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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[S. 840 Introduced in Senate (IS)]

104th CONGRESS
  1st Session
                                 S. 840

   To provide States greater flexibility in providing jobs for, and 
assistance to, needy families, to improve child support enforcement, to 
           reduce teenage pregnancy, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                 May 22 (legislative day, May 15), 1995

  Mr. Conrad introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL

 
   To provide States greater flexibility in providing jobs for, and 
assistance to, needy families, to improve child support enforcement, to 
           reduce teenage pregnancy, and for other purposes.
    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; REFERENCE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Work and Gainful 
Employment Act''.
    (b) Reference.--Except as otherwise specifically provided, wherever 
in this Act an amendment is expressed in terms of an amendment to or 
repeal of a section or other provision, the reference shall be 
considered to be made to that section or other provision of the Social 
Security Act.
    (c) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; reference; table of contents.
                   TITLE I--TRANSITIONAL AID PROGRAM

Sec. 101. Transitional aid program.
          TITLE II--WORK AND GAINFUL EMPLOYMENT (WAGE) PROGRAM

Sec. 201. WAGE program.
Sec. 202. Regulations.
Sec. 203. Applicability to States.
           TITLE III--WORKING PARENTS CHILD CARE BLOCK GRANT

Sec. 301. Purpose.
Sec. 302. Amendments to Child Care and Development Block Grant Act of 
                            1990.
Sec. 303. Program repeals.
Sec. 304. References.
                 TITLE IV--CHILD SUPPORT RESPONSIBILITY

Sec. 400. Short title.
    Subtitle A--Improvements to the Child Support Collection System

  Part I--Eligibility and Other Matters Concerning Title IV-D Program 
                                Clients

Sec. 401. State obligation to provide paternity establishment and child 
                            support enforcement services.
Sec. 402. Distribution of payments.
Sec. 403. Rights to notification and hearings.
Sec. 404. Privacy safeguards.
Sec. 405. Cooperation requirements and good cause exceptions.
              Part II--Program Administration and Funding

Sec. 411. Federal matching payments.
Sec. 412. Performance-based incentives and penalties.
Sec. 413. Federal and State reviews and audits.
Sec. 414. Required reporting procedures.
Sec. 415. Automated data processing requirements.
Sec. 416. Director of child support enforcement program; staffing 
                            study.
Sec. 417. Funding for secretarial assistance to State programs.
Sec. 418. Data collection and reports by the Secretary.
                   Part III--Locate and Case Tracking

Sec. 421. Central State and case registry.
Sec. 422. Centralized collection and disbursement of support payments.
Sec. 423. State directory of new hires.
Sec. 424. Amendments concerning income withholding.
Sec. 425. Locator information from interstate networks.
Sec. 426. Expansion of the Federal parent locator service.
Sec. 427. Use of social security numbers.
           Part IV--Streamlining and Uniformity of Procedures

Sec. 431. Adoption of uniform State laws.
Sec. 432. Improvements to full faith and credit for child support 
                            orders.
Sec. 433. State laws providing expedited procedures.
Sec. 434. Administrative enforcement in interstate cases.
Sec. 435. Use of forms in interstate enforcement.
                    Part V--Paternity Establishment

Sec. 441. State laws concerning paternity establishment.
Sec. 442. Outreach for voluntary paternity establishment.
       Part VI--Establishment and Modification of Support Orders

Sec. 451. National Child Support Guidelines Commission.
Sec. 452. Simplified process for review and adjustment of child support 
                            orders.
                Part VII--Enforcement of Support Orders

Sec. 461. Federal income tax refund offset.
Sec. 462. Internal Revenue Service collection of arrearages.
Sec. 463. Authority to collect support from Federal employees.
Sec. 464. Enforcement of child support obligations of members of the 
                            Armed Forces.
Sec. 465. Motor vehicle liens.
Sec. 466. Voiding of fraudulent transfers.
Sec. 467. State law authorizing suspension of licenses.
Sec. 468. Reporting arrearages to credit bureaus.
Sec. 469. Extended statute of limitation for collection of arrearages.
Sec. 470. Charges for arrearages.
Sec. 471. Denial of passports for nonpayment of child support.
Sec. 472. International child support enforcement.
                       Part VIII--Medical Support

Sec. 481. Technical correction to ERISA definition of medical child 
                            support order.
                Part IX--Access and Visitation Programs

Sec. 491. Grants to States for access and visitation programs.
   Subtitle B--Child Support Enforcement and Assurance Demonstrations

Sec. 494. Child support enforcement and assurance demonstrations.
   Subtitle C--Demonstration Projects To Provide Services to Certain 
                          Noncustodial Parents

Sec. 495. Establishment of demonstration projects for providing 
                            services to certain noncustodial parents.
                        Subtitle D--Severability

Sec. 496. Severability.
                     TITLE V--TRANSITIONAL MEDICAID

Sec. 501. State option to extend transitional medicaid benefits.
                 TITLE VI--TEENAGE PREGNANCY PREVENTION

Sec. 601. Supervised living arrangements for minors.
Sec. 602. Reinforcing families.
Sec. 603. Required completion of high school or other training for 
                            teenage parents.
Sec. 604. Targeting youth at risk of teenage pregnancy.
Sec. 605. National clearinghouse on teenage pregnancy.
Sec. 606. Denial of Federal housing benefits to minors who bear 
                            children out-of-wedlock.
Sec. 607. National campaign against teenage pregnancy.
   TITLE VII--CHILDREN'S ELIGIBILITY FOR SUPPLEMENTAL SECURITY INCOME

Sec. 701. Short title.
Sec. 702. Purpose.
Sec. 703. Supplemental security income benefits for disabled children.
Sec. 704. Better targeting and use of benefits.
Sec. 705. Encouraging movement toward independence.
            TITLE VIII--FINANCING AND FOOD ASSISTANCE REFORM

                    Subtitle A--Treatment of Aliens

Sec. 801. Uniform alien eligibility criteria for public assistance 
                            programs.
Sec. 802. Extension of deeming of income and resources under 
                            transitional aid, SSI, and food stamp 
                            programs.
Sec. 803. Requirements for sponsor's affidavit of support.
Sec. 804. Extending requirement for affidavits of support to family-
                            related and diversity immigrants.
                     Subtitle B--Revenue Provision

Sec. 811. Earned income tax credit denied to individuals not authorized 
                            to be employed in the United States.
                 Subtitle C--Food Assistance Provisions

Sec. 821. Mandatory claims collection methods.
Sec. 822. Reduction of basic benefit level.
Sec. 823. Prorating benefits after interruptions in participation.
Sec. 824. Work requirement for able-bodied recipients.
Sec. 825. Extending current claims retention rates.
Sec. 826. Two-year freeze of standard deduction.
Sec. 827. Nutrition assistance for Puerto Rico.
Sec. 828. Repeal of special rule for persons who do not purchase and 
                            prepare food separately.
Sec. 829. Earnings of certain high school students counted as income.
Sec. 830. Energy assistance counted as income.
Sec. 831. Vendor payments for transitional housing counted as income.
Sec. 832. Denial of food stamp benefits for 10 years to certain 
                            individuals found to have fraudulently 
                            misrepresented residence to obtain 
                            benefits.
Sec. 833. Disqualification relating to child support arrears.
Sec. 834. Limiting adjustment of minimum benefit.
Sec. 835. Penalty for failure to comply with work requirements of other 
                            programs.
Sec. 836. Resumption of discretionary funding for nutrition education 
                            and training program.
Sec. 837. Improvement of child and adult care food program operated 
                            under the National School Lunch Act.
                Subtitle D--Supplemental Security Income

Sec. 841. Verification of eligibility for certain SSI disability 
                            benefits.
Sec. 842. Nonpayment of SSI disability benefits to substance abusers.
            TITLE IX--LEGISLATIVE PROPOSALS; EFFECTIVE DATE

Sec. 901. Secretarial submission.
Sec. 902. Effective date.
                   TITLE I--TRANSITIONAL AID PROGRAM

SEC. 101. TRANSITIONAL AID PROGRAM.

    (a) In General.--Title IV (42 U.S.C. 601 et seq.) is amended by 
striking part A and inserting the following:

                   ``PART A--TRANSITIONAL AID PROGRAM

``SEC. 401. PURPOSE AND APPROPRIATION.

    ``(a) Purpose.--It is the purpose of this part to provide a program 
of transitional aid to families with needy children to enhance the 
well-being of such needy children, and to enable parents of children in 
such families to obtain and retain work and to become self-sufficient.
    ``(b) Appropriations.--There is hereby authorized to be 
appropriated and are appropriated for each fiscal year such sums as may 
be necessary to carry out the purposes of this part. The sums made 
available under this subsection shall be used for making payments to 
States which have submitted, and had approved by the Secretary, State 
plans for providing a program of transitional aid.

``SEC. 402. STATE PLANS FOR, AND GENERAL REQUIREMENTS OF, TRANSITIONAL 
              AID PROGRAM.

    ``(a) State Plans.--A State plan for a transitional aid program 
shall meet the requirements of the following paragraphs:
            ``(1) Election of options in program design.--The State 
        plan shall describe the State's policies regarding eligibility, 
        services, assistance amounts, and program requirements, 
        including a description of:
                    ``(A) The support and benefits (including benefit 
                levels) provided to individuals eligible to participate 
                and whether such support is in the form of wages in 
                subsidized public or nonprofit employment or direct 
                subsidies to employers.
                    ``(B) The extent to which earned or unearned income 
                is disregarded in determining eligibility for, and 
                amount of, assistance.
                    ``(C) The State's policy for determining the extent 
                to which child support received on behalf of a member 
                of the family is disregarded in determining eligibility 
                for, and the amount of, assistance.
                    ``(D) The treatment of earnings of a child living 
                in the home.
                    ``(E) The State's resource limit, including a 
                description of the policy determined by the State 
                regarding any exclusion allowed for vehicles owned by 
                family members, resources set aside for future needs of 
                a child, individual development accounts, or other 
                policies established by the State to encourage savings.
                    ``(F) Any restrictions the State elects to impose 
                relating to eligibility for assistance of two-parent 
                families.
                    ``(G) The criteria for participating in the program 
                including requirements that a family must comply with 
                as a condition of receiving aid, such as school 
                attendance, participation in appropriate preemployment 
                activities, and receipt of appropriate childhood 
                immunizations. The plan shall specify whether the State 
                elects to provide incentives for compliance with the 
                requirements, sanctions for noncompliance, or a 
                combination of incentives and sanctions that the State 
                determines appropriate.
                    ``(H) The sanctions imposed on individuals who fail 
                to comply with the State's program requirements without 
                good cause, including the amount and length of time of 
                such sanctions,
                 provided that if the sanction results in complete 
elimination of aid to the family, the State plan shall describe the 
procedures used to ensure the well-being of children.
                    ``(I) Whether payment is made or denied for a child 
                conceived during a period in which such child's parent 
                was receiving aid under the program.
                    ``(J) Whether the State elects to establish a time 
                limit after which an individual must comply with 
                continuous or additional work requirements under part F 
                as a condition for receiving aid under the State plan 
                approved under this part.
            ``(2) Parental responsibility agreements and wage plans.--
                    ``(A) In general.--The State plan shall provide 
                that the State require the parent or caretaker relative 
                to enter into--
                            ``(i) a Parental Responsibility Agreement 
                        in accordance with subparagraph (B), or
                            ``(ii) a Parental Responsibility Agreement 
                        in accordance with subparagraph (B) and a Wage 
                        Plan in accordance with section 491(b) if such 
                        parent or caretaker relative is required to 
                        participate in the WAGE program.
                    ``(B) Description of parental responsibility 
                agreement.--A Parental Responsibility Agreement is a 
                statement signed by the applicant for aid that--
                            ``(i) specifies that the transitional aid 
                        program is a privilege,
                            ``(ii) the transitional aid program is a 
                        transitional program to move recipients into 
                        work and self-sufficiency, and
                            ``(iii) the individual must abide by any 
                        requirements of the State or risk forfeiting 
                        eligibility for transitional aid.
            ``(3) Statewide plan.--The State plan shall be in effect in 
        all political subdivisions of the State. If such plan is not 
        administered uniformly throughout the State, the plan shall 
        describe the variations.
            ``(4) General eligibility requirement.--
                    ``(A) In general.--The State plan shall ensure that 
                transitional aid is provided to all families with needy 
                children and that such aid is furnished with reasonable 
                promptness to individuals found eligible under the 
                State plan. In providing such assistance, States will 
                take into account the income and needs of a parent of a 
                needy child if the parent is living in the same home as 
                the child.
                    ``(B) Needy child.--For purposes of subparagraph 
                (A), a needy child shall be determined by the State, 
                but shall be a child who--
                            ``(i) is under the age of 18, or
                            ``(ii) at the option of the State, under 
                        the age of 19 and a full-time student in a 
                        secondary school (or in the equivalent level of 
                        vocational or technical training).
                    ``(C) Pregnant woman.--At the option of the State, 
                the State may provide transitional aid to an individual 
                who does not have a needy child if such individual is 
                pregnant, and such transitional aid is provided--
                            ``(i) in order to meet the needs of the 
                        individual occasioned by or resulting from her 
                        pregnancy, and
                            ``(ii) not more than 3 months before and 
                        after the date the woman's child is expected to 
                        be born.
                    ``(D) Persons other than parents.--For purposes of 
                this paragraph, a State may provide that the following 
                individuals shall constitute a family with a needy 
                child if such individuals are living in the same home 
                as the child:
                            ``(i) Any relative or legal guardian of the 
                        child.
                            ``(ii) Any person who participates in the 
                        Food Stamp program with the child.
                            ``(iii) Any other person who provides--
                                    ``(I) care for an incapacitated 
                                family member (which, for purposes of 
                                this subparagraph only, may include a 
                                child receiving supplemental security 
                                income benefits under title XVI; or
                                    ``(II) child care to enable a 
                                caretaker relative to work outside the 
                                home or to participate in the WAGE 
                                program.
            ``(5) Child care services.--The State plan shall provide 
        that no individual shall be sanctioned for failure to comply 
        with the State's WAGE program requirements if such individual 
        needs child care assistance in order to participate, and the 
        State fails to provide such assistance.
            ``(6) Verification system.--The State plan shall provide 
        that information is requested and exchanged for purposes of 
        income and eligibility verification in accordance with a State 
        system which meets the requirements of section 1137, unless the 
        State has established an alternative system under section 411 
        to prevent fraud and abuse.
            ``(7) Alien eligibility.--The State plan shall provide that 
        in order for an individual to be eligible for transitional aid 
        under this part, the individual shall be--
                    ``(A) a citizen or national of the United States, 
                or
                    ``(B) a qualified alien (as defined in section 
                1101(a)(10)), provided that such alien is not 
                disqualified from receiving aid under this part by 
                reason of section 210(f) or 245A(h) of the Immigration 
                and Nationality Act (8 U.S.C. 1160(f) or 1255a(h)) or 
                any other provision of law.
            ``(8) Detection of fraud.--
                    ``(A) In general.--The State plan shall provide (in 
                accordance with regulations issued by the Secretary) 
                for appropriate measures to detect fraudulent 
                applications for transitional aid to families with 
                needy children before establishing eligibility for such 
                aid.
                    ``(B) Description of fraud control program.--If the 
                State has elected to establish and operate a fraud 
                control program under section 411, the State shall 
                submit to the Secretary (with such revisions as may 
                from time to time be necessary) a description of such 
                program and will operate such program in full 
                compliance with such section 411.
            ``(9) Participation in child support enforcement.--The 
        State plan shall provide--
                    ``(A) that the State has in effect a plan approved 
                under part D and operates a child support enforcement 
                program in substantial compliance with such plan, and
                    ``(B) that, as a condition of eligibility for aid, 
                each applicant or recipient will be required (subject 
                to subparagraph (D))--
                            ``(i) to assign the State any rights to 
                        support from any other person such applicant 
                        may have in such applicant's own behalf or in 
                        behalf of any other family member for whom the 
                        applicant is applying for or receiving aid; and
                            ``(ii) to cooperate with the State--
                                    ``(I) in establishing the paternity 
                                of a child born out of wedlock with 
                                respect to whom aid is claimed, and
                                    ``(II) in obtaining support 
                                payments for such applicant and for a 
                                child with respect to whom such aid is 
                                claimed;
                    ``(C) that the State agency will immediately refer 
                each applicant requiring paternity establishment, award 
                establishment, or child support enforcement services to 
                the State agency administering the program under part 
                D;
                    ``(D) that an individual shall be required to 
                cooperate with the State, as provided under 
                subparagraph (B), unless the individual is found to 
                have good cause for refusing to cooperate, as 
                determined in accordance with standards prescribed by 
                the Secretary, which standards shall take into 
                consideration the best interests of the child on whose 
                behalf aid is claimed to the satisfaction of the State 
                agency administering the program under part D, as 
                determined in accordance with section 454(26);
                    ``(E) that--
                            ``(i) (except as provided in clause (ii)) 
                        an applicant requiring services provided under 
                        part D shall not be eligible for any aid under 
                        this part until such applicant--
                                    ``(I) has furnished to the agency 
                                administering the State plan under part 
                                D the information specified in section 
                                454(26)(E); or
                                    ``(II) has been determined by such 
                                agency to have good cause not to 
                                cooperate; and
                            ``(ii) that the provisions of clause (i) 
                        shall not apply--
                                    ``(I) if the agency specified in 
                                clause (i) has not within 10 days after 
                                such individual was referred to such 
                                agency, provided the notification 
                                required by section 454(26)(D)(iii), 
                                until such notification is received; 
                                and
                                    ``(II) if such individual appeals a 
                                determination that the individual lacks 
                                good cause for noncooperation, until 
                                after such determination is affirmed 
                                after notice and opportunity for a 
                                hearing; and
                    ``(F) that, if the relative with whom a child is 
                living is found to be ineligible because of failure to 
                comply with the requirements of subparagraph (B), the 
                State may authorize protective payments as provided for 
                in section 405.
            ``(10) Automated data processing system.--The State plan 
        may, at the option of the State, provide for the establishment 
        and operation, in accordance with an (initial and annually 
        updated) advance automated data processing planning document 
        approved under subsection (c) of an automated statewide 
        management information system designed effectively and 
        efficiently, to assist management in the administration of the 
        State plan for transitional aid to families with needy children 
        approved under this part, so as--
                    ``(A) to control and account for--
                            ``(i) all the factors in the total 
                        eligibility determination process under such 
                        plan for aid (including but not limited to (I) 
                        identifiable correlation factors (such as 
                        social security numbers, names, dates of birth, 
                        home addresses, and mailing addresses 
                        (including postal ZIP codes) of all applicants 
                        and recipients of such aid and the relative 
                        with whom any child who is such an applicant or 
                        recipient is living) to assure sufficient 
                        compatibility among the systems of different 
                        jurisdictions to permit periodic screening to 
                        determine whether an individual is or has been 
                        receiving benefits from more than one 
                        jurisdiction, (II) checking records of 
                        applicants and recipients of such aid on a 
                        periodic basis with other agencies, both intra- 
                        and inter-State, for determination and 
                        verification of eligibility and payment 
                        pursuant to requirements imposed by other 
                        provisions of this title),
                            ``(ii) the costs, quality, and delivery of 
                        funds and services furnished to applicants for 
                        and recipients of such aid;
                    ``(B) to notify the appropriate officials of child 
                support, food stamp, social service, and medical 
                assistance programs approved under title XIX whenever 
                the recipient becomes ineligible or the amount of aid 
                or services is changed; and
                    ``(C) to provide for security against unauthorized 
                access to, or use of, the data in such system.
            ``(11) Participation in wage.--The State plan shall 
        provide--
                    ``(A) that the State operate a WAGE program in 
                accordance with part F, and
                    ``(B) a description of individuals required to 
                participate in the WAGE program in the State; such 
                individuals may not include the following:
                            ``(i) Parents of children under 12 weeks of 
                        age or, at the State's option, up to 1 year.
                            ``(ii) Individuals who are ill or 
                        incapacitated, as defined by the State.
                            ``(iii) Individuals who are needed in the 
                        home on a full-time basis to care for a 
                        disabled child or other household member.
                            ``(iv) Individuals who are over 60 years of 
                        age.
                            ``(v) Individuals under age 16 other than 
                        teenage parents.
            ``(12) Report of child abuse.--The State plan shall provide 
        that the State agency will--
                    ``(A) report to an appropriate agency or official, 
                known or suspected instances of physical or mental 
                injury, sexual abuse or exploitation, or negligent 
                treatment or maltreatment of a child receiving aid 
                under this part under circumstances which indicate that 
                the child's health or welfare is threatened thereby; 
                and
                    ``(B) provide such information with respect to a 
                situation described in subparagraph (A) as the State 
                agency may have.
    ``(b) Approval of State Plans.--
            ``(1) In general.--Not later than 60 days after the date a 
        State submits to the Secretary a plan that provides for the 
        establishment and operation of a program or an amendment to 
        such plan that meets the requirements of subsection (a), the 
        Secretary shall approve the plan.
            ``(2) Authority to extend deadline.--The 60-day deadline 
        established in paragraph (1) with respect to a State may be 
        extended in accordance with an agreement between the Secretary 
        and the State.
    ``(c) Approval of Automatic Data Processing Planning Document; 
Review of Management Information Systems; Failure To Comply; Reduction 
of Payments.--
            ``(1) Approval of automated data processing planning 
        document.--The Secretary shall not approve the initial and 
        annually updated advance automated data processing planning 
        document, referred to in paragraph (2), unless the Secretary 
        finds that such document, when implemented, will generally 
        carry out the objectives of the statewide management system 
        referred to in such paragraph, and such document--
                    ``(A) provides for the conduct of, and reflects the 
                results of, requirements analysis studies, which 
                include consideration of the program mission, 
                functions, organization, services, constraints, and 
                current support, of, in, or relating to, such system,
                    ``(B) contains a description of the proposed 
                statewide management system, including a description of 
                information flows, input data, and output reports and 
                uses,
                    ``(C) sets forth the security and interface 
                requirements to be employed in such statewide 
                management system,
                    ``(D) describes the projected resource requirements 
                for staff and other needs, and the resources available 
                or expected to be available to meet such requirements,
                    ``(E) includes cost-benefit analyses of each 
                alternative management system, data processing services 
                and equipment, and a cost allocation plan containing 
                the basis for rates, both direct and indirect, to be in 
                effect under such statewide management system,
                    ``(F) contains an implementation plan with charts 
                of development events, testing descriptions, proposed 
                acceptance criteria, and backup and fallback procedures 
                to handle possible failure of contingencies, and
                    ``(G) contains a summary of proposed improvements 
                of such statewide management system in terms of 
                qualitative and quantitative benefits.
            ``(2) Secretarial review.--
                    ``(A) In general.--The Secretary shall, on a 
                continuing basis, review, assess, and inspect the 
                planning, design, and operation of, statewide 
                management information systems referred to in section 
                403(a)(2), with a view to determining whether, and to 
                what extent, such systems meet and continue to meet 
                requirements imposed under such section and the 
                conditions specified under paragraph (10) of subsection 
                (a).
                    ``(B) Suspension of approval.--If the Secretary 
                finds with respect to any statewide management 
                information system referred to in section 403(a)(2) 
                that there is a failure substantially to comply with 
                criteria, requirements, and other undertakings, 
                prescribed by the advance automated data processing 
                planning document previously approved by the Secretary 
                with respect to such system, then the Secretary shall 
                suspend his approval of such document until there is no 
                longer any such failure of such system to comply with 
                such criteria, requirements, and other undertakings so 
                prescribed.
                    ``(C) Reduction of payments under section 403.--If 
                the Secretary determines that such a system has not 
                been implemented by the State by the date specified for 
                implementation in the State's advance automated data 
                processing planning document, then the Secretary shall 
                reduce payments to such State, in accordance with 
                section 403(b), in an amount equal to 40 percent of the 
                expenditures referred to in section 403(a)(2) with 
                respect to which payments were made to the State under 
                section 403(a)(2). The Secretary may extend the 
                deadline for implementation if the State demonstrates 
                to the satisfaction of the Secretary that the State 
                cannot implement such system by the date specified in 
                such planning document due to circumstances beyond the 
                State's control.
    ``(d) Temporary Disqualification of Certain Newly Legalized 
Aliens.--For temporary disqualification of certain newly legalized 
aliens from receiving transitional aid to families with needy children, 
see subsection (h) of section 245A of the Immigration and Nationality 
Act (8 U.S.C. 1255a), subsection (f) of section 210 of such Act (8 
U.S.C. 1160), and subsection (d)(7) of section 210A of such Act (8 
U.S.C. 1161).
    ``(e) Impact on Medicaid Benefits of Noncompliance With Certain TAP 
and WAGE Requirements.--If a family becomes ineligible to receive 
transitional aid under the State transitional aid program because an 
individual in such family fails to comply with the requirements of this 
part--
            ``(1) a needy child of such family shall remain eligible 
        for medical assistance under the State's plan approved under 
        title XIX, and
            ``(2) the family shall be appropriately notified of such 
        extension (in the State agency's notice to the family of the 
        termination of its eligibility for such aid) as required by 
        section 1925(a)(2).

``SEC. 403. PAYMENTS TO STATES.

    ``(a) Computation of Amounts.--From the sums appropriated therefor, 
the Secretary of the Treasury shall pay to each State which has an 
approved plan for a transitional aid program, for each quarter, 
beginning with the quarter commencing October 1, 1995, an amount equal 
to--
            ``(1) the Federal medical assistance percentage (as defined 
        in section 1905(b)) of the expenditures by the State for 
        benefits and assistance under such plan, and
            ``(2) 50 percent of so much of the sums expended during 
        such quarter as are attributable to the planning, design, 
        development, or installation of
         such statewide mechanized claims processing and information 
retrieval systems as--
                    ``(A) meet the conditions of section 402(a)(10), 
                and
                    ``(B) the Secretary determines are likely to 
                provide more efficient, economical, and effective 
                administration of the plan and to be compatible with 
                the claims processing and information retrieval systems 
                utilized in the administration of State plans approved 
                under title XIX, and State programs with respect to 
                which there is Federal financial participation under 
                title XX.
    ``(b) Method of Computation and Payment.--The method of computing 
and paying such amounts shall be as follows:
            ``(1) Estimates.--The Secretary shall, prior to the 
        beginning of each quarter, estimate the amount to be paid to 
        the State for such quarter under the provisions of subsection 
        (a) of this section, such estimate to be based on--
                    ``(A) a report filed by the State containing its 
                estimate of the total sum to be expended in such 
                quarter in accordance with the provisions of such 
                subsection and stating the amount appropriated or made 
                available by the State and its political subdivisions 
                for such expenditures in such quarter, and if such 
                amount is less than the State's proportionate share of 
                the total sum of such estimated expenditures, the 
                source or sources from which the difference is expected 
                to be derived,
                    ``(B) records showing the number of needy children 
                in the State, and
                    ``(C) such other information as the Secretary may 
                find necessary.
            ``(2) Adjustments for prior quarters.--The Secretary of 
        Health and Human Services shall then certify to the Secretary 
        of the Treasury the amount so estimated by the Secretary of 
        Health and Human Services--
                    ``(A) reduced or increased, as the case may be, by 
                any sum by which the Secretary finds that the 
                Secretary's estimate for any prior quarter was greater 
                or less than the amount which should have been paid to 
                the State for such quarter,
                    ``(B) reduced by a sum equivalent to the pro rata 
                share to which the United States is equitably entitled, 
                as determined by the Secretary of Health and Human 
                Services, of the net amount recovered during any prior 
                quarter by the State or any political subdivision 
                thereof with respect to transitional aid to families 
                with needy children furnished under the State plan, and
                    ``(C) reduced by such amount as is necessary to 
                provide the `appropriate reimbursement of the Federal 
                Government' that the State is required to make under 
                section 457 out of that portion of child support 
                collections retained by the State pursuant to such 
                section,
        except that such increases or reductions shall not be made to 
        the extent that such sums have been applied to make the amount 
        certified for any prior quarter greater or less than the amount 
        estimated by the Secretary of Health and Human Services for 
        such prior quarter.
            ``(3) Payment of the amount certified.--The Secretary of 
        the Treasury shall thereupon, through the Fiscal Service of the 
        Department of the Treasury and prior to audit or settlement by 
        the General Accounting Office, pay to the State, at the time or 
        times fixed by the Secretary of Health and Human Services, the 
        amount so certified.
    ``(c) Uniform Reporting Requirements.--In order to assist in 
obtaining the information needed to carry out subsection (b)(1) and 
otherwise to perform the Secretary's duties under this part, the 
Secretary shall establish uniform reporting requirements under which 
each State will be required to furnish data regarding--
            ``(1) the monthly number of families assisted under this 
        part;
            ``(2) the types of such families;
            ``(3) the monthly number of children assisted under this 
        part;
            ``(4) the amounts expended to serve such families and 
        children;
            ``(5) the length of time for which such families and 
        children are assisted;
            ``(6) the number of families and children receiving child 
        care assistance;
            ``(7) the number of families receiving transitional 
        medicaid assistance; and
            ``(8) in what form the amounts of assistance are being 
        spent (the amount spent on wage subsidies compared to the 
        amount spent on cash benefits).
    ``(d) Bonus Amount.--
            ``(1) In general.--For fiscal year 1997 and each fiscal 
        year thereafter, a State operating a transitional aid program 
        under part A in the preceding fiscal year meeting the 
        requirements of paragraph (2) shall receive a bonus amount 
        equal to 10 percent of the base payment amount determined for 
        such State under section 481(b).
            ``(2) Requirements.--A transitional aid program meets the 
        requirements of this paragraph if the program--
                    ``(A) provides for disregards of earned income for 
                families receiving transitional aid to ensure that a 
                family in which a family member worked part-time in a 
                minimum wage job did not have a lower monthly income 
                after calculation of reasonable work-related expenses 
                than a family of the same size in which a family member 
                did not work;
                    ``(B) provides that calculation of the level of 
                transitional aid under the program for a family is 
                based only on the needs of needy children and the 
                caretaker relatives of such children; and
                    ``(C) provides for equal treatment of one-parent 
                and two-parent families.

``SEC. 404. DEVIATION FROM PLAN.

    ``(a) Stoppage of Payments.--In the case of any State plan for 
transitional aid to families with needy children which has been 
approved by the Secretary, if the Secretary, after reasonable notice 
and opportunity for hearing to the State agency administering or 
supervising the administration of such plan, finds that in the 
administration of the plan there is a failure to comply substantially 
with any provision required by section 402(a) to be included in the 
plan, the Secretary shall notify such State agency that further 
payments will not be made to the State (or in the Secretary's 
discretion, that payments will be limited to categories under or parts 
of the State plan not affected by such failure) until the Secretary is 
satisfied that such prohibited requirement is no longer so imposed, and 
that there is no longer any such failure to comply. Until the Secretary 
is so satisfied the Secretary shall make no further payments to such 
State (or shall limit payments to categories under or parts of the 
State plan not affected by such failure).
    ``(b) Misuse of Funds.--In any case in which the Secretary finds 
that a State has misappropriated or misused funds appropriated pursuant 
to section 403, the Secretary shall reduce the payment to which the 
State would otherwise be entitled under this part for the fiscal year 
following the fiscal year in which such finding is made by
 an amount equal to two times the amount of funds found to be misused 
or misappropriated.

``SEC. 405. USE OF PAYMENTS FOR BENEFIT OF CHILDREN.

    ``Whenever the State agency has reason to believe that any payments 
of transitional aid to families with needy children made with respect 
to a child are not being or may not be used in the best interests of 
the child, the State agency may provide for such counseling and 
guidance services with respect to the use of such payments and the 
management of other funds by the relative receiving such payments as it 
deems advisable in order to assure use of such payments in the best 
interests of such child, and may provide for advising such relative 
that continued failure to so use such payments will result in 
substitution therefor of such protective payments as the State may 
authorize, or in seeking appointment of a guardian or legal 
representative as provided in section 1111, or in the imposition of 
criminal or civil penalties authorized under State law if it is 
determined by a court of competent jurisdiction that such relative is 
not using or has not used for the benefit of the child any such 
payments made for that purpose; and the provision of such services or 
advice by the State agency (or the taking of the action specified in 
such advice) shall not serve as a basis for withholding funds from such 
State under section 404 and shall not prevent such payments with 
respect to such child from being considered transitional aid to 
families with needy children.

``SEC. 406. SPECIAL RULE.

    ``Each needy child, and each relative with whom such a child is 
living (including the spouse of such relative), who becomes ineligible 
for transitional aid to families with needy children as a result 
(wholly or partly) of the collection or increased collection of child 
or spousal support under part D of this title, and who has received 
such aid in at least 3 of the 6 months immediately preceding the month 
in which such ineligibility begins, shall be deemed to be a recipient 
of transitional aid to families with needy children for purposes of 
title XIX for an additional 4 calendar months beginning with the month 
in which such ineligibility begins.
``SEC. 407. PERFORMANCE MEASUREMENT SYSTEM.

    ``(a) In General.--Not later than July 1, 1996, the Secretary, in 
consultation with the States, shall submit recommendations to Congress 
to streamline the system for monitoring the accuracy of payments made 
for transitional aid to families with needy children and for 
transforming the transitional aid program into a system that measures a 
State's performance in moving recipients of such aid into permanent 
employment.
    ``(b) Details of Recommendations.--The recommendations required by 
subsection (a) shall--
            ``(1) be based on a system which replaces the AFDC quality 
        control system (described in section 408 of the Social Security 
        Act as in effect on the day before the date of the enactment of 
        the Work and Gainful Employment Act),
            ``(2) include an effort to ensure the continuity of 
        recipient data collected under the AFDC quality control system 
        and the new streamlined system, and
            ``(3) integrate the performance measurements under the WAGE 
        program and any other applicable performance measurements that 
        are designed to measure the effectiveness of States in 
        promoting work.

``SEC. 408. EXCLUSION FROM TRANSITIONAL AID PROGRAM UNIT OF INDIVIDUALS 
              FOR WHOM CERTAIN PAYMENTS ARE MADE.

    ``(a) Exclusion of Children Receiving Foster Care, Etc.--
Notwithstanding any other provision of this title (other than 
subsection (b))--
            ``(1) a child with respect to whom foster care maintenance 
        payments or adoption assistance payments are made under part E 
        of this title or under State or local law, or a child or parent 
        receiving benefits under title XVI of this Act, shall not, for 
        the period for which such payments are made, be regarded as a 
        member of a family for purposes of determining the amount of 
        benefits of the family under this part; and
            ``(2) the income and resources of such child or parent 
        shall be excluded from the income and resources of a family 
        under this part.
    ``(b) Limitation.--Subsection (a) of this section shall not apply 
in the case of a child with respect to whom adoption assistance 
payments are made under part E of this title or under State or local 
law, if application of such subsection would reduce the benefits under 
this part of the family of which the child would otherwise be regarded 
as a member.

``SEC. 409. TECHNICAL ASSISTANCE FOR DEVELOPING MANAGEMENT INFORMATION 
              SYSTEMS.

    ``The Secretary shall provide such technical assistance to States 
as the Secretary determines necessary to assist States to plan, design, 
develop, or install and provide for the security of, the management 
information systems referred to in section 403(a)(2).
``SEC. 410. ATTRIBUTION OF INCOME AND RESOURCES OF SPONSOR AND SPOUSE 
              TO ALIEN.

    ``(a) Applicability; Time Period.--For purposes of determining 
eligibility for and the amount of benefits under a State plan approved 
under this part for an individual who is a qualified alien described in 
section 402(a)(7), the income and resources of any person who (as a 
sponsor of such individual's entry into the United States) executed an 
affidavit of support or similar agreement with respect to such 
individual, and the income and resources of the sponsor's spouse, shall 
be deemed to be the unearned income and resources of such individual 
(in accordance with subsections (b) and (c) of this section) for a 
period determined under section 802 of the Work and Gainful Employment 
Act, except that this section is not applicable if such individual is a 
needy child and such sponsor (or such sponsor's spouse) is the parent 
of such child.
    ``(b) Computation.--
            ``(1) Amount deemed unearned income.--The amount of income 
        of a sponsor (and his spouse) which shall be deemed to be the 
        unearned income of a qualified alien for any month shall be 
        determined as follows:
                    ``(A) The total amount of earned and unearned 
                income of such sponsor and such sponsor's spouse (if 
                such spouse is living with the sponsor) shall be 
                determined for such month.
                    ``(B) The amount determined under subparagraph (A) 
                shall be reduced by an amount equal to the sum of--
                            ``(i) the lesser of--
                                    ``(I) 20 percent of the total of 
                                any amounts received by the sponsor and 
                                his spouse in such month as wages or 
                                salary or as net earnings from self 
                                employment, plus the full amount of any 
                                costs incurred by them in producing 
                                self-employment income in such month, 
                                or
                                    ``(II) $175;
                            ``(ii) the cash needs standard established 
                        by the State under its plan for a family of the 
                        same size and composition as the sponsor and 
                        those other individuals living in the same 
                        household as the sponsor who are claimed by him 
                        as dependents for purposes of determining his 
                        Federal personal income tax liability but whose 
                        needs are not taken into account by the State 
                        for the purpose of determining eligibility for 
                        transitional aid under this part;
                            ``(iii) any amounts paid by the sponsor (or 
                        his spouse) to individuals not living in such 
                        household who are claimed by him as dependents 
                        for purposes of determining his Federal 
                        personal income tax liability; and
                            ``(iv) any payments of alimony or child 
                        support with respect to individuals not living 
                        in such household.
            ``(2) Amount deemed resources.--The amount of resources of 
        a sponsor (and his spouse) which shall be deemed to be the 
        resources of a qualified alien for any month shall be 
        determined as follows:
                    ``(A) The total amount of the resources (determined 
                as if the sponsor were applying for aid under the State 
                plan approved under this part) of such sponsor and such 
                sponsor's spouse (if such spouse is living with the 
                sponsor) shall be determined.
                    ``(B) The amount determined under subparagraph (A) 
                shall be reduced by $1,500.
    ``(c) Provision of Information by Alien Concerning the Alien's 
Sponsor; Receipt of Information From Departments of State and 
Justice.--
            ``(1) Information required.--Any individual who is an alien 
        and whose sponsor was a public or private agency shall be 
        ineligible for aid under a State plan approved under this part 
        during the period determined under section 802 of the Work and 
        Gainful Employment Act, unless the State agency administering 
        such plan determines that such sponsor either no longer exists 
        or has become unable to meet such individual's needs; and such 
        determination shall be made by the State agency based upon such 
        criteria as it may specify in the State plan, and upon such 
        documentary evidence as it may therein require. Any such 
        individual, and any other individual who is a qualified alien 
        (as a condition of his or her eligibility for aid under a State 
        plan approved under this part during the period determined 
        under section 802 of the Work and Gainful Employment Act, shall 
        be required to provide to the State agency administering such 
        plan such information and documentation with respect to his 
        sponsor as may be necessary in order for the State agency to 
        make any determination required under this section, and to 
        obtain any cooperation from such sponsor necessary for any such 
        determination. Such alien shall also be required to provide to 
        the State agency such information and documentation as it may 
        request and which such alien or his sponsor provided in support 
        of such alien's immigration application.
            ``(2) Cooperation with secretary of state and attorney 
        general.--The Secretary shall enter into agreements with the 
        Secretary of State and the Attorney General whereby any 
        information available to them and required in order to make any 
        determination under this section will be provided by them to 
        the Secretary (who may, in turn, make such information 
        available, upon request, to a concerned State agency), and 
        whereby the Secretary of State and Attorney General will inform 
        any sponsor of an alien, at the time such sponsor executes an 
        affidavit of support or similar agreement, of the requirements 
        imposed by this section.
    ``(d) Joint and Several Liability of Alien and Sponsor for 
Overpayment of Aid During Specified Period Following Entry.--Any 
sponsor of a qualified alien, and such alien, shall be jointly and 
severally liable for an amount equal to any overpayment of aid under 
the State plan made to such alien during the period determined under 
section 802 of the Work and Gainful Employment Act, on account of such 
sponsor's failure to provide correct information under the provisions 
of this section, except where such sponsor was without fault, or where 
good cause of such failure existed. Any such overpayment which is not 
repaid to the State or recovered in accordance with the procedures 
generally applicable under the State plan to the recoupment of 
overpayments shall be withheld from any subsequent payment to which 
such alien or such sponsor is entitled under any provision of this Act.
    ``(e) Division of Income and Resources of Individual Sponsoring Two 
or More Aliens Living in Same Home.--
            ``(1) In general.--In any case where a person is the 
        sponsor of two or more alien individuals who are living in the 
        same home, the income and resources of such sponsor (and his 
        spouse), to the extent they would be deemed the income and 
        resources of any one of such individuals under the preceding 
        provisions of this section, shall be divided into two or more 
        equal shares (the number of shares being the same as the number 
        of such alien individuals) and the income and resources of each 
        such individual shall be deemed to include one such share.
            ``(2) Deemed income and resources.--Income and resources of 
        a sponsor (and his spouse) which are deemed under this section 
        to be the income and resources of any alien individual in a 
        family shall not be considered in determining the need of other 
        family members except to the extent such income or resources 
        are actually available to such other members.
    ``(f) Aliens Not Covered.--The provisions of this section shall not 
apply with respect to any alien who is--
            ``(1) admitted to the United States as a result of the 
        application, prior to April 1, 1980, of the provisions of 
        section 203(a)(7) of the Immigration and Nationality Act (8 
        U.S.C. 1153(a)(7));
            ``(2) admitted to the United States as a result of the 
        application, after March 31, 1980, of the provisions of section 
        207(c) of such Act;
            ``(3) paroled into the United States as a refugee under 
        section 212(d)(5) of such Act;
            ``(4) granted political asylum by the Attorney General 
        under section 208 of such Act; or
            ``(5) a Cuban or Haitian entrant, as defined in section 
        501(e) of the Refugee Education Assistance Act of 1980 (Public 
        Law 96-422).

