4 this section shall take effect on the date of the enactment

5 of this Act.

6 SEC. 2202. DENIAL OF SSI BENEFITS FOR FUGITIVE FELONS

7 AND PROBATION AND PAROLE VIOLATORS.

8 (a) IN GENERAL.—Section 1611(e) (42 U.S.C.

9 1382(e)), as amended by section 2201(a) of this Act, is

10 amended by adding at the end the following new para11 graph:

12 ‘‘(5) No person shall be considered an eligible individ13 ual or eligible spouse for purposes of this title with respect

14 to any month if during such month the person is—

15 ‘‘(A) fleeing to avoid prosecution, or custody or

16 confinement after conviction, under the laws of the

17 place from which the person flees, for a crime, or an

18 attempt to commit a crime, which is a felony under

19 the laws of the place from which the person flees, or

20 which, in the case of the State of New Jersey, is a

21 high misdemeanor under the laws of such State; or

22 ‘‘(B) violating a condition of probation or pa23 role imposed under Federal or State law.’’.

24 (b) EXCHANGE OF INFORMATION.—Section 1611(e)

25 (42 U.S.C. 1382(e)), as amended by section 2201(a) of
367

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1 this Act and subsection (a) of this section, is amended by

2 adding at the end the following new paragraph:

3 ‘‘(6) Notwithstanding any other provision of law

4 (other than section 6103 of the Internal Revenue Code

5 of 1986), the Commissioner shall furnish any Federal,

6 State, or local law enforcement officer, upon the written

7 request of the officer, with the current address, Social Se8 curity number, and photograph (if applicable) of any re9 cipient of benefits under this title, if the officer furnishes

10 the Commissioner with the name of the recipient, and

11 other identifying information as reasonably required by

12 the Commissioner to establish the unique identity of the

13 recipient, and notifies the Commissioner that—

14 ‘‘(A) the recipient—

15 ‘‘(i) is described in subparagraph (A) or

16 (B) of paragraph (5); or

17 ‘‘(ii) has information that is necessary for

18 the officer to conduct the officer’s official du19 ties; and

20 ‘‘(B) the location or apprehension of the recipi21 ent is within the officer’s official duties.’’.

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

23 this section shall take effect on the date of the enactment

24 of this Act.
368

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1 SEC. 2203. TREATMENT OF PRISONERS.

2 (a) IMPLEMENTATION OF PROHIBITION AGAINST

3 PAYMENT OF BENEFITS TO PRISONERS.—Section

4 1611(e)(1) (42 U.S.C. 1382(e)(1)) is amended by adding

5 at the end the following new subparagraph:

6 ‘‘(I)(i) The Commissioner shall enter into a contract,

7 with any interested State or local institution referred to

8 in subparagraph (A), under which—

9 ‘‘(I) the institution shall provide to the Com10 missioner, on a monthly basis, the names, social se11 curity account numbers, dates of birth, and such

12 other identifying information concerning the inmates

13 of the institution as the Commissioner may require

14 for the purpose of carrying out paragraph (1); and

15 ‘‘(II) the Commissioner shall pay to any such

16 institution, with respect to each inmate of the insti17 tution who is eligible for a benefit under this title for

18 the month preceding the first month throughout

19 which such inmate is in such institution and be20 comes ineligible for such benefit (or becomes eligible

21 only for a benefit payable at a reduced rate) as a re22 sult of the application of this paragraph, an amount

23 not to exceed $400 if the institution furnishes the

24 information described in subclause (I) to the Com25 missioner within 30 days after such individual be26 comes an inmate of such institution, or an amount
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•S 1956 PCS

1 not to exceed $200 if the institution furnishes such

2 information after 30 days after such date but within

3 90 days after such date.

4 ‘‘(ii) The provisions of section 552a of title 5, United

5 States Code, shall not apply to any agreement entered into

6 under clause (i) or to information exchanged pursuant to

7 such agreement.

8 ‘‘(iii) Payments to institutions required by clause

9 (i)(II) shall be made from funds otherwise available for

10 the payment of benefits under this title and shall be treat11 ed as direct spending for purposes of the Balanced Budget

12 and Emergency Deficit Control Act of 1985.’’.

13 (b) DENIAL OF SSI BENEFITS FOR 10 YEARS TO A

14 PERSON FOUND TO HAVE FRAUDULENTLY OBTAINED

15 SSI BENEFITS WHILE IN PRISON.—

16 (1) IN GENERAL.—Section 1611(e)(1) (42

17 U.S.C. 1382(e)(1)), as amended by subsection (a) of

18 this section, is amended by adding at the end the

19 following new subparagraph:

20 ‘‘(J) In any case in which the Commissioner of Social

21 Security finds that a person has made a fraudulent state22 ment or representation in order to obtain or to continue

23 to receive benefits under this title while being an inmate

24 in a penal institution, such person shall not be considered

25 an eligible individual or eligible spouse for any month end-
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•S 1956 PCS

1 ing during the 10-year period beginning on the date on

2 which such person ceases being such an inmate.’’.

3 (2) EFFECTIVE DATE.—The amendment made

4 by this subsection shall apply with respect to state5 ments or representations made on or after the date

6 of the enactment of this Act.

7 (c) STUDY OF OTHER POTENTIAL IMPROVEMENTS IN

8 THE COLLECTION OF INFORMATION RESPECTING PUBLIC

9 INMATES.—

10 (1) STUDY.—The Commissioner of Social Secu11 rity shall conduct a study of the desirability, feasibil12 ity, and cost of—

13 (A) establishing a system under which

14 Federal, State, and local courts would furnish

15 to the Commissioner such information respect16 ing court orders by which individuals are con17 fined in jails, prisons, or other public penal,

18 correctional, or medical facilities as the Com19 missioner may require for the purpose of carry20 ing out section 1611(e)(1) of the Social Secu21 rity Act; and

22 (B) requiring that State and local jails,

23 prisons, and other institutions that enter into

24 contracts with the Commissioner under section

25 1611(e)(1)(I) of the Social Security Act furnish
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•S 1956 PCS

1 the information required by such contracts to

2 the Commissioner by means of an electronic or

3 other sophisticated data exchange system.

4 (2) REPORT.—Not later than 1 year after the

5 date of the enactment of this Act, the Commissioner

6 of Social Security shall submit a report on the re7 sults of the study conducted pursuant to this sub8 section to the Committee on Finance of the Senate

9 and the Committee on Ways and Means of the

10 House of Representatives.

11 SEC. 2204. EFFECTIVE DATE OF APPLICATION FOR BENE12 FITS.

13 (a) IN GENERAL.—Subparagraphs (A) and (B) of

14 section 1611(c)(7) (42 U.S.C. 1382(c)(7)) are amended

15 to read as follows:

16 ‘‘(A) the first day of the month following the

17 date such application is filed, or

18 ‘‘(B) the first day of the month following the

19 date such individual becomes eligible for such bene20 fits with respect to such application.’’.

21 (b) SPECIAL RULE RELATING TO EMERGENCY AD22 VANCE PAYMENTS.—Section 1631(a)(4)(A) (42 U.S.C.

23 1383(a)(4)(A)) is amended—
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•S 1956 PCS

1 (1) by inserting ‘‘for the month following the

2 date the application is filed’’ after ‘‘is presumptively

3 eligible for such benefits’’; and

4 (2) by inserting ‘‘, which shall be repaid

5 through proportionate reductions in such benefits

6 over a period of not more than 6 months’’ before the

7 semicolon.

8 (c) CONFORMING AMENDMENTS.—

9 (1) Section 1614(b) (42 U.S.C. 1382c(b)) is

10 amended by striking ‘‘at the time the application or

11 request is filed’’ and inserting ‘‘on the first day of

12 the month following the date the application or re13 quest is filed’’.

14 (2) Section 1631(g)(3) (42 U.S.C. 1382j(g)(3))

15 is amended by inserting ‘‘following the month’’ after

16 ‘‘beginning with the month’’.

17 (d) EFFECTIVE DATE.—

18 (1) IN GENERAL.—The amendments made by

19 this section shall apply to applications for benefits

20 under title XVI of the Social Security Act filed on

21 or after the date of the enactment of this Act, with22 out regard to whether regulations have been issued

23 to implement such amendments.

24 (2) BENEFITS UNDER TITLE XVI.—For pur25 poses of this subsection, the term ‘‘benefits under
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1 title XVI of the Social Security Act’’ includes sup2 plementary payments pursuant to an agreement for

3 Federal administration under section 1616(a) of the

4 Social Security Act, and payments pursuant to an

5 agreement entered into under section 212(b) of Pub6 lic Law 93–66.

7 Subchapter B—Benefits for Disabled

8 Children

9 SEC. 2211. DEFINITION AND ELIGIBILITY RULES.

10 (a) DEFINITION OF CHILDHOOD DISABILITY.—Sec11 tion 1614(a)(3) (42 U.S.C. 1382c(a)(3)), as amended by

12 section 105(b)(1) of the Contract with America Advance13 ment Act of 1996, is amended—

14 (1) in subparagraph (A), by striking ‘‘An indi15 vidual’’ and inserting ‘‘Except as provided in sub16 paragraph (C), an individual’’;

17 (2) in subparagraph (A), by striking ‘‘(or, in

18 the case of an individual under the age of 18, if he

19 suffers from any medically determinable physical or

20 mental impairment of comparable severity)’’;

21 (3) by redesignating subparagraphs (C) through

22 (I) as subparagraphs (D) through (J), respectively;

23 (4) by inserting after subparagraph (B) the fol24 lowing new subparagraph:
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1 ‘‘(C) An individual under the age of 18 shall be con2 sidered disabled for the purposes of this title if that indi3 vidual has a medically determinable physical or mental im4 pairment, which results in marked and severe functional

5 limitations, and which can be expected to result in death

6 or which has lasted or can be expected to last for a contin7 uous period of not less than 12 months. Notwithstanding

8 the preceding sentence, no individual under the age of 18

9 who engages in substantial gainful activity (determined in

10 accordance with regulations prescribed pursuant to sub11 paragraph (E)) may be considered to be disabled.’’; and

12 (5) in subparagraph (F), as redesignated by

13 paragraph (3), by striking ‘‘(D)’’ and inserting

14 ‘‘(E)’’.

15 (b) REQUEST FOR COMMENTS TO IMPROVE DISABIL16 ITY EVALUATION.—Not later than 60 days after the date

17 of the enactment of this Act, and annually thereafter, the

18 Commissioner of Social Security shall issue a request for

19 comments in the Federal Register regarding improve20 ments to the disability evaluation and determination pro21 cedures for individuals under age 18 to ensure the com22 prehensive assessment of such individuals, including—

23 (1) additions to conditions which should be pre24 sumptively disabling at birth or ages 0 through 3

25 years;
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1 (2) specific changes in individual listings in the

2 Listing of Impairments set forth in appendix 1 of

3 subpart P of part 404 of title 20, Code of Federal

4 Regulations;

5 (3) improvements in regulations regarding de6 terminations based on regulations providing for med7 ical and functional equivalence to such Listing of

8 Impairments, and consideration of multiple impair9 ments; and

10 (4) any other changes to the disability deter11 mination procedures.

12 (c) CHANGES TO CHILDHOOD SSI REGULATIONS.—

13 (1) MODIFICATION TO MEDICAL CRITERIA FOR

14 EVALUATION OF MENTAL AND EMOTIONAL DIS15 ORDERS.—The Commissioner of Social Security

16 shall modify sections 112.00C.2. and

17 112.02B.2.c.(2) of appendix 1 to subpart P of part

18 404 of title 20, Code of Federal Regulations, to

19 eliminate references to maladaptive behavior in the

20 domain of personal/behavorial function.

21 (2) DISCONTINUANCE OF INDIVIDUALIZED

22 FUNCTIONAL ASSESSMENT.—The Commissioner of

23 Social Security shall discontinue the individualized

24 functional assessment for children set forth in sec-
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•S 1956 PCS

1 tions 416.924d and 416.924e of title 20, Code of

2 Federal Regulations.

3 (d) MEDICAL IMPROVEMENT REVIEW STANDARD AS

4 IT APPLIES TO INDIVIDUALS UNDER THE AGE OF 18.—

5 Section 1614(a)(4) (42 U.S.C. 1382(a)(4)) is amended—

6 (1) by redesignating subclauses (I) and (II) of

7 clauses (i) and (ii) of subparagraph (B) as items

8 (aa) and (bb), respectively;

9 (2) by redesignating clauses (i) and (ii) of sub10 paragraphs (A) and (B) as subclauses (I) and (II),

11 respectively;

12 (3) by redesignating subparagraphs (A) through

13 (C) as clauses (i) through (iii), respectively;

14 (4) by inserting before clause (i) (as redesig15 nated by paragraph (3)) the following new subpara16 graph:

17 ‘‘(A) in the case of an individual who is age 18

18 or older—’’;

19 (5) by inserting after and below subparagraph

20 (A)(iii) (as so redesignated) the following new sub21 paragraph:

22 ‘‘(B) in the case of an individual who is under

23 the age of 18—

24 ‘‘(i) substantial evidence which dem25 onstrates that there has been medical improve-
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•S 1956 PCS

1 ment in the individual’s impairment or com2 bination of impairments, and that such impair3 ment or combination of impairments no longer

4 results in marked and severe functional limita5 tions; or

6 ‘‘(ii) substantial evidence which dem7 onstrates that, as determined on the basis of

8 new or improved diagnostic techniques or eval9 uations, the individual’s impairment or com10 bination of impairments, is not as disabling as

11 it was considered to be at the time of the most

12 recent prior decision that the individual was

13 under a disability or continued to be under a

14 disability, and such impairment or combination

15 of impairments does not result in marked and

16 severe functional limitations; or’’;

17 (6) by redesignating subparagraph (D) as sub18 paragraph (C) and by inserting in such subpara19 graph ‘‘in the case of any individual,’’ before ‘‘sub20 stantial evidence’’; and

21 (7) in the first sentence following subparagraph

22 (C) (as redesignated by paragraph (6)), by—

23 (A) inserting ‘‘(i)’’ before ‘‘to restore’’; and

24 (B) inserting ‘‘, or (ii) in the case of an in25 dividual under the age of 18, to eliminate or
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1 improve the individual’s impairment or com2 bination of impairments so that it no longer re3 sults in marked and severe functional limita4 tions’’ immediately before the period.

5 (e) EFFECTIVE DATES, ETC.—

6 (1) EFFECTIVE DATES.—

7 (A) SUBSECTIONS (a) AND (c).—

8 (i) IN GENERAL.—The provisions of,

9 and amendments made by, subsections (a)

10 and (c) shall apply to any individual who

11 applies for, or whose claim is finally adju12 dicated with respect to, benefits under title

13 XVI of the Social Security Act on or after

14 the date of the enactment of this Act,

15 without regard to whether regulations have

16 been issued to implement such provisions

17 and amendments.

18 (ii) DETERMINATION OF FINAL ADJU19 DICATION.—For purposes of clause (i), no

20 individual’s claim with respect to such ben21 efits may be considered to be finally adju22 dicated before such date of enactment if,

23 on or after such date, there is pending a

24 request for either administrative or judicial

25 review with respect to such claim that has
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1 been denied in whole, or there is pending,

2 with respect to such claim, readjudication

3 by the Commissioner of Social Security

4 pursuant to relief in a class action or im5 plementation by the Commissioner of a

6 court remand order.

7 (B) SUBSECTION (d).—The amendments

8 made by subsection (d) shall apply with respect

9 to benefits under title XVI of the Social Secu10 rity Act for months beginning on or after the

11 date of the enactment of this Act, without re12 gard to whether regulations have been issued to

13 implement such amendments.

14 (2) APPLICATION TO CURRENT RECIPIENTS.—

15 (A) ELIGIBILITY REDETERMINATIONS.—

16 During the period beginning on the date of the

17 enactment of this Act and ending on the date

18 which is 1 year after such date of enactment,

19 the Commissioner of Social Security shall rede20 termine the eligibility of any individual under

21 age 18 who is receiving supplemental security

22 income benefits by reason of disability under

23 title XVI of the Social Security Act as of the

24 date of the enactment of this Act and whose eli25 gibility for such benefits may terminate by rea-
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•S 1956 PCS

1 son of the provisions of, or amendments made

2 by, subsections (a) and (c) of this section. With

3 respect to any redetermination under this sub4 paragraph—

5 (i) section 1614(a)(4) of the Social

6 Security Act (42 U.S.C. 1382c(a)(4)) shall

7 not apply;

8 (ii) the Commissioner of Social Secu9 rity shall apply the eligibility criteria for

10 new applicants for benefits under title XVI

11 of such Act;

12 (iii) the Commissioner shall give such

13 redetermination priority over all continuing

14 eligibility reviews and other reviews under

15 such title; and

16 (iv) such redetermination shall be

17 counted as a review or redetermination

18 otherwise required to be made under sec19 tion 208 of the Social Security Independ20 ence and Program Improvements Act of

21 1994 or any other provision of title XVI of

22 the Social Security Act.

23 (B) GRANDFATHER PROVISION.—The pro24 visions of, and amendments made by, sub25 sections (a) and (c) of this section, and the re-
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1 determination under subparagraph (A), shall

2 only apply with respect to the benefits of an in3 dividual described in subparagraph (A) for

4 months beginning on or after the later of July

5 1, 1997, or the date of the redetermination with

6 respect to such individual.

7 (C) NOTICE.—Not later than January 1,

8 1997, the Commissioner of Social Security shall

9 notify an individual described in subparagraph

10 (A) of the provisions of this paragraph.

11 (3) REPORT.—The Commissioner of Social Se12 curity shall report to the Congress regarding the

13 progress made in implementing the provisions of,

14 and amendments made by, this section on child dis15 ability evaluations not later than 180 days after the

16 date of the enactment of this Act.

17 (4) REGULATIONS.—Notwithstanding any other

18 provision of law, the Commissioner of Social Secu19 rity shall submit for review to the committees of ju20 risdiction in the Congress any final regulation per21 taining to the eligibility of individuals under age 18

22 for benefits under title XVI of the Social Security

23 Act at least 45 days before the effective date of such

24 regulation. The submission under this paragraph

25 shall include supporting documentation providing a
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1 cost analysis, workload impact, and projections as to

2 how the regulation will effect the future number of

3 recipients under such title.

4 (5) APPROPRIATIONS.—

5 (A) IN GENERAL.—Out of any money in

6 the Treasury not otherwise appropriated, there

7 are authorized to be appropriated and are here8 by appropriated, to remain available without

9 fiscal year limitation, $200,000,000 for fiscal

10 year 1997, $75,000,000 for fiscal year 1998,

11 and $25,000,000 for fiscal year 1999, for the

12 Commissioner of Social Security to utilize only

13 for continuing disability reviews and redeter14 minations under title XVI of the Social Security

15 Act, with reviews and redeterminations for indi16 viduals affected by the provisions of subsection

17 (b) given highest priority.

18 (B) ADDITIONAL FUNDS.—Amounts appro19 priated under subparagraph (A) shall be in ad20 dition to any funds otherwise appropriated for

21 continuing disability reviews and redetermina22 tions under title XVI of the Social Security Act.

23 (6) BENEFITS UNDER TITLE XVI.—For pur24 poses of this subsection, the term ‘‘benefits under

25 title XVI of the Social Security Act’’ includes sup-
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•S 1956 PCS

1 plementary payments pursuant to an agreement for

2 Federal administration under section 1616(a) of the

3 Social Security Act, and payments pursuant to an

4 agreement entered into under section 212(b) of Pub5 lic Law 93–66.

6 SEC. 2212. ELIGIBILITY REDETERMINATIONS AND CON7 TINUING DISABILITY REVIEWS.

8 (a) CONTINUING DISABILITY REVIEWS RELATING TO

9 CERTAIN CHILDREN.—Section 1614(a)(3)(H) (42 U.S.C.

10 1382c(a)(3)(H)), as redesignated by section 2211(a)(3) of

11 this Act, is amended—

12 (1) by inserting ‘‘(i)’’ after ‘‘(H)’’; and

13 (2) by adding at the end the following new

14 clause:

15 ‘‘(ii)(I) Not less frequently than once every 3 years,

16 the Commissioner shall review in accordance with para17 graph (4) the continued eligibility for benefits under this

18 title of each individual who has not attained 18 years of

19 age and is eligible for such benefits by reason of an im20 pairment (or combination of impairments) which is likely

21 to improve (or, at the option of the Commissioner, which

22 is unlikely to improve).

23 ‘‘(II) A representative payee of a recipient whose case

24 is reviewed under this clause shall present, at the time

25 of review, evidence demonstrating that the recipient is,
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1 and has been, receiving treatment, to the extent consid2 ered medically necessary and available, of the condition

3 which was the basis for providing benefits under this title.

4 ‘‘(III) If the representative payee refuses to comply

5 without good cause with the requirements of subclause

6 (II), the Commissioner of Social Security shall, if the

7 Commissioner determines it is in the best interest of the

8 individual, promptly suspend payment of benefits to the

9 representative payee, and provide for payment of benefits

10 to an alternative representative payee of the individual or,

11 if the interest of the individual under this title would be

12 served thereby, to the individual.

13 ‘‘(IV) Subclause (II) shall not apply to the represent14 ative payee of any individual with respect to whom the

15 Commissioner determines such application would be inap16 propriate or unnecessary. In making such determination,

17 the Commissioner shall take into consideration the nature

18 of the individual’s impairment (or combination of impair19 ments). Section 1631(c) shall not apply to a finding by

20 the Commissioner that the requirements of subclause (II)

21 should not apply to an individual’s representative payee.’’.

22 (b) DISABILITY ELIGIBILITY REDETERMINATIONS

23 REQUIRED FOR SSI RECIPIENTS WHO ATTAIN 18 YEARS

24 OF AGE.—
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1 (1) IN GENERAL.—Section 1614(a)(3)(H) (42

2 U.S.C. 1382c(a)(3)(H)), as amended by subsection

3 (a) of this section, is amended by adding at the end

4 the following new clause:

5 ‘‘(iii) If an individual is eligible for benefits under this

6 title by reason of disability for the month preceding the

7 month in which the individual attains the age of 18 years,

8 the Commissioner shall redetermine such eligibility—

9 ‘‘(I) during the 1-year period beginning on the

10 individual’s 18th birthday; and

11 ‘‘(II) by applying the criteria used in determin12 ing the initial eligibility for applicants who are age

13 18 or older.

14 With respect to a redetermination under this clause, para15 graph (4) shall not apply and such redetermination shall

16 be considered a substitute for a review or redetermination

17 otherwise required under any other provision of this sub18 paragraph during that 1-year period.’’.

19 (2) CONFORMING REPEAL.—Section 207 of the

20 Social Security Independence and Program Improve21 ments Act of 1994 (42 U.S.C. 1382 note; 108 Stat.

22 1516) is hereby repealed.

23 (c) CONTINUING DISABILITY REVIEW REQUIRED FOR

24 LOW BIRTH WEIGHT BABIES.—Section 1614(a)(3)(H)

25 (42 U.S.C. 1382c(a)(3)(H)), as amended by subsections
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1 (a) and (b) of this section, is amended by adding at the

2 end the following new clause:

3 ‘‘(iv)(I) Not later than 12 months after the birth of

4 an individual, the Commissioner shall review in accordance

5 with paragraph (4) the continuing eligibility for benefits

6 under this title by reason of disability of such individual

7 whose low birth weight is a contributing factor material

8 to the Commissioner’s determination that the individual

9 is disabled.

10 ‘‘(II) A review under subclause (I) shall be considered

11 a substitute for a review otherwise required under any

12 other provision of this subparagraph during that 12-

13 month period.

14 ‘‘(III) A representative payee of a recipient whose

15 case is reviewed under this clause shall present, at the

16 time of review, evidence demonstrating that the recipient

17 is, and has been, receiving treatment, to the extent consid18 ered medically necessary and available, of the condition

19 which was the basis for providing benefits under this title.

20 ‘‘(IV) If the representative payee refuses to comply

21 without good cause with the requirements of subclause

22 (III), the Commissioner of Social Security shall, if the

23 Commissioner determines it is in the best interest of the

24 individual, promptly suspend payment of benefits to the

25 representative payee, and provide for payment of benefits
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•S 1956 PCS

1 to an alternative representative payee of the individual or,

2 if the interest of the individual under this title would be

3 served thereby, to the individual.

4 ‘‘(V) Subclause (III) shall not apply to the represent5 ative payee of any individual with respect to whom the

6 Commissioner determines such application would be inap7 propriate or unnecessary. In making such determination,

8 the Commissioner shall take into consideration the nature

9 of the individual’s impairment (or combination of impair10 ments). Section 1631(c) shall not apply to a finding by

11 the Commissioner that the requirements of subclause (III)

12 should not apply to an individual’s representative payee.’’.

13 (d) EFFECTIVE DATE.—The amendments made by

14 this section shall apply to benefits for months beginning

15 on or after the date of the enactment of this Act, without

16 regard to whether regulations have been issued to imple17 ment such amendments.

18 SEC. 2213. ADDITIONAL ACCOUNTABILITY REQUIREMENTS.

19 (a) REQUIREMENT TO ESTABLISH ACCOUNT.—Sec20 tion 1631(a)(2) (42 U.S.C. 1383(a)(2)) is amended—

21 (1) by redesignating subparagraphs (F) and

22 (G) as subparagraphs (G) and (H), respectively; and

23 (2) by inserting after subparagraph (E) the fol24 lowing new subparagraph:
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•S 1956 PCS

1 ‘‘(F)(i)(I) Each representative payee of an eligible in2 dividual under the age of 18 who is eligible for the pay3 ment of benefits described in subclause (II) shall establish

4 on behalf of such individual an account in a financial insti5 tution into which such benefits shall be paid, and shall

6 thereafter maintain such account for use in accordance

7 with clause (ii).

8 ‘‘(II) Benefits described in this subclause are past9 due monthly benefits under this title (which, for purposes

10 of this subclause, include State supplementary payments

11 made by the Commissioner pursuant to an agreement

12 under section 1616 or section 212(b) of Public Law 93–

13 66) in an amount (after any withholding by the Commis14 sioner for reimbursement to a State for interim assistance

15 under subsection (g)) that exceeds the product of—

16 ‘‘(aa) 6, and

17 ‘‘(bb) the maximum monthly benefit payable

18 under this title to an eligible individual.

19 ‘‘(ii)(I) A representative payee may use funds in the

20 account established under clause (i) to pay for allowable

21 expenses described in subclause (II).

22 ‘‘(II) An allowable expense described in this subclause

23 is an expense for—

24 ‘‘(aa) education or job skills training;

25 ‘‘(bb) personal needs assistance;
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1 ‘‘(cc) special equipment;

2 ‘‘(dd) housing modification;

3 ‘‘(ee) medical treatment;

4 ‘‘(ff) therapy or rehabilitation; or

5 ‘‘(gg) any other item or service that the Com6 missioner determines to be appropriate;

7 provided that such expense benefits such individual and,

8 in the case of an expense described in item (cc), (dd), (ff),

9 or (gg), is related to the impairment (or combination of

10 impairments) of such individual.

11 ‘‘(III) The use of funds from an account established

12 under clause (i) in any manner not authorized by this

13 clause—

14 ‘‘(aa) by a representative payee shall be consid15 ered a misapplication of benefits for all purposes of

16 this paragraph, and any representative payee who

17 knowingly misapplies benefits from such an account

18 shall be liable to the Commissioner in an amount

19 equal to the total amount of such benefits; and

20 ‘‘(bb) by an eligible individual who is his or her

21 own payee shall be considered a misapplication of

22 benefits for all purposes of this paragraph and the

23 total amount of such benefits so used shall be con24 sidered to be the uncompensated value of a disposed
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1 resource and shall be subject to the provisions of

2 section 1613(c).

3 ‘‘(IV) This clause shall continue to apply to funds in

4 the account after the child has reached age 18, regardless

5 of whether benefits are paid directly to the beneficiary or

6 through a representative payee.

7 ‘‘(iii) The representative payee may deposit into the

8 account established pursuant to clause (i)—

9 ‘‘(I) past-due benefits payable to the eligible in10 dividual in an amount less than that specified in

11 clause (i)(II), and

12 ‘‘(II) any other funds representing an under13 payment under this title to such individual, provided

14 that the amount of such underpayment is equal to

15 or exceeds the maximum monthly benefit payable

16 under this title to an eligible individual.

17 ‘‘(iv) The Commissioner of Social Security shall es18 tablish a system for accountability monitoring whereby

19 such representative payee shall report, at such time and

20 in such manner as the Commissioner shall require, on ac21 tivity respecting funds in the account established pursuant

22 to clause (i).’’.

23 (b) CONFORMING AMENDMENTS.—

24 (1) EXCLUSION FROM RESOURCES.—Section

25 1613(a) (42 U.S.C. 1382b(a)) is amended—
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•S 1956 PCS

1 (A) by striking ‘‘and’’ at the end of para2 graph (10);

3 (B) by striking the period at the end of

4 paragraph (11) and inserting ‘‘; and’’; and

5 (C) by inserting after paragraph (11) the

6 following new paragraph:

7 ‘‘(12) any account, including accrued interest or

8 other earnings thereon, established and maintained

9 in accordance with section 1631(a)(2)(F).’’.

10 (2) EXCLUSION FROM INCOME.—Section

11 1612(b) (42 U.S.C. 1382a(b)) is amended—

12 (A) by striking ‘‘and’’ at the end of para13 graph (19);

14 (B) by striking the period at the end of

15 paragraph (20) and inserting ‘‘; and’’; and

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

17 paragraph:

18 ‘‘(21) the interest or other earnings on any ac19 count established and maintained in accordance with

20 section 1631(a)(2)(F).’’.

21 (c) EFFECTIVE DATE.—The amendments made

22 by this section shall apply to payments made after

23 the date of the enactment of this Act.
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•S 1956 PCS

1 SEC. 2214. REDUCTION IN CASH BENEFITS PAYABLE TO IN2 STITUTIONALIZED INDIVIDUALS WHOSE MED3 ICAL COSTS ARE COVERED BY PRIVATE IN4 SURANCE.

5 (a) IN GENERAL.—Section 1611(e)(1)(B) (42 U.S.C.

6 1382(e)(1)(B)) is amended—

7 (1) by striking ‘‘title XIX, or’’ and inserting

8 ‘‘title XV or XIX,’’; and

9 (2) by inserting ‘‘or, in the case of an eligible

10 individual under the age of 18, receiving payments

11 (with respect to such individual) under any health

12 insurance policy issued by a private provider of such

13 insurance’’ after ‘‘section 1614(f)(2)(B),’’.

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

15 this section shall apply to benefits for months beginning

16 90 or more days after the date of the enactment of this

17 Act, without regard to whether regulations have been is18 sued to implement such amendments.

19 SEC. 2215. REGULATIONS.

20 Within 3 months after the date of the enactment of

21 this Act, the Commissioner of Social Security shall pre22 scribe such regulations as may be necessary to implement

23 the amendments made by this subchapter.
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1 Subchapter C—Additional Enforcement

2 Provision

3 SEC. 2221. INSTALLMENT PAYMENT OF LARGE PAST-DUE

4 SUPPLEMENTAL SECURITY INCOME BENE5 FITS.

6 (a) IN GENERAL.—Section 1631(a) (42 U.S.C. 1383)

7 is amended by adding at the end the following new para8 graph:

9 ‘‘(10)(A) If an individual is eligible for past-due

10 monthly benefits under this title in an amount that (after

11 any withholding for reimbursement to a State for interim

12 assistance under subsection (g)) equals or exceeds the

13 product of—

14 ‘‘(i) 12, and

15 ‘‘(ii) the maximum monthly benefit payable

16 under this title to an eligible individual (or, if appro17 priate, to an eligible individual and eligible spouse),

18 then the payment of such past-due benefits (after any such

19 reimbursement to a State) shall be made in installments

20 as provided in subparagraph (B).

21 ‘‘(B)(i) The payment of past-due benefits subject to

22 this subparagraph shall be made in not to exceed 3 install23 ments that are made at 6-month intervals.

24 ‘‘(ii) Except as provided in clause (iii), the amount

25 of each of the first and second installments may not exceed
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1 an amount equal to the product of clauses (i) and (ii) of

2 subparagraph (A).

3 ‘‘(iii) In the case of an individual who has—

4 ‘‘(I) outstanding debt attributable to—

5 ‘‘(aa) food,

6 ‘‘(bb) clothing,

7 ‘‘(cc) shelter, or

8 ‘‘(dd) medically necessary services, supplies

9 or equipment, or medicine; or

10 ‘‘(II) current expenses or expenses anticipated

11 in the near term attributable to—

12 ‘‘(aa) medically necessary services, supplies

13 or equipment, or medicine, or

14 ‘‘(bb) the purchase of a home, and

15 such debt or expenses are not subject to reimbursement

16 by a public assistance program, the Secretary under title

17 XVIII, a State plan approved under title XV or XIX, or

18 any private entity legally liable to provide payment pursu19 ant to an insurance policy, pre-paid plan, or other ar20 rangement, the limitation specified in clause (ii) may be

21 exceeded by an amount equal to the total of such debt

22 and expenses.

23 ‘‘(C) This paragraph shall not apply to any individual

24 who, at the time of the Commissioner’s determination that
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1 such individual is eligible for the payment of past-due

2 monthly benefits under this title—

3 ‘‘(i) is afflicted with a medically determinable

4 impairment that is expected to result in death within

5 12 months; or

6 ‘‘(ii) is ineligible for benefits under this title

7 and the Commissioner determines that such individ8 ual is likely to remain ineligible for the next 12

9 months.

10 ‘‘(D) For purposes of this paragraph, the term ‘bene11 fits under this title’ includes supplementary payments pur12 suant to an agreement for Federal administration under

13 section 1616(a), and payments pursuant to an agreement

14 entered into under section 212(b) of Public Law 93–66.’’.

15 (b) CONFORMING AMENDMENT.—Section 1631(a)(1)

16 (42 U.S.C. 1383(a)(1)) is amended by inserting ‘‘(subject

17 to paragraph (10))’’ immediately before ‘‘in such install18 ments’’.

19 (c) EFFECTIVE DATE.—

20 (1) IN GENERAL.—The amendments made by

21 this section are effective with respect to past-due

22 benefits payable under title XVI of the Social Secu23 rity Act after the third month following the month

24 in which this Act is enacted.
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1 (2) BENEFITS PAYABLE UNDER TITLE XVI.—

2 For purposes of this subsection, the term ‘‘benefits

3 payable under title XVI of the Social Security Act’’

4 includes supplementary payments pursuant to an

5 agreement for Federal administration under section

6 1616(a) of the Social Security Act, and payments

7 pursuant to an agreement entered into under section

8 212(b) of Public Law 93–66.

9 SEC. 2222. REGULATIONS.

10 Within 3 months after the date of the enactment of

11 this Act, the Commissioner of Social Security shall pre12 scribe such regulations as may be necessary to implement

13 the amendments made by this subchapter.

14 Subchapter D—State Supplementation

15 Programs

16 SEC. 2225. REPEAL OF MAINTENANCE OF EFFORT RE17 QUIREMENTS APPLICABLE TO OPTIONAL

18 STATE PROGRAMS FOR SUPPLEMENTATION

19 OF SSI BENEFITS.

20 Section 1618 (42 U.S.C. 1382g) is hereby repealed.
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1 Subchapter E—Studies Regarding

2 Supplemental Security Income Program

3 SEC. 2231. ANNUAL REPORT ON THE SUPPLEMENTAL SECU4 RITY INCOME PROGRAM.

5 Title XVI (42 U.S.C. 1381 et seq.), as amended by

6 section 2201(c) of this Act, is amended by adding at the

7 end the following new section:

8 ‘‘ANNUAL REPORT ON PROGRAM

9 ‘‘SEC. 1637. (a) Not later than May 30 of each year,

10 the Commissioner of Social Security shall prepare and de11 liver a report annually to the President and the Congress

12 regarding the program under this title, including—

13 ‘‘(1) a comprehensive description of the pro14 gram;

15 ‘‘(2) historical and current data on allowances

16 and denials, including number of applications and

17 allowance rates for initial determinations, reconsid18 eration determinations, administrative law judge

19 hearings, appeals council reviews, and Federal court

20 decisions;

21 ‘‘(3) historical and current data on characteris22 tics of recipients and program costs, by recipient

23 group (aged, blind, disabled adults, and disabled

24 children);

25 ‘‘(4) historical and current data on prior enroll26 ment by recipients in public benefit programs, in-
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1 cluding State programs funded under part A of title

2 IV of the Social Security Act and State general as3 sistance programs;

4 ‘‘(5) projections of future number of recipients

5 and program costs, through at least 25 years;

6 ‘‘(6) number of redeterminations and continu7 ing disability reviews, and the outcomes of such re8 determinations and reviews;

9 ‘‘(7) data on the utilization of work incentives;

10 ‘‘(8) detailed information on administrative and

11 other program operation costs;

12 ‘‘(9) summaries of relevant research undertaken

13 by the Social Security Administration, or by other

14 researchers;

15 ‘‘(10) State supplementation program oper16 ations;

17 ‘‘(11) a historical summary of statutory

18 changes to this title; and

19 ‘‘(12) such other information as the Commis20 sioner deems useful.

21 ‘‘(b) Each member of the Social Security Advisory

22 Board shall be permitted to provide an individual report,

23 or a joint report if agreed, of views of the program under

24 this title, to be included in the annual report required

25 under this section.’’.
399

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1 SEC. 2232. STUDY BY GENERAL ACCOUNTING OFFICE.

2 Not later than January 1, 1999, the Comptroller

3 General of the United States shall study and report on—

4 (1) the impact of the amendments made by,

5 and the provisions of, this chapter on the supple6 mental security income program under title XVI of

7 the Social Security Act; and

8 (2) extra expenses incurred by families of chil9 dren receiving benefits under such title that are not

10 covered by other Federal, State, or local programs.

11 CHAPTER 3—CHILD SUPPORT

12 SEC. 2300. REFERENCE TO SOCIAL SECURITY ACT.

13 Except as otherwise specifically provided, wherever in

14 this chapter an amendment is expressed in terms of an

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

16 the reference shall be considered to be made to that sec17 tion or other provision of the Social Security Act.

18 Subchapter A—Eligibility for Services;

19 Distribution of Payments

20 SEC. 2301. STATE OBLIGATION TO PROVIDE CHILD SUP21 PORT ENFORCEMENT SERVICES.

22 (a) STATE PLAN REQUIREMENTS.—Section 454 (42

23 U.S.C. 654) is amended—

24 (1) by striking paragraph (4) and inserting the

25 following new paragraph:

26 ‘‘(4) provide that the State will—
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1 ‘‘(A) provide services relating to the estab2 lishment of paternity or the establishment,

3 modification, or enforcement of child support

4 obligations, as appropriate, under the plan with

5 respect to—

6 ‘‘(i) each child for whom (I) assist7 ance is provided under the State program

8 funded under part A of this title, (II) ben9 efits or services for foster care mainte10 nance are provided under the State pro11 gram funded under part E of this title,

12 (III) medical assistance is provided under

13 the State plan under title XV, or (IV)

14 medical assistance is provided under the

15 State plan approved under title XIX, un16 less, in accordance with paragraph (29),

17 good cause or other exceptions exist;

18 ‘‘(ii) any other child, if an individual

19 applies for such services with respect to

20 the child; and

21 ‘‘(B) enforce any support obligation estab22 lished with respect to—

23 ‘‘(i) a child with respect to whom the

24 State provides services under the plan; or
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1 ‘‘(ii) the custodial parent of such a

2 child;’’; and

3 (2) in paragraph (6)—

4 (A) by striking ‘‘provide that’’ and insert5 ing ‘‘provide that—’’;

6 (B) by striking subparagraph (A) and in7 serting the following new subparagraph:

8 ‘‘(A) services under the plan shall be made

9 available to residents of other States on the

10 same terms as to residents of the State submit11 ting the plan;’’;

12 (C) in subparagraph (B), by inserting ‘‘on

13 individuals not receiving assistance under any

14 State program funded under part A’’ after

15 ‘‘such services shall be imposed’’;

16 (D) in each of subparagraphs (B), (C),

17 (D), and (E)—

18 (i) by indenting the subparagraph in

19 the same manner as, and aligning the left

20 margin of the subparagraph with the left

21 margin of, the matter inserted by subpara22 graph (B) of this paragraph; and

23 (ii) by striking the final comma and

24 inserting a semicolon; and
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1 (E) in subparagraph (E), by indenting

2 each of clauses (i) and (ii) 2 additional ems.

3 (b) CONTINUATION OF SERVICES FOR FAMILIES

4 CEASING TO RECEIVE ASSISTANCE UNDER THE STATE

5 PROGRAM FUNDED UNDER PART A.—Section 454 (42

6 U.S.C. 654) is amended—

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

8 (23);

9 (2) by striking the period at the end of para10 graph (24) and inserting ‘‘; and’’; and

11 (3) by adding after paragraph (24) the follow12 ing new paragraph:

13 ‘‘(25) provide that if a family with respect to

14 which services are provided under the plan ceases to

15 receive assistance under the State program funded

16 under part A, the State shall provide appropriate no17 tice to the family and continue to provide such serv18 ices, subject to the same conditions and on the same

19 basis as in the case of other individuals to whom

20 services are furnished under the plan, except that an

21 application or other request to continue services

22 shall not be required of such a family and paragraph

23 (6)(B) shall not apply to the family.’’.

24 (c) CONFORMING AMENDMENTS.—
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1 (1) Section 452(b) (42 U.S.C. 652(b)) is

2 amended by striking ‘‘454(6)’’ and inserting

3 ‘‘454(4)’’.

4 (2) Section 452(g)(2)(A) (42 U.S.C.

5 652(g)(2)(A)) is amended by striking ‘‘454(6)’’ each

6 place it appears and inserting ‘‘454(4)(A)(ii)’’.

7 (3) Section 466(a)(3)(B) (42 U.S.C.

8 666(a)(3)(B)) is amended by striking ‘‘in the case of

9 overdue support which a State has agreed to collect

10 under section 454(6)’’ and inserting ‘‘in any other

11 case’’.

12 (4) Section 466(e) (42 U.S.C. 666(e)) is

13 amended by striking ‘‘paragraph (4) or (6) of sec14 tion 454’’ and inserting ‘‘section 454(4)’’.

15 SEC. 2302. DISTRIBUTION OF CHILD SUPPORT COLLEC16 TIONS.

17 (a) IN GENERAL.—Section 457 (42 U.S.C. 657) is

18 amended to read as follows:

19 ‘‘SEC. 457. DISTRIBUTION OF COLLECTED SUPPORT.

20 ‘‘(a) IN GENERAL.—Subject to subsection (e), an

21 amount collected on behalf of a family as support by a

22 State pursuant to a plan approved under this part shall

23 be distributed as follows:
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1 ‘‘(1) FAMILIES RECEIVING ASSISTANCE.—In the

2 case of a family receiving assistance from the State,

3 the State shall—

4 ‘‘(A) pay to the Federal Government the

5 Federal share of the amount so collected; and

6 ‘‘(B) retain, or distribute to the family, the

7 State share of the amount so collected.

8 ‘‘(2) FAMILIES THAT FORMERLY RECEIVED AS9 SISTANCE.—In the case of a family that formerly re10 ceived assistance from the State:

11 ‘‘(A) CURRENT SUPPORT PAYMENTS.—To

12 the extent that the amount so collected does not

13 exceed the amount required to be paid to the

14 family for the month in which collected, the

15 State shall distribute the amount so collected to

16 the family.

17 ‘‘(B) PAYMENTS OF ARREARAGES.—To the

18 extent that the amount so collected exceeds the

19 amount required to be paid to the family for

20 the month in which collected, the State shall

21 distribute the amount so collected as follows:

22 ‘‘(i) DISTRIBUTION OF ARREARAGES

23 THAT ACCRUED AFTER THE FAMILY

24 CEASED TO RECEIVE ASSISTANCE.—
405

•S 1956 PCS

1 ‘‘(I) PRE-OCTOBER 1997.—Except

2 as provided in subclause (II), the pro3 visions of this section (other than sub4 section (b)(1)) as in effect and applied

5 on the day before the date of the en6 actment of section 2302 of the Per7 sonal Responsibility and Work Oppor8 tunity Act of 1996 shall apply with

9 respect to the distribution of support

10 arrearages that—

11 ‘‘(aa) accrued after the fam12 ily ceased to receive assistance,

13 and

14 ‘‘(bb) are collected before

15 October 1, 1997.

16 ‘‘(II) POST-SEPTEMBER 1997.—

17 With respect to the amount so col18 lected on or after October 1, 1997 (or

19 before such date, at the option of the

20 State)—

21 ‘‘(aa) IN GENERAL.—The

22 State shall first distribute the

23 amount so collected (other than

24 any amount described in clause

25 (iv)) to the family to the extent
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1 necessary to satisfy any support

2 arrearages with respect to the

3 family that accrued after the

4 family ceased to receive assist5 ance from the State.

6 ‘‘(bb) REIMBURSEMENT OF

7 GOVERNMENTS FOR ASSISTANCE

8 PROVIDED TO THE FAMILY.—

9 After the application of division

10 (aa) and clause (ii)(II)(aa) with

11 respect to the amount so col12 lected, the State shall retain the

13 State share of the amount so col14 lected, and pay to the Federal

15 Government the Federal share

16 (as defined in subsection (c)(2))

17 of the amount so collected, but

18 only to the extent necessary to

19 reimburse amounts paid to the

20 family as assistance by the State.

21 ‘‘(cc) DISTRIBUTION OF THE

22 REMAINDER TO THE FAMILY.—

23 To the extent that neither divi24 sion (aa) nor division (bb) applies

25 to the amount so collected, the
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1 State shall distribute the amount

2 to the family.

3 ‘‘(ii) DISTRIBUTION OF ARREARAGES

4 THAT ACCRUED BEFORE THE FAMILY RE5 CEIVED ASSISTANCE.—

6 ‘‘(I) PRE-OCTOBER 2000.—Except

7 as provided in subclause (II), the pro8 visions of this section (other than sub9 section (b)(1)) as in effect and applied

10 on the day before the date of the en11 actment of section 2302 of the Per12 sonal Responsibility and Work Oppor13 tunity Act of 1996 shall apply with

14 respect to the distribution of support

15 arrearages that—

16 ‘‘(aa) accrued before the

17 family received assistance, and

18 ‘‘(bb) are collected before

19 October 1, 2000.

20 ‘‘(II) POST-SEPTEMBER 2000.—

21 Unless, based on the report required

22 by paragraph (4), the Congress deter23 mines otherwise, with respect to the

24 amount so collected on or after Octo-
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•S 1956 PCS

1 ber 1, 2000 (or before such date, at

2 the option of the State)—

3 ‘‘(aa) IN GENERAL.—The

4 State shall first distribute the

5 amount so collected (other than

6 any amount described in clause

7 (iv)) to the family to the extent

8 necessary to satisfy any support

9 arrearages with respect to the

10 family that accrued before the

11 family received assistance from

12 the State.

13 ‘‘(bb) REIMBURSEMENT OF

14 GOVERNMENTS FOR ASSISTANCE

15 PROVIDED TO THE FAMILY.—

16 After the application of clause

17 (i)(II)(aa) and division (aa) with

18 respect to the amount so col19 lected, the State shall retain the

20 State share of the amount so col21 lected, and pay to the Federal

22 Government the Federal share

23 (as defined in subsection (c)(2))

24 of the amount so collected, but

25 only to the extent necessary to
409

•S 1956 PCS

1 reimburse amounts paid to the

2 family as assistance by the State.

3 ‘‘(cc) DISTRIBUTION OF THE

4 REMAINDER TO THE FAMILY.—

5 To the extent that neither divi6 sion (aa) nor division (bb) applies

7 to the amount so collected, the

8 State shall distribute the amount

9 to the family.

10 ‘‘(iii) DISTRIBUTION OF ARREARAGES

11 THAT ACCRUED WHILE THE FAMILY RE12 CEIVED ASSISTANCE.—In the case of a

13 family described in this subparagraph, the

14 provisions of paragraph (1) shall apply

15 with respect to the distribution of support

16 arrearages that accrued while the family

17 received assistance.

18 ‘‘(iv) AMOUNTS COLLECTED PURSU19 ANT TO SECTION 464.—Notwithstanding

20 any other provision of this section, any

21 amount of support collected pursuant to

22 section 464 shall be retained by the State

23 to the extent past-due support has been as24 signed to the State as a condition of re25 ceiving assistance from the State, up to the
410

•S 1956 PCS

1 amount necessary to reimburse the State

2 for amounts paid to the family as assist3 ance by the State. The State shall pay to

4 the Federal Government the Federal share

5 of the amounts so retained. To the extent

6 the amount collected pursuant to section

7 464 exceeds the amount so retained, the

8 State shall distribute the excess to the

9 family.

10 ‘‘(v) ORDERING RULES FOR DISTRIBU11 TIONS.—For purposes of this subpara12 graph, unless an earlier effective date is re13 quired by this section, effective October 1,

14 2000, the State shall treat any support ar15 rearages collected, except for amounts col16 lected pursuant to section 464, as accruing

17 in the following order:

18 ‘‘(I) To the period after the fam19 ily ceased to receive assistance.

20 ‘‘(II) To the period before the

21 family received assistance.

22 ‘‘(III) To the period while the

23 family was receiving assistance.

24 ‘‘(3) FAMILIES THAT NEVER RECEIVED ASSIST25 ANCE.—In the case of any other family, the State
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•S 1956 PCS

1 shall distribute the amount so collected to the fam2 ily.

3 ‘‘(4) STUDY AND REPORT.—Not later than Oc4 tober 1, 1998, the Secretary shall report to the Con5 gress the Secretary’s findings with respect to—

6 ‘‘(A) whether the distribution of post-as7 sistance arrearages to families has been effec8 tive in moving people off of welfare and keeping

9 them off of welfare;

10 ‘‘(B) whether early implementation of a

11 pre-assistance arrearage program by some

12 States has been effective in moving people off

13 of welfare and keeping them off of welfare;

14 ‘‘(C) what the overall impact has been of

15 the amendments made by the Personal Respon16 sibility and Work Opportunity Act of 1996 with

17 respect to child support enforcement in moving

18 people off of welfare and keeping them off of

19 welfare; and

20 ‘‘(D) based on the information and data

21 the Secretary has obtained, what changes, if

22 any, should be made in the policies related to

23 the distribution of child support arrearages.

24 ‘‘(b) CONTINUATION OF ASSIGNMENTS.—Any rights

25 to support obligations, which were assigned to a State as
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•S 1956 PCS

1 a condition of receiving assistance from the State under

2 part A and which were in effect on the day before the

3 date of the enactment of the Personal Responsibility and

4 Work Opportunity Act of 1996, shall remain assigned

5 after such date.

6 ‘‘(c) DEFINITIONS.—As used in subsection (a):

7 ‘‘(1) ASSISTANCE.—The term ‘assistance from

8 the State’ means—

9 ‘‘(A) assistance under the State program

10 funded under part A or under the State plan

11 approved under part A of this title (as in effect

12 on the day before the date of the enactment of

13 the Personal Responsibility and Work Oppor14 tunity Act of 1996); and

15 ‘‘(B) foster care maintenance payments

16 under the State plan approved under part E of

17 this title.

18 ‘‘(2) FEDERAL SHARE.—The term ‘Federal

19 share’ means that portion of the amount collected

20 resulting from the application of the Federal medical

21 assistance percentage in effect for the fiscal year in

22 which the amount is collected.

23 ‘‘(3) FEDERAL MEDICAL ASSISTANCE PERCENT24 AGE.—The term ‘Federal medical assistance per25 centage’ means—
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1 ‘‘(A) the Federal medical assistance per2 centage (as defined in section 1118), in the case

3 of Puerto Rico, the Virgin Islands, Guam, and

4 American Samoa; or

5 ‘‘(B) the Federal medical assistance per6 centage (as defined in section 1905(b), as in ef7 fect on September 30, 1996) in the case of any

8 other State.

9 ‘‘(4) STATE SHARE.—The term ‘State share’

10 means 100 percent minus the Federal share.

11 ‘‘(d) HOLD HARMLESS PROVISION.—If the amounts

12 collected which could be retained by the State in the fiscal

13 year (to the extent necessary to reimburse the State for

14 amounts paid to families as assistance by the State) are

15 less than the State share of the amounts collected in fiscal

16 year 1995 (determined in accordance with section 457 as

17 in effect on the day before the date of the enactment of

18 the Personal Responsibility and Work Opportunity Act of

19 1996), the State share for the fiscal year shall be an

20 amount equal to the State share in fiscal year 1995.

21 ‘‘(e) GAP PAYMENTS NOT SUBJECT TO DISTRIBU22 TION UNDER THIS SECTION.—At State option, this sec23 tion shall not apply to any amount collected on behalf of

24 a family as support by the State (and paid to the family

25 in addition to the amount of assistance otherwise payable
414

•S 1956 PCS

1 to the family) pursuant to a plan approved under this part

2 if such amount would have been paid to the family by the

3 State under section 402(a)(28), as in effect and applied

4 on the day before the date of the enactment of section

5 2302 of the Personal Responsibility and Work Oppor6 tunity Act of 1996. For purposes of subsection (d), the

7 State share of such amount paid to the family shall be

8 considered amounts which could be retained by the State

9 if such payments were reported by the State as part of

10 the State share of amounts collected in fiscal year 1995.’’.

11 (b) CONFORMING AMENDMENTS.—

12 (1) Section 464(a)(1) (42 U.S.C. 664(a)(1)) is

13 amended by striking ‘‘section 457(b)(4) or (d)(3)’’

14 and inserting ‘‘section 457’’.

15 (2) Section 454 (42 U.S.C. 654) is amended—

16 (A) in paragraph (11)—

17 (i) by striking ‘‘(11)’’ and inserting

18 ‘‘(11)(A)’’; and

19 (ii) by inserting after the semicolon

20 ‘‘and’’; and

21 (B) by redesignating paragraph (12) as

22 subparagraph (B) of paragraph (11).

23 (c) EFFECTIVE DATES.—

24 (1) IN GENERAL.—Except as provided in para25 graph (2), the amendments made by this section
415

•S 1956 PCS

1 shall be effective on October 1, 1996, or earlier at

2 the State’s option.

3 (2) CONFORMING AMENDMENTS.—The amend4 ments made by subsection (b)(2) shall become effec5 tive on the date of the enactment of this Act.

6 SEC. 2303. PRIVACY SAFEGUARDS.

7 (a) STATE PLAN REQUIREMENT.—Section 454 (42

8 U.S.C. 654), as amended by section 2301(b) of this Act,

9 is amended—

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

11 (24);

12 (2) by striking the period at the end of para13 graph (25) and inserting ‘‘; and’’; and

14 (3) by adding after paragraph (25) the follow15 ing new paragraph:

16 ‘‘(26) will have in effect safeguards, applicable

17 to all confidential information handled by the State

18 agency, that are designed to protect the privacy

19 rights of the parties, including—

20 ‘‘(A) safeguards against unauthorized use

21 or disclosure of information relating to proceed22 ings or actions to establish paternity, or to es23 tablish or enforce support;

24 ‘‘(B) prohibitions against the release of in25 formation on the whereabouts of 1 party to an-
416

•S 1956 PCS

1 other party against whom a protective order

2 with respect to the former party has been en3 tered; and

4 ‘‘(C) prohibitions against the release of in5 formation on the whereabouts of 1 party to an6 other party if the State has reason to believe

7 that the release of the information may result

8 in physical or emotional harm to the former

9 party.’’.

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

11 subsection (a) shall become effective on October 1, 1997.

12 SEC. 2304. RIGHTS TO NOTIFICATION OF HEARINGS.

13 (a) IN GENERAL.—Section 454 (42 U.S.C. 654), as

14 amended by section 2302(b)(2) of this Act, is amended

15 by inserting after paragraph (11) the following new para16 graph:

17 ‘‘(12) provide for the establishment of proce18 dures to require the State to provide individuals who

19 are applying for or receiving services under the State

20 plan, or who are parties to cases in which services

21 are being provided under the State plan—

22 ‘‘(A) with notice of all proceedings in

23 which support obligations might be established

24 or modified; and
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•S 1956 PCS

1 ‘‘(B) with a copy of any order establishing

2 or modifying a child support obligation, or (in

3 the case of a petition for modification) a notice

4 of determination that there should be no change

5 in the amount of the child support award, with6 in 14 days after issuance of such order or de7 termination;’’.

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

9 subsection (a) shall become effective on October 1, 1997.

10 Subchapter B—Locate and Case Tracking

11 SEC. 2311. STATE CASE REGISTRY.

12 Section 454A, as added by section 2344(a)(2) of this

13 Act, is amended by adding at the end the following new

14 subsections:

15 ‘‘(e) STATE CASE REGISTRY.—

16 ‘‘(1) CONTENTS.—The automated system re17 quired by this section shall include a registry (which

18 shall be known as the ‘State case registry’) that con19 tains records with respect to—

20 ‘‘(A) each case in which services are being

21 provided by the State agency under the State

22 plan approved under this part; and

23 ‘‘(B) each support order established or

24 modified in the State on or after October 1,

25 1998.
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•S 1956 PCS

1 ‘‘(2) LINKING OF LOCAL REGISTRIES.—The

2 State case registry may be established by linking

3 local case registries of support orders through an

4 automated information network, subject to this sec5 tion.

6 ‘‘(3) USE OF STANDARDIZED DATA ELE7 MENTS.—Such records shall use standardized data

8 elements for both parents (such as names, social se9 curity numbers and other uniform identification

10 numbers, dates of birth, and case identification

11 numbers), and contain such other information (such

12 as on case status) as the Secretary may require.

13 ‘‘(4) PAYMENT RECORDS.—Each case record in

14 the State case registry with respect to which services

15 are being provided under the State plan approved

16 under this part and with respect to which a support

17 order has been established shall include a record

18 of—

19 ‘‘(A) the amount of monthly (or other peri20 odic) support owed under the order, and other

21 amounts (including arrearages, interest or late

22 payment penalties, and fees) due or overdue

23 under the order;

24 ‘‘(B) any amount described in subpara25 graph (A) that has been collected;
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•S 1956 PCS

1 ‘‘(C) the distribution of such collected

2 amounts;

3 ‘‘(D) the birth date of any child for whom

4 the order requires the provision of support; and

5 ‘‘(E) the amount of any lien imposed with

6 respect to the order pursuant to section

7 466(a)(4).

8 ‘‘(5) UPDATING AND MONITORING.—The State

9 agency operating the automated system required by

10 this section shall promptly establish and update,

11 maintain, and regularly monitor, case records in the

12 State case registry with respect to which services are

13 being provided under the State plan approved under

14 this part, on the basis of—

15 ‘‘(A) information on administrative actions

16 and administrative and judicial proceedings and

17 orders relating to paternity and support;

18 ‘‘(B) information obtained from compari19 son with Federal, State, or local sources of in20 formation;

21 ‘‘(C) information on support collections

22 and distributions; and

23 ‘‘(D) any other relevant information.

24 ‘‘(f) INFORMATION COMPARISONS AND OTHER DIS25 CLOSURES OF INFORMATION.—The State shall use the
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•S 1956 PCS

1 automated system required by this section to extract infor2 mation from (at such times, and in such standardized for3 mat or formats, as may be required by the Secretary), to

4 share and compare information with, and to receive infor5 mation from, other data bases and information compari6 son services, in order to obtain (or provide) information

7 necessary to enable the State agency (or the Secretary or

8 other State or Federal agencies) to carry out this part,

9 subject to section 6103 of the Internal Revenue Code of

10 1986. Such information comparison activities shall include

11 the following:

12 ‘‘(1) FEDERAL CASE REGISTRY OF CHILD SUP13 PORT ORDERS.—Furnishing to the Federal Case

14 Registry of Child Support Orders established under

15 section 453(h) (and update as necessary, with infor16 mation including notice of expiration of orders) the

17 minimum amount of information on child support

18 cases recorded in the State case registry that is nec19 essary to operate the registry (as specified by the

20 Secretary in regulations).

21 ‘‘(2) FEDERAL PARENT LOCATOR SERVICE.—

22 Exchanging information with the Federal Parent

23 Locator Service for the purposes specified in section

24 453.
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1 ‘‘(3) TEMPORARY FAMILY ASSISTANCE AND

2 MEDICAID AGENCIES.—Exchanging information with

3 State agencies (of the State and of other States) ad4 ministering programs funded under part A, pro5 grams operated under a State plan under title XV

6 or a State plan approved under title XIX, and other

7 programs designated by the Secretary, as necessary

8 to perform State agency responsibilities under this

9 part and under such programs.

10 ‘‘(4) INTRASTATE AND INTERSTATE INFORMA11 TION COMPARISONS.—Exchanging information with

12 other agencies of the State, agencies of other States,

13 and interstate information networks, as necessary

14 and appropriate to carry out (or assist other States

15 to carry out) the purposes of this part.’’.

16 SEC. 2312. COLLECTION AND DISBURSEMENT OF SUPPORT

17 PAYMENTS.

18 (a) STATE PLAN REQUIREMENT.—Section 454 (42

19 U.S.C. 654), as amended by sections 2301(b) and 2303(a)

20 of this Act, is amended—

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

22 (25);

23 (2) by striking the period at the end of para24 graph (26) and inserting ‘‘; and’’; and
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•S 1956 PCS

1 (3) by adding after paragraph (26) the follow2 ing new paragraph:

3 ‘‘(27) provide that, on and after October 1,

4 1998, the State agency will—

5 ‘‘(A) operate a State disbursement unit in

6 accordance with section 454B; and

7 ‘‘(B) have sufficient State staff (consisting

8 of State employees) and (at State option) con9 tractors reporting directly to the State agency

10 to—

11 ‘‘(i) monitor and enforce support col12 lections through the unit in cases being en13 forced by the State pursuant to section

14 454(4) (including carrying out the auto15 mated data processing responsibilities de16 scribed in section 454A(g)); and

17 ‘‘(ii) take the actions described in sec18 tion 466(c)(1) in appropriate cases.’’.

19 (b) ESTABLISHMENT OF STATE DISBURSEMENT

20 UNIT.—Part D of title IV (42 U.S.C. 651–669), as

21 amended by section 2344(a)(2) of this Act, is amended

22 by inserting after section 454A the following new section:

23 ‘‘SEC. 454B. COLLECTION AND DISBURSEMENT OF SUP24 PORT PAYMENTS.

25 ‘‘(a) STATE DISBURSEMENT UNIT.—
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1 ‘‘(1) IN GENERAL.—In order for a State to

2 meet the requirements of this section, the State

3 agency must establish and operate a unit (which

4 shall be known as the ‘State disbursement unit’) for

5 the collection and disbursement of payments under

6 support orders—

7 ‘‘(A) in all cases being enforced by the

8 State pursuant to section 454(4); and

9 ‘‘(B) in all cases not being enforced by the

10 State under this part in which the support

11 order is initially issued in the State on or after

12 January 1, 1994, and in which the wages of the

13 noncustodial parent are subject to withholding

14 pursuant to section 466(a)(8)(B).

15 ‘‘(2) OPERATION.—The State disbursement

16 unit shall be operated—

17 ‘‘(A) directly by the State agency (or 2 or

18 more State agencies under a regional coopera19 tive agreement), or (to the extent appropriate)

20 by a contractor responsible directly to the State

21 agency; and

22 ‘‘(B) except in cases described in para23 graph (1)(B), in coordination with the auto24 mated system established by the State pursuant

25 to section 454A.
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1 ‘‘(3) LINKING OF LOCAL DISBURSEMENT

2 UNITS.—The State disbursement unit may be estab3 lished by linking local disbursement units through

4 an automated information network, subject to this

5 section, if the Secretary agrees that the system will

6 not cost more nor take more time to establish or op7 erate than a centralized system. In addition, employ8 ers shall be given 1 location to which income with9 holding is sent.

10 ‘‘(b) REQUIRED PROCEDURES.—The State disburse11 ment unit shall use automated procedures, electronic proc12 esses, and computer-driven technology to the maximum

13 extent feasible, efficient, and economical, for the collection

14 and disbursement of support payments, including proce15 dures—

16 ‘‘(1) for receipt of payments from parents, em17 ployers, and other States, and for disbursements to

18 custodial parents and other obligees, the State agen19 cy, and the agencies of other States;

20 ‘‘(2) for accurate identification of payments;

21 ‘‘(3) to ensure prompt disbursement of the cus22 todial parent’s share of any payment; and

23 ‘‘(4) to furnish to any parent, upon request,

24 timely information on the current status of support
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1 payments under an order requiring payments to be

2 made by or to the parent.

3 ‘‘(c) TIMING OF DISBURSEMENTS.—

4 ‘‘(1) IN GENERAL.—Except as provided in para5 graph (2), the State disbursement unit shall distrib6 ute all amounts payable under section 457(a) within

7 2 business days after receipt from the employer or

8 other source of periodic income, if sufficient infor9 mation identifying the payee is provided.

10 ‘‘(2) PERMISSIVE RETENTION OF ARREAR11 AGES.—The State disbursement unit may delay the

12 distribution of collections toward arrearages until

13 the resolution of any timely appeal with respect to

14 such arrearages.

15 ‘‘(d) BUSINESS DAY DEFINED.—As used in this sec16 tion, the term ‘business day’ means a day on which State

17 offices are open for regular business.’’.

18 (c) USE OF AUTOMATED SYSTEM.—Section 454A, as

19 added by section 2344(a)(2) and as amended by section

20 2311 of this Act, is amended by adding at the end the

21 following new subsection:

22 ‘‘(g) COLLECTION AND DISTRIBUTION OF SUPPORT

23 PAYMENTS.—

24 ‘‘(1) IN GENERAL.—The State shall use the

25 automated system required by this section, to the
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1 maximum extent feasible, to assist and facilitate the

2 collection and disbursement of support payments

3 through the State disbursement unit operated under

4 section 454B, through the performance of functions,

5 including, at a minimum—

6 ‘‘(A) transmission of orders and notices to

7 employers (and other debtors) for the withhold8 ing of wages and other income—

9 ‘‘(i) within 2 business days after re10 ceipt of notice of, and the income source

11 subject to, such withholding from a court,

12 another State, an employer, the Federal

13 Parent Locator Service, or another source

14 recognized by the State; and

15 ‘‘(ii) using uniform formats prescribed

16 by the Secretary;

17 ‘‘(B) ongoing monitoring to promptly iden18 tify failures to make timely payment of support;

19 and

20 ‘‘(C) automatic use of enforcement proce21 dures (including procedures authorized pursu22 ant to section 466(c)) if payments are not time23 ly made.

24 ‘‘(2) BUSINESS DAY DEFINED.—As used in

25 paragraph (1), the term ‘business day’ means a day
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•S 1956 PCS

1 on which State offices are open for regular busi2 ness.’’.

3 (d) EFFECTIVE DATES.—

4 (1) IN GENERAL.—Except as provided in para5 graph (2), the amendments made by this section

6 shall become effective on October 1, 1998.

7 (2) LIMITED EXCEPTION TO UNIT HANDLING

8 PAYMENTS.—Notwithstanding section 454B(b)(1) of

9 the Social Security Act, as added by this section,

10 any State which, as of the date of the enactment of

11 this Act, processes the receipt of child support pay12 ments through local courts may, at the option of the

13 State, continue to process through September 30,

14 1999, such payments through such courts as proc15 essed such payments on or before such date of en16 actment.

17 SEC. 2313. STATE DIRECTORY OF NEW HIRES.

18 (a) STATE PLAN REQUIREMENT.—Section 454 (42

19 U.S.C. 654), as amended by sections 2301(b), 2303(a)

20 and 2312(a) of this Act, is amended—

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

22 (26);

23 (2) by striking the period at the end of para24 graph (27) and inserting ‘‘; and’’; and
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1 (3) by adding after paragraph (27) the follow2 ing new paragraph:

3 ‘‘(28) provide that, on and after October 1,

4 1997, the State will operate a State Directory of

5 New Hires in accordance with section 453A.’’.

6 (b) STATE DIRECTORY OF NEW HIRES.—Part D of

7 title IV (42 U.S.C. 651–669) is amended by inserting

8 after section 453 the following new section:

9 ‘‘SEC. 453A. STATE DIRECTORY OF NEW HIRES.

10 ‘‘(a) ESTABLISHMENT.—

11 ‘‘(1) IN GENERAL.—

12 ‘‘(A) REQUIREMENT FOR STATES THAT

13 HAVE NO DIRECTORY.—Except as provided in

14 subparagraph (B), not later than October 1,

15 1997, each State shall establish an automated

16 directory (to be known as the ‘State Directory

17 of New Hires’) which shall contain information

18 supplied in accordance with subsection (b) by

19 employers on each newly hired employee.

20 ‘‘(B) STATES WITH NEW HIRE REPORTING

21 IN EXISTENCE.—A State which has a new hire

22 reporting law in existence on the date of the en23 actment of this section may continue to operate

24 under the State law, but the State must meet

25 the requirements of subsection (g)(2) not later
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1 than October 1, 1997, and the requirements of

2 this section (other than subsection (g)(2)) not

3 later than October 1, 1998.

4 ‘‘(2) DEFINITIONS.—As used in this section:

5 ‘‘(A) EMPLOYEE.—The term ‘employee’—

6 ‘‘(i) means an individual who is an

7 employee within the meaning of chapter 24

8 of the Internal Revenue Code of 1986; and

9 ‘‘(ii) does not include an employee of

10 a Federal or State agency performing in11 telligence or counterintelligence functions,

12 if the head of such agency has determined

13 that reporting pursuant to paragraph (1)

14 with respect to the employee could endan15 ger the safety of the employee or com16 promise an ongoing investigation or intel17 ligence mission.

18 ‘‘(B) EMPLOYER.—

19 ‘‘(i) IN GENERAL.—The term ‘em20 ployer’ has the meaning given such term in

21 section 3401(d) of the Internal Revenue

22 Code of 1986 and includes any govern23 mental entity and any labor organization.

24 ‘‘(ii) LABOR ORGANIZATION.—The

25 term ‘labor organization’ shall have the
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•S 1956 PCS

1 meaning given such term in section 2(5) of

2 the National Labor Relations Act, and in3 cludes any entity (also known as a ‘hiring

4 hall’) which is used by the organization

5 and an employer to carry out requirements

6 described in section 8(f)(3) of such Act of

7 an agreement between the organization

8 and the employer.

9 ‘‘(b) EMPLOYER INFORMATION.—

10 ‘‘(1) REPORTING REQUIREMENT.—

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

12 subparagraphs (B) and (C), each employer shall

13 furnish to the Directory of New Hires of the

14 State in which a newly hired employee works, a

15 report that contains the name, address, and so16 cial security number of the employee, and the

17 name and address of, and identifying number

18 assigned under section 6109 of the Internal

19 Revenue Code of 1986 to, the employer.

20 ‘‘(B) MULTISTATE EMPLOYERS.—An em21 ployer that has employees who are employed in

22 2 or more States and that transmits reports

23 magnetically or electronically may comply with

24 subparagraph (A) by designating 1 State in

25 which such employer has employees to which
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•S 1956 PCS

1 the employer will transmit the report described

2 in subparagraph (A), and transmitting such re3 port to such State. Any employer that transmits

4 reports pursuant to this subparagraph shall no5 tify the Secretary in writing as to which State

6 such employer designates for the purpose of

7 sending reports.

8 ‘‘(C) FEDERAL GOVERNMENT EMPLOY9 ERS.—Any department, agency, or instrumen10 tality of the United States shall comply with

11 subparagraph (A) by transmitting the report

12 described in subparagraph (A) to the National

13 Directory of New Hires established pursuant to

14 section 453.

15 ‘‘(2) TIMING OF REPORT.—Each State may

16 provide the time within which the report required by

17 paragraph (1) shall be made with respect to an em18 ployee, but such report shall be made—

19 ‘‘(A) not later than 20 days after the date

20 the employer hires the employee; or

21 ‘‘(B) in the case of an employer transmit22 ting reports magnetically or electronically, by 2

23 monthly transmissions (if necessary) not less

24 than 12 days nor more than 16 days apart.
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•S 1956 PCS

1 ‘‘(c) REPORTING FORMAT AND METHOD.—Each re2 port required by subsection (b) shall be made on a W–

3 4 form or, at the option of the employer, an equivalent

4 form, and may be transmitted by 1st class mail, magneti5 cally, or electronically.

6 ‘‘(d) CIVIL MONEY PENALTIES ON NONCOMPLYING

7 EMPLOYERS.—The State shall have the option to set a

8 State civil money penalty which shall be less than—

9 ‘‘(1) $25; or

10 ‘‘(2) $500 if, under State law, the failure is the

11 result of a conspiracy between the employer and the

12 employee to not supply the required report or to

13 supply a false or incomplete report.

14 ‘‘(e) ENTRY OF EMPLOYER INFORMATION.—Infor15 mation shall be entered into the data base maintained by

16 the State Directory of New Hires within 5 business days

17 of receipt from an employer pursuant to subsection (b).

18 ‘‘(f) INFORMATION COMPARISONS.—

19 ‘‘(1) IN GENERAL.—Not later than May 1,

20 1998, an agency designated by the State shall, di21 rectly or by contract, conduct automated compari22 sons of the social security numbers reported by em23 ployers pursuant to subsection (b) and the social se24 curity numbers appearing in the records of the State
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•S 1956 PCS

1 case registry for cases being enforced under the

2 State plan.

3 ‘‘(2) NOTICE OF MATCH.—When an information

4 comparison conducted under paragraph (1) reveals a

5 match with respect to the social security number of

6 an individual required to provide support under a

7 support order, the State Directory of New Hires

8 shall provide the agency administering the State

9 plan approved under this part of the appropriate

10 State with the name, address, and social security

11 number of the employee to whom the social security

12 number is assigned, and the name and address of,

13 and identifying number assigned under section 6109

14 of the Internal Revenue Code of 1986 to, the em15 ployer.

16 ‘‘(g) TRANSMISSION OF INFORMATION.—

17 ‘‘(1) TRANSMISSION OF WAGE WITHHOLDING

18 NOTICES TO EMPLOYERS.—Within 2 business days

19 after the date information regarding a newly hired

20 employee is entered into the State Directory of New

21 Hires, the State agency enforcing the employee’s

22 child support obligation shall transmit a notice to

23 the employer of the employee directing the employer

24 to withhold from the wages of the employee an

25 amount equal to the monthly (or other periodic)
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•S 1956 PCS

1 child support obligation (including any past due sup2 port obligation) of the employee, unless the employ3 ee’s wages are not subject to withholding pursuant

4 to section 466(b)(3).

5 ‘‘(2) TRANSMISSIONS TO THE NATIONAL DIREC6 TORY OF NEW HIRES.—

7 ‘‘(A) NEW HIRE INFORMATION.—Within 3

8 business days after the date information re9 garding a newly hired employee is entered into

10 the State Directory of New Hires, the State Di11 rectory of New Hires shall furnish the informa12 tion to the National Directory of New Hires.

13 ‘‘(B) WAGE AND UNEMPLOYMENT COM14 PENSATION INFORMATION.—The State Direc15 tory of New Hires shall, on a quarterly basis,

16 furnish to the National Directory of New Hires

17 extracts of the reports required under section

18 303(a)(6) to be made to the Secretary of Labor

19 concerning the wages and unemployment com20 pensation paid to individuals, by such dates, in

21 such format, and containing such information

22 as the Secretary of Health and Human Services

23 shall specify in regulations.
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•S 1956 PCS

1 ‘‘(3) BUSINESS DAY DEFINED.—As used in this

2 subsection, the term ‘business day’ means a day on

3 which State offices are open for regular business.

4 ‘‘(h) OTHER USES OF NEW HIRE INFORMATION.—

5 ‘‘(1) LOCATION OF CHILD SUPPORT OBLI6 GORS.—The agency administering the State plan ap7 proved under this part shall use information received

8 pursuant to subsection (f)(2) to locate individuals

9 for purposes of establishing paternity and establish10 ing, modifying, and enforcing child support obliga11 tions.

12 ‘‘(2) VERIFICATION OF ELIGIBILITY FOR CER13 TAIN PROGRAMS.—A State agency responsible for

14 administering a program specified in section 1137(b)

15 shall have access to information reported by employ16 ers pursuant to subsection (b) of this section for

17 purposes of verifying eligibility for the program.

18 ‘‘(3) ADMINISTRATION OF EMPLOYMENT SECU19 RITY AND WORKERS’ COMPENSATION.—State agen20 cies operating employment security and workers’

21 compensation programs shall have access to informa22 tion reported by employers pursuant to subsection

23 (b) for the purposes of administering such pro24 grams.’’.
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•S 1956 PCS

1 (c) QUARTERLY WAGE REPORTING.—Section

2 1137(a)(3) (42 U.S.C. 1320b–7(a)(3)) is amended—

3 (1) by inserting ‘‘(including State and local gov4 ernmental entities and labor organizations (as de5 fined in section 453A(a)(2)(B)(iii))’’ after ‘‘employ6 ers’’; and

7 (2) by inserting ‘‘, and except that no report

8 shall be filed with respect to an employee of a State

9 or local agency performing intelligence or counter10 intelligence functions, if the head of such agency has

11 determined that filing such a report could endanger

12 the safety of the employee or compromise an ongo13 ing investigation or intelligence mission’’ after

14 ‘‘paragraph (2)’’.

15 SEC. 2314. AMENDMENTS CONCERNING INCOME WITH16 HOLDING.

17 (a) MANDATORY INCOME WITHHOLDING.—

18 (1) IN GENERAL.—Section 466(a)(1) (42

19 U.S.C. 666(a)(1)) is amended to read as follows:

20 ‘‘(1)(A) Procedures described in subsection (b)

21 for the withholding from income of amounts payable

22 as support in cases subject to enforcement under the

23 State plan.

24 ‘‘(B) Procedures under which the wages of a

25 person with a support obligation imposed by a sup-
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•S 1956 PCS

1 port order issued (or modified) in the State before

2 October 1, 1996, if not otherwise subject to with3 holding under subsection (b), shall become subject to

4 withholding as provided in subsection (b) if arrear5 ages occur, without the need for a judicial or admin6 istrative hearing.’’.

7 (2) CONFORMING AMENDMENTS.—

8 (A) Section 466(b) (42 U.S.C. 666(b)) is

9 amended in the matter preceding paragraph

10 (1), by striking ‘‘subsection (a)(1)’’ and insert11 ing ‘‘subsection (a)(1)(A)’’.

12 (B) Section 466(b)(4) (42 U.S.C.

13 666(b)(4)) is amended to read as follows:

14 ‘‘(4)(A) Such withholding must be carried out

15 in full compliance with all procedural due process re16 quirements of the State, and the State must send

17 notice to each noncustodial parent to whom para18 graph (1) applies—

19 ‘‘(i) that the withholding has commenced;

20 and

21 ‘‘(ii) of the procedures to follow if the non22 custodial parent desires to contest such with23 holding on the grounds that the withholding or

24 the amount withheld is improper due to a mis25 take of fact.
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•S 1956 PCS

1 ‘‘(B) The notice under subparagraph (A) of this

2 paragraph shall include the information provided to

3 the employer under paragraph (6)(A).’’.

4 (C) Section 466(b)(5) (42 U.S.C.

5 666(b)(5)) is amended by striking all that fol6 lows ‘‘administered by’’ and inserting ‘‘the

7 State through the State disbursement unit es8 tablished pursuant to section 454B, in accord9 ance with the requirements of section 454B.’’.

10 (D) Section 466(b)(6)(A) (42 U.S.C.

11 666(b)(6)(A)) is amended—

12 (i) in clause (i), by striking ‘‘to the

13 appropriate agency’’ and all that follows

14 and inserting ‘‘to the State disbursement

15 unit within 5 business days after the date

16 the amount would (but for this subsection)

17 have been paid or credited to the employee,

18 for distribution in accordance with this

19 part. The employer shall comply with the

20 procedural rules relating to income with21 holding of the State in which the employee

22 works, regardless of the State where the

23 notice originates.’’;
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•S 1956 PCS

1 (ii) in clause (ii), by inserting ‘‘be in

2 a standard format prescribed by the Sec3 retary, and’’ after ‘‘shall’’; and

4 (iii) by adding at the end the follow5 ing new clause:

6 ‘‘(iii) As used in this subparagraph, the term

7 ‘business day’ means a day on which State offices

8 are open for regular business.’’.

9 (E) Section 466(b)(6)(D) (42 U.S.C.

10 666(b)(6)(D)) is amended by striking ‘‘any em11 ployer’’ and all that follows and inserting ‘‘any

12 employer who—

13 ‘‘(i) discharges from employment, refuses

14 to employ, or takes disciplinary action against

15 any noncustodial parent subject to wage with16 holding required by this subsection because of

17 the existence of such withholding and the obli18 gations or additional obligations which it im19 poses upon the employer; or

20 ‘‘(ii) fails to withhold support from wages

21 or to pay such amounts to the State disburse22 ment unit in accordance with this subsection.’’.

23 (F) Section 466(b) (42 U.S.C. 666(b)) is

24 amended by adding at the end the following

25 new paragraph:
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•S 1956 PCS

1 ‘‘(11) Procedures under which the agency ad2 ministering the State plan approved under this part

3 may execute a withholding order without advance

4 notice to the obligor, including issuing the withhold5 ing order through electronic means.’’.

6 (b) CONFORMING AMENDMENT.—Section 466(c) (42

7 U.S.C. 666(c)) is repealed.

8 SEC. 2315. LOCATOR INFORMATION FROM INTERSTATE

9 NETWORKS.

10 Section 466(a) (42 U.S.C. 666(a)) is amended by in11 serting after paragraph (11) the following new paragraph:

12 ‘‘(12) LOCATOR INFORMATION FROM INTER13 STATE NETWORKS.—Procedures to ensure that all

14 Federal and State agencies conducting activities

15 under this part have access to any system used by

16 the State to locate an individual for purposes relat17 ing to motor vehicles or law enforcement.’’.

18 SEC. 2316. EXPANSION OF THE FEDERAL PARENT LOCATOR

19 SERVICE.

20 (a) EXPANDED AUTHORITY TO LOCATE INDIVID21 UALS AND ASSETS.—Section 453 (42 U.S.C. 653) is

22 amended—

23 (1) in subsection (a), by striking all that follows

24 ‘‘subsection (c))’’ and inserting ‘‘, for the purpose of

25 establishing parentage, establishing, setting the
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•S 1956 PCS

1 amount of, modifying, or enforcing child support ob2 ligations, or enforcing child custody or visitation or3 ders—

4 ‘‘(1) information on, or facilitating the discov5 ery of, the location of any individual—

6 ‘‘(A) who is under an obligation to pay

7 child support or provide child custody or visita8 tion rights;

9 ‘‘(B) against whom such an obligation is

10 sought;

11 ‘‘(C) to whom such an obligation is owed,

12 including the individual’s social security number (or

13 numbers), most recent address, and the name, ad14 dress, and employer identification number of the in15 dividual’s employer;

16 ‘‘(2) information on the individual’s wages (or

17 other income) from, and benefits of, employment (in18 cluding rights to or enrollment in group health care

19 coverage); and

20 ‘‘(3) information on the type, status, location,

21 and amount of any assets of, or debts owed by or

22 to, any such individual.’’; and

23 (2) in subsection (b)—

24 (A) in the matter preceding paragraph (1),

25 by striking ‘‘social security’’ and all that follows
442

•S 1956 PCS

1 through ‘‘absent parent’’ and inserting ‘‘infor2 mation described in subsection (a)’’; and

3 (B) in the flush paragraph at the end, by

4 adding the following: ‘‘No information shall be

5 disclosed to any person if the State has notified

6 the Secretary that the State has reasonable evi7 dence of domestic violence or child abuse and

8 the disclosure of such information could be

9 harmful to the custodial parent or the child of

10 such parent. Information received or transmit11 ted pursuant to this section shall be subject to

12 the safeguard provisions contained in section

13 454(26).’’.

14 (b) AUTHORIZED PERSON FOR INFORMATION RE15 GARDING VISITATION RIGHTS.—Section 453(c) (42

16 U.S.C. 653(c)) is amended—

17 (1) in paragraph (1), by striking ‘‘support’’ and

18 inserting ‘‘support or to seek to enforce orders pro19 viding child custody or visitation rights’’; and

20 (2) in paragraph (2), by striking ‘‘, or any

21 agent of such court; and’’ and inserting ‘‘or to issue

22 an order against a resident parent for child custody

23 or visitation rights, or any agent of such court;’’.

24 (c) REIMBURSEMENT FOR INFORMATION FROM FED25 ERAL AGENCIES.—Section 453(e)(2) (42 U.S.C.
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•S 1956 PCS

1 653(e)(2)) is amended in the 4th sentence by inserting

2 ‘‘in an amount which the Secretary determines to be rea3 sonable payment for the information exchange (which

4 amount shall not include payment for the costs of obtain5 ing, compiling, or maintaining the information)’’ before

6 the period.

7 (d) REIMBURSEMENT FOR REPORTS BY STATE

8 AGENCIES.—Section 453 (42 U.S.C. 653) is amended by

9 adding at the end the following new subsection:

10 ‘‘(g) REIMBURSEMENT FOR REPORTS BY STATE

11 AGENCIES.—The Secretary may reimburse Federal and

12 State agencies for the costs incurred by such entities in

13 furnishing information requested by the Secretary under

14 this section in an amount which the Secretary determines

15 to be reasonable payment for the information exchange

16 (which amount shall not include payment for the costs of

17 obtaining, compiling, or maintaining the information).’’.

18 (e) CONFORMING AMENDMENTS.—

19 (1) Sections 452(a)(9), 453(a), 453(b), 463(a),

20 463(e), and 463(f) (42 U.S.C. 652(a)(9), 653(a),

21 653(b), 663(a), 663(e), and 663(f)) are each amend22 ed by inserting ‘‘Federal’’ before ‘‘Parent’’ each

23 place such term appears.
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•S 1956 PCS

1 (2) Section 453 (42 U.S.C. 653) is amended in

2 the heading by adding ‘‘FEDERAL’’ before ‘‘PAR3 ENT’’.

4 (f) NEW COMPONENTS.—Section 453 (42 U.S.C.

5 653), as amended by subsection (d) of this section, is

6 amended by adding at the end the following new sub7 sections:

8 ‘‘(h) FEDERAL CASE REGISTRY OF CHILD SUPPORT

9 ORDERS.—

10 ‘‘(1) IN GENERAL.—Not later than October 1,

11 1998, in order to assist States in administering pro12 grams under State plans approved under this part

13 and programs funded under part A, and for the

14 other purposes specified in this section, the Sec15 retary shall establish and maintain in the Federal

16 Parent Locator Service an automated registry

17 (which shall be known as the ‘Federal Case Registry

18 of Child Support Orders’), which shall contain ab19 stracts of support orders and other information de20 scribed in paragraph (2) with respect to each case

21 in each State case registry maintained pursuant to

22 section 454A(e), as furnished (and regularly up23 dated), pursuant to section 454A(f), by State agen24 cies administering programs under this part.
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•S 1956 PCS

1 ‘‘(2) CASE INFORMATION.—The information re2 ferred to in paragraph (1) with respect to a case

3 shall be such information as the Secretary may

4 specify in regulations (including the names, social

5 security numbers or other uniform identification

6 numbers, and State case identification numbers) to

7 identify the individuals who owe or are owed support

8 (or with respect to or on behalf of whom support ob9 ligations are sought to be established), and the State

10 or States which have the case.

11 ‘‘(i) NATIONAL DIRECTORY OF NEW HIRES.—

12 ‘‘(1) IN GENERAL.—In order to assist States in

13 administering programs under State plans approved

14 under this part and programs funded under part A,

15 and for the other purposes specified in this section,

16 the Secretary shall, not later than October 1, 1997,

17 establish and maintain in the Federal Parent Loca18 tor Service an automated directory to be known as

19 the National Directory of New Hires, which shall

20 contain the information supplied pursuant to section

21 453A(g)(2).

22 ‘‘(2) ENTRY OF DATA.—Information shall be

23 entered into the data base maintained by the Na24 tional Directory of New Hires within 2 business

25 days of receipt pursuant to section 453A(g)(2).
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•S 1956 PCS

1 ‘‘(3) ADMINISTRATION OF FEDERAL TAX

2 LAWS.—The Secretary of the Treasury shall have

3 access to the information in the National Directory

4 of New Hires for purposes of administering section

5 32 of the Internal Revenue Code of 1986, or the ad6 vance payment of the earned income tax credit

7 under section 3507 of such Code, and verifying a

8 claim with respect to employment in a tax return.

9 ‘‘(4) LIST OF MULTISTATE EMPLOYERS.—The

10 Secretary shall maintain within the National Direc11 tory of New Hires a list of multistate employers that

12 report information regarding newly hired employees

13 pursuant to section 453A(b)(1)(B), and the State

14 which each such employer has designated to receive

15 such information.

16 ‘‘(j) INFORMATION COMPARISONS AND OTHER DIS17 CLOSURES.—

18 ‘‘(1) VERIFICATION BY SOCIAL SECURITY AD19 MINISTRATION.—

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

21 transmit information on individuals and em22 ployers maintained under this section to the So23 cial Security Administration to the extent nec24 essary for verification in accordance with sub25 paragraph (B).
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1 ‘‘(B) VERIFICATION BY SSA.—The Social

2 Security Administration shall verify the accu3 racy of, correct, or supply to the extent pos4 sible, and report to the Secretary, the following

5 information supplied by the Secretary pursuant

6 to subparagraph (A):

7 ‘‘(i) The name, social security num8 ber, and birth date of each such individual.

9 ‘‘(ii) The employer identification num10 ber of each such employer.

