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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[S. 2224 Introduced in Senate (IS)]

103d CONGRESS
  2d Session
                                S. 2224

    To amend the Social Security Act, the Food Stamp Act, and other 
   relevant statutes to redesign the program of aid to families with 
 dependent children to establish a program that provides time-limited, 
    transitional assistance, prepares individuals for and requires 
     employment, prevents dependency, overhauls the child support 
  enforcement mechanism at both the State and Federal levels, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                June 21 (legislative day, June 7), 1994

 Mr. Moynihan (for himself, Mr. Mitchell, Mr. Breaux, Mr. Daschle, Mr. 
  Dodd, Mr. Kennedy and Mr. Rockefeller) (by request) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL

 
    To amend the Social Security Act, the Food Stamp Act, and other 
   relevant statutes to redesign the program of aid to families with 
 dependent children to establish a program that provides time-limited, 
    transitional assistance, prepares individuals for and requires 
     employment, prevents dependency, overhauls the child support 
  enforcement mechanism at both the State and Federal levels, 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.

    This Act may be cited as the ``Work and Responsibility Act of 
1994''.

SEC. 2. TABLE OF CONTENTS; REFERENCES.

    (a) Table of Contents.--This Act contains the following titles and 
sections:

                             TITLE I--JOBS

Sec. 101. Requirement to participate in enhanced JOBS program.
Sec. 102. Establishment of enhanced JOBS program under part F.
Sec. 103. Amendments pertaining to services and activities under JOBS 
                            program.
Sec. 104. Twenty-four month limit.
Sec. 105. Responsibilities of assistant secretary for family support.
                             TITLE II--WORK

Sec. 201. Establishment of program.
Sec. 202. Federal funding for the JOBS and WORK programs; participation 
                            requirements.
Sec. 203. Administration of the JOBS and WORK programs.
Sec. 204. Special provisions relating to Indian tribes and Alaska 
                            native organizations.
Sec. 205. Special rules for the Territories.
Sec. 206. Training and employment for non-custodial parents.
Sec. 207. Federal tax treatment of work wages.
                         TITLE III--CHILD CARE

Sec. 301. Child care for JOBS and WORK program participants and at-risk 
                            families.
Sec. 302. Related amendments.
Sec. 303. Limitation of at-risk child care to families ineligible for 
                            recipient or transitional child care.
Sec. 304. Option to consolidate State responsibility for child care.
Sec. 305. Funding for quality improvement and licensing activities 
                            benefitting children receiving AFDC or at-
                            risk child care.
Sec. 306. Funding of child care for families at risk of welfare 
                            dependency.
Sec. 307. Supplement to income disregard.
         TITLE IV--PROVISIONS WITH MULTI-PROGRAM APPLICABILITY

Sec. 401. Performance standards.
Sec. 402. AFDC quality control system amendments.
Sec. 403. National welfare receipt registry; State information systems.
Sec. 404. Research and evaluation; technical assistance, demonstration 
                            projects.
Sec. 405. Offsets to mandatory spending from fraud, waste, and abuse.
                   TITLE V--PREVENTION OF DEPENDENCY

Sec. 501. Supervised living arrangements for minors.
Sec. 502. State option to limit benefit increases for additional family 
                            members.
Sec. 503. Case management for parents under age 20.
Sec. 504. State option to provide additional incentives and penalties 
                            to encourage teen parents to complete high 
                            school and participate in parenting 
                            activities.
Sec. 505. Adolescent pregnancy prevention grants.
Sec. 506. Demonstration projects to provide comprehensive services to 
                            prevent adolescent pregnancy in high-risk 
                            communities.
                  TITLE VI--CHILD SUPPORT ENFORCEMENT

Sec. 600. References in title.
  Part A--Eligibility and Other Matters Concerning Title IV-D Program 
                                Clients

Sec. 601. Cooperation requirement and good cause exception.
Sec. 602. State obligation to provide paternity establishment and child 
                            support enforcement services.
Sec. 603. Distribution of payments.
Sec. 604. Due process rights.
Sec. 605. Privacy safeguards.
Sec. 606. Requirement to facilitate access to services.
               Part B--Program Administration and Funding

Sec. 611. Federal matching payments.
Sec. 612. Performance-based incentives and penalties.
Sec. 613. Federal and State reviews and audits.
Sec. 614. Automated data processing requirements.
Sec. 615. Director of OSCE program; training and staffing.
Sec. 616. Funding for secretarial assistance to State programs.
Sec. 617. Data collection and reports by the secretary.
                    Part C--Locate and Case Tracking

Sec. 621. Central State case registry.
Sec. 622. Centralized collection and disbursement support payments.
Sec. 623. Amendments concerning income withholding.
Sec. 624. Locator information from interstate networks and labor 
                            unions.
Sec. 625. National welfare reform information clearinghouse.
Sec. 626. Expanded locate authority.
Sec. 627. Studies and demonstrations concerning Federal parent locator 
                            service.
Sec. 628. Use of Social Security numbers.
           Part D--Streamlining and Uniformity of Procedures

Sec. 635. Adoption of uniform State laws.
Sec. 636. State laws providing expedited procedures.
                    Part E--Paternity Establishment

Sec. 640. State laws concerning paternity establishment.
Sec. 641. Outreach for voluntary paternity establishment.
Sec. 642. Penalty for failure to establish paternity promptly.
Sec. 643. Incentives to parents to establish paternity.
        Part F--Establishment and Modification of Support Orders

Sec. 651. National Commission on child support guidelines.
Sec. 652. State laws concerning modification of child support orders.
Sec. 653. Study on use of tax return information for modification of 
                            child support orders.
                 Part G--Enforcement of Support Orders

Sec. 661. Revolving loan fund for program improvements to increase 
                            collections.
Sec. 662. Federal income tax refund offset.
Sec. 663. Internal Revenue Service collection of arrears.
Sec. 664. Authority to collect support from employment-related payments 
                            by United States.
Sec. 665. Motor vehicle liens.
Sec. 666. Voiding of fraudulent transfers.
Sec. 667. State law authorizing suspension of licenses.
Sec. 668. Reporting arrearages to credit bureaus.
Sec. 669. Extended statute of limitation for collection of arrearages.
Sec. 670. Charges for arrearages.
Sec. 671. Visitation issue barred.
Sec. 672. Treatment of support obligations under bankruptcy code.
Sec. 673. Denial of passports for nonpayment of child support.
                         Part H--Demonstrations

Sec. 681. Child support enforcement and assurance demonstrations.
Sec. 682. Social Security Act demonstrations.
                  Part I--Access and Visitation Grants

Sec. 691. Grants to States for access and visitation programs.
                      Part J--Effect of Enactment

Sec. 695. Effective dates.
Sec. 696. Severability.
    TITLE VII--IMPROVING GOVERNMENT ASSISTANCE AND PREVENTING FRAUD

                        Part A--AFDC Amendments

Sec. 701. Permanent requirement for unemployed parent program.
Sec. 702. State options regarding unemployed parent program.
Sec. 703. Definition of essential person.
Sec. 704. Expanded State option for retrospective budgeting.
Sec. 705. Disregards of income.
Sec. 706. Stepparent income.
Sec. 707. Increase in resource limit.
Sec. 708. Exclusions from resources.
Sec. 710. Transfer of resources.
Sec. 711. Limitation on underpayments.
Sec. 712. Collection of AFDC overpayments from federal tax refunds.
Sec. 713. Verification of status of citizens and aliens.
Sec. 714. Repeal of requirement to make certain supplement payments in 
                            States paying less than their needs 
                            standards.
Sec. 715. Calculation of 185 percent of need standard.
Sec. 716. Territories.
                   Part B--Food Stamp Act Amendments

Sec. 721. Inconsequential income.
Sec. 722. Educational assistance.
Sec. 723. Earnings of students.
Sec. 724. Training stipends and allowances; income from on-the-job 
                            training programs.
Sec. 725. Earned income tax credits.
Sec. 726. Resources necessary for self-employment.
Sec. 727. Lump-sum payments for medical expenses or replacement of lost 
                            resources.
Sec. 728. Individual development accounts.
Sec. 729. Conforming amendment.
                     Part C--Economic Independence

Sec. 731. Short title.
Sec. 732. Declaration of policy and statement of purpose.
Sec. 733. Individual development account demonstration projects.
Sec. 734. Individual development accounts.
               Part D--Advance EITC State Demonstrations

Sec. 741. Advance payment of earned income tax credit through State 
                            demonstration programs.
       TITLE VIII--SELF EMPLOYMENT/MICROENTERPRISE DEMONSTRATIONS

Sec. 801. Demonstration program to provide self-employment 
                            opportunities to welfare recipients and 
                            low-income individuals.
                          TITLE IX--FINANCING

Sec. 901. Limitation on Federal payments for emergency assistance.
Sec. 902. Uniform alien eligibility criteria for public assistance 
                            programs.
Sec. 903. Eligibility of sponsored aliens for certain programs.
Sec. 904. National School Lunch Program.
Sec. 905. State retention of amounts recovered.
Sec. 906. Commodity Program income ineligibility.
Sec. 907. Amendments related to superfund tax extension.
Sec. 908. Federal railroad administration user fees.
Sec. 909. Special earned income tax credit rules for military 
                            personnel.
Sec. 910. Nonresident aliens not eligible for earned income tax credit.
Sec. 911. Extension of certain custom fees.
                        TITLE X--EFFECTIVE DATES

Sec. 1001. Effective dates.
    (b) References.--References herein to the ``Act'' are references to 
the Social Security Act except where otherwise provided or when the 
context otherwise requires.

                             TITLE I--JOBS

SEC. 101. REQUIREMENT TO PARTICIPATE IN ENHANCED JOBS PROGRAM.

    (a) Section 402(a)(19) of the Act is amended by striking out all 
down through subparagraph (E)(i) and inserting in lieu thereof the 
following:
            ``(19) provide--
                    ``(A) that the State has in effect and operation a 
                job opportunities and basic skills training program 
                (hereafter in this title referred to as the `JOBS' 
                program which meets the requirements of part F), and a 
                program of employment (hereafter in this title referred 
                to as the `WORK' program) which meets the requirements 
                of part G;
                    ``(B) that the State will (except as otherwise 
                provided in this paragraph or in part F), to the extent 
                the program is available in the political subdivision 
                involved, apply the requirements and conditions of this 
                paragraph to--
                            ``(i) each applicant for or recipient of 
                        aid to families with dependent children who--
                                    ``(I)(a) was born after 1971, or
                                    ``(b) is the parent of a dependent 
                                child and is living with such child's 
                                other parent who is an individual born 
                                after 1971 (or was living with such an 
                                individual during any month after 
                                September 1995 in which they received 
                                aid under this part), and
                                    ``(II) is the parent of a dependent 
                                child,
                        (but not including any individual who is 
                        eligible by application of section 407, in a 
                        State which exercises the option to limit 
                        eligibility under section 407(b)(2)(B),
                            ``(ii) thereafter any additional classes of 
                        parents of dependent children to whom the State 
                        chooses to make section 417 applicable (and 
                        identified in the State plan by date of birth, 
                        date of application, or other reasonable 
                        basis), and
                            ``(iii) any other applicants for or 
                        recipients of aid who the State chooses to 
                        require to participate in the program under 
                        part F and identifies in its State plan 
                        approved under this part;
                    ``(C) that the State will, except as otherwise 
                provided in this paragraph or part F--
                            ``(i) require all individuals described in 
                        subparagraph (B) other than a child who is not 
                        a custodial parent and is under age 16 or 
                        attending full time an elementary, secondary, 
                        or vocational (or technical) school) to 
                        participate in the program under part F;
                            ``(ii) to the extent that Federal financial 
                        participation under section 403(k) is 
                        available, allow individuals who are not 
                        required to participate in such program, or to 
                        whom subparagraph (D) applies, to participate 
                        in such program, except that such individual 
                        shall, in a month in which he or she meets a 
                        condition of any of clauses (i) through (vii) 
                        of subparagraph (D), be permitted to cease 
                        participation in such program, and be subject 
                        to the provisions of subparagraph (D) (for so 
                        long as they remain applicable) and the State 
                        may, at its option, apply section 417 to 
                        individuals described in subparagraph (B)(ii) 
                        and who choose to participate in the program 
                        under part F (even though they meet one of the 
                        criteria under subparagraph (D) for deferral 
                        from participation); and
                            ``(iii) with respect to individuals who 
                        wish to participate, but whom the State is not 
                        required to include under clause (ii), consider 
                        such individual's request for approval of a 
                        self-initiated education and training program 
                        and apply criteria generally applicable to 
                        approval of such activities under the State's 
                        JOBS program, but approval of such application 
                        shall only guarantee child care pursuant to 
                        subsection (g)(1)(A)(i)(II);
                    ``(D) that participation in the program under part 
                F will not be required and the provisions of such part, 
                other than paragraph (1) and (2) of section 481(a) 
                (relating to personal responsibility agreements and 
                employability plans) will not apply, but the State may 
                provide for participation in appropriate cases in one 
                or more types of activities designed as preparation for 
                participation in the program under part F, in the case 
                of any individual described in subparagraph (B) who--
                            ``(i) is the custodial parent of a child--
                                    ``(I) born less than one year 
                                earlier, or,
                                    ``(II) (in the case of either a 
                                child conceived during a month in which 
                                such parent received aid under this 
                                part or a child whose custodial parent 
                                is under the age of 20 and does not 
                                have a high school diploma or 
                                equivalent) born more recently than 
                                within the preceding 12 weeks (or, if 
                                greater) the number of weeks specified 
                                in section 102(a)(1) of the Family and 
                                Medical Leave Act of 1993 establishing 
                                the period of leave to which certain 
                                employees are entitled following the 
                                birth of a child, but this clause may 
                                only be applied to one parent of a 
                                child for any month;
                            ``(ii) is a woman in the third trimester of 
                        pregnancy;
                            ``(iii) is 60 years of age or older;
                            ``(iv) is needed in the home because of the 
                        illness or incapacity (as confirmed by a 
                        licensed physician, psychologist, or mental 
                        health professional (from a list of such 
                        professionals approved for this purpose by the 
                        State)) of another member of the household and 
                        no other appropriate household member is 
                        available to provide the needed care;
                            ``(v) is found, on the basis of a 
                        certification by a licensed physician, 
                        psychologist, or mental health professional 
                        (from a list of such professionals approved for 
                        this purpose by the State) to have an illness 
                        or incapacitating condition, that at least 
                        temporarily, prevents the individuals from 
                        engaging in employment or training;
                            ``(vi) resides in an area of the State 
                        where the time required to travel to and from 
                        the site where the individual's participation 
                        in the program under part F would take place 
                        would exceed a total of two hours (or, if 
                        greater, the generally accepted commuting time 
                        in that area) in a day; or
                            ``(vii) meets such other criteria as the 
                        State may specify in its plan that reasonably 
                        suggest an inability to participate in the 
                        program under part F, except that the average 
                        monthly number of individuals to whom this 
                        clause is applied for months in any fiscal year 
                        shall not exceed 5 percent of the average 
                        monthly number of all individuals (described in 
                        clauses (i) and (ii) of subparagraph (B)) for 
                        months in such fiscal year (or, in the case of 
                        fiscal years after 1999, 10 percent of such 
                        average monthly number) together with the 
                        average monthly number of individuals 
                        registered in the WORK program under part G for 
                        months in such year, unless the Secretary, upon 
                        a showing by the State of extraordinary or 
                        unforeseeable circumstances, allows the 
                        application of this clause to a greater number 
                        of individuals for a specified period of time;
                    ``(E) that the State will promptly advise each 
                applicant and recipient of the participation 
                requirements under this paragraph and of the limitation 
                on the number of months of eligibility for aid under 
                this part that may be applied (as required by the 
                provisions of section 417) to such applicant or 
                recipient;
                    ``(F) that--
                            ``(i) in the case of a custodial parent who 
                        has not attained 20 years of age, does not have 
                        a high school diploma (or its equivalent), and 
                        is required to participate in the program under 
                        part F, the State will require such parent to 
                        participate in an educational activity; and''.
    (b) Section 402(a)(19)(E)(ii) of the Act (as in effect on the date 
of enactment of this Act) is amended by striking out ``(notwithstanding 
the part-time requirement in subparagraph (C)(iii)(II))''.
    (c) Section 402(a)(19) of the Act is further amended--
            (1) by striking out paragraph (F) (as in effect on the date 
        of enactment of this Act), and
            (2) by striking out so much of subparagraph (G) as precedes 
        clause (ii) and inserting in lieu thereof the following:
                    ``(G) that--
                            ``(i) if an individual who is required to 
                        participate in the program under part F refuses 
                        without good cause to accept employment of 20 
                        hours per week or more (or such greater number 
                        of hours as the State plan provides pursuant to 
                        section 417(b)(4)(i)(IV)) in which such 
                        individual is able to engage which is offered 
                        through the public employment offices of the 
                        State, or is otherwise offered by an employer 
                        if the offer of such employer is determined to 
                        be a bona fide offer of employment, the family 
                        of which such individual is a member shall be 
                        ineligible for aid for six months or if sooner, 
                        until the first month following the month in 
                        which such individual accepts such an offer of 
                        employment; and
                            ``(ii) if an individual who is required to 
                        participate in the program under part F fails 
                        without good cause to do so, the needs of such 
                        individual shall not be taken into account in 
                        making the determination under paragraph (7), 
                        and if such individual is the parent or other 
                        caretaker relative, at the option of the State, 
                        payments of aid for any dependent child in the 
                        family in the form of payments of the type 
                        described in section 406(b)(2) (which in such 
                        case shall be without regard to clauses (A) 
                        through (D) thereof) may be made;''.
    (d) Section 402(a)(19)(G) of the Act is further amended--
            (1) by redesignating clauses (ii), (iii), and (iv) as 
        clauses (iii), (iv), and (v), respectively,
            (2) by striking out in clause (iii) (as redesignated) 
        ``clause (i)'' and inserting in lieu thereof ``clause (ii)'',
            (3) by striking out in clause (v) (as redesignated) the 
        dash and all that follows down through ``(II)'', and placing 
        the text of clause (II) immediately after ``this 
        subparagraph'', and
            (4) by adding at the end thereof the following new clause:
                                    ``(vi) the State agency shall 
                                conduct an evaluation of the 
                                circumstances in any case in which an 
                                individual to whom a sanction is being 
                                applied under clause (iii)(I) continues 
                                after three months to fail or refuse to 
                                comply with the requirement that 
                                occasioned the imposition of the 
                                sanction, and in the case of any other 
                                individual to whom a sanction is being 
                                applied under clause (iii), and provide 
                                appropriate counseling and other 
                                supportive services to assist the 
                                individual to address the cause of the 
                                failure or refusal;
                                    ``(vii) during months in which a 
                                sanction is applied under this 
                                subparagraph, the family of which the 
                                sanctioned individual is a member shall 
                                be considered to be receiving aid for 
                                purposes of title XIX, and for purposes 
                                of any other Federal or Federally-
                                assisted program, such family shall be 
                                considered to be receiving the amount 
                                of such aid that would be payable if 
                                such individual were not being 
                                sanctioned;
                                    ``(viii) during months in which a 
                                sanction is applied under this 
                                subparagraph, the family of which the 
                                sanctioned individual is a member shall 
                                be considered to be receiving aid for 
                                purpose of title XIX, and for purposes 
                                of any other Federal or Federally-
                                assisted program, such family shall be 
                                considered to be receiving the amount 
                                of such aid that would be payable if 
                                such individual were not being 
                                sanctioned; and''.
    (e) Section 402(a)(42) of the Act is amended by inserting before 
the semicolon the following: ``and if an individual is being sanctioned 
under section 402(a)(19)(G), such individual and all members of the 
family shall not become ineligible for such medical assistance by 
reason of such sanction''.

SEC. 102. ESTABLISHMENT OF ENHANCED JOBS PROGRAM UNDER PART F.

    (a) Section 481 of the Act is amended--
            (1) by amending the heading of such section to read:

``purpose; requirement to establish and operate program; definitions'';

            (2) by redesignating subsection (b) as subsection (c); and
            (3)(A) by transferring subsection (a) of section 482 to 
        section 481, and redesignating it as subsection (b); and
            (B) by amending section 481(b) (as so redesignated) by 
        striking out ``Secretary of Labor'' in paragraph (1)(C) and 
        inserting in lieu thereof ``Secretary of Labor and the 
        Secretary of Education''.
    (b) Section 482 of the Act is amended by striking out all that 
precedes subsection (c) and adding the following new heading and 
subsections (a) and (b):

                 ``operation of enhanced state programs

    ``Sec. 482. (a) Required Elements of Enhanced JOBS Program.--
            ``(1)(A) Personal responsibility agreement.--Each 
        individual who is a parent or other caretaker relative of a 
        dependent child and a representative of the State agency shall, 
        at the time of application for aid under part A, sign a 
        personal responsibility agreement. The agreement shall, in the 
        case of individuals to whom section 417 applies, set forth in 
        clear terms, understandable by all parties, an acknowledgment 
        that aid under the State plan is subject to a general 24-month 
        limit and should be considered transitional in nature. The 
        agreement, in all cases, should acknowledge that the goal of 
        both the individual and the State is to enable the individual 
        to achieve maximum economic independence and self sufficiency. 
        To this end, the individual will participate in appropriate 
        activities, and the State will furnish necessary enabling 
        services and assistance.
            ``(B) The State agency shall provide the program and 
        employment information required by subsection (c) as promptly 
        as possible, but in no event later than 90 days after the 
        earliest date for which payment is made. In the case of 
        individuals to whom section 417 applies, the information shall 
        be provided in person, on either an individual or group basis, 
        and the State agency shall obtain written confirmation from the 
        individual that the individual received and understood the 
        program and employment information.
            ``(2) Employability plan.--
                    ``(A)(i) The State agency shall, with respect to 
                each individual required to participate in the program 
                under this part, other than an individual to whom 
                section 402(a)(19)(D) applies, conduct an assessment of 
                the educational, child care, and other supportive 
                services needs, as well as the skills, literacy, prior 
                work experience and employability of each participant 
                in the JOBS program, including a review of the family 
                circumstances. The agency may also review the needs of 
                any child of the participant.
                    ``(ii) On the basis of such assessment, the State 
                agency and the individual shall, within 90 days from 
                the earliest date for which payment is made, jointly 
                develop an employability plan for such individual. The 
                purpose of the employability plan is to lay out the 
                fastest and most effective way to help the participant 
                find employment and become self-sufficient. The plan 
                shall indicate the overall period of time that is 
                expected to be necessary to achieve the individual's 
                employment goal, taking into consideration, in the case 
                of individuals to whom the provisions of section 417 
                apply, the maximum remaining period of time for which 
                aid may be paid to such individual under the plan 
                approved under part A. The plan will detail the 
                activities in which the individual will be expected to 
                engage in order to find employment, including job 
                search, employment training and preparation, or 
                education. The plan must be reasonable in light of the 
                individual's literacy, skills, and needs, and the 
                resources and opportunities for employment (including 
                self-employment) within the community where the 
                individual resides, and shall, to the maximum extent 
                possible and consistent with this section, reflect the 
                preferences of such individual. The employability plan 
                shall also describe the child care and other social 
                services and assistance which the State agency will 
                provide in order to allow the individual to take full 
                advantage of the activities under the program operated 
                under this part, and the steps the individual should 
                take to bring promptly to the attention of the State 
                agency any difficulties the individual is encountering 
                in participating in the program under this part. The 
                employability plan shall not be considered a contract.
                    ``(iii) The State plan shall provide that, if an 
                individual works an average of 20 hours a week (or such 
                greater number, but not more than 30, as the State plan 
                may provide) or more in a position of employment, work 
                in such position shall constitute the primary activity 
                under such individual's employability plan.
                    ``(B) The State plan under this part must provide 
                for a review mechanism that will be available should 
                the individual and the State agency be unable to agree 
                on the content of the employability plan. The review 
                process shall, at the least, provide for prompt 
                involvement of another employee (or designee) of the 
                State agency with supervisory or greater 
                responsibilities than the person with whom the 
                individual is in disagreement to provide further 
                negotiation support. If agreement still cannot be 
                reached, the State agency shall, in accordance with 
                regulations of the Secretary, afford the individual 
                access to arbitration or a mediation process, to a more 
                formal review or hearing, or to a combination of such 
                processes.
                    ``(C) Failure or refusal by an individual to sign 
                an agreed upon employability plan, or to sign a plan 
                with respect to which the applicable processes under 
                subparagraph (B) have been completed and under which 
                the employability plan has been found appropriate, 
                shall result in denial of aid with respect to such 
                individual, except that no sanction or other penalty 
                shall continue under this subparagraph after the 
                individual has signed an appropriate plan.
            ``(3) Employability plan for deferred individuals.--The 
        State agency and each individual for whom participation in 
        activities has been found appropriate under section 
        402(a)(19)(D) shall jointly develop an employability plan. The 
        plan shall place primary emphasis on the activities in which 
        the individual is able to engage that, together with any 
        services provided by the State, will best prepare the 
        individual for full participation in the program under this 
        part. Plans under this paragraph are not subject to the 
        procedures of paragraph (2).
            ``(4) Case manager.--The State agency may assign a case 
        manager to each participant and the participant's family who 
        will be responsible for assisting the family to obtain any 
        services which may be needed to assure effective participation 
        in the program.
            ``(5) Periodic assessment.--At such intervals as the State 
        agency finds appropriate, but not less frequently than once 
        every 6 months, a representative of the State agency and the 
        individual shall conduct a review of the individual's 
        employability plan (including the plan of an individual to whom 
        paragraph (3) applies) and the progress that is being made to 
        achieve the goals set in the plan. The State agency shall 
        consider, in conducting the assessment, whether an individual 
        participating in activities under section 402(a)(19)(D) has 
        become ready to participate in the program under this part, or 
        whether an individual required to participate under this part 
        should no longer be so required and instead should participate 
        in such activities. If it is concluded that there should be any 
        such change in status, the individual's employability plan 
        shall be revised accordingly effective with the month following 
        the month in which the revision is made. In the case of an 
        individual participating in the program under this part, the 
        assessment shall specifically address both the individual's 
        participation and the State agency's delivery of services as 
        agreed to in the employability plan. If it is found in the 
        course of an assessment that there has been a substantial 
        failure to provide services to the recipient in accordance with 
        the employability plan, the plan (or some other State agency 
        record) must document that finding, and the period during which 
        the failure occurred.
            ``(6) Revision of employability plan.--The employability 
        plan may be revised as necessary following an assessment under 
        paragraph (5) or at any other time that events warrant it, upon 
        the agreement of the individual and the State agency. If there 
        is disagreement about the need for revision, or the respects in 
        which the plan will be revised or the new content of the plan, 
        the procedures described in paragraph (2)(B) will be 
        applicable.
            ``(7) The State agency may require that, in the case of an 
        individual described in section 402(a)(19)(B) and whose 
        employability plan, including an employability plan under 
        paragraph (3), reflects the need for treatment for substance 
        abuse, such individual participate in substance abuse treatment 
        that is available without charge to the individual. The State 
        plan may, notwithstanding any other provision of law, make 
        applicable to any individual required to participate in such 
        treatment activities the provisions of section 402(a)(19)(G), 
        and if so, shall advise the individual of the consequences of 
        failure or refusal to accept treatment,
    ``(b) Transition to WORK Program.--(1) The State agency shall 
schedule a meeting with each individual subject to the time limit under 
section 417, with adequate advance notice to the individual, not later 
than 90 days prior to the first month for which such individual will 
become ineligible for aid under part A by reason of such time limit. 
The State agency shall evaluate the individual's progress under the 
employability plan, determine whether any extensions (as allowed under 
section 417) are necessary and available, and advise the individual 
about the job search requirement (described in paragraph (2)) and the 
steps that must be taken thereafter to register for the program under 
part G. If a meeting is held with the individual in connection with a 
redetermination of eligibility, periodic assessment, or for any other 
purpose, within the 6-month period preceding the first month of 
ineligibility by reason of section 417, the State agency may take the 
steps required by this paragraph at such meeting in satisfaction of 
this requirement.
    ``(2) Not later than 45 days prior to the close of the twenty-
fourth month of receipt of aid under part A (or, at the option of the 
State, at an earlier date after the twenty-first month of receipt of 
such aid), the individual shall be required to engage in job search to 
the extent consistent with the goals of such individual's employability 
plan. Engaging in job search for the period of time required by the 
State under the preceding sentence shall be a prerequisite to receipt 
of a work assignment under the WORK program established and operated 
under part G. For purposes of this subparagraph, `month of receipt of 
aid under part A' shall not include any month prior to the first month 
in which this subparagraph was in effect.
    ``(3) References to applicants, or to actions that must occur at 
the time of application or from the earliest date for which payment is 
made, in the amendments made by this section, shall be construed to 
include references to recipients, and actions that must occur at the 
time of the first redetermination of eligibility by a State for aid to 
families with dependent children occurring after the effective date of 
such amendments in such State.''.

SEC. 103. AMENDMENTS PERTAINING TO SERVICES AND ACTIVITIES UNDER JOBS 
              PROGRAM

    (a) Repeal of Redundant Provision.--Section 482(c) of this Act is 
amended by repealing paragraph (5).
    (b) Requirement To Provide Job Search Services.--Section 
482(d)(1)(A) of the Act is amended--
            (1) in clause (i), by redesignating subclauses (I) through 
        (IV) as (II) through (V), respectively,
            (2) by inserting before subclause (II) (as redesignated) 
        the following:
                                    ``(I) group and individual job 
                                search as described in subsection 
                                (g);'', and
            (3) in clause (ii), by repealing subclause (I) and 
        redesignating subclauses (II) through (IV) as subclauses (I) 
        through (III), respectively.
    (c) Employment-Oriented Education.--Section 482(d)(1)(A)(i)(II) of 
the Act as redesignated is amended by striking out ``basic and remedial 
education to achieve a basic literary level'' and inserting in lieu 
thereof ``employment-related education to achieve literacy levels 
needed for economic self-sufficiency''.
    (d) Self-Employment Programs.--Section 482(d)(1)(A)(ii) of the Act 
(as redesignated) is amended--
            (1) by striking out ``and'' after clause (II) (as 
        redesignated),
            (2) by adding ``and'' after clause (III), and
            (3) by adding after and below clause (III) (as 
        redesignated), the following:
                                    ``(IV) programs to prepare for 
                                self-employment or to enable 
                                individuals to establish a 
                                microenterprise.''.
    (e) Child Care Provider Training and Nontraditional Employment.--
Section 482(d)(1)(B) of the Act is amended by adding at the end thereof 
the following new sentence: ``The State shall include in its plan a 
description of whether and how it will provide training to prepare 
individuals to be child care providers. The State shall also include in 
its plan a description of the steps it will take to encourage the 
training and placement of participants in nontraditional positions of 
employment, including steps to increase program participants' awareness 
of the availability of such training and placement opportunities.''.
    (f) Work Supplementation Extension.--Section 482(e) of the Act (as 
redesignated) is amended--
            (1) in paragraph (2)(G)--
                    (A) by striking out ``9 months'' and inserting in 
                lieu thereof ``12 months'', and
                    (B) by striking out ``without regard to the 
                provisions of subparagraph (b)(ii)(II) of such 
                section'', and
                    (2) in paragraph (4)(A), striking out ``9 months'' 
                and inserting in lieu thereof ``12 months''.
    (g) Amendments to Job Search Program.--Section 482(g) of the Act is 
amended--
            (1) in paragraph (1) by striking out ``may'' and inserting 
        in lieu thereof ``shall'';
            (2) by amending so much of paragraph (2) as precedes 
        subparagraph (A) to read as follows:
            ``(2) The State agency may require job search by an 
        individual who is applying for and shall upon approval of the 
        application require job search by an individual who is 
        receiving aid to families with dependent children and is 
        determined by the State to have non-negligible work experience, 
        or to have a high school diploma or equivalent, including 
        individuals required by the State's exercise of its option 
        under section 402(a)(19)(B) (i) and (ii) to participate in the 
        program under this part--'';
            (3) in paragraph (2)(A), by striking out ``8 weeks'' and 
        inserting in lieu thereof ``12 weeks''; and
            (4) by amending paragraph (2)(B) to read as follows:
                    ``(B) at such time or times thereafter as the State 
                agency many determine, but not to exceed a total of 4 
                months in any 12-month period (and for this purpose, 
                there shall be included the time that the individual 
                engaged in job search pursuant to both subparagraph (A) 
                and section 482(c), but not any period of job search 
                that occurred at the same time that the individual was 
                participating in another activity under this part.''.
    (h) Procedures To Resolve Disputes.--Section 482(h) of the Act is 
amended by striking out ``shall establish'' and all that follows down 
to ``shall provide an opportunity for a hearing'' and inserting in lieu 
thereof ``shall establish either (A) a conciliation procedure, meeting 
standards established by the Secretary, for the resolution of disputes 
involving an individual's participation in the program, or (B) a 
procedure that includes advance notice to the individual of an apparent 
failure to comply with a program requirement, and 10 days in which to 
contact and meet with a State agency representative in order to resolve 
the dispute (or to comply with the requirements) and make unnecessary 
the imposition of a sanction. If the dispute is not resolved through 
whichever of these procedures the State adopts, the State agency''.
    (i) Coordination Requirements.--Section 483(a)(1) of the Act is 
amended by inserting immediately following ``the Job Training 
Partnership Act'' in the first sentence'', the Adult Education Act, the 
Carl D. Perkins Vocational and Applied Technology Education Act 
Amendments of 1990,''.
    (j) Provisions Generally Applicable to Provision of Services Under 
JOBS and WORK.--Section 484 of the Act, including the heading, is 
amended to read as follows:

 ``provisions generally applicable to provision of services under jobs 
                                or work

    ``Sec. 484. (a) In assigning participants in the program under this 
part to any program activity, or in assigning individuals registered 
with the program under part G to a position of employment, the State 
agency shall assure that--
            ``(1) each assignment takes into account the capacity, 
        health and safety, family responsibilities, and place of 
        residence of the participant;
            ``(2) no participant will be required, without his or her 
        consent, to travel an unreasonable distance from his or her 
        home or remain away from such home overnight;
            ``(3) individuals are not discriminated against on the 
        basis of race, color, sex, national origin, religion, age, or 
        disability, and all participants will have such rights as are 
        available under any applicable Federal, State, or local law 
        prohibiting discrimination;
            ``(4) no such assignment will--
                    ``(A) result in the displacement of any currently 
                employed worker, including partial displacement such as 
                a reduction in the hours of non-overtime work, wages, 
                or employment benefits;
                    ``(B) impair existing contracts for services or 
                collective bargaining agreements;
                    ``(C) infringe upon the promotional opportunities 
                of any currently employed worker;
                    ``(D) result in the employment of the participant 
                or filling of a position when--
                            ``(i) any other person is on layoff, on 
                        strike or has been locked out from, or has 
                        recall rights to, the same or a substantially 
                        equivalent job or position with the employer; 
                        or
                            ``(ii) the employer has terminated any 
                        regular employee or otherwise reduced its 
                        workforce with the effect of filling the 
                        vacancy so created with such participant; or
                    ``(E) result in filling a vacancy for a position in 
                a State or local government agency for which State or 
                local funds have been budgeted, unless such agency has 
                been unable to fill such vacancy with a qualified 
                applicant through such agency's regular employee 
                selection procedure during a period of not less than 60 
                days;
            ``(5) no participant shall be assigned to a position to 
        perform work under a contract for services for the first 90 
        days after the commencement of such contract if such contract 
        immediately succeeds a contract for services under which an 
        employee covered by a collective bargaining agreement performed 
        the same or substantially similar work for another employer;
            ``(6) no participant shall be assigned to a position with a 
        private nonprofit entity to carry out activities that are the 
        same or substantially equivalent to activities that have been 
        regularly carried out by a State or local government agency in 
        the same local area, unless such placement meets the 
        nondisplacement requirements of paragraph (4);
            ``(7) to the extent that a State workers' compensation law 
        is applicable, workers' compensation benefits in accordance 
        with such law shall be available with respect to injuries 
        suffered by participants, and, to the extent that such law is 
        not applicable, participants shall be provided with medical and 
        accident protection for on-site injuries in accordance with 
        regulations issued by the Secretary;
            ``(8) health and safety standards established under State 
        and Federal law that are otherwise applicable to the working 
        conditions of employees shall be equally applicable to the 
        working conditions for participants; and
            ``(9) the State will establish and maintain grievance 
        procedures, meeting the requirements of subsection (c), for 
        resolving complaints by regular employees or their 
        representatives alleging violations of the nondisplacement 
        provisions described in paragraph (4), or of the requirements 
        relating to wages, benefits and working conditions under this 
        title.
    ``(b) A grievance procedure that meets the requirements of this 
subsection must include the following procedures:
            ``(1) Deadlines.--Hearings on any grievance filed pursuant 
        to subsection (a)(8) shall be conducted within 30 days of the 
        filing of such grievance and a decision shall be made not later 
        than 60 days after the filing of such grievance. A grievance 
        shall be made not later than 45 days after the date of the 
        alleged occurrence.
            ``(2) Appeals.--Upon receiving a decision under paragraph 
        (1), or if 60 days has elapsed without a decision being made, a 
        grievant may either--
                    ``(A) file an appeal as provided for in the State's 
                procedures or in regulations promulgated by the 
                Secretary, or
                    ``(B) submit such grievance to binding arbitration 
                in accordance with paragraph (3).
            ``(3) Arbitration.--
                    ``(A) In general.--
                            ``(i) Jointly selected arbitrator.--In 
                        accordance with paragraph (2) on the occurrence 
                        of an adverse grievance decision, or 60 days 
                        after the filing of such grievance if no 
                        decision has been reached, the party filing the 
                        grievance shall be permitted to submit such 
                        grievance to binding arbitration before a 
                        qualified arbitrator who is jointly selected 
                        and independent of the interested parties.
                            ``(ii) Impasse procedures.--If the parties 
                        are unable to agree on an arbitrator within 20 
                        days from when the request for arbitration is 
                        filed, the parties shall request the Federal 
                        Mediation and Conciliation Service or the 
                        American Arbitration Association to submit a 
                        list of arbitrations. The parties shall 
                        alternately strike names from such list until 
                        the name of one person remains, who shall be 
                        the arbitrator.
                    ``(B) Deadlines.--An arbitration proceeding 
                conducted pursuant to subparagraph (A)(i) shall be held 
                not later than 45 days after the request for such 
                arbitration, or if the arbitrator is appointed pursuant 
                to paragraph (A)(ii), not later than 30 days after such 
                appointment, and a decision concerning such grievance 
                shall be made not later than 30 days after the date of 
                such arbitration proceeding.
                    ``(C) Cost.--
                            ``(i) In general.--The cost of the 
                        arbitration proceeding conducted under this 
                        subsection shall be divided evenly between the 
                        parties to the arbitration.
                            ``(ii) Exception.--If a grievant prevails 
                        under the arbitration proceeding conducted 
                        under this subsection, the party found in 
                        violation of the requirements of this part 
                        shall pay the total cost of such proceeding and 
                        the attorney's fees of the grievant.
                    ``(D) Enforcement.--Suits to enforce arbitration 
                awards under this subsection may be brought in any 
                district court of the United States having jurisdiction 
                over the parties, without regard to the amount in 
                controversy and without regard to the citizenship of 
                the parties.
            ``(4) Remedies.--Remedies for a grievance filed under this 
        subsection include--
                    ``(A) suspension of payments to employers;
                    ``(B) the termination of such payments;
                    ``(C) the prohibition of the placement of a 
                participant;
                    ``(D) reinstatement of a displaced employee to the 
                position held by such employee prior to displacement;
                    ``(E) payment of lost wages and benefits of the 
                displaced employee;
                    ``(F) reestablishment of other relevant terms, 
                conditions, and privileges of the displaced employee; 
                and
                    ``(G) such equitable relief as is necessary to 
                correct a violation or to make a displaced employee 
                whole.
    ``(c) Written Notification of Labor Organizations.--
            ``(1) No position of employment with an employer may be 
        established under title part unless the local labor 
        organization representing employees of such employer who are 
        engaged in the same or substantially similar work as that 
        proposed to be carried out under such position have been 
        provided written notification of the initial assignment of a 
        participant to such position not less than 30 days prior to the 
        commencement of such assignment. No such notification shall be 
        required with respect to the subsequent assignment of 
        participants to the same position with the same employer.
            ``(2) If a local organization provided notice of an 
        assignment pursuant to paragraph (1) objects to an assignment 
        of a participant pursuant to paragraph (1) objects to an 
        assignment of a participant on the basis that such assignment 
        would violate the requirements relating to nondisplacement, 
        wages, benefits, or working conditions under this title, such 
        organization may, as an alternative to the grievance procedures 
        provided pursuant to subsection (b), file a complaint pursuant 
        to an expedited grievance procedure. Such expedited procedure 
        shall be carried out in accordance with the binding arbitration 
        procedures described in subsection (b)(3), except that--
                    ``(A) the request for arbitration shall be filed 
                within 30 days of receiving written notice,
                    ``(B) the arbitrator shall be jointly selected by 
                the parties not later than 10 days after the request 
                for arbitration, or, if the parties are unable to 
                agree, appointed by the Federal Mediation and 
                Conciliation Service (or another entity is agreed to by 
                both parties) not later than 15 days after the request 
                for arbitration, and
                    ``(C) the proceeding shall be conducted and a 
                decision issued not later than 30 days after the 
                request for arbitration.
            ``(3) If a local organization files a complaint pursuant to 
        the expedited grievance procedure under paragraph (2), a 
        participant shall not be placed in the position that is the 
        subject of the complaint until it is determined pursuant to the 
        expedited procedure that such placement would not be in 
        violation of this title.
    ``(d) In assigning participants in the JOBS program under this part 
to any program activity, the State agency shall, in addition to the 
assurances required under subsection (a), assure that--
            ``(1) the conditions of participation are reasonable, 
        taking into account in each case the experience and proficiency 
        of the participant and the child care and other supportive 
        services needs of the participant; and
            ``(2) each assignment is based on available resources, the 
        participant's circumstances, and local employment 
        opportunities.
    ``(e) In assigning individuals registered with the State's WORK 
program under part G to a position of employment, the State agency 
shall, in addition to the assurance required under subsection (a), 
assure that--
            ``(1) no individual eligible to register for the State's 
        WORK program, determined in accordance with the provisions of 
        part A and this part, shall be excluded from such program;
            ``(2) no family with a member eligible to participate in 
        the State's program under part G will, by reason of such 
        assignment, and upon participating the full number of hours 
        provided by such assignment, have income less than the amount 
        such family would have if it were receiving aid under the 
        State's plan approved under part A and had no other income 
        (except if a sanction is applied under section 496(f));
            ``(3) each family with a member participating in the 
        program under part G shall be considered to be receiving aid to 
        families with dependent children for purpose of the State's 
        plan approved under title XIX;
            ``(4) where a labor organization represents a substantial 
        number of employees who are engaged in similar work in the same 
        area as that proposed to be funded under part G, an opportunity 
        shall be provided for such organization to submit comments with 
        respect to such proposal;
            ``(5) participants employed under the WORK program shall be 
        compensated for such employment in accordance with appropriate 
        law, but in no event at a rate less than the highest of--
                    ``(A) the Federal minimum wage rate specified in 
                section 6(a)(1) of the Fair Labor Standards Act of 
                1938;
                    ``(B) the rate specified by the appropriate State 
                or local minimum wage law; or
                    ``(C) the rate paid to employees of the same 
                employer performing the same type of work and having 
                similar employment tenure with such employer; and
            ``(6) except as otherwise provided under this paragraph, 
        participants employed under the WORK program shall be provided 
        benefits (including health benefits, unless the State agency 
        concludes that it would impose an undue financial burden on 
        either the employer or the State), working conditions and 
        rights at the same level and to the same extent as other 
        employees of the same employer performing the same type of work 
        and having similar employment tenure with employer.
    ``(f) Funds available to carry out the program under this part, or 
under part G, may not be used to assist, promote, or deter union 
organizing.
    ``(g) The provisions of this section apply to any work-related 
programs and activities under this part or under part G (as provided 
herein), and under any other work-related programs and activities 
authorized (in connection with the AFDC program) under section 1115.''.

SEC. 104. TWENTY-FOUR MONTH LIMIT.

    Part A of title IV of the Social Security Act is amended by 
redesignating section 417 as section 419 and adding after and below 
section 416 the following new section:

``SEC. 417. TWENTY-FOUR MONTH LIMIT.