``SEC. 411. FRAUD CONTROL.

    ``(a) Election for Fraud Control Program.--Any State, in the 
administration of its State plan approved under section 402, may elect 
to establish and operate a fraud control program in accordance with 
this section.
    ``(b) Penalty for False or Misleading Statement or 
Misrepresentation of Fact.--Under any such program, if an individual 
who is a member of a family applying for or receiving aid under the 
State plan approved under section 402 is found by a Federal or State 
court or pursuant to an administrative hearing meeting requirements 
determined in regulations of the Secretary, on the basis of a plea of 
guilty or nolo contendere or otherwise, to have intentionally--
            ``(1) made a false or misleading statement or 
        misrepresented, concealed, or withheld facts, or
            ``(2) committed any act intended to mislead, misrepresent, 
        conceal, or withhold facts or propound a falsity, for the 
        purpose of establishing or maintaining the family's eligibility 
        for aid under such State plan or of increasing (or preventing a 
        reduction in) the amount of such aid, then the needs of such 
        individual shall not be taken into account by the State in 
        determining eligibility for transitional aid under this part 
        with respect to his or her family--
                    ``(A) for a period of 6 months upon the first 
                occasion of any such offense,
                    ``(B) for a period of 12 months upon the second 
                occasion of any such offense, and
                    ``(C) permanently upon the third or a subsequent 
                occasion of any such offense.
    ``(c) Proceedings Against Violators by State Agency.--The State 
agency involved shall proceed against any individual alleged to have 
committed an offense described in subsection (b) either by way of 
administrative hearing or by referring the matter to the appropriate 
authorities for civil or criminal action in a court of law. The State 
agency shall coordinate its actions under this section with any 
corresponding actions being taken under the food stamp program in any 
case where the factual issues involved arise from the same or related 
circumstances.
    ``(d) Duration of Period of Sanctions; Review.--Any period for 
which sanctions are imposed under subsection (b) shall remain in 
effect, without possibility of administrative stay, unless and until 
the finding upon which the sanctions were imposed is subsequently 
reversed by a court of appropriate jurisdiction; but in no event shall 
the duration of the period for which such sanctions are imposed be 
subject to review.
    ``(e) Additional Sanctions Provided by Law.--The sanctions provided 
under subsection (b) shall be in addition to, and not in substitution 
for, any other sanctions which may be provided for by law with respect 
to the offenses involved.
    ``(f) Written Notice of Penalties for Fraud.--Each State which has 
elected to establish and operate a fraud control program under this 
section must provide all applicants for transitional aid to families 
with needy children under its approved State plan, at the time of their 
application for such aid, with a written notice of the penalties for 
fraud which are provided for under this section.

``SEC. 412. ASSISTANT SECRETARY FOR FAMILY SUPPORT.

    ``The programs under this part, part D, and part F of this title 
shall be administered by an Assistant Secretary for Family Support 
within the Department of Health and Human Services, who shall be 
appointed by the President, by and with the advice and consent of the 
Senate, and who shall be in addition to any other Assistant Secretary 
of Health and Human Services provided for by law.''.
    (b) Transition From AFDC to Transitional Aid Program.--In the case 
of any individual who is an applicant for or recipient of aid to 
families with dependent children under part A of title IV of the Social 
Security Act, as in effect on the day before the effective date of this 
title, the State may, at the State's option, provide that--
            (1) such individual be treated as an applicant for or 
        recipient of (as the case may be) transitional aid to families 
        with needy children under part A of title IV of the Social 
        Security Act as in effect on such effective date, or
            (2) such individual submit an application for transitional 
        aid in accordance with the provisions of the State plan 
        approved under such part A as so in effect.
          TITLE II--WORK AND GAINFUL EMPLOYMENT (WAGE) PROGRAM

SEC. 201. WAGE PROGRAM.

    Part F of title IV of the Social Security Act (42 U.S.C. 681 et 
seq.) is amended to read as follows:

                         ``PART F--WAGE PROGRAM

``SEC. 480. PURPOSE.

    ``It is the purpose of this part to provide States with flexibility 
to design programs to ensure that needy families with children obtain 
employment and avoid long-term welfare dependence.

                        ``Subpart 1--Block Grant

``SEC. 481. BLOCK GRANT.

    ``(a) Block Grant Amount.--Subject to section 482, each State that 
operates a WAGE program in accordance with subpart 2 shall be entitled 
to receive for each fiscal year a block grant amount equal to--
            ``(1) the base payment amount determined under subsection 
        (b) and the additional amount described in subsection (b)(3); 
        plus
            ``(2) the performance award amount (if any) determined 
        under subsection (c).
    ``(b) Base Payment Amount.--
            ``(1) In general.--Subject to the limitation of paragraph 
        (3), the base payment amount determined under this subsection 
        with respect to each State is--
                    ``(A) for fiscal year 1996, an amount equal to the 
                base amount determined under paragraph (2); and
                    ``(B) for fiscal year 1997 and each subsequent 
                fiscal year, an amount equal to 103 percent of the base 
                payment amount determined under this subsection for the 
                prior fiscal year.
            ``(2) Base amount.--The base amount determined under this 
        paragraph with respect to each State is an amount equal to the 
        greater of--
                    ``(A) 103 percent of the Federal payments made to 
                the State in fiscal year 1995--
                            ``(i) for child care services described in 
                        clause (i) or (ii) of section 402(g)(1)(a) 
                        (relating to AFDC-JOBS child care and 
                        transitional child care);
                            ``(ii) under section 403(a)(3) (relating to 
                        administrative costs of operating the AFDC 
                        program), other than any payments made under 
                        such section for automated data processing 
                        systems; and
                            ``(iii) under section 403(a)(5) (relating 
                        to emergency assistance); or
                    ``(B) 103 percent of the average of the Federal 
                payments described in clauses (i), (ii), and (iii) of 
                subparagraph (A) made to the State in fiscal years 
                1993, 1994, and 1995.
            ``(3) Additional payments.--
                    ``(A) In general.--In addition to the amounts 
                specified in paragraph (2), each State shall be 
                entitled to receive an amount that bears the same ratio 
                to the amount specified in subparagraph (B) for such 
                fiscal year as the average monthly number of families 
                with needy children receiving transitional aid in the 
                State in the preceding fiscal year bears to the average 
                monthly number of such families in all the States for 
                such preceding year.
                    ``(B) Amount specified.--The amount specified in 
                this subparagraph is--
                            ``(i) for fiscal year 1996, $1,200,000,000;
                            ``(ii) for fiscal year 1997, 
                        $1,700,000,000;
                            ``(iii) for fiscal year 1998, 
                        $2,100,000,000;
                            ``(iv) for fiscal year 1999, 
                        $2,700,000,000; and
                            ``(v) for fiscal year 2000, $3,200,000,000.
    ``(c) Performance Award.--
            ``(1) In general.--Subject to the limitation of paragraph 
        (4), the performance award determined under this subsection for 
        a fiscal year for a State is an amount equal to the sum of--
                    ``(A) the full-time employment savings of the 
                State, plus
                    ``(B) the part-time employment savings of the 
                State.
            ``(2) Full-time employment savings.--For purposes of this 
        subsection--
                    ``(A) In general.--The full-time employment savings 
                of a State for any fiscal year is an amount equal to 
                the product of--
                            ``(i) the total number of full-time 
                        performance award employees, and
                            ``(ii) an amount equal to 6 times the 
                        Federal share of the average monthly 
                        transitional aid paid to individuals in 
                        accordance with the State plan under part A for 
                        the preceding fiscal year.
                    ``(B) Full-time performance award employees.--The 
                term `full-time performance award employees' means, 
                with respect to any fiscal year, a number of employees 
                equal to the applicable percentage of the average 
                monthly number of individuals who, during the preceding 
                fiscal year, received transitional aid under the 
                program operated in accordance with the State plan 
                under part A.
                    ``(C) Applicable percentage.--The term `applicable 
                percentage' means, with respect to any fiscal year, the 
                number of whole percentage points (if any) by which--
                            ``(i) the percentage which--
                                    ``(I) the average monthly number of 
                                individuals who became ineligible 
                                during the preceding fiscal year to 
                                receive transitional aid under the 
                                program operated in accordance with the 
                                State plan under part A by reason of 
                                earnings from employment, bears to
                                    ``(II) the number of individuals 
                                receiving transitional aid under the 
                                program operated in accordance with the 
                                State plan under part A for such 
                                preceding fiscal year, exceeds
                            ``(ii) the percentage determined under 
                        clause (i) for fiscal year 1996.
                    ``(D) Special rule for short-term employees.--An 
                individual shall not be taken into account under 
                subclause (I) of subparagraph (C)(i) unless the 
                employment described in such subclause has continued 
                for 6 consecutive months. If an individual is not taken 
                into account for a fiscal year by reason of this 
                subparagraph, such individual shall be taken into 
                account in the following fiscal year if such 6-month 
                period ends in such following fiscal year.
            ``(3) Part-time employment savings.--For purposes of this 
        subsection--
                    ``(A) In general.--The part-time employment savings 
                of a State for any fiscal year is an amount equal to 
                the product of--
                            ``(i) the total number of part-time 
                        performance award employees, and
                            ``(ii) an amount equal to 6 times the 
                        Federal share of the average monthly 
                        transitional aid (weighted for family size) 
                        which would otherwise be paid to individuals 
                        described in subparagraph (C)(i)(I) in 
                        accordance with the State plan under part A for 
                        the preceding fiscal year but for the fact the 
                        individual worked at least 20 hours per week.
                    ``(B) Part-time performance award employees.--The 
                term `part-time performance award employees' means, 
                with respect to any fiscal year, a number of employees 
                equal to the applicable percentage of the average 
                monthly number of individuals who, during the preceding 
                fiscal year, received transitional aid under the 
                program operated in accordance with the State plan 
                under part A.
                    ``(C) Applicable percentage.--The term `applicable 
                percentage' means, with respect to any fiscal year, the 
                number of whole percentage points (if any) by which--
                            ``(i) the percentage which--
                                    ``(I) the average monthly number of 
                                individuals who were eligible to 
                                receive transitional aid under the 
                                program operated in accordance with the 
                                State plan under part A during the 
                                preceding fiscal year, and worked at
                                 least 20 hours a week in a position 
which was not subsidized by the State, bears to
                                    ``(II) the number of individuals 
                                receiving transitional aid under the 
                                program operated in accordance with the 
                                State plan under part A for such 
                                preceding fiscal year, exceeds
                            ``(ii) the percentage determined under 
                        clause (i) for fiscal year 1996.
                    ``(D) Special rule for areas of high 
                unemployment.--In the case of any State (or any area of 
                a State) which has an average monthly unemployment rate 
                which is more than 6.5 percent (as determined by the 
                Secretary of Labor) for the fiscal year for which the 
                percentage described in subparagraph (C)(i) is being 
                determined, such State may, in applying subparagraph 
                (C)(i)(I), include individuals residing in such State 
                (or area) who worked at least 20 hours a week in 
                positions fully subsidized by the State.
            ``(4) Limitation.--
                    ``(A) In general.--The performance award under 
                paragraph (1) for a State for any fiscal year shall not 
                exceed the amount that bears the same ratio to the 
                amount specified in clause (ii) for such fiscal year as 
                the amount of full-time and part-time performance award 
                employees of the State for a fiscal year bears to the 
                amount of such employees for all States for such fiscal 
                year.
                    ``(B) Amount specified.--The amount specified in 
                this subparagraph is--
                            ``(i) for fiscal year 1998, $200,000,000;
                            ``(ii) for fiscal year 1999, $400,000,000; 
                        and
                            ``(iii) for fiscal year 2000 and each 
                        fiscal year thereafter, $600,000,000.
            ``(5) Award beginning with fiscal year 1998.--No amount 
        shall be paid to a State as a performance award determined 
        under this subsection before October 1, 1997.
    ``(d) Payments to Indian Tribes.--The Secretary shall reserve for 
payment to Indian tribes and Alaska Native organizations with an 
application approved under section 492(a)(1)(A) an amount equal to not 
more than 2 percent of the amount appropriated under subsection (a). 
Such amounts shall be distributed to each tribe and Alaska Native 
organization in an amount that bears the same ratio to the total amount 
reserved under this subsection as the number of the participants 
required to be served in the preceding fiscal year in the tribe's or 
Alaska Native organization's service area bears to the number of 
participants to be served by all tribes and Alaska Native organizations 
in such preceding year. In making such distributions, the Secretary 
shall take into account such other factors as the Secretary deems 
appropriate, including unique geographic, economic, demographic, and 
administrative conditions of individual Indian tribes and Alaska Native 
organizations.
``SEC. 482. PARTICIPATION RATES.

    ``(a) Participation Rate Requirement.--
            ``(1) In general.--Notwithstanding section 481, the 
        Secretary shall pay to a State an amount equal to 95 percent of 
        the base payment amount determined for the State for a fiscal 
        year if the State's participation rate determined under 
        subsection (c) for the preceding fiscal year does not exceed or 
        equal the following percentage:

``Fiscal year:                                              Percentage:
    1996..........................................                   35
    1997..........................................                   40
    1998..........................................                   45
    1999..........................................                   50
    2000..........................................                  55.
            ``(2) Required work activity.--A State shall not be treated 
        as having a participation rate meeting the requirements of this 
        subsection if the number of individuals described in subsection 
        (c)(1) engaged in work activities is not at least 50 percent of 
        the total number of individuals described in subsection (c)(1).
    ``(b) Election by the State.--In lieu of the reduction described in 
subsection (a), a State that does not meet the participation rate 
requirements described in subsection (a), may elect to receive the full 
amount of the payments described in section 481(a)(1) to which the 
State is otherwise entitled for the fiscal year if the State makes 
available non-Federal contributions for the fiscal year in an amount 
equal to not less than 5 percent of the State's non-Federal 
contributions for the preceding fiscal year.
    ``(c) Determination of Participation Rate.--The State's 
participation rate for a fiscal year shall be the number, expressed as 
a percentage, equal to--
            ``(1) the sum of--
                    ``(A) the average monthly number of individuals in 
                the State who have participated in work activities or 
                work preparation activities under the WAGE program 
                under subpart 2 for an average of at least 20 hours a 
                week,
                    ``(B) the average monthly number of individuals who 
                within the previous 6-month period have become 
                ineligible for transitional aid under part A or the 
                WAGE program because the individuals are employed, and
                    ``(C) the average monthly number of individuals 
                under sanctions for failing to comply with a WAGE Plan, 
                divided by
            ``(2) the average monthly number of families with an adult 
        recipient, not including those who are exempt under section 
        402(a)(11).
    ``(d) Definition of Work Activities.--For purposes of this section, 
the term `work activities' means--
            ``(1) unsubsidized employment;
            ``(2) subsidized private sector employment;
            ``(3) subsidized public sector employment or work 
        experience (including work associated with the refurbishing of 
        publicly assisted housing) only if sufficient private sector 
        employment is not available;
            ``(4) on-the-job training; and
            ``(5) microenterprise employment.
    ``(e) Two-Year Limit.--For purposes of subsection (c)(1)(A), an 
individual who has participated in the WAGE program for 2 years may not 
be counted in determining the State's participation rate unless such 
individual is engaged in a work activity.

        ``Subpart 2--Establishment and Operation of WAGE Program

``SEC. 490. REQUIREMENT TO ESTABLISH A WAGE PROGRAM.

    ``A State shall establish a work and gainful employment program 
(hereafter in this part referred to as the `WAGE program') in 
accordance with section 491.

``SEC. 491. ESTABLISHMENT AND OPERATION OF FLEXIBLE STATE PROGRAMS.

    ``(a) Program Requirements.--Any State with a State plan approved 
under subsection (c) shall establish and operate a program that meets 
the following requirements:
            ``(1) Objective.--The objective of the program is for each 
        program participant to find and hold a full-time unsubsidized 
        paid job, and for this goal to be achieved in a cost-effective 
        fashion.
            ``(2) Methods of obtaining objective.--The objective of the 
        program under paragraph (1) shall be achieved by connecting 
        recipients of transitional aid with the private sector labor 
        market as soon as possible and offering them the support and 
        skills necessary to remain in the labor market. Each component 
        of the program should seek to attain the objective by 
        emphasizing employment and conveying an understanding that 
        minimum wage jobs are a stepping stone to more highly paid 
        employment. The program is intended to provide recipients with 
        job search and placement, education, training, wage 
        supplementation, temporary subsidized jobs, or such other 
        services as the State deems necessary to help a recipient 
        obtain private sector employment.
            ``(3) Job creation.--The creation of jobs, with an emphasis 
        on private sector jobs, shall be a component of the program and 
        shall be a priority for each State office that has 
        responsibility under the program.
            ``(4) Assistance.--The State may provide assistance to 
        participants in the program in the following forms:
                    ``(A) State job placement services, which may 
                include employment opportunity centers that act as one-
                stop placement entities through which the State makes 
                available to each program participant services under 
                programs carried out under one or more of the following 
                provisions of law:
                            ``(i) Part A of title II of the Job 
                        Training Partnership Act (29 U.S.C. 1601 et 
                        seq.) (relating to the adult training program).
                            ``(ii) Part B of title II of such Act (29 
                        U.S.C. 1630 et seq.) (relating to the summer 
                        youth employment and training programs).
                            ``(iii) Part C of title II of such Act (29 
                        U.S.C. 1641 et seq.) (relating to the youth 
                        training program).
                            ``(iv) Title III of such Act (29 U.S.C. 
                        1651 et seq.) (relating to employment and 
                        training assistance for dislocated workers).
                            ``(v) Part B of title IV of such Act (29 
                        U.S.C. 1691 et seq.) (relating to the Job 
                        Corps).
                            ``(vi) The Carl D. Perkins Vocational and 
                        Applied Technology Education Act (20 U.S.C. 
                        2301 et seq.).
                            ``(vii) The Adult Education Act (20 U.S.C. 
                        1201 et seq.).
                            ``(viii) Part B of chapter 1 of title I of 
                        the Elementary and Secondary Education Act of 
                        1965 (20 U.S.C. 2741 et seq.) (relating to Even 
                        Start family literacy programs).
                            ``(ix) Subtitle A of title VII of the 
                        Stewart B. McKinney Homeless Assistance Act (42 
                        U.S.C. 11421) (relating to adult education for 
                        the homeless).
                            ``(x) Subtitle B of title VII of such Act 
                        (42 U.S.C. 11431 et seq.) (relating to 
                        education for homeless children and youth).
                            ``(xi) Subtitle C of title VII of such Act 
                        (42 U.S.C. 11441) (relating to job training for 
                        the homeless).
                            ``(xii) The School-to-Work Opportunities 
                        Act of 1994.
                            ``(xiii) The National and Community Service 
                        Act of 1990 (42 U.S.C. 12501 et seq.).
                            ``(xiv) The National Skill Standards Act of 
                        1994.
                    ``(B) Private placement company services, which may 
                include contracts the State enters into with private 
                companies (whether operated for profit or not for 
                profit) or community action agencies for placement of 
                participants in the program in positions of full-time 
                or part-time employment, preferably in the private 
                sector, for wages sufficient to eliminate the need of 
                such participants for cash assistance.
                    ``(C) Microenterprise programs, including programs 
                under which the State makes grants and loans to public 
                and private organizations, agencies, and other entities 
                (whether operated for profit or not for profit) to 
                enable such entities to facilitate economic development 
                by--
                            ``(i) providing technical assistance, 
                        advice, and business support services 
                        (including assistance, advice, and support 
                        relating to business planning, financing, 
                        marketing, and other microenterprise 
                        development activities) to owners of 
                        microenterprises and persons developing 
                        microenterprises; and
                            ``(ii) providing general support (such as 
                        peer support and self-esteem programs) to 
                        owners of microenterprises and persons 
                        developing microenterprises.
                    ``(D) Work supplementation programs, under which 
                the State may use part or all of the sums that would 
                otherwise be payable to participants in the program as 
                transitional aid under part A for the purpose of 
                providing and subsidizing jobs for such participants as 
                an alternative to the transitional aid that would 
                otherwise be so payable to them.
                    ``(E) Innovative JOBS programs, including programs 
                similar to--
                            ``(i) the program known as the `GAIN 
                        Program' that has been operated by Riverside 
                        County, California, under Federal law in effect 
                        immediately before the date this section first 
                        applies to the State of California;
                            ``(ii) the program known as `JOBS Plus' 
                        that has been operated by the State of Oregon 
                        under Federal law in effect immediately before 
                        the date this section first applies to the 
                        State of Oregon; and
                            ``(iii) the program known as `JOBS' that 
                        has been operated by Kenosha County, Wisconsin, 
                        under Federal law in effect immediately before 
                        the date this section first applies to the 
                        State of Wisconsin.
                    ``(F) Temporary subsidized job creation, which may 
                include workfare programs.
                    ``(G) Education or training services.
                    ``(H) Any other service which provides individuals 
                with the support and skills necessary to obtain and 
                keep employment in the private sector.
        For purposes of subparagraph (C), the term `microenterprise' 
        means a commercial enterprise which has 5 or fewer employees, 
        one or more of whom owns the enterprise.
            ``(5) WAGE plan.--The State agency shall develop a WAGE 
        Plan in accordance with subsection (b) with each program 
        participant.
            ``(6) Hours of participation requirement.--The State shall 
        provide that each participant in the program under this section 
        shall participate in activities in accordance with this section 
        for at least 20 hours per week (or, at the State's option, a 
        greater number of hours per week), including job search in 
        cases where the individual is not employed in an unsubsidized 
        job in the private sector.
            ``(7) Time limit.--A State may establish a time limit of 
        any duration for participation by an individual in the WAGE 
        program. A State shall not terminate any participant subject to 
        such time limit if the participant has complied with the 
        requirements set forth in the WAGE Plan established in 
        accordance with paragraph (5).
            ``(8) Child care services.--The State shall offer each 
        individual participating in the program child care services (as 
        determined by the State) if such individual requires child care 
        services in order to participate.
            ``(9) Nondisplacement.--The program shall comply with the 
        requirements of subsection (g).
            ``(10) Noncustodial parents.--
                    ``(A) In general.--The State may provide services 
                under the program, on a voluntary or mandatory basis, 
                to noncustodial parents of needy children who are 
                recipients of transitional aid.
                    ``(B) Participation rate.--Noncustodial parents who 
                participate in the WAGE program shall be treated as 
                participants for purposes of determining the 
                participation rate under section 482.
    ``(b) WAGE Plan.--
            ``(1) In general.--On the basis of an initial assessment of 
        the skills, prior work experience, and employability of each 
        individual who the State requires to participate in the WAGE 
        program, the State agency shall, together with the individual, 
        develop a WAGE Plan, which--
                    ``(A) sets forth an employment goal for the 
                individual and contains an individualized comprehensive 
                plan developed by the State agency with the participant 
                for moving the individual into the workforce;
                    ``(B) provides that the participant shall spend at 
                least 20 hours per week (or, at the option of the 
                State, a greater number of hours per week) in 
                activities provided for in the WAGE Plan, including job 
                search in cases where the individual is not employed in 
                an unsubsidized job in the private sector;
                    ``(C) sets forth the obligations of the individual, 
                which may include a requirement that the individual 
                attend school, maintain certain grades and attendance, 
                keep school age children of the individual in school, 
                immunize children, attend parenting and money 
                management classes, or do other things that will help 
                the individual become and remain employed in the 
                private sector;
                    ``(D) provides that the participant shall accept 
                any bona fide offer of unsubsidized full-time 
                employment, unless the participant has good cause for 
                not doing so;
                    ``(E) describes the child care and other social 
                services and assistance which the State will provide in 
                order to allow the individual to take full advantage of 
                the activities under the program operated in accordance 
                with this section;
                    ``(F) at the option of the State, provides that aid 
                under the transitional aid program is to be paid to the 
                participant based on the number of hours that the 
                participant spends in activities provided for in the 
                agreement; and
                    ``(G) at the option of the State, requires the 
                participant to undergo appropriate substance abuse 
                treatment.
            ``(2) Timing.--The State agency shall comply with paragraph 
        (1) with respect to an individual--
                    ``(A) within 90 days (or, at the option of the 
                State, 180 days) after the effective date of this part, 
                in the case of an individual who, as of such effective 
                date, is a recipient of aid under the State plan 
                approved under part A; or
                    ``(B) within 30 days (or, at the option of the 
                State, 90 days) after the individual is determined to 
                be eligible for such aid, in the case of any other 
                individual.
    ``(c) State Plans.--
            ``(1) In general.--Within 60 days after the date a State 
        submits to the Secretary a plan that provides for the 
        establishment and operation of a program that meets the 
        requirements of subsection (a), the Secretary shall approve the 
        plan.
            ``(2) Authority to extend deadline.--The 60-day deadline 
        established in paragraph (1) with respect to a State may be 
        extended in accordance with an agreement between the Secretary 
        and the State.
    ``(d) Annual Reports.--
            ``(1) Compliance with performance measures.--Each State 
        that operates a program under this section shall submit to the 
        Secretary annual reports that compare the achievements of the 
        program with the performance-based measures established under 
        subsection (e).
            ``(2) Compliance with participation rates.--Each State that 
        operates a program under this section for a fiscal year shall 
        submit to the Secretary a report on the participation rate 
        determined under section 482 of the State for the fiscal year.
    ``(e) Performance-Based Measures.--The Secretary shall, by 
regulation, establish measures of the effectiveness of the State's 
program established under this section in moving recipients of 
transitional aid under the State plan approved under part A into full-
time unsubsidized employment, based on the performance of such 
programs.
    ``(f) Effect of Failure To Meet Participation Rates.--
            ``(1) In general.--If a State fails to achieve the 
        participation rate required by section 482(a) for the fiscal 
        year, the Secretary may make recommendations for changes in the 
        program. The State may elect to follow such recommendations, 
        and shall demonstrate to the Secretary how the State will 
        achieve the required participation rates.
            ``(2) Second consecutive failure.--Notwithstanding 
        paragraph (1), if the State has failed to achieve the 
        participation rates required by section 482(a) for 2 
        consecutive fiscal years, the Secretary may require the State 
        to make changes in the State program established under this 
        section.
    ``(g) No Displacement.--No work assignment under the program shall 
result in--
            ``(1) the displacement of any currently employed worker or 
        position (including partial displacement such as a reduction in 
        the hours of nonovertime work, wages, or employment benefits), 
        or result in the impairment of existing contracts for services 
        or collective bargaining agreements;
            ``(2) the employment or assignment of a participant of the 
        filling of a position when--
                    ``(A) any other individual is on layoff from the 
                same or any equivalent position, or
                    ``(B) the employer has terminated the employment of 
                any regular employee or otherwise reduced its workforce 
                with the effect of filling the vacancy so created with 
                a participant subsidized under the program; or
            ``(3) any infringement of the promotional opportunities of 
        any currently employed individual.
No participant may be assigned under work supplementation programs or 
under workfare programs to fill any established unfilled position 
vacancy.

``SEC. 492. SPECIAL PROVISIONS RELATING TO INDIAN TRIBES AND ALASKA 
              NATIVE ORGANIZATIONS.

    ``(a) Special Provisions Relating to Tribes and Native 
Organizations.--
            ``(1) In general.--
                    ``(A) WAGE programs.--An Indian tribe or Alaska 
                Native organization may apply to the Secretary to 
                conduct a WAGE program under this part. An application 
                to conduct a WAGE program in a fiscal year shall be 
                submitted not later than July 1 of the preceding fiscal 
                year. Upon approval of the application, payment in the 
                amount determined in accordance with section 482(d) 
                shall be made directly to the tribe or organization 
                involved.
                    ``(B) Waiver of certain requirements.--The 
                Secretary may waive any requirements of this part with 
                respect to a WAGE program conducted under this part by 
                an Indian tribe or Alaska Native organization as the 
                Secretary determines to be appropriate.
                    ``(C) Termination.--The WAGE program conducted by 
                any Indian tribe or Alaska Native organization may be 
                terminated voluntarily by such tribe or organization or 
                may be terminated by the Secretary upon a finding that 
                such program is not being conducted in substantial 
                conformity with the terms of the application approved 
                under subparagraph (A). If a WAGE program of an Indian 
                tribe or Alaska Native organization is terminated, such 
                tribe or organization shall not be eligible to submit a 
                new application under subparagraph (A) with respect to 
                any year before the 6th year following such 
                termination.
                    ``(D) Consortium of tribes.--An Indian tribe may 
                enter into an agreement with other Indian tribes for 
                the provision of WAGE program services by a tribal 
                consortium providing for centralized administration of 
                WAGE program services for the region served by the 
                Indian tribes so agreeing. In the case of such an 
                agreement, a single application under this part may be 
                submitted by the tribal consortium and the consortium 
                shall be entitled to receive an amount equal to the 
                aggregate amount that all of the tribes in the 
                consortium would have been entitled to receive if each 
                tribe applied separately. In any case in which an 
                application is submitted by a tribal consortium, the 
                approval of each Indian tribe included in the 
                consortium shall be a prerequisite to the distribution 
                of funds to the tribal consortium.
            ``(2) Determination of exempt individual.--An application 
        under this section shall provide that upon approval the Indian 
        tribe or Alaska Native organization, as the case may be, will 
        be responsible for determining whether an individual (within 
        the service area of the tribe or organization) is exempt under 
        section 402(a)(11).
    ``(b) Other Requirements.--
            ``(1) Child care.--Each Indian tribe and Alaska Native 
        organization submitting an application under this section may 
        also submit to the Secretary (as a part of the application) a 
        description of the program that the tribe or organization will 
        implement to meet the child care needs of WAGE program 
        participants and may request funds to provide such child care. 
        The Secretary may waive any other requirement of this part with 
        respect to child care services as the Secretary determines 
        inappropriate for such child care program, other than the 
        requirement described in section 491(a)(8).
            ``(2) Payment for child care.--The Secretary shall adjust 
        the payment for a fiscal year under section 481(d) to reflect 
        the cost of child care for the number of required participants 
        in need of such care in the preceding fiscal year (and other 
        recipients in need of such care) in the tribe's or Alaska 
        Native organization's service area, subject to the limitation 
        on total funding for tribes and Alaska Native organizations.
            ``(3) Data collection.--The Secretary shall establish data 
        collection and reporting requirements with respect to child 
        care services implemented under this subsection.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Tribal consortium.--The term `tribal consortium' 
        means any group, association, partnership, corporation, or 
        other legal entity which is controlled, sanctioned, or 
        chartered by the governing body of more than 1 Indian tribe.
            ``(2) Indian tribe.--The term `Indian tribe' means any 
        tribe, band, nation, or other organized group or community of 
        Indians that--
                    ``(A) is recognized as eligible for the special 
                programs and services provided by the United States to 
                Indians because of their status as Indians; and
                    ``(B) for which a reservation exists.
        For purposes of subparagraph (B), a reservation includes Indian 
        reservations, public domain Indian allotments, and former 
        Indian reservations in Oklahoma.
            ``(3) Alaska native organization.--
                    ``(A) In general.--The term `Alaska Native 
                organization' means any organized group of Alaska 
                Natives eligible to operate a Federal program under 
                Public Law 93-638 or such group's designee.
                    ``(B) Boundaries.--The boundaries of an Alaska 
                Native organization shall be those of the geographical 
                region, established pursuant to section 7(a) of the 
                Alaska Native Claims Settlement Act, within which the 
                Alaska Native organization is located (without regard 
                to the ownership of the land within the boundaries).
                    ``(C) Limits on applications.--The Secretary may 
                approve only one application from an Alaska Native 
                organization for each of the 12 geographical regions 
                established pursuant to section 7(a) of the Alaska 
                Native Claims Settlement Act.
        Nothing in this paragraph shall be construed to grant or defer 
        any status or powers other than those expressly granted in this 
        paragraph or to validate or invalidate any claim by Alaska 
        Natives of sovereign authority over lands or people.''.

SEC. 202. REGULATIONS.

    The Secretary of Health and Human Services shall prescribe such 
regulations as may be necessary to implement the amendments made by 
this title.

SEC. 203. APPLICABILITY TO STATES.

    (a) State Option To Accelerate Applicability.--If a State formally 
notifies the Secretary of Health and Human Services that the State 
desires to accelerate the applicability to the State of the amendments 
made by this title, the amendments shall apply to the State on and 
after such earlier date as the State may select.
    (b) State Option To Delay Applicability Until Waivers Expire.--The 
amendments made by this title shall not apply to a State with respect 
to which there is in effect a waiver issued under section 1115 of the 
Social Security Act for the State program established under part F of 
title IV of such Act until the waiver expires, if the State formally 
notifies the Secretary of Health and Human Services that the State 
desires to so delay such effective date.
    (c) Authority of the Secretary of Health and Human Services To 
Delay Applicability to a State.--If a State formally notifies the 
Secretary of Health and Human Services that the State desires to delay 
the applicability to the State of the amendments made by this title, 
the amendments shall apply to the State on and after any later date 
agreed upon by the Secretary and the State.
           TITLE III--WORKING PARENTS CHILD CARE BLOCK GRANT

SEC. 301. PURPOSE.

    It is the purpose of this title to--
            (1) eliminate fragmentation of child care programs; and
            (2) increase the availability of affordable child care in 
        order to promote self sufficiency and support working families.

SEC. 302. AMENDMENTS TO CHILD CARE AND DEVELOPMENT BLOCK GRANT ACT OF 
              1990.

    (a) Appropriations.--Section 658B of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858) is amended to read as follows:

``SEC. 658B. APPROPRIATION.

    ``For the purpose of providing child care services for eligible 
children through the awarding of grants to States under this subchapter 
by the Secretary, there are authorized to be appropriated and there are 
appropriated, from funds in the Treasury not otherwise appropriated, 
$1,280,000,000 for fiscal year 1996, $1,313,000,000 for fiscal year 
1997, $1,350,000,000 for fiscal year 1998, $1,386,000,000 for fiscal 
year 1999, and $1,423,000,000 for fiscal year 2000.''.
    (b) Awarding of Grants.--Section 658C of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858a) is amended by 
striking ``is authorized to'' and inserting ``shall''.
    (c) Supplementation.--Section 658E(c)(2)(J) of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)(2)(J)) is 
amended--
            (1) by striking ``Provide'' and inserting ``(i) Provide''; 
        and
            (2) by adding at the end the following new clause:
                            ``(ii) Clause (i) shall not apply in the 
                        case of additional funds available to the State 
                        under section 658B for fiscal years 1996 
                        through 2000 as the result of the repeal of 
                        sections 402(i) and 403(n) of the Social 
                        Security Act (42 U.S.C. 602(i) and 603(n)), 
                        subchapter E of chapter 8 of subtitle A of 
                        title VI of the Omnibus Budget Reconciliation 
                        Act of 1981 (42 U.S.C. 9871 et seq.), and the 
                        Child Development Associate Scholarship 
                        Assistance Act of 1985 (42 U.S.C. 10901 et 
                        seq.) by the Work and Gainful Employment 
                        Act.''.
    (d) Set-Asides for Quality and Working Families and Child Care 
Guarantee.--Section 658E(c)(3) of the Child Care and Development Block 
Grant Act of 1990 (42 U.S.C. 9858c(c)(3)) is amended--
            (1) in subparagraph (C), by striking ``25 percent'' and 
        inserting ``20 percent''; and
            (2) by adding at the end the following new subparagraph:
                    ``(D) Assistance for low-income working families.--
                The State shall reserve not less than 50 percent of the 
                amount provided to the State and available for 
                providing services under this subchapter, to carry out 
                child care activities to support low-income working 
                families residing in the State.''.
    (e) Matching Requirement.--Section 658E(c) of the Child Care and 
Development Block Grant Act of 1990 (42 U.S.C. 9858c(c)) is amended by 
adding at the end the following new paragraph:
            ``(6) Matching requirement.--
                    ``(A) In general.--The State plan shall provide 
                that, with respect to the costs to be incurred by the 
                State in carrying out the activities for which a grant 
                under this subchapter is awarded, the State will make 
                available (directly or through in-kind donations from 
                public or private entities) non-Federal contributions 
                in an amount equal to not less than $1 for every $4 of 
                Federal funds provided under the grant which are 
                attributable to the excess described in subparagraph 
                (B).
                    ``(B) Excess.--The excess described in this 
                subparagraph is the amount by which the funds made 
                available to a State in each fiscal year beginning with 
                fiscal year 1996, exceeds the aggregate amounts 
                received by the State in fiscal year 1995 for child 
                care services under this subchapter and section 403(n) 
                of the Social Security Act (as in effect in such fiscal 
                year).''.
    (f) Improving Quality.--
            (1) Increase in required funding.--Section 658G of the 
        Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
        9858e) is amended by striking ``not less than 20 percent'' and 
        inserting ``50 percent''.
            (2) Quality enhancement bonus.--Section 658G of the Child 
        Care and Development Block Grant Act of 1990 (42 U.S.C. 9858e) 
        is amended--
                    (A) by striking ``A State'' and inserting ``(a) In 
                General.--A State''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(b) Quality Enhancement Bonus.--
            ``(1) In general.--The Secretary shall establish a child 
        care quality enhancement bonus to make funds available to 
        States that demonstrate progress in the implementation of--
                    ``(A) innovative teacher training programs such as 
                the Department of Defense staff development and 
                compensation program for child care personnel; or
                    ``(B) enhanced child care quality standards and 
                licensing and monitoring procedures.
            ``(2) Funding.--From the amounts made available for each 
        fiscal year under subsection (a), the Secretary shall reserve 
        not more than $30,000,000 in each such fiscal year to carry out 
        this subsection.''.
    (g) Before- and After-School Services.--Section 658H(a) of the 
Child Care and Development Block Grant Act of 1990 (42 U.S.C. 9858f(a)) 
is amended by striking ``not less than 75 percent'' and inserting ``50 
percent''.
    (h) Payments.--Section 658J(a) of the Child Care and Development 
Block Grant Act of 1990 (42 U.S.C. 9858h(a)) is amended by striking 
``Subject to the availability of appropriation, a'' and inserting 
``A''.
    (i) Amounts Reserved; Allotments.--
            (1) Territories and possessions.--Paragraph (1) of section 
        658O(a) of the Child Care and Development Block Grant Act of 
        1990 (42 U.S.C. 9858m(a)(1)) is amended to read as follows:
            ``(1) Territories and possessions.--The Secretary shall 
        reserve in each fiscal year an amount not to exceed \1/2\ of 1 
        percent of the amount appropriated in fiscal year 1995 under 
        this subchapter (as in effect in such fiscal year) for payments 
        to American Samoa, the Virgin Islands of the United States, the 
        Commonwealth of the Northern Mariana Islands, and the Trust 
        Territory of the Pacific Islands to be allotted in accordance 
        with the respective needs of such jurisdictions. In addition, 
        the Secretary shall reserve, for payment to such jurisdictions, 
        an amount not to exceed \1/2\ of 1 percent of the amounts 
        appropriated under this subchapter in each fiscal year which 
        are in excess of the amounts appropriated in fiscal year 1995 
        under this subchapter and under section 403(n) of the Social 
        Security Act (as in effect in such fiscal year).''.
            (2) Indian tribes.--Paragraph (2) of section 658O(a) of the 
        Child Care and Development Block Grant Act of 1990 (42 U.S.C. 
        9858m(a)(2)) is amended to read as follows:
            ``(2) Indian tribes.--The Secretary shall reserve in each 
        fiscal year an amount not to exceed 3 percent of the amount 
        appropriated in fiscal year 1995 under this subchapter (as in 
        effect of such fiscal year) for payments to Indian tribes and 
        tribal organizations which have applications approved under 
        subsection (c). In addition, the Secretary shall reserve, for 
        such payments to Indian tribes and tribal organizations, an 
        amount not to exceed 3 percent of amounts appropriated under 
        this subchapter in each fiscal year in excess of the amounts 
        appropriated in fiscal year 1995 under this subchapter and 
        under section 403(n) of the Social Security Act (as in effect 
        in such fiscal year).''.
            (3) Allotment.--Section 658O(b) of the Child Care and 
        Development Block Grant Act of 1990 (42 U.S.C. 9858m(b)) is 
        amended by adding at the end the following new paragraph:
            ``(5) Allotment.--
                    ``(A) Base allotment.--Beginning with fiscal year 
                1996, the amount allotted to a State under this section 
                shall include the amount that the State received in 
                fiscal year 1995 under this subchapter, and under the 
                provisions of sections 402(i) and 403(n) of the Social 
                Security Act (42 U.S.C. 602(i), 603(n)), subchapter E 
                of chapter 8 of subtitle A of title VI of the Omnibus 
                Budget Reconciliation Act of 1981 (42 U.S.C. 9871 et 
                seq.), and the Child Development Associate Scholarship 
                Assistance Act of 1985 (42 U.S.C. 10901 et seq.) (as in 
                effect in such fiscal year).
                    ``(B) Additional amounts.--Beginning with fiscal 
                year 1996, any amounts appropriated under section 658B 
                for a fiscal year and remaining after the requirement 
                of subparagraph (A) and subsection (a) is complied with 
                shall be allotted to States pursuant to the formula 
                described in paragraph (1).''.