11 ‘‘(2) INFORMATION COMPARISONS.—For the

12 purpose of locating individuals in a paternity estab13 lishment case or a case involving the establishment,

14 modification, or enforcement of a support order, the

15 Secretary shall—

16 ‘‘(A) compare information in the National

17 Directory of New Hires against information in

18 the support case abstracts in the Federal Case

19 Registry of Child Support Orders not less often

20 than every 2 business days; and

21 ‘‘(B) within 2 business days after such a

22 comparison reveals a match with respect to an

23 individual, report the information to the State

24 agency responsible for the case.
448

•S 1956 PCS

1 ‘‘(3) INFORMATION COMPARISONS AND DISCLO2 SURES OF INFORMATION IN ALL REGISTRIES FOR

3 TITLE IV PROGRAM PURPOSES.—To the extent and

4 with the frequency that the Secretary determines to

5 be effective in assisting States to carry out their re6 sponsibilities under programs operated under this

7 part and programs funded under part A, the Sec8 retary shall—

9 ‘‘(A) compare the information in each com10 ponent of the Federal Parent Locator Service

11 maintained under this section against the infor12 mation in each other such component (other

13 than the comparison required by paragraph

14 (2)), and report instances in which such a com15 parison reveals a match with respect to an indi16 vidual to State agencies operating such pro17 grams; and

18 ‘‘(B) disclose information in such registries

19 to such State agencies.

20 ‘‘(4) PROVISION OF NEW HIRE INFORMATION

21 TO THE SOCIAL SECURITY ADMINISTRATION.—The

22 National Directory of New Hires shall provide the

23 Commissioner of Social Security with all information

24 in the National Directory.
449

•S 1956 PCS

1 ‘‘(5) RESEARCH.—The Secretary may provide

2 access to information reported by employers pursu3 ant to section 453A(b) for research purposes found

4 by the Secretary to be likely to contribute to achiev5 ing the purposes of part A or this part, but without

6 personal identifiers.

7 ‘‘(k) FEES.—

8 ‘‘(1) FOR SSA VERIFICATION.—The Secretary

9 shall reimburse the Commissioner of Social Security,

10 at a rate negotiated between the Secretary and the

11 Commissioner, for the costs incurred by the Com12 missioner in performing the verification services de13 scribed in subsection (j).

14 ‘‘(2) FOR INFORMATION FROM STATE DIREC15 TORIES OF NEW HIRES.—The Secretary shall reim16 burse costs incurred by State directories of new

17 hires in furnishing information as required by sub18 section (j)(3), at rates which the Secretary deter19 mines to be reasonable (which rates shall not include

20 payment for the costs of obtaining, compiling, or

21 maintaining such information).

22 ‘‘(3) FOR INFORMATION FURNISHED TO STATE

23 AND FEDERAL AGENCIES.—A State or Federal agen24 cy that receives information from the Secretary pur25 suant to this section shall reimburse the Secretary
450

•S 1956 PCS

1 for costs incurred by the Secretary in furnishing the

2 information, at rates which the Secretary determines

3 to be reasonable (which rates shall include payment

4 for the costs of obtaining, verifying, maintaining,

5 and comparing the information).

6 ‘‘(l) RESTRICTION ON DISCLOSURE AND USE.—In7 formation in the Federal Parent Locator Service, and in8 formation resulting from comparisons using such informa9 tion, shall not be used or disclosed except as expressly pro10 vided in this section, subject to section 6103 of the Inter11 nal Revenue Code of 1986.

12 ‘‘(m) INFORMATION INTEGRITY AND SECURITY.—

13 The Secretary shall establish and implement safeguards

14 with respect to the entities established under this section

15 designed to—

16 ‘‘(1) ensure the accuracy and completeness of

17 information in the Federal Parent Locator Service;

18 and

19 ‘‘(2) restrict access to confidential information

20 in the Federal Parent Locator Service to authorized

21 persons, and restrict use of such information to au22 thorized purposes.

23 ‘‘(n) FEDERAL GOVERNMENT REPORTING.—Each

24 department, agency, and instrumentality of the United

25 States shall on a quarterly basis report to the Federal
451

•S 1956 PCS

1 Parent Locator Service the name and social security num2 ber of each employee and the wages paid to the employee

3 during the previous quarter, except that such a report

4 shall not be filed with respect to an employee of a depart5 ment, agency, or instrumentality performing intelligence

6 or counterintelligence functions, if the head of such de7 partment, agency, or instrumentality has determined that

8 filing such a report could endanger the safety of the em9 ployee or compromise an ongoing investigation or intel10 ligence mission.’’.

11 (g) CONFORMING AMENDMENTS.—

12 (1) TO PART D OF TITLE IV OF THE SOCIAL SE13 CURITY ACT.—

14 (A) Section 454(8)(B) (42 U.S.C.

15 654(8)(B)) is amended to read as follows:

16 ‘‘(B) the Federal Parent Locator Service

17 established under section 453;’’.

18 (B) Section 454(13) (42 U.S.C.654(13)) is

19 amended by inserting ‘‘and provide that infor20 mation requests by parents who are residents of

21 other States be treated with the same priority

22 as requests by parents who are residents of the

23 State submitting the plan’’ before the semi24 colon.
452

•S 1956 PCS

1 (2) TO FEDERAL UNEMPLOYMENT TAX ACT.—

2 Section 3304(a)(16) of the Internal Revenue Code of

3 1986 is amended—

4 (A) by striking ‘‘Secretary of Health, Edu5 cation, and Welfare’’ each place such term ap6 pears and inserting ‘‘Secretary of Health and

7 Human Services’’;

8 (B) in subparagraph (B), by striking

9 ‘‘such information’’ and all that follows and in10 serting ‘‘information furnished under subpara11 graph (A) or (B) is used only for the purposes

12 authorized under such subparagraph;’’;

13 (C) by striking ‘‘and’’ at the end of sub14 paragraph (A);

15 (D) by redesignating subparagraph (B) as

16 subparagraph (C); and

17 (E) by inserting after subparagraph (A)

18 the following new subparagraph:

19 ‘‘(B) wage and unemployment compensation in20 formation contained in the records of such agency

21 shall be furnished to the Secretary of Health and

22 Human Services (in accordance with regulations pro23 mulgated by such Secretary) as necessary for the

24 purposes of the National Directory of New Hires es-
453

•S 1956 PCS

1 tablished under section 453(i) of the Social Security

2 Act, and’’.

3 (3) TO STATE GRANT PROGRAM UNDER TITLE

4 III OF THE SOCIAL SECURITY ACT.—Subsection (h)

5 of section 303 (42 U.S.C. 503) is amended to read

6 as follows:

7 ‘‘(h)(1) The State agency charged with the adminis8 tration of the State law shall, on a reimbursable basis—

9 ‘‘(A) disclose quarterly, to the Secretary of

10 Health and Human Services, wage and claim infor11 mation, as required pursuant to section 453(i)(1),

12 contained in the records of such agency;

13 ‘‘(B) ensure that information provided pursuant

14 to subparagraph (A) meets such standards relating

15 to correctness and verification as the Secretary of

16 Health and Human Services, with the concurrence

17 of the Secretary of Labor, may find necessary; and

18 ‘‘(C) establish such safeguards as the Secretary

19 of Labor determines are necessary to insure that in20 formation disclosed under subparagraph (A) is used

21 only for purposes of section 453(i)(1) in carrying out

22 the child support enforcement program under title

23 IV.

24 ‘‘(2) Whenever the Secretary of Labor, after reason25 able notice and opportunity for hearing to the State agen-
454

•S 1956 PCS

1 cy charged with the administration of the State law, finds

2 that there is a failure to comply substantially with the re3 quirements of paragraph (1), the Secretary of Labor shall

4 notify such State agency that further payments will not

5 be made to the State until the Secretary of Labor is satis6 fied that there is no longer any such failure. Until the

7 Secretary of Labor is so satisfied, the Secretary shall

8 make no future certification to the Secretary of the Treas9 ury with respect to the State.

10 ‘‘(3) For purposes of this subsection—

11 ‘‘(A) the term ‘wage information’ means infor12 mation regarding wages paid to an individual, the

13 social security account number of such individual,

14 and the name, address, State, and the Federal em15 ployer identification number of the employer paying

16 such wages to such individual; and

17 ‘‘(B) the term ‘claim information’ means infor18 mation regarding whether an individual is receiving,

19 has received, or has made application for, unemploy20 ment compensation, the amount of any such com21 pensation being received (or to be received by such

22 individual), and the individual’s current (or most re23 cent) home address.’’.
455

•S 1956 PCS

1 (4) DISCLOSURE OF CERTAIN INFORMATION TO

2 AGENTS OF CHILD SUPPORT ENFORCEMENT AGEN3 CIES.—

4 (A) IN GENERAL.—Paragraph (6) of sec5 tion 6103(l) of the Internal Revenue Code of

6 1986 (relating to disclosure of return informa7 tion to Federal, State, and local child support

8 enforcement agencies) is amended by redesig9 nating subparagraph (B) as subparagraph (C)

10 and by inserting after subparagraph (A) the fol11 lowing new subparagraph:

12 ‘‘(B) DISCLOSURE TO CERTAIN AGENTS.—

13 The following information disclosed to any child

14 support enforcement agency under subpara15 graph (A) with respect to any individual with

16 respect to whom child support obligations are

17 sought to be established or enforced may be dis18 closed by such agency to any agent of such

19 agency which is under contract with such agen20 cy to carry out the purposes described in sub21 paragraph (C):

22 ‘‘(i) The address and social security

23 account number (or numbers) of such indi24 vidual.
456

•S 1956 PCS

1 ‘‘(ii) The amount of any reduction

2 under section 6402(c) (relating to offset of

3 past-due support against overpayments) in

4 any overpayment otherwise payable to such

5 individual.’’.

6 (B) CONFORMING AMENDMENTS.—

7 (i) Paragraph (3) of section 6103(a)

8 of such Code is amended by striking

9 ‘‘(l)(12)’’ and inserting ‘‘paragraph (6) or

10 (12) of subsection (l)’’.

11 (ii) Subparagraph (C) of section

12 6103(l)(6) of such Code, as redesignated

13 by subsection (a), is amended to read as

14 follows:

15 ‘‘(C) RESTRICTION ON DISCLOSURE.—In16 formation may be disclosed under this para17 graph only for purposes of, and to the extent

18 necessary in, establishing and collecting child

19 support obligations from, and locating, individ20 uals owing such obligations.’’.

21 (iii) The material following subpara22 graph (F) of section 6103(p)(4) of such

23 Code is amended by striking ‘‘subsection

24 (l)(12)(B)’’ and inserting ‘‘paragraph

25 (6)(A) or (12)(B) of subsection (l)’’.
457

•S 1956 PCS

1 (h) REQUIREMENT FOR COOPERATION.—The Sec2 retary of Labor and the Secretary of Health and Human

3 Services shall work jointly to develop cost-effective and ef4 ficient methods of accessing the information in the various

5 State directories of new hires and the National Directory

6 of New Hires as established pursuant to the amendments

7 made by this subchapter. In developing these methods the

8 Secretaries shall take into account the impact, including

9 costs, on the States, and shall also consider the need to

10 insure the proper and authorized use of wage record infor11 mation.

12 SEC. 2317. COLLECTION AND USE OF SOCIAL SECURITY

13 NUMBERS FOR USE IN CHILD SUPPORT EN14 FORCEMENT.

15 Section 466(a) (42 U.S.C. 666(a)), as amended by

16 section 2315 of this Act, is amended by inserting after

17 paragraph (12) the following new paragraph:

18 ‘‘(13) RECORDING OF SOCIAL SECURITY NUM19 BERS IN CERTAIN FAMILY MATTERS.—Procedures

20 requiring that the social security number of—

21 ‘‘(A) any applicant for a professional li22 cense, commercial driver’s license, occupational

23 license, or marriage license be recorded on the

24 application;
458

•S 1956 PCS

1 ‘‘(B) any individual who is subject to a di2 vorce decree, support order, or paternity deter3 mination or acknowledgment be placed in the

4 records relating to the matter; and

5 ‘‘(C) any individual who has died be placed

6 in the records relating to the death and be re7 corded on the death certificate.

8 For purposes of subparagraph (A), if a State allows

9 the use of a number other than the social security

10 number, the State shall so advise any applicants.’’.

11 Subchapter C—Streamlining and Uniformity

12 of Procedures

13 SEC. 2321. ADOPTION OF UNIFORM STATE LAWS.

14 Section 466 (42 U.S.C. 666) is amended by adding

15 at the end the following new subsection:

16 ‘‘(f) UNIFORM INTERSTATE FAMILY SUPPORT

17 ACT.—

18 ‘‘(1) ENACTMENT AND USE.—In order to sat19 isfy section 454(20)(A), on and after January 1,

20 1998, each State must have in effect the Uniform

21 Interstate Family Support Act, as approved by the

22 American Bar Association on February 9, 1993, to23 gether with any amendments officially adopted be24 fore January 1, 1998 by the National Conference of

25 Commissioners on Uniform State Laws.
459

•S 1956 PCS

1 ‘‘(2) EMPLOYERS TO FOLLOW PROCEDURAL

2 RULES OF STATE WHERE EMPLOYEE WORKS.—The

3 State law enacted pursuant to paragraph (1) shall

4 provide that an employer that receives an income

5 withholding order or notice pursuant to section 501

6 of the Uniform Interstate Family Support Act follow

7 the procedural rules that apply with respect to such

8 order or notice under the laws of the State in which

9 the obligor works.’’.

10 SEC. 2322. IMPROVEMENTS TO FULL FAITH AND CREDIT

11 FOR CHILD SUPPORT ORDERS.

12 Section 1738B of title 28, United States Code, is

13 amended—

14 (1) in subsection (a)(2), by striking ‘‘subsection

15 (e)’’ and inserting ‘‘subsections (e), (f), and (i)’’;

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

17 undesignated paragraph the following:

18 ‘‘ ‘child’s home State’ means the State in which a

19 child lived with a parent or a person acting as parent for

20 at least 6 consecutive months immediately preceding the

21 time of filing of a petition or comparable pleading for sup22 port and, if a child is less than 6 months old, the State

23 in which the child lived from birth with any of them. A

24 period of temporary absence of any of them is counted

25 as part of the 6-month period.’’;
460

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1 (3) in subsection (c), by inserting ‘‘by a court

2 of a State’’ before ‘‘is made’’;

3 (4) in subsection (c)(1), by inserting ‘‘and sub4 sections (e), (f), and (g)’’ after ‘‘located’’;

5 (5) in subsection (d)—

6 (A) by inserting ‘‘individual’’ before ‘‘con7 testant’’; and

8 (B) by striking ‘‘subsection (e)’’ and in9 serting ‘‘subsections (e) and (f)’’;

10 (6) in subsection (e), by striking ‘‘make a modi11 fication of a child support order with respect to a

12 child that is made’’ and inserting ‘‘modify a child

13 support order issued’’;

14 (7) in subsection (e)(1), by inserting ‘‘pursuant

15 to subsection (i)’’ before the semicolon;

16 (8) in subsection (e)(2)—

17 (A) by inserting ‘‘individual’’ before ‘‘con18 testant’’ each place such term appears; and

19 (B) by striking ‘‘to that court’s making the

20 modification and assuming’’ and inserting ‘‘with

21 the State of continuing, exclusive jurisdiction

22 for a court of another State to modify the order

23 and assume’’;

24 (9) by redesignating subsections (f) and (g) as

25 subsections (g) and (h), respectively;
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•S 1956 PCS

1 (10) by inserting after subsection (e) the follow2 ing new subsection:

3 ‘‘(f) RECOGNITION OF CHILD SUPPORT ORDERS.—

4 If 1 or more child support orders have been issued with

5 regard to an obligor and a child, a court shall apply the

6 following rules in determining which order to recognize for

7 purposes of continuing, exclusive jurisdiction and enforce8 ment:

9 ‘‘(1) If only 1 court has issued a child support

10 order, the order of that court must be recognized.

11 ‘‘(2) If 2 or more courts have issued child sup12 port orders for the same obligor and child, and only

13 1 of the courts would have continuing, exclusive ju14 risdiction under this section, the order of that court

15 must be recognized.

16 ‘‘(3) If 2 or more courts have issued child sup17 port orders for the same obligor and child, and more

18 than 1 of the courts would have continuing, exclusive

19 jurisdiction under this section, an order issued by a

20 court in the current home State of the child must

21 be recognized, but if an order has not been issued

22 in the current home State of the child, the order

23 most recently issued must be recognized.

24 ‘‘(4) If 2 or more courts have issued child sup25 port orders for the same obligor and child, and none
462

•S 1956 PCS

1 of the courts would have continuing, exclusive juris2 diction under this section, a court may issue a child

3 support order, which must be recognized.

4 ‘‘(5) The court that has issued an order recog5 nized under this subsection is the court having con6 tinuing, exclusive jurisdiction.’’;

7 (11) in subsection (g) (as so redesignated)—

8 (A) by striking ‘‘PRIOR’’ and inserting

9 ‘‘MODIFIED’’; and

10 (B) by striking ‘‘subsection (e)’’ and in11 serting ‘‘subsections (e) and (f)’’;

12 (12) in subsection (h) (as so redesignated)—

13 (A) in paragraph (2), by inserting ‘‘includ14 ing the duration of current payments and other

15 obligations of support’’ before the comma; and

16 (B) in paragraph (3), by inserting ‘‘arrears

17 under’’ after ‘‘enforce’’; and

18 (13) by adding at the end the following new

19 subsection:

20 ‘‘(i) REGISTRATION FOR MODIFICATION.—If there is

21 no individual contestant or child residing in the issuing

22 State, the party or support enforcement agency seeking

23 to modify, or to modify and enforce, a child support order

24 issued in another State shall register that order in a State
463

•S 1956 PCS

1 with jurisdiction over the nonmovant for the purpose of

2 modification.’’.

3 SEC. 2323. ADMINISTRATIVE ENFORCEMENT IN INTER4 STATE CASES.

5 Section 466(a) (42 U.S.C. 666(a)), as amended by

6 sections 2315 and 2317(a) of this Act, is amended by in7 serting after paragraph (13) the following new paragraph:

8 ‘‘(14) ADMINISTRATIVE ENFORCEMENT IN

9 INTERSTATE CASES.—Procedures under which—

10 ‘‘(A)(i) the State shall respond within 5

11 business days to a request made by another

12 State to enforce a support order; and

13 ‘‘(ii) the term ‘business day’ means a day

14 on which State offices are open for regular

15 business;

16 ‘‘(B) the State may, by electronic or other

17 means, transmit to another State a request for

18 assistance in a case involving the enforcement

19 of a support order, which request—

20 ‘‘(i) shall include such information as

21 will enable the State to which the request

22 is transmitted to compare the information

23 about the case to the information in the

24 data bases of the State; and
464

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1 ‘‘(ii) shall constitute a certification by

2 the requesting State—

3 ‘‘(I) of the amount of support

4 under the order the payment of which

5 is in arrears; and

6 ‘‘(II) that the requesting State

7 has complied with all procedural due

8 process requirements applicable to the

9 case;

10 ‘‘(C) if the State provides assistance to an11 other State pursuant to this paragraph with re12 spect to a case, neither State shall consider the

13 case to be transferred to the caseload of such

14 other State; and

15 ‘‘(D) the State shall maintain records of—

16 ‘‘(i) the number of such requests for

17 assistance received by the State;

18 ‘‘(ii) the number of cases for which

19 the State collected support in response to

20 such a request; and

21 ‘‘(iii) the amount of such collected

22 support.’’.

23 SEC. 2324. USE OF FORMS IN INTERSTATE ENFORCEMENT.

24 (a) PROMULGATION.—Section 452(a) (42 U.S.C.

25 652(a)) is amended—
465

•S 1956 PCS

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

2 (9);

3 (2) by striking the period at the end of para4 graph (10) and inserting ‘‘; and’’; and

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

6 paragraph:

7 ‘‘(11) not later than October 1, 1996, after con8 sulting with the State directors of programs under

9 this part, promulgate forms to be used by States in

10 interstate cases for—

11 ‘‘(A) collection of child support through in12 come withholding;

13 ‘‘(B) imposition of liens; and

14 ‘‘(C) administrative subpoenas.’’.

15 (b) USE BY STATES.—Section 454(9) (42 U.S.C.

16 654(9)) is amended—

17 (1) by striking ‘‘and’’ at the end of subpara18 graph (C);

19 (2) by inserting ‘‘and’’ at the end of subpara20 graph (D); and

21 (3) by adding at the end the following new sub22 paragraph:

23 ‘‘(E) not later than March 1, 1997, in

24 using the forms promulgated pursuant to sec25 tion 452(a)(11) for income withholding, imposi-
466

•S 1956 PCS

1 tion of liens, and issuance of administrative

2 subpoenas in interstate child support cases;’’.

3 SEC. 2325. STATE LAWS PROVIDING EXPEDITED PROCE4 DURES.

5 (a) STATE LAW REQUIREMENTS.—Section 466 (42

6 U.S.C. 666), as amended by section 2314 of this Act, is

7 amended—

8 (1) in subsection (a)(2), by striking the first

9 sentence and inserting the following: ‘‘Expedited ad10 ministrative and judicial procedures (including the

11 procedures specified in subsection (c)) for establish12 ing paternity and for establishing, modifying, and

13 enforcing support obligations.’’; and

14 (2) by inserting after subsection (b) the follow15 ing new subsection:

16 ‘‘(c) EXPEDITED PROCEDURES.—The procedures

17 specified in this subsection are the following:

18 ‘‘(1) ADMINISTRATIVE ACTION BY STATE AGEN19 CY.—Procedures which give the State agency the au20 thority to take the following actions relating to es21 tablishment of paternity or to establishment, modi22 fication, or enforcement of support orders, without

23 the necessity of obtaining an order from any other

24 judicial or administrative tribunal, and to recognize
467

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1 and enforce the authority of State agencies of other

2 States to take the following actions:

3 ‘‘(A) GENETIC TESTING.—To order genetic

4 testing for the purpose of paternity establish5 ment as provided in section 466(a)(5).

6 ‘‘(B) FINANCIAL OR OTHER INFORMA7 TION.—To subpoena any financial or other in8 formation needed to establish, modify, or en9 force a support order, and to impose penalties

10 for failure to respond to such a subpoena.

11 ‘‘(C) RESPONSE TO STATE AGENCY RE12 QUEST.—To require all entities in the State (in13 cluding for-profit, nonprofit, and governmental

14 employers) to provide promptly, in response to

15 a request by the State agency of that or any

16 other State administering a program under this

17 part, information on the employment, com18 pensation, and benefits of any individual em19 ployed by such entity as an employee or con20 tractor, and to sanction failure to respond to

21 any such request.

22 ‘‘(D) ACCESS TO CERTAIN RECORDS.—To

23 obtain access, subject to safeguards on privacy

24 and information security, to the following

25 records (including automated access, in the case
468

•S 1956 PCS

1 of records maintained in automated data

2 bases):

3 ‘‘(i) Records of other State and local

4 government agencies, including—

5 ‘‘(I) vital statistics (including

6 records of marriage, birth, and di7 vorce);

8 ‘‘(II) State and local tax and rev9 enue records (including information

10 on residence address, employer, in11 come and assets);

12 ‘‘(III) records concerning real

13 and titled personal property;

14 ‘‘(IV) records of occupational and

15 professional licenses, and records con16 cerning the ownership and control of

17 corporations, partnerships, and other

18 business entities;

19 ‘‘(V) employment security

20 records;

21 ‘‘(VI) records of agencies admin22 istering public assistance programs;

23 ‘‘(VII) records of the motor vehi24 cle department; and

25 ‘‘(VIII) corrections records.
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1 ‘‘(ii) Certain records held by private

2 entities with respect to individuals who owe

3 or are owed support (or against or with re4 spect to whom a support obligation is

5 sought), consisting of—

6 ‘‘(I) the names and addresses of

7 such individuals and the names and

8 addresses of the employers of such in9 dividuals, as appearing in customer

10 records of public utilities and cable

11 television companies; and

12 ‘‘(II) information (including in13 formation on assets and liabilities) on

14 such individuals held by financial in15 stitutions,

16 subject to the nonliability of such entities

17 arising from affording such access under

18 this subparagraph.

19 ‘‘(E) CHANGE IN PAYEE.—In cases in

20 which support is subject to an assignment in

21 order to comply with a requirement imposed

22 pursuant to part A or section 1912, or to a re23 quirement to pay through the State disburse24 ment unit established pursuant to section

25 454B, upon providing notice to obligor and obli-
470

•S 1956 PCS

1 gee, to direct the obligor or other payor to

2 change the payee to the appropriate government

3 entity.

4 ‘‘(F) INCOME WITHHOLDING.—To order

5 income withholding in accordance with sub6 sections (a)(1)(A) and (b) of section 466.

7 ‘‘(G) SECURING ASSETS.—In cases in

8 which there is a support arrearage, to secure

9 assets to satisfy the arrearage by—

10 ‘‘(i) intercepting or seizing periodic or

11 lump-sum payments from—

12 ‘‘(I) a State or local agency, in13 cluding unemployment compensation,

14 workers’ compensation, and other ben15 efits; and

16 ‘‘(II) judgments, settlements, and

17 lotteries;

18 ‘‘(ii) attaching and seizing assets of

19 the obligor held in financial institutions;

20 ‘‘(iii) attaching public and private re21 tirement funds; and

22 ‘‘(iv) imposing liens in accordance

23 with subsection (a)(4) and, in appropriate

24 cases, to force sale of property and dis25 tribution of proceeds.
471

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1 ‘‘(H) INCREASE MONTHLY PAYMENTS.—

2 For the purpose of securing overdue support, to

3 increase the amount of monthly support pay4 ments to include amounts for arrearages, sub5 ject to such conditions or limitations as the

6 State may provide.

7 Such procedures shall be subject to due process safe8 guards, including (as appropriate) requirements for

9 notice, opportunity to contest the action, and oppor10 tunity for an appeal on the record to an independent

11 administrative or judicial tribunal.

12 ‘‘(2) SUBSTANTIVE AND PROCEDURAL RULES.—

13 The expedited procedures required under subsection

14 (a)(2) shall include the following rules and author15 ity, applicable with respect to all proceedings to es16 tablish paternity or to establish, modify, or enforce

17 support orders:

18 ‘‘(A) LOCATOR INFORMATION; PRESUMP19 TIONS CONCERNING NOTICE.—Procedures

20 under which—

21 ‘‘(i) each party to any paternity or

22 child support proceeding is required (sub23 ject to privacy safeguards) to file with the

24 tribunal and the State case registry upon

25 entry of an order, and to update as appro-
472

•S 1956 PCS

1 priate, information on location and identity

2 of the party, including social security num3 ber, residential and mailing addresses, tele4 phone number, driver’s license number,

5 and name, address, and telephone number

6 of employer; and

7 ‘‘(ii) in any subsequent child support

8 enforcement action between the parties,

9 upon sufficient showing that diligent effort

10 has been made to ascertain the location of

11 such a party, the tribunal may deem State

12 due process requirements for notice and

13 service of process to be met with respect to

14 the party, upon delivery of written notice

15 to the most recent residential or employer

16 address filed with the tribunal pursuant to

17 clause (i).

18 ‘‘(B) STATEWIDE JURISDICTION.—Proce19 dures under which—

20 ‘‘(i) the State agency and any admin21 istrative or judicial tribunal with authority

22 to hear child support and paternity cases

23 exerts statewide jurisdiction over the par24 ties; and
473

•S 1956 PCS

1 ‘‘(ii) in a State in which orders are is2 sued by courts or administrative tribunals,

3 a case may be transferred between local ju4 risdictions in the State without need for

5 any additional filing by the petitioner, or

6 service of process upon the respondent, to

7 retain jurisdiction over the parties.

8 ‘‘(3) COORDINATION WITH ERISA.—Notwith9 standing subsection (d) of section 514 of the Em10 ployee Retirement Income Security Act of 1974 (re11 lating to effect on other laws), nothing in this sub12 section shall be construed to alter, amend, modify,

13 invalidate, impair, or supersede subsections (a), (b),

14 and (c) of such section 514 as it applies with respect

15 to any procedure referred to in paragraph (1) and

16 any expedited procedure referred to in paragraph

17 (2), except to the extent that such procedure would

18 be consistent with the requirements of section

19 206(d)(3) of such Act (relating to qualified domestic

20 relations orders) or the requirements of section

21 609(a) of such Act (relating to qualified medical

22 child support orders) if the reference in such section

23 206(d)(3) to a domestic relations order and the ref24 erence in such section 609(a) to a medical child sup25 port order were a reference to a support order re-
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1 ferred to in paragraphs (1) and (2) relating to the

2 same matters, respectively.’’.

3 (b) AUTOMATION OF STATE AGENCY FUNCTIONS.—

4 Section 454A, as added by section 2344(a)(2) and as

5 amended by sections 2311 and 2312(c) of this Act, is

6 amended by adding at the end the following new sub7 section:

8 ‘‘(h) EXPEDITED ADMINISTRATIVE PROCEDURES.—

9 The automated system required by this section shall be

10 used, to the maximum extent feasible, to implement the

11 expedited administrative procedures required by section

12 466(c).’’.

13 Subchapter D—Paternity Establishment

14 SEC. 2331. STATE LAWS CONCERNING PATERNITY ESTAB15 LISHMENT.

16 (a) STATE LAWS REQUIRED.—Section 466(a)(5) (42

17 U.S.C. 666(a)(5)) is amended to read as follows:

18 ‘‘(5) PROCEDURES CONCERNING PATERNITY ES19 TABLISHMENT.—

20 ‘‘(A) ESTABLISHMENT PROCESS AVAIL21 ABLE FROM BIRTH UNTIL AGE 18.—

22 ‘‘(i) Procedures which permit the es23 tablishment of the paternity of a child at

24 any time before the child attains 18 years

25 of age.
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1 ‘‘(ii) As of August 16, 1984, clause (i)

2 shall also apply to a child for whom pater3 nity has not been established or for whom

4 a paternity action was brought but dis5 missed because a statute of limitations of

6 less than 18 years was then in effect in the

7 State.

8 ‘‘(B) PROCEDURES CONCERNING GENETIC

9 TESTING.—

10 ‘‘(i) GENETIC TESTING REQUIRED IN

11 CERTAIN CONTESTED CASES.—Procedures

12 under which the State is required, in a

13 contested paternity case (unless otherwise

14 barred by State law) to require the child

15 and all other parties (other than individ16 uals found under section 454(29) to have

17 good cause and other exceptions for refus18 ing to cooperate) to submit to genetic tests

19 upon the request of any such party, if the

20 request is supported by a sworn statement

21 by the party—

22 ‘‘(I) alleging paternity, and set23 ting forth facts establishing a reason24 able possibility of the requisite sexual

25 contact between the parties; or
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1 ‘‘(II) denying paternity, and set2 ting forth facts establishing a reason3 able possibility of the nonexistence of

4 sexual contact between the parties.

5 ‘‘(ii) OTHER REQUIREMENTS.—Proce6 dures which require the State agency, in

7 any case in which the agency orders ge8 netic testing—

9 ‘‘(I) to pay costs of such tests,

10 subject to recoupment (if the State so

11 elects) from the alleged father if pa12 ternity is established; and

13 ‘‘(II) to obtain additional testing

14 in any case if an original test result is

15 contested, upon request and advance

16 payment by the contestant.

17 ‘‘(C) VOLUNTARY PATERNITY ACKNOWL18 EDGMENT.—

19 ‘‘(i) SIMPLE CIVIL PROCESS.—Proce20 dures for a simple civil process for volun21 tarily acknowledging paternity under which

22 the State must provide that, before a

23 mother and a putative father can sign an

24 acknowledgment of paternity, the mother

25 and the putative father must be given no-
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1 tice, orally and in writing, of the alter2 natives to, the legal consequences of, and

3 the rights (including, if 1 parent is a

4 minor, any rights afforded due to minority

5 status) and responsibilities that arise from,

6 signing the acknowledgment.

7 ‘‘(ii) HOSPITAL-BASED PROGRAM.—

8 Such procedures must include a hospital9 based program for the voluntary acknowl10 edgment of paternity focusing on the pe11 riod immediately before or after the birth

12 of a child, unless good cause and other ex13 ceptions exist which—

14 ‘‘(I) shall be defined, taking into

15 account the best interests of the child,

16 and

17 ‘‘(II) shall be applied in each

18 case,

19 by, at the option of the State, the State

20 agency administering the State program

21 under part A, this part, title XV, or title

22 XIX.

23 ‘‘(iii) PATERNITY ESTABLISHMENT

24 SERVICES.—
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1 ‘‘(I) STATE-OFFERED SERV2 ICES.—Such procedures must require

3 the State agency responsible for main4 taining birth records to offer vol5 untary paternity establishment serv6 ices.

7 ‘‘(II) REGULATIONS.—

8 ‘‘(aa) SERVICES OFFERED

9 BY HOSPITALS AND BIRTH

10 RECORD AGENCIES.—The Sec11 retary shall prescribe regulations

12 governing voluntary paternity es13 tablishment services offered by

14 hospitals and birth record agen15 cies.

16 ‘‘(bb) SERVICES OFFERED

17 BY OTHER ENTITIES.—The Sec18 retary shall prescribe regulations

19 specifying the types of other enti20 ties that may offer voluntary pa21 ternity establishment services,

22 and governing the provision of

23 such services, which shall include

24 a requirement that such an entity

25 must use the same notice provi-
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•S 1956 PCS

1 sions used by, use the same ma2 terials used by, provide the per3 sonnel providing such services

4 with the same training provided

5 by, and evaluate the provision of

6 such services in the same manner

7 as the provision of such services

8 is evaluated by, voluntary pater9 nity establishment programs of

10 hospitals and birth record agen11 cies.

12 ‘‘(iv) USE OF PATERNITY ACKNOWL13 EDGMENT AFFIDAVIT.—Such procedures

14 must require the State to develop and use

15 an affidavit for the voluntary acknowledg16 ment of paternity which includes the mini17 mum requirements of the affidavit speci18 fied by the Secretary under section

19 452(a)(7) for the voluntary acknowledg20 ment of paternity, and to give full faith

21 and credit to such an affidavit signed in

22 any other State according to its proce23 dures.

24 ‘‘(D) STATUS OF SIGNED PATERNITY AC25 KNOWLEDGMENT.—
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1 ‘‘(i) INCLUSION IN BIRTH RECORDS.—

2 Procedures under which the name of the

3 father shall be included on the record of

4 birth of the child of unmarried parents

5 only if—

6 ‘‘(I) the father and mother have

7 signed a voluntary acknowledgment of

8 paternity; or

9 ‘‘(II) a court or an administrative

10 agency of competent jurisdiction has

11 issued an adjudication of paternity.

12 Nothing in this clause shall preclude a

13 State agency from obtaining an admission

14 of paternity from the father for submission

15 in a judicial or administrative proceeding,

16 or prohibit the issuance of an order in a

17 judicial or administrative proceeding which

18 bases a legal finding of paternity on an ad19 mission of paternity by the father and any

20 other additional showing required by State

21 law.

22 ‘‘(ii) LEGAL FINDING OF PATER23 NITY.—Procedures under which a signed

24 voluntary acknowledgment of paternity is

25 considered a legal finding of paternity,
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1 subject to the right of any signatory to re2 scind the acknowledgment within the ear3 lier of—

4 ‘‘(I) 60 days; or

5 ‘‘(II) the date of an administra6 tive or judicial proceeding relating to

7 the child (including a proceeding to

8 establish a support order) in which

9 the signatory is a party.

10 ‘‘(iii) CONTEST.—Procedures under

11 which, after the 60-day period referred to

12 in clause (ii), a signed voluntary acknowl13 edgment of paternity may be challenged in

14 court only on the basis of fraud, duress, or

15 material mistake of fact, with the burden

16 of proof upon the challenger, and under

17 which the legal responsibilities (including

18 child support obligations) of any signatory

19 arising from the acknowledgment may not

20 be suspended during the challenge, except

21 for good cause shown.

22 ‘‘(E) BAR ON ACKNOWLEDGMENT RATIFI23 CATION PROCEEDINGS.—Procedures under

24 which judicial or administrative proceedings are
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1 not required or permitted to ratify an unchal2 lenged acknowledgment of paternity.

3 ‘‘(F) ADMISSIBILITY OF GENETIC TESTING

4 RESULTS.—Procedures—

5 ‘‘(i) requiring the admission into evi6 dence, for purposes of establishing pater7 nity, of the results of any genetic test that

8 is—

9 ‘‘(I) of a type generally acknowl10 edged as reliable by accreditation bod11 ies designated by the Secretary; and

12 ‘‘(II) performed by a laboratory

13 approved by such an accreditation

14 body;

15 ‘‘(ii) requiring an objection to genetic

16 testing results to be made in writing not

17 later than a specified number of days be18 fore any hearing at which the results may

19 be introduced into evidence (or, at State

20 option, not later than a specified number

21 of days after receipt of the results); and

22 ‘‘(iii) making the test results admissi23 ble as evidence of paternity without the

24 need for foundation testimony or other
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•S 1956 PCS

1 proof of authenticity or accuracy, unless

2 objection is made.

3 ‘‘(G) PRESUMPTION OF PATERNITY IN

4 CERTAIN CASES.—Procedures which create a re5 buttable or, at the option of the State, conclu6 sive presumption of paternity upon genetic test7 ing results indicating a threshold probability

8 that the alleged father is the father of the child.

9 ‘‘(H) DEFAULT ORDERS.—Procedures re10 quiring a default order to be entered in a pater11 nity case upon a showing of service of process

12 on the defendant and any additional showing

13 required by State law.

14 ‘‘(I) NO RIGHT TO JURY TRIAL.—Proce15 dures providing that the parties to an action to

16 establish paternity are not entitled to a trial by

17 jury.

18 ‘‘(J) TEMPORARY SUPPORT ORDER BASED

19 ON PROBABLE PATERNITY IN CONTESTED

20 CASES.—Procedures which require that a tem21 porary order be issued, upon motion by a party,

22 requiring the provision of child support pending

23 an administrative or judicial determination of

24 parentage, if there is clear and convincing evi-
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•S 1956 PCS

1 dence of paternity (on the basis of genetic tests

2 or other evidence).

3 ‘‘(K) PROOF OF CERTAIN SUPPORT AND

4 PATERNITY ESTABLISHMENT COSTS.—Proce5 dures under which bills for pregnancy, child6 birth, and genetic testing are admissible as evi7 dence without requiring third-party foundation

8 testimony, and shall constitute prima facie evi9 dence of amounts incurred for such services or

10 for testing on behalf of the child.

11 ‘‘(L) STANDING OF PUTATIVE FATHERS.—

12 Procedures ensuring that the putative father

13 has a reasonable opportunity to initiate a pater14 nity action.

15 ‘‘(M) FILING OF ACKNOWLEDGMENTS AND

16 ADJUDICATIONS IN STATE REGISTRY OF BIRTH

17 RECORDS.—Procedures under which voluntary

18 acknowledgments and adjudications of paternity

19 by judicial or administrative processes are filed

20 with the State registry of birth records for com21 parison with information in the State case reg22 istry.’’.

23 (b) NATIONAL PATERNITY ACKNOWLEDGMENT AFFI24 DAVIT.—Section 452(a)(7) (42 U.S.C. 652(a)(7)) is

25 amended by inserting ‘‘, and specify the minimum require-
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1 ments of an affidavit to be used for the voluntary acknowl2 edgment of paternity which shall include the social secu3 rity number of each parent and, after consultation with

4 the States, other common elements as determined by such

5 designee’’ before the semicolon.

6 (c) CONFORMING AMENDMENT.—Section 468 (42

7 U.S.C. 668) is amended by striking ‘‘a simple civil process

8 for voluntarily acknowledging paternity and’’.

9 SEC. 2332. OUTREACH FOR VOLUNTARY PATERNITY ESTAB10 LISHMENT.

11 Section 454(23) (42 U.S.C. 654(23)) is amended by

12 inserting ‘‘and will publicize the availability and encourage

13 the use of procedures for voluntary establishment of pater14 nity and child support by means the State deems appro15 priate’’ before the semicolon.

16 SEC. 2333. COOPERATION BY APPLICANTS FOR AND RECIPI17 ENTS OF PART A ASSISTANCE.

18 Section 454 (42 U.S.C. 654), as amended by sections

19 2301(b), 2303(a), 2312(a), and 2313(a) of this Act, is

20 amended—

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

22 (27);

23 (2) by striking the period at the end of para24 graph (28) and inserting ‘‘; and’’; and
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•S 1956 PCS

1 (3) by inserting after paragraph (28) the fol2 lowing new paragraph:

3 ‘‘(29) provide that the State agency responsible

4 for administering the State plan—

5 ‘‘(A) shall make the determination (and re6 determination at appropriate intervals) as to

7 whether an individual who has applied for or is

8 receiving assistance under the State program

9 funded under part A, the State program under

10 title XV, or the State program under title XIX

11 is cooperating in good faith with the State in

12 establishing the paternity of, or in establishing,

13 modifying, or enforcing a support order for, any

14 child of the individual by providing the State

15 agency with the name of, and such other infor16 mation as the State agency may require with

17 respect to, the noncustodial parent of the child,

18 subject to good cause and other exceptions

19 which—

20 ‘‘(i) shall be defined, taking into ac21 count the best interests of the child, and

22 ‘‘(ii) shall be applied in each case,

23 by, at the option of the State, the State agency

24 administering the State program under part A,

25 this part, title XV, or title XIX;
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•S 1956 PCS

1 ‘‘(B) shall require the individual to supply

2 additional necessary information and appear at

3 interviews, hearings, and legal proceedings;

4 ‘‘(C) shall require the individual and the

5 child to submit to genetic tests pursuant to ju6 dicial or administrative order;

7 ‘‘(D) may request that the individual sign

8 a voluntary acknowledgment of paternity, after

9 notice of the rights and consequences of such

10 an acknowledgment, but may not require the in11 dividual to sign an acknowledgment or other12 wise relinquish the right to genetic tests as a

13 condition of cooperation and eligibility for as14 sistance under the State program funded under

15 part A, the State program under title XV, or

16 the State program under title XIX; and

17 ‘‘(E) shall promptly notify the individual

18 and the State agency administering the State

19 program funded under part A, the State agency

20 administering the State program under title

21 XV, and the State agency administering the

22 State program under title XIX, of each such

23 determination, and if noncooperation is deter24 mined, the basis therefore.’’.
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1 Subchapter E—Program Administration and

2 Funding

3 SEC. 2341. PERFORMANCE-BASED INCENTIVES AND PEN4 ALTIES.

5 (a) DEVELOPMENT OF NEW SYSTEM.—The Sec6 retary of Health and Human Services, in consultation with

7 State directors of programs under part D of title IV of

8 the Social Security Act, shall develop a new incentive sys9 tem to replace, in a revenue neutral manner, the system

10 under section 458 of such Act. The new system shall pro11 vide additional payments to any State based on such

12 State’s performance under such a program. Not later than

13 November 1, 1996, the Secretary shall report on the new

14 system to the Committee on Ways and Means of the

15 House of Representatives and the Committee on Finance

16 of the Senate.

17 (b) CONFORMING AMENDMENTS TO PRESENT SYS18 TEM.—Section 458 (42 U.S.C. 658) is amended—

19 (1) in subsection (a), by striking ‘‘aid to fami20 lies with dependent children under a State plan ap21 proved under part A of this title’’ and inserting ‘‘as22 sistance under a program funded under part A’’;

23 (2) in subsection (b)(1)(A), by striking ‘‘section

24 402(a)(26)’’ and inserting ‘‘section 408(a)(4)’’;

25 (3) in subsections (b) and (c)—
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1 (A) by striking ‘‘AFDC collections’’ each

2 place it appears and inserting ‘‘title IV–A col3 lections’’, and

4 (B) by striking ‘‘non-AFDC collections’’

5 each place it appears and inserting ‘‘non-title

6 IV–A collections’’; and

7 (4) in subsection (c), by striking ‘‘combined

8 AFDC/non-AFDC administrative costs’’ both places

9 it appears and inserting ‘‘combined title IV–A/non10 title IV–A administrative costs’’.

11 (c) CALCULATION OF PATERNITY ESTABLISHMENT

12 PERCENTAGE.—

13 (1) Section 452(g)(1)(A) (42 U.S.C.

14 652(g)(1)(A)) is amended by striking ‘‘75’’ and in15 serting ‘‘90’’.

16 (2) Section 452(g)(1) (42 U.S.C. 652(g)(1)) is

17 amended—

18 (A) by redesignating subparagraphs (B)

19 through (E) as subparagraphs (C) through (F),

20 respectively, and by inserting after subpara21 graph (A) the following new subparagraph:

22 ‘‘(B) for a State with a paternity establishment

23 percentage of not less than 75 percent but less than

24 90 percent for such fiscal year, the paternity estab-
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1 lishment percentage of the State for the immediately

2 preceding fiscal year plus 2 percentage points;’’; and

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

4 flush sentence:

5 ‘‘In determining compliance under this section, a State

6 may use as its paternity establishment percentage either

7 the State’s IV–D paternity establishment percentage (as

8 defined in paragraph (2)(A)) or the State’s statewide pa9 ternity establishment percentage (as defined in paragraph

10 (2)(B)).’’.

11 (3) Section 452(g)(2) (42 U.S.C. 652(g)(2)) is

12 amended—

13 (A) in subparagraph (A)—

14 (i) in the matter preceding clause

15 (i)—

16 (I) by striking ‘‘paternity estab17 lishment percentage’’ and inserting

18 ‘‘IV–D paternity establishment per19 centage’’; and

20 (II) by striking ‘‘(or all States, as

21 the case may be)’’; and

22 (ii) by striking ‘‘and’’ at the end

23 thereof;
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1 (B) by redesignating subparagraph (B) as

2 subparagraph (C) and by inserting after sub3 paragraph (A) the following new subparagraph:

4 ‘‘(B) the term ‘statewide paternity establish5 ment percentage’ means, with respect to a State for

6 a fiscal year, the ratio (expressed as a percentage)

7 that the total number of minor children—

8 ‘‘(i) who have been born out of wedlock,

9 and

10 ‘‘(ii) the paternity of whom has been estab11 lished or acknowledged during the fiscal year,

12 bears to the total number of children born out of

13 wedlock during the preceding fiscal year; and’’.

14 (4) Section 452(g)(3) (42 U.S.C. 652(g)(3)) is

15 amended—

16 (A) by striking subparagraph (A) and re17 designating subparagraphs (B) and (C) as sub18 paragraphs (A) and (B), respectively; and

19 (B) in subparagraph (A) (as so redesig20 nated), by striking ‘‘the percentage of children

21 born out-of-wedlock in a State’’ and inserting

22 ‘‘the percentage of children in a State who are

23 born out of wedlock or for whom support has

24 not been established’’.

25 (d) EFFECTIVE DATES.—
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1 (1) INCENTIVE ADJUSTMENTS.—

2 (A) IN GENERAL.—The system developed under

3 subsection (a) and the amendments made by sub4 section (b) shall become effective on October 1,

5 1998, except to the extent provided in subparagraph

6 (B).

7 (B) APPLICATION OF SECTION 458.—Section

8 458 of the Social Security Act, as in effect on the

9 day before the date of the enactment of this section,

10 shall be effective for purposes of incentive payments

11 to States for fiscal years before fiscal year 1999.

12 (2) PENALTY REDUCTIONS.—The amendments

13 made by subsection (c) shall become effective with

14 respect to calendar quarters beginning on or after

15 the date of the enactment of this Act.

16 SEC. 2342. FEDERAL AND STATE REVIEWS AND AUDITS.

17 (a) STATE AGENCY ACTIVITIES.—Section 454 (42

18 U.S.C. 654) is amended—

19 (1) in paragraph (14), by striking ‘‘(14)’’ and

20 inserting ‘‘(14)(A)’’;

21 (2) by redesignating paragraph (15) as sub22 paragraph (B) of paragraph (14); and

23 (3) by inserting after paragraph (14) the fol24 lowing new paragraph:

25 ‘‘(15) provide for—
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1 ‘‘(A) a process for annual reviews of and

2 reports to the Secretary on the State program

3 operated under the State plan approved under

4 this part, including such information as may be

5 necessary to measure State compliance with

6 Federal requirements for expedited procedures,

7 using such standards and procedures as are re8 quired by the Secretary, under which the State

9 agency will determine the extent to which the

10 program is operated in compliance with this

11 part; and

12 ‘‘(B) a process of extracting from the auto13 mated data processing system required by para14 graph (16) and transmitting to the Secretary

15 data and calculations concerning the levels of

16 accomplishment (and rates of improvement)

17 with respect to applicable performance indica18 tors (including paternity establishment percent19 ages) to the extent necessary for purposes of

20 sections 452(g) and 458;’’.

21 (b) FEDERAL ACTIVITIES.—Section 452(a)(4) (42

22 U.S.C. 652(a)(4)) is amended to read as follows:

23 ‘‘(4)(A) review data and calculations transmit24 ted by State agencies pursuant to section

25 454(15)(B) on State program accomplishments with
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1 respect to performance indicators for purposes of

2 subsection (g) of this section and section 458;

3 ‘‘(B) review annual reports submitted pursuant

4 to section 454(15)(A) and, as appropriate, provide

5 to the State comments, recommendations for addi6 tional or alternative corrective actions, and technical

7 assistance; and

8 ‘‘(C) conduct audits, in accordance with the

9 Government auditing standards of the Comptroller

10 General of the United States—

11 ‘‘(i) at least once every 3 years (or more

12 frequently, in the case of a State which fails to

13 meet the requirements of this part concerning

14 performance standards and reliability of pro15 gram data) to assess the completeness, reliabil16 ity, and security of the data and the accuracy

17 of the reporting systems used in calculating

18 performance indicators under subsection (g) of

19 this section and section 458;

20 ‘‘(ii) of the adequacy of financial manage21 ment of the State program operated under the

22 State plan approved under this part, including

23 assessments of—

24 ‘‘(I) whether Federal and other funds

25 made available to carry out the State pro-
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1 gram are being appropriately expended,

2 and are properly and fully accounted for;

3 and

4 ‘‘(II) whether collections and disburse5 ments of support payments are carried out

6 correctly and are fully accounted for; and

7 ‘‘(iii) for such other purposes as the Sec8 retary may find necessary;’’.

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

10 this section shall be effective with respect to calendar

11 quarters beginning 12 months or more after the date of

12 the enactment of this Act.

13 SEC. 2343. REQUIRED REPORTING PROCEDURES.

14 (a) ESTABLISHMENT.—Section 452(a)(5) (42 U.S.C.

15 652(a)(5)) is amended by inserting ‘‘, and establish proce16 dures to be followed by States for collecting and reporting

17 information required to be provided under this part, and

18 establish uniform definitions (including those necessary to

19 enable the measurement of State compliance with the re20 quirements of this part relating to expedited processes) to

21 be applied in following such procedures’’ before the semi22 colon.

23 (b) STATE PLAN REQUIREMENT.—Section 454 (42

24 U.S.C. 654), as amended by sections 2301(b), 2303(a),

25 2312(a), 2313(a), and 2333 of this Act, is amended—
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1 (1) by striking ‘‘and’’ at the end of paragraph

2 (28);

3 (2) by striking the period at the end of para4 graph (29) and inserting ‘‘; and’’; and

5 (3) by adding after paragraph (29) the follow6 ing new paragraph:

7 ‘‘(30) provide that the State shall use the defi8 nitions established under section 452(a)(5) in col9 lecting and reporting information as required under

10 this part.’’.

11 SEC. 2344. AUTOMATED DATA PROCESSING REQUIRE12 MENTS.

13 (a) REVISED REQUIREMENTS.—

14 (1) IN GENERAL.—Section 454(16) (42 U.S.C.

15 654(16)) is amended—

16 (A) by striking ‘‘, at the option of the

17 State,’’;

18 (B) by inserting ‘‘and operation by the

19 State agency’’ after ‘‘for the establishment’’;

20 (C) by inserting ‘‘meeting the requirements

21 of section 454A’’ after ‘‘information retrieval

22 system’’;

23 (D) by striking ‘‘in the State and localities

24 thereof, so as (A)’’ and inserting ‘‘so as’’;

25 (E) by striking ‘‘(i)’’; and
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1 (F) by striking ‘‘(including’’ and all that

2 follows and inserting a semicolon.

3 (2) AUTOMATED DATA PROCESSING.—Part D of

4 title IV (42 U.S.C. 651–669) is amended by insert5 ing after section 454 the following new section:

6 ‘‘SEC. 454A. AUTOMATED DATA PROCESSING.

7 ‘‘(a) IN GENERAL.—In order for a State to meet the

8 requirements of this section, the State agency administer9 ing the State program under this part shall have in oper10 ation a single statewide automated data processing and

11 information retrieval system which has the capability to

12 perform the tasks specified in this section with the fre13 quency and in the manner required by or under this part.

14 ‘‘(b) PROGRAM MANAGEMENT.—The automated sys15 tem required by this section shall perform such functions

16 as the Secretary may specify relating to management of

17 the State program under this part, including—

18 ‘‘(1) controlling and accounting for use of Fed19 eral, State, and local funds in carrying out the pro20 gram; and

21 ‘‘(2) maintaining the data necessary to meet

22 Federal reporting requirements under this part on a

23 timely basis.

24 ‘‘(c) CALCULATION OF PERFORMANCE INDICA25 TORS.—In order to enable the Secretary to determine the
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1 incentive payments and penalty adjustments required by

2 sections 452(g) and 458, the State agency shall—

3 ‘‘(1) use the automated system—

4 ‘‘(A) to maintain the requisite data on

5 State performance with respect to paternity es6 tablishment and child support enforcement in

7 the State; and

8 ‘‘(B) to calculate the paternity establish9 ment percentage for the State for each fiscal

10 year; and

11 ‘‘(2) have in place systems controls to ensure

12 the completeness and reliability of, and ready access

13 to, the data described in paragraph (1)(A), and the

14 accuracy of the calculations described in paragraph

15 (1)(B).

16 ‘‘(d) INFORMATION INTEGRITY AND SECURITY.—The

17 State agency shall have in effect safeguards on the integ18 rity, accuracy, and completeness of, access to, and use of

19 data in the automated system required by this section,

20 which shall include the following (in addition to such other

21 safeguards as the Secretary may specify in regulations):

22 ‘‘(1) POLICIES RESTRICTING ACCESS.—Written

23 policies concerning access to data by State agency

24 personnel, and sharing of data with other persons,

25 which—
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1 ‘‘(A) permit access to and use of data only

2 to the extent necessary to carry out the State

3 program under this part; and

4 ‘‘(B) specify the data which may be used

5 for particular program purposes, and the per6 sonnel permitted access to such data.

7 ‘‘(2) SYSTEMS CONTROLS.—Systems controls

8 (such as passwords or blocking of fields) to ensure

9 strict adherence to the policies described in para10 graph (1).

11 ‘‘(3) MONITORING OF ACCESS.—Routine mon12 itoring of access to and use of the automated sys13 tem, through methods such as audit trails and feed14 back mechanisms, to guard against and promptly

15 identify unauthorized access or use.

16 ‘‘(4) TRAINING AND INFORMATION.—Proce17 dures to ensure that all personnel (including State

18 and local agency staff and contractors) who may

19 have access to or be required to use confidential pro20 gram data are informed of applicable requirements

21 and penalties (including those in section 6103 of the

22 Internal Revenue Code of 1986), and are adequately

23 trained in security procedures.

24 ‘‘(5) PENALTIES.—Administrative penalties (up

25 to and including dismissal from employment) for un-
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1 authorized access to, or disclosure or use of, con2 fidential data.’’.

3 (3) REGULATIONS.—The Secretary of Health

4 and Human Services shall prescribe final regulations

5 for implementation of section 454A of the Social Se6 curity Act not later than 2 years after the date of

7 the enactment of this Act.

8 (4) IMPLEMENTATION TIMETABLE.—Section

9 454(24) (42 U.S.C. 654(24)), as amended by section

10 2303(a)(1) of this Act, is amended to read as fol11 lows:

12 ‘‘(24) provide that the State will have in effect

13 an automated data processing and information re14 trieval system—

15 ‘‘(A) by October 1, 1997, which meets all

16 requirements of this part which were enacted on

17 or before the date of enactment of the Family

18 Support Act of 1988, and

19 ‘‘(B) by October 1, 2000, which meets all

20 requirements of this part enacted on or before

21 the date of the enactment of the Personal Re22 sponsibility and Work Opportunity Act of 1996,

23 except that such deadline shall be extended by

24 1 day for each day (if any) by which the Sec25 retary fails to meet the deadline imposed by
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1 section 2344(a)(3) of the Personal Responsibil2 ity and Work Opportunity Act of 1996;’’.

3 (b) SPECIAL FEDERAL MATCHING RATE FOR DE4 VELOPMENT COSTS OF AUTOMATED SYSTEMS.—

5 (1) IN GENERAL.—Section 455(a) (42 U.S.C.

6 655(a)) is amended—

7 (A) in paragraph (1)(B)—

8 (i) by striking ‘‘90 percent’’ and in9 serting ‘‘the percent specified in paragraph

10 (3)’’;

11 (ii) by striking ‘‘so much of’’; and

12 (iii) by striking ‘‘which the Secretary’’

13 and all that follows and inserting ‘‘, and’’;

14 and

15 (B) by adding at the end the following new

16 paragraph:

17 ‘‘(3)(A) The Secretary shall pay to each State, for

18 each quarter in fiscal years 1996 and 1997, 90 percent

19 of so much of the State expenditures described in para20 graph (1)(B) as the Secretary finds are for a system meet21 ing the requirements specified in section 454(16) (as in

22 effect on September 30, 1995) but limited to the amount

23 approved for States in the advance planning documents

24 of such States submitted on or before September 30,

25 1995. Notwithstanding the preceding sentence, any pay-
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•S 1956 PCS

1 ment to a State with respect to fiscal year 1997 shall be

2 made in one payment in fiscal year 1998.

3 ‘‘(B)(i) The Secretary shall pay to each State, for

4 each quarter in fiscal years 1996 through 2001, the per5 centage specified in clause (ii) of so much of the State

6 expenditures described in paragraph (1)(B) as the Sec7 retary finds are for a system meeting the requirements

8 of sections 454(16) and 454A.

9 ‘‘(ii) The percentage specified in this clause is 80 per10 cent.’’.

11 (2) TEMPORARY LIMITATION ON PAYMENTS

12 UNDER SPECIAL FEDERAL MATCHING RATE.—

13 (A) IN GENERAL.—The Secretary of

14 Health and Human Services may not pay more

15 than $400,000,000 in the aggregate under sec16 tion 455(a)(3)(B) of the Social Security Act for

17 fiscal years 1996 through 2001.

18 (B) ALLOCATION OF LIMITATION AMONG

19 STATES.—The total amount payable to a State

20 under section 455(a)(3)(B) of such Act for fis21 cal years 1996 through 2001 shall not exceed

22 the limitation determined for the State by the

23 Secretary of Health and Human Services in

24 regulations.
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1 (C) ALLOCATION FORMULA.—The regula2 tions referred to in subparagraph (B) shall pre3 scribe a formula for allocating the amount spec4 ified in subparagraph (A) among States with

5 plans approved under part D of title IV of the

6 Social Security Act, which shall take into ac7 count—

8 (i) the relative size of State caseloads

9 under such part; and

10 (ii) the level of automation needed to

11 meet the automated data processing re12 quirements of such part.

13 (c) CONFORMING AMENDMENT.—Section 123(c) of

14 the Family Support Act of 1988 (102 Stat. 2352; Public

15 Law 100–485) is repealed.

16 SEC. 2345. TECHNICAL ASSISTANCE.

17 (a) FOR TRAINING OF FEDERAL AND STATE STAFF,

18 RESEARCH AND DEMONSTRATION PROGRAMS, AND SPE19 CIAL PROJECTS OF REGIONAL OR NATIONAL SIGNIFI20 CANCE.—Section 452 (42 U.S.C. 652) is amended by add21 ing at the end the following new subsection:

22 ‘‘(j) Out of any money in the Treasury of the United

23 States not otherwise appropriated, there is hereby appro24 priated to the Secretary for each fiscal year (beginning

25 with fiscal year 1998) an amount equal to 1 percent of
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1 the total amount paid to the Federal Government pursu2 ant to section 457(a) during the immediately preceding

3 fiscal year (as determined on the basis of the most recent

4 reliable data available to the Secretary as of the end of

5 the 3rd calendar quarter following the end of such preced6 ing fiscal year), to cover costs incurred by the Secretary

7 for—

8 ‘‘(1) information dissemination and technical

9 assistance to States, training of State and Federal

10 staff, staffing studies, and related activities needed

11 to improve programs under this part (including tech12 nical assistance concerning State automated systems

13 required by this part); and

14 ‘‘(2) research, demonstration, and special

15 projects of regional or national significance relating

16 to the operation of State programs under this part.

17 The amount appropriated under this subsection shall re18 main available until expended.’’.

19 (b) OPERATION OF FEDERAL PARENT LOCATOR

20 SERVICE.—Section 453 (42 U.S.C. 653), as amended by

21 section 2316 of this Act, is amended by adding at the end

22 the following new subsection:

23 ‘‘(o) RECOVERY OF COSTS.—Out of any money in the

24 Treasury of the United States not otherwise appropriated,

25 there is hereby appropriated to the Secretary for each fis-
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•S 1956 PCS

1 cal year an amount equal to 2 percent of the total amount

2 paid to the Federal Government pursuant to section

3 457(a) during the immediately preceding fiscal year (as

4 determined on the basis of the most recent reliable data

5 available to the Secretary as of the end of the 3rd calendar

6 quarter following the end of such preceding fiscal year),

7 to cover costs incurred by the Secretary for operation of

8 the Federal Parent Locator Service under this section, to

9 the extent such costs are not recovered through user

10 fees.’’.

11 SEC. 2346. REPORTS AND DATA COLLECTION BY THE SEC12 RETARY.

13 (a) ANNUAL REPORT TO CONGRESS.—

14 (1) Section 452(a)(10)(A) (42 U.S.C.

15 652(a)(10)(A)) is amended—

16 (A) by striking ‘‘this part;’’ and inserting

17 ‘‘this part, including—’’; and

18 (B) by adding at the end the following new

19 clauses:

20 ‘‘(i) the total amount of child support

21 payments collected as a result of services

22 furnished during the fiscal year to individ23 uals receiving services under this part;
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•S 1956 PCS

1 ‘‘(ii) the cost to the States and to the

2 Federal Government of so furnishing the

3 services; and

4 ‘‘(iii) the number of cases involving

5 families—

6 ‘‘(I) who became ineligible for as7 sistance under State programs funded

8 under part A during a month in the

9 fiscal year; and

10 ‘‘(II) with respect to whom a

11 child support payment was received in

12 the month;’’.

13 (2) Section 452(a)(10)(C) (42 U.S.C.

14 652(a)(10)(C)) is amended—

15 (A) in the matter preceding clause (i)—

16 (i) by striking ‘‘with the data required

17 under each clause being separately stated

18 for cases’’ and inserting ‘‘separately stated

19 for cases’’;

20 (ii) by striking ‘‘cases where the child

21 was formerly receiving’’ and inserting ‘‘or

22 formerly received’’;

23 (iii) by inserting ‘‘or 1912’’ after

24 ‘‘471(a)(17)’’; and
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•S 1956 PCS

1 (iv) by inserting ‘‘for’’ before ‘‘all

2 other’’;

3 (B) in each of clauses (i) and (ii), by strik4 ing ‘‘, and the total amount of such obliga5 tions’’;

6 (C) in clause (iii), by striking ‘‘described

7 in’’ and all that follows and inserting ‘‘in which

8 support was collected during the fiscal year;’’;

9 (D) by striking clause (iv); and

10 (E) by redesignating clause (v) as clause

11 (vii), and inserting after clause (iii) the follow12 ing new clauses:

13 ‘‘(iv) the total amount of support col14 lected during such fiscal year and distrib15 uted as current support;

16 ‘‘(v) the total amount of support col17 lected during such fiscal year and distrib18 uted as arrearages;

19 ‘‘(vi) the total amount of support due

20 and unpaid for all fiscal years; and’’.

21 (3) Section 452(a)(10)(G) (42 U.S.C.

22 652(a)(10)(G)) is amended by striking ‘‘on the use

23 of Federal courts and’’.

24 (4) Section 452(a)(10) (42 U.S.C. 652(a)(10))

25 is amended—
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1 (A) in subparagraph (H), by striking

2 ‘‘and’’;

3 (B) in subparagraph (I), by striking the

4 period and inserting ‘‘; and’’; and

5 (C) by inserting after subparagraph (I) the

6 following new subparagraph:

7 ‘‘(J) compliance, by State, with the stand8 ards established pursuant to subsections (h)

9 and (i).’’.

10 (5) Section 452(a)(10) (42 U.S.C. 652(a)(10))

11 is amended by striking all that follows subparagraph

12 (J), as added by paragraph (4).

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

14 subsection (a) shall be effective with respect to fiscal year

15 1997 and succeeding fiscal years.

16 Subchapter F—Establishment and

17 Modification of Support Orders

18 SEC. 2351. SIMPLIFIED PROCESS FOR REVIEW AND ADJUST19 MENT OF CHILD SUPPORT ORDERS.

20 Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amend21 ed to read as follows:

22 ‘‘(10) REVIEW AND ADJUSTMENT OF SUPPORT

23 ORDERS UPON REQUEST.—Procedures under which

24 the State shall review and adjust each support order

25 being enforced under this part if there is an assign-
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•S 1956 PCS

1 ment under part A or upon the request of either

2 parent, and may review and adjust any other sup3 port order being enforced under this part. Such pro4 cedures shall provide the following:

5 ‘‘(A) IN GENERAL.—

6 ‘‘(i) 3-YEAR CYCLE.—Except as pro7 vided in subparagraphs (B) and (C), the

8 State shall review and, as appropriate, ad9 just the support order every 3 years, tak10 ing into account the best interests of the

11 child involved.

12 ‘‘(ii) METHODS OF ADJUSTMENT.—

13 The State may elect to review and, if ap14 propriate, adjust an order pursuant to

15 clause (i) by—

16 ‘‘(I) reviewing and, if appro17 priate, adjusting the order in accord18 ance with the guidelines established

19 pursuant to section 467(a) if the

20 amount of the child support award

21 under the order differs from the

22 amount that would be awarded in ac23 cordance with the guidelines; or

24 ‘‘(II) applying a cost-of-living ad25 justment to the order in accordance
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•S 1956 PCS

1 with a formula developed by the State

2 and permit either party to contest the

3 adjustment, within 30 days after the

4 date of the notice of the adjustment,

5 by making a request for review and, if

6 appropriate, adjustment of the order

7 in accordance with the child support

8 guidelines established pursuant to sec9 tion 467(a).

10 ‘‘(iii) NO PROOF OF CHANGE IN CIR11 CUMSTANCES NECESSARY.—Any adjust12 ment under this subparagraph (A) shall be

13 made without a requirement for proof or

14 showing of a change in circumstances.

15 ‘‘(B) AUTOMATED METHOD.—The State

16 may use automated methods (including auto17 mated comparisons with wage or State income

18 tax data) to identify orders eligible for review,

19 conduct the review, identify orders eligible for

20 adjustment, and apply the appropriate adjust21 ment to the orders eligible for adjustment

22 under the threshold established by the State.

23 ‘‘(C) REQUEST UPON SUBSTANTIAL

24 CHANGE IN CIRCUMSTANCES.—The State shall,

25 at the request of either parent subject to such
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•S 1956 PCS

1 an order or of any State child support enforce2 ment agency, review and, if appropriate, adjust

3 the order in accordance with the guidelines es4 tablished pursuant to section 467(a) based

5 upon a substantial change in the circumstances

6 of either parent.

7 ‘‘(D) NOTICE OF RIGHT TO REVIEW.—The

8 State shall provide notice not less than once

9 every 3 years to the parents subject to such an

10 order informing them of their right to request

11 the State to review and, if appropriate, adjust

12 the order pursuant to this paragraph. The no13 tice may be included in the order.’’.

14 SEC. 2352. FURNISHING CONSUMER REPORTS FOR CER15 TAIN PURPOSES RELATING TO CHILD SUP16 PORT.

17 Section 604 of the Fair Credit Reporting Act (15

18 U.S.C. 1681b) is amended by adding at the end the follow19 ing new paragraphs:

20 ‘‘(4) In response to a request by the head of a State

21 or local child support enforcement agency (or a State or

22 local government official authorized by the head of such

23 an agency), if the person making the request certifies to

24 the consumer reporting agency that—
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•S 1956 PCS

1 ‘‘(A) the consumer report is needed for the pur2 pose of establishing an individual’s capacity to make

3 child support payments or determining the appro4 priate level of such payments;

5 ‘‘(B) the paternity of the consumer for the child

6 to which the obligation relates has been established

7 or acknowledged by the consumer in accordance with

8 State laws under which the obligation arises (if re9 quired by those laws);

10 ‘‘(C) the person has provided at least 10 days’

11 prior notice to the consumer whose report is re12 quested, by certified or registered mail to the last

13 known address of the consumer, that the report will

14 be requested; and

15 ‘‘(D) the consumer report will be kept confiden16 tial, will be used solely for a purpose described in

17 subparagraph (A), and will not be used in connec18 tion with any other civil, administrative, or criminal

19 proceeding, or for any other purpose.

20 ‘‘(5) To an agency administering a State plan under

21 section 454 of the Social Security Act (42 U.S.C. 654)

22 for use to set an initial or modified child support award.’’.
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1 SEC. 2353. NONLIABILITY FOR FINANCIAL INSTITUTIONS

2 PROVIDING FINANCIAL RECORDS TO STATE

3 CHILD SUPPORT ENFORCEMENT AGENCIES

4 IN CHILD SUPPORT CASES.

5 Part D of title IV (42 U.S.C. 651–669) is amended

6 by adding at the end the following:

7 ‘‘SEC. 469A. NONLIABILITY FOR FINANCIAL INSTITUTIONS

8 PROVIDING FINANCIAL RECORDS TO STATE

9 CHILD SUPPORT ENFORCEMENT AGENCIES

10 IN CHILD SUPPORT CASES.

11 ‘‘(a) IN GENERAL.—Notwithstanding any other pro12 vision of Federal or State law, a financial institution shall

13 not be liable under any Federal or State law to any person

14 for disclosing any financial record of an individual to a

15 State child support enforcement agency attempting to es16 tablish, modify, or enforce a child support obligation of

17 such individual.

18 ‘‘(b) PROHIBITION OF DISCLOSURE OF FINANCIAL

19 RECORD OBTAINED BY STATE CHILD SUPPORT EN20 FORCEMENT AGENCY.—A State child support enforcement

21 agency which obtains a financial record of an individual

22 from a financial institution pursuant to subsection (a)

23 may disclose such financial record only for the purpose

24 of, and to the extent necessary in, establishing, modifying,

25 or enforcing a child support obligation of such individual.
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•S 1956 PCS

1 ‘‘(c) CIVIL DAMAGES FOR UNAUTHORIZED DISCLO2 SURE.—

3 ‘‘(1) DISCLOSURE BY STATE OFFICER OR EM4 PLOYEE.—If any person knowingly, or by reason of

5 negligence, discloses a financial record of an individ6 ual in violation of subsection (b), such individual

7 may bring a civil action for damages against such

8 person in a district court of the United States.

9 ‘‘(2) NO LIABILITY FOR GOOD FAITH BUT ER10 RONEOUS INTERPRETATION.—No liability shall arise

11 under this subsection with respect to any disclosure

12 which results from a good faith, but erroneous, in13 terpretation of subsection (b).

14 ‘‘(3) DAMAGES.—In any action brought under

15 paragraph (1), upon a finding of liability on the part

16 of the defendant, the defendant shall be liable to the

17 plaintiff in an amount equal to the sum of—

18 ‘‘(A) the greater of—

19 ‘‘(i) $1,000 for each act of unauthor20 ized disclosure of a financial record with

21 respect to which such defendant is found

22 liable; or

23 ‘‘(ii) the sum of—
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•S 1956 PCS

1 ‘‘(I) the actual damages sus2 tained by the plaintiff as a result of

3 such unauthorized disclosure; plus

4 ‘‘(II) in the case of a willful dis5 closure or a disclosure which is the re6 sult of gross negligence, punitive dam7 ages; plus

8 ‘‘(B) the costs (including attorney’s fees)

9 of the action.

10 ‘‘(d) DEFINITIONS.—For purposes of this section—

11 ‘‘(1) FINANCIAL INSTITUTION.—The term ‘fi12 nancial institution’ means—

13 ‘‘(A) a depository institution, as defined in

14 section 3(c) of the Federal Deposit Insurance

15 Act (12 U.S.C. 1813(c));

16 ‘‘(B) an institution-affiliated party, as de17 fined in section 3(u) of such Act (12 U.S.C.

18 1813(u));

19 ‘‘(C) any Federal credit union or State

20 credit union, as defined in section 101 of the

21 Federal Credit Union Act (12 U.S.C. 1752), in22 cluding an institution-affiliated party of such a

23 credit union, as defined in section 206(r) of

24 such Act (12 U.S.C. 1786(r)); and
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•S 1956 PCS

1 ‘‘(D) any benefit association, insurance

2 company, safe deposit company, money-market

3 mutual fund, or similar entity authorized to do

4 business in the State.

5 ‘‘(2) FINANCIAL RECORD.—The term ‘financial

6 record’ has the meaning given such term in section

7 1101 of the Right to Financial Privacy Act of 1978

8 (12 U.S.C. 3401).’’.

9 Subchapter G—Enforcement of Support

10 Orders

11 SEC. 2361. INTERNAL REVENUE SERVICE COLLECTION OF

12 ARREARAGES.

13 (a) COLLECTION OF FEES.—Section 6305(a) of the

14 Internal Revenue Code of 1986 (relating to collection of

15 certain liability) is amended—

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

17 (3);

18 (2) by striking the period at the end of para19 graph (4) and inserting ‘‘, and’’;

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

21 paragraph:

22 ‘‘(5) no additional fee may be assessed for ad23 justments to an amount previously certified pursu24 ant to such section 452(b) with respect to the same

25 obligor.’’; and
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•S 1956 PCS

1 (4) by striking ‘‘Secretary of Health, Edu2 cation, and Welfare’’ each place it appears and in3 serting ‘‘Secretary of Health and Human Services’’.

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

5 this section shall become effective October 1, 1997.

6 SEC. 2362. AUTHORITY TO COLLECT SUPPORT FROM FED7 ERAL EMPLOYEES.

8 (a) CONSOLIDATION AND STREAMLINING OF AU9 THORITIES.—Section 459 (42 U.S.C. 659) is amended to

10 read as follows:

11 ‘‘SEC. 459. CONSENT BY THE UNITED STATES TO INCOME

12 WITHHOLDING, GARNISHMENT, AND SIMILAR

13 PROCEEDINGS FOR ENFORCEMENT OF CHILD

14 SUPPORT AND ALIMONY OBLIGATIONS.

15 ‘‘(a) CONSENT TO SUPPORT ENFORCEMENT.—Not16 withstanding any other provision of law (including section

17 207 of this Act and section 5301 of title 38, United States

18 Code), effective January 1, 1975, moneys (the entitlement

19 to which is based upon remuneration for employment) due

20 from, or payable by, the United States or the District of

21 Columbia (including any agency, subdivision, or instru22 mentality thereof) to any individual, including members

23 of the Armed Forces of the United States, shall be subject,

24 in like manner and to the same extent as if the United

25 States or the District of Columbia were a private person,
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•S 1956 PCS

1 to withholding in accordance with State law enacted pur2 suant to subsections (a)(1) and (b) of section 466 and reg3 ulations of the Secretary under such subsections, and to

4 any other legal process brought, by a State agency admin5 istering a program under a State plan approved under this

6 part or by an individual obligee, to enforce the legal obliga7 tion of the individual to provide child support or alimony.

8 ‘‘(b) CONSENT TO REQUIREMENTS APPLICABLE TO

9 PRIVATE PERSON.—With respect to notice to withhold in10 come pursuant to subsection (a)(1) or (b) of section 466,

11 or any other order or process to enforce support obliga12 tions against an individual (if the order or process con13 tains or is accompanied by sufficient data to permit

14 prompt identification of the individual and the moneys in15 volved), each governmental entity specified in subsection

16 (a) shall be subject to the same requirements as would

17 apply if the entity were a private person, except as other18 wise provided in this section.

19 ‘‘(c) DESIGNATION OF AGENT; RESPONSE TO NOTICE

20 OR PROCESS—

21 ‘‘(1) DESIGNATION OF AGENT.—The head of

22 each agency subject to this section shall—

23 ‘‘(A) designate an agent or agents to re24 ceive orders and accept service of process in
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•S 1956 PCS

1 matters relating to child support or alimony;

2 and

3 ‘‘(B) annually publish in the Federal Reg4 ister the designation of the agent or agents,

5 identified by title or position, mailing address,

6 and telephone number.

7 ‘‘(2) RESPONSE TO NOTICE OR PROCESS.—If an

8 agent designated pursuant to paragraph (1) of this

9 subsection receives notice pursuant to State proce10 dures in effect pursuant to subsection (a)(1) or (b)

11 of section 466, or is effectively served with any

12 order, process, or interrogatory, with respect to an

13 individual’s child support or alimony payment obli14 gations, the agent shall—

15 ‘‘(A) as soon as possible (but not later

16 than 15 days) thereafter, send written notice of

17 the notice or service (together with a copy of

18 the notice or service) to the individual at the

19 duty station or last-known home address of the

20 individual;

21 ‘‘(B) within 30 days (or such longer period

22 as may be prescribed by applicable State law)

23 after receipt of a notice pursuant to such State

24 procedures, comply with all applicable provi25 sions of section 466; and
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1 ‘‘(C) within 30 days (or such longer period

2 as may be prescribed by applicable State law)

3 after effective service of any other such order,

4 process, or interrogatory, respond to the order,

5 process, or interrogatory.

6 ‘‘(d) PRIORITY OF CLAIMS.—If a governmental entity

7 specified in subsection (a) receives notice or is served with

8 process, as provided in this section, concerning amounts

9 owed by an individual to more than 1 person—

10 ‘‘(1) support collection under section 466(b)

11 must be given priority over any other process, as

12 provided in section 466(b)(7);

13 ‘‘(2) allocation of moneys due or payable to an

14 individual among claimants under section 466(b)

15 shall be governed by section 466(b) and the regula16 tions prescribed under such section; and

17 ‘‘(3) such moneys as remain after compliance

18 with paragraphs (1) and (2) shall be available to

19 satisfy any other such processes on a first-come,

20 first-served basis, with any such process being satis21 fied out of such moneys as remain after the satisfac22 tion of all such processes which have been previously

23 served.

24 ‘‘(e) NO REQUIREMENT TO VARY PAY CYCLES.—A

25 governmental entity that is affected by legal process
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•S 1956 PCS

1 served for the enforcement of an individual’s child support

2 or alimony payment obligations shall not be required to

3 vary its normal pay and disbursement cycle in order to

4 comply with the legal process.

5 ‘‘(f) RELIEF FROM LIABILITY.—

6 ‘‘(1) Neither the United States, nor the govern7 ment of the District of Columbia, nor any disbursing

8 officer shall be liable with respect to any payment

9 made from moneys due or payable from the United

10 States to any individual pursuant to legal process

11 regular on its face, if the payment is made in ac12 cordance with this section and the regulations issued

13 to carry out this section.

14 ‘‘(2) No Federal employee whose duties include

15 taking actions necessary to comply with the require16 ments of subsection (a) with regard to any individ17 ual shall be subject under any law to any discipli18 nary action or civil or criminal liability or penalty

19 for, or on account of, any disclosure of information

20 made by the employee in connection with the carry21 ing out of such actions.

22 ‘‘(g) REGULATIONS.—Authority to promulgate regu23 lations for the implementation of this section shall, insofar

24 as this section applies to moneys due from (or payable

25 by)—
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1 ‘‘(1) the United States (other than the legisla2 tive or judicial branches of the Federal Government)

3 or the government of the District of Columbia, be

4 vested in the President (or the designee of the Presi5 dent);

6 ‘‘(2) the legislative branch of the Federal Gov7 ernment, be vested jointly in the President pro tem8 pore of the Senate and the Speaker of the House of

9 Representatives (or their designees), and

10 ‘‘(3) the judicial branch of the Federal Govern11 ment, be vested in the Chief Justice of the United

12 States (or the designee of the Chief Justice).

13 ‘‘(h) MONEYS SUBJECT TO PROCESS.—

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

15 moneys paid or payable to an individual which are

16 considered to be based upon remuneration for em17 ployment, for purposes of this section—

18 ‘‘(A) consist of—

19 ‘‘(i) compensation paid or payable for

20 personal services of the individual, whether

21 the compensation is denominated as wages,

22 salary, commission, bonus, pay, allowances,

23 or otherwise (including severance pay, sick

24 pay, and incentive pay);
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1 ‘‘(ii) periodic benefits (including a

2 periodic benefit as defined in section

3 228(h)(3)) or other payments—

4 ‘‘(I) under the insurance system

5 established by title II;

6 ‘‘(II) under any other system or

7 fund established by the United States

8 which provides for the payment of

9 pensions, retirement or retired pay,

10 annuities, dependents’ or survivors’

11 benefits, or similar amounts payable

12 on account of personal services per13 formed by the individual or any other

14 individual;

15 ‘‘(III) as compensation for death

16 under any Federal program;

17 ‘‘(IV) under any Federal pro18 gram established to provide ‘black

19 lung’ benefits; or

20 ‘‘(V) by the Secretary of Veter21 ans Affairs as compensation for a

22 service-connected disability paid by

23 the Secretary to a former member of

24 the Armed Forces who is in receipt of

25 retired or retainer pay if the former
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1 member has waived a portion of the

2 retired or retainer pay in order to re3 ceive such compensation; and

4 ‘‘(iii) worker’s compensation benefits

5 paid under Federal or State law but

6 ‘‘(B) do not include any payment—

7 ‘‘(i) by way of reimbursement or oth8 erwise, to defray expenses incurred by the

9 individual in carrying out duties associated

10 with the employment of the individual; or

11 ‘‘(ii) as allowances for members of the

12 uniformed services payable pursuant to

13 chapter 7 of title 37, United States Code,

14 as prescribed by the Secretaries concerned

15 (defined by section 101(5) of such title) as

16 necessary for the efficient performance of

17 duty.

18 ‘‘(2) CERTAIN AMOUNTS EXCLUDED.—In deter19 mining the amount of any moneys due from, or pay20 able by, the United States to any individual, there

21 shall be excluded amounts which—

22 ‘‘(A) are owed by the individual to the

23 United States;

24 ‘‘(B) are required by law to be, and are,

25 deducted from the remuneration or other pay-
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1 ment involved, including Federal employment

2 taxes, and fines and forfeitures ordered by

3 court-martial;

4 ‘‘(C) are properly withheld for Federal,

5 State, or local income tax purposes, if the with6 holding of the amounts is authorized or re7 quired by law and if amounts withheld are not

8 greater than would be the case if the individual

9 claimed all dependents to which he was entitled

10 (the withholding of additional amounts pursu11 ant to section 3402(i) of the Internal Revenue

12 Code of 1986 may be permitted only when the

13 individual presents evidence of a tax obligation

14 which supports the additional withholding);

15 ‘‘(D) are deducted as health insurance pre16 miums;

17 ‘‘(E) are deducted as normal retirement

18 contributions (not including amounts deducted

19 for supplementary coverage); or

20 ‘‘(F) are deducted as normal life insurance

21 premiums from salary or other remuneration

22 for employment (not including amounts de23 ducted for supplementary coverage).

24 ‘‘(i) DEFINITIONS.—For purposes of this section—
526

•S 1956 PCS

1 ‘‘(1) UNITED STATES.—The term ‘United

2 States’ includes any department, agency, or instru3 mentality of the legislative, judicial, or executive

4 branch of the Federal Government, the United

5 States Postal Service, the Postal Rate Commission,

6 any Federal corporation created by an Act of Con7 gress that is wholly owned by the Federal Govern8 ment, and the governments of the territories and

9 possessions of the United States.

10 ‘‘(2) CHILD SUPPORT.—The term ‘child sup11 port’, when used in reference to the legal obligations

12 of an individual to provide such support, means

13 amounts required to be paid under a judgment, de14 cree, or order, whether temporary, final, or subject

15 to modification, issued by a court or an administra16 tive agency of competent jurisdiction, for the sup17 port and maintenance of a child, including a child

18 who has attained the age of majority under the law

19 of the issuing State, or a child and the parent with

20 whom the child is living, which provides for mone21 tary support, health care, arrearages or reimburse22 ment, and which may include other related costs and

23 fees, interest and penalties, income withholding, at24 torney’s fees, and other relief.

25 ‘‘(3) ALIMONY.—
527

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1 ‘‘(A) IN GENERAL.—The term ‘alimony’,

2 when used in reference to the legal obligations

3 of an individual to provide the same, means

4 periodic payments of funds for the support and

5 maintenance of the spouse (or former spouse)

6 of the individual, and (subject to and in accord7 ance with State law) includes separate mainte8 nance, alimony pendente lite, maintenance, and

9 spousal support, and includes attorney’s fees,

10 interest, and court costs when and to the extent

11 that the same are expressly made recoverable as

12 such pursuant to a decree, order, or judgment

13 issued in accordance with applicable State law

14 by a court of competent jurisdiction.

15 ‘‘(B) EXCEPTIONS.—Such term does not

16 include—

17 ‘‘(i) any child support; or

18 ‘‘(ii) any payment or transfer of prop19 erty or its value by an individual to the

20 spouse or a former spouse of the individual

21 in compliance with any community prop22 erty settlement, equitable distribution of

23 property, or other division of property be24 tween spouses or former spouses.
528

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1 ‘‘(4) PRIVATE PERSON.—The term ‘private per2 son’ means a person who does not have sovereign or

3 other special immunity or privilege which causes the

4 person not to be subject to legal process.

5 ‘‘(5) LEGAL PROCESS.—The term ‘legal proc6 ess’ means any writ, order, summons, or other simi7 lar process in the nature of garnishment—

8 ‘‘(A) which is issued by—

9 ‘‘(i) a court or an administrative

10 agency of competent jurisdiction in any

11 State, territory, or possession of the Unit12 ed States;

13 ‘‘(ii) a court or an administrative

14 agency of competent jurisdiction in any

15 foreign country with which the United

16 States has entered into an agreement

17 which requires the United States to honor

18 the process; or

19 ‘‘(iii) an authorized official pursuant

20 to an order of such a court or an adminis21 trative agency of competent jurisdiction or

22 pursuant to State or local law; and

23 ‘‘(B) which is directed to, and the purpose

24 of which is to compel, a governmental entity

25 which holds moneys which are otherwise pay-
529

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1 able to an individual to make a payment from

2 the moneys to another party in order to satisfy

3 a legal obligation of the individual to provide

4 child support or make alimony payments.’’.

5 (b) CONFORMING AMENDMENTS.—

6 (1) TO PART D OF TITLE IV.—Sections 461 and

7 462 (42 U.S.C. 661 and 662) are repealed.

8 (2) TO TITLE 5, UNITED STATES CODE.—Sec9 tion 5520a of title 5, United States Code, is amend10 ed, in subsections (h)(2) and (i), by striking ‘‘sec11 tions 459, 461, and 462 of the Social Security Act

12 (42 U.S.C. 659, 661, and 662)’’ and inserting ‘‘sec13 tion 459 of the Social Security Act (42 U.S.C.

14 659)’’.

15 (c) MILITARY RETIRED AND RETAINER PAY.—

16 (1) DEFINITION OF COURT.—Section

17 1408(a)(1) of title 10, United States Code, is

18 amended—

19 (A) by striking ‘‘and’’ at the end of sub20 paragraph (B);

21 (B) by striking the period at the end of

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

23 (C) by adding after subparagraph (C) the

24 following new subparagraph:
530

•S 1956 PCS

1 ‘‘(D) any administrative or judicial tribu2 nal of a State competent to enter orders for

3 support or maintenance (including a State

4 agency administering a program under a State

5 plan approved under part D of title IV of the

6 Social Security Act), and, for purposes of this

7 subparagraph, the term ‘State’ includes the

8 District of Columbia, the Commonwealth of

9 Puerto Rico, the Virgin Islands, Guam, and

10 American Samoa.’’.

11 (2) DEFINITION OF COURT ORDER.—Section

12 1408(a)(2) of such title is amended—

13 (A) by inserting ‘‘or a support order, as

14 defined in section 453(p) of the Social Security

15 Act (42 U.S.C. 653(p)),’’ before ‘‘which—’’;

16 (B) in subparagraph (B)(i), by striking

17 ‘‘(as defined in section 462(b) of the Social Se18 curity Act (42 U.S.C. 662(b)))’’ and inserting

19 ‘‘(as defined in section 459(i)(2) of the Social

20 Security Act (42 U.S.C. 659(i)(2)))’’; and

21 (C) in subparagraph (B)(ii), by striking

22 ‘‘(as defined in section 462(c) of the Social Se23 curity Act (42 U.S.C. 662(c)))’’ and inserting

24 ‘‘(as defined in section 459(i)(3) of the Social

25 Security Act (42 U.S.C. 659(i)(3)))’’.
531

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1 (3) PUBLIC PAYEE.—Section 1408(d) of such

2 title is amended—

3 (A) in the heading, by inserting ‘‘(OR FOR

4 BENEFIT OF)’’ before ‘‘SPOUSE OR’’; and

5 (B) in paragraph (1), in the 1st sentence,

6 by inserting ‘‘(or for the benefit of such spouse

7 or former spouse to a State disbursement unit

8 established pursuant to section 454B of the So9 cial Security Act or other public payee des10 ignated by a State, in accordance with part D

11 of title IV of the Social Security Act, as di12 rected by court order, or as otherwise directed

13 in accordance with such part D)’’ before ‘‘in an

14 amount sufficient’’.