    ``(a) Limitation.--(1) In General.--Notwithstanding any other 
provision of law, a State plan approved under this part must provide 
that, except as otherwise provided in this title, aid to families with 
dependent children will not be payable to an individual to whom section 
402(a)(19)(B) (i) or (ii) applies or to individuals who have choses to 
participate in the program under part F and to whom the State has 
elected under section 402(a)(19)(C) to apply this section, or to his or 
her dependent child or children living in the same home with such 
individual for any month after the twenty-fourth month (whether or not 
such months are consecutive) for which such individual has, together 
with his or her dependent child or children, received aid under the 
State's plan, or under the plan of any other State, approved under this 
part. The limitation in the preceding sentence shall not apply to (A) 
an individual who has received such aid for 24 months and who is 
working to the extent described in clause (IV) or (V) of paragraph 
(2)(B)(i), whichever may be applicable, or (B) an individual's 
dependent child or children if they are living with another relative 
specified in section 406(a)(1) who is not subject to, or has not 
received aid for months in excess of, the limit prescribed by, this 
section.
    ``(2) Applicability.--In applying paragraph (1)--
            ``(A) if an individual has previously received aid under a 
        State plan approved under this part for more than 18 months, 
        the number of months for which an individual is considered to 
        have previously been paid aid under such a State plan shall be 
        reduced by one month for every period of four months throughout 
        which no such aid was paid, and no wages under the program 
        under part G were paid but such number of months shall never be 
        reduced to fewer than 18 (regardless of whether such periods of 
        four months were consecutive); and
            ``(B)(i) there shall not be included, as a month in which 
        an individual received aid under a State plan approved under 
        this part--
                    ``(I) any month prior to the first month for which 
                this section is in effect in such State, or in the case 
                of a recipient of aid in such State for the month 
                preceding such month, the first month in which such 
                individual's eligibility is redetermined by such State;
                    ``(II) any month prior to the first month in which 
                payment of aid under this part was authorized with 
                respect to such individual;
                    ``(III) any month prior to the month in which such 
                individual attains age eighteen;
                    ``(IV) any month during which the individual worked 
                20 hours a week (or such greater number, but not more 
                than 30, as the State plan under part F provides) or 
                more;
                    ``(V) any month during which the total average 
                number of hours worked per week by both parents, in a 
                family eligible by reason of section 407 and in which 
                section 402(a)(19)(D) is applicable to neither parent, 
                exceeds 30 hours (or such greater number, but not more 
                than 40, as the State plan under part F provides); or
                    ``(VI) any month during which section 402(a)(19)(D) 
                was applicable to such individual; and
            ``(ii) there shall be included each month for which aid 
        would have been paid but for the applicability to such 
        individual of a sanction under section 402(a)(19)(G) or 
        402(a)(26).
For purposes of clauses (i)(IV) and (V), there shall not be excluded 
any month in which the individual fails to accept an offer of 
additional hours of employment, or in which such individual reduces the 
hours of employment and thereby becomes eligible for additional amounts 
of aid under this part.
    ``(b) Notice to Individuals.--A State plan approved under this part 
shall provide that notice will be given to each member of a family to 
whom the time limit under subsection (a) applies, not less frequently 
than once every six months, concerning the number of months of 
eligibility remaining for each such member. The notice required by this 
subsection may be given together with the payment of aid.
    ``(c) Extension of Limit.--
            ``(1) extension by reason of failure to provide services.--
        The State agency shall extend the twenty-four-month limit 
        referred to in subsection (a) in the case of an individual who 
        has been unable to complete the education, training, or other 
        activities intended to prepare such individual for employment 
        by reason of the substantial failure of the State agency to 
        provide or arrange for the provision of child care or any other 
        service agreed upon in the individual's employability plan. A 
        finding of failure to provide services shall be based on the 
        documentation made at the semi-annual assessment (required by 
        section 482(a)(5)), together with any reports or information 
        either the individual or the State agency may have with respect 
        to the period between the assessment and the close of the 
        twenty-fourth month. The time limit shall be extended for so 
        many months as are necessary to allow the individual to 
        complete the activities agreed upon in the employability plan, 
        but in no event may such extension exceed an additional 24 
        months.
            ``(2) Extension to complete course of education.--
                    ``(A) The State agency shall extend the twenty-
                four-month limit referred to in subsection (a)--
                            ``(i) in the case of an individual 
                        receiving services under the Individuals with 
                        Disabilities Education Act, for so long as 
                        necessary to permit such individual to attain a 
                        high school education (or the equivalent) or, 
                        if sooner, until such individual reaches age 
                        22; and
                            ``(ii) in the case of an individual in a 
                        structured learning program (as defined in 
                        paragraph (4)), including a program under the 
                        School-to-Work Opportunities Act of 1993, for 
                        so long as necessary to permit such individual 
                        to complete the program or, if sooner, until 
                        such individual reaches age 22.
                    ``(B) Subject to subsection (e), the State agency 
                may extend the twenty-four-month limit referred to in 
                subsection (a)--
                            ``(i) for no more than 12 additional months 
                        in order to allow an individual to complete 
                        high school (or an equivalent program of 
                        education), so long as the individual is making 
                        satisfactory progress toward obtaining a high 
                        school diploma (or equivalent);
                            ``(ii) for no more than 24 additional 
                        months in order to allow an individual to 
                        complete a post-secondary program so long as 
                        the individual is enrolled in a work-study 
                        program, or is employed at least 15 hours per 
                        week, and is making satisfactory progress 
                        toward completing a degree-granting or 
                        certificate-granting education or training 
                        program, or structured microenterprise or self-
                        employment program likely to improve the 
                        individual's economic self-sufficiency; or
                            ``(iii) for such additional number of 
                        months as it finds appropriate in any case, 
                        determined on an individual basis, where such 
                        extension is necessary to afford an individual 
                        with significant learning disabilities or other 
                        substantial barriers to employment additional 
                        time to obtain the remedial education, job 
                        skills training, or other services specified in 
                        the employability plan needed to enable the 
                        individual to secure employment.
            ``(3) Extension of employability plan.--The State agency 
        shall extend, and if appropriate revise, the employability plan 
        of each individual with respect to whom an extension is 
        provided under this subsection, and shall continue to furnish, 
        through the months of the extension, the supportive services 
        for which the extended plan provides.
            ``(4) As used in this subsection, a `structured learning 
        program' means one that begins at the secondary school level, 
        continues into a post-secondary program, and is designed to 
        lead to a degree or recognized skills certificate.
    ``(d) Exception for Transition to Unsubsidized Employment.--The 
State may, at its option, provide for continuing for one additional 
month the payment of aid to an individual (and his or her dependent 
child or children) under the State plan, notwithstanding subsection 
(a), in any case where such continued payment is necessary to assist 
the individual who is about to commence a position of employment (other 
than as a participant in the program under part G) until receipt of the 
first payment of wages. The State plan shall describe the evidence of 
employment that the State will require in order that payment may be 
continued under this subsection.
    ``(e) Limitation on Average Monthly Number of Extensions.--If the 
average monthly number of individuals with respect to whom the State 
has extended the twenty-four month limit by application of subsection 
(c)(1) or (c)(2)(B) in any fiscal year exceeds 10 percent of the 
average monthly number of individuals to whom this section applies (and 
who are required to participate in the program under part F) in the 
fiscal year involved, the provisions of section 403(k)(6) (reducing 
Federal payments under section 403(a)) shall apply, unless the 
Secretary, upon a showing by the State of extraordinary or 
unforeseeable circumstances, allows the application of such subsections 
to a greater number of individuals for a specified period of time.
    ``(f) Alternative Time Limit Demonstrations.--Notwithstanding any 
other provision of this part, the Secretary may permit not more than 
five States to conduct demonstrations to determine what effects, if 
any, application of time limits of other than twenty-four months would 
have in promoting the objectives of the part. The Secretary shall 
approve a demonstration only if the proposed time limit is consistent 
with both the purpose of making AFDC a transitional program and 
affording recipients with support to enable them to prepare themselves 
to obtain unsubsidized employment. Any State applying a time limit 
other than that specified in subsection (a) shall evaluate both the 
short and long term effects of such time limit in enabling recipients 
to become self-sufficient and shall report the results of such 
evaluation to the Secretary.''.

SEC. 105. RESPONSIBILITIES OF ASSISTANT SECRETARY FOR FAMILY SUPPORT.

    Section 419 of the Act, as redesignated by section 104 of this Act, 
is amended by striking out ``and part F'' and inserting in lieu thereof 
``part F, and part G''.

                             TITLE II--WORK

SEC. 201. ESTABLISHMENT OF PROGRAM.

    (a) Title IV of the Act is amended by adding at the end thereof the 
following new part:

                             ``Part G--Work

``SEC. 491. PURPOSE AND DEFINITIONS.

    ``(a) Purpose.--It is the purpose of this part to assist States in 
developing and providing positions of employment for individuals who 
have received aid to families with dependent children for 24 months, 
and participated in the program under part F, but have not been able to 
secure unsubsidized employment.
    ``(b) Definition.--As used in this part, a `WORK position' is a 
position of employment to which an individual is assigned under this 
part.

``SEC. 492. ESTABLISHMENT AND OPERATION OF STATE PROGRAMS.

    ``(a) Requirement.--Each State shall establish and operate a 
program to locate and create temporary positions of employment (in this 
part referred to as the `WORK program') for individuals who have 
received aid for 24 months, as provided in section 417. The WORK 
program shall be in effect in each political subdivision of the State 
not later than 2 years after the State's program under part F is in 
effect in such subdivision.
    ``(b) State Plan.--The State shall establish and operate its WORK 
program under a plan approved by the Secretary which describes how the 
State will implement the plan, and indicates, through cross-references 
to the appropriate provisions of this part and of parts A and F, that 
the program will be operated in accordance with such provisions of law. 
The State plan shall describe the strategies and activities to be 
undertaken by the State to identify and develop WORK positions. Such 
strategies shall, to the extent practicable, be designed to identify 
and develop positions likely to result in the placement of participants 
in unsubsidized employment. The strategies and activities may include--
            ``(1) wage subsidies or other incentives to for-profit, 
        nonprofit, and public employers to employ participants;
            ``(2) performance-based contracts with public or nonprofit 
        or other private organizations to place participants in 
        unsubsidized employment;
            ``(3) payments to nonprofit employers to assist in 
        supervising participants employed by such employers;
            ``(4) assistance to participants in establishing 
        microenterprises and other self-employment efforts;
            ``(5) payments to nonprofit employers and public agencies 
        to employ participants in temporary projects designed to 
        address community needs, such as projects to enhance 
        neighborhood infrastructure and provide other community 
        services; and
            ``(6) payments to employers to employ participants as child 
        care providers.
    ``(c) Coordination With Job Opportunities and Basic Skills Training 
Program.--The State plan submitted to the Secretary to carry out the 
requirements of this part shall, together with the State plan required 
to carry out part F, constitute a single plan and shall, to the maximum 
extent feasible, reflect an integrated strategy to assist the 
individuals and families served under the plan to achieve economic 
self-sufficiency.
    ``(d) Work Advisory Boards.--
            ``(1) Designation.--The State plan shall designate, or 
        describe a process for establishing or designating, a WORK 
        advisory board for each local area in the State to provide 
        advice and guidance in the administration of the program under 
        this part. The State shall ensure the participation of local 
        elected officials in the designation or establishment of such 
        boards.
            ``(2) Local area.--The local areas for which WORK advisory 
        boards shall be designated or established pursuant to paragraph 
        (1) may be--
                    ``(A) service delivery areas established under 
                section 101 of the Job Training Partnership Act;
                    ``(B) the geographic boundaries of the labor market 
                areas in the State; or
                    ``(C) such other areas as the Governor determines 
                are appropriate to promote the effective administration 
                of the WORK program.
            ``(3) Composition.--Each WORK advisory board designated or 
        established pursuant to paragraph (1) shall consist of--
                    ``(A) representatives of private sector employers,
                    ``(B) representatives of organized labor;
                    ``(C) representatives of not-for-profit 
                organizations, including community-based organizations;
                    ``(D) representatives of local government, such as 
                local, elected officials and representatives of 
                economic development agencies, human service agencies, 
                and educational agencies; and
                    ``(E) such other community leaders as the State 
                determines are appropriate.
            ``(4) Functions.--Each WORK advisory board shall provide 
        comments to the State agency relating to the State plan 
        developed pursuant to subsection (b) of this section. In 
        addition, each WORK advisory board shall provide advice and 
        guidance to the agency administering the WORK program in the 
        local area relating to--
                    ``(A) the identification of potential WORK 
                positions;
                    ``(B) opportunities for placing WORK participants 
                in unsubsidized employment;
                    ``(C) methods for ensuring compliance with the 
                requirements of this part relating to nondisplacement 
                and working conditions;
                    ``(D) methods for carrying out the coordination 
                requirements specified in subsection (e) of this 
                section; and
                    ``(E) such other aspects of the WORK program that 
                such board determines are appropriate.
    ``(e) Coordination With Other Programs and Entities.--
            ``(1) In general.--The State plan shall include a 
        description of the cooperative arrangements established with 
        appropriate programs and agencies to enhance the administration 
        of the program under this part, including arrangements with--
                    ``(A) the Employment Service, and
                    ``(B) other relevant employment and public service 
                programs administered through public and private 
                entities, such as programs supported under the Job 
                Training Partnership Act and the National and Community 
                Service Act and with programs under the CCDBG Act to 
                explore the development of positions in child care for 
                WORK program participants.
            ``(2) Local coordination.--The entity administering the 
        WORK program in local areas shall, in addition to establishing 
        linkages with the programs and agencies described in paragraph 
        (1), establish cooperative arrangements with other appropriate 
        entities to enhance the administration of the program under 
        this part. Such arrangements may be established with local 
        government and service agencies, public housing agencies, 
        community-based organizations, business and labor 
        organizations, voluntary organizations, and other appropriate 
        entities.

``SEC. 493. ELIGIBILITY FOR WORK PROGRAM; REGISTRATION.

    ``(a) Eligibility.--(1) In General.--An individual--
            ``(A) to whom section 417 applies, who has received aid 
        under the State plan approved under part A for twenty-four 
        months, and with respect to whom no extension under section 417 
        has been provided,
            ``(B) who is not an individual to whom section 
        402(a)(19)(D) applies, and
            ``(C) who meets the eligibility criteria for aid to 
        families with dependent children (but for section 417) under 
        the State's plan approved under part A,
shall be permitted to register for participation in the State's WORK 
program and, upon registration and continuing compliance with the 
requirements applicable to individual's awaiting assignment to a WORK 
position, be eligible for such an assignment and, in accordance with 
the succeeding provisions of this part, a payment of aid to families 
with dependent children.
    ``(2) Special Rules.--The State plan shall specify whether one or 
both parents will be required to register with and participate in the 
WORK program as a condition of eligibility for an assignment for either 
parent under the WORK program and a payment of aid to the family, in 
the case of a family in which both parents are subject to the limit in 
section 417.
    ``(b) Registration.--The State plan shall establish a simple 
procedure under which an individual who meets the criteria of 
subsection (a) may register with and participate in the WORK program so 
that the individual will receive wages (if an appropriate assignment is 
available) or aid, or (if applicable) both, in the month following the 
final month of the time limit under section 417. The State plan must 
describe the methods that will be employed to assure the uninterrupted 
provision of aid for the family of an individual who has complied with 
all applicable requirements and conditions of this part.
    ``(c) Work Program Assessment.--The State plan shall provide for 
the prompt assessment of each individual registering with the program, 
in order to determine an appropriate assignment for such individual. 
The assessment must include a review of the individual's education, 
training, and employment experience while participating in the program 
under part F, as well as any employment experience the individual may 
have had thereafter.
    ``(d) Limitations on Assignments.--
            ``(1) Hours of work.--The State plan shall--
                    ``(A) ensure, to the extent practicable, that 
                participants' wages earned from WORK positions provide 
                on the average 75 percent of the sum of wages together 
                with aid paid to participants in the States WORK 
                program;
                    ``(B) ensure no assignment will result in an 
                average number of hours of work over any four-week 
                period that is less than 15 hours per week or greater 
                than 35 hours per week; and
                    ``(C) provide that in making WORK assignments the 
                State agency shall, to the maximum extent feasible, 
                ensure that an assignment to a WORK position will not 
                interfere with any hours of unsubsidized employment in 
                which the individual is already engaged at the time of 
                the assignment.
            ``(2) Length of assignment.--An assignment to a WORK 
        position shall be for no longer than 12 months and may not be 
        reassigned to the same position.
    ``(e) Payment of Aid.--The State agency administering the State's 
plan approved under part A shall pay for each month to each family with 
an individual registered with the WORK program the amount of aid that 
would be payable to such family under such plan, except that--
            ``(1) wages earned by a family member from employment in a 
        WORK position shall not be considered in determining 
        eligibility for continued participation in the WORK program;
            ``(2) in determining the amount of aid that is payable, the 
        State agency may determine whether to disregard from the wages 
        received from the WORK position any amounts that may be 
        disregarded under section 402(a)(8)(A)(iv); and
            ``(3) if a family member has been assigned to and is 
        employed in a WORK position, the amount of the family's aid 
        will not be subject to increase by reason of the individual's 
        failure to perform the full number of hours per week for which 
        the assignment was made.
    ``(f) Treatment Under Other Laws.--
            ``(1) Individuals participating in the WORK program, and 
        their families, whether or not any aid is payable in addition 
        to wages from a WORK position, shall be considered to be 
        receiving such aid for purposes of the State's plan for medical 
        assistance approved under title XIX.
            ``(2) Wages paid for employment in a WORK position shall be 
        treated as if they were wages from unsubsidized employment for 
        the purpose of any other Federal law unless it is expressly 
        provided otherwise in Federal law.
    ``(g) Program Participants.--The Secretary may by regulation 
prescribe criteria for determining when an individual's employment no 
longer constitutes participation in the WORK program.

``SEC. 494. PROVISIONS GENERALLY APPLICABLE TO WORK POSITIONS.

    ``(a) In General.--In addition to the applicable provisions of 
section 484, the conditions described in this section shall be 
applicable to WORK positions.
    ``(b) Prohibition on Contributions for Retirement Benefits.--No 
funds available under this title may be used for contributions to a 
retirement plan on behalf of any participant.
    ``(c) Exclusion from Unemployment Compensation.--The employment of 
participants under the WORK program shall not be subject to the 
provisions of any Federal or State unemployment compensation law.
    ``(d) Sick and Personal Leave.--The Secretary is authorized to 
issue regulations establishing a minimum number of hours that a 
participant may be on leave from a WORK position due to illness or 
other reasons specified by the Secretary without having the amount of 
wages payable to such participant reduced to account for such leave. In 
accordance with paragraph (1) of this subsection, the regulations shall 
provide that if the employer provides, to similarly situated regular 
employees, paid leave that is equal to or exceeds the minimum 
prescribed by the Secretary, the employer shall also provide such paid 
leave to a participant. If the employer does not provide such paid 
leave, the State agency shall implement such leave.
    ``(e) Records on Retention of Participants.--The entity 
administering the WORK program shall maintain records on the extent to 
which each employer receiving assistance under this part retains 
participants in unsubsidized employment subsequent to the completion of 
WORK assignments.

``SEC. 495. PRE-ASSIGNMENT ACTIVITIES AND SERVICES; PRIORITY OF 
              ASSIGNMENTS; POST-ASSIGNMENT ASSESSMENT

    ``(a) Assignments.--The State plan approved under this part shall 
provide for the establishment and maintenance of a registry, updated 
regularly and frequently, of all registered individuals who are 
awaiting assignment to a WORK position. The State plan shall describe 
the criteria that will generally be applied for determining the order 
in which registered individuals will be assigned to positions. Such 
criteria must provide for assigning, as promptly as an appropriate 
position becomes available, and individual to whom a sanction is being 
applied under section 496(f)(2)(A) (in the case of a first failure to 
comply with a requirement of the WORK program) or who has ended a 
period of time during which a sanction has been applied under section 
496(f)(2) (B), (C), or (D) (in the case of a second or subsequent such 
failure), and thereafter preference will be given to individuals who 
have not previously received a WORK assignment during a period of 
consecutive months while registered for the WORK program.
    ``(b) JOB Search; Other WORK Preparatory Activities.--
            ``(1)(A) Job search.--The State plan under this part shall 
        describe any requirements the State applies to individuals 
        registered for and awaiting assignment to a WORK position, 
        including the extent to which the individual must participate 
        in individual or group job search (not to exceed 35 hours per 
        week) and the period for which the job search must continue or 
        the number of contacts that must be made, or such other measure 
        as the State finds appropriate.
            ``(B) The State agency may require an individual employed 
        in a WORK position or in regular employment to engage in job 
        search but the number of hours per week of required job search 
        (or of the time needed to comply with the job search 
        requirement if measured differently from hours per week) 
        together with the hours per week for which the individual is 
        employed may not exceed 35.
            ``(C) The State agency shall require each individual who 
        has completed an assignment to perform supervised job search 
        (in accordance with the time limits established under paragraph 
        (1)) while awaiting another assignment.
            ``(2) Other activities.--If the State requires that an 
        individual registered under this part and awaiting assignment 
        to a WORK position engage in any activities in addition to job 
        search that would prepare the individual to carry out 
        successfully the assignment or otherwise support achievement of 
        the purposes of this part, the State plan shall describe those 
        activities and the maximum periods of time for which they may 
        be required (or other measure that the State finds 
        appropriate), which may not exceed 35 hours per week.
            ``(3) Child care and other supportive services.--(A) The 
        State agency shall notify each individual registered with the 
        WORK program of the availability (under sections 402(g) (1) and 
        (2)) of child care and other supportive services necessary to 
        permit the individual to participate successfully in the WORK 
        program (during both a pre-assignment period and a period of 
        employment under the WORK program).
            ``(B) A State may, at its option, provide child care and 
        other supportive services (and include an appropriate provision 
        in its plan under this part) to an individual employed in a 
        WORK position to enable or assist such individual also to 
        engage in education or training activities, approved for this 
        purpose by the State agency as likely to enhance such 
        individual's ability to secure and retain permanent, 
        unsubsidized employment, and if the State chooses to provide 
        any one or more such services under this subparagraph, shall 
        notify all registered individuals who are potentially eligible 
        therefor of the availability of such services.
    ``(c) Comprehensive Post-Assignment Assessment.--The State agency 
shall conduct a comprehensive assessment of each individual registered 
with the WORK program after every second assignment completed by such 
individual (or of an individual who has been registered for two years). 
On the basis of this assessment, the State may--
            ``(1) reassign the individual to activities under section 
        402(a)(19)(D) or to the JOBS program (for such period of 
        training and other activities as may be appropriate), or
            ``(2) assign the individual to another WORK position if the 
        individual was unable to find unsubsidized employment either 
        because there were no jobs available that such individual had 
        the necessary skills to fill or because such individual is 
        incapable of working outside of a sheltered environment.
Notwithstanding the preceding sentence, in such cases where the State 
finds that the individual is employable and living in an area where 
there are jobs available to match the individual's skills, the State 
may require the individual to engage in intensive job search, 
supervised by a job developer who may require the individual to apply 
for appropriate job openings to determine if the individual is making a 
good faith effort to find unsubsidized employment. An individual who 
fails without good cause to apply for appropriate job openings, 
cooperate with the job developer or employer, or accept a private 
sector job opening, shall be ineligible for aid under part A or an 
assignment under the State's WORK program for 6 months. Following such 
a period of ineligibility, the State shall reassess such individual's 
status, and may take such steps under this subsection as it finds 
appropriate.

``SEC. 496. FAILURE TO MEET WORK PROGRAM REQUIREMENTS.

    ``(a) Actions That Constitute Failure To Meet WORK Program 
Requirements.--The following actions, without good cause, constitute 
failure by an individual to meet the requirements of the WORK program--
            ``(1) failing or refusing to accept a bona fide offer of 
        unsubsidized employment of at least 20 hours per week (or less 
        if the offered employment meets the criteria specified in 
        section 482(d)(2));
            ``(2) failing or refusing to accept or report for a WORK 
        position to which the individual has been assigned;
            ``(3) voluntarily leaving such a position; or
            ``(4) failing or refusing to engage, to the extent required 
        under the State plan, in the job search or other activities 
        required pursuant to section 495 or subsection (e).
    ``(b) Misconduct Resulting in Discharge From WORK Position.--In 
addition to the actions described in subsection (a), a participant will 
be deemed to have failed to meet the requirements of the WORK program 
if, prior to the completion of an assignment, such participant is 
discharged by an employer from a WORK position due to misconduct.
    ``(c) Definitions of Good Cause and Misconduct.--The Secretary 
shall issue regulations establishing criteria for determining what 
constitutes good cause for purposes of subsections (a) and (g) and 
misconduct for purposes of subsection (b). Such regulations shall, at a 
minimum, include--
            ``(1) with respect to the actions described in paragraph 
        (3) of subsection (a), a requirement that a participant 
        voluntarily leaving a WORK position promptly notify the entity 
        administering the WORK program of the reasons for leaving; and
            ``(2) with respect to discharge for misconduct, a provision 
        allowing the State, with the approval of the Secretary, to 
        apply the criteria relating to misconduct applicable to the 
        disqualification of an individual for benefits under the State 
        unemployment compensation law.
    ``(d) Opportunity for Hearing.--The State plan shall provide 
advance notice to an individual when the State agency determines that a 
sanction should be imposed, and shall advise the individual of the 
right to a hearing. The State agency shall provide a hearing, upon 
request by the individual, in accordance with procedures established by 
the Secretary (which shall allow the State to adopt procedures followed 
in hearings on unemployment compensation claims that meet the standards 
set forth by the United States Supreme Court in Goldberg v. Kelly, 397 
U.S. 254 (1970).).
    ``(e) Interim Activities.--The State agency may require, pending 
the hearing referred to in subsection (d), participation by the 
individual in appropriate activities under the WORK program.
    ``(f) Sanctions.--If, in accordance with the preceding provisions 
of the section, an individual is found to have failed without good 
cause to meet a requirement of the WORK program--
            ``(1) if the failure involves subsection (a)(1) (relating 
        to an offer of unsubsidized employment), the family of which 
        such individual is a member shall be ineligible for aid to 
        families with dependent children (if any such aid were 
        otherwise payable) for a period of six months and such 
        individual may not be assigned to a WORK position during such 
        period; and
            ``(2) if the failure involves paragraph (2), (3), or (4), 
        of subsection (a) or involves subsection (b)--
                    ``(A) in connection with the first of any such 
                failures, the amount of aid for which the family (of 
                which such individual is a member) is eligible shall 
                for one month equal one-half of the amount that would 
                be payable to the family if the individual were 
                awaiting assignment to a WORK position, but such 
                reduction shall cease upon the acceptance by such 
                individual of an assignment to a new WORK position or, 
                in cases involving job search or other required 
                activities (as described in subsection (a)(4)), the 
                individual's engaging in the required program 
                activities;
                    ``(B) in connection with the second of any such 
                failures, the amount of aid so payable shall be reduced 
                as described in subparagraph (A) for a 3-month period 
                and the individual may not be assigned during such 
                period to a new WORK position;
                    ``(C) in connection with the third of any such 
                failure, such family shall be ineligible for any such 
                aid for a 3-month period and the individual may not be 
                reassigned during such period; and
                    ``(D) in connection with the fourth or any 
                subsequent such failure, such family shall be 
                ineligible for any such aid for a 6-month period and 
                the individual may not be reassigned during such 
                period;
but during the months in which a sanction is applied under this 
subsection, the family of which the sanctioned individual is a member 
shall be considered, for purposes of the State's plan approved under 
part A, its plan approved under title XIX, to be receiving aid to 
families with dependent children and for purposes of any other Federal 
or federally-assisted program based on need, such family shall be 
considered to be receiving the amount that would be payable to such 
family if the individual were awaiting assignment to a WORK position. 
Notwithstanding the preceding sentence, if at any time an individual 
subject to a sanction under this subsection accepts an offer of 
unsubsidized employment in a position that meets the criteria for WORK 
positions prescribed by subsection (a)(1), the sanction shall cease at 
that time and both the individual and the family shall be considered, 
for purposes of part A, to be an individual and family no longer 
subject to sanction under this program.
    ``(g) Notwithstanding section 493, no individual who without good 
cause leaves an unsubsidized position that provides 20 hours or more 
per week (or such greater number as the State has elected under section 
482(a)(2)(A)(iii)) on the average, may register under section 493(b) 
for the WORK program (of any State) until after the 3-month period 
beginning on the date on which the individual left the position.
    ``(h) Evaluation Following Second WORK Sanction.--The State plan 
must provide that the State will promptly conduct a thorough evaluation 
of an individual (and family) against whom a second sanction must be 
imposed to determine whether there are particular circumstances, not 
previously recognized by the State agency, that are contributing to the 
individual's failure to meet the requirements of the WORK program, and 
to provide, where appropriate, any additional social services, 
evaluations, or other diagnostic or remedial services or take such 
other actions as may be necessary to assist the individual and protect 
the other family members. In conducting the evaluation, the State 
agency shall consider whether the individual is appropriately 
registered in the WORK program, or whether the individual should be 
referred to the State plan approved under part A to be considered an 
individual to whom section 402(a)(19)(D) applies.''.
    (b) Requirement To Provide Supportive Services to Individuals 
Registered for WORK Program.--Section 402(g)(2) is amended, by striking 
out ``part F'' and inserting in lieu thereof ``part F or part G''.

SEC. 202. FEDERAL FUNDING FOR THE JOBS AND WORK PROGRAMS; PARTICIPATION 
              REQUIREMENTS; MAINTENANCE OF EFFORT AND SUBSTANTIAL 
              IMPLEMENTATION.

    (a) Amount of State's Entitlement for JOBS.--Paragraphs (1) through 
(4) of section 403(k) of the Act are amended to read as follows:
    ``(k)(1) In addition to payments under subsection (a), the 
Secretary shall pay to each State with a plan approved under part F an 
amount equal to the product of--
            ``(A) the State's enhanced Federal medical assistance 
        percentage as defined in subsection (m)(6), and
            ``(B) its expenditures to carry out the program under part 
        F (other than expenditures required by section 402(g)(1)(A) in 
        the case of the 50 States and the District of Columbia),

but payments to a State under this title for any fiscal year for such 
activities may not exceed the limitation under paragraph (2) with 
respect to such State.
    ``(2) The limitation under this paragraph with respect to a State 
for any fiscal year is the amount that bears the same ratio to the 
amount specified in paragraph (3) for such fiscal year as the average 
monthly number of adult recipients (as defined in paragraph (4)) in the 
State in the preceding fiscal year bears to the average monthly number 
of such recipients in all the States for such preceding year.
    ``(3) The amount specified in this paragraph is--
            ``(A) $1,750,000,000 for fiscal year 1996,
            ``(B) $1,700,000,000 for fiscal year 1997,
            ``(C) $1,800,000,000 for fiscal year 1998,
            ``(D) $1,900,000,000 for each of fiscal years 1999 through 
        2004, and
            ``(E) $1,900,000,000, adjusted by the CPI as prescribed by 
        section 406(i), for fiscal year 2005 and each fiscal year 
        thereafter,
reduced by 2 percent (for direct grants to Indian tribes and Alaska 
Native organizations under section 482(i)), and further reduced by 2 
percent (of the amount specified in each subparagraph) (or, in the case 
of fiscal years after 1998, 1 percent) for carrying out section 404 of 
the Work and Responsibility Act of 1994 (relating to demonstrations, 
research and evaluation, and technical assistance) and further reduced 
in fiscal year 1996 by the amount available to the Secretary for 
purposes of special adjustments under subsection (p).
    ``(4) For purposes of this subsection, the term `adult recipient' 
in the case of any State means an individual other than a dependent 
child (unless such child is the custodial parent of another dependent 
child) whose needs are met in whole or in part with payments of aid to 
families with dependent children or wages from a position under the 
WORK program, or a combination of such aid and wages.''.
    (b) Participation Standards for JOBS Program.--Section 403(k) of 
the Act is further amended by adding at the end thereof the following 
new paragraphs:
            ``(6)(A) Notwithstanding any other provision of this 
        subsection--
                    ``(i) if, with respect to a State in a fiscal year, 
                the average monthly number of individuals receiving aid 
                to families with dependent children who are described 
                in subparagraph (B)(i) or (ii) of section 402(a)(19) 
                but are not included in subparagraph (D) thereof who 
                participate in an activity under the JOBS program 
                (including individuals who are employed for the minimum 
                number of hours adopted by the State under section 
                482(a)(2)(A)(iii) or are being sanctioned pursuant to 
                section 402(a)(19)(G)) exceeds 55 percent of the 
                average monthly number of all such individuals, the 
                Secretary shall pay to such State an additional amount 
                (without the requirement of any additional nonfederal 
                share) for use in carrying out its program under part 
                F, and
                    ``(ii) if, with respect to a State, such average 
                monthly number in such year does not exceed 45 percent, 
                then the Secretary shall reduce by 25 percent the 
                Federal matching rate generally applicable to such 
                State's expenditures for aid for each month in such 
                year with respect to the number of individuals by which 
                the average monthly number is less than 45 percent of 
                the total.
        The Secretary shall determine the amount of the additional 
        payments for performance exceeding the standard and shall make 
        such additional payments for a fiscal year by increasing as 
        appropriate the amount payable to such State under subsection 
        (a) up to the amount of the reductions under clause (ii), 
        together with the reductions under subparagraph (C) and 
        subsection (l)(4)(A) for such fiscal year, and if the 
        additional payments exceed such reductions the amount available 
        to the Secretary for such fiscal year under subsection (p) 
        shall be reduced by the amount of such excess.
            ``(B) The Secretary shall issue regulations prescribing 
        criteria for determining what constitutes participation by an 
        individual for purposes of this section, the periods of time 
        over which participation will be measured, and any other 
        matters necessary to implement the provisions of this 
        subsection or of subsection (l).
            ``(C) If the average monthly number of individuals in a 
        fiscal year to whom the State applies section 
        402(a)(19)(D)(vii) exceeds the limit prescribed therein (or 
        such greater limit as the Secretary may have allowed), or if 
        the average monthly number of individuals with respect to whom 
        the State extends the time limit under section 417 exceeds the 
        limit prescribed in section 417(e) (or such greater limit as 
        the Secretary may have allowed), the Secretary shall, 
        notwithstanding any other provision of this section, reduce by 
        25 percent for each month in such fiscal year the Federal 
        matching rate generally applicable to such State's expenditures 
        for aid with respect to the total number of individuals by 
        which such average monthly numbers exceeds such limits.
            ``(D) Notwithstanding subparagraph (A)(i), the Federal 
        payment shall not be increased if the Secretary determines that 
        the State has not accurately recorded the number of months for 
        which individuals to whom section 417 applies have received 
        aid, or has not accurately recorded or reported to the 
        Secretary other required data, to an extent inconsistent with 
        standards for accuracy prescribed in regulations by the 
        Secretary.''.
    (c)(1) Amount of State's Entitlement for WORK.--Section 403(l) of 
the Act is amended by striking out paragraphs (1) through (3) and 
inserting in lieu thereof the following:
    ``(l)(1) In addition to payments under subsections (a) and (k), the 
Secretary shall pay to each State with a plan approved under part G an 
amount to carry out its program under such plan equal to the sum of--
            ``(A) an amount equal to--
                    ``(i) such State's expenditures to operate its WORK 
                program (other than expenditures to which subparagraph 
                (B) applies and expenditures to which section 
                402(g)(1)(A) applies in the case of the 50 States and 
                the District of Columbia), multiplied by
                    ``(ii) the State's enhanced Federal medical 
                assistance percentage as defined in subsection (m)(6), 
                but such amount with respect to a State for any fiscal 
                year may not exceed the limitation under paragraph (2) 
                applicable to such State for such fiscal year, and
            ``(B) an amount equal to--
                    ``(i) the State's expenditures for wages to 
                participants in its program under part G (whether paid 
                directly to the participant, or in the form of wage 
                subsidies to the participant's employer), multiplied by
                    ``(ii) such State's Federal medical assistance 
                percentage, as defined in section 1905(b) (or, where 
                applicable, the last sentence of section 1118).
    ``(2) The limitation under this paragraph with respect to a State 
for any fiscal year is the amount that bears the same ratio to the 
amount specified in paragraph (3) for such fiscal year as the sum of 
(i) the average monthly number of individuals subject to the time limit 
in section 417 (and who are subject to the requirement to participate 
in the program under part F) in such State, and (ii) the average 
monthly number of individuals registered in such State's WORK program, 
bears to the total of such sums of all the States for months in the 
preceding fiscal year.
    ``(3) The amount specified in this paragraph is--
            ``(A) $200,000,000 for fiscal year 1998,
            ``(B) $700,000,000 for fiscal year 1999,
            ``(C) $1,100,000,000 for fiscal year 2000,
            ``(D) $1,300,000,000 for fiscal year 2001,
            ``(E) $1,400,000,000 for fiscal year 2002,
            ``(F) $1,600,000,000 for fiscal year 2003,
            ``(G) $1,700,000,000 for fiscal year 2004, and
            ``(H) $1,700,000,000 adjusted by the CPI as prescribed by 
        section 406(i), and then multiplied by the WORK program factor, 
        as defined in paragraph (4),
reduced by 2 percent (for direct grants to Indian tribes and Alaska 
Native organizations under section 482(i)) and further reduce by 2 
percent (of the amount specified in each subparagraph) (or in the case 
of fiscal years after 1998, 1 percent) for carrying out section 404 of 
the Work and Responsibility Act of 1994 (relating to demonstrations, 
research and evaluation, and technical assistance).
    ``(4) For purposes of determining the amount specified in paragraph 
(3) for any fiscal year, the `WORK program factor' is the ratio of--
            ``(A) the sum of the average monthly number of recipients 
        of aid who are individuals described in section 
        402(a)(19)(B)(i) and WORK registrants (who are not receiving 
        aid) for months in the preceding fiscal year, divided by the 
        sum of the average monthly number of all recipients of such aid 
        and WORK registrants (who are not receiving aid) for months in 
        such preceding fiscal year, to
            ``(B) such quotient with respect to the average monthly 
        numbers for months in fiscal year 2004.''.
    (2) Paragraph (4) of section 403(l) (as in effect prior to 
enactment of this Act) is redesignated as subsection (k)(7) of section 
403.
    (d) Participation Standards for WORK Program.--Section 403(l) of 
the Act is further amended by adding at the end thereof the following 
new paragraphs:
            ``(4)(A) Notwithstanding any other provision of this 
        paragraph, the Federal matching rate applicable to a State's 
        expenditures for aid to families with dependent children for a 
        fiscal year shall be reduced for each month in such year by 25 
        percent with respect to the average monthly number of 
        individuals by which such State fails to meet its WORK 
        participation standard for such year.
            ``(B) For purposes of this paragraph, a State's WORK 
        participation standard is met if--
                    ``(i) the average monthly number of positions to 
                which WORK registrants are assigned is not fewer than 
                the number of such positions that the Secretary 
                requires that the State establish, taking into account 
                the limitation applicable to such State under paragraph 
                (2) for the fiscal year involved, and the amounts of 
                assistance necessary to locate or create WORK 
                positions; or
                    ``(ii) the ratio of--
                            ``(I) the average monthly number of 
                        individuals assigned to positions in the WORK 
                        program, participating in job search as 
                        required by the State plan under part G 
                        following an assignment to a WORK position, but 
                        for a period of no longer than 3 consecutive 
                        months, being sanctioned pursuant to section 
                        496(f) or in unsubsidized employment and not 
                        receiving aid (but who at some time within the 
                        preceding 3 months were participating in the 
                        WORK program), to
                            ``(II) the sum of the average monthly 
                        number of individuals registered with the 
                        State's WORK program and the average monthly 
                        number of individuals in unsubsidized 
                        employment and not receiving aid (but who at 
                        some time within the preceding 3 months were 
                        participating in the State's WORK program), is 
                        not less than 0.80.''.
    (e) Provisions Applicable to Jobs, Work, and Child Care Funding.--
Section 403(m) of the Act is amended to read as follows:
    ``(m)(1) If a State so requests, the limitation applicable to such 
State under subsection (k)(2) for a fiscal year, or the limitation 
applicable to such State under subsection (l)(2) for such fiscal year, 
may be increased (and the other limit decreased equally) by an amount 
up to 10 percent of the sum of such limits for such fiscal year or, if 
less, by the amount of the limit to be decreased. In the case of fiscal 
1997, the State may request that its limit under subsection (k)(2) be 
reduced by up to 10 percent and the amount made available for preparing 
to conduct its WORK program.
    ``(2) If the sum of the amount specified in any fiscal year under 
subsection (k)(3), and the amount specified for such fiscal year under 
subsection (l)(3), exceeds (or if the Secretary estimates that it will 
exceed) the total amount paid (or estimated to be payable) under 
subsections (k)(1) and (l)(1)(A) for such fiscal year, then the 
Secretary shall adjust the maximums applicable to payments to those 
States to which the limits under such subsections have made additional 
payment unavailable under either subsection (k)(1) or (l)(1)(A), and to 
which payments for such fiscal year under either or both such 
subsections would be greater but for the applicability to such States 
of such limits. The Secretary shall by regulation provide for the 
equitable adjustment of such limits in the case where all States' 
requests for adjustment of limits, and additional payments, for a 
fiscal year under this paragraph exceed the amount available for 
reallotment.
    ``(3)(A) If in any fiscal year--
            ``(i) the average rate of total unemployment in a State for 
        such fiscal year equals or exceeds 6.5 percent, and
            ``(ii) the average rate of total unemployment in such State 
        for such fiscal year equals or exceeds 110 percent of such rate 
        for either of the two preceding fiscal years,
the percent applicable to such State for such fiscal year, for purposes 
of applying each of subsections (k)(1)(A), (l)(1)(A)(i), and (n)(1)(A), 
to the extent made possible by the availability of additional amounts 
to such State pursuant to paragraph (2), shall be applied as if it had 
been increased by 10 percent of the difference between 100 percent and 
the rate otherwise applicable in each of such subsections, 
respectively, from the beginning of such fiscal year (but if no such 
additional amount is made available, such rates shall be unaffected by 
this subparagraph).
    ``(B) The amounts specified in subsections (k)(3), (l)(3), and 
(n)(3) for any fiscal year are each increased, if, for either the last 
two quarters of the preceding fiscal year, or the first two quarters of 
the fiscal year involved (but not such last two quarters), the average 
rate of total unemployment in the United States equals or exceeds 7 
percent, by 2.5 percent plus an additional 0.25 percent for each one-
tenth of a percentage point by which the average rate of total 
unemployment in the United States (for such two-quarter period) exceeds 
7 percent.
    ``(4) Notwithstanding the provisions of subsections (k) and (l), no 
amount of a State's expenditures as aid to families with dependent 
children shall be excluded for purposes of payment under subsection (a) 
by reason of the State's failure to meet the participation standards or 
the limit on deferrals (under section 402(a)(19)(D)(vii)) or extensions 
of the time limit (under section 417(e)) applicable to the State's 
program under part F for months in the first year that such program is 
in effect, or by reason of the State's failure to meet the 
participation standard applicable to its program under part G during 
the first year that such program is in effect.
    ``(5) Prior to the general effective date of the amendments to part 
F made by the Work and Responsibility Act of 1994, or the general 
effective date of part G, as the case may be, the Secretary shall issue 
regulations containing the necessary information to permit 
implementation of such standards and application of reductions in 
Federal payment for failure to meet such standards. Not later than 12 
months after such amendments become effective with respect to a State, 
such State shall be required to begin reporting data as required by the 
Secretary in order to determine whether the participation standards 
have been met.
    ``(6) As used in this part, a `State's enhanced Federal medical 
assistance percentage' with respect to expenditures for a fiscal year 
means such State's Federal medical assistance percentage as defined in 
section 1905(b) (or, where applicable as defined in the last sentence 
of section 1118), plus
            ``(A) 5 percentage points, but not less than 65 percent, 
        with respect to fiscal years 1996 and 1997,
            ``(B) 7 percentage points, but not less than 67 percent, 
        with respect to fiscal year 1998,
            ``(C) 9 percentage points, but not less than 69 percent, 
        with respect to fiscal year 1999, and
            ``(D) 10 percentage points, but not less than 70 percent, 
        with respect to fiscal year 2000, and each fiscal year 
        thereafter.''.
    (f)(1) Section 402(g)(3)(A)(i) of the Act is amended by striking 
out ``Federal medical assistance percentage (as defined in section 
1905(b))'' and inserting in lieu thereof ``State's enhanced Federal 
medical assistance percentage (as defined in section 403(m)(6))''.
    (2) Section 402(g)(B)(A)(ii) of the Act is amended by striking out 
``Federal medical assistance percentage (as defined in section 1118)'' 
and inserting in lieu thereof ``State's enhanced Federal medical 
assistance percentage (as defined in section 403(m)(6))''.
    (g) Section 403 of the Act is amended by adding at the end thereof 
the following new subsection:
    ``(o) Notwithstanding the preceding provisions of this section, the 
percentage applicable to a State for purposes of section 402(g)(3)(A) 
and subsections (k)(1)(A), (l)(1)(A)(ii), and (n)(1)(A) (for 
determining the Federal payment with respect to a State's JOBS program 
expenditures, portions of its WORK program expenditures, and its child 
care expenditures, respectively) shall be the State's Federal medical 
assistance percentage, but not less than 60 percent (or, in the case of 
section 402(g)(3)(A) and subsection (n)(1)(A), the State's Federal 
medical assistance percentage) for any fiscal year--
            ``(1) in which the nonfederal share of the sum of its 
        expenditures that may be included for purposes of subsection 
        (a)(3) and its expenditures for its program under part F, its 
        program under part G, and child care services under subsections 
        (g) and (i) of section 402 (not included under subsection 
        (a)(3)) is less than the nonfederal share of expenditures for 
        purposes of subsection (a)(3) and of expenditures (for which 
        Federal matching was provided) under its program under part F 
        and child care services (not included under subsection (a)(3)) 
        under subsections (g) and (i) of section 402 for fiscal year 
        1994 (or fiscal year 1993 if such nonfederal share were greater 
        for such year), or
            ``(2) in which the number of individuals to whom the 
        provisions of section 417 are being applied is less than 90 
        percent of the number of individuals in the State who are 
        custodial parents described in subparagraph (B)(i) of section 
        402(a)(19) (but not included under subparagraph (D) thereof) 
        unless the State has submitted an approvable plan amendment 
        that provides for implementing all statutory requirements to 
        its JOBS program, and meeting related requirements with respect 
        to 90 percent of such individuals within two years of the date 
        such requirements first become effective.''.
    (h) Secretary's Special Adjustment Fund.--Section 403 of the Act is 
amended by adding at the end thereof the following new subsection:
    ``(p)(1) There shall be available to the Secretary from the amount 
appropriated for payments under subsection (k) for States' JOBS 
programs for fiscal year 1996, $300,000,000 for special adjustments to 
States' limitations on Federal payments for their JOBS and WORK 
programs. Amounts made available to the Secretary pursuant to this 
subsection shall also be available for carrying out subsection (k)(6) 
and section 404(c).
    ``(2) A State may, not later than March 1 and September 1 of each 
fiscal year, submit to the Secretary a request to adjust the limitation 
on payments under this section with respect to its JOBS (and, in fiscal 
years after 1997) its WORK programs for the following fiscal year. The 
Secretary shall only consider such a request from a State which has, or 
which demonstrates convincingly on the basis of estimates that it will, 
submit allowable claims for Federal payment in the full amount 
available to it under subsections (k) and (l) in the current fiscal 
year and obligated 95% of its full amount in the prior fiscal year. The 
Secretary shall by regulation prescribe criteria for the equitable 
allocation among the States of Federal payments pursuant to adjustments 
of the limitations referred to in the preceding sentence in the case 
where the requests of all States that the Secretary finds reasonable 
exceed the amount available, and, within 30 days following the dates 
specified in this paragraph, will notify each State whether one or more 
of its limitations will be adjusted in accordance with the State's 
request and the amount of the adjustment (which may be some or all of 
the amount requested).
    ``(3) The Secretary may adjust the limitation on Federal payments 
to a State for a fiscal year under subsection (k) and under subsection 
(l), and upon a determination by the Secretary that (and the amount by 
which) a State's limitation should be raised, the amount specified in 
either such subsection, or both, shall be considered to be so increased 
for the following fiscal year.
    ``(4) The amount made available under subsection (a) for special 
adjustments shall remain available to the Secretary until expended. 
That amount shall be reduced by the sum of the adjustments approved by 
the Secretary in any fiscal year, and the amount shall be increased in 
a fiscal year by the amount by which all States' limitations under 
subsection (k), (l), and (n) for a fiscal year exceeded the sum of the 
Federal payments under such subsections for such fiscal year (after 
application of subsection (m)(2)), but for fiscal years after 1977, 
such amount at the end of such fiscal year shall not exceed 
$400,000,000.''.

SEC. 203. ADMINISTRATION OF THE JOBS AND WORK PROGRAMS.

    (a) State Option.--Part G of title IV of the Act is amended by 
adding at the end thereof the following new section:

                            ``administration

    ``Sec. 497. (a) The chief executive officer of any State with a 
plan approved under part A may designate a State agency (hereinafter 
referred to as the `JOBS/WORK agency'), other than the agency 
established or designated under section 402(a)(3) (hereafter referred 
to as the `part A agency') to administer (or supervise the 
administration of) the JOBS program under part F and the WORK program 
under this part in such State.
    ``(b) The JOBS/WORK agency designated under this section and the 
part A agency shall jointly submit the State plan required by parts F 
and G, and shall enter into and provide to the Secretary an agreement 
setting out the responsibilities of each agency. Any such agreement 
shall provide--
            ``(1) that the part A agency will retain responsibility 
        for--
                    ``(A) determining initial and continuing 
                eligibility of applicants for and recipients of (and 
                the amount of) aid to families with dependent children;
                    ``(B) maintaining accurate records of the number of 
                months for which each individual received aid, and 
                notifying individuals of the remaining months of 
                eligibility, in accordance with the preceding 
                provisions of this title;
                    ``(C) applying sanctions when appropriate under the 
                provisions of section 402(a)(19)(G) or 496(f); and
                    ``(D) affording an opportunity for a fair hearing 
                as required by section 402(a)(4), or in connection with 
                any disagreement (with adverse consequences) about the 
                application of section 417 (other than matters about 
                which the JOBS/WORK agency provides a hearing);
            ``(2) that each agency agrees to cooperate with the other 
        in order to exchange all information necessary to carry out the 
        programs involved in a manner that simplifies as much as 
        possible the burden on recipients of aid under part A, and 
        participants in the programs under parts F and G, and allows 
        the most effective administration of all programs involved;
            ``(3) a specific description of how responsibility will be 
        allocated and coordinated between the two agencies for the 
        following functions:
                    ``(A) determining to which individuals section 
                402(a)(19)(D) is applicable;
                    ``(B) determining the individuals to whom 
                extensions under section 417(e) are to be granted (and 
                the length of such extensions); and
                    ``(C) conducting reviews, and providing dispute 
                resolution measures, including fair hearings in 
                appropriate cases, on disagreements arising out of 
                requirements under the JOBS or WORK program; and
            ``(4) that the requirements of paragraphs (4), (5), (6), 
        (9), (19), and (21)(A) of section 402(a) will be applicable as 
        appropriate to the joint plan submitted under this section to 
        the same extent (and together with all relevant regulations 
        issued thereunder by the Secretary) as they are to a State plan 
        submitted under part A.
    ``(c) In each State in which the chief executive officer designates 
an agency under subsection (a), the Secretary shall make payment to the 
agency so designated in the case of payments required under subsections 
(k) and (l) of section 403, rather than to the State's part A agency, 
and the JOBS/WORK agency so designated shall be responsible for the 
proper expenditure of such funds.
    ``(d) Upon designation by the chief executive officer under 
subsection (a), and approval by the Secretary of the State plan 
submitted in accordance with this section, all references (whether 
direct or by context) in this Act to the State agency responsible for 
the State plan under part A shall be deemed to be references to the 
agency designated under this section when referring to a function or 
responsibility of such agency.
    ``(e) In any State administering a Statewide one-stop career center 
system for the provision of employment and training services, as 
defined by the Secretary in conjunction with the Secretary of Labor, 
the Governor shall ensure that the programs under parts F and G--
            ``(1) participate in the operation of such system, and
            ``(2) make employment and training services available to 
        participants through the one-stop career centers.''.