SEC. 303. PROGRAM REPEALS.

    (a) State Dependent Care Grants.--Subchapter E of chapter 8 of 
subtitle A of title VI of the Omnibus Budget Reconciliation Act of 1981 
(42 U.S.C. 9871 et seq.) is repealed.
    (b) Child Development Associate Scholarship Assistance Act.--The 
Child Development Associate Scholarship Assistance Act of 1985 (42 
U.S.C. 10901 et seq.) is repealed.

SEC. 304. REFERENCES.

    (a) In General.--The heading for subchapter C of chapter 8 of 
subtitle A of title IV of the Omnibus Budget Reconciliation Act of 1981 
(Public Law 97-37), as amended by section 5082 of the Omnibus Budget 
Reconciliation Act of 1990 (Public Law 101-508), is amended by striking 
``Child Care Development Block Grant'' and inserting ``Working Parents 
Child Care Block Grant''.
    (b) Reference.--Except when inappropriate, whenever any reference 
is made in any provision of law, regulation, rule, record, or document 
to the Child Care Development Block Grant, such reference shall be 
considered a reference to the Working Parents Child Care Block Grant.
                 TITLE IV--CHILD SUPPORT RESPONSIBILITY

SEC. 400. SHORT TITLE.

    This title may be cited as the ``Child Support Responsibility Act 
of 1995''.

    Subtitle A--Improvements to the Child Support Collection System

  PART I--ELIGIBILITY AND OTHER MATTERS CONCERNING TITLE IV-D PROGRAM 
                                CLIENTS

SEC. 401. STATE OBLIGATION TO PROVIDE PATERNITY ESTABLISHMENT AND CHILD 
              SUPPORT ENFORCEMENT SERVICES.

    (a) State Law Requirements.--Section 466(a) (42 U.S.C. 666(a)) is 
amended by adding at the end the following new paragraph:
            ``(12) Procedures under which--
                    ``(A) every child support order established or 
                modified in the State on or after October 1, 1998, is 
                recorded in the central case registry established in 
                accordance with section 454A(e); and
                    ``(B) child support payments are collected through 
                the centralized collections unit established in 
                accordance with section 454B--
                            ``(i) on and after October 1, 1998, under 
                        each order subject to wage withholding under 
                        section 466(b); and
                            ``(ii) on and after October 1, 1999, under 
                        each other order required to be recorded in 
                        such central case registry under this paragraph 
                        or section 454A(e), if requested by either 
                        party subject to such order.''.
    (b) State Plan Requirements.--Section 454 (42 U.S.C. 654) is 
amended--
            (1) by striking paragraph (4) and inserting the following 
        new paragraph:
            ``(4) provide that such State will undertake to provide 
        appropriate services under this part to--
                    ``(A) each child with respect to whom an assignment 
                is effective under section 402(a)(9), 471(a)(17), or 
                1912 (except in cases in which the State agency 
                determines, in accordance with paragraph (25), that it 
                is against the best interests of the child to do so); 
                and
                    ``(B) each child not described in subparagraph 
                (A)--
                            ``(i) with respect to whom an individual 
                        applies for such services; or
                            ``(ii) on and after October 1, 1998, with 
                        respect to whom a support order is recorded in 
                        the central State case registry established 
                        under section 454A, if application is made for 
                        services under this part;''; and
            (2) in paragraph (6)--
                    (A) by striking ``(6) provide that'' and all that 
                follows through subparagraph (A) and inserting the 
                following:
            ``(6) provide that--
                    ``(A) services under the State plan shall be made 
                available to nonresidents on the same terms as to 
                residents;'';
                    (B) in subparagraph (B)--
                            (i) by inserting ``on individuals not 
                        receiving assistance under part A'' after 
                        ``such services shall be imposed''; and
                            (ii) by inserting ``but no fees or costs 
                        shall be imposed on any absent or custodial 
                        parent or other individual for inclusion in the 
                        central State registry maintained pursuant to 
                        section 454A(e)'';
                    (C) in each of subparagraphs (B), (C), (D), and 
                (E), by indenting such subparagraph and aligning its 
                left margin with the left margin of subparagraph (A); 
                and
                    (D) in each of subparagraphs (B), (C), and (D), by 
                striking the final comma and inserting a semicolon.
    (c) Conforming Amendments.--
            (1) Paternity establishment percentage.--Section 
        452(g)(2)(A) (42 U.S.C. 652(g)(2)(A)) is amended by striking 
        ``454(6)'' each place it appears and inserting 
        ``454(4)(A)(ii)''.
            (2) State plan.--Section 454(23) (42 U.S.C. 654(23)) is 
        amended, effective October 1, 1998, by striking ``information 
        as to any application fees for such services and''.
            (3) Procedures to improve enforcement.--Section 
        466(a)(3)(B) (42 U.S.C. 666(a)(3)(B)) is amended by striking 
        ``in the case of overdue support which a State has agreed to 
        collect under section 454(6)'' and inserting ``in any other 
        case''.
            (4) Definition of overdue support.--Section 466(e) (42 
        U.S.C. 666(e)) is amended by striking ``or (6)''.
SEC. 402. DISTRIBUTION OF PAYMENTS.

    (a) Distributions Through State Child Support Enforcement Agency to 
Former Assistance Recipients.--Section 454(5) (42 U.S.C. 654(5)) is 
amended--
            (1) in subparagraph (A)--
                    (A) by inserting ``except as otherwise specifically 
                provided in section 464 or 466(a)(3),'' after ``is 
                effective,''; and
                    (B) by striking ``except that'' and all that 
                follows through the semicolon; and
            (2) in subparagraph (B), by striking ``, except'' and all 
        that follows through ``medical assistance''.
    (b) Distribution to a Family Currently Receiving Aid Under Part A 
of Title IV of the Social Security Act.--Section 457 (42 U.S.C. 657) is 
amended--
            (1) by striking subsection (a) and redesignating subsection 
        (b) as subsection (a);
            (2) in subsection (a), as redesignated--
                    (A) in the matter preceding paragraph (2), to read 
                as follows:
    ``(a) In the Case of a Family Receiving Aid Under Part A of Title 
IV of the Social Security Act.--Amounts collected under this part 
during any month as support of a child who is receiving assistance 
under part A (or a parent or caretaker relative of such a child) shall 
(except in the case of a State exercising the option under subsection 
(b)) be distributed as follows:
            ``(1) an amount equal to the amount that will be 
        disregarded pursuant to section 402(a)(1)(C) shall be taken 
        from each of--
                    ``(A) the amounts received in a month which 
                represent payments for that month; and
                    ``(B) the amounts received in a month which 
                represent payments for a prior month which were made by 
                the absent parent in that prior month;
        and shall be paid to the family without affecting its 
        eligibility for assistance or decreasing any amount otherwise 
        payable as assistance to such family during such month;'';
                    (B) in paragraph (4), by striking ``or (B)'' and 
                all that follows through the period and inserting ``; 
                then (B) from any remainder, amounts equal to 
                arrearages of such support obligations assigned, 
                pursuant to part A, to any other State or States shall 
                be paid to such other State or States and used to pay 
                any such arrearages (with appropriate reimbursement of 
                the Federal Government to the extent of its 
                participation in the financing); and then (C) any 
                remainder shall be paid to the family.''; and
            (3) by inserting after subsection (a), as redesignated, the 
        following new subsection:
    ``(b) Alternative Distribution in Case of Family Receiving Aid 
Under Part A of Title IV of the Social Security Act.--In the case of a 
State electing the option under this subsection, amounts collected as 
described in subsection (a) shall be distributed as follows:
            ``(1) an amount equal to the amount that will be 
        disregarded pursuant to section 402(a)(1)(C) shall be taken 
        from each of--
                    ``(A) the amounts received in a month which 
                represent payments for that month; and
                    ``(B) the amounts received in a month which 
                represent payments for a prior month which were made by 
                the absent parent in that prior month;
        and shall be paid to the family without affecting its 
        eligibility for assistance or decreasing any amount otherwise 
        payable as assistance to such family during such month;
            ``(2) second, from any remainder, amounts equal to the 
        balance of support owed for the current month shall be paid to 
        the family;
            ``(3) third, from any remainder, amounts equal to 
        arrearages of such support obligations assigned, pursuant to 
        part A, to the State making the collection shall be retained 
        and used by such State to pay any such arrearages (with 
        appropriate reimbursement of the Federal Government to the 
        extent of its participation in the financing);
            ``(4) fourth, from any remainder, amounts equal to 
        arrearages of such support obligations assigned, pursuant to 
        part A, to any other State or States shall be paid to such 
        other State or States and used to pay any such arrearages (with 
        appropriate reimbursement of the Federal Government to the 
        extent of its participation in the financing); and
            ``(5) fifth, any remainder shall be paid to the family.''.
    (c) Distribution to a Family Not Receiving Aid Under Part A of 
Title IV of the Social Security Act.--
            (1) In general.--Section 457(c) (42 U.S.C. 657(c)) is 
        amended to read as follows:
    ``(c) Distributions in Case of Family Not Receiving Aid Under Part 
A of Title IV of the Social Security Act.--Amounts collected by a State 
agency under this part during any month as support of a child who is 
not receiving assistance under part A (or of a parent or caretaker 
relative of such a child) shall (subject to the remaining provisions of 
this section) be distributed as follows:
            ``(1) first, amounts equal to the total of such support 
        owed for such month shall be paid to the family;
            ``(2) second, from any remainder, amounts equal to 
        arrearages of such support obligations for months during which 
        such child did not receive assistance under part A shall be 
        paid to the family;
            ``(3) third, from any remainder, amounts equal to 
        arrearages of such support obligations assigned to the State 
        making the collection pursuant to part A shall be retained and 
        used by such State to pay any such arrearages (with appropriate 
        reimbursement of the Federal Government to the extent of its 
        participation in the financing); and
            ``(4) fourth, from any remainder, amounts equal to 
        arrearages of such support obligations assigned to any other 
        State pursuant to part A shall be paid to such other State or 
        States, and used to pay such arrearages, in the order in which 
        such arrearages accrued (with appropriate reimbursement of the 
        Federal Government to the extent of its participation in the 
        financing).''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall become effective on October 1, 1999.
    (d) Distribution to a Child Receiving Assistance Under Title IV-
E.--Section 457(d) (42 U.S.C. 657(d)) is amended, in the matter 
preceding paragraph (1), by striking ``Notwithstanding the preceding 
provisions of this section, amounts'' and inserting the following:
    ``(d) Distributions In Case of a Child Receiving Assistance Under 
Title IV-E.--Amounts''.
    (e) Regulations.--The Secretary of Health and Human Services shall 
promulgate regulations--
            (1) under part D of title IV of the Social Security Act, 
        establishing a uniform nationwide standard for allocation of 
        child support collections from an obligor owing support to more 
        than 1 family; and
            (2) under part A of such title, establishing standards 
        applicable to States electing the alternative formula under 
        section 457(b) of such Act for distribution of collections on 
        behalf of families receiving transitional aid, designed to 
        minimize irregular monthly payments to such families.
    (f) Clerical Amendments.--Section 454 (42 U.S.C. 654) is amended--
            (1) in paragraph (11)--
                    (A) by striking ``(11)'' and inserting ``(11)(A)''; 
                and
                    (B) by inserting after the semicolon ``and''; and
            (2) by redesignating paragraph (12) as subparagraph (B) of 
        paragraph (11).
    (g) Effective Date.--The amendments made by this section shall be 
effective with respect to calendar quarters beginning on or after 
October 1, 1999 or earlier at State's option.

SEC. 403. RIGHTS TO NOTIFICATION AND HEARINGS.

    (a) In General.--Section 454 (42 U.S.C. 654), as amended by section 
402(f), is amended by inserting after paragraph (11) the following new 
paragraph:
            ``(12) establish procedures to provide that--
                    ``(A) individuals who are applying for or receiving 
                services under this part, or are parties to cases in 
                which services are being provided under this part--
                            ``(i) receive notice of all proceedings in 
                        which support obligations might be established 
                        or modified; and
                            ``(ii) receive a copy of any order 
                        establishing or modifying a child support 
                        obligation, or (in the case of a petition for 
                        modification) a notice of determination that 
                        there should be no change in the amount of the 
                        child support award, within 14 days after 
                        issuance of such order or determination;
                    ``(B) individuals applying for or receiving 
                services under this part have access to a fair hearing 
                or other formal complaint procedure that meets 
                standards established by the Secretary and ensures 
                prompt consideration and resolution of complaints (but 
                the resort to such procedure shall not stay the 
                enforcement of any support order); and
                    ``(C) the State may not provide to any noncustodial 
                parent of a child representation relating to the 
                establishment or modification of an order for the 
                payment of child support with respect to that child, 
                unless the State makes provision for such 
                representation outside the State agency;''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
become effective on October 1, 1997.

SEC. 404. PRIVACY SAFEGUARDS.

    (a) State Plan Requirement.--Section 454 (42 U.S.C. 454) is 
amended--
            (1) by striking ``and'' at the end of paragraph (23);
            (2) by striking the period at the end of paragraph (24) and 
        inserting ``; and''; and
            (3) by adding after paragraph (24) the following:
            ``(25) provide that the State will have in effect 
        safeguards applicable to all sensitive and confidential 
        information handled by the State agency designed to protect the 
        privacy rights of the parties, including--
                    ``(A) safeguards against unauthorized use or 
                disclosure of information relating to proceedings or 
                actions to establish paternity, or to establish or 
                enforce support;
                    ``(B) prohibitions on the release of information on 
                the whereabouts of 1 party to another party against 
                whom a protective order with respect to the former 
                party has been entered; and
                    ``(C) prohibitions on the release of information on 
                the whereabouts of 1 party to another party if the 
                State has reason to believe that the release of the 
                information may result in physical or emotional harm to 
                the former party.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
become effective on October 1, 1997.

SEC. 405. COOPERATION REQUIREMENTS AND GOOD CAUSE EXCEPTIONS.

    (a) Child Support Enforcement Requirements.--Section 454, as 
amended by section 405, is amended--
            (1) by striking ``and'' at the end of paragraph (24);
            (2) by striking the period at the end of paragraph (25) and 
        inserting ``; and''; and
            (3) by adding at the end the following new paragraph:
            ``(26) provide that the State agency administering the plan 
        under this part--
                    ``(A) will make the determination specified under 
                paragraph (4), as to whether an individual is 
                cooperating with efforts to establish paternity and 
                secure support (or has good cause not to cooperate with 
                such efforts) for purposes of the requirements of part 
                A of this title and section 1912;
                    ``(B) will advise individuals, both orally and in 
                writing, of the grounds for good cause exceptions to 
                the requirement to cooperate with such efforts;
                    ``(C) will take the best interests of the child 
                into consideration in making the determination whether 
                such individual has good cause not to cooperate with 
                such efforts;
                    ``(D)(i) will make the initial determination as to 
                whether an individual is cooperating (or has good cause 
                not to cooperate) within 10 days after such individual 
                is referred to such State agency by the State agency 
                administering the program under part A or section 1912;
                    ``(ii) will make redeterminations as to cooperation 
                or good cause at appropriate intervals; and
                    ``(iii) will promptly notify the individual, and 
                the State agencies administering such programs, of each 
                such determination and redetermination;
                    ``(E) with respect to any child born on or after 
                the date 10 months after the enactment of this 
                provision, will not determine (or redetermine) the 
                mother (or other custodial relative) of such child to 
                be cooperating with efforts to establish paternity 
                unless such individual furnishes--
                            ``(i) the name of the putative father (or 
                        fathers); and
                            ``(ii) sufficient additional information to 
                        enable the State agency, if reasonable efforts 
                        were made, to verify the identity of the person 
                        named as the putative father (including such 
                        information as the putative father's present 
                        address, telephone number, date of birth, past 
                        or present place of employment, school 
                        previously or currently attended, and names and 
                        addresses of parents, friends, or relatives 
                        able to provide location information, or other 
                        information that could enable service of 
                        process on such person), and
                    ``(F)(i) (where a custodial parent who was 
                initially determined not to be cooperating (or to have 
                good cause not to cooperate) is later determined to be 
                cooperating or to have good cause not to cooperate) 
                will immediately notify the State agencies 
                administering the programs under part A or section 1912 
                that this eligibility condition has been met; and
                    ``(ii) (where a custodial parent was initially 
                determined to be cooperating (or to have good cause not 
                to cooperate) will not later determine such individual 
                not to be cooperating (or not to have good cause not to 
                cooperate)) until such individual has been afforded an 
                opportunity for a hearing.''.
    (b) Medicaid Amendments.--Section 1912(a) is amended--
            (1) in paragraph (1)(B), by inserting ``(except as provided 
        in paragraph (2))'' after ``to cooperate with the State'';
            (2) in subparagraphs (B) and (C) of paragraph (1) by 
        striking ``, unless'' and all that follows and inserting a 
        semicolon; and
            (3) by redesignating paragraph (2) as paragraph (5), and 
        inserting after paragraph (1) the following new paragraphs:
            ``(2) provide that the State agency will immediately refer 
        each applicant or recipient requiring paternity establishment 
        services to the State agency administering the program under 
        part D of title IV;
            ``(3) provide that an individual will not be required to 
        cooperate with the State, as provided under paragraph (1), if 
        the individual is found to have good cause for refusing to 
        cooperate, as determined in accordance with standards 
        prescribed by the Secretary, which standards shall take into 
        consideration the best interests of the individuals involved--
                    ``(A) to the satisfaction of the State agency 
                administering the program under part D, as determined 
                in accordance with section 454(26), with respect to the 
                requirements to cooperate with efforts to establish 
                paternity and to obtain support (including medical 
                support) from a parent; and
                    ``(B) to the satisfaction of the State agency 
                administering the program under this title, with 
                respect to other requirements to cooperate under 
                paragraph (1);
            ``(4) provide that (except as provided in paragraph (5)) an 
        applicant requiring paternity establishment services other than 
        an individual who is presumptively eligible pursuant to section 
        1920) shall not be eligible for medical assistance under this 
        title until such applicant--
                    ``(A) has furnished to the agency administering the 
                State plan under part D of title IV the information 
                specified in section 454(26)(E); or
                    ``(B) has been determined by such agency to have 
                good cause not to cooperate; and
            ``(5) provide that the provisions of paragraph (4) shall 
        not apply with respect to an applicant--
                    ``(A) if such agency has not, within 10 days after 
                such individual was referred to such agency, provided 
                the notification required by section 454(26)(D)(iii), 
                until such notification is received; and
                    ``(B) if such individual appeals a determination 
                that the individual lacks good cause for 
                noncooperation, until after such determination is 
                affirmed after notice and opportunity for a hearing.''.
    (c) Effective Date.--The amendments made by this section shall be 
effective with respect to applications filed in or after the first 
calendar quarter beginning 10 months or more after the date of the 
enactment of this amendment (or such earlier quarter as the State may 
select) for transitional aid under part A of title IV of the Social 
Security Act or for medical assistance under title XIX of such Act.

              PART II--PROGRAM ADMINISTRATION AND FUNDING

SEC. 411. FEDERAL MATCHING PAYMENTS.

    (a) Increased Base Matching Rate.--Section 455(a)(2) (42 U.S.C. 
655(a)(2)) is amended to read as follows:
            ``(2) The applicable percent for a quarter for purposes of 
        paragraph (1)(A) is--
                    ``(A) for fiscal year 1997, 69 percent,
                    ``(B) for fiscal year 1998, 72 percent, and
                    ``(C) for fiscal year 1999 and succeeding fiscal 
                years, 75 percent.''.
    (b) Maintenance of Effort.--Section 455 (42 U.S.C. 655) is 
amended--
            (1) in subsection (a)(1), in the matter preceding 
        subparagraph (A), by striking ``From'' and inserting ``Subject 
        to subsection (c), from''; and
            (2) by inserting after subsection (b) the following new 
        subsection:
    ``(c) Notwithstanding the provisions of subsection (a), total 
expenditures for the State program under this part for fiscal year 1997 
and each succeeding fiscal year (excluding 1-time capital expenditures 
for automation), reduced by the percentage specified for such fiscal 
year under subsection (a)(2) shall not be less than such total 
expenditures for fiscal year 1996, reduced by 66 percent.''.

SEC. 412. PERFORMANCE-BASED INCENTIVES AND PENALTIES.

    (a) Incentive Adjustments to Federal Matching Rate.--Section 458 
(42 U.S.C. 658) is amended to read as follows:

                ``incentive adjustments to matching rate

    ``Sec. 458. (a) Incentive Adjustment.--
            ``(1) In general.--In order to encourage and reward State 
        child support enforcement programs which perform in an 
        effective manner, the Federal matching rate for payments to a 
        State under section 455(a)(1)(A), for each fiscal year 
        beginning on or after October 1, 1998, shall be increased by a 
        factor reflecting the sum of the applicable incentive 
        adjustments (if any) determined in accordance with regulations 
        under this section with respect to Statewide paternity 
        establishment and to overall performance in child support 
        enforcement.
            ``(2) Standards.--
                    ``(A) In general.--The Secretary shall specify in 
                regulations--
                            ``(i) the levels of accomplishment, and 
                        rates of improvement as alternatives to such 
                        levels, which States must attain to qualify for 
                        incentive adjustments under this section; and
                            ``(ii) the amounts of incentive adjustment 
                        that shall be awarded to States achieving 
                        specified accomplishment or improvement levels, 
                        which amounts shall be graduated, ranging up 
                        to--
                                    ``(I) 5 percentage points, in 
                                connection with Statewide paternity 
                                establishment; and
                                    ``(II) 10 percentage points, in 
                                connection with overall performance in 
                                child support enforcement.
                    ``(B) Limitation.--In setting performance standards 
                pursuant to subparagraph (A)(i) and adjustment amounts 
                pursuant to subparagraph (A)(ii), the Secretary shall 
                ensure that the aggregate number of percentage point 
                increases as incentive adjustments to all States do not 
                exceed such aggregate increases as assumed by the 
                Secretary in estimates of the cost of this section as 
                of June 1995, unless the aggregate performance of all 
                States exceeds the projected aggregate performance of 
                all States in such cost estimates.
            ``(3) Determination of incentive adjustment.--The Secretary 
        shall determine the amount (if any) of incentive adjustment due 
        each State on the basis of the data submitted by the State 
        pursuant to section 454(15)(B) concerning the levels of 
        accomplishment (and rates of improvement) with respect to 
        performance indicators specified by the Secretary pursuant to 
        this section.
            ``(4) Fiscal year subject to incentive adjustment.--The 
        total percentage point increase determined pursuant to this 
        section with respect to a State program in a fiscal year shall 
        apply as an adjustment to the applicable percent under section 
        455(a)(2) for payments to such State for the succeeding fiscal 
        year.
            ``(5) Recycling of incentive adjustment.--A State shall 
        expend in the State program under this part all funds paid to 
        the State by the Federal Government as a result of an incentive 
        adjustment under this section.
    ``(b) Meaning of Terms.--
            ``(1) Statewide paternity establishment percentage.--
                    ``(A) In general.--For purposes of this section, 
                the term `Statewide paternity establishment percentage' 
                means, with respect to a fiscal year, the ratio 
                (expressed as a percentage) of--
                            ``(i) the total number of out-of-wedlock 
                        children in the State under 1 year of age for 
                        whom paternity is established or acknowledged 
                        during the fiscal year, to
                            ``(ii) the total number of children 
                        requiring paternity establishment born in the 
                        State during such fiscal year.
                    ``(B) Alternative measurement.--The Secretary shall 
                develop an alternate method of measurement for the 
                Statewide paternity establishment percentage for any 
                State that does not record the out-of-wedlock status of 
                children on birth certificates.
            ``(2) Overall performance in child support enforcement.--
        The term `overall performance in child support enforcement' 
        means a measure or measures of the effectiveness of the State 
        agency in a fiscal year which takes into account factors 
        including--
                    ``(A) the percentage of cases requiring a child 
                support order in which such an order was established;
                    ``(B) the percentage of cases in which child 
                support is being paid;
                    ``(C) the ratio of child support collected to child 
                support due; and
                    ``(D) the cost-effectiveness of the State program, 
                as determined in accordance with standards established 
                by the Secretary in regulations.''.
    (b) Adjustment of Payments Under Part D of Title IV.--Section 
455(a)(2) (42 U.S.C. 655(a)(2)), as amended by section 411(a), is 
amended--
            (1) by striking the period at the end of subparagraph (C) 
        and inserting a comma; and
            (2) by adding after and below subparagraph (C), flush with 
        the left margin of the paragraph, the following:
``increased by the incentive adjustment factor (if any) determined by 
the Secretary pursuant to section 458.''.
    (c) Conforming Amendments.--Section 454(22) (42 U.S.C. 654(22)) is 
amended--
            (1) by striking ``incentive payments'' the first place it 
        appears and inserting ``incentive adjustments''; and
            (2) by striking ``any such incentive payments made to the 
        State for such period'' and inserting ``any increases in 
        Federal payments to the State resulting from such incentive 
        adjustments''.
    (d) Calculation of IV-D Paternity Establishment Percentage.--
            (1) Overall performance.--Section 452(g)(1) (42 U.S.C. 
        652(g)(1)) is amended in the matter preceding subparagraph (A) 
        by inserting ``its overall performance in child support 
        enforcement is satisfactory (as defined in section 458(b) and 
        regulations of the Secretary), and'' after ``1994,''.
            (2) Definition.--Section 452(g)(2)(A) (42 U.S.C. 
        652(g)(2)(A)) is amended, in the matter preceding clause (i)--
                    (A) by striking ``paternity establishment 
                percentage'' and inserting ``IV-D paternity 
                establishment percentage''; and
                    (B) by striking ``(or all States, as the case may 
                be)''.
            (3) Modification of requirements.--Section 452(g)(3) (42 
        U.S.C. 652(g)(3)) is amended--
                    (A) by striking subparagraph (A) and redesignating 
                subparagraphs (B) and (C) as subparagraphs (A) and (B), 
                respectively;
                    (B) in subparagraph (A), as redesignated, by 
                striking ``the percentage of children born out-of-
                wedlock in the State'' and inserting ``the percentage 
                of children in the State who are born out of wedlock or 
                for whom support has not been established''; and
                    (C) in subparagraph (B), as redesignated--
                            (i) by inserting ``and overall performance 
                        in child support enforcement'' after 
                        ``paternity establishment percentages''; and
                            (ii) by inserting ``and securing support'' 
                        before the period.
    (e) Reduction of Payments Under Part D of Title IV.--
            (1) New requirements.--Section 455 (42 U.S.C. 655) is 
        amended--
                    (A) by redesignating subsection (e) as subsection 
                (f); and
                    (B) by inserting after subsection (d) the following 
                new subsection:
    ``(e)(1) Notwithstanding any other provision of law, if the 
Secretary finds, with respect to a State program under this part in a 
fiscal year beginning on or after October 1, 1997--
            ``(A)(i) on the basis of data submitted by a State pursuant 
        to section 454(15)(B), that the State program in such fiscal 
        year failed to achieve the IV-D paternity establishment 
        percentage (as defined in section 452(g)(2)(A)) or the 
        appropriate level of overall performance in child support 
        enforcement (as defined in section 458(b)(2)), or to meet other 
        performance measures that may be established by the Secretary, 
        or
            ``(ii) on the basis of an audit or audits of such State 
        data conducted pursuant to section 452(a)(4)(C), that the State 
        data submitted pursuant to section 454(15)(B) is incomplete or 
        unreliable; and
            ``(B) that, with respect to the succeeding fiscal year--
                    ``(i) the State failed to take sufficient 
                corrective action to achieve the appropriate 
                performance levels as described in subparagraph (A)(i) 
                of this paragraph, or
                    ``(ii) the data submitted by the State pursuant to 
                section 454(15)(B) is incomplete or unreliable,
the amounts otherwise payable to the State under this part for quarters 
following the end of such succeeding fiscal year, prior to quarters 
following the end of the first quarter throughout which the State 
program is in compliance with such performance requirement, shall be 
reduced by the percentage specified in paragraph (2).
    ``(2) The reductions required under paragraph (1) shall be--
            ``(A) not less than 3 nor more than 5 percent, or
            ``(B) not less than 5 nor more than 7 percent, if the 
        finding is the second consecutive finding made pursuant to 
        paragraph (1), or
            ``(C) not less than 7 nor more than 10 percent, if the 
        finding is the third or a subsequent consecutive such finding.
    ``(3) For purposes of this subsection, section 402(a)(9), and 
section 452(a)(4), a State which is determined as a result of an audit 
to have submitted incomplete or unreliable data pursuant to section 
454(15)(B), shall be determined to have submitted adequate data if the 
Secretary determines that the extent of the incompleteness or 
unreliability of the data is of a technical nature which does not 
adversely affect the determination of the level of the State's 
performance.''.
            (2) Conforming amendments.--Subsections (d)(3)(A), (g)(1), 
        and (g)(3)(A) of section 452 (42 U.S.C. 652) are each amended 
        by striking ``403(h)'' and inserting ``455(e)''.
    (f) Effective Dates.--
            (1) Incentive adjustments.--
                    (A) In general.--The amendments made by subsections 
                (a), (b), and (c) shall become effective on October 1, 
                1997, except to the extent provided in subparagraph 
                (B).
                    (B) Exception.--Section 458 of the Social Security 
                Act, as in effect prior to the enactment of this 
                section, shall be effective for purposes of incentive 
                payments to States for fiscal years prior to fiscal 
                year 1999.
            (2) Penalty reductions.--
                    (A) In general.--The amendments made by subsection 
                (d) shall become effective with respect to calendar 
                quarters beginning on and after the date of the 
                enactment of this Act.
                    (B) Reductions.--The amendments made by subsection 
                (e) shall become effective with respect to calendar 
                quarters beginning on and after the date 1 which is 
                year after the date of the enactment of this Act.

SEC. 413. FEDERAL AND STATE REVIEWS AND AUDITS.

    (a) State Agency Activities.--Section 454 (42 U.S.C. 654) is 
amended--
            (1) in paragraph (14)--
                    (A) by striking ``(14)'' and inserting ``(14)(A)''; 
                and
                    (B) by inserting after the semicolon ``and'';
            (2) by redesignating paragraph (15) as subparagraph (B) of 
        paragraph (14); and
            (3) by inserting after paragraph (14) the following new 
        paragraph:
            ``(15) provide for--
                    ``(A) a process for annual reviews of and reports 
                to the Secretary on the State program under this part--
                            ``(i) which shall include such information 
                        as may be necessary to measure State compliance 
                        with Federal requirements for expedited 
                        procedures and timely case processing, using 
                        such standards and procedures as are required 
                        by the Secretary; and
                            ``(ii) under which the State agency will 
                        determine the extent to which such program is 
                        in conformity with applicable requirements with 
                        respect to the operation of State programs 
                        under this part (including the status of 
                        complaints filed under the procedure required 
                        under paragraph (12)(B)); and
                    ``(B) a process of extracting from the State 
                automated data processing system and transmitting to 
                the Secretary data and calculations concerning the 
                levels of accomplishment (and rates of improvement) 
                with respect to applicable performance indicators 
                (including IV-D paternity establishment percentages and 
                overall performance in child support enforcement) to 
                the extent necessary for purposes of sections 452(g) 
                and 458.''.
    (b) Federal Activities.--Section 452(a)(4) (42 U.S.C. 652(a)(4)) is 
amended to read as follows:
            ``(4)(A) review data and calculations transmitted by State 
        agencies pursuant to section 454(15)(B) on State program 
        accomplishments with respect to performance indicators for 
        purposes of section 452(g) and 458, and determine the amount 
        (if any) of penalty reductions pursuant to section 455(e) to be 
        applied to the State;
            ``(B) review annual reports by State agencies pursuant to 
        section 454(15)(A) on State program conformity with Federal 
        requirements; evaluate any elements of a State program in which 
        significant deficiencies are indicated by such report on the 
        status of complaints under the State procedure under section 
        454(12)(B); and, as appropriate, provide to the State agency 
        comments, recommendations for additional or alternative 
        corrective actions, and technical assistance; and
            ``(C) conduct audits, in accordance with the government 
        auditing standards of the United States Comptroller General--
                    ``(i) at least once every 3 years (or more 
                frequently, in the case of a State which fails to meet 
                requirements of this part, or of regulations 
                implementing such requirements, concerning performance 
                standards and reliability of program data) to assess 
                the completeness, reliability, and security of the 
                data, and the accuracy of the reporting systems, used 
                for the calculations of performance indicators 
                specified in subsection (g) and section 458;
                    ``(ii) of the adequacy of financial management of 
                the State program, including assessments of--
                            ``(I) whether Federal and other funds made 
                        available to carry out the State program under 
                        this part are being appropriately expended, and 
                        are properly and fully accounted for; and
                            ``(II) whether collections and 
                        disbursements of support payments and program 
                        income are carried out correctly and are 
                        properly and fully accounted for; and
                    ``(iii) for such other purposes as the Secretary 
                may find necessary;''.
    (c) Effective Date.--The amendments made by this section shall be 
effective with respect to calendar quarters beginning on or after the 
date which is 1 year after the enactment of this section.

SEC. 414. REQUIRED REPORTING PROCEDURES.

    (a) Establishment.--Section 452(a)(5) (42 U.S.C. 652(a)(5)) is 
amended by inserting ``, and establish procedures to be followed by 
States for collecting and reporting information required to be provided 
under this part, and establish uniform definitions (including those 
necessary to enable the measurement of State compliance with the 
requirements of this part relating to expedited processes and timely 
case processing) to be applied in following such procedures'' before 
the semicolon.
    (b) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 404(a) and 405, is amended--
            (1) by striking ``and'' at the end of paragraph (25);
            (2) by striking the period at the end of paragraph (26) and 
        inserting ``; and''; and
            (3) by adding after paragraph (26) the following:
            ``(27) provide that the State shall use the definitions 
        established under section 452(a)(5) in collecting and reporting 
        information as required under this part.''.

SEC. 415. AUTOMATED DATA PROCESSING REQUIREMENTS.

    (a) Revised Requirements.--
            (1) State plan.--Section 454(16) (42 U.S.C. 654(16)) is 
        amended--
                    (A) by striking ``, at the option of the State,'';
                    (B) by inserting ``and operation by the State 
                agency'' after ``for the establishment'';
                    (C) by inserting ``meeting the requirements of 
                section 454A'' after ``information retrieval system'';
                    (D) by striking ``in the State and localities 
                thereof, so as (A)'' and inserting ``so as'';
                    (E) by striking ``(i)''; and
                    (F) by striking ``(including, but not limited to,'' 
                and all that follows and to the semicolon.
            (2) Automated data processing.--Part D of title IV (42 
        U.S.C. 651-669) is amended by inserting after section 454 the 
        following new section:

                      ``automated data processing

    ``Sec. 454A. (a) In General.--In order to meet the requirements of 
this section, for purposes of the requirement of section 454(16), a 
State agency shall have in operation a single statewide automated data 
processing and information retrieval system which has the capability to 
perform the tasks specified in this section, and performs such tasks 
with the frequency and in the manner specified in this part or in 
regulations or guidelines of the Secretary.
    ``(b) Program Management.--The automated system required under this 
section shall perform such functions as the Secretary may specify 
relating to management of the program under this part, including--
            ``(1) controlling and accounting for use of Federal, State, 
        and local funds to carry out such program; and
            ``(2) maintaining the data necessary to meet Federal 
        reporting requirements on a timely basis.
    ``(c) Calculation of Performance Indicators.--In order to enable 
the Secretary to determine the incentive and penalty adjustments 
required by sections 452(g) and 458, the State agency shall--
            ``(1) use the automated system--
                    ``(A) to maintain the requisite data on State 
                performance with respect to paternity establishment and 
                child support enforcement in the State; and
                    ``(B) to calculate the IV-D paternity establishment 
                percentage and overall performance in child support 
                enforcement for the State for each fiscal year; and
            ``(2) have in place systems controls to ensure the 
        completeness, and reliability of, and ready access to, the data 
        described in paragraph (1)(A), and the accuracy of the 
        calculations described in paragraph (1)(B).
    ``(d) Information Integrity and Security.--The State agency shall 
have in effect safeguards on the integrity, accuracy, and completeness 
of, access to, and use of data in the automated system required under 
this section, which shall include the following (in addition to such 
other safeguards as the Secretary specifies in regulations):
            ``(1) Policies restricting access.--Written policies 
        concerning access to data by State agency personnel, and 
        sharing of data with other persons, which--
                    ``(A) permit access to and use of data only to the 
                extent necessary to carry out program responsibilities;
                    ``(B) specify the data which may be used for 
                particular program purposes, and the personnel 
                permitted access to such data; and
                    ``(C) ensure that data obtained or disclosed for a 
                limited program purpose is not used or redisclosed for 
                another, impermissible purpose.
            ``(2) Systems controls.--Systems controls (such as 
        passwords or blocking of fields) to ensure strict adherence to 
        the policies specified under paragraph (1).
            ``(3) Monitoring of access.--Routine monitoring of access 
        to and use of the automated system, through methods such as 
        audit trails and feedback mechanisms, to guard against and 
        promptly identify unauthorized access or use.
            ``(4) Training and information.--The State agency shall 
        have in effect procedures to ensure that all personnel 
        (including State and local agency staff and contractors) who 
        may have access to or be required to use sensitive or 
        confidential program data are fully informed of applicable 
        requirements and penalties, and are adequately trained in 
        security procedures.
            ``(5) Penalties.--The State agency shall have in effect 
        administrative penalties (up to and including dismissal from 
        employment) for unauthorized access to, or disclosure or use 
        of, confidential data.''.
            (3) Regulations.--Section 452 (42 U.S.C. 652) is amended by 
        adding at the end the following new subsection:
    ``(j) The Secretary shall prescribe final regulations for 
implementation of the requirements of section 454A not later than 2 
years after the date of the enactment of this subsection.''.
            (4) Implementation timetable.--Section 454(24) (42 U.S.C. 
        654(24)), as amended by sections 404(a)(2) and 414(b)(1), is 
        amended to read as follows:
            ``(24) provide that the State will have in effect an 
        automated data processing and information retrieval system--
                    ``(A) by October 1, 1996, meeting all requirements 
                of this part which were enacted on or before the date 
                of the enactment of the Family Support Act of 1988; and
                    ``(B) by October 1, 1999, meeting all requirements 
                of this part enacted on or before the date of the 
                enactment of the Interstate Child Support 
                Responsibility Act of 1995 (but this provision shall 
                not be construed to alter earlier deadlines specified 
                for elements of such system), except that such deadline 
                shall be extended by 1 day for each day (if any) by 
                which the Secretary fails to meet the deadline imposed 
                by section 452(j);''.
    (b) Special Federal Matching Rate for Development Costs of 
Automated Systems.--Section 455(a) (42 U.S.C. 655(a)) is amended--
            (1) in paragraph (1)(B)--
                    (A) by striking ``90 percent'' and inserting ``the 
                percent specified in paragraph (3)'';
                    (B) by striking ``so much of''; and
                    (C) by striking ``which the Secretary'' and all 
                that follows through ``thereof''; and
            (2) by adding at the end the following new paragraph:
    ``(3)(A) The Secretary shall pay to each State, for each quarter in 
fiscal year 1996, 90 percent of so much of State expenditures described 
in paragraph (1)(B) as the Secretary finds are for a system meeting the 
requirements specified in section 454(16), or meeting such requirements 
without regard to subparagraph (D) thereof.
    ``(B)(i) The Secretary shall pay to each State, for each quarter in 
fiscal years 1997 through 2001, the percentage specified in clause (ii) 
of so much of State expenditures described in paragraph (1)(B) as the 
Secretary finds are for a system meeting the requirements specified in 
section 454(16) and 454A.
    ``(ii) The percentage specified in this clause, for purposes of 
clause (i), is the higher of--
            ``(I) 80 percent, or
            ``(II) the percentage otherwise applicable to Federal 
        payments to the State under paragraph (1)(A) (as adjusted 
        pursuant to section 458).''.
    (c) Conforming Amendment.--Section 123(c) of the Family Support Act 
of 1988 (102 Stat. 2352; Public Law 100-485) is repealed.