15 (4) RELATIONSHIP TO PART D OF TITLE IV.—

16 Section 1408 of such title is amended by adding at

17 the end the following new subsection:

18 ‘‘(j) RELATIONSHIP TO OTHER LAWS.—In any case

19 involving an order providing for payment of child support

20 (as defined in section 459(i)(2) of the Social Security Act)

21 by a member who has never been married to the other

22 parent of the child, the provisions of this section shall not

23 apply, and the case shall be subject to the provisions of

24 section 459 of such Act.’’.
532

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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall become effective 6 months after the date

3 of the enactment of this Act.

4 SEC. 2363. ENFORCEMENT OF CHILD SUPPORT OBLIGA5 TIONS OF MEMBERS OF THE ARMED FORCES.

6 (a) AVAILABILITY OF LOCATOR INFORMATION.—

7 (1) MAINTENANCE OF ADDRESS INFORMA8 TION.—The Secretary of Defense shall establish a

9 centralized personnel locator service that includes

10 the address of each member of the Armed Forces

11 under the jurisdiction of the Secretary. Upon re12 quest of the Secretary of Transportation, addresses

13 for members of the Coast Guard shall be included in

14 the centralized personnel locator service.

15 (2) TYPE OF ADDRESS.—

16 (A) RESIDENTIAL ADDRESS.—Except as

17 provided in subparagraph (B), the address for

18 a member of the Armed Forces shown in the lo19 cator service shall be the residential address of

20 that member.

21 (B) DUTY ADDRESS.—The address for a

22 member of the Armed Forces shown in the loca23 tor service shall be the duty address of that

24 member in the case of a member—
533

•S 1956 PCS

1 (i) who is permanently assigned over2 seas, to a vessel, or to a routinely

3 deployable unit; or

4 (ii) with respect to whom the Sec5 retary concerned makes a determination

6 that the member’s residential address

7 should not be disclosed due to national se8 curity or safety concerns.

9 (3) UPDATING OF LOCATOR INFORMATION.—

10 Within 30 days after a member listed in the locator

11 service establishes a new residential address (or a

12 new duty address, in the case of a member covered

13 by paragraph (2)(B)), the Secretary concerned shall

14 update the locator service to indicate the new ad15 dress of the member.

16 (4) AVAILABILITY OF INFORMATION.—The Sec17 retary of Defense shall make information regarding

18 the address of a member of the Armed Forces listed

19 in the locator service available, on request, to the

20 Federal Parent Locator Service established under

21 section 453 of the Social Security Act.

22 (b) FACILITATING GRANTING OF LEAVE FOR AT23 TENDANCE AT HEARINGS.—

24 (1) REGULATIONS.—The Secretary of each

25 military department, and the Secretary of Transpor-
534

•S 1956 PCS

1 tation with respect to the Coast Guard when it is

2 not operating as a service in the Navy, shall pre3 scribe regulations to facilitate the granting of leave

4 to a member of the Armed Forces under the juris5 diction of that Secretary in a case in which—

6 (A) the leave is needed for the member to

7 attend a hearing described in paragraph (2);

8 (B) the member is not serving in or with

9 a unit deployed in a contingency operation (as

10 defined in section 101 of title 10, United States

11 Code); and

12 (C) the exigencies of military service (as

13 determined by the Secretary concerned) do not

14 otherwise require that such leave not be grant15 ed.

16 (2) COVERED HEARINGS.—Paragraph (1) ap17 plies to a hearing that is conducted by a court or

18 pursuant to an administrative process established

19 under State law, in connection with a civil action—

20 (A) to determine whether a member of the

21 Armed Forces is a natural parent of a child; or

22 (B) to determine an obligation of a mem23 ber of the Armed Forces to provide child sup24 port.
535

•S 1956 PCS

1 (3) DEFINITIONS.—For purposes of this sub2 section—

3 (A) The term ‘‘court’’ has the meaning

4 given that term in section 1408(a) of title 10,

5 United States Code.

6 (B) The term ‘‘child support’’ has the

7 meaning given such term in section 459(i) of

8 the Social Security Act (42 U.S.C. 659(i)).

9 (c) PAYMENT OF MILITARY RETIRED PAY IN COM10 PLIANCE WITH CHILD SUPPORT ORDERS.—

11 (1) DATE OF CERTIFICATION OF COURT

12 ORDER.—Section 1408 of title 10, United States

13 Code, as amended by section 2362(c)(4) of this Act,

14 is amended—

15 (A) by redesignating subsections (i) and (j)

16 as subsections (j) and (k), respectively; and

17 (B) by inserting after subsection (h) the

18 following new subsection:

19 ‘‘(i) CERTIFICATION DATE.—It is not necessary that

20 the date of a certification of the authenticity or complete21 ness of a copy of a court order for child support received

22 by the Secretary concerned for the purposes of this section

23 be recent in relation to the date of receipt by the Sec24 retary.’’.
536

•S 1956 PCS

1 (2) PAYMENTS CONSISTENT WITH ASSIGN2 MENTS OF RIGHTS TO STATES.—Section 1408(d)(1)

3 of such title is amended by inserting after the 1st

4 sentence the following new sentence: ‘‘In the case of

5 a spouse or former spouse who, pursuant to section

6 408(a)(4) of the Social Security Act (42 U.S.C.

7 608(a)(4)), assigns to a State the rights of the

8 spouse or former spouse to receive support, the Sec9 retary concerned may make the child support pay10 ments referred to in the preceding sentence to that

11 State in amounts consistent with that assignment of

12 rights.’’.

13 (3) ARREARAGES OWED BY MEMBERS OF THE

14 UNIFORMED SERVICES.—Section 1408(d) of such

15 title is amended by adding at the end the following

16 new paragraph:

17 ‘‘(6) In the case of a court order for which effective

18 service is made on the Secretary concerned on or after

19 the date of the enactment of this paragraph and which

20 provides for payments from the disposable retired pay of

21 a member to satisfy the amount of child support set forth

22 in the order, the authority provided in paragraph (1) to

23 make payments from the disposable retired pay of a mem24 ber to satisfy the amount of child support set forth in a

25 court order shall apply to payment of any amount of child
537

•S 1956 PCS

1 support arrearages set forth in that order as well as to

2 amounts of child support that currently become due.’’.

3 (4) PAYROLL DEDUCTIONS.—The Secretary of

4 Defense shall begin payroll deductions within 30

5 days after receiving notice of withholding, or for the

6 1st pay period that begins after such 30-day period.

7 SEC. 2364. VOIDING OF FRAUDULENT TRANSFERS.

8 Section 466 (42 U.S.C. 666), as amended by section

9 2321 of this Act, is amended by adding at the end the

10 following new subsection:

11 ‘‘(g) LAWS VOIDING FRAUDULENT TRANSFERS.—In

12 order to satisfy section 454(20)(A), each State must have

13 in effect—

14 ‘‘(1)(A) the Uniform Fraudulent Conveyance

15 Act of 1981;

16 ‘‘(B) the Uniform Fraudulent Transfer Act of

17 1984; or

18 ‘‘(C) another law, specifying indicia of fraud

19 which create a prima facie case that a debtor trans20 ferred income or property to avoid payment to a

21 child support creditor, which the Secretary finds af22 fords comparable rights to child support creditors;

23 and

24 ‘‘(2) procedures under which, in any case in

25 which the State knows of a transfer by a child sup-
538

•S 1956 PCS

1 port debtor with respect to which such a prima facie

2 case is established, the State must—

3 ‘‘(A) seek to void such transfer; or

4 ‘‘(B) obtain a settlement in the best inter5 ests of the child support creditor.’’.

6 SEC. 2365. WORK REQUIREMENT FOR PERSONS OWING

7 PAST-DUE CHILD SUPPORT.

8 (a) IN GENERAL.—Section 466(a) (42 U.S.C.

9 666(a)), as amended by sections 2315, 2317(a), and 2323

10 of this Act, is amended by inserting after paragraph (14)

11 the following new paragraph:

12 ‘‘(15) PROCEDURES TO ENSURE THAT PERSONS

13 OWING PAST-DUE SUPPORT WORK OR HAVE A PLAN

14 FOR PAYMENT OF SUCH SUPPORT.—

15 ‘‘(A) IN GENERAL.—Procedures under

16 which the State has the authority, in any case

17 in which an individual owes past-due support

18 with respect to a child receiving assistance

19 under a State program funded under part A, to

20 issue an order or to request that a court or an

21 administrative process established pursuant to

22 State law issue an order that requires the indi23 vidual to—

24 ‘‘(i) pay such support in accordance

25 with a plan approved by the court, or, at
539

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1 the option of the State, a plan approved by

2 the State agency administering the State

3 program under this part; or

4 ‘‘(ii) if the individual is subject to

5 such a plan and is not incapacitated, par6 ticipate in such work activities (as defined

7 in section 407(d)) as the court, or, at the

8 option of the State, the State agency ad9 ministering the State program under this

10 part, deems appropriate.

11 ‘‘(B) PAST-DUE SUPPORT DEFINED.—For

12 purposes of subparagraph (A), the term ‘past13 due support’ means the amount of a delin14 quency, determined under a court order, or an

15 order of an administrative process established

16 under State law, for support and maintenance

17 of a child, or of a child and the parent with

18 whom the child is living.’’.

19 (b) CONFORMING AMENDMENT.—The flush para20 graph at the end of section 466(a) (42 U.S.C. 666(a)) is

21 amended by striking ‘‘and (7)’’ and inserting ‘‘(7), and

22 (15)’’.
540

•S 1956 PCS

1 SEC. 2366. DEFINITION OF SUPPORT ORDER.

2 Section 453 (42 U.S.C. 653) as amended by sections

3 2316 and 2345(b) of this Act, is amended by adding at

4 the end the following new subsection:

5 ‘‘(p) SUPPORT ORDER DEFINED.—As used in this

6 part, the term ‘support order’ means a judgment, decree,

7 or order, whether temporary, final, or subject to modifica8 tion, issued by a court or an administrative agency of com9 petent jurisdiction, for the support and maintenance of a

10 child, including a child who has attained the age of major11 ity under the law of the issuing State, or a child and the

12 parent with whom the child is living, which provides for

13 monetary support, health care, arrearages, or reimburse14 ment, and which may include related costs and fees, inter15 est and penalties, income withholding, attorneys’ fees, and

16 other relief.’’.

17 SEC. 2367. REPORTING ARREARAGES TO CREDIT BUREAUS.

18 Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amended

19 to read as follows:

20 ‘‘(7) REPORTING ARREARAGES TO CREDIT BU21 REAUS.—

22 ‘‘(A) IN GENERAL.—Procedures (subject to

23 safeguards pursuant to subparagraph (B)) re24 quiring the State to report periodically to

25 consumer reporting agencies (as defined in sec26 tion 603(f) of the Fair Credit Reporting Act
541

•S 1956 PCS

1 (15 U.S.C. 1681a(f)) the name of any non2 custodial parent who is delinquent in the pay3 ment of support, and the amount of overdue

4 support owed by such parent.

5 ‘‘(B) SAFEGUARDS.—Procedures ensuring

6 that, in carrying out subparagraph (A), infor7 mation with respect to a noncustodial parent is

8 reported—

9 ‘‘(i) only after such parent has been

10 afforded all due process required under

11 State law, including notice and a reason12 able opportunity to contest the accuracy of

13 such information; and

14 ‘‘(ii) only to an entity that has fur15 nished evidence satisfactory to the State

16 that the entity is a consumer reporting

17 agency (as so defined).’’.

18 SEC. 2368. LIENS.

19 Section 466(a)(4) (42 U.S.C. 666(a)(4)) is amended

20 to read as follows:

21 ‘‘(4) LIENS.—Procedures under which—

22 ‘‘(A) liens arise by operation of law against

23 real and personal property for amounts of over24 due support owed by a noncustodial parent who

25 resides or owns property in the State; and
542

•S 1956 PCS

1 ‘‘(B) the State accords full faith and credit

2 to liens described in subparagraph (A) arising

3 in another State, when the State agency, party,

4 or other entity seeking to enforce such a lien

5 complies with the procedural rules relating to

6 recording or serving liens that arise within the

7 State, except that such rules may not require

8 judicial notice or hearing prior to the enforce9 ment of such a lien.’’.

10 SEC. 2369. STATE LAW AUTHORIZING SUSPENSION OF LI11 CENSES.

12 Section 466(a) (42 U.S.C. 666(a)), as amended by

13 sections 2315, 2317(a), 2323, and 2365 of this Act, is

14 amended by inserting after paragraph (15) the following:

15 ‘‘(16) AUTHORITY TO WITHHOLD OR SUSPEND

16 LICENSES.—Procedures under which the State has

17 (and uses in appropriate cases) authority to withhold

18 or suspend, or to restrict the use of driver’s licenses,

19 professional and occupational licenses, and rec20 reational licenses of individuals owing overdue sup21 port or failing, after receiving appropriate notice, to

22 comply with subpoenas or warrants relating to pa23 ternity or child support proceedings.’’.
543

•S 1956 PCS

1 SEC. 2370. DENIAL OF PASSPORTS FOR NONPAYMENT OF

2 CHILD SUPPORT.

3 (a) HHS CERTIFICATION PROCEDURE.—

4 (1) SECRETARIAL RESPONSIBILITY.—Section

5 452 (42 U.S.C. 652), as amended by section 2345

6 of this Act, is amended by adding at the end the fol7 lowing new subsection:

8 ‘‘(k)(1) If the Secretary receives a certification by a

9 State agency in accordance with the requirements of sec10 tion 454(31) that an individual owes arrearages of child

11 support in an amount exceeding $5,000, the Secretary

12 shall transmit such certification to the Secretary of State

13 for action (with respect to denial, revocation, or limitation

14 of passports) pursuant to paragraph (2).

15 ‘‘(2) The Secretary of State shall, upon certification

16 by the Secretary transmitted under paragraph (1), refuse

17 to issue a passport to such individual, and may revoke,

18 restrict, or limit a passport issued previously to such indi19 vidual.

20 ‘‘(3) The Secretary and the Secretary of State shall

21 not be liable to an individual for any action with respect

22 to a certification by a State agency under this section.’’.

23 (2) STATE AGENCY RESPONSIBILITY.—Section

24 454 (42 U.S.C. 654), as amended by sections

25 2301(b), 2303(a), 2312(b), 2313(a), 2333, and

26 2343(b) of this Act, is amended—
544

•S 1956 PCS

1 (A) by striking ‘‘and’’ at the end of para2 graph (29);

3 (B) by striking the period at the end of

4 paragraph (30) and inserting ‘‘; and’’; and

5 (C) by adding after paragraph (30) the fol6 lowing new paragraph:

7 ‘‘(31) provide that the State agency will have in

8 effect a procedure for certifying to the Secretary, for

9 purposes of the procedure under section 452(k), de10 terminations that individuals owe arrearages of child

11 support in an amount exceeding $5,000, under

12 which procedure—

13 ‘‘(A) each individual concerned is afforded

14 notice of such determination and the con15 sequences thereof, and an opportunity to con16 test the determination; and

17 ‘‘(B) the certification by the State agency

18 is furnished to the Secretary in such format,

19 and accompanied by such supporting docu20 mentation, as the Secretary may require.’’.

21 (b) EFFECTIVE DATE.—This section and the amend22 ments made by this section shall become effective October

23 1, 1997.
545

•S 1956 PCS

1 SEC. 2371. INTERNATIONAL SUPPORT ENFORCEMENT.

2 (a) AUTHORITY FOR INTERNATIONAL AGREE3 MENTS.—Part D of title IV, as amended by section

4 2362(a) of this Act, is amended by adding after section

5 459 the following new section:

6 ‘‘SEC. 459A. INTERNATIONAL SUPPORT ENFORCEMENT.

7 ‘‘(a) AUTHORITY FOR DECLARATIONS.—

8 ‘‘(1) DECLARATION.—The Secretary of State,

9 with the concurrence of the Secretary of Health and

10 Human Services, is authorized to declare any foreign

11 country (or a political subdivision thereof) to be a

12 foreign reciprocating country if the foreign country

13 has established, or undertakes to establish, proce14 dures for the establishment and enforcement of du15 ties of support owed to obligees who are residents of

16 the United States, and such procedures are substan17 tially in conformity with the standards prescribed

18 under subsection (b).

19 ‘‘(2) REVOCATION.—A declaration with respect

20 to a foreign country made pursuant to paragraph

21 (1) may be revoked if the Secretaries of State and

22 Health and Human Services determine that—

23 ‘‘(A) the procedures established by the for24 eign country regarding the establishment and

25 enforcement of duties of support have been so

26 changed, or the foreign country’s implementa-
546

•S 1956 PCS

1 tion of such procedures is so unsatisfactory,

2 that such procedures do not meet the criteria

3 for such a declaration; or

4 ‘‘(B) continued operation of the declaration

5 is not consistent with the purposes of this part.

6 ‘‘(3) FORM OF DECLARATION.—A declaration

7 under paragraph (1) may be made in the form of an

8 international agreement, in connection with an inter9 national agreement or corresponding foreign declara10 tion, or on a unilateral basis.

11 ‘‘(b) STANDARDS FOR FOREIGN SUPPORT ENFORCE12 MENT PROCEDURES.—

13 ‘‘(1) MANDATORY ELEMENTS.—Support en14 forcement procedures of a foreign country which

15 may be the subject of a declaration pursuant to sub16 section (a)(1) shall include the following elements:

17 ‘‘(A) The foreign country (or political sub18 division thereof) has in effect procedures, avail19 able to residents of the United States—

20 ‘‘(i) for establishment of paternity,

21 and for establishment of orders of support

22 for children and custodial parents; and

23 ‘‘(ii) for enforcement of orders to pro24 vide support to children and custodial par25 ents, including procedures for collection
547

•S 1956 PCS

1 and appropriate distribution of support

2 payments under such orders.

3 ‘‘(B) The procedures described in subpara4 graph (A), including legal and administrative

5 assistance, are provided to residents of the

6 United States at no cost.

7 ‘‘(C) An agency of the foreign country is

8 designated as a Central Authority responsible

9 for—

10 ‘‘(i) facilitating support enforcement

11 in cases involving residents of the foreign

12 country and residents of the United States;

13 and

14 ‘‘(ii) ensuring compliance with the

15 standards established pursuant to this sub16 section.

17 ‘‘(2) ADDITIONAL ELEMENTS.—The Secretary

18 of Health and Human Services and the Secretary of

19 State, in consultation with the States, may establish

20 such additional standards as may be considered nec21 essary to further the purposes of this section.

22 ‘‘(c) DESIGNATION OF UNITED STATES CENTRAL

23 AUTHORITY.—It shall be the responsibility of the Sec24 retary of Health and Human Services to facilitate support

25 enforcement in cases involving residents of the United
548

•S 1956 PCS

1 States and residents of foreign countries that are the sub2 ject of a declaration under this section, by activities in3 cluding—

4 ‘‘(1) development of uniform forms and proce5 dures for use in such cases;

6 ‘‘(2) notification of foreign reciprocating coun7 tries of the State of residence of individuals sought

8 for support enforcement purposes, on the basis of in9 formation provided by the Federal Parent Locator

10 Service; and

11 ‘‘(3) such other oversight, assistance, and co12 ordination activities as the Secretary may find nec13 essary and appropriate.

14 ‘‘(d) EFFECT ON OTHER LAWS.—States may enter

15 into reciprocal arrangements for the establishment and en16 forcement of support obligations with foreign countries

17 that are not the subject of a declaration pursuant to sub18 section (a), to the extent consistent with Federal law.’’.

19 (b) STATE PLAN REQUIREMENT.—Section 454 (42

20 U.S.C. 654), as amended by sections 2301(b), 2303(a),

21 2312(b), 2313(a), 2333, 2343(b), and 2370(a)(2) of this

22 Act, is amended—

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

24 (30);
549

•S 1956 PCS

1 (2) by striking the period at the end of para2 graph (31) and inserting ‘‘; and’’; and

3 (3) by adding after paragraph (31) the follow4 ing new paragraph:

5 ‘‘(32)(A) provide that any request for services

6 under this part by a foreign reciprocating country or

7 a foreign country with which the State has an ar8 rangement described in section 459A(d)(2) shall be

9 treated as a request by a State;

10 ‘‘(B) provide, at State option, notwithstanding

11 paragraph (4) or any other provision of this part,

12 for services under the plan for enforcement of a

13 spousal support order not described in paragraph

14 (4)(B) entered by such a country (or subdivision);

15 and

16 ‘‘(C) provide that no applications will be re17 quired from, and no costs will be assessed for such

18 services against, the foreign reciprocating country or

19 foreign obligee (but costs may at State option be as20 sessed against the obligor).’’.

21 SEC. 2372. FINANCIAL INSTITUTION DATA MATCHES.

22 Section 466(a) (42 U.S.C. 666(a)), as amended by

23 sections 2315, 2317(a), 2323, 2365, and 2369 of this Act,

24 is amended by inserting after paragraph (16) the following

25 new paragraph:
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1 ‘‘(17) FINANCIAL INSTITUTION DATA

2 MATCHES.—

3 ‘‘(A) IN GENERAL.—Procedures under

4 which the State agency shall enter into agree5 ments with financial institutions doing business

6 in the State—

7 ‘‘(i) to develop and operate, in coordi8 nation with such financial institutions, a

9 data match system, using automated data

10 exchanges to the maximum extent feasible,

11 in which each such financial institution is

12 required to provide for each calendar quar13 ter the name, record address, social secu14 rity number or other taxpayer identifica15 tion number, and other identifying infor16 mation for each noncustodial parent who

17 maintains an account at such institution

18 and who owes past-due support, as identi19 fied by the State by name and social secu20 rity number or other taxpayer identifica21 tion number; and

22 ‘‘(ii) in response to a notice of lien or

23 levy, encumber or surrender, as the case

24 may be, assets held by such institution on

25 behalf of any noncustodial parent who is
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1 subject to a child support lien pursuant to

2 paragraph (4).

3 ‘‘(B) REASONABLE FEES.—The State

4 agency may pay a reasonable fee to a financial

5 institution for conducting the data match pro6 vided for in subparagraph (A)(i), not to exceed

7 the actual costs incurred by such financial insti8 tution.

9 ‘‘(C) LIABILITY.—A financial institution

10 shall not be liable under any Federal or State

11 law to any person—

12 ‘‘(i) for any disclosure of information

13 to the State agency under subparagraph

14 (A)(i);

15 ‘‘(ii) for encumbering or surrendering

16 any assets held by such financial institu17 tion in response to a notice of lien or levy

18 issued by the State agency as provided for

19 in subparagraph (A)(ii); or

20 ‘‘(iii) for any other action taken in

21 good faith to comply with the requirements

22 of subparagraph (A).

23 ‘‘(D) DEFINITIONS.—For purposes of this

24 paragraph—
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1 ‘‘(i) FINANCIAL INSTITUTION.—The

2 term ‘financial institution’ has the mean3 ing given to such term by section

4 469A(d)(1).

5 ‘‘(ii) ACCOUNT.—The term ‘account’

6 means a demand deposit account, checking

7 or negotiable withdrawal order account,

8 savings account, time deposit account, or

9 money-market mutual fund account.’’.

10 SEC. 2373. ENFORCEMENT OF ORDERS AGAINST PATERNAL

11 OR MATERNAL GRANDPARENTS IN CASES OF

12 MINOR PARENTS.

13 Section 466(a) (42 U.S.C. 666(a)), as amended by

14 sections 2315, 2317(a), 2323, 2365, 2369, and 2372 of

15 this Act, is amended by inserting after paragraph (17) the

16 following new paragraph:

17 ‘‘(18) ENFORCEMENT OF ORDERS AGAINST PA18 TERNAL OR MATERNAL GRANDPARENTS.—Proce19 dures under which, at the State’s option, any child

20 support order enforced under this part with respect

21 to a child of minor parents, if the custodial parent

22 of such child is receiving assistance under the State

23 program under part A, shall be enforceable, jointly

24 and severally, against the parents of the noncusto25 dial parent of such child.’’.
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1 SEC. 2374. NONDISCHARGEABILITY IN BANKRUPTCY OF

2 CERTAIN DEBTS FOR THE SUPPORT OF A

3 CHILD.

4 (a) AMENDMENT TO TITLE 11 OF THE UNITED

5 STATES CODE.—Section 523(a) of title 11, United States

6 Code, is amended—

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

8 (16);

9 (2) by striking the period at the end of para10 graph (17) and inserting ‘‘; or’’;

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

12 ‘‘(18) owed under State law to a State or mu13 nicipality that is—

14 ‘‘(A) in the nature of support, and

15 ‘‘(B) enforceable under part D of title IV

16 of the Social Security Act (42 U.S.C. 601 et

17 seq.).’’, and

18 (3) in paragraph (5), by striking ‘‘section

19 402(a)(26)’’ and inserting ‘‘section 408(a)(4)’’.

20 (b) AMENDMENT TO THE SOCIAL SECURITY ACT.—

21 Section 456(b) (42 U.S.C. 656(b)) is amended to read as

22 follows:

23 ‘‘(b) NONDISCHARGEABILITY.—A debt (as defined in

24 section 101 of title 11 of the United States Code) owed

25 under State law to a State (as defined in such section)

26 or municipality (as defined in such section) that is in the
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1 nature of support and that is enforceable under this part

2 is not released by a discharge in bankruptcy under title

3 11 of the United States Code.’’.

4 (c) APPLICATION OF AMENDMENTS.—The amend5 ments made by this section shall apply only with respect

6 to cases commenced under title 11 of the United States

7 Code after the date of the enactment of this Act.

8 Subchapter H—Medical Support

9 SEC. 2376. CORRECTION TO ERISA DEFINITION OF MEDI10 CAL CHILD SUPPORT ORDER.

11 (a) IN GENERAL.—Section 609(a)(2)(B) of the Em12 ployee Retirement Income Security Act of 1974 (29

13 U.S.C. 1169(a)(2)(B)) is amended—

14 (1) by striking ‘‘issued by a court of competent

15 jurisdiction’’;

16 (2) by striking the period at the end of clause

17 (ii) and inserting a comma; and

18 (3) by adding, after and below clause (ii), the

19 following:

20 ‘‘if such judgment, decree, or order (I) is issued

21 by a court of competent jurisdiction or (II) is

22 issued through an administrative process estab23 lished under State law and has the force and ef24 fect of law under applicable State law.’’.

25 (b) EFFECTIVE DATE.—
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1 (1) IN GENERAL.—The amendments made by

2 this section shall take effect on the date of the en3 actment of this Act.

4 (2) PLAN AMENDMENTS NOT REQUIRED UNTIL

5 JANUARY 1, 1997.—Any amendment to a plan re6 quired to be made by an amendment made by this

7 section shall not be required to be made before the

8 1st plan year beginning on or after January 1,

9 1997, if—

10 (A) during the period after the date before

11 the date of the enactment of this Act and be12 fore such 1st plan year, the plan is operated in

13 accordance with the requirements of the amend14 ments made by this section; and

15 (B) such plan amendment applies retro16 actively to the period after the date before the

17 date of the enactment of this Act and before

18 such 1st plan year.

19 A plan shall not be treated as failing to be operated

20 in accordance with the provisions of the plan merely

21 because it operates in accordance with this para22 graph.
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1 SEC. 2377. ENFORCEMENT OF ORDERS FOR HEALTH CARE

2 COVERAGE.

3 Section 466(a) (42 U.S.C. 666(a)), as amended by

4 sections 2315, 2317(a), 2323, 2365, 2369, 2372, and

5 2373 of this Act, is amended by inserting after paragraph

6 (18) the following new paragraph:

7 ‘‘(19) HEALTH CARE COVERAGE.—Procedures

8 under which all child support orders enforced pursu9 ant to this part shall include a provision for the

10 health care coverage of the child, and in the case in

11 which a noncustodial parent provides such coverage

12 and changes employment, and the new employer pro13 vides health care coverage, the State agency shall

14 transfer notice of the provision to the employer,

15 which notice shall operate to enroll the child in the

16 noncustodial parent’s health plan, unless the non17 custodial parent contests the notice.’’.

18 Subchapter I—Enhancing Responsibility and

19 Opportunity for Non-Residential Parents

20 SEC. 2381. GRANTS TO STATES FOR ACCESS AND VISITA21 TION PROGRAMS.

22 Part D of title IV (42 U.S.C. 651–669), as amended

23 by section 2353 of this Act, is amended by adding at the

24 end the following new section:
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1 ‘‘SEC. 469B. GRANTS TO STATES FOR ACCESS AND VISITA2 TION PROGRAMS.

3 ‘‘(a) IN GENERAL.—The Administration for Children

4 and Families shall make grants under this section to en5 able States to establish and administer programs to sup6 port and facilitate noncustodial parents’ access to and visi7 tation of their children, by means of activities including

8 mediation (both voluntary and mandatory), counseling,

9 education, development of parenting plans, visitation en10 forcement (including monitoring, supervision and neutral

11 drop-off and pickup), and development of guidelines for

12 visitation and alternative custody arrangements.

13 ‘‘(b) AMOUNT OF GRANT.—The amount of the grant

14 to be made to a State under this section for a fiscal year

15 (beginning with fiscal year 1998) shall be an amount equal

16 to the lesser of—

17 ‘‘(1) 90 percent of State expenditures during

18 the fiscal year for activities described in subsection

19 (a); or

20 ‘‘(2) the allotment of the State under sub21 section (c) for the fiscal year.

22 ‘‘(c) ALLOTMENTS TO STATES.—

23 ‘‘(1) IN GENERAL.—The allotment of a State

24 for a fiscal year is the amount that bears the same

25 ratio to $10,000,000 for grants under this section

26 for the fiscal year as the number of children in the
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1 State living with only 1 biological parent bears to

2 the total number of such children in all States.

3 ‘‘(2) MINIMUM ALLOTMENT.—The Administra4 tion for Children and Families shall adjust allot5 ments to States under paragraph (1) as necessary to

6 ensure that no State is allotted less than—

7 ‘‘(A) $50,000 for fiscal year 1998 or 1999

8 or

9 ‘‘(B) $100,000 for any succeeding fiscal

10 year.

11 ‘‘(d) NO SUPPLANTATION OF STATE EXPENDITURES

12 FOR SIMILAR ACTIVITIES.—A State to which a grant is

13 made under this section may not use the grant to supplant

14 expenditures by the State for activities specified in sub15 section (a), but shall use the grant to supplement such

16 expenditures at a level at least equal to the level of such

17 expenditures for fiscal year 1995.

18 ‘‘(e) STATE ADMINISTRATION.—Each State to which

19 a grant is made under this section—

20 ‘‘(1) may administer State programs funded

21 with the grant, directly or through grants to or con22 tracts with courts, local public agencies, or nonprofit

23 private entities;

24 ‘‘(2) shall not be required to operate such pro25 grams on a statewide basis; and
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1 ‘‘(3) shall monitor, evaluate, and report on such

2 programs in accordance with regulations prescribed

3 by the Secretary.’’.

4 Subchapter J—Effective Dates and

5 Conforming Amendments

6 SEC. 2391. EFFECTIVE DATES AND CONFORMING AMEND7 MENTS.

8 (a) IN GENERAL.—Except as otherwise specifically

9 provided (but subject to subsections (b) and (c))—

10 (1) the provisions of this chapter requiring the

11 enactment or amendment of State laws under sec12 tion 466 of the Social Security Act, or revision of

13 State plans under section 454 of such Act, shall be

14 effective with respect to periods beginning on and

15 after October 1, 1996; and

16 (2) all other provisions of this chapter shall be17 come effective upon the date of the enactment of

18 this Act.

19 (b) GRACE PERIOD FOR STATE LAW CHANGES.—The

20 provisions of this chapter shall become effective with re21 spect to a State on the later of—

22 (1) the date specified in this chapter, or

23 (2) the effective date of laws enacted by the leg24 islature of such State implementing such provisions,
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1 but in no event later than the 1st day of the 1st calendar

2 quarter beginning after the close of the 1st regular session

3 of the State legislature that begins after the date of the

4 enactment of this Act. For purposes of the previous sen5 tence, in the case of a State that has a 2-year legislative

6 session, each year of such session shall be deemed to be

7 a separate regular session of the State legislature.

8 (c) GRACE PERIOD FOR STATE CONSTITUTIONAL

9 AMENDMENT.—A State shall not be found out of compli10 ance with any requirement enacted by this chapter if the

11 State is unable to so comply without amending the State

12 constitution until the earlier of—

13 (1) 1 year after the effective date of the nec14 essary State constitutional amendment; or

15 (2) 5 years after the date of the enactment of

16 this Act.

17 (d) CONFORMING AMENDMENTS.—

18 (1) The following provisions are amended by

19 striking ‘‘absent’’ each place it appears and inserting

20 ‘‘noncustodial’’:

21 (A) Section 451 (42 U.S.C. 651).

22 (B) Subsections (a)(1), (a)(8), (a)(10)(E),

23 (a)(10)(F), (f), and (h) of section 452 (42

24 U.S.C. 652).

25 (C) Section 453(f) (42 U.S.C. 653(f)).
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1 (D) Paragraphs (8), (13), and (21)(A) of

2 section 454 (42 U.S.C. 654).

3 (E) Section 455(e)(1) (42 U.S.C.

4 655(e)(1)).

5 (F) Section 458(a) (42 U.S.C. 658(a)).

6 (G) Subsections (a), (b), and (c) of section

7 463 (42 U.S.C. 663).

8 (H) Subsections (a)(3)(A), (a)(3)(C),

9 (a)(6), and (a)(8)(B)(ii), the last sentence of

10 subsection (a), and subsections (b)(1),

11 (b)(3)(B), (b)(3)(B)(i), (b)(6)(A)(i), (b)(8),

12 (b)(9), and (e) of section 466 (42 U.S.C. 666).

13 (2) The following provisions are amended by

14 striking ‘‘an absent’’ each place it appears and in15 serting ‘‘a noncustodial’’:

16 (A) Paragraphs (2) and (3) of section

17 453(c) (42 U.S.C. 653(c)).

18 (B) Subparagraphs (B) and (C) of section

19 454(9) (42 U.S.C. 654(9)).

20 (C) Section 456(a)(3) (42 U.S.C.

21 656(a)(3)).

22 (D) Subsections (a)(3)(A), (a)(6),

23 (a)(8)(B)(i), (b)(3)(A), and (b)(3)(B) of section

24 466 (42 U.S.C. 666).
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1 (E) Paragraphs (2) and (4) of section

2 469(b) (42 U.S.C. 669(b)).

3 CHAPTER 4—RESTRICTING WELFARE AND

4 PUBLIC BENEFITS FOR ALIENS

5 SEC. 2400. STATEMENTS OF NATIONAL POLICY CONCERN6 ING WELFARE AND IMMIGRATION.

7 The Congress makes the following statements con8 cerning national policy with respect to welfare and immi9 gration:

10 (1) Self-sufficiency has been a basic principle of

11 United States immigration law since this country’s

12 earliest immigration statutes.

13 (2) It continues to be the immigration policy of

14 the United States that—

15 (A) aliens within the Nation’s borders not

16 depend on public resources to meet their needs,

17 but rather rely on their own capabilities and the

18 resources of their families, their sponsors, and

19 private organizations, and

20 (B) the availability of public benefits not

21 constitute an incentive for immigration to the

22 United States.

23 (3) Despite the principle of self-sufficiency,

24 aliens have been applying for and receiving public
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1 benefits from Federal, State, and local governments

2 at increasing rates.

3 (4) Current eligibility rules for public assistance

4 and unenforceable financial support agreements have

5 proved wholly incapable of assuring that individual

6 aliens not burden the public benefits system.

7 (5) It is a compelling government interest to

8 enact new rules for eligibility and sponsorship agree9 ments in order to assure that aliens be self-reliant

10 in accordance with national immigration policy.

11 (6) It is a compelling government interest to re12 move the incentive for illegal immigration provided

13 by the availability of public benefits.

14 (7) With respect to the State authority to make

15 determinations concerning the eligibility of qualified

16 aliens for public benefits in this chapter, a State

17 that chooses to follow the Federal classification in

18 determining the eligibility of such aliens for public

19 assistance shall be considered to have chosen the

20 least restrictive means available for achieving the

21 compelling governmental interest of assuring that

22 aliens be self-reliant in accordance with national im23 migration policy.
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1 Subchapter A—Eligibility for Federal

2 Benefits

3 SEC. 2401. ALIENS WHO ARE NOT QUALIFIED ALIENS INELI4 GIBLE FOR FEDERAL PUBLIC BENEFITS.

5 (a) IN GENERAL.—Notwithstanding any other provi6 sion of law and except as provided in subsection (b), an

7 alien who is not a qualified alien (as defined in section

8 2431) is not eligible for any Federal public benefit (as de9 fined in subsection (c)).

10 (b) EXCEPTIONS.—

11 (1) Subsection (a) shall not apply with respect

12 to the following Federal public benefits:

13 (A) Emergency medical services under title

14 XV or XIX of the Social Security Act.

15 (B) Short-term, non-cash, in-kind emer16 gency disaster relief.

17 (C)(i) Public health assistance for immuni18 zations.

19 (ii) Public health assistance for testing and

20 treatment of a communicable disease if the Sec21 retary of Health and Human Services deter22 mines that it is necessary to prevent the spread

23 of such disease.

24 (D) Programs, services, or assistance (such

25 as soup kitchens, crisis counseling and interven-
565

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1 tion, and short-term shelter) specified by the

2 Attorney General, in the Attorney General’s

3 sole and unreviewable discretion after consulta4 tion with appropriate Federal agencies and de5 partments, which (i) deliver in-kind services at

6 the community level, including through public

7 or private nonprofit agencies; (ii) do not condi8 tion the provision of assistance, the amount of

9 assistance provided, or the cost of assistance

10 provided on the individual recipient’s income or

11 resources; and (iii) are necessary for the protec12 tion of life or safety.

13 (E) Programs for housing or community

14 development assistance or financial assistance

15 administered by the Secretary of Housing and

16 Urban Development, any program under title V

17 of the Housing Act of 1949, or any assistance

18 under section 306C of the Consolidated Farm

19 and Rural Development Act, to the extent that

20 the alien is receiving such a benefit on the date

21 of the enactment of this Act.

22 (2) Subsection (a) shall not apply to any benefit

23 payable under title II of the Social Security Act to

24 an alien who is lawfully present in the United States

25 as determined by the Attorney General, to any bene-
566

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1 fit if nonpayment of such benefit would contravene

2 an international agreement described in section 233

3 of the Social Security Act, to any benefit if nonpay4 ment would be contrary to section 202(t) of the So5 cial Security Act, or to any benefit payable under

6 title II of the Social Security Act to which entitle7 ment is based on an application filed in or before the

8 month in which this Act becomes law.

9 (c) FEDERAL PUBLIC BENEFIT DEFINED.—

10 (1) Except as provided in paragraph (2), for

11 purposes of this chapter the term ‘‘Federal public

12 benefit’’ means—

13 (A) any grant, contract, loan, professional

14 license, or commercial license provided by an

15 agency of the United States or by appropriated

16 funds of the United States; and

17 (B) any retirement, welfare, health, dis18 ability, public or assisted housing, postsecond19 ary education, food assistance, unemployment

20 benefit, or any other similar benefit for which

21 payments or assistance are provided to an indi22 vidual, household, or family eligibility unit by

23 an agency of the United States or by appro24 priated funds of the United States.

25 (2) Such term shall not apply—
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1 (A) to any contract, professional license, or

2 commercial license for a nonimmigrant whose

3 visa for entry is related to such employment in

4 the United States; or

5 (B) with respect to benefits for an alien

6 who as a work authorized nonimmigrant or as

7 an alien lawfully admitted for permanent resi8 dence under the Immigration and Nationality

9 Act qualified for such benefits and for whom

10 the United States under reciprocal treaty agree11 ments is required to pay benefits, as determined

12 by the Attorney General, after consultation with

13 the Secretary of State.

14 SEC. 2402. LIMITED ELIGIBILITY OF QUALIFIED ALIENS

15 FOR CERTAIN FEDERAL PROGRAMS.

16 (a) LIMITED ELIGIBILITY FOR SPECIFIED FEDERAL

17 PROGRAMS.—

18 (1) IN GENERAL.—Notwithstanding any other

19 provision of law and except as provided in paragraph

20 (2), an alien who is a qualified alien (as defined in

21 section 2431) is not eligible for any specified Fed22 eral program (as defined in paragraph (3)).

23 (2) EXCEPTIONS.—
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1 (A) TIME-LIMITED EXCEPTION FOR REFU2 GEES AND ASYLEES.—Paragraph (1) shall not

3 apply to an alien until 5 years after the date—

4 (i) an alien is admitted to the United

5 States as a refugee under section 207 of

6 the Immigration and Nationality Act;

7 (ii) an alien is granted asylum under

8 section 208 of such Act; or

9 (iii) an alien’s deportation is withheld

10 under section 243(h) of such Act.

11 (B) CERTAIN PERMANENT RESIDENT

12 ALIENS.—Paragraph (1) shall not apply to an

13 alien who—

14 (i) is lawfully admitted to the United

15 States for permanent residence under the

16 Immigration and Nationality Act; and

17 (ii)(I) has worked 40 qualifying quar18 ters of coverage as defined under title II of

19 the Social Security Act or can be credited

20 with such qualifying quarters as provided

21 under section 435, and (II) did not receive

22 any Federal means-tested public benefit

23 (as defined in section 2403(c)) during any

24 such quarter.
569

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1 (C) VETERAN AND ACTIVE DUTY EXCEP2 TION.—Paragraph (1) shall not apply to an

3 alien who is lawfully residing in any State and

4 is—

5 (i) a veteran (as defined in section

6 101 of title 38, United States Code) with

7 a discharge characterized as an honorable

8 discharge and not on account of alienage,

9 (ii) on active duty (other than active

10 duty for training) in the Armed Forces of

11 the United States, or

12 (iii) the spouse or unmarried depend13 ent child of an individual described in

14 clause (i) or (ii).

15 (D) TRANSITION FOR ALIENS CURRENTLY

16 RECEIVING BENEFITS.—

17 (i) SSI.—

18 (I) IN GENERAL.—With respect

19 to the specified Federal program de20 scribed in paragraph (3)(A), during

21 the period beginning on the date of

22 the enactment of this Act and ending

23 on the date which is 1 year after such

24 date of enactment, the Commissioner

25 of Social Security shall redetermine
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1 the eligibility of any individual who is

2 receiving benefits under such program

3 as of the date of the enactment of this

4 Act and whose eligibility for such ben5 efits may terminate by reason of the

6 provisions of this subsection.

7 (II) REDETERMINATION CRI8 TERIA.—With respect to any redeter9 mination under subclause (I), the

10 Commissioner of Social Security shall

11 apply the eligibility criteria for new

12 applicants for benefits under such

13 program.

14 (III) GRANDFATHER PROVI15 SION.—The provisions of this sub16 section and the redetermination under

17 subclause (I), shall only apply with re18 spect to the benefits of an individual

19 described in subclause (I) for months

20 beginning on or after the date of the

21 redetermination with respect to such

22 individual.

23 (IV) NOTICE.—Not later than

24 January 1, 1997, the Commissioner of

25 Social Security shall notify an individ-
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1 ual described in subclause (I) of the

2 provisions of this clause.

3 (ii) FOOD STAMPS.—

4 (I) IN GENERAL.—With respect

5 to the specified Federal program de6 scribed in paragraph (3)(B), during

7 the period beginning on the date of

8 enactment of this Act and ending on

9 the date which is 1 year after the date

10 of enactment, the State agency shall,

11 at the time of the recertification, re12 certify the eligibility of any individual

13 who is receiving benefits under such

14 program as of the date of enactment

15 of this Act and whose eligibility for

16 such benefits may terminate by reason

17 of the provisions of this subsection.

18 (II) RECERTIFICATION CRI19 TERIA.—With respect to any recertifi20 cation under subclause (I), the State

21 agency shall apply the eligibility cri22 teria for applicants for benefits under

23 such program.

24 (III) GRANDFATHER PROVI25 SION.—The provisions of this sub-
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1 section and the recertification under

2 subclause (I) shall only apply with re3 spect to the eligibility of an alien for

4 a program for months beginning on or

5 after the date of recertification, if on

6 the date of enactment of this Act the

7 alien is lawfully residing in any State

8 and is receiving benefits under such

9 program on such date of enactment.

10 (3) SPECIFIED FEDERAL PROGRAM DEFINED.—

11 For purposes of this chapter, the term ‘‘specified

12 Federal program’’ means any of the following:

13 (A) SSI.—The supplemental security in14 come program under title XVI of the Social Se15 curity Act, including supplementary payments

16 pursuant to an agreement for Federal adminis17 tration under section 1616(a) of the Social Se18 curity Act and payments pursuant to an agree19 ment entered into under section 212(b) of Pub20 lic Law 93–66.

21 (B) FOOD STAMPS.—The food stamp pro22 gram as defined in section 3(h) of the Food

23 Stamp Act of 1977.

24 (b) LIMITED ELIGIBILITY FOR DESIGNATED FED25 ERAL PROGRAMS.—
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1 (1) IN GENERAL.—Notwithstanding any other

2 provision of law and except as provided in section

3 2403 and paragraph (2), a State is authorized to de4 termine the eligibility of an alien who is a qualified

5 alien (as defined in section 2431) for any designated

6 Federal program (as defined in paragraph (3)).

7 (2) EXCEPTIONS.—Qualified aliens under this

8 paragraph shall be eligible for any designated Fed9 eral program.

10 (A) TIME-LIMITED EXCEPTION FOR REFU11 GEES AND ASYLEES.—

12 (i) An alien who is admitted to the

13 United States as a refugee under section

14 207 of the Immigration and Nationality

15 Act until 5 years after the date of an

16 alien’s entry into the United States.

17 (ii) An alien who is granted asylum

18 under section 208 of such Act until 5 years

19 after the date of such grant of asylum.

20 (iii) An alien whose deportation is

21 being withheld under section 243(h) of

22 such Act until 5 years after such withhold23 ing.

24 (B) CERTAIN PERMANENT RESIDENT

25 ALIENS.—An alien who—
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1 (i) is lawfully admitted to the United

2 States for permanent residence under the

3 Immigration and Nationality Act; and

4 (ii)(I) has worked 40 qualifying quar5 ters of coverage as defined under title II of

6 the Social Security Act or can be credited

7 with such qualifying quarters as provided

8 under section 2435, and (II) did not re9 ceive any Federal means-tested public ben10 efit (as defined in section 2403(c)) during

11 any such quarter.

12 (C) VETERAN AND ACTIVE DUTY EXCEP13 TION.—An alien who is lawfully residing in any

14 State and is—

15 (i) a veteran (as defined in section

16 101 of title 38, United States Code) with

17 a discharge characterized as an honorable

18 discharge and not on account of alienage,

19 (ii) on active duty (other than active

20 duty for training) in the Armed Forces of

21 the United States, or

22 (iii) the spouse or unmarried depend23 ent child of an individual described in

24 clause (i) or (ii).
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1 (D) TRANSITION FOR THOSE CURRENTLY

2 RECEIVING BENEFITS.—An alien who on the

3 date of the enactment of this Act is lawfully re4 siding in any State and is receiving benefits

5 under such program on the date of the enact6 ment of this Act shall continue to be eligible to

7 receive such benefits until January 1, 1997.

8 (3) DESIGNATED FEDERAL PROGRAM DE9 FINED.—For purposes of this chapter, the term

10 ‘‘designated Federal program’’ means any of the fol11 lowing:

12 (A) TEMPORARY ASSISTANCE FOR NEEDY

13 FAMILIES.—The program of block grants to

14 States for temporary assistance for needy fami15 lies under part A of title IV of the Social Secu16 rity Act.

17 (B) SOCIAL SERVICES BLOCK GRANT.—

18 The program of block grants to States for so19 cial services under title XX of the Social Secu20 rity Act.

21 (C) MEDICAID.—The program of medical

22 assistance under title XV and XIX of the Social

23 Security Act.
576

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1 SEC. 2403. FIVE-YEAR LIMITED ELIGIBILITY OF QUALIFIED

2 ALIENS FOR FEDERAL MEANS-TESTED PUB3 LIC BENEFIT.

4 (a) IN GENERAL.—Notwithstanding any other provi5 sion of law and except as provided in subsection (b), an

6 alien who is a qualified alien (as defined in section 2431)

7 and who enters the United States on or after the date

8 of the enactment of this Act is not eligible for any Federal

9 means-tested public benefit (as defined in subsection (c))

10 for a period of five years beginning on the date of the

11 alien’s entry into the United States with a status within

12 the meaning of the term ‘‘qualified alien’’.

13 (b) EXCEPTIONS.—The limitation under subsection

14 (a) shall not apply to the following aliens:

15 (1) EXCEPTION FOR REFUGEES AND

16 ASYLEES.—

17 (A) An alien who is admitted to the United

18 States as a refugee under section 207 of the

19 Immigration and Nationality Act.

20 (B) An alien who is granted asylum under

21 section 208 of such Act.

22 (C) An alien whose deportation is being

23 withheld under section 243(h) of such Act.

24 (2) VETERAN AND ACTIVE DUTY EXCEPTION.—

25 An alien who is lawfully residing in any State and

26 is—
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•S 1956 PCS

1 (A) a veteran (as defined in section 101 of

2 title 38, United States Code) with a discharge

3 characterized as an honorable discharge and not

4 on account of alienage,

5 (B) on active duty (other than active duty

6 for training) in the Armed Forces of the United

7 States, or

8 (C) the spouse or unmarried dependent

9 child of an individual described in subparagraph

10 (A) or (B).

11 (c) FEDERAL MEANS-TESTED PUBLIC BENEFIT DE12 FINED.—

13 (1) Except as provided in paragraph (2), for

14 purposes of this chapter, the term ‘‘Federal means15 tested public benefit’’ means a public benefit (includ16 ing cash, medical, housing, and food assistance and

17 social services) of the Federal Government in which

18 the eligibility of an individual, household, or family

19 eligibility unit for benefits, or the amount of such

20 benefits, or both are determined on the basis of in21 come, resources, or financial need of the individual,

22 household, or unit.

23 (2) Such term does not include the following:

24 (A) Emergency medical services under title

25 XV or XIX of the Social Security Act.
578

•S 1956 PCS

1 (B) Short-term, non-cash, in-kind emer2 gency disaster relief.

3 (C) Assistance or benefits under the Na4 tional School Lunch Act.

5 (D) Assistance or benefits under the Child

6 Nutrition Act of 1966.

7 (E)(i) Public health assistance for immuni8 zations.

9 (ii) Public health assistance for testing and

10 treatment of a communicable disease if the Sec11 retary of Health and Human Services deter12 mines that it is necessary to prevent the spread

13 of such disease.

14 (F) Payments for foster care and adoption

15 assistance under part E of title IV of the Social

16 Security Act for a child who would, in the ab17 sence of subsection (a), be eligible to have such

18 payments made on the child’s behalf under such

19 part, but only if the foster or adoptive parent

20 or parents of such child are not described under

21 subsection (a).

22 (G) Programs, services, or assistance (such

23 as soup kitchens, crisis counseling and interven24 tion, and short-term shelter) specified by the

25 Attorney General, in the Attorney General’s
579

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1 sole and unreviewable discretion after consulta2 tion with appropriate Federal agencies and de3 partments, which (i) deliver in-kind services at

4 the community level, including through public

5 or private nonprofit agencies; (ii) do not condi6 tion the provision of assistance, the amount of

7 assistance provided, or the cost of assistance

8 provided on the individual recipient’s income or

9 resources; and (iii) are necessary for the protec10 tion of life or safety.

11 (H) Programs of student assistance under

12 titles IV, V, IX, and X of the Higher Education

13 Act of 1965.

14 (I) Means-tested programs under the Ele15 mentary and Secondary Education Act of 1965.

16 SEC. 2404. NOTIFICATION AND INFORMATION REPORTING.

17 (a) NOTIFICATION.—Each Federal agency that ad18 ministers a program to which section 2401, 2402, or 2403

19 applies shall, directly or through the States, post informa20 tion and provide general notification to the public and to

21 program recipients of the changes regarding eligibility for

22 any such program pursuant to this subchapter.

23 (b) INFORMATION REPORTING UNDER TITLE IV OF

24 THE SOCIAL SECURITY ACT.—Part A of title IV of the

25 Social Security Act, as amended by section 2103(a) of this
580

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1 Act, is amended by inserting the following new section

2 after section 411:

3 ‘‘SEC. 411A. STATE REQUIRED TO PROVIDE CERTAIN INFOR4 MATION.

5 ‘‘Each State to which a grant is made under section

6 403 shall, at least 4 times annually and upon request of

7 the Immigration and Naturalization Service, furnish the

8 Immigration and Naturalization Service with the name

9 and address of, and other identifying information on, any

10 individual who the State knows is unlawfully in the United

11 States.’’.

12 (c) SSI.—Section 1631(e) of such Act (42 U.S.C.

13 1383(e)) is amended—

14 (1) by redesignating the paragraphs (6) and (7)

15 inserted by sections 206(d)(2) and 206(f)(1) of the

16 Social Security Independence and Programs Im17 provement Act of 1994 (Public Law 103–296; 108

18 Stat. 1514, 1515) as paragraphs (7) and (8), re19 spectively; and

20 (2) by adding at the end the following new

21 paragraph:

22 ‘‘(9) Notwithstanding any other provision of law, the

23 Commissioner shall, at least 4 times annually and upon

24 request of the Immigration and Naturalization Service

25 (hereafter in this paragraph referred to as the ‘Service’),
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•S 1956 PCS

1 furnish the Service with the name and address of, and

2 other identifying information on, any individual who the

3 Commissioner knows is unlawfully in the United States,

4 and shall ensure that each agreement entered into under

5 section 1616(a) with a State provides that the State shall

6 furnish such information at such times with respect to any

7 individual who the State knows is unlawfully in the United

8 States.’’.

9 (d) INFORMATION REPORTING FOR HOUSING PRO10 GRAMS.—Title I of the United States Housing Act of 1937

11 (42 U.S.C. 1437 et seq.) is amended by adding at the end

12 the following new section:

13 ‘‘SEC. 27. PROVISION OF INFORMATION TO LAW ENFORCE14 MENT AND OTHER AGENCIES.

15 ‘‘Notwithstanding any other provision of law, the Sec16 retary shall, at least 4 times annually and upon request

17 of the Immigration and Naturalization Service (hereafter

18 in this section referred to as the ‘Service’), furnish the

19 Service with the name and address of, and other identify20 ing information on, any individual who the Secretary

21 knows is unlawfully in the United States, and shall ensure

22 that each contract for assistance entered into under sec23 tion 6 or 8 of this Act with a public housing agency pro24 vides that the public housing agency shall furnish such

25 information at such times with respect to any individual
582

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1 who the public housing agency knows is unlawfully in the

2 United States.’’.

3 Subchapter B—Eligibility for State and Local

4 Public Benefits Programs

5 SEC. 2411. ALIENS WHO ARE NOT QUALIFIED ALIENS OR

6 NONIMMIGRANTS INELIGIBLE FOR STATE

7 AND LOCAL PUBLIC BENEFITS.

8 (a) IN GENERAL.—Notwithstanding any other provi9 sion of law and except as provided in subsections (b) and

10 (d), an alien who is not—

11 (1) a qualified alien (as defined in section

12 2431),

13 (2) a nonimmigrant under the Immigration and

14 Nationality Act, or

15 (3) an alien who is paroled into the United

16 States under section 212(d)(5) of such Act for less

17 than one year,

18 is not eligible for any State or local public benefit (as de19 fined in subsection (c)).

20 (b) EXCEPTIONS.—Subsection (a) shall not apply

21 with respect to the following State or local public benefits:

22 (1) Emergency medical services under title XV

23 or XIX of the Social Security Act.

24 (2) Short-term, non-cash, in-kind emergency

25 disaster relief.
583

•S 1956 PCS

1 (3)(A) Public health assistance for immuniza2 tions.

3 (B) Public health assistance for testing and

4 treatment of a communicable disease if the Sec5 retary of Health and Human Services determines

6 that it is necessary to prevent the spread of such

7 disease.

8 (4) Programs, services, or assistance (such as

9 soup kitchens, crisis counseling and intervention,

10 and short-term shelter) specified by the Attorney

11 General, in the Attorney General’s sole and

12 unreviewable discretion after consultation with ap13 propriate Federal agencies and departments, which

14 (A) deliver in-kind services at the community level,

15 including through public or private nonprofit agen16 cies; (B) do not condition the provision of assistance,

17 the amount of assistance provided, or the cost of as18 sistance provided on the individual recipient’s in19 come or resources; and (C) are necessary for the

20 protection of life or safety.

21 (c) STATE OR LOCAL PUBLIC BENEFIT DEFINED.—

22 (1) Except as provided in paragraph (2), for

23 purposes of this subchapter the term ‘‘State or local

24 public benefit’’ means—
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•S 1956 PCS

1 (A) any grant, contract, loan, professional

2 license, or commercial license provided by an

3 agency of a State or local government or by ap4 propriated funds of a State or local govern5 ment; and

6 (B) any retirement, welfare, health, dis7 ability, public or assisted housing, postsecond8 ary education, food assistance, unemployment

9 benefit, or any other similar benefit for which

10 payments or assistance are provided to an indi11 vidual, household, or family eligibility unit by

12 an agency of a State or local government or by

13 appropriated funds of a State or local govern14 ment.

15 (2) Such term shall not apply—

16 (A) to any contract, professional license, or

17 commercial license for a nonimmigrant whose

18 visa for entry is related to such employment in

19 the United States; or

20 (B) with respect to benefits for an alien

21 who as a work authorized nonimmigrant or as

22 an alien lawfully admitted for permanent resi23 dence under the Immigration and Nationality

24 Act qualified for such benefits and for whom

25 the United States under reciprocal treaty agree-
585

•S 1956 PCS

1 ments is required to pay benefits, as determined

2 by the Secretary of State, after consultation

3 with the Attorney General.

4 (d) STATE AUTHORITY TO PROVIDE FOR ELIGI5 BILITY OF ILLEGAL ALIENS FOR STATE AND LOCAL PUB6 LIC BENEFITS.—A State may provide that an alien who

7 is not lawfully present in the United States is eligible for

8 any State or local public benefit for which such alien would

9 otherwise be ineligible under subsection (a) only through

10 the enactment of a State law after the date of the enact11 ment of this Act which affirmatively provides for such eli12 gibility.

13 SEC. 2412. STATE AUTHORITY TO LIMIT ELIGIBILITY OF

14 QUALIFIED ALIENS FOR STATE PUBLIC BENE15 FITS.

16 (a) IN GENERAL.—Notwithstanding any other provi17 sion of law and except as provided in subsection (b), a

18 State is authorized to determine the eligibility for any

19 State public benefits (as defined in subsection (c) of an

20 alien who is a qualified alien (as defined in section 2431),

21 a nonimmigrant under the Immigration and Nationality

22 Act, or an alien who is paroled into the United States

23 under section 212(d)(5) of such Act for less than one year.

24 (b) EXCEPTIONS.—Qualified aliens under this sub25 section shall be eligible for any State public benefits.
586

•S 1956 PCS

1 (1) TIME-LIMITED EXCEPTION FOR REFUGEES

2 AND ASYLEES.—

3 (A) An alien who is admitted to the United

4 States as a refugee under section 207 of the

5 Immigration and Nationality Act until 5 years

6 after the date of an alien’s entry into the Unit7 ed States.

8 (B) An alien who is granted asylum under

9 section 208 of such Act until 5 years after the

10 date of such grant of asylum.

11 (C) An alien whose deportation is being

12 withheld under section 243(h) of such Act until

13 5 years after such withholding.

14 (2) CERTAIN PERMANENT RESIDENT ALIENS.—

15 An alien who—

16 (A) is lawfully admitted to the United

17 States for permanent residence under the Im18 migration and Nationality Act; and

19 (B)(i) has worked 40 qualifying quarters

20 of coverage as defined under title II of the So21 cial Security Act or can be credited with such

22 qualifying quarters as provided under section

23 2435, and (ii) did not receive any Federal

24 means-tested public benefit (as defined in sec25 tion 2403(c)) during any such quarter.
587

•S 1956 PCS

1 (3) VETERAN AND ACTIVE DUTY EXCEPTION.—

2 An alien who is lawfully residing in any State and

3 is—

4 (A) a veteran (as defined in section 101 of

5 title 38, United States Code) with a discharge

6 characterized as an honorable discharge and not

7 on account of alienage,

8 (B) on active duty (other than active duty

9 for training) in the Armed Forces of the United

10 States, or

11 (C) the spouse or unmarried dependent

12 child of an individual described in subparagraph

13 (A) or (B).

14 (4) TRANSITION FOR THOSE CURRENTLY RE15 CEIVING BENEFITS.—An alien who on the date of

16 the enactment of this Act is lawfully residing in any

17 State and is receiving benefits on the date of the en18 actment of this Act shall continue to be eligible to

19 receive such benefits until January 1, 1997.

20 (c) STATE PUBLIC BENEFITS DEFINED.—The term

21 ‘‘State public benefits’’ means any means-tested public

22 benefit of a State or political subdivision of a State under

23 which the State or political subdivision specifies the stand24 ards for eligibility, and does not include any Federal public

25 benefit.
588

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1 Subchapter C—Attribution of Income and

2 Affidavits of Support

3 SEC. 2421. FEDERAL ATTRIBUTION OF SPONSOR’S INCOME

4 AND RESOURCES TO ALIEN.

5 (a) IN GENERAL.—Notwithstanding any other provi6 sion of law, in determining the eligibility and the amount

7 of benefits of an alien for any Federal means-tested public

8 benefits program (as defined in section 2403(c)), the in9 come and resources of the alien shall be deemed to include

10 the following:

11 (1) The income and resources of any person

12 who executed an affidavit of support pursuant to

13 section 213A of the Immigration and Nationality

14 Act (as added by section 2423) on behalf of such

15 alien.

16 (2) The income and resources of the spouse (if

17 any) of the person.

18 (b) APPLICATION.—Subsection (a) shall apply with

19 respect to an alien until such time as the alien—

20 (1) achieves United States citizenship through

21 naturalization pursuant to chapter 2 of title III of

22 the Immigration and Nationality Act; or

23 (2)(A) has worked 40 qualifying quarters of

24 coverage as defined under title II of the Social Secu25 rity Act or can be credited with such qualifying
589

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1 quarters as provided under section 2435, and (B)

2 did not receive any Federal means-tested public ben3 efit (as defined in section 2403(c)) during any such

4 quarter.

5 (c) REVIEW OF INCOME AND RESOURCES OF ALIEN

6 UPON REAPPLICATION.—Whenever an alien is required to

7 reapply for benefits under any Federal means-tested pub8 lic benefits program, the applicable agency shall review the

9 income and resources attributed to the alien under sub10 section (a).

11 (d) APPLICATION.—

12 (1) If on the date of the enactment of this Act,

13 a Federal means-tested public benefits program at14 tributes a sponsor’s income and resources to an alien

15 in determining the alien’s eligibility and the amount

16 of benefits for an alien, this section shall apply to

17 any such determination beginning on the day after

18 the date of the enactment of this Act.

19 (2) If on the date of the enactment of this Act,

20 a Federal means-tested public benefits program does

21 not attribute a sponsor’s income and resources to an

22 alien in determining the alien’s eligibility and the

23 amount of benefits for an alien, this section shall

24 apply to any such determination beginning 180 days

25 after the date of the enactment of this Act.
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•S 1956 PCS

1 SEC. 2422. AUTHORITY FOR STATES TO PROVIDE FOR AT2 TRIBUTION OF SPONSORS INCOME AND RE3 SOURCES TO THE ALIEN WITH RESPECT TO

4 STATE PROGRAMS.

5 (a) OPTIONAL APPLICATION TO STATE PROGRAMS.—

6 Except as provided in subsection (b), in determining the

7 eligibility and the amount of benefits of an alien for any

8 State public benefits (as defined in section 2412(c)), the

9 State or political subdivision that offers the benefits is au10 thorized to provide that the income and resources of the

11 alien shall be deemed to include—

12 (1) the income and resources of any individual

13 who executed an affidavit of support pursuant to

14 section 213A of the Immigration and Nationality

15 Act (as added by section 2423) on behalf of such

16 alien, and

17 (2) the income and resources of the spouse (if

18 any) of the individual.

19 (b) EXCEPTIONS.—Subsection (a) shall not apply

20 with respect to the following State public benefits:

21 (1) Emergency medical services.

22 (2) Short-term, non-cash, in-kind emergency

23 disaster relief.

24 (3) Programs comparable to assistance or bene25 fits under the National School Lunch Act.
591

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1 (4) Programs comparable to assistance or bene2 fits under the Child Nutrition Act of 1966.

3 (5)(A) Public health assistance for immuniza4 tions.

5 (B) Public health assistance for testing and

6 treatment of a communicable disease if the appro7 priate chief State health official determines that it

8 is necessary to prevent the spread of such disease.

9 (6) Payments for foster care and adoption as10 sistance.

11 (7) Programs, services, or assistance (such as

12 soup kitchens, crisis counseling and intervention,

13 and short-term shelter) specified by the Attorney

14 General of a State, after consultation with appro15 priate agencies and departments, which (A) deliver

16 in-kind services at the community level, including

17 through public or private nonprofit agencies; (B) do

18 not condition the provision of assistance, the amount

19 of assistance provided, or the cost of assistance pro20 vided on the individual recipient’s income or re21 sources; and (C) are necessary for the protection of

22 life or safety.
592

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1 SEC. 2423. REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF

2 SUPPORT.

3 (a) IN GENERAL.—Title II of the Immigration and

4 Nationality Act is amended by inserting after section 213

5 the following new section:

6 ‘‘REQUIREMENTS FOR SPONSOR’S AFFIDAVIT OF SUPPORT

7 ‘‘SEC. 213A. (a) ENFORCEABILITY.—(1) No affidavit

8 of support may be accepted by the Attorney General or

9 by any consular officer to establish that an alien is not

10 excludable as a public charge under section 212(a)(4) un11 less such affidavit is executed as a contract—

12 ‘‘(A) which is legally enforceable against the

13 sponsor by the sponsored alien, the Federal Govern14 ment, and by any State (or any political subdivision

15 of such State) which provides any means-tested pub16 lic benefits program, but not later than 10 years

17 after the alien last receives any such benefit;

18 ‘‘(B) in which the sponsor agrees to financially

19 support the alien, so that the alien will not become

20 a public charge; and

21 ‘‘(C) in which the sponsor agrees to submit to

22 the jurisdiction of any Federal or State court for the

23 purpose of actions brought under subsection (e)(2).

24 ‘‘(2) A contract under paragraph (1) shall be enforce25 able with respect to benefits provided to the alien until
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1 such time as the alien achieves United States citizenship

2 through naturalization pursuant to chapter 2 of title III.

3 ‘‘(b) FORMS.—Not later than 90 days after the date

4 of enactment of this section, the Attorney General, in con5 sultation with the Secretary of State and the Secretary

6 of Health and Human Services, shall formulate an affida7 vit of support consistent with the provisions of this sec8 tion.

9 ‘‘(c) REMEDIES.—Remedies available to enforce an

10 affidavit of support under this section include any or all

11 of the remedies described in section 3201, 3203, 3204,

12 or 3205 of title 28, United States Code, as well as an

13 order for specific performance and payment of legal fees

14 and other costs of collection, and include corresponding

15 remedies available under State law. A Federal agency may

16 seek to collect amounts owed under this section in accord17 ance with the provisions of subchapter II of chapter 37

18 of title 31, United States Code.

19 ‘‘(d) NOTIFICATION OF CHANGE OF ADDRESS.—

20 ‘‘(1) IN GENERAL.—The sponsor shall notify

21 the Attorney General and the State in which the

22 sponsored alien is currently resident within 30 days

23 of any change of address of the sponsor during the

24 period specified in subsection (a)(2).
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1 ‘‘(2) PENALTY.—Any person subject to the re2 quirement of paragraph (1) who fails to satisfy such

3 requirement shall be subject to a civil penalty of—

4 ‘‘(A) not less than $250 or more than

5 $2,000, or

6 ‘‘(B) if such failure occurs with knowledge

7 that the alien has received any means-tested

8 public benefit, not less than $2,000 or more

9 than $5,000.

10 ‘‘(e) REIMBURSEMENT OF GOVERNMENT EX11 PENSES.—(1)(A) Upon notification that a sponsored alien

12 has received any benefit under any means-tested public

13 benefits program, the appropriate Federal, State, or local

14 official shall request reimbursement by the sponsor in the

15 amount of such assistance.

16 ‘‘(B) The Attorney General, in consultation with the

17 Secretary of Health and Human Services, shall prescribe

18 such regulations as may be necessary to carry out sub19 paragraph (A).

20 ‘‘(2) If within 45 days after requesting reimburse21 ment, the appropriate Federal, State, or local agency has

22 not received a response from the sponsor indicating a will23 ingness to commence payments, an action may be brought

24 against the sponsor pursuant to the affidavit of support.
595

•S 1956 PCS

1 ‘‘(3) If the sponsor fails to abide by the repayment

2 terms established by such agency, the agency may, within

3 60 days of such failure, bring an action against the spon4 sor pursuant to the affidavit of support.

5 ‘‘(4) No cause of action may be brought under this

6 subsection later than 10 years after the alien last received

7 any benefit under any means-tested public benefits pro8 gram.

9 ‘‘(5) If, pursuant to the terms of this subsection, a

10 Federal, State, or local agency requests reimbursement

11 from the sponsor in the amount of assistance provided,

12 or brings an action against the sponsor pursuant to the

13 affidavit of support, the appropriate agency may appoint

14 or hire an individual or other person to act on behalf of

15 such agency acting under the authority of law for purposes

16 of collecting any moneys owed. Nothing in this subsection

17 shall preclude any appropriate Federal, State, or local

18 agency from directly requesting reimbursement from a

19 sponsor for the amount of assistance provided, or from

20 bringing an action against a sponsor pursuant to an affi21 davit of support.

22 ‘‘(f) DEFINITIONS.—For the purposes of this sec23 tion—

24 ‘‘(1) SPONSOR.—The term ‘sponsor’ means an

25 individual who—
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1 ‘‘(A) is a citizen or national of the United

2 States or an alien who is lawfully admitted to

3 the United States for permanent residence;

4 ‘‘(B) is 18 years of age or over;

5 ‘‘(C) is domiciled in any of the 50 States

6 or the District of Columbia; and

7 ‘‘(D) is the person petitioning for the ad8 mission of the alien under section 204.

9 ‘‘(2) MEANS-TESTED PUBLIC BENEFITS PRO10 GRAM.—The term ‘means-tested public benefits pro11 gram’ means a program of public benefits (including

12 cash, medical, housing, and food assistance and so13 cial services) of the Federal Government or of a

14 State or political subdivision of a State in which the

15 eligibility of an individual, household, or family eligi16 bility unit for benefits under the program, or the

17 amount of such benefits, or both are determined on

18 the basis of income, resources, or financial need of

19 the individual, household, or unit.’’.

20 (b) CLERICAL AMENDMENT.—The table of contents

21 of such Act is amended by inserting after the item relating

22 to section 213 the following:

‘‘Sec. 213A. Requirements for sponsor’s affidavit of support.’’.

23 (c) EFFECTIVE DATE.—Subsection (a) of section

24 213A of the Immigration and Nationality Act, as inserted

25 by subsection (a) of this section, shall apply to affidavits
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1 of support executed on or after a date specified by the

2 Attorney General, which date shall be not earlier than 60

3 days (and not later than 90 days) after the date the Attor4 ney General formulates the form for such affidavits under

5 subsection (b) of such section.

6 (d) BENEFITS NOT SUBJECT TO REIMBURSE7 MENT.—Requirements for reimbursement by a sponsor for

8 benefits provided to a sponsored alien pursuant to an affi9 davit of support under section 213A of the Immigration

10 and Nationality Act shall not apply with respect to the

11 following:

12 (1) Emergency medical services under title XV

13 or XIX of the Social Security Act.

14 (2) Short-term, non-cash, in-kind emergency

15 disaster relief.

16 (3) Assistance or benefits under the National

17 School Lunch Act.

18 (4) Assistance or benefits under the Child Nu19 trition Act of 1966.

20 (5)(A) Public health assistance for immuniza21 tions.

22 (B) Public health assistance for testing and

23 treatment of a communicable disease if the Sec24 retary of Health and Human Services determines
598

•S 1956 PCS

1 that it is necessary to prevent the spread of such

2 disease.

3 (6) Payments for foster care and adoption as4 sistance under part E of title IV of the Social Secu5 rity Act for a child, but only if the foster or adoptive

6 parent or parents of such child are not otherwise in7 eligible pursuant to section 2403 of this Act.

8 (7) Programs, services, or assistance (such as

9 soup kitchens, crisis counseling and intervention,

10 and short-term shelter) specified by the Attorney

11 General, in the Attorney General’s sole and

12 unreviewable discretion after consultation with ap13 propriate Federal agencies and departments, which

14 (A) deliver in-kind services at the community level,

15 including through public or private nonprofit agen16 cies; (B) do not condition the provision of assistance,

17 the amount of assistance provided, or the cost of as18 sistance provided on the individual recipient’s in19 come or resources; and (C) are necessary for the

20 protection of life or safety.

21 (8) Programs of student assistance under titles

22 IV, V, IX, and X of the Higher Education Act of

23 1965.
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1 SEC. 2424. COSIGNATURE OF ALIEN STUDENT LOANS.

2 Section 484(b) of the Higher Education Act of 1965

3 (20 U.S.C. 1091(b)) is amended by adding at the end the

4 following new paragraph:

5 ‘‘(6) Notwithstanding sections 427(a)(2)(A),

6 428B(a), 428C(b)(4)(A), and 464(c)(1)(E), or any other

7 provision of this title, a student who is an alien lawfully

8 admitted for permanent residence under the Immigration

9 and Nationality Act shall not be eligible for a loan under

10 this title unless the loan is endorsed and cosigned by the

11 alien’s sponsor under section 213A of the Immigration

12 and Nationality Act or by another creditworthy individual

13 who is a United States citizen.’’.

14 Subchapter D—General Provisions

15 SEC. 2431. DEFINITIONS.

16 (a) IN GENERAL.—Except as otherwise provided in

17 this chapter, the terms used in this chapter have the same

18 meaning given such terms in section 101(a) of the Immi19 gration and Nationality Act.

20 (b) QUALIFIED ALIEN.—For purposes of this chap21 ter, the term ‘‘qualified alien’’ means an alien who, at the

22 time the alien applies for, receives, or attempts to receive

23 a Federal public benefit, is—

24 (1) an alien who is lawfully admitted for perma25 nent residence under the Immigration and National26 ity Act,
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1 (2) an alien who is granted asylum under sec2 tion 208 of such Act,

3 (3) a refugee who is admitted to the United

4 States under section 207 of such Act,

5 (4) an alien who is paroled into the United

6 States under section 212(d)(5) of such Act for a pe7 riod of at least 1 year,

8 (5) an alien whose deportation is being withheld

9 under section 243(h) of such Act, or

10 (6) an alien who is granted conditional entry

11 pursuant to section 203(a)(7) of such Act as in ef12 fect prior to April 1, 1980.

13 SEC. 2432. VERIFICATION OF ELIGIBILITY FOR FEDERAL

14 PUBLIC BENEFITS.

15 (a) IN GENERAL.—Not later than 18 months after

16 the date of the enactment of this Act, the Attorney Gen17 eral of the United States, after consultation with the Sec18 retary of Health and Human Services, shall promulgate

19 regulations requiring verification that a person applying

20 for a Federal public benefit (as defined in section

21 2401(c)), to which the limitation under section 2401 ap22 plies, is a qualified alien and is eligible to receive such

23 benefit. Such regulations shall, to the extent feasible, re24 quire that information requested and exchanged be similar
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1 in form and manner to information requested and ex2 changed under section 1137 of the Social Security Act.

3 (b) STATE COMPLIANCE.—Not later than 24 months

4 after the date the regulations described in subsection (a)

5 are adopted, a State that administers a program that pro6 vides a Federal public benefit shall have in effect a ver7 ification system that complies with the regulations.

8 (c) AUTHORIZATION OF APPROPRIATIONS.—There

9 are authorized to be appropriated such sums as may be

10 necessary to carry out the purpose of this section.

11 SEC. 2433. STATUTORY CONSTRUCTION.

12 (a) LIMITATION.—

13 (1) Nothing in this chapter may be construed

14 as an entitlement or a determination of an individ15 ual’s eligibility or fulfillment of the requisite require16 ments for any Federal, State, or local governmental

17 program, assistance, or benefits. For purposes of

18 this chapter, eligibility relates only to the general

19 issue of eligibility or ineligibility on the basis of

20 alienage.

21 (2) Nothing in this chapter may be construed

22 as addressing alien eligibility for a basic public edu23 cation as determined by the Supreme Court of the

24 United States under Plyler v. Doe (457 U.S.

25 202)(1982).
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1 (b) NOT APPLICABLE TO FOREIGN ASSISTANCE.—

2 This chapter does not apply to any Federal, State, or local

3 governmental program, assistance, or benefits provided to

4 an alien under any program of foreign assistance as deter5 mined by the Secretary of State in consultation with the

6 Attorney General.

7 (c) SEVERABILITY.—If any provision of this chapter

8 or the application of such provision to any person or cir9 cumstance is held to be unconstitutional, the remainder

10 of this chapter and the application of the provisions of

11 such to any person or circumstance shall not be affected

12 thereby.

13 SEC. 2434. COMMUNICATION BETWEEN STATE AND LOCAL

14 GOVERNMENT AGENCIES AND THE IMMIGRA15 TION AND NATURALIZATION SERVICE.

16 Notwithstanding any other provision of Federal,

17 State, or local law, no State or local government entity

18 may be prohibited, or in any way restricted, from sending

19 to or receiving from the Immigration and Naturalization

20 Service information regarding the immigration status,

21 lawful or unlawful, of an alien in the United States.

22 SEC. 2435. QUALIFYING QUARTERS.

23 For purposes of this chapter, in determining the

24 number of qualifying quarters of coverage under title II

25 of the Social Security Act an alien shall be credited with—
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1 (1) all of the qualifying quarters of coverage as

2 defined under title II of the Social Security Act

3 worked by a parent of such alien while the alien was

4 under age 18 if the parent did not receive any Fed5 eral means-tested public benefit (as defined in sec6 tion 2403(c)) during any such quarter, and

7 (2) all of the qualifying quarters worked by a

8 spouse of such alien during their marriage if the

9 spouse did not receive any Federal means-tested

10 public benefit (as defined in section 2403(c)) during

11 any such quarter and the alien remains married to

12 such spouse or such spouse is deceased.

13 Subchapter E—Conforming Amendments

14 Relating to Assisted Housing

15 SEC. 2441. CONFORMING AMENDMENTS RELATING TO AS16 SISTED HOUSING.

17 (a) LIMITATIONS ON ASSISTANCE.—Section 214 of

18 the Housing and Community Development Act of 1980

19 (42 U.S.C. 1436a) is amended—

20 (1) by striking ‘‘Secretary of Housing and

21 Urban Development’’ each place it appears and in22 serting ‘‘applicable Secretary’’;

23 (2) in subsection (b), by inserting after ‘‘Na24 tional Housing Act,’’ the following: ‘‘the direct loan

25 program under section 502 of the Housing Act of
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1 1949 or section 502(c)(5)(D), 504, 521(a)(2)(A), or

2 542 of such Act, subtitle A of title III of the Cran3 ston-Gonzalez National Affordable Housing Act,’’;

4 (3) in paragraphs (2) through (6) of subsection

5 (d), by striking ‘‘Secretary’’ each place it appears

6 and inserting ‘‘applicable Secretary’’;

7 (4) in subsection (d), in the matter following

8 paragraph (6), by striking ‘‘the term ‘Secretary’’’

9 and inserting ‘‘the term ‘applicable Secretary’’’; and

10 (5) by adding at the end the following new sub11 section:

12 ‘‘(h) For purposes of this section, the term ‘applicable

13 Secretary’ means—

14 ‘‘(1) the Secretary of Housing and Urban De15 velopment, with respect to financial assistance ad16 ministered by such Secretary and financial assist17 ance under subtitle A of title III of the Cranston18 Gonzalez National Affordable Housing Act; and

19 ‘‘(2) the Secretary of Agriculture, with respect

20 to financial assistance administered by such Sec21 retary.’’.

22 (b) CONFORMING AMENDMENTS.—Section 501(h) of

23 the Housing Act of 1949 (42 U.S.C. 1471(h)) is amend24 ed—

25 (1) by striking ‘‘(1)’’;
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1 (2) by striking ‘‘by the Secretary of Housing

2 and Urban Development’’; and

3 (3) by striking paragraph (2).

4 Subchapter F—Earned Income Credit Denied

5 to Unauthorized Employees

6 SEC. 2451. EARNED INCOME CREDIT DENIED TO INDIVID7 UALS NOT AUTHORIZED TO BE EMPLOYED IN

8 THE UNITED STATES.

9 (a) IN GENERAL.—Section 32(c)(1) of the Internal

10 Revenue Code of 1986 (relating to individuals eligible to

11 claim the earned income credit) is amended by adding at

12 the end the following new subparagraph:

13 ‘‘(F) IDENTIFICATION NUMBER REQUIRE14 MENT.—The term ‘eligible individual’ does not

15 include any individual who does not include on

16 the return of tax for the taxable year—

17 ‘‘(i) such individual’s taxpayer identi18 fication number, and

19 ‘‘(ii) if the individual is married (with20 in the meaning of section 7703), the tax21 payer identification number of such indi22 vidual’s spouse.’’.

23 (b) SPECIAL IDENTIFICATION NUMBER.—Section 32

24 of such Code is amended by adding at the end the follow25 ing new subsection:
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1 ‘‘(l) IDENTIFICATION NUMBERS.—Solely for pur2 poses of subsections (c)(1)(F) and (c)(3)(D), a taxpayer

3 identification number means a social security number is4 sued to an individual by the Social Security Administra5 tion (other than a social security number issued pursuant

6 to clause (II) (or that portion of clause (III) that relates

7 to clause (II)) of section 205(c)(2)(B)(i) of the Social Se8 curity Act).’’.

9 (c) EXTENSION OF PROCEDURES APPLICABLE TO

10 MATHEMATICAL OR CLERICAL ERRORS.—Section

11 6213(g)(2) of such Code (relating to the definition of

12 mathematical or clerical errors) is amended by striking

13 ‘‘and’ at the end of subparagraph (D), by striking the pe14 riod at the end of subparagraph (E) and inserting a

15 comma, and by inserting after subparagraph (E) the fol16 lowing new subparagraphs:

17 ‘‘(F) an omission of a correct taxpayer

18 identification number required under section 32

19 (relating to the earned income tax credit) to be

20 included on a return, and

21 ‘‘(G) an entry on a return claiming the

22 credit under section 32 with respect to net

23 earnings from self-employment described in sec24 tion 32(c)(2)(A) to the extent the tax imposed
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1 by section 1401 (relating to self-employment

2 tax) on such net earnings has not been paid.’’.

3 (d) EFFECTIVE DATE.—The amendments made by

4 this section shall apply to taxable years beginning after

5 December 31, 1995.

6 CHAPTER 5—REDUCTIONS IN FEDERAL

7 GOVERNMENT POSITIONS

8 SEC. 2501. REDUCTIONS.

9 (a) DEFINITIONS.—As used in this section:

10 (1) APPROPRIATE EFFECTIVE DATE.—The term

11 ‘‘appropriate effective date’’, used with respect to a

12 Department referred to in this section, means the

13 date on which all provisions of this Act (other than

14 chapter 2 of this subtitle) that the Department is re15 quired to carry out, and amendments and repeals

16 made by such Act to provisions of Federal law that

17 the Department is required to carry out, are effec18 tive.

19 (2) COVERED ACTIVITY.—The term ‘‘covered

20 activity’’, used with respect to a Department re21 ferred to in this section, means an activity that the

22 Department is required to carry out under—

23 (A) a provision of this Act (other than

24 chapter 2 of this subtitle); or
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1 (B) a provision of Federal law that is

2 amended or repealed by this Act (other than

3 chapter 2 of this subtitle).

4 (b) REPORTS.—

5 (1) CONTENTS.—Not later than December 31,

6 1996, each Secretary referred to in paragraph (2)

7 shall prepare and submit to the relevant committees

8 described in paragraph (3) a report containing—

9 (A) the determinations described in sub10 section (c);

11 (B) appropriate documentation in support

12 of such determinations; and

13 (C) a description of the methodology used

14 in making such determinations.

15 (2) SECRETARY.—The Secretaries referred to in

16 this paragraph are—

17 (A) the Secretary of Agriculture;

18 (B) the Secretary of Education;

19 (C) the Secretary of Labor;

20 (D) the Secretary of Housing and Urban

21 Development; and

22 (E) the Secretary of Health and Human

23 Services.
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1 (3) RELEVANT COMMITTEES.—The relevant

2 Committees described in this paragraph are the fol3 lowing:

4 (A) With respect to each Secretary de5 scribed in paragraph (2), the Committee on

6 Government Reform and Oversight of the

7 House of Representatives and the Committee

8 on Governmental Affairs of the Senate.

9 (B) With respect to the Secretary of Agri10 culture, the Committee on Agriculture and the

11 Committee on Economic and Educational Op12 portunities of the House of Representatives and

13 the Committee on Agriculture, Nutrition, and

14 Forestry of the Senate.

15 (C) With respect to the Secretary of Edu16 cation, the Committee on Economic and Edu17 cational Opportunities of the House of Rep18 resentatives and the Committee on Labor and

19 Human Resources of the Senate.

20 (D) With respect to the Secretary of

21 Labor, the Committee on Economic and Edu22 cational Opportunities of the House of Rep23 resentatives and the Committee on Labor and

24 Human Resources of the Senate.
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1 (E) With respect to the Secretary of Hous2 ing and Urban Development, the Committee on

3 Banking and Financial Services of the House of

4 Representatives and the Committee on Bank5 ing, Housing, and Urban Affairs of the Senate.

6 (F) With respect to the Secretary of

7 Health and Human Services, the Committee on

8 Economic and Educational Opportunities of the

9 House of Representatives, the Committee on

10 Labor and Human Resources of the Senate, the

11 Committee on Ways and Means of the House of

12 Representatives, and the Committee on Finance

13 of the Senate.

14 (4) REPORT ON CHANGES.—Not later than De15 cember 31, 1997, and each December 31 thereafter,

16 each Secretary referred to in paragraph (2) shall

17 prepare and submit to the relevant Committees de18 scribed in paragraph (3), a report concerning any

19 changes with respect to the determinations made

20 under subsection (c) for the year in which the report

21 is being submitted.

22 (c) DETERMINATIONS.—Not later than December 31,

23 1996, each Secretary referred to in subsection (b)(2) shall

24 determine—
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1 (1) the number of full-time equivalent positions

2 required by the Department headed by such Sec3 retary to carry out the covered activities of the De4 partment, as of the day before the date of enactment

5 of this Act;

6 (2) the number of such positions required by

7 the Department to carry out the activities, as of the

8 appropriate effective date for the Department; and

9 (3) the difference obtained by subtracting the

10 number referred to in paragraph (2) from the num11 ber referred to in paragraph (1).

12 (d) ACTIONS.—Each Secretary referred to in sub13 section (b)(2) shall take such actions as may be necessary,

14 including reduction in force actions, consistent with sec15 tions 3502 and 3595 of title 5, United States Code, to

16 reduce the number of positions of personnel of the Depart17 ment—

18 (1) not later than 30 days after the appropriate

19 effective date for the Department involved, by at

20 least 50 percent of the difference referred to in sub21 section (c)(3); and

22 (2) not later than 13 months after such appro23 priate effective date, by at least the remainder of

24 such difference (after the application of paragraph

25 (1)).
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1 (e) CONSISTENCY.—

2 (1) EDUCATION.—The Secretary of Education

3 shall carry out this section in a manner that enables

4 the Secretary to meet the requirements of this sec5 tion.

6 (2) LABOR.—The Secretary of Labor shall

7 carry out this section in a manner that enables the

8 Secretary to meet the requirements of this section.

9 (3) HEALTH AND HUMAN SERVICES.—The Sec10 retary of Health and Human Services shall carry out

11 this section in a manner that enables the Secretary

12 to meet the requirements of this section and sections

13 502 and 503.

14 (f) CALCULATION.—In determining, under subsection

15 (c), the number of full-time equivalent positions required

16 by a Department to carry out a covered activity, a Sec17 retary referred to in subsection (b)(2) shall include the

18 number of such positions occupied by personnel carrying

19 out program functions or other functions (including budg20 etary, legislative, administrative, planning, evaluation, and

21 legal functions) related to the activity.

22 (g) GENERAL ACCOUNTING OFFICE REPORT.—Not

23 later than July 1, 1997, the Comptroller General of the

24 United States shall prepare and submit to the committees

25 described in subsection (b)(3), a report concerning the de-
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1 terminations made by each Secretary under subsection (c).

2 Such report shall contain an analysis of the determina3 tions made by each Secretary under subsection (c) and

4 a determination as to whether further reductions in full5 time equivalent positions are appropriate.