SEC. 204. SPECIAL PROVISIONS RELATING TO INDIAN TRIBES AND ALASKA 
              NATIVE ORGANIZATIONS.

    (a) Authority to Administer JOBS and WORK Programs.--Section 482(i) 
of the Act is amended--
            (1) by redesignating paragraphs (5), (6), (7), and (8) as 
        paragraphs (6), (7), (8), and (9), respectively, and
            (2) by amending paragraphs (1) through (4) of such 
        subsection to read as follows:
            ``(1)(A) An Indian tribe or Alaska Native organization may 
        apply to the Secretary to conduct both a JOBS program under 
        this part, and a WORK program under part G. An application to 
        conduct these programs in a fiscal year must 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 the succeeding provisions of this subsection 
        shall be made directly to the tribe or organization involved.
            ``(B) Neither the JOBS program nor the WORK program set 
        forth in the application of an Indian tribe or Alaska Native 
        organization submitted under subparagraph (A) need meet any 
        requirement under this part or part G or under section 
        402(a)(19) that the Secretary determines is inappropriate for 
        such program.
            ``(C) The JOBS and WORK programs of 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 programs are not being 
        conducted in substantial conformity with the terms of the 
        application approved under subparagraph (A). Following 
        voluntary termination of an application, or termination by the 
        Secretary of an application of an Indian tribe or Alaska Native 
        organization, such tribe or organization shall not be eligible 
        to submit a new application under subparagraph (A) with respect 
        to any year before the sixth year following such termination.
            ``(2) The Secretary shall pay directly to each Indian tribe 
        or Alaska Native organization with an application approved to 
        conduct a JOBS program under this part and a WORK program under 
        part G for a fiscal year an amount (without the requirement of 
        any non-Federal share) which bears the same ratio to 2 percent 
        of the sum of the amounts specified in sections 403(k)(3) and 
        403(l)(3) for such fiscal year as the adult Indian or Alaska 
        Native population receiving aid to families with dependent 
        children residing within the area to be served by the tribe or 
        organization bears to the total of such adults receiving such 
        aid residing within all areas which any such tribe or 
        organization could serve. The Secretary shall from time to time 
        review the components of the ratios established under the first 
        sentence of this subparagraph to determine whether the 
        individual payments under this subsection continue to reflect 
        accurately the distribution of population among the grantees, 
        and shall make adjustments necessary to maintain the correct 
        distribution of funding.
            ``(3) A grantee under this subsection may use up to 20 
        percent of its payment for the JOBS program, or for the WORK 
        program, as the case may be, for a fiscal year to carry out 
        such program in the following fiscal year, and up to 10 percent 
        of such payment for either such program to carry out the other 
        such program in the fiscal year for which the payment was made.
            ``(4) At the request of a grantee, the Secretary may 
        approve use of up to 10 percent (or, if less, $5000) of the 
        payment for the JOBS program in connection with an economic 
        development project upon a demonstration by the grantee that 
        such project will include provision for training JOBS program 
        participants in skills necessary for employment on the project.
            ``(5) An application under this subsection shall provide 
        that (upon approval) the grantee will be responsible for 
        determining whether an individual (within the grantee's service 
        area) to whom the time limits of section 417 apply is one to 
        whom section 402(a)(19)(D) is applicable, and whether (and for 
        how long) extensions of the time limit under section 417 should 
        be provided and for reporting to the State agency making 
        payments of aid to the individuals served by the grantee the 
        determinations made under this paragraph''.
    (b) Child Care.--Section 403 is amended by adding after and below 
subsection (b) the following new subsection:
    ``(c)(1) Each Indian tribe and Alaska Native organization 
submitting an application under section 482(i) to administer its JOBS 
and WORK programs under parts F and G, respectively, may also submit to 
the Secretary (as a part of the application) a description of the child 
care needs of its JOBS and WORK program participants, and of the 
program that it will implement to meet such needs, and request direct 
funding for the provision of all such child care. The child care 
program described need not meet any requirement of this part (other 
than the requirements of section 402(g)(1)(A)(viii)) that the Secretary 
determines is inappropriate with respect to such child care program.
    ``(2) The Secretary shall pay to each Indian tribe and each Alaska 
Native organization whose application approved under section 482(i) 
includes a request for direct funding for child care an amount (without 
the requirement of a nonfederal share) to provide child care for 
recipients of AFDC and for participants in the tribe's or 
organization's JOBS and WORK programs, and to provide transitional 
child care with respect to an individual who is eligible for child care 
under section 402(g)(1)(A)(ii). The amount of the payment provided 
under the preceding sentence for a fiscal year shall not exceed the 
total amount payable directly to such tribe or organization under 
section 482(i).
    ``(3) The provisions of sections 402(g)(1)(A) (i) and (ii) shall 
not be construed as imposing any obligation upon a State to provide 
child care for the children of JOBS or WORK program participants 
included within an approved application under section 482(i) that 
includes a request for direct funding of child care, during the period 
for which such direct funding is provided.
    ``(4) The Secretary shall establish data collection and reporting 
requirements, and performance standards, with respect to child care 
programs implemented under this subsection.''.

SEC. 205. SPECIAL RULES FOR THE TERRITORIES.

    ``(a) Exclusion From General Ceiling of JOBS, WORK, and ``At-Risk'' 
Child Care.--Section 1108(a) of the Act is amended by striking out, in 
the matter preceding paragraph (1), ``section 403(k)'' and inserting in 
lieu thereof ``subsection (k), (l)(1), or (n) of section 403''.
    (b) Section 482 of the Act is amended by adding at the end thereof 
the following new subsection:
    ``(j) Options for Territories.--(1) In General.--Puerto Rico, the 
Virgin Islands, Guam, and American Samoa may each determine whether the 
provisions of section 417 shall be applicable under its State plan 
approved under part A, and, if so, part G shall be applicable. Each 
State exercising the option in the preceding sentence shall submit the 
necessary plan amendments and plans to the Secretary for approval. Any 
such plan or plan amendment must also describe with respect to such 
section 417 and part G (and all related amendments) a phase-in strategy 
and a timetable for achieving full implementation.
    ``(2) Secretarial waivers.--The Secretary may waive or modify any 
requirement pertaining to the provisions of section 417, the program 
required under part G, or the requirements of part A (including 
participation rates and performance standards) that, as established 
with reference to the 50 States and the District of Columbia, would be 
inappropriate for a State to which this subsection applies.
    ``(3) Termination.--The applicability of section 417 and part G to 
a State to which this section applies may be terminated voluntarily by 
such State, but following any such termination, such State shall not be 
eligible to exercise the option with respect to any year before the 
sixth year following such termination.''.

SEC. 206. TRAINING AND EMPLOYMENT FOR NON-CUSTODIAL PARENTS.

    Section 482 of the Act is amended by adding at the end thereof the 
following new subsection:
    ``(j) Training and Employment for Non-Custodial Parents.--
            ``(1) The Secretary shall approve the application of a 
        State to conduct a program of training and employment 
        opportunities for noncustodial parents that meets the 
        requirements of this subsection.
            ``(2) An application to conduct a program under this 
        subsection shall--
                    ``(A) describe the political subdivision or 
                subdivisions, or other identifiable areas of the State 
                where the program will be conducted,
                    ``(B) describe the services that will be provided 
                to participants, including the training, job readiness 
                services, and employment opportunities that will be 
                available, and indicate whether these will be provided 
                through the program under this part or under part G (or 
                both) or whether some or all of the activities under 
                this subsection will be conducted as a separate 
                program,
                    ``(C) describe the supportive services that will be 
                provided to enhance the participant's involvement in 
                the program and ability to obtain employment and meet 
                his or her child support obligations,
                    ``(D) indicate whether the State will conduct a 
                random assignment evaluation of the effects of the 
                program on improved responsibility in meeting child 
                support obligations, and
                    ``(E) provide assurance that the State's program 
                will comply with the requirements of this subsection.
            ``(3) The application must provide that a noncustodial 
        parent will be eligible to commence participation in the 
        program under this subsection if his or her child is receiving 
        aid to families with dependent children (or the child's 
        custodial parent is receiving wages in connection with the 
        program under part G), or if the noncustodial parent owes past-
        due child support which has been assigned to the State agency 
        administering the State plan approved under part A and is 
        unemployed. Paternity must be established before a noncustodial 
        father may enter the program, and the noncustodial parent must 
        be cooperating in the establishment of a child support 
        obligation and the entry of an award. If a parent who has been 
        participating in the program ceases to be eligible therefor 
        because the child with respect to whom the support obligation 
        exists is no longer eligible for aid to families with dependent 
        children (and the custodial parent is not receiving wages in 
        connection with the program under part G), the State must 
        nonetheless allow the participant to complete the training or 
        program activity.
            ``(4) A State conducting a program under this subsection 
        shall not be required--
                    ``(A) to accept all applicants even though they 
                meet the criteria of paragraph (3), or
                    ``(B) to provide the same training, services, or 
                employment opportunities to all participants,
        and the State shall not require--
                    ``(C) that individuals participate in the JOBS 
                program (or in education or training activities 
                comparable or similar to the JOBS program) as a 
                prerequisite to participation in the WORK program (or 
                comparable program of subsidized employment), or
                    ``(D) that the custodial parent of an individual's 
                child be participating in the JOBS program under part F 
                or the WORK program under part G as a condition of such 
                individual's eligibility to participate in the program 
                under this subsection.
            ``(5) The State agency shall assure that wages will be paid 
        for work performed by the participant and may provide for the 
        payment of training stipends.
            ``(6)(A) The State agency shall garnish subsidized wages, 
        or any stipends, paid in connection with a non-custodial 
        parent's participation in the program under this subsection, 
        and remit them to the State agency administering the State plan 
        approved under part D for distribution as a child support 
        collection in accordance with the provisions of that part.
            ``(B) The State may provide, if, with respect to an 
        individual participating in the program under this subsection, 
        it has jurisdiction over the child support obligation being 
        enforced that hours of participation in program activities may, 
        or a reasonable basis, be credited to reduce amounts of past-
        due child support owed to such State agency by the individual.
            ``(7)(A) A State with an application approved under this 
        subsection may use, for carrying out the program described in 
        such application in any fiscal year, up to 10 percent of the 
        sum of the amounts available to it for such fiscal year under 
        subsection (k)(2) and (l)(2) of section 403. The State shall be 
        entitled to so much of such amount as equals the percentage 
        specified in section 403(k)(1)(A) multiplied by its 
        expenditures necessary to carry out its approved application.
            ``(B) A State may include, as expenditures necessary to 
        carry out its approved application, amounts expended for 
        stipends, wage subsidies, supportive services, training, and 
        administrative costs of the State agency directly related to 
        the program under this subsection.''.

SEC. 207. FEDERAL TAX TREATMENT OF WORK REMUNERATION.

    (a) Work Remuneration Ineligible for Earned Income Tax Credit.--
Subparagraph (B) of section 32(c)(2) (defining earned income for 
purposes of the Earned Income Tax Credit) of the Internal Revenue Code 
of 1986 is amended by striking ``and'' at the end of clause (ii), by 
striking the period at the end of clause (iii) and inserting in lieu 
thereof ``, and'', and by inserting after clause (iii) the following 
clause:
                            ``(iv) no amount of remuneration received 
                        for services provided in a WORK position to 
                        which the taxpayer was assigned under part G of 
                        title IV of the Social Security Act shall be 
                        taken into account.''.
    (b) WORK Remuneration Ineligible for Targeted Jobs Tax Credit.--
Section 51(b) (defining qualified wages for purposes of the Targeted 
Jobs Tax Credit) of the Internal Revenue Code of 1986 is amended by 
inserting after paragraph (3) the following new paragraph (4):
            ``(4) Special rules for work positions.--
                    ``(A) Qualified wages.--No amount of remuneration 
                received for services provided in a WORK position to 
                which an employee was assigned under part G of title IV 
                of the Social Security Act shall be treated as 
                qualified wages.
                    ``(B) Qualified first-year wages.--The 1-year 
                period described in paragraph (2) is determined without 
                regard to the period in which the employee provided 
                services in a WORK position to which the employee was 
                assigned under part G of title IV of the Social 
                Security Act.''.
    (c) WORK Remuneration Not Subject to FUTA.--Section 3306(b) 
(defining wages for purposes of the Federal unemployment tax) of the 
Internal Revenue Code of 1986 is amended by striking ``or'' at the end 
of paragraph (15), by striking the period at the end of paragraph 16 
and inserting in lieu thereof ``, or'', and by inserting after 
paragraph (16) the following paragraph:
            ``(17) remuneration paid for services provided in a WORK 
        position to which the employee was assigned under part G of 
        title IV of the Social Security Act.''.
    (d) WORK Remuneration Excluded From Gross Income.--The Internal 
Revenue Code of 1986 is amended by redesignating section 137 
(containing certain cross references) as section 138, and by inserting 
after section 136 the following section:
    Sec. 137. WORK Program Remuneration.--Gross income shall not 
include any remuneration received for services provided in a WORK 
position to which the individual was assigned under part G of title IV 
of the Social Security Act.''.

                         TITLE III--CHILD CARE

SEC. 301. CHILD CARE FOR JOBS AND WORK PROGRAM PARTICIPANTS AND AT-RISK 
              FAMILIES.

    (a) Guarantee While in WORK or JOBS Program.--(1) Section 
402(g)(1)(A)(i)(I) of the Act is amended by striking out the semicolon 
and inserting in lieu thereof ``(including employment under part G, or 
other required activities under such part);''.
    (2) Section 402(g)(1)(A)(i) of the Act is amended--
            (A) by striking out ``(including participation in a program 
        that meets the requirements of subsection (a)(19) and part 
        (F))'', and
            (B) by striking out ``approves the activity'' and inserting 
        in lieu thereof ``approves the activity as part of the 
        individual's employability plan under part F (regardless of 
        whether resources are available to provide other services or 
        pay for other activities to carry out such plan)''.
    (b) Transitional Child Care After Leaving Work Program.--
            (1) Section 402(g)(1)(A)(ii) of the Act is amended 
        immediately following ``aid to families with dependent 
        children'' by inserting ``or wages under the program under part 
        G''.
            (2)(A) Clause (iii) of section 402(g)(1)(A) of the Act is 
        amended by inserting before the period at the end thereof ``or 
        wages under part G''.
            (B) Clause (iv) of such section is amended immediately 
        after ``aid to families with dependent children'' by inserting 
        ``or wages under part G''.
    (c) Health and Safety Standards; Continuity of Care.--(1) For 
Recipients.--Section 402(g)(1)(A) of the Act is amended by adding at 
the end thereof the following new subparagraphs:
                                    ``(viii) Child care guaranteed 
                                under this section, whether provided by 
                                a method permitted under subparagraph 
                                (B) or by means of an agreement under 
                                subsection (j) with the lead agency 
                                designated under the Child Care and 
                                Development Block Grant Act of 1990 
                                (hereafter referred to as the `CCDBG 
                                Act'), must meet all health and safety 
                                standards established by the lead 
                                agency (for purposes of the CCDBG Act), 
                                and, in addition to any other 
                                requirements imposed pursuant to that 
                                Act, the State agency must establish 
                                immunization requirements and assure 
                                (and any such agreement must provide) 
                                that, consistent with regulations of 
                                the Secretary (I) children whose child 
                                care is paid for, in whole or in part, 
                                under this subsection will be required 
                                to have received all immunizations, at 
                                the appropriate times, as currently 
                                recommended by the Advisory Committee 
                                on Immunization Practices (an advisory 
                                committee established by the Secretary, 
                                acting through the director of the 
                                Centers for Disease Control and 
                                Prevention) as specified on the 
                                pediatric vaccines list referred to in 
                                section 1928(e), and (II) child care 
                                providers used will take steps to 
                                assure that toxic substances, weapons, 
                                and any other items at the location 
                                where the child care is provided that 
                                could be harmful to young children, 
                                will be secured and unobtainable by the 
                                children.
                                    ``(ix) The State plan must assure 
                                that child care provided under this 
                                subsection will conform in all ways to 
                                the provisions for parental choice, 
                                unlimited parental access, handling of 
                                parental complaints, and consumer 
                                education, as well as to all the other 
                                standards, criteria, and requirements 
                                applicable to child care provided under 
                                the CCDBG Act.
                                    ``(x) The State agency may, at its 
                                option, provide or authorize the 
                                provision of child care under this 
                                subsection (and if it exercises this 
                                option, shall so advise the lead agency 
                                designated under the CCDBG Act, if it 
                                has an agreement with such agency under 
                                subsection (j)) to a child for such 
                                periods of time as are necessary to 
                                assure continuity of care even though, 
                                for such periods, the individual whose 
                                participation in the program under part 
                                F or part G or whose employment is 
                                enabled by the child care may have 
                                temporary interruptions in employment 
                                or training.''.
    (2) For At-Risk Families.--Section 402(i) of the Act is amended by 
redesignating paragraphs (5) and (6) as paragraphs (8) and (9), 
respectively, and by inserting after paragraph (4) the following new 
paragraphs:
            ``(5) Child care provided under this subsection, whether 
        provided by a method permitted under paragraph (2) or by means 
        of an agreement under subsection (j) with the lead agency 
        designated under CCDBG Act, must meet all health and safety 
        standards established by the lead agency (for purposes of the 
        CCDBG Act), and, in addition to any other requirements imposed 
        pursuant to that Act, the State agency must establish 
        immunization requirements and assure (and any such agreement 
        must provide) that, consistent with the regulations of the 
        Secretary (i) children whose child care is paid for, in whole 
        or in part, under this subsection will be required to have 
        received all immunizations, at the appropriate times, as 
        currently recommended by the Advisory Committee on Immunization 
        Practices (as advisory committee established by the Secretary, 
        acting through the director of the Centers for Disease Control 
        and Prevention) as specified on the pediatric vaccines list 
        referred to in section 1928(e), and (ii) child care providers 
        used will take steps to assure that toxic substances, weapons, 
        and any other items at the location where the child care is 
        provided that could be harmful to young children, will be 
        secured and unobtainable by the children.
            ``(6) The State plan must assure that child care provided 
        under this subsection will conform in all ways to the 
        provisions for parental choice, unlimited parental access, 
        handling of parental complaints, and consumer education, as 
        well as to all other standards, criteria, and requirements 
        applicable to child care provided under the CCDBG Act.
            ``(7) The State agency may, at its option, provide or 
        authorize the provision of child care under this subsection 
        (and if it exercises this option, shall so advise the lead 
        agency designated under the CCDBG Act, if it has an agreement 
        with such agency under subsection (j)) to a child for such 
        periods of time as are necessary to assure continuity of care 
        even though, for such periods, the individual whose employment 
        is enabled by the child care may have temporary interruptions 
        in employment.''.

SEC. 302. RELATED AMENDMENTS.

    (a) Child Care for Participants in the JOBS or WORK Program, and 
Transitional Child Care.--Section 402(g) of the Act is amended--
            (1) by striking out, in paragraph (1)(A)(vii), ``a sliding 
        scale formula'' and all that follows and inserting in lieu 
        thereof ``the sliding fee scales established by the lead agency 
        designated under the Child Care and Development Block Grant Act 
        of 1990 as required by section 658E(c)(5) of that Act.'';
            (2) by amending paragraph (1)(C)(i) by striking out clause 
        (II) and inserting in lieu thereof ``an amount not less than 
        the amount provided in the State plan pursuant to this clause 
        for January 1994.'';
            (3) by amending paragraph (3)(B) by adding ``and'' after 
        clause (i), striking out ``applicable standards'' and all that 
        follows in clause (ii) and inserting in lieu thereof ``all 
        requirements, standards, and criteria applicable to child care 
        funded under the CCDBG Act.'', and by repealing clause (iii); 
        and
            (4) by repealing paragraphs (4) and (5).
    (b) At-Risk-Child Care.--Section 402(i) of the Act is amended--
            (1) in paragraph (3)(A), by striking out ``a sliding scale 
        formula'' and all that follows and inserting in lieu thereof 
        ``the sliding fee scales referred to in subsection 
        (g)(1)(A)(vii).'';
            (2) in paragraph (8)(B) (as redesignated by section 
        401(c)(2)), by striking out ``applicable standards of State and 
        local law;'' and inserting in lieu thereof ``all requirements, 
        standards, and other criteria applicable to child care funded 
        under the CCDBG Act;
            (3) by repealing subparagraphs (C) and (D) of such 
        paragraph (8); and
            (4) by amending paragraph (9) (as redesignated) to read as 
        follows:
            ``(9) In order to facilitate more accurate analysis of the 
        supply and quality of child care resources, the demand for such 
        resources that cannot currently be satisfied, and the 
        effectiveness and relationship of Federal programs providing 
        support for child care and child development activities, the 
        Secretary shall specify by regulation a core set of 
        consistently defined data elements for child care which must be 
        used by each State with respect to all reports relating to 
        child care or child development activities supported in whole 
        or in part under this Act or under the CCDBG Act.''.

SEC. 303. LIMITATION OF AT-RISK CHILD CARE TO FAMILIES INELIGIBLE FOR 
              RECIPIENT OR TRANSITIONAL CHILD CARE.

    Section 402(i)(1)(A) of the Act is amended to read as follows:
                    ``(A) is not eligible for child care under 
                subsection (g);''.

SEC. 304. OPTION TO CONSOLIDATE STATE RESPONSIBILITY FOR CHILD CARE.

    (a) State Option.--Section 402 of the Act is amended by adding at 
the end thereof the following new subsection:
    ``(j)(1) In order to provide the child care which must be 
guaranteed pursuant to subsection (g) or which may be furnished 
pursuant to subsection (i), the State agency may enter into an 
agreement with the lead agency designated under section 658D of the 
CCDBG Act under which--
            ``(A) subject to paragraph (2), the State agency will pay 
        (either in advance or as reimbursement) the lead agency for the 
        cost of providing child care for any child with respect to whom 
        care must be guaranteed under subsection (g) or is to be 
        furnished under subsection (i), and the lead agency agrees that 
        care for all such children will only be paid for from such 
        reimbursement; and
            ``(B) that (i) all child care provided by the lead agency 
        under the agreement, whether directly or by contractual or 
        other arrangements, will be subject to the same requirements, 
        standards, and other criteria as are applicable to child care 
        funded under the CCDBG Act, and (ii) parents and children to 
        whom such care is provided will be offered all the same 
        protections and procedural safeguards as are applicable to 
        child care furnished under the CCDBG Act.
    ``(2) Limits of Reimbursement.--The State agency shall not pay the 
lead agency for care provided to a child an amount (A) less than the 
minimum permitted under subsection (g)(1)(C)(i)(II) and specified by 
the State for fiscal year 1994 in its plan approved under this part nor 
(B) in excess of the amount described in subsection (g)(1)(C) or 
(i)(3)(B), whichever may be applicable to the child involved, and, with 
respect to children to whom subsection (i)(3)(B) applies, the State 
agency shall be obligated to pay the lead agency for child care 
furnished in a fiscal year only to the extent of appropriations 
available for such purpose for such fiscal year.
    ``(3) Single State Agency.--Nothing in this subsection shall be 
construed as precluding the designation of the agency established or 
designated under section 402(a)(3) as the lead agency for purposes of 
the CCDBG Act. No agreement shall be necessary in the case where the 
same agency is designated under both the CCDBG Act and this Act, but 
the agency shall, as lead agency, comply with all the provisions of 
this subsection.''.

SEC. 305. FUNDING FOR QUALITY IMPROVEMENT AND LICENSING ACTIVITIES 
              BENEFITTING CHILDREN RECEIVING AFDC OR AT-RISK CHILD 
              CARE.

    (a)(1) Licensing and Monitoring Costs.--Section 402(g)(3) of the 
Act is amended by adding at the end thereof the following new 
subparagraph:
                    ``(C) In determining the amount expended by a State 
                for purposes of section 403(a)(3), the Secretary shall 
                allow the State to include an amount, determined in 
                accordance with a formula prescribed by the Secretary, 
                to reimburse the State for expenditures in connection 
                with licensing, monitoring, and similar activities with 
                respect to child care providers in the State. The 
                formula adopted by the Secretary shall reflect either 
                the number of children for whom child care is 
                reimbursed under section 403(a), the number of child 
                care providers in the State furnishing such child care, 
                or both, and any other factors which the Secretary 
                determines it would be equitable to consider. The total 
                payment to all States pursuant to this subparagraph 
                shall not exceed $15,000,000 for any fiscal year.''.
    (2) The amendment made by paragraph (1) shall be effective for 
fiscal years after 1995.
    (b) Supply and Quality Improvement Activities.--Section 402(i) of 
the Act is amended by redesignating paragraph (9) (as previously 
redesignated) as paragraph (10) and inserting after and below paragraph 
(8) the following:
            ``(9) Of the amount available to a State for any fiscal 
        year under section 403(n), 10 percent of such amount may be 
        paid by the Secretary with respect to expenditures for those 
        activities to improve the quality of child care in the State 
        described in section 458G of the Child Care and Development 
        Block Grant Act (referred to in this subsection as the `CCDBG' 
        Act) and to increase the availability in low-income communities 
        of child care appropriate for infants and very young children 
        in a variety of settings. Either the State agency administering 
        the plan approved under this part or the lead agency designated 
        under the CCDBG Act may conduct such activities (in which case 
        the State agency shall pay to the lead agency the amount 
        provided by the Secretary for this purpose pursuant to the 
        preceding sentence).''.

SEC. 306. FUNDING OF CHILD CARE FOR FAMILIES AT RISK OF WELFARE 
              DEPENDENCY.

    (a) Federal Funding.--Section 403(n) is amended--
            (1) in paragraph (1)(A), by striking out ``the Federal 
        medical assistance percentage as defined in section 1905(b))'' 
        and inserting in lieu therof ``the State's enhanced Federal 
        medical assistance percentage (as defined in subsection 
        (m)(6))''; and
            (2) in paragraph (2), by amending subparagraph (B) to read 
        as follows:
                    ``(B) The amount specified in this subparagraph 
                is--
                            ``(i) $300,000,000 for fiscal year 1995,
                            ``(ii) $500,000,000 for fiscal year 1996,
                            ``(iii) $600,000,000 for fiscal year 1997,
                            ``(iv) $700,000,000 for fiscal year 1998, 
                        and
                            ``(v) $1,000,000,000 for fiscal year 1999,
                            ``(vi) $1,050,000,000 for fiscal year 2000,
                            ``(vii) $1,100,000,000 for fiscal year 
                        2001,
                            ``(viii) $1,150,000,000 for fiscal year 
                        2002,
                            ``(ix) $1,200,000,000 for fiscal year 2003,
                            ``(x) $1,300,000,000 for fiscal year 2004, 
                        and
                            ``(xi) the product of $1,300,000,000 
                        adjusted by the CPI as prescribed in section 
                        406(i) and the ratio of the child population in 
                        the United States for the most recent preceding 
                        fiscal year for which such data are available, 
                        to such population for the second most recent 
                        preceding fiscal year,

                reduced by 2 percent (or, in the case of fiscal years 
                after 1998, 1 percent) for carrying out section 404 of 
                the Work and Responsibility Act of 1994.''.
    (b) Reallotment of At-Risk Child Care Funds.--Section 403(n)(3)(C) 
of the Act (permitting a one-year carryover by a State of unclaimed 
Federal funds for at-risk child care) is amended to read as follows:
                    ``(C) If the amount specified in subparagraph (B) 
                for any fiscal year exceeds (or if the Secretary 
                estimates that it will exceed) the total amount paid 
                (or estimated to be payable) under paragraph (1) for 
                such fiscal year, then the Secretary shall provide 
                additional payments to States whose expenditures 
                pursuant to section 402(i) for such year exceed their 
                limitation on Federal payment under paragraph (2). The 
                Secretary shall by regulation provide for the equitable 
                reallotment of any amounts available in the case where 
                all States' claims for a fiscal year under this 
                subparagraph exceed the amount available for 
                reallotment.''.

SEC. 307. SUPPLEMENT TO INCOME DISREGARD.

    (a) Requirement.--Section 402(g)(1)(B) of the Act is amended by 
adding at the end thereof the following new sentence: ``If the State 
agency guarantees child care by applying the income disregard provision 
in subsection (a)(8)(A)(iii) in determining the amount of aid to be 
paid for a month, the State agency shall offer the caretaker relative 
the option of receiving care under another arrangement pursuant to this 
subparagraph, or, alternatively, the State agency shall reimburse the 
caretaker relative for expenditures for child care for such month in an 
amount equal to the excess of such expenditures (or, if less, the 
maximum amount that may be paid for the type of child care involved, as 
determined under subparagraph (C)) over the amount that is disregarded 
under such subsection.''.
    (b) Notice.--Section 402(g)(1)(A)(i) of the Act is amended by 
striking out the period at the end and inserting in lieu thereof a 
semicolon and adding after and below clause (II) the following: ``and 
if the State agency applies the income disregard provision in 
subsection (a)(8)(A)(iii) without reimbursement under subparagraph (B) 
for any additional cost, it shall advise each such family that they 
also have the option to have the State agency provide child care under 
another arrangement pursuant to subparagraph (B).''.

         TITLE IV--PROVISIONS WITH MULTI-PROGRAM APPLICABILITY

SEC. 401. PERFORMANCE STANDARDS.

    Section 487 of the Act is amended to read as follows:

``SEC. 487. PERFORMANCE STANDARDS.

    ``(a) Development of Factors To Be Measured.--In order to specify a 
set of outcome-based performance measures to which the Secretary can 
thereafter apply standards of achievement to define successful State 
JOBS and WORK programs (with appropriate variations in the factors to 
be measured, and the standards applied, among the States and for 
programs directly administered by Indian tribes or Alaska Native 
organizations), the Secretary shall develop recommendations for factors 
to be measured in assessing such programs, together with specific 
elements to be examined and the methodology for collecting the 
necessary data. Factors to be recommended shall include the percentage 
of a State's AFDC caseload subject to the time limits in section 417 
who receive aid for 24 cumulative months and may include factors such 
as those considered under section 106 of the Job Training Partnership 
Act, as well as--
            ``(1) the increase in employment and level of earnings of 
        program participants after leaving the JOBS and WORK programs,
            ``(2) the retention of program participants for significant 
        periods of time in unsubsidized employment,
            ``(3) the decrease in the rate of dependency on welfare of 
        participants' families,
            ``(4) the improvement in the long-term economic well-being 
        of families with children with a family member who previously 
        participated in one or both such programs, and
            ``(5) such other factors as the Secretary finds 
        appropriate.
The Secretary shall solicit views on the recommendations from the 
Secretary of Labor, the Secretary of Education, and other Federal, 
State, and local officials (and representatives of associations of such 
officials) from both the executive and the legislative branches of 
government, and from other individuals and organizations with expertise 
in the fields of social welfare, education and training programs for 
children and adults, employment-related programs and social and 
supportive services related to these areas, as well as from community-
based organizations and former and current program participants. Based 
upon the consultations and consideration of the views provided 
regarding the recommended factors, the Secretary shall, not later than 
October 1, 1996, publish in the Federal Register the factors to be 
measured in assessing States' performance in administering the programs 
established under parts F and G.
    ``(b) Development of Performance Standards.--(1) Recommendations.--
In order to set standards of achievement to be applied to each of the 
factors to be measured as defined in accordance with subsection (a), 
the Secretary shall, not later than April 1, 1998, develop recommended 
standards to be applied to each of the factors. Views on these 
recommended standards shall be solicited from officials, organizations, 
and individuals broadly representative of the groups described in 
subsection (a). Based upon the consultations and consideration of the 
comments received from these sources, the Secretary shall, not later 
than October 1, 1998, publish in the Federal Register the standards to 
be applied to the measurement factors.
    ``(2) Requirements.--The performance standards described in 
paragraph (1) shall include provisions governing cost-effective methods 
for obtaining such data as are necessary to carry out this section 
which, notwithstanding any other provision of law, may include access 
to earnings records, State employment security records, records 
collected under the Federal Insurance Contributions Act (chapter 21 of 
the Internal Revenue Code of 1986), State aid to families with 
dependent children records, and the use of statistical sampling 
techniques, and similar records or measures, with appropriate 
safeguards to protect the confidentiality of the information obtained.
    ``(c) Incentives and Penalties.--The Secretary shall recommend and, 
not later than October 1, 1998, issue regulations prescribing 
incentives for States meeting or exceeding the performance standards 
adopted pursuant to subsection (b), and penalties for States failing to 
meet such standards. In developing such regulations, the Secretary 
shall study and consider the relationship between penalties and 
incentives as a means of achieving the proposed standards. The 
Secretary will consider whether the penalties and incentives set are 
sufficient to insure that a State which incurs the costs necessary to 
obtain the desired outcomes is financially better off than one that 
does not. Such regulations shall also include provisions for delay of 
any penalty when the Secretary finds it appropriate to afford a State 
sufficient time to develop and (with the Secretary's approval) 
implement a corrective action plan which, if successful, will obviate 
the application of a penalty, and provision for furnishing technical 
assistance to any State in order to improve its program and avoid the 
application of a penalty.
    ``(d) The Secretary shall, from time to time, and in consultation 
with officials, organizations, and individuals broadly representative 
of the groups referred to in subsection (a), review and, if 
appropriate, propose modifications to the factors to be measured, the 
standards of performance, or the incentives and penalties, and after 
opportunity for review and comment, modify any one or more of such 
items.
    ``(e) The Secretary shall on an annual basis make public the level 
of performance achieved by each State as compared to the applicable 
standard.
    ``(f)(1) Each State with a plan approved under this part shall 
collect and furnish such data as the Secretary may require to assist in 
the development of the factors to measure performance (pursuant to 
subsection (a)) and the development of standards to be applied to those 
factors (pursuant to subsection (b)).
    ``(2) Each State with a plan approved under this part shall 
establish methods to solicit, on a regular and ongoing basis, the views 
of participants in the program under this part, and in the WORK program 
under part G, and of employers of participants from both programs, on 
the quality and effectiveness of the services provided under the 
program. Participants and employers may provide either oral or written 
views, and the State should use a range of methods to obtain such 
views, including written questionnaires and group interviews and 
discussions. The information obtained from participants and employers 
shall be analyzed by the State and a summary of the information, 
together with the State's analysis, made available for use in improving 
the administration of the JOBS and WORK programs.

SEC. 402. AFDC QUALITY CONTROL SYSTEM AMENDMENTS.

    (a) Expanded Purpose.--Section 408(a) of the Act is amended to read 
as follows:
    ``(a) In General.--In order (1) to improve the accuracy of payments 
of aid to families with dependent children, and wages under the WORK 
program under part G, to assess the accuracy of State reported data 
relating to its JOBS and WORK programs and to its implementation of the 
time limits established by section 417, (2) to determine the number of 
individuals to whom the State found applicable section 402(a)(19)(D) 
(by each of the categories enumerated within such section) and the 
number of individuals with respect to whom an extension of the time 
limit under section 417 was provided (by each of the categories 
enumerated within section 417(e)), (3) to determine whether 
participation standards under section 403 have been met, (4) to assess 
the effectiveness of the State's program by applying the performance 
standards developed under section 487, and (5) to serve such other 
purposes as the Secretary finds appropriate for a performance 
measurement system, the Secretary shall establish and operate a quality 
control system to secure the accurate data needed to measure 
performance, identify areas in which corrective action is necessary, 
and determine the amount (if any) of the disallowance required to be 
repaid to the Secretary because of erroneous payments of aid made by 
the State, or its failure to meet such participation or performance 
standards.''.
    (b) Additional Data Required To Be Sampled.--Section 408(h) of the 
Act is amended--
            (1) by redesignating paragraphs (2) through (6) as 
        paragraph (3) through (7), respectively,
            (2) by adding after and below paragraph (1) the following 
        new paragraph:
            ``(2) payments of aid that will be considered, for purposes 
        of this section, to be erroneous payments because of a State's 
        exceeding the limits specified in section 402(a)(19)(D) or 
        417(e), and the State's failure to achieve the participation 
        rates specified in section 403, or to meet the performance 
        standards developed pursuant to section 487, and the additional 
        data elements to be included in a sample (and whether as part 
        of the sample review under subsection (b) or separately) in 
        order to determine whether such participation rates have been 
        achieved, and the extent to which the State has met such 
        performance standards;''; and
            (3) by amending paragraph (3) (as redesignated) by 
        inserting before the semicolon ``and matters relating to the 
        size and selection of samples and relating to the methodology 
        for making statistically valid estimates of the State's 
        compliance with the limits referred to in paragraph (2) and its 
        achievement of participation rates and performance (measured 
        against such standards) achieved by the State''.
    (c) State Studies.--Section 408(h) is amended by adding at the end 
thereof the following new sentence: ``Expenditures by a State to 
conduct studies approved by the Secretary to test and improve its 
quality control system, and adapt it to the full range of purposes 
described in subsection (a) shall, notwithstanding any other provision 
of law, be considered for purposes of section 403(a)(3) to be necessary 
for the proper and efficient administration of the State's plan 
approved under this part.''.
    (d) Conforming Amendment.--Section 408(b)(5) of the Act is 
amended--
            (1) in subparagraph (A), by striking out ``subsection 
        (h)(3)'' and inserting in lieu thereof ``subsection (h)(4)'', 
        and
            (2) in subparagraph (B), by striking out ``subsection 
        (h)(4)'' and inserting lieu thereof ``subsection (h)(5)''.
    (e) Consultation.--The Secretary of Health and Human Services shall 
consult with the State agencies administering programs under parts A, 
F, and G of title IV of the Act, and with others knowledgeable about 
design and administration of quality control systems and performance 
measurements systems, and thereafter, but not later than April 1, 1995, 
report to the Congress and publish in the Federal Register the proposed 
rules necessary to effectuate the amendments to section 408 of the Act 
made by this section.

SEC. 403. NATIONAL WELFARE RECEIPT REGISTRY; STATE INFORMATION SYSTEMS.

    (a) Federal Responsibilities.--Part A of title IV of the Act is 
amended by adding after section 410 the following new section:

                  ``national welfare receipt registry

    ``Sec. 411. (a) Establishment.--In order to assist States in 
administering their State plans approved under this part, part F, and 
part G, the Secretary shall establish and maintain an automated 
registry, to be known as the National Welfare Receipt Registry, 
containing information reported by each State agency administering a 
plan approved under this part concerning individuals receiving (or who 
have received) aid to families with dependent children or wages under a 
State's WORK program under part G.
    ``(b) Information To Be Maintained.--There shall be maintained in 
the Registry, at a minimum, the following information with respect to 
each individual in the family who has received aid to families with 
dependent children:
            ``(1) The individual's name, date of birth, and social 
        security account number.
            ``(2) The months for which aid was provided (with respect 
        to such individual), including months in which no aid was paid 
        with respect to such individual because a sanction was being 
        applied pursuant to section 402(a)(19)(G), section 402(a)(26), 
        or section 496(f).
            ``(3) Months in which section 402(a)(19)(D) was applicable 
        to the individual.
            ``(4) Months during which an extension under section 417 
        (e) was provided with respect to an individual.
            ``(5) Months in which an individual was registered with the 
        State's WORK program under part G and months in which the 
        individual was assigned to a position under part G.
            ``(6) Such other information as the Secretary may determine 
        would assist in the administration of the programs involved, 
        including the performance measurement of one or more of such 
        programs.
    ``(c) Use of Information.--(1) To Whom Provided.--The Secretary 
shall promptly respond to requests by a State agency administering a 
plan approved under this part for information with respect to one or 
more individuals, identified by name and social security number. The 
Secretary shall furnish such information electronically, and if such an 
individual has previously received (or is receiving) aid to families 
with dependent children, or was registered under a program pursuant to 
part G, identify the State making payment of aid or administering the 
program under part G for each month involved or indicate that the 
requested information is not in the Registry.
    ``(2) Regulations.--The Secretary shall prescribe rules pertaining 
to--
            ``(A) the format in which and process by which States must 
        submit the information maintained under subsection (b);
            ``(B) the format in which and process by which States must 
        submit requests (and responses will be furnished to such 
        requests) for information under this subsection;
            ``(C) the safeguards that the State must adopt to assure 
        that requests are submitted, and responses received, only by 
        personnel authorized by the State agency to perform these 
        functions; and
            ``(D) steps that the State must take to safeguard any 
        information received from the Registry, and assure that it will 
        not be redisclosed except to the extent permitted under section 
        402(a)(9) or under this section.
The Secretary shall take into consideration in developing and issuing 
rules under this subsection the varying levels of capability among the 
States to monitor, provide, and receive by electronic means the 
information to be maintained in the Registry, and shall allow in such 
rules a State to adopt alternatives to the generally applicable 
requirements if the State demonstrates that its alternative will be 
effective in reporting, receiving and using the information to be 
maintained in the Registry and the State has in effect an advance 
planning document approved under section 402(e).
    ``(d) The Secretary shall not be liable to either a State or an 
individual for inaccurate information provided to the Registry by one 
State and reported by the Secretary to a second State.
    ``(e) The Secretary may disclose information in the Registry, in 
addition to disclosure to States for the purposes described above, 
only--
            ``(1) to the Social Security Administration in order to 
        verify the accuracy of, and as necessary to correct, the social 
        security account numbers of individuals about whom information 
        has been reported, and for use by the Social Security 
        Administration in determining the accuracy of payments under 
        the Supplemental Security Income program under title XVI, or 
        for use in connection with benefits under title II, as may be 
        relevant,
            ``(2) to the Internal Revenue Service for purposes directly 
        connected with the administration of the earned income tax 
        credit under section 32 of the Internal Revenue Code of 1986, 
        or the advance payment of such credit under section 3507 of 
        such Code or for verification of a dependency exemption claim 
        in an individual's tax return or in connection with the 
        dependent care tax credit,
            ``(3) to the Secretary of Labor (or the State agency 
        administering the State's program under title III of the Act) 
        for purposes directly connected with the administration of the 
        unemployment compensation program under title III (or under a 
        State law with respect to which the Secretary of Labor 
        certifies payment under such title), and
            ``(4) for research purposes found by the Secretary to be 
        likely to contribute to achieving the purposes of this part or 
        part F or G, but without personal identifiers.
    ``(f) There are authorized to be appropriated to establish the 
National Welfare Receipt Registry, $6,000,000 for fiscal year 1995, and 
to operate the Registry, $4,000,000 for each of fiscal years 1996 
through 1999.''.
    (b) State Responsibilities.--Section 402(a) of the Act is amended 
by adding after paragraph (28) the following new paragraph:
            ``(29) provide--
                    ``(A) that information will be reported to the 
                National Welfare Receipt Registry, at such times, in 
                such format and by such process as the Secretary shall 
                prescribe pursuant to section 411;
                    ``(B) that the State agency will request from such 
                Registry, and from the other Registries maintained as 
                part of the National Welfare Reform Information 
                Clearinghouse established pursuant to section 453A, in 
                such manner as the Secretary may prescribe, and will 
                use all information that would facilitate the proper 
                and efficient operation of the State's programs under 
                this part and parts F and G, and
                    ``(C) that the State agency will cooperate with any 
                other State agency administering or supervising the 
                administration of a plan approved under this part in 
                order to resolve any disagreement between an individual 
                seeking aid under such a plan (or seeking to 
                participate in a program under part G) and the State 
                about the correctness of information it reported to the 
                Registry and report to the Registry any corrections to 
                be made in the data contained in the Registry;''.
    (c) State Automated Information System.--Section 402(a)(30) of the 
Act is amended to read as follows:
            ``(30)(A) provide for an automated system which manages, 
        monitors, and reports the information in paragraph (29) 
        efficiently and economically, and for security against 
        unauthorized access to, or use of, the data in such system; and
            ``(B) at the option of the State, provide for the 
        establishment and operation, in accordance with an (initial and 
        annually updated) advance planning document approved under 
        subsection (e), of a statewide automated information system to 
        assist in the administration of the State plan approved under 
        this part through automated procedures and processes in any one 
        or more of the following areas--
                    ``(i) to assist in performing intake and referral 
                functions;
                    ``(ii) to assist in providing the child care 
                services required under subsection (g)(1), and 
                available under subsection (i), and coordinating the 
                provision of such services with those provided in the 
                State under the Child Care and Development Block Grant 
                Act, in an efficient manner that eliminates (or at 
                least minimizes) the disruption of service to children 
                and families and assists the State in monitoring the 
                quality, cost, and delivery of such services; or
                    ``(iii) to assist in the administration of the 
                State's plan approved under part F, including 
                monitoring the delivery of employment and training 
                services and related support services, and to manage 
                the information necessary to administer and assess its 
                programs under parts F and G;
and to provide for security against unauthorized access to, or use of, 
the data in such system and, if the State elects to implement any such 
automated system, may also develop and implement a system (or, if more 
cost-effective, enhance an existing system) for determining eligibility 
for any payment amount of aid under this part;''.
    (d) Development of Model Automated Information Management 
Systems.--Section 413 of the Act (including its heading) is amended to 
read as follows:

            ``model automated information management systems

    ``Sec. 413. (a)(1) The Secretary shall, in partnership with States, 
design and develop model automated support and case management systems 
to assist States in the operation, managing, tracking, and reporting in 
each of the program areas described in section 402(a)(30)(A) and 
clauses (i), (ii), and (iii) of section 402(a)(30)(B), and thereafter 
provide necessary technical assistance to States choosing to adopt such 
model.
    ``(2) Two or more States may determine to collaborate in developing 
model automated support and case management systems to assist them in 
operating, managing, tracking, and reporting in each of the program 
areas described in section 402(a)(30) and, in such case, the Secretary 
shall provide all appropriate technical assistance, and otherwise 
cooperate with the States' collaboration to develop systems that meet 
all the requirements of this part.
    ``(b) The model system developed by the Secretary under subsection 
(a)(1), or the system developed collaboratively by States under 
subsection (a)(2), must meet the following criteria--
            ``(1) with respect to payment of aid under the State's plan 
        approved under this part, the system must be capable of 
        assisting in performing the intake and Federal function;
            ``(2) with respect to the State's child care programs under 
        this part, as well as under the CCDBG Act, the system must be 
        capable of assisting in--
                    ``(A) identifying and establishing the eligibility 
                of families with children in need of child care, and 
                determining the appropriate program under which to pay 
                for such care;
                    ``(B) determining the continuing eligibility of 
                such families for such care, and planning for and 
                monitoring services provided to such families;
                    ``(C) processing payments and other financial data 
                needed for the management of the child care programs, 
                and
                    ``(D) producing necessary management reports for 
                the efficient and effective administration of the child 
                care programs, including the generating of required 
                financial and statistical reports;
            ``(3) with respect to the State's JOBS and WORK programs 
        under parts F and G respectively, the system must be capable of 
        assisting in--
                    ``(A) assessing a participant's service needs in 
                relation to stated goals,
                    ``(B) developing an appropriate employability plan, 
                and
                    ``(C) monitoring and recording the individual's 
                attendance at or participation in all required program 
                activities.
        In the case of each of the State's systems described in 
        paragraphs (1), (2), and (3), the system must also be capable 
        of exchanging data electronically with related Federal 
        electronic data systems and other such systems of the State, 
        and providing such other information necessary to assess the 
        State's program performance against the standards established 
        by the Secretary under section 487.
    ``(c) There are authorized to be appropriated to carry out 
subsection (a), $7,500,000 for each of fiscal years 1995 and 1996.
    ``(d)(1) In addition to the technical assistance required in 
connection with the model systems described in subsection (a)(1), the 
Secretary shall provide for such training, and furnish such technical 
assistance as may be appropriate to enable States to develop and 
implement automated management systems as promptly and in as cost-
effective a manner as possible.
    ``(2) There are authorized to be appropriated $1,000,000 for each 
fiscal years 1995 through 1999 to carry out this subsection.''.
    (e) Enhanced Matching.--Section 403(a) of the Act is amended--
            (1) by redesignating paragraph (3) as paragraph (3)(A) and 
        striking out ``and'' at the end thereof, and
            (2) by adding after and below such paragraph the following:
                    ``(B) if the Secretary determines that the 
                modification of a State's system that meets the 
                requirements of section 402(a)(30)(A) will be cost-
                effective, or that a State's automated management 
                information system uses any one or more of the 
                Secretary's models developed under section 413(a)(1), 
                or is based on a State collaboration under section 
                413(a)(2), Federal payments with respect to such 
                systems shall equal 80 percent (or, if greater, the 
                State's enhanced Federal medical assistance percentage, 
                as defined in subsection (m)(6)) of a State's 
                expenditures under its approved advance planning 
                document for the cost of developing and implementing 
                any such system collaborative project; and
                    ``(C) notwithstanding any other provision of this 
                section, the total amount payable by the Secretary with 
                respect to expenditures, (during the five-year period) 
                to which subparagraph (B) applies shall not exceed 
                $800,000,000 to be distributed among the States, and to 
                make available at such time or times over the five-year 
                period, as is provided in regulations issued by the 
                Secretary, taking into account the relative size of 
                State caseloads and the levels of automation needed to 
                meet the requirements of this title, and payments under 
                subparagraph (B) shall be made at such times and in 
                such manner as provided in subsection (b) and the 
                advance planning document approved under section 
                402(e).'', and
            (3) by striking out ``section 403(a)(3)'' in subparagraph 
        (C) of section 402(g)(3) of this Act, as added by section 
        305(a)(1) of this Act, and inserting in lieu thereof ``section 
        403(a)(3)(A)''.
    (f) Revision of Advance Planning Document Requirement.--Section 
402(e) of the Act is amended to read as follows:
    ``(e)(1) The Secretary shall not approve the Advance Data Planning 
document referred to in subsection (a)(30), unless such document, when 
implemented, will economically, efficiently, and effectively carry out 
the objectives of the automated, statewide, management information 
systems referred to in such subsection, and such document provides a 
plan to address the State's approach, schedule, needed resources, and 
cost-benefit of the project.
    ``(2) The Secretary shall, on a continuing basis, review, access, 
and inspect the planning, design, and operation of the statewide 
management information systems approved under subsection 403(a)(3)(B), 
to determine whether, and to what extent, such systems meet and will 
continue to meet requirements imposed under this part.''.