SEC. 416. DIRECTOR OF CHILD SUPPORT ENFORCEMENT PROGRAM; STAFFING 
              STUDY.

    (a) Reporting to Secretary.--Section 452(a) (42 U.S.C. 652(a)) is 
amended in the matter preceding paragraph (1) by striking ``directly''.
    (b) Staffing Studies.--
            (1) Scope.--The Secretary of Health and Human Services (in 
        this subsection referred to as the ``Secretary'') shall, 
        directly or by contract, conduct studies of the staffing of 
        each State child support enforcement program under part D of 
        title IV of the Social Security Act. Such studies shall--
                    (A) include a review of the staffing needs created 
                by requirements for automated data processing, 
                maintenance of a central case registry and centralized 
                collections of child support, and of changes in these 
                needs resulting from changes in such requirements; and
                    (B) examine and report on effective staffing 
                practices used by the States and on recommended 
                staffing procedures.
            (2) Frequency of studies.--The Secretary shall complete the 
        first staffing study required under paragraph (1) not later 
        than October 1, 1998, and may conduct additional studies 
        subsequently at appropriate intervals.
            (3) Report to the congress.--The Secretary shall submit a 
        report to the Congress stating the findings and conclusions of 
        each study conducted under this subsection.

SEC. 417. FUNDING FOR SECRETARIAL ASSISTANCE TO STATE PROGRAMS.

    Section 452 (42 U.S.C. 652), as amended by section 415(a)(3), is 
amended by adding at the end the following new subsection:
    ``(k)(1) There shall be available to the Secretary, from amounts 
appropriated for fiscal year 1996 and each succeeding fiscal year for 
payments to States under this part, the amount specified in paragraph 
(2) for the costs to the Secretary for--
            ``(A) information dissemination and technical assistance to 
        States, training of State and Federal staff, staffing studies, 
        and related activities needed to improve programs (including 
        technical assistance concerning State automated systems);
            ``(B) research, demonstration, and special projects of 
        regional or national significance relating to the operation of 
        State programs under this part; and
            ``(C) operation of the Federal Parent Locator Service under 
        section 453, to the extent such costs are not recovered through 
        user fees.
    ``(2) The amount specified in this paragraph for a fiscal year is 
the amount equal to a percentage of the reduction in Federal payments 
to States under part A on account of child support (including 
arrearages) collected in the preceding fiscal year on behalf of 
children receiving aid under such part A in such preceding fiscal year 
(as determined on the basis of the most recent reliable data available 
to the Secretary as of the end of the third calendar quarter following 
the end of such preceding fiscal year), equal to 2 percent, for the 
activities specified in subparagraphs (A), (B), and (C) of paragraph 
(1).''.

SEC. 418. DATA COLLECTION AND REPORTS BY THE SECRETARY.

    (a) Annual Report to Congress.--
            (1) In general.--Section 452(a)(10)(A) (42 U.S.C. 
        652(a)(10)(A)) is amended--
                    (A) by striking ``this part;'' and inserting ``this 
                part, including--''; and
                    (B) by adding at the end the following indented 
                clauses:
                            ``(i) the total amount of child support 
                        payments collected as a result of services 
                        furnished during such fiscal year to 
                        individuals receiving services under this part;
                            ``(ii) the cost to the States and to the 
                        Federal Government of furnishing such services 
                        to those individuals; and
                            ``(iii) the number of cases involving 
                        families--
                                    ``(I) who became ineligible for aid 
                                under part A during a month in such 
                                fiscal year; and
                                    ``(II) with respect to whom a child 
                                support payment was received in the 
                                same month;''.
            (2) Certain data.--Section 452(a)(10)(C) (42 U.S.C. 
        652(a)(10)(C)) is amended--
                    (A) in the matter preceding clause (i), by striking 
                ``with the data required under each clause being 
                separately stated for cases'' and all that follows 
                through ``part:'' and inserting ``separately stated for 
                cases where the child is receiving aid to families with 
                dependent children (or foster care maintenance payments 
                under part E), or formerly received such aid or 
                payments and the State is continuing to collect support 
                assigned to it under section 402(a)(9), 471(a)(17), or 
                1912, and all other cases under this part--'';
                    (B) in each of clauses (i) and (ii), by striking 
                ``, and the total amount of such obligations'';
                    (C) in clause (iii), by striking ``described in'' 
                and all that follows through the semicolon and 
                inserting ``in which support was collected during the 
                fiscal year;'';
                    (D) by striking clause (iv); and
                    (E) by redesignating clause (v) as clause (vii), 
                and inserting after clause (iii) the following new 
                clauses:
                            ``(iv) the total amount of support 
                        collected during such fiscal year and 
                        distributed as current support;
                            ``(v) the total amount of support collected 
                        during such fiscal year and distributed as 
                        arrearages;
                            ``(vi) the total amount of support due and 
                        unpaid for all fiscal years; and''.
            (3) Use of federal courts.--Section 452(a)(10)(G) (42 
        U.S.C. 652(a)(10)(G)) is amended by striking ``on the use of 
        Federal courts and''.
            (4) Additional information not necessary.--Section 
        452(a)(10) (42 U.S.C. 652(a)(10)) is amended by striking all 
        that follows subparagraph (I).
    (b) Data Collection and Reporting.--Section 469 (42 U.S.C. 669) is 
amended--
            (1) by striking subsections (a) and (b) and inserting the 
        following:
    ``(a) The Secretary shall collect and maintain, on a fiscal year 
basis, up-to-date statistics, by State, with respect to services to 
establish paternity and services to establish child support 
obligations, the data specified in subsection (b), separately stated, 
in the case of each such service, with respect to--
            ``(1) families (or dependent children) receiving aid under 
        plans approved under part A (or E); and
            ``(2) families not receiving such aid.
    ``(b) The data referred to in subsection (a) are--
            ``(1) the number of cases in the caseload of the State 
        agency administering the plan under this part in which such 
        service is needed; and
            ``(2) the number of such cases in which the service has 
        been provided.''; and
            (2) in subsection (c), by striking ``(a)(2)'' and inserting 
        ``(b)(2)''.
    (c) Effective Date.--The amendments made by this section shall be 
effective with respect to fiscal year 1996 and succeeding fiscal years.

                   PART III--LOCATE AND CASE TRACKING

SEC. 421. CENTRAL STATE AND CASE REGISTRY.

    Section 454A, as added by section 415(a)(2), is amended by adding 
at the end the following new subsections:
    ``(e) Central Case Registry.--
            ``(1) In general.--The automated system required under this 
        section shall perform the functions, in accordance with the 
        provisions of this subsection, of a single central registry 
        containing records with respect to each case in which services 
        are being provided by the State agency (including, on and after 
        October 1, 1998, each order specified in section 466(a)(12)), 
        using such standardized data elements (such as names, social 
        security numbers or other uniform identification numbers, dates 
        of birth, and case identification numbers), and containing such 
        other information (such as information on case status) as the 
        Secretary may require.
            ``(2) Payment Records.--Each case record in the central 
        registry shall include a record of--
                    ``(A) the amount of monthly (or other periodic) 
                support owed under the support order, and other amounts 
                due or overdue (including arrearages, interest or late 
                payment penalties, and fees);
                    ``(B) all child support and related amounts 
                collected (including such amounts as fees, late payment 
                penalties, and interest on arrearages);
                    ``(C) the distribution of such amounts collected; 
                and
                    ``(D) the birth date of the child for whom the 
                child support order is entered.
            ``(3) Updating and monitoring.--The State agency shall 
        promptly establish and maintain, and regularly monitor, case 
        records in the registry required by this subsection, on the 
        basis of--
                    ``(A) information on administrative actions and 
                administrative and judicial proceedings and orders 
                relating to paternity and support;
                    ``(B) information obtained from matches with 
                Federal, State, or local data sources;
                    ``(C) information on support collections and 
                distributions; and
                    ``(D) any other relevant information.
    ``(f) Data Matches and Other Disclosures of Information.--The 
automated system required under this section shall have the capacity, 
and be used by the State agency, to extract data at such times, and in 
such standardized format or formats, as may be required by the 
Secretary, and to share and match data with, and receive data from, 
other data bases and data matching services, in order to obtain (or 
provide) information necessary to enable the State agency (or Secretary 
or other State or Federal agencies) to carry out responsibilities under 
this part. Data matching activities of the State agency shall include 
at least the following:
            ``(1) Data bank of child support orders.--Furnishing to the 
        Data Bank of Child Support Orders established under section 
        453(h) (and updating as necessary, with information, including 
        notice of expiration of orders) minimal information specified 
        by the Secretary on each child support case in the central case 
        registry.
            ``(2) Federal parent locator service.--Exchanging data with 
        the Federal Parent Locator Service for the purposes specified 
        in section 453.
            ``(3) Title iv-a and medicaid agencies.--Exchanging data 
        with State agencies (of the State and of other States) 
        administering the programs under part A and title XIX, as 
        necessary for the performance of State agency responsibilities 
        under this part and under such programs.
            ``(4) Intra- and interstate data matches.--Exchanging data 
        with other agencies of the State, agencies of other States, and 
        interstate information networks, as necessary and appropriate 
        to carry out (or assist other States to carry out) the purposes 
        of this part.''.
SEC. 422. CENTRALIZED COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

    (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 404(a), 405, and 414(b), is amended--
            (1) by striking ``and'' at the end of paragraph (26);
            (2) by striking the period at the end of paragraph (27) and 
        inserting ``; and''; and
            (3) by adding after paragraph (27) the following new 
        paragraph:
            ``(28) provide that the State agency, on and after October 
        1, 1998--
                    ``(A) will operate a centralized, automated unit 
                for the collection and disbursement of child
                 support under orders being enforced under this part, 
in accordance with section 454B; and
                    ``(B) will have sufficient State staff (consisting 
                of State employees), and, at State option, contractors 
                reporting directly to the State agency to monitor and 
                enforce support collections through such centralized 
                unit, including carrying out the automated data 
                processing responsibilities specified in section 
                454A(g) and to impose, as appropriate in particular 
                cases, the administrative enforcement remedies 
                specified in section 466(c)(1).''.
    (b) Establishment of Centralized Collection Unit.--Part D of title 
IV (42 U.S.C. 651-669) is amended by adding after section 454A the 
following new section:

     ``centralized collection and disbursement of support payments

    ``Sec. 454B. (a) In General.--In order to meet the requirement of 
section 454(28), the State agency must operate a single, centralized, 
automated unit for the collection and disbursement of support payments, 
coordinated with the automated data system required under section 454A, 
in accordance with the provisions of this section, which shall be--
            ``(1) operated directly by the State agency (or by 2 or 
        more State agencies under a regional cooperative agreement), or 
        by a single contractor responsible directly to the State 
        agency; and
            ``(2) used for the collection and disbursement (including 
        interstate collection and disbursement) of payments under 
        support orders in all cases being enforced by the State 
        pursuant to section 454(4).
    ``(b) Required Procedures.--The centralized collections unit shall 
use automated procedures, electronic processes, and computer-driven 
technology to the maximum extent feasible, efficient, and economical, 
for the collection and disbursement of support payments, including 
procedures--
            ``(1) for receipt of payments from parents, employers, and 
        other States, and for disbursements to custodial parents and 
        other obligees, the State agency, and the State agencies of 
        other States;
            ``(2) for accurate identification of payments;
            ``(3) to ensure prompt disbursement of the custodial 
        parent's share of any payment; and
            ``(4) to furnish to either parent, upon request, timely 
        information on the current status of support payments.''.
    (c) Use of Automated System.--Section 454A, as added by section 
415(a)(2) and as amended by section 421, is amended by adding at the 
end the following new subsection:
    ``(g) Centralized Collection and Distribution of Support 
Payments.--The automated system required under this section shall be 
used, to the maximum extent feasible, to assist and facilitate 
collections and disbursement of support payments through the 
centralized collections unit operated pursuant to section 454B, through 
the performance of functions including at a minimum--
            ``(1) generation of orders and notices to employers (and 
        other debtors) for the withholding of wages (and other 
        income)--
                    ``(A) within 2 working days after receipt (from the 
                directory of New Hires established under section 453(i) 
                or any other source) of notice of and the income source 
                subject to such withholding; and
                    ``(B) using uniform formats directed by the 
                Secretary;
            ``(2) ongoing monitoring to promptly identify failures to 
        make timely payment; and
            ``(3) automatic use of enforcement mechanisms (including 
        mechanisms authorized pursuant to section 466(c)) where 
        payments are not timely made.''.
    (d) Effective Date.--The amendments made by this section shall 
become effective on October 1, 1998.

SEC. 423. STATE DIRECTORY OF NEW HIRES.

    (a) State Plan Requirement.--Section 454 (42 U.S.C. 654), as 
amended by sections 404(a), 405, 414(b), and 422(a)(2) of this Act, is 
amended--
            (1) by striking ``and'' at the end of paragraph (27);
            (2) by striking the period at the end of paragraph (28) and 
        inserting ``; and''; and
            (3) by adding after paragraph (28) the following:
            ``(28) provide that, on and after October 1, 1998, the 
        State will operate a State Directory of New Hires in accordance 
        with section 453A.''.
    (b) State Directory of New Hires.--Part D of title IV (42 U.S.C. 
651-669) is amended by inserting after section 453 the following:

``SEC. 453A. STATE DIRECTORY OF NEW HIRES.

    ``(a) Establishment.--
            ``(1) In general.--Not later than October 1, 1998, each 
        State shall establish an automated directory (to be known as 
        the `State Directory of New Hires') which shall contain 
        information supplied in accordance with subsection (b) by 
        employers and labor organizations on each newly hired employee.
            ``(2) Definitions.--As used in this section:
                    ``(A) Employee.--The term `employee'--
                            ``(i) means an individual who is an 
                        employee within the meaning of chapter 24 of 
                        the Internal Revenue Code of 1986; and
                            ``(ii) does not include an employee of a 
                        Federal or State agency performing intelligence 
                        or counterintelligence functions, if the head 
                        of such agency has determined that reporting 
                        pursuant to paragraph (1) with respect to the 
                        employee could endanger the safety of the 
                        employee or compromise an ongoing investigation 
                        or intelligence mission.
                    ``(B) Governmental employers.--The term `employer' 
                includes any governmental entity.
                    ``(C) Labor organization.--The term `labor 
                organization' shall have the meaning given such term in 
                section 2(5) of the National Labor Relations Act, and 
                includes any entity (also known as a `hiring hall') 
                which is used by the organization and an employer to 
                carry out requirements described in section 8(f)(3) of 
                such Act of an agreement between the organization and 
                the employer.
    ``(b) Employer Information.--
            ``(1) Reporting requirement.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), each employer (or labor organization) 
                shall furnish to the Directory of New Hires of the 
                State in which a newly hired employee works a report 
                that contains the name, address, and social security 
                number of the employee, and the name of, and 
                identifying number assigned under section 6109 of the 
                Internal Revenue Code of 1986 to, the employer.
                    ``(B) Multistate employers.--An employer who has 
                employees who are employed in 2 or more States may 
                comply with subparagraph (A) by transmitting the report 
                described in subparagraph (A) magnetically or 
                electronically to the State in which the greatest 
                number of employees of the employer are employed.
            ``(2) Timing of report.--The report required by paragraph 
        (1) with respect to an employee shall be made not later than 
        the later of--
                    ``(A) 15 days after the date the employer hires the 
                employee;
                    ``(B) the date the employee first receives wages or 
                other compensation from the employer; or
                    ``(C) in the case of a payroll processing service 
                or an employer that processes more than one payroll and 
                reports by electronic or magnetic means, the first 
                business day of the week following the date on which 
                the employee first receives wages or other compensation 
                from the employer.
    ``(c) Reporting Format and Method.--Each report required by 
subsection (b) shall be made on a W-4 form or the equivalent, and may 
be transmitted by first class mail, magnetically, or electronically.
    ``(d) Civil Money Penalties on Noncomplying Employers.--
            ``(1) In general.--An employer that fails to comply with 
        subsection (b) with respect to an employee shall be subject to 
        a civil money penalty of--
                    ``(A) $25; or
                    ``(B) $500 if, under State law, the failure is the 
                result of a conspiracy between the employer and the 
                employee to not supply the required report or to supply 
                a false or incomplete report.
            ``(2) Applicability of section 1128.--Section 1128 (other 
        than subsections (a) and (b) of such section) shall apply to a 
        civil money penalty under paragraph (1) of this subsection in 
        the same manner as such section applies to a civil money 
        penalty or proceeding under section 1128A(a).
    ``(e) Information Comparisons.--
            ``(1) In general.--Not later than October 1, 1998, an 
        agency designated by the State shall, directly or by contract, 
        conduct automated comparisons of the social security numbers 
        reported by employers pursuant to subsection (b) and the social 
        security numbers appearing in the records of the State case 
        registry for cases being enforced under the State plan.
            ``(2) Notice of match.--When an information comparison 
        conducted under paragraph (1) reveals a match with respect to 
        the social security number of an individual required to provide 
        support under a support order, the State Directory of New Hires 
        shall provide the agency administering the State plan approved 
        under this part of the appropriate State with the name, 
        address, and social security number of the employee to whom the 
        social security number is assigned, and the name of, and 
        identifying number assigned under section 6109 of the Internal 
        Revenue Code of 1986 to, the employer.
    ``(f) Transmission of Information.--
            ``(1) Transmission of wage withholding notices to 
        employers.--Within 2 business days after the date information 
        regarding a newly hired employee is entered into the State 
        Directory of New Hires, the State agency enforcing the 
        employee's child support obligation shall transmit a notice to 
        the employer of the employee directing the employer to withhold 
        from the wages of the employee an amount equal to the monthly 
        (or other periodic) child support obligation of the employee, 
        unless the employee's wages are not subject to withholding 
        pursuant to section 466(b)(3).
            ``(2) Transmissions to the national directory of new 
        hires.--
                    ``(A) New hire information.--Within 4 business days 
                after the State Directory of New Hires receives 
                information from employers pursuant to this section, 
                the State Directory of New Hires shall furnish the 
                information to the National Directory of New Hires.
                    ``(B) Wage and unemployment compensation 
                information.--The State Directory of New Hires shall, 
                on a quarterly basis, furnish to the National Directory 
                of New Hires extracts of the reports required under 
                section 303(a)(6) to be made to the Secretary of Labor 
                concerning the wages and unemployment compensation paid 
                to individuals, by such dates, in such format, and 
                containing such information as the Secretary of Health 
                and Human Services shall specify in regulations.
            ``(3) Business day defined.--As used in this subsection, 
        the term `business day' means a day on which State offices are 
        open for regular business.
    ``(g) Other Uses of New Hire Information.--
            ``(1) Location of child support obligors.--The agency 
        administering the State plan approved under this part shall use 
        information received pursuant to subsection (e)(2) to locate 
        individuals for purposes of establishing paternity and 
        establishing, modifying, and enforcing child support 
        obligations.
            ``(2) Verification of eligibility for certain programs.--A 
        State agency responsible for administering a program specified 
        in section 1137(b) shall have access to information reported by 
        employers pursuant to subsection (b) of this section for 
        purposes of verifying eligibility for the program.
            ``(3) Administration of employment security and workers 
        compensation.--State agencies operating employment security and 
        workers' compensation programs shall have access to information 
        reported by employers pursuant to subsection (b) for the 
        purposes of administering such programs.''.

SEC. 424. AMENDMENTS CONCERNING INCOME WITHHOLDING.

    (a) Mandatory Income Withholding.--
            (1) From wages.--Section 466(a)(1) (42 U.S.C. 666(a)(1)) is 
        amended to read as follows:
            ``(1)(A) Procedures described in subsection (b) for the 
        withholding from income of amounts payable as support in cases 
        subject to enforcement under the State plan.
            ``(B) Procedures under which all child support orders 
        issued (or modified) before October 1, 1996, and which are not 
        otherwise subject to withholding under subsection (b), shall 
        become subject to withholding from wages as provided in 
        subsection (b) if arrearages occur, without the need for a 
        judicial or administrative hearing.''.
            (2) Repeal of certain provisions concerning arrearages.--
        Section 466(a)(8) (42 U.S.C. 666(a)(8)) is repealed.
            (3) Procedures described.--Section 466(b) (42 U.S.C. 
        666(b)) is amended--
                    (A) in the matter preceding paragraph (1), by 
                striking ``subsection (a)(1)'' and inserting 
                ``subsection (a)(1)(A)'';
                    (B) in paragraph (5), by striking ``a public 
                agency'' and all that follows through the period and 
                inserting ``the State through the centralized 
                collections unit established pursuant to section 454B, 
                in accordance with the requirements of such section 
                454B.'';
                    (C) in paragraph (6)(A)(i)--
                            (i) by inserting ``, in accordance with 
                        timetables established by the Secretary,'' 
                        after ``must be required''; and
                            (ii) by striking ``to the appropriate 
                        agency'' and all that follows through the 
                        period and inserting ``to the State centralized 
                        collections unit within 5 working days after 
                        the date such amount would (but for this 
                        subsection) have been paid or credited to the 
                        employee, for distribution in accordance with 
                        this part.'';
                    (D) in paragraph (6)(A)(ii), by inserting ``be in a 
                standard format prescribed by the Secretary, and'' 
                after ``shall''; and
                    (E) in paragraph (6)(D) to read as follows:
            ``(D) Provision must be made for the imposition of a fine 
        against any employer who--
                    ``(i) discharges from employment, refuses to 
                employ, or takes disciplinary action against any absent 
                parent subject to wage withholding required by this 
                subsection because of the existence of such withholding 
                and the obligations or additional obligations which it 
                imposes upon the employer; or
                    ``(ii) fails to withhold support from wages, or to 
                pay such amounts to the State centralized collections 
                unit in accordance with this subsection.''.
    (b) Conforming Amendment.--Section 466(c) (42 U.S.C. 666(c)) is 
repealed.
    (c) Definition of Terms.--The Secretary of Health and Human 
Services shall promulgate regulations providing definitions, for 
purposes of part D of title IV of the Social Security Act, for the term 
``income'' and for such other terms relating to income withholding 
under section 466(b) of such Act as the Secretary may find it necessary 
or advisable to define.

SEC. 425. LOCATOR INFORMATION FROM INTERSTATE NETWORKS.

    Section 466(a) (42 U.S.C. 666(a)), as amended by section 424(a)(2), 
is amended by inserting after paragraph (7) the following new 
paragraph:
            ``(8) Procedures ensuring that the State will neither 
        provide funding for, nor use for any purpose (including any 
        purpose unrelated to the purposes of this part), any automated 
        interstate network or system used to locate individuals--
                    ``(A) for purposes relating to the use of motor 
                vehicles; or
                    ``(B) providing information for law enforcement 
                purposes (where child support enforcement agencies are 
                otherwise allowed access by State and Federal law),
        unless all Federal and State agencies administering programs 
        under this part (including the entities established under 
        section 453) have access to information in such system or 
        network to the same extent as any other user of such system or 
        network.''.
SEC. 426. EXPANSION OF THE FEDERAL PARENT LOCATOR SERVICE.

    (a) Expanded Authority To Locate Individuals and Assets.--Section 
453 (42 U.S.C. 653) is amended--
            (1) in subsection (a), by striking all that follows 
        ``subsection (c))'' and inserting ``, for the purpose of 
        establishing parentage, establishing, setting the amount of, 
        modifying, or enforcing child support obligations--
            ``(1) information on, or facilitating the discovery of, the 
        location of any individual--
                    ``(A) who is under an obligation to pay child 
                support;
                    ``(B) against whom such an obligation is sought; or
                    ``(C) to whom such an obligation is owed,
        including the individual's social security number (or numbers), 
        most recent address, and the name, address, and employer 
        identification number of the individual's employer;
            ``(2) information on the individual's wages (or other 
        income) from, and benefits of, employment (including rights to 
        or enrollment in group health care coverage); and
            ``(3) information on the type, status, location, and amount 
        of any assets of, or debts owed by or to, any such 
        individual.'';
            (2) in subsection (b)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``social security'' and all that follows 
                through ``absent parent'' and inserting ``information 
                described in subsection (a)''; and
                    (B) in paragraph (2), by inserting before the 
                period ``, or from any consumer reporting agency (as 
                defined in section 603(f) of the Fair Credit Reporting 
                Act (15 U.S.C. 1681a(f))''; and
            (3) in subsection (e)(1), by inserting before the period 
        ``, or by consumer reporting agencies''.
    (b) Reimbursement for Information From Federal Agencies.--Section 
453(e)(2) (42 U.S.C. 653(e)(2)) is amended in the 4th sentence by 
inserting before the period ``in an amount which the Secretary 
determines to be reasonable payment for the information exchange (which 
amount shall not include payment for the costs of obtaining, compiling, 
or maintaining the information)''.
    (c) Reimbursement for Reports by State Agencies.--Section 453 (42 
U.S.C. 653) is amended by adding at the end the following:
    ``(g) The Secretary may reimburse Federal and State agencies for 
the costs incurred by such entities in furnishing information requested 
by the Secretary under this section in an amount which the Secretary 
determines to be reasonable payment for the information exchange (which 
amount shall not include payment for the costs of obtaining, compiling, 
or maintaining the information).''.
    (d) Technical Amendments.--
            (1) Sections 452(a)(9), 453(a), 453(b), 463(a), 463(e), and 
        463(f) (42 U.S.C. 652(a)(9), 653(a), 653(b), 663(a), 663(e), 
        and 663(f)) are each amended by inserting ``Federal'' before 
        ``Parent'' each place such term appears.
            (2) Section 453 (42 U.S.C. 653) is amended in the heading 
        by adding ``federal'' before ``parent''.
    (e) New Components.--Section 453 (42 U.S.C. 653), as amended by 
subsection (c) of this section, is amended by adding at the end the 
following:
    ``(h) Federal Case Registry of Child Support Orders.--
            ``(1) In general.--Not later than October 1, 1999, in order 
        to assist States in administering programs under State plans 
        approved under this part and programs funded under part A, and 
        for the other purposes specified in this section, the Secretary 
        shall establish and maintain in the Federal Parent Locator 
        Service an automated registry (which shall be known as the 
        `Federal Case Registry of Child Support Orders'), which shall 
        contain abstracts of support orders and other information 
        described in paragraph (2) with respect to each case in each 
        State case registry maintained pursuant to section 454A(e), as 
        furnished (and regularly updated), pursuant to section 454A(f), 
        by State agencies administering programs under this part.
            ``(2) Case information.--The information referred to in 
        paragraph (1) with respect to a case shall be such information 
        as the Secretary may specify in regulations (including the 
        names, social security numbers or other uniform identification 
        numbers, and State case identification numbers) to identify the 
        individuals who owe or are owed support (or with respect to or 
        on behalf of whom support obligations are sought to be 
        established), and the State or States which have the case.
    ``(i) National Directory of New Hires.--
            ``(1) In general.--In order to assist States in 
        administering programs under State plans approved under this 
        part and programs funded under part A, and for the other 
        purposes specified in this section, the Secretary shall, not 
        later than October 1, 1999, establish and maintain in the 
        Federal Parent Locator Service an automated directory to be 
        known as the National Directory of New Hires, which shall 
        contain the information supplied pursuant to section 
        453A(f)(2).
            ``(2) Administration of federal tax laws.--The Secretary of 
        the Treasury shall have access to the information in the 
        Federal Directory of New Hires for purposes of administering 
        section 32 of the Internal Revenue Code of 1986, or the advance 
        payment of the earned income tax credit under section 3507 of 
        such Code, and verifying a claim with respect to employment in 
        a tax return.
    ``(j) Information Comparisons and Other Disclosures.--
            ``(1) Verification by social security administration.--
                    ``(A) The Secretary shall transmit information on 
                individuals and employers maintained under this section 
                to the Social Security Administration to the extent 
                necessary for verification in accordance with 
                subparagraph (B).
                    ``(B) The Social Security Administration shall 
                verify the accuracy of, correct, or supply to the 
                extent possible, and report to the Secretary, the 
                following information supplied by the Secretary 
                pursuant to subparagraph (A):
                            ``(i) The name, social security number, and 
                        birth date of each such individual.
                            ``(ii) The employer identification number 
                        of each such employer.
            ``(2) Information comparisons.--For the purpose of locating 
        individuals in a paternity establishment case or a case 
        involving the establishment, modification, or enforcement of a 
        support order, the Secretary shall--
                    ``(A) compare information in the National Directory 
                of New Hires against information in the Federal Case 
                Registry of Child Support Orders not less often than 
                every 2 business days; and
                    ``(B) within 2 such days after such a comparison 
                reveals a match with respect to an individual, report 
                the information to the State agency responsible for the 
                case.
            ``(3) Information comparisons and disclosures of 
        information in all registries for title iv program purposes.--
        To the extent and with the frequency that the Secretary 
        determines to be effective in assisting States to carry out 
        their responsibilities under programs operated under this part 
        and programs funded under part A, the Secretary shall--
                    ``(A) compare the information in each component of 
                the Federal Parent Locator Service maintained under 
                this section against the information in each other such 
                component (other than the comparison required by 
                paragraph (2)), and report instances in which such a 
                comparison reveals a match with respect to an 
                individual to State agencies operating such programs; 
                and
                    ``(B) disclose information in such registries to 
                such State agencies.
            ``(4) Provision of new hire information to the social 
        security administration.--The National Directory of New Hires 
        shall provide the Commissioner of Social Security with all 
        information in the National Directory, which shall be used to 
        determine the accuracy of payments under the supplemental 
        security income program under title XVI and in connection with 
        benefits under title II.
            ``(5) Research.--The Secretary may provide access to 
        information reported by employers pursuant to section 453A(b) 
        for research purposes found by the Secretary to be likely to 
        contribute to achieving the purposes of part A or this part, 
        but without personal identifiers.
    ``(k) Fees.--
            ``(1) For ssa verification.--The Secretary shall reimburse 
        the Commissioner of Social Security, at a rate negotiated 
        between the Secretary and the Commissioner, for the costs 
        incurred by the Commissioner in performing the verification 
        services described in subsection (j).
            ``(2) For information from state directories of new 
        hires.--The Secretary shall reimburse costs incurred by State 
        directories of new hires in furnishing information as required 
        by subsection (j)(3), at rates which the Secretary determines 
        to be reasonable (which rates shall not include payment for the 
        costs of obtaining, compiling, or maintaining such 
        information).
            ``(3) For information furnished to state and federal 
        agencies.--A State or Federal agency that receives information 
        from the Secretary pursuant to this section shall reimburse the 
        Secretary for costs incurred by the Secretary in furnishing the 
        information, at rates which the Secretary determines to be 
        reasonable (which rates shall include payment for the costs of 
        obtaining, verifying, maintaining, and comparing the 
        information).
    ``(l) Restriction on Disclosure and Use.--Information in the 
Federal Parent Locator Service, and information resulting from 
comparisons using such information, shall not be used or disclosed 
except as expressly provided in this section, subject to section 6103 
of the Internal Revenue Code of 1986.
    ``(m) Information Integrity and Security.--The Secretary shall 
establish and implement safeguards with respect to the entities 
established under this section designed to--
            ``(1) ensure the accuracy and completeness of information 
        in the Federal Parent Locator Service; and
            ``(2) restrict access to confidential information in the 
        Federal Parent Locator Service to authorized persons, and 
        restrict use of such information to authorized purposes.''.
    (f) Quarterly Wage Reporting.--Section 1137(a)(3) (42 U.S.C. 1320b-
7(a)(3)) is amended--
            (1) by inserting ``(including any governmental entity)'' 
        after ``employers'',
            (2) by striking ``except that'' and inserting ``except 
        that--'',
            (3) by inserting ``(A)'' before ``the Secretary of Labor'',
            (4) by striking ``paragraph (2)'' and inserting ``paragraph 
        (2), and'',
            (5) by indenting the text so as to align it with new 
        subparagraph (B) (as added by paragraph (6) of this 
        subsection); and
            (6) by adding at the end the following new subparagraph:
                    ``(B) no report shall be filed with respect to an 
                employee of a Federal or State agency performing 
                intelligence or counterintelligence functions, if the 
                head of such agency has determined that filing a report 
                with respect to the employee could endanger the safety 
                of the employee or compromise an ongoing investigation 
                or intelligence mission;''.
    (g) Conforming Amendments.--
            (1) To part d of title iv of the social security act.--
        Section 454(8)(B) (42 U.S.C. 654(8)(B)) is amended to read as 
        follows:
                    ``(B) the Federal Parent Locator Service 
                established under section 453;''.
            (2) To federal unemployment tax act.--Section 3304(a)(16) 
        of the Internal Revenue Code of 1986 is amended--
                    (A) by striking ``Secretary of Health, Education, 
                and Welfare'' each place such term appears and 
                inserting ``Secretary of Health and Human Services'';
                    (B) in subparagraph (B), by striking ``such 
                information'' and all that follows and inserting 
                ``information furnished under subparagraph (A) or (B) 
                is used only for the purposes authorized under such 
                subparagraph;'';
                    (C) by striking ``and'' at the end of subparagraph 
                (A);
                    (D) by redesignating subparagraph (B) as 
                subparagraph (C); and
                    (E) by inserting after subparagraph (A) the 
                following new subparagraph:
                    ``(B) wage and unemployment compensation 
                information contained in the records of such agency 
                shall be furnished to the Secretary of Health and Human 
                Services (in accordance with regulations promulgated by 
                such Secretary) as necessary for the purposes of the 
                National Directory of New Hires established under 
                section 453(i) of the Social Security Act, and''.
            (3) To state grant program under title iii of the social 
        security act.--Section 303(a) (42 U.S.C. 503(a)) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (8);
                    (B) by striking ``and'' at the end of paragraph 
                (9);
                    (C) by striking the period at the end of paragraph 
                (10) and inserting ``; and''; and
                    (D) by adding after paragraph (10) the following:
            ``(11) The making of quarterly electronic reports, at such 
        dates, in such format, and containing such information, as 
        required by the Secretary of Health and Human Services under 
        section 453(i)(3), and compliance with such provisions as such 
        Secretary may find necessary to ensure the correctness and 
        verification of such reports.''.

SEC. 427. USE OF SOCIAL SECURITY NUMBERS.

    (a) State Law Requirement.--Section 466(a) (42 U.S.C. 666(a)), as 
amended by section 401(a), is amended by adding at the end the 
following new paragraph:
            ``(13) Procedures requiring the recording of social 
        security numbers--
                    ``(A) of both parties on marriage licenses and 
                divorce decrees;
                    ``(B) of both parents, on birth records and child 
                support and paternity orders and acknowledgements;
                    ``(C) on all applications for motor vehicle 
                licenses and professional licenses; and
                    ``(D) of decedents on death certificates.''.
    (b) Conforming Amendments.--Section 205(c)(2)(C) (42 U.S.C. 
405(c)(2)(C)) is amended--
            (1) in clause (i), by striking ``may require'' and 
        inserting ``shall require'';
            (2) in clause (ii)--
                    (A) by inserting after the first sentence the 
                following: ``In the administration of any law involving 
                the issuance of a marriage certificate or license, each 
                State shall require each party named in the certificate 
                or license to furnish to the State (or political 
                subdivision thereof) or any State agency having 
                administrative responsibility for the law involved, the 
                social security number of the party.''; and
                    (B) by striking ``Such numbers shall not be 
                recorded on the birth certificate.'' and inserting 
                ``This clause shall not be considered to authorize 
                disclosure of such numbers except as provided in the 
                preceding sentence.'';
            (3) in clause (vi), by striking ``may'' and inserting 
        ``shall''; and
            (4) by adding at the end the following:
                            ``(x) An agency of a State (or a political 
                        subdivision thereof) charged with the 
                        administration of any law concerning the 
                        issuance or renewal of a license, certificate, 
                        permit, or other authorization to engage in a 
                        profession, an occupation, or a commercial 
                        activity shall require all applicants for 
                        issuance or renewal of the license, 
                        certificate, permit, or other authorization to 
                        provide the applicant's social security number 
                        to the agency for the purpose of administering 
                        such laws, and for the purpose of responding to 
                        requests for information from an agency 
                        operating pursuant to part D of title IV.
                            ``(xi) All divorce decrees, support orders, 
                        and paternity determinations issued, and all 
                        paternity acknowledgments made, in each State 
                        shall include the social security number of 
                        each party to the decree, order, determination, 
                        or acknowledgement in the records relating to 
                        the matter.''.

           PART IV--STREAMLINING AND UNIFORMITY OF PROCEDURES

SEC. 431. ADOPTION OF UNIFORM STATE LAWS.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 401(a) 
and 427(a), is amended by adding at the end the following new 
paragraph:
            ``(14)(A) Procedures under which the State adopts in its 
        entirety (with the modifications and additions specified in 
        this paragraph) not later than January 1, 1997, and uses on and 
        after such date, the Uniform Interstate Family Support Act, as 
        approved by the National Conference of Commissioners on Uniform 
        State Laws in August 1992.
            ``(B) The State law adopted pursuant to subparagraph (A) 
        shall be applied to any case--
                    ``(i) involving an order established or modified in 
                one State and for which a subsequent modification is 
                sought in another State; or
                    ``(ii) in which interstate activity is required to 
                enforce an order.
            ``(C) The State law adopted pursuant to subparagraph (A) of 
        this paragraph shall contain the following provision in lieu of 
        section 611(a)(1) of the Uniform Interstate Family Support Act 
        described in such subparagraph (A):
            ```(1) the following requirements are met:
                    ```(i) the child, the individual obligee, and the 
                obligor--
                            ```(I) do not reside in the issuing State; 
                        and
                            ```(II) either reside in this State or are 
                        subject to the jurisdiction of this State 
                        pursuant to section 201; and
                    ```(ii) in any case where another State is 
                exercising or seeks to exercise jurisdiction to modify 
                the order, the conditions of section 204 are met to the 
                same extent as required for proceedings to establish 
                orders; or'.
            ``(D) The State law adopted pursuant to subparagraph (A) 
        shall recognize as valid, for purposes of any proceeding 
        subject to such State law, service of process upon persons in 
        the State (and proof of such service) by any means acceptable 
        in another State which is the initiating or responding State in 
        such proceeding.''.

SEC. 432. IMPROVEMENTS TO FULL FAITH AND CREDIT FOR CHILD SUPPORT 
              ORDERS.

    Section 1738B of title 28, United States Code, is amended--
            (1) in subsection (a)(2), by striking ``subsection (e)'' 
        and inserting ``subsections (e), (f), and (i)'';
            (2) in subsection (b), by inserting after the first 
        undesignated paragraph the following:
            ```child's home State' means the State in which a child 
        lived with a parent or a person acting as parent for at least 6 
        consecutive months immediately preceding the time of filing of 
        a petition or comparable pleading for support and, if a child 
        is less than 6 months old, the State in which the child lived 
        from birth with any of them. A period of temporary absence of 
        any of them is counted as part of the 6-month period.'';
            (3) in subsection (c), by inserting ``by a court of a 
        State'' before ``is made'';
            (4) in subsection (c)(1), by inserting ``and subsections 
        (e), (f), and (g)'' after ``located'';
            (5) in subsection (d)--
                    (A) by inserting ``individual'' before 
                ``contestant''; and
                    (B) by striking ``subsection (e)'' and inserting 
                ``subsections (e) and (f)'';
            (6) in subsection (e), by striking ``make a modification of 
        a child support order with respect to a child that is made'' 
        and inserting ``modify a child support order issued'';
            (7) in subsection (e)(1), by inserting ``pursuant to 
        subsection (i)'' before the semicolon;
            (8) in subsection (e)(2)--
                    (A) by inserting ``individual'' before 
                ``contestant'' each place such term appears; and
                    (B) by striking ``to that court's making the 
                modification and assuming'' and inserting ``with the 
                State of continuing, exclusive jurisdiction for a court 
                of another State to modify the order and assume'';
            (9) by redesignating subsections (f) and (g) as subsections 
        (g) and (h), respectively;
            (10) by inserting after subsection (e) the following new 
        subsection:
    ``(f) Recognition of Child Support Orders.--If 1 or more child 
support orders have been issued in this or another State with regard to 
an obligor and a child, a court shall apply the following rules in 
determining which order to recognize for purposes of continuing, 
exclusive jurisdiction and enforcement:
            ``(1) If only 1 court has issued a child support order, the 
        order of that court must be recognized.
            ``(2) If 2 or more courts have issued child support orders 
        for the same obligor and child, and only 1 of the courts would 
        have continuing, exclusive jurisdiction under this section, the 
        order of that court must be recognized.
            ``(3) If 2 or more courts have issued child support orders 
        for the same obligor and child, and only 1 of the courts would 
        have continuing, exclusive jurisdiction under this section, an 
        order issued by a court in the current home State of the child 
        must be recognized, but if an order has not been issued in the 
        current home State of the child, the order most recently issued 
        must be recognized.
            ``(4) If 2 or more courts have issued child support orders 
        for the same obligor and child, and none of the courts would 
        have continuing, exclusive jurisdiction under this section, a 
        court may issue a child support order, which must be 
        recognized.
            ``(5) The court that has issued an order recognized under 
        this subsection is the court having continuing, exclusive 
        jurisdiction.'';
            (11) in subsection (g) (as so redesignated)--
                    (A) by striking ``Prior'' and inserting 
                ``Modified''; and
                    (B) by striking ``subsection (e)'' and inserting 
                ``subsections (e) and (f)'';
            (12) in subsection (h) (as so redesignated)--
                    (A) in paragraph (2), by inserting ``including the 
                duration of current payments and other obligations of 
                support'' before the comma; and
                    (B) in paragraph (3), by inserting ``arrears 
                under'' after ``enforce''; and
            (13) by adding at the end the following new subsection:
    ``(i) Registration for Modification.--If there is no individual 
contestant or child residing in the issuing State, the party or support 
enforcement agency seeking to modify, or to modify and enforce, a child 
support order issued in another State shall register that order in a 
State with jurisdiction over the nonmovant for the purpose of 
modification.''.