6 SEC. 2502. REDUCTIONS IN FEDERAL BUREAUCRACY.

7 (a) IN GENERAL.—The Secretary of Health and

8 Human Services shall reduce the Federal workforce within

9 the Department of Health and Human Services by an

10 amount equal to the sum of—

11 (1) 75 percent of the full-time equivalent posi12 tions at such Department that relate to any direct

13 spending program, or any program funded through

14 discretionary spending, that has been converted into

15 a block grant program under this Act and the

16 amendments made by this Act; and

17 (2) an amount equal to 75 percent of that por18 tion of the total full-time equivalent departmental

19 management positions at such Department that

20 bears the same relationship to the amount appro21 priated for the programs referred to in paragraph

22 (1) as such amount relates to the total amount ap23 propriated for use by such Department.

24 (b) REDUCTIONS IN THE DEPARTMENT OF HEALTH

25 AND HUMAN SERVICES.—Notwithstanding any other pro-
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1 vision of this Act, the Secretary of Health and Human

2 Services shall take such actions as may be necessary, in3 cluding reductions in force actions, consistent with sec4 tions 3502 and 3595 of title 5, United States Code, to

5 reduce the full-time equivalent positions within the De6 partment of Health and Human Services—

7 (1) by 245 full-time equivalent positions related

8 to the program converted into a block grant under

9 the amendment made by section 103; and

10 (2) by 60 full-time equivalent managerial posi11 tions in the Department.

12 SEC. 2503. REDUCING PERSONNEL IN WASHINGTON, D.C.

13 AREA.

14 In making reductions in full-time equivalent posi15 tions, the Secretary of Health and Human Services is en16 couraged to reduce personnel in the Washington, D.C.,

17 area office (agency headquarters) before reducing field

18 personnel.

19 SEC. 2504. DOWNWARD ADJUSTMENT OF DISCRETIONARY

20 SPENDING LIMITS.

21 The discretionary spending limits (new budget au22 thority and outlays) for fiscal years 1997 and 1998 set

23 forth in section 601(a)(2) of the Congressional Budget Act

24 of 1974, as adjusted in strict conformance with section

25 251 of the Balanced Budget and Emergency Deficit Con-
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1 trol Act of 1985, shall be reduced, as calculated by the

2 Director of the Office of Management and Budget, in

3 amounts equal to the aggregate amounts of savings result4 ing from the reductions imposed as a result of this chapter

5 in each of fiscal years 1997 and 1998.

6 CHAPTER 6—REFORM OF PUBLIC

7 HOUSING

8 SEC. 2601. FAILURE TO COMPLY WITH OTHER WELFARE

9 AND PUBLIC ASSISTANCE PROGRAMS.

10 Title I of the United States Housing Act of 1937 (42

11 U.S.C. 1437 et seq.), as amended by section 2404(d) of

12 this Act, is amended by adding at the end the following

13 new section:

14 ‘‘SEC. 28. FAILURE TO COMPLY WITH OTHER WELFARE AND

15 PUBLIC ASSISTANCE PROGRAMS.

16 ‘‘(a) IN GENERAL.—If the benefits of a family are

17 reduced under a Federal, State, or local law relating to

18 welfare or a public assistance program for the failure of

19 any member of the family to perform an action required

20 under the law or program, the family may not, for the

21 duration of the reduction, receive any increased assistance

22 under this Act as the result of a decrease in the income

23 of the family to the extent that the decrease in income

24 is the result of the benefits reduction.
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1 ‘‘(b) EXCEPTION.—Subsection (a) shall not apply in

2 any case in which the benefits of a family are reduced be3 cause the welfare or public assistance program to which

4 the Federal, State, or local law relates limits the period

5 during which benefits may be provided under the pro6 gram.’’.

7 SEC. 2602. FRAUD UNDER MEANS-TESTED WELFARE AND

8 PUBLIC ASSISTANCE PROGRAMS.

9 (a) IN GENERAL.—If an individual’s benefits under

10 a Federal, State, or local law relating to a means-tested

11 welfare or a public assistance program are reduced be12 cause of an act of fraud by the individual under the law

13 or program, the individual may not, for the duration of

14 the reduction, receive an increased benefit under any other

15 means-tested welfare or public assistance program for

16 which Federal funds are appropriated as a result of a de17 crease in the income of the individual (determined under

18 the applicable program) attributable to such reduction.

19 (b) WELFARE OR PUBLIC ASSISTANCE PROGRAMS

20 FOR WHICH FEDERAL FUNDS ARE APPROPRIATED.—For

21 purposes of subsection (a), the term ‘‘means-tested welfare

22 or public assistance program for which Federal funds are

23 appropriated’’ includes the food stamp program under the

24 Food Stamp Act of 1977 (7 U.S.C. 2011 et seq.), any

25 program of public or assisted housing under title I of the
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1 United States Housing Act of 1937 (42 U.S.C. 1437 et

2 seq.), and State programs funded under part A of title

3 IV of the Social Security Act (42 U.S.C. 601 et seq.).

4 CHAPTER 7—TECHNICAL AMENDMENTS

5 RELATING TO CHILD PROTECTION

6 PROGRAMS

7 SEC. 2701. EXTENSION OF ENHANCED FUNDING FOR IM8 PLEMENTATION OF STATEWIDE AUTOMATED

9 CHILD WELFARE INFORMATION SYSTEMS.

10 Section 474(a)(3)(B) of the Social Security Act (42

11 U.S.C. 674(a)(3)(B)) is amended by inserting ‘‘(of, if the

12 quarter is in fiscal year 1997, 75 percent)’’ after ‘‘50 per13 cent’’ each place it appears.

14 SEC. 2702. REDESIGNATION OF SECTION 1123.

15 The Social Security Act is amended by redesignating

16 section 1123, the second place it appears (42 U.S.C.

17 1320a–1a), as section 1123A.

18 CHAPTER 8—CHILD CARE

19 SEC. 2801. SHORT TITLE AND REFERENCES.

20 (a) SHORT TITLE.—This chapter may be cited as the

21 ‘‘Child Care and Development Block Grant Amendments

22 of 1996’’.

23 (b) REFERENCES.—Except as otherwise expressly

24 provided, whenever in this chapter an amendment or re25 peal is expressed in terms of an amendment to, or repeal
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1 of, a section or other provision, the reference shall be con2 sidered to be made to a section or other provision of the

3 Child Care and Development Block Grant Act of 1990 (42

4 U.S.C. 9858 et seq.).

5 SEC. 2802. GOALS.

6 (a) GOALS.—Section 658A (42 U.S.C. 9801 note) is

7 amended—

8 (1) in the section heading by inserting ‘‘AND

9 GOALS’’ after ‘‘TITLE’’;

10 (2) by inserting ‘‘(a) SHORT TITLE.—’’ before

11 ‘‘This’’; and

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

13 ‘‘(b) GOALS.—The goals of this subchapter are—

14 ‘‘(1) to allow each State maximum flexibility in

15 developing child care programs and policies that best

16 suit the needs of children and parents within such

17 State;

18 ‘‘(2) to promote parental choice to empower

19 working parents to make their own decisions on the

20 child care that best suits their family’s needs;

21 ‘‘(3) to encourage States to provide consumer

22 education information to help parents make in23 formed choices about child care;
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1 ‘‘(4) to assist States to provide child care to

2 parents trying to achieve independence from public

3 assistance; and

4 ‘‘(5) to assist States in implementing the

5 health, safety, licensing, and registration standards

6 established in State regulations.’’.

7 SEC. 2803. AUTHORIZATION OF APPROPRIATIONS AND EN8 TITLEMENT AUTHORITY.

9 (a) IN GENERAL.—Section 658B (42 U.S.C. 9858)

10 is amended to read as follows:

11 ‘‘SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.

12 ‘‘There is authorized to be appropriated to carry out

13 this subchapter $1,000,000,000 for each of the fiscal

14 years 1996 through 2002.’’.

15 (b) SOCIAL SECURITY ACT.—Part A of title IV of

16 the Social Security Act (42 U.S.C. 601 et seq.) is amended

17 by adding at the end the following:

18 ‘‘SEC. 418. FUNDING FOR CHILD CARE.

19 ‘‘(a) GENERAL CHILD CARE ENTITLEMENT.—

20 ‘‘(1) GENERAL ENTITLEMENT.—Subject to the

21 amount appropriated under paragraph (3), each

22 State shall, for the purpose of providing child care

23 assistance, be entitled to payments under a grant

24 under this subsection for a fiscal year in an amount

25 equal to—
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1 ‘‘(A) the sum of the total amount required

2 to be paid to the State under former section

3 403 for fiscal year 1994 or 1995 (whichever is

4 greater) with respect to amounts expended for

5 child care under section—

6 ‘‘(i) 402(g) of this Act (as such sec7 tion was in effect before October 1, 1995);

8 and

9 ‘‘(ii) 402(i) of this Act (as so in ef10 fect); or

11 ‘‘(B) the average of the total amounts re12 quired to be paid to the State for fiscal years

13 1992 through 1994 under the sections referred

14 to in subparagraph (A);

15 whichever is greater.

16 ‘‘(2) REMAINDER.—

17 ‘‘(A) GRANTS.—The Secretary shall use

18 any amounts appropriated for a fiscal year

19 under paragraph (3), and remaining after the

20 reservation described in paragraph (4) and

21 after grants are awarded under paragraph (1),

22 to make grants to States under this paragraph.

23 ‘‘(B) AMOUNT.—Subject to subparagraph

24 (C), the amount of a grant awarded to a State

25 for a fiscal year under this paragraph shall be
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1 based on the formula used for determining the

2 amount of Federal payments to the State under

3 section 403(n) (as such section was in effect be4 fore October 1, 1995).

5 ‘‘(C) MATCHING REQUIREMENT.—The Sec6 retary shall pay to each eligible State in a fiscal

7 year an amount, under a grant under subpara8 graph (A), equal to the Federal medical assist9 ance percentage for such State for fiscal year

10 1995 (as defined in section 1905(b)) of so

11 much of the expenditures by the State for child

12 care in such year as exceed the State set-aside

13 for such State under paragraph (1)(A) for such

14 year and the amount of State expenditures in

15 fiscal year 1994 (or fiscal year 1995, whichever

16 is greater) that equal the non-Federal share for

17 the programs described in subparagraph (A) of

18 paragraph (1).

19 ‘‘(D) REDISTRIBUTION.—

20 ‘‘(i) IN GENERAL.—With respect to

21 any fiscal year, if the Secretary determines

22 (in accordance with clause (ii)) that

23 amounts under any grant awarded to a

24 State under this paragraph for such fiscal

25 year will not be used by such State during
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1 such fiscal year for carrying out the pur2 pose for which the grant is made, the Sec3 retary shall make such amounts available

4 in the subsequent fiscal year for carrying

5 out such purpose to 1 or more States

6 which apply for such funds to the extent

7 the Secretary determines that such States

8 will be able to use such additional amounts

9 for carrying out such purpose. Such avail10 able amounts shall be redistributed to a

11 State pursuant to section 402(i) (as such

12 section was in effect before October 1,

13 1995) by substituting ‘the number of chil14 dren residing in all States applying for

15 such funds’ for ‘the number of children re16 siding in the United States in the second

17 preceding fiscal year’.

18 ‘‘(ii) TIME OF DETERMINATION AND

19 DISTRIBUTION.—The determination of the

20 Secretary under clause (i) for a fiscal year

21 shall be made not later than the end of the

22 first quarter of the subsequent fiscal year.

23 The redistribution of amounts under clause

24 (i) shall be made as close as practicable to

25 the date on which such determination is
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1 made. Any amount made available to a

2 State from an appropriation for a fiscal

3 year in accordance with this subparagraph

4 shall, for purposes of this part, be re5 garded as part of such State’s payment (as

6 determined under this subsection) for the

7 fiscal year in which the redistribution is

8 made.

9 ‘‘(3) APPROPRIATION.—There are authorized to

10 be appropriated, and there are appropriated, to

11 carry out this section—

12 ‘‘(A) $1,967,000,000 for fiscal year 1997;

13 ‘‘(B) $2,067,000,000 for fiscal year 1998;

14 ‘‘(C) $2,167,000,000 for fiscal year 1999;

15 ‘‘(D) $2,367,000,000 for fiscal year 2000;

16 ‘‘(E) $2,567,000,000 for fiscal year 2001;

17 and

18 ‘‘(F) $2,717,000,000 for fiscal year 2002.

19 ‘‘(4) INDIAN TRIBES.—The Secretary shall re20 serve not more than 1 percent of the aggregate

21 amount appropriated to carry out this section in

22 each fiscal year for payments to Indian tribes and

23 tribal organizations.

24 ‘‘(b) USE OF FUNDS.—
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1 ‘‘(1) IN GENERAL.—Amounts received by a

2 State under this section shall only be used to provide

3 child care assistance. Amounts received by a State

4 under a grant under subsection (a)(1) shall be avail5 able for use by the State without fiscal year limita6 tion.

7 ‘‘(2) USE FOR CERTAIN POPULATIONS.—A

8 State shall ensure that not less than 70 percent of

9 the total amount of funds received by the State in

10 a fiscal year under this section are used to provide

11 child care assistance to families who are receiving

12 assistance under a State program under this part,

13 families who are attempting through work activities

14 to transition off of such assistance program, and

15 families who are at risk of becoming dependent on

16 such assistance program.

17 ‘‘(c) APPLICATION OF CHILD CARE AND DEVELOP18 MENT BLOCK GRANT ACT of 1990.—Notwithstanding any

19 other provision of law, amounts provided to a State under

20 this section shall be transferred to the lead agency under

21 the Child Care and Development Block Grant Act of 1990,

22 integrated by the State into the programs established by

23 the State under such Act, and be subject to requirements

24 and limitations of such Act.
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1 ‘‘(d) DEFINITION.—As used in this section, the term

2 ‘State’ means each of the 50 States or the District of Co3 lumbia.’’.

4 SEC. 2804. LEAD AGENCY.

5 Section 658D(b) (42 U.S.C. 9858b(b)) is amended—

6 (1) in paragraph (1)—

7 (A) in subparagraph (A), by striking

8 ‘‘State’’ the first place that such appears and

9 inserting ‘‘governmental or nongovernmental’’;

10 and

11 (B) in subparagraph (C), by inserting

12 ‘‘with sufficient time and Statewide distribution

13 of the notice of such hearing,’’ after ‘‘hearing in

14 the State’’; and

15 (2) in paragraph (2), by striking the second

16 sentence.

17 SEC. 2805. APPLICATION AND PLAN.

18 Section 658E (42 U.S.C. 9858c) is amended—

19 (1) in subsection (b)—

20 (A) by striking ‘‘implemented—’’ and all

21 that follows through ‘‘(2)’’ and inserting ‘‘im22 plemented’’; and

23 (B) by striking ‘‘for subsequent State

24 plans’’;

25 (2) in subsection (c)—
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1 (A) in paragraph (2)—

2 (i) in subparagraph (A)—

3 (I) in clause (i) by striking ‘‘,

4 other than through assistance pro5 vided under paragraph (3)(C),’’; and

6 (II) by striking ‘‘except’’ and all

7 that follows through ‘‘1992’’, and in8 serting ‘‘and provide a detailed de9 scription of the procedures the State

10 will implement to carry out the re11 quirements of this subparagraph’’;

12 (ii) in subparagraph (B)—

13 (I) by striking ‘‘Provide assur14 ances’’ and inserting ‘‘Certify’’; and

15 (II) by inserting before the pe16 riod at the end ‘‘and provide a de17 tailed description of such procedures’’;

18 (iii) in subparagraph (C)—

19 (I) by striking ‘‘Provide assur20 ances’’ and inserting ‘‘Certify’’; and

21 (II) by inserting before the pe22 riod at the end ‘‘and provide a de23 tailed description of how such record

24 is maintained and is made available’’;
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1 (iv) by amending subparagraph (D) to

2 read as follows:

3 ‘‘(D) CONSUMER EDUCATION INFORMA4 TION.—Certify that the State will collect and

5 disseminate to parents of eligible children and

6 the general public, consumer education informa7 tion that will promote informed child care

8 choices.’’;

9 (v) in subparagraph (E), to read as

10 follows:

11 ‘‘(E) COMPLIANCE WITH STATE LICENSING

12 REQUIREMENTS.—

13 ‘‘(i) IN GENERAL.—Certify that the

14 State has in effect licensing requirements

15 applicable to child care services provided

16 within the State, and provide a detailed de17 scription of such requirements and of how

18 such requirements are effectively enforced.

19 Nothing in the preceding sentence shall be

20 construed to require that licensing require21 ments be applied to specific types of pro22 viders of child care services.

23 ‘‘(ii) INDIAN TRIBES AND TRIBAL OR24 GANIZATIONS.—In lieu of any licensing

25 and regulatory requirements applicable
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1 under State and local law, the Secretary,

2 in consultation with Indian tribes and trib3 al organizations, shall develop minimum

4 child care standards (that appropriately re5 flect tribal needs and available resources)

6 that shall be applicable to Indian tribes

7 and tribal organizations receiving assist8 ance under this subchapter.’’;

9 (vi) by striking subparagraph (F);

10 (vii) in subparagraph (G)—

11 (I) by redesignating such sub12 paragraph as subparagraph (F);

13 (II) by striking ‘‘Provide assur14 ances’’ and inserting ‘‘Certify’’; and

15 (III) by striking ‘‘as described in

16 subparagraph (F)’’; and

17 (viii) by striking subparagraphs (H),

18 (I), and (J) and inserting the following:

19 ‘‘(G) MEETING THE NEEDS OF CERTAIN

20 POPULATIONS.—Demonstrate the manner in

21 which the State will meet the specific child care

22 needs of families who are receiving assistance

23 under a State program under part A of title

24 IV of the Social Security Act, families who are

25 attempting through work activities to transition
629

•S 1956 PCS

1 off of such assistance program, and families

2 that are at risk of becoming dependent on such

3 assistance program.’’;

4 (B) in paragraph (3)—

5 (i) in subparagraph (A), by striking

6 ‘‘(B) and (C)’’ and inserting ‘‘(B) through

7 (D)’’;

8 (ii) in subparagraph (B)—

9 (I) by striking ‘‘.—Subject to the

10 reservation contained in subparagraph

11 (C), the’’ and inserting ‘‘AND RELAT12 ED ACTIVITIES.—The’’;

13 (II) in clause (i) by striking ‘‘;

14 and’’ at the end and inserting a pe15 riod;

16 (III) by striking ‘‘for—’’ and all

17 that follows through ‘‘section

18 658E(c)(2)(A)’’ and inserting ‘‘for

19 child care services on sliding fee scale

20 basis, activities that improve the qual21 ity or availability of such services, and

22 any other activity that the State

23 deems appropriate to realize any of

24 the goals specified in paragraphs (2)

25 through (5) of section 658A(b)’’; and
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1 (IV) by striking clause (ii);

2 (iii) by amending subparagraph (C) to

3 read as follows:

4 ‘‘(C) LIMITATION ON ADMINISTRATIVE

5 COSTS.—Not more than 5 percent of the aggre6 gate amount of funds available to the State to

7 carry out this subchapter by a State in each fis8 cal year may be expended for administrative

9 costs incurred by such State to carry out all of

10 its functions and duties under this subchapter.

11 As used in the preceding sentence, the term

12 ‘administrative costs’ shall not include the costs

13 of providing direct services.’’; and

14 (iv) by adding at the end thereof the

15 following:

16 ‘‘(D) ASSISTANCE FOR CERTAIN FAMI17 LIES.—A State shall ensure that a substantial

18 portion of the amounts available (after the

19 State has complied with the requirement of sec20 tion 418(b)(2) of the Social Security Act with

21 respect to each of the fiscal years 1997 through

22 2002) to the State to carry out activities under

23 this subchapter in each fiscal year is used to

24 provide assistance to low-income working fami-
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1 lies other than families described in paragraph

2 (2)(F).’’; and

3 (C) in paragraph (4)(A)—

4 (i) by striking ‘‘provide assurances’’

5 and inserting ‘‘certify’’;

6 (ii) in the first sentence by inserting

7 ‘‘and shall provide a summary of the facts

8 relied on by the State to determine that

9 such rates are sufficient to ensure such ac10 cess’’ before the period; and

11 (iii) by striking the last sentence.

12 SEC. 2806. LIMITATION ON STATE ALLOTMENTS.

13 Section 658F(b) (42 U.S.C. 9858d(b)) is amended—

14 (1) in paragraph (1), by striking ‘‘No’’ and in15 serting ‘‘Except as provided for in section

16 658O(c)(6), no’’; and

17 (2) in paragraph (2), by striking ‘‘referred to in

18 section 658E(c)(2)(F)’’.

19 SEC. 2807. ACTIVITIES TO IMPROVE THE QUALITY OF

20 CHILD CARE.

21 Section 658G (42 U.S.C. 9858e) is amended to read

22 as follows:
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1 ‘‘SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF

2 CHILD CARE.

3 ‘‘A State that receives funds to carry out this sub4 chapter for a fiscal year, shall use not less than 3 percent

5 of the amount of such funds for activities that are de6 signed to provide comprehensive consumer education to

7 parents and the public, activities that increase parental

8 choice, and activities designed to improve the quality and

9 availability of child care (such as resource and referral

10 services).’’.

11 SEC. 2808. REPEAL OF EARLY CHILDHOOD DEVELOPMENT

12 AND BEFORE- AND AFTER-SCHOOL CARE RE13 QUIREMENT.

14 Section 658H (42 U.S.C. 9858f) is repealed.

15 SEC. 2809. ADMINISTRATION AND ENFORCEMENT.

16 Section 658I(b) (42 U.S.C. 9858g(b)) is amended—

17 (1) in paragraph (1), by striking ‘‘, and shall

18 have’’ and all that follows through ‘‘(2)’’; and

19 (2) in the matter following clause (ii) of para20 graph (2)(A), by striking ‘‘finding and that’’ and all

21 that follows through the period and inserting ‘‘find22 ing and shall require that the State reimburse the

23 Secretary for any funds that were improperly ex24 pended for purposes prohibited or not authorized by

25 this subchapter, that the Secretary deduct from the

26 administrative portion of the State allotment for the
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1 following fiscal year an amount that is less than or

2 equal to any improperly expended funds, or a com3 bination of such options.’’.

4 SEC. 2810. PAYMENTS.

5 Section 658J(c) (42 U.S.C. 9858h(c)) is amended by

6 striking ‘‘expended’’ and inserting ‘‘obligated’’.

7 SEC. 2811. ANNUAL REPORT AND AUDITS.

8 Section 658K (42 U.S.C. 9858i) is amended—

9 (1) in the section heading by striking ‘‘ANNUAL

10 REPORT’’ and inserting ‘‘REPORTS’’;

11 (2) in subsection (a), to read as follows:

12 ‘‘(a) REPORTS.—

13 ‘‘(1) COLLECTION OF INFORMATION BY

14 STATES.—

15 ‘‘(A) IN GENERAL.—A State that receives

16 funds to carry out this subchapter shall collect

17 the information described in subparagraph (B)

18 on a monthly basis.

19 ‘‘(B) REQUIRED INFORMATION.—The in20 formation required under this subparagraph

21 shall include, with respect to a family unit re22 ceiving assistance under this subchapter infor23 mation concerning—

24 ‘‘(i) family income;

25 ‘‘(ii) county of residence;
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•S 1956 PCS

1 ‘‘(iii) the gender, race, and age of

2 children receiving such assistance;

3 ‘‘(iv) whether the family includes only

4 1 parent;

5 ‘‘(v) the sources of family income, in6 cluding the amount obtained from (and

7 separately identified)—

8 ‘‘(I) employment, including self9 employment;

10 ‘‘(II) cash or other assistance

11 under part A of title IV of the Social

12 Security Act;

13 ‘‘(III) housing assistance;

14 ‘‘(IV) assistance under the Food

15 Stamp Act of 1977; and

16 ‘‘(V) other assistance programs;

17 ‘‘(vi) the number of months the family

18 has received benefits;

19 ‘‘(vii) the type of child care in which

20 the child was enrolled (such as family child

21 care, home care, or center-based child

22 care);

23 ‘‘(viii) whether the child care provider

24 involved was a relative;
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•S 1956 PCS

1 ‘‘(ix) the cost of child care for such

2 families; and

3 ‘‘(x) the average hours per week of

4 such care;

5 during the period for which such information is

6 required to be submitted.

7 ‘‘(C) SUBMISSION TO SECRETARY.—A

8 State described in subparagraph (A) shall, on a

9 quarterly basis, submit the information required

10 to be collected under subparagraph (B) to the

11 Secretary.

12 ‘‘(D) SAMPLING.—The Secretary may dis13 approve the information collected by a State

14 under this paragraph if the State uses sampling

15 methods to collect such information.

16 ‘‘(2) BIANNUAL REPORTS.—Not later than De17 cember 31, 1997, and every 6 months thereafter, a

18 State described in paragraph (1)(A) shall prepare

19 and submit to the Secretary a report that includes

20 aggregate data concerning—

21 ‘‘(A) the number of child care providers

22 that received funding under this subchapter as

23 separately identified based on the types of pro24 viders listed in section 658P(5);
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•S 1956 PCS

1 ‘‘(B) the monthly cost of child care serv2 ices, and the portion of such cost that is paid

3 for with assistance provided under this sub4 chapter, listed by the type of child care services

5 provided;

6 ‘‘(C) the number of payments made by the

7 State through vouchers, contracts, cash, and

8 disregards under public benefit programs, listed

9 by the type of child care services provided;

10 ‘‘(D) the manner in which consumer edu11 cation information was provided to parents and

12 the number of parents to whom such informa13 tion was provided; and

14 ‘‘(E) the total number (without duplica15 tion) of children and families served under this

16 subchapter;

17 during the period for which such report is required

18 to be submitted.’’; and

19 (2) in subsection (b)—

20 (A) in paragraph (1) by striking ‘‘a appli21 cation’’ and inserting ‘‘an application’’;

22 (B) in paragraph (2) by striking ‘‘any

23 agency administering activities that receive’’

24 and inserting ‘‘the State that receives’’; and
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•S 1956 PCS

1 (C) in paragraph (4) by striking ‘‘entitles’’

2 and inserting ‘‘entitled’’.

3 SEC. 2812. REPORT BY THE SECRETARY.

4 Section 658L (42 U.S.C. 9858j) is amended—

5 (1) by striking ‘‘1993’’ and inserting ‘‘1997’’;

6 (2) by striking ‘‘annually’’ and inserting ‘‘bien7 nially’’; and

8 (3) by striking ‘‘Education and Labor’’ and in9 serting ‘‘Economic and Educational Opportunities’’.

10 SEC. 2813. ALLOTMENTS.

11 Section 658O (42 U.S.C. 9858m) is amended—

12 (1) in subsection (a)—

13 (A) in paragraph (1)

14 (i) by striking ‘‘POSSESSIONS’’ and in15 serting ‘‘POSSESSIONS’’;

16 (ii) by inserting ‘‘and’’ after

17 ‘‘States,’’; and

18 (iii) by striking ‘‘, and the Trust Ter19 ritory of the Pacific Islands’’; and

20 (B) in paragraph (2), by striking ‘‘3 per21 cent’’ and inserting ‘‘1 percent’’;

22 (2) in subsection (c)—

23 (A) in paragraph (5) by striking ‘‘our’’ and

24 inserting ‘‘out’’; and
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•S 1956 PCS

1 (B) by adding at the end thereof the fol2 lowing new paragraph:

3 ‘‘(6) CONSTRUCTION OR RENOVATION OF FA4 CILITIES.—

5 ‘‘(A) REQUEST FOR USE OF FUNDS.—An

6 Indian tribe or tribal organization may submit

7 to the Secretary a request to use amounts pro8 vided under this subsection for construction or

9 renovation purposes.

10 ‘‘(B) DETERMINATION.—With respect to a

11 request submitted under subparagraph (A), and

12 except as provided in subparagraph (C), upon a

13 determination by the Secretary that adequate

14 facilities are not otherwise available to an In15 dian tribe or tribal organization to enable such

16 tribe or organization to carry out child care

17 programs in accordance with this subchapter,

18 and that the lack of such facilities will inhibit

19 the operation of such programs in the future,

20 the Secretary may permit the tribe or organiza21 tion to use assistance provided under this sub22 section to make payments for the construction

23 or renovation of facilities that will be used to

24 carry out such programs.
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1 ‘‘(C) LIMITATION.—The Secretary may not

2 permit an Indian tribe or tribal organization to

3 use amounts provided under this subsection for

4 construction or renovation if such use will re5 sult in a decrease in the level of child care serv6 ices provided by the tribe or organization as

7 compared to the level of such services provided

8 by the tribe or organization in the fiscal year

9 preceding the year for which the determination

10 under subparagraph (A) is being made.

11 ‘‘(D) UNIFORM PROCEDURES.—The Sec12 retary shall develop and implement uniform

13 procedures for the solicitation and consideration

14 of requests under this paragraph.’’; and

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

16 thereof the following new paragraph:

17 ‘‘(4) INDIAN TRIBES OR TRIBAL ORGANIZA18 TIONS.—Any portion of a grant or contract made to

19 an Indian tribe or tribal organization under sub20 section (c) that the Secretary determines is not

21 being used in a manner consistent with the provision

22 of this subchapter in the period for which the grant

23 or contract is made available, shall be allotted by the

24 Secretary to other tribes or organizations that have
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•S 1956 PCS

1 submitted applications under subsection (c) in ac2 cordance with their respective needs.’’.

3 SEC. 2814. DEFINITIONS.

4 Section 658P (42 U.S.C. 9858n) is amended—

5 (1) in paragraph (2), in the first sentence by

6 inserting ‘‘or as a deposit for child care services if

7 such a deposit is required of other children being

8 cared for by the provider’’ after ‘‘child care serv9 ices’’; and

10 (2) by striking paragraph (3);

11 (3) in paragraph (4)(B), by striking ‘‘75 per12 cent’’ and inserting ‘‘85 percent’’;

13 (4) in paragraph (5)(B)—

14 (A) by inserting ‘‘great grandchild, sibling

15 (if such provider lives in a separate residence),’’

16 after ‘‘grandchild,’’;

17 (B) by striking ‘‘is registered and’’; and

18 (C) by striking ‘‘State’’ and inserting ‘‘ap19 plicable’’.

20 (5) by striking paragraph (10);

21 (6) in paragraph (13)—

22 (A) by inserting ‘‘or’’ after ‘‘Samoa,’’; and

23 (B) by striking ‘‘, and the Trust Territory

24 of the Pacific Islands’’;

25 (7) in paragraph (14)—
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•S 1956 PCS

1 (A) by striking ‘‘The term’’ and inserting

2 the following:

3 ‘‘(A) IN GENERAL.—The term’’; and

4 (B) by adding at the end thereof the fol5 lowing new subparagraph:

6 ‘‘(B) OTHER ORGANIZATIONS.—Such term

7 includes a Native Hawaiian Organization, as

8 defined in section 4009(4) of the Augustus F.

9 Hawkins-Robert T. Stafford Elementary and

10 Secondary School Improvement Amendments of

11 1988 (20 U.S.C. 4909(4)) and a private non12 profit organization established for the purpose

13 of serving youth who are Indians or Native Ha14 waiians.’’.

15 SEC. 2815. REPEALS.

16 (a) CHILD DEVELOPMENT ASSOCIATE SCHOLARSHIP

17 ASSISTANCE ACT OF 1985.—Title VI of the Human Serv18 ices Reauthorization Act of 1986 (42 U.S.C. 10901–

19 10905) is repealed.

20 (b) STATE DEPENDENT CARE DEVELOPMENT

21 GRANTS ACT.—Subchapter E of chapter 8 of subtitle A

22 of title VI of the Omnibus Budget Reconciliation Act of

23 1981 (42 U.S.C. 9871–9877) is repealed.

24 (c) PROGRAMS OF NATIONAL SIGNIFICANCE.—Title

25 X of the Elementary and Secondary Education Act of
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•S 1956 PCS

1 1965, as amended by Public Law 103–382 (108 Stat.

2 3809 et seq.), is amended—

3 (1) in section 10413(a) by striking paragraph

4 (4),

5 (2) in section 10963(b)(2) by striking subpara6 graph (G), and

7 (3) in section 10974(a)(6) by striking subpara8 graph (G).

9 (d) NATIVE HAWAIIAN FAMILY-BASED EDUCATION

10 CENTERS.—Section 9205 of the Native Hawaiian Edu11 cation Act, as amended by section 101 of Public Law 103–

12 382, (108 Stat. 3794) is repealed.

13 SEC. 2816. EFFECTIVE DATE.

14 (a) IN GENERAL.—Except as provided in subsection

15 (b), this chapter and the amendments made by this chap16 ter shall take effect on October 1, 1996.

17 (b) EXCEPTION.—The amendment made by section

18 2803(a) shall take effect on the date of enactment of this

19 Act.

20 CHAPTER 9—MISCELLANEOUS

21 SEC. 2901. APPROPRIATION BY STATE LEGISLATURES.

22 (a) IN GENERAL.—Any funds received by a State

23 under the provisions of law specified in subsection (b) shall

24 be subject to appropriation by the State legislature, con-
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•S 1956 PCS

1 sistent with the terms and conditions required under such

2 provisions of law.

3 (b) PROVISIONS OF LAW.—The provisions of law

4 specified in this subsection are the following:

5 (1) Part A of title IV of the Social Security Act

6 (relating to block grants for temporary assistance

7 for needy families).

8 (2) Section 27 of the Food Stamp Act of 1977

9 (relating to the optional State food assistance block

10 grant).

11 (3) The Child Care and Development Block

12 Grant Act of 1990 (relating to block grants for child

13 care).

14 SEC. 2902. SANCTIONING FOR TESTING POSITIVE FOR CON15 TROLLED SUBSTANCES.

16 Notwithstanding any other provision of law, States

17 shall not be prohibited by the Federal Government from

18 testing welfare recipients for use of controlled substances

19 nor from sanctioning welfare recipients who test positive

20 for use of controlled substances.

21 SEC. 2903. REDUCTION IN BLOCK GRANTS TO STATES FOR

22 SOCIAL SERVICES.

23 Section 2003(c) of the Social Security Act (42 U.S.C.

24 1397b(c)) is amended—
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•S 1956 PCS

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

2 (4); and

3 (2) by striking paragraph (5) and inserting the

4 following:

5 ‘‘(5) $2,800,000,000 for each of the fiscal years

6 1990 through 1995;

7 ‘‘(6) $2,381,000,000 for the fiscal year 1996;

8 ‘‘(7) $2,240,000,000 for each of the fiscal years

9 1997 through 2002; and

10 ‘‘(8) $2,800,000,000 for the fiscal year 2003

11 and each succeeding fiscal year.’’.

12 SEC. 2904. ELIMINATION OF HOUSING ASSISTANCE WITH

13 RESPECT TO FUGITIVE FELONS AND PROBA14 TION AND PAROLE VIOLATORS.

15 (a) ELIGIBILITY FOR ASSISTANCE.—The United

16 States Housing Act of 1937 (42 U.S.C. 1437 et seq.) is

17 amended—

18 (1) in section 6(l)—

19 (A) in paragraph (5), by striking ‘‘and’’ at

20 the end;

21 (B) in paragraph (6), by striking the pe22 riod at the end and inserting ‘‘; and’’; and

23 (C) by inserting immediately after para24 graph (6) the following new paragraph:
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•S 1956 PCS

1 ‘‘(7) provide that it shall be cause for imme2 diate termination of the tenancy of a public housing

3 tenant if such tenant—

4 ‘‘(A) is fleeing to avoid prosecution, or cus5 tody or confinement after conviction, under the

6 laws of the place from which the individual

7 flees, for a crime, or attempt to commit a

8 crime, which is a felony under the laws of the

9 place from which the individual flees, or which,

10 in the case of the State of New Jersey, is a

11 high misdemeanor under the laws of such State;

12 or

13 ‘‘(2) is violating a condition of probation or pa14 role imposed under Federal or State law.’’; and

15 (2) in section 8(d)(1)(B)—

16 (A) in clause (iii), by striking ‘‘and’’ at the

17 end;

18 (B) in clause (iv), by striking the period at

19 the end and inserting ‘‘; and’’; and

20 (C) by adding after clause (iv) the follow21 ing new clause:

22 ‘‘(v) it shall be cause for termination

23 of the tenancy of a tenant if such tenant—

24 ‘‘(I) is fleeing to avoid prosecu25 tion, or custody or confinement after
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•S 1956 PCS

1 conviction, under the laws of the place

2 from which the individual flees, for a

3 crime, or attempt to commit a crime,

4 which is a felony under the laws of

5 the place from which the individual

6 flees, or which, in the case of the

7 State of New Jersey, is a high mis8 demeanor under the laws of such

9 State; or

10 ‘‘(II) is violating a condition of

11 probation or parole imposed under

12 Federal or State law;’’.

13 (b) PROVISION OF INFORMATION TO LAW ENFORCE14 MENT AGENCIES.—Title I of the United States Housing

15 Act of 1937 (42 U.S.C. 1437 et seq.), as amended by sec16 tions 2404(d) and 2601 of this Act, is amended by adding

17 at the end the following:

18 ‘‘SEC. 29. EXCHANGE OF INFORMATION WITH LAW EN19 FORCEMENT AGENCIES.

20 ‘‘Notwithstanding any other provision of law, each

21 public housing agency that enters into a contract for as22 sistance under section 6 or 8 of this Act with the Secretary

23 shall furnish any Federal, State, or local law enforcement

24 officer, upon the request of the officer, with the current

25 address, Social Security number, and photograph (if appli-
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•S 1956 PCS

1 cable) of any recipient of assistance under this Act, if the

2 officer—

3 ‘‘(1) furnishes the public housing agency with

4 the name of the recipient; and

5 ‘‘(2) notifies the agency that—

6 ‘‘(A) such recipient—

7 ‘‘(i) is fleeing to avoid prosecution, or

8 custody or confinement after conviction,

9 under the laws of the place from which the

10 individual flees, for a crime, or attempt to

11 commit a crime, which is a felony under

12 the laws of the place from which the indi13 vidual flees, or which, in the case of the

14 State of New Jersey, is a high mis15 demeanor under the laws of such State; or

16 ‘‘(ii) is violating a condition of proba17 tion or parole imposed under Federal or

18 State law; or

19 ‘‘(iii) has information that is nec20 essary for the officer to conduct the offi21 cer’s official duties;

22 ‘‘(B) the location or apprehension of the

23 recipient is within such officer’s official duties;

24 and
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1 ‘‘(C) the request is made in the proper ex2 ercise of the officer’s official duties.’’.

3 SEC. 2905. SENSE OF THE SENATE REGARDING ENTER4 PRISE ZONES.

5 (a) FINDINGS.—The Senate finds that:

6 (1) Many of the Nation’s urban centers are

7 places with high levels of poverty, high rates of wel8 fare dependency, high crime rates, poor schools, and

9 joblessness;

10 (2) Federal tax incentives and regulatory re11 forms can encourage economic growth, job creation

12 and small business formation in many urban centers;

13 (3) Encouraging private sector investment in

14 America’s economically distressed urban and rural

15 areas is essential to breaking the cycle of poverty

16 and the related ills of crime, drug abuse, illiteracy,

17 welfare dependency, and unemployment;

18 (4) The empowerment zones enacted in 1993

19 should be enhanced by providing incentives to in20 crease entrepreneurial growth, capital formation, job

21 creation, educational opportunities, and home owner22 ship in the designated communities and zones.

23 (b) SENSE OF THE SENATE.—Therefore, it is the

24 Sense of the Senate that the Congress should adopt enter25 prise zone legislation in the One Hundred Fourth Con-
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1 gress, and that such enterprise zone legislation provide the

2 following incentives and provisions:

3 (1) Federal tax incentives that expand access to

4 capital, increase the formation and expansion of

5 small businesses, and promote commercial revitaliza6 tion;

7 (2) Regulatory reforms that allow localities to

8 petition Federal agencies, subject to the relevant

9 agencies’ approval, for waivers or modifications of

10 regulations to improve job creation, small business

11 formation and expansion, community development,

12 or economic revitalization objectives of the enterprise

13 zones;

14 (3) Home ownership incentives and grants to

15 encourage resident management of public housing

16 and home ownership of public housing;

17 (4) School reform pilot projects in certain des18 ignated enterprise zones to provide low-income par19 ents with new and expanded educational options for

20 their children’s elementary and secondary schooling.

21 SEC. 2906. SENSE OF THE SENATE REGARDING THE IN22 ABILITY OF THE NON-CUSTODIAL PARENT TO

23 PAY CHILD SUPPORT.

24 It is the sense of the Senate that—
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1 (a) States should diligently continue their ef2 forts to enforce child support payments by the non3 custodial parent to the custodial parent, regardless

4 of the employment status or location of the non-cus5 todial parent; and

6 (b) States are encouraged to pursue pilot pro7 grams in which the parents of a non-adult, non-cus8 todial parent who refuses to or is unable to pay child

9 support must—

10 (1) pay or contribute to the child support

11 owed by the non-custodial parent; or

12 (2) otherwise fulfill all financial obligations

13 and meet all conditions imposed on the non-cus14 todial parent, such as participation in a work

15 program or other related activity.

16 SEC. 2907. ESTABLISHING NATIONAL GOALS TO PREVENT

17 TEENAGE PREGNANCIES.

18 (a) IN GENERAL.—Not later than January 1, 1997,

19 the Secretary of Health and Human Services shall estab20 lish and implement a strategy for—

21 (1) preventing out-of-wedlock teenage preg22 nancies, and

23 (2) assuring that at least 25 percent of the

24 communities in the United States have teenage preg25 nancy prevention programs in place.
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1 (b) REPORT.—Not later than June 30, 1998, and an2 nually thereafter, the Secretary shall report to the Con3 gress with respect to the progress that has been made in

4 meeting the goals described in paragraphs (1) and (2) of

5 subsection (a).

6 SEC. 2908. SENSE OF THE SENATE REGARDING ENFORCE7 MENT OF STATUTORY RAPE LAWS.

8 It is the sense of the Senate that States and local

9 jurisdictions should aggressively enforce statutory rape

10 laws.

11 SEC. 2909. ABSTINENCE EDUCATION.

12 (a) INCREASES IN FUNDING.—Section 501(a) of the

13 Social Security Act (42 U.S.C. 701(a)) is amended in the

14 matter preceding paragraph (1) by striking ‘‘Fiscal year

15 1990 and each fiscal year thereafter’’ and inserting ‘‘Fis16 cal years 1990 through 1995 and $761,000,000 for fiscal

17 year 1996 and each fiscal year thereafter’’.

18 (b) ABSTINENCE EDUCATION.—Section 501(a)(1) of

19 such Act (42 U.S.C. 701(a)(1)) is amended—

20 (1) in subparagraph (C), by striking ‘‘and’’ at

21 the end;

22 (2) in subparagraph (D), by adding ‘‘and’’ at

23 the end; and

24 (3) by adding at the end the following new sub25 paragraph:
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•S 1956 PCS

1 ‘‘(E) to provide abstinence education, and

2 at the option of the State, where appropriate,

3 mentoring, counseling, and adult supervision to

4 promote abstinence from sexual activity, with a

5 focus on those groups which are most likely to

6 bear children out-of-wedlock.’’.

7 (c) ABSTINENCE EDUCATION DEFINED.—Section

8 501(b) of such Act (42 U.S.C. 701(b)) is amended by add9 ing at the end the following new paragraph:

10 ‘‘(5) ABSTINENCE EDUCATION.—For purposes

11 of this subsection, the term ‘abstinence education’

12 means an educational or motivational program

13 which—

14 ‘‘(A) has as its exclusive purpose, teaching

15 the social, psychological, and health gains to be

16 realized by abstaining from sexual activity;

17 ‘‘(B) teaches abstinence from sexual activ18 ity outside marriage as the expected standard

19 for all school age children;

20 ‘‘(C) teaches that abstinence from sexual

21 activity is the only certain way to avoid out-of22 wedlock pregnancy, sexually transmitted dis23 eases, and other associated health problems;

24 ‘‘(D) teaches that a mutually faithful

25 monogamous relationship in context of marriage
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•S 1956 PCS

1 is the expected standard of human sexual activ2 ity;

3 ‘‘(E) teaches that sexual activity outside of

4 the context of marriage is likely to have harm5 ful psychological and physical effects;

6 ‘‘(F) teaches that bearing children out-of7 wedlock is likely to have harmful consequences

8 for the child, the child’s parents, and society;

9 ‘‘(G) teaches young people how to reject

10 sexual advances and how alcohol and drug use

11 increases vulnerability to sexual advances; and

12 ‘‘(H) teaches the importance of attaining

13 self-sufficiency before engaging in sexual activ14 ity.’’.

15 (d) SET-ASIDE.—

16 (1) IN GENERAL.—Section 502(c) of such Act

17 (42 U.S.C. 702(c)) is amended in the matter preced18 ing paragraph (1) by striking ‘‘From’’ and inserting

19 ‘‘Except as provided in subsection (e), from’’.

20 (2) SET-ASIDE.—Section 502 of such Act (42

21 U.S.C. 702) is amended by adding at the end the

22 following new subsection:

23 ‘‘(e) Of the amounts appropriated under section

24 501(a) for any fiscal year, the Secretary shall set aside
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•S 1956 PCS

1 $75,000,000 for abstinence education in accordance with

2 section 501(a)(1)(E).’’.

3 SEC. 2910. PROVISIONS TO ENCOURAGE ELECTRONIC BEN4 EFIT TRANSFER SYSTEMS.

5 Section 904 of the Electronic Fund Transfer Act (15

6 U.S.C. 1693b) is amended—

7 (1) by striking ‘‘(d) In the event’’ and inserting

8 ‘‘(d) APPLICABILITY TO SERVICE PROVIDERS

9 OTHER THAN CERTAIN FINANCIAL INSTITU10 TIONS.—

11 ‘‘(1) IN GENERAL.—In the event’’; and

12 (2) by adding at the end the following new

13 paragraph:

14 ‘‘(2) STATE AND LOCAL GOVERNMENT ELEC15 TRONIC BENEFIT TRANSFER PROGRAMS.—

16 ‘‘(A) EXEMPTION GENERALLY.—The dis17 closures, protections, responsibilities, and rem18 edies established under this title, and any regu19 lation prescribed or order issued by the Board

20 in accordance with this title, shall not apply to

21 any electronic benefit transfer program estab22 lished under State or local law or administered

23 by a State or local government.

24 ‘‘(B) EXCEPTION FOR DIRECT DEPOSIT

25 INTO RECIPIENT’S ACCOUNT.—Subparagraph
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1 (A) shall not apply with respect to any elec2 tronic funds transfer under an electronic benefit

3 transfer program for deposits directly into a

4 consumer account held by the recipient of the

5 benefit.

6 ‘‘(C) RULE OF CONSTRUCTION.—No provi7 sion of this paragraph may be construed as—

8 ‘‘(i) affecting or altering the protec9 tions otherwise applicable with respect to

10 benefits established by Federal, State, or

11 local law; or

12 ‘‘(ii) otherwise superseding the appli13 cation of any State or local law.

14 ‘‘(D) ELECTRONIC BENEFIT TRANSFER

15 PROGRAM DEFINED.—For purposes of this

16 paragraph, the term ‘electronic benefit transfer

17 program’—

18 ‘‘(i) means a program under which a

19 government agency distributes needs-tested

20 benefits by establishing accounts to be

21 accessed by recipients electronically, such

22 as through automated teller machines, or

23 point-of-sale terminals; and

24 ‘‘(ii) does not include employment-re25 lated payments, including salaries and pen-
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•S 1956 PCS

1 sion, retirement, or unemployment benefits

2 established by Federal, State, or local gov3 ernments.’’.

4 SEC. 2911. RULES RELATING TO DENIAL OF EARNED IN5 COME CREDIT ON BASIS OF DISQUALIFIED

6 INCOME.

7 (a) REDUCTION IN DISQUALIFIED INCOME THRESH8 OLD.—

9 (1) IN GENERAL.—Paragraph (1) of section

10 32(i) of the Internal Revenue Code of 1986 (relating

11 to denial of credit for individuals having excessive

12 investment income) is amended by striking ‘‘$2,350’’

13 and inserting ‘‘$2,200’’.

14 (2) ADJUSTMENT FOR INFLATION.—Subsection

15 (j) of section 32 of such Code is amended to read

16 as follows:

17 ‘‘(j) INFLATION ADJUSTMENTS.—

18 ‘‘(1) IN GENERAL.—In the case of any taxable

19 year beginning after 1996, each of the dollar

20 amounts in subsections (b)(2)(A) and (i)(1) shall be

21 increased by an amount equal to—

22 ‘‘(A) such dollar amount, multiplied by

23 ‘‘(B) the cost-of-living adjustment deter24 mined under section 1(f)(3) for the calendar

25 year in which the taxable year begins, deter-
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•S 1956 PCS

1 mined by substituting ‘calendar year 1995’ for

2 ‘calendar year 1992’ in subparagraph (B)

3 thereof.

4 ‘‘(2) ROUNDING.—

5 ‘‘(A) IN GENERAL.—If any dollar amount

6 in subsection (b)(2), after being increased

7 under paragraph (1), is not a multiple of $10,

8 such dollar amount shall be rounded to the

9 nearest multiple of $10.

10 ‘‘(B) DISQUALIFIED INCOME THRESHOLD

11 AMOUNT.—If the dollar amount in subsection

12 (i)(1), after being increased under paragraph

13 (1), is not a multiple of $50, such amount shall

14 be rounded to the next lowest multiple of $50.’’.

15 (3) CONFORMING AMENDMENTS.—The table

16 contained in section 32(b)(2)(A) of the Internal Rev17 enue Code of 1986 is amended—

18 (1) by striking ‘‘$6,000’’ and inserting

19 ‘‘$6,330’’,

20 (2) by striking ‘‘$11,000’’ both places it ap21 pears and inserting ‘‘$11,610’’,

22 (3) by striking ‘‘$8,425’’ and inserting

23 ‘‘$8,890’’,

24 (4) by striking ‘‘$4,000’’ and inserting

25 ‘‘$4,220’’, and
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1 (5) by striking ‘‘$5,000’’ and inserting

2 ‘‘$5,280’’.

3 (b) DEFINITION OF DISQUALIFIED INCOME.—Para4 graph (2) of section 32(i) of such Code (defining disquali5 fied income) is amended by striking ‘‘and’’ at the end of

6 subparagraph (B), by striking the period at the end of

7 subparagraph (C) and inserting a comma, and by adding

8 at the end the following new subparagraphs:

9 ‘‘(D) the capital gain net income (as de10 fined in section 1222) of the taxpayer for such

11 taxable year, and

12 ‘‘(E) the excess (if any) of—

13 ‘‘(i) the aggregate income from all

14 passive activities for the taxable year (de15 termined without regard to any amount in16 cluded in earned income under subsection

17 (c)(2) or described in a preceding subpara18 graph), over

19 ‘‘(ii) the aggregate losses from all pas20 sive activities for the taxable year (as so

21 determined).

22 For purposes of subparagraph (E), the term ‘passive

23 activity’ has the meaning given such term by section

24 469.’’.

25 (c) EFFECTIVE DATES.—
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1 (1) IN GENERAL.—Except as provided in para2 graph (2), the amendments made by this section

3 shall apply to taxable years beginning after Decem4 ber 31, 1995.

5 (2) ADVANCE PAYMENT INDIVIDUALS.—In the

6 case of any individual who on or before June 26,

7 1996, has in effect an earned income eligibility cer8 tificate for the individual’s taxable year beginning in

9 1996, the amendments made by this section shall

10 apply to taxable years beginning after December 31,

11 1996.

12 SEC. 2912. MODIFICATION OF ADJUSTED GROSS INCOME

13 DEFINITION FOR EARNED INCOME CREDIT.

14 (a) IN GENERAL.—Subsections (a)(2)(B), (c)(1)(C),

15 and (f)(2)(B) of section 32 of the Internal Revenue Code

16 of 1986 are each amended by striking ‘‘adjusted gross in17 come’’ each place it appears and inserting ‘‘modified ad18 justed gross income’’.

19 (b) MODIFIED ADJUSTED GROSS INCOME DE20 FINED.—Section 32(c) of such Code (relating to defini21 tions and special rules) is amended by adding at the end

22 the following new paragraph:

23 ‘‘(5) MODIFIED ADJUSTED GROSS INCOME.—
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•S 1956 PCS

1 ‘‘(A) IN GENERAL.—The term ‘modified

2 adjusted gross income’ means adjusted gross in3 come—

4 ‘‘(i) increased by the sum of the

5 amounts described in subparagraph (B),

6 and

7 ‘‘(ii) determined without regard to the

8 amounts described in subparagraph (C).

9 ‘‘(B) NONTAXABLE INCOME TAKEN INTO

10 ACCOUNT.—Amounts described in this subpara11 graph are—

12 ‘‘(i) interest received or accrued dur13 ing the taxable year which is exempt from

14 tax imposed by this chapter, and

15 ‘‘(ii) amounts received as a pension or

16 annuity, and any distributions or payments

17 received from an individual retirement

18 plan, by the taxpayer during the taxable

19 year to the extent not included in gross in20 come.

21 Clause (ii) shall not include any amount which

22 is not includible in gross income by reason of

23 section 402(c), 403(a)(4), 403(b)(8), 408(d)

24 (3), (4), or (5), or 457(e)(10).
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•S 1956 PCS

1 ‘‘(C) CERTAIN AMOUNTS DISREGARDED.—

2 An amount is described in this subparagraph if

3 it is—

4 ‘‘(i) the amount of losses from sales

5 or exchanges of capital assets in excess of

6 gains from such sales or exchanges to the

7 extent such amount does not exceed the

8 amount under section 1211(b)(1),

9 ‘‘(ii) the net loss from estates and

10 trusts,

11 ‘‘(iii) the excess (if any) of amounts

12 described in subsection (i)(2)(C)(ii) over

13 the amounts described in subsection

14 (i)(2)(C)(i) (relating to nonbusiness rents

15 and royalties), and

16 ‘‘(iv) the net loss from the carrying on

17 of trades or businesses, computed sepa18 rately with respect to—

19 ‘‘(I) trades or businesses (other

20 than farming) conducted as sole pro21 prietorships,

22 ‘‘(II) trades or businesses of

23 farming conducted as sole proprietor24 ships, and

25 ‘‘(III) other trades or businesses.
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•S 1956 PCS

1 For purposes of clause (iv), there shall not be

2 taken into account items which are attributable

3 to a trade or business which consists of the per4 formance of services by the taxpayer as an em5 ployee.’’.

6 (c) EFFECTIVE DATES.—

7 (1) IN GENERAL.—Except as provided in para8 graph (2), the amendments made by this section

9 shall apply to taxable years beginning after Decem10 ber 31, 1995.

11 (2) ADVANCE PAYMENT INDIVIDUALS.—In the

12 case of any individual who on or before June 26,

13 1996, has in effect an earned income eligibility cer14 tificate for the individual’s taxable year beginning in

15 1996, the amendments made by this section shall

16 apply to taxable years beginning after December 31,

17 1996.

18 SEC. 2913. SUSPENSION OF INFLATION ADJUSTMENTS FOR

19 INDIVIDUALS WITH NO QUALIFYING CHIL20 DREN.

21 (a) IN GENERAL.—Subsection (j) of section 32 of the

22 Internal Revenue Code of 1986, as amended by section

23 2911(a)(2) of this Act, is amended by adding at the end

24 the following new paragraph:
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•S 1956 PCS

1 ‘‘(3) NO ADJUSTMENT FOR INDIVIDUALS WITH

2 NO QUALIFYING CHILDREN.—This subsection shall

3 not apply to each dollar amount contained in sub4 section (b)(2)(A) with respect to individuals with no

5 qualifying children.’’.

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

7 this section shall apply to taxable years beginning after

8 December 31, 1996.

9 Subtitle B—Restructuring

10 Medicaid

11 SEC. 2920. SHORT TITLE OF SUBTITLE.

12 This subtitle may be cited as the ‘‘Medicaid Restruc13 turing Act of 1996’’.

14 SEC. 2921. TABLE OF CONTENTS OF SUBTITLE.

15 The table of contents for this subtitle is as follows:

Sec. 2920. Short title of subtitle.

Sec. 2921. Table of contents of subtitle.

Sec. 2922. Finding; goals for medicaid restructuring.

Sec. 2923. Restructuring the medicaid program.

Sec. 2924. State election; termination of current program; and transition.

Sec. 2925. Integration demonstration project.

Sec. 2926. National Commission on Medicaid and State-Based Health Care Reform.

16 SEC. 2922. FINDING; GOALS FOR MEDICAID RESTRUCTUR17 ING.

18 (a) FINDING.—The Congress finds that the National

19 Governors’ Association on February 6, 1996, adopted

20 unanimously and on a bipartisan basis goals to guide the

21 restructuring of the medicaid program.
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1 (b) GOALS FOR RESTRUCTURING.—The following are

2 the 4 primary goals so adopted:

3 (1) The basic health care needs of the nation’s

4 most vulnerable populations must be guaranteed.

5 (2) The growth in health care expenditures

6 must be brought under control.

7 (3) States must have maximum flexibility in the

8 design and implementation of cost-effective systems

9 of care.

10 (4) States must be protected from unantici11 pated program costs resulting from economic fluc12 tuations in the business cycle, changing demo13 graphics, and natural disasters.

14 SEC. 2923. RESTRUCTURING THE MEDICAID PROGRAM.

15 The Social Security Act is amended by inserting after

16 title XIV the following new title:

‘‘TITLE XV—PROGRAM OF MEDICAL ASSISTANCE FOR LOWINCOME INDIVIDUALS AND FAMILIES

‘‘TABLE OF CONTENTS OF TITLE

‘‘Sec. 1500. Purpose; State plans.

‘‘PART A—ELIGIBILITY AND BENEFITS

‘‘Sec. 1501. Guaranteed eligibility and benefits.

‘‘Sec. 1502. Other provisions relating to eligibility and benefits.

‘‘Sec. 1503. Limitations on cost-sharing.

‘‘Sec. 1504. Requirements relating to medical assistance provided through managed care arrangements.

‘‘Sec. 1505. Preventing spousal impoverishment.

‘‘Sec. 1506. Preventing family impoverishment.

‘‘Sec. 1507. State flexibility.

‘‘Sec. 1508. Private rights of action.

‘‘PART B—PAYMENTS TO STATES

‘‘Sec. 1511. Allotment of funds among States.
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‘‘Sec. 1512. Payments to States.

‘‘Sec. 1513. Limitation on use of funds; disallowance.

‘‘PART C—ESTABLISHMENT AND AMENDMENT OF STATE PLANS

‘‘Sec. 1521. Description of strategic objectives and performance goals.

‘‘Sec. 1522. Annual reports.

‘‘Sec. 1523. Periodic, independent evaluations.

‘‘Sec. 1524. Description of process for State plan development.

‘‘Sec. 1525. Consultation in State plan development.

‘‘Sec. 1526. Submittal and approval of State plans.

‘‘Sec. 1527. Submittal and approval of plan amendments.

‘‘Sec. 1528. Process for State withdrawal from program.

‘‘Sec. 1529. Sanctions for noncompliance.

‘‘Sec. 1530. Secretarial authority.

‘‘PART D—PROGRAM INTEGRITY AND QUALITY

‘‘Sec. 1551. Use of audits to achieve fiscal integrity.

‘‘Sec. 1552. Fraud prevention program.

‘‘Sec. 1553. Information concerning sanctions taken by State licensing authorities against health care practitioners and providers.

‘‘Sec. 1554. State fraud control units.

‘‘Sec. 1555. Recoveries from third parties and others.

‘‘Sec. 1556. Assignment of rights of payment.

‘‘Sec. 1557. Quality assurance requirements for nursing facilities.

‘‘Sec. 1558. Other provisions promoting program integrity.

‘‘PART E—GENERAL PROVISIONS

‘‘Sec. 1571. Definitions.

‘‘Sec. 1572. Treatment of territories.

‘‘Sec. 1573. Description of treatment of Indian Health Service facilities and related programs.

‘‘Sec. 1574. Application of certain general provisions.

‘‘Sec. 1575. Optional master drug rebate agreements.

1 ‘‘SEC. 1500. PURPOSE; STATE PLANS.

2 ‘‘(a) PURPOSE.—The purpose of this title is to pro3 vide funds to States to enable them to provide medical

4 assistance to low-income individuals and families in a

5 more effective, efficient, and responsive manner.

6 ‘‘(b) STATE PLAN REQUIRED.—A State is not eligible

7 for payment under section 1512 unless the State has sub8 mitted to the Secretary under part C a plan (in this title

9 referred to as a ‘State plan’) that—
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1 ‘‘(1) sets forth how the State intends to use the

2 funds provided under this title to provide medical as3 sistance to needy individuals and families consistent

4 with the provisions of this title, and

5 ‘‘(2) is approved under such part.

6 ‘‘(c) CONTINUED APPROVAL.—An approved State

7 plan shall continue in effect unless and until—

8 ‘‘(1) the State amends the plan under section

9 1527,

10 ‘‘(2) the State terminates participation under

11 this title under section 1528, or

12 ‘‘(3) the Secretary finds substantial noncompli13 ance of the plan with the requirements of this title

14 under section 1529.

15 ‘‘(d) STATE ENTITLEMENT.—This title constitutes

16 budget authority in advance of appropriations Acts and

17 represents the obligation of the Federal Government to

18 provide for the payment to States (and, beginning on Oc19 tober 1, 1997, to facilities or programs described in sec20 tion 1512(f)(3)(B)(iii)) of amounts provided under part

21 B.

22 ‘‘(e) EFFECTIVE DATE.—No State is eligible for pay23 ments under section 1512 for any calendar quarter begin24 ning before October 1, 1996.
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•S 1956 PCS

1 ‘‘PART A—ELIGIBILITY AND BENEFITS

2 ‘‘SEC. 1501. GUARANTEED ELIGIBILITY AND BENEFITS.

3 ‘‘(a) GUARANTEED COVERAGE AND BENEFITS FOR

4 CERTAIN POPULATIONS.—

5 ‘‘(1) IN GENERAL.—Each State plan shall pro6 vide for making medical assistance available for ben7 efits in the guaranteed benefit package (as defined

8 in paragraph (2)) to individuals within each of the

9 following categories:

10 ‘‘(A) POOR PREGNANT WOMEN.—Pregnant

11 women with family income below 133 percent of

12 the poverty line.

13 ‘‘(B) CHILDREN UNDER 6.—Children

14 under 6 years of age whose family income does

15 not exceed 133 percent of the poverty line.

16 ‘‘(C) CHILDREN 6 TO 19.—Children born

17 after September 30, 1983, who are over 5 years

18 of age, but under 19 years of age, whose family

19 income does not exceed 100 percent of the pov20 erty line.

21 ‘‘(D) DISABLED INDIVIDUALS.—As elected

22 by the State under paragraph (3), either—

23 ‘‘(i) disabled individuals (as defined

24 by the State) who meet the income and re-
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•S 1956 PCS

1 source standards established under the

2 plan, or

3 ‘‘(ii) individuals who are under 65

4 years of age, who are disabled (as deter5 mined under section 1614(a)(3)), and who,

6 using the methodology provided for deter7 mining eligibility for payment of supple8 mental security income benefits under title

9 XVI, meet the income and resource stand10 ards for payment of such benefits.

11 ‘‘(E) POOR ELDERLY INDIVIDUALS.—Sub12 ject to paragraph (4), elderly individuals who,

13 using the methodology provided for determining

14 eligibility for payment of supplemental security

15 income benefits under title XVI, meet the in16 come and resource standards for payment of

17 such benefits.

18 ‘‘(F) CHILDREN RECEIVING FOSTER CARE

19 OR ADOPTION ASSISTANCE.—Subject to para20 graph (5), children who meet the requirements

21 for receipt of foster care maintenance payments

22 or adoption assistance under title IV.

23 ‘‘(G) CERTAIN LOW-INCOME FAMILIES.—

24 Subject to paragraph (6), individuals and mem25 bers of families who meet current AFDC in-
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•S 1956 PCS

1 come, resource, and eligibility standards (as de2 fined in paragraph (6)(C)) in the State.

3 ‘‘(2) GUARANTEED BENEFITS PACKAGE.—

4 ‘‘(A) IN GENERAL.—In this title, the term

5 ‘guaranteed benefit package’ means benefits (in

6 an amount, duration, and scope specified under

7 the State plan) for at least the following cat8 egories of services:

9 ‘‘(i) Inpatient and outpatient hospital

10 services.

11 ‘‘(ii) Physicians’ surgical and medical

12 services.

13 ‘‘(iii) Laboratory and x-ray services.

14 ‘‘(iv) Nursing facility services.

15 ‘‘(v) Home health care.

16 ‘‘(vi) Federally-qualified health center

17 services and rural health clinic services.

18 ‘‘(vii) Immunizations for children (in

19 accordance with a schedule for immuniza20 tions established by the Health Depart21 ment of the State in consultation with the

22 State agency responsible for the adminis23 tration of the plan).
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1 ‘‘(viii) Prepregnancy family planning

2 services and supplies (as specified by the

3 State).

4 ‘‘(ix) Prenatal care.

5 ‘‘(x) Physician assistant services (to

6 the extent such services are authorized

7 under State law or regulation), pediatric

8 and family nurse practitioner services and

9 nurse midwife services.

10 ‘‘(xi) EPSDT services (as defined in

11 section 1571(e)) for individuals who are

12 under the age of 21.

13 ‘‘(B) AMOUNT, DURATION, AND SCOPE.—

14 ‘‘(i) IN GENERAL.—The amount, du15 ration, and scope of benefits specified

16 under the State plan must be sufficient to

17 reasonably achieve the purpose of the bene18 fit. A State may establish criteria, includ19 ing medical necessity, utilization review,

20 and cost effectiveness of alternative cov21 ered services, for purposes of limiting the

22 amount, duration, and scope of benefits

23 provided under the State plan.

24 ‘‘(ii) EPSDT SERVICES.—The amount,

25 duration, and scope of EPSDT services for
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•S 1956 PCS

1 individuals who are under the age of 21

2 may not be less than the amount, duration,

3 and scope of such services provided under

4 the State plan under title XIX (as in effect

5 on June 1, 1996).

6 ‘‘(3) STATE ELECTION OF DISABLED INDIVID7 UALS TO BE GUARANTEED COVERAGE.—

8 ‘‘(A) IN GENERAL.—Each State shall

9 specify in its State plan, before the beginning of

10 each Federal fiscal year, whether to guarantee

11 coverage of disabled individuals under the plan

12 under the option described in paragraph

13 (1)(D)(i) or under the option described in para14 graph (1)(D)(ii). An election under this para15 graph shall continue in effect for the subse16 quent fiscal year unless the election is changed

17 before the beginning of the fiscal year.

18 ‘‘(B) CONSEQUENCES OF ELECTION.—

19 ‘‘(i) STATE FLEXIBLE DEFINITION OP20 TION.—If a State elects the option de21 scribed in paragraph (1)(D)(i) for a fiscal

22 year—

23 ‘‘(I) the State plan must provide

24 under section 1502(c) for a set aside
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1 of funds for disabled individuals for

2 the fiscal year, and

3 ‘‘(II) disabled individuals are not

4 taken into account in determining a

5 State supplemental umbrella allotment

6 under section 1511(g).

7 ‘‘(ii) SSI DEFINITION OPTION.—If a

8 State elects the option described in para9 graph (1)(D)(ii) for a fiscal year—

10 ‘‘(I) section 1502(c) shall not

11 apply for the fiscal year, and

12 ‘‘(II) the State is eligible for an

13 increase under section 1511(g) in its

14 outlay allotment for the fiscal year

15 based on an increase in the number of

16 guaranteed and optional disabled indi17 viduals covered under the plan.

18 ‘‘(4) CONTINUATION OF SPECIAL ELIGIBILITY

19 STANDARDS FOR SECTION 209(b) STATES.—

20 ‘‘(A) IN GENERAL.—A section 209(b)

21 State (as defined in subparagraph (B)) may

22 elect to treat any reference in paragraph (1)(E)

23 to ‘elderly individuals who meet the income and

24 resource standards for the payment of supple25 mental security income benefits under title
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•S 1956 PCS

1 XVI’ as a reference to ‘elderly individuals who

2 meet the standards described in the first sen3 tence of section 1902(f) (as in effect on the day

4 before the date of the enactment of this title)’.

5 ‘‘(B) SECTION 209(b) STATE DEFINED.—In

6 subparagraph (A), the term ‘section 209(b)

7 State’ means a State to which section 1902(f)

8 applied as of the day before the date of the en9 actment of this title.

10 ‘‘(5) OPTION FOR APPLICATION OF CURRENT

11 REQUIREMENTS FOR CERTAIN CHILDREN.—A State

12 may elect to apply paragraph (1)(F) by treating any

13 reference to ‘requirements for receipt of foster care

14 maintenance payments or adoption assistance under

15 title IV’ as a reference to ‘requirements for receipt

16 of foster care maintenance payments or adoption as17 sistance as in effect under its State plan under part

18 E of title IV as of the date of the enactment of this

19 title’.

20 ‘‘(6) SPECIAL RULES FOR LOW-INCOME FAMI21 LIES.—

22 ‘‘(A) OPTIONAL USE OF LOWER NATIONAL

23 AVERAGE STANDARDS.—In the case of a State

24 in which the current AFDC income, resource,

25 and eligibility standards are above the national
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1 average of the current AFDC income, resource,

2 and eligibility standards for the 50 States and

3 the District of Columbia, as determined and

4 published by the Secretary, in applying para5 graph (1)(G), the State may elect to substitute

6 such national average income, resource, and eli7 gibility standards for the current AFDC in8 come, resource, and eligibility standards in that

9 State.

10 ‘‘(B) OPTIONAL ELIGIBILITY BASED ON

11 LINK TO OTHER ASSISTANCE.—

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

13 (ii), in the case of a State which maintains

14 a link between eligibility for aid or assist15 ance under one or more parts of title IV

16 and eligibility for medical assistance under

17 this title, in applying paragraph (1)(G),

18 the State may elect to treat any reference

19 in such paragraph to ‘individuals and

20 members of families who meet current

21 AFDC income, resource, and eligibility

22 standards in the State’ as a reference to

23 ‘members of families who are receiving as24 sistance under a State plan under part A

25 or E of title IV’.
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1 ‘‘(ii) LIMITATION ON ELECTION.—A

2 State may only make the election described

3 in clause (i) if, and so long as, the State

4 demonstrates to the satisfaction of the Sec5 retary that the such election does not re6 sult in Federal expenditures under this

7 title (taking into account any supplemental

8 amounts provided pursuant to section

9 1511(g)) that are greater than the Federal

10 expenditures that would have been made

11 under this title if the State had not made

12 such election.

13 ‘‘(C) CURRENT AFDC INCOME, RESOURCE,

14 AND ELIGIBILITY STANDARDS DEFINED.—In

15 this subsection, the term ‘current AFDC in16 come, resource, and eligibility standards’

17 means, with respect to a State, the income, re18 source, and eligibility standards for the pay19 ment of assistance under the State plan under

20 part A or E of title IV (as in effect as of May

21 1, 1996).

22 ‘‘(D) MEDICAL ASSISTANCE REQUIRED TO

23 BE PROVIDED FOR 1 YEAR FOR CERTAIN LOW24 INCOME FAMILIES DURING THE TRANSITION

25 FROM WELFARE TO WORK.—Each State plan
676

•S 1956 PCS

1 shall provide that medical assistance under this

2 title for a family described in section

3 408(a)(12) of this Act shall be provided to such

4 family in accordance with such section.

5 ‘‘(E) STATE OPTION TO CONTINUE TO

6 PROVIDE MEDICAL ASSISTANCE DURING THE

7 TRANSITION FROM WELFARE TO WORK.—Noth8 ing in this title shall be construed as preventing

9 a State from continuing to provide medical as10 sistance under a State plan under this title to

11 an individual or a member of such individual’s

12 family who—

13 ‘‘(i) is eligible for medical assistance

14 under this title as a result of a link be15 tween eligibility for such medical assistance

16 and aid or assistance under one or more

17 parts of title IV or any other program of

18 assistance based on need; and

19 ‘‘(ii) because of hours of, or income

20 from, employment is no longer eligible for

21 such aid or assistance.

22 ‘‘(7) METHODOLOGY.—Family income shall be

23 determined for purposes of subparagraphs (A)

24 through (C) of paragraph (1) in the same manner

25 (and using the same methodology) as income was
677

•S 1956 PCS

1 determined under the State medicaid plan under sec2 tion 1902(l) (as in effect as of May 1, 1996).

3 ‘‘(b) GUARANTEED COVERAGE OF MEDICARE PRE4 MIUMS AND COST-SHARING FOR CERTAIN MEDICARE

5 BENEFICIARIES.—

6 ‘‘(1) GUARANTEED ELIGIBILITY.—Each State

7 plan shall provide—

8 ‘‘(A) for making medical assistance avail9 able for required medicare cost-sharing (as de10 fined in paragraph (2)) for qualified medicare

11 beneficiaries described in paragraph (3);

12 ‘‘(B) for making medical assistance avail13 able for payment of medicare premiums under

14 section 1818A for qualified disabled and work15 ing individuals described in paragraph (4); and

16 ‘‘(C) for making medical assistance avail17 able for payment of medicare premiums under

18 section 1839 for individuals who would be quali19 fied medicare beneficiaries described in para20 graph (3) but for the fact that their income ex21 ceeds 100 percent, but is less than 120 percent,

22 of the poverty line for a family of the size in23 volved.

24 ‘‘(2) REQUIRED MEDICARE COST-SHARING DE25 FINED.—
678

•S 1956 PCS

1 ‘‘(A) IN GENERAL.—In this subsection, the

2 term ‘required medicare cost-sharing’ means,

3 with respect to an individual, costs incurred for

4 medicare cost-sharing described in paragraphs

5 (1) through (4) of section 1571(c) (and, at the

6 option of a State, section 1571(c)(5))) without

7 regard to whether the costs incurred were for

8 items and services for which medical assistance

9 is otherwise available under the plan.

10 ‘‘(B) LIMITATION ON OBLIGATION FOR

11 CERTAIN COST-SHARING ASSISTANCE.—In the

12 case of medical assistance furnished under this

13 title for medicare cost-sharing described in

14 paragraph (2), (3), or (4) of section 1571(c) re15 lating to the furnishing of a service or item to

16 a medicare beneficiary, nothing in this title

17 shall be construed as preventing a State plan—

18 ‘‘(i) from limiting the assistance to

19 the amount (if any) by which (I) the

20 amount that is otherwise payable under

21 the plan for the item or service for eligible

22 individuals who are not such medicare

23 beneficiaries (or, if payments for such

24 items or services are made on a capitated

25 basis, an amount reasonably related or de-
679

•S 1956 PCS

1 rived from such capitated payment

2 amount), exceeds (II) the amount of pay3 ment (if any) made under title XVIII with

4 respect to the service or item, and

5 ‘‘(ii) if the amount described in sub6 clause (II) of clause (i) exceeds the amount

7 described in subclause (I) of such clause,

8 from treating the amount paid under title

9 XVIII as payment in full and not requiring

10 or providing for any additional medical as11 sistance under this subsection.

12 ‘‘(3) QUALIFIED MEDICARE BENEFICIARY DE13 FINED.—In this subsection, the term ‘qualified med14 icare beneficiary’ means an individual—

15 ‘‘(A) who is entitled to hospital insurance

16 benefits under part A of title XVIII (including

17 an individual entitled to such benefits pursuant

18 to an enrollment under section 1818, but not

19 including an individual entitled to such benefits

20 only pursuant to an enrollment under section

21 1818A),

22 ‘‘(B) whose income (as determined under

23 section 1612 for purposes of the supplemental

24 security income program, except as provided in

25 paragraph (5)) does not exceed 100 percent of
680

•S 1956 PCS

1 the poverty line applicable to a family of the

2 size involved, and

3 ‘‘(C) whose resources (as determined under

4 section 1613 for purposes of the supplemental

5 security income program) do not exceed twice

6 the maximum amount of resources that an indi7 vidual may have and obtain benefits under that

8 program.

9 ‘‘(4) QUALIFIED DISABLED AND WORKING INDI10 VIDUAL DEFINED.—In this subsection, the term

11 ‘qualified disabled and working individual’ means an

12 individual—

13 ‘‘(A) who is entitled to enroll for hospital

14 insurance benefits under part A of title XVIII

15 under section 1818A;

16 ‘‘(B) whose income (as determined under

17 section 1612 for purposes of the supplemental

18 security income program) does not exceed 200

19 percent of the poverty line applicable to a fam20 ily of the size involved;

21 ‘‘(C) whose resources (as determined under

22 section 1613 for purposes of the supplemental

23 security income program) do not exceed twice

24 the maximum amount of resources that an indi25 vidual or a couple (in the case of an individual
681

•S 1956 PCS

1 with a spouse) may have and obtain benefits for

2 supplemental security income benefits under

3 title XVI; and

4 ‘‘(D) who is not otherwise eligible for med5 ical assistance under this title.

6 ‘‘(5) INCOME DETERMINATIONS.—

7 ‘‘(A) IN GENERAL.—In determining under

8 this subsection the income of an individual who

9 is entitled to monthly insurance benefits under

10 title II for a transition month (as defined in

11 subparagraph (B)) in a year, such income shall

12 not include any amounts attributable to an in13 crease in the level of monthly insurance benefits

14 payable under such title which have occurred

15 pursuant to section 215(i) for benefits payable

16 for months beginning with December of the

17 previous year.

18 ‘‘(B) TRANSITION MONTH DEFINED.—For

19 purposes of subparagraph (A), the term ‘transi20 tion month’ means each month in a year

21 through the month following the month in

22 which the annual revision of the poverty line is

23 published.
682

•S 1956 PCS

1 ‘‘SEC. 1502. OTHER PROVISIONS RELATING TO ELIGIBILITY

2 AND BENEFITS.

3 ‘‘(a) OPTIONAL ELIGIBILITY GROUPS FOR WHICH

4 UMBRELLA SUPPLEMENTAL FUNDING IS AVAILABLE.—

5 In addition to the guaranteed coverage categories de6 scribed in section 1501(a)(1), the following are population

7 groups with respect to which supplemental allotments may

8 be made under section 1511(g), but only if (for the indi9 vidual involved) medical assistance is made available under

10 the State plan for the guaranteed benefit package (as de11 fined in section 1501(a)(2)):

12 ‘‘(1) CERTAIN DISABLED INDIVIDUALS.—Indi13 viduals (not described in section 1501(a)(1)(D)(ii))

14 who are disabled (as determined under section

15 1614(a)(3)), covered under the State plan, and meet

16 the eligibility standards for coverage under the State

17 medicaid plan under title XIX (as in effect as of

18 May 1, 1996).

19 ‘‘(2) CERTAIN ELDERLY INDIVIDUALS.—Elderly

20 individuals (not described in section 1501(a)(1)(E))

21 who are covered under the State plan and who meet

22 the eligibility standards for coverage under the State

23 medicaid plan under title XIX (as in effect as of

24 May 1, 1996) other than solely on the basis of being

25 an individual described in section 1902(a)(10)(E).
683

•S 1956 PCS

1 Eligibility under paragraphs (1) and (2) shall be deter2 mined using the methodologies that are not more restric3 tive than the methodologies used under the State medicaid

4 plan as in effect as of May 1, 1996.

5 ‘‘(b) OTHER PROVISIONS RELATING TO GENERAL

6 ELIGIBILITY AND BENEFITS.—

7 ‘‘(1) GENERAL DESCRIPTION.—Each State plan

8 shall include a description (consistent with this title)

9 of the following:

10 ‘‘(A) GENERAL ELIGIBILITY GUIDE11 LINES.—The general eligibility guidelines of the

12 plan for eligible low-income individuals, includ13 ing—

14 ‘‘(i) for individuals other than those

15 covered under subsection (a) or (b) of sec16 tion 1501, any limitations as to the dura17 tion of eligibility,

18 ‘‘(ii) any eligibility standards relating

19 to age, income and resources (including

20 any standards relating to spenddowns and

21 disposition of resources), residency, disabil22 ity status, immigration status, or employ23 ment status of individuals,

24 ‘‘(iii) methods of establishing and con25 tinuing eligibility and enrollment, including
684

•S 1956 PCS

1 the methodology for computing family in2 come,

3 ‘‘(iv) the eligibility standards in the

4 plan that protect the income and resources

5 of a married individual who is living in the

6 community and whose spouse is residing in

7 an institution in order to prevent the im8 poverishment of the community spouse,

9 and

10 ‘‘(v) for individuals other than those

11 covered under subsection (a) or (b) of sec12 tion 1501, any other standards relating to

13 eligibility for medical assistance under the

14 plan.

15 ‘‘(B) SCOPE OF ASSISTANCE.—The

16 amount, duration, and scope of health care

17 services and items covered under the plan, in18 cluding differences among different eligible pop19 ulation groups. The amount, duration, and

20 scope of benefits specified shall comport with

21 requirements of section 1501(a)(2)(B)(i).

22 ‘‘(C) DELIVERY METHOD.—The State’s

23 approach to delivery of medical assistance, in24 cluding a general description of—
685

•S 1956 PCS

1 ‘‘(i) the use (or intended use) of

2 vouchers, fee-for-service, or managed care

3 arrangements (such as capitated health

4 care plans, case management, and case co5 ordination); and

6 ‘‘(ii) utilization control systems.

7 ‘‘(D) FEE-FOR-SERVICE BENEFITS.—To

8 the extent that medical assistance is furnished

9 on a fee-for-service basis—

10 ‘‘(i) how the State determines the

11 qualifications of health care providers eligi12 ble to provide such assistance; and

13 ‘‘(ii) how the State determines rates

14 of reimbursement for providing such as15 sistance.

16 ‘‘(E) COST-SHARING.—Beneficiary cost17 sharing (if any), including variations in such

18 cost-sharing by population group or type of

19 service and financial responsibilities of parents

20 of recipients who are children and the spouses

21 of recipients.

22 ‘‘(F) UTILIZATION INCENTIVES.—Incen23 tives or requirements (if any) to encourage the

24 appropriate utilization of services.
686

•S 1956 PCS

1 ‘‘(G) SUPPORT FOR CERTAIN HOS2 PITALS.—

3 ‘‘(i) IN GENERAL.—With respect to

4 hospitals described in clause (ii) located in

5 the State, a description of the extent to

6 which provisions are made for expenditures

7 for items and services furnished by such

8 hospitals and covered under the State plan.

9 ‘‘(ii) HOSPITALS DESCRIBED.—A hos10 pital described in this clause is a short11 term acute care general hospital or a chil12 dren’s hospital, the low-income utilization

13 rate of which exceeds the lesser of—

14 ‘‘(I) 1 standard deviation above

15 the mean low-income utilization rate

16 for hospitals receiving payments under

17 a State plan in the State in which

18 such hospital is located, or

‘‘(II) 11 19 ⁄4 standard deviations

20 above the mean low-income utilization

21 rate for hospitals receiving such pay22 ments in the 50 States and the Dis23 trict of Columbia.

24 ‘‘(iii) LOW-INCOME UTILIZATION

25 RATE.—For purposes of clause (ii), the
687

•S 1956 PCS

1 term ‘low-income utilization rate’ means,

2 for a hospital, a fraction (expressed as a

3 percentage), the numerator of which is the

4 hospital’s number of patient days attrib5 utable to patients who (for such days) were

6 eligible for medical assistance under a

7 State plan or were uninsured in a period,

8 and the denominator of which is the total

9 number of the hospital’s patient days in

10 that period.

11 ‘‘(iv) PATIENT DAYS.—For purposes

12 of clause (iii), the term ‘patient day’ in13 cludes each day in which—

14 ‘‘(I) an individual, including a

15 newborn, is an inpatient in the hos16 pital, whether or not the individual is

17 in a specialized ward and whether or

18 not the individual remains in the hos19 pital for lack of suitable placement

20 elsewhere; or

21 ‘‘(II) an individual makes one or

22 more outpatient visits to the hospital.

23 ‘‘(H) IMPLEMENTATION OF SET ASIDES

24 FOR RURAL HEALTH CLINICS AND FEDERALLY25 QUALIFIED HEALTH CENTERS AND UTILIZA-
688

•S 1956 PCS

1 TION OF SERVICES.—How the State will imple2 ment the funding requirements imposed under

3 subsection (e) and how the State will utilize fa4 cilities described in such subsection to provide

5 services under the State plan.

6 ‘‘(2) CONDITIONS FOR GUARANTEES AND RELA7 TION OF GUARANTEES TO FINANCING.—The guaran8 tees of States required under subsection (a) and (b)

9 of section 1501 and subsection (d) of this section

10 are subject to the limitations on payment to the

11 States provided under section 1511 (including the

12 provisions of subsection (g), relating to supplemental

13 umbrella allotments). In submitting a plan under

14 this title, a State voluntarily agrees to accept pay15 ment amounts provided under such section as full

16 payment from the Federal Government in return for

17 providing for the benefits (including the guaranteed

18 benefit package) under this title.

19 ‘‘(3) SECONDARY PAYMENT.—Nothing in this

20 section shall be construed as preventing a State

21 from denying benefits to an individual to the extent

22 such benefits are available to the individual under

23 the medicare program under title XVIII or under

24 another public or private health care insurance pro25 gram.
689

•S 1956 PCS

1 ‘‘(4) RESIDENCY REQUIREMENT.—In the case

2 of an individual who—

3 ‘‘(A) is described in section 1501(a)(1),

4 ‘‘(B) changed residence from another State

5 to the State, and

6 ‘‘(C) has resided in the State for less than

7 180 days,

8 the State may limit the benefits provided to such in9 dividual in the guaranteed benefits package under

10 paragraph (2) of section 1501(a) to the amount, du11 ration, and scope of benefits available under the

12 State plan of the individual’s previous State of resi13 dence.

14 ‘‘(5) ACCESS TO SERVICES.—

15 ‘‘(A) PRIMARY CARE SERVICES.—The

16 State plan shall contain provisions which ensure

17 that an eligible low-income individual has access

18 to primary care services within 30 miles of such

19 individual’s residence, or, in the case of an eligi20 ble low-income individual residing in a rural

21 area, within a reasonable distance of such indi22 vidual’s residence, as determined by the Sec23 retary.

24 ‘‘(B) NURSING FACILITIES.—The State

25 plan shall contain provisions which ensure that
690

•S 1956 PCS

1 an eligible low-income individual has access to

2 nursing facility services within 50 miles of such

3 individual’s residence, or, in the case of an eligi4 ble low-income individual residing in a rural

5 area, within a reasonable distance of such indi6 vidual’s residence, as determined by the Sec7 retary.

8 ‘‘(6) SERVICES FOR INDIVIDUALS WITH DEVEL9 OPMENTAL DISABILITIES.—The State plan shall con10 tain provisions which ensure—

11 ‘‘(A) compliance with the minimum health,

12 safety, and welfare standards for individuals

13 with developmental disabilities who receive serv14 ices in an intermediate care facility for the

15 mentally retarded, home and community-based

16 health care services and related supportive serv17 ices, community supported living arrangements,

18 and transitional living arrangements established

19 under section 1558(c)(2); and

20 ‘‘(B) that treatment services provided for

21 each such individual are based on an individual22 ized plan which includes a goal to maintain, en23 hance, or support, or prevent or minimize the

24 deterioration of skills to maximize the potential

25 and independence of the individual.
691

•S 1956 PCS

1 ‘‘(c) SET-ASIDE OF FUNDS FOR THE LOW-INCOME

2 DISABLED.—

3 ‘‘(1) IN GENERAL.—In the case of a State that

4 has elected the option described in section

5 1501(a)(1)(D)(i) for a fiscal year, the State plan

6 shall provide that the percentage of funds expended

7 under the plan for medical assistance for eligible

8 low-income individuals who are not elderly individ9 uals and who are eligible for such assistance on the

10 basis of a disability, including being blind, for the

11 fiscal year is not less than the minimum low-income12 disabled percentage specified in paragraph (2) of the

13 total funds expended under the plan for medical as14 sistance for the fiscal year.

15 ‘‘(2) MINIMUM LOW-INCOME-DISABLED PER16 CENTAGE.—The minimum low-income-disabled per17 centage specified in this paragraph for a State is

18 equal to 90 percent of the percentage of the expendi19 tures under title XIX for medical assistance in the

20 State during Federal fiscal year 1995 which was at21 tributable to expenditures for medical assistance for

22 benefits furnished to individuals whose coverage (at

23 such time) was on a basis directly related to disabil24 ity status, including being blind.
692

•S 1956 PCS

1 ‘‘(3) COMPUTATIONS.—States shall calculate

2 the minimum percentage under paragraph (2) in a

3 reasonable manner consistent with reports submitted

4 to the Secretary for the fiscal years involved and

5 medical assistance attributable to the exception pro6 vided under section 1903(v)(2) shall not be consid7 ered to be expenditures for medical assistance.

8 ‘‘(d) PREEXISTING CONDITION EXCLUSIONS.—Not9 withstanding any other provision of this title—

10 ‘‘(1) a State plan may not deny or exclude cov11 erage of any item or service for an eligible individual

12 for benefits under the State plan for such item or

13 service on the basis of a preexisting condition; and

14 ‘‘(2) if a State contracts or makes other ar15 rangements (through the eligible individual or

16 through another entity) with a capitated health care

17 organization, insurer, or other entity, for the provi18 sion of items or services to eligible individuals under

19 the State plan and the State permits such organiza20 tion, insurer, or other entity to exclude coverage of

21 a covered item or service on the basis of a preexist22 ing condition, the State shall provide, through its

23 State plan, for such coverage (through direct pay24 ment or otherwise) for any such covered item or
693

•S 1956 PCS

1 service denied or excluded on the basis of a preexist2 ing condition.