SEC. 404. RESEARCH AND EVALUATION; TECHNICAL ASSISTANCE; DEMONSTRATION 
              PROJECTS.

    (a) Funding.--There shall be available to the Secretary of Health 
and Human Services (hereafter in this section referred to as the 
``Secretary'') for carrying out the projects and other activities 
specified in this section, and other such activities related to the 
provisions of this Act, in a fiscal year an amount equal to 2 percent 
(or, in the case of fiscal years after 1998, 1 percent) of the sum of 
the amounts specified in subsections (k)(3), (l)(3), and (n)(2)(B) of 
section 403 of the Social Security Act for such fiscal year.
    (b) Research and Evaluation.--In addition to any other research and 
evaluation found appropriate by the Secretary pertaining to the new 
programs and amendments to existing programs added to the Social 
Security Act by the provisions of this Act, the Secretary shall, in 
consultation with the Secretary of Labor and the Secretary of Education 
conduct, in accordance with scientifically-acceptable methodology, the 
following studies of the time-limited program of assistance together 
with training and preparation for employment, followed by a program of 
required employment or employment-related activities:
            (1) A two-phase implementation study of--
                    (A) the initial steps taken by States and political 
                subdivisions to implement the new programs and 
                requirements established by the amendments made by this 
                Act, as well as the obstacles faced, institutional 
                arrangements entered into, and recommendations of such 
                States and political subdivisions based on their 
                experiences, and thereafter
                    (B) the experiences of States and localities after 
                the new programs and requirements have been 
                substantially implemented, including a study of the 
                program design, services provided, funding levels, 
                participation rates, and recommendations of the 
                administering agencies, and a review of the impact of 
                these new programs and requirements on the State and 
                local administration of the programs, including 
                management systems, staffing structures, and the 
                culture of the welfare programs.
            (2) An evaluation in a variety of States and localities, 
        using random assignment of individuals to treatment and control 
        groups, and other appropriate rigorous methods, to examine the 
        effectiveness of time-limited assistance in helping 
        participants achieve self-sufficiency, and the corresponding 
        effect on unemployment rates, reduction of welfare dependency 
        and teen pregnancy, the effects on income levels, family 
        structure, and children's well-being among participant groups.
            (3) Together with the Secretary of Labor, a comprehensive 
        national study after the WORK program (under part G of title IV 
        of the Act) has been in effect for 2 years to measure the 
        program's success in assisting participants to obtain 
        unsubsidized employment, and to evaluate skill levels and 
        barriers to employment in the case of individuals who have not, 
        after participating in such program for 2 years, been able to 
        obtain unsubsidized employment.
    (c) Technical Assistance.--In addition to any other specific 
authorization in the Social Security Act for technical assistance, the 
Secretary is authorized to offer a broad range of technical assistance 
to States (including Indian tribes and Alaska Native organizations) and 
territories, including training, consultations, and fostering the 
exchange of information among States and others about practices, 
strategies, and techniques that are proving effective.
    (d) Placement Demonstration Projects.--The Secretary is authorized 
to approve up to 10 demonstrations of innovative techniques to increase 
the number of placements of participants in the JOBS program (under 
part F of title IV of the Social Security Act) in positions of 
unsubsidized employment with significant retention rates. No more than 
5 such demonstrations shall test the use by the State of a private 
organization, pursuant to a contractual arrangement under which the 
organization will place JOBS program participants in employment, and no 
more than 5 such demonstrations shall involve the use of placement 
bonuses payable to State or local agency employees who effectuate 
successful placements. All the projects shall specify performance 
standards (based on placement and retention rates) to measure 
successful performance, and, in the case of projects involving the use 
of private agencies, shall also specify the services that must be made 
available to clients, both before and after the placement, and indicate 
whether the organization will also serve participants in the State's 
WORK program (under part G of title IV of the Social Security Act.)
    (e) Work-for-Wages Demonstration Pro- jects.--The Secretary is 
authorized to approve up to 5 local demonstration projects to test the 
development, implementation, and effectiveness of WORK programs 
conducted outside the context of the State's AFDC program. Any project 
approved under this subsection must include the following elements:
            (1) The State agency administering the State's AFDC program 
        (under part A of title IV of the Social Security Act) must 
        close the case when an individual to whom section 417 applies 
        (as added by section 104 of this Act) reaches the time limit 
        specified in such section.
            (2) Each individual involved in the demonstration must be 
        advised of the procedures that must be followed to apply for 
        the WORK-for-Wages Project, and may not be denied an 
        opportunity to participate if such individual would be eligible 
        to participate in the State's WORK program under part G of such 
        title.
            (3) Each individual will be afforded the opportunity to 
        earn wages in a position of employment and WORK stipends if 
        necessary to provide at least the income level of the State's 
        AFDC program (after application of the $120 per month earned 
        income disregard for work expenses) in the case of a similarly 
        situated family (and States conducting projects will be 
        encouraged to standardize, to the extent consistent with the 
        preceding provisions of this paragraph, the amount of the 
        stipends), but no payment of either wages or the stipend will 
        occur unless the individual has worked or participated in an 
        alternative project-specified activity such as job search, 
        interim community service, or other activity designed by the 
        project.
            (4) Those elements of the WORK program under part G of 
        title IV of the Act which the Secretary determines are 
        essential to achieve its objectives, while protecting the 
        interests of participants in the program and others involved in 
        or affected by the project, will be retained and applied in the 
        project.
    (f) Work Support Agency Demonstrations.--The Secretary is 
authorized, in consultation with the Secretary of Labor, the Secretary 
of Agriculture, and the Secretary of the Treasury, to approve 
demonstration projects in up to 5 States, under which the State 
establishes a Work Support Agency to provide a broad and coordinated 
array of services and assistance to individuals who are former 
recipients of aid to families with dependent children to assist them in 
retaining unsubsidized employment. Services may include assistance in 
obtaining other benefits or payments for which the individual is still 
eligible, assistance in dealing with short-term family problems which 
could otherwise jeopardize continuation of the employment relationship, 
short-term or one-time financial aid to meet unusual employment-related 
needs and any other aid or services that support the individual's 
ability to retain or, where necessary, secure employment.
    (g) Demonstration Projects for Noncustodial Parents.--In order to 
encourage the development of innovative parenting programs for 
noncustodial parents that build upon existing programs for high-risk 
families, such as the Head Start program, the Healthy Start program, 
the Even Start program, and the Family Preservation and Support 
program, the Secretary is authorized to make grants to States, Indian 
tribes and Alaska Native organizations, or community-based 
organizations to conduct demonstration projects designed to improve the 
parenting skills of noncustodial parents with particular emphasis on 
matters such as the importance of parental involvement and economic 
security in the healthy development of children. The applicant shall 
describe the services to be provided, and the way in which project 
services will be coordinated with one or more of the programs or 
initiates referred to in the preceding sentence.
    (h) The Secretary shall, with respect to all demonstrations 
authorized under this section, prescribe--
            (1) the minimum length of such projects in order to assure 
        the value of the project,
            (2) the assignment techniques and other requirements for 
        the methodologies so that the results will be scientifically 
        acceptable,
            (3) the required financial contribution by the project 
        applicant,
            (4) types of expenditures that may be included under the 
        project,
            (5) the timing and nature of required reports and the 
        procedures to be followed in conducting the evaluation and 
        review of project results, and
            (6) any other rules that the Secretary finds appropriate to 
        assure the integrity of the demonstration, and to protect the 
        rights and interests of program participants who are assigned 
        to the demonstration.

SEC. 405. OFFSETS TO MANDATORY SPENDING FROM REDUCED FRAUD, WASTE, AND 
              ABUSE.

    (a) Certifications.--In order to assure achievement of the 
reductions in mandatory spending assumed in the cost estimates 
accompanying this Act, beginning in fiscal year 1998, and each of the 
five succeeding fiscal years is--
            (1) the Secretary of Health and Human Services shall 
        certify to the Director of the Office of Management and Budget 
        that each of the systems of data bases included in the National 
        Welfare Reform Information Clearinghouse established by Section 
        453A of the Social Security Act, (as added by section 625 of 
        this Act) are both receiving data from and providing data to 
        State and Federal agencies, and otherwise fully complying with 
        all requirements imposed by or pursuant to the provisions of 
        the Social Security Act establishing, and requiring use of the 
        components, of the Clearinghouse, and
            (2) the Director of the Office of Management and Budget 
        shall determine whether, and if so certify that, all such data 
        were used fully and by the Federal agencies to which it was 
        supplied in order to reduce fraud, waste, and abuse in the 
        programs it administers and in compliance with the requirements 
        imposed by or pursuant to the Social Security Act and 
        subsection (d).
    (b) Alternative Reductions in Mandatory Spending.--If the Director 
of the Office of Management and Budget, after consultation with the 
Secretary of Health and Human Services, certifies, prior to the close 
of a fiscal year, as provided in subsection (a)(2), that, 
notwithstanding the full use of data as described in subsection (a) and 
States' implementation of applicable requirements of the Social 
Security Act, mandatory spending was not reduced (when compared to the 
levels estimated had the Clearinghouse not been established and used) 
by the amount projected in the cost estimates, then in the succeeding 
fiscal year the following reductions in spending shall occur, in the 
sequence stated, to the extent necessary to reduce mandatory spending 
by the difference between the amount that it was estimated would be 
saved (or avoided) in the year (in which the certifications are made) 
and the amount certified by the Director as having been saved (or 
avoided)--
            (1) the amount made available to the Secretary of Health 
        and Human Services under section 404(a) of this Act for 
        research, demonstrations, and technical assistance, and the 
        amount available under section 452(j) of the Social Security 
        Act (as added by section 616 of this Act) for technical 
        assistance to States with respect to child support enforcement 
        programs (each such amount being reduced proportionately); and, 
        if necessary,
            (2) amounts otherwise payable under section 403(a)(3) of 
        the Social Security Act (as amended by this Act) to States 
        which have not fully implemented all the requirements imposed 
        by or pursuant to the Social Security Act for full use of the 
        data available from any part of the National Welfare Reform 
        Information Clearinghouse shall be reduced by 3 percent (or 
        such lesser amount as is necessary to achieve the necessary 
        reductions in mandatory spending).
    (c) Related Amendments.--Section 1137(a)(2) of the Act is amended 
by striking out ``such Code,'' and inserting in lieu thereof ``such 
Code, and information available from any Registry maintained under the 
National Welfare Reform Information Clearinghouse established under 
section 453(A) (or, prior to the full establishment and operation of 
the Director of New Hires, from systems of similar information 
maintained by any other State, where cost-effective),''.
    (d) The Social Security Administration and the Secretary of the 
Treasury shall each request and fully use all information in the 
registries maintained under the National Welfare Reform Information 
Clearinghouse established under section 453A of the Social Security Act 
to the extent that such information may be useful in carrying out their 
statutory responsibilities and reducing fraud, waste, and abuse.

                   TITLE V--PREVENTION OF DEPENDENCY

SEC. 501. SUPERVISED LIVING ARRANGEMENTS FOR MINORS.

    (a) Section 402(a)(43) of the Act is amended by striking out ``at 
the option of the State,''.
    (b) Such section is further amended in subparagraph (A)(i) by 
striking out ``, or reside in a foster home'' and all that follows down 
to the semicolon.
    (c) Such section is further amended--
            (1) by amending so much of subparagraph (B) as precedes 
        clause (i) to read ``(B) in the case where--'',
            (2) by striking out the semicolon at the end of each 
        numbered clause in such subparagraph and inserting in lieu 
        thereof a comma, and
            (3) by adding after and below clause (v) of such 
        subparagraph the following: ``subparagraph (A) shall not be 
        applicable, but the State agency shall assist the individual in 
        locating an appropriate adult-supervised supportive living 
        arrangement taking into consideration the needs and concerns of 
        the minor, (or may determine 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, 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;''.

SEC. 502. STATE OPTION TO LIMIT BENEFIT INCREASES FOR ADDITIONAL FAMILY 
              MEMBERS.

    (a) State Option.--Section 402(a) of the Act is amended--
            (1) by striking out ``and'' after paragraph (44);
            (2) by striking out the period after paragraph (45) and 
        inserting in lieu thereof ``; and''; and
            (3) by adding at the end thereof the following new 
        paragraph:
            ``(46) at the option of the State, provide that--
                    ``(A) subject to subparagraphs (B), (C), and (D), 
                the amount of aid to families with dependent children 
                paid to a family under the plan will not be increased 
                by reason of the birth of a child to an individual 
                included in such family for purposes of making the 
                determination under paragraph (7) and applying 
                paragraph (8), or will be increased less than the 
                amount that would be paid with respect to such child if 
                such child had been a member of the family when the 
                family first applied for aid, (but any such child will 
                be considered to be a recipient of aid for all other 
                purposes, including title XIX) if--
                            ``(i) in the case where the individual is a 
                        custodial parent of a dependent child, the 
                        child was conceived in a month for which the 
                        individual received aid under the plan, or
                            ``(ii) in the case where the individual is 
                        a dependent child, the individual is the parent 
                        of another child who is a member of the same 
                        family and whose needs are included for 
                        purposes of making such determination;
                    ``(B) services will be offered under paragraph (15) 
                to all appropriate family members;
                    ``(C) there will be disregarded, in making the 
                determination under paragraph (7) and before applying 
                the provisions of paragraph (8), an amount of income 
                equal to any increase in aid that would have been paid 
                but for subparagraph (A) that is derived from child 
                support collected with respect to the child referred to 
                in paragraph (A), earned income of a member of the 
                family referred to in such subparagraph, or from any 
                other source specified in the plan that the Secretary 
                may approve as consistent with the objectives of this 
                paragraph; and
                    ``(D) the provisions of subparagraph (A) will not 
                be applied in case of rape or in any other cases that 
                the State agency finds would violate standards of 
                fairness and good conscience.''.
    (b) Matching for Related Administrative Costs.--Section 403(a)(3) 
of the Act is amended by striking out the semicolon and inserting in 
lieu thereof ``or counseling or referral services (but no other types 
of family planning services) furnished pursuant to section 
402(a)(15);''.

SEC. 503. CASE MANAGEMENT FOR PARENTS UNDER AGE 20.

    Section 482(b) of the Act, as amended by section 102(2) of this 
Act, is further amended by--
            (1) redesignating paragraph (4) as paragraph (4)(A),
            (2) striking out ``The State agency'' in such paragraph 
        (4)(A) and inserting in lieu thereof ``Except as provided in 
        subparagraph (B), the State agency'', and
            (3) by inserting after and below paragraph (4)(A) the 
        following:
                    ``(B) The State agency shall--
                            ``(i) assign a case manager to each 
                        custodial parent receiving aid under part A who 
                        is under age 20;
                            ``(ii) provide that case managers will have 
                        the training necessary (taking into 
                        consideration the recommendations of 
                        appropriate professional organizations) to 
                        enable them to carry out their responsibilities 
                        and will be assigned a caseload the size of 
                        which permits effective case management; and
                            ``(iii) provide that the case manager will 
                        be responsible for--
                                    ``(I) assisting such parent in 
                                obtaining appropriate services, 
                                including at a minimum, parenting 
                                education, family planning services, 
                                education and vocational training, and 
                                child care and transportation services,
                                    ``(II) making the determinations 
                                required to implement the provision of 
                                paragraph (43),
                                    ``(III) monitoring such parent's 
                                compliance with all program 
                                requirements, and, where appropriate, 
                                providing incentives and applying 
                                sanctions, and
                                    ``(IV) providing general guidance, 
                                encouragement and support to assist 
                                such parent in his or her role as a 
                                parent and in achieving self-
                                sufficiency.''.

SEC. 504. STATE OPTION TO PROVIDE ADDITIONAL INCENTIVES AND PENALTIES 
              TO ENCOURAGE TEEN PARENTS TO COMPLETE HIGH SCHOOL AND 
              PARTICIPATE IN PARENTING ACTIVITIES.

    (a) State Plan.--Section 402(a)(19)(E) of the Act (as amended by 
section 101 of this Act) is amended by adding ``and'' after clause (ii) 
and adding after and below clause (ii) the following new clause:
                            ``(iii) at the option of the State, some or 
                        all custodial parents who are under age 20 (and 
                        pregnant women under age 20) who are receiving 
                        aid under this part will be required to 
                        participate in a program of monetary incentives 
                        and penalties, consistent with subsection 
                        (k);''.
    (b) Elements of Program.--Section 402 of the Act is amended by 
adding at the end thereof the following new subsection:
    ``(k)(1) If a State chooses to conduct a program of monetary 
incentives and penalties to encourage custodial parents (and pregnant 
women) who are under age 20 to complete their high school (or 
equivalent) education, and participate in parenting activities, the 
State shall amend its State plan--
            ``(A) to specify the one or more political subdivisions in 
        which the State will conduct the program (or other clearly 
        defined geographic area or areas), and
            ``(B) to describe its program in detail.
    ``(2) A program under this subsection--
            ``(A) may, at the option of the State, include all such 
        parents who are under age 21;
            ``(B) may, at the option of the State, require full-time 
        participation in secondary school or equivalent educational 
        activities, or participation in a course or program leading to 
        a skills certificate found appropriate by the State agency or 
        parenting education activities (or any combination of such 
        activities and secondary education);
            ``(C) shall require that the case manager assigned to the 
        custodial parent pursuant to section 482(b)(3) will review the 
        needs of such parent and will assure that, either in the 
        initial development or revision of the parent's employability 
        plan, there will be included a description of the services that 
        will be provided to the parent and the way in which the case 
        manager and service providers will coordinate with the 
        educational or skills training activities in which the 
        custodial parent is participating;
            ``(D) shall provide monetary incentives for more than 
        minimally acceptable performance of required educational 
        activities; and
            ``(E) shall provide penalties (which may be those required 
        by subsection (a)(19)(G) or, with the approval of the 
        Secretary, other monetary penalties that the State finds will 
        better achieve the objectives of the program.
    ``(3) 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)(A) For purposes of this part, monetary incentives paid under 
this subsection shall be considered aid to families with dependent 
children.
    ``(B) 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) The State agency shall from time to time provide such 
information as the Secretary may request, and otherwise cooperate with 
the Secretary, in order to permit evaluation of the effectiveness on a 
broad basis of the State's program conducted under this subsection.''.

SEC. 505. ADOLESCENT PREGNANCY PREVENTION GRANTS.

    (a) Adolescent Pregnancy Prevention.--Title XX (42 U.S.C. 1397-
1397F) is amended by adding at the end the following:

``SEC. 2008. ADOLESCENT PREGNANCY PREVENTION GRANTS.

    ``(a) Purpose.--The purpose of this section is to encourage and 
provide financial assistance for the development of intensive and 
sustained school-linked and school-based pregnancy prevention programs 
for adolescents and their families in areas of high poverty or high 
unmarried adolescent birth rates that build upon other Federal, State, 
and local pregnancy prevention and youth development programs.
    ``(b) General Authority.--Notwithstanding section 2005(a)(6), the 
Secretary of Health and Human Services, the Secretary of Education, and 
the Chief Executive Officer of the Corporation for National and 
Community Service (hereinafter referred to as the `responsible Federal 
officials'), in consultation with other relevant Federal agencies, 
shall jointly make grants to eligible entities, to carry out programs 
in accordance with this section.
    ``(c) Federal Administration.--
            ``(1) Notwithstanding the Department of Education 
        Organization Act (20 U.S.C. 3401 et seq.) and the General 
        Education Provisions Act (20 U.S.C. 1221 et seq.), the 
        responsible Federal officials shall jointly provide for the 
        administration of this section, and shall jointly issue 
        whatever regulations, procedures, and guidelines, the 
        responsible Federal officials consider necessary and 
        appropriate to administer and enforce the provisions of this 
        section.
            ``(2) The responsible Federal officials may enter into 
        agreements with any other Federal entity with expertise in 
        youth development activities to administer the program under 
        this section and may provide such entity with appropriate 
        reimbursement.
    ``(d) Funding.--
            ``(1) In general.--To achieve the purposes of this section, 
        the responsible Federal officials shall make grants to eligible 
        entities under subsection (b) and conduct activities under 
        subsections (m) and (n) so that in the aggregate the 
        expenditures for such grants and activities do not exceed 
        $20,000,000 for fiscal year 1995, $40,000,000 for fiscal year 
        1996, $60,000,000 for fiscal year 1997, $80,000,000 for fiscal 
        year 1998, and $100,000,000 for fiscal year 1999 and each 
        subsequent fiscal year.
            ``(2) Payments to grantees.--Upon approval by the 
        responsible Federal officials, each grant applicant shall be 
        entitled to payment of at least $50,000 and not more than 
        $400,000 for each fiscal year based on an assessment by the 
        responsible Federal officials of the scope and quality of the 
        proposed program and the number of adolescents to be served by 
        the program. Payments to a grantee for any fiscal year shall be 
        available for expenditure by such grantee in such fiscal year 
        or the succeeding fiscal year.
            ``(3) Reservation for evaluation, training, technical 
        assistance, and national clearinghouse.--The responsible 
        Federal officials shall reserve, with respect to each fiscal 
        year, up to 10 percent of the aggregate amount described in 
        paragraph (1) for expenditure by the responsible Federal 
        officials for evaluation, training, and technical assistance 
        related to the programs under this section, and for the 
        establishment and operation of a National Clearinghouse on 
        Adolescent Pregnancy Prevention Programs under subsection (n).
            ``(4) Excess amount.--If in any fiscal year the aggregate 
        amount specified in paragraph (1) for such fiscal year exceeds 
        the amount required to carry out approved grant applications 
        and other functions under paragraph (3), then the amount 
        specified in section 2003(c)(5) shall be increased by the 
        excess.
    ``(e) Definitions.--As used in this section:
            ``(1) Adolescents.--The term `adolescents' means youth who 
        are ages 10 through 19.
            ``(2) Eligible entity.--The term `eligible entity' means a 
        partnership that includes--
                    ``(A) a local education agency, acting on behalf of 
                one or more schools, together with
                    ``(B) one or more community-based organizations, 
                institutions of higher education, or public or private 
                agencies or organizations.
            ``(3) Eligible area.--The term `eligible area' means a 
        school attendance area in which--
                    ``(A) at least 75 percent of the children are from 
                low-income families as that term is used in part A of 
                title I of the Elementary and Secondary Education Act 
                of 1965; or
                    ``(B) the number of children receiving Aid to 
                Families with Dependent Children under part A of title 
                IV is substantial as determined by the responsible 
                Federal officials; or
                    ``(C) the unmarried adolescent birth rate is high, 
                as determined by the responsible Federal officials.
            ``(4) School.--The term `school' means a public elementary, 
        middle, or secondary school.
            ``(5) Responsible federal officials.--The term `responsible 
        Federal officials' means the Secretary of Education, the 
        Secretary of Health and Human Services, and the Chief Executive 
        Officer of the Corporation for National and Community Service.
    ``(f) Uses of Funds.--Grants under this section--
            ``(1) shall be used to--
                    ``(A) develop, operate, expand, and improve a 
                sequential, age-appropriate program of instruction and 
                counseling services for adolescents designed to promote 
                personal responsibility and a healthy drug free 
                lifestyle, and to prevent adolescent pregnancy, through 
                such activities as counseling and instruction in the 
                full range of consequences of premature sexual behavior 
                and adolescent pregnancy, training in decision-making, 
                and activities to promote involvement of parents and 
                families in adolescent development and personal 
                responsibility; and
                    ``(B) provide opportunities for youth at-risk to 
                develop sustained contact with one or more volunteer or 
                professionally trained adults to provide character 
                development, through such activities as mentoring, 
                group coaching, or after-school activities; and
            ``(2) may be used to conduct other related activities that 
        promote the purposes of this section.
    ``(g) Application.--Each applicant for a grant under subsection (b) 
must submit an application that--
            ``(1) includes a plan, based on local needs, for 
        accomplishing the purposes of this section that--
                    ``(A) sets forth specific, measurable goals 
                intended to be accomplished under the program, and 
                describes the methods to be used in measuring progress 
                toward accomplishment of such goals;
                    ``(B) describes the components of the program, 
                including--
                            ``(i) the role in the program of any 
                        national service participants supported by the 
                        National and Community Service Act of 1990 (42 
                        U.S.C. 12501 et seq.) or by any other national 
                        service law as defined in such Act, and
                            ``(ii) the activities, in accordance with 
                        subsection (f), that will be made available 
                        under the program,
                and the manner in which such components will be 
                implemented, including the extent to which activities 
                will take place after school, on weekends, or during 
                the summer;
                    ``(C) describes the manner in which one or more 
                professional staff will administer the program, and, 
                where appropriate or feasible, the manner in which 
                national service participants will be involved in the 
                development or delivery of services and in the 
                coordination of during or after-school activities;
            ``(2) demonstrates the manner in which the program will be 
        based on research concerning effective means of reducing 
        adolescent pregnancy, including reducing risk-taking behaviors 
        correlated with adolescent pregnancy;
            ``(3) demonstrates that the program will serve male and 
        female adolescents and, where feasible, out-of-school 
        adolescents, and describes the steps the applicant will take to 
        serve such adolescents;
            ``(4) demonstrates the manner in which the applicant will 
        provide, to the extent feasible, a continuity of services for 
        adolescents until age 19;
            ``(5) demonstrates the extent to which school personnel, 
        parents, community organizations, and the adolescents to be 
        served have participated in the development of the application 
        and will participate in the planning and implementation of the 
        program;
            ``(6) describes the applicant's partnership, including the 
        relationship of the partners, the role of each partner in the 
        development and implementation of the program, and the manner 
        in which the partners will coordinate their resources;
            ``(7) describes the nature and scope of commitment to the 
        program by other community institutions, such as religious 
        organizations, community groups, institutions of higher 
        education, business, and labor;
            ``(8) describes the methods to be used in coordinating the 
        provision of services under the program with the provision of 
        services or benefits under other Federal or federally assisted 
        programs, State and local programs, and private programs 
        serving the same population;
            ``(9) demonstrates that the area to be served is an 
        eligible area;
            ``(10) contains assurances that at least one activity will 
        be located in a school in the area to be served and describes 
        the activities that will be school-based;
            ``(11) contains assurances that the amounts provided under 
        this section will not be used to supplant Federal, State, or 
        local funds for services and activities that promote the 
        purposes of this section;
            ``(12) contains assurances that the applicant will provide 
        a non-Federal share, in cash or in kind, of at least 20 percent 
        of the cost of carrying out the approved program;
            ``(13) describes the applicant's plan for continuation of 
        the program following completion of the grant period and 
        termination of Federal support under this section;
            ``(14) contains assurances that the applicant will furnish 
        such reports, containing such information, and participate in 
        such evaluations, as the responsible Federal officials may 
        require; and
            ``(15) includes such other information and assurances as 
        the responsible Federal officials may reasonably require.
    ``(h) Priorities.--In making awards under this section, the 
responsible Federal officials shall give priority to applicants that--
            ``(1) provide for non-Federal resources significantly in 
        excess of those required in subsection (g)(12) or for an 
        increasing ratio of non-Federal resources over the term of the 
        grant; and
            ``(2) participate in other Federal and non-Federal programs 
        that relate to the purposes of this section.
    ``(i) Treatment as Non-Federal Share.--For purposes of the National 
and Community Service Act of 1990 (42 U.S.C. 12501 et seq.), the funds 
provided to a grantee under this section shall not be considered 
Federal funds.
    ``(j) Prohibition on Use of Funds.--No assistance made available 
under this section shall be used to provide religious instruction, to 
conduct worship services, or to promote any religious view or teaching 
in any manner.
    ``(k) Geographic Diversity.--The responsible Federal officials 
shall, to the extent feasible, ensure that applications are approved 
from both urban and rural areas and reflect nationwide geographic 
diversity.
    ``(l) Application Period.--An application approved under this 
section shall be for a term of 5 years; except that approval may be 
terminated before the end of such period if the responsible Federal 
officials determine that the grantee conducting the program has failed 
substantially to carry out the program as described in the approved 
application.
    ``(m) Evaluation, Training, and Technical Assistance.--
            ``(1) Evaluation.--The responsible Federal officials shall 
        evaluate the effectiveness of programs conducted under this 
        section, directly or by grant or contract, and may require each 
        grantee conducting such a program to provide such information 
        as the responsible Federal officials determine is necessary for 
        such evaluations.
            ``(2) Training and technical assistance.--The responsible 
        Federal officials may provide training and technical assistance 
        with respect to the development, implementation, or operation 
        of programs under this section.
            ``(3) Coordination with national clearinghouse.--The 
        responsible Federal officials shall coordinate the activities 
        conducted under this subsection with the activities conducted 
        by the National Clearinghouse on Adolescent Pregnancy 
        Prevention Programs under subsection (n).
    ``(n) National Clearinghouse on Adolescent Pregnancy.--
            ``(1) Establishment.--The responsible Federal officials 
        shall establish, through grant or contract, a national center 
        for the collection and provision of programmatic information 
        and technical assistance that relates to adolescent pregnancy 
        prevention programs, to be known as the `National Clearinghouse 
        on Adolescent Pregnancy Prevention Programs'.
            ``(2) Functions.--The national center established under 
        paragraph (1) 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--
                    ``(A) develop and maintain a system for 
                disseminating information on all types of adolescent 
                pregnancy prevention program and on the state of 
                adolescent pregnancy prevention program development, 
                including information concerning the most effective 
                model programs;
                    ``(B) develop and sponsor a variety of training 
                institutes and curricula for adolescent pregnancy 
                prevention program staff;
                    ``(C) identify model programs representing the 
                various types of adolescent pregnancy prevention 
                programs;
                    ``(D) develop technical assistance materials and 
                activities to assist other entities in establishing and 
                improving adolescent pregnancy prevention programs;
                    ``(E) develop networks of adolescent pregnancy 
                prevention programs for the purpose of sharing and 
                disseminating information; and
                    ``(F) conduct such other activities as the 
                responsible Federal officials find will assist in 
                developing and carrying out programs or activities to 
                reduce adolescent pregnancy.''.
    (b) Effective Date.--The amendment made by this section shall 
become effective October 1, 1994.

SEC. 506. DEMONSTRATION PROJECTS TO PROVIDE COMPREHENSIVE SERVICES TO 
              PREVENT ADOLESCENT PREGNANCY IN HIGH-RISK COMMUNITIES.

    (a) Demonstraton Projects.--Title XX (42 U.S.C. 1397-1397f) is 
amended by adding at the end the following:

``SEC. 2009. DEMONSTRATION PROJECTS TO PROVIDE COMPREHENSIVE SERVICES 
              TO PREVENT ADOLESCENT PREGNANCY IN HIGH-RISK COMMUNITIES.

    ``(a)(1) Purpose.--In order to stimulate the development of 
innovative approaches for the effective delivery of comprehensive 
services, with particular emphasis on pregnancy prevention, to certain 
youth and their families in high-risk communities and the promotion of 
community involvement in improving the environment in which such youth 
live, the Secretary of Health and Human Services shall conduct 
demonstration projects in accordance with this section.
    ``(2) Approval of Projects.--The Secretary of Health and Human 
Services, in consultation with the Secretary of Education, the 
Secretary of Housing and Urban Development, the Attorney General, the 
Director of the Office of National Drug Control Policy, and the 
Secretary of Labor, shall approve at least 5 and not more than 7 
projects, in accordance with subsection (c). Upon approval by the 
Secretary, each project applicant shall be entitled to payment of up to 
$3,600,000 for each of fiscal years 1995 through 1999 for the purpose 
of conducting approved demonstration projects.
    ``(b) Funding.--
            ``(1) In general.--There shall be made available to the 
        Secretary not to exceed $20,000,000 for each of fiscal years 
        1995 through 1999 for carrying out the projects under this 
        section. Payments to a grantee for any fiscal year must be 
        expended by the grantee in such fiscal year or the succeeding 
        fiscal year.
            ``(2) Evaluation, training, and technical assistance.--The 
        Secretary shall reserve, with respect to each fiscal year, ten 
        percent of the amount described in paragraph (1) for 
        expenditure by the Secretary for training and technical 
        assistance related to the demonstration projects under this 
        section and for evaluation of such projects. The amount so 
        reserved shall remain available for obligation through fiscal 
        year 1999.
            ``(3) Excess amounts.--If in any fiscal year the amount 
        specified in paragraph (1) for such fiscal year exceeds the 
        amount required to carry out approved projects and evaluation, 
        training, and technical assistance under this section, then the 
        amount specified in section 2003(c)(5) shall be increased by 
        the excess.
    ``(c) Application; Eligibility Criteria.--A local public or private 
nonprofit organization, including a unit of government, or any 
combination of such entities, shall be eligible to submit a project 
application. In order that an application be approved under subsection 
(a), the application must--
            ``(1) demonstrate that the geographic area to be served by 
        the project satisfies the following criteria:
                    ``(A) it includes a population of 20,000 to 35,000 
                residents,
                    ``(B) it has an identifiable boundary and is 
                recognizable as a community by its residents, and
                    ``(C) within the community, there is a poverty rate 
                of not less than 20 percent;
            ``(2) include a plan for accomplishing the purposes of this 
        section that--
                    ``(A) describes the comprehensive, integrated 
                services, in accordance with subsection (e), that will 
                be made available under the project;
                    ``(B)(i) sets forth the goals intended to be 
                accomplished under the project, and
                    ``(ii) describes the methods to be used in 
                measuring progress toward accomplishment of such goals 
                and the outcomes to be measured, including unmarried 
                adolescent birth rates, rates of youth alcohol and drug 
                use, rates of youth violence, high school graduation 
                rates, and such other outcomes as the Secretary finds 
                appropriate;
                    ``(C) describes the process by which the affected 
                community (including parents, the youth to be served, 
                schools, local government, religious organizations, 
                community groups, business, and labor) is a full 
                partner in the process of developing and implementing 
                the project and the extent to which parents, the youth 
                to be served, and local institutions and organizations 
                have contributed to the planning process;
                    ``(D) identifies the private and public 
                partnerships to be used;
                    ``(E) describes the methods to be used in 
                coordinating the provision of services under the 
                project and the provision of services or benefits under 
                other Federal or federally assisted programs, State and 
                local programs, and private programs serving the same 
                population; and
                    ``(F) describes the manner in which other Federal 
                funds and non-Federal funds will be used to further the 
                purpose of the program;
            ``(3) demonstrate strong State and local government 
        commitment to the project and involvement in the planning and 
        implementation of the project;
            ``(4) demonstrate the ability of the applicant to carry out 
        the project;
            ``(5) describe the methods to be used for maintaining 
        accurate records regarding the activities carried out with 
        funds under this section;
            ``(6) contain assurances that the amounts provided under 
        this section will not be used to supplant Federal, State, and 
        local funds for services and activities that promote the 
        purposes of this section;
            ``(7) contain assurances that the applicant will provide a 
        non-Federal share, in cash or in kind, of 10 percent of the 
        cost of carrying out the approved project and describe the 
        capacity of the applicant to provide the non-Federal share;
            ``(8) contain assurances that the applicant will furnish 
        such reports, containing such information, and participate in 
        such evaluations, as the Secretary may require; and
            ``(9) include such other information as the Secretary may 
        require.
    ``(d) Priority.--In making awards under this section, the Secretary 
shall give priority to applicants that provide for non-Federal 
resources significantly in excess of those required in subsection 
(c)(7).
    ``(e) Use of Grants.--Under each demonstration project conducted 
under this section, the grantee shall develop a community-wide strategy 
to address the causes and factors of risk-taking tendencies among 
youth, to positively affect community norms, to increase community 
health and safety, and to generally improve the social environment to 
enhance the life choice of community youth. The strategy shall be used 
to provide a comprehensive set of coordinated services designed to 
saturate the community and shall include, but not be limited to, the 
following areas:
            ``(1) Health education and access services designed to 
        promote physical and mental well-being and personal 
        responsibility (with particular emphasis on pregnancy 
        prevention), such as school health services, family planning 
        services, alcohol and drug abuse prevention services and 
        referral for treatment, life skills training, and decision-
        making skills training.
            ``(2) Educational and employability development services 
        designed to promote educational advancement leading to a high 
        school diploma or its equivalent and opportunities for high 
        skill, high wage job attainment and productive employment, to 
        establish a lifelong commitment to learning and achievement, 
        and to increase self-confidence, such as academic tutoring, 
        literacy training, drop-out prevention programs, career and 
        college counseling, mentoring programs, job skills training, 
        apprenticeships, and part-time paid work opportunities.
            ``(3) Social support services designed to provide youth 
        with a stable environment, opportunities for a sustained 
        relationship with one or more adults, and opportunities for 
        participation in safe and productive activities, such as 
        cultural, recreational and sports activities, leadership 
        development, peer counseling and crisis intervention, mentoring 
        programs, parenting skills training, and family counseling.
            ``(4) Community activities designed to improve community 
        stability, and to encourage youth to participate in community 
        service and establish a stake in the community, such as 
        community policing, community service programs, community 
        activities in partnership with less distressed neighborhoods, 
        local media campaigns, and establishment of community advisory 
        councils with youth representation.
            ``(5) Employment opportunity development activities 
        designed to be coordinated with educational and employability 
        development services, social support services, and community 
        activities described in paragraphs (2) through (4). Emphasis 
        shall be on development of linkages with employers within and 
        outside the community to help create employment opportunities 
        and foster an understanding by community youth of the 
        relationship between productive employment, healthy 
        development, and sound life choices.
    ``(f) Evaluation, Training, and Technical Assistance.--
            ``(1) Evaluation.--The Secretary shall evaluate the 
        effectiveness of each demonstration project conducted under 
        this section and may require each grantee conducting such a 
        project to provide such information as the Secretary determines 
        is necessary for such evaluations.
            ``(2) Training and technical assistance.--The Secretary 
        shall provide training and technical assistance with respect to 
        the development, implementation, or operation of projects under 
        this section.
            ``(3) Coordination with national clearinghouse.--The 
        Secretary shall coordinate the activities conducted under this 
        subsection with activities conducted by the National 
        Clearinghouse on Adolescent Pregnancy Prevention Programs under 
        section 2008(n).
    ``(g) Funding Period.--Each demonstration project supported under 
this section shall be conducted for a 5-year period; except that the 
Secretary may terminate a project before the end of such period if the 
Secretary determines that the grantee conducting the project has failed 
substantially to carry out the project as described in the approved 
application.
    ``(h) Definitions and Special Rules.--As used in this section:
            ``(1) Youth.--The term `youth' means an individual who is 
        not less than 10 years of age and not more than 21 years of 
        age.
            ``(2) Use of census data.--Population and poverty rate 
        shall be determined by the most recent decennial census data 
        available.''.
    (b) Effective Date.--The amendment made by this section shall 
become effective October 1, 1994.

                  TITLE VI--CHILD SUPPORT ENFORCEMENT

SEC. 600. REFERENCES IN TITLE.

    References in this title to a section or other provision refer to a 
section or other provision of the Social Security Act, unless the 
context otherwise requires.

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

SEC. 601. COOPERATION REQUIREMENT AND GOOD CAUSE EXCEPTION.

    (a) Child Support Enforcement Requirements.--Section 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 new 
        paragraph:
            ``(25) 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 
                sections 402(a)(26) and 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) with efforts to establish paternity 
                within 10 days after such individual is referred to 
                such State agency by the State agency administering the 
                program under part A of title XIX;
                    ``(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 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 of title XIX 
                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) AFDC Amendments.--
            (1) Section 402(a)(11) is amended by striking ``furnishing 
        of'' and inserting ``application for''.
            (2) Section 402(a)(26) is amended--
                    (A) in each of subparagraphs (A) and (B), by 
                redesignating clauses (i) and (ii) as subclauses (I) 
                and (II);
                    (B) by indenting and redesignating subparagraphs 
                (A), (B), and (C) as clauses (i), (ii), and (iv), 
                respectively;
                    (C) in clause (ii), as redesignated--
                            (i) by striking ``is claimed, or in 
                        obtaining any other payments or property due 
                        such applicant or such child,'' and inserting 
                        ``is claimed;''; and
                            (ii) by striking ``unless'' and all that 
                        follows through ``aid is claimed; and'';
                    (D) by adding after clause (ii) the following new 
                clause:
                            ``(iii) to cooperate with the State in 
                        obtaining any other payments or property due 
                        such applicant or such child; and'';
                    (E) in the matter preceding clause (i), as 
                redesignated, to read as follows:
            ``(26) provide--
                    ``(A) that, as a condition of eligibility for aid, 
                each applicant or recipient will be required (subject 
                to subparagraph (C))--'';
                    (F) in subparagraph (A)(iv), as redesignated, by 
                striking ``, unless such individual'' and all that 
                follows through ``individuals involved'';
                    (G) by adding at the end the following new 
                subparagraphs:
                    ``(B) that the State agency will immediately refer 
                each applicant requiring paternity establishment 
                services to the State agency administering the program 
                under part D;
                    ``(C) that an individual will not be required to 
                cooperate with the State, as provided under 
                subparagraph (A), 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 child on whose behalf aid is claimed--
                            ``(i) to the satisfaction of the State 
                        agency administering the program under part D, 
                        as determined in accordance with section 
                        454(25), with respect to the requirements under 
                        clauses (i) and (ii) of subparagraph (A); and
                            ``(ii) to the satisfaction of the State 
                        agency administering the program under this 
                        part, with respect to the requirements under 
                        clauses (iii) and (iv) of subparagraph (A);
                    ``(D) that (except as provided in subparagraph (E)) 
                an applicant requiring paternity establishment services 
                (other than an individual eligible for emergency 
                assistance as defined in section 406(e)) 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(25)(E); or
                            ``(ii) has been determined by such agency 
                        to have good cause not to cooperate;
                    ``(E) that the provisions of subparagraph (D) shall 
                not apply--
                            ``(i) if the State agency specified in such 
                        subparagraph has not, within 10 days after such 
                        individual was referred to such agency, 
                        provided the notification required by section 
                        454(25)(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''; and
                    (H)(i) by relocating and redesignating as 
                subparagraph (F) the text at the end of subparagraph 
                (A)(ii) beginning with ``that, if the relative'' and 
                all that follows through the semicolon;
                    (ii) in subparagraph (F), as so redesignated and 
                relocated, by striking ``subparagraphs (A) and (B) of 
                this paragraph'' and inserting ``subparagraph (A)''; 
                and
                    (iii) by striking ``and'' at the end of 
                subparagraph (a)(ii).
    (c) 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(25), 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 eligible for emergency assistance as defined 
        in section 406(e), or presumptively eligible pursuant to 
        section 1920) shall not be eligible for medical assistance 
        under this title until such applicant--
                    ``(i) has furnished to the agency administering the 
                State plan under part D of title IV the information 
                specified in section 454(25)(E); or
                    ``(ii) 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--
                    ``(i) if such agency has not, within 10 days after 
                such individual was referred to such agency, provided 
                the notification required by section 454(25)(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.''.
    (d) 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 enactment of this 
amendment (or such earlier quarter as the State may select) for aid 
under title IV-A or for medical assistance under title XIX.

SEC. 602. STATE OBLIGATION TO PROVIDE PATERNITY ESTABLISHMENT AND CHILD 
              SUPPORT ENFORCEMENT SERVICES.