SEC. 433. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

    (a) State Law Requirements.--Section 466 (42 U.S.C. 666), as 
amended by section 424(b), is amended--
            (1) in subsection (a)(2), in the first sentence, to read as 
        follows: ``Expedited administrative and judicial procedures 
        (including the procedures specified in subsection (c)) for 
        establishing paternity and for establishing, modifying, and 
        enforcing support obligations.''; and
            (2) by adding after subsection (b) the following new 
        subsection:
    ``(c) The procedures specified in this subsection are the 
following:
            ``(1) Procedures which give the State agency the authority 
        (and recognize and enforce the authority of State agencies of 
        other States), without the necessity of obtaining an order from 
        any other judicial or administrative tribunal (but subject to 
        due process safeguards, including (as appropriate) requirements 
        for notice, opportunity to contest the action, and opportunity 
        for an appeal on the record to an independent administrative or 
        judicial tribunal), to take the following actions relating to 
        establishment or enforcement of orders:
                    ``(A) To order genetic testing for the purpose of 
                paternity establishment as provided in section 
                466(a)(5).
                    ``(B) To enter a default order, upon a showing of 
                service of process and any additional showing required 
                by State law--
                            ``(i) establishing paternity, in the case 
                        of any putative father who refuses to submit to 
                        genetic testing; and
                            ``(ii) establishing or modifying a support 
                        obligation, in the case of a parent (or other 
                        obligor or obligee) who fails to respond to 
                        notice to appear at a proceeding for such 
                        purpose.
                    ``(C) To subpoena any financial or other 
                information needed to establish, modify, or enforce an 
                order, and to sanction failure to respond to any such 
                subpoena.
                    ``(D) To require all entities in the State 
                (including for-profit, nonprofit, and governmental 
                employers) to provide promptly, in response to a 
                request by the State agency of that or any other State 
                administering a program under this part, information on 
                the employment, compensation, and benefits of any 
                individual employed by such entity as an employee or 
                contractor, and to sanction failure to respond to any 
                such request.
                    ``(E) To obtain access, subject to safeguards on 
                privacy and information security, to the following 
                records (including automated access, in the case of 
                records maintained in automated data bases):
                            ``(i) Records of other State and local 
                        government agencies, including--
                                    ``(I) vital statistics (including 
                                records of marriage, birth, and 
                                divorce);
                                    ``(II) State and local tax and 
                                revenue records (including information 
                                on residence address, employer, income 
                                and assets);
                                    ``(III) records concerning real and 
                                titled personal property;
                                    ``(IV) records of occupational and 
                                professional licenses, and records 
                                concerning the ownership and control of 
                                corporations, partnerships, and other 
                                business entities;
                                    ``(V) employment security records;
                                    ``(VI) records of agencies 
                                administering public assistance 
                                programs;
                                    ``(VII) records of the motor 
                                vehicle department; and
                                    ``(VIII) corrections records.
                            ``(ii) Certain records held by private 
                        entities, including--
                                    ``(I) customer records of public 
                                utilities and cable television 
                                companies; and
                                    ``(II) information (including 
                                information on assets and liabilities) 
                                on individuals who owe or are owed 
                                support (or against or with respect to 
                                whom a support obligation is sought) 
                                held by financial institutions (subject 
                                to limitations on liability of such 
                                entities arising from affording such 
                                access).
                    ``(F) To order income withholding in accordance 
                with subsection (a)(1) and (b) of section 466.
                    ``(G) In cases where support is subject to an 
                assignment under section 402(a)(9), 471(a)(17), or 
                1912, or to a requirement to pay through the 
                centralized collections unit under section 454B) upon 
                providing notice to obligor and obligee, to direct the 
                obligor or other payor to change the payee to the 
                appropriate government entity.
                    ``(H) For the purpose of securing overdue support--
                            ``(i) to intercept and seize any periodic 
                        or lump-sum payment to the obligor by or 
                        through a State or local government agency, 
                        including--
                                    ``(I) unemployment compensation, 
                                workers' compensation, and other 
                                benefits;
                                    ``(II) judgments and settlements in 
                                cases under the jurisdiction of the 
                                State or local government; and
                                    ``(III) lottery winnings;
                            ``(ii) to attach and seize assets of the 
                        obligor held by financial institutions;
                            ``(iii) to attach public and private 
                        retirement funds in appropriate cases, as 
                        determined by the Secretary; and
                            ``(iv) to impose liens in accordance with 
                        paragraph (a)(4) and, in appropriate cases, to 
                        force sale of property and distribution of 
                        proceeds.
                    ``(I) For the purpose of securing overdue support, 
                to increase the amount of monthly support payments to 
                include amounts for arrearages (subject to such 
                conditions or restrictions as the State may provide).
                    ``(J) To suspend drivers' licenses of individuals 
                owing past-due support, in accordance with subsection 
                (a)(16).
            ``(2) The expedited procedures required under subsection 
        (a)(2) shall include the following rules and authority, 
        applicable with respect to all proceedings to establish 
        paternity or to establish, modify, or enforce support orders:
                    ``(A) Procedures under which--
                            ``(i) the parties to any paternity or child 
                        support proceedings are required (subject to 
                        privacy safeguards) to file with the tribunal 
                        before entry of an order, and to update as 
                        appropriate, information on location and 
                        identity (including social security number, 
                        residential and mailing addresses, telephone 
                        number, driver's license number, and name, 
                        address, and telephone number of employer); and
                            ``(ii) in any subsequent child support 
                        enforcement action between the same parties, 
                        the tribunal shall be authorized, upon 
                        sufficient showing that diligent effort has 
                        been made to ascertain such party's current 
                        location, to deem due process requirements for 
                        notice and service of process to be met, with 
                        respect to such party, by delivery to the most 
                        recent residential or employer address so filed 
                        pursuant to clause (i).
                    ``(B) Procedures under which--
                            ``(i) the State agency and any 
                        administrative or judicial tribunal with 
                        authority to hear child support and paternity 
                        cases exerts statewide jurisdiction over the 
                        parties, and orders issued in such cases have 
                        statewide effect; and
                            ``(ii) in the case of a State in which 
                        orders in such cases are issued by local 
                        jurisdictions, a case may be transferred 
                        between jurisdictions in the State without need 
                        for any additional filing by the petitioner, or 
                        service of process upon the respondent, to 
                        retain jurisdiction over the parties.''.
    (b) Exceptions From State Law Requirements.--Section 466(d) (42 
U.S.C. 666(d)) is amended--
            (1) by striking ``(d) If'' and inserting ``(d)(1) Subject 
        to paragraph (2), if''; and
            (2) by adding at the end the following new paragraph:
    ``(2) The Secretary shall not grant an exemption from the 
requirements of--
            ``(A) subsection (a)(5) (concerning procedures for 
        paternity establishment);
            ``(B) subsection (a)(10) (concerning modification of 
        orders);
            ``(C) subsection (a)(12) (concerning recording of orders in 
        the central State case registry);
            ``(D) subsection (a)(13) (concerning recording of social 
        security numbers);
            ``(E) subsection (a)(14) (concerning interstate 
        enforcement); or
            ``(F) subsection (c) (concerning expedited procedures), 
        other than paragraph (1)(A) thereof (concerning establishment 
        or modification of support amount).''.
    (c) Automation of State Agency Functions.--Section 454A, as added 
by section 415(a)(2) and as amended by sections 421 and 422(c), is 
amended by adding at the end the following new subsection:
    ``(h) Expedited Administrative Procedures.--The automated system 
required under this section shall be used, to the maximum extent 
feasible, to implement any expedited administrative procedures required 
under section 466(c).''.

SEC. 434. ADMINISTRATIVE ENFORCEMENT IN INTERSTATE CASES.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 401(a), 
427, and 431, is amended by adding at the end the following:
            ``(15) Procedures under which--
                    ``(A)(i) the State shall respond within 5 business 
                days to a request made by another State to enforce a 
                support order; and
                    ``(ii) the term `business day' means a day on which 
                State offices are open for regular business;
                    ``(B) the State may, by electronic or other means, 
                transmit to another State a request for assistance in a 
                case involving the enforcement of a support order, 
                which request--
                            ``(i) shall include such information as 
                        will enable the State to which the request is 
                        transmitted to compare the information about 
                        the case to the information in the data bases 
                        of the State; and
                            ``(ii) shall constitute a certification by 
                        the requesting State--
                                    ``(I) of the amount of support 
                                under the order the payment of which is 
                                in arrears; and
                                    ``(II) that the requesting State 
                                has complied with all procedural due 
                                process requirements applicable to the 
                                case;
                    ``(C) if the State provides assistance to another 
                State pursuant to this paragraph with respect to a 
                case, neither State shall consider the case to be 
                transferred to the caseload of such other State; and
                    ``(D) the State shall maintain records of--
                            ``(i) the number of such requests for 
                        assistance received by the State;
                            ``(ii) the number of cases for which the 
                        State collected support in response to such a 
                        request; and
                            ``(iii) the amount of such collected 
                        support.''.

SEC. 435. USE OF FORMS IN INTERSTATE ENFORCEMENT.

    (a) Promulgation.--Section 452(a) (42 U.S.C. 652(a)) is amended--
            (1) by striking ``and'' at the end of paragraph (9);
            (2) by striking the period at the end of paragraph (10) and 
        inserting ``; and''; and
            (3) by adding at the end the following:
            ``(11) not later than June 30, 1996, promulgate forms to be 
        used by States in interstate cases for--
                    ``(A) collection of child support through income 
                withholding;
                    ``(B) imposition of liens; and
                    ``(C) administrative subpoenas.''.
    (b) Use by States.--Section 454(9) (42 U.S.C. 654(9)) is amended--
            (1) by striking ``and'' at the end of subparagraph (C);
            (2) by inserting ``and'' at the end of subparagraph (D); 
        and
            (3) by adding at the end the following:
                    ``(E) no later than October 1, 1996, in using the 
                forms promulgated pursuant to section 452(a)(11) for 
                income withholding, imposition of liens, and issuance 
                of administrative subpoenas in interstate child support 
                cases;''.

                    PART V--PATERNITY ESTABLISHMENT

SEC. 441. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT.

    (a) State Laws Required.--Section 466(a)(5) (42 U.S.C. 666(a)(5)) 
is amended--
            (1) in subparagraph (B)--
                    (A) by striking ``(B)'' and inserting ``(B)(i)'';
                    (B) in clause (i), as redesignated, by inserting 
                before the period ``, where such request is supported 
                by a sworn statement--
            ``(I) by such party alleging paternity setting forth facts 
        establishing a reasonable possibility of the requisite sexual 
        contact of the parties; or
            ``(II) by such party denying paternity setting forth facts 
        establishing a reasonable possibility of the nonexistence of 
        sexual contact of the parties;''; and
                    (C) by inserting after clause (i) (as redesignated) 
                the following new clause:
            ``(ii) Procedures which require the State agency, in any 
        case in which such agency orders genetic testing--
                    ``(I) to pay the costs of such tests, subject to 
                recoupment (where the State so elects) from the 
                putative father if paternity is established; and
                    ``(II) to obtain additional testing in any case 
                where an original test result is disputed, upon request 
                and advance payment by the disputing party.'';
            (2) by striking subparagraphs (C), (D), (E), and (F) and 
        inserting the following:
            ``(C)(i) Procedures for a simple civil process for 
        voluntarily acknowledging paternity under which the State must 
        provide that, before a mother and a putative father can sign an 
        acknowledgment of paternity, the putative father and the mother 
        must be given notice, orally, in writing, and in a language 
        that each can understand, of the alternatives to, the legal 
        consequences of, and the rights (including, if 1 parent is a 
        minor, any rights afforded due to minority status) and 
        responsibilities that arise from, signing the acknowledgment.
            ``(ii) Such procedures must include a hospital-based 
        program for the voluntary acknowledgment of paternity focusing 
        on the period immediately before or after the birth of a child.
            ``(iii) Such procedures must require the State agency 
        responsible for maintaining birth records to offer voluntary 
        paternity establishment services.
            ``(iv) The Secretary shall prescribe regulations governing 
        voluntary paternity establishment services offered by hospitals 
        and birth record agencies. The Secretary shall prescribe 
        regulations specifying the types of other entities that may 
        offer voluntary paternity establishment services, and governing 
        the provision of such services, which shall include a 
        requirement that such an entity must use the same notice 
        provisions used by, the same materials used by, provide the 
        personnel providing such services with the same training 
        provided by, and evaluate the provision of such services in the 
        same manner as, voluntary paternity establishment programs of 
        hospitals and birth record agencies.
            ``(D)(i) Procedures under which a signed acknowledgment of 
        paternity is considered a legal finding of paternity, subject 
        to the right of any signatory to rescind the acknowledgment 
        within 60 days.
            ``(ii)(I) Procedures under which, after the 60-day period 
        referred to in clause (i), a signed acknowledgment of paternity 
        may be challenged in court only on the basis of fraud, duress, 
        or material mistake of fact, with the burden of proof upon the 
        challenger, and under which the legal responsibilities 
        (including child support obligations) of any signatory arising 
        from the acknowledgment may not be suspended during the 
        challenge, except for good cause shown.
            ``(II) Procedures under which, after the 60-day period 
        referred to in clause (i), a minor who signs an acknowledgment 
        of paternity other than in the presence of a parent or court-
        appointed guardian ad litem may rescind the acknowledgment in a 
        judicial or administrative proceeding, until the earlier of--
                    ``(aa) attaining the age of majority; or
                    ``(bb) the date of the first judicial or 
                administrative proceeding brought (after the signing) 
                to establish a child support obligation, visitation 
                rights, or custody rights with respect to the child 
                whose paternity is the subject of the acknowledgment, 
                and at which the minor is represented by a parent, 
                guardian ad litem, or attorney.
            ``(E) Procedures under which no judicial or administrative 
        proceedings are required or permitted to ratify an unchallenged 
        acknowledgment of paternity.
            ``(F) Procedures requiring--
                    ``(i) that the State admit into evidence, for 
                purposes of establishing paternity, results of any 
                genetic test that is--
                            ``(I) of a type generally acknowledged, by 
                        accreditation bodies designated by the 
                        Secretary, as reliable evidence of paternity; 
                        and
                            ``(II) performed by a laboratory approved 
                        by such an accreditation body;
                    ``(ii) that any objection to genetic testing 
                results must be made in writing not later than a 
                specified number of days before any hearing at which 
                such results may be introduced into evidence (or, at 
                State option, not later than a specified number of days 
                after receipt of such results); and
                    ``(iii) that, if no objection is made, the test 
                results are admissible as evidence of paternity without 
                the need for foundation testimony or other proof of 
                authenticity or accuracy.''; and
            (3) by adding after subparagraph (H) the following new 
        subparagraphs:
            ``(I) Procedures providing that the parties to an action to 
        establish paternity are not entitled to a jury trial.
            ``(J) Procedures which require that a temporary order be 
        issued, upon motion by a party, requiring the provision of 
        child support pending an administrative or judicial 
        determination of parentage, where there is clear and convincing 
        evidence of paternity (on the basis of genetic tests or other 
        evidence).
            ``(K) Procedures under which bills for pregnancy, 
        childbirth, and genetic testing are admissible as evidence 
        without requiring third-party foundation testimony, and shall 
        constitute prima facie evidence of amounts incurred for such 
        services and testing on behalf of the child.
            ``(L) At the option of the State, procedures under which 
        the tribunal establishing paternity and support has discretion 
        to waive rights to all or part of amounts owed to the State 
        (but not to the mother) for costs related to pregnancy, 
        childbirth, and genetic testing and for public assistance paid 
        to the family where the father cooperates or acknowledges 
        paternity before or after genetic testing.
            ``(M) Procedures ensuring that the putative father has a 
        reasonable opportunity to initiate a paternity action.
            ``(N) Procedures under which voluntary acknowledgements and 
        adjudications of paternity by judicial or administrative 
        processes are filed with the State registry of birth records 
        for comparison with information in the central case 
        registry.''.
    (b) State Plans.--Section 454(a)(7) (42 U.S.C. 654(a)(7)) is 
amended to read as follows:
            ``(7) provide for entering into cooperative arrangements 
        with--
                    ``(A) appropriate courts and law enforcement 
                officials to--
                            ``(i) assist the agency administering the 
                        plan, and
                            ``(ii) to assist such courts and officials 
                        and such agency with respect to matters of 
                        common concern; and
                    ``(B) the State registry of birth records to record 
                voluntary acknowledgments and adjudications of 
                paternity and to make such records available for data 
                matches and other purposes required by the agency 
                administering the plan;''.
    (c) National Paternity Acknowledgment Affidavit.--Section 452(a)(7) 
(42 U.S.C. 652(a)(7)) is amended by inserting ``, and develop an 
affidavit to be used for the voluntary acknowledgment of paternity 
which shall include the social security number of each parent'' before 
the semicolon.
    (d) Technical Amendment.--Section 468 (42 U.S.C. 668) is amended by 
striking ``a simple civil process for voluntarily acknowledging 
paternity and''.

SEC. 442. OUTREACH FOR VOLUNTARY PATERNITY ESTABLISHMENT.

    (a) State Plan Requirement.--Section 454(23) (42 U.S.C. 654(23)) is 
amended--
            (1) by striking ``(23)'' and inserting ``(23)(A)'';
            (2) by inserting ``and'' after the semicolon; and
            (3) by adding at the end the following new subparagraph:
            ``(B) publicize the availability and encourage the use of 
        procedures for voluntary establishment of paternity and child 
        support through a variety of means, which--
                    ``(i) include distribution of written materials at 
                health care facilities (including hospitals and 
                clinics), and other locations such as schools;
                    ``(ii) may include pre-natal programs to educate 
                expectant couples on individual and joint rights and 
                responsibilities with respect to paternity (and may 
                require all expectant recipients of assistance under 
                part A to participate in such pre-natal programs, as an 
                element of cooperation with efforts to establish 
                paternity and child support);
                    ``(iii) include, with respect to each child 
                discharged from a hospital after birth for whom 
                paternity or child support has not been established, 
                reasonable followup efforts, providing--
                            ``(I) in the case of a child for whom 
                        paternity has not been established, information 
                        on the benefits of and procedures for 
                        establishing paternity; and
                            ``(II) in the case of a child for whom 
                        paternity has been established but child 
                        support has not been established, information 
                        on the benefits of and procedures for 
                        establishing a child support order, and an 
                        application for child support services;''.
    (b) Enhanced Federal Matching.--Section 455(a)(1)(C) (42 U.S.C. 
655(a)(1)(C)) is amended--
            (1) by inserting ``(i)'' before ``laboratory costs'', and
            (2) by inserting before the semicolon ``, and (ii) costs of 
        outreach programs designed to encourage voluntary 
        acknowledgment of paternity''.
    (c) Effective Dates.--
            (1) In general.--The amendments made by subsection (a) 
        shall become effective October 1, 1997.
            (2) Exception.--The amendments made by subsection (b) shall 
        be effective with respect to calendar quarters beginning on and 
        after October 1, 1996.
       PART VI--ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS

SEC. 451. NATIONAL CHILD SUPPORT GUIDELINES COMMISSION.

    (a) Establishment.--There is hereby established a commission to be 
known as the ``National Child Support Guidelines Commission'' (in this 
section referred to as the ``Commission'').
    (b) General Duties.--
            (1) In general.--The Commission shall determine--
                    (A) whether it is appropriate to develop a national 
                child support guideline for consideration by the 
                Congress or for adoption by individual States; or
                    (B) based on a study of various guideline models, 
                the benefits and deficiencies of such models, and any 
                needed improvements.
            (2) Development of models.--If the Commission determines 
        under paragraph (1)(A) that a national child support guideline 
        is needed or under paragraph (1)(B) that improvements to 
        guideline models are needed, the Commission shall develop such 
        national guideline or improvements.
    (c) Matters for Consideration by the Commission.--In making the 
recommendations concerning guidelines required under subsection (b), 
the Commission shall consider--
            (1) the adequacy of State child support guidelines 
        established pursuant to section 467 of the Social Security Act;
            (2) matters generally applicable to all support orders, 
        including--
                    (A) the feasibility of adopting uniform terms in 
                all child support orders;
                    (B) how to define income and under what 
                circumstances income should be imputed; and
                    (C) tax treatment of child support payments;
            (3) the appropriate treatment of cases in which either or 
        both parents have financial obligations to more than 1 family, 
        including the effect (if any) to be given to--
                    (A) the income of either parent's spouse; and
                    (B) the financial responsibilities of either parent 
                for other children or stepchildren;
            (4) the appropriate treatment of expenses for child care 
        (including care of the children of either parent, and work-
        related or job-training-related child care);
            (5) the appropriate treatment of expenses for health care 
        (including uninsured health care) and other extraordinary 
        expenses for children with special needs;
            (6) the appropriate duration of support by 1 or both 
        parents, including
                    (A) support (including shared support) for post-
                secondary or vocational education; and
                    (B) support for disabled adult children;
            (7) procedures to automatically adjust child support orders 
        periodically to address changed economic circumstances, 
        including changes in the consumer price index or either 
        parent's income and expenses in particular cases;
            (8) procedures to help non-custodial parents address 
        grievances regarding visitation and custody orders to prevent 
        such parents from withholding child support payments until such 
        grievances are resolved; and
            (9) whether, or to what extent, support levels should be 
        adjusted in cases in which custody is shared or in which the 
        noncustodial parent has extended visitation rights.
    (d) Membership.--
            (1) Number; appointment.--
                    (A) In general.--The Commission shall be composed 
                of 12 individuals appointed jointly by the Secretary of 
                Health and Human Services and the Congress, not later 
                than January 15, 1997, of which--
                            (i) 2 shall be appointed by the Chairman of 
                        the Committee on Finance of the Senate, and 1 
                        shall be appointed by the ranking minority 
                        member of the Committee;
                            (ii) 2 shall be appointed by the Chairman 
                        of the Committee on Ways and Means of the House 
                        of Representatives, and 1 shall be appointed by 
                        the ranking minority member of the Committee; 
                        and
                            (iii) 6 shall be appointed by the Secretary 
                        of Health and Human Services.
                    (B) Qualifications of members.--Members of the 
                Commission shall have expertise and experience in the 
                evaluation and development of child support guidelines. 
                At least 1 member shall represent advocacy groups for 
                custodial parents, at least 1 member shall represent 
                advocacy groups for noncustodial parents, and at least 
                1 member shall be the director of a State program under 
                part D of title IV of the Social Security Act.
            (2) Terms of office.--Each member shall be appointed for a 
        term of 2 years. A vacancy in the Commission shall be filled in 
        the manner in which the original appointment was made.
    (e) Commission Powers, Compensation, Access to Information, and 
Supervision.--The first sentence of subparagraph (C), the first and 
third sentences of subparagraph (D), subparagraph (F) (except with 
respect to the conduct of medical studies), clauses (ii) and (iii) of 
subparagraph (G), and subparagraph (H) of section 1886(e)(6) of the 
Social Security Act shall apply to the Commission in the same manner in 
which such provisions apply to the Prospective Payment Assessment 
Commission.
    (f) Report.--Not later than 2 years after the appointment of 
members, the Commission shall submit to the President, the Committee on 
Ways and Means of the House of Representatives, and the Committee on 
Finance of the Senate, a recommended national child support guideline 
and a final assessment of issues relating to such a proposed national 
child support guideline.
    (g) Termination.--The Commission shall terminate 6 months after the 
submission of the report described in subsection (e).

SEC. 452. SIMPLIFIED PROCESS FOR REVIEW AND ADJUSTMENT OF CHILD SUPPORT 
              ORDERS.

    Section 466(a)(10) (42 U.S.C. 666(a)(10)) is amended to read as 
follows:
            ``(10)(A)(i) Procedures under which--
                    ``(I) every 3 years, at the request of either 
                parent subject to a child support order, the State 
                shall review and, as appropriate, adjust the order in 
                accordance with the guidelines established under 
                section 467(a) if the amount of the child support award 
                under the order differs from the amount that would be 
                awarded in accordance with such guidelines, without a 
                requirement for any other change in circumstances; and
                    ``(II) upon request at any time of either parent 
                subject to a child support order, the State shall 
                review and, as appropriate, adjust the order in 
                accordance with the guidelines established under 
                section 467(a) based on a substantial change in the 
                circumstances of either such parent.
            ``(ii) Such procedures shall require both parents subject 
        to a child support order to be notified of their rights and 
        responsibilities provided for under clause (i) at the time the 
        order is issued and in the annual information exchange form 
        provided under subparagraph (B).
            ``(B) Procedures under which each child support order 
        issued or modified in the State after the effective date of 
        this subparagraph shall require the parents subject to the 
        order to provide each other with a complete statement of their 
        respective financial condition annually on a form which shall 
        be provided by the State. The Secretary shall establish 
        regulations for the enforcement of such exchange of 
        information.''.
                PART VII--ENFORCEMENT OF SUPPORT ORDERS

SEC. 461. FEDERAL INCOME TAX REFUND OFFSET.

    (a) Changed Order of Refund Distribution Under Internal Revenue 
Code.--Section 6402(c) of the Internal Revenue Code of 1986 (relating 
to offset of past-due support against overpayments) is amended by 
striking the third sentence.
    (b) Elimination of Disparities in Treatment of Assigned and 
Nonassigned Arrearages.--
            (1) In general.--Section 464(a) (42 U.S.C. 664(a)) is 
        amended--
                    (A) in paragraph (1)--
                            (i) in the first sentence, by striking 
                        ``which has been assigned to such State 
                        pursuant to section 402(a)(9) or section 
                        471(a)(17)''; and
                            (ii) in the second sentence, by striking 
                        ``in accordance with section 457 (b)(4) or 
                        (d)(3)'' and inserting ``as provided in 
                        paragraph (2)'';
                    (B) in paragraph (2), to read as follows:
            ``(2) The State agency shall distribute amounts paid by the 
        Secretary of the Treasury pursuant to paragraph (1)--
                    ``(A) in accordance with subsection (a)(4) or 
                (d)(3) of section 457, in the case of past-due support 
                assigned to a State pursuant to section 402(a)(9) or 
                section 471(a)(17); and
                    ``(B) to or on behalf of the child to whom the 
                support was owed, in the case of past-due support not 
                so assigned.'';
                    (C) in paragraph (3)--
                            (i) by striking ``or (2)'' each place it 
                        appears; and
                            (ii) in subparagraph (B), by striking 
                        ``under paragraph (2)'' and inserting ``on 
                        account of past-due support described in 
                        paragraph (2)(B)''.
            (2) Notices of past-due support.--Section 464(b) (42 U.S.C. 
        664(b)) is amended--
                    (A) by striking ``(b)(1)'' and inserting ``(b)''; 
                and
                    (B) by striking paragraph (2).
            (3) Definition of past-due support.--Section 464(c) (42 
        U.S.C. 664(c)) is amended--
                    (A) by striking ``(c)(1) Except as provided in 
                paragraph (2), as'' and inserting ``(c) As''; and
                    (B) by striking paragraphs (2) and (3).
    (c) Effective Date.--The amendments made by this section shall 
become effective October 1, 1999.
SEC. 462. INTERNAL REVENUE SERVICE COLLECTION OF ARREARAGES.

    (a) Amendment to Internal Revenue Code.--Section 6305(a) of the 
Internal Revenue Code of 1986 (relating to collection of certain 
liability) is amended--
            (1) in paragraph (1), by inserting ``except as provided in 
        paragraph (5)'' after ``collected'';
            (2) by striking ``and'' at the end of paragraph (3);
            (3) by striking the period at the end of paragraph (4) and 
        inserting ``, and'';
            (4) by adding at the end the following new paragraph:
            ``(5) no additional fee may be assessed for adjustments to 
        an amount previously certified pursuant to such section 452(b) 
        with respect to the same obligor.''; and
            (5) by striking ``Secretary of Health, Education, and 
        Welfare'' each place it appears and inserting ``Secretary of 
        Health and Human Services''.
    (b) Effective Date.--The amendments made by this section shall 
become effective October 1, 1997.

SEC. 463. AUTHORITY TO COLLECT SUPPORT FROM FEDERAL EMPLOYEES.

    (a) Consolidation and Streamlining of Authorities.--Section 459 (42 
U.S.C. 659) is amended--
            (1) in the heading, by inserting ``income withholding,'' 
        before ``garnishment'';
            (2) in subsection (a)--
                    (A) by striking ``section 207'' and inserting 
                ``section 207 and section 5301 of title 38, United 
                States Code''; and
                    (B) by striking ``to legal process'' and all that 
                follows through the period and inserting ``to 
                withholding in accordance with State law pursuant to 
                subsections (a)(1) and (b) of section 466 and 
                regulations of the Secretary thereunder, and to any 
                other legal process brought, by a State agency 
                administering a program under this part or by an 
                individual obligee, to enforce the legal obligation of 
                such individual to provide child support or alimony.'';
            (3) by striking subsection (b) and inserting the following 
        new subsection:
    ``(b) Except as otherwise provided herein, each entity specified in 
subsection (a) shall be subject, with respect to notice to withhold 
income pursuant to subsection (a)(1) or (b) of section 466, or to any 
other order or process to enforce support obligations against an 
individual (if such order or process contains or is accompanied by 
sufficient data to permit prompt identification of the individual and 
the moneys involved), to the same requirements as would apply if such 
entity were a private person.'';
            (4) by striking subsections (c) and (d) and inserting the 
        following new subsections:
    ``(c)(1) The head of each agency subject to the requirements of 
this section shall--
            ``(A) designate an agent or agents to receive orders and 
        accept service of process; and
            ``(B) publish--
                    ``(i) in the appendix of such regulations;
                    ``(ii) in each subsequent republication of such 
                regulations; and
                    ``(iii) annually in the Federal Register,
        the designation of such agent or agents, identified by title of 
        position, mailing address, and telephone number.
    ``(2) Whenever an agent designated pursuant to paragraph (1) 
receives notice pursuant to subsection (a)(1) or (b) of section 466, or 
is effectively served with any order, process, or interrogatories, with 
respect to an individual's child support or alimony payment 
obligations, such agent shall--
            ``(A) as soon as possible (but not later than 15 days) 
        thereafter, send written notice of such notice or service 
        (together with a copy thereof) to such individual at his duty 
        station or last-known home address;
            ``(B) not later than 30 days (or such longer period as may 
        be prescribed by applicable State law) after receipt of a 
        notice pursuant to subsection (a)(1) or (b) of section 466, 
        comply with all applicable provisions of such section 466; and
            ``(C) not later than 30 days (or such longer period as may 
        be prescribed by applicable State law) after effective service 
        of any other such order, process, or interrogatories, respond 
        thereto.
    ``(d) In the event that a governmental entity receives notice or is 
served with process, as provided in this section, concerning amounts 
owed by an individual to more than 1 person--
            ``(1) support collection under section 466(b) must be given 
        priority over any other process, as provided in section 
        466(b)(7);
            ``(2) allocation of moneys due or payable to an individual 
        among claimants under section 466(b) shall be governed by the 
        provisions of such section 466(b) and regulations thereunder; 
        and
            ``(3) such moneys as remain after compliance with 
        subparagraphs (A) and (B) shall be available to satisfy any 
        other such processes on a first-come, first-served basis, with 
        any such process being satisfied out of such moneys as remain 
        after the satisfaction of all such processes which have been 
        previously served.'';
            (5) in subsection (f)--
                    (A) by striking ``(f)'' and inserting ``(f)(1)''; 
                and
                    (B) by adding at the end the following new 
                paragraph:
    ``(2) No Federal employee whose duties include taking actions 
necessary to comply with the requirements of subsection (a) with regard 
to any individual shall be subject under any law to any disciplinary 
action or civil or criminal liability or penalty for, or on account of, 
any disclosure of information made by him in connection with the 
carrying out of such duties.''; and
            (6) by adding at the end the following new subsections:
    ``(g) Authority to promulgate regulations for the implementation of 
the provisions of this section shall, insofar as the provisions of this 
section are applicable to moneys due from (or payable by)--
            ``(1) the executive branch of the Federal Government 
        (including in such branch, for the purposes of this subsection, 
        the territories and possessions of the United States, the 
        United States Postal Service, the Postal Rate Commission, any 
        wholly owned Federal corporation created by an Act of Congress, 
        and the government of the District of Columbia), be vested in 
        the President (or the President's designee);
            ``(2) the legislative branch of the Federal Government, be 
        vested jointly in the President pro tempore of the Senate and 
        the Speaker of the House of Representatives (or their 
        designees); and
            ``(3) the judicial branch of the Federal Government, be 
        vested in the Chief Justice of the United States (or the Chief 
        Justice's designee).
    ``(h) Subject to subsection (i), moneys paid or payable to an 
individual which are considered to be based upon remuneration for 
employment, for purposes of this section--
            ``(1) consist of--
                    ``(A) compensation paid or payable for personal 
                services of such individual, whether such compensation 
                is denominated as wages, salary, commission, bonus, 
                pay, allowances, or otherwise (including severance pay, 
                sick pay, and incentive pay);
                    ``(B) periodic benefits (including a periodic 
                benefit as defined in section 228(h)(3)) or other 
                payments--
                            ``(i) under the insurance system 
                        established by title II;
                            ``(ii) under any other system or fund 
                        established by the United States which provides 
                        for the payment of pensions, retirement or 
                        retired pay, annuities, dependents' or 
                        survivors' benefits, or similar amounts payable 
                        on account of personal services performed by 
                        the individual or any other individual;
                            ``(iii) as compensation for death under any 
                        Federal program;
                            ``(iv) under any Federal program 
                        established to provide `black lung' benefits; 
                        or
                            ``(v) by the Secretary of Veterans Affairs 
                        as pension, or as compensation for a service-
                        connected disability or death (except any 
                        compensation paid by such Secretary to a former 
                        member of the Armed Forces who is in receipt of 
                        retired or retainer pay if such former member 
                        has waived a portion of his retired pay in 
                        order to receive such compensation); and
                    ``(C) worker's compensation benefits paid under 
                Federal or State law; but
            ``(2) do not include any payment--
                    ``(A) by way of reimbursement or otherwise, to 
                defray expenses incurred by such individual in carrying 
                out duties associated with his employment; or
                    ``(B) as allowances for members of the uniformed 
                services payable pursuant to chapter 7 of title 37, 
                United States Code, as prescribed by the Secretaries 
                concerned (defined by section 101(5) of such title) as 
                necessary for the efficient performance of duty.
    ``(i) In determining the amount of any moneys due from, or payable 
by, the United States to any individual, there shall be excluded 
amounts which--
            ``(1) are owed by such individual to the United States;
            ``(2) are required by law to be, and are, deducted from the 
        remuneration or other payment involved, including Federal 
        employment taxes, and fines and forfeitures ordered by court-
        martial;
            ``(3) are properly withheld for Federal, State, or local 
        income tax purposes, if the withholding of such amounts is 
        authorized or required by law and if amounts withheld are not 
        greater than would be the case if such individual claimed all 
        the dependents that the individual was entitled to (the 
        withholding of additional amounts pursuant to section 3402(i) 
        of the Internal Revenue Code of 1986 may be permitted only when 
        such individual presents evidence of a tax obligation which 
        supports the additional withholding);
            ``(4) are deducted as health insurance premiums;
            ``(5) are deducted as normal retirement contributions (not 
        including amounts deducted for supplementary coverage); or
            ``(6) are deducted as normal life insurance premiums from 
        salary or other remuneration for employment (not including 
        amounts deducted for supplementary coverage).
    ``(j) For purposes of this section--''.
    (b) Transfer of Subsections.--Subsections (a) through (d) of 
section 462 (42 U.S.C. 662), are transferred and redesignated as 
paragraphs (1) through (4), respectively, of section 459(j) (as added 
by subsection (a)(6)), and the left margin of each of such paragraphs 
(1) through (4) is indented 2 ems to the right of the left margin of 
subsection (j) (as added by subsection (a)(6)).
    (c) Conforming Amendments.--
            (1) To part d of title iv.--Sections 461 and 462 (42 U.S.C. 
        661) are repealed.
            (2) To title 5, united states code.--Section 5520a of title 
        5, United States Code, is amended, in subsections (h)(2) and 
        (i), by striking ``sections 459, 461, and 462 of the Social 
        Security Act (42 U.S.C. 659, 661, and 662)'' each place it 
        appears and inserting ``section 459 of the Social Security Act 
        (42 U.S.C. 659)''.
    (d) Military Retired and Retainer Pay.--Section 1408 of title 10, 
United States Code, is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (B), by striking 
                        ``and'';
                            (ii) in subparagraph (C), by striking the 
                        period and inserting ``; and''; and
                            (iii) by adding at the end the following 
                        new subparagraph:
                    ``(D) any administrative or judicial tribunal of a 
                State competent to enter orders for support or 
                maintenance (including a State agency administering a 
                State program under part D of title IV of the Social 
                Security Act).'';
                    (B) in paragraph (2), by inserting ``or a court 
                order for the payment of child support not included in 
                or accompanied by such a decree or settlement,'' before 
                ``which--'';
            (2) in subsection (d)--
                    (A) in the heading, by inserting ``(or for benefit 
                of)'' after ``concerned''; and
                    (B) in paragraph (1), in the first sentence, by 
                inserting ``(or for the benefit of such spouse or 
                former spouse to a State central collections unit or 
                other public payee designated by a State, in accordance 
                with part D of title IV of the Social Security Act, as 
                directed by court order, or as otherwise directed in 
                accordance with such part D)'' before ``in an amount 
                sufficient''; and
            (3) by adding at the end the following new subsection:
    ``(j) Relationship to Other Laws.--In any case involving a child 
support order against a member who has never been married to the other 
parent of the child, the provisions of this section shall not apply, 
and the case shall be subject to the provisions of section 459 of the 
Social Security Act.''.
    (e) Effective Date.--The amendments made by this section shall 
become effective 6 months after the date of the enactment of this Act.

SEC. 464. ENFORCEMENT OF CHILD SUPPORT OBLIGATIONS OF MEMBERS OF THE 
              ARMED FORCES.