3 ‘‘(e) SET ASIDE OF FUNDS FOR SERVICES PROVIDED

4 AT FEDERALLY-QUALIFIED HEALTH CENTERS AND

5 RURAL HEALTH CLINICS.—

6 ‘‘(1) RURAL HEALTH CLINIC SERVICES.—A

7 State plan shall provide that the amount of funds

8 expended under the plan for medical assistance for

9 services provided at rural health clinics (as defined

10 in section 1571(f)(1)), for eligible low-income indi11 viduals for a fiscal year is not less than 95 percent

12 of the rural health clinic base year expenditures (as

13 defined in paragraph (3)(A)), increased annually by

14 the State percentage growth factor (as defined in

15 section 1511(g)(3)(C)).

16 ‘‘(2) FEDERALLY-QUALIFIED HEALTH CENTER

17 SERVICES.—A State plan shall provide that the

18 amount of funds expended under the plan for medi19 cal assistance for services provided at federally-quali20 fied health centers (as defined in section

21 1571(f)(2)(B)), for eligible low-income individuals

22 for a fiscal year is not less than 95 percent of the

23 federally-qualified health center base year expendi24 tures (as defined in paragraph (3)(B)), increased
694

•S 1956 PCS

1 annually by the State percentage growth factor (as

2 defined in section 1511(g)(3)(C)).

3 ‘‘(3) BASE YEAR EXPENDITURES DEFINED.—

4 ‘‘(A) RURAL HEALTH CLINIC BASE YEAR

5 EXPENDITURES.—For purposes of paragraph

6 (1), the term ‘rural health clinic base year ex7 penditures’ means, with respect to a State, the

8 annual expenditures under title XIX for medi9 cal assistance in the State which were attrib10 utable to expenditures for medical assistance

11 for services provided at rural health clinics (as

12 defined in section 1571(f)(1)) located in the

13 State, during Federal fiscal year 1995 or 1996,

14 whichever is greater.

15 ‘‘(B) FEDERALLY-QUALIFIED HEALTH

16 CENTER BASE YEAR EXPENDITURES.—For pur17 poses of paragraph (2), the term ‘federally18 qualified health center base year expenditures’

19 means, with respect to a State, the annual ex20 penditures under title XIX for medical assist21 ance in the State which were attributable to ex22 penditures for medical assistance for services

23 provided at federally-qualified health centers (as

24 defined in section 1571(f)(2)(B)) located in the
695

•S 1956 PCS

1 State, during Federal fiscal year 1995 or 1996,

2 whichever is greater.

3 ‘‘(C) NOTICE.—For each fiscal year, the

4 Secretary shall provide each State with notice

5 of the amount of funds required under this sub6 section to be expended during such fiscal year

7 for medical assistance for services provided at

8 rural health clinics and federally-qualified

9 health centers located in the State.

10 ‘‘(4) NO WAIVER.—No waiver of the require11 ments of this subsection may be granted under this

12 title, section 1115 of this Act, or any other provision

13 of law.

14 ‘‘(f) PARITY FOR MENTAL HEALTH SERVICES.—

15 ‘‘(1) IN GENERAL.—A State plan may not im16 pose treatment limits or financial requirements on

17 mental illness services which are not imposed on

18 services for other illnesses or diseases. The plan may

19 require pre-admission screening, prior authorization

20 of services, or other mechanisms limiting coverage of

21 mental illness services to services that are medically

22 necessary.

23 ‘‘(2) CONSTRUCTION.—Except as provided in

24 section 1508, no person or entity may bring an ac-
696

•S 1956 PCS

1 tion against a State based on its failure to comply

2 with the requirements of paragraph (1).

3 ‘‘SEC. 1503. LIMITATIONS ON COST-SHARING.

4 ‘‘(a) GUARANTEED POPULATION.—The State plan

5 may not impose any cost-sharing with respect to any bene6 fit provided to an individual described in section 1501(a),

7 or with respect to any required medicare cost-sharing pro8 vided for an individual described in subsection (b) of such

9 section, except to the extent such cost-sharing could have

10 been imposed against such an individual for such benefit,

11 or such required medicare cost-sharing, under the State

12 plan under title XIX, or under a waiver of the require13 ments of such plan granted to any State (as such plan

14 (or waiver) is in effect on the date of the enactment of

15 the Medicaid Restructuring Act of 1996).

16 ‘‘(b) OPTIONAL POPULATION.—

17 ‘‘(1) BENEFITS DESCRIBED IN THE GUARAN18 TEED BENEFIT PACKAGE.—The State plan may im19 pose cost-sharing with respect to any benefit de20 scribed in the guaranteed benefit package in section

21 1501(a)(2) provided to an eligible low-income indi22 vidual who is not described in subsection (a) or (b)

23 of section 1501, but only to the extent such cost24 sharing could have been imposed against such an in25 dividual for such benefit under the State plan under
697

•S 1956 PCS

1 title XIX, or under a waiver of the requirements of

2 such plan granted to any State (as such plan (or

3 waiver) is in effect on the date of the enactment of

4 the Medicaid Restructuring Act of 1996).

5 ‘‘(2) OTHER BENEFITS.—The State plan may

6 impose cost-sharing with respect to any benefit not

7 described in the guaranteed benefit package de8 scribed in section 1501(a)(2) provided to an eligible

9 low-income individual who is not described in sub10 section (a) or (b) of section 1501. Such cost-sharing

11 may be imposed in a manner that reflects such eco12 nomic factors, employment status, and family size

13 with respect to each such individual as the State de14 termines appropriate.

15 ‘‘(c) CERTAIN COST-SHARING PERMITTED.—Nothing

16 in this section shall be construed as preventing a State

17 plan (consistent with subsections (a) and (b))—

18 ‘‘(1) from imposing cost-sharing to discourage

19 the inappropriate use of emergency medical services

20 delivered through a hospital emergency room, a med21 ical transportation provider, or otherwise,

22 ‘‘(2) from imposing premiums and cost-sharing

23 differentially in order to encourage the use of pri24 mary and preventive care and discourage unneces25 sary or less economical care,
698

•S 1956 PCS

1 ‘‘(3) from scaling cost-sharing in a manner that

2 reflects economic factors, employment status, and

3 family size, or

4 ‘‘(4) from scaling cost-sharing based on the

5 availability to the individual or family of other

6 health insurance coverage.

7 ‘‘(d) PROHIBITION ON BALANCE BILLING.—An indi8 vidual eligible for benefits for items and services under the

9 State plan who is furnished such an items or service by

10 a provider under the plan may not be billed by the provider

11 for such item or service, other than such amount of cost12 sharing as is permitted with this section.

13 ‘‘(e) NO DENIAL OF SERVICES DUE TO AN INABIL14 ITY TO PAY COST-SHARING.—

15 ‘‘(1) IN GENERAL.—No provider of items or

16 services under the State plan may refuse to provide

17 such items or services to an individual eligible for

18 such items or services based on the individual’s in19 ability to pay a cost-sharing charge.

20 ‘‘(2) INDIVIDUAL REMAINS LIABLE.—An indi21 vidual who is subject to a cost-sharing charge for an

22 item or service under this section and who receives

23 such item or service despite such individual’s inabil24 ity to pay such charge, shall remain liable for such

25 charge.
699

•S 1956 PCS

1 ‘‘(f) PUBLIC NOTICE.—If any charges are imposed

2 under the State plan for cost-sharing, such cost-sharing

3 shall be pursuant to a public cost-sharing schedule.

4 ‘‘(g) COST-SHARING DEFINED.—In this section, the

5 term ‘cost-sharing’ includes copayments, deductibles, coin6 surance, enrollment fees, premiums, and other charges for

7 the provision of health care services.

8 ‘‘SEC. 1504. REQUIREMENTS RELATING TO MEDICAL AS9 SISTANCE PROVIDED THROUGH MANAGED

10 CARE ARRANGEMENTS.

11 ‘‘(a) SOLVENCY STANDARDS FOR CAPITATED

12 HEALTH CARE ORGANIZATIONS.—

13 ‘‘(1) IN GENERAL.—A State may not contract

14 with a capitated health care organization, as defined

15 in subsection (e)(1), for the provision of medical as16 sistance under a State plan under which the organi17 zation is—

18 ‘‘(A) at full financial risk, as defined by

19 the State, unless the organization meets sol20 vency standards established by the State for

21 private health maintenance organizations or is

22 described in paragraph (4) and meets other sol23 vency standards established by the State, so

24 long as such standards are adequate to protect

25 against the risk of insolvency, or
700

•S 1956 PCS

1 ‘‘(B) is not at such risk, unless the organi2 zation meets solvency standards that are estab3 lished under the State plan.

4 ‘‘(2) TREATMENT OF PUBLIC ENTITIES.—Para5 graph (1) shall not apply to an organization that is

6 a public entity or if the solvency of such organiza7 tion is guaranteed by the State.

8 ‘‘(3) TRANSITION.—In the case of a capitated

9 health care organization that as of the date of the

10 enactment of this title has entered into a contract

11 with a State for the provision of medical assistance

12 under title XIX under which the organization as13 sumes full financial risk and is receiving capitation

14 payments, paragraph (1) shall not apply to such or15 ganization until 3 years after the date of the enact16 ment of this title.

17 ‘‘(4) ORGANIZATION DESCRIBED.—An organiza18 tion described in this paragraph is a capitated health

19 care organization which is (or is controlled by) one

20 or more Federally-qualified health centers or rural

21 health clinics. For purposes of this paragraph, the

22 term ‘control’ means the possession, whether direct

23 or indirect, of the power to direct or cause the direc24 tion of the management and policies of a capitated

25 health care organization through membership, board
701

•S 1956 PCS

1 representation, or an ownership interest equal to or

2 greater than 50.1 percent.

3 ‘‘(b) DESCRIPTION OF PROCESS FOR DEVELOPING

4 CAPITATION PAYMENT RATES.—

5 ‘‘(1) IN GENERAL.—If a State contracts (or in6 tends to contract) with a capitated health care orga7 nization (as defined in subsection (e)(1)) under

8 which the State makes a capitation payment (as de9 fined in subsection (e)(2)) to the organization for

10 providing or arranging for the provision of medical

11 assistance under the State plan for a group of serv12 ices, including at least inpatient hospital services

13 and physicians’ services, the plan shall include a de14 scription of the following:

15 ‘‘(A) USE OF ACTUARIAL SCIENCE.—The

16 extent and manner in which the State uses ac17 tuarial science—

18 ‘‘(i) to analyze and project health care

19 expenditures and utilization for individuals

20 enrolled (or to be enrolled) in such an or21 ganization under the State plan; and

22 ‘‘(ii) to develop capitation payment

23 rates, including a brief description of the

24 general methodologies used by actuaries.
702

•S 1956 PCS

1 ‘‘(B) QUALIFICATIONS OF ORGANIZA2 TIONS.—The general qualifications, including

3 any accreditation, State licensure or certifi4 cation, or provider network standards, required

5 by the State for participation of capitated

6 health care organizations under the State plan.

7 ‘‘(C) DISSEMINATION PROCESS.—The

8 process used by the State under paragraph (2)

9 and otherwise to disseminate, before entering

10 into contracts with capitated health care organi11 zations, actuarial information to such organiza12 tions on the historical fee-for-service costs (or,

13 if not available, other recent financial data as14 sociated with providing covered services) and

15 utilization associated with individuals described

16 in subparagraph (A)(i).

17 ‘‘(2) PUBLIC NOTICE AND COMMENT.—Under

18 the State plan the State shall provide a process for

19 providing, before the beginning of each contract

20 year—

21 ‘‘(A) public notice of—

22 ‘‘(i) the amounts of the capitation

23 payments (if any) made under the plan for

24 the contract year preceding the public no25 tice, and
703

•S 1956 PCS

1 ‘‘(ii)(I) the information described

2 under paragraph (1)(A) with respect to

3 capitation payments for the contract year

4 involved, or (II) amounts of the capitation

5 payments the State expects to make for

6 the contract year involved,

7 unless such information is designated as propri8 etary and not subject to public disclosure under

9 State law, and

10 ‘‘(B) an opportunity for receiving public

11 comment on the amounts and information for

12 which notice is provided under subparagraph

13 (A).

14 ‘‘(c) QUALITY ASSURANCE STANDARDS.—

15 ‘‘(1) CHOICE OF PROVIDER.—If a State re16 quires an individual eligible for medical assistance

17 under the State plan under this title to enroll with

18 a capitated health care organization or with a pri19 mary care case management provider as a condition

20 of receiving such assistance, the State shall permit

21 such individual to choose a provider of such assist22 ance—

23 ‘‘(A) from among not less than 2 capitated

24 health care organizations; or
704

•S 1956 PCS

1 ‘‘(B) from either a capitated health care

2 organization or a primary care case manage3 ment provider.

4 ‘‘(2) NO REQUIRED ENROLLMENT FOR SPECIAL

5 NEEDS INDIVIDUALS.—

6 ‘‘(A) IN GENERAL.—A State may not re7 quire an individual who is a special needs indi8 vidual (as described in subparagraph (B)) to

9 enroll with a capitated health care organization

10 as a condition of receiving medical assistance

11 under the State plan under this title.

12 ‘‘(B) SPECIAL NEEDS INDIVIDUALS DE13 SCRIBED.—In this paragraph, a ‘special needs

14 individual’ means any of the following:

15 ‘‘(i) SPECIAL NEEDS CHILD.—An in16 dividual who is under 19 years of age

17 who—

18 ‘‘(I) is eligible for supplemental

19 security income under title XVI;

20 ‘‘(II) is described under section

21 501(a)(1)(D);

22 ‘‘(III) is a child described in sec23 tion 1571(b)(1)(B); or

24 ‘‘(IV) is in foster care or is oth25 erwise in an out-of-home placement.
705

•S 1956 PCS

1 ‘‘(ii) HOMELESS INDIVIDUALS.—An

2 individual who is homeless (without regard

3 to whether the individual is a member of a

4 family), including—

5 ‘‘(I) an individual whose primary

6 residence during the night is a super7 vised public or private facility that

8 provides temporary living accommoda9 tions; or

10 ‘‘(II) an individual who is a resi11 dent in transitional housing.

12 ‘‘(iii) MIGRANT AGRICULTURAL WORK13 ERS.—A migratory agricultural worker or

14 a seasonal agricultural worker (as such

15 terms are defined in section 329 of the

16 Public Health Service Act), or the spouse

17 or dependent of such a worker.

18 ‘‘(3) DEFAULT ENROLLMENT.—

19 ‘‘(A) ESTABLISHMENT OF PROCESS.—A

20 State may establish a default enrollment proc21 ess under which any individual who does not

22 enroll with a capitated health care organization

23 during the enrollment period specified by the

24 State shall be enrolled by the State with such
706

•S 1956 PCS

1 an organization in accordance with such proc2 ess.

3 ‘‘(B) LIMITATION.—A State may not enroll

4 an individual using the default enrollment proc5 ess established by the State with a capitated

6 health care organization which is not in compli7 ance with the requirements of this section.

8 ‘‘(4) AVAILABILITY OF SERVICES.—A State

9 may not contract with a capitated health care orga10 nization to provide medical assistance under the

11 State plan under this title unless such organization

12 delivers medical assistance to an enrollee with such

13 organization under this title in a manner which

14 makes such assistance, when medically necessary,

15 available and accessible 24 hours a day and 7 days

16 a week.

17 ‘‘(5) ADEQUATE NUMBER OF PROVIDERS.—A

18 State may not contract with a capitated health care

19 organization to provide medical assistance under the

20 State plan under this title unless such organization

21 contracts with a reasonable number of primary care

22 and specialty care providers to meet the health care

23 needs of enrollees with such organizations under this

24 title.

25 ‘‘(6) PROHIBITIONS.—
707

•S 1956 PCS

1 ‘‘(A) IN GENERAL.—A State shall prohibit

2 a capitated health care organization that the

3 State enters into a contract with to provide

4 medical assistance under a State plan under

5 this title from—

6 ‘‘(i) discriminating on the basis of

7 health status or anticipated need for serv8 ices in the enrollment, reenrollment, or

9 disenrollment of such an individual;

10 ‘‘(ii) obtaining the enrollment of such

11 an individual through fraudulent or coer12 cive means;

13 ‘‘(iii) distributing marketing materials

14 within the State that contain false or ma15 terially misleading information; and

16 ‘‘(iv) having—

17 ‘‘(I) a person described in sub18 paragraph (B) as a director, officer,

19 partner, or person with beneficial

20 ownership of more than 5 percent of

21 the organization’s equity; or

22 ‘‘(II) an employment, consulting,

23 or other agreement with a person de24 scribed in subparagraph (B) for the

25 provision of items and services that
708

•S 1956 PCS

1 are significant and material to the or2 ganization’s obligations under its con3 tract with the State.

4 ‘‘(B) PERSONS DESCRIBED.—A person is

5 described in this subparagraph if such person—

6 ‘‘(i) is debarred or suspended by the

7 Federal Government, pursuant to the Fed8 eral acquisition regulation, from Govern9 ment contracting and subcontracting;

10 ‘‘(ii) is an affiliate (within the mean11 ing of the Federal acquisition regulation)

12 of a person described in clause (i); or

13 ‘‘(iii) is excluded from participation in

14 any program under title XVIII or any

15 State health care program, as defined in

16 section 1128(h).

17 ‘‘(7) AUDITS, INSPECTIONS, AND EXTERNAL

18 REVIEWS.—

19 ‘‘(A) BY THE STATE.—A State shall re20 quire a capitated health care organization that

21 the State enters into a contract with to provide

22 medical assistance under a State plan under

23 this title to provide such financial information

24 as the State may specify and to allow the State
709

•S 1956 PCS

1 to audit and inspect the records of the organi2 zation to verify such information.

3 ‘‘(B) INDEPENDENT, EXTERNAL RE4 VIEWS.—A State may not enter into a contract

5 with a capitated health care organization to

6 provide medical assistance under the State plan

7 under this title unless the organization has a

8 contract with a utilization and quality control

9 organization under part B of title XI, an entity

10 which meets the requirements of section 1152,

11 as determined by the Secretary, or a private ac12 creditation body, to conduct, on an annual

13 basis, an independent, external review of the

14 quality of the services provided by the organiza15 tion.

16 ‘‘(8) ESTABLISHMENT OF SANCTIONS FOR NON17 COMPLIANCE WITH STANDARDS.—A State shall es18 tablish sanctions, including intermediate sanctions

19 and civil money penalties, which may be imposed

20 against a capitated health care organization with a

21 contract to provide medical assistance under the

22 State plan under this title for—

23 ‘‘(A) noncompliance with the requirements

24 of this subsection; or
710

•S 1956 PCS

1 ‘‘(B) failure to provide medically necessary

2 services required under such contract.

3 ‘‘(d) AUTHORITY TO CONTRACT WITH PRIMARY

4 CARE CASE MANAGEMENT PROVIDERS.—

5 ‘‘(1) IN GENERAL.—A State may contract with

6 a primary care case management provider (as de7 fined under subsection (e)(3)) for the provision of

8 case management services to an eligible low-income

9 individual under the State plan.

10 ‘‘(2) DEFAULT ENROLLMENT.—If a State es11 tablishes a default enrollment process under sub12 section (c)(3), the State may enroll an individual

13 who does not enroll with a capitated health care or14 ganization or with a primary care case management

15 provider during the enrollment period specified by

16 the State with a primary care case management pro17 vider using such process.

18 ‘‘(e) DEFINITIONS.—In this title:

19 ‘‘(1) CAPITATED HEALTH CARE ORGANIZA20 TION.—The term ‘capitated health care organiza21 tion’ means a health maintenance organization or

22 any other entity (including a health insuring organi23 zation, managed care organization, prepaid health

24 plan, integrated service network, or similar entity)

25 which under State law is permitted to accept capita-
711

•S 1956 PCS

1 tion payments for providing (or arranging for the

2 provision of) a group of items and services including

3 at least inpatient hospital services and physicians’

4 services.

5 ‘‘(2) CAPITATION PAYMENT.—The term ‘capita6 tion payment’ means, with respect to payment, pay7 ment on a prepaid capitation basis or any other risk

8 basis to an entity for the entity’s provision (or ar9 ranging for the provision) of a group of items and

10 services, including at least inpatient hospital services

11 and physicians’ services.

12 ‘‘(3) PRIMARY CARE CASE MANAGEMENT PRO13 VIDER.—The term ‘primary care case management

14 provider’ means a health care provider that—

15 ‘‘(A) is a physician, group of physicians, a

16 Federally-qualified health center, a rural health

17 clinic, or an entity employing or having other

18 arrangements with physicians that provides or

19 arranges for the provision of one or more items

20 and services to individuals eligible for medical

21 assistance under the State plan under this title;

22 ‘‘(B) receives a fixed fee per enrollee for a

23 specified period for providing case management

24 services (including approving and arranging for
712

•S 1956 PCS

1 the provision of health care items and services

2 on a referral basis) to enrolled individuals; and

3 ‘‘(C) is not an entity that is at full finan4 cial risk, as defined by the State.

5 ‘‘SEC. 1505. PREVENTING SPOUSAL IMPOVERISHMENT.

6 ‘‘(a) SPECIAL TREATMENT FOR INSTITUTIONALIZED

7 SPOUSES.—

8 ‘‘(1) SUPERSEDES OTHER PROVISIONS.—In de9 termining the eligibility for medical assistance of an

10 institutionalized spouse (as defined in subsection

11 (h)(1)), the provisions of this section supersede any

12 other provision of this title which is inconsistent

13 with them.

14 ‘‘(2) DOES NOT AFFECT CERTAIN DETERMINA15 TIONS.—Except as this section specifically provides,

16 this section does not apply to—

17 ‘‘(A) the determination of what constitutes

18 income or resources, or

19 ‘‘(B) the methodology and standards for

20 determining and evaluating income and re21 sources.

22 ‘‘(3) NO APPLICATION IN COMMONWEALTHS

23 AND TERRITORIES.—This section shall only apply to

24 a State that is one of the 50 States or the District

25 of Columbia.
713

•S 1956 PCS

1 ‘‘(b) RULES FOR TREATMENT OF INCOME.—

2 ‘‘(1) SEPARATE TREATMENT OF INCOME.—Dur3 ing any month in which an institutionalized spouse

4 is in the institution, except as provided in paragraph

5 (2), no income of the community spouse shall be

6 deemed available to the institutionalized spouse.

7 ‘‘(2) ATTRIBUTION OF INCOME.—In determin8 ing the income of an institutionalized spouse or com9 munity spouse for purposes of the post-eligibility in10 come determination described in subsection (d), ex11 cept as otherwise provided in this section and re12 gardless of any State laws relating to community

13 property or the division of marital property, the fol14 lowing rules apply:

15 ‘‘(A) NON-TRUST PROPERTY.—Subject to

16 subparagraphs (C) and (D), in the case of in17 come not from a trust, unless the instrument

18 providing the income otherwise specifically pro19 vides—

20 ‘‘(i) if payment of income is made

21 solely in the name of the institutionalized

22 spouse or the community spouse, the in23 come shall be considered available only to

24 that respective spouse,
714

•S 1956 PCS

1 ‘‘(ii) if payment of income is made in

2 the names of the institutionalized spouse

and the community spouse, 1 3 ⁄2 of the in4 come shall be considered available to each

5 of them, and

6 ‘‘(iii) if payment of income is made in

7 the names of the institutionalized spouse

8 or the community spouse, or both, and to

9 another person or persons, the income

10 shall be considered available to each spouse

11 in proportion to the spouse’s interest (or,

12 if payment is made with respect to both

13 spouses and no such interest is specified,

1 14 ⁄2 of the joint interest shall be considered

15 available to each spouse).

16 ‘‘(B) TRUST PROPERTY.—In the case of a

17 trust—

18 ‘‘(i) except as provided in clause (ii),

19 income shall be attributed in accordance

20 with the provisions of this title; and

21 ‘‘(ii) income shall be considered avail22 able to each spouse as provided in the

23 trust, or, in the absence of a specific provi24 sion in the trust—
715

•S 1956 PCS

1 ‘‘(I) if payment of income is

2 made solely to the institutionalized

3 spouse or the community spouse, the

4 income shall be considered available

5 only to that respective spouse,

6 ‘‘(II) if payment of income is

7 made to both the institutionalized

spouse and the community spouse, 1 8 ⁄2

9 of the income shall be considered

10 available to each of them, and

11 ‘‘(III) if payment of income is

12 made to the institutionalized spouse

13 or the community spouse, or both,

14 and to another person or persons, the

15 income shall be considered available to

16 each spouse in proportion to the

17 spouse’s interest (or, if payment is

18 made with respect to both spouses

and no such interest is specified, 1 19 ⁄2 of

20 the joint interest shall be considered

21 available to each spouse).

22 ‘‘(C) PROPERTY WITH NO INSTRUMENT.—

23 In the case of income not from a trust in which

24 there is no instrument establishing ownership,

subject to subparagraph (D), 1 25 ⁄2 of the income
716

•S 1956 PCS

1 shall be considered to be available to the institutionalized spouse and 1 2 ⁄2 to the community

3 spouse.

4 ‘‘(D) REBUTTING OWNERSHIP.—The rules

5 of subparagraphs (A) and (C) are superseded to

6 the extent that an institutionalized spouse can

7 establish, by a preponderance of the evidence,

8 that the ownership interests in income are other

9 than as provided under such subparagraphs.

10 ‘‘(c) RULES FOR TREATMENT OF RESOURCES.—

11 ‘‘(1) COMPUTATION OF SPOUSAL SHARE AT

12 TIME OF INSTITUTIONALIZATION.—

13 ‘‘(A) TOTAL JOINT RESOURCES.—There

14 shall be computed (as of the beginning of the

15 first continuous period of institutionalization of

16 the institutionalized spouse)—

17 ‘‘(i) the total value of the resources to

18 the extent either the institutionalized

19 spouse or the community spouse has an

20 ownership interest, and

21 ‘‘(ii) a spousal share which is equal to

1 22 ⁄2 of such total value.

23 ‘‘(B) ASSESSMENT.—At the request of an

24 institutionalized spouse or community spouse,

25 at the beginning of the first continuous period
717

•S 1956 PCS

1 of institutionalization of the institutionalized

2 spouse and upon the receipt of relevant docu3 mentation of resources, the State shall promptly

4 assess and document the total value described

5 in subparagraph (A)(i) and shall provide a copy

6 of such assessment and documentation to each

7 spouse and shall retain a copy of the assess8 ment for use under this section. If the request

9 is not part of an application for medical assist10 ance under this title, the State may, at its op11 tion as a condition of providing the assessment,

12 require payment of a fee not exceeding the rea13 sonable expenses of providing and documenting

14 the assessment. At the time of providing the

15 copy of the assessment, the State shall include

16 a notice indicating that the spouse will have a

17 right to a fair hearing under subsection (e)(2).

18 ‘‘(2) ATTRIBUTION OF RESOURCES AT TIME OF

19 INITIAL ELIGIBILITY DETERMINATION.—In deter20 mining the resources of an institutionalized spouse

21 at the time of application for medical assistance

22 under this title, regardless of any State laws relating

23 to community property or the division of marital

24 property—
718

•S 1956 PCS

1 ‘‘(A) except as provided in subparagraph

2 (B), all the resources held by either the institu3 tionalized spouse, community spouse, or both,

4 shall be considered to be available to the insti5 tutionalized spouse, and

6 ‘‘(B) resources shall be considered to be

7 available to an institutionalized spouse, but only

8 to the extent that the amount of such resources

9 exceeds the amount computed under subsection

10 (f)(2)(A) (as of the time of application for med11 ical assistance).

12 ‘‘(3) ASSIGNMENT OF SUPPORT RIGHTS.—The

13 institutionalized spouse shall not be ineligible by rea14 son of resources determined under paragraph (2) to

15 be available for the cost of care where—

16 ‘‘(A) the institutionalized spouse has as17 signed to the State any rights to support from

18 the community spouse,

19 ‘‘(B) the institutionalized spouse lacks the

20 ability to execute an assignment due to physical

21 or mental impairment but the State has the

22 right to bring a support proceeding against a

23 community spouse without such assignment, or

24 ‘‘(C) the State determines that denial of

25 eligibility would work an undue hardship.
719

•S 1956 PCS

1 ‘‘(4) SEPARATE TREATMENT OF RESOURCES

2 AFTER ELIGIBILITY FOR MEDICAL ASSISTANCE ES3 TABLISHED.—During the continuous period in which

4 an institutionalized spouse is in an institution and

5 after the month in which an institutionalized spouse

6 is determined to be eligible for medical assistance

7 under this title, no resources of the community

8 spouse shall be deemed available to the institutional9 ized spouse.

10 ‘‘(5) RESOURCES DEFINED.—In this section,

11 the term ‘resources’ does not include—

12 ‘‘(A) resources excluded under subsection

13 (a) or (d) of section 1613, and

14 ‘‘(B) resources that would be excluded

15 under section 1613(a)(2)(A) but for the limita16 tion on total value described in such section.

17 ‘‘(d) PROTECTING INCOME FOR COMMUNITY

18 SPOUSE.—

19 ‘‘(1) ALLOWANCES TO BE OFFSET FROM IN20 COME OF INSTITUTIONALIZED SPOUSE.—After an

21 institutionalized spouse is determined or redeter22 mined to be eligible for medical assistance, in deter23 mining the amount of the spouse’s income that is to

24 be applied monthly to payment for the costs of care

25 in the institution, there shall be deducted from the
720

•S 1956 PCS

1 spouse’s monthly income the following amounts in

2 the following order:

3 ‘‘(A) A personal needs allowance (described

4 in paragraph (2)(A)), in an amount not less

5 than the amount specified in paragraph (2)(C).

6 ‘‘(B) A community spouse monthly income

7 allowance (as defined in paragraph (3)), but

8 only to the extent income of the institutional9 ized spouse is made available to (or for the ben10 efit of) the community spouse.

11 ‘‘(C) A family allowance, for each family

member, equal to at least 1 12 ⁄3 of the amount by

13 which the amount described in paragraph

14 (4)(A)(i) exceeds the amount of the monthly in15 come of that family member.

16 ‘‘(D) Amounts for incurred expenses for

17 medical or remedial care for the institutional18 ized spouse as provided under paragraph (6).

19 In subparagraph (C), the term ‘family member’ only

20 includes minor or dependent children, dependent

21 parents, or dependent siblings of the institutional22 ized or community spouse who are residing with the

23 community spouse.

24 ‘‘(2) PERSONAL NEEDS ALLOWANCE.—
721

•S 1956 PCS

1 ‘‘(A) IN GENERAL.—The State plan must

2 provide that, in the case of an institutionalized

3 individual or couple described in subparagraph

4 (B), in determining the amount of the individ5 ual’s or couple’s income to be applied monthly

6 to payment for the cost of care in an institu7 tion, there shall be deducted from the monthly

8 income (in addition to other allowances other9 wise provided under the plan) a monthly per10 sonal needs allowance—

11 ‘‘(i) which is reasonable in amount for

12 clothing and other personal needs of the

13 individual (or couple) while in an institu14 tion, and

15 ‘‘(ii) which is not less (and may be

16 greater) than the minimum monthly per17 sonal needs allowance described in sub18 paragraph (C).

19 ‘‘(B) INSTITUTIONALIZED INDIVIDUAL OR

20 COUPLE DEFINED.—In this paragraph, the

21 term ‘institutionalized individual or couple’

22 means an individual or married couple—

23 ‘‘(i) who is an inpatient (or who are

24 inpatients) in a medical institution or

25 nursing facility for which payments are
722

•S 1956 PCS

1 made under this title throughout a month,

2 and

3 ‘‘(ii) who is or are determined to be

4 eligible for medical assistance under the

5 State plan.

6 ‘‘(C) MINIMUM ALLOWANCE.—The mini7 mum monthly personal needs allowance de8 scribed in this subparagraph is $40 for an insti9 tutionalized individual and $80 for an institu10 tionalized couple (if both are aged, blind, or dis11 abled, and their incomes are considered avail12 able to each other in determining eligibility).

13 ‘‘(3) COMMUNITY SPOUSE MONTHLY INCOME

14 ALLOWANCE DEFINED.—

15 ‘‘(A) IN GENERAL.—In this section (except

16 as provided in subparagraph (B)), the commu17 nity spouse monthly income allowance for a

18 community spouse is an amount by which—

19 ‘‘(i) except as provided in subsection

20 (e), the minimum monthly maintenance

21 needs allowance (established under and in

22 accordance with paragraph (4)) for the

23 spouse, exceeds

24 ‘‘(ii) the amount of monthly income

25 otherwise available to the community
723

•S 1956 PCS

1 spouse (determined without regard to such

2 an allowance).

3 ‘‘(B) COURT ORDERED SUPPORT.—If a

4 court has entered an order against an institu5 tionalized spouse for monthly income for the

6 support of the community spouse, the commu7 nity spouse monthly income allowance for the

8 spouse shall be not less than the amount of the

9 monthly income so ordered.

10 ‘‘(4) ESTABLISHMENT OF MINIMUM MONTHLY

11 MAINTENANCE NEEDS ALLOWANCE.—

12 ‘‘(A) IN GENERAL.—Each State shall es13 tablish a minimum monthly maintenance needs

14 allowance for each community spouse which,

15 subject to subparagraph (B), is equal to or ex16 ceeds—

‘‘(i) 150 percent of 1 17 ⁄12 of the poverty

18 line applicable to a family unit of 2 mem19 bers, plus

20 ‘‘(ii) an excess shelter allowance (as

21 defined in paragraph (4)).

22 A revision of the poverty line referred to in

23 clause (i) shall apply to medical assistance fur24 nished during and after the second calendar
724

•S 1956 PCS

1 quarter that begins after the date of publication

2 of the revision.

3 ‘‘(B) CAP ON MINIMUM MONTHLY MAINTE4 NANCE NEEDS ALLOWANCE.—The minimum

5 monthly maintenance needs allowance estab6 lished under subparagraph (A) may not exceed

7 $1,500 (subject to adjustment under sub8 sections (e) and (g)).

9 ‘‘(5) EXCESS SHELTER ALLOWANCE DE10 FINED.—In paragraph (4)(A)(ii), the term ‘excess

11 shelter allowance’ means, for a community spouse,

12 the amount by which the sum of—

13 ‘‘(A) the spouse’s expenses for rent or

14 mortgage payment (including principal and in15 terest), taxes and insurance and, in the case of

16 a condominium or cooperative, required mainte17 nance charge, for the community spouse’s prin18 cipal residence, and

19 ‘‘(B) the standard utility allowance (used

20 by the State under section 5(e) of the Food

21 Stamp Act of 1977) or, if the State does not

22 use such an allowance, the spouse’s actual util23 ity expenses,

24 exceeds 30 percent of the amount described in para25 graph (4)(A)(i), except that, in the case of a con-
725

•S 1956 PCS

1 dominium or cooperative, for which a maintenance

2 charge is included under subparagraph (A), any al3 lowance under subparagraph (B) shall be reduced to

4 the extent the maintenance charge includes utility

5 expenses.

6 ‘‘(6) TREATMENT OF INCURRED EXPENSES.—

7 With respect to the post-eligibility treatment of in8 come under this section, there shall be disregarded

9 reparation payments made by the Federal Republic

10 of Germany and, there shall be taken into account

11 amounts for incurred expenses for medical or reme12 dial care that are not subject to payment by a third

13 party, including—

14 ‘‘(A) medicare and other health insurance

15 premiums, deductibles, or coinsurance, and

16 ‘‘(B) necessary medical or remedial care

17 recognized under State law but not covered

18 under the State plan under this title, subject to

19 reasonable limits the State may establish on the

20 amount of these expenses.

21 ‘‘(e) NOTICE AND FAIR HEARING.—

22 ‘‘(1) NOTICE.—Upon—

23 ‘‘(A) a determination of eligibility for med24 ical assistance of an institutionalized spouse, or
726

•S 1956 PCS

1 ‘‘(B) a request by either the institutional2 ized spouse, or the community spouse, or a rep3 resentative acting on behalf of either spouse,

4 each State shall notify both spouses (in the case de5 scribed in subparagraph (A)) or the spouse making

6 the request (in the case described in subparagraph

7 (B)) of the amount of the community spouse month8 ly income allowance (described in subsection

9 (d)(1)(B)), of the amount of any family allowances

10 (described in subsection (d)(1)(C)), of the method

11 for computing the amount of the community spouse

12 resources allowance permitted under subsection (f),

13 and of the spouse’s right to a fair hearing under

14 the State plan respecting ownership or availability

15 of income or resources, and the determination of the

16 community spouse monthly income or resource al17 lowance.

18 ‘‘(2) FAIR HEARING.—

19 ‘‘(A) IN GENERAL.—If either the institu20 tionalized spouse or the community spouse is

21 dissatisfied with a determination of—

22 ‘‘(i) the community spouse monthly

23 income allowance;

24 ‘‘(ii) the amount of monthly income

25 otherwise available to the community
727

•S 1956 PCS

1 spouse (as applied under subsection

2 (d)(3)(A)(ii));

3 ‘‘(iii) the computation of the spousal

4 share of resources under subsection (c)(1);

5 ‘‘(iv) the attribution of resources

6 under subsection (c)(2); or

7 ‘‘(v) the determination of the commu8 nity spouse resource allowance (as defined

9 in subsection (f)(2));

10 such spouse is entitled to a fair hearing under

11 the State plan with respect to such determina12 tion if an application for benefits under this

13 title has been made on behalf of the institu14 tionalized spouse. Any such hearing respecting

15 the determination of the community spouse re16 source allowance shall be held within 30 days of

17 the date of the request for the hearing.

18 ‘‘(B) REVISION OF MINIMUM MONTHLY

19 MAINTENANCE NEEDS ALLOWANCE.—If either

20 such spouse establishes that the community

21 spouse needs income, above the level otherwise

22 provided by the minimum monthly maintenance

23 needs allowance, due to exceptional cir24 cumstances resulting in significant financial du25 ress, there shall be substituted, for the mini-
728

•S 1956 PCS

1 mum monthly maintenance needs allowance in

2 subsection (d)(3)(A)(i), an amount adequate to

3 provide such additional income as is necessary.

4 ‘‘(C) REVISION OF COMMUNITY SPOUSE

5 RESOURCE ALLOWANCE.—If either such spouse

6 establishes that the community spouse resource

7 allowance (in relation to the amount of income

8 generated by such an allowance) is inadequate

9 to raise the community spouse’s income to the

10 minimum monthly maintenance needs allow11 ance, there shall be substituted, for the commu12 nity spouse resource allowance under subsection

13 (f)(2), an amount adequate to provide such a

14 minimum monthly maintenance needs allow15 ance.

16 ‘‘(f) PERMITTING TRANSFER OF RESOURCES TO

17 COMMUNITY SPOUSE.—

18 ‘‘(1) IN GENERAL.—An institutionalized spouse

19 may, without regard to any other provision of the

20 State plan to the contrary, transfer an amount equal

21 to the community spouse resource allowance (as de22 fined in paragraph (2)), but only to the extent the

23 resources of the institutionalized spouse are trans24 ferred to, or for the sole benefit of, the community

25 spouse. The transfer under the preceding sentence
729

•S 1956 PCS

1 shall be made as soon as practicable after the date

2 of the initial determination of eligibility, taking into

3 account such time as may be necessary to obtain a

4 court order under paragraph (3).

5 ‘‘(2) COMMUNITY SPOUSE RESOURCE ALLOW6 ANCE DEFINED.—In paragraph (1), the ‘community

7 spouse resource allowance’ for a community spouse

8 is an amount (if any) by which—

9 ‘‘(A) the greatest of—

10 ‘‘(i) $12,000 (subject to adjustment

11 under subsection (g)), or, if greater (but

12 not to exceed the amount specified in

13 clause (ii)(II)) an amount specified under

14 the State plan,

15 ‘‘(ii) the lesser of (I) the spousal

16 share computed under subsection (c)(1), or

17 (II) $60,000 (subject to adjustment under

18 subsection (g)),

19 ‘‘(iii) the amount established under

20 subsection (e)(2), or

21 ‘‘(iv) the amount transferred under a

22 court order under paragraph (3);

23 exceeds
730

•S 1956 PCS

1 ‘‘(B) the amount of the resources other2 wise available to the community spouse (deter3 mined without regard to such an allowance).

4 ‘‘(3) TRANSFERS UNDER COURT ORDERS.—If a

5 court has entered an order against an institutional6 ized spouse for the support of the community

7 spouse, any provisions under the plan relating to

8 transfers or disposals of assets for less than fair

9 market value shall not apply to amounts of resources

10 transferred pursuant to such order for the support

11 of the spouse or a family member (as defined in sub12 section (d)(1)).

13 ‘‘(g) INDEXING DOLLAR AMOUNTS.—For services

14 furnished during a calendar year after 1989, the dollar

15 amounts specified in subsections (d)(3)(C), (f)(2)(A)(i),

16 and (f)(2)(A)(ii)(II) shall be increased by the same per17 centage as the percentage increase in the consumer price

18 index for all urban consumers (all items; U.S. city aver19 age) between September 1988 and the September before

20 the calendar year involved.

21 ‘‘(h) DEFINITIONS.—In this section:

22 ‘‘(1) INSTITUTIONALIZED SPOUSE.—The term

23 ‘institutionalized spouse’ means an individual—

24 ‘‘(A)(i) who is in a medical institution or

25 nursing facility, or
731

•S 1956 PCS

1 ‘‘(ii) at the option of the State (I) who

2 would be eligible under the State plan under

3 this title if such individual was in a medical in4 stitution, (II) with respect to whom there has

5 been a determination that but for the provision

6 of home or community-based services such indi7 vidual would require the level of care provided

8 in a hospital, nursing facility or intermediate

9 care facility for the mentally retarded the cost

10 of which could be reimbursed under the plan,

11 and (III) who will receive home or community12 based services pursuant the plan; and

13 ‘‘(B) is married to a spouse who is not in

14 a medical institution or nursing facility;

15 but does not include any such individual who is not

16 likely to meet the requirements of subparagraph (A)

17 for at least 30 consecutive days.

18 ‘‘(2) COMMUNITY SPOUSE.—The term ‘commu19 nity spouse’ means the spouse of an institutionalized

20 spouse.

21 ‘‘SEC. 1506. PREVENTING FAMILY IMPOVERISHMENT.

22 ‘‘(a) RESPONSIBILITIES FOR LONG-TERM CARE GEN23 ERALLY.—A State plan may not—

24 ‘‘(1) require an adult child or any other individ25 ual (other than the applicant or recipient of services
732

•S 1956 PCS

1 or the spouse of such an applicant or recipient) to

2 contribute to the cost of covered nursing facility

3 services and other long-term care services under the

4 plan; and

5 ‘‘(2) take into account with respect to such

6 services the financial responsibility of any individual

7 for any applicant or recipient of assistance under the

8 plan unless such applicant or recipient is such indi9 vidual’s spouse or such individual’s child who is

10 under age 21 or (with respect to States eligible to

11 participate in the State program established under

12 title XVI), is blind or permanently and totally dis13 abled, or is blind or disabled as defined in section

14 1614 (with respect to States which are not eligible

15 to participate in such program).

16 ‘‘(b) LIMITATIONS ON LIENS.—

17 ‘‘(1) IN GENERAL.—No lien may be imposed

18 against the property of any individual prior to the

19 individual’s death on account of medical assistance

20 paid or to be paid on the individual’s behalf under

21 a State plan, except—

22 ‘‘(A) pursuant to the judgment of a court

23 on account of benefits incorrectly paid on behalf

24 of such individual; or
733

•S 1956 PCS

1 ‘‘(B) in the case of the real property of an

2 individual—

3 ‘‘(i) who is an inpatient in a nursing

4 facility, intermediate care facility for the

5 mentally retarded, or other medical institu6 tion, if such individual is required, as a

7 condition of receiving services in such insti8 tution under the plan, to spend for costs of

9 medical care all but a minimal amount of

10 the individual’s income required for per11 sonal needs, and

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

13 determines, after notice and opportunity

14 for a hearing (in accordance with proce15 dures established by the State), that the

16 individual cannot reasonably be expected to

17 be discharged from the medical institution

18 and to return home,

19 except as provided in paragraph (2).

20 ‘‘(2) EXCEPTION.—No lien may be imposed

21 under paragraph (1)(B) on such individual’s home

22 if—

23 ‘‘(A) the spouse of such individual,

24 ‘‘(B) such individual’s child who is under

25 age 21, or (with respect to States eligible to
734

•S 1956 PCS

1 participate in the State program established

2 under title XVI) is blind or permanently and to3 tally disabled, or (with respect to States which

4 are not eligible to participate in such program)

5 is blind or disabled as defined in section 1614,

6 or

7 ‘‘(C) a sibling of such individual (who has

8 an equity interest in such home and who was

9 residing in such individual’s home for a period

10 of at least one year immediately before the date

11 of the individual’s admission to the medical in12 stitution),

13 is lawfully residing in such home.

14 ‘‘(3) DISSOLUTION UPON RETURN HOME.—Any

15 lien imposed with respect to an individual pursuant

16 to paragraph (1)(B) shall dissolve upon that individ17 ual’s discharge from the medical institution and re18 turn home.

19 ‘‘SEC. 1507. STATE FLEXIBILITY.

20 ‘‘(a) STATE FLEXIBILITY IN BENEFITS, PROVIDER

21 PAYMENTS, GEOGRAPHICAL COVERAGE AREA, AND SE22 LECTION OF PROVIDERS.—The State under its State plan

23 may—

24 ‘‘(1) specify those items and services for which

25 medical assistance is provided (consistent with guar-
735

•S 1956 PCS

1 antees under subsections (a) and (b) of section

2 1501), the providers which may provide such items

3 and services, and the amount and frequency of pro4 viding such items and services;

5 ‘‘(2) specify the extent to which the same medi6 cal assistance will be provided in all geographical

7 areas or political subdivisions of the State, so long

8 as medical assistance is made available in all such

9 areas or subdivisions;

10 ‘‘(3) specify the extent to which the medical as11 sistance made available to any individual eligible for

12 medical assistance is comparable in amount, dura13 tion, or scope to the medical assistance made avail14 able to any other such individual; and

15 ‘‘(4) specify the extent to which an individual

16 eligible for medical assistance with respect to an

17 item or service may choose to obtain such assistance

18 from any institution, agency, or person qualified to

19 provide the item or service.

20 ‘‘(b) STATE FLEXIBILITY WITH RESPECT TO MAN21 AGED CARE.—Nothing in this title shall be construed—

22 ‘‘(1) to limit a State’s ability to contract with,

23 on a capitated basis or otherwise, health care plans

24 or individual health care providers for the provision

25 or arrangement of medical assistance,
736

•S 1956 PCS

1 ‘‘(2) to limit a State’s ability to contract with

2 health care plans or other entities for case manage3 ment services or for coordination of medical assist4 ance, or

5 ‘‘(3) to restrict a State from establishing capi6 tation rates on the basis of competition among

7 health care plans or negotiations between the State

8 and one or more health care plans.

9 ‘‘SEC. 1508. PRIVATE RIGHTS OF ACTION.

10 ‘‘(a) LIMITATION ON FEDERAL CAUSES OF AC11 TION.—Except as provided in this section, no person or

12 entity may bring an action against a State in Federal

13 court based on its failure to comply with any requirement

14 of this title.

15 ‘‘(b) STATE CAUSES OF ACTION.—

16 ‘‘(1) ADMINISTRATIVE AND JUDICIAL PROCE17 DURES.—A State plan shall provide for—

18 ‘‘(A) an administrative procedure whereby

19 an individual alleging a denial of benefits under

20 the State plan may receive a hearing regarding

21 such denial, and

22 ‘‘(B) judicial review, through a private

23 right of action in a State court by an individual

24 or class of individuals, regarding such a denial,

25 but a State may require exhaustion of adminis-
737

•S 1956 PCS

1 trative remedies before such an action may be

2 taken.

3 The administrative procedure under subparagraph

4 (A) shall include impartial decision makers, a fair

5 process, and timely decisions.

6 ‘‘(2) WRIT OF CERTIORARI.—An individual or

7 class may file a petition for certiorari before the Su8 preme Court of the United States in a case of a de9 nial of benefits under the State plan to review a de10 termination of the highest court of a State regarding

11 such denial.

12 (3) CONSTRUCTION.—Nothing in this sub13 section shall be construed as requiring a State to

14 provide a private right of action in State court by

15 a provider, health plan, or a class of providers or

16 health plans.

17 ‘‘(c) SECRETARIAL RELIEF.—

18 ‘‘(1) IN GENERAL.—The Secretary may bring

19 an action in Federal court against a State and on

20 behalf of an individual or class of individuals in

21 order to assure that a State provides benefits to in22 dividuals and classes of individuals as guaranteed

23 under subsection (a) or (b) of section 1501 under its

24 State plan.
738

•S 1956 PCS

1 ‘‘(2) NO PRIVATE RIGHT.—No action may be

2 brought in any court against the Secretary based on

3 the Secretary’s bringing, or failure to bring, an ac4 tion under paragraph (1).

5 ‘‘(3) CONSTRUCTION.—Nothing in this title

6 shall be construed as authorizing the Secretary to

7 bring an action on behalf of a provider, health plan,

8 or a class of providers or health plans.

9 ‘‘PART B—PAYMENTS TO STATES

10 ‘‘SEC. 1511. ALLOTMENT OF FUNDS AMONG STATES.

11 ‘‘(a) ALLOTMENTS.—

12 ‘‘(1) COMPUTATION.—The Secretary shall pro13 vide for the computation of State obligation and out14 lay allotments in accordance with this section for

15 each fiscal year beginning with fiscal year 1997.

16 Nothing in this part shall be construed as authoriz17 ing payment under this part to any State for fiscal

18 year 1996.

19 ‘‘(2) LIMITATION ON OBLIGATIONS.—

20 ‘‘(A) IN GENERAL.—Subject to the suc21 ceeding provisions of this paragraph, the Sec22 retary shall not enter into obligations with any

23 State under this title for a fiscal year in excess

24 of the sum of the following allotments for the

25 State for the fiscal year:
739

•S 1956 PCS

1 ‘‘(i) BASE OBLIGATION ALLOT2 MENT.—The amount of the base obligation

3 allotment for that State for the fiscal year

4 under paragraph (4).

5 ‘‘(ii) SUPPLEMENTAL ALLOTMENT

6 FOR CERTAIN ALIENS.—The amount of

7 any supplemental allotment for that State

8 for the fiscal year under subsection (f).

9 ‘‘(iii) SUPPLEMENTAL PER BENE10 FICIARY UMBRELLA ALLOTMENT.—The

11 amount of any supplemental per bene12 ficiary umbrella allotment for that State

13 for the fiscal year under subsection (g).

14 The sum of the base obligation allotments for all

15 States in any fiscal year (excluding amounts carried

16 over under subparagraph (B) and excluding changes

17 in allotments effected under paragraph (4)(D)) shall

18 not exceed the aggregate limit on new base obliga19 tion authority specified in paragraph (3) for that fis20 cal year.

21 ‘‘(B) ADJUSTMENTS.—

22 ‘‘(i) CARRYOVER OF BASE ALLOTMENT

23 PERMITTED.—Subject to clauses (ii), if the

24 amount of obligations entered into under

25 this part with a State for quarters in a fis-
740

•S 1956 PCS

1 cal year is less than the amount of the ob2 ligation allotment under this section to the

3 State for the fiscal year, the amount of the

4 difference (less any amount computed

5 under clause (iii)) shall be added to the

6 amount of the State obligation allotment

7 otherwise provided under this section for

8 the succeeding fiscal year.

9 ‘‘(ii) NO CARRYOVER PERMITTED FOR

10 STATES RECEIVING SUPPLEMENTAL UM11 BRELLA ALLOTMENTS.—Clause (i) shall

12 not apply, insofar as it permits a carryover

13 for a State from a particular year to the

14 next year, if in the particular year the

15 State receives a supplemental umbrella al16 lotment under subsection (g).

17 ‘‘(iii) NO CARRYOVER OF ALIEN SUP18 PLEMENTAL ALLOTMENT.—The amount of

19 any carryover under clause (i) from a fiscal

20 year shall be reduced by the amount (if

21 any) by which the amount of the outlays

22 for expenditures described in subsection (f)

23 for the fiscal year is less than the amount

24 of any supplemental allotment provided
741

•S 1956 PCS

1 under the respective subsection for the

2 State and fiscal year involved.

3 ‘‘(C) REDUCTION FOR NEW OBLIGATIONS

4 UNDER TITLE XIX IN FISCAL YEAR 1997.—The

5 amount of the base obligation allotment other6 wise provided under this section for fiscal year

7 1997 for a State shall be reduced by the

8 amount of the obligations entered into with re9 spect to the State under section 1903(a) during

10 such fiscal year.

11 ‘‘(D) NO EFFECT ON PRIOR YEAR OBLIGA12 TIONS.—Subparagraph (A) shall not apply to or

13 affect obligations for a fiscal year prior to fiscal

14 year 1997.

15 ‘‘(E) OBLIGATION.—For purposes of this

16 section, the Secretary’s establishment of an es17 timate under section 1512(b) of the amount a

18 State is entitled to receive for a quarter (taking

19 into account any adjustments described in such

20 subsection) beginning during or after fiscal year

21 1997 shall be treated as the obligation of such

22 amount for the State as of the first day of the

23 quarter.

24 ‘‘(F) RELATION TO GUARANTEES.—The

25 Federal Government’s obligations for payments
742

•S 1956 PCS

1 under this title are limited as provided under

2 subparagraph (A) and are only subject to ad3 justment based on any guarantee provided

4 under section 1501 as provided under sub5 section (g).

6 ‘‘(3) AGGREGATE LIMIT ON NEW BASE OBLIGA7 TION AUTHORITY.—

8 ‘‘(A) IN GENERAL.—For purposes of this

9 subsection, subject to subparagraph (C), the

10 ‘aggregate limit on new base obligation author11 ity’, for a fiscal year, is the base pool amount

12 under subsection (b) for the fiscal year, divided

13 by the payout adjustment factor (described in

14 subparagraph (B)) for the fiscal year.

15 ‘‘(B) PAYOUT ADJUSTMENT FACTOR.—For

16 purposes of this subsection, the ‘payout adjust17 ment factor’—

18 ‘‘(i) for fiscal year 1997 is 0.950,

19 ‘‘(ii) for fiscal year 1998 is 0.986, and

20 ‘‘(iii) for a subsequent fiscal year is

21 0.998.

22 ‘‘(C) TRANSITIONAL ADJUSTMENT FOR

23 PRE-FISCAL YEAR 1997-OBLIGATION OUTLAYS.—

24 In order to account for pre-fiscal year 1997-ob25 ligation outlays described in paragraph
743

•S 1956 PCS

1 (4)(C)(iv), in determining the aggregate limit

2 on new obligation authority under subpara3 graph (A) for fiscal year 1997, the pool amount

4 for such fiscal year is equal to—

5 ‘‘(i) the pool amount for such year,

6 reduced by

7 ‘‘(ii) $12,000,000,000.

8 ‘‘(4) BASE OBLIGATION ALLOTMENTS.—

9 ‘‘(A) GENERAL RULE FOR 50 STATES AND

10 THE DISTRICT OF COLUMBIA.—Except as pro11 vided in this paragraph, the ‘base obligation al12 lotment’ for any of the 50 States or the District

13 of Columbia for a fiscal year (beginning with

14 fiscal year 1997) is an amount that bears the

15 same ratio to the base outlay allotment under

16 subsection (c)(2) for such State or District (not

17 taking into account any adjustment due to an

18 election under subsection (c)(4)) for the fiscal

19 year as the ratio of—

20 ‘‘(i) the aggregate limit on new base

21 obligation authority (less the total of the

22 obligation allotments under subparagraph

23 (B)) for the fiscal year, to
744

•S 1956 PCS

1 ‘‘(ii) the base pool amount (less the

2 sum of the base outlay allotments for the

3 territories) for such fiscal year.

4 ‘‘(B) TERRITORIES.—The base obligation

5 allotment for each of the Commonwealths and

6 territories for a fiscal year is the base outlay al7 lotment for such Commonwealth or Territory

8 (as determined under subsection (c)(5)) for the

9 fiscal year divided by the payout adjustment

10 factor for the fiscal year (as defined in para11 graph (3)(B)).

12 ‘‘(C) TRANSITIONAL RULE FOR FISCAL

13 YEAR 1997.—

14 ‘‘(i) IN GENERAL.—The obligation

15 amount for fiscal year 1997 for any State

16 (including the District of Columbia, a

17 Commonwealth, or Territory) is deter18 mined according to the formula: A=(B-C)/

19 D, where—

20 ‘‘(I) ‘A’ is the base obligation

21 amount for such State,

22 ‘‘(II) ‘B’ is the base outlay allot23 ment of such State for fiscal year

24 1997, as determined under subsection

25 (c),
745

•S 1956 PCS

1 ‘‘(III) ‘C’ is the amount of the

2 pre-enactment-obligation outlays (as

3 established for such State under

4 clause (ii)), and

5 ‘‘(IV) ‘D’ is the payout adjust6 ment factor for such fiscal year (as

7 defined in paragraph (3)(B)).

8 ‘‘(ii) PRE-FISCAL YEAR 1997-OBLIGA9 TION OUTLAY AMOUNTS.—Not later than

10 November 1, 1996, the Secretary shall es11 timate (based on the best data available)

12 and publish in the Federal Register the

13 amount of the pre-fiscal year 1997-obliga14 tion outlays (as defined in clause (iv)) for

15 each State (including the District of Co16 lumbia, Commonwealths, and Territories).

17 The total of such amounts shall equal the

18 dollar amount specified in paragraph

19 (3)(C)(ii).

20 ‘‘(iii) AGREEMENT.—The submission

21 of a State plan by a State under this title

22 is deemed to constitute the State’s accept23 ance of the obligation allotment limitations

24 under this subsection, including the for25 mula for computing the amount of the
746

•S 1956 PCS

1 base obligation allotment and any supple2 mental obligation allotments.

3 ‘‘(iv) PRE-FISCAL YEAR 1997-OBLIGA4 TION OUTLAYS DEFINED.—In this sub5 section, the term ‘pre-fiscal year 1997-obli6 gation outlays’ means, for a State, the out7 lays of the Federal Government that result

8 from obligations that have been incurred

9 under title XIX with respect to the State

10 before October 1, 1996, but for which pay11 ments to States have not been made as of

12 such date.

13 ‘‘(D) ADJUSTMENT TO REFLECT ADOPTION

14 OF ALTERNATIVE GROWTH FORMULA.—Any

15 State that has elected an alternative growth

16 formula under subsection (c)(4) which increases

17 or decreases the dollar amount of an outlay al18 lotment for a fiscal year is deemed to have in19 creased or decreased, respectively, its obligation

20 amount for such fiscal year by the amount of

21 such increase or decrease.

22 ‘‘(E) TRANSITIONAL CORRECTION FOR FIS23 CAL YEAR 1997.—

24 ‘‘(i) IN GENERAL.—The base obliga25 tion amount for fiscal year 1998 for any
747

•S 1956 PCS

1 State described in clause (ii) shall be in2 creased by the amount by which the

3 amount described in clause (ii)(I) exceeds

4 the amount described in clause (ii)(II), di5 vided by the payout adjustment factor

6 specified in paragraph (3)(B) for fiscal

7 year 1997. The increase under this clause

8 shall be paid to a State in the first quarter

9 of fiscal year 1998.

10 ‘‘(ii) STATES DESCRIBED.—A State

11 described in this clause is a State for

12 which—

13 ‘‘(I) the amount of the pre-fiscal

14 year 1997-obligation outlays (as es15 tablished for such State under sub16 paragraph (C)(ii)), exceeded

17 ‘‘(II) the outlays of the Federal

18 Government during fiscal year 1997

19 that are attributable to obligations

20 that were incurred under title XIX

21 with respect to the State before Octo22 ber 1, 1996, but for which payments

23 to States had not been made as of

24 such date.
748

•S 1956 PCS

1 ‘‘(5) SEQUENCE OF OBLIGATIONS.—For pur2 poses of carrying out this title, payments under sec3 tion 1512 to a State eligible for a supplemental out4 lay allotment that are attributable to—

5 ‘‘(A) expenditures for medical assistance

6 described in the second sentence of subsection

7 (f)(1) or the second sentence of subsection

8 (h)(1) shall first be counted toward the supple9 mental outlay allotment provided under sub10 section (f) or (h), respectively, rather than to11 ward the base outlay allotment otherwise pro12 vided under this section; or

13 ‘‘(B) subsection (g) (relating to the um14 brella fund) shall first be counted toward the

15 allotment provided other than under such sub16 section, and then to such subsection.

17 ‘‘(b) BASE POOL OF AVAILABLE FUNDS.—

18 ‘‘(1) IN GENERAL.—For purposes of this sec19 tion, the ‘base pool amount’ under this subsection

20 for—

21 ‘‘(A) fiscal year 1996 is $96,601,037,894,

22 ‘‘(B) fiscal year 1997 is $103,447,755,053,

23 ‘‘(C) fiscal year 1998 is $108,430,173,129,

24 ‘‘(D) fiscal year 1999 is

25 $113,652,562,483,
749

•S 1956 PCS

1 ‘‘(E) fiscal year 2000 is $119,126,480,999,

2 ‘‘(F) fiscal year 2001 is $124,864,043,230,

3 ‘‘(G) fiscal year 2002 is $130,877,947,213,

4 and

5 ‘‘(H) each subsequent fiscal year is the

6 pool amount under this paragraph for the pre7 vious fiscal year increased by the lesser of 4.82

8 percent or the annual percentage increase in

9 the gross domestic product for the 12-month

10 period ending in June before the beginning of

11 that subsequent fiscal year.

12 ‘‘(2) NATIONAL GROWTH PERCENTAGE.—For

13 purposes of this section for a fiscal year (beginning

14 with fiscal year 1997), the ‘national growth percent15 age’ is the percentage by which—

16 ‘‘(A) the base pool amount under para17 graph (1) for the fiscal year, exceeds

18 ‘‘(B) such base pool amount for the pre19 vious fiscal year.

20 ‘‘(c) STATE BASE OUTLAY ALLOTMENTS.—

21 ‘‘(1) FISCAL YEAR 1996.—

22 ‘‘(A) IN GENERAL.—For each of the 50

23 States and the District of Columbia, the

24 amount of the State base outlay allotment

25 under this subsection for fiscal year 1996 is,
750

•S 1956 PCS

1 subject to paragraph (4), determined in accord2 ance with the following table:

‘‘State or District: Outlay allotment (in dollars):

Alabama ......................................... 1,517,652,207

Alaska ............................................ 204,933,213

Arizona .......................................... 1,385,781,297

Arkansas ........................................ 1,011,457,933

California ....................................... 8,946,838,461

Colorado ......................................... 757,492,679

Connecticut .................................... 1,463,011,635

Delaware ........................................ 212,327,763

District of Columbia ...................... 501,412,091

Florida ........................................... 3,715,624,180

Georgia .......................................... 2,426,320,602

Hawaii ........................................... 323,124,375

Idaho .............................................. 278,329,686

Illinois ............................................ 3,467,274,342

Indiana .......................................... 1,952,467,267

Iowa ............................................... 835,235,895

Kansas ........................................... 713,700,869

Kentucky ....................................... 1,577,828,832

Louisiana ....................................... 2,622,000,000

Maine ............................................. 694,220,790

Maryland ....................................... 1,369,699,847

Massachusetts ................................ 2,870,346,862

Michigan ........................................ 3,465,182,886

Minnesota ...................................... 1,793,776,356

Mississippi ..................................... 1,261,781,330

Missouri ......................................... 1,849,248,945

Montana ......................................... 312,212,472

Nebraska ....................................... 463,900,417

Nevada ........................................... 257,896,453

New Hampshire ............................. 560,000,000

New Jersey .................................... 2,854,621,241

New Mexico ................................... 634,756,945

New York ....................................... 12,901,793,038

North Carolina .............................. 2,587,883,809

North Dakota ................................ 241,168,563

Ohio ............................................... 4,034,049,690

Oklahoma ....................................... 911,198,775

Oregon ........................................... 1,088,670,440

Pennsylvania .................................. 4,454,423,400

Rhode Island ................................. 545,686,262

South Carolina ............................... 1,621,021,815

South Dakota ................................ 262,804,959

Tennessee ...................................... 2,519,934,251

Texas ............................................. 6,351,909,343

Utah ............................................... 484,274,254

Vermont ......................................... 248,158,729

Virginia .......................................... 1,144,962,509

Washington .................................... 1,763,460,996

West Virginia ................................. 1,156,813,157
751

•S 1956 PCS

‘‘State or District: Outlay allotment (in dollars):

Wisconsin ....................................... 1,709,500,642

Wyoming ........................................ 132,915,390.

1 ‘‘(2) FOR SUBSEQUENT FISCAL YEARS.—

2 ‘‘(A) IN GENERAL.—Subject to the suc3 ceeding provisions of this subsection, the

4 amount of the State base outlay allotment

5 under this subsection for one of the 50 States

6 and the District of Columbia for a fiscal year

7 (beginning with fiscal year 1997) is equal to the

8 product of—

9 ‘‘(i) the needs-based amount deter10 mined under subparagraph (B) for such

11 State or District for the fiscal year, and

12 ‘‘(ii) the adjustment factor described

13 in subparagraph (C) for the fiscal year.

14 ‘‘(B) NEEDS-BASED AMOUNT.—The needs15 based amount under this subparagraph for a

16 State or the District of Columbia for a fiscal

17 year is equal to the product of—

18 ‘‘(i) the State’s or District’s aggregate

19 expenditure need for the fiscal year (as de20 termined under subsection (d)), and

21 ‘‘(ii) the State’s or District’s old Fed22 eral medical assistance percentage (as de23 fined in section 1512(d)) for the fiscal year

24 (or, in the case of fiscal year 1997, the
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•S 1956 PCS

1 Federal medical assistance percentage de2 termined under section 1905(b) for fiscal

3 year 1996).

4 ‘‘(C) ADJUSTMENT FACTOR.—The adjust5 ment factor under this subparagraph for a fis6 cal year is such proportion so that, when it is

7 applied under subparagraph (A)(ii) for the fis8 cal year (taking into account the floors and ceil9 ings under paragraph (3)), the total of the base

10 outlay allotments under this subsection for all

11 the 50 States and the District of Columbia for

12 the fiscal year (not taking into account any in13 crease in a base outlay allotment for a fiscal

14 year attributable to the election of an alter15 native growth formula under paragraph (4)) is

16 equal to the amount by which (i) the base pool

17 amount for the fiscal year (as determined under

18 subsection (b)), exceeds (ii) the sum of the base

19 outlay allotments provided under paragraph (5)

20 for the Commonwealths and Territories for the

21 fiscal year.

22 ‘‘(3) FLOORS AND CEILINGS.—

23 ‘‘(A) FLOORS.—Subject to the ceiling es24 tablished under subparagraph (B), in no case

25 shall the amount of the State base outlay allot-
753

•S 1956 PCS

1 ment under paragraph (2) for a fiscal year be

2 less than the greatest of the following:

3 ‘‘(i) IN GENERAL.—Beginning with

4 fiscal year 1998, 0.24 percent of the pool

5 amount for the fiscal year.

6 ‘‘(ii) FLOOR BASED ON PREVIOUS

7 YEAR’S OUTLAY ALLOTMENT.—Subject to

8 clause (iii)—

9 ‘‘(I) for fiscal year 1997, 103.5

10 percent of the amount of the State

11 base outlay allotment under this sub12 section for fiscal year 1996,

13 ‘‘(II) for fiscal year 1998, 103

14 percent of the amount of the State

15 base outlay allotment under this sub16 section for fiscal year 1997,

17 ‘‘(III) for fiscal year 1999, 102.5

18 percent of the amount of the State

19 base outlay allotment under this sub20 section for fiscal year 1998,

21 ‘‘(IV) for fiscal year 2000,

22 102.25 percent of the amount of the

23 State base outlay allotment under this

24 subsection for fiscal year 1999, and
754

•S 1956 PCS

1 ‘‘(V) for each of fiscal years 2001

2 and 2002, 102 percent of the amount

3 of the State base outlay allotment

4 under this subsection for the previous

5 fiscal year.

6 ‘‘(iii) FLOOR BASED ON OUTLAY AL7 LOTMENT GROWTH RATE IN FIRST

8 YEAR.—Beginning with fiscal year 1998,

9 in the case of a State for which the outlay

10 allotment under this subsection for fiscal

11 year 1997 exceeded its outlay allotment

12 under this subsection for the previous fis13 cal year by more than 95 percent of the

14 national growth percentage for fiscal year

15 1997, 90 percent of the national growth

16 percentage for the fiscal year involved.

17 ‘‘(B) CEILINGS.—

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

19 (ii), in no case shall the amount of the

20 State base outlay allotment under para21 graph (2) for a fiscal year be greater than

22 the product of—

23 ‘‘(I) the State base outlay allot24 ment under this subsection for the
755

•S 1956 PCS

1 State for the preceding fiscal year,

2 and

3 ‘‘(II) the applicable percent

4 (specified in clause (ii) or (iii)) for the

5 fiscal year involved.

6 ‘‘(ii) GENERAL RULE FOR APPLICA7 BLE PERCENT.—For purposes of clause

8 (i), subject to clause (iii), the ‘applicable

9 percent’ for fiscal year 1997 is 126.98 per10 cent and for a subsequent fiscal year is

11 133 percent of the national growth per12 centage for the fiscal year.

13 ‘‘(iii) SPECIAL RULE.—For a fiscal

14 year after fiscal year 1997, in the case of

15 a State (among the 50 States and the Dis16 trict of Columbia) that is one of the 10

17 States with the lowest Federal spending

18 per resident-in-poverty rates (as deter19 mined under clause (iv)) for the fiscal

20 year, the ‘applicable percent’ is 150 per21 cent of the national growth percentage for

22 the fiscal year.

23 ‘‘(iv) DETERMINATION OF FEDERAL

24 SPENDING PER RESIDENT-IN-POVERTY

25 RATE.—For purposes of clause (iii), the
756

•S 1956 PCS

1 ‘Federal spending per resident-in-poverty

2 rate’ for a State for a fiscal year is equal

3 to—

4 ‘‘(I) the State’s outlay allotment

5 under this subsection for the previous

6 fiscal year (determined without regard

7 to paragraph (4)), divided by

8 ‘‘(II) the average annual number

9 of residents of the State in poverty

10 (as defined in subsection (d)(2)) with

11 respect to the fiscal year.

12 ‘‘(C) SPECIAL RULE.—

13 ‘‘(i) IN GENERAL.—Notwithstanding

14 the preceding subparagraphs of this para15 graph, the State base outlay allotment

16 for—

17 ‘‘(I) Louisiana, subject to sub18 clause (II), for each of the fiscal years

19 1997 through 2000, is

20 $2,622,000,000,

21 ‘‘(II) Louisiana for fiscal year

22 1997 only, as otherwise determined,

23 shall be increased by $37,048,207,

24 and
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•S 1956 PCS

1 ‘‘(III) Nevada for each of fiscal

2 years 1997, 1998, and 1999, as other3 wise determined, shall be increased by

4 $90,000,000.

5 ‘‘(ii) EXCEPTION.—A State described

6 in subclause (I) of clause (i) may apply to

7 the Secretary for use of the State base out8 lay allotment otherwise determined under

9 this subsection for any fiscal year, if such

10 State notifies the Secretary not later than

11 March 1 preceding such fiscal year that

12 such State will be able to expend sufficient

13 State funds in such fiscal year to qualify

14 for such allotment.

15 ‘‘(iii) TREATMENT OF INCREASE AS

16 SUPPLEMENTAL ALLOTMENT.—Any in17 crease in an outlay allotment under clause

18 (i)(II) or (i)(III) shall not be taken into ac19 count for purposes of determining—

20 ‘‘(I) the adjustment factor under

21 paragraph (2) for fiscal year 1997,

22 ‘‘(II) any State base outlay allot23 ment for a fiscal year after fiscal year

24 1997,
758

•S 1956 PCS

1 ‘‘(III) the base pool amount for a

2 fiscal year after fiscal year 1997, or

3 ‘‘(IV) determination of the na4 tional growth percentage for any fiscal

5 year.

6 ‘‘(4) ELECTION OF ALTERNATIVE GROWTH

7 FORMULA.—

8 ‘‘(A) ELECTION.—In order to reduce vari9 ations in increases in outlay allotments over

10 time, any of the 50 States or the District of Co11 lumbia may elect (by notice provided to the Sec12 retary by not later than April 1, 1997) to adopt

13 an alternative growth rate formula under this

14 paragraph for the determination of the State’s

15 base outlay allotment in fiscal year 1997 and

16 for the increase in the amount of such allot17 ment in subsequent fiscal years.

18 ‘‘(B) FORMULA.—The alternative growth

19 formula under this paragraph may be any for20 mula under which a portion of the State base

21 outlay allotment for fiscal year 1997 under

22 paragraph (1) is deferred and applied to in23 crease the amount of its base outlay allotment

24 for one or more subsequent fiscal years, so long

25 as the total amount of such increases for all
759

•S 1956 PCS

1 such subsequent fiscal years does not exceed the

2 amount of the base outlay allotment deferred

3 from fiscal year 1997.

4 ‘‘(5) COMMONWEALTHS AND TERRITORIES.—

5 ‘‘(A) IN GENERAL.—The base outlay allot6 ment for each of the Commonwealths and Ter7 ritories for a fiscal year is the maximum

8 amount that could have been certified under

9 section 1108(c) (as in effect on the day before

10 the date of the enactment of this title) with re11 spect to the Commonwealth or Territory for the

12 fiscal year with respect to title XIX, if the na13 tional growth percentage (as determined under

14 subsection (b)(2)) for the fiscal year had been

15 substituted (beginning with fiscal year 1997)

16 for the percentage increase referred to in sec17 tion 1108(c)(1)(B) (as so in effect).

18 ‘‘(B) DISREGARD OF ROUNDING REQUIRE19 MENTS.—For purposes of subparagraph (A),

20 the rounding requirements under section

21 1108(c) shall not apply.

22 ‘‘(C) LIMITATION ON TOTAL AMOUNT FOR

23 FISCAL YEAR 1996.—Notwithstanding the provi24 sions of subparagraph (A), the total amount of

25 the base outlay allotments for the Common-
760

•S 1956 PCS

1 wealths and Territories for fiscal year 1996

2 may not exceed $139,950,000.

3 ‘‘(d) STATE AGGREGATE EXPENDITURE NEED DE4 TERMINED.—

5 ‘‘(1) IN GENERAL.—For purposes of subsection

6 (c), the ‘State aggregate expenditure need’ for a

7 State or the District of Columbia for a fiscal year

8 is equal to the product of the following 4 factors:

9 ‘‘(A) PROGRAM NEED.—The program need

10 for the State for the fiscal year, as determined

11 under paragraph (2).

12 ‘‘(B) HEALTH CARE COST INDEX.—The

13 health care cost index for the State (as deter14 mined under paragraph (3)) for the most recent

15 fiscal year for which data are available.

16 ‘‘(C) PROJECTED INFLATION.—The CPI

17 increase factor for the fiscal year (as defined in

18 subsection (g)(4)(C)).

19 ‘‘(D) NATIONAL AVERAGE SPENDING PER

20 RESIDENT IN POVERTY.—The national average

21 spending per resident in poverty (as determined

22 under paragraph (4)).

23 ‘‘(2) PROGRAM NEED.—

24 ‘‘(A) IN GENERAL.—In this subsection and

25 subject to subparagraph (D), the ‘program
761

•S 1956 PCS

1 need’ of a State for a fiscal year is equal to the

2 sum, for each of the population groups de3 scribed in subparagraph (B), of the product de4 scribed in subparagraph (C) for that population

5 group.

6 ‘‘(B) POPULATION GROUPS DESCRIBED.—

7 The population groups described in this sub8 paragraph are as follows:

9 ‘‘(i) INDIVIDUALS BETWEEN 60 AND

10 85.—Individuals who are least 60, but less

11 than 85, years of age.

12 ‘‘(ii) INDIVIDUALS 85 OR OLDER.—In13 dividuals who are 85 years of age or older.

14 ‘‘(iii) DISABLED INDIVIDUALS.—Indi15 viduals who are eligible for medical assist16 ance because such individuals are blind or

17 disabled and are not described in clause (i)

18 or (ii).

19 ‘‘(iv) CHILDREN.—Individuals de20 scribed in subsection (g)(2)(B).

21 ‘‘(v) OTHER INDIVIDUALS.—Individ22 uals not described in a previous clause of

23 this subparagraph.

24 ‘‘(C) PRODUCT DESCRIBED.—The product

25 described in this subparagraph, with respect to
762

•S 1956 PCS

1 a population group for a fiscal year for a State

2 (or District), is the product of the following 2

3 factors for that group, year, and State (or Dis4 trict):

5 ‘‘(i) WEIGHTING FACTOR REFLECTING

6 RELATIVE NEED FOR THE GROUP.—For all

7 States, the national average per recipient

8 expenditures under this title in the 50

9 States and the District of Columbia for in10 dividuals in such group, as determined

11 under subparagraph (E), divided by the

12 national average of such averages for all

13 such groups (weighted by the number of

14 recipients in each group).

15 ‘‘(ii) NUMBER OF NEEDY IN GROUP.—

16 The product of—

17 ‘‘(I) for all groups, the average

18 annual number of residents in poverty

19 in such State or District (based on

20 data made generally available by the

21 Bureau of the Census from the Cur22 rent Population Survey) for the most

23 recent 3-calendar-year period (ending

24 before the fiscal year) for which such

25 data are available; and
763

•S 1956 PCS

1 ‘‘(II) the proportion, of all indi2 viduals who received medical assist3 ance under this title in such State or

4 District, that were individuals in such

5 group.

6 In clause (ii)(II), the term ‘resident in pov7 erty’ means an individual whose family in8 come does not exceed the poverty threshold

9 (as such terms are defined by the Office of

10 Management and Budget and are generally

11 interpreted and applied by the Bureau of

12 the Census for the year involved).

13 ‘‘(D) FLOORS AND CEILINGS ON PROGRAM

14 NEED.—

15 ‘‘(i) IN GENERAL.—In no case shall

16 the value of the program need for a State

17 for a fiscal year be less than 90 percent,

18 or be more than 115 percent, of the pro19 gram need based on national averages (de20 termined under clause (ii)) for that State

21 for the fiscal year.

22 ‘‘(ii) PROGRAM NEED BASED ON NA23 TIONAL AVERAGES.—For purposes of

24 clause (i), the ‘program need based on na25 tional average’ for a fiscal year is equal to
764

•S 1956 PCS

1 the sum of the product (for each of the

2 population groups) of the following 3 fac3 tors (for that group, year, and State or

4 District):

5 ‘‘(I) WEIGHTING FACTOR FOR

6 GROUP.—The weighting factor for the

7 group (described in subparagraph

8 (C)(i)).

9 ‘‘(II) TOTAL NUMBER OF NEEDY

10 IN STATE.—For all groups, the aver11 age annual number of residents in

12 poverty in such State or District (as

13 defined in subparagraph (C)(ii)(I)).

14 ‘‘(III) NATIONAL PROPORTION

15 OF NEEDY IN GROUP.—The propor16 tion, of all individuals who received

17 medical assistance under this title in

18 all of the States and the District in all

19 such groups, that were individuals in

20 such group.

21 ‘‘(E) DETERMINATION OF NATIONAL

22 AVERAGES AND PROPORTIONS.—The national

23 averages per recipient and the proportions re24 ferred to in subparagraph (C)(ii) and (C)(iii),
765

•S 1956 PCS

1 respectively, shall be determined by the Sec2 retary using the most recent data available.

3 ‘‘(F) EXPENDITURE DEFINED.—For pur4 poses of this paragraph, the term ‘expenditure’

5 means medical vendor payments by basis of eli6 gibility as reported by HCFA Form 2082.

7 ‘‘(3) HEALTH CARE COST INDEX.—

8 ‘‘(A) IN GENERAL.—In this section, the

9 ‘health care cost index’ for a State or the Dis10 trict of Columbia for a fiscal year is the sum

11 of—

12 ‘‘(i) 0.15, and

13 ‘‘(ii) 0.85 multiplied by the ratio of

14 (I) the annual average wages for hospital

15 employees in such State or District for the

16 fiscal year (as determined under subpara17 graph (B)), to (II) the annual average

18 wages for hospital employees in the 50

19 States and the District of Columbia for

20 such year (as determined under such sub21 paragraph).

22 ‘‘(B) DETERMINATION OF ANNUAL AVER23 AGE WAGES OF HOSPITAL EMPLOYEES.—The

24 Secretary shall provide for the determination of

25 annual average wages for hospital employees in
766

•S 1956 PCS

1 a State or the District of Columbia and, collec2 tively, in the 50 States and the District of Co3 lumbia for a fiscal year based on the area wage

4 data applicable to hospitals under section

5 1886(d)(2)(E) (or, if such data no longer ex6 ists, comparable data of hospital wages) for dis7 charges occurring during the fiscal year in8 volved.

9 ‘‘(4) NATIONAL AVERAGE SPENDING PER RESI10 DENT IN POVERTY.—For purposes of this sub11 section, the ‘national average spending per resident

12 in poverty’—

13 ‘‘(A) for fiscal year 1997 is equal to—

14 ‘‘(i) the sum (for each of the 50

15 States and the District of Columbia) of the

16 total of the Federal and State expenditures

17 under title XIX for calendar quarters in

18 fiscal year 1994, increased by the percent19 age by which (I) the base pool amount for

20 fiscal year 1997, exceeds (II)

21 $83,213,431,458 (which represents Fed22 eral medicaid expenditures for such States

23 and District for fiscal year 1994); divided

24 by
767

•S 1956 PCS

1 ‘‘(ii) the sum of the number of resi2 dents in poverty (as defined in paragraph

3 (2)(C)(ii)(I)) for all of the 50 States and

4 the District of Columbia for fiscal year

5 1994; and

6 ‘‘(B) for a succeeding fiscal year is equal

7 to the national average spending per resident in

8 poverty under this paragraph for the preceding

9 fiscal year increased by the national growth

10 percentage (as defined in subsection (b)(2)) for

11 the fiscal year involved.

12 ‘‘(e) PUBLICATION OF OBLIGATION AND OUTLAY AL13 LOTMENTS.—

14 ‘‘(1) NOTICE OF PRELIMINARY ALLOTMENTS.—

15 Not later than April 1 before the beginning of each

16 fiscal year (beginning with fiscal year 1997), the

17 Secretary shall initially compute, after consultation

18 with the Comptroller General, and publish in the

19 Federal Register notice of the proposed base obliga20 tion allotment, base outlay allotment, and supple21 mental allotments under subsections (f) and (h) for

22 each State under this section (not taking into ac23 count subsection (a)(2)(B)) for the fiscal year. The

24 Secretary shall include in the notice a description of
768

•S 1956 PCS

1 the methodology and data used in deriving such al2 lotments for the year.

3 ‘‘(2) REVIEW BY GAO.—The Comptroller Gen4 eral shall submit to Congress by not later than May

5 15 of each such fiscal year, a report analyzing such

6 allotments and the extent to which they comply with

7 the precise requirements of this section.

8 ‘‘(3) NOTICE OF FINAL ALLOTMENTS.—Not

9 later than July 1 before the beginning of each such

10 fiscal year, the Secretary, taking into consideration

11 the analysis contained in the report of the Comptrol12 ler General under paragraph (2), shall compute and

13 publish in the Federal Register notice of the final al14 lotments under this section (both taking into ac15 count and not taking into account subsection

16 (a)(2)(B)) for the fiscal year. The Secretary shall in17 clude in the notice a description of any changes in

18 such allotments from the initial allotments published

19 under paragraph (1) for the fiscal year and the rea20 sons for such changes. Once published under this

21 paragraph, the Secretary is not authorized to change

22 such allotments.

23 ‘‘(4) GAO REPORT ON FINAL ALLOTMENTS.—

24 The Comptroller General shall submit to Congress

25 by not later than August 1 of each such fiscal year,
769

•S 1956 PCS

1 a report analyzing the final allotments under para2 graph (3) and the extent to which they comply with

3 the precise requirements of this section.

4 ‘‘(5) TRANSITIONAL RULE FOR FISCAL YEAR

5 1997.—With respect to fiscal year 1997, the dead6 lines under the previous provisions of this subsection

7 shall be extended by a number of days equal to the

8 number of days between May 1, 1996, and the date

9 of the enactment of this title.

10 ‘‘(f) SUPPLEMENTAL ALLOTMENT FOR CERTAIN

11 HEALTH CARE SERVICES TO CERTAIN ALIENS.—

12 ‘‘(1) IN GENERAL.—For purposes of this sec13 tion for each of fiscal years 1998 through 2002 in

14 the case of a subsection (f) supplemental allotment

15 eligible State, the amount of the supplemental allot16 ment under this subsection is the amount provided

17 under paragraph (2) for the State for that year.

18 Such amount may only be used for the purpose of

19 providing medical assistance for care and services

20 for aliens described in paragraph (1) of section

21 1513(f) and for which the exception described in

22 paragraph (2) of such section applies. Section

23 1512(f)(4) shall apply to such assistance in the same

24 manner as it applies to medical assistance described

25 in such section.
770

•S 1956 PCS

1 ‘‘(2) SUPPLEMENTAL AMOUNT.—

2 ‘‘(A) IN GENERAL.—For purposes of para3 graph (1), the supplemental amount for a sub4 section (f) supplemental allotment eligible State

5 for a fiscal year is equal to the subsection (f)

6 supplemental allotment ratio (as defined in sub7 paragraph (C)) multiplied by the subsection (f)

8 supplemental pool amount (specified in sub9 paragraph (D)) for the fiscal year.

10 ‘‘(B) SUBSECTION (f) SUPPLEMENTAL AL11 LOTMENT ELIGIBLE STATE.—In this subsection,

12 the term ‘subsection (f) supplemental allotment

13 eligible State’ means one of the 15 States with

14 the highest ratio of undocumented alien resi15 dents to the total population for such State.

16 ‘‘(C) SUBSECTION (f) SUPPLEMENTAL AL17 LOTMENT RATIO.—In this paragraph, the ‘sub18 section (f) supplemental allotment ratio’ for a

19 State is the ratio of—

20 ‘‘(i) the number of undocumented

21 aliens residing in the State, to

22 ‘‘(ii) the sum of such numbers for all

23 subsection (f) supplemental allotment eligi24 ble States.
771

•S 1956 PCS

1 ‘‘(D) SUBSECTION (f) SUPPLEMENTAL

2 POOL AMOUNT.—In this paragraph, the ‘sub3 section (f) supplemental pool amount’—

4 ‘‘(i) for fiscal year 1998 is

5 $389,800,000,

6 ‘‘(ii) for fiscal year 1999 is

7 $489,800,000,

8 ‘‘(iii) for fiscal year 2000 is

9 $589,800,000,

10 ‘‘(iv) for fiscal year 2001 is

11 $689,800,000, and

12 ‘‘(v) for fiscal year 2002 is

13 $789,800,000.

14 ‘‘(E) DETERMINATION OF NUMBER.—

15 ‘‘(i) IN GENERAL.—The number of

16 undocumented aliens residing in a State

17 under this paragraph—

18 ‘‘(I) for fiscal year 1998 shall be

19 determined based on estimates of the

20 resident illegal alien population resid21 ing in each State prepared by the Sta22 tistics Division of the Immigration

23 and Naturalization Service as of Octo24 ber 1992, and
772

•S 1956 PCS

1 ‘‘(II) for a subsequent fiscal year

2 shall be determined based on the most

3 recent updated estimate made under

4 clause (ii).

5 ‘‘(ii) UPDATING ESTIMATE.—For each

6 fiscal year beginning with fiscal year 1999,

7 the Secretary, in consultation with the

8 Commission of the Immigration and Natu9 ralization Service, States, and outside ex10 perts, shall estimate the number of un11 documented aliens residing in each of the

12 50 States and the District of Columbia.

13 ‘‘(g) SUPPLEMENTAL PER BENEFICIARY UMBRELLA

14 ALLOTMENT FOR STATES WITH EXCESS GROWTH IN CER15 TAIN POPULATION GROUPS.—

16 ‘‘(1) IN GENERAL.—Subject to paragraphs (5)

17 through (7), for purposes of this section the amount

18 of the supplemental allotment under this subsection

19 for a State for a fiscal year (beginning with fiscal

20 year 1997) is the sum, for each supplemental allot21 ment population group described in paragraph (2),

22 of the product of the following:

23 ‘‘(A) EXCESS NUMBER OF INDIVIDUALS.—

24 The excess number of individuals (if any, deter-
773

•S 1956 PCS

1 mined under paragraph (3)) for State and the

2 fiscal year who are in the population group.

3 ‘‘(B) APPLICABLE PER BENEFICIARY

4 AMOUNT.—The applicable per beneficiary

5 amount (determined under paragraph (4)) for

6 the State and fiscal year for the population

7 group.

8 ‘‘(C) FMAP.—The old Federal medical as9 sistance percentage (as defined in section

10 1512(d)) for the State and fiscal year.

11 ‘‘(2) SUPPLEMENTAL ALLOTMENT POPULATION

12 GROUP.—In this subsection, each of the following

13 shall be considered to be a separate ‘supplemental

14 allotment population group’:

15 ‘‘(A) POOR PREGNANT WOMEN.—Individ16 uals described in section 1501(a)(1)(A).