    (a) State Law Requirements.--Section 466(a) is amended by adding at 
the end the following new paragraph:
            ``(12) Use of central case registry and centralized 
        collections unit.--Procedures under which--
                    ``(A) every child support order established or 
                modified in the State on or after October 1, 1997, 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, 1997, under 
                        each order subject to wage withholding under 
                        section 466(b); and
                            ``(ii) on and after October 1, 1998, under 
                        each other order required to be recorded in 
                        such central case registry under this paragraph 
                        or section 454A(e), except as provided in 
                        subparagraph (C); and
                    ``(C)(i) parties subject to a child support order 
                described in subparagraph (B)(ii) may opt out of the 
                procedure for payment of support through the 
                centralized collections unit (but not the procedure for 
                inclusion in the central case registry) by filing with 
                the State agency a written agreement, signed by both 
                parties, to an alternative payment procedure; and
                    ``(ii) an agreement described in clause (i) becomes 
                void, and may not be renewed, whenever--
                            ``(I) the party owing support fails to make 
                        a timely payment; or
                            ``(II) either party advises the State 
                        agency of an intent to vacate the agreement.''.
    (b) State Plan Requirements.--Section 454 is amended--
            (1) in paragraph (4), to read as follows:
            ``(4) provide that such State will undertake--
                    ``(A) to provide appropriate services under this 
                part to--
                            ``(i) each child with respect to whom an 
                        assignment is effective under section 
                        402(a)(26), 471(a)(17), or 1912 (except in 
                        cases where the State agency determines, in 
                        accordance with paragraph (25), that it is 
                        against the best interests of the child to do 
                        so); and
                            ``(ii) each child not described in clause 
                        (i)--
                                    ``(I) with respect to whom an 
                                individual applies for such services; 
                                and
                                    ``(II) (on and after October 1, 
                                1997) each child with respect to whom a 
                                support order is recorded in the 
                                central State case registry established 
                                under section 454A, regardless of 
                                whether application is made for 
                                services under this part; and
                    ``(B) to enforce the support obligation established 
                with respect to the custodial parent of a child 
                described in subparagraph (A).'';
            (2) in paragraph (6)--
                    (A) by striking all that precedes subparagraph (C) 
                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) no fees or costs shall be imposed on any 
                absent or custodial parent or other individual--
                            ``(i) on or after October 1, 1997, for 
                        application for child support enforcement 
                        services under this part; or
                            ``(ii) for inclusion in the central State 
                        registry maintained pursuant to section 
                        454A(e);'';
                    (B) in each of subparagraphs (C) and (D)--
                            (i) by indenting such subparagraph and 
                        aligning its left margin with the left margin 
                        of paragraph (B); and
                            (ii) by striking the final comma and 
                        inserting a semicolon;
                    (C) by striking subparagraph (E) and inserting the 
                following subparagraphs:
                    ``(E) no other fees or costs may be imposed on the 
                custodial parent; and
                    ``(F) any other fees or costs may be imposed on the 
                noncustodial parent (but fees for child support 
                collection services provided through the central 
                collections unit operated pursuant to section 454B, or 
                for related automated procedures pursuant to section 
                454A(g), may be imposed only if such fees or costs are 
                added to, and not deducted from, amounts collected as 
                child support);''.
    (c) Conforming Amendments.--
            (1) Section 452(g)(2)(A) is amended by striking ``454(6)'' 
        each place it appears and inserting ``454(4)(A)(ii)''.
            (2) Section 454(23) is amended, effective October 1, 1997, 
        by striking ``information as to any application fees for such 
        services and''.
            (3) Section 466(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) Section 466(e) is amended by striking ``or (6)''.

SEC. 603. DISTRIBUTION OF PAYMENTS.

    (a) Distributions Through State Child Support Enforcement Agency to 
Former Assistance Recipients.--Section 454(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 AFDC.--Section 457 
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 AFDC.--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 specified in section 
        402(a)(8)(A)(vi) shall be taken from each of--
                    ``(A) amounts received in a month which represent 
                payments for that month; and
                    ``(B) amounts received in a month which represent 
                payments for a prior month which were made by the 
                absent parent in the month when due;

        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 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.''.
            (3) by inserting after subsection (a), as redesignated, the 
        following new subsection:
    ``(b) Alternative Distribution in Case of Family Receiving AFDC.--
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 specified in section 
        402(a)(8)(A)(vi) shall be taken from each of--
                    ``(A) amounts received in a month which represent 
                payments for that month; and
                    ``(B) amounts received in a month which represent 
                payments for a prior month which were made by the 
                absent parent in the month when due;

        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 AFDC.--Section 457(c) is 
amended to read as follows:
    ``(c) In Case of Family Not Receiving AFDC.--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);
            ``(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).''.
    (d) Distribution to a Child Receiving Assistance Under Title IV-
E.--Subsection (d) is amended, in the matter preceding paragraph (1), 
by striking ``Notwithstanding the preceding provisions of this section, 
amounts'' and inserting ``In Case of a Child Receiving Assistance under 
Title IV-E.--Amounts''.
    (e) Suspension or Cancellation of Debts Upon Marriage of Parents.--
Section 457 is further amended by adding at the end the following new 
subsection:
    ``(e) Suspension or Cancellation of Debts to State Upon Marriage of 
Parents.--(1) Circumstances Requiring Suspension or Cancellation.--In 
any case in which a State has been assigned rights to support owed with 
respect to a child who is receiving or has received assistance under 
part A and--
            ``(A) the parent owing such support marries (or remarries) 
        the parent with whom such child is living and to whom such 
        support is owed and applies to the State for relief under this 
        subsection;
            ``(B) the State determines (in accordance with procedures 
        and criteria established by the Secretary) that the marriage is 
        not a sham marriage entered into solely to satisfy this 
        subsection; and
            ``(C) the combined income of such parents is less than 
        twice the Federal poverty line,

the State shall afford relief to the parent owing such support in 
accordance with paragraph (2).
    ``(2) Suspension or Cancellation.--In the case of a marriage or 
remarriage described in paragraph (1), the State shall either--
            ``(A) cancel all debts owed to the State pursuant to such 
        assignment, or
            ``(B) suspend collection of such debts for the duration of 
        such marriage, and cancel such debts if such duration extends 
        beyond the end of the period with respect to which support is 
        owed.
    ``(3) Notice Required.--The State shall notify custodial parents of 
children who are receiving aid under part A of the relief available 
under this subsection to individuals who marry (or remarry).''.
    (f) Regulations.--The Secretary shall promulgate regulations--
            (1) under title IV-D of the Social Security Act, 
        establishing a uniform nationwide standard for allocation of 
        child support collections from an obligor owing support to more 
        than one family; and
            (2) under title IV-A of such Act, establishing standards 
        applicable to States electing the alternative formula under 
        section 457(b) of the Social Security Act for distribution of 
        collections on behalf of families receiving Aid to Families 
        with Dependent Children, designed to minimize irregular monthly 
        payments to such families.
    (g) Clerical Amendment.--Section 454 is amended--
            (1) in paragraph (11), by striking ``(11)'' and inserting 
        ``(11)(A)''; and
            (2) by redesignating paragraph (12) as subparagraph (B) of 
        paragraph (11).
    (h) Conforming Amendment.--Section 402(a)(26)(A)(i), as 
redesignated by section 601(b)(2)(A), is amended--
            (1) by striking ``(I)''; and
            (2) by striking ``, and (II)'' and all that follows before 
        the semicolon.

SEC. 604. DUE PROCESS RIGHTS.

    (a) Section 454, as amended by section 603(g), is further amended 
by inserting after paragraph (11) the following new paragraph:
            ``(12) provide for procedures to ensure that--
                    ``(A) individuals who 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 within 14 days after issuance of 
                        such order; and
                    ``(B) individuals receiving services under this 
                part have access to a fair hearing or other formal 
                complaint procedure, meeting standards established by 
                the Secretary, that ensures prompt consideration and 
                resolution of complaints (but the resort to such 
                procedure shall not stay the enforcement of any support 
                order);''.
    (b) Effective Date.--The amendments made by this section shall 
become effective on October 1, 1996.

SEC. 605. PRIVACY SAFEGUARDS.

    (a) State Plan Requirement.--Section 454, as amended by section 
601, is further 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 after paragraph (25) the following new 
        paragraph;
            ``(26) 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; and
                    ``(B) prohibitions on the release of information on 
                the whereabouts of one party to another party against 
                whom a protective order with respect to such party has 
                been entered.''.
    (b) The amendments made by this section shall become effective on 
October 1, 1996.

SEC. 606. REQUIREMENT TO FACILITATE ACCESS TO SERVICES.

    (a) State Plan Requirement.--Section 454(23) is amended--
            (1) by striking ``the State will regularly'' and inserting 
        ``the State will--
                    ``(A) regularly'';
            (2) by incorporating the remainder of the text within 
        subparagraph (A);
            (3) by striking ``and'' at the end; and
            (4) by adding after and below subparagraph (A) the 
        following new subparagraph:
                    ``(B) have a plan for outreach to parents designed 
                to disseminate information about and increase access to 
                child support enforcement services, including plans 
                responding to needs--
                            ``(i) of working parents to obtain such 
                        services without taking time off work; and
                            ``(ii) of parents with limited proficiency 
                        in English for elimination of language barriers 
                        to use of such services; and''.
    (b) The amendments made by this section shall become effective on 
October 1, 1996.

               PART B--PROGRAM ADMINISTRATION AND FUNDING

SEC. 611. FEDERAL MATCHING PAYMENTS.

    (a) Increased Base Matching Rate.--Section 455(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 1996, 69 percent,
                    ``(B) for fiscal year 1997, 72 percent, and
                    ``(C) for fiscal year 1998 and succeeding fiscal 
                years, 75 percent.''.
    (b) Maintenance of Effort.--Section 455 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) Maintenance of Effort.--Notwithstanding the provisions of 
subsection (a), total expenditures for the State program under this 
part for fiscal year 1996 and each succeeding fiscal year, reduced by 
the percentage specified for such fiscal year under subsection 
(a)(2)(A), (B), or (C)(i), shall not be less than such total 
expenditures for fiscal year 1995, reduced by 66 percent.''

SEC. 612. PERFORMANCE-BASED INCENTIVES AND PENALTIES.

    (a) Incentive Adjustments to Federal Matching Rate.--(1) In 
General.--Section 458 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, 1997, 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 1994, 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.
    ``(b) Meaning of Terms.--For purposes of this section--
            ``(1) the term `Statewide paternity establishment 
        percentage' means, with respect to a fiscal year, the ratio 
        (expressed as a percentage) of--
                    ``(A) the total number of out-of-wedlock children 
                in the State under one year of age for whom paternity 
                is established or acknowledged during the fiscal year, 
                to
                    ``(B) the total number of children born out of 
                wedlock in the State during such fiscal year; and
            ``(2) 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) Title IV-D Payment Adjustment.--Section 455(a)(2), as amended 
by section 611, is further amended--
            (1) by striking the period at the end of subparagraph 
        (C)(ii) and inserting a period; and
            (2) by adding after and below subparagraph (C), flush with 
        the left margin of the subsection, the following:
``increased by the incentive adjustment factor (if any) determined by 
the Secretary pursuant to section 458.''.
    (c) Conforming Amendments.--Section 454(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) 
Section 452(g) is amended in paragraph (1), 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) Section 452(g)(2) is amended--
            (A) in subparagraph (A), in the matter preceding clause 
        (i)--
                    (i) by striking ``paternity establishment 
                percentage'' and inserting ``IV-D paternity 
                establishment percentage''; and
                    (ii) by striking ``(or all States, as the case may 
                be)'';
            (B) in subparagraph (A)(i), by striking ``during the fiscal 
        year'';
            (C) in subclause (I) of subparagraph (A)(ii), by striking 
        ``as of the end of the fiscal year'' and inserting ``in the 
        fiscal year or, at the option of the State, as of the end of 
        such year'';
            (D) in subclause (II) of subparagraph (A)(ii), by striking 
        ``or (E) as of the end of the fiscal year'' and inserting ``in 
        the fiscal year or, at the option of the State, as of the end 
        of such year'';
            (E) in subparagraph (A)(iii)--
                    (i) by striking ``during the fiscal year''; and
                    (ii) by striking ``and'' at the end; and
            (F) in the matter following subparagraph (A)--
                    (i) by striking ``who were born out of wedlock 
                during the immediately preceding fiscal year'' and 
                inserting ``born out of wedlock'';
                    (ii) by striking ``such preceding fiscal year'' 
                both places it appears and inserting ``the preceding 
                fiscal year''; and
                    (iii) by striking ``or (E)'' the second place it 
                appears.
    (3) Section 452(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) Title IV-A Payment Reduction.--Section 403 is amended--
            (1) in subsection (a), by striking ``1958--'' and inserting 
        ``1958--'' (subject to subsection (h))--'';
            (2) in subsection (h), by striking all that precedes 
        paragraph (3) and inserting the following:
    ``(h)(1) If the Secretary finds, with respect to a State program 
under this part in a fiscal year beginning on or after October 1, 
1996--
            ``(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), 
                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 one nor more than two percent, or
            ``(B) not less than two nor more than three percent, if the 
        finding is the second consecutive finding made pursuant to 
        paragraph (1), or
            ``(C) not less than three nor more than five percent, if 
        the finding is the third or a subsequent consecutive such 
        finding.''; and
    ``(3) In subsection (h)(3), by striking ``not in full compliance'' 
and all that follows and inserting ``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.''.
    (f) Effective Dates.--
            (1) Incentive adjustments.--(A) The amendments made by 
        subsections (a), (b), and (c) shall become effective October 1, 
        1996, except to the extent provided in subparagraph (B).
            (B) The provisions of section 458 of the 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 1998.
            (2) Penalty reductions.--(A) The amendments made by 
        subsection (d) shall become effective with respect to calendar 
        quarters beginning on and after the date of enactment of this 
        Act.
            (B) The amendments made by subsection (e) shall become 
        effective with respect to calendar quarters beginning on and 
        after the date one year after the date of enactment of this 
        Act.

SEC. 613. FEDERAL AND STATE REVIEWS AND AUDITS.

    (a) State Agency Activities.--Section 454 is amended--
            (1) in paragraph (14), by striking ``(14)'' and inserting 
        ``(14)(A)'';
            (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, 
                using such standards and procedures as are required by 
                the Secretary, 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) 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 403(h) 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 one year after enactment of this section.

SEC. 614. AUTOMATED DATA PROCESSING REQUIREMENTS.

    (a) Revised Requirements.--(1) Section 454(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'' and all that follows and 
        inserting a semicolon.
    (2) Part D of title IV 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) Implementation Timetable.--Section 454(24) 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, 1995, meeting all requirements 
                of this part which were enacted on or before the date 
                of enactment of the Family Support Act of 1988; and
                    ``(B) by October 1, 1998, meeting all requirements 
                of this part enacted on or before the date of enactment 
                of the Work and Responsibility Act of 1994 (but this 
                provision shall not be construed to alter earlier 
                deadlines specified for elements of such system);''.
    (b) Special Federal Matching Rate for Development Costs of 
Automated Systems.--Section 455(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 and inserting ``, and''; 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 1995, 90 percent of so much of State expenditures described 
in subparagraph (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 clause (D) thereof.
    ``(B)(i) The Secretary shall pay to each State, for each quarter in 
fiscal years 1996 through 2000, the percentage specified in clause (ii) 
of so much of State expenditures described in subparagraph (1)(B) as 
the Secretary finds are for a system meeting the requirements specified 
in section 454(16) and 454A, subject to clause (iii).
    ``(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 subparagraph (A) (as adjusted in 
        pursuant to section 458).
    ``(iii) Notwithstanding any other provision of this section, the 
total amount payable by the Secretary with respect to expenditures 
during fiscal years specified in clause (i) shall not exceed 
$260,000,000, to be distributed among the States, and to be made 
available at such time or times over the five-year period, as is 
provided in regulations issued by the Secretary, taking into account 
the relative size of State caseloads and the level of automation needed 
to meet the requirements of this part, and payments under clause (i) 
shall be made to a State at such times and in such a manner as provided 
in the advance planning document approved under section 452(d).''.
    (c) Conforming Amendment.--Section 123(c) of the Family Support Act 
of 1988 is repealed.
    (d) Additional Provisions.--For additional provisions of section 
454A, as added by subsection (a), see sections 621, 622, and 636 of 
this Act.

SEC. 615. DIRECTOR OF CSE PROGRAM; TRAINING AND STAFFING.

    (a) Reporting to Secretary.--Section 452(a) is amended, in the 
matter preceding paragraph (1), by striking ``directly''.
    (b) Training Program.--Section 452(a)(7) is amended by striking 
``paternity;'' and inserting ``paternity, through activities 
including--
                    ``(A) development of a core curriculum and training 
                standards to be used by States in the development of 
                State-specific training guides; and
                    ``(B) development of a national training program 
                for directors of State programs under this part;''.
    (c) State Plan Requirement.--Section 454, as amended by sections 
602 and 604, is further 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 new 
        paragraph:
            ``(27) provide that the State agency will develop and 
        implement a training program which--
                    ``(A) is consistent with the national training 
                standards and core curriculum developed by the 
                Secretary pursuant to section 452(a)(7), and uses a 
                State-specific training guide incorporating such core 
                curriculum;
                    ``(B) provides for initial and ongoing training of 
                all staff (including State and local agency staff and 
                contractors) of the program under this part, including 
                annual training for case workers and special training 
                when significant changes are made in statutes, 
                regulations, policies, or procedures; and
                    ``(C) may provide (subject to approval by the 
                Secretary) for appropriate training of other persons 
                with responsibilities relating to the implementation of 
                the State program under this part (including staff 
                administering programs under part A, part E, title XIX, 
                and other related and complementary programs; judges 
                and other staff of judicial and administrative 
                tribunals; law enforcement personnel; staff of social 
                services organizations; and the private bar.''.
    (d) Staffing Studies.--(1) Scope of Study.--The Secretary of Health 
and Human Services shall, directly or by contract, conduct studies of 
the staffing of each State child support enforcement program under 
title IV-D of the Act. Such studies shall 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.
    (2) Frequency of Studies.--The Secretary shall complete the first 
staffing study required under paragraph (1) by October 1, 1996, and may 
conduct additional studies subsequently at appropriate intervals.
    (3) Report to Congress.--The Secretary shall submit a report to the 
Congress stating the findings and conclusions of each study conducted 
under this subsection.

SEC. 616. FUNDING FOR SECRETARIAL ASSISTANCE TO STATE PROGRAMS.

    Section 452 is amended by adding at the end the following new 
subsection:
    ``(j) Funding for Federal Activities Assisting State programs.--(1) 
There shall be available to the Secretary, from amounts appropriated 
for fiscal year 1995 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 and the National Welfare Reform Information 
        Clearinghouse under section 453A, 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--
            ``(A) 1 percent, for the activities specified in 
        subparagraphs (A) and (B) of paragraph (1); and
            ``(B) 2 percent, for the activities specified in 
        subparagraph (C) of paragraph (1).''.

SEC. 617. DATA COLLECTION AND REPORTS BY THE SECRETARY.

    (a) Annual Report to Congress.--(1) Section 452(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) Section 452(a)(10)(C) is amended--
            (A) in the matter preceding clause (i)--
                    (i) by striking ``with the data required under each 
                clause being separately stated for cases'' and 
                inserting ``separately stated for (1) cases'';
                    (ii) by striking ``cases where the child was 
                formerly receiving'' and inserting ``or formerly 
                received'';
                    (iii) by inserting ``or 1912'' after 
                ``471(a)(17)''; and
                    (iv) by inserting ``(2)'' before ``all other'';
            (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 and inserting ``in which support was collected 
        during the fiscal year;'';
            (D) by striking clause (iv);
            (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) Section 452(a)(10)(G) is amended by striking ``on the use of 
Federal courts and''.
    (4) Section 452(a)(10) is further amended by striking the matter 
following the end of subparagraph (I).
    (b) Data Collection and Reporting.--Section 469 is amended--
            (1) in subsections (a) and (b), to read as follows:
    ``(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 1995 and succeeding fiscal years.

                    PART C--LOCATE AND CASE TRACKING

SEC. 621. CENTRAL STATE AND CASE REGISTRY.

    Section 454A, as added by section 614, is further 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, 
1997, 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 arrears, interest or late payment penalties, and 
        fees);
            ``(B) the date on which the support obligation will 
        terminate under such order;
            ``(C) all child support and related amounts collected 
        (including such amounts as fees, late payment penalties, and 
        interest on arrearages); and
            ``(D) the distribution of such amounts collected.
    ``(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) National child support registry.--Furnish to the 
        National Child Support Registry established under section 453A 
        (and update as necessary, with information including notice of 
        expiration of orders) minimal information (to be specified by 
        the Secretary) on each child support case in the central case 
        registry.
            ``(2) Federal parent locator service.--Exchange data with 
        the Federal Parent Locator Service for the purposes specified 
        in section 453.
            ``(3) AFDC and medicaid agencies.--Exchange 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.--Exchange 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. 622. CENTRALIZED COLLECTION AND DISBURSEMENT OF SUPPORT PAYMENTS.

    (a) State Plan Requirement.--Section 454, as previously amended by 
sections 601, 605, and 615, is further 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, 1997--
                    ``(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 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 two 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 614 
and amended by section 621, is further 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 two working days after receipt (from 
                the National Directory of New Hires 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) The amendments made by this section shall become effective on 
October 1, 1997.

SEC. 623. AMENDMENTS CONCERNING INCOME WITHHOLDING.

    (a) Mandatory Income Withholding.--(1) Section 466(a)(1) is amended 
to read as follows:
            ``(1) Income withholding.--(A) Under orders enforced under 
        the state plan.--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) Under certain orders predating change in 
        requirement.--Procedures under which all child support orders 
        issued (or modified) before October 1, 1995, 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) Section 466(a)(8) is repealed.
    (3) Section 466(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 all that follows 
                ``administered by'' 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 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)--
                    (i) by striking ``employer who discharges'' and 
                inserting ``employer who--(A) discharges'';
                    (ii) by relocating subparagraph (A), as designated, 
                as an indented subparagraph after and below the 
                introductory matter;
                    (iii) by striking the period at the end; and
                    (iv) by adding after and below subparagraph (A) the 
                following new subparagraph:
                    ``(B) 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) is repealed.
    (c) Definition of Terms.--The Secretary shall promulgate 
regulations providing definitions, for purposes of title IV-D of the 
Act, for the term ``income'' and for such other terms relating to 
income withholding under section 466(b) of the Act as the Secretary may 
find it necessary or advisable to define.

SEC. 624. LOCATOR INFORMATION FROM INTERSTATE NETWORKS AND LABOR 
              UNIONS.

    State Law Requirement.--Section 466(a), as amended by section 623, 
is amended by adding after paragraph (7) the following new paragraph:
            ``(8) Locator information.--(A) Interstate networks.--
        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--
            ``(i) for purposes relating to the use of motor vehicles; 
        or
            ``(ii) 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 sections 453 and 453A) 
have access to information in such system or network to the same extent 
as any other user of such system or network.
            ``(B) Labor unions.--Procedures under which labor unions, 
        and their hiring halls, must furnish to the State agency, upon 
        request, with respect to any union member against whom 
        paternity or a support obligation is sought to be established 
        or enforced, such information as the union or hiring hall may 
        have on such member's residential address and telephone number, 
        employer's name, address, and telephone number, and wages and 
        medical insurance benefits.''.

SEC. 625. NATIONAL WELFARE REFORM INFORMATION CLEARINGHOUSE.

    (a) Part D of title IV is amended by adding after section 453 the 
following new section:

          ``national welfare reform information clearinghouse

    ``Sec. 453A. (a)(1) In order to assist States in administering 
their State plans under this part and parts A, F, and G, and for the 
other purposes specified in this section, the Secretary shall establish 
and operate a National Welfare Reform Information Clearinghouse, 
performing the functions and meeting the requirements specified in this 
section, and containing the registries and directory specified in 
paragraph (2).
    ``(2) Components Specified.--The registries and directory specified 
in this paragraph, for purposes of paragraph (1), are--
            ``(A) the National Child Support Registry established 
        pursuant to subsection (b);
            ``(B) the National Directory of New Hires established 
        pursuant to subsection (c);
            ``(C) the Federal Parent Locater Service established 
        pursuant to section 453; and
            ``(D) the National Welfare Receipt Registry established 
        pursuant section 411.
    ``(3) Use of Term.--For purposes of this section, references to 
registries maintained under this section shall be considered to include 
the National Directory of New Hires and the Federal Parent Locator 
Service.
    ``(b) National Child Support Registry.--(1) In General.--The 
Secretary shall establish by October 1, 1997, and maintain thereafter, 
an automated registry, to be known as the National Child Support 
Registry, containing minimal information (in accordance with paragraph 
(2)) on each case in each State central 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 case information required to be 
furnished pursuant to this subsection, as specified by the Secretary, 
shall include sufficient information (including 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 
established or modified, or are enforcing or seeking to establish, such 
an order.
    ``(c) National Directory of New Hires.--(1) In General.--The 
Secretary shall establish by October 1, 1997, and maintain thereafter, 
an automated directory, to be known as the National Directory of New 
Hires, containing--
            ``(A) information supplied by employers on each newly hired 
        individual, in accordance with paragraph (2); and
            ``(B) information supplied by State agencies administering 
        State unemployment compensation laws, in accordance with 
        paragraph (3).
    ``(2) Employer Information.--(A) Information Required.--Subject to 
subparagraph (D), each employer shall furnish to the Secretary, for 
inclusion in the directory under this subsection, not later than 10 
days after the date (on or after October 1, 1997) on which the employer 
hires a new employee (as defined in subparagraph (C)), a report 
containing the name, date of birth, and social security number of such 
employee, and the employer identification number of the employer.
    ``(B) Reporting Method and Format.--The Secretary shall provide for 
transmission of the reports required under subparagraph (A) using 
formats and methods which minimize the burden on employers, which shall 
include--
            ``(i) automated or electronic transmission of such reports;
            ``(ii) transmission by regular mail; and
            ``(iii) transmission of a copy of the form required for 
        purposes of compliance with section 3402 of the Internal 
        Revenue Code of 1986.
    ``(C) Employee Defined.--For purposes of this paragraph, the term 
``employee''--
            ``(i) means (subject to clause (ii)) any individual subject 
        to the requirement of section 3402(f)(2) of the Internal 
        Revenue Code of 1986; and
            ``(ii) does not include an employee of a Federal or State 
        agency performing law enforcement functions, or of a Federal 
        agency performing intelligence or counterintelligence 
        functions, where the head of such agency has determined that 
        reporting pursuant to this paragraph with respect to such 
        employee could endanger the safety of the employee or 
        compromise an ongoing investigation or intelligence mission.
    ``(D) Paperwork Reduction Requirement.--As required by the 
information resources management policies published by the Director of 
the Office of Management and Budget pursuant to 44 U.S.C. 3504(b)(1), 
the Secretary, in order to minimize the cost and reporting burden on 
employers, shall not require reporting pursuant to this paragraph if an 
alternative reporting mechanism can be developed that either relies on 
existing Federal or State reporting or enables the Secretary to collect 
the needed information in a more cost-effective and equally expeditious 
manner, taking into account the reporting costs on employers.
    ``(E) Civil Money Penalty on Noncomplying Employers.--(i) Any 
employer that fails to make a timely report in accordance with this 
paragraph with respect to an individual shall be subject to a civil 
money penalty, for each calendar year in which the failure occurs, of 
the lesser of $500 or 1 percent of the wages or other compensation paid 
by such employer to such individual during such calendar year.
    ``(ii) Subject to clause (iii), the provisions of section 1128A 
(other than subsections (a) and (b) thereof) shall apply to a civil 
money penalty under clause (i) in the same manner as they apply to a 
civil money penalty or proceeding under section 1128A(a).
    ``(iii) Any employer with respect to whom a penalty under this 
subparagraph is upheld after an administrative hearing shall be liable 
to pay all costs of the Secretary with respect to such hearing.
    ``(3) Employment Security Information.--(A) Reporting 
requirement.--Each State agency administering a State unemployment 
compensation law approved by the Secretary of Labor under the Federal 
Unemployment Tax Act shall furnish to the Secretary of Health and Human 
Services extracts of the reports to the Secretary of Labor concerning 
the wages and unemployment compensation paid to individuals required 
under section 303(a)(6), in accordance with subparagraph (B).
    ``(B) Manner of Compliance.--The extracts required under 
subparagraph (A) shall be furnished to the Secretary of Health and 
Human Services on a quarterly basis, with respect to calendar quarters 
beginning on and after October 1, 1995, by such dates, in such format, 
and containing such information as required by that Secretary in 
regulations.
    ``(d) Data Matches and Other Disclosures.--(1) Verification by 
Social Security Administration.--(A) The Secretary shall transmit data 
on individuals and employers in the registries 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 necessary and feasible, and report 
to the Secretary, the following information in data supplied by the 
Secretary pursuant to subparagraph (A):
            ``(i) the name, social security number, and birth date of 
        each individual; and
            ``(ii) the employer identification number of each employer.
    ``(2) Child Support Locator Matches.--For the purpose of locating 
individuals for purposes of paternity establishment and establishment 
and enforcement of child support, the Secretary shall--
            ``(A) match data in the New Hire Directory against data in 
        the Child Support Registry not less often than every 2 working 
        days; and
            ``(B) report information obtained from such a match to 
        concerned State agencies operating programs under this part not 
        later than 2 working days after such match.
    ``(3) Data Matches and Disclosures of Data in All Registries.--(A) 
For Title IV Program Purposes.--The Secretary shall--
            ``(i) perform matches of data in each registry maintained 
        under this section against data in each other such registry 
        (other than the matches required pursuant to paragraph (1)), 
        and report information resulting from such matches to State 
        agencies operating programs under this part and parts A, F, and 
        G; and
            ``(ii) disclose data in such registries to such State 
        agencies--
to the extent, and with the frequency, that the Secretary determines to 
be effective in assisting such States to carry out their 
responsibilities under such programs.
    ``(B) For Income Eligibility Verification System.--The Secretary 
shall disclose data in the registries maintained under this section to 
the programs specified in section 1137(b), to the extent necessary to 
enable such programs to meet requirements for an income eligibility 
verification system under such section 1137.
    ``(C) To Social Security Administration.--The Secretary shall 
disclose data in the registries maintained under this section to the 
Social Security Administration--
            ``(i) for the purpose of determining the accuracy of 
        payments under the supplemental security income program under 
        title XVI; or
            ``(ii) for use in connection with benefits under title II.
    ``(4) Other Disclosures of New Hire Data.--The Secretary shall 
disclose data in the New Hire Directory under subsection (c)--
            ``(A) to the Secretary of the Treasury for purposes 
        directly connected with--
                    ``(i) the administration of the earned income tax 
                credit under section 32 of the Internal Revenue Code of 
                1986, or the advance payment of such credit under 
                section 3507 of such Code; or
                    ``(ii) verification of a claim with respect to 
                employment in an individual tax return; and
            ``(B) to State agencies operating employment security and 
        workers compensation programs, for the purpose of assisting 
        such agencies to determine the allowability of claims for 
        benefits under such programs.
    ``(5) Disclosures for Research Purposes.--The Secretary is 
authorized to disclose data in registries maintained under this section 
for research purposes found by the Secretary to be likely to contribute 
to achieving the purposes of this part or part A, F, or G, but without 
personal identifiers.
    ``(f) Fees.--(1) For SSA Verification.--The Secretary shall 
reimburse the Commissioner of Social Security, at a rate negotiated 
between the Secretary and the Commissioner, the costs incurred by the 
Commissioner in performing the verification services specified in 
subsection (d).
    ``(2) For Information from SESAs.--The Secretary shall reimburse 
costs incurred by State employment security agencies in furnishing data 
as required by subsection (c)(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 data).
    ``(3) For Information Furnished to State and Federal Agencies.--
State and Federal agencies receiving data or information from the 
Secretary pursuant to this section shall reimburse the costs incurred 
by the Secretary in furnishing such data or information, at rates which 
the Secretary determines to be reasonable (which rates shall include 
payment for the costs of obtaining, verifying, maintaining, and 
matching such data or information).
    ``(g) Restriction on Disclosure and Use.--Data in registries 
maintained pursuant to this section, and information resulting from 
matches using data maintained in such registries, shall not be used or 
disclosed except as specifically provided in this section.
    ``(h) Retention of Data.--Data in registries maintained pursuant to 
this title, and data resulting from matches performed pursuant to this 
section, shall be retained for such period (determined by the 
Secretary) as appropriate for the data uses specified in this section.
    ``(i) 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 system; and
            ``(2) restrict access to confidential information in the 
        registries to authorized persons, and restrict use of such 
        information to authorized purposes.
    ``(j) Limit on Liability.--The Secretary shall not be liable to 
either a State or an individual for inaccurate information provided to 
a registry maintained under this section and disclosed by the Secretary 
in accordance with this section.''.
    (b) Conforming Amendments.--
            (1) To title iv-d.--Section 454(8) is amended--
                    (A) by striking ``, and'' at the end of 
                subparagraph (A);
                    (B) in subparagraph (B), to read as follows:
                    ``(B) the Federal Parent Locator Service 
                established under section 453; and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(C) the National Welfare Reform Information 
                Clearinghouse established under section 453A;''.
            (2) To federal unemployment tax act.--26 U.S.C. 3304 is 
        amended in paragraph (16)--
                    (A) by striking ``Secretary of Health, Education, 
                and Welfare'' each place it 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 453A(b) of the Social Security Act, and''.
            (3) To state grant program under title iii of the social 
        security act.--Section 303(a) is amended--
                    (A) by striking ``and'' at the end of paragraph 
                (8);
                    (B) by striking the period at the end of paragraph 
                (9) and inserting ``; and''; and
                    (C) by adding after paragraph (9) the following new 
                paragraph:
            ``(10) 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 453A(b)(3), and compliance with such provisions as such 
        Secretary may find necessary to ensure the correctness and 
        verification of such reports.''.

SEC. 626. EXPANDED LOCATE AUTHORITY.

    (a) Expanded Authority to Locate Individuals and Assets.--Section 
453 is amended--
            (1) in subsection (a), by striking all that follows 
        ``subsection (c))'' and inserting the following:

``, for the purpose of establishing, setting the amount of, 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 
                such individual's social security number (or numbers), 
                most recent residential address, and the name, address, 
                and employer identification number of such individual's 
                employer; and
            ``(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.''; and
            (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 
                specified 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))'';
            (3) in subsection (e)(1), by inserting before the period 
        ``, or by consumer reporting agencies''.
    (b) Reimbursement for Data From Federal Agencies.--Section 
453(e)(2) is amended in the fourth sentence by inserting before the 
period ``in an amount which the Secretary determines to be reasonable 
payment for the data exchange (which amount shall not include payment 
for the costs of obtaining, compiling, or maintaining the data)''.
    (c) Access to Consumer Reports Under Fair Credit Reporting Act.--
(1) Section 608 of the Fair Credit Reporting Act (15 U.S.C. 1681f) is 
amended--
            (A) by striking ``, limited to'' and inserting ``to a 
        governmental agency (including the entire consumer report, in 
        the case of a Federal, State, or local agency administering a 
        program under part D of title IV of the Social Security Act, 
        and limited to''; and
            (B) by striking ``employment, to a governmental agency'' 
        and inserting ``employment, in the case of any other 
        governmental agency)''.
    (2) Reimbursement for reports by state agencies and credit 
bureaus.--Section 453 is amended by adding at the end the following new 
subsection:
    ``(g) The Secretary is authorized to reimburse costs to State 
agencies and consumer credit reporting agencies the costs incurred by 
such entities in furnishing information requested by the Secretary 
pursuant to this section in an amount which the Secretary determines to 
be reasonable payment for the data exchange (which amount shall not 
include payment for the costs of obtaining, compiling, or maintaining 
the data).''.
    (d) Disclosure of Tax Return Information.--(1) Section 
6103(1)(6)(A)(ii) of the Internal Revenue Code of 1986 (26 U.S.C. 
6103(1)(6)(A)(ii) is amended by striking ``, but only if'' and all that 
follows and inserting a period.
    (2) Section 6103(1)(8)(A) of the Internal Revenue Code of 1986 (26 
U.S.C. 6103(1)(8)(A)) is amended by inserting ``Federal,'' before 
``State or local''.
    (e) Technical Amendments.--
            (1) Sections 452(a)(9), 453(a), 453(b), 463(a), and 463(e) 
        are each amended by inserting ``Federal'' before ``Parent'' 
        each place it appears.
            (2) Section 453 is amended in the heading by adding 
        ``FEDERAL'' before ``PARENT''.

SEC. 627. STUDIES AND DEMONSTRATIONS CONCERNING LOCATOR ACTIVITIES.

    (a) Studies.--The Secretary of Health and Human Services shall 
study, and report and make recommendations to the Congress concerning--
            (1) whether access to information available through the 
        Federal Parent Locator Service under section 453 of the Social 
        Security Act should be afforded to noncustodial parents seeking 
        to locate their children and, if so, whether custodial parents 
        at risk of harm by such noncustodial parents could be 
        adequately protected; and
            (2) the feasibility, implications, and costs of 
        establishing and operating electronic data interchanges between 
        such Service and major consumer credit reporting bureaus.
    (b) Demonstrations.--The Secretary shall make grants to States, 
from funds available under section 452(j) of the Social Security Act, 
for demonstrations designed to test the utility of automated data 
exchanges with State data bases that have the potential to improve the 
States' effectiveness in locating individuals and resources for 
purposes of establishing paternity and establishing and enforcing 
support obligations.

SEC. 628. USE OF SOCIAL SECURITY NUMBERS.

    (a) State Law Requirement.--Section 466(a) is amended by adding at 
the end the following new paragraph:
            ``(13) Social security numbers required.--Procedures 
        requiring the recording of social security numbers--
                    ``(A) of both parties on marriage licenses and 
                divorce decrees; and
                    ``(B) of both parents, on birth records and child 
                support and paternity orders.''.
    (b) Clarification of Federal Policy.--Section 205(c)(2)(C)(ii) is 
amended by striking the third sentence and inserting ``This clause 
shall not be considered to authorize disclosure of such numbers except 
as provided in the preceding sentence.''.

           Part D--Streamlining and Uniformity of Procedures

SEC. 635. ADOPTION OF UNIFORM STATE LAWS.

    (a) Section 466(a) is amended by adding at the end the following 
new paragraph:
            ``(14) Interstate enforcement.--(A) Adoption of uifsa.--
        Procedures under which the State adopts in its entirety (with 
        the modifications and additions specified in this paragraph) 
        not later than January 1, 1996, 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) Expanded application of uifsa.--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) Long-arm jurisdiction, based on residence of child.--
        The State law adopted pursuant to subparagraph (A) shall 
        presume that, in the case where a child meets the criteria for 
        residence in the State, a tribunal of the State having 
        jurisdiction over such child has jurisdiction over both parents 
        of such child, if parentage has been legally established or 
        acknowledged, or may be presumed under the laws of the State.
            ``(D) Jurisdiction to modify orders.--For purposes of the 
        State law adopted pursuant to subparagraph (A), section 
        611(a)(1) of such Uniform Act shall be amended to read as 
        follows:
            ```(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'.
            ``(E) Parties' option concerning jurisdiction.--The State 
        law adopted pursuant to subparagraph (A) shall allow parties, 
        by agreement, to permit a State that issued an order to retain 
        jurisdiction which the State would otherwise lose under the 
        provisions of such law.
            ``(F) Service of process.--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.
            ``(G) Cooperation by employers.--The State law adopted 
        pursuant to subparagraph (A) shall provide for the use of 
        procedures (including sanctions for noncompliance) under which 
        all entities in the State (including for-profit, nonprofit, and 
        governmental employers) are required 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.''.
    (b) Expedited Appeal of Constitutional Challenge.--(1) An appeal 
may be taken directly to the Supreme Court of the United States from 
any interlocutory or final judgment, decree, or order issued by a 
United States district court ruling upon the constitutionality of 
section 466(a)(14)(C) of the Act, as added by subsection (a).
    (2) The Supreme Court shall, if it has not previously ruled on the 
question, accept jurisdiction over, and advance on the docket, and 
expedite to the greatest extent possible, such appeal. All cases 
raising such question shall be consolidated to the maximum extent 
permissible under applicable rules of civil procedure.

SEC. 636. STATE LAWS PROVIDING EXPEDITED PROCEDURES.

    (a) State Law Requirements.--Section 466 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) Expedited Procedures.--(1) Administrative action by state 
agency.--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) Establish or modify support amount.--To establish the 
        amount of support awards in all cases in which services are 
        being provided under this part, and to modify the amount of 
        such awards under all orders included in the central case 
        registry established under section 454A(e) (including orders 
        entered by a court), in accordance with the guidelines 
        established under section 467.
            ``(B) Genetic testing.--To order genetic testing for the 
        purpose of paternity establishment as provided in section 
        466(a)(5).
            ``(C) Default orders.--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.
            ``(D) Subpoenas.--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.
            ``(E) Access to personal and financial information.--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; and
                    ``(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) Income withholding.--To order income withholding in 
        accordance with section 466(a)(1) and (b).
            ``(G) Change in payee.--(In cases where support is subject 
        to an assignment under section 402(a)(26), 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) Secure assets to satisfy arrearages.--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) Increase monthly payments.--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) Suspension of drivers' licenses.--To suspend drivers' 
        licenses of individuals owing past-due support, in accordance 
        with subsection (a)(16).
    ``(2) Substantive and procedural rules.--The expedited procedures 
required under subsection (a)(2) shall include the following rules and 
authority, applicable with respect to all proceedings to established 
paternity or to establish, modify, or enforce support orders:
            ``(A) Locator information; presumptions concerning 
        notice.--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 deligent 
                effort has been made to ascertain such a 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) Statewide jurisdiction.--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.''.
    (c) Exceptions from State Law Requirements.--Section 466(d) is 
amended--
            (1) by striking ``(d) If'' and inserting ``(d) Exemptions 
        From Requirements.--(1) In General.--Subject to paragraph (2), 
        if''; and
            (2) by adding at the end the following new paragraph:
            ``(2) Non-Exempt Requirements.--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).''.
    (d) Automation of State Agency Functions.--Section 454A, as added 
by section 614 and amended by sections 621 and 622, is further 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 the expedited administrative procedures required 
under section 466(c).''.

                    PART E--PATERNITY ESTABLISHMENT

SEC. 640. STATE LAWS CONCERNING PATERNITY ESTABLISHMENT.

    (a) State Laws Required.--Section 466(a)(5) is amended--
            (1) by striking ``(5)'' and inserting ``(5) Pro cedures 
        concerning paternity establish ment.--'';
            (2) in subparagraph (A)--
                    (A) by striking ``(A)'' and inserting ``(A) 
                Establishment process available from before birth until 
                age eighteen.--'';
                    (B) by indenting clause (ii) an additional unit of 
                indentation from the left margin; and
                    (C) by adding after and below clause (ii) the 
                following new clause:
                            ``(iii) Procedures which permit the 
                        initiation of proceedings to establish 
                        paternity before the birth of the child 
                        concerned.'';
            (3) in subparagraph (B)--
                    (A) by striking ``(B)'' and inserting ``(B) 
                Procedures concerning genetic testing.--(i)'';
                    (B) in clause (i), as redesignated, by inserting 
                before the period ``, where such request is supported 
                by a sworn statement by such party setting forth facts 
                establishing a reasonable possibility of the requisite 
                sexual contact'';
                    (C) by inserting after and below 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 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.'';
            (4) in subparagraph (C), to read as follows:
                    ``(C) Voluntary acknowledgment procedure.--
                Procedures for a simple civil process for voluntarily 
                acknowledging paternity under which--
                            ``(i) the benefits, rights and 
                        responsibilities of acknowledging paternity are 
                        explained to unwed parents;
                            ``(ii) due process safeguards are afforded; 
                        and
                                    ``(iii) hospitals and other health 
                                care facilities providing inpatient or 
                                outpatient maternity and pediatric 
                                services are required, as a condition 
                                of participation in the State program 
                                under title XIX--
                                    ``(I) to explain to unwed parents 
                                the matters specified in clause (i);
                                    ``(II) to make available the 
                                voluntary acknowledgment procedure 
                                required under this subparagraph; and
                                    ``(III) (in the case of hospitals 
                                providing maternity services) to have 
                                facilities for obtaining blood or other 
                                genetic samples from the mother, 
                                putative father, and child for genetic 
                                testing; to inform the mother and 
                                putative father of the availability of 
                                such testing (at their expense); and to 
                                obtain such samples upon request of 
                                both such individuals;'';
            (5) in subparagraphs (D) and (E), to read as follows:
                    ``(D) Legal status of acknowledgment.--Procedures 
                under which--
                            ``(i) a voluntary acknowledgment of 
                        paternity creates, at State option, either--
                                    ``(I) a conclusive presumption of 
                                paternity, or
                                    ``(II) a rebuttable presumption 
                                which becomes a conclusive presumption 
                                within one year, unless rebutted or 
                                invalidated by an intervening 
                                determination which reaches a contrary 
                                conclusion;
                            ``(ii) (at State option), notwithstanding 
                        clause (i), upon the request of a party, a 
                        determination of paternity based on an 
                        acknowledgment may be vacated on the basis of 
                        new evidence, the existence of fraud, or the 
                        best interests of the child; and
                            ``(iii) a voluntary acknowledgment of 
                        paternity is admissible as evidence of 
                        paternity, and as a basis for seeking a support 
                        order, without requiring any further 
                        proceedings to establish paternity.
                    ``(E) Bar on acknowledgment ratification 
                proceedings.--Procedures under which no judicial or 
                administrative proceedings are required or permitted to 
                ratify an unchallenged acknowledgment of paternity.'';
            (6) in subparagraph (F), to read as follows:
                    ``(F) Admissibility of genetic testing results.--
                Procedures--
                            ``(i) requiring 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
            ``(7) by adding after subparagraph (H) the following new 
        paragraphs:
                                    ``(I) No right to jury trial.--
                                Procedures providing that the parties 
                                to an action to establish paternity are 
                                not entitled to jury trial.
                    ``(J) Temporary support order based on probable 
                paternity in contested cases.--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) Proof of certain support and paternity 
                establishment costs.--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) Waiver of state debts for cooperation.--
                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) Standing of putative fathers.--Procedures 
                ensuring that the putative father has a reasonable 
                opportunity to initiate a paternity action.''.
    (b) Technical Amendment.--Section 468 is amended by striking ``a 
simple civil process for voluntarily acknowledging paternity and''.

SEC. 641. OUTREACH FOR VOLUNTARY PATERNITY ESTABLISHMENT.

    (a) State Plan Requirement.--Section 454(23), as amended by section 
606, is further amended by adding at the end the following new 
subparagraph:
                    ``(C) 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 follow-up efforts 
                        (including at least one contact of each parent 
                        whose whereabouts are known, except where there 
                        is reason to believe such follow-up efforts 
                        would put mother or child at risk), 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) 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) The amendments made by subsection (a) 
shall become effective October 1, 1996.
    (2) The amendments made by subsection (b) shall be effective with 
respect to calendar quarters beginning on and after October 1, 1995.

SEC. 642. PENALTY FOR FAILURE TO ESTABLISH PATERNITY PROMPTLY.

    Section 403 is amended--
            (1) in subsection (a), as amended by section 612(e), by 
        striking ``subsection (h)'' and inserting ``subsections (h) and 
        (i)--''; and
            (2) by adding after subsection (h) the following new 
        subsection:
    ``(i) Penalty for Failure to Establish Paternity Promptly.--(1) In 
general.--The amounts otherwise payable to a State under subsection (a) 
for any calendar quarter beginning 10 months or more after enactment of 
this subsection shall be reduced by an amount, determined pursuant to 
regulations in accordance with paragraph (2), for certain children for 
whom paternity has not been established.
    ``(2) Reduction formula.--The Secretary shall promulgate 
regulations specifying the formula for the reduction required under 
this subsection, which formula shall provide for a reduction in Federal 
matching payments to a State under this section by an amount equal to 
the product of--
            ``(A) the number (after allowing for the tolerance level 
        established under paragraph (3)) of children born on or after 
        the date 10 months after enactment of this provision who are 
        receiving aid under the State plan under part A, whose 
        custodial relatives have, throughout the preceding 12-month 
        period, complied with the cooperation requirements specified in 
        section 454(25)(D), but for whom paternity has not been 
        established;
            ``(B) the average monthly assistance payment under the 
        State plan under this part; and
            ``(C) the Federal matching rate applicable to such 
        assistance payment.
    ``(3) Tolerance level.--(A) The tolerance level, for purposes of 
paragraph (2)(A), shall not be higher than the percentage specified in 
subparagraph (B) of children in the State described in paragraph (1), 
and may decrease over time to make allowance for a State's inability to 
establish paternity in all cases.
    ``(B) The percentage specified in this paragraph shall be 25 
percent for fiscal years 1997 and 1998, 20 percent for fiscal years 
1999 and 2000, 15 percent for fiscal years 2001 and 2002, and 10 
percent for fiscal year 2003 and each succeeding fiscal year.''.

SEC. 643. INCENTIVES TO PARENTS TO ESTABLISH PATERNITY.