    (a) Availability of Locator Information.--
            (1) Maintenance of address information.--The Secretary of 
        Defense shall establish a centralized personnel locator service 
        that includes the address of each member of the Armed Forces 
        under the jurisdiction of the Secretary. Upon request of the 
        Secretary of Transportation, addresses for members of the Coast 
        Guard shall be included in the centralized personnel locator 
        service.
            (2) Type of address.--
                    (A) Residential address.--Except as provided in 
                subparagraph (B), the address for a member of the Armed 
                Forces shown in the locator service shall be the 
                residential address of that member.
                    (B) Duty address.--The address for a member of the 
                Armed Forces shown in the locator service shall be the 
                duty address of that member in the case of a member--
                            (i) who is permanently assigned overseas, 
                        to a vessel, or to a routinely deployable unit; 
                        or
                            (ii) with respect to whom the Secretary 
                        concerned makes a determination that the 
                        member's residential address should not be 
                        disclosed due to national security or safety 
                        concerns.
            (3) Updating of locator information.--Not later than 30 
        days after a member listed in the locator service establishes a 
        new residential address (or a new duty address, in the case of 
        a member covered by paragraph (2)(B)), the Secretary concerned 
        shall update the locator service to indicate the new address of 
        the member.
            (4) Availability of information.--The Secretary of Defense 
        shall make information regarding the address of a member of the 
        Armed Forces listed in the locator service available, on 
        request, to the Federal Parent Locator Service.
    (b) Facilitating Granting of Leave for Attendance at Hearings.--
            (1) Regulations.--The Secretary of each military 
        department, and the Secretary of Transportation with respect to 
        the Coast Guard when it is not operating as a service in the 
        Navy, shall prescribe regulations to facilitate the granting of 
        leave to a member of the Armed Forces under the jurisdiction of 
        that Secretary in a case in which--
                    (A) the leave is needed for the member to attend a 
                hearing described in paragraph (2);
                    (B) the member is not serving in or with a unit 
                deployed in a contingency operation (as defined in 
                section 101 of title 10, United States Code); and
                    (C) the exigencies of military service (as 
                determined by the Secretary concerned) do not otherwise 
                require that such leave not be granted.
            (2) Covered hearings.--Paragraph (1) applies to a hearing 
        that is conducted by a court or pursuant to an administrative 
        process established under State law, in connection with a civil 
        action--
                    (A) to determine whether a member of the Armed 
                Forces is a natural parent of a child; or
                    (B) to determine an obligation of a member of the 
                Armed Forces to provide child support.
            (3) Definitions.--For purposes of this subsection:
                    (A) The term ``court'' has the meaning given that 
                term in section 1408(a) of title 10, United States 
                Code.
                    (B) The term ``child support'' has the meaning 
                given such term in section 462 of the Social Security 
                Act (42 U.S.C. 662).
    (c) Payment of Military Retired Pay in Compliance With Child 
Support Orders.--Section 1408 of title 10, United States Code, as 
amended by section 463(d)(3), is amended--
            (1) by redesignating subsections (i) and (j) as subsections 
        (j) and (k), respectively;
            (2) by inserting after subsection (h) the following new 
        subsection:
    ``(i) Certification Date.--It is not necessary that the date of a 
certification of the authenticity or completeness of a copy of a court 
order or an order of an administrative process established under State 
law for child support received by the Secretary concerned for the 
purposes of this section be recent in relation to the date of receipt 
by the Secretary.''; and
            (3) in subsection (d)--
                    (A) in paragraph (1), by inserting after the first 
                sentence the following: ``In the case of a spouse or 
                former spouse who, pursuant to section 402(a)(9) of the 
                Social Security Act (42 U.S.C. 602(26)), assigns to a 
                State the rights of the spouse or former spouse to 
                receive support, the Secretary concerned may make the 
                child support payments referred to in the preceding 
                sentence to that State in amounts consistent with that 
                assignment of rights.''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(6) In the case of a court order or an order of an administrative 
process established under State law for which effective service is made 
on the Secretary concerned on or after the date of the enactment of 
this paragraph and which provides for payments from the disposable 
retired pay of a member to satisfy the amount of child support set 
forth in the order, the authority provided in paragraph (1) to make 
payments from the disposable retired pay of a member to satisfy the 
amount of child support set forth in a court order or an order of an 
administrative process established under State law shall apply to 
payment of any amount of child support arrearages set forth in that 
order as well as to amounts of child support that currently become 
due.''.

SEC. 465. MOTOR VEHICLE LIENS.

    Section 466(a)(4) (42 U.S.C. 666(a)(4)) is amended--
            (1) by striking ``(4)'' and inserting ``(4)(A)''; and
            (2) by adding at the end the following new subparagraphs:
            ``(B) Procedures for placing liens for arrearages of child 
        support on motor vehicle titles of individuals owing such 
        arrearages equal to or exceeding 1 month of support (or other 
        minimum amount set by the State), under which--
                    ``(i) any person owed such arrearages may place 
                such a lien;
                    ``(ii) the State agency administering the program 
                under this part shall systematically place such liens;
                    ``(iii) expedited methods are provided for--
                            ``(I) ascertaining the amount of arrears;
                            ``(II) affording the person owing the 
                        arrears or other titleholder to contest the 
                        amount of arrears or to obtain a release upon 
                        fulfilling the support obligation;
                    ``(iv) such a lien has precedence over all other 
                encumbrances on a vehicle title other than a purchase 
                money security interest; and
                    ``(v) the individual or State agency owed the 
                arrears may execute on, seize, and sell the property in 
                accordance with State law.
            ``(C) Procedures under which--
                    ``(i) liens arise by operation of law against real 
                and personal property for amounts of overdue support 
                owed by an absent parent who resides or owns property 
                in the State; and
                    ``(ii) the State accords full faith and credit to 
                such liens which arise in another State, without 
                registration of the underlying order which is the basis 
                for such lien.''.

SEC. 466. VOIDING OF FRAUDULENT TRANSFERS.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 401(a), 
427(a), 431, and 434, is amended by adding at the end the following new 
paragraph:
            ``(16) Procedures under which--
                    ``(A) the State has in effect--
                            ``(i) the Uniform Fraudulent Conveyance Act 
                        of 1981,
                            ``(ii) the Uniform Fraudulent Transfer Act 
                        of 1984, or
                            ``(iii) another law, specifying indicia of 
                        fraud which create a prima facie case that a 
                        debtor transferred income or property to avoid 
                        payment to a child support creditor, which the 
                        Secretary finds affords comparable rights to 
                        child support creditors; and
                    ``(B) in any case in which the State knows of a 
                transfer by a child support debtor with respect to 
                which such a prima facie case is established, the State 
                must--
                            ``(i) seek to void such transfer; or
                            ``(ii) obtain a settlement in the best 
                        interests of the child support creditor.''.
SEC. 467. STATE LAW AUTHORIZING SUSPENSION OF LICENSES.

    Section 466(a) (42 U.S.C. 666(a)), as amended by sections 401(a), 
427(a), 431, 434, and 466, is amended by adding at the end the 
following new paragraph:
            ``(17) Procedures under which the State has (and uses in 
        appropriate cases) authority (subject to appropriate due 
        process safeguards) to withhold or suspend, or to restrict the 
        use of driver's licenses, professional and occupational 
        licenses, and recreational licenses of individuals owing 
        overdue child support or failing, after receiving appropriate 
        notice, to comply with subpoenas or warrants relating to 
        paternity or child support proceedings.''.

SEC. 468. REPORTING ARREARAGES TO CREDIT BUREAUS.

    Section 466(a)(7) (42 U.S.C. 666(a)(7)) is amended to read as 
follows:
            ``(7)(A) Procedures (subject to safeguards pursuant to 
        subparagraph (B)) requiring the State to report periodically to 
        consumer reporting agencies (as defined in section 603(f) of 
        the Fair Credit Reporting Act (15 U.S.C. 1681a(f)) the name of 
        any absent parent who is delinquent in the payment of support, 
        and the amount of overdue support owed by such parent.
            ``(B) Procedures ensuring that, in carrying out 
        subparagraph (A), information with respect to an absent parent 
        is reported--
                    ``(i) only after such parent has been afforded all 
                due process required under State law, including notice 
                and a reasonable opportunity to contest the accuracy of 
                such information; and
                    ``(ii) only to an entity that has furnished 
                evidence satisfactory to the State that the entity is a 
                consumer reporting agency.''.

SEC. 469. EXTENDED STATUTE OF LIMITATION FOR COLLECTION OF ARREARAGES.

    (a) In General.--Section 466(a)(9) (42 U.S.C. 666(a)(9)) is 
amended--
            (1) by redesignating subparagraphs (A), (B), and (C) as 
        clauses (i), (ii), and (iii), respectively;
            (2) by striking ``(9)'' and inserting ``(9)(A)''; and
            (3) by adding at the end the following new subparagraph:
            ``(B) Procedures under which the statute of limitations on 
        any arrearages of child support extends at least until the 
        child owed such support is 30 years of age.''.
    (b) Application of Requirement.--The amendment made by this section 
shall not be interpreted to require any State law to revive any payment 
obligation which had lapsed prior to the effective date of such State 
law.

SEC. 470. CHARGES FOR ARREARAGES.

    (a) State Law Requirement.--Section 466(a) (42 U.S.C. 666(a)), as 
amended by sections 401(a), 427(a), 431, 434, 466, and 467, is amended 
by adding at the end the following new paragraph:
            ``(18) Procedures providing for the calculation and 
        collection of interest or penalties for arrearages of child 
        support, and for distribution of such interest or penalties 
        collected for the benefit of the child (except where the right 
        to support has been assigned to the State).''.
    (b) Regulations.--The Secretary of Health and Human Services shall 
establish by regulation a rule to resolve choice of law conflicts 
arising in the implementation of the amendment made by subsection (a).
    (c) Conforming Amendment.--Section 454(21) (42 U.S.C. 654(21)) is 
repealed.
    (d) Effective Date.--The amendments made by this section shall be 
effective with respect to arrearages accruing on or after October 1, 
1998.

SEC. 471. DENIAL OF PASSPORTS FOR NONPAYMENT OF CHILD SUPPORT.

    (a) HHS Certification Procedure.--
            (1) Secretarial responsibility.--Section 452 (42 U.S.C. 
        652), as amended by sections 415(a)(3) and 417, is amended by 
        adding at the end the following new subsection:
    ``(l)(1) If the Secretary receives a certification by a State 
agency in accordance with the requirements of section 454(29) that an 
individual owes arrearages of child support in an amount exceeding 
$5,000 or in an amount exceeding 24 months' worth of child support, the 
Secretary shall transmit such certification to the Secretary of State 
for action (with respect to denial, revocation, or limitation of 
passports) pursuant to section 471(b) of the Interstate Child Support 
Responsibility Act of 1995.
    ``(2) The Secretary shall not be liable to an individual for any 
action with respect to a certification by a State agency under this 
section.''.
            (2) State child support enforcement agency 
        responsibility.--Section 454 (42 U.S.C. 654), as amended by 
        sections 404(a), 405, 414(b), 422(a), and 423(a) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (28);
                    (B) by striking the period at the end of paragraph 
                (29) and inserting ``; and''; and
                    (C) by adding after paragraph (29) the following 
                new paragraph:
            ``(30) provide that the State agency will have in effect a 
        procedure (which may be combined with the procedure for tax 
        refund offset under section 464) for certifying to the 
        Secretary, for purposes of the procedure under section 452(l) 
        (concerning denial of passports) determinations that 
        individuals owe arrearages of child support in an amount 
        exceeding $5,000 or in an amount exceeding 24 months' worth of 
        child support, under which procedure--
                    ``(A) each individual concerned is afforded notice 
                of such determination and the consequences thereof, and 
                an opportunity to contest the determination; and
                    ``(B) the certification by the State agency is 
                furnished to the Secretary in such format, and 
                accompanied by such supporting documentation, as the 
                Secretary may require.''.
    (b) State Department Procedure for Denial of Passports.--
            (1) In general.--The Secretary of State, upon certification 
        by the Secretary of Health and Human Services, in accordance 
        with section 452(l) of the Social Security Act, that an 
        individual owes arrearages of child support in excess of $5,000 
        or in an amount exceeding 24 months' worth of child support, 
        shall refuse to issue a passport to such individual, and may 
        revoke, restrict, or limit a passport issued previously to such 
        individual.
            (2) Limit on liability.--The Secretary of State shall not 
        be liable to an individual for any action with respect to a 
        certification by a State agency under this section.
    (c) Effective Date.--This section and the amendments made by this 
section shall become effective October 1, 1996.
SEC. 472. INTERNATIONAL CHILD SUPPORT ENFORCEMENT.

    (a) Sense of the Congress That the United States Should Ratify the 
United Nations Convention of 1956.--It is the sense of the Congress 
that the United States should ratify the United Nations Convention of 
1956.
    (b) Treatment of International Child Support Cases as Interstate 
Cases.--Section 454 (42 U.S.C. 654), as amended by sections 404(a), 
405, 414(b), 422(a), 423(a), and 471(a)(2), is amended--
            (1) by striking ``and'' at the end of paragraph (29);
            (2) by striking the period at the end of paragraph (30) and 
        inserting ``; and''; and
            (3) by inserting after paragraph (30) the following new 
        paragraph:
            ``(31) provide that the State must treat international 
        child support cases in the same manner as the State treats 
        interstate child support cases under the plan.''.

                       PART VIII--MEDICAL SUPPORT

SEC. 481. TECHNICAL CORRECTION TO ERISA DEFINITION OF MEDICAL CHILD 
              SUPPORT ORDER.

    (a) In General.--Section 609(a)(2)(B) of the Employee Retirement 
Income Security Act of 1974 (29 U.S.C. 1169(a)(2)(B)) is amended--
            (1) by striking ``issued by a court of competent 
        jurisdiction'';
            (2) in clause (ii) by striking the period and inserting a 
        comma; and
            (3) by adding after clause (ii), the following flush left 
        language:
                ``if such judgment, decree, or order (I) is issued by a 
                court of competent jurisdiction or (II) is issued by an 
                administrative adjudicator and has the force and effect 
                of law under applicable State law.''.
    (b) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        become effective on the date of the enactment of this Act.
            (2) Plan amendments not required until january 1, 1996.--
                    (A) In general.--Any amendment to a plan required 
                to be made by an amendment made by this section shall 
                not be required to be made before the first plan year 
                beginning on or after January 1, 1996, if--
                            (i) during the period after the date before 
                        the date of the enactment of this Act and 
                        before such first plan year, the plan is 
                        operated in accordance with the requirements of 
                        the amendments made by this section; and
                            (ii) such plan amendment applies 
                        retroactively to the period after the date 
                        before the date of the enactment of this Act 
                        and before such first plan year.
                    (B) No failure for compliance with this 
                paragraph.--A plan shall not be treated
                 as failing to be operated in accordance with the 
provisions of the plan merely because it operates in accordance with 
this paragraph.

                PART IX--ACCESS AND VISITATION PROGRAMS

SEC. 491. GRANTS TO STATES FOR ACCESS AND VISITATION PROGRAMS.

    Part D of title IV is amended by adding at the end the following 
new section:
         ``grants to states for access and visitation programs

    ``Sec. 469A. (a) Purposes; Authorization of Appropriations.--For 
purposes of enabling States to establish and administer programs to 
support and facilitate absent parents' access to and visitation of 
their children, by means of activities including mediation (both 
voluntary and mandatory), counseling, education, development of 
parenting plans, visitation enforcement (including monitoring, 
supervision, and neutral drop-off and pickup), and development of 
guidelines for visitation and alternative custody arrangements, there 
are authorized to be appropriated $5,000,000 for each of fiscal years 
1996 and 1997, and $10,000,000 for each succeeding fiscal year.
    ``(b) Payments to States.--
            ``(1) In general.--Each State shall be entitled to payment 
        under this section for each fiscal year in an amount equal to 
        its allotment under subsection (c) for such fiscal year, to be 
        used for payment of 90 percent of State expenditures for the 
        purposes specified in subsection (a).
            ``(2) Supplementary use.--Payments under this section shall 
        be used by a State to supplement (and not to substitute for) 
        expenditures by the State, for activities specified in 
        subsection (a), at a level at least equal to the level of such 
        expenditures for fiscal year 1994.
    ``(c) Allotments to States.--
            ``(1) In general.--For purposes of subsection (b), each 
        State shall be entitled (subject to paragraph (2)) to an amount 
        for each fiscal year bearing the same ratio to the amount 
        authorized to be appropriated pursuant to subsection (a) for 
        such fiscal year as the number of children in the State living 
        with only 1 biological parent bears to the total number of such 
        children in all States.
            ``(2) Minimum allotment.--Allotments to States under 
        paragraph (1) shall be adjusted as necessary to ensure that no 
        State is allotted less than $50,000 for fiscal year 1996 or 
        1997, or $100,000 for any succeeding fiscal year.
    ``(d) Federal Administration.--The program under this section shall 
be administered by the Administration for Children and Families.
    ``(e) State Program Administration.--
            ``(1) In general.--Each State may administer the program 
        under this section directly or through grants to or contracts 
        with courts, local public agencies, or non-profit private 
        entities.
            ``(2) Statewide plan permissible.--State programs under 
        this section may, but need not, be statewide.
            ``(3) Evaluation.--States administering programs under this 
        section shall monitor, evaluate, and report on such programs in 
        accordance with requirements established by the Secretary.''.

   Subtitle B--Child Support Enforcement and Assurance Demonstrations

SEC. 494. CHILD SUPPORT ENFORCEMENT AND ASSURANCE DEMONSTRATIONS.

    (a) Demonstrations Authorized.--
            (1) Initial projects.--The Secretary of Health and Human 
        Services (hereafter in this section referred to as the 
        ``Secretary'') shall make grants to three States for 
        demonstrations under this
         section to determine the effectiveness of programs to provide 
assured levels of child support to custodial parents of children for 
whom paternity and support obligations have been established.
    (b) Duration of Projects.--
            (1) Total project period.--The Secretary shall make grants 
        to States for demonstrations under this section beginning in 
        fiscal year 1997, for periods of 7 to 10 years.
            (2) Phasedown period.--Each State implementing a 
        demonstration project under this section shall--
                    (A) phase out activities under such demonstration 
                during the final two years of the project; and
                    (B) obtain the Secretary's approval, before the 
                beginning of such phasedown period, of a plan for 
                accomplishing such phasedown.
    (c) Considerations in Selection of Projects.--
            (1) Scope.--Projects under this section may, but need not, 
        be statewide in scope.
            (2) State administration.--
                    (A) Responsible state agency.--A State 
                demonstration project under this section shall be 
                administered either by the State agency administering 
                the program under title IV-D of the Social Security Act 
                or the State department of revenue and taxation.
                    (B) Automation.--The State agency described in 
                subparagraph (A) shall operate (or have automated 
                access to) the automated data system required under 
                section 454(16) of the Social Security Act, and shall 
                have adequate automated capacity to carry out the 
                project under this section (including the timely 
                distribution of child support assurance benefits).
            (3) Controls.--At least one demonstration project under 
        this section shall include randomly assigned control groups.
    (d) Eligibility.--
            (1) In general.--Child support assurance payments under 
        projects under this section shall be available only to children 
        for whom paternity and support obligations have been 
        established (or with respect to whom a determination has been 
        made that efforts to establish paternity or support would not 
        be in the best interests of the child).
            (2) Families with shared custody.--In cases where both 
        parents share custody of a child, a parent and child shall not 
        be eligible for benefits under a demonstration under this 
        section unless--
                    (A) a support order is in effect entitling such 
                parent to support payments in excess of the minimum 
                benefit; or
                    (B) the agency or tribunal which issued the order 
                certifies that the child support award would be below 
                such minimum benefit if either parent was awarded sole 
                custody and the guidelines under section 467 were 
                applied.
            (3) State option to base eligibility on need.--At State 
        option, eligibility for benefits under a demonstration under 
        this section may be limited to families with incomes and 
        resources below a standard of need established by the State.
    (f) Benefit Amounts.--
            (1) Range of benefit levels.--States shall have flexibility 
        to set annual benefit levels under demonstrations under this 
        section, provided that (subject to the remaining provisions of 
        this subsection) such levels--
                    (A) are not lower than $1,500 for a family with one 
                child or $3,000 for a family with four or more 
                children; and
                    (B) are not higher than $3,000 for a family with 
                one child or $4,500 for a family with four or more 
                children;
            (2) Indexing.--Annual benefit levels for each fiscal year 
        after fiscal year 1996 shall be indexed to reflect the change 
        in the Consumer Price Index.
            (3) Unmatched excess benefits.--The Secretary may permit 
        States to pay benefits higher than a maximum specified in 
        paragraphs (1) and (2), but Federal matching of such payments 
        shall not be available for benefits in excess of the amounts 
        specified in paragraph (1) (as adjusted in accordance with 
        paragraph (2)) by more than $25 per month.
    (g) Treatment of Benefits.--
            (1) For purposes of transitional aid.--The amount of aid 
        otherwise payable to a family under title IV-A of the Social 
        Security Act shall be reduced by an amount equal to the amount 
        of child support assurance paid to such family (or, at the 
        Secretary's discretion, by a percentage of such amount paid 
        specified by the Secretary).
            (2) Treatment of benefits for purposes of other benefit 
        programs.--
                    (A) In general.--Except as provided in subparagraph 
                (B), child support assurance paid to a family shall be 
                considered ordinary income for purposes of determining 
                eligibility for and benefits under any Federal or State 
                program.
                    (B) Deemed transitional aid eligibility.--At State 
                option, a child (or family) that is ineligible for aid 
                under title IV-A of the Social Security Act because of 
                payments under a demonstration under this section may 
                be deemed to be receiving such aid for purposes of 
                determining eligibility for other Federal and State 
                programs.
            (3) For tax purposes.--Child support assurance which is 
        paid to a family under this section and is not reimbursed from 
        a child support collection from a noncustodial parent shall be 
        considered ordinary income for purposes of Federal and State 
        tax liability.
    (h) Work Program Option.--At the option of the State grantee, a 
demonstration under this section may include a work program for 
unemployed noncustodial parents of eligible children.
    (i) Availability of Appropriations for Payments to States.--
            (1) State entitlement to iv-d funding.--A State 
        administering an approved demonstration under this section in a 
        calendar quarter shall be entitled to payments for such 
        quarter, pursuant to section 455 of the Social Security Act for 
        the Federal share of reasonable and necessary expenditures 
        (including expenditures for benefit payments and for associated 
        administrative costs) under such project, in an amount (subject 
        to paragraphs (2) and (3)) equal to--
                    (A) with respect to that portion of such 
                expenditures equal to the reduction of expenditures 
                under title IV-A of the Social Security Act pursuant to 
                subsection (g)(1), a percentage equal to the percentage 
                that would have been paid if such expenditures had been 
                made under such title IV-A; and
                    (B) 90 percent of the remainder of such 
                expenditures.
            (2) States with low transitional aid benefits.--In the case 
        of a State in which benefit levels under title IV-A of the 
        Social Security Act are below the national median for such 
        payments, the Secretary may elect to provide 90 percent Federal 
        matching of a portion of expenditures under a project under 
        this section that would otherwise be matched at the rate 
        specified in paragraph (1)(A).
            (3) Funding limits; pro rata reductions of state 
        matching.--
                    (A) Funds available.--There shall be available to 
                the Secretary, from amounts appropriated to carry our 
                part D of title IV of the Social Security Act, for 
                purposes of carrying out demonstrations under this 
                section, amounts not to exceed--
                            (i) $27,000,000 for fiscal year 1997;
                            (ii) $55,000,000 for fiscal year 1998;
                            (iii) $70,000,000 for each of fiscal years 
                        1999 through 2002; and
                            (iv) $55,000,000 for fiscal year 2003.
                    (B) Pro rata reductions.--The Secretary shall make 
                pro rata reductions in the amounts otherwise payable to 
                States under this section as necessary to comply with 
                the funding limitation specified in subparagraph (A).
    (j) Distribution of Child Support Collections.--Notwithstanding 
section 457 of the Social Security Act, support payments collected from 
the noncustodial parent of a child receiving (or who has received) 
child support assurance payments under this section shall be 
distributed as follows:
            (1) first, amounts equal to the total support owed for such 
        month shall be paid to the family;
            (2) second, from any remainder, amounts owed to the State 
        on account of child support assurance payments to the family 
        shall be paid to the State (with appropriate reimbursement to 
        the Federal Government of its share to such payments);
            (3) third, from any remainder, arrearages of support owed 
        to the family shall be paid to the family; and
            (4) fourth, from any remainder, amounts owed to the State 
        on account of current or past payments of aid under title IV-A 
        of the Social Security Act shall be paid to the State (with 
        appropriate reimbursement to the Federal Government of its 
        share of such payments).
    (k) Evaluations and Reports.--
            (1) State evaluations.--Each State administering a 
        demonstration project under this section shall--
                    (A) provide for ongoing and retrospective 
                evaluation of the project, meeting such conditions and 
                standards as the Secretary may require; and
                    (B) submit to the Secretary such reports (at such 
                times, in such format, and containing such information) 
                as the Secretary may require, including at least an 
                interim report not later than 90 days after the end of 
                the fourth year of the project, and a final report not 
                later than one year after the completion of the 
                project, which shall include information on and 
                analysis of the effect of the project with respect to--
                            (i) the economic circumstances of both 
                        noncustodial and custodial parents;
                            (ii) the rate of compliance by noncustodial 
                        parents with support orders;
                            (iii) work-force participation by both 
                        custodial and noncustodial parents;
                            (iv) the need for or amount of transitional 
                        aid to families with needy children under title 
                        IV-A of the Social Security Act;
                            (v) paternity establishment rates; and
                            (vi) any other matters the Secretary may 
                        specify.
            (2) Reports to congress.--The Secretary shall, on the basis 
        of reports received from States administering projects under 
        this section, make the following reports, containing an 
        assessment of the effectiveness of the projects and any 
        recommendations the Secretary considers appropriate:
                    (A) an interim report, not later than 6 months 
                following receipt of the interim State reports required 
                by paragraph (1)(B); and
                    (B) a final report, not later than 6 months 
                following receipt of the final State reports required 
                under such paragraph.
            (3) Funding for costs to secretary.--There are authorized 
        to be appropriated $10,000,000 for fiscal year 1997, to remain 
        available until expended, for payment of the cost of 
        evaluations by the Secretary of the demonstrations carried out 
        under this section.

 Subtitle C--Demonstration Proj- ects To Provide Services to Cer- tain 
                          Noncustodial Parents

SEC. 495. ESTABLISHMENT OF DEMONSTRATION PROJECTS FOR PROVIDING 
              SERVICES TO CERTAIN NONCUSTODIAL PARENTS.

    (a) In General.--The Secretary of Health and Human Services 
(hereafter in this section referred to as the ``Secretary'') shall make 
grants to not more than 5 States to conduct demonstration projects in 
accordance with subsection (b) for the purpose of providing services to 
noncustodial parents who are unable to meet child support obligations 
due to unemployment or underemployment.
    (b) Requirements of Project.--A project conducted in accordance 
with this subsection shall provide noncustodial parents who are unable 
to meet child support obligations due to unemployment or 
underemployment with the following services:
            (1) Assessment of job readiness.
            (2) Referrals to job training and education programs.
            (3) Court monitored job search.
            (4) Court ordered participation in State work programs or 
        other specialized employment programs.
            (5) Technical assistance and information and interpretation 
        of legal proceedings.
            (6) Information dissemination and referrals to other 
        available services.
            (7) Other services determined by the State.
    (c) Applications.--Each State desiring to conduct a demonstration 
project under this section shall prepare and submit to the Secretary an 
application at such time, in such manner, and containing such 
information as the Secretary may require.
    (d) Reports.--A State that conducts a demonstration project under 
this section shall prepare and submit to the Secretary annual and final 
reports in such form and containing such information as the Secretary 
may require.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated $1,000,000 for each of fiscal years 1997 through 1999 for 
the purpose of conducting demonstration projects in accordance with 
this section.

                        Subtitle D--Severability

SEC. 496. SEVERABILITY.

    If any provision of subtitle A or the application thereof to any 
person or circumstance is held invalid, the invalidity shall not affect 
other provisions or applications of subtitle A which can be given 
effect without regard to the invalid provision or application, and to 
this end the provisions of subtitle A shall be severable.
                     TITLE V--TRANSITIONAL MEDICAID

SEC. 501. STATE OPTION TO EXTEND TRANSITIONAL MEDICAID BENEFITS.

    (a) Optional Extension of Medicaid Enrollment for Former 
Transitional Aid Program Recipients for 1 Additional Year.--
            (1) In general.--Section 1925(b)(1) (42 U.S.C. 1396r-
        6(b)(1)) is amended by striking the period at the end and 
        inserting the following: ``, and may provide that the State may 
        offer to each such family the option of extending coverage 
        under this subsection for any of the first 2 succeeding 6-month 
        periods, in the same manner and under the same conditions as 
        the option of extending coverage under this subsection for the 
        first succeeding 6-month period.''.
            (2) Conforming amendments.--
                    (A) In general.--Section 1925 (42 U.S.C. 1396r-6) 
                is amended--
                            (i) in subsection (b)--
                                    (I) in the heading, by striking 
                                ``Extension'' and inserting 
                                ``Extensions'';
                                    (II) in the heading of paragraph 
                                (1), by striking ``Requirement'' and 
                                inserting ``In general'';
                                    (III) in paragraph (2)(B)(ii)--
                                            (aa) in the heading, by 
                                        striking ``period'' and 
                                        inserting ``periods''; and
                                            (bb) by striking ``in the 
                                        period'' and inserting ``in 
                                        each of the 6-month periods'';
                                    (IV) in paragraph (3)(A), by 
                                striking ``the 6-month period'' and 
                                inserting ``any 6-month period'';
                                    (V) in paragraph (4)(A), by 
                                striking ``the extension period'' and 
                                inserting ``any extension period''; and
                                    (VI) in paragraph (5)(D)(i), by 
                                striking ``is a 3-month period'' and 
                                all that follows and inserting the 
                                following: ``is, with respect to a 
                                particular 6-month additional extension 
                                period provided under this subsection, 
                                a 3-month period beginning with the 1st 
                                or 4th month of such extension 
                                period.''; and
                            (ii) by striking subsection (f).
                    (B) Family support act.--Section 303(f)(2) of the 
                Family Support Act of 1988 (42 U.S.C. 602 note) is 
                amended--
                            (i) by striking ``(A)''; and
                            (ii) by striking subparagraphs (B) and (C).
    (b) Effective Date.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by subsection (a) shall apply to calendar 
        quarters beginning on or after October 1, 1996, without regard 
        to whether final regulations to carry out such amendments have 
        been promulgated by such date.
            (2) When state legislation is required.--In the case of a 
        State plan for medical assistance under title XIX of the Social 
        Security Act which the Secretary of Health and Human Services 
        determines requires State legislation (other than legislation 
        appropriating funds) in order for the plan to meet the 
        additional requirements imposed by the amendments made by 
        subsection (a), the State plan shall not be regarded as failing 
        to comply with the requirements of such title solely on the 
        basis of its failure to meet these additional requirements 
        before the first day of the first calendar quarter beginning 
        after the close of the first regular session of the State 
        legislature that begins after the date of the enactment of this 
        Act. For purposes of the previous sentence, in the case of a 
        State that has a 2-year legislative session, each year of such 
        session shall be deemed to be a separate regular session of the 
        State legislature.
                 TITLE VI--TEENAGE PREGNANCY PREVENTION

SEC. 601. SUPERVISED LIVING ARRANGEMENTS FOR MINORS.

    Section 402(a) (42 U.S.C. 602(a)), as amended by section 101, is 
amended by adding at the end the following new paragraph:
            ``(13) Residency requirement for teenage parents.--The 
        State plan shall provide that--
                    ``(A) In general.--Except as provided in 
                subparagraph (B)(i), in the case of any individual who 
                is under the age of 18 and has never married, and who 
                has a dependent child in his or her care (or is 
                pregnant and is eligible for transitional aid to 
                families with needy children under the State plan)--
                            ``(i) such individual may receive 
                        transitional aid to families with needy 
                        children under the plan for the individual and 
                        such child (or for the individual if the 
                        individual is a pregnant woman) only if such 
                        individual and child (or such pregnant woman) 
                        reside in a place of residence maintained by a 
                        parent, legal guardian, or other adult relative 
                        of such individual as such parent's, 
                        guardian's, or adult relative's own home; and
                            ``(ii) such aid (where possible) shall be 
                        provided to the parent, legal guardian, or 
                        other adult relative on behalf of such 
                        individual and child.
                    ``(B) Exception.--
                            ``(i) Assistance in locating adult-
                        supervised living arrangement.--In the case of 
                        an individual described in clause (ii)--
                                    ``(I) the State agency shall assist 
                                such individual in locating an 
                                appropriate adult-supervised supportive 
                                living arrangement taking into 
                                consideration the needs and concerns of 
                                the individual, unless the State agency 
                                determines that the individual's 
                                current living arrangement is 
                                appropriate, and thereafter shall 
                                require that the individual (and child, 
                                if any) reside in such living 
                                arrangement as a condition of the 
                                continued receipt of aid under the plan 
                                (or in an alternative appropriate 
                                arrangement, should circumstances 
                                change and the current arrangement 
                                cease to be appropriate), or
                                    ``(II) if the State agency is 
                                unable, after making diligent efforts, 
                                to locate any such appropriate living 
                                arrangement, it shall provide for 
                                comprehensive case management, 
                                monitoring, and other social services 
                                consistent with the best interests of 
                                the individual (and child) while living 
                                independently.
                            ``(ii) Individual described.--For purposes 
                        of clause (i), an individual is described in 
                        this clause if--
                                    ``(I) such individual has no parent 
                                or legal guardian of his or her own who 
                                is living and whose whereabouts are 
                                known;
                                    ``(II) no living parent or legal 
                                guardian of such individual allows the 
                                individual to live in the home of such 
                                parent or guardian;
                                    ``(III) the State agency determines 
                                that the physical or emotional health 
                                of such individual or any dependent 
                                child of the individual would be 
                                jeopardized if such individual and such 
                                dependent child lived in the same 
                                residence with such individual's own 
                                parent or legal guardian; or
                                    ``(IV) the State agency otherwise 
                                determines (in accordance with 
                                regulations issued by the Secretary) 
                                that it is in the best interest of the 
                                dependent child to waive the 
                                requirement of subparagraph (A) with 
                                respect to such individual.''.

SEC. 602. REINFORCING FAMILIES.

    (a) In General.--Title XX (42 U.S.C. 1397-1397e) is amended by 
adding at the end the following new section:

``SEC. 2008. SECOND CHANCE HOUSES.

    ``(a) Entitlement.--
            ``(1) In general.--In addition to any payment under 
        sections 2002 and 2007, beginning with fiscal year 1996, each 
        State shall be entitled to funds under this section for each 
        fiscal year for the establishment, operation, and support of 
        second chance houses for custodial parents under the age of 19 
        and their children.
            ``(2) Payment to states.--
                    ``(A) In general.--Each State shall be entitled to 
                payment under this section for each fiscal year in an 
                amount equal to its allotment (determined in accordance 
                with subsection (b)) for such fiscal year, to be used 
                by such State for the purposes set forth in paragraph 
                (1).
                    ``(B) Transfers of funds.--The Secretary shall make 
                payments in accordance with section 6503 of title 31, 
                United States Code, to each State from its allotment 
                for use under this title.
                    ``(C) Use.--Payments to a State from its allotment 
                for any fiscal year must be expended by the State in 
                such fiscal year or in the succeeding fiscal year.
                    ``(D) Technical assistance.--A State may use a 
                portion of the amounts described in subparagraph (A) 
                for the purpose of purchasing technical assistance from 
                public or private entities if the State determines that 
                such assistance is required in developing, 
                implementing, or administering the program funded under 
                this section.
            ``(3) Second chance houses.--For purposes of this section, 
        the term `second chance houses' means an entity that provides 
        custodial parents under the age of 19 and their children with a 
        supportive and supervised living arrangement in which such 
        parents would be required to learn parenting skills, including 
        child development, family budgeting, health and nutrition, and 
        other skills to promote their long-term economic independence 
        and the well-being of their children. A second chance house may 
        also serve as a network center for other supportive services 
        that might be available in the community.
    ``(b) Allotment.--
            ``(1) Certain jurisdictions.--The allotment for any fiscal 
        year to each of the jurisdictions of Puerto Rico, Guam, the 
        Virgin Islands, American Samoa, and the Northern Mariana 
        Islands shall be an amount which bears the same ratio to the 
        amount specified under paragraph (3) as the allotment that the 
        jurisdiction receives under section 2003(a) for the fiscal year 
        bears to the total amount specified for such fiscal year under 
        section 2003(c).
            ``(2) Other states.--The allotment for any fiscal year for 
        each State other than the jurisdictions of Puerto Rico, Guam, 
        the Virgin Islands, American Samoa, and the Northern Mariana 
        Islands shall be an amount which bears the same ratio to--
                    ``(A) the amount specified under paragraph (3); 
                reduced by
                    ``(B) the total amount allotted to those 
                jurisdictions for that fiscal year under paragraph (1),
        as the allotment that the State receives under section 2003(b) 
        for the fiscal year bears to the total amount specified for 
        such fiscal year under section 2003(c).
            ``(3) Amount specified.--The amount specified for purposes 
        of paragraphs (1) and (2) shall be $40,000,000 for fiscal year 
        1996 and each subsequent fiscal year.
    ``(c) Local Involvement.--Each State shall seek local involvement 
from the community in any area in which a second chance house receiving 
funds pursuant to this section is to be established. In determining 
criteria for targeting funds received under this section, each State 
shall evaluate the community's commitment to the establishment and 
planning of the house.
    ``(d) Limitations on the Use of Funds.--
            ``(1) Construction.--Except as provided in paragraph (2), 
        funds made available under this section may not be used by the 
        State, or any other person with which the State makes 
        arrangements to carry out the purposes of this section, for the 
        purchase or improvement of land, or the purchase, construction, 
        or permanent improvement (other than minor remodeling) of any 
        building or other facility.
            ``(2) Waiver.--The Secretary may waive the limitation 
        contained in paragraph (1) upon the State's request for such a 
        waiver if the Secretary finds that the request describes 
        extraordinary circumstances to justify the waiver and that 
        permitting the waiver will contribute to the State's ability to 
        carry out the purposes of this section.
    ``(e) Treatment of Indian Tribes.--
            ``(1) In general.--An Indian tribe may apply to the 
        Secretary to establish, operate, and support adult-supervised 
        group homes for custodial parents under the age of 19 and their 
        children in accordance with an application procedure to be 
        determined by the Secretary. Except as otherwise provided in 
        this subsection, the provisions of this section shall apply to 
        Indian tribes receiving funds under this subsection in the same 
        manner and to the same extent as the other provisions of this 
        section apply to States.
            ``(2) Allotment.--If the Secretary approves an Indian 
        tribe's application, the Secretary shall allot to such tribe 
        for a fiscal year an amount which the Secretary determines is 
        the Indian tribe's fair and equitable share of the amount 
        specified under paragraph (3) for all Indian tribes with 
        applications approved under this subsection (based on allotment 
        factors to be determined by the Secretary). The Secretary shall 
        determine a minimum allotment amount for all Indian tribes with 
        applications approved under this subsection. Each Indian tribe 
        with an application approved under this subsection shall be 
        entitled to such minimum allotment.
            ``(3) Amount specified.--The amount specified under this 
        paragraph for all Indian tribes with applications approved 
        under this subsection is $5,000,000 for fiscal year 1996 and 
        each subsequent fiscal year.
            ``(4) Indian tribe defined.--For purposes of this section, 
        the term `Indian tribe' means any Indian tribe, band, nation, 
        pueblo, or other organized group or community, including any 
        Alaska Native entity which is recognized as eligible for the 
        special programs and services provided by the United States to 
        Indian tribes because of their status as Indians.''.
    (b) Receipt of Payments by Second Chance Houses.--Section 
402(a)(13)(A)(ii), as added by section 601, is amended by striking ``or 
other adult relative'' and inserting ``other adult relative, or second 
chance house receiving funds under section 2008''.
    (c) Recommendations on Usage of Government Surplus Property.--Not 
later than 6 months after the date of the enactment of this Act, after 
consultation with the Secretary of Defense, the Secretary of Housing 
and Urban Development, and the Administrator of the General Services 
Administration, the Secretary of Health and Human Services shall submit 
recommendations to the Congress on the extent to which surplus 
properties of the United States Government may be used for the 
establishment of second chance houses receiving funds under section 
2008 of the Social Security Act.

SEC. 603. REQUIRED COMPLETION OF HIGH SCHOOL OR OTHER TRAINING FOR 
              TEENAGE PARENTS.