17 ‘‘(B) POOR CHILDREN.—Individuals (not

18 described in subparagraph (C))—

19 ‘‘(i) described in subparagraph (B) or

20 (C) of section 1501(a)(1), or

21 ‘‘(ii) described in subparagraph (F) or

22 (G) of section 1501(a)(1) who are under

23 21 years of age and who are not pregnant

24 women.
774

•S 1956 PCS

1 ‘‘(C) POOR DISABLED INDIVIDUALS.—Only

2 in the case of a State that has elected the op3 tion (of guaranteeing coverage of disabled indi4 viduals) described in section 1501(a)(1)(D)(ii)

5 for the fiscal year (and, in the case of a fiscal

6 year after fiscal year 1997, for the previous fis7 cal year), individuals—

8 ‘‘(i) who are described in such section;

9 or

10 ‘‘(ii) who are described in section

11 1502(a) under paragraph (1) of that sec12 tion.

13 ‘‘(D) POOR ELDERLY INDIVIDUALS.—Indi14 viduals who are—

15 ‘‘(i) described in section

16 1501(a)(1)(E); or

17 ‘‘(ii) described in section 1502(a)

18 under paragraph (2) of that section.

19 ‘‘(E) QUALIFIED MEDICARE BENE20 FICIARIES.—Individuals described in section

21 1501(b)(1)(A) who are not described in sub22 paragraph (D).

23 ‘‘(F) QUALIFIED DISABLED AND WORKING

24 INDIVIDUALS.—Individuals described in section
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•S 1956 PCS

1 1501(b)(1)(B) who are not described in sub2 paragraph (D).

3 ‘‘(G) CERTAIN OTHER MEDICARE BENE4 FICIARIES.—Individuals described in section

5 1501(b)(1)(C) who are not described in sub6 paragraph (D).

7 ‘‘(H) OTHER POOR ADULTS.—Individuals

8 described in section 1501(a)(1)(G) who are not

9 within a population group described in a pre10 vious subparagraph.

11 ‘‘(3) EXCESS NUMBER OF INDIVIDUALS.—

12 ‘‘(A) IN GENERAL.—In this subsection, the

13 ‘excess number of individuals’, for a State for

14 a fiscal year with respect to a supplemental al15 lotment population group, is equal to the

16 amount (if any) by which—

17 ‘‘(i) the number of full-year equivalent

18 individuals in the population group for the

19 State and fiscal year, exceeds

20 ‘‘(ii) the anticipated number of such

21 individuals (as determined under subpara22 graph (B)) for the State and fiscal year in

23 such group.

24 ‘‘(B) ANTICIPATED NUMBER.—
776

•S 1956 PCS

1 ‘‘(i) IN GENERAL.—In subparagraph

2 (A)(ii), the ‘anticipated number’ of individ3 uals for a State in a supplemental allot4 ment population group for—

5 ‘‘(I) fiscal year 1997 is equal to

6 the number of full-year equivalent in7 dividuals in such group enrolled in the

8 State medicaid plan under title XIX

9 in fiscal year 1996 increased by the

10 percentage increase factor (described

11 in clause (ii)) for fiscal year 1997; or

12 ‘‘(II) a subsequent fiscal year is

13 equal to the number of full-year equiv14 alent individuals in the population

15 group for the State for the previous

16 fiscal year increased by the percentage

17 increase factor (described in clause

18 (ii)) for that subsequent fiscal year.

19 ‘‘(ii) PERCENTAGE INCREASE FAC20 TOR.—For purposes of this subparagraph,

21 the ‘percentage increase factor’ for a fiscal

22 year is equal to zero or, if greater, the

23 number of percentage points by which (I)

24 the State percentage growth factor (as de25 fined in subparagraph (C)) for the fiscal
777

•S 1956 PCS

1 year, exceeds (II) the percentage increase

2 in the consumer price index for all urban

3 consumers (U.S. city average) during the

4 12-month period beginning with July be5 fore the beginning of the fiscal year.

6 ‘‘(C) STATE PERCENTAGE GROWTH FAC7 TOR.—In this paragraph, the term ‘State per8 centage growth factor’ means, for a State for a

9 fiscal year, the percentage by which (i) the

10 State outlay allotment for the State for the fis11 cal year (determined under this section without

12 regard to this subsection or subsection (f) or

13 (h)), exceeds (ii) such outlay allotment for such

14 State for the preceding fiscal year (as so deter15 mined).

16 ‘‘(D) INDIVIDUALS COUNT ONLY ONCE.—

17 An individual may at any time not be counted

18 in more than one supplemental allotment popu19 lation group.

20 ‘‘(4) APPLICABLE PER BENEFICIARY

21 AMOUNT.—

22 ‘‘(A) IN GENERAL.—In this subsection,

23 subject to subparagraph (D), the ‘applicable per

24 beneficiary amount’, for a State for a fiscal

25 year for a supplemental allotment population
778

•S 1956 PCS

1 group, is equal to the base per beneficiary

2 amount (determined under subparagraph (B))

3 for the State for the group, increased by the

4 Secretary’s estimate of the increase in the per

5 beneficiary expenditures under this title (and

6 title XIX) for States between fiscal year 1995

7 and fiscal year 1996, and further increased (for

8 each subsequent fiscal year up to the fiscal year

9 involved and in a compounded manner) by the

10 CPI increase factor (as defined in subparagraph

11 (C)) for each such fiscal year.

12 ‘‘(B) BASE PER BENEFICIARY AMOUNT.—

13 ‘‘(i) IN GENERAL.—The Secretary

14 shall determine for each State a base per

15 beneficiary amount for each supplemental

16 allotment population group equal to—

17 ‘‘(I) the sum of the total expendi18 ture amounts described in clauses (ii)

19 and (iii), divided by

20 ‘‘(II) the full-year equivalent

21 number of such individuals in such

22 group enrolled under the State plan

23 under title XIX for fiscal year 1995.

24 ‘‘(ii) MEDICAL ASSISTANCE EXPENDI25 TURES.—The total expenditure amount de-
779

•S 1956 PCS

1 scribed in this clause, with respect to a

2 supplemental allotment population group,

3 is the total amount of expenditures for

4 which Federal financial participation was

5 provided to the State under paragraphs (1)

6 and (5) of section 1903(a) for fiscal year

7 1995 with respect to medical assistance

8 furnished with respect to individuals in9 cluded in such group. Such amount shall

10 not include expenditures attributable to

11 payment adjustments under section 1923.

12 ‘‘(iii) ADMINISTRATIVE EXPENDI13 TURES.—The total expenditure amount de14 scribed in this clause, with respect to a

15 supplemental allotment population group,

16 is the product of—

17 ‘‘(I) the total amount of adminis18 trative expenditures for which Federal

19 financial participation was provided to

20 the State under section 1903(a)

21 (other than paragraphs (1) and (5) of

22 such section) for fiscal year 1995, and

23 ‘‘(II) the ratio described in clause

24 (iv) for the population group.
780

•S 1956 PCS

1 ‘‘(iv) RATIO DESCRIBED.—The ratio de2 scribed in this clause for a group is the ratio

3 of—

4 ‘‘(I) the total amount of expendi5 tures described in clause (ii) for the

6 group, to

7 ‘‘(II) the total amount of expend8 itures described in such clause for all

9 individuals under the State plan

10 under title XIX in the base fiscal

11 year.

12 ‘‘(C) CPI INCREASE FACTOR.—In subpara13 graph (A), the ‘CPI increase factor’ for a fiscal

14 year is the percentage by which—

15 ‘‘(i) the Secretary’s estimate of the

16 average value of the consumer price index

17 for all urban consumers (all items, U.S.

18 city average) for months in the fiscal year,

19 exceeds

20 ‘‘(ii) the average value of such index

21 for months in the previous fiscal year.

22 ‘‘(D) SPECIAL RULES FOR CERTAIN MEDI23 CARE BENEFICIARIES.—

24 ‘‘(i) QUALIFIED DISABLED AND

25 WORKING INDIVIDUALS.—In the case of
781

•S 1956 PCS

1 the supplemental allotment population

2 group described in paragraph (2)(F), the

3 ‘applicable per beneficiary amount’, for all

4 States for a fiscal year is the sum of the

5 medicare premiums applied under section

6 1818A for months in the fiscal year.

7 ‘‘(ii) OTHER MEDICARE BENE8 FICIARIES.—In the case of the supple9 mental allotment population group de10 scribed in paragraph (2)(G), the ‘applica11 ble per beneficiary amount’, for all States

12 for a fiscal year is the sum of the medicare

13 premiums applied under section 1839 for

14 months in the fiscal year.

15 ‘‘(5) CONDITIONS FOR ACCESS TO UMBRELLA

16 SUPPLEMENTAL ALLOTMENT.—

17 ‘‘(A) IN GENERAL.—A State may receive a

18 supplemental umbrella allotment under this

19 subsection for a fiscal year only if the following

20 conditions are met:

21 ‘‘(i) The State provides assurances

22 satisfactory to the Secretary that it will ob23 ligate during the fiscal year the full

24 amount of the allotment otherwise provided

25 under this section for the fiscal year.
782

•S 1956 PCS

1 ‘‘(ii) The State provides assurances

2 satisfactory to the Secretary that any

3 amount attributable to a carryover from a

4 previous fiscal year under subsection

5 (a)(2)(B) shall also be obligated under the

6 plan by the end of the fiscal year.

7 ‘‘(iii) The State submits to the Sec8 retary on a periodic basis such reports on

9 numbers of individuals within each supple10 mental allotment population group as the

11 Secretary may determine necessary to as12 sure the accuracy of the supplemental um13 brella allotments under this subsection.

14 The Secretary may not require the submis15 sion of such reports more frequently than

16 quarterly.

17 ‘‘(iv) The State provides assurances

18 satisfactory to the Secretary that it has in

19 effect such data collection procedures as

20 may be necessary to provide for the reports

21 described in clause (iii).

22 ‘‘(B) ESTIMATE.—The amount of any sup23 plemental allotment under this subsection shall

24 be estimated in advance of the fiscal year in25 volved, based on data required to be reported
783

•S 1956 PCS

1 under subparagraph (A)(iii). The Secretary is

2 authorized to adjust such data on a preliminary

3 basis if the Secretary determines that the esti4 mates do not reasonably reflect the actual ex5 cess number of individuals in the supplemental

6 allotment population groups for the fiscal year

7 involved. Section 1512(b)(6) provides for ad8 justment of payments of the supplemental allot9 ment under this subsection based on a final de10 termination using data on actual numbers of in11 dividual in each supplemental allotment popu12 lation group.

13 ‘‘(6) ADJUSTMENT IN ALLOTMENT FOR SAV14 INGS FROM SLOWER POPULATION GROWTH.—

15 ‘‘(A) IN GENERAL.—The amount of the

16 supplemental umbrella allotment to a State

17 under this subsection for a fiscal year shall be

18 reduced (but not below zero) by the sum, for

19 each supplemental allotment population group

20 described in paragraph (2), of the product of

21 the following:

22 ‘‘(i) LESS-THAN-ANTICIPATED NUM23 BER OF INDIVIDUALS.—The less-than-an24 ticipated number of individuals (if any, de25 termined under subparagraph (B)) for
784

•S 1956 PCS

1 State and the fiscal year who are in the

2 population group.

3 ‘‘(ii) APPLICABLE PER BENEFICIARY

4 AMOUNT.—The applicable per beneficiary

5 amount (determined under paragraph (4))

6 for the State and fiscal year for the popu7 lation group.

8 ‘‘(iii) FMAP.—The old Federal medi9 cal assistance percentage (as defined in

10 section 1512(d)) for the State and fiscal

11 year.

12 ‘‘(B) LESS-THAN-ANTICIPATED NUMBER

13 OF INDIVIDUALS.—In this paragraph, the ‘less14 than-anticipated number of individuals’, for a

15 State for a fiscal year with respect to a supple16 mental allotment population group, is equal to

17 the amount (if any) by which—

18 ‘‘(i) the anticipated number of such

19 individuals (as determined under para20 graph (3)(B)) for the State and fiscal year

21 in such group, exceeds

22 ‘‘(ii) the number of full-year equiva23 lent individuals in the population group for

24 the State and fiscal year.
785

•S 1956 PCS

1 ‘‘(7) SPECIAL RULE FOR FISCAL YEAR 1997.—

2 In applying this subsection to fiscal year 1997—

3 ‘‘(A) in determining the excess number of

4 individuals under paragraph (3)—

5 ‘‘(i) the number of full-year equivalent

6 individuals shall only be determined based

7 on the portion of fiscal year 1997 in which

8 the State plan is in effect under this title,

9 and

10 ‘‘(ii) the anticipated number of such

11 individuals (referred to in paragraph

12 (3)(A)(ii)) shall be the anticipated number

13 otherwise determined multiplied by the

14 proportion of fiscal year 1997 in which

15 such State plan will be in effect; and

16 ‘‘(B) if the State plan is effective before

17 April 1, 1997, the amount of the supplemental

18 allotment otherwise determined under this sub19 section shall be multiplied by the ratio of the

20 portion of fiscal year 1997 that occurs on or

21 after April 1, 1997, to the total portion of such

22 fiscal year in which the State plan is in effect.

23 ‘‘SEC. 1512. PAYMENTS TO STATES.

24 ‘‘(a) AMOUNT OF PAYMENT.—From the allotment of

25 a State under section 1511 for a fiscal year, subject to
786

•S 1956 PCS

1 the succeeding provisions of this title, the Secretary shall

2 pay to each State which has a State plan approved under

3 part C, for each quarter in the fiscal year—

4 ‘‘(1) an amount equal to the applicable Federal

5 medical assistance percentage (as defined in sub6 section (c)) of the total amount expended during

7 such quarter as medical assistance under the plan;

8 plus

9 ‘‘(2) an amount equal to the applicable Federal

10 medical assistance percentage of the total amount

11 expended during such quarter for medically-related

12 services (as defined in section 1571(g)); plus

13 ‘‘(3) subject to section 1513(c)—

14 ‘‘(A) an amount equal to 90 percent of the

15 amounts expended during such quarter for the

16 design, development, and installation of infor17 mation systems and for providing incentives to

18 promote the enforcement of medical support or19 ders, plus

20 ‘‘(B) an amount equal to 75 percent of the

21 amounts expended during such quarter for

22 medical personnel, administrative support of

23 medical personnel, operation and maintenance

24 of information systems, modification of infor25 mation systems, quality assurance activities,
787

•S 1956 PCS

1 utilization review, medical and peer review,

2 anti-fraud activities, independent evaluations,

3 independent, external quality review programs

4 for capitated health care organizations, coordi5 nation of benefits, and meeting reporting re6 quirements under this title, plus

7 ‘‘(C) an amount equal to 50 percent of so

8 much of the remainder of the amounts ex9 pended during such quarter as are expended by

10 the State in the administration of the State

11 plan.

12 ‘‘(b) PAYMENT PROCESS.—

13 ‘‘(1) QUARTERLY ESTIMATES.—Prior to the be14 ginning of each quarter, the Secretary shall estimate

15 the amount to which a State will be entitled under

16 subsection (a) for such quarter, such estimates to

17 be based on (A) a report filed by the State contain18 ing its estimate of the total sum to be expended in

19 such quarter in accordance with the provisions of

20 such subsections, and stating the amount appro21 priated or made available by the State and its politi22 cal subdivisions for such expenditures in such quar23 ter, and if such amount is less than the State’s pro24 portionate share of the total sum of such estimated

25 expenditures, the source or sources from which the
788

•S 1956 PCS

1 difference is expected to be derived, and (B) such

2 other investigation as the Secretary may find nec3 essary.

4 ‘‘(2) PAYMENT.—

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

6 then pay to the State, in such installments as

7 the Secretary may determine and in accordance

8 with section 6503(a) of title 31, United States

9 Code, the amount so estimated, reduced or in10 creased to the extent of any overpayment or

11 underpayment which the Secretary determines

12 was made under this section (or section 1903)

13 to such State for any prior quarter and with re14 spect to which adjustment has not already been

15 made under this subsection (or under section

16 1903(d)).

17 ‘‘(B) TREATMENT AS OVERPAYMENTS.—

18 Expenditures for which payments were made to

19 the State under subsection (a) shall be treated

20 as an overpayment to the extent that the State

21 or local agency administering such plan has

22 been reimbursed for such expenditures by a

23 third party pursuant to the provisions of its

24 plan in compliance with section 1555.
789

•S 1956 PCS

1 ‘‘(C) RECOVERY OF OVERPAYMENTS.—For

2 purposes of this subsection, when an overpay3 ment is discovered, which was made by a State

4 to a person or other entity, the State shall have

5 a period of 60 days in which to recover or at6 tempt to recover such overpayment before ad7 justment is made in the Federal payment to

8 such State on account of such overpayment.

9 Except as otherwise provided in subparagraph

10 (D), the adjustment in the Federal payment

11 shall be made at the end of the 60 days, wheth12 er or not recovery was made.

13 ‘‘(D) NO ADJUSTMENT FOR

14 UNCOLLECTABLES.—In any case where the

15 State is unable to recover a debt which rep16 resents an overpayment (or any portion thereof)

17 made to a person or other entity on account of

18 such debt having been discharged in bankruptcy

19 or otherwise being uncollectable, no adjustment

20 shall be made in the Federal payment to such

21 State on account of such overpayment (or por22 tion thereof).

23 ‘‘(3) FEDERAL SHARE OF RECOVERIES.—The

24 pro rata share to which the United States is equi25 tably entitled, as determined by the Secretary, of the
790

•S 1956 PCS

1 net amount recovered during any quarter by the

2 State or any political subdivision thereof with re3 spect to medical assistance furnished under the

4 State plan shall be considered an overpayment to be

5 adjusted under this subsection.

6 ‘‘(4) TIMING OF OBLIGATION OF FUNDS.—

7 Upon the making of any estimate by the Secretary

8 under this subsection, any appropriations available

9 for payments under this section shall be deemed ob10 ligated.

11 ‘‘(5) DISALLOWANCES.—In any case in which

12 the Secretary estimates that there has been an over13 payment under this section to a State on the basis

14 of a claim by such State that has been disallowed by

15 the Secretary under section 1116(d) or in the case

16 described in paragraph (6)(C), and such State dis17 putes such disallowance or an adjustment under

18 such paragraph, the amount of the Federal payment

19 in controversy shall, at the option of the State, be

20 retained by such State or recovered by the Secretary

21 pending a final determination with respect to such

22 payment amount. If such final determination is to

23 the effect that any amount was properly disallowed,

24 and the State chose to retain payment of the

25 amount in controversy, the Secretary shall offset,
791

•S 1956 PCS

1 from any subsequent payments made to such State

2 under this title, an amount equal to the proper

3 amount of the disallowance plus interest on such

4 amount disallowed for the period beginning on the

5 date such amount was disallowed and ending on the

6 date of such final determination at a rate (deter7 mined by the Secretary) based on the average of the

8 bond equivalent of the weekly 90-day treasury bill

9 auction rates during such period.

10 ‘‘(6) ADJUSTMENTS IN PAYMENTS REFLECTING

11 OVER- AND UNDER-ESTIMATIONS OF SUPPLEMENTAL

12 UMBRELLA ALLOTMENT.—

13 ‘‘(A) IN GENERAL.—Based on data re14 ported under section 1511(g)(5)(A)(iii) and an15 nual audits provided for under section 1551(a)

16 on the actual excess number of individuals in

17 each population group for a fiscal year, the Sec18 retary shall determine the final amount of the

19 supplemental umbrella allotment for each State

20 for the fiscal year and whether, based on such

21 final amount, the amount of payment made for

22 the fiscal year was greater, or less, than the

23 amount that should have been paid if payments

24 had been made based on such final amount.
792

•S 1956 PCS

1 ‘‘(B) PAYMENT IN CASE OF UNDERESTI2 MATION.—If the Secretary determines under

3 subparagraph (A) there was an underpayment

4 to a State, the Secretary shall increase the

5 amount of the next quarterly payment under

6 this section to the State by the amount of such

7 underpayment.

8 ‘‘(C) OFFSETTING OF PAYMENTS IN CASE

9 OF OVERESTIMATION.—If the Secretary deter10 mines under subparagraph (A) there was an

11 overpayment to a State, the Secretary shall,

12 subject to the procedures provided under para13 graph (5), decrease the amount of the payment

14 for the next quarter (or, at the discretion of the

15 Secretary, over a period of not more than 4 cal16 endar quarters) by the amount of such overpay17 ment. In the case in which a State seeks review

18 of such a determination in accordance with the

19 procedures under paragraph (5), the Secretary

20 shall provide for completion of such review

21 process within 1 year after the date the State

22 requests such review.

23 ‘‘(c) APPLICABLE FEDERAL MEDICAL ASSISTANCE

24 PERCENTAGE DEFINED.—In this section, except as pro25 vided in subsection (f), the term ‘applicable Federal medi-
793

•S 1956 PCS

1 cal assistance percentage’ means, with respect to one of

2 the 50 States or the District of Columbia, at the State’s

3 or District’s option—

4 ‘‘(1) the old Federal medical assistance percent5 age (as determined in subsection (d));

6 ‘‘(2) the lesser of—

7 ‘‘(A) new Federal medical assistance per8 centage (as determined under subsection (e)) or

9 ‘‘(B) the old Federal medical assistance

10 percentage plus 10 percentage points; or

11 ‘‘(3) 60 percent.

12 ‘‘(d) OLD FEDERAL MEDICAL ASSISTANCE PER13 CENTAGE.—

14 ‘‘(1) IN GENERAL.—Except as provided in para15 graph (2) and subsection (f), the term ‘old Federal

16 medical assistance percentage’ for any State is 100

17 percent less the State percentage; and the State per18 centage is that percentage which bears the same

19 ratio to 45 percent as the square of the per capita

20 income of such State bears to the square of the per

21 capita income of the continental United States (in22 cluding Alaska) and Hawaii.

23 ‘‘(2) LIMITATION ON RANGE.—In no case shall

24 the old Federal medical assistance percentage be less

25 than 50 percent or more than 83 percent.
794

•S 1956 PCS

1 ‘‘(3) PROMULGATION.—The old Federal medical

2 assistance percentage for any State shall be deter3 mined and promulgated in accordance with the pro4 visions of section 1101(a)(8)(B).

5 ‘‘(e) NEW FEDERAL MEDICAL ASSISTANCE PER6 CENTAGE DEFINED.—

7 ‘‘(1) IN GENERAL.—

8 ‘‘(A) TERM DEFINED.—Except as provided

9 in paragraph (3) and subsection (f), the term

10 ‘new Federal medical assistance percentage’

11 means, for each of the 50 States and the Dis12 trict of Columbia, 100 percent reduced by the

13 product 0.39 and the ratio of—

14 ‘‘(i)(I) for each of the 50 States, the

15 total taxable resources (TTR) ratio of the

16 State specified in subparagraph (B), or

17 ‘‘(II) for the District of Columbia, the

18 per capita income ratio specified in sub19 paragraph (C),

20 to—

21 ‘‘(ii) the aggregate expenditure need

22 ratio of the State or District, as described

23 in subparagraph (D).

24 ‘‘(B) TOTAL TAXABLE RESOURCES (TTR)

25 RATIO.—For purposes of subparagraph
795

•S 1956 PCS

1 (A)(i)(I), the total taxable resources (TTR)

2 ratio for each of the 50 States is—

3 ‘‘(i) an amount equal to the most re4 cent 3-year average of the total taxable re5 sources (TTR) of the State, as determined

6 by the Secretary of the Treasury, divided

7 by

8 ‘‘(ii) an amount equal to the sum of

9 the 3-year averages determined under

10 clause (i) for each of the 50 States.

11 ‘‘(C) PER CAPITA INCOME RATIO.—For

12 purposes of subparagraph (A)(i)(II), the per

13 capita income ratio of the District of Columbia

14 is—

15 ‘‘(i) an amount equal to the most re16 cent 3-year average of the total personal

17 income of the District of Columbia, as de18 termined in accordance with the provisions

19 of section 1101(a)(8)(B), divided by

20 ‘‘(ii) an amount equal to the total per21 sonal income of the continental United

22 States (including Alaska) and Hawaii, as

23 determined under section 1101(a)(8)(B).

24 ‘‘(D) AGGREGATE EXPENDITURE NEED

25 RATIO.—For purposes of subparagraph (A),
796

•S 1956 PCS

1 with respect to each of the 50 States and the

2 District of Columbia for a fiscal year, the ag3 gregate expenditure need ratio is—

4 ‘‘(i) the State aggregate expenditure

5 need (as defined in section 1511(d)) for

6 the State for the fiscal year, divided by

7 ‘‘(ii) the sum of such State aggregate

8 expenditure needs for the 50 States and

9 the District of Columbia for the fiscal year.

10 ‘‘(2) LIMITATION ON RANGE.—Except as pro11 vided in subsection (f), the new Federal medical as12 sistance percentage shall in no case be less than 60

13 percent or greater than 83 percent.

14 ‘‘(3) PROMULGATION.—The new Federal medi15 cal assistance percentage for any State shall be pro16 mulgated in a timely manner consistent with the

17 promulgation of the old Federal medical assistance

18 percentage under section 1101(a)(8)(B).

19 ‘‘(f) SPECIAL RULES.—For purposes of this title—

20 ‘‘(1) COMMONWEALTHS AND TERRITORIES.—In

21 the case of Puerto Rico, the Virgin Islands, Guam,

22 the Northern Mariana Islands, and American

23 Samoa, the old and new Federal medical assistance

24 percentages are 50 percent.
797

•S 1956 PCS

1 ‘‘(2) ALASKA.—In the case of Alaska, the old

2 Federal medical assistance percentage is that per3 centage which bears the same ratio to 45 percent as

4 the square of the adjusted per capita income of such

5 State bears to the square of the per capita income

6 of the continental United States. For purposes of

7 the preceding sentence, the adjusted per capita in8 come for Alaska shall be determined by dividing the

9 State’s most recent 3-year average per capita by the

10 health care cost index for such State (as determined

11 under section 1511(d)(3)).

12 ‘‘(3) INDIAN HEALTH SERVICE AND RELATED

13 FACILITIES AND PROGRAMS.—

14 ‘‘(A) FISCAL YEAR 1997.—

15 ‘‘(i) IN GENERAL.—During fiscal year

16 1997, the Secretary shall reimburse a

17 State for amounts expended under the

18 State plan as medical assistance for serv19 ices which are received through an Indian

20 Health Service facility whether operated by

21 the Indian Health Service or by an Indian

22 tribe or tribal organization (as defined in

23 section 4 of the Indian Health Care Im24 provement Act) in the same manner and

25 under the same Federal medical assistance
798

•S 1956 PCS

1 percentage as such amounts were reim2 bursed under title XIX (as in effect on

3 June 1, 1996).

4 ‘‘(ii) ELIGIBLE PROVIDERS UNDER A

5 STATE PLAN.—A program described in

6 subclause (II) or (III) of clause (iii) shall

7 be an eligible provider under the State

8 plan of the State in which such program is

9 located and may receive reimbursement

10 under the State plan for medical assistance

11 for services provided by such program.

12 ‘‘(iii) RULE OF CONSTRUCTION.—

13 Nothing in clause (i) or (ii) shall be con14 strued as increasing the obligation or out15 lay allotment established for a State under

16 section 1511 for fiscal year 1997.

17 ‘‘(B) FISCAL YEAR 1998 AND THERE18 AFTER.—Beginning on October 1, 1997, the

19 following shall apply:

20 ‘‘(i) PROVIDERS UNDER A STATE

21 PLAN.—

22 ‘‘(I) IN GENERAL.—Subject to

23 the succeeding provisions of this para24 graph, a facility or program described

25 in clause (iii) shall be an eligible pro-
799

•S 1956 PCS

1 vider under the State plan of the

2 State in which such facility or pro3 gram is located and shall receive pay4 ments under the State plan for medi5 cal assistance for services provided at

6 such facility or by such program.

7 ‘‘(II) ELECTION OF PROVIDER

8 REIMBURSEMENT RATE.—A facility or

9 program described in clause (iii) shall

10 elect one of the following provider re11 imbursement rates to apply to medical

12 assistance provided by such facility or

13 through such program under the

14 State plan:

15 ‘‘(aa) The provider reim16 bursement rate established under

17 the State plan of the State in

18 which such facility or program is

19 located.

20 ‘‘(bb) The provider reim21 bursement rate established by the

22 Secretary for such facilities or

23 programs.

24 ‘‘(ii) FEDERAL INDIAN MEDICAID AL25 LOCATION.—
800

•S 1956 PCS

1 ‘‘(I) APPROPRIATION.—Out of

2 any money in the Treasury of the

3 United States not otherwise appro4 priated, there are appropriated for fis5 cal years 1998 through 2002,

6 $2,401,000,000 for reimbursement of

7 amounts expended as medical assist8 ance for services provided by a facility

9 or program described in clause (iii).

10 ‘‘(II) REIMBURSEMENT TO

11 STATES.—Subject to the limitation for

12 a fiscal year described in subclause

13 (III), the Secretary shall reimburse a

14 State with one or more facilities or

15 programs described in clause (iii) for

16 payments made under the State plan

17 for medical assistance provided by

18 such facilities or through such pro19 grams.

20 ‘‘(III) LIMITATION ON REIM21 BURSEMENT.—Subject to subclause

22 (IV), the total amount paid with re23 spect to the amounts expended as

24 medical assistance for services pro25 vided by facilities or programs de-
801

•S 1956 PCS

1 scribed in clause (iii) shall not exceed

2 the following:

3 ‘‘(aa) For fiscal year 1998,

4 $393,100,000.

5 ‘‘(bb) For fiscal year 1999,

6 $459,200,000.

7 ‘‘(cc) For fiscal year 2000,

8 $486,300,000.

9 ‘‘(dd) For fiscal year 2001,

10 $515,500,000.

11 ‘‘(ee) For fiscal year 2002,

12 $546,900,000.

13 ‘‘(IV) CARRYOVER PERMITTED.—

14 The limitation described in subclause

15 (II) for a fiscal year shall be increased

16 by the amount, if any, of any funds

17 remaining from the limitation de18 scribed in such subclause for the pre19 ceding fiscal year.

20 ‘‘(iii) FMAP.—The old and new Fed21 eral medical assistance percentages shall

22 be 100 percent with respect to the

23 amounts expended as medical assistance

24 for services provided by—
802

•S 1956 PCS

1 ‘‘(I) an Indian Health Service fa2 cility;

3 ‘‘(II) an Indian health program

4 operated by an Indian tribe or tribal

5 organization (as defined in section 4

6 of the Indian Health Care Improve7 ment Act) pursuant to a contract,

8 grant, cooperative agreement, or com9 pact with the Indian Health Service

10 under the Indian Self-Determination

11 Act; or

12 ‘‘(III) an urban Indian health

13 program operated by an urban Indian

14 organization pursuant to a grant or

15 contract with the Indian Health Serv16 ice under title V of the Indian Health

17 Care Improvement Act.

18 ‘‘(iv) NO COST-SHARING.—Notwith19 standing the provisions of section 1503 or

20 any other provision of this title, no State

21 plan shall impose any cost-sharing, as de22 fined in section 1503(g), on any individual

23 who is an Indian for services provided to

24 such an individual by a facility or program

25 described in clause (iii).
803

•S 1956 PCS

1 ‘‘(v) AGREEMENTS BETWEEN STATES

2 AND INDIAN TRIBES.—A State and an In3 dian tribe may enter into an agreement for

4 the provision of medical services that are

5 not inconsistent with the provisions of this

6 paragraph.

7 ‘‘(C) INDIAN AND INDIAN TRIBE DE8 FINED.—For purposes of this title, the terms

9 ‘Indian’ and ‘Indian tribe’ have the meaning

10 given such terms in section 4 of the Indian

11 Self-Determination and Education Assistance

12 Act (25 U.S.C. 450b(d)).

13 ‘‘(D) STUDY.—The Comptroller General

14 shall study the impact of the amendment to the

15 Social Security Act made by section 2923 of the

16 Medicaid Restructuring Act of 1996 on the pro17 vision of health care to Indians and, beginning

18 October 1, 1996, and every third fiscal year

19 thereafter, shall submit a report to the Con20 gress containing the findings and recommenda21 tions resulting from such study.

22 ‘‘(4) NO STATE MATCHING REQUIRED FOR CER23 TAIN EXPENDITURES.—In applying subsection (a)(1)

24 with respect to medical assistance provided to unlaw25 ful aliens pursuant to the exception specified in sec-
804

•S 1956 PCS

1 tion 1513(f)(2), payment shall be made for the

2 amount of such assistance without regard to any

3 need for a State match.

4 ‘‘(5) SPECIAL TRANSITIONAL RULE.—

5 ‘‘(A) IN GENERAL.—Notwithstanding sub6 sections (a) and (f), in order to receive the full

7 State outlay allotment described in section

8 1511(c)(3)(C)(i), a State described in subpara9 graph (C) shall expend State funds in a fiscal

10 year (before fiscal year 2000) under a State

11 plan under this title in an amount not less than

12 the adjusted base year State expenditures, plus

13 the applicable percentage of the difference be14 tween such expenditures and the amount nec15 essary to qualify for the full State outlay allot16 ment so described in such fiscal year as deter17 mined under this section without regard to this

18 paragraph.

19 ‘‘(B) REDUCTION IN ALLOTMENT IF EX20 PENDITURE NOT MET.—In the event a State

21 described in subparagraph (C) fails to expend

22 State funds in an amount required by subpara23 graph (A) for a fiscal year, the outlay allotment

24 described in section 1511(c)(3)(C)(i) for such

25 year for such State shall be reduced by an
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•S 1956 PCS

1 amount which bears the same ratio to such out2 lay allotment as the State funds expended in

3 such fiscal year bears to the amount required

4 by subparagraph (A).

5 ‘‘(C) ADJUSTED BASE YEAR STATE EX6 PENDITURES.—For purposes of this paragraph,

7 the term ‘adjusted base year State expendi8 tures’ means, for Louisiana, $355,000,000.

9 ‘‘(D) APPLICABLE PERCENTAGE.—For

10 purposes of this paragraph, the applicable per11 centage for a fiscal year is specified in the fol12 lowing table:

Applicable

‘‘Fiscal year: Percentage:

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

1997 ......................................................................................... 40

1998 ......................................................................................... 60

1999 ......................................................................................... 80.

13 ‘‘(6) TREATMENT OF EXPENDITURES ATTRIB14 UTABLE TO UMBRELLA FUND.—The ‘applicable Fed15 eral medical assistance percentage’ with respect to

16 amounts attributable to supplemental amounts de17 scribed in section 1511(g), is the old Federal medi18 cal assistance percentage.

19 ‘‘(g) USE OF LOCAL FUNDS.—

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

21 State may use local funds to meet the non-Federal

22 share of the expenditures under the State plan with
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•S 1956 PCS

1 respect to which payments may be made under this

2 section.

3 ‘‘(2) LIMITATION.—For any fiscal year local

4 funds may not exceed 40 percent of the total of the

5 non-Federal share of such expenditures for the fiscal

6 year.

7 ‘‘(h) PERMITTING INTER-GOVERNMENTAL FUNDS

8 TRANSFERS.—

9 ‘‘(1) IN GENERAL.—Public funds, as defined in

10 paragraph (2), may be considered as the State’s

11 share in determining State financial participation

12 under this title.

13 ‘‘(2) PUBLIC FUNDS DEFINED.—For purposes

14 of this subsection, the term ‘public funds’ means

15 funds—

16 ‘‘(A) that are—

17 ‘‘(i) appropriated directly to the State

18 or to the local agency administering the

19 State plan under this title, or transferred

20 from other public agencies (including In21 dian tribes) to the State or local agency

22 and under its administrative control, or

23 ‘‘(ii) certified by the contributing pub24 lic agency as representing expenditures eli-
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•S 1956 PCS

1 gible for Federal financial participation

2 under this title; and

3 ‘‘(B) that—

4 ‘‘(i) are not Federal funds, or

5 ‘‘(ii) are Federal funds authorized by

6 Federal law to be used to match other

7 Federal funds.

8 ‘‘(i) APPLICATION OF PROVIDER TAX AND DONATION

9 RESTRICTIONS.—The provisions of section 1903(w) (as in

10 effect on June 1, 1996) shall apply under this title in the

11 same manner as they applied under title XIX (as of such

12 date).

13 ‘‘SEC. 1513. LIMITATION ON USE OF FUNDS; DISALLOW14 ANCE.

15 ‘‘(a) IN GENERAL.—Funds provided to a State under

16 this title shall only be used to carry out the purposes of

17 this title.

18 ‘‘(b) DISALLOWANCES FOR EXCLUDED PROVID19 ERS.—

20 ‘‘(1) IN GENERAL.—Payment shall not be made

21 to a State under this part for expenditures for items

22 and services furnished—

23 ‘‘(A) by a provider who was excluded from

24 participation under title V, XVIII, or XX or
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•S 1956 PCS

1 under this title pursuant to section 1128,

2 1128A, 1156, or 1842(j)(2), or

3 ‘‘(B) under the medical direction or on the

4 prescription of a physician who was so excluded,

5 if the provider of the services knew or had rea6 son to know of the exclusion.

7 ‘‘(2) EXCEPTION FOR EMERGENCY SERVICES.—

8 Subparagraph (A) shall not apply to emergency

9 items or services, not including hospital emergency

10 room services.

11 ‘‘(c) LIMITATIONS ON PAYMENTS FOR MEDICALLY12 RELATED SERVICES AND ADMINISTRATIVE EXPENSES.—

13 ‘‘(1) IN GENERAL.—No Federal financial assist14 ance is available for expenditures under the State

15 plan for—

16 ‘‘(A) medically-related services for a quar17 ter to the extent such expenditures exceed 5

18 percent of the total expenditures under the plan

19 for the quarter, or

20 ‘‘(B) total administrative expenses (other

21 than expenses described in paragraph (2) dur22 ing the first 8 quarters in which the plan is in

23 effect under this title) for quarters in a fiscal

24 year to the extent such expenditures exceed the
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1 sum of $20,000,000 plus 10 percent of the total

2 expenditures under the plan for the year.

3 ‘‘(2) ADMINISTRATIVE EXPENSES NOT SUBJECT

4 TO LIMITATION.—The administrative expenses re5 ferred to in this paragraph are expenditures under

6 the State plan for the following activities:

7 ‘‘(A) Quality assurance.

8 ‘‘(B) The development and operation of the

9 certification program for nursing facilities and

10 intermediate care facilities for the mentally re11 tarded under section 1557.

12 ‘‘(C) Utilization review activities, including

13 medical activities and activities of peer review

14 organizations.

15 ‘‘(D) Inspection and oversight of providers

16 and capitated health care organizations.

17 ‘‘(E) Anti-fraud activities.

18 ‘‘(F) Independent evaluations.

19 ‘‘(G) Activities required to meet reporting

20 requirements under this title.

21 ‘‘(d) TREATMENT OF THIRD PARTY LIABILITY.—No

22 payment shall be made to a State under this part for ex23 penditures for medical assistance provided for an individ24 ual under its State plan to the extent that a private in25 surer (as defined by the Secretary by regulation and in-
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•S 1956 PCS

1 cluding a group health plan (as defined in section 607(1)

2 of the Employee Retirement Income Security Act of

3 1974), a service benefit plan, and a health maintenance

4 organization) would have been obligated to provide such

5 assistance but for a provision of its insurance contract

6 which has the effect of limiting or excluding such obliga7 tion because the individual is eligible for or is provided

8 medical assistance under the plan.

9 ‘‘(e) SECONDARY PAYER PROVISIONS.—Except as

10 otherwise provided by law, no payment shall be made to

11 a State under this part for expenditures for medical assist12 ance provided for an individual under its State plan to

13 the extent that payment has been made or can reasonably

14 be expected to be made promptly (as determined in accord15 ance with regulations) under any other federally operated

16 or financed health care insurance program, other than an

17 insurance program operated or financed by the Indian

18 Health Service, as identified by the Secretary. For pur19 poses of this subsection, rules similar to the rules for over20 payments under section 1512(b) shall apply.

21 ‘‘(f) LIMITATION ON PAYMENTS FOR SERVICES TO

22 NONLAWFUL ALIENS.—

23 ‘‘(1) IN GENERAL.—Notwithstanding the pre24 ceding provisions of this section, except as provided

25 in paragraph (2), no payment may be made to a
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1 State under this part for medical assistance fur2 nished to an alien who is not lawfully admitted for

3 permanent residence or otherwise permanently resid4 ing in the United States under color of law.

5 ‘‘(2) EXCEPTION.—Payment may be made

6 under this section for care and services that are fur7 nished to an alien described in paragraph (1) only

8 if—

9 ‘‘(A) such care and services are necessary

10 for the treatment of an emergency medical con11 dition of the alien (or, at the option of the

12 State, for prenatal care),

13 ‘‘(B) such alien otherwise meets the eligi14 bility requirements for medical assistance under

15 the State plan (other than a requirement of the

16 receipt of aid or assistance under title IV, sup17 plemental security income benefits under title

18 XVI, or a State supplementary payment), and

19 ‘‘(C) such care and services are not related

20 to an organ transplant procedure.

21 ‘‘(3) EMERGENCY MEDICAL CONDITION DE22 FINED.—For purposes of this subsection, the term

23 ‘emergency medical condition’ means a medical con24 dition (including emergency labor and delivery)

25 manifesting itself by acute symptoms of sufficient
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•S 1956 PCS

1 severity (including severe pain) such that the ab2 sence of immediate medical attention could reason3 ably be expected to result in—

4 ‘‘(A) placing the patient’s health in serious

5 jeopardy,

6 ‘‘(B) serious impairment to bodily func7 tions, or

8 ‘‘(C) serious dysfunction of any bodily

9 organ or part.

10 ‘‘(g) LIMITATION ON PAYMENT FOR CERTAIN OUT11 PATIENT PRESCRIPTION DRUGS.—

12 ‘‘(1) IN GENERAL.—No payment may be made

13 to a State under this part for medical assistance for

14 covered outpatient drugs (as defined in section

15 1575(i)(2)) of a manufacturer provided under the

16 State plan unless the manufacturer (as defined in

17 section 1575(i)(4)) of the drug—

18 ‘‘(A) has entered into a master rebate

19 agreement with the Secretary under section

20 1575,

21 ‘‘(B) is otherwise complying with the provi22 sions of such section,

23 ‘‘(C) is complying with the provisions of

24 section 8126 of title 38, United States Code, in25 cluding the requirement of entering into a mas-
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•S 1956 PCS

1 ter agreement with the Secretary of Veterans

2 Affairs under such section, and

3 ‘‘(D) subject to paragraph (4), is comply4 ing with the provisions of section 340B of the

5 Public Health Service Act, including the re6 quirement of entering into an agreement with

7 the Secretary under such section.

8 ‘‘(2) CONSTRUCTION.—Nothing in this sub9 section shall be construed as requiring a State to

10 participate in the master rebate agreement under

11 section 1575.

12 ‘‘(3) EFFECT OF SUBSEQUENT AMEND13 MENTS.—For purposes of subparagraphs (C) and

14 (D), in determining whether a manufacturer is in

15 compliance with the requirements of section 8126 of

16 title 38, United States Code, or section 340B of the

17 Public Health Service Act—

18 ‘‘(A) the Secretary shall not take into ac19 count any amendments to such sections that

20 are enacted after the enactment of title VI of

21 the Veterans Health Care Act of 1992, and

22 ‘‘(B) a manufacturer is deemed to meet

23 such requirements if the manufacturer estab24 lishes to the satisfaction of the Secretary that

25 the manufacturer would comply (and has of-
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•S 1956 PCS

1 fered to comply) with the provisions of such

2 sections (as in effect immediately after the en3 actment of the Veterans Health Care Act of

4 1992) and would have entered into an agree5 ment under such section (as such section was in

6 effect at such time), but for a legislative change

7 in such section after the date of the enactment

8 of the Veterans Health Care Act of 1992.

9 ‘‘(4) EFFECT OF ESTABLISHMENT OF ALTER10 NATIVE MECHANISM UNDER PUBLIC HEALTH SERV11 ICE ACT.—If the Secretary does not establish a

12 mechanism to ensure against duplicate discounts or

13 rebates under section 340B(a)(5)(A) of the Public

14 Health Service Act within 12 months of the date of

15 the enactment of such section, the following require16 ments shall apply:

17 ‘‘(A) Each covered entity under such sec18 tion shall inform the State when it is seeking

19 reimbursement from the State plan for medical

20 assistance with respect to a unit of any covered

21 outpatient drug which is subject to an agree22 ment under section 340B(a) of such Act.

23 ‘‘(B) Each such State shall provide a

24 means by which such an entity shall indicate on

25 any drug reimbursement claims form (or for-
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•S 1956 PCS

1 mat, where electronic claims management is

2 used) that a unit of the drug that is the subject

3 of the form is subject to an agreement under

4 section 340B of such Act, and not submit to

5 any manufacturer a claim for a rebate payment

6 with respect to such a drug.

7 ‘‘(h) LIMITATION ON PAYMENT FOR ABORTIONS.—

8 ‘‘(1) IN GENERAL.—Payment shall not be made

9 to a State under this part for any amount expended

10 under the State plan to pay for any abortion or to

11 assist in the purchase, in whole or in part, of health

12 benefit coverage that includes coverage of abortion.

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

14 apply to an abortion—

15 ‘‘(A) if the pregnancy is the result of an

16 act of rape or incest, or

17 ‘‘(B) in the case where a woman suffers

18 from a physical disorder, illness, or injury that

19 would, as certified by a physician, place the

20 woman in danger of death unless an abortion is

21 performed.

22 ‘‘(i) LIMITATION ON PAYMENT FOR ASSISTING

23 DEATHS.—Payment shall not be made to a State under

24 this part for amounts expended under the State plan to

25 pay for, or to assist in the purchase, in whole or in part,
816

•S 1956 PCS

1 of health benefit coverage that includes payment for any

2 drug, biological product, or service which was furnished

3 for the purpose of causing, or assisting in causing, the

4 death, suicide, euthanasia, or mercy killing of a person.

5 ‘‘(j) NO SUPPLANTATION OF STATE HEALTH

6 FUNDS.—A State may not replace State funds expended

7 for the provision of health care services as of the date of

8 June 1, 1996 with Federal funds received under this title.

9 ‘‘PART C—ESTABLISHMENT AND AMENDMENT OF

10 STATE PLANS

11 ‘‘SEC. 1521. DESCRIPTION OF STRATEGIC OBJECTIVES AND

12 PERFORMANCE GOALS.

13 ‘‘(a) DESCRIPTION.—A State plan shall include a de14 scription of the strategic objectives and performance goals

15 the State has established for providing health care services

16 to low-income populations under this title, including a gen17 eral description of the manner in which the plan is de18 signed to meet these objectives and goals.

19 ‘‘(b) CERTAIN OBJECTIVES AND GOALS RE20 QUIRED.—A State plan shall include strategic objectives

21 and performance goals relating to rates of childhood im22 munizations, reductions in infant mortality and morbidity,

23 and standards of care and access to services for children

24 with special health care needs (as defined by the State).
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•S 1956 PCS

1 ‘‘(c) CONSIDERATIONS.—In specifying these objec2 tives and goals the State may consider factors such as the

3 following:

4 ‘‘(1) The State’s priorities with respect to pro5 viding assistance to low-income populations.

6 ‘‘(2) The State’s priorities with respect to the

7 general public health and the health status of indi8 viduals eligible for assistance under the State plan.

9 ‘‘(3) The State’s financial resources, the par10 ticular economic conditions in the State, and relative

11 adequacy of the health care infrastructure in dif12 ferent regions of the State.

13 ‘‘(d) PERFORMANCE MEASURES.—To the extent

14 practicable—

15 ‘‘(1) one or more performance goals shall be es16 tablished by the State for each strategic objective

17 identified in the State plan; and

18 ‘‘(2) the State plan shall describe, how program

19 performance will be—

20 ‘‘(A) measured through objective, inde21 pendently verifiable means, and

22 ‘‘(B) compared against performance goals,

23 in order to determine the State’s performance

24 under this title.

25 ‘‘(e) PERIOD COVERED.—
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•S 1956 PCS

1 ‘‘(1) STRATEGIC OBJECTIVES.—The strategic

2 objectives shall cover a period of not less than 5

3 years and shall be updated and revised at least every

4 3 years.

5 ‘‘(2) PERFORMANCE GOALS.—The performance

6 goals shall be established for dates that are not more

7 than 3 years apart.

8 ‘‘SEC. 1522. ANNUAL REPORTS.

9 ‘‘(a) IN GENERAL.—In the case of a State with a

10 State plan that is in effect for part or all of a fiscal year,

11 no later than March 31 following such fiscal year the State

12 shall prepare and submit to the Secretary and the Con13 gress a report on program activities and performance

14 under this title for such fiscal year.

15 ‘‘(b) CONTENTS.—Each annual report under this sec16 tion for a fiscal year shall include the following:

17 ‘‘(1) EXPENDITURE AND BENEFICIARY SUM18 MARY.—

19 ‘‘(A) INITIAL SUMMARY.—For the report

20 for fiscal year 1997, a summary of all expendi21 tures under the State plan during the fiscal

22 year as follows:

23 ‘‘(i) Aggregate medical assistance ex24 penditures, disaggregated to the extent re25 quired to determine compliance with the
819

•S 1956 PCS

1 set-aside requirements of subsections (c)

2 and (e) of section 1502, and to determine

3 the program need of the State under sec4 tion 1511(d)(2).

5 ‘‘(ii) For each general category of eli6 gible individuals (specified in subsection

7 (c)(1)), aggregate medical assistance ex8 penditures and the total and average num9 ber of eligible individuals under the State

10 plan.

11 ‘‘(iii) By each general category of eli12 gible individuals, total expenditures for

13 each of the categories of health care items

14 and services (specified in subsection (c)(2))

15 which are covered under the State plan

16 and provided on a fee-for-service basis.

17 ‘‘(iv) By each general category of eli18 gible individuals, total expenditures for

19 payments to capitated health care organi20 zations (as defined in section 1504(d)(1)).

21 ‘‘(v) Total administrative expendi22 tures.

23 ‘‘(B) SUBSEQUENT SUMMARIES.—For re24 ports for each succeeding fiscal year, a sum25 mary of—
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1 ‘‘(i) all expenditures under the State

2 plan, and

3 ‘‘(ii) the total and average number of

4 eligible individuals under the State plan for

5 each general category of eligible individ6 uals.

7 ‘‘(2) UTILIZATION SUMMARY.—

8 ‘‘(A) INITIAL SUMMARY.—For the report

9 for fiscal year 1997, summary statistics on the

10 utilization of health care services under the

11 State plan during the year as follows:

12 ‘‘(i) For each general category of eli13 gible individuals and for each of the cat14 egories of health care items and services

15 which are covered under the State plan

16 and provided on a fee-for-service basis, the

17 number and percentage of persons who re18 ceived such a type of service or item dur19 ing the period covered by the report.

20 ‘‘(ii) Summary of health care utiliza21 tion data reported to the State by

22 capitated health care organizations.

23 ‘‘(B) SUBSEQUENT SUMMARIES.—For re24 ports for each succeeding fiscal year, summary
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1 statistics on the utilization of health care serv2 ices under the State plan.

3 ‘‘(3) ACHIEVEMENT OF PERFORMANCE

4 GOALS.—With respect to each performance goal es5 tablished under section 1521 and applicable to the

6 year involved—

7 ‘‘(A) a brief description of the goal;

8 ‘‘(B) a description of the methods to be

9 used to measure the attainment of such goal;

10 ‘‘(C) data on the actual performance with

11 respect to the goal;

12 ‘‘(D) a review of the extent to which the

13 goal was achieved, based on such data; and

14 ‘‘(E) if a performance goal has not been

15 met—

16 ‘‘(i) why the goal was not met, and

17 ‘‘(ii) actions to be taken in response

18 to such performance, including adjust19 ments in performance goals or program ac20 tivities for subsequent years.

21 ‘‘(4) PROGRAM EVALUATIONS.—A summary of

22 the findings of evaluations under section 1523 com23 pleted during the fiscal year covered by the report.

24 ‘‘(5) FRAUD AND ABUSE AND QUALITY CON25 TROL ACTIVITIES.—A general description of the
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1 State’s activities under part D to detect and deter

2 fraud and abuse and to assure quality of services

3 provided under the program.

4 ‘‘(6) PLAN ADMINISTRATION.—

5 ‘‘(A) A description of the administrative

6 roles and responsibilities of entities in the State

7 responsible for administration of this title.

8 ‘‘(B) Organizational charts for each entity

9 in the State primarily responsible for activities

10 under this title.

11 ‘‘(C) A brief description of each interstate

12 compact (if any) the State has entered into

13 with other States with respect to activities

14 under this title.

15 ‘‘(D) General citations to the State stat16 utes and administrative rules governing the

17 State’s activities under this title.

18 ‘‘(c) DESCRIPTION OF CATEGORIES.—In this section:

19 ‘‘(1) GENERAL CATEGORIES OF ELIGIBLE INDI20 VIDUALS.—Each of the following is a general cat21 egory of eligible individuals:

22 ‘‘(A) Pregnant women.

23 ‘‘(B) Children.

24 ‘‘(C) Blind or disabled adults who are not

25 elderly individuals.
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•S 1956 PCS

1 ‘‘(D) Elderly individuals.

2 ‘‘(E) Other adults.

3 ‘‘(2) CATEGORIES OF HEALTH CARE ITEMS AND

4 SERVICES.—The health care items and services de5 scribed in each paragraph of section 1571(a) shall

6 be considered a separate category of health care

7 items and services.

8 ‘‘(d) DEVELOPMENT OF UNIFORM DATA COLLEC9 TION SYSTEM.—The Secretary shall develop a uniform

10 data collection system for the provision of information

11 under this section.

12 ‘‘SEC. 1523. PERIODIC, INDEPENDENT EVALUATIONS.

13 ‘‘(a) IN GENERAL.—During fiscal year 1999 and

14 every third fiscal year thereafter, each State shall provide

15 for an evaluation of the operation of its State plan under

16 this title. Such evaluation shall include an assessment of

17 how successfully the State is implementing the funding re18 quirements imposed under section 1502(e) and the man19 ner in which the State has utilized Federally-qualified

20 health centers and rural health clinics to provide services

21 under the State plan.

22 ‘‘(b) INDEPENDENT.—Each such evaluation with re23 spect to an activity under the State plan shall be con24 ducted by an entity that is neither responsible under State

25 law for the submission of the State plan (or part thereof)
824

•S 1956 PCS

1 nor responsible for administering (or supervising the ad2 ministration of) the activity. If consistent with the pre3 vious sentence, such an entity may be a college or univer4 sity, a State agency, a legislative branch agency in a State,

5 or an independent contractor.

6 ‘‘(c) RESEARCH DESIGN.—Each such evaluation

7 shall be conducted in accordance with a research design

8 that is based on generally accepted models of survey de9 sign and sampling and statistical analysis.

10 ‘‘SEC. 1524. DESCRIPTION OF PROCESS FOR STATE PLAN

11 DEVELOPMENT.

12 ‘‘Each State plan shall include a description of the

13 process under which the plan shall be developed and imple14 mented in the State (consistent with section 1525).

15 ‘‘SEC. 1525. CONSULTATION IN STATE PLAN DEVELOPMENT.

16 ‘‘(a) PUBLIC NOTICE PROCESS.—Before submitting

17 a State plan or a plan amendment described in subsection

18 (c) to the Secretary under part C, a State shall provide—

19 ‘‘(1) public notice respecting the submittal of

20 the proposed plan or amendment, including a gen21 eral description of the plan or amendment,

22 ‘‘(2) a means for the public to inspect or obtain

23 a copy (at reasonable charge) of the proposed plan

24 or amendment,
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•S 1956 PCS

1 ‘‘(3) an opportunity for submittal and consider2 ation of public comments on the proposed plan or

3 amendment, and

4 ‘‘(4) for consultation with one or more advisory

5 committees established and maintained by the State.

6 The previous sentence shall not apply to a revision of a

7 State plan (or revision of an amendment to a plan) made

8 by a State under section 1529(c)(1) or to a plan amend9 ment withdrawal described in section 1529(c)(4).

10 ‘‘(b) CONTENTS OF NOTICE.—A notice under sub11 section (a)(1) for a proposed plan or amendment shall in12 clude a description of—

13 ‘‘(1) the general purpose of the proposed plan

14 or amendment (including applicable effective dates),

15 ‘‘(2) where the public may inspect the proposed

16 plan or amendment,

17 ‘‘(3) how the public may obtain a copy of the

18 proposed plan or amendment and the applicable

19 charge (if any) for the copy, and

20 ‘‘(4) how the public may submit comments on

21 the proposed plan or amendment, including any

22 deadlines applicable to consideration of such com23 ments.

24 ‘‘(c) AMENDMENTS DESCRIBED.—An amendment to

25 a State plan described in this subsection is an amendment
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•S 1956 PCS

1 which makes a material and substantial change in eligi2 bility under the State plan or the benefits provided under

3 the plan or a material or substantial change in the manner

4 in which the State will comply with subsection (b)(1)(H)

5 or (e) of section 1502.

6 ‘‘(d) PUBLICATION.—Notices under this section may

7 be published (as selected by the State) in one or more daily

8 newspapers of general circulation in the State or in any

9 publication used by the State to publish State statutes or

10 rules.

11 ‘‘(e) COMPARABLE PROCESS.—A separate notice, or

12 notices, shall not be required under this section for a State

13 if notice of the State plan or an amendment to the plan

14 will be provided under a process specified in State law that

15 is substantially equivalent to the notice process specified

16 in this section.

17 ‘‘(f) PROVIDER PAYMENT RATES.—Each State shall

18 provide public notice, in accordance with the provisions of

19 this section, of proposed payment rates and the meth20 odologies underlying the establishment of such rates, for

21 all providers (including institutional providers) of services

22 under the State plan under this title. A State shall publish

23 final payment rates, the methodologies underlying the es24 tablishment of such rates, and justifications for such

25 rates. Such justifications may take in account public com-
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•S 1956 PCS

1 ments received by the State (if any) in one or more daily

2 newspapers of general circulation in the State or in any

3 publication used by the State to publish State statutes or

4 rules.

5 ‘‘SEC. 1526. SUBMITTAL AND APPROVAL OF STATE PLANS.

6 ‘‘(a) SUBMITTAL.—As a condition of receiving fund7 ing under part B, each State shall submit to the Secretary

8 a State plan that meets the applicable requirements of this

9 title.

10 ‘‘(b) APPROVAL.—Except as the Secretary may pro11 vide under section 1529 (including subsection (b) relating

12 to noncompliance with required guarantees), a State plan

13 submitted under subsection (a)—

14 ‘‘(1) shall be approved for purposes of this title,

15 and

16 ‘‘(2) shall be effective beginning on a date that

17 is specified in the plan, but in no case earlier than

18 60 days after the date the plan is submitted.

19 ‘‘(c) CONSTRUCTION.—Nothing in this section shall

20 be construed as prohibiting a State from submitting a

21 State plan that includes the coverage and benefits (includ22 ing those provided under a waiver granted under section

23 1115) of its State plan under title XIX (as in effect as

24 of the date of the enactment of the Medicaid Restructur25 ing Act of 1996), so long as such plan complies with the
828

•S 1956 PCS

1 applicable requirements of this title, including the guaran2 tees under section 1501, and remains subject to the fund3 ing provisions of section 1511.

4 ‘‘SEC. 1527. SUBMITTAL AND APPROVAL OF PLAN AMEND5 MENTS.

6 ‘‘(a) SUBMITTAL OF AMENDMENTS.—A State may

7 amend, in whole or in part, its State plan at any time

8 through transmittal of a plan amendment under this sec9 tion.

10 ‘‘(b) APPROVAL.—Except as the Secretary may pro11 vide under section 1529 (including subsection (b) relating

12 to noncompliance with required guarantees), an amend13 ment to a State plan submitted under subsection (a)—

14 ‘‘(1) shall be approved for purposes of this title,

15 and

16 ‘‘(2) shall be effective as provided in subsection

17 (c).

18 ‘‘(c) EFFECTIVE DATES FOR AMENDMENTS.—

19 ‘‘(1) IN GENERAL.—Subject to the succeeding

20 provisions of this subsection, an amendment to a

21 State plan shall take effect on one or more effective

22 dates specified in the amendment.

23 ‘‘(2) AMENDMENTS RELATING TO ELIGIBILITY

24 OR BENEFITS.—Except as provided in paragraph

25 (4)—
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•S 1956 PCS

1 ‘‘(A) NOTICE REQUIREMENT.—Any plan

2 amendment that eliminates or restricts eligi3 bility or benefits under the plan may not take

4 effect unless the State certifies that it has pro5 vided prior or contemporaneous public notice of

6 the change, in a form and manner provided

7 under applicable State law.

8 ‘‘(B) TIMELY TRANSMITTAL.—Any plan

9 amendment that eliminates or restricts eligi10 bility or benefits under the plan shall not be ef11 fective for longer than a 60-day period unless

12 the amendment has been transmitted to the

13 Secretary before the end of such period.

14 ‘‘(3) OTHER AMENDMENTS.—Subject to para15 graph (4), any plan amendment that is not described

16 in paragraph (2) becomes effective in a State fiscal

17 year may not remain in effect after the end of such

18 fiscal year (or, if later, the end of the 90-day period

19 on which it becomes effective) unless the amendment

20 has been transmitted to the Secretary.

21 ‘‘(4) EXCEPTION.—The requirements of para22 graphs (2) and (3) shall not apply to a plan amend23 ment that is submitted on a timely basis pursuant

24 to a court order or an order of the Secretary.
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•S 1956 PCS

1 ‘‘SEC. 1528. PROCESS FOR STATE WITHDRAWAL FROM PRO2 GRAM.

3 ‘‘(a) IN GENERAL.—A State may rescind its State

4 plan and discontinue participation in the program under

5 this title at any time after providing—

6 ‘‘(1) the public with 90 days prior notice in a

7 publication in one or more daily newspapers of gen8 eral circulation in the State or in any publication

9 used by the State to publish State statutes or rules,

10 and

11 ‘‘(2) the Secretary with 90 days prior written

12 notice.

13 ‘‘(b) EFFECTIVE DATE.—Such discontinuation shall

14 not apply to payments under part B for expenditures

15 made for items and services furnished under the State

16 plan before the effective date of the discontinuation.

17 ‘‘(c) PRORATION OF ALLOTMENTS.—In the case of

18 any withdrawal under this section other than at the end

19 of a Federal fiscal year, notwithstanding any provision of

20 section 1511 to the contrary, the Secretary shall provide

21 for such appropriate proration of the application of allot22 ments under section 1511 as is appropriate.

23 ‘‘SEC. 1529. SANCTIONS FOR NONCOMPLIANCE.

24 ‘‘(a) PROMPT REVIEW OF PLAN SUBMITTALS.—The

25 Secretary shall promptly review State plans and plan

26 amendments submitted under this part to determine if
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1 they substantially comply with the requirements of this

2 title.

3 ‘‘(b) DETERMINATIONS OF NONCOMPLIANCE WITH

4 CERTAIN GUARANTEES.—

5 ‘‘(1) AT TIME OF PLAN OR AMENDMENT SUB6 MITTAL.—If the Secretary determines that a State

7 plan or plan amendment submitted under this part

8 violates the guarantees of coverage and benefits

9 under subsections (a) and (b) of section 1501, the

10 Secretary shall notify the State in writing of such

11 determination and shall issue an order specifying

12 that the plan or amendment, insofar as it is in viola13 tion with such requirement, shall not be effective,

14 except as provided in subsection (d), as of the date

15 specified in the order.

16 ‘‘(2) VIOLATIONS IN ADMINISTRATION OF

17 PLAN.—If the Secretary determines, after reasonable

18 notice and opportunity for a hearing for the State,

19 that in the administration of a State plan there is

20 a violation of guarantee of coverage and benefits

21 under subsection (a) or (b) of section 1501, or of the

22 funding requirements under section 1502(e), the

23 Secretary shall provide the State with written notice

24 of the determination and with an order to remedy

25 such violation. Such an order shall become effective
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•S 1956 PCS

1 prospectively, as specified in the order, after the

2 date of receipt of such written notice. Such an order

3 may include the withholding of funds, consistent

4 with subsection (g), for parts of the State plan af5 fected by such violation, until the Secretary is satis6 fied that the violation has been corrected.

7 ‘‘(3) CONSULTATION WITH STATE.—Before

8 making a determination adverse to a State under

9 this section, the Secretary shall—

10 ‘‘(A) reasonably consult with the State in11 volved,

12 ‘‘(B) offer the State a reasonable oppor13 tunity to clarify the submission and submit fur14 ther information to substantiate compliance

15 with the requirements of subsections (a) and

16 (b) of section 1501 and of section 1502(e), and

17 ‘‘(C) reasonably consider any such clari18 fications and information submitted.

19 ‘‘(4) JUSTIFICATION OF ANY INCONSISTENCIES

20 IN DETERMINATIONS.—If the Secretary makes a de21 termination under this section that is, in whole or in

22 part, inconsistent with any previous determination

23 issued by the Secretary under this title, the Sec24 retary shall include in the determination a detailed

25 explanation and justification for any such difference.
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1 ‘‘(c) DETERMINATIONS OF OTHER SUBSTANTIAL

2 NONCOMPLIANCE.—

3 ‘‘(1) AT TIME OF PLAN OR AMENDMENT SUB4 MITTAL.—

5 ‘‘(A) IN GENERAL.—If the Secretary, dur6 ing the 30-day period beginning on the date of

7 submittal of a State plan or plan amendment—

8 ‘‘(i) determines that the plan or

9 amendment substantially violates (within

10 the meaning of paragraph (5)) a require11 ment of this title, and

12 ‘‘(ii) provides written notice of such

13 determination to the State,

14 the Secretary shall issue an order specifying

15 that the plan or amendment, insofar as it is in

16 substantial violation of such a requirement,

17 shall not be effective, except as provided in sub18 section (d), beginning at the end of a period of

19 not less than 30 days (or 120 days in the case

20 of the initial submission of the State plan) spec21 ified in the order beginning on the date of the

22 notice of the determination.

23 ‘‘(B) EXTENSION OF TIME PERIODS.—The

24 time periods specified in subparagraph (A) may
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1 be extended by written agreement of the Sec2 retary and the State involved.

3 ‘‘(2) VIOLATIONS IN ADMINISTRATION OF

4 PLAN.—

5 ‘‘(A) IN GENERAL.—If the Secretary deter6 mines, after reasonable notice and opportunity

7 for a hearing for the State, that in the adminis8 tration of a State plan there is a substantial

9 violation of a requirement of this title, the Sec10 retary shall provide the State with written no11 tice of the determination and with an order to

12 remedy such violation. Such an order shall be13 come effective prospectively, as specified in the

14 order, after the date of receipt of such written

15 notice. Such an order may include the withhold16 ing of funds, consistent with subsection (g), for

17 parts of the State plan affected by such viola18 tion, until the Secretary is satisfied that the

19 violation has been corrected.

20 ‘‘(B) EFFECTIVENESS.—If the Secretary

21 issues an order under paragraph (1), the order

22 shall become effective, except as provided in

23 subsection (d), beginning at the end of a period

24 (of not less than 30 days) specified in the order
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1 beginning on the date of the notice of the deter2 mination to the State.

3 ‘‘(C) TIMELINESS OF DETERMINATIONS

4 RELATING TO REPORT-BASED COMPLIANCE.—

5 The Secretary shall make determinations under

6 this paragraph respecting violations relating to

7 information contained in an annual report

8 under section 1522, an independent evaluation

9 under section 1523, or an audit report under

10 section 1551 not later than 30 days after the

11 date of transmittal of the report or evaluation

12 to the Secretary.

13 ‘‘(3) CONSULTATION WITH STATE.—Before

14 making a determination adverse to a State under

15 this section, the Secretary shall (within any time pe16 riods provided under this section)—

17 ‘‘(A) reasonably consult with the State in18 volved,

19 ‘‘(B) offer the State a reasonable oppor20 tunity to clarify the submission and submit fur21 ther information to substantiate compliance

22 with the requirements of this title, and

23 ‘‘(C) reasonably consider any such clari24 fications and information submitted.
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1 ‘‘(4) JUSTIFICATION OF ANY INCONSISTENCIES

2 IN DETERMINATIONS.—If the Secretary makes a de3 termination under this section that is, in whole or in

4 part, inconsistent with any previous determination

5 issued by the Secretary under this title, the Sec6 retary shall include in the determination a detailed

7 explanation and justification for any such difference.

8 ‘‘(5) SUBSTANTIAL VIOLATION DEFINED.—For

9 purposes of this title, a State plan (or amendment

10 to such a plan) or the administration of the State

11 plan is considered to ‘substantially violate’ a require12 ment of this title if a provision of the plan or

13 amendment (or an omission from the plan or amend14 ment) or the administration of the plan—

15 ‘‘(A) is material and substantial in nature

16 and effect, and

17 ‘‘(B) is inconsistent with an express re18 quirement of this title.

19 A failure to meet a strategic objective or perform20 ance goal (as described in section 1521) shall not be

21 considered to substantially violate a requirement of

22 this title.

23 ‘‘(6) RELATION TO OTHER PROVISION.—This

24 subsection shall not apply to violation of a require-
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1 ment of subsection (a) or (b) of section 1501 or of

2 section 1502(e).

3 ‘‘(d) STATE RESPONSE TO ORDERS.—

4 ‘‘(1) STATE RESPONSE BY REVISING PLAN.—

5 ‘‘(A) IN GENERAL.—Insofar as an order

6 under subsection (b)(1) or (c)(1) relates to a

7 violation by a State plan or plan amendment, a

8 State may respond (before the date the order

9 becomes effective) to such an order by submit10 ting a written revision of the State plan or plan

11 amendment to comply with the requirements of

12 this title.

13 ‘‘(B) REVIEW OF REVISION.—In the case

14 of submission of such a revision, the Secretary

15 shall promptly review the submission and shall,

16 in the case of an order under subsection (c)(1),

17 withhold any action on the order during the pe18 riod of such review.

19 ‘‘(C) SECRETARIAL RESPONSE.—

20 ‘‘(i) ORDERS RELATING TO GUARAN21 TEES.—In the case of a revision submitted

22 in response to an order under subsection

23 (b)(1), the revision shall not be considered

24 to have corrected the deficiency unless the

25 Secretary determines and notifies the State
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1 that the State plan or amendment, as pro2 posed to be revised, complies with the re3 quirements of subsections (a) and (b) of

4 section 1501, or of section 1502(e) (as the

5 case may be). If the Secretary determines

6 that the revision does not correct the defi7 ciency, the Secretary shall notify the State

8 in writing of such determination and the

9 State may respond by seeking reconsider10 ation or a hearing under paragraph (2).

11 ‘‘(ii) OTHER ORDERS.—In the case of

12 a revision submitted in response to an

13 order under subsection (c)(1), the revision

14 shall be considered to have corrected the

15 deficiency (and the order rescinded insofar

16 as it relates to such deficiency) unless the

17 Secretary determines and notifies the State

18 in writing, within 15 days after the date

19 the Secretary receives the revision, that the

20 State plan or amendment, as proposed to

21 be revised, still substantially violates a re22 quirement of this title. In such case the

23 State may respond by seeking reconsider24 ation or a hearing under paragraph (2).
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1 ‘‘(D) REVISION RETROACTIVE.—If the re2 vision provides for compliance (in the case of an

3 order under subsection (b)(1)) or substantial

4 compliance (in the case of an order under sub5 section (c)(1)), the revision may be treated, at

6 the option of the State, as being effective either

7 as of the effective date of the provision to which

8 it relates or such later date as the State and

9 Secretary may agree.

10 ‘‘(2) STATE RESPONSE BY SEEKING RECONSID11 ERATION OR AN ADMINISTRATIVE HEARING.—A

12 State may respond to an order under subsection (b)

13 or (c) by filing a request with the Secretary for—

14 ‘‘(A) a reconsideration of the determina15 tion, pursuant to subsection (e)(1), or

16 ‘‘(B) a review of the determination through

17 an administrative hearing, pursuant to sub18 section (e)(2).

19 In such case for an order under subsection (c), the

20 order shall not take effect before the completion of

21 the reconsideration or hearing.

22 ‘‘(3) STATE RESPONSE BY CORRECTIVE ACTION

23 PLAN.—

24 ‘‘(A) IN GENERAL.—In the case of an

25 order described in subsection (b)(2) or (c)(2)
840

•S 1956 PCS

1 that relates to a violation in the administration

2 of the State plan, a State may respond to such

3 an order by submitting a corrective action plan

4 with the Secretary to correct deficiencies in the

5 administration of the plan which are the subject

6 of the order.

7 ‘‘(B) REVIEW OF CORRECTIVE ACTION

8 PLAN.—In the case of a corrective action plan

9 submitted in response to an order under sub10 section (c)(2), the Secretary shall withhold any

11 action on the order for a period (not to exceed

12 30 days) during which the Secretary reviews

13 the corrective action plan.

14 ‘‘(C) SECRETARIAL RESPONSE.—

15 ‘‘(i) ORDERS RELATING TO GUARAN16 TEES.—In the case of a corrective action

17 plan submitted in response to an order

18 under subsection (b)(2), the plan shall not

19 be considered to have corrected the defi20 ciency unless the Secretary determines and

21 notifies the State that the State’s adminis22 tration of the State plan, as proposed to be

23 corrected in the plan, will not violate a re24 quirement of subsection (a) or (b) of sec25 tion 1501, or of section 1502(e) (as the
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•S 1956 PCS

1 case may be). If the Secretary determines

2 that the plan does not correct the defi3 ciency, the Secretary shall notify the State

4 in writing of such determination and the

5 State may respond by seeking reconsider6 ation or a hearing under paragraph (2).

7 ‘‘(ii) OTHER ORDERS.—In the case of

8 a corrective action plan submitted in re9 sponse to an order under subsection (c)(2),

10 the corrective action plan shall be consid11 ered to have corrected the deficiency (and

12 the order rescinded insofar as it relates to

13 such deficiency) unless the Secretary deter14 mines and notifies the State in writing,

15 within 15 days after the date the Secretary

16 receives the corrective action plan, that the

17 State’s administration of the State plan, as

18 proposed to be corrected in the plan, will

19 still substantially violate a requirement of

20 this title. In such case the State may re21 spond by seeking reconsideration or a

22 hearing under paragraph (2).

23 ‘‘(4) STATE RESPONSE BY WITHDRAWAL OF

24 PLAN AMENDMENT; FAILURE TO RESPOND.—Insofar

25 as an order relates to a violation in a plan amend-
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•S 1956 PCS

1 ment submitted, a State may respond to such an

2 order by withdrawing the plan amendment and the

3 State plan shall be treated as though the amend4 ment had not been made.

5 ‘‘(e) ADMINISTRATIVE REVIEW AND HEARING.—

6 ‘‘(1) RECONSIDERATION.—Within 30 days after

7 the date of receipt of a request under subsection

8 (d)(2)(A), the Secretary shall notify the State of the

9 time and place at which a hearing will be held for

10 the purpose of reconsidering the Secretary’s deter11 mination. The hearing shall be held not less than 20

12 days nor more than 60 days after the date notice of

13 the hearing is furnished to the State, unless the Sec14 retary and the State agree in writing to holding the

15 hearing at another time. The Secretary shall affirm,

16 modify, or reverse the original determination within

17 60 days of the conclusion of the hearing.

18 ‘‘(2) ADMINISTRATIVE HEARING.—Within 30

19 days after the date of receipt of a request under

20 subsection (d)(2)(B), an administrative law judge

21 shall schedule a hearing for the purpose of reviewing

22 the Secretary’s determination. The hearing shall be

23 held not less than 20 days nor more than 60 days

24 after the date notice of the hearing is furnished to

25 the State, unless the Secretary and the State agree
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•S 1956 PCS

1 in writing to holding the hearing at another time.

2 The administrative law judge shall affirm, modify, or

3 reverse the determination within 60 days of the con4 clusion of the hearing.

5 ‘‘(f) JUDICIAL REVIEW.—

6 ‘‘(1) IN GENERAL.—A State which is dissatis7 fied with a final determination made by the Sec8 retary under subsection (e)(1) or a final determina9 tion of an administrative law judge under subsection

10 (e)(2) may, within 60 days after it has been notified

11 of such determination, file with the United States

12 court of appeals for the circuit in which the State

13 is located a petition for review of such determina14 tion. A copy of the petition shall be forthwith trans15 mitted by the clerk of the court to the Secretary

16 and, in the case of a determination under subsection

17 (e)(2), to the administrative law judge involved. The

18 Secretary (or judge involved) thereupon shall file in

19 the court the record of the proceedings on which the

20 final determination was based, as provided in section

21 1502 of title 28, United States Code. Except as pro22 vided in section 1508, only the Secretary, in accord23 ance with this title, may compel a State under Fed24 eral law to comply with the provisions of this title

25 or a State plan, or otherwise enforce a provision of
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1 this title against a State, and no action may be filed

2 under Federal law against a State in relation to the

3 State’s compliance, or failure to comply, with the

4 provisions of this title or of a State plan except

5 under section 1508 or by the Secretary as provided

6 under this subsection.

7 ‘‘(2) STANDARD FOR REVIEW.—The findings of

8 fact by the Secretary or administrative law judge, if

9 supported by substantial evidence, shall be conclu10 sive, but the court, for good cause shown, may re11 mand the case to the Secretary or judge to take fur12 ther evidence, and the Secretary or judge may there13 upon make new or modified findings of fact and may

14 modify a previous determination, and shall certify to

15 the court the transcript and record of the further

16 proceedings. Such new or modified findings of fact

17 shall likewise be conclusive if supported by substan18 tial evidence.

19 ‘‘(3) JURISDICTION OF APPELLATE COURT.—

20 The court shall have jurisdiction to affirm the action

21 of the Secretary or judge or to set it aside, in whole

22 or in part. The judgment of the court shall be sub23 ject to review by the Supreme Court of the United

24 States upon certiorari or certification as provided in

25 section 1254 of title 28, United States Code.
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1 ‘‘(g) WITHHOLDING OF FUNDS.—

2 ‘‘(1) IN GENERAL.—Any order under this sec3 tion relating to the withholding of funds shall be ef4 fective not earlier than the effective date of the

5 order and shall only relate to the portions of a State

6 plan or administration thereof which violate a re7 quirement of subsection (a) or (b) of section 1501,

8 section 1502(e), or substantially violate another re9 quirement of this title. In the case of a failure to

10 meet a set-aside requirement under subsection (c) or

11 (e) of section 1502, any withholding shall only apply

12 to the extent of such failure.

13 ‘‘(2) SUSPENSION OF WITHHOLDING.—The Sec14 retary may suspend withholding of funds under

15 paragraph (1) during the period reconsideration or

16 administrative and judicial review is pending under

17 subsection (e) or (f).

18 ‘‘(3) RESTORATION OF FUNDS.—Any funds

19 withheld under this subsection under an order shall

20 be immediately restored to a State—

21 ‘‘(A) to the extent and at the time the

22 order is—

23 ‘‘(i) modified or withdrawn by the

24 Secretary upon reconsideration,
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1 ‘‘(ii) modified or reversed by an ad2 ministrative law judge, or

3 ‘‘(iii) set aside (in whole or in part) by

4 an appellate court; or

5 ‘‘(B) when the Secretary determines that

6 the deficiency which was the basis for the order

7 is corrected;

8 ‘‘(C) when the Secretary determines that

9 violation which was the basis for the order is

10 resolved or the amendment which was the basis

11 for the order is withdrawn; or

12 ‘‘(D) at any time upon the initiative of the

13 Secretary.

14 ‘‘(4) DIRECT PAYMENT OF CERTAIN FUNDS

15 WITHHELD.—In the case of an order to withhold

16 funds for failure to meet a set-aside requirement im17 posed under section 1502(e), the Secretary shall,

18 during the period such order is in effect, pay directly

19 to rural health clinics and federally-qualified health

20 centers located in the State an amount equal to the

21 amount that should have been paid to such clinics

22 and centers by the State under section 1502(e).

23 ‘‘(h) INDIVIDUAL COMPLAINT PROCESS.—The Sec24 retary shall provide for a process under which an individ25 ual may notify the Secretary concerning a State’s failure
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1 to provide medical assistance as required under the State

2 plan or otherwise comply with the requirements of this

3 title or such plan, including any failure to comply with

4 a requirement of subsection (a) or (b) of section 1501.

5 If the Secretary finds that there is a pattern of complaints

6 with respect to a State or that a particular failure or find7 ing of noncompliance is egregious, the Secretary shall no8 tify the chief executive officer of the State of such finding

9 and shall notify the Congress if the State fails to respond

10 to such notification within a reasonable period of time.

11 ‘‘SEC. 1530. SECRETARIAL AUTHORITY.

12 ‘‘(a) NEGOTIATED AGREEMENT AND DISPUTE RESO13 LUTION.—

14 ‘‘(1) NEGOTIATIONS.—Nothing in this part

15 shall be construed as preventing the Secretary and

16 a State from at any time negotiating a satisfactory

17 resolution to any dispute concerning the approval of

18 a State plan (or amendments to a State plan) or the

19 compliance of a State plan (including its administra20 tion) with requirements of this title.

21 ‘‘(2) COOPERATION.—The Secretary shall act in

22 a cooperative manner with the States in carrying out

23 this title. In the event of a dispute between a State

24 and the Secretary, the Secretary shall, whenever

25 practicable, engage in informal dispute resolution ac-
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1 tivities in lieu of formal enforcement or sanctions

2 under section 1529.

3 ‘‘(b) LIMITATIONS ON DELEGATION OF DECISION4 MAKING AUTHORITY.—The Secretary may not delegate

5 (other than to the Administrator of the Health Care Fi6 nancing Administration) the authority to make determina7 tions or reconsiderations respecting the approval of State

8 plans (or amendments to such plans) or the compliance

9 of a State plan (including its administration) with require10 ments of this title. Such Administrator may not further

11 delegate such authority to any individual, including any

12 regional official of such Administration.

13 ‘‘(c) REQUIRING FORMAL RULEMAKING FOR

14 CHANGES IN SECRETARIAL ADMINISTRATION.—The Sec15 retary shall carry out the administration of the program

16 under this title only through a prospective formal rule17 making process, including issuing notices of proposed rule18 making, publishing proposed rules or modifications to

19 rules in the Federal Register, and soliciting public com20 ment.

21 ‘‘PART D—PROGRAM INTEGRITY AND QUALITY

22 ‘‘SEC. 1551. USE OF AUDITS TO ACHIEVE FISCAL INTEGRITY.

23 ‘‘(a) FINANCIAL AUDITS OF PROGRAM.—

24 ‘‘(1) IN GENERAL.—Each State plan shall pro25 vide for an annual audit of the State’s expenditures
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1 from amounts received under this title, in compli2 ance with chapter 75 of title 31, United States

3 Code.

4 ‘‘(2) VERIFICATION AUDITS.—If, after consulta5 tion with the State and the Comptroller General and

6 after a fair hearing, the Secretary determines that

7 a State’s audit under paragraph (1) was performed

8 in substantial violation of chapter 75 of title 31,

9 United States Code, the Secretary may—

10 ‘‘(A) require that the State provide for a

11 verification audit in compliance with such chap12 ter, or

13 ‘‘(B) conduct such a verification audit.

14 ‘‘(3) AVAILABILITY OF AUDIT REPORTS.—With15 in 30 days after completion of each audit or verifica16 tion audit under this subsection, the State shall—

17 ‘‘(A) provide the Secretary with a copy of

18 the audit report, including the State’s response

19 to any recommendations of the auditor, and

20 ‘‘(B) make the audit report available for

21 public inspection in the same manner as pro22 posed State plan amendments are made avail23 able under section 1525.

24 ‘‘(b) FISCAL CONTROLS.—
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1 ‘‘(1) IN GENERAL.—With respect to the ac2 counting and expenditure of funds under this title,

3 each State shall adopt and maintain such fiscal con4 trols, accounting procedures, and data processing

5 safeguards as the State deems reasonably necessary

6 to assure the fiscal integrity of the State’s activities

7 under this title.

8 ‘‘(2) CONSISTENCY WITH GENERALLY ACCEPT9 ED ACCOUNTING PRINCIPLES.—Such controls and

10 procedures shall be generally consistent with gen11 erally accepted accounting principles as recognized

12 by the Governmental Accounting Standards Board

13 or the Comptroller General.

14 ‘‘(c) AUDITS OF PROVIDERS.—Each State plan shall

15 provide that the records of any entity providing items or

16 services for which payment may be made under the plan

17 may be audited as necessary to ensure that proper pay18 ments are made under the plan.

19 ‘‘SEC. 1552. FRAUD PREVENTION PROGRAM.

20 ‘‘(a) ESTABLISHMENT.—Each State plan shall pro21 vide for the establishment and maintenance of an effective

22 program for the detection and prevention of fraud and

23 abuse by beneficiaries, providers, and others in connection

24 with the operation of the program.
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1 ‘‘(b) PROGRAM REQUIREMENTS.—The program es2 tablished pursuant to subsection (a) shall include at least

3 the following requirements:

4 ‘‘(1) DISCLOSURE OF INFORMATION.—Any dis5 closing entity (as defined in section 1124(a)) receiv6 ing payments under the State plan shall comply with

7 the requirements of section 1124.

8 ‘‘(2) SUPPLY OF INFORMATION.—An entity

9 (other than an individual practitioner or a group of

10 practitioners) that furnishes, or arranges for the fur11 nishing of, an item or service under the State plan

12 shall supply upon request specifically addressed to

13 the entity by the Secretary or the State agency the

14 information described in section 1128(b)(9).

15 ‘‘(3) EXCLUSION.—

16 ‘‘(A) IN GENERAL.—The State plan shall

17 exclude any specified individual or entity from

18 participation in the plan for the period specified

19 by the Secretary when required by the Sec20 retary to do so pursuant to section 1128 or sec21 tion 1128A, and provide that no payment may

22 be made under the plan with respect to any

23 item or service furnished by such individual or

24 entity during such period.
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1 ‘‘(B) AUTHORITY.—In addition to any

2 other authority, a State may exclude any indi3 vidual or entity for purposes of participating

4 under the State plan for any reason for which

5 the Secretary could exclude the individual or

6 entity from participation in a program under

7 title XVIII or under section 1128, 1128A, or

8 1866(b)(2).

9 ‘‘(4) NOTICE.—The State plan shall provide

10 that whenever a provider of services or any other

11 person is terminated, suspended, or otherwise sanc12 tioned or prohibited from participating under the

13 plan, the State agency responsible for administering

14 the plan shall promptly notify the Secretary and, in

15 the case of a physician, the State medical licensing

16 board of such action.

17 ‘‘(5) ACCESS TO INFORMATION.—The State

18 plan shall provide that the State will provide infor19 mation and access to certain information respecting

20 sanctions taken against health care practitioners and

21 providers by State licensing authorities in accord22 ance with section 1553.
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1 ‘‘SEC. 1553. INFORMATION CONCERNING SANCTIONS TAKEN

2 BY STATE LICENSING AUTHORITIES AGAINST

3 HEALTH CARE PRACTITIONERS AND PROVID4 ERS.

5 ‘‘(a) INFORMATION REPORTING REQUIREMENT.—

6 The requirement referred to in section 1552(b)(5) is that

7 the State must provide for the following:

8 ‘‘(1) INFORMATION REPORTING SYSTEM.—The

9 State must have in effect a system of reporting the

10 following information with respect to formal proceed11 ings (as defined by the Secretary in regulations)

12 concluded against a health care practitioner or entity

13 by any authority of the State (or of a political sub14 division thereof) responsible for the licensing of

15 health care practitioners (or any peer review organi16 zation or private accreditation entity reviewing the

17 services provided by health care practitioners) or en18 tities:

19 ‘‘(A) Any adverse action taken by such li20 censing authority as a result of the proceeding,

21 including any revocation or suspension of a li22 cense (and the length of any such suspension),

23 reprimand, censure, or probation.

24 ‘‘(B) Any dismissal or closure of the pro25 ceedings by reason of the practitioner or entity
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1 surrendering the license or leaving the State or

2 jurisdiction.

3 ‘‘(C) Any other loss of the license of the

4 practitioner or entity, whether by operation of

5 law, voluntary surrender, or otherwise.

6 ‘‘(D) Any negative action or finding by

7 such authority, organization, or entity regard8 ing the practitioner or entity.

9 ‘‘(2) ACCESS TO DOCUMENTS.—The State must

10 provide the Secretary (or an entity designated by the

11 Secretary) with access to such documents of the au12 thority described in paragraph (1) as may be nec13 essary for the Secretary to determine the facts and

14 circumstances concerning the actions and determina15 tions described in such paragraph for the purpose

16 of carrying out this Act.

17 ‘‘(b) FORM OF INFORMATION.—The information de18 scribed in subsection (a)(1) shall be provided to the Sec19 retary (or to an appropriate private or public agency,

20 under suitable arrangements made by the Secretary with

21 respect to receipt, storage, protection of confidentiality,

22 and dissemination of information) in such a form and

23 manner as the Secretary determines to be appropriate in

24 order to provide for activities of the Secretary under this
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1 Act and in order to provide, directly or through suitable

2 arrangements made by the Secretary, information—

3 ‘‘(1) to agencies administering Federal health

4 care programs, including private entities administer5 ing such programs under contract,

6 ‘‘(2) to licensing authorities described in sub7 section (a)(1),

8 ‘‘(3) to State agencies administering or super9 vising the administration of State health care pro10 grams (as defined in section 1128(h)),

11 ‘‘(4) to utilization and quality control peer re12 view organizations described in part B of title XI

13 and to appropriate entities with contracts under sec14 tion 1154(a)(4)(C) with respect to eligible organiza15 tions reviewed under the contracts,

16 ‘‘(5) to State fraud control units (as defined in

17 section 1534),

18 ‘‘(6) to hospitals and other health care entities

19 (as defined in section 431 of the Health Care Qual20 ity Improvement Act of 1986), with respect to physi21 cians or other licensed health care practitioners that

22 have entered (or may be entering) into an employ23 ment or affiliation relationship with, or have applied

24 for clinical privileges or appointments to the medical

25 staff of, such hospitals or other health care entities
856

•S 1956 PCS

1 (and such information shall be deemed to be dis2 closed pursuant to section 427 of, and be subject to

3 the provisions of, that Act),

4 ‘‘(7) to the Attorney General and such other

5 law enforcement officials as the Secretary deems ap6 propriate, and

7 ‘‘(8) upon request, to the Comptroller General,

8 in order for such authorities to determine the fitness

9 of individuals to provide health care services, to pro10 tect the health and safety of individuals receiving

11 health care through such programs, and to protect

12 the fiscal integrity of such programs.