    (a) Optional State Activities.--Section 455 is amended by adding at 
the end the following new subsection:
    ``(f) Paternity Establishment Incentives to Families.--(1) The 
Secretary, in accordance with regulations, may approve proposals by 
States to amend State plans under this part to provide for incentive 
payments to families to encourage paternity establishment.
    ``(2) Federal financial participation shall be available in 
accordance with subsection (a) for expenditures by a State pursuant to 
a plan amendment approved under paragraph (1).
    (b) Demonstrations.--(1) Projects Authorized.--The Secretary shall 
authorize up to 3 States to conduct demonstrations providing financial 
incentives to families for establishment of paternity.
    (2) Federal funding.--(A) Subject to subparagraph (B), a State 
participating in a demonstration under this section shall be entitled 
to Federal payments pursuant to section 455(f) of the Social Security 
Act for 90 percent of the payments to families under such 
demonstration.
    (B) Funding limitation.--Total Federal expenditures for 
demonstrations under this section shall not exceed $1,000,000.

        PART F--ESTABLISHMENT AND MODIFICATION OF SUPPORT ORDERS

SEC. 651. NATIONAL COMMISSION ON CHILD SUPPORT GUIDELINES.

    (a) Establishment.--The Secretary is authorized to establish, in 
accordance with this section, a commission to be known as the 
``National Commission on Child Support Guidelines'' (in this section 
referred to as the ``Commission'').
    (b) General Duties.--The Commission shall consider whether a 
national child support guideline is advisable and, if it so determines, 
shall develop and propose for congressional consideration such a 
guideline (or parameters for State guidelines), reflecting the 
Commission's study of various guideline models and its conclusions 
concerning their strengths and deficiencies, and specifically 
reflecting consideration of the need for simplicity and ease of 
application of guidelines, and of the matters enumerated in subsection 
(c).
    (c) Matters for Consideration by the Commission.--In making the 
recommendations concerning guidelines required pursuant to subsection 
(b), the Commission shall consider--
            (1) the adequacy of State child support guidelines 
        established pursuant to section 467;
            (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 one 
        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 one or both 
        parents, including--
                    (A) support (including shared support) for post-
                secondary or vocational education; and
                    (B) support for disabled adult children; and
            (7) whether, or to what extent, support levels should be 
        adjusted in cases where custody is shared or where the 
        noncustodial parent has extended visitation rights.
    (d) Membership.--
            (1) Number; appointment.--
                    (A) In general.--The Commission shall be composed 
                of 12 individuals appointed not later than March 1, 
                1995, of which--
                            (i) two shall be appointed by the Chairman 
                        of the Senate Committee on Finance, and one 
                        shall be appointed by the Ranking Minority 
                        Member of such Committee;
                            (ii) two shall be appointed by the Chairman 
                        of the House Committee on Ways and Means, and 
                        one shall be appointed by the Ranking Minority 
                        Member of such Committee; and
                            (iii) six 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 one member shall represent advocacy groups for 
                custodial parents, at least one member shall represent 
                advocacy groups for noncustodial parents, and at least 
                one member shall be the director of a State program 
                under title IV-D of the Social Security Act.
            (2) Terms of office.--Each member shall be appointed for 
        the life of the Commission. 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, except that references in such section to the Office of 
Technology Assessment shall be disregarded.
    (f) Report.--Not later than July 1, 1997, the Commission shall 
report to the President and the Congress on the results of the studies 
required under this section.
    (g) The Commission shall terminate 6 months after submission of the 
report required under subsection (f).
    (h) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $1,000,000 for each of fiscal 
years 1995 and 1996, to remain available until expended.

SEC. 652. STATE LAWS CONCERNING MODIFICATION OF CHILD SUPPORT ORDERS.

    (a) State Law Requirements.--Section 466(a)(10) is amended--
            (1) by inserting ``Procedures for modification of support 
        orders.--'' after ``(10)'';
            (2) by redesignating subparagraph (C) as subparagraph (E) 
        and inserting after subparagraph (B) the following new 
        subparagraphs:
                    ``(C)(i) Procedures to ensure that, beginning 
                October 1, 1999 (or such earlier date as the State may 
                select), the State agency (or, at the option of the 
                State, the local agency) reviews and adjusts, in 
                accordance with guidelines established pursuant to 
                section 467(a), judicial and administrative child 
                support orders included in the State registry 
                established pursuant to section 454A(d), under which 
                (subject to clauses (ii) and (iii) the order--
                            ``(I) is to be reviewed not later than 36 
                        months after the establishment of the order or 
                        the most recent adjustment of (or determination 
                        not to adjust) such order; and
                            ``(II) (at State option) may not be 
                        reviewed during a minimum period established by 
                        the State following the establishment or most 
                        recent review of the order.
                    ``(ii) The requirement of clause (i)(I) shall not 
                apply in any case where--
                            ``(I) the State has determined, in 
                        accordance with regulations of the Secretary, 
                        that such a review would not be in the best 
                        interests of the child; or
                            ``(II) both parents have been informed of 
                        the modified support amount that would be 
                        imposed under the guidelines and have declined 
                        such modification in writing.
                    ``(iii) The State shall provide for review of a 
                child support order upon the request of either parent, 
                notwithstanding the requirement of clause (i)(II), 
                whenever, subsequent to the establishment or most 
                recent review--
                            ``(I) either parent's income has changed by 
                        more than 20 percent, or
                            ``(II) other substantial changes have 
                        occurred in either parent's circumstances.
                    ``(D) Amount of modification based on guidelines.--
                Procedures under which support orders reviewed in 
                accordance with subparagraph (C) must be adjusted in 
                accordance with the guidelines established pursuant to 
                section 467(a), without a requirement for any other 
                change in circumstances (except that the State may 
                refuse to modify an order in any case where the change 
                in the support amount, if so modified, would not exceed 
                a threshold percentage (which may not be greater than 
                10 percent)).'';
            (3) in subparagraph (E), as redesignated--
                    (i) by striking ``(E)'' and inserting ``(E) Due 
                process safeguards.--'';
                    (ii) in the matter preceding clause (i), by 
                striking ``this part--'' and inserting ``this part, in 
                accordance with State due process requirements--'';
                    (iii) in clause (i), by striking ``, at least 30 
                days before the commencement of such review''; and
                    (iv) in clause (iii), by striking ``not less than 
                30 days'' and inserting ``a reasonable time''.
    (b) Automated Procedures.--Section 454A, as previously added and 
amended by this Act, is further amended by adding at the end the 
following new subsection:
    ``(i) Modification of Support Orders.--The automated system 
required under this section shall be used, to the maximum extent 
feasible, to assist in the review and modification of support orders in 
accordance with the timetable under section 466(a)(10) and the 
guidelines under section 467.''.

SEC. 653. STUDY ON USE OF TAX RETURN INFORMATION FOR MODIFICATION OF 
              CHILD SUPPORT ORDERS.

    (a) Requirement for Study.--The Secretary of Health and Human 
Services and the Secretary of the Treasury shall conduct a study to 
determine how return information (as defined in section 6103(b) of the 
Internal Revenue Code of 1986) filed with the Secretary of the Treasury 
might be used to facilitate the process of determining the amount (if 
any) by which child support award amounts should be modified in 
accordance with guidelines established under section 467.
    (b) Amendment to Internal Revenue Code.--Section 6103(1)(6) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(C) Upon written request by the Secretary of 
                Health and Human Services, the Secretary may disclose 
                return information to officers and employees of the 
                Department of the Treasury and the Department of Health 
                and Human Services, as may be specified in such written 
                request, to be used in conducting the study required 
                under section 653 of the Work and Responsibility Act of 
                1994. Return information disclosed pursuant to this 
                subparagraph shall be used only for purposes of 
                conducting such study.''.

                 PART G--ENFORCEMENT OF SUPPORT ORDERS

SEC. 661. REVOLVING LOAN FUND FOR PROGRAM IMPROVEMENTS TO INCREASE 
              COLLECTIONS.

    Part D of title IV is amended by inserting after section 455 the 
following new section:

   ``revolving fund for program improvements to increase collections

    ``Sec. 455A. (a) Purpose; Authorization of Appropriations.--The 
Secretary is authorized to establish a revolving fund for loans to 
States operating programs under this part, for short-term projects by 
such States (and political subdivisions of such States) for making 
operational improvements in such programs with the potential for 
achieving substantial increases in child support collections. There are 
authorized to be appropriated for payment to such fund $10,000,000 for 
each of fiscal years 1998 and 1999, and $20,000,000 for each of fiscal 
years 2000 through 2003: Provided, That payment may be made to this 
fund only to the extent, and in such amounts, as are provided for in 
advance in appropriations Acts.
    ``(b) Criteria for Loan Awards.--Criteria for evaluating 
applications for loans under this section must include--
            ``(1) the likelihood that the proposed project will 
        increase child support collections, and
            ``(2) the availability to the State (or political 
        subdivision) of funding for the project from other sources.
    ``(c) Amount and Duration of Loans.--
            ``(1) Amount.--Loans may be made to a State under this 
        section in amounts not to exceed $5,000,000 per State or 
        $1,000,000 per project (or $5,000,000 for a single Statewide 
        project in a large State). States may supplement loan funds 
        under this section with funds from other sources, and may 
        require contributions from local jurisdictions served by the 
        project.
            ``(2) Duration.--Loan payments to a State for a project 
        under this section may not be made for a period longer than 3 
        years.
    ``(d) Recoupment.--A loan to a State under this section shall be 
recovered from the State over 3 fiscal years, beginning in the fourth 
calendar quarter beginning after the project ends (or, if earlier, the 
sixteenth calendar quarter beginning after loan payments for the 
project began) through--
            ``(1) an offset of one-half of the increase in incentive 
        payments due to the State under section 458 for each calendar 
        quarter until funds are fully repaid, plus
            ``(2) an offset from payments due to the State under 
        section 455(a) for each calendar quarter equal to the amount, 
        if any, by which one-twelfth of the total loan (plus interest) 
        exceeds the amount described under paragraph (1),
with such amounts recovered being credited to the revolving fund under 
this section.
    ``(e) Availability as State Share.--Funds received by a State under 
this section may be used by the State as the non-Federal share of 
expenditures under the State program under this part.''.

SEC. 662. FEDERAL INCOME TAX REFUND OFFSET.

    (a) Changed Order of Refund Distribution Under Internal Revenue 
Code.--(1) Section 6402(c) of the Internal Revenue Code of 1986 is 
amended--
            (A) by striking ``The amount'' and inserting ``(1) In 
        general.--The amount'';
            (B) by striking ``paid to the State. A reduction'' and 
        inserting ``paid to the State.
            ``(2) Priorities for offset. A reduction'';
            (C) by striking ``shall be applied first''and inserting 
        ``shall be applied (after any reduction under subsection (d) on 
        account of a debt owed to the Department of Education or 
        Department of Health and Human Services with respect to a 
        student loan) first'';
            (D) by striking ``has been assigned'' and inserting ``has 
        not been assigned''; and
            (E) by striking ``and shall be applied'' and all that 
        follows and inserting ``and shall thereafter be applied to 
        satisfy any past-due support that has been so assigned.''.
    (2) Section 6402(d)(2) of such Code is amended by striking ``after 
such overpayment'' and all that follows through ``Social Security Act 
and'' and inserting ``(A) before such overpayment is reduced pursuant 
to subsection (c), in the case of a debt owed to the Department of 
Education or Department of Health and Human Services with respect to a 
student loan, (B) after such overpayment is reduced pursuant to 
subsection (c), in the case of any other debt, and (C) in either 
case,''.
    (b) Elimination of Disparities in Treatment of Assigned and Non-
Assigned Arrearages.--(1) Section 464(a) is amended--
            (A) by striking ``(a)'' and inserting ``(a) Offset 
        Authorized.--'';
            (B) in paragraph (1)--
                    (i) in the first sentence, by striking ``which has 
                been assigned to such State pursuant to section 
                402(a)(26) 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)'';
            (C) 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 section 457(a)(4) or 
                (d)(3), in the case of past-due support assigned to a 
                State pursuant to section 402(a)(26) 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) Section 464(b) is amended--
                    (A) by striking ``(b)(1)'' and inserting ``(b) 
                Regulations.--''; and
                    (B) by striking paragraph (2).
            (3) Section 464(c) is amended--
                    (A) by striking ``(c)(1) Except as provided in 
                paragraph (2), as'' and inserting ``(c) Definition.--
                As''; and
                    (B) by striking paragraphs (2) and (3).
    (c) Effective Date.--The amendments made by this section shall 
become effective October 1, 1996.

SEC. 663. INTERNAL REVENUE SERVICE COLLECTION OF ARREARS.

    (a) Amendment to Internal Revenue Code.--Section 6305(a) of the 
Internal Revenue Code of 1986 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 a comma;
            (4) by adding after paragraph (4) 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, 1996.

SEC. 664. AUTHORITY TO COLLECT SUPPORT FROM EMPLOYMENT-RELATED PAYMENTS 
              BY UNITED STATES.

    (a) Consolidation and Streamlining of Authorities.--
            (1) Section 459 is amended in the caption by inserting 
        ``INCOME WITHHOLDING,'' before ``GARNISHMENT''.
            (2) Section 459(a) is amended--
                    (A) by striking ``(a)'' and inserting ``(a) Consent 
                To Support Enforcement.--
                    (B) by striking ``section 207'' and inserting 
                ``section 207 of this Act and 38 U.S.C. 5301''; and
                    (C) by striking all that follows ``a private 
                person,'' 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) Section 459(b) is amended to read as follows:
    ``(b) Consent to Requirements Applicable to Private Person.-- 
Except as otherwise provided herein, each entity specified in 
subsection (a) shall be subject, with respect to notice to withhold 
income pursuant to section 466(a)(1) or (b), 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) Section 459(c) is redesignated and relocated as 
        paragraph (2) of subsection (f), and is amended--
                    (A) by striking ``responding to interrogatories 
                pursuant to requirements imposed by section 461(b)(3)'' 
                and inserting ``taking actions necessary to comply with 
                the requirements of subsection (A) with regard to any 
                individual''; and
                    (B) by striking ``any of his duties'' and all that 
                follows and inserting ``such duties.''.
            (5) Section 461(b) is relocated and redesignated as section 
        459(c)(1), and is amended to read as follows:
    ``(c) Designation of Agent; Response to Notice or Process.--(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.''.
            (6) Section 459(d) is redesignated as paragraph (2) of 
        section 459(c), and is amended to read as follows:
            ``(2) Whenever an agent designated pursuant to paragraph 
        (1) receives notice pursuant to section 466(a)(1) or (b), 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 
                fifteen 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) within 30 days (or such longer period as may 
                be prescribed by applicable State law) after receipt of 
                a notice pursuant to section 466(a)(1) or (b), comply 
                with all applicable provisions of such section 466; and
                    ``(C) within 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.''.
            (7) Section 461(c) is relocated and redesignated as section 
        459(d), and is amended to read as follows:
    ``(d) Priority of Claims.--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 one person--
            ``(A) support collection under section 466(b) must be given 
        priority over any other process, as provided in section 
        466(b)(7);
            ``(B) 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
            ``(C) 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.''.
            (8) Section 459(e) is amended by striking ``(e)'' and 
        inserting ``(e) No Requirement to Vary Pay Cycles.--''.
            (9) Section 459(f) is amended by striking ``(f)'' and 
        inserting ``(f) Relief from Liability.--(1)''.
            (10) Section 461(a) is redesignated and relocated as 
        section 459(g), and is amended--
                    (A) by striking ``(g)'' and inserting ``(g) 
                Regulations.--''; and
                    (B) by striking ``section 459'' and inserting 
                ``this section''.
            (11) Section 462(f) is relocated and redesignated as 
        section 459(h), and is amended to read as follows:
    ``(h) Moneys Subject to Process.--(1) 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--
            ``(A) consist of--
                    ``(i) 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); and
                    ``(ii) 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; and
                            ``(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;
            ``(B) do not include any payment--
                    ``(i) as compensation for death under any Federal 
                program;
                    ``(ii) under any Federal program established to 
                provide `black lung' benefits;
                    ``(iii) 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);
                    ``(iv) by way of reimbursement or otherwise, to 
                defray expenses incurred by such individual in carrying 
                out duties associated with his employment; or
                    ``(v) as allowances for members of the uniformed 
                services payable pursuant to chapter 7 of 37 U.S.C., as 
                prescribed by the Secretaries concerned (defined by 37 
                U.S.C. 101(5)) as necessary for the efficient 
                performance of duty.''.
            (12) Section 462(g) is redesignated and relocated as 
        section 459(i).
            (13)(A) Section 462 is amended--
                    (i) in subsection (e)(1), by redesignating 
                subparagraphs (A), (B), and (C) as clauses (i), (ii), 
                and (iii); and
                    (ii) in subsection (e), by redesignating paragraphs 
                (1) and (2) as subparagraphs (A) and (B).
            (B) Section 459 is amended by adding at the end the 
        following:
    ``(j) Definitions.--For purposes of this section--''.
            (C) Subsections (a) through (e) of section 462, as amended 
        by subparagraph (A), are relocated and redesignated as 
        paragraphs (1) through (4) of section 459(j), and are indented 
        accordingly.
    (b) Conforming Amendments.--
            (1) To title iv-d.--Sections 461 and 462 are repealed.
            (2) To 5 u.s.c.--5 U.S.C. 5520a 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)'' and 
        inserting ``section 459 of the Social Security Act (42 U.S.C. 
        659)''.
    (d) Military retired and retainer pay.--(1) Definition of Court.--
10 U.S.C. 1408(a)(1) is amended--
            (A) by striking ``and'' at the end of subparagraph (B);
            (B) by striking the period at the end of subparagraph (C) 
        and inserting ``; and''; and
            (C) by adding after subparagraph (C) the following new 
        paragraph:
                    ``(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).'';
    (2) Definition of court order.--10 U.S.C. 1408(a)(2) is amended 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--''.
    (3) Public payee.--10 U.S.C. 1408(d) is amended--
            (A) in the heading, by striking ``to spouse'' and inserting 
        ``to (or for benefit of)''; 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''.
    (4) Relationship to title iv-d.--10 U.S.C. 1408 is amended 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 on the date six months after enactment of this Act.

SEC. 665. MOTOR VEHICLE LIENS.

    Section 466(a)(4) is amended--
            (1) by striking ``(4) Procedures'' and inserting ``(4) 
        Liens.--(A) In general.--''; and
            (2) by adding at the end the following new subparagraph:
                    ``(B) Motor vehicle liens.--Procedures for placing 
                liens for arrears of child support on motor vehicle 
                titles of individuals owing such arrears equal to or 
                exceeding two months of support, under which--
                            ``(i) any person owed such arrears 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.''.

SEC. 666. VOIDING OF FRAUDULENT TRANSFERS.

    Section 466(a) is amended by adding at the end the following new 
paragraph:
            ``(15) Fraudulent transfers.--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. 667. STATE LAW AUTHORIZING SUSPENSION OF LICENSES.

    Section 466(a) is amended by adding at the end the following new 
paragraph:
            ``(16) Authority to withhold or suspend licenses.--
        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. 668. REPORTING ARREARAGES TO CREDIT BUREAUS.

    Section 466(a)(7) is amended to read as follows:
            ``(7) Reporting arrearages to credit bureaus.--(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 by one month or more 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. 669. EXTENDED STATUTE OF LIMITATION FOR COLLECTION OF ARREARAGES.

    (a) Amendments.--Section 466(a)(9) is amended--
            (1) by striking ``(9) Procedures'' and inserting ``(9) 
        Legal treatment of arrears.--(A) Finality.--'';
            (2) by redesignating indented subparagraphs (A), (B), and 
        (C) as clauses (i), (ii), and (iii), respectively; and
            (3) by adding after and below subparagraph (A), as 
        redesignated, the following new subparagraph:
                    ``(B) Statute of limitations.--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 read to require any State law to revive any payment 
obligation which had lapsed prior to the effective date of such State 
law.

SEC. 670. CHARGES FOR ARREARAGES.

    (a) State Law Requirement.--Section 466(a) is amended by adding at 
the end the following new paragraph:
            ``(17) Charges for arrearages.--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) is repealed.
    (d) Effective Date.--The amendments made by this section shall be 
effective with respect to arrearages accruing on or after October 1, 
1997.

SEC. 671. VISITATION ISSUES BARRED.

    Section 466(a) is amended by adding at the end the following new 
paragraph:
            ``(18) Visitation issue barred.--Procedures under which 
        failure to pay child support is not a defense to denial of 
        visitation rights, and denial of visitation rights is not a 
        defense to failure to pay child support.''.

SEC. 672. TREATMENT OF SUPPORT OBLIGATIONS UNDER BANKRUPTCY CODE.

    (a) No Stay of Proceedings.--Section 362(b)(2) of title 11, United 
States Code, is amended to read as follows:
            ``(2) under subsection (a) of this section--
                    ``(A) of the commencement or continuation of a 
                judicial or administrative proceeding, or other action 
                under State or territorial law by a governmental unit, 
                against the debtor to establish paternity, to establish 
                or modify an obligation to pay for the support of a 
                spouse, former spouse, or child of the debtor, or to 
                establish a schedule for payment of such support 
                (including any arrearages); or
                    ``(B) of the collection of alimony, maintenance, or 
                support from property that is not property of the 
                estate;''.
    (b) Streamlined Filing Procedure for Support Creditor.--Section 501 
of title 11, United States Code, is amended by adding at the end the 
following new subsection:
    ``(e)(1) The creditor of a claim that is excepted from discharge 
under section 523(a)(5) may file such claim by delivering to the clerk 
of the bankruptcy court in which a petition under this title is 
pending, in person or by registered mail, the claim form promulgated 
under paragraph (2). Such a creditor, filing a claim in such a manner, 
shall not be required to make a personal appearance before the court, 
to be represented by counsel admitted to practice in the jurisdiction 
in which such court is located, to comply with any local rules not 
specified pursuant to paragraph (2), or to pay any filing fees or other 
charges in connection with the filing of such claim.
    ``(2) The Judicial Conference of the United States shall 
promulgate, not later than June 30, 1995--
            ``(A) a standardized, simplified form for filing claims 
        described in paragraph (1); and
            ``(B) procedural guidelines for the use of such form, which 
        rules shall be designed to minimize the burden on support 
        creditors of filing such claims.''.
    (c) Treatment as Preferred Unsecured Creditor.--Section 507(a) of 
title 11, United States Code, is amended--
            (1) by striking ``(8) Eighth,'' and inserting ``(9) 
        Ninth,''; and
            (2) by inserting after paragraph (7) the following new 
        paragraph:
            ``(8) Eighth, unsecured claims for alimony, maintenance, or 
        support of a spouse, former spouse, or child of the debtor 
        allowed under section 502 of this title, to the full extent of 
        such claims, and in accordance with any payment schedule 
        established as described in section 362(b)(2).''.
    (d) Payment Schedule in Chapter 13 Plans.--Section 1322(a)(2) of 
title 11, United States Code, is amended by inserting before the 
semicolon ``(except that the plan shall provide, in the case of a debt 
not subject to discharge under section 523(a)(5), for payment in 
accordance with any payment schedule included in the order providing 
for alimony, maintenance, or support)''.
    (e) Effective Date.--The amendments made by this section shall 
become effective October 1, 1995.

SEC. 673. DENIAL OF PASSPORTS FOR NONPAYMENT OF CHILD SUPPORT.

    (a) HHS Certification Procedure.--(1) Secretarial Responsibility.--
Section 452 is amended by adding at the end the following new 
subsection:
    ``(k) Certifications for Purposes of Passport Restrictions.--(1) In 
General.--Where 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 excess of $5,000, 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 219 of title 22, United States Code.
    ``(2) Limit on Liability.--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 CSE Agency Responsibility.--Section 454, as previously 
amended by sections 601, 605, 615, and 622, is further amended--
            (A) by striking ``and'' at the end of paragraph (27);
            (B) by striking the period at the end of paragraph (28) and 
        inserting ``; and''; and
            (C) by adding after paragraph (28) the following new 
        paragraph:
    ``(29) 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(k) (concerning denial of passports) 
determinations that individuals owe child support arrearages of $5,000 
or more, 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.--Chapter 4 
of title 22, United States Code, is amended by adding at the end the 
following new section:
``Sec. 219. Denial of passport for nonpayment of child support.
    ``(a) In General.--The Secretary, upon certification by the 
Secretary of Health and Human Services, in accordance with section 
452(k) of the Social Security Act, that an individual owes arrearages 
of child support in excess of $5,000, shall refuse to issue a passport 
to such individual, and may revoke, restrict, or limit a passport 
issued previously to such individual.
    ``(b) Limit on Liability.--The Secretary 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.--The amendments made by this section shall 
become effective October 1, 1995.

                         PART H--DEMONSTRATIONS

SEC. 681. CHILD SUPPORT ENFORCEMENT AND ASSURANCE DEMONSTRATIONS.

    (a) Demonstrations Authorized.--(1) Initial Projects.--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 from 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 AFDC.--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) 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 AFDC 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 AFDC Benefits.--In the case of a State in which 
benefit levels under title IV-A of the 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) need for or amount of aid to families with 
                dependent 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 six months following 
        receipt of the interim State reports required by subsection 
        (c); and
            (B) a final report, not later than six months following 
        receipt of the final State reports required under subsection 
        (i).
    (3) Funding for Costs to Secretary.--There are authorized to be 
appropriated $10,000,000 for fiscal year 1997, to remain available 
under expended for payment of the cost of evaluations by the Secretary 
of demonstrations under this section.

SEC. 682. SOCIAL SECURITY ACT DEMONSTRATIONS.

    Section 1115(c)(3) is amended by striking ``increased cost'' and 
all that follows and inserting ``an increase in total costs to the 
Federal Government.''.

                  Part I--Access and Visitation Grants

SEC. 691. GRANTS TO STATES FOR ACCESS AND VISITATION PROGRAMS.

    (a) In General.--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 
the 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) 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) 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 (1)) 
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 one 
biological parent bears to the total number of such children in all 
States.
    ``(2) Minimum Allotment.--Allotments to States under subparagraph 
(A) 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) 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) State programs under this section may, but need not, be 
Statewide.
    ``(3) States administering programs under this section shall 
monitor, evaluate, and report on such programs in accordance with 
requirements established by the Secretary.

                      Part J--Effect of Enactment

SEC. 695. EFFECTIVE DATES.

    (a) In General.--Except as otherwise specifically provided (but 
subject to subsections (b) and (c))--
            (1) provisions of this title requiring enactment or 
        amendment of State laws under section 466 of the Act, or 
        revision of State plans under section 454 of the Act, shall be 
        effective with respect to periods beginning on and after 
        October 1, 1995; and
            (2) all other provisions of this title shall become 
        effective upon enactment.
    (b) Grace Period for State Law Changes.--The provisions of this 
title shall become effective with respect to a State on the later of--
            (1) the date specified in this title, or
            (2) the effective date of laws enacted by the legislature 
        of such State implementing such provisions,

but in no event later than 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 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.
    (c) Grace Period for State Constitutional Amendment.--A State shall 
not be found out of compliance with any requirement enacted by this 
title if it is unable to comply without amending the State constitution 
until the earlier of--
            (1) the date one year after the effective date of the 
        necessary State constitutional amendment, or
            (2) the date five years after enactment of this title.

SEC. 696. SEVERABILITY.

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

    TITLE VII--IMPROVING GOVERNMENT ASSISTANCE AND PREVENTING FRAUD

                        Part A--AFDC Amendments

SEC. 701. PERMANENT REQUIREMENT FOR UNEMPLOYED PARENT PROGRAM.

    (a) In General.--Section 401(h) of the Family Support Act of 1988 
(terminating the requirement that States provide benefits to two-parent 
families based on the unemployment of the principal earner) is 
repealed.
    (b) Applicability to Puerto Rico, American Samoa, Guam, and the 
Virgin Islands.--Section 401(g)(2) of the Family Support Act of 1988 is 
amended, effective on the date of enactment of such Act, to read as 
follows:
            ``(2) The amendments made by this section (other than those 
        made by subsection (c)) shall not become effective with respect 
        to Puerto Rico, American Samoa, Guam, or the Virgin Islands 
        unless the jurisdiction involved notifies the Secretary of 
        Health and Human Services that it chooses to have such 
        amendments apply and submits the necessary plan amendment.''.

SEC. 702. STATE OPTIONS REGARDING UNEMPLOYED PARENT PROGRAM.

    (a) Duration of Unemployment and Recency-of-Work Tests.--(1) 
Section 407(b)(1)(A) of the Act (in the matter preceding clause (i)) is 
amended to read as follows:
            ``(A) subject to paragraph (2), shall provide for the 
        payment of aid to families with dependent children with respect 
        to a dependent child within the meaning of subsection (a)--''.
    (2) Such section is further amended--
            (A) by striking out ``whichever'' in clause (i) and 
        inserting in lieu thereof ``when, if the State chooses to so 
        require (and specifies in its State plan), whichever'',
            (B) by inserting ``when'' before such parent in clause 
        (ii), and
            (C) by striking out ``(iii)(I)'' and inserting in lieu 
        thereof ``(iii) when, if the State chooses to so require (and 
        specifies in its State plan) (I)''.
    (b) State Option To Define ``Unemployment''.--At its option, a 
State may provide aid under part A to children of employed parents and 
may apply, for purposes of section 407 of the Act, a definition of 
unemployment that includes some or all of the individuals who, solely 
by reasons of the standards prescribed by the Secretary of Health and 
Human Services under subsection (a) of such section and in effect on 
the date of enactment of this Act, would not have been eligible for aid 
to families with dependent children, and shall include such definition 
in its State plan approved under part A of title IV of the Act.
    (c) Effective Date.--The amendments made by this section and the 
provisions of this section shall become effective October 1, 1996.

SEC. 703. DEFINITION OF ESSENTIAL PERSON.

    (1) General Requirement.--Section 402 of the Act is amended by 
adding immediately after and below subsection (c) the following new 
subsection:
    ``(d) In order that the State may include the needs of an 
individual in determining the needs of the dependent child and relative 
with whom the child is living, such individual must be living in the 
same home as such child and relative and--
            ``(1) furnishing personal services required because of the 
        relative's physical or mental inability to provide care 
        necessary for herself or himself or for the dependent child 
        (which, for purposes of this subsection only, includes a child 
        receiving supplemental security income benefits under title 
        XVI), or
            ``(2) furnishing child care services, or care for an 
        incapacitated member of the family, that is necessary to permit 
        the caretaker relative--
                    ``(A) to engage in full or part-time employment 
                outside the home, or
                    ``(B) to attend a course of education designed to 
                lead to a high school diploma (or its equivalent) or a 
                course of training on a full or part-time basis, or to 
                participate in the program under part F on a full or 
                part-time basis.''.

SEC. 704. EXPANDED STATE OPTION FOR RETROSPECTIVE BUDGETING.

    Section 402(a)(13) of the Act is amended--
            (1) by striking out in the matter that precedes 
        subparagraph (A) ``but only with respect to any one or more 
        categories of families required to report monthly to the State 
        agency pursuant to paragraph (14),''; and
            (2) by striking out in each of subparagraphs (A) and (B) 
        ``(but only where the Secretary determines it to be 
        appropriate, in the case of families who are required to report 
        monthly to the State agency pursuant to paragraph (14),''.

SEC. 705. DISREGARDS OF INCOME.

    ``(a) Student Earnings.--(1) In General.--Section 402(a)(8)(A)(i) 
of the Act is amended by striking out ``dependent child'' and all that 
follows and inserting in lieu thereof ``individual under age 19 who is 
an elementary or secondary school student''.
    ``(2) Conforming Amendments.--Section 402(a) of the Act is 
amended--
            (A)(i) by striking out ``a dependent child who is a full-
        time student'' in paragraph (8)(A)(vii) and inserting in lieu 
        thereof ``an individual under age 19 who is an elementary or 
        secondary school student'', and
            (ii) by striking out ``such child'' in such paragraph and 
        inserting in lieu thereof ``such individual'', and
            (B) by striking out in paragraph (18) ``of a dependent 
        child'' and inserting in lieu thereof ``of an individual under 
        age 19''.
    (b) Standard Earned Income Disregard Amount.--(1) Section 
402(a)(8)(a)(ii) of the Act is amended by striking out ``$90'' and 
inserting in lieu thereof ``$120, or if greater, $120 adjusted by the 
CPI (as prescribed in section 406(i))''.
    (2) The amendment made by this subsection shall become effective 
October 1, 1996.
    (c) State Option To Disregard Earned Income.--(1) In General.--
Section 402(a)(8)(A)(iv) of the Act is amended to read as follows:
                    ``(iv) may, at its option, disregard amounts of 
                earned income in addition to those required or 
                permitted to be disregarded under this paragraph, and 
                shall specify in its State plan any such additional 
                amounts and the circumstances (including whether they 
                will be disregarded for applicants as well as for 
                recipients) under which they will be disregarded;''
    (2) Conforming Amendments.--
            (A) Clause (ii) of section 402(a)(8)(B) of the Act is 
        repealed.
            (B)(i) Section 402(a)(37) of the Act is amended by striking 
        out ``or because of paragraph (8)(B)(ii)(II)''.
            (ii) Section 1925(a) of the Act is amended by striking out 
        ``or because of section 402(a)(8)(B)(ii)(II) (providing for a 
        time-limited earned income disregard)''.
            (C) Section 402(g)(1)(A)(ii) of the Act is amended by 
        striking out ``increased income'' and all that follows down to 
        the period and inserting in lieu thereof ``amount of earnings 
        from such employment''.
    (3) Effective Date.--The amendments made by this subsection shall 
become effective October 1, 1996.
    (d) Disregard of Training Stipends.--Section 402(a)(8)(A)(v) of the 
Act is amended to read as follows:
                    ``(v) shall disregard from the income of any 
                individual applying for or receiving aid to families 
                with dependent children any amount received as a 
                stipend or allowance under the Job Training Partnership 
                Act or under any other training or similar program;''.
    (e) Mandatory Child Support Pass-Through.--(1) Section 
402(a)(8)(A)(vi) of the Act is amended--
            (A) by striking out ``$50'' (in two places) and inserting 
        in lieu thereof ``$50, or, if greater, $50 adjusted by the CPI 
        (as prescribed in section 406(i));'', and
            (B) by striking out the semicolon at the end and inserting 
        in lieu thereof ``or, in lieu of the amount specified in two 
        places in this clause, such greater amount as the State many 
        choose (and provide for in its State plan);''.
    (2) CPI Adjustment.--Section 406 of the Act is amended by adding at 
the end thereof the following new subsection:
    ``(i) For purposes of this part, an amount is `adjusted by the CPI' 
for any month in a calendar year by multiplying the amount involved by 
the ratio of--
            ``(1) the Consumer Price Index (as prepared by the 
        Department of Labor) for the third quarter of the preceding 
        calendar year, to
            ``(2) such Consumer Price Index for the third quarter of 
        calendar year 1996,
and rounding the product, if not a multiple of $10, to the nearer 
multiple of $10.''.
    (f) Lump-Sum Income.--(1) In General.--Section 402(a)(8)(A) of the 
Act is amended--
            (A) by striking out ``and'' after clause (viii), and
            (B) by adding after and below clause (viii) the following 
        new clause:
                    ``(ix) shall disregard from the income of any 
                family member any amounts of income received in the 
                form of nonrecurring lump-sum payments;''.
    (2) Repeal.--Section 402(a)(17) of the Act is repealed.
    (g) Educational Assistance.--Section 402(a)(8)(A) of the Act is 
further amended by adding after and below clause (ix) the following new 
clause:
                    ``(x) shall disregard all educational assistance 
                provided to a family member;''.
    (h) In-Kind Income.--Such section is further amended by adding 
after and below clause (x) the following new clause:
                    ``(xi) shall disregard all in-kind income provided 
                to a family member;''
    (i) Benefits Under the National and Community Service Act.--Such 
section is further amended by adding after and below clause (xi) the 
following new clause:
                    ``(xii) shall disregard any living allowance, child 
                care allowance, stipend, or educational award paid 
                under section 140 of the National and Community Service 
                Act of 1990 to a family member participating in a 
                national service program carried out with assistance 
                from the Corporation for National and Community 
                Service;''.
    (j) ``Fill-the-Gap'' Disregards.--(1) Such section is further 
amended by adding after and below clauses (xii) the following new 
clause:
                    ``(xiii) may disregard, in addition to any other 
                amounts required or permitted by this paragraph, income 
                described in the State plan by type or source and by 
                amount, but no amount in excess of the difference 
                between the State's standard of need applicable to the 
                family involved and the State's payment amount for a 
                family of the same size with no other income;''.
    (2) The amendment made by this subsection shall become effective 
October 1, 1996.

SEC. 706. STEPPARENT INCOME.

    (a) Section 402(a)(31) of the Act is amended by striking out 
``$90'' and inserting in lieu thereof ``$120'' and by striking out the 
semicolon at the end and inserting in lieu thereof ``, or, at the 
option of the State, so much of such income as exceeds any greater 
amount or amounts as the State agency finds appropriate to strengthen 
family life and provide incentives to increase earnings;''.
    (b) The amendment made by this section shall become effective 
October 1, 1996.

SEC. 707. INCREASE IN RESOURCE LIMIT.

    Section 402(a)(7)(B) of the Act is amended (in the matter preceding 
clause (i)) by striking out ``$1000 or such lower amount as the State 
may determine'' and inserting in lieu thereof ``$2000 or, in the case 
of a family with a member who is 60 years of age or older, $3000''.

SEC. 708. EXCLUSIONS FROM RESOURCES.

    (a) Life Insurance.--Section 402(a)(7)(B)(ii) of the Act is amended 
by striking out the semicolon at the end and inserting in lieu thereof 
``, and the cash value of life insurance policies;''.
    (b) Real Property Which Must Be Disposed of.--Section 
402(a)(7)(B)(iii) of the Act is amended to read as follows: ``real 
property which the family is making a good faith effort to dispose of 
at a reasonable price;''.
    (c) Exclusion of Payments of the EITC.--Section 402(a)(7)(B) of the 
Act is amended--
            (1) by striking out ``or'' after clause (iii), and
            (2) by amending clause (iv) (pertaining to payments by 
        reason of the Earned Income Tax Credit) by striking out ``the 
        following month'' and inserting in lieu thereof ``the following 
        eleven-month period'', and by striking out the semicolon at the 
        end and inserting in lieu thereof ``and any lump-sum payment of 
        State earned income tax credits and any payments described in 
        this clause shall be deemed to be expended prior to other 
        resources that are not excluded;''.
    (d) Lump-Sum Payments for Medical Expenses or Replacement of Lost 
Resources.--Section 402(a)(7)(B) of the Act is amended--
            (1) by striking out ``and'' after clause (iv), and
            (2) by adding after clause (iv) the following new clause: 
        ``(v) for the month of receipt and the following eleven-month 
        period, amounts that have been paid as reimbursement (or 
        payment in advance) for medical expenses or for the cost of 
        repairing or replacing resources of the family;''.
    (e) Individual Development Accounts.--Section 402(a)(7)(B) of the 
Act is amended by adding after clause (v) the following new clause: 
``(vi) amounts, not to exceed $10,000 (including interest) in total, in 
one or more Individual Development Accounts established in accordance 
with (I) section 529 of the Internal Revenue Code of 1986 by any member 
of a family receiving aid to families with dependent children, or (II) 
under a demonstration project conducted under the Individual 
Development Account Demonstration Act of 1994, but only such amounts 
(including interest) that were credited to such account in a month for 
which such aid was paid, or food stamps provided, with respect to such 
individual or in any month after such a month;''.
    (f) Resources for Self-Employment.--Section 402(a)(7)(B) of the Act 
is amended by adding after clause (vi) the following new clause: 
``(vii) liquid and nonliquid resources that are or will be used for the 
self-employment of a family member, to the extent and under the 
circumstances allowed by the State agency in accordance with 
regulations issued by the Secretary after consultation with the 
Secretary of Agriculture;''.

SEC. 710. TRANSFER OF RESOURCES.

    Section 402(a)(7) of the Act is amended--
            (1) by adding ``and'' after subparagraph (C), and
            (2) by adding after and below subparagraph (C) the 
        following new subparagraph:
                    ``(D) shall determine ineligible for aid any family 
                member who knowingly transfers resources for the 
                purpose of qualifying or attempting to qualify for such 
                aid for such period, not in excess of one year from the 
                date of discovery of the transfer, determined in 
                accordance with regulations of the Secretary;''.

SEC. 711. LIMITATION ON UNDERPAYMENTS.

    Section 402(a)(22)(C) of the Act is amended by striking out ``an 
underpayment'' and inserting in lieu thereof ``an underpayment, the 
corrective payment shall be made regardless of whether the family is, 
at the time payment is made, receiving current payment of aid under the 
State plan but such payment shall not exceed the amount necessary to 
correct for the underpayment of aid during the twelve-month period 
immediately preceding the month in which the State agency first learned 
of the underpayment, and''.

SEC. 712. COLLECTION OF AFDC OVERPAYMENTS FROM FEDERAL TAX REFUNDS.

    (a) Authority to Intercept Tax Refund.--(1) Part A of title IV of 
the Act is amended by adding at the end thereof the following new 
section:

         ``collection of overpayments from federal tax refunds

    ``Sec. 418.(a). Upon receiving notice from a State agency 
administering a plan approved under this part that a named individual 
has been overpaid under the State plan approved under this part, the 
Secretary of the Treasury shall determine whether any amounts as 
refunds of Federal taxes paid are payable to such individual, 
regardless of whether such individual filed a tax return as a married 
or unmarried individual. If the Secretary of the Treasury finds that 
any such amount is payable, he shall withhold from such refunds an 
amount equal to the overpayment sought to be collected by the State and 
pay such amount to the State agency.
    ``(b) The Secretary of the Treasury shall issue regulations, 
approved by the Secretary of Health and Human Services, that provide--
            ``(1) that a State may only submit under subsection (a) 
        requests for collection of overpayments with respect to 
        individuals (A) who are no longer receiving aid under the State 
        plan approved under this part, (B) with respect to whom the 
        State has already taken appropriate action under State law 
        against the income or resources of the individuals or families 
        involved as required under section 402(a)(22) (B), and (C) to 
        whom the State agency has given notice of its intent to request 
        withholding by the Secretary of the Treasury from their income 
        tax refunds;
            ``(2) that the Secretary of the Treasury will give a timely 
        and appropriate notice to any other person filing a joint 
        return with the individual whose refund is subject to 
        withholding under subsection (a); and
            ``(3) the procedures that the State and the Secretary of 
        the Treasury will follow in carrying out this section which, to 
        the maximum extent feasible and consistent with the specific 
        provisions of this section, will be the same as those issued 
        pursuant to section 464(b) applicable to collection of past-due 
        child support.''.
    (2) Section 6402 of the Internal Revenue Code of 1986 (as 
previously amended by section 662 of this Act) is further amended--
            (A) in subsection (a), by striking ``(c) and (d)'' and 
        inserting ``(c), (d), and (e)'';
            (B) by redesignating subsections (e) through (i) as 
        subsections (f) through (j), respectively; and
            (C) by inserting after subsection (d) the following new 
        subsection:
    ``(g) Collection of Overpayments Under Title IV-A of Social 
Security Act.--The amount of any overpayment to be refunded to the 
person making the overpayment shall be reduced (after reductions 
pursuant to subsections (c) and (d), but before a credit against future 
liability for an internal revenue tax) in accordance with section 418 
of the Social Security Act (concerning recovery of overpayments to 
individuals under State plans approved under part A of title IV of such 
Act).''.
    (b) Conforming Amendment.--Section 552a(a)(8)(B)(iv)(III) of title 
5 of the United States Code is amended by striking out ``section 464 or 
1137 of the Social Security Act'' and inserting in lieu thereof 
``section 419, 464, or 1137 of the Social Security Act.''

SEC. 713. VERIFICATION OF STATUS OF CITIZENS AND ALIENS.

    (a) In General.--Section 1137(d) of the Act is amended by adding at 
the end thereof the following:
            ``(6) A State shall be deemed to meet the requirements of 
        paragraph (1) with respect to the eligibility of each member of 
        a family applying for aid under the State plan approved under 
        part A of title IV, if the State requires, as a condition for 
        such eligibility, a declaration in writing by an adult member 
        of the family, under penalty of perjury, that each family 
        member is a citizen of the United States or an alien eligible 
        for aid under such State plan (and, with respect to a child 
        born into a family receiving such aid, such declaration must be 
        made no later than the time of the next redetermination of such 
        family's eligibility following the birth of such child).''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
become effective upon enactment.

SEC. 714. REPEAL OF REQUIREMENT TO MAKE CERTAIN SUPPLEMENTAL PAYMENTS 
              IN STATES PAYING LESS THAN THEIR NEEDS STANDARDS.

    Section 402(a)(28) of the Act is repealed.

SEC. 715. CALCULATION OF 185 PERCENT OF NEED STANDARD.

    Section 402(a)(18) of the Act is amended by striking out ``without 
application of paragraph (8)(A)(viii),'' and inserting in lieu thereof 
``applying only the disregard provisions of paragraph (8)(A) that 
appear in clauses (v) (income from a program under the Job Training 
Partnership Act and similar programs), (viii) (payments related to the 
Earned Income Tax Credit), (ix) (certain lump-sum payments), (x) 
(educational assistance), (xi) (in-kind income), and (xii) (certain 
payments under the National and Community Service Act of 1990),''.

SEC. 716. TERRITORIES.

    (a) Section 1108(a) of the Act is amended by amending paragraphs 
(1), (2), and (3) to read as follows:
            ``(1) for payment to Puerto Rico shall not exceed--
                    ``(A) $82,000,000 with respect to fiscal years 
                1994, 1995, and 1996, and
                    ``(B) $102,500,000 or, if greater, such amount 
                adjusted by the CPI (as prescribed in subsection (f)) 
                for fiscal year 1997 and each fiscal year thereafter;
            ``(2) for payment to the Virgin Islands shall not exceed--
                    ``(A) $2,800,000 with respect to fiscal years 1994, 
                1995, and 1996, and
                    ``(B) $3,500,000 or, if greater, such amount 
                adjusted by the CPI (as prescribed in subsection (f)) 
                for fiscal year 1997 and each fiscal year thereafter; 
                and
            ``(3) for payment to Guam shall not exceed--
                    ``(A) $3,800,000 with respect to fiscal year 1994, 
                1995, and 1996, and
                    ``(B) $4,750,000 or, if greater, such amount 
                adjusted by the CPI (as prescribed in subsection (f)), 
                for fiscal year 1997 and each fiscal year 
                thereafter.''.
    (b) CPI Adjustment.--Section 1108 of the Act is amended by adding 
at the end thereof the following new subsection:
    ``(f) For purposes of subsection (a), an amount is `adjusted by the 
CPI' for months in calendar year by multiplying that amount by the 
ratio of the Consumer Price Index as prepared by the Department of 
Labor for--
            ``(1) the third quarter of the preceding calendar year, to
            ``(2) the third quarter of calendar year 1996, and rounding 
        the product, if not a multiple of $10,000, to the nearer 
        multiple of $10,000.''.

                   PART B--FOOD STAMP ACT AMENDMENTS

SEC. 721. INCONSEQUENTIAL INCOME.

    Section 5(d)(2) of the Food Stamp Act of 1977 (7 U.S.C. 2014(d)(2)) 
is amended to read as follows--
    ``(2) any inconsequential payments, as defined by the Secretary, 
received during the certification period, but not to exceed a total of 
such payments of $30 per household member in any quarter, whether the 
household's income is calculated on a prospective or retrospective 
basis,''.

SEC. 722. EDUCATIONAL ASSISTANCE.

    Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is amended 
by--
            (1) striking clause (3) of subsection (d) and inserting in 
        lieu thereof the following--
            ``(3) all educational assistance provided to a household 
        member,'';
            (2) in the proviso of clause (5) of subsection (d), 
        striking ``and no portion of any educational loan'' and all 
        that follows through ``provided for living expenses,''; and
            (3) striking clause (3) of subsection (k).

SEC. 723. EARNINGS OF STUDENTS.

    Effective on and after September 1, 1994, section 5(d)(7) of the 
Food Stamp Act of 1977 (7 U.S.C. 2014(d)(7)) is amended by--
            (1) striking ``a child who is a member of the household, 
        who is''; and
            (2) striking ``, and who is 21'' and inserting in lieu 
        thereof ``who is 18''.