    (a) In General.--Section 402(a) (42 U.S.C. 602(a)), as amended by 
sections 101, 601, and 602, is amended by adding at the end the 
following new paragraph:
            ``(14) Educational requirements.--The State plan shall 
        provide the following educational requirements:
                    ``(A) Custodial parent under 19 years.--In the case 
                of a custodial parent who has not attained 19 years of 
                age, has not successfully completed a high-school 
                education (or its equivalent), and is required to 
                participate in the program (including an individual who 
                would otherwise be exempt from participation in the 
                program solely by reason of clause (i), (ii), or (iii) 
                of paragraph (11)(B)), the State agency shall--
                            ``(i) require such parent to participate 
                        in--
                                    ``(I) educational activities 
                                directed toward the attainment of a 
                                high school diploma or its equivalent 
                                on a full-time basis (as defined by the 
                                educational provider); or
                                    ``(II) an alternative educational 
                                or training program (that has been 
                                approved by the Secretary) on a full-
                                time basis (as defined by the 
                                provider); and
                            ``(ii) provide child care in accordance 
                        with paragraph (5) with respect to the family.
                    ``(B) Custodial parent 19 years old.--
                            ``(i) In general.--To the extent that the 
                        program is available in the political 
                        subdivision involved and State resources 
                        otherwise permit, the State agency shall 
                        require a custodial parent who would be 
                        described in subparagraph (A), if that parent 
                        is 19 years of age, to participate in an 
                        educational activity described in clause (ii).
                            ``(ii) Type of educational activity.--The 
                        State agency may require a parent described in 
                        clause (i)--
                                    ``(I) to participate in educational 
                                activities directed toward the 
                                attainment of a high school diploma or 
                                its equivalent on a full-time basis (as 
                                defined by the educational provider); 
                                or
                                    ``(II) to participate in training 
                                or work activities in lieu of the 
                                educational activities under subclause 
                                (I) if such parent fails to make good 
                                progress in successfully completing 
                                such educational activities or if it is 
                                determined (prior to any assignment of 
                                the individual to such educational 
                                activities) pursuant to an educational 
                                assessment that participation in such 
                                educational activities is inappropriate 
                                for such parent.
                    ``(C) Educational activity considered participation 
                in program.--
                            ``(i) In general.--If the parent or other 
                        caretaker relative or any dependent child in 
                        the family is attending in good standing an 
                        institution of higher education (as defined in 
                        section 481(a) of the Higher Education Act of 
                        1965 (20 U.S.C. 1088), or a school or course of 
                        vocational or technical training (not less than 
                        half time) consistent with the individual's 
                        employment goals, and is making satisfactory 
                        progress in such institution, school, or 
                        course, at the time he or she would otherwise 
                        commence participation in the program under 
                        this section, such attendance may, at the 
                        State's option, constitute satisfactory 
                        participation in the program (by that caretaker 
                        or child) so long as it continues and is 
                        consistent with such goals.
                            ``(ii) Additional requirements.--In 
                        addition to the requirements described in 
                        clause (i)--
                                    ``(I) any other activities in which 
                                an individual described in this 
                                subparagraph participates may not be 
                                permitted to interfere with the school 
                                or training described in such clause; 
                                and
                                    ``(II) the costs of such school or 
                                training shall not constitute a 
                                federally reimbursable expense for 
                                purposes of section 403, however the 
                                costs of day care, transportation, and 
                                other services which are necessary (as 
                                determined by the State agency) for 
                                such attendance in accordance with 
                                paragraph (5) are eligible for Federal 
                                reimbursement.''.
    (b) State Option To Provide Additional Incentives and Penalties To 
Encourage Teenage Parents To Complete High School and Participate in 
Parenting Activities.--
            (1) State plan.--Section 402(a)(14)(A), as added by 
        subsection (a), is amended by adding at the end the following 
        new subparagraph:
                    ``(D) Incentives and penalty program.--At the 
                option of the State, some or all custodial parents and 
                pregnant women who have not attained 19 years of age 
                (or at the State's option, 21 years of age) and who are 
                receiving aid under this part shall be required to 
                participate in a program of monetary incentives and 
                penalties for participation and completion of a high 
                school education (or equivalent) and in parenting 
                activities, consistent with subsection (f);''.
            (2) Elements of program.--Section 402 (42 U.S.C. 602), as 
        amended by section 101, is amended by adding at the end the 
        following new subsection:
    ``(f) Incentives and Penalties Program.--
            ``(1) In general.--If a State opts to conduct a program of 
        incentives and penalties described in subsection (a)(14)(D), 
        the State shall amend its State plan--
                    ``(A) to specify the one or more political 
                subdivisions (or other clearly defined geographic area 
                or areas) in which the State will conduct the program; 
                and
                    ``(B) to describe its program in detail.
            ``(2) Program described.--A program under this subsection--
                    ``(A) may, at the option of the State, require 
                full-time participation by custodial parents and 
                pregnant women to whom the program applies in secondary 
                school or equivalent educational activities, or 
                participation in a course or program leading to a 
                parenting skills certificate found appropriate by the 
                State agency or parenting education activities (or any 
                combination of such activities and secondary 
                education);
                    ``(B) shall require that the needs of such 
                custodial parents and pregnant women shall be reviewed 
                and the program will ensure that, either in the initial 
                development or revision of such individual's 
                employability plan, there will be included a 
                description of the services that will be provided to 
                the individual and the way in which the program and 
                service providers will coordinate with the educational 
                or skills training activities in which the individual 
                is participating;
                    ``(C) shall provide monetary incentives for more 
                than minimally acceptable performance of required 
                educational activities; and
                    ``(D) shall provide penalties (which may be those 
                allowed by subsection (a)(1)(H) or other monetary 
                penalties that the State finds will better achieve the 
                objectives of the program) for less than minimally 
                acceptable performance of required activities.
            ``(3) Monetary incentive payable to parent.--When a 
        monetary incentive is payable because of the more than 
        minimally acceptable performance of required educational 
        activities by a custodial parent, the incentive shall be paid 
        directly to such parent, regardless of whether the State agency 
        makes payment of aid under the State plan directly to such 
        parent.
            ``(4) Treatment of monetary incentive.--
                    ``(A) In general.--For purposes of this part, 
                monetary incentives paid under this subsection shall be 
                considered transitional aid to families with needy 
                children.
                    ``(B) Treatment under other federal programs.--For 
                purposes of any other Federal or federally-assisted 
                program based on need, no monetary incentive paid under 
                this subsection shall be considered income in 
                determining a family's eligibility for or amount of 
                benefits under such program, and if aid is reduced by 
                reason of a penalty under this subsection, such other 
                program shall treat the family involved as if no such 
                penalty has been applied.
            ``(5) Information provided to secretary.--The State agency 
        shall from time to time provide such information with respect 
        to the State operation of the program as the Secretary may 
        request.''.

SEC. 604. TARGETING YOUTH AT RISK OF TEENAGE PREGNANCY.

    (a) In General.--Section 402 of the Social Security Act (42 U.S.C. 
602), as amended by sections 101 and 603, is amended by adding at the 
end the following new subsection:
    ``(g) Reduction in Teenage Pregnancy.--
            ``(1) In general.--Each State agency may, to the extent it 
        determines resources are available, provide for the operation 
        of projects to reduce teenage pregnancy. Such projects shall be 
        operated by eligible entities that have submitted applications 
        described in paragraph (3) that have been approved in 
        accordance with paragraph (4).
            ``(2) Eligible entity.--For purposes of this subsection, 
        the term `eligible entity' includes State agencies, local 
        agencies, publicly supported organizations, private nonprofit 
        organizations, and consortia of such entities.
            ``(3) Application described.--An application described in 
        this paragraph shall--
                    ``(A) describe the project;
                    ``(B) include an endorsement of the project by the 
                chief elected official of the jurisdiction in which the 
                project is to be located;
                    ``(C) demonstrate strong local commitment and local 
                involvement in the planning and implementation of the 
                project; and
                    ``(D) be submitted in such manner and containing 
                such information as the Secretary may require.
            ``(4) Approval of application.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                chief executive officer of a State may approve an 
                application under this paragraph based on selection 
                criteria to be determined by such chief executive 
                officer.
                    ``(B) Preferences in approving projects.--
                Preference in approving a project shall be accorded to 
                projects that target--
                            ``(i) both young men and women;
                            ``(ii) areas with high teenage pregnancy 
                        rates; or
                            ``(iii) areas with a high incidence of 
                        individuals receiving transitional aid to 
                        families with needy children.
            ``(5) Indian tribes.--
                    ``(A) In general.--An Indian tribe may apply to the 
                Secretary to provide for the operation of projects to 
                reduce teenage pregnancy in accordance with an 
                application procedure to be determined by the 
                Secretary. Except as otherwise provided in this 
                subsection, the provisions of this section shall apply 
                to Indian tribes receiving funds under this subsection 
                in the same manner and to the same extent as the other 
                provisions of this section apply to States.
                    ``(B) Indian tribe defined.--For purposes of this 
                subsection, the term `Indian tribe' means any Indian 
                tribe, band, nation, pueblo, or other organized group 
                or community, including any Alaska Native entity which 
                is recognized as eligible for the special programs and 
                services provided by the United States to Indian tribes 
                because of their status as Indians.
            ``(6) Term of projects.--A project conducted under this 
        subsection shall be conducted for not less than 3 years.
            ``(7) Study.--
                    ``(A) In general.--The Secretary shall conduct a 
                study in accordance with subparagraph (B) to determine 
                the relative effectiveness of the different approaches 
                for preventing teenage pregnancy utilized in the 
                projects conducted under this subsection.
                    ``(B) Study requirements.--The study required under 
                subparagraph (A) shall--
                            ``(i) be based on data gathered from 
                        projects conducted in 5 States chosen by the 
                        Secretary from among the States in which 
                        projects under this subsection are operated;
                            ``(ii) use specific outcome measures 
                        (determined by the Secretary) to test the 
                        effectiveness of the projects;
                            ``(iii) use experimental and control groups 
                        (to the extent possible) that are
                         composed of a random sample of participants in 
the projects; and
                            ``(iv) be conducted in accordance with an 
                        experimental design determined by the Secretary 
                        to result in a comparable design among all 
                        projects.
                    ``(C) Interim and annual reports.--Each eligible 
                entity conducting a project under this subsection shall 
                provide to the Secretary, in such form and with such 
                frequency as the Secretary requires, interim data from 
                the projects conducted under this subsection. The 
                Secretary shall report to the Congress annually on the 
                progress of such projects and shall, not later than 
                January 1, 2003, submit to the Congress a report on the 
                study required under subparagraph (A).
                    ``(D) Authorization.--There are authorized to be 
                appropriated $500,000 for each of fiscal years 1996 
                through 2001 for the purpose of conducting the study 
                required under subparagraph (A).''.
    (b) Payment.--Section 403 of the Social Security Act (42 U.S.C. 
603), as amended by section 101, is amended by adding at the end the 
following new subsection:
    ``(e) Payments for Reducing Teenage Pregnancy.--
            ``(1) In general.--In addition to any payment under 
        subsection (a), each State shall be entitled to payment from 
        the Secretary for each of fiscal years 1996 through 2001 in an 
        amount equal to the lesser of--
                    ``(A) 75 percent of the expenditures made by the 
                State in providing for the operation of the projects 
                under section 402(g), and in administering the projects 
                under such section; or
                    ``(B) the limitation determined under paragraph (2) 
                with respect to the State for the fiscal year.
            ``(2) Limitation.--
                    ``(A) In general.--The limitation determined under 
                this paragraph with respect to a State for any fiscal 
                year is the amount that bears the same ratio to 
                $20,000,000 as the population with an income below the 
                poverty line (as such term is defined in section 673(2) 
                of the Omnibus Budget Reconciliation Act of 1981), 
                including any revision required by such section) in the 
                State in the second preceding fiscal year bears to such 
                population residing in the United States in the second 
                preceding fiscal year.
                    ``(B) Limitation increased.--If the limitation 
                determined under subparagraph (A) with respect to a 
                State for a fiscal year exceeds the amount paid to the 
                State under this subsection for the fiscal year, the 
                limitation determined under this paragraph with respect 
                to the State for the immediately succeeding fiscal year 
                shall be increased by the amount of such excess.
            ``(3) Payments to indian tribes.--
                    ``(A) In general.--Notwithstanding any other 
                provision of this title, for purposes of this 
                subsection, an Indian tribe with an application 
                approved under section 402(g)(5) shall be entitled to 
                payment from the Secretary for each of fiscal years 
                1996 through 2001 in an amount equal to the lesser of--
                            ``(i) 75 percent of the expenditures made 
                        by the Indian tribe in providing for the 
                        operation of the projects under section 
                        402(g)(5), and in administering the projects 
                        under such section; or
                            ``(ii) the limitation determined under 
                        subparagraph (B) with respect to the Indian 
                        tribe for the fiscal year.
                    ``(B) Limitation.--
                            ``(i) In general.--The limitation 
                        determined under this subparagraph with respect 
                        to an Indian tribe for any fiscal year is the 
                        amount that bears the same ratio to $3,750,000 
                        as the population with an income below the 
                        poverty line (as such term is defined in 
                        section 673(2) of the Omnibus Budget 
                        Reconciliation Act of 1981), including any 
                        revision required by such section) in the 
                        Indian tribe in the second preceding fiscal 
                        year bears to such population of all Indian 
                        tribes with applications approved under section 
                        402(g)(5) in the second preceding fiscal year.
                            ``(ii) Increase in limitation.--If the 
                        limitation determined under clause (i) with 
                        respect to an Indian tribe for a fiscal year 
                        exceeds the amount paid to the Indian tribe 
                        under this paragraph for the fiscal year, the 
                        limitation determined under this subparagraph 
                        with respect to the Indian tribe for the 
                        immediately succeeding fiscal year shall be 
                        increased by the amount of such excess.
            ``(4) Appropriations.--Amounts appropriated for a fiscal 
        year to carry out this part shall be made available for 
        payments under this subsection for such fiscal year.''.

SEC. 605. NATIONAL CLEARINGHOUSE ON TEENAGE PREGNANCY.

    (a) Establishment.--Not later than October 1, 1996, the Secretary 
of Health and Human Services, shall within an existing office of the 
Department of Health and Human Services, establish a national center 
for the collection and provision of information that relates to 
adolescent pregnancy prevention programs, to be known as the ``National 
Clearinghouse on Teenage Pregnancy Prevention Programs''.
    (b) Functions.--The national center established under subsection 
(a) shall serve as a national information and data clearinghouse, and 
as a training, technical assistance, and material development source 
for adolescent pregnancy prevention programs. Such center shall--
            (1) develop and maintain a system for disseminating 
        information on all types of adolescent pregnancy prevention 
        programs and on the state of adolescent pregnancy prevention 
        program development, including information concerning the most 
        effective model programs;
            (2) develop and sponsor a variety of training institutes 
        and curricula for adolescent pregnancy prevention program 
        staff;
            (3) identify model programs representing the various types 
        of adolescent pregnancy prevention programs;
            (4) develop technical assistance materials and activities 
        to assist other entities in establishing and improving 
        adolescent pregnancy prevention programs;
            (5) develop networks of adolescent pregnancy prevention 
        programs for the purpose of sharing and disseminating 
        information; and
            (6) conduct such other activities as the responsible 
        Federal officials find will assist in developing and carrying 
        out programs or activities to reduce adolescent pregnancy.
    (c) Authorization of Appropriations.--There are authorized to be 
appropriated such sums as may be necessary to carry out the provisions 
of this section.
SEC. 606. DENIAL OF FEDERAL HOUSING BENEFITS TO MINORS WHO BEAR 
              CHILDREN OUT-OF-WEDLOCK.

    (a) Prohibition of Assistance.--Notwithstanding any other provision 
of law, a household whose head of household is an individual who has 
borne a child out-of-wedlock before attaining 18 years of age may not 
be provided Federal housing assistance for a dwelling unit until 
attaining such age, unless--
            (1) after the birth of the child--
                    (A) the individual marries an individual who has 
                been determined by the relevant State to be the 
                biological father of the child; or
                    (B) the biological parent of the child has legal 
                custody of the child and marries an individual who 
                legally adopts the child;
            (2) the individual is a biological and custodial parent of 
        another child who was not born out-of-wedlock; or
            (3) eligibility for such Federal housing assistance is 
        based in whole or in part on any disability or handicap of a 
        member of the household.
    (b) Definitions.--For purposes of this section, the following 
definitions shall apply:
            (1) Covered program.--The term ``covered program'' means--
                    (A) the program of rental assistance on behalf of 
                low-income families provided under section 8 of the 
                United States Housing Act of 1937 (42 U.S.C. 1437f);
                    (B) the public housing program under title I of the 
                United States Housing Act of 1937 (42 U.S.C. 1437 et 
                seq.);
                    (C) the program of rent supplement payments on 
                behalf of qualified tenants pursuant to contracts 
                entered into under section 101 of the Housing and Urban 
                Development Act of 1965 (12 U.S.C. 1701s);
                    (D) the program of interest reduction payments 
                pursuant to contracts entered into by the Secretary of 
                Housing and Urban Development under section 236 of the 
                National Housing Act (12 U.S.C. 1715z-1);
                    (E) the program for mortgage insurance provided 
                pursuant to sections 221(d) (3) or (4) of the National 
                Housing Act (12 U.S.C. 1715l(d)) for multifamily 
                housing for low- and moderate-income families;
                    (F) the rural housing loan program under section 
                502 of the Housing Act of 1949 (42 U.S.C. 1472);
                    (G) the rural housing loan guarantee program under 
                section 502(h) of the Housing Act of 1949 (42 U.S.C. 
                1472(h));
                    (H) the loan and grant programs under section 504 
                of the Housing Act of 1949 (42 U.S.C. 1474) for repairs 
                and improvements to rural dwellings;
                    (I) the program of loans for rental and cooperative 
                rural housing under section 515 of the Housing Act of 
                1949 (42 U.S.C. 1485);
                    (J) the program of rental assistance payments 
                pursuant to contracts entered into under section 
                521(a)(2)(A) of the Housing Act of 1949 (42 U.S.C. 
                1490a(a)(2)(A));
                    (K) the loan and assistance programs under sections 
                514 and 516 of the Housing Act of 1949 (42 U.S.C. 1484, 
                1486) for housing for farm labor;
                    (L) the program of grants and loans for mutual and 
                self-help housing and technical assistance under 
                section 523 of the Housing Act of 1949 (42 U.S.C. 
                1490c);
                    (M) the program of grants for preservation and 
                rehabilitation of housing under section 533 of the 
                Housing Act of 1949 (42 U.S.C. 1490m); and
                    (N) the program of site loans under section 524 of 
                the Housing Act of 1949 (42 U.S.C. 1490d).
            (2) Covered project.--The term ``covered project'' means 
        any housing for which Federal housing assistance is provided 
        that is attached to the project or specific dwelling units in 
        the project.
            (3) Federal housing assistance.--The term ``Federal housing 
        assistance'' means--
                    (A) assistance provided under a covered program in 
                the form of any contract, grant, loan, subsidy, 
                cooperative agreement, loan or mortgage guarantee or 
                insurance, or other financial assistance; or
                    (B) occupancy in a dwelling unit that is--
                            (i) provided assistance under a covered 
                        program; or
                            (ii) located in a covered project and 
                        subject to occupancy limitations under a 
                        covered program that are based on income.
            (4) State.--The term ``State'' means the States of the 
        United States, the District of Columbia, the Commonwealth of 
        Puerto Rico, the Commonwealth of the Northern Mariana Islands, 
        Guam, the Virgin Islands, American Samoa, and any other 
        territory or possession of the United States.
    (c) Limitations on Applicability.--Subsection (a) shall not apply 
to Federal housing assistance provided for a household pursuant to an 
application or request for such assistance made by such household 
before the effective date of this Act if the household was receiving 
such assistance on the effective date of this Act.

SEC. 607. NATIONAL CAMPAIGN AGAINST TEENAGE PREGNANCY.

    (a) Findings.--The Congress finds that the Government has a role to 
play in preventing teenage pregnancy but that the Government alone 
cannot deal with the massive changes in societal attitudes and behavior 
that have occurred in recent decades.
    (b) Sense of the Congress.--It is the sense of the Congress that 
the President should lead a national campaign against teenage pregnancy 
that--
            (1) challenges all aspects of society, including 
        businesses, national and community voluntary organizations, 
        religious institutions, and schools, to join in a national 
        effort to reduce teenage pregnancies;
            (2) emphasizes broad themes of economic opportunity and the 
        personal responsibility of each family in every community; and
            (3) establishes national and individual goals, based on the 
        measurable aspects of such broad themes, to define the mission 
        and guide the work of the national campaign including--
                    (A) graduation from high school; and
                    (B) deferral of childbearing until an individual is 
                emotionally prepared to support a child and accept 
                economic responsibility for the child's support.
   TITLE VII--CHILDREN'S ELIGIBILITY FOR SUPPLEMENTAL SECURITY INCOME

SEC. 701. SHORT TITLE.

    This title may be cited as the ``Children's SSI Eligibility Reform 
Act''.

SEC. 702. PURPOSE.

    It is the purpose of this title to ensure that supplemental 
security income benefits--
            (1) provide basic necessities to maintain a child with a 
        disability at home or in another appropriate and cost effective 
        setting;
            (2) cover the additional costs of caring for and raising 
        such a child; and
            (3) enhance the child's opportunity to develop into an 
        independent adult.

SEC. 703. SUPPLEMENTAL SECURITY INCOME BENEFITS FOR DISABLED CHILDREN.

    (a) Modification of Benefit Eligibility.--
            (1) In general.--Section 1614(a)(3)(A) (42 U.S.C. 
        1382c(a)(3)(A)) is amended--
                    (A) by inserting ``(i)'' after ``(3)(A)'';
                    (B) by inserting ``(other than an individual under 
                the age of 18)'' before ``shall be considered'';
                    (C) by striking ``he'' and inserting ``the 
                individual'';
                    (D) by striking ``(or, in the case of an individual 
                under the age of 18, if he suffers from any medically 
                determinable physical or mental impairment of 
                comparable severity)''; and
                    (E) by adding at the end the following new clause:
    ``(ii)(I) An individual under the age of 18 shall be considered to 
be disabled for purposes of this title for a month if the individual 
has any medically determinable physical or mental impairment of 
comparable severity to an impairment described in clause (i).
    ``(II) For purposes of subclause (I), an impairment is of 
comparable severity if such impairment is severe and persistent and 
substantially limits the individual's ability to develop or 
function.''.
            (2) Effective date.--The amendments made by paragraph (1) 
        shall apply to applicants for benefits for months beginning 6 
        months after the date of the enactment of this Act, without 
        regard to whether regulations have been issued to implement 
        such amendments.
    (b) Additional Modifications.--
            (1) Modification to medical criteria for evaluation of 
        mental and emotional disorders.--The Commissioner of Social 
        Security shall modify paragraph (2) of section 112.02B.2.c. of 
        appendix 1 to subpart P of part 404 of title 20, Code of 
        Federal Regulations, to eliminate references to maladaptive 
        behaviors and to require instead evidence of a persistent 
        pattern of behavior destructive to self or others requiring 
        protective intervention.
            (2) Modifications to individualized functional 
        assessment.--
                    (A) Increase in severity.--The Commissioner of 
                Social Security shall modify the level of severity 
                required to establish comparable severity under section 
                416.924e of title 20, Code of Federal Regulations, to 
                either--
                            (i) a marked level of impairment in 2 or 
                        more domains; or
                            (ii) a marked level of impairment in at 
                        least 1 domain and a moderate level of 
                        impairment in at least 1 additional domain.
                    (B) Domains of development or functioning.--The 
                Commissioner of Social Security shall modify the 
                individualized functional assessment for children set 
                forth in section 416.924d of title 20, Code of Federal 
                Regulations, to include the following domains of 
                development or functioning, to ensure the domains do 
                not overlap from a clinical perspective, and to compare 
                the child's abilities in each of these domains with 
                those of children of similar age who do not have a 
                disability:
                            (i) Cognition (the ability to understand 
                        and reason and to learn required skills).
                            (ii) Communication (the ability to receive 
                        and convey information; the ability to produce 
                        speech audibly and intelligibly).
                            (iii) Motor abilities (the ability to move 
                        and coordinate the body and extremities in 
                        gross and fine motions).
                            (iv) Ability to care for oneself (the 
                        ability to perform normal childhood activities 
                        in the home, school, or community with adult 
                        assistance or supervision appropriate to one's 
                        age and to control behaviors that could harm 
                        oneself or others).
                            (v) Ability to engage in interpersonal 
                        relations (the ability to develop and maintain 
                        positive and productive interpersonal 
                        relationships so as to function within the 
                        family, peer groups, and community).
                            (vi) Responsiveness to stimuli (the ability 
                        of children from birth to the attainment of age 
                        1 to react appropriately to visual, auditory, 
                        or tactile stimulation).
                            (vii) Ability to concentrate, persist, 
                        maintain pace, and have physical stamina to 
                        complete essential tasks in the home, school, 
                        or community (in children from age 3 to the 
                        attainment of age 18).
            (3) Effective date.--
                    (A) In general.--The modifications required by this 
                subsection shall apply to applicants for benefits for 
                months beginning 6 months after the date of the 
                enactment of this Act, without regard to whether 
                regulations have been issued to implement such 
                amendments.
                    (B) Continuing review.--The Commissioner of Social 
                Security shall review and report to the Congress not 
                later than 5 months after the date of the enactment of 
                this Act whether the required modifications described 
                in this subsection should be further modified.
    (c) Additional Review and Revision of Individualized Functional 
Assessment.--
            (1) In general.--The Commissioner of Social Security shall 
        review and revise the individual functional assessment for 
        children set forth in sections 416.924d and 416.924e of title 
        20, Code of Federal Regulations, to ensure that such assessment 
        is applied to children who--
                    (A) have multiple impairments, none of which meet 
                or equal the Listings of Impairments set forth in 
                appendix 1 of subpart P of part 404 of such title 20, 
                but which in combination result in the child being 
                disabled under section 1614(a)(3)(A)(ii) of the Social 
                Security Act, as added by subsection (a);
                    (B) are too young, or for other reasons, cannot be 
                fully evaluated;
                    (C) have physical or mental impairments or 
                illnesses which are not explicitly included in such 
                Listings; and
                    (D) have conditions which do not meet or equal the 
                severity of any such Listing, but meet the functional 
                test of severity under such section 1614(a)(3)(A)(ii).
            (2) Testing.--The Commissioner of Social Security shall 
        ensure that pursuant to the revised individual functional 
        assessment for children under paragraph (1)--
                    (A) valid and reliable tests are used, if 
                available, which provide qualitative and quantifiable 
                measures of childhood functioning, or
                    (B) criteria of childhood functioning are developed 
                which are equivalent to the findings of a standardized 
                test.
            (3) Applicability.--The Commissioner of Social Security 
        shall issue final regulations relating to the individual 
        functional assessment for children under paragraph (1) not 
        later than 6 months after the date of the enactment of this Act 
        and such regulations shall apply to applicants for benefits for 
        months beginning 6 months after such date.
    (d) Application to Current Beneficiaries.--Notwithstanding any 
other provision of law, if the Commissioner of Social Security 
determines that the eligibility of an individual who is a recipient of 
supplemental security income benefits under title XVI of the Social 
Security Act for the month in which the date of the enactment of this 
Act occurs is affected by the amendments made by, and provisions of, 
this section, the Commissioner shall, not later than 1 year after such 
date, provide for a continuing disability review with respect to such 
individual in accordance with the provisions of such title.

SEC. 704. BETTER TARGETING AND USE OF BENEFITS.

    (a) Prohibition on Coaching of Children To Obtain Benefits.--
            (1) In general.--Section 1632 (42 U.S.C. 1383a) is amended 
        by adding at the end the following new subsection:
    ``(c) In any case in which the court determines that a violation 
described in paragraph (1), (2), or (3) of subsection (a) includes--
            ``(1) any knowing and willful coaching of a child by a 
        parent or guardian to feign an impairment for the purposes of 
        gaining eligibility under this title, the court, in addition to 
        any penalty imposed under subsection (a), may require full 
        restitution of the benefit such child has received under this 
        title, plus up to $100 for each month the child received such 
        benefit; and
            ``(2) any attorney or legal representative, interpreter, or 
        social service worker knowingly and willfully causing a parent 
        or guardian to so coach a child, subsection (a) shall be 
        applied by substituting `$5000, plus $500 for each child 
        involved' for `$1,000'.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to actions occurring after the date of the 
        enactment of this Act.
    (b) Tightening of Representative Payee Requirements.--
            (1) Clarification of role.--Section 1631(a)(2)(B)(ii) (42 
        U.S.C. 1383(a)(2)(B)(ii)) is amended by striking ``and'' at the 
        end of subclause (II), by striking the period at the end of 
        subclause (IV) and inserting ``; and'', and by adding after 
        subclause (IV) the following new subclause:
            ``(V) advise such person through the notice of award of 
        benefits, and at such other times as the Commissioner of Social 
        Security deems appropriate, of specific examples of appropriate 
        expenditures of benefits under this title and the proper role 
        of a representative payee.''.
            (2) Documentation of expenditures required.--
                    (A) In general.--Subparagraph (C)(i) of section 
                1631(a)(2) (42 U.S.C. 1383(a)(2)) is amended to read as 
                follows:
    ``(C)(i) In any case where payment is made to a representative 
payee of an individual or spouse, the Commissioner of Social Security 
shall--
            ``(I) require such representative payee to document 
        expenditures and keep contemporaneous records of transactions 
        made using such payment;
            ``(II) establish a system of accountability monitoring 
        under which such representative payee shall report at least 
        annually with respect to the use of such payment; and
            ``(III) implement statistically valid procedures for 
        reviewing each such report in order to identify instances in 
        which such representative payee is not properly using such 
        payment.''.
                    (B) Conforming amendment with respect to parent 
                payees.--Clause (ii) of section 1631(a)(2)(C) (42 
                U.S.C. 1383(a)(2)(C)) is amended by striking ``Clause 
                (i)'' and inserting ``Subclauses (II) and (III) of 
                clause (i)''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to benefits paid after the date of the enactment of 
        this Act.
    (c) Graduated Benefits for Additional Children.--
            (1) In general.--Section 1611(b) (42 U.S.C. 1382(b)) is 
        amended by adding at the end the following new paragraph:
    ``(3) In the case of a family (other than a foster or group home) 
with more than 1 child eligible for a benefit under this title, the 
benefit under this title for each additional child (other than an 
adopted child with special needs (within the meaning of paragraphs (1) 
and (2) of section 473(c)) shall be determined under the following 
table:

``If the child is the:              The benefit is:
    2nd child......................
                                        85 percent of the otherwise 
                                                determined benefit
    3rd child......................
                                        65 percent of such benefit
    4th child......................
                                        45 percent of such benefit
    5th child......................
                                        35 percent of such benefit
    6th child......................
                                        25 percent of such benefit
    7th child or more..............
                                        $50 for each child.''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply to determinations made after the date of the 
        enactment of this Act.
    (d) Continuing Disability Reviews.--
            (1) Continuing disability reviews for certain children.--
        Section 1614(a)(3)(G) (42 U.S.C. 1382c(a)(3)(G)) is amended--
                    (A) by inserting ``(i)'' after ``(G)''; and
                    (B) by adding at the end the following:
    ``(ii)(I) Not less frequently than once every 7 years, the 
Commissioner of Social Security shall redetermine in accordance with 
paragraph (4) the eligibility for benefits under this title of each 
child who is eligible for benefits by reason of disability with respect 
to which medical improvement is not expected.
    ``(II) If a child has a disability with respect to which medical 
improvement is possible, subclause (I) shall be applied by substituting 
`3 years' for `7 years'.
    ``(III) If a child has a disability with respect to which medical 
improvement is expected subclause (I) shall be applied by substituting 
`year' for `7 years'.
    ``(IV) A parent or guardian of a recipient whose case is reviewed 
under this clause shall present, at the time of review, evidence 
demonstrating that the recipient is, and has been, receiving treatment, 
to the extent considered medically necessary and available, of the 
condition which was the basis for providing benefits under this 
title.''.
            (2) Disability review required for low birth weight babies 
        who have received ssi benefits for 12 months.--Section 
        1614(a)(3)(G) (42 U.S.C. 1382c(a)(3)(G)), as amended by 
        paragraph (1) of this subsection, is amended by adding at the 
        end the following:
    ``(iii)(I) The Commissioner of Social Security shall redetermine 
the eligibility for benefits under this title by reason of disability 
of a child whose low birth weight is a contributing factor material to 
the Commissioner's determination that the child is disabled.
    ``(II) The redetermination required by subclause (I) shall be 
conducted once the child has received such benefits for 12 months.
    ``(III) A redetermination under subclause (I) shall be considered a 
substitute for a review required under any other provision of this 
subparagraph.
    ``(IV) A parent or guardian of a recipient whose case is reviewed 
under this clause shall present, at the time of review, evidence 
demonstrating that the recipient is, and has been, receiving treatment, 
to the extent considered medically necessary and available, of the 
condition which was the basis for providing benefits under this 
title.''.
            (3) Disability review required for ssi recipients who are 
        18 years of age.--
                    (A) In general.--Section 1614(a)(3)(G) (42 U.S.C. 
                1382c(a)(3)(G)), as amended by paragraphs (1) and (2) 
                of this subsection, is amended by adding at the end the 
                following:
    ``(iv)(I) The Commissioner of Social Security shall redetermine the 
eligibility of a qualified individual for supplemental security income 
benefits under this title by reason of disability, by applying the 
criteria used in determining eligibility for such benefits of 
applicants who have attained 18 years of age.
    ``(II) The redetermination required by subclause (I) with respect 
to a qualified individual shall be conducted during the 1-year period 
that begins on the date the qualified individual attains 18 years of 
age.
    ``(III) As used in this clause, the term `qualified individual' 
means an individual who attains 18 years of age and for whom, for the 
month preceding the month in which the individual attained such age, a 
determination was in effect that the individual is eligible for 
benefits under this title by reason of disability.
    ``(IV) A redetermination under subclause (I) of this clause shall 
be considered a substitute for a review required under any other 
provision of this subparagraph.''.
                    (B) Report to the congress.--Not later than October 
                1, 1998, the Commissioner of Social Security shall 
                submit to the Committee on Ways and Means of the House 
                of Representatives and the Committee on Finance of the 
                Senate a report on the activities conducted under 
                section 1614(a)(3)(G)(iv) of the Social Security Act.
                    (C) Conforming repeal.--Section 207 of the Social 
                Security Independence and Program Improvements Act of 
                1994 (42 U.S.C. 1382 note; 108 Stat. 1516) is hereby 
                repealed.
            (4) Revolving fund.--The Secretary of the Treasury shall 
        pay into a revolving fund for each fiscal year an amount equal 
        to 50 percent of the savings resulting from the amendments made 
        by subsection (c) with respect to such fiscal year. Such fund 
        shall be available to the Commissioner of Social Security, 
        without regard to appropriation Acts and without fiscal year 
        limitation, to supplement funds otherwise made available for 
        disability reviews required by the amendments made by this 
        subsection.
            (5) Effective date.--The amendments made by this subsection 
        shall apply to benefits for months beginning after the date of 
        the enactment of this Act.

SEC. 705. ENCOURAGING MOVEMENT TOWARD INDEPENDENCE.

    (a) Dedicated Savings Accounts.--
            (1) In general.--Section 1631(a)(2)(B) (42 U.S.C. 
        1383(a)(2)(B)) is amended by adding at the end the following 
        new clause:
    ``(xiv) Notwithstanding clause (x), the Commissioner of Social 
Security may, at the request of the representative payee, pay any lump 
sum payment for the benefit of a child into a dedicated savings account 
that could only be used to purchase for such child--
            ``(I) education and job skills training;
            ``(II) special equipment or housing modifications or both 
        specifically related to, and required by the nature of, the 
        child's disability; and
            ``(III) appropriate therapy and rehabilitation.''.
            (2) Disregard of trust funds.--Section 1613(a) (42 U.S.C. 
        1382b) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (9),
                    (B) by striking the period at the end of paragraph 
                (10) the first place it appears and inserting a 
                semicolon,
                    (C) by redesignating paragraph (10) the second 
                place it appears as paragraph (11) and striking the 
                period at the end of such paragraph and inserting ``; 
                and'', and
                    (D) by inserting after paragraph (11), as so 
                redesignated, the following new paragraph:
            ``(12) all amounts deposited in, or interest credited to, a 
        dedicated savings account described in section 
        1631(a)(2)(B)(xiv).''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to payments made after the date of the enactment of 
        this Act.
    (b) Information and Referral System.--Section 1631 (42 U.S.C. 1383) 
is amended by redesignating subsection (n) (relating to notice 
requirements) as subsection (o) and by adding at the end the following 
new subsection:

             ``information and referral system for children

    ``(p) The Commissioner of Social Security shall establish or 
identify a system of information and referral for treatment and 
services available to children receiving benefits under this title 
under State and Federal programs.''.
            TITLE VIII--FINANCING AND FOOD ASSISTANCE REFORM

                    Subtitle A--Treatment of Aliens

SEC. 801. UNIFORM ALIEN ELIGIBILITY CRITERIA FOR PUBLIC ASSISTANCE 
              PROGRAMS.

    (a) Definition of ``Qualified Alien''.--
            (1) In general.--Section 1101(a) (42 U.S.C. 1301(a)) is 
        amended by adding at the end the following new paragraph:
            ``(10) The term `qualified alien' means an alien--
                    ``(A) who is lawfully admitted for permanent 
                residence within the meaning of section 101(a)(20) of 
                the Immigration and Nationality Act;
                    ``(B) who is admitted as a refugee pursuant to 
                section 207 of such Act;
                    ``(C) who is granted asylum pursuant to section 208 
                of such Act;
                    ``(D) whose deportation is withheld pursuant to 
                section 243(h) of such Act;
                    ``(E) whose deportation is suspended pursuant to 
                section 244 of such Act;
                    ``(F) who is granted conditional entry pursuant to 
                section 203(a)(7) of such Act as in effect prior to 
                April 1, 1980;
                    ``(G) who is lawfully admitted for temporary 
                residence pursuant to section 210 or 245A of such Act;
                    ``(H) who is within a class of aliens lawfully 
                present within the United States pursuant to any other 
                provision of such Act, if--
                            ``(i) the Attorney General determines that 
                        the continued presence of such class of aliens 
                        serves a humanitarian or other compelling 
                        public interest, and
                            ``(ii) the Secretary of Health and Human 
                        Services determines that such interest would be 
                        further served by treating each alien within 
                        such class as a `qualified alien' for purposes 
                        of this Act; or
                    ``(I)(i) who is the spouse, or unmarried child 
                under 21 years of age, of a citizen of the United 
                States, or
                    ``(ii)(I) who is the parent of a citizen of the 
                United States who is at least 21 years of age, and
                    ``(II) with respect to whom an application for 
                adjustment to lawful permanent residence is pending, 
                such status not having changed.''.
            (2) Conforming amendment.--Section 244A(f)(1) of the 
        Immigration and Nationality Act (8 U.S.C. 1254a(f)(1)) is 
        amended by inserting ``and shall not be considered to be a 
        qualified alien within the meaning of section 1101(a)(10) of 
        the Social Security Act'' before the semicolon.
    (b) Federal Assistance Programs.--
            (1) Supplemental security income.--Section 1614(a)(1)(B)(i) 
        (42 U.S.C. 1382c(a)(1)(B)(i)) is amended to read as follows:
                    ``(B)(i) is a resident of the United States, and is 
                either (I) a citizen or national of the United States, 
                or (II) a qualified alien (as defined in section 
                1101(a)(10)), or''.
            (2) Medicaid.--
                    (A) Eligibility limitation.--Section 1903(v)(1) (42 
                U.S.C. 1396b(v)(1)) is amended to read as follows:
    ``(v)(1) Notwithstanding the preceding provisions of this section 
and except as provided in paragraph (2)--
            ``(A) no payment may be made to a State under this section 
        for medical assistance furnished to an individual who is 
        disqualified from receiving such assistance by reason of 
        section 210(f) or 245A(h) of the Immigration and Nationality 
        Act (8 U.S.C. 1160(f) or 1155a(h)) or any other provision of 
        law, and
            ``(B) no such payment may be made for medical assistance 
        furnished to an individual unless such individual is--
                    ``(i) a citizen or national of the United States, 
                or
                    ``(ii) a qualified alien (as defined in section 
                1101(a)(10)).''.
                    (B) Conforming amendments.--
                            (i) Section 1903(v)(2) (42 U.S.C. 
                        1396b(v)(2)) is amended by striking ``alien'' 
                        each place it appears and inserting 
                        ``individual''.
                            (ii) Section 1902(a) (42 U.S.C. 1396a(a)) 
                        is amended in the last sentence by striking 
                        ``alien'' and all that follows to the end 
                        period and inserting ``individual who is not 
                        (A) a citizen or national of the United States, 
                        or (B) a qualified alien (as defined in section 
                        1101(a)(10)) only in accordance with section 
                        1903(v).''.
                            (iii) Section 1902(b)(3) (42 U.S.C. 
                        1396a(b)(3)) is amended by inserting ``or 
                        national'' after ``citizen''.
    (c) State and Local Programs.--A State or political subdivision 
thereof may provide that an alien is not eligible for any program of 
cash assistance based on need that is furnished by such State or 
political subdivision thereof for any month unless such alien is a 
qualified alien as defined in section 1101(a)(10) of the Social 
Security Act.

SEC. 802. EXTENSION OF DEEMING OF INCOME AND RESOURCES UNDER 
              TRANSITIONAL AID, SSI, AND FOOD STAMP PROGRAMS.