13 ‘‘(c) CONFIDENTIALITY OF INFORMATION PRO14 VIDED.—The Secretary shall provide for suitable safe15 guards for the confidentiality of the information furnished

16 under subsection (a). Nothing in this subsection shall pre17 vent the disclosure of such information by a party which

18 is otherwise authorized, under applicable State law, to

19 make such disclosure.

20 ‘‘(d) APPROPRIATE COORDINATION.—The Secretary

21 shall provide for the maximum appropriate coordination

22 in the implementation of subsection (a) of this section and

23 section 422 of the Health Care Quality Improvement Act

24 of 1986 and section 1128E.
857

•S 1956 PCS

1 ‘‘SEC. 1554. STATE FRAUD CONTROL UNITS.

2 ‘‘(a) IN GENERAL.—Each State plan shall provide for

3 a State fraud control unit described in subsection (b) that

4 effectively carries out the functions and requirements de5 scribed in such subsection, unless the State demonstrates

6 to the satisfaction of the Secretary that the effective oper7 ation of such a unit in the State would not be cost-effective

8 because minimal fraud exists in connection with the provi9 sion of covered services to eligible individuals under the

10 plan, and that beneficiaries under the plan will be pro11 tected from abuse and neglect in connection with the pro12 vision of medical assistance under the plan without the

13 existence of such a unit.

14 ‘‘(b) UNITS DESCRIBED.—For purposes of this sec15 tion, the term ‘State fraud control unit’ means a single

16 identifiable entity of the State government which meets

17 the following requirements:

18 ‘‘(1) ORGANIZATION.—The entity—

19 ‘‘(A) is a unit of the office of the State At20 torney General or of another department of

21 State government which possesses statewide au22 thority to prosecute individuals for criminal vio23 lations;

24 ‘‘(B) is in a State the constitution of which

25 does not provide for the criminal prosecution of
858

•S 1956 PCS

1 individuals by a statewide authority and has

2 formal procedures that—

3 ‘‘(i) assure its referral of suspected

4 criminal violations relating to the program

5 under this title to the appropriate author6 ity or authorities in the State for prosecu7 tion, and

8 ‘‘(ii) assure its assistance of, and co9 ordination with, such authority or authori10 ties in such prosecutions; or

11 ‘‘(C) has a formal working relationship

12 with the office of the State Attorney General

13 and has formal procedures (including proce14 dures for its referral of suspected criminal vio15 lations to such office) which provide effective

16 coordination of activities between the entity and

17 such office with respect to the detection, inves18 tigation, and prosecution of suspected criminal

19 violations relating to the program under this

20 title.

21 ‘‘(2) INDEPENDENCE.—The entity is separate

22 and distinct from any State agency that has prin23 cipal responsibilities for administering or supervising

24 the administration of the State plan.
859

•S 1956 PCS

1 ‘‘(3) FUNCTION.—The entity’s function is con2 ducting a statewide program for the investigation

3 and prosecution of violations of all applicable State

4 laws regarding any and all aspects of fraud in con5 nection with any aspect of the provision of medical

6 assistance and the activities of providers of such as7 sistance under the State plan.

8 ‘‘(4) REVIEW OF COMPLAINTS.—The entity has

9 procedures for reviewing complaints of the abuse

10 and neglect of patients of health care facilities which

11 receive payments under the State plan under this

12 title, and, where appropriate, for acting upon such

13 complaints under the criminal laws of the State or

14 for referring them to other State agencies for action.

15 ‘‘(5) OVERPAYMENTS.—

16 ‘‘(A) IN GENERAL.—The entity provides

17 for the collection, or referral for collection to a

18 single State agency, of overpayments that are

19 made under the State plan to health care pro20 viders and that are discovered by the entity in

21 carrying out its activities.

22 ‘‘(B) TREATMENT OF CERTAIN OVERPAY23 MENTS.—If an overpayment is the direct result

24 of the failure of the provider (or the provider’s

25 billing agent) to adhere to a change in the
860

•S 1956 PCS

1 State’s billing instructions, the entity may re2 cover the overpayment only if the entity dem3 onstrates that the provider (or the provider’s

4 billing agent) received prior written or elec5 tronic notice of the change in the billing in6 structions before the submission of the claims

7 on which the overpayment is based.

8 ‘‘(6) PERSONNEL.—The entity employs such

9 auditors, attorneys, investigators, and other nec10 essary personnel and is organized in such a manner

11 as is necessary to promote the effective and efficient

12 conduct of the entity’s activities.

13 ‘‘SEC. 1555. RECOVERIES FROM THIRD PARTIES AND

14 OTHERS.

15 ‘‘(a) THIRD PARTY LIABILITY.—Each State plan

16 shall provide for reasonable steps—

17 ‘‘(1) to ascertain the legal liability of third par18 ties to pay for care and services available under the

19 plan, including the collection of sufficient informa20 tion to enable States to pursue claims against third

21 parties, and

22 ‘‘(2) to seek reimbursement for medical assist23 ance provided to the extent legal liability is estab24 lished where the amount expected to be recovered

25 exceeds the costs of the recovery.
861

•S 1956 PCS

1 ‘‘(b) BENEFICIARY PROTECTION.—

2 ‘‘(1) IN GENERAL.—Each State plan shall pro3 vide that in the case of a person furnishing services

4 under the plan for which a third party may be liable

5 for payment—

6 ‘‘(A) the person may not seek to collect

7 from the individual (or financially responsible

8 relative) payment of an amount for the service

9 more than could be collected under the plan in

10 the absence of such third party liability, and

11 ‘‘(B) may not refuse to furnish services to

12 such an individual because of a third party’s

13 potential liability for payment for the service.

14 ‘‘(2) PENALTY.—A State plan may provide for

15 a reduction of any payment amount otherwise due

16 with respect to a person who furnishes services

17 under the plan in an amount equal to up to 3 times

18 the amount of any payment sought to be collected by

19 that person in violation of paragraph (1)(A).

20 ‘‘(c) GENERAL LIABILITY.—The State shall prohibit

21 any health insurer, including a group health plan as de22 fined in section 607 of the Employee Retirement Income

23 Security Act of 1974, a service benefit plan, or a health

24 maintenance organization, in enrolling an individual or in

25 making any payments for benefits to the individual or on
862

•S 1956 PCS

1 the individual’s behalf, from taking into account that the

2 individual is eligible for or is provided medical assistance

3 under a State plan for any State.

4 ‘‘(d) ACQUISITION OF RIGHTS OF BENEFICIARIES.—

5 To the extent that payment has been made under a State

6 plan in any case where a third party has a legal liability

7 to make payment for such assistance, the State shall have

8 in effect laws under which, to the extent that payment

9 has been made under the plan for health care items or

10 services furnished to an individual, the State is considered

11 to have acquired the rights of such individual to payment

12 by any other party for such health care items or services.

13 ‘‘(e) ASSIGNMENT OF MEDICAL SUPPORT RIGHTS.—

14 The State plan shall provide for mandatory assignment

15 of rights of payment for medical support and other medi16 cal care owed to recipients in accordance with section

17 1556.

18 ‘‘(f) REQUIRED LAWS RELATING TO MEDICAL CHILD

19 SUPPORT.—

20 ‘‘(1) IN GENERAL.—Each State with a State

21 plan under this title shall have in effect the following

22 laws:

23 ‘‘(A) A law that prohibits an insurer from

24 denying enrollment of a child under the health
863

•S 1956 PCS

1 coverage of the child’s parent on the ground

2 that—

3 ‘‘(i) the child was born out of wedlock,

4 ‘‘(ii) the child is not claimed as a de5 pendent on the parent’s Federal income

6 tax return, or

7 ‘‘(iii) the child does not reside with

8 the parent or in the insurer’s service area.

9 ‘‘(B) In any case in which a parent is re10 quired by a court or administrative order to

11 provide health coverage for a child and the par12 ent is eligible for family health coverage

13 through an insurer, a law that requires such in14 surer—

15 ‘‘(i) to permit such parent to enroll

16 under such family coverage any such child

17 who is otherwise eligible for such coverage

18 (without regard to any enrollment season

19 restrictions);

20 ‘‘(ii) if such a parent is enrolled but

21 fails to make application to obtain cov22 erage of such child, to enroll such child

23 under such family coverage upon applica24 tion by the child’s other parent or by the
864

•S 1956 PCS

1 State agency administering the program

2 under this title or part D of title IV; and

3 ‘‘(iii) not to disenroll, or eliminate

4 coverage of, such a child unless the insurer

5 is provided satisfactory written evidence

6 that—

7 ‘‘(I) such court or administrative

8 order is no longer in effect, or

9 ‘‘(II) the child is or will be en10 rolled in comparable health coverage

11 through another insurer which will

12 take effect not later than the effective

13 date of such disenrollment.

14 ‘‘(C) In any case in which a parent is re15 quired by a court or administrative order to

16 provide health coverage for a child and the par17 ent is eligible for family health coverage

18 through an employer doing business in the

19 State, a law that requires such employer—

20 ‘‘(i) to permit such parent to enroll

21 under such family coverage any such child

22 who is otherwise eligible for such coverage

23 (without regard to any enrollment season

24 restrictions);
865

•S 1956 PCS

1 ‘‘(ii) if such a parent is enrolled but

2 fails to make application to obtain cov3 erage of such child, to enroll such child

4 under such family coverage upon applica5 tion by the child’s other parent or by the

6 State agency administering the program

7 under this title or part D of title IV; and

8 ‘‘(iii) not to disenroll (or eliminate

9 coverage of) any such child unless—

10 ‘‘(I) the employer is provided sat11 isfactory written evidence that such

12 court or administrative order is no

13 longer in effect, or the child is or will

14 be enrolled in comparable health cov15 erage which will take effect not later

16 than the effective date of such

17 disenrollment, or

18 ‘‘(II) the employer has eliminated

19 family health coverage for all of its

20 employees; and

21 ‘‘(iv) to withhold from such employ22 ee’s compensation the employee’s share (if

23 any) of premiums for health coverage (ex24 cept that the amount so withheld may not

25 exceed the maximum amount permitted to
866

•S 1956 PCS

1 be withheld under section 303(b) of the

2 Consumer Credit Protection Act), and to

3 pay such share of premiums to the insurer,

4 except that the Secretary may provide by

5 regulation for appropriate circumstances

6 under which an employer may withhold

7 less than such employee’s share of such

8 premiums.

9 ‘‘(D) A law that prohibits an insurer from

10 imposing requirements on a State agency,

11 which has been assigned the rights of an indi12 vidual eligible for medical assistance under this

13 title and covered for health benefits from the

14 insurer, that are different from requirements

15 applicable to an agent or assignee of any other

16 individual so covered.

17 ‘‘(E) A law that requires an insurer, in

18 any case in which a child has health coverage

19 through the insurer of a noncustodial parent—

20 ‘‘(i) to provide such information to the

21 custodial parent as may be necessary for

22 the child to obtain benefits through such

23 coverage,

24 ‘‘(ii) to permit the custodial parent

25 (or provider, with the custodial parent’s
867

•S 1956 PCS

1 approval) to submit claims for covered

2 services without the approval of the non3 custodial parent, and

4 ‘‘(iii) to make payment on claims sub5 mitted in accordance with clause (ii) di6 rectly to such custodial parent, the pro7 vider, or the State agency.

8 ‘‘(F) A law that permits the State agency

9 under this title to garnish the wages, salary, or

10 other employment income of, and requires with11 holding amounts from State tax refunds to, any

12 person who—

13 ‘‘(i) is required by court or adminis14 trative order to provide coverage of the

15 costs of health services to a child who is el16 igible for medical assistance under this

17 title,

18 ‘‘(ii) has received payment from a

19 third party for the costs of such services to

20 such child, but

21 ‘‘(iii) has not used such payments to

22 reimburse, as appropriate, either the other

23 parent or guardian of such child or the

24 provider of such services,
868

•S 1956 PCS

1 to the extent necessary to reimburse the State

2 agency for expenditures for such costs under its

3 plan under this title, but any claims for current

4 or past-due child support shall take priority

5 over any such claims for the costs of such serv6 ices.

7 ‘‘(2) DEFINITION.—For purposes of this sub8 section, the term ‘insurer’ includes a group health

9 plan, as defined in section 607(1) of the Employee

10 Retirement Income Security Act of 1974, a health

11 maintenance organization, and an entity offering a

12 service benefit plan.

13 ‘‘(g) ESTATE RECOVERIES AND LIENS PER14 MITTED.—

15 ‘‘(1) IN GENERAL.—A State may take such ac16 tions as it considers appropriate to adjust or recover

17 from the individual or the individual’s estate any

18 amounts paid as medical assistance to or on behalf

19 of the individual under the State plan, including

20 through the imposition of liens against the property

21 or estate of the individual to the extent consistent

22 with section 1506.

23 ‘‘(2) NO LIEN ON FAMILY FARMS.—For pur24 poses of paragraph (1), a State may not impose a

25 lien on the family farm owned by the individual that
869

•S 1956 PCS

1 is the principal residence (within the meaning of sec2 tion 1034 of the Internal Revenue Code of 1986) of

3 such individual as a condition of the spouse of the

4 individual receiving nursing facility or other long

5 term care benefits under the State plan.

6 ‘‘(3) NO LIEN ON TRUSTS OF DISABLED INDI7 VIDUALS UNDER AGE 65.—No lien may be imposed

8 against a trust containing the assets of an individual

9 under age 65 who is disabled (as defined in section

10 1614(a)(3)) and which is established for the benefit

11 of such individual by a parent, grandparent, legal

12 guardian of the individual, or a court, if the State

13 will receive all amounts remaining in the trust upon

14 the death of such individual up to an amount equal

15 to the total medical assistance paid on behalf of the

16 individual under a State plan under this title.

17 ‘‘SEC. 1556. ASSIGNMENT OF RIGHTS OF PAYMENT.

18 ‘‘(a) IN GENERAL.—For the purpose of assisting in

19 the collection of medical support payments and other pay20 ments for medical care owed to recipients of medical as21 sistance under the State plan, each State plan shall—

22 ‘‘(1) provide that, as a condition of eligibility

23 for medical assistance under the plan to an individ24 ual who has the legal capacity to execute an assign25 ment for himself, the individual is required—
870

•S 1956 PCS

1 ‘‘(A) to assign the State any rights, of the

2 individual or of any other person who is eligible

3 for medical assistance under the plan and on

4 whose behalf the individual has the legal au5 thority to execute an assignment of such rights,

6 to support (specified as support for the purpose

7 of medical care by a court or administrative

8 order) and to payment for medical care from

9 any third party,

10 ‘‘(B) to cooperate with the State (i) in es11 tablishing the paternity of such person (referred

12 to in subparagraph (A)) if the person is a child

13 born out of wedlock, and (ii) in obtaining sup14 port and payments (described in subparagraph

15 (A)) for himself and for such person, unless (in

16 either case) the individual is a pregnant woman

17 or the individual is found to have good cause

18 for refusing to cooperate as determined by the

19 State, and

20 ‘‘(C) to cooperate with the State in identi21 fying, and providing information to assist the

22 State in pursuing, any third party who may be

23 liable to pay for care and services available

24 under the plan, unless such individual has good
871

•S 1956 PCS

1 cause for refusing to cooperate as determined

2 by the State; and

3 ‘‘(2) provide for entering into cooperative ar4 rangements, including financial arrangements, with

5 any appropriate agency of any State (including, with

6 respect to the enforcement and collection of rights of

7 payment for medical care by or through a parent,

8 with a State’s agency established or designated

9 under section 454(3)) and with appropriate courts

10 and law enforcement officials, to assist the agency

11 or agencies administering the plan with respect to—

12 ‘‘(A) the enforcement and collection of

13 rights to support or payment assigned under

14 this section, and

15 ‘‘(B) any other matters of common con16 cern.

17 ‘‘(b) USE OF AMOUNTS COLLECTED.—Such part of

18 any amount collected by the State under an assignment

19 made under the provisions of this section shall be retained

20 by the State as is necessary to reimburse it for medical

21 assistance payments made on behalf of an individual with

22 respect to whom such assignment was executed (with ap23 propriate reimbursement of the Federal Government to

24 the extent of its participation in the financing of such
872

•S 1956 PCS

1 medical assistance), and the remainder of such amount

2 collected shall be paid to such individual.

3 ‘‘SEC. 1557. QUALITY ASSURANCE REQUIREMENTS FOR

4 NURSING FACILITIES.

5 ‘‘(a) NURSING FACILITY DEFINED.—In this title, the

6 term ‘nursing facility’ means an institution (or a distinct

7 part of an institution) which—

8 ‘‘(1) is primarily engaged in providing to resi9 dents—

10 ‘‘(A) skilled nursing care and related serv11 ices for residents who require medical or nurs12 ing care,

13 ‘‘(B) rehabilitation services for the reha14 bilitation of injured, disabled, or sick persons,

15 or

16 ‘‘(C) on a regular basis, health-related care

17 and services to individuals who because of their

18 mental or physical condition require care and

19 services (above the level of room and board)

20 which can be made available to them only

21 through institutional facilities,

22 and is not primarily for the care and treatment of

23 mental diseases;

24 ‘‘(2) has in effect a transfer agreement (meet25 ing the requirements of section 1861(l)) with one or
873

•S 1956 PCS

1 more hospitals having agreements in effect under

2 section 1866; and

3 ‘‘(3) meets the requirements for a nursing facil4 ity described in subsections (b), (c), and (d) of this

5 section.

6 Such term also includes any facility which is located in

7 a State on an Indian reservation and is certified by the

8 Secretary as meeting the requirements of paragraph (1)

9 and subsections (b), (c), and (d).

10 ‘‘(b) REQUIREMENTS RELATING TO PROVISION OF

11 SERVICES.—

12 ‘‘(1) QUALITY OF LIFE.—

13 ‘‘(A) IN GENERAL.—A nursing facility

14 must care for its residents in such a manner

15 and in such an environment as will promote

16 maintenance or enhancement of the quality of

17 life of each resident.

18 ‘‘(B) QUALITY ASSESSMENT AND ASSUR19 ANCE.—A nursing facility must maintain a

20 quality assessment and assurance committee,

21 consisting of the director of nursing services, a

22 physician designated by the facility, and at least

23 3 other members of the facility’s staff, which (i)

24 meets at least quarterly to identify issues with

25 respect to which quality assessment and assur-
874

•S 1956 PCS

1 ance activities are necessary and (ii) develops

2 and implements appropriate plans of action to

3 correct identified quality deficiencies. A State or

4 the Secretary may not require disclosure of the

5 records of such committee except insofar as

6 such disclosure is related to the compliance of

7 such committee with the requirements of this

8 subparagraph.

9 ‘‘(2) SCOPE OF SERVICES AND ACTIVITIES

10 UNDER PLAN OF CARE.—A nursing facility must

11 provide services and activities to attain or maintain

12 the highest practicable physical, mental, and

13 psychosocial well-being of each resident in accord14 ance with a written plan of care which—

15 ‘‘(A) describes the medical, nursing, and

16 psychosocial needs of the resident and how such

17 needs will be met;

18 ‘‘(B) is initially prepared, with the partici19 pation to the extent practicable of the resident

20 or the resident’s family or legal representative,

21 by a team which includes the resident’s attend22 ing physician and a registered professional

23 nurse with responsibility for the resident; and
875

•S 1956 PCS

1 ‘‘(C) is periodically reviewed and revised by

2 such team after each assessment under para3 graph (3).

4 ‘‘(3) RESIDENTS’ ASSESSMENT.—

5 ‘‘(A) REQUIREMENT.—A nursing facility

6 must conduct a comprehensive, accurate, stand7 ardized, reproducible assessment of each resi8 dent’s functional capacity, which assessment—

9 ‘‘(i) describes the resident’s capability

10 to perform daily life functions and signifi11 cant impairments in functional capacity;

12 ‘‘(ii) is based on a uniform minimum

13 data set specified by the Secretary under

14 subsection (f)(6)(A);

15 ‘‘(iii) uses an instrument which is

16 specified by the State under subsection

17 (e)(5); and

18 ‘‘(iv) includes the identification of

19 medical problems.

20 ‘‘(B) CERTIFICATION.—

21 ‘‘(i) IN GENERAL.—Each such assess22 ment must be conducted or coordinated

23 (with the appropriate participation of

24 health professionals) by a registered pro25 fessional nurse who signs and certifies the
876

•S 1956 PCS

1 completion of the assessment. Each indi2 vidual who completes a portion of such an

3 assessment shall sign and certify as to the

4 accuracy of that portion of the assessment.

5 ‘‘(ii) PENALTY FOR FALSIFICATION.—

6 ‘‘(I) An individual who willfully

7 and knowingly certifies under clause

8 (i) a material and false statement in

9 a resident assessment is subject to a

10 civil money penalty of not more than

11 $1,000 with respect to each assess12 ment.

13 ‘‘(II) An individual who willfully

14 and knowingly causes another individ15 ual to certify under clause (i) a mate16 rial and false statement in a resident

17 assessment is subject to a civil money

18 penalty of not more than $5,000 with

19 respect to each assessment.

20 ‘‘(III) The provisions of section

21 1128A (other than subsections (a)

22 and (b)) shall apply to a civil money

23 penalty under this clause in the same

24 manner as such provisions apply to a
877

•S 1956 PCS

1 penalty or proceeding under section

2 1128A(a).

3 ‘‘(iii) USE OF INDEPENDENT ASSES4 SORS.—If a State determines, under a sur5 vey under subsection (g) or otherwise, that

6 there has been a knowing and willful cer7 tification of false assessments under this

8 paragraph, the State may require (for a

9 period specified by the State) that resident

10 assessments under this paragraph be con11 ducted and certified by individuals who are

12 independent of the facility and who are ap13 proved by the State.

14 ‘‘(C) FREQUENCY.—

15 ‘‘(i) IN GENERAL.—Such an assess16 ment must be conducted—

17 ‘‘(I) promptly upon (but no later

18 than 14 days after the date of) admis19 sion for each individual admitted;

20 ‘‘(II) promptly after a significant

21 change in the resident’s physical or

22 mental condition; and

23 ‘‘(III) in no case less often than

24 once every 12 months.
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•S 1956 PCS

1 ‘‘(ii) RESIDENT REVIEW.—The nurs2 ing facility must examine each resident no

3 less frequently than once every 3 months

4 and, as appropriate, revise the resident’s

5 assessment to assure the continuing accu6 racy of the assessment.

7 ‘‘(D) USE.—The results of such an assess8 ment shall be used in developing, reviewing, and

9 revising the resident’s plan of care under para10 graph (2).

11 ‘‘(E) COORDINATION.—Such assessments

12 shall be coordinated with any State-required

13 preadmission screening program to the maxi14 mum extent practicable in order to avoid dupli15 cative testing and effort. In addition, a nursing

16 facility shall notify the State mental health au17 thority or State mental retardation or devel18 opmental disability authority, as applicable,

19 promptly after a significant change in the phys20 ical or mental condition of a resident who is

21 mentally ill or mentally retarded.

22 ‘‘(4) PROVISION OF SERVICES AND ACTIVI23 TIES.—

24 ‘‘(A) IN GENERAL.—To the extent needed

25 to fulfill all plans of care described in para-
879

•S 1956 PCS

1 graph (2), a nursing facility must provide (or

2 arrange for the provision of)—

3 ‘‘(i) nursing and related services and

4 specialized rehabilitative services to attain

5 or maintain the highest practicable phys6 ical, mental, and psychosocial well-being of

7 each resident;

8 ‘‘(ii) medically-related social services

9 to attain or maintain the highest prac10 ticable physical, mental, and psychosocial

11 well-being of each resident;

12 ‘‘(iii) pharmaceutical services (includ13 ing procedures that assure the accurate ac14 quiring, receiving, dispensing, and admin15 istering of all drugs and biologicals) to

16 meet the needs of each resident;

17 ‘‘(iv) dietary services that assure that

18 the meals meet the daily nutritional and

19 special dietary needs of each resident;

20 ‘‘(v) an on-going program, directed by

21 a qualified professional, of activities de22 signed to meet the interests and the phys23 ical, mental, and psychosocial well-being of

24 each resident;
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•S 1956 PCS

1 ‘‘(vi) routine dental services (to the

2 extent covered under the State plan) and

3 emergency dental services to meet the

4 needs of each resident; and

5 ‘‘(vii) treatment and services required

6 by mentally ill and mentally retarded resi7 dents not otherwise provided or arranged

8 for (or required to be provided or arranged

9 for) by the State.

10 The services provided or arranged by the facil11 ity must meet professional standards of quality.

12 ‘‘(B) QUALIFIED PERSONS PROVIDING

13 SERVICES.—Services described in clauses (i),

14 (ii), (iii), (iv), and (vi) of subparagraph (A)

15 must be provided by qualified persons in ac16 cordance with each resident’s written plan of

17 care.

18 ‘‘(C) REQUIRED NURSING CARE; FACILITY

19 WAIVERS.—

20 ‘‘(i) GENERAL REQUIREMENTS.—A

21 nursing facility—

22 ‘‘(I) except as provided in clause

23 (ii), must provide 24-hour licensed

24 nursing services which are sufficient
881

•S 1956 PCS

1 to meet the nursing needs of its resi2 dents, and

3 ‘‘(II) except as provided in clause

4 (ii), must use the services of a reg5 istered professional nurse for at least

6 8 consecutive hours a day, 7 days a

7 week.

8 ‘‘(ii) WAIVER BY STATE.—To the ex9 tent that a facility is unable to meet the

10 requirements of clause (i), a State may

11 waive such requirements with respect to

12 the facility if—

13 ‘‘(I) the facility demonstrates to

14 the satisfaction of the State that the

15 facility has been unable, despite dili16 gent efforts (including offering wages

17 at the community prevailing rate for

18 nursing facilities), to recruit appro19 priate personnel,

20 ‘‘(II) the State determines that a

21 waiver of the requirement will not en22 danger the health or safety of individ23 uals staying in the facility,

24 ‘‘(III) the State finds that, for

25 any such periods in which licensed
882

•S 1956 PCS

1 nursing services are not available, a

2 registered professional nurse or a phy3 sician is obligated to respond imme4 diately to telephone calls from the fa5 cility,

6 ‘‘(IV) the State agency granting

7 a waiver of such requirements pro8 vides notice of the waiver to the State

9 long-term care ombudsman (estab10 lished under section 307(a)(12) of the

11 Older Americans Act of 1965) and the

12 protection and advocacy system in the

13 State for the mentally ill and the

14 mentally retarded, and

15 ‘‘(V) the nursing facility that is

16 granted such a waiver by a State noti17 fies residents of the facility (or, where

18 appropriate, the guardians or legal

19 representatives of such residents) and

20 members of their immediate families

21 of the waiver.

22 A waiver under this clause shall be subject

23 to annual review and to the review of the

24 Secretary and subject to clause (iii) shall

25 be accepted by the Secretary for purposes
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•S 1956 PCS

1 of this title to the same extent as is the

2 State’s certification of the facility. In

3 granting or renewing a waiver, a State

4 may require the facility to use other quali5 fied, licensed personnel.

6 ‘‘(iii) ASSUMPTION OF WAIVER AU7 THORITY BY SECRETARY.—If the Secretary

8 determines that a State has shown a clear

9 pattern and practice of allowing waivers in

10 the absence of diligent efforts by facilities

11 to meet the staffing requirements, the Sec12 retary shall assume and exercise the au13 thority of the State to grant waivers.

14 ‘‘(5) REQUIRED TRAINING OF NURSE AIDES.—

15 ‘‘(A) IN GENERAL.—(i) Except as provided

16 in clause (ii), a nursing facility must not use on

17 a full-time basis any individual as a nurse aide

18 in the facility, for more than 4 months unless

19 the individual—

20 ‘‘(I) has completed a training and

21 competency evaluation program, or a com22 petency evaluation program, approved by

23 the State under subsection (e)(1)(A), and

24 ‘‘(II) is competent to provide nursing

25 or nursing-related services.
884

•S 1956 PCS

1 ‘‘(ii) A nursing facility must not use on a

2 temporary, per diem, leased, or on any other

3 basis other than as a permanent employee any

4 individual as a nurse aide in the facility, unless

5 the individual meets the requirements described

6 in clause (i).

7 ‘‘(B) OFFERING COMPETENCY EVALUA8 TION PROGRAMS FOR CURRENT EMPLOYEES.—

9 A nursing facility must provide, for individuals

10 used as a nurse aide by the facility, for a com11 petency evaluation program approved by the

12 State under subsection (e)(1) and such prepara13 tion as may be necessary for the individual to

14 complete such a program.

15 ‘‘(C) COMPETENCY.—The nursing facility

16 must not permit an individual, other than in a

17 training and competency evaluation program

18 approved by the State, to serve as a nurse aide

19 or provide services of a type for which the indi20 vidual has not demonstrated competency and

21 must not use such an individual as a nurse aide

22 unless the facility has inquired of any State

23 registry established under subsection (e)(2)(A)

24 that the facility believes will include information

25 concerning the individual.
885

•S 1956 PCS

1 ‘‘(D) RE-TRAINING REQUIRED.—For pur2 poses of subparagraph (A), if, since an individ3 ual’s most recent completion of a training and

4 competency evaluation program, there has been

5 a continuous period of 24 consecutive months

6 during none of which the individual performed

7 nursing or nursing-related services for monetary

8 compensation, such individual shall complete a

9 new training and competency evaluation pro10 gram, or a new competency evaluation program.

11 ‘‘(E) REGULAR IN-SERVICE EDUCATION.—

12 The nursing facility must provide such regular

13 performance review and regular in-service edu14 cation as assures that individuals used as nurse

15 aides are competent to perform services as

16 nurse aides, including training for individuals

17 providing nursing and nursing-related services

18 to residents with cognitive impairments.

19 ‘‘(F) NURSE AIDE DEFINED.—In this

20 paragraph, the term ‘nurse aide’ means any in21 dividual providing nursing or nursing-related

22 services to residents in a nursing facility, but

23 does not include an individual—
886

•S 1956 PCS

1 ‘‘(i) who is a licensed health profes2 sional (as defined in subparagraph (G)) or

3 a registered dietitian, or

4 ‘‘(ii) who volunteers to provide such

5 services without monetary compensation.

6 ‘‘(G) LICENSED HEALTH PROFESSIONAL

7 DEFINED.—In this paragraph, the term ‘li8 censed health professional’ means a physician,

9 physician assistant, nurse practitioner, physical,

10 speech, or occupational therapist, physical or

11 occupational therapy assistant, registered pro12 fessional nurse, licensed practical nurse, or li13 censed or certified social worker.

14 ‘‘(6) PHYSICIAN SUPERVISION AND CLINICAL

15 RECORDS.—A nursing facility must—

16 ‘‘(A) require that the health care of every

17 resident be provided under the supervision of a

18 physician (or, at the option of a State, under

19 the supervision of a nurse practitioner, clinical

20 nurse specialist, or physician assistant who is

21 not an employee of the facility but who is work22 ing in collaboration with a physician);

23 ‘‘(B) provide for having a physician avail24 able to furnish necessary medical care in case

25 of emergency; and
887

•S 1956 PCS

1 ‘‘(C) maintain clinical records on all resi2 dents, which records include the plans of care

3 (described in paragraph (2)) and the residents’

4 assessments (described in paragraph (3)), as

5 well as the results of any pre-admission screen6 ing conducted under subsection (e)(7).

7 ‘‘(7) REQUIRED SOCIAL SERVICES.—In the case

8 of a nursing facility with more than 120 beds, the

9 facility must have at least one social worker (with at

10 least a bachelor’s degree in social work or similar

11 professional qualifications) employed full-time to

12 provide or assure the provision of social services.

13 ‘‘(c) REQUIREMENTS RELATING TO RESIDENTS’

14 RIGHTS.—

15 ‘‘(1) GENERAL RIGHTS.—

16 ‘‘(A) SPECIFIED RIGHTS.—A nursing facil17 ity must protect and promote the rights of each

18 resident, including each of the following rights:

19 ‘‘(i) FREE CHOICE.—The right to

20 choose a personal attending physician, to

21 be fully informed in advance about care

22 and treatment, to be fully informed in ad23 vance of any changes in care or treatment

24 that may affect the resident’s well-being,

25 and (except with respect to a resident ad-
888

•S 1956 PCS

1 judged incompetent) to participate in plan2 ning care and treatment or changes in care

3 and treatment.

4 ‘‘(ii) FREE FROM RESTRAINTS.—The

5 right to be free from physical or mental

6 abuse, corporal punishment, involuntary

7 seclusion, and any physical or chemical re8 straints imposed for purposes of discipline

9 or convenience and not required to treat

10 the resident’s medical symptoms. Re11 straints may only be imposed—

12 ‘‘(I) to ensure the physical safety

13 of the resident or other residents, and

14 ‘‘(II) only upon the written order

15 of a physician that specifies the dura16 tion and circumstances under which

17 the restraints are to be used (except

18 in emergency circumstances specified

19 by the Secretary until such an order

20 could reasonably be obtained).

21 ‘‘(iii) PRIVACY.—The right to privacy

22 with regard to accommodations, medical

23 treatment, written and telephonic commu24 nications, visits, and meetings of family

25 and of resident groups.
889

•S 1956 PCS

1 ‘‘(iv) CONFIDENTIALITY.—The right

2 to confidentiality of personal and clinical

3 records and to access to current clinical

4 records of the resident upon request by the

5 resident or the resident’s legal representa6 tive, within 24 hours (excluding hours oc7 curring during a weekend or holiday) after

8 making such a request.

9 ‘‘(v) ACCOMMODATION OF NEEDS.—

10 The right—

11 ‘‘(I) to reside and receive services

12 with reasonable accommodation of in13 dividual needs and preferences, except

14 where the health or safety of the indi15 vidual or other residents would be en16 dangered, and

17 ‘‘(II) to receive notice before the

18 room or roommate of the resident in

19 the facility is changed.

20 ‘‘(vi) GRIEVANCES.—The right to

21 voice grievances with respect to treatment

22 or care that is (or fails to be) furnished,

23 without discrimination or reprisal for voic24 ing the grievances and the right to prompt

25 efforts by the facility to resolve grievances
890

•S 1956 PCS

1 the resident may have, including those with

2 respect to the behavior of other residents.

3 ‘‘(vii) PARTICIPATION IN RESIDENT

4 AND FAMILY GROUPS.—The right of the

5 resident to organize and participate in resi6 dent groups in the facility and the right of

7 the resident’s family to meet in the facility

8 with the families of other residents in the

9 facility.

10 ‘‘(viii) PARTICIPATION IN OTHER AC11 TIVITIES.—The right of the resident to

12 participate in social, religious, and commu13 nity activities that do not interfere with

14 the rights of other residents in the facility.

15 ‘‘(ix) EXAMINATION OF SURVEY RE16 SULTS.—The right to examine, upon rea17 sonable request, the results of the most re18 cent survey of the facility conducted by the

19 Secretary or a State with respect to the fa20 cility and any plan of correction in effect

21 with respect to the facility.

22 ‘‘(x) REFUSAL OF CERTAIN TRANS23 FERS.—The right to refuse a transfer to

24 another room within the facility, if a pur25 pose of the transfer is to relocate the resi-
891

•S 1956 PCS

1 dent from a portion of the facility that is

2 not a skilled nursing facility (for purposes

3 of title XVIII) to a portion of the facility

4 that is such a skilled nursing facility.

5 ‘‘(xi) OTHER RIGHTS.—Any other

6 right established by the Secretary.

7 Clause (i) shall not be construed as precluding

8 a State from requiring a resident of a nursing

9 facility to choose a personal attending physician

10 who participates in a managed care network

11 under a contract with the State to provide med12 ical assistance under this title. Clause (iii) shall

13 not be construed as requiring the provision of

14 a private room. A resident’s exercise of a right

15 to refuse transfer under clause (x) shall not af16 fect the resident’s eligibility or entitlement to

17 medical assistance under this title or a State’s

18 entitlement to Federal medical assistance under

19 this title with respect to services furnished to

20 such a resident.

21 ‘‘(B) NOTICE OF RIGHTS.—A nursing fa22 cility must—

23 ‘‘(i) inform each resident, orally and

24 in writing at the time of admission to the

25 facility, of the resident’s legal rights dur-
892

•S 1956 PCS

1 ing the stay at the facility and of the re2 quirements and procedures for establishing

3 eligibility for medical assistance under this

4 title, including the right to request an as5 sessment under section 1505(c)(1)(B);

6 ‘‘(ii) make available to each resident,

7 upon reasonable request, a written state8 ment of such rights (which statement is

9 updated upon changes in such rights) in10 cluding the notice (if any) of the State de11 veloped under subsection (e)(6);

12 ‘‘(iii) inform each resident who is enti13 tled to medical assistance under this

14 title—

15 ‘‘(I) at the time of admission to

16 the facility or, if later, at the time the

17 resident becomes eligible for such as18 sistance, of the items and services

19 that are included in nursing facility

20 services under the State plan and for

21 which the resident may not be

22 charged, and of those other items and

23 services that the facility offers and for

24 which the resident may be charged
893

•S 1956 PCS

1 and the amount of the charges for

2 such items and services, and

3 ‘‘(II) of changes in the items and

4 services described in subclause (I) and

5 of changes in the charges imposed for

6 items and services described in that

7 subclause; and

8 ‘‘(iv) inform each other resident, in

9 writing before or at the time of admission

10 and periodically during the resident’s stay,

11 of services available in the facility and of

12 related charges for such services, including

13 any charges for services not covered under

14 title XVIII or by the facility’s basic per

15 diem charge.

16 The written description of legal rights under

17 this subparagraph shall include a description of

18 the protection of personal funds under para19 graph (6) and a statement that a resident may

20 file a complaint with a State survey and certifi21 cation agency respecting resident abuse and ne22 glect and misappropriation of resident property

23 in the facility.

24 ‘‘(C) RIGHTS OF INCOMPETENT RESI25 DENTS.—In the case of a resident adjudged in-
894

•S 1956 PCS

1 competent under the laws of a State, the rights

2 of the resident under this title shall devolve

3 upon, and, to the extent judged necessary by a

4 court of competent jurisdiction, be exercised by,

5 the person appointed under State law to act on

6 the resident’s behalf.

7 ‘‘(D) USE OF PSYCHOPHARMACOLOGIC

8 DRUGS.—Psychopharmacologic drugs may be

9 administered only on the orders of a physician

10 and only as part of a plan (included in the writ11 ten plan of care described in paragraph (2)) de12 signed to eliminate or modify the symptoms for

13 which the drugs are prescribed and only if, at

14 least annually an independent, external consult15 ant reviews the appropriateness of the drug

16 plan of each resident receiving such drugs.

17 ‘‘(2) TRANSFER AND DISCHARGE RIGHTS.—

18 ‘‘(A) IN GENERAL.—A nursing facility

19 must permit each resident to remain in the fa20 cility and must not transfer or discharge the

21 resident from the facility unless—

22 ‘‘(i) the transfer or discharge is nec23 essary to meet the resident’s welfare and

24 the resident’s welfare cannot be met in the

25 facility;
895

•S 1956 PCS

1 ‘‘(ii) the transfer or discharge is ap2 propriate because the resident’s health has

3 improved sufficiently so the resident no

4 longer needs the services provided by the

5 facility;

6 ‘‘(iii) the safety of individuals in the

7 facility is endangered;

8 ‘‘(iv) the health of individuals in the

9 facility would otherwise be endangered;

10 ‘‘(v) the resident has failed, after rea11 sonable and appropriate notice, to pay (or

12 to have paid under this title or title XVIII

13 on the resident’s behalf) for a stay at the

14 facility; or

15 ‘‘(vi) the facility ceases to operate.

16 In each of the cases described in clauses (i)

17 through (iv), the basis for the transfer or dis18 charge must be documented in the resident’s

19 clinical record. In the cases described in clauses

20 (i) and (ii), the documentation must be made

21 by the resident’s physician, and in the case de22 scribed in clause (iv) the documentation must

23 be made by a physician. For purposes of clause

24 (v), in the case of a resident who becomes eligi25 ble for assistance under this title after admis-
896

•S 1956 PCS

1 sion to the facility, only charges which may be

2 imposed under this title shall be considered to

3 be allowable.

4 ‘‘(B) PRE-TRANSFER AND PRE-DISCHARGE

5 NOTICE.—

6 ‘‘(i) IN GENERAL.—Before effecting a

7 transfer or discharge of a resident, a nurs8 ing facility must—

9 ‘‘(I) notify the resident (and, if

10 known, an immediate family member

11 of the resident or legal representative)

12 of the transfer or discharge and the

13 reasons therefor,

14 ‘‘(II) record the reasons in the

15 resident’s clinical record (including

16 any documentation required under

17 subparagraph (A)), and

18 ‘‘(III) include in the notice the

19 items described in clause (iii).

20 ‘‘(ii) TIMING OF NOTICE.—The notice

21 under clause (i)(I) must be made at least

22 30 days in advance of the resident’s trans23 fer or discharge except—

24 ‘‘(I) in a case described in clause

25 (iii) or (iv) of subparagraph (A);
897

•S 1956 PCS

1 ‘‘(II) in a case described in

2 clause (ii) of subparagraph (A), where

3 the resident’s health improves suffi4 ciently to allow a more immediate

5 transfer or discharge;

6 ‘‘(III) in a case described in

7 clause (i) of subparagraph (A), where

8 a more immediate transfer or dis9 charge is necessitated by the resi10 dent’s urgent medical needs; or

11 ‘‘(IV) in a case where a resident

12 has not resided in the facility for 30

13 days.

14 In the case of such exceptions, notice must

15 be given as many days before the date of

16 the transfer or discharge as is practicable.

17 ‘‘(iii) ITEMS INCLUDED IN NOTICE.—

18 Each notice under clause (i) must in19 clude—

20 ‘‘(I) notice of the resident’s right

21 to appeal the transfer or discharge

22 under the State process established

23 under subsection (e)(3);

24 ‘‘(II) the name, mailing address,

25 and telephone number of the State
898

•S 1956 PCS

1 long-term care ombudsman (estab2 lished under title III or VII of the

3 Older Americans Act of 1965);

4 ‘‘(III) in the case of residents

5 with developmental disabilities, the

6 mailing address and telephone number

7 of the agency responsible for the pro8 tection and advocacy system for devel9 opmentally disabled individuals estab10 lished under part C of the Devel11 opmental Disabilities Assistance and

12 Bill of Rights Act; and

13 ‘‘(IV) in the case of mentally ill

14 residents (as defined in subsection

15 (e)(7)(G)(i)), the mailing address and

16 telephone number of the agency re17 sponsible for the protection and advo18 cacy system for mentally ill individ19 uals established under the Protection

20 and Advocacy for Mentally Ill Individ21 uals Act.

22 ‘‘(C) ORIENTATION.—A nursing facility

23 must provide sufficient preparation and orienta24 tion to residents to ensure safe and orderly

25 transfer or discharge from the facility.
899

•S 1956 PCS

1 ‘‘(D) NOTICE ON BED-HOLD POLICY AND

2 READMISSION.—

3 ‘‘(i) NOTICE BEFORE TRANSFER.—

4 Before a resident of a nursing facility is

5 transferred for hospitalization or thera6 peutic leave, a nursing facility must pro7 vide written information to the resident

8 and an immediate family member or legal

9 representative concerning—

10 ‘‘(I) the provisions of the State

11 plan under this title regarding the pe12 riod (if any) during which the resident

13 will be permitted under the State plan

14 to return and resume residence in the

15 facility, and

16 ‘‘(II) the policies of the facility

17 regarding such a period, which poli18 cies must be consistent with clause

19 (iii).

20 ‘‘(ii) NOTICE UPON TRANSFER.—At

21 the time of transfer of a resident to a hos22 pital or for therapeutic leave, a nursing fa23 cility must provide written notice to the

24 resident and an immediate family member
900

•S 1956 PCS

1 or legal representative of the duration of

2 any period described in clause (i).

3 ‘‘(iii) PERMITTING RESIDENT TO RE4 TURN.—A nursing facility must establish

5 and follow a written policy under which a

6 resident—

7 ‘‘(I) who is eligible for medical

8 assistance for nursing facility services

9 under a State plan,

10 ‘‘(II) who is transferred from the

11 facility for hospitalization or thera12 peutic leave, and

13 ‘‘(III) whose hospitalization or

14 therapeutic leave exceeds a period

15 paid for under the State plan for the

16 holding of a bed in the facility for the

17 resident,

18 will be permitted to be readmitted to the

19 facility immediately upon the first avail20 ability of a bed in a room (not including a

21 private room) in the facility if, at the time

22 of readmission, the resident requires the

23 services provided by the facility.

24 ‘‘(3) ACCESS AND VISITATION RIGHTS.—A

25 nursing facility must—
901

•S 1956 PCS

1 ‘‘(A) permit immediate access to any resi2 dent by any representative of the Secretary, by

3 any representative of the State, by an ombuds4 man or agency described in subclause (II),

5 (III), or (IV) of paragraph (2)(B)(iii), or by the

6 resident’s individual physician;

7 ‘‘(B) permit immediate access to a resi8 dent, subject to the resident’s right to deny or

9 withdraw consent at any time, by immediate

10 family or other relatives of the resident;

11 ‘‘(C) permit immediate access to a resi12 dent, subject to reasonable restrictions and the

13 resident’s right to deny or withdraw consent at

14 any time, by others who are visiting with the

15 consent of the resident;

16 ‘‘(D) permit reasonable access to a resi17 dent by any entity or individual that provides

18 health, social, legal, or other services to the

19 resident, subject to the resident’s right to deny

20 or withdraw consent at any time; and

21 ‘‘(E) permit representatives of the State

22 ombudsman (described in paragraph

23 (2)(B)(iii)(II)), with the permission of the resi24 dent (or the resident’s legal representative) and
902

•S 1956 PCS

1 consistent with State law, to examine a resi2 dent’s clinical records.

3 ‘‘(4) EQUAL ACCESS TO QUALITY CARE.—

4 ‘‘(A) IN GENERAL.—A nursing facility

5 must establish and maintain identical policies

6 and practices regarding transfer, discharge, and

7 the provision of services required under the

8 State plan for all individuals regardless of

9 source of payment.

10 ‘‘(B) CONSTRUCTION.—

11 ‘‘(i) NOTHING PROHIBITING ANY

12 CHARGES FOR NON-MEDICAL ASSISTANCE

13 PATIENTS.—Subparagraph (A) shall not be

14 construed as prohibiting a nursing facility

15 from charging any amount for services fur16 nished, consistent with the notice in para17 graph (1)(B) describing such charges.

18 ‘‘(ii) NO ADDITIONAL SERVICES RE19 QUIRED.—Subparagraph (A) shall not be

20 construed as requiring a State to offer ad21 ditional services on behalf of a resident

22 than are otherwise provided under the

23 State plan.

24 ‘‘(5) ADMISSIONS POLICY.—
903

•S 1956 PCS

1 ‘‘(A) ADMISSIONS.—With respect to admis2 sions practices, a nursing facility must—

3 ‘‘(i)(I) not require individuals apply4 ing to reside or residing in the facility to

5 waive their rights to benefits under a State

6 plan under this title or title XVIII, (II) not

7 require oral or written assurance that such

8 individuals are not eligible for, or will not

9 apply for, benefits under a State plan

10 under this title or title XVIII, and (III)

11 prominently display in the facility written

12 information, and provide to such individ13 uals oral and written information, about

14 how to apply for and use such benefits and

15 how to receive refunds for previous pay16 ments covered by such benefits;

17 ‘‘(ii) not require a third party guaran18 tee of payment to the facility as a condi19 tion of admission (or expedited admission)

20 to, or continued stay in, the facility; and

21 ‘‘(iii) in the case of an individual who

22 is provided medical assistance for nursing

23 facility services, not charge, solicit, accept,

24 or receive, in addition to any amount oth25 erwise required to be paid under the State
904

•S 1956 PCS

1 plan under this title, any gift, money, do2 nation, or other consideration as a pre3 condition of admitting (or expediting the

4 admission of) the individual to the facility

5 or as a requirement for the individual’s

6 continued stay in the facility.

7 ‘‘(B) CONSTRUCTION.—

8 ‘‘(i) NO PREEMPTION OF STRICTER

9 STANDARDS.—Subparagraph (A) shall not

10 be construed as preventing States or politi11 cal subdivisions therein from prohibiting,

12 under State or local law, the discrimination

13 against individuals who are provided medi14 cal assistance under the State plan with

15 respect to admissions practices of nursing

16 facilities.

17 ‘‘(ii) CONTRACTS WITH LEGAL REP18 RESENTATIVES.—Subparagraph (A)(ii)

19 shall not be construed as preventing a fa20 cility from requiring an individual, who has

21 legal access to a resident’s income or re22 sources available to pay for care in the fa23 cility, to sign a contract (without incurring

24 personal financial liability) to provide pay-
905

•S 1956 PCS

1 ment from the resident’s income or re2 sources for such care.

3 ‘‘(iii) CHARGES FOR ADDITIONAL

4 SERVICES REQUESTED.—Subparagraph

5 (A)(iii) shall not be construed as prevent6 ing a facility from charging a resident, eli7 gible for medical assistance under the

8 State plan, for items or services the resi9 dent has requested and received and that

10 are not specified in the State plan as in11 cluded in covered nursing facility services.

12 ‘‘(iv) BONA FIDE CONTRIBUTIONS.—

13 Subparagraph (A)(iii) shall not be con14 strued as prohibiting a nursing facility

15 from soliciting, accepting, or receiving a

16 charitable, religious, or philanthropic con17 tribution from an organization or from a

18 person unrelated to the resident (or poten19 tial resident), but only to the extent that

20 such contribution is not a condition of ad21 mission, expediting admission, or continued

22 stay in the facility.

23 ‘‘(6) PROTECTION OF RESIDENT FUNDS.—

24 ‘‘(A) IN GENERAL.—The nursing facility—
906

•S 1956 PCS

1 ‘‘(i) may not require residents to de2 posit their personal funds with the facility,

3 and

4 ‘‘(ii) upon the written authorization of

5 the resident, must hold, safeguard, and ac6 count for such personal funds under a sys7 tem established and maintained by the fa8 cility in accordance with this paragraph.

9 ‘‘(B) MANAGEMENT OF PERSONAL

10 FUNDS.—Upon written authorization of a resi11 dent under subparagraph (A)(ii), the facility

12 must manage and account for the personal

13 funds of the resident deposited with the facility

14 as follows:

15 ‘‘(i) DEPOSIT.—The facility must de16 posit any amount of personal funds in ex17 cess of $50 with respect to a resident in an

18 interest bearing account (or accounts) that

19 is separate from any of the facility’s oper20 ating accounts and credits all interest

21 earned on such separate account to such

22 account. With respect to any other per23 sonal funds, the facility must maintain

24 such funds in a non-interest bearing ac25 count or petty cash fund.
907

•S 1956 PCS

1 ‘‘(ii) ACCOUNTING AND RECORDS.—

2 The facility must assure a full and com3 plete separate accounting of each such

4 resident’s personal funds, maintain a writ5 ten record of all financial transactions in6 volving the personal funds of a resident de7 posited with the facility, and afford the

8 resident (or a legal representative of the

9 resident) reasonable access to such record.

10 ‘‘(iii) NOTICE OF CERTAIN BAL11 ANCES.—The facility must notify each resi12 dent receiving medical assistance under the

13 State plan when the amount in the resi14 dent’s account reaches $200 less than the

15 dollar amount determined under section

16 1611(a)(3)(B) and the fact that if the

17 amount in the account (in addition to the

18 value of the resident’s other nonexempt re19 sources) reaches the amount determined

20 under such section the resident may lose

21 eligibility for such medical assistance or for

22 benefits under title XVI.

23 ‘‘(iv) CONVEYANCE UPON DEATH.—

24 Upon the death of a resident with such an

25 account, the facility must convey promptly
908

•S 1956 PCS

1 the resident’s personal funds (and a final

2 accounting of such funds) to the individual

3 administering the resident’s estate. All

4 other personal property, including medical

5 records, shall be considered part of the

6 resident’s estate and shall only be released

7 to the administrator of the estate.

8 ‘‘(C) ASSURANCE OF FINANCIAL SECU9 RITY.—The facility must purchase a surety

10 bond, or otherwise provide assurance satisfac11 tory to the State, to assure the security of all

12 personal funds of residents deposited with the

13 facility.

14 ‘‘(D) LIMITATION ON CHARGES TO PER15 SONAL FUNDS.—The facility may not impose a

16 charge against the personal funds of a resident

17 for any item or service for which payment is

18 made under this title or title XVIII.

19 ‘‘(7) LIMITATION ON CHARGES IN CASE OF

20 MEDICAL-ASSISTANCE-ELIGIBLE INDIVIDUALS.—

21 ‘‘(A) IN GENERAL.—A nursing facility may

22 not impose charges, for certain medical-assist23 ance-eligible individuals for nursing facility

24 services covered by the State under its plan

25 under this title, that exceed the payment
909

•S 1956 PCS

1 amounts established by the State for such serv2 ices under this title.

3 ‘‘(B) CERTAIN MEDICAL-ASSISTANCE-ELI4 GIBLE INDIVIDUALS DEFINED.—In subpara5 graph (A), the term ‘certain medical-assistance6 eligible individual’ means an individual who is

7 entitled to medical assistance for nursing facil8 ity services in the facility under this title but

9 with respect to whom such benefits are not

10 being paid because, in determining the amount

11 of the individual’s income to be applied monthly

12 to payment for the costs of such services, the

13 amount of such income exceeds the payment

14 amounts established by the State for such serv15 ices under this title.

16 ‘‘(8) POSTING OF SURVEY RESULTS.—A nurs17 ing facility must post in a place readily accessible to

18 residents, and family members and legal representa19 tives of residents, the results of the most recent sur20 vey of the facility conducted under subsection (g).

21 ‘‘(d) REQUIREMENTS RELATING TO ADMINISTRA22 TION AND OTHER MATTERS.—

23 ‘‘(1) ADMINISTRATION.—

24 ‘‘(A) IN GENERAL.—A nursing facility

25 must be administered in a manner that enables
910

•S 1956 PCS

1 it to use its resources effectively and efficiently

2 to attain or maintain the highest practicable

3 physical, mental, and psychosocial well-being of

4 each resident (consistent with requirements es5 tablished under subsection (f)(5)).

6 ‘‘(B) REQUIRED NOTICES.—If a change oc7 curs in—

8 ‘‘(i) the persons with an ownership or

9 control interest (as defined in section

10 1124(a)(3)) in the facility,

11 ‘‘(ii) the persons who are officers, di12 rectors, agents, or managing employees (as

13 defined in section 1126(b)) of the facility,

14 ‘‘(iii) the corporation, association, or

15 other company responsible for the manage16 ment of the facility, or

17 ‘‘(iv) the individual who is the admin18 istrator or director of nursing of the facil19 ity,

20 the nursing facility must provide notice to the

21 State agency responsible for the licensing of the

22 facility, at the time of the change, of the change

23 and of the identity of each new person, com24 pany, or individual described in the respective

25 clause.
911

•S 1956 PCS

1 ‘‘(C) NURSING FACILITY ADMINIS2 TRATOR.—The administrator of a nursing facil3 ity, whether freestanding or hospital-based,

4 must meet such standards as are established by

5 the Secretary under subsection (f)(4).

6 ‘‘(2) LICENSING AND LIFE SAFETY CODE.—

7 ‘‘(A) LICENSING.—A nursing facility must

8 be licensed under applicable State and local law.

9 ‘‘(B) LIFE SAFETY CODE.—A nursing fa10 cility must meet such provisions of such edition

11 (as specified by the Secretary in regulation) of

12 the Life Safety Code of the National Fire Pro13 tection Association as are applicable to nursing

14 homes; except that—

15 ‘‘(i) the Secretary may waive, for such

16 periods as he deems appropriate, specific

17 provisions of such Code which if rigidly ap18 plied would result in unreasonable hard19 ship upon a facility, but only if such waiver

20 would not adversely affect the health and

21 safety of residents or personnel, and

22 ‘‘(ii) the provisions of such Code shall

23 not apply in any State if the Secretary

24 finds that in such State there is in effect

25 a fire and safety code, imposed by State
912

•S 1956 PCS

1 law, which adequately protects residents of

2 and personnel in nursing facilities.

3 ‘‘(3) SANITARY AND INFECTION CONTROL AND

4 PHYSICAL ENVIRONMENT.—A nursing facility

5 must—

6 ‘‘(A) establish and maintain an infection

7 control program designed to provide a safe, san8 itary, and comfortable environment in which

9 residents reside and to help prevent the devel10 opment and transmission of disease and infec11 tion, and

12 ‘‘(B) be designed, constructed, equipped,

13 and maintained in a manner to protect the

14 health and safety of residents, personnel, and

15 the general public.

16 ‘‘(4) MISCELLANEOUS.—

17 ‘‘(A) COMPLIANCE WITH FEDERAL, STATE,

18 AND LOCAL LAWS AND PROFESSIONAL STAND19 ARDS.—A nursing facility, whether freestanding

20 or hospital-based, must operate and provide

21 services in compliance with all applicable Fed22 eral, State, and local laws and regulations (in23 cluding the requirements of section 1124) and

24 with accepted professional standards and prin-
913

•S 1956 PCS

1 ciples which apply to professionals providing

2 services in such a facility.

3 ‘‘(B) OTHER.—A nursing facility must

4 meet such other requirements relating to the

5 health and safety of residents or relating to the

6 physical facilities thereof as the Secretary may

7 find necessary.

8 ‘‘(e) STATE REQUIREMENTS RELATING TO NURSING

9 FACILITY REQUIREMENTS.—A State with a State plan

10 under this title shall provide for the following:

11 ‘‘(1) SPECIFICATION AND REVIEW OF NURSE

12 AIDE TRAINING AND COMPETENCY EVALUATION

13 PROGRAMS AND OF NURSE AIDE COMPETENCY EVAL14 UATION PROGRAMS.—The State must—

15 ‘‘(A) specify those training and competency

16 evaluation programs, and those competency

17 evaluation programs, that the State approves

18 for purposes of subsection (b)(5) and that meet

19 the requirements established under subsection

20 (f)(2), and

21 ‘‘(B) provide for the review and reapproval

22 of such programs, at a frequency and using a

23 methodology consistent with the requirements

24 established under subsection (f)(2)(A)(iii).

25 ‘‘(2) NURSE AIDE REGISTRY.—
914

•S 1956 PCS

1 ‘‘(A) IN GENERAL.—The State shall estab2 lish and maintain a registry of all individuals

3 who have satisfactorily completed a nurse aide

4 training and competency evaluation program, or

5 a nurse aide competency evaluation program,

6 approved under paragraph (1) in the State, or

7 any individual described in subsection

8 (f)(2)(B)(ii) or in subparagraph (B), (C), or

9 (D) of section 6901(b)(4) of the Omnibus

10 Budget Reconciliation Act of 1989.

11 ‘‘(B) INFORMATION IN REGISTRY.—The

12 registry under subparagraph (A) shall provide

13 (in accordance with regulations of the Sec14 retary) for the inclusion of specific documented

15 findings by a State under subsection (g)(1)(C)

16 of resident neglect or abuse or misappropriation

17 of resident property involving an individual list18 ed in the registry, as well as any brief state19 ment of the individual disputing the findings.

20 The State shall make available to the public in21 formation in the registry. In the case of inquir22 ies to the registry concerning an individual list23 ed in the registry, any information disclosed

24 concerning such a finding shall also include dis25 closure of any such statement in the registry re-
915

•S 1956 PCS

1 lating to the finding or a clear and accurate

2 summary of such a statement.

3 ‘‘(C) PROHIBITION AGAINST CHARGES.—A

4 State may not impose any charges on a nurse

5 aide relating to the registry established and

6 maintained under subparagraph (A).

7 ‘‘(3) STATE APPEALS PROCESS FOR TRANSFERS

8 AND DISCHARGES.—The State must provide for a

9 fair mechanism, meeting the guidelines established

10 under subsection (f)(3), for hearing appeals on

11 transfers and discharges of residents of such facili12 ties.

13 ‘‘(4) NURSING FACILITY ADMINISTRATOR

14 STANDARDS.—The State must implement and en15 force the nursing facility administrator standards

16 developed under subsection (f)(4) respecting the

17 qualification of administrators of nursing facilities.

18 Any such standards promulgated shall apply to ad19 ministrators of hospital-based facilities as well as ad20 ministrators of freestanding facilities.

21 ‘‘(5) SPECIFICATION OF RESIDENT ASSESSMENT

22 INSTRUMENT.—The State shall specify the instru23 ment to be used by nursing facilities in the State in

24 complying with the requirement of subsection

25 (b)(3)(A)(iii). Such instrument shall be—
916

•S 1956 PCS

1 (A) one of the instruments designated

2 under subsection (f)(6)(B), or

3 (B) an instrument which the Secretary has

4 approved as being consistent with the minimum

5 data set of core elements, common definitions,

6 and utilization guidelines specified by the Sec7 retary under subsection (f)(6)(A).

8 ‘‘(6) NOTICE OF RIGHTS.—Each State shall de9 velop (and periodically update) a written notice of

10 the rights and obligations of residents of nursing fa11 cilities (and spouses of such residents) under this

12 title.

13 ‘‘(7) STATE REQUIREMENTS FOR

14 PREADMISSION SCREENING AND RESIDENT RE15 VIEW.—

16 ‘‘(A) PREADMISSION SCREENING.—

17 ‘‘(i) IN GENERAL.—The State must

18 have in effect a preadmission screening

19 program, for identifying mentally ill and

20 mentally retarded individuals (as defined

21 in subparagraph (B)) who are admitted to

22 nursing facilities and for determining

23 whether they require the level of services of

24 such a facility.
917

•S 1956 PCS

1 ‘‘(ii) STATE REQUIREMENT FOR RESI2 DENT REVIEW.—The State shall notify the

3 State mental health authority or the State

4 mental retardation or developmental dis5 ability authority, as appropriate, of the in6 dividuals so identified.

7 ‘‘(B) DEFINITIONS.—In this paragraph:

8 ‘‘(i) An individual is considered to be

9 ‘mentally ill’ if the individual has a serious

10 mental illness (as defined by the Secretary

11 in consultation with the National Institute

12 of Mental Health) and does not have a pri13 mary diagnosis of dementia (including Alz14 heimer’s disease or a related disorder) or a

15 diagnosis (other than a primary diagnosis)

16 of dementia and a primary diagnosis that

17 is not a serious mental illness.

18 ‘‘(ii) An individual is considered to be

19 ‘mentally retarded’ if the individual is

20 mentally retarded or a person with a relat21 ed condition.

22 ‘‘(f) RESPONSIBILITIES RELATING TO NURSING FA23 CILITY REQUIREMENTS.—

24 ‘‘(1) GENERAL RESPONSIBILITY.—It is the duty

25 and responsibility of the Secretary to assure that re-
918

•S 1956 PCS

1 quirements which govern the provision of care in

2 nursing facilities under State plans approved under

3 this title, and the enforcement of such requirements,

4 are adequate to protect the health, safety, welfare,

5 and rights of residents and to promote the effective

6 and efficient use of public moneys.

7 ‘‘(2) REQUIREMENTS FOR NURSE AIDE TRAIN8 ING AND COMPETENCY EVALUATION PROGRAMS AND

9 FOR NURSE AIDE COMPETENCY EVALUATION PRO10 GRAMS.—

11 ‘‘(A) IN GENERAL.—For purposes of sub12 sections (b)(5) and (e)(1)(A), the Secretary

13 shall establish—

14 ‘‘(i) requirements for the approval of

15 nurse aide training and competency evalua16 tion programs, including requirements re17 lating to (I) the areas to be covered in

18 such a program (including at least basic

19 nursing skills, personal care skills, recogni20 tion of mental health and social service

21 needs, care of cognitively impaired resi22 dents, basic restorative services, and resi23 dents’ rights) and content of the curricu24 lum, (II) minimum hours of initial and on25 going training and retraining (including
919

•S 1956 PCS

1 not less than 75 hours in the case of initial

2 training), (III) qualifications of instruc3 tors, and (IV) procedures for determina4 tion of competency;

5 ‘‘(ii) requirements for the approval of

6 nurse aide competency evaluation pro7 grams, including requirement relating to

8 the areas to be covered in such a program,

9 including at least basic nursing skills, per10 sonal care skills, recognition of mental

11 health and social service needs, care of

12 cognitively impaired residents, basic restor13 ative services, and residents’ rights, and

14 procedures for determination of com15 petency;

16 ‘‘(iii) requirements respecting the

17 minimum frequency and methodology to be

18 used by a State in reviewing such pro19 grams’ compliance with the requirements

20 for such programs; and

21 ‘‘(iv) requirements, under both such

22 programs, that—

23 ‘‘(I) provide procedures for deter24 mining competency that permit a

25 nurse aide, at the nurse aide’s option,
920

•S 1956 PCS

1 to establish competency through pro2 cedures or methods other than the

3 passing of a written examination and

4 to have the competency evaluation

5 conducted at the nursing facility at

6 which the aide is (or will be) employed

7 (unless the facility is described in sub8 paragraph (B)(iii)(I)),

9 ‘‘(II) prohibit the imposition on a

10 nurse aide who is employed by (or

11 who has received an offer of employ12 ment from) a facility on the date on

13 which the aide begins either such pro14 gram of any charges (including any

15 charges for textbooks and other re16 quired course materials and any

17 charges for the competency evalua18 tion) for either such program, and

19 ‘‘(III) in the case of a nurse aide

20 not described in subclause (II) who is

21 employed by (or who has received an

22 offer of employment from) a facility

23 not later than 12 months after com24 pleting either such program, the State

25 shall provide for the reimbursement of
921

•S 1956 PCS

1 costs incurred in completing such pro2 gram on a prorata basis during the

3 period in which the nurse aide is so

4 employed.

5 ‘‘(B) APPROVAL OF CERTAIN PROGRAMS.—

6 Such requirements—

7 ‘‘(i) may permit approval of programs

8 offered by or in facilities, as well as outside

9 facilities (including employee organiza10 tions);

11 ‘‘(ii) shall permit a State to find that

12 an individual who has completed (before

13 July 1, 1989) a nurse aide training and

14 competency evaluation program shall be

15 deemed to have completed such a program

16 approved under subsection (b)(5) if the

17 State determines that, at the time the pro18 gram was offered, the program met the re19 quirements for approval under such para20 graph; and

21 ‘‘(iii) subject to subparagraph (C),

22 shall prohibit approval of such a pro23 gram—
922

•S 1956 PCS

1 ‘‘(I) offered by or in a nursing

2 facility which, within the previous 2

3 years—

4 ‘‘(a) has operated under a

5 waiver under subsection

6 (b)(4)(C)(ii) that was granted on

7 the basis of a demonstration that

8 the facility is unable to provide

9 the nursing care required under

10 subsection (b)(4)(C)(i) for a pe11 riod in excess of 48 hours during

12 a week;

13 ‘‘(b) has been subject to an

14 extended (or partial extended)

15 survey under section

16 1819(g)(2)(B)(i) or subsection

17 (g)(2)(B)(i); or

18 ‘‘(c) has been assessed a

19 civil money penalty described in

20 section 1819(h)(2)(B)(ii) or sub21 section (h)(2)(A)(ii) of not less

22 than $5,000, or has been subject

23 to a remedy described in sub24 section (h)(1)(B)(i), clauses (i),

25 (iii), or (iv) of subsection
923

•S 1956 PCS

1 (h)(2)(A), clauses (i) or (iii) of

2 section 1819(h)(2)(B), or section

3 1819(h)(4), or

4 ‘‘(II) offered by or in a nursing

5 facility unless the State makes the de6 termination, upon an individual’s com7 pletion of the program, that the indi8 vidual is competent to provide nursing

9 and nursing-related services in nurs10 ing facilities.

11 A State may not delegate (through sub12 contract or otherwise) its responsibility

13 under clause (iii)(II) to the nursing facil14 ity.

15 ‘‘(C) WAIVER AUTHORIZED.—Clause (iii)

16 of subparagraph (B) shall not apply to a pro17 gram offered in (but not by) a nursing facility

18 in a State if the State—

19 ‘‘(i) determines that there is no other

20 such program offered within a reasonable

21 distance of the facility,

22 ‘‘(ii) ensures, through an oversight ef23 fort, that an adequate environment exists

24 for operating the program in the facility,

25 and
924

•S 1956 PCS

1 ‘‘(iii) provides notice of such deter2 mination and assurances to the State long3 term care ombudsman.

4 ‘‘(3) FEDERAL GUIDELINES FOR STATE AP5 PEALS PROCESS FOR TRANSFERS AND DIS6 CHARGES.—For purposes of subsections

7 (c)(2)(B)(iii) and (e)(3), the Secretary shall estab8 lish guidelines for minimum standards which State

9 appeals processes under subsection (e)(3) must meet

10 to provide a fair mechanism for hearing appeals on

11 transfers and discharges of residents from nursing

12 facilities.

13 ‘‘(4) QUALIFICATION OF ADMINISTRATORS.—

14 For purposes of subsections (d)(1)(C) and (e)(4),

15 the Secretary shall develop standards to be applied

16 in assuring the qualifications of administrators of

17 nursing facilities. Any such standards must apply to

18 administrators of hospital-based facilities as well as

19 administrators of freestanding facilities.

20 ‘‘(5) CRITERIA FOR ADMINISTRATION.—The

21 Secretary shall establish criteria for assessing a

22 nursing facility’s compliance with the requirement of

23 subsection (d)(1) with respect to—

24 ‘‘(A) its governing body and management,
925

•S 1956 PCS

1 ‘‘(B) agreements with hospitals regarding

2 transfers of residents to and from the hospitals

3 and to and from other nursing facilities,

4 ‘‘(C) disaster preparedness,

5 ‘‘(D) direction of medical care by a physi6 cian,

7 ‘‘(E) laboratory and radiological services,

8 ‘‘(F) clinical records, and

9 ‘‘(G) resident and advocate participation.

10 ‘‘(6) SPECIFICATION OF RESIDENT ASSESSMENT

11 DATA SET AND INSTRUMENTS.—The Secretary

12 shall—

13 ‘‘(A) specify a minimum data set of core

14 elements and common definitions for use by

15 nursing facilities in conducting the assessments

16 required under subsection (b)(3), and establish

17 guidelines for utilization of the data set; and

18 ‘‘(B) designate one or more instruments

19 which are consistent with the specification made

20 under subparagraph (A) and which a State may

21 specify under subsection (e)(5)(A) for use by

22 nursing facilities in complying with the require23 ments of subsection (b)(3)(A)(iii).

24 ‘‘(7) LIST OF ITEMS AND SERVICES FURNISHED

25 IN NURSING FACILITIES NOT CHARGEABLE TO THE
926

•S 1956 PCS

1 PERSONAL FUNDS OF A RESIDENT.—The Secretary

2 shall issue regulations that define those costs which

3 may be charged to the personal funds of residents

4 in nursing facilities who are individuals receiving

5 medical assistance with respect to nursing facility

6 services under this title and those costs which are to

7 be included in the payment amount under this title

8 for nursing facility services.

9 ‘‘(8) CRITERIA FOR MONITORING STATE WAIV10 ERS.—The Secretary shall develop criteria and pro11 cedures for monitoring State performances in grant12 ing waivers pursuant to subsection (b)(4)(C)(ii).

13 ‘‘(g) SURVEY AND CERTIFICATION PROCESS.—

14 ‘‘(1) STATE AND FEDERAL RESPONSIBILITY.—

15 ‘‘(A) IN GENERAL.—Under each State plan

16 under this title, the State shall be responsible

17 for certifying, in accordance with surveys con18 ducted under paragraph (2), the compliance of

19 nursing facilities (other than facilities of the

20 State) with the requirements of subsections (b),

21 (c), and (d). The Secretary shall be responsible

22 for certifying, in accordance with surveys con23 ducted under paragraph (2), the compliance of

24 State nursing facilities with the requirements of

25 such subsections.
927

•S 1956 PCS

1 ‘‘(B) EDUCATIONAL PROGRAM.—Each

2 State shall conduct periodic educational pro3 grams for the staff and residents (and their

4 representatives) of nursing facilities in order to

5 present current regulations, procedures, and

6 policies under this section.

7 ‘‘(C) INVESTIGATION OF ALLEGATIONS OF

8 RESIDENT NEGLECT AND ABUSE AND MIS9 APPROPRIATION OF RESIDENT PROPERTY.—The

10 State shall provide, through the agency respon11 sible for surveys and certification of nursing fa12 cilities under this subsection, for a process for

13 the receipt and timely review and investigation

14 of allegations of neglect and abuse and mis15 appropriation of resident property by a nurse

16 aide of a resident in a nursing facility or by an17 other individual used by the facility in providing

18 services to such a resident. The State shall,

19 after notice to the individual involved and a rea20 sonable opportunity for a hearing for the indi21 vidual to rebut allegations, make a finding as to

22 the accuracy of the allegations. If the State

23 finds that a nurse aide has neglected or abused

24 a resident or misappropriated resident property

25 in a facility, the State shall notify the nurse
928

•S 1956 PCS

1 aide and the registry of such finding. If the

2 State finds that any other individual used by

3 the facility has neglected or abused a resident

4 or misappropriated resident property in a facil5 ity, the State shall notify the appropriate licen6 sure authority. A State shall not make a find7 ing that an individual has neglected a resident

8 if the individual demonstrates that such neglect

9 was caused by factors beyond the control of the

10 individual.

11 ‘‘(2) SURVEYS.—

12 ‘‘(A) ANNUAL STANDARD SURVEY.—

13 ‘‘(i) IN GENERAL.—Each nursing fa14 cility shall be subject to a standard survey,

15 to be conducted without any prior notice to

16 the facility. Any individual who notifies (or

17 causes to be notified) a nursing facility of

18 the time or date on which such a survey is

19 scheduled to be conducted is subject to a

20 civil money penalty of not to exceed

21 $2,000. The provisions of section 1128A

22 (other than subsections (a) and (b)) shall

23 apply to a civil money penalty under the

24 previous sentence in the same manner as

25 such provisions apply to a penalty or pro-
929

•S 1956 PCS

1 ceeding under section 1128A(a). The Sec2 retary shall review each State’s procedures

3 for scheduling and conduct of standard

4 surveys to assure that the State has taken

5 all reasonable steps to avoid giving notice

6 of such a survey through the scheduling

7 procedures and the conduct of the surveys

8 themselves.

9 ‘‘(ii) CONTENTS.—Each standard sur10 vey shall include, for a case-mix stratified

11 sample of residents—

12 ‘‘(I) a survey of the quality of

13 care furnished, as measured by indica14 tors of medical, nursing, and rehabili15 tative care, dietary and nutrition serv16 ices, activities and social participation,

17 and sanitation, infection control, and

18 the physical environment,

19 ‘‘(II) written plans of care pro20 vided under subsection (b)(2) and an

21 audit of the residents’ assessments

22 under subsection (b)(3) to determine

23 the accuracy of such assessments and

24 the adequacy of such plans of care,

25 and
930

•S 1956 PCS

1 ‘‘(III) a review of compliance

2 with residents’ rights under sub3 section (c).

4 ‘‘(iii) FREQUENCY.—

5 ‘‘(I) IN GENERAL.—Each nursing

6 facility shall be subject to a standard

7 survey not later than 15 months after

8 the date of the previous standard sur9 vey conducted under this subpara10 graph. The statewide average interval

11 between standard surveys of a nursing

12 facility shall not exceed 12 months.

13 ‘‘(II) SPECIAL SURVEYS.—If not

14 otherwise conducted under subclause

15 (I), a standard survey (or an abbre16 viated standard survey) may be con17 ducted within 2 months of any change

18 of ownership, administration, manage19 ment of a nursing facility, or director

20 of nursing in order to determine

21 whether the change has resulted in

22 any decline in the quality of care fur23 nished in the facility.

24 ‘‘(B) EXTENDED SURVEYS.—
931

•S 1956 PCS

1 ‘‘(i) IN GENERAL.—Each nursing fa2 cility which is found, under a standard sur3 vey, to have provided substandard quality

4 of care shall be subject to an extended sur5 vey. Any other facility may, at the Sec6 retary’s or State’s discretion, be subject to

7 such an extended survey (or a partial ex8 tended survey).

9 ‘‘(ii) TIMING.—The extended survey

10 shall be conducted immediately after the

11 standard survey (or, if not practicable, not

12 later than 2 weeks after the date of com13 pletion of the standard survey).

14 ‘‘(iii) CONTENTS.—In such an ex15 tended survey, the survey team shall review

16 and identify the policies and procedures

17 which produced such substandard quality

18 of care and shall determine whether the fa19 cility has complied with all the require20 ments described in subsections (b), (c),

21 and (d). Such review shall include an ex22 pansion of the size of the sample of resi23 dents’ assessments reviewed and a review

24 of the staffing, of in-service training, and,
932

•S 1956 PCS

1 if appropriate, of contracts with consult2 ants.

3 ‘‘(iv) CONSTRUCTION.—Nothing in

4 this paragraph shall be construed as re5 quiring an extended or partial extended

6 survey as a prerequisite to imposing a

7 sanction against a facility under subsection

8 (h) on the basis of findings in a standard

9 survey.

10 ‘‘(C) SURVEY PROTOCOL.—Standard and

11 extended surveys shall be conducted—

12 ‘‘(i) based upon the protocol which the

13 Secretary has developed, tested, and vali14 dated, as of the date of the enactment of

15 this title, and

16 ‘‘(ii) by individuals, of a survey team,

17 who meet such minimum qualifications as

18 the Secretary establishes.

19 ‘‘(D) CONSISTENCY OF SURVEYS.—Each

20 State shall implement programs to measure and

21 reduce inconsistency in the application of sur22 vey results among surveyors.

23 ‘‘(E) SURVEY TEAMS.—

24 ‘‘(i) IN GENERAL.—Surveys under

25 this subsection shall be conducted by a
933

•S 1956 PCS

1 multidisciplinary team of professionals (in2 cluding a registered professional nurse).

3 ‘‘(ii) PROHIBITION OF CONFLICTS OF

4 INTEREST.—A State may not use as a

5 member of a survey team under this sub6 section an individual who is serving (or has

7 served within the previous 2 years) as a

8 member of the staff of, or as a consultant

9 to, the facility surveyed respecting compli10 ance with the requirements of subsections

11 (b), (c), and (d), or who has a personal or

12 familial financial interest in the facility

13 being surveyed.

14 ‘‘(iii) TRAINING.—The Secretary shall

15 provide for the comprehensive training of

16 State and Federal surveyors in the conduct

17 of standard and extended surveys under

18 this subsection, including the auditing of

19 resident assessments and plans of care. No

20 individual shall serve as a member of a

21 survey team unless the individual has suc22 cessfully completed a training and testing

23 program in survey and certification tech24 niques that has been approved by the Sec25 retary.
934

•S 1956 PCS

1 ‘‘(3) VALIDATION SURVEYS.—

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

3 conduct onsite surveys of a representative sam4 ple of nursing facilities in each State, within 2

5 months of the date of surveys conducted under

6 paragraph (2) by the State, in a sufficient num7 ber to allow inferences about the adequacies of

8 each State’s surveys conducted under para9 graph (2). In conducting such surveys, the Sec10 retary shall use the same survey protocols as

11 the State is required to use under paragraph

12 (2). If the State has determined that an indi13 vidual nursing facility meets the requirements

14 of subsections (b), (c), and (d), but the Sec15 retary determines that the facility does not

16 meet such requirements, the Secretary’s deter17 mination as to the facility’s noncompliance with

18 such requirements is binding and supersedes

19 that of the State survey.

20 ‘‘(B) SCOPE.—With respect to each State,

21 the Secretary shall conduct surveys under sub22 paragraph (A) each year with respect to at least

23 5 percent of the number of nursing facilities

24 surveyed by the State in the year, but in no

25 case less than 5 nursing facilities in the State.
935

•S 1956 PCS

1 ‘‘(C) REDUCTION IN ADMINISTRATIVE

2 COSTS FOR SUBSTANDARD PERFORMANCE.—If

3 the Secretary finds, on the basis of such sur4 veys, that a State has failed to perform surveys

5 as required under paragraph (2) or that a

6 State’s survey and certification performance

7 otherwise is not adequate, the Secretary may

8 provide for the training of survey teams in the

9 State and shall provide for a reduction of the

10 payment otherwise made to the State under sec11 tion 1512(a)(3)(C) with respect to a quarter

12 equal to 33 percent multiplied by a fraction, the

13 denominator of which is equal to the total num14 ber of residents in nursing facilities surveyed by

15 the Secretary that quarter and the numerator

16 of which is equal to the total number of resi17 dents in nursing facilities which were found

18 pursuant to such surveys to be not in compli19 ance with any of the requirements of sub20 sections (b), (c), and (d). A State that is dissat21 isfied with the Secretary’s findings under this

22 subparagraph may obtain reconsideration and

23 review of the findings under section 1116 in the

24 same manner as a State may seek reconsider25 ation and review under that section of the Sec-
936

•S 1956 PCS

1 retary’s determination under section

2 1116(a)(1).

3 ‘‘(D) SPECIAL SURVEYS OF COMPLI4 ANCE.—Where the Secretary has reason to

5 question the compliance of a nursing facility

6 with any of the requirements of subsections (b),

7 (c), and (d), the Secretary may conduct a sur8 vey of the facility and, on the basis of that sur9 vey, make independent and binding determina10 tions concerning the extent to which the nurs11 ing facility meets such requirements.

12 ‘‘(4) INVESTIGATION OF COMPLAINTS AND MON13 ITORING NURSING FACILITY COMPLIANCE.—Each

14 State shall maintain procedures and adequate staff

15 to—

16 ‘‘(A) investigate complaints of violations of

17 requirements by nursing facilities, and

18 ‘‘(B) monitor, on-site, on a regular, as

19 needed basis, a nursing facility’s compliance

20 with the requirements of subsections (b), (c),

21 and (d), if—

22 ‘‘(i) the facility has been found not to

23 be in compliance with such requirements

24 and is in the process of correcting defi25 ciencies to achieve such compliance;
937

•S 1956 PCS

1 ‘‘(ii) the facility was previously found

2 not to be in compliance with such require3 ments, has corrected deficiencies to achieve

4 such compliance, and verification of contin5 ued compliance is indicated; or

6 ‘‘(iii) the State has reason to question

7 the compliance of the facility with such re8 quirements.

9 A State may maintain and utilize a specialized

10 team (including an attorney, an auditor, and

11 appropriate health care professionals) for the

12 purpose of identifying, surveying, gathering and

13 preserving evidence, and carrying out appro14 priate enforcement actions against substandard

15 nursing facilities.

16 ‘‘(5) DISCLOSURE OF RESULTS OF INSPECTIONS

17 AND ACTIVITIES.—

18 ‘‘(A) PUBLIC INFORMATION.—Each State,

19 and the Secretary, shall make available to the

20 public—

21 ‘‘(i) information respecting all surveys

22 and certifications made respecting nursing

23 facilities, including statements of defi24 ciencies, within 14 calendar days after
938

•S 1956 PCS

1 such information is made available to those

2 facilities, and approved plans of correction,

3 ‘‘(ii) copies of cost reports of such fa4 cilities filed under this title or under title

5 XVIII,

6 ‘‘(iii) copies of statements of owner7 ship under section 1124, and

8 ‘‘(iv) information disclosed under sec9 tion 1126.

10 ‘‘(B) NOTICE TO OMBUDSMAN.—Each

11 State shall notify the State long-term care om12 budsman (established under title III or VII of

13 the Older Americans Act of 1965 in accordance

14 with section 712 of the Act) of the State’s find15 ings of noncompliance with any of the require16 ments of subsections (b), (c), and (d), or of any

17 adverse action taken against a nursing facility

18 under paragraphs (1), (2), or (3) of subsection

19 (h), with respect to a nursing facility in the

20 State.

21 ‘‘(C) NOTICE TO PHYSICIANS AND NURS22 ING FACILITY ADMINISTRATOR LICENSING

23 BOARD.—If a State finds that a nursing facility

24 has provided substandard quality of care, the

25 State shall notify—
939

•S 1956 PCS

1 ‘‘(i) the attending physician of each

2 resident with respect to which such finding

3 is made, and

4 ‘‘(ii) any State board responsible for

5 the licensing of the nursing facility admin6 istrator of the facility.

7 ‘‘(D) ACCESS TO FRAUD CONTROL

8 UNITS.—Each State shall provide its State

9 fraud and abuse control unit (established under

10 section 1554) with access to all information of

11 the State agency responsible for surveys and

12 certifications under this subsection.

13 ‘‘(h) ENFORCEMENT PROCESS.—

14 ‘‘(1) IN GENERAL.—If a State finds, on the

15 basis of a standard, extended, or partial extended

16 survey under subsection (g)(2) or otherwise, that a

17 nursing facility no longer meets a requirement of

18 subsection (b), (c), or (d)—

19 ‘‘(A) the State shall require the facility to

20 correct the deficiency involved;

21 ‘‘(B) if the State finds that the facility’s

22 deficiencies immediately jeopardize the health

23 or safety of its residents, the State shall take

24 immediate action to remove the jeopardy and

25 correct the deficiencies through the remedy
940

•S 1956 PCS

1 specified in paragraph (2)(A)(iii), or terminate

2 the facility’s participation under the State plan

3 and may provide, in addition, for one or more

4 of the other remedies described in paragraph

5 (2); and

6 ‘‘(C) if the State finds that the facility’s

7 deficiencies do not immediately jeopardize the

8 health or safety of its residents, the State

9 may—

10 ‘‘(i) terminate the facility’s participa11 tion under the State plan,

12 ‘‘(ii) provide for one or more of the

13 remedies described in paragraph (2), or

14 ‘‘(iii) do both.

15 Nothing in this paragraph shall be construed as re16 stricting the remedies available to a State to remedy

17 a nursing facility’s deficiencies. If a State finds that

18 a nursing facility meets the requirements of sub19 sections (b), (c), and (d), but, as of a previous pe20 riod, did not meet such requirements, the State may

21 provide for a civil money penalty under paragraph

22 (2)(A)(ii) for the days in which it finds that the fa23 cility was not in compliance with such requirements.

24 ‘‘(2) SPECIFIED REMEDIES.—
941

•S 1956 PCS

1 ‘‘(A) LISTING.—Except as provided in sub2 paragraph (B), each State shall establish by law

3 (whether statute or regulation) at least the fol4 lowing remedies:

5 ‘‘(i) Denial of payment under the

6 State plan with respect to any individual

7 admitted to the nursing facility involved

8 after such notice to the public and to the

9 facility as may be provided for by the

10 State.

11 ‘‘(ii) A civil money penalty assessed

12 and collected, with interest, for each day in

13 which the facility is or was out of compli14 ance with a requirement of subsection (b),

15 (c), or (d). Funds collected by a State as

16 a result of imposition of such a penalty (or

17 as a result of the imposition by the State

18 of a civil money penalty for activities de19 scribed in subsections (b)(3)(B)(ii)(I),

20 (b)(3)(B)(ii)(II), or (g)(2)(A)(i)) shall be

21 applied to the protection of the health or

22 property of residents of nursing facilities

23 that the State or the Secretary finds defi24 cient, including payment for the costs of

25 relocation of residents to other facilities,
942

•S 1956 PCS

1 maintenance of operation of a facility

2 pending correction of deficiencies or clo3 sure, and reimbursement of residents for

4 personal funds lost.

5 ‘‘(iii) The appointment of temporary

6 management to oversee the operation of

7 the facility and to assure the health and

8 safety of the facility’s residents, where

9 there is a need for temporary management

10 while—

11 ‘‘(I) there is an orderly closure of

12 the facility, or

13 ‘‘(II) improvements are made in

14 order to bring the facility into compli15 ance with all the requirements of sub16 sections (b), (c), and (d).

17 The temporary management under this

18 clause shall not be terminated under sub19 clause (II) until the State has determined

20 that the facility has the management capa21 bility to ensure continued compliance with

22 all the requirements of subsections (b), (c),

23 and (d).

24 ‘‘(iv) The authority, in the case of an

25 emergency, to close the facility, to transfer
943

•S 1956 PCS

1 residents in that facility to other facilities,

2 or both.

3 The State also shall specify criteria, as to when

4 and how each of such remedies is to be applied,

5 the amounts of any fines, and the severity of

6 each of these remedies, to be used in the impo7 sition of such remedies. Such criteria shall be

8 designed so as to minimize the time between

9 the identification of violations and final imposi10 tion of the remedies and shall provide for the

11 imposition of incrementally more severe fines

12 for repeated or uncorrected deficiencies. In ad13 dition, the State may provide for other specified

14 remedies, such as directed plans of correction.

15 ‘‘(B) GUIDANCE AND ALTERNATIVE REM16 EDIES.—(i) The Secretary shall provide through

17 regulations guidance to States in establishing

18 remedies under clauses (i) through (iv) of sub19 paragraph (A).