SEC. 724. TRAINING STIPENDS AND ALLOWANCES; INCOME FROM ON-THE-JOB 
              TRAINING PROGRAMS.

    Section 5 of the Food Stamp Act of 1977 (7 U.S.C. 2014) is amended 
by--
            (1) striking ``and (16)'' in subsection (d) and inserting 
        in lieu thereof ``(16)'';
            (2) inserting before the period at the end of subsection 
        (d) ``, and (17) any amount received by any member of a 
        household as a stipend or allowance under the Job training 
        Partnership Act (29 U.S.C. 1501 et seq.) or under any other 
        training or similar program''; and
            (3) striking in subsection (1) the language beginning with 
        ``under section 204(b)(1)(C)'' and all that follows through 
        ``19 years of age.'' and inserting in lieu thereof ``shall be 
        considered earned income for purposes of the Food Stamp 
        program.''.

SEC. 725. EARNED INCOME TAX CREDITS.

    Effective on and after September 1, 1994, the second sentence of 
section (5)(g)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(3)) 
is amended by--
            (1) inserting ``Federal or State lump-sum'' immediately 
        preceding ``earned income tax credits''; and
            (2) striking the language beginning with ``if such member 
        was participating'' and all that follows through ``the 12-month 
        period''.

SEC. 726. RESOURCES NECESSARY FOR SELF-EMPLOYMENT.

    Section 5(g)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(3)) 
is amended by adding the following new third and fourth sentences: 
``The Secretary shall also exclude from financial resources loans 
obtained for the purposes of starting or operating a business. The 
Secretary may exclude from financial resources liquid or nonliquid 
resources that are or will be used for the self-employment of any 
member of a household to the extent and under the circumstances allowed 
in regulations issued by the Secretary after consultation with and the 
Secretary of Health and Human Services.''.

SEC. 727. LUMP-SUM PAYMENTS FOR MEDICAL EXPENSES OR REPLACEMENT OF LOST 
              RESOURCES.

    Section 5(g)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(3)) 
as amended by this Act is further amended by adding the following new 
fifth sentence: ``The Secretary shall also exclude from financial 
resources, for a period of one year from their receipt, amounts that 
have been paid as reimbursements (or payment in advance) for medical 
expenses or for the cost of repairing or replacing resources of the 
family.''.

SEC. 728. INDIVIDUAL DEVELOPMENT ACCOUNTS.

    Section 5(g)(3) of the Food Stamp Act of 1977 (7 U.S.C. 2014(g)(3)) 
as amended by this Act is further amended by adding the following new 
sixth and seventh sentences: ``The Secretary shall also exclude from 
financial resources amounts, not to exceed $10,000 (including interest) 
in total, in one or more Individual Development Accounts established in 
accordance with (A) section 529 of the Internal Revenue Code of 1986 
(26 U.S.C. 1 et seq.) by any member of a household applying for or 
receiving assistance under this Act or (B) a demonstration project 
conducted under the Individual Development Account Demonstration Act of 
1994, but only such amounts (including interest) that were credited to 
such account in a month for which assistance was provided under this 
Act or aid to families with dependent children was provided pursuant to 
part A of title IV of the Social Security Act, with respect to such 
individual, or in any month after such a month. The Secretary shall 
also exclude from financial resources, for the month of its receipt and 
the following month, a nonrecurring lump-sum payment received by any 
household member if the household member represents that the payment 
will be deposited in an Individual Development Account established as 
described in the preceding sentence.''.

SEC. 729. CONFORMING AMENDMENT.

    Section 5(d)(8) of the Food Stamp Act of 1977 (7 U.S.C 2014(d)(8)) 
is amended in the proviso by inserting ``paragraph (3) of subsection 
(g) of this section or'' immediately preceding ``other laws''.

                     PART C--ECONOMIC INDEPENDENCE

SEC. 731. SHORT TITLE.

    This title may be cited as the ``Individual Development Account 
Demonstration Act of 1994''.

SEC. 732. DECLARATION OF POLICY AND STATEMENT OF PURPOSE.

    (a) Declaration of Policy.--It is the policy of the United States--
            (1) to eliminate barriers that prevent recipients of Aid to 
        Families with Dependent Children (AFDC) from becoming self-
        sufficient through self-employment and asset accumulation;
            (2) to identify and implement cost-effective strategies to 
        encourage saving and entrepreneurship among the broadest 
        possible range of low-income families, particularly families 
        eligible for AFDC, and that have the potential to reduce 
        Federal spending on transfers and services to the 
        disadvantaged;
            (3) to enhance private-sector opportunities for low-income 
        families by enabling them to use their own human and financial 
        resources through expansion of business investment, job 
        creation, home ownership, and human capital investment; and
            (4) to expand the capacity of local organizations to 
        provide asset-related services that help people to help 
        themselves such as savings mechanisms, loan funds, technical 
        assistance, and entrepreneurial training.
    (b) Statement of Purpose.--The purpose of the demonstration 
projects authorized under this title is to provide for a means of 
determining--
            (1) the social, psychological, and economic effects of 
        providing low-income individuals the opportunity to accumulate 
        assets and develop and utilize entrepreneurial skills; and
            (2) the extent to which an asset-based assistance policy 
        may be used to enable individuals with low-income to achieve 
        economic self-sufficiency.

SEC. 733. INDIVIDUAL DEVELOPMENT ACCOUNT DEMONSTRATION PROJECTS.

    (a) In General.--Not later than one year after the date of 
enactment of this Act, any State or local government, or any qualified 
organization may apply to the Administrator/Chairperson of the 
Community Development Bank and Financial Institutions Fund (hereinafter 
the Administrator/Chairperson) for a grant to conduct individual 
development account demonstration projects for eligible persons.
    (b) Contents.--Each application shall--
            (1) describe the demonstration project;
            (2) describe the persons who will participate in the 
        project;
            (3) demonstrate the ability of the applicant--
                    (A) to assist project participants in achieving 
                economic self-sufficiency through the project; and
                    (B) to assist project participants in developing 
                greater knowledge about savings, investments, and other 
                financial matters;
                    (C) to oversee the use of grant funds, including 
                the documentation and verification of start-up expenses 
                in the case of entrepreneurial assistance; and
                    (D) to effectively administer the project;
            (4) in the case of a qualified organization, document a 
        commitment by the State in which the project is to be conducted 
        to provide a specified amount of funds to the qualified 
        organization for the project, and any similar commitment made 
        to the qualified organization by any other non-Federal public 
        entity or any private entity;
            (5) contain a plan for maintaining data and other 
        information concerning assistance provided to project 
        participants sufficient to evaluate the project and a 
        certification that the applicant will fully cooperate and 
        provide access to all information concerning the project in 
        connection with any evaluation of the project conducted 
        pursuant to subsection (1); and
            (6) contain such other information as the Administrator/
        Chair may prescribe.
    (c) Criteria.--In considering whether to approve an application, 
the Administrator/Chairperson shall assess the following:
            (1) The degree to which the project described in the 
        application is likely to aid project participants in achieving 
        economic self-sufficiency through activities requiring 
        qualified expenses. In making such assessment, the 
        Administrator/Chairperson shall consider the overall quality of 
        project activities and shall not consider any particular kind 
        or combination of such qualified expenses to be an essential 
        feature of any project.
            (2) The ability of the applicant to responsibly administer 
        the project.
            (3) The amount of funds from non-Federal sources that are 
        committed to the project.
            (4) The adequacy of the plan for maintaining information 
        necessary to evaluate the project.
    (d) Approval.--
            (1) The Administrator/Chairperson shall, on a competitive 
        basis, approve such applications to conduct demonstration 
        projects under this section as the Administrator/Chairperson 
        deems appropriate on the basis of the criteria described in 
        subsection (c).
            (2) No court shall have jurisdiction to review the approval 
        or nonapproval of any application by the Administrator/
        Chairperson.
    (e) Demonstration Authority; Annual Grants.--
            (1) Demonstration authority.--The approval by the 
        Administrator of an application shall authorize the applicant 
        (hereinafter the grantee) to conduct the project for five 
        project years in accordance with the approved application and 
        the requirements of this section.
            (2) Annual grants.--The Administrator/Chairperson shall 
        make a grant to each grantee on the first day of each project 
        year.
    (f) Reserve Fund.--
            (1) Establishment.--Each grantee shall establish a reserve 
        fund that shall be used in accordance with this subsection.
            (2) Deposits.--
                    (A) As soon after receipt as is practicable, a 
                grantee shall deposit into the reserve fund--
                            (i) all annual grants made by the 
                        Administrator/Chairperson;
                            (ii) all funds provided to the grantee by 
                        any non-Federal public or private entity to 
                        conduct the demonstration project;
                            (iii) all proceeds from any investments 
                        made pursuant to paragraph (4); and
                            (iv) all amounts title to which vests in 
                        the grantee pursuant to subsection (h)(5).
            (3) Expenditures.--A grantee shall use amounts in the 
        reserve fund only--
                    (A) to assist project participants in obtaining the 
                skills and information necessary to achieve economic 
                self-sufficiency through activities requiring the 
                payment of qualified expenses;
                    (B) to provide financial assistance in accordance 
                with subsection (h) to project participants;
                    (C) to administer the project; and
                    (D) to maintain and provide information necessary 
                for the evaluation of the project pursuant to 
                subsection (1).
            (4) Accounting standards.--The Administrator/Chairperson 
        shall prescribe regulations governing the accounting of amounts 
        deposited in and withdrawn from reserve funds.
            (5) Termination of project.--Notwithstanding paragraph (3), 
        upon the termination of any demonstration project approved 
        under this section, remaining amounts in the reserve fund 
        established with respect to such project and remaining 
        investments made from amounts in the reserve fund shall be 
        distributed to the Administrator/Chairperson and each non-
        Federal public or private entity that contributed to the 
        project in proportion to their contributions.
    (g) Selection of Eligible Persons To Receive Assistance.--A grantee 
shall provide individual development account assistance to eligible 
persons whom the grantee deems to be best situated to benefit from such 
assistance, taking into account the amount of grants made by the 
Administrator/Chairperson and other funds available to the grantee for 
such assistance.
    (h) Financial Assistance for Individual Development Accounts.--
            (1) In general.--A grantee shall provide initial financial 
        assistance to a project participant who establishes an 
        individual development account, not to exceed $500 per 
        participant. Such financial assistance shall be deposited in 
        the individual development account established by a project 
        participant.
            (2) Matching contributions.--The Administrator/Chairperson 
        or a grantee may make matching contributions of not less than 
        50 cents and not more than $4 for every $1 deposited into an 
        individual development account by a project participant, not to 
        exceed $2,500 for any project participant.
            (3) Limitation on use.--
                    (A) Financial assistance provided pursuant to 
                paragraph (1) shall not be available for use by a 
                project participant until--
                            (i) the individual development account is 
                        closed; and
                            (ii) a project participant has deposited 
                        into the individual development account an 
                        amount equal to the initial financial 
                        assistance provided pursuant to paragraph (1).
                    (B) Financial assistance provided pursuant to 
                paragraph (1) or (2) shall be used by a project 
                participant only for the payment of qualified expenses.
            (4) Applicability of other law.--The provisions of section 
        529 of the Internal Revenue Code of 1986 (26 U.S.C. 529) and 
        such rules, regulations and procedures as may be prescribed by 
        the Secretary of the Treasury under such Code shall apply to an 
        individual development account for which financial assistance 
        is provided pursuant to this subsection.
            (5) Effect of prohibited transactions.--In the event that 
        an individual development account ceases to be an individual 
        development account under the provisions of section 529(e)(2) 
        of the Internal Revenue Code of 1986 (26 U.S.C. 529(e)(2)), or 
        any portion of an individual development account is treated as 
        distributed under the provisions of section 529(e)(3) of the 
        Internal Revenue Code of 1986 (26 U.S.C. 529(e)(3)), title to 
        all amounts in such an account, or such portion of an account, 
        attributable to financial assistance provided pursuant to 
        paragraph (1) or (2) shall vest in the grantee providing 
        financial assistance pursuant to paragraph (1) and such amounts 
        shall be paid to such grantee.
    (i) Local Control Over Demonstration.--
            (1) Each grantee shall, subject to the provisions of 
        subsection (k), have sole responsibility for the administration 
        of demonstration projects approved by the Administrator/
        Chairperson.
            (2) The Administrator/Chairperson may prescribe such 
        regulations as may be necessary to ensure that grantees comply 
        with the terms of approved applications and the requirements of 
        this section.
    (j) Annual Reports.--
            (1) In general.--Each grantee shall annually report to the 
        Administrator/Chairperson concerning the progress of each 
        approved demonstration project administered by such grantee. 
        The report shall, at a minimum--
                    (A) describe project participants;
                    (B) contain an audited financial statement for the 
                reserve fund established with respect to the project;
                    (C) provide information on amounts deposited in 
                individual development accounts of project participants 
                to whom such assistance is provided under the project; 
                and
                    (D) such other information as the Administrator/
                Chairperson may require with respect to the evaluation 
                of the project pursuant to subsection (1).
            (2) Submission.--Reports required by paragraph (1) shall be 
        submitted annually not later than the anniversary of the date 
        the Administrator/Chairperson approved the application for the 
        demonstration project.
            (3) Coordination with state government.--A grantee shall 
        transmit a copy of each report required by paragraph (1) to the 
        Treasurer (or equivalent official) of the State in which the 
        project is conducted at the time prescribed by paragraph (2).
    (k) Sanctions.--
            (1) Revocation of demonstration authority.--If the 
        Administrator/Chairperson determines a grantee is not 
        conducting a demonstration project in accordance with the 
        approved application and the requirements of this section, and 
        has failed to undertake corrective action satisfactory to the 
        Administrator/Chairperson, the Administrator/Chairperson may 
        revoke the approval to conduct the project. A determination by 
        the Administrator/Chairperson to revoke the approval for a 
        demonstration project shall not be subject to review by any 
        court.
            (2) Actions required upon revocation.--
                    (A) If the Administrator/Chairperson revokes 
                approval to conduct a demonstration project pursuant to 
                paragraph (1), the Administrator/Chairperson--
                            (i) shall suspend the project;
                            (ii) shall take control of the reserve fund 
                        established pursuant to subsection (f) with 
                        respect to such project; and
                            (iii) shall solicit applications from 
                        entities described in subsection (a) to conduct 
                        the suspended project in accordance with the 
                        approved application (or under such terms and 
                        conditions as the Administrator may prescribe) 
                        and the requirements of this section.
                    (B) If the Administrator/Chairperson approves an 
                application to conduct the suspended project, the 
                Administrator/Chairperson shall transfer to the new 
                grantee control of the reserve fund established 
                pursuant to subsection (f) for the project, and such 
                grantee shall be considered to be the original grantee 
                for purposes of this section. The date the 
                Administrator/Chairperson approved the application of 
                the new grantee to conduct the suspended project shall 
                apply for purposes of the annual reports required by 
                subsection (j).
                    (C) If the Administrator/Chairperson has not 
                approved an application to conduct a project by the 
                date that is one year after approval to conduct the 
                project was revoked, the Administrator/Chairperson 
                shall--
                            (i) terminate the project; and
                            (ii) distribute remaining amounts in the 
                        reserve fund for such project and investments 
                        made from amounts in the reserve fund in 
                        accordance with the provisions of subsection 
                        (f)(6).
    (l) Project Evaluations.--
            (1) In general.--Not later than six months after the date 
        of enactment of this Act, the Administrator/Chairperson, in 
        consultation with the Secretary of the Treasury and the 
        Secretary of the Department of Health and Human Services, shall 
        enter into a contract with an independent organization 
        (hereinafter ``evaluator'') for the evaluation of individual 
        demonstration projects conducted pursuant to this section and 
        the effectiveness of assistance provided to eligible persons 
        pursuant to this section.
            (2) Evaluations.--In entering into the contract provided 
        for in paragraph (1), the Administrator/Chairperson should 
        consider providing for evaluation of--
                    (A) the types of information and public education 
                efforts that attract project participants;
                    (B) the accessibility of the demonstration project 
                by participants and the ease of participation;
                    (C) the level of financial assistance required to 
                stimulate participation in the demonstration project, 
                and whether such level varies among different 
                demographic populations;
                    (D) whether project features utilized in 
                conjunction with individual development accounts (such 
                as peer support, structured planning exercises, 
                mentoring, and case management) contribute to 
                participation in the project;
                    (E) the level of self-sufficiency achieved by 
                project participants as measured by employment or self-
                employment rates, earned and investment income, exit 
                rates, poverty rates, and recidivism rates, 
                particularly for program participants eligible for food 
                stamp benefits and AFDC;
                    (F) the reduction in the level of public 
                expenditure on project participants as measured by 
                changes in overall support payments including AFDC, 
                food stamp benefits, Federal child care assistance, 
                Federal housing assistance, JOBS, and other benefits, 
                taking into account costs incurred by the Federal 
                Government in support of demonstration projects;
                    (G) the level of asset accumulation by project 
                participants as measured by savings rates, net worth, 
                business start-ups, human capital investments, new 
                homes, number of loans to low-income and AFDC eligible 
                families, and whether asset accumulation continued 
                after a subsidy or other assistance;
                    (H) the economic, psychological, and social effects 
                of asset accumulation; and
                    (I) the circumstances concerning and the extent to 
                which asset accumulation by project participants 
                contributes to--
                            (i) a greater sense of security and control 
                        and positive outlook;
                            (ii) greater household stability;
                            (iii) increased long-term planning;
                            (iv) increased efforts to maintain and 
                        develop assets;
                            (v) greater knowledge about savings, 
                        investments, and other financial matters;
                            (vi) increased effort and success in 
                        educational achievement within the household;
                            (vii) increased specialization in career 
                        development;
                            (viii) improved social status;
                            (ix) increased political participation;
                            (x) increased community involvement;
                            (xi) increased earned income;
                            (xii) decreased reliance on traditional 
                        forms of public assistance, with particular 
                        emphasis on food stamp benefits and AFDC; and
                            (xiii) increased tendency to save during 
                        and after the period of project participation.
            (3) Methodological requirement.--In evaluating any 
        demonstration project conducted under this section, the 
        evaluator should obtain such quantitative data before, during, 
        and after the project, as is necessary to evaluate the project 
        and include randomly assigned control groups.
    (m) Definitions.--As used in this section:
            (1) Household.--The term ``household'' means all 
        individuals who share use of a dwelling unit as primary 
        quarters for living and eating separately from other 
        individuals in the living quarters.
            (2) Net worth.--
                    (A) In general.--Except as provided in subparagraph 
                (B), the term ``net worth'' means, with respect to a 
                household, the aggregate fair market value of all 
                assets that are owned in whole or in part by any member 
                of the household, less the obligations or debts of any 
                member of the household.
                    (B) Assets excluded.--Net worth shall be determined 
                without taking into account the fair market value and 
                the obligations or debts of--
                            (i) the primary dwelling unit of the 
                        household;
                            (ii) the motor vehicle having the greatest 
                        equity value; and
                            (iii) items essential for daily living, 
                        such as clothes, furniture, and similar items 
                        of limited value.
            (3) Individual development account.--The term ``individual 
        development account'' shall have the same meaning given such 
        term in section 529 of the Internal Revenue Code of 1986 (26 
        U.S.C. 529).
            (4) Project year.--The term ``project year'' means with 
        respect to a demonstration project, any of the six consecutive 
        12-month periods beginning on the date the project is approved 
        by the Administrator.
            (5) Qualified organization.--The term ``qualified 
        organization'' means a community development financial 
        institution as defined in section of the Community Development 
        Banking and Financial Institutions Act of 1994.
            (6) Eligible person defined.--The term ``eligible person'' 
        means any person who is a member of a household that meets all 
        of the following requirements:
                    (A) EITC test.--The household has at least one 
                individual who is an eligible individual within the 
                meaning of section 32(c)(1) of the Internal Revenue 
                Code of 1986 for purposes of the earned income tax 
                credit.
                    (B) Income test.--The household did not have 
                adjusted gross income (as determined pursuant to the 
                Internal Revenue Code of 1986) in the immediately 
                preceding calendar year in excess of $18,000.
                    (C) Net worth test.--The net worth of the 
                household, as of the close of the immediately preceding 
                calendar year, did not exceed $20,000.
            (7) Qualified expenses.--The term ``qualified expenses'' 
        shall have the same meaning as provided in section 529(c)(1) of 
        the Internal Revenue Code of 1986 (26 U.S.C. 529(C)(1)).
    (n) Authorization of Appropriations.--To carry out the purposes of 
this section there are authorized to be appropriated to the 
Administrator/Chairperson--
            (1) $10,000,000 for fiscal year 1997,
            (2) $20,000,000 for each of fiscal years 1998, 1999, 2000, 
        and 2001, and
            (3) $10,000,000 for fiscal year 2002.

SEC. 734. INDIVIDUAL DEVELOPMENT ACCOUNTS.

    (a) In General.--Subchapter F of chapter 1 of the Internal Revenue 
Code of 1986 (relating to additional itemized deductions for 
individuals) is amended by adding at the end of the following new part:

              ``Part VIII--Individual Development Accounts

``SEC. 529. INDIVIDUAL DEVELOPMENT ACCOUNTS.

    ``(a) Establishment of Accounts.--
            ``(1) In general.--An individual development account may be 
        established by or on behalf of an eligible individual for the 
        purpose of accumulating funds to pay the qualified expenses of 
        such individual.
            ``(2) Eligible individual.--The term `eligible individual' 
        means an individual--
                    ``(A) for whom assistance is provided under section 
                733(h) of the Individual Development Account 
                Demonstration Act;
                    ``(B) receiving assistance under 42 U.S.C. 601 et 
                seq.; or
                    ``(C) receiving assistance under 7 U.S.C. 2011 et 
                seq.
    ``(b) Limitations.--
            ``(1) Account to benefit one individual.--An individual 
        development account may not be established for the benefit of 
        more than one individual.
            ``(2) Multiple accounts.--If, at any time during a calendar 
        year, two or more individual development accounts are 
        maintained for the benefit of an eligible individual, such 
        individual shall be treated as an eligible individual for such 
        year only with respect to the account first established.
            ``(3) Who may contribute.--Contributions to an individual 
        development account, other than contributions made pursuant to 
        section 733(h) of the Individual Development Account 
        Demonstration Act, may be made only by an eligible individual 
        and in the case of an eligible individual described in 
        subsection (e)(2)(A), by another eligible individual who is a 
        member of the same household as the eligible individual.
            ``(4) Annual limit.--Contributions to an individual 
        development account by or on behalf of an eligible individual 
        for any taxable year shall not exceed the lesser of $1,000 or 
        100 percent of the earned income, within the meaning of section 
        32(c)(2), of the eligible individual making such contribution. 
        No contribution to the account under section 733(h) of the 
        Individual Development Account Demonstration Act shall be taken 
        into account for the purposes of this limitation. No 
        contribution may be made to an individual development account 
        by or on behalf of any individual after such individual has 
        ceased to be an eligible individual.
            ``(5) Limit on total contributions.--Total contributions to 
        an individual development account for all years may not exceed 
        $10,000.
    ``(c) Definitions and Special Rules.--For the purposes of this 
section--
            ``(1) Qualified expenses.--In the case of an eligible 
        individual described in subsection (a)(2)(A), the term 
        `qualified expenses' means one or more of the expenses 
        described in subparagraphs (A), (B), (C), and (D), as provided 
        by the entity providing assistance to the eligible individual 
        under section 733(h) of the Individual Development Account 
        Demonstration Act. In the case of any other eligible 
        individual, the term `qualified expenses' means one or more of 
        the expenses described in subparagraphs (A), (B), (C), and (D).
                    ``(A) Post-secondary education expenses.--Post-
                secondary educational expenses paid from an individual 
                development account directly to an eligible educational 
                institution. For the purposes of this subparagraph--
                            ``(i) the term `post-secondary educational 
                        expenses' means--
                                    ``(I) tuition and fees required for 
                                the enrollment or attendance of a 
                                student at an eligible educational 
                                institution;
                                    ``(II) fees, books, supplies, and 
                                equipment required for courses of 
                                instruction at an eligible educational 
                                institution; and
                                    ``(III) a reasonable allowance for 
                                meals, lodging, transportation, and 
                                child care, while attending an eligible 
                                educational institution; and
                            ``(ii) the term `eligible educational 
                        institution' means--
                                    ``(I) an institution described in 
                                section 481(a)(1) or 1201(a) of the 
                                Higher Education Act of 1965 (20 U.S.C. 
                                1088(a)(1) or 1141(a)), as such 
                                sections are in effect on the date of 
                                the enactment of this section; and
                                    ``(II) an area vocational education 
                                school (as defined in subparagraph (C) 
                                or (D) of section 521(4) of the Carl D. 
                                Perkins Vocational and Applied 
                                Technology Education Act Amendments of 
                                1990 (20 U.S.C. 2471(4))) in any State 
                                (as defined in section 521(33) of such 
                                Act), as such section is in effect on 
                                the date of the enactment of this 
                                section.
                    ``(B) First-home purchase.--Qualified acquisition 
                costs with respect to a qualified principal residence 
                for a qualified first-time homebuyer, if paid from an 
                individual development account directly to the persons 
                to whom the amounts are due. For purposes of this 
                subparagraph--
                            ``(i) the term `qualified acquisition 
                        costs' means the costs of acquiring, 
                        constructing, or reconstructing a residence, 
                        and includes any usual or reasonable 
                        settlement, financing, or other closing costs;
                            ``(ii) the term `qualified principal 
                        residence' means a principal residence (within 
                        the meaning of section 1034), the qualified 
                        acquisition costs of which do not exceed 80 
                        percent of the average area purchase price 
                        applicable to such residence (determined in 
                        accordance with paragraphs (2) and (3) of 
                        section 143(e));
                            ``(iii) the term `qualified first-time 
                        home-buyer' means a taxpayer (and, if married, 
                        the taxpayer's spouse) who has no present 
                        ownership interest in a principal residence 
                        during the three-year period ending on the date 
                        on which a binding contract was entered into to 
                        acquire, construct, or reconstruct the 
                        principal residence to which this subparagraph 
                        applies.
                    ``(C) Business capitalization.--Amounts paid from 
                an individual development account directly into a 
                business capitalization account which is established in 
                a federally insured financial institution and is 
                restricted to use solely for qualified business 
                capitalization expenses. For purposes of this 
                subparagraph--
                            ``(i) the term `qualified business 
                        capitalization expenses' means qualified 
                        expenditures for the capitalization of a 
                        qualified business pursuant to a qualified 
                        plan;
                            ``(ii) the term `qualified expenditures' 
                        means expenditures included in a qualified 
                        plan, including capital, plant, equipment, 
                        working capital, and inventory expenses;
                            ``(iii) the term `qualified business' means 
                        any business that does not contravene any law 
                        or public policy (as determined by the 
                        Administrator of the Community Development Bank 
                        and Financial Institutions Fund);
                            ``(iv) the term `qualified plan' means a 
                        business plan
                                    ``(I) that is approved by a 
                                financial institution, or any other 
                                institution designated as a community 
                                development financial institution, 
                                having demonstrated fiduciary 
                                integrity;
                                    ``(II) that includes a description 
                                of services or goods to be sold, a 
                                marketing plan, and projected financial 
                                statements; and
                                    ``(III) that may require the 
                                eligible individual to obtain 
                                assistance of an experienced 
                                entrepreneurial advisor.
                    ``(D) Transfers to idas of family members.--Amounts 
                in an individual development account may be paid or 
                transferred directly into another such account 
                established for the benefit of an eligible individual 
                who is--
                            ``(i) the taxpayer's spouse; or
                            ``(ii) any dependent of the taxpayer with 
                        respect to whom the taxpayer is allowed a 
                        deduction under section 151.
            ``(2) Individual development account.--The term `individual 
        development account' means a trust created or organized in the 
        United States exclusively for the purpose of paying the 
        qualified expenses of an individual who was an eligible 
        individual at the time when contributions were made to such 
        trust, but only if the written instrument creating the trust 
        meets the following requirements:
                    ``(A) No contribution will be accepted unless it is 
                in cash or check.
                    ``(B) The trustee is a financial institution 
                insured by an instrumentality of the Federal 
                Government.
                    ``(C) The assets of the account will be invested 
                only in federally insured deposits and/or stock of a 
                regulated investment company within the meaning of 
                section 851(a), in accordance with the direction of the 
                eligible individual.
                    ``(D) The assets of the trust will not be 
                commingled with other property except in a common trust 
                fund or common investment fund.
                    ``(E) Except as provided in subparagraph (F), any 
                amount in the account which is attributable to 
                assistance provided under section 733(h) of the 
                Individual Development Account Demonstration Act may be 
                paid or distributed out of the account only for the 
                purpose of paying the qualified expenses of the 
                eligible individual.
                    ``(F)(i) Any balance in the account on the day 
                after the date on which the individual for whose 
                benefit the trust is established dies will be 
                transferred within 60 days of such date as directed by 
                such individual to another individual development 
                account established for the benefit of an individual 
                who is a family member described in subsection 
                (c)(1)(D) and who is an eligible individual, or who was 
                an eligible individual on the day immediately preceding 
                the date on which the individual for whose benefit the 
                trust is established dies.
                    ``(ii) In any case where clause (i) does not apply, 
                the portion of the account attributable to 
                contributions other than those provided under section 
                733(h) of the Individual Development Account 
                Demonstration Act shall be paid out within five years 
                of the date of death to the beneficiaries of the 
                individual for whose benefit the account was 
                established, and the balance shall vest in the grantee 
                providing assistance under section 733(h) of the 
                Individual Development Account Demonstration Act and 
                shall be paid to such grantee within 60 days of the day 
                after the date of death.
            ``(3) Time when contributions deemed made.--A taxpayer 
        shall be deemed to have made a contribution to an individual 
        development account on the last day of the preceding taxable 
        year if the contribution is made on account of such taxable 
        year and is made not later than the time prescribed by law for 
        filing the return for such taxable year (not including 
        extensions thereof).
    ``(d) Tax Treatment of Distributions.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, any amount paid or distributed out of an individual 
        development account shall be included in gross income of the 
        payee or distributee for the taxable year in the manner 
        provided in section 72.
            ``(2) Treatment of assistance contributions.--
                    ``(A) Distributions used to pay qualified 
                expenses.--If a distribution or payment from an 
                individual development account is used exclusively to 
                pay the qualified expenses incurred by the individual 
                for whose benefit the account is established, then, for 
                purposes of section 72, assistance contributions made 
                to such individual development account under section 
                733(h) of the Individual Development Account 
                Demonstration Act shall be treated in the same manner 
                as contributions made by the individual.
                    ``(B) Distributions not used to pay qualified 
                expenses.--If a distribution or payment from an 
                individual development account is not used exclusively 
                to pay the qualified expenses incurred by the 
                individual for whose benefit the account is 
                established, then, for purposes of section 72, 
                assistance contributions made to such individual 
                development account under section 733(h) of the 
                Individual Development Account Demonstration Act shall 
                be treated in the same manner as earnings on the 
                account.
    ``(e) Tax Treatment of Accounts.--
            ``(1) Exemption from tax.--An individual development 
        account is exempt from taxation under this subtitle unless such 
        account has ceased to be an individual development account by 
        reason of paragraph (2). Notwithstanding the preceding 
        sentence, any such account is subject to the taxes imposed by 
        section 511 (relating to imposition of tax on unrelated 
        business income of charitable, etc. organizations).
            ``(2) Loss of exemption of account where individual engages 
        in prohibited transaction.--
                    ``(A) In general.--If the individual for whose 
                benefit an individual development account is 
                established or any individual who contributes to such 
                account engages in any transaction prohibited by 
                section 4975 with respect to the account, the account 
                shall cease to be an individual development account as 
                of the first day of the taxable year (of the individual 
                so engaging in such transaction) during which such 
                transaction occurs.
                    ``(B) Account treated as distributing all its 
                assets.--In any case in which any account ceases to be 
                an individual development account by reason of 
                subparagraph (A) as of the first day of any taxable 
                year--
                            ``(i) all assets in the account on such 
                        first day that are attributable to assistance 
                        provided under section 733(h)(1) and (2) of the 
                        Individual Development Account Demonstration 
                        Act shall be paid as provided in section 
                        733(h)(5) of such Act; and
                            ``(ii) the provisions of subsection (d)(1) 
                        shall apply as if there was a distribution on 
                        such first day in an amount equal to the fair 
                        market value of all other assets in the account 
                        on such first day.
            ``(3) Effect of pledging account as security.--If, during 
        any taxable year, the individual for whose benefit an 
        individual development account is established, or any 
        individual who contributes to such account, uses the account or 
        any portion thereof as security for a loan--
                    ``(A) an amount equal to the part of the portion so 
                used which is attributable to assistance provided under 
                section 733(h)(1) and (2) of the Individual Account 
                Demonstration Act shall be paid as provided in section 
                733(h)(5) of such Act; and
                    ``(B) the remaining part of the portion so used 
                shall be treated as distributed under the provisions of 
                subsection (d)(1) to the individual so using such 
                portion.
    ``(f) Additional Tax on Certain Amounts Included in Gross Income.--
            ``(1) Distribution not used for qualified expenses.--In the 
        case of any payment or distribution that is not used 
        exclusively to pay qualified expenses incurred by the eligible 
        individual for whose benefit the account is established, the 
        tax liability of each payee or distributee under this chapter 
        for the taxable year in which the payment or distribution is 
        received shall be increased by an amount equal to 10 percent of 
        the amount of the distribution that is included in the gross 
        income of such payee or distributee for such taxable year.
            ``(2) Disqualification cases.--If any amount includible in 
        the gross income of an individual for a taxable year because 
        such amount is required to be treated as a distribution under 
        paragraph (2) or (3) of subsection (e), the tax liability of 
        such individual under this chapter for such taxable year shall 
        be increased by an amount equal to 10 percent of such amount 
        required to be treated as a distribution and included in the 
        gross income of such individual.
            ``(3) Disability or death cases.--Paragraphs (1) and (2) 
        shall not apply if the payment or distribution is made after 
        the individual for whose benefit the individual development 
        account becomes disabled within the meaning of section 72(m)(7) 
        or dies.
    ``(g) Community Property Laws.--This section shall be applied 
without regard to any community property laws.
    ``(h) Custodial Accounts.--For purposes of this section, a 
custodial account shall be treated as a trust if the assets of such 
account are held by a bank (as defined in section 408(n)) or another 
person who demonstrates, to the satisfaction of the Administrator of 
the Community Development Bank and Financial Institutions Fund, that 
the manner in which he will administer the account will be consistent 
with the requirements of this section, and if the custodial account 
would, except for the fact that it is not a trust, constitute an 
individual development account described in subsection (c)(2). For 
purposes of this title, in the case of a custodial account treated as a 
trust by reason of the preceding sentence, the custodian of such 
account shall be treated as the trustee thereof.
    ``(i) Reports.--
            ``(1) The trustee of an individual development account 
        established by or on behalf of an eligible individual described 
        in subsection (a)(2)(A) shall--
                    ``(A) prepare reports regarding the account with 
                respect to contributions, distributions, and any other 
                matter required by the Administrator of the Community 
                Development Bank and Financial Institutions Fund under 
                regulations; and
                    ``(B) submit such reports, at the time and in the 
                manner prescribed by the Administrator of the Community 
                Development Bank and Financial Institutions Fund in 
                regulations to--
                            ``(i) the individual for whose benefit the 
                        account is maintained;
                            ``(ii) the organization providing 
                        assistance to the individual under section 
                        733(h) of the Individual Development Account 
                        Demonstration Act; and
                            ``(iii) the Administrator of the Community 
                        Development Bank and Financial Institutions 
                        Fund.
            ``(2) The trustee of any individual development account 
        shall make such reports regarding such account to the Secretary 
        and to the individual for whom the account is, or is to be, 
        maintained with respect to contributions (and the years to 
        which they relate), distributions, and such other matters as 
        the Secretary may require under forms or regulations. The 
        reports required by this subsection--
                    ``(A) shall be filed at such time and in such 
                manner as the Secretary prescribes in such forms or 
                regulations, and
                    ``(B) shall be furnished to individuals--
                            ``(i) not later than January 31 of the 
                        calendar year following the calendar year to 
                        which such reports relate, and
                            ``(ii) in such manner as the Secretary 
                        prescribes in such forms or regulations.''.
    (b) Contribution Not Subject to the Gift Tax.--Section 2503 of the 
Internal Revenue Code of 1986 (26 U.S.C. 2503) (relating to taxable 
gifts) is amended by adding at the end thereof the following new 
subsection:
    ``(h) Individual Development Accounts.--Any contribution made by an 
individual to an individual development account described in section 
529(c)(2) shall not be treated as a transfer of property by gift for 
purposes of this chapter.''.
    (c) Tax on Prohibited Transactions.--Section 4975 of the Internal 
Revenue Code of 1986 (26 U.S.C. 4975) (relating to prohibited 
transactions) is amended--
            (1) by adding at the end of subsection (c) the following 
        new paragraph:
            ``(4) Special rule for individual development accounts.--An 
        individual for whose benefit an individual development account 
        is established and any contributor to such account shall be 
        exempt from tax imposed by this section with respect to any 
        transaction concerning such account (which would otherwise be 
        taxable under this section) if, with respect to such 
        transaction, the account ceases to be an individual development 
        account by reason of section 529(e)(2)(A) to such account.''; 
        and
            (2) in subsection (e)(1), by inserting ``, an individual 
        development account described in section 529(c)(2)'' after 
        ``section 408(a)''.
    (d) Information Reporting.--Section 6047 of the Internal Revenue 
Code of 1986 (26 U.S.C. 6693) (relating to information returns) is 
amended by adding at the end of subsection (c) the following new 
sentence: ``To the extent provided by forms or regulations prescribed 
by the Secretary, the provisions of this section shall apply to any 
transaction of any trust described in section 529.''.
    (e) Failure to Provide Reports on Individual Development 
Accounts.--Section 6693 of the Internal Revenue Code of 1986 (26 U.S.C. 
6693) (relating to failure to provide reports on individual retirement 
accounts or annuities) is amended--
            (1) in the heading of such section, by inserting ``or on 
        individual development accounts'' after ``annuities''; and
            (2) by adding at the end of subsection (a) the following 
        new sentence: ``The person required by section 529(i) to file a 
        report regarding an individual development account at the time 
        and in the manner required by such section shall pay a penalty 
        of $50 for each failure, unless it is shown that such failure 
        is due to reasonable cause.''.
    (f) Special Rule for Determining Amounts of Support for 
Dependent.--Section 152(b) of the Internal Revenue Code of 1986 (26 
U.S.C. 152(b)) (relating to definition of dependent) is amended by 
adding at the end the following new paragraph:
            ``(6) A distribution from an individual development account 
        described in section 529(c)(2) used exclusively to pay 
        qualified expenses described in section 529(c)(1) of the 
        individual for whose benefit the account is established shall 
        not be taken into account in determining support for such 
        individual for purposes of this section.''.
    (g) Clerical Amendments.--
            (1) The table of parts for subchapter F of chapter 1 of 
        such Code is amended by inserting at the end the following new 
        item:

``Part VIII. Individual Development Accounts.''.
            (2) The table of sections for subchapter B of chapter 68 of 
        such Code is amended by amending the item relating to section 
        6693 to read as follows:

``Sec. 6693. Failure to provide reports on individual development 
                            accounts or annuities or on individual 
                            development accounts.''.
    (h) Effective Date.--The amendments made by this section shall 
apply to contributions made after the enactment of the Act.

               PART D--ADVANCE EITC STATE DEMONSTRATIONS

SEC. 741. ADVANCE PAYMENT OF EARNED INCOME TAX CREDIT THROUGH STATE 
              DEMONSTRATION PROGRAMS.

    (A) In General.--Section 3507 (relating to the advance payment of 
the earned income tax credit) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following subsection (g);
    ``(g) State Demonstrations.--
            ``(1) In general.--In lieu of receiving earned income 
        advance amounts from an employer under subsection (a), a 
        participating resident shall receive advance earned income 
        payments from a responsible State agency pursuant to a State 
        Advance Payment Program that is designated pursuant to 
        paragraph (2).
            ``(2) Designations.--
                    ``(A) In general.--From among the States submitting 
                proposals satisfying the requirements of subsection 
                (g)(3), the Secretary (in consultation with the 
                Secretary of Health and Human Services) may designate 
                not more than 4 State Advance Payment Demonstrations. 
                States selected for the demonstrations may have, in the 
                aggregate, no more than 5 percent of the total number 
                of household participating in the program under the 
                Food Stamp program in the immediately preceding fiscal 
                year, Administrative costs of a State in conducting a 
                demonstration under this section may be included for 
                matching under section 403(a) of the Social Security 
                Act and section 16(a) of the Food Stamp Act of 1977.
                    ``(B) When designation may be made.--Any 
                designation under this paragraph shall be made no later 
                than December 31, 1995.
                    ``(C) Period for which designation is in effect.--
                            ``(i) In general.--Designations made under 
                        this paragraph shall be effective for advance 
                        earned income payments made after December 31, 
                        1995, and before January 1, 1999.
                            ``(ii) Special rules.--
                                    ``(I) Revocation of designations.--
                                The Secretary may revoke the 
                                designation under this paragraph if the 
                                Secretary determines that the State is 
                                not complying substantially with the 
                                proposal described in paragraph (3) 
                                submitted by the State.
                                    ``(II) Automatic termination of 
                                designations.--Any failure by a State 
                                to comply with the reporting 
                                requirements described in paragraphs 
                                (3)(F) and (3)(G) has the effect of 
                                immediately terminating the designation 
                                under this paragraph (2) and rendering 
                                paragraph (5)(A)(ii) inapplicable to 
                                subsequent payments.
            ``(3) Proposals.--No State may be designated under 
        subsection (g)(2) unless the State's proposal for such 
        designation--
                    ``(A) identifies the responsible State agency,
                    ``(B) describes how and when the advance earned 
                income payments will be made by that agency, including 
                a description of any other State or Federal benefits 
                with which such payments will be coordinated,
                    ``(C) describes how the State will obtain the 
                information on which the amount of advance earned 
                income payments made to each participating resident 
                will be determined in accordance with paragraph (4),
                    ``(D) describes how State residents who will be 
                eligible to receive advance earned income payments will 
                be selected, notified of the opportunity to receive 
                advance earned income payments from the responsible 
                State agency, and given the opportunity to elect to 
                participate in the program,
                    ``(E) describes how the State will verify, in 
                addition to receiving the certifications and statement 
                described in paragraph (7)(D)(iv), the eligibility of 
                participating residents for the earned tax credit,
                    ``(F) commits the State to furnishing to each 
                participating resident to the Secretary by January 31 
                of each year a written statement showing--
                            ``(i) the name and taxpayer identification 
                        number of the participating resident, and
                            ``(ii) the total amount of advance earned 
                        income payments made to the participating 
                        resident during the prior calendar year,
                    ``(G) commits the State to furnishing to the 
                Secretary by December 1 of each year a written 
                statement showing the name and taxpayer identification 
                number of each participating resident,
                    ``(H) commits the State to treat the advanced 
                earned income payments as described in subsection 
                (g)(5) and any repayments of excessive advance earned 
                income payments as described in subsection (g)(6),
                    ``(I) commits the State to assess the development 
                and implementation of its State Advance Payment 
                Program, including an agreement to share its findings 
                and lessons with other interested States in a manner to 
                be described by the Secretary, and
                    ``(J) is submitted to the Secretary on or before 
                June 30, 1995.
            ``(4) Amount and timing of advance earned income 
        payments.--
                    ``(A) Amount.--
                            ``(i) In general.--The method for 
                        determining the amount of advance earned income 
                        payments made to each participating resident is 
                        to conform to the full extent possible with the 
                        provisions of subsection (c).
                            ``(ii) Special rule.--A State may, at its 
                        election, apply the rules of subsection 
                        (c)(2)(B) by substituting `between 60 percent 
                        and 75 percent of the credit percentage in 
                        effect under section 32(b)(1) for an individual 
                        with the corresponding number of qualifying 
                        children' for `60 percent of the credit 
                        percentage in effect under section 32(b)(1) for 
                        such an eligible individual with 1 qualifying 
                        child' in clause (i) and `the same percentage 
                        (as applied in clause (i))' for `60 percent' in 
                        clause (ii).
                    ``(B) Timing.--The frequency of advance earned 
                income payments may be made on the basis of the payroll 
                periods of participating residents, on a single 
                statewide schedule, or on any other reasonable basis 
                prescribed by the State in its proposal; however, in no 
                event may advance earned income payments be made to any 
                participating resident less frequently than on a 
                calendar-quarter basis.
            ``(5) Payments to be treated as payments of withholding and 
        fica taxes.--
                    ``(A) In general.--For purposes of this title, 
                advance earned income payments during any calendar 
                quarter--
                            ``(i) shall neither be treated as a payment 
                        of compensation nor be included in gross 
                        income, and
                            ``(ii) shall be treated as made out of--
                                    ``(I) amounts required to be 
                                deducted by the State and withheld for 
                                the calendar quarter by the State under 
                                section 3401 (relating to wage 
                                withholding), and
                                    ``(II) amounts required to be 
                                deducted for the calendar quarter under 
                                section 3102 (relating to FICA employee 
                                taxes), and
                                    ``(III) amounts of the taxes 
                                imposed on the State for the calendar 
                                quarter under section 3111 (relating to 
                                FICA employer taxes),
                        as if the State had paid to the Secretary, on 
                        the day on which payments are made to 
                        participating residents, an amount equal to 
                        such payments.
                    ``(B) Advance payments exceed taxes due.--If for 
                any calendar quarter the aggregate amount of advance 
                earned income payments made by the responsible State 
                agency under a State Advance Payment Program exceeds 
                the sum of the amounts referred to in subparagraph 
                (A)(ii) (without regard to paragraph (6)(A)), each such 
                advance earned income payment shall be reduced by an 
                amount which bears the same ratio to such excess as 
                such advance earned income payment bears to the 
                aggregate amount of all such advance earned income 
                payments.
            ``(6) State repayment of excessive advance earned income 
        payments.--
                    ``(A) In general.--Notwithstanding any other 
                provision of law, in the case of an excessive advance 
                earned income payment a State shall be treated as 
                having deducted and withheld under section 3401 
                (relating to wage withholding), and therefore is 
                required to pay to the United States, the repayment 
                amount during the repayment calendar quarter.
                    ``(B) Excessive advance earned income payment.--For 
                purposes of this section, an excessive advance income 
                payment is that portion of any advance earned income 
                payment that, when combined with other advance earned 
                income payments previously made to the same 
                participating resident during the same calendar year, 
                exceeds the amount of earned income tax credit to which 
                that participating resident is entitled under section 
                32 for that year.
                    ``(C) Repayment amount.--The repayment amount is 
                equal to 50 percent of the excess of--
                            ``(i) excessive advance earned income 
                        payments made by a State during a particular 
                        calendar year, over
                            ``(ii) the sum of--
                                    ``(I) 4 percent of all advance 
                                earned income payments made by the 
                                State during that calendar year, and
                                    ``(II) the excessive advance earned 
                                income payments made by the State 
                                during that calendar year that have 
                                been collected from participating 
                                residents by the Secretary.
                    ``(D) Repayment calendar quarter.--The repayment 
                calendar quarter is the second calendar quarter of the 
                third calendar year after the calendar year in which an 
                excessive earned income payment is made.
            ``(7) Definitions.--For purposes of this section--
                    ``(A) State advance payment program.--The term 
                `State Advance Payment Program' means the program 
                described in a proposal submitted for designation under 
                paragraph (1) and designated by the Secretary under 
                paragraph (2).
                    ``(B) Responsible state agency.--The term 
                `responsible State agency' means the single State 
                agency that will be making the advance earned income 
                payments to residents of the State who elect to 
                participate in a State Advance Payment Program.
                    ``(C) Advance earned income payments.--The term 
                `advance earned income payments' means an amount paid 
                by a responsible State agency to residents of the State 
                pursuant to a State Advance Payment Program.
                    ``(D) Participating resident.--The term 
                `participating resident' means an individual who--
                            ``(i) is a resident of a State that has in 
                        effect a designated State Advance Payment 
                        Program,
                            ``(ii) makes the election described in 
                        paragraph (3)(C) pursuant to guidelines 
                        prescribed by the State,
                            ``(iii) certifies to the State the number 
                        of qualifying children the individual has, and
                            ``(iv) provides to the State the 
                        certifications and statement set forth in 
                        subsections (b)(1), (b)(2), (b)(3), and (b)(4) 
                        (except that for purposes of this clause (iv), 
                        the term `any employer' shall be substituted 
                        for `another employer' in subsection (b)(3)), 
                        along with any other information required by 
                        the State.''.
    (b) Technical Assistance.--The Secretaries of Treasury and Health 
and Human Services shall jointly ensure that technical assistance is 
provided to State Advance Payment Programs and that these programs are 
rigorously evaluated.
    (c) Annual Reports.--The Secretary shall issue annual reports 
detailing the extent to which--
            (1) residents participate in the State Advance Payment 
        Programs,
            (2) participating residents file Federal and State tax 
        returns,
            (3) participating residents report accurately the amount of 
        the advance earned income payments made to them by the 
        responsible State agency during the year, and
            (4) recipients of excessive advance earned income payments 
        repaid those amounts.
The report shall also contain an estimate of the amount of advance 
earned income payments made by each responsible State agency but not 
reported on the tax returns of a participating resident and the amount 
of excessive advance earned income payments.
    (d) Authorization of Appropriations.--For purposes of providing 
technical assistance described in subsection (b), preparing the reports 
described in subsection (c), and providing grants to States in support 
of designated State Advance Payment Programs, there are authorized to 
be appropriated in advance to the Secretary of the Treasury and the 
Secretary of Health and Human Services a total of $1,400,000 for fiscal 
years 1996 through 1999.