    (a) In General.--Except as provided in subsections (b) and (c), in 
applying sections 410 and 1621 of the Social Security Act and section 
5(i) of the Food Stamp Act of 1977, the period in which each respective 
section otherwise applies with respect to a qualified alien (as defined 
in section 1101(a)(10) of the Social Security Act shall be extended 
through the date (if any) on which the alien becomes a citizen of the 
United States pursuant to chapter 2 of title III of the Immigration and 
Nationality Act.
    (b) Exceptions.--Subsection (a) shall not apply to a qualified 
alien if--
            (1) the alien has been lawfully admitted to the United 
        States for permanent residence, has attained 75 years of age, 
        and has resided in the United States for at least 5 years;
            (2) the alien--
                    (A) is a veteran (as defined in section 101 of 
                title 38, United States Code) with a discharge 
                characterized as an honorable discharge,
                    (B) is on active duty (other than active duty for 
                training) in the Armed Forces of the United States, or
                    (C) is the spouse or unmarried dependent child of 
                an individual described in subparagraph (A) or (B);
            (3) the alien is the subject of domestic violence by the 
        alien's spouse and a divorce between the alien and the alien's 
        spouse has been initiated through the filing of an appropriate 
        action in an appropriate court;
            (4) there has been paid with respect to the self-employment 
        income or employment of the alien, or of a parent or spouse of 
        the alien, taxes under chapter 2 or chapter 21 of the Internal 
        Revenue Code of 1986 in each of 20 different calendar quarters; 
        or
            (5) the alien is unable because of physical or 
        developmental disability or mental impairment (including 
        Alzheimer's disease) to comply with the naturalization 
        requirements of section 312(a) of the Immigration and 
        Nationality Act.
    (c) Hold Harmless for Medicaid Eligibility.--Subsection (a) shall 
not apply with respect to a determination of eligibility for benefits 
under part A of title IV of the Social Security Act or under the 
supplemental security income program of title XVI of such Act to the 
extent such determinations provide for eligibility for medical 
assistance under title XIX of such Act.
    (d) State and Local Programs.--A State or political subdivision 
thereof may provide that an alien is not eligible for any program of 
cash assistance based on need that is furnished by such State or 
political subdivision thereof for any month if such alien has been 
determined to be ineligible for such month for benefits under--
            (1) the program under part A of title IV of the Social 
        Security Act;
            (2) the program of supplemental security income authorized 
        by title XVI of the Social Security Act; or
            (3) the Food Stamp Act of 1977;
as a result of this section.
    (e) Effective Date.--This section shall apply to benefits payable 
under the transitional aid program under part A of title IV of the 
Social Security Act, the program of supplemental security income 
authorized under title XVI of the Social Security Act, or the Food 
Stamp Act of 1977, for months beginning after September 30, 1995, on 
the basis of--
            (1) an application filed after such date, or
            (2) an application filed on or before such date by or on 
        behalf of an individual subject to the provisions of section 
        1621(a) or section 410(a) of the Social Security Act or section 
        5(i)(1) of the Food Stamp Act of 1977 (as the case may be) on 
        such date.

SEC. 803. REQUIREMENTS FOR SPONSOR'S AFFIDAVIT OF SUPPORT.

    (a) In General.--Section 213 of the Immigration and Nationality Act 
(8 U.S.C. 1183) is amended--
            (1) in the heading, by striking ``on giving bond'' and 
        inserting ``upon provision of bond or guarantee of financial 
        responsibility'';
            (2) by designating the existing matter as subsection (a); 
        and
            (3) by adding at the end the following new subsection:
    ``(b)(1) An alien excludable under section 212(a)(4) may, if 
otherwise admissible, be admitted in the discretion of the Attorney 
General upon a finding by the Attorney General that--
            ``(A) the alien has received a guarantee of financial 
        responsibility in such form as may be prescribed pursuant to 
        paragraph (4) and meets the conditions described in paragraph 
        (2); and
            ``(B) taking into consideration all relevant circumstances, 
        it is reasonable to expect that the sponsor, as defined in 
        paragraph (2)(A), has the financial capacity to meet the 
        obligations of the guarantee.
    ``(2) A guarantee of financial responsibility for an alien must--
            ``(A) be signed in the presence of an immigration officer 
        or consular officer (or in the presence of a notary public) by 
        an individual (referred to in this subsection as the `sponsor') 
        who is--
                    ``(i) 21 years of age or older;
                    ``(ii) of good moral character; and
                    ``(iii) a citizen of the United States or an alien 
                lawfully admitted for permanent residence domiciled in 
                any of the several States of the United States, the 
                District of Columbia, or any territory or possession of 
                the United States;
            ``(B) provide that the sponsor enters into a legally 
        binding commitment to furnish to or on behalf of the alien 
        financial support sufficient to meet the alien's basic 
        subsistence needs during the period that begins on the date 
        that the alien acquires the status of an alien lawfully 
        admitted for permanent residence and ends on the earlier of--
                    ``(i) the date the alien becomes a citizen of the 
                United States under chapter 2 of title III;
                    ``(ii) the first date the alien is a veteran (as 
                defined in section 101 of title 38, United States Code) 
                with a discharge characterized as an honorable 
                discharge;
                    ``(iii) the first date as of which there has been 
                paid with respect to the self-employment income or 
                employment of the alien, or of a parent or spouse of 
                the alien, taxes under chapter 2 or chapter 21 of the 
                Internal Revenue Code of 1986 in each of 20 different 
                calendar quarters; or
                    ``(iv) any period in which the alien is--
                            ``(I) on active duty (other than active 
                        duty for training) in the Armed Forces of the 
                        United States; or
                            ``(II) the spouse or unmarried dependent 
                        child of an individual described in clause (ii) 
                        or subclause (I) of this clause; and
            ``(C) contain the sponsor's authorization to the Internal 
        Revenue Service to disclose any tax return information 
        necessary to verify the sponsor's income to the extent 
        necessary to determine the eligibility for benefits under--
                    ``(i) the program under part A of title IV of the 
                Social Security Act;
                    ``(ii) the program of supplemental security income 
                authorized by title XVI of the Social Security Act; or
                    ``(iii) the Food Stamp Act of 1977,
        for an alien sponsored by the sponsor.
    ``(3) Any guarantee of financial support executed on behalf of an 
alien pursuant to this subsection--
            ``(A) must be enforceable against the sponsor; and
            ``(B) may be enforced against the sponsor in a civil suit 
        brought by the alien or by the Federal Government, any State, 
        district, territory, or possession of the United States, or any 
        political subdivision of such State, district, territory, or 
        possession of the United States, which provides benefits to the 
        alien in any court of competent jurisdiction.
    ``(4) The Secretary of State, the Attorney General, the Secretary 
of Health and Human Services, the Secretary of Agriculture, and the 
Commissioner of Social Security, shall jointly establish the form of 
the guarantee of financial support described in this section.''.
    (b) Date for Establishment of Form; Effective Date.--
            (1) Date for establishment.--The Secretary of State, the 
        Attorney General, the Secretary of Health and Human Services, 
        the Secretary of Agriculture, and the Commissioner of Social 
        Security shall establish a form for the guarantee of financial 
        support pursuant to section 213(b)(4) (as added by this 
        subsection) not later than 180 days after the date of the 
        enactment of this Act.
            (2) Effective date.--The amendments made by this subsection 
        shall apply to affidavits of support executed on or after a 
        date specified by the Attorney General, which date shall be not 
        earlier than 60 days (and not later than 90 days) after the 
        date the form
         for the guarantee of financial support is developed under 
section 213(b)(4) of the Immigration and Nationality Act (as added by 
this subsection).
    (c) Clerical Amendment.--The table of contents of the Immigration 
and Nationality Act is amended by amending the item relating to section 
213 to read as follows:

``Sec. 213. Admission of certain aliens upon provision of bond or 
                            guarantee of financial responsibility.''.
SEC. 804. EXTENDING REQUIREMENT FOR AFFIDAVITS OF SUPPORT TO FAMILY-
              RELATED AND DIVERSITY IMMIGRANTS.

    (a) In General.--Section 212(a)(4) of the Immigration and 
Nationality Act (8 U.S.C. 1182(a)(4)) is amended to read as follows:
            ``(4) Public charge and affidavits of support.--
                    ``(A) Public charge.--Any alien who, in the opinion 
                of the consular officer at the time of application for 
                a visa, or in the opinion of the Attorney General at 
                the time of application for admission or adjustment of 
                status, is likely at any time to become a public charge 
                is excludable.
                    ``(B) Affidavits of support.--Any immigrant who 
                seeks admission or adjustment of status as any of the 
                following is excludable unless there has been executed 
                with respect to the immigrant an affidavit of support 
                pursuant to section 213(b):
                            ``(i) As an immediate relative (under 
                        section 201(b)(2)).
                            ``(ii) As a family-sponsored immigrant 
                        under section 203(a) (or as the spouse or child 
                        under section 203(d) of such immigrant).
                            ``(iii) As the spouse or child (under 
                        section 203(d)) of an employment-based 
                        immigrant under section 203(b).
                            ``(iv) As a diversity immigrant under 
                        section 203(c) (or as the spouse or child under 
                        section 203(d) of such an immigrant).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to aliens with respect to whom an immigrant visa is issued (or 
adjustment of status is granted) after the date specified by the 
Attorney General under section 803(b)(2).

                     Subtitle B--Revenue Provision

SEC. 811. EARNED INCOME TAX CREDIT DENIED TO INDIVIDUALS NOT AUTHORIZED 
              TO BE EMPLOYED IN THE UNITED STATES.

    (a) In General.--Section 32(c)(1) of the Internal Revenue Code of 
1986 (relating to individuals eligible to claim the earned income tax 
credit) is amended by adding at the end the following new subparagraph:
                    ``(F) Identification number requirement.--The term 
                `eligible individual' does not include any individual 
                who does not include on the return of tax for the 
                taxable year--
                            ``(i) such individual's taxpayer 
                        identification number, and
                            ``(ii) if the individual is married (within 
                        the meaning of section 7703), the taxpayer 
                        identification number of such individual's 
                        spouse.''
    (b) Special Identification Number.--Section 32 of such Code is 
amended by adding at the end the following new subsection:
    ``(k) Identification Numbers.--Solely for purposes of subsections 
(c)(1)(F) and (c)(3)(D), a taxpayer identification number means a 
social security number issued to an individual by the Social Security 
Administration (other than a social security number issued pursuant to 
clause (II) (or that portion of clause (III) that relates to clause 
(II)) of section 205(c)(2)(B)(i) of the Social Security Act).''
    (c) Extension of Procedures Applicable to Mathematical or Clerical 
Errors.--Section 6213(g)(2) of such Code (relating to the definition of 
mathematical or clerical errors) is amended by striking ``and'' at the 
end of subparagraph (D), by striking the period at the end of 
subparagraph (E) and inserting ``, and'', and by inserting after 
subparagraph (E) the following new subparagraph:
                    ``(F) an omission of a correct taxpayer 
                identification number required under section 32 
                (relating to the earned income tax credit) to be 
                included on a return.''
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 1995.

                 Subtitle C--Food Assistance Provisions

SEC. 821. MANDATORY CLAIMS COLLECTION METHODS.

    (a) Section 11(e)(8) of the Food Stamp Act of 1977 (7 U.S.C. 
2020(e)(8)) is amended by inserting ``or refunds of Federal taxes as 
authorized pursuant to section 3720A of title 31, United States Code'' 
before the semicolon at the end.
    (b) Section 13(d) of the Food Stamp Act of 1977 (7 U.S.C. 2022(d)) 
is amended--
            (1) by striking ``may'' and inserting ``shall''; and
            (2) by inserting ``or refunds of Federal taxes as 
        authorized pursuant to section 3720A of title 31, United States 
        Code'' before the period at the end.
    (c) Section 6103(l) of the Internal Revenue Code of 1986 (26 U.S.C. 
6103(l)) is amended--
            (1) by striking ``officers and employees'' in paragraph 
        (10)(A) and inserting ``officers, employees or agents, 
        including State agencies''; and
            (2) by striking ``officers and employees'' in paragraph 
        (10)(B) and inserting ``officers, employees or agents, 
        including State agencies''.

SEC. 822. REDUCTION OF BASIC BENEFIT LEVEL.

    The second sentence of section 3(o) of the Food Stamp Act of 1977 
(7 U.S.C. 2012(o)) is amended--
            (1) by striking ``and (11)'' and inserting ``(11)'';
            (2) in paragraph (11), by inserting ``through October 1, 
        1994'' after ``each October 1 thereafter''; and
            (3) by inserting before the period at the end the 
        following: ``, and (12) on October 1, 1995, and on each October 
        1 thereafter, adjust the cost of such diet to reflect 100 
        percent of the cost, in the preceding June (without regard to 
        any previous adjustment made under this paragraph or paragraphs 
        (4) through (11)) and round the result to the nearest lower 
        dollar increment for each household size''.

SEC. 823. PRORATING BENEFITS AFTER INTERRUPTIONS IN PARTICIPATION.

    Section 8(c)(2)(B) of the Food Stamp Act of 1977 (7 U.S.C. 
2017(c)(2)(B)) is amended by striking ``of more than one month''.

SEC. 824. WORK REQUIREMENT FOR ABLE-BODIED RECIPIENTS.

    (a) Work Requirement.--Section 6(d) of the Food Stamp Act of 1977 
(7 U.S.C. 2015(d)) is amended by adding at the end the following:
    ``(5)(A) Except as provided in subparagraphs (B), (C), and (D), an 
individual who has received an allotment for 6 consecutive months 
during which such individual has not been employed a minimum of an 
average of 20 hours per week shall be disqualified if such individual 
is not employed at least an average of 20 hours per week, participating 
in a workfare program under section 20 (or a comparable State or local 
workfare program), or participating in and complying with the 
requirements of an approved employment and training program under 
paragraph (4).
    ``(B) The provisions of subparagraph (A) shall not apply in the 
case of an individual who--
            ``(i) is under 18 or over 50 years of age;
            ``(ii) is certified by a physician as physically or 
        mentally unfit for employment;
            ``(iii) is a parent or other member of a household that 
        includes a minor child;
            ``(iv) is participating a minimum of an average of 20 hours 
        per week and is in compliance with the requirements of--
                    ``(I) a program under the Job Training Partnership 
                Act (29 U.S.C. 1501 et seq.);
                    ``(II) a program under section 236 of the Trade Act 
                of 1974 (19 U.S.C. 2296); or
                    ``(III) another program for the purpose of 
                employment and training operated by a State or local 
                government, as determined appropriate by the Secretary; 
                or
            ``(v) would otherwise be exempt under paragraph (2).
    ``(C) The Secretary may waive the requirements of subparagraph (A) 
in the case of some or all individuals within all or part of a State if 
the Secretary finds that such area--
            ``(i) has an unemployment rate of over 7 percent; or
            ``(ii) does not have a sufficient number of jobs to provide 
        employment for individuals subject to this paragraph.
The Secretary shall report to the Committee on Agriculture of the House 
of Representatives and the Committee on Agriculture, Nutrition, and 
Forestry of the Senate on the basis on which the Secretary made this 
decision.
    ``(D) An individual who has been disqualified from the food stamp 
program by reason of subparagraph (A) may reestablish eligibility for 
assistance--
            ``(i) by meeting the requirements of subparagraph (A);
            ``(ii) by becoming exempt under subparagraph (B); or
            ``(iii) if the Secretary grants a waiver under subparagraph 
        (C).
    ``(E) A household (as defined in section 3(i)) that includes an 
individual who is not exempt under paragraph (2) and who refuses to 
work, refuses to look for work, turns down a job, or refuses to 
participate in the State program if the State places the individual in 
such program shall be ineligible to receive food stamp benefits. The 
State agency shall reduce, by such amount the State considers 
appropriate, the amount otherwise payable to a household that includes 
an individual who fails without good cause to comply with other 
requirements of the WAGE Plan signed by the individual.
    ``(F) The State agency shall make an initial assessment of the 
skills, prior work experience, and employability of each participant 
not exempted under subparagraph (B) within 6 months of initial 
certification. The State agency shall use such assessment, in 
consultation with the program participant, to develop a WAGE Plan for 
the participant. Such plan--
            ``(i) shall provide that participation in food stamp 
        employment and training activities shall be a condition of 
        eligibility for food stamp benefits, except during any period 
        during which the individual is employed in full-time 
        unsubsidized employment in the private sector;
            ``(ii) shall establish an employment goal and a plan for 
        moving the individual into private sector employment 
        immediately;
            ``(iii) shall establish the obligations of the individual, 
        which shall include actions that will help the
         individual obtain and keep private sector employment; and
            ``(iv) may require that the individual enter the State 
        program approved under part F of title IV of the Social 
        Security Act if the caseworker determines that the individual 
        will need education, training, job placement assistance, wage 
        enhancement, or other services to obtain private sector 
        employment.''.
    (b) Enhanced Employment and Training Program.--Section 16(h)(1) of 
the Food Stamp Act of 1977 (7 U.S.C. 2025 (h)(1)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``$75,000,000'' and inserting 
                ``$150,000,000''; and
                    (B) by striking ``1991 through 1995'' and inserting 
                ``1996 through 2000'';
            (2) by striking subparagraphs (B), (C), (E) and (F) and 
        redesignating subparagraph (D) as subparagraph (B); and
            (3) in subparagraph (B) (as so redesignated), by striking 
        ``for each'' and all that follows through ``of $60,000,000'' 
        and inserting ``the Secretary shall allocate funding''.
    (c) Required Participation in Work and Training Programs.--Section 
6(d)(4) of the Food Stamp Act of 1977 (7 U.S.C. 2015(d)(4)) is amended 
by adding at the end the following:
    ``(O) The State agency shall provide an opportunity to participate 
in the employment and training program under this paragraph to any 
individual who would otherwise become subject to disqualification under 
paragraph (5)(A).''.
    (d) Coordinating Work Requirements in Transitional Aid and Food 
Stamp Programs.--Section 6(d)(4) of the Food Stamp Act of 1977 (7 
U.S.C. 2015(d)(4)), as amended by subsection (c), is amended by adding 
at the end the following:
    ``(P)(i) Notwithstanding any other provision of this paragraph, a 
State agency that meets the participation requirements of clause (ii) 
may operate the employment and training program of the State for 
individuals who are members of households receiving allotments under 
this Act as part of its WAGE Program under part F of title IV of the 
Social Security Act (42 U.S.C. 681 et seq.), except that sections 
487(b) and 489(a)(4) shall not apply to any month during which the 
individual participates in such program while not receiving income 
under part A of subtitle IV of the Social Security Act (42 U.S.C. 601 
et seq.). If a State agency exercises the option provided under this 
clause, the operation of the program shall be subject to the 
requirements of such part F, except that any reference to `transitional 
aid to families with needy children' in such part shall be deemed a 
reference to food stamp allotments for purposes of any person not 
receiving income under such part A.
    ``(ii) A State agency may exercise the option provided under clause 
(i) if the State agency provides an individual who is subject to the 
requirements of paragraph (5) who is not employed at least an average 
of 20 hours per week or participating in a workfare program under 
section 20 (or a comparable State or local program) with the 
opportunity to participate in an approved employment and training 
program. A State agency shall be considered to have complied with the 
requirements of this subparagraph in any area for which a waiver under 
paragraph (5)(4)(C) is in effect.''.

SEC. 825. EXTENDING CURRENT CLAIMS RETENTION RATES.

    Section 16(a) of the Food Stamp Act of 1977 (7 U.S.C. 2025(a)) is 
amended by striking ``September 30, 1995'' each place it appears and 
inserting ``September 30, 2002''.

SEC. 826. TWO-YEAR FREEZE OF STANDARD DEDUCTION.

    Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 2014(e)) is 
amended in the second sentence by inserting ``except October 1, 1995 
and October 1, 1996'' after ``thereafter''.

SEC. 827. NUTRITION ASSISTANCE FOR PUERTO RICO.

    Section 19(a)(1)(A) of the Food Stamp Act of 1977 (7 U.S.C. 
2028(a)(1)(A)) is amended--
            (1) by striking ``1994, and'' and inserting ``1994,''; and
            (2) by inserting ``and $1,143,000,000 for fiscal year 
        1996,'' before ``to finance''.

SEC. 828. REPEAL OF SPECIAL RULE FOR PERSONS WHO DO NOT PURCHASE AND 
              PREPARE FOOD SEPARATELY.

    (a) Repealer.--Section 3(i) of the Food Stamp Act of 1977 (7 U.S.C. 
2012(i)) is amended by striking the third sentence.
    (b) Conforming Amendment.--Section 5(a) of the Food Stamp Act of 
1977 (7 U.S.C. 2014(a)) is amended by striking ``, 16(e)(1), and the 
third sentence of section 3(i)'' and inserting ``and 16(e)(1)''.

SEC. 829. EARNINGS OF CERTAIN HIGH SCHOOL STUDENTS COUNTED AS INCOME.

    Section 5(d)(7) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)(7)) 
is amended by striking ``21'' and inserting ``18''.
SEC. 830. ENERGY ASSISTANCE COUNTED AS INCOME.

    (a) Limiting Exclusion.--Section 5(d)(11) of the Food Stamp Act of 
1977 (7 U.S.C. 2014(d)(11)) is amended--
            (1) by striking ``(A) under any Federal law, or (B)''; and
            (2) by inserting before the comma at the end the following: 
        ``, except that no benefits provided under the State program 
        under part A of title IV of the Social Security Act (42 U.S.C. 
        601 et seq.) shall be excluded under this clause''.
    (b) Conforming Amendments.--
            (1) Section 5(e) of the Food Stamp Act of 1977 (7 U.S.C. 
        2014(e)) is amended by striking sentences nine through twelve.
            (2) Section 5(k)(2) of the Food Stamp Act of 1977 (7 U.S.C. 
        2014(k)(2)) is amended by striking subparagraph (C) and 
        redesignating subparagraphs (D) through (H) as subparagraphs 
        (C) through (G), respectively.

SEC. 831. VENDOR PAYMENTS FOR TRANSITIONAL HOUSING COUNTED AS INCOME.

    Section 5(k)(2) of the Food Stamp Act of 1977 (7 U.S.C. 
2014(k)(2)), as amended by section 830(b)(2), is amended--
            (1) by striking subparagraph (F); and
            (2) by redesignating subparagraphs (G) and (H) as 
        subparagraphs (F) and (G), respectively.

SEC. 832. DENIAL OF FOOD STAMP BENEFITS FOR 10 YEARS TO CERTAIN 
              INDIVIDUALS FOUND TO HAVE FRAUDULENTLY MISREPRESENTED 
              RESIDENCE TO OBTAIN BENEFITS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015) is amended 
by adding at the end the following:
    ``(i) An individual shall be ineligible to participate in the food 
stamp program as a member of any household during the 10-year period 
beginning on the date the individual is found by a State to have made, 
or is convicted in Federal or State court of having made, a fraudulent 
statement or representation with respect to the place of residence of 
the individual in order to receive benefits simultaneously from 2 or 
more States under the food stamp program or under programs that are 
funded under part A of title IV of the Social Security Act (42 U.S.C. 
601 et seq.), under title XIX of such Act (42 U.S.C. 1396 et seq.), or 
under the supplemental security income program under title XVI of such 
Act (42 U.S.C. 1381 et seq.).''.

SEC. 833. DISQUALIFICATION RELATING TO CHILD SUPPORT ARREARS.

    Section 6 of the Food Stamp Act of 1977 (7 U.S.C. 2015), as amended 
by section 833, is amended by adding at the end the following:
    ``(j) A State plan under section 11 may provide that no individual 
is eligible to participate in the food stamp program as a member of any 
household during any period such individual has a payment overdue that 
is both--
            ``(1) under a court order for the support of a child of 
        such individual; and
            ``(2) not included in a payment plan approved by a court or 
        the State agency designated under part D of title IV of the 
        Social Security Act (42 U.S.C. 651 et seq.) with which the 
        individual is in current compliance.''.

SEC. 834. LIMITING ADJUSTMENT OF MINIMUM BENEFIT.

    Section 8(a) of the Food Stamp Act of 1977 (7 U.S.C. 2017(a)) is 
amended by striking ``nearest $5'' and inserting ``nearest $10''.

SEC. 835. PENALTY FOR FAILURE TO COMPLY WITH WORK REQUIREMENTS OF OTHER 
              PROGRAMS.

    Section 8(d) of the Food Stamp Act of 1977 (7 U.S.C. 2017(d)) is 
amended--
            (1) by inserting ``or any work requirement under such 
        program'' after ``assistance program''; and
            (2) by inserting at the end ``The State agency may impose 
        the same penalty on a household for such failure to comply with 
        a work requirement in the program under part A of title IV of 
        the Social Security Act (42 U.S.C. 601 et seq.) that is imposed 
        under such part.''

SEC. 836. RESUMPTION OF DISCRETIONARY FUNDING FOR NUTRITION EDUCATION 
              AND TRAINING PROGRAM.

    Section 19(i)(2)(A) of the Child Nutrition Act of 1966 (42 U.S.C. 
1788(i)(2)(A)) is amended--
            (1) by striking ``Out of'' and all that follows through 
        ``and $10,000,000'' and inserting ``To carry out the provisions 
        of this section, there is hereby authorized to be appropriated 
        not to exceed $10,000,000''; and
            (2) by striking the last sentence.
SEC. 837. IMPROVEMENT OF CHILD AND ADULT CARE FOOD PROGRAM OPERATED 
              UNDER THE NATIONAL SCHOOL LUNCH ACT.

    (a) In General.--Section 17(f)(3)(A) of the National School Lunch 
Act (42 U.S.C. 1766(f)(3)(A)) is amended to read as follows:
    ``(A)(i) Institutions that participate in the program under this 
section as family or group day care home sponsoring organizations shall 
be provided, for payment to such homes, the reimbursement factors in 
accordance with this subparagraph for the cost of obtaining and 
preparing food and prescribed labor costs, involved in providing meals 
under this section.
    ``(ii)(I) A low- or moderate-income family or group day care home 
shall be provided the reimbursement factors without a requirement for 
documentation of the costs described in clause (i), except that 
reimbursement shall not be provided under this subparagraph for meals 
or supplements served to the children of a person acting as a family or 
group day care home provider unless such children meet the eligibility 
standards for free or reduced price meals under section 9 of this Act. 
The reimbursement factors applied to such a home shall be the factors 
in effect on the date of the enactment of the Work and Gainful 
Employment Act. The reimbursement factors under this subparagraph shall 
be adjusted on July 1 of each year to reflect changes in the Consumer 
Price Index for food away from home for the most recent 12-month period 
for which such data are available. The reimbursement factors under this 
subparagraph shall be rounded to the nearest one-fourth cent.
    ``(II) For purposes of this clause, the term `low- or moderate-
income family or group day care home' means--
            ``(aa) a family or group day care home that is located in a 
        census tract area in which at least 50 percent of the children 
        residing in such area are members of households whose incomes 
        meet the eligibility standards for free or reduced price meals 
        under section 9 of this Act, as determined by the family or 
        group day care home sponsoring organization using census tract 
        data provided to such organization by the State agency in 
        accordance with subparagraph (B)(i);
            ``(bb) a family or group day care home that is located in 
        an area served by a school in which at least 50 percent of the 
        total number of children enrolled are certified to receive free 
        or reduced price meals under this Act or the Child Nutrition 
        Act of 1966 (42 U.S.C. 1771 et seq.), as determined by the 
        family or group day care home sponsoring organization using 
        data provided to such organization by the State agency in 
        accordance with subparagraph (B)(ii); or
            ``(cc) a family or group day care home that is operated by 
        a provider whose household meets the eligibility standards for 
        free or reduced price meals under section 9 of this Act.
    ``(iii)(I) Except as provided for in subclause (II), with respect 
to meals or supplements served under this clause by a family or group 
day care home that does not meet the criteria set forth in clause 
(ii)(II), the reimbursement factors shall be--
            ``(aa) $1.00 for lunches and suppers;
            ``(bb) $.40 for breakfasts; and
            ``(cc) $.20 for supplements.
Such factors shall be adjusted on July 1, 1997, and each July 1 
thereafter to reflect changes in the Consumer Price Index for food away 
from home for the most recent 12-month period for which such data are 
available. The reimbursement factors under this clause shall be rounded 
to the nearest one-fourth cent. A family or group day care home shall 
be provided a reimbursement factor under this subclause without a 
requirement for documentation of the costs described in clause (i), 
except that reimbursement shall not be provided under this clause for 
meals or supplements served to the children of a person acting as a 
family or group day care home provider unless such children meet the 
eligibility standards for free or reduced price meals under section 9 
of this Act.
    ``(II) A family or group day care home that does not meet the 
criteria set forth in clause (ii)(II), may elect to be provided a 
reimbursement factor determined in accordance with the following 
requirements:
            ``(aa) With respect to meals or supplements served under 
        this subsection to children who are members of households whose 
        incomes meet the eligibility standards for free or reduced 
        price meals under section 9 of this Act, the family or group 
        day care home shall be provided reimbursement factors set by 
        the Secretary in accordance with subclause (ii)(I).
            ``(bb) With respect to meals or supplements served under 
        this subsection to children who are members of households whose 
        incomes do not meet such eligibility standards, the family or 
        group day care home shall be provided a reimbursement factor in 
        accordance with subclause (I).
    ``(III) A family or group day care home electing to use the 
procedures under subclause (II) may consider a child with a parent 
participating in the WAGE program established under part F of title IV 
of the Social Security Act or a State child care program with an income 
eligibility limit that does not exceed the eligibility standard for 
free or reduced price meals under section 9 of this Act, to be a child 
who is a member of a household whose income meets the eligibility 
standards under section 9 of this Act. A family or group day care home 
may elect to receive the reimbursement factors prescribed under clause 
(ii)(I) solely for such children if it does not wish to have income 
statements collected from parents.
    ``(IV) The Secretary shall prescribe simplified meal counting and 
reporting procedures for use by family and group day care homes that 
elect to use the procedures under subclause (II) and by family and 
group day care home sponsoring organizations that serve such homes. 
Such procedures may include the following:
            ``(aa) Setting an annual percentage for each such home of 
        the number of meals served that are to be reimbursed in 
        accordance with the reimbursement factors prescribed under 
        clause (ii)(I) and an annual percentage of the number of meals 
        served that are to be reimbursed in accordance with the 
        reimbursement factors prescribed under clause (ii)(I), based on 
        the incomes of children enrolled in the home in a specified 
        month or other period.
            ``(bb) Setting blended reimbursement factors for a home 
        annually based on the incomes of children enrolled in the home 
        in a specified month or period.
            ``(cc) Placing a home into one of several reimbursement 
        categories annually based on the percentage of children in the 
        home whose households have incomes that meet the eligibility 
        standards under section 9 of this Act.
            ``(dd) Such other simplified procedures as the Secretary 
        may prescribe.''.
    (b) Provision of Data to Family or Group Day Care Homes.--Section 
17(f)(3) of such Act (42 U.S.C. 1766(f)(3)) is amended--
            (1) by redesignating subparagraphs (B) and (C) as 
        subparagraphs (D) and (E), respectively; and
            (2) by inserting after subparagraph (A) (as amended by 
        subsection (a)) the following new subparagraph:
    ``(B)(i) The Secretary shall provide to each State agency 
administering a child and adult care food program under this section 
data from the most recent decennial census for which such data are 
available showing which census tracts in the State meet the 
requirements of subparagraph (A)(ii)(II)(aa). The State agency shall 
provide such data to family or group day care home sponsoring 
organizations located in the State.
    ``(ii) Each State agency administering a child and adult care food 
program under this section shall annually provide to family or group 
day care home sponsoring organizations located in the State a list of 
all schools in the State in which at least 50 percent of the children 
are enrolled and certified to receive free or reduced price meals under 
this Act or the Child Nutrition Act of 1966 (42 U.S.C. 1771 et seq.). 
The Secretary shall direct State agencies administering the school 
lunch program under this Act and the school breakfast program under the 
Child Nutrition Act of 1966 to collect this information annually and to 
provide it on a timely basis to the State agency administering the 
program under this section.''.
    (c) Grants to States To Provide Assistance to Family or Group Day 
Care Homes.--Section 17(f)(3) of such Act (42 U.S.C. 1766(f)(3)) is 
amended by inserting after subparagraph (B) (as added by subsection 
(b)(2)) the following new subparagraph:
    ``(C)(i) From amounts appropriated to carry out this section, the 
Secretary shall reserve $2,000,000 in fiscal year 1996 and $5,000,000 
in fiscal year 1997 to provide grants to States for the purpose of 
providing grants to family and day care home sponsoring organizations 
and other appropriate organizations to secure and provide training, 
materials, automated data processing assistance, and other assistance 
for the staff of such sponsoring organizations and for family and group 
day care homes in order to assist in the implementation of the 
requirements contained in subparagraph (A).
    ``(ii) From amounts appropriated to carry out this section, the 
Secretary shall reserve $5,000,000 in fiscal year 1998 and in each 
fiscal year thereafter to provide grants to States for the purpose of 
making grants to family or group day care home sponsoring organizations 
and other appropriate organizations to assist low- or moderate-income 
family or group day care homes (as such term is defined in subparagraph 
(A)(ii)(II)) to become licensed or registered for the program under 
this section or overcome other barriers to the program.''.
    (d) Effective Dates.--
            (1) In general.--The amendments made by subsections (a) and 
        (b) shall take effect on July 1, 1996.
            (2) Grants to states.--The amendment made by subsection (c) 
        shall take effect on the date of the enactment of this Act.
                Subtitle D--Supplemental Security Income

SEC. 841. VERIFICATION OF ELIGIBILITY FOR CERTAIN SSI DISABILITY 
              BENEFITS.

    Section 1631 (42 U.S.C. 1383) is amended by adding at the end the 
following new subsection:
    ``(o)(1) Notwithstanding any other provision of law, if the 
Commissioner of Social Security determines that an individual, who is 
18 years of age or older, is eligible to receive benefits pursuant to 
section 1614(a)(3), the Commissioner shall, at the time of the 
determination, either exempt the individual from an eligibility review 
or establish a schedule for reviewing the individual's continuing 
eligibility in accordance with paragraph (2).
    ``(2)(A) The Commissioner shall establish a periodic review with 
respect to the continuing eligibility of an individual to receive 
benefits, unless the individual is exempt from review under 
subparagraph (C) or is subject to a scheduled review under subparagraph 
(B). A periodic review under this subparagraph shall be initiated by 
the Commissioner not later than 30 months after the date a 
determination is made that the individual is eligible for benefits and 
every 30 months thereafter, unless a waiver is granted under section 
221(i)(2). However, the Commissioner shall not postpone the initiation 
of a periodic review for more than 12 months in any case in which such 
waiver has been granted unless exigent circumstances require such 
postponement.
    ``(B)(i) In the case of an individual, other than an individual who 
is exempt from review under subparagraph (C) or with respect to whom 
subparagraph (A) applies, the Commissioner shall schedule a review 
regarding the individual's continuing eligibility to receive benefits 
at any time the Commissioner determines, based on the evidence 
available, that there is a significant possibility that the individual 
may cease to be entitled to such benefits.
    ``(ii) The Commissioner may establish classifications of 
individuals for whom a review of continuing eligibility is scheduled 
based on the impairments that are the basis for such individuals' 
eligibility for benefits. A review of an individual covered by a 
classification shall be scheduled in accordance with the applicable 
classification, unless the Commissioner determines that applying such 
schedule is inconsistent with the purpose of this Act or the integrity 
of the supplemental security income program.
    ``(C)(i) The Commissioner may exempt an individual from review 
under this subsection, if the individual's eligibility for benefits is 
based on a condition that, as a practical matter, has no substantial 
likelihood of improving to a point where the individual will be able to 
perform substantial gainful activity.
    ``(ii) The Commissioner may establish classifications of 
individuals who are exempt from review under this subsection based on 
the impairments that are the basis for such individuals' eligibility 
for benefits. Notwithstanding any such classification, the Commissioner 
may, at the time of determining an individual's eligibility, schedule a 
review of such individual's continuing eligibility if the Commissioner 
determines that a review is necessary to preserve the integrity of the 
supplemental security income program.
    ``(3) The Commissioner may revise a determination made under 
paragraph (1) and schedule a review under paragraph (2)(B), if the 
Commissioner obtains credible evidence that an individual may no longer 
be eligible for benefits or the Commissioner determines that a review 
is necessary to maintain the integrity of the supplemental security 
income program. Information obtained under section 1137 may be used as 
the basis to schedule a review.
    ``(4)(i) The requirements of sections 1614(a)(4) and 1633 shall 
apply to reviews conducted under this subsection.
    ``(ii) Such reviews may be conducted by the applicable State agency 
or the Commissioner, whichever is appropriate.''.
SEC. 842. NONPAYMENT OF SSI DISABILITY BENEFITS TO SUBSTANCE ABUSERS.

    (a) In General.--Section 1614(a)(3) (42 U.S.C. 1382c(a)(3)) is 
amended by adding at the end the following new subparagraph:
                    ``(I) Notwithstanding subparagraph (A), an 
                individual shall not be considered disabled for 
                purposes of this title if alcoholism or drug addiction 
                would (but for this subparagraph) be a contributing 
                factor material to the Commissioner's determination 
                that the individual is disabled.''.
    (b) Additional Eligibility Requirements.--Section 1611(e)(3)(A) (42 
U.S.C. 1382(e)(3)(A)) is amended--
            (1) in clause (i), by striking subclause (I) and inserting 
        the following new subclause:
                                    ``(I) In the case of any individual 
                                who is eligible for benefits under this 
                                title by reason of disability for the 
                                month in which the Work and Gainful 
                                Employment Act becomes effective, whose 
                                alcoholism or drug addiction was a 
                                contributing factor material to the 
                                Commissioner's determination that such 
                                individual is disabled, whose benefits 
                                are terminated as a result of section 
                                1614(a)(3)(I), and who subsequently 
                                becomes re-eligible for benefits under 
                                this title based on a disability, such 
                                individual shall comply with the 
                                provisions of this subparagraph. In any 
                                case in which an individual is required 
                                to comply with the provisions of this 
                                subparagraph, the Commissioner shall 
                                include in the individual's 
                                notification of such eligibility a 
                                notice informing the individual of such 
                                requirement.''; and
            (2) in clause (vi)--
                    (A) in subclause (I), by striking ``who is eligible 
                for benefits'' through ``is disabled,'' and inserting 
                ``described in clause (i),'';
                    (B) in subclause (V), by striking ``or (v)''; and
                    (C) by redesignating clause (vi) as clause (v).
    (c) Conforming Amendments.--
            (1) Section 1611(e)(3)(B)(iii)(II)(aa) (42 U.S.C. 
        1382(e)(3)(B)(iii)(II)(aa)) is amended by striking ``with 
        respect to whom'' through ``they are disabled'' and inserting 
        ``described in subparagraph (A)(i)''.
            (2) Section 201(b)(3) of the Social Security Independence 
        and Program Improvements Act of 1994 (42 U.S.C. 425 note) is 
        amended by striking subparagraph (C).
    (d) Medicaid Benefits.--Section 1634(e) (42 U.S.C. 1383c(e)) is 
amended--
            (1) by striking ``or (v)'';
            (2) by inserting ``(1)'' after ``(e)''; and
            (3) by inserting at the end thereof:
            ``(2) Each person who is eligible for benefits under this 
        title by reason of disability for the month in which the Work 
        and Gainful Employment Act becomes effective and whose benefits 
        are terminated as a result of section 1614(a)(3)(I) shall be 
        deemed to be receiving such benefits for purposes of title 
        XIX.''.
    (e) Payment of Benefits to Representative Payees.--
            (1) Section 1631(a)(2)(A)(ii)(II) (42 U.S.C. 
        1383(a)(2)(A)(ii)(II)) is amended to read as follows:
                                    ``(II) In the case of an indi- 
                                vidual described in section 
                                1611(e)(3)(A)(i)(I), the payment of 
                                benefits under this title by reason of 
                                disability to a representative payee 
                                shall be deemed to serve the interest 
                                of the individual under this title. In 
                                any case in which payment is so deemed 
                                under this subclause to serve the 
                                interest of an individual, the 
                                Commissioner shall include, in the 
                                individual's notification of such 
                                eligibility, a notice that the 
                                Commissioner is required by the Social 
                                Security Act to pay the individual's 
                                benefits to a representative payee.''.
            (2) Section 1631(a)(2)(B)(vii) (42 U.S.C. 
        1383(a)(2)(B)(vii)) is amended by striking ``, if alcoholism'' 
        through ``individual is disabled'' and inserting in lieu 
        thereof ``who is described in section 1611(e)(3)(A)(i)(I)''.
            (3) Section 1631(a)(2)(D)(i)(II) (42 U.S.C. 
        1383(a)(2)(D)(i)(II)) is amended by striking ``alcoholism or 
        drug addiction is a contributing factor material to the 
        Commissioner's determination that the individual is disabled'' 
        and inserting ``who is described in section 
        1611(e)(3)(A)(i)(I)''.

            TITLE IX--LEGISLATIVE PROPOSALS; EFFECTIVE DATE

SEC. 901. SECRETARIAL SUBMISSION.

    The Secretary of Health and Human Services shall, within 90 days 
after the date of the enactment of this Act, submit to the appropriate 
committees of the Congress, a legislative proposal providing such 
technical and conforming amendments in the law as are required by the 
provisions of this Act.

SEC. 902. EFFECTIVE DATE.

    (a) In General.--Except as otherwise specifically provided in this 
Act, this Act and the amendments made by this shall be effective with 
respect to calendar quarters beginning on or after October 1, 1995.
    (b) Special Rule.--In the case of a State that the Secretary of 
Health and Human Services determines requires State legislation (other 
than legislation appropriating funds) in order to meet the additional 
requirements imposed by this Act or the amendments made by this Act, 
the State shall not be regarded as failing to comply with such 
requirements before the first day of the first calendar quarter 
beginning after the close of the first regular session of the State 
legislature that begins after the date of the enactment of this Act. 
For purposes of this subsection, in the case of a State that has a 2-
year legislative session, each year of the session shall be treated as 
a separate regular session of the State legislature.
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