20 ‘‘(ii) A State may establish alternative

21 remedies (other than termination of participa22 tion) other than those described in clauses (i)

23 through (iv) of subparagraph (A), if the State

24 demonstrates to the Secretary’s satisfaction

25 that the alternative remedies are as effective in
944

•S 1956 PCS

1 deterring noncompliance and correcting defi2 ciencies as those described in such subpara3 graph.

4 ‘‘(C) ASSURING PROMPT COMPLIANCE.—If

5 a nursing facility has not complied with any of

6 the requirements of subsections (b), (c), and

7 (d), within 3 months after the date the facility

8 is found to be out of compliance with such re9 quirements, the State shall impose the remedy

10 described in subparagraph (A)(i) for all individ11 uals who are admitted to the facility after such

12 date.

13 ‘‘(D) REPEATED NONCOMPLIANCE.—In the

14 case of a nursing facility which, on 3 consecu15 tive standard surveys conducted under sub16 section (g)(2), has been found to have provided

17 substandard quality of care, the State shall (re18 gardless of what other remedies are provided)—

19 ‘‘(i) impose the remedy described in

20 subparagraph (A)(i), and

21 ‘‘(ii) monitor the facility under sub22 section (g)(4)(B),

23 until the facility has demonstrated, to the satis24 faction of the State, that it is in compliance

25 with the requirements of subsections (b), (c),
945

•S 1956 PCS

1 and (d), and that it will remain in compliance

2 with such requirements.

3 ‘‘(E) FUNDING.—The reasonable expendi4 tures of a State to provide for temporary man5 agement and other expenses associated with im6 plementing the remedies described in clauses

7 (iii) and (iv) of subparagraph (A) shall be con8 sidered, for purposes of section 1512(a)(3)(C),

9 to be necessary for the proper and efficient ad10 ministration of the State plan.

11 ‘‘(F) INCENTIVES FOR HIGH QUALITY

12 CARE.—In addition to the remedies specified in

13 this paragraph, a State may establish a pro14 gram to reward, through public recognition, in15 centive payments, or both, nursing facilities

16 that provide the highest quality care to resi17 dents who are entitled to medical assistance

18 under this title. For purposes of section

19 1512(a)(3)(C), proper expenses incurred by a

20 State in carrying out such a program shall be

21 considered to be expenses necessary for the

22 proper and efficient administration of the State

23 plan.

24 ‘‘(3) SECRETARIAL AUTHORITY.—
946

•S 1956 PCS

1 ‘‘(A) FOR STATE NURSING FACILITIES.—

2 With respect to a State nursing facility, the

3 Secretary shall have the authority and duties of

4 a State under this subsection, including the au5 thority to impose remedies described in clauses

6 (i), (ii), and (iii) of paragraph (2)(A). Nothing

7 in this subparagraph shall be construed as re8 stricting the remedies available to the Secretary

9 to remedy a nursing facility’s deficiencies.

10 ‘‘(B) OTHER NURSING FACILITIES.—With

11 respect to any other nursing facility in a State,

12 if the Secretary finds that a nursing facility no

13 longer meets a requirement of subsection (b),

14 (c), (d), or (e), and further finds that the facili15 ty’s deficiencies—

16 ‘‘(i) immediately jeopardize the health

17 or safety of its residents, the Secretary

18 shall take immediate action to remove the

19 jeopardy and correct the deficiencies

20 through the remedy specified in subpara21 graph (C)(iii), or terminate the facility’s

22 participation under the State plan and

23 may provide, in addition, for one or more

24 of the other remedies described in subpara25 graph (C); or
947

•S 1956 PCS

1 ‘‘(ii) do not immediately jeopardize

2 the health or safety of its residents, the

3 Secretary may impose any of the remedies

4 described in subparagraph (C).

5 Nothing in this subparagraph shall be con6 strued as restricting the remedies available to

7 the Secretary to remedy a nursing facility’s de8 ficiencies. If the Secretary finds that a nursing

9 facility meets such requirements but, as of a

10 previous period, did not meet such require11 ments, the Secretary may provide for a civil

12 money penalty under subparagraph (C)(ii) for

13 the days on which he finds that the facility was

14 not in compliance with such requirements.

15 ‘‘(C) SPECIFIED REMEDIES.—The rem16 edies specified in this subparagraph are as fol17 lows:

18 ‘‘(i) DENIAL OF PAYMENT.—Denial of

19 any further payments to the State in ac20 cordance with section 1529(f) for medical

21 assistance furnished by the facility to all

22 individuals in the facility or to individuals

23 admitted to the facility after the effective

24 date of the finding.
948

•S 1956 PCS

1 ‘‘(ii) AUTHORITY WITH RESPECT TO

2 CIVIL MONEY PENALTIES.—Imposition of a

3 civil money penalty against the facility in

4 an amount not to exceed $10,000 for each

5 day of noncompliance. The provisions of

6 section 1128A (other than subsections (a)

7 and (b)) shall apply to a civil money pen8 alty under the previous sentence in the

9 same manner as such provisions apply to a

10 penalty or proceeding under section

11 1128A(a).

12 ‘‘(iii) APPOINTMENT OF TEMPORARY

13 MANAGEMENT.—Appointment of tem14 porary management to oversee the oper15 ation of the facility and to assure the

16 health and safety of the facility’s residents,

17 where there is a need for temporary man18 agement while—

19 ‘‘(I) there is an orderly closure of

20 the facility, or

21 ‘‘(II) improvements are made in

22 order to bring the facility into compli23 ance with all the requirements of sub24 sections (b), (c), and (d).
949

•S 1956 PCS

1 The temporary management under this

2 clause shall not be terminated under sub3 clause (II) until the Secretary has deter4 mined that the facility has the manage5 ment capability to ensure continued com6 pliance with all the requirements of sub7 sections (b), (c), and (d).

8 The Secretary shall specify criteria, as to when

9 and how each of such remedies is to be applied,

10 the amounts of any fines, and the severity of

11 each of these remedies, to be used in the impo12 sition of such remedies. Such criteria shall be

13 designed so as to minimize the time between

14 the identification of violations and final imposi15 tion of the remedies and shall provide for the

16 imposition of incrementally more severe fines

17 for repeated or uncorrected deficiencies. In ad18 dition, the Secretary may provide for other

19 specified remedies, such as directed plans of

20 correction.

21 ‘‘(D) CONTINUATION OF PAYMENTS PEND22 ING REMEDIATION.—The Secretary may con23 tinue payments, over a period of not longer

24 than 6 months after the effective date of the

25 findings, under this title with respect to a nurs-
950

•S 1956 PCS

1 ing facility not in compliance with a require2 ment of subsection (b), (c), or (d), if—

3 ‘‘(i) the State survey agency finds

4 that it is more appropriate to take alter5 native action to assure compliance of the

6 facility with the requirements than to ter7 minate the certification of the facility,

8 ‘‘(ii) the State has submitted a plan

9 and timetable for corrective action to the

10 Secretary for approval and the Secretary

11 approves the plan of corrective action, and

12 ‘‘(iii) the State agrees to repay to the

13 Federal Government payments received

14 under this subparagraph if the corrective

15 action is not taken in accordance with the

16 approved plan and timetable.

17 The Secretary shall establish guidelines for ap18 proval of corrective actions requested by States

19 under this subparagraph.

20 ‘‘(4) SPECIAL RULES REGARDING PAYMENTS TO

21 FACILITIES.—

22 ‘‘(A) CONTINUATION OF PAYMENTS PEND23 ING REMEDIATION.—The State or the Sec24 retary, as appropriate, may continue payments,

25 over a period of not longer than 6 months after
951

•S 1956 PCS

1 the effective date of the findings, under this

2 title with respect to a nursing facility not in

3 compliance with a requirement of subsection

4 (b), (c), or (d). The State may continue such

5 payments only if—

6 ‘‘(i) the State survey agency finds

7 that it is more appropriate to take alter8 native action to assure compliance of the

9 facility with the requirements than to ter10 minate the certification of the facility,

11 ‘‘(ii) the State has submitted a plan

12 and timetable for corrective action to the

13 Secretary for approval and the Secretary

14 approves the plan of corrective action, and

15 ‘‘(iii) the State agrees to repay to the

16 Federal Government payments received

17 under this subparagraph if the corrective

18 action is not taken in accordance with the

19 approved plan and timetable.

20 The Secretary shall establish guidelines for ap21 proval of corrective actions requested by States

22 under this subparagraph.

23 ‘‘(B) EFFECTIVE PERIOD OF DENIAL OF

24 PAYMENT.—A finding to deny payment under

25 this subsection shall terminate when the State
952

•S 1956 PCS

1 or Secretary (as the case may be) finds that the

2 facility is in substantial compliance with all the

3 requirements of subsections (b), (c), and (d).

4 ‘‘(5) IMMEDIATE TERMINATION OF PARTICIPA5 TION FOR FACILITY WHERE STATE OR SECRETARY

6 FINDS NONCOMPLIANCE AND IMMEDIATE JEOP7 ARDY.—If either the State or the Secretary finds

8 that a nursing facility has not met a requirement of

9 subsection (b), (c), or (d), and finds that the failure

10 immediately jeopardizes the health or safety of its

11 residents, the State or the Secretary, respectively

12 shall notify the other of such finding, and the State

13 or the Secretary, respectively, shall take immediate

14 action to remove the jeopardy and correct the defi15 ciencies through the remedy specified in paragraph

16 (2)(A)(iii) or (3)(C)(iii), or terminate the facility’s

17 participation under the State plan. If the facility’s

18 participation in the State plan is terminated by ei19 ther the State or the Secretary, the State shall pro20 vide for the safe and orderly transfer of the resi21 dents eligible under the State plan consistent with

22 the requirements of subsection (c)(2).

23 ‘‘(6) SPECIAL RULES WHERE STATE AND SEC24 RETARY DO NOT AGREE ON FINDING OF NON25 COMPLIANCE.—
953

•S 1956 PCS

1 ‘‘(A) STATE FINDING OF NONCOMPLIANCE

2 AND NO SECRETARIAL FINDING OF NONCOMPLI3 ANCE.—If the Secretary finds that a nursing

4 facility has met all the requirements of sub5 sections (b), (c), and (d), but a State finds that

6 the facility has not met such requirements and

7 the failure does not immediately jeopardize the

8 health or safety of its residents, the State’s

9 findings shall control and the remedies imposed

10 by the State shall be applied.

11 ‘‘(B) SECRETARIAL FINDING OF NON12 COMPLIANCE AND NO STATE FINDING OF NON13 COMPLIANCE.—If the Secretary finds that a

14 nursing facility has not met all the require15 ments of subsections (b), (c), and (d), and that

16 the failure does not immediately jeopardize the

17 health or safety of its residents, but the State

18 has not made such a finding, the Secretary—

19 ‘‘(i) may impose any remedies speci20 fied in paragraph (3)(C) with respect to

21 the facility, and

22 ‘‘(ii) shall (pending any termination

23 by the Secretary) permit continuation of

24 payments in accordance with paragraph

25 (3)(D).
954

•S 1956 PCS

1 ‘‘(7) SPECIAL RULES FOR TIMING OF TERMI2 NATION OF PARTICIPATION WHERE REMEDIES OVER3 LAP.—If both the Secretary and the State find that

4 a nursing facility has not met all the requirements

5 of subsections (b), (c), and (d), and neither finds

6 that the failure immediately jeopardizes the health

7 or safety of its residents—

8 ‘‘(A)(i) if both find that the facility’s par9 ticipation under the State plan should be termi10 nated, the State’s timing of any termination

11 shall control so long as the termination date

12 does not occur later than 6 months after the

13 date of the finding to terminate;

14 ‘‘(ii) if the Secretary, but not the State,

15 finds that the facility’s participation under the

16 State plan should be terminated, the Secretary

17 shall (pending any termination by the Sec18 retary) permit continuation of payments in ac19 cordance with paragraph (3)(D); or

20 ‘‘(iii) if the State, but not the Secretary,

21 finds that the facility’s participation under the

22 State plan should be terminated, the State’s de23 cision to terminate, and timing of such termi24 nation, shall control; and
955

•S 1956 PCS

1 ‘‘(B)(i) if the Secretary or the State, but

2 not both, establishes one or more remedies

3 which are additional or alternative to the rem4 edy of terminating the facility’s participation

5 under the State plan, such additional or alter6 native remedies shall also be applied, or

7 ‘‘(ii) if both the Secretary and the State

8 establish one or more remedies which are addi9 tional or alternative to the remedy of terminat10 ing the facility’s participation under the State

11 plan, only the additional or alternative remedies

12 of the Secretary shall apply.

13 ‘‘(8) CONSTRUCTION.—The remedies provided

14 under this subsection are in addition to those other15 wise available under Federal or State law and shall

16 not be construed as limiting such other remedies, in17 cluding any remedy available to an individual at

18 common law. The remedies described in clauses (i),

19 (iii), and (iv) of paragraph (2)(A) may be imposed

20 during the pendency of any hearing. The provisions

21 of this subsection shall apply to a nursing facility (or

22 portion thereof) notwithstanding that the facility (or

23 portion thereof) also is a skilled nursing facility for

24 purposes of title XVIII.
956

•S 1956 PCS

1 ‘‘(9) SHARING OF INFORMATION.—Notwith2 standing any other provision of law, all information

3 concerning nursing facilities required by this section

4 to be filed with the Secretary or a State agency shall

5 be made available by such facilities to Federal or

6 State employees for purposes consistent with the ef7 fective administration of programs established under

8 this title and title XVIII, including investigations by

9 State fraud control units.

10 ‘‘(i) CONSTRUCTION.—Where requirements or obliga11 tions under this section are identical to those provided

12 under section 1819 of this Act, the fulfillment of those

13 requirements or obligations under section 1819 shall be

14 considered to be the fulfillment of the corresponding re15 quirements or obligations under this section.

16 ‘‘(j) REPORT.—Not later than 2 years after the date

17 of the enactment of the Medicaid Restructuring Act of

18 1996, and annually thereafter, the Secretary shall submit

19 a report to the Congress analyzing—

20 ‘‘(1) the differences between the reimbursement

21 rates established under the State plan under this

22 title, and the reimbursement rates that applied

23 under the State plan under title XIX (as in effect

24 on the date of the enactment of such Act) for nurs-
957

•S 1956 PCS

1 ing facility services and other medical assistance

2 provided by such facilities; and

3 ‘‘(2) whether and how such differences have af4 fected the quality of such services or assistance.

5 ‘‘SEC. 1558. OTHER PROVISIONS PROMOTING PROGRAM IN6 TEGRITY.

7 ‘‘(a) PUBLIC ACCESS TO SURVEY RESULTS.—Each

8 State plan shall provide that upon completion of a survey

9 of any health care facility or organization by a State agen10 cy to carry out the plan, the agency shall make public in

11 readily available form and place the pertinent findings of

12 the survey relating to the compliance of the facility or or13 ganization with requirements of law.

14 ‘‘(b) RECORD KEEPING.—Each State plan shall pro15 vide for agreements with persons or institutions providing

16 services under the plan under which the person or institu17 tion agrees—

18 ‘‘(1) to keep such records, including ledgers,

19 books, and original evidence of costs, as are nec20 essary to fully disclose the extent of the services pro21 vided to individuals receiving assistance under the

22 plan, and

23 ‘‘(2) to furnish the State agency with such in24 formation regarding any payments claimed by such

25 person or institution for providing services under the
958

•S 1956 PCS

1 plan, as the State agency may from time to time re2 quest.

3 ‘‘(c) QUALITY ASSURANCE.—

4 ‘‘(1) IN GENERAL.—Each State plan shall pro5 vide a program to—

6 ‘‘(A) ensure the quality of services pro7 vided under the plan, including such services

8 provided to individuals with chronic mental or

9 physical illness; and

10 ‘‘(B) measure, evaluate, and improve the

11 quality of care delivered under such plan, in12 cluding services delivered by a capitated health

13 care organization or through a primary care

14 case management provider.

15 ‘‘(2) ESTABLISHMENT OF MINIMUM STANDARDS

16 FOR SERVICES FOR INDIVIDUALS WITH DEVEL17 OPMENTAL DISABILITIES.—

18 ‘‘(A) IN GENERAL.—The Secretary, in con19 sultation with the States, shall establish, mon20 itor, and enforce minimum health, safety, and

21 welfare standards for eligible low-income indi22 viduals with developmental disabilities who re23 ceive intermediate care facility services for the

24 mentally retarded, home and community-based

25 health care services and related supportive serv-
959

•S 1956 PCS

1 ices, community supported living arrangements,

2 assisted living arrangements, and transitional

3 living arrangements in the community. Such

4 standards shall ensure that individuals receiving

5 such services are protected from neglect, phys6 ical and sexual abuse, financial exploitation, in7 appropriate involuntary restraint, and the pro8 vision of health care services by unqualified per9 sonnel.

10 ‘‘(B) PUBLIC PARTICIPATION.—The State

11 plan shall contain provisions that ensure the in12 volvement of consumers, family members, and

13 the local community in planning the provision

14 of such services to such individuals and ensur15 ing the quality assurance of such services.

16 ‘‘(d) PROHIBITION AGAINST CONFLICTS OF INTER17 EST.—Each State plan shall provide that each State or

18 local officer or employee who is responsible for the expend19 iture of substantial amounts of funds under the State

20 plan, each individual who formerly was such an officer or

21 employee, and each partner of such an officer or employee

22 shall be prohibited from committing any act, in relation

23 to any activity under the plan, the commission of which,

24 in connection with any activity concerning the United

25 States Government, by an officer or employee of the Unit-
960

•S 1956 PCS

1 ed States Government, an individual who was such an offi2 cer or employee, or a partner of such an officer or em3 ployee is prohibited by section 207 or 208 of title 18, Unit4 ed States Code.

5 ‘‘(e) NONDISCRIMINATION PROVISIONS.—Any pro6 gram or activity that receives funds under this part shall

7 be subject to enforcement authorized under the following

8 provisions of law:

9 ‘‘(1) The Age Discrimination Act of 1975 (42

10 U.S.C. 6101 et seq.).

11 ‘‘(2) Section 504 of the Rehabilitation Act of

12 1973 (29 U.S.C. 794).

13 ‘‘(3) The Americans with Disabilities Act of

14 1990 (42 U.S.C. 12101 et seq.).

15 ‘‘(4) Title VI of the Civil Rights Act of 1964

16 (42 U.S.C. 2000d et seq.).

17 ‘‘PART E—GENERAL PROVISIONS

18 ‘‘SEC. 1571. DEFINITIONS.

19 ‘‘(a) MEDICAL ASSISTANCE.—For purposes of this

20 title, the term ‘medical assistance’ means payment of part

21 or all of the cost of any of the following, or assistance

22 in the purchase, in whole or in part, of health benefit cov23 erage that includes any of the following, for eligible low24 income individuals (as defined in subsection (b)) as speci25 fied under the State plan:
961

•S 1956 PCS

1 ‘‘(1) Inpatient hospital services.

2 ‘‘(2) Outpatient hospital services.

3 ‘‘(3) Physician services.

4 ‘‘(4) Surgical services.

5 ‘‘(5) Clinic services and other ambulatory

6 health care services.

7 ‘‘(6) Nursing facility services.

8 ‘‘(7) Intermediate care facility services for the

9 mentally retarded.

10 ‘‘(8) Prescription drugs and biologicals and the

11 administration of such drugs and biologicals, only if

12 such drugs and biologicals are not furnished for the

13 purpose of causing, or assisting in causing, the

14 death, suicide, euthanasia, or mercy killing of a per15 son.

16 ‘‘(9) Over-the-counter medications.

17 ‘‘(10) Laboratory and radiological services.

18 ‘‘(11) Prepregnancy family planning services

19 and supplies.

20 ‘‘(12) Inpatient mental health services, includ21 ing services furnished in a State-operated mental

22 hospital, and residential or other 24-hour therapeuti23 cally planned structured services, except that for in24 dividuals not less than age 22 and not more than
962

•S 1956 PCS

1 age 64, such services shall be limited to acute serv2 ices only.

3 ‘‘(13) Outpatient and intensive community4 based mental health services, including psychiatric

5 rehabilitation, day treatment, intensive in-home serv6 ices for children, and partial hospitalization.

7 ‘‘(14) Durable medical equipment and other

8 medically-related or remedial devices (such as pros9 thetic devices, implants, eyeglasses, hearing aids,

10 dental devices, and adaptive devices).

11 ‘‘(15) Disposable medical supplies.

12 ‘‘(16) Home and community-based health care

13 services and related supportive services (such as

14 home health nursing services, home health aide serv15 ices, personal care, assistance with activities of daily

16 living, chore services, day care services, respite care

17 services, training for family members, and minor

18 modifications to the home).

19 ‘‘(17) Community supported living arrange20 ments, assisted living arrangements, and transitional

21 living arrangements in the community.

22 ‘‘(18) Nursing care services (such as nurse

23 practitioner services, nurse midwife services, ad24 vanced practice nurse services, private duty nursing
963

•S 1956 PCS

1 care, pediatric nurse services, and respiratory care

2 services) in a home, school, or other setting.

3 ‘‘(19) Abortion only if necessary to save the life

4 of the mother or if the pregnancy is the result of an

5 act of rape or incest.

6 ‘‘(20) Dental services.

7 ‘‘(21) Inpatient substance abuse treatment

8 services and residential substance abuse treatment

9 services.

10 ‘‘(22) Outpatient substance abuse treatment

11 services.

12 ‘‘(23) Case management services.

13 ‘‘(24) Care coordination services.

14 ‘‘(25) Physical therapy, occupational therapy,

15 and services for individuals with speech, hearing,

16 and language disorders.

17 ‘‘(26) Hospice care.

18 ‘‘(27) Any other medical, diagnostic, screening,

19 preventive, restorative, remedial, therapeutic, or re20 habilitative services (whether in a facility, home,

21 school, or other setting) if recognized by State law

22 and only if the service is—

23 ‘‘(A) prescribed by or furnished by a physi24 cian or other licensed or registered practitioner
964

•S 1956 PCS

1 within the scope of practice as defined by State

2 law,

3 ‘‘(B) performed under the general super4 vision or at the direction of a physician, or

5 ‘‘(C) furnished by a health care facility

6 that is operated by a State or local government

7 or is licensed under State law and operating

8 within the scope of the license.

9 ‘‘(28) Premiums, or capitation payments (as de10 fined in section 1504(e)(2)) for private health care

11 insurance coverage, including private long-term care

12 insurance coverage.

13 ‘‘(29) Medical transportation.

14 ‘‘(30) Medicare cost-sharing (as defined in sub15 section (c)).

16 ‘‘(31) Enabling services (such as transpor17 tation, translation, and outreach services) only if de18 signed to increase the accessibility of primary and

19 preventive health care services for eligible low-in20 come individuals.

21 ‘‘(32) Federally-qualified health center services

22 (as defined in subsection (f)(2)(A)), capitation pay23 ments (as defined in section 1504(e)(2)) provided by

24 a State to a capitated health care organization which

25 is (or is controlled by, as determined under section
965

•S 1956 PCS

1 1504(a)(4)) one or more Federally-qualified health

2 centers (as defined in subsection (f)(2)(B)), and

3 supplemental payments to a Federally-qualified

4 health center (as so defined) that participates in a

5 capitated health care organization which is (or is

6 controlled by, as determined under section

7 1504(a)(4)) one or more Federally-qualified health

8 centers (as so defined).

9 ‘‘(33) Rural health clinic services (as defined in

10 subsection (f)(1)), capitation payments (as defined

11 in section 1504(e)(2)) provided by a State to a

12 capitated health care organization which is (or is

13 controlled by, as determined under section

14 1504(a)(4)) one or more rural health clinics (as de15 fined in subsection (f)(1)), and supplemental pay16 ments to a rural health clinic (as so defined) that

17 participates in a capitated health care organization

18 which is (or is controlled by, as determined under

19 section 1504(a)(4)) one or more rural health clinics

20 (as so defined).

21 ‘‘(34) Physician assistant services (to the extent

22 such services are authorized under State law or reg23 ulation).
966

•S 1956 PCS

1 ‘‘(35) Any other health care services or items

2 specified by the Secretary and not excluded under

3 this section.

4 ‘‘(b) ELIGIBLE LOW-INCOME INDIVIDUAL.—

5 ‘‘(1) STATE PLAN ELIGIBILITY STANDARDS.—

6 ‘‘(A) IN GENERAL.—The term ‘eligible low7 income individual’ means an individual—

8 ‘‘(i) who has been determined eligible

9 by the State for medical assistance under

10 the State plan and is not an inmate of a

11 public institution (except as a patient in a

12 State psychiatric hospital), and

13 ‘‘(ii) whose family income (as deter14 mined under the plan) does not exceed a

15 percentage (specified in the State plan and

16 not to exceed 275 percent) of the poverty

17 line for a family of the size involved.

18 ‘‘(B) CONTINUATION OF KATIE BECKETT

19 ELIGIBILITY.—At the option of a State, sub20 paragraph (A)(ii) shall not apply in the case of

21 an individual who—

22 ‘‘(i) is 18 years of age or younger and

23 qualifies as a disabled individual under sec24 tion 1614(a); and
967

•S 1956 PCS

1 ‘‘(ii) with respect to whom there has

2 been a determination by the State that—

3 ‘‘(I) the individual requires a

4 level of care provided in a hospital,

5 nursing facility, or intermediate care

6 facility for the mentally retarded; and

7 ‘‘(II) it is appropriate to provide

8 such care for the individual outside

9 such an institution.

10 ‘‘(2) AMOUNT OF INCOME.—In determining the

11 amount of income under paragraph (1)(B), a State

12 may exclude costs incurred for medical care or other

13 types of remedial care recognized by the State.

14 ‘‘(3) COMPUTATION OF INCOME FOR CERTAIN

15 CHILDREN.—In determining the amount of family

16 income under paragraph (1)(B) in the case of a

17 child described in section 1501(a)(1)(F), the State

18 shall only count the income of the child and not that

19 of the family in which the child is placed.

20 ‘‘(c) MEDICARE COST-SHARING.—For purposes of

21 this title, the term ‘medicare cost-sharing’ means any of

22 the following:

23 ‘‘(1)(A) Premiums under section 1839.

24 ‘‘(B) Premiums under section 1818 or 1818A.
968

•S 1956 PCS

1 ‘‘(2) Coinsurance under title XVIII (including

2 coinsurance described in section 1813).

3 ‘‘(3) Deductibles established under title XVIII

4 (including those described in sections 1813 and

5 1833(b)).

6 ‘‘(4) The difference between the amount that is

7 paid under section 1833(a) and the amount that

8 would be paid under such section if any reference to

9 ‘80 percent’ therein were deemed a reference to ‘100

10 percent’.

11 ‘‘(5) Premiums for enrollment of an individual

12 with an eligible organization under section 1876.

13 ‘‘(d) ADDITIONAL DEFINITIONS.—For purposes of

14 this title:

15 ‘‘(1) CHILD.—The term ‘child’ means an indi16 vidual under 19 years of age.

17 ‘‘(2) ELDERLY INDIVIDUAL.—The term ‘elderly

18 individual’ means an individual who has attained re19 tirement age, as defined under section 216(l)(1).

20 ‘‘(3) POVERTY LINE DEFINED.—The term ‘pov21 erty line’ has the meaning given such term in section

22 673(2) of the Community Services Block Grant Act

23 (42 U.S.C. 9902(2)), including any revision required

24 by such section.
969

•S 1956 PCS

1 ‘‘(4) PREGNANT WOMAN.—The term ‘pregnant

2 woman’ includes a woman during the 60-day period

3 beginning on the last day of the pregnancy.

4 ‘‘(e) EPSDT SERVICES.—In this title, the term

5 ‘EPSDT services’ means ‘early and periodic screening, di6 agnostic, and treatment services’ as defined in section

7 1905(r) (as in effect on June 1, 1996).

8 ‘‘(f) CENTER AND CLINIC SERVICES.—In this title:

9 ‘‘(1) RURAL HEALTH CLINIC RELATED DEFINI10 TIONS.—The terms ‘rural health clinic services’ and

11 ‘rural health clinic’ have the meanings given such

12 terms in section 1861(aa), except that (A) clause (ii)

13 of section 1861(aa)(2) shall not apply to such terms,

14 and (B) the physician arrangement required under

15 section 1861(aa)(2)(B) shall only apply with respect

16 to rural health clinic services and, with respect to

17 other ambulatory care services, the physician ar18 rangement required shall be only such as may be re19 quired under the State plan for those services.

20 ‘‘(2) FEDERALLY-QUALIFIED HEALTH CENTER

21 RELATED DEFINITIONS.—

22 ‘‘(A) SERVICES.—

23 ‘‘(i) IN GENERAL.—The term ‘Feder24 ally-qualified health center services’ means
970

•S 1956 PCS

1 services of the type described in subpara2 graphs (A) through (C) of section

3 1861(aa)(1), and any other ambulatory

4 care services which are otherwise included

5 in the State plan, when furnished to an in6 dividual as a patient of a Federally-quali7 fied health center and, for this purpose,

8 any reference to a rural health clinic or a

9 physician described in section

10 1861(aa)(2)(B) is deemed a reference to a

11 Federally-qualified health center or a phy12 sician at the center, respectively.

13 ‘‘(ii) CERTAIN SUPPLEMENTAL PAY14 MENTS INCLUDED.—

15 ‘‘(B) CENTER.—The term ‘Federally-quali16 fied health center’ means a entity which—

17 ‘‘(i) is receiving a grant under section

18 329, 330, 340, or 340A of the Public

19 Health Service Act,

20 ‘‘(ii)(I) is receiving funding from such

21 a grant under a contract with the recipient

22 of such a grant, and

23 ‘‘(II) meets the requirements to re24 ceive a grant under section 329, 330, 340,

25 or 340A of such Act,
971

•S 1956 PCS

1 ‘‘(iii) based on the recommendation of

2 the Health Resources and Services Admin3 istration within the Public Health Service,

4 is determined by the Secretary to meet the

5 requirements for receiving such a grant, or

6 ‘‘(iv) was treated by the Secretary, for

7 purposes of part B of title XVIII, as a

8 comprehensive Federally funded health

9 center as of January 1, 1990;

10 and includes an outpatient health program or

11 facility operated by a tribe or tribal organiza12 tion under the Indian Self-Determination Act

13 (Public Law 93-638) or by an urban Indian or14 ganization receiving funds under title V of the

15 Indian Health Care Improvement Act for the

16 provision of primary health services. In apply17 ing clause (ii), the Secretary may waive any re18 quirement referred to in such clause for up to

19 2 years for good cause shown.

20 ‘‘(g) MEDICALLY-RELATED SERVICES.—In this title,

21 the term ‘medically-related services’ means services rea22 sonably related to, or in direct support of, the State’s at23 tainment of one or more of the strategic objectives and

24 performance goals established under section 1521, but
972

•S 1956 PCS

1 does not include items and services included on the list

2 under subsection (a).

3 ‘‘SEC. 1572. TREATMENT OF TERRITORIES.

4 ‘‘Notwithstanding any other requirement of this title,

5 the Secretary may waive or modify any requirement of this

6 title with respect to the medical assistance program for

7 a State other than the 50 States and the District of Co8 lumbia, other than a waiver of—

9 ‘‘(1) the applicable Federal medical assistance

10 percentage,

11 ‘‘(2) the limitation on total payments in a fiscal

12 year to the amount of the allotment under section

13 1511(c), or

14 ‘‘(3) the requirement that payment may be

15 made for medical assistance only with respect to

16 amounts expended by the State for care and services

17 described in section 1571(a) and medically-related

18 services (as defined in section 1571(g)).

19 ‘‘SEC. 1573. DESCRIPTION OF TREATMENT OF INDIAN

20 HEALTH SERVICE FACILITIES AND RELATED

21 PROGRAMS.

22 ‘‘In the case of a State in which one or more facilities

23 of the Indian Health Service is located or in which a facil24 ity or program described in section 1512(f)(3)(iii) is lo25 cated, the State plan shall include a description of—
973

•S 1956 PCS

1 ‘‘(1) what provision (if any) has been made for

2 payment for items and services furnished by such fa3 cilities or through such programs, and

4 ‘‘(2) the manner in which medical assistance for

5 low-income eligible individuals who are Indians will

6 be provided, as determined by the State in consulta7 tion with the appropriate Indian tribes and tribal or8 ganizations.

9 ‘‘SEC. 1574. APPLICATION OF CERTAIN GENERAL PROVI10 SIONS.

11 ‘‘The following sections in part A of title XI shall

12 apply to States under this title in the same manner as

13 they applied to a State under title XIX:

14 ‘‘(1) Section 1101(a)(1) (relating to definition

15 of State).

16 ‘‘(2) Section 1116 (relating to administrative

17 and judicial review), but only insofar as consistent

18 with the provisions of part B.

19 ‘‘(3) Section 1124 (relating to disclosure of

20 ownership and related information).

21 ‘‘(4) Section 1126 (relating to disclosure of in22 formation about certain convicted individuals).

23 ‘‘(5) Section 1128B(d) (relating to criminal

24 penalties for certain additional charges).
974

•S 1956 PCS

1 ‘‘(6) Section 1132 (relating to periods within

2 which claims must be filed).

3 ‘‘SEC. 1575. OPTIONAL MASTER DRUG REBATE AGREE4 MENTS.

5 ‘‘(a) REQUIREMENT FOR MANUFACTURER TO ENTER

6 INTO AGREEMENT.—

7 ‘‘(1) IN GENERAL.—Pursuant to section

8 1513(f), in order for payment to be made to a State

9 under part B for medical assistance for covered out10 patient drugs of a manufacturer, the manufacturer

11 shall enter into and have in effect a master rebate

12 agreement described in subsection (b) with the Sec13 retary on behalf of States electing to participate in

14 the agreement.

15 ‘‘(2) COVERAGE OF DRUGS NOT COVERED

16 UNDER REBATE AGREEMENTS.—Nothing in this sec17 tion shall be construed to prohibit a State in its dis18 cretion from providing coverage under its State plan

19 of a covered outpatient drug for which no rebate

20 agreement is in effect under this section.

21 ‘‘(3) EFFECT ON EXISTING AGREEMENTS.—If a

22 State has a rebate agreement in effect with a manu23 facturer on the date of the enactment of this section

24 which provides for a minimum aggregate rebate

25 equal to or greater than the minimum aggregate re-
975

•S 1956 PCS

1 bate which would otherwise be paid under the mas2 ter agreement under this section, at the option of

3 the State—

4 ‘‘(A) such agreement shall be considered to

5 meet the requirements of the master rebate

6 agreement, and

7 ‘‘(B) the State shall be considered to have

8 elected to participate in the master rebate

9 agreement.

10 ‘‘(4) LIMITATION ON PRICES OF DRUGS PUR11 CHASED BY COVERED ENTITIES.—

12 ‘‘(A) AGREEMENT WITH SECRETARY.—A

13 manufacturer meets the requirements of this

14 paragraph if the manufacturer has entered into

15 an agreement with the Secretary that meets the

16 requirements of section 340B of the Public

17 Health Service Act with respect to covered out18 patient drugs purchased by a covered entity on

19 or after the first day of the first month that be20 gins after the date of the enactment of title VI

21 of the Veterans Health Care Act of 1992.

22 ‘‘(B) COVERED ENTITY DEFINED.—In this

23 subsection, the term ‘covered entity’ means an

24 entity described in subsection (a)(4) of section

25 340B of the Public Health Service Act.
976

•S 1956 PCS

1 ‘‘(C) ESTABLISHMENT OF ALTERNATIVE

2 MECHANISM TO ENSURE AGAINST DUPLICATE

3 DISCOUNTS OR REBATES.—If the Secretary

4 does not establish a mechanism under section

5 340B(a)(5)(A) of the Public Health Service Act

6 within 12 months of the date of the enactment

7 of such section, the following requirements shall

8 apply:

9 ‘‘(i) Each covered entity shall inform

10 the single State agency under this title

11 when it is seeking reimbursement for medi12 cal assistance with respect to a unit of any

13 covered outpatient drug which is subject to

14 an agreement under section 340B(a) of

15 such Act.

16 ‘‘(ii) Each such single State agency

17 shall provide a means by which a covered

18 entity shall indicate on any drug reim19 bursement claims form (or format, where

20 electronic claims management is used) that

21 a unit of the drug that is the subject of the

22 form is subject to an agreement under sec23 tion 340B of such Act, and not submit to

24 any manufacturer a claim for a rebate pay-
977

•S 1956 PCS

1 ment under subsection (b) with respect to

2 such a drug.

3 ‘‘(D) EFFECT OF SUBSEQUENT AMEND4 MENTS.—In determining whether an agreement

5 under subparagraph (A) meets the require6 ments of section 340B of the Public Health

7 Service Act, the Secretary shall not take into

8 account any amendments to such section that

9 are enacted after the enactment of title VI of

10 the Veterans Health Care Act of 1992.

11 ‘‘(E) DETERMINATION OF COMPLIANCE.—

12 A manufacturer is deemed to meet the require13 ments of this paragraph if the manufacturer es14 tablishes to the satisfaction of the Secretary

15 that the manufacturer would comply (and has

16 offered to comply) with the provisions of section

17 340B of the Public Health Service Act (as in

18 effect immediately after the enactment title VI

19 of the Veterans Health Care Act of 1992, and

20 would have entered into an agreement under

21 such section (as such section was in effect at

22 such time), but for a legislative change in such

23 section after such enactment.

24 ‘‘(b) TERMS OF REBATE AGREEMENT.—
978

•S 1956 PCS

1 ‘‘(1) PERIODIC REBATES.—The master rebate

2 agreement under this section shall require the manu3 facturer to provide, to the State plan of each State

4 participating in the agreement, a rebate for a rebate

5 period in an amount specified in subsection (c) for

6 covered outpatient drugs of the manufacturer dis7 pensed after the effective date of the agreement, for

8 which payment was made under the plan for such

9 period. Such rebate shall be paid by the manufac10 turer not later than 30 days after the date of receipt

11 of the information described in paragraph (2) for

12 the period involved.

13 ‘‘(2) STATE PROVISION OF INFORMATION.—

14 ‘‘(A) STATE RESPONSIBILITY.—Each State

15 participating in the master rebate agreement

16 shall report to each manufacturer not later

17 than 60 days after the end of each rebate pe18 riod and in a form consistent with a standard

19 reporting format established by the Secretary,

20 information on the total number of units of

21 each dosage form and strength and package

22 size of each covered outpatient drug, for which

23 payment was made under the State plan for the

24 period, and shall promptly transmit a copy of

25 such report to the Secretary.
979

•S 1956 PCS

1 ‘‘(B) AUDITS.—A manufacturer may audit

2 the information provided (or required to be pro3 vided) under subparagraph (A). Adjustments to

4 rebates shall be made to the extent that infor5 mation indicates that utilization was greater or

6 less than the amount previously specified.

7 ‘‘(3) MANUFACTURER PROVISION OF PRICE IN8 FORMATION.—

9 ‘‘(A) IN GENERAL.—Each manufacturer

10 which is subject to the master rebate agreement

11 under this section shall report to the Sec12 retary—

13 ‘‘(i) not later than 30 days after the

14 last day of each rebate period under the

15 agreement, on the average manufacturer

16 price (as defined in subsection (i)(1)) and,

17 for single source drugs and innovator mul18 tiple source drugs, the manufacturer’s best

19 price (as defined in subsection (c)(1)(C))

20 for each covered outpatient drug for the

21 rebate period under the agreement, and

22 ‘‘(ii) not later than 30 days after the

23 date of entering into an agreement under

24 this section, on the average manufacturer

25 price (as defined in subsection (i)(1)) as of
980

•S 1956 PCS

1 October 1, 1990, for each of the manufac2 turer’s covered outpatient drugs.

3 ‘‘(B) VERIFICATION SURVEYS OF AVERAGE

4 MANUFACTURER PRICE.—The Secretary may

5 survey wholesalers and manufacturers that di6 rectly distribute their covered outpatient drugs,

7 when necessary, to verify manufacturer prices

8 reported under subparagraph (A). The Sec9 retary may impose a civil monetary penalty in

10 an amount not to exceed $10,000 on a whole11 saler, manufacturer, or direct seller, if the

12 wholesaler, manufacturer, or direct seller of a

13 covered outpatient drug refuses a request for

14 information by the Secretary in connection with

15 a survey under this subparagraph. The provi16 sions of section 1128A (other than subsections

17 (a) (with respect to amounts of penalties or ad18 ditional assessments) and (b)) shall apply to a

19 civil money penalty under this subparagraph in

20 the same manner as such provisions apply to a

21 penalty or proceeding under section 1128A(a).

22 ‘‘(C) PENALTIES.—

23 ‘‘(i) FAILURE TO PROVIDE TIMELY IN24 FORMATION.—In the case of a manufac25 turer which is subject to the master rebate
981

•S 1956 PCS

1 agreement that fails to provide information

2 required under subparagraph (A) on a

3 timely basis, the amount of the penalty

4 shall be $10,000 for each day in which

5 such information has not been provided

6 and such amount shall be paid to the

7 Treasury. If such information is not re8 ported within 90 days of the deadline im9 posed, the agreement shall be suspended

10 for services furnished after the end of such

11 90-day period and until the date such in12 formation is reported (but in no case shall

13 such suspension be for a period of less

14 than 30 days).

15 ‘‘(ii) FALSE INFORMATION.—Any

16 manufacturer which is subject to the mas17 ter rebate agreement, or a wholesaler or

18 direct seller, that knowingly provides false

19 information under subparagraph (A) or

20 (B) is subject to a civil money penalty in

21 an amount not to exceed $100,000 for

22 each item of false information. Any such

23 civil money penalty shall be in addition to

24 other penalties as may be prescribed by

25 law. The provisions of section 1128A
982

•S 1956 PCS

1 (other than subsections (a) and (b)) shall

2 apply to a civil money penalty under this

3 subparagraph in the same manner as such

4 provisions apply to a penalty or proceeding

5 under section 1128A(a).

6 ‘‘(D) CONFIDENTIALITY OF INFORMA7 TION.—Notwithstanding any other provision of

8 law, information disclosed by manufacturers or

9 wholesalers under this paragraph or under an

10 agreement with the Secretary of Veterans Af11 fairs described in section 1513(f) is confidential

12 and shall not be disclosed by the Secretary or

13 the Secretary of Veterans Affairs or a State

14 agency (or contractor therewith) in a form

15 which discloses the identity of a specific manu16 facturer or wholesaler or the prices charged for

17 drugs by such manufacturer or wholesaler, ex18 cept—

19 ‘‘(i) as the Secretary determines to be

20 necessary to carry out this section,

21 ‘‘(ii) to permit the Comptroller Gen22 eral to review the information provided,

23 and
983

•S 1956 PCS

1 ‘‘(iii) to permit the Director of the

2 Congressional Budget Office to review the

3 information provided.

4 ‘‘(4) LENGTH OF AGREEMENT.—

5 ‘‘(A) IN GENERAL.—The master rebate

6 agreement under this section shall be effective

7 for an initial period of not less than 1 year and

8 shall be automatically renewed for a period of

9 not less than 1 year unless terminated under

10 subparagraph (B).

11 ‘‘(B) TERMINATION.—

12 ‘‘(i) BY THE SECRETARY.—The Sec13 retary may provide for termination of the

14 master rebate agreement with respect to a

15 manufacturer for violation of the require16 ments of the agreement or other good

17 cause shown. Such termination shall not be

18 effective earlier than 60 days after the

19 date of notice of such termination. The

20 Secretary shall provide, upon request, a

21 manufacturer with a hearing concerning

22 such a termination, but such hearing shall

23 not delay the effective date of the termi24 nation. Failure of a State to provide any

25 advance notice of such a termination as re-
984

•S 1956 PCS

1 quired by regulation shall not affect the

2 State’s right to terminate coverage of the

3 drugs affected by such termination as of

4 the effective date of such termination.

5 ‘‘(ii) BY A MANUFACTURER.—A man6 ufacturer may terminate its participation

7 in the master rebate agreement under this

8 section for any reason. Any such termi9 nation shall not be effective until the cal10 endar quarter beginning at least 60 days

11 after the date the manufacturer provides

12 notice to the Secretary.

13 ‘‘(iii) EFFECTIVENESS OF TERMI14 NATION.—Any termination under this sub15 paragraph shall not affect rebates due

16 under the agreement before the effective

17 date of its termination.

18 ‘‘(iv) NOTICE TO STATES.—In the

19 case of a termination under this subpara20 graph, the Secretary shall provide notice of

21 such termination to the States within not

22 less than 30 days before the effective date

23 of such termination.

24 ‘‘(v) APPLICATION TO TERMINATIONS

25 OF OTHER AGREEMENTS.—The provisions
985

•S 1956 PCS

1 of this subparagraph shall apply to the ter2 minations of master agreements described

3 in section 8126(a) of title 38, United

4 States Code.

5 ‘‘(C) DELAY BEFORE REENTRY.—In the

6 case of any rebate agreement with a manufac7 turer under this section which is terminated,

8 another such agreement with the manufacturer

9 (or a successor manufacturer) may not be en10 tered into until a period of 1 calendar quarter

11 has elapsed since the date of the termination,

12 unless the Secretary finds good cause for an

13 earlier reinstatement of such an agreement.

14 ‘‘(5) SETTLEMENT OF DISPUTES.—

15 ‘‘(A) SECRETARY.—The Secretary shall

16 have the authority to resolve, settle, and com17 promise disputes regarding the amounts of re18 bates owed under this section and section 1927.

19 ‘‘(B) STATE.—Each State, with respect to

20 covered outpatient drugs paid for under the

21 State plan, shall have authority, independent of

22 the Secretary’s authority under subparagraph

23 (A), to resolve, settle, and compromise disputes

24 regarding the amounts of rebates owed under

25 this section. Any such action shall be deemed to
986

•S 1956 PCS

1 comply with the requirements of this title, and

2 such covered outpatient drugs shall be eligible

3 for payment under the State plan under this

4 title.

5 ‘‘(C) AMOUNT OF REBATE.—The Secretary

6 shall limit the amount of the rebate payable in

7 any case in which the Secretary determines

8 that, because of unusual circumstances or ques9 tionable data, the provisions of subsection (c)

10 result in a rebate amount that is inequitable or

11 otherwise inconsistent with the purposes of this

12 section.

13 ‘‘(c) DETERMINATION OF AMOUNT OF REBATE.—

14 ‘‘(1) BASIC REBATE FOR SINGLE SOURCE

15 DRUGS AND INNOVATOR MULTIPLE SOURCE

16 DRUGS.—

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

18 paragraph (2), the amount of the rebate speci19 fied in this subsection with respect to a State

20 participating in the master rebate agreement

21 for a rebate period (as defined in subsection

22 (i)(7)) with respect to each dosage form and

23 strength of a single source drug or an innovator

24 multiple source drug shall be equal to the prod25 uct of—
987

•S 1956 PCS

1 ‘‘(i) the total number of units of each

2 dosage form and strength paid for under

3 the State plan in the rebate period (as re4 ported by the State); and

5 ‘‘(ii) the greater of—

6 ‘‘(I) the difference between the

7 average manufacturer price and the

8 best price (as defined in subparagraph

9 (C)) for the dosage form and strength

10 of the drug, or

11 ‘‘(II) the minimum rebate per12 centage (specified in subparagraph

13 (B)) of such average manufacturer

14 price,

15 for the rebate period.

16 ‘‘(B) MINIMUM REBATE PERCENTAGE.—

17 For purposes of subparagraph (A)(ii)(II), the

18 ‘minimum rebate percentage’ is 15 percent.

19 ‘‘(C) BEST PRICE DEFINED.—For pur20 poses of this section—

21 ‘‘(i) IN GENERAL.—The term ‘best

22 price’ means, with respect to a single

23 source drug or innovator multiple source

24 drug of a manufacturer, the lowest price

25 available from the manufacturer during the
988

•S 1956 PCS

1 rebate period to any wholesaler, retailer,

2 provider, health maintenance organization,

3 nonprofit entity, or governmental entity

4 within the United States, excluding—

5 ‘‘(I) any prices charged on or

6 after October 1, 1992, to the Indian

7 Health Service, the Department of

8 Veterans Affairs, a State home receiv9 ing funds under section 1741 of title

10 38, United States Code, the Depart11 ment of Defense, the Public Health

12 Service, or a covered entity described

13 in section 340B(a)(4) of the Public

14 Health Service Act,

15 ‘‘(II) any prices charged under

16 the Federal Supply Schedule of the

17 General Services Administration,

18 ‘‘(III) any prices used under a

19 State pharmaceutical assistance pro20 gram, and

21 ‘‘(IV) any depot prices and single

22 award contract prices, as defined by

23 the Secretary, of any agency of the

24 Federal Government.
989

•S 1956 PCS

1 ‘‘(ii) SPECIAL RULES.—The term ‘best

2 price’—

3 ‘‘(I) shall be inclusive of cash dis4 counts, free goods that are contingent

5 on any purchase requirement, volume

6 discounts, and rebates (other than re7 bates under this section),

8 ‘‘(II) shall be determined without

9 regard to special packaging, labeling,

10 or identifiers on the dosage form or

11 product or package,

12 ‘‘(III) shall not take into account

13 prices that are merely nominal in

14 amount, and

15 ‘‘(IV) shall exclude rebates paid

16 under this section or any other re17 bates paid to a State participating in

18 the master rebate agreement.

19 ‘‘(2) ADDITIONAL REBATE FOR SINGLE SOURCE

20 AND INNOVATOR MULTIPLE SOURCE DRUGS.—

21 ‘‘(A) IN GENERAL.—The amount of the re22 bate specified in this subsection with respect to

23 a State participating in the master rebate

24 agreement for a rebate period, with respect to

25 each dosage form and strength of a single
990

•S 1956 PCS

1 source drug or an innovator multiple source

2 drug, shall be increased by an amount equal to

3 the product of—

4 ‘‘(i) the total number of units of such

5 dosage form and strength dispensed after

6 December 31, 1990, for which payment

7 was made under the State plan for the re8 bate period; and

9 ‘‘(ii) the amount (if any) by which—

10 ‘‘(I) the average manufacturer

11 price for the dosage form and

12 strength of the drug for the period,

13 exceeds

14 ‘‘(II) the average manufacturer

15 price for such dosage form and

16 strength for the calendar quarter be17 ginning July 1, 1990 (without regard

18 to whether or not the drug has been

19 sold or transferred to an entity, in20 cluding a division or subsidiary of the

21 manufacturer, after the first day of

22 such quarter), increased by the per23 centage by which the Consumer Price

24 Index for All Urban Consumers (Unit25 ed States city average) for the month
991

•S 1956 PCS

1 before the month in which the rebate

2 period begins exceeds such index for

3 September 1990.

4 ‘‘(B) TREATMENT OF SUBSEQUENTLY AP5 PROVED DRUGS.—In the case of a covered out6 patient drug approved by the Food and Drug

7 Administration after October 1, 1990, clause

8 (ii)(II) of subparagraph (A) shall be applied by

9 substituting ‘the first full calendar quarter after

10 the day on which the drug was first marketed’

11 for ‘the calendar quarter beginning July 1,

12 1990’ and ‘the month prior to the first month

13 of the first full calendar quarter after the day

14 on which the drug was first marketed’ for ‘Sep15 tember 1990’.

16 ‘‘(3) REBATE FOR OTHER DRUGS.—

17 ‘‘(A) IN GENERAL.—The amount of the re18 bate paid to a State participating in the master

19 rebate agreement for a rebate period with re20 spect to each dosage form and strength of cov21 ered outpatient drugs (other than single source

22 drugs and innovator multiple source drugs)

23 shall be equal to the product of—

24 ‘‘(i) the applicable percentage (as de25 scribed in subparagraph (B)) of the aver-
992

•S 1956 PCS

1 age manufacturer price for the dosage

2 form and strength for the rebate period,

3 and

4 ‘‘(ii) the total number of units of such

5 dosage form and strength dispensed after

6 December 31, 1990, for which payment

7 was made under the State plan for the re8 bate period.

9 ‘‘(B) APPLICABLE PERCENTAGE DE10 FINED.—For purposes of subparagraph (A)(i),

11 the ‘applicable percentage’ is 11 percent.

12 ‘‘(4) LIMITATION ON AMOUNT OF REBATE TO

13 AMOUNTS PAID FOR CERTAIN DRUGS.—

14 ‘‘(A) IN GENERAL.—Upon request of the

15 manufacturer of a covered outpatient drug, the

16 Secretary shall limit, in accordance with sub17 paragraph (B), the amount of the rebate under

18 this subsection with respect to a dosage form

19 and strength of such drug if the majority of the

20 estimated number of units of such dosage form

21 and strength that are subject to rebates under

22 this section were dispensed to inpatients of

23 nursing facilities.

24 ‘‘(B) AMOUNT OF REBATE.—In the case of

25 a covered outpatient drug subject to subpara-
993

•S 1956 PCS

1 graph (A), the amount of the rebate specified in

2 this subsection for a rebate period, with respect

3 to each dosage form and strength of such drug,

4 shall not exceed the amount paid under the

5 State plan with respect to such dosage form

6 and strength of the drug in the rebate period

7 (without consideration of any dispensing fees

8 paid).

9 ‘‘(5) SUPPLEMENTAL REBATES PROHIBITED.—

10 No rebates shall be required to be paid by manufac11 turers with respect to covered outpatient drugs fur12 nished to individuals in any State that provides for

13 the collection of such rebates in excess of the rebate

14 amount payable under this section.

15 ‘‘(d) LIMITATIONS ON COVERAGE OF DRUGS BY

16 STATES PARTICIPATING IN MASTER AGREEMENT.—

17 ‘‘(1) PERMISSIBLE RESTRICTIONS.—A State

18 participating in the master rebate agreement under

19 this section may—

20 ‘‘(A) subject to prior authorization under

21 its State plan any covered outpatient drug so

22 long as any such prior authorization program

23 complies with the requirements of paragraph

24 (5); and
994

•S 1956 PCS

1 ‘‘(B) exclude or otherwise restrict coverage

2 under its plan of a covered outpatient drug if—

3 ‘‘(i) the drug is contained in the list

4 referred to in paragraph (2);

5 ‘‘(ii) the drug is subject to such re6 strictions pursuant to the master rebate

7 agreement or any agreement described in

8 subsection (a)(4); or

9 ‘‘(iii) the State has excluded coverage

10 of the drug from its formulary established

11 in accordance with paragraph (4).

12 ‘‘(2) LIST OF DRUGS SUBJECT TO RESTRIC13 TION.—The following drugs or classes of drugs, or

14 their medical uses, may be excluded from coverage

15 or otherwise restricted by a State participating in

16 the master rebate agreement:

17 ‘‘(A) Agents when used for anorexia,

18 weight loss, or weight gain.

19 ‘‘(B) Agents when used to promote fertil20 ity.

21 ‘‘(C) Agents when used for cosmetic pur22 poses or hair growth.

23 ‘‘(D) Agents when used for the sympto24 matic relief of cough and colds.
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•S 1956 PCS

1 ‘‘(E) Agents when used to promote smok2 ing cessation.

3 ‘‘(F) Prescription vitamins and mineral

4 products, except prenatal vitamins and fluoride

5 preparations.

6 ‘‘(G) Nonprescription drugs.

7 ‘‘(H) Covered outpatient drugs which the

8 manufacturer seeks to require as a condition of

9 sale that associated tests or monitoring services

10 be purchased exclusively from the manufacturer

11 or its designee.

12 ‘‘(I) Barbiturates.

13 ‘‘(J) Benzodiazepines.

14 ‘‘(3) ADDITIONS TO DRUG LISTINGS.—The Sec15 retary shall, by regulation, periodically update the

16 list of drugs or classes of drugs described in para17 graph (2), or their medical uses, which the Secretary

18 has determined to be subject to clinical abuse or in19 appropriate use.

20 ‘‘(4) REQUIREMENTS FOR FORMULARIES.—A

21 State participating in the master rebate agreement

22 may establish a formulary if the formulary meets the

23 following requirements:

24 ‘‘(A) The formulary is developed by a com25 mittee consisting of physicians, pharmacists,
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•S 1956 PCS

1 and other appropriate individuals appointed by

2 the Governor of the State.

3 ‘‘(B) Except as provided in subparagraph

4 (C), the formulary includes the covered out5 patient drugs of any manufacturer which has

6 entered into and complies with the agreement

7 under subsection (a) (other than any drug ex8 cluded from coverage or otherwise restricted

9 under paragraph (2)).

10 ‘‘(C) A covered outpatient drug may be ex11 cluded with respect to the treatment of a spe12 cific disease or condition for an identified popu13 lation (if any) only if, based on the drug’s label14 ing (or, in the case of a drug the prescribed use

15 of which is not approved under the Federal

16 Food, Drug, and Cosmetic Act but is a medi17 cally accepted indication, based on information

18 from the appropriate compendia described in

19 subsection (i)(5)), the excluded drug does not

20 have a significant, clinically meaningful thera21 peutic advantage in terms of safety, effective22 ness, or clinical outcome of such treatment for

23 such population over other drugs included in

24 the formulary and there is a written expla-
997

•S 1956 PCS

1 nation (available to the public) of the basis for

2 the exclusion.

3 ‘‘(D) The State plan permits coverage of a

4 drug excluded from the formulary (other than

5 any drug excluded from coverage or otherwise

6 restricted under paragraph (2)) pursuant to a

7 prior authorization program that is consistent

8 with paragraph (5).

9 ‘‘(E) The formulary meets such other re10 quirements as the Secretary may impose in

11 order to achieve program savings consistent

12 with protecting the health of program bene13 ficiaries.

14 A prior authorization program established by a State

15 under paragraph (5) is not a formulary subject to

16 the requirements of this paragraph.

17 ‘‘(5) REQUIREMENTS OF PRIOR AUTHORIZATION

18 PROGRAMS.—The State plan of a State participating

19 in the master rebate agreement may require, as a

20 condition of coverage or payment for a covered out21 patient drug for which Federal financial participa22 tion is available in accordance with this section, the

23 approval of the drug before its dispensing for any

24 medically accepted indication (as defined in sub-
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•S 1956 PCS

1 section (i)(5)) only if the system providing for such

2 approval—

3 ‘‘(A) provides response by telephone or

4 other telecommunication device within 24 hours

5 of a request for prior authorization, and

6 ‘‘(B) except with respect to the drugs on

7 the list referred to in paragraph (2), provides

8 for the dispensing of at least a 72-hour supply

9 of a covered outpatient prescription drug in an

10 emergency situation (as defined by the Sec11 retary).

12 ‘‘(6) OTHER PERMISSIBLE RESTRICTIONS.—A

13 State participating in the master rebate agreement

14 may impose limitations, with respect to all such

15 drugs in a therapeutic class, on the minimum or

16 maximum quantities per prescription or on the num17 ber of refills, if such limitations are necessary to dis18 courage waste, and may address instances of fraud

19 or abuse by individuals in any manner authorized

20 under this Act.

21 ‘‘(e) DRUG USE REVIEW.—

22 ‘‘(1) IN GENERAL.—A State participating in the

23 master rebate agreement may provide for a drug use

24 review program to educate physicians and phar25 macists to identify and reduce the frequency of pat-
999

•S 1956 PCS

1 terns of fraud, abuse, gross overuse, or inappropri2 ate or medically unnecessary care, among physicians,

3 pharmacists, and patients, or associated with specific

4 drugs or groups of drugs, as well as potential and

5 actual severe adverse reactions to drugs.

6 ‘‘(2) APPLICATION OF STATE STANDARDS.—A

7 State with a drug use review program under this

8 subsection shall establish and operate the program

9 under such standards as it may establish.

10 ‘‘(f) ELECTRONIC CLAIMS MANAGEMENT.—In ac11 cordance with chapter 35 of title 44, United States Code

12 (relating to coordination of Federal information policy),

13 the Secretary shall encourage each State to establish, as

14 its principal means of processing claims for covered out15 patient drugs under its State plan, a point-of-sale elec16 tronic claims management system, for the purpose of per17 forming on-line, real time eligibility verifications, claims

18 data capture, adjudication of claims, and assisting phar19 macists (and other authorized persons) in applying for and

20 receiving payment.

21 ‘‘(g) ANNUAL REPORT.—

22 ‘‘(1) IN GENERAL.—Not later than May 1 of

23 each year, the Secretary shall transmit to the Com24 mittee on Finance of the Senate, and the Committee

25 on Commerce of the House of Representatives, a re-
1000

•S 1956 PCS

1 port on the operation of this section in the preceding

2 fiscal year.

3 ‘‘(2) DETAILS.—Each report shall include infor4 mation on—

5 ‘‘(A) ingredient costs paid under this title

6 for single source drugs, multiple source drugs,

7 and nonprescription covered outpatient drugs,

8 ‘‘(B) the total value of rebates received

9 and number of manufacturers providing such

10 rebates,

11 ‘‘(C) the effect of inflation on the value of

12 rebates required under this section,

13 ‘‘(D) trends in prices paid under this title

14 for covered outpatient drugs, and

15 ‘‘(E) Federal and State administrative

16 costs associated with compliance with the provi17 sions of this title.

18 ‘‘(h) EXEMPTION FOR CAPITATED HEALTH CARE

19 ORGANIZATIONS, HOSPITALS, AND CERTAIN NURSING

20 FACILITIES.—

21 ‘‘(1) IN GENERAL.—Except as provided in para22 graph (2), the requirements of the master rebate

23 agreement under this section shall not apply with re24 spect to covered outpatient drugs dispensed by or

25 through—
1001

•S 1956 PCS

1 ‘‘(A) a capitated health care organization

2 (as defined in section 1504(d)(1)),

3 ‘‘(B) a hospital that dispenses covered out4 patient drugs using a drug formulary system

5 and bills the State no more than the hospital’s

6 purchasing costs for covered outpatient drugs,

7 or

8 ‘‘(C) a nursing facility which receives pay9 ment under this title for health care services,

10 including prescription drugs, on a capitated

11 basis or which dispenses covered outpatient

12 drugs using a drug formulary system.

13 ‘‘(2) CONSTRUCTION IN DETERMINING BEST

14 PRICE.—Nothing in paragraph (1) shall be con15 strued as excluding amounts paid by the entities de16 scribed in such paragraph for covered outpatient

17 drugs from the determination of the best price (as

18 defined in subsection (c)(1)(C)) for such drugs.

19 ‘‘(i) DEFINITIONS.—In the section—

20 ‘‘(1) AVERAGE MANUFACTURER PRICE.—The

21 term ‘average manufacturer price’ means, with re22 spect to a covered outpatient drug of a manufacturer

23 for a rebate period, the average price paid to the

24 manufacturer for the drug in the United States by

25 wholesalers for drugs distributed to the retail phar-
1002

•S 1956 PCS

1 macy class of trade, after deducting customary

2 prompt pay discounts.

3 ‘‘(2) COVERED OUTPATIENT DRUG.—Subject to

4 the exceptions in paragraph (3), the term ‘covered

5 outpatient drug’ means—

6 ‘‘(A) of those drugs which are treated as

7 prescribed drugs for purposes of section

8 1571(a)(8), a drug which may be dispensed

9 only upon prescription (except as provided in

10 subparagraph (D)), and—

11 ‘‘(i) which is approved as a prescrip12 tion drug under section 505 or 507 of the

13 Federal Food, Drug, and Cosmetic Act;

14 ‘‘(ii)(I) which was commercially used

15 or sold in the United States before the

16 date of the enactment of the Drug Amend17 ments of 1962 or which is identical, simi18 lar, or related (within the meaning of sec19 tion 310.6(b)(1) of title 21 of the Code of

20 Federal Regulations) to such a drug, and

21 (II) which has not been the subject of a

22 final determination by the Secretary that it

23 is a ‘new drug’ (within the meaning of sec24 tion 201(p) of the Federal Food, Drug,

25 and Cosmetic Act) or an action brought by
1003

•S 1956 PCS

1 the Secretary under section 301, 302(a),

2 or 304(a) of such Act to enforce section

3 502(f) or 505(a) of such Act; or

4 ‘‘(iii)(I) which is described in section

5 107(c)(3) of the Drug Amendments of

6 1962 and for which the Secretary has de7 termined there is a compelling justification

8 for its medical need, or is identical, simi9 lar, or related (within the meaning of sec10 tion 310.6(b)(1) of title 21 of the Code of

11 Federal Regulations) to such a drug, and

12 (II) for which the Secretary has not issued

13 a notice of an opportunity for a hearing

14 under section 505(e) of the Federal Food,

15 Drug, and Cosmetic Act on a proposed

16 order of the Secretary to withdraw ap17 proval of an application for such drug

18 under such section because the Secretary

19 has determined that the drug is less than

20 effective for some or all conditions of use

21 prescribed, recommended, or suggested in

22 its labeling;

23 ‘‘(B) a biological product, other than a

24 vaccine which—
1004

•S 1956 PCS

1 ‘‘(i) may only be dispensed upon pre2 scription,

3 ‘‘(ii) is licensed under section 351 of

4 the Public Health Service Act, and

5 ‘‘(iii) is produced at an establishment

6 licensed under such section to produce

7 such product;

8 ‘‘(C) insulin certified under section 506 of

9 the Federal Food, Drug, and Cosmetic Act; and

10 ‘‘(D) a drug, including a biological product

11 or insulin, which may be sold without a pre12 scription (commonly referred to as an ‘over-the13 counter drug’), if the drug is prescribed by a

14 physician (or other person authorized to pre15 scribe under State law).

16 ‘‘(3) LIMITING DEFINITION.—The term ‘covered

17 outpatient drug’ does not include any drug, biologi18 cal product, or insulin provided as part of, or as in19 cident to and in the same setting as, any of the fol20 lowing (and for which payment may be made under

21 a State plan as part of payment for the following

22 and not as direct reimbursement for the drug):

23 ‘‘(A) Inpatient hospital services.

24 ‘‘(B) Hospice services.
1005

•S 1956 PCS

1 ‘‘(C) Dental services, except that drugs for

2 which the State plan authorizes direct reim3 bursement to the dispensing dentist are covered

4 outpatient drugs.

5 ‘‘(D) Physicians’ services.

6 ‘‘(E) Outpatient hospital services.

7 ‘‘(F) Nursing facility services and services

8 provided by an intermediate care facility for the

9 mentally retarded.

10 ‘‘(G) Other laboratory and x-ray services.

11 ‘‘(H) Renal dialysis services.

12 Such term also does not include any such drug or

13 product for which a National Drug Code number is

14 not required by the Food and Drug Administration

15 or a drug or biological product used for a medical

16 indication which is not a medically accepted indica17 tion. Any drug, biological product, or insulin ex18 cluded from the definition of such term as a result

19 of this paragraph shall be treated as a covered out20 patient drug for purposes of determining the best

21 price (as defined in subsection (c)(1)(C)) for such

22 drug, biological product, or insulin.

23 ‘‘(4) MANUFACTURER.—The term ‘manufac24 turer’ means, with respect to a covered outpatient
1006

•S 1956 PCS

1 drug, the entity holding legal title to or possession

2 of the National Drug Code number for such drug.

3 ‘‘(5) MEDICALLY ACCEPTED INDICATION.—The

4 term ‘medically accepted indication’ means any use

5 for a covered outpatient drug which is approved

6 under the Federal Food, Drug, and Cosmetic Act, or

7 the use of which is supported by one or more cita8 tions included or approved for inclusion in any of the

9 following compendia:

10 ‘‘(A) American Hospital Formulary Service

11 Drug Information.

12 ‘‘(B) United States Pharmacopeia-Drug

13 Information.

14 ‘‘(C) American Medical Association Drug

15 Evaluations.

16 ‘‘(D) The DRUGDEX Information Sys17 tem.

18 ‘‘(E) The peer-reviewed medical literature.

19 ‘‘(6) MULTIPLE SOURCE DRUG; INNOVATOR

20 MULTIPLE SOURCE DRUG; NONINNOVATOR MUL21 TIPLE SOURCE DRUG; SINGLE SOURCE DRUG.—

22 ‘‘(A) DEFINED.—

23 ‘‘(i) MULTIPLE SOURCE DRUG.—The

24 term ‘multiple source drug’ means, with

25 respect to a rebate period, a covered out-
1007

•S 1956 PCS

1 patient drug (not including any drug de2 scribed in paragraph (2)(D)) for which

3 there are 2 or more drug products which—

4 ‘‘(I) are rated as therapeutically

5 equivalent (under the Food and Drug

6 Administration’s most recent publica7 tion of ‘Approved Drug Products with

8 Therapeutic Equivalence Evalua9 tions’),

10 ‘‘(II) except as provided in sub11 paragraph (B), are pharmaceutically

12 equivalent and bioequivalent, as de13 fined in subparagraph (C) and as de14 termined by the Food and Drug Ad15 ministration, and

16 ‘‘(III) are sold or marketed in

17 the State during the period.

18 ‘‘(ii) INNOVATOR MULTIPLE SOURCE

19 DRUG.—The term ‘innovator multiple

20 source drug’ means a multiple source drug

21 that was originally marketed under an

22 original new drug application or product li23 censing application approved by the Food

24 and Drug Administration.
1008

•S 1956 PCS

1 ‘‘(iii) NONINNOVATOR MULTIPLE

2 SOURCE DRUG.—The term ‘noninnovator

3 multiple source drug’ means a multiple

4 source drug that is not an innovator mul5 tiple source drug.

6 ‘‘(iv) SINGLE SOURCE DRUG.—The

7 term ‘single source drug’ means a covered

8 outpatient drug (other than a drug de9 scribed in paragraph (2)(D)) which is pro10 duced or distributed under an original new

11 drug application approved by the Food and

12 Drug Administration, including a drug

13 product marketed by any cross-licensed

14 producers or distributors operating under

15 the new drug application or product licens16 ing application.

17 ‘‘(B) EXCEPTION.—Subparagraph

18 (A)(i)(II) shall not apply if the Food and Drug

19 Administration changes by regulation the re20 quirement that, for purposes of the publication

21 described in subparagraph (A)(i)(I), in order

22 for drug products to be rated as therapeutically

23 equivalent, they must be pharmaceutically

24 equivalent and bioequivalent, as defined in sub25 paragraph (C).
1009

•S 1956 PCS

1 ‘‘(C) DEFINITIONS.—For purposes of this

2 paragraph—

3 ‘‘(i) drug products are pharmaceuti4 cally equivalent if the products contain

5 identical amounts of the same active drug

6 ingredient in the same dosage form and

7 meet compendial or other applicable stand8 ards of strength, quality, purity, and iden9 tity,

10 ‘‘(ii) drugs are bioequivalent if they do

11 not present a known or potential bio12 equivalence problem, or, if they do present

13 such a problem, they are shown to meet an

14 appropriate standard of bioequivalence,

15 and

16 ‘‘(iii) a drug product is considered to

17 be sold or marketed in a State if it appears

18 in a published national listing of average

19 wholesale prices selected by the Secretary,

20 if the listed product is generally available

21 to the public through retail pharmacies in

22 that State.

23 ‘‘(7) REBATE PERIOD.—The term ‘rebate pe24 riod’ means, with respect to an agreement under

25 subsection (a), a calendar quarter or other period
1010

•S 1956 PCS

1 specified by the Secretary with respect to the pay2 ment of rebates under such agreement.’’.

3 SEC. 2924. STATE ELECTION; TERMINATION OF CURRENT

4 PROGRAM; AND TRANSITION.

5 (a) TERMINATION OF CURRENT PROGRAM; LIMITA6 TION ON MEDICAID PAYMENTS IN FISCAL YEAR 1997.—

7 (1) REPEAL OF TITLE.—Title XIX of the Social

8 Security Act is repealed effective October 1, 1997,

9 except that the repeal of section 1928 of such Act

10 is effective on the date of the enactment of this Act

11 and the succeeding two sections of such title shall be

12 effective during fiscal year 1996 in the same manner

13 and to the same extent as such sections were effec14 tive during fiscal year 1995.

15 (2) LIMITATION ON OBLIGATION AUTHORITY.—

16 Notwithstanding any other provision of such title—

17 (A) FISCAL YEAR 1997.—Subject to sub18 paragraph (B), the Secretary of Health and

19 Human Services (in this section referred to as

20 the ‘‘Secretary’’) may enter into obligations

21 under such title with any State (as defined for

22 purposes of such title) for expenses incurred

23 during fiscal year 1997, but not in excess of the

24 sum determined under clauses (i) and (ii) of

25 section 1511(a)(2)(A) of the Social Security Act
1011

•S 1956 PCS

1 (as added by section 2) for that State for fiscal

2 year 1997.

3 (B) NONE AFTER EFFECTIVE DATE.—The

4 Secretary is not authorized to enter into any

5 obligation with any State under title XIX of

6 such Act for expenses incurred on or after the

7 earlier of—

8 (i) October 1, 1997, or

9 (ii) the first day of the first quarter

10 on which the State plan under title XV of

11 such Act (as added by section 2) is first ef12 fective.

13 (C) AGREEMENT.—A State’s submission of

14 claims for payment under section 1903 of such

15 Act on or after October 1, 1996, is deemed to

16 constitute the State’s acceptance of the obliga17 tion limitation under subparagraph (A) (includ18 ing the formula for computing the amount of

19 such obligation limitation).

20 (D) EFFECT ON MEDICAL ASSISTANCE.—

21 Effective October 1, 1996—

22 (i) except as provided in this para23 graph, the Federal Government has no ob24 ligation to provide payment with respect to
1012

•S 1956 PCS

1 items and services provided under title

2 XIX of the Social Security Act, and

3 (ii) such title and title XV of such Act

4 shall not be construed as providing for an

5 entitlement, under Federal law in relation

6 to the Federal Government, in an individ7 ual or person (including any provider) at

8 the time of provision or receipt of services.

9 (3) REQUIREMENT FOR TIMELY SUBMITTAL OF

10 CLAIMS.—No payment shall be made to a State

11 under title XIX of such Act with respect to an obli12 gation incurred before October 1, 1996, unless the

13 State has submitted to the Secretary, by not later

14 than April 1, 1997, a claim for Federal financial

15 participation for expenses paid by the State with re16 spect to such obligations. Nothing in paragraph (2)

17 shall be construed as affecting the obligation of the

18 Federal Government to pay claims described in the

19 previous sentence.

20 (b) TRANSITION PROVISIONS.—

21 (1) Notwithstanding any other provision of law,

22 in the case where payment has been made under sec23 tion 1903(a) of the Social Security Act to a State

24 before March 1, 1996, and for which a disallowance

25 has not been taken as of such date (or, if so taken,
1013

•S 1956 PCS

1 has not been completed, including judicial review, by

2 such date), the Secretary of Health and Human

3 Services shall discontinue the disallowance proceed4 ing and, if such disallowance has been taken as of

5 the date of the enactment of this Act, any payment

6 reductions effected shall be rescinded and the pay7 ments returned to the State.

8 (2) The repeal under subsection (a)(1) of sec9 tion 1928 of the Social Security Act shall not affect

10 the distribution of vaccines purchased and delivered

11 to the States before the date of the enactment of

12 this Act. No vaccine may be purchased after such

13 date by the Federal Government or any State under

14 any contract under section 1928(d) of the Social Se15 curity Act.

16 (3) No judicial or administrative decision ren17 dered regarding requirements imposed under title

18 XIX of the Social Security Act with respect to a

19 State shall have any application to the State plan of

20 the State under title XV of such Act. A State may,

21 pursuant to the previous sentence, seek the abroga22 tion or modification of any such decision after the

23 date of termination of the State medicaid plan under

24 title XIX of such Act.
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•S 1956 PCS

1 (4) No cause of action under title XIX of the

2 Social Security Act which seeks to require a State

3 to establish or maintain minimum payment rates

4 under such title or claim which seeks reimbursement

5 for any period before the date of the enactment of

6 this Act based on the alleged failure of the State to

7 comply with such title and which has not become

8 final as of such date shall be brought or continued.

9 (5) Section 6408(a)(3) of the Omnibus Budget

10 Reconciliation Act of 1989 (as amended by section

11 13642 of the Omnibus Budget Reconciliation Act of

12 1993) and section 2 of Public Law 102–276 (as

13 amended by section 13644 of the Omnibus Budget

14 Reconciliation Act of 1993) are each amended by

15 striking ‘‘December 31, 1995’’ and inserting ‘‘Octo16 ber 1, 1997’’.

17 (c) ANTI-FRAUD PROVISIONS.—Section 1128(h)(1)

18 of the Social Security Act (42 U.S.C. 1320a–7(h)(1)) is

19 amended by inserting ‘‘or a State plan under title XV’’

20 after ‘‘title XIX’’.

21 (d) TECHNICAL AND CONFORMING AMENDMENTS.—

22 (1) SECRETARIAL SUBMISSION OF LEGISLATIVE

23 PROPOSAL.—Not later than 90 days after the date

24 of the enactment of this Act, the Secretary of

25 Health and Human Services, in consultation, as ap-
1015

•S 1956 PCS

1 propriate, with heads of other Federal agencies and

2 the States (as defined in section 1101(a)(8) of the

3 Social Security Act for purposes of title XIX of such

4 Act), shall submit to the appropriate committees of

5 Congress a legislative proposal providing for such

6 technical and conforming amendments in the law as

7 are required by the provisions of, and amendments

8 made by, this subtitle.

9 (2) TRANSITIONAL RULE.—Any reference in

10 any provision of law to title XIX of the Social Secu11 rity Act or any provision thereof shall be deemed to

12 be a reference to such title or provision as in effect

13 on the day before the date of the enactment of this

14 Act.

15 (3) AMENDMENT TO SECTION 1115.—Section

16 1115(a) of the Social Security Act (42 U.S.C.

17 1315(a)) is amended—

18 (A) in the matter preceding paragraph (1),

19 by striking ‘‘or XIX’’ and inserting ‘‘XIX, or

20 XV’’;

21 (B) in paragraph (1), by inserting ‘‘or of

22 title XV,’’ after ‘‘1902,’’; and

23 (C) in paragraph (2), by inserting ‘‘or

24 under title XV,’’ after ‘‘1903,’’.
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1 (4) CERTIFICATION OF CHRISTIAN SCIENCE

2 NURSING FACILITIES.—

3 (A) IN GENERAL.—Title XIX (42 U.S.C.

4 1396 et seq.) is amended—

5 (i) in the matter following paragraph

6 (62) of section 1902(a) (42 U.S.C.

7 1396a(a)), by striking ‘‘the First Church

8 of Christ, Scientist, Boston, Massachu9 setts’’ and inserting ‘‘The Commission for

10 Accreditation of Christian Science Nursing

11 Organizations/Facilities, Inc.’’; and

12 (ii) in section 1908(e)(1) (the first

13 place it appears) (42 U.S.C. 1396g(1)(e)),

14 by striking ‘‘the First Church of Christ,

15 Scientist, Boston, Massachusetts’’ and in16 serting ‘‘The Commission for Accreditation

17 of Christian Science Nursing Organiza18 tions/Facilities, Inc.’’.

19 (B) EFFECTIVE DATE.—The amendments

20 made by subparagraph (A) shall take effect on

21 January 1, 1997.

22 SEC. 2925. INTEGRATION DEMONSTRATION PROJECT.

23 (a) DESCRIPTION OF PROJECTS.—

24 (1) IN GENERAL.—The Secretary of Health and

25 Human Services (in this section referred to as the
1017

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1 ‘‘Secretary’’) may waive such requirements of titles

2 XVIII and XV of the Social Security Act as may be

3 necessary for States to conduct demonstration

4 projects under this section. Such projects shall dem5 onstrate the manner in which States may use funds

6 from the programs under such titles to develop and

7 implement innovative programs for individuals dually

8 eligible for benefits under both titles, including such

9 individuals who are chronically ill. The Secretary

10 shall grant waivers in a manner that permits States

11 flexibility in contracting with medicare risk providers

12 and other providers for services, oversight of con13 tract administration and quality management, and

14 administration of a single enrollment process. Such

15 a waiver may restrict time period during which

16 project participants may disenroll without cause

17 from capitated health plans under the medicare pro18 gram.

19 (2) VOLUNTARY PARTICIPATION.—A State may

20 not require an individual eligible to receive items and

21 services under the medicare and title XV programs

22 to participate in a demonstration project under this

23 section.

24 (b) BUDGET NEUTRALITY AND REINVESTMENT OF

25 SAVINGS.—
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1 (1) BUDGET NEUTRALITY.—The Secretary shall

2 not approve a demonstration project under this sec3 tion for a State unless the State demonstrates that

4 the amount of the Federal expenditures under the

5 program will not exceed the amount of the Federal

6 expenditures that would have been made if the

7 project had not been approved.

8 (2) USE OF SAVINGS.—The Secretary shall per9 mit a State to retain any savings achieved under a

10 project and to use such savings for—

11 (A) expanding eligibility for low income

12 medicare beneficiaries who are risk of institu13 tionalization and who, if institutionalized, are

14 likely to qualify for benefits under title XV of

15 the Social Security Act, and

16 (B) providing a scope of services under the

17 project that exceeds the scope of services nor18 mally covered under such title.

19 (c) LIMITATION ON NUMBER OF PROJECTS.—Not

20 more than 10 demonstration projects shall be conducted

21 under this section.

22 (d) DURATION.—

23 (1) IN GENERAL.—Subject to paragraph (2), a

24 demonstration project conducted under this section

25 shall be conducted for an initial period of 5 years
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1 and, upon the request of a State and a finding by

2 the Secretary that the project has been successful,

3 shall be extended indefinitely.

4 (2) TERMINATION.—The Secretary may, with

5 90 days’ notice, terminate any demonstration project

6 conducted under this section that is not in substan7 tial compliance with the terms of the application ap8 proved by the Secretary under this section.

9 (e) APPLICATIONS.—Each State, or a coalition of

10 States, desiring to conduct a demonstration project under

11 this section shall prepare and submit to the Secretary an

12 application at such time, in such manner, and containing

13 such information as the Secretary may require, including

14 an explanation of a plan for evaluating the project. The

15 Secretary shall approve or deny an application not later

16 than 90 days after the receipt of such application.

17 (f) PAYMENTS.—For each calendar quarter occurring

18 during a demonstration project conducted under this sec19 tion, the Secretary shall provide for payments to the State

20 in a manner consistent with subsection (b)(1).

21 (g) OVERSIGHT.—The Secretary shall establish qual22 ity standards for evaluating and monitoring the dem23 onstration projects conducted under this section. Such

24 quality standards shall include reporting requirements

25 which contain the following:
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1 (1) A description of the demonstration project.

2 (2) An analysis of beneficiary satisfaction under

3 such project.

4 (3) An analysis of the quality of the services de5 livered under the project.

6 (4) A description of the savings to the medicare

7 and title XV programs as a result of the demonstra8 tion project.

9 SEC. 2926. NATIONAL COMMISSION ON MEDICAID AND

10 STATE-BASED HEALTH CARE REFORM.

11 (a) ESTABLISHMENT OF COMMISSION.—

12 (1) IN GENERAL.—There is established a com13 mission to be known as the National Commission on

14 Medicaid and State-Based Health Care Reform (in

15 this section referred to as the ‘‘Commission’’).

16 (2) COMPOSITION.—The Commission shall be

17 composed as follows:

18 (A) 2 FEDERAL OFFICIALS.—The Presi19 dent shall appoint 2 Federal officials, one of

20 whom the President shall designate as Chair of

21 the Commission.

22 (B) 4 MEMBERS OF THE CONGRESS.—Four

23 members of the Congress shall be appointed as

24 follows:
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1 (i) The Speaker of the House of Rep2 resentatives shall appoint one Member of

3 the House.

4 (ii) The minority leader of the House

5 of Representatives shall appoint one Mem6 ber of the House.

7 (iii) The majority leader of the Senate

8 shall appoint one Member of the Senate.

9 (iv) The minority leader of the Senate

10 shall appoint one Member of the Senate.

11 (C) 5 STATE GOVERNMENT REPRESENTA12 TIVES.—Five State government representatives

13 shall be appointed as follows:

14 (i) The majority leaders of the House

15 of Representatives and the Senate shall

16 jointly appoint 3 individuals who are gov17 ernors, State legislators, or State medicaid

18 officials.

19 (ii) The minority leaders of the House

20 of Representatives and the Senate shall

21 jointly appoint 2 individuals who are gov22 ernors, State legislators, or State medicaid

23 officials.

24 (D) 6 EXPERTS.—Six experts shall be ap25 pointed as follows:
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1 (i) The majority leaders of the House

2 of Representatives and the Senate shall

3 jointly appoint 4 individuals, who are not

4 officials of the Federal or State govern5 ments, and who may be consumers, or who

6 are individuals who have expertise in a

7 health-related field, such as medicine, pub8 lic health, or delivery and financing of

9 health care services.

10 (ii) The President shall appoint 2 in11 dividuals who are not officials of the Fed12 eral or State governments, and who may

13 be consumers, or who are individuals who

14 have expertise in a health-related field,

15 such as medicine, public health, or delivery

16 and financing of health care services.

17 (3) INITIAL APPOINTMENT.—Members of the

18 Commission shall first be appointed by not later

19 than 90 days after the date of the enactment of this

20 Act.

21 (4) COMPENSATION AND EXPENSES.—

22 (A) COMPENSATION.—Each member of the

23 Commission shall serve without compensation.

24 (B) TRAVEL EXPENSES.—Members of the

25 Commission shall be allowed travel expenses, in-
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1 cluding per diem in lieu of subsistence, at rates

2 authorized for employees of agencies under sub3 chapter I of chapter 57 of title 5, United States

4 Code, while away from their homes or regular

5 places of business in the performance of serv6 ices for the Commission.

7 (b) DUTIES OF COMMISSION.—

8 (1) STUDY.—

9 (A) IN GENERAL.—The Commission shall

10 study and make recommendations to the Con11 gress, the President, and the Secretary of

12 Health and Human Services regarding the pro13 gram of medical assistance under title XIX of

14 the Social Security Act (or title XV of such Act,

15 if applicable) and modifications that may be

16 made to such program to improve the program

17 and to encourage further State health reform

18 relating to access, quality, and cost contain19 ment.

20 (B) SPECIFIC CONCERNS.—The studies

21 and recommendations of the Commission shall

22 specifically address the following:

23 (i) The progress achieved with respect

24 to performance objectives relating to access

25 and quality.
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1 (ii) Changes needed to ensure ade2 quate access to health care and long term

3 care for low-income individuals.

4 (iii) Promotion of quality care.

5 (iv) Deterrence of fraud and abuse.

6 (v) Providing each State with addi7 tional flexibility in implementing the pro8 gram of medical assistance under title XIX

9 of the Social Security Act (or title XV of

10 such Act, if applicable), consistent with

11 maintaining the guarantee of coverage

12 under such program.

13 (vi) Causes and strategies for limiting

14 Federal and State expenditures under such

15 program.

16 (vii) Enhancing the equity and fair17 ness in the distribution of Federal per ben18 eficiary expenditures and matching rates to

19 the States.

20 (C) CONSULTATION.—In addressing the

21 issue described in subparagraph (B)(vii), the

22 Commission shall consult with the Comptroller

23 General of the General Accounting Office and

24 shall consider the following:

25 (i) The rate of poverty in each State.
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1 (ii) The total taxable resources in

2 each State.

3 (iii) Differences in the efficient oper4 ation of the program of medical assistance

5 under title XIX of the Social Security Act

6 (or title XV of such Act, if applicable)

7 among the States.

8 (iv) Per capita income in each State.

9 (v) The relative health care case mix

10 in each State.

11 (vi) The wages of health care employ12 ees in each State.

13 (vii) The cost of living in each State.

14 (2) REPORTS.—

15 (A) FIRST REPORT.—

16 (i) IN GENERAL.—The Commission

17 shall submit a first report to the Congress

18 by not later than June 1, 1997.

19 (ii) REQUIREMENT.—The report sub20 mitted to Congress under clause (i) shall

21 include the Commission’s recommendation

22 with respect to the issue described in para23 graph (1)(B)(vii) in the form of a legisla24 tive proposal containing such statutory

25 provisions as the Commission may deter-
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1 mine are necessary or appropriate to im2 plement such recommendation.

3 (B) SUBSEQUENT REPORTS.—The Com4 mission shall issue subsequent reports to the

5 Congress by not later than December 31, 1997,

6 and December 31, 1998, respectively.

7 (c) ADMINISTRATION.—

8 (1) APPOINTMENT OF STAFF.—

9 (A) EXECUTIVE DIRECTOR.—The Commis10 sion shall have an Executive Director who shall

11 be appointed by the Chair with the approval of

12 the Commission. The Executive Director shall

13 be paid at a rate not to exceed the rate of basic

14 pay payable for level III of the Executive

15 Schedule.

16 (B) STAFF.—With the approval of the

17 Commission, the Executive Director may ap18 point and determine the compensation of such

19 staff as may be necessary to carry out the du20 ties of the Commission. Such appointments and

21 compensation may be made without regard to

22 the provisions of title 5, United States Code,

23 that govern appointments in the competitive

24 services, and the provisions of chapter 51 and

25 subchapter III of chapter 53 of such title that
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1 relate to classifications and the General Sched2 ule pay rates.

3 (C) CONSULTANTS.—The Commission may

4 procure such temporary and intermittent serv5 ices of consultants under section 3109(b) of

6 title 5, United States Code, as the Commission

7 determines to be necessary to carry out the du8 ties of the Commission.

9 (2) PROVISION OF ADMINISTRATIVE SUPPORT

10 SERVICES BY HHS.—Upon the request of the Com11 mission, the Secretary of Health and Human Serv12 ices shall provide to the Commission on a reimburs13 able basis such administrative support services as

14 the Commission may request.

15 (d) AUTHORIZATION OF APPROPRIATIONS.—There is

16 authorized to be appropriated to carry out this section

17 $4,000,000 for each of fiscal years 1997 and 1998, and

18 $2,000,000 for fiscal year 1999.

19 (e) TERMINATION.—The Commission shall terminate

20 on December 31, 1998.