       TITLE VIII--SELF EMPLOYMENT/MICROENTERPRISE DEMONSTRATIONS

SEC. 801. DEMONSTRATION PROGRAM TO PROVIDE SELF-EMPLOYMENT 
              OPPORTUNITIES TO WELFARE RECIPIENTS AND LOW-INCOME 
              INDIVIDUALS.

    (a) In General.--The Secretary of Health and Human Services 
(hereinafter in this section referred to as the ``Secretary'') and the 
Administrator of the Small Business Administration (hereinafter in this 
section referred to as the ``Administrator''), shall, subject to the 
availability of appropriations in advance for this purpose, jointly 
develop a self-employment/microenterprise demonstration program for at 
least five years in length that will build on the experience of 
microenterprise and self-employment programs previously carried out by 
the Federal Government and other entities. The program shall be 
designed--
            (1) to identify regulatory and other barriers that prevent 
        welfare recipients and low-income individuals from increasing 
        self-sufficiency through self-employment and microenterprise 
        development, and to identify and test effective means to 
        eliminate such barriers;
            (2) to develop and evaluate promising program models, based 
        upon existing effective practices, which have the potential to 
        (A) increase the number of welfare recipients and low-income 
        individuals who become self-sufficient or increase self-
        sufficiency through self-employment and microenterprise 
        development and (B) reduce Federal spending on transfer 
        payments and services to welfare recipients and low-income 
        individuals; and
            (3) to demonstrate the potential for expanding the capacity 
        of local organizations to provide services, technical 
        assistance and loans which help welfare recipients and low-
        income individuals start or expand self-employment or 
        microenterprises.
    (b) Use of Intermediaries.--To carry out such program, the 
Secretary and Administrator shall jointly enter into agreements with 
local intermediaries that--
            (1) apply to participate in such program, and
            (2) demonstrate that they are capable of implementing the 
        provisions of the agreement.
    (c) Program Design.--In order to facilitate a randomized 
evaluation, as provided for in subsection (i)(1) below, the Secretary 
and Administrator shall identify those predominant and effective 
program models currently used by existing intermediaries to provide 
self-employment and related services to low-income individuals, and 
shall design the demonstration program in order to evaluate at least 
two distinct types of program models with contrasting levels of 
technical assistance. In designing the demonstration program, the 
Secretary and Administrator shall consult with appropriate parties, 
such as--
            (1) State and local agencies and private, nonprofit 
        organizations with experience in administering self-employment 
        programs that serve low-income individuals; and
            (2) other persons with recognized expertise in conducting 
        randomized evaluations of self-employment programs or other 
        related programs.
    (d) Assistance to Intermediaries.--
            (1) In general.--To carry out the program, the Secretary 
        and Administrator may provide the following assistance to 
        intermediaries selected to participate in the program--
                    (A) grants for providing technical assistance to 
                eligible individuals, for operating costs and for costs 
                associated with participating in the evaluation 
                provided for in subsection (i)(1) below;
                    (B) loan guarantees; and
                    (C) loans.
            (2) Technical assistance to inter-mediaries.--The Secretary 
        and Administrator may provide grants to intermediaries or 
        third-party technical assistance providers for the provision of 
        technical assistance to intermediaries selected to participate 
        in this program.
            (3) Termination of assistance.--Assistance awarded pursuant 
        to this section may fully fund project periods of up to five 
        years. The Secretary and Administrator may revoke, terminate or 
        reduce assistance to an intermediary if the intermediary fails 
        to comply with the terms of any agreement it enters into with 
        the Secretary and Administrator.
    (e) Selection of Intermediaries.--
            (1) In general.--In determining whether to enter into an 
        agreement with an intermediary under this section, the 
        Secretary and Administrator shall take into consideration--
                    (A) the intermediary's record of success in serving 
                low-income individuals;
                    (B) the intermediary's record of success in 
                providing technical assistance or loans to low-income 
                individuals for the purpose of self-employment;
                    (C) the nature, types, and costs of technical 
                assistance and/or lending methods the intermediary will 
                employ in serving the target population;
                    (D) the intermediary's ability to obtain matching 
                funds from private sources; and
                    (E) such other matters as the Secretary and 
                Administrator deem appropriate.
            (2) Additional programs.--In addition to the demonstration 
        program provided for in subsection (c) above, the Secretary and 
        Administrator may select up to five intermediaries that would 
        employ program models that would operate independently of the 
        randomized evaluation provided for in subsection (i)(1) below, 
        where such program models demonstrate promising, innovative 
        strategies that could not readily be evaluated by a randomized 
        experimental design.
    (f) Eligible Individuals.--An individual eligible to participate in 
a program conducted under this section is any low-income individual or 
welfare recipient. The Secretary and Administrator shall ensure that an 
appropriate minimum percentage of welfare recipients will participate 
in each demonstration program funded under this section.
    (g) Provisions of Agreements.--Any agreement entered into with an 
intermediary under this section shall provide that--
            (1) the intermediary has or will have an agreement with the 
        State agency responsible for administering the job 
        opportunities and basic skills training program (as provided 
        for under part F of title IV of the Social Security Act) 
        (hereinafter in this section referred to as the ``JOBS'' 
        programs) and the Work Program (as provided under part G of 
        title IV of such Act) such that JOBS and Work Program funds 
        will be used to provide support services, including training 
        and technical assistance, to welfare recipients who are 
        participating in the demonstration programs funded under this 
        section;
            (2) the intermediary will implement a program that is 
        approved by the Secretary and Administrator;
            (3) the intermediary will cooperate with any independent 
        evaluator(s) selected pursuant to subsection (i) below; and
            (4) the intermediary will meet any other obligations 
        required by the Secretary and Administrator, including any fund 
        matching requirements.
    (h) Program Administration.--
            (1) In general.--The Secretary and Administrator shall 
        enter into a memorandum of understanding for the joint 
        administration of the demonstration programs provided for by 
        this section. The designation of intermediaries to participate 
        in the program shall be completed no later than 12 months after 
        the date of appropriation of funds for this Act.
            (2) Coordination with other agencies.--The Secretary and 
        Administrator shall also coordinate and consult with the 
        Secretaries of the Department of Agriculture, the Department of 
        Housing and Urban Development, and the Department of Labor, on 
        regulatory or other reforms or coordinated efforts by such 
        agencies that may further eliminate barriers to self-employment 
        and legitimize microenterprise development by low-income 
        individuals and welfare recipients.
    (i) Evaluation and Report.--
            (1) In general.--The Secretary, in consultation with the 
        Administrator, shall conduct or provide for an evaluation of 
        the effectiveness of the demonstration program provided for in 
        subsection (c) above and shall prepare and submit to the 
        President and Congress a preliminary report of the evaluation 
        no later than three years following the designation of 
        intermediaries and a final report no later than seven years 
        following such designation, together with such recommendations, 
        including recommendations for legislation, as the Secretary and 
        Administrator deem appropriate. Such evaluation shall be based 
        on an experimental design with random assignment between a 
        treatment group and a control group. In designing the 
        evaluation, the Secretary shall consider testing for--
                    (A) greater self-sufficiency as measured by 
                employment and self-employment rates, amount of earned 
                income, poverty rates, and exit and recidivism rates 
                for Aid to Families With Dependent Children 
                (hereinafter in this section referred to as ``AFDC''), 
                Food Stamps and other public assistance programs;
                    (B) reduced costs of public support as measured by 
                changes in overall support payments for items such as 
                income maintenance, food, child care, health care, 
                housing, job training and other benefits;
                    (C) number of businesses and jobs created, number 
                of loans to welfare recipients and low-income 
                individuals, repayment rates for loans, and business 
                performance after welfare or other public assistance 
                ends;
                    (D) the relative effectiveness, cost-to-benefit 
                ratio, and degree of financial self-sufficiency of the 
                different program models employed by the intermediaries 
                participating in the demonstration program; and
                    (E) the program's impact and effectiveness in 
                serving participants in a time-limited welfare system, 
                as compared to other low-income individuals.
            (2) Evaluation of additional programs.--The Secretary, in 
        consultation with the Administrator, shall also conduct or 
        provide for an independent evaluation of the effectiveness of 
        any program models selected pursuant to subsection (e)(2) above 
        and shall prepare and submit to the President and Congress a 
        preliminary report of the evaluation no later than three years 
        following the designation of intermediaries, and a final report 
        no later than five years following such designation, together 
        with such recommendations, including recommendations for 
        legislation, as the Secretary and Administrator deem 
        appropriate.
            (3) Preliminary reports to congress.--The preliminary 
        reports provided for in paragraphs (1) and (2) of this 
        subsection shall include an analysis of any regulatory or other 
        barriers that prevent welfare recipients and low-income 
        individuals from becoming self-sufficient through self-
        employment and microenterprise development.
            (4) Required information.--The Secretary may require each 
        intermediary selected pursuant to this section to provide the 
        Secretary with such information as the Secretary determines is 
        necessary to carrying out the duties of this subsection.
            (5) Early and regular information sharing with 
        intermediaries.--The Secretary, in consultation with the 
        Administrator, shall provide early and regular feedback and 
        summaries to intermediaries selected to participate pursuant to 
        this section of the progress of the evaluation, the data 
        collected during the evaluation, preliminary findings and such 
        other information as the Secretary deems appropriate. The 
        Secretary shall provide such feedback and summaries at least 
        once a year for the life of the demonstration.
    (j) Authorization of Appropriations.--To carry out the purposes of 
this section there are authorized to be appropriated to the Secretary 
and Administrator--
            (1) $4,000,000 for fiscal year 1997,
            (2) $8,000,000 for each of fiscal years 1998, 1999, 2000, 
        and 2001, and
            (3) $4,000,000 for fiscal year 2002.
    (k) Definitions.--For the purposes of this section--
            (1) the term ``intermediary'' means an organization, 
        partnership, or consortium of organizations that acts as a 
        lender and/or as a technical assistance provider to individuals 
        who wish to start or expand a microenterprise;
            (2) the term ``low-income individual'' means an individual 
        whose income level does not exceed 130 percent of the official 
        poverty line as defined by the Office of Management and Budget;
            (3) the term ``microenterprise'' generally means a business 
        that has a net worth of less than $15,000;
            (4) the term ``technical assistance'' as it relates to 
        assisting a welfare recipient or low-income individual to 
        become self-employed includes business technical assistance, 
        entrepreneurial training, and/or personal development services; 
        and
            (5) the term ``welfare recipient'' means a participant in a 
        time-limited welfare program who is eligible for the JOBS or 
        Work program or a person who is receiving assistance from AFDC.

                          TITLE IX--FINANCING

SEC. 901. LIMITATION ON FEDERAL PAYMENTS FOR EMERGENCY ASSISTANCE.

    Section 403(a)(5) of the Act is amended to read as follows:
            ``(5)(A) Each State shall be entitled to payment from the 
        Secretary in an amount equal to 50 percent of the total amounts 
        expended under the State plan in a fiscal year as emergency 
        assistance to needy families with children, but such payment 
        may not exceed the greater of--
                    ``(i) such State's share of the limitation in 
                subparagraph (B) for such fiscal year, or
                    ``(ii) the amount paid by the Secretary with 
                respect to such State's expenditures for emergency 
                assistance to needy families with children for fiscal 
                year 1991.
            ``(B) The limitation referred to in subparagraph (A) is 
        $418,000,000 for fiscal year 1995, and for fiscal year 1996 and 
        for each fiscal year thereafter, $418,000,000 multiplied by the 
        ratio of the Consumer Price Index (prepared by the Department 
        of Labor) for the third quarter of the preceding fiscal year to 
        such Index for the third quarter of fiscal year 1994.
            ``(C) For purposes of this paragraph, a `State's share of 
        the limitation in subparagraph (B)' for a fiscal year means--
                    ``(i) such State's share of the EA portion of the 
                limitation (as defined in subparagraph (D)), plus
                    ``(ii) such State's share of the AFDC portion of 
                the limitation (as defined in subparagraph (E)) for the 
                fiscal year involved.
            ``(D) For the purposes of this paragraph, the EA portion of 
        the limitation is--
                    ``(i) for fiscal year 1995 and each fiscal year 
                thereafter, the limitation for such year, multiplied 
                by--
                            ``(I) 90 percent, minus
                            ``(II) 10 percentage points for each year 
                        after 1995.

        but never less than zero.
            ``(E) For purposes of this paragraph, the AFDC portion of 
        the limitation is--
                    ``(i) for fiscal year 1995, the limitation for such 
                year, multiplied by 10 percent, and
                    ``(ii) for fiscal year 1996 and each fiscal year 
                thereafter, the limitation for such year multiplied 
                by--
                            ``(I) 10 percent, plus
                            ``(II) 10 percentage points for each year 
                        after 1995,

        but never more than 100.
            ``(F) For purposes of this paragraph--
                    ``(i) a State's share of the EA portion of the 
                limitation for a fiscal year is the limitation for such 
                year multiplied by the ratio of the estimated 
                expenditures in such State for emergency assistance to 
                needy families with children for quarters in fiscal 
                year 1994 to the sum of such estimated expenditures in 
                all the States for quarters in such year, and
                    ``(ii) a State's share of the AFDC portion of the 
                limitation for a fiscal year is the limitation for such 
                year multiplied by the ratio of the estimated 
                expenditures in such State for aid to families with 
                dependent children for quarters in the preceding fiscal 
                year to the sum of such expenditures in all the States 
                for quarters in such preceding fiscal year.''.

SEC. 902. UNIFORM ALIEN ELIGIBILITY CRITERIA FOR PUBLIC ASSISTANCE 
              PROGRAMS.

    (a) Federal and Federally-Assisted Programs.--
            (1) Program eligibility criteria.--
                    (A) Aid to families with dependent children.--
                Section 402(a)(33) of the Social Security Act is 
                amended by striking ``(A) a citizen'' and all that 
                follows and inserting the following:
                    ``(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 a State plan 
                approved under a State plan approved under this part by 
                or pursuant to section 210(f) or 245A(h) of the 
                Immigration and Nationality Act or any other provision 
                of law;''.
                    (B) Supplemental security income.--Section 
                1614(a)(1)(B)(i) of such Act 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''.
                    (C) Medicaid--
                            (i) Section 1903(v)(1) of such Act is 
                        amended to read as follows:
    ``(v)(1) Notwithstanding the preceding provisions of this section, 
(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 or pursuant to section 210(f) or 245A(h) 
of the Immigration and Nationality Act or any other provision of law, 
and (B) except as provided in paragraph (2), no such payment may be 
made for medical assistance furnished to an individual who is not a (i) 
citizen or national of the United States, or (ii) qualified alien (as 
defined in section 1101(a)(10)).''.
                            (ii) Section 1903(v)(2) of such Act is 
                        amended by--
                                    (I) striking ``paragraph (1)'' and 
                                inserting ``paragraph (1)(B)''; and
                                    (II) striking ``alien'' each place 
                                it appears and inserting 
                                ``individual''.
                            (iii) Section 1902(a) of such Act is 
                        amended in the last sentence by striking 
                        ``alien'' and all that follows 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).''.
                            (iv) Section 1902(b)(3) of such Act is 
                        amended by inserting ``or national'' after 
                        ``citizen''.
    (2) Definition of Term ``Qualified Alien''.--Section 1101(a) of 
such Act 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, provided that--
                            ``(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) who is the spouse or unmarried child under 21 
                years of age of a citizen of the United States, or the 
                parent of such a citizen if the citizen is 21 years of 
                age or older, and with respect to whom an application 
                for adjustment to lawful permanent residence is 
                pending;

        such status not having changed.''.
            (3) Conforming amendment.--Section 244A(f)(1) of the 
        Immigration and Nationality Act 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'' 
        immediately before the semicolon.
    (b) State and Local Programs.--A State or political subdivision 
therein may provide that an alien is not eligible for any program of 
assistance based on need that is furnished by such State or political 
subdivision unless such alien is a ``qualified alien'' within the 
meaning of section 1101(a)(10) of the Social Security Act (as added by 
subsection (a)(2) of this section).
    (c) Effective Date.--
            (1) The amendments made by subsection (a) are effective 
        with respect to benefits payable on the basis of any 
        application filed after the date of enactment of this Act.
            (2) Subsection (b) is effective upon the date of enactment 
        of this Act.

SEC. 903. ELIGIBILITY OF SPONSORED ALIENS FOR CERTAIN PROGRAMS.

    (a) Deeming of Sponsor's Income and Resources to an Alien Under the 
Supplemental Security Income, Aid to Families with Dependent Children, 
and Food Stamp Programs.--
            (1) Length of deeming period.--
                    (A) Making the ssi 5-year period permanent.--
                Subsection (b) of section 7 of the Unemployment 
                Compensation Amendments of 1993 (Public Law 103-152) is 
                repealed.
                    (B) Increasing the afdc period from 3 to 5 years.--
                Section 415 of the Social Security Act is amended by 
                striking ``three years'' each place such phrase appears 
                and inserting ``5 years''.
                    (C) Increasing the food stamp period from 3 to 5 
                years.--Section 5(i) of the Food Stamp Act of 1977 is 
                amended by striking ``three years'' each place such 
                phase appears and inserting ``5 years''.
            (2) Inapplicability in the case of any alien whose sponsor 
        receives ssi or afdc benefits.--
                    (A) SSI.--Section 1621(f) of the Social Security 
                Act is amended by adding at the end the following new 
                paragraph:
            ``(3) The provisions of this section shall not apply to any 
        alien for any month for which such alien's sponsor receives a 
        benefit under this title (which includes, for purposes of this 
        paragraph, the program of federally administered State 
        supplementary payments made pursuant to section 1616(a) of this 
        Act or section 212(b) of Public Law 93-66) or the program of 
        aid to families with dependent children authorized by part A of 
        title IV of this Act.''.
                    (B) AFDC.--Section 415(f) of the Social Security 
                Act is amended--
                            (i) by redesignating paragraphs (1) through 
                        (5) as subparagraphs (A) through (E), 
                        respectively;
                            (ii) by striking ``(f)'' and inserting 
                        ``(f)(1)''; and
                            (iii) by adding at the end the following 
                        new paragraph:
            ``(2) The provisions of this section shall not apply to any 
        alien for any month for which such alien's sponsor receives a 
        benefit under the program authorized by this part, or the 
        program of supplemental security income authorized by title XVI 
        of this Act (which includes, for purposes of this paragraph, 
        the program of federally administered State supplementary 
        payments made pursuant to section 1616(a) of this Act or 
        section 212(b) of Public Law 93-66).''.
                    (C) Food stamps.--Section 5(i)(2)(E) of the Food 
                Stamp Act of 1977 is amended--
                            (i) by striking ``(E)'' and inserting 
                        ``(E)(i)''; and
                            (ii) by adding at the end the following:
            ``(ii) The provisions of this subsection shall not apply to 
        any alien for any month for which such alien's sponsor receives 
        a benefit under the program of aid to families with dependent 
        children authorized by part A of title IV of the Social 
        Security Act or the program of supplemental security income 
        authorized by title XVI of such Act (which includes, for 
        purposes of this paragraph, the program of federally 
        administered State supplementary payments made pursuant to 
        section 1616(a) of such Act or section 212(b) of Public Law 93-
        66).''.
            (3) Inequitable circumstances.--
                    (A) SSI.--Section 1621 of the Social Security Act 
                is amended by adding at the end the following new 
                subsection:
    ``(g) The Secretary may, pursuant to regulations promulgated after 
consultation with the Secretary of Agriculture, alter or suspend the 
application of this section in any case in which the Secretary 
determines that such application would be inequitable under the 
circumstances.''
                    (B) AFDC.--Section 415 of the Social Security Act 
                is amended by adding at the end the following new 
                subsection:
    ``(g) The Secretary may, pursuant to regulations promulgated after 
consultation with the Secretary of Agriculture, alter or suspend the 
application of this section in any case in which the Secretary 
determines that such application would be inequitable under the 
circumstances.''
                    (C) Food stamps.--Section 5(i)(2) of the Food Stamp 
                Act of 1977 is amended by adding at the end the 
                following new subparagraph:
    ``(F) The Secretary may, pursuant to regulations promulgated after 
consultation with the Secretary of Health and Human Services, alter or 
suspend the application of this section in any case in which the 
Secretary determines that such application would be inequitable under 
the circumstances.''
            (4) Food stamps exemption for blind or disabled aliens.--
        Section 5(i)(2)(E) of the Food Stamp Act of 1977 (as previously 
        amended by subsection (a)(2)(C)) is further amended by adding 
        at the end the following:
            ``(iii) The provisions of this subsection shall not apply 
        with respect to any individual for any month for which such 
        individual receives a benefit under the program of supplemental 
        security income authorized by title XVI of the Social Security 
        Act by reason of blindness (as determined under section 
        1614(a)(2) of such Act) or disability (as determined under 
        section 1614(a)(3) of such Act), provided that such blindness 
        or disability commenced after the date of such individual's 
        admission into the United States for permanent residence.''.
            (5) Increase in food stamp resource limitation.--Section 
        5(i)(2)(B)(ii) of the Food Stamp Act of 1977 is amended by 
        striking ``$1,500'' and inserting ``$2,000''.
    (b) Disqualification of Certain Sponsored Aliens After the 60th 
Month After Entry Into the United States Under the Supplemental 
Security Income, Aid to Families With Dependent Children, and Food 
Stamp Programs.--
            (1) In general.--
                    (A) SSI.--Section 1611(e) of the Social Security 
                Act is amended by inserting between paragraphs (3) and 
                (5) a new paragraph (4) as follows:
            ``(4)(A) No individual (other than an individual described 
        in section 1621(f)(1)) who is an alien shall be an eligible 
        individual or eligible spouse for purposes of this title with 
        respect to any month beginning after the 60th month after such 
        individual's entry into the United States if the adjusted gross 
        income (as defined in section 62 of the Internal Revenue Code 
        of 1986) of any person who (as a sponsor of such individual's 
        entry into the United States) executed an affidavit of support 
        with respect to such individual plus the adjusted gross income 
        of such person's spouse and dependent children (if any) for the 
        most recently completed year for which--
                    ``(i)(I) a return has been filed in connection with 
                the taxes imposed by subtitle A of the Internal Revenue 
                Code of 1986 by or on behalf of such person (and such 
                person's spouse and dependent children, if any), or
                    ``(II) no such return is required by such Code to 
                be so filed, and
                    ``(ii) the Secretary has published the United 
                States median income for all families pursuant to 
                subparagraph (B)(i)(I),
        exceeds the applicable measure of United States median income 
        for all families (determined in accordance with subparagraph 
        (B)(i)(II)) for such year.
            ``(B)(i) The Secretary shall publish twice yearly in the 
        Federal Register a notice--
                    ``(I) setting out the United States median income 
                for all families for not fewer than five of the years 
                immediately preceding the year in which such notice is 
                published, and
                    ``(II) identifying the months for which each such 
                figure shall be deemed to be the applicable measure for 
                the purpose of making the determination required by 
                subparagraph (A).
            ``(ii) The United States median income for all families for 
        any year published by the Secretary pursuant to clause (i) 
        shall be the amount reported for such year by the Census Bureau 
        pursuant to its Current Population Survey, except that if such 
        amount has not been so reported for such year at the time such 
        notice is published, then the measure of the United States 
        median income for all families for such year shall be derived 
        by increasing the amount reported by the Census Bureau for the 
        immediately preceding year by a percentage equal to the 
        percentage (rounded to the nearest one-tenth of one percent), 
        if any, by which the Consumer Price Index (as prepared by the 
        Department of Labor) for such year has increased over such 
        immediately preceding year.''.
                    (B) AFDC.--Section 402(a) of the Social Security 
                Act is amended by--
                            (i) striking ``and'' at the end of 
                        paragraph (44);
                            (ii) striking the period at the end of 
                        paragraph (45) and inserting ``; and''; and
                            (iii) adding at the end a new paragraph as 
                        follows:
            ``(46) provide that an individual who is an alien may not 
        be considered a dependent child, a caretaker relative whose 
        needs are to be taken into account in making the determination 
        under paragraph (7), or any other person whose needs should be 
        taken into account in making such a determination with respect 
        to the child or relative, with respect to any month beginning 
        after the 60th month after such individual's entry into the 
        United States if the adjusted gross income (as defined in 
        section 62 of the Internal Revenue Code of 1986) of any person 
        who (as a sponsor of such individual's entry into the United 
        States) executed an affidavit of support with respect to such 
        individual plus the adjusted gross income of such person's 
        spouse and dependent children (if any) for the most recently 
        completed year for which--
                    ``(A)(i) a return has been filed in connection with 
                the taxes imposed by subtitle A of the Internal Revenue 
                Code of 1986 by or on behalf of such person (and such 
                person's spouse and dependent children, if any), or
                    ``(ii) no such return is required by such Code to 
                be so filed, and
                    ``(B) the United States median income for all 
                families has been published, exceeds the applicable 
                measure of United States median income for all families 
                for such year. For purposes of the preceding sentence, 
                the requirement for the publication of the United 
                States median income for all families for any year 
                shall be satisfied by the publication of such data for 
                such year pursuant to section 1611(e)(4)(B)(i)(I), and 
                the `applicable measure of United States median income 
                for all families' for any year shall be the measure 
                applicable for such year pursuant to section 
                1611(e)(4)(B)(i)(II).''.
                    (C) Food stamps.--Section 6 of the Food Stamp Act 
                of 1977 is amended by adding at the end a new 
                subsection as follows:
    ``(i) No alien who is a member of a household otherwise eligible to 
participate in the food stamp program under this section shall be 
eligible to participate in such program as a member of that or any 
other household with respect to any month beginning after the 60th 
month after such alien's entry into the United States if the adjusted 
gross income (as defined in section 62 of the Internal Revenue Code of 
1986) of any person who (as a sponsor of such alien's entry into the 
United States) executed an affidavit of support with respect to such 
alien plus the adjusted gross income of such person's spouse and 
dependent children (if any) for the most recently completed year for 
which--
            ``(1)(A) a return has been filed in connection with the 
        taxes imposed by subtitle A of the Internal Revenue Code of 
        1986 by or on behalf of such person (and such person's spouse 
        and dependent children, if any), or
            ``(B) no such return is required by such Code to be so 
        filed, and
            ``(2) the United States median income for all families has 
        been published,

exceeds the applicable measure of United States median income for all 
families for such year. For purposes of the preceding sentence, the 
requirement for the publication of the United States median income for 
all families for any year shall be satisfied by the publication of such 
data for such year pursuant to section 1611(e)(4)(B)(i)(I) of the 
Social Security Act, and the `applicable measure of United States 
median income for all families' for any year shall be the measure 
applicable for such year pursuant to section 1611(e)(4)(B)(i)(II) of 
such Act.''.
            (2) Conforming amendments.--
                    (A) Cooperation requirement.--
                            (i) SSI.--Section 1621(d)(1) of the Social 
                        Security Act is amended in the first sentence 
                        by--
                                    (I) striking ``during the period of 
                                5 years after entry into the United 
                                States,''; and
                                    (II) inserting ``or section 
                                1611(e)(4)'' after ``this section''.
                            (ii) AFDC.--The second sentence of section 
                        415(c)(1) of the Social Security Act (as 
                        previously amended by subsection (a)(1)(B) of 
                        this section) is further amended by--
                                    (I) striking ``during the period of 
                                5 years after his or her entry into the 
                                United States''; and
                                    (II) inserting ``or section 
                                402(a)(46)'' after ``this section''.
                            (iii) Food stamps.--The first sentence of 
                        section 5(i)(2)(C)(i) of the Food Stamp Act of 
                        1977 (as previously amended by subsection 
                        (a)(1)(C) of this section) is further amended 
                        by--
                                    (I) striking ``during the period of 
                                5 years after entry into the United 
                                States,''; and
                                    (II) inserting ``or section 6(i)'' 
                                after ``this section''.
                    (B) Liability for overpayments.--
                            (i) SSI.--Section 1621(e) of the Social 
                        Security Act is amended by--
                                    (I) striking ``during the period of 
                                5 years after such alien's entry into 
                                the United States,'';
                                    (II) inserting ``or section 
                                1611(e)(4)'' after ``this section''; 
                                and
                                    (III) adding at the end the 
                                following sentence: ``If an individual 
                                who is an alien subject to this 
                                subsection is naturalized as a citizen 
                                of the United States, such 
                                naturalization shall have no effect 
                                upon the continued application of this 
                                subsection to such individual or to 
                                such individual's sponsor.''.
                            (ii) AFDC.--Section 415(d) of the Social 
                        Security Act (as previously amended by 
                        subsection (a)(1)(B)) is further amended by--
                                    (I) striking ``during the period of 
                                5 years after such alien's entry into 
                                the United States,'';
                                    (II) inserting ``or section 
                                402(a)(46)'' after ``this section''; 
                                and
                                    (III) adding at the end the 
                                following sentence: ``If an individual 
                                who is an alien subject to this 
                                subsection is naturalized as a citizen 
                                of the United States, such 
                                naturalization shall have no effect 
                                upon the continued application of this 
                                subsection to such individual or to 
                                such individual's sponsor.''.
                            (iii) Food stamps.--Section 5(i)(2)(D) of 
                        the Food Stamp Act of 1977 (as previously 
                        amended by subsection (a)(1)(C)) is further 
                        amended by--
                                    (I) striking ``during the period of 
                                5 years after such alien's entry into 
                                the United States,'';
                                    (II) inserting ``or section 6(i)'' 
                                after ``this section''; and
                                    (III) adding at the end the 
                                following sentence: ``If an individual 
                                who is an alien subject to this 
                                subparagraph is naturalized as a 
                                citizen of the United States, such 
                                naturalization shall have no effect 
                                upon the continued application of this 
                                subparagraph to such individual or to 
                                such individual's sponsor.''.
            (3) Disclosure of tax return information.--Section 
        6103(l)(7)(B) of the Internal Revenue Code of 1986 is amended 
        by designating the existing matter as clause (i) and adding at 
        the end the following:
    ``(ii) The Secretary shall disclose, upon request, return 
information with respect to adjusted gross income (as defined in 
section 62) from returns filed by, or with respect to, any individual 
(and such individual's spouse and dependent children, if any) who (as a 
sponsor of an alien's entry into the United States) executed an 
affidavit of support with respect to such alien and whose income is 
considered in connection with determining such alien's eligibility for 
a program described in clause (i), (iii), or (vi) of subparagraph (D) 
to any Federal, State, or local agency administering such program, but 
only for the purpose of, and to the extent necessary, in determining 
the eligibility of such alien for benefits under such program.
    ``(iii) Information regarding any determination made pursuant to 
section 402(a)(46) of 415 of the Social Security Act (relating to the 
aid to families with dependent children program), section 1611(e)(4) or 
1621 of such Act (relating to the supplemental security income 
program), or section 5(i) or 6(i) of the Food Stamp Act of 1977 
(relating to the program of assistance under that Act) in connection 
with determining an alien's eligibility for benefits under any such 
program shall not be considered to be return information subject to the 
limitations on disclosure or redisclosure imposed by this section.''.
    (c) State and Local Programs.--A State or political subdivision 
therein may provide that an alien is not eligible for any program of 
assistance based on need that is furnished by such State or political 
subdivision for any month if such alien has been determined to be 
ineligible for such month for benefits under--
            (A) the program of aid to families with dependent children 
        authorized by part A of title IV of the Social Security Act, as 
        a result of the application of section 402(a)(46) or 415 of 
        such Act;
            (B) the program of supplemental security income authorized 
        by title XVI of the Social Security Act, as a result of the 
        application of section 1611(e)(4) or 1621 of such Act; or
            (C) the Food Stamp Act of 1977, as a result of the 
        application of section 5(i) or 6(i) of such Act.
    (d) Effective Date.--
            (1) Except as otherwise provided in paragraph (2), the 
        amendments made by subsections (a) and (b) are effective with 
        respect to benefits under the program of aid to families with 
        dependent children authorized by part A of title IV of the 
        Social Security Act, the program of supplemental security 
        income authorized by title XVI of the Social Security Act, and 
        the program authorized by the Food Stamp Act of 1977, payable 
        for months beginning after September 30, 1994, on the basis 
        of--
                    (A) an application filed after such date, or
                    (B) 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 415(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.
            (2) The amendments made by clauses (i)(III), (ii)(III), and 
        (iii)(III) of subsection (b)(2)(B) are effective upon the date 
        of enactment of this Act.
            (3) Subsection (c) is effective on October 1, 1994.

SEC. 904. FAMILY DAY CARE HOMES.

    (a) Section 17(c) of the National School Lunch Act (42 U.S.C. 
1766(c)) is amended--
            (1) in paragraph (1), by inserting ``except as provided in 
        paragraphs (4) and (5) of this subsection,'' after ``For 
        purposes of this section,'';
            (2) in paragraph (2), by inserting ``except as provided in 
        paragraphs (4) and (5) of this subsection,'' after ``For 
        purposes of this section,'';
            (3) in paragraph (3), by inserting ``except as provided in 
        paragraphs (4) and (5) of this subsection,'' after ``For 
        purposes of this section,'';
            (4) by redesignating paragraph (4) as paragraph (6); and
            (5) by inserting after paragraph (3) the following new 
        paragraphs:
            ``(4) For purposes of this section, the level one 
        reimbursement factor for family or group day care homes shall 
        be $1.5050 for lunches or suppers, $.8275 for breakfasts, and 
        $.4475 for supplements. The reimbursement factor under this 
        paragraph shall be adjusted on July 1, 1996, to reflect changes 
        in the Consumer Price Index for food away from home for the 
        most recent 24-month period for which data are available, and 
        on July 1 of each year, starting July 1, 1997, to reflect 
        changes in the Consumer Price Index for food away from home for 
        the most recent 12-month period for which data are available. 
        The reimbursement factor under this paragraph shall be rounded 
        to the nearest one-fourth cent.
            ``(5) For purposes of this section, the level two 
        reimbursement factor for family or group day care homes shall 
        be $1.2675 for lunches or suppers, $.5375 for breakfasts, and 
        $.25 for supplements. The reimbursement factor under this 
        paragraph shall be adjusted on July 1, 1996, to reflect changes 
        in the Consumer Price Index for food away from home for the 
        most recent 24-month period for which data are available, and 
        on July 1 of each year, starting July 1, 1997, to reflect 
        changes in the Consumer Price Index for food away from home for 
        the most recent 12-month period for which data are available. 
        The reimbursement factor under this paragraph shall be rounded 
        to the nearest one-fourth cent.''.
    (b) Section 17(f)(3) of the National School Lunch Act (42 U.S.C. 
1766(f)(3)) is amended--
            (1) by adding after subparagraph (C) the following new 
        subparagraph:
                    ``(D) The Secretary shall make payments, totalling 
                not more than $2,000,000 in fiscal year 1995 and 
                $5,000,000 in fiscal year 1996, to provide grants to 
                States for the purpose of providing assistance, 
                including grants to family or group day care home 
                sponsoring organizations and other appropriate 
                organizations; for securing and providing training, 
                materials, automated data processing assistance, and 
                other assistance for the staff of such sponsoring 
                organizations; and for providing training and other 
                assistance to family or group day care homes in order 
                to assist in the implementation of the requirements 
                contained in this subsection. Of the amount of funds 
                made available to each State under this subparagraph, 
                an amount not to exceed 30 percent may be retained by 
                the State to carry out the purposes of this 
                subparagraph;'';
            (2) in subparagraph (A), by deleting ``, except that 
        reimbursement shall not be provided'' and all that follows 
        through ``nearest one-fourth cent.'' and inserting in lieu 
        thereof ``as set forth in subparagraphs (B) and (C).'';
            (3) by redesignating subparagraphs (B), (C), and (D) (as 
        added by paragraph (1)) as subparagraphs (D), (E), and (L) 
        respectively;
            (4) by inserting after subparagraph (A) the following new 
        subparagraphs:
                    ``(B) Sponsoring organizations of family or group 
                day care homes located in low-income areas shall be 
                reimbursed for meals or supplements served to children 
                in those homes at the level one reimbursement rates 
                established in subsection (c)(4) of this section.
                    ``(C) Sponsoring organizations of family or group 
                day care homes, except family or group day care homes 
                covered under subparagraph (B) of this subsection, 
                shall be reimbursed for meals or supplements served to 
                children in those homes, at the election of the family 
                or group day care home, either--
                            ``(i) at the level two reimbursement rates 
                        established in subsection (c)(5) of this 
                        section; or
                            ``(ii)(I) for meals and supplements served 
                        to children from households that meet the 
                        income eligibility guidelines for free or 
                        reduced price meals and supplements set forth 
                        in section 9(b) of this Act, at the level one 
                        reimbursement rates established in subsection 
                        (c)(4) of this section; and
                            ``(II) for meals and supplements served to 
                        children from families who do not meet the 
                        requirements of paragraph (C)(ii)(I) of this 
                        subsection, at the level two reimbursement 
                        rates established in subsection (c)(5); or
                            ``(iii) for meals and supplements served to 
                        children in family or group day care homes in 
                        which the family or group day care home 
                        provider meets the income eligibility 
                        guidelines for free or reduced price meals and 
                        supplements set forth in section 9(b) of this 
                        Act, at the level one reimbursement rates 
                        established in section (c)(4) of this 
                        section.'';
            (5) by adding at the end of subparagraph (D) (as 
        redesignated by paragraph (3)) the following: ``In addition, 
        family or group day care home sponsoring organizations shall 
        receive for their administrative expenses an additional $10 per 
        month for each home located in a low-income area.''; and
            (6) by adding after subparagraph (E) (as redesignated by 
        paragraph (3)) the following new subparagraphs:
                    ``(F) Notwithstanding subparagraph (C), 
                reimbursement shall not be provided 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 income eligibility guidelines for 
                free or reduced price meals under section 9(b) of this 
                Act. Where so qualifying, the family or group day care 
                home sponsoring organization shall be reimbursed for 
                those meals and supplements at the level one rates 
                established in subsection (c)(4).
                    ``(G) For family or group day care home providers 
                who elect to use the procedures under paragraph 
                (3)(C)(ii) of this subsection, the Secretary shall 
                implement streamlined and simplified counting and 
                claiming procedures, provided that such procedures do 
                not compromise program accountability.
                    ``(H) Sponsoring organizations of family or group 
                day care homes (other than those located in low-income 
                areas) may receive the level one reimbursement rates 
                for meals and supplements established in subsection 
                (c)(4) of this section for those children with a parent 
                participating in the programs established under part F 
                or G of title IV of the Social Security Act, the at-
                risk child care program under title IV of such Act, or 
                a Federal or a State child care program with an income 
                eligibility limit that does not exceed the income 
                eligibility guidelines for free or reduced price meals 
                and supplements set forth in section 9(b) of this Act.
                    ``(I) For purposes of this section, `low-income 
                areas' is defined to mean `areas in which poor economic 
                conditions exist' as defined in section 13(a)(1)(C) of 
                this Act.
                    ``(J) For purposes of this section, determinations 
                made by the State agency which establish that a family 
                or a group day care home is located in a `low income 
                area' shall be in effect for 3 years, unless the State 
                agency determines that the area in which the home is 
                located is no longer a `low income area'.
                    ``(K) The Secretary shall make payments, totalling 
                not more than $5,000,000 in each of fiscal years 1997, 
                1998, 1999, and 2000 to provide grants to States for 
                the purpose of providing assistance, including grants 
                to family or group day care home sponsoring 
                organizations, to assist family or group day care homes 
                in low-income areas to become licensed or approved for 
                the program under this section. Of the amount of funds 
                available to each State under this subparagraph, an 
                amount not to exceed 30 percent may be retained by the 
                State to carry out the purposes of this subparagraph. 
                Any payments received under this subparagraph shall be 
                in addition to payments which States receive under 
                subsection (b) of this section.''.
    (c) Effective Dates.--
            (1) Except as provided in paragraph (2), the amendments 
        made by subsections (a) and (b) shall take effect on July 1, 
        1996.
            (2) The amendment made by subsection (b)(1) shall take 
        effect on the date of enactment of this Act.

SEC. 905. STATE RETENTION OF AMOUNTS RECOVERED.

    Section 16(a) of the Food Stamp Act of 1977 (7 U.S.C. 2025(a)) is 
amended by striking ``1995'' both places it appears in the proviso of 
the first sentence and inserting in both places in lieu thereof 
``2004''.

SEC. 906. COMMODITY PROGRAM INCOME INELIGIBILITY.

    Notwithstanding any other provision of law, a person with annual 
off-farm adjusted gross income in excess of $100,000, as determined by 
the Secretary of Agriculture, shall not be eligible to receive from the 
Commodity Credit Corporation income support and price support through 
loans, purchases, payments, and other operations. The Secretary of 
Agriculture shall issue regulations defining the term ``person'' which 
shall conform, to the extent practicable, to the regulations issued in 
accordance with section 1001 of the Food Security Act of 1985, as 
amended.

SEC. 907. AMENDMENTS RELATED TO SUPERFUND TAX EXTENSION.

    (a) Extension of Termination Date.--Paragraph (1) of section 59A(e) 
of the Internal Revenue Code of 1986 (26 U.S.C. 59A(e)(1)) is amended 
by striking ``January 1, 1996'' and inserting ``February 1, 1998''.
    (b) Adjustments to Amounts Collected.--Paragraph (3) of section 
4611(e) of the Internal Revenue Code of 1986 (26 U.S.C. 4611(e)(3)) is 
amended--
            (1) by striking ``December 31, 1995'' and inserting 
        ``September 30, 1998'';
            (2) by striking ``$11,970,000,000'' each time it appears 
        and inserting ``$15,500,000,000''; and
            (3) by striking ``January 1, 1996'' and inserting ``October 
        1, 1998''.
    (c) Effective Date.--The amendments made by subsections (a) and (b) 
shall apply to amounts collected and amounts credited after the date of 
the enactment of this Act.

SEC. 908. FEDERAL RAILROAD ADMINISTRATION USER FEES.

    Section 216 of the Federal Railroad Safety Act of 1970 (45 U.S.C. 
447) is amended--
            (1) by striking subsection (a)(3) and inserting the 
        following:
            ``(3) Fees established under this section shall be assessed 
        to railroads subject to this chapter and shall cover all costs 
        incurred by the Federal Railroad Administration in 
        administering this chapter, and those laws transferred to the 
        jurisdiction of the Secretary of Transportation by subsections 
        (e)(1), (2), and (6)(A) of section 1655 of title 49, other than 
        activities described in section 431(a)(2) of this title.'';
            (2) by inserting before the period in subsection (c) ``, 
        and those laws transferred to the jurisdiction of the Secretary 
        of Transportation by subsections (e)(1), (2), and (6)(A) of 
        section 1655 of title 49''; and
            (3) by striking subsections (e) and (f).

SEC. 909. SPECIAL EARNED INCOME TAX CREDIT RULES FOR MILITARY 
              PERSONNEL.

    (a) Modified Residency Requirement.--Subparagraph (E) of section 
32(c)(3) (defining qualifying child) of the Internal Revenue Code of 
1986 is amended by adding at the end the following sentence: ``The 
preceding sentence does not apply during any period during which the 
taxpayer is stationed outside the United States while serving on 
extended active duty (as defined in section 1034(h)(3)) with the Armed 
Forces of the United States.''
    (b) Reporting Military Earned Income.--Subsection (a) of section 
6051 (relating to receipts for employees) of the Internal Revenue Code 
of 1986 is amended by striking ``and'' at the end of paragraph (8), by 
striking the period at the end of paragraph (9) and inserting in lieu 
thereof ``, and'', and by inserting after paragraph (9) the following 
paragraph:
            ``(10) in the case of an employee who is a member of the 
        Armed Forces of the United States, the total amount of earned 
        income (as defined in section 32(c)(2)).''.
    (c) Advance Payment of Earned Income tax Credit.--Paragraph (1) of 
section 3507(c) (defining earned income advance amount) of the Internal 
Revenue Code of 1986 is amended by adding at the end the following 
sentence: ``For purposes of subparagraph (A) in the case of an employee 
who is a member of the Armed Forces of the United States, the 
employee's earned income (as defined in section 32(c)(2)) shall be 
taken into account rather than the employee's wages.''.
    (d) Effective Dates.--The amendments made by this section shall 
apply to taxable years beginning and remuneration paid after December 
31, 1994.

SEC. 910. NONRESIDENT ALIENS NOT ELIGIBLE FOR EARNED INCOME TAX CREDIT.

    (a) In General.--Section 32(c)(1) (defining eligible individual) of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
            ``(E) Exception for nonresident aliens.--The term `eligible 
        individual' does not include a nonresident alien unless an 
        election under section 6013(g) (relating to treating a 
        nonresident alien individual as a resident of the United 
        States) or section 6013(h) (relating to the year in which a 
        nonresident alien becomes a resident of the United States) is 
        in effect for the taxable year with respect to the nonresident 
        alien.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after December 31, 1994.

SEC. 911. EXTENSION OF CERTAIN CUSTOMS FEES.

    Subsection (j)(3) of section 13031 of the Consolidated Omnibus 
Budget Reconciliation Act of 1985, as amended, (19 U.S.C. 58c), is 
amended to read as follows:
    ``(3) Fees may not be charged under subsection (a) of this section 
after September 30, 2004.''.

                        TITLE X--EFFECTIVE DATES

SEC. 1001. EFFECTIVE DATES.

    (a) In General.--Except as otherwise provided and subject to 
subsection (b), the amendments and repeals made by this Act, other than 
title VI, shall become effective with respect to periods beginning on 
or after October 1, 1995.
    (b) The Secretary of Health and Human Services may, upon the 
request of a State, delay the effective date prescribed by subsection 
(a) with respect to such State upon a showing of circumstances beyond 
the State's control, but such extension may not extend beyond October 
1, 1996.
    (c) Notwithstanding any other provision of law, no State shall be 
found to have failed to comply with any requirement imposed on such 
State's programs by or pursuant to the amendments made by titles I and 
II of this Act by reason of its failure to have such program (or 
requirements) in effect Statewide if such program is in effect 
Statewide not later than 2 years after the effective date specified in 
subsection (a), or 2 years after such later date as is approved by the 
Secretary pursuant to subsection (b).